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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
For Annual Report of Employee Stock Purchase, Savings and Similar Plans
Pursuant to Section 15(d) of the Securities Exchange Act of 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2001
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 1-13762
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
RECKSON 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747
(631) 694-6900
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FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Reckson 401(k) Plan
Year Ended December 31, 2001
with Report of Independent Auditors
Reckson 401(k) Plan
Financial Statements
and Supplemental Schedule
Year ended December 31, 2001
CONTENTS
Report of Independent Auditors............................................ 1
Financial Statements
Statement of Net Assets Available for Benefits as of December 31, 2001.... 2
Statement of Changes in Net Assets Available for Benefits for the
Year Ended December 31, 2000........................................... 3
Notes to Financial Statements............................................. 4
Supplemental Schedule
Schedule H, Line 4(i)--Assets (Held at End of Year)........................ 10
Report of Independent Auditors
Plan Administrator
Reckson 401(k) Plan
Retirement and Benefits Committee
We have audited the accompanying statements of net assets available for benefits
of Reckson 401(k) Plan as of December 31, 2001 and the related statement of
changes in net assets available for benefits for the year then ended. 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 audit.
We conducted our audit 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 audit provides 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, 2001 and the changes in its net assets available for benefits for
the year then ended, in conformity with accounting principles generally accepted
in the United States.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2001 is presented for the purpose of
additional analysis and is not a required part of the 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. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audit 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
New York, New York
June 12, 2002
Reckson 401(k) Plan
Statement of Net Assets Available for Benefits
December 31, 2001
ASSETS
Investments (Note 3) $2,733,020
Receivables:
Participant contributions 26,724
Participant loans 84,475
Cash 559,479
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Net assets available for benefits $3,403,698
==========
See accompanying notes.
2
Reckson 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
Additions:
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 38,220
Participant contributions 1,259,279
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Total additions 1,297,499
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Deductions:
Net realized and unrealized depreciation in
fair value of investments (Note 3)
(704,825)
Benefits paid to participants (62,456)
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Total deductions (767,281)
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Net increase in net assets available for benefits 530,218
Net assets available for benefits:
Beginning of the year --
Transfer from prior Plan (Note 1) 2,873,480
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End of year $3,403,698
==========
See accompanying notes.
3
Reckson 401(k) Plan
Notes To Financial Statements
December 31, 2001
1. DESCRIPTION OF THE PLAN
The following description of the Reckson 401(k) Plan (the "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 was created on January 1, 2001 for the purpose of providing eligible
employees of Reckson Management Group, Inc. (the "Employer") and its related
companies (collectively, the "Affiliates") that participate in the Plan
(collectively, the "Participating Employers") with an opportunity to increase
their savings on a tax-favored basis. Shares of the Class A common stock of
Reckson Associates Realty Corp. ("Reckson") are among the investment options
offered to participants pursuant to the Plan.
The Plan is a defined contribution plan sponsored by the Employer covering all
eligible full-time employees of the following Participating Employers who have
completed six months of service and are age twenty-one or older. The following
Participating Employers participated in the Plan during the year ended
December 31, 2001:
Reckson Management Group, Inc.
Reckson Construction Group, Inc.
RANY Management Group, Inc.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
Prior to January 1, 2001, eligible employees of the Participating Employers were
provided the opportunity to participate in the Reckson Management Group, Inc.
401(k) Plan (the "Prior Plan"). The Prior Plan provided eligible employees with
benefits similar to those of the Plan and was terminated during 2001 subject to
the provisions of ERISA. On January 1, 2001, all eligible employee accounts of
the Participating Employers were transferred to the Plan.
4
Reckson 401(k) Plan
Notes To Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS
Each year, participants may contribute up to 15 percent of pretax annual
compensation, as defined in the Plan (subject to the limitations of section
401(k) of the Internal Revenue Code). Participants may also rollover amounts
representing distributions from other qualified benefit or defined contribution
plans. Participants direct the investment of their contributions into various
investment options offered by the Plan. As of December 31, 2001, the Plan
offered 13 mutual funds and the Class A common stock of Reckson as investment
options for participants. Additional discretionary matching contributions
may be contributed at the option of the Participating Employers. Contributions
are subject to certain limitations.
During the year ended December 31, 2001 the Participating Employers did not make
any contributions to the Plan.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of Plan earnings, and charged with an allocation of the Plan's
administrative expenses, if not paid by the Employer. 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 vested account.
VESTING
Participants are immediately 100% vested in their contributions and earnings
thereon. Additionally, a participant vests ratably in employer matching
contributions, if any, based on five years of credited service.
PARTICIPANT LOANS
Participants may borrow from their accounts up to 50 percent of their vested
account balance. The loans are secured by the balance in the participant's
account and bear interest at the U.S. prime lending rate plus one-half
percentage point.
5
Reckson 401(k) Plan
Notes To Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PLAN TERMINATION
Although it has not expressed any intent to do so, the Employer has the right
under the Plan to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, participants will become 100 percent vested in their
accounts.
PAYMENT OF BENEFITS
On termination of service, a participant may elect to receive either a lump-sum
amount equal to the value of the participant's vested interest in his or her
account.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan are prepared under the accrual basis of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Quoted market prices are used
to value investments. Shares of mutual funds are valued at the net asset value
of shares held by the Plan at year-end. The participant loans are valued at
their outstanding balances, which approximate fair value.
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 accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that effect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
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Reckson 401(k) Plan
Notes To Financial Statements (continued)
3. INVESTMENTS
The following investments represent 5% or more of the Plan's net assets
available for benefits at December 31, 2001:
Growth Fund of America $ 922,359
Reckson Associates Realty Corp.--Class A Common Stock 402,893
INVESCO Balanced Fund 282,520
MFS International New Discovery Fund 330,902
BlackRock Index Equity Fund--Class A 236,302
INVESCO Technology Fund 175,754
During the year ended December 31, 2001, the investments of the Plan appreciated
(depreciated) in fair value as follows:
BlackRock Money Market Fund $ 14,073
Federated US Government Bond Fund (1,932)
INVESCO Balanced Fund (34,052)
Scudder Global Discovery Fund (87,904)
BlackRock Index Equity Fund (36,855)
Growth Fund of America (116,700)
American Century International Growth Fund (22,962)
Janus Mercury Fund (7,030)
Reckson Associates Realty Corp.--Class A Common Stock (20,987)
FrontLine Capital Group Common Stock (281,514)
MFS International New Discovery Fund 12,894
BlackRock Index Equity Fund--Class A 1,672
INVESCO Growth Fund (44,015)
Janus Advisor Capital Fund 515
INVESCO Technology Fund (80,948)
MFS Value Fund 925
American Balanced Fund (14)
Fidelity Advisor Mid-cap Fund 9
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$(704,825)
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Reckson 401(k) Plan
Notes To Financial Statements (continued)
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The Form 5500 of the Plan was prepared on a cash basis. The following is a
reconciliation of net assets available for benefits per the financial statements
to the Form 5500:
DECEMBER 31,
2001
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Net assets available for benefits per the financial statements $3,403,698
Participant contributions receivable (26,724)
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Net assets available for benefit per Form 5500 $3,376,974
============
5. RELATED PARTY TRANSACTIONS
During the year ended December 31, 2001, the Plan received $19,330 in common
stock dividends from Reckson.
6. INCOME TAX STATUS
The Plan has not received a determination letter from the Internal Revenue
Service stating that the Plan is qualified under Section 401(a) of the Internal
Revenue Code. However, the Plan Administrator believes that the Plan is
qualified and, therefore, the related trust is exempt from taxation.
8
Supplemental Schedule
Reckson 401(k) Plan
Schedule H, Line 4(i) - Assets (Held at End of Year)
December 31, 2001
FAIR
MARKET
INVESTMENT VALUE
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Federated U.S. Government Bond Fund $ 119,086
Growth Fund of America 922,359
American Century International Growth Fund 83,906
Reckson Associates Realty Corp.--Class A Common Stock* 402,893
FrontLine Capital Group Common Stock 2,206
INVESCO Balanced Fund 282,520
MFS International New Discovery Fund 330,902
BlackRock Index Equity Fund--Class A 236,302
INVESCO Growth Fund 99,617
Janus Advisor Capital Fund 37,031
INVESCO Technology Fund 175,754
American Balanced Fund 946
Fidelity Advisor Mid-cap Fund 337
MFS Value Fund 39,161
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$2,733,020
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Loans to participants at per annum interest rates
between 6.0% and 10%. $ 84,475
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(*) Indicates party-in-interest to the Plan as defined under ERISA.
10
RECKSON 401(K) PLAN
Exhibits
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23.0 Consent of Independent Auditors
99.1 Certification of Donald Rechler, Co-Chief Executive Officer of Reckson
Associates Realty Corp., pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code
99.2 Certification of Scott H. Rechler, Co-Chief Executive Officer of Reckson
Associates Realty Corp., pursuant to Section 1350 of Chapter 63 of Title
18 of the United States Code
99.3 Certification of Michael Maturo, Executive Vice President, Treasurer and
Chief Financial Officer of Reckson Associates Realty Corp., pursuant to
Section 1350 of Chapter 63 of Title 18 of the United States Code
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
Reckson 401(k) Plan
By: Reckson Management Group, Inc.,
as Plan Administrator
Date: December 18, 2002 By: /s/ Michael Maturo
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Michael Maturo
Executive Vice President,
Treasurer and
Chief Financial Officer of
Reckson Associates Realty Corp.
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