This document summarizes the projected financial performance and valuation of the Eden Grove Resort & Spa Hotel from 2011-2021. Key highlights include: - Occupancy rates increase from 68% in 2011 to 85% in 2021 while average daily room rates rise from $450 to $550 over the same period. - Total revenues grow from $19.2 million in 2011 to $29.5 million in 2021 as occupancy and room rates increase. - Net income increases from $14.8 million in 2011 to $22.5 million in 2021 after accounting for operating expenses and fixed charges. - Using a discounted cash flow analysis with a 13.25% discount rate, the projected total value of

1. 1/4/2009 9:27
Eden Grove Resort & Spa Hotel Don D'Anthony
FY Exit Year
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Occupancy % 68% 74% 75% 78% 82% 85% 81% 82% 84% 83% 85%
ADR $450 $460 $470 $475 $480 $485 $488 $490 $500 $510 $550
REVENUES
Rooms $16,753,500 $18,636,900 $19,299,375 $19,299,375 $21,549,600 $22,570,687 $21,641,580 $21,998,550 $22,995,000 $23,175,675 $25,595,625
Food 2,120,000 2,300,000 2,450,000 2,640,000 2,780,000 2,745,600 2,689,000 2,485,780 2,809,000 2,908,460 3,284,600
Beverage 182,000 198,200 243,000 292,000 302,100 320,000 327,000 341,000 355,000 360,000 368,000
Telephone 92,100 110,900 121,600 127,700 134,700 138,800 142,900 147,200 151,600 156,200 160,900
Minor Operated Department 47,600 56,200 61,100 64,000 67,400 69,400 71,500 73,600 75,800 78,100 80,400
Total Revenues $19,195,200 $21,302,200 $22,175,075 $22,423,075 $24,833,800 $25,844,487 $24,871,980 $25,046,130 $26,386,400 $26,678,435 $29,489,525
DEPARTMENTAL EXPENSES
Rooms $1,003,000 $1,139,000 $1,221,800 $1,274,700 $1,333,800 $1,373,900 $1,415,100 $1,457,500 $1,501,300 $1,546,300 $1,592,700
Food & Beverage 705,000 789,000 1,172,000 1,220,000 1,273,300 1,311,500 1,350,800 1,391,300 1,433,100 1,476,100 1,520,400
Telephone 81,000 92,000 98,700 103,000 107,700 111,000 114,300 117,700 121,300 124,900 128,600
Minor Operated Department 28,900 35,600 39,300 41,400 43,800 45,100 46,500 47,800 49,300 50,800 52,300
Total Departmental Expenses $1,817,900 $2,055,600 $2,531,800 $2,639,100 $2,758,600 $2,841,500 $2,926,700 $3,014,300 $3,105,000 $3,198,100 $3,294,000
TOTAL DEPARTMENTAL INCOME $17,377,300 $19,246,600 $19,643,275 $19,783,975 $22,075,200 $23,002,987 $21,945,280 $22,031,830 $23,281,400 $23,480,335 $26,195,525
UNDISTRIBUTED OPERATING EXPENSES
Administrative & General $336,900 $370,000 $389,000 $410,000 $438,000 $449,000 $514,600 $530,000 $545,900 $562,300 $579,200
Marketing 285,000 290,000 364,000 375,700 388,000 399,600 411,600 424,000 436,700 449,800 463,300
Base Management Fee 135,000 154,400 174,400 183,600 194,000 199,800 205,600 212,300 218,200 225,000 231,800
Franchise Fees 177,651 194,000 207,528 225,129 233,497 246,861 266,982 268,554 272,220 276,015 287,259
Energy 240,000 251,000 265,000 274,000 282,000 284,000 308,000 325,000 339,000 346,000 358,000
Property Operation & Maintenance 244,000 316,700 330,500 338,400 342,580 348,000 353,200 359,000 365,000 368,000 372,000
Total Undistributed Operating Expenses $1,418,551 $1,576,100 $1,730,428 $1,806,829 $1,878,077 $1,927,261 $2,059,982 $2,118,854 $2,177,020 $2,227,115 $2,291,559
INCOME BEFORE FIXED CHARGES $15,958,749 $17,670,500 $17,912,847 $17,977,146 $20,197,123 $21,075,726 $19,885,298 $19,912,976 $21,104,380 $21,253,220 $23,903,966
FIXED CHARGES
Property Taxes $151,200 $155,700 $160,400 $165,200 $170,200 $175,300 $180,500 $186,000 $191,500 $197,300 $203,200
Insurance on Building & Contents 133,100 137,000 141,200 145,400 149,800 154,200 158,900 163,600 168,600 173,600 178,800
Equipment Rent 24,200 24,900 25,700 26,400 27,200 28,000 28,900 29,800 30,600 31,600 32,500
Total Fixed Charges $308,500 $317,600 $327,300 $337,000 $347,200 $357,500 $368,300 $379,400 $390,700 $402,500 $414,500
PROFIT BEFORE RESERVE/ DEBT $15,650,249 $17,352,900 $17,585,547 $17,640,146 $19,849,923 $20,718,226 $19,516,998 $19,533,576 $20,713,680 $20,850,720 $23,489,466
Reserve for Replacement of FF&E (1) $236,868 $258,522 $276,704 $300,172 $311,329 $329,148 $355,976 $358,072 $362,960 $368,020 $383,012
<mortgage debt 600,000 600000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000
Total Reserves $836,868 $858,522 $876,704 $900,172 $911,329 $929,148 $955,976 $958,072 $962,960 $968,020 $983,012
NET INCOME
Cash Flow From Operations $14,813,381 $16,494,378 $16,708,843 $16,739,974 $18,938,594 $19,789,078 $18,561,022 $18,575,504 $19,750,720 $19,882,700 $22,506,454
Exit Value (3) & (4) $203,081,492
Total Cash Flow $14,813,381 $16,494,378 $16,708,843 $16,739,974 $18,938,594 $19,789,078 $18,561,022 $18,575,504 $19,750,720 $222,964,192 ---
Value as of June 1, 2004
Discount Rate 13.25% 13.25% 13.25% 13.25% 13.25% 13.25% 13.25% 13.25% 13.25% 13.25% ---
Discount Factor (5) 0.8830 0.7797 0.6885 0.6079 0.5368 0.4740 0.4185 0.3696 0.3263 0.2881 ---
Present Value $13,080,200 $12,860,500 $11,503,500 $10,176,600 $10,166,200 $9,379,900 $7,768,500 $6,864,900 $6,445,200 $64,247,000 ---
Notes:
(1) Reserve for replacement of FF&E equals 4.0 percent of total sales. TOTAL VALUE INDICATION: $152,492,500

2. (2) No additional Capital Expenditures were estimated. TOTAL VALUE INDICATION (rounded): $152,500,000
(3) Cash Flow from Operations in exit year was capitalized at 10.75 percent. TOTAL PER GUEST ROOM: $657,328
(4) A sales commission of 3.0 percent was assumed.
(5) Analysis uses end-point discounting.
assumes $2 million is spent