MASTER ANNUAL REPORT

Frenchman’s Creek, Inc. and Subsidiary

Notes to Consolidated Financial Statements ______________________________________________________________________________________________________________

Note 9. Fund Balances Activity (Continued) Total capital assessments collected during the years ended April 30, 2018 and 2017, amounted to $1,520,694 and $1,926,470, respectively. These amounts consist of collections of assessments for the “19 th hole,” “back of the house” and “fitness center” renovations, as well as, assessments for the Beach Club repairs and annual capital requirements. Note 10. Insurance Matters The Association’s insurance policies have been renewed through June 1, 2019. The Association’s properties are insured for all perils, including windstorm, under two policies with two insurance companies, Weston and Zurich North America. All structural properties, other than the Clubhouse, Fitness Center, Pro Shop and Guard House, are insured for named windstorm coverage by Weston with a 3% per building, per year, deductible. The Clubhouse, Fitness Center, Pro Shop and Guard House are insured for windstorm, through Zurich, with a named-storm deductible of $2,194,000 per occurrence. A $1,494,000 deductible buy back policy is in place to reduce the named-storm deductible on those properties to $700,000 per occurrence. The Association’s properties located in Palm Beach Gardens are covered for damage due to flood by Tokio Marine Specialty Insurance and the Beach Club build- ing, located in Juno, has primary flood coverage with the National Flood Insurance Program and excess flood coverage with Lloyds of London. Due to the Association’s deductibles and areas not covered by insurance (i.e. common area trees and debris removal), losses from future catastrophic weather events may require special assessments or funding form ex- isting reserves, if such funds are available. Hurricane Activity : In September, 2017, the Association experienced damages caused by hurricane Irma. The Association received insurance proceeds of $252,916, of which $76,792 has been deferred for purchases to take place in the subsequent period. In order to cover expenses related to the hurricane cleanup in excess of the insurance claims, the Association assessed the members $1,100,000, to be allocated evenly over the mem- bership and paid in four installments. As of April 30, 2018, total expenses were $1,049,987 instead of the $1,100,000 originally estimated; therefore, a credit of $50,013 was allocated back to the membership and offset against the fourth installment. The Association incurred $1,226,111 of expenses related to hurricane Irma. In October 2016, the Association experienced damages caused by hurricane Mathew. The Association collected member assessments of $224,820 to meet the additional expenses of $ 221,021 related to the hurricane cleanup.

2018/2019 Annual Report Page 43