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

FORM 10-Q

   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 11, 2002

   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

Former name, former address and former fiscal year,
if changed since last report: 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        No   .

The number of shares of the Registrant’s Common Stock outstanding as of July 26, 2002 was 93,740,461.

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CLUBCORP, INC.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INDEPENDENT AUDITORS’ REVIEW REPORT

The Board of Directors and Stockholders
ClubCorp, Inc.:

We have reviewed the consolidated balance sheet of ClubCorp, Inc. and subsidiaries (ClubCorp) as of June 11, 2002, and the related consolidated statements of operations and cash flows for the twelve weeks and twenty four weeks ended June 11, 2002 and June 12, 2001. These consolidated financial statements are the responsibility of ClubCorp’s management.

We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the accompanying consolidated financial statements, in accordance with Statement of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended and interpreted, ClubCorp changed its method of accounting for derivative instruments and hedging activities on December 27, 2000. Also, as discussed in Note 1 to the accompanying consolidated financial statements, effective December 26, 2001, ClubCorp adopted the provisions of SFAS No. 144, “Accounting for the Disposal or Impairment of Long-Lived Assets.”

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of ClubCorp as of December 25, 2001 and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss), and cash flows for the year then ended (not presented herein); and in our report dated February 22, 2002, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 25, 2001, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

KPMG LLP

Dallas, Texas
July 19, 2002

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ClubCorp, Inc.

Consolidated Balance Sheet
(Dollars in thousands, except share amounts)

See accompanying condensed notes to consolidated financial statements.

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ClubCorp, Inc.

Consolidated Statement of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)

See accompanying condensed notes to consolidated financial statements.

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ClubCorp, Inc.

Consolidated Statement of Cash Flows
(Dollars in thousands)
(Unaudited)

See accompanying condensed notes to consolidated financial statements.

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ClubCorp, Inc.

Condensed Notes to Consolidated Financial Statements (Unaudited)

Note 1. Summary of significant accounting policies
Consolidation
The Consolidated Financial Statements include the accounts of ClubCorp, Inc. and its subsidiaries (collectively ClubCorp). All material intercompany balances and transactions have been eliminated.

Interim presentation
The accompanying Consolidated Financial Statements have been prepared by ClubCorp and are unaudited. Certain information and note disclosures normally included in financial statements presented in accordance with accounting principles generally accepted in the United States of America have been omitted from the accompanying statements. We believe the disclosures made are adequate to make the information presented not misleading. However, the consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and notes thereto of ClubCorp for the year ended December 25, 2001 which are a part of ClubCorp’s Form 10-K.

In our opinion, the accompanying unaudited Consolidated Financial Statements reflect all adjustments necessary (consisting of normal recurring accruals) to present fairly the consolidated financial position of ClubCorp as of June 11, 2002 and the consolidated results of operations for the twelve weeks and twenty four weeks ended June 12, 2001 and June 11, 2002 and the consolidated cash flows for the twenty four weeks ended June 12, 2001 and June 11, 2002. Interim results are not necessarily indicative of fiscal year performance because of the impact of seasonal and short-term variations and other factors such as timing of acquisitions and dispositions of facilities.

Recent Pronouncements
Effective December 26, 2001, we adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”. The adoption of SFAS 142 did not have a significant impact on our consolidated financial position or results of operations as we have virtually no goodwill in our consolidated financial statements. Substantially all of our purchase price related to our acquisitions is allocated to property and equipment.

In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, “Accounting for the Disposal or Impairment of Long-Lived Assets.” SFAS 144 supercedes SFAS 121 and the portion of Accounting Principles Board Opinion No. 30 that deals with the disposal of a business segment. On December 26, 2001, we adopted SFAS 144 and evaluated its impact on our consolidated financial statements. On this date, we had eight properties classified as held for sale; however, under the guidelines of SFAS 144, the operations of these properties did not have to be reclassified and recorded in discontinued operations, as the properties were classified as held for sale before the date of implementation. During the twenty four weeks ended June 11, 2002, we classified an additional 19 properties as held for sale. We will continue to be involved in the daily management of 13 of these properties that were classified as held for sale after the pending sale transaction. Therefore, under the guidelines of SFAS 144, we did not reclassify or record the operations of these properties in discontinued operations and prior year amounts have not been restated. The remaining properties’ operations are also not reclassified and recorded in discontinued operations and the prior year amounts have not been restated due to the insignificant impact to the consolidated financial statements.

Effective April 30, 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 62, Amendment of FASB Statement No. 13, and Technical Corrections.” The main provisions of this statement address classification of debt extinguishments and accounting for certain lease transactions. Implementation of this statement is not expected to have a material impact on our consolidated financial statements.

Reclassifications
Certain amounts previously reported have been reclassified to conform with the current period presentation.

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Impairment of long-lived assets
Long-lived assets and certain identifiable intangibles to be held and used and to be disposed of by ClubCorp are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

We assess the recoverability of long-lived assets to be held and used by determining whether the recorded balance can be recovered over its remaining life through estimated future cash flows. If it is determined that impairment exists, the fair value for purposes of calculating the impairment is measured based on discounted future operating cash flows using a risk-adjusted discount rate.

Prior to December 26, 2000, management approved plans to dispose of certain facilities in various segments during 2001 and recorded an impairment loss to write down the carrying value of six of these golf facilities based on the estimated sales values. During the twenty four weeks ended June 12, 2001, we recorded additional impairment losses of $1,627,000 relating to one of these properties and also recovered $1,595,000 in prior recorded impairment losses associated with two properties. The recoveries were associated with estimated purchase price increases due to changes in market conditions.

During the twelve weeks ended June 11, 2002, we transferred six golf properties to held for sale and recorded an impairment loss of $1,865,000 to write down the carrying value of those properties. We assessed the impairment of the disposal group based on the expected sales price less estimated cost of disposal. Impaired assets identified were property and equipment including buildings and land improvements.

Note 2. Derivative instruments
Effective December 27, 2000, we adopted Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended and interpreted. SFAS 133 requires that all derivative instruments, such as interest rate swap contracts, be recognized in the financial statements and measured at their fair market value. Changes in the fair market value of derivative instruments are recognized each period in current operations or stockholders’ equity (as a component of other comprehensive income (loss)), depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. The adoption of SFAS 133 resulted in recording approximately $2,119,000, net of $1,141,000 income tax benefit, in other comprehensive income (loss) for the cumulative effect of the accounting change.

As of June 11, 2002, we had interest rate swap contracts to pay fixed rates of interest (ranging from 5.25% to 7.21%) and receive variable rates of interest based on LIBOR on an aggregate of $225.0 million notional amount of indebtedness with maturity dates ranging from June 2003 through September 2003. These hedges are highly effective, however, for the twenty four weeks ended June 11, 2002, we recorded $27,000 as a reduction of interest expense for the ineffective portion of these instruments. The aggregate fair market value of all interest rate swap contracts was ($9,419,000) on June 11, 2002 and is included in other liabilities on the Consolidated Balance Sheet.

Note 3. Operating revenues
ClubCorp recognizes revenues from the following sources:

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The income tax benefits for the twelve and twenty four weeks ended June 12, 2001 and June 11, 2002 differ from amounts computed by applying the U.S. Federal tax rate of 35% to income (loss) from operations before income tax benefit (provision) primarily due to foreign and state income taxes, net of Federal benefit, and the effect of consolidated operations of foreign and other entities not consolidated for Federal income tax purposes.

Note 5. Weighted average shares
The following table summarizes the weighted average number of shares used to calculate basic and diluted earnings (loss) per share:

Diluted weighted average shares for the twelve weeks ended June 12, 2001 exclude the assumed conversion of 2,429,800 options, due to their antidilutive effect. Diluted weighted average shares for the twelve weeks ended June 11, 2002 and twenty four weeks ended June 12, 2001 and June 11, 2002 exclude incremental shares from assumed conversion of 665,681, 1,033,382 and 724,697 shares, respectively, due to the net losses for the periods.

Note 6. Property and equipment
Property and equipment consists of the following (dollars in thousands):