Item 1. Business
GENERAL DEVELOPMENT OF BUSINESS
Thackeray Corporation ("Thackeray" or the "Company") is a Delaware corporation which holds an investment in a real estate partnership, as well as real estate for investment.
DESCRIPTION OF BUSINESS
Thackeray's business is the management of its real estate investments. The Company does not presently intend to acquire additional real estate assets. For information with respect to Thackeray's real estate, see Notes 1 and 2 to the Consolidated Financial Statements included in the Annual Report, which Notes are incorporated herein by reference.
On May 20, 1996, the Company and affiliates of Belz Enterprises ("Belz") entered into an Agreement of Limited Partnership of BT Orlando Limited Partnership. Pursuant to this agreement, the Company agreed to contribute approximately 140 acres of its Orlando, Florida property to the partnership which property is valued at $15,246,000 for capital account purposes. The partnership, with an affiliate of Belz and Brennand-Paige Industries, Inc., a subsidiary of the Company, as general partners, is in the process of developing, constructing, and leasing an 830,000 square foot retail and entertainment shopping center complex on the property. The Company has a 35% general partner interest in the partnership and is entitled to certain cumulative, noncompounded preferential distributions of 9% on its Preferred Partnership Capital, as defined. The Company will also participate in the cash flow, sales proceeds and refinancing proceeds from the operation, financing or disposition of such project. The partnership agreement also provides for excess cash flow to first be used to reimburse the partners for certain preconstruction expenses including real estate taxes incurred by the Company. The agreement also contains certain buy-sell provisions among the partners.
In addition, on May 20, 1996, the Company and Belz entered into a binding letter agreement regarding the development of the remaining approximately 78 acres of the Company's Orlando, Florida property, which property will be valued at $8,487,000 for capital account purposes. Pursuant to this letter agreement, the parties agree to form a new partnership to develop 22.5 acres of such property as commercial property and 55.5 acres thereof as multi-family residential property, upon completion of the development of the 140 acres and obtaining the requisite construction financing. The Company, through a subsidiary, and Belz, or one of its affiliates, will be 50% owners and general partners of such partnership and the Company will be entitled to certain preferential distributions.
In August 1999, the partners of the BT Orlando Limited Partnership revised the partnership agreement pursuant to which they revised the formula for determining preferential returns due to the Company for its 140 acre land contribution. Effective September 1999 and through March 2000, such returns will approximate $20,000 monthly, thereafter, the returns will approximate $45,000 monthly and will remain at that level unless and until the partnership borrows approximately an additional $75 million, the estimated amount needed to complete the 140 acre project, at which time the returns will approximate the original formula amount of $110,000 monthly.
In addition, the partners have agreed that costs incurred by the partners on behalf of and reimbursable by the partnership related to real estate taxes and construction costs prior to the closing of construction financing shall be treated as a capital contribution and shall be entitled to a 9% cumulative non-compounded preferred return. Previously, such costs were presented by the Company as a receivable from the partnership. Costs incurred by the partners on behalf of the partnership subsequent to the closing of the construction financing are reimbursable with interest at the prime rate.
Through December 31, 1999, cumulative preferred returns to Thackeray approximate $101,000, which have not been recognized in the accompanying financial statements. In addition, in August 1999, the partners revised the letter agreement regarding the remaining 78 acres of land, setting forth certain additional time limitations regarding the establishment of a new partnership for the development of such parcel.
In September 1999, the Company's real estate partnership closed $40 million of construction financing and simultaneously the Company deeded 140 acres of its Orlando, Florida acreage with an historical carrying value of $3.471 million to the partnership. The Company also pledged its remaining contiguous 78 acres as additional collateral to secure the construction loan. As of December 31, 1999, the partnership has borrowed $25.6 million under the construction loan and intends to draw down the remaining loan facility during the year 2000. Of the total loan, $22 million is due for repayment in August 2000. The partnership will be required to refinance this portion of the loan, as well as obtain an additional $75 million of financing, in order to complete the 140 acre phase of the project.
Ground breaking commenced in mid-1988 and a Cinemark 20 screen theatre opened December 1999. Two additional anchor tenants are scheduled to open in 2000.
In November 1999, the Company sold its 99 year, with 72 years remaining, Dade County, Florida leasehold property to its lessee for approximately $784,000. The carrying value of the leasehold property was $425,000, and the revenue from such property represented all of the Company's rental income in 1997, 1998 and 1999.
Indebtedness
The Company has no outstanding borrowings.
General As of December 31, 1999, the Company had two employees.
Item 2.
Item 2. Properties
For additional information with respect to the Company's investments in real estate and to its lease obligations, see Notes 1, 2 and 5 to the Consolidated Financial Statements included in the Annual Report, which Notes are incorporated herein by reference.
Thackeray's executive offices are located at 509 Madison Avenue, New York, New York 10022. Future minimum rental in effect at December 31, 1999 are $31,500 for each of the years 2000, 2001, 2002 and are $2,625 in 2003.
Item 3.
Item 3. Legal Proceedings
There are no legal proceedings currently pending against the Company or its subsidiaries.
Item 4.
Item 4. Submission of Matters to a Vote of Stockholders
During the quarter ended December 31, 1999, no matters were submitted to a vote of stockholders through the solicitation of proxies or otherwise.
PART II
Item 5.
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters
Reference is made to the information set forth in the section entitled "Market for Thackeray's Common Stock and Related Stockholder Matters" in the Annual Report, which section is incorporated herein by reference. Thackeray transferred the trading of its common stock to the American Stock Exchange from the New York Stock Exchange effective April 20, 1998.
Item 6.
Item 6. Selected Financial Data
Reference is made to the information set forth in the section entitled "Selected Financial Data" in the Annual Report, which section is incorporated herein by reference.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Reference is made to the information set forth in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report, which section is incorporated herein by reference.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable.
Item 8.
Item 8. Financial Statements and Supplementary Data
Reference is made to the information set forth in the following sections of the Annual Report, which sections are incorporated herein by reference:
1. Report of Independent Public Accountants.
2. Consolidated Balance Sheets -- December 31, 1999 and 1998.
3. Consolidated Statements of Operations for the years ended December 31, 1999, 1998 and 1997.
4. Consolidated Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997.
5. Notes to Consolidated Financial Statements -- December 31, 1999, 1998 and 1997.
Item 9.
Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure
Not Applicable.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
Reference is made to the information to be set forth in the section entitled "Election of Directors" in the definitive proxy statement involving the election of directors in connection with the Annual Meeting of Stockholders of the Company to be held on May 4, 2000 (the "Proxy Statement"), which section is incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after December 31, 1999 pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended.
Item 11.
Item 11. Executive Compensation
Reference is made to the information to be set forth in the section entitled "Election of Directors" in the Proxy Statement, which section is incorporated herein by reference.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Reference is made to the information to be set forth in the sections entitled "Ownership of Voting Securities" and "Election of Directors - Security Ownership of Management" in the Proxy Statement, which sections are incorporated herein by reference.
Item 13.
Item 13. Certain Relationships and Related Transactions
Reference is made to the information to be set forth in the section entitled "Election of Directors - Compensation and Interest of Management in Certain Transactions" in the Proxy Statement, which section is incorporated herein by reference.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) and (2) - The response to this portion of Item 14 is submitted as a separate section of this report entitled "List of Financial Statements and Financial Statement Schedules."
(3) - Exhibits:
3(a)(i) - Certificate of Incorporation of the Company. (1)
3(a)(ii) - Certificate of Designation of $4.15 Cumulative Preferred Stock. (2)
3(a)(iii) - Amendment to Certificate of Incorporation of the Company. (3)
3(b) - By-Laws of the Company. (1)
10(a) - Agreement of Limited Partnership of BT Orlando Limited Partnership, dated May 20, 1996, among BEF, Inc., Brennand-Paige Industries, Inc., BT Partnership and EST Orlando, Ltd. (4)
10(b)- Number 2 Partnership Letter Agreement, dated May 20, 1996, between the Company and Belz Investco L.P. (4)
11 - Statement re Computation of Per Share Data.
13 - The Company's 1999 Annual Report to Stockholders.
21 - Subsidiaries of the Company.
27 - Financial Data Schedule.
99 - Financial Statements of BT Orlando Limited Partnership as of December 31, 1999 and 1998.
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(1) Incorporated by reference to the Company's Registration Statement on Form S-14 (SEC File No. 2-73435).
(2) Incorporated by reference to the Company's Registration Statement on Form S-11 (SEC File No. 2-84299).
(3) Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1999.
(4) Incorporated by reference to the Company's Proxy Statement, dated August 5, 1996.
(b) - During the quarter ended December 31, 1999, the Company did not file any reports on Form 8-K.
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.
Date: March 29, 2000 THACKERAY CORPORATION (Registrant)
By: /s/ Martin J. Rabinowitz ----------------------------------- Name: Martin J. Rabinowitz Title: President
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.
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1) and (2)
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1999
THACKERAY CORPORATION
NEW YORK, NEW YORK
Form 10-K -- Items 14(a)(1) and (2)
THACKERAY CORPORATION
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Thackeray Corporation, included in the Annual Report to Stockholders for the year ended December 31, 1999, are incorporated by reference in Item 8 of this report.
1. Report of Independent Public Accountants.
2. Consolidated Balance Sheets -- December 31, 1999 and 1998.
3. Consolidated Statements of Operations for the years ended December 31, 1999, 1998 and 1997.
4. Consolidated Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997.
5. Notes to Consolidated Financial Statements -- December 31, 1999, 1998 and 1997.
The following financial statement schedules of Thackeray Corporation are filed herewith:
Report of Independent Public Accountants on Financial Statement Schedules
Schedule III - Real Estate and Accumulated Depreciation
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Stockholders of Thackeray Corporation:
We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in Thackeray Corporation's 1999 Annual Report to Stockholders incorporated by reference in this Form 10-K, and have issued our report thereon dated March 29, 2000. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in the List of Financial Statements and Financial Statement Schedules are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic consolidated financial statements. These schedules have been subjected to the auditing procedures applied in the 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
New York, New York March 29, 2000
Schedule III
Thackeray Corporation and Subsidiaries Real Estate and Accumulated Depreciation For the years ended December 31, 1999, 1998 and 1997
EXHIBIT INDEX
TO
THACKERAY CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1999
Exhibit No. Description of Document - ----------- -----------------------
3(a)(i) -- Certificate of Incorporation of the Company. (1)
3(a)(ii) -- Certificate of Designation of $4.15 Cumulative Preferred Stock. (2)
3(a)(iii) -- Amendment to Certificate of Incorporation of the Company. (3)
3(b) -- By-laws of the Company. (1)
10(a) -- Agreement of Limited Partnership of BT Orlando Limited Partnership, dated May 20, 1996, among BEF, Inc., Brennand-Paige Industries, Inc., BT Partnership and EST Orlando, Ltd. (4)
10(b) -- Number 2 Partnership Letter Agreement, dated May 20, 1996, between the Company and Belz Investco L.P. (4)
11 -- Statement re Computation of Per Share Data.*
13 -- The Company's 1999 Annual Report to Stockholders.*
21 -- Subsidiaries of the Company.*
27 -- Financial Data Schedule.*
99 -- Financial Statements of BT Orlando Limited Partnership as of December 31, 1999 and 1998.*
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* Filed herewith
(1) Incorporated by reference to the Company's Registration Statement on Form S-14 (SEC File No. 2-73435).
(2) Incorporated by reference to the Company's Registration Statement on Form S-11 (SEC File No. 2-84299).
(3) Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1999.
(4) Incorporated by reference to the Company's Proxy Statement, dated August 5, 1996.