ý
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Maryland
|
94-6181186
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
410 Park Avenue,
14th Floor, New York,
NY
|
10022
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(212)
655-0220
(Registrant's
telephone number, including area
code)
|
Large
accelerated filer o
|
Accelerated
filer ý
|
|
Non-accelerated
filer o (Do not check if
a smaller reporting company)
|
Smaller
Reporting Company o
|
CAPITAL TRUST,
INC.
|
||||||
INDEX
|
||||||
Part
I.
|
Financial
Information
|
|||||
Item 1:
|
1
|
|||||
1
|
||||||
2
|
||||||
3
|
||||||
4
|
||||||
5
|
||||||
|
||||||
Item
2:
|
36
|
|||||
|
||||||
Item
3:
|
55
|
|||||
Item 4:
|
57
|
|||||
Part
II.
|
Other
Information
|
|||||
Item 1:
|
58
|
|||||
Item 1A:
|
58
|
|||||
Item 2:
|
58
|
|||||
Item 3:
|
58
|
|||||
Item 4:
|
58
|
|||||
Item 5:
|
58
|
|||||
Item 6:
|
59
|
|||||
60
|
Capital Trust, Inc. and Subsidiaries
|
||||||||
Consolidated
Balance Sheets
|
||||||||
June
30, 2009 and December 31, 2008
|
||||||||
(in
thousands except per share data)
|
||||||||
June
30,
|
December
31,
|
|||||||
Assets
|
2009
|
2008
|
||||||
(unaudited)
|
|
|||||||
Cash
and cash equivalents
|
$ | 19,533 | $ | 45,382 | ||||
Restricted
cash
|
155 | 18,821 | ||||||
Securities
held-to-maturity
|
826,552 | 852,211 | ||||||
Loans
receivable, net
|
1,644,775 | 1,790,234 | ||||||
Loans
held-for-sale, net
|
12,000 | 92,175 | ||||||
Real
estate held-for-sale
|
7,100 | 9,897 | ||||||
Equity
investments in unconsolidated subsidiaries
|
2,487 | 2,383 | ||||||
Accrued
interest receivable
|
5,088 | 6,351 | ||||||
Interest
rate hedge assets
|
75 | — | ||||||
Deferred
income taxes
|
1,706 | 1,706 | ||||||
Prepaid
expenses and other assets
|
8,625 | 18,369 | ||||||
Total
assets
|
2,528,096 | 2,837,529 | ||||||
Liabilities
& Shareholders' Equity
|
||||||||
Liabilities:
|
||||||||
Accounts
payable and accrued expenses
|
$ | 7,784 | $ | 11,478 | ||||
Repurchase
obligations
|
502,456 | 699,054 | ||||||
Collateralized
debt obligations
|
1,133,664 | 1,156,035 | ||||||
Senior
credit facility
|
99,698 | 100,000 | ||||||
Junior
subordinated notes
|
126,085 | 128,875 | ||||||
Participations
sold
|
292,554 | 292,669 | ||||||
Interest
rate hedge liabilities
|
33,898 | 47,974 | ||||||
Total
liabilities
|
2,196,139 | 2,436,085 | ||||||
Shareholders'
equity:
|
||||||||
Class
A common stock $0.01 par value 100,000 shares authorized,
21,754
and
21,740 shares issued and outstanding as of June 30, 2009 and
December
31, 2008, respectively ("class A common stock")
|
218 | 217 | ||||||
Restricted
class A common stock $0.01 par value, 299 and 331 shares
issued
and
outstanding as of June 30, 2009 and December 31, 2008,
respectively
("restricted
class A common stock" and together with class A common
stock,
"common stock")
|
3 | 3 | ||||||
Additional
paid-in capital
|
559,411 | 557,435 | ||||||
Accumulated
other comprehensive loss
|
(35,175 | ) | (41,009 | ) | ||||
Accumulated
deficit
|
(192,500 | ) | (115,202 | ) | ||||
Total
shareholders' equity
|
331,957 | 401,444 | ||||||
Total
liabilities and shareholders' equity
|
$ | 2,528,096 | $ | 2,837,529 |
See
accompanying notes to consolidated financial
statements.
|
Capital Trust, Inc. and Subsidiaries
|
||||||||||||||||
Consolidated
Statements of Operations
|
||||||||||||||||
Three
and Six Months Ended June 30, 2009 and 2008
|
||||||||||||||||
(in
thousands, except share and per share data)
|
||||||||||||||||
(unaudited)
|
||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Income
from loans and other investments:
|
||||||||||||||||
Interest
and related income
|
$ | 30,575 | $ | 49,030 | $ | 63,814 | $ | 105,585 | ||||||||
Less:
Interest and related expenses
|
20,244 | 32,799 | 41,512 | 70,743 | ||||||||||||
Income
from loans and other investments, net
|
10,331 | 16,231 | 22,302 | 34,842 | ||||||||||||
Other
revenues:
|
||||||||||||||||
Management
fees from affiliates
|
2,929 | 4,154 | 5,809 | 6,350 | ||||||||||||
Servicing
fees
|
155 | 44 | 1,334 | 222 | ||||||||||||
Other
interest income
|
8 | 638 | 136 | 825 | ||||||||||||
Total
other revenues
|
3,092 | 4,836 | 7,279 | 7,397 | ||||||||||||
Other
expenses:
|
||||||||||||||||
General
and administrative
|
4,503 | 6,208 | 12,959 | 13,108 | ||||||||||||
Depreciation
and amortization
|
7 | 22 | 14 | 127 | ||||||||||||
Total
other expenses
|
4,510 | 6,230 | 12,973 | 13,235 | ||||||||||||
Total
other-than-temporary impairments on securities
|
(4,000 | ) | — | (18,646 | ) | — | ||||||||||
Portion
of other-than-temporary impairments on securities recognized
in other comprehensive income
|
— | — | 5,624 | — | ||||||||||||
Impairment
of goodwill
|
(2,235 | ) | — | (2,235 | ) | — | ||||||||||
Impairment
on real estate held-for-sale
|
(899 | ) | — | (2,233 | ) | — | ||||||||||
Net
impairments recognized in earnings
|
(7,134 | ) | — | (17,490 | ) | — | ||||||||||
Provision
for loan losses
|
(7,730 | ) | (56,000 | ) | (66,493 | ) | (56,000 | ) | ||||||||
Valuation
allowance on loans held-for-sale
|
— | — | (10,363 | ) | — | |||||||||||
Gain
on extinguishment of debt
|
— | 6,000 | — | 6,000 | ||||||||||||
Gain
on sale of investments
|
— | 374 | — | 374 | ||||||||||||
(Loss)/income
from equity investments
|
(445 | ) | 69 | (2,211 | ) | 76 | ||||||||||
Loss
before income taxes
|
(6,396 | ) | (34,720 | ) | (79,949 | ) | (20,546 | ) | ||||||||
Income
tax provision/(benefit)
|
— | 98 | (408 | ) | (501 | ) | ||||||||||
Net
loss
|
$ | (6,396 | ) | $ | (34,818 | ) | $ | (79,541 | ) | $ | (20,045 | ) | ||||
Per
share information:
|
||||||||||||||||
Net
loss per share of common stock:
|
||||||||||||||||
Basic
|
$ | (0.29 | ) | $ | (1.59 | ) | $ | (3.56 | ) | $ | (1.01 | ) | ||||
Diluted
|
$ | (0.29 | ) | $ | (1.59 | ) | $ | (3.56 | ) | $ | (1.01 | ) | ||||
Weighted
average shares of common stock outstanding:
|
||||||||||||||||
Basic
|
22,368,539 | 21,915,175 | 22,327,895 | 19,928,912 | ||||||||||||
Diluted
|
22,368,539 | 21,915,175 | 22,327,895 | 19,928,912 | ||||||||||||
Dividends
declared per share of common stock
|
$ | — | $ | 0.80 | $ | — | $ | 1.60 |
See
accompanying notes to consolidated financial
statements.
|
Capital
Trust, Inc. and Subsidiaries
|
|||||||||||||||||||||||||||||
Consolidated
Statements of Changes in Shareholders' Equity
|
|||||||||||||||||||||||||||||
For
the Six Months Ended June 30, 2009 and 2008
|
|||||||||||||||||||||||||||||
(in
thousands)
|
|||||||||||||||||||||||||||||
(unaudited)
|
|||||||||||||||||||||||||||||
Comprehensive
Loss
|
Class
A Common Stock
|
Restricted
Class A Common Stock
|
Additional
Paid-In Capital
|
Accumulated
Other Comprehensive Loss
|
Accumulated
Deficit
|
Total
|
|||||||||||||||||||||||
Balance
at January 1, 2008
|
$ | 172 | $ | 4 | $ | 426,113 | $ | (8,684 | ) | $ | (9,368 | ) | $ | 408,237 | |||||||||||||||
Net
loss
|
$ | (20,045 | ) | — | — | — | — | (20,045 | ) | (20,045 | ) | ||||||||||||||||||
Unrealized
gain on derivative financial instruments
|
1,764 | — | — | — | 1,764 | — | 1,764 | ||||||||||||||||||||||
Unrealized
gain on available-for-sale security
|
277 | — | — | — | 277 | — | 277 | ||||||||||||||||||||||
Reclassification
to gain on sale of investments
|
(482 | ) | — | — | — | (482 | ) | — | (482 | ) | |||||||||||||||||||
Amortization
of unrealized gain on securities
|
(853 | ) | — | — | — | (853 | ) | — | (853 | ) | |||||||||||||||||||
Deferred
loss on settlement of swap
|
(612 | ) | — | — | — | (612 | ) | — | (612 | ) | |||||||||||||||||||
Amortization
of deferred gains and losses on settlement of swaps
|
(105 | ) | — | — | — | (105 | ) | — | (105 | ) | |||||||||||||||||||
Shares
of class A common stock issued in public offering
|
— | 40 | — | 112,567 | — | — | 112,607 | ||||||||||||||||||||||
Shares of
class A common stock issued under dividend reinvestment plan and stock
purchase plan
|
— | 5 | — | 12,835 | — | — | 12,840 | ||||||||||||||||||||||
Sale
of shares of class A common stock under stock option
agreement
|
— | — | — | 180 | — | — | 180 | ||||||||||||||||||||||
Restricted
class A common stock earned
|
— | — | — | 1,927 | — | — | 1,927 | ||||||||||||||||||||||
Dividends
declared on common stock
|
— | — | — | — | — | (35,041 | ) | (35,041 | ) | ||||||||||||||||||||
Balance
at June 30, 2008
|
$ | (20,056 | ) | $ | 217 | $ | 4 | $ | 553,622 | $ | (8,695 | ) | $ | (64,454 | ) | $ | 480,694 | ||||||||||||
Balance
at January 1, 2009
|
$ | 217 | $ | 3 | $ | 557,435 | $ | (41,009 | ) | $ | (115,202 | ) | $ | 401,444 | |||||||||||||||
Net
loss
|
$ | (79,541 | ) | — | — | — | — | (79,541 | ) | (79,541 | ) | ||||||||||||||||||
Cumulative
effect of change in accounting principle
|
— | — | — | — | (2,243 | ) | 2,243 | — | |||||||||||||||||||||
Unrealized
gain on derivative financial instruments
|
14,151 | — | — | — | 14,151 | — | 14,151 | ||||||||||||||||||||||
Amortization
of unrealized gain on securities
|
(537 | ) | — | — | — | (537 | ) | — | (537 | ) | |||||||||||||||||||
Amortization
of deferred gains and losses on settlement of swaps
|
(47 | ) | — | — | — | (47 | ) | — | (47 | ) | |||||||||||||||||||
Non-credit
related other-than-temporary impairments on securities
|
(5,490 | ) | — | — | — | (5,490 | ) | — | (5,490 | ) | |||||||||||||||||||
Issuance
of warrants in conjunction with debt restructuring
|
— | — | — | 940 | — | — | 940 | ||||||||||||||||||||||
Restricted
class A common stock earned
|
— | 1 | — | 774 | — | — | 775 | ||||||||||||||||||||||
Deferred
directors' compensation
|
— | — | — | 262 | — | — | 262 | ||||||||||||||||||||||
Balance
at June 30, 2009
|
$ | (71,464 | ) | $ | 218 | $ | 3 | $ | 559,411 | $ | (35,175 | ) | $ | (192,500 | ) | $ | 331,957 |
See
accompanying notes to consolidated financial
statements.
|
Capital Trust, Inc. and Subsidiaries
|
||||||||
Consolidated
Statements of Cash Flows
|
||||||||
For
the Six Months Ended June 30, 2009 and 2008
|
||||||||
(in
thousands)
|
||||||||
(unaudited)
|
||||||||
2009
|
2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$ | (79,541 | ) | $ | (20,045 | ) | ||
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||||
Net
impairments recognized in earnings
|
17,490 | — | ||||||
Provision
for loan losses
|
66,493 | 56,000 | ||||||
Valuation
allowance on loans held-for-sale
|
10,363 | — | ||||||
Gain
on extinguishment of debt
|
— | (6,000 | ) | |||||
Gain
on sale of investment
|
— | (374 | ) | |||||
Loss/(income)
from equity investments
|
2,211 | (76 | ) | |||||
Employee
stock-based compensation
|
775 | 1,927 | ||||||
Depreciation
and amortization
|
14 | 127 | ||||||
Amortization
of premiums/discounts on loans and securities
|
(3,262 | ) | (3,189 | ) | ||||
Amortization
of deferred gains on interest rate hedges
|
(47 | ) | (105 | ) | ||||
Amortization
of deferred financing costs and premiums/discounts on debt
obligations
|
3,749 | 2,628 | ||||||
Deferred
directors compensation
|
262 | — | ||||||
Changes
in assets and liabilities, net:
|
||||||||
Deposits
and other receivables
|
1,422 | 593 | ||||||
Accrued
interest receivable
|
1,263 | 2,851 | ||||||
Deferred
income taxes
|
— | (501 | ) | |||||
Prepaid
expenses and other assets
|
659 | 574 | ||||||
Deferred
origination fees and other revenue
|
— | (1,160 | ) | |||||
Accounts
payable and accrued expenses
|
(3,692 | ) | (5,784 | ) | ||||
Net
cash provided by operating activities
|
18,159 | 27,466 | ||||||
Cash
flows from investing activities:
|
||||||||
Purchases
of securities
|
— | (660 | ) | |||||
Principal
collections on and proceeds from securities
|
7,856 | 15,806 | ||||||
Origination/purchase
of loans receivable and add-on fundings under existing
loans
|
(7,698 | ) | (94,435 | ) | ||||
Principal
collections on loans receivable
|
45,664 | 171,859 | ||||||
Proceeds
from real estate held-for-sale
|
564 | — | ||||||
Contributions
to unconsolidated subsidiaries
|
(2,315 | ) | — | |||||
Purchase
of equipment and leasehold improvements
|
— | (30 | ) | |||||
Increase
in restricted cash
|
— | (8,949 | ) | |||||
Net
cash provided by investing activities
|
44,071 | 83,591 | ||||||
Cash
flows from financing activities:
|
||||||||
Decrease
in restricted cash
|
18,666 | — | ||||||
Borrowings
under repurchase obligations
|
— | 131,018 | ||||||
Repayments
under repurchase obligations
|
(82,969 | ) | (236,133 | ) | ||||
Borrowings
under credit facilities
|
— | 25,000 | ||||||
Repayments
under credit facilities
|
(1,250 | ) | — | |||||
Repayment
of collateralized debt obligations
|
(22,519 | ) | (21,569 | ) | ||||
Settlement
of interest rate hedges
|
— | (612 | ) | |||||
Payment
of deferred financing costs
|
(7 | ) | (108 | ) | ||||
Sale
of class A common stock upon stock option exercise
|
— | 180 | ||||||
Dividends
paid on common stock
|
— | (64,847 | ) | |||||
Proceeds
from sale of shares of class A common stock and stock purchase
plan
|
— | 123,108 | ||||||
Proceeds
from dividend reinvestment plan
|
— | 2,339 | ||||||
Net
cash used in financing activities
|
(88,079 | ) | (41,624 | ) | ||||
Net
(decrease)/increase in cash and cash equivalents
|
(25,849 | ) | $ | 69,433 | ||||
Cash
and cash equivalents at beginning of period
|
45,382 | 25,829 | ||||||
Cash
and cash equivalents at end of period
|
$ | 19,533 | $ | 95,262 |
See
accompanying notes to consolidated financial
statements.
|
1.
|
Organization
|
2.
|
Summary
of Significant Accounting Policies
|
3.
|
Securities
Held-to-Maturity
|
CMBS
|
CDOs
& Other
|
Total
Book
Value
|
|||||||||||
December
31, 2008
|
$669,029 | $183,182 | $852,211 | ||||||||||
Principal
paydowns
|
(1,467 | ) | (6,389 | ) | (7,856 | ) | |||||||
Discount/premium
amortization & other (1)
|
1,180 | (337 | ) | 843 | |||||||||
Other-than-temporary
impairments:
|
|||||||||||||
Recognized
in earnings
|
(7,242 | ) | (5,780 | ) | (13,022 | ) | |||||||
Recognized
in accumulated other comprehensive income
|
(5,624 | ) | — | (5,624 | ) | ||||||||
June
30, 2009
|
$655,876 | $170,676 | $826,552 |
(1)
|
Includes
mark-to-market adjustments on securities previously classified as
available-for-sale, amortization of other-than-temporary impairments
recognized in accumulated other comprehensive income and losses, if
any.
|
June
30, 2009
|
December
31, 2008
|
|||
Number
of securities
|
77
|
77
|
||
Number
of issues
|
55
|
55
|
||
Rating
(1)
(2)
|
BB
|
BB
|
||
Coupon
(1)
(3)
|
6.18%
|
6.23%
|
||
Yield (1)
(3)
|
6.63%
|
6.87%
|
||
Life
(years) (1)
(4)
|
4.1
|
4.6
|
(1)
|
Represents
a weighted average as of June 30, 2009 and December 31, 2008,
respectively.
|
|
(2)
|
Weighted
average ratings are based on the lowest rating published by Fitch Ratings,
Standard & Poor’s or Moody’s Investors Service for each security and
exclude $37.9 million face value ($33.7 million book value) of unrated
equity investments in collateralized debt
obligations.
|
|
(3)
|
Calculations
based on LIBOR of 0.31% and 0.44% as of June 30, 2009 and December 31,
2008, respectively. For $37.9 million face value ($33.7 million book
value) of securities, calculations use an effective rate based on cash
received.
|
|
(4)
|
Weighted
average life is based on the timing and amount of future expected
principal payments through the expected repayment date of each respective
investment.
|
Rating
as of June 30, 2009
|
||||||||||||||||
Vintage
|
AAA
|
AA
|
A
|
BBB
|
BB
|
B
|
CCC
and
Below
|
Total
|
||||||||
2007
|
$—
|
$—
|
$—
|
$—
|
$10,593
|
$—
|
$90,128
|
$100,721
|
||||||||
2006
|
—
|
—
|
—
|
6,793
|
—
|
13,847
|
28,286
|
48,926
|
||||||||
2005
|
—
|
—
|
—
|
47,118
|
15,000
|
—
|
—
|
62,118
|
||||||||
2004
|
—
|
24,863
|
21,717
|
—
|
35,247
|
—
|
—
|
81,827
|
||||||||
2003
|
9,904
|
—
|
—
|
4,975
|
—
|
13,609
|
1,138
|
29,626
|
||||||||
2002
|
—
|
—
|
—
|
6,594
|
—
|
2,574
|
10,944
|
20,112
|
||||||||
2001
|
—
|
—
|
—
|
4,858
|
14,220
|
—
|
—
|
19,078
|
||||||||
2000
|
7,552
|
—
|
—
|
—
|
4,978
|
—
|
25,588
|
38,118
|
||||||||
1999
|
—
|
—
|
11,483
|
1,437
|
17,355
|
—
|
—
|
30,275
|
||||||||
1998
|
121,449
|
—
|
82,556
|
74,866
|
11,918
|
7,439
|
5,121
|
303,349
|
||||||||
1997
|
—
|
—
|
35,275
|
5,187
|
8,547
|
258
|
18,210
|
67,477
|
||||||||
1996
|
24,016
|
—
|
—
|
—
|
—
|
—
|
909
|
24,925
|
||||||||
Total
|
$162,921
|
$24,863
|
$151,031
|
$151,828
|
$117,858
|
$37,727
|
$180,324
|
$826,552
|
Rating
as of December 31, 2008
|
||||||||||||||||
Vintage
|
AAA
|
AA
|
A
|
BBB
|
BB
|
B
|
CCC
and
Below
|
Total
|
||||||||
2007
|
$—
|
$—
|
$—
|
$—
|
$32,540
|
$41,525
|
$36,356
|
$110,421
|
||||||||
2006
|
—
|
—
|
—
|
34,502
|
14,395
|
—
|
—
|
48,897
|
||||||||
2005
|
—
|
—
|
—
|
47,012
|
15,000
|
—
|
—
|
62,012
|
||||||||
2004
|
—
|
24,879
|
28,106
|
26,120
|
9,054
|
—
|
—
|
88,159
|
||||||||
2003
|
9,903
|
—
|
—
|
4,972
|
6,044
|
7,691
|
1,115
|
29,725
|
||||||||
2002
|
—
|
—
|
—
|
6,572
|
—
|
13,382
|
—
|
19,954
|
||||||||
2001
|
—
|
—
|
—
|
4,871
|
14,234
|
—
|
—
|
19,105
|
||||||||
2000
|
7,597
|
—
|
—
|
—
|
5,515
|
—
|
27,490
|
40,602
|
||||||||
1999
|
—
|
—
|
11,529
|
1,441
|
17,350
|
—
|
—
|
30,320
|
||||||||
1998
|
122,013
|
—
|
82,455
|
74,916
|
19,347
|
—
|
5,144
|
303,875
|
||||||||
1997
|
—
|
—
|
35,615
|
5,585
|
8,554
|
262
|
23,340
|
73,356
|
||||||||
1996
|
23,750
|
—
|
—
|
—
|
—
|
—
|
2,035
|
25,785
|
||||||||
Total
|
$163,263
|
$24,879
|
$157,705
|
$205,991
|
$142,033
|
$62,860
|
$95,480
|
$852,211
|
Gross
Other-Than-Temporary Impairments
|
Non-Credit
Related Other-Than-Temporary Impairments
|
Credit
Related Other-Than-Temporary Impairments
|
||||||||||
December
31, 2008
|
$2,243 | $— | $2,243 | |||||||||
Impact
of change in accounting principle (1)
|
— | 2,243 | (2,243 | ) | ||||||||
Additions
due to change in expected
cash
flows
|
18,646 | 5,624 | 13,022 | |||||||||
Amortization
of other-than-temporary
impairments
|
(90 | ) | (134 | ) | 44 | |||||||
June
30, 2009
|
$20,799 | $7,733 | $13,066 |
(1)
|
Represents
a reclassification to other comprehensive income of other-than-temporary
impairments on securities which were previously recorded in earnings. As
discussed in Note 2, upon adoption of FSP FAS 115-2 these impairments were
reassessed and determined to be related to factors other than credit
losses.
|
Less
Than 12 Months
|
Greater
Than 12 Months
|
Total
|
||||||||||||||||||||||||||||
Estimated
Fair Value |
Gross
Unrealized Loss
|
Estimated
Fair Value |
Gross
Unrealized Loss
|
Estimated
Fair Value |
Gross
Unrealized Loss
|
Book
Value (1)
|
||||||||||||||||||||||||
Floating
Rate
|
$— | $— | $55.9 | ($106.2 | ) | $55.9 | ($106.2 | ) | $162.1 | |||||||||||||||||||||
Fixed
Rate
|
119.4 | (20.3 | ) | 309.3 | (182.6 | ) | 428.7 | (202.9 | ) | 631.6 | ||||||||||||||||||||
Total
|
$119.4 | ($20.3 | ) | $365.2 | ($288.8 | ) | $484.6 | ($309.1 | ) | $793.7 |
(1)
|
Excludes,
as of June 30, 2009, $32.8 million of securities which were
carried at or below fair value and securities against which an
other-than-temporary impairment equal to the entire book value was
recognized in earnings.
|
Less
Than 12 Months
|
Greater
Than 12 Months
|
Total
|
||||||||||||||||||||||||||||
Estimated
Fair Value |
Gross
Unrealized Loss
|
Estimated
Fair Value |
Gross
Unrealized Loss
|
Estimated
Fair Value |
Gross
Unrealized Loss
|
Book
Value (1)
|
||||||||||||||||||||||||
Floating
Rate
|
$0.2 | ($0.6 | ) | $89.0 | ($82.0 | ) | $89.2 | ($82.6 | ) | $171.8 | ||||||||||||||||||||
Fixed
Rate
|
183.8 | (36.1 | ) | 268.4 | (156.4 | ) | 452.2 | (192.5 | ) | 644.7 | ||||||||||||||||||||
Total
|
$184.0 | ($36.7 | ) | $357.4 | ($238.4 | ) | $541.4 | ($275.1 | ) | $816.5 |
(1)
|
Excludes,
as of December 31, 2008, $35.7 million of securities which were
carried at or below fair value and securities against which an
other-than-temporary impairment equal to the entire book value was
recognized in earnings.
|
4.
|
Loans
Receivable, net
|
Gross
Book Value
|
Provision
for Loan Losses
|
Net
Book Value
|
||||||||||
December
31, 2008
|
$1,847,811 | ($57,577 | ) | $1,790,234 | ||||||||
Additional
fundings
(1)
|
6,029 | — | 6,029 | |||||||||
Satisfactions
(2)
|
(33,803 | ) | — | (33,803 | ) | |||||||
Principal
paydowns
|
(11,861 | ) | — | (11,861 | ) | |||||||
Discount/premium
amortization & other
|
1,031 | — | 1,031 | |||||||||
Provision
for loan losses
|
— | (66,493 | ) | (66,493 | ) | |||||||
Realized
loan losses
|
(2,664 | ) | 2,664 | — | ||||||||
Reclassification
to loans held-for-sale
|
(40,362 | ) | — | (40,362 | ) | |||||||
June
30, 2009
|
$1,766,181 | ($121,406 | ) | $1,644,775 |
(1)
|
Additional
fundings includes capitalized interest of $1.0 million for the six months
ended June 30, 2009.
|
|
(2)
|
Includes
final maturities and full
repayments.
|
June
30, 2009
|
December
31, 2008
|
|||||||
Number
of investments
|
65 | 73 | ||||||
Coupon
(1)
(2)
|
3.54 | % | 3.90 | % | ||||
Yield (1)
(2)
|
3.55 | % | 4.09 | % | ||||
Maturity
(years) (1)
(3)
|
2.9 | 3.3 |
(1)
|
Represents
a weighted average as of June 30, 2009 and December 31, 2008,
respectively.
|
|
(2)
|
Calculations
based on LIBOR of 0.31% as of June 30, 2009 and LIBOR of 0.44% as of
December 31, 2008.
|
|
(3)
|
Represents
the maturity of the investment assuming all extension options are
executed.
|
June
30, 2009
|
December
31, 2008
|
|||||||||||||||
Property
Type
|
Book
Value
|
Percentage
|
Book
Value
|
Percentage
|
||||||||||||
Hotel
|
$682,528 | 41 | % | $688,332 | 38 | % | ||||||||||
Office
|
605,733 | 38 | 661,761 | 37 | ||||||||||||
Healthcare
|
147,109 | 9 | 147,397 | 8 | ||||||||||||
Multifamily
|
35,640 | 2 | 123,492 | 7 | ||||||||||||
Retail
|
39,836 | 2 | 42,385 | 3 | ||||||||||||
Other
|
133,929 | 8 | 126,867 | 7 | ||||||||||||
Total
|
$1,644,775 | 100 | % | $1,790,234 | 100 | % | ||||||||||
Geographic
Location
|
Book
Value
|
Percentage
|
Book
Value
|
Percentage
|
||||||||||||
Northeast
|
$489,566 | 30 | % | $560,071 | 31 | % | ||||||||||
Southeast
|
347,002 | 21 | 387,500 | 22 | ||||||||||||
Southwest
|
283,986 | 17 | 295,490 | 16 | ||||||||||||
West
|
215,326 | 13 | 235,386 | 13 | ||||||||||||
Northwest
|
91,163 | 6 | 91,600 | 5 | ||||||||||||
Midwest
|
28,122 | 2 | 28,408 | 2 | ||||||||||||
International
|
122,397 | 7 | 122,387 | 7 | ||||||||||||
Diversified
|
67,213 | 4 | 69,392 | 4 | ||||||||||||
Total
|
$1,644,775 | 100 | % | $1,790,234 | 100 | % |
5.
|
Loans
Held-for-Sale, net
|
June
30, 2009
|
December
31, 2008
|
|||
Number
of investments
|
1
|
4
|
||
Coupon
(1)
(2)
|
L +
4.50%
|
2.54%
|
||
Yield (1)
(2)
|
4.81%
|
2.62%
|
||
Maturity
(years) (1)
(3)
|
2.8
|
3.2
|
(1)
|
Represents
a weighted average as of December 31, 2008 based on gross carrying value,
before any valuation allowance.
|
|
(2)
|
Calculations
based on LIBOR of 0.31% as of June 30, 2009 and LIBOR of 0.44% as of
December 31, 2008.
|
|
(3)
|
Represents
the maturity of the investment assuming all extension options are
executed, and does not give effect to known sales or transfers subsequent
to the balance sheet
date.
|
6.
|
Real
Estate Held-for-Sale
|
7.
|
Equity
Investment in Unconsolidated
Subsidiaries
|
Fund
III
|
CTOPI
|
Other
|
Total
|
|||||||||||||
December
31, 2008
|
$ | 597 | $ | 1,782 | $ | 4 | $ | 2,383 | ||||||||
Contributions
|
— | 2,315 | — | 2,315 | ||||||||||||
Loss
from equity investments
|
(214 | ) | (1,996 | ) | (1 | ) | (2,211 | ) | ||||||||
June
30, 2009
|
$ | 383 | $ | 2,101 | $ | 3 | $ | 2,487 |
8.
|
Prepaid
Expenses and Other Assets
|
June
30, 2009
|
December
31, 2008
|
|||||||
Deferred
financing costs, net
|
$ | 6,549 | $ | 8,342 | ||||
Prepaid
rent/security deposit
|
914 | 928 | ||||||
Prepaid
expenses
|
485 | 1,044 | ||||||
Deposits
and other receivables
|
384 | 1,422 | ||||||
Other
assets
|
293 | 523 | ||||||
Common
equity - CT Preferred Trusts
|
— | 3,875 | ||||||
Goodwill
|
— | 2,235 | ||||||
$ | 8,625 | $ | 18,369 |
9.
|
Debt
Obligations
|
June
30,
|
June
30,
|
December
31,
|
|||||||||||||||||||||||
2009
|
2009
|
2008
|
June
30, 2009
|
||||||||||||||||||||||
Debt
Obligation
|
Principal
Balance |
Book
Balance |
Book
Balance |
Coupon(1)
|
All-In
Cost(1) |
Maturity
Date(2) |
|||||||||||||||||||
Repurchase obligations
and secured debt
|
|||||||||||||||||||||||||
JPMorgan
|
$288,734 | $288,265 | $336,271 | 1.83 | % | 1.87 | % |
March
15, 2011
|
|||||||||||||||||
Morgan
Stanley
|
170,147 | 169,901 | 182,937 | 2.19 | % | 2.20 | % |
March
15, 2011
|
|||||||||||||||||
Citigroup
|
44,377 | 44,290 | 63,830 | 1.65 | % | 1.71 | % |
March
15, 2011
|
|||||||||||||||||
Lehman
Brothers
|
— | — | 18,014 | — | — | — | |||||||||||||||||||
Goldman
Sachs
|
— | — | 88,282 | — | — |
—
|
|||||||||||||||||||
UBS
|
— | — | 9,720 | — | — |
—
|
|||||||||||||||||||
Total
repurchase obligations and secured debt
|
503,258 | 502,456 | 699,054 | 1.94 | % | 1.97 | % |
March
15, 2011
|
|||||||||||||||||
Collateralized debt
obligations (CDOs)
|
|||||||||||||||||||||||||
CDO
I
|
247,476 | 247,476 | 252,045 | 0.93 | % | 1.21 | % |
December
3, 2011
|
|||||||||||||||||
CDO
II
|
294,968 | 294,968 | 298,913 | 0.81 | % | 1.06 | % |
July
1, 2012
|
|||||||||||||||||
CDO
III
|
255,265 | 256,635 | 257,515 | 5.23 | % | 5.51 | % |
January
7, 2013
|
|||||||||||||||||
CDO IV (3)
|
334,585 | 334,585 | 347,562 | 0.93 | % | 1.03 | % |
November
7, 2012
|
|||||||||||||||||
Total
CDOs
|
1,132,294 | 1,133,664 | 1,156,035 | 1.87 | % | 2.08 | % |
August
5, 2012
|
|||||||||||||||||
Senior
credit facility - WestLB
|
99,698 | 99,698 | 100,000 | 3.31 | % | 7.20 | % |
March
15, 2011
|
|||||||||||||||||
Junior subordinated notes - A (4)
|
143,753 | 126,085 | — | 1.00 | % | 4.28 | % |
April
30, 2036
|
|||||||||||||||||
Junior
subordinated notes -
B
|
— | — | 128,875 | — | — |
—
|
|||||||||||||||||||
Total/Weighted
Average
|
$1,879,003 | $1,861,903 | $2,083,964 | 1.90 | % | 3.62 | %(5) |
October
1, 2013
|
(1)
|
Floating
rate debt obligations assume LIBOR at June 30, 2009 of
0.31%.
|
|
(2)
|
Maturity
dates for our repurchase obligations with JPMorgan, Morgan Stanley and
Citigroup, and our senior credit facility, assume we meet the necessary
conditions to exercise our one year extension option. Maturity dates for
our CDOs represent a weighted average of expected principal repayments to
the respective bondholders.
|
|
(3)
|
Comprised
(at June 30, 2009) of $321.3 million of floating rate notes sold and $13.3
million of fixed rate notes.
|
|
(4)
|
Represents
the junior subordinated notes issued pursuant to the exchange transactions
on March 16, 2009 and May 14, 2009. The coupon will remain at 1.00% per
annum through April 29, 2012, increase to 7.23% per annum for the period
from April 30, 2012 through April 29, 2016 and then convert to a floating
interest rate of three-month LIBOR + 2.44% per annum through
maturity.
|
|
(5)
|
Includes
the effective cost of interest rate swaps of 1.14% per annum as of June
30, 2009.
|
|
·
|
Maturity
dates were modified to one year from the March 16, 2009 effective date of
each respective agreement, which maturity dates may be extended further
for two one-year periods. The first one-year extension option is
exercisable by us so long as the outstanding balance as of the first
extension date is less than or equal to a certain amount, reflecting a
reduction of twenty percent (20%), including the upfront payment described
above, of the outstanding amount from the date of the amendments, and no
other defaults or events of default have occurred and are continuing, or
would be caused by such extension. The second one-year extension option is
exercisable by each participating secured lender in its sole
discretion.
|
|
·
|
We
agreed to pay each secured participating lender periodic amortization as
follows: (i) mandatory payments, payable monthly in arrears, in an amount
equal to sixty-five (65%) (subject to adjustment in the second year) of
the net interest income generated by each such lender’s collateral pool,
and (ii) one hundred percent (100%) of the principal proceeds received
from the repayment of assets in each such lender’s collateral pool. In
addition, under the terms of the amendment with Citigroup, we agreed to
pay Citigroup an additional quarterly amortization payment equal to the
lesser of: (x) Citigroup’s then outstanding senior secured credit facility
balance or (y) the product of (i) the total cash paid (including both
principal and interest) during the period to our senior credit facility in
excess of an amount equivalent to LIBOR plus 1.75% based upon a $100.0
million facility amount, and (ii) a fraction, the numerator of which is
Citigroup’s then outstanding senior secured credit facility balance and
the denominator is the total outstanding secured indebtedness of the
secured participating lenders.
|
|
·
|
We
further agreed to amortize each participating secured lender’s secured
debt at the end of each calendar quarter on a pro rata basis until we have
repaid our secured, recourse credit facilities and thereafter our senior
credit facility in an amount equal to any unrestricted cash in excess of
the sum of (i) $25.0 million, and (ii) any unfunded loan and co-investment
commitments.
|
|
·
|
Each
participating secured lender was relieved of its obligation to make future
advances with respect to unfunded commitments arising under investments in
its collateral pool.
|
|
·
|
We
received the right to sell or refinance collateral assets as long as we
apply one hundred percent (100%) of the proceeds to pay down the related
secured credit facility balance subject to minimum release price
mechanics.
|
|
·
|
We
eliminated the cash margin call provisions and amended the mark-to-market
provisions that were in effect under the original terms of
the secured credit facilities. Under the revised secured credit
facilities, going forward, collateral value will be determined
by our lenders based upon changes in the performance of the underlying
real estate collateral as opposed to changes in market
spreads under the original terms. Beginning September 2009, or
earlier in the case of defaults on loans that collateralize
any of our secured credit facilities, each collateral pool will be valued
monthly on this basis. If the ratio of a secured lender’s total
outstanding secured credit facility balance to total collateral value
exceeds 1.15x the ratio calculated as of the effective date of the amended
agreements, we will be required to liquidate collateral and reduce the
borrowings or post other collateral in an effort to bring the ratio
back into compliance with the prescribed ratio, which may or may not be
successful.
|
|
·
|
prohibit
new balance sheet investments except, subject to certain limitations,
co-investments in our investment management vehicles or protective
investments to defend existing collateral assets on our balance
sheet;
|
|
·
|
prohibit
the incurrence of any additional indebtedness except in limited
circumstances;
|
|
·
|
limit
the total cash compensation to all employees and, specifically with
respect to our chief executive officer, chief operating officer and chief
financial officer, freeze their base salaries at 2008 levels, and require
cash bonuses to any of them to be approved by a committee comprised of one
representative designated by the secured lenders, the administrative agent
under the senior credit facility and the chairman of our board of
directors;
|
|
·
|
prohibit
the payment of cash dividends to our common shareholders except to the
minimum extent necessary to maintain our REIT
status;
|
|
·
|
require
us to maintain a minimum amount of liquidity, as defined, of $7.0 million
in year one and $5.0 million
thereafter;
|
|
·
|
trigger
an event of default if both our chief executive officer and chief
operating officer cease their current employment during the term of the
agreement and we fail to hire replacements acceptable to the lenders;
and
|
|
·
|
trigger
an event of default, if any event or condition occurs which causes any
obligation or liability of more than $1.0 million to become due prior to
its scheduled maturity or any monetary default under our restructured debt
obligations if the amount of such obligation is at least $1.0
million.
|
March
16, 2009 to
June 30, 2009 Change |
||||||||||||||||||||||||||||||||
June
30, 2009
|
March
16, 2009
|
Target
|
Additional
|
|||||||||||||||||||||||||||||
Participating
Secured Lender |
Collateral
Balance (1) |
Debt
Obligation (A) |
Collateral
Balance (1) |
Debt
Obligation |
Collateral
Balance (1) |
Debt
Obligation |
Debt
Obligation (B) |
Debt
Reduction
Required (A-B) (2) |
||||||||||||||||||||||||
JPMorgan
(3)
|
$ | 529,438 | $ | 288,734 | $ | 559,548 | $ | 334,968 | $ | (30,110 | ) | $ | (46,234 | ) | $ | 267,938 | $ | 20,796 | ||||||||||||||
Morgan
Stanley
|
408,038 | 170,147 | 411,342 | 181,350 | (3,304 | ) | (11,203 | ) | 145,080 | 25,067 | ||||||||||||||||||||||
Citigroup
|
77,648 | 44,377 | 99,590 | 63,830 | (21,942 | ) | (19,453 | ) | 50,894 | N/A | ||||||||||||||||||||||
$ | 1,015,124 | $ | 503,258 | $ | 1,070,480 | $ | 580,148 | $ | (55,356 | ) | $ | (76,890 | ) | $ | 463,912 | $ | 45,863 |
(1)
|
Represents
the aggregate outstanding principal balance of collateral as of each
respective period.
|
|
(2)
|
Represents
the amount by which we need to reduce our debt obligations by March 15,
2010.
|
|
(3)
|
The
additional debt reduction required under our agreement with JPMorgan is
subject to adjustment based on changes in the fair value of certain of our
interest rate swap agreements with JPMorgan between June 30, 2009 and
March 15, 2010. Amount noted above assumes no change in the fair value of
such derivatives as of June 30,
2009.
|
Loans
and Securities Collateral Balances, as of June 30, 2009
|
||||||||
Secured
Lender
|
Principal
Balance
|
Carrying
Value
|
Fair
Market Value
|
Amount
at Risk
|
||||
JPMorgan
|
$529,438
|
$507,068
|
$366,056
|
$226,800
|
||||
Morgan
Stanley
|
408,038
|
359,030
|
236,387
|
188,884
|
||||
Citigroup
|
77,648
|
75,060
|
60,370
|
30,683
|
||||
$1,015,124
|
$941,158
|
$662,813
|
$446,367
|
|
·
|
extend
the maturity date of the senior credit agreement to be co-terminus with
the maturity date of the secured credit facilities with the participating
secured lenders (as they may be further extended until March 16, 2012, as
described above);
|
|
·
|
increase
the cash interest rate under the senior credit agreement to LIBOR plus
3.00% per annum (from LIBOR plus 1.75%), plus an accrual rate of 7.20% per
annum less the cash interest rate;
|
|
·
|
initiate
quarterly amortization equal to the greater of: (i) $5.0 million per annum
and (ii) 25% of the annual cash flow received from our currently
unencumbered collateralized debt obligation
interests;
|
|
·
|
pledge
our unencumbered collateralized debt obligation interests and provide a
negative pledge with respect to certain other assets;
and
|
|
·
|
replace
all existing financial covenants with substantially similar covenants and
default provisions to those described above with respect to the
participating secured facilities.
|
10.
|
Participations
Sold
|
11.
|
Derivative
Financial Instruments
|
Hedge
|
Type
|
Counterparty
|
Notional
Amount
|
Interest
Rate
|
Maturity
|
Fair
Value
|
||||||
Swap
|
Cash
Flow Hedge
|
Swiss
RE Financial
|
$274,312
|
5.10%
|
2015
|
($22,011)
|
||||||
Swap
|
Cash
Flow Hedge
|
Bank
of America
|
73,510
|
4.58%
|
2014
|
(3,036)
|
||||||
Swap
|
Cash
Flow Hedge
|
Morgan
Stanley
|
18,282
|
3.95%
|
2011
|
(877)
|
||||||
Swap
|
Cash
Flow Hedge
|
JPMorgan
Chase
|
18,012
|
5.14%
|
2014
|
(1,987)
|
||||||
Swap
|
Cash
Flow Hedge
|
JPMorgan
Chase
|
16,894
|
4.83%
|
2014
|
(1,655)
|
||||||
Swap
|
Cash
Flow Hedge
|
JPMorgan
Chase
|
16,377
|
5.52%
|
2018
|
(2,440)
|
||||||
Swap
|
Cash
Flow Hedge
|
JPMorgan
Chase
|
12,310
|
5.02%
|
2009
|
(76)
|
||||||
Swap
|
Cash
Flow Hedge
|
Bank
of America
|
11,054
|
5.05%
|
2016
|
(924)
|
||||||
Swap
|
Cash
Flow Hedge
|
JPMorgan
Chase
|
7,062
|
5.11%
|
2016
|
75
|
||||||
Swap
|
Cash
Flow Hedge
|
Bank
of America
|
5,104
|
4.12%
|
2016
|
(210)
|
||||||
Swap
|
Cash
Flow Hedge
|
JPMorgan
Chase
|
3,273
|
5.45%
|
2015
|
(439)
|
||||||
Swap
|
Cash
Flow Hedge
|
JPMorgan
Chase
|
2,843
|
5.08%
|
2011
|
(193)
|
||||||
Swap
|
Cash
Flow Hedge
|
Morgan
Stanley
|
780
|
5.31%
|
2011
|
(50)
|
||||||
Total/Weighted
Average
|
$459,813
|
4.96%
|
2015
|
($33,823)
|
June
30, 2009
|
December
31, 2008
|
|||||||||
Hedge
|
Type
|
Fair
Value
|
Balance
Sheet Location
|
Fair
Value
|
Balance
Sheet Location
|
|||||
Swap
|
Cash
Flow Hedge
|
($22,011)
|
Interest
rate hedge liabilities
|
($29,383)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(3,036)
|
Interest
rate hedge liabilities
|
(4,526)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(877)
|
Interest
rate hedge liabilities
|
(1,053)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(1,987)
|
Interest
rate hedge liabilities
|
(2,867)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(1,655)
|
Interest
rate hedge liabilities
|
(2,550)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(2,440)
|
Interest
rate hedge liabilities
|
(3,827)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(76)
|
Interest
rate hedge liabilities
|
(302)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(924)
|
Interest
rate hedge liabilities
|
(1,366)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
75
|
Interest
rate hedge assets
|
(706)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(210)
|
Interest
rate hedge liabilities
|
(430)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(439)
|
Interest
rate hedge liabilities
|
(663)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(193)
|
Interest
rate hedge liabilities
|
(241)
|
Interest
rate hedge liabilities
|
|||||
Swap
|
Cash
Flow Hedge
|
(50)
|
Interest
rate hedge liabilities
|
(60)
|
Interest
rate hedge liabilities
|
|||||
Total
|
($33,823)
|
($47,974)
|
Amount
of gain
|
Amount
of loss
|
||||||||||||||||
recognized
in OCI
|
reclassified
from OCI to income
|
||||||||||||||||
for
the six months ended
|
for
the six months ended (1)
|
||||||||||||||||
Hedge
|
June
30, 2009
|
June
30, 2008
|
June
30, 2009
|
June
30, 2008
|
Income
Statement Location
|
||||||||||||
Interest
rate swaps
|
$ | 14,151 | $ | 1,764 | $ | (10,328 | ) | $ | (4,432 | ) |
Interest
expense
|
(1)
|
Represents
net amounts paid to swap counterparties during the period, which are
included in interest expense, offset by an immaterial amount of non-cash
swap
amortization.
|
12.
|
Shareholders’
Equity
|
Six
Months Ended June 30, 2009
|
Six
Months Ended June 30, 2008
|
|||||||||||||||||||||||
Net
|
Per
Share
|
Net
|
Per
Share
|
|||||||||||||||||||||
Loss
|
Shares
|
Amount
|
Loss
|
Shares
|
Amount
|
|||||||||||||||||||
Basic
EPS:
|
||||||||||||||||||||||||
Net
loss allocable to
common stock |
$ | (79,541 | ) | 22,327,895 | $ | (3.56 | ) | $ | (20,045 | ) | 19,928,912 | $ | (1.01 | ) | ||||||||||
Effect
of Dilutive Securities:
|
||||||||||||||||||||||||
Warrants
& Options outstanding for the purchase of common
stock
|
— | — | — | — | ||||||||||||||||||||
Diluted
EPS:
|
||||||||||||||||||||||||
Net
loss per share of common stock and assumed
conversions
|
$ | (79,541 | ) | 22,327,895 | $ | (3.56 | ) | $ | (20,045 | ) | 19,928,912 | $ | (1.01 | ) |
Three
Months Ended June 30, 2009
|
Three
Months Ended June 30, 2008
|
|||||||||||||||||||||||
Net
|
Per
Share
|
Net
|
Per
Share
|
|||||||||||||||||||||
Loss
|
Shares
|
Amount
|
Loss
|
Shares
|
Amount
|
|||||||||||||||||||
Basic
EPS:
|
||||||||||||||||||||||||
Net
loss allocable to
common stock |
$ | (6,396 | ) | 22,368,539 | $ | (0.29 | ) | $ | (34,818 | ) | 21,915,175 | $ | (1.59 | ) | ||||||||||
Effect
of Dilutive Securities:
|
||||||||||||||||||||||||
Warrants
& Options outstanding for the purchase of common
stock
|
— | — | — | — | ||||||||||||||||||||
Diluted
EPS:
|
||||||||||||||||||||||||
Net
loss per share of common stock and assumed
conversions
|
$ | (6,396 | ) | 22,368,539 | $ | (0.29 | ) | $ | (34,818 | ) | 21,915,175 | $ | (1.59 | ) |
13.
|
General
and Administrative Expenses
|
Six
Months Ended
|
||||||||
June
30,
|
||||||||
2009
|
2008
|
|||||||
Personnel
costs
|
$ | 5,395 | $ | 7,070 | ||||
Employee
stock based compensation
|
781 | 1,927 | ||||||
Restructuring
costs
|
3,139 | — | ||||||
Operating
and other costs
|
1,344 | 1,496 | ||||||
Professional
services
|
2,300 | 2,615 | ||||||
Total
|
$ | 12,959 | $ | 13,108 |
14.
|
Income
Taxes
|
15.
|
Employee
Benefit and Incentive Plans
|
1997 Employee
|
1997 Director
|
|||||||||||||||||||
Benefit
Type
|
Plan
|
Plan
|
2004
Plan
|
2007
Plan
|
Total
|
|||||||||||||||
Options(1)
|
||||||||||||||||||||
Beginning
Balance
|
170,477 | — | — | — | 170,477 | |||||||||||||||
Expired
|
(7,973 | ) | — | — | — | (7,973 | ) | |||||||||||||
Ending
Balance
|
162,504 | — | — | — | 162,504 | |||||||||||||||
Restricted
Stock(2)
|
||||||||||||||||||||
Beginning
Balance
|
— | — | 289,637 | 41,560 | 331,197 | |||||||||||||||
Granted
|
— | — | — | 216,269 | 216,269 | |||||||||||||||
Vested
|
— | — | (38,795 | ) | (7,902 | ) | (46,697 | ) | ||||||||||||
Forfeited
|
— | — | (193,310 | ) | (8,386 | ) | (201,696 | ) | ||||||||||||
Ending
Balance
|
— | — | 57,532 | 241,541 | 299,073 | |||||||||||||||
Stock
Units(3)
|
||||||||||||||||||||
Beginning
Balance
|
— | 80,017 | — | 135,434 | 215,451 | |||||||||||||||
Granted/deferred
|
— | — | — | 160,697 | 160,697 | |||||||||||||||
Ending
Balance
|
— | 80,017 | — | 296,131 | 376,148 | |||||||||||||||
Total
Outstanding Shares
|
162,504 | 80,017 | 57,532 | 537,672 | 837,725 |
(1)
|
All
options are fully vested as of June 30,
2009.
|
|
(2)
|
Comprised
of both performance based awards that vest upon the attainment of certain
common equity return thresholds and time based awards that vest based upon
an employee’s continued employment on vesting
dates.
|
|
(3)
|
Stock
units are granted to certain members of our board of directors in lieu of
cash compensation for services and in lieu of dividends earned on
previously granted stock
units.
|
Weighted
Average Exercise Price per Share
|
Weighted
Average Remaining Life (in Years)
|
||||||||||||||||||||||||
Exercise Price
per Share
|
Options
Outstanding
|
||||||||||||||||||||||||
1997 Employee
|
1997 Director
|
1997 Employee
|
1997 Director
|
1997 Employee
|
1997 Director
|
||||||||||||||||||||
Plan
|
Plan
|
Plan
|
Plan
|
Plan
|
Plan
|
||||||||||||||||||||
$10.00
- $15.00
|
35,557 | — | $13.50 | $— | 1.59 | — | |||||||||||||||||||
$15.00 - $20.00 | 126,947 | — | 16.38 | — | 2.02 | — | |||||||||||||||||||
Total/Weighted
Average
|
162,504 | — | $15.75 | $— | 1.93 | — |
Restricted
Common Stock
|
||||||||
Shares
|
Grant
Date Fair Value
|
|||||||
Unvested
at January 1, 2009
|
331,197 | $ | 30.61 | |||||
Granted
|
216,269 | 3.32 | ||||||
Vested
|
(46,697 | ) | 28.28 | |||||
Forfeited
|
(201,696 | ) | 28.99 | |||||
Unvested
at June 30, 2009
|
299,073 | $ | 12.43 |
Restricted
Common Stock
|
||||||||
Shares
|
Grant
Date Fair Value
|
|||||||
Unvested
at January 1, 2008
|
423,931 | $ | 30.96 | |||||
Granted
|
44,550 | 27.44 | ||||||
Vested
|
(83,064 | ) | 28.69 | |||||
Forfeited
|
(414 | ) | 51.25 | |||||
Unvested
at June 30, 2008
|
385,003 | $ | 31.02 |
16.
|
Fair
Values of Financial Instruments
|
|
·
|
Level
1 generally includes only unadjusted quoted prices in active markets for
identical assets or liabilities as of the reporting
date.
|
|
·
|
Level
2 inputs are those which, other than Level 1 inputs, are observable for
identical or similar assets or
liabilities.
|
|
·
|
Level
3 inputs generally include anything which does not meet the criteria of
Levels 1 and 2, particularly any unobservable
inputs.
|
Fair
Value Measurements at Reporting Date Using
|
||||||||||||||||
Total
|
Quoted
Prices in
|
Significant
Other
|
Significant
|
|||||||||||||
Fair
Value at
|
Active
Markets
|
Observable
Inputs
|
Unobservable
Inputs
|
|||||||||||||
June
30, 2009
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
|||||||||||||
Measured
on a recurring basis:
|
||||||||||||||||
Loans
held-for-sale (1)
|
$12,000 | $— | $12,000 | $— | ||||||||||||
Real
estate held-for-sale
|
7,100 | 7,100 | — | — | ||||||||||||
Interest
rate hedge assets
|
75 | — | 75 | — | ||||||||||||
Interest
rate hedge liabilities
|
(33,898 | ) | — | (33,898 | ) | — | ||||||||||
Measured
on a nonrecurring basis:
|
||||||||||||||||
Loans
receivable (2)
|
$64,306 | $— | $— | $64,306 |
(1)
|
Transactions
related to these assets have a high probability of closing subsequent to
June 30, 2009.
|
|
(2)
|
Loans
receivable against which we have recorded a provision for loan losses as
of June 30,
2009.
|
June 30, 2009
|
December 31, 2008
|
|||||||||||
Carrying
Amount
|
Face
Value
|
Fair
Value
|
Carrying
Amount
|
Face
Value
|
Fair
Value
|
|||||||
Financial
assets:
|
||||||||||||
Cash
and cash equivalents
|
$19,533
|
$19,533
|
$19,533
|
$45,382
|
$45,382
|
$45,382
|
||||||
Securities
held-to-maturity
|
826,552
|
874,288
|
525,116
|
852,211
|
883,958
|
582,478
|
||||||
Loans
receivable, net
|
1,644,775
|
1,771,188
|
1,225,959
|
1,790,234
|
1,855,432
|
1,589,929
|
||||||
Financial
liabilities:
|
||||||||||||
Repurchase
obligations
|
502,456
|
503,258
|
503,258
|
699,054
|
699,054
|
699,054
|
||||||
CDOs
|
1,133,664
|
1,133,664
|
416,204
|
1,156,035
|
1,154,504
|
441,245
|
||||||
Senior
credit facility
|
99,698
|
99,698
|
47,329
|
100,000
|
100,000
|
94,155
|
||||||
Jr.
subordinated notes
|
126,085
|
126,085
|
17,479
|
128,875
|
128,875
|
80,099
|
||||||
Participations
sold
|
292,554
|
292,609
|
202,954
|
292,669
|
292,734
|
258,416
|
17.
|
Supplemental
Disclosures for Consolidated Statements of Cash
Flows
|
18.
|
Transactions
with Related Parties
|
19.
|
Segment
Reporting
|
Balance
Sheet
|
Investment
|
Inter-Segment
|
||||||||||||||
Investment
|
Management
|
Activities
|
Total
|
|||||||||||||
Income
from loans and other investments:
|
||||||||||||||||
Interest
and related income
|
$ | 63,814 | $ | — | $ | — | $ | 63,814 | ||||||||
Less:
Interest and related expenses
|
41,512 | — | — | 41,512 | ||||||||||||
Income
from loans and other investments, net
|
22,302 | — | — | 22,302 | ||||||||||||
Other
revenues:
|
||||||||||||||||
Management
fees from affiliates
|
— | 8,287 | (2,478 | ) | 5,809 | |||||||||||
Servicing
fees
|
— | 1,589 | (255 | ) | 1,334 | |||||||||||
Other
interest income
|
134 | 15 | (13 | ) | 136 | |||||||||||
Total
other revenues
|
134 | 9,891 | (2,746 | ) | 7,279 | |||||||||||
Other
expenses
|
||||||||||||||||
General
and administrative
|
7,467 | 7,970 | (2,478 | ) | 12,959 | |||||||||||
Servicing
fee expense
|
255 | — | (255 | ) | — | |||||||||||
Other
interest expense
|
— | 13 | (13 | ) | — | |||||||||||
Depreciation
and amortization
|
— | 14 | — | 14 | ||||||||||||
Total
other expenses
|
7,722 | 7,997 | (2,746 | ) | 12,973 | |||||||||||
Total
other-than-temporary impairments on
securities
|
(18,646 | ) | — | — | (18,646 | ) | ||||||||||
Portion
of other-than-temporary impairments on
securities
recognized in other comprehensive
income
|
5,624 | — | — | 5,624 | ||||||||||||
Impairment
of goodwill
|
— | (2,235 | ) | — | (2,235 | ) | ||||||||||
Impairments
on real estate held-for-sale
|
(2,233 | ) | — | — | (2,233 | ) | ||||||||||
Net
impairments recognized in earnings
|
(15,255 | ) | (2,235 | ) | — | (17,490 | ) | |||||||||
Provision
for loan losses
|
(66,493 | ) | — | — | (66,493 | ) | ||||||||||
Valuation
allowance on loans held-for-sale
|
(10,363 | ) | — | — | (10,363 | ) | ||||||||||
Loss
from equity investments
|
— | (2,211 | ) | — | (2,211 | ) | ||||||||||
Loss
before income taxes
|
(77,397 | ) | (2,552 | ) | — | (79,949 | ) | |||||||||
Income
tax benefit
|
(408 | ) | — | — | (408 | ) | ||||||||||
Net
loss
|
$ | (76,989 | ) | $ | (2,552 | ) | $ | — | $ | (79,541 | ) | |||||
Total
assets
|
$ | 2,523,727 | $ | 7,956 | $ | (3,587 | ) | $ | 2,528,096 |
Balance
Sheet
|
Investment
|
Inter-Segment
|
||||||||||||||
Investment
|
Management
|
Activities
|
Total
|
|||||||||||||
Income
from loans and other investments:
|
||||||||||||||||
Interest
and related income
|
$ | 105,585 | $ | — | $ | — | $ | 105,585 | ||||||||
Less:
Interest and related expenses
|
70,743 | — | — | 70,743 | ||||||||||||
Income
from loans and other investments, net
|
34,842 | — | — | 34,842 | ||||||||||||
Other
revenues:
|
||||||||||||||||
Management
fees from affiliates
|
— | 9,834 | (3,484 | ) | 6,350 | |||||||||||
Servicing
fees
|
— | 222 | — | 222 | ||||||||||||
Other
interest income
|
887 | 15 | (77 | ) | 825 | |||||||||||
Total
other revenues
|
887 | 10,071 | (3,561 | ) | 7,397 | |||||||||||
Other
expenses
|
||||||||||||||||
General
and administrative
|
5,709 | 10,883 | (3,484 | ) | 13,108 | |||||||||||
Other
interest expense
|
— | 77 | (77 | ) | — | |||||||||||
Depreciation
and amortization
|
— | 127 | — | 127 | ||||||||||||
Total
other expenses
|
5,709 | 11,087 | (3,561 | ) | 13,235 | |||||||||||
Provision
for loan losses
|
(56,000 | ) | — | — | (56,000 | ) | ||||||||||
Gain
on extinguishment of debt
|
6,000 | — | — | 6,000 | ||||||||||||
Gain
on sale of investments
|
374 | — | — | 374 | ||||||||||||
Income
from equity investments
|
— | 76 | — | 76 | ||||||||||||
Loss
before income taxes
|
(19,606 | ) | (940 | ) | — | (20,546 | ) | |||||||||
Income
tax benefit
|
— | (501 | ) | — | (501 | ) | ||||||||||
Net
loss
|
$ | (19,606 | ) | $ | (439 | ) | $ | — | $ | (20,045 | ) | |||||
Total
assets
|
$ | 3,136,727 | $ | 7,569 | $ | (5,081 | ) | $ | 3,139,215 |
Balance
Sheet
|
Investment
|
Inter-Segment
|
||||||||||||||
Investment
|
Management
|
Activities
|
Total
|
|||||||||||||
Income
from loans and other investments:
|
||||||||||||||||
Interest
and related income
|
$ | 30,575 | $ | — | $ | — | $ | 30,575 | ||||||||
Less:
Interest and related expenses
|
20,244 | — | — | 20,244 | ||||||||||||
Income
from loans and other investments, net
|
10,331 | — | — | 10,331 | ||||||||||||
Other
revenues:
|
||||||||||||||||
Management
fees from affiliates
|
— | 3,902 | (973 | ) | 2,929 | |||||||||||
Servicing
fees
|
— | 410 | (255 | ) | 155 | |||||||||||
Other
interest income
|
7 | 1 | — | 8 | ||||||||||||
Total
other revenues
|
7 | 4,313 | (1,228 | ) | 3,092 | |||||||||||
Other
expenses
|
||||||||||||||||
General
and administrative
|
1,662 | 3,814 | (973 | ) | 4,503 | |||||||||||
Servicing
fee expense
|
255 | — | (255 | ) | — | |||||||||||
Depreciation
and amortization
|
— | 7 | — | 7 | ||||||||||||
Total
other expenses
|
1,917 | 3,821 | (1,228 | ) | 4,510 | |||||||||||
Total
other-than-temporary impairments on
securities
|
(4,000 | ) | — | — | (4,000 | ) | ||||||||||
Impairment
of goodwill
|
— | (2,235 | ) | — | (2,235 | ) | ||||||||||
Impairments
on real estate held-for-sale
|
(899 | ) | — | — | (899 | ) | ||||||||||
Net
impairments recognized in earnings
|
(4,899 | ) | (2,235 | ) | — | (7,134 | ) | |||||||||
Provision
for loan losses
|
(7,730 | ) | — | — | (7,730 | ) | ||||||||||
Loss
from equity investments
|
— | (445 | ) | — | (445 | ) | ||||||||||
Loss
before income taxes
|
(4,208 | ) | (2,188 | ) | — | (6,396 | ) | |||||||||
Income
tax provision
|
— | — | — | — | ||||||||||||
Net
loss
|
$ | (4,208 | ) | $ | (2,188 | ) | $ | — | $ | (6,396 | ) | |||||
Total
assets
|
$ | 2,523,727 | $ | 7,956 | $ | (3,587 | ) | $ | 2,528,096 |
Balance
Sheet
|
Investment
|
Inter-Segment
|
||||||||||||||
Investment
|
Management
|
Activities
|
Total
|
|||||||||||||
Income
from loans and other investments:
|
||||||||||||||||
Interest
and related income
|
$ | 49,030 | $ | — | $ | — | $ | 49,030 | ||||||||
Less:
Interest and related expenses
|
32,799 | — | — | 32,799 | ||||||||||||
Income
from loans and other investments, net
|
16,231 | — | — | 16,231 | ||||||||||||
Other
revenues:
|
||||||||||||||||
Management
fees from affiliates
|
— | 5,369 | (1,215 | ) | 4,154 | |||||||||||
Servicing
fees
|
— | 44 | — | 44 | ||||||||||||
Other
interest income
|
660 | 7 | (29 | ) | 638 | |||||||||||
Total
other revenues
|
660 | 5,420 | (1,244 | ) | 4,836 | |||||||||||
Other
expenses
|
||||||||||||||||
General
and administrative
|
2,455 | 4,968 | (1,215 | ) | 6,208 | |||||||||||
Other
interest expense
|
— | 29 | (29 | ) | — | |||||||||||
Depreciation
and amortization
|
— | 22 | — | 22 | ||||||||||||
Total
other expenses
|
2,455 | 5,019 | (1,244 | ) | 6,230 | |||||||||||
Provision
for loan losses
|
(56,000 | ) | — | — | (56,000 | ) | ||||||||||
Gain
on extinguishment of debt
|
6,000 | — | — | 6,000 | ||||||||||||
Gain
on sale of investments
|
374 | — | — | 374 | ||||||||||||
Income
from equity investments Income
tax provision |
— | 69 | — | 69 | ||||||||||||
(Loss)/income
before income taxes
|
(35,190 | ) | 470 | — | (34,720 | ) | ||||||||||
Income
tax provision
|
— | 98 | — | 98 | ||||||||||||
Net
(loss)/income
|
$ | (35,190 | ) | $ | 372 | $ | — | $ | (34,818 | ) | ||||||
Total
assets
|
$ | 3,136,727 | $ | 7,569 | $ | (5,081 | ) | $ | 3,139,215 |
20.
|
Subsequent
Events
|
|
·
|
Maturity
dates were modified to one year from the March 16, 2009 effective date of
each respective agreement, which maturity dates may be extended further
for two one-year periods. The first one-year extension option is
exercisable by us so long as the outstanding balance as of the first
extension date is less than or equal to a certain amount, reflecting a
reduction of twenty percent (20%), including the upfront payment described
above, of the outstanding amount from the date of the amendments, and no
other defaults or events of default have occurred and are continuing, or
would be caused by such extension. The second one-year extension option is
exercisable by each participating secured lender in its sole
discretion.
|
|
·
|
We
agreed to pay each secured participating lender periodic amortization as
follows: (i) mandatory payments, payable monthly in arrears, in an amount
equal to sixty-five (65%) (subject to adjustment in the second year) of
the net interest income generated by each such lender’s collateral pool,
and (ii) one hundred percent (100%) of the principal proceeds received
from the repayment of assets in each such lender’s collateral pool. In
addition, under the terms of the amendment with Citigroup, we agreed to
pay Citigroup an additional quarterly amortization payment equal to the
lesser of: (x) Citigroup’s then outstanding senior secured credit facility
balance or (y) the product of (i) the total cash paid (including both
principal and interest) during the period to our senior credit facility in
excess of an amount equivalent to LIBOR plus 1.75% based upon a $100.0
million facility amount, and (ii) a fraction, the numerator of which is
Citigroup’s then outstanding senior secured credit facility balance and
the denominator is the total outstanding secured indebtedness of the
secured participating lenders.
|
|
·
|
We
further agreed to amortize each participating secured lender’s secured
debt at the end of each calendar quarter on a pro rata basis until we have
repaid our secured, recourse credit facilities and thereafter our senior
credit facility in an amount equal to any unrestricted cash in excess of
the sum of (i) $25.0 million, and (ii) any unfunded loan and co-investment
commitments.
|
|
·
|
Each
participating secured lender was relieved of its obligation to make future
advances with respect to unfunded commitments arising under investments in
its collateral pool.
|
|
·
|
We
received the right to sell or refinance collateral assets as long as we
apply one hundred percent (100%) of the proceeds to pay down the related
secured credit facility balance subject to minimum release price
mechanics.
|
|
·
|
We
eliminated the cash margin call provisions and amended the mark-to-market
provisions that were in effect under the original terms of
the secured credit facilities. Under the revised secured credit
facilities, going forward, collateral value will be determined
by our lenders based upon changes in the performance of the underlying
real estate collateral as opposed to changes in market
spreads under the original terms. Beginning September 2009, or
earlier in the case of defaults on loans that collateralize
any of our secured credit facilities, each collateral pool will be valued
monthly on this basis. If the ratio of a secured lender’s total
outstanding secured credit facility balance to total collateral value
exceeds 1.15x the ratio calculated as of the effective date of the amended
agreements, we will be required to liquidate collateral and reduce the
borrowings or post other collateral in an effort to bring the ratio
back into compliance with the prescribed ratio, which may or may not be
successful.
|
|
·
|
prohibit
new balance sheet investments except, subject to certain limitations,
co-investments in our investment management vehicles or protective
investments to defend existing collateral assets on our balance
sheet;
|
|
·
|
prohibit
the incurrence of any additional indebtedness except in limited
circumstances;
|
|
·
|
limit
the total cash compensation to all employees and, specifically with
respect to our chief executive officer, chief operating officer and chief
financial officer, freeze their base salaries at 2008 levels, and require
cash bonuses to any of them to be approved by a committee comprised of one
representative designated by the secured lenders, the administrative agent
under the senior credit facility and the chairman of our board of
directors;
|
|
·
|
prohibit
the payment of cash dividends to our common shareholders except to the
minimum extent necessary to maintain our REIT
status;
|
|
·
|
require
us to maintain a minimum amount of liquidity, as defined, of $7.0 million
in year one and $5.0 million
thereafter;
|
|
·
|
trigger
an event of default if both our chief executive officer and chief
operating officer cease their current employment during the term of the
agreement and we fail to hire replacements acceptable to the lenders;
and
|
|
·
|
trigger
an event of default, if any event or condition occurs which causes any
obligation or liability of more than $1.0 million to become due prior to
its scheduled maturity or any monetary default under our restructured debt
obligations if the amount of such obligation is at least $1.0
million.
|
|
·
|
extend
the maturity date of the senior credit agreement to be co-terminus with
the maturity date of the secured credit facilities with the participating
secured lenders (as they may be further extended until March 16, 2012, as
described above);
|
|
·
|
increase
the cash interest rate under the senior credit agreement to LIBOR plus
3.00% per annum (from LIBOR plus 1.75%), plus an accrual rate of 7.20% per
annum less the cash interest rate;
|
|
·
|
initiate
quarterly amortization equal to the greater of: (i) $5.0 million per annum
and (ii) 25% of the annual cash flow received from our currently
unencumbered collateralized debt obligation
interests;
|
|
·
|
pledge
our unencumbered collateralized debt obligation interests and provide a
negative pledge with respect to certain other assets;
and
|
|
·
|
replace
all existing financial covenants with substantially similar covenants and
default provisions to those described above with respect to the
participating secured facilities.
|
Originations(1)
|
||||
(in
millions)
|
Six
months ended
June
30, 2009
|
Year
ended
December
31, 2008
|
||
Balance
sheet
|
$―
|
$48
|
||
Investment
management
|
17
|
426
|
||
Total
originations
|
$17
|
$474
|
(1)
|
Includes
total commitments, both funded and unfunded, net of any related purchase
discounts.
|
Interest
Earning Assets
|
|||||||||
(in
millions)
|
June
30, 2009
|
December
31, 2008
|
|||||||
Book
Value
|
Yield(1)
|
Book
Value
|
Yield(1)
|
||||||
Securities
|
$827
|
6.63%
|
$852
|
6.87%
|
|||||
Loans
|
1,645
|
3.55%
|
1,790
|
4.09%
|
|||||
Total
/ Weighted Average
|
$2,472
|
4.58%
|
$2,642
|
4.99%
|
(1)
|
Yield
on floating rate assets assumes LIBOR at June 30, 2009 and December 31,
2008, of 0.31% and 0.44%, respectively. For $37.9 million face value
($33.7 million book value) of our securities, calculations use an
effective rate based on cash
received.
|
Equity
Investments
|
||||||||
(in
thousands)
|
June
30,
|
December
31,
|
||||||
2009
|
2008
|
|||||||
Fund
III
|
$383
|
$597 | ||||||
CTOPI
|
2,101 | 1,782 | ||||||
Capitalized
costs/other
|
3 | 4 | ||||||
Total
|
$2,487 | $2,383 |
Portfolio
Performance(1)
|
||||
(in
millions, except for number of investments)
|
June
30, 2009
|
December
31, 2008
|
||
Interest
earning assets ($ / #)
|
$2,472
/ 143
|
$2,643
/ 150
|
||
Real
estate owned, net (2)
($ / #)
|
$7
/ 1
|
$10
/ 1
|
||
Percentage
of interest earning assets
|
0.3%
|
0.4%
|
||
Loans
with reserves
|
||||
Performing
loans ($ / #)
|
$9
/ 1
|
$12
/ 2
|
||
Non-performing
loans ($ / #)
|
$55
/ 10
|
$12
/ 3
|
||
Total
($ / #)
|
$64
/ 11
|
$24
/ 5
|
||
Percentage
of interest earning assets
|
2.6%
|
0.9%
|
||
Watch
List Loans (3)
|
||||
Book
value ($ / #)
|
$526
/ 18
|
$383
/ 17
|
||
Percentage
of interest earning assets
|
21.3%
|
14.5%
|
||
Watch
List Securities (4)
|
||||
Book
value ($ / #)
|
$243
/ 30
|
N/A
|
||
Percentage
of interest earning assets
|
9.9%
|
N/A
|
(1)
|
Portfolio
statistics exclude Loans classified as
held-for-sale.
|
|
(2)
|
Includes
one Loan which has been transferred to Real Estate Held-for-Sale with a
gross asset balance of $11.3 million, against which we have recorded a
cumulative $4.2 million and $2.0 million impairment as of June 30, 2009
and December 31, 2008, respectively.
|
|
(3)
|
Includes
one additional Loan with a book value of $6.6 million that has been
retroactively classified as a Watch List Loan as of December 31, 2008
based upon revised criteria. Watch List Loans exclude Loans against which
we have recorded a reserve, and Real Estate
Owned.
|
|
(4) |
Includes
securities with other-than-temporary impairments of $20.0 million as of
June 30, 2009. We did not begin using this performance measure until the
second quarter of 2009. Accordingly, equivalent amounts are not presented
as of December 31, 2008.
|
Rating
Activity(1)
|
|||
Six
months ended
June
30, 2009
|
Year
ended
December
31, 2008
|
||
Securities
Upgraded
|
1
|
6
|
|
Securities
Downgraded
|
14
|
13
|
(1)
|
Represents
activity from any of Fitch Ratings, Standard & Poor’s and/or Moody’s
Investors
Service.
|
Capital
Structure(1)
|
||||
(in
millions)
|
June
30, 2009
|
December
31, 2008
|
||
Repurchase
obligations and secured debt(2)
|
$503
|
$699
|
||
Collateralized
debt obligations(2)
|
1,132
|
1,155
|
||
Senior
credit facility(2)
|
100
|
100
|
||
Junior
subordinated notes(2)
(3)
|
144
|
129
|
||
Total
interest bearing liabilities
|
$1,879
|
$2,083
|
||
Weighted
average effective cost of debt(4)
|
3.62%
|
3.48%
|
||
Shareholders’
equity
|
$332
|
$401
|
||
Ratio
of interest bearing liabilities to shareholders’ equity
|
5.7:1
|
5.2:1
|
(1)
|
Excludes
participations sold.
|
|
(2)
|
Amounts
represent principal balances as of June 30, 2009 and December 31,
2008.
|
|
(3)
|
During
the first quarter of 2009, we exchanged certain of our legacy junior
subordinated notes with a face value of $103.1 million for new junior
subordinated notes with a face value of $118.6 million, as described in
Note 9 to the consolidated financial statements. In connection with this
transaction, we also eliminated $3.2 million of our ownership interests in
the legacy statutory trusts. In the second quarter of 2009, we exchanged
the remaining legacy junior subordinated notes with a face value of $21.9
million for new junior subordinated notes with a face value of $25.2
million, as discussed in Note 9 to the consolidated financial statements.
In connection with this transaction, we also eliminated $678,000 of our
ownership interests in the legacy statutory
trusts.
|
|
(4)
|
Floating
rate debt obligations assume LIBOR at June 30, 2009 and December 31, 2008,
of 0.31% and 0.44%, respectively. Includes the effective cost of interest
rate swaps of 1.14% and 1.01% as of June 30, 2009 and December 31, 2008,
respectively.
|
Interest
Bearing Liabilities
|
||||
June
30, 2009
|
December
31, 2008
|
|||
Weighted
average life (years)
|
4.5
|
4.2
|
||
%
Recourse
|
39.7%
|
44.5%
|
||
%
Subject to mark-to-market provisions
|
26.8%
|
33.5%
|
Repurchase
Agreements and Secured Debt
|
|||
($
in millions)
|
June
30, 2009
|
December
31, 2008
|
|
Counterparties
|
3
|
6
|
|
Outstanding
repurchase borrowings and secured debt
|
$503
|
$699
|
|
All-in
cost
|
L +
1.66%
|
L +
1.66%
|
Collateralized
Debt Obligations
|
||||||||
(in
millions)
|
||||||||
June
30, 2009
|
December
31, 2008
|
|||||||
Issuance
Date
|
Book
Value
|
All-in
Cost(1)
|
Book
Value
|
All-in
Cost(1)
|
||||
CDO
I(2)
|
7/20/04
|
$247
|
1.21%
|
$252
|
1.52%
|
|||
CDO
II (2)
|
3/15/05
|
295
|
1.06%
|
299
|
1.18%
|
|||
CDO
III
|
8/04/05
|
257
|
5.51%
|
257
|
5.27%
|
|||
CDO
IV(2)
|
3/15/06
|
335
|
1.03%
|
348
|
1.15%
|
|||
Total
|
$1,134
|
2.08%
|
$1,156
|
2.15%
|
(1)
|
Includes
amortization of premiums and issuance
costs.
|
|
(2)
|
Floating
rate CDO liabilities assume LIBOR at June 30, 2009 and December 31, 2008
of 0.31% and 0.44%,
respectively.
|
Shareholders’
Equity
|
||||
June
30, 2009
|
December
31, 2008
|
|||
Book
value (in millions)
|
$332
|
$401
|
||
Shares:
|
||||
Class
A common stock
|
21,754,269
|
21,740,152
|
||
Restricted
stock
|
299,073
|
331,197
|
||
Stock
units
|
296,404
|
215,451
|
||
Warrants
& Options(1)
|
―
|
―
|
||
Total
|
22,349,746
|
22,286,800
|
||
Book
value per share
|
$14.85
|
$18.01
|
(1)
|
Dilutive
shares issuable upon the exercise of outstanding warrants and options
assuming a June 30, 2009 and December 31, 2008 stock price, respectively,
and the treasury stock
method.
|
Interest
Rate Exposure
|
||||||||
(in
millions except for weighted average life)
|
June
30, 2009
|
December
31, 2008
|
||||||
Value
exposure to interest rates(1)
|
||||||||
Fixed
rate assets
|
$842 | $880 | ||||||
Fixed
rate debt
|
(412 | ) | (395 | ) | ||||
Interest
rate swaps
|
(460 | ) | (466 | ) | ||||
Net
fixed rate exposure
|
($30 | ) | $19 | |||||
Weighted
average life (fixed rate assets)
|
4.4
yrs
|
4.9
yrs
|
||||||
Weighted
average coupon (fixed rate assets)
|
6.91 | % | 6.90 | % | ||||
Cash
flow exposure to interest rates(1)
|
||||||||
Floating
rate assets
|
$1,791 | $1,949 | ||||||
Floating
rate debt less cash
|
(1,740 | ) | (1,931 | ) | ||||
Interest
rate swaps
|
460 | 466 | ||||||
Net
floating rate exposure
|
$511 | $484 | ||||||
Weighted
average life (floating rate assets)
|
2.4
yrs
|
2.9
yrs
|
||||||
Weighted
average coupon (floating rate assets)
(2)
|
3.29 | % | 3.52 | % | ||||
Net
income impact from 100 bps change in LIBOR
|
$5.1 | $4.8 |
(1)
|
All
values are in terms of face or notional amounts, and include loans
classified as held-for-sale.
|
|
(2)
|
Weighted
average coupon assumes LIBOR at June 30, 2009 and December 31, 2008 of
0.31% and 0.44%, respectively. For $37.9 million face value ($33.7 million
book value) of our securities, calculations use an effective rate based on
cash
received.
|
|
·
|
CT
High Grade Partners II, LLC, or CT High Grade II, is currently investing
capital. The fund closed in June 2008 with $667 million of commitments
from two institutional investors. Currently, $519 million of committed
equity remains undrawn. The fund targets senior debt opportunities in the
commercial real estate debt sector and does not employ leverage. The
fund’s investment period expires in May 2010. We earn a base management
fee of 0.40% per annum on invested
capital.
|
|
·
|
CT
Opportunity Partners I, LP, or CTOPI, is currently investing capital. The
fund held its final closing in July 2008 with $540 million in total equity
commitments. Currently, $415 million of committed equity remains undrawn.
We have a $25 million commitment to invest in the fund ($6 million
currently funded, $19 million unfunded) and entities controlled by the
chairman of our board have committed to invest $20 million. The fund
targets opportunistic investments in commercial real estate, specifically
high yield debt, equity and hybrid instruments, as well as non-performing
and sub-performing loans and securities. The fund’s investment period
expires in December 2010. We earn base management fees as the investment
manager of CTOPI (1.60% per annum of total equity commitments during the
investment period and of invested capital thereafter). In addition, we
earn net incentive management fees of 17.7% of profits after a 9%
preferred return and a 100% return of
capital.
|
|
·
|
CT
High Grade MezzanineSM,
or CT High Grade is no longer investing capital (its investment period
expired in July 2008). The fund closed in November 2006, with a single,
related party investor committing $250 million, which was subsequently
increased to $350 million in July 2007. This separate account targeted
lower risk subordinate debt investments without leverage. We earn
management fees of 0.25% per annum on invested assets. In July 2007, we
upsized the account by $100 million to $350
million.
|
|
·
|
CT
Large Loan 2006, Inc., or CT Large Loan, is no longer investing capital
(its investment period expired in May 2008). The fund closed in May 2006
with total equity commitments of $325 million from eight third-party
investors. We earn management fees of 0.75% per annum of invested assets
(capped at 1.5% on invested
equity).
|
|
·
|
CTX
Fund I, L.P., or CTX Fund, is no longer investing capital. CTX is a single
investor fund designed to invest in collateralized debt obligations, or
CDOs, sponsored, but not issued, by us. We do not earn fees on the CTX
Fund, however, we earn CDO management fees from the CDOs in which the CTX
Fund invests.
|
|
·
|
CT
Mezzanine Partners III, Inc., or Fund III, is no longer investing capital.
The fund was a vehicle we co-sponsored with a joint venture partner. The
fund is currently liquidating in the ordinary course. We earn 100% of base
management fees of 1.42% of invested capital, and we split incentive
management fees with our partner, which receives 37.5% of the fund’s
incentive management fees.
|
Investment
Management Mandates, as of June 30, 2009
|
|||||||||||||||
(in
millions)
|
Incentive
Management Fee
|
||||||||||||||
Total
|
Total
Capital
|
Co-
|
Base
|
Company
|
Employee
|
||||||||||
Type
|
Investments(1)
|
Commitments
|
Investment
%
|
Management
Fee
|
%
|
%
|
|||||||||
Investing:
|
|||||||||||||||
CT
High Grade II
|
Fund
|
$164
|
$667
|
—
|
0.40%
(Assets)
|
N/A
|
N/A
|
||||||||
CTOPI
|
Fund
|
287
|
540
|
4.63%
|
(2)
|
1.60%
(Equity)
|
100%(3)
|
—%(4)
|
|||||||
|
|
||||||||||||||
Liquidating:
|
|
|
|||||||||||||
CT
High Grade
|
Sep.
Acc.
|
344
|
350
|
—
|
0.25%
(Assets)
|
N/A
|
N/A
|
||||||||
CT
Large Loan
|
Fund
|
275
|
325
|
—
|
(5)
|
0.75%
(Assets)(6)
|
N/A
|
N/A
|
|||||||
CTX
Fund
|
Fund
|
8
|
10
|
—
|
(5)
|
(Assets)(7)
|
100%(7)
|
—%(7)
|
|||||||
Fund
III
|
Fund
|
44
|
425
|
4.71%
|
1.42%
(Equity)
|
57%(8)
|
43%(4)
|
|
||
(1)
|
Represents
total investments, on a cash basis, as of
period-end.
|
|
(2)
|
We
have committed to invest $25 million in
CTOPI.
|
|
(3)
|
CTIMCO
earns net incentive management fees of 17.7% of profits after a 9%
preferred return on capital and a 100% return of capital, subject to a
catch-up.
|
|
(4) |
Portions
of the Fund III incentive management fees received by us have been
allocated to our employees as long-term performance awards. We have not
allocated any of the CTOPI incentive management fee to employees as of
June 30, 2009.
|
|
(5) |
We
co-invest on a pari passu, asset by asset basis with CT Large Loan and CTX
Fund.
|
|
(6) |
Capped
at 1.5% of equity.
|
|
(7) |
CTIMCO
serves as collateral manager of the CDOs in which the CTX Fund invests and
CTIMCO earns base and incentive management fees as CDO collateral manager.
As of June 30, 2009, we manage one such $500 million CDO and earn base
management fees of 0.10% of assets and have the potential to earn
incentive management fees.
|
|
(8) |
CTIMCO
(62.5%) and our co-sponsor (37.5%) earn net incentive management fees of
18.9% of profits after a 10% preferred return on capital and a 100% return
of capital, subject to a catch-up.
|
Comparison
of Results of Operations: Three Months Ended June 30, 2009 vs. June 30,
2008
|
||||||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||
2009
|
2008
|
$
Change
|
%
Change
|
|||||||||||||
Income
from loans and other investments:
|
||||||||||||||||
Interest
and related income
|
$30,575 | $49,030 | ($18,455 | ) | (37.6 | %) | ||||||||||
Less:
Interest and related expenses
|
20,244 | 32,799 | (12,555 | ) | (38.3 | %) | ||||||||||
Income
from loans and other investments, net
|
10,331 | 16,231 | (5,900 | ) | (36.4 | %) | ||||||||||
Other
revenues:
|
||||||||||||||||
Management
fees from affiliates
|
2,929 | 4,154 | (1,225 | ) | (29.5 | %) | ||||||||||
Servicing
fees
|
155 | 44 | 111 | 252.3 | % | |||||||||||
Other
interest income
|
8 | 638 | (630 | ) | (98.7 | %) | ||||||||||
Total
other revenues
|
3,092 | 4,836 | (1,744 | ) | (36.1 | %) | ||||||||||
Other
expenses:
|
||||||||||||||||
General
and administrative
|
4,503 | 6,208 | (1,705 | ) | (27.5 | %) | ||||||||||
Depreciation
and amortization
|
7 | 22 | (15 | ) | (68.2 | %) | ||||||||||
Total
other expenses
|
4,510 | 6,230 | (1,720 | ) | (27.6 | %) | ||||||||||
Total
other-than-temporary impairments on securities
|
(4,000 | ) | — | (4,000 | ) | N/A | ||||||||||
Impairment
of goodwill
|
(2,235 | ) | — | (2,235 | ) | N/A | ||||||||||
Impairment
on real estate held-for-sale
|
(899 | ) | — | (899 | ) | N/A | ||||||||||
Net
impairments recognized in earnings
|
(7,134 | ) | — | (7,134 | ) | N/A | ||||||||||
Provision
for loan losses
|
(7,730 | ) | (56,000 | ) | 48,270 | (86.2 | %) | |||||||||
Gain
on extinguishment of debt
|
— | 6,000 | (6,000 | ) | (100.0 | %) | ||||||||||
Gain
on sale of investments
|
— | 374 | (374 | ) | (100.0 | %) | ||||||||||
(Loss)/income
from equity investments
|
(445 | ) | 69 | (514 | ) | N/A | ||||||||||
Loss
before income taxes
|
(6,396 | ) | (34,720 | ) | 28,324 | (81.6 | %) | |||||||||
Income
tax provision
|
— | 98 | (98 | ) | (100.0 | %) | ||||||||||
Net
loss
|
($6,396 | ) | ($34,818 | ) | $28,422 | (81.6 | %) | |||||||||
Net
loss per share - diluted
|
($0.29 | ) | ($1.59 | ) | $1.30 | (81.8 | %) | |||||||||
Dividend
per share
|
$— | $0.80 | ($0.80 | ) | (100.0 | %) | ||||||||||
Average
LIBOR
|
0.37 | % | 2.59 | % | (2.22 | %) | (85.8 | %) |
Comparison
of Results of Operations: Six Months Ended June 30, 2009 vs. June 30,
2008
|
||||||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||
2009
|
2008
|
$
Change
|
%
Change
|
|||||||||||||
Income
from loans and other investments:
|
||||||||||||||||
Interest
and related income
|
$63,814 | $105,585 | ($41,771 | ) | (39.6 | %) | ||||||||||
Less:
Interest and related expenses
|
41,512 | 70,743 | (29,231 | ) | (41.3 | %) | ||||||||||
Income
from loans and other investments, net
|
22,302 | 34,842 | (12,540 | ) | (36.0 | %) | ||||||||||
Other
revenues:
|
||||||||||||||||
Management
fees from affiliates
|
5,809 | 6,350 | (541 | ) | (8.5 | %) | ||||||||||
Servicing
fees
|
1,334 | 222 | 1,112 | 500.9 | % | |||||||||||
Other
interest income
|
136 | 825 | (689 | ) | (83.5 | %) | ||||||||||
Total
other revenues
|
7,279 | 7,397 | (118 | ) | (1.6 | %) | ||||||||||
Other
expenses:
|
||||||||||||||||
General
and administrative
|
12,959 | 13,108 | (149 | ) | (1.1 | %) | ||||||||||
Depreciation
and amortization
|
14 | 127 | (113 | ) | (89.0 | %) | ||||||||||
Total
other expenses
|
12,973 | 13,235 | (262 | ) | (2.0 | %) | ||||||||||
Total
other-than-temporary impairments on securities
|
(18,646 | ) | — | (18,646 | ) | N/A | ||||||||||
Portion
of other-than-temporary impairments on securities
recognized
in other comprehensive income
|
5,624 | — | 5,624 | N/A | ||||||||||||
Impairment
of goodwill
|
(2,235 | ) | — | (2,235 | ) | N/A | ||||||||||
Impairment
on real estate held-for-sale
|
(2,233 | ) | — | (2,233 | ) | N/A | ||||||||||
Net
impairments recognized in earnings
|
(17,490 | ) | — | (17,490 | ) | N/A | ||||||||||
Provision
for loan losses
|
(66,493 | ) | (56,000 | ) | (10,493 | ) | 18.7 | % | ||||||||
Valuation
allowance on loans held-for-sale
|
(10,363 | ) | — | (10,363 | ) | N/A | ||||||||||
Gain
on extinguishment of debt
|
— | 6,000 | (6,000 | ) | (100.0 | %) | ||||||||||
Gain
on sale of investments
|
— | 374 | (374 | ) | (100.0 | %) | ||||||||||
(Loss)/income
from equity investments
|
(2,211 | ) | 76 | (2,287 | ) | N/A | ||||||||||
Loss
before income taxes
|
(79,949 | ) | (20,546 | ) | (59,403 | ) | 289.1 | % | ||||||||
Income
tax benefit
|
(408 | ) | (501 | ) | 93 | (18.6 | %) | |||||||||
Net
loss
|
($79,541 | ) | ($20,045 | ) | ($59,496 | ) | 296.8 | % | ||||||||
Net
loss per share - diluted
|
($3.56 | ) | ($1.01 | ) | ($2.55 | ) | 252.5 | % | ||||||||
Dividend
per share
|
$— | $1.60 | ($1.60 | ) | (100.0 | %) | ||||||||||
Average
LIBOR
|
0.42 | % | 2.95 | % | (2.53 | %) | (85.9 | %) |
June
30, 2009
|
March
16, 2009
|
March
16, 2009 to
June 30, 2009 Change |
||||||||||||||||||||||||||||||
Participating
Secured Lender |
Collateral
Balance (1) |
Debt
Obligation (A) |
Collateral
Balance (1) |
Debt
Obligation |
Collateral
Balance (1) |
Debt
Obligation |
Target
Debt
Obligation (B) |
Additional
Debt Reduction Required (A-B) (2) |
||||||||||||||||||||||||
JPMorgan
(3)
|
$ | 529,438 | $ | 288,734 | $ | 559,548 | $ | 334,968 | $ | (30,110 | ) | $ | (46,234 | ) | $ | 267,938 | $ | 20,796 | ||||||||||||||
Morgan
Stanley
|
408,038 | 170,147 | 411,342 | 181,350 | (3,304 | ) | (11,203 | ) | 145,080 | 25,067 | ||||||||||||||||||||||
Citigroup
|
77,648 | 44,377 | 99,590 | 63,830 | (21,942 | ) | (19,453 | ) | 50,894 | N/A | ||||||||||||||||||||||
$ | 1,015,124 | $ | 503,258 | $ | 1,070,480 | $ | 580,148 | $ | (55,356 | ) | $ | (76,890 | ) | $ | 463,912 | $ | 45,863 |
(1)
|
Represents
the aggregate outstanding principal balance of collateral as of each
respective period.
|
|
(2)
|
Represents
the amount by which we need to reduce our debt obligations by March 15,
2010.
|
|
(3)
|
The
additional debt reduction required under our agreement with JPMorgan is
subject to adjustment based on changes in the fair value of certain of our
interest rate swap agreements with JPMorgan between June 30, 2009 and
March 15, 2010. Amount noted above assumes no change in the fair value of
such derivatives as of June 30,
2009.
|
Contractual
Obligations(1)
|
|||||||||
(in
millions)
|
|||||||||
Payments
due by period
|
|||||||||
Total
|
Less
than
1 year |
1-3
years
|
3-5
years
|
More
than
5 years |
|||||
Long-term
debt obligations
|
|||||||||
Repurchase
obligations
|
$503
|
$46
|
$457
|
$—
|
$—
|
||||
Collateralized
debt obligations
|
1,132
|
—
|
—
|
—
|
1,132
|
||||
Senior
credit facility
|
100
|
5
|
95
|
—
|
|
—
|
|||
Junior
subordinated notes
|
144
|
—
|
|
—
|
—
|
|
144
|
||
Total
long-term debt obligations
|
1,879
|
51
|
552
|
—
|
1,276
|
||||
Unfunded
commitments
|
|||||||||
Loans
|
14
|
2
|
10
|
2
|
—
|
||||
Equity
investments
|
19
|
—
|
19
|
—
|
—
|
||||
Total
unfunded commitments
|
33
|
2
|
29
|
2
|
—
|
||||
Operating
lease obligations
|
13
|
1
|
3
|
3
|
6
|
||||
Total
|
$1,925
|
$54
|
$584
|
$5
|
$1,282
|
(1)
|
We
are also subject to interest rate swaps for which we cannot estimate
future payments
due.
|
Expected
Maturity/Repayment Dates (1)
|
|||||||||||||||
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
Total
|
Fair
Value
|
||||||||
(in
thousands)
|
|||||||||||||||
Assets:
|
|||||||||||||||
Securities
|
|||||||||||||||
Fixed
rate
|
$34,282
|
$17,803
|
$96,742
|
$107,358
|
$177,707
|
$256,394
|
$690,286
|
$468,983
|
|||||||
Interest
rate(2)
|
6.62%
|
7.28%
|
7.37%
|
7.04%
|
6.85%
|
6.12%
|
6.68%
|
||||||||
Floating
rate
|
$20,810
|
$18,241
|
$17,995
|
$90,274
|
$13,500
|
$1,584
|
$162,404
|
$56,133
|
|||||||
Interest
rate(2)(3)
|
3.11%
|
2.10%
|
1.90%
|
4.63%
|
7.49%
|
3.17%
|
4.07%
|
||||||||
Loans
receivable, net
|
|||||||||||||||
Fixed
rate
|
$6,034
|
$1,283
|
$27,831
|
$1,160
|
$1,246
|
$94,273
|
$131,827
|
$121,539
|
|||||||
Interest
rate(2)
|
8.51%
|
8.05%
|
8.46%
|
7.79%
|
7.78%
|
7.86%
|
8.02%
|
||||||||
Floating
rate
|
$35,664
|
$135,573
|
$721,437
|
$524,020
|
$89,905
|
$11,358
|
$1,517,957
|
$1,104,420
|
|||||||
Interest
rate(2)
|
4.12%
|
3.86%
|
2.69%
|
3.40%
|
4.04%
|
2.27%
|
3.15%
|
||||||||
Loans
held-for-sale
|
|||||||||||||||
Floating
rate
|
$—
|
$—
|
$—
|
$14,444
|
$—
|
$—
|
$14,444
|
$12,000
|
|||||||
Interest
rate(2)
|
—
|
—
|
—
|
4.81%
|
—
|
—
|
4.81%
|
||||||||
Debt
Obligations:
|
|||||||||||||||
Repurchase
obligations
|
|||||||||||||||
Floating
rate (4)
|
$—
|
$45,863
|
$457,395
|
$—
|
$—
|
$—
|
$503,258
|
$503,258
|
|||||||
Interest
rate(2)
|
—
|
2.03%
|
1.93%
|
—
|
—
|
—
|
1.94%
|
||||||||
CDOs
|
|||||||||||||||
Fixed
rate
|
$6,709
|
$4,801
|
$42,299
|
$59,142
|
$112,164
|
$43,018
|
$268,133
|
$166,201
|
|||||||
Interest
rate(2)
|
5.54%
|
5.20%
|
5.16%
|
5.16%
|
5.19%
|
5.97%
|
5.31%
|
||||||||
Floating
rate
|
$52,769
|
$56,913
|
$203,518
|
$347,357
|
$64,391
|
$139,213
|
$864,161
|
$250,003
|
|||||||
Interest
rate(2)
|
0.86%
|
0.82%
|
0.84%
|
1.02%
|
0.99%
|
1.22%
|
0.99%
|
||||||||
Senior
credit facility
|
|||||||||||||||
Fixed
rate
|
$2,500
|
$5,000
|
$92,198
|
$—
|
$—
|
$—
|
$99,698
|
$47,329
|
|||||||
Interest
rate(2)
|
3.31%
|
3.31%
|
3.31%
|
—
|
—
|
—
|
3.31%
|
||||||||
Junior
subordinated notes
|
|||||||||||||||
Fixed
rate
|
$—
|
$—
|
$—
|
$—
|
$—
|
$143,753
|
$143,753
|
$17,479
|
|||||||
Interest
rate(2)
(5)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||
Participations
sold
|
|||||||||||||||
Floating
rate
|
$—
|
$—
|
$91,139
|
$201,471
|
$—
|
$—
|
$292,610
|
$202,954
|
|||||||
Interest
rate(2)
|
—
|
—
|
2.17%
|
3.75%
|
—
|
—
|
3.26%
|
||||||||
Derivative
Financial Instruments:
|
|||||||||||||||
Interest
rate swaps
|
|||||||||||||||
Notional
amounts
|
$42,668
|
$13,383
|
$46,400
|
$81,886
|
$39,947
|
$235,529
|
$459,813
|
$(33,823)
|
|||||||
Fixed
pay rate(2)
|
4.73%
|
5.06%
|
4.65%
|
4.98%
|
4.97%
|
5.06%
|
4.96%
|
||||||||
Floating
receive rate(2)
|
0.32%
|
0.32%
|
0.32%
|
0.32%
|
0.32%
|
0.32%
|
0.32%
|
(1)
|
Expected
repayment dates and amounts are based on contractual agreements as of June
30, 2009, and do not give effect to transactions which may be expected to
occur in the future.
|
|
(2)
|
Represents
weighted average rates where applicable. Floating rates are based on LIBOR
of 0.31%, which is the rate as of June 30,
2009.
|
|
(3)
|
For
$37.9 million face value ($33.7 million book value) of our securities,
calculations use an effective rate based on cash
received.
|
|
(4) |
As
discussed in Note 16 to the consolidated financial statements, due to the
unique nature of our restructured repurchase obligations and secured debt,
it is not practicable to estimate a fair value for these instruments.
Accordingly, the amount included in the table above represents the current
principal amount of these obligations.
|
|
(5) |
The
coupon on our junior subordinated notes will remain at 1.00% per annum
through April 29, 2012, increase to 7.23% per annum for the period from
April 30, 2012 through April 29, 2016 and then convert to a floating
interest rate of three-month LIBOR + 2.44% per annum through maturity in
2036.
|
ITEM
1:
|
Legal
Proceedings
|
ITEM 1A:
|
Risk
Factors
|
ITEM 2:
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
ITEM 3:
|
Defaults
Upon Senior Securities
|
ITEM
4:
|
Submission of Matters to a Vote
of Security Holders
|
Proposal
|
Votes
in Favor
|
Votes
Opposed
|
Abstentions
(Withheld)
|
Broker
Non-Votes |
Proposal
1
|
||||
Samuel
Zell
|
17,729,815
|
N/A
|
1,309,907
|
–
|
Thomas
E. Dobrowski
|
18,036,446
|
N/A
|
1,003,276
|
–
|
Martin
L. Edelman
|
17,779,591
|
N/A
|
1,260,131
|
–
|
Craig
M. Hatkoff
|
18,043,304
|
N/A
|
996,418
|
–
|
Edward
S. Hyman
|
18,043,149
|
N/A
|
996,573
|
–
|
John
R. Klopp
|
18,027,491
|
N/A
|
1,012,231
|
–
|
Henry
N. Nassau
|
18,035,592
|
N/A
|
1,004,130
|
–
|
Joshua
A. Polan
|
18,020,421
|
N/A
|
1,019,301
|
–
|
Lynne
B. Sagalyn
|
18,026,864
|
N/A
|
1,012,858
|
–
|
Proposal
2
|
18,944,804
|
61,777
|
33,141
|
ITEM 5:
|
Other
Information
|
ITEM 6:
|
Exhibits
|
3.1a
|
Charter
of the Capital Trust, Inc. (filed as Exhibit 3.1.a to Capital
Trust, Inc.’s Current Report on Form 8-K (File No. 1-14788)
filed on April 2, 2003 and incorporated herein by
reference).
|
|
3.1b
|
Certificate
of Notice (filed as Exhibit 3.1 to Capital Trust, Inc.’s Current
Report on Form 8-K (File No. 1-14788) filed on February 27,
2007 and incorporated herein by reference).
|
|
3.2
|
Second
Amended and Restated By-Laws of Capital Trust, Inc. (filed as
Exhibit 3.2 to Capital Trust, Inc.’s Current Report on
Form 8-K (File No. 1-4788) filed on February 27, 2007 and
incorporated herein by reference).
|
|
·
|
10.1
|
Termination
and Release Agreement, dated as of April 6, 2009, by and between Capital
Trust, Inc. and Lehman Commercial Paper Inc.
|
·
|
31.1
|
Certification
of John R. Klopp, Chief Executive Officer, as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
|
·
|
31.2
|
Certification
of Geoffrey G. Jervis, Chief Financial Officer, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|
·
|
32.1
|
Certification
of John R. Klopp, Chief Executive Officer, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
·
|
32.2
|
Certification
of Geoffrey G. Jervis, Chief Financial Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|
·
|
99.1
|
Updated
Risk Factors from our Annual Report on Form 10-K for the year ended
December 31, 2008, filed on March 16, 2009 with the Securities and
Exchange Commission.
|
·
|
Filed
herewith
|
CAPITAL
TRUST, INC.
|
|||
August 4, 2009
|
|
/s/ John R. Klopp | |
Date
|
John R. Klopp | ||
Chief
Executive Officer
|
|||
August 4, 2009
|
|
/s/ Geoffrey G. Jervis | |
Date
|
Geoffrey G. Jervis | ||
Chief
Financial Officer
|
|||