CRIIMI MAE Reports Second Quarter and First Half Results
ROCKVILLE, Md., Aug. 7 /PRNewswire/ -- CRIIMI MAE Inc. (NYSE: CMM) today reported results for the three and six months ended June 30, 2001.
For the three months ended June 30, 2001, CRIIMI MAE reported a net loss to common shareholders under generally accepted accounting principles (GAAP) of approximately $2.6 million, or a loss of two cents per basic and diluted share. For the three months ended June 30, 2000, net income available to common shareholders was approximately $3.7 million, or six cents per basic share and five cents per diluted share.
For the first half of 2001, net income available to common shareholders was approximately $1.3 million, or net income of one cent per basic and diluted share, compared to approximately $7.8 million, or 13 cents per basic share and 11 cents per diluted share for the same period in 2000.
The net loss to common shareholders for the second quarter of 2001 and net income to common shareholders for the first half of 2001 include a one time, $3.9 million financing origination fee paid in April 2001 in connection with $262 million of the Company's Chapter 11 recapitalization financing.
Also included in the results for the three and six months ended June 30, 2001, is net interest margin of $8.8 million and $18.8 million, respectively, representing the net interest earned on the Company's retained subordinated commercial mortgage-backed securities (CMBS) portfolio and its insured mortgage securities. These amounts compare to net interest margin of $13.4 million and $31.6 million for the three and six months ended June 30, 2000, respectively. This decline in net interest margin is principally attributed to the sales during 2000 of certain CMBS and the Company's interest in CRIIMI MAE CMBS Corp. Series 1998-1 ("CMO-IV") in connection with its reorganization plan.
The results for these periods also include net losses related to the Company's servicing affiliate, reflected in equity in losses from investments, of $1.5 million and $2.3 million for the three and six months ended June 30, 2001, respectively. Such equity in losses reflects the servicing affiliate's decreased revenues, due in part to a reduced servicing portfolio, and an increase in information technology expenses for the 2001 periods compared to the corresponding 2000 periods. Also included in the equity in losses are certain non-cash charges of the servicing affiliate, such as depreciation and amortization.
Partially offsetting the decrease in the Company's earnings during the second quarter and first half of 2001 compared to the same periods in 2000 is a reduction in reorganization items related to the Company's emergence from Chapter 11 during the second quarter of 2001. Other factors which impacted the 2001 second quarter and six-month results can be found in the table that follows.
As of June 30, 2001, shareholders' equity was approximately $280 million ($1.52 per diluted share) as compared to approximately $268 million ($1.70 per diluted share) as of December 31, 2000.
CRIIMI MAE had 119,633,634 common shares outstanding at June 30, 2001 and 123,388,093 common shares outstanding at August 6, 2001, such increase due to the payment in July 2001 of accrued and unpaid dividends in the form of common stock to certain preferred shareholders. At December 31, 2000, the Company had 62,353,170 common shares outstanding.
For the first six months of 2001, the Company estimated its tax net operating loss (NOL) at approximately $45 million or 40 cents per share. The NOL for the first half of 2001, along with approximately $50 million of net loss carried forward from the year 2000, resulted in a cumulative NOL carry forward of approximately $95 million as of June 30, 2001, which compares with approximately $33 million or 52 cents per share of NOL as of June 30, 2000.
The Company initially marked-to-market its trading assets on January 1, 2000, resulting in a loss for tax purposes of approximately $478 million (the "January 2000 Loss"). The Company recognized approximately $120 million of the $478 million January 2000 Loss in 2000, and expects to recognize approximately $120 million per year through 2003, including approximately $30 million in each quarter of this year.
Because CRIIMI MAE incurred a net operating loss for tax purposes during the six months ended June 30, 2001, the Company was not required to pay dividends to common shareholders for that period, and does not anticipate paying dividends to common shareholders for the foreseeable future.
At June 30, 2001, the Company's assets totaled approximately $1.37 billion and it performed mortgage servicing for a mortgage loan portfolio of approximately $20 billion.
Other Information:
During the second quarter 2001, Standard & Poor's reinstated CRIIMI MAE Services Limited Partnership (CRIIMI MAE Services), a servicing affiliate of CRIIMI MAE Inc., to the rating agency's Select Servicer List as a commercial loan servicer, master servicer, and special servicer. CRIIMI MAE Services also is approved as a master and special servicer by Moody's, and, in December 2000, received an affirmation of its primary, master and special servicer ratings from Fitch.
Also during the second quarter, CRIIMI MAE redesigned its Web site -- criimimaeinc.com -- to provide shareholders, the media, and general public with corporate and portfolio information about CRIIMI MAE. CRIIMI MAE Services also launched a new Web site for CMBS investors, loan servicers and other participants in commercial mortgage loan and CMBS transactions. This new Web site -- criimimaeservices.com -- provides registered users with detailed information on commercial mortgage assets related to the $20 billion mortgage loan portfolio serviced by CRIIMI MAE Services.
On July 10, 2001, CRIIMI MAE set an August 9, 2001 record date for shareholders entitled to vote at the annual meeting of shareholders scheduled for September 25, 2001. CRIIMI MAE also announced that shareholders will be asked at the annual meeting to consider and approve, among other matters, a one-for-ten reverse stock split of the Company's issued and outstanding common stock in order to help facilitate two important objectives: to maintain the common stock's listing on the New York Stock Exchange and to increase the attractiveness of the common stock to the investment community. |
