-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ap6+UNEc3lDmFDNQ6YTsl3j8QrdVYbB+dYRicXr6msOmp6qTBH9tn7k0Tkw8fes3 FuDdxS544PP8JXUOEya1pg== 0000893220-05-001534.txt : 20050629 0000893220-05-001534.hdr.sgml : 20050629 20050629170514 ACCESSION NUMBER: 0000893220-05-001534 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050629 DATE AS OF CHANGE: 20050629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAIT INVESTMENT TRUST CENTRAL INDEX KEY: 0001045425 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 232919819 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14760 FILM NUMBER: 05925632 BUSINESS ADDRESS: STREET 1: 1818 MARKET ST STREET 2: 28TH FL CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2155465119 MAIL ADDRESS: STREET 1: 1521 LOCUST ST STREET 2: 6TH FL CITY: PHILADELPHIA STATE: PA ZIP: 19102 FORMER COMPANY: FORMER CONFORMED NAME: RESOURCE ASSET INVESTMENT TRUST DATE OF NAME CHANGE: 19970904 11-K 1 w10251e11vk.htm FORM 11-K FOR FISCAL YEAR ENDED DECEMBER 31, 2004 e11vk
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

(MARK ONE)

     
R
  ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
    
 
  For the fiscal year ended December 31, 2004
 
    
or
 
    
£
  TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
    
 
  For the transition period from                                         to                                         

COMMISSION FILE NUMBER 1-14760

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

         
 
  Title:   RAIT Investment Trust 401(k) Profit Sharing Plan
 
  Address:   See Below

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

         
 
  Name:   RAIT Investment Trust
 
  Address:   c/o RAIT Partnership, L.P.
 
      1818 Market Street, 28th Floor
 
      Philadelphia, PA 19103
 
 

 

REQUIRED INFORMATION

FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
RAIT INVESTMENT TRUST 401(K) PROFIT SHARING PLAN
DECEMBER 31, 2004 AND 2003

C O N T E N T S

 

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Report of Independent Registered Public Accounting Firm

Plan Administrator and Participants of the RAIT Investment Trust 401(k) Profit Sharing Plan

     We have audited the accompanying statements of net assets available for benefits of the RAIT Investment Trust 401(k) Profit Sharing Plan (the “Plan”) as of December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the year ended December 31, 2004. These financial statements and the supplemental schedules referred to below are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in its net assets available for benefits for the year ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

     Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the accompanying index are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania
June 27, 2005

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RAIT Investment Trust 401(k) Profit Sharing Plan

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

                 
    December 31,  
ASSETS
   2004     2003  
Investments at fair value
                
Mutual funds
                
Fidelity Advisor Equity Growth Fund
   $ 138,904     $ 87,116  
Fidelity Advisor Balanced Fund
     55,815       44,254  
Fidelity Advisor Growth and Income Fund
     79,410       51,589  
Fidelity Advisor Growth Opportunities Fund
     46,904       25,712  
Fidelity Advisor Mid Cap Fund
     129,579       74,354  
Fidelity Advisor Value Strategies Fund
     66,866       44,840  
Fidelity Advisor Financial Services Fund
     8,873       2,299  
Loans to participants
     5,514       21,521  
Company common shares
     1,479,738       1,010,304  
 
            
Total investments
     2,011,603       1,361,989  
Cash and cash equivalents
     330       15,292  
Contributions receivable
     75,819        
 
            
Net assets available for plan benefits
   $ 2,087,752     $ 1,377,281  
 
            

The accompanying notes are an integral part of these financial statements.

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RAIT Investment Trust 401(k) Profit Sharing Plan

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

         
    Year Ended December 31,  
    2004  
ADDITIONS
        
Investment income
        
Interest and dividends
   $ 111,285  
Net appreciation in fair value of mutual funds
     37,781  
Net appreciation in fair value of Company common shares
     110,321  
 
      
 
     259,387  
Contributions
        
Employer
     227,327  
Employee
     223,070  
Rollovers
     687  
 
      
 
     451,084  
Total additions
     710,471  
 
      
DEDUCTIONS
        
Benefits paid to participants
     —  
 
      
Total deductions
     —  
 
      
Net increase
     710,471  
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year
     1,377,281  
 
      
NET ASSETS AVAILABLE FOR BENEFITS, end of year
   $ 2,087,752  
 
      

The accompanying notes are an integral part of this financial statement.

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RAIT Investment Trust 401(k) Profit Sharing Plan

NOTES TO FINANCIAL STATEMENTS

December 31, 2004 and 2003

NOTE A — DESCRIPTION OF PLAN

The following description of the RAIT Investment Trust (“RAIT” or the “Company”) 401(k) Profit Sharing Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.

1. General

The Plan is a defined contribution plan, established by RAIT Investment Trust (Sponsor and Plan Administrator), covering all salaried employees of the RAIT who are 21 years of age or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

All Plan administrative expenses are paid by the Sponsor.

2. Contributions

Each year, participants may elect to make contributions through payroll deductions from their weekly salary up to the maximum percentage of compensation and dollar amounts permissible under the Internal Revenue Code. The maximum dollar amount was $13,000 for 2004 and $12,000 for 2003. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Participants may direct investment of their contributions into various investment options offered by the Plan. The Plan currently offers seven mutual funds and Company common shares as investment options for participants. The Company makes a contribution equal to 75% of the amount that a participant contributes to the Plan. The matching Company contribution is invested directly in Company common shares.

3. Participants’ Accounts

Each participant’s account is credited with the participant’s contribution, the Company’s contribution and Plan earnings. Allocations are elected by the participant. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

4. Vesting

Participants are fully vested in their self-directed participant accounts. The vesting for participants in their employer match portion described in the Summary Plan Description for the Plan was modified during 2003 from a six-year period to a five-year period. In addition, each participant must be credited with the completion of 1,000 hours of service during the Plan year. For the Plan year-end December 31, 2004, the vesting schedule is as follows: 20% vested at 1 year, 40% vested at 2 years, 60% vested at 3 years, 80% vested at 4 years, and 100% vested at 5 years. Prior to 2003, the vesting schedule was as follows: 0% vested at 1 year, 20% vested at 2 years, 40% vested at 3 years, 60% vested at 4 years, 80% vested at 5 years and 100% vested at 6 years.

5. Loan Provisions

A participant may borrow up to 50% of the balance in his or her account, with a minimum borrowing of $1,000 and a maximum borrowing of $50,000. The loans are secured by the balance in the participant’s account and bear interest at a rate that provides a rate of return commensurate with the interest rate that would be made under similar circumstances to the borrower. Participants may choose to repay the loan in one to five years through payroll deductions. Outstanding loans at December 31, 2004 carry interest rates ranging from 6.29% to 9.71%. Loans are payable in full upon participant’s termination of employment with the Company.

6. Payment of Benefits

On termination of services due to death, disability, retirement, or termination for other than those reasons, a participant will receive a lump-sum amount equal to the value of the participant’s vested interest in his or her account.

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7. Forfeited Accounts

At December 31, 2004 and 2003, forfeited nonvested accounts totaled $497 and $3,325. During 2004 and 2003, employer contributions were reduced by $3,000 and $5,000 from forfeited nonvested accounts. Forfeited nonvested accounts will be used to reduce future employer contributions.

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING AND ADMINISTRATIVE POLICIES

1. Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting.

2. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in those statements and accompanying notes. Actual results may differ from such estimates.

3. Investments

The Company has established the Plan and has overall control and authority to administer the Plan. The Company established a trust (the “Trust”) which holds all Plan assets. The Trust is a tax-exempt trust registered as an open-end management investment company. The Plan’s investments are stated at fair value. Quoted market prices are used to value investments in common stock. Mutual funds are valued at the net asset value of units held by the plan at year-end. Participant loans are valued at their outstanding balances, which approximate fair value. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date.

4. Payment of Benefits

Benefits are recorded when paid.

5. Plan Termination

The Sponsor intends to continue the Plan indefinitely. Upon termination of the Plan, or upon complete discontinuance of contributions, a participant will immediately become 100% vested in the value of the participant’s account, regardless of the Plan’s current vesting schedule.

NOTE C — INVESTMENTS

The following investment vehicles are available to the participants:

Fidelity Advisor Equity Growth Fund — Seeks to achieve capital appreciation through investments in domestic and foreign companies that are believed to have an above average growth potential. The fund normally holds at least 65% of its total assets in common stock.

Fidelity Advisor Balanced Fund — Seeks to achieve both income and capital growth through investments in domestic and foreign companies with emphasis on above-average income-producing securities that tend to have more value than growth characteristics. The fund typically holds approximately 60% of its total assets in stock and other equity securities and at least 25% of its total assets in fixed-income senior securities, typically debt securities and preferred stock. The remainder is invested in bond and other debt securities that include lower-quality debt securities.

Fidelity Advisor Growth and Income Fund — Seeks a high total return through investments in domestic and foreign companies that currently pay common stock dividends and show potential for capital appreciation. The fund also potentially invests in lower-quality debt securities and common stock that does not currently pay dividends to seek a higher capital return.

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Fidelity Advisor Growth Opportunities Fund — Seeks long-term capital growth through investments in domestic and foreign companies, primarily in common stock.

Fidelity Advisor Mid Cap Fund — Seeks long-term capital appreciation through investments in common stock of domestic and foreign companies with medium market capitalization. The fund typically holds at least 65% of its total assets in these types of securities.

Fidelity Advisor Value Strategies Fund — Seeks capital appreciation through investments in common stock of domestic and foreign companies that the fund managers believe are undervalued in the marketplace. The fund typically invests in medium-sized companies, but will also invest in larger and smaller companies.

Fidelity Advisor Financial Services Fund — Seeks capital appreciation through investments in common stock of domestic and foreign companies. The fund normally invests at least 80% of its assets in securities of companies principally engaged in providing financial services to consumers and industry.

RAIT Investment Trust Common Shares — The Company is a real estate investment trust that makes investments in real estate primarily by making real estate loans, acquiring real estate loans, and acquiring interests in real estate. These common shares are traded on the New York Stock Exchange.

The Trust holds the assets of the above accounts.

Investments in Mutual Funds Held by the Trust

Changes in the units of beneficial interest of the mutual funds held by the Trust in which the Plan participated, were as follows:

                                                 
    2004     2003  
            Unit     Fair             Unit     Fair  
    Units     values     value     Units     values     value  
Fidelity Advisor Equity Growth Fund
                                                
Beginning
     1,957     $ 44.52     $ 87,116       1,337     $ 33.77     $ 45,265  
Ending
     3,039       45.71       138,904       1,957       44.52       87,116  
 
                                    
Net increase
     1,082     $ 1.19     $ 51,788       620     $ 10.75     $ 41,851  
 
                                    
Fidelity Advisor Balanced Fund
                                                
Beginning
     2,784     $ 15.89     $ 44,254       2,001     $ 13.79     $ 27,650  
Ending
     3,418       16.33       55,815       2,784       15.89       44,254  
 
                                    
Net increase
     634     $ 0.44     $ 11,561       783     $ 2.10     $ 16,604  
 
                                    
Fidelity Advisor Growth and Income Fund
                                                
Beginning
     3,250     $ 15.90     $ 51,589       1,759     $ 13.04     $ 23,013  
Ending
     4,784       16.60       79,410       3,250       15.90       51,589  
 
                                    
Net increase
     1,534     $ 0.70     $ 27,821       1,491     $ 2.86     $ 28,576  
 
                                    
Fidelity Advisor Growth Opportunities Fund
                                                
Beginning
     900     $ 28.64     $ 25,712       872     $ 22.19     $ 19,371  
Ending
     1,536       30.54       46,904       900       28.64       25,712  
 
                                    
Net increase
     636     $ 1.90     $ 21,192       28     $ 6.45     $ 6,341  
 
                                    
Fidelity Advisor Mid Cap Fund
                                                
Beginning
     3,322     $ 22.41     $ 74,354       2,020     $ 15.59     $ 31,549  
Ending
     5,138       25.22       129,579       3,322       22.41       74,354  
 
                                    
Net increase
     1,816     $ 2.81     $ 55,225       1,302     $ 6.82     $ 42,805  
 
                                    
Fidelity Advisor Value Strategies Fund
                                                
Beginning
     1,415     $ 31.63     $ 44,840       799     $ 19.77     $ 15,854  
Ending
     1,857       36.01       66,866       1,415       31.63       44,840  
 
                                    
Net increase
     442     $ 4.38     $ 22,026       616     $ 11.86     $ 28,986  
 
                                    
Fidelity Advisor Financial Services Fund
                                                
Beginning
     103     $ 22.35     $ 2,299       —     $ —     $ —  
Ending
     388       22.85       8,873       103       22.35       2,299  
 
                                    
Net increase
     285     $ 0.50     $ 6,574       103     $ 22.35     $ 2,299  
 
                                    

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     The fair value of individual investments that represent 5% or more of the Plan’s total net assets as of December 31, 2004 and 2003, is as follows:

                 
    2004     2003  
RAIT Investment Trust Common Shares
   $ 1,479,738     $ 1,010,304  
Fidelity Advisor Equity Growth Fund
     138,904       87,116  
Fidelity Advisor Mid Cap Fund
     129,579       74,354  

NOTE D — RELATED PARTY TRANSACTIONS

Certain Plan investments are Company common shares. The Company is the Plan Sponsor, and therefore, these transactions qualify as party-in-interest transactions. Investments include 52,904 and 39,456 Company common shares valued at $1,479,738 and $1,010,304 as of December 31, 2004 and 2003, respectively.

NOTE E — TAX STATUS

The Company has engaged KT Administrators Inc. (“KT”) to assist it in administering the Plan and adopted a form of the Plan in April 2002 sponsored by KT. KT received a favorable determination letter from the Internal Revenue Service (“IRS”) dated November 19, 2001, indicating that this form of the Plan is qualified under Section 401(a) of the Internal Revenue Code of 1986 and, therefore, the trust is tax exempt under Section 501(a) of the Code. The Plan has been amended twice since the date of this determination letter. KT has advised the Company that these amendments did not require a new determination letter from the IRS because these amendments are within the parameters contained in the form of the Plan that was the subject of the determination letter dated November 19, 2001. KT has also advised the Company that the modification of the vesting schedule described in Note A.4 above is not an amendment to the Plan requiring another determination letter from the IRS. KT has advised the Company that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code.

NOTE F — RISKS AND UNCERTAINTIES

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits.

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SUPPLEMENTAL INFORMATION

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RAIT Investment Trust 401(k) Profit Sharing Plan

EIN 23-2919819
Plan No. 001

SCHEDULE H, PART 4i — FORM 5500 — ASSETS HELD FOR INVESTMENT PURPOSES

December 31, 2004

                 
        (c) Description of      
        investment, including      
        maturity date, rate of      
    (b) Identity of issuer, borrower, lessor   interest, collateral,      
(a)   or similar party   par or maturity value   (d) Current value  
 
       Common Stock        
*
   RAIT Investment Trust   52,904 shares   $ 1,479,738  
 
              
 
       Total common stock     1,479,738  
 
              
 
       Mutual Funds        
 
   Fidelity Advisor Equity Growth Fund   3,039 units     138,904  
 
   Fidelity Advisor Balanced Fund   3,418 units     55,815  
 
   Fidelity Advisor Growth and Income Fund   4,784 units     79,410  
 
   Fidelity Advisor Growth Opportunities Fund   1,536 units     46,904  
 
   Fidelity Advisor Mid Cap Fund   5,138 units     129,579  
 
   Fidelity Advisor Value Strategies Fund   1,857 units     66,866  
 
   Fidelity Advisor Financial Services Fund   388 units     8,873  
 
              
 
       Total mutual funds     526,351  
*
   Participant loans   6.29%-9.71%     5,514  
 
              
 
       Total investments     2,011,603  
 
*   Party-in-interest

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RAIT Investment Trust 401(k) Profit Sharing Plan

EIN 23-2919819
Plan No. 001

SCHEDULE H, PART 4j — FORM 5500 — REPORTABLE (5%) TRANSACTIONS

Year ended December 31, 2004

                                                             
                                (f)             (h) Current        
                                Expense             value of     (i) Net  
                                incurred             asset on     gain  
(a) Identity of party   (b) Description of   (c) Purchase     (d) Selling     (e) Lease     with     (g) Cost     transaction     or  
involved   asset   price     price     rental     transaction     of asset     date     (loss)  
Category (ii) — series of transactions
                                                            
RAIT Investment Trust 401(k) Profit Sharing Plan
   RAIT Investment Trust Common Shares (19 purchases)   $ 366,602     $ —     $ —     $ —     $ 366,602     $ 366,602     $ —  

There were no category (i), (iii) or (iv) reportable transactions during the Plan year.

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RAIT Investment Trust 401(k) Profit Sharing Plan

EIN 23-2919819
Plan No. 001

SCHEDULE I, PART II 4a — FORM 5500 — NONEXEMPT TRANSACTIONS

Year ended December 31, 2004

                                                                 
    (b) Relationship                                                        
    to plan,   (c) Description of                                           (i) Current        
    employer, or   transactions including                                           value of        
(a) Identity   other   maturity date, rate of           (e)             (g) Expense             asset on     (j) Net  
of party   party-in-   interest, collateral,   (d) Purchase     Selling     (f) Lease     incurred with     (h) Cost     transaction     gain or  
involved   interest   par or maturity value   price     price     rental     transaction(*)     of asset     date     (loss)(*)  
RAIT Investment Trust
   Plan sponsor and administrator   Failure to transmit to the plan any participant contributions within the time prescribed (3 pay periods)   $ 23,486     $ —     $ —     $ 79     $ 23,486     $ 23,486     $ —  
 
(*) RAIT Investment Trust has filed the appropriate Form 5330 to calculate the Section 4975 tax on prohibited transactions, and has also paid the costs of the excise tax.

There were no category (i), (ii), (iii) or (iv) reportable transactions during the Plan year.

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SIGNATURES

     The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

             
    RAIT INVESTMENT TRUST    
    401(k) PROFIT SHARING PLAN    
 
            
 
  By:   /s/ Ellen J. DiStefano   Date: June 28, 2005
 
           
 
      ELLEN J. DISTEFANO, as trustee of the    
 
      RAIT Investment Trust 401(k) Profit    
 
      Sharing Plan    
 
            
 
  By:   /s/ Jonathan Z. Cohen   Date: June 28, 2005
 
           
 
      JONATHAN Z. COHEN, as trustee of the    
 
      RAIT Investment Trust 401(k) Profit    
 
      Sharing Plan    

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EXHIBIT INDEX

     
EXHIBIT    
NUMBER   DESCRIPTION
23
  Consent of Grant Thornton LLP.

13

EX-23 2 w10251exv23.txt CONSENT OF GRANT THORNTON LLP EXHIBIT 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have issued our report dated June 27, 2005 accompanying the financial statements and supplemental schedules of RAIT Investment Trust 401(k) Profit Sharing Plan on Form 11-K for the year ended December 31, 2004. We hereby consent to the incorporation by reference of said report in the Registration Statement of RAIT Investment Trust on Form S-8 (File No. 333-109158, effective September 26, 2003). /s/ GRANT THORNTON LLP Philadelphia, Pennsylvania June 28, 2005 -----END PRIVACY-ENHANCED MESSAGE-----