DIAMONDHEAD POA

AUGUST FINANCIAL STATEMENTS

JOHN LIST, CONTROLLER

The eight months ended August 31, 2005 showed a net profit of $215,374 with a cash balance at the end of August of $1,645,967, $109,000 better than last year at this time. During the month of August we had $35,000 of expenses due directly to Katrina. More Katrina losses will occur in future months.

The profitable activities were Membership and Capital Improvements, due to membership dues and timing of capital projects, as well as Architectural & Engineering due to permit fees. These fees from members helped to finance the amenities (Golf, Country Club, Yacht Club, Recreation, Tennis and Airport) that normally do not generate profits as well as Administration. The project to improve drainage on the driving range cost $21,100.

Prior to the arrival of Katrina we were in solid financial condition. The uncertainties of post-Katrina activities have been discussed elsewhere in this paper and are primarily depended upon our members’ abilities to meet their obligations for membership dues and the level of permit activity during the next four months.