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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to____________
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Commission File Number: 1-14373
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
INSIGNIA FINANCIAL GROUP, INC.
401(K) RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
INSIGNIA FINANCIAL GROUP, INC.
200 PARK AVENUE
NEW YORK, NEW YORK 10166
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Financial Statements and Supplemental Schedules
Insignia Financial Group, Inc. 401(k) Retirement Savings Plan
December 31, 2000 and 1999 and year ended December 31, 2000
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
Financial Statements and Supplemental Schedule
Years ended December 31, 2000 and 1999
CONTENTS
Report of Independent Auditors................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits...............................2
Statement of Changes in Net Assets Available for Benefits.....................3
Notes to Financial Statements.................................................4
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets Held at End of Year.................10
Report of Independent Auditors
Advisory Committee
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Insignia Financial Group, Inc. 401(k) Retirement Savings Plan as of December
31, 2000 and 1999 and the related statement of changes in net assets available
for benefits for the year ended December 31, 2000. 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 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 at
December 31, 2000 and 1999, and the changes in its net assets available for
benefits for year ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.
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 for investment purposes as of December 31, 2000 is presented for purposes
of additional analysis and are not a required part of the financial statements
but are 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. The supplemental schedule is the responsibility of
the Plan's management. The 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 & YOUNG LLP
Greenville, South Carolina
June 18, 2001
1
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2000 1999
-------------------------
ASSETS
Cash and cash equivalents $ 58,080 $ 30,426
Investments, at fair value 50,082,694 42,590,510
-------------------------
Net assets available for benefits $50,140,774 $42,620,936
=========================
See accompanying notes.
2
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2000
ADDITIONS
Investment income:
Net realized and unrealized appreciation in fair value of investments $ (3,651,726)
Interest and dividends 3,951,947
------------
300,221
------------
Contributions:
Employer 2,097,033
Participants 7,723,633
Rollover 2,426,061
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12,246,727
------------
Total additions 12,546,948
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Benefits paid to participants 4,942,141
Administrative expenses 84,969
------------
5,027,110
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Net increase 7,519,838
Net assets available for benefits at December 31, 1999 42,620,936
------------
Net assets available for benefits at December 31, 2000 $ 50,140,774
============
See accompanying notes.
3
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
Notes to Financial Statements
December 31, 2000
1. DESCRIPTION OF THE PLAN
The following description of the Insignia Financial Group, Inc. 401(k)
Retirement Savings Plan ("the Plan") provides only general information.
Participants should refer to the Summary Plan Description for a more complete
description of the Plan's provisions.
GENERAL
Effective September 15, 1998, Insignia/ESG Holdings, Inc. established the
Insignia/ESG Holdings, Inc. 401(k) Retirement Savings Plan for the benefit of
its eligible employees. Effective November 2, 1998, Insignia/ESG Holdings, Inc.
became Insignia Financial Group, Inc. ("the Company") and the Plan's name was
changed to Insignia Financial Group, Inc. 401(k) Retirement Savings Plan. The
Plan is a defined contribution plan covering all employees who have attained age
21. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
CONTRIBUTIONS
Each year, participants may contribute up to 15% of their pretax annual
compensation, as defined in the Plan. Participants may also contribute amounts
representing distributions from other qualified defined benefit or defined
contribution plans. The Company, at the beginning of each Plan year, will
determine the amount of any discretionary matching contributions to be made to
the Plan during that year. The Company elected to make a contribution equal to
50% of a participant's contribution, up to a maximum of 6% of compensation that
a participant contributes to the Plan for the period from September 15, 1998
(inception of the Plan) to December 31, 2000. Additional amounts may be
contributed at the option of the Company's Board of Directors.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's contributions and (b) plan earnings. Forfeited
balances of terminated participants' nonvested accounts are used to reduce the
Plan's ordinary and necessary administrative expenses or Employer contributions.
Total forfeitures for the year ended December 31, 2000 were $168,865. The
benefit to which a participant is entitled is the benefit that can be provided
from the participant's account.
4
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
VESTING
Participants are immediately vested in their contributions plus actual earnings
thereon. A participant who is an employee on or after the effective date of the
Plan shall become vested in the Company's matching contributions in 25%
increments with 100% vesting occurring after the completion of four years of
service.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $700 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account. Loan
terms range from 1-5 years or up to 10 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's account and
bear interest based on the prime interest rate plus one percent as reported in
The Wall Street Journal for the day on which the loan application is approved.
Principal and interest is paid ratably through employee payroll deductions.
PAYMENT OF BENEFITS
Upon termination, death, disability, or retirement, a participant may receive a
lump-sum amount or in monthly, quarterly, or annual installments over a fixed,
reasonable period of time, not exceeding the life expectancy of the participant
or the joint life and last survivor expectancy of the participant and the named
beneficiary. In either case, the participant may only receive the amount equal
to the vested value of their account.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
5
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared on the accrual basis of accounting.
INVESTMENT VALUATION
The Plan's investments are stated at fair value which equals the quoted market
price on the last business day of the plan year. The shares of registered
investment companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year-end. Securities traded on a
national securities exchange are valued at the last reported sales price on the
last business day of the Plan year. The participant loans are valued at their
outstanding balances which approximate fair value.
Included in the investments of the Plan are shares of a unitized stock fund
consisting of cash and shares of Apartment Investment and Management Company
("AIMCO") common stock ("Insignia Wasting Fund"). The AIMCO common stock
originated when the predecessor Plan Sponsor merged with AIMCO and the Plan's
Sponsor's stock was converted to AIMCO shares. No contributions are allowed into
the Insignia Wasting Fund and the fund will eventually be dissolved.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
6
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
During 2000, the Plan's investments (including investments purchased, sold as
well as held during the year) appreciated in fair value as determined by quoted
market prices as follows:
NET REALIZED AND
UNREALIZED
APPRECIATION IN FAIR
VALUE OF INVESTMENTS
--------------------
Common Stock $ 401,481
Shares of registered investment companies (4,053,207)
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$(3,651,726)
====================
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
DECEMBER 31
2000 1999
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Fidelity Puritan Fund $ 5,989,385 $ 5,683,788
Fidelity Magellan Fund 7,301,288 5,195,406
Fidelity Contrafund 12,257,709 11,646,139
Fidelity Equity Income Fund 8,255,874 8,050,419
Fidelity Growth and Income Fund 4,478,064 3,113,607
Fidelity Managed Income Portfolio 3,890,188 3,423,066
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated September 18, 1998, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the "Code"), and therefore, the related
trust is exempt from taxation. Once qualified, the Plan is required to operate
in conformity with the Code to maintain its qualification. The Plan
Administrator believes that the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan is
qualified and the related trust is tax exempt.
7
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Certain fees incurred during the year for legal, accounting and other services
were paid by the Company on behalf of the Plan.
8
Supplemental Schedule
9
Insignia Financial Group, Inc.
401(k) Retirement Savings Plan
EIN: 56-2084290 Plan Number: 001
Schedule H, Line 4i -
Schedule of Assets Held at End of Year
December 31, 2000
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE,
(B) IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, PAR OR (E) CURRENT
(A) LESSOR OR SIMILAR PARTY MATURITY VALUE (D) COST VALUE
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Mutual Funds:
* Fidelity Puritan Fund 318,077 shares ** $ 5,989,385
* Fidelity Magellan Fund 61,201 shares ** 7,301,288
* Fidelity Contrafund 249,292 shares ** 12,257,709
* Fidelity Equity Income Fund 154,518 shares ** 8,255,874
* Fidelity Growth and Income Fund
106,367 shares ** 4,478,064
* Fidelity Low Priced Stock Fund 54,261 shares ** 1,254,515
* Fidelity Diversified International
Fund 78,876 shares ** 1,730,541
* Fidelity U.S. Bond Index Fund 140,453 shares ** 1,487,402
--------------------------------
42,754,778
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Collective Trust Funds:
* Fidelity Managed Income Portfolio
3,890,188 units ** 3,890,188
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Common Stock:
* Insignia Wasting Fund 110,584 shares ** 615,380
* Insignia ESG Fund 252,715 shares ** 1,262,966
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1,878,346
--------------------------------
* Loans to participants Interest ranging from 8.6% and 10.4%
and maturity dates from 2000 to
2004 ** 1,559,382
--------------------------------
$50,082,694
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* Indicates party-in-interest to the Plan.
** Cost information has not been included in column (d) because all
investments are participant directed.
10
SIGNATURES
The 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.
INSIGNIA FINANCIAL GROUP, INC.
401(K) RETIREMENT SAVINGS PLAN
By:
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Name: Adam B. Gilbert
Title: Member of Benefits Committee
and Executive Vice President
Date: June 27, 2001