CRIIMI MAE Reports 2000 Results

Apr 13, 2001, 01:00 ET from CRIIMI MAE Inc.

    ROCKVILLE, Md., April 13 /PRNewswire/ -- CRIIMI MAE Inc. (NYSE:   CMM) today
 reported results for the fourth quarter and the year ended December 31, 2000.
     For the year ended December 31, 2000, CRIIMI MAE reported a net loss under
 generally accepted accounting principles (GAAP) of approximately
 $155.5 million or $2.50 per basic and diluted share.  This compares to a net
 loss of approximately $132.4 million or $2.45 per basic and diluted share for
 the year ended December 31, 1999.
     For the fourth quarter of 2000, the net loss was approximately
 $118.8 million, or a net loss of $1.91 per basic and diluted share versus a
 net loss for the prior year's fourth quarter of approximately $151.9 million,
 or $2.72 per basic and diluted share.
     As of December 31, 2000, shareholders' equity was approximately
 $268 million as compared to approximately $219 million as of December 31,
 1999.
     The net loss for the quarter and year ended December 31, 2000 was
 primarily the result of impairment charges related to the Company's retained
 portfolio of CMBS, a loss related to the sale of the Company's interest in
 CRIIMI MAE CMBS Corp. Series 1998-1 ("CMO-IV") and impairment and other
 charges related to the CMBS sold as part of the Company's reorganization (the
 "CMBS Sale").
     Along with the slowing U.S. economy, the commercial mortgage loans
 underlying the Company's CMBS assets have experienced an increase in defaults
 and delinquencies.  The majority of such increases are concentrated in
 mortgages backed by certain hotel and retail property types located in various
 markets.  Mortgage loans requiring special servicing were $443.5 million,
 $310.6 million, and $283.1 million at March 31, 2001, December 31, 2000, and
 December 31, 1999, respectively.  As a percentage of the unpaid principal
 balance of the mortgage loans underlying the Company's retained CMBS, such
 amounts represented 2.2%, 1.5%, and 1.0%, respectively.  In consideration of
 these circumstances, the Company increased its total estimated credit losses
 related to the CMBS as of December 31, 2000 resulting in the recognition of an
 accounting impairment charge of approximately $143.5 million.  Substantially
 all of this impairment charge was previously recognized through shareholders'
 equity as an unrealized loss.  Impairment is recognized when the Company
 determines that the decline in fair value is "other than temporary."
     In addition to impairment recognized on the Company's retained CMBS, the
 results for 2000 include approximately $15.8 million of impairment charges
 related to the CMBS Sale, which was completed in November 2000.  The Company
 had previously recognized $156.9 million of impairment charges related to the
 CMBS Sale for the year ended December 1999.
     Results for 2000 also included a net loss of $31 million on the sale of
 the CMO-IV bonds.  Such sale was in connection with the Company's
 reorganization plan and was completed in November 2000.  The $31 million net
 loss consisted of a $45.8 million write down to fair value of the Company's
 investment in originated loans (classified as a reorganization item in the
 third quarter of 2000) and a gain of approximately $14.8 million related to
 the extinguishment of the related debt (classified as an extraordinary item in
 the fourth quarter of 2000).
     Net interest margin decreased for the three and the twelve months ended
 December 31, 2000 versus the same periods in 1999.  The net interest margin
 for the three months ended December 31, 2000 was $10.8 million versus
 $15.4 million for the same period in 1999.  The net interest margin for the
 year ended December 31, 2000 was approximately $55.9 million compared to
 approximately $71.0 million for 1999.  The decrease in the net interest margin
 for these periods in 2000 was due primarily to the sale of CMBS subject to the
 CMBS Sale.  The reduced bond holdings cause both interest income and interest
 expense to decline.  Additionally, the net interest margin decreased due to
 loan prepayments in the Company's insured mortgage portfolio and the sale of
 CMO-IV.
     Shareholders' equity of approximately $268 million approximated $1.70 per
 diluted share (based on approximately 124 million diluted shares outstanding)
 as of December 31, 2000.  As of April 13, 2001, there are approximately
 99.0 million shares of common stock issued and outstanding as compared to
 approximately 62.4 million shares as of December 31, 2000.   The increase is
 primarily a result of conversions of shares of Series E Cumulative Convertible
 Preferred Stock into approximately 4.1 million common shares and the
 conversions of Series G Preferred Stock into approximately 32.5 million common
 shares during the first quarter of 2001.
     The table that follows the text of this release identifies other items
 that contributed to the changes in GAAP earnings during the three and twelve
 months ended December 31, 2000 compared to the corresponding periods in 1999.
     For the year ended December 31, 2000, the Company estimated its tax net
 operating loss (the "NOL") at approximately $50 million or 79 cents per share.
 The NOL includes the recognition of $120 million of the January 2000 Loss (as
 more fully described below), approximately $50 million in unrealized
 mark-to-market gains on trading assets, and the recognition of a $30 million
 loss on the sale of CMO-IV. The $50 million NOL compares with tax basis income
 of approximately $32 million, or 57 cents per share for 1999.  Any accumulated
 and unused losses generally may be carried forward for up to 20 years to
 offset taxable income until fully utilized.
     On March 15, 2000, CRIIMI MAE elected for tax purposes to be classified as
 a trader in securities effective January 1, 2000.  Such trading activity is
 currently, and is expected to continue in, certain types of mortgage-backed
 securities, including subordinated and investment grade CMBS.  As a trader in
 securities, the Company marks-to-market its trading assets at the end of each
 tax year.  In addition, the Company realizes ordinary gains and losses on
 dispositions of its trading assets.
     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 $120 million of the loss in
 2000, and expects to recognize $120 million per year over the next three
 years.
     A more complete discussion of the Company's trader election, including
 related risks, the effect on taxable income (loss), REIT distribution
 requirements and cash flows, is available in the Company's Annual Report on
 Form 10-K for the year ended December 31, 2000.
     More information on CRIIMI MAE is available on its web site --
 www.criimimaeinc.com -- or for investors, call Susan Railey, 301-468-3120, or
 for news media, call Jim Pastore, 202-546-6451.
 
     Note:  Except for historical information, forward-looking statements
 contained in this release involve a variety of risks and uncertainties. These
 risks and uncertainties include the continued uncertainty of the capital
 markets; the ability of the Company to obtain recapitalization financing as
 contemplated by the Company's plan of reorganization; the ability of relevant
 parties to finalize the open issues and to finalize and execute constituent
 and operative documents called for by the Company's plan of reorganization,
 including with respect to the recapitalization financing; the trends in the
 CMBS market; competitive pressures; the effect of future losses on the
 Company's need for liquidity; the effectiveness and consummation of the
 Company's plan of reorganization; the effects of the bankruptcy proceeding on
 the Company's ongoing business; the actions of CRIIMI MAE's creditors and
 equity security holders; the possibility that the Company's trader election
 may be challenged on the grounds that the Company is not in fact a trader in
 securities or that it is only a trader with respect to certain securities and
 that the Company will, therefore, not be able to mark-to-market its
 securities, or that it will be limited in its ability to recognize certain
 losses, resulting in an increase in shareholder distribution requirements with
 the possibility that the Company may not be able to make such distributions or
 maintain REIT status; the likelihood that mark-to-market losses will increase
 and decrease due to changes in the fair market value of the Company's trading
 assets; the possibility that the Series G Dividend Preferred Stock will not
 eliminate any or all of the Company's 1999 tax liability or satisfy its REIT
 distribution requirements; the ability of the Company to obtain capital once
 its plan of reorganization has become effective which could be affected by,
 among other matters, the cost and availability of such capital, general
 economic conditions, restrictive covenants under the credit arrangements
 contemplated by the Company's plan of reorganization, results of operations,
 leverage, financial conditions and business prospects; and the outcome of
 litigation to which the Company is a party, as well as the risks and
 uncertainties that are set forth in the Company's disclosure statement, and
 from time to time in the Company's SEC  reports, including its Annual Report
 on Form 10-K for the year ended December 31, 2000.
 
 
                                CRIIMI MAE INC.
                        CONSOLIDATED STATEMENTS OF LOSS
 
                      For the three months ended    For the twelve months ended
                               December 31,                December 31,
                            2000          1999           2000         1999
     Interest income:
      Subordinated CMBS $29,254,581   $38,515,007   $137,072,372   $154,205,383
      Insured mortgage
       securities         7,581,595     7,981,073     30,668,228     33,405,171
      Originated loans    2,619,904     8,609,032     27,511,041     34,712,674
      Total interest
       income            39,456,080    55,105,112    195,251,641    222,323,228
 
     Interest and related expenses:
 
      Fixed-rate
       collateralized bond
       obligations-CMBS   6,320,705     6,303,956     25,345,519     22,054,939
      Fixed-rate
       collateralized
       mortgage
       obligations-
       insured
       securities         6,882,223     8,859,862     30,211,712     33,382,959
      Fixed-rate
       collateralized
       mortgage
       obligations-
       originated loans   2,316,582     7,169,464     22,716,109     27,479,268
      Fixed-rate senior
       unsecured notes    2,281,251     2,281,251      9,125,004      9,125,004
      Variable-rate
       secured
       borrowings-CMBS    8,731,300    13,169,310     43,785,955     52,195,828
      Other financing
       facilities         2,121,335     1,932,567      8,182,070      7,098,832
      Total interest
       expense           28,653,396    39,716,410    139,366,369    151,336,830
 
     Net interest margin 10,802,684    15,388,702     55,885,272     70,986,398
 
      Equity in (losses)
       from investments     827,496       (18,145)     1,512,005    (1,243,562)
      Other income        2,496,284     1,151,587      4,915,320      3,024,068
      Net gain on
       mortgage security
       dispositions          38,503       276,090        279,815      2,127,691
      Gain on originated
       loan dispositions         --       168,557        244,580        403,383
      General and
       administrative
       expenses          (2,719,167)   (3,095,749)   (11,301,385)  (12,049,256)
      Amortization of
       assets acquired
       in the Merger       (719,394)     (719,394)    (2,877,576)   (2,877,576)
      Unrealized loss on
       warehouse obligation      --            --             --    (8,000,000)
      Litigation expense         --            --     (2,500,000)           --
 
      Impairment
       on CMBS         (143,478,085)           --   (143,478,085)           --
 
      Reorganization items:
       Other               (786,188)   (6,450,345)    (4,950,677)  (22,003,128)
       Impairment on
        CMBS-Reorganization
        item                     --  (156,896,831)   (15,832,817) (156,896,831)
       Loss on REO               --            --       (924,283)           --
       Gain on Sale
        of CMBS           1,824,642            --      1,481,029            --
       Loss on
        originated loans         --            --    (45,845,712)           --
 
                       (142,515,909) (165,584,230)  (219,277,786) (197,515,211)
 
      Net loss before
       extraordinary
       item            (131,713,225) (150,195,528)  (163,392,514) (126,528,813)
      Extraordinary
       item-gain
       on debt
       extinguishment    14,808,737            --     14,808,737            --
      Net income before
       dividends accrued
       on preferred
       shares          (116,904,488) (150,195,528)  (148,583,777) (126,528,813)
      Dividends accrued
       on preferred
       shares            (1,905,973)   (1,657,360)    (6,911,652)   (5,840,152)
      Net loss to
       common
       shareholders   $(118,810,461)$(151,852,888) $(155,495,429)$(132,368,965)
 
 
                       FINANCIAL STATEMENT LOSS PER SHARE
 
     Total GAAP Basis
      Loss per
      share - Basic          ($1.91)       ($2.72)        ($2.50)       ($2.45)
 
     Weighted Average
      Shares - Basic     62,353,170    55,857,553     62,144,788    53,999,782
 
     Total GAAP Basis
      Loss per
      share - Diluted        ($1.91)       ($2.72)        ($2.50)       ($2.45)
 
 
                                CRIIMI MAE INC.
 
                                     As of                    As of
                                December 31, 2000       December 31, 1999
 
     Balance Sheet Data
 
     Subordinated CMBS and
      other MBS, at
      fair value                    $ 109,266,975            $142,435,429
 
     Subordinated CMBS pledged
      to creditors, at fair value     747,579,293           1,036,927,670
 
     Insured mortgage securities      385,751,407             394,857,239
 
     Investment in originated loans            --             470,204,780
 
     Total assets                   1,557,839,645           2,293,661,246
 
     Shareholders' equity             268,258,016             219,348,586
 
 

SOURCE CRIIMI MAE Inc.
    ROCKVILLE, Md., April 13 /PRNewswire/ -- CRIIMI MAE Inc. (NYSE:   CMM) today
 reported results for the fourth quarter and the year ended December 31, 2000.
     For the year ended December 31, 2000, CRIIMI MAE reported a net loss under
 generally accepted accounting principles (GAAP) of approximately
 $155.5 million or $2.50 per basic and diluted share.  This compares to a net
 loss of approximately $132.4 million or $2.45 per basic and diluted share for
 the year ended December 31, 1999.
     For the fourth quarter of 2000, the net loss was approximately
 $118.8 million, or a net loss of $1.91 per basic and diluted share versus a
 net loss for the prior year's fourth quarter of approximately $151.9 million,
 or $2.72 per basic and diluted share.
     As of December 31, 2000, shareholders' equity was approximately
 $268 million as compared to approximately $219 million as of December 31,
 1999.
     The net loss for the quarter and year ended December 31, 2000 was
 primarily the result of impairment charges related to the Company's retained
 portfolio of CMBS, a loss related to the sale of the Company's interest in
 CRIIMI MAE CMBS Corp. Series 1998-1 ("CMO-IV") and impairment and other
 charges related to the CMBS sold as part of the Company's reorganization (the
 "CMBS Sale").
     Along with the slowing U.S. economy, the commercial mortgage loans
 underlying the Company's CMBS assets have experienced an increase in defaults
 and delinquencies.  The majority of such increases are concentrated in
 mortgages backed by certain hotel and retail property types located in various
 markets.  Mortgage loans requiring special servicing were $443.5 million,
 $310.6 million, and $283.1 million at March 31, 2001, December 31, 2000, and
 December 31, 1999, respectively.  As a percentage of the unpaid principal
 balance of the mortgage loans underlying the Company's retained CMBS, such
 amounts represented 2.2%, 1.5%, and 1.0%, respectively.  In consideration of
 these circumstances, the Company increased its total estimated credit losses
 related to the CMBS as of December 31, 2000 resulting in the recognition of an
 accounting impairment charge of approximately $143.5 million.  Substantially
 all of this impairment charge was previously recognized through shareholders'
 equity as an unrealized loss.  Impairment is recognized when the Company
 determines that the decline in fair value is "other than temporary."
     In addition to impairment recognized on the Company's retained CMBS, the
 results for 2000 include approximately $15.8 million of impairment charges
 related to the CMBS Sale, which was completed in November 2000.  The Company
 had previously recognized $156.9 million of impairment charges related to the
 CMBS Sale for the year ended December 1999.
     Results for 2000 also included a net loss of $31 million on the sale of
 the CMO-IV bonds.  Such sale was in connection with the Company's
 reorganization plan and was completed in November 2000.  The $31 million net
 loss consisted of a $45.8 million write down to fair value of the Company's
 investment in originated loans (classified as a reorganization item in the
 third quarter of 2000) and a gain of approximately $14.8 million related to
 the extinguishment of the related debt (classified as an extraordinary item in
 the fourth quarter of 2000).
     Net interest margin decreased for the three and the twelve months ended
 December 31, 2000 versus the same periods in 1999.  The net interest margin
 for the three months ended December 31, 2000 was $10.8 million versus
 $15.4 million for the same period in 1999.  The net interest margin for the
 year ended December 31, 2000 was approximately $55.9 million compared to
 approximately $71.0 million for 1999.  The decrease in the net interest margin
 for these periods in 2000 was due primarily to the sale of CMBS subject to the
 CMBS Sale.  The reduced bond holdings cause both interest income and interest
 expense to decline.  Additionally, the net interest margin decreased due to
 loan prepayments in the Company's insured mortgage portfolio and the sale of
 CMO-IV.
     Shareholders' equity of approximately $268 million approximated $1.70 per
 diluted share (based on approximately 124 million diluted shares outstanding)
 as of December 31, 2000.  As of April 13, 2001, there are approximately
 99.0 million shares of common stock issued and outstanding as compared to
 approximately 62.4 million shares as of December 31, 2000.   The increase is
 primarily a result of conversions of shares of Series E Cumulative Convertible
 Preferred Stock into approximately 4.1 million common shares and the
 conversions of Series G Preferred Stock into approximately 32.5 million common
 shares during the first quarter of 2001.
     The table that follows the text of this release identifies other items
 that contributed to the changes in GAAP earnings during the three and twelve
 months ended December 31, 2000 compared to the corresponding periods in 1999.
     For the year ended December 31, 2000, the Company estimated its tax net
 operating loss (the "NOL") at approximately $50 million or 79 cents per share.
 The NOL includes the recognition of $120 million of the January 2000 Loss (as
 more fully described below), approximately $50 million in unrealized
 mark-to-market gains on trading assets, and the recognition of a $30 million
 loss on the sale of CMO-IV. The $50 million NOL compares with tax basis income
 of approximately $32 million, or 57 cents per share for 1999.  Any accumulated
 and unused losses generally may be carried forward for up to 20 years to
 offset taxable income until fully utilized.
     On March 15, 2000, CRIIMI MAE elected for tax purposes to be classified as
 a trader in securities effective January 1, 2000.  Such trading activity is
 currently, and is expected to continue in, certain types of mortgage-backed
 securities, including subordinated and investment grade CMBS.  As a trader in
 securities, the Company marks-to-market its trading assets at the end of each
 tax year.  In addition, the Company realizes ordinary gains and losses on
 dispositions of its trading assets.
     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 $120 million of the loss in
 2000, and expects to recognize $120 million per year over the next three
 years.
     A more complete discussion of the Company's trader election, including
 related risks, the effect on taxable income (loss), REIT distribution
 requirements and cash flows, is available in the Company's Annual Report on
 Form 10-K for the year ended December 31, 2000.
     More information on CRIIMI MAE is available on its web site --
 www.criimimaeinc.com -- or for investors, call Susan Railey, 301-468-3120, or
 for news media, call Jim Pastore, 202-546-6451.
 
     Note:  Except for historical information, forward-looking statements
 contained in this release involve a variety of risks and uncertainties. These
 risks and uncertainties include the continued uncertainty of the capital
 markets; the ability of the Company to obtain recapitalization financing as
 contemplated by the Company's plan of reorganization; the ability of relevant
 parties to finalize the open issues and to finalize and execute constituent
 and operative documents called for by the Company's plan of reorganization,
 including with respect to the recapitalization financing; the trends in the
 CMBS market; competitive pressures; the effect of future losses on the
 Company's need for liquidity; the effectiveness and consummation of the
 Company's plan of reorganization; the effects of the bankruptcy proceeding on
 the Company's ongoing business; the actions of CRIIMI MAE's creditors and
 equity security holders; the possibility that the Company's trader election
 may be challenged on the grounds that the Company is not in fact a trader in
 securities or that it is only a trader with respect to certain securities and
 that the Company will, therefore, not be able to mark-to-market its
 securities, or that it will be limited in its ability to recognize certain
 losses, resulting in an increase in shareholder distribution requirements with
 the possibility that the Company may not be able to make such distributions or
 maintain REIT status; the likelihood that mark-to-market losses will increase
 and decrease due to changes in the fair market value of the Company's trading
 assets; the possibility that the Series G Dividend Preferred Stock will not
 eliminate any or all of the Company's 1999 tax liability or satisfy its REIT
 distribution requirements; the ability of the Company to obtain capital once
 its plan of reorganization has become effective which could be affected by,
 among other matters, the cost and availability of such capital, general
 economic conditions, restrictive covenants under the credit arrangements
 contemplated by the Company's plan of reorganization, results of operations,
 leverage, financial conditions and business prospects; and the outcome of
 litigation to which the Company is a party, as well as the risks and
 uncertainties that are set forth in the Company's disclosure statement, and
 from time to time in the Company's SEC  reports, including its Annual Report
 on Form 10-K for the year ended December 31, 2000.
 
 
                                CRIIMI MAE INC.
                        CONSOLIDATED STATEMENTS OF LOSS
 
                      For the three months ended    For the twelve months ended
                               December 31,                December 31,
                            2000          1999           2000         1999
     Interest income:
      Subordinated CMBS $29,254,581   $38,515,007   $137,072,372   $154,205,383
      Insured mortgage
       securities         7,581,595     7,981,073     30,668,228     33,405,171
      Originated loans    2,619,904     8,609,032     27,511,041     34,712,674
      Total interest
       income            39,456,080    55,105,112    195,251,641    222,323,228
 
     Interest and related expenses:
 
      Fixed-rate
       collateralized bond
       obligations-CMBS   6,320,705     6,303,956     25,345,519     22,054,939
      Fixed-rate
       collateralized
       mortgage
       obligations-
       insured
       securities         6,882,223     8,859,862     30,211,712     33,382,959
      Fixed-rate
       collateralized
       mortgage
       obligations-
       originated loans   2,316,582     7,169,464     22,716,109     27,479,268
      Fixed-rate senior
       unsecured notes    2,281,251     2,281,251      9,125,004      9,125,004
      Variable-rate
       secured
       borrowings-CMBS    8,731,300    13,169,310     43,785,955     52,195,828
      Other financing
       facilities         2,121,335     1,932,567      8,182,070      7,098,832
      Total interest
       expense           28,653,396    39,716,410    139,366,369    151,336,830
 
     Net interest margin 10,802,684    15,388,702     55,885,272     70,986,398
 
      Equity in (losses)
       from investments     827,496       (18,145)     1,512,005    (1,243,562)
      Other income        2,496,284     1,151,587      4,915,320      3,024,068
      Net gain on
       mortgage security
       dispositions          38,503       276,090        279,815      2,127,691
      Gain on originated
       loan dispositions         --       168,557        244,580        403,383
      General and
       administrative
       expenses          (2,719,167)   (3,095,749)   (11,301,385)  (12,049,256)
      Amortization of
       assets acquired
       in the Merger       (719,394)     (719,394)    (2,877,576)   (2,877,576)
      Unrealized loss on
       warehouse obligation      --            --             --    (8,000,000)
      Litigation expense         --            --     (2,500,000)           --
 
      Impairment
       on CMBS         (143,478,085)           --   (143,478,085)           --
 
      Reorganization items:
       Other               (786,188)   (6,450,345)    (4,950,677)  (22,003,128)
       Impairment on
        CMBS-Reorganization
        item                     --  (156,896,831)   (15,832,817) (156,896,831)
       Loss on REO               --            --       (924,283)           --
       Gain on Sale
        of CMBS           1,824,642            --      1,481,029            --
       Loss on
        originated loans         --            --    (45,845,712)           --
 
                       (142,515,909) (165,584,230)  (219,277,786) (197,515,211)
 
      Net loss before
       extraordinary
       item            (131,713,225) (150,195,528)  (163,392,514) (126,528,813)
      Extraordinary
       item-gain
       on debt
       extinguishment    14,808,737            --     14,808,737            --
      Net income before
       dividends accrued
       on preferred
       shares          (116,904,488) (150,195,528)  (148,583,777) (126,528,813)
      Dividends accrued
       on preferred
       shares            (1,905,973)   (1,657,360)    (6,911,652)   (5,840,152)
      Net loss to
       common
       shareholders   $(118,810,461)$(151,852,888) $(155,495,429)$(132,368,965)
 
 
                       FINANCIAL STATEMENT LOSS PER SHARE
 
     Total GAAP Basis
      Loss per
      share - Basic          ($1.91)       ($2.72)        ($2.50)       ($2.45)
 
     Weighted Average
      Shares - Basic     62,353,170    55,857,553     62,144,788    53,999,782
 
     Total GAAP Basis
      Loss per
      share - Diluted        ($1.91)       ($2.72)        ($2.50)       ($2.45)
 
 
                                CRIIMI MAE INC.
 
                                     As of                    As of
                                December 31, 2000       December 31, 1999
 
     Balance Sheet Data
 
     Subordinated CMBS and
      other MBS, at
      fair value                    $ 109,266,975            $142,435,429
 
     Subordinated CMBS pledged
      to creditors, at fair value     747,579,293           1,036,927,670
 
     Insured mortgage securities      385,751,407             394,857,239
 
     Investment in originated loans            --             470,204,780
 
     Total assets                   1,557,839,645           2,293,661,246
 
     Shareholders' equity             268,258,016             219,348,586
 
 SOURCE  CRIIMI MAE Inc.