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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999
-------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________________ to ___________________
Commission file number_________________________________________________
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
CB Richard Ellis 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
CB Richard Ellis Services, Inc.
200 N. Sepulveda Blvd. Suite # 300
El Segundo, CA 90245
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CB RICHARD ELLIS 401(k) PLAN
December 31, 1999 and 1998
Index
-----
Report of Independent Public Accountants
Financial Statements:
Statements of Net Assets Available for Benefits as of December 31, 1999 and
1998
Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 1999
Notes to Financial Statements
Supplemental Schedule:
Schedule I - Schedule of Assets Held for Investment Purposes as of December 31,
1999
Note: Schedules other than those listed above have been omitted because the
information is otherwise disclosed, not applicable or not required by 29
CFR 2520.103-10 of the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974.
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Investment Advisory Committee of
CB Richard Ellis 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of the CB Richard Ellis 401(k) Plan (the Plan) as of December 31, 1999 and 1998,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 1999. These financial statements and the
supplemental schedule referred to below 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
audits 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 as of
December 31, 1999 and 1998, and the changes in net assets available for benefits
for the year ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic 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. The supplemental schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Los Angeles, California
June 23, 2000
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CB RICHARD ELLIS 401(k) PLAN
Statements of Net Assets Available for Benefits
As of December 31, 1999 and 1998
1999 1998
------------ ------------
Investments, at fair value:
- Mutual Funds $240,907,506 $194,563,782
- CB Richard Ellis Services, Inc. Stock Fund 25,857,812 42,007,639
- Vanguard Retirement Savings Trust 18,216,204 18,426,079
- Loan Fund 2,402,207 2,825,479
------------ ------------
Total investments 287,383,729 257,822,980
------------ ------------
Receivables:
Employer contributions 1,717,175 -
Participant contributions 270,844 209,225
------------ ------------
Total receivables 1,988,019 209,225
------------ ------------
Net Assets Available For Benefits $289,371,748 $258,032,204
============ ============
The accompanying notes are an integral part of these financial statements.
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CB RICHARD ELLIS 401(k) PLAN
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1999
Net Assets Available for Benefits,
beginning of year $258,032,204
Additions:
Contributions:
Employer contributions, net of forfeitures 1,717,175
Participant contributions 24,750,028
------------
Total contributions 26,467,203
------------
Investment income:
Interest and dividends 19,950,350
Net appreciation in fair value of investments 11,354,096
------------
Total investment income 31,304,446
------------
Total additions 57,771,649
------------
Deductions:
Benefits paid to participants 26,392,374
Administrative expenses 39,731
------------
Total deductions 26,432,105
------------
Net increase 31,339,544
------------
Net Assets Available for Benefits,
end of year $289,371,748
============
The accompanying notes are an integral part of this financial statement.
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CB RICHARD ELLIS 401(k) PLAN
Notes to Financial Statements
December 31, 1999
1. Description of the Plan
-----------------------
The following is a summary description of the CB Richard Ellis 401(k) Plan,
("the Plan"), which is sponsored by CB Richard Ellis Services, Inc. (together
with its subsidiaries, "CB" or the "Company"). Participants should refer to the
Plan document and related amendments for a further description of the provisions
of the Plan.
a. General
-------
The Plan is a defined contribution plan, which provides retirement benefits
for eligible employees of the Company who elect to participate. The Plan
became effective on April 19, 1989, and is a spin-off from the Coldwell
Banker Real Estate Group Capital Accumulation Plan (the "Prior Plan"). The
Plan covers substantially all employees of the Company and is designed to
qualify under Sections 401(a) and 401(k) of the Internal Revenue Code of
1986 (the "Code"). The Plan is also subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA") as amended.
b. Administration
--------------
The Plan is administered by the Investment Advisory Committee (the
"Committee" or the "Plan Administrator") appointed by the Chief Executive
Officer of the Company. The Committee has been given all powers necessary
to carry out its duties, including, but not limited to, the power to
administer and interpret the Plan, to answer all questions affecting
eligibility of participants in the Plan and to authorize disbursements for
the payment of Plan benefits.
c. Trustee, Custodian and Fund Manager of Investments
--------------------------------------------------
The Vanguard Group (the "Trustee"), together with its affiliates, serves as
trustee, custodian and fund manager of the Plan investments. The Trustee
is the primary recordkeeper for the Plan, determines the value of Plan
investments, other than the value of the CB Richard Ellis Services, Inc.
Stock Fund, and is regularly required to provide an accounting of all
receipts, disbursements and transactions made on behalf of the Plan.
d. Contributions
-------------
Participants in the Plan who are not highly compensated employees, as
defined in the Plan, may elect to contribute from 1 to 15 percent of
compensation before taxes through payroll deferrals. The percentage of
compensation for contributions of highly compensated employees may be
limited by the Committee.
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The Company may make discretionary matching and profit sharing
contributions to the Plan in such amounts as determined by the Board of
Directors. For the year ended December 31, 1999, the Company authorized a
discretionary matching contribution of $1,628,000, which is included in
employer contributions in the accompanying statement of changes in net
assets.
e. Participant Accounts
--------------------
Each participant's account is credited with an allocation of Company
contributions and investment earnings or losses. Allocation of earnings on
any of the investment funds, except for the CB Richard Ellis Services, Inc.
Stock Fund, is based on each participant's balance in the investment fund
as compared to the total participants' balance in such fund as of the
preceding valuation date. Dividends on CB stock are allocated based on the
number of shares a participant holds.
f. Vesting
-------
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's contribution portion of their
accounts plus actual earnings thereon is based upon the occurrence of the
earliest of the following:
a. 100 percent upon Plan termination.
b. 100 percent upon participant attaining age 65, death or
disability.
c. for participants who commenced employment prior to January 1,
1989, zero percent for less than four years of vesting service, as
defined in the Plan, 10 percent for four years of vesting service and
100 percent for five or more years of vesting service.
d. for participants who commenced employment after January 1, 1989,
zero percent for less than five years of vesting service and 100
percent for five or more years of vesting service.
g. Forfeited Accounts
------------------
Forfeited nonvested accounts are used to reduce future employer
contributions. Unallocated forfeitures at December 31, 1999 and 1998
totaled approximately $83,812 and $55,491, respectively.
h. Benefit Payments and Withdrawals
--------------------------------
Participants are entitled to the vested portion of their accounts upon
attaining age 65, termination of employment, disability or death. The Plan
also provides for withdrawals due to hardship from the fully vested
employee contributions, subject to certain limitations. Benefits are
recorded when paid.
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i. Loans
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Participants may elect to borrow from the vested portion of their accounts
up to a maximum equal to the lesser of $50,000 or 50 percent of their
account balance. Loan transactions are treated as a transfer (from) to the
investment fund to (from) the Participant Loans fund. Such loan principal
and related interest are payable by the Participants to their Plan accounts
over a period not to exceed 36 months from the date of withdrawal. The
loans are secured by the balance in the participant's account and bear
interest at the prime rate as determined by the Plan plus 2 percent.
Interest on the loans ranged from approximately 8 percent to 11 percent.
Principal and interest is paid ratably through payroll deductions.
2. Summary of Accounting Policies
------------------------------
a. Basis of Accounting
-------------------
The financial statements have been prepared on the accrual basis of
accounting.
b. Valuation and Income Recognition
--------------------------------
The Plan's investments are stated at fair value. Shares of mutual funds are
valued at quoted market prices, which represent the net asset value of
shares held by the Plan at year-end. The Company stock is valued at its
quoted market price. Participant loans receivable are valued at cost which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
The value of the CB stock was $12.38 and $18.12 on December 31, 1999 and
1998, respectively, representing the latest quoted price at that date on
the stock exchange on which it trades.
Net appreciation (depreciation) in the fair value of investments is based
on the difference between the fair value of the assets at the beginning of
the year, or at the time of purchase for assets purchased during the year,
and the related fair value on the day investments are sold with respect to
realized appreciation (depreciation), or on the last day of the year for
unrealized appreciation (depreciation).
c. Use of Estimates
----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
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3. Investments
-----------
The following presents investments that represent five percent or more of the
Plan's net assets. Participants can direct their contributions and employer
contributions among various investment options. Participants should refer to
the Summary Plan Document for a complete and accurate description of the various
investment options.
<TABLE>
<CAPTION>
December 31,
Mutual Funds: 1999 1998
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<S> <C> <C>
Baron Asset Fund $14,686,748 $12,538,229
T. Rowe Science Technology Fund 37,660,051 12,022,673
Vanguard 500 Index Fund 39,362,369 28,060,957
Vanguard Morgan Growth Fund 22,565,072 17,959,469
Vanguard PRIMECAP Fund 16,595,444 7,098,716
Vanguard Wellington 25,033,685 28,922,841
Vanguard Windsor II Fund 39,166,607 53,074,438
Vanguard Retirement Savings Trust (Common Collective Trust) 18,216,204 18,426,079
CB Richard Ellis Services, Inc. Stock Fund 25,857,812 42,007,638
</TABLE>
During the Plan year ended December 31, 1999, the Plan's investments (including
gains and losses on investments bought and sold, as well as held during the
year) appreciated in value by $11,354,096 as follows:
Mutual Funds $ 22,406,568
Vanguard Retirement Savings Trust $ -
CB Richard Ellis, Inc. Stock Fund $(11,052,472)
4. Related Party Transactions
--------------------------
The Trustee and the Company are parties-in-interest as defined by ERISA. The
Trustee invests certain Plan assets in shares of mutual funds, stock fund and
common/collective trusts which they manage. Such transactions qualify as party-
in-interest transactions permitted by Department of Labor regulations.
5. Administrative Expenses
-----------------------
Expenses directly related to the administration of the Plan are paid out of Plan
assets, which are reflected in administrative expenses in the accompanying
statement of changes in net assets available for benefits. However, the Company
may elect to pay for some of these expenses. During 1999, the Company elected
to pay for a portion of the Plan expenses, which were not material to the change
in net assets for 1999.
6. Federal Income Tax Status
-------------------------
The Internal Revenue Service has determined and informed the Company by a letter
dated February 19, 1998, that the Plan is designed in accordance with applicable
sections of the Internal Revenue Code. The Committee, using its judgement and
the advice of its advisors, including the Plan's tax counsel, believes that the
Plan, in all material respects, is designed and operated in a manner that
qualifies it for continued tax-exempt status. Accordingly, no taxes have been
provided for in the accompanying financial statements.
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7. Plan Termination
----------------
Although it has not expressed any intent to do so, the Company has the right
under the Plan to amend the Plan or to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of ERISA. Upon complete
discontinuance of the employer's contributions or Plan termination, participants
will become fully vested in their account balances.
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CB RICHARD ELLIS 401(K) PLAN
EIN 52-1616016 Plan No. 001
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Current
Identity of Issuer Description of Investments Value
---------------------------- -------------------------------------------- -----------------
<S> <C> <C>
* The Vanguard Group Baron Asset Fund 14,686,748
* The Vanguard Group Janus Worldwide Fund 10,420,165
* T. Rowe Price T. Rowe Science and
Technology Fund 37,660,051
* The Vanguard Group Vanguard 500 Index Fund 39,362,369
* The Vanguard Group Vanguard International
Growth Fund 12,468,522
* The Vanguard Group Vanguard LifeStrategy
Conservative Growth Fund 1,239,880
* The Vanguard Group Vanguard LifeStrategy
Growth Fund 2,216,502
* The Vanguard Group Vanguard LifeStrategy
Income Fund 4,917,487
* The Vanguard Group Vanguard LifeStrategy
Moderate Growth Fund 1,480,858
* The Vanguard Group Vanguard Morgan
Growth Fund 22,565,072
* The Vanguard Group Vanguard Prime
Money Market Fund 13,094,116
* The Vanguard Group Vanguard PRIMECAP Fund 16,595,444
* The Vanguard Group Vanguard Wellington Fund 25,033,685
* The Vanguard Group Vanguard Windsor II Fund 39,166,607
* The Vanguard Group Vanguard Retirement
Savings Trust 18,216,204
* CB Richard Ellis Services, CB Richard Ellis Services, Inc. Stock
Inc. Fund 25,857,812
* Participant Loans Loans receivable with interest rates
ranging from approximately 8 percent
to 11 percent 2,402,207
-----------------
Total Assets Held For Investment Purposes $ 287,383,729
=================
</TABLE>
* Represents a party-in-interest
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SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
CB RICHARD ELLIS 401(k) PLAN
By: /s/ Ronald J. Platisha
--------------------------------------------------------
Ronald J. Platisha
Executive Vice President, Financial Operations
CB Richard Ellis Services, Inc.
By: /s/ Raymond E. Wirta
--------------------------------------------------------
Raymond E. Writa
Chief Executive Officer
CB Richard Ellis Services, Inc.
Dated: June 23, 2000
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CB RICHARD ELLIS 401(k) PLAN
Exhibit Index
Exhibit
No. Exhibit Page Number
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23 Consent of Independent Public Accountants 14
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