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Boca Resorts - Letter to SEC

October 12, 2004

Mr. Max A. Webb

Assistant Director

United States Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street, N.W.

Mail Stop 3-5

Washington, D.C. 20549

Re: SEC Staff Comments on Boca Resorts, Inc. Annual Report on Form 10-K

Dear Mr. Webb:

An item-by-item response to the Commission staff’s comment letter dated October
6, 2004 is outlined below. For the convenience of the staff, we have recited
each comment and provided the response to each comment immediately thereafter.
We believe that we have fully responded to the staff’s comments and agree to
reflect the responses provided below in our future filings.

Selected Financial Data, page 12

1. Please display the required balance sheet data in a more prominent position
rather than after the “other data” section.

We will display the required balance sheet data before “other data” in the
selected financial data table in our future filings.

Management’s Discussion and Analysis

Non-GAAP Financial Measure, page 15

2. If your Non-GAAP measure, EBITDA, is intended to be a measure of liquidity
as you indicate in the first paragraph, the reconciliations on page 19 should
be to Cash Flow from Operations, rather than to Net Income from Continuing
Operations. Please revise accordingly. Also, revise the language on page 15
to clarify that the “extraordinary and non-recurring items” are non-cash items
and are not “non-recurring, “ as both items appear in two of the last three
fiscal years.

If you intend for EBITDA to be a performance measure, you should revise the
language on page 15 accordingly and remove the adjustment for extraordinary and
non-recurring items from your definition of EBITDA and your reconciliation to
EBITDA to net income from continuing operations on page 17. Item 10(e)(ii)(B)
of Regulation S-K prohibits adjusting a non-GAAP performance measure to
eliminate or smooth items identified as non-recurring, infrequent, or unusual
when the nature of the item is such that it is reasonably likely to recur
within two years or has occurred within the prior two years.

Our Non-GAAP financial measure of EBITDA is intended to be a measure of
liquidity. We will reconcile EBITDA to cash flow from operations to the extent
we disclose such measure in our future periodic reports. In addition, we will
revise our disclosures to indicate that “extraordinary and non-recurring items”
are non-cash items and are not non-recurring.

Leisure and Recreation Revenue, page 18

3. Please enhance your discussion to quantify the impact of changes in
occupancy in your portfolio of properties and changes in volume and prices of
your services on revenues. Refer to Item 303 (a)(3)(iii) of Regulation S-K.

We will supplement the disclosure of occupancy in future filings by quantifying
the impact of changes in such occupancy on our resort portfolio. We will also
include a discussion of changes in volume and prices of services offered by us
on revenue in our future filings.

Leisure and Recreation Operating Expenses, page 18

4. Please revise to include a discussion of the factors responsible for changes
in leisure and recreation operating expenses during the various periods
presented in your financial statements.

We will include a discussion of the factors responsible for changes in leisure
and recreation operating expenses during the periods presented in our financial
statements in future filings.

5. Supplementally tell us the fact and circumstances concerning the expiration
of two operating leases at country club facilities referred to on page 19. In
your response, quantify the impact to your statement of operations.

In August 1993 (prior to our acquisition of the Boca Raton Resort & Club), the
predecessor owners of the resort entered into agreements to lease food and
beverage operations at the Deer Creek and Carolina Country Club facilities.
These facilities predominantly provided our resort guests and Premier Club
members golf play at alternative facilities (and were particularly important to
us in 1997 when we were renovating our on-premise golf course and prior to 1997
as we had not yet acquired the off-premise Boca Country Club golf facility).
Under the agreements, we were entitled to food and beverage revenue from the
operation of the facilities and were obligated to pay all food and beverage
direct costs, employee costs, certain maintenance costs and 50% of the
following: real and personal property taxes, insurance premiums and common area
maintenance costs. The leases expired in August 2003 and management has no
intention of renewing such leases. Costs included in selling, general and
administrative expenses associated with these leases totaled $748,000, $1.3
million and $1.2 million during the years ended June 30, 2004, 2003 and 2002,
respectively.

Contractual Obligations, Capital Expenditures, page 22

6. Your disclosure of your contractual obligations and capital expenditures
does not appear to comply with Item 303 (a)(5) of Regulation S-K in certain
respects. Please revise to include a tabular disclosure of your contractual
obligations and capital commitments in tabular format outlined in Item 303
(a)(5).

We will include a tabular disclosure of our contractual obligations and capital
commitments in lieu of paragraph format in our future filings.

Quantitative and Qualitative Disclosure About Market Risk, page 23.

7. Please revise to include a discussion regarding the potential exposure to
changes in interest rate risk that is expected to exist in connection with your
$325 million senior credit facility. Your revised disclosure should be
presented in one of the suggested formats outlined in Item 305(a)(1) of
Regulation S-K

We will include a discussion of risks related to changes in interest rates that
is expected to exist in connection with our $325 million senior credit facility
in a format suggested in Item 301 (a)(1) of Regulation S-K in our future
filings.

Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies

Fair Value of Financial Instruments, page 32

8. We note the disclosure indicating “the fair value of Premier Club
refundable membership fees cannot be reasonably estimated based on uncertainty
of the refund date.” However, the disclosure on page 14 appears to indicate
that there may be Company specific historical information concerning average
expected life of the Premier Club memberships. Therefore, we do not believe
that your disclosure has provided adequate justification for not providing the
disclosures required by paragraph 10 of SFAS No. 107. Please revise the notes
to your financial statements to include the disclosures required by paragraph
10 of SFAS No. 107.

We will include a disclosure of the fair value of Premier Club refundable
membership fees in accordance with paragraph 10 of SFAS No. 107 in future
filings.

Stock-Based Compensation, page 33

9. Supplementally tell us the facts and circumstances associated with the
modification in terms of stock option awards. Tell us when the stock option
awards were modified and how your accounting complies with SFAS No. 25 and FIN
44.

Under the provisions of our stock option plan, an optionee’s options shall
expire and all rights to purchase shares pursuant thereto shall terminate
immediately in the event the employment, directorship, contractor or consulting
relationship between us and the optionee is terminated for any reason other
than death, permanent disability or retirement. The Compensation Committee of
our Board of Directors may, in its sole discretion, permit any option to remain
exercisable for such period after such termination as the Committee may
prescribe, but in no event after the original expiration date of the option.

In connection with the termination of five senior level employees over a
two-year period, the Compensation Committee allowed such individuals to
exercise their vested options anytime up to the original expiration of their
options. This action created a new measurement date. Therefore, in accordance
with SFAS No. 25, we measured the intrinsic value of the options and recorded
compensation expense in the associated period of modification equal to the
difference between the market price on the new measurement date and the
exercise price of the option multiplied by the number of options covered.

Note 7. Accounts Payable and Accrued Expenses, page 37

10. Supplementally provide to us an analysis of “other accrued liabilities” and
revise the notes to your consolidated financial statements to state separately
amounts of “other accrued liabilities” exceeding 5% of current liabilities.
Refer to Rule 5-02.20 of Regulation SX.

We will continue to set forth in our footnotes to the Consolidated Financial
Statements of future filings any accrued liabilities in excess of 5% of current
liabilities in accordance with Rule 5-02.20 of Regulation S-X. Other accrued
liabilities (which individually are less than 5% of current liabilities) as of
June 30, 2004 and 2003 consists of the following (in thousands):

    June 30, 2004

    June 30, 2003

    Accrued travel agent commissions

    $
    632

    $
    885

    Accrued land lease rental payment

    523

    339

    Accrued electric and gas costs

    520

    491

    Accrued accounting and tax fees

    413

    364

    Accrued annual meeting and annual report expenses

    120

    162

    Gift certificates

    323

    171

    Accrued legal invoices

    180

    300

    Security deposits on villas at the Boca Resort

    143

    158

    Accrued credit card commissions

    114

    117

    All other
accrued liabilities (individually less than $200,000)

    2,721

    2,443

    $
    5,689

    $
    5,430

Note 15. Income Taxes, page 42

11. Supplementally provide to us further information concerning your recently
adopted tax accounting policy whereby you now use revised tax lives and methods
for your property and equipment “as permitted by the Internal Revenue Service
in various rulings and regulations. “ In your response, tell us the lives and methods previously used and why you
believe you recently adopted tax accounting policy is appropriate.

Management directed a large accounting firm to undertake a tax capital
expenditure study (cost segregation study) on its behalf and, as a result, made
certain changes to our tax depreciation expense policies and procedures on a
retroactive basis as permitted by the Internal Revenue Service. Such changes
were implemented through the filing of two Form 3115’s, Change in Accounting
Method, pursuant to IRS Revenue Procedure 2002-9.

The scope of the capital expenditure study was entirely based on a study of the
tax policies and procedures being employed by us to capitalize and depreciate
fixed assets on an annual basis for federal income tax purposes. More
specifically, the project focused on the following areas:

    •

    The timing and nature of the initial capitalization of fixed assets
for tax purposes (bonus depreciation);

    •

    The proper classification and tax recovery periods of all
individual fixed assets for tax purposes; and

    •

    The proper amount of interest capitalization under current tax law

The project primarily focused on our major capital expenditures related to the
acquisition, construction and renovation of our properties. We have
consistently depreciated our property and equipment for tax purposes using the
Modified Accelerated Cost Recovery System.

Note 17. Segment Reporting, page 44

12. Please provide to us further details why you believe reporting the revenues
and operating results of your hotels, conference facilities, golf courses,
spas, marinas and private clubs in one business segment, hotel and resort real
estate ownership is appropriate. In your response, tell us why you believe the
operations associated with these services meet all the aggregation criteria in
Paragraph 17 of SFAS 131 and should be aggregated into your hotel and resort
real estate ownership segment.

For future reporting where aggregation of operating segments is appropriate,
please note that the guidance in paragraph 26 of SFAS 131 requires detailed
disclosure on the factors management used in identifying reportable segments,
including whether operating segments have been aggregated and the basis for
aggregating the operating segments

We will comply with the staff’s request to disclose in future filings the basis
for aggregating the results of the resorts in one operating segment and the
factors management used in identifying reportable segments as provided for in
SFAS No. 131.

We are an owner and operator of five luxury resorts located in Florida with
hotels, conference facilities, food and beverage outlets, retail stores, golf
courses, spas, marinas and private clubs. This business is referred to as the
“leisure and recreation business” in our public filings. Our resorts include
the Boca Raton Resort and Club (Boca Raton), the Registry Resort at Pelican Bay
(Naples), the Edgewater Beach Hotel (Naples), the Hyatt Regency Pier 66 Hotel
and Marina (Fort Lauderdale) and the Radisson Bahia Mar Resort and Yachting
Center (Fort Lauderdale).

Resort operating personnel report to a chief operating decision maker (an
executive management group) that decides how to allocate resources and assesses
the performance of the resorts. The executive management group manages, and
underlying internal financial and operating reports treat, the resorts as a
single operating segment that generates significant non-room revenue (such as
food and beverage sales, retail sales, etc.) by predominantly leveraging off of
its existing resort guests. For financial reporting purposes, individual
properties included in the “leisure and recreation business” have been
aggregated because of their common economic and operating characteristics as
provided for in paragraph 17 of SFAS No. 131.

With respect to operating performance, each of the resorts have historically
maintained similar profit margins (before amortization, depreciation, interest,
taxes and corporate overhead) in the low to middle 30% range, with the
exception of the Radisson Bahia Mar Resort and Edgewater Beach Hotel which are
smaller properties and have experienced slightly higher profit margins due to
certain scale economies. The services, production processes (where
applicable), class of customer and distribution of service processes

are comparable at each of our resorts and therefore the resorts have been
aggregated into a single operating segment as provided for in paragraph 17 of
SFAS No. 131.

Other

We acknowledge that we are responsible for the adequacy and accuracy of the
disclosure in our public filings, that staff comments or changes to disclosure
in response to staff comments in our filings reviewed by the staff do not
foreclose the Commission from taking any action with respect to the filing; and
we may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United
States.

If the staff has any questions or additional comments, please do not hesitate
to call me at 561-447-5308 or fax me at 561-447-5313.

Very truly yours,

Wayne Moor

Senior Vice President, Treasurer and Chief Financial Officer