Form 8-K Colony Capital, Inc. For: Feb 26
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K | ||
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 26, 2016
COLONY CAPITAL, INC (Exact Name of Registrant as Specified in Its Charter) | ||||
Maryland | 001-34456 | 27-0419483 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
515 S. Flower Street, 44th Floor Los Angeles, CA | 90071 | ||||
(Address of principal executive offices) | (Zip Code) | ||||
Registrant’s telephone number, including area code: (310) 282-8820
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On February 26, 2016, Colony Capital, Inc. (the “Company”) issued a press release announcing its financial position as of December 31, 2015, and financial results for the fourth quarter of 2015. A copy of the press release is attached as Exhibit 99.1 to this current report and is incorporated herein by reference.
On February 26, 2016, the Company made available Supplemental Financial Disclosure for the quarter ended December 31, 2015 on the Company’s website at www.colonyinc.com. A copy is furnished herewith as Exhibit 99.2, which is incorporated herein by reference.
In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in this Current Report on Form 8-K (including Exhibits 99.1 and 99.2 hereto), shall not be deemed “filed” for the purposes of Section 18 of the Securities Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being furnished herewith to this Current Report on Form 8-K.
99.1 | Press Release dated February 26, 2016 |
99.2 | Supplemental Financial Disclosure for the quarter ended December 31, 2015 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 26, 2016
COLONY CAPITAL, INC. | ||
By: | /s/ Darren J. Tangen | |
Darren J. Tangen | ||
Chief Financial Officer and Treasurer | ||
EXHIBIT INDEX
Exhibit No. | Description | |
99.1 | Press Release dated February 26, 2016 | |
99.2 | Supplemental Financial Disclosure for the quarter ended December 31, 2015 | |
COLONY CAPITAL ANNOUNCES
FOURTH QUARTER AND FULL YEAR 2015 FINANCIAL RESULTS
Los Angeles, CA, February 26, 2016 – Colony Capital, Inc. (NYSE: CLNY) (the “Company”) today announced financial results for the fourth quarter and full year ended December 31, 2015 and declared a dividend of $0.40 per share of Class A and Class B common stock for the first quarter of 2016.
Fourth Quarter 2015 Highlights
• | Core funds from operations (“Core FFO”) of $76.7 million, or $0.57 per basic share; Funds from operations (“FFO”) of $54.3 million, or $0.41 per basic share. |
• | Declared and paid a fourth quarter dividend of $0.40 per share of Class A and Class B common stock. |
• | The Company and funds managed by the Company invested and agreed to invest approximately $1.2 billion across the U.S. and Europe through real estate equity investments, originations and loan acquisitions. The Company invested and agreed to invest $307 million and funds managed by the Company invested and agreed to invest $925 million. |
• | Held a closing for a Company-sponsored credit fund (the “Global Credit Fund”) with total callable capital commitments of $688 million, inclusive of a 20% capital commitment by certain subsidiaries of the Company. |
• | Subsequent to quarter end, Colony American Homes (“CAH”), which was approximately 23.3% owned by the Company, and Starwood Waypoint Residential Trust (“SWAY”) completed their merger and the internalization of SWAY’s manager, forming Colony Starwood Homes (NYSE: SFR) with more than 30,000 homes and total asset value of approximately $7.7 billion. As a result of the merger, the Company received approximately 15.1 million shares, or 13.8%, of SFR. The merger transaction excluded CAH’s Colony American Finance (“CAF”) business unit. |
• | Subsequent to quarter end, the Company and funds managed by the Company invested and agreed to invest approximately $172 million across the U.S. and Europe through real estate equity investments and an origination, and sold a $75 million A-note related to a first mortgage loan acquired at a discount in the fourth quarter from a European financial institution. The Company invested and agreed to invest $109 million and funds managed by the Company invested and agreed to invest $63 million. |
Fourth Quarter 2015 Financial Results
For the fourth quarter of 2015, the Company reported total income of $241.5 million and net income attributable to common stockholders of $18.7 million, or $0.17 per basic share. Core FFO was $76.7 million, or $0.57 per basic share, and FFO was $54.3 million, or $0.41 per basic share. For more information and a reconciliation of net income attributable to common stockholders to FFO and Core FFO, please refer to the descriptions and tables at the end of this press release.
Three Months Ended December 31, 2015 | Three Months Ended December 31, 2014 | ||||||||||||||
(In thousands, except per share data) | Amount | Per Basic Share or Unit | Amount | Per Basic Share or Unit | |||||||||||
Core FFO attributable to common interests in Operating Company | $ | 76,698 | $ | 0.57 | $ | 48,439 | $ | 0.44 | |||||||
FFO attributable to common interests in Operating Company | 54,272 | 0.41 | 28,850 | 0.26 | |||||||||||
Net income attributable to common interests in Operating Company | 22,340 | 0.17 | 17,844 | 0.16 | |||||||||||
Net income attributable to common stockholders | 18,745 | 0.17 | 17,844 | 0.16 | |||||||||||
Full Year 2015 Operating Results
For the full year 2015, the Company reported total income of $842.0 million and net income attributable to common stockholders of $107.4 million, or $0.96 per basic share. Core FFO was $260.4 million, or $2.03 per basic share, and FFO was $239.3 million, or $1.87 per basic share.
“We had a strong finish to another outstanding year of performance,” said Richard Saltzman, the Company’s President and Chief Executive Officer. “As a transformed internally managed global real estate and investment company renamed Colony Capital Inc., we are very pleased with our new baseline annual results. Our financial picture is sound including modest leverage at approximately 1:1 overall, limited near term debt maturities, and solid earnings coverage of our dividend. Furthermore, the global environment remains ever more conducive to the types of investments we find the most attractive from a risk/reward standpoint.”
Fourth Quarter 2015 Operating Results and Investment Activity by Segment
The Company holds investment interests in five reportable segments: Colony Light Industrial Platform (“CLIP”), Single Family Residential Rental, Other Real Estate Equity, Real Estate Debt and Investment Management.
Equity: Colony Light Industrial Platform
The Company’s investment in CLIP represents a 62% interest in a portfolio of light industrial properties and 100% interest in the related operating platform. CLIP primarily invests in light industrial properties in infill locations in major U.S. metropolitan markets targeting superior risk-adjusted returns. Light industrial properties are typically defined as buildings of less than 250,000 square feet and an office buildout of less than 20%. As of December 31, 2015, CLIP’s portfolio consisted of 325 primarily light industrial assets totaling 34.7 million square feet across 16 major U.S. markets and was 93% leased.
During the fourth quarter, CLIP acquired nine light industrial buildings totaling 1.1 million square feet for $97 million and disposed of two non-core buildings totaling 154,000 square feet for $3.4 million. As of December 31, 2015, the Operating Company’s (“OP”) share of total assets and equity in this segment were $1.2 billion and $495 million, respectively. The OP’s share of Core FFO for the quarter was $15.1 million.
Subsequent to the end of the quarter, CLIP acquired two light industrial buildings totaling 201,000 square feet for $17.6 million and disposed of one building totaling 69,000 square feet for $1.7 million. CLIP currently has $163 million of uncalled capital commitments of which $61 million is from third-parties and the balance is from the Company. CLIP also has $39 million undrawn on its acquisition credit facility to pursue additional acquisitions.
Equity: Single-Family Residential Rentals
As of December 31, 2015, the Company’s investment in single-family residential rental homes represented a 23.3% interest in CAH which was reported under the equity method. CAH owned and managed approximately 19,000 homes in eleven states with overall portfolio occupancy of 95%, up from 94% occupancy as of September 30, 2015. During the fourth quarter, average rent growth on lease renewals was 5.7% while the retention rate of tenants with expiring leases was 76.8%.
CAH maintained its regular-way dividend for the fourth quarter of 2015 at $12.1 million, of which the Company’s share was $2.8 million, representing an approximate annualized dividend yield of 2.4% on the Company’s cost basis adjusted for the July 2015 special dividend. As of December 31, 2015, the Company’s 23.3% interest in CAH had a carrying value of $395 million, including the Company’s $57 million share of CAF’s book value. The OP’s share of Core FFO for the quarter was $6.0 million.
On January 5, 2016, CAH and SWAY completed their merger and the internalization of SWAY’s manager, forming Colony Starwood Homes with total asset value of approximately $7.7 billion. The merger created a premier single-family rental REIT consisting of more than 30,000 homes with substantial scale and strategic market density. SFR expects to achieve $50 million of annual run-rate synergies. In connection with the merger, 64.9 million common shares of SFR, representing approximately 59% of the combined company were issued to former CAH investors. The Company received 15.1 million shares of SFR, or 13.8% of the combined company.
The Company continues to focus on the growth and development of CAF which lends to other owners of single family homes for rent and was excluded from the merger between CAH and SWAY. CAF has raised $113 million of private equity with associated management fees and carried interest that inures to the benefit of CAH shareholders. CAF has cumulatively closed approximately $1.4 billion of loans as of January 31, 2016 and closed on its first securitization in the fourth quarter of 2015 involving 69 loans totaling $252 million of UPB by selling $224 million of matched-term, non-recourse senior bonds with a weighted average coupon of 3.5%. CAF’s retained interests yield a blended rate of approximately 20% before fees and expenses.
Equity: Other Real Estate Equity Investments
The Company’s investment in other real estate equity includes triple net lease investments, real estate acquired in settlement of loans, common equity in real estate or related companies, and certain preferred equity investments with profit participation meeting certain risk and return profiles. Since the completion of the combination transaction with Colony Capital, LLC in April 2015, most of the investment activity in this segment is focused on buying assets that will be contributed to various Company-sponsored funds and vehicles. During the fourth quarter, the Company and the Global Credit Fund invested $463 million, including $20 million of transaction expenses, in a real estate owned (REO) portfolio of retail, office and industrial assets in the U.K and the Company’s 20% share, including transaction costs, is $93 million. The Company and the Global Credit Fund obtained a $241 million non-recourse GBP denominated loan to finance its investment. As of December 31, 2015, the OP’s share of total assets and equity in this segment were $1.2 billion and $591 million, respectively. The OP’s share of Core FFO for the quarter was $15.7 million.
Subsequent to quarter end, the Company and funds managed by the Company invested and agreed to invest $126 million in four real estate equity transactions of which the Company’s share is $69 million.
Real Estate Debt
The Company’s investment in real estate debt includes originations and acquisitions of senior loans and subordinated debt including preferred equity meeting certain risk and fixed return parameters. During the fourth quarter, the Company and the Global Credit Fund invested $118 million in a discounted U.S first mortgage loan acquisition from a European financial institution and the Company’s 20% share is $24 million. Separately, the Company invested and committed to invest (i) $123 million in four first mortgage loan originations, which the Company intends to finance resulting in levered interests expected to yield in excess of 12% on a blended basis and (ii) $7 million in a discounted loan acquisition in Europe. As of December 31, 2015, the OP’s share of total assets and equity in this segment were $3.2 billion and $2.0 billion, respectively. The OP’s share of Core FFO for the quarter was $69.8 million.
Subsequent to quarter end, the Company invested and agreed invest $29 million in a loan origination and, on behalf of the Company and funds managed by the Company, sold a $75 million A-note related to the first mortgage loan acquired at a discount in the fourth quarter.
Real Estate Investment Management
The Company’s real estate investment management segment includes the business and operations of managing Company-sponsored funds and other investment vehicles for third-party investors. During the fourth quarter, the Company invested $925 million on behalf of funds managed by the Company. As of December 31, 2015, the Company had $18.8 billion of AUM and $9.3 billion of FEEUM compared to $18.4 billion of AUM and $8.9 billion of FEEUM as of September 30, 2015. AUM and FEEUM increased as a result of raising callable capital commitments which was in excess of reductions to AUM and FEEUM from realizations of other managed investments. As of December 31, 2015, the OP’s share of total assets and equity in this segment was $798 million and $753 million, respectively. The OP’s share of Core FFO for the quarter was $11.6 million.
Common and Preferred Stock Dividends
On February 25, 2016, the Company’s Board of Directors declared (i) an dividend of $0.40 per share of Class A and Class B common stock for the first quarter of 2016, (ii) a cash dividend of $0.53125 per share on the Company’s 8.50% Series A Cumulative Perpetual Preferred Stock for the quarterly period ending April 15, 2016, (iii) a cash dividend of $0.46875 per share on the Company’s 7.50% Series B Cumulative Perpetual Preferred Stock for the quarterly period ending April 15, 2016, and (iv) a cash dividend of $0.4453 per share on the Company’s 7.125% Series C Cumulative Perpetual Preferred Stock for the quarterly period ending April 15, 2016. All dividends will be paid on April 15, 2016 to respective stockholders of record on March 31, 2016.
On November 4, 2015, the Company’s Board of Directors declared (i) an increased dividend of $0.40 per share of Class A and Class B common stock for the fourth quarter of 2015, (ii) a cash dividend of $0.53125 per share on the Company’s 8.50% Series A Cumulative Perpetual Preferred Stock for the quarterly period ended January 15, 2016, (iii) a cash dividend of $0.46875 per share on the Company’s 7.50% Series B Cumulative Perpetual Preferred Stock for the quarterly period ended January 15, 2016, and (iv) a cash dividend of $0.4453 per share on the Company’s 7.125% Series C Cumulative Perpetual Preferred Stock for the quarterly period ended January 15, 2016. All dividends were paid on January 15, 2016 to respective stockholders of record on December 31, 2015.
Common Shares and Operating Company Units
As of February 25, 2016, the Company had 113.1 million Class A and B common shares outstanding and the OP had 134.9 million common OP units outstanding.
Non-GAAP Financial Measures
The Company presents non-GAAP financial measures in this press release. A reconciliation of each non-GAAP financial measure and the comparable GAAP financial measure can be found at the end of this press release.
Conference Call
Colony Capital, Inc. will conduct a conference call to discuss the results on Friday, February 26, 2016, 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) and use conference ID 13628552. International callers should dial (201) 689-8471 and enter the same conference ID number. For those unable to participate during the live call, a replay will be available beginning February 26, 2016 at 10:00 a.m. PT / 1:00 p.m. ET, through March 4, 2016, at 8:59 p.m. PT / 11:59 p.m. ET. To access the replay, dial (877) 870-5176 (U.S.), and use conference ID 13628552. International callers should dial (858) 384-5517 and enter the same conference ID number. The call will also be broadcast live over the Internet and can be accessed on the Investor Relations section of the Company’s website at www.colonyinc.com. A webcast of the call will be available for 90 days on the Company’s website.
About Colony Capital, Inc.
Colony Capital, Inc. is a leading global real estate and investment management firm headquartered in Los Angeles, California with 14 offices in 10 countries and more than 300 employees. Prior to its combination with Colony Financial, Inc. in 2015, Colony Capital, LLC sponsored $24 billion of equity across a variety of distinct funds and investment vehicles that collectively invested over $60 billion of total capital. The Company targets attractive risk-adjusted investment returns and its portfolio is primarily composed of: (i) real estate equity; (ii) real estate and real estate-related debt; and (iii) investment management of Company-sponsored private equity funds and vehicles. The Company has elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes.
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 the Company’s control, and may cause actual results to differ significantly from those expressed in any forward-looking statement.
All forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission (“SEC”) on February 27, 2015, as amended by Amendment No. 1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 31, 2015, the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed with the SEC on May 11, 2015, the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 10, 2015, as amended by Amendment No.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 14, 2015, the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed with the SEC on November 9, 2015, and other risks described in documents subsequently filed by the Company from time to time in the future with the SEC.
Investor Contact:
Colony Capital, Inc.
Darren Tangen
Executive Director and Chief Financial Officer
310-552-7230
or
Addo Communications, Inc.
Lasse Glassen, 310-829-5400
(FINANCIAL TABLES FOLLOW)
COLONY CAPITAL, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, | ||||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Cash | $ | 185,854 | $ | 141,936 | ||||
Loans receivable, net | ||||||||
Held for investment | 4,048,477 | 2,131,134 | ||||||
Held for sale | 75,002 | — | ||||||
Real estate assets, net | ||||||||
Held for investment | 3,132,218 | 1,643,997 | ||||||
Held for sale | 297,887 | — | ||||||
Investments in unconsolidated joint ventures | 924,465 | 1,646,977 | ||||||
Goodwill | 678,267 | 20,000 | ||||||
Deferred leasing costs and intangible assets, net | 325,513 | 106,060 | ||||||
Due from affiliates | 11,713 | — | ||||||
Other assets | 359,914 | 135,345 | ||||||
Total assets | $ | 10,039,310 | $ | 5,825,449 | ||||
LIABILITIES AND EQUITY | ||||||||
Liabilities: | ||||||||
Accrued and other liabilities | $ | 325,589 | $ | 128,119 | ||||
Due to affiliates—contingent consideration | 52,990 | — | ||||||
Due to affiliates—other | — | 12,236 | ||||||
Dividends and distributions payable | 65,688 | 47,537 | ||||||
Debt, net | 3,587,724 | 2,112,354 | ||||||
Convertible senior notes, net | 591,079 | 589,410 | ||||||
Total liabilities | 4,623,070 | 2,889,656 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock | 250 | 135 | ||||||
Common stock | 1,123 | 1,096 | ||||||
Additional paid-in capital | 2,995,243 | 2,512,743 | ||||||
Distributions in excess of earnings | (131,278 | ) | (68,003 | ) | ||||
Accumulated other comprehensive loss | (18,422 | ) | (28,491 | ) | ||||
Total stockholders’ equity | 2,846,916 | 2,417,480 | ||||||
Noncontrolling interests in investment entities | 2,138,925 | 518,313 | ||||||
Noncontrolling interests in Operating Company | 430,399 | — | ||||||
Total equity | 5,416,240 | 2,935,793 | ||||||
Total liabilities and equity | $ | 10,039,310 | $ | 5,825,449 | ||||
COLONY CAPITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Income | ||||||||||||||||
Interest income | $ | 127,629 | $ | 54,447 | $ | 417,305 | $ | 204,361 | ||||||||
Property operating income | 86,413 | 10,143 | 299,871 | 20,962 | ||||||||||||
Equity in income of unconsolidated joint ventures | 3,421 | 20,813 | 47,605 | 73,829 | ||||||||||||
Fee income | 20,745 | — | 65,813 | — | ||||||||||||
Other income | 3,274 | 194 | 11,382 | 1,497 | ||||||||||||
Total income | 241,482 | 85,597 | 841,976 | 300,649 | ||||||||||||
Expenses | ||||||||||||||||
Management fees | — | 11,766 | 15,062 | 43,133 | ||||||||||||
Investment and servicing expenses | 7,986 | 1,682 | 23,369 | 5,811 | ||||||||||||
Transaction costs | 20,736 | 13,654 | 38,888 | 21,096 | ||||||||||||
Interest expense | 37,550 | 16,285 | 133,094 | 48,365 | ||||||||||||
Property operating expenses | 32,182 | 2,820 | 117,713 | 5,563 | ||||||||||||
Depreciation and amortization | 39,368 | 5,080 | 140,977 | 9,177 | ||||||||||||
Provision for loan losses | 6,538 | — | 37,475 | — | ||||||||||||
Impairment loss | 10,425 | — | 11,192 | — | ||||||||||||
Compensation expense | 29,513 | 984 | 84,506 | 2,468 | ||||||||||||
Administrative expenses | 11,507 | 2,573 | 38,238 | 8,940 | ||||||||||||
Total expenses | 195,805 | 54,844 | 640,514 | 144,553 | ||||||||||||
Gain on sale of real estate assets, net | 2,490 | — | 8,962 | — | ||||||||||||
Gain on remeasurement of consolidated investment entities, net | — | — | 41,486 | — | ||||||||||||
Other gain (loss), net | 3,112 | (22 | ) | (5,170 | ) | 1,216 | ||||||||||
Income before income taxes | 51,279 | 30,731 | 246,740 | 157,312 | ||||||||||||
Income tax benefit | 6,697 | 181 | 9,296 | 2,399 | ||||||||||||
Net income | 57,976 | 30,912 | 256,036 | 159,711 | ||||||||||||
Net income attributable to noncontrolling interests: | ||||||||||||||||
Investment entities | 23,543 | 6,096 | 86,123 | 36,562 | ||||||||||||
Operating Company | 3,595 | — | 19,933 | — | ||||||||||||
Net income attributable to Colony Capital, Inc. | 30,838 | 24,816 | 149,980 | 123,149 | ||||||||||||
Preferred dividends | 12,093 | 6,972 | 42,569 | 24,870 | ||||||||||||
Net income attributable to common stockholders | $ | 18,745 | $ | 17,844 | $ | 107,411 | $ | 98,279 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 0.17 | $ | 0.16 | $ | 0.96 | $ | 1.01 | ||||||||
Diluted | $ | 0.17 | $ | 0.16 | $ | 0.96 | $ | 1.01 | ||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||
Basic | 111,444 | 108,944 | 110,931 | 96,694 | ||||||||||||
Diluted | 111,444 | 108,944 | 110,931 | 96,699 | ||||||||||||
COLONY CAPITAL, INC.
RECONCILIATION OF NET INCOME TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
We calculate 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 extraordinary items, as defined by GAAP, gains and losses from sales of depreciable real estate and impairment write-downs associated with depreciable real estate, plus real estate-related depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures.
We compute core funds from operations ("Core FFO") by adjusting FFO for the following items, including our share of these items recognized by our unconsolidated partnerships and joint ventures: (i) gains and losses from sales of depreciable real estate, net of depreciation, amortization and impairment previously adjusted for FFO; (ii) stock compensation expense; (iii) effects of straight-line rent revenue and straight-line rent expense on ground leases; (iv) amortization of acquired above- and below-market lease values; (v) amortization of deferred financing costs and debt premiums and discounts; (vi) unrealized fair value gains or losses on derivative instruments and on foreign currency remeasurements; (vii) acquisition-related expenses, merger and integration costs; (viii) amortization and impairment of finite-lived intangibles related to investment management contracts and customer relationships; (ix) deferred tax benefit related to amortization and impairment of investment management contracts and customer relationships; (x) gain on remeasurement of consolidated investment entities, net of deferred tax liability, and the effect of amortization thereof; (xi) non-real estate depreciation and amortization; and (xii) change in fair value of contingent consideration.
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. Our 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.
Funds from Operations and Core Funds from Operations
Three Months Ended December 31, | Year Ended December 31, 2015 | |||||||||||
(In thousands, except per share data) | 2015 | 2014 | ||||||||||
Net income attributable to common stockholders | $ | 18,745 | $ | 17,844 | $ | 107,411 | ||||||
Adjustments for FFO attributable to common interests in Operating Company: | ||||||||||||
Net income attributable to noncontrolling common interests in Operating Company | 3,595 | — | 19,933 | |||||||||
Real estate depreciation and amortization | 40,700 | 12,492 | 153,824 | |||||||||
Impairment of real estate | 8,790 | 604 | 10,857 | |||||||||
Gain on sales of real estate | (2,673 | ) | (536 | ) | (9,024 | ) | ||||||
Less: Adjustments attributable to noncontrolling interests in investment entities | (14,885 | ) | (1,554 | ) | (43,745 | ) | ||||||
FFO attributable to common interests in Operating Company and common stockholders | $ | 54,272 | $ | 28,850 | $ | 239,256 | ||||||
Additional adjustments for Core FFO attributable to common interests in Operating Company and common stockholders: | ||||||||||||
Gain on sales of real estate, net of depreciation, amortization and impairment previously adjusted for FFO | 1,866 | (165 | ) | 6,253 | ||||||||
Noncash equity compensation expense | 2,468 | 2,709 | 13,714 | |||||||||
Straight-line rent revenue | (3,293 | ) | (396 | ) | (12,539 | ) | ||||||
Gain on change in fair value of contingent consideration | (750 | ) | — | (16,510 | ) | |||||||
Amortization of acquired above- and below-market lease intangibles, net | 177 | (1,050 | ) | 1,516 | ||||||||
Amortization of deferred financing costs and debt premiums and discounts | 6,865 | 3,795 | 26,614 | |||||||||
Unrealized (gain) loss on derivatives | (3,748 | ) | 2,037 | (2,675 | ) | |||||||
Acquisition-related expenses | 22,930 | 15,520 | 41,747 | |||||||||
Amortization and impairment of investment management intangibles | 9,367 | — | 20,595 | |||||||||
Deferred tax benefit effect on amortization of investment management intangibles | (3,513 | ) | — | (7,952 | ) | |||||||
Non-real estate depreciation and amortization | 1,206 | — | 3,328 | |||||||||
Gain on remeasurement of consolidated investment entities, net of deferred tax liability | — | — | (38,028 | ) | ||||||||
Amortization of gain on remeasurement of consolidated investment entities, net | 29,573 | — | 49,244 | |||||||||
Less: Adjustments attributable to noncontrolling interests in investment entities | (40,722 | ) | (2,861 | ) | (64,118 | ) | ||||||
Core FFO attributable to common interests in Operating Company and common stockholders | $ | 76,698 | $ | 48,439 | $ | 260,445 | ||||||
FFO per common share / common OP Unit (1) | $ | 0.41 | $ | 0.26 | $ | 1.87 | ||||||
FFO per common share / common OP Unit—Diluted (1)(2) | $ | 0.39 | $ | 0.26 | $ | 1.75 | ||||||
Core FFO per common share / common OP Unit (1) | $ | 0.57 | $ | 0.44 | $ | 2.03 | ||||||
Core FFO per common share / common OP Unit—Diluted (1)(2) | $ | 0.53 | $ | 0.41 | $ | 1.88 | ||||||
Weighted average number of common Units outstanding used for FFO and Core FFO per common share and OP Unit (1) | 133,993 | 109,634 | 127,988 | |||||||||
Weighted average number of common Units outstanding used for FFO per common share and OP Unit—Diluted (1)(2) | 158,687 | 125,852 | 152,871 | |||||||||
Weighted average number of common Units outstanding used for Core FFO per common share and OP Unit—Diluted (1)(2) | 158,687 | 134,387 | 152,871 | |||||||||
__________
(1) | Calculated based on weighted average shares outstanding including participating securities (nonvested shares) and assuming the exchange of all common OP units outstanding for common shares. |
(2) | For the three months ended December 31, 2015, included in the calculation of diluted FFO and Core FFO per share is the effect of adding back $6.8 million of interest expense and 24,694,800 weighted average dilutive common share equivalents for the assumed conversion of the convertible senior notes. |
For the three months ended December 31, 2014, included in the calculation of diluted FFO and Core FFO per share is the effect of adding back $4.2 million and $6.8 million, respectively, of interest expense and 16,218,400 and 24,753,100 weighted average dilutive common share equivalents, respectively, for the assumed conversion of the convertible senior notes. For the three months ended December 31, 2014, also included in the calculation of diluted Core FFO per share is the effect of adding back $25,000 of interest expense and 58,300 weighted average dilutive common share equivalents for the assumed repayment of the $10 million unsecured note issued to Cobalt Capital Management, L.P. in shares of the Company's common stock.
For the year ended December 31, 2015, included in the calculation of diluted FFO and Core FFO per share is the effect of adding back $27.3 million of interest expense and 24,694,800 weighted average dilutive common share equivalents for the assumed conversion of the convertible senior notes. For the year ended December 31, 2015, also included in the calculation of diluted FFO and Core FFO per share is the effect of adding back $280,000 of interest expense and 187,800 weighted average dilutive common share equivalents for the assumed repayment of the $10 million unsecured note issued to Cobalt Capital Management, L.P. in shares of the Company's common stock.
The effect of the assumed conversion and repayment for the stated periods was antidilutive to net income per common share but dilutive to FFO and/or Core FFO per common share.
Core Funds from Operations—Revised Prior Periods
During the quarter ended December 31, 2015, we revised our definition of Core FFO to adjust for the deferred tax benefit related to amortization and impairment of investment management contracts and customer relationships. Such deferred benefit tax effect for the three months ended June 30, 2015 and September 30, 2015 were $2,248,000 and $2,192,000, respectively. Core FFO for the three months ended June 30, 2015 and September 30, 2015 using the revised definition are provided for comparability.
Three Months Ended June 30, 2015 | Three Months Ended September 30, 2015 | |||||||||||||||
(In thousands, except per share data) | As Previously Reported | Revised | As Previously Reported | Revised | ||||||||||||
Core FFO attributable to common interests in Operating Company and common stockholders | $ | 61,657 | $ | 59,409 | $ | 72,968 | $ | 70,776 | ||||||||
Core FFO per common share / common OP Unit—Basic | $ | 0.46 | $ | 0.45 | $ | 0.54 | $ | 0.53 | ||||||||
Core FFO per common share / common OP Unit—Diluted | $ | 0.43 | (1) | $ | 0.42 | $ | 0.50 | $ | 0.49 | |||||||
__________
(1) | Diluted Core FFO per common share / common OP Unit for the three months ended June 30, 2015 was not previously reported and is calculated using 158,446,800 weighted average dilutive common share equivalents which represent the assumed dilutive effect of the convertible senior notes and assumed repayment of the $10 million unsecured note issued to Cobalt Capital Management, L.P. in shares of the Company's common stock. |
COLONY CAPITAL, INC.
DEFINITIONS
(Unaudited)
Fee-Earning Equity Under Management (“FEEUM”) refers to the equity for which the Company provides investment management services and from which it derives management fees and/or performance allocations. FEEUM is presented as of December 31, 2015, and includes $0.8 billion of uncalled limited partner capital commitments which will not bear fees until such capital is called at the Company’s discretion. The Company's calculations of FEEUM may differ 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.
Assets Under Management (“AUM”) refers to the assets for which the Company provides investment management services and includes assets for which it may or may not charge management fees and/or performance allocations. AUM is presented as of December 31, 2015 and equals the sum of: a) the gross fair value of investments held directly by the Company or managed by the Company on behalf of its private funds, co-investments, or other investment vehicles; b) leverage, inclusive of debt held by investments and deferred purchases prices; c) uncalled limited partner capital commitments which the Company is entitled to call from investors during the given commitment period at its discretion pursuant to the terms of their respective funds; and d) with respect to majority-owned and substantially controlled investments the Company consolidates gross assets attributable to third-party investors. The Company's calculations of AUM may differ 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.
Forward-Looking Statements |
Some of the statements contained in this presentation constitute 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.
The forward-looking statements contained in this presentation reflect Colony Capital, Inc.’s (or “the Company”) current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances, many of which are beyond the Company’s control, that may cause the Company’s actual results to differ significantly from those expressed in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking: the market, economic and environmental conditions in the industrial real estate, single-family rental, and lodging sectors; any decrease in the Company’s net income and funds from operations as a result of the combination transaction with Colony Capital, LLC; the Company’s ability to manage the combination with Colony Capital, LLC effectively; the Company’s exposure to risks to which it has not historically been exposed, including liabilities with respect to the assets acquired from Colony Capital, LLC and ongoing liabilities and business risks inherent to Colony Capital LLC’s business; the Company’s business and investment strategy, including the Company’s investment in and ability to generate revenue from the single-family homes in which the Company indirectly owns an interest;; the Company’s ability to dispose of its real estate investments quickly; the performance of the hotels in which the Company owns an interest; market trends in the Company’s industry, interest rates, real estate values, the debt securities markets or the general economy or the demand for commercial real estate loans; the Company’s projected operating results; actions, initiatives and policies of the U.S. government and changes to U.S. government policies and the execution and impact of these actions, initiatives and policies; the state of the U.S. and global economy generally or in specific geographic regions; the Company’s ability to obtain and maintain financing arrangements, including securitizations; the amount and value of commercial mortgage loans requiring refinancing in future periods; the availability of attractive investment opportunities; the availability and cost of debt financing from traditional lenders; the volume of short-term loan extensions; the demand for new capital to replace maturing loans; the Company’s expected leverage; the general volatility of the securities markets in which the Company participates; changes in the value of the Company’s assets; interest rate mismatches between the Company’s target assets and any borrowings used to fund such assets; changes in interest rates and the market value of the Company’s target assets; changes in prepayment rates on the Company’s target assets; effects of hedging instruments on the Company’s target assets; rates of default or decreased recovery rates on the Company’s target assets; the impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters; the Company’s ability to maintain its qualification as a real estate investment trust, or REIT, for U.S. federal income tax purposes; the Company’s ability to maintain its exemption from registration as an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”); the availability of opportunities to acquire commercial mortgage-related, real estate-related and other securities; the availability of qualified personnel; estimates relating to the Company’s ability to make distributions to the Company’s stockholders in the future; and the Company’s understanding of its competition.
While forward-looking statements reflect Colony Capital, Inc.’s good faith beliefs, assumptions and expectations, they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and subsequent filings with the SEC.
This presentation contains statistics and other data that has been obtained from or compiled from information made available by third-party service providers. Colony Capital, Inc. has not independently verified such statistics or data.
Certain of the following slides present information related to the prior performance of Colony Capital, LLC and its affiliates. This information is provided for informational purposes only and is not intended to be indicative of future results. Actual performance of Colony Capital, Inc. may vary materially.
1
Important Note Regarding Non-GAAP Financial Measures |
This supplemental package includes certain “non-GAAP” supplemental measures that are not defined by generally accepted accounting principles, or GAAP, including funds from operations, or FFO, and core funds from operations, or Core FFO. A description of these non-GAAP financial measures and reconciliations to their most directly comparable GAAP measures, as well as a description of other metrics presented, are provided within the Appendix to this supplemental package. FFO is a non-GAAP measure defined by the National Association of Real Estate Investments Trusts, or NAREIT.
2
Table of Contents |
Page | Page | |||||||
I. | Overview | V. | Single Family Residential Rentals | |||||
a. | Summary Metrics | a. | Summary Metrics | |||||
b. | Summary of Segments | VI. | Other Real Estate Equity | |||||
II. | Financial Results | a. | Summary Metrics | |||||
a. | Consolidated Income Statements | b. | Summary of Assets | |||||
b. | Pro Rata Segment Balance Sheets | VII. | Real Estate Debt | |||||
c. | Pro Rata Segment Operating Results | a. | Summary Metrics | |||||
d. | Pro Rata Segment Reconciliation of Net Income to FFO & Core FFO | b. | Portfolio Overview | |||||
III. | Capitalization | VIII. | Investment Management | |||||
a. | Overview | a. | Summary Metrics | |||||
b. | Debt Overview | IX. | Definitions | |||||
c. | Credit Facility, Convertible Debt & Preferred Equity Overview | |||||||
IV. | Colony Light Industrial Platform | |||||||
a. | Summary Metrics | |||||||
b. | Portfolio & Lease Overview | |||||||
3
I. Overview
Ia. Overview—Summary Metrics |
Summary Metrics | |||
($ in thousands, except per share data, unless otherwise noted; as of or for the three months ended December 31, 2015) | |||
Financial data | |||
Core FFO attributable to common interests in OP and common stockholders | $ | 76,698 | |
Core FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.57 | ||
FFO attributable to common interests in OP and common stockholders | 54,272 | ||
FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.41 | ||
Net income attributable to common interests in OP and common stockholders | 22,340 | ||
Net income attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.17 | ||
1Q16 Dividend per share | 0.40 | ||
Annualized dividend | 1.60 | ||
AUM | $18.8 billion | ||
FEEUM | $9.3 billion | ||
Balance sheet, capitalization and trading statistics | |||
Total consolidated assets | $ | 10,039,310 | |
CLNY & OP share of consolidated assets | 6,916,528 | ||
Total consolidated debt (1) | 4,237,439 | ||
CLNY & OP share of consolidated debt | 3,294,650 | ||
Shares and OP units outstanding | 133,989 | ||
Share price as of 12/31/2015 | $ | 19.48 | |
Market value of common equity & OP units as of 12/31/2015 | 2,610,106 | ||
Liquidation preference of preferred equity | 625,750 | ||
Insider ownership of shares and OP units | 18.8 | % | |
__________
Note: See appendix for definitions and acronyms.
(1) Represents principal balance and excludes debt issuance costs, discounts and premiums.
5
Ib. Overview—Summary of Segments |
($ in thousands, unless otherwise noted; as of or for the three months ended December 31, 2015) | |||
Light Industrial | |||
CLNY & OP share of real estate & related assets, net (1) | $ | 1,154,516 | |
CLNY & OP share of investment-level non-recourse financing (principal balance) | 694,261 | ||
Carrying value of CLIP operating platform | 20,000 | ||
Core FFO attributable to common interests in OP and common stockholders | 15,117 | ||
Single Family Residential Rentals | |||
Investment in unconsolidated joint ventures | $ | 394,783 | |
CLNY & OP share of cost basis | 444,336 | ||
CLNY & OP share of Colony American Finance net book value (included in investments in unconsolidated joint ventures above) | 57,343 | ||
Colony Starwood Homes shares beneficially owned by OP and common stockholders as of 1/5/2016 | 15.1 million | ||
Core FFO attributable to common interests in OP and common stockholders | 6,032 | ||
Other Real Estate Equity | |||
CLNY & OP share of real estate and related assets, net, held for investment (1) | $ | 900,238 | |
CLNY & OP share of investment-level non-recourse financing for real estate and related assets, net, held for investment (principal balance) | 583,230 | ||
CLNY & OP share of real estate and related assets, net, held for sale (1) | 71,959 | ||
CLNY & OP share of investments in unconsolidated joint ventures excluding Albertsons investment | 144,925 | ||
CLNY & OP share of investments in unconsolidated joint ventures - Albertsons investment | 49,934 | ||
Core FFO attributable to common interests in OP and common stockholders | 15,688 | ||
Real Estate Debt | |||
CLNY & OP share of loans held for investment, net and held for sale, net | $ | 2,848,753 | |
CLNY & OP share of investment-level non-recourse financing (principal balance) | 1,056,676 | ||
CLNY & OP share of real estate & related assets, net (REO within debt portfolio) (1) | 33,577 | ||
CLNY & OP share of investments in unconsolidated joint ventures | 122,331 | ||
Core FFO attributable to common interests in OP and common stockholders | 69,815 | ||
Investment Management | |||
AUM | $18.8 billion | ||
FEEUM | $9.3 billion | ||
Credit Funds | $3.6 billion | ||
Core Plus / Value-Add Funds | $1.9 billion | ||
Opportunity Funds | $3.8 billion | ||
Core FFO attributable to common interests in OP and common stockholders | $ | 11,559 | |
__________
(1) Includes all components related to the asset, including real estate and lease-related intangibles.
6
II. Financial Results
IIa. Financial Results—Consolidated Income Statements |
2015 | |||||||||||||||
($ in thousands, except per share data) | Q1 | Q2 | Q3 | Q4 | |||||||||||
Income | |||||||||||||||
Interest income | $ | 46,137 | $ | 101,270 | $ | 142,269 | $ | 127,629 | |||||||
Property operating income | 43,793 | 83,230 | 86,435 | 86,413 | |||||||||||
Equity in income of unconsolidated joint ventures | 26,349 | 10,956 | 6,879 | 3,421 | |||||||||||
Fee income | — | 21,928 | 23,070 | 20,745 | |||||||||||
Other income | 333 | 3,520 | 4,325 | 3,274 | |||||||||||
Total income | 116,612 | 220,904 | 262,978 | 241,482 | |||||||||||
Expenses | |||||||||||||||
Management fees | 14,961 | 101 | — | — | |||||||||||
Transaction, investment and servicing expenses | 16,807 | 10,034 | 7,058 | 28,722 | |||||||||||
Interest expense | 26,593 | 30,924 | 38,027 | 37,550 | |||||||||||
Property operating expenses | 14,011 | 35,905 | 35,615 | 32,182 | |||||||||||
Depreciation and amortization | 22,308 | 36,645 | 42,656 | 39,368 | |||||||||||
Provision for loan losses | — | 4,078 | 26,495 | 6,538 | |||||||||||
Impairment | — | — | 317 | 10,425 | |||||||||||
Compensation expense | — | 28,644 | 25,734 | 29,513 | |||||||||||
Administrative expenses | 4,781 | 11,411 | 11,154 | 11,507 | |||||||||||
Total expenses | 99,461 | 157,742 | 187,056 | 195,805 | |||||||||||
Gain on remeasurement of consolidated investment entities, net | — | 41,486 | — | — | |||||||||||
Other (loss) gain, net | (286 | ) | (1,215 | ) | (759 | ) | 5,602 | ||||||||
Income before income taxes | 16,865 | 103,433 | 75,163 | 51,279 | |||||||||||
Income tax (provision) benefit | (650 | ) | (349 | ) | 3,598 | 6,697 | |||||||||
Net income | 16,215 | 103,084 | 78,761 | 57,976 | |||||||||||
Net income attributable to noncontrolling interests—Investment entities | 5,686 | 34,630 | 22,264 | 23,543 | |||||||||||
Net income attributable to noncontrolling interests—Operating Company | — | 9,138 | 7,200 | 3,595 | |||||||||||
Net income attributable to Colony Capital, Inc. | 10,529 | 59,316 | 49,297 | 30,838 | |||||||||||
Preferred dividends | 6,972 | 11,410 | 12,094 | 12,093 | |||||||||||
Net income attributable to common stockholders | $ | 3,557 | $ | 47,906 | $ | 37,203 | $ | 18,745 | |||||||
Net income per common share—Basic | $ | 0.03 | $ | 0.43 | $ | 0.33 | $ | 0.17 | |||||||
Net income per common share—Diluted | $ | 0.03 | $ | 0.40 | $ | 0.32 | $ | 0.17 | |||||||
Weighted average number of common shares outstanding—Basic | 109,415 | 111,394 | 111,443 | 111,444 | |||||||||||
Weighted average number of common shares outstanding—Diluted | 109,415 | 136,434 | 136,138 | 111,444 | |||||||||||
FFO attributable to common interests in OP and common stockholders | $ | 29,663 | $ | 83,159 | $ | 72,162 | $ | 54,272 | |||||||
FFO per basic common share / common OP Unit | $ | 0.27 | $ | 0.62 | $ | 0.54 | $ | 0.41 | |||||||
Core FFO attributable to common interests in OP and common stockholders | $ | 53,561 | $ | 59,409 | (1) | $ | 70,776 | (1) | $ | 76,698 | |||||
Core FFO per basic common share / common OP Unit | $ | 0.49 | $ | 0.45 | (1) | $ | 0.53 | (1) | $ | 0.57 | |||||
__________
(1) During the current quarter ended December 31, 2015, we added the deferred tax effect related to amortization and impairment of investment management contracts and customer relationships to the definition of Core FFO. As such, we have presented revised Core FFO and Core FFO per basic common share / common OP Unit from prior periods to exclude such deferred tax effects to conform to the current quarter calculation of Core FFO.
8
IIb. Financial Results—Pro Rata Segment Balance Sheets |
OP Pro Rata Share by Segment | Amounts Attributable to Noncontrolling Interests | CLNY Consolidated As Reported | |||||||||||||||||||||||||||||||||
(In thousands; as of December 31, 2015) | Light Industrial Platform | Single-Family Residential Rentals | Other Real Estate Equity | Real Estate Debt | Investment Management | Amounts not allocated to segments | Total OP Pro Rata Share | ||||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||||||||
Cash | $ | 7,607 | $ | — | $ | 31,637 | $ | 34,539 | $ | 28,499 | $ | 13,592 | $ | 115,874 | $ | 69,980 | $ | 185,854 | |||||||||||||||||
Loan receivable | |||||||||||||||||||||||||||||||||||
Held for investment | — | — | — | 2,833,861 | — | — | 2,833,861 | 1,214,616 | 4,048,477 | ||||||||||||||||||||||||||
Held for sale | — | — | — | 14,892 | — | — | 14,892 | 60,110 | 75,002 | ||||||||||||||||||||||||||
Real estate assets, net | |||||||||||||||||||||||||||||||||||
Held for investment | 1,107,081 | — | 821,475 | 13,064 | — | — | 1,941,620 | 1,190,598 | 3,132,218 | ||||||||||||||||||||||||||
Held for sale | 3,832 | — | 65,606 | 20,458 | — | — | 89,896 | 207,991 | 297,887 | ||||||||||||||||||||||||||
Investments in unconsolidated joint ventures | — | 394,783 | 194,859 | 122,331 | 9,794 | 10,449 | 732,216 | 192,249 | 924,465 | ||||||||||||||||||||||||||
Goodwill | 20,000 | — | — | — | 658,267 | — | 678,267 | — | 678,267 | ||||||||||||||||||||||||||
Deferred leasing costs and intangible assets, net | 51,342 | — | 89,469 | 55 | 87,704 | — | 228,570 | 96,943 | 325,513 | ||||||||||||||||||||||||||
Other assets | 25,915 | — | 22,943 | 151,595 | 13,949 | 66,930 | 281,332 | 90,295 | 371,627 | ||||||||||||||||||||||||||
Total assets | $ | 1,215,777 | $ | 394,783 | $ | 1,225,989 | $ | 3,190,795 | $ | 798,213 | $ | 90,971 | $ | 6,916,528 | $ | 3,122,782 | $ | 10,039,310 | |||||||||||||||||
LIABILITIES & EQUITY | |||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Accrued and other liabilities | $ | 27,810 | $ | — | $ | 57,651 | $ | 109,432 | $ | 45,406 | $ | 13,186 | $ | 253,485 | $ | 47,582 | $ | 301,067 | |||||||||||||||||
Intangible liabilities | 7,739 | — | 4,353 | — | — | — | 12,092 | 12,430 | 24,522 | ||||||||||||||||||||||||||
Due to affiliates—contingent consideration | — | — | — | — | — | 52,990 | 52,990 | — | 52,990 | ||||||||||||||||||||||||||
Dividends and distributions payable | — | — | — | — | — | 65,688 | 65,688 | — | 65,688 | ||||||||||||||||||||||||||
Debt, net | 685,059 | — | 573,287 | 1,047,550 | — | 357,983 | 2,663,879 | 923,845 | 3,587,724 | ||||||||||||||||||||||||||
Convertible senior notes, net | — | — | — | — | — | 591,079 | 591,079 | — | 591,079 | ||||||||||||||||||||||||||
Total liabilities | 720,608 | — | 635,291 | 1,156,982 | 45,406 | 1,080,926 | 3,639,213 | 983,857 | 4,623,070 | ||||||||||||||||||||||||||
Equity: | |||||||||||||||||||||||||||||||||||
Stockholders' equity | 430,140 | 342,938 | 513,124 | 1,766,719 | 653,941 | (859,946 | ) | 2,846,916 | — | 2,846,916 | |||||||||||||||||||||||||
Noncontrolling interests in investment entities | — | — | — | — | — | — | — | 2,138,925 | 2,138,925 | ||||||||||||||||||||||||||
Noncontrolling interests in Operating Company | 65,029 | 51,845 | 77,574 | 267,094 | 98,866 | (130,009 | ) | 430,399 | — | 430,399 | |||||||||||||||||||||||||
Total equity | 495,169 | 394,783 | 590,698 | 2,033,813 | 752,807 | (989,955 | ) | 3,277,315 | 2,138,925 | 5,416,240 | |||||||||||||||||||||||||
Total liabilities and equity | $ | 1,215,777 | $ | 394,783 | $ | 1,225,989 | $ | 3,190,795 | $ | 798,213 | $ | 90,971 | $ | 6,916,528 | $ | 3,122,782 | $ | 10,039,310 | |||||||||||||||||
9
IIc. Financial Results—Pro Rata Segment Operating Results |
OP Pro Rata Share by Segment | Amounts Attributable to Noncontrolling Interests | CLNY Consolidated As Reported | |||||||||||||||||||||||||||||||||
(In thousands; for the three months ended December 31, 2015) | Light Industrial Platform | Single-Family Residential Rentals | Other Real Estate Equity | Real Estate Debt | Investment Management | Amounts not allocated to segments | Total OP Pro Rata Share | ||||||||||||||||||||||||||||
Income | |||||||||||||||||||||||||||||||||||
Interest income | $ | — | $ | — | $ | 2 | $ | 77,140 | $ | — | $ | 22 | $ | 77,164 | $ | 50,465 | $ | 127,629 | |||||||||||||||||
Property operating income | 27,945 | — | 22,567 | 529 | — | — | 51,041 | 35,372 | 86,413 | ||||||||||||||||||||||||||
Equity in income (loss) of unconsolidated joint ventures | — | (5,086 | ) | 4,146 | 2,854 | (1,286 | ) | (655 | ) | (27 | ) | 3,448 | 3,421 | ||||||||||||||||||||||
Fee income | — | — | — | — | 20,745 | — | 20,745 | — | 20,745 | ||||||||||||||||||||||||||
Other income | 3,101 | — | 32 | 449 | — | 1,327 | 4,909 | (1,635 | ) | 3,274 | |||||||||||||||||||||||||
Total income | 31,046 | (5,086 | ) | 26,747 | 80,972 | 19,459 | 694 | 153,832 | 87,650 | 241,482 | |||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||
Transaction, investment and servicing expenses | 203 | — | 4,414 | 2,402 | — | 950 | 7,969 | 20,753 | 28,722 | ||||||||||||||||||||||||||
Interest expense | 5,976 | — | 4,705 | 9,183 | — | 10,980 | 30,844 | 6,706 | 37,550 | ||||||||||||||||||||||||||
Property operating expenses | 8,584 | — | 6,529 | 536 | — | — | 15,649 | 16,533 | 32,182 | ||||||||||||||||||||||||||
Depreciation and amortization | 13,239 | — | 7,303 | 24 | 5,264 | 1,206 | 27,036 | 12,332 | 39,368 | ||||||||||||||||||||||||||
Provision for loan losses | — | — | — | 1,818 | — | — | 1,818 | 4,720 | 6,538 | ||||||||||||||||||||||||||
Impairment loss | — | — | 1,272 | 673 | 4,103 | — | 6,048 | 4,377 | 10,425 | ||||||||||||||||||||||||||
Compensation expense | 840 | — | 771 | 3,839 | 10,755 | 12,019 | 28,224 | 1,289 | 29,513 | ||||||||||||||||||||||||||
Administrative expenses | 317 | — | 310 | 685 | 224 | 8,977 | 10,513 | 994 | 11,507 | ||||||||||||||||||||||||||
Total expenses | 29,159 | — | 25,304 | 19,160 | 20,346 | 34,132 | 128,101 | 67,704 | 195,805 | ||||||||||||||||||||||||||
Gain (loss) on sale of real estate assets, net | (350 | ) | — | 605 | 328 | — | — | 583 | 1,907 | 2,490 | |||||||||||||||||||||||||
Other gain (loss), net | (8 | ) | — | 540 | (159 | ) | 4 | 812 | 1,189 | 1,923 | 3,112 | ||||||||||||||||||||||||
Income before income taxes | 1,529 | (5,086 | ) | 2,588 | 61,981 | (883 | ) | (32,626 | ) | 27,503 | 23,776 | 51,279 | |||||||||||||||||||||||
Income tax benefit (expense) | 28 | — | 147 | 832 | 5,926 | (3 | ) | 6,930 | (233 | ) | 6,697 | ||||||||||||||||||||||||
Net income | 1,557 | (5,086 | ) | 2,735 | 62,813 | 5,043 | (32,629 | ) | 34,433 | 23,543 | 57,976 | ||||||||||||||||||||||||
Net income attributable to noncontrolling interests: | |||||||||||||||||||||||||||||||||||
Investment entities | — | — | — | — | — | — | — | 23,543 | 23,543 | ||||||||||||||||||||||||||
Operating Company | — | — | — | — | — | — | — | 3,595 | 3,595 | ||||||||||||||||||||||||||
Net income attributable to Colony Capital, Inc. | 1,557 | (5,086 | ) | 2,735 | 62,813 | 5,043 | (32,629 | ) | 34,433 | (3,595 | ) | 30,838 | |||||||||||||||||||||||
Preferred dividends | — | — | — | — | — | 12,093 | 12,093 | — | 12,093 | ||||||||||||||||||||||||||
Net income attributable to common stockholders | $ | 1,557 | $ | (5,086 | ) | $ | 2,735 | $ | 62,813 | $ | 5,043 | $ | (44,722 | ) | $ | 22,340 | $ | (3,595 | ) | $ | 18,745 | ||||||||||||||
10
IId. Financial Results—Pro Rata Segment Reconciliation of Net Income to FFO & Core FFO |
OP Pro Rata Share by Segment | Amounts Attributable to Noncontrolling Interests | CLNY Consolidated As Reported | |||||||||||||||||||||||||||||||||
(In thousands; for the three months ended December 31, 2015) | Light Industrial Platform | Single-Family Residential Rentals | Other Real Estate Equity | Real Estate Debt | Investment Management | Amounts not allocated to segments | Total OP Pro Rata Share | ||||||||||||||||||||||||||||
Net income (loss) attributable to Operating Company, noncontrolling interests in Operating Company and common stockholders | $ | 1,557 | $ | (5,086 | ) | $ | 2,735 | $ | 62,813 | $ | 5,043 | $ | (44,722 | ) | $ | 22,340 | $ | (3,595 | ) | $ | 18,745 | ||||||||||||||
Adjustments for FFO attributable to common interests in Operating Company: | |||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling common interests in Operating Company | — | — | — | — | — | — | — | 3,595 | 3,595 | ||||||||||||||||||||||||||
Real estate depreciation and amortization | 13,239 | 6,533 | 8,453 | 24 | — | — | 28,249 | 12,451 | 40,700 | ||||||||||||||||||||||||||
Impairment of real estate | — | 2,500 | 1,272 | 673 | — | — | 4,445 | 4,345 | 8,790 | ||||||||||||||||||||||||||
Loss (gain) on sales of real estate | 350 | (179 | ) | (605 | ) | (328 | ) | — | — | (762 | ) | (1,911 | ) | (2,673 | ) | ||||||||||||||||||||
Less: Adjustments attributable to noncontrolling interests in investment entities | — | — | — | — | — | — | — | (14,885 | ) | (14,885 | ) | ||||||||||||||||||||||||
FFO attributable to common interests in Operating Company and common stockholders | $ | 15,146 | $ | 3,768 | $ | 11,855 | $ | 63,182 | $ | 5,043 | $ | (44,722 | ) | $ | 54,272 | $ | — | $ | 54,272 | ||||||||||||||||
Additional adjustments for Core FFO attributable to common interests in Operating Company and common stockholders: | |||||||||||||||||||||||||||||||||||
Gain (loss) on sale of real estate, net of depreciation and amortization previously adjusted for FFO | (510 | ) | (49 | ) | 604 | 267 | — | — | 312 | 1,554 | 1,866 | ||||||||||||||||||||||||
Noncash equity compensation expense | — | — | 47 | 134 | 667 | 1,620 | 2,468 | — | 2,468 | ||||||||||||||||||||||||||
Straight-line rent revenue | (1,189 | ) | 46 | (1,288 | ) | — | — | — | (2,431 | ) | (862 | ) | (3,293 | ) | |||||||||||||||||||||
Gain on change in fair value of contingent consideration | — | — | — | — | — | (750 | ) | (750 | ) | — | (750 | ) | |||||||||||||||||||||||
Amortization of acquired above-and below-market lease intangibles, net | 464 | — | (547 | ) | — | — | — | (83 | ) | 260 | 177 | ||||||||||||||||||||||||
Amortization of deferred financing costs and debt premium and discounts | 1,010 | 1,120 | 520 | 2,078 | — | 1,133 | 5,861 | 1,004 | 6,865 | ||||||||||||||||||||||||||
Unrealized gain on derivatives | — | (899 | ) | (2,844 | ) | — | (5 | ) | — | (3,748 | ) | — | (3,748 | ) | |||||||||||||||||||||
Acquisition-related expenses | 196 | 2,046 | 4,001 | 120 | — | — | 6,363 | 16,567 | 22,930 | ||||||||||||||||||||||||||
Amortization and impairment of investment management intangibles | — | — | — | — | 9,367 | — | 9,367 | — | 9,367 | ||||||||||||||||||||||||||
Deferred tax benefit effect on amortization and impairment of investment management intangibles | — | — | — | — | (3,513 | ) | — | (3,513 | ) | — | (3,513 | ) | |||||||||||||||||||||||
Non-real estate depreciation and amortization | — | — | — | — | — | 1,206 | 1,206 | — | 1,206 | ||||||||||||||||||||||||||
Amortization of gain on remeasurement of consolidated investment entities, net | — | — | 3,340 | 4,034 | — | — | 7,374 | 22,199 | 29,573 | ||||||||||||||||||||||||||
Less: Adjustments attributable to noncontrolling interests in investment entities | — | — | — | — | — | — | — | (40,722 | ) | (40,722 | ) | ||||||||||||||||||||||||
Core FFO attributable to common interests in Operating Company and common stockholders | $ | 15,117 | $ | 6,032 | $ | 15,688 | $ | 69,815 | $ | 11,559 | $ | (41,513 | ) | $ | 76,698 | $ | — | $ | 76,698 | ||||||||||||||||
11
III. Capitalization
IIIa. Capitalization—Overview |
($ in thousands, except share and per share data; as of December 31, 2015) | |||||||||
Debt | |||||||||
$800,000 Revolving credit facility | $ | 315,000 | |||||||
5.0% Convertible senior notes due 2023 | 200,000 | ||||||||
3.875% Convertible senior notes due 2021 | 402,500 | ||||||||
Corporate aircraft promissory note | 42,983 | ||||||||
CLNY & OP share of investment-level debt | 2,334,167 | ||||||||
Total CLNY & OP share of debt | 3,294,650 | ||||||||
Preferred Equity | |||||||||
Series A 8.5% cumulative redeemable perpetual preferred stock, redemption value | 252,000 | ||||||||
Series B 7.5% cumulative redeemable perpetual preferred stock, redemption value | 86,250 | ||||||||
Series C 7.125% cumulative redeemable perpetual preferred stock, redemption value | 287,500 | ||||||||
Total redemption value of preferred equity | 625,750 | ||||||||
Common Equity | Price per share | Shares / Units | |||||||
Class A common stock | 19.48 | 111,694 | 2,175,799 | ||||||
Class B common stock | 19.48 | 546 | 10,636 | ||||||
OP units | 19.48 | 21,749 | 423,671 | ||||||
Total market value of common equity | 2,610,106 | ||||||||
Total capitalization | $ | 6,530,506 | |||||||
13
IIIb. Capitalization—Debt Overview |
Debt overview | ||||||||||||
($ in thousands; as of December 31, 2015) | Type | Weighted-average years remaining to maturity (1) | Weighted-average interest rate | CLNY & OP pro rata share of unpaid principal balance | ||||||||
Non-recourse debt | ||||||||||||
Light Industrial Platform | Secured | 3.9 | 2.79 | % | $ | 694,261 | ||||||
Other Real Estate Equity | Secured | 8.2 | 3.35 | % | 583,230 | |||||||
Real Estate Debt | Secured | 17.9 | 2.63 | % | 895,014 | |||||||
Total non-recourse debt | 10.8 | 2.92 | % | 2,172,505 | ||||||||
Recourse debt | ||||||||||||
Line of credit | Secured | 2.6 | 3.11 | % | 315,000 | |||||||
5.0% Convertible senior notes | Unsecured | 7.4 | 5.00 | % | 200,000 | |||||||
3.875% Convertible senior notes | Unsecured | 5.1 | 3.88 | % | 402,500 | |||||||
February 2014 warehouse facility | Secured | 1.1 | 2.61 | % | 47,229 | |||||||
April 2015 warehouse facility (25% recourse) | Secured | 2.3 | 3.06 | % | 114,433 | |||||||
Corporate aircraft promissory note | Secured | 10.1 | 5.02 | % | 42,983 | |||||||
Total recourse debt | 4.6 | 3.77 | % | 1,122,145 | ||||||||
Total debt outstanding | 8.7 | 3.14 | % | $ | 3,294,650 | |||||||
Debt maturity and amortization schedule(1) | |||||||||||||||||||||||||||
Payments due by Period | |||||||||||||||||||||||||||
($ in thousands; as of December 31, 2015) | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 and after | Total | ||||||||||||||||||||
Line of credit | $ | 65,625 | $ | 157,500 | $ | 91,875 | $ | — | $ | — | $ | — | $ | 315,000 | |||||||||||||
Convertible senior notes | — | — | — | — | — | 602,500 | 602,500 | ||||||||||||||||||||
Warehouse facilities | — | 47,229 | 114,433 | — | — | — | 161,662 | ||||||||||||||||||||
Corporate aircraft promissory note | 1,835 | 1,930 | 2,029 | 2,134 | 2,244 | 32,811 | 42,983 | ||||||||||||||||||||
CMBS securitization debt | — | — | — | — | — | 802,647 | 802,647 | ||||||||||||||||||||
Scheduled amortization payments on investment-level debt | 5,149 | 5,703 | 5,770 | 5,361 | 5,423 | 37,658 | 65,064 | ||||||||||||||||||||
Balloon payments on investment-level debt | 48,058 | 81,565 | 688,177 | 29,167 | — | 457,827 | 1,304,794 | ||||||||||||||||||||
Total | $ | 120,667 | $ | 293,927 | $ | 902,284 | $ | 36,662 | $ | 7,667 | $ | 1,933,443 | $ | 3,294,650 | |||||||||||||
__________
(1) Based on initial maturity dates or extended maturity dates to the extent criteria are met and the extension option is at the borrower's discretion.
14
IIIc. Capitalization—Credit Facility, Convertible Debt & Preferred Stock Overview |
($ and shares in thousands; as of or for the three months ended December 31, 2015) | |||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||
Revolving credit facility | |||||||||||||||||||||||
Maximum principal amount | $ | 800,000 | |||||||||||||||||||||
Amount outstanding | 315,000 | ||||||||||||||||||||||
Initial maturity | August 6, 2016 | ||||||||||||||||||||||
Fully-extended maturity | August 6, 2018 | ||||||||||||||||||||||
Interest rate | LIBOR + 2.75% | ||||||||||||||||||||||
Covenant level | Actual level at December 31, 2015 | ||||||||||||||||||||||
Financial covenants as defined in the Credit Agreement: | |||||||||||||||||||||||
Consolidated Tangible Net Worth | Minimum $1,927 million | $2,339 million | |||||||||||||||||||||
Consolidated Fixed Charge Coverage Ratio | Minimum 1.50x | 2.34 to 1.0 | |||||||||||||||||||||
Consolidated Leverage Ratio | Maximum 65% | 0.41 to 1.0 | |||||||||||||||||||||
Liquidity | Minimum $5 million | $599 million | |||||||||||||||||||||
Convertible debt | |||||||||||||||||||||||
Description | Outstanding principal | Issuance date | Due date | Interest rate | Conversion price (per share of common stock) | Conversion shares | Redemption date | ||||||||||||||||
5.0% Convertible Senior Notes | $ | 200,000 | April 2013 | April 15, 2023 | 5.00% fixed | $ | 23.60 | 8,475 | On or after April 22, 2020 | ||||||||||||||
3.875% Convertible Senior Notes | 402,500 | January and June 2014 | January 15, 2021 | 3.875% fixed | $ | 24.82 | 16,217 | On or after January 22, 2019 | |||||||||||||||
$ | 602,500 | ||||||||||||||||||||||
Preferred stock | |||||||||||||||||||||||
Description | Liquidation preference | Initial issuance date | Dividend rate | Shares outstanding | Redemption period | ||||||||||||||||||
Series A 8.5% cumulative redeemable perpetual | $ | 252,000 | March 2012 | 8.50% | 10,080 | On or after March 27, 2017 | |||||||||||||||||
Series B 7.5% cumulative redeemable perpetual | 86,250 | June 2014 | 7.50% | 3,450 | On or after June 19, 2019 | ||||||||||||||||||
Series C 7.125% cumulative redeemable perpetual | 287,500 | April 2015 | 7.125% | 11,500 | On or after April 13, 2020 | ||||||||||||||||||
$ | 625,750 | 25,030 | |||||||||||||||||||||
15
IV. Colony Light Industrial Platform
IVa. CLIP—Summary Metrics |
($ in thousands, except per share; as of or for the three months ended December 31, 2015) | |||||||||||||||||||
Financial results related to the segment | |||||||||||||||||||
Core FFO attributable to common interests in OP and common stockholders | $ | 15,117 | |||||||||||||||||
Core FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.11 | ||||||||||||||||||
FFO attributable to common interests in OP and common stockholders | 15,146 | ||||||||||||||||||
FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.11 | ||||||||||||||||||
Portfolio overview | |||||||||||||||||||
Number of buildings | 325 | ||||||||||||||||||
Rentable square feet | 34,738 | ||||||||||||||||||
% leased at end of period | 93.0 | % | |||||||||||||||||
Total goodwill associated with management platform (CLNY & OP owns 100%) | $ | 20,000 | |||||||||||||||||
Uncalled third party capital commitments | 61,300 | ||||||||||||||||||
Investment-level non-recourse financing | |||||||||||||||||||
Initial maturity date | Fully extended maturity date | Interest rate | Maximum principal amount | CLNY & OP pro rata share of unpaid principal balance | |||||||||||||||
CLIP acquisition financing | Dec-2016 | Dec-2019 | L + 2.25% | (1) | N/A | $ | 575,422 | ||||||||||||
CLIP fixed rate mortgage | Aug-2025 | Aug-2025 | 3.80 | % | N/A | 103,956 | |||||||||||||
CLIP credit facility | Jul-2016 | Jul-2016 | L + 2.25% | 100,000 | 14,883 | ||||||||||||||
Total debt | 694,261 | ||||||||||||||||||
Debt issuance costs | (9,202 | ) | |||||||||||||||||
Total debt net of debt issuance | $ | 685,059 | |||||||||||||||||
CLNY & OP share of undepreciated cost basis of real estate assets (excluding accumulated depreciation) | $ | 1,217,725 | |||||||||||||||||
CLNY & OP share of debt / undepreciated cost basis | 57.0 | % | |||||||||||||||||
Recent acquisitions | |||||||||||||||||||
Property / portfolio name | Acquisition date | Number of buildings | Rentable square feet | % leased | Purchase price | ||||||||||||||
Q4 2015 acquisitions | |||||||||||||||||||
Atlanta Light Industrial Building | Oct -2015 | 1 | 130,462 | 100 | % | $ | 10,300 | ||||||||||||
Phoenix Light Industrial Portfolio | Nov-2015 | 3 | 407,461 | 84 | % | 32,150 | |||||||||||||
Phoenix Light Industrial Portfolio | Dec-2015 | 4 | 336,615 | 100 | % | 36,450 | |||||||||||||
Phoenix Light Industrial Building | Dec-2015 | 1 | 236,007 | 100 | % | 18,000 | |||||||||||||
Total | 9 | 1,110,545 | 96 | % | $ | 96,900 | |||||||||||||
Q1 2016 acquisitions | |||||||||||||||||||
Baltimore Light Industrial Portfolio | Feb-2016 | 2 | 200,560 | 100 | % | $ | 17,625 | ||||||||||||
Total | 2 | 200,560 | 100 | % | $ | 17,625 | |||||||||||||
__________
(1) Interest rate increases to 1-month LIBOR plus 2.5% after fourth anniversary date.
17
IVb. CLIP—Portfolio and Lease Overview |
Location | Property Type | Number of Buildings | Rentable Square Feet (in thousands) | Annualized Base Rent (in thousands) | Percentage Leased | Number of Leases | Lease Expiration | Year Acquired | ||||||||||||||
United States | ||||||||||||||||||||||
Arizona | Industrial | 18 | 1,701 | $ | 4,281 | 90 | % | 48 | 1/2016 to 8/2024 | 2014 | ||||||||||||
Colorado | Industrial | 8 | 1,128 | 4,312 | 100 | % | 25 | 5/2016 to 3/2023 | 2014 | |||||||||||||
Florida | Industrial | 12 | 1,173 | 5,300 | 91 | % | 37 | 1/2016 to 1/2024 | 2014 | |||||||||||||
Georgia | Industrial | 85 | 8,355 | 31,455 | 95 | % | 234 | 1/2016 to 4/2030 | 2014-2015 | |||||||||||||
Illinois | Industrial | 33 | 3,828 | 15,893 | 94 | % | 55 | 1/2016 to 12/2026 | 2014 | |||||||||||||
Kansas | Industrial | 1 | 172 | 743 | 100 | % | 1 | 11/30/2024 | 2014 | |||||||||||||
Maryland | Industrial | 3 | 230 | 1,069 | 100 | % | 7 | 7/2016 to 8/2021 | 2015 | |||||||||||||
Minnesota | Industrial | 15 | 1,993 | 8,841 | 89 | % | 56 | 1/2016 to 10/2025 | 2014-2015 | |||||||||||||
Missouri | Industrial | 16 | 2,847 | 9,474 | 91 | % | 40 | 2/2016 to 7/2024 | 2014 | |||||||||||||
New Jersey | Industrial | 22 | 1,343 | 5,797 | 91 | % | 49 | 3/2016 to 10/2024 | 2014 - 2015 | |||||||||||||
Pennsylvania | Industrial | 8 | 1,985 | 8,172 | 92 | % | 21 | 2/2016 to 1/2026 | 2014 - 2015 | |||||||||||||
Tennessee | Industrial | 3 | 383 | 138 | 45 | % | 3 | 2/2017 to 3/2019 | 2014 | |||||||||||||
Texas | Industrial | 84 | 8,187 | 32,013 | 94 | % | 213 | 1/2016 to 4/2040 | 2014 - 2015 | |||||||||||||
Utah | Industrial | 16 | 1,269 | 5,605 | 100 | % | 33 | 2/2016 to 11/2023 | 2014 | |||||||||||||
Wisconsin | Industrial | 1 | 144 | 719 | 100 | % | 1 | 10/2022 | 2014 | |||||||||||||
Total | 325 | 34,738 | $ | 133,812 | 93 | % | 823 | |||||||||||||||
18
V. Single Family Residential Rentals
Va. Single Family Residential Rentals—Summary Metrics |
($ in thousands, except per share, unless otherwise noted; as of or for the three months ended December 31, 2015) | ||||||||||||||||
Financial results related to the segment | ||||||||||||||||
Core FFO attributable to common interests in OP and common stockholders | $ | 6,032 | ||||||||||||||
Core FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.05 | |||||||||||||||
FFO attributable to common interests in OP and common stockholders | 3,768 | |||||||||||||||
FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.03 | |||||||||||||||
Balance sheet | ||||||||||||||||
Investments in unconsolidated joint ventures | $ | 394,783 | ||||||||||||||
CLNY & OP Share of Colony American Finance net book value (included in investments in unconsolidated joint ventures above) | 57,343 | |||||||||||||||
Cost basis | ||||||||||||||||
CLNY & OP original cost basis of Colony American Homes | $ | 550,000 | ||||||||||||||
Less: Inception-to-date distributions (excluding regular-way dividends) | (105,664 | ) | ||||||||||||||
CLNY & OP cost basis as of 12/31/2015 | $ | 444,336 | ||||||||||||||
Less: CLNY & OP Share of Colony American Finance net book value | (57,343 | ) | ||||||||||||||
Allocated cost basis of Colony Starwood Homes | $ | 386,993 | ||||||||||||||
Colony Starwood Homes shares beneficially owned by OP and common stockholders as of 1/5/2016 | 15.1 million | |||||||||||||||
20
VI. Other Real Estate Equity
VIa. Other Real Estate Equity—Summary Metrics |
($ and € in thousands, except per share data; as of or for the three months ended December 31, 2015) | ||||||||||||||||||
Financial results related to the segment | ||||||||||||||||||
Core FFO attributable to common interests in OP and common stockholders | $ | 15,688 | ||||||||||||||||
Core FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.12 | |||||||||||||||||
FFO attributable to common interests in OP and common stockholders | 11,855 | |||||||||||||||||
FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.09 | |||||||||||||||||
Portfolio overview | ||||||||||||||||||
Consolidated real estate and related assets, net held for investment | ||||||||||||||||||
NNN Investments | ||||||||||||||||||
CLNY & OP share of real estate and related assets, net (1) | $ | 641,911 | ||||||||||||||||
CLNY & OP share of investment-level non-recourse financing | 406,297 | |||||||||||||||||
CLNY & OP share of Q4 NOI | 9,989 | |||||||||||||||||
Other real estate assets | ||||||||||||||||||
CLNY & OP share of real estate and related assets, net (1) | 258,327 | |||||||||||||||||
Consolidated investment-level non-recourse financing | 176,933 | |||||||||||||||||
Consolidated real estate and related assets, net held for sale | ||||||||||||||||||
CLNY & OP share of real estate and related assets, net (1) | 71,959 | |||||||||||||||||
Unconsolidated assets | ||||||||||||||||||
CLNY & OP share of investments in unconsolidated joint ventures excluding Albertsons investment | 144,925 | |||||||||||||||||
CLNY & OP share of investments in unconsolidated joint ventures - Albertsons investment | 49,934 | |||||||||||||||||
Number of post-IPO shares in Albertsons pursuant to preliminary prospectus dated October 2, 2015 | 8.45 million | |||||||||||||||||
CLNY & OP % ownership interest in post-IPO AB Acquisition LLC based on preliminary prospectus dated October 2, 2015 | 2.17 | % | ||||||||||||||||
Investment-level non-recourse mortgage debt | ||||||||||||||||||
Property type | Initial maturity date | Fully extended maturity date | Interest rate | CLNY & OP share of outstanding balance | ||||||||||||||
NNN Investments | ||||||||||||||||||
Office | Jan-2024 | Jan-2024 | 4.84 | % | $ | 87,340 | ||||||||||||
Higher education campus | Dec-2029 | Dec-2029 | 2.72 | % | 120,947 | |||||||||||||
Office | Jun-2025 | Jun-2025 | 3.91 | % | 180,960 | |||||||||||||
Office | Nov-2022 | Nov-2022 | 1.89 | % | 17,050 | |||||||||||||
Total debt related to NNN investments | 406,297 | |||||||||||||||||
Other real estate assets | ||||||||||||||||||
Office Portfolio | Aug-2018 | Aug-2020 | 3ML + 2.50% | 44,072 | ||||||||||||||
Office Portfolio | Nov-2018 | Nov-2018 | 4.02 | % | 23,973 | (2) | ||||||||||||
Hotel Portfolio | Jan-2019 | Jan-2021 | L + 4.65% | 30,126 | ||||||||||||||
Warehouse Portfolio | Jun-2022 | Jun-2022 | 3M EUR + 2.80% | 11,676 | ||||||||||||||
Mixed Use | Dec-2018 | Dec-2020 | 3ML + 2.75% | 47,081 | ||||||||||||||
Office | Jul-2018 | Jul-2020 | L + 2.65% | 6,750 | ||||||||||||||
CDCF IV subscription line | Sept-2016 | Sept-2016 | L + 1.60% | 13,255 | ||||||||||||||
Total debt related to other real estate assets | 176,933 | |||||||||||||||||
Total debt related to consolidated real estate and related assets, net held for investment | 583,230 | |||||||||||||||||
Debt issuance costs and discount | (9,943 | ) | ||||||||||||||||
Total debt net of debt issuance costs and discount | $ | 573,287 | ||||||||||||||||
__________
(1) | Includes all components related to the asset, including real estate and lease-related intangibles. |
(2) | Seller provided zero-interest financing on acquired portfolio of properties with imputed interest of 4.02%, requiring principal payments of €15,750, €35,438 and €27,562 in Nov 2016, Nov 2017 and Nov 2018, respectively, of which CLNY and OP share is 28%. A discount was established at inception and is being accreted to debt principal as interest expense. |
22
VIb. Other Real Estate Equity—Summary of Assets |
($ in thousands; as of or for the three months ended December 31, 2015) | |||||||||||||||||||||||||||||||||
CLNY & OP Pro Rata Share | |||||||||||||||||||||||||||||||||
Property type | Type | Year Acquired or Foreclosed | Location | Number of buildings | Rentable square feet (thousands) | Real estate assets & intangibles, net | Investment-level non-recourse debt | Equity of real estate assets held for investment | Percentage leased (end of period) | Number of leases | Lease expiration | ||||||||||||||||||||||
NNN Investments | |||||||||||||||||||||||||||||||||
Office | NNN | 2015 | Norway | 26 | 1,319 | $ | 308,156 | $ | 180,960 | $ | 127,196 | 100 | % | 1 | 6/2030 | ||||||||||||||||||
Education | NNN | 2015 | Switzerland | 20 | 304 | 171,145 | 120,947 | 50,198 | 100 | % | 2 | 1/2035 | |||||||||||||||||||||
Office | NNN | 2013 | Minnesota | 2 | 502 | 111,580 | 87,340 | 24,240 | 100 | % | 1 | 9/2020 | |||||||||||||||||||||
Office | NNN | 2015 | France | 3 | 17 | 36,248 | 17,050 | 19,198 | 100 | % | 1 | 11/2027 | |||||||||||||||||||||
Mixed Use | NNN | 2014 | Arizona | 2 | 82 | 14,782 | — | 14,782 | 100 | % | 1 | 6/2027 | |||||||||||||||||||||
Total Net Leases | 53 | 2,224 | 641,911 | 406,297 | 235,615 | ||||||||||||||||||||||||||||
Other Real Estate Assets | |||||||||||||||||||||||||||||||||
Office | Other | 2014-2015 | UK | 37 | 1,002 | 77,228 | 44,072 | 33,156 | 91 | % | 106 | 5/2016 to 6/3012 | |||||||||||||||||||||
Office | Other | 2013 | Arizona | 2 | 440 | 21,509 | 6,750 | 14,759 | 62 | % | 21 | 4/2016 to 6/2021 | |||||||||||||||||||||
Mixed Use | Other | 2015 | UK | 38 | 2,885 | 81,402 | 47,081 | 34,321 | 90 | % | 261 | 1/2016 to 12/2252 | |||||||||||||||||||||
Industrial | Other | 2014 | Spain | 14 | 1,055 | 23,824 | 11,676 | 12,148 | 100 | % | 14 | 12/2026 to12/2029 | |||||||||||||||||||||
Hotel | Other | 2012 | Various U.S. | 35 | NA | 33,074 | 30,126 | 2,948 | NA | NA | NA | ||||||||||||||||||||||
Office | Other | 2014 | Italy (1) | 35 | 213 | 21,290 | — | 21,290 | 78 | % | 47 | 5/2017 to 11/2020 | |||||||||||||||||||||
Total Other Real Estate Assets | 161 | 5,595 | 258,327 | 139,705 | (2) | 118,622 | |||||||||||||||||||||||||||
Total Other Real Estate Assets Held for Investment | 214 | 7,819 | $ | 900,238 | $ | 546,002 | $ | 354,237 | |||||||||||||||||||||||||
__________
(1) Excludes one building with 218,000 rentable square feet that is subject to development.
(2) Excludes $22.2 million of deferred purchase price and $13.3 million of CDCF IV subscription line debt.
23
VII. Real Estate Debt
VIIa. Real Estate Debt—Summary Metrics |
($ in thousands, except per share data; as of or for the three months ended December 31, 2015) | |||||||||||||||||||
Financial results related to the segment | |||||||||||||||||||
Core FFO attributable to common interests in OP and common stockholders | $ | 69,815 | |||||||||||||||||
Core FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.52 | ||||||||||||||||||
FFO attributable to common interests in OP and common stockholders | 63,182 | ||||||||||||||||||
FFO attributable to common interests in OP and common stockholders per basic common share / common OP unit | 0.47 | ||||||||||||||||||
Portfolio overview | |||||||||||||||||||
Non-PCI loans | |||||||||||||||||||
CLNY & OP share of loans receivables, net, held for investment and held for sale | $ | 2,619,716 | |||||||||||||||||
CLNY & OP share of investment-level non-recourse financing | 1,030,446 | ||||||||||||||||||
Investments in unconsolidated joint ventures | 117,465 | ||||||||||||||||||
PCI loans | |||||||||||||||||||
CLNY & OP share of loans receivables, net, held for investment | 229,037 | ||||||||||||||||||
CLNY & OP share of investment-level non-recourse financing | 26,230 | ||||||||||||||||||
Investments in unconsolidated joint ventures | 4,866 | ||||||||||||||||||
Real Estate Assets, net (REO within debt portfolio) | |||||||||||||||||||
CLNY & OP share of real estate & related assets, net (1) | 33,577 | ||||||||||||||||||
Investment-level non-recourse financing | |||||||||||||||||||
Non-PCI | Initial maturity date | Fully-extended maturity date | Interest rate | Maximum principal amount | CLNY & OP pro rata share of outstanding balance | ||||||||||||||
February 2014 warehouse facility | Feb-2017 | Feb-2017 | L + 2.50% | $ | 150,000 | $ | 47,229 | ||||||||||||
April 2015 warehouse facility | Apr-2018 | Apr-2019 | L + 2.50% - L+2.75% | 250,000 | 114,433 | ||||||||||||||
Colony 2014-MF1 securitization | Apr-2050 | Apr-2050 | 2.54 | % | N/A | 145,349 | |||||||||||||
CLO bonds - CMC 2014-1 | Apr-2031 | Apr-2031 | L + 1.78% | N/A | 121,261 | ||||||||||||||
CLO bonds - CMC 2014-2 | Nov-2031 | Nov-2031 | L + 1.96% | N/A | 195,687 | ||||||||||||||
CLO bonds - CMC 2015 | Sept-2032 | Sept-2032 | L + 2.36% | N/A | 340,350 | ||||||||||||||
Florida multifamily property loan | Mar-2016 | Sept-2016 | 4.28 | % | (2) | N/A | 4,949 | ||||||||||||
Freddie Mac portfolio | Dec-2017 | Dec-2019 | L + 2.85% | N/A | 53,732 | ||||||||||||||
CDCF IV subscription line | Sept-2016 | Sept-2016 | L + 1.60% | N/A | 7,456 | ||||||||||||||
Total Non-PCI | 1,030,446 | ||||||||||||||||||
PCI | |||||||||||||||||||
Project London loan portfolio | Apr-2016 | Apr-2019 | L + 3.75% | N/A | 11,559 | ||||||||||||||
Midwest loan portfolio | Jun-2016 | Jun-2017 | L + 4.00% | N/A | 2,721 | ||||||||||||||
Metro loan portfolio | Apr-2016 | Apr-2018 | L + 3.75% | N/A | 5,483 | ||||||||||||||
California first mortgage portfolio I | Aug-2016 | Aug-2018 | L + 3.75% | N/A | 4,289 | ||||||||||||||
California first mortgage portfolio II | Sept-2016 | Sept-2018 | L + 3.25% | N/A | 2,178 | ||||||||||||||
Total PCI | 26,230 | ||||||||||||||||||
Total debt | 1,056,676 | ||||||||||||||||||
Debt issuance costs | (9,126 | ) | |||||||||||||||||
Total debt net of issuance costs | $ | 1,047,550 | |||||||||||||||||
__________
(1) Includes all components related to the asset, including real estate and lease-related intangibles.
(2) The variable interest rate on the loan was fixed at 4.28% through an interest rate swap.
25
VIIb. Real Estate Debt—Portfolio Overview |
CLNY & OP Pro Rata Share | |||||||||||||
($ in thousands; as of December 31, 2015) | Unpaid principal balance | Gross carrying amount | Weighted average coupon | Weighted average maturity in years | |||||||||
Non-PCI loans | |||||||||||||
Fixed rate | |||||||||||||
Mortgage loans | $ | 482,339 | $ | 478,654 | 9.8 | % | 4.4 | ||||||
Securitized mortgage loans | 135,519 | 138,542 | 6.4 | % | 16.9 | ||||||||
B-notes | 152,778 | 153,240 | 8.3 | % | 2.4 | ||||||||
Mezzanine loans | 102,806 | 103,822 | 11.7 | % | 3.2 | ||||||||
Total fixed rate non-PCI loans | 873,442 | 874,258 | |||||||||||
Variable rate | |||||||||||||
Mortgage loans | 512,324 | 507,406 | 7.0 | % | 1.7 | ||||||||
Securitized mortgage loans | 1,033,080 | 1,029,618 | 5.5 | % | 3.5 | ||||||||
B-notes | 1,796 | 1,567 | 9.5 | % | 2.3 | ||||||||
Mezzanine loans | 192,956 | 192,447 | 10.7 | % | 0.8 | ||||||||
Total variable rate non-PCI loans | 1,740,156 | 1,731,038 | |||||||||||
Total Non-PCI Loans | 2,613,598 | 2,605,296 | |||||||||||
PCI loans | |||||||||||||
Mortgage loans | 331,629 | 230,620 | |||||||||||
Securitized mortgage loans | 8,871 | 7,422 | |||||||||||
Total PCI Loans | 340,500 | 238,042 | |||||||||||
Non-PCI loan held for sale | 14,891 | 14,892 | |||||||||||
Allowance for loan losses | — | (9,477 | ) | ||||||||||
Total loans receivable | $ | 2,968,989 | $ | 2,848,753 | |||||||||
26
VIII. Investment Management
VIIIa. Investment Management—Summary Metrics |
($ in thousands unless otherwise noted; as of or for three months ended December 31, 2015) | ||||
AUM | $18.8 billion | |||
FEEUM | $9.3 billion | |||
Credit Funds | $3.6 billion | |||
Core Plus / Value-Add Funds | $1.9 billion | |||
Opportunity Funds | $3.8 billion | |||
Income: | ||||
Total income | $ | 19,459 | ||
Expenses: | ||||
Amortization | 5,264 | |||
Compensation expense | 10,755 | |||
Impairment loss | 4,103 | |||
Administrative expenses | 224 | |||
Total expenses | 20,346 | |||
Other gain, net | 4 | |||
Income tax benefit | 5,926 | |||
Net Income | 5,043 | |||
Add: Noncash equity compensation expense | 667 | |||
Add: Unrealized gain on derivatives | (5 | ) | ||
Add: Amortization of investment management intangibles | 9,367 | |||
Add: Deferred tax benefit effect on amortization and impairment of investment management intangibles | (3,513 | ) | ||
Core FFO | $ | 11,559 | ||
28
IX. Definitions
IX. Definitions |
a) | Assets Under Management ("AUM") refers to the assets for which the Company provides investment management services and includes assets for which it may or may not charge management fees and/or performance allocations. AUM is presented as of December 31, 2015 and equals the sum of: a) the gross fair value of investments held directly by the Company or managed by the Company on behalf of its private funds, co-investments, or other investment vehicles; b) leverage, inclusive of debt held by investments and deferred purchases prices; c) uncalled limited partner capital commitments which the Company is entitled to call from investors during the given commitment period at its discretion pursuant to the terms of their respective funds; and d) with respect to majority-owned and substantially controlled investments the Company consolidates gross assets attributable to third-party investors. The Company's calculations of AUM may differ 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. |
b) | Colony Capital, Inc. ("CLNY") |
c) | Colony Light Industrial Platform ("CLIP") |
d) | Core Funds from Operations ("Core FFO") is calculated by adjusting Funds from Operations ("FFO") for the following items, including the Company’s share of these items recognized by the Company’s unconsolidated partnerships and joint ventures: (i) gains and losses from sales of depreciable real estate, net of depreciation, amortization and impairment previously adjusted for FFO; (ii) stock compensation expense; (iii) effects of straight-line rent revenue and straight-line rent expense on ground leases; (iv) amortization of acquired above- and below-market lease values; (v) amortization of deferred financing costs and debt premiums and discounts; (vi) unrealized fair value gains or losses on derivative instruments and on foreign currency remeasurements; (vii) acquisition-related expenses, merger and integration costs; (viii) amortization and impairment of finite-lived intangibles related to investment management contracts and customer relationships; (ix) deferred tax benefit related to amortization and impairment of investment management contracts and customer relationships; (x) gain on remeasurement of consolidated investment entities, net of deferred tax liability, and the effect of amortization thereof; (xi) non-real estate depreciation and amortization; and (xii) change in fair value of contingent consideration. |
e) | Fee-Earning Equity Under Management ("FEEUM") refers to the equity for which the Company provides investment management services and from which it derives management fees and/or performance allocations. FEEUM is presented as of December 31, 2015. FEEUM includes $0.8 billion of uncalled limited partner capital commitments which will not bear fees until such capital is called at the Company’s discretion. The Company's calculations of FEEUM may differ 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. |
f) | Funds from Operations ("FFO") is calculated in accordance with standards established by the National Association of Real Estate Investment Trusts ("NAREIT"), which defines FFO as net income or loss calculated in accordance with GAAP, excluding extraordinary items, as defined by GAAP, gains and losses from sales of depreciable real estate and impairment write-downs associated with depreciable real estate, plus real estate-related depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. |
g) | Net Operating Income ("NOI") is property operating income less property operating expenses adjusted for non-cash items, including straight line rents and above/below market lease amortization. |
h) | Operating Company ("OP") refers to Colony Capital Operating Company, LLC, an operating subsidiary of the Company. The Company is structured as an umbrella partnership real estate investment trust, or UPREIT, in which its wholly-controlled subsidiary, Colony Capital Operating Company, LLC (the “OP”), directly or indirectly holds substantially all of the Company’s assets and directly or indirectly conducts substantially all of the Company’s business. |
i) | Purchased Credit-Impaired ("PCI") represent loans that were acquired at a discount with evidence of underlying credit deterioration and for which it is probable that all contractually required payments will not be collected. |
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