2023 Annual Report

NOVEMBER 2023

A PLATINUM CLUB OF AMERICA

WYNDEMERE Country Club

2023 Annual Report

700 WYNDEMERE WAY NAPLES, FL 34105 • (239) 263-1700 • WYNDEMERE.COM

PRESIDENT'S REPORT Dear Wyndemere Members: It is hard for me to believe that I have completed one year as President of Wyndemere. It was certainly an eventful and successful year. As I promised, when I took office, I tried to be accessible, transparent and to listen to all points of view.

Based upon the “sidewalk discussions” and emails that I received, I think that all that happened.

After Covid, we re-instituted the monthly “Coffee with the President and CEO”. These were always well attended and resulted in very good conversations regarding a number of issues at Wyndemere Board Objectives The Board set 15 Objectives for the 2023 year and checked in on them at each board meeting. I will not list them all here, but they included such topics as: o o o o o o

Producing a new 5 year Strategic Plan Reviewing the ICAs for market compatibility Institutionalizing our terrific educational programs Ensuring Communication with members Committee Recruitment Closely monitor operating and capital cash reserves

In addition to these, the board added two more objectives during the year. One was to develop a closer working relationship with WHOA. This is well under way and already showing results.

The second very important addition (that was not predicted) was the recruitment of a new CEO. It is said that the most important job a board performs is to recruit and hire a CEO. With the assistance of a terrific Search Committee that spent hundreds of hours of work, we did recruit a new CEO. And we are all very pleased to welcome Ron Parris as our new CEO. Operations o Last year, we implemented several new procedures/rules/bylaws to deal with the difficulty of securing tee times. Based upon the results of the year, these all seemed to have been successful. o We will end our year in a very good financial position. Please see the treasurer’s report for more detail o Our ICA appears to very market compatible. o For all our activities as well as Food & Beverage, we delivered record usage.

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2023 Annual Report

PRESIDENT'S REPORT 2023-2024 Season As you already know, we have many activities and events planned for this season. One of the real assets of Wyndemere is the ability of members to participate in lots of events, a few events, or no events. And, no matter what your choice, you are still a community member who is welcome and can enjoy our great community.

In terms of continuous improvement, we will be presenting a proposal for new offerings and improvements in our Activities Center, Golf Learning Center, and Driving Range. The Board, the Construction Committee, the Facilities Master Planning Committee, and the Golf Course Master Planning Committee are all very excited about these and look forward to your feedback.

Wyndemere continues to be amongst the best and most sought-after clubs in SW Florida. Our commitment to member service, to continuous improvement and promotion of our “culture” helps us lead the way to maintaining our status as a Platinum Club of America.

I encourage you to attend the Annual Meeting where we will present more detail on many of these areas.

I appreciate your confidence and support as we enter our 2023 – 2024 season.

Gary Lapidas Club President

Wyndemere Country Club • wyndemere.com

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EXECUTIVE'S REPORT 2023 Fiscal Year Operating Report The 2023 fiscal year represented the first in three years of normal operating conditions. A year without construction or a global pandemic. Instead, it was one with a full twelve months of the expanded facilities and record Member activity across all areas. The Club successfully achieved the fiscal year budgeted goals with an operating profit of $377 thousand on a zero-based budget. The trend of strong revenues and a highly competitive labor market continued from the prior year.

Operating Revenues Total operating revenues of $14.5 million ended above the budgeted goal of $14.2 million by $283 thousand.

Annual membership dues contributed $8.5 million, even to the budget. $5.96 million of activity revenues were recorded against a budget of $5.7 million, an improvement of $283 thousand and setting a record high for activity levels. Golf operations accounted for $120 thousand of the improvement, ending 5% above planned revenues. Annual member round activity fell 2% from the 2022 Financial Year, while guest activity increased by 5% from the prior year, netting a $63 thousand improvement in budgeted round revenue, with just under 49,650 rounds. At $545 thousand, the Club recognized its third record breaking golf merchandise sales year in a row, 8% above the prior year, representing the bulk of the remaining improvement. Food and Beverage revenues ended $34 thousand or 1% above plan and $266 thousand or 11% above prior year. The above average monthly growth year over year stemming from the Tiebreaker’s opening continued through January, followed by a plateau to the record activity of the 22FY. Racquet Sports’ sales of $136 thousand continued its five-year growth trend and exceeded budget by $18k or 15% and the prior year by approximately $28 thousand or 26%. Total Fitness and Wellness revenues of $587 thousand ended $84 thousand or 16% above plan and $264 thousand or 82% above prior year.

The success of Phase 1 of the Facilities Master Plan is best depicted with a comparison of the 23FY’s Food & Beverage and Wellness activities compared to the last normal year, which was 2019. Item sales were up across the board, with total revenues between the two areas up $808 thousand or 34%.

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2023 Annual Report

EXECUTIVE'S REPORT Operating Expenses Total departmental expenses of $14.1 million were $94 thousand under budget, including $86 thousand of hurricane Ian expense and a $521 thousand Employee Retention Tax Credit from the US Government. The tax credit stemmed from the Club’s retention of employees during the 2020 Covid pandemic. Cost of sales ended $118 thousand over plan, a combined result of strong golf and racquet shop merchandise sales and Wellness service activity. A $217 thousand increase in payroll was related to increased Food and Beverage labor and increased wage rates for staff retention and acquisition. Other expense variances totaling $5 thousand included heightened entertainment and recruitment costs partially offset by the reversal of the prior year’s electricity expense accrual.

2023 Fiscal Year Summary Overall, the net operating profit result was $377 thousand on a zero-based budget for the 2023 fiscal year.

Excellent weather, record Member activity levels throughout the operating departments and the Club’s dedication to its staff retention in 2020 contributed to the success of 2023. Planning and preparations have been completed for the 2024 season and the team at Wyndemere, led by our new CEO Ron Parris, is confident in achieving the goals of providing exceptional Member services and amenities on a consistent basis. Thank you to the entire Membership for all of your support. We look forward to serving you in the future! To the employees, thank you for your trust and commitment to ensuring our mission of providing exceptional services and amenities for all Members and guests at Wyndemere.

Membership Activities The 23FY recognized below average Membership sales due to the combination of minimal inventory and heightened mortgage rates. For the fiscal year, the Club realized $2.5 million of net Initial Capital Assessments and welcomed 23 new Memberships. Home sales totaled 26 which included retaining 4 current Wyndemere members doing the “Wyndemere shuffle” by purchasing another home or a first home within the Club. Of the 22 sales to new members, 19 (86%) joined as limited golf Members and 3 (14%) as sports Members. The Club also welcomed 1 new Non-Resident Sports Member during the year. In 2023, the Club met its 535 resident and NR golfer goal, allowing eight Members to move from the full golf waiting list to the full golf status, with the possibility of the remainder transitioning during the 24FY.

Wyndemere Country Club • wyndemere.com

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EXECUTIVE'S REPORT 2024 Strategic Initiatives This fiscal year will continue the planning of the Facility Master Plan’s second phase that started earlier in 2023, specifically the Activities Center, Golf Learning Center and Driving Range. The current plans for both the Golf Learning Center and Driving Range have been shared during the project progress showcase on October 30th and for the Activities Center on November 6th.

Like the completion of Phase 1, the planning process has been driven by the desires of the Membership. In addition, current Club trends from across the country and the needs of prospective Members of the future were evaluated/incorporated.

Jonathan Beers Chief Financial Officer

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2023 Annual Report

TREASURER'S REPORT For the fiscal year ending August 31, 2023, Wyndemere continued its strong financial performance. While the Club used a zerobased budget, it achieved an operating profit of $376,792. This reflects the strong fiscal discipline of management, along with the recovery of some prior year expenses through the US Government’s Employee Retention Tax Credit Program. The 2023FY was the 15th consecutive year of operational improvements to budget.

Wyndemere’s capital position increased for the eighth consecutive year as shown in the following graph. Wyndemere’s competitive position in the Naples market is evidenced by its ability to attract new members. During fiscal 2023, the Club attracted 23 new memberships that accounted for $2.5 million of initial capital assessment fees, net of redemptions. Overall, the Club’s capital position increased by 8.3 % to $35.1 million. Since 2009 the capital balance has increased at a, inflation adjusted compounded annual growth rate of just 2.45%, with the growth increasing to 6.64% over the last five years.

During Fiscal Year 2023, the Club began to repay the FMP 2020 loan, making a total of $2.88m in payments and leaving an ending loan balance of $14.12m. Wyndemere continues to maintain a strong cash position with a total cash and investment balance on August 31, 2023, of $9.99 million. The balance consists of $586 thousand of operating cash and $9.12 million of capital cash, after the effects of interfund transfers. The Club has fully reserved funds for non-resident refundable equity in the amount of $413,000. In addition, the Club maintains a capital emergency fund reserve in the amount of $500,000 and an operating reserve in the amount of $250,000. During the 2023FY, $86k of the operational emergency reserve was utilized to cover Hurricane Ian costs, however, per Club policy the fund will be replenished at the start of the 2024FY. With the success of Phase One of the Facilities Master Plan, which includes the Tiebreaker and Wellness Center buildings, the Club is now over six months into the planning of the second phase of the Facilities Master Plan. These include the Activities Center, Golf Learning Center, and Golf Driving Range. The estimated costs of the projects will equate to approximately $10.25m, to be funded through new Member Initial Capital Assessments. Based on the Club’s conservative projection of 27 annual ICA transactions, 23% less than the five-year pre-pandemic average of 35, the projects can be successfully completed by November 2024.

Our Club is in a very strong position for capital cash and capital formation.

Wyndemere Country Club • wyndemere.com

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TREASURER'S REPORT In addition to assessing and overseeing financial performance, the Audit and Finance Committee monitors risk matters of the Club. In that regard a review of Insurance coverage and general risk mitigation was performed by the committee working with club management. The Insurance review, assisted by the Clubs agent, evaluated coverage of General, Management, Pollution, Auto, Accident and Health liabilities and Umbrella Coverage. All Insurance Underwriters are “Top Tier” companies, and our coverage is considered adequate. In the preceding year a 360 degree risk assessment matrix was completed by Phil Cahill, Karen Osar and Jonathan Beers that will be reviewed annually by the committee.

Following are reprints from the annual audit report by RSM, the Club’s auditing firm. Included are the Independent Auditor’s Report, Statement of Financial Position and Statement of Activities. Copies of the full report are available upon request from the Administrative Office.

Peter Sacks Club Treasurer

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2023 Annual Report

Wyndemere Country Club, Inc. Financial Report August 31, 2023

Independent Auditor’s Report Board of Directors Wyndemere Country Club, Inc. Opinion We have audited the financial statements of Wyndemere Country Club, Inc. (the Club), which comprise the statements of financial position as of August 31, 2023 and 2022, the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Club as of August 31, 2023 and 2022, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Club and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Club’s ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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In performing an audit in accordance with GAAS, we: Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Club’s internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Club’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings and certain internal control-related matters that we identified during the audit.

Naples, Florida October 19, 2023

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Wyndemere Country Club, Inc. Statements of Financial Position August 31, 2023 and 2022 2023

2022

Assets Current assets (Note 2): Cash and cash equivalents Investments (Note 12) Less board-designated funds (Note 3)

$

Board-designated funds, investments—current portion (Notes 3 and 12) Accounts receivable (Note 16) Inventories Prepaid expenses and other assets Total current assets Board-designated funds—long-term portion (Note 3) Cash and cash equivalents Investments (Note 12)

Interest rate swap agreement (Note 6) Property and equipment, less accumulated depreciation (Note 4) Right-of-use assets for operating leases, net (Note 13)

4,040,901 5,663,608 9,359,432 345,077

$

5,558,604 249,303 5,123,076 684,831

5,380,391 1,318,380 419,815 461,796 7,925,459

249,303 785,234 352,574 383,373 2,455,315

3,695,824 283,217 3,979,041

4,873,773 4,873,773

1,695,298 38,127,426 77,056

1,327,854 40,268,621 -

$

51,804,280

$

48,925,563

$

1,500,000 63,944 571,640 1,391,135 100,204 3,626,923

$

237,259 635,288 1,007,977 1,233,204 93,061 3,206,789

Liabilities and Net Assets Current liabilities: Current maturities of capital lease obligations (Note 13) Current maturities of notes payable (Note 5) Current maturities of operating lease obligations (Note 13) Accounts payable Accrued expenses (Note 7) Dues and fees paid in advance Total current liabilities Operating lease obligations, less current maturities (Note 13) Notes payable, net of current maturities (Note 5) Refundable nonresident memberships (Note 9) Total liabilities

13,112 12,625,000 413,000 16,678,035

12,864,712 417,750 16,489,251

9,359,432 25,766,813 35,126,245

5,123,076 27,313,236 32,436,312

Contingency (Note 10) Net assets (Notes 8 and 9): Board-designated Undesignated

$

See notes to financial statements.

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51,804,280

$

48,925,563

Wyndemere Country Club, Inc. Statements of Activities Years Ended August 31, 2023 and 2022 2022

2023 Changes in net assets: Revenues: General: Membership dues Other revenues Interest income Program: Food and beverage: Food sales Beverage sales Sports and recreation: Cart fees Guest greens fees Golf shop merchandise sales Other golf income Racquet sports Fitness, net of commissions 2023—$363,371; 2022—$231,218 Expenses (Note 14): Program: Food and beverage Sports and recreation: Golf course operations Golf operations Locker rooms Racquet sports Fitness Support: Administration and general Facilities management Insurance Property taxes Deficiency of revenues over expenses before depreciation and amortization, other revenues (expenses) and other changes in net assets, forward (Continued)

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$

8,522,808 325,077 24,615

$

7,390,338 292,732 40,438

1,922,475 664,748

1,631,017 631,636

1,247,366 506,296 557,359 3,575 126,005 216,095 14,116,419

1,171,613 426,951 528,736 6,270 96,303 88,714 12,304,748

4,123,901

3,591,947

3,065,393 1,496,682 183,706 453,047 414,133

2,751,502 1,378,649 160,208 378,922 275,856

2,608,251 1,102,865 437,977 288,490 14,174,445

2,302,513 1,039,690 303,063 214,612 12,396,962

(58,026)

(92,214)

Wyndemere Country Club, Inc. Statements of Activities (Continued) Years Ended August 31, 2023 and 2022 2022

2023 Deficiency of revenues over expenses before depreciation and amortization, other revenues (expenses) and other changes in net assets, forwarded

$

Depreciation and amortization (Notes 4 and 13) Deficiency of revenues over expenses before other revenues (expenses) and other changes in net assets Other revenues (expenses): Interest income on board-designated funds Gain on interest rate swap agreements (Note 6) Unrealized gain on investments—capital Realized gain on investments—capital Employee retention tax credit (Note 16) Other expenses Interest expense, net of amount capitalized 2023—$0; 2022—$72,894 Loss on disposition of property and equipment (Note 4) Hurricane expenses (Note 15) Deficiency of revenues over expenses before other changes in net assets Other changes in net assets: WCC 2020 project assessment, net (Notes 5 and 8) Capital improvement contributions (Note 11) Issuance of memberships Redemptions of memberships

Increase in net assets Net assets: Beginning Ending

$

See notes to financial statements.

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(58,026)

$

(92,214)

3,369,099

3,022,890

(3,427,125)

(3,115,104)

107,405 367,444 43,445 84,765 521,263 (1,723) (535,696) (9,549) (86,446) 490,908

11,164 1,351,131 (154,522) (232,025) (371,020) 604,728

(2,936,217)

(2,510,376)

1,413,236 1,733,164 2,877,000 (397,250) 5,626,150

1,446,500 1,789,372 3,807,000 (687,050) 6,355,822

2,689,933

3,845,446

32,436,312

28,590,866

35,126,245

$

32,436,312

Wyndemere Country Club, Inc. Statements of Cash Flow Years Ended August 31, 2023 and 2022 2022

2023 Cash flows from operating activities: Increase in net assets $ Adjustments to reconcile increase in net assets to net cash and cash equivalents used in operating activities: Depreciation and amortization Loss on disposition of property and equipment Gain on interest rate swap agreement Unrealized gain on investments—operating and capital Other changes in net assets Changes in assets and liabilities: Increase in: Accounts receivable Inventories Prepaid expenses and other assets Increase (decrease) in: Accounts payable Accrued expenses Dues and fees paid in advance Net cash and cash equivalents used in operating activities Cash flows from investing activities: Disbursements for property and equipment Proceeds from disposition of property and equipment Purchases of investments Proceeds from sale of investments Net cash and cash equivalents used in investing activities

2,689,933

$

3,845,446

3,369,099 9,549 (367,444) (44,586) (5,626,150)

3,022,890 371,020 (1,351,131) (6,355,822)

(533,146) (67,241) (78,423)

(162,979) (122,111) (78,654)

(181,597) 157,931 7,143 (664,932)

265,184 3,861 8,686 (553,610)

(1,494,384) 1,550 (18,745,813) 13,376,094 (6,862,553)

(16,361,131) 22,507 249,900 (16,088,724)

Cash flows from financing activities: Proceeds from capital improvement contributions Proceeds from issuance of membership certificates Proceeds from WCC 2020 capital assessment Disbursements for refundable nonresident memberships Redemptions of memberships, including refundable capital assessments Proceeds from issuance of notes payable Principal payments on capital lease obligations Principal payments on finance lease obligations Principal payments on notes payable Net cash and cash equivalents provided by financing activities

1,733,164 2,877,000 1,413,236 (88,000)

1,789,372 3,807,000 1,446,500 (120,000)

(313,359) 3,500,000 (237,259) (2,875,000) 6,009,782

(476,087) 11,149,027 (304,364) 17,291,448

Net (decrease) increase in cash and cash equivalents

(1,517,703)

649,114

5,558,604

4,909,490

Cash and cash equivalents: Beginning Ending

$ (Continued)

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4,040,901

$

5,558,604

Wyndemere Country Club, Inc. Statements of Cash Flow (Continued) Years Ended August 31, 2023 and 2022 2022

2023 Supplemental disclosure of cash flow information: Cash payments for: Interest, including amount capitalized of 2023—$0; 2022—$72,894

$

535,696

$

304,919

Supplemental schedules of noncash investing and financing activities: Property and equipment, construction included in accounts payable

$

81,152

$

336,533

Redemptions of memberships included in accounts payable

$

66,354

$

65,713

Membership redemptions included in refundable nonresident memberships

$

83,250

$

145,250

Right-of-use assets obtained by incurring operating lease liabilities

$

265,410

$

-

Net book value of right-of-use assets for finance leases reclassified from property and equipment

$

339,163

$

-

Net book value of right-of-use assets for completed finance leases reclassified to property and equipment

$

108,747

$

-

See notes to financial statements.

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OUR VISION & MISSION Vision Statement Preserve and strengthen Wyndemere as a premier private country club community in the Naples, Florida area.

Mission Statement To provide current and future members, their families and guests with an exceptional experience.

Wyndemere Country Club • wyndemere.com

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