Colony Credit Real Estate, Inc. (NYSE: CLNC) (“Colony Credit
Real Estate” or the “Company”) today announced its financial
results for the first quarter ended March 31, 2020 and certain
updates.
Michael J. Mazzei commented, “First and foremost, we want to
convey our best wishes for everyone’s health and safety during
these difficult times. The COVID-19 pandemic remains an
unprecedented global event and Colony Credit Real Estate remains
committed to the welfare of all of our stakeholders as we navigate
this evolving situation.”
Mr. Mazzei added, “The COVID-19 disruption is poised to deliver
unprecedented challenges to the real estate industry. The ultimate
impact is still somewhat unknowable. It will in part be a function
of the duration of the pandemic as well as required and personal
behavioral changes. Despite these extraordinary times, first
quarter underlying results were in line with our expectations. In
addition, we took measures with our banking, financial, borrower
and partner relationships, regarding properties and business
operations, to support the balance sheet and our financial
flexibility. The Company has liquidity of over $250 million between
cash on hand and our corporate revolver.”
Mr. Mazzei continued, “Over time, this disruption will be
followed by an evolving recovery. The Colony Credit team will
continue to stay focused in taking measures to prepare for and
navigate the challenges and opportunities ahead.”
First Quarter 2020 Significant
Developments and Subsequent Events
- Michael J. Mazzei joined as Chief Executive Officer and
President of the Company on April 1, 2020
- First quarter 2020 GAAP net income (loss) attributable to
common stockholders of $(78.8) million, or $(0.62) per share, and
total Core Earnings / Legacy, Non-Strategic Earnings of $11.5
million, or $0.09 per share. Excluding provision for loan losses of
$39.1 million and realized gains of $9.3 million, total Core
Earnings / Legacy, Non-Strategic Earnings of $41.4 million, or
$0.31 per share
- Declared and paid a monthly cash dividend of $0.10 per share of
Class A common stock (the “common stock”) for January, February and
March 2020. Subsequent to quarter end, in connection with the
impact of the COVID-19 global pandemic, the Company announced a
suspension of the monthly cash dividend beginning with the monthly
period ending April 30, 2020
- GAAP net book value of $2.0 billion, or $14.85 per share and
undepreciated book value of $2.1 billion, or $16.12 per share, as
of March 31, 2020
- As of May 6, 2020, total corporate liquidity of approximately
$255 million through cash-on-hand and availability under the
corporate revolving credit facility. In addition, excess capacity
under the Company’s master repurchase facilities of approximately
$1.6 billion
- Maintains full compliance with financial covenants under bank
credit facility and master repurchase facilities. Subsequent to the
first quarter, on May 6, 2020, the Company amended its bank credit
facility to: (i) reduce the tangible net worth covenant from $2.1
billion to $1.5 billion, providing portfolio management
flexibilities as a result of any disruptions in investments caused
by COVID-19 or other factors; (ii) reduce the facility size from
$560 million to $450 million (noting current borrowings of $299
million); (iii) limit dividends in line with taxable income and
restrict stock repurchases, each for liquidity preservation
purposes; and (iv) focus new investments on senior mortgages
Core Portfolio
- First quarter 2020 GAAP net income (loss) attributable to
common stockholders of $(35.0) million, or $(0.27) per share, and
Core Earnings of $46.2 million, or $0.35 per share. Core Earnings
of $40.0 million, or $0.30 per share, excluding provision for loan
losses of $2.3 million and realized gains on FX hedges of $8.6
million
- GAAP net book value of $1.8 billion, or $13.36 per share and
undepreciated book value of $1.8 billion, or $14.04 per share, as
of March 31, 2020. CECL reserve for outstanding loans and future
funding commitments of $52.2 million, or $0.41 per share, which is
2.0% of the aggregate commitment amount of the loan portfolio as of
March 31, 2020
- The Company has not closed on any new investments in 2020
through the date hereof and is primarily focused on existing
investments and commitments
- During the first quarter, three loans totaling $68 million in
carrying value repaid in full
- Senior Loan and Master Repurchase Facilities
- As of March 31, 2020, the Company’s exposure to CRE senior
mortgage loan investments had a carrying value of $2.3 billion,
which was approximately 42% of the Company’s total book value and
49% of the book value of the Company’s Core Portfolio; $1.0 billion
was financed with $707 million under its senior loan master
repurchase facilities with 5 repurchase facility bank lenders. As
of the date hereof, the Company’s exposure to senior loan master
repurchase facility financing was approximately $700 million
- As of the date hereof, the Company maintains (i) four senior
mortgage hospitality loans with aggregate outstanding borrowings of
$173 million. The Company received and timely paid one margin call
for less than $1 million on one hospitality loan. In addition, the
Company made voluntarily paydowns on two other hospitality loans,
received a holiday from future margin calls between 3 and 4 months,
and obtained broader discretion to enter into permitted
modifications with its borrowers on these specific loans, if
necessary, in the upcoming 6 months
- The Company is in active discussions with other master
repurchase facility lenders to achieve a result similar to the
agreements described above, either on an asset specific basis or
across all assets with the specific lender
- CRE Debt Securities and Master Repurchase Facilities
- As March 31, 2020, the Company’s exposure to CRE debt
securities had a carrying value of $270 millionand $207 million of
such CRE debt securities were financed by master repurchase
facilities. The Company has met all margin calls under financing
arrangements on its CRE debt securities, with the most recent call
received and timely paid on March 26, 2020
- On April 6, 2020, the Company consolidated its CRE debt
securities master repurchase facility borrowings with one existing
counterparty bank. The Company also paid down its master repurchase
facility borrowing advance rate to a blended borrowing advance rate
of 62% and extended the repurchase date on all such borrowings to
June 30, 2020. This pay down provides a 15% buffer before further
margin calls on a bond would apply
- As of the date hereof, the Company maintains approximately $124
million of repurchase financing on such CRE debt securities, which
are collateralized by both investment grade-rated bonds ($98
million obligation) and non-investment grade-rated bonds ($26
million obligation). The financing bears a fixed rate of 4.50%
Legacy, Non-Strategic (“LNS”)
Portfolio
- First quarter 2020 GAAP net income (loss) attributable to
common stockholders of $(43.8) million, or $(0.35) per share, and
Legacy, Non-Strategic Earnings (Loss) of $(34.7) million, or
$(0.26) per share. Legacy, Non-Strategic Earnings of $1.4 million,
or $0.01 per share, excluding provision for loan losses of $36.8
million and other realized gains of $0.7 million
- GAAP net book value of $0.2 billion, or $1.49 per share as of
March 31, 2020
- LNS Portfolio Sales – The portfolio bifurcation plan
established in November 2019 has provided the Company a source of
liquidity to access during current market conditions. During the
first quarter 2020 through the date hereof:
- 13 Sold/Resolved Assets: 13 LNS assets were resolved or sold
for a total gross sales price of $269 million and a net sales price
of $170 million after transaction costs, debt repayment and
promote, representing an approximately $3 million gain and a 2%
premium to GAAP net carrying value
- NY Hospitality Loans: During the three months ended March 31,
2020, given the immediate and significant detrimental impact of
COVID-19, recorded a $37 million provision for loan loss related to
the Company’s four New York Hospitality Loans collateralized by a
1,300-room hotel. On April 22, 2020, closed on a discounted pay-off
of the total investment interests, realizing on such provision for
loan loss
- Since the portfolio bifurcation plan was announced in November
2019, the Company has monetized $198 million of LNS net carrying
value, or approximately 48% of the total LNS net carrying value for
$192 million of net sale proceeds
Portfolio Performance
As of the date hereof, the Company has received approximately
99% of April interest payments due from borrowers across the Core
Portfolio, representing approximately $2.8 billion of the $2.9
billion total carrying value. In addition, the Company has
collected approximately 95% of April rent payments across the Core
Net Leased Real Estate portfolio, representing approximately $6.3
million of the $6.6 million monthly rent due.
The Company continues to work closely with its borrowers to
address the impacts of COVID-19 on their business. To the extent
that certain borrowers are experiencing significant financial
dislocation, the Company may consider the use of interest and other
reserves and/or the replenishment of obligations of the borrower
and/or guarantors to meet current interest payment obligations, for
a limited period of time. Similarly, the Company may evaluate
converting certain current interest payment obligations to
payment-in-kind as a potential bridge period solution.
As of March 31, 2020, the Core Portfolio consisted of 53 loans
held by the Company, including senior loans, mezzanine loans and
preferred equity interests, and had an average risk rating of 3.8
(average risk); weighted by total loan exposure on a 1 (Very Low
Risk) to 5 (Impaired/Defaulted/Loss Likely) scale. As of March 31,
2020, three investments (two assets) representing 4.5% of the Core
Portfolio were rated 5 (Impaired/Defaulted/Loss Likely).
Common Stock and Operating Partnership
Units
As of May 6, 2020, the Company had approximately 128.4 million
shares of common stock outstanding and the Company’s operating
partnership had approximately 3.1 million operating partnership
units (“OP units”) outstanding held by members other than the
Company or its subsidiaries.
Dividend Announcement
The Company’s Board of Directors declared a monthly cash
dividend of $0.10 per share of common stock for: (i) the monthly
period ended January 31, 2020, which was paid on February 10, 2020,
to stockholders of record on January 31, 2020, (ii) the monthly
period ended February 29, 2020, which was paid on March 10, 2020,
to stockholders of record on February 29, 2020, and (iii) the
monthly period ended March 31, 2020, which was paid on April 10,
2020, to stockholders of record on March 31, 2020.
Subsequent to quarter end, in connection with the impact of the
COVID-19 global pandemic, the Company announced a suspension of the
monthly cash dividend beginning with the monthly period ending
April 30, 2020. The COVID-19 pandemic has caused extraordinary
volatility and unprecedented market conditions, including actual
and unanticipated consequences to the Company and certain
investments, which may continue. Having made monthly cash dividend
payments through March 31, 2020, the Board of Directors and
management believe it is prudent and in the best interests of the
Company to conserve available liquidity. The Board of Directors
will evaluate dividends in future periods based upon customary
considerations, including market conditions. Importantly, the
Company continues to monitor its taxable income to ensure that the
Company meets the minimum distribution requirements to maintain its
status as a REIT for the annual period ending December 31,
2020.
Internalization Discussions with Colony
Capital, Inc.
Due to ongoing uncertainty surrounding the duration and
magnitude of the COVID-19 pandemic and its impact on the global
economy, on April 1, 2020, Colony Capital reported in Amendment No.
3 to Schedule 13D (filed with the U.S. Securities and Exchange
Commission or “SEC”) that it has postponed any decision regarding a
disposition of its management agreement with the Company until
market conditions improve.
Non-GAAP Financial Measures and
Definitions
Core Earnings/Legacy, Non-Strategic Earnings
We present Core Earnings/Legacy, Non-Strategic Earnings, which
are non-GAAP supplemental financial measures of our performance.
Our Core Earnings are generated by the Core Portfolio and Legacy,
Non-Strategic Earnings are generated by the Legacy, Non-Strategic
Portfolio. We believe that Core Earnings/Legacy, Non-Strategic
Earnings provides meaningful information to consider in addition to
our net income and cash flow from operating activities determined
in accordance with accounting principles generally accepted in the
United States (“U.S. GAAP” or “GAAP”). These supplemental financial
measures help us to evaluate our performance excluding the effects
of certain transactions and U.S. GAAP adjustments that we believe
are not necessarily indicative of our current portfolio and
operations. For information on the fees we pay our Manager, see
Note 10, “Related Party Arrangements” to our consolidated financial
statements included in Form 10-Q to be filed with the SEC. In
addition, we believe that our investors also use Core
Earnings/Legacy, Non-Strategic Earnings or a comparable
supplemental performance measure to evaluate and compare the
performance of us and our peers, and as such, we believe that the
disclosure of Core Earnings/Legacy, Non-Strategic Earnings is
useful to our investors.
We define Core Earnings/Legacy, Non-Strategic Earnings as U.S.
GAAP net income (loss) attributable to our common stockholders (or,
without duplication, the owners of the common equity of our direct
subsidiaries, such as our operating partnership or “OP”) and
excluding (i) non-cash equity compensation expense, (ii) the
expenses incurred in connection with our formation or other
strategic transactions, (iii) the incentive fee, (iv) acquisition
costs from successful acquisitions, (v) gains or losses from sales
of real estate property and impairment write-downs of depreciable
real estate, including unconsolidated joint ventures and preferred
equity investments, (vi) CECL reserves determined by probability of
default / loss given default (or “PD/LGD”) model, (vii)
depreciation and amortization, (viii) any unrealized gains or
losses or other similar non-cash items that are included in net
income for the current quarter, regardless of whether such items
are included in other comprehensive income or loss, or in net
income, (ix) one-time events pursuant to changes in U.S. GAAP and
(x) certain material non-cash income or expense items that in the
judgment of management should not be included in Core
Earnings/Legacy, Non-Strategic Earnings. For clauses (ix) and (x),
such exclusions shall only be applied after discussions between our
Manager and our independent directors and after approval by a
majority of our independent directors. U.S. GAAP net income (loss)
attributable to our common stockholders and Core Earnings/Legacy,
Non-Strategic Earnings include provisions for loan losses.
Prior to the third quarter of 2019, Core Earnings reflected
adjustments to U.S. GAAP net income to exclude impairment of real
estate and provision for loan losses. During the third quarter of
2019, we revised our definition of Core Earnings to include the
provision for loan losses while excluding realized losses of sales
of real estate property and impairment write-downs of preferred
equity investments. This was approved by a majority of our
independent directors.
Core Earnings/Legacy, Non-Strategic Earnings does not represent
net income or cash generated from operating activities and should
not be considered as an alternative to U.S. GAAP net income or an
indication of our cash flows from operating activities determined
in accordance with U.S. GAAP, a measure of our liquidity, or an
indication of funds available to fund our cash needs, including our
ability to make cash distributions. In addition, our methodology
for calculating Core Earnings/Legacy, Non-Strategic Earnings may
differ from methodologies employed by other companies to calculate
the same or similar non-GAAP supplemental financial measures, and
accordingly, our reported Core Earnings/Legacy, Non-Strategic
Earnings may not be comparable to the Core Earnings/Legacy,
Non-Strategic Earnings reported by other companies.
The Company calculates Core Earnings/Legacy, Non-Strategic
Earnings per share, which are non-GAAP supplemental financial
measures, based on a weighted average number of common shares and
operating partnership units (held by members other than the Company
or its subsidiaries).
Core Portfolio
We present the Core Portfolio, which consists of four business
and reportable segments including senior and mezzanine loans and
preferred equity, CRE debt securities, net leased real estate and
corporate. Senior and mezzanine loans and preferred equity consists
of CRE debt investments including senior mortgage loans, mezzanine
loans, and preferred equity interests as well as participations in
such loans. The segment also includes acquisition, development and
construction loan arrangements accounted for as equity method
investments as well as loans and preferred equity interests held
through joint ventures with an affiliate of Colony Capital which
were deconsolidated as a result of our formation transaction and
subsequently treated as equity method investments. CRE debt
securities include both investment grade and non-investment grade
rated CMBS bonds (including “B-pieces” of CMBS securitization pools
or “B-Piece” investments). Net leased real estate includes direct
investments in commercial real estate principally composed of
long-term leases to tenants on a net lease basis, where such
tenants are generally responsible for property operating expenses
such as insurance, utilities, maintenance capital expenditures and
real estate taxes. Corporate includes corporate-level asset
management and other fees, related party and general and
administrative expenses related to the Core Portfolio only.
Legacy, Non-Strategic Portfolio
We present the Legacy, Non-Strategic Portfolio, which is a
business and reportable segment that consists of direct investments
in operating real estate such as multi-tenant office and
multifamily residential assets, real estate acquired in settlement
of loans, real estate private equity interests and certain retail
and other legacy loans originated prior to the combination that
created the Company. This segment includes corporate-level asset
management and other fees, related party and general and
administrative expenses related to the Legacy, Non-strategic
Portfolio.
First Quarter 2020 Conference
Call
The Company will conduct a conference call to discuss the
financial results on May 7, 2020 at 2:00 p.m. PT / 5:00 p.m. ET. To
participate in the event by telephone, please dial (800) 263-0877
ten minutes prior to the start time (to allow time for
registration). International callers should dial (856) 344-9283.
The call will also be broadcast live over the Internet and can be
accessed on the Shareholders section of the Company’s website at
www.clncredit.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 7, 2020 at 5:00 p.m. PT / 8:00 p.m.
ET, through May 14, 2020, at 8:59 p.m. PT / 11:59 p.m. ET. To
access the replay, dial (844) 512-2921 (U.S.), and use passcode
5903995. International callers should dial (412) 317-6671 and enter
the same conference ID number.
Supplemental Financial
Report
A First Quarter 2020 Supplemental Financial Report will be
available on the Company’s website at www.clncredit.com. This
information will be furnished to the SEC in a Current Report on
Form 8-K.
About Colony Credit Real Estate,
Inc.
Colony Credit Real Estate (NYSE: CLNC) is one of the largest
publicly traded commercial real estate (CRE) credit REITs, focused
on originating, acquiring, financing and managing a diversified
portfolio consisting primarily of CRE senior mortgage loans,
mezzanine loans, preferred equity, debt securities and net leased
properties predominantly in the United States. Colony Credit Real
Estate is externally managed by a subsidiary of leading global real
estate and investment management firm, Colony Capital, Inc. Colony
Credit Real Estate is organized as a Maryland corporation that
elected to be taxed as a REIT for U.S. federal income tax purposes
commencing with our initial taxable year ended December 31, 2018.
For additional information regarding the Company and its management
and business, please refer to www.clncredit.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. Forward-looking statements involve
known and unknown risks, uncertainties, assumptions and
contingencies, many of which are beyond our control, and may cause
actual results to differ significantly from those expressed in any
forward-looking statement. Among others, the following
uncertainties and other factors could cause actual results to
differ from those set forth in the forward-looking statements:
operating costs and business disruption may be greater than
expected; uncertainties regarding the ongoing impact of the novel
coronavirus (COVID-19), the severity of the disease, the duration
of the COVID-19 outbreak, actions that may be taken by governmental
authorities to contain the COVID-19 outbreak or to treat its
impact, the potential negative impacts of COVID-19 on the global
economy and its adverse impact on the real estate market, the
economy and the Company’s investments (including, but not limited
to, the Los Angeles mixed-use development loan), financial
condition and business operation; defaults by borrowers in paying
debt service on outstanding indebtedness and borrowers’ abilities
to manage and stabilize properties; deterioration in the
performance of the properties securing our investments (including
depletion of interest and other reserves or payment-in-kind
concessions in lieu of current interest payment obligations) that
may cause deterioration in the performance of our investments and,
potentially, principal losses to us; the Company's operating
results may differ materially from the information presented in the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, as well as in Colony Credit Real Estate’s other
filings with the Securities and Exchange Commission; the fair value
of the Company's investments may be subject to uncertainties; the
Company's use of leverage could hinder its ability to make
distributions and may significantly impact its liquidity position;
given the Company's dependence on its external manager, an
affiliate of Colony Capital, Inc., any adverse changes in the
financial health or otherwise of its manager or Colony Capital,
Inc. could hinder the Company's operating performance and return on
stockholder's investment; the ability to realize substantial
efficiencies as well as anticipated strategic and financial
benefits, including, but not limited to expected returns on equity
and/or yields on investments; adverse impacts on the Company's
corporate revolver, including covenant compliance and borrowing
base capacity; adverse impacts on the Company's liquidity,
including margin calls on master repurchase facilities, debt
service or lease payment defaults or deferrals, demands for
protective advances and capital expenditures, or its ability to
continue to generate liquidity from sales of Legacy, Non-Strategic
assets; the Company’s ability to liquidate its Legacy,
Non-Strategic assets within the projected timeframe or at the
projected values; the timing of and ability to deploy available
capital; the Company’s ability to pay, maintain or grow the
dividend at all in the future; the timing of and ability to
complete repurchases of the Company’s stock; the ability of the
Company to refinance certain mortgage debt on similar terms to
those currently existing or at all; whether Colony Capital will
continue to serve as our external manager or whether we will pursue
another strategic transaction; and the impact of legislative,
regulatory and competitive changes, and the actions of government
authorities, including the current U.S. presidential
administration, and in particular those affecting the commercial
real estate finance and mortgage industry or our business. The
foregoing list of factors is not exhaustive. Additional information
about these and other factors can be found in Part I, Item 1A of
the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, as well as in Colony Credit Real Estate’s other
filings with the Securities and Exchange Commission. Moreover, each
of the factors referenced above are likely to also be impacted
directly or indirectly by the ongoing impact of COVID-19 and
investors are cautioned to interpret substantially all of such
statements and risks as being heightened as a result of the ongoing
impact of the COVID-19.
We caution 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 Credit Real Estate 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 Credit Real
Estate does not intend to do so.We caution 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
Credit Real Estate 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 Credit Real Estate does not intend to do
so.
COLONY CREDIT REAL ESTATE,
INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
March 31, 2020
(Unaudited)
December 31, 2019 Assets Cash and cash equivalents
$
393,845
$
69,619
Restricted cash
159,521
126,065
Loans and preferred equity held for investment, net
2,351,278
2,576,332
Real estate securities, available for sale, at fair value
179,572
252,824
Real estate, net
1,226,988
1,484,796
Investments in unconsolidated ventures ($8,764 and $10,283 at fair
value, respectively)
585,994
595,305
Receivables, net
41,569
46,456
Deferred leasing costs and intangible assets, net
98,507
112,762
Assets held for sale
270,680
189,470
Other assets
62,643
87,707
Mortgage loans held in securitization trusts, at fair value
1,822,991
1,872,970
Total assets
$
7,193,588
$
7,414,306
Liabilities Securitization bonds payable, net
$
833,671
$
833,153
Mortgage and other notes payable, net
1,152,851
1,256,112
Credit facilities
1,260,419
1,099,233
Due to related party
10,766
11,016
Accrued and other liabilities
145,956
140,424
Intangible liabilities, net
10,548
22,149
Liabilities related to assets held for sale
10,842
294
Escrow deposits payable
49,499
74,497
Dividends payable
13,147
13,164
Mortgage obligations issued by securitization trusts, at fair value
1,732,388
1,762,914
Total liabilities
5,220,087
5,212,956
Commitments and contingencies
Equity Stockholders’ equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no
shares issued and outstanding as of March 31, 2020 and December 31,
2019, respectively
-
-
Common stock, $0.01 par value per share Class A, 950,000,000 shares
authorized, 128,366,427 and 128,538,703 shares issued and
outstanding as of March 31, 2020 and December 31, 2019,
respectively
1,284
1,285
Additional paid-in capital
2,907,796
2,909,181
Accumulated deficit
(959,695
)
(819,738
)
Accumulated other comprehensive income (loss)
(42,705
)
28,294
Total stockholders’ equity
1,906,680
2,119,022
Noncontrolling interests in investment entities
21,141
31,631
Noncontrolling interests in the Operating Partnership
45,680
50,697
Total equity
1,973,501
2,201,350
Total liabilities and equity
$
7,193,588
$
7,414,306
COLONY CREDIT REAL ESTATE,
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per
share data) (Unaudited)
Three Months Ended March
31,
2020
2019
Net interest income Interest income
$
46,104
$
38,409
Interest expense
(20,744
)
(19,292
)
Interest income on mortgage loans held in securitization trusts
20,555
38,476
Interest expense on mortgage obligations issued by securitization
trusts
(18,059
)
(35,635
)
Net interest income
27,856
21,958
Property and other income Property operating income
52,513
63,134
Other income
9,409
177
Total property and other income
61,922
63,311
Expenses Management fee expense
7,946
11,358
Property operating expense
22,531
28,180
Transaction, investment and servicing expense
3,134
529
Interest expense on real estate
13,078
13,607
Depreciation and amortization
17,976
27,662
Provision for loan losses
69,932
-
Impairment of operating real estate
4,126
-
Administrative expense (including $342 and $1,843 of equity-based
compensation expense, respectively)
7,038
6,653
Total expenses
145,761
87,989
Other income (loss) Unrealized gain (loss) on
mortgage loans and obligations held in securitization trusts, net
(19,452
)
1,029
Realized gain on mortgage loans and obligations held in
securitization trusts, net
-
48
Other loss, net
(20,162
)
(5,079
)
Loss before equity in earnings of unconsolidated ventures and
income taxes
(95,597
)
(6,722
)
Equity in earnings of unconsolidated ventures
17,167
21,310
Income tax benefit (expense)
(1,711
)
369
Net income (loss)
(80,141
)
14,957
Net (income) loss attributable to noncontrolling interests:
Investment entities
(523
)
298
Operating Partnership
1,892
(347
)
Net income (loss) attributable to Colony Credit Real Estate,
Inc. common stockholders
$
(78,772
)
$
14,908
Net income (loss) per common share – basic and
diluted
$
(0.62
)
$
0.11
Weighted average shares of common stock outstanding –
basic and diluted
128,487
127,943
COLONY CREDIT REAL ESTATE,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL INFORMATION
(In thousands, except per
share data) (Unaudited)
GAAP Net Income
(Loss) to Core Earnings (Loss) / Legacy, Non-Strategic Earnings
(Loss)
Three Months Ended March 31, 2020
Total
Legacy, Non-
Strategic Portfolio
Core Portfolio
Net loss attributable to Colony Credit Real Estate, Inc. common
stockholders
$
(78,772
)
$
(43,774
)
$
(34,998
)
Adjustments:
-
-
Net loss attributable to noncontrolling interest of the Operating
Partnership
(1,892
)
(1,049
)
(843
)
Non-cash equity compensation expense
342
154
188
Transaction costs
1,865
684
1,181
Depreciation and amortization
17,510
6,131
11,379
Net unrealized loss (gain) on investments: Impairment of operating
real estate and preferred equity
4,126
4,126
-
Other unrealized loss
40,360
34
40,326
CECL reserves(1)
29,000
(153
)
29,153
Gains on sales of real estate
(452
)
(452
)
-
Adjustments related to noncontrolling interests in investment
entities
(589
)
(376
)
(213
)
Core Earnings (Loss) / Legacy, Non-Strategic Earnings (Loss)
attributable to Colony Credit Real Estate, Inc. common stockholders
and noncontrolling interest of the Operating Partnership
$
11,498
$
(34,675
)
$
46,173
Core Earnings (Loss) / Legacy, Non-Strategic Earnings (Loss) per
share(2)
$
0.09
$
(0.26
)
$
0.35
Weighted average number of common shares and OP units(2)
131,563
131,563
131,563
____________________
(1)
Includes $29.0 million in provision for
loan losses calculated by the Company’s PD/LGD model and excludes
$40.7 million which was evaluated individually and included in Core
Earnings
(2)
The Company calculates Core Earnings
(Loss) / Legacy, Non-Strategic Earnings (Loss) per share, which are
non-GAAP financial measures, based on a weighted average number of
common shares and OP units (held by members other than the Company
or its subsidiaries). For the three months ended March 31, 2020,
the weighted average number of common shares and OP units was
approximately 131.6 million; includes 3.1 million of OP units.
GAAP Net Book
Value to Undepreciated Book Value
As of March 31, 2020
Total
Legacy, Non-
Strategic Portfolio
Core Portfolio
GAAP net book value (excl. noncontrolling interests in investment
entities)
$
1,952,360
$
196,380
$
1,755,980
Accumulated depreciation and amortization(1)
166,655
76,921
89,734
Undepreciated book value
$
2,119,015
$
273,301
$
1,845,714
GAAP net book value per share (excl. noncontrolling
interests in investment entities)
$
14.85
$
1.49
$
13.36
Accumulated depreciation and amortization per share(1)
1.27
0.59
0.68
Undepreciated book value per share
$
16.12
$
2.08
$
14.04
Total common shares and OP units outstanding(2)
131,442
131,442
131,442
____________________
(1)
Represents at-share net accumulated
depreciation and amortization on real estate investments, including
related intangible assets and liabilities
(2)
The Company calculates GAAP net book value
(excluding noncontrolling interests in investment entities) per
share and undepreciated book value per share, a non-GAAP financial
measure, based on the total number of common shares and OP units
(held by members other than the Company or its subsidiaries)
outstanding at the end of the reporting period. As of March 31,
2020, the total number of common shares and OP units outstanding
was approximately 131.4 million
Cumulative
Legacy, Non-Strategic Resolutions Since Announcing Portfolio
Bifurcation Plan (November 2019)
($ in millions; at CLNC share)
Number
Investment As of September 30, 2019, GAAP
Gross Net of Assets Count Carrying
Value Net Carrying Value(1) Sales Price(2)
Sales Price(2)(3) Sold / Resolved
18
26
$309
$198
$291
$192
Under Contract
2
2
20
20
23
23
Listed for Sale
22
25
194
100
n/a
n/a
Preparing for Sale
12
17
323
96
n/a
n/a
Total
54
70
$845
$413
n/a
n/a
____________________
(1)
Net carrying value includes $27.5 million
of investment-level financing related to one sold / resolved asset
that was paid down subsequent to September 30, 2019. As a result,
net carrying values as of September 30, 2019 may not be an
appropriate proxy when comparing to actual results
(2)
Gross and net sales price includes
approximately $13.2 million of cash proceeds related to the NY
Hospitality Loans, which were swept to paydown the unpaid principal
balance prior to closing of the discounted payoff on April 22,
2020
(3)
Net sales price represents gross sales
price net of any in-place investment-level financing and
transaction costs
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507005857/en/
Investor Relations Colony Credit Real Estate, Inc. Addo
Investor Relations Lasse Glassen 310-829-5400
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