John’ s Island Club, Inc. Notes to Financial Statements
Note 4. Property and Equipment( Continued)
During the year ended December 31, 2025, the Club disposed of property and equipment with an approximate cost and accumulated depreciation of $ 1,574,000 and $ 1,467,000, respectively. The Club received approximately $ 214,000 of proceeds and recorded a gain on disposition of property and equipment of approximately $ 107,000.
During the year ended December 31, 2024, the Club disposed of property and equipment with an approximate cost and accumulated depreciation of $ 7,709,000 and $ 7,639,000, respectively. The Club received approximately $ 13,000 of proceeds and recorded a loss on disposition of property and equipment of approximately $ 57,000.
During the years ended December 31, 2025 and 2024, the Club recorded depreciation expense of approximately $ 11,299,000 and $ 9,436,000, respectively.
In December 2022, the Club’ s Golf Course Maintenance( GCM) facilities sustained damages related to a fire. During the year ended December 31, 2024 the Club received insurance proceeds in the amount $ 1,175,000 which are included on the statements of activities, to restore the GCM facilities. The insurance claim was closed during the year ended December 31, 2024.
During the years ended December 31, 2025 and 2024, primarily in connection with the golf club renovation, the Club entered into contracts totaling approximately $ 17,869,000. As of December 31, 2025, approximately $ 15,826,000 remained payable under these contracts.
In January 2026, the Club entered into a construction agreement related to the parking garage project totaling approximately $ 11,985,000.
Note 5. Line of Credit
In May 2024, the Club amended its then existing un-committed line of credit of $ 15,000,000, extending the maturity through May 27, 2026. Borrowings on this line of credit are subject to a variable interest rate of the greater of 1.00 % or the prime rate minus 1.25 %( 5.50 % and 6.25 % as of December 31, 2025 and 2024, respectively). There were no borrowings on this agreement for the years ended December 31, 2025 and 2024.
The above-described revolving line of credit is collateralized by all business assets including general intangibles, inventory, equipment( excluding leased equipment) and excludes land and buildings.
Note 6. Leases
The Club leases parking spaces and a storage space under operating lease agreements with lease terms of 15 and 3 years, respectively, and interest rates of 3.09 % and 5.50 %, respectively. The Club also leases vehicles and golf course maintenance equipment under finance lease agreements with initial terms ranging 32 to 48 months and interest rates ranging from 3.64 % to 7.69 %. The Club’ s leases do not contain any material restrictive covenants or residual value guarantees.
Operating lease cost is recognized on a straight-line basis over the lease term. Operating lease expense is recorded in the related departmental expense on the statements of activities. Finance lease cost is recognized as a combination of the amortization expense for the right-of-use assets and interest expense for the outstanding lease liabilities, and results in a front-loaded expense pattern over the lease term.
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