-----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, JIvESueNBDDviL+5eH8iw6Y02iQE3JayX/pRuvgvFQ4ma89kXiBpFF8E104c6B5x OYdOC63dxP4AzfdNKT2xnQ== 0000847322-05-000038.txt : 20050624 0000847322-05-000038.hdr.sgml : 20050624 20050624115737 ACCESSION NUMBER: 0000847322-05-000038 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050614 FILED AS OF DATE: 20050624 DATE AS OF CHANGE: 20050624 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: 05914246 BUSINESS ADDRESS: STREET 1: 11200 ROCKVILLE PIKE CITY: ROCKVILLE STATE: MD ZIP: 20852 BUSINESS PHONE: 3012554700 MAIL ADDRESS: STREET 1: 11200 ROCKVILLE PIKE CITY: ROCKVILLE STATE: MD ZIP: 20852 FORMER COMPANY: FORMER CONFORMED NAME: CRI INSURED MORTGAGE ASSOCIATION INC DATE OF NAME CHANGE: 19920703 11-K 1 form_11k-2005.txt CMM RETIREMENT PLAN 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K For annual reports of employee stock purchase, savings and similar plans pursuant to section 15(d) of the Securities Exchange Act of 1934. [x] 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: 1-10360 CRIIMI MAE Management, Inc. Retirement Plan (Full title of the plan) CRIIMI MAE INC. 11200 Rockville Pike, 4th Floor Rockville, Maryland 20852 Telephone (301) 255-4700 (Name of Issuer of the securities held pursuant to the plan and the address of its principal executive office) 2 CRIIMI MAE MANAGEMENT, INC. RETIREMENT PLAN INDEX TO FORM 11-K Financial Statements as of December 31, 2004 and 2003 Together with Report of Independent Registered Public Accounting Firm 3 Exhibits 16 Signature 17 3 CRIIMI MAE MANAGEMENT, INC. RETIREMENT PLAN Financial Statements and Supplemental Schedule Years ended December 31, 2004 and 2003 with Report of Independent Registered Public Accounting Firm 4 CRIIMI MAE Management, Inc. Retirement Plan Financial Statements and Supplemental Schedule Years ended December 31, 2004 and 2003 Contents Report of Independent Registered Public Accounting Firm.......................1 Audited Financial Statements Statements of Net Assets Available for Benefits...............................2 Statements of Changes in Net Assets Available for Benefits....................3 Notes to Financial Statements.................................................4 Form 5500 Supplemental Schedule: Schedule H, Line 4i - Schedule of Assets (Held at End of Year)...............11 5 Report of Independent Registered Public Accounting Firm Trustees and Participants 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 as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements 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 the 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. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audits included 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, and 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 at December 31, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2004 is presented for purposes of additional analysis and is not a required part of 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 is the responsibility of the Plan's management. This supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/Ernst and Young McLean, Virginia June 20, 2005 6 CRIIMI MAE Management, Inc. Retirement Plan Statements of Net Assets Available for Benefits
December 31 2004 2003 ----------- ---------- Investments $ 4,024,371 $ 3,441,697 Contributions receivable - employer 18,344 - ----------- ----------- Net assets available for benefits $ 4,042,715 $ 3,441,697 =========== ===========
See accompanying notes. 7 CRIIMI MAE Management, Inc. Retirement Plan Statements of Changes in Net Assets Available for Benefits
Year ended December 31 2004 2003 ----------- ---------- Additions: Participant contributions $ 422,157 $ 495,625 Employer contributions 140,154 117,646 Dividend and interest income 112,762 47,474 Net appreciation in fair value of investments 414,239 626,963 ----------- ----------- Total additions 1,089,312 1,287,708 ----------- ----------- Deductions: Benefit payments 488,294 457,438 ----------- ----------- Total deductions 488,294 457,438 ----------- ----------- Net increase in net assets available for benefits 601,018 830,270 Net assets available for benefits, beginning of year 3,441,697 2,611,427 ----------- ----------- Net assets available for benefits, end of year $ 4,042,715 $ 3,441,697 =========== ===========
See accompanying notes. 8 CRIIMI MAE Management, Inc. Retirement Plan Notes to Financial Statements December 31, 2004 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) Sections 401(a) and 401(k). The Plan, originally 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 Company and CMSLP are wholly owned subsidiaries of CRIIMI MAE Inc. (CRIIMI MAE). The following description of the Plan provides only general information. Participants should refer to the Plan document for a 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 100% of compensation, as defined by the Plan, subject to certain limitations under the IRC. Employer matching contributions are discretionary. For the six months ended June 30, 2003, the Company and CMSLP provided a matching cash contribution equal to 50% of each participant's contribution for a total matching contribution of up to a maximum of 5% of a participant's compensation (as defined by the Plan). The Company and CMSLP temporarily discontinued the match for the last six months of 2003. For the year ended December 31, 2004, the Company and CMSLP provided a quarterly matching contribution equal to 50% of each participant's contribution for a total matching contribution of up to a maximum of 5% of a participant's compensation (as defined by the Plan). For the year ended December 31, 2004, the matching contribution has been made by transferring CRIIMI MAE common stock to employee accounts based on the fair market value of such stock on the last business day of each calendar quarter. Participants may elect to redirect this contribution to any of the available mutual funds within the plan at any time. Participants are eligible for employer matching contributions when credited with one hour of service in the plan year and if they are employed on the last day of the employer match calculation period (presently the calendar quarter). 9 CRIIMI MAE Management, Inc. Retirement Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) - --------------------------------------- Participant Accounts - -------------------- Each participant's account is credited with his or her own contributions, the employer matching contributions, and earnings or losses based on the participant's own investment choices. 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 Employer matching contributions vest based on a five-year graded schedule. Participants become 20% vested for each year of service completed and become 100% vested after five or more years of service. Forfeited Accounts - ------------------ Forfeited balances of terminated participants' non-vested accounts are used by the Plan to offset the employer matching contributions. For the years ended December 31, 2004 and 2003, forfeited non-vested accounts in the amount of $22,513 and $8,582, respectively, were used to offset the amounts of the employer matching contributions. As of December 31, 2004 and 2003, forfeited non-vested account balances totaled $22,932 and $6,235, respectively. 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 and the net assets of the Plan will be distributed by the trustee in accordance with the terms of the Plan and trust agreement. 10 CRIIMI MAE Management, Inc. Retirement Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) - --------------------------------------- Significant Investments - ----------------------- The fair market values of individual investments that represent 5% or more of the Plan's total net assets as of December 31, 2004 and 2003 are as follows:
2004 2003 ----------- ---------- Federated Kaufmann Fund $ 407,185 $ 365,142 The Growth Fund of America 513,517 575,041 Legg Mason Value Trust, Inc. 349,299 202,535 Templeton Growth Fund 719,317 564,410 Van Kampen Equity and Income Fund 647,815 629,624 CRIIMI MAE Inc. Common Stock 443,314 174,244 Legg Mason Cash Reserve Trust 198,932* 220,732 Thornburg Limited Term Income Fund 148,801* 196,052 *Less than 5% of the plans total net assets as of December 31, 2004, provided for comparative purposes to 2003 amounts.
Participant Loans - ----------------- A participant may borrow the lesser of $50,000 or 50% 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. The term of a principal residence loan will be determined by the administrator considering the maturity dates quoted by representative commercial banks in the local area for a similar loan. 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 loan. The interest rates on participant loans outstanding at December 31, 2004 and 2003, ranged from 5.75% to 10.50%. Principal and interest are paid on such loans ratably through monthly payroll deductions. Payment of Benefits - ------------------- Participants may take regular distributions upon leaving the Company or CMSLP and may qualify for hardship or age 59 1/2 withdrawals while employed by the Company or CMSLP. The Plan may automatically distribute in a lump sum any vested account balance that is less than $5,000 for participants no longer employed with the Company or CMSLP. 11 CRIIMI MAE Management, Inc. Retirement Plan Notes to Financial Statements (continued) 1. Description of the Plan (continued) - --------------------------------------- On termination of service due to death, disability, or retirement, participants may elect to receive their benefits as a lump-sum cash 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. Administrative Expense - ---------------------- Generally, expenses of maintaining the Plan (excluding fees for participant loans) are paid for by the Company and CMSLP. Such payments were $10,384 and $10,598 in 2004 and 2003, respectively. In addition, 12b-1 fees charged by the mutual funds available under the Plan are used to compensate Legg Mason (the Plan's broker/dealer). 2. Significant Accounting Policies - ------------------------------------ Accounting Method - ----------------- The accompanying financial statements have been prepared using the accrual method of accounting. Reclassification - ---------------- Prior year amounts have been reclassified to conform to the 2004 presentation. Miscellaneous expense is included in Dividend and Interest Income on the Statement of Changes in Net Assets Available for Benefits. Use of Estimates - ---------------- The preparation of the financial statements in conformity with U.S. generally accepted accounting principles 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 - ----------- 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 2004 and 2003, the Plan's investments (including 12 CRIIMI MAE Management, Inc. Retirement Plan Notes to Financial Statements (continued) 2. Significant Accounting Policies (continued) - ------------------------------------------------ gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $414,239 and $626,963, respectively, as follows:
2004 2003 ---------- --------- Mutual Fund Investments $ 292,461 $ 621,036 CRIIMI MAE Inc. Common Stock 121,778 5,927 --------- --------- Total $ 414,239 $ 626,963 ========= =========
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 securities could materially affect the amounts reported in the statements of net assets available for benefits. 3. Income Tax Status - ---------------------- The Plan is a non-standardized prototype plan and has received an opinion letter from the Internal Revenue Service (IRS) dated March 5, 2002, stating that the form of the Plan is qualified under Section 401 of the Internal Revenue Code (the "IRC"), and therefore, the related trust is exempt from taxation. In accordance with Revenue Procedure 2002-6 and Announcement 2001-77, the Plan Sponsor has determined that it is eligible to and has chosen to rely on the current IRS prototype plan opinion letter. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan administrator believes the Plan is being operated in compliance with the applicable requirements of the IRC and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt. 13 CRIIMI MAE Management, Inc. Retirement Plan Notes to Financial Statements (continued) 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, 2004 and 2003:
Contributions receivable Net Assets ------------------------------ -------------------------- 2004 2003 2004 2003 ------------------------------ -------------------------- Per financial statements $ 18,344 $ - $ 4,042,715 $ 3,441,697 Timing differences for recording cash receipts (18,344) - (18,344) - ----------- ----------- ----------- ----------- Per Form 5500 $ - $ - $ 4,024,371 $ 3,441,697 =========== =========== =========== =========== 2004 2003 --------- ---------- Contributions received per financial statements $ 562,311 $ 613,271 Less: contributions received after year-end relating to current year (18,344) - Add: contributions received in current year relating to prior year - 15,857 --------- --------- Contributions received per Form 5500 $ 543,967 $ 629,128 ========= =========
14 Supplemental Schedule 15 CRIIMI MAE Management, Inc. Retirement Plan Employer Identification Number 52-1917789, Plan Number 001 Form 5500, Schedule H, Line 4i - Schedule of Assets (Held at End of Year) December 31, 2004 (a) (b)/(c) (d) (e) Identity of Issuer/Description of Investment Cost ** Current Value - ------------------------------------------------------------------------------- Cash $ - Mutual Fund Investments: American High-Income Trust 83,455 AIM Mid Cap Core Equity Fund 158,939 Delaware REIT Fund 60,948 Federated Kaufmann Fund 407,185 The Growth Fund of America 513,517 * Legg Mason Cash Reserve Trust 198,932 * Legg Mason Value Trust, Inc. 349,299 * Columbia Acorn Trust (Liberty Acorn Fund) 176,602 * Royce Pennsylvania Mutual Fund 89,665 Templeton Growth Fund 719,317 Thornburg Limited Term Income Fund 148,801 Van Kampen Equity and Income Fund 647,815 * CRIIMI MAE Inc. Common Stock 443,314 * Participant loans (maturing on various dates, interest at 5.75% to 6.5%) 26,582 ------------ Total assets held at end of year $ 4,024,371 ============ *Represents a party-in-interest. **Not required, the transactions are under a participant-directed individual account plan. 16 EXHIBITS Exhibit No. Purpose - ----------- ------- 23.1 Consent of Ernst & Young (filed herewith). 17 SIGNATURE CRIIMI MAE Management, Inc. Retirement 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. CRIIMI MAE MANAGEMENT, INC. RETIREMENT PLAN Date: June 24, 2005 By: /s/Mark R. Jarrell -------------------------------------- Mark R. Jarrell President and Chief Operating Officer of CRIIMI MAE Management, Inc. EX-23 2 exh_23-062005.txt EXHIBIT 23 CONSENT OF IND PUBLIC ACCT FIRM Exhibit 23.1 Consent of Independent Registered Public Accounting Firm We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-113942 and 333-88462) pertaining to the CRIIMI MAE Management, Inc. Retirement Plan of our report dated June 20, 2005, with respect to the financial statements and schedule of the CRIIMI MAE Management, Inc. Retirement Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2004. /s/Ernst and Young McLean, Virginia June 20, 2005 -----END PRIVACY-ENHANCED MESSAGE-----