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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Commission file numbers 33-89818, 33-96568, 333-08041, 333-57107 and 333-52612

CLUBCORP, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (972) 243-6191

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of the Registrant’s voting stock held by non-affiliates of the Registrant as of June 11, 2002, based on the appraised price of the Registrant’s Common Stock at that date, was $61,910,981.

The number of shares of the Registrant’s Common Stock outstanding as of March 31, 2003 was 93,727,772.

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TABLE OF CONTENTS

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Part I

Item 1. Business

General

ClubCorp, Inc. (referred to as ClubCorp^®, the Company, we, us and our throughout this document) is a holding company incorporated under the laws of the State of Delaware that, through its subsidiaries, owns and operates premier golf and business clubs and destination golf resorts. As of December 31, 2002, we had approximately 210,000 memberships and operated 111 country clubs, golf clubs and public golf facilities, three destination golf resorts and 75 business, sports and business/sports clubs in 30 states and four foreign countries. Marquee resorts and clubs in our portfolio include Pinehurst^® Resort and Country Club in North Carolina, The Homestead^® Resort in Virginia, Barton Creek Resort and Country Club in Austin, Texas, Firestone^® Country Club in Akron, Ohio, Mission Hills^® Country Club near Palm Springs, California, and The City Club on Bunker Hill in Los Angeles. Golf Digest, Golf Travel and other golf industry publications have consistently ranked several of our 178 golf courses and destination golf resorts among the best in the U.S.

Our operations are organized into three principal business segments: country club and golf facilities, resorts, and business and sports clubs. Other operations that are not assigned to a principal business segment include our real estate and international operations, in addition to our corporate services. Our primary sources of revenue include membership dues, membership fees and deposits, food and beverage operations, golf operations and lodging.

Our predecessor corporation was organized in 1957 under the name Country Clubs, Inc. All references herein to us shall also include Country Clubs, Inc. and its successor corporations. For purposes of this document, unless otherwise indicated, these references to us also include our various subsidiaries. However, we and each of our subsidiaries are careful to maintain separate legal existence, and general references to us should not be interpreted in any way to reduce the legal distinctions between subsidiaries or between us and our subsidiaries.

There is currently no public market for our common stock. We are subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, pursuant to Section 15(d) thereof, because we filed a registration statement on Form S-1, which became effective October 24, 1994 pursuant to the Securities Act of 1933, as amended (the Registration Statement). The Registration Statement registered participation interests in the ClubCorp Stock Investment Plan (the Plan) and our common stock, at $.01 par value per share (the Common Stock), to be sold to the Plan, which was amended and restated on January 1, 1999, to become the ClubCorp Employee Stock Ownership Plan (the Amended Plan).

Throughout Item 1 of this document, financial and property information reflect consolidated totals. Included in these figures are amounts attributable to properties held for sale that are classified as discontinued operations under accounting principles generally accepted in the United States of America. Details of these properties are available in Annex A—“List of Facilities.”

Operations

Background and Philosophy

We were founded in 1957 to develop Brookhaven Country Club in the north Dallas area. Since that time, we have expanded our operations to over 180 facilities. In 1967, we established our first business club on the belief that we could profitably expand our operations by applying our club management skills and member-oriented philosophy to a related line of business. In 1984, we entered the destination resort industry when we capitalized on a turn-around opportunity by acquiring Pinehurst, and currently operate three destination resorts. We commenced international operations in 1980 and currently operate 10 facilities primarily in Mexico and Australia. In directing our growth since our formation, our management has emphasized quality service and facilities, endeavoring to exceed the expectations of our members and guests.

Mr. Robert H. Dedman, Sr., our founder and former Chairman and CEO who passed away in August 2002, established ClubCorp on the belief that private clubs represented a significant business opportunity for a company that could combine professional development and management skills with the dedication to personal service necessary to attract and retain members. This commitment to professionalism and personal service is reflected in our member-oriented philosophy: create lasting value for members, guests, employees and financial partners by delivering personalized service and experiences that facilitate life-enhancing relationships, achieve world class results and create pride in belonging.

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Our management and employees recognize that we are in a relationship business where member and guest satisfaction is essential to long-term growth and profitability. Underlying this philosophy are progressive human resource values and goals which we believe have resulted in superior customer service. Management believes that our member-oriented philosophy and culture set us apart from many of our competitors that focus on short-term returns that may jeopardize member satisfaction and long-term profitability. We are committed to maintaining our leadership position in the golf-related and business club segments by creating an environment where members, guests and employees are treated with respect, trust and honesty. Our policy is to not restrict membership in our facilities on the basis of race, religion, gender or other immutable characteristics.

From ClubCorp’s beginning, we have focused on assembling and maintaining an experienced management team. Our eight executive officers, including the Chairman of the Board, possess a significant amount of industry experience. We have also attempted to attract and retain qualified, dedicated managers for our clubs and resorts. These managers possess an average of nine years of experience with our facilities. Senior management believes that our success depends greatly upon the motivation, training and experience of our employees. We provide an extensive, proprietary system of in-house training and education for all of our employees that is designed to improve the quality of services provided to members and guests. See—”Employees.”

Nature of Operations

We operate country club and golf facilities, business and sports clubs and resorts through sole ownership, partial ownership and management agreements. In addition, we perform various corporate services internally and for managed properties and develop and sell real estate adjacent to our facilities. See—”Other Operations and Services.” With respect to our wholly-owned operations, in some cases we own the real property where the facility is operated and in other cases we lease the real property from third parties. See Item 2—“Properties.” Management believes that our existing club, resort and other facilities and our base of club members represent a significant value to us. For example, certain of our country clubs that were developed many years ago are now located in densely populated areas where land of sufficient size to develop a new facility would be prohibitively expensive.

The success of our business is dependent on our ability to attract new members, retain existing members and maintain or increase levels of club usage by members and guests. Although we devote significant resources to promote our facilities and services, many of the factors affecting club membership and usage are beyond our control. Local and federal government laws, including income tax regulations applicable to us and our club members and guests, can adversely influence membership activity. See—”Government Regulation and Environmental Matters.” Changes in consumer tastes and preferences, local, regional and national economic conditions, including levels of disposable income, weather and demographic trends can also have an adverse impact on club membership and usage. See Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Future Operating Results—Seasonality of Demand; Fluctuations in Quarterly Results.”

Country Club and Golf Facilities

Our domestic portfolio of 103 country club and golf facilities is comprised of 89 private and semi-private country and golf clubs with approximately 83,000 memberships as of December 31, 2002, in addition to 14 public golf facilities. Our domestic country club and golf facilities are located in 20 states, providing us with a geographically diverse revenue base. We have focused our operations in this segment on private and semi-private clubs because of our expertise in managing membership-based facilities, the relative competitive position of such clubs as compared to public courses and the stability of recurring membership dues as a primary revenue source.

Country Clubs. Our 74 private country clubs generally provide one or more golf courses and a number of the following: dining rooms, lounge areas, meeting rooms, grills, ballrooms, tennis courts, swimming pools and pro shops. Our private country clubs include Firestone, host of the 2002 Senior PGA Championship and the 2003 World Golf Championships-NEC Invitational, Mission Hills, home of the LPGA’s annual Kraft-Nabisco Championship, and Indian Wells Country Club near Palm Springs, California, one of the four golf courses which hosts the Bob Hope Chrysler Classic.

Golf Clubs. Our 15 semi-private golf clubs generally offer both private and public play, a driving range and food and beverage concessions. Our semi-private golf clubs include Nags Head Golf Links in North Carolina and Golden Bear Golf Club at Indigo Run in South Carolina.

Public Golf Facilities. Our 14 public golf facilities are daily fee courses that offer a “member for the day” experience and generally provide many of the same amenities, facilities and services as our semi-private golf clubs. The refocusing of our business strategy has resulted in the divestiture of 11 public golf facilities over the last two fiscal years with five additional properties currently held for sale. Daily fee facilities include the Bear’s Best courses, which were formed through a joint venture with Jack Nicklaus’ Golden Bear Golf, Inc. Our two Bear’s Best courses in Las Vegas and Atlanta, respectively, feature replicas of some of the most famous Nicklaus-designed golf holes.

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Operating revenues for our country club and golf facilities segment consist primarily of membership revenues (comprised primarily of membership dues, and to a lesser extent, recognition of deferred membership fees and deposits), golf revenues and food and beverage sales. In 2002, our country club and golf facilities segment generated operating revenues of $512.2 million (51.7% of our total revenues) and segment operating income before gain (loss) on disposals and impairment of assets of $51.3 million. See Note 11 to our Consolidated Financial Statements included in Item 8.

Resorts

Each of our three destination resorts focus on delivering quality golf resort lifestyle experiences and the following: lodging and conference facilities, dining and lounge areas, golf, tennis, recreational facilities, European style spas and other resort amenities.

Pinehurst. Acquired in 1984, Pinehurst is the largest golf resort in the world and is a National Historic Landmark. Pinehurst includes eight championship 18-hole golf courses, including the highly acclaimed Pinehurst Course No. 2, and 490 guest rooms and suites in three separate facilities. In addition to a recently opened 31,000 square foot spa facility, Pinehurst also has a golf school, 24 tennis courts, two outdoor swimming pools, nine dining venues and approximately 55,000 square feet of conference space, which enables the resort to accommodate large group functions. Pinehurst hosted the 1999 U.S. Open and has been awarded the right to host the U.S. Open again in 2005, the shortest interval between hosting at a single facility in the last 50 years. In Golf Digest’s America’s Top 75 Golf Resorts (2002), Pinehurst was ranked fourth. Pinehurst also has a private golf club that at December 31, 2002 had 5,533 memberships.

The Homestead. Acquired in 1993, The Homestead is a National Historic Landmark. The Homestead includes 510 guest rooms and suites, three 18-hole championship golf courses, including the Cascades course, a golf school, equestrian center, gun club, six tennis courts, an indoor and an outdoor swimming pool, seven ski slopes and over 72,000 square feet of conference space, including a new 20,000 square foot grand ballroom facility. The Homestead also has a nationally recognized spa and 10 dining facilities. In Golf Digest’s America’s Top 75 Golf Resorts (2002), The Homestead was ranked eighth. At December 31, 2002, the Homestead had 165 memberships.

Barton Creek. Acquired in 1996, Barton Creek is a premier luxury resort in Austin, Texas. Barton Creek includes 295 guest rooms and suites, four championship 18-hole golf courses, including Fazio Canyons and Fazio Foothills, the number one and two rated public access courses in Texas by Golfweek magazine, 11 tennis courts, four dining facilities, more that 30,000 square feet of meeting space, including a ballroom, a 150 seat ampitheater, and a luxurious spa. In Golf Digest’s America’s Top 75 Golf Resorts (2002), Barton Creek was ranked 35th. Barton Creek also includes a private golf club that at December 31, 2002 had 2,425 memberships.

Our resorts segment also includes our sports marketing division, Pinehurst Championship Management, which manages the operations of high profile golf tournaments at Pinehurst and other locations. Operating revenues for our resorts segment consist primarily of lodging revenues, food and beverage sales, golf and merchandise revenues, other amenities and recreation revenues and membership fees. In 2002, our resort segment generated operating revenues totaling $195.8 million (19.7% of our total revenues) and segment operating income before gain (loss) on disposals and impairment of assets of $18.9 million. See Note 11 to our Consolidated Financial Statements included in Item 8.

Business and Sports Clubs

Our domestic portfolio of 73 business and sports clubs is comprised of 51 business clubs, 17 business/sports clubs and five sports clubs, with a combined total of approximately 114,000 memberships as of December 31, 2002. Each of our business clubs includes dining rooms, bar areas and private meeting rooms. In addition, most of our business clubs are equipped with state-of-the-art media and telecommunications equipment, providing a technologically-enabled work area. These technology improvements were made as part of our business club transformation project to meet the changing needs of our business club members. Our sports clubs provide an array of facilities which generally include racquetball and squash courts, jogging tracks, exercise areas, weight machines, aerobic studios, swimming pools and, occasionally, tennis and basketball courts. Business/sports clubs combine the ambiance and amenities of our business clubs with the facilities of our premier sports clubs. Our business and sports clubs include the City Club on Bunker Hill, The Athletic and Swim Club at Equitable Center in New York City, The Metropolitan Club in Chicago, the Citrus Club in Orlando and The Buckhead Club in Atlanta. Operating revenues for business and sports clubs segment consist primarily of monthly membership dues and food and beverage sales. In 2002, our business and sports clubs segment generated operating revenues of $235.4 million (23.7% of our total revenues) and segment operating income before gain (loss) on disposals and impairment of assets of $4.0 million. See Note 11 to our Consolidated Financial Statements included in Item 8.

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Other Operations and Services

Real Estate Operations. We sell fractional ownership interests at selected properties through our Owners Club program and develop and sell residential real estate adjacent to our golf facilities. We implemented the Owners Club concept as a way to combine membership in our private clubs with an ownership interest in vacation homes. Members may reserve vacation time at their home club or at affiliate Owners Clubs based on availability. In addition, membership provides such amenities as golf privileges, tennis, dining, and spa facilities. Our principal Owners Club locations are The Homestead, Barton Creek, and Hilton Head in South Carolina. Given the downturn in the nation’s economy and our strategic initiative to focus on our core businesses, it is unlikely that we will significantly expand our real estate operations in the near term future.

International Operations. In addition to our domestic portfolio of 179 properties, we have 10 properties located internationally, of which eight are country club and golf facilities and two are business clubs. Recently we refined our operating strategy to concentrate our international operations in certain core locations, namely Australia and Mexico. This change in strategy has resulted in the divestiture of six international properties over the last two fiscal years with one additional property currently held for sale. Our current international operations include the Jack Nicklaus Signature Course at Vista Vallarta Club de Golf in Puerto Vallarta, Mexico, site of the 2002 World Golf Championships-EMC World Cup.

Corporate Services. We perform a number of services on a company-wide basis, including certain centralized marketing, accounting, technology support, purchasing and disbursement functions. We publish Private Clubs^®, an award winning bi-monthly magazine which showcases our member and guest facilities and strategic partner relationships through feature articles and advertising.

Expansion and Development

Since the beginning of fiscal year 1999, we have invested over $400 million to complete capital expansions at many of our facilities. Many of these expansions stem from the belief that several of our properties have excess capacity that can be used to increase long-term profitability while maintaining member satisfaction. During fiscal year 2002 we completed a number of projects, including the construction of a state-of-the-art spa at Pinehurst, a new Jack Nicklaus-designed golf course at The Hills of Lakeway in Austin, Texas, and the redesign of one of the golf courses at Firestone Country Club by renowned architect Tom Fazio. In addition, we have recently expanded many of our clubhouses, athletic and dining facilities, as well as completing our business club transformation project. As a result of these recently completed investments, we intend to significantly reduce our discretionary capital expenditure levels in the near term, while focusing on capital replacement expenditures that we feel are necessary to maintain the high level of quality expected by members and guests at our facilities.

Historically we have also expanded our operations through strategic acquisitions and development projects from one country club to an extensive list of over 180 facilities that now include business clubs, resorts and athletic clubs both domestically and internationally. However, in the last two fiscal years we have re-oriented our strategic focus onto our core businesses and divested various non-strategic assets. Given the state of the nation’s economy and the uncertainty that it has caused for our business, our current focus is to complete the divestiture of our non-strategic and underperforming assets, with an increased emphasis on maintaining and improving our existing core businesses for the immediate future. As such, we do not expect to make any significant acquisitions in 2003 nor begin any new development or expansion projects. However, our executive officers continually evaluate opportunities to expand our business through select acquisitions or preferably, through joint ventures and management agreements, which allow us to expand our portfolio and potential membership and revenue base without substantial capital outlays.

Sales and Marketing

We own and operate a diverse base of country clubs, business clubs and resorts. Based on the specific attributes of each club and its local market, we attempt to position our golf and business clubs, from the premium-end to the entry level of the specific market segments in which they compete, making the club experience available to a variety of target demographics. Our resorts are positioned as “one of a kind” properties with a broad range of activities and services.

As part of our corporate services, we develop and implement national marketing and promotional programs, control trademarks and trademark licensing agreements, engage public relations firms and advertising agencies, coordinate communications with media sources and develop collateral materials. We believe that these coordinated activities provide highly effective, complementary programs to the sales efforts at our individual clubs and resorts.

Our clubs offer integrated programs beyond the physical club. We sponsor the Associate Clubs^® Program, providing members of clubs owned, leased or managed by us with access to other clubs outside a certain radius of the member’s club. Signature Gold was

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added in 2001 as a new level of Associate membership, providing enhanced privileges at a select group of our properties. In cities where multiple Associate Clubs are located, membership in a Society is often available. Society membership provides privileges in many clubs within the same metropolitan area without any radius restrictions and also provides additional benefits such as concierge services and VIP seating at local events.

We believe there are significant opportunities to increase revenues by marketing our interrelated products and services to our existing customer base. We seek to develop and accentuate the unique aspects of our resorts, like Pinehurst, and country clubs, like Firestone, in order to attract repeat customers, encourage group guests to return individually and increase rates charged for our services and amenities.

To promote our facilities, we publish Private Clubs magazine, which reaches the majority of the members at our clubs and resorts in addition to our affiliate clubs and resorts. The magazine’s focus is on golf, travel, food, wine, recreation and other aspects of the “private club experience.” Regular features include unusual destinations and travel tips, profiles of members who are business leaders, club profiles, wine reviews, recipes from club chefs, golf and tennis tips, solutions to health and fitness concerns and humor. The readership of Private Clubs was ranked number five in median household income among 98 publications included in the 2002 Mendelsohn Affluent Head of Household Survey, conducted annually by Mendelsohn Media Research, Inc., an independent media research firm. The magazine also has an online edition available at www.privateclubs.com.

We host a number of professional golf tournaments that not only generate additional revenue but also enhance our name recognition and that of our clubs and resorts. During 2002, our facilities hosted several nationally recognized golf tournaments affiliated with, among others, the PGA Tour, the Champions Tour, the LPGA Tour, the Nationwide Tour and the PGA of America. Some of the most notable tournaments our facilities hosted during 2002 were the Senior PGA Championship at Firestone, the Bob Hope Chrysler Classic at Indian Wells, the Kraft-Nabisco Championship at Mission Hills, the 2002 World Golf Championships-EMC World Cup at the Vista Vallarta Jack Nicklaus Signature Course in Puerto Vallarta, Mexico, and the Chick-fil-A Charity Championship at Eagle’s Landing Country Club. Firestone will also host the 2003 World Golf Championships-NEC Invitational. Pinehurst has been awarded the right to host the 2005 U.S. Open, which will be held at the resort for the second time in seven years.

We believe we have established a strong rapport with numerous professional organizations including the following:

Relationships such as these have enabled us to bring distinctive tournaments and events, such as the U.S. Open and the Senior PGA Championship, as well as numerous other prestigious events, to our clubs and resorts throughout the world. We also host many United States Tennis Association and Intercollegiate Tennis Association events, including the Omni Hotels Intercollegiate Tennis Championships, along with other athletic activities such as swimming, diving, lawn bowling and croquet.

Government Regulation and Environmental Matters

We own, lease or manage 189 facilities and other properties, and we are subject to a wide range of federal, state and local environmental laws and regulations, including those governing discharges into the air and water, the storage of petroleum substances and chemicals, the handling and disposal of wastes, and the remediation of contamination arising from spills and releases. Our operations are subject to numerous other laws and regulations, including occupational health and safety, labor and alcoholic beverage

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control laws and laws relating to access for disabled persons. Changes to these laws or regulations could adversely affect us. We have policies in place designed to bring or keep our facilities in compliance, and audit procedures to inspect for compliance with all current federal, state and local environmental laws.

Operations at our golf courses involve the use and storage of various hazardous materials such as herbicides, pesticides, fertilizers, motor oil and gasoline. Under various federal, state and local laws, ordinances and regulations, an owner or operator of real property may become liable for the costs of removing such hazardous substances that are released on, or in, its property and for remediation of its property. Such laws often impose liability regardless of whether a property owner or operator knew of, or was responsible for, the release of hazardous materials. In addition, the presence of such hazardous substances, or the failure to remediate the surrounding soil when such substances are released, may adversely affect the ability of a property owner to sell such real estate or to pledge such property as collateral for a loan. We are not aware of and have not been informed by the Environmental Protection Agency or any state or local governmental authority of any non-compliance or violation of any environmental laws, ordinances or regulations likely to be material to us, and we believe that we are in substantial compliance with all such laws, ordinances and regulations applicable to our facilities and operations. See Item 7—”Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Future Operating Results.”

Proper monitoring of environmental compliance at our various facilities requires substantial management skill and financial resources. We do not expect that we will incur significant expense for environmental compliance or remediation at any property currently or formerly owned, leased or managed by us. However, there can be no assurance that our compliance procedures will be adequate or that we will not be required to expend substantial resources for environmental cleanup or related matters including, without limitation, accidental spills or releases, changes in land use or changes in applicable environmental laws and regulations. In addition, we have owned or operated many sites that are no longer part of our portfolio and it is possible that liability could be imposed for prior spills or releases at those sites. While we believe we are in substantial compliance with applicable laws and regulations, no assurance can be given that we will not be subject to unanticipated environmental liabilities, including, without limitation, liabilities resulting from the actions of prior or adjacent owners, or that any such liabilities will not have a material adverse effect on us.

We are also subject to the Fair Labor Standards Act and various federal and state laws governing such matters as minimum wage requirements, overtime and other working conditions and citizenship requirements. The salaries of certain of our personnel are based on the federal minimum wage and adopted increases in the minimum wage have historically increased our labor costs. Historically, we have tried to pass these increased labor costs to our customers through various price increases. In addition, we are subject to certain state “dram-shop” laws, which provide a person injured by an intoxicated individual the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual. We are also subject to the Americans with Disabilities Act of 1990, which, among other things, created federally mandated access and use requirements. We believe we are operating in substantial compliance with applicable laws and regulations governing our operations.

We have operations in a number of states that regulate the licensing of restaurants and resorts, including liquor license grants, by requiring registration, disclosure statements and compliance with specific standards of conduct. While we believe that we are, and will continue to be, in substantial compliance with these requirements, there can be no assurance that these requirements will not change or that any such change will not adversely affect us.

Competition

We operate in a highly competitive industry and our clubs and resorts compete primarily on the basis of management expertise, reputation, featured facilities, quality and breadth of services and price. With respect to our resorts, we compete on a national and international level with numerous hotel and resort companies. Competition in this part of the industry is intense and there can be no assurance that such competition will not adversely affect revenues, costs or operating income of our resorts. Our country club and golf facilities compete on a local and regional level with other country club and golf facilities and our business and sports clubs compete on a local and regional level with high-end restaurants and other clubs. The level of competition in these lines of 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 material adverse effect on our results from that region. Our results of operations also could be affected by a number of additional competitive factors, including the availability of, and demand for, alternative forms of recreation.

We also compete for the operation of golf courses with national and regional golf course management companies, and, less frequently, with individuals and small ventures that typically own one or more golf courses. There are many opportunities for consolidation in the highly fragmented golf course ownership industry in the U.S. and the industry has seen a high level of

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consolidation in recent years. Though we are not currently focusing on the acquisition of additional facilities, we have made a significant number of acquisitions in the past and we have, and in the future we may, experience increased competition in the acquisition of premier properties. In the acquisition of golf courses, companies compete primarily on the basis of price and their reputation for operating golf courses. Many of our competitors have substantially greater capital resources than we do, sometimes providing them the ability to pay substantially more for the type of facilities consistent with those in our portfolio and strategy.

Throughout the 1990’s and in 2000, there was a substantial increase in the development of public golf facilities in the U.S. Competition in this market has intensified and the increase in availability of daily fee courses has adversely affected demand in portions of the semi-private and private club market. According to the National Golf Foundation, the growth in supply of available golf courses, fueled by the daily fee market, has outpaced growth in the number of golfers in recent years. Although new course construction declined in 2001 and 2002 due to the slowdown in the nation’s economy and the acknowledgement of overbuilding in certain markets, a resurgence in development activity and additional decreases in the average number of golfers per course could adversely affect our business and results of operations. Conversely, this period of overbuilding could eventually benefit us in the long run, as companies with less financial resources and management experience may be forced to sell their properties at discounted values.

In the operation of our facilities, we compete on the basis of our reputation to deliver value through the quality of the facility and quality of services provided to our members and guests. We believe we compete favorably with respect to these factors. Our Associate Clubs^® Program with tiered membership levels, allows members of a club in one market to utilize our clubs in different markets, thus enhancing the value of club membership. Because of our large number of facilities, members are provided access to a large number of facilities and are able to take advantage of our diverse mix and large number of clubs. We believe this program affords us a competitive advantage over competitors that do not maintain similar programs and over other competitors that have similar programs, but fewer facilities.

Employees

As of December 31, 2002, we employed approximately 13,000 full-time and 7,000 part-time employees in our operations. The success of our business is dependent in part on our ability to attract and retain experienced management and other employees on economic terms. We believe that our employees represent an important asset; however, we are not dependent upon any single employee, or a small group of employees, whose loss would have a material adverse effect on us. Although we believe that our labor relations are good, increased labor and benefit costs or deterioration in our labor relations could adversely affect our operating results.

Customers

We are not dependent upon a single customer, or a few customers, whose loss would have a material adverse effect on us. In addition, for the fiscal year ended December 31, 2002, there is no customer to which we had sales equal to 10% or more of our consolidated operating revenues and whose loss would have a material adverse effect on us.

Intellectual Property

We have registered various service marks, including the names CLUBCORP, CCA, CLUB RESORTS, ASSOCIATE CLUBS, and PINEHURST with the U.S. Patent and Trademark Office, and have applied with the U.S. Patent and Trademark Office for the registration of various other service marks. In addition, we have registered certain of our service marks in a number of foreign countries. We regard our service marks as valuable assets and intend to protect such service marks vigorously against infringement.

Available Information

We file annual, quarterly and special reports and other information with the Securities and Exchange Commission (the SEC). All documents may be located at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549 or you may obtain information on the operation of the Public Reference Room by calling 1-800-SEC-0330. Our SEC filings are also available to the public through a link at our internet site www.clubcorp.com or at the SEC’s internet site www.sec.gov.

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Item 2. Properties

We owned and/or operated 189 golf facilities, business and sports clubs and resorts as of December 31, 2002. The following table provides a profile of the composition of our portfolio of facilities from December 28, 1999 to December 31, 2002:

Additions, Divestitures and Reclassifications of Facilities (1)