-----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, I0d1cJmTY7CqSXc9nY8pSqlN2Te/FzP2LxYp497QtbYKdiEMvtOVKXfD83+uPot7 zdvFlWru9zApvmRD2hBcrg== 0000847322-02-000014.txt : 20020514 0000847322-02-000014.hdr.sgml : 20020514 ACCESSION NUMBER: 0000847322-02-000014 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRIIMI MAE INC CENTRAL INDEX KEY: 0000847322 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 521622022 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10360 FILM NUMBER: 02647196 BUSINESS ADDRESS: STREET 1: 11200 ROCKVILLE PIKE CITY: ROCKVILLE STATE: MD ZIP: 20852 BUSINESS PHONE: 3018162300 FORMER COMPANY: FORMER CONFORMED NAME: CRI INSURED MORTGAGE ASSOCIATION INC DATE OF NAME CHANGE: 19920703 11-K 1 form_11k-2001.txt FORM 11-K 2001 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K [x] Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the fiscal year ended December 31, 2001 or [ ] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from ________ to _________. Commission File Number 1-10360 CRIIMI MAE Management, Inc. Retirement Plan (Full title of the plan) CRIIMI MAE INC. 11200 Rockville Pike Rockville, Maryland 20852 Telephone (301) 816-2300 (Name of Issuer of the securities held pursuant to the plan and address of its principal executive office) 2 CRIIMI MAE MANAGEMENT, INC. RETIREMENT PLAN INDEX TO FORM 11-K Financial Statements as of December 31, 2001 and 2000 Together with Report of Independent Public Accountants.....................3 Signature....................................................................13 EXHIBIT 99.0 Letter to Securities and Exchange Commission from CRIIMI MAE Management, Inc. dated May 14, 2002 regarding representations received from Arthur Andersen LLP in performing the audit of the December 31, 2001 financial statements (filed herewith). 3 CRIIMI MAE Management, Inc. Retirement Plan Financial statements As of December 31, 2001 and 2000 Together with auditors' report 4 Report of independent public accountants To the Trustees and the Participants of the CRIIMI MAE Management, Inc. Retirement Plan: We have audited the accompanying statements of net assets available for benefits of the CRIIMI MAE Management, Inc. Retirement Plan (the Plan) as of December 31, 2001 and 2000, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements and the supplemental schedule referred to below are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements and the supplemental schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2001 and 2000, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for purposes of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/Arthur Andersen LLP Vienna, Virginia May 10, 2002 5 CRIIMI MAE Management, Inc. Retirement Plan
Table of contents Statements of net assets available for benefits As of December 31, 2001 and 2000......................................................6 Statements of changes in net assets available for benefits For the years ended December 31, 2001 and 2000........................................7 Notes to financial statements December 31, 2001 and 2000............................................................8 Schedule of assets (held at end of year) As of December 31, 2001..............................................................12 Schedules omitted because there were no such items As of and for the year ended December 31, 2001: Leases in default or classified as uncollectible Nonexempt transactions Reportable transactions Loans or fixed income obligations in default or classified as uncollectible Investment assets both acquired and disposed of within the plan year
6 CRIIMI MAE Management, Inc. Retirement Plan Statements of net assets available for benefits As of December 31, 2001 and 2000 2001 2000 ------------ ------------ Investments $ 2,902,694 $ 2,843,954 Participant loans 64,660 46,016 Contributions receivable 23,222 20,248 ------------ ------------ Net assets available for benefits $ 2,990,576 $ 2,910,218 ============ ============ The accompanying notes are an integral part of these statements. 7 CRIIMI MAE Management, Inc. Retirement Plan Statements of changes in net assets available for benefits For the years ended December 31, 2001 and 2000
2001 2000 -------------- -------------- Additions: Contributions $ 851,299 $ 614,251 Dividend income 30,513 246,377 Interest on participant loans 4,827 3,231 -------------- -------------- Total additions 886,639 863,859 -------------- -------------- Deductions: Benefit payments 137,869 265,430 Realized/unrealized losses 668,412 734,391 -------------- -------------- Total deductions 806,281 999,821 -------------- -------------- Net increase (decrease) in net assets available for benefits 80,358 (135,962) Net assets available for benefits, beginning of year 2,910,218 3,046,180 -------------- -------------- Net assets available for benefits, end of year $ 2,990,576 $ 2,910,218 ============== ==============
The accompanying notes are an integral part of these statements. 8 CRIIMI MAE Management, Inc. Retirement Plan Notes to financial statements December 31, 2001 and 2000 1. Description of the Plan: - --------------------------- CRIIMI MAE Management, Inc. Retirement Plan (the Plan) is a defined contribution plan as described in Internal Revenue Code (IRC) Section 401(a). The Plan, effective July 1, 1995, covers employees of CRIIMI MAE Management, Inc. (the Company) and CRIIMI MAE Services Limited Partnership (CMSLP), an affiliate of the Company. The following description of the Plan provides only general information. Participants should refer to the Plan agreement for more complete description of the Plan's provisions. An employee is eligible to participate in the Plan upon attainment of age 21. The Plan provides benefits upon the occurrence of death, retirement, age 59 1/2, disability, or termination of employment. Additionally, there is a provision in the Plan for distribution to participants who apply for benefits on account of "hardship," as that term is described in the IRC, Treasury Regulations, and the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. The Company serves as Plan administrator. Contributions - ------------- Eligible employees may contribute an amount up to 15 percent of compensation, as defined by the Plan, subject to certain limitations under the IRC. Employer matching contributions are discretionary. For the year ended December 31, 2001, the Company provided a matching contribution equal to 50 percent of each participant's contribution up to a maximum of 5 percent of base salary. Participants are eligible for employer matching contributions when credited with one hour of service in the plan year. For the year ended December 31, 2000, the Company elected not to make matching employer contributions. Participant accounts - -------------------- Each participant's account is credited with his or her own contribution, the employer matching contribution, and an allocation of plan earnings. Allocations are based on the current value of the participant's account balance as specified in the Plan. The benefit to which a participant is entitled is the benefit that can be provided by the participant's account. Vesting - ------- Participants are immediately vested in their elective contributions and rollover accounts, and the earnings thereon. The Plan was amended on January 1, 2001, to allow vesting in employer contributions based on a five-year graded schedule. Participants are 20 percent vested for each year of service until 100 percent is vested after five or more years of service. 9 Forfeited accounts - ------------------ As of December 31, 2001, forfeited nonvested accounts totaled $2,824. These amounts were used to reduce the December 31, 2001 employer contribution. Plan termination - ---------------- The Company anticipates and believes that the Plan will continue without interruption but reserves the right to discontinue the Plan at its discretion. In the event that the decision to discontinue the Plan results in the termination of the plan, all amounts credited to participant accounts immediately become 100% vested. The net assets of the Plan will be distributed by the trustee in accordance with the trust agreement in a uniform and nondiscriminatory manner. Significant investments - ----------------------- The fair market values of individual investments that represent 5 percent or more of the Plan's total net assets as of December 31, 2001 and 2000, are as follows: 2001 2000 ---------- ---------- Putnam Global Growth Fund $ 409,817 $ 465,784 Putnam Growth & Income Fund 736,703 670,667 Putnam Investors Fund 697,278 704,819 Putnam New Opportunities Fund 454,540 455,389 Putnam International Growth & Income Fund 229,846 233,741 Putnam Money Market Fund(1) 176,252 125,027 (1) The fair market value of the Putnam Money Market Fund represented 6 percent and 4 percent of the Plan's total net assets as of December 31, 2001 and 2000, respectively. Participant loans - ----------------- A participant may borrow the lesser of $50,000 or 50 percent of his or her vested account balance. A loan must be repaid over a period of no more than five years unless it is used to acquire a principal residence, in which case the repayment period may exceed five years. A participant may have only one loan outstanding at a time and is limited to one new loan for a 12 month period. The interest rate is determined by the Plan administrator based on the current prime rate plus 100 basis points and is fixed over the life of the note. The interest rates on participant loans outstanding at December 31, 2001, ranged from 5.75 to 10.5 percent and at December 31, 2000, ranged from 9.0 to 10.5 percent. Payment of benefits - ------------------- Participants may take regular distributions upon leaving the Company and may qualify for hardship withdrawals while employed by the Company. The Plan will automatically distribute in a lump sum any vested account balance that does not exceed $5,000 for participants no longer employed with the Company. On termination of service due to death, disability, retirement, or attainment of age 59 1/2, participants may elect to receive their benefits as a lump-sum cash 10 distribution equal to the value of the participant's vested interest in his or her account or through an installment or annuity distribution. Retiring participants with vested account balances in excess of $5,000 may also elect to postpone distribution of benefits until they reach age 70 1/2. Benefits are recorded when paid. Bankruptcy proceeding - --------------------- The Company, along with a subsidiary (CRIIMI MAE Holdings II, L.P.) and its unconsolidated parent company, CRIIMI MAE Inc. (the Parent), filed for relief under Chapter 11 of the U.S. Bankruptcy Code on October 5, 1998, in the United States Bankruptcy Court for the District of Maryland, Southern Division, in Greenbelt, Maryland (the Bankruptcy Court). On November 22, 2000, the United States Bankruptcy Court for the District of Maryland entered an order confirming the Company's reorganization plan. The Company emerged from Chapter 11 on April 17, 2001. Administrative expenses - ----------------------- All expenses of maintaining the Plan are paid for by the Company and CMSLP. Such payments amounted to $14,387 and $10,824 in 2001 and 2000, respectively. 2. Significant accounting policies: - ----------------------------------- Accounting method - ----------------- The accompanying financial statements have been prepared using the accrual method of accounting. Use of estimates - ---------------- The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires the Plan's management to use estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from these estimates. Investments - ----------- Investments are maintained by Putnam Investments (Putnam), a party-in-interest, under a Trust Agreement Contract (Contract) dated September 1, 1997. The Plan's investments are stated at fair value, which is based on the closing prices of securities or other investments on the valuation date. Unrealized appreciation or depreciation in the value of investments is reflected in the statement of changes in net assets available for benefits; during 2001, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value by $668,412 and during 2000, depreciated in value by $734,391, as follows: 2001 2000 ------------ ------------ Shares in Putnam Investments $ (621,834) $ (655,040) CRIIMI MAE Inc. Common Stock (46,578) (79,351) ------------ ------------ Total $ (668,412) $ (734,391) ============ ============ 11 The Plan provides for various investment options to the participants. All investments within the Plan are participant directed. These investment securities are exposed to various risks, such as interest rate, credit, and overall market volatility risks. Due to the risks associated with investment securities, it is reasonably possible that changes in the values of the investment securities will occur in the near term. The changes in the values of the investment security could materially affect the amounts reported in the statements of net assets available for benefits. 3. Income tax status: - --------------------- The Internal Revenue Service issued a determination letter dated March 25, 1999, stating that the Plan was designed in accordance with applicable IRC requirements as of that date. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan, as amended, is currently designed and is being operated in compliance with the applicable requirements of the IRC. Therefore, the Plan administrator believes that the Plan was qualified and the related trust was tax-exempt as of the financial statement dates. 4. Reconciliation to Form 5500 - ------------------------------ The following tables reconcile the financial statements to the Plan's Form 5500 filed for the plan years ended December 31, 2001 and 2000:
Receivable Net assets --------------------------- --------------------------- 2001 2000 2001 2000 ------------ ------------ ------------ ------------ Per financial statements $ 23,222 $ 20,248 $ 2,990,576 $ 2,910,218 Timing differences for recording cash receipts (23,222) (20,248) (23,222) (20,248) ------------ ------------ ------------ ------------ Per Form 5500 $ -- $ -- $ 2,967,354 $ 2,889,970 ============ ============ ============ ============
2001 2000 ------------ ------------ Contributions received per financial statements $ 851,299 $ 614,251 Less- Contributions received after year-end relating to current year. (23,222) (20,248) Add- Contributions received in current year relating to prior year. 20,248 18,448 ------------ ------------ Contributions received per Form 5500 $ 848,325 $ 612,451 ============ ============
12 CRIIMI MAE Management, Inc. Retirement Plan Schedule of assets (held at end of year) As of December 31, 2001
Identity of issuer/description of investment Cost Current value - -------------------------------------------- ------------- ------------- Putnam Investments:* Putnam Global Growth Fund $ 626,116 $ 409,817 Putnam Money Market Fund 176,252 176,252 Putnam Growth & Income Fund 829,652 736,703 Putnam Income Fund 121,689 119,927 Putnam Investors Fund 836,106 697,278 Putnam New Opportunities Fund 676,054 454,540 Putnam International Growth & Income Fund 288,700 229,846 CRIIMI MAE Inc. Common Stock* 299,219 78,331 Participant loans (maturing on various dates, interest ranging from 5.75 to 10.5 percent)* 64,660 64,660 ------------- ------------- Total assets held at end of year $ 3,918,448 $ 2,967,354 ============= =============
*Represents a party-in-interest. The accompanying notes are an integral part of this schedule. 13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other person who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized. CRIIMI MAE MANAGEMENT, INC. RETIREMENT PLAN Date: May 14, 2002 By:/s/ William B. Dockser --------------------------- William B. Dockser Chairman of the Board and Principal Executive Officer EX-99 3 ex99_aa-letter.txt EX 99 - AA LETTER EXHIBIT 99.0 May 14, 2002 Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549 Re: Annual Report on Form 11-K for the year ended December 31, 2001 for the CRIIMI MAE Management, Inc. Retirement Plan Ladies and Gentlemen: Consistent with the Commission's release of March 18, 2002, please be advised that the Company has obtained a letter from Arthur Andersen LLP, the Plan's independent public accountants, dated May 14, 2002, containing the following representations regarding the audits performed on the CRIIMI MAE Management, Inc. Retirement Plan financial statements as of and for the years ended December 31, 2001 and 2000: o the audits were subject to Arthur Andersen's quality control system for the U.S. accounting and auditing practice to provide reasonable assurance that the engagement was conducted in compliance with professional standards; o there was appropriate continuity of Arthur Andersen personnel working on the audits; and o there was appropriate availability of national office consultation. Representation relating to the availability of personnel at foreign affiliates of Arthur Andersen was not relevant to these audits. By: CRIIMI MAE Management, Inc. Retirement Plan /s/ William B. Dockser ---------------------- William B. Dockser Chairman of the Board -----END PRIVACY-ENHANCED MESSAGE-----