S-1 1 a2215780zs-1.htm S-1

Use these links to rapidly review the document
TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on July 12, 2013.

Registration No. 333-              

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



ClubCorp Holdings, Inc.
(Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction of
incorporation or organization)
  7997
(Primary Standard Industrial Classification Code Number)
  20-5818205
(I.R.S. Employer
Identification Number)

3030 LBJ Freeway, Suite 600
Dallas, Texas 75234
(972) 243-6191

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)



Eric L. Affeldt
President and Chief Executive Officer
ClubCorp Holdings, Inc.
3030 LBJ Freeway, Suite 600
Dallas, Texas 75234
(972) 243-6191
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

William B. Brentani, Esq.
Simpson Thacher & Bartlett LLP
2475 Hanover Street
Palo Alto, California 94304
Tel: (650) 251-5000
Fax: (650) 251-5002

 

Patrick S. Brown, Esq.
Sullivan & Cromwell LLP
1888 Century Park East, 21st Floor
Los Angeles, California 90067
Tel: (310) 712-6600
Fax: (310) 712-8800



Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.

            If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. o

            If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

            If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

            If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

            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 the definition of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o



CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities
to be Registered

  Proposed Maximum
Aggregate Offering Price(1)(2)

  Amount of
Registration Fee

 

Common stock, $0.01 par value

  $100,000,000   $13,640

 

(1)
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)
Includes offering price of shares that the underwriters have the option to purchase.

            The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


Table of Contents

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor do we or the selling stockholder seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated July 12, 2013.

                    Shares

LOGO

ClubCorp Holdings, Inc.

Common Stock



          This is an initial public offering of shares of common stock of ClubCorp Holdings, Inc. ClubCorp Holdings, Inc. is offering              of the shares to be sold in this offering. The selling stockholder identified in this prospectus is offering an additional             shares. ClubCorp Holdings, Inc. will not receive any of the proceeds from the sale of the shares being sold by the selling stockholder.

          Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $              and $             . We intend to apply to have our shares of common stock listed on the New York Stock Exchange (the "NYSE"), subject to notice of issuance, under the symbol "       ". After the completion of this offering, affiliates of KSL Capital Partners, LLC ("KSL") will continue to beneficially own a majority of the voting power of all outstanding shares of our common stock. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the NYSE. See "Principal and Selling Stockholders".

          We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act and, as such, may elect to comply with certain reduced reporting requirements after this offering.

          See "Risk Factors" on page 16 to read about factors you should consider before buying shares of our common stock.



          Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.



 
Per Share
 
Total
 

Initial public offering price

  $            $                    

Underwriting discount

  $            $                    

Proceeds, before expenses, to ClubCorp Holdings, Inc

  $            $                    

Proceeds, before expenses, to the selling stockholder

  $            $                    

          To the extent that the underwriters sell more than             shares of common stock, the underwriters have the option to purchase up to an additional             shares from the selling stockholder at the initial public offering price less the underwriting discount.



          The underwriters expect to deliver the shares against payment in New York, New York on                          , 2013.

Goldman, Sachs & Co.   Jefferies   Citigroup



   

Prospectus dated                          , 2013.


GRAPHIC


Table of Contents


TABLE OF CONTENTS

 
 
Page
 

Prospectus Summary

    1  

Risk Factors

    16  

Special Note Regarding Forward-Looking Statements

    39  

Use of Proceeds

    42  

Dividend Policy

    43  

Capitalization

    44  

Dilution

    46  

Selected Financial Data

    48  

Management's Discussion and Analysis of Financial Condition and Results of Operations

    51  

Business

    84  

Management

    107  

Executive Compensation

    113  

Certain Relationships and Related Party Transactions

    132  

Principal and Selling Stockholders

    134  

Description of Indebtedness

    136  

Description of Capital Stock

    140  

Shares Eligible for Future Sale

    150  

Certain United States Federal Income and Estate Tax Consequences to Non-U.S. Holders

    152  

Underwriting

    155  

Legal Matters

    159  

Experts

    159  

Where You Can Find Additional Information

    159  

Index to Financial Statements

    F-1  



          Through and including                           , 2013 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

          We, the selling stockholder and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We, the selling stockholder and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

          We, the selling stockholder and the underwriters have not done anything that would permit a public offering of the shares of our common stock or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside of the United States.

i


Table of Contents


PROSPECTUS SUMMARY

          This summary highlights information contained in greater detail elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our financial statements and the related notes included in this prospectus and the information set forth under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations". Unless otherwise indicated in this prospectus, "ClubCorp", "our company", "we", "us" and "our" refer to ClubCorp Holdings, Inc. and its subsidiaries.


Overview

          We are a membership-based leisure business and a leading owner-operator of private golf, country, business, sports and alumni clubs in North America. Our portfolio of 151 owned or operated clubs, with over 145,000 memberships, serves over 350,000 individual members. We are the largest owner of private golf and country clubs in the United States and own the underlying real estate for 80 of our 102 golf and country clubs (consisting of over 18 thousand acres of fee simple real estate). We lease, manage or operate through joint ventures the remaining 22 golf and country clubs. Likewise, we own one business club and lease, manage or operate through a joint venture the remaining 48 business, sports and alumni clubs. Our facilities are located in 23 states, the District of Columbia and two foreign countries. Our golf and country clubs are designed to appeal to the entire family, fostering member loyalty which we believe allows us to capture a greater share of our member households' discretionary leisure spending. Our business, sports and alumni clubs are designed to provide our members with a "home away from home" where they can work, network and socialize in private upscale locations. We offer our members privileges throughout our collection of clubs, and we believe that our diverse facilities, recreational offerings and social programming enhance our ability to attract and retain members across a number of demographic groups. We also have alliances with other clubs, resorts and facilities located worldwide through which our members can enjoy additional access, discounts, special offerings and privileges outside of our owned and operated clubs.

          ClubCorp was founded in 1957 with one country club in Dallas, Texas with the basic premise of providing a first-class club membership experience. In December 2006, we were acquired by affiliates of KSL, a private equity firm specializing in travel and leisure businesses. For fiscal year 2007 through March 19, 2013, we have invested over $357 million of capital to better position our clubs in their respective markets. This represents an investment of 7.8% of our total revenues, for such period, in our clubs to reinvent, upgrade, maintain, replace and build new and existing facilities and amenities focused on enhancing our members' experience. Through a combination of consumer research and experimentation, capital investment and relevant programming, we have sought to "reinvent" the modern club experience to promote greater usage of our facilities. We believe that greater usage results in additional ancillary spend and improved member retention. From 2007 through 2012, we retained an average annualized membership base of 83.7% in golf and country clubs and 75.3% in business, sports and alumni clubs, for a blended retention rate of 79.7%, for such period. From 2007 through 2012, we "reinvented" 12 golf and country clubs and 13 business, sports and alumni clubs through capital investment. In 2013, we are investing additional reinvention capital in 11 clubs, and we will continue to evaluate opportunities to apply our reinvention strategy in the future. We have created new membership programming, such as our Optimal Network Experiences ("O.N.E.") offering that provides members access to benefits and special offerings in their local community, network-wide and beyond, in addition to benefits at their home club. In addition, from fiscal year 2007 through March 19, 2013, we have spent over

 

1


Table of Contents

$40 million to acquire seven golf and country clubs and to develop a new alumni club, further expanding our portfolio of clubs and broadening the reach of our network.

          Our operations are organized into two principal business segments: (1) golf and country clubs and (2) business, sports and alumni clubs. Our golf and country club segment includes a broad variety of clubs designed to appeal to a diverse group of families and individuals who lead an active lifestyle and seek a nearby outlet for golf, tennis, swimming and other outdoor activities. Our business clubs are generally located in office towers or business complexes and cater to business executives, professionals and entrepreneurs with a desire to entertain clients, expand their business networks, work and socialize in a private, upscale location. Our sports clubs include a variety of fitness and racquet facilities. Our alumni clubs are associated with universities with large alumni networks, and are designed to provide a connection between the university and its alumni and faculty.

          For the fiscal year ended December 25, 2012, golf and country clubs accounted for 77% of our total revenues and business, sports and alumni clubs accounted for 23% of our total revenues. As of March 19, 2013, our total debt balance was $791.7 million. We anticipate using $145.25 million of the proceeds from this offering to pay down, in part, our 10% Senior Notes due 2018 (the "Senior Notes"). Our total debt balance after the completion of this offering will be approximately $650 million.


Competitive Strengths

          Membership-Based Leisure Business with Significant Recurring Revenue.    We operate with the central purpose of building relationships and enriching the lives of our members. We focus on creating a dynamic and exciting setting for our members by providing them with an environment in which to engage in a variety of leisure, recreational and networking activities. We believe our clubs have become an integral part of many of our members' lives and, as a result, the vast majority of our members retain their memberships each year, even during the recent recession.

          Our large base of memberships creates a stable recurring revenue stream. As of March 19, 2013, our owned and operated clubs have over 145,000 memberships, including over 350,000 individual members. For the fiscal year ended December 25, 2012, membership dues totaled $347.1 million, representing 46.0% of our total revenues. During the same time period, our membership retention was 83.6% in golf and country clubs and 77.1% in business, sports and alumni clubs for a blended retention rate of 80.7%.

 

2


Table of Contents

          The following charts present our membership count and annual retention rates for our two business segments for the past 10 years:

GRAPHIC

          The proven strength and resiliency of our membership base from peak to trough is an attractive attribute of our business. We believe that if our members remain satisfied with their club experience, they will remain loyal and frequent users of our clubs, reducing our sensitivity to adverse economic conditions and providing us with operating leverage in favorable economic conditions and a recovering real estate market. Although we experienced a decline of 2.4% in memberships from 2007 to 2012, our total revenue per membership increased by 2.5% during the same time period, in each case on a compounded annual growth rate basis. According to our 2012 fiscal year data, an average member visits one of our clubs 30 times per year with an average spend of $4,100 per year, including dues. An average golf member visits one of our clubs 57 times per year with an average spend of $7,200 per year, including dues.

          We believe that the demographics of our member base are also an important attribute of our business. Data provided by Buxton, a database and mapping service, indicates that our golf and country club members have on average an annual household income of $180,000 to $200,000 and a primary home value of $500,000 to $600,000. An analysis from the same database for our business, sports and alumni club members indicates that they have on average an annual household income of $155,000 to $180,000 and a primary home value of $440,000 to $550,000. We believe that these demographic profiles were more resilient during the recent recession, as evidenced by our annual retention rates, and will spend more in an improving economy and recovering real estate market than the general population.

          Nationally-Recognized and Award-Winning Clubs.    Our golf and country clubs, with approximately 132 18-hole course equivalents, represent the core assets of our company and are strategically concentrated in sunbelt markets and other major metropolitan areas. We believe that our clubs are among the top private golf clubs within their respective markets based on the quality of our facilities, breadth of amenities and number of relevant programs and events. These clubs are anchored by our golf courses, a number of which have been designed by some of the world's best-known golf course architects, including Jack Nicklaus, Tom Fazio, Pete Dye, Arthur Hills and

 

3


Table of Contents

Robert Trent Jones. Likewise, a number of our golf courses have won national and local awards and have appeared on national and local "best of" lists for golf, tennis and dining. The operations and maintenance of our golf courses and facilities have led to our selection as host of several high-profile PGA and LPGA events, leading to local and national media recognition as well as event revenue, club utilization and membership sales.

          Outside of our golf offering, our clubs provide a variety of additional amenities and services that we believe appeal to the whole family, such as well-appointed clubhouses, a variety of dining venues, event and meeting spaces, tennis facilities, exercise studios, personal training, spa services, resort-style pools and water features and outdoor gathering spaces. We offer over 600 tennis courts across more than 60 clubs, and our Brookhaven Country Club features a nationally-recognized private tennis facility.

          Many of our 49 business, sports and alumni clubs are located in the heart of the nation's influential business districts, with locations in 17 of the top 25 metropolitan statistical areas, and offer an urban location for executives to network with colleagues, conduct business and socialize with friends. We believe our business clubs are choice locations for regional and local business and civic receptions with business amenities to support these events. These clubs also host numerous upscale private events, such as weddings, bar and bat mitzvahs and holiday parties. These events generate substantial traffic flow through our clubs, helping to drive membership sales and club utilization. In addition, the six alumni clubs we operate offer a unique setting for alumni and faculty to share common heritage and experiences.

          Expansive Portfolio of Clubs and Alliances Providing Scale.    As the largest owner-operator of private clubs in the United States, we believe that our expansive portfolio of clubs allows us to drive membership growth by providing a compelling value proposition through product variety. By clustering our clubs, many of our members have local access to both urban business-focused clubs as well as suburban family-oriented clubs. For an incremental monthly charge, our reciprocal access program gives our members access to our owned and operated clubs, as well as the facilities of others with which we have an alliance relationship, both domestically and internationally. As of December 25, 2012, approximately 40% of our members took advantage of one or more of our upgrade programs, as compared to 38% of members as of the end of the prior fiscal year. Incremental dues relating to our upgrade programs accounted for approximately $28 million of our annual dues for the fiscal year ended December 25, 2012. By providing members with numerous services and amenities that extend beyond their home clubs to all of the clubs we own and operate and the clubs with which we have alliances, we believe we can drive membership growth and create a key market differentiator which would be difficult for our competitors to replicate.

          We believe the size of our portfolio of clubs provides us with significant economies of scale, creating operational synergies across our clubs and enabling us to consolidate our human resources, sales and marketing, accounting and technology departments. We also benefit from centralized purchasing to receive preferred pricing on supplies, equipment and insurance.

          Diversification.    As a result of our size and geographic diversity, our operating revenues and cash flows are not reliant on any one club or geographic region. Our 10 largest clubs by revenue accounted for 22.6% of our club revenues for the fiscal year ended December 25, 2012, and no one of these clubs accounted for greater than 3.2% of club revenue for such period.

          We have strategic concentrations of golf and country clubs in Texas, California and Florida, representing 31%, 21% and 6%, respectively, of total club revenue for the fiscal year ended December 25, 2012. While we have greater presence in these states where climates are typically conducive to year-round play, we believe that the broad geographic distribution of our portfolio of clubs helps mitigate the impact of adverse regional weather patterns and fluctuations in regional economic conditions. To allow for maximization of golf rounds, we employ a corporate director of

 

4


Table of Contents

agronomy and regional golf superintendents who oversee our strong agronomic practices, helping to extend golf play throughout the climate zones in which we operate.

          Ownership and Control of Golf and Country Clubs.    As the fee simple real estate owner for 80 of our 102 golf and country clubs, we believe that we have an advantage over other clubs as we retain the ability to maximize the value of our clubs and business. By owning the real estate underlying our clubs, we have been able to implement capital plans that inure to our benefit and generate positive returns on our investments. Owning many of our assets also gives us the ability to recycle our capital by selling underperforming clubs or non-essential tracts of land.

          Seasoned Management Team.    We have a highly experienced and dedicated professional management team. Our seven current executive officers had a combined 182 years of related career experience, including on average over 20 years of hospitality and club specific experience through the end of fiscal year 2012. Eric Affeldt has acted as President and Chief Executive Officer for ClubCorp since December 2006 and has over 22 years of experience leading golf and resort companies, including as president and chief executive officer of KSL Fairways Golf Corporation, as well as general manager for Doral Golf Resort & Spa in Miami and PGA West and La Quinta Resort & Club in California. Curt McClellan, our Chief Financial Officer and Treasurer, has been with our company since November 2008 and is responsible for leading the corporate finance and accounting teams. The operational heads of our two business segments, Mark Burnett and David Woodyard, have significant tenure in their fields with over 55 years of combined experience managing golf and country clubs and business, sports and alumni clubs. Our national sales and marketing team is led by four individuals with over 100 years of collective experience with us.

          We have also attracted and retained qualified, dedicated general managers for our clubs. As of March 19, 2013, our club general managers averaged 12 years of service with us. These managers are tasked with the day-to-day responsibility of running the clubs and executing on the vision of senior management.


Our Business Strategy

          Attracting and retaining members and increasing member usage by providing the highest quality club experience are the biggest drivers of our revenue growth. In order to drive revenue growth, we use the following strategies:

          Employ Experienced Membership Sales Force.    We employ club-based, professional sales personnel who are further supported by an array of regional and corporate sales and marketing teams. Our sales team receives comprehensive sales training through our proprietary "Bell Notes" training program that we believe addresses all elements of the sales process from prospecting to welcoming a new member to their club. Our sales efforts are supported by regional and national programs and upgrade offerings that typically are not found at private clubs, such as the access to our extensive portfolio of clubs and benefits. As a result, our sales team members are able to readily differentiate our clubs from competitive facilities.

          We periodically obtain feedback from our membership base to effectively understand current membership demographics and preferences to better target member prospects. We believe our well-trained and incentivized sales team will continue to drive membership growth and we believe we are well-positioned to capitalize on improving economic conditions.

          Leverage Our Portfolio and Alliance Offerings.    We offer a variety of products, services and amenities through upgrade offerings that provide members access to our portfolio of clubs and leverage our alliances with other clubs, resorts and facilities both domestically and internationally.

 

5


Table of Contents

          In 2010, we strategically introduced our O.N.E. program and have continued to market it aggressively across most of our golf and country clubs. O.N.E. is an offering that combines what we refer to as "comprehensive club, community and world benefits." With this offering, members receive 50% off a la carte dining at their home club; preferential offerings to clubs in their community (including those owned by us), as well as at local spas, restaurants and other venues; and complimentary privileges to more than 200 golf and country, business, sporting and athletic clubs when traveling outside of their community with additional offerings and discounts to more than 700 renowned hotels, resorts, restaurants and entertainment venues. These programs are designed to increase our recurring monthly revenues while providing a value proposition to our members that helps drive increased usage of our facilities. As of March 19, 2013, 70 of our clubs offer the O.N.E. program to their members, and we continue to evaluate opportunities for further expansion of O.N.E. into additional geographic areas.

          We have established alliances with other leisure-oriented businesses. We target alliances with recognized brands that appeal to our members and that can further enhance our members' variety of choices extending beyond their home club. We promote our member benefits through our in-house marketing tools, make reservations convenient for members by providing an in-house concierge (ClubLine) and offer access to an inventory of VIP tickets through our own web portal (TicketLine). We have dedicated staff that continually seek additional reciprocal arrangements and alliances with other hospitality-oriented businesses.

          Develop New and Relevant Programming.    Members who frequently utilize our facilities typically tend to spend more at our clubs and remain members longer. As a result, we believe that there are significant opportunities to increase operating revenues by making our clubs more relevant to our members. Our goal is to provide numerous opportunities for all members and their families to utilize our facilities. Members also participate in clubs within their club, whereby members with similar interests come together for recreational, educational, charitable, social and business-oriented purposes. We believe this reinforces the club becoming integral to the lives of our members. We will continue to promote activities and events occurring at members' home clubs, and believe we can further tailor our programming to address members' particular preferences and interests. We capture a member's interest profile when a member joins a club and we study member usage patterns and obtain feedback from our members periodically to keep our offerings relevant to members' changing lifestyles.

          Take Advantage of Improving Economic Conditions.    We believe improving economic conditions and improvements in local housing markets reinforce the foundation for member growth. Although some of the metropolitan areas where we operate clubs were disproportionately affected by the recent economic downturn, related decline in home prices and increase in foreclosure rates, our membership base remained resilient, which we believe can be attributed to our favorable membership demographics. Economic indicators, such as increased consumer confidence, discretionary spending and home sales and construction support an environment where we believe prospective members will choose to join our clubs. Since 2008, our new memberships have grown steadily, and over this four-year period we added on average approximately 25,000 new memberships each year.

          Reinvent Through Strategic Capital Investment.    We believe our ability to conceptualize, fund and execute club reinventions gives us a significant competitive advantage over member-owned and individual privately-owned clubs which may have difficulty gaining member consensus and financial backing to execute such improvements. In 2007, we embarked on the "reinvention" of our clubs through strategic capital investment projects designed to drive membership sales, facility usage and member retention. We believe this strategy results in increased member visits during various parts of the day for both business and pleasure, allowing our clubs to serve multiple

 

6


Table of Contents

purposes depending on the individual needs of our members. Elements of reinvention capital expenditures include "Touchdown Rooms", which are small private meeting rooms allowing members to hold impromptu private meetings while leveraging the other services of the clubs. "Anytime Lounges" provide a contemporary and casual atmosphere to work and network, while "Media Rooms" provide state of the art facilities to enjoy various forms of entertainment. Additional reinvention elements include refitted fitness centers, enhanced pool area amenities such as shade cabanas, pool slides and splash pads, redesigned golf practice areas for use by beginners to avid golfers, and newly created or updated indoor and outdoor dining and social gathering areas designed to take advantage of the expansive views and natural beauty of our clubs.

          As of December 25, 2012, 25 of our clubs were considered "major reinvention" clubs and received significant reinvention capital. We define "major reinvention" clubs as those clubs receiving $750,000 or more gross capital spend on a project basis. Additionally, as of March 19, 2013, we have major reinventions currently underway at 11 of our clubs. We spent $17.7 million on reinvention capital in 2012 and anticipate spending approximately $26.0 million in fiscal year 2013. Further, we have identified additional projects at more than 15 golf and country clubs and seven business, sports and alumni clubs where we may strategically invest capital during fiscal year 2014. We believe these additional major reinvention projects represent opportunities to increase revenues and generate a positive return on our investment, although we cannot guarantee such returns. We will continue to identify and prioritize capital projects for fiscal years 2015 and beyond to add reinvention elements.

          Pursue Selected Acquisitions.    Acquisitions allow us to expand our portfolio and alliance offerings. We believe the ability to offer access to our collection of clubs provides us a significant competitive advantage in pursuing acquisitions. In addition, newly acquired clubs may generally benefit from additional capital and implementation of our reinvention strategy. We believe there are many attractive acquisition opportunities available and we continually evaluate and selectively pursue these opportunities to expand our business. We also evaluate joint ventures and management opportunities that allow us to expand our operations and increase our recurring revenue base without substantial capital outlay. When we do make strategic acquisitions, we do so only after an evaluation to satisfy ourselves that we can add value given our external growth experience, facility assessment capabilities, operational expertise and economies of scale.

          Over the past two years, we have taken advantage of market conditions to expand our portfolio through the acquisition of five golf and country clubs and the entry into new agreements to manage and operate two additional golf and country clubs. In addition to our domestic initiatives, we believe there is an attractive market to extend our private club expertise through international management arrangements.


Industry Overview

          Our company is a membership-based leisure business closely tied to consumer discretionary spending. We believe that we compete for these discretionary consumer dollars against such businesses as amusement parks, spectator sports, ski and mountain resorts, fitness and recreational sports centers, gaming and casinos, hotels and restaurants. We believe that we will benefit from the recovery taking place in the leisure industry as evidenced by recent trends in GDP growth within our industry. According to the Bureau of Economic Analysis ("BEA"), from 2011 to 2012, leisure and hospitality industry's GDP growth increased by 3.5%, outperforming overall U.S. GDP growth of 2.2% during the same period.

 

7


Table of Contents


Summary of Risk Factors

          Our business is subject to numerous risks, which are described in the section entitled "Risk Factors" on page 17. You should carefully consider these risks before making an investment. In particular, the following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of our common stock and result in a loss of all or a portion of your investment:

    adverse conditions affecting the United States economy;

    our ability to attract and retain club members;

    changes in consumer spending patterns, particularly with respect to demand for products and services;

    unusual weather patterns, extreme weather events and periodic and quasi-periodic weather patterns, such as the El Niño/La Niña-Southern Oscillation;

    material cash outlays required in connection with refunds or escheatment of membership initiation deposits;

    impairments to the suitability of our club locations; and

    the other factors set forth in the section entitled "Risk Factors".


Corporate Information

          ClubCorp Holdings, Inc. was incorporated in the State of Nevada on November 10, 2010. Our principal executive offices are located at 3030 LBJ Freeway, Suite 600, Dallas, Texas 75234. Our telephone number is (972) 243-6191. Our website address is www.clubcorp.com. In addition, we maintain a Facebook page at www.facebook.com/clubcorp and a Twitter feed at www.twitter.com/clubcorp. Information contained on, or that can be accessed through, our website, Facebook page or Twitter feed does not constitute part of this prospectus and inclusions of our website address, Facebook page address and Twitter feed address in this prospectus are inactive textual references only. The information that can be accessed through our website is not part of this prospectus, and investors should not rely on any such information in deciding whether to purchase our common stock.


Our Sponsor

          After completion of this offering, affiliates of KSL will continue to control a majority of the voting power of our outstanding capital stock. KSL is a leading U.S. private equity firm dedicated to investing in travel and leisure businesses with offices in Denver, New York and London. Since its founding in 2005, KSL has raised over $3.4 billion of committed capital. For a discussion of certain risks, potential conflicts and other matters associated with KSL's affiliates' control, see "Risk Factors — Risks Relating to Our Business — We are controlled by affiliates of KSL, whose interests may be different than the interests of other investors" and "Description of Capital Stock".


Emerging Growth Company Status

          We are an "emerging growth company", as defined in the Jumpstart Our Business Startups Act enacted on April 5, 2012 (the "JOBS Act"). For as long as we are an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive

 

8


Table of Contents

compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding advisory "say-on-pay" and "say-when-on-pay" votes on executive compensation and shareholder advisory votes on golden parachute compensation.

          Under the JOBS Act, we will remain an emerging growth company until the earliest of:

    the last day of the fiscal year during which we have total annual gross revenues of $1 billion or more;

    the last day of the fiscal year following the fifth anniversary of the completion of this offering;

    the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; or

    the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934 (the "Exchange Act") (we will qualify as a large accelerated filer as of the first day of the first fiscal year after we have (i) more than $700 million in outstanding common equity held by our non-affiliates and (ii) been public for at least 12 months; the value of our outstanding common equity will be measured each year on the last day of our second fiscal quarter).

          The JOBS Act also provides that an emerging growth company may utilize the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 (the "Securities Act"), for complying with new or revised accounting standards. However, we are choosing to "opt out" of such extended transition period, and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.


Trade Names

          Our logos, "Associate Club"; "Associate Clubs"; "Building Relationships and Enriching Lives"; "ClubCater"; "ClubCorp"; "ClubCorp Charity Classic"; "ClubCorp Resorts"; "Club Corporation of America"; "ClubLine"; "Club Resorts"; "Club Without Walls"; "Fastee Course"; "Membercard"; "My Club. My Community. My World."; "Private Clubs"; "The Society"; "The World Leader in Private Clubs"; and "Warm Welcomes, Magic Moments and Fond Farewells" and other trade names, trademarks or service marks of our company appearing in this prospectus are the property of our company. This prospectus contains additional trade names, trademarks and service marks of other companies. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply relationships with, or endorsement or sponsorship of us by, these other companies.

 

9


Table of Contents

 


The Offering

Common stock offered by us

           shares

Common stock offered by the selling stockholder

 

         shares (       shares if the underwriters exercise their option to purchase additional shares in full)

Common stock to be outstanding after this offering

 

         shares

Option to purchase additional shares of common stock from the selling stockholder

 

The underwriters have an option to purchase a maximum of         additional shares of common stock from the selling stockholder. The underwriters can exercise this option at any time within 30 days from the date of this prospectus.

Use of proceeds

 

We estimate that the net proceeds to us from this offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $    million, based on the assumed initial public offering price of $    per share, which is the mid-point of the range set forth on the cover page of this prospectus. For a sensitivity analysis as to the initial public offering price and other information, see "Use of Proceeds".

 

We will use a portion of the net proceeds received by us from this offering to redeem $145.25 million in aggregate principal amount of our Senior Notes, plus accrued and unpaid interest thereon, and to pay approximately $14.5 million of redemption premium. This redemption is pursuant to a provision in the indenture governing the Senior Notes that permits us to redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 110% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date.

 

Approximately $    million of the net proceeds received by us from this offering and additional borrowings under our secured credit facilities (the "Secured Credit Facilities") will be used to make a one-time payment to an affiliate of KSL in connection with the termination of the Management Agreement as described in "Use of Proceeds".

 

To the extent we raise more proceeds in this offering than currently estimated, we will use such proceeds for general corporate purposes. To the extent we raise less proceeds in this offering than currently estimated, we will reduce the amount of the Senior Notes that will be redeemed.

 

10


Table of Contents

 

We will not receive any proceeds from the sale of shares of common stock offered by the selling stockholder, including upon the sale of shares if the underwriters exercise their option to purchase additional shares from the selling stockholder in this offering. See "Use of Proceeds".

Risk factors

 

See "Risk Factors" and the other information included in this prospectus for a discussion of the factors you should consider carefully before deciding to invest in our common stock.

Dividend policy

 

We intend to pay cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements and in any preferred stock, business prospects and other factors that our Board of Directors may deem relevant. Our ability to pay dividends depends in part on our receipt of cash distributions from our operating subsidiaries, which may be restricted from distributing us cash as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur. In particular, the ability of our subsidiaries to distribute cash to ClubCorp Holdings,  Inc. is limited by covenants in the credit agreement governing the Secured Credit Facilities and the indenture governing the Senior Notes. See "Dividend Policy", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Indebtedness" for a description of the restrictions on our ability to pay dividends.

Controlled company

 

After completion of this offering, affiliates of KSL will continue to control a majority of the voting power of our outstanding common stock. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the NYSE.

Proposed NYSE symbol

 

"       ".

          The number of shares of our common stock to be outstanding after this offering is based on     shares outstanding as of           , 2013 and excludes:

                 shares of common stock available for future grant under the ClubCorp Holdings, Inc. 2012 Stock Award Plan (the "Stock Plan").

          Except as otherwise indicated, all information in this prospectus assumes:

    a    -for-    stock split effective on         , 2013; and

    the effectiveness, at the time of this offering, of our amended and restated articles of incorporation and our amended and restated bylaws, the forms of which are filed as exhibits to the registration statement of which this prospectus is a part.

 

11


Table of Contents

 


SUMMARY FINANCIAL DATA

          The following table sets forth our summary financial data for the periods presented. Our fiscal year consists of a 52/53 week period ending on the last Tuesday of December. Each of our first, second and third fiscal quarters consists of 12 weeks and our fourth fiscal quarter consists of 16 weeks, with an entire week added onto the fourth quarter every five to six years. For 2012, 2011 and 2010, our fiscal years were comprised of the 52 weeks ended December 25, 2012, December 27, 2011 and December 28, 2010, respectively.

          The statements of operations data set forth below for the fiscal years ended December 25, 2012, December 27, 2011 and December 28, 2010 are derived from our audited consolidated financial statements that are included elsewhere in this prospectus. The statements of operations data set forth below for the 12 weeks ended March 19, 2013 and March 20, 2012 and the balance sheet data as of March 19, 2013 are derived from our unaudited consolidated condensed financial statements that are included elsewhere in this prospectus. The unaudited consolidated condensed financial statements were prepared on a basis consistent with our audited consolidated financial statements. The historical results presented below are not necessarily indicative of financial results to be achieved in future periods.

          This summary financial data should be read in conjunction with "Capitalization", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited consolidated financial statements and unaudited consolidated condensed financial statements and the related notes included elsewhere in this prospectus.

 

12


Table of Contents

 
  Fiscal Years Ended   Twelve Weeks Ended  
 
 
December 25,
2012
 
December 27,
2011
 
December 28,
2010(1)
 
March 19,
2013
 
March 20,
2012
 
 
  (in thousands, except per share, membership count, retention rate and revenue per membership data)
 

Statements of Operations Data:

                               

Revenues:

                               

Club operations

  $ 535,274   $ 513,282   $ 495,424   $ 114,338   $ 110,877  

Food and beverage

    216,269     203,508     189,391     39,916     38,121  

Other revenues

    3,401     3,172     2,882     806     708  
                       

Total revenues

    754,944     719,962     687,697     155,060     149,706  

Club operating costs exclusive of depreciation

    483,653     468,577     451,286     104,193     101,018  

Cost of food and beverage sales exclusive of depreciation

    68,735     64,256     59,671     13,868     12,943  

Depreciation and amortization

    78,286     93,035     91,700     16,155     18,603  

Provision for doubtful accounts

    2,765     3,350     3,194     710     742  

Loss (gain) on disposals and acquisitions of assets

    10,904     9,599     (5,380 )   1,219     (624 )

Impairment of assets

    4,783     1,173     8,936          

Equity in earnings from unconsolidated ventures

    (1,947 )   (1,487 )   (1,309 )   (217 )   (319 )

Selling, general and administrative

    45,343     52,382     38,946     9,908     10,550  
                       

Operating income

    62,422     29,077     40,653     9,224     6,793  

Interest expense

    (89,326 )   (84,609 )   (57,707 )   (19,580 )   (20,146 )

(Loss) income from continuing operations before taxes

    (23,603 )   (51,785 )   318,483     (10,281 )   (12,465 )

Income tax benefit (expense)

    7,528     16,421     (57,107 )   (205 )   2,799  

(Loss) income from continuing operations

  $ (16,075 ) $ (35,364 ) $ 261,376   $ (10,486 ) $ (9,666 )

Loss from discontinued clubs, net of tax

    (10,917 )   (258 )   (443 )   (5 )   (60 )

Net (loss) income

  $ (26,992 ) $ (35,622 ) $ 252,663   $ (10,491 ) $ (9,726 )

Net (loss) income attributable to ClubCorp Holdings, Inc. 

  $ (27,275 ) $ (36,197 ) $ 254,283   $ (10,450 ) $ (9,713 )

Per Share Data(2):

                               

(Loss) income from continuing operations attributable to ClubCorp Holdings, Inc., per share (basic and diluted)

  $ (16.36 ) $ (35.94 ) $ 261.03   $ (10.45 ) $ (9.65 )

Pro forma (loss) income from continuing operations attributable to ClubCorp Holdings, Inc. (basic and diluted)(3)

  $                 $          
                             

Weighted average shares outstanding, used in basic and diluted per share amounts

    1,000     1,000     1,000     1,000     1,000  

Cash distributions per common share

  $   $   $   $ 35.00   $  


Other Operational and Financial Data:


 

 

 

 

 

 

 

 

 

 

 

 

 

Membership count(4)

    144,765     143,572     143,623     145,066     143,166  

Retention rate(4)

    80.7 %   80.6 %   79.4 %   N/A     N/A  

Revenue per membership(5)

  $ 5,215   $ 5,015   $ 4,788   $ 1,069   $ 1,046  

Purchase of property and equipment

  $ 54,208   $ 47,940   $ 42,859   $ 7,862   $ 6,506  

Acquisitions of clubs

  $ 3,570   $ 22,756   $ 7,443   $   $  

Adjusted EBITDA(6)

 
$

166,189
 
$

157,173
 
$

150,151
 
$

29,764
 
$

26,211
 

 

13


Table of Contents

 

 
  As of March 19, 2013  
 
  (in thousands)
 

Balance Sheet Data:

       

Cash and cash equivalents

  $ 60,199  

Land and non-depreciable land improvements

    531,497  

Total assets

    1,695,544  

Total long-term funded debt(7)

    753,248  

Total long-term liabilities

    1,318,309  

Total equity

    98,673  

(1)
The statements of operations and balance sheet data reflect the ClubCorp Formation from November 30, 2010 (as described in "Management's Discussion and Analysis of Financial Condition and Results of Operations — ClubCorp Formation"), which was treated as a reorganization of entities under common control. A gain on extinguishment of debt was recognized as lenders under certain facilities forgave debt in conjunction with the ClubCorp Formation.

(2)
All share and per share amounts reflect a 1,000 for 1 forward stock split of our common stock that took place on March 15, 2012.

(3)
On December 26, 2012, we declared a special cash distribution of $35.0 million to the owners of our common stock. As this offering is expected to occur within 12 months of the distribution and we have a net loss for fiscal year 2012 and the 12 weeks ended March 19, 2013, for earnings per share purposes the distribution is deemed to be paid out of proceeds of this offering rather than current period earnings. As such, the unaudited pro forma earnings per share data for the fiscal year ended December 25, 2012 and the 12 weeks ended March 19, 2013 give effect to the number of shares the proceeds from which would be necessary to pay the distribution.

(4)
As of the respective period end. Does not include certain international club memberships.

(5)
Defined as total revenue divided by total memberships.

(6)
EBITDA is calculated as net income plus interest, taxes, depreciation and amortization less interest and investment income. Adjusted EBITDA is based on the definition of Consolidated EBITDA as defined in the credit agreement governing the Secured Credit Facilities and may not be comparable to other companies. Adjusted EBITDA is included because the indenture governing the Senior Notes and the credit agreement governing the Secured Credit Facilities contain certain financial and non-financial covenants which require CCA Club Operations Holdings, LLC and/or ClubCorp Club Operations, Inc. (each a wholly-owned subsidiary of ours) and restricted subsidiaries to maintain specified financial ratios and utilize this measure of Adjusted EBITDA.

We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about the calculation, and compliance with certain financial covenants in the indenture governing the Senior Notes and under the Secured Credit Facilities, as Adjusted EBITDA is a material component of these covenants. In addition, investors, lenders, financial analysts and rating agencies have historically used EBITDA-related measures in our industry, along with other measures, to evaluate a company's ability to meet its debt service requirement, to estimate the value of a company and to make informed investment decisions. Adjusted EBITDA is also considered when evaluating our executive compensation.

Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States ("GAAP") and should not be considered as an alternative to, or more meaningful than, net income (as determined in accordance with GAAP) as a measure of our operating results or net cash provided by operating activities (as determined in accordance with GAAP) as a measure of our liquidity. Our measurements of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

 

14


Table of Contents

    We believe that the most directly comparable GAAP measure to Adjusted EBITDA is net (loss) income. The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA:

 
  Fiscal Years Ended   Twelve Weeks Ended  
 
  December 25,
2012
  December 27,
2011
  December 28,
2010
  March 19,
2013
  March 20,
2012
 
 
  (in thousands)
 

Net (loss) income

  $ (26,992 ) $ (35,622 ) $ 252,663   $ (10,491 ) $ (9,726 )

Interest expense

    89,326     84,609     57,707     19,580     20,146  

Income tax (benefit) expense

    (7,528 )   (16,421 )   57,107     205     (2,799 )

Interest and investment income

    (1,212 )   (138 )   (714 )   (75 )   (23 )

Depreciation and amortization

    78,286     93,035     91,700     16,155     18,603  
                       

EBITDA

    131,880     125,463     458,463     25,374     26,201  

Impairments and disposition of assets(a)

    26,604     11,030     12,269     1,224     (564 )

Non-cash adjustments(b)

    2,280     363     1,661     882     53  

Other adjustments(c)

    2,865     15,311     2,907     1,693     (70 )

Acquisition adjustment(d)

    2,560     5,006     9,274     591     591  

Gain on extinguishment of debt(e)

            (334,423 )        
                       

Adjusted EBITDA

  $ 166,189   $ 157,173   $ 150,151   $ 29,764   $ 26,211  
                       

(a)
Includes non-cash impairment charges related to: liquor licenses, property and equipment, equity method investments and mineral rights as well as net loss from discontinued clubs.

(b)
Includes non-cash items related to purchase accounting associated with the acquisition of ClubCorp, Inc. in 2006, by affiliates of KSL, amortization of proceeds received from certain mineral lease and surface right agreements and expense recognized for our long-term incentive plan.

(c)
Other adjustments include management fees and expenses paid to an affiliate, earnings of equity method investments less cash distributions from said investments, income or loss attributable to non-controlling equity interests of continuing operations, non-recurring charges incurred in connection with the ClubCorp Formation, costs and other non-recurring charges permitted to be excluded by the credit agreement governing the Secured Credit Facilities.

(d)
Represents deferred revenue related to initiation deposits and fees that would have been recognized in the applicable period but for the application of purchase accounting in connection with the purchase of ClubCorp, Inc. in 2006.

(e)
Represents the gain on extinguishment of debt in conjunction with the ClubCorp Formation.
(7)
Includes total long-term debt less capital leases, other indebtedness and notes payable related to certain non-core development entities.

 

15


Table of Contents


RISK FACTORS

          Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this prospectus, before deciding whether to invest in shares of our common stock. The occurrence of any of the events described below could harm our business, financial condition, results of operations and growth prospects. In such an event, the trading price of our common stock may decline and you may lose all or part of your investment.


Risks Relating to Our Business

Economic recessions or downturns could negatively affect our business, financial condition and results of operations.

          A substantial portion of our revenue is derived from discretionary or leisure spending by our members and guests and such spending can be particularly sensitive to changes in general economic conditions. The recent recession led to slower economic activity, increased unemployment, concerns about inflation and energy costs, decreased business and consumer confidence, reduced corporate profits and capital spending, adverse business conditions and lower levels of liquidity in many financial markets, which negatively affected our business, financial condition and results of operations. For example, for the fiscal years ended December 25, 2012, December 27, 2011, December 28, 2010, December 29, 2009 and December 30, 2008, we experienced attrition (i.e., members who resign) in member count of 16.4%, 15.9%, 17.2%, 17.0% and 17.4%, respectively, in our golf and country clubs and 22.9%, 23.5%, 24.2%, 27.1% and 27.0%, respectively, in our business, sports and alumni clubs. A renewed economic downturn in the United States may lead to increases in unemployment and loss of consumer confidence which would likely translate into resignations of existing members, a decrease in the rate of new memberships and reduced spending by our members. As a result, our business, financial condition and results of operations may be materially adversely affected by a renewed economic downturn.

          Our businesses will remain susceptible to future economic recessions or downturns, and any significant adverse shift in general economic conditions, whether local, regional, national or global, would likely have a material adverse effect on our business, financial condition and results of operations. During such periods of adverse economic conditions, we may be unable to increase membership dues or the price of our products and services and experience increased rates of resignations of existing members, a decrease in the rate of new memberships or reduced spending by our members, any of which may result in, among other things, decreased revenues and financial losses. In addition, during periods of adverse economic conditions, we may have difficulty accessing financial markets or face increased funding costs, which could make it more difficult or impossible for us to obtain funding for additional investments and harm our results of operations.

We may not be able to attract and retain club members, which could harm our business, financial condition and results of operations.

          Our success depends on our ability to attract and retain members at our clubs and maintain or increase usage of our facilities. Changes in consumer tastes and preferences, particularly those affecting the popularity of golf and private dining, and other social and demographic trends could adversely affect our business. Historically, we have experienced varying levels of membership enrollment and attrition rates and, in certain areas, decreased levels of usage of our facilities. Significant periods where attrition rates exceed enrollment rates or where facilities usage is below historical levels would have a material adverse effect on our business, results of operations and financial condition. For the fiscal year ended December 25, 2012, 46.0% of our total operating revenues came from monthly membership dues. During the same period, 22.9% of our business, sports and alumni club memberships (approximately 14,500 memberships), and 16.4% of our golf and country club memberships (approximately 13,000 memberships) were resigned, resulting in a

16


Table of Contents

net (loss) gain in memberships of (1.4)% and 0.3%, respectively, after the addition of new memberships. If we cannot attract new members or retain our existing members, our business, financial condition and results of operations could be harmed.

Changes in consumer spending patterns, particularly discretionary expenditures for leisure, recreation and travel, are susceptible to factors beyond our control that may reduce demand for our products and services.

          Consumer spending patterns, particularly discretionary expenditures for leisure, recreation and travel, are particularly susceptible to factors beyond our control that may reduce demand for our products and services, including demand for memberships, golf, vacation and business travel and food and beverage sales. These factors include:

    low consumer confidence;

    depressed housing prices;

    changes in the desirability of particular locations, residential neighborhoods, office space or travel patterns of members;

    decreased corporate budgets and spending and cancellations, deferrals or renegotiations of group business (e.g., industry conventions);

    natural disasters, such as earthquakes, tornadoes, hurricanes, wildfires and floods;

    outbreaks of pandemic or contagious diseases, such as avian or swine flu, and severe acute respiratory syndrome;

    war, terrorist activities or threats and heightened travel security measures instituted in response to these events; and

    the financial condition of the airline, automotive and other transportation-related industries and its impact on travel.

          These factors and other global, national and regional conditions can adversely affect, and from time to time have adversely affected, individual properties, particular regions or our business as a whole. For example, during the recent recession, many businesses dramatically decreased the number of corporate events and meetings hosted at facilities such as convention centers, hotels, business clubs, golf clubs, resorts and retreats in an effort to cut costs and in response to public opinion relating to excess corporate spending, which negatively impacted the amount of business for such facilities, including certain of our facilities. Any one or more of these factors could limit or reduce demand or the rates our clubs are able to charge for memberships or services, which could harm our business and results of operations.

Unusual weather patterns and extreme weather events, as well as periodic and quasi-periodic weather patterns, such as those commonly associated with the El Niño/La Niña-Southern Oscillation, could adversely affect the value of our golf courses or negatively impact our business and results of operations.

          Our operations and results are susceptible to non-seasonal and severe weather patterns. Extreme weather events or patterns in a given region, such as heavy rains, prolonged snow accumulations, extended heat waves and high winds, could reduce our revenues for that region by interrupting activities at affected properties which could negatively impact our business and results of operations.

          One factor that specifically affects our real estate investments in golf courses is the availability of water. Turf grass conditions must be satisfactory to attract play on our golf courses, which

17


Table of Contents

requires significant amounts of water. Our ability to irrigate a golf course could be adversely impacted by a drought or other cause of water shortage, such as the recent drought affecting the southern United States and associated government imposed water restrictions. A severe drought of extensive duration experienced in regard to a large number of properties could adversely affect our business and results of operations.

          We also have a high concentration of golf clubs in California, Florida and Texas, which can experience periods of unusually hot, cold, dry or rainy weather due to a variety of periodic and quasi-periodic global climate phenomenon, such as the El Niño/La Niña-Southern Oscillation. For example, during 2011, we incurred $0.3 million, or 7.2%, higher golf course maintenance utility expenses for the fiscal period starting on June 15, 2011 and ending on September 6, 2011 compared to the corresponding fiscal period in 2010, due to unusually hot and severe drought conditions in certain portions of the southern United States. If these phenomenon and their impacts on weather patterns persist for extended periods of time, our business and results of operations could be harmed.

We could be required to make material cash outlays in future periods if the number of initiation deposit refund requests we receive materially increases or if we are required to surrender unclaimed initiation deposits to state authorities under applicable escheatment laws.

          At a majority of our private clubs, members are expected to pay an initiation fee or deposit upon their acceptance as a member to the club. Initiation fees, which are more typical for our business clubs and mid-market golf and country clubs, are generally nonrefundable. In contrast to initiation fees, initiation deposits, which are typical in our more prestigious golf and country clubs, paid by members upon joining one of our clubs are fully refundable after a fixed number of years, typically 30 years, and upon the occurrence of other contract-specific conditions. Historically, only a small percentage of initiation deposits eligible to be refunded have been requested by members. As of March 19, 2013, the amount of initiation deposits that are eligible to be refunded currently or within the next 12 months is $96.9 million on a gross basis. When refunds are requested, we must fund the payment of such amounts from our available cash. If the number of refunds dramatically increases in the future, our financial condition could suffer and the funding requirement for such refunds could strain our cash on hand or otherwise force us to reduce or delay capital expenditures, sell assets or operations or seek additional capital in order to raise the cash necessary to make such refunds. As of March 19, 2013, the discounted value of initiation deposits that may be refunded in future years (not including the next 12 months) is $201.5 million. For more information on our initiation deposit amounts, see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations".

          While we will make a refund to any member whose initiation deposit is eligible to be refunded, we may be subject to various states' escheatment laws with respect to initiation deposits that have not been refunded to members. All states have escheatment laws and generally require companies to remit to the state cash in an amount equal to unclaimed and abandoned property after a specified period of dormancy, which is typically 3 to 5 years. We currently do not remit to states any amounts relating to initiation deposits that are eligible to be refunded to members based upon our interpretation of the applicability of such laws to initiation deposits. The analysis of the potential application of escheatment laws to our initiation deposits is complex, involving an analysis of constitutional and statutory provisions and contractual and factual issues. While we do not believe that initiation deposits must be escheated, we may be forced to remit such amounts if we are challenged and fail to prevail in our position.

          In addition, most of the states in which we conduct business have hired independent agents to conduct unclaimed and abandoned property audits of our operations. Certain categories of property, such as uncashed payroll checks or uncashed vendor payments, are escheatable in the

18


Table of Contents

ordinary course of business and we have entered into closing agreements with the majority of the states regarding the escheatment of cash amounts for such categories and have remitted these amounts to the respective states. If any state asserts that any or all of the initiation deposits eligible to be refunded to members that have not been refunded to members during the applicable dormancy period, depending on the state in which a club is located, are to be remitted to such state under applicable escheatment laws, we expect to vigorously defend our position on the matter. However, if we are ultimately unsuccessful in arguing our right to continue holding such amounts, we may be forced to pay such amounts to the claiming states. While we believe we have strong arguments against any potential claims for the escheatment of unclaimed initiation deposits made under state escheatment laws, if a material portion of the initiation deposits otherwise eligible to be refunded were awarded to any states, our financial condition could be materially and adversely affected and we may be required to reduce or delay capital expenditures, sell assets or operations or seek additional capital in order to raise the corresponding cash required to satisfy such awards. We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet such obligations or that these actions would be permitted under the terms of our existing or future debt agreements.

Our ability to attract and retain members depends heavily on successfully locating our clubs in suitable locations, and any impairment of a club location, including any decrease in member or customer traffic, could impact our results of operations.

          Our approach to identifying clubs in suitable locations typically favors locations where our facilities are or can become a part of the community. As a result, our clubs are typically located near urban and residential centers that we believe are consistent with our members' lifestyle choices. Memberships and sales at these locations are derived, in part, from proximity to key local landmarks, business centers, facilities and residential areas. We may be forced to close clubs or club locations may become unsuitable due to, and such clubs' results of operations may be harmed by, among other things:

    economic downturns in a particular area;

    competition from nearby recreational or entertainment venues;

    changing demographics in a particular market or area;

    changing lifestyle choices of consumers in a particular market; and

    the closing or declining popularity of other businesses and entertainment venues located near our clubs.

For example, in December 2010, we terminated our lease agreement and discontinued operations of the Renaissance Club, a business club in Detroit, Michigan, a city particularly hard hit by the recent recession. Changes in areas around our club locations could render such locations unsuitable and cause memberships at such clubs to decline, which would harm our results of operations.

We have significant operations concentrated in certain geographic areas, and any disruption in the operations of our clubs in any of these areas could harm our results of operations.

          We currently operate multiple clubs in several metropolitan areas, including fifteen in and around Dallas, Texas, thirteen near Houston, Texas, eight in the greater Los Angeles, California region, four near Sacramento, California, four in and around Phoenix, Arizona, eight in the greater Atlanta, Georgia region and four near Tampa, Florida. As a result, any prolonged disruption in the operations of our clubs in any of these markets, whether due to technical difficulties, power failures or destruction or damage to the clubs as a result of a natural disaster, fire or any other reason,

19


Table of Contents

could harm our results of operations or may result in club closures. In addition, some of the metropolitan areas where we operate clubs have been disproportionately affected by the economic downturn and the decline in home prices and increase in foreclosure rates, and could continue to be disproportionately affected by a renewed economic downturn. Concentration in these markets increases our exposure to adverse developments related to competition, as well as economic and demographic changes in these areas.

Seasonality may adversely affect our business and results of operations.

          Our quarterly results fluctuate as a result of a number of factors. Usage of our country club and golf facilities declines significantly during the first and fourth quarters, when colder temperatures and shorter days reduce the demand for outdoor activities. Our business clubs typically generate a greater share of their annual revenues in the fourth quarter, which includes the holiday and year-end party season. In addition, the first, second and third fiscal quarters each consist of 12 weeks, whereas the fourth quarter consists of 16 or 17 weeks of operations. As a result of these factors, we usually generate a disproportionate share of our revenues and cash flows in the second, third and fourth quarters of each year and have lower revenues and cash flows in the first quarter. This seasonality means our business and results of operations are disproportionately vulnerable to the occurrence of other risks during the periods of increased member usage due to the larger percentage of revenues we generate during such times.

Competition in the industry in which we compete could have a material adverse effect on our business and results of operations.

          We operate in a highly competitive industry, and compete primarily on the basis of reputation, featured facilities, location, quality and breadth of member product offerings and price. As a result, competition for market share in the industry in which we compete is significant. In order to succeed, we must take market share from local and regional competitors and sustain our membership base in the face of increasing recreational alternatives available to our existing and potential members.

          Our business clubs compete on a local and regional level with restaurants and other business and social clubs. The number and variety of competitors in this business varies based on the location and setting of each facility, with some situated in intensely competitive upscale urban areas characterized by frequent innovations in the products and services offered by competing restaurants and other business, dining and social clubs. In addition, in most regions, these businesses are in constant flux as new restaurants and other social and meeting venues open or expand their amenities. As a result of these characteristics, the supply in a given region often exceeds the demand for such facilities, and any increase in the number or quality of restaurants and other social and meeting venues, or the products and services they provide, in a given region could significantly impact the ability of our clubs to attract and retain members, which could harm our business and results of operations.

          Our golf and country club facilities compete on a local and regional level with other country clubs and golf facilities. The level of competition in the country club and golf facility 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 negative impact on our business and results of operations.

          Our results of operations also could be affected by a number of additional competitive factors, including the availability of, and demand for, alternative venues for recreational pursuits, such as multi-use sports and athletic centers. In addition, member-owned and individual privately-owned clubs may be able to create a perception of exclusivity that we have difficulty replicating given the

20


Table of Contents

diversity of our portfolio and the scope of our holdings. To the extent these alternatives succeed in diverting actual or potential members away from our facilities or affect our membership rates, our business and results of operations could be harmed.

Our future success is substantially dependent on the continued service of our senior management and key employees.

          The loss of the services of our senior management could make it more difficult to successfully operate our business and achieve our business goals. We also may be unable to retain existing management and key employees, including club managers, membership sales and support personnel, which could result in harm to our member and employee relationships, loss of expertise or know-how and unanticipated recruitment and training costs. In addition, we have not obtained key man life insurance policies for any of our senior management team. As a result, it may be difficult to cover the financial loss if we were to lose the services of any members of our senior management team. The loss of members of our senior management team or key employees could have an adverse affect on our business and results of operations.

Our large workforce subjects us to risks associated with increases in the cost of labor as a result of increased competition for employees, higher employee turnover rates and required wage increases and health benefit coverage, lawsuits or labor union activity.

          Labor is our primary property-level operating expense. As of March 19, 2013, we employed approximately 12,900 hourly-wage and salaried employees at our clubs and corporate offices. For the fiscal year ended December 25, 2012, labor-related expense accounted for 48.6% of our total operating expense. We may face labor shortages or increased labor costs because of increased competition for employees, higher employee turnover rates, or increases in the federal or state minimum wage or other employee benefit costs. For example, we are continuing to assess the impact of federal health care reform law and regulations on our health care benefit costs, which will likely increase the amount of healthcare expenses paid by us. If labor-related expenses increase, our operating expense could increase and our business, financial condition and results of operations could be harmed.

          We are subject to the Fair Labor Standards Act and various federal and state laws governing such matters as minimum wage requirements, overtime compensation and other working conditions, citizenship requirements, discrimination and family and medical leave. In recent years, a number of companies have been subject to lawsuits, including class action lawsuits, alleging violations of federal and state law regarding workplace and employment matters, overtime wage policies, discrimination and similar matters. A number of these lawsuits have resulted in the payment of substantial damages by the defendants. Similar lawsuits may be threatened or instituted against us from time to time, and we may incur substantial damages and expenses resulting from lawsuits of this type, which could have a material adverse effect on our business, financial condition or results of operations.

          From time to time, we have also experienced attempts to unionize certain of our non-union employees. While these efforts have achieved only limited success to date, we cannot provide any assurance that we will not experience additional and more successful union activity in the future. In addition, future legislation could amend the National Labor Relations Act to make it easier for unions to organize and obtain collectively bargained benefits, which could increase our operating expenses and negatively affect our financial condition and results of operations.

21


Table of Contents

Increases in our cost of goods, rent, water, utilities and taxes could reduce our operating margins and harm our business, financial condition and results of operations.

          Increases in operating costs due to inflation and other factors may not be directly offset by increased revenue. Our most significant operating costs, other than labor, are our cost of goods, water, utilities, rent and property taxes. Many, and in some cases all, of the factors affecting these costs are beyond our control.

          Our cost of goods such as food and beverage costs account for a significant portion of our total property-level operating expense. Cost of goods represented 15.2% of our total operating expense for the fiscal year ended December 25, 2012. While we have not experienced material increases in the cost of goods, if our cost of goods increased significantly and we are not able to pass along those increased costs to our members in the form of higher prices or otherwise, our operating margins would suffer, which would have an adverse effect on our business, financial condition and results of operations.

          In addition, rent accounts for a significant portion of our property-level operating expense — rent expense represented 4.9% of our total operating expense for the fiscal year ended December 25, 2012. Significant increases in our rent costs would increase our operating expense and our business, financial condition and results of operations may suffer.

          Utility costs, including water, represented 5.7% of our total operating expense for the fiscal year ended December 25, 2012. The prices of utilities are volatile, and shortages sometimes occur. In particular, municipalities are increasingly placing restrictions on the use of water for golf course irrigation and increasing the cost of water. Significant increases in the cost of our utilities, or any shortages, could interrupt or curtail our operations and lower our operating margins, which could have a negative impact on our business, financial condition and results of operations.

          Each of our properties is subject to real and personal property taxes. During the fiscal year ended December 25, 2012, we paid approximately $10.7 million in property taxes. The real and personal property taxes on our properties may increase or decrease as tax rates change and as our clubs are assessed or reassessed by taxing authorities. If real and personal property taxes increase, our financial condition and results of operations may suffer.

We have concentrated our investments in golf-related and business real estate and facilities, which are subject to numerous risks, including the risk that the values of our investments may decline if there is a prolonged downturn in real estate values.

          Our operations consist almost entirely of golf-related and business club facilities that encompass a large amount of real estate holdings. Accordingly, we are subject to the risks associated with holding real estate investments. A prolonged decline in the popularity of golf-related or business club services, such as private dining, could adversely affect the value of our real estate holdings and could make it difficult to sell facilities or businesses.

          Our real estate holdings (including our long-term leaseholds) are subject to risks typically associated with investments in real estate. The investment returns available from equity investments in real estate depend in large part on the amount of income earned, expenses incurred and capital appreciation generated by the related properties. In addition, a variety of other factors affect income from properties and real estate values, including governmental regulations, real estate, insurance, zoning, tax and eminent domain laws, interest rate levels and the availability of financing. For example, new or existing real estate zoning or tax laws can make it more expensive and time-consuming to expand, modify or renovate older properties. Under eminent domain laws, governments can take real property. Sometimes this taking is for less compensation than the owner believes the property is worth. Any of these factors could have an adverse impact on our business, financial condition or results of operations.

22


Table of Contents

The illiquidity of real estate may make it difficult for us to dispose of one or more of our properties or negatively affect our ability to profitably sell such properties.

          We may from time to time decide to dispose of one or more of our real estate assets. Because real estate holdings generally, and clubs like ours in particular, are relatively illiquid, we may not be able to dispose of one or more real estate assets on a timely basis. In some circumstances, sales may result in investment losses which could adversely affect our financial condition. The illiquidity of our real estate assets could mean that we continue to operate a facility that management has identified for disposition. Failure to dispose of a real estate asset in a timely fashion, or at all, could adversely affect our business, financial condition and results of operations.

Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to plan for and react to changes in the economy, our industry or our business and prevent us from meeting our indebtedness obligations.

          As of March 19, 2013, we were significantly leveraged and our total indebtedness was approximately $791.7 million. After giving effect to this offering, on an as adjusted basis, as of March 19, 2013, our total indebtedness would have been approximately $     million. Our substantial degree of leverage could have important consequences for our investors, including the following:

    it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, product development, debt service requirements, acquisitions or general corporate or other purposes;

    a substantial portion of our cash flows from operations is dedicated to the payment of principal and interest on our indebtedness and will not be available for other purposes, including our operations, strategic initiatives, capital expenditures, acquisitions and other business opportunities;

    the debt service requirements of our indebtedness could make it more difficult for us to satisfy our financial obligations;

    certain of our borrowings, including borrowings under the Secured Credit Facilities, are at variable rates of interest, exposing us to the risk of increased interest rates;

    it may limit our flexibility in planning for, or our ability to adjust to, changes in our business or the industry in which we operate, and place us at a competitive disadvantage compared to our competitors that have less debt; and

    we may be vulnerable to a downturn in general economic conditions or in our business, or we may be unable to carry out capital spending that is important to our growth.

We may not be able to generate sufficient cash to service all of our indebtedness and be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

          Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We cannot guarantee that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We cannot guarantee that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or that these actions would be permitted under the terms of our existing or future debt agreements. In the

23


Table of Contents

absence of the requisite operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. The Secured Credit Facilities and the indenture that governs the Senior Notes restrict our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds which we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due.

          If we cannot make scheduled payments on our debt, we will be in default and, as a result:

    our debt holders could declare all outstanding principal and interest to be due and payable;

    the lenders under the Secured Credit Facilities could terminate their commitments to lend us money and foreclose against the assets securing their borrowings; and

    we could be forced into bankruptcy or liquidation.

Despite current indebtedness levels, we may still be able to incur substantially more debt. This could further exacerbate the risks described above.

          We may be able to incur substantial additional indebtedness in the future. The terms of the indenture governing the Senior Notes limit, but do not fully prohibit us from doing so. The Secured Credit Facilities also limit, but do not fully prohibit us from doing so. As of March 19, 2013, $33.6 million was available for borrowing under the revolving credit facility. Additionally, we expect to have the option to increase the term loan facility by up to $     million and the revolving credit facility by up to an additional $     million, both subject to conditions and restrictions in the Secured Credit Facilities. If new debt is added to our current debt levels, the related risks that we now face could intensify.

Restrictive covenants may adversely affect our operations.

          The Secured Credit Facilities and the indenture governing the Senior Notes contain various covenants that limit our ability to, among other things:

    incur or guarantee additional indebtedness;

    pay dividends or distributions on capital stock or redeem or repurchase capital stock;

    make investments;

    create restrictions on the payment of dividends or other amounts to us;

    sell stock of our subsidiaries;

    transfer or sell assets;

    create liens;

    enter into transactions with affiliates; and

    enter into mergers or consolidations.

          In addition, the restrictive covenants in the Secured Credit Facilities require us to maintain specified financial ratios and satisfy other financial condition tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot guarantee that we will meet them. A breach of any of these covenants could result in a default under the Secured Credit Facilities. Upon the occurrence of an event of default under the Secured Credit Facilities, the lenders could elect to declare all amounts outstanding thereunder to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those

24


Table of Contents

amounts, the lenders under the Secured Credit Facilities could proceed against the collateral granted to them to secure that indebtedness. We have pledged a significant portion of our assets as collateral under the Secured Credit Facilities. If the lenders under the Secured Credit Facilities accelerate the repayment of borrowings, the holders of the Senior Notes could declare a cross-default, and we cannot guarantee that we will have sufficient assets to repay the Secured Credit Facilities, the Senior Notes, and our other indebtedness, or borrow sufficient funds to refinance such indebtedness. Even if we are able to obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

          Certain of our borrowings, primarily borrowings under the Secured Credit Facilities, are subject to variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease. The interest rate on our term loan facility currently is the higher of (i) 5.0% ("Floor") and (ii) an elected LIBOR plus a margin of 3.75% (less the impact of the interest rate cap agreement that limits our exposure on the elected LIBOR to 2.0% on a notional amount of $155.0 million). Our term loan facility will be effectively subject to the Floor until LIBOR exceeds 1.25%. As of March 19, 2013, LIBOR was below the Floor, such that a hypothetical 0.50% increase in LIBOR applicable to our term loan facility would not result in an increase in interest expense.

Timing, budgeting and other risks could delay our efforts to develop, redevelop or renovate the properties that we own, or make these activities more expensive, which could reduce our profits or impair our ability to compete effectively.

          We must regularly expend capital to construct, maintain and renovate the properties that we own in order to remain competitive, pursue our business strategies, maintain and build the value and brand standards of our properties and comply with applicable laws and regulations. In addition, we must periodically upgrade or replace the furniture, fixtures and equipment necessary to operate our business. These efforts are subject to a number of risks, including:

    construction delays or cost overruns (including labor and materials) that may increase project costs;

    obtaining zoning, occupancy and other required permits or authorizations;

    governmental restrictions on the size or kind of development;

    force majeure events, including earthquakes, tornadoes, hurricanes or floods;

    design defects that could increase costs; and

    environmental concerns which may create delays or increase costs.

          These projects create an ongoing need for cash, which if not generated by operations or otherwise obtained is subject to the availability of credit in the capital markets. Our ability to spend the money necessary to maintain the quality of our properties is significantly impacted by the cost and availability of capital, over which we have little control.

          The timing of capital improvements can affect property performance, including membership sales, retention and usage, particularly if we need to close golf courses or a significant number of other facilities, such as ballrooms, meeting spaces or dining areas. Moreover, the investments that we make may fail to improve the performance of the properties in the manner that we expect.

25


Table of Contents

          If we are not able to begin operating properties as scheduled, or if investments harm or fail to improve our performance, our ability to compete effectively would be diminished and our business and results of operations could be adversely affected.

We may seek to expand through acquisitions of and investments in other businesses and properties, or through alliances; and we may also seek to divest some of our properties and other assets, any of which may be unsuccessful or divert our management's attention.

          We continually evaluate opportunities to expand our business through strategic and complementary acquisitions of attractive properties. In many cases, we will be competing for these opportunities with third parties that may have substantially greater financial resources than we do. Acquisitions or investments in businesses, properties or assets as well as these alliances are subject to risks that could affect our business, including risks related to:

    spending cash and incurring debt;

    assuming contingent liabilities;

    creating additional expenses; or

    use of management's time and attention.

          We cannot assure you that we will be able to identify opportunities or complete transactions on commercially reasonable terms or at all, or that we will actually realize any anticipated benefits from such acquisitions, investments or alliances. Similarly, we cannot assure you that we will be able to obtain financing for acquisitions or investments on attractive terms or at all, or that the ability to obtain financing will not be restricted by the terms of the Secured Credit Facilities, the indenture governing the Senior Notes or other indebtedness we may incur.

          The success of any such acquisitions or investments will also depend, in part, on our ability to integrate the acquisition or investment with our existing operations. We may experience difficulty with integrating acquired businesses, properties or other assets, including difficulties relating to:

    geographic diversity;

    integrating information technology systems; and

    retaining members.

We depend on third parties in our joint ventures and collaborative arrangements, which may limit our ability to manage risk.

          As of March 19, 2013, we owned eight properties in partnership with other entities, including joint ventures relating to six of our golf facilities, one of our business clubs and certain realty interests which we define as Non-Core Development Entities, and may in the future enter into further joint ventures or other collaborative arrangements related to additional properties. Our investments in these joint ventures may, under certain circumstances, involve risks not otherwise present in our business, including the risk that our partner may become bankrupt, the risk that we may not be able to sell or dispose of our interest as a result of buy/sell rights that may be imposed by the joint venture agreement, the risk that our partner may have economic or other interests or goals that are inconsistent with our interests and goals and the risk that our partner may be able to veto actions which may be in our best interests. Consequently, actions by a partner might subject clubs owned by the joint venture to additional risk. Additionally, we may be unable to take action without the approval of our partners, or our partners could take actions binding on the joint venture without our consent. Any of the foregoing could have a negative impact on the joint venture or its results of operations, and subsequently on our business or results of operations.

26


Table of Contents

Our insurance policies may not provide adequate levels of coverage against all claims and we may incur losses that are not covered by our insurance.

          We maintain insurance of the type and in amounts that we believe is commercially reasonable and that is available to businesses in our industry. We carry commercial liability, fire, flood, earthquake, catastrophic wind and extended insurance coverage, as applicable, from solvent insurance carriers on all of our properties. We believe that the policy specifications and insured limits are adequate for foreseeable losses with terms and conditions that are reasonable and customary for similar properties and that all of our existing golf and business clubs are insured within industry standards. Nevertheless, market forces beyond our control could limit the scope of the insurance coverage that we can obtain in the future or restrict our ability to buy insurance coverage at reasonable rates. We cannot predict the level of the premiums that we may be required to pay for subsequent insurance coverage, the level of any deductible and/or self-insurance retention applicable thereto, the level of aggregate coverage available or the availability of coverage for specific risks.

          In the event of a substantial loss, the insurance coverage that we carry may not be sufficient to pay the full value of our financial obligations or the replacement cost of any lost investment. As a result, we could lose some or all of the capital we have invested in a property, as well as the anticipated future revenues from the property. Additionally, we could remain obligated for performance guarantees in favor of third-party property owners or for their debt or other financial obligations and we may not have sufficient insurance to cover awards of damages resulting from our liabilities. If the insurance that we carry does not sufficiently cover damages or other losses, our business, financial condition and results of operations could be harmed.

          In addition, there are types of losses we may incur that cannot be insured against or that we believe are not commercially reasonable to insure. For example, we maintain business interruption insurance, but there can be no assurance that the coverage for a severe or prolonged business interruption at one or more of our clubs would be adequate. Moreover, we believe that insurance covering liability for violations of wage and hour laws is generally not available. These losses, if they occur, could have a material adverse effect on our business, financial condition and results of operations.

Accidents or injuries in our clubs or in connection with our operations may subject us to liability, and accidents or injuries could negatively impact our reputation and attendance, which would harm our business, financial condition and results of operations.

          There are inherent risks of accidents or injuries at our properties or in connection with our operations, including injuries from premises liabilities such as slips, trips and falls. If accidents or injuries occur at any of our properties, we may be held liable for costs related to the injuries. We maintain insurance of the type and in the amounts that we believe are commercially reasonable and that are available to businesses in our industry, but there can be no assurance that our liability insurance will be adequate or available at all times and in all circumstances. There can also be no assurance that the liability insurance we have carried in the past was adequate or available to cover any liability related to previous incidents. Our business, financial condition and results of operations could be harmed to the extent claims and associated expenses resulting from accidents or injuries exceed our insurance recoveries.

Adverse litigation judgments or settlements could impair our financial condition and results of operations or limit our ability to operate our business.

          In the normal course of our business, we are often involved in various legal proceedings. The outcome of these proceedings cannot be predicted. If any of these proceedings were to be determined adversely to us or a settlement involving a payment of a material sum of money were to

27


Table of Contents

occur, there could be a material adverse effect on our financial condition and results of operations. Additionally, we could become the subject of future claims by third parties, including current or former members, guests who use our properties, our employees or regulators. Any significant adverse litigation judgments or settlements could limit our ability to operate our business and negatively impact our financial condition and results of operations.

We are jointly and severally liable for the pension liabilities of a former affiliate.

          We are jointly and severally liable for pension funding liabilities associated with the Homestead Retirement Plan, relating to one of the resorts we sold in connection with the ClubCorp Formation. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Commercial Commitments". As of March 19, 2013, the underfunded amount of the projected benefit obligation for such plan was approximately $10.3 million. Significant adverse changes in the capital markets could cause the actual amount of underfunding to be higher than projected. If we are found liable for any amounts with respect to this plan, the payment of such liability, if material, could adversely affect our financial condition and results of operations.

The failure to comply with regulations relating to public facilities or the failure to retain licenses relating to our properties may harm our business and results of operations.

          Our business is subject to extensive federal, state and local government regulation in the various jurisdictions in which our clubs are located, including regulations relating to alcoholic beverage control, public health and safety, environmental hazards and food safety. Alcoholic beverage control regulations require each of our clubs to obtain licenses and permits to sell alcoholic beverages on the premises. The failure of a club to obtain or retain its licenses and permits would adversely affect that club's operations and profitability. We may also be subject to dram shop statutes in certain states, which generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person. Even though we are covered by general liability insurance, a settlement or judgment against us under a dram shop lawsuit in excess of liability coverage could have a material adverse effect on our operations.

          We are also subject to the Americans with Disabilities Act of 1990, as amended by the ADA Amendments Act of 2008 (the "ADA"), which, among other things, may require certain renovations to our facilities to comply with access and use requirements. A determination that we are not in compliance with the ADA or any other similar law or regulation could result in the imposition of fines or an award of damages to private litigants. While we believe we are operating in substantial compliance, and will continue to remove architectural barriers in our facilities when readily achievable, in accordance with current applicable laws and regulations, there can be no assurance that our expenses for compliance with these laws and regulations will not increase significantly and harm our business, financial condition and results of operations.

          Businesses operating in the private club industry are also subject to numerous other federal, state and local governmental regulations related to building and zoning requirements and the use and operation of clubs, including changes to building codes and fire and life safety codes, which can affect our ability to obtain and maintain licenses relating to our business and properties. If we were required to make substantial modifications at our clubs to comply with these regulations, our business, financial condition and results of operations could be negatively impacted.

28


Table of Contents

Our operations and our ownership of property subject us to environmental regulation, which creates uncertainty regarding future environmental expenditures and liabilities.

          Our properties and operations are subject to a number of environmental laws. As a result, we may be required to incur costs to comply with the requirements of these laws, such as those relating to water resources, discharges to air, water and land; the handling and disposal of solid and hazardous waste; and the cleanup of properties affected by regulated materials. Under these and other environmental requirements, we may be required to investigate and clean up hazardous or toxic substances or chemical releases from current or formerly owned or operated facilities. Environmental laws typically impose cleanup responsibility and liability without regard to whether the relevant entity knew of or caused the presence of the contaminants. We use certain substances and generate certain wastes that may be deemed hazardous or toxic under such laws, and we from time to time have incurred, and in the future may incur, costs related to cleaning up contamination resulting from historic uses of certain of our current or former properties or our treatment, storage or disposal of wastes at facilities owned by others. Our club facilities are also subject to risks associated with mold, asbestos and other indoor building contaminants. The costs of investigation, remediation or removal of regulated materials may be substantial, and the presence of those substances, or the failure to remediate a property properly, may impair our ability to use, transfer or obtain financing regarding our property. We may be required to incur costs to remediate potential environmental hazards, mitigate environmental risks in the future, or comply with other environmental requirements.

          In addition, some projects to improve, upgrade or expand our golf clubs may be subject to environmental review under the National Environmental Policy Act and, for projects in California, the California Environmental Quality Act. Both acts require that a specified government agency study any proposal for potential environmental impacts and include in its analysis various alternatives. Our improvement proposals may not be approved or may be approved with modifications that substantially increase the cost or decrease the desirability of implementing the project.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may harm our business, investments and results of operations.

          We are subject to laws and regulations enacted by national, state and local governments. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have an adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, by any of the persons referred to above could have a material adverse effect on our business, investments and results of operations.

Failure to comply with privacy regulations or maintain the integrity of internal or customer data could result in faulty business decisions or harm to our reputation or subject us to costs, fines or lawsuits.

          We collect and maintain information relating to our members and guests, including personally identifiable information, for various business purposes, including maintaining records of member preferences to enhance our customer service and for billing, marketing and promotional purposes. We also maintain personally identifiable information about our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our members expect that we will adequately protect their personal information, and the regulations applicable to security and privacy are increasingly demanding, both in the United States and in other jurisdictions where we operate. Privacy regulation is an evolving area in which different jurisdictions (within or outside the United States) may subject us to inconsistent compliance requirements. Compliance

29


Table of Contents

with applicable privacy regulations may increase our operating costs or adversely impact our ability to service our members and guests and market our properties and services to our members and guests. A theft, loss, fraudulent or unlawful use of customer, employee or company data, including cyber attacks, could harm our reputation or result in remedial and other costs, fines or lawsuits. In addition, non-compliance with applicable privacy regulations by us (or in some circumstances non-compliance by third parties engaged by us) could result in fines or restrictions on our use or transfer of data. Any of these matters could adversely affect our business, financial condition or results of operations.

The operation of our business relies on technology, and operational risks may disrupt our businesses, result in losses or limit our growth.

          We invest in and license technology and systems for property management, procurement, membership records and specialty programs. We believe that we have designed, purchased and installed appropriate information systems to support our business. There can be no assurance, however, that our information systems and technology will continue to be able to accommodate our requirements and growth, or that the cost of maintaining such systems will not increase from its current level. Such a failure to accommodate our requirements and growth, or an increase in costs related to maintaining and developing such information systems, including associated labor costs, could have a material adverse effect on us. Further, there can be no assurance that as various systems and technologies become outdated or new technology is required that we will be able to replace or introduce them as quickly as our competitors or within budgeted costs and timeframes. In addition, we rely on third-party service providers for certain aspects of our business. Additionally, while we have cyber security procedures in place, a security breach could disrupt our business and have a material adverse effect on us. Any interruption or deterioration in the performance of our information systems could impair the quality of our operations and could impact our reputation and hence adversely affect our business and limit our ability to grow.

We may be required to write-off a portion of our goodwill and/or indefinite lived intangible asset balances as a result of a prolonged and severe economic recession.

          Under GAAP, we are required to test goodwill and indefinite lived intangible assets for impairment annually as well as on an interim basis to the extent factors or indicators become apparent that could reduce the fair value of our goodwill or indefinite lived intangible assets below book value. We evaluate the recoverability of goodwill by estimating the future discounted cash flows of our reporting units and terminal values of the businesses using projected future levels of income as well as business trends and market and economic conditions. We evaluate the recoverability of indefinite lived intangible assets using the income approach based upon estimated future revenue streams. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates". If a severe prolonged economic downturn were to occur, it could cause less than expected growth or a reduction in terminal values of our reporting units and could result in a goodwill or indefinite lived intangible asset impairment charge attributable to certain goodwill or indefinite lived intangible assets, negatively impacting our results of operations and stockholders' equity.

We are subject to tax examinations of our tax returns by the Internal Revenue Service ("IRS") and other tax authorities. An adverse outcome of any such audit or examination by the IRS or other tax authority could have a material adverse effect on our results of operations, financial condition and liquidity.

          We are subject to ongoing tax examinations of our tax returns by the IRS and other tax authorities in various jurisdictions and may be subject to similar examinations in the future. We regularly assess the likelihood of adverse outcomes resulting from ongoing tax examinations to

30


Table of Contents

determine the adequacy of our provision for income taxes. These assessments can require considerable estimates and judgments. Intercompany transactions associated with provision of services and cost sharing arrangements, as well as those associated with the ClubCorp Formation, are complex and affect our tax liabilities. On February 14, 2013, we were notified that the IRS will examine certain components of the 2010 tax return, which includes the ClubCorp Formation. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions. We are also undergoing audits by the Mexican taxing authorities related to three of our foreign subsidiaries and have received notification of an assessment by the Mexican taxing authorities related to one of these foreign subsidiaries which we intend to protest. There can be no assurance that the outcomes from ongoing tax examinations will not have an adverse effect on our operating results and financial condition. A difference in the ultimate resolution of tax uncertainties from what is currently estimated could have an adverse effect on our operating results and financial condition.

The cancellation of certain indebtedness in connection with the ClubCorp Formation resulted in cancellation of indebtedness income to us. Should the estimates and judgments used in our calculation of such cancellation of indebtedness income prove to be inaccurate, our financial results could be materially affected.

          Cancellation of debt income occurred for U.S. federal income tax purposes in connection with the consummation of the ClubCorp Formation due to the forgiveness of $342.3 million of debt owed under the then existing secured credit facilities. We took the position that substantially all of such income was not includible in our taxable income under the insolvency exception provided by Section 108 of the Internal Revenue Code of 1986, as amended (the "Code"). On February 14, 2013, we were notified that the IRS will examine certain components of the 2010 tax return, which includes the ClubCorp Formation. The calculation of the amount of cancellation of indebtedness income recognized in connection with the ClubCorp Formation is complex and involves significant judgments and interpretations on our part, including the value of any assets at such time. Should the estimates and judgments used in our calculation of cancellation of indebtedness income prove to be inaccurate, our financial results could be materially affected.

We are controlled by affiliates of KSL, whose interests may be different than the interests of other investors.

          Immediately following this offering, affiliates of KSL will beneficially own approximately         % of our common stock, or approximately         % if the underwriters exercise in full their option to purchase additional shares. As a result, affiliates of KSL will have the ability to elect all of the members of our Board of Directors and thereby may be able to indirectly control our policies and operations, including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence or modification of debt by us, amendments to our amended and restated articles of incorporation and amended and restated bylaws and the entering into of extraordinary transactions, and their interests may not in all cases be aligned with your interests. In addition, KSL's affiliates may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you. For example, KSL's affiliates could cause us to make acquisitions that increase our indebtedness or cause us to sell revenue-generating assets.

          KSL is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us, including investments in the leisure and hospitality industries.

31


Table of Contents

          On December 26, 2012, our Board of Directors declared a special cash distribution of $35.0 million to the owners of our common stock. The distribution was paid on December 27, 2012. At the time of the distribution, Fillmore CCA Investment, LLC, an affiliate of KSL, owned 100% of our common stock.

          Our amended and restated articles of incorporation will provide that none of KSL's affiliates or any director who is not employed by us will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. KSL's affiliates also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. So long as affiliates of KSL continue to own a significant amount of our combined voting power, they will continue to be able to strongly influence or effectively control our decisions. So long as KSL's affiliates collectively own at least 5% of all outstanding shares of our stock they will be able to nominate individuals to our Board of Directors pursuant to our amended and restated articles of incorporation. In addition, KSL's affiliates will be able to determine the outcome of all matters requiring stockholder approval and will be able to cause or prevent a change of control of our company or a change in the composition of our Board of Directors and could preclude any unsolicited acquisition of our company. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of our company and ultimately might affect the market price of our common stock.


Risks Related to this Offering and Ownership of Our Common Stock

No market currently exists for our common stock, and an active, liquid trading market for our common stock may not develop, which may cause our common stock to trade at a discount from the initial offering price and make it difficult for you to sell the common stock you purchase.

          Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which investor interest in us will lead to the development of a trading market on the NYSE or otherwise or how active and liquid that market may become. If an active and liquid trading market does not develop or continue, you may have difficulty selling any of our common stock that you purchase. The initial public offering price for the shares will be determined by negotiations between us, the selling stockholder and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. The market price of our common stock may decline below the initial offering price, and you may not be able to sell your shares of our common stock at or above the price you paid in this offering, or at all.

You will incur immediate and substantial dilution in the net tangible book value of the shares you purchase in this offering.

          Prior stockholders have paid substantially less per share of our common stock than the price in this offering. The initial public offering price of our common stock will be substantially higher than the net tangible book value (deficit) per share of outstanding common stock prior to completion of the offering. Based on our net tangible book value (deficit) as of March 19, 2013 and upon the issuance and sale of             shares of common stock by us at an assumed initial public offering price of $        per share, which is the mid-point of the range set forth on the cover page of this prospectus, if you purchase our common stock in this offering, you will pay more for your shares than the amounts paid by our existing stockholders for their shares and you will suffer immediate dilution of approximately $       per share in net tangible book value. Dilution is the amount by which the offering price paid by purchasers of our common stock in this offering will exceed the pro forma net tangible book value per share of our common stock upon completion of this offering. A total of              shares of common stock has been reserved for future issuance under the Stock Plan. You

32


Table of Contents

may experience additional dilution upon future equity issuances or the exercise of stock options to purchase common stock granted to our directors, officers and employees under our current and future stock incentive plans, including the Stock Plan. See "Dilution".

Our stock price may change significantly following the offering, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.

          The trading price of our common stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. We, the selling stockholder and the underwriters will negotiate to determine the initial public offering price. You may not be able to resell your shares at or above the initial public offering price due to a number of factors such as those listed in "— Risks Relating to Our Business" and the following:

    results of operations that vary from the expectations of securities analysts and investors;

    results of operations that vary from those of our competitors;

    changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;

    declines in the market prices of stocks generally;

    strategic actions by us or our competitors;

    announcements by us or our competitors of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;

    changes in general economic or market conditions or trends in our industry or markets;

    changes in business or regulatory conditions;

    future sales of our common stock or other securities;

    investor perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;

    the public's response to press releases or other public announcements by us or third parties, including our filings with the Securities and Exchange Commission (the "SEC");

    announcements relating to litigation or regulatory investigations or actions;

    guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

    the development and sustainability of an active trading market for our stock;

    changes in accounting principles; and

    other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.

          These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low.

          In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert

33


Table of Contents

resources and the attention of executive management from our business regardless of the outcome of such litigation.

We cannot assure you that we will pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock.

          After completion of this offering, we intend to pay cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements and in any preferred stock, business prospects and other factors that our Board of Directors may deem relevant. For more information, see "Dividend Policy". There can be no assurance that we will pay a dividend in the future or continue to pay any dividend if we do commence paying dividends.

If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.

          The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business or industry. We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrade our stock or our industry, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business or industry, the price of our stock could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

Future sales, or the perception of future sales, by us or our existing stockholders in the public market following this offering could cause the market price for our common stock to decline.

          After this offering, the sale of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

          Upon consummation of this offering, we will have a total of             shares of common stock outstanding. All shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except that any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act ("Rule 144"), including our directors, executive officers and other affiliates (including affiliates of KSL) may be sold only in compliance with the limitations described in "Shares Eligible for Future Sale".

          The             shares held by affiliates of KSL and certain of our directors, officers and employees immediately following the consummation of this offering will represent approximately    % of our total outstanding shares of common stock following this offering, based on the number of shares outstanding as of March 19, 2013. Such shares will be "restricted securities" within the meaning of Rule 144 and subject to certain restrictions on resale following the consummation of this offering. Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144, as described in "Shares Eligible for Future Sale".

          In connection with this offering, we, our officers and directors, and the selling stockholder have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any shares of our common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date 180 days after

34


Table of Contents

the date of this prospectus, except with the prior written consent of the representatives of the underwriters. See "Underwriting" for a description of these lock-up agreements.

          Upon the expiration of the contractual lock-up agreements pertaining to this offering, up to an additional             shares will be eligible for sale in the public market, of which       are held by directors, executive officers and other affiliates and will be subject to volume, manner of sale and other limitations under Rule 144. Following completion of this offering, shares covered by registration rights represent approximately    % of our outstanding common stock (or    %, if the underwriters exercise in full their option to purchase additional shares). Registration of any of these outstanding shares of common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement. See "Shares Eligible for Future Sale".

          As restrictions on resale end or if these stockholders exercise their registration rights, the market price of our shares of common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

          In addition, the shares of our common stock reserved for future issuance under the Stock Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and Rule 144, as applicable. A total of             shares of common stock has been reserved for future issuance under the Stock Plan.

          In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.

Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

          Certain provisions of our amended and restated articles of incorporation and amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider to be in its best interest, including attempts that might result in a premium over the market price for the shares held by our stockholders.

          These provisions provide, among other things:

    a classified Board of Directors with staggered three-year terms;

    the ability of our Board of Directors to issue one or more series of preferred stock with voting or other rights or preferences that could have the effect of impeding the success of an attempt to acquire us or otherwise effect a change of control;

    advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at stockholder meetings;

    the right of KSL's affiliates, determined in proportion to their collective ownership of our common stock, to nominate at least a certain percentage of the members of our Board of Directors;

    certain limitations on convening special stockholder meetings and stockholder action by written consent;

35


Table of Contents

    that, except in limited circumstances specified in our amended and restated articles of incorporation, if KSL's affiliates own less than a majority of the voting power of our capital stock entitled to vote in the election of directors, then certain provisions of our amended and restated articles of incorporation may be amended only by the affirmative vote of the holders (which must include at least one of certain specified affiliates of KSL, so long as affiliates of KSL beneficially own, in the aggregate, at least 5% of the voting power of our capital stock entitled to vote generally in the election of directors) of at least two-thirds of the voting power of our outstanding capital stock entitled to vote on such amendment; and

    that if KSL's affiliates own less than 40% of the voting power of our capital stock entitled to vote in the election of directors, then our stockholders may adopt amendments to our amended and restated bylaws only by the affirmative vote of the holders (which must include at least one of certain specified KSL's affiliates, so long as KSL's affiliates beneficially own, in the aggregate, at least 5% of the voting power of our capital stock entitled to vote generally in the election of directors) of at least two-thirds of the voting power of our outstanding capital stock entitled to vote on such amendment.

          These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party's offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares. See "Description of Capital Stock".

We will be a "controlled company" within the meaning of the NYSE rules and the rules of the SEC. As a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.

          After completion of this offering, affiliates of KSL will continue to control a majority of the voting power of our outstanding common stock. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the NYSE. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including:

    the requirement that a majority of our Board of Directors consist of "independent directors" as defined under the rules of the NYSE;

    the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;

    the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

    the requirement for an annual performance evaluation of the compensation and nominating and corporate governance committees.

          Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of independent directors, our nominating and corporate governance committee, if any, and compensation committee will not consist entirely of independent directors and such committees will not be subject to annual performance evaluations. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

36


Table of Contents

          In addition, on June 20, 2012, the SEC passed final rules implementing provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 pertaining to compensation committee independence and the role and disclosure of compensation consultants and other advisers to the compensation committee. The SEC's rules directed each of the national securities exchanges (including the NYSE on which we intend to apply to have our common stock listed) to develop listing standards requiring, among other things, that:

    compensation committees be composed of independent directors, as determined pursuant to new independence requirements;

    compensation committees be explicitly charged with hiring and overseeing compensation consultants, legal counsel and other committee advisors; and

    compensation committees be required to consider, when engaging compensation consultants, legal counsel or other advisors, certain independence factors, including factors that examine the relationship between the consultant or advisor's employer and us.

          On January 11, 2013, the SEC approved the proposed listing standards of the national securities exchanges.

          As a controlled company, we will not be subject to these compensation committee independence requirements.

We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

          We are an emerging growth company as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may choose to take advantage of certain exemptions from various reporting requirements applicable to other public companies, including, among other things:

    exemption from the auditor attestation requirements under Section 404 of the Sarbanes-Oxley Act of 2002;

    reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;

    exemption from the requirements of holding non-binding stockholder votes on executive compensation arrangements; and

    exemption from any rules requiring mandatory audit firm rotation and auditor discussion and analysis and, unless the SEC otherwise determines, any future audit rules that may be adopted by the Public Company Accounting Oversight Board.

          We will be an emerging growth company until the last day of the fiscal year following the fifth anniversary after the completion of this offering, or until the earliest of (i) the last day of the fiscal year in which we have annual gross revenue of $1 billion or more, (ii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt or (iii) the date on which we are deemed to be a large accelerated filer under the federal securities laws. We will qualify as a large accelerated filer as of the first day of the first fiscal year after we have (i) more than $700 million in outstanding common equity held by our non-affiliates and (ii) been public for at least 12 months. The value of our outstanding common equity will be measured each year on the last day of our second fiscal quarter.

          Under the JOBS Act, emerging growth companies are also permitted to elect to delay adoption of new or revised accounting standards until companies that are not subject to periodic reporting obligations are required to comply, if such accounting standards apply to non-reporting

37


Table of Contents

companies. We have made an irrevocable decision to opt out of this extended transition period for complying with new or revised accounting standards.

          We cannot predict if investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to comply with the laws and regulations affecting public companies, particularly after we are no longer an emerging growth company.

          As a public company, particularly after we cease to qualify as an emerging growth company, we will incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements, in order to comply with the rules and regulations imposed by the Sarbanes-Oxley Act, as well as rules implemented by the SEC and NYSE. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives and our legal and accounting compliance costs will increase. It is likely that we will need to hire additional staff in the areas of investor relations, legal and accounting to operate as a public company. We also expect that these new rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our Board of Directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

          For example, the Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls over financial reporting and disclosure controls and procedures. In particular, as a public company, we will be required to perform system and process evaluations and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. As described above, as an emerging growth company, we may not need to comply with the auditor attestation provisions of Section 404 for several years. Our testing, or the subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. Our compliance with Section 404 will require that we incur substantial accounting expense and that management expend time on compliance-related issues. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, we could lose investor confidence in the accuracy and completeness of our financial reports, which could cause our stock price to decline.

          When the available exemptions under the JOBS Act, as described above, cease to apply, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with the requirements of the JOBS Act. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.

38


Table of Contents


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

          All statements (other than statements of historical facts) in this prospectus regarding the prospects of the industry and our prospects, plans, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "should", "expect", "intend", "will", "estimate", "anticipate", "believe", "predict", "potential" or "continue" or the negatives of these terms or variations of them or similar terminology. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. Such statements reflect the current views of our management with respect to our operations, results of operations and future financial performance. The following factors are among those that may cause actual results to differ materially from the forward-looking statements:

    adverse conditions affecting the United States economy;

    our ability to attract and retain club members;

    changes in consumer spending patterns, particularly with respect to demand for products and services;

    unusual weather patterns, extreme weather events and periodic and quasi-periodic weather patterns, such as the El Niño/La Niña-Southern Oscillation;

    material cash outlays required in connection with refunds or escheatment of membership initiation deposits;

    impairments to the suitability of our club locations;

    regional disruptions such as power failures, natural disasters or technical difficulties in any of the major areas in which we operate;

    seasonality of demand for our services and facilities usage;

    increases in the level of competition we face;

    the loss of members of our management team or key employees;

    increases in the cost of labor;

    increases in other costs, including costs of goods, rent, water, utilities and taxes;

    decreasing values of our investments;

    illiquidity of real estate holdings;

    timely, costly and unsuccessful development and redevelopment activities at our properties;

    unsuccessful or burdensome acquisitions or divestitures;

    restrictions placed on our ability to limit risk due to joint ventures and collaborative arrangements;

    insufficient insurance coverage and uninsured losses;

    accidents or injuries which occur at our properties;

    adverse judgments or settlements;

    pension plan liabilities;

39


Table of Contents

    our failure to comply with regulations relating to public facilities or our failure to retain the licenses relating to our properties;

    future environmental regulation, expenditures and liabilities;

    changes in or failure to comply with laws and regulations relating to our business and properties;

    failure to comply with privacy regulations or maintain the integrity of internal customer data;

    sufficiency and performance of the technology we own or license;

    write-offs of goodwill;

    cancellation of indebtedness income resulting from cancellation of certain indebtedness;

    risks related to tax examinations by the IRS;

    the ownership of a majority of our equity by affiliates of KSL;

    our substantial indebtedness, which may adversely affect our financial condition, our ability to operate our business, react to changes in the economy or our industry and pay our debts and which could divert our cash flows from operations for debt payments;

    our need to generate cash to service our indebtedness;

    the incurrence by us of substantially more debt, which could further exacerbate the risks associated with our substantial leverage; and

    restrictions in our debt agreements that limit our flexibility in operating our business.

          The preceding list is not intended to be an exhaustive list of all factors that could cause actual results to differ from our expectations. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Other sections of this prospectus may include additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Before investing in our common stock, investors should be aware that the occurrence of the events described under the caption "Risk Factors" and elsewhere in this prospectus could have a material adverse effect on our business, results of operations and financial condition.

          You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

          This prospectus contains statistical data that we obtained from industry publications and reports. These publications generally indicate that they have obtained their information from sources

40


Table of Contents

believed to be reliable, but do not guarantee the accuracy and completeness of their information. Although we believe the publications are reliable, we have not independently verified their data.

          You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements with these cautionary statements.

41


Table of Contents


USE OF PROCEEDS

          We estimate that we will receive net proceeds of approximately $        million from the sale of       shares of our common stock in this offering, based on the assumed initial public offering price of $       per share, which is the mid-point of the range set forth on the cover page of this prospectus, and after deducting the underwriting discounts and commissions and estimated offering expenses. Pursuant to our registration rights agreement, we will pay all expenses (other than underwriting discounts and commissions) of the selling stockholder in connection with this offering. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholder, including upon the sale of shares if the underwriters exercise their option to purchase additional shares from the selling stockholder.

          We will use a portion of the net proceeds received by us from this offering to redeem $145.25 million in aggregate principal amount of the Senior Notes, plus accrued and unpaid interest thereon, and to pay approximately $14.5 million of redemption premium. This redemption is pursuant to a provision in the indenture governing the Senior Notes that permits us to redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 110% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date. As of March 19, 2013, $415.0 million aggregate principal amount of the Senior Notes was outstanding. The Senior Notes mature on December 1, 2018 and have an interest rate of 10%. See "Description of Indebtedness".

          In connection with this offering, we intend to terminate the Management Agreement in accordance with its terms. We will use approximately $        million of the net proceeds from this offering and borrowings under the Secured Credit Facilities to pay a one-time termination fee to an affiliate of KSL in connection with the termination of the Management Agreement. See "Certain Relationships and Related Party Transactions — Management Agreement".

          To the extent we raise more proceeds in this offering than currently estimated, we will use such proceeds for general corporate purposes. To the extent we raise less proceeds in this offering than currently estimated, we may, if necessary, reduce the amount of the Senior Notes that will be redeemed.

          An increase (decrease) of 100,000 shares from the expected number of shares to be sold by us in this offering, assuming no change in the assumed initial public offering price per share, which is the mid-point of the range set forth on the cover page of this prospectus, would increase (decrease) our net proceeds from this offering by $        million. A $1.00 increase (decrease) in the assumed initial public offering price of $       per share, based on the mid-point of the range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by $        million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

42


Table of Contents


DIVIDEND POLICY

          We did not declare or pay any cash dividends on our common stock in the fiscal years ended December 27, 2011 and December 25, 2012. On December 26, 2012, we declared a cash distribution of $35.0 million to the owners of our common stock. This distribution was paid on December 27, 2012.

          After completion of this offering, we intend to pay cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements and in any preferred stock, business prospects and other factors that our Board of Directors may deem relevant. We expect to pay a quarterly cash dividend on our common stock of $       per share, or $             per annum, commencing in the              quarter of         . The payment of such quarterly dividends and any future dividends will be at the discretion of our Board of Directors.

          Our ability to pay dividends depends in part on our receipt of cash distributions from our operating subsidiaries, which may be restricted from distributing us cash as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur. In particular, the ability of our subsidiaries to distribute cash to ClubCorp Holdings, Inc. is limited by covenants in the credit agreement governing the Secured Credit Facilities and the indenture governing the Senior Notes. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Indebtedness" for a description of the restrictions on our ability to pay dividends.

43


Table of Contents


CAPITALIZATION

          The following table sets forth our cash and cash equivalents and our capitalization as of March 19, 2013:

    on an actual basis; and

    on an as adjusted basis, giving further effect to (1) the sale by us of approximately         shares of our common stock in this offering based on the assumed initial offering price of $    per share, which is the mid-point of the range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, (2) the borrowing of additional revolving credit loans under the Secured Credit Facilities in connection with the closing of this offering, (3) the redemption of $145.25 million in aggregate principal amount of the Senior Notes, plus accrued and unpaid interest thereon, and the payment of approximately $14.5 million of redemption premium, (4) the payment of $              million to an affiliate of KSL in connection with the termination of the Management Agreement as described in "Use of Proceeds", and (5) the effectiveness of our amended and restated articles of incorporation at the time of the closing of this offering.

          You should read this table together with "Selected Financial Data", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the related notes appearing elsewhere in this prospectus.

 
  As of March 19, 2013  
 
 
Actual
 
As Adjusted(1)
 
 
  (in thousands, except share data)
 

Cash and cash equivalents

  $ 60,199   $    
           

Long-term debt, including current portion of long-term debt:

             

Secured Credit Facilities(2)

  $ 303,800   $    

Senior Notes

    415,000     269,750  

Other long-term debt

    72,869     72,869  

Total debt, including current portion (includes $13,331 related to VIEs)

    791,669        

Stockholders' equity:

             

Common stock, $0.01 par value; 2,000,000 shares authorized, 1,000,000 shares issued and outstanding, actual;             shares authorized,             shares issued and outstanding, as adjusted

    10        

Preferred stock, $0.01 par value; no shares authorized, no shares issued and outstanding, actual;             shares authorized, no shares issued and outstanding, as adjusted

             

Additional paid-in capital

   
149,956
       

Retained deficit(3)

    (51,293 )      
           

Total equity

    98,673        
           

Total capitalization

  $ 890,342   $    
           

(1)
A $1.00 increase or decrease in the assumed initial public offering price of $    per share, the mid-point of the price range set forth on the cover of this prospectus, would increase or decrease, as applicable, cash and cash equivalents, additional paid-in capital, total

44


Table of Contents

    stockholders' equity and total capitalization by $         , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. An increase or decrease of 100,000 shares in the number of shares sold in this offering by us would increase or decrease, as applicable, cash and cash equivalents, additional paid-in capital, total stockholders' equity and total capitalization by $         , assuming an initial public offering price of $    per share, the mid-point of the price range set forth on the cover of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

(2)
As adjusted, reflects expected new borrowing of $         of additional revolving credit loans under the Secured Credit Facilities in connection with the closing of this offering. See "Description of Indebtedness — Secured Credit Facilities".

(3)
Includes accumulated other comprehensive income and non-controlling interests in consolidated subsidiaries.

    The number of shares of our common stock to be outstanding after this offering is based on          shares outstanding as of March 19, 2013 and excludes:

                  shares of common stock available for future grant under the Stock Plan.

45


Table of Contents


DILUTION

          If you invest in our common stock in this offering, your ownership interest in us will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the net tangible book value per share of our common stock as adjusted to give effect to this offering. Dilution results from the fact that the per share offering price of the common stock is substantially in excess of the book value per share attributable to the shares of common stock held by existing stockholders.

          Our net tangible book value (deficit) as of March 19, 2013 was approximately $(191.1) million, or $(         ) per share of our common stock. We calculate net tangible book value per share by taking the amount of our total tangible assets, reduced by the amount of our total liabilities, and then dividing that amount by the total number of shares of common stock outstanding.

          After giving effect to our sale of the shares in this offering at an assumed initial public offering price of $    per share, which is the mid-point of the range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our net tangible book value (deficit) as adjusted to give effect to this offering on March 19, 2013 would have been $(         ) million, or $(         ) per share of our common stock. This amount represents an immediate increase in net tangible book value (deficit) of $    per share to existing stockholders and an immediate and substantial dilution in net tangible book value of $     per share to new investors purchasing shares in this offering at the assumed initial public offering price.

          The following table illustrates this dilution on a per share basis:

Assumed initial public offering price per share

  $    

Net tangible book value per share as of March 19, 2013

    (        )

Increase in net tangible book value (deficit) per share attributable to new investors purchasing shares in this offering

       
       

Net tangible book value (deficit) per share of common stock as adjusted to give effect to this offering

    (        )
       

Dilution per share to new investors in this offering

  $    
       

          Dilution is determined by subtracting net tangible book value per share of common stock as adjusted to give effect to this offering, from the initial public offering price per share of common stock.

          Assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, a $1.00 increase or decrease in the assumed initial public offering price of $    per share, which is the mid-point of the range set forth on the cover page of this prospectus, would increase or decrease the net tangible book value (deficit) attributable to new investors purchasing shares in this offering by $    per share and the dilution to new investors by $    per share and increase or decrease the net tangible book value (deficit) per share, as adjusted to give effect to this offering, by $    per share.

          The following table summarizes, as of March 19, 2013, the differences between the number of shares purchased from us, the total consideration paid to us, and the average price per share paid by existing stockholders and by new investors. As the table shows, new investors purchasing shares in this offering will pay an average price per share substantially higher than our existing stockholders paid. The table below is based on         shares of common stock outstanding immediately after the consummation of this offering and does not give effect to the shares of

46


Table of Contents

common stock reserved for future issuance under the Stock Plan. A total of         shares of common stock has been reserved for future issuance under the Stock Plan. The table below assumes an initial public offering price of $    per share, which is the mid-point of the range set forth on the cover page of this prospectus, for shares purchased in this offering and excludes underwriting discounts and commissions and estimated offering expenses payable by us:

 
  Shares Purchased   Total Consideration  
Average
Price
Per
Share
 
 
 
Number
 
Percent
 
Amount
 
Percent
   
 
 
  (in thousands)
 

Existing stockholders

            % $ 260,530       % $    

New investors(1)

                               
                         

Total

            % $         % $    
                         

(1)
Does not reflect shares purchased by new investors from the selling stockholder.

          If the underwriters were to fully exercise the underwriters' option to purchase         additional shares of our common stock, the percentage of shares of our common stock held by existing stockholders who are directors, officers or affiliated persons would be    % and the percentage of shares of our common stock held by new investors would be    %.

          Assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, a $1.00 increase or decrease in the assumed initial public offering price of $    per share, which is the mid-point of the range set forth on the cover page of this prospectus, would increase or decrease total consideration paid by new investors and total consideration paid by all stockholders by approximately $     million.

47


Table of Contents


SELECTED FINANCIAL DATA

          The following table sets forth our selected financial data for the periods presented. Our fiscal year consists of a 52/53 week period ending on the last Tuesday of December. Each of our first, second and third fiscal quarters consists of 12 weeks and our fourth fiscal quarter consists of 16 weeks, with an entire week added onto the fourth quarter every five to six years. For 2012, 2011 and 2010, our fiscal years were comprised of the 52 weeks ended December 25, 2012, December 27, 2011 and December 28, 2010, respectively.

          The statements of operations data set forth below for the fiscal years ended December 25, 2012, December 27, 2011 and December 28, 2010 are derived from our audited consolidated financial statements that are included elsewhere in this prospectus. The statements of operations data set forth below for the 12 weeks ended March 19, 2013 and March 20, 2012 and the balance sheet data as of March 19, 2013 are derived from our unaudited consolidated condensed financial statements that are included elsewhere in this prospectus. The unaudited consolidated condensed financial statements were prepared on a basis consistent with our audited consolidated financial statements. The historical results presented below are not necessarily indicative of financial results to be achieved in future periods.

          This selected financial data should be read in conjunction with "Capitalization", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited consolidated financial statements and unaudited consolidated condensed financial statements and the related notes thereto included elsewhere in this prospectus.

48


Table of Contents

 
  Fiscal Years Ended   Twelve Weeks Ended  
 
 
December 25,
2012
 
December 27,
2011
 
December 28,
2010(1)
 
March 19,
2013
 
March 20,
2012
 
 
  (in thousands, except per share data)
 

Statements of Operations Data:

                               

Revenues:

                               

Club operations

  $ 535,274   $ 513,282   $ 495,424   $ 114,338   $ 110,877  

Food and beverage

    216,269     203,508     189,391     39,916     38,121  

Other revenues

    3,401     3,172     2,882     806     708  
                       

Total revenues

    754,944     719,962     687,697     155,060     149,706  

Club operating costs exclusive of depreciation

    483,653     468,577     451,286     104,193     101,018  

Cost of food and beverage sales exclusive of depreciation

    68,735     64,256     59,671     13,868     12,943  

Depreciation and amortization

    78,286     93,035     91,700     16,155     18,603  

Provision for doubtful accounts

    2,765     3,350     3,194     710     742  

Loss (gain) on disposals and acquisitions of assets

    10,904     9,599     (5,380 )   1,219     (624 )

Impairment of assets

    4,783     1,173     8,936          

Equity in earnings from unconsolidated ventures

    (1,947 )   (1,487 )   (1,309 )   (217 )   (319 )

Selling, general and administrative

    45,343     52,382     38,946     9,908     10,550  
                       

Operating income

    62,422     29,077     40,653     9,224     6,793  

Interest and investment income

    1,212     138     714     75     23  

Interest expense

    (89,326 )   (84,609 )   (57,707 )   (19,580 )   (20,146 )

Change in fair value of interest rate cap agreements

    (43 )   (137 )   (3,529 )        

Gain on extinguishment of debt

            334,423          

Other income

    2,132     3,746     3,929         865  
                       

(Loss) income from continuing operations before taxes

    (23,603 )   (51,785 )   318,483     (10,281 )   (12,465 )

Income tax benefit (expense)

    7,528     16,421     (57,107 )   (205 )   2,799  
                       

(Loss) income from continuing operations

  $ (16,075 ) $ (35,364 ) $ 261,376   $ (10,486 ) $ (9,666 )

Loss from discontinued Non-Core Entities, net of tax

            (8,270 )        

Loss from discontinued clubs, net of tax

    (10,917 )   (258 )   (443 )   (5 )   (60 )
                       

Net (loss) income

  $ (26,992 ) $ (35,622 ) $ 252,663   $ (10,491 ) $ (9,726 )

Net loss attributable to discontinued non-core entities' noncontrolling interests

            1,966          

Net income attributable to noncontrolling interests

    (283 )   (575 )   (346 )   41     13  
                       

Net (loss) income attributable to ClubCorp Holdings, Inc. 

  $ (27,275 ) $ (36,197 ) $ 254,283   $ (10,450 ) $ (9,713 )
                       

49


Table of Contents

 
  Fiscal Years Ended   Twelve Weeks Ended  
 
 
December 25,
2012
 
December 27,
2011
 
December 28,
2010(1)
 
March 19,
2013
 
March 20,
2012
 
 
  (in thousands, except per share data)
 

Per share data(2):

                               

(Loss) income from continuing operations attributable to ClubCorp Holdings, Inc., per share (basic and diluted)

  $ (16.36 ) $ (35.94 ) $ 261.03   $ (10.45 ) $ (9.65 )

Pro forma (loss) income from continuing operations attributable to ClubCorp Holdings, Inc. (basic and diluted)(3)

  $                 $          
                             

Weighted average shares outstanding, used in basic and diluted per share amounts

    1,000     1,000     1,000     1,000     1,000  

Cash distributions per common share

  $   $   $   $ 35.00   $  

 
  As of March 19, 2013  
 
  (in thousands)
 

Balance Sheet Data:

       

Cash and cash equivalents

  $ 60,199  

Land and non-depreciable land improvements

    531,497  

Total assets

    1,695,544  

Total long-term funded debt(4)

   
753,248
 

Total long-term liabilities

    1,318,309  

Total equity

   
98,673
 

(1)
The statements of operations and balance sheet data reflect the ClubCorp Formation from November 30, 2010 (as described in "Management's Discussion and Analysis of Financial Condition and Results of Operations — ClubCorp Formation"), which was treated as a reorganization of entities under common control. The gain on extinguishment of debt was recognized as lenders under certain facilities forgave debt in conjunction with the ClubCorp Formation.

(2)
All share and per share amounts reflect a 1,000 for 1 forward stock split of our common stock that took place on March 15, 2012.

(3)
On December 26, 2012, we declared a special cash distribution of $35.0 million to the owners of our common stock. As this offering is expected to occur within 12 months of the distribution and we have a net loss for fiscal year 2012 and the 12 weeks ended March 19, 2013, for earnings per share purposes, the distribution is deemed to be paid out of proceeds of the offering rather than current period earnings. As such, the unaudited pro forma earnings per share data for the fiscal year ended December 25, 2012 and the 12 weeks ended March 19, 2013 give effect to the number of shares the proceeds from which would be necessary to pay the distribution.

(4)
Includes total long-term debt less capital leases, other indebtedness and notes payable related to certain non-core development entities.

50


Table of Contents


MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          The following discussion and analysis of our financial condition and results of operations should be read together with the section titled "Selected Financial Data", our audited consolidated financial statements and unaudited consolidated condensed financial statements and the related notes thereto included elsewhere in this prospectus. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" or in other sections of this prospectus.


ClubCorp Formation

          ClubCorp Holdings, Inc. ("Holdings") and its wholly owned subsidiaries CCA Club Operations Holdings, LLC ("Parent") and ClubCorp Club Operations, Inc. ("Operations", and together with Holdings and Parent, "ClubCorp") were formed on November 10, 2010, as part of a reorganization of ClubCorp, Inc. ("CCI") for the purpose of operating and managing golf, country, business, sports and alumni clubs.

          Prior to November 30, 2010, CCI was a holding company that through its subsidiaries owned and operated golf, country, business, sports and alumni clubs, two full-service resorts and certain other equity and realty interests. The two full service resorts and certain other equity, realty and future royalty interests are referred to as the "Non-Core Entities". Effective as of November 30, 2010, the following transactions occurred (the "ClubCorp Formation") which were structured to complete the contribution of the golf, country, business, sports and alumni clubs into Operations.

    Fillmore CCA Holdings, Inc. ("Fillmore Inc."), an affiliate of KSL, formed two wholly owned subsidiaries, Operations and Parent, and transferred its interests through a contribution of 100% of the stock of CCI to Operations.

    Investment vehicles controlled by KSL indirectly contributed $260.5 million as equity capital to Operations.

    Fillmore Inc. reincorporated in Nevada through a merger into Holdings, a newly formed Nevada corporation, with Holdings as the surviving entity. CCI merged into ClubCorp USA, Inc. ("CCUSA"), with CCUSA surviving as a wholly-owned subsidiary of Operations.

    Operations issued and sold $415.0 million of senior unsecured notes and borrowed $310.0 million of secured term loans under the Secured Credit Facilities.

    Operations sold the Non-Core Entities to affiliates of KSL.

    Operations repaid a portion of the loans under its then existing secured credit facilities. The lenders under such facilities forgave the remaining $342.3 million of debt owed under such facilities and such facilities were terminated.

    Operations settled certain balances owed to affiliates of KSL.

Implications of the ClubCorp Formation

          Our operating results and financial condition have been and will continue to be impacted by the ClubCorp Formation. As a result of the ClubCorp Formation in November 2010, we began incurring increased interest expense as a result of higher aggregate interest rates on our outstanding indebtedness. In addition, our taxpayer status has changed due to taxable gains and certain tax attribute reductions triggered by the ClubCorp Formation that utilized our net operating loss carryforwards.

51


Table of Contents


Discontinued Non-Core Entities

          In connection with the ClubCorp Formation, Operations sold the Non-Core Entities to affiliates of KSL and certain real estate and associated obligations to Fillmore CCA Investment, LLC on November 30, 2010. The financial results of such entities prior to November 30, 2010 are presented as discontinued Non-Core Entities.


Overview

          We are a leading owner-operator of private golf, country, business, sports and alumni clubs in North America. Our portfolio of 151 owned or operated clubs, with over 145,000 memberships, serves over 350,000 individual members. Our operations are organized into two business segments: (1) golf and country clubs and (2) business, sports and alumni clubs. We are the largest owner of private golf and country clubs in the United States and own the underlying real estate for 80 of our 102 golf and country clubs. We lease, manage or operate through joint ventures the remaining 22 golf and country clubs. Likewise, we own one business club and lease, manage or operate through a joint venture the remaining 48 business, sports and alumni clubs. Our facilities are located in 23 states, the District of Columbia and two foreign countries. Our golf and country clubs are designed to appeal to the entire family, fostering member loyalty which we believe allows us to capture a greater share of our member households' discretionary leisure spending. Our business, sports and alumni clubs are designed to provide our members with a "home away from home" where they can work, network and socialize in private upscale locations. We offer our members privileges throughout our entire collection of clubs, and we believe that our diverse facilities, recreational offerings and social programming enhance our ability to attract and retain members across a number of demographic groups. We also have alliances with other clubs, resorts and facilities located worldwide through which our members can enjoy additional access, discounts, special offerings and privileges outside of our owned and operated clubs. Given the breadth of our products, services and amenities, we believe we offer a compelling value proposition to our members.


Factors Affecting our Business

          A significant percentage of our revenues is derived from membership dues, and we believe these dues together with the geographic diversity of our clubs help to provide us with a recurring revenue base that limits the impact of fluctuations in regional economic conditions. The economic environment had a negative impact on our business and the private club industry in general during 2010 and 2011 and to a lesser extent in 2012, resulting in member attrition. Additionally, we have closed certain business clubs that were underperforming and terminated certain golf and country club management agreements. See "Club Acquisitions and Dispositions".

          Despite the impact of the recent economic environment and club closings, we believe our efforts to position our clubs as focal points in communities with offerings that can appeal to the entire family of each of our members has enhanced member loyalty and mitigated attrition rates in our membership base compared to the industry as a whole. We believe the strength and size of our portfolio of clubs combined with the stability of our membership base will enable us to maintain our position as an industry leader in the future.

          As the largest owner-operator of private golf and country clubs in the United States, we enjoy economies of scale and a leadership position. We expect to strategically expand and upgrade our portfolio through acquisitions and targeted capital investments. Our targeted capital investment program is expected to yield positive financial results, focusing on facility upgrades to improve our members' experience and the utilization of our facilities and amenities.

52


Table of Contents

Enrollment and Retention of Members

          Our success depends on our ability to attract and retain members at our clubs and maintain or increase usage of our facilities. Historically, we have experienced varying levels of membership enrollment and attrition rates and, in certain areas, decreased levels of usage of our facilities. We devote substantial efforts to maintaining member and guest satisfaction, although many of the factors affecting club membership and facility usage are beyond our control. Periods where attrition rates exceed enrollment rates or where facility usage is below historical levels could have a material adverse effect on our business, operating results and financial position.

          We offer various programs at our clubs designed to minimize future attrition rates by increasing member satisfaction and usage. These programs take a proactive approach to getting current and newly enrolled members involved in activities and groups that go beyond their physical club. Additionally, these programs grant discounts on meals and other items in order to increase their familiarity with and usage of their club's amenities. One such offering is our O.N.E. program, an upgrade offering that combines what we refer to as "comprehensive club, community and world benefits". With this offering, members receive 50% off a la carte dining at their home club; preferential offerings to clubs in their community (including those owned by us), as well as at local spas, restaurants and other venues; and complimentary privileges to more than 200 golf and country, business, sporting and athletic clubs when traveling outside of their community with additional offerings and discounts to more than 700 renowned hotels, resorts, restaurants and entertainment venues. As of December 25, 2012, approximately 40% of our members took advantage of one or more of our upgrade programs, as compared to 38% of members who took advantage of our upgrade programs as of the end of the prior fiscal year.

          The following table presents our membership counts for continuing operations at the end of the periods indicated:

Total memberships at end of period:
 
Mar. 19,
2013
 
Dec. 25,
2012
 
#
Change
 
%
Change
 
Mar. 20,
2012
 
Dec. 27,
2011
 
#
Change
 
%
Change
 

Golf and Country Clubs

                                                 

Same Store Clubs(1)

    81,079     81,112     (33 )    — %   79,451     79,540     (89 )   (0.1 )%

New or Acquired Clubs

    1,677     1,607     70     4.4 %   1,199     1,079     120     11.1 %
                                   

Total Golf and Country Clubs

    82,756     82,719     37      — %   80,650     80,619     31      — %

Business, Sports and Alumni Clubs

                                                 

Same Store Clubs(1)

    62,310     62,046     264     0.4 %   62,516     62,953     (437 )   (0.7 )%

New or Acquired Clubs

                 — %                — %
                                   

Total Business, Sports and Alumni Clubs(2)

    62,310     62,046     264     0.4 %   62,516     62,953     (437 )   (0.7 )%

Total

                                                 

Same Store Clubs(1)

    143,389     143,158     231     0.2 %   141,967     142,493     (526 )   (0.4 )%

New or Acquired Clubs

    1,677     1,607     70     4.4 %   1,199     1,079     120     11.1 %
                                   

Total memberships at end of period

    145,066     144,765     301     0.2 %   143,166     143,572     (406 )   (0.3 )%
                                   

(1)
See "— Basis of Presentation — Same Store Analysis".

(2)
Does not include certain international club memberships.

Seasonality of Demand and Fluctuations in Quarterly Results

          Our quarterly results fluctuate as a result of a number of factors. Usage of our country club and golf facilities decline significantly during the first and fourth quarters, when colder temperatures and shorter days reduce the demand for golf and golf-related activities. Our business clubs typically generate a greater share of their yearly revenues in the fourth quarter, which includes the holiday and year-end party season.

53


Table of Contents

          Our results can also be affected by non-seasonal and severe weather patterns. Periods of extremely hot, dry, cold or rainy weather in a given region can be expected to impact our golf-related revenue for that region. Similarly, extended periods of low rainfall can affect the cost and availability of water needed to irrigate our golf courses and can adversely affect results for facilities in the impacted region. Keeping turf grass conditions at a satisfactory level to attract play on our golf courses requires significant amounts of water. Our ability to irrigate a course could be adversely impacted by a drought or other water shortage. A severe drought affecting a large number of properties could have a material adverse affect on our business and results of operations.

          In addition, the first, second and third fiscal quarters each consist of 12 weeks, whereas, the fourth quarter consists of 16 or 17 weeks of operations. As a result of these factors, we usually generate a disproportionate share of our revenues and cash flows in the second, third and fourth quarters of each year and have lower revenues and profits in the first quarter. The timing of purchases, sales, leasing of facilities or divestitures, has also caused and may cause our results of operations to vary significantly in otherwise comparable periods. To clarify variations caused by newly acquired or divested operations, we employ a same store analysis for year-over-year comparability purposes. See "Basis of Presentation — Same Store Analysis".

Club Acquisitions and Dispositions

          We continually evaluate opportunities to expand our business through select acquisitions of attractive properties. We also evaluate joint ventures and management opportunities that allow us to expand our operations and increase our recurring revenue base without substantial capital outlay. We believe that the fragmented nature of the private club industry presents significant opportunities for us to expand our portfolio by leveraging our operational expertise and by taking advantage of market conditions. Additionally, during the normal course of business, we have closed certain business, sports and alumni clubs that were underperforming and terminated certain golf and country club management agreements.

          The table below summarizes the number and type of club acquisitions and dispositions during the periods indicated:

 
  Golf & Country Clubs   Business, Sports & Alumni Clubs  
Acquisitions /
(Dispositions)
 
Owned
Clubs
 
Leased
Clubs
 
Managed
 
Joint
Venture
 
Total
 
Owned
Clubs
 
Leased
Clubs
 
Managed
 
Joint
Venture
 
Total
 

December 27, 2011

    80     12     3     6     101     2     44     4     1     51  

First Quarter 2012(1)

                                         

Second Quarter 2012(2)

        1     1         2                      

Third Quarter 2012(3)

                        (1 )   (1 )           (2 )

Fourth Quarter 2012(4)

            (1 )       (1 )                    

December 25, 2012

    80     13     3     6     102     1     43     4     1     49  

First Quarter 2013

                                         

March 19, 2013

    80     13     3     6     102     1     43     4     1     49  

(1)
In January 2012, we entered into a new agreement to manage and operate LPGA International, a semi-private golf and country club located in Daytona Beach, Florida, and the management agreement with the owner of Eagle Ridge Golf Club and the Preserve Golf Club was amended to remove the Preserve Golf Club as a result of the owner's sale of the property.

(2)
In March 2012, we entered into an agreement to manage and operate Hollytree Country Club, a private country club in Tyler, Texas, and, in April 2012, we acquired Hartefeld National Golf Club, a private country club in Avondale, Pennsylvania.

(3)
In August 2012, we ceased operating the Westlake Club in Houston, Texas, and we sold Le Club in September 2012, an owned sports club in Milwaukee, Wisconsin.

54


Table of Contents

(4)
The management agreement with the owner of Eagle Ridge Golf Club and the Preserve Golf Club was terminated with respect to Eagle Ridge in December 2012 as a result of the owner's sale of the underlying property.


Basis of Presentation

          Total revenues recorded in our two principal business segments, (1) golf and country clubs and (2) business, sports and alumni clubs, are comprised mainly of revenues from membership dues, food and beverage operations and golf operations. Operating expenses recorded in our two principal business segments primarily consist of labor expenses, food and beverage costs, golf course maintenance costs and general and administrative costs.

          We also disclose other ("Other,") which is comprised primarily of income from alliance arrangements, a portion of the revenue associated with upgrade offerings, corporate overhead expenses, and shared services. Other also includes corporate assets such as cash, goodwill, intangible assets, and loan origination fees.

EBITDA and Adjusted EBITDA

          EBITDA is calculated as net income plus interest, taxes, depreciation and amortization less interest and investment income. Adjusted EBITDA is based on the definition of Consolidated EBITDA as defined in the credit agreement governing the Secured Credit Facilities and may not be comparable to other companies. Adjusted EBITDA is included because the indenture governing the Senior Notes and the credit agreement governing the Secured Credit Facilities contain certain financial and non-financial covenants which require Parent, Operations and their restricted subsidiaries to maintain specified financial ratios on a rolling four quarter basis and utilize this measure of Adjusted EBITDA. Adjusted EBITDA is also considered when evaluating executive performance.

          We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about the calculation, and compliance with certain financial covenants in the indenture governing the Senior Notes and under the Secured Credit Facilities, as Adjusted EBITDA is a material component of these covenants. In addition, investors, lenders, financial analysts and rating agencies have historically used EBITDA related measures in our industry, along with other measures, to evaluate a company's ability to meet its debt service requirement, to estimate the value of a company and to make informed investment decisions. Adjusted EBITDA is also considered when evaluating our executive compensation.

          Adjusted EBITDA is not a measure determined in accordance with GAAP and should not be considered as an alternative to, or more meaningful than, net income (as determined in accordance with GAAP) as a measure of our operating results or net cash provided by operating activities (as determined in accordance with GAAP) as a measure of our liquidity. Our measurements of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

55


Table of Contents

          The reconciliation of net (loss) income to EBITDA and Adjusted EBITDA is as follows:

 
  Fiscal Years Ended   Twelve
Weeks Ended
  Four Quarters
Ended
 
 
 
December 25,
2012
 
December 27,
2011
 
December 28,
2010
 
March 19,
2013
 
March 19,
2013
 
 
  (in thousands)
 

Net (loss) income

  $ (26,992 ) $ (35,622 ) $ 252,663   $ (10,491 ) $ (27,757 )

Interest expense

    89,326     84,609     57,707     19,580     88,760  

Income tax (benefit) expense

    (7,528 )   (16,421 )   57,107     205     (4,524 )

Interest and investment income

    (1,212 )   (138 )   (714 )   (75 )   (1,264 )

Depreciation and amortization

    78,286     93,035     91,700     16,155     75,838  
                       

EBITDA

    131,880     125,463     458,463     25,374     131,053  

Impairments and disposition of assets(a)

    26,604     11,030     12,269     1,224     28,392  

Non-cash adjustments(b)

    2,280     363     1,661     882     3,109  

Other adjustments(c)

    2,865     15,311     2,907     1,693     4,628  

Acquisition adjustment(d)

    2,560     5,006     9,274     591     2,560  

Gain on extinguishment of debt(e)

            (334,423 )        
                       

Adjusted EBITDA

  $ 166,189   $ 157,173   $ 150,151   $ 29,764   $ 169,742  

(a)
Includes non-cash impairment charges related to: liquor licenses, property and equipment, equity method investments and mineral rights as well as net loss from discontinued clubs.

(b)
Includes non-cash items related to purchase accounting associated with the acquisition of ClubCorp, Inc. in 2006, by affiliates of KSL, amortization of proceeds received from certain mineral lease and surface right agreements and expense recognized for our long-term incentive plan.

(c)
Other adjustments include management fees and expenses paid to an affiliate, earnings of equity method investments less cash distributions from said investments, income or loss attributable to non-controlling equity interests of continuing operations, non-recurring charges incurred in connection with the ClubCorp Formation, costs and other non-recurring charges permitted to be excluded by the credit agreement governing the Secured Credit Facilities.

(d)
Represents deferred revenue related to initiation deposits and fees that would have been recognized in the applicable period but for the application of purchase accounting in connection with the purchase of ClubCorp, Inc. in 2006.

(e)
Represents the gain on extinguishment of debt in conjunction with the ClubCorp Formation.

Segment EBITDA

          We evaluate segment performance and allocate resources based on Segment EBITDA. We consider Segment EBITDA an important indicator of the operational strength and performance of our business. We include Segment EBITDA because it is a key financial measure used by our management to (1) internally measure our operating performance and (2) assess our ability to service our debt, incur additional debt and meet our capital expenditure requirements.

          We define Segment EBITDA as net income before discontinued operations, interest and investment income, interest expense and the change in fair value of interest rate cap agreements, income taxes, gain or loss on disposal, acquisition and impairment of assets, gain on extinguishment of debt and depreciation and amortization. Segment EBITDA differs from Adjusted EBITDA, although, Segment EBITDA may be adjusted for items similar to those defined in the indenture governing the Senior Notes and the credit agreement governing the Secured Credit Facilities. Segment EBITDA has been calculated using this definition for all periods presented. For

56


Table of Contents

more information, see Note 15 of our audited consolidated financial statements included elsewhere in this prospectus.

          Segment EBITDA should not be construed as an alternative to, or a better indicator of, operating income or loss, is not based on GAAP and is not necessarily a measure of our cash flows or ability to fund our cash needs. Our measurements of Segment EBITDA may not be comparable to similarly titled measures reported by other companies.

          The following table below provides a reconciliation of our Segment EBITDA to net (loss) income before income taxes and discontinued operations for the periods indicated:

 
  Fiscal Years Ended   Twelve Weeks Ended  
 
 
December 25,
2012
 
December 27,
2011
 
December 28,
2010
 
March 19,
2013
 
March 20,
2012
 
 
  (in thousands)
 

Total Segment EBITDA

  $ 165,516   $ 154,102   $ 144,490   $ 28,184   $ 27,178  

Interest and investment income

    1,212     138     714     75     23  

Interest expense and change in fair value of interest rate cap agreements

    (89,369 )   (84,746 )   (61,236 )   (19,580 )   (20,146 )

Loss on disposals and impairment of assets

    (15,687 )   (10,772 )   (3,556 )   (1,219 )   624  

Gain on extinguishment of debt

            334,423              

Depreciation and amortization

    (78,286 )   (93,035 )   (91,700 )   (16,155 )   (18,603 )

Translation loss

    (126 )   (554 )   (146 )   (75 )   (135 )

Business interruption insurance

    309                      

Severance payments

    (360 )   (431 )   (515 )   (21 )   (128 )

Management fees and expenses paid to an affiliate of KSL

    (1,141 )   (1,255 )   (1,150 )   (252 )   (263 )

Acquisition costs

    (837 )   (1,629 )       (52 )   (12 )

Amortization of step-up in certain equity method investments

    (2,027 )   (2,048 )   (2,048 )   (463 )   (473 )

ClubCorp Formation costs

    (51 )   (2,087 )   (752 )       (74 )

Environmental compliance costs

    (27 )   (454 )            

Property tax increases prior to 2011

        (2,655 )            

Arbitration award

        (3,968 )            

Long-term incentive plan

    (1,661 )   (1,661 )       (347 )   (383 )

Other

    (1,068 )   (730 )   (41 )   (376 )   (73 )
                       

Net (loss) income before income taxes and discontinued operations

  $ (23,603 ) $ (51,785 ) $ 318,483   $ (10,281 ) $ (12,465 )
                       

57


Table of Contents

Same Store Analysis

          We employ "same store" analysis techniques for a variety of management purposes. By our definition, clubs are evaluated at the beginning of each year and considered same store once they have been fully operational for one fiscal year. Newly acquired or opened clubs and divested clubs are not classified as same store; however, clubs held for sale are considered same store until they are divested. Once a club has been divested, it is removed from the same store classification for all periods presented and included in discontinued operations. For same store year-over-year comparisons, clubs must be open the entire year for both years in the comparison to be considered same store, therefore, same store facility counts and operating results may vary depending on the years of comparison. We believe this approach provides for a more effective analytical tool because it allows us to assess the results of our core operating strategies by tracking the performance of our established same store clubs without the in-comparability caused by the inclusion of newly acquired or opened clubs.

          Our fiscal year consists of a 52/53 week period ending on the last Tuesday of December. Our first, second and third quarters each consist of 12 weeks while our fourth quarter consists of 16 or 17 weeks. For 2010, 2011 and 2012, the fiscal years were comprised of the 52 weeks ended December 28, 2010, December 27, 2011 and December 25, 2012, respectively.

58


Table of Contents


Results of Operations

          The following table presents our consolidated statements of operations as a percent of total revenues for the periods indicated:

 
  Fiscal Years Ended   Twelve Weeks Ended  
 
 
December 25,
2012
 
% of
Revenue
 
December 27,
2011
 
% of
Revenue
 
December 28,
2010
 
% of
Revenue
 
March 19,
2013
 
% of
Revenue
 
March 20,
2012
 
% of
Revenue
 
 
  (dollars in thousands)
 

Revenues:

                                                             

Club operations

  $ 535,274     70.9 % $ 513,282     71.3 % $ 495,424     72.0 % $ 114,338     73.7 % $ 110,877     74.1 %

Food and beverage

    216,269     28.6 %   203,508     28.3 %   189,391     27.5 %   39,916     25.7 %   38,121     25.5 %

Other revenues

    3,401     0.5 %   3,172     0.4 %   2,882     0.4 %   806     0.5 %   708     0.5 %
                                                     

Total revenues

    754,944           719,962           687,697           155,060           149,706        

Direct and selling, general and administrative expenses:

                                                             

Club operating costs exclusive of depreciation

    483,653     64.1 %   468,577     65.1 %   451,286     65.6 %   104,193     67.2 %   101,018     67.5 %

Cost of food and beverage sales exclusive of depreciation

    68,735     9.1 %   64,256     8.9 %   59,671     8.7 %   13,868     8.9 %   12,943     8.6 %

Depreciation and amortization

    78,286     10.4 %   93,035     12.9 %   91,700     13.3 %   16,155     10.4 %   18,603     12.4 %

Provision for doubtful accounts

    2,765     0.4 %   3,350     0.5 %   3,194     0.5 %   710     0.5 %   742     0.5 %

Loss (gain) on disposals and acquisitions of assets

    10,904     1.4 %   9,599     1.3 %   (5,380 )   (0.8 )%   1,219     0.8 %   (624 )   (0.4 )%

Impairment of assets

    4,783     0.6 %   1,173     0.2 %   8,936     1.3 %       %       %

Equity in earnings from unconsolidated ventures

    (1,947 )   (0.3 )%   (1,487 )   (0.2 )%   (1,309 )   (0.2 )%   (217 )   (0.1 )%   (319 )   (0.2 )%

Selling, general and administrative

    45,343     6.0 %   52,382     7.3 %   38,946     5.7 %   9,908     6.4 %   10,550     7.0 %
                                                     

Operating income

    62,422     8.3 %   29,077     4.0 %   40,653     5.9 %   9,224     5.9 %   6,793     4.5 %

Interest and investment income

   
1,212
   
0.2

%
 
138
   

%
 
714
   
0.1

%
 
75
   

%
 
23
   

%

Interest expense

    (89,326 )   (11.8 )%   (84,609 )   (11.8 )%   (57,707 )   (8.4 )%   (19,580 )   (12.6 )%   (20,146 )   (13.5 )%

Change in fair value of interest rate cap agreements

    (43 )   %   (137 )   %   (3,529 )   (0.5 )%       %       %

Gain on extinguishment of debt

        %       %   334,423     48.6 %       %       %

Other income

    2,132     0.3 %   3,746     0.5 %   3,929     0.6 %       %   865     0.6 %
                                                     

(Loss) income from continuing operations before income taxes

    (23,603 )   (3.1 )%   (51,785 )   (7.2 )%   318,483     46.3 %   (10,281 )   (6.6 )%   (12,465 )   (8.3 )%

Income tax benefit (expense)

    7,528     1.0 %   16,421     2.3 %   (57,107 )   (8.3 )%   (205 )   (0.1 )%   2,799     1.9 %
                                                     

(Loss) income from continuing operations

  $ (16,075 )   (2.1 )% $ (35,364 )   (4.9 )% $ 261,376     38.0 % $ (10,486 )   (6.8 )% $ (9,666 )   (6.5 )%
                                                             

Loss from discontinued Non-Core Entities, net of income tax expense of $(6,748) in 2010

        %       %   (8,270 )   (1.2 )%       %       %

Loss from discontinued clubs, net of income tax benefit (expense) of $2,669, $(152) and $398 in 2012, 2011 and 2010, respectively

    (10,917 )   (1.4 )%   (258 )   %   (443 )   (0.1 )%   (5 )   %   (60 )   %
                                                     

Net (loss) income

    (26,992 )   (3.6 )%   (35,622 )   (5.0 )%   252,663     36.7 %   (10,491 )   (6.8 )%   (9,726 )   (6.5 )%

Net loss attributable to discontinued non-core entities' noncontrolling interests

        %       %   1,966     0.3 %                        

Net income attributable to noncontrolling interests

    (283 )   %   (575 )   (0.1 )%   (346 )   (0.1 )%   41     %   13     %
                                                     

Net (loss) income attributable to ClubCorp Holdings, Inc.

  $ (27,275 )   (3.6 )% $ (36,197 )   (5.0 )% $ 254,283     37.0 % $ (10,450 )   (6.7 )% $ (9,713 )   (6.5 )%
                                                     

59


Table of Contents


Comparison of the Twelve Weeks Ended March 19, 2013 and March 20, 2012

          The following table presents key financial information derived from our consolidated condensed statements of operations for the 12 weeks ended March 19, 2013 and March 20, 2012:

 
  Twelve Weeks Ended    
   
 
 
 
March 19,
2013
 
March 20,
2012
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Total revenues

  $ 155,060   $ 149,706   $ 5,354     3.6 %

Club operating costs and expenses exclusive of depreciation(1)

    118,771     114,703     4,068     3.5 %

Depreciation and amortization

    16,155     18,603     (2,448 )   (13.2 )%

Loss (gain) on disposals of assets

    1,219     (624 )   1,843     295.4 %

Equity in earnings from unconsolidated ventures

    (217 )   (319 )   102     32.0 %

Selling, general and administrative

    9,908     10,550     (642 )   (6.1 )%
                   

Operating income

    9,224     6,793     2,431     35.8 %

Interest and investment income

    75     23     52     226.1 %

Interest expense

    (19,580 )   (20,146 )   (566 )   (2.8 )%

Other income

        865     (865 )   (100.0 )%
                   

Loss from continuing operations before income taxes

    (10,281 )   (12,465 )   2,184     17.5 %

Income tax (expense) benefit

    (205 )   2,799     (3,004 )   (107.3 )%
                   

Loss from continuing operations

  $ (10,486 ) $ (9,666 ) $ (820 )   (8.5 )%
                   

(1)
Comprised of club operating costs, cost of food and beverage sales and provision for doubtful accounts.

          Total revenues of $155.1 million for the 12 weeks ended March 19, 2013 increased $5.4 million, or 3.6%, over the 12 weeks ended March 20, 2012, primarily due to increased golf and country club revenues. Golf and country club revenues increased $4.5 million, or 3.9%, of which $0.8 million is attributable to golf and country clubs added in 2012. The remaining $3.7 million increase is primarily due to increases in membership and food and beverage revenues partially offset by lower golf operation revenues. In addition, business, sports and alumni clubs revenues increased $0.7 million, or 1.9%, largely due to a $0.6 million increase in food and beverage sales, driven by an increase in a la carte check average.

          Club operating costs and expenses of $118.8 million for the 12 weeks ended March 19, 2013 increased $4.1 million, or 3.5%, compared to the 12 weeks ended March 20, 2012, of which $0.8 million is attributable to club properties added in 2012. The remaining $3.3 million increase is largely attributable to an increase in labor and food and beverage cost of goods sold associated with increased revenues.

          Depreciation and amortization decreased $2.4 million, or 13.2%, for the 12 weeks ended March 19, 2013 compared to the 12 weeks ended March 20, 2012 largely due to a decrease in amortization expense related to intangible assets that fully amortized at the end of fiscal 2012.

          Loss on disposal of assets of $1.2 million for the 12 weeks ended March 19, 2013 was primarily comprised of losses on asset retirements during the normal course of business. The gain on disposal of assets of $0.6 million for the 12 weeks ended March 20, 2012 was primarily comprised of $1.5 million of insurance proceeds offset by asset retirements in the normal course of business.

60


Table of Contents

          Selling, general and administrative expenses of $9.9 million for the 12 weeks ended March 19, 2013 decreased $0.6 million, or 6.1%, compared to the 12 weeks ended March 20, 2012, primarily due to a reduction in professional fees.

          Interest expense totaled $19.6 million and $20.1 million for the 12 weeks ended March 19, 2013 and March 20, 2012, respectively. The $0.6 million decrease is due to lower debt levels and the amendment to the credit agreement governing our Secured Credit Facilities in November 2012, which reduced the interest rate on our term loan facility from the higher of (i) 6.0% or (ii) an elected LIBOR plus a margin of 4.5% to the higher of (i) 5.0% or (ii) an elected LIBOR plus a margin of 3.75%.

          Income tax expense of $0.2 million for the 12 weeks ended March 19, 2013 increased $3.0 million, or 107.3%, compared to the $2.8 million benefit for the 12 weeks ended March 20, 2012. The increase was driven primarily by a $2.2 million improvement in pre-tax loss and state taxes. The effective tax rates were (2.0)% and 22.5% for the 12 weeks ended March 19, 2013 and March 20, 2012, respectively. For the 12 weeks ended March 19, 2013 and March 20, 2012, the effective tax rate differed from the statutory federal tax rate of 35.0% primarily due to changes in uncertain tax positions, state and foreign taxes.


Segment Operations

Golf and Country Clubs

          The following tables present key financial information for our golf and country clubs for the 12 weeks ended March 19, 2013 and March 20, 2012:

 
  Twelve Weeks Ended    
   
 
Same Store Golf and Country Clubs
 
March 19,
2013
 
March 20,
2012
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    99     99              

Total revenues

  $ 117,813   $ 114,145   $ 3,668     3.2 %

Segment EBITDA

    31,889     29,442     2,447     8.3 %

Segment EBITDA %

    27.1 %   25.8 %   1.3 %      

 

 
  Twelve Weeks Ended    
   
 
Total Golf and Country Clubs
 
March 19,
2013
 
March 20,
2012
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    102     100              

Total revenues

  $ 118,659   $ 114,178   $ 4,481     3.9 %

Segment EBITDA

    31,970     29,467     2,503     8.5 %

Segment EBITDA %

    26.9 %   25.8 %   1.1 %      

          Total revenues for same store golf and country clubs increased $3.7 million, or 3.2%, for the 12 weeks ended March 19, 2013 compared to the 12 weeks ended March 20, 2012, primarily due to increases in membership and food and beverage revenues partially offset by lower golf operation revenues. Membership revenues increased $3.5 million or 5.7%, largely due to an increase in average dues per membership and upgrade revenues from the O.N.E. offering. Food and beverage revenues increased $0.8 million, or 3.8%, due to an increase in private party revenue from social private party events and an increase in a la carte revenue driven by a 3.2% increase in a la carte

61


Table of Contents

check average. Golf operations revenues decreased $0.7 million, or 3.0%, largely due to unfavorable weather.

          Segment EBITDA for same store golf and country clubs increased $2.4 million, or 8.3%, for the 12 weeks ended March 19, 2013 compared to the 12 weeks ended March 20, 2012 due to increases in higher margin membership revenues. As a result, same store Segment EBITDA margin for the 12 weeks ended March 19, 2013 increased 1.3% over the 12 weeks ended March 20, 2012.

Business, Sports and Alumni Clubs

          The following table presents key financial information for our business, sports and alumni clubs for the 12 weeks ended March 19, 2013 and March 20, 2012:

 
  Twelve Weeks Ended    
   
 
Same Store & Total Business,
Sports and Alumni Clubs
 
March 19,
2013
 
March 20,
2012
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    49     49              

Total revenues

  $ 37,848   $ 37,142   $ 706     1.9 %

Segment EBITDA

    5,708     5,691     17     0.3 %

Segment EBITDA %

    15.1 %   15.3 %   (0.2 )%      

          Total revenues for business, sports and alumni clubs increased $0.7 million, or 1.9%, for the 12 weeks ended March 19, 2013 compared to the 12 weeks ended March 20, 2012 due to increases in food and beverage revenues and membership revenues. Food and beverage revenue increased $0.6 million, or 3.7%, largely due to an increase in a la carte revenue. The remaining membership revenue increase is due primarily to increases in average dues per membership.

          Segment EBITDA for business, sports and alumni clubs for the 12 weeks ended March 19, 2013 was flat compared to the 12 weeks ended March 20, 2012. Segment EBITDA margin declined 0.2% for 12 weeks ended March 19, 2013 compared to the 12 weeks ended March 20, 2012 largely due to the increase in lower margin food and beverage revenues.

Other

          The following table presents financial information for Other, which is comprised primarily of activities not related to our two business segments, for the 12 weeks ended March 19, 2013 and March 20, 2012:

 
  Twelve Weeks Ended    
   
 
Other
 
March 19,
2013
 
March 20,
2012
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

EBITDA

    (9,494 )   (7,980 )   (1,514 )   (19.0 )%

          EBITDA for Other decreased $1.5 million, or 19%, for the 12 weeks ended March 19, 2013 compared to the 12 weeks ended March 20, 2012 due primarily to the expiration of certain mineral lease and surface rights agreements.

62


Table of Contents


Comparison of the Fiscal Years Ended December 25, 2012 and December 27, 2011

          The following table presents key financial information derived from our consolidated statements of operations for the fiscal years ended December 25, 2012 and December 27, 2011:

 
  Fiscal Years Ended    
   
 
 
 
December 25,
2012
 
December 27,
2011
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Total revenues

  $ 754,944   $ 719,962   $ 34,982     4.9 %

Club operating costs and expenses exclusive of depreciation(1)

    555,153     536,183     18,970     3.5 %

Depreciation and amortization

    78,286     93,035     (14,749 )   (15.9 )%

Loss on disposals and acquisitions of assets

    10,904     9,599     1,305     13.6 %

Impairment of assets

    4,783     1,173     3,610     307.8 %

Equity in earnings from unconsolidated ventures

    (1,947 )   (1,487 )   (460 )   (30.9 )%

Selling, general and administrative

    45,343     52,382     (7,039 )   (13.4 )%
                   

Operating income

    62,422     29,077     33,345     114.7 %

Interest and investment income

    1,212     138     1,074     778.3 %

Interest expense

    (89,326 )   (84,609 )   4,717     5.6 %

Change in fair value of interest rate cap agreements

    (43 )   (137 )   94     68.6 %

Other income

    2,132     3,746     (1,614 )   (43.1 )%
                   

(Loss) from continuing operations before income taxes

    (23,603 )   (51,785 )   28,182     54.4 %

Income tax benefit

    7,528     16,421     (8,893 )   (54.2 )%
                   

Loss from continuing operations

  $ (16,075 ) $ (35,364 ) $ 19,289     54.5 %
                   

(1)
Comprised of club operating costs, cost of food and beverage sales and provision for doubtful accounts.

          Total revenues of $754.9 million for the fiscal year ended December 25, 2012 increased $35.0 million, or 4.9%, over the fiscal year ended December 27, 2011, primarily due to increased golf and country club revenues. Golf and country club revenues increased $32.6 million, or 5.9%, of which $12.4 million is attributable to golf and country clubs added in 2011 and 2012. The remaining $20.2 million increase is primarily due to increases in membership, food and beverage and golf operations revenues. In addition, business, sports and alumni clubs revenues increased $3.0 million, or 1.8%, largely due to a $2.8 million increase in food and beverage sales, driven by increased spend in corporate and social private party events.

          Club operating costs and expenses of $555.2 million for the fiscal year ended December 25, 2012 increased $19.0 million, or 3.5%, compared to the fiscal year ended December 27, 2011, of which $10.4 million is attributable to club properties added in 2011 and 2012. The remaining $8.6 million increase is primarily due to increased variable labor and employee costs and an increase in cost of goods sold associated with increased revenues from food and beverage and retail sales.

          Depreciation and amortization decreased $14.7 million, or 15.9%, for the fiscal year ended December 25, 2012 compared to the fiscal year ended December 27, 2011 due to a decrease in

63


Table of Contents

amortization expense related to member relationship intangibles that were fully amortized during the fiscal year ended December 27, 2011 for our business, sports and alumni clubs segment.

          Loss on disposal of assets of $10.9 million for the fiscal year ended December 25, 2012 largely consisted of losses on asset retirements, but was partially offset by insurance proceeds related to Hurricane Irene, a property settlement and eminent domain proceeds of $2.0 million, $1.2 million and $0.3 million, respectively. Loss on disposal of assets of $9.6 million for the fiscal year ended December 27, 2011 primarily consisted of losses on asset retirements.

          Impairment of assets for the fiscal year ended December 25, 2012 of $4.8 million was largely due to the impairment of mineral interests on certain golf properties. Impairment of assets for the fiscal year ended December 27, 2011 of $1.2 million was primarily comprised of liquor license impairments.

          Selling, general and administrative expenses of $45.3 million for the fiscal year ended December 25, 2012 decreased $7.0 million, or 13.4%, compared to the fiscal year ended December 27, 2011. The decrease is primarily due to one-time expenses that occurred during the fiscal year ended December 27, 2011, including a $4.0 million arbitration award arising out of a dispute related to a series of agreements first entered into in 1999 relating to the acquisition and development of a golf course property, $2.1 million of professional fees incurred in connection with Operations becoming a public filer with the SEC and higher legal, professional and other costs incurred in connection with the acquisition of three golf and country clubs in the Long Island area of New York and one property in Seattle, Washington.

          Interest expense totaled $89.3 million and $84.6 million for the fiscal years ended December 25, 2012 and December 27, 2011, respectively. The $4.7 million increase is largely due to the accretion of initiation deposit liabilities. There was minimal fluctuation related to our indebtedness as a significant portion is at a fixed rate and variable interest rates remained consistent for the majority of the year. See "Liquidity and Capital Resources — Debt" for a description of the recent amendment to our term loan facility.

          Other income decreased $1.6 million, or 43.1%, for the fiscal year ended December 25, 2012 compared to the fiscal year ended December 27, 2011, largely due to proceeds from certain mineral lease and surface right agreements that have become fully amortized.

          Income tax benefit of $7.5 million for the fiscal year ended December 25, 2012 decreased $8.9 million, or 54.2%, compared to $16.4 million for the fiscal year ended December 27, 2011. The decrease was driven primarily by a $28.2 million decrease in pre-tax loss. The effective tax rates were 31.9% and 31.7% for the fiscal years ended December 25, 2012 and December 27, 2011, respectively. For the fiscal year ended December 25, 2012, the effective tax rate differed from the statutory federal tax rate of 35.0% primarily due to changes in uncertain tax positions, state and foreign taxes. For the fiscal year ended December 27, 2011, the effective tax rate differed from the statutory federal tax rate of 35.0% primarily due to state taxes.

64


Table of Contents


Segment Operations

Golf and Country Clubs

          The following tables present key financial information for our golf and country clubs for the fiscal years ended December 25, 2012 and December 27, 2011:

 
  Fiscal Years Ended    
   
 
Same Store Golf and Country Clubs
 
December 25,
2012
 
December 27,
2011
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    95     95              

Total revenues

  $ 561,015   $ 540,821   $ 20,194     3.7 %

Segment EBITDA

    162,396     150,291     12,105     8.1 %

Segment EBITDA %

    28.9 %   27.8 %   1.1 %      

 

 
  Fiscal Years Ended    
   
 
Total Golf and Country Clubs
 
December 25,
2012
 
December 27,
2011
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    102     99              

Total revenues

  $ 583,523   $ 550,898   $ 32,625     5.9 %

Segment EBITDA

    166,327     151,554     14,773     9.7 %

Segment EBITDA %

    28.5 %   27.5 %   1.0 %      

          Total revenues for same store golf and country clubs increased $20.2 million, or 3.7%, for the fiscal year ended December 25, 2012 compared to the fiscal year ended December 27, 2011, primarily due to increases in membership, food and beverage and golf operation revenues. Membership revenues increased $10.3 million, or 3.9%, largely due to an increase in average dues per membership and partially due to upgrade revenues from the O.N.E. offering. Food and beverage revenues increased $5.3 million, or 4.5%, due to increases in a la carte volume and private party revenues, driven by the O.N.E. offering and increased spend in social private party events. Golf operations revenues increased $3.2 million, or 2.6%, over the fiscal year ended December 27, 2011, largely due to a 5.9% and 3.2% increase in merchandise sales and cart rental revenues, respectively. The increase in merchandise sales and cart rental revenues was driven by a 2.5% increase in retail revenue per round and 3.0% increase in member golf rounds.

          Segment EBITDA for same store golf and country clubs increased $12.1 million, or 8.1%, for the fiscal year ended December 25, 2012 compared to the fiscal year ended December 27, 2011 due to increases in higher margin membership revenues. As a result, same store Segment EBITDA margin for the fiscal year ended December 25, 2012 increased 1.1% over the fiscal year ended December 27, 2011.

65


Table of Contents

Business, Sports and Alumni Clubs

          The following table presents key financial information for our business, sports and alumni clubs for the fiscal years ended December 25, 2012 and December 27, 2011:

 
  Fiscal Years Ended    
   
 
Same Store & Total Business,
Sports and Alumni Clubs
 
December 25,
2012
 
December 27,
2011
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    49     49              

Total revenues

  $ 174,344   $ 171,328   $ 3,016     1.8 %

Segment EBITDA

    34,373     32,606     1,767     5.4 %

Segment EBITDA %

    19.7 %   19.0 %   0.7 %      

          Total revenues for business, sports and alumni clubs increased $3.0 million, or 1.8%, for the fiscal year ended December 25, 2012 compared to the fiscal year ended December 27, 2011 primarily due to increases in food and beverage revenues of $2.8 million, or 3.4%. The increase was largely driven by a $2.0 million, or 3.7%, improvement in private party revenues.

          Segment EBITDA for business, sports and alumni clubs increased $1.8 million, or 5.4%, for the fiscal year ended December 25, 2012 compared to the fiscal year ended December 27, 2011 partially due to increased revenues but primarily attributable to our continued focus on cost controls and expense management. Segment EBITDA margin of 19.7% for fiscal year ended December 25, 2012 increased 0.7% over 19.0% for the fiscal year ended December 27, 2011.

Other

          The following table presents financial information for Other, which is comprised primarily of activities not related to our two business segments, for the fiscal years ended December 25, 2012 and December 27, 2011:

 
  Fiscal Years Ended    
   
 
Other
 
December 25,
2012
 
December 27,
2011
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

EBITDA

    (35,184 )   (30,058 )   (5,126 )   (17.1 )%

          EBITDA for Other decreased $5.1 million, or 17.1%, for the fiscal year ended December 25, 2012 compared to the fiscal year ended December 27, 2011 due primarily to the expiration of certain mineral lease and surface rights agreements and decreased revenue associated with changes in the allocation of upgrade offerings.

66


Table of Contents


Comparison of the Fiscal Years Ended December 27, 2011 and December 28, 2010

          The following table presents key financial information derived from our consolidated statements of operations for the fiscal years ended December 27, 2011 and December 28, 2010:

 
  Fiscal Years Ended    
   
 
 
 
December 27,
2011
 
December 28,
2010
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Total revenues

  $ 719,962   $ 687,697   $ 32,265     4.7 %

Club operating costs and expenses exclusive of depreciation(1)

    536,183     514,151     22,032     4.3 %

Depreciation and amortization

    93,035     91,700     1,335     1.5 %

Loss (gain) on disposals and acquisitions of assets

    9,599     (5,380 )   14,979     278.4 %

Impairment of assets

    1,173     8,936     (7,763 )   (86.9 )%

Equity in earnings from unconsolidated ventures

    (1,487 )   (1,309 )   178     13.6 %

Selling, general and administrative

    52,382     38,946     13,436     34.5 %
                   

Operating income

    29,077     40,653     (11,576 )   (28.5 )%

Interest and investment income

    138     714     (576 )   (80.7 )%

Interest expense

    (84,609 )   (57,707 )   26,902     46.6 %

Change in fair value of interest rate cap agreements

    (137 )   (3,529 )   3,392     96.1 %

Gain on extinguishment of debt

        334,423     (334,423 )   (100.0 )%

Other income

    3,746     3,929     (183 )   (4.7 )%
                   

(Loss) income from continuing operations before income taxes

    (51,785 )   318,483     (370,268 )   (116.3 )%

Income tax benefit (expense)

    16,421     (57,107 )   73,528     128.8 %
                   

(Loss) income from continuing operations

  $ (35,364 ) $ 261,376   $ (296,740 )   (113.5 )%
                   

(1)
Comprised of club operating costs, cost of food and beverage sales and provision for doubtful accounts.

          Total revenues of $720.0 million increased $32.3 million, or 4.7%, for the fiscal year ended December 27, 2011 compared to the fiscal year ended December 28, 2010 primarily due to an increase in golf and country club revenues. Golf and country club revenues increased $27.5 million, or 5.3%, of which $14.8 million is attributable to golf and country club properties added in 2010 and 2011. The remaining increase of $12.7 million is due to increases in membership, golf operations and food and beverage revenues. Additionally, business, sports and alumni club revenues increased $4.0 million, or 2.4%, of which $1.9 million is attributable to a new alumni club opened in 2010. The remaining $2.1 million is due to an increase in food and beverage revenues driven by corporate and social private party events partially offset by a decrease in membership dues.

          Club operating costs and expenses increased $22.0 million, or 4.3%, for the fiscal year ended December 27, 2011 compared to the fiscal year ended December 28, 2010, of which $15.0 million is attributable to club properties acquired or opened in 2010 and 2011. The remaining $7.0 million increase is primarily due to increases in labor and cost of goods sold associated with increased revenue, variable compensation expense due to improved company performance, operating supplies due to price increases in oil and gas, golf course maintenance utility expenses due to the summer heat and drought conditions in certain portions of the southern United States and

67


Table of Contents

expenses related to member prospecting and retention. These increases were partially offset by a decrease in insurance and risk expenses.

          Depreciation and amortization increased $1.3 million, or 1.5%, for the fiscal year ended December 27, 2011 compared to the fiscal year ended December 28, 2010 due to an increase in depreciation expense of $2.7 million partially offset by a $1.4 million decrease in amortization expense from member relationship intangibles in the business, sports and alumni club segment that have become fully amortized.

          Loss on disposal of assets of $9.6 million for the fiscal year ended December 27, 2011 was comprised primarily of asset retirements. Gains on disposal of assets of $5.4 million for the fiscal year ended December 28, 2010 were comprised primarily of insurance proceeds of $2.5 million, eminent domain proceeds of $2.2 million, bargain purchase gain on the purchase of a country club of $1.2 million, gain on the disposition of certain property owned by one of our foreign subsidiaries in Mexico in exchange for the equity interest of the noncontrolling shareholder of $3.0 million and $0.7 million gain on the leasing of mineral rights offset by a $4.2 million loss from other transactions that were realized in the normal course of business.

          Impairment of assets for the fiscal year ended December 27, 2011 of $1.2 million was primarily comprised of liquor license impairments. Impairment of assets of $8.9 million for the fiscal year ended December 28, 2010 primarily consisted of trade name impairments of $8.6 million.

          Selling, general and administrative expenses increased $13.4 million, or 34.5%, for the fiscal year ended December 27, 2011, due primarily to a $4.0 million arbitration award arising out of a dispute related to a series of agreements first entered into in 1999 relating to the acquisition and development of a golf course property, increased professional fees in connection with Operations becoming a public filer with the SEC and legal, professional and other costs incurred in connection with the acquisition of four new golf and country clubs in 2011. Additionally, there were increased labor costs related to the transition and centralization of club accounting and related functions to a corporate function, which resulted in an increase in selling, general and administrative expenses and offsetting decreases in club labor costs included in club operating costs and expenses.

          Interest expense increased $26.9 million, or 46.6%, for the fiscal year ended December 27, 2011 due to higher interest rates on the Senior Notes issued, and the loans under the Secured Credit Facilities entered into in November 2010, compared to the interest rates applicable to the loans under our prior credit facility partially offset by lower principal amounts.

          Income tax benefit for the fiscal year ended December 27, 2011 increased $73.5 million, or 128.8%, compared to the fiscal year ended December 28, 2010. The increase was driven primarily by a $370.3 million decrease in pre-tax income. The effective tax rates were 31.7% and 17.9% for the fiscal year ended December 27, 2011 and the fiscal year ended December 28, 2010, respectively. For the fiscal year ended December 28, 2010, the effective tax rate differed from the statutory federal tax rate of 35% primarily due to the forgiveness of debt, state taxes and a one-time benefit recognized for foreign income taxes.

68


Table of Contents


Segment Operations

Golf and Country Clubs

          The following tables present key financial information for our golf and country clubs for the fiscal years ended December 27, 2011 and December 28, 2010:

 
  Fiscal Years Ended    
   
 
Same Store Golf and Country Clubs
 
December 27,
2011
 
December 28,
2010
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    94     94              

Total revenues

  $ 533,042   $ 520,349   $ 12,693     2.4 %

Segment EBITDA

    149,107     142,397     6,710     4.7 %

Segment EBITDA %

    28.0 %   27.4 %   0.6 %      

 

 
  Fiscal Years Ended    
   
 
Total Golf and Country Clubs
 
December 27,
2011
 
December 28,
2010
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    99     95              

Total revenues

  $ 550,898   $ 523,360   $ 27,538     5.3 %

Segment EBITDA

    151,554     142,561     8,993     6.3 %

Segment EBITDA %

    27.5 %   27.2 %   0.3 %      

          Total revenues for same store golf and country clubs increased $12.7 million, or 2.4%, for the fiscal year ended December 27, 2011 compared to the fiscal year ended December 28, 2010 due to increases in membership, food and beverage and golf operations revenues. Membership revenues increased $5.2 million, or 2.0%, due to an increase in dues per membership driven in part by the O.N.E. offering, partially offset by a 0.6% decline in average memberships during the period. Food and beverage revenues increased $3.9 million, or 3.5%, due to an increase in a la carte volume, which was also driven by the O.N.E. offering and an increase in private event revenues. Golf operations revenues increased $3.5 million, or 2.9%, largely due to increases in merchandise sales and cart rental revenues. Merchandise sales revenues increased $1.9 million, or 7.8%, compared to the same period in 2010. The increase in cart rental revenues is due to an increase in the average cart rental price and a 1.1% increase in member golf rounds. Revenues were slightly impacted by Hurricane Irene, which affected the East Coast of the United States in August 2011, causing certain clubs' operations to be interrupted for a period of time.

          Segment EBITDA for same store golf and country clubs increased $6.7 million, or 4.7%, for the fiscal year ended December 27, 2011 compared to the fiscal year ended December 28, 2010 primarily due to the increase in revenues, partially offset by increases in variable compensation expense associated with higher revenues, operating supplies due largely to price increases in oil and gas, golf course maintenance utility expenses primarily due to higher water costs resulting from summer heat and drought conditions in certain portions of the southern United States and expenses related to member prospecting and retention. Additionally, in the fiscal year ended December 27, 2011, we received property tax refunds from prior years related to certain clubs for which we disputed the property tax values. Segment EBITDA margin for same store golf and country clubs increased 0.6% from 27.4% for the fiscal year ended December 28, 2010 to 28.0% for the fiscal year ended December 27, 2011. The margin increase was driven by the increase in membership and golf operations revenues, which are higher margin revenue streams and property tax refunds received relating to prior years.

69


Table of Contents

Business, Sports and Alumni Clubs

          The following tables present key financial information for our business, sports and alumni clubs for the fiscal years ended December 27, 2011 and December 28, 2010:

 
  Fiscal Years Ended    
   
 
Same Store Business, Sports and
Alumni Clubs
 
December 27,
2011
 
December 28,
2010
 
Change
 
% Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    48     48              

Total revenues

  $ 167,785   $ 165,659   $ 2,126     1.3 %

Segment EBITDA

    32,438     29,958     2,480     8.3 %

Segment EBITDA %

    19.3 %   18.1 %   1.2 %      

 

 
  Fiscal Years Ended    
   
 
Total Business, Sports and Alumni
Clubs
 
December 27,
2011
 
December 28,
2010
 
Change
 
% Change
 
 
  (dollars in thousands)
 

Number of facilities at end of period in continuing operations

    49     49              

Total revenues

  $ 171,328   $ 167,283   $ 4,045     2.4 %

Segment EBITDA

    32,606     29,572     3,034     10.3 %

Segment EBITDA %

    19.0 %   17.7 %   1.3 %      

          Total revenues for same store business, sports and alumni clubs increased $2.1 million, or 1.3%, for the fiscal year ended December 27, 2011 compared to the fiscal year ended December 28, 2010, primarily due to an increase in food and beverage revenues offset by a decrease in membership dues. Food and beverage revenues increased $2.8 million, or 3.6%, primarily as a result of private party revenues, which increased $2.7 million, or 5.3%, primarily due to an increase in revenues from corporate private party events. Membership dues decreased $0.7 million, or 0.9%, as the 4.6% decline in average memberships for the period was partially offset by higher average monthly dues per membership. Dues discounts associated with member referral programs initiated during the second half of 2009 began expiring during the second half of 2010, and contributed to the increase in average dues per membership. Although memberships declined, we experienced a 3.1% improvement in the rate of decline of memberships in the fiscal year ended December 27, 2011 compared to the fiscal year ended December 28, 2010.

          Segment EBITDA for same store business, sports and alumni clubs increased $2.5 million, or 8.3%, for the fiscal year ended December 27, 2011 compared to the fiscal year ended December 28, 2010. Segment EBITDA margin for same store business, sports and alumni clubs increased 1.2% from 18.1% for the fiscal year ended December 28, 2010 to 19.3% for the fiscal year ended December 27, 2011 due to reductions in operating costs and expenses as well as favorable rent adjustments resulting from the renegotiation of certain leases offset partially by a change in revenue mix. There was an increase in food and beverage revenues, which is typically a lower margin revenue stream, offset by a decrease in dues revenues, which is a higher margin revenue stream.

70


Table of Contents

Other

          The following table presents financial information for Other, which is comprised primarily of activities not related to our two business segments, for the fiscal years ended December 27, 2011 and December 28, 2010:

 
  Fiscal Years Ended    
   
 
Other
 
December 27,
2011
 
December 28,
2010
 
Change
 
%
Change
 
 
  (dollars in thousands)
 

EBITDA

    (30,058 )   (27,643 )   (2,415 )   (8.7 )%

          EBITDA for Other decreased $2.4 million, or 8.7%, the fiscal year ended December 27, 2011 compared to the fiscal year ended December 28, 2010, due primarily to increased corporate overhead expenses attributable to increased labor costs related to the transition and centralization of certain club accounting functions to a corporate function which resulted in corresponding reductions in club operating costs reflected in our two business segments.


Liquidity and Capital Resources

          Our primary goal as it relates to liquidity and capital resources is to attain and retain the right level of debt and cash to maintain and fund expansions, replacement projects and other capital investments at our clubs, be poised for external growth in the marketplace and pay dividends to our stockholders. Historically, we have financed our business through cash flows from operations and debt.

          Over the next 12 months, we anticipate cash flows from operations to be the principal source of cash and believe current assets and cash generated from operations will be sufficient to meet anticipated working capital needs, planned capital expenditures, debt service obligations and payment of a quarterly cash dividend on our common stock of $         per share, or $         per annum, commencing in the                      quarter of         , as permitted by the credit agreement governing the Secured Credit Facilities and the indenture governing the Senior Notes. We plan to use excess cash reserves to expand the business through capital improvement and expansion projects and strategically selected club acquisitions. We may elect to use cash from operations, debt proceeds or a combination thereof to finance future acquisition opportunities.

          A key indicator of our extended financial flexibility is our access to an unused $33.6 million revolving credit facility, which includes a borrowing limit of $50.0 million less outstanding standby letters of credit and swing line loans.

          As of March 19, 2013, our cash and cash equivalents totaled $60.2 million.

Cash Flows from Operating Activities

          Cash flows from operations totaled $23.9 million and $26.7 million for the 12 weeks ended March 19, 2013 and March 20, 2012, respectively. The $2.8 million decrease in operating cash flows is attributable to changes in working capital during the normal course of business.

          Cash flows from operations totaled $96.9 million and $74.6 million for the fiscal years ended December 25, 2012 and December 27, 2011, respectively. The increase is due to the improvement in operations and a $10.0 million reduction in cash paid for income taxes. During the fiscal year ended December 27, 2011, we had one-time payments related to a $4.0 million arbitration award

71


Table of Contents

and $2.9 million in property taxes related to the State of California's Proposition 13 with no such payments in the fiscal year ended December 25, 2012.

          Cash flows from operations decreased $73.7 million to $74.6 million for the fiscal year ended December 27, 2011 compared to $148.3 million for the fiscal year ended December 28, 2010. Interest payments for the fiscal year ended December 27, 2011 were $24.3 million higher than interest payments for the comparable period in 2010 as a result of higher interest rates on the Senior Notes issued and the loans under the Secured Credit Facilities entered into in November 2010 compared to the interest rates applicable to the loans under our prior credit facility. In addition, income tax payments for the fiscal year ended December 27, 2011 were $8.0 million higher than income tax payments in the fiscal year ended December 28, 2010 due to taxable income in 2010 related to the ClubCorp Formation.

Cash Flows used in Investing Activities

          Cash flows used in investing activities totaled $7.1 million and $4.6 million for the 12 weeks ended March 19, 2013 and March 20, 2012, respectively. The increase in cash flows used in investing activities is largely due to the $1.4 million increase in maintenance capital expenditures and $2.0 million of insurance proceeds received during the 12 weeks ended March 20, 2012 related to Hurricane Irene.

          Cash flows used in investing activities totaled $47.3 million and $69.9 million for the fiscal years ended December 25, 2012 and December 27, 2011, respectively. The decrease in cash flows used in investing activities is largely due to the $19.2 million decrease in cash expended for acquisitions. The remaining decrease is due to cash proceeds from dispositions and insurance payouts, partially offset by an increase in maintenance and expansion capital expenditures.

          Cash flows used in investing activities totaled $16.8 million for the fiscal year ended December 28, 2010. During the fiscal year ended December 28, 2010, we spent $42.9 million to improve and expand existing properties and $7.4 million for the acquisition of Country Club of the South. Additionally, we collected $14.0 million on a note receivable from an affiliate of KSL and had $13.6 million in cash released from previously restricted funds. The release of previously restricted funds was largely due to $8.2 million of funds that were escrowed for payment of property taxes and insurance which are no longer required to be escrowed by our debt agreements and $4.4 million of restricted funds released from a Mexican government order in connection with a litigation settlement in 2010.

Cash Flows used in Financing Activities

          Cash flows used in financing activities totaled $38.7 million and $3.7 million for the 12 weeks ended March 19, 2013 and March 20, 2012, respectively. During the 12 weeks ended March 19, 2013, we made a distribution of $35.0 million to the owners of our common stock and scheduled debt repayments of $3.5 million. On March 28, 2013, subsequent to the 12 weeks ended March 19, 2013, we made a required principal prepayment of $11.1 million on our term loan facility based on the excess cash flow requirements of the Secured Credit Facilities.

          Cash flows used in financing activities totaled $18.9 million and $11.9 million for the fiscal years ended December 25, 2012 and December 27, 2011, respectively. During the fiscal year ended December 25, 2012, we made debt repayments of $14.8 million, a $1.9 million increase over the fiscal year ended December 27, 2011.

          Cash flows used in financing activities totaled $74.3 million for the fiscal year ended December 28, 2010. During 2010, we repaid our 2006 debt facility with Citigroup Global Markets Realty Corp., entered into a new credit agreement with Citigroup, including a $310.0 million term

72


Table of Contents

loan facility, and issued $415.0 million in Senior Notes. These transactions resulted in a net cash payment of $298.8 million. In addition, Operations received a contribution from investment vehicles managed by affiliates of KSL of $260.5 million and distributed a net $37.0 million to affiliates of KSL as a part of the ClubCorp Formation.

Capital Spending

          The nature of our business requires us to invest a significant amount of capital to maintain our existing facilities. For the 12 weeks ended March 19, 2013 and March 20, 2012, we spent approximately $4.3 million and $2.2 million, respectively, in capitalized costs to maintain our existing facilities. For the fiscal years ended December 25, 2012, December 27, 2011 and December 28, 2010, we spent approximately $16.7 million, $25.1 million and $24.9 million, respectively, in capitalized costs to maintain our existing facilities. We anticipate spending approximately $19.0 million of capital during the remainder of fiscal year 2013 to maintain our existing facilities.

          In addition to maintaining facilities, we also elect to spend discretionary capital to expand and improve existing facilities and enter into new business opportunities through acquisitions. Capital expansion funding totaled approximately $3.6 million and $4.3 million for the 12 weeks ended March 19, 2013 and March 20, 2012, respectively. Capital expansion funding totaled approximately $41.1 million, $45.6 million and $25.4 million for the fiscal years ended December 25, 2012, December 27, 2011 and December 28, 2010, respectively. We anticipate spending approximately $27.0 million on expansion and improvement projects during the remainder of fiscal year 2013. This amount is subject to change if additional acquisitions or expansion opportunities are identified that fit our strategy to expand the business or as a result of many known and unknown factors, including but not limited to those described in the "Risk Factors" section of this prospectus.

Debt

          2006 Citigroup Debt Facility —  In 2006, an affiliate of CCI ("Borrower") entered into a credit agreement with Citigroup Global Markets Realty Corp. which resulted in a mortgage loan, a senior mezzanine loan, a junior mezzanine loan, and a revolving loan facility (collectively the "2006 Citigroup Debt Facility"), which was initially to mature in January 2010. In July 2008, the Borrower amended the 2006 Citigroup Debt Facility extending the maturity date to July 2012. The loans were collateralized by the majority of our owned golf and country clubs, the two full-service resorts that were sold in connection with the ClubCorp Formation, and the operations of the business, sports and alumni clubs. Payments on the notes were interest only during the term of the loans with principal due at maturity; interest rates were variable based on 30 day LIBOR rates.

          On November 30, 2010, in connection with the ClubCorp Formation, we repaid $826.9 million in principal on the long term debt facility and $105.3 million on the revolving loan facility and Citigroup forgave the remaining $342.3 million of debt under the 2006 Citigroup Debt Facility thereby terminating such facility. The resulting gain of $342.3 million was recorded in gain on extinguishment of debt in the consolidated statements of operations. We expensed the remaining $4.8 million of loan origination fees related to the 2006 Citigroup Debt Facility and the $3.1 million in fees paid related to the 2010 Secured Credit Facilities against the gain on extinguishment of debt.

          2010 Secured Credit Facility —  On November 30, 2010, Parent, Operations and the restricted subsidiaries of Parent entered into secured credit facilities (the "Secured Credit Facilities"). These facilities are comprised of (i) a $310.0 million term loan facility and (ii) a revolving credit facility with a maximum borrowing limit of $50.0 million, which includes letter of credit and swing line facilities. The term loan facility matures November 30, 2016 and the revolving credit facility matures on November 30, 2015. As of March 19, 2013, we had $16.4 million of standby letters of credit outstanding and $33.6 million remaining available for borrowing under the revolving credit facility governing the Secured Credit Facilities.

73


Table of Contents

          All obligations under the Secured Credit Facilities are guaranteed by Parent and each existing and all subsequently acquired or organized direct and indirect restricted subsidiaries of Parent, other than certain excluded subsidiaries (collectively, the "guarantors"). The Secured Credit Facilities are secured, subject to permitted liens and other exceptions, by a first-priority perfected security interest in substantially all the assets of Operations and the guarantors, including, but not limited to (1) a perfected pledge of all the domestic capital stock owned by Operations and the guarantors and (2) perfected security interests in and mortgages on substantially all tangible and intangible personal property and material fee-owned property of Operations and the guarantors, subject to certain exclusions.

          Operations is required to make principal payments equal to 0.25% of the $310.0 million original principal under the term loan facility on the last business day of each of March, June, September and December beginning in March 2011. Beginning with the fiscal year ended December 27, 2011, Operations is required to prepay the outstanding term loan, subject to certain exceptions, by an amount equal to 50% of Operations' excess cash flows, as defined by the Secured Credit Facilities, each fiscal year end after our annual consolidated financial statements are delivered. This percentage may decrease if certain leverage ratios are achieved. Additionally, Operations is required to prepay the term loan facility with proceeds from certain asset sales, borrowings and certain insurance claims as defined in the credit agreement. Operations may voluntarily repay outstanding loans under the Secured Credit Facilities in whole or in part upon prior notice without premium or penalty, other than certain fees incurred in connection with a repricing transaction.

          On November 16, 2012, Operations entered into an amendment to the term loan facility, which reduced the interest rate to the higher of (i) 5.0% or (ii) an elected LIBOR plus a margin of 3.75%.

          Operations is also required to pay a commitment fee on all undrawn amounts under the revolving credit facility and a fee on all outstanding letters of credit, payable quarterly in arrears.

          The credit agreement governing the Secured Credit Facilities limits Parent's, Operations' and Operations' restricted subsidiaries' ability to:

    create, incur, assume or suffer to exist any liens on any of their assets;

    make or hold any investments;

    create, incur, assume or suffer to exist, or guarantee any additional indebtedness;

    enter into mergers or consolidations;

    conduct sales and other dispositions of property or assets;

    pay dividends or distributions on capital stock or redeem or repurchase capital stock;

    change the nature of the business;

    enter into transactions with affiliates; and

    enter into burdensome agreements.

          The credit agreement governing the Secured Credit Facilities contains certain financial and non-financial covenants. The financial covenants require Parent and Operations and the restricted

74


Table of Contents

subsidiaries to maintain specified financial ratios on a rolling four quarter basis as shown in the following table:

 
 
2012
 
2013
 
2014
 
2015
 
2016 and
Thereafter
 

Financial ratios:

                               

Total adjusted debt to Adjusted EBITDA ("Total Leverage Ratio")

                               

Less than:

    6.15x     5.35x     4.75x     4.50x     4.00x  

Adjusted EBITDA to total adjusted interest expense ("Interest Coverage Ratio")

                               

Greater than:

    1.95x     2.15x     2.30x     2.50x     2.75x  

          As of March 19, 2013, Operations was in compliance with all covenant restrictions under the Secured Credit Facilities. The following table shows the financial ratios as of March 13, 2013 for continuing operations:

 
  Fiscal Year Ended
December 25, 2012
 
Four Quarters Ended
March 19, 2013
 
 
  (dollars in thousands)
 

Adjusted EBITDA(1)

  $ 166,189   $ 169,742  

Total adjusted debt(2)

  $ 763,608   $ 761,907  

Total adjusted interest expense(3)

  $ 63,892   $ 63,250  

Financial ratios:

             

Total Leverage Ratio

    4.59x     4.49x  

Interest Coverage Ratio

    2.60x     2.68x  

(1)
See "— Basis of Presentation" for definition of EBITDA and Adjusted EBITDA and the reconciliation of net (loss) income to EBITDA and Adjusted EBITDA.

(2)
The reconciliation of long-term debt to adjusted debt is as follows:

 
  As of
December 25, 2012
 
As of
March 19, 2013
 
 
  (in thousands)
 

Long-term debt (net of current portion)

  $ 768,369   $ 767,498  

Current maturities of long-term debt

    24,988     24,171  

Outstanding letters of credit(a)

    16,350     16,350  

Uncollateralized surety bonds(b)

    738     725  

Adjustment per credit agreement(c)

    (35,000 )   (35,000 )

Debt excluded from credit agreement

    (11,837 )   (11,837 )
           

Total adjusted debt

  $ 763,608   $ 761,907  
           

(a)
Represents total outstanding letters of credit.

(b)
Represents surety bonds not collateralized by letters of credit.

(c)
Represents adjustment per the Secured Credit Facilities. Long-term debt is reduced by the lesser of (i) $35.0 million or (ii) total unrestricted cash and cash equivalents.

75


Table of Contents

(3)
The reconciliation of interest expense to adjusted interest expense is as follows:

 
 
Fiscal Year Ended
December 25, 2012
 
Twelve Weeks Ended
March 19, 2013
  Four Quarters Ended
March 19, 2013
 
 
  (in thousands)
 

Interest expense

  $ 89,326   $ 19,580   $ 88,760  

Less: Interest expense related to initiation deposit liabilities(a)

    (22,358 )   (4,621 )   (22,406 )

Less: Loan origination fee amortization(b)

    (2,033 )   (522 )   (2,098 )

Less: Revolver commitment fees(c)

    (176 )   (59 )   (176 )

Add: Capitalized interest(d)

    233     41     235  

Add: Interest income

    (37 )   (12 )   (46 )

Less: Interest expense excluded from credit agreement

    (1,063 )   (245 )   (1,019 )
               

Total adjusted interest expense

  $ 63,892   $ 14,162   $ 63,250  
               

(a)
Represents amortization of discount on initiation deposit liabilities.

(b)
Represents amortization of loan origination fees on long-term debt.

(c)
Represents commitment fees on the revolving credit facility.

(d)
Represents capitalized interest.

          Senior Notes  —   On November 30, 2010, Operations issued $415.0 million in Senior Notes, bearing interest at 10.0% and maturing December 1, 2018. The interest is payable semiannually in arrears on June 1 and December 1 each year, beginning June 1, 2011. These notes are fully and unconditionally guaranteed by each existing and all subsequently acquired or organized direct and indirect restricted subsidiaries of Operations, other than certain excluded subsidiaries. The indenture governing the Senior Notes limits Parent's and Operations' ability and the ability of Operations' restricted subsidiaries to:

    incur, assume or guarantee additional indebtedness;

    pay dividends or distributions on capital stock or redeem or repurchase capital stock;

    make investments;

    enter into agreements that restrict the payment of dividends or other amounts by subsidiaries to us;

    sell stock of our subsidiaries;

    transfer or sell assets;

    create liens;

    enter into transactions with affiliates; and

    enter into mergers or consolidations.

          Subject to certain exceptions, the indenture governing the Senior Notes permits Parent, Operations and our restricted subsidiaries to incur additional indebtedness, including secured indebtedness.

          General Electric Capital Corporation  —   In July 2008, a subsidiary of ours entered into a secured mortgage loan with General Electric Capital Corporation ("GECC") for $32.0 million with an original maturity of July 2011. During the fiscal year ended December 27, 2011, the subsidiary extended the term of the loan to July 2012. Effective August 1, 2012, under the First Amendment to the loan agreement with GECC, the maturity extended to November 2015 with two additional 12

76


Table of Contents

month options to extend through November 2017 upon satisfaction of certain conditions. As of December 25, 2012, we expect to meet the required conditions and currently intend to extend the loan with GECC to November 2017. The loan is collateralized by the assets of two golf and country clubs. As part of the August 1, 2012 amendment, the interest rate was changed from 3.25% plus 30 day LIBOR to 5% plus the greater of three month LIBOR or 1%.

          Atlantic Capital Bank  —   In October 2010, a subsidiary of ours entered into a new mortgage loan with Atlantic Capital Bank for $4.0 million of debt maturing in 2015 with 25-year amortization. The loan is collateralized by the assets of one golf and country club and the loan provides for variable interest rates based on 30 day LIBOR.

          As of March 19, 2013, other debt and capital leases totaled $38.4 million.

Off-Balance Sheet Arrangements, Contractual Obligations and Commercial Commitments

          We are not aware of any off-balance sheet arrangements as of December 25, 2012. The following tables summarize our total contractual obligations and other commercial commitments and their respective payment or commitment expiration dates by year as of December 25, 2012:


Contractual Obligations