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04/30/2009

iStar Financial Announces First Quarter 2009 Results

- Adjusted earnings (loss) allocable to common shareholders for the first quarter was ($64.0) million, or ($0.61) per diluted common share.

- Net income (loss) allocable to common shareholders for the first quarter was ($93.9) million, or ($0.89) per diluted common share.

- Company records $258.1 million of loan loss provisions during the quarter versus $252.0 million during the prior quarter.

- Company completes $1.0 billion secured term loan and restructuring of existing unsecured revolving credit facilities.

NEW YORK, April 30 /PRNewswire-FirstCall/ -- iStar Financial Inc. (NYSE: SFI), a leading publicly traded finance company focused on the commercial real estate industry, today reported results for the first quarter ended March 31, 2009.

iStar reported adjusted earnings (loss) allocable to common shareholders for the first quarter of ($64.0) million or ($0.61) per diluted common share, compared with $116.5 million or $0.86 per diluted common share for the first quarter 2008. Adjusted earnings (loss) represents net income computed in accordance with GAAP, adjusted primarily for preferred dividends, depreciation, depletion, amortization, impairments of goodwill and intangible assets, and gain (loss) from discontinued operations.

Net income (loss) allocable to common shareholders for the first quarter was ($93.9) million, or ($0.89) per diluted common share, compared to $71.6 million or $0.53 per diluted common share for the first quarter 2008. Please see the financial tables that follow the text of this press release for a detailed reconciliation of adjusted earnings to GAAP net income.

Revenues for the first quarter 2009 were $258.4 million versus $412.3 million for the first quarter 2008. The year-over-year decrease is primarily due to a reduction of interest income resulting from an increase in non-performing loans (NPLs) and lower interest rates, as well as a reduction in other income.

Net investment income for the quarter was $252.0 million compared to $176.8 million for the first quarter 2008. The year-over-year increase is primarily due to gains on the early extinguishment of debt, offset by lower interest income resulting from an increase in the Company's NPLs. Net investment income represents interest income, operating lease income, earnings (loss) from equity method investments and gain on early extinguishment of debt, less interest expense and operating costs for corporate tenant lease assets.

During the quarter, the Company received $470.0 million in gross principal repayments. Additionally, the Company generated proceeds of $265.6 million from loan sales; $32.4 million of net proceeds from corporate tenant lease (CTL) asset sales; and $73.3 million of net proceeds from other real estate owned (OREO) asset sales. Of the gross principal repayments and asset sales, $283.6 million was utilized to pay down the A-participation interest associated with the Fremont portfolio. Additionally during the quarter, the Company funded a total of $391.4 million under pre-existing commitments.

The Company's leverage, calculated as book debt net of unrestricted cash and cash equivalents, divided by the sum of book equity, accumulated depreciation and loan loss reserves, each as determined in accordance with GAAP, was 2.9x at March 31, 2009, versus 3.1x at December 31, 2008. The Company's net finance margin, calculated as the rate of return on assets less the cost of debt, was 2.37% for the quarter, versus 2.15% in the prior quarter.

Capital Markets

As of March 31, 2009, the Company had $1.0 billion of unrestricted cash and available capacity on its credit facilities versus $558.1 million at the end of the prior quarter. The Company is currently in compliance with all of its bank and bond covenants.

The Company repurchased $286.4 million par value of its senior unsecured notes, resulting in a net gain on early extinguishment of debt of $154.4 million. In addition, on March 16, 2009, the Company's Board of Directors approved a new $50 million stock repurchase program, under which the Company repurchased approximately 3.5 million shares of its common stock during the quarter. The Company currently has remaining authority to repurchase up to $42.4 million of shares under its share repurchase programs.

As previously announced, during the first quarter the Company completed a new $1.0 billion secured term loan facility and restructured $2.6 billion of its existing unsecured revolving credit facilities.

Risk Management

At March 31, 2009, first mortgages, participations in first mortgages, senior loans and corporate tenant lease investments collectively comprised 91.7% of the Company's asset base, versus 91.5% in the prior quarter. The Company's loan portfolio consisted of 78.5% floating rate loans and 21.5% fixed rate loans, with a weighted average maturity of 2.2 years.

The weighted average last dollar loan-to-value ratio for all structured finance assets was 78.1%. At quarter end, the Company's corporate tenant lease assets were 93.9% leased with a weighted average remaining lease term of 11.5 years. At March 31, 2009, the weighted average risk ratings of the Company's structured finance and corporate tenant lease assets were 3.71 and 2.59, respectively, versus 3.53 and 2.58, respectively, in the prior quarter.

As of March 31, 2009, 76 of the Company's 322 total loans were on NPL status. These loans represent $3.9 billion or 32.6% of total managed loans, compared to 68 loans representing $3.5 billion or 27.5% of total managed loans in the prior quarter. Managed asset and loan values represent iStar's book value plus the A-participation interest associated with the Fremont portfolio. The Company's total managed loan value at quarter end was $12.1 billion.

At the end of the first quarter, the Company had 30 loans on its watch list representing $1.3 billion or 10.7% of total managed loans, compared to 28 loans representing $1.3 billion or 10.1% of total managed loans in the prior quarter. Assets on the Company's watch list are all performing loans.

At the end of the first quarter, the Company had 16 assets classified as OREO with a book value of $233.8 million. During the quarter, the Company took title to nine properties that served as collateral on its loans with managed loan value of $117.5 million, resulting in $47.5 million of charge-offs against the Company's reserve for loan losses. In addition, the Company recorded $6.6 million of non-cash impairment charges on its OREO portfolio.

During the quarter, the Company charged off $51.0 million against its reserve for losses associated with loan sales during the quarter. During the quarter, the Company recorded $14.5 million of non-cash impairment charges on investments included in its Corporate Loan and Debt portfolio and Other Investments, and a $4.2 million non-cash impairment charge to goodwill.

During the first quarter, the Company recorded $258.1 million in loan loss provisions, comprised of $237.5 million of asset specific provisions and $20.6 million of general provisions. Provisions in the quarter reflect the continued deterioration in the overall credit markets and its impact on the portfolio as determined in the Company's regular quarterly risk ratings review process following the end of the quarter. At March 31, 2009, the Company had loan loss reserves of $1.1 billion or 9.4% of total managed loans. This compares to loan loss reserves of $976.8 million or 7.8% of total managed loans at December 31, 2008.

Summary of Fremont Contributions to Quarterly Results

At the end of the first quarter, the Fremont portfolio, including additional fundings made during the quarter, had a managed loan value of $3.7 billion consisting of 128 loans versus $4.0 billion consisting of 140 loans at the end of the fourth quarter 2008.

At the end of the first quarter, the value of the A-participation interest in the portfolio was $1.0 billion versus $1.3 billion on December 31, 2008. The book value of iStar's B-participation interest at the end of the first quarter was $2.7 billion versus $2.7 billion on December 31, 2008. During the quarter, iStar received $337.0 million in principal repayments and proceeds from loan sales, of which the Company retained 30%. The balance of principal repayments was paid to the A-participation interest. The weighted average maturity of the Fremont portfolio is seven months.

During the first quarter, iStar funded $112.5 million of commitments related to the portfolio. Unfunded commitments at the end of the first quarter were $0.5 billion, of which the Company expects to fund approximately $0.3 billion based upon its comprehensive review of the portfolio. This compares to unfunded commitments of $0.7 billion at the end of the prior quarter.

At March 31, 2009, there were 43 Fremont loans on NPL status with a managed loan value of $1.6 billion versus 37 loans at the prior quarter end, with $1.2 billion of managed loan value. In addition, there were 13 Fremont loans on the Company's watch list with a managed loan value of $483.8 million versus 18 loans at the prior quarter end, with $758.6 million of managed loan value.

Annual Meeting

The Company will host its Annual Meeting of Shareholders at The Harvard Club of New York City, located at 35 West 44th Street, New York, New York 10036 on Wednesday, May 27, 2009 at 9:00 a.m. ET. All shareholders are cordially invited to attend.

[Financial Tables to Follow]

* * *

iStar Financial Inc. is a leading publicly traded finance company focused on the commercial real estate industry. The Company primarily provides custom-tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust ("REIT"), seeks to deliver strong dividends and superior risk-adjusted returns on equity to shareholders by providing innovative and value added financing solutions to its customers.

iStar Financial will hold a quarterly earnings conference call at 10:00 a.m. ET today, April 30, 2009. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through iStar Financial's website, www.istarfinancial.com, under the "Investor Relations" section. To listen to the live call, please go to the website's "Investor Relations" section at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. For those who are not available to listen to the live broadcast, a replay will be available shortly after the call on the iStar Financial website.

(Note: Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although iStar Financial Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from iStar Financial Inc.'s expectations include completion of pending investments, continued ability to originate new investments, the mix of originations between structured finance and corporate tenant lease assets, repayment levels, the timing of receipt of prepayment penalties, the availability and cost of capital for future investments, competition within the finance and real estate industries, economic conditions, loss experience and other risks detailed from time to time in iStar Financial Inc.'s SEC reports.)



    Selected Income Statement Data
    (In thousands)
    (unaudited)
                                                           Three Months Ended
                                                                March 31,
                                                             2009      2008
                                                           --------   -------

    Net investment income (1)                              $251,958  $176,797
    Other income                                              2,513    58,025
    Non-interest expense (2)                               (353,506) (159,977)
                                                           --------   -------
    Income (loss) from continuing operations                (99,035)   74,845

    Income from discontinued operations                         346     8,128
    Gain from discontinued operations                        11,617     2,056
    Net (income) loss attributable to noncontrolling
     interests                                                1,243      (204)
    Preferred dividends                                     (10,580)  (10,580)
                                                           --------   -------
    Net income (loss) allocable to common shareholders,
     HPU holders and Participating Security holders (3)    ($96,409)  $74,245
                                                           ========   =======

    (1)  Includes interest income, operating lease income, earnings (loss)
         from equity method investments and gain (loss) on early
         extinguishment of debt, less interest expense and operating costs for
         corporate tenant lease assets.
    (2)  Includes depreciation and amortization, general and administrative
         expenses, provision for loan losses, impairments and other expenses.
    (3)  HPU holders are Company employees who purchased high performance
         common stock units under the Company's High Performance Unit Program.
         Participating Security holders are Company employees and directors
         who hold unvested restricted stock units and common stock equivalents
         under the Company's Long Term Incentive Plan.



    Selected Balance Sheet Data
    (In thousands)
    (unaudited)                                   As of            As of
                                              March 31, 2009 December 31, 2008
                                              -------------- -----------------

    Loans and other lending investments, net     $10,182,944       $10,586,644
    Corporate tenant lease assets, net            $3,015,009        $3,044,811
    Other investments                               $417,875          $447,318
    Total assets                                 $14,801,097       $15,296,748
    Debt obligations                             $12,167,539       $12,486,404
    Total liabilities                            $12,448,766       $12,840,896
    Total iStar Financial Inc. shareholders'
     equity                                       $2,319,036        $2,418,999



                               iStar Financial Inc.
                      Consolidated Statements of Operations
                                  (In thousands)
                                   (unaudited)
                                                           Three Months Ended
                                                                March 31,
                                                             2009      2008
                                                           --------   -------
    REVENUES

      Interest income                                      $177,227  $276,100
      Operating lease income                                 78,650    78,199
      Other income                                            2,513    58,025
                                                           --------   -------
        Total revenues                                      258,390   412,324
                                                           --------   -------

    COSTS AND EXPENSES

      Interest expense                                      131,165   169,779
      Operating costs - corporate tenant lease assets         6,631     5,125
      Depreciation and amortization                          23,692    23,901
      General and administrative (1)                         39,389    42,776
      Provision for loan losses                             258,096    89,500
      Impairment of goodwill                                  4,186         -
      Impairment of other assets                             21,145         -
      Other expense                                           6,998     3,800
                                                           --------   -------
        Total costs and expenses                            491,302   334,881
                                                           --------   -------

      Income (loss) from continuing operations before
       other items                                         (232,912)   77,443
        Gain on early extinguishment of debt                154,377         -
        Loss from equity method investments                 (20,500)   (2,598)
                                                           --------   -------
      Income (loss) from continuing operations              (99,035)   74,845

        Income from discontinued operations                     346     8,128
        Gain from discontinued operations                    11,617     2,056
                                                           --------   -------
      Net income (loss)                                     (87,072)   85,029

      Net (income) loss attributable to noncontrolling
       interests                                              1,243      (204)
                                                           --------   -------
      Net income (loss) attributable to iStar
       Financial Inc.                                       (85,829)   84,825

      Preferred dividend requirements                       (10,580)  (10,580)
                                                           --------   -------
      Net income (loss) allocable to common shareholders,
       HPU holders and Participating Security holders (2)  ($96,409)  $74,245
                                                           ========   =======

    (1)  For the three months ended March 31, 2009 and 2008, includes $5,551
         and $4,848 of stock-based compensation expense, respectively.
    (2)  HPU holders are Company employees who purchased high performance
         common stock units under the Company's High Performance Unit Program.
         Participating Security holders are Company employees and directors
         who hold unvested restricted stock units and common stock equivalents
         under the Company's Long Term Incentive Plan.



                             iStar Financial Inc.
                        Earnings Per Share Information
                   (In thousands, except per share amounts)
                                 (unaudited)
                                 -----------

                                                            Three Months Ended
                                                                 March 31,
                                                               2009     2008
                                                               ----     ----
    EPS INFORMATION FOR COMMON SHARES
    Income (loss) attributable to iStar Financial Inc.
     from continuing operations (1) (2)
      Basic                                                   ($1.00)   $0.46
      Diluted (3)                                             ($1.00)   $0.46
    Net income (loss) attributable to iStar Financial Inc.
    (1)(4)
      Basic                                                   ($0.89)   $0.53
      Diluted (3)                                             ($0.89)   $0.53
    Weighted average shares outstanding
      Basic                                                  105,606  134,262
      Diluted                                                105,606  134,843
    EPS INFORMATION FOR HPU SHARES
    Income (loss) attributable to iStar Financial Inc. from
     continuing operations (1)(2)
      Basic                                                 ($189.07)  $86.87
      Diluted (3)                                           ($189.07)  $86.47
    Net income (loss) attributable to iStar Financial
     Inc. (1)(4)(5)
      Basic                                                 ($168.20) $100.94
      Diluted (3)                                           ($168.20) $100.47
    Weighted average shares outstanding
      Basic and diluted                                           15       15

    (1)  For the three months ended March 31, 2009 and 2008, excludes
         preferred dividends of $10,580.
    (2)  Income (loss) attributable to iStar Financial Inc. from continuing
         operations excludes net (income) loss from noncontrolling interests.
    (3)  For the three months ended March 31, 2008, includes the allocable
         share of $1 of joint venture income.
    (4)  For the three months ended March 31, 2008, net income (loss)
         attributable to iStar Financial Inc. and allocable to common
         shareholders and HPU holders excludes $1,122 of dividends paid to
         Participating Securities.
    (5)  For the three months ended March 31, 2009 and 2008, basic net income
         (loss) allocable to HPU holders was ($2,523) and $1,514,
         respectively. For the three months ended March 31, 2009 and 2008,
         diluted net income (loss) allocable to HPU holders was ($2,523) and
         $1,507, respectively.




                            iStar Financial Inc.
           Reconciliation of Adjusted Earnings to GAAP Net Income
                  (In thousands, except per share amounts)
                                 (unaudited)

                                                           Three Months Ended
                                                                March 31,
                                                             2009      2008
                                                            -------   -------
    ADJUSTED EARNINGS (1)

    Net income (loss)                                      ($87,072)  $85,029
    Add: Depreciation, depletion and amortization            23,499    27,638
    Add: Joint venture depreciation, depletion and
     amortization                                            10,688     8,625
    Add: Amortization of deferred financing costs             5,160     9,914
    Add: Impairment of goodwill                               4,186         -
    Less: Hedge ineffectiveness, net                              -     1,491
    Less: Gain from discontinued operations                 (11,617)   (2,056)
    Less: Preferred dividends                               (10,580)  (10,580)
                                                            -------   -------

    Adjusted earnings (loss) allocable to common
     shareholders, HPU holders and Participating
     Security holders:
       Basic                                               ($65,736) $120,061
       Diluted                                             ($65,736) $120,065

    Adjusted earnings (loss) per common share: (2)
       Basic (3)                                             ($0.61)    $0.87
       Diluted (4)                                           ($0.61)    $0.86

    Weighted average common shares outstanding:
       Basic                                                105,606   134,262
       Diluted                                              105,606   134,843

    Common shares outstanding at end of period:
       Basic                                                102,462   134,406
       Diluted                                              102,462   134,909

    (1)  Adjusted earnings should be examined in conjunction with net income
         as shown in the Consolidated Statements of Operations. Adjusted
         earnings should not be considered as an alternative to net income
         (determined in accordance with GAAP) as an indicator of the Company's
         performance, or to cash flows from operating activities (determined
         in accordance with GAAP) as a measure of the Company's liquidity, nor
         is this measure indicative of funds available to fund the Company's
         cash needs or available for distribution to shareholders. Rather,
         adjusted earnings is an additional measure the Company uses to
         analyze how its business is performing. It should be noted that the
         Company's manner of calculating adjusted earnings may differ from the
         calculations of similarly-titled measures by other companies.
    (2)  For the three months ended March 31, 2008, excludes $1,122 of
         dividends paid to Participating Securities.
    (3)  For the three months ended March 31, 2009 and 2008, excludes ($1,720)
         and $2,486 of net income (loss) allocable to HPU holders,
         respectively.
    (4)  For the three months ended March 31, 2009 and 2008, excludes ($1,720)
         and $2,475 of net income (loss) allocable to HPU holders,
         respectively.



                              iStar Financial Inc.
                           Consolidated Balance Sheets
                                 (In thousands)
                                   (unaudited)

                                                   As of           As of
                                              March 31, 2009 December 31, 2008
                                              -------------- -----------------

    ASSETS

    Loans and other lending investments,
     net                                       $10,182,944       $10,586,644
    Corporate tenant lease assets, net           3,015,009         3,044,811
    Other investments                              417,875           447,318
    Other real estate owned                        233,758           242,505
    Cash and cash equivalents                      541,289           496,537
    Restricted cash                                 45,737           155,965
    Accrued interest and operating lease
     income receivable, net                         68,325            87,151
    Deferred operating lease income receivable     114,533           116,793
    Deferred expenses and other assets, net        181,627           119,024
                                               -----------       -----------
          Total assets                         $14,801,097       $15,296,748
                                               ===========       ===========

    LIABILITIES AND EQUITY

    Accounts payable, accrued expenses and
     other liabilities                            $281,227          $354,492

    Debt obligations:
      Unsecured senior notes                     6,519,055         7,188,541
      Unsecured revolving credit facilities        737,309         3,281,273
      Secured credit facility                    1,166,635           306,867
      Secured term loans                         3,646,458         1,611,650
      Other debt obligations                        98,082            98,073
                                               -----------       -----------
        Total liabilities                       12,448,766        12,840,896

    Redeemable noncontrolling interests              7,448             9,190

    Total iStar Financial Inc. shareholders'
     equity                                      2,319,036         2,418,999
    Noncontrolling interests                        25,847            27,663
                                               -----------       -----------
       Total Equity                              2,344,883         2,446,662
                                               -----------       -----------
          Total liabilities and equity         $14,801,097       $15,296,748
                                               ===========       ===========



                               iStar Financial Inc.
                             Supplemental Information
                                  (In thousands)
                                    (unaudited)

    PERFORMANCE STATISTICS                                  Three Months Ended
                                                               March 31, 2009
                                                               --------------
    Net Finance Margin
    ------------------
    Weighted average GAAP yield on loan and CTL
     investments                                                        6.83%
    Less: Cost of debt                                                  4.46%
                                                                  ----------
    Net Finance Margin (1)                                              2.37%

    Return on Average Common Book Equity
    ------------------------------------
    Average total book equity                                     $2,369,018
    Less: Average book value of preferred equity                    (506,176)
                                                                  ----------
    Average common book equity (A)                                $1,862,842

    Net income (loss) allocable to common shareholders, HPU
     holders and Participating Security holders                     ($96,409)
    Net income (loss) allocable to common shareholders, HPU
     holders and Participating Security holders  - Annualized (B)  ($385,636)
    Return on Average Common Book Equity (B) / (A)                    (20.7%)

    Adjusted basic earnings (loss) allocable to common shareholders
     and HPU holders and Participating Security holders (2)         ($65,736)
    Adjusted basic earnings (loss) allocable to common shareholders
     and HPU holders and Participating Security holders -
     Annualized (C)                                                ($262,944)
    Adjusted Return on Average Common Book Equity (C) / (A)           (14.1%)

    Expense Ratio
    -------------
    General and administrative expenses (3) (D)                      $39,422
    Total revenue (3) (E)                                           $258,881
    Expense Ratio (D) / (E)                                             15.2%

    (1)  Weighted average GAAP yield is the annualized sum of interest income
         and operating lease income, divided by the sum of average gross
         corporate tenant lease assets, average loans and other lending
         investments, average SFAS No. 141 purchase intangibles and average
         assets held for sale over the period. Cost of debt is the annualized
         sum of interest expense and operating costs-corporate tenant lease
         assets, divided by the average gross debt obligations over the
         period. Operating lease income and operating costs-corporate tenant
         lease assets exclude SFAS No. 144 adjustments from discontinued
         operations of $490 and $44, respectively. The Company does not
         consider net finance margin to be a measure of the Company's
         liquidity or cash flows. It is one of several measures that
         management considers to be an indicator of the profitability of its
         operations.
    (2)  Adjusted earnings should be examined in conjunction with net income
         (loss) as shown in the Consolidated Statements of Operations.
         Adjusted earnings should not be considered as an alternative to net
         income (loss) (determined in accordance with GAAP) as an indicator of
         the Company's performance, or to cash flows from operating activities
         (determined in accordance with GAAP) as a measure of the Company's
         liquidity, nor is this measure indicative of funds available to fund
         the Company's cash needs or available for distribution to
         shareholders. Rather, adjusted earnings is an additional measure the
         Company uses to analyze how its business is performing. It should be
         noted that the Company's manner of calculating adjusted earnings may
         differ from the calculations of similarly-titled measures by other
         companies.
    (3)  Total revenue and general and administrative expenses exclude SFAS
         No. 144 adjustments from discontinued operations of $491 and $33,
         respectively.



                              iStar Financial Inc.
                            Supplemental Information
                                 (In thousands)
                                   (unaudited)

    CREDIT STATISTICS                                       Three Months Ended
                                                              March 31, 2009
                                                              --------------
    Book debt, net of unrestricted cash and cash
     equivalents (A)                                            $11,626,250

    Book equity                                                   2,344,883
    Add: Accumulated depreciation and loan loss reserves          1,642,287
                                                                  ---------
    Sum of book equity, accumulated depreciation and
     loan loss reserves (B)                                      $3,987,170

    Leverage (1) (A) / (B)                                             2.9x

    Ratio of Earnings (Loss) to Fixed Charges                          0.5x

    Ratio of Earnings (Loss) to Fixed Charges and
     Preferred Stock Dividends                                         0.5x

    Covenant Calculation of Fixed Charge Coverage Ratio (2)            2.8x

    Interest Coverage
    -----------------

    EBITDA (3) (C)                                                  $67,700
    GAAP interest expense and preferred dividends (D)               141,745

    EBITDA / GAAP Interest Expense (3)  (C) / (D)                      0.5x

    RECONCILIATION OF NET INCOME TO EBITDA  (3)

    Net income (loss) less preferred dividends                     ($97,652)
    Add: GAAP interest expense                                      131,165
    Add: Depreciation, depletion and amortization                    23,499
    Add: Joint venture depreciation, depletion and amortization      10,688
                                                                  ---------
    EBITDA (3)                                                      $67,700

    (1)  Leverage is calculated by dividing book debt net of unrestricted cash
         and cash equivalents by the sum of book equity, accumulated
         depreciation and loan loss reserves.
    (2)  This measure, which is a trailing twelve-month calculation and
         excludes the effect of impairment charges and other non-cash items,
         is consistent with covenant calculations included in the Company's
         recently secured credit facilities; therefore, we believe it is a
         useful measure for investors to consider.
    (3)  EBITDA should be examined in conjunction with net income (loss) as
         shown in the Consolidated Statements of Operations. EBITDA should not
         be considered as an alternative to net income (loss) (determined in
         accordance with GAAP) as an indicator of the Company's performance,
         or to cash flows from operating activities (determined in accordance
         with GAAP) as a measure of the Company's liquidity, nor is this
         measure indicative of funds available to fund the Company's cash
         needs or available for distribution to shareholders. It should be
         noted that the Company's manner of calculating EBITDA may differ from
         the calculations of similarly-titled measures by other companies.



                               iStar Financial Inc.
                             Supplemental Information
                                  (In thousands)
                                    (unaudited)

    FINANCING  VOLUME  SUMMARY  STATISTICS

    Three Months Ended
    March 31, 2009                  LOANS
                       ------------------------------
                                               Total/   CORPORATE
                                   Floating  Weighted     TENANT      OTHER
                       Fixed Rate    Rate     Average    LEASING   INVESTMENTS
                       ----------  --------  --------   ---------  -----------

    Amount funded         $11,291  $361,760   $373,051     $7,494      $10,880
    Weighted average
     GAAP yield              6.22%     6.83%      6.81%     11.72%        N/A
    Weighted average
     all-in spread/
     margin (basis
     points) (1)              492       604        602       N/A          N/A
    Weighted average
     first $ loan-to-
     value ratio            38.13%     1.34%      2.38%      N/A          N/A
    Weighted average
     last $ loan-to-
     value ratio            76.15%    78.85%     78.77%      N/A          N/A


    UNFUNDED COMMITMENTS

    Number of assets with unfunded commitments                             176


    Discretionary commitments                                         $146,940
    Non-discretionary commitments                                    1,792,817
                                                                     ---------
    Total unfunded commitments                                      $1,939,757
    Estimated weighted average funding period          Approximately 2.2 years

    UNENCUMBERED ASSETS / UNSECURED DEBT

    Unencumbered assets (A)                                         $9,519,492
    Unsecured debt (B)                                              $7,398,496

    Unencumbered Assets / Unsecured Debt (A) / (B)                        1.3x


    RISK MANAGEMENT STATISTICS
    (weighted average
     risk rating)        2009                         2008
                      --------- ---------------------------------------------
                      March 31, December 31, September 30, June 30, March 31,
                      --------- ------------ ------------- -------- ---------
    Structured
     Finance Assets
     (principal risk)    3.71         3.53          3.41     3.28      3.12
    Corporate Tenant
     Lease Assets        2.59         2.58          2.55     2.55      2.51

                                             (1=lowest risk; 5=highest risk)

    (1) Represents spread over base rate LIBOR (floating-rate loans) and
        interpolated U.S. Treasury rates (fixed-rate loans) during the
        quarter.



                               iStar Financial Inc.
                             Supplemental Information
                     (In thousands, except per share amounts)
                                   (unaudited)

    LOANS AND OTHER LENDING INVESTMENTS CREDIT STATISTICS

                                                        As of
                                           ----------------------------------
                                           March 31, 2009   December 31, 2008
                                           --------------   -----------------
    Value of non-performing loans (1) /
      As a percentage of total managed
       loans                              $3,930,310 32.56% $3,458,157 27.48%

    Reserve for loan losses /
      As a percentage of total managed
       loans                              $1,136,349  9.41%   $976,788  7.76%
      As a percentage of non-performing
       loans (1)                                     28.91%            28.25%

    (1)  Non-performing loans include iStar's book value and Fremont's
         A-participation interest on the associated assets.



                               iStar Financial Inc.
                             Supplemental Information
                                   (In millions)
                                    (unaudited)

    PORTFOLIO STATISTICS AS OF MARCH 31, 2009

    Asset Type
    ----------
    First Mortgages / Senior Loans                      $10,456        68.3%
    Corporate Tenant Leases                               3,582        23.4
    Mezzanine / Subordinated Debt                           863         5.6
    Other Investments                                       406         2.7
                                                        -------       -----
      Total                                             $15,307       100.0%
                                                        =======       =====

    Property / Collateral Type
    --------------------------
    Apartment / Residential                              $4,278        27.9%
    Land                                                  2,348        15.3
    Office                                                1,925        12.6
    Industrial / R&D                                      1,452         9.5
    Retail                                                1,178         7.7
    Entertainment / Leisure                                 922         6.0
    Corporate - Real Estate                                 865         5.7
    Hotel                                                   826         5.4
    Mixed Use / Mixed Collateral                            669         4.4
    Other                                                   543         3.5
    Corporate - Non-Real Estate                             301         2.0
                                                        -------       -----
      Total                                             $15,307       100.0%
                                                        =======       =====

    Geography
    ---------
    West                                                 $3,528        23.0%
    Northeast                                             2,874        18.8
    Southeast                                             2,532        16.5
    Mid-Atlantic                                          1,632        10.7
    Central                                                 934         6.1
    Southwest                                               885         5.8
    Various                                                 807         5.3
    International                                           768         5.0
    South                                                   513         3.3
    Northcentral                                            440         2.9
    Northwest                                               394         2.6
                                                        -------       -----
      Total                                             $15,307       100.0%
                                                        =======       =====

    (1)  Based on gross carrying value of the Company's total investment
         portfolio.

SOURCE iStar Financial Inc.

CONTACT:
James D. Burns,
Chief Financial Officer,
or Andrew G. Backman,
Senior Vice President - Investor Relations, both of iStar Financial Inc.,
+1-212-930-9400
Web Site: http://www.istarfinancial.com
(SFI)

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