<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
For the fiscal year ended December 31, 1996, or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 incorporation (IRS Employer
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. [X]
As of March 17, 1997, the aggregate market value of the $.10 Par Value Common
Stock held by non-affiliates of the registrant was approximately $12,751,037
based on the closing sale price for the stock on that date. This amount
excludes the market value of 1,742,195 shares of Common Stock beneficially
owned by the registrant's directors and officers.
As of March 17, 1997, there were outstanding 3,703,893 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 1997, 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 32
<PAGE>
PART I
Item 1. Business.
--------
General
- -------
BF Enterprises, Inc. and its subsidiaries (collectively, 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.
At December 31, 1996, the Company's assets also included approximately
$5.1 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 28, 1997, the Company owned
approximately 559 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,
the Company has sold 1,175 lots,consisting of approximately 248 acres, to
six 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 commenced development of Meadow Pointe in 1992. Meadow
Pointe is being developed in accordance with a Development Order issued by
the Pasco County Board of County Commissioners, and is currently zoned for
approximately 2,750 single family homes, 1,500 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. The Company sold 269 lots in 1996, 211 lots in 1995, 284 lots
in 1994, 267 lots in 1993 and 99 lots during the last seven months of 1992,
and sold 45 lots in the first two months of 1997, 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.
During the first two months of 1997, the Company also sold a two-acre church
site and a one-acre day care site.
The Company is engaged in the development of residential lots and
multifamily and commercial parcels for sale to homebuilders and others. The
Company does not expect it or any subsidiary or affiliate will engage in the
construction of houses on finished lots. In March 1991, the Company 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
1
<PAGE>
the Company with respect to, the development of Meadow Pointe, including the
sale of single family lots and multifamily and commercial parcels.
Two community development districts, both local units of Florida
special purpose government, have been formed in conjunction with the
development of Meadow Pointe. 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 August 1996, the two
community development districts issued an aggregate $57.1 million of capital
improvement revenue bonds, including $2.6 million issued in August 1996. 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 the Company and the sale of those lots to
homebuilders.
The Company currently anticipates the future issuance of
approximately $22 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 first quarter of 1997, the Company listed for sale with a large
national real estate brokerage firm approximately 55 acres of commercial
property. 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, with approximately 850 parking spaces, 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.
On January 1, 1996, when Bank One began paying rent on the entire building,
base rents due under the new lease increased 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 that period, the Company will amortize income from the
lease on a straight-line basis, as required by generally accepted accounting
principles. Accordingly, in 1996 the Company reported - and in each of
the remaining eight years of the original lease term will report - rental
income from the lease of $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.
Other Real Estate. The Company also owns 22 acres of undeveloped land
in suburban Nashville, Tennessee which is zoned commercial.
2
<PAGE>
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 Development Corporation, a Delaware corporation, the
Company's development subsidiary.
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. During 1996, construction began at 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.
Item 2. Properties.
----------
The Company leases its headquarters office space, consisting of
3
<PAGE>
approximately of 2,241 square feet, in the Shell Building at 100 Bush Street,
in San Francisco, under a lease expiring January 31, 1999, with a three-year
renewal option. The Company believes this 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 Court has
set the matter for trial in June 1997. 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, a subsidiary of the Company was served as a
defendant 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.
While this lawsuit is in its preliminary stages, the Company believes that it
has good and sufficient defenses and it will defend the suit vigorously.
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
<PAGE>
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 14, 1997,
there were approximately 710 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 1996 and
1995, 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
--------------
1996 High Low
---- ---- ---
<S> <C> <C>
1st Quarter $5 1/4 $4 3/4
2nd Quarter 6 3/4 4 3/4
3rd Quarter 6 3/4 6 1/4
4th Quarter 6 1/4 6 1/4
1995 High Low
---- ---- ---
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
</TABLE>
The source of the foregoing quotations was the National Quotation
Bureau, Inc.
No cash dividends were paid in 1996 or 1995, 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,
--------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Income statement data:
Revenues $ 4,559 $ 3,550 $ 3,883 $ 3,854 $ 3,313
Income (loss) before income taxes 2,137 477 1,608 2,103 (632)
Net income (loss) 2,137 445 1,608 2,103 (632)
Net income (loss) per share .53 .11 .41 .54 (.17)
Average common stock
and equivalents (1) 4,042 4,029 3,947 3,895 3,821
Balance sheet data
(at end of period):
Total assets $19,901 $18,521 $20,446 $26,484 $24,293
Subordinated debentures, unmatured 805 817 817 5,770 10,605
Stockholders' equity 16,955 14,867 14,625 13,207 11,134
Stockholders' equity per
share (fully diluted)(2) 4.36 3.84 3.74 3.37 2.88
</TABLE>
Notes: (1) In calculating net income (loss) per share:
(i) For 1996, the weighted average number of shares was 4,042,000,
the sum of 3,746,000 weighted average shares of common stock and
296,000 weighted average common stock equivalents outstanding
during the year.
(ii) 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.
(iii) 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.
(iv) 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.
(v) 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.
(2) Calculation of fully diluted stockholders' equity per share
assumes exercise at the end of each year of all options
outstanding at that time.
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, 1996
- -----------------------------------------------------------------
During the years ended December 31, 1996, 1995 and 1994, the Company
realized net income of $2,137,000, $445,000 and $1,608,000, respectively. Net
income was substantially higher in 1996 than in the previous two years due
principally to a significant increase in rental income from the Company's
Tempe, Arizona property. The reduction in net income from 1994 to 1995 was
primarily the result of a decrease in revenues from lot sales at the Company's
Meadow Pointe project, near Tampa, Florida, a reduction in rental income from
the Company's Tempe property and costs incurred in connection with a new lease
of that property.
Results for the years 1996, 1995 and 1994 included gains from sales of
lots within Meadow Pointe of $1,575,000, $1,415,000 and $2,375,000,
respectively, on sales to homebuilders of 269 lots in 1996, 211 lots in 1995
and 284 lots in 1994. 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 Consolidated Financial Statements). The Company periodically reviews these
estimates and makes cumulative adjustments to reflect any revised estimates.
Property sales at Meadow Pointe are dependent 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.
During 1995, real estate sales included net revenue of $756,000 from
the sale of a commercial building and underlying property in Edina, Minnesota,
in addition to Meadow Pointe residential lot sales. 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 1996 or 1994.
Real estate leasing income and mortgage loan interest in 1996 was more
than four times what it was in 1995 and almost three times greater than in
1994, primarily as a result of the execution of a new lease of the Company's
Tempe property (see Note G of Notes to Consolidated Financial Statements).
Due to this change, annual rental income from the Tempe property increased to
$1,815,000 in 1996, from $349,000 and $505,000 in 1995 and 1994, respectively.
The Company incurred costs during 1995 for property taxes, insurance and
certain other operating expenses related to the new lease of the Tempe property
of $153,000 which it did not incur in prior years and has not incurred
subsequently. These costs were included in operating expenses during 1995 and
accounted for operating expenses that were almost three times their 1996 and
1994 levels. Depreciation and amortization expense increased in 1995 and 1996
due to the amortization of a commission related to the new lease, which
commenced on March 1, 1995.
Interest and dividends from investments in the years 1996, 1995 and
1994 has varied with the amount of funds available for investment.
7
<PAGE>
General and administrative expenses charged against income were
$168,000 greater in 1996 than in 1995, and $256,000 less in 1995 than in 1994.
The higher expenses in 1996 and 1994 were 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 Consolidated
Financial Statements) which was taken into expense in 1994. Employee
compensation expenses capitalized against Tampa, Florida real estate in the
years ended December 1996, 1995 and 1994 were $108,000, $125,000 and $200,000,
respectively, representing 12%, 17% and 19%, 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.
In 1996 the Company realized gains of $94,000 from sales of a
marketable equity security. 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, 1996, cash and cash equivalents
increased by $430,000. On July 3, 1996 the Company received $610,000 from the
payoff of a note secured by a commercial building and underlying land in Edina,
Minnesota. The Company received the note in connection with the sale of this
property in July 1995 (see above). In addition, in August 1996 the Company
received $675,000 from the sale of a marketable equity security. At
December 31, 1996, the Company held $5,138,000 in cash, cash equivalents and
marketable securities as compared to $2,946,000 for all short-term and
long-term liabilities. From time to time, the Company purchases shares of its
common stock in the open market (see Note L of Notes to Consolidated Financial
Statements).
The Company's business plan calls for substantial expenditures during
the next several years relating to the planned development of Meadow Pointe.
During the period February 1992 through December 1996, two community
development districts encompassing the Meadow Pointe project issued
approximately $57.1 million of capital improvement revenue bonds. The Company
currently anticipates the future issuance of approximately $22 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
<PAGE>
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. At December 31, 1996, real estate
inventory held for current sale and land held for future development was
$1,733,000 greater than at December 31, 1995, as a result of the capitalization
of various costs including bond assessments by the two community development
districts.
The Company intends to pay for its future expenditures at Meadow
Pointe and its other operating expenses (including those related to debenture
payments) with (i) cash generated from sales of property within Meadow Pointe
and its other operations, 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 projected will
be sufficient to develop the long-term Meadow Pointe project.
8
<PAGE>
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................................10
Consolidated statements of financial position at December 31, 1996
and 1995 ............................................................ . 11
Consolidated statements of income for the years ended December 31,
1996, 1995 and 1994 ............................................... . . 12
Consolidated statements of stockholders' equity for the years ended
December 31, 1996, 1995 and 1994 .......................................13
Consolidated statements of cash flows for the years ended December 31,
1996, 1995 and 1994 ....................................................14
Notes to consolidated financial statements ..........................15-22
Schedule III - Real estate and accumulated depreciation at
December 31, 1996 ......................................................23
Schedule IV - Mortgage loans on real estate at December 31, 1996........24
</TABLE>
9
<PAGE>
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, 1996 and 1995, and the related consolidated statements of
income, stockholders' equity and cash flows for each of the three years
in the period ended December 31, 1996. 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 consolidated
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 the 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 consolidated financial position of BF
Enterprises, Inc. and subsidiaries as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1996, 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 19, 1997
10
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
December 31,
------------
1996 1995
---- ----
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 5,098 $ 4,668
Marketable securities 40 538
Receivables 482 188
Mortgage loans 100 732
Real estate rental property, net of depreciation 2,369 2,420
Real estate inventory held for current sale
and land held for future development 11,179 9,446
Other real estate 132 132
Other assets 501 397
------- -------
TOTAL ASSETS $19,901 $18,521
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Payables and accrued liabilities $ 2,133 $ 2,821
Subordinated debentures, unmatured 805 817
Deferred income taxes 8 16
------- -------
Total Liabilities 2,946 3,654
------- -------
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value
Authorized -- 10,000,000 shares
Issued and outstanding --
3,733,893 and 3,753,193 shares 373 375
Capital surplus 17,078 17,208
Deficit (532) (2,669)
Net unrealized gains (losses) from
marketable equity securities 36 (47)
------- -------
Total Stockholders' Equity 16,955 14,867
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $19,901 $18,521
------- -------
------- -------
</TABLE>
The accompanying notes are an integral
part of these statements.
11
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues:
Real estate sales $ 2,444 $ 2,883 $ 2,900
Real estate rental income and
mortgage loan interest 1,831 433 630
Interest and dividends 278 222 319
Other 6 12 34
------- ------- -------
4,559 3,550 3,883
Costs and Expenses:
Cost of real estate sold 869 1,493 525
Real estate operating 74 211 77
Depreciation and amortization 98 56 51
Interest on subordinated debentures 59 57 76
General and administrative 1,416 1,248 1,504
------- ------- -------
2,516 3,065 2,233
Gross profit 2,043 485 1,650
Gains (losses) from sales of securities 94 (8) (42)
------- ------- -------
Income before income taxes 2,137 477 1,608
Provision for income taxes -- 32 --
------- ------- -------
Net income $ 2,137 $ 445 $ 1,608
------- ------- -------
------- ------- -------
Net income per share $ .53 $ .11 $ .41
------ ------- -------
------ ------- -------
</TABLE>
The accompanying notes are an integral
part of these statements.
12
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Common Stock:
Balance at beginning of period $ 375 $ 376 $ 381
Purchases of common stock -- par value (2) (6) (5)
Restricted stock grant - par value -- 4 --
Exercise of stock options -- par value -- 1 --
------ ------- -------
Balance at end of period $ 373 $ 375 $ 376
------- ------- -------
------- ------- -------
Capital Surplus:
Balance at beginning of period $17,208 $17,344 $17,548
Purchases of common stock --
excess over par value (118) (295) (204)
Purchases of stock options (12) (12) --
Restricted stock grant - excess over par value -- 170 --
Exercise of stock options --
excess over par value -- 1 --
------- ------- -------
Balance at end of period $17,078 $17,208 $17,344
------- ------- -------
------- ------- -------
Deficit:
Balance at beginning of period $ (2,669) $ (3,114) $ (4,722)
Net income 2,137 445 1,608
------- ------- -------
Balance at end of period $ (532) $ (2,669) $ (3,114)
------- ------- -------
------- ------- -------
Net Unrealized Gains (Losses) From
Marketable Equity Securities:
Balance at beginning of period $ (47) $ 19 $ --
Gain (loss) during period 83 (66) 19
------- ------- -------
Balance at end of period $ 36 $ (47) $ 19
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are an integral part of
these statements.
13
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------
1996 1995 1994
----- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 2,137 $ 445 $ 1,608
Adjustments to reconcile net income to
net cash used by operating activities:
(Gains) losses from securities (94) 8 42
Gains from sales of real estate (1,575) (1,390) (2,375)
Net cash proceeds from sales of real estate 1,615 4,785 1,750
Mortgage loan payments 610 886 318
Real estate financing -- (100) --
Real estate development costs (1,946) (2,366) (2,701)
Reimbursement of real estate
development costs 272 809 929
Changes in certain assets and liabilities:
Decrease (increase) in receivables (294) (44) 117
Increase (decrease) in payables
and accrued liabilities (212) (206) 225
Increase (decrease) in deferred income taxes (8) (416) 37
Other net (132) (309) 39
------- ------- -------
Total adjustments to net income (1,764) 1,657 (1,619)
------- ------- -------
Net cash provided (used)
by operating activities 373 2,102 (11)
Cash flows from investing activities:
Proceeds from sales or maturities
of marketable securities 675 1,481 5,895
Purchases of marketable securities -- (208) (4,803)
------- ------- -------
Net cash provided by investing activities 675 1,273 1,092
Cash flows from financing activities:
Reductions in subordinated debentures (486) (1,371) (7,737)
Purchases of the Company's common stock (120) (301) (209)
Other (12) (10) --
------- ------- -------
Net cash used by financing activities (618) (1,682) (7,946)
------- ------- -------
Net increase (decrease) in cash
and cash equivalents 430 1,693 (6,865)
Cash and cash equivalents at beginning of period 4,668 2,975 9,840
------- ------- -------
Cash and cash equivalents at end of period $ 5,098 $ 4,668 $ 2,975
------- ------- -------
------- ------- -------
Supplemental disclosures of cash flow
information:
Cash paid during the year for
interest (net of amount capitalized) $ 61 $ 57 $ 205
------- ------- -------
------- ------- -------
</TABLE>
The accompanying notes are
an integral part of these statements.
14
<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 October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation" (SFAS 123). SFAS 123 calls for, but does not require, a fair
value approach to recognizing compensation costs associated with the granting
of stock options, among other types of stock based compensation. For companies
electing not to apply such accounting, certain disclosures are required. The
Company adopted the disclosure requirements of SFAS 123 in 1996 (See Note M).
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 1995. SFAS 121 requires
that long-lived assets be carried at the lower of cost 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 (See Note H).
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
The amortized cost and fair values of marketable securities available for sale
as of December 31, 1996 and 1995 were as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995
---------------------------------------------- -------------------------------------------------
Gross Gross Gross Gross
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value
------- ----- ------ ----- ---- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Common Stock $ 4 $ 36 $ -- $ 40 $ 585 $ -- $ 47 $ 538
--- ---- ---- ---- ----- ----- ----- -----
--- ---- ---- ---- ----- ----- ----- -----
</TABLE>
15
<PAGE>
Unrealized gains and losses are presented in stockholders' equity, net of
related taxes.
Proceeds from sales of securities available for sale were $675,000,
$981,000 and $3,168,000 in 1996, 1995 and 1994, respectively. A gross gain of
$94,000 and gross losses of $8,000 and $42,000 were realized on those sales in
1996, 1995 and 1994, respectively. Gains and losses are computed using the
specific identification method.
Note F - Mortgage Loans
At December 31, 1996, the principal balance of the Company's only mortgage loan
was $100,000, and that principal is due on August 31, 1997. At December 31,
1995, the principal balance of mortgage loans was $732,000, net of an
unamortized discount of $48,000.
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 One during 1995, with rental of the entire premises
commencing January 1, 1996. At December 31, 1996, contractual rental revenues
from the lease with Bank One are projected as follows:
1997 $ 1,628,000
1998 1,707,200
1999 1,826,000
2000 1,848,000
2001 1,936,000
2002 and after 6,239,200
On January 1, 1996, as required by Generally Accepted Accounting Principles,
the Company began amortizing on a straight-line basis (1) income from the lease
with Bank One, resulting in annual real estate leasing income of $1,815,000 for
the period ending February 28, 2005, and (2) a related $423,000 lease
commission, with annual amortization expense of $46,000 over the same period.
16
<PAGE>
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, 1996 and 1995 was as follows (in thousands):
<TABLE>
<CAPTION>
Accumulated
Cost Depreciation Net
---- ------------ ---
<S> <C> <C> <C>
1996 $4,470 $2,101 $2,369
------ ------ ------
------ ------ ------
1995 $4,470 $2,050 $2,420
------ ------ ------
------ ------ ------
</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 of approximately 567 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 $11,179,000 at December 31,
1996 and $9,446,000 at December 31, 1995, 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, have been formed in conjunction with the development of
Meadow Pointe. 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 August 1996, the two community
development districts issued an aggregate $57.1 million of capital improvement
revenue bonds, including $2.6 million issued in 1996. All of these bonds were
issued to finance the acquisition of property, and the construction of roads,
utilities, recreation facilities and other infrastructure systems.
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 or other land 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,
1996, parcels of land owned by the Company's subsidiaries were subject to bonds
in the principal amount of approximately $29 million.
17
<PAGE>
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 property to be developed within the district areas.
Note I - Subordinated Debentures
At December 31, 1996, $805,000 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, 1996, 1995 and 1994.
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, 1996, the $1,755,000 of these
debentures still due and outstanding, all of which have matured, was
included in payables and accrued liabilities. At December 31, 1996, the
Company had outstanding a $1,700,000 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.
Note J - Income Taxes
As of December 31, 1996 and 1995, the Company had recorded the following net
deferred tax liabilities. Amounts at December 31, 1995 have been adjusted to
conform to the Company's 1995 federal income tax returns as filed in September
1996.
<TABLE>
<CAPTION>
Tax Effect (in thousands)
-------------------------
December 31, 1996 December 31, 1995
----------------- -----------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $ 4,335 $ 4,084
Land basis (286) 789
Effect of accelerated depreciation (184) (161)
Other (2) 112
------- -------
3,863 4,824
Less: valuation allowance (3,863) (4,824)
------- -------
Deferred tax assets net of valuation allowance -- --
Deferred tax liabilities (8) (16)
-------- --------
Net deferred tax liabilities $ (8) $ (16)
-------- --------
-------- --------
</TABLE>
The Company did not include a provision for federal income taxes in the
consolidated statement of operations for the years ended December 31, 1996,
1995 and 1994 because it realized the benefits, respectively, of $961,000,
$308,000 and $624,000 of deferred tax assets. The $32,000 provision for income
taxes for the year ended December 31, 1995, consists of state income taxes
payable.
18
<PAGE>
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, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Expected federal statutory income tax rate 34.0% 34.0% 34.0%
State income taxes, net of federal tax benefit 6.3 6.3 4.6
Utilization of deferred tax assets (40.3) (33.6) (38.6)
------ ------ ------
Effective tax rate --% 6.7% --%
------ ------ ------
------ ------ ------
</TABLE>
At December 31, 1996, the Company had available for federal income
tax purposes unused operating loss carryforwards of approximately $11,300,000
which expire as follows (in thousands):
<TABLE>
<CAPTION>
Year of Expiration
------------------
<S> <C>
2002 $ 1,800
2003 1,100
2004 700
2005 500
2006 700
2007 1,500
2008 2,100
2009 2,200
2010 100
2011 600
--------
$11,300
--------
--------
</TABLE>
Note K - Rental Commitments
Rental expense, primarily for office premises, amounted to $56,000, $53,000 and
$89,000 for the years ended December 31, 1996, 1995 and 1994, respectively.
As of December 31, 1996, the approximate minimum rental commitments under the
Company's office lease, which expires on January 31, 1999, were $47,000 in each
of 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 1996, 1995 and 1994 the Company purchased shares of its common
19
<PAGE>
stock, primarily in open market transactions: 19,300 shares for $120,000 in
1996, 56,200 shares for $301,000 in 1995 and 52,460 shares for $209,000 in 1994.
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").
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, 1997, there were 37,500 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. All of
the options which were granted under the Original Director Plan have been
exercised. No new options may be granted under the Original Director Plan.
Pursuant to the 1994 Director Plan, any person who becomes an Outside Director
is to be granted a non-qualified option to purchase 5,000 shares of the
Company's common stock, the grant to be effective on the date of his or her
election or appointment as an Outside Director, 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. In
accordance with the 1994 Director Plan, two Outside Directors were granted
options for 5,000 shares each upon approval of the plan in May 1994 and
subsequently received options for 2,000 each on the dates of the annual
meetings of stockholders in May 1995 and May 1996. Another Outside
Director was granted, at the time of his appointment in October 1996, a
non-qualified option to purchase 5,000 shares of the Company's common stock.
All options granted pursuant to the 1994 Director Plan 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, 1997, there were 77,000 shares of the Company's
common stock available for grant under the 1994 Director Plan.
Had compensation costs for these plans been determined consistent with the
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123), the Company's net income and earnings
20
<PAGE>
per share would have been reduced to the following proforma amounts as of
December 31, 1996 and 1995 (in thousands, except per share amounts):
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C> <C>
Net Income: As Reported $ 2,137 $ 445
SFAS No. 123 Adjustment (163) (108)
------- -------
Pro Forma $ 1,974 $ 337
------- -------
------- -------
Primary Earnings
Per Share: As Reported $ .53 $ .11
SFAS No. 123 Adjustment (.04) (.03)
------- -------
Pro Forma $ .49 $ .08
------- -------
------- -------
</TABLE>
Because the SFAS 123 method of accounting has not been applied to options
granted prior to January 1, 1995, the resulting pro forma compensation cost
may not be representative of that to be expected in future years.
As of December 31, 1996, 114,500 shares were available for future grant and
687,500 of the stock options were exercisable. The options expire 10 years
following their grant. Options granted pursuant to the 1994 Director Plan vest
at the rate of 25% per year, for each of the first four years. Options granted
under the 1993 Employee Plan are fully vested at the date of grant.
A summary of the status of the Company's stock option plan at December 31, 1996
and 1995 and changes during the years then ended is presented in the table
below:
<TABLE>
<CAPTION>
1996 1995
---- ----
Weighted-Average Weighted-Average
---------------- ----------------
Shares Exercise Price Shares Exercise Price
------ ----------------- ------ -----------------
<S> <C> <C> <C> <C>
Outstanding at Beginning Of
Year 598,500 $ 3.06 509,500 $ 2.65
Granted 109,000 6.24 104,000 4.79
Exercised -- -- (10,000) 0.22
Purchased (3,000) 2.88 (5,000) 2.50
------- -------
Outstanding at End of Year 704,500 3.55 598,500 3.06
Exercisable at End of Year 687,500 3.51 587,000 3.03
</TABLE>
21
<PAGE>
The following table summarizes information about stock options outstanding at
December 31, 1996:
<TABLE>
<CAPTION>
Options
Outstanding Options
Weighted- Weighted- Exercisable
Number Average Average Number Weighted-
Range of Outstanding at Remaining Exercise Exercisable at Average
Exercise Prices 12/31/96 Contractual Life Price 12/31/96 Exercise Price
- ------------------ -------------- ---------------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C>
$2.50 to $2.88 481,500 5.73 years $ 2.67 481,500 $ 2.67
$3.87 to $4.75 110,000 8.83 years 4.67 105,000 4.71
$5.87 to $6.25 113,000 9.87 years 6.23 101,000 6.25
--------- --------
704,500 687,500
--------- --------
--------- --------
</TABLE>
The fair value of each option grant is estimated as of the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions used for grants in 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Risk free interest rate 6.4% 5.8%
Expected dividend yield none none
Expected life of options 5 years 5 years
Expected volatility 5% 5%
</TABLE>
Based on these assumptions, the weighted average fair value of options granted
would be calculated as $1.68 in 1996 and $1.20 in 1995. The SFAS 123
adjustments for 1995 and 1996 appearing above are the product of these weighted
average fair values and the number of options granted in each of the two years,
after giving effect to the capitalization of a portion of these compensation
costs to the Meadow Pointe project.
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.
Note N - Income Per Share
Income per share for the years ended December 31, 1996, 1995 and 1994 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, 1996,
1995 and 1994 was 4,042,000, 4,029,000 and 3,947,000, respectively.
22
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
BF ENTERPRISES, INC. AND SUBSIDIARIES
December 31, 1996
(Thousands of dollars)
<CAPTION>
Cost Capitalized Gross Amount at Life on Which
Initial Cost Subsequent Which Carried Depreciation
to Company to Acquisition at Close of Period in Latest
---------- -------------- ------------------ Statements of
Operations
Bldgs.and Improve- Carrying Bldgs. and Accumultd. Date of Date is
Description Encumbrances Land Improvements ments Costs Land Improvements Total Deprec. Construction Acq'd Computed
- ----------- ------------ ---- ------------ ------- ------ ---- ------------ ----- ------- ------------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Office and
Manufacturing
Building -
Tempe, Arizona $ 736 $ 3,734 $ 736 $ 3,734 $ 4,470 $ 2,101 1977 1977 40 Years
----- ------- ------ ------- ------- -------
----- ------- ------ ------- ------- -------
</TABLE>
Notes:
(1) For Federal income tax purposes at December 31, 1996, real estate was
carried at a cost of $1,888,000.
(2) Reconciliation of "Real Estate and Accumulated Depreciation":
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994
------------------------- -------------------------- -----------------------
Investment Accumulated Investment Accumulated Investment Accumulated
Amount Depreciation Amount Depreciation Amount Depreciation
------ ------------ ------ ------------ ------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at
beginning of
year $4,470 $2,050 $4,470 $1,999 $4,470 $1,948
Additions:
Depreciation
charged to
costs &
expenses 51 51 51
------ ------ ------ ------ ------ ------
Balance at end
of year $4,470 $2,101 $4,470 $2,050 $4,470 $1,999
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
BF ENTERPRISES, INC. AND SUBSIDIARIES
December 31, 1996
(Thousands of dollars)
Principal Amount
of Loans
Subject to
Delinquent
Face Carrying Principal Balloon
Amount of Amount of or Payment at
Description Interest Rate Final Maturity Date Prior Liens Mortgages Mortgages Interest Maturity
- ------------- ------------- -------------------- ----------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
First Mortgage:
Land and Land Development -
Tampa, Florida 9% 1997 none 100 100 none 100
---- ----
---- ----
</TABLE>
Notes:
(1) Interest only until maturity.
(2) For Federal income tax purposes at December 31, 1996, mortgage loans
on real estate was carried at a cost of $100,000.
(3) Reconciliation of "Mortgage Loans on Real Estate":
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $ 732 $ 886 $ 1,204
Additions during year:
New mortgage loans 732
------ ------ -------
732 1,618 1,204
Deductions during year:
Collection of principal 610 886 318
Loss from prepayment of principal 22
------ ------- -------
Balance at end of year $ 100 $ 732 $ 886
------ ------- ------
------ ------- ------
24
</TABLE>
<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 1997.
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,
1996 and 1995.
Consolidated statements of income for the years ended
December 31, 1996, 1995 and 1994.
Consolidated statements of stockholders' equity for the years
ended December 31, 1996, 1995 and 1994.
Consolidated statements of cash flows for the years ended
December 31, 1996, 1995 and 1994.
Notes to financial statements.
Selected quarterly financial data for the years ended
December 31, 1996 and 1995 have not been included in the
notes to the financial statements as they were not required.
Financial Statement 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.
25
<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
26
<PAGE>
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.
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 -
incorporated by reference to Exhibit 10.10b to the
registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995.
*10.10c Second Amendment to Employment Agreement between the
registrant and Brian P. Burns, dated as of January 1, 1997.
27
<PAGE>
*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.
*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 - incorporated by reference to
Exhibit 10.12c to the registrant's Annual Report on
Form 10-K for the fiscal year ended December 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.
10.16 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.
10.17 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.
10.18 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.
28
<PAGE>
10.19a 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.
10.19b 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.
10.20 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 - incorporated by reference to
Exhibit 10.22 to the registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.
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.
29
<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
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 24, 1997 By: /s/ John M. Price
-----------------------
John M. Price
Senior Vice President,
General Counsel, Secretary
and Treasurer
30
<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 24, 1997 By: /s/ Brian P. Burns
------------------------
Brian P. Burns
Chairman of the Board
of Directors, President
and Chief Executive
Officer
(Principal Executive Officer)
Date: March 24, 1997 By: /s/ Paul Woodberry
---------------------------
Paul Woodberry
Executive Vice President,
Chief Financial Officer and
a Director
(Principal Financial Officer)
Date: March 24, 1997 By: /s/ Daniel S. Mason
----------------------------
Daniel S. Mason, Director
Date: March 24, 1997 By: /s/ Ralph T. McElvenny, Jr.
-----------------------------
Ralph T. McElvenny, Jr.,
Director
Date: March 24, 1997 By:/s/ Charles E.F. Millard
------------------------------
Charles E.F. Millard,
Director
Date: March 24, 1997 By:/s/ S. Douglas Post
----------------------------
S. Douglas Post, Vice
President and Controller
(Principal Accounting Officer)
</TABLE>
31
<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.
32
<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 and
Brian P. Burns, dated as of December 28, 1995 - incorporated by
reference to Exhibit 10.10b to the registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
*10.10c Second Amendment to Employment Agreement between the registrant
and Brian P. Burns, dated as of January 1, 1997. 36-37
*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.
33
<PAGE>
Exhibit Sequential
Number Page Number
- ------ -----------
*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 - incorporated by reference to Exhibit 10.12c to the
registrant's Annual Report on Form 10-K for the fiscal year ended
December 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.
10.16 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.
10.17 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.
34
<PAGE>
Exhibit Sequential
Number Page Number
- ------ -----------
10.18 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.
10.19a 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.
10.19b 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.
10.20 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
- incorporated by reference to Exhibit 10.22 to the registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995.
11 Statement re computation of per share earnings. 38
21 Subsidiaries of the registrant. 39
- --------------------------------------------
* Management contract or compensatory plan required to be filed as an
exhibit pursuant to Item 14 (c) of Form 10-K.
35
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
----------------------------------------
This Second Amendment to Employment Agreement is made and entered
into as of January 1, 1997 by and between BE 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, as amended by Amendment to Employment Agreement
dated December 28, 1995 (collectively, the "Employment Agreement").
B. Corporation and Officer desire to amend the Employment Agreement.
AGREEMENT
---------
THE PARTIES AGREE AS FOLLOWS:
1. Section 2.2 of the Employment Agreement is amended in its entirety
to provide as follows:
2.2 Base Term. The term of employment of Officer by Corporation shall
be from the date hereof through December 31, 2002 unless terminated earlier
pursuant to this Section 2. At any time before December 31, 2002 Corporation
and Officer may by mutual written agreement extend Officer's employment
under the terms of this Agreement for such additional periods as they may agree.
2. 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 Of fleer a "Base Salary" at the rate of $275,000
per annum, payable in equal semi-monthly installments, commencing March 1, 1997.
36
<PAGE>
3. This Second Amendment to Employment Agreement shall be effective
March 1, 1997.
IN WITNESS WHEREOF, the parties hereto have executed this Second 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
By: /s/ Brian P. Burns
------------------------
Brian P. Burns
37
EXHIBIT 11
BF ENTERPRISES, INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended
December 31,
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Net income $ 2,137 $ 445 $1,608
Weighted average number of shares outstanding:
Common stock 3,746 3,788 3,782
Common stock equivalents - stock options (A) 296 241 165
------- ------- ------
4,042 4,029 3,947
------- ------- ------
------- ------- ------
Net income per share - based on weighted average
number of shares of common stock and common
stock equivalents outstanding $ .53 $ .11 $ .41
------- ------- -------
------- ------- -------
</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.
38
Exhibit 21
BF ENTERPRISES, INC. AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
<CAPTION>
Name of Subsidiary State or Country of Incorporation
------------------ ---------------------------------
<S> <C>
BF Holdings, Ltd. Cayman Islands
Boothe Financial Corporation Delaware
Trout Creek Properties, Inc. Delaware
Trout Creek Development Corporation Delaware
</TABLE>
39
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,098
<SECURITIES> 40
<RECEIVABLES> 482
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,901
<CURRENT-LIABILITIES> 0
<BONDS> 805
0
0
<COMMON> 373
<OTHER-SE> 16,582
<TOTAL-LIABILITY-AND-EQUITY> 19,901
<SALES> 2,444
<TOTAL-REVENUES> 4,559
<CGS> 869
<TOTAL-COSTS> 869
<OTHER-EXPENSES> 1,494
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 59
<INCOME-PRETAX> 2,137
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,137
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,137
<EPS-PRIMARY> .53
<EPS-DILUTED> .53
</TABLE>
