Exhibit 99-1
HOME PROPERTIES
RETIREMENT SAVINGS PLAN
FINANCIAL REPORT
DECEMBER 31, 1999
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
TABLE OF CONTENTS
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4 - 8
Independent Auditors' Report on the Supplementary Information 9
Schedule of Assets Held for Investment Purposes at End of Year 10
Schedule of Reportable Transactions 11
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INDEPENDENT AUDITORS' REPORT
To The Board of Trustees of
Home Properties Retirement Savings Plan
Rochester, New York
We have audited the accompanying statements of net assets available for
benefits of Home Properties Retirement Savings 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
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 generally accepted auditing
standards. 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
as of December 31, 1999 and 1998, and the change in net assets available for
benefits for the year ended December 31, 1999, in conformity with generally
accepted accounting principles.
Respectfully Submitted,
/s/Insero, Kasperski, Ciaccia & Co., P.C.
Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
June 7, 2000
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
ASSETS 1999 1998
INVESTMENTS AT FAIR VALUE
Money Market Funds $ 27,696 $ 146,495
Common Trust Fund 487 337,355
U.S. Government and Agency Obligations - 644,351
Corporate Obligations - 14,156
Common Stock 411,700 1,252,961
Mutual Funds 4,008,676 286,442
Participant Notes 168,018 130,247
TOTAL INVESTMENTS AT FAIR VALUE 4,616,577 2,812,007
RECEIVABLES
Employer Contributions 492,338 317,086
Participant Contributions 95,968 66,868
Participant Loans 6,634 4,734
Accrued Income 148 11,039
Other 13 11,013
TOTAL RECEIVABLES 595,101 410,740
TOTAL ASSETS 5,211,678 3,222,747
LIABILITIES - -
NET ASSETS AVAILABLE FOR BENEFITS $5,211,678 $3,222,747
See Notes to Financial Statements.
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
ADDITIONS:
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Interest and Dividends $ 133,505
Net Appreciation in Fair Value of
Investments 483,417
----------
616,922
----------
CONTRIBUTIONS
Employer 492,339
Employee 1,140,375
Rollover 216,928
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1,849,642
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TOTAL ADDITIONS 2,466,564
DEDUCTIONS:
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits Paid to Participants 429,172
Excess Contributions Refunded to Participants 14,659
Administrative Expenses 33,802
----------
Total Deductions 477,633
----------
NET INCREASE 1,988,931
NET ASSETS AVAILABLE FOR BENEFITS - BEGINNING 3,222,747
----------
NET ASSETS AVAILABLE FOR BENEFITS - ENDING $5,211,678
SEE NOTES TO FINANCIAL STATEMENTS.
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 Description of Plan
The following description of the Home Properties Retirement Savings
Plan provides only general information. Participants should refer to
the Plan agreement for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering all employees of Home
Properties of New York, Inc. who are 21 years of age or older and who
have completed one year of service (including years of service with a
company acquired by Home Properties of New York, Inc.) It is subject
to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
CONTRIBUTIONS
Each year, participants may contribute up to 15 percent of pretax
annual compensation and separate elective deferrals out of any bonus,
up to 100% of each bonus, subject to statutory limitations, as defined
in the Plan. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined
contribution plans. Participants direct the investment of their
contributions into various investment options offered by the Plan.
The Plan currently offers seven investment option for participants.
The Company contributes 75% of salary-reduction contributions up to a
maximum of 3% of participant compensation. Additional profit sharing
amounts may be contributed at the option of the Company's board of
directors. Contributions are subject to certain limitations.
Contributions received from participants for 1999 and contributions
receivable at December 31, 1999, are net of payments of $8,568 made in
March, 2000 to certain active participants to return to them excess
deferral contributions as required to satisfy the relevant
nondiscrimination provisions of the Plan.
PARTICIPANT ACCOUNTS
Each participant's account is credited with an allocation of: (1) his
or her tax deferred contribution, (2) the company's contributions, (3)
Plan earnings, and (4) forfeitures of terminated participants' non-
vested accounts. Allocations are based on participant earnings or
account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
account.
VESTING
Each participant's interest in his/her employee contribution account
is fully vested at all times. The Plan provides for vesting in the
employer contribution account of 20% after two years, 40% after three
years, 60% after four years, 80% after five years, and 100% after six
years of service.
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 Description of Plan - Continued
PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their accounts a minimum of $1,000 to a
maximum equal to the lessor of $50,000 or 50% of their vested account
balance. Loan terms range from one to five years, or longer for the
purchase of a primary residence. The loans are collateralized by the
balance in the participant's account and bear interest at the prime
rate plus one percent (1%) in effect on the first day of the month in
which the loan is made. Interest rates range from 8.75% to 9.75% for
the current outstanding notes. Principal and interest is paid ratably
through weekly or semi-monthly payroll deductions.
PAYMENT OF BENEFITS
The Plan provides for normal retirement benefits upon reaching age 65
and has provisions for early retirement, disability, death and
termination benefits for those participants who are eligible to
receive such benefits.
On termination of service, a participant may elect to receive:
(1) A lump sum amount equal to the value of his or her account, or
(2) Annual installments over a period of time not to exceed 15 years.
NOTE 2 Significant Accounting Policies
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year-end.
Quoted market prices are used to value investments. Participant notes
receivable are valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a settlement-date
basis. Interest income is recorded on the accrual basis. Dividends
are recorded on the date received.
MANAGEMENT ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 3 Investments
The following presents investments that represents 5 percent or more
of the Plan's net assets:
DECEMBER 31,
1999 1998
State St. Bank Principal Preservation
Fund, 337,355 Shares $ - $ 337,355
Home Properties of New York, Inc.
15,005 and 9,182 Shares, Respectively $ 411,700 $ 236,437
Stable Income Collective
Investment Trust, 44,762 Shares $ 554,149 $ -
All-Equity Collective
Investment Trust, 84,007 Shares $1,051,768 $ -
Reduced Volatility
Collective Investment Trust,
34,293 Shares $ 465,695 $ -
Long-Term Growth Collective
Investment Trust, 85,405 Shares $1,304,982 $ -
Vanguard Index S&P
500 Portfolio, 3,835 Shares $ 519,049 $ -
During 1999, the Plan's investments (including investments bought,
sold and held during the year) appreciated (depreciated) in value as
follows:
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE
U.S. Government and Agency Obligations $ (10,040)
Corporate Obligations (7,625)
Common Stock 216,360
Mutual Funds 284,722
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE $ 483,417
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 4 Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to Schedule H of Form 5500:
1999 1998
Net assets available for benefits
per the financial statements $5,211,678 $3,222,747
Amounts allocated to withdrawing
participants - (14,120)
Amounts allocated to refundable
excess contributions 8,568 -
Net assets available for benefits
per the Form 5500 $5,220,246 $3,208,627
The following is a reconciliation of benefits paid to participants per
the financial statements to Schedule H of Form 5500:
Benefits paid to participants per
the financial statements $ 429,172
Add: Amounts allocated to withdrawing participants
at December 31, 1999 -
Less: Amounts allocated to withdrawing participants
at December 31, 1998 (14,120)
Benefits paid to participants per the Form 5500 $ 415,052
Note 5 Related-Party Transactions
Certain Plan investments are shares of common stock of Home Properties
of New York, Inc., the Plan Sponsor. Therefore, this investment
qualifies as a party-in-interest. The common stock is valued at its
quoted market price.
NOTE 6 Plan Termination
Although the Company has not expressed an intent to do so, the Company
has the right under the Plan to discontinue 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.
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 7 TAX STATUS
In October, 1993, the Company adopted a prototype plan which received
a favorable determination letter from the Internal Revenue Service in
April, 1993 stating that the Plan qualifies under the applicable
provisions of the Internal Revenue Code, including Section 401(k).
The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe
that the plan is currently designed and being operated in compliance
with the applicable requirements of the Code. Therefore, they believe
that the Plan was qualified and the related trust was tax-exempt as of
the financial statement date.
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INDEPENDENT AUDITORS' REPORT
ON THE SUPPLEMENTARY INFORMATION
To the Board of Trustees of
Home Properties Retirement Savings Plan
Rochester, New York
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary schedules of
assets held for investment purposes at end of year and, reportable
transactions, as of or for the year ended December 31, 1999, are presented
for the purpose of additional analysis and are not a required part of the
basic 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
schedules have been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
Respectfully Submitted,
/s/Insero, Kasperski, Ciaccia & Co., P.C.
Insero, Kasperski, Ciaccia & Co., P.C.
Certified Public Accountants
Rochester, New York
June 7, 2000
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
EIN#: 16-1455130-PLAN #001
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR
DECEMBER 31, 1999
A B C D E
Description of
Investment Including
Maturity Date, Rate
Identify of Issue, of Interest,
Borrower, Lessor of Collateral, Par of Current
Similar Party Maturity Value Cost Value
MONEY MARKET FUNDS
SSGA Funds -
U.S. Treasury MMF 27,696 Shares $ 27,696 $ 27,696
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COMMON TRUST FUNDS
State St. Bank Principal
Preservation Fund 487 Shares 487 487
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CORPORATE STOCKS
Home Properties of
New York, Inc. 15,005 Shares 386,588 411,700
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MUTUAL FUNDS
Stable Income Collective
Investment Trust 44,762 Shares 539,354 554,149
All-Equity Collective
Investment Trust 84,007 Shares 933,318 1,051,768
Reduce Volatility Collective
Investment Trust 34,293 Shares 458,344 465,695
Long-Term Growth Collective
Investment Trust 85,405 Shares 1,271,231 1,304,982
Vanguard Small Cap
Index Fund 4,789 Shares 106,734 113,033
Vanguard Index S&P
500 Portfolio 3,835 Shares 480,267 519,049
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3,789,248 4,008,676
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PARTICIPANT LOANS
Participant Notes Interest ranging from
8.75% to 9.75%,
Due From January,
2000 through November
2005. Collateralized by
remaining balance of
participant's account. 168,018 168,018
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TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $4,372,037 $4,616,577
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HOME PROPERTIES
RETIREMENT SAVINGS PLAN
ROCHESTER, NEW YORK
EIN#: 16-1455130-PLAN #001
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
A,B C D G I
PURCHASE SELLING GAIN (LOSS)
DESCRIPTION UNITS PRICE PRICE COST ON SALE
Stable Income Collective
Trust 36,690 $ 439,914 $ - $ - $ -
SSB Principal Preservation
Fd 439,914 $ 439,914 $439,914 $439,914 $ -
All-Equity Collective
Trust 79,426 $ 880,049 $ - $ - $ -
Reduced Volatility
Collective Trust 34,531 $ 461,335 $ - $ - $ -
Long-Term Growth Collective
Trust 99,780 $1,484,739 $ - $ - $ -
U.S. Treasury Notes, 4.25%,
Due 11/15/2003 205,000 $ - $192,636 $202,804 $(10,168)
Long-Term Growth
Collective Trust 15,307 $ - $230,680 $227,771 $ 2,909
Vanguard Index S&P
500 Portfolio 1,968 $ 240,654 $ - $ - $ -
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HOME PROPERTIES RETIREMENT SAVINGS PLAN
EIN #16-1455130 PLAN #001
SCHEDULE H, LINE 4J - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(f)
(b) Expense (h)
Description of Asset Incurred Current Value
(a) (Including Interest (c) (d) (e) With (g) of Asset on (i)
Identity of Rate and Maturity in Purchase Selling Lease Trans- Cost of Transaction Net Gain
PARTY INVOLVED Case OF LOAN PRICE PRICE RENTAL ACTION ASSET DATE OR (LOSS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(I) INDIVIDUAL 5% TRANSACTIONS
US Treasury Notes, due 30,000 face value $202,804 $192,636 $202,804 $192,636 ($10,168)
11/15/2003, interest at 4.250%
(II) Series of Transactions, Not Involving
SECURITIES, WITH THE SAME PERSON
None
(III) Series of Transactions Involving
SECURITIES OF THE SAME ISSUE
Home Properties of NY, Inc. Common Stock $297,666 $297,666
(IV) Series of Transactions With a
SINGLE PERSON
None
Schedule is prepared using the alternative way of reporting (iii) series transactions under DOL
Regulation 2520.103-6(d)(2).
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