Markets
BUSINESS NEWS
- Market News
- Earnings
- Recalls
- Recession Watch
- Tech News
- Financial Crisis
- Madoff Scandal
- BloggingStocks
- Luxist
- Money Videos
INVESTING
- Stock Quotes
- Stock Charts
- Stock Ticker
- Currencies
- Portfolio
- Stock Screener
- Broker Center
- Mutual Fund Center
- ETF Center
- Money
- 24/7 Wall St.
- Financial Glossary
PERSONAL FINANCE AT WALLETPOP
- Bargains
- Banking
- Budget
- Calculators
- College Finance
- Community
- Credit
- Deals
- Debt
- Economizer
- Food
- Home
- Fraud
- Insurance
- Interest Rates
- Loans
- Mortgages
- Real Estate
- Recalls
- Recession
- Retirement
- Saving
- Simplification
- Specials
- Taxes
SMALL BUSINESS
iStar Financial Announces Third Quarter 2009 Results
NEW YORK, Oct. 30 /PRNewswire-FirstCall/ -- iStar Financial Inc. (NYSE: SFI), a leading publicly traded finance company focused on the commercial real estate industry, today reported results for the third quarter ended September 30, 2009.
iStar reported adjusted earnings (loss) allocable to common shareholders for the third quarter of ($234.2) million or ($2.37) per diluted common share, compared with ($287.2) million or ($2.16) per diluted common share for the third quarter 2008. Adjusted earnings (loss) represents net income (loss) computed in accordance with GAAP, adjusted primarily for preferred dividends, depreciation, depletion, amortization, impairments of goodwill and intangible assets, gain (loss) from discontinued operations, and gain on sale of joint venture interest.
Net income (loss) allocable to common shareholders for the third quarter was ($251.3) million, or ($2.55) per diluted common share, compared to ($308.7) million or ($2.32) per diluted common share for the third quarter 2008. Please see the financial tables that follow the text of this press release for a detailed reconciliation of adjusted earnings (loss) to GAAP net income (loss).
Revenues for the third quarter 2009 were $210.2 million versus $337.3 million for the third quarter 2008. The year-over-year decrease is primarily due to a reduction of interest income resulting from an increase in non-performing loans (NPLs), an overall smaller asset base and lower interest rates.
Net investment income for the quarter was $180.2 million compared to $209.7 million for the third quarter 2008. The year-over-year decrease is primarily due to lower interest income as discussed above, offset by lower interest expense and increased gains on early extinguishment of debt. Net investment income represents interest income, operating lease income, earnings (loss) from equity method investments and gain on early extinguishment of debt, less interest expense and operating costs for corporate tenant lease assets.
During the quarter, the Company received $403.6 million in gross principal repayments. Additionally, the Company generated proceeds of $182.4 million from loan sales; $22.0 million of net proceeds from the sale of three corporate tenant lease (CTL) assets; and $25.9 million of net proceeds from other real estate owned (OREO) asset sales. Of the gross principal repayments and asset sales, $192.0 million was utilized to pay down the A-participation interest associated with the Fremont portfolio. Additionally during the quarter, the Company funded a total of $283.1 million under pre-existing commitments.
The Company's leverage, calculated as book debt net of unrestricted cash and cash equivalents, divided by the sum of book equity, accumulated depreciation and loan loss reserves, each as determined in accordance with GAAP, was 2.9x at September 30, 2009, versus 2.8x at June 30, 2009. The Company's net finance margin, calculated as the rate of return on assets less the cost of debt, was 1.51% for the quarter, versus 1.48% in the prior quarter.
Capital Markets
As of September 30, 2009, the Company had $187.1 million of unrestricted cash and available capacity on its credit facilities versus $417.4 million at the end of the prior quarter. At September 30, 2009, the Company was in compliance with all of its bank and bond covenants.
During the quarter, the Company repaid its LIBOR + 0.34% senior unsecured notes due September 2009.
During the quarter, the Company repurchased $255.5 million par value of its senior unsecured notes, resulting in a net gain on early extinguishment of debt of $91.7 million. The Company also repurchased 2.2 million shares of its common stock during the quarter. The Company currently has remaining authority to repurchase up to $29.5 million of shares under its share repurchase programs.
Risk Management
At September 30, 2009, first mortgages, participations in first mortgages, senior loans and corporate tenant lease investments collectively comprised 87.0% of the Company's asset base, versus 91.0% in the prior quarter. The Company's loan portfolio consisted of 78.3% floating rate loans and 21.7% fixed rate loans, with a weighted average maturity of 2.0 years.
At the end of the quarter, the weighted average last dollar loan-to-value ratio for all structured finance assets was 83.6%. The Company's corporate tenant lease assets were 94.1% leased with a weighted average remaining lease term of 11.2 years. At September 30, 2009, the weighted average risk ratings of the Company's structured finance and corporate tenant lease assets were 3.91 and 2.60, versus 3.90 and 2.59, respectively, in the prior quarter.
As of September 30, 2009, the Company had 26 loans on its watch list representing $1.2 billion or 11.3% of total managed loans, compared to 28 loans representing $1.2 billion or 10.4% of total managed loans in the prior quarter. Assets on the Company's watch list were all performing loans at September 30, 2009. Managed asset and loan values represent iStar's book value plus the A-participation interest associated with the Fremont portfolio. The Company's total managed loan value at quarter end was $10.5 billion.
At the end of the third quarter, 85 of the Company's 260 total loans were on NPL status. These loans represent $4.4 billion or 42.0% of total managed loans, compared to 90 loans representing $4.6 billion or 39.6% of total managed loans in the prior quarter.
Additionally, during the quarter the Company took title to 15 properties that had an aggregate gross loan value of $826.5 million prior to foreclosure, resulting in $266.3 million of charge-offs against the Company's reserve for loan losses and recorded $8.0 million of additional impairments on its OREO and REHI portfolios.
At the end of the quarter, the Company held 29 assets, representing a book value of $920.1 million, which had previously served as collateral on its loans. Of these assets, $584.5 million were classified as OREO and considered held for sale based on management's current intention to market and sell the assets in the near term. The remaining $335.6 million were classified as Real Estate Held for Investment (REHI) based on management's current strategy to hold, operate or develop these assets over a longer period.
During the quarter, the Company also charged-off $58.8 million against its reserve for loan losses associated with restructurings, loan sales and repayments during the quarter. Additionally, the Company recorded $8.9 million of non-cash impairment charges associated with the sales and pending sales of CTL assets, as well as $9.3 million of non-cash impairment charges associated with other assets.
During the third quarter, the Company recorded $345.9 million in loan loss provisions. Provisions in the quarter reflect the continued deterioration in the overall credit markets and its impact on the portfolio as determined in the Company's regular quarterly risk ratings review process. At September 30, 2009, the Company had loan loss reserves of $1.5 billion or 14.2% of total managed loans. This compares to loan loss reserves of $1.5 billion or 12.6% of total managed loans at June 30, 2009.
Summary of Fremont Contributions to Quarterly Results
At the end of the third quarter, the Fremont portfolio, including additional fundings made during the quarter, had a managed loan value of $3.1 billion consisting of 103 loans, versus $3.6 billion consisting of 122 loans at the end of the prior quarter. In addition, there were 10 OREO assets with a managed asset value of $182.4 million and six REHI assets with a managed asset value of $170.7 million associated with the Fremont portfolio at the end of the quarter.
At the end of the third quarter, the value of the A-participation interest in the portfolio was $672.9 million versus $865.6 million at the end of the prior quarter. The book value of iStar's B-participation interest was $2.4 billion versus $2.7 billion at the end of the prior quarter. During the quarter, iStar received $274.1 million in principal repayments and proceeds from asset sales in respect of Fremont assets, of which the Company retained $82.1 million. The balance of principal repayments was paid to the A-participation interest. The weighted average maturity of the Fremont portfolio is six months.
During the third quarter, iStar funded $70.2 million of commitments related to the portfolio. Unfunded commitments at the end of the third quarter were $0.3 billion, of which the Company expects to fund approximately $0.1 billion based upon its comprehensive review of the portfolio.
At September 30, 2009, there were 45 Fremont loans on NPL status with a managed loan value of $1.8 billion versus 51 loans at the prior quarter end, with $2.0 billion of managed loan value. In addition, there were nine Fremont loans on the Company's watch list with a managed loan value of $213.5 million versus 12 loans at the prior quarter end, with $347.2 million of managed loan value.
[Financial Tables to Follow]
* * *
iStar Financial Inc. is a leading publicly traded finance company focused on the commercial real estate industry. The Company primarily provides custom-tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust ("REIT"), provides innovative and value added financing solutions to its customers.
iStar Financial will hold a quarterly earnings conference call at 10:00 a.m. ET today, October 30, 2009. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through iStar Financial's website, www.istarfinancial.com, under the "Investor Relations" section. To listen to the live call, please go to the website's "Investor Relations" section at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. For those who are not available to listen to the live broadcast, a replay will be available shortly after the call on the iStar Financial website.
(Note: Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although iStar Financial Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from iStar Financial Inc.'s expectations include the amount and timing of additional loan loss provisions, the amount and timing of asset sales (including OREO assets), continued increases in NPLs, repayment levels, the Company's ability to reduce its indebtedness at a discount, the Company's ability to generate liquidity, the Company's ability to maintain compliance with its debt covenants, economic conditions, the availability of liquidity for commercial real estate transactions and other risks detailed from time to time in iStar Financial Inc.'s SEC reports.)
Selected Income Statement Data
(In thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- --------- ---------
Net investment income (1) $180,198 $209,745 $719,103 $534,988
Other income 9,454 22,922 20,408 88,707
Non-interest expense (2) (429,797) (559,699) (1,359,176) (1,163,637)
Gain on sale of joint
venture interest - - - 280,219
-------- -------- --------- ---------
Income (loss) from
continuing operations (240,145) (327,032) (619,665) (259,723)
Income (loss) from
discontinued operations (8,106) 3,194 (9,248) 19,358
Gain from discontinued
operations 809 19,955 12,426 72,487
Net (income) loss
attributable to
noncontrolling interests (515) 502 998 1,069
Gain on sale of joint
venture interest
attributable to
noncontrolling interests - - - (18,560)
Gain from discontinued
operations attributable to
noncontrolling interests - - - (3,689)
Preferred dividends (10,580) (10,580) (31,740) (31,740)
-------- -------- --------- ---------
Net income (loss) allocable
to common shareholders,
HPU holders and Participating
Security holders (3) ($258,537) ($313,961) ($647,229) ($220,798)
========= ========= ========= =========
(1) Includes interest income, operating lease income, earnings (loss)
from equity method investments and gain (loss) on early
extinguishment of debt, less interest expense and operating costs for
corporate tenant lease assets.
(2) Includes depreciation and amortization, general and administrative
expenses, provision for loan losses, impairments and other expenses.
(3) HPU holders are Company employees who purchased high performance
common stock units under the Company's High Performance Unit Program.
Participating Security holders are Company employees and directors
who hold unvested restricted stock units and common stock
equivalents under the Company's Long Term Incentive Plan.
Selected Balance Sheet Data
(In thousands)
(unaudited) As of As of
September 30, 2009 December 31, 2008
------------------ -----------------
Loans and other lending
investments, net $8,588,020 $10,586,644
Corporate tenant lease assets, net $2,925,413 $3,044,811
Other investments $391,053 $447,318
Total assets $13,404,594 $15,296,748
Debt obligations, net $11,311,405 $12,486,404
Total liabilities $11,586,207 $12,840,896
Total equity $1,810,942 $2,446,662
iStar Financial Inc.
Consolidated Statements of Operations
(In thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
REVENUES
Interest income $124,701 $237,006 $444,109 $748,460
Operating lease income 76,037 77,378 229,246 229,952
Other income 9,454 22,922 20,408 88,707
-------- -------- -------- ---------
Total revenues 210,192 337,306 693,763 1,067,119
-------- -------- -------- ---------
COSTS AND EXPENSES
Interest expense 113,938 169,665 372,288 503,915
Operating costs -
corporate tenant lease
assets 5,673 5,200 17,655 14,802
Depreciation and
amortization 25,298 23,760 73,004 70,876
General and
administrative (1) 27,808 37,694 105,617 124,474
Provision for loan losses 345,892 411,142 1,039,004 777,302
Impairment of other assets 17,351 88,075 60,729 145,766
Impairment of goodwill - - 4,186 39,092
Other expense 13,448 (972) 76,636 6,127
-------- -------- --------- ---------
Total costs and expenses 549,408 734,564 1,749,119 1,682,354
-------- -------- --------- ---------
Income (loss) from
continuing operations
before other items (339,216) (397,258) (1,055,356) (615,235)
Gain on early
extinguishment of debt 91,701 68,321 446,957 69,916
Gain on sale of joint
venture interest - - - 280,219
Earnings (loss) from
equity method
investments 7,370 1,905 (11,266) 5,377
-------- -------- -------- ---------
Income (loss) from
continuing operations (240,145) (327,032) (619,665) (259,723)
Income (loss) from
discontinued operations
(8,106) 3,194 (9,248) 19,358
Gain from discontinued
operations 809 19,955 12,426 72,487
-------- -------- -------- ---------
Net income (loss) (247,442) (303,883) (616,487) (167,878)
Net (income) loss
attributable to
noncontrolling interests (515) 502 998 1,069
Gain on sale of joint
venture interest
attributable to
noncontrolling interests - - - (18,560)
Gain from discontinued
operations attributable to
noncontrolling interests - - - (3,689)
-------- -------- -------- ---------
Net income (loss)
attributable to iStar
Financial Inc. (247,957) (303,381) (615,489) (189,058)
Preferred dividend
requirements (10,580) (10,580) (31,740) (31,740)
-------- -------- -------- ---------
Net income (loss) allocable
to common shareholders,
HPU holders and Participating
Security holders (2) ($258,537) ($313,961) ($647,229) ($220,798)
========= ========= ========= =========
(1) For the three months ended September 30, 2009 and 2008, includes
$4,521 and $4,884 of stock-based compensation expense, respectively.
For the nine months ended September 30, 2009 and 2008, includes
$17,572 and $17,725 of stock-based compensation expense,
respectively.
(2) HPU holders are Company employees who purchased high performance
common stock units under the Company's High Performance Unit Program.
Participating Security holders are Company employees and directors
who hold unvested restricted stock units and common stock equivalents
under the Company's Long Term Incentive Plan.
iStar Financial Inc.
Earnings Per Share Information
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
EPS INFORMATION FOR COMMON SHARES
Income (loss) attributable to
iStar Financial Inc. from
continuing operations(1)(2)
Basic and diluted ($2.48) ($2.49) ($6.24) ($2.27)
Net income (loss) attributable
to iStar Financial Inc.(1)(3)
Basic and diluted ($2.55) ($2.32) ($6.21) ($1.63)
Weighted average shares
outstanding
Basic and diluted 98,674 133,199 101,324 133,955
EPS INFORMATION FOR HPU SHARES
Income (loss) attributable to
iStar Financial Inc. from
continuing operations(1)(2)
Basic and diluted ($468.33) ($470.67) ($1,181.53) ($430.66)
Net income (loss) attributable
to iStar Financial Inc.(1)(3)(4)
Basic and diluted ($481.93) ($438.47) ($1,175.73) ($308.73)
Weighted average shares outstanding
Basic and diluted 15 15 15 15
(1) For the three months ended September 30, 2009 and 2008, excludes
preferred dividends of $10,580. For the nine months ended September
30, 2009 and 2008, excludes preferred dividends of $31,740.
(2) Income (loss) attributable to iStar Financial Inc. from continuing
operations excludes net (income) loss from noncontrolling interests.
(3) For the three and nine months ended September 30, 2008, net income
(loss) attributable to iStar Financial Inc. and allocable to common
shareholders and HPU holders is reduced by $1,271 and $2,393,
respectively, for dividends paid to Participating Security holders.
(4) For the three months ended September 30, 2009 and 2008, net income
(loss) allocable to HPU holders was ($7,229) and ($6,577),
respectively, on both a basic and dilutive basis. For the nine months
ended September 30, 2009 and 2008, net income (loss) allocable to HPU
holders was ($17,636) and ($4,631), respectively, on both a basic and
diluted basis.
iStar Financial Inc.
Reconciliation of Adjusted Earnings to GAAP Net Income
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
-------- -------- -------- --------
ADJUSTED EARNINGS (1)
Net income (loss) ($247,442) ($303,883) ($616,487) ($167,878)
Add: Depreciation,
depletion and amortization 25,264 24,448 73,341 78,149
Add: Joint venture
depreciation, depletion and
amortization 1,897 1,943 16,091 12,513
Add: Deferred financing
amortization (8,780) 16,745 3,346 38,677
Add: Impairment of goodwill
and intangible assets - - 4,186 51,549
Less: Hedge
ineffectiveness, net - (1,256) - (2,106)
Less: Gain from
discontinued operations (809) (19,955) (12,426) (72,487)
Less: Gain on sale of joint
venture interest - - - (280,219)
Less: Net (income) loss
attributable to
noncontrolling interests (515) 502 998 1,069
Less: Preferred dividends (10,580) (10,580) (31,740) (31,740)
------- ------- ------- -------
Adjusted earnings (loss)
allocable to common
shareholders, HPU holders
and Participating Security
holders:
Basic and Diluted ($240,965) ($292,036) ($562,691) ($372,473)
Adjusted earnings (loss)
per common share: (2)
Basic and Diluted (3) ($2.37) ($2.16) ($5.40) ($2.74)
Weighted average common
shares outstanding:
Basic and Diluted 98,674 133,199 101,324 133,955
Common shares outstanding at
end of period:
Basic and Diluted 97,452 132,043 97,452 132,043
(1) Adjusted earnings should be examined in conjunction with net income
(loss) as shown in the Consolidated Statements of Operations.
Adjusted earnings should not be considered as an alternative to net
income (loss) (determined in accordance with GAAP) as an indicator of
the Company's performance, or to cash flows from operating activities
(determined in accordance with GAAP) as a measure of the Company's
liquidity, nor is this measure indicative of funds available to fund
the Company's cash needs or available for distribution to
shareholders. Rather, adjusted earnings is an additional measure the
Company uses to analyze how its business is performing. It should be
noted that the Company's manner of calculating adjusted earnings may
differ from the calculations of similarly-titled measures by other
companies.
(2) For the three and nine months ended September 30, 2008, excludes
$1,271 and $2,393, respectively, of dividends paid to Participating
Security holders.
(3) For the three months ended September 30, 2009 and 2008, excludes
($6,737) and ($6,120) of basic and diluted net income (loss)
allocable to HPU holders, respectively. For the nine months ended
September 30, 2009 and 2008, excludes ($15,333) and ($7,778) of basic
and diluted net income (loss) allocable to HPU holders, respectively.
iStar Financial Inc.
Consolidated Balance Sheets
(In thousands)
(unaudited)
As of As of
September 30, 2009 December 31, 2008
------------------ -----------------
ASSETS
Loans and other lending investments, net $8,588,020 $10,586,644
Corporate tenant lease assets, net 2,925,413 3,044,811
Other investments 391,053 447,318
Real estate held for investment, net 335,635 -
Other real estate owned 584,519 242,505
Assets held for sale 19,866 -
Cash and cash equivalents 187,090 496,537
Restricted cash 42,509 155,965
Accrued interest and operating
lease income receivable, net 48,233 87,151
Deferred operating lease income
receivable 120,124 116,793
Deferred expenses and other assets, net 162,132 119,024
----------- -----------
Total assets $13,404,594 $15,296,748
=========== ===========
LIABILITIES AND EQUITY
Accounts payable, accrued
expenses and other liabilities $274,802 $354,492
Debt obligations, net:
Unsecured senior notes 4,625,363 7,188,541
Secured senior notes 869,285 -
Unsecured revolving credit
facilities 748,562 3,281,273
Secured revolving credit
facilities 961,128 306,867
Secured term loans 4,008,966 1,611,650
Other debt obligations 98,101 98,073
----------- -----------
Total liabilities 11,586,207 12,840,896
Redeemable noncontrolling
interests 7,445 9,190
Total iStar Financial Inc.
shareholders' equity 1,774,613 2,418,999
Noncontrolling interests 36,329 27,663
----------- -----------
Total equity 1,810,942 2,446,662
----------- -----------
Total liabilities and equity $13,404,594 $15,296,748
=========== ===========
iStar Financial Inc.
Supplemental Information
(In thousands)
(unaudited)
PERFORMANCE STATISTICS Three Months Ended
September 30, 2009
------------------
Net Finance Margin
------------------
Weighted average GAAP yield on loan and CTL investments 5.71%
Less: Cost of debt 4.20%
-----
Net Finance Margin (1) 1.51%
Return on Average Common Book Equity
------------------------------------
Average total book equity $1,901,899
Less: Average book value of preferred equity (506,176)
-----------
Average common book equity (A) $1,395,723
Net income (loss) allocable to common shareholders,
HPU holders and Participating Security holders ($258,537)
Net income (loss) allocable to common shareholders,
HPU holders and Participating Security holders -
Annualized (B) ($1,034,148)
Return on Average Common Book Equity (B) / (A) Neg
Adjusted basic earnings (loss) allocable to common
shareholders, HPU holders and Participating Security
holders (2) ($240,965)
Adjusted basic earnings (loss) allocable to common
shareholders, HPU holders and Participating Security
holders - Annualized (C) ($963,860)
Adjusted Return on Average Common Book Equity (C) / (A) Neg
Expense Ratio
-------------
General and administrative expenses (D) $27,808
Total revenue (E) $210,192
Expense Ratio (D) / (E) 13.2%
(1) Weighted average GAAP yield is the annualized sum of interest income
and operating lease income, divided by the sum of average gross
corporate tenant lease assets, average loans and other lending
investments, average purchase intangibles and average assets held for
sale over the period. Cost of debt is the annualized sum of interest
expense and operating costs-corporate tenant lease assets, divided by
the average gross debt obligations over the period. Operating lease
income and operating costs-corporate tenant lease assets exclude
adjustments from discontinued operations of $758 and ($302),
respectively. The Company does not consider net finance margin to be
a measure of the Company's liquidity or cash flows. It is one of
several measures that management considers to be an indicator of the
profitability of its operations.
(2) Adjusted earnings should be examined in conjunction with net income
(loss) as shown in the Consolidated Statements of Operations.
Adjusted earnings should not be considered as an alternative to net
income (loss) (determined in accordance with GAAP) as an indicator of
the Company's performance, or to cash flows from operating activities
(determined in accordance with GAAP) as a measure of the Company's
liquidity, nor is this measure indicative of funds available to fund
the Company's cash needs or available for distribution to
shareholders. Rather, adjusted earnings is an additional measure the
Company uses to analyze how its business is performing. It should be
noted that the Company's manner of calculating adjusted earnings may
differ from the calculations of similarly-titled measures by other
companies.
iStar Financial Inc.
Supplemental Information
(In thousands)
(unaudited)
CREDIT STATISTICS Three Months Ended
September 30, 2009
------------------
Book debt, net of unrestricted cash and cash
equivalents (A) $11,124,315
Book equity 1,810,942
Add: Accumulated depreciation and loan loss reserves 2,042,688
-----------
Sum of book equity, accumulated depreciation and loan
loss reserves (B) $3,853,630
Leverage (1) (A) / (B) 2.9x
Ratio of Earnings to Fixed Charges (1.1x)
Ratio of Earnings to Fixed Charges and Preferred
Stock Dividends (1.0x)
Covenant Calculation of Fixed Charge Coverage Ratio (2) 2.7x
Interest Coverage
-----------------
EBITDA (3) (C) ($116,923)
Interest expense and preferred dividends (D) 124,518
EBITDA / Interest Expense (3) (C) / (D) Neg
RECONCILIATION OF NET INCOME TO EBITDA (3)
Net income (loss) less preferred dividends ($258,022)
Add: Interest expense 113,938
Add: Depreciation, depletion and amortization 25,264
Add: Joint venture depreciation, depletion and amortization 1,897
-----------
EBITDA (3) ($116,923)
(1) Leverage is calculated by dividing book debt net of unrestricted cash
and cash equivalents by the sum of book equity, accumulated
depreciation and loan loss reserves.
(2) This measure, which is a trailing twelve-month calculation and
excludes the effect of impairment charges and other non-cash items,
is consistent with covenant calculations included in the Company's
secured credit facilities; therefore, we believe it is a useful
measure for investors to consider.
(3) EBITDA should be examined in conjunction with net income (loss) as
shown in the Consolidated Statements of Operations. EBITDA should
not be considered as an alternative to net income (loss) (determined
in accordance with GAAP) as an indicator of the Company's
performance, or to cash flows from operating activities (determined
in accordance with GAAP) as a measure of the Company's liquidity,
nor is this measure indicative of funds available to fund the
Company's cash needs or available for distribution to shareholders.
It should be noted that the Company's manner of calculating EBITDA
may differ from the calculations of similarly-titled measures by
other companies.
iStar Financial Inc.
Supplemental Information
(In thousands)
(unaudited)
FINANCING VOLUME SUMMARY STATISTICS
Three Months Ended September 30, 2009
LOANS
-----------------------------
Total/ CORPORATE
Fixed Floating Weighted TENANT OTHER
Rate Rate Average LEASING INVESTMENTS
------- -------- -------- --------- -----------
Amount funded $20,847 $256,447 $277,294 $411 $5,436
Weighted average
GAAP yield 9.86% 6.06% 6.36% N/A N/A
Weighted average
all-in spread/
margin (basis
points) (1) 954 559 588 N/A N/A
Weighted average
first $ loan-to-value
ratio 19.01% 1.52% 2.90% N/A N/A
Weighted average
last $ loan-to-value
ratio 87.66% 81.97% 82.42% N/A N/A
UNFUNDED COMMITMENTS
Number of assets with unfunded commitments 119
Discretionary commitments $126,576
Non-discretionary commitments 1,005,868
----------
Total unfunded commitments $1,132,444
Estimated weighted average funding period Approximately 3.1 years
UNENCUMBERED ASSETS / UNSECURED DEBT
Unencumbered assets (A) $7,566,297
Unsecured debt (B) $5,510,740
Unencumbered Assets / Unsecured Debt (A) / (B) 1.4x
RISK MANAGEMENT STATISTICS
(weighted average risk rating)
2009 2008
-------------------------------- --------------------------
September 30, June 30, March 31, December 31, September 30,
-------------------------------- --------------------------
Structured
Finance Assets
(principal risk) 3.91 3.90 3.71 3.53 3.41
Corporate Tenant
Lease Assets 2.60 2.59 2.59 2.58 2.55
(1=lowest risk; 5=highest risk)
(1) Represents spread over base rate LIBOR (floating-rate loans) and
interpolated U.S. Treasury rates (fixed-rate loans) during the
quarter.
iStar Financial Inc.
Supplemental Information
(In thousands, except per share amounts)
(unaudited)
LOANS AND OTHER LENDING INVESTMENTS CREDIT STATISTICS
As of
---------------------------------------
September 30, 2009 December 31, 2008
------------------ -----------------
Value of non-performing
loans (1) /
As a percentage of total
managed loans $4,399,701 42.0% $3,458,158 27.5%
Reserve for loan losses /
As a percentage of total
managed loans $1,491,153 14.2% $976,788 7.8%
As a percentage of
non-performing loans (1) 33.9% 28.3%
(1) Non-performing loans include iStar's book value and Fremont's
A-participation interest on the associated assets.
iStar Financial Inc.
Supplemental Information
(In millions)
(unaudited)
Managed % of
NPL STATISTICS AS OF SEPTEMBER 30, 2009 (1) Value NPLs
------- -----
Origination
-----------
iStar Legacy $2,603 59.2%
Fremont 1,797 40.8
------ ------
Total $4,400 100.0%
====== ======
Property / Collateral Type
--------------------------
Land $1,328 30.2%
Condo Construction - Completed 721 16.4
Multifamily 370 8.4
Mixed Use / Mixed Collateral 370 8.4
Condo Construction - In Progress 360 8.2
Retail 298 6.8
Entertainment / Leisure 274 6.2
Hotel 204 4.6
Conversion - In Progress 181 4.1
Industrial / R&D 92 2.1
Office 77 1.8
Conversion - Completed 63 1.4
Corporate - Real Estate 62 1.4
------ ------
Total $4,400 100.0%
====== ======
(1) Based on carrying value of the loans, plus the Fremont
A-participation interest on the associated loans.
iStar Financial Inc.
Supplemental Information
(In millions)
(unaudited)
Carrying % of
PORTFOLIO STATISTICS AS OF SEPTEMBER 30, 2009 (1) Value Total
----- ------
Asset Type
----------
First Mortgages / Senior Loans $9,247 62.9%
Corporate Tenant Leases 3,547 24.1
Mezzanine / Subordinated Debt 832 5.7
Other Real Estate Owned 585 4.0
Real Estate Held for Investment 336 2.3
Other Investments 155 1.0
------- ------
Total $14,702 100.0%
======= ======
Property / Collateral Type
--------------------------
Apartment / Residential $4,206 28.6%
Land 2,307 15.7
Office 1,879 12.8
Industrial / R&D 1,366 9.3
Retail 1,178 8.0
Entertainment / Leisure 926 6.3
Hotel 877 5.9
Mixed Use / Mixed Collateral 762 5.2
Corporate - Real Estate 752 5.1
Other 439 3.0
Corporate - Non-Real Estate 10 0.1
------- ------
Total $14,702 100.0%
======= ======
Geography
---------
West $3,384 23.0%
Northeast 2,700 18.4
Southeast 2,401 16.3
Mid-Atlantic 1,571 10.7
Various 996 6.8
Central 916 6.2
Southwest 869 5.9
South 500 3.4
International 488 3.3
Northcentral 439 3.0
Northwest 438 3.0
------- ------
Total $14,702 100.0%
======= ======
(1) Based on carrying value of the Company's total investment
portfolio, gross of loan loss reserves and accumulated depreciation.
SOURCE iStar Financial Inc.