UNITED STATES FORM 10-K[X] ANNUAL REPORT
PURSUANT TO SECTION 13 or 15(d) Liberté Investors
Inc. |
DELAWARE (State or other jurisdiction of incorporation or organization) |
75-1328153 (I.R.S. Employer Identification No.) |
200 Crescent Court,
Suite 1365, Dallas, Texas 75201 Registrants telephone
number, including area code: (214) 871-5935 |
Title of each class |
Name of each exchange on which registered |
Common Stock, $.01 par value per share | New York Stock Exchange |
LIBERTE INVESTORS INC.FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 2001TABLE OF CONTENTS |
2 |
Fiscal Year |
High |
Low | |||
---|---|---|---|---|---|
2001 | |||||
First Quarter | $ 3.19 | $ 2.94 | |||
Second Quarter | 3.19 | 2.69 | |||
Third Quarter | 3.25 | 2.88 | |||
Fourth Quarter | 4.35 | 3.00 | |||
2000 | |||||
First Quarter | $ 3.69 | $ 3.06 | |||
Second Quarter | 3.63 | 3.06 | |||
Third Quarter | 3.63 | 3.06 | |||
Fourth Quarter | 3.38 | 2.81 |
Year Ended June 30, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2001 |
2000 |
1999 |
1998 |
1997 | |||||||
(dollars in thousands, except per share data) | |||||||||||
Statement of Operations Data: | |||||||||||
Revenues | $ 3,321 | $ 2,973 | $ 2,662 | $ 2,778 | $2,527 | ||||||
Net income | 2,516 | 2,218 | 1,850 | 1,450 | 1,309 | ||||||
Basic and diluted net income | |||||||||||
per common share | 0.12 | 0.11 | 0.09 | 0.07 | 0.07 | ||||||
Cash dividends declared per share | 0.125 | 0.094 | 0.060 | 0.031 | |
June 30, | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2001 |
2000 |
1999 |
1998 |
1997 | |||||||
(dollars in thousands) | |||||||||||
Statement of Financial Condition Data: | |||||||||||
Total assets | $ 58,564 | $ 58,475 | $ 58,216 | $ 57,535 | $ 56,445 | ||||||
Stockholders equity | 58,033 | 58,048 | 57,735 | 57,027 | 56,206 |
Year Ended June 30, | |||||||
---|---|---|---|---|---|---|---|
2001 |
2000 |
1999 | |||||
Total income | $ 3.3 | $ 3.0 | $ 2.7 | ||||
Operating expenses | (0.8 | ) | (0.8 | ) | (0.8 | ) | |
Net change in other receivables, assets | |||||||
and liabilities | (0.2 | ) | (0.1 | ) | (0.1 | ) | |
Net cash provided by operating activities | $ 2.3 | $ 2.1 | $ 1.8 | ||||
Net cash provided by investing activities for the year ended June 30, 2001 was $475,000 compared to net cash provided of $431,000 for the year ended June 30, 2000 and net cash provided of $708,000 for the year ended June 30, 1999. Net cash provided for 2001 and 2000 was primarily from sales of foreclosed real estate, while net cash provided in 1999 was primarily from sales of foreclosed real estate, liquidation of 300,000 shares of RPI preferred stock and liquidation of restricted cash accounts. The table below reflects cash flow from investing activities (in millions): |
Year Ended June 30, | |||||||
---|---|---|---|---|---|---|---|
2001 |
2000 |
1999 | |||||
Liquidation of restricted cash | $ -- | $ -- | $0.1 | ||||
Liquidation of RPI preferred stock | -- | -- | 0.3 | ||||
Sales of foreclosed real estate | 0.5 | 0.4 | 0.3 | ||||
Net cash provided by investing activities | $0.5 | $0.4 | $0.7 | ||||
Net cash used in financing activities totaled $2.5 million for the year ended June 30, 2001 due to a cash dividend paid on June 29, 2001. Net cash used in financing activities totaled $1.9 million for the year ended June 30, 2000 due to a cash dividend paid on June 30, 2000. Net cash used in financing activities totaled $1.2 million for the year ended June 30, 1999 due to a cash dividend paid on June 30, 1999. Total cash and cash equivalents were $56.1 million at June 30, 2001. The Company plans to finance acquisitions with its cash and cash equivalents, borrowings and private or public debt and equity financings. On August 17, 1999, certain restrictions on issuing additional shares of common stock expired, which allows the Company to issue additional common stock to fund an acquisition. Prior to August 17, 1999, the Company was effectively precluded from issuing any additional shares of common stock for three years after the sale of common stock to Hunters Glen in order to avoid restricting the use of its net operating loss carryforwards. 9 |
PART IVItem 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K |
(a) | Documents filed as part of this Annual Report on Form 10-K. |
(1) | Consolidated Financial Statements: See Index to Consolidated Financial Statements on Page F-1. |
(2) | Exhibits: |
Exhibit Number |
2.1 | Plan of Reorganization, dated as of April 1, 1996, between the Trust and the Company (incorporated by reference to Exhibit 2.1 of Registration Statement No. 333-07439 on Form S-4, filed by the Company, which the Securities and Exchange Commission declared effective on July 3, 1996 (the Registration Statement). |
2.2 | Stock Purchase Agreement, dated as of January 16, 1996, between the Trust and Hunters Glen/Ford, Ltd. (the Purchaser) (incorporated by reference to Exhibit 4.1 of the Trusts Current Report on Form 8-K filed with the Commission on January 24, 1996), as amended by the Amendment to the Stock Purchase Agreement, dated as of February 27, 1996, and the Second Amendment to the Stock Purchase Agreement, dated as of March 28, 1996 (incorporated by reference to Exhibit 2.1 of the Trusts Quarterly Report on Form 10-Q for the quarter ended March 31, 1996). |
3.1 | The Companys Charter (incorporated by reference to Exhibit 3.1 of the Registration Statement). |
3.2 | The Companys Bylaws (incorporated by reference to Exhibit 3.2 of the Registration Statement). |
4.1 | Form of Registration Rights Agreement dated August 16, 1996, between the Company and the Purchaser (incorporated by reference to Exhibit 4.1 of the Registration Statement). |
4.2 | Form of Agreement Clarifying Registration Rights dated August 16, 1996, between the Company, the Purchaser, the Enloe Descendants Trust, and Robert Ted Enloe, III (incorporated by reference to Exhibit 4.3 of the Registration Statement). |
10.1 | Form of Indemnification Agreement for the Companys directors and officers and schedule of substantially identical documents (incorporated by reference to Exhibit 10.2 of the Registration Statement). |
10.2 | Retirement Plan for Trustees of the Trust, dated October 11, 1988 (incorporated by reference to Exhibit 10.23 of the Trusts Annual Report on Form 10-K for the year ended June 30, 1993). |
21.1 | A list of the subsidiaries of the Company. |
12 |
(b) | Reports on Form 8-K. |
No reports on Form 8-K were filed during the last quarter of the period covered by this annual report. |
13 |
DATED: September 24, 2001 | LIBERTÉ INVESTORS INC. /s/ GERALD J. FORD Gerald J. Ford Chief Executive Officer and Chairman of the Board |
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. |
Signatures |
Title |
Date |
---|
/s/ GERALD J. FORD
Gerald J. Ford |
Chief Executive Officer and Chairman of the Board (Principal Executive Officer) |
September 24, 2001 |
/s/ ELLEN V. BILLINGS
Ellen V. Billings |
Vice President & Controller (Principal Financial Officer and Principal Accounting Officer) | September 24, 2001 |
/s/ GENE H. BISHOP
Gene H. Bishop |
Director | September 24, 2001 |
/s/ HARVEY B. CASH
Harvey B. Cash |
Director | September 24, 2001 |
/s/ JEREMY B. FORD
Jeremy B. Ford |
Director | September 24, 2001 |
/s/ EDWARD W. ROSE, III
Edward W. Rose, III |
Director | September 24, 2001 |
/s/ GARY SHULTZ
Gary Shultz |
Director | September 24, 2001 |
14 |
Page | |||
---|---|---|---|
Report of KPMG LLP, Independent Auditors | F-2 | ||
Consolidated Statements of Financial Condition | |||
as of June 30, 2001 and 2000 | F-3 | ||
Consolidated Statements of Operations for the years ended June 30, 2001, 2000 and 1999 | F-4 | ||
Consolidated Statements of Stockholders Equity for the years ended June 30, 2001, 2000 | |||
and 1999 | F-5 | ||
Consolidated Statements of Cash Flows for the years ended June 30, 2001, 2000 and 1999 | F-6 | ||
Notes to Consolidated Financial Statements | F-7 |
Separate financial statements relating to the Companys subsidiary are omitted since it is wholly-owned and such separate financial statements are not material. All financial statement schedules have been omitted because the required information is not material to require submission of the schedule or because the information required is included in the financial statements, including the notes thereto. F-1 |
LIBERTÉ
INVESTORS INC.
|
June 30, 2001 |
June 30, 2000 | ||||
---|---|---|---|---|---|
Assets | |||||
Cash and cash equivalents | $ 56,102,635 | $ 55,887,941 | |||
Foreclosed real estate held for sale | 2,359,334 | 2,462,445 | |||
Accrued interest and other receivables | 5,239 | 5,128 | |||
Other assets, net | 96,323 | 119,790 | |||
Total assets | $ 58,563,531 | $ 58,475,304 | |||
Liabilities and Stockholders Equity | |||||
Liabilities-accrued and other liabilities | $ 530,999 | $ 427,045 | |||
Stockholders Equity | |||||
Common stock, $.01 par value, | |||||
50,000,000 shares authorized, | |||||
20,256,097 shares issued and outstanding | 202,561 | 202,561 | |||
Additional paid-in capital | 309,392,398 | 309,392,398 | |||
Accumulated deficit | (251,562,427 | ) | (251,546,700 | ) | |
Total stockholders equity | 58,032,532 | 58,048,259 | |||
Commitments and contingencies | |||||
Total liabilities and stockholders equity | $ 58,563,531 | $ 58,475,304 | |||
See notes to consolidated financial statements. F-3 |
LIBERTÉ
INVESTORS INC.
|
Year Ended June 30, | |||||||
---|---|---|---|---|---|---|---|
2001 |
2000 |
1999 | |||||
Income: | |||||||
Interest-bearing deposits in banks | $ 2,922,509 | $ 2,853,503 | $ 2,529,537 | ||||
Gain on sales of foreclosed real estate | 377,550 | 119,348 | 119,593 | ||||
Other | 21,090 | 84 | 12,789 | ||||
Total income | 3,321,149 | 2,972,935 | 2,661,919 | ||||
Expenses: | |||||||
Insurance | 120,335 | 121,437 | 121,828 | ||||
Foreclosed real estate operations | 233,603 | 136,889 | 144,591 | ||||
Legal, audit and consulting fees | 123,225 | 122,200 | 68,396 | ||||
Directors fees and expenses | 62,600 | 60,000 | 63,000 | ||||
Franchise tax | (21,080 | ) | 43,965 | 75,266 | |||
Compensation and employee benefits | 83,203 | 85,869 | 107,302 | ||||
General and administrative | 202,976 | 185,073 | 231,940 | ||||
Total expenses | 804,862 | 755,433 | 812,323 | ||||
Income before income taxes | 2,516,286 | 2,217,502 | 1,849,596 | ||||
Income tax expense | | | | ||||
Net Income | $ 2,516,286 | $ 2,217,502 | $ 1,849,596 | ||||
Basic and diluted net income | |||||||
per share of common stock | $ 0.12 | $ 0.11 | $ 0.09 | ||||
Weighted average number of shares of | |||||||
common stock | 20,256,097 | 20,256,097 | 20,256,097 | ||||
See notes to consolidated financial statements. F-4 |
LIBERTÉ
INVESTORS INC.
|
Number of Shares |
Common Stock |
Additional Paid-In Capital |
Accumulated Deficit |
Total | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Balance at June 30, 1998 | 20,256,097 | $202,561 | $309,392,398 | $(252,567,718 | ) | $ 57,027,241 | |||||
Dividends paid ($0.06 per share) | | | | (1,215,366 | ) | (1,215,366 | ) | ||||
Unclaimed dividends from | |||||||||||
bankruptcy reorganization | | | | 73,359 | 73,359 | ||||||
Net income | | | | 1,849,596 | 1,849,596 | ||||||
Balance at June 30, 1999 | 20,256,097 | 202,561 | 309,392,398 | (251,860,129 | ) | 57,734,830 | |||||
Dividends paid ($0.094 per share) | | | | (1,904,073 | ) | (1,904,073 | ) | ||||
Net income | | | | 2,217,502 | 2,217,502 | ||||||
Balance at June 30, 2000 | 20,256,097 | 202,561 | 309,392,398 | (251,546,700 | ) | 58,048,259 | |||||
Dividends paid ($0.125 per share) | | | | (2,532,013 | ) | (2,532,013 | ) | ||||
Net income | | | | 2,516,286 | 2,516,286 | ||||||
Balance at June 30, 2001 | 20,256,097 | $202,561 | $309,392,398 | $(251,562,427 | ) | $ 58,032,532 | |||||
See notes to consolidated financial statements. F-5 |
LIBERTÉ
INVESTORS INC.
|
Year Ended June 30, | |||||||
---|---|---|---|---|---|---|---|
2001 |
2000 |
1999 | |||||
Cash flows from operating activities: | |||||||
Net income | $ 2,516,286 | $ 2,217,502 | $ 1,849,596 | ||||
Adjustments to reconcile net income | |||||||
to net cash provided by operating activities: | |||||||
Depreciation and amortization | 7,811 | 12,801 | 17,448 | ||||
Gain from sales of foreclosed real estate | (377,550 | ) | (119,348 | ) | (119,593 | ) | |
Gain from sale of fixed assets | (970 | ) | | | |||
(Increase) decrease in accrued interest and other receivables | (111 | ) | (1,338 | ) | 553 | ||
Decrease (increase) in other assets | 21,080 | 76 | (374 | ) | |||
(Decrease) increase in accrued and other liabilities | 104,762 | (28,684 | ) | 41,670 | |||
Net cash provided by operating activities | 2,271,308 | 2,081,009 | 1,789,300 | ||||
Cash flows from investing activities: | |||||||
Additions to fixed assets | (5,424 | ) | (11,507 | ) | (758 | ) | |
Proceeds from sales of foreclosed real estate | 479,853 | 442,170 | 331,154 | ||||
Proceeds from sale of fixed assets | 970 | | 1,475 | ||||
Proceeds from liquidation of other assets | | | 300,000 | ||||
Decrease in restricted cash investments | | | 75,816 | ||||
Net cash provided by investing activities | 475,399 | 430,663 | 707,687 | ||||
Cash flows from financing activity - dividend paid | (2,532,013 | ) | (1,904,073 | ) | (1,215,366 | ) | |
Net increase in cash and cash equivalents | 214,694 | 607,599 | 1,281,621 | ||||
Cash and cash equivalents at beginning of year | 55,887,941 | 55,280,342 | 53,998,721 | ||||
Cash and cash equivalents at end of year | $ 56,102,635 | $ 55,887,941 | $ 55,280,342 | ||||
See notes to consolidated financial statements. F-6 |
Liberté Investors Inc. and SubsidiaryNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(e) Recognition of income Interest income is recorded on an accrual basis. The Company discontinues the accrual of interest income when circumstances cause the collection of such interest to be doubtful. Interest income on impaired loans is recognized on a cash basis only after all principal has been collected. Collections on impaired loans with no carrying value are recognized on a cash basis and are recorded as loan income. (f) Foreclosed real estate Foreclosed real estate is recorded at the lower of cost or fair value less estimated costs to sell. Cost is the note amount at the time of foreclosure net of any allowances. The Company periodically reviews its portfolio of foreclosed real estate held for sale using current information including (i) independent appraisals, (ii) general economic factors affecting the area where the property is located, (iii) recent sales activity and asking prices for comparable properties and (iv) costs to sell and/or develop that would serve to lower the expected proceeds from the disposal of the real estate. Gains (losses) realized on liquidation are recorded directly to income. (g) Income taxes Income taxes are maintained in accordance with SFAS No. 109, Accounting for Income Taxes, whereby deferred income tax assets and liabilities result from temporary differences. Temporary differences are differences between the tax basis of assets and liabilities and operating loss and tax credit carryforwards and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years. (h) Basic and diluted net income per share Basic and diluted net income per share is based on the weighted average number of shares outstanding during the year. (i) Cash and cash equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less. (2) Foreclosed Real EstateThe following is a summary of the Companys activity in foreclosed real estate for the years ended June 30, 2000, 1999, and 1998: |
2001 |
2000 |
1999 | |||||
---|---|---|---|---|---|---|---|
Balance at beginning of year | $ 2,462,445 | $ 2,810,267 | $ 3,028,273 | ||||
Cost of real estate sold | (103,111 | ) | (347,822 | ) | (218,006 | ) | |
Balance at end of year | $ 2,359,334 | $ 2,462,445 | $ 2,810,267 | ||||
All of the Companys real estate for 2001, 2000, and 1999 consists of undeveloped land located in the state of Texas. On January 20, 1998, foreclosure of the 55 lots in Fontana, California was completed, and all right, title, and interest in the property were conveyed to the Company. This property was sold in September 1998 to a single-family homebuilder for $229,020, less associated selling costs of $17,020. A gain of approximately $2,000 was recognized as a result of this transaction for the year ended June 30, 1999. The proceeds from the sale of the 55 lots was reduced by $3,689 for property taxes paid by the purchaser, which is treated as a non-cash item in the statements of cash flows. F-8 |
Liberté Investors Inc. and SubsidiaryNOTES TO CONSOLIDATED FINANCIAL STATEMENTSIn August 1998, the Company sold 56.6 acres of land in San Antonio, Texas to a single-family homebuilder for $339,700, less associated selling costs of $34,126. A gain of approximately $117,000 was recognized as a result of this transaction for the year ended June 30, 1999. The buyer also has an option to purchase two additional tracts totaling 109 acres of land adjacent to the 56.6 acres and has made a $50,000 deposit to the Company for this option to purchase. The proceeds from the sale of the 56.6 acres were reduced by $186,420 to be used by the buyer to extend a road into the property and by $2,756 in property taxes paid by the purchaser. The sales agreement was established whereby if the option to purchase the second tract was exercised, the aggregate sales price of the second tract of land would be increased by $186,420. These amounts are also treated as non-cash transactions in the statements of cash flows. In October 1999, the Company sold the second tract totaling 51.18 acres of land in San Antonio, Texas to a single-family homebuilder for a price of $307,080. A gain of approximately $119,000 was recognized as a result of this transaction. The buyer has an option to purchase a third tract totaling 58 acres of land adjacent to the 51.18 acres and has a $25,000 deposit with the Company for this option. The proceeds from the sale of the 51.18 acres were increased by $186,420, which had been deducted from the August 1998 purchase to be used by the buyer to extend a road into the property. The buyer had previously paid a $25,000 deposit on the 51.18 acres, which is also treated as a non-cash transaction in the statements of cash flows. In August 2000, the Company sold 6.46 acres of land in San Antonio, Texas to a developer for a price of $114,100, less associated selling costs of $1,966. A gain of approximately $45,000 was recorded as a result of this transaction. The proceeds from the sale of the 6.46 acres was reduced by $660 for property taxes paid by the purchaser, which is treated as a non-cash item in the statements of cash flows. In February 2001, the Company sold a 0.94-acre tract of land in San Antonio, Texas to an individual for a price of $6,000, less associated selling costs of $162. A gain of approximately $2,000 was recorded as a result of this transaction. The proceeds from the sale of the 0.94 acres was reduced by $148 for property taxes paid by the purchaser, which is treated as a non-cash item in the statements of cash flows. In March 2001, the Company sold a 1.26-acre tract of land in San Antonio, Texas to a business owner for a price of $100,000, less associated selling costs of $1,521. A gain of approximately $64,000 was recorded as a result of this transaction. In May 2001, the Company sold 29.07 acres of land in San Antonio, Texas to a residential homebuilder for a price of $348,818, less associated selling costs of $25,366. A gain of approximately $267,000 was recorded as a result of this transaction. (3) Commitments and ContingenciesThe Companys wholly-owned subsidiary, LNC Holdings Inc., owns approximately 40 acres of land located in Arlington, Texas which is encumbered by property tax liens totaling approximately $1,407,000 including penalties and interest. On April 16, 1997, LNC Holdings Inc. received a notice of judgment from the City of Arlington with regard to the delinquent taxes through that date. On June 28, 2001, LNC Holdings Inc. received an additional notice of judgment from the City of Arlington with regard to the delinquent taxes from 1997 through that date. LNC Holdings Inc. notified the City of Arlington that it would execute a deed without warranty to allow the taxing units to obtain title to the property. No response has been received. LNC Holdings Inc. has accrued property taxes and related penalties and interest for calendar years 1996 through 2000 and for the six month period ended June 30, 2001 totaling $254,000. Management believes that resolution of the delinquent tax issue with the taxing authorities will not result in a material adverse impact on the consolidated financial statements. F-9 |
Liberté Investors Inc. and SubsidiaryNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCash and cash equivalents at June 30, 1998 included restricted cash of approximately $64,000 for claims due to bankruptcy. The claims represented unclaimed dividends from May 1994. Any amount not claimed was voidable after five years. During May 1999, dividend checks totaling $11,506 had not been claimed, and all the outstanding dividend checks were voided. In addition, a liability of $61,853 associated with unpaid dividend amounts was reversed. The restricted cash accounts were closed and transferred into unrestricted cash accounts. These amounts were credited to accumulated deficit since the amounts were previously charged as a dividend to the accumulated deficit and are treated as a non-cash transaction in the statements of cash flows. The Company entered into an operating lease dated May 16, 1997 relating to its principal executive offices. On February 15, 2000, the Company signed a renewal option on the operating lease regarding its principal executive offices. The renewal expires December 31, 2003, contains an additional renewal option and requires the Company to pay a proportionate share of operating expenses of the building. In addition, the Company has entered into other operating leases for office equipment. Rental expense for fiscal 2001, 2000 and 1999 under these leases was approximately $80,000, $94,000, and $88,000, respectively. Future minimum lease payments under these leases are as follows: |
Fiscal Year Ending June 30, |
Amount | |||
---|---|---|---|---|
2002 | $ 72,963 | |||
2003 | 72,963 | |||
2004 | 36,481 | |||
Total future minimum rentals | $182,407 | |||
The Company is involved in routine litigation incidental to its business, which, in the opinion of management, will not result in a material adverse impact on the Companys consolidated financial condition, results of operations, or cash flows, without regard to possible insurance or third party reimbursement. F-10 |
Liberté Investors Inc. and SubsidiaryNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(4) Federal Income TaxesThere was no income tax expense recorded for the years ended June 30, 2001, 1999, or 1998. The income tax expense for the years ended June 30, 2001, 2000, and 1999 differs from the amounts computed by applying the U.S. Federal corporate tax rate of 34% to income before income taxes as follows: |
June 30, |
|||||||
---|---|---|---|---|---|---|---|
2001 |
2000 |
1999 |
|||||
Computed expected income tax expense | $ 855,537 | $ 753,951 | $ 628,863 | ||||
Increase (decrease) in taxes resulting from: | |||||||
Adjustment to deferred tax asset and | |||||||
permanent tax items | (4,233 | ) | 66 | 1,208 | |||
Expiration of capital loss carryforward | 1,629,812 | | | ||||
Change in the beginning of the year | |||||||
balance of the valuation allowance | |||||||
for deferred tax assets allocated | |||||||
to income taxes | (2,481,116 | ) | (754,017 | ) | (630,071 | ) | |
$ | $ | $ | |||||
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at June 30, 2001 and 2000 are presented below: |
June 30, |
|||||
---|---|---|---|---|---|
2001 |
2000 |
||||
Deferred tax assets: | |||||
Net operating loss carryforwards | $ 75,149,946 | $ 75,962,199 | |||
Basis differences of foreclosed real estate | 2,000,041 | 2,038,682 | |||
Capital loss carryforward | | 1,629,812 | |||
Other | 1,913,607 | 1,914,017 | |||
Total gross deferred tax assets | 79,063,594 | 81,544,710 | |||
Less: valuation allowance | (79,063,594 | ) | (81,544,710 | ) | |
Net deferred tax assets | $ | $ | |||
The net change in the valuation allowance for the years ended June 30, 2001, 2000 and 1999 was a decrease of $2,481,116, $754,017 and $630,071, respectively. Based on current business activity and the current status of business acquisitions, management believes it is more likely than not that the Company will not realize the benefits of the loss carryforwards. Therefore, a full valuation allowance has been established. In the event the Company expands its business operations through an acquisition, the ability to use the loss carryforwards may change. At June 30, 2001, the Company had net operating loss carryforwards for federal income tax purposes of approximately $221 million, which are available to offset future federal taxable income. The carryforwards will expire in 2005 through 2011. In addition, the Company has alternative minimum tax credit carryforwards of $15,100 which are available to reduce future federal income taxes, if any, over an indefinite period. F-11 |
Liberté Investors Inc. and SubsidiaryNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(5) Fair Value of Financial InstrumentsSFAS No. 107, Disclosures about Fair Value of Financial Instruments requires disclosure of fair value information about financial instruments, whether or not recognized in the statement of financial condition, for which it is practicable to estimate that value. SFAS No. 107 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. The fair value of cash and cash equivalents approximates their carrying value because of the liquidity and short-term maturities of these instruments. The Company believes that its deficiency notes receivable, which have no carrying value at June 30, 2001 and 2000, may have some fair value, but such value cannot be estimated and any potential collections are not measurable as to timing or amount. (6) Concentrations of Credit RiskAt June 30, 2001, the Company had certain concentrations of credit risk with two financial institutions in the form of cash, which amounted to approximately $56 million. For purposes of evaluating credit risk, the stability of financial institutions conducting business with the Company is periodically reviewed. If the financial institutions failed to completely perform under the terms of the financial instruments, the exposure for credit loss would be the amount of the financial instruments less amounts covered by regulatory insurance. (7) Selected Quarterly Financial Data (unaudited)Interim results are not necessarily indicative of fiscal year performance because of the impact of seasonal and short-term variations. Selected quarterly financial data are summarized as follows (dollars in thousands, except per share data): |
Quarters | |||||||||
---|---|---|---|---|---|---|---|---|---|
First |
Second |
Third |
Fourth | ||||||
Fiscal Year 2000 | |||||||||
Operating revenues | $639,058 | $807,804 | $733,732 | $792,341 | |||||
Net income | $418,936 | $632,089 | $557,241 | $609,236 | |||||
Basic and diluted net income per share: | $ 0.02 | $ 0.03 | $ 0.03 | $ 0.03 | |||||
Fiscal Year 2001 | |||||||||
Operating revenues | $882,038 | $832,079 | $771,902 | $835,130 | |||||
Net income | $706,658 | $694,423 | $557,538 | $557,667 | |||||
Basic and diluted net income per share: | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 | |||||
F-12 |