<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(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, 1997, 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 or organization) (I.R.S. Employer
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)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
----- -----
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. [X]
The registrant's revenues for its most recent fiscal year, ending December 31,
1997, were $5,606,000.
As of February 27, 1998, the aggregate market value of the $.10 Par Value Common
Stock held by non-affiliates of the registrant was approximately $16,586,979
based on the closing sale price for the stock on that date. This amount
excludes the market value of 1,737,165 shares of Common Stock beneficially
owned by the registrant's directors and officers.
As of February 27, 1998, there were outstanding 3,660,293 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 1998, 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 approximately 21
acres of undeveloped land in suburban Nashville, Tennessee.
At December 31, 1997, the Company's assets also included approximately
$4.3 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, 1998, the Company owned
approximately 497 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 1,470 lots, consisting of approximately 310
acres, to six homebuilders and 834 acres to the two community development
districts described below. The Company also donated 79 acres to Pasco County,
primarily for parks and a school site, sold an acre to a local utility and, in
1997, sold a two-acre church site and a one-acre day care site. 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 297 lots in 1997, 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 43 lots in the first two months of 1998, for prices ranging from
approximately $21,000 to $45,000. The homebuilders currently are offering
finished houses at base prices ranging from approximately $90,000 to $250,000.
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 that 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 the Company with
1
<PAGE>
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 March 1997, the two community
development districts issued an aggregate $60.7 million of capital improvement
revenue bonds. All of these bonds were issued to finance the acquisition of
property, and the construction of roads, utilities, recreation facilities and
other infrastructure systems. In February 1998, the Company received a
bank commitment providing for a $2 million revolving credit facility which may
be used to finance such improvements in certain parcels within one of the
districts. 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 that $10 million of additional
capital will be required 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 this additional capital will be
available, either from the issuance of capital improvement revenue bonds or
other financing sources.
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 were no offers received on terms acceptable to the Company, for
all or any part of the property listed. The listing expired on February 1998
and was not extended. The Company and Devco have assumed marketing
responsibility for the commercial property.
Commercial Building in Tempe. The Company owns a 220,000 square foot
commercial building, with approximately 900 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 occupancy 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 and 1997 the Company reported - and in each of
the remaining seven 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 approximately 21 acres of
undeveloped land in suburban Nashville, Tennessee of which 15 acres is zoned
high density residential and 6 acres is zoned commercial.
2
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In the last quarter of 1997 the Company formed a new subsidiary to make
an initial investment of $300,000, as a member of a limited liability company,
in the construction and ownership of 130 four bedroom townhome units to be
located at the University of North Carolina at Charlotte, North Carolina.
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 seven 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 will take several more 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 and
employment growth 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 1996 and
1997 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,
real estate, consisting of several properties. 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, consisting of
approximately 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. On May 30,
1997, the Court granted the FTB's motion for summary judgement and dismissed
the Company's action. The Company has filed an appeal of the judgement with a
California Court of Appeal. The amount the Company paid 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 predecessor of the Company's subsidiary. That alleged predecessor
sold all of its assets and business to a third party in 1975. In November 1997,
the Court granted summary judgement to the Company's subsidiary. After the
Court denied plaintiff's motion for reconsideration, the plaintiff filed an
appeal which is now pending in the United States Court of Appeals for the Third
Circuit. No schedule has been established for the filing of briefs.
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 12, 1998,
there were approximately 650 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 1997 and
1996, 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
--------------
1997 High Low
---- ---- ----
<S> <C> <C>
1st Quarter $6 1/2 $6 1/4
2nd Quarter 8 1/4 6 1/2
3rd Quarter 8 1/4 8
4th Quarter 8 1/4 8 1/4
1996 High Low
---- ---- ----
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
</TABLE>
The source of the foregoing quotations was the National Quotation
Bureau, Inc.
No cash dividends were paid in 1997 or 1996, 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
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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,
------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Income statement data:
Revenues $5,606 $ 4,559 $ 3,550 $ 3,883 $ 3,854
Income before income taxes 2,980 2,137 477 1,608 2,103
Net income 3,079 2,137 445 1,608 2,103
Net income per share:
Basic .83 .57 .12 .43 .55
Diluted .75 .53 .11 .41 .54
Weighted average common shares outstanding 3,697 3,746 3,788 3,782 3,819
Weighted average equivalents outstanding 381 296 241 165 76
Weighted average common stock
and equivalents outstanding 4,078 4,042 4,029 3,947 3,895
Balance sheet data
(at end of period):
Total assets $21,842 $19,901 $18,521 $20,446 $26,484
Subordinated debentures, unmatured 719 805 817 817 5,770
Stockholders' equity 19,592 16,955 14,867 14,625 13,207
Stockholders' equity per
share (diluted) (1) 5.12 4.36 3.84 3.74 3.37
</TABLE>
Note: (1) Calculation of diluted stockholders' equity per share assumes
exercise at the end of each year of all dilutive 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, 1997
- -----------------------------------------------------------------
During the years ended December 31, 1997, 1996 and 1995, the Company
realized net income of $3,079,000, $2,137,000 and $445,000, respectively. The
increase in net income from 1996 to 1997 was primarily the result of higher
gains from sales of residential lots and other real estate at the Company's
Meadow Pointe project near Tampa, Florida. Net income was substantially higher
in 1996 than in 1995 due principally to a significant increase in rental income
from the Company's Tempe, Arizona property.
Results for the years 1997, 1996 and 1995 included gains from sales of
lots within Meadow Pointe of $2,662,000, $1,575,000 and $1,415,000,
respectively, on sales to homebuilders of 297 lots in 1997, 269 lots in 1996
and 211 lots in 1995. 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). As set forth in prior reports, it is the
Company's practice to review periodically these revenue and cost estimates and
make cumulative adjustments to reflect any revised estimates. Accordingly, the
decline in cost of real estate sold in 1997 from those costs in 1996 and 1995,
and the related reduction in cost of real estate sold as a percentage of real
estate sales, is primarily the result of cumulative adjustments the Company made
in 1997 to reflect changes in its revenue and cost 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.
In addition to gains from Meadow Pointe residential lot sales, results
for 1997 included aggregate gains of $79,000 from sales of a two-acre church
site, a one-acre day care center site and a model home, all within the Meadow
Pointe project, and a lot in a residential development adjacent to Meadow
Pointe. Real estate sales in 1997 also included a gain of $61,000 from the
sale of a half acre of raw land in Nashville, Tennessee. Real estate sales in
1995 included net revenue of $756,000 from the sale of a commercial building and
underlying property in Edina, Minnesota, in addition to Meadow Pointe lot sales.
The cost of the Edina real estate sold was $792,000. Results for 1995 also
included aggregate gains of $11,000 from sales of lots in the residential
development adjacent to Meadow Pointe and a model home within the Meadow Pointe
project. There were no such gains in 1996.
Real estate leasing income in each of 1996 and 1997 was more than five
times what it was in 1995, 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 both 1996 and 1997, from $349,000 in 1995. 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 has not incurred subsequently. These costs were included
in operating expenses during 1995 and accounted for operating expenses that were
three and four times their 1996 and 1997 levels, respectively. Depreciation and
amortization expense increased in 1996 and 1997 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 1997, 1996 and
1995 has varied with the amount of funds available for investment.
7
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General and administrative expenses charged against income were
$353,000 greater in 1997 than in 1996, and $168,000 greater in 1996 than in
1995. The higher expenses in 1997 and 1996 were due principally to higher
employee compensation and benefits expenses and professional fees. Employee
compensation expenses capitalized against Tampa, Florida real estate in the
years ended December 31, 1997, 1996 and 1995 were $77,000, $108,000 and
$125,000, respectively, representing 8%, 12% and 17%, 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 in 1995 from sales
of government securities in periods of rising interest rates. There were no
such gains or losses in 1997.
The $99,000 benefit for state income taxes in 1997 resulted from the
reversal of prior years' state income tax provisions including the $32,000 state
income tax provision recorded in 1995.
Liquidity and Capital Resources
- -------------------------------
During the year ended December 31, 1997, cash and cash equivalents
decreased by $1,060,000. This decrease was due principally to reductions in the
Company's subordinated debentures, investments in marketable securities and in
a limited liability company and purchases of the Company's common stock. At
December 31, 1997, the Company held $4,318,000 in cash, cash equivalents and
marketable securities as compared to $2,250,000 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 March 1997, two community development
districts encompassing the Meadow Pointe project issued approximately $60.7
million of capital improvement revenue bonds. In February 1998 the Company
received a bank commitment providing for a $2 million revolving credit facility.
This facility may be used to develop residential lots in certain portions of one
of the community development districts. The Company currently anticipates the
need for approximately $10 million of additional financing by that district.
The proceeds of such financing 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
additional financing will be available. At December 31, 1997, real estate
inventory held for current sale and land held for future development was
$2,350,000 greater than at December 31, 1996, 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, except for those expenditures covered by its revolving credit facility,
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
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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......................................................... 10
Consolidated statements of financial position at December 31, 1997
and 1996 ........................................................................................ 11
Consolidated statements of income for the years ended December 31,
1997, 1996 and 1995 ............................................................................. 12
Consolidated statements of stockholders' equity for the years ended
December 31, 1997, 1996 and 1995 ................................................................ 13
Consolidated statements of cash flows for the years ended December 31,
1997, 1996 and 1995 ............................................................................. 14
Notes to consolidated financial statements ................................................... 15-23
Schedule III - Real estate and accumulated depreciation at
December 31, 1997................................................................................ 24
9
</TABLE>
<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, 1997 and 1996, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1997. These consolidated financial statements and the
schedule referred to below are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and schedule 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, 1997 and 1996, and
the results of its operations and its cash flows for each of the three years in
the period ended December 31, 1997, 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 schedule
listed in the index to the financial statements and schedules is presented
for purposes of complying with the Securities and Exchange Commission's rules
and is 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 states, 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 17, 1998
10
<PAGE>
BF ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
December 31,
------------
1997 1996
---- ----
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 4,038 $ 5,098
Marketable securities 280 40
Receivables 89 119
Mortgage loans -- 100
Real estate rental property, net of depreciation 2,318 2,369
Real estate inventory held for current sale
and land held for future development 13,657 11,311
Lease contract receivable 599 363
Other assets 861 501
------- -------
TOTAL ASSETS $21,842 $19,901
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Payables and accrued liabilities $ 1,531 $ 2,141
Subordinated debentures, unmatured 719 805
------- -------
Total Liabilities 2,250 2,946
------- -------
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value
Authorized -- 10,000,000 shares
Issued and outstanding --
3,670,193 and 3,733,893 shares 367 373
Capital surplus 16,614 17,078
Retained earnings (deficit) 2,547 (532)
Net unrealized gains from
marketable equity securities 64 36
------- -------
Total Stockholders' Equity 19,592 16,955
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $21,842 $19,901
------- -------
------- -------
</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,
------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Revenues:
Real estate sales $ 3,456 $ 2,444 $ 2,883
Real estate rental income 1,841 1,822 348
Interest and dividends 287 278 222
Other 22 15 97
------ ------ ------
5,606 4,559 3,550
Costs and Expenses:
Cost of real estate sold 654 869 1,493
Real estate operating 52 74 211
Depreciation and amortization 96 98 56
Interest on subordinated debentures 55 59 57
General and administrative 1,769 1,416 1,248
------ ------ ------
2,626 2,516 3,065
Gross profit 2,980 2,043 485
Gains (losses) from sales of securities -- 94 (8)
Income before income taxes 2,980 2,137 477
Provision (benefit) for state income taxes (99) -- 32
------ ------ ------
Net income $ 3,079 $2,137 $ 445
------ ------ ------
------ ------ ------
Net income per share:
Basic $ .83 $ .57 $ .12
------- ------- -------
------- ------- -------
Diluted $ .75 $ .53 $ .11
------- ------- -------
------- ------- -------
</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,
-----------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Common Stock:
Balance at beginning of period $ 373 $ 375 $ 376
Purchases of common stock -- par value (6) (2) (6)
Restricted stock grant - par value -- -- 4
Exercise of stock options -- par value -- -- 1
------- ------- -------
Balance at end of period $ 367 $ 373 $ 375
------- ------- -------
------- ------- -------
Capital Surplus:
Balance at beginning of period $17,078 $17,208 $17,344
Purchases of common stock --
excess over par value (464) (118) (295)
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 $16,614 $17,078 $17,208
------- ------- -------
------- ------- -------
Retained Earnings (Deficit):
Balance at beginning of period $ (532) $ (2,669) $ (3,114)
Net income 3,079 2,137 445
------- ------- -------
Balance at end of period $ 2,547 $ (532) $ (2,669)
------- ------- -------
------- ------- -------
Net Unrealized Gains (Losses) From
Marketable Equity Securities:
Balance at beginning of period $ 36 $ (47) $ 19
Gain (loss) during period 28 83 (66)
------- ------- -------
Balance at end of period $ 64 $ 36 $ (47)
------- ------- -------
------- ------- -------
</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,
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 3,079 $ 2,137 $ 445
Adjustments to reconcile net income to
net cash used by operating activities:
(Gains) losses from securities -- (94) 8
Gains from sales of real estate (2,802) (1,575) (1,390)
Net cash proceeds from sales of real estate 2,083 1,615 4,785
Mortgage loan payments 100 610 886
Real estate financing -- -- (100)
Real estate development costs (2,094) (1,946) (2,366)
Reimbursement of real estate
development costs 694 272 809
Changes in certain assets and liabilities:
Decrease (increase) in receivables 30 (294) (44)
Decrease in payables
and accrued liabilities (14) (212) (206)
Decrease in deferred income taxes (8) (8) (416)
Other net (484) (132) (309)
------- ------- -------
Total adjustments to net income (2,495) (1,764) 1,657
------- ------- -------
Net cash provided
by operating activities 584 373 2,102
Cash flows from investing activities:
Investment in limited liability
company (300) -- --
Proceeds from sales or maturities
of marketable securities -- 675 1,481
Purchases of marketable securities (212) -- (208)
------- ------- -------
Net cash provided (used) by investing activities (512) 675 1,273
Cash flows from financing activities:
Reductions in subordinated debentures (662) (486) (1,371)
Purchases of the Company's common stock (470) (120) (301)
Other -- (12) (10)
------- ------- -------
Net cash used by financing activities (1,132) (618) (1,682)
------- ------- -------
Net increase (decrease) in cash
and cash equivalents (1,060) 430 1,693
Cash and cash equivalents at beginning of period 5,098 4,668 2,975
------- ------- -------
Cash and cash equivalents at end of period $ 4,038 $ 5,098 $ 4,668
------- ------- -------
------- ------- -------
Supplemental disclosures of cash flow
information:
Cash paid during the year for
interest (net of amount capitalized) $ 55 $ 61 $ 57
------- ------- -------
------- ------- -------
</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 March 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128).
SFAS 128 requires the disclosure of basic earnings per share and modifies
existing guidance for computing fully diluted earnings per share. Under the
new standard, basic earnings per share is computed as earnings dividend by
weighted average shares, excluding the dilutive effects of stock options and
other potentially dilutive securities. Diluted earnings per share give effect
to such dilutive securities. The Company adopted the disclosure requirements of
SFAS 128 in the fourth quarter of 1997 (See Note N). Earnings per share data
for years prior to 1997 have been restated to reflect these requirements.
In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
(SFAS 131). SFAS No. 131 requires the Company to disclose information used by
management to evaluate its individual business segments. As the Company
currently is engaged in only one business segment, no additional disclosures
are required.
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.
15
<PAGE>
Note E - Marketable Securities
The amortized cost and fair values of marketable securities available for sale
as of December 31, 1997 and 1996 were as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
------------------------------------- -------------------------------------
Gross Gross
Amortized Unrealized Fair Amortized Unrealized Fair
Cost Gains Value Cost Gains Value
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Common Stock $ 216 $ 64 $ 280 $ 4 $ 36 $ 40
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
</TABLE>
Unrealized gains and losses are presented in stockholders' equity, net of
related taxes.
Proceeds from sales of securities available for sale were $675,000 and $981,000
in 1996 and 1995, respectively. There were no such sales in 1997. Gross gains
of $94,000 and gross losses of $8,000 were realized on securities sales in 1996
and 1995, 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 was repaid on March 25, 1997.
Note G - Real Estate Rental Property
Real estate rental property is an office building and 16 acres of land in Tempe,
Arizona. In 1995, the Company entered into a new 10-year net lease with Bank
One, Arizona, NA, a subsidiary of Banc One Corporation. The lease 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, 1997,
contractual rental revenues from the lease with Bank One are projected as
follows:
1998 $1,707,200
1999 1,826,000
2000 1,848,000
2001 1,936,000
2002 1,953,600
2003 and after 4,285,600
On January 1, 1996, in accordance with generally accepted accounting principles
(GAAP), 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, 1997 and 1996 was as follows (in thousands):
<TABLE>
<CAPTION>
Accumulated
Cost Depreciation Net
---- ------------ ---
<S> <C> <C> <C> <C>
1997 $4,470 $2,152 $2,318
------ ------ ------
------ ------ ------
1996 $4,470 $2,101 $2,369
------ ------ ------
------ ------ ------
</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 506 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 $13,529,000 at December 31, 1997 and $11,179,000 at
December 31, 1996, 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 March 1997, the two community development
districts issued an aggregate $60.7 million of capital improvement revenue
bonds, including $3.6 million issued in 1997. 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, 1997, parcels of land owned by
the Company's subsidiaries were subject to bonds in the principal amount of
approximately $26 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, 1997, $719,000 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, 1997, 1996 and 1995.
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, 1997, the $1,167,000 of these
debentures still due and outstanding, all of which have matured, was included
in payables and accrued liabilities. At December 31, 1997, the Company had
outstanding a $1,200,000 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, 1997 and 1996, the Company had recorded the following net
deferred tax liabilities. Amounts at December 31, 1996 have been adjusted to
conform to the Company's 1996 federal income tax returns as filed in
September 1997.
<TABLE>
<CAPTION>
Tax Effect (in thousands)
-------------------------
December 31, 1997 December 31, 1996
----------------- -----------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards $ 3,941 $ 4,411
Land basis (769) (180)
Effect of accelerated depreciation (183) (184)
Other (130) (16)
------- -------
2,859 4,031
Less: valuation allowance (2,859) (4,031)
------- -------
Deferred tax assets net of valuation allowance -- --
Deferred tax liabilities -- --
------- --------
Net deferred tax liabilities $ -- $ --
------- --------
------- --------
</TABLE>
The Company did not include a provision for federal income taxes in the
consolidated statement of operations for the years ended December 31, 1997,
1996 and 1995 because it realized the benefits, respectively, of $1,172,000,
$793,000 and $308,000 of deferred tax assets. The $99,000 benefit for state
income taxes for the year ended December 31, 1997, resulted from the reversal
of prior years' state income tax provisions, including the $32,000
18
<PAGE>
provision for income taxes for the year ended December 31, 1995.
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, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Expected federal statutory income tax rate 34.0% 34.0% 34.0%
State income taxes, net of federal tax benefit 4.3 4.2 4.6
Reversal of prior years' state income tax provisions (3.3) -- --
Utilization of deferred tax assets (38.3) (38.2) (31.9)
----- ----- -----
Effective tax rate (3.3)% --% 6.7%
----- ----- -----
----- ----- -----
</TABLE>
At December 31, 1997, the Company had available for federal income tax purposes
unused operating loss carryforwards of approximately $10,300,000 which expire
as follows (in thousands):
<TABLE>
<CAPTION>
Year of Expiration
------------------
<S> <C>
2002 $ 600
2003 1,100
2004 700
2005 500
2006 700
2007 1,500
2008 2,100
2009 2,200
2010 100
2011 800
-------
$10,300
-------
-------
</TABLE>
Note K - Rental Commitments
Rental expense, primarily for office premises, amounted to $59,000, $56,000 and
$53,000 for the years ended December 31, 1997, 1996 and 1995, respectively.
As of December 31, 1997, the approximate minimum rental commitments under the
Company's office lease, which expires on January 31, 1999, were $47,000 in 1998
and $4,000 in 1999.
19
<PAGE>
Note L - Stockholders' Equity
From time to time, the Company purchases shares of its common stock in the open
market. In 1997, 1996 and 1995 the Company purchased shares of its common
stock, primarily in open market transactions: 63,700 shares for $470,000 in
1997, 19,300 shares for $120,000 in 1996, and 56,200 shares for $301,000 in
1995.
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, as amended).
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
December 9, 1997, there were 40,500 shares of the Company's common stock
available for grant under the 1993 Employee Plan. On that date, the Committee
awarded options for 40,500 shares of the Company's common stock. There are no
shares currently available under the 1993 Employee Plan.
The Company intends to propose at its 1998 Annual Meeting of Stockholders the
adoption of the 1997 Long-Term Incentive Plan (the "1997 Plan"). The 1997
Plan will, among other things, provide that 560,000 shares of the Company's
common stock be made available for grant under the 1997 Plan. On December 9,
1997, the Compensation Committee of the Company's Board of Directors awarded
options for 55,500 shares of the Company's common stock under the 1997 Plan,
subject to the approval of the 1997 Plan by the stockholders of the Company at
its 1998 Annual Meeting of Stockholders. The tables, schedules and text
appearing elsewhere in this Report assume that all 55,500 of the options under
the 1997 Plan were granted as of December 31, 1997 and were exercisable as of
December 31, 1997.
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
20
<PAGE>
options for 5,000 shares each upon approval of the plan in May 1994 and
subsequently received options for 2,000 shares each on the dates of the annual
meetings of stockholders in May 1995, May 1996 and May 1997. 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.
The Company does not recognize any compensation expense related to the options
that it grants as they are all exercisable at the fair value of the Company's
stock on the date of grant. This method of accounting for options is acceptable
under GAAP. In 1996 the Financial Accounting Standards Board established a
second, preferred method of accounting for compensation awarded through options
which applies an option pricing theory to measuring option compensation. This
method of accounting is set forth in Statement of Financial Accounting Standards
No. 123 "Accounting for Stock Based Compensation" (SFAS 123). SFAS 123 permits
the continued application of the method employed by the Company. Had
compensation costs for the Company's option plans been determined consistent
with SFAS 123, the Company's net income and earnings per share would have been
reduced to the following pro forma amounts as of December 31, 1997, 1996 and
1995 (in thousands, except per share amounts):
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Net income: As reported $ 3,079 $ 2,137 $ 445
SFAS 123 adjustment (188) (163) (108)
------ ------ ------
Pro forma $2,891 $ 1,974 $ 337
------ ------ ------
------ ------ ------
Diluted income
per share: As reported $ .75 $ .53 $ .11
SFAS 123 adjustment (.04) (.04) (.03)
------ ------ ------
Pro forma $ .71 $ .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, 1997 and March 1, 1998, no shares were available for future
grant under the 1993 Employee Plan, 73,000 shares were available for future
grant under the 1994 Director Plan and 789,250 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.
21
<PAGE>
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 1997, 1996 and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Risk free interest rate 5.7% 6.4% 5.8%
Expected dividend yield none none none
Expected life of options 5 years 5 years 5 years
Expected volatility 0.1% 5.0% 5.0%
</TABLE>
Based on these assumptions, the weighted average fair value of options granted
would be calculated as $2.06 in 1997, $1.68 in 1996 and $1.20 in 1995. The
SFAS 123 adjustments for 1997, 1996 and 1995 appearing above are the product of
these weighted average fair values and the number of options granted in each of
the three 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.
A summary of the status of the Company's stock option plans at December 31,
1997, 1996 and 1995 and changes during the years then ended is presented in the
table below:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Options Price Options Price Options Price
------ ----- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
Beginning Of
Year 704,500 $ 3.55 598,500 $ 3.06 509,500 $ 2.65
Granted 100,000* 8.28 109,000 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 804,500 4.14 704,500 3.55 598,500 3.06
Exercisable at End
of Year 789,250 4.10 687,500 3.51 587,000 3.03
* - 55,500 of these options are subject to stockholder approval of the 1997 Plan
at the 1998 Annual Meeting of Stockholders.
</TABLE>
22
<PAGE>
The following table summarizes information about stock options outstanding at
December 31, 1997:
<TABLE>
<CAPTION>
Options
Outstanding Options
Weighted- Weighted - Exercisable
Number Average Average Number Weighted-
Range of Outstanding at Remaining Exercise Exercisable at Average
Exercise Prices 12/31/97 Contractual Life Price 12/31/97 Exercise Price
--------------- -------- ---------------- ----- -------- --------------
<S> <C> <C> <C> <C> <C>
$2.50 to $2.88 481,500 4.73 years $2.67 481,500 $2.67
$3.87 to $4.75 110,000 7.83 years 4.67 107,500 4.69
$5.87 to $6.25 113,000 8.87 years 6.23 104,250 6.24
$8.25 to $9.00 100,000* 9.93 years 8.28 96,000 8.25
------- ------
804,500 789,250
------- -------
------- -------
* - 55,500 of these options are subject to stockholder approval of the 1997
Plan at the 1998 Annual Meeting of Stockholders.
</TABLE>
Note N - Income Per Share
Basic income per share for the years ended December 31, 1997, 1996 and 1995 has
been computed using the weighted average number of shares of common stock
outstanding. The weighted average number of common shares outstanding for the
years ended December 31, 1997, 1996 and 1995 was 3,697,000, 3,746,000 and
3,788,000, respectively.
Diluted income per share for the years ended December 1997, 1996 and 1995 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,
1997, 1996 and 1995 was 4,078,000, 4,042,000 and 4,029,000, respectively.
23
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
BF ENTERPRISES, INC. AND SUBSIDIARIES
December 31, 1997
(Thousands of dollars)
Cost Capitalized Gross Amount at Which
Initial Cost to Company Subsequent to Acquisition Carried at Close of Period
----------------------- ------------------------- --------------------------
Life On Which
Depreciation
in Latest
Statements of
Buildings and Carrying Buildings and Accumulated Date of Date Operations
Description Encumbrances Land Improvements Improvements Costs Land Improvements Total Depreciation Construction Acq'd is Computed
- ----------- ------------ ---- ------------ ------------ ----- ---- ------------ ----- ------------ ------------ ----- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Office and
Manufacturing
Building -
Tempe, Arizona $ 736 $ 3,734 $ 736 $ 3,734 $ 4,470 $ 2,152 1977 1977 40 Years
----- ------- ----- ------- ------- -------
----- ------- ----- ------- ------- -------
</TABLE>
Notes:
(1) For Federal income tax purposes at December 31, 1997, real estate was
carried at a cost of $1,840,000.
(2) Reconciliation of "Real Estate and Accumulated Depreciation":
<TABLE>
<CAPTION>
Year Ended December 31,
1997 1996 1995
------------------------- ----------------------- -------------------------
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 $ 2,101 $ 4,470 $ 2,050 $ 4,470 $ 1,999
Additions:
Depreciation
charged to
costs &
expenses 51 51 51
------- ------- ------- ------- ------- -------
Balance at end
of year $ 4,470 $ 2,152 $ 4,470 $ 2,101 $ 4,470 $ 2,050
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
</TABLE>
24
<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 1998.
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,
1997 and 1996.
Consolidated statements of income for the years ended
December 31, 1997, 1996 and 1995.
Consolidated statements of stockholders' equity for the years
ended December 31, 1997, 1996 and 1995.
Consolidated statements of cash flows for the years ended
December 31, 1997, 1996 and 1995.
Notes to financial statements.
Selected quarterly financial data for the years ended
December 31, 1997 and 1996 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
Schedules I, II, IV 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 -
incorporated by reference to Exhibit 10.10c to the
registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
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, there unto duly authorized.
BF ENTERPRISES, INC.
--------------------
(Registrant)
Date: March 26, 1998 By: /s/ S. Douglas Post
-----------------------
S. Douglas Post, Vice President
and Treasurer
(Principal Accounting Officer)
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 26, 1998 By: /s/ Brian P. Burns
----------------------------
Brian P. Burns
Chairman of the Board of Directors,
President and Chief Executive Officer
(Principal Executive Officer)
Date: March 26, 1998 By: /s/ Paul Woodberry
----------------------------
Paul Woodberry
Executive Vice President,
Chief Financial Officer and a
Director
(Principal Financial Officer)
Date: March 26, 1998 By: /s/ Daniel S. Mason
------------------------------
Daniel S. Mason, Director
Date: March 26, 1998 By: /s/ Ralph T. McElvenny, Jr.
------------------------------
Ralph T. McElvenny, Jr., Director
Date: March 26, 1998 By: /s/ Charles E.F. Millard
-------------------------------
Charles E.F. Millard, Director
Date: March 26, 1998 By: /s/ S. Douglas Post
-------------------------------
S. Douglas Post, Vice President
and Treasurer
(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.
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.
32
<PAGE>
Exhibit Sequential
Number Page Number
- ------ -----------
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 - incorporated by
reference to Exhibit 10.10c to the registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996.
*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.
33
<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, 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.
10.19a Office Lease, dated as of March 26, 1990, between Bush Street Limited
34
<PAGE>
Exhibit Sequential
Number Page Number
- ------ -----------
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. 36
21 Subsidiaries of the registrant. 37
- --------------------------------------------
* Management contract or compensatory plan required to be
filed as an exhibit pursuant to Item 14 (c) of Form 10-K.
35
EXHIBIT 11
BF ENTERPRISES, INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended
December 31,
---------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Net income $3,079 $ 2,137 $ 445
Weighted average number of shares
outstanding:
Common stock 3,697 3,746 3,788
Common stock equivalents - stock
options (A) 381 296 241
------- ------- -------
4,078 4,042 4,029
------- ------- -------
------- ------- -------
Net income per share:
Basic - based on
weighted average number
of shares of common stock
outstanding $ .83 $ .57 $ .12
------- -------- --------
------- -------- --------
Diluted - based on weighted average
number of shares of common stock
and common
stock equivalents outstanding $ .75 $ .53 $ .11
-------- -------- --------
-------- -------- --------
</TABLE>
(A) Computation is based on the treasury stock method using the average market
price.
36
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
BF University Club Apartments, Inc. Delaware
Boothe Financial Corporation Delaware
Trout Creek Properties, Inc. Delaware
Trout Creek Development Corporation Delaware
</TABLE>
37
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 4,038
<SECURITIES> 280
<RECEIVABLES> 89
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21,842
<CURRENT-LIABILITIES> 0
<BONDS> 719
0
0
<COMMON> 367
<OTHER-SE> 19,225
<TOTAL-LIABILITY-AND-EQUITY> 21,842
<SALES> 3,456
<TOTAL-REVENUES> 5,606
<CGS> 654
<TOTAL-COSTS> 654
<OTHER-EXPENSES> 1,917
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 55
<INCOME-PRETAX> 2,980
<INCOME-TAX> (99)
<INCOME-CONTINUING> 3,079
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,079
<EPS-PRIMARY> .75
<EPS-DILUTED> .75
</TABLE>
