SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
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 1-8254
THACKERAY CORPORATION
---------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 04-2446697
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
509 MADISON AVENUE, SUITE 1714, NEW YORK, NEW YORK 10022
--------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 759-3695
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------- -------------------
Common Stock, $.10 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
[COVER PAGE 1 OF 2 PAGES]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy materials or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Aggregate market value of the voting stock (which consists solely of shares of
Common Stock) held by non-affiliates of the registrant as of April 9, 2002
computed by reference to the closing sale price of the registrant's Common Stock
on the American Stock Exchange on such date: $7,896,266
Number of shares of the registrant's Common Stock outstanding as of April 9,
2002: 5,107,401.
DOCUMENTS INCORPORATED BY REFERENCE
1. Certain portions of the registrant's Annual Report to Stockholders for the
fiscal year ended December 31, 2001 (the "Annual Report") are incorporated
by reference into Parts I and II of this report.
2. Certain portions of the registrant's definitive Proxy Statement to be filed
pursuant to Regulation 14A of the Securities Exchange Act of 1934, as
amended, in connection with the Annual Meeting of Stockholders of the
registrant to be held on May 2, 2002 are incorporated by reference into Part
III of this report.
[COVER PAGE 2 OF 2 PAGES]
2
PART I
FORWARD LOOKING INFORMATION
This Annual Report contains "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward
looking statements are based upon management's expectations, estimates,
projections and assumptions. Words such as "expects", "anticipates", "intends",
"plans", "believes", "estimates", and variations of such words and similar
expressions are intended to identify such forward looking statements which
include, but are not limited to, projections of capital expenditures, earnings,
income taxes payable, financing and capital infusions. These forward looking
statements are subject to risks and uncertainties which could cause the
Company's actual results or performance to differ materially from those
expressed or implied in such statements. These risks and uncertainties include,
but are not limited to the following: general risks affecting the real estate
industry, including the need to enter into new leases or renew leases on
unfavorable terms to generate rental revenues, competition for tenants from
other owners of retail properties, competition from other retailers, successful
operations by and the financial condition of tenants, particularly major
tenants, adverse changes in Orlando, Florida and national economic and market
conditions, and access to and adequacy of financing to complete the Company's
Festival Bay project in Orlando, Florida.
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.
In 1996, the Company and affiliates of Belz Enterprises ("Belz")
entered into an Agreement of Limited Partnership of BT Orlando Limited
Partnership ("BT Orlando"). Pursuant to this agreement, the Company agreed to
contribute approximately 140 acres of its Orlando, Florida property to the Joint
Venture (JV) partnership. The JV is in the process of developing, constructing
and leasing an approximately 925,000 square foot retail and entertainment
shopping center complex - Festival Bay - on the property which is to consist of
655,000 sq.ft. of anchor and other perimeter tenants and 270,000 sq.ft of
3
interior small stores. The Company has a 35% general partner interest in the
partnership and will also participate in the cash flow, sales proceeds and
refinancing proceeds from the operation, financing and disposition of such
project. The agreement also contains certain buy-sell provisions among the
partners. The Company and Belz also entered into a letter agreement in 1996
regarding the development of the remaining approximately 78 acres of the
Company's Orlando, Florida property. Pursuant to this letter agreement , the
parties agreed 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. The Company 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 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 to the partnership and also pledged its
remaining contiguous 78 acres as additional collateral to secure the
construction loan.
Development and leasing efforts for the project are on-going. A 20
screen Cinemark theatre opened in December 1999, a Bass Pro 163,000 sq.ft.
anchor store opened in June 2000, and a 50,000 sq.ft. Van's Skate Park opened in
January 2002. Leases for 70% of the mall have been executed as of December 31,
2001.
The $40 million construction loan was refinanced in October 2001 and
additional financing was obtained by the real estate partnership as part of a
$104.3 million third party facility. In connection with the financing, the
partnership agreement was materially revised and amended to provide for certain
adjustments to the economic rights and obligations of the partners. In
accordance with the August 2001 revision to the partnership agreement, the
Company contributed $1.75 million to the partnership capital and Belz
contributed $12.1 million. In addition to the $12.1 million, Belz contributed
$9.3 million through December 31, 2001, which is entitled to a 9% annual,
cumulative, uncompounded preferential return and is senior to all prior
partnership investments of the Company and Belz, which investments are not
entitled to a preferential return subsequent to July 2001.
The partnership experienced a slow-down in rental activity by
mid-year 2001, which worsened in the wake of 9/11. Orlando tourism was adversely
effected, and, theme park attendance and hotel occupancy rates dropped
substantially. Resort taxes collected in the Orlando area in December 2001 were
more than 25% lower than December 2000 comparables and Orlando International
Airport traffic declined 20% in the Fourth Quarter 2001 vs. 2000. Festival Bay
rental activity is expected to remain sluggish pending an economic recovery and
an increase in Orlando tourism levels.
Three anchor tenants aggregating 63,200 sq.ft. have requested relief
from their leases in the form of significant downsizing to smaller and less
expensive space. Four small store tenants cancelled leases and several other
small store tenants are considering downsizing. One new anchor tenant lease was
executed in 2001 for 38,000 sq.ft. as were leases for three small stores.
Several new prospects signed letters of intent in early 2002 for space
4
aggregating 40,000 sq.ft. Discussions are ongoing in an effort to minimize any
impact to the partnership from downsizing by tenants.
In August 2001, the Company and Belz also entered into a new letter
agreement regarding development of the remaining approximately 78 acres of the
Company's Orlando, Florida property, thereby superseding in its entirety the
1996 letter agreement cited above.
Pursuant to this new letter agreement, the parties have agreed 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 Festival Bay center and obtaining the
requisite construction financing. As discussed above, the property has been
pledged as additional collateral for the BT Orlando construction loans. The
Company, through a subsidiary, and Belz , or one or more of its affiliates, will
be 50% owners and general partners of such partnership and the Company will be
entitled to certain preferential distributions. The property will be valued at
approximately $8.5 million for capital account purposes.
Neither the commercial acreage nor the residential acreage will be
transferred to the new partnership (and the letter agreement will terminate)
unless Belz and Thackeray agree upon conceptual construction plans, an overall
development plan, and a development budget for the 78 acres on or before June
30, 2003. If the Festival Bay center is not completed by December 31, 2003, then
neither the commercial acreage nor the residential acreage will be transferred
and the letter agreement shall terminate. Neither the commercial acreage nor the
residential acreage will be transferred to the new partnership (and the letter
agreement shall terminate) if construction financing is not obtained within 12
months from completion of the Festival Bay center, in an amount sufficient to
fully fund development of the 78 acres. The deadline for securing construction
financing may be deferred with respect to the residential acreage if
construction financing for at least 33% of the residential acreage is obtained
and closed within 12 months of completion of the Festival Bay center; however,
there is no extension right as to the requirement of closing of construction
financing for the commercial acreage.
The JV's loan agreement contains a default provision, which requires
a minimum number of major tenant spaces to be opened, operating and paying full
base rent by January 31, 2003. There can be no assurances that the minimum lease
requirements will be met.
Indebtedness
The Company has no outstanding borrowings.
General
As of December 31, 2001, the Company had two employees.
5
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 rent payments are $31,500 for
the year 2002 and $2,625 in 2003.
Item 3. Legal Proceedings
There are no legal proceedings currently pending against
the Company or its subsidiary.
Item 4. Submission of Matters to a Vote of Stockholders
During the quarter ended December 31, 2001, no matters were
submitted to a vote of stockholders through the
solicitation of proxies or otherwise.
PART II
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.
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. 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. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable.
6
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, 2001 and
2000.
3. Consolidated Statements of Operations and
Comprehensive Income for the years ended December 31,
2001, 2000 and 1999.
4. Consolidated Statements of Cash Flows for the years
ended December 31, 2001, 2000 and 1999.
5. Notes to Consolidated Financial Statements --
December 31, 2001, 2000 and 1999.
Item 9. Change in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable.
PART III
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 2, 2002 (the "Proxy Statement"),
which section (other than the Audit Committee Report) 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, 2001 pursuant to
Regulation 14A of the Securities Exchange Act of 1934, as amended.
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
(other than the Audit Committee Report) is incorporated herein by reference.
7
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 (other
than the Audit Committee Report) are incorporated herein by reference.
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 (other
than the Audit Committee Report) is incorporated herein by reference.
PART IV
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) - Amended and Restated Agreement of Limited Partnership of BT
Orlando Limited Partnership, dated August 1, 2001, among
BEF, Inc., Brennand-Paige Industries, Inc., BT Partnership
and EST Orlando, Ltd. (4)
10(b) - Number 2 Partnership Letter Agreement, dated August 1, 2001,
between the Company and Belz Investco G.P.*
10(c) - Ratification of Agreement dated August 1, 2001.*
8
11 - Statement re Computation of Per Share Data.*
13 - The Company's 2001 Annual Report to Stockholders.*
21 - Subsidiaries of the Company.*
99 - Financial Statements of BT Orlando Limited Partnership as of
December 31, 2001 and 2000 and for the years ended December
31, 2001, 2000 and 1999.*
99.1 - Letter to Commission pursuant to Temporary Note 3T.*
- --------------------------------
* 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, 1998.
(4) Incorporated by reference to the Company's quarterly
report on Form 10-Q for the quarterly period ended September 30, 2001.
(b) - During the quarter ended December 31, 2001, the
Company filed one report on Form 8-K on October 8, 2001.
9
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: April 9, 2002
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.
Signature Title Date
--------- ----- ----
/s/ Martin J. Rabinowitz Chairman of the Board, April 9, 2002
- ------------------------- President and Director
Martin J. Rabinowitz (Principal Executive Officer)
/s/ Jules Ross Vice President, Finance, Treasurer, April 9, 2002
- ------------------------- Secretary and Director (Principal
Jules Ross Financial and Accounting Officer)
/s/ Ronald D. Rothberg Director April 9, 2002
- -------------------------
Ronald D. Rothberg
/s/ Moses Rothman Director April 9, 2002
- -------------------------
Moses Rothman
10
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1) and (2)
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 2001
THACKERAY CORPORATION
NEW YORK, NEW YORK
11
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,
2001, are incorporated by reference in Item 8 of this report.
1. Report of Independent Public Accountants.
2. Consolidated Balance Sheets -- December 31, 2001 and 2000.
3. Consolidated Statements of Operations and Comprehensive
Income for the years ended December 31, 2001, 2000 and 1999.
4. Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999.
5. Notes to Consolidated Financial Statements -- December 31,
2001, 2000 and 1999.
The financial statements of BT Orlando Limited Partnership as of December 31,
2001 and 2000 and for each of the three years in the period ended December 31,
2001, representing the financial statements of a significant 50% or less owned
person, are filed herewith.
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 (Thackeray
Corporation)
Schedule III - Real Estate and Accumulated Depreciation (BT Orlando
Limited Partnership)
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.
12
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 auditing standards generally accepted in the
United States, the consolidated financial statements included in Thackeray
Corporation's 2001 Annual Report to Stockholders incorporated by reference in
this Form 10-K, and have issued our report thereon dated April 9, 2002. 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
April 9, 2002
13
Thackeray Corporation and Subsidiary
Real Estate and Accumulated Depreciation
For the years ended December 31, 2001, 2000 and 1999
Schedule III
Cost capitalized Gross amount
Initial cost subsequent to at which carried Accumulated
Description Encumbrances to the Company acquisition at close of period depreciation
- ----------- ------------ -------------- ----------- ------------------ ------------
78 Acres of unimproved land,
Orlando, Florida (A) $1,860,000 $ 0 $1,860,000 $0
2001 2000 1999
---- ---- ----
Balance at Beginning of period $1,860,000 $1,860,000 $5,756,000
Cost of real estate deeded to real estate partnership 0 0 (3,471,000)
Cost of real estate sold 0 0 (425,000)
-- -- ----------
Balance at End of period $1,860,000 $1,860,000 $1,860,000
========== ========== ==========
Federal tax basis is the same as book basis. (A)
(A) The property is pledged as collateral for the $12.8 million portion of the
credit agreement of BT Orlando Limited Partnership.
** TABLE CONTINUED......**
14-A
Life on which
depreciation in
Date of Date latest income
Description construction acquired statement is computed
- ----------- ------------ -------- ---------------------
78 Acres of unimproved land,
Orlando, Florida N/A 1981 N/A
(A) The property is pledged as collateral for the $12.8 million portion of the
credit agreement of BT Orlando Limited Partnership.
14-B
BT Orlando Limited Partnership
Real Estate and Accumulated Depreciation
As of December 31, 2001
A B C
Description Encumbrances Initial Cost to the Partnership
- -------------------------------------------------- ----------------- -----------------------------------
Land Bldgs and Imp.
140 acre development which will $40,277,643 $3,471,528 -
be a retail and entertainment
complex of approximately 925,000
leasable square feet, currently
under construction, in Orlando
Florida.
Reconciliation of Gross Carrying Amount 2001 2000 1999
- -------------------------------------------------- ----------------- -----------------------------------
Balance at beginning of period $48,775,456 $34,594,757 $4,322,336
Additions during period 14,180,699
Improvements/development costs 19,276,035 14,343,879
Non cash contribution of land by
BPI at its historical carrying value - - 3,471,528
Construction costs paid by BPI and
BT Partnership subject to
reimbursement by BT Orlando - - 12,457,014
----------------- -----------------------------------
Balance at end of period 68,051,491 48,775,456 34,594,757
================= ===================================
Reconciliation of Accumulated Depreciation
- --------------------------------------------------
Balance at beginning of period 1,652,326 34,968 -
Additions during the period:
Depreciation expense for the year 2,237,647 1,617,358 34,968
----------------- -----------------------------------
Balance at end of period 3,889,973 1,652,326 34,968
================= ===================================
The aggregate cost for federal income tax purposes as of December 31, 2001 is
the same as the aggregate cost for book purposes.
** TABLE CONTINUED......**
15-A
A D E
Description Cost capitalized subsequent Gross carrying amount at
to acquisition close of period
- -------------------------------------- --------------------------------------- --------------------------------------------------
Improvements Carrying Costs Land Bldgs and Imp. Total
140 acre development which will $59,579,601 $5,000,362 $3,471,528 $64,579,963 $68,051,491
be a retail and entertainment
complex of approximately 925,000
leasable square feet, currently
under construction, in Orlando
Florida.
The aggregate cost for federal income tax purposes as of December 31, 2001 is
the same as the aggregate cost for book purposes.
** TABLE CONTINUED......**
15-B
A Schedule III
Description
Life on which depreciation
- -------------------------------------------------- Accumulated Date of Date in latest income statement
Depreciation Construction acquired is computed
140 acre development which will 3,889,973 Ongoing N/A 7 - 40 years
be a retail and entertainment
complex of approximately 925,000
leasable square feet, currently
under construction, in Orlando
Florida.
The aggregate cost for federal income tax purposes as of December 31, 2001 is
the same as the aggregate cost for book purposes.
15-C
EXHIBIT INDEX
TO
THACKERAY CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2001
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) -- Amended and Restated Agreement of Limited Partnership of BT
Orlando Limited Partnership, dated August 1, 2001, among BEF,
Inc., Brennand-Paige Industries, Inc., BT Partnership and EST
Orlando, Ltd. (4)
10(b) -- Number 2 Partnership Letter Agreement, dated August 1, 2001,
between the Company and Belz Investco G.P.*
10(c) -- Ratification of Agreement dated August 1, 2001.*
11 -- Statement re Computation of Per Share Data.*
13 -- The Company's 2001 Annual Report to Stockholders.*
21 -- Subsidiaries of the Company.*
99 -- Financial Statements of BT Orlando Limited Partnership as of
December 31, 2001 and 2000 and for the three years ended
December 31, 2001.*
99.1 -- Letter to Commission pursuant to Temporary Note 3T.*
- ----------------------
* 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, 2001.
(4) Incorporated by reference to the company's quarterly report on
Form 10-Q for the quarterly period ended September 30, 2001.