(Mark One) | |
ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2013 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Maryland (State or other jurisdiction of incorporation or organization) | 95-6881527 (I.R.S. Employer Identification Number) | |
1114 Avenue of the Americas, 39th Floor | ||
New York, NY (Address of principal executive offices) | 10036 (Zip code) |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Page | ||
As of | |||||||
March 31, 2013 | December 31, 2012 | ||||||
ASSETS | |||||||
Real estate | |||||||
Real estate, at cost | $ | 3,190,343 | $ | 3,226,648 | |||
Less: accumulated depreciation | (405,539 | ) | (427,625 | ) | |||
Real estate, net | $ | 2,784,804 | $ | 2,799,023 | |||
Real estate available and held for sale | 599,061 | 635,865 | |||||
$ | 3,383,865 | $ | 3,434,888 | ||||
Loans receivable, net | 1,582,656 | 1,829,985 | |||||
Other investments | 403,759 | 398,843 | |||||
Cash and cash equivalents | 468,394 | 256,344 | |||||
Restricted cash | 28,478 | 36,778 | |||||
Accrued interest and operating lease income receivable, net | 14,253 | 15,226 | |||||
Deferred operating lease income receivable | 87,414 | 84,735 | |||||
Deferred expenses and other assets, net | 108,299 | 93,990 | |||||
Total assets | $ | 6,077,118 | $ | 6,150,789 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Accounts payable, accrued expenses and other liabilities | $ | 117,227 | $ | 132,460 | |||
Debt obligations, net | 4,494,637 | 4,691,494 | |||||
Total liabilities | $ | 4,611,864 | $ | 4,823,954 | |||
Commitments and contingencies | — | — | |||||
Redeemable noncontrolling interests | 13,162 | 13,681 | |||||
Equity: | |||||||
iStar Financial Inc. shareholders' equity: | |||||||
Preferred Stock Series D, E, F, G and I, liquidation preference $25.00 per share (see Note 11) | 22 | 22 | |||||
Convertible Preferred Stock Series J, liquidation preference $50.00 per share (see Note 11) | 4 | — | |||||
High Performance Units | 9,800 | 9,800 | |||||
Common Stock, $0.001 par value, 200,000 shares authorized, 143,969 issued and 85,052 outstanding at March 31, 2013 and 142,699 issued and 83,782 outstanding at December 31, 2012 | 144 | 143 | |||||
Additional paid-in capital | 4,019,850 | 3,832,780 | |||||
Retained earnings (deficit) | (2,403,291 | ) | (2,360,647 | ) | |||
Accumulated other comprehensive income (loss) (see Note 11) | (1,464 | ) | (1,185 | ) | |||
Treasury stock, at cost, $0.001 par value, 58,917 shares at March 31, 2013 and December 31, 2012 | (241,969 | ) | (241,969 | ) | |||
Total iStar Financial Inc. shareholders' equity | $ | 1,383,096 | $ | 1,238,944 | |||
Noncontrolling interests | 68,996 | 74,210 | |||||
Total equity | $ | 1,452,092 | $ | 1,313,154 | |||
Total liabilities and equity | $ | 6,077,118 | $ | 6,150,789 |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Revenues: | |||||||
Operating lease income | $ | 58,473 | $ | 53,123 | |||
Interest income | 24,667 | 37,203 | |||||
Other income | 11,393 | 10,756 | |||||
Total revenues | $ | 94,533 | $ | 101,082 | |||
Costs and expenses: | |||||||
Interest expense | $ | 71,566 | $ | 85,344 | |||
Real estate expense | 37,916 | 35,068 | |||||
Depreciation and amortization | 17,389 | 16,168 | |||||
General and administrative | 21,848 | 22,845 | |||||
Provision for loan losses | 10,206 | 17,500 | |||||
Impairment of assets | — | 749 | |||||
Other expense | 5,625 | 453 | |||||
Total costs and expenses | $ | 164,550 | $ | 178,127 | |||
Income (loss) before earnings from equity method investments and other items | $ | (70,017 | ) | $ | (77,045 | ) | |
Gain (loss) on early extinguishment of debt, net | (9,541 | ) | 1,704 | ||||
Earnings from equity method investments | 21,678 | 34,786 | |||||
Income (loss) from continuing operations before income taxes | $ | (57,880 | ) | $ | (40,555 | ) | |
Income tax expense | (4,075 | ) | (1,271 | ) | |||
Income (loss) from continuing operations(1) | $ | (61,955 | ) | $ | (41,826 | ) | |
Income (loss) from discontinued operations | 961 | (13,361 | ) | ||||
Gain from discontinued operations | 5,044 | 2,406 | |||||
Income from sales of residential property | 23,697 | 6,733 | |||||
Net income (loss) | $ | (32,253 | ) | $ | (46,048 | ) | |
Net (income) loss attributable to noncontrolling interests | 189 | (25 | ) | ||||
Net income (loss) attributable to iStar Financial Inc. | $ | (32,064 | ) | $ | (46,073 | ) | |
Preferred dividends | (10,580 | ) | (10,580 | ) | |||
Net (income) loss allocable to HPU holders and Participating Security holders(2)(3) | 1,381 | 1,861 | |||||
Net income (loss) allocable to common shareholders | $ | (41,263 | ) | $ | (54,792 | ) | |
Per common share data(1): | |||||||
Income (loss) attributable to iStar Financial Inc. from continuing operations: | |||||||
Basic | $ | (0.56 | ) | $ | (0.54 | ) | |
Diluted | $ | (0.56 | ) | $ | (0.54 | ) | |
Net income (loss) attributable to iStar Financial Inc.: | |||||||
Basic | $ | (0.49 | ) | $ | (0.66 | ) | |
Diluted | $ | (0.49 | ) | $ | (0.66 | ) | |
Weighted average number of common shares—basic | 84,824 | 83,556 | |||||
Weighted average number of common shares—diluted | 84,824 | 83,556 | |||||
Per HPU share data(1)(2): | |||||||
Income (loss) attributable to iStar Financial Inc. from continuing operations: | |||||||
Basic | $ | (105.01 | ) | $ | (100.07 | ) | |
Diluted | $ | (105.01 | ) | $ | (100.07 | ) | |
Net income (loss) attributable to iStar Financial Inc.: | |||||||
Basic | $ | (92.07 | ) | $ | (124.07 | ) | |
Diluted | $ | (92.07 | ) | $ | (124.07 | ) | |
Weighted average number of HPU shares—basic and diluted | 15 | 15 |
(1) | Income (loss) from continuing operations attributable to iStar Financial Inc. for the three months ended March 31, 2013, and 2012 was $(61.8) million and $(41.9) million, respectively. See Note 13 for details on the calculation of earnings per share. |
(2) | HPU holders are current and former Company employees who purchased high performance common stock units under the Company's High Performance Unit Program (see Note 11). |
(3) | Participating Security holders are Company employees and directors who hold unvested restricted stock units, restricted stock awards and common stock equivalents granted under the Company's Long Term Incentive Plans that are eligible to participate in dividends (see Note 12 and Note 13). |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Net income (loss) | $ | (32,253 | ) | $ | (46,048 | ) | |
Other comprehensive income (loss): | |||||||
Reclassification of (gains)/losses on cash flow hedges into earnings upon realization | 74 | (5 | ) | ||||
Unrealized gains/(losses) on available-for-sale securities | 225 | 157 | |||||
Unrealized gains/(losses) on cash flow hedges | 37 | (571 | ) | ||||
Unrealized gains/(losses) on cumulative translation adjustment | (615 | ) | (391 | ) | |||
Other comprehensive income (loss) | $ | (279 | ) | $ | (810 | ) | |
Comprehensive income (loss) | $ | (32,532 | ) | $ | (46,858 | ) | |
Net (income) loss attributable to noncontrolling interests | 189 | (25 | ) | ||||
Comprehensive income (loss) attributable to iStar Financial Inc. | $ | (32,343 | ) | $ | (46,883 | ) |
iStar Financial Inc. Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||
Preferred Stock(1) | Preferred Stock Series J(1) | HPU's | Common Stock at Par | Additional Paid-In Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Treasury Stock at cost | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||
Balance at December 31, 2012 | $ | 22 | $ | — | $ | 9,800 | $ | 143 | $ | 3,832,780 | $ | (2,360,647 | ) | $ | (1,185 | ) | $ | (241,969 | ) | $ | 74,210 | $ | 1,313,154 | ||||||||||||||||
Issuance of Preferred Stock | — | 4 | — | — | 193,506 | — | — | — | — | 193,510 | |||||||||||||||||||||||||||||
Dividends declared—preferred | — | — | — | — | — | (10,580 | ) | — | — | — | (10,580 | ) | |||||||||||||||||||||||||||
Issuance of stock/restricted stock amortization, net | — | — | — | 1 | (4,692 | ) | — | — | — | — | (4,691 | ) | |||||||||||||||||||||||||||
Net loss for the period(2) | — | — | — | — | — | (32,064 | ) | — | — | 330 | (31,734 | ) | |||||||||||||||||||||||||||
Change in accumulated other comprehensive income (loss) | — | — | — | — | — | — | (279 | ) | — | — | (279 | ) | |||||||||||||||||||||||||||
Additional paid-in capital attributable to redeemable noncontrolling interest(4) | — | — | — | — | (1,744 | ) | — | — | — | — | (1,744 | ) | |||||||||||||||||||||||||||
Contributions from noncontrolling interests(3) | — | — | — | — | — | — | — | — | 11,079 | 11,079 | |||||||||||||||||||||||||||||
Distributions to noncontrolling interests(4) | — | — | — | — | — | — | — | — | (16,623 | ) | (16,623 | ) | |||||||||||||||||||||||||||
Balance at March 31, 2013 | $ | 22 | $ | 4 | $ | 9,800 | $ | 144 | $ | 4,019,850 | $ | (2,403,291 | ) | $ | (1,464 | ) | $ | (241,969 | ) | $ | 68,996 | $ | 1,452,092 |
(1) | See Note 11 for details on the Company's Cumulative Redeemable Preferred Stock. |
(2) | For the three months ended March 31, 2013 net loss shown above excludes $519 of net loss attributable to redeemable noncontrolling interests. |
(3) | Includes $11.1 million of operating property assets contributed by a noncontrolling partner (see Note 4). |
(4) | Includes $8.8 million payment to redeem a noncontrolling member's interest. |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (32,253 | ) | $ | (46,048 | ) | |
Adjustments to reconcile net income (loss) to cash flows from operating activities: | |||||||
Provision for loan losses | 10,206 | 17,500 | |||||
Impairment of assets | — | 17,807 | |||||
Depreciation and amortization | 17,354 | 17,238 | |||||
Payments for withholding taxes upon vesting of stock-based compensation | (9,894 | ) | (11,657 | ) | |||
Non-cash expense for stock-based compensation | 5,202 | 4,666 | |||||
Amortization of discounts/premiums and deferred financing costs on debt | 5,000 | 8,698 | |||||
Amortization of discounts/premiums and deferred interest on loans | (6,853 | ) | (11,773 | ) | |||
Earnings from equity method investments | (21,678 | ) | (34,786 | ) | |||
Distributions from operations of equity method investments | 6,109 | 11,358 | |||||
Deferred operating lease income | (3,592 | ) | (2,516 | ) | |||
Income from sales of residential property | (23,697 | ) | (6,733 | ) | |||
Gain from discontinued operations | (5,044 | ) | (2,406 | ) | |||
(Gain) loss on early extinguishment of debt, net | 9,541 | (1,704 | ) | ||||
Repayments and repurchases of debt - debt discount and prepayment penalty(1) | (20,057 | ) | (6,248 | ) | |||
Other operating activities, net | 1,537 | 1,679 | |||||
Changes in assets and liabilities: | |||||||
Changes in accrued interest and operating lease income receivable, net | 973 | 1,581 | |||||
Changes in deferred expenses and other assets, net | (12,420 | ) | (14,326 | ) | |||
Changes in accounts payable, accrued expenses and other liabilities | (4,125 | ) | 5,793 | ||||
Cash flows from operating activities | $ | (83,691 | ) | $ | (51,877 | ) | |
Cash flows from investing activities: | |||||||
Investment originations and fundings | $ | (22,111 | ) | $ | (8,376 | ) | |
Capital expenditures on real estate assets | (16,314 | ) | (11,080 | ) | |||
Contributions to unconsolidated entities | (1,448 | ) | (3,570 | ) | |||
Repayments of and principal collections on loans | 193,288 | 146,242 | |||||
Net proceeds from sales of loans | 37,703 | — | |||||
Net proceeds from sales of real estate assets | 107,192 | 57,859 | |||||
Distributions from unconsolidated entities | 13,024 | 13,655 | |||||
Changes in restricted cash held in connection with investing activities | (56 | ) | (492,854 | ) | |||
Other investing activities, net | 199 | 57 | |||||
Cash flows from investing activities | $ | 311,477 | $ | (298,067 | ) | ||
Cash flows from financing activities: | |||||||
Borrowings under secured credit facilities | $ | 658,700 | $ | 864,750 | |||
Repayments under secured credit facilities | (844,766 | ) | (88,896 | ) | |||
Repayments under unsecured credit facilities | — | (244,046 | ) | ||||
Repayments under secured term loans | (1,796 | ) | (2,138 | ) | |||
Repayments under unsecured notes | — | (169,383 | ) | ||||
Repurchases and redemptions of secured and unsecured notes | — | (214,194 | ) | ||||
Payments for deferred financing costs | (1,227 | ) | (14,584 | ) | |||
Preferred dividends paid | (10,580 | ) | (10,580 | ) | |||
Net proceeds from issuance of preferred shares | 193,510 | — | |||||
Other financing activities, net | (9,577 | ) | (952 | ) | |||
Cash flows from financing activities | $ | (15,736 | ) | $ | 119,977 | ||
Changes in cash and cash equivalents | $ | 212,050 | $ | (229,967 | ) | ||
Cash and cash equivalents at beginning of period | 256,344 | 356,826 | |||||
Cash and cash equivalents at end of period | $ | 468,394 | $ | 126,859 |
(1) | $3.0 million represents the portion of debt repayments and repurchases made during the period related to the original issue discount ("OID"). Although these amounts do not reflect contractual interest payments made during the period, the OID is considered an operating cash flow in accordance with GAAP. In addition, $17.1 million represents prepayment penalty paid in connection with the October 2012 Secured Credit Facility refinancing. |
As Previously Reported | Change | As Reclassified | ||||||||||
Cash flows from operations: | ||||||||||||
Three months Ended March 31, 2012 | $ | (35,770 | ) | $ | (16,107 | ) | $ | (51,877 | ) | |||
Six months Ended June 30, 2012 | $ | (57,196 | ) | $ | (9,859 | ) | $ | (67,055 | ) | |||
Cash flows from investing activities: | ||||||||||||
Three months Ended March 31, 2012 | $ | (307,926 | ) | $ | 9,859 | $ | (298,067 | ) | ||||
Six months Ended June 30, 2012 | $ | 206,147 | $ | 9,859 | $ | 216,006 | ||||||
Cash flows from financing activities: | ||||||||||||
Three months ended March 31, 2012 | $ | 113,729 | $ | 6,248 | $ | 119,977 |
Net Lease Assets | Operating Properties | Land | Total | ||||||||||||
As of March 31, 2013 | |||||||||||||||
Land and land improvements | $ | 342,221 | $ | 132,028 | $ | 793,356 | $ | 1,267,605 | |||||||
Buildings and improvements | 1,285,058 | 637,680 | — | 1,922,738 | |||||||||||
Less: accumulated depreciation and amortization | (318,479 | ) | (84,504 | ) | (2,556 | ) | (405,539 | ) | |||||||
Real estate, net | $ | 1,308,800 | $ | 685,204 | $ | 790,800 | $ | 2,784,804 | |||||||
Real estate available and held for sale | 9,766 | 409,579 | 179,716 | 599,061 | |||||||||||
Total real estate | $ | 1,318,566 | $ | 1,094,783 | $ | 970,516 | $ | 3,383,865 | |||||||
As of December 31, 2012 | |||||||||||||||
Land and land improvements | $ | 344,239 | $ | 132,028 | $ | 786,114 | $ | 1,262,381 | |||||||
Buildings and improvements | 1,295,081 | 669,186 | — | 1,964,267 | |||||||||||
Less: accumulated depreciation and amortization | (315,699 | ) | (109,634 | ) | (2,292 | ) | (427,625 | ) | |||||||
Real estate, net | $ | 1,323,621 | $ | 691,580 | $ | 783,822 | $ | 2,799,023 | |||||||
Real estate available and held for sale | — | 454,587 | 181,278 | 635,865 | |||||||||||
Total real estate | $ | 1,323,621 | $ | 1,146,167 | $ | 965,100 | $ | 3,434,888 |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Revenues | $ | 1,938 | $ | 4,903 | |||
Total expenses | (1,009 | ) | (2,989 | ) | |||
Impairment of assets | 32 | (15,275 | ) | ||||
Income (loss) from discontinued operations | $ | 961 | $ | (13,361 | ) |
As of | |||||||
Type of Investment | March 31, 2013 | December 31, 2012 | |||||
Senior mortgages | $ | 1,580,632 | $ | 1,751,256 | |||
Subordinate mortgages | 113,754 | 152,737 | |||||
Corporate/Partnership loans | 410,065 | 450,491 | |||||
Total gross carrying value of loans(1) | $ | 2,104,451 | $ | 2,354,484 | |||
Reserves for loan losses | (521,795 | ) | (524,499 | ) | |||
Total loans receivable, net | $ | 1,582,656 | $ | 1,829,985 |
(1) | The Company's recorded investment in loans as of March 31, 2013 and December 31, 2012, was $2.11 billion and $2.36 billion, respectively, which consists of total gross carrying value of loans plus accrued interest of $8.5 million and $9.8 million, for the same two periods, respectively. |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Reserve for loan losses at beginning of period | $ | 524,499 | $ | 646,624 | |||
Provision for loan losses | 10,206 | 17,500 | |||||
Charge-offs | (12,910 | ) | (96,945 | ) | |||
Reserve for loan losses at end of period | $ | 521,795 | $ | 567,179 |
Individually Evaluated for Impairment(1) | Collectively Evaluated for Impairment(2) | Loans Acquired with Deteriorated Credit Quality(3) | Total | ||||||||||||
As of March 31, 2013 | |||||||||||||||
Loans | $ | 1,041,847 | $ | 1,055,342 | $ | 15,574 | $ | 2,112,763 | |||||||
Less: Reserve for loan losses | (486,379 | ) | (30,900 | ) | (4,516 | ) | (521,795 | ) | |||||||
Total | $ | 555,468 | $ | 1,024,442 | $ | 11,058 | $ | 1,590,968 | |||||||
As of December 31, 2012 | |||||||||||||||
Loans | $ | 1,095,957 | $ | 1,210,077 | $ | 58,281 | $ | 2,364,315 | |||||||
Less: Reserve for loan losses | (472,058 | ) | (33,100 | ) | (19,341 | ) | (524,499 | ) | |||||||
Total | $ | 623,899 | $ | 1,176,977 | $ | 38,940 | $ | 1,839,816 |
(1) | The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs aggregating to a net discount of $3.5 million and $4.0 million as of March 31, 2013 and December 31, 2012, respectively. The Company's loans individually evaluated for impairment primarily represent loans on non-accrual status and therefore, the unamortized amounts associated with these loans are not currently being amortized into income. |
(2) | The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs aggregating to a net discount of $4.1 million and $3.8 million as of March 31, 2013 and December 31, 2012, respectively. |
(3) | The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs aggregating to a net premium of $0.1 million and $0.1 million as of March 31, 2013 and December 31, 2012, respectively. These loans had cumulative principal balances of $15.9 million and $58.8 million, as of March 31, 2013 and December 31, 2012, respectively. |
As of | |||||||||||||
March 31, 2013 | December 31, 2012 | ||||||||||||
Performing Loans | Weighted Average Risk Ratings | Performing Loans | Weighted Average Risk Ratings | ||||||||||
Senior mortgages | $ | 823,869 | 2.70 | $ | 840,593 | 2.75 | |||||||
Subordinate mortgages | 61,236 | 3.07 | 99,698 | 2.27 | |||||||||
Corporate/Partnership loans | 403,016 | 3.61 | 444,772 | 3.69 | |||||||||
Total | $ | 1,288,121 | 3.00 | $ | 1,385,063 | 3.01 |
Current | Less Than and Equal to 90 Days | Greater Than 90 Days | Total Past Due | Total | |||||||||||||||
Senior mortgages | $ | 840,666 | $ | 3,138 | $ | 740,800 | $ | 743,938 | $ | 1,584,604 | |||||||||
Subordinate mortgages | 61,236 | — | 53,797 | 53,797 | 115,033 | ||||||||||||||
Corporate/Partnership loans | 403,016 | — | 10,110 | 10,110 | 413,126 | ||||||||||||||
Total | $ | 1,304,918 | $ | 3,138 | $ | 804,707 | $ | 807,845 | $ | 2,112,763 |
As of March 31, 2013 | As of December 31, 2012 | ||||||||||||||||||||||
Recorded Investment | Unpaid Principal Balance | Related Allowance | Recorded Investment | Unpaid Principal Balance | Related Allowance | ||||||||||||||||||
With no related allowance recorded: | |||||||||||||||||||||||
Senior mortgages | $ | 18,711 | $ | 18,591 | $ | — | $ | 108,077 | $ | 107,850 | $ | — | |||||||||||
Corporate/Partnership loans | 10,110 | 10,160 | — | 10,110 | 10,160 | — | |||||||||||||||||
Subtotal | $ | 28,821 | $ | 28,751 | $ | — | $ | 118,187 | $ | 118,010 | $ | — | |||||||||||
With an allowance recorded: | |||||||||||||||||||||||
Senior mortgages | $ | 903,190 | $ | 902,077 | $ | (442,256 | ) | $ | 918,975 | $ | 918,496 | $ | (442,760 | ) | |||||||||
Subordinate mortgages | 53,797 | 53,260 | (39,579 | ) | 53,979 | 53,679 | (39,579 | ) | |||||||||||||||
Corporate/Partnership loans | 61,556 | 61,674 | (9,060 | ) | 63,096 | 63,246 | (9,060 | ) | |||||||||||||||
Subtotal | $ | 1,018,543 | $ | 1,017,011 | $ | (490,895 | ) | $ | 1,036,050 | $ | 1,035,421 | $ | (491,399 | ) | |||||||||
Total: | |||||||||||||||||||||||
Senior mortgages | $ | 921,901 | $ | 920,668 | $ | (442,256 | ) | $ | 1,027,052 | $ | 1,026,346 | $ | (442,760 | ) | |||||||||
Subordinate mortgages | 53,797 | 53,260 | (39,579 | ) | 53,979 | 53,679 | (39,579 | ) | |||||||||||||||
Corporate/Partnership loans | 71,666 | 71,834 | (9,060 | ) | 73,206 | 73,406 | (9,060 | ) | |||||||||||||||
Total | $ | 1,047,364 | $ | 1,045,762 | $ | (490,895 | ) | $ | 1,154,237 | $ | 1,153,431 | $ | (491,399 | ) |
(1) | All of the Company's non-accrual loans are considered impaired and included in the table above. In addition, as of March 31, 2013 and December 31, 2012, certain loans modified through troubled debt restructurings with a recorded investment of $222.7 million and $175.0 million, respectively, are also included as impaired loans in accordance with GAAP although they are performing and on accrual status. |
For the Three Months Ended March 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||
Average Recorded Investment | Interest Income Recognized | Average Recorded Investment | Interest Income Recognized | ||||||||||||
With no related allowance recorded: | |||||||||||||||
Senior mortgages | $ | 63,394 | $ | 844 | $ | 212,803 | $ | 407 | |||||||
Corporate/Partnership loans | 10,110 | 120 | 10,110 | — | |||||||||||
Subtotal | $ | 73,504 | $ | 964 | $ | 222,913 | $ | 407 | |||||||
With an allowance recorded: | |||||||||||||||
Senior mortgages | $ | 911,082 | $ | 506 | $ | 1,147,091 | $ | 1,240 | |||||||
Subordinate mortgages | 53,888 | — | 50,345 | — | |||||||||||
Corporate/Partnership loans | 62,326 | 78 | 62,959 | 80 | |||||||||||
Subtotal | $ | 1,027,296 | $ | 584 | $ | 1,260,395 | $ | 1,320 | |||||||
Total: | |||||||||||||||
Senior mortgages | $ | 974,476 | $ | 1,350 | $ | 1,359,894 | $ | 1,647 | |||||||
Subordinate mortgages | 53,888 | — | 50,345 | — | |||||||||||
Corporate/Partnership loans | 72,436 | 198 | 73,069 | 80 | |||||||||||
Total | $ | 1,100,800 | $ | 1,548 | $ | 1,483,308 | $ | 1,727 |
For the Three Months Ended March 31, | |||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Number of Loans | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | Number of Loans | Pre-Modification Outstanding Recorded Investment | Post-Modification Outstanding Recorded Investment | ||||||||||||||||
Senior mortgages | 1 | $ | 72,674 | $ | 65,000 | 5 | $ | 305,780 | $ | 260,307 |
Carrying Value as of | Equity in earnings for the Three Months Ended March 31, | ||||||||||||||
March 31, 2013 | December 31, 2012 | 2013 | 2012 | ||||||||||||
LNR | $ | 221,912 | $ | 205,773 | $ | 14,746 | $ | 12,137 | |||||||
Madison Funds | 56,245 | 56,547 | 2,259 | 9,498 | |||||||||||
Oak Hill Funds | 26,794 | 29,840 | 1,157 | 3,374 | |||||||||||
Real estate equity investments | 40,560 | 47,619 | 1,763 | 6,771 | |||||||||||
Other equity method investments | 48,489 | 47,939 | 1,753 | 3,006 | |||||||||||
Total equity method investments | $ | 394,000 | $ | 387,718 | $ | 21,678 | $ | 34,786 | |||||||
Other | 9,759 | 11,125 | |||||||||||||
Total other investments | $ | 403,759 | $ | 398,843 |
For the Three Months Ended December 31, | |||||||
2012 | 2011 | ||||||
Income Statements | |||||||
Total revenue(2) | $ | 77,780 | $ | 77,360 | |||
Other Income | $ | 164,582 | $ | 20,936 | |||
Income tax expense | $ | 279 | $ | 1,837 | |||
Net income attributable to LNR | $ | 189,249 | $ | 50,621 | |||
iStar's ownership percentage | 24 | % | 24 | % | |||
Subtotal | $ | 45,420 | $ | 12,137 | |||
Basis difference(3) | $ | (30,674 | ) | $ | — | ||
iStar's equity in earnings from LNR | $ | 14,746 | $ | 12,137 |
As of December 31, | As of September 30, | ||||||
2012 | 2012 | ||||||
Balance Sheets | |||||||
Total assets(2) | $ | 1,610,143 | $ | 1,384,337 | |||
Total debt(2) | $ | 468,355 | $ | 398,912 | |||
Total liabilities(2) | $ | 553,150 | $ | 517,088 | |||
Noncontrolling interests | $ | 1,588 | $ | 1,560 | |||
LNR Property LLC equity | $ | 1,055,405 | $ | 865,689 | |||
iStar's ownership percentage | 24 | % | 24 | % | |||
iStar's equity in LNR | $ | 221,912 | $ | 205,773 |
(1) | The Company records its investment in LNR on a one quarter lag, therefore, amounts in the Company's financial statements for the three months ended March 31, 2013 and 2012 are based on balances and results from LNR for the three months ended December 31, 2012 and 2011. |
(2) | LNR consolidates certain commercial mortgage-backed securities and collateralized debt obligation trusts that are considered VIEs (and for which it is the primary beneficiary), that have been excluded from the amounts presented above. As of December 31, 2012 and September 30, 2012, the assets of these trusts, which aggregated approximately $91.06 billion and $97.52 billion, respectively, were the sole source of repayment of the related liabilities, which aggregated approximately $90.74 billion and $97.21 billion, respectively, and are non-recourse to LNR and its equity holders, including the Company. In addition, total revenue presented above includes $29.3 million and $28.7 million for the three months ended December 31, 2012, and 2011, respectively, of servicing fee revenue that is eliminated upon consolidation of the VIE's at the LNR level. This income is then added back through consolidation at the LNR level as an adjustment to income allocable to noncontrolling entities and has no net impact on net income attributable to LNR. |
(3) | The Company has limited its recognition of its proportionate share of earnings in LNR for the three months ended March 31, 2013 to the amounts of proceeds it anticipates receiving from the sale. |
As of | |||||||
March 31, 2013 | December 31, 2012 | ||||||
Deferred financing fees, net(1) | $ | 23,721 | $ | 26,629 | |||
Leasing costs, net(2) | 19,322 | 20,205 | |||||
Other receivables | 12,907 | 11,517 | |||||
Derivative asset | 10,522 | — | |||||
Prepaid expenses | 10,404 | 5,218 | |||||
Corporate furniture, fixtures and equipment, net(3) | 7,248 | 7,537 | |||||
Other assets | 24,175 | 22,884 | |||||
Deferred expenses and other assets, net | $ | 108,299 | $ | 93,990 |
(1) | Accumulated amortization on deferred financing fees was $2.6 million and $4.1 million as of March 31, 2013 and December 31, 2012, respectively. |
(2) | Accumulated amortization on leasing costs was $5.0 million and $6.6 million as of March 31, 2013 and December 31, 2012, respectively. |
(3) | Accumulated depreciation on corporate furniture, fixtures and equipment was $6.0 million and $6.2 million as of March 31, 2013 and December 31, 2012, respectively. |
As of | |||||||
March 31, 2013 | December 31, 2012 | ||||||
Accrued interest payable | $ | 43,691 | $ | 29,521 | |||
Accrued expenses | 34,643 | 50,467 | |||||
Property taxes payable | 10,802 | 8,206 | |||||
Unearned operating lease income | 10,631 | 11,294 | |||||
Security deposits and other investment deposits(1) | 4,593 | 13,717 | |||||
Derivative liabilities | 455 | 3,435 | |||||
Other liabilities | 12,412 | 15,820 | |||||
Accounts payable, accrued expenses and other liabilities | $ | 117,227 | $ | 132,460 |
(1) | During the three months ended March 31, 2013, $8.9 million of restricted cash collateralizing a letter of credit related to one of the Company's loan investments was disbursed. |
As of | |||||||
March 31, 2013 | December 31, 2012 | ||||||
Deferred tax assets(1) | $ | 50,968 | $ | 40,800 | |||
Valuation allowance | (50,968 | ) | (40,800 | ) | |||
Net deferred tax assets (liabilities) | $ | — | $ | — |
(1) | Deferred tax assets as of March 31, 2013, include real estate basis differences of $36.3 million, net operating loss carryforwards of $6.7 million and investment basis differences of $7.9 million. Deferred tax assets as of December 31, 2012, include real estate basis differences of $31.2 million, net operating loss carryforwards of $10.8 million and investment basis differences of $(1.2) million. |
Carrying Value as of | |||||||||||||
March 31, 2013 | December 31, 2012 | Stated Interest Rates | Scheduled Maturity Date | ||||||||||
Secured credit facilities and term loans: | |||||||||||||
2012 Tranche A-1 Facility | $ | 60,309 | $ | 169,164 | LIBOR + 4.00% | (1 | ) | March 2016 | |||||
2012 Tranche A-2 Facility | 470,000 | 470,000 | LIBOR + 5.75% | (1 | ) | March 2017 | |||||||
October 2012 Secured Credit Facility | — | 1,754,466 | LIBOR + 4.50% | (2 | ) | — | |||||||
February 2013 Secured Credit Facility | 1,673,414 | — | LIBOR + 3.50% | (3 | ) | October 2017 | |||||||
Term loans collateralized by net lease assets | 263,489 | 264,432 | 4.851% - 7.68% | Various through 2026 | |||||||||
Total secured credit facilities and term loans | $ | 2,467,212 | $ | 2,658,062 | |||||||||
Unsecured notes: | |||||||||||||
8.625% senior notes | $ | 96,801 | $ | 96,801 | 8.625 | % | June 2013 | ||||||
5.95% senior notes | 448,453 | 448,453 | 5.95 | % | October 2013 | ||||||||
5.70% senior notes | 200,601 | 200,601 | 5.70 | % | March 2014 | ||||||||
6.05% senior notes | 105,765 | 105,765 | 6.05 | % | April 2015 | ||||||||
5.875% senior notes | 261,403 | 261,403 | 5.875 | % | March 2016 | ||||||||
3.0% senior convertible notes(4) | 200,000 | 200,000 | 3.0 | % | November 2016 | ||||||||
5.85% senior notes | 99,722 | 99,722 | 5.85 | % | March 2017 | ||||||||
9.0% senior notes | 275,000 | 275,000 | 9.0 | % | June 2017 | ||||||||
7.125% senior notes | 300,000 | 300,000 | 7.125 | % | February 2018 | ||||||||
Total unsecured notes | $ | 1,987,745 | $ | 1,987,745 | |||||||||
Other debt obligations: | |||||||||||||
Other debt obligations | $ | 100,000 | $ | 100,000 | LIBOR + 1.5% | October 2035 | |||||||
Total debt obligations | $ | 4,554,957 | $ | 4,745,807 | |||||||||
Debt discounts, net | (60,320 | ) | (54,313 | ) | |||||||||
Total debt obligations, net | $ | 4,494,637 | $ | 4,691,494 |
(1) | These loans each have a LIBOR floor of 1.25%. As of March 31, 2013, inclusive of the floors, the 2012 Tranche A-1 Facility and 2012 Tranche A-2 Facility loans incurred interest at a rate of 5.25% and 7.00%, respectively. |
(2) | This loan had a LIBOR floor of 1.25%. |
(3) | This loan has a LIBOR floor of 1.00%. As of March 31, 2013, inclusive of the floor, the February 2013 Secured Credit Facility incurred interest at a rate of 4.50%. |
(4) | The Company's senior convertible fixed rate notes due November 2016 ("Convertible Notes") are convertible at the option of the holders, into 85.0 shares per $1,000 principal amount of Convertible Notes, at any time prior to the close of business on November 14, 2016. |
Unsecured Debt | Secured Debt | Total | |||||||||
2013 (remaining nine months) | $ | 545,254 | $ | — | $ | 545,254 | |||||
2014 | 200,601 | 853 | 201,454 | ||||||||
2015 | 105,765 | — | 105,765 | ||||||||
2016 | 461,403 | 60,309 | 521,712 | ||||||||
2017 | 374,722 | 2,143,414 | 2,518,136 | ||||||||
Thereafter | 400,000 | 262,636 | 662,636 | ||||||||
Total principal maturities | $ | 2,087,745 | $ | 2,467,212 | $ | 4,554,957 | |||||
Unamortized debt discounts, net | (17,358 | ) | (42,962 | ) | (60,320 | ) | |||||
Total long-term debt obligations, net | $ | 2,070,387 | $ | 2,424,250 | $ | 4,494,637 |
As of | |||||||||||||||
March 31, 2013 | December 31, 2012 | ||||||||||||||
Encumbered Assets | Unencumbered Assets | Encumbered Assets | Unencumbered Assets | ||||||||||||
Real estate, net | $ | 1,649,658 | $ | 1,135,146 | $ | 1,794,198 | $ | 1,004,825 | |||||||
Real estate available and held for sale | 252,354 | 346,707 | 141,673 | 494,192 | |||||||||||
Loans receivable, net(1) | 1,076,080 | 537,476 | 1,197,373 | 665,712 | |||||||||||
Other investments | 34,130 | 369,629 | 43,545 | 355,298 | |||||||||||
Cash and other assets | — | 706,838 | — | 487,073 | |||||||||||
Total | $ | 3,012,222 | $ | 3,095,796 | $ | 3,176,789 | $ | 3,007,100 |
(1) | As of March 31, 2013 and December 31, 2012, the amounts presented exclude general reserves for loan losses of $30.9 million and $33.1 million, respectively. |
Loans | Real Estate | Strategic Investments | Total | ||||||||||||
Performance-Based Commitments | $ | 39,411 | $ | 33,064 | $ | — | $ | 72,475 | |||||||
Discretionary Fundings | 125 | — | — | 125 | |||||||||||
Strategic investments | — | — | 47,040 | 47,040 | |||||||||||
Total | $ | 39,536 | $ | 33,064 | $ | 47,040 | $ | 119,640 |
Derivative Assets as of | Derivative Liabilities as of | ||||||||||||||||||||||
March 31, 2013 | December 31, 2012 | March 31, 2013 | December 31, 2012 | ||||||||||||||||||||
Derivative | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
Foreign exchange contracts | Other Assets | $ | 10,522 | N/A | $ | — | N/A | $ | — | Other Liabilities | $ | 2,855 | |||||||||||
Cash flow interest rate swap | N/A | — | N/A | — | Other Liabilities | 455 | Other Liabilities | 580 | |||||||||||||||
Total | $ | 10,522 | $ | — | $ | 455 | $ | 3,435 |
Derivatives Designated in Hedging Relationships | Location of Gain (Loss) Recognized in Income on Derivative | Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion) | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion) | Amount of Gain (Loss) Recognized in Earnings (Ineffective Portion) | ||||||||
For the Three Months Ended March 31, 2013 | ||||||||||||
Cash flow interest rate swap | Interest Expense | $ | 37 | $ | 74 | N/A | ||||||
For the Three Months Ended March 31, 2012 | ||||||||||||
Cash flow interest rate swap | Interest Expense | $ | (205 | ) | $ | (5 | ) | N/A |
Amount of Gain or (Loss) Recognized in Income on Derivative | ||||||||||
Location of Gain or (Loss) Recognized in Income on Derivative | For the Three Months Ended March 31, | |||||||||
Derivatives not Designated in Hedging Relationships | 2013 | 2012 | ||||||||
Foreign Exchange Contracts | Other Expense | $ | 10,156 | $ | (8,859 | ) |
Derivative Type | Notional Amount | Notional (USD Equivalent) | Maturity | |||||||
Sells EUR/Buys USD Forward | € | 84,400 | $ | 108,222 | April 2013 | |||||
Sells GBP/Buys USD Forward | £ | 27,900 | $ | 42,396 | April 2013 | |||||
Sells CAD/Buys USD Forward | C$ | 48,700 | $ | 47,866 | April 2013 |
Derivative Type | Notional Amount | Variable Rate | Fixed Rate | Maturity | ||||||
Interest Rate Swap | $ | 28,000 | LIBOR + 2.00% | 3.75% | November 2019 |
Cumulative Preferential Cash Dividends(1)(2) | ||||||||||||||||||
Series | Shares Issued and Outstanding (in thousands) | Par Value | Liquidation Preference | Rate per Annum | Equivalent to Fixed Annual Rate (per share) | |||||||||||||
D | 4,000 | $ | 0.001 | $ | 25.00 | 8.000 | % | $ | 2.00 | |||||||||
E | 5,600 | $ | 0.001 | $ | 25.00 | 7.875 | % | $ | 1.97 | |||||||||
F | 4,000 | $ | 0.001 | $ | 25.00 | 7.8 | % | $ | 1.95 | |||||||||
G | 3,200 | $ | 0.001 | $ | 25.00 | 7.65 | % | $ | 1.91 | |||||||||
I | 5,000 | $ | 0.001 | $ | 25.00 | 7.50 | % | $ | 1.88 | |||||||||
J | 4,000 | $ | 0.001 | $ | 50.00 | 4.50 | % | $ | 2.25 | |||||||||
25,800 |
(1) | Holders of shares of the Series D, E, F, G, I and J preferred stock are entitled to receive dividends, when and as declared by the Board of Directors, out of funds legally available for the payment of dividends. Dividends are cumulative from the date of original issue and are payable quarterly in arrears on or before the 15th day of each March, June, September and December or, if not a business day, the next succeeding business day. Any dividend payable on the preferred stock for any partial dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as of the close of business on the first day of the calendar month in which the applicable dividend payment date falls or on another date designated by the Board of Directors of the Company for the payment of dividends that is not more than 30 nor less than 10 days prior to the dividend payment date. |
(2) | The Company declared and paid dividends of $2.0 million, $2.8 million, $2.0 million, $1.5 million and $2.3 million on its Series D, E, F, G and I preferred stock, respectively, during each of the three months ended March 31, 2013 and 2012, all of which qualified as return of capital for tax reporting purposes. There are no dividend arrearages on any of the preferred shares currently outstanding. |
As of | |||||||
March 31, 2013 | December 31, 2012 | ||||||
Unrealized gains on available-for-sale securities | $ | 1,092 | $ | 867 | |||
Unrealized gains on cash flow hedges | 718 | 607 | |||||
Unrealized losses on cumulative translation adjustment | (3,274 | ) | (2,659 | ) | |||
Accumulated other comprehensive income (loss) | $ | (1,464 | ) | $ | (1,185 | ) |
• | 1,200,000 service-based restricted stock units granted to the Company's Chairman and Chief Executive Officer that will vest in two equal installments on June 15 of 2013 and 2014. Upon vesting of these units, the holder will receive shares of the Company's Common Stock in the amount of the vested units, net of statutory minimum required tax withholdings. These awards carry dividend equivalent rights that entitle the holder to receive dividend payments prior to vesting, if and when dividends are paid on shares of the Company's Common Stock. |
• | 1,714,303 restricted stock units originally granted to executives and other officers of the Company on December 19, 2008 (the "Original Units") and subsequently modified in July 2011 (the "Amended Units"). The number of Amended Units is equal to 75% of the Original Units granted to an employee less, in the case of each executive level employee, the number of restricted stock units granted to the executive in March 2011. The remaining Amended Units will vest on January 1, 2014, so long as the employee remains employed by the Company on the vesting dates, subject to certain accelerated vesting rights in the event of termination of employment without cause. Upon vesting of these units, holders will receive shares of the Company's Common Stock in the amount of the vested units, net of statutory minimum required tax withholdings. These awards carry dividend equivalent rights that entitle the holders to receive dividend payments prior to vesting, if and when dividends are paid on shares of the Company's Common Stock. |
• | 140,331 service-based restricted stock units granted to employees with original vesting terms ranging from two years to three years. Upon vesting of these units, holders will receive shares of the Company's Common Stock in the amount of the vested units, net of statutory minimum required tax withholdings. These awards carry dividend equivalent rights that entitle the holders to receive dividend payments prior to vesting, if and when dividends are paid on shares of the Company's Common Stock. |
For the Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Income (loss) from continuing operations | $ | (61,955 | ) | $ | (41,826 | ) | ||
Net (income) loss attributable to noncontrolling interests | 189 | (25 | ) | |||||
Income from sales of residential property | 23,697 | 6,733 | ||||||
Preferred dividends | (10,580 | ) | (10,580 | ) | ||||
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders, HPU holders and Participating Security Holders | $ | (48,649 | ) | $ | (45,698 | ) |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Earnings allocable to common shares: | |||||||
Numerator for basic earnings per share: | |||||||
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders | $ | (47,074 | ) | $ | (44,197 | ) | |
Income (loss) from discontinued operations | 930 | (12,922 | ) | ||||
Gain from discontinued operations | 4,881 | 2,327 | |||||
Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders | $ | (41,263 | ) | $ | (54,792 | ) | |
Numerator for diluted earnings per share: | |||||||
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders | $ | (47,074 | ) | $ | (44,197 | ) | |
Income (loss) from discontinued operations | 930 | (12,922 | ) | ||||
Gain from discontinued operations | 4,881 | 2,327 | |||||
Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders | $ | (41,263 | ) | $ | (54,792 | ) | |
Denominator for basic and diluted earnings per share: | |||||||
Weighted average common shares outstanding for basic and diluted earnings per common share | 84,824 | 83,556 | |||||
Basic earnings per common share: | |||||||
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders | $ | (0.56 | ) | $ | (0.54 | ) | |
Income (loss) from discontinued operations | 0.01 | (0.15 | ) | ||||
Gain from discontinued operations | 0.06 | 0.03 | |||||
Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders | $ | (0.49 | ) | $ | (0.66 | ) | |
Diluted earnings per common share: | |||||||
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders | $ | (0.56 | ) | $ | (0.54 | ) | |
Income (loss) from discontinued operations | 0.01 | (0.15 | ) | ||||
Gain from discontinued operations | 0.06 | 0.03 | |||||
Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders | $ | (0.49 | ) | $ | (0.66 | ) |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Earnings allocable to High Performance Units: | |||||||
Numerator for basic earnings per HPU share: | |||||||
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to HPU holders | $ | (1,575 | ) | $ | (1,501 | ) | |
Income (loss) from discontinued operations | 31 | (439 | ) | ||||
Gain from discontinued operations | 163 | 79 | |||||
Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders | $ | (1,381 | ) | $ | (1,861 | ) | |
Numerator for diluted earnings per HPU share: | |||||||
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to HPU holders | $ | (1,575 | ) | $ | (1,501 | ) | |
Income (loss) from discontinued operations | 31 | (439 | ) | ||||
Gain from discontinued operations | 163 | 79 | |||||
Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders | $ | (1,381 | ) | $ | (1,861 | ) | |
Denominator for basic and diluted earnings per HPU share: | |||||||
Weighted average High Performance Units outstanding for basic and diluted earnings per share | 15 | 15 | |||||
Basic earnings per HPU share: | |||||||
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to HPU holders | $ | (105.01 | ) | $ | (100.07 | ) | |
Income (loss) from discontinued operations | 2.07 | (29.27 | ) | ||||
Gain from discontinued operations | 10.87 | 5.27 | |||||
Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders | $ | (92.07 | ) | $ | (124.07 | ) | |
Diluted earnings per HPU share: | |||||||
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to HPU holders | $ | (105.01 | ) | $ | (100.07 | ) | |
Income (loss) from discontinued operations | 2.07 | (29.27 | ) | ||||
Gain from discontinued operations | 10.87 | 5.27 | |||||
Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders | $ | (92.07 | ) | $ | (124.07 | ) |
For the Three Months Ended March 31, | |||||
2013 | 2012 | ||||
Joint venture shares | 298 | 298 | |||
Stock options | — | 44 | |||
3% Senior convertible unsecured notes | 16,992 | — | |||
Series J convertible perpetual preferred stock | 15,635 | — |
Fair Value Using | |||||||||||||||
Total | Quoted market prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
As of March 31, 2013 | |||||||||||||||
Recurring basis: | |||||||||||||||
Derivative assets | $ | 10,522 | $ | — | $ | 10,522 | $ | — | |||||||
Derivative liabilities | $ | 455 | $ | — | $ | 455 | $ | — | |||||||
Non-recurring basis: | |||||||||||||||
Impaired loans(1) | $ | 84,800 | $ | — | $ | — | $ | 84,800 | |||||||
As of December 31, 2012 | |||||||||||||||
Recurring basis: | |||||||||||||||
Derivative liabilities | $ | 3,435 | $ | — | $ | 3,435 | $ | — | |||||||
Non-recurring basis: | |||||||||||||||
Impaired loans | $ | 57,201 | $ | — | $ | — | $ | 57,201 | |||||||
Impaired real estate | $ | 31,597 | $ | — | $ | 7,649 | $ | 23,948 |
(1) | One loan with a value of $53.0 million was valued based on a letter of intent provided by the borrower, another loan with a value of $30.8 million was valued based on a trade offer in the market and the remaining loan with a value of $1.0 million was valued based on expected net auction proceeds, all of which the Company believes approximates fair value. |
Real Estate Finance | Net Leasing | Operating Property | Land | Corporate/ Other(1) | Company Total | ||||||||||||||||||
For the Three Months Ended March 31, 2013 | |||||||||||||||||||||||
Operating lease income | $ | — | $ | 37,109 | $ | 21,364 | $ | — | $ | — | $ | 58,473 | |||||||||||
Interest income | 24,667 | — | — | — | — | 24,667 | |||||||||||||||||
Other income | 2,208 | — | 8,112 | 500 | 573 | 11,393 | |||||||||||||||||
Total revenue | $ | 26,875 | $ | 37,109 | $ | 29,476 | $ | 500 | $ | 573 | $ | 94,533 | |||||||||||
Earnings (loss) from equity method investments | — | 686 | 2,657 | (1,579 | ) | 19,914 | 21,678 | ||||||||||||||||
Income from sales of residential property | — | — | 23,697 | — | — | 23,697 | |||||||||||||||||
Net operating income from discontinued operations(2) | — | 260 | 734 | — | — | 994 | |||||||||||||||||
Gain from discontinued operations | — | 29 | 5,015 | — | — | 5,044 | |||||||||||||||||
Revenue and other earnings | $ | 26,875 | $ | 38,084 | $ | 61,579 | $ | (1,079 | ) | $ | 20,487 | $ | 145,946 | ||||||||||
Real estate expense | — | (5,677 | ) | (25,736 | ) | (6,503 | ) | — | (37,916 | ) | |||||||||||||
Other expense | (1,444 | ) | — | — | — | (4,181 | ) | (5,625 | ) | ||||||||||||||
Direct expenses | $ | (1,444 | ) | $ | (5,677 | ) | $ | (25,736 | ) | $ | (6,503 | ) | $ | (4,181 | ) | $ | (43,541 | ) | |||||
Direct segment profit (loss) | $ | 25,431 | $ | 32,407 | $ | 35,843 | $ | (7,582 | ) | $ | 16,306 | $ | 102,405 | ||||||||||
Allocated interest expense(3) | (19,952 | ) | (20,745 | ) | (14,622 | ) | (9,288 | ) | (6,959 | ) | (71,566 | ) | |||||||||||
Allocated general and administrative(4) | (3,074 | ) | (3,052 | ) | (2,231 | ) | (1,849 | ) | (6,440 | ) | (16,646 | ) | |||||||||||
Segment profit (loss)(5) | $ | 2,405 | $ | 8,610 | $ | 18,990 | $ | (18,719 | ) | $ | 2,907 | $ | 14,193 | ||||||||||
Other significant non-cash items: | |||||||||||||||||||||||
Provision for loan losses | $ | 10,206 | $ | — | $ | — | $ | — | $ | — | $ | 10,206 | |||||||||||
Impairment of assets(3) | $ | — | $ | — | $ | (32 | ) | $ | — | $ | — | $ | (32 | ) | |||||||||
Depreciation and amortization(3) | $ | — | $ | 9,642 | $ | 7,206 | $ | 264 | $ | 342 | $ | 17,454 | |||||||||||
Capitalized expenditures | $ | — | $ | 3,766 | $ | 4,921 | $ | 7,627 | $ | — | $ | 16,314 | |||||||||||
As of March 31, 2013 | |||||||||||||||||||||||
Real estate | |||||||||||||||||||||||
Real estate, at cost | $ | — | $ | 1,627,279 | $ | 769,708 | $ | 793,356 | $ | — | $ | 3,190,343 | |||||||||||
Less: accumulated depreciation | — | (318,479 | ) | (84,504 | ) | (2,556 | ) | — | (405,539 | ) | |||||||||||||
Real estate, net | $ | — | $ | 1,308,800 | $ | 685,204 | $ | 790,800 | $ | — | $ | 2,784,804 | |||||||||||
Real estate available and held for sale | — | 9,766 | 409,579 | 179,716 | — | 599,061 | |||||||||||||||||
Total real estate | $ | — | $ | 1,318,566 | $ | 1,094,783 | $ | 970,516 | $ | — | $ | 3,383,865 | |||||||||||
Loans receivable, net | 1,582,656 | — | — | — | — | 1,582,656 | |||||||||||||||||
Other investments | — | 16,397 | 20,308 | 3,854 | 363,200 | 403,759 | |||||||||||||||||
Total portfolio assets | $ | 1,582,656 | $ | 1,334,963 | $ | 1,115,091 | $ | 974,370 | $ | 363,200 | $ | 5,370,280 | |||||||||||
Cash and other assets | 706,838 | ||||||||||||||||||||||
Total assets | $ | 6,077,118 |
Real Estate Finance | Net Leasing | Operating Property | Land | Corporate/ Other(1) | Company Total | ||||||||||||||||||
For the Three Months Ended March 31, 2012 | |||||||||||||||||||||||
Operating lease income | $ | — | $ | 37,237 | $ | 15,886 | $ | — | $ | — | $ | 53,123 | |||||||||||
Interest income | 37,203 | — | — | — | — | 37,203 | |||||||||||||||||
Other income | 67 | — | 8,883 | — | 1,806 | 10,756 | |||||||||||||||||
Total revenue | $ | 37,270 | $ | 37,237 | $ | 24,769 | $ | — | $ | 1,806 | $ | 101,082 | |||||||||||
Earnings (loss) from equity method investments | — | 646 | 7,676 | (1,552 | ) | 28,016 | 34,786 | ||||||||||||||||
Income from sales of residential property | — | — | 6,733 | — | — | 6,733 | |||||||||||||||||
Net operating income from discontinued operations(2) | — | 3,348 | 436 | — | — | 3,784 | |||||||||||||||||
Gain from discontinued operations | — | 2,406 | — | — | — | 2,406 | |||||||||||||||||
Revenue and other earnings | $ | 37,270 | $ | 43,637 | $ | 39,614 | $ | (1,552 | ) | $ | 29,822 | $ | 148,791 | ||||||||||
Real estate expense | — | (5,144 | ) | (25,730 | ) | (4,194 | ) | — | (35,068 | ) | |||||||||||||
Other expense | (915 | ) | — | — | — | 462 | (453 | ) | |||||||||||||||
Direct expenses | $ | (915 | ) | $ | (5,144 | ) | $ | (25,730 | ) | $ | (4,194 | ) | $ | 462 | $ | (35,521 | ) | ||||||
Direct segment profit (loss) | $ | 36,355 | $ | 38,493 | $ | 13,884 | $ | (5,746 | ) | $ | 30,284 | $ | 113,270 | ||||||||||
Allocated interest expense(3) | (34,274 | ) | (18,865 | ) | (14,958 | ) | (10,305 | ) | (7,741 | ) | (86,143 | ) | |||||||||||
Allocated general and administrative(4) | (4,857 | ) | (2,514 | ) | (2,067 | ) | (1,905 | ) | (6,836 | ) | (18,179 | ) | |||||||||||
Segment profit (loss)(5) | $ | (2,776 | ) | $ | 17,114 | $ | (3,141 | ) | $ | (17,956 | ) | $ | 15,707 | $ | 8,948 | ||||||||
Other significant non-cash items: | |||||||||||||||||||||||
Provision for loan losses | $ | 17,500 | $ | — | $ | — | $ | — | $ | — | $ | 17,500 | |||||||||||
Impairment of assets(3) | $ | — | $ | 520 | $ | 16,055 | $ | — | $ | (551 | ) | $ | 16,024 | ||||||||||
Depreciation and amortization(3) | $ | — | $ | 10,205 | $ | 6,023 | $ | 345 | $ | 666 | $ | 17,239 | |||||||||||
Capitalized expenditures | $ | — | $ | 413 | $ | 8,466 | $ | 2,201 | $ | — | $ | 11,080 | |||||||||||
As of December 31, 2012 | |||||||||||||||||||||||
Real estate | |||||||||||||||||||||||
Real estate, at cost | $ | — | $ | 1,639,320 | $ | 801,214 | $ | 786,114 | $ | — | $ | 3,226,648 | |||||||||||
Less: accumulated depreciation | — | (315,699 | ) | (109,634 | ) | (2,292 | ) | — | (427,625 | ) | |||||||||||||
Real estate, net | $ | — | $ | 1,323,621 | $ | 691,580 | $ | 783,822 | $ | — | $ | 2,799,023 | |||||||||||
Real estate available and held for sale | — | — | 454,587 | 181,278 | — | 635,865 | |||||||||||||||||
Total real estate | $ | — | $ | 1,323,621 | $ | 1,146,167 | $ | 965,100 | $ | — | $ | 3,434,888 | |||||||||||
Loans receivable, net | 1,829,985 | — | — | — | — | 1,829,985 | |||||||||||||||||
Other investments | — | 16,380 | 25,745 | 5,493 | 351,225 | 398,843 | |||||||||||||||||
Total portfolio assets | $ | 1,829,985 | $ | 1,340,001 | $ | 1,171,912 | $ | 970,593 | $ | 351,225 | $ | 5,663,716 | |||||||||||
Cash and other assets | 487,073 | ||||||||||||||||||||||
Total assets | $ | 6,150,789 |
(1) | Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This caption also includes the Company's joint venture investments and strategic investments that are not related to the other reportable segments above, including the Company's equity investment in LNR of $221.9 million and $205.8 million, as of March 31, 2013 and December 31, 2012, respectively, and the Company's share of equity in earnings from LNR of $14.7 million and $12.1 million for the three months ended March 31, |
(2) | Includes revenue and real estate expense reclassified to discontinued operations on the Company's Consolidated Statements of Operations. |
(3) | Includes related amounts reclassified to discontinued operations on the Company's Consolidated Statements of Operations. |
(4) | General and administrative excludes stock-based compensation expense of $5.2 million and $4.7 million for the three months ended March 31, 2013 and 2012, respectively. |
(5) | The following is a reconciliation of segment profit (loss) to net income (loss) ($ in thousands): |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Segment profit (loss) | $ | 14,193 | $ | 8,948 | |||
Less: Provision for loan losses | (10,206 | ) | (17,500 | ) | |||
Less: Impairment of assets | 32 | (16,024 | ) | ||||
Less: Stock-based compensation expense | (5,202 | ) | (4,666 | ) | |||
Less: Depreciation and amortization | (17,454 | ) | (17,239 | ) | |||
Less: Income tax (expense) benefit | (4,075 | ) | (1,271 | ) | |||
Add: Gain (loss) on early extinguishment of debt, net | (9,541 | ) | 1,704 | ||||
Net income (loss) | $ | (32,253 | ) | $ | (46,048 | ) |
For the Three Months Ended March 31, | ||||||||||||||
2013 | 2012 | $ Change | % Change | |||||||||||
(in thousands) | ||||||||||||||
Operating lease income | $ | 58,473 | $ | 53,123 | $ | 5,350 | 10 | % | ||||||
Interest income | 24,667 | 37,203 | (12,536 | ) | (34 | )% | ||||||||
Other income | 11,393 | 10,756 | 637 | 6 | % | |||||||||
Total revenue | $ | 94,533 | $ | 101,082 | $ | (6,549 | ) | (6 | )% | |||||
Interest expense | $ | 71,566 | $ | 85,344 | $ | (13,778 | ) | (16 | )% | |||||
Real estate expenses | 37,916 | 35,068 | 2,848 | 8 | % | |||||||||
Depreciation and amortization | 17,389 | 16,168 | 1,221 | 8 | % | |||||||||
General and administrative | 21,848 | 22,845 | (997 | ) | (4 | )% | ||||||||
Provision for loan losses | 10,206 | 17,500 | (7,294 | ) | (42 | )% | ||||||||
Impairment of assets | — | 749 | (749 | ) | (100 | )% | ||||||||
Other expense | 5,625 | 453 | 5,172 | >100% | ||||||||||
Total costs and expenses | $ | 164,550 | $ | 178,127 | $ | (13,577 | ) | (8 | )% | |||||
Gain (loss) on early extinguishment of debt, net | $ | (9,541 | ) | $ | 1,704 | $ | (11,245 | ) | >100% | |||||
Earnings from equity method investments | 21,678 | 34,786 | (13,108 | ) | (38 | )% | ||||||||
Income tax expense | (4,075 | ) | (1,271 | ) | (2,804 | ) | >100% | |||||||
Income (loss) from discontinued operations | 961 | (13,361 | ) | 14,322 | >100% | |||||||||
Gain from discontinued operations | 5,044 | 2,406 | 2,638 | >100% | ||||||||||
Income from sales of residential property | 23,697 | 6,733 | 16,964 | >100% | ||||||||||
Net income (loss) | $ | (32,253 | ) | $ | (46,048 | ) | $ | 13,795 | (30 | )% |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
(in thousands) | |||||||
Adjusted income | |||||||
Net income (loss) allocable to common shareholders | $ | (41,263 | ) | $ | (54,792 | ) | |
Add: Depreciation and amortization(1) | 17,454 | 17,239 | |||||
Add: Provision for loan losses | 10,206 | 17,500 | |||||
Add: Impairment of assets(2) | (32 | ) | 16,024 | ||||
Add: Stock-based compensation expense | 5,202 | 4,666 | |||||
Less: (Gain) loss on early extinguishment of debt, net | 9,541 | (1,704 | ) | ||||
Less: HPU/Participating Security allocation | (1,372 | ) | (1,765 | ) | |||
Adjusted income (loss) allocable to common shareholders | $ | (264 | ) | $ | (2,832 | ) |
(1) | For the three months ended March 31, 2013 and 2012, depreciation and amortization includes $65 and $1,071, respectively, of depreciation and amortization reclassified to discontinued operations. |
(2) | For the three months ended March 31, 2013 and 2012, impairment of assets includes ($32) and $15,275 of impairment of assets reclassified to discontinued operations. |
For the Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
(in thousands) | |||||||
Adjusted EBITDA | |||||||
Net income (loss) | $ | (32,253 | ) | $ | (46,048 | ) | |
Add: Interest expense(1) | 71,566 | 86,142 | |||||
Add: Income tax expense | 4,075 | 1,271 | |||||
Add: Depreciation and amortization(2) | 17,454 | 17,239 | |||||
EBITDA | $ | 60,842 | $ | 58,604 | |||
Add: Provision for loan losses | 10,206 | 17,500 | |||||
Add: Impairment of assets(3) | (32 | ) | 16,024 | ||||
Add: Stock-based compensation expense | 5,202 | 4,666 | |||||
Less: (Gain) loss on early extinguishment of debt, net | 9,541 | (1,704 | ) | ||||
Adjusted EBITDA | $ | 85,759 | $ | 95,090 |
(1) | For the three months ended March 31, 2012, interest expense includes $(798) of interest expense reclassified to discontinued operations. |
(2) | For the three months ended March 31, 2013 and 2012, depreciation and amortization includes $65 and $1,071, respectively, of depreciation and amortization reclassified to discontinued operations. |
(3) | For the three months ended March 31, 2013 and 2012, impairment of assets includes ($32) and $15,275 of impairment of assets reclassified to discontinued operations. |
As of | |||||||
March 31, 2013 | December 31, 2012 | ||||||
Non-performing loans | |||||||
Carrying value(1) | $ | 358,805 | $ | 503,112 | |||
As a percentage of total carrying value of loans | 22.7 | % | 27.5 | % | |||
Watch list loans | |||||||
Carrying value | $ | 41,742 | $ | 44,350 | |||
As a percentage of total carrying value of loans | 2.6 | % | 2.4 | % | |||
Reserve for loan losses | |||||||
Total reserve for loan losses | $ | 521,795 | $ | 524,499 | |||
As a percentage of total loans before loan loss reserves | 24.8 | % | 22.3 | % | |||
Non-performing loan asset-specific reserves for loan losses | $ | 465,837 | $ | 476,140 | |||
As a percentage of gross carrying value of non-performing loans | 56.5 | % | 48.6 | % |
Property/Collateral Types | Real Estate Finance | Net Lease Assets | Operating Properties | Land | Total | % of Total | |||||||||||||||||
Land | $ | 273,481 | $ | — | $ | — | $ | 976,925 | $ | 1,250,406 | 21.5 | % | |||||||||||
Office | 59,357 | 406,116 | 308,424 | — | 773,897 | 13.3 | % | ||||||||||||||||
Industrial / R&D | 94,818 | 558,945 | 58,528 | — | 712,291 | 12.3 | % | ||||||||||||||||
Entertainment / Leisure | 75,078 | 484,380 | — | — | 559,458 | 9.6 | % | ||||||||||||||||
Hotel | 296,474 | 136,080 | 91,019 | — | 523,573 | 9.0 | % | ||||||||||||||||
Condominium | 158,015 | — | 358,518 | — | 516,533 | 8.9 | % | ||||||||||||||||
Retail | 279,469 | 58,134 | 169,299 | — | 506,902 | 8.7 | % | ||||||||||||||||
Mixed Use / Mixed Collateral | 239,555 | — | 189,267 | — | 428,822 | 7.4 | % | ||||||||||||||||
Other Property Types | 137,309 | 9,788 | 24,541 | — | 171,638 | 3.0 | % | ||||||||||||||||
Strategic Investments | — | — | — | — | 363,199 | 6.3 | % | ||||||||||||||||
Total | $ | 1,613,556 | $ | 1,653,443 | $ | 1,199,596 | $ | 976,925 | $ | 5,806,719 | 100.0 | % |
(1) | Based on the carrying value of our total investment portfolio, gross of accumulated depreciation and general loan loss reserves. |
Geographic Region | Real Estate Finance | Net Lease Assets | Operating Properties | Land | Total | % of Total | |||||||||||||||||
West | $ | 272,196 | $ | 434,399 | $ | 261,739 | $ | 368,743 | $ | 1,337,077 | 23.0 | % | |||||||||||
Northeast | 375,015 | 385,487 | 187,924 | 184,726 | 1,133,152 | 19.5 | % | ||||||||||||||||
Southeast | 296,468 | 241,449 | 242,939 | 90,964 | 871,820 | 15.0 | % | ||||||||||||||||
Southwest | 193,186 | 227,988 | 218,135 | 118,868 | 758,177 | 13.1 | % | ||||||||||||||||
Mid-Atlantic | 28,498 | 125,578 | 207,516 | 180,850 | 542,442 | 9.4 | % | ||||||||||||||||
Central | 149,077 | 80,456 | 67,092 | 9,500 | 306,125 | 5.3 | % | ||||||||||||||||
International | 230,830 | — | — | — | 230,830 | 4.0 | % | ||||||||||||||||
Northwest | 68,269 | 80,947 | 14,251 | 23,274 | 186,741 | 3.1 | % | ||||||||||||||||
Various | 17 | 77,139 | — | — | 77,156 | 1.3 | % | ||||||||||||||||
Strategic Investments | — | — | — | 363,199 | 6.3 | % | |||||||||||||||||
Total | $ | 1,613,556 | $ | 1,653,443 | $ | 1,199,596 | $ | 976,925 | $ | 5,806,719 | 100.0 | % |
(1) | Based on the carrying value of our total investment portfolio, gross of accumulated depreciation and general loan loss reserves. |
(2) | Strategic investments includes $37.0 million of international assets. Additionally, international and strategic investments include $155.5 million of European assets, including $66.0 million in Germany and $89.5 million in the United Kingdom. |
Amounts Due By Period | |||||||||||||||||||||||
Total | Less Than 1 Year | 2 - 3 Years | 4 - 5 Years | 6 - 10 Years | After 10 Years | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Long-Term Debt Obligations: | |||||||||||||||||||||||
Secured credit facilities | $ | 2,203,723 | $ | — | $ | 60,309 | $ | 2,143,414 | $ | — | $ | — | |||||||||||
Unsecured notes | 1,787,745 | 745,855 | 367,168 | 674,722 | — | — | |||||||||||||||||
Convertible notes | 200,000 | — | — | 200,000 | — | — | |||||||||||||||||
Secured term loans | 263,489 | — | 853 | 18,329 | 233,112 | 11,195 | |||||||||||||||||
Other debt obligations | 100,000 | — | — | — | — | 100,000 | |||||||||||||||||
Total principal maturities | $ | 4,554,957 | $ | 745,855 | $ | 428,330 | $ | 3,036,465 | $ | 233,112 | $ | 111,195 | |||||||||||
Interest Payable(1) | 1,000,751 | 250,830 | 412,279 | 269,667 | 44,319 | 23,656 | |||||||||||||||||
Operating Lease Obligations | 31,406 | 5,288 | 9,208 | 8,491 | 8,419 | — | |||||||||||||||||
Total(2) | $ | 5,587,114 | $ | 1,001,973 | $ | 849,817 | $ | 3,314,623 | $ | 285,850 | $ | 134,851 |
(1) | All variable-rate debt assumes a 30-day LIBOR rate of 0.20% (the 30-day LIBOR rate at March 29, 2013). |
(2) | We also have issued letters of credit totaling $3.7 million in connection with four of our investments. See Unfunded Commitments below, for a discussion of certain unfunded commitments related to our lending and net lease businesses. |
As of | |||||||||||||||
March 31, 2013 | December 31, 2012 | ||||||||||||||
Encumbered Assets | Unencumbered Assets | Encumbered Assets | Unencumbered Assets | ||||||||||||
Real estate, net | $ | 1,649,658 | $ | 1,135,146 | $ | 1,794,198 | $ | 1,004,825 | |||||||
Real estate available and held for sale | 252,354 | 346,707 | 141,673 | 494,192 | |||||||||||
Loans receivable, net(1) | 1,076,080 | 537,476 | 1,197,373 | 665,712 | |||||||||||
Other investments | 34,130 | 369,629 | 43,545 | 355,298 | |||||||||||
Cash and other assets | — | 706,838 | — | 487,073 | |||||||||||
Total | $ | 3,012,222 | $ | 3,095,796 | $ | 3,176,789 | $ | 3,007,100 |
(1) | As of March 31, 2013 and December 31, 2012, the amounts presented exclude general reserves for loan losses of $30.9 million and $33.1 million, respectively. |
Loans | Real Estate | Strategic Investments | Total | ||||||||||||
Performance-Based Commitments | $ | 39,411 | $ | 33,064 | $ | — | $ | 72,475 | |||||||
Discretionary Fundings | 125 | — | — | 125 | |||||||||||
Strategic investments | — | — | 47,040 | 47,040 | |||||||||||
Total | $ | 39,536 | $ | 33,064 | $ | 47,040 | $ | 119,640 |
Exhibit Number | Document Description | |
1.1 | Underwriting Agreement, dated March 12, 2013, by and among the Company and Barclays Capital Inc. and the other several underwriters named therein, relating to the Series J Cumulative Convertible Perpetual Preferred Stock, par value $0.001 per share (incorporated by reference from the Company's Current Report on Form 8-K filed on March 18, 2013). | |
3.1 | Articles Supplementary designating the Series J Cumulative Convertible Perpetual Preferred Stock, par value $0.001 per share (incorporated by reference from the Company's Current Report on Form 8-K filed on March 18, 2013). | |
4.1 | Form of specimen certificate representing the Series J Cumulative Convertible Perpetual Preferred Stock, par value $0.001 per share (incorporated by reference from the Company's Current Report on Form 8-A filed on March 18, 2013). | |
10.1 | Credit Facility, by and among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, Barclays Bank PLC, as Syndication Agent and Bank of America, N.A., as Documentation Agent, dated as of dated as of February 11, 2013 (incorporated by reference from the Company's Current Report on Form 8-K filed on February 15, 2013). | |
31.1 | Certifications pursuant to Section 302 of the Sarbanes‑Oxley Act | |
32.1 | Certifications pursuant to Section 906 of the Sarbanes‑Oxley Act. | |
101 | The following financial information from the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2013 is formatted in XBRL ("eXtensible Business Reporting Language"): (i) the Consolidated Balance Sheets (unaudited) as of March 31, 2013 and December 31, 2012, (ii) the Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2013 and 2012, (iii) the Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, 2013 and 2012, (iv) the Consolidated Statement of Changes in Equity (unaudited) for the three months ended March 31, 2013, (v) the Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2013 and 2012 and (vi) the Notes to the Consolidated Financial Statements (unaudited).* |
* | In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934 and otherwise is not subject to liability under these sections. |
iSTAR FINANCIAL INC. Registrant | ||
Date: | May 6, 2013 | /s/ JAY SUGARMAN |
Jay Sugarman Chairman of the Board of Directors and Chief Executive Officer (principal executive officer) | ||
iSTAR FINANCIAL INC. Registrant | ||
Date: | May 6, 2013 | /s/ DAVID M. DISTASO |
David M. DiStaso Chief Financial Officer (principal financial and accounting officer) |
Date: | May 6, 2013 | By: | /s/ JAY SUGARMAN | |||
Name: | Jay Sugarman | |||||
Title: | Chief Executive Officer |
Date: | May 6, 2013 | By: | /s/ DAVID M. DISTASO | |||
Name: | David M. DiStaso | |||||
Title: | Chief Financial Officer (principal financial and accounting officer) |
Date: | May 6, 2013 | By: | /s/ JAY SUGARMAN | |||
Name: | Jay Sugarman | |||||
Title: | Chief Executive Officer |
Date: | May 6, 2013 | By: | /s/ DAVID M. DISTASO | |||
Name: | David M. DiStaso | |||||
Title: | Chief Financial Officer (principal financial and accounting officer) |
Segment Reporting (Tables)
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Mar. 31, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial measures for each segment based on which performance is evaluated | The Company has determined that it has four reportable segments based on how management reviews and manages its business. These reportable segments include: Real Estate Finance, Net Leasing, Operating Properties and Land. The Real Estate Finance segment includes all of the Company's activities related to senior and mezzanine real estate loans. The Net Leasing segment includes all of the Company's activities related to the ownership and leasing of corporate facilities. The Operating Properties segment includes all of the Company's activities and operations related to its commercial and residential properties. The Land segment includes the Company's activities related to its developable land portfolio. The Company evaluates performance based on the following financial measures for each segment, and has conformed the prior periods presentation for the change in composition of its business segments, ($ in thousands):
Explanatory Notes: _______________________________________________________________________________
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Reconciliation of segment profit (loss) to income (loss) from continuing operations | The following is a reconciliation of segment profit (loss) to net income (loss) ($ in thousands):
|
Loans Receivable, net (Details 4) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Recorded investment in loans, aged by payment status and presented by class | ||
Current | $ 1,304,918 | |
Less Than and Equal to 90 Days | 3,138 | |
Greater Than 90 Days | 804,707 | |
Total Past Due | 807,845 | |
Total | 2,112,763 | 2,364,315 |
Senior mortgages
|
||
Recorded investment in loans, aged by payment status and presented by class | ||
Current | 840,666 | |
Less Than and Equal to 90 Days | 3,138 | |
Greater Than 90 Days | 740,800 | |
Total Past Due | 743,938 | |
Total | 1,584,604 | |
Subordinate mortgages
|
||
Recorded investment in loans, aged by payment status and presented by class | ||
Current | 61,236 | |
Less Than and Equal to 90 Days | 0 | |
Greater Than 90 Days | 53,797 | |
Total Past Due | 53,797 | |
Total | 115,033 | |
Corporate/Partnership loans
|
||
Recorded investment in loans, aged by payment status and presented by class | ||
Current | 403,016 | |
Less Than and Equal to 90 Days | 0 | |
Greater Than 90 Days | 10,110 | |
Total Past Due | 10,110 | |
Total | $ 413,126 |
Real estate (Details 6) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
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Mar. 31, 2012
|
Dec. 31, 2012
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|
Real Estate [Abstract] | |||
Amortization expense related to real estate intangibles | $ 3.0 | $ 3.1 | |
Unamortized finite lived intangible assets | $ 56.9 | $ 59.9 |
Equity (Details 2) (Series J Preferred Stock, USD $)
In Millions, except Share data, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
---|---|---|---|
Series J Preferred Stock
|
|||
Class of Stock [Line Items] | |||
Preferred stock issued | $ 200.0 | ||
Preferred stock, stated percentage | 4.50% | ||
Preferred Stock Series, liquidation preference per share (in dollars per share) | $ 50 | $ 0 | $ 50 |
Convertible preferred stock, shares issued upon conversion | 3.9087 | ||
Convertible preferred stock, conversion price (in dollars per share) | $ 12.79 |
Loans Receivable, net (Details 5) (USD $)
|
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
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|||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | $ 1,047,364,000 | [1] | $ 1,154,237,000 | [1] | |||
Unpaid Principal Balance | 1,045,762,000 | [1] | 1,153,431,000 | [1] | |||
Related Allowance | (490,895,000) | [1] | (491,399,000) | [1] | |||
Loans modified through troubled debt restructurings | 222,700,000 | 175,000,000 | |||||
Average Recorded Investment | 1,100,800,000 | 1,483,308,000 | |||||
Interest Income Recognized | 1,548,000 | 1,727,000 | |||||
Senior mortgages
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 921,901,000 | [1] | 1,027,052,000 | [1] | |||
Unpaid Principal Balance | 920,668,000 | [1] | 1,026,346,000 | [1] | |||
Related Allowance | (442,256,000) | [1] | (442,760,000) | [1] | |||
Average Recorded Investment | 974,476,000 | 1,359,894,000 | |||||
Interest Income Recognized | 1,350,000 | 1,647,000 | |||||
Subordinate mortgages
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 53,797,000 | [1] | 53,979,000 | [1] | |||
Unpaid Principal Balance | 53,260,000 | [1] | 53,679,000 | [1] | |||
Related Allowance | (39,579,000) | [1] | (39,579,000) | [1] | |||
Average Recorded Investment | 53,888,000 | 50,345,000 | |||||
Interest Income Recognized | 0 | 0 | |||||
Corporate/Partnership loans
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 71,666,000 | [1] | 73,206,000 | [1] | |||
Unpaid Principal Balance | 71,834,000 | [1] | 73,406,000 | [1] | |||
Related Allowance | (9,060,000) | [1] | (9,060,000) | [1] | |||
Average Recorded Investment | 72,436,000 | 73,069,000 | |||||
Interest Income Recognized | 198,000 | 80,000 | |||||
With no related allowance recorded
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 28,821,000 | [1] | 118,187,000 | [1] | |||
Unpaid Principal Balance | 28,751,000 | [1] | 118,010,000 | [1] | |||
Related Allowance | 0 | [1] | 0 | [1] | |||
Average Recorded Investment | 73,504,000 | 222,913,000 | |||||
Interest Income Recognized | 964,000 | 407,000 | |||||
With no related allowance recorded | Senior mortgages
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 18,711,000 | [1] | 108,077,000 | [1] | |||
Unpaid Principal Balance | 18,591,000 | [1] | 107,850,000 | [1] | |||
Related Allowance | 0 | [1] | 0 | [1] | |||
Average Recorded Investment | 63,394,000 | 212,803,000 | |||||
Interest Income Recognized | 844,000 | 407,000 | |||||
With no related allowance recorded | Corporate/Partnership loans
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 10,110,000 | [1] | 10,110,000 | [1] | |||
Unpaid Principal Balance | 10,160,000 | [1] | 10,160,000 | [1] | |||
Related Allowance | 0 | [1] | 0 | [1] | |||
Average Recorded Investment | 10,110,000 | 10,110,000 | |||||
Interest Income Recognized | 120,000 | 0 | |||||
With an allowance recorded
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 1,018,543,000 | [1] | 1,036,050,000 | [1] | |||
Unpaid Principal Balance | 1,017,011,000 | [1] | 1,035,421,000 | [1] | |||
Related Allowance | (490,895,000) | [1] | (491,399,000) | [1] | |||
Average Recorded Investment | 1,027,296,000 | 1,260,395,000 | |||||
Interest Income Recognized | 584,000 | 1,320,000 | |||||
With an allowance recorded | Senior mortgages
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 903,190,000 | [1] | 918,975,000 | [1] | |||
Unpaid Principal Balance | 902,077,000 | [1] | 918,496,000 | [1] | |||
Related Allowance | (442,256,000) | [1] | (442,760,000) | [1] | |||
Average Recorded Investment | 911,082,000 | 1,147,091,000 | |||||
Interest Income Recognized | 506,000 | 1,240,000 | |||||
With an allowance recorded | Subordinate mortgages
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 53,797,000 | [1] | 53,979,000 | [1] | |||
Unpaid Principal Balance | 53,260,000 | [1] | 53,679,000 | [1] | |||
Related Allowance | (39,579,000) | [1] | (39,579,000) | [1] | |||
Average Recorded Investment | 53,888,000 | 50,345,000 | |||||
Interest Income Recognized | 0 | 0 | |||||
With an allowance recorded | Corporate/Partnership loans
|
|||||||
Financing Receivable, Impaired [Line Items] | |||||||
Recorded Investment | 61,556,000 | [1] | 63,096,000 | [1] | |||
Unpaid Principal Balance | 61,674,000 | [1] | 63,246,000 | [1] | |||
Related Allowance | (9,060,000) | [1] | (9,060,000) | [1] | |||
Average Recorded Investment | 62,326,000 | 62,959,000 | |||||
Interest Income Recognized | $ 78,000 | $ 80,000 | |||||
|
Fair Values (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
|||
---|---|---|---|---|---|
Recurring basis | Total
|
|||||
Assets and liabilities recorded at fair value | |||||
Derivative assets | $ 10,522 | ||||
Derivative liabilities | 455 | 3,435 | |||
Recurring basis | Quoted market prices in active markets (Level 1)
|
|||||
Assets and liabilities recorded at fair value | |||||
Derivative assets | 0 | ||||
Derivative liabilities | 0 | 0 | |||
Recurring basis | Significant other observable inputs (Level 2)
|
|||||
Assets and liabilities recorded at fair value | |||||
Derivative assets | 10,522 | ||||
Derivative liabilities | 455 | 3,435 | |||
Recurring basis | Significant unobservable inputs (Level 3)
|
|||||
Assets and liabilities recorded at fair value | |||||
Derivative assets | 0 | ||||
Derivative liabilities | 0 | 0 | |||
Non-recurring basis | Total
|
|||||
Assets and liabilities recorded at fair value | |||||
Impaired loans | 84,800 | [1] | 57,201 | ||
Impaired real estate | 31,597 | ||||
Non-recurring basis | Quoted market prices in active markets (Level 1)
|
|||||
Assets and liabilities recorded at fair value | |||||
Impaired loans | 0 | [1] | 0 | ||
Impaired real estate | 0 | ||||
Non-recurring basis | Significant other observable inputs (Level 2)
|
|||||
Assets and liabilities recorded at fair value | |||||
Impaired loans | 0 | [1] | 0 | ||
Impaired real estate | 7,649 | ||||
Non-recurring basis | Significant unobservable inputs (Level 3)
|
|||||
Assets and liabilities recorded at fair value | |||||
Impaired loans | 84,800 | [1] | 57,201 | ||
Impaired real estate | $ 23,948 | ||||
|
Real estate (Details 4) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Real Estate [Abstract] | ||
Revenues | $ 1,938 | $ 4,903 |
Total expenses | (1,009) | (2,989) |
Impairment of assets | 32 | (15,275) |
Income (loss) from discontinued operations | $ 961 | $ (13,361) |
Debt Obligations, net (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt obligations | As of March 31, 2013 and December 31, 2012, the Company's debt obligations were as follows ($ in thousands):
Explanatory Notes: _______________________________________________________________________________
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Schedule of future scheduled maturities of outstanding long-term debt obligations, net | Future Scheduled Maturities—As of March 31, 2013, future scheduled maturities of outstanding debt obligations are as follows ($ in thousands):
|
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Schedule of carrying value of encumbered assets by asset type | Unencumbered/Encumbered Assets—As of March 31, 2013, the carrying value of the Company's unencumbered and encumbered assets by asset type are as follows ($ in thousands):
Explanatory Note: _______________________________________________________________________________
|
Fair Values (Details 2) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
---|---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Loans receivable, net | $ 1,582,656 | $ 1,829,985 | $ 1,829,985 |
Debt obligations, net | 4,494,637 | 4,691,494 | |
Book Value
|
|||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Loans receivable, net | 1,900,000 | ||
Debt obligations, net | 4,900,000 | ||
Fair Value
|
|||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Loans receivable, net | 1,700,000 | ||
Debt obligations, net | 4,800,000 | ||
Letter of Intent from Borrower
|
|||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Impaired loans | 53,000 | ||
Trade Offer in Market
|
|||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Impaired loans | 30,800 | ||
Expected Net Proceeds in Auction
|
|||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Impaired loans | $ 1,000 |
Equity (Details 5) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Accumulated other comprehensive income (loss) reflected in the Company's shareholders' equity | ||
Unrealized gains on available-for-sale securities | $ 1,092 | $ 867 |
Unrealized gains on cash flow hedges | 718 | 607 |
Unrealized losses on cumulative translation adjustment | (3,274) | (2,659) |
Accumulated other comprehensive income (loss) | $ (1,464) | $ (1,185) |
Other Investments (Details) (USD $)
|
1 Months Ended | 3 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2010
|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
Sep. 30, 2012
|
Jul. 28, 2010
|
||||||||
Equity method investments | ||||||||||||||
Equity method investments | $ 394,000,000 | $ 387,718,000 | ||||||||||||
Earnings (loss) from equity method investments | 21,678,000 | 34,786,000 | ||||||||||||
Other, carrying value | 9,759,000 | 11,125,000 | ||||||||||||
Total other investments, carrying value | 403,759,000 | 398,843,000 | 398,843,000 | |||||||||||
Income Statements | ||||||||||||||
iStar's equity in earnings from LNR | 21,678,000 | 34,786,000 | ||||||||||||
LNR Property LLC (LNR)
|
||||||||||||||
Equity method investments | ||||||||||||||
Equity method investments | 221,912,000 | 205,773,000 | ||||||||||||
Earnings (loss) from equity method investments | 14,746,000 | 14,746,000 | [1] | 12,137,000 | 12,137,000 | [1] | ||||||||
Percentage of ownership acquired by the Company and a group of investors | 100.00% | |||||||||||||
Contribution towards principal amount of Holdco Notes | 100,000,000 | |||||||||||||
Amount of cash contributed in exchange for equity interest | 100,000,000 | |||||||||||||
Equity interest in investee | 120,000,000 | |||||||||||||
Income Statements | ||||||||||||||
Total revenue | 77,780,000 | [1],[2] | 77,360,000 | [1],[2] | ||||||||||
Other Income | 164,582,000 | [1] | 20,936,000 | [1] | ||||||||||
Income tax expense | 279,000 | [1] | 1,837,000 | [1] | ||||||||||
Net income attributable to LNR | 189,249,000 | [1] | 50,621,000 | [1] | ||||||||||
iStar's ownership percentage | 24.00% | [1] | 24.00% | [1] | 24.00% | [1] | 24.00% | |||||||
Subtotal | 45,420,000 | [1] | 12,137,000 | [1] | ||||||||||
Basis difference(3) | (30,674,000) | [1] | 0 | [1] | ||||||||||
iStar's equity in earnings from LNR | 14,746,000 | 14,746,000 | [1] | 12,137,000 | 12,137,000 | [1] | ||||||||
Balance Sheets | ||||||||||||||
Total assets(2) | 1,610,143,000 | [1],[2] | 1,384,337,000 | [1],[2] | ||||||||||
Total debt(2) | 468,355,000 | [1],[2] | 398,912,000 | [1],[2] | ||||||||||
Total liabilities(2) | 553,150,000 | [1],[2] | 517,088,000 | [1],[2] | ||||||||||
Noncontrolling interests | 1,588,000 | [1] | 1,560,000 | [1] | ||||||||||
LNR Property LLC equity | 1,055,405,000 | [1] | 865,689,000 | [1] | ||||||||||
iStar's equity in LNR | 221,912,000 | [1] | 205,773,000 | [1] | ||||||||||
LNR and certain commercial mortgage backed securities and collateralized debt obligation trusts that are considered VIEs
|
||||||||||||||
Balance Sheets | ||||||||||||||
Total VIE trust assets | 91,060,000,000 | 97,520,000,000 | ||||||||||||
Total VIE trust liabilities | 90,740,000,000 | 97,210,000,000 | ||||||||||||
Servicing fee revenue | 29,300,000 | 28,700,000 | ||||||||||||
Madison Funds
|
||||||||||||||
Equity method investments | ||||||||||||||
Equity method investments | 56,245,000 | 56,547,000 | ||||||||||||
Earnings (loss) from equity method investments | 2,259,000 | 9,498,000 | ||||||||||||
Income Statements | ||||||||||||||
iStar's equity in earnings from LNR | 2,259,000 | 9,498,000 | ||||||||||||
Madison International Real Estate Fund IILP
|
||||||||||||||
Income Statements | ||||||||||||||
iStar's ownership percentage | 29.52% | |||||||||||||
Madison International Real Estate Fund IIILP
|
||||||||||||||
Income Statements | ||||||||||||||
iStar's ownership percentage | 32.92% | |||||||||||||
Madison GP1 Investors LP
|
||||||||||||||
Income Statements | ||||||||||||||
iStar's ownership percentage | 29.52% | |||||||||||||
Oak Hill Funds
|
||||||||||||||
Equity method investments | ||||||||||||||
Equity method investments | 26,794,000 | 29,840,000 | ||||||||||||
Earnings (loss) from equity method investments | 1,157,000 | 3,374,000 | ||||||||||||
Income Statements | ||||||||||||||
iStar's equity in earnings from LNR | 1,157,000 | 3,374,000 | ||||||||||||
Oak Hill Funds Group 2
|
||||||||||||||
Income Statements | ||||||||||||||
iStar's ownership percentage | 5.92% | |||||||||||||
Real estate equity investments
|
||||||||||||||
Equity method investments | ||||||||||||||
Equity method investments | 40,560,000 | 47,619,000 | ||||||||||||
Earnings (loss) from equity method investments | 1,763,000 | 6,771,000 | ||||||||||||
Income Statements | ||||||||||||||
iStar's equity in earnings from LNR | 1,763,000 | 6,771,000 | ||||||||||||
Other equity method investments
|
||||||||||||||
Equity method investments | ||||||||||||||
Equity method investments | 48,489,000 | 47,939,000 | ||||||||||||
Earnings (loss) from equity method investments | 1,753,000 | 3,006,000 | ||||||||||||
Income Statements | ||||||||||||||
iStar's equity in earnings from LNR | 1,753,000 | 3,006,000 | ||||||||||||
Minimum | Real estate equity investments
|
||||||||||||||
Income Statements | ||||||||||||||
iStar's ownership percentage | 31.00% | |||||||||||||
Maximum | Real estate equity investments
|
||||||||||||||
Income Statements | ||||||||||||||
iStar's ownership percentage | 70.00% | |||||||||||||
Net Lease Assets | Real estate equity investments
|
||||||||||||||
Equity method investments | ||||||||||||||
Equity method investments | 16,400,000 | 16,400,000 | ||||||||||||
Operating Properties | Real estate equity investments
|
||||||||||||||
Equity method investments | ||||||||||||||
Equity method investments | 20,300,000 | 25,700,000 | ||||||||||||
Earnings (loss) from equity method investments | 2,500,000 | 8,000,000 | ||||||||||||
Income Statements | ||||||||||||||
iStar's ownership percentage | 33.00% | |||||||||||||
iStar's equity in earnings from LNR | 2,500,000 | 8,000,000 | ||||||||||||
Land | Real estate equity investments
|
||||||||||||||
Equity method investments | ||||||||||||||
Equity method investments | $ 3,900,000 | $ 5,500,000 | ||||||||||||
|
Segment Reporting (Details 2) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|||||
Reconciliation of segment profit (loss) to income (loss) from continuing operations | ||||||
Segment profit (loss) | $ 14,193 | [1] | $ 8,948 | [1] | ||
Less: Provision for loan losses | (10,206) | (17,500) | ||||
Less: Impairment of assets | 32 | (16,024) | ||||
Less: Stock-based compensation expense | (5,202) | (4,666) | ||||
Less: Depreciation and amortization | (17,454) | (17,239) | ||||
Less: Income tax (expense) benefit | (4,075) | (1,271) | ||||
Add: Gain (loss) on early extinguishment of debt, net | (9,541) | 1,704 | ||||
Net income (loss) | $ (32,253) | $ (46,048) | ||||
|
Earnings Per Share (Details 2)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Joint venture shares
|
||
Anti-dilutive shares | ||
Anti-dilutive shares | 298 | 298 |
Stock options
|
||
Anti-dilutive shares | ||
Anti-dilutive shares | 0 | 44 |
3% Senior convertible unsecured notes
|
||
Anti-dilutive shares | ||
Anti-dilutive shares | 16,992 | 0 |
Series J Preferred Stock
|
||
Anti-dilutive shares | ||
Anti-dilutive shares | 15,635 | 0 |
Equity (Details 3) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Dec. 31, 2011
|
|
Dividends [Abstract] | ||
Minimum percentage of taxable income (excluding net capital gains) to be distributed in order to qualify as REIT | 90.00% | |
Percentage of taxable income (including net capital gains) to be distributed in order to qualify as REIT | 100.00% | |
Operating loss carryforwards | $ 423.9 |
Segment Reporting
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
|
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting The Company has determined that it has four reportable segments based on how management reviews and manages its business. These reportable segments include: Real Estate Finance, Net Leasing, Operating Properties and Land. The Real Estate Finance segment includes all of the Company's activities related to senior and mezzanine real estate loans. The Net Leasing segment includes all of the Company's activities related to the ownership and leasing of corporate facilities. The Operating Properties segment includes all of the Company's activities and operations related to its commercial and residential properties. The Land segment includes the Company's activities related to its developable land portfolio. The Company evaluates performance based on the following financial measures for each segment, and has conformed the prior periods presentation for the change in composition of its business segments, ($ in thousands):
Explanatory Notes: _______________________________________________________________________________
|
Real estate (Details 8) (USD $)
|
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|
Real Estate Properties [Line Items] | |||
Real estate available and held for sale | $ 599,061,000 | $ 635,865,000 | $ 635,865,000 |
Proceeds from sale of other real estate | 75,200,000 | 49,500,000 | |
Income from sales of residential property | 23,697,000 | 6,733,000 | |
Residential Operating Properties
|
|||
Real Estate Properties [Line Items] | |||
Real estate available and held for sale | 353,200,000 | 374,100,000 | |
Land
|
|||
Real Estate Properties [Line Items] | |||
Real estate available and held for sale | 179,716,000 | 181,278,000 | |
Commercial Operating Properties
|
|||
Real Estate Properties [Line Items] | |||
Real estate available and held for sale | 56,400,000 | 80,500,000 | |
Net Lease Assets
|
|||
Real Estate Properties [Line Items] | |||
Real estate available and held for sale | $ 9,766,000 | $ 0 |
Basis of Presentation and Principles of Consolidation (Reclassification) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Jun. 30, 2012
|
Mar. 31, 2012
As Previously Reported
|
Jun. 30, 2012
As Previously Reported
|
Mar. 31, 2012
Change
|
Jun. 30, 2012
Change
|
Dec. 31, 2011
Change
|
Dec. 31, 2010
Change
|
|
Cash flows from operating activities | $ (83,691) | $ (51,877) | $ (67,055) | $ (35,770) | $ (57,196) | $ (16,107) | $ (9,859) | $ 3,200 | $ 1,500 |
Cash flows from investing activities | 311,477 | (298,067) | 216,006 | (307,926) | 206,147 | 9,859 | 9,859 | (10,200) | |
Cash flows from financing activities | $ (15,736) | $ 119,977 | $ 113,729 | $ 6,248 | $ 7,000 | $ (1,500) |
Stock-Based Compensation Plans and Employee Benefits (Details 2) (USD $)
In Millions, except Share data, unless otherwise specified |
3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Mar. 31, 2013
Amended restricted stock units that vested on January 1, 2012
|
Mar. 31, 2013
Performance-based restricted stock units
|
Mar. 31, 2013
Company's chairman and chief executive officer
Performance-based restricted stock units
|
Mar. 31, 2013
Company's chairman and chief executive officer
Service-based restricted stock units
installments
|
Sep. 30, 2011
Executives and other officers
Market-condition based restricted stock units granted on December 19, 2008, modified and measured on July 1, 2011
|
Mar. 31, 2013
Executives and other officers
Market-condition based restricted stock units granted on December 19, 2008, modified and measured on July 1, 2011
|
Mar. 31, 2013
Employees
Restricted stock units
|
Mar. 31, 2013
Employees
Service based restricted stock units that vested on February 17, 2012
|
Mar. 31, 2013
Employees
Annual incentive restricted stock units granted and vested to employees in February 2013
|
Mar. 31, 2013
Employees
Performance-based restricted stock units, vesting on December 31, 2013 [Member]
|
Mar. 31, 2013
Employees
Performance-based restricted stock units, vesting on December 31, 2014 [Member]
|
Mar. 31, 2013
Employees
Service-based restricted stock units
|
Mar. 31, 2013
Employees
Service based restricted stock units with specified vesting dates
|
Mar. 31, 2013
Former director
CSE and restricted stock units
|
Mar. 31, 2013
Directors
CSE and restricted stock units
|
Mar. 31, 2013
Minimum
Employees
Performance-based restricted stock units
|
Mar. 31, 2013
Minimum
Employees
Service based restricted stock units with specified vesting dates
|
Mar. 31, 2013
Maximum
Employees
Performance-based restricted stock units
|
Mar. 31, 2013
Maximum
Employees
Service based restricted stock units with specified vesting dates
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||
Vested (in shares) | 1,719,304 | 2,401,141 | 164,685 | ||||||||||||||||||
Amount RSU's issued net of statuatory minimum required tax witholdings (in shares) | 1,359,948 | ||||||||||||||||||||
Granted (in shares) | 313,334 | 185,720 | 97,901 | 195,806 | 198,364 | 333,660 | |||||||||||||||
Performance measurement period | 1 year | 2 years | |||||||||||||||||||
Vesting percentage | 0.00% | 200.00% | |||||||||||||||||||
Risk-free interest rate | 0.26% | ||||||||||||||||||||
Expected stock price volatility | 50.44% | ||||||||||||||||||||
Shares outstanding (in shares) | 1,200,000 | 1,714,303 | 140,331 | ||||||||||||||||||
Vesting installments | 2 | ||||||||||||||||||||
Percentage of original units granted equal to amended units | 75.00% | ||||||||||||||||||||
Vesting term | 2 years | 3 years | |||||||||||||||||||
Shares issued for settlement (in shares) | 51,091 | ||||||||||||||||||||
Aggregate intrinsic value for directors | $ 3.6 | ||||||||||||||||||||
Gross contributions made by the Company | $ 0.5 | $ 0.6 |
Earnings Per Share (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of income (loss) from continuing operations used in the basic and diluted EPS calculations | The following table presents a reconciliation of income (loss) from continuing operations used in the basic and diluted earnings per share calculations ($ in thousands, except for per share data):
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Schedule of earnings per share allocable to common shares and HPU shares |
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Schedule of anti-dilutive shares | For the three months ended March 31, 2013 and 2012, the following shares were anti-dilutive ($ in thousands):
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Loans Receivable, net (Details 2) (USD $)
|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
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---|---|---|---|---|---|---|---|---|---|---|---|---|
Loans | ||||||||||||
Individually Evaluated for Impairment(1) | $ 1,041,847,000 | [1] | $ 1,095,957,000 | [1] | ||||||||
Collectively Evaluated for Impairment(2) | 1,055,342,000 | [2] | 1,210,077,000 | [2] | ||||||||
Loans Acquired with Deteriorated Credit Quality(3) | 15,574,000 | [3] | 58,281,000 | [3] | ||||||||
Total | 2,112,763,000 | 2,364,315,000 | ||||||||||
Less: Reserve for loan losses | ||||||||||||
Individually Evaluated for Impairment(1) | (486,379,000) | [1] | (472,058,000) | [1] | ||||||||
Collectively Evaluated for Impairment(2) | (30,900,000) | [2] | (33,100,000) | [2] | ||||||||
Loans Acquired with Deteriorated Credit Quality(3) | (4,516,000) | [3] | (19,341,000) | [3] | ||||||||
Total | (521,795,000) | (524,499,000) | (567,179,000) | (646,624,000) | ||||||||
Total | ||||||||||||
Individually Evaluated for Impairment(1) | 555,468,000 | [1] | 623,899,000 | [1] | ||||||||
Collectively Evaluated for Impairment(2) | 1,024,442,000 | [2] | 1,176,977,000 | [2] | ||||||||
Loans Acquired with Deteriorated Credit Quality(3) | 11,058,000 | [3] | 38,940,000 | [3] | ||||||||
Total | 1,590,968,000 | 1,839,816,000 | ||||||||||
Unamortized discounts, premiums, deferred fees and costs, individually evaluated for impairment, net premium (discount) | 3,500,000 | 4,000,000 | ||||||||||
Unamortized discounts, premiums, deferred fees and costs, collectively evaluated for impairment, net premium (discount) | 4,100,000 | 3,800,000 | ||||||||||
Unamortized discounts, premiums, deferred fees and costs, loans acquired with deteriorated credit quality, net premium (discount) | 100,000 | 100,000 | ||||||||||
Cumulative principal balances of loans acquired with deteriorated credit quality | $ 15,900,000 | $ 58,800,000 | ||||||||||
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Risk Management and Derivatives (Details 1) (USD $)
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3 Months Ended | |
---|---|---|
Mar. 31, 2013
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Mar. 31, 2012
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Derivative financial instruments on consolidated statements of operations | ||
Gain (loss) on foreign investments | $ (100,000) | $ (100,000) |
Cash flow interest rate swap | Designated as hedge
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Derivative financial instruments on consolidated statements of operations | ||
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion) | 37,000 | (205,000) |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion) | 74,000 | (5,000) |
Foreign exchange contracts | Not designated as hedge
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Derivative financial instruments on consolidated statements of operations | ||
Amount of Gain or (Loss) Recognized in Income on Derivative | $ 10,156,000 | $ (8,859,000) |
Debt Obligations, net (Details 2) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Aggregate amounts of principal maturities of long-term debt | ||
2013 (remaining nine months) | $ 545,254 | |
2014 | 201,454 | |
2015 | 105,765 | |
2016 | 521,712 | |
2017 | 2,518,136 | |
Thereafter | 662,636 | |
Total principal maturities | 4,554,957 | 4,745,807 |
Unamortized debt discounts, net | (60,320) | (54,313) |
Total long-term debt obligations, net | 4,494,637 | 4,691,494 |
Unsecured Debt
|
||
Aggregate amounts of principal maturities of long-term debt | ||
2013 (remaining nine months) | 545,254 | |
2014 | 200,601 | |
2015 | 105,765 | |
2016 | 461,403 | |
2017 | 374,722 | |
Thereafter | 400,000 | |
Total principal maturities | 2,087,745 | |
Unamortized debt discounts, net | (17,358) | |
Total long-term debt obligations, net | 2,070,387 | |
Secured Debt
|
||
Aggregate amounts of principal maturities of long-term debt | ||
2013 (remaining nine months) | 0 | |
2014 | 853 | |
2015 | 0 | |
2016 | 60,309 | |
2017 | 2,143,414 | |
Thereafter | 262,636 | |
Total principal maturities | 2,467,212 | |
Unamortized debt discounts, net | (42,962) | |
Total long-term debt obligations, net | $ 2,424,250 |
Real estate (Details 5) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Real Estate [Abstract] | ||
Impairment of assets held for use and sale carve-outs | $ 16.1 | |
Impairment of assets to be disposed of | $ 15.3 |
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
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Cash flows from operating activities: | ||||||
Net income (loss) | $ (32,253) | $ (46,048) | ||||
Adjustments to reconcile net income (loss) to cash flows from operating activities: | ||||||
Provision for loan losses | 10,206 | 17,500 | ||||
Impairment of assets | 0 | 17,807 | ||||
Depreciation and amortization | 17,354 | 17,238 | ||||
Payments for withholding taxes upon vesting of stock-based compensation | (9,894) | (11,657) | ||||
Non-cash expense for stock-based compensation | 5,202 | 4,666 | ||||
Amortization of discounts/premiums and deferred financing costs on debt | 5,000 | 8,698 | ||||
Amortization of discounts/premiums and deferred interest on loans | (6,853) | (11,773) | ||||
Earnings from equity method investments | (21,678) | (34,786) | ||||
Distributions from operations of equity method investments | 6,109 | 11,358 | ||||
Deferred operating lease income | (3,592) | (2,516) | ||||
Income from sales of residential property | (23,697) | (6,733) | ||||
Gain from discontinued operations | (5,044) | (2,406) | ||||
(Gain) loss on early extinguishment of debt, net | 9,541 | (1,704) | ||||
Repayments and repurchases of debt - debt discount(1) | (20,057) | [1] | (6,248) | [1] | ||
Other operating activities, net | 1,537 | 1,679 | ||||
Changes in assets and liabilities: | ||||||
Changes in accrued interest and operating lease income receivable, net | 973 | 1,581 | ||||
Changes in deferred expenses and other assets, net | (12,420) | (14,326) | ||||
Changes in accounts payable, accrued expenses and other liabilities | (4,125) | 5,793 | ||||
Cash flows from operating activities | (83,691) | (51,877) | ||||
Cash flows from investing activities: | ||||||
Investment originations and fundings | (22,111) | (8,376) | ||||
Capital expenditures on real estate assets | (16,314) | (11,080) | ||||
Contributions to unconsolidated entities | (1,448) | (3,570) | ||||
Repayments of and principal collections on loans | 193,288 | 146,242 | ||||
Net proceeds from sales of loans | 37,703 | 0 | ||||
Net proceeds from sales of real estate assets | 107,192 | 57,859 | ||||
Distributions from unconsolidated entities | 13,024 | 13,655 | ||||
Changes in restricted cash held in connection with investing activities | (56) | (492,854) | ||||
Other investing activities, net | 199 | 57 | ||||
Cash flows from investing activities | 311,477 | (298,067) | ||||
Cash flows from financing activities: | ||||||
Borrowings under secured credit facilities | 658,700 | 864,750 | ||||
Repayments under secured credit facilities | (844,766) | (88,896) | ||||
Repayments under unsecured credit facilities | 0 | (244,046) | ||||
Repayments under secured term loans | (1,796) | (2,138) | ||||
Repayments under unsecured notes | 0 | (169,383) | ||||
Repurchases and redemptions of secured and unsecured notes | 0 | (214,194) | ||||
Payments for deferred financing costs | (1,227) | (14,584) | ||||
Preferred dividends paid | (10,580) | (10,580) | ||||
Net proceeds from issuance of preferred shares | 193,510 | 0 | ||||
Other financing activities, net | (9,577) | (952) | ||||
Cash flows from financing activities | (15,736) | 119,977 | ||||
Changes in cash and cash equivalents | 212,050 | (229,967) | ||||
Cash and cash equivalents at beginning of period | 256,344 | 356,826 | ||||
Cash and cash equivalents at end of period | $ 468,394 | $ 126,859 | ||||
|
Debt Obligations, net (Details 3) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
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---|---|---|---|---|---|---|---|---|
Debt Disclosure [Abstract] | ||||||||
Real estate, net (Encumbered Assets) | $ 1,649,658 | $ 1,794,198 | ||||||
Real estate available and held for sale (Encumbered Assets) | 252,354 | 141,673 | ||||||
Loans receivable, net (Encumbered Assets) | 1,076,080 | [1] | 1,197,373 | [1] | ||||
Other investments (Encumbered Assets) | 34,130 | 43,545 | ||||||
Cash and other assets (Encumbered Assets) | 0 | 0 | ||||||
Total (Encumbered Assets) | 3,012,222 | 3,176,789 | ||||||
Real estate, net (Unencumbered Assets) | 1,135,146 | 1,004,825 | ||||||
Real estate available and held for sale (Unencumbered Assets) | 346,707 | 494,192 | ||||||
Loans receivable, net (Unencumbered Assets) | 537,476 | [1] | 665,712 | [1] | ||||
Other investments (Unencumbered Assets) | 369,629 | 355,298 | ||||||
Cash and other assets (Unencumbered Assets) | 706,838 | 487,073 | ||||||
Total (Unencumbered Assets) | 3,095,796 | 3,007,100 | ||||||
Reserve for loan losses | $ 30,900 | [2] | $ 33,100 | [2] | ||||
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