CRIIMI MAE Reports 1999 Results
ROCKVILLE, Md., April 14 /PRNewswire/ -- - CRIIMI MAE Inc., (NYSE: CMM)
the commercial mortgage company that filed a voluntary petition to reorganize
under Chapter 11 of the U.S. Bankruptcy Code on October 5, 1998, today
reported results for the fourth quarter and the year ended December 31, 1999
under both generally accepted accounting principles (GAAP) and on a tax basis.
CRIIMI MAE's 1999 results included a net loss under GAAP compared to net
income in 1998 and a reduction in tax basis earnings compared to 1998.
Under GAAP, net loss to common shareholders for the year ended
December 31, 1999 was approximately $132.4 million, or a net loss of $2.45 per
basic and diluted share. This compares with the prior year's net income of
approximately $35.4 million, or net income of 75 cents per basic share and
74 cents per diluted share.
For the fourth quarter of 1999, the net loss under GAAP was approximately
$151.9 million, or a net loss of $2.72 per basic and diluted share. This
compares with a net loss for the prior year's fourth quarter of approximately
$11.7 million, or a net loss of 23 cents per basic and diluted share.
GAAP results for the fourth quarter and the year ended December 31, 1999
included the recognition of an approximate $157 million impairment loss on a
portion of the Company's portfolio of commercial mortgage-backed securities
(the "CMBS Sale Portfolio"). Since the second quarter of 1998, the Company
has recorded changes in the fair value of its CMBS assets, including the CMBS
Sale Portfolio, as adjustments to both assets and shareholders' equity on the
balance sheet. However, since the Company's amended plan of reorganization
filed in December 1999 called for the sale of the CMBS Sale Portfolio, the
Company was required to recognize impairment on the CMBS Sale Portfolio in the
fourth quarter of 1999 as a charge to the income statement for the difference
between its cost basis and fair value. The CMBS Sale Portfolio, after
recognition of impairment, has a fair value and amortized cost basis of $385
million at December 31, 1999. In February 2000, CRIIMI MAE completed the sale
of a portion of the CMBS Sale Portfolio to Morgan Stanley. The Company is
currently engaged in discussions regarding the potential sale of the remainder
of the CMBS Sale Portfolio. Applicable losses on the CMBS Sale Portfolio on a
tax basis will be recognized at the time of sale.
GAAP results for 1999 also included an increase in expenses related to
other reorganization items to approximately $22.0 million for 1999 from
approximately $9.9 million for 1998. For the year ended December 31, 1999 and
1998, GAAP results included an $8.0 million loss and a $30.4 million loss,
respectively, associated with the Company's two mortgage loan conduit programs
with Citicorp Real Estate, Inc. and Prudential Securities
Incorporated/Prudential Securities Credit Corporation. GAAP results for 1998
also included a gain of approximately $28.8 million on the sale of investment
grade securities created through the resecuritization of approximately
$1.8 billion of the Company's subordinated CMBS.
Tax basis income available to common shareholders for the year ended
December 31, 1999 (after accrual of approximately $5.8 million for dividends
to preferred shareholders) was approximately $31.7 million, or 57 cents per
share, compared with approximately $66.7 million, or $1.38 per share, for
1998. Tax basis income declined for 1999 compared to 1998 primarily due to a
$36.3 million realized loss in the third quarter of 1999 resulting from the
sale of unsecuritized mortgage loans originated under the Citicorp Real
Estate, Inc. mortgage loan conduit program.
Tax basis income available to common shareholders for the fourth quarter
of 1999 was approximately $18.0 million, or 32 cents per share, compared to
approximately $9.4 million, or 18 cents per share for the same period of 1998.
The increase primarily resulted from realized losses of approximately
$4.5 million due to the impact of financial market volatility on a hedge
position in the fourth quarter of 1998, and the Company wrote off net deferred
costs of $3.3 million during 1998 associated with loans originated through its
two mortgage loan conduit programs that it no longer intended to securitize. |
