Colony Capital Announces Third Quarter 2018 Financial Results
Third Quarter 2018 Financial Results and Highlights
- Third quarter 2018 net loss attributable to common stockholders of
$(70.0) million , or$(0.15) per share, and Core FFO of$102.2 million , or$0.20 per share - The Company’s Board of Directors declared and paid a third quarter 2018 dividend of
$0.11 per share of Class A and B common stock - During the third quarter 2018, the Company raised approximately
$1.5 billion of third-party capital (including amounts related to affiliates) from institutional clients, bringing year-to-date third-party capital raised to$5.2 billion - Digital Colony, the Company's digital real estate infrastructure vehicle established in partnership with
Digital Bridge , raised$1.0 billion during the third quarter 2018 and had an aggregate$4.0 billion of committed capital as ofSeptember 30, 2018 , inclusive of a$250 million capital commitment by certain subsidiaries of the Company - The Company raised
$84 million of third-party capital in the industrial platform resulting in$1.5 billion of total third-party capital under management - The Company received an additional commitment of
$291 million from a third-party institutional investor for its investment inAccorInvest bringing total third-party capital to$760 million
- Digital Colony, the Company's digital real estate infrastructure vehicle established in partnership with
- The Company completed over
$590 million of Other Equity and Debt asset monetizations, with net equity proceeds of approximately$324 million , which brings year-to-date asset monetizations to$1.1 billion with net equity proceeds of approximately$661 million - The Company invested, or committed to invest,
$166 million in five Strategic Other Equity and Debt investments, representing immediate GP co-investments or investments the Company expects to contribute to a future managed fund, or syndicate to third-party investors - The Company redeemed all of the shares of its 8.5% Series D cumulative redeemable perpetual preferred stock for
$200 million with aggregate year-to-date preferred stock redemptions and common stock repurchases of$519 million - Subsequent to the third quarter 2018:
- The Company announced a corporate restructuring and reorganization plan which is expected to generate
$50 to$55 million ($45 to$50 million on a cash basis) of annual compensation and administrative cost savings over the next 12 to 18 months- Following a strategic review process, the Company is implementing this plan to match resources that further align its increasing focus on the investment management business and its global workforce is expected to decrease by approximately 15%, primarily associated with the exiting of non-core assets and business lines
- The Company invested, or committed to invest, approximately
$130 million , primarily in a Strategic Other Equity and Debt investment, which the Company expects to contribute to a future managed fund or syndicate to third-party investors - As of
November 5, 2018 , the Company had approximately$1.0 billion of liquidity through availability under its revolving credit facility
- The Company announced a corporate restructuring and reorganization plan which is expected to generate
For more information and a reconciliation of net income/(loss) to common stockholders to Core FFO, NOI and/or EBITDA, please refer to the non-GAAP financial measure definitions and tables at the end of this press release.
Third Quarter 2018 Operating Results and Investment Activity by Segment
As of
During the third quarter 2018, this segment’s net loss attributable to common stockholders was
The following table presents NOI and certain operating metrics by property types in the Company’s
Consolidated | CLNY OP | Same Store | |||||||||||||||||||||||||||||||||||||
NOI | Share NOI(1) | Consolidated NOI(2) | Occupancy %(3) | TTM Lease Coverage(4) | |||||||||||||||||||||||||||||||||||
($ in millions) | Q3 2018 | Q3 2018 | Q3 2018 | Q2 2018 | Q3 2018 | Q2 2018 | |
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$ | 16.5 | $ | 11.7 | $ | 17.4 | $ | 17.4 | 87.1 | % | 86.7 | % | N/A | N/A | |||||||||||||||||||||||||
Medical Office Buildings | 13.4 | 9.5 | 13.4 | 13.7 | 83.0 | % | 82.6 | % | N/A | N/A | |||||||||||||||||||||||||||||
Triple- |
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15.3 | 10.8 | 15.3 | 15.5 | 82.0 | % | 82.3 | % | 1.4x | 1.4x | |||||||||||||||||||||||||||||
Skilled Nursing Facilities | 26.2 | 18.6 | 26.2 | 26.0 | 81.9 | % | 82.2 | % | 1.2x | 1.2x | |||||||||||||||||||||||||||||
Hospitals | 5.1 | 3.6 | 5.1 | 4.8 | 57.1 | % | 59.6 | % | 3.2x | 3.3x | |||||||||||||||||||||||||||||
Healthcare Total | $ | 76.5 | $ | 54.2 | $ | 77.4 | $ | 77.4 | |||||||||||||||||||||||||||||||
(1) | CLNY OP Share NOI represents third quarter 2018 Consolidated NOI multiplied by CLNY OP’s ownership interest as of |
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(2) | Same Store Consolidated NOI excludes |
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(3) | Occupancy % for |
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(4) | Represents the ratio of the tenant’s/operator’s EBITDAR to cash rent payable to the Company’s |
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Asset Acquisition and Disposition
During the third quarter 2018, the consolidated healthcare portfolio disposed of one senior housing operating property and acquired a triple-net lease senior housing property formally financed under the Company’s
As of
During the third quarter 2018, this segment’s net income attributable to common stockholders was
The following table presents NOI and certain operating metrics in the Company’s
Consolidated | CLNY OP | Same Store | ||||||||||||||||||||||||||||||
NOI |
Share NOI(1) |
Consolidated NOI | Leased %(2) | |||||||||||||||||||||||||||||
($ in millions) | Q3 2018 | Q3 2018 | Q3 2018 | Q2 2018 | |
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Industrial | $ | 49.0 | $ | 17.7 | $ | 32.1 | $ | 32.6 | 94.9 | % | 94.1 | % | ||||||||||||||||||||
(1) | CLNY OP Share NOI represents third quarter 2018 Consolidated NOI multiplied by CLNY OP’s ownership interest as of |
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(2) | Leased % as of the reported date represents square feet under executed leases, some of which may not have taken occupancy. | ||
Asset Acquisitions and Dispositions
During the third quarter 2018, the consolidated industrial portfolio acquired 15 industrial buildings totaling approximately 1.5 million square feet and one land parcel for development for a total of approximately
Subsequent to the third quarter 2018, the consolidated industrial portfolio disposed of three non-core buildings for approximately
As of
During the third quarter 2018, this segment’s net loss attributable to common stockholders was
The following table presents EBITDA and certain operating metrics by brands in the Company’s
Same Store | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | CLNY OP Share | Avg. Daily Rate | RevPAR(3) | ||||||||||||||||||||||||||||||||||||||||||||||||||
EBITDA(1) |
EBITDA(2) |
Consolidated EBITDA |
Occupancy %(4) |
(In dollars)(4) | (In dollars)(4) | ||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | Q3 2018 | Q3 2018 | Q3 2018 | Q3 2017 | Q3 2018 | Q3 2017 | Q3 2018 | Q3 2017 | Q3 2018 | Q3 2017 | |||||||||||||||||||||||||||||||||||||||||||
Marriott | $ | 59.6 | $ | 56.3 | $ | 59.6 | $ | 60.8 | 77.0 | % | 76.6 | % | $ | 129 | $ | 129 | $ | 99 | $ | 99 | |||||||||||||||||||||||||||||||||
Hilton | 13.6 | 12.8 | 13.6 | 13.2 | 84.8 | % | 82.6 | % | 132 | 131 | 112 | 108 | |||||||||||||||||||||||||||||||||||||||||
Other | 4.7 | 4.4 | 4.7 | 4.9 | 85.4 | % | 86.3 | % | 139 | 139 | 118 | 120 | |||||||||||||||||||||||||||||||||||||||||
Total/W.A. | $ | 77.9 | $ | 73.5 | $ | 77.9 | $ | 78.9 | 78.7 | % | 78.1 | % | $ | 130 | $ | 130 | $ | 102 | $ | 102 | |||||||||||||||||||||||||||||||||
(1) | Third quarter 2018 Consolidated EBITDA excludes a FF&E reserve contribution amount of |
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(2) | CLNY OP Share EBITDA represents third quarter 2018 Consolidated EBITDA multiplied by CLNY OP’s ownership interest as of |
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(3) | RevPAR, or revenue per available room, represents a hotel's total guestroom revenue divided by the room count and the number of days in the period being measured. | ||
(4) | For each metric, data represents average during the presented quarter. | ||
Asset Financing
During the third quarter 2018, the Company refinanced approximately
On
Other Equity and Debt
The Company owns a diversified group of strategic and non-strategic real estate and real estate-related debt and equity investments. Strategic investments include our 11% interest in
Other Equity and Debt Segment Asset Acquisitions and Dispositions
During the third quarter 2018, the Company invested, or committed to invest,
As of
CLNY OP Share | |||||||||||||||||||||||
Undepreciated Carrying Value | |||||||||||||||||||||||
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($ in millions) | Assets | Equity | Assets | Equity | |||||||||||||||||||
Strategic: |
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GP co-investments | $ | 855 | $ | 528 | $ | 843 | $ | 422 | |||||||||||||||
Interest in NRE | 74 | 74 | 75 | 75 | |||||||||||||||||||
Strategic Subtotal | 929 | 602 | 918 | 497 | |||||||||||||||||||
Non-Strategic: |
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Other Real Estate Equity & Albertsons | 1,742 | 956 | 1,749 | 968 | |||||||||||||||||||
Real Estate Debt | 399 | 376 | 443 | 419 | |||||||||||||||||||
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245 | 108 | 585 | 250 | |||||||||||||||||||
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71 | 71 | 221 | 221 | |||||||||||||||||||
Non-Strategic Subtotal | 2,457 | 1,511 | 2,998 | 1,858 | |||||||||||||||||||
Total Other Equity and Debt | $ | 3,386 | $ | 2,113 | $ | 3,916 | $ | 2,355 | |||||||||||||||
Investment Management
The Company’s Investment Management segment includes the business and operations of managing capital on behalf of third-party investors through closed and open-end private funds, non-traded and traded real estate investment trusts and registered investment companies. As of
Digital Real Estate Infrastructure
During the third quarter 2018, Digital Colony raised
Assets Under Management (“AUM”)
As of
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($ in billions) | Amount | % of
Grand Total |
Amount | % of Grand Total |
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Balance Sheet (CLNY OP Share): | ||||||||||||||||||||||
Healthcare | $ | 4.1 | 9.4 | % | $ | 4.1 | 9.4 | % | ||||||||||||||
Industrial | 1.2 | 2.8 | % | 1.2 | 2.8 | % | ||||||||||||||||
Hospitality | 4.0 | 9.2 | % | 3.9 | 9.1 | % | ||||||||||||||||
Other Equity and Debt | 3.4 | 7.8 | % | 3.9 | 9.2 | % | ||||||||||||||||
CLNC: Investments contributed to CLNC(1) | 2.0 | 4.5 | % | 1.8 | 4.2 | % | ||||||||||||||||
Balance Sheet Subtotal | 14.7 | 33.7 | % | 14.9 | 34.7 | % | ||||||||||||||||
Investment Management: | ||||||||||||||||||||||
Institutional Funds | 9.8 | 22.5 | % | 9.8 | 22.9 | % | ||||||||||||||||
Retail Companies | 3.6 | 8.3 | % | 3.6 | 8.4 | % | ||||||||||||||||
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3.5 | 8.0 | % | 3.1 | 7.2 | % | ||||||||||||||||
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2.0 | 4.6 | % | 2.1 | 4.9 | % | ||||||||||||||||
Non-Wholly Owned REIM Platforms(3) | 10.0 | 22.9 | % | 9.4 | 21.9 | % | ||||||||||||||||
Investment Management Subtotal | 28.9 | 66.3 | % | 28.0 | 65.3 | % | ||||||||||||||||
Grand Total | $ | 43.6 | 100.0 | % | $ | 42.9 | 100.0 | % | ||||||||||||||
(1) | Represents the Company’s 37% ownership share of CLNC’s total pro-rata share of assets, excluding securitization trust liabilities, of |
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(2) | Represents 3rd party 63% ownership share of CLNC’s total pro-rata share of assets, excluding securitization trust liabilities, of |
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(3) | REIM: |
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Corporate Restructuring and Cost Reduction Plan
Following a strategic review process, the Company announced that it is implementing a corporate restructuring and reorganization plan to match resources that further align its increasing focus on the investment management business under an ‘asset-light’ business model while exiting certain non-core businesses and assets. The plan is expected to deliver
Liquidity and Financing
As of
Common Stock and Operating Company Units
As of
As of
Contingent Consideration
During the third quarter 2018, the Company issued 2.0 million common shares and operating company units with an estimated value of
Common and Preferred Dividends
The Company redeemed in its entirety the outstanding Series D cumulative redeemable perpetual preferred stock and paid all accrued cash dividends, in accordance of the terms of the redemption, related to the Series D cumulative redeemable perpetual preferred stock on
On
On
Non-GAAP Financial Measures and Definitions
Assets Under Management (“AUM”)
Assets for which the Company and its affiliates provide investment management services, including assets for which the Company may or may not charge management fees and/or performance allocations. AUM is based on reported gross undepreciated carrying value of managed investments as reported by each underlying vehicle at
CLNY OP
The operating partnership through which the Company conducts all of its activities and holds substantially all of its assets and liabilities. CLNY OP share excludes noncontrolling interests in investment entities.
Fee-Earning Equity Under Management (“FEEUM”)
Equity for which the Company and its affiliates provides investment management services and derives management fees and/or performance allocations. FEEUM generally represents a) the basis used to derive fees, which may be based on invested equity, stockholders’ equity, or fair value pursuant to the terms of each underlying investment management agreement and b) the Company’s pro-rata share of fee bearing equity of each affiliate as presented and calculated by the affiliate. Affiliates include the co-sponsored digital real estate infrastructure vehicle,
Funds From Operations (“FFO”) and Core Funds From Operations (“Core FFO”)
The Company calculates funds from operations (“FFO”) in accordance with standards established by the
The Company computes core funds from operations (“Core FFO”) by adjusting FFO for the following items, including the Company’s share of these items recognized by its unconsolidated partnerships and joint ventures: (i) gains and losses from sales of depreciable real estate within the Other Equity and Debt segment, net of depreciation, amortization and impairment previously adjusted for FFO; (ii) gains and losses from sales of businesses within the Investment Management segment and impairment write-downs associated with the Investment Management segment; (iii) equity-based compensation expense; (iv) effects of straight-line rent revenue and expense; (v) amortization of acquired above- and below-market lease values; (vi) amortization of deferred financing costs and debt premiums and discounts; (vii) unrealized fair value gains or losses and foreign currency remeasurements; (viii) acquisition-related expenses, merger and integration costs; (ix) amortization and impairment of finite-lived intangibles related to investment management contracts and customer relationships; (x) gain on remeasurement of consolidated investment entities and the effect of amortization thereof; (xi) non-real estate depreciation and amortization; (xii) change in fair value of contingent consideration; and (xiii) tax effect on certain of the foregoing adjustments. Beginning with the first quarter of 2018, the Company’s Core FFO from its interest in
FFO and Core FFO should not be considered alternatives to GAAP net income as indications of operating performance, or to cash flows from operating activities as measures of liquidity, nor as indications of the availability of funds for our cash needs, including funds available to make distributions. FFO and Core FFO should not be used as supplements to or substitutes for cash flow from operating activities computed in accordance with GAAP. The Company’s calculations of FFO and Core FFO may differ from methodologies utilized by other REITs for similar performance measurements, and, accordingly, may not be comparable to those of other REITs.
The Company uses FFO and Core FFO as supplemental performance measures because, in excluding real estate depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that captures trends in occupancy rates, rental rates, and operating costs. The Company also believes that, as widely recognized measures of the performance of REITs, FFO and Core FFO will be used by investors as a basis to compare its operating performance with that of other REITs. However, because FFO and Core FFO exclude depreciation and amortization and capture neither the changes in the value of the Company’s properties that resulted from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of its properties, all of which have real economic effect and could materially impact the Company’s results from operations, the utility of FFO and Core FFO as measures of the Company’s performance is limited. FFO and Core FFO should be considered only as supplements to GAAP net income as a measure of the Company’s performance.
Net Operating Income (“NOI”) / Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”)
NOI for healthcare and industrial segments represents total property and related income less property operating expenses, adjusted for the effects of (i) straight-line rental income adjustments; (ii) amortization of acquired above- and below-market lease adjustments to rental income; and (iii) other items such as adjustments for the Company’s share of NOI of unconsolidated ventures.
EBITDA for the hospitality real estate segment represents net income from continuing operations of that segment excluding the impact of interest expense, income tax expense or benefit, and depreciation and amortization.
The Company believes that NOI and EBITDA are useful measures of operating performance of its respective real estate portfolios as they are more closely linked to the direct results of operations at the property level. NOI also reflects actual rents received during the period after adjusting for the effects of straight-line rents and amortization of above- and below- market leases; therefore, a comparison of NOI across periods better reflects the trend in occupancy rates and rental rates of the Company’s properties.
NOI and EBITDA exclude historical cost depreciation and amortization, which are based on different useful life estimates depending on the age of the properties, as well as adjust for the effects of real estate impairment and gains or losses on sales of depreciated properties, which eliminate differences arising from investment and disposition decisions. This allows for comparability of operating performance of the Company’s properties period over period and also against the results of other equity REITs in the same sectors. Additionally, by excluding corporate level expenses or benefits such as interest expense, any gain or loss on early extinguishment of debt and income taxes, which are incurred by the parent entity and are not directly linked to the operating performance of the Company’s properties, NOI and EBITDA provide a measure of operating performance independent of the Company’s capital structure and indebtedness.
However, the exclusion of these items as well as others, such as capital expenditures and leasing costs, which are necessary to maintain the operating performance of the Company’s properties, and transaction costs and administrative costs, may limit the usefulness of NOI and EBITDA. NOI may fail to capture significant trends in these components of
NOI should not be considered as an alternative to net income (loss), determined in accordance with
Earnings Before Interest, Tax, Depreciation, Amortization and Rent (“EBITDAR”)
Represents earnings before interest, taxes, depreciation, amortization and rent for facilities accruing to the tenant/operator of the property (not the Company) for the period presented. The Company uses EBITDAR in determining TTM Lease Coverage for triple-net lease properties in its
TTM Lease Coverage
Represents the ratio of EBITDAR to recognized cash rent for owned facilities on a trailing twelve month basis. TTM Lease Coverage is a supplemental measure of a tenant’s/operator’s ability to meet their cash rent obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of EBITDAR.
The information related to the Company’s tenants/operators that is provided in this press release has been provided by, or derived from information provided by, such tenants/operators. The Company has not independently verified this information and has no reason to believe that such information is inaccurate in any material respect. The Company is providing this data for informational purposes only.
Third Quarter 2018 Conference Call
The Company will conduct a conference call to discuss the financial results on
For those unable to participate during the live call, a replay will be available starting
Corporate Overview and Supplemental Financial Report
A Third Quarter 2018 Corporate Overview and Supplemental Financial Report is available on the Company’s website at www.clny.com. This information has also been furnished to the
About
Cautionary Statement Regarding Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company’s control, and may cause the Company’s actual results to differ significantly from those expressed in any forward-looking statement. Factors that might cause such a difference include, without limitation, our failure to achieve anticipated synergies in and benefits of the completed merger among
CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) |
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(unaudited) |
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Assets | ||||||||||||||||||
Cash and cash equivalents | $ | 416,795 | $ | 921,822 | ||||||||||||||
Restricted cash | 413,803 | 471,078 | ||||||||||||||||
Real estate, net | 13,958,524 | 14,464,258 | ||||||||||||||||
Loans receivable, net ( |
1,784,491 | 3,223,762 | ||||||||||||||||
Investments in unconsolidated ventures ( |
2,330,847 | 1,655,239 | ||||||||||||||||
Securities, at fair value | 139,028 | 383,942 | ||||||||||||||||
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1,534,561 | 1,534,561 | ||||||||||||||||
Deferred leasing costs and intangible assets, net | 563,712 | 852,872 | ||||||||||||||||
Assets held for sale ( |
638,151 | 781,630 | ||||||||||||||||
Other assets ( |
483,519 | 444,968 | ||||||||||||||||
Due from affiliates | 41,849 | 51,518 | ||||||||||||||||
Total assets | $ | 22,305,280 | $ | 24,785,650 | ||||||||||||||
Liabilities | ||||||||||||||||||
Debt, net ( |
$ | 9,867,976 | $ | 10,827,810 | ||||||||||||||
Accrued and other liabilities ( |
642,902 | 898,161 | ||||||||||||||||
Intangible liabilities, net | 167,270 | 191,109 | ||||||||||||||||
Liabilities related to assets held for sale | 50,625 | 273,298 | ||||||||||||||||
Due to affiliates ( |
— | 23,534 | ||||||||||||||||
Dividends and distributions payable | 84,604 | 188,202 | ||||||||||||||||
Total liabilities | 10,813,377 | 12,402,114 | ||||||||||||||||
Commitments and contingencies | ||||||||||||||||||
Redeemable noncontrolling interests | 34,389 | 34,144 | ||||||||||||||||
Equity | ||||||||||||||||||
Stockholders’ equity: | ||||||||||||||||||
Preferred stock, |
1,407,495 | 1,606,966 | ||||||||||||||||
Common stock, |
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Class A, 949,000 shares authorized; 490,319 and 542,599 shares issued and outstanding, respectively | 4,904 | 5,426 | ||||||||||||||||
Class B, 1,000 shares authorized; 734 and 736 shares issued and outstanding, respectively | 7 | 7 | ||||||||||||||||
Additional paid-in capital | 7,618,518 | 7,913,622 | ||||||||||||||||
Distributions in excess of earnings | (1,567,662 | ) | (1,165,412 | ) | ||||||||||||||
Accumulated other comprehensive income | 17,732 | 47,316 | ||||||||||||||||
Total stockholders’ equity | 7,480,994 | 8,407,925 | ||||||||||||||||
Noncontrolling interests in investment entities | 3,590,546 | 3,539,072 | ||||||||||||||||
Noncontrolling interests in |
385,974 | 402,395 | ||||||||||||||||
Total equity | 11,457,514 | 12,349,392 | ||||||||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 22,305,280 | $ | 24,785,650 | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) |
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Three Months Ended |
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2018 | 2017 | |||||||||||||||||
Revenues | ||||||||||||||||||
Property operating income | $ | 567,981 | $ | 613,665 | ||||||||||||||
Interest income | 59,990 | 106,479 | ||||||||||||||||
Fee income | 35,055 | 59,693 | ||||||||||||||||
Other income | 11,743 | 10,016 | ||||||||||||||||
Total revenues | 674,769 | 789,853 | ||||||||||||||||
Expenses | ||||||||||||||||||
Property operating expense | 307,795 | 332,006 | ||||||||||||||||
Interest expense | 145,117 | 152,054 | ||||||||||||||||
Investment and servicing expense | 11,117 | 18,421 | ||||||||||||||||
Transaction costs | 228 | 4,636 | ||||||||||||||||
Placement fees | 5,184 | — | ||||||||||||||||
Depreciation and amortization | 145,310 | 162,694 | ||||||||||||||||
Provision for loan loss | 7,825 | 5,116 | ||||||||||||||||
Impairment loss | 76,497 | 24,073 | ||||||||||||||||
Compensation expense | 46,726 | 85,022 | ||||||||||||||||
Administrative expenses | 23,278 | 26,502 | ||||||||||||||||
Total expenses | 769,077 | 810,524 | ||||||||||||||||
Other income (loss) | ||||||||||||||||||
Gain on sale of real estate assets | 35,120 | 72,541 | ||||||||||||||||
Other gain (loss), net | 29,677 | (8,822 | ) | |||||||||||||||
Earnings from investments in unconsolidated ventures | 13,798 | 17,447 | ||||||||||||||||
Income (loss) before income taxes | (15,713 | ) | 60,495 | |||||||||||||||
Income tax benefit | 1,767 | 10,613 | ||||||||||||||||
Net income (loss) from continuing operations | (13,946 | ) | 71,108 | |||||||||||||||
Income from discontinued operations | — | 1,481 | ||||||||||||||||
Net income (loss) | (13,946 | ) | 72,589 | |||||||||||||||
Net income (loss) attributable to noncontrolling interests: | ||||||||||||||||||
Redeemable noncontrolling interests | 865 | 1,678 | ||||||||||||||||
Investment entities | 32,382 | 36,906 | ||||||||||||||||
Operating Company | (4,403 | ) | 97 | |||||||||||||||
Net income (loss) attributable to |
(42,790 | ) | 33,908 | |||||||||||||||
Preferred stock redemption | — | (918 | ) | |||||||||||||||
Preferred stock dividends | 27,185 | 33,176 | ||||||||||||||||
Net income (loss) attributable to common stockholders | $ | (69,975 | ) | $ | 1,650 | |||||||||||||
Basic earnings (loss) per share | ||||||||||||||||||
Income (loss) from continuing operations per basic common share | $ | (0.15 | ) | $ | — | |||||||||||||
Net income (loss) per basic common share | $ | (0.15 | ) | $ | — | |||||||||||||
Diluted earnings (loss) per share | ||||||||||||||||||
Income (loss) from continuing operations per diluted common share | $ | (0.15 | ) | $ | — | |||||||||||||
Net income (loss) per diluted common share | $ | (0.15 | ) | $ | — | |||||||||||||
Weighted average number of shares | ||||||||||||||||||
Basic | 484,754 | 542,855 | ||||||||||||||||
Diluted | 484,754 | 542,855 | ||||||||||||||||
FUNDS FROM OPERATIONS AND CORE FUNDS FROM OPERATIONS (In thousands, except per share data) (Unaudited) |
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Three Months Ended |
||||||||||
Net loss attributable to common stockholders | $ | (69,975 | ) | |||||||
Adjustments for FFO attributable to common interests in |
||||||||||
Net loss attributable to noncontrolling common interests in |
(4,403 | ) | ||||||||
Real estate depreciation and amortization | 153,303 | |||||||||
Impairment of real estate | 78,595 | |||||||||
Gain from sales of real estate | (38,432 | ) | ||||||||
Less: Adjustments attributable to noncontrolling interests in investment entities | (46,959 | ) | ||||||||
FFO attributable to common interests in |
72,129 | |||||||||
Additional adjustments for Core FFO attributable to common interests in |
||||||||||
Gains and losses from sales of depreciable real estate within the Other Equity and Debt segment, net of depreciation, amortization and impairment previously adjusted for FFO(1) |
5,903 | |||||||||
Gains and losses from sales of businesses within the Investment Management segment and impairment write-downs associated with the Investment Management segment | 5,221 | |||||||||
Equity-based compensation expense | 9,425 | |||||||||
Straight-line rent revenue and expense | (6,017 | ) | ||||||||
Amortization of acquired above- and below-market lease values, net | (2,840 | ) | ||||||||
Amortization of deferred financing costs and debt premiums and discounts | 20,040 | |||||||||
Unrealized fair value gains and foreign currency remeasurements(2) |
(16,291 | ) | ||||||||
Acquisition and merger-related transaction costs | 418 | |||||||||
Merger integration costs(3) |
2,180 | |||||||||
Amortization and impairment of investment management intangibles | 12,088 | |||||||||
Non-real estate depreciation and amortization | 2,390 | |||||||||
Amortization of gain on remeasurement of consolidated investment entities | 1,120 | |||||||||
Deferred tax benefit, net | (3,281 | ) | ||||||||
Less: Adjustments attributable to noncontrolling interests in investment entities(1) |
(254 | ) | ||||||||
Core FFO attributable to common interests in |
$ | 102,231 | ||||||||
FFO per common share / common OP unit(4) |
$ | 0.14 | ||||||||
FFO per common share / common OP unit—diluted(5) |
$ | 0.14 | ||||||||
Core FFO per common share / common OP unit(4) |
$ | 0.20 | ||||||||
Core FFO per common share / common OP unit—diluted(6) |
$ | 0.19 | ||||||||
Weighted average number of common OP units outstanding used for FFO and Core FFO per common share and OP unit(4) |
522,120 | |||||||||
Weighted average number of common OP units outstanding used for FFO per common share and OP unit—diluted(4)(5)(6) |
522,693 | |||||||||
Weighted average number of common OP units outstanding used for Core FFO per common share and OP unit—diluted(4)(6) |
548,111 | |||||||||
(1) | Net of |
||
(2) | Includes an adjustment to exclude CLNY OP's share of provision for loan loss recognized by CLNC, which is excluded for CLNC's calculation of its Core Earnings. | ||
(3) | Merger integration costs represent costs and charges incurred during the integration of Colony, NSAM and NRF. These integration costs are not reflective of the Company’s core operating performance and the Company does not expect to incur these costs subsequent to the completion of the merger integration. The majority of integration costs consist of severance, employee costs of those separated or scheduled for separation, system integration and lease terminations. | ||
(4) | Calculated based on weighted average shares outstanding including participating securities and assuming the exchange of all common OP units outstanding for common shares. | ||
(5) | For the three months ended |
||
(6) | For the three months ended |
||
RECONCILIATION OF NET INCOME (LOSS) TO NOI/EBITDA
The following tables present: (1) a reconciliation of property and other related revenues less property operating expenses for properties in our Healthcare, Industrial, and Hospitality segments to NOI or EBITDA and (2) a reconciliation of such segments' net income (loss) for the three months ended
NOI and EBITDA were determined as follows:
Three Months Ended |
||||||||||||||||||||||
(In thousands) |
Healthcare | Industrial | Hospitality | |||||||||||||||||||
Total revenues | $ | 147,907 | $ | 73,902 | $ | 224,384 | ||||||||||||||||
Straight-line rent revenue and amortization of above- and below-market lease intangibles | (5,140 | ) | (3,012 | ) | (6 | ) | ||||||||||||||||
Interest income | — | (107 | ) | — | ||||||||||||||||||
Property operating expenses(1) |
(66,298 | ) | (21,409 | ) | (146,440 | ) | ||||||||||||||||
Compensation and administrative expense(1) |
— | (387 | ) | — | ||||||||||||||||||
NOI or EBITDA | $ | 76,469 | $ | 48,987 | $ | 77,938 | ||||||||||||||||
(1) | For healthcare and hospitality, property operating expenses includes property management fees paid to third parties. For industrial, there are direct costs of managing the portfolio which are included in compensation expense. | ||
The following table presents a reconciliation of net income (loss) from continuing operations of the healthcare, industrial and hospitality segments to NOI or EBITDA of the respective segments.
Three Months Ended |
||||||||||||||||||||||
(In thousands) |
Healthcare | Industrial | Hospitality | |||||||||||||||||||
Net income (loss) from continuing operations | $ | (15,051 | ) | $ | 6,296 | $ | (66,620 | ) | ||||||||||||||
Adjustments: | ||||||||||||||||||||||
Straight-line rent revenue and amortization of above- and below-market lease intangibles | (5,140 | ) | (3,012 | ) | (6 | ) | ||||||||||||||||
Interest income | — | (107 | ) | — | ||||||||||||||||||
Interest expense | 47,620 | 10,872 | 41,646 | |||||||||||||||||||
Transaction, investment and servicing costs | 1,556 | 41 | 1,938 | |||||||||||||||||||
Depreciation and amortization | 43,697 | 33,503 | 36,503 | |||||||||||||||||||
(Recovery of) impairment loss | (274 | ) | 774 | 61,865 | ||||||||||||||||||
Compensation and administrative expense | 1,696 | 2,727 | 1,579 | |||||||||||||||||||
Other loss, net | 1,122 | — | 178 | |||||||||||||||||||
Income tax (benefit) expense | 1,030 | (3 | ) | 855 | ||||||||||||||||||
NOI or EBITDA | $ | 76,469 | $ | 48,987 | $ | 77,938 | ||||||||||||||||
The following table summarizes third quarter 2018 net income (loss) from continuing operations by segment:
(In thousands) |
Net income (Loss) From Continuing Operations |
|||||||||||||
Healthcare | $ | (15,051 | ) | |||||||||||
Industrial | 6,296 | |||||||||||||
Hospitality | (66,620 | ) | ||||||||||||
CLNC | (19,480 | ) | ||||||||||||
Other Equity and Debt | 88,053 | |||||||||||||
Investment Management | 23,509 | |||||||||||||
Amounts Not Allocated to Segments | (30,653 | ) | ||||||||||||
Total Consolidated | $ | (13,946 | ) | |||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181107005304/en/
Investor Contacts:
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