PRESS RELEASE
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Colony Capital Announces Second Quarter 2018 Financial Results
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Second Quarter 2018 Financial Results and Highlights
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Second quarter 2018 net loss attributable to common stockholders of
$(92.8) million , or$(0.19) per share, and Core FFO of$93.5 million , or$0.18 per share -
The Company’s Board of Directors declared and paid a second quarter
2018 dividend of
$0.11 per share of Class A and B common stock -
During the second quarter 2018, the Company raised approximately
$1.8 billion of third-party capital (including amounts related to affiliates) from institutional clients-
Digital Colony, the Company's digital real estate infrastructure
vehicle established in partnership with
Digital Bridge , raised$932 million during the second quarter 2018 and had an aggregate$3.0 billion of committed capital as ofJune 30, 2018 , inclusive of a$229 million capital commitment by certain subsidiaries of the Company -
The Company raised
$469 million of third-party capital for its investment in AccorInvest, the property arm of AccorHotels -
The Company raised
$175 million of third-party capital in the industrial platform -
The Company raised
$95 million of third-party co-investment capital for a Strategic Other Equity and Debt investment
-
Digital Colony, the Company's digital real estate infrastructure
vehicle established in partnership with
-
The Company completed over
$440 million of Other Equity and Debt asset monetizations, with net equity proceeds of approximately$295 million -
The Company invested
$81 million within vehicles that earn investment management economics and are classified as additions to the Strategic Other Equity and Debt segment -
The Company repurchased approximately 12.5 million shares of its Class
A common stock at an average price of
$5.80 per share, or$73 million , resulting in aggregate year-to-date 2018 repurchases of approximately 54.8 million shares at an average price of$5.82 per share, or$319 million -
The Company changed its name from
Colony NorthStar, Inc. toColony Capital, Inc. and its ticker symbol on theNew York Stock Exchange from “CLNS” to “CLNY” -
Subsequent to the second quarter 2018:
-
The Company redeemed all of the shares of its 8.5% Series D
cumulative redeemable perpetual preferred stock for
$200 million , resulting in year-to-date preferred stock redemptions and common stock repurchases of$519 million -
The Company monetized or was under contract to sell over
$500 million of Other Equity and Debt investments with estimated net equity proceeds of$310 million , which would bring year-to-date asset monetizations to$1.0 billion with net equity proceeds of approximately$650 million -
The Company refinanced approximately
$500 million of consolidated debt in theHospitality Real Estate segment extending the fully extended maturity date from 2019 to 2025 -
As of
August 6, 2018 , Digital Colony had an aggregate$3.3 billion of capital commitments, inclusive of a hard cap limit of$250 million capital commitment by certain subsidiaries of the Company - The Company received an additional commitment of €250 million from a third-party institutional investor to increase the investment in AccorInvest
-
As of
August 6, 2018 , The Company has approximately$1.1 billion of liquidity through cash-on-hand and availability under its revolving credit facility
-
The Company redeemed all of the shares of its 8.5% Series D
cumulative redeemable perpetual preferred stock for
For more information and a reconciliation of net income/(loss) to common stockholders to Core FFO, NOI and/or EBITDA, please refer to the non-GAAP financial measure definitions and tables at the end of this press release.
“We made significant progress this quarter in growing our investment
management business,” said
Second Quarter 2018 Operating Results and Investment Activity by Segment
As of
During the second quarter 2018, this segment’s net loss attributable to
common stockholders was
The following table presents NOI and certain operating metrics by
property types in the Company’s
| Consolidated | CLNY OP | Same Store | ||||||||||||||||||||
| NOI | Share NOI(1) | Consolidated NOI(2) | Occupancy %(3) | TTM Lease Coverage(4) | ||||||||||||||||||
| ($ In millions) | Q2 2018 | Q2 2018 | Q2 2018 | Q1 2018 | Q2 2018 | Q1 2018 | 3/31/18 | 12/31/17 | ||||||||||||||
| Senior Housing - Operating | $ | 16.8 | $ | 11.9 | $ | 17.4 | $ | 17.5 | 86.8 | % | 86.4 | % | N/A | N/A | ||||||||
| Medical Office Buildings | 13.7 | 9.7 | 13.7 | 13.3 | 82.6 | % | 83.2 | % | N/A | N/A | ||||||||||||
| Triple-Net Lease: | ||||||||||||||||||||||
| Senior Housing | 14.5 | 10.3 | 15.5 | 15.5 | 82.3 | % | 83.2 | % | 1.4x | 1.4x | ||||||||||||
| Skilled Nursing Facilities | 24.1 | 17.1 | 26.0 | 26.9 | 82.2 | % | 82.7 | % | 1.2x | 1.2x | ||||||||||||
| Hospitals | 4.8 | 3.4 | 4.8 | 4.9 | 59.6 | % | 55.3 | % | 3.3x | 3.5x | ||||||||||||
| Healthcare Total | $ | 73.9 | $ | 52.4 | $ | 77.4 | $ | 78.1 | ||||||||||||||
| ___________________________________________________ | ||
| (1) | CLNY OP Share NOI represents second quarter 2018 Consolidated NOI multiplied by CLNY OP’s ownership interest as of June 30, 2018. | |
| (2) | Same Store Consolidated NOI excludes $3.2 million of termination fee revenue in Q1 2018 and excludes $3.6 million of non-recurring bad debt expense in Q2 2018. | |
| (3) | Occupancy % for Senior Housing - Operating represents average during the presented quarter, MOB’s is as of last day in the quarter and for other types represents average during the prior quarter. | |
| (4) | Represents the ratio of the tenant’s/operator’s EBITDAR to cash rent payable to the Company’s Healthcare Real Estate segment on a trailing twelve month basis. | |
As of
During the second quarter 2018, this segment’s net income attributable
to common stockholders was
The following table presents NOI and certain operating metrics in the
Company’s
| Consolidated | CLNY OP | Same Store | ||||||||||||||||
| NOI | Share NOI (1) | Consolidated NOI | Leased %(2) | |||||||||||||||
| ($ In millions) | Q2 2018 | Q2 2018 | Q2 2018 | Q1 2018 | Q2 2018 | Q1 2018 | ||||||||||||
| Industrial | $ | 49.1 | $ | 18.3 | $ | 35.5 | $ | 35.1 | 93.9 | % | 95.1 | % | ||||||
| ___________________________________________________ | ||
| (1) | CLNY OP Share NOI represents second quarter 2018 Consolidated NOI multiplied by CLNY OP’s ownership interest as of June 30, 2018. | |
| (2) | Leased % represents the last day of the presented quarter. | |
Asset Acquisitions, Dispositions and Financing
During the second quarter 2018, the consolidated industrial portfolio
acquired 15 industrial buildings totaling approximately 1.9 million
square feet and land for development for approximately
Subsequent to the second quarter 2018, the consolidated industrial
portfolio acquired five industrial buildings totaling approximately 0.5
million square feet for approximately
During the second quarter 2018, the consolidated industrial portfolio
closed on a
As of
During the second quarter 2018, this segment’s net income attributable
to common stockholders was
Asset Financing
Subsequent to the second quarter 2018, the Company refinanced
approximately
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 |
Occupancy %(4) | (In dollars)(4) | (In dollars)(4) | |||||||||||||||||||||||||
| ($ In millions) | Q2 2018 | Q2 2018 | Q2 2018 | Q2 2017 | Q2 2018 | Q2 2017 | Q2 2018 | Q2 2017 | Q2 2018 | Q2 2017 | ||||||||||||||||||||
| Marriott | $ | 66.3 | $ | 62.5 | $ | 66.3 | $ | 62.8 | 78.3 | % | 77.0 | % | $ | 131 | $ | 129 | $ | 102 | $ | 99 | ||||||||||
| Hilton | 14.8 | 14.0 | 14.8 | 13.9 | 83.9 | % | 82.0 | % | 135 | 131 | 113 | 107 | ||||||||||||||||||
| Other | 4.9 | 4.6 | 4.9 | 5.0 | 86.3 | % | 84.2 | % | 138 | 139 | 119 | 117 | ||||||||||||||||||
| Total/W.A. | $ | 86.0 | $ | 81.1 | $ | 86.0 | $ | 81.7 | 79.6 | % | 78.2 | % | $ | 132 | $ | 130 | $ | 105 | $ | 102 | ||||||||||
| ___________________________________________________ | ||
| (1) | Q2 2018 Consolidated EBITDA excludes a FF&E reserve contribution amount of $10.0 million. | |
| (2) | CLNY OP Share EBITDA represents second quarter 2018 Consolidated EBITDA multiplied by CLNY OP’s ownership interest as of June 30, 2018. | |
| (3) | RevPAR, or revenue per available room, represents a hotel's total guestroom revenue divided by the room count and the number of days in the period being measured. | |
| (4) | For each metric, data represents average during the presented quarter. | |
On
Other Equity and Debt
The Company owns a diversified group of strategic and non-strategic real
estate and real estate-related debt and equity investments. Strategic
investments include our 11% interest in
Other Equity and Debt Segment Asset Acquisitions and Dispositions
During the second quarter 2018, the Company invested approximately
Subsequent to the second quarter 2018, the Company monetized or was
under contract to sell over
As of
| CLNY OP Share | ||||||||||||
| Undepreciated Carrying Value | ||||||||||||
| June 30, 2018 | March 31, 2018 | |||||||||||
| ($ In millions) | Assets | Equity | Assets | Equity | ||||||||
|
Strategic: |
||||||||||||
| GP co-investments | $ | 701 | $ | 422 | $ | 665 | $ | 400 | ||||
| Interest in NRE | 75 | 75 | 74 | 74 | ||||||||
| Strategic Subtotal | 776 | 497 | 739 | 474 | ||||||||
|
Non-Strategic: |
||||||||||||
| Other Real Estate Equity & Albertsons | 1,749 | 968 | 2,039 | 1,104 | ||||||||
| Real Estate Debt | 443 | 419 | 660 | 615 | ||||||||
| Net Lease Real Estate Equity | 585 | 250 | 583 | 239 | ||||||||
| Real Estate Private Equity Funds and CRE Securities | 221 | 221 | 304 | 304 | ||||||||
| Non-Strategic Subtotal | 2,998 | 1,858 | 3,586 | 2,262 | ||||||||
| Total Other Equity and Debt | $ | 3,774 | $ | 2,355 | $ | 4,325 | $ | 2,736 | ||||
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 second quarter 2018, Digital Colony raised
As of
Combination of
During the second quarter 2018, the Company completed the previously
announced combination of
Assets Under Management (“AUM”)
As of
| June 30, 2018 | March 31, 2018 | |||||||||||
| ($ In billions) | Amount |
% of |
Amount |
% of |
||||||||
| Balance Sheet (CLNY OP Share): | ||||||||||||
| Healthcare | $ | 4.1 | 9.4 | % | $ | 4.1 | 9.5 | % | ||||
| Industrial | 1.2 | 2.8 | % | 1.3 | 3.0 | % | ||||||
| Hospitality | 3.9 | 9.1 | % | 3.9 | 9.3 | % | ||||||
| Other Equity and Debt | 3.8 | 8.8 | % | 4.3 | 10.0 | % | ||||||
| CLNC: Investments contributed to CLNC(1) | 1.8 | 4.2 | % | 1.8 | 4.2 | % | ||||||
| Balance Sheet Subtotal | 14.8 | 34.3 | % | 15.4 | 36.0 | % | ||||||
| Investment Management: | ||||||||||||
| Institutional Funds | 10.0 | 23.3 | % | 9.8 | 22.8 | % | ||||||
| Retail Companies | 3.6 | 8.4 | % | 3.7 | 8.6 | % | ||||||
| Colony Credit Real Estate (NYSE:CLNC)(2) | 3.1 | 7.2 | % | 3.1 | 7.2 | % | ||||||
| NorthStar Realty Europe (NYSE:NRE) | 2.1 | 4.9 | % | 2.2 | 5.1 | % | ||||||
| Non-Wholly Owned REIM Platforms(3) | 9.4 | 21.9 | % | 8.7 | 20.3 | % | ||||||
| Investment Management Subtotal | 28.2 | 65.7 | % | 27.5 | 64.0 | % | ||||||
| Grand Total | $ | 43.0 | 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 $4.9 billion and $4.9 billion as of June 30, 2018 and March 31, 2018, respectively. | |
| (2) | Represents 3rd party 63% ownership share of CLNC’s total pro-rata share of assets, excluding securitization trust liabilities, of $4.9 billion and $4.9 billion as of June 30, 2018 and March 31, 2018, respectively. | |
| (3) | REIM: Real Estate Investment Management | |
Liquidity and Financing
As of
On
Common Stock and Operating Company Units
As of
During the second quarter 2018, the Company repurchased approximately
12.5 million shares of its Class A common stock at an average price of
In
Common and Preferred Dividends
On
On
Contingent Consideration
As part of the internalization transaction of
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 Board of Governors of 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 U.S. GAAP net income (loss) which further limits its usefulness.
NOI should not be considered as an alternative to net income (loss), determined in accordance with U.S. GAAP, as an indicator of operating performance. In addition, the Company’s methodology for calculating NOI involves subjective judgment and discretion and may differ from the methodologies used by other comparable companies, including other REITs, when calculating the same or similar supplemental financial measures and may not be comparable with other companies.
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.
Second 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
Supplemental Financial Report
A Second Quarter 2018 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
| COLONY CAPITAL, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands, except per share data) | ||||||||
|
June 30, 2018 |
December 31, 2017 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 480,230 | $ | 921,822 | ||||
| Restricted cash | 398,981 | 471,078 | ||||||
| Real estate, net | 14,254,108 | 14,464,258 | ||||||
| Loans receivable, net ($0 and $45,423 at fair value, respectively) | 1,791,889 | 3,223,762 | ||||||
| Investments in unconsolidated ventures ($217,098 and $363,901 at fair value, respectively) | 2,491,342 | 1,655,239 | ||||||
| Securities, at fair value | 144,421 | 383,942 | ||||||
| Goodwill | 1,534,561 | 1,534,561 | ||||||
| Deferred leasing costs and intangible assets, net | 610,853 | 852,872 | ||||||
| Assets held for sale ($52,123 and $49,498 at fair value, respectively) | 637,802 | 781,630 | ||||||
| Other assets ($25,206 and $10,150 at fair value, respectively) | 431,222 | 444,968 | ||||||
| Due from affiliates | 44,308 | 51,518 | ||||||
| Total assets | $ | 22,819,717 | $ | 24,785,650 | ||||
| Liabilities | ||||||||
| Debt, net ($0 and $44,542 at fair value, respectively) | $ | 9,994,115 | $ | 10,827,810 | ||||
| Accrued and other liabilities ($110,513 and $212,267 at fair value, respectively) | 679,658 | 898,161 | ||||||
| Intangible liabilities, net | 173,702 | 191,109 | ||||||
| Liabilities related to assets held for sale | 256,477 | 273,298 | ||||||
| Due to affiliates ($0 and $20,650 at fair value, respectively) | 9,383 | 23,534 | ||||||
| Dividends and distributions payable | 86,656 | 188,202 | ||||||
| Preferred stock redemptions payable | 200,000 | — | ||||||
| Total liabilities | 11,399,991 | 12,402,114 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interests | 33,523 | 34,144 | ||||||
| Equity | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $0.01 par value per share; $1,436,605 and $1,636,605 liquidation preference, respectively; 250,000 shares authorized; 57,464 and 65,464 shares issued and outstanding, respectively | 1,407,495 | 1,606,966 | ||||||
| Common stock, $0.01 par value per share | ||||||||
| Class A, 949,000 shares authorized; 489,764 and 542,599 shares issued and outstanding, respectively | 4,898 | 5,426 | ||||||
| Class B, 1,000 shares authorized; 708 and 736 shares issued and outstanding, respectively | 7 | 7 | ||||||
| Additional paid-in capital | 7,616,918 | 7,913,622 | ||||||
| Distributions in excess of earnings | (1,443,717 | ) | (1,165,412 | ) | ||||
| Accumulated other comprehensive income | 23,930 | 47,316 | ||||||
| Total stockholders’ equity | 7,609,531 | 8,407,925 | ||||||
| Noncontrolling interests in investment entities | 3,393,981 | 3,539,072 | ||||||
| Noncontrolling interests in Operating Company | 382,691 | 402,395 | ||||||
| Total equity | 11,386,203 | 12,349,392 | ||||||
| Total liabilities, redeemable noncontrolling interests and equity | $ | 22,819,717 | $ | 24,785,650 | ||||
| COLONY CAPITAL, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (In thousands, except per share data) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended June 30, | ||||||||
| 2018 | 2017 | |||||||
| Revenues | ||||||||
| Property operating income | $ | 590,638 | $ | 500,531 | ||||
| Interest income | 44,183 | 111,263 | ||||||
| Fee income | 39,924 | 54,319 | ||||||
| Other income | 14,854 | 13,259 | ||||||
| Total revenues | 689,599 | 679,372 | ||||||
| Expenses | ||||||||
| Property operating expense | 320,674 | 253,717 | ||||||
| Interest expense | 153,309 | 140,260 | ||||||
| Investment, servicing and commission expense | 25,951 | 13,740 | ||||||
| Transaction costs | 2,641 | 2,440 | ||||||
| Depreciation and amortization | 137,896 | 153,111 | ||||||
| Provision for loan loss | 13,933 | 1,067 | ||||||
| Impairment loss | 69,834 | 12,761 | ||||||
| Compensation expense | 55,159 | 80,759 | ||||||
| Administrative expenses | 25,790 | 30,145 | ||||||
| Total expenses | 805,187 | 688,000 | ||||||
| Other income (loss) | ||||||||
| Gain on sale of real estate assets | 42,702 | 15,190 | ||||||
| Other gain (loss), net | 28,798 | (23,850 | ) | |||||
| Earnings from investments in unconsolidated ventures | 1,875 | 122,394 | ||||||
| Income (loss) before income taxes | (42,213 | ) | 105,106 | |||||
| Income tax benefit | 584 | 86 | ||||||
| Net income (loss) from continuing operations | (41,629 | ) | 105,192 | |||||
| Loss from discontinued operations | (219 | ) | — | |||||
| Net income (loss) | (41,848 | ) | 105,192 | |||||
| Net income (loss) attributable to noncontrolling interests: | ||||||||
| Redeemable noncontrolling interests | 1,873 | 720 | ||||||
| Investment entities | 27,420 | 23,800 | ||||||
| Operating Company | (5,728 | ) | 2,330 | |||||
| Net income (loss) attributable to Colony Capital, Inc. | (65,413 | ) | 78,342 | |||||
| Preferred stock redemption | (3,995 | ) | 5,448 | |||||
| Preferred stock dividends | 31,388 | 34,339 | ||||||
| Net income (loss) attributable to common stockholders | $ | (92,806 | ) | $ | 38,555 | |||
| Basic earnings (loss) per share | ||||||||
| Income (loss) from continuing operations per basic common share | $ | (0.19 | ) | $ | 0.07 | |||
| Net income (loss) per basic common share | $ | (0.19 | ) | $ | 0.07 | |||
| Diluted earnings (loss) per share | ||||||||
| Income (loss) from continuing operations per diluted common share | $ | (0.19 | ) | $ | 0.07 | |||
| Net income (loss) per diluted common share | $ | (0.19 | ) | $ | 0.07 | |||
| Weighted average number of shares | ||||||||
| Basic | 488,676 | 544,023 | ||||||
| Diluted | 488,676 | 544,023 | ||||||
| COLONY CAPITAL, INC. | ||||
| FUNDS FROM OPERATIONS AND CORE FUNDS FROM OPERATIONS | ||||
| (In thousands, except per share data) | ||||
| (Unaudited) | ||||
|
Three Months Ended |
||||
| Net loss attributable to common stockholders | $ | (92,806 | ) | |
| Adjustments for FFO attributable to common interests in Operating Company and common stockholders: | ||||
| Net loss attributable to noncontrolling common interests in Operating Company | (5,728 | ) | ||
| Real estate depreciation and amortization | 140,599 | |||
| Impairment of real estate | 9,522 | |||
| Gain from sales of real estate | (42,750 | ) | ||
| Less: Adjustments attributable to noncontrolling interests in investment entities | (29,471 | ) | ||
| FFO attributable to common interests in Operating Company and common stockholders | (20,634 | ) | ||
| Additional adjustments for Core FFO attributable to common interests in Operating Company and common stockholders: | ||||
| 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) | 29,987 | |||
| Gains and losses from sales of businesses within the Investment Management segment and impairment write-downs associated with the Investment Management segment | 16,437 | |||
| Equity-based compensation expense | 10,033 | |||
| Straight-line rent revenue and expense | (4,489 | ) | ||
| Change in fair value of contingent consideration | 8,750 | |||
| Amortization of acquired above- and below-market lease values, net | 433 | |||
| Amortization of deferred financing costs and debt premiums and discounts | 21,634 | |||
| Unrealized fair value gains and foreign currency remeasurements | (23,971 | ) | ||
| Acquisition and merger-related transaction costs | 3,549 | |||
| Merger integration costs (2) | 8,472 | |||
| Amortization and impairment of investment management intangibles | 66,550 | |||
| Non-real estate depreciation and amortization | 2,100 | |||
| Gain on remeasurement of consolidated investment entities and the effect of amortization thereof | 1,875 | |||
| Deferred tax benefit, net | (1,475 | ) | ||
| Preferred share redemption gain | (3,995 | ) | ||
| Less: Adjustments attributable to noncontrolling interests in investment entities | (21,769 | ) | ||
| Core FFO attributable to common interests in Operating Company and common stockholders | $ | 93,487 | ||
| FFO per common share / common OP unit (3) | $ | (0.04 | ) | |
| FFO per common share / common OP unit—diluted (4) | $ | (0.04 | ) | |
| Core FFO per common share / common OP unit (3) | $ | 0.18 | ||
| Core FFO per common share / common OP unit—diluted (4) | $ | 0.18 | ||
| Weighted average number of common OP units outstanding used for FFO and Core FFO per common share and OP unit (3) | 525,587 | |||
| Weighted average number of common OP units outstanding used for FFO per common share and OP unit—diluted (3)(4) | 525,587 | |||
| Weighted average number of common OP units outstanding used for Core FFO per common share and OP unit—diluted (3)(4) | 553,749 | |||
| __________ | ||
| (1) | Net of $2.5 million CLNY OP share of depreciation, amortization and impairment charges previously adjusted to calculate FFO and Core Earnings, a non-GAAP measure used by Colony Capital, Inc. prior to its internalization of the manager. | |
| (2) | 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. | |
| (3) | Calculated based on weighted average shares outstanding including participating securities and assuming the exchange of all common OP units outstanding for common shares. | |
| (4) | For the three months ended June 30, 2018, included in the calculation of diluted Core FFO per share is the effect of adding back $4.5 million of interest expense associated with convertible senior notes, 25.4 million weighted average dilutive common share equivalents for the assumed conversion of the convertible senior notes, and 2.1 million performance stock units, which are subject to both a service condition and market condition. Such interest expense, weighted average dilutive common share equivalents, and performance stock units are excluded for the calculation of diluted FFO as the effect would be antidilutive. | |
COLONY CAPTITAL, INC.
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 June 30, 2018 | ||||||||||||
|
(In thousands) |
Healthcare | Industrial | Hospitality | |||||||||
| Total revenues | $ | 145,419 | $ | 72,477 | $ | 229,373 | ||||||
| Straight-line rent revenue and amortization of above- and below-market lease intangibles | (1,580 | ) | (2,554 | ) | (6 | ) | ||||||
| Interest income | — | (62 | ) | — | ||||||||
| Other income | — | — | (68 | ) | ||||||||
| Property operating expenses (1) | (69,983 | ) | (20,483 | ) | (143,321 | ) | ||||||
| Compensation expense (1) | — | (300 | ) | — | ||||||||
| NOI or EBITDA | $ | 73,856 | $ | 49,078 | $ | 85,978 | ||||||
| _________ | ||
| (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 June 30, 2018 | ||||||||||||
|
(In thousands) |
Healthcare | Industrial | Hospitality | |||||||||
| Net income (loss) from continuing operations | $ | (20,080 | ) | $ | 4,668 | $ | 6,771 | |||||
| Adjustments: | ||||||||||||
| Straight-line rent revenue and amortization of above- and below-market lease intangibles | (1,580 | ) | (2,554 | ) | (6 | ) | ||||||
| Interest income | — | (62 | ) | — | ||||||||
| Interest expense | 45,179 | 10,856 | 36,494 | |||||||||
| Transaction, investment and servicing costs | 3,110 | 60 | 3,546 | |||||||||
| Depreciation and amortization | 38,229 | 32,482 | 35,925 | |||||||||
| Impairment loss | 1,982 | 174 | — | |||||||||
| Compensation and administrative expense | 2,196 | 3,416 | 1,598 | |||||||||
| Other (gain) loss, net | 4,465 | — | 162 | |||||||||
| Other income | — | — | (68 | ) | ||||||||
| Income tax (benefit) expense | 355 | 38 | 1,556 | |||||||||
| NOI or EBITDA | $ | 73,856 | $ | 49,078 | $ | 85,978 | ||||||
The following table summarizes Q2 2018 net income (loss) from continuing operations by segment:
|
(In thousands) |
Net income (Loss) |
|||||||
| Healthcare | $ | (20,080 | ) | |||||
| Industrial | 4,668 | |||||||
| Hospitality | 6,771 | |||||||
| CLNC | 5,413 | |||||||
| Other Equity and Debt | 61,853 | |||||||
| Investment Management | (48,700 | ) | ||||||
| Amounts Not Allocated to Segments | (51,554 | ) | ||||||
| Total Consolidated | $ | (41,629 | ) | |||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180808005222/en/
Source:
Investor Contacts:
Colony Capital, Inc.
Darren J. Tangen
Executive
Vice President and Chief Financial Officer
310-552-7230
or
Addo
Investor Relations
Lasse Glassen
310-829-5400