<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended DECEMBER 31, 1995, or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from__________to__________
Commission file number 0-15932
BF ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-3038456
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 BUSH STREET, SUITE 1250, SAN FRANCISCO, CA 94104
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 989-6580
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
$.10 PAR VALUE COMMON STOCK
(Title of Class)
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 X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of March 13, 1996, the aggregate market value of the $.10 Par Value Common
Stock held by non-affiliates of the registrant was approximately $9,907,990
based on the closing sale price for the stock on that date. This amount
excludes the market value of 1,769,195 shares of Common Stock beneficially owned
by the registrant's directors and officers.
As of March 13, 1996, there were outstanding 3,750,793 shares of the
registrant's $.10 Par Value Common Stock.
DOCUMENT INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement to be mailed to stockholders in
connection with the registrant's Annual Meeting of Stockholders, scheduled to be
held in May 1996, are incorporated by reference in Part III of this report.
Except as expressly incorporated by reference, the registrant's Proxy Statement
shall not be deemed a part of this report.
Exhibit Index begins on page 33.
<PAGE>
PART I
ITEM 1. BUSINESS.
GENERAL
BF Enterprises, Inc. (the "Company") was organized under the laws of the
State of Delaware on May 22, 1987. The Company currently is engaged primarily
in the real estate business, including the development of a large tract of land,
known as Meadow Pointe, in suburban Tampa, Florida, and, as owner and landlord,
leasing a 220,000 square foot building on 16 acres in Tempe, Arizona. In
addition, the Company owns 22 acres of undeveloped land in suburban Nashville,
Tennessee, and two current real estate loans secured by first mortgages in the
aggregate principal amount of $780,000.
At December 31, 1995, the Company's assets also included approximately $5.2
million of cash, cash equivalents and marketable securities, which the Company
intends to use for general corporate purposes, including development of the
Meadow Pointe project and payment of principal and interest on subordinated
debentures and other obligations.
REAL ESTATE
The Company's principal real estate assets consist of the following:
MEADOW POINTE. As of February 29, 1996, two of the Company's real estate
subsidiaries owned approximately 621 acres, and held reversionary interests in
an additional eight acres, in a master planned unit development, encompassing
approximately 1,724 acres, known as Meadow Pointe, in Pasco County, Florida.
Since 1992, those subsidiaries have sold 886 lots, consisting of approximately
186 acres, to homebuilders and 834 acres to the two community development
districts described below. Meadow Pointe is located about 20 miles northeast of
downtown Tampa, on County Road 581.
The Company and its subsidiaries commenced development of Meadow Pointe in
1992. Meadow Pointe is subject to, and is being developed in accordance with, a
Development Order issued by the Pasco County Board of County Commissioners, and
is currently zoned for approximately 2,850 single family homes, 1,400
multifamily residential units and 61.5 acres of commercial facilities.
Infrastructure construction at Meadow Pointe began in late February 1992,
and the initial sales of residential lots to homebuilders closed in June 1992.
As of February 29, 1996, the Company's development subsidiary, Trout Creek
Development Corporation ("Trout Creek"), had sold 886 lots to five Tampa
homebuilders. Trout Creek sold 211 lots in 1995, 284 lots in 1994, 267 lots in
1993 and 99 lots during the last seven months of 1992, and sold 25 lots in the
first two months of 1996, for prices ranging from approximately $21,000 to
$35,500. The homebuilders currently are offering finished houses at base prices
ranging from approximately $90,000 to $180,000.
Trout Creek is engaged in the development of residential lots and
multifamily and commercial parcels for sale to homebuilders and others. The
Company does not expect that Trout Creek or any other subsidiary or affiliate
will engage in the construction of houses on finished lots. In March 1991,
Trout Creek entered into a Development and Management Agreement (the
"Development Agreement") with Devco II Corporation ("Devco"), a Florida
corporation whose principals are experienced Tampa-area real estate developers.
Under the Development Agreement, Devco is responsible for planning and managing,
and advising Trout Creek with respect to, the development of Meadow Pointe,
including the sale of single family lots and multifamily and commercial parcels.
1
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Two community development districts, both local units of Florida special
purpose government, were formed in October 1991 and October 1994, respectively.
These districts, whose jurisdiction is limited to the Meadow Pointe project,
together encompass all of the 1,724 acres within the project. During the period
February 1992 through October 1995, the two community development districts
issued an aggregate $54.5 million of capital improvement revenue bonds,
including $16.1 million issued in 1995. All of these bonds were issued to
finance the acquisition of property, and the construction of roads, utilities,
recreation facilities and other infrastructure systems. These infrastructure
improvements are essential to the development of finished lots by Trout Creek
and the sale of those lots to homebuilders.
The Company's budget currently anticipates the future issuance of
approximately $20 million of additional capital improvement revenue bonds to
finance the acquisition of property and the construction of roads, utilities and
other infrastructure systems within the project. There can be no assurance that
additional bonds will be issued.
In the fourth quarter of 1995, the Company listed for sale with a large
national real estate brokerage firm approximately 56 acres of commercial
property and approximately 132 acres of property zoned for 1,400 multifamily
units. There can be no assurance that the brokerage firm will be able to
arrange for sales, on terms acceptable to the Company, of all or any part of the
property listed.
COMMERCIAL BUILDING IN TEMPE. The Company owns a 220,000 square foot
commercial building on 16 acres in the Hohokam Industrial Park in Tempe,
Arizona, which is currently subject to a 10-year triple net lease to Bank One,
Arizona, NA, a subsidiary of Banc One Corporation. The lease became effective
March 1, 1995, and provided for the tenant's phased take down of space during
1995; rental of the entire premises commenced January 1, 1996. The Company
previously had executed a lease amendment with the original tenant, under the
terms of which that lease was terminated 33 months before the original lease
expiration date. In 1995, the Company's rental income from the Tempe building,
which had been $505,000 annually under the original lease, was reduced to
$349,000, exclusive of certain costs of approximately $153,000 related to the
new lease arrangements. Beginning January 1, 1996, when Bank One will be paying
rent on the entire building, base rents due under the new lease will increase
to: $1,452,000 in 1996; $1,628,000 in 1997; $1,707,200 in 1998; $1,826,000 in
1999; $1,848,000 in 2000; $1,936,000 in 2001; $1,953,600 in 2002; $1,975,600 in
2003; $1,980,000 in 2004; and $330,000 for the two months ending February 28,
2005, when the original lease term ends. During this period, the Company will
report annual rental income of approximately $1,815,000, the average rental
during the period January 1, 1996 through February 28, 2005. The lease also
provides for two five-year renewal periods, with base rents equal to the market
rental rates then in effect in the metropolitan Phoenix area.
MORTGAGE LOANS. At December 31, 1995, the Company held loans which were
current and secured by first mortgages on a 23,000 square foot commercial
building, and the underlying two acres of property, in Edina, Minnesota and one
model home at Meadow Pointe, in the aggregate principal amount of $780,000.
Both loans bear interest at market rates in effect on the dates the loans were
made. The loan secured by the Minnesota property, in the principal amount of
$680,000, is due in 2000, and the other loan, of $100,000 principal amount, is
due in 1997.
2
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OTHER REAL ESTATE. The Company also owns 22 acres of undeveloped land in
suburban Nashville, Tennessee which is zoned commercial.
FOREIGN OPERATIONS
The Company has no foreign operations and has no material assets in foreign
countries. A wholly owned foreign subsidiary holds 22% of the common stock of
Trout Creek.
EMPLOYEES
Currently, the Company has eight employees.
COMPETITION
The Company competes with many other firms and individuals who develop real
estate or hold undeveloped property for lease or sale or developed property for
lease or sale. While competitive conditions vary substantially, depending upon
the geographical area and the type of real estate asset, within a particular
market the most significant competitive factors generally are location, price
and zoning.
Development of the Meadow Pointe project, the Company's principal asset,
will take several years and is dependent upon, among other things, the
availability of future financing on terms satisfactory to the Company, the
strength of the general economy in the Tampa area and nationally, residential
mortgage interest rates, competitive residential developments serving the same
group of home buyers and other factors related to the local Tampa real estate
market. Recently, construction has begun, or plans for construction starts in
1996 have been announced, for several other residential projects in the same
market area as Meadow Pointe, along or near County Road 581. These new projects
may have an adverse impact on the rate of lot sales at Meadow Pointe or lot
prices, or both.
It is expected that the Tempe, Arizona property will remain under lease
with the existing tenant until at least March 2005. The Company expects to sell
or develop its Nashville property when local conditions warrant.
OTHER INFORMATION
The Company's current business constitutes a single business segment.
Financial and other information relating to the Company's operations by industry
segments for the past three years is, therefore, omitted. See the Company's
Consolidated Financial Statements.
Except for the lease of the 220,000 square foot Tempe commercial building
to one tenant, the Company's business is not dependent upon a single customer or
a limited number of customers, and is not seasonal. The Company does not
utilize raw materials, has no order backlog, and no material portion of its
business is subject to government contracts. The Company has no trademarks,
service marks or tradenames other than Meadow Pointe. The Company does not
engage in or make any expenditures with respect to research and development
activities, and the Company's business is not materially affected by compliance
with federal, state or local provisions regulating the discharge of materials
into the environment or otherwise relating to the protection of the environment.
3
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ITEM 2. PROPERTIES.
The Company leases its headquarters office space in the Shell Building at
100 Bush Street, in San Francisco, under a lease expiring January 31, 1999, with
a three-year renewal option. In the first quarter of 1995, the Company
relocated its headquarters office within the Shell Building and reduced its
rental expense. The Company believes this new office space is adequate for its
current needs.
ITEM 3. LEGAL PROCEEDINGS.
In February 1996, the Company's predecessor, on behalf of the Company,
filed a complaint against the California Franchise Tax Board (the "FTB") for a
refund of assessed income taxes and accrued interest for the year ended December
31, 1981. The suit arises out of the FTB's assessment for 1981 taxes, based on
its contention that a loss attributable to the 1981 acquisition by the Company's
predecessor of a warrant for the purchase of its common stock should have been
treated as a business deduction rather than a non-business deduction. The
Company appealed the FTB's assessment to the California State Board of
Equalization, which denied the appeal in July 1994. In March 1995, the Company
made payment to the FTB of the assessment and accrued interest and filed a
request for refund in the full amount of that payment. The Company's request
for refund was denied and the action described above was filed. The amount of
the Company's payment to the FTB, after reimbursement by the Company's
predecessor of the related federal and state income tax benefits, was
approximately $400,000.
In September 1995, the Company's predecessor and a subsidiary of the
Company were served as defendants in an action filed in the U.S. District Court
for the Eastern District of Pennsylvania. The suit arises out of the death of a
person who fell from a mobile passenger lounge at the Mexico City International
Airport in 1993. The plaintiff alleges, among other things, that the mobile
lounge was manufactured and sold by a former subsidiary of the Company's
predecessor. That former subsidiary sold all of its assets and business to a
third party in 1975. This lawsuit is in its preliminary stages. The Company's
management does not expect that the outcome of this lawsuit will have a material
adverse effect on the Company's financial position.
The Company is not a party to any other pending legal proceedings except
routine litigation incidental to its business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of the Company's security holders during
the fourth quarter of the fiscal year covered by this report.
4
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The Company's common stock trades on the Nasdaq National Market System tier
of The Nasdaq Stock Market under the symbol "BFEN". On March 15, 1996, there
were approximately 800 holders of record of the common stock.
Following is a list by calendar quarter of the reported high and low
closing bid quotations per share for the Company's common stock during 1995 and
1994, all of which quotations represent prices between dealers, do not include
retail mark-up, mark-down or commission and may not necessarily represent actual
transactions:
<TABLE>
<CAPTION> Bid Quotations
----------------------------
1995 High Low
--------------- ---- ---
<S> <C> <C>
1st Quarter $4 7/8 $4 1/4
2nd Quarter 5 7/8 4 7/8
3rd Quarter 5 3/4 5
4th Quarter 5 1/4 4 1/2
1994 High Low
--------------- ---- ---
1st Quarter $3 3/4 $3 3/4
2nd Quarter 3 7/8 3 3/4
3rd Quarter 3 7/8 3 3/4
4th Quarter 4 1/4 3 3/4
</TABLE>
The source of the foregoing quotations was the National Quotation Bureau,
Inc.
No cash dividends were paid in 1995 or 1994, and the Board of Directors of
the Company currently does not expect to declare cash dividends, in an effort to
conserve the Company's cash resources for payment of subordinated debentures,
real estate development activities and other corporate purposes.
5
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
Following is a table of selected financial data of the Company for the last five
years:
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues $ 3,550 $ 3,883 $3,854 $3,313 $1,457
Income (loss) before
income taxes 477 1,608 2,103 (632) (258)
Net income (loss) 445 1,608 2,103 (632) 142
Net income (loss)
per share .11 .41 .54 (.17) .04
Average common stock
and equivalents (1) 4,029 3,947 3,895 3,821 3,919
BALANCE SHEET DATA
(AT END OF PERIOD):
Total assets $18,521 $20,446 $26,484 $24,293 $24,305
Subordinated debentures, unmatured 817 817 5,770 10,605 10,830
Stockholders' equity 14,867 14,625 13,207 11,134 10,660
Stockholders' equity per
share (fully diluted) 3.84 3.74 3.37 2.88 2.79
</TABLE>
Notes: (1) In calculating net income (loss) per share:
(i) For 1995, the weighted average number of shares was 4,029,000, the
sum of 3,788,000 weighted average shares of common stock and 241,000 weighted
average common stock equivalents outstanding during the year.
(ii) For 1994, the weighted average number of shares was 3,947,000,
the sum of 3,782,000 weighted average shares of common stock and 165,000
weighted average common stock equivalents outstanding during the year.
(iii) For 1993, the weighted average number of shares was 3,895,000,
the sum of 3,819,000 weighted average shares of common stock and 76,000 weighted
average common stock equivalents outstanding during the year.
(iv) For 1992, the weighted average number of shares was 3,821,000.
This was exclusive of 110,000 common stock equivalents which would have been
anti-dilutive in this loss period.
(v) For 1991, the weighted average number of shares was 3,919,000, the
sum of 3,891,000 weighted average shares of common stock and 28,000 weighted
average common stock equivalents outstanding during the year.
6
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS FOR THE THREE YEARS ENDED DECEMBER 31, 1995
During the years ended December 31, 1995, 1994 and 1993, the Company
realized net income of $445,000, $1,608,000 and $2,103,000, respectively. Lower
net income for 1995 was due principally to a reduction in revenues from lot
sales at the Company's Meadow Pointe project, near Tampa, Florida, an increase
in the costs attributable to those lot sales, reduced rental income from the
Company's Tempe, Arizona property and costs incurred in connection with a new
lease of that property.
Results for the years 1995, 1994 and 1993 included gains from sales of lots
within Meadow Pointe of $1,415,000, $2,375,000 and $2,503,000, respectively, on
sales to homebuilders of 211 lots in 1995, 284 lots in 1994 and 267 lots in
1993. The Company's reported gains from property sales at Meadow Pointe are
based in part upon estimates of the total revenues and costs to be derived by
the Company over the life of the project (see Note B of Notes to Financial
Statements). The Company periodically reviews these estimates and makes
cumulative adjustments to reflect any revised estimates. Gains from sales of
property within Meadow Pointe for 1993 were increased significantly by the
impact of payments received from the sale of land to a community development
district (see Note H of Notes to Financial Statements). The lower level of
sales activity at Meadow Pointe in 1995 may continue, depending upon, among
other things, the strength of the general economy in the Tampa area, residential
mortgage interest rates, competitive residential developments serving the same
group of home buyers and other factors related to the local Tampa real estate
market.
In addition to Meadow Pointe residential lot sales, during 1995 the Company
had real estate net revenue of $756,000 from the sale of a commercial building
and underlying property in Edina, Minnesota. The cost of real estate sold
attributable to the Edina property was $792,000. Results for 1995 also included
aggregate revenue and cost of $216,000 and $205,000, respectively, for lots in a
residential development adjacent to Meadow Pointe and a model home within the
Meadow Pointe project. There were no such revenues or costs in 1994. Results
for 1993 included revenue and cost of $146,000 and $147,000, respectively, for
lots in the residential development adjacent to Meadow Pointe. Net income for
1993 also included $665,000 in gains from securities, more particularly
described below, and a nonrecurring charge of $388,000 for costs related to the
issuance of the Company's Floating Rate Subordinated Debentures due December 31,
1999 (see Note I of Notes to Financial Statements).
Real estate leasing income and mortgage loan interest decreased 31% in 1995
as compared to each of 1994 and 1993, primarily as a result of an amendment of
the original lease, and the execution of a new lease, of the Company's Tempe,
Arizona property (see Note G of Notes to Financial Statements). Due to these
changes, annual rental income from the Tempe property decreased from $505,000 in
each of 1994 and 1993 to $349,000 in 1995. In addition, the Company incurred
costs during 1995 for property taxes, insurance and certain other operating
expenses related to the lease of the Tempe property of $153,000 which it did not
incur in prior years, none of which costs it expects to incur after 1995. These
costs were included in operating expenses during 1995 and accounted for the
increase over operating expenses in the two preceding years.
7
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Interest from investments was $222,000 in 1995 as compared to $319,000 in
1994 and $357,000 in 1993. The decline in interest income in 1995 was due to a
reduction in the amount of funds available for investment.
Interest expense, attributable entirely to subordinated debentures, was
$57,000 in 1995 as compared to $76,000 and $429,000 in 1994 and 1993,
respectively. The substantial decline in this expense from 1993 was due to the
maturity of one series of subordinated debentures on December 31, 1993 and of
another on May 31, 1994. These interest amounts included discount amortization
and were net of capitalized interest expense of $124,000 and $359,000 in 1994
and 1993, respectively.
General and administrative expenses charged against income were $1,248,000
in 1995. These expenses decreased by $256,000 in 1995 and increased by $189,000
in 1994 from the year immediately preceding. The increase in 1994 was due
principally to higher employee compensation and benefits expenses, including a
January 1995 restricted stock grant to five officers of the Company (see Note M
of Notes to Financial Statements) which was taken into expense in 1994.
Employee compensation expenses capitalized against Tampa, Florida real estate in
the years ended December 1995, 1994 and 1993 were $125,000, $200,000 and
$169,000, respectively, representing 17%, 19% and 20%, respectively, of total
compensation for those years. The Company capitalizes a portion of the
compensation of certain employees who devote a significant portion of their time
to the Meadow Pointe project.
The Company realized gains from securities of $665,000 in 1993, of which
$612,000 was from sales of long-term marketable equity securities reclassified
as short-term in 1992 with a consequent $895,000 charge to earnings, the amount
by which the cost of the securities exceeded their market value at the
reclassification date. The Company had losses of $8,000 and $42,000 in 1995 and
1994, respectively, from sales of government securities in periods of rising
interest rates.
LIQUIDITY AND CAPITAL RESOURCES
During the year ended December 31, 1995, cash and cash equivalents
increased by $1,693,000. This increase was due principally to proceeds of
$3,185,000 from the sale of 381 acres of land in the eastern portion of Meadow
Pointe to a community development district (see Note H of Notes to Financial
Statements). At December 31, 1995, the Company held $5,206,000 in cash, cash
equivalents and marketable securities as compared to $3,654,000 for all short-
term and long-term liabilities. From time to time, the Company purchases shares
of its common stock in the open market.
The Company's business plan calls for substantial expenditures during the
next several years relating to the planned development of Meadow Pointe. Since
February 1992, two community development districts encompassing the Meadow
Pointe project have issued approximately $54.5 million of capital improvement
revenue bonds. The Company's budget currently anticipates the future issuance
of approximately $20 million of additional bonds by one of those community
development districts. The proceeds of such bonds have been and are expected to
be used to construct infrastructure improvements necessary for the development
and sale of residential lots, and multifamily and commercial parcels, in Meadow
Pointe (see Note H of Notes to Financial Statements). There can be no assurance
that any additional bonds will be issued.
The Company intends to pay for its other budgeted expenditures at Meadow
Pointe and its other operating expenses (including those related to debenture
payments) with (i) cash
8
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generated from sales of property within Meadow Pointe, its other operations and
sales of marketable securities, and (ii) cash and cash equivalents on hand.
There can be no assurance that the Company will generate sufficient cash or have
sufficient cash and cash equivalents on hand to cover such expenditures.
Moreover, there can be no assurance that the amounts currently budgeted will be
sufficient to develop the long-term Meadow Pointe project.
9
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Index to Financial Statements Covered by Report of Independent Public
Accountants
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of independent public accountants ......................................11
Consolidated statements of financial position at December 31, 1995
and 1994 ......................................................................12
Consolidated statements of operations for the years ended December 31,
1995, 1994 and 1993 ...........................................................13
Consolidated statements of stockholders' equity for the years ended
December 31, 1995, 1994 and 1993 ..............................................14
Consolidated statements of cash flows for the years ended December 31,
1995, 1994 and 1993 ...........................................................15
Notes to consolidated financial statements .................................16-23
</TABLE>
10
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders
and the Board of
Directors of BF Enterprises, Inc.:
We have audited the accompanying consolidated statements of financial position
of BF Enterprises, Inc. (a Delaware corporation) and Subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. These consolidated financial statements and the
schedules referred to below are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of BF Enterprises, Inc.
and Subsidiaries as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The accompanying schedules
listed in the index to the financial statements and schedules are presented for
purposes of complying with the Securities and Exchange Commission's rules and
are not a required part of the basic consolidated financial statements. This
information has been subjected to the auditing procedures applied in our
audit of the basic consolidated financial statements and, in our opinion,
fairly state in all material respects the financial data required to be set
forth therein in relation to the basic consolidated financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
San Francisco, California
February 28, 1996
11
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
December 31,
------------------------
1995 1994
---- ----
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 4,668 $ 2,975
Marketable securities 538 1,883
Receivables 188 144
Mortgage loans 732 886
Real estate rental property, net of depreciation 2,420 2,471
Real estate inventory held for current sale
and land held for future development 9,446 11,169
Other real estate 132 879
Other assets 397 39
------- -------
TOTAL ASSETS $18,521 $20,446
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Payables and accrued liabilities $ 2,821 $ 4,572
Subordinated debentures, unmatured 817 817
Deferred income taxes 16 432
------ ------
Total Liabilities 3,654 5,821
------ ------
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value
Authorized -- 10,000,000 shares
Issued and outstanding --
3,753,193 and 3,758,393 shares 375 376
Capital surplus 17,208 17,344
Deficit (2,669) (3,114)
Net unrealized gains (losses) from
marketable equity securities (47) 19
------ ------
Total Stockholders' Equity 14,867 14,625
------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $18,521 $20,446
------- -------
------- -------
</TABLE>
The accompanying notes are an integral
part of these statements.
12
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Year Ended
December 31,
------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues:
Real estate sales $ 2,883 $ 2,900 $ 2,701
Real estate leasing income and
mortgage loan interest 433 630 630
Interest and dividend 222 319 357
Other 12 34 166
----- ----- -----
3,550 3,883 3,854
Costs and Expenses:
Cost of real estate sold 1,493 525 199
Interest 57 76 429
Depreciation and amortization 56 51 51
Operating 211 77 34
General and administrative 1,248 1,504 1,315
Debt issuance costs -- -- 388
----- ----- -----
3,065 2,233 2,416
Gross profit 485 1,650 1,438
Gains (losses) from sales of securities (8) (42) 665
----- ----- -----
Income before income taxes 477 1,608 2,103
Provision for income taxes 32 -- --
----- ----- -----
Net income
$ 445 $ 1,608 $ 2,103
------ ------- -------
------ ------- -------
Net income per share $ .11 $ .41 $ .54
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are an integral
part of these statements.
13
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Common Stock:
Balance at beginning of period $ 376 $ 381 $ 382
Restricted stock grant - par value 4 -- --
Exercise of stock options -- par value 1 -- --
Purchases of common stock -- par value (6) (5) (1)
------- ------- -------
Balance at end of period $ 375 $ 376 $ 381
------- ------- -------
------- ------- -------
Capital Surplus:
Balance at beginning of period $17,344 $17,548 $17,577
Restricted stock grant - excess over par value 170 -- --
Exercise of stock options --
excess over par value 1 -- --
Purchases of common stock --
excess over par value (295) (204) (29)
Purchase of stock option (12) -- --
------- ------- -------
Balance at end of period $17,208 $17,344 $17,548
------- ------- -------
------- ------- -------
Deficit:
Balance at beginning of period $ (3,114) $ (4,722) $ (6,825)
Net income 445 1,608 2,103
------- ------- -------
Balance at end of period $(2,669) $(3,114) $(4,722)
-------- -------- --------
-------- -------- --------
Net Unrealized Gains (Losses) From
Marketable Equity Securities:
Balance at beginning of period $ 19 $ -- $ --
Gain (loss) during period (66) 19 --
------- ------- -------
Balance at end of period $ (47) $ 19 $ --
------ ------- -------
------ ------- -------
</TABLE>
The accompanying notes are an integral part of
these statements.
14
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 445 $ 1,608 2,103
Adjustments to reconcile net income (loss) to
net cash used by operating activities:
(Gains) losses from securities 8 42 (665)
Gains from sales of real estate (1,390) (2,375) (2,502)
Net cash proceeds from sales of real estate 4,785 1,750 3,932
Mortgage loan payments 886 318 140
Real estate financing (100) -- (212)
Real estate development costs (2,366) (2,701) (4,902)
Reimbursement of real estate
development costs 809 929 2,915
Changes in certain assets and liabilities:
Decrease (increase) in receivables (44) 117 7
Increase (decrease) in payables
and accrued liabilities (206) 225 148
Increase (decrease) in deferred income taxes (416) 37 --
Other net (309) 39 86
------ ------ ------
Total adjustments to net income 1,657 (1,619) (1,053)
------ ------ ------
Net cash provided (used)
by operating activities 2,102 (11) 1,050
Cash flows from investing activities:
Proceeds from sales or maturities
of primarily marketable securities 1,481 5,895 8,231
Purchases of marketable securities (208) (4,803) (7,199)
------- ------- -------
Net cash provided by investing activities 1,273 1,092 1,032
Cash flows from financing activities:
Reductions in subordinated debentures (1,371) (7,737) (213)
Purchases of the Company's common stock (301) (209) (30)
Sale of Floating Rate subordinated
debentures due December 31, 1999 -- -- 52
Other (10) -- --
------ ------ ------
Net cash used by financing activities (1,682) (7,946) (191)
-------- -------- --------
Net increase (decrease) in cash
and cash equivalents 1,693 (6,865) 1,891
Cash and cash equivalents at beginning of period 2,975 9,840 7,949
------- ------- -------
Cash and cash equivalents at end of period $ 4,668 $ 2,975 $ 9,840
------- ------- -------
------- ------- -------
Supplemental disclosures of cash flow
information:
Cash paid during the year for
interest (net of amount capitalized) $ 57 $ 205 $ 429
------- ------- -------
------- ------- -------
Non-cash investing and financing activities:
Exchange of Series D and E subordinated
debentures due December 31, 1993 and
May 31, 1994, respectively, for Floating
Rate subordinated debentures due
December 31, 1999 $ -- $ -- $ 776
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are
an integral part of these statements.
15
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly-owned. All significant intercompany
balances have been eliminated.
NOTE B - USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported results of operations during the reporting period. Actual results
could differ from those estimates.
NOTE C - NEW ACCOUNTING PRONOUNCEMENTS
In March, 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed Of" (SFAS 121). The Company adopted
SFAS 121 in the fourth quarter of fiscal 1995. SFAS 121 requires that long-
lived assets be carried at the lower of carrying amount or estimated fair value
and that an evaluation of an individual property for possible impairment must be
performed whenever events or changes in circumstances indicate that an
impairment may have occurred. The specific accounting policies for the various
classes of long-lived assets held by the Company are described in more detail
below.
In October, 1995, the Financial Accounting Standards Board issued SFAS No. 123,
"Accounting for Stock Based Compensation" (SFAS 123). SFAS 123 requires certain
disclosures giving effect to a fair value method of accounting for stock-based
compensation arrangements. The Company intends to implement the disclosure
requirements of SFAS 123 in its Form 10-K for the year ended December 31, 1996,
at which time it will provide data for the comparable 1995 period.
NOTE D - CASH AND CASH EQUIVALENTS
Cash and cash equivalents include short-term investments with original
maturities of 90 days or less, such as treasury bills and notes, government
agency bills and notes, bank deposits, time deposits, certificates of deposit,
repurchase agreements, bankers' acceptances, and commercial paper, all of which
are carried at cost, which approximated market value.
NOTE E - MARKETABLE SECURITIES
In 1994, the Company adopted Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities"(SFAS
115). In adopting SFAS 115, the Company classified its investment in U.S.
Treasury Notes and a corporate bond as "Held to Maturity" and its investment in
the common stock of two corporations as "Available for Sale". SFAS 115 requires
that securities classified as "Held to Maturity" be valued at amortized cost and
that securities classified as "Available for Sale" be carried at fair
16
<PAGE>
value with unrealized gains and losses, net of tax, recorded in stockholders'
equity. The adoption of SFAS 115 resulted in a decrease of $47,000 and an
increase of $19,000 in stockholders' equity at December 31, 1995 and 1994,
respectively, but had no effect on 1995 or 1994 net income. SFAS 115 did not
permit the restatement of prior year amounts. The amortized cost and fair
values of marketable securities as of December 31, were as follows (in
thousands):
<TABLE>
<CAPTION>
1995 1994
------------------------------------- -----------------------------------
Gross Gross Gross Gross
Amortized Realized Unrealized Fair Amortized Unrealized Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value
---- ----- ------ ----- ---- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Securities Held
to Maturity:
U.S. Treasury Notes $ -- $ -- $ -- $ -- $ 987 $ -- $ 45 $ 942
Commercial Bonds -- -- -- -- 501 -- -- 501
-------- -------- -------- -------- -------- -------- -------- ------
$ -- $ -- $ -- $ -- $ 1,488 $ -- $ 45 $1,443
-------- -------- -------- -------- -------- -------- -------- ------
-------- -------- -------- -------- -------- -------- -------- ------
Securities Available
for Sale:
Common Stock $ 585 $ -- $ 47 $ 538 $ 377 $ 19 $ -- $ 396
-------- -------- -------- -------- -------- -------- -------- ------
-------- -------- -------- -------- -------- -------- -------- ------
</TABLE>
Proceeds from sales of securities available for sale were $981,000, $3,168,000,
and $6,634,000 in 1995, 1994 and 1993, respectively. Gross losses of $8,000 and
$42,000 and a gross gain of $665,000 were realized on those sales in 1995, 1994
and 1993, respectively. Gains and losses are computed using the specific
identification method.
NOTE F - MORTGAGE LOANS
Mortgage loans are first mortgages with varying maturities. At December 31,
1995 and 1994, the principal balances of mortgage loans were $732,000, net of
an unamortized discount of $48,000, and $886,000, respectively. Scheduled
principal payments on the mortgage loans outstanding on December 31, 1995 are:
$105,000 in 1997, $14,000 in 1998, $15,000 in 1999 and $646,000 in 2000. The
average effective interest income recorded in 1995 from mortgage loans was
approximately 8.1% of the net carrying value of the loans.
NOTE G - REAL ESTATE RENTAL PROPERTY
Real estate rental property is an office and manufacturing building and
underlying 16 acres of land in Tempe, Arizona. In January 1995, the Company
executed a lease amendment with the original tenant of this property pursuant to
which the tenant vacated portions of the building from time to time and the
lease terminated in its entirety on June 30, 1995. In March 1995, the Company
entered into a new 10-year net lease with Bank One, Arizona, NA, a subsidiary of
Banc One Corporation, as the tenant of the entire property. That lease became
effective March 1, 1995, and provided for the phased occupancy and rental of
space by Bank
17
<PAGE>
One during 1995, with rental of the entire premises commencing January 1, 1996.
As a result of the new lease, the contractual rental revenues are now projected
as follows:
1996 $ 1,452,000
1997 1,628,000
1998 1,707,200
1999 1,826,000
2000 1,848,000
2001 and after 8,175,200
Commencing January 1, 1996, the Company will amortize on a straight-line basis
income from the new lease with Bank One, resulting in annual real estate leasing
income of $1,815,000, and a related $423,000 lease commission with annual
amortization expense of $46,000.
Real estate rental property is carried at cost less accumulated depreciation
which is computed using the straight-line method over the estimated useful lives
of the assets. Real estate rental property for the years ended December 31,
1995 and 1994 was as follows (in thousands):
<TABLE>
<CAPTION>
Accumulated
Cost Depreciation Net
---- ------------ ---
<S> <C> <C> <C>
1995 $4,470 $2,050 $2,420
------ ------ ------
------ ------ ------
1994 $4,470 $1,999 $2,471
------ ------ ------
------ ------ ------
</TABLE>
NOTE H - REAL ESTATE INVENTORY HELD FOR CURRENT SALE AND
LAND HELD FOR FUTURE DEVELOPMENT
Real estate inventory held for current sale and land held for future development
consists primarily of approximately 626 acres in the Company's master-planned,
mixed use development known as Meadow Pointe near Tampa, Florida. The parcels
within this project are in various stages of development. Parcels on which the
Company has completed substantially all of its development activities are
considered to be held for current sale. Parcels on which development is not yet
complete are considered to be held for future development. These assets were
carried at a cost of $9,446,000 at December 31, 1995 and $11,169,000 at December
31, 1994, which the Company believes was less than their fair value. Due to
uncertainties inherent in the valuation process and in the economy, it is
reasonably possible that the actual sales value of the Company's inventory of
land held for current sale and future development could be materially different
than current expectations.
Two community development districts, both local units of Florida special purpose
government, were formed in October 1991 and October 1994, respectively. These
districts, whose jurisdiction is limited to the Meadow Pointe project, together
encompass all of the 1,724 acres within the project. During the period February
1992 through October 1995, the two community development districts issued an
aggregate $54.5 million of capital improvement revenue bonds, including $16.1
million issued in 1995. All of these bonds were issued to finance the
acquisition of property, and the construction of roads, utilities, recreation
facilities and other infrastructure systems.
18
<PAGE>
Approximately $22 million of the capital improvement revenue bonds issued by the
districts are payable in equal annual installments of principal and interest
over 20 years. The balance of the bonds are payable over a fixed term, but must
be prepaid in part each time a developed lot is sold. Annual bond installments
are paid by special assessments levied against individual parcels of land within
the district areas. These special assessments are collected either directly by
the districts or by the Pasco County Assessor, in the same manner as county
property taxes, on behalf of the districts. The outstanding bonds are secured
by a first lien upon and pledge of the special assessments. If any parcel
owner, including the Company's subsidiaries (until such time as their land has
been developed and sold or otherwise transferred), but excluding the districts
and the county, fails to make payment of an assessment, then such owner's parcel
will become subject to a lien which may ultimately be foreclosed for nonpayment.
As of December 31, 1995, parcels of land owned by the Company's subsidiaries
were subject to bonds in the principal amount of approximately $33 million.
The two community development districts have purchased land from one of the
Company's subsidiaries for use in the construction of roads, ponds, conservation
areas and neighborhood parks. The Company has accounted for payments it
received from the two districts in connection with those transactions, as of the
date received, as reductions in the carrying value of all lots and multi-family
units to be developed within the respective district areas, which the Company
currently estimates will be approximately 1,480 lots in the area encompassed by
the first district and 1,370 lots and 1,400 multi-family units in the second
district area. In accordance with this accounting procedure, installment
payments received in 1993 from the first district were treated as a reduction in
the cost of sales reported for prior periods, and the benefits of those
reductions in lot carrying values contributed $574,000 of pre-tax income in
1993.
NOTE I - SUBORDINATED DEBENTURES
At December 31, 1995, $817,000 of the Company's Floating Rate Subordinated
Debentures due December 31, 1999 was outstanding. The interest rate for the
floating rate debentures is variable and equal to 1% above the average monthly
yield on three-month United States Treasury bills, subject to a minimum of 7%
per annum and a maximum of 10% per annum. The average interest rate for these
debentures was 7% for the years ended December 31, 1995 and 1994 and the period
from October 26, 1993, the date of issue, through December 31, 1993.
In connection with a corporate reorganization in June 1987, pursuant to which
the Company took transfer of certain businesses, the Company also assumed
related liabilities, including the obligations with respect to five series of
subordinated debentures. At December 31, 1995, the $2,231,000 of these
debentures still due and outstanding, all of which have matured, was included in
payables and accrued liabilities. At December 31, 1995, the Company had
outstanding a $2,100,000 letter of credit for the benefit of the debenture
trustee in connection with principal payments on two series, the Series D and E
debentures. This letter of credit secures the Company's obligations to pay the
outstanding principal of, and accrued interest on, those debentures upon
presentment thereof in accordance with the indenture governing the debentures.
19
<PAGE>
NOTE J - INCOME TAXES
As of December 31, 1995 and 1994, the Company had recorded the following net
deferred tax liabilities. Amounts at December 31, 1994 have been adjusted to
conform to the Company's 1994 federal income tax returns as filed in September
1995.
<TABLE>
<CAPTION>
Tax Effect (in thousands)
------------------------
December 31, 1995 December 31, 1994
----------------- -----------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $ 4,139 $ 4,093
Net capital loss carryforwards -- 126
Land basis 796 781
Effect of accelerated depreciation (162) (139)
Other 101 321
------- -------
4,874 5,182
Less: valuation allowance (4,874) (5,182)
------- -------
Deferred tax assets net of
valuation allowance - -
Deferred tax liabilities (16) (432)
------- -------
Net deferred tax liabilities $ (16) $ (432)
------- -------
------- -------
</TABLE>
The Company did not include a provision for federal income taxes in the
consolidated statement of operations for the years ended December 31, 1995, 1994
and 1993 because it realized the benefits, respectively, of $308,000, $624,000
and $784,000 of deferred tax assets. The $32,000 provision for income taxes for
the year ended December 31, 1995, consists of state income taxes payable.
Following is a reconciliation from the expected federal statutory income tax
rate to the effective tax rate, expressed as a percentage of pre-tax income, for
the years ended December 31, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Expected federal statutory
income tax rate rate 34.0% 34.0% 34.0%
State income taxes, net
of federal tax benefit 4.6 4.6 5.3
Utilization of deferred tax assets (31.9) (38.6) (37.0)
Other -- -- (2.3)
---- ---- ----
Effective tax rate 6.7% --% --%
---- ---- ----
---- ---- ----
</TABLE>
20
<PAGE>
At December 31, 1995, the Company had net operating loss carryforwards of
approximately $12,600,000 for financial reporting purposes. Due to temporary
differences, at December 31, 1995, the Company had available for federal income
tax purposes unused operating loss carryforwards of approximately $10,700,000
which expire as follows (in thousands):
<TABLE>
<CAPTION>
Year of Expiration
------------------
<S> <C> <C>
2002 $ 1,800
2003 1,100
2004 700
2005 500
2006 700
2007 1,500
2008 2,100
2009 2,200
2010 100
------
$10,700
------
------
</TABLE>
NOTE K - RENTAL COMMITMENTS
Rental expense, primarily for office premises, amounted to $53,000, $89,000 and
$81,000 for the years ended December 31, 1995, 1994 and 1993, respectively. As
of December 31, 1995, the approximate minimum rental commitments under the
Company's office lease, which expires on January 31, 1999, were $47,000 in each
of 1996, 1997 and 1998 and $4,000 in 1999.
NOTE L - STOCKHOLDERS' EQUITY
From time to time, the Company purchases shares of its common stock in the open
market. In 1995, 1994 and 1993 the Company purchased shares of its common
stock, primarily in open market transactions: 56,200 shares for $301,000 in
1995; 52,460 shares for $209,000 in 1994; and 10,000 shares for $30,000 in 1993.
NOTE M - STOCK PLANS
The Company's 1993 Long-Term Equity Incentive Plan (the "1993 Employee Plan")
provides for the granting of non-qualified stock options, incentive stock
options, stock appreciation rights, restricted stock, stock purchase rights and
performance shares to employees, who may also be directors, and consultants of
the Company. The Company's Amended and Restated Management Incentive
Compensation Plan (the "Original Employee Plan") governs certain non-qualified
stock options issued to officers and employees prior to adoption of the 1993
Employee Plan; no new grants of options or other stock rights may be made under
the Original Employee Plan. The Company's 1994 Stock Option Plan for Outside
Directors (the "1994 Director Plan"), provides for the grant of stock options to
those of its directors who are not employed by the Company (the "Outside
Directors").
21
<PAGE>
The 1993 Employee Plan and the Original Employee Plan are administered by the
Board of Directors or a committee (the "Committee"), composed of not less than
two directors who are disinterested persons (as that term is defined in Rule
16b-3, promulgated pursuant to the Securities Exchange Act of 1934). The
Committee selects participants in the 1993 Employee Plan and determines the
number of shares subject to the options and other stock rights granted pursuant
to that plan, and the terms of those options and other rights. As of March 1,
1996, there were 137,500 shares of the Company's common stock available for
grant under the 1993 Employee Plan.
The 1994 Director Plan replaced the Company's Non-Employee Directors' Option
Plan (the "Original Director Plan"). Under the Original Director Plan, each
Outside Director was automatically granted, upon election as a director, a
non-qualified option for 5,000 shares of the Company's common stock. The
remaining non-qualified options, for 5,000 shares each, which were granted under
the Original Director Plan were exercised by the two current Outside Directors
in 1995. No new options may be granted under the Original Director Plan.
Pursuant to the 1994 Director Plan, approved by the Company's stockholders in
May 1994, each of the two current Outside Directors was granted, immediately
upon such approval, a non-qualified option to purchase 5,000 shares of the
Company's common stock; and any person who subsequently becomes an Outside
Director will be granted such an option on the date of his or her election or
appointment as an Outside Director. Each of the two current Outside Directors
also was granted a non-qualified option to purchase 2,000 shares of the
Company's common stock on the date of the 1995 annual meeting of stockholders,
May 22, 1995, and each Outside Director who has served as such for at least one
year will also receive an option to purchase 2,000 shares of the Company's
common stock on the date of each annual meeting of stockholders at which he or
she is reelected a director. All options granted pursuant to the 1994 Director
Plan will have a per share exercise price equal to the fair market value of the
Company's common stock on the grant date. As of March 1, 1996, there were
86,000 shares of the Company's common stock available for grant under the 1994
Director Plan.
The following table describes stock options granted, cancelled, purchased and
exercised from January 1, 1993 through December 31, 1995, and the exercise
prices.
<TABLE>
<CAPTION>
Number of Shares Exercise Price
Subject to Options Per Share
------------------ ----------
<S> <C> <C>
Outstanding January 1, 1993 288,000 $.22 - $9.125
Granted 221,500 $2.875
Cancelled (10,000) $9.125
--------
Outstanding December 31, 1993 499,500 $.22 - $2.875
Granted 10,000 $3.875
--------
Outstanding December 31, 1994 509,500 $.22 - $3.875
Granted 104,000 $4.75 - $5.875
Exercised (10,000) $.22
Purchased (5,000) $2.50
--------
Outstanding December 31, 1995 598,500 $2.50 - $5.875
--------
--------
</TABLE>
In January 1995, five officers of the Company were issued an aggregate of 41,000
shares of restricted stock pursuant to the 1993 Employee Plan.
22
<PAGE>
NOTE N - INCOME PER SHARE
Income per share for the years ended December 31, 1995, 1994 and 1993 has been
computed using the weighted average number of shares of common stock and common
stock equivalents outstanding. The weighted average number of common shares and
common stock equivalents outstanding for the years ended December 31, 1995, 1994
and 1993 was 4,029,000, 3,947,000 and 3,895,000, respectively.
23
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
The information required by Items 10 through 13 of this Part is
incorporated by reference from the Company's Proxy Statement, under the captions
"Nomination and Election of Directors," "Beneficial Stock Ownership," and
"Compensation of Executive Officers and Directors," which Proxy Statement will
be mailed to stockholders in connection with the Company's annual meeting of
stockholders which is scheduled to be held in May 1996.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. Financial Statements
The following consolidated financial statements of BF Enterprises, Inc.
and its subsidiaries are included in Item 8 of this report:
Report of independent public accountants.
Consolidated statements of financial position at December 31, 1995
and 1994.
Consolidated statements of operations for the years ended December
31, 1995, 1994 and 1993.
Consolidated statements of stockholders' equity for the years ended
December 31, 1995, 1994 and 1993.
Consolidated statements of cash flows for the years ended December
31, 1995, 1994 and 1993.
Notes to financial statements.
Selected quarterly financial data for the years ended December 31,
1995 and 1994 have not been included in the notes to the financial
statements as they were not required.
(a) 2. Financial Statement Schedules
Report of independent public accountants on supporting schedules.
III - Real estate and accumulated depreciation
IV - Mortgage loans on real estate
Schedules I, II and V have been omitted as they are inapplicable.
24
<PAGE>
(a) 3. Exhibits
Exhibit
Number Description
- ------ -----------
3.1 Restated Certificate of Incorporation - incorporated by reference
to Exhibit 3 (a) to Amendment No. 1 on Form 8 to the registrant's
Form 10 registration statement, filed with the Securities and
Exchange Commission on June 23, 1987.
3.2 By-Laws - incorporated by reference to Exhibit 3 (b) to the
registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989.
4.1 Restated Certificate of Incorporation (filed as Exhibit 3.1).
4.2 By-Laws (filed as Exhibit 3.2).
4.3 Specimen common stock certificate - incorporated by reference to
Exhibit 4 (c) to Amendment No. 1 on Form 8 to the registrant's Form
10 registration statement, filed with the Securities and Exchange
Commission on June 23, 1987.
4.4 Indenture dated as of October 1, 1972, as amended, between IDS
Realty Trust and First National Bank of Minneapolis - incorporated
by reference to Exhibits 6(t) and 6(v) to the Form S-14
Registration Statement of Boothe Financial Corporation (formerly
known as Boothe Interim Corporation and now known as Robert Half
International Inc.) filed with the Securities and Exchange
Commission on December 31, 1979.
4.5 Indenture, dated as of October 26, 1993, between the registrant and
American National Bank and Trust Company, as Trustee for the
registrant's Floating Rate Subordinated Debentures due December 31,
1999 - incorporated by reference to Exhibit 4.5 to the registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1993.
4.6 Specimen certificate for the registrant's Floating Rate
Subordinated Debentures due December 31, 1999 - incorporated by
reference to Exhibit 4.6 to the registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 1993.
10.1 Reorganization and Distribution Agreement between the registrant
and Boothe Financial Corporation (now known as Robert Half
International Inc.), as amended and restated as of June 15, 1987 -
incorporated by reference to Exhibit 2 to Amendment No. 2 on Form 8
to the registrant's Form 10 registration statement, filed with the
Securities and Exchange Commission on July 17, 1987.
10.2 Pledge and Security Agreement between the registrant and Boothe
Financial Corporation (now known as Robert Half International
Inc.), dated as of June
25
<PAGE>
15, 1987 - incorporated by reference to Exhibit 10 (b) to the
registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987.
10.3 Tax Sharing Agreement between the registrant and Boothe Financial
Corporation (now know as Robert Half International Inc.), dated as
of June 15, 1987 - incorporated by reference to Exhibit 10 (c) to
the registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987.
10.4 Agreement of Assignment and Assumption of Rights under the
Indenture, dated June 15, 1987, between the registrant and Boothe
Financial Corporation (now known as Robert Half International Inc.)
- incorporated by reference to Exhibit 10 (f) to the registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1987.
10.5 Assumption of Obligations and Liabilities, dated June 15, 1987,
between the registrant and Boothe Financial Corporation (now known
as Robert Half International Inc.) - incorporated by reference to
Exhibit 10 (g) to the registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987.
*10.6 Amended and Restated Management Incentive Compensation Plan of the
registrant - incorporated by reference to Exhibit 10.9 to the
registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991.
*10.7 Non-Employee Directors' Option Plan of the registrant, as amended -
incorporated by reference to Exhibit 10 (j) to the registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1989.
*10.8 The registrant's 1993 Long-Term Equity Incentive Plan -
incorporated by reference to Exhibit 10.8 to the registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1992.
*10.9 The registrant's 1994 Stock Option Plan for Outside Directors -
incorporated by reference to Exhibit 10.9 to the registrant's
Quarterly Report on Form 10-Q for the quarterly period ended June
30, 1994.
*10.10a Employment Agreement between the registrant and Brian P. Burns,
dated as of November 30, 1992 - incorporated by reference to
Exhibit 10.15 to the registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992.
*10.10b Amendment to Employment Agreement between the registrant and Brian
P. Burns, dated as of December 28, 1995.
*10.11 Employment Agreement by and between the registrant and Paul
Woodberry, dated as of December 22, 1992 - incorporated by
reference to Exhibit 10.16 to the registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992.
26
<PAGE>
*10.12a The registrant's Profit Sharing Plan, as amended and restated
effective July 1, 1989 - incorporated by reference to Exhibit 10.9
to the registrant's Registration Statement on Form S-1 and Form S-4
(Registration No. 33-56290) filed with the Securities and
Exchange Commission on December 24, 1992.
*10.12b First Amendment of the registrant's Profit Sharing Plan, adopted
December 12, 1994 - incorporated by reference to Exhibit 10.12 (b)
to the registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994.
*10.12c Second Amendment of the registrant's Profit Sharing Plan, adopted
March 31, 1995.
*10.13 Amended Trust Agreement, under the registrant's Profit Sharing
Plan, dated September 7, 1992, between the registrant and John M.
Price, as trustee - incorporated by reference to Exhibit 10.10 to
the registrant's Registration Statement on Form S-1 and Form S-4
(Registration No. 33-56290) filed with the Securities and Exchange
Commission on December 24, 1992.
10.14 Amended and Restated Letter of Credit Reimbursement Agreement,
dated April 30, 1994, among IBJ Schroder Bank & Trust Company, the
registrant and the registrant's wholly-owned subsidiary, Boothe
Financial Corporation - incorporated by reference to Exhibit 10.14
to the registrant's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1994.
10.15 Loan and Security Agreement, dated April 30, 1994, executed by the
registrant and its wholly-owned subsidiary, Boothe Financial
Corporation, in favor of IBJ Schroder Bank & Trust Company -
incorporated by reference to Exhibit 10.15 to the registrant's
Quarterly Report on Form 10-Q for the quarterly period ended June
30, 1994.
10.16a Amended and Restated Lease regarding certain premises at 1515 W.
14th St., Tempe, Arizona dated as of March 31, 1978, by and between
Boothe Financial Corporation (formerly known as Boothe Courier
Corporation and now known as Robert Half International Inc., the
registrant's predecessor in interest to the property subject to the
lease), and ITT Systems, Inc. (formerly known as Courier Terminal
Systems, Inc.), as amended - incorporated by reference to Exhibit
10 (r) to Amendment No. 2 on Form 8 to the registrant's Form 10
registration statement, filed with the Securities and Exchange
Commission on July 17, 1987.
10.16b Second Amendment of Amended and Restated Lease, regarding premises
at 1515 W. 14th Street, Tempe, Arizona, dated as of January 25,
1995, by and between the registrant, as landlord, and Idea Courier
Incorporated, as tenant - incorporated by reference to Exhibit
10.16 (b) to the registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994.
10.16c Assignment and Assumption of Lease with Idea Courier Incorporated,
between the registrant, as assignor, and Bank One, Arizona, NA, as
assignee - incorporated by reference to Exhibit 10.16 (c) to the
registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
27
<PAGE>
10.17 Lease, regarding premises at 1515 W. 14th Street, Tempe, Arizona,
dated as of March 1, 1995, between the registrant, as landlord, and
Bank One, Arizona, NA, as tenant - incorporated by reference to
Exhibit 10.17 to the registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
10.18 Advisory Fee Agreement, effective as of March 1, 1995, between the
registrant and CB Commercial Real Estate Group, Inc. - incorporated
by reference to Exhibit 10.18 to the registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994.
10.19 Development and Management Agreement, dated as of March 1, 1991,
between Trout Creek Development Corporation, a wholly-owned
subsidiary of the registrant, and DEVCO II Corporation -
incorporated by reference to Exhibit 10.20 (a) to the registrant's
Form 8-K report dated March 14, 1991, filed with the Securities and
Exchange Commission on March 15, 1991.
10.20 Guarantee, dated as of March 1, 1991, by the registrant -
incorporated by reference to Exhibit 10.20 (b) to the registrant's
Form 8-K report dated March 14, 1991, filed with the Securities and
Exchange Commission on March 15, 1991.
10.21a Office Lease, dated as of March 26, 1990, between Bush Street
Limited Partnership, as landlord, and the registrant, as tenant -
incorporated by reference to Exhibit 10.24 (a) to the registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1990.
10.21b Lease Extension Agreement, dated as of January 19, 1995, between
JMB Group Trust IV, as landlord, and the registrant, as tenant -
incorporated by reference to Exhibit 10.21 (b) to the registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1994.
10.22 Property Acquisition Agreement, dated as of September 25, 1995,
between Meadow Pointe II Community Development District and Trout
Creek Properties, Inc., a wholly-owned subsidiary of the
registrant.
11 Statement re computation of per share earnings.
21 Subsidiaries of the registrant.
- ----------------------------------
* Management contract or compensatory plan required to be filed as an exhibit
pursuant to Item 14 (c) of Form 10-K.
28
<PAGE>
(b) Reports on Form 8-K
The registrant did not file any report on Form 8-K during the last
quarter of the period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BF ENTERPRISES, INC.
--------------------
(Registrant)
Date: March 25, 1996 By: /s/ John M. Price
-------------------------
John M. Price
Senior Vice President,
General Counsel, Secretary
and Treasurer
29
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C>
Date: March 25, 1996 By: /s/ Brian P. Burns
---------------------------------
Brian P. Burns
Chairman of the Board of Directors,
President and Chief Executive Officer
(Principal Executive Officer)
Date: March 25, 1996 By: /s/ Paul Woodberry
---------------------------------
Paul Woodberry
Executive Vice President,
Chief Financial Officer and a Director
(Principal Financial Officer)
Date: March 25, 1996 By: /s/ Ralph T. McElvenny, Jr.
---------------------------------
Ralph T. McElvenny, Jr., Director
Date: March 25, 1996 By: /s/ Charles E.F. Millard
---------------------------------
Charles E.F. Millard, Director
Date: March 25, 1996 By: /s/ S. Douglas Post
---------------------------------
S. Douglas Post, Vice President and
Controller
(Principal Accounting Officer)
</TABLE>
30
<PAGE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
BF ENTERPRISES, INC. AND SUBSIDIARIES
December 31, 1995
(Thousands of dollars)
<TABLE>
<CAPTION>
Cost Capitalized
Initial Cost to Company Subsequent to Acquisition
------------------------ -------------------------
Buildings and Carrying
Description Encumbrances Land Improvements Improvements Costs
----------- ------------ ---- ------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Office and
Manufacturing
Building -
Tempe, Arizona -- $736 $ 3,734 -- --
---- -------
---- -------
<CAPTION>
Life on
Which
Gross Amount at Which Depreciation
Carried at Close of Period in Latest
-------------------------- Statements
of
Buildings and Accumulated Date of Date Operations
Description Land Improvements Total Depreciation Construction Acquired is Computed
----------- ---- ------------- ----- ------------ ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Office and
Manufacturing
Building -
Tempe, Arizona $736 $ 3,734 $4,470 $ 2,050 1977 1977 40 Years
---- ------- ------ -------
---- ------- ------ -------
</TABLE>
Notes:
(1) For Federal income tax purposes at December 31, 1995, real estate was
carried at a cost of $2,000,000.
(2) Reconciliation of "Real Estate and Accumulated Depreciation":
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------------------
1995 1994 1993
-------------------------- ------------------------- -------------------------
Investment Amount Accumulated Investment Amount Accumulated Investment Amount Accumulated
Depreciation Depreciation Depreciation
----------------- ------------ ----------------- ------------ ----------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at
beginning of
year $ 4,470 $ 1,999 $ 4,470 $ 1,948 $ 4,470 $ 1,897
Addition -
Depreciation
charged to
costs &
expenses 51 51 51
------- ------- ------- ------- ------- -------
Balance at end
of year $ 4,470 $ 2,050 $ 4,470 $ 1,999 $ 4,470 $ 1,948
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
</TABLE>
31
<PAGE>
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
BF ENTERPRISES, INC. AND SUBSIDIARIES
December 31, 1995
(Thousands of dollars)
<TABLE>
<CAPTION>
Principal
Amount
of Loans
Subject to
Final Carrying Amount Delinquent Balloon
Maturity Prior Face Amount of of Principal or Payment at
Description Interest Rate Date Liens Mortgages Mortgages Interest Maturity
- ----------- ------------- -------- ----- -------------- --------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
First Mortgages:
- ---------------
Office Building -
Edina, Minnesota 8% 2000 none $ 680 (1) $ 632 none $ 637
Land and Land Development -
Tampa, Florida 9% 1997 none 100 (2) 100 none 100
----- -----
Totals $ 780 $ 732
----- -----
----- -----
</TABLE>
Notes:
(1) Level principal and interest payments until maturity. Payments
commence on August 1, 1997.
(2) Interest only until maturity.
(3) For Federal income tax purposes at December 31, 1995, mortgage loans
on real estate was carried at an aggregate cost of $732,000.
(4) Reconciliation of "Mortgage Loans on Real Estate":
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $ 886 $ 1,204 $ 1,815
Additions during year:
New mortgage loans 732 212
------ ------- ------
1,618 1,204 2,027
Deductions during year:
Collection of principal 886 318 140
Foreclosure 683
------ ------- ------
Balance at end of year $ 732 $ 886 $ 1,204
------ ------- ------
------ ------- ------
</TABLE>
32
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
Number Page Numbers
- ------- ------------
3.1 Restated Certificate of Incorporation - incorporated by
reference to Exhibit 3 (a) to Amendment No. 1 on Form 8 to
the registrant's Form 10 registration statement, filed with the
Securities and Exchange Commission on June 23, 1987.
3.2 By-Laws - incorporated by reference to Exhibit 3 (b) to the
registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989.
4.1 Restated Certificate of Incorporation (filed as Exhibit 3.1).
4.2 By-Laws (filed as Exhibit 3.2).
4.3 Specimen common stock certificate - incorporated by
reference to Exhibit 4 (c) to Amendment No. 1 on Form 8 to
the registrant's Form 10 registration statement, filed
with the Securities and Exchange Commission on June 23, 1987.
4.4 Indenture dated as of October 1, 1972, as amended,
between IDS Realty Trust and First National Bank of
Minneapolis - incorporated by reference to Exhibits 6(t)
and 6(v) to the Form S-14 Registration Statement of
Boothe Financial Corporation (formerly known as Boothe Interim
Corporation and now known as Robert Half International
Inc.) filed with the Securities and Exchange Commission
on December 31, 1979.
4.5 Indenture, dated as of October 26, 1993, between the
registrant and American National Bank and Trust Company,
as Trustee for the registrant's Floating Rate Subordinated
Debentures due December 31, 1999 - incorporated by reference
to Exhibit 4.5 to the registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 1993.
4.6 Specimen certificate for the registrant's Floating Rate
Subordinated Debentures due December 31, 1999 - incorporated
by reference to Exhibit 4.6 to the registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended
September 30, 1993.
10.1 Reorganization and Distribution Agreement between the
registrant and Boothe Financial Corporation (now known as
Robert Half International Inc.), as amended and restated
as of June 15, 1987 - incorporated by reference to Exhibit 2 to
Amendment No. 2 on Form 8 to the registrant's Form 10
registration statement, filed with the Securities and Exchange
Commission on July 17, 1987.
10.2 Pledge and Security Agreement between the registrant and
Boothe Financial Corporation (now known as Robert Half
International Inc.), dated as of June 15, 1987 -
incorporated by reference to Exhibit 10 (b) to the
registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987.
33
<PAGE>
Exhibit Sequential
Number Page Number
- ------- -----------
10.3 Tax Sharing Agreement between the registrant and Boothe
Financial Corporation (now know as Robert Half International
Inc.), dated as of June 15, 1987 - incorporated by
reference to Exhibit 10 (c) to the registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1987.
10.4 Agreement of Assignment and Assumption of Rights under
the Indenture, dated June 15, 1987, between the registrant
and Boothe Financial Corporation (now known as Robert Half
International Inc.) - incorporated by reference to Exhibit
10 (f) to the registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987.
10.5 Assumption of Obligations and Liabilities, dated June 15,
1987, between the registrant and Boothe Financial Corporation
(now known as Robert Half International Inc.) - incorporated
by reference to Exhibit 10 (g) to the registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1987.
*10.6 Amended and Restated Management Incentive Compensation
Plan of the registrant - incorporated by reference to
Exhibit 10.9 to the registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991.
*10.7 Non-Employee Directors' Option Plan of the registrant,
as amended - incorporated by reference to Exhibit 10 (j)
to the registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989.
*10.8 The registrant's 1993 Long-Term Equity Incentive Plan -
incorporated by reference to Exhibit 10.8 to the
registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992.
*10.9 The registrant's 1994 Stock Option Plan for Outside
Directors - incorporated by reference to Exhibit 10.9 to the
registrant's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1994.
*10.10a Employment Agreement between the registrant and Brian P.
Burns, dated as of November 30, 1992 - incorporated by
reference to Exhibit 10.15 to the registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1992.
*10.10b Amendment to Employment Agreement between the registrant 37
and Brian P. Burns, dated as of December 28, 1995.
*10.11 Employment Agreement by and between the registrant and Paul
Woodberry, dated as of December 22, 1992 - incorporated
by reference to Exhibit 10.16 to the registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992.
*10.12a The registrant's Profit Sharing Plan, as amended and
restated effective July 1, 1989 - incorporated by reference
to Exhibit 10.9 to the registrant's Registration Statement on
Form S-1 and Form S-4 (Registration No. 33-56290) filed with the
Securities and Exchange Commission on December 24, 1992.
34
<PAGE>
Exhibit Sequential
Number Page Number
- ------- -----------
*10.12b First Amendment of the registrant's Profit Sharing Plan,
adopted December 12, 1994 - incorporated by reference to
Exhibit 10.12 (b) to the registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994.
*10.12c Second Amendment of the registrant's Profit Sharing Plan, 38
adopted March 31, 1995.
*10.13 Amended Trust Agreement, under the registrant's Profit
Sharing Plan, dated September 7, 1992, between the
registrant and John M. Price, as trustee - incorporated
by reference to Exhibit 10.10 to the registrant's Registration
Statement on Form S-1 and Form S-4 (Registration No. 33-56290)
filed with the Securities and Exchange Commission on
December 24, 1992.
10.14 Amended and Restated Letter of Credit Reimbursement
Agreement, dated April 30, 1994, among IBJ Schroder Bank &
Trust Company, the registrant and the registrant's
wholly-owned subsidiary, Boothe Financial Corporation -
incorporated by reference to Exhibit 10.14 to the registrant's
Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1994.
10.15 Loan and Security Agreement, dated April 30, 1994, executed
by the registrant and its wholly-owned subsidiary, Boothe
Financial Corporation, in favor of IBJ Schroder Bank &
Trust Company - incorporated by reference to Exhibit 10.15
to the registrant's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1994.
10.16a Amended and Restated Lease regarding certain premises
at 1515 W. 14th St., Tempe, Arizona dated as of March 31,
1978, by and between Boothe Financial Corporation (formerly
known as Boothe Courier Corporation and now known as Robert Half
International Inc., the registrant's predecessor in
interest to the property subject to the lease), and ITT
Systems, Inc. (formerly known as Courier Terminal Systems,
Inc.), as amended - incorporated by reference to Exhibit 10 (r)
to Amendment No. 2 on Form 8 to the registrant's
Form 10 registration statement, filed with the Securities
and Exchange Commission on July 17, 1987.
10.16b Second Amendment of Amended and Restated Lease, regarding
premises at 1515 W. 14th Street, Tempe, Arizona, dated as
of January 25, 1995, by and between the registrant, as
landlord, and Idea Courier Incorporated, as tenant -
incorporated by reference to Exhibit 10.16 (b) to the registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
10.16c Assignment and Assumption of Lease with Idea Courier
Incorporated, between the registrant, as assignor, and Bank
One, Arizona, NA, as assignee - incorporated by reference to
Exhibit 10.16 (c) to the registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994.
10.17 Lease, regarding premises at 1515 W. 14th Street, Tempe,
Arizona, dated as of March 1, 1995, between the registrant, as
landlord, and Bank One, Arizona, NA, as tenant - incorporated
by reference to Exhibit 10.17 to the registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994.
35
<PAGE>
Exhibit Sequential
Number Page Number
- ------- -----------
10.18 Advisory Fee Agreement, effective as of March 1, 1995,
between the registrant and CB Commercial Real Estate Group,
Inc. - incorporated by reference to Exhibit 10.18 to the
registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994.
10.19 Development and Management Agreement, dated as of March 1,
1991, between Trout Creek Development Corporation, a
wholly-owned subsidiary of the registrant, and DEVCO II
Corporation - incorporated by reference to Exhibit 10.20 (a)
to the registrant's Form 8-K report dated March 14, 1991,
filed with the Securities and Exchange Commission on March
15, 1991.
10.20 Guarantee, dated as of March 1, 1991, by the registrant -
incorporated by reference to Exhibit 10.20 (b) to the
registrant's Form 8-K report dated March 14, 1991, filed with
the Securities and Exchange Commission on March 15, 1991.
10.21a Office Lease, dated as of March 26, 1990, between Bush
Street Limited Partnership, as landlord, and the registrant,
as tenant - incorporated by reference to Exhibit 10.24 (a)
to the registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
10.21b Lease Extension Agreement, dated as of January 19, 1995,
between JMB Group Trust IV, as landlord, and the registrant,
as tenant - incorporated by reference to Exhibit 10.21 (b) to
the registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994.
10.22 Property Acquisition Agreement, dated as of September 39-43
25, 1995, between Meadow Pointe II Community Development
District and Trout Creek Properties, Inc., a wholly-owned
subsidiary of the registrant.
11 Statement re computation of per share earnings. 44
21 Subsidiaries of the registrant. 45
- -------------------------
* Management contract or compensatory plan required to be filed as an
exhibit pursuant to Item 14 (c) of Form 10-K.
36
<PAGE>
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement is made and entered into as of
December 28, 1995 by and between BF ENTERPRISES, INC., a Delaware corporation
("Corporation"), and BRIAN P. BURNS ("Officer").
RECITALS
A. Officer is employed by Corporation, as Chairman of the Board of
Directors and Chief Executive Officer, pursuant to an Employment Agreement dated
November 30, 1992 (the "Employment Agreement").
B. Corporation and Officer desire to amend the Employment Agreement.
AGREEMENT
THE PARTIES AGREE AS FOLLOWS:
1. Section 3.1 of the Employment Agreement is amended in its entirety to
provide as follows:
3.1 BASE SALARY. As payment for the services to be rendered by Officer as
provided in Section 1 and subject to the terms and conditions of Section 2,
Corporation agrees to pay to Officer a "Base Salary" at the rate of $240,000 per
annum, payable in equal semi-monthly installments, commencing January 1, 1996.
2. This Amendment to Employment Agreement shall be effective January 1,
1996.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Employment Agreement as of the day and year first above written.
BF ENTERPRISES, INC.
By /s/ John M. Price
-----------------
John M. Price
Senior Vice President
/s/ Brian P. Burns
------------------
Brian P. Burns
<PAGE>
SECOND AMENDMENT OF THE
BF ENTERPRISES, INC.
PROFIT SHARING PLAN
(As Amended and Restated Effective January 1, 1989)
WHEREAS, BF Enterprises, Inc. (the "Company") adopted an amended and
restated profit sharing plan effective January 1, 1989 (the "Plan"); and
WHEREAS, the Company retained the right to amend the Plan under Article XI
thereof;
NOW, THEREFORE, effective as of March 1, 1995, Section 10.2(a) of the Plan
is amended in part as follows:
1. Subsection 10.2(a)(2) is amended to read in full as follows:
(2) Loans other than (i) loans to Participants made in accordance with
Section 6.4 and applicable law, and (ii) loans secured by first trust deeds;
2. Subsection 10.2(a)(4) is amended to read in full as follows:
(4) Real estate, except as may result from interests in first trust deeds;
3. Subsection 10.2(a)(6) is amended to read in full as follows:
(6) Partnership interests, except for limited partnership interests in
partnerships formed for the purpose of investing (i) in publicly traded
securities without incurring indebtedness with respect to the acquisition of
such securities or becoming a dealer in such securities and provided that the
underlying investments of the partnership are not expected to be treated as
assets of the Plan under regulations promulgated by the U.S. Department of
Labor, or (ii) in loans secured by first trust deeds;
TO RECORD THE ADOPTION OF THIS SECOND AMENDMENT OF THE PLAN, the Company
has caused this document to be executed by a duly authorized officer this 31st
day of March, 1995.
BF ENTERPRISES, INC.
By:/s/John Price
-----------------
<PAGE>
PROPERTY ACQUISITION AGREEMENT
This is an Agreement, dated as of September 25, 1995, between Trout
Creek Properties, Inc., a Delaware corporation (the "Owner") and the Meadow
Pointe II Community Development District, a local unit of special purpose
government organized and existing under Chapter 190, Florida Statutes (1993)
(the "District"). Unless otherwise defined herein, all capitalized terms in
this Agreement shall have the meanings ascribed to them in the Trust Indenture,
dated as of October 1, 1995 (the "Indenture"), between the District and [Trustee
Name], as Trustee.
RECITALS
WHEREAS, the District has determined that it is in the best interests of
the present and future landowners within the District to construct and deliver
certain community development services and facilities within the District,
including, without limitation, an internal roadway system, recreational
facilities, a sewage collection system and related facilities, drainage control
facilities, a stormwater management system and facilities, a water transmission
system, and master entryways and landscaping (such facilities, systems, and
improvements are more specifically described in the plans and specifications on
file at the registered office of the District and are collectively referred to
hereafter as the "Project"); and
WHEREAS, an affiliate of the Owner, Trout Creek Development Corporation,
a Delaware corporation (the "Developer") intends to develop and sell
residential and commercial properties within the District which will be
benefitted by the Project.
WHEREAS, the Owner owns certain lands within the District, more
particularly described on Exhibit "A" attached hereto (the "Lands"), which must
be acquired by the District in order to construct, operate and maintain portions
of the Project thereon; and
WHEREAS, subject to the terms and conditions hereof, the District wishes
to acquire the Lands from the Owner, and the Owner wishes to convey the Lands to
the District; and
WHEREAS, the District proposes to issue its Capital Improvement Revenue
Bonds, Series 1995 (the "Bonds"), to finance the costs of acquiring the Lands
and to finance the acquisition and construction of the remainder of the Project;
and
WHEREAS, the Bonds shall be paid by special assessments, levied against
the lands within the District which will be benefitted by the Project to be
constructed and maintained by the District.
<PAGE>
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for $10.00 and other good and valuable consideration, receipt of
which is hereby acknowledged, the parties agree as follows:
1. CONVEYANCE OF LANDS. On the Closing Date (as hereafter defined),
the Owner shall convey to the District fee simple title to the Lands, provided,
however, that the Lands shall be used for the construction, operation and
maintenance of the Project. The conveyance shall be by special warranty deed,
in recordable form, subject only to title exceptions which will not have a
material adverse effect upon the construction, operation, and maintenance of the
Project as determined by the District in its sole and absolute discretion
(collectively, the "Acceptable Encumbrances").
2. AGREEMENT TO CONVEY OR DEDICATE. On the Closing Date, the Owner
shall also execute and deliver to the District, in recordable form, an Agreement
to Convey or Dedicate to the District all other easements, tracts, and rights-
of-way that are required to construct, operate, and maintain the Project.
3. TITLE. On or before the Closing, the Owner shall deliver a title
opinion to the District in form and substance acceptable to the District. Upon
request by the District, the Owner shall also, at is expense, provide the
District with a title insurance policy in favor of the District for the Lands.
The title insurance policy shall be issued by a qualified title insurer,
licensed in the State of Florida, and shall be in an amount equal to the
purchase price for the Lands as determined below. The policy shall provide
that upon recordation of the special warranty deed, the title insurer shall
issue to the District an owner's policy of title insurance which insures title
to the Lands, subject only to the Acceptable Encumbrances.
4. PURCHASE PRICE. From available proceeds of the Bonds and in
accordance with the terms of the Indenture pursuant to which the Bonds are
issued, the District shall pay to the Developer as total payment, for (i) the
Lands, and (ii) the Agreement to Convey or Dedicate, the sum of $3,185,000,
which represent the current fair market value of the Lands as determined by
2
<PAGE>
R/E Marketing Consultants, Inc., a licensed and qualified professional real
estate appraiser. The conveyance of the Lands, the delivery of the Agreement to
Convey or Dedicate, and the District's payment for same, shall be in accordance
with the terms of the Indenture, which is specifically incorporated herein by
reference and made a part hereof.
5. CLOSING. The closing shall be held at the office of Annis,
Mitchell, Cockey, Edwards & Roehn, P.A. Bond Counsel for the District. The
closing shall occur on October 3, 1995, or at such other time or place as may be
agreeable to the parties (the "Closing Date"). At the closing, the Owner shall
deliver to the District the following documents, each fully executed, witnessed,
and acknowledged as required: (i) a special warranty deed for the Lands; (ii)
the Agreement to Convey or Dedicate; (iii) a title opinion from the Owner in
accordance with Section 3; (iv) a closing affidavit; and (v) a closing
statement.
6. CLOSING EXPENSES AND TAX PRORATION. The Owner shall pay Florida
documentary stamps on the special warranty deed to the Lands. The District
shall pay for recording the deed. Current real property taxes not yet due and
owing shall be prorated as of the Closing Date.
7. RECONVEYANCES TO THE OWNER. Although the legal description of
the Lands is intended to describe all of the real property required to
construct, operated and maintain the Project, the parties acknowledge that
changes in development plans, permitting requirements, and other factors may
require the realignment of roadways, the reconfiguration of retention ponds, or
other modifications to the legal descriptions of the property actually required
to construct, operate, and maintain the Project. Accordingly, pursuant to this
Agreement, the Owner is executing and delivering and Agreement to Convey or
Dedicate to the District all other easements, tracts, and rights-of-way that are
required to construct, operate, and maintain the Project. If, as a result of
the foregoing, certain portions of the Lands conveyed hereunder are not required
to construct, operate, and maintain the Project, title thereto shall be subject
to a reverter in favor of the Owner pursuant to the terms of the deed of
conveyance described in paragraph 1 above. Upon the request, the District
shall, at no expense to the Owner, quit claim or otherwise confirm that such
surplus lands have reverted to the Owner.
8. FURTHER ASSURANCES. From and after the date hereof, the Owner
shall make, do, execute, acknowledge, and deliver, all and every other further
act, deed, easement conveyance,
3
<PAGE>
assignment, transfer, and assurance as may be necessary or desirable, as
determined by the District; (i) to better assure, convey, grant, assign, and
confirm any and all rights or interest in the Lands that are intended or
required to be acquired by or conveyed to the District as contemplated by the
Indenture and this Agreement, (ii) to enable the District to construct, operate
and maintain the Project, and (iii) to permit the District to obtain the deed,
easement, conveyance, assignment, transfer, or dedication of all real property
or interest therein necessary for the construction, maintenance and operation of
the Project.
9. SPECIFIC ENFORCEMENT. The parties acknowledge that the District
will be irreparably damaged (and that damages at law would be inadequate remedy)
if the covenants and agreements of the Owner contained herein are not
specifically enforced. Therefore, in the event the Owner fails to comply with
any covenant or agreement contained herein, the District, in addition to all
other rights and remedies, shall be entitled to a decree for specific
performance of those covenants and agreements without being required to show any
actual damage or to post any bond or other security.
10. APPLICABLE LAW. This Agreement is made and shall be construed
under the laws of the State of Florida.
11. SURVIVAL. The terms and conditions hereof shall survive the
closing of the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
Witnesses: TROUT CREEK PROPERTIES, INC.
/s/Douglas Post By: /s/John M. Price
- -------------------------- -------------------------
John M. Price, as its Vice
President
/s/Geraldine Burton
- --------------------------
(Corporate Seal)
4
<PAGE>
Witnesses: MEADOW POINTE II COMMUNITY
DEVELOPMENT DISTRICT
/s/M. K. Stailey By: /s/Donald A. Buck
- --------------------------- -----------------------
/s/B. S? Donald A. Buck, Chairman of
- --------------------------- the Board of Supervisors
(Corporate Seal)
Attest:
/s/ J?
--------------------------
Asst. Secretary
5
<PAGE>
EXHIBIT 11
BF ENTERPRISES, INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net Income $ 445 $1,608 $2,103
------ ------ ------
------ ------ ------
Weighted Average number of shares outstanding:
Common stock 3,788 3,782 3,819
Common stock equivalents - stock options (A) 241 165 76
------ ------ ------
4,029 3,947 3,895
------ ------ ------
------ ------ ------
Net income per share - based on weighted
average number of shares of common stock and
common stock equivalents outstanding $ .11 $ .41 $ .54
------ ------ ------
------ ------ ------
</TABLE>
(A) Computation is based on the treasury stock method using the average market
price.
(B) A computation of fully diluted income per share has been omitted from the
above schedule since there was no significant dilution during the periods
reported.
<PAGE>
EXHIBIT 21
BF ENTERPRISES, INC. AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
Name of Subsidiary State or Country of Incorporation
- ------------------ ---------------------------------
BF Holdings, Ltd. Cayman Islands
Boothe Financial Corporation Delaware
Boothe Land Corporation Florida
Lease Marketing, Inc. California
Trout Creek Properties, Inc. Delaware
Trout Creek Development Corporation Delaware
