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11/03/2016

iStar Announces Third Quarter 2016 Results

Earnings Report

- Net income grew to $0.44 per diluted common share from a loss of $(0.07) in the third quarter of last year.
- Adjusted income grew to $0.47 per diluted common share from $0.25 in the third quarter of last year.

NEW YORK, Nov. 3, 2016 /PRNewswire/ -- iStar (NYSE: STAR) today reported results for the third quarter ended September 30, 2016.

Third Quarter 2016 Results

iStar reported net income allocable to common shareholders for the third quarter of $46.3 million, or $0.44 per diluted common share and $0.65 per basic common share. This compares favorably to a loss of $(6.1) million, or $(0.07) per diluted and basic common share for the third quarter 2015.

Adjusted income allocable to common shareholders for the third quarter was $49.1 million, or $0.47 per diluted common share and $0.69 per basic common share. This represents over a 70% increase from the $27.3 million, or $0.25 per diluted common share and $0.32 per basic common share reported for the third quarter 2015.

Adjusted income represents net income computed in accordance with GAAP, prior to the effects of certain non-cash items. Please see the financial tables that follow the text of this press release for the Company's calculations of adjusted income and reconciliation to GAAP net income (loss).

Investment Activity

During the quarter, the Company originated $301.1 million of new investments bringing total originations year to date to $459.3 million. During the quarter, iStar funded a total of $165.5 million associated with new investments, prior financing commitments and ongoing development across its four segments, bringing the total fundings year to date to $489.4 million. In addition, the portfolio generated $262.2 million of repayments and sales during the quarter, bringing total proceeds received to $854.5 million year to date.

3Q'16 Investing Activity










$ in millions


Real Estate
Finance


Net
Lease


Operating
Properties


Land &
Dev


Corporate
/ Other


Total

Originated

$83.0


$218.1








$301.1

Invested

$85.4


$36.5


$15.9



$27.5



$0.2



$165.5

Proceeds received

$49.1


$78.8


$85.8



$42.5



$6.0



$262.2

Note: Originated represents total commitments on new investments made during the quarter. Invested represents
fundings on new investments / prior commitments and capital expenditures associated with existing assets during the
quarter.  Net lease originations represent the total property value, gross of joint venture partner participations and
financings.

New originations within our real estate finance portfolio are expected to generate a weighted average unlevered IRR of 11.9%, while the net lease originations within our net lease fund are expected to generate a 10.3% IRR on our equity contributions.(1)

Portfolio Overview

At September 30, 2016, the Company's portfolio totaled $4.83 billion, which is gross of $412.1 million of accumulated depreciation and $21.2 million of general loan loss reserves.

 

_______________________

(1) IRRs are based on contractual investment terms such as coupon, rent and term. The Company makes assumptions
as to the pace of fundings, timing of construction and residual value of real estate at the end of the lease term. The
net lease joint venture can elect to take on leverage and the Company makes assumptions as to the amount of debt and
the cost of debt the venture will take on. While the Company believes its assumptions are reasonable, they are
dependent on future real estate market conditions, capital market conditions and interest rates. No assurance can be
made that the Company's assumptions will reflect actual results.

A summary of quarterly activity is below:

Portfolio Rollforward












$ in millions


Real
Estate
Finance


Net
Lease


Operating
Properties


Land &
Dev


Corporate
/ Other


Total

Net book value (6/30/16)

$

1,568.5



$

1,149.7



$

493.2



$

1,134.9



$

58.9



$

4,405.2


Investments
(Fundings / CapEx)

85.4



36.5



15.9



27.5



0.2



165.5


Asset transfers between
segments

(9.1)





36.3



(27.2)






Principal received / basis
sold

(49.1)



(74.1)



(56.5)



(37.0)



(9.0)



(225.7)


Other

36.5



(6.9)



(1.8)



16.8



3.3



47.9


Net book value (9/30/16)

1,632.2



1,105.2



487.1



1,115.0



53.4



4,392.9


Add: Accumulated
depreciation and general
loan loss reserves

21.2



362.3



42.9



6.9





433.3


Gross book value (9/30/16)

$

1,653.4



$

1,467.5



$

530.0



$

1,121.9



$

53.4



$

4,826.2


Note: Gross book value is based on carrying value of the Company's total investment portfolio, gross of accumulated depreciation and
general loan loss reserves and includes the Company's pro rata share of equity method investments.

Real Estate Finance

iStar's real estate finance business targets sophisticated and innovative investors by providing one-stop capabilities that encompass financial alternatives ranging from full envelope senior loans to custom-tailored mezzanine and preferred equity capital positions.

At September 30, 2016, the Company's real estate finance portfolio totaled $1.65 billion, gross of general loan loss reserves. The portfolio is categorized into iStar 3.0 loans, made post January 1, 2008, and legacy loans, which were all made prior to December 31, 2007.

The following table summarizes statistics for our real estate finance portfolio:

Real Estate Finance Statistics








$ in millions


iStar 3.0


Legacy


Q3'16

Q2'16

Q3'15


Q3'16

Q2'16

Q3'15

Gross book value

$

1,365.9


$

1,306.2


$

1,141.8



$

287.5


$

299.2


$

476.6


% of total loan portfolio

83%


81%


71%



17%


19%


29%










Performing loans

$

1,365.9


$

1,306.2


$

1,141.8



$

65.0


$

219.7


$

394.0


Non-performing loans

$


$


$



$

222.5


$

79.5


$

82.6


% Performing / Non-performing

100% / 0%


100% / 0%


100% / 0%



23% / 77%


73% / 27%


83% / 17%










First mortgages / senior loans

72%


70%


64%



44%


43%


32%


Mezzanine / subordinated debt

28%


30%


36%



56%


57%


68%


Total

100%


100%


100%



100%


100%


100%










Wtd. avg. LTV

61.5%


61.5%


59.5%



89.9%


90.1%


90.8%


Weighted avg. risk rating

2.61


3.08


2.93



4.30


3.88


3.73


Note: Gross book value represents the carrying value of iStar's loans, gross of general reserves. Risk rating and LTVs based on
performing loans. Risk rating scale based on 1 as lowest risk and 5 as highest risk. See the "Loan Receivable Credit Statistics" table
for additional detail on the Company's NPL and specific reserves.

The $1.43 billion of performing loans had a weighted average maturity of 1.6 years and generated a 9.1% unlevered yield for the quarter.

At September 30, 2016, the Company's non-performing loans (NPLs) were exclusively derived from its legacy loan portfolio with a carrying value of $222.5 million, up from $79.5 million in the second quarter. The $143.0 million sequential increase was related to a loan, secured in part by pledges of equity in a portfolio of hotels and recourse to the borrower, which ceased paying current interest after the borrower and most of its related entities filed for bankruptcy protection during the third quarter.  

Net Lease

iStar's net lease business seeks to create stable cash flows through long-term leases to single tenants on its properties.  The Company targets mission-critical facilities leased on a long-term basis to tenants, offering structured solutions that combine iStar's capabilities in underwriting, lease structuring, asset management and build-to-suit construction. The Company invests in new net lease investments primarily through its net lease joint venture, in which iStar holds a 52% interest. The joint venture has a right of first offer on any new net lease investments that iStar sources.

At the end of the quarter, iStar's net lease portfolio totaled $1.47 billion, gross of $362.3 million of accumulated depreciation.

Net Lease Portfolio Overview


$ in millions

Wholly owned assets

$1,364.1

Joint venture investments (1)

103.4

Total

$1,467.5

(1) Represents iStar's 52% interest within its net lease
joint venture.

During the quarter, the Company's net lease JV closed on two new transactions totaling $218.1 million. The venture funded $68.6 million during the quarter, of which iStar contributed $35.9 million. The Company's interest and commitment to JV deals within the fund is 52% of equity.

Same store net operating income for the net lease portfolio was $31.1 million for the quarter versus $29.7 million for same quarter last year. This quarter, the Company executed leases on net lease assets totaling approximately 190,000 square feet. In addition, the Company received $78.8 million of sales proceeds from its net lease portfolio and recorded gains of $6.6 million.

Net Lease Statistics


Q3'16

Q2'16

Q3'15

Square feet (000s)

17,022


17,348


18,174


% Leased

99%


98%


96%


Wtd. avg. lease term (yrs)

14.6


14.6


14.8


Yield

8.2%


8.2%


7.8%


Operating Properties

At the end of the quarter, iStar's operating property portfolio totaled $530.0 million, gross of $42.9 million of accumulated depreciation, and was comprised of $428.5 million of commercial and $101.5 million of residential real estate properties. During the quarter, the Company invested $15.9 million within its operating properties portfolio and received $85.8 million of proceeds from sales. These sales generated $27.8 million of gains.

     Commercial Operating Properties

The Company's commercial operating properties represent a diverse pool of assets across a broad range of geographies and collateral types including office, retail and hotel properties. These properties generated $25.6 million of revenue offset by $18.9 million of expenses during the quarter. At the end of the quarter, the Company had $243.8 million of stabilized assets and $184.7 million of transitional assets. iStar generally seeks to reposition these assets with the objective of maximizing their values through the infusion of capital and/or intensive asset management efforts resulting in value realization upon sale. The Company has made significant progress on this goal, having either stabilized or sold approximately $350 million of its transitional operating properties over the past year.

Commercial Operating Property Statistics





$ in millions


Stabilized Operating

Transitional Operating


Total


Q3'16

Q2'16

Q3'15


Q3'16

Q2'16

Q3'15


Q3'16

Q2'16

Q3'15

Gross book value

$243.8

$149.3

$111.8


$184.7

$277.8

$461.3


$428.5

$427.1

$573.1

% of total

57%

35%

20%


43%

65%

80%


100%

100%

100%

Occupancy

86%

86%

87%


55%

63%

59%


72%

73%

68%

Yield

8.4%

8.2%

7.8%


2.4%

3.2%

2.7%


5.9%

4.6%

3.7%

During the quarter, the Company sold one stabilized (mixed-use) and two transitional (office and retail) commercial operating properties for $70.2 million of proceeds, recognizing $23.4 million of gains. The sales were executed at a weighted average trailing twelve month cap rate of 5.6%.

As a result of successful leasing activity, the Company reclassified four transitional properties as stabilized this quarter. In addition, the Company migrated two completed projects from its land & development portfolio, The Asbury hotel and 1000 South Clark, into its stabilized and transitional commercial operating properties portfolios, respectively, this quarter.

     Residential Operating Properties

At the end of the quarter, the $101.5 million residential operating portfolio was comprised of 58 condominium units generally located within luxury projects in major U.S. cities.

Residential Operating Property Statistics
(excluding fractional units)

$ in millions


Q3'16

Q2'16

Q3'15

Condominium units sold

11


55


21


Proceeds

$15.4


$38.7


$24.4


Income

$4.6


$14.3


$6.8









Land & Development

At the end of the quarter, the Company's land & development portfolio totaled $1.12 billion, with eight projects in production, nine in development and 14 in the pre-development phase. These projects are collectively entitled for approximately 30,000 lots and units.

Land & Development Portfolio Overview as of 9/30/16




$ in millions


MPCs


Waterfront


Urban / Infill


Total


# of projects

11


6


14


31







In production

$190.1


$138.9


$55.2


$384.2


In development

252.0


135.4


21.6


409.0


Pre-development

226.4


7.6


94.7


328.7


Gross book value

$668.5


$281.9


$171.5


$1,121.9







Land & Development Activity for 3Q'16

Land development revenue

$10.2


$8.3


$13.1


$31.6


Land development cost of sales

(7.7)


(4.0)


(10.3)


(22.0)


Gross margin

$2.5


$4.3


$2.8


$9.6


Earnings from land development
equity method investments

0.1


6.2


15.5


21.8


Total

$2.6


$10.5


$18.3


$31.4







Capital expenditures / Contributions

$16.2


$5.9


$5.4


$27.5


iStar and its joint venture partner closed on a $145.0 million refinancing of 1000 South Clark, a 469-unit multifamily project located in Chicago's South Loop neighborhood. The refinancing resulted in the repayment of iStar's $38.9 million mezzanine loan on 1000 South Clark, an $18.3 million equity distribution to iStar resulting in a reduction of the asset's basis to zero and $15.8 million of earnings from equity method investments. Post refinancing, the Company's equity interest in the joint venture is 50%. At the end of the quarter, the Company moved the asset into its transitional commercial operating properties portfolio.

In addition, the Company reclassified The Asbury, the recently completed $45 million boutique hotel anchoring iStar's Asbury Park Waterfront development, as a stabilized commercial operating property.

Capital Markets

The Company is capitalized with debt, preferred stock and common equity.

The Company's weighted average cost of debt for the third quarter was 5.6%. The Company's leverage was 2.1x at the end of the quarter, within the Company's targeted range of 2.0x – 2.5x.

Leverage at 9/30/16

$ in millions


Book Debt

$3,749.9



Book equity (1)

$1,071.5


Less: Cash and cash equivalents

(547.5)



Add: Accumulated depreciation and
amortization (1)

461.7


Net book debt (A)

$3,202.4



Add: General loan loss reserves

21.2





Sum of book equity, accumulated D&A
and general loan loss reserves (B)

$1,554.4










Leverage (A) / (B)

2.1x


(1) Includes $699.7 million of preferred equity.

(2) Accumulated depreciation and amortization includes iStar's proportionate share of accumulated depreciation and
amortization relating to equity method investments.

The Company upsized its 2016 Secured Term Loan by $50.0 million during the quarter, bringing the outstanding balance to $500 million. Proceeds from the upsize were used to repay outstanding borrowings under our revolving credit facility, leaving the $250 million facility fully undrawn.

During the quarter, the Company repurchased at par $21.8 million of its 1.5% convertible notes due in November, which equates to a reduction of 1.3 million diluted shares.

Shares Outstanding

in millions




Q3'16

Q2'16

Q3'15

Basic shares outstanding at end of period

71.2


71.9


85.2


3.0% convertible notes / strike of $11.77 (if converted) (1)

17.0


17.0


17.0


1.5% convertible notes / strike of $17.29 (if converted) (1)

10.3


11.6


11.6


4.5% Series J conv. preferred / strike of $12.79 (if converted)

15.6


15.6


15.6


Other securities

0.8


0.8


0.8


Diluted shares outstanding at end of period

114.9


116.9


130.2


(1) Matures November 15, 2016




Liquidity

At the end of the quarter, iStar had a combined $797.5 million of unrestricted cash and available capacity on its revolving credit facility. The Company expects to maintain larger liquidity balances in anticipation of retiring up to $378.3 million of remaining convertible bonds due on November 15, 2016. Aside from these convertible bonds, the Company has an additional $374.7 million of debt maturities over the next four quarters.

Liquidity at 9/30/16


$ in millions

Unrestricted cash

$547.5

Revolving credit facility capacity

$250.0

Total liquidity

$797.5

 

*     *     *

iStar (NYSE: STAR) finances, invests in and develops real estate and real estate related projects as part of its fully-integrated investment platform. Building on over two decades of experience and more than $35 billion of transactions, iStar brings uncommon capabilities and new ways of thinking to commercial real estate and adapts its investment strategy to changing market conditions. The Company is structured as a real estate investment trust ("REIT"), with a diversified portfolio focused on larger assets located in major metropolitan markets.

iStar will hold a quarterly earnings conference call at 10:00 a.m. ET today, November 3, 2016. This conference call will be broadcast live over the internet and can be accessed by all interested parties through iStar's website, www.istar.com. To listen to the live call, please go to the website's "Investor" 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 iStar's 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 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's expectations include general economic conditions and conditions in the commercial real estate and credit markets, the Company's ability to generate liquidity and to repay indebtedness as it comes due, additional loan loss provisions, the amount and timing of asset sales, changes in NPLs, repayment levels, the Company's ability to make new investments, the Company's ability to maintain compliance with its debt covenants, the Company's ability to generate income and gains from operating properties and land and other risks detailed from time to time in iStar SEC reports.

iStar logo

 

iStar

Consolidated Statements of Operations

(In thousands)

(unaudited)




Three Months
Ended September 30,


Nine Months
Ended September 30,



2016


2015


2016


2015

REVENUES









Operating lease income


$

51,414



$

55,699



$

160,869



$

170,990


Interest income


32,258



33,599



99,877



102,224


Other income


13,442



16,888



35,080



40,214


Land development revenue


31,554



14,301



74,389



29,101


Total revenues


$

128,668



$

120,487



$

370,215



$

342,529


COST AND EXPENSES









Interest expense


$

55,105



$

56,880



$

168,173



$

167,336


Real estate expense


35,335



35,154



105,078



111,143


Land development cost of sales


22,004



10,686



50,842



22,828


Depreciation and amortization


13,002



15,787



42,184



49,804


General and administrative(1)


19,666



21,181



62,433



62,520


(Recovery of) provision for loan losses


(14,955)



7,500



(12,749)



30,944


Impairment of assets


8,741



3,916



11,753



5,590


Other expense


819



3,334



4,741



6,345


Total costs and expenses


$

139,717



$

154,438



$

432,455



$

456,510


Income (loss) before other items


$

(11,049)



$

(33,951)



$

(62,240)



$

(113,981)


Income from sales of real estate


34,444



26,511



88,387



66,021


Earnings from equity method investments


26,540



10,572



74,254



25,904


Income tax benefit (expense)


8,256



2,893



9,859



(3,796)


Loss on early extinguishment of debt


(36)



(67)



(1,618)



(279)


Net income (loss)


$

58,155



$

5,958



$

108,642



$

(26,131)


Net (income) loss attributable to noncontrolling
interests

967



706



(6,915)



3,176


Net income (loss) attributable to iStar


$

59,122



$

6,664



$

101,727



$

(22,955)


Preferred dividends


(12,830)



(12,830)



(38,490)



(38,490)


Net (income) loss allocable to HPU holders and
Participating Security holders(2)



94



(27)



1,627


Net income (loss) allocable to common shareholders


$

46,292



$

(6,072)



$

63,210



$

(59,818)


________________________________________________________________

(1) For the three months ended September 30, 2016 and 2015, includes $1,434 and $2,881 of stock-based compensation expense,
respectively.  For the nine months ended September 30, 2016 and 2015, includes $7,644 and $10,066 of stock-based compensation
expense, respectively.

(2) HPU Holders were current and former Company employees who purchased high performance common stock units under the Company's
High Performance Unit Program. On August 13, 2015, the Company repurchased and retired 100% of the outstanding HPU shares through
an exchange offer. Participating Security holders are non-employee directors who hold common stock equivalents and restricted stock
awards granted under the Company's LTIP who are eligible to participate in dividends.

 

 

iStar

Earnings Per Share Information

(In thousands, except per share data)

(unaudited)




Three Months
Ended September 30,


Nine Months
Ended September 30,



2016


2015


2016


2015

EPS INFORMATION FOR COMMON SHARES









Income (loss) from continuing operations attributable to iStar(1)(2)





  Basic


$

0.65



$

(0.07)



$

0.85



$

(0.70)


  Diluted


$

0.44



$

(0.07)



$

0.66



$

(0.70)


Net income (loss)









  Basic


$

0.65



$

(0.07)



$

0.85



$

(0.70)


  Diluted


$

0.44



$

(0.07)



$

0.66



$

(0.70)


Adjusted income









  Basic


$

0.69



$

0.32



$

1.48



$

0.49


  Diluted


$

0.47



$

0.25



$

1.06



$

0.44


Weighted average shares outstanding









  Basic


71,210



85,766



74,074



85,602


  Diluted (for net income per share)


115,666



85,766



118,590



85,602


  Diluted (for adjusted income per share)


115,666



130,368



118,590



130,200


Common shares outstanding at end of period


71,176



85,179



71,176



85,179


_____________________________________________

(1) Including preferred dividends, net (income) loss attributable to noncontrolling interests and income from sales of
real estate.

(2) On August 13, 2015, the Company repurchased and retired 100% of the outstanding high performance unit (HPU)
shares through an exchange offer.

 

 

iStar

Consolidated Balance Sheets

(In thousands)

(unaudited)



As of


As of


September 30, 2016


December 31, 2015

ASSETS








Real estate




Real estate, at cost

$

1,779,819



$

2,050,541


Less: accumulated depreciation

(405,209)



(456,558)


Real estate, net

$

1,374,610



$

1,593,983


Real estate available and held for sale

101,488



137,274



$

1,476,098



$

1,731,257


Land and development, net

1,022,106



1,001,963


Loans receivable and other lending investments, net

1,632,186



1,601,985


Other investments

262,496



254,172


Cash and cash equivalents

547,510



711,101


Accrued interest and operating lease income receivable,
net

12,720



18,436


Deferred operating lease income receivable

94,405



97,421


Deferred expenses and other assets, net

190,493



181,457


Total assets

$

5,238,014



$

5,597,792






LIABILITIES AND EQUITY








Accounts payable, accrued expenses and other liabilities

$

204,272



$

214,835


Loan participations payable, net

205,781



152,086


Debt obligations, net

3,749,873



4,118,823


Total liabilities

$

4,159,926



$

4,485,744






Redeemable noncontrolling interests

$

6,601



$

10,718






Total iStar shareholders' equity

$

1,025,140



$

1,059,112


Noncontrolling interests

46,347



42,218


Total equity

$

1,071,487



$

1,101,330






Total liabilities and equity

$

5,238,014



$

5,597,792


 

 

iStar

Segment Analysis

(In thousands)

(unaudited)


FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016








Real
Estate
Finance


Net
Lease


Operating
Properties


Land &
Dev


Corporate
/ Other


Total

Operating lease income

$



$

36,901



$

14,407



$

106



$



$

51,414


Interest income

32,258











32,258


Other income

1,052



412



10,793



658



527



13,442


Land development revenue







31,554





31,554


Earnings from equity method
investments



723



630



21,841



3,346



26,540


Income from sales of real
estate



6,629



27,815







34,444


Total revenue and other
earnings

$

33,310



$

44,665



$

53,645



$

54,159



$

3,873



$

189,652


Real estate expense



(4,799)



(21,129)



(9,407)





(35,335)


Land development cost of
sales







(22,004)





(22,004)


Other expense

(794)









(25)



(819)


Allocated interest expense

(14,544)



(16,330)



(5,110)



(9,013)



(10,108)



(55,105)


Allocated general and
administrative(1)

(3,995)



(4,526)



(1,502)



(3,495)



(4,714)



(18,232)


Segment profit (loss)

$

13,977



$

19,010



$

25,904



$

10,240



$

(10,974)



$

58,157


____________________________________________________________

(1) Excludes $1,434 of stock-based compensation expense.

 

 

AS OF SEPTEMBER 30, 2016













Real
Estate
Finance


Net
Lease


Operating
Properties


Land &
Dev


Corporate
/ Other


Total

Real estate












Real estate, at cost

$



$

1,364,069



$

415,750



$



$



$

1,779,819


Less: accumulated
depreciation



(362,293)



(42,916)







(405,209)


Real estate, net

$



$

1,001,776



$

372,834



$



$



$

1,374,610


Real estate available
and held for sale





101,488







101,488


Total real estate

$



$

1,001,776



$

474,322



$



$



$

1,476,098


Land and development,
net







1,022,106





1,022,106


Loans receivable and other
lending investments, net

1,632,186











1,632,186


Other investments



103,468



12,747



92,885



53,396



262,496


Total portfolio assets

$

1,632,186



$

1,105,244



$

487,069



$

1,114,991



$

53,396



$

4,392,886


Cash and other assets











845,128


Total assets











$

5,238,014


 

 

iStar

Supplemental Information

(In thousands)

(unaudited)




Three Months
Ended September 30,


Nine Months
Ended September 30,



2016


2015


2016


2015

ADJUSTED INCOME (1)









Reconciliation of Net Income to Adjusted Income









Net income (loss) allocable to common shareholders


$

46,292



$

(6,072)



$

63,210



$

(59,818)


Add: Depreciation and amortization


15,598



17,560



50,107



54,925


Add: (Recovery of) provision for loan losses


(14,955)



7,500



(12,749)



30,944


Add: Impairment of assets


8,741



6,398



12,668



12,409


Add: Stock-based compensation expense


1,434



2,881



7,644



10,066


Add: Loss on early extinguishment of debt


36



67



1,618



279


Less: Losses on charge-offs and dispositions


(8,039)



(517)



(12,602)



(3,713)


Less: HPU/Participating Security allocation




(516)



(21)



(2,778)


Adjusted income allocable to common shareholders


$

49,107



$

27,301



$

109,875



$

42,314


_________________________________________________________

(1) Adjusted Income allocable to common shareholders should be examined in conjunction with net income (loss) as shown in
the Consolidated Statements of Operations. This non-GAAP financial measure should not be considered as an alternative to
net income (determined in accordance with GAAP)or to cash flows from operating activities (determined in accordance with
GAAP) as a measure of the Company's liquidity, nor is it 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 this non-GAAP financial
measure may differ from the calculations of similarly-titled measures by other companies. Management considers this
non-GAAP financial measure as supplemental information to net income in analyzing the performance of our underlying business.
Depreciation and amortization includes our proportionate share of depreciation and amortization expense relating to equity
method investments and excludes the portion of depreciation and amortization expense allocable to non-controlling interests.
Impairment of assets includes impairments on cost and equity method investments recorded in other income and earnings from
equity method investments, respectively. Effective in the second quarter 2016, we modified our presentation of Adjusted
Income to include losses on charge-offs and dispositions of previously impaired or reserved assets to provide a more
informative metric for investors to help evaluate our operating performance. Losses on charge-offs and dispositions
represents the impact of charge-offs and dispositions realized during the period. These charge-offs and dispositions were
taken on assets that were initially acquired prior to 2008 that were previously impaired for GAAP and reflected in net income
but not Adjusted Income.

 

 

iStar

Supplemental Information

(In thousands)

(unaudited)






Twelve Months Ended
September 30, 2016

OPERATING STATISTICS












Expense Ratio






General and administrative expenses - trailing twelve months (A)



$

81,190


Average total assets (B)




$

5,436,035


Expense Ratio (A) / (B)




1.5%












As of





September 30, 2016

UNENCUMBERED ASSETS / UNSECURED DEBT












Unencumbered assets (C)(1)




$

4,133,574


Unsecured debt (D)




$

3,047,972


Unencumbered Assets / Unsecured Debt (C) / (D)




1.4x







UNFUNDED COMMITMENTS












Performance-based commitments(2)




$

495,042


Strategic investments




45,823


Discretionary fundings





Total Unfunded Commitments




$

540,865








LOAN RECEIVABLE CREDIT STATISTICS

As of


September 30, 2016


December 31, 2015







Carrying value of NPLs /






As a percentage of total carrying value of loans

$

222,484


14.2%



$

60,327


3.9%








Total reserve for loan losses /






As a percentage of total gross carrying value of loans(3)

$

95,416


5.7%



$

108,165


6.6%


___________________________________________

(1) Unencumbered assets are calculated in accordance with the indentures governing the Company's unsecured
debt securities.

(2) Excludes $212.1 million of commitments on loan participations sold that are not the obligation of the Company
but are consolidated on the Company's balance sheet.

(3) Gross carrying value represents iStar's carrying value of loans, gross of loan loss reserves.

 

 

iStar

Supplemental Information

(In millions)

(unaudited)


PORTFOLIO STATISTICS AS OF SEPTEMBER 30, 2016(1)














Property Type


Real
Estate
Finance


Net
Lease


Operating
Properties


Land &
Dev


Total


% of
Total

Land & Development


$

48



$



$



$

1,122



$

1,170



24%

Office / Industrial


164



767



25





956



20%

Mixed Use / Collateral


503





176





679



14%

Hotel


343



136



104





583



12%

Entertainment / Leisure




494







494



10%

Condominium


326





101





427



9%

Retail


64



57



124





245



5%

Other Property Types


205



14







219



5%

Strategic Investments










53



1%

Total


$

1,653



$

1,468



$

530



$

1,122



$

4,826



100%














Geography


Real
Estate
Finance


Net
Lease


Operating
Properties


Land &
Dev


Total


% of
Total

Northeast


$

970



$

382



$

45



$

233



$

1,630



34%

West


103



317



39



367



826



17%

Southeast


129



236



162



154



681



14%

Mid-Atlantic


168



151



68



217



604



13%

Southwest


51



160



139



146



496



10%

Central


164



80



62





306



6%

Various


68



142



15



5



230



5%

Strategic Investments










53



1%

Total


$

1,653



$

1,468



$

530



$

1,122



$

4,826



100%

______________________________________________________________________________

(1) Based on carrying value of the Company's total investment portfolio, gross of accumulated depreciation and general loan
loss reserves.

 

Photo - http://photos.prnewswire.com/prnh/20161102/435641
Logo - http://photos.prnewswire.com/prnh/20130708/NY43293LOGO

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/istar-announces-third-quarter-2016-results-300356688.html

SOURCE iStar

Company Contact: Jason Fooks, Vice President of Investor Relations & Marketing, 1114 Avenue of the Americas, New York, NY 10036, (212) 930-9400, investors@istar.com

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