Colony Capital, Inc. (NYSE:CLNY) and subsidiaries (collectively,
“Colony Capital,” or the “Company”) today announced its financial
results for the first quarter ended March 31, 2019 and the
Company’s Board of Directors declared a second quarter 2019 cash
dividend of $0.11 per share to holders of Class A and Class B
common stock.
First Quarter 2019 Financial Results and Highlights
- First quarter 2019 net loss
attributable to common stockholders of $(102.1) million, or $(0.21)
per share, and Core FFO of $47.7 million, or $0.09 per share
- Core FFO of $75.4 million, or $0.15 per
share, excluding net investment losses of $27.7 million, which were
composed of $14.1 million of losses on sale of and provision for
loan losses on certain Other Equity & Debt investments and
$13.6 million for our share of certain investment losses realized
by Colony Credit Real Estate, Inc. (NYSE: CLNC)
- The Company’s Board of Directors
declared and paid a first quarter 2019 dividend of $0.11 per share
to holders of Class A and B common stock
- The Company closed on commitments of
$310 million in third-party capital (including amounts related to
affiliates)
- The Company completed the planned sale
and/or monetization of $190 million of assets within the Other
Equity and Debt segment resulting in net equity proceeds of $93
million
- The Company refinanced three near-term
maturing loans with an aggregate consolidated balance of $266
million, or CLNY OP share of $222 million, in its Healthcare and
Hospitality Real Estate segments extending term to 2024 at slightly
more favorable interest rates on average
- The Company, through its Industrial
platform, closed on the acquisition of a $1.2 billion value-add
portfolio of 54 light and bulk industrial buildings located across
10 U.S. markets totaling approximately 11.9 million square
feet
- Subsequent to the first quarter
2019:
- The Company completed its acquisition
of Abraaj Group’s private equity platform in Latin America, which
has been renamed Colony Latam Partners
- Digital Colony entered into a
definitive agreement to acquire Zayo Group Holdings, Inc., which
provides mission critical bandwidth to the world’s most impactful
companies, for $14.3 billion with a co-sponsor; separately Digital
Colony completed the acquisition of Cogeco Peer 1, a leading
Canadian provider of colocation, network connectivity and managed
services through its substantial fiber and data center assets, for
C$720 million
- The Company completed the planned sale
and/or monetization of $101 million of assets and net equity
proceeds within the Other Equity and Debt segment
- The Company achieved approximately 60%
of the expected total $50 to $55 million ($45 to $50 million on a
cash basis) of the previously announced annual compensation and
administrative cost savings on a run rate basis
- The Company amended certain terms of
its revolving credit facility agreement including a reduction of
aggregate revolving commitments from $1 billion to $750 million and
a modification of a financial covenant and the borrowing base
formula
- As of May 7, 2019, the Company had over
$850 million of liquidity through availability under its revolving
credit facility and cash-on-hand
For more information and a reconciliation of net income/(loss)
to common stockholders to Core FFO and/or NOI, please refer to the
non-GAAP financial measure definitions and tables at the end of
this press release.
First Quarter 2019 Operating Results and Investment Activity
by Segment
Colony Capital holds investment interests in six reportable
segments: Healthcare Real Estate; Industrial Real Estate;
Hospitality Real Estate; CLNC; Other Equity and Debt; and
Investment Management.
Healthcare Real Estate
As of March 31, 2019, the consolidated healthcare portfolio
consisted of 413 properties: 192 senior housing properties, 108
medical office properties, 99 skilled nursing facilities and 14
hospitals. The Company’s equity interest in the consolidated
Healthcare Real Estate segment was approximately 71% as of March
31, 2019. The healthcare portfolio earns rental income from our
senior housing, skilled nursing facilities and hospital assets that
are under net leases to single tenants/operators and from medical
office buildings which are both single tenant and multi-tenant. In
addition, we also earn resident fee income from senior housing
properties that are managed by operators under a REIT Investment
Diversification and Empowerment Act of 2007 (“RIDEA”)
structure.
During the first quarter 2019, this segment’s net loss
attributable to common stockholders was $(7.5) million, Core FFO
was $21.4 million and consolidated NOI was $76.2 million. In the
first quarter 2019, healthcare same store portfolio sequential
quarter to quarter comparable net operating income increased 2.7%,
primarily due to higher one-time expenses in the fourth quarter
2018 as well as increased rental rates in the first quarter in the
senior housing operating portfolio. Compared to the same period
last year, first quarter 2019 same store net operating income
decreased (2.4)%, primarily due to reduced rents in the skilled
nursing portfolio and higher uncollectible rents in the medical
office building portfolio. The healthcare same store portfolio is
defined as properties in operation throughout the full periods
presented under the comparison and included 413 properties in the
comparisons. Properties acquired or disposed during these periods
are excluded for the same store portfolio and same store results
exclude certain non-recurring uncollectible rent.
The following table presents NOI and certain operating metrics
by property types in the Company’s Healthcare Real Estate
segment:
Consolidated CLNY
OP Same Store NOI Share NOI(1) Consolidated NOI
Occupancy %(2)
TTM Lease Coverage(3)
($ in millions) Q1 2019 Q1 2019 Q1 2019 Q4 2018 Q1
2019 Q4 2018 12/31/18 9/30/18 Senior
Housing - Operating $ 17.3 $ 12.3 $ 17.3 $ 15.7 86.7
% 86.8 % N/A N/A Medical Office
Buildings (MOB) 12.4 8.8 12.4 12.6 82.4 % 82.3 % N/A N/A Triple-Net
Lease: Senior Housing 15.4 10.9 15.4 15.3 82.1 % 82.1 % 1.3x 1.4x
Skilled Nursing Facilities 25.7 18.3 25.7 25.8 82.4 % 82.4 % 1.2x
1.2x Hospitals 5.4 3.8 5.4 4.8
58.5 % 58.1 % 2.3x
3.4x
(4)
Healthcare Total $ 76.2 $ 54.1 $ 76.2
$ 74.2
_____________________________________
(1) CLNY OP Share NOI represents first quarter 2019
Consolidated NOI multiplied by CLNY OP’s ownership interest as of
March 31, 2019. (2)
Occupancy % for Senior Housing - Operating
represents average during the presented quarter, for MOBs
represents as of last day in the quarter and for other types
represents average during the prior quarter.
(3) Represents the ratio of the tenant’s/operator’s EBITDAR to cash
rent payable to the Company’s Healthcare Real Estate segment on a
trailing twelve month basis. (4) September 30, 2018 TTM Lease
Coverage included an extraordinary Hospital Quality Assurance Fee
received by one of our hospital operators during the fourth quarter
of 2017.
Asset Financing
During the first quarter 2019, the Company refinanced two loans
with an aggregate consolidated balance of $151 million, or CLNY OP
share of $107 million, in the Healthcare Real Estate segment,
extending the fully extended maturity dates to 2024 at slightly
higher interest rates on average.
Subsequent to the first quarter 2019, the Company refinanced a
loan with a consolidated balance of $59 million, or CLNY OP share
of $42 million, in the Healthcare Real Estate segment, extending
the fully extended maturity date to 2024 at a slightly lower
interest rate.
The Company continues to evaluate options in connection with the
$1.725 billion of consolidated fixed rate mortgage debt on a
certain U.S. healthcare portfolio maturing in December 2019.
Industrial Real Estate
As of March 31, 2019, the consolidated light industrial
portfolio consisted of 413 light industrial buildings totaling 53.9
million rentable square feet across 26 major U.S. markets and was
92% leased. During the first quarter 2019, the Company raised $141
million of new third-party capital in the light industrial
platform. As a result, the Company’s equity interest in the
consolidated light industrial portfolio decreased to approximately
34% as of March 31, 2019 from 35% as of December 31, 2018. Total
third-party capital commitments in the light industrial portfolio
were approximately $1.7 billion compared to cumulative balance
sheet contributions of $749 million as of March 31, 2019. The light
industrial portfolio is composed of and primarily invests in light
industrial properties in infill locations in major U.S.
metropolitan markets generally targeting multi-tenanted warehouses
less than 250,000 square feet.
As of March 31, 2019, the consolidated bulk industrial portfolio
consisted of six bulk industrial buildings totaling 4.2 million
rentable square feet across five major U.S. markets and was 67%
leased. The Company's equity interest in the consolidated bulk
industrial portfolio was approximately 51%, or $72 million, with
the other 49% owned by third-party capital, which is managed by the
Company's industrial operating platform. The immediate strategy is
to stabilize the existing bulk industrial portfolio as well as seek
to invest in bulk industrial properties in major U.S.
metropolitan markets generally targeting warehouses greater than
500,000 square feet.
The Company owns a 100% interest in the related industrial
operating platform, which manages both the light and bulk
industrial assets.
During the first quarter 2019, this segment’s net income
attributable to common stockholders was $6.4 million, Core FFO was
$12.9 million and consolidated NOI was $55.8 million. During the
first quarter 2019, this segment’s net income, Core FFO and NOI
included a partial quarter of financial results related to the
newly acquired $1.2 billion portfolio of light and bulk industrial
buildings for the period of February 27, 2019 to March 31, 2019. In
the first quarter 2019, light industrial same store portfolio
sequential quarter to quarter comparable rental revenue increased
1.3% and net operating income increased 0.6%, primarily due to
contractual rent escalations on in-place leases, offset by budgeted
vacancy and increased real estate tax and insurance expenses.
Compared to the same period last year, first quarter 2019 light
industrial same store rental revenue increased 0.6% and net
operating income increased 1.6%, primarily due to lower
uncollectible rent and other property operating expenses. The
Company’s light industrial same store portfolio consisted of 314
buildings. The same store portfolio is defined once a year at the
beginning of the current calendar year and includes buildings that
were owned, stabilized and held-for-use throughout the entirety of
both the current and prior calendar years. Properties acquired,
disposed or held-for-sale after the same store portfolio is
determined are excluded. Stabilized properties are defined as
properties owned for more than one year or are greater than 90%
leased. Same store NOI excludes lease termination fee revenue.
The following table presents NOI and certain operating metrics
in the Company’s Industrial Real Estate segment
Consolidated CLNY OP Same Store NOI Share NOI (1) Consolidated NOI
Leased %(2) ($ in millions) Q1 2019 Q1 2019 Q1 2019
Q4 2018 3/31/19 12/31/18 Light
Industrial(3) $ 54.6 $ 18.3 $ 41.8 $ 41.6 94.9 %
95.6 % Bulk Industrial(3) 1.2 0.6 N/A
N/A N/A N/A Total Industrial(3) $ 55.8
(3)
$ 18.9
(3)
N/A N/A N/A N/A
_____________________________________
(1) CLNY OP Share NOI represents first quarter 2019
Consolidated NOI multiplied by CLNY OP’s ownership interest as of
March 31, 2019. (2) Leased % as of the reported date represents
square feet under executed leases, some of which may not have taken
occupancy. (3)
During the first quarter 2019, this
segment’s NOI included partial quarter financial results related to
the newly acquired portfolio of light and bulk industrial buildings
for the period of February 27, 2019 to March 31, 2019.
Asset Acquisitions, Dispositions and
Financing
During the first quarter 2019, the light industrial platform
acquired three light industrial buildings totaling 0.7 million
square feet and one land parcel for development for $106 million.
Separately, the Company closed on the acquisition of a value-add
portfolio of 54 light and bulk industrial buildings for $1.16
billion (of which four light industrial buildings are expected to
close throughout the remainder of 2019). Forty-eight buildings are
light industrial, which were acquired by the Company’s existing
light industrial platform. To finance the acquisition, the light
industrial platform closed on a new $500 million five year term
loan and a $600 million revolver with a four year initial term. As
of March 31, 2019, the revolver was $114 million drawn. The
remaining six bulk industrial buildings were financed with a $235
million first mortgage loan and acquired through a joint venture
partnership in which the Company has a 51% interest and a
third-party institutional investor has a 49% interest.
During the first quarter 2019, the light industrial platform
disposed of 34 non-core light industrial buildings for $136
million.
Subsequent to the first quarter 2019, the light industrial
platform acquired two land parcels for development for $15
million.
Hospitality Real Estate
As of March 31, 2019, the consolidated hospitality portfolio
consisted of 167 properties: 97 select service properties, 66
extended stay properties and 4 full service properties. The
Company’s equity interest in the consolidated Hospitality Real
Estate segment was approximately 94% as of March 31, 2019. The
hospitality portfolio consists primarily of premium branded select
service hotels and extended stay hotels located mostly in major
metropolitan markets, of which a majority are affiliated with top
hotel brands. The select service hospitality portfolio referred to
as the THL Hotel Portfolio, which the Company acquired through
consensual transfer during the third quarter 2017, is not included
in the Hospitality Real Estate segment and is included in the Other
Equity and Debt segment.
During the first quarter 2019, this segment’s net loss
attributable to common stockholders was $(23.0) million, Core FFO
was $17.8 million and consolidated NOI before FF&E Reserve was
$60.6 million. Compared to the same period last year, first quarter
2019 hospitality same store portfolio revenue increased 0.7% and
NOI before FF&E Reserve increased 2.4%, primarily due to an
increase in ancillary revenue. The Company’s hotels typically
experience seasonal variations in occupancy which may cause
quarterly fluctuations in revenues and therefore sequential quarter
to quarter revenue and NOI before FF&E Reserve result
comparisons are not meaningful. The hospitality same store
portfolio is defined as hotels in operation throughout the full
periods presented under the comparison and included 167 hotels.
The following table presents NOI before FF&E Reserve and
certain operating metrics by brands in the Company’s Hospitality
Real Estate segment:
Same Store Consolidated CLNY OP
Share Consolidated Avg. Daily
Rate RevPAR(3)
NOI beforeFF&E Reserve(1)
NOI beforeFF&E Reserve(2)
NOI before FF&EReserve
Occupancy %(4) (In dollars)(4) (In dollars)(4) ($ in millions) Q1
2019 Q1 2019 Q1 2019 Q1 2018 Q1 2019 Q1
2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018
Marriott $ 47.2 $ 44.5 $ 47.2 $ 46.9 68.2 %
69.2 % $ 130 $ 129 $ 89 $ 89
Hilton 9.9 9.3 9.9 8.7 73.3 % 73.8 % 126 124 93 91 Other 3.5
3.3 3.5 3.6 80.4 %
78.2 % 127 127 102
99 Total/W.A. $ 60.6 $ 57.1 $ 60.6
$ 59.2 69.7 % 70.4 % $ 129
$ 128 $ 90 $ 90
_____________________________________
(1) First quarter 2019 consolidated FF&E reserve was
$8.7 million. (2) CLNY OP Share NOI before FF&E Reserve
represents first quarter 2019 Consolidated NOI before FF&E
Reserve multiplied by CLNY OP’s ownership interest as of March 31,
2019. (3) RevPAR, or revenue per available room, represents a
hotel's total guestroom revenue divided by the room count and the
number of days in the period being measured. (4) For each metric,
data represents average during the presented quarter.
Asset Financing
During the first quarter 2019, the Company refinanced $116
million of consolidated and CLNY OP share of debt in the
Hospitality Real Estate segment, extending the fully extended
maturity date from 2020 to 2024 at a lower interest rate.
Colony Credit Real Estate, Inc.
(“CLNC”)
Colony Credit Real Estate, Inc. is a commercial real estate
credit REIT, externally managed by the Company, with $5.5 billion
in assets and $2.7 billion in GAAP book equity value as of March
31, 2019. The Company owns 48.0 million shares and share
equivalents, or 36%, of CLNC and earns an annual base management
fee of 1.5% on stockholders’ equity (as defined in the CLNC
management agreement) and an incentive fee of 20% of CLNC’s Core
Earnings over a 7% hurdle rate. During the first quarter 2019, this
segment’s net income attributable to common stockholders was $5.2
million and Core FFO was $4.3 million. Core FFO included $13.6
million CLNY OP's share of losses from CLNC primarily resulting
from the foreclosure of a mezzanine loan collateralized by a
diversified portfolio of U.S. properties. This loss was anticipated
in the fourth quarter of 2018, when CLNC recorded a related loan
loss provision, which was added back from CLNC's net income to
calculate Core Earnings. Please refer to the CLNC's earnings
release and financial supplemental furnished on Form 8-K and its
Quarterly Report on Form 10-Q filed with the SEC for additional
detail.
Other Equity and Debt
The Company owns a diversified group of strategic and
non-strategic real estate and real estate-related debt and equity
investments. Strategic investments include our 11% interest in
NorthStar Realty Europe Corp. (NYSE: NRE) and other investments for
which the Company acts as a general partner and/or manager (“GP
Co-Investments”) and receives various forms of investment
management economics on the related third-party capital.
Non-strategic investments are composed of those investments the
Company does not intend to own for the long term including other
real estate equity including the THL Hotel Portfolio and the
Company’s interest in Albertsons; real estate debt; net leased
assets; and multiple classes of commercial real estate (“CRE”)
securities. During the first quarter 2019, this segment’s aggregate
net income attributable to common stockholders was $23.9 million
and Core FFO was $25.2 million. Core FFO included $14.1 million of
net investment losses primarily from losses on sale of and
provision for loan losses on certain Other Equity & Debt
investments.
As of March 31, 2019, the undepreciated carrying value of assets
and equity within the Other Equity and Debt segment were $3.2
billion and $2.0 billion, respectively.
CLNY OP Share Undepreciated Carrying Value March 31, 2019
December 31, 2018 ($ in millions) Assets
Equity Assets Equity
Strategic:
GP co-investments $
1,197
$ 724 $ 1,075 $ 684 Interest in NRE 88 88 88
88
Strategic Subtotal
1,285
812 1,163 772
Non-Strategic:
Other Real Estate Equity & Albertsons 1,372 704 1,481 752 Real
Estate Debt 290 290 297 297 Net Lease Real Estate Equity 182 74 219
92 CRE Securities and Real Estate Private Equity Funds 70 70
70 70
Non-Strategic Subtotal 1,914
1,138 2,067 1,211
Total Other Equity and Debt
$
3,199
$ 1,950 $ 3,230 $ 1,983
Other Equity and Debt Segment Asset
Dispositions
During the first quarter 2019, the Company sold or received
payoffs in aggregate of $190 million with net equity proceeds of
$93 million from various investments, including $46 million from
the GP co-investments category, $26 million from the Other Real
Estate Equity category, $19 million from the Net Lease Real Estate
Equity category, and an aggregate $2 million in the Real Estate
Debt and Real Estate Private Equity Funds categories.
Investment Management
The Company’s Investment Management segment includes the
business and operations of managing capital on behalf of
third-party investors through closed and open-end private funds,
and traded and non-traded real estate investment trusts. As of
March 31, 2019, the Company had $28.8 billion of third-party AUM
compared to $28.4 billion as of December 31, 2018. As of March 31,
2019, Fee-Earning Equity Under Management (“FEEUM”) was $17.8
billion compared to $17.6 billion as of December 31, 2018. The
increase in FEEUM was primarily attributable to capital raised in
the light and bulk industrial platforms and REIM platforms,
partially offset by asset sales. During the first quarter 2019,
this segment’s aggregate net income attributable to common
stockholders was $20.5 million and Core FFO was $36.3 million. Net
income and Core FFO included an aggregate $6 million of unrealized
carried interest from the Company's managed funds and
investments.
Colony Latam Partners
Subsequent to the first quarter 2019, the Company acquired the
Abraaj Group’s private equity platform in Latin America, which has
been renamed Colony Latam Partners and will continue to be headed
by its senior management team, led by Miguel Olea, Hector Martinez,
Gerardo Mendoza and Eduardo Cortina. Colony Latam Partners manages
approximately $530 million of FEEUM and has made 22 investments
across Latin America since its establishment in 2006.
Assets Under Management (“AUM”)
As of March 31, 2019, the Company had $43 billion of AUM:
March 31, 2019 December 31, 2018 ($ in
billions) Amount
% ofGrand Total
Amount
% ofGrand Total
Balance Sheet (CLNY OP Share): Healthcare $ 3.9 9.0 % $ 3.9
9.1 % Industrial 1.6 3.7 % 1.2 2.8 % Hospitality 3.9 9.0 % 4.0 9.4
% Other Equity and Debt 3.2 7.4 % 3.2 7.5 % CLNC(1) 2.0 4.6
% 2.0 4.7 % Balance Sheet Subtotal 14.6 33.7 % 14.3 33.5 %
Investment Management: Institutional Funds 9.9 22.7 % 9.5
22.2 % Retail Companies 3.5 8.1 % 3.5 8.2 % Colony Credit Real
Estate (NYSE:CLNC)(2) 3.5 8.1 % 3.5 8.2 %
NorthStar Realty Europe (NYSE:NRE) (3)
1.6 3.7 % 1.7 4.0 %
Non-Wholly Owned REIM Platforms(4)
10.3 23.7 % 10.2 23.9 % Investment Management
Subtotal 28.8 66.3 % 28.4 66.5 % Grand
Total $ 43.4 100.0 % $ 42.7 100.0 %
_____________________________________
(1) Represents the Company’s 36% and 37% ownership share of
CLNC’s total pro-rata share of assets of $5.5 billion as of March
31, 2019 and December 31, 2018, respectively. (2) Represents
third-party 64% and 63% ownership share of CLNC’s total pro-rata
share of assets of $5.5 billion as of March 31, 2019 and December
31, 2018, respectively.
(3)
The Company entered into an agreement with
NRE to terminate the management agreement. Upon termination, NRE
will make a termination payment to the Company of $70 million, less
any incentive fee paid by NRE to the Company through
termination.
(4)
REIM: Real Estate Investment Management
Liquidity and Financing
Subsequent to the first quarter 2019, the Company amended
certain terms of its corporate credit facility agreement including
a reduction of aggregate revolving commitments from $1 billion to
$750 million and a reduction in the minimum permitted EBITDA plus
lease expenses to fixed charges covenant ("FCCR") from 1.50 to 1.00
to 1.30 to 1.00 effective for the fiscal quarter ended March 31,
2019 and going forward. In the event FCCR is between 1.50 and 1.30
to 1.00, the borrowing base formula will be discounted by 10%. No
other material terms of the corporate credit facility agreement
were changed. Please refer to the Company's Form 8-K filed with the
SEC on April 11, 2019 for additional detail to the amendment.
As of May 7, 2019, the Company had over $850 million of
liquidity through availability under its revolving credit facility
and cash-on-hand.
$2 Billion Notional Interest Rate Swap
In connection with the merger among NorthStar Asset Management
Group Inc., Colony Capital, Inc. and NorthStar Realty Finance
Corp., the Company assumed a $2 billion notional interest rate swap
intended to hedge against future interest rate increases of certain
Healthcare mortgage debt at a breakeven 10-year swap rate of
3.394%. This swap does not qualify for hedge accounting; therefore,
unrealized gains (losses) resulting from mark-to-market value
changes at the end of each reporting period are recognized in
earnings but do not affect Core FFO. This swap is currently out of
the money and is subject to margin calls at a mark-to-market
liability in excess of $160 million. The swap expires in December
2019 with a mandatory cash settlement at mark-to-market value
(receivable to the Company if the 10-year swap rate is greater than
3.394% and a liability of the Company if the 10-year swap rate is
lower than 3.394%) and can be terminated by the Company any time
prior to expiration at mark-to market value. As of March 31, 2019,
the mark-to-market value of the swap liability was $185 million,
resulting in an unrealized GAAP loss in the first quarter 2019 of
$59 million. As of May 7, 2019, the mark-to-market value of the
swap liability was $180 million.
Common Stock and Operating Company Units
As of May 7, 2019, the Company had 485.8 million shares of Class
A and B common stock outstanding and the Company’s operating
partnership had 31.2 million operating company units outstanding
held by members other than the Company or its subsidiaries.
During the first quarter 2019, the Company repurchased 652,311
shares of its Class A common stock at an average price of $4.85 per
share, or $3 million.
As of May 7, 2019, the Company had $247 million remaining under
its share repurchase program.
Common and Preferred Dividends
On February 27, 2019, the Company’s Board of Directors declared
a quarterly cash dividend of $0.11 per share to holders of Class A
and Class B common stock for the first quarter of 2019, which was
paid on April 15, 2019 to respective stockholders of record on
March 29, 2019. The Board of Directors also declared cash dividends
with respect to each series of the Company’s cumulative redeemable
perpetual preferred stock each in accordance with terms of such
series as follows: (i) with respect to each of the Series B stock -
$0.515625 per share and Series E stock - $0.546875 per share, such
dividends to be paid on May 15, 2019 to the respective stockholders
of record on May 10, 2019 and (ii) with respect to each of the
Series G stock - $0.46875 per share, Series H stock - $0.4453125
per share, Series I stock - $0.446875 per share and Series J stock
- $0.4453125 per share, such dividends were paid on April 15, 2019
to the respective stockholders of record on April 10, 2019.
On May 7, 2019, the Company’s Board of Directors declared a
quarterly cash dividend of $0.11 per share to holders of Class A
and Class B common stock for the second quarter of 2019, which will
be paid on July 15, 2019 to respective stockholders of record on
June 28, 2019. The Board of Directors also declared cash dividends
with respect to each series of the Company’s cumulative redeemable
perpetual preferred stock each in accordance with terms of such
series as follows: (i) with respect to each of the Series B stock -
$0.515625 per share and Series E stock - $0.546875 per share, such
dividends to be paid on August 15, 2019 to the respective
stockholders of record on August 9, 2019 and (ii) with respect to
each of the Series G stock - $0.46875 per share, Series H stock -
$0.4453125 per share, Series I stock - $0.446875 per share and
Series J stock - $0.4453125 per share, such dividends to be paid on
July 15, 2019 to the respective stockholders of record on July 10,
2019.
Non-GAAP Financial Measures and Definitions
Assets Under Management
(“AUM”)
Assets for which the Company and its affiliates provide
investment management services, including assets for which the
Company may or may not charge management fees and/or performance
allocations. AUM is based on reported gross undepreciated carrying
value of managed investments as reported by each underlying vehicle
at March 31, 2019. AUM further includes a) uncalled capital
commitments and b) includes the Company’s pro-rata share of each
affiliate non wholly-owned real estate investment management
platform’s assets as presented and calculated by the affiliate.
Affiliates include the co-sponsored digital real estate
infrastructure vehicle, RXR Realty LLC, SteelWave, LLC, American
Healthcare Investors and Hamburg Trust. The Company's calculations
of AUM may differ materially from the calculations of other asset
managers, and as a result, this measure may not be comparable to
similar measures presented by other asset managers.
CLNY Operating Partnership (“CLNY
OP”)
The operating partnership through which the Company conducts all
of its activities and holds substantially all of its assets and
liabilities. CLNY OP share excludes noncontrolling interests in
investment entities.
Fee-Earning Equity Under Management
(“FEEUM”)
Equity for which the Company and its affiliates provides
investment management services and derives management fees and/or
performance allocations. FEEUM generally represents a) the basis
used to derive fees, which may be based on invested equity,
stockholders’ equity, or fair value pursuant to the terms of each
underlying investment management agreement and b) the Company’s
pro-rata share of fee bearing equity of each affiliate as presented
and calculated by the affiliate. Affiliates include the
co-sponsored digital real estate infrastructure vehicle, RXR Realty
LLC, SteelWave, LLC, American Healthcare Investors and Hamburg
Trust. The Company's calculations of FEEUM may differ materially
from the calculations of other asset managers, and as a result,
this measure may not be comparable to similar measures presented by
other asset managers.
Funds From Operations (“FFO”) and Core
Funds From Operations (“Core FFO”)
The Company calculates funds from operations (“FFO”) in
accordance with standards established by the Board of Governors of
the National Association of Real Estate Investment Trusts, which
defines FFO as net income or loss calculated in accordance with
GAAP, excluding (i) extraordinary items, as defined by GAAP; (ii)
gains and losses from sales of depreciable real estate; (iii)
impairment write-downs associated with depreciable real estate;
(iv) gains and losses from a change in control in connection with
interests in depreciable real estate or in-substance real estate,
plus (v) real estate-related depreciation and amortization; and
(vi) including similar adjustments for equity method investments.
Included in FFO are gains and losses from sales of assets which are
not depreciable real estate such as loans receivable, equity method
investments, as well as equity and debt securities, as
applicable.
The Company computes core funds from operations (“Core FFO”) by
adjusting FFO for the following items, including the Company’s
share of these items recognized by its unconsolidated partnerships
and joint ventures: (i) gains and losses from sales of depreciable
real estate within the Other Equity and Debt segment, net of
depreciation, amortization and impairment previously adjusted for
FFO; (ii) gains and losses from sales of businesses within the
Investment Management segment and impairment write-downs associated
with the Investment Management segment; (iii) equity-based
compensation expense; (iv) effects of straight-line rent revenue
and expense; (v) amortization of acquired above- and below-market
lease values; (vi) amortization of deferred financing costs and
debt premiums and discounts; (vii) unrealized fair value gains or
losses on interest rate and foreign currency hedges, and foreign
currency remeasurements; (viii) acquisition and merger related
transaction costs; (ix) merger integration and restructuring costs;
(x) amortization and impairment of finite-lived intangibles related
to investment management contracts and customer relationships; (xi)
gain on remeasurement of consolidated investment entities and the
effect of amortization thereof; (xii) non-real estate depreciation
and amortization; (xiii) change in fair value of contingent
consideration; and (xiv) tax effect on certain of the foregoing
adjustments. Beginning with the first quarter of 2018, the
Company’s Core FFO from its interest in Colony Credit Real Estate
(NYSE: CLNC) and NorthStar Realty Europe (NYSE: NRE) represented
its percentage interest multiplied by CLNC’s Core Earnings and
NRE’s Cash Available for Distribution (“CAD”), respectively. CLNC’s
Core Earnings reflect adjustments to GAAP net income to exclude
impairment of real estate and provision for loan losses. Such
impairment and losses may ultimately be realized, in part or in
full, upon a sale or monetization of the related asset or loan and
such realized loss would be reflected in CLNC’s Core Earnings and,
as a result, the Company’s Core FFO. Refer to CLNC’s and NRE's
respective filings with the SEC for the definition and calculation
of Core Earnings and CAD.
FFO and Core FFO should not be considered alternatives to GAAP
net income as indications of operating performance, or to cash
flows from operating activities as measures of liquidity, nor as
indications of the availability of funds for our cash needs,
including funds available to make distributions. FFO and Core FFO
should not be used as supplements to or substitutes for cash flow
from operating activities computed in accordance with GAAP. The
Company’s calculations of FFO and Core FFO may differ from
methodologies utilized by other REITs for similar performance
measurements, and, accordingly, may not be comparable to those of
other REITs.
The Company uses FFO and Core FFO as supplemental performance
measures because, in excluding real estate depreciation and
amortization and gains and losses from property dispositions, it
provides a performance measure that captures trends in occupancy
rates, rental rates, and operating costs. The Company also believes
that, as widely recognized measures of the performance of REITs,
FFO and Core FFO will be used by investors as a basis to compare
its operating performance with that of other REITs. However,
because FFO and Core FFO exclude depreciation and amortization and
capture neither the changes in the value of the Company’s
properties that resulted from use or market conditions nor the
level of capital expenditures and leasing commissions necessary to
maintain the operating performance of its properties, all of which
have real economic effect and could materially impact the Company’s
results from operations, the utility of FFO and Core FFO as
measures of the Company’s performance is limited. FFO and Core FFO
should be considered only as supplements to GAAP net income as a
measure of the Company’s performance. Additionally, Core FFO
excludes the impact of certain fair value fluctuations, which, if
they were to be realized, could have a material impact on the
Company’s operating performance. The Company also presents Core FFO
excluding gains and losses from sales of certain investments as
well as its share of similar adjustments for CLNC. The Company
believes that such a measure is useful to investors as it excludes
periodic gains and losses from sales of investments that are not
representative of its ongoing operations.
Net Operating Income
(“NOI”)
NOI for our real estate segments represents total property and
related income less property operating expenses, adjusted for the
effects of (i) straight-line rental income adjustments; (ii)
amortization of acquired above- and below-market lease adjustments
to rental income; and (iii) other items such as adjustments for the
Company’s share of NOI of unconsolidated ventures.
The Company believes that NOI is a useful measure of operating
performance of its respective real estate portfolios as it is more
closely linked to the direct results of operations at the property
level. NOI also reflects actual rents received during the period
after adjusting for the effects of straight-line rents and
amortization of above- and below- market leases; therefore, a
comparison of NOI across periods better reflects the trend in
occupancy rates and rental rates of the Company’s properties.
NOI excludes historical cost depreciation and amortization,
which are based on different useful life estimates depending on the
age of the properties, as well as adjust for the effects of real
estate impairment and gains or losses on sales of depreciated
properties, which eliminate differences arising from investment and
disposition decisions. This allows for comparability of operating
performance of the Company’s properties period over period and also
against the results of other equity REITs in the same sectors.
Additionally, by excluding corporate level expenses or benefits
such as interest expense, any gain or loss on early extinguishment
of debt and income taxes, which are incurred by the parent entity
and are not directly linked to the operating performance of the
Company’s properties, NOI provides a measure of operating
performance independent of the Company’s capital structure and
indebtedness. However, the exclusion of these items as well as
others, such as capital expenditures and leasing costs, which are
necessary to maintain the operating performance of the Company’s
properties, and transaction costs and administrative costs, may
limit the usefulness of NOI. NOI may fail to capture significant
trends in these components of U.S. GAAP net income (loss) which
further limits its usefulness.
NOI should not be considered as an alternative to net income
(loss), determined in accordance with U.S. GAAP, as an indicator of
operating performance. In addition, the Company’s methodology for
calculating NOI involves subjective judgment and discretion and may
differ from the methodologies used by other comparable companies,
including other REITs, when calculating the same or similar
supplemental financial measures and may not be comparable with
other companies.
NOI before Reserve for Furniture,
Fixtures and Equipment Expenditures (“NOI before FF&E
Reserve”)
For our hospitality real estate segment, NOI before FF&E
Reserve represents NOI before the deduction of reserve
contributions for the repair, replacement and refurbishment of
furniture, fixtures, and equipment ("FF&E"), which are
typically 4% to 5% of revenues, and required under certain debt
agreements and/or franchise and brand-managed hotel agreements.
Earnings Before Interest, Tax,
Depreciation, Amortization and Rent (“EBITDAR”)
Represents earnings before interest, taxes, depreciation,
amortization and rent for facilities accruing to the
tenant/operator of the property (not the Company) for the period
presented. The Company uses EBITDAR in determining TTM Lease
Coverage for triple-net lease properties in its Healthcare Real
Estate segment. EBITDAR has limitations as an analytical tool.
EBITDAR does not reflect historical cash expenditures or future
cash requirements for facility capital expenditures or contractual
commitments. In addition, EBITDAR does not represent a property's
net income or cash flow from operations and should not be
considered an alternative to those indicators. The Company utilizes
EBITDAR as a supplemental measure of the ability of the Company's
operators/tenants to generate sufficient liquidity to meet related
obligations to the Company.
TTM Lease Coverage
Represents the ratio of EBITDAR to recognized cash rent for
owned facilities on a trailing twelve month basis. TTM Lease
Coverage is a supplemental measure of a tenant’s/operator’s ability
to meet their cash rent obligations to the Company. However, its
usefulness is limited by, among other things, the same factors that
limit the usefulness of EBITDAR.
The information related to the Company’s tenants/operators that
is provided in this press release has been provided by, or derived
from information provided by, such tenants/operators. The Company
has not independently verified this information and has no reason
to believe that such information is inaccurate in any material
respect. The Company is providing this data for informational
purposes only.
First Quarter 2019 Conference Call
The Company will conduct a conference call to discuss the
financial results on Friday, May 10, 2019 at 7:00 a.m. PT / 10:00
a.m. ET. To participate in the event by telephone, please dial
(877) 407-4018 ten minutes prior to the start time (to allow time
for registration). International callers should dial (201)
689-8471. The call will also be broadcast live over the Internet
and can be accessed on the Public Shareholders section of the
Company’s website at www.clny.com. A webcast of the call will be
available for 90 days on the Company’s website.
For those unable to participate during the live call, a replay
will be available starting May 10, 2019, at 10:00 a.m. PT / 1:00
p.m. ET, through May 17, 2019, at 8:59 p.m. PT / 11:59 p.m. ET. To
access the replay, dial (844) 512-2921 (U.S.), and use passcode
13689428. International callers should dial (412) 317-6671 and
enter the same conference ID number.
Corporate Overview and Supplemental Financial Report
A First Quarter 2019 Corporate Overview and Supplemental
Financial Report is available on the Company’s website at
www.clny.com. This information has also been furnished to the U.S.
Securities and Exchange Commission in a Current Report on Form
8-K.
About Colony Capital, Inc.
Colony Capital, Inc. (NYSE: CLNY) is a leading global investment
management firm with assets under management of $43 billion. The
Company manages capital on behalf of its stockholders, as well as
institutional and retail investors in private funds, and traded and
non-traded real estate investment trusts. The Company has
significant holdings in: (a) the healthcare, industrial and
hospitality property sectors; (b) Colony Credit Real Estate, Inc.
(NYSE: CLNC) and NorthStar Realty Europe Corp. (NYSE: NRE), which
are both externally managed by subsidiaries of the Company; and (c)
various other equity and debt investments. The Company is
headquartered in Los Angeles with key offices in New York, Paris
and London, and has over 400 employees across 19 locations in 12
countries. For additional information regarding the Company and its
management and business, please refer to www.clny.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release may contain forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements relate to expectations, beliefs, projections, future
plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. In
some cases, you can identify forward-looking statements by the use
of forward-looking terminology such as “may,” “will,” “should,”
“expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” or “potential” or the negative of these
words and phrases or similar words or phrases which are predictions
of or indicate future events or trends and which do not relate
solely to historical matters. You can also identify forward-looking
statements by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and contingencies, many of which are
beyond the Company’s control, and may cause the Company’s actual
results to differ significantly from those expressed in any
forward-looking statement. Factors that might cause such a
difference include, without limitation, our ability to achieve
anticipated compensation and administrative cost savings pursuant
to our corporate restructuring and reorganization plan, in the
timeframe expected or at all, the impact of changes to the
Company’s management, employee and organizational structure,
whether the formation of the Strategic Asset Review Committee will
result in any action or transaction by the Company and whether the
Company, including its stockholders, will benefit from it, whether
the Company will realize any of the anticipated benefits of its
acquisition of Colony Latam Partners, Digital Colony’s ability to
complete the pending acquisition of Zayo Group Holdings, Inc. on
the terms contemplated or at all, the Company’s financial
flexibility, including borrowing capacity under its revolving
credit facility, the Company's ability to grow its investment
management business, the timing, pace of growth and performance of
the Company's Industrial platform, including the ability to
stabilize its bulk industrial portfolio and acquire more bulk
industrial properties, the performance of the Company’s investment
in Colony Credit Real Estate, Inc., the Company’s ability to
maintain or create future permanent capital vehicles under its
management, whether the Company will realize any anticipated
benefits from the Digital Bridge partnership, the Company’s ability
to simplify its business and become more balance sheet-light, the
Company's portfolio composition, Colony Capital’s liquidity,
including its ability to continue to generate liquidity by
additional sales of assets in its Other Equity and Debt segment,
the Company's expected taxable income and net cash flows, excluding
the contribution of gains, whether the Company will maintain or
produce higher Core FFO per share (including or excluding gains and
losses from sales of certain investments) in the coming quarters,
or ever, the Company’s ability to maintain or grow the dividend at
all in the future, whether NorthStar Realty Europe Corp. (“NRE”)
will complete a sale of its company or internalize in the timeframe
anticipated or at all, including the impact of any such transaction
on the Company’s investment in, and management agreement with, NRE,
the impact of any changes to the Company’s management agreements
with NorthStar Healthcare Income, Inc. and other managed companies,
whether Colony Capital will be able to maintain its qualification
as a REIT for U.S. federal income tax purposes, the timing of and
ability to deploy available capital, the timing of and ability to
complete repurchases of Colony Capital’s stock, Colony Capital’s
ability to maintain inclusion and relative performance on the RMZ,
Colony Capital’s leverage, including the Company’s ability to
reduce debt and the timing and amount of borrowings under its
credit facility, the ability of the Company to refinance certain
mortgage debt on similar terms to those currently existing or at
all, whether the Company will benefit from the combination of its
broker-dealer business with S2K Financial, increased interest rates
and operating costs, adverse economic or real estate developments
in Colony Capital’s markets, Colony Capital’s failure to
successfully operate or lease acquired properties, decreased rental
rates, increased vacancy rates or failure to renew or replace
expiring leases, defaults on or non-renewal of leases by tenants,
the impact of economic conditions on the borrowers of Colony
Capital’s commercial real estate debt investments and the
commercial mortgage loans underlying its commercial mortgage backed
securities, adverse general and local economic conditions, an
unfavorable capital market environment, decreased leasing activity
or lease renewals, and other risks and uncertainties detailed in
our filings with the U.S. Securities and Exchange Commission
(“SEC”). All forward-looking statements reflect the Company’s good
faith beliefs, assumptions and expectations, but they are not
guarantees of future performance. Additional information about
these and other factors can be found in Colony Capital’s reports
filed from time to time with the SEC.
Colony Capital cautions investors not to unduly rely on any
forward-looking statements. The forward-looking statements speak
only as of the date of this press release. Colony Capital is under
no duty to update any of these forward-looking statements after the
date of this press release, nor to conform prior statements to
actual results or revised expectations, and Colony Capital does not
intend to do so.
COLONY CAPITAL, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share
data)
March 31,
2019(unaudited)
December 31, 2018 Assets Cash and cash equivalents $
321,199 $ 461,912 Restricted cash 326,635 366,758 Real estate, net
14,536,041 13,619,014 Loans receivable, net 1,596,673 1,659,217
Equity and debt investments 2,769,616 2,543,169 Goodwill 1,534,561
1,534,561 Deferred leasing costs and intangible assets, net 546,903
540,264 Assets held for sale 786,467 941,258 Other assets 757,752
503,317 Due from affiliates 45,186 45,779
Total
assets $ 23,221,033 $ 22,215,249
Liabilities Debt, net $ 10,712,788 $ 10,039,957 Accrued and
other liabilities 1,037,166 707,921 Intangible liabilities, net
141,744 159,386 Liabilities related to assets held for sale 22,435
68,217 Dividends and distributions payable 83,996 84,013
Total liabilities 11,998,129 11,059,494
Commitments and contingencies
Redeemable noncontrolling
interests 7,463 9,385
Equity Stockholders’ equity:
Preferred stock, $0.01 par value per share; $1,436,605 liquidation
preference; 250,000 shares authorized; 57,464 shares issued and
outstanding 1,407,495 1,407,495 Common stock, $0.01 par value per
share Class A, 949,000 shares authorized; 484,775 and 483,347
shares issued and outstanding, respectively 4,848 4,834 Class B,
1,000 shares authorized; 734 shares issued and outstanding 7 7
Additional paid-in capital 7,610,947 7,598,019 Distributions in
excess of earnings (2,176,730 ) (2,018,302 ) Accumulated other
comprehensive income 22,138 13,999 Total
stockholders’ equity 6,868,705 7,006,052 Noncontrolling interests
in investment entities 3,996,206 3,779,728 Noncontrolling interests
in Operating Company 350,530 360,590 Total equity
11,215,441 11,146,370
Total liabilities,
redeemable noncontrolling interests and equity $ 23,221,033
$ 22,215,249
COLONY CAPITAL, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
data)
(unaudited)
Three Months Ended March 31, 2019
2018 Revenues Property operating income $
540,130 $ 554,730 Interest income 46,250 63,854 Fee income 33,500
36,842 Other income 13,023 11,238
Total
revenues 632,903 666,664
Expenses Property
operating expense 293,079 305,770 Interest expense 149,516 148,889
Investment and servicing expense 18,979 18,653 Transaction costs
2,504 716 Placement fees 309 123 Depreciation and amortization
150,797 144,705 Provision for loan loss 3,611 5,375 Impairment loss
25,622 153,398 Compensation expense Cash and equity-based
compensation 34,176 49,484 Carried interest and incentive fee
compensation 1,051 859 Administrative expenses 24,014 24,740
Total expenses 703,658 852,712
Other
income (loss) Gain on sale of real estate assets 52,301 18,444
Other gain (loss), net (49,077 ) 75,256 Equity method earnings
34,065 30,117 Equity method earnings—carried interest 4,422
2,148
Loss before income taxes (29,044 ) (60,083 )
Income tax benefit (expense) (1,111 ) 32,808
Loss from
continuing operations (30,155 ) (27,275 ) Income from
discontinued operations — 117
Net loss (30,155
) (27,158 ) Net income (loss) attributable to noncontrolling
interests: Redeemable noncontrolling interests 1,444 (696 )
Investment entities 49,988 19,243 Operating Company (6,611 ) (4,378
)
Net loss attributable to Colony Capital, Inc. (74,976 )
(41,327 ) Preferred stock dividends 27,137 31,387
Net loss attributable to common stockholders $ (102,113 ) $
(72,714 )
Basic loss per share Loss from continuing
operations per basic common share $ (0.21 ) $ (0.14 ) Net loss per
basic common share $ (0.21 ) $ (0.14 )
Diluted loss per
share Loss from continuing operations per diluted common share
$ (0.21 ) $ (0.14 ) Net loss per diluted common share $ (0.21 ) $
(0.14 )
Weighted average number of shares Basic 478,874
530,680 Diluted 478,874 530,680
COLONY CAPITAL, INC.
FUNDS FROM OPERATIONS AND CORE FUNDS
FROM OPERATIONS
(In thousands, except per share
data)
(Unaudited)
Three Months EndedMarch 31,
2019
Net loss attributable to common stockholders $ (102,113 )
Adjustments for FFO attributable to common interests in Operating
Company and common stockholders: Net loss attributable to
noncontrolling common interests in Operating Company (6,611 ) Real
estate depreciation and amortization 154,402 Impairment of real
estate 25,622 Gain from sales of real estate (55,234 ) Less:
Adjustments attributable to noncontrolling interests in investment
entities (35,274 ) FFO attributable to common interests in
Operating Company and common stockholders (19,208 )
Additional adjustments for Core FFO attributable to common
interests in Operating Company and common stockholders: Gains and
losses from sales of depreciable real estate within the Other
Equity and Debt segment, net of depreciation, amortization and
impairment previously adjusted for FFO (1) (11,135 ) Gains and
losses from sales of businesses within the Investment Management
segment and impairment write-downs associated with the Investment
Management segment 2,542 CLNC Core Earnings & NRE Cash
Available for Distribution adjustments (2) (13,988 ) Equity-based
compensation expense 7,353 Straight-line rent revenue and expense
(5,495 ) Amortization of acquired above- and below-market lease
values, net (3,866 ) Amortization of deferred financing costs and
debt premiums and discounts 18,312 Unrealized fair value losses on
interest rate and foreign currency hedges, and foreign currency
remeasurements 58,143 Acquisition and merger-related transaction
costs 2,895 Merger integration and restructuring costs (3) 769
Amortization and impairment of investment management intangibles
8,662 Non-real estate depreciation and amortization 1,577
Amortization of gain on remeasurement of consolidated investment
entities 3,779 Deferred tax benefit, net (2,663 ) Less: Adjustments
attributable to noncontrolling interests in investment entities 36
Core FFO attributable to common interests in Operating
Company and common stockholders $ 47,713 FFO per
common share / common OP unit (4) $ (0.04 ) FFO per common share /
common OP unit—diluted (4)(5) $ (0.04 ) Core FFO per common share /
common OP unit (4) $ 0.09 Core FFO per common share / common
OP unit—diluted (4)(5)(6) $ 0.09 Weighted average number of
common OP units outstanding used for FFO and Core FFO per common
share and OP unit (4) 515,494 Weighted average number of
common OP units outstanding used for FFO per common share and OP
unit—diluted (4)(5) 515,494 Weighted average number of
common OP units outstanding used for Core FFO per common share and
OP unit—diluted (4)(5)(6) 519,446
_____________________________________
(1) For the three months ended March 31, 2019, net of $43.4
million consolidated or $24.3 million CLNY OP share of
depreciation, amortization and impairment charges previously
adjusted to calculate FFO and Core Earnings, a non-GAAP measure
used by Colony Capital, Inc. prior to its internalization of the
manager. (2) Represents adjustments to align the Company’s Core FFO
with CLNC’s definition of Core Earnings and NRE’s definition of
Cash Available for Distribution (“CAD”) to reflect the Company’s
percentage interest in the respective company’s earnings. These
adjustments include provisions for loan losses, realized gains and
losses plus other differences that are included/excluded in CLNC’s
core earnings and NRE’s CAD. (3) Merger integration and
restructuring costs represent costs and charges incurred during the
integration of Colony, NSAM and NRF and from the corporate
restructuring and reorganization plan. These integration and
restructuring costs are not reflective of the Company’s core
operating performance and the Company does not expect to incur
these costs subsequent to the completion of the merger integration
and restructuring and reorganization plan. The majority of these
costs consist of severance, employee costs of those separated or
scheduled for separation, system integration and lease
terminations. (4) Calculated based on weighted average shares
outstanding including participating securities and assuming the
exchange of all common OP units outstanding for common shares. (5)
For the three months ended March 31, 2019, excluded in the
calculation of diluted FFO and Core FFO per share is the effect of
adding back interest expense associated with convertible senior
notes and weighted average dilutive common share equivalents for
the assumed conversion of the convertible senior notes as the
effect of including such interest expense and common share
equivalents would be antidilutive. (6) Included in the calculation
of diluted Core FFO per share are 3.8 million weighted average
performance stock units, which are subject to both a service
condition and market condition, and 137,918 weighted average shares
of non-participating restricted stock for the three months ended
March 31, 2019.
COLONY CAPITAL, INC.RECONCILIATION OF
NET INCOME (LOSS) TO NOI
The following tables present: (1) a reconciliation of property
and other related revenues less property operating expenses for
properties in our Healthcare, Industrial, and Hospitality segments
to NOI and (2) a reconciliation of such segments' net income (loss)
for the three months ended March 31, 2019 to NOI:
Three Months Ended March 31, 2019
(In
thousands)
Healthcare Industrial
Hospitality Total revenues $ 145,774 $ 82,372 $ 196,615
Straight-line rent revenue and amortization of above- and
below-market lease intangibles (5,227 ) (3,232 ) 310 Interest
income — (180 ) — Property operating expenses (1) (64,302 ) (22,337
) (136,345 ) Compensation and administrative expense (1) —
(784 ) — NOI(2) $ 76,245 $ 55,839 $ 60,580
_____________________________________
(1) For healthcare and hospitality, property operating
expenses include property management fees paid to third parties.
For industrial, there are direct costs of managing the portfolio
which are included in compensation expense. (2) For hospitality,
NOI is before FF&E Reserve.
Three Months Ended March
31, 2019
(In
thousands)
Healthcare Industrial
Hospitality Income (loss) from continuing operations $
(7,206 ) $ 24,154 $ (26,077 ) Adjustments: Straight-line rent
revenue and amortization of above- and below-market lease
intangibles (5,227 ) (3,232 ) 310 Interest income — (180 ) —
Interest expense 47,527 14,627 42,065 Transaction, investment and
servicing costs 3,108 530 1,584 Depreciation and amortization
40,131 39,445 36,248 Impairment loss — — 3,850 Compensation and
administrative expense 1,653 3,504 1,904 Gain on sale of real
estate — (22,848 ) (139 ) Other (gain) loss, net (1,867 ) 8 (1 )
Income tax (benefit) expense (1,874 ) (169 ) 836 NOI(1) $
76,245 $ 55,839 $ 60,580
_____________________________________
(1) For hospitality, NOI is before FF&E Reserve.
The following table summarizes first quarter 2019 income (loss)
from continuing operations by segment:
(In
thousands)
Income (Loss)
FromContinuingOperations
Healthcare $ (7,206 ) Industrial 24,154 Hospitality (26,077 ) CLNC
5,513 Other Equity and Debt 59,563 Investment Management 22,777
Amounts Not Allocated to Segments (108,879 ) Total Consolidated $
(30,155 )
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190510005101/en/
Investor Contacts:Addo Investor RelationsLasse
Glassen310-829-5400
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