March 1, 2019 at 7:00 AM EST
Fourth Quarter and Full Year 2018 Financial Results and Highlights
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.
Fourth Quarter 2018 Operating Results and Investment Activity by
Segment
As of
During the fourth 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) | Q4 2018 | Q4 2018 | Q4 2018 | Q3 2018 | Q4 2018 | Q3 2018 | 9/30/18 | 6/30/18 | ||||||||||||||
| Senior Housing - Operating | $ | 15.7 | $ | 11.1 | $ | 15.7 | $ | 17.4 | 86.8 | % | 87.1 | % | N/A | N/A | ||||||||
| Medical Office Buildings | 12.6 | 9.0 | 12.6 | 13.4 | 82.3 | % | 83.0 | % | N/A | N/A | ||||||||||||
| Triple-Net Lease: | ||||||||||||||||||||||
| Senior Housing | 15.3 | 10.9 | 15.3 | 15.3 | 82.1 | % | 82.0 | % | 1.4x | 1.4x | ||||||||||||
| Skilled Nursing Facilities | 26.0 | 18.4 | 25.8 | 26.2 | 82.4 | % | 81.9 | % | 1.2x | 1.2x | ||||||||||||
| Hospitals | 4.8 | 3.4 | 4.8 | 5.1 | 58.1 | % | 57.1 | % | 3.4x | 3.2x | ||||||||||||
| Healthcare Total | $ | 74.4 | $ | 52.8 | $ | 74.2 | $ | 77.4 | ||||||||||||||
| ___________________________________________________ | ||
| (1) | CLNY OP Share NOI represents fourth quarter 2018 Consolidated NOI multiplied by CLNY OP’s ownership interest as of December 31, 2018. | |
| (2) | Same Store Consolidated NOI excludes $0.9 million of non-recurring bad debt expense during the third quarter 2018. | |
| (3) | Occupancy % for Senior Housing - Operating represents average during the presented quarter, MOB’s is as of last day in the quarter and for other types represents average during the prior quarter. | |
| (4) | Represents the ratio of the tenant’s/operator’s EBITDAR to cash rent payable to the Company’s Healthcare Real Estate segment on a trailing twelve month basis. | |
Asset Financing
During the fourth
quarter 2018, the Company closed on a new
As of
During the fourth quarter 2018, this segment’s net income attributable
to common stockholders was
The following table presents NOI and certain operating metrics in the
Company’s
| Consolidated | CLNY OP | Same Store | ||||||||||||||||
| NOI | Share NOI (1) | Consolidated NOI | Leased %(2) | |||||||||||||||
| ($ in millions) | Q4 2018 | Q4 2018 | Q4 2018 | Q3 2018 | 12/31/18 | 9/30/18 | ||||||||||||
| Industrial | $ | 51.3 | $ | 18.1 | $ | 32.2 | $ | 32.1 | 95.0 | % | 95.0 | % | ||||||
| ___________________________________________________ | ||
| (1) | CLNY OP Share NOI represents fourth quarter 2018 Consolidated NOI multiplied by CLNY OP’s ownership interest as of December 31, 2018. | |
| (2) | Leased % as of the reported date represents square feet under executed leases, some of which may not have taken occupancy. | |
Asset Acquisitions, Dispositions and Financing
During
the fourth quarter 2018, the consolidated industrial portfolio disposed
of six non-core buildings for
Subsequent to the fourth quarter 2018, the consolidated industrial
portfolio acquired three industrial buildings totaling 0.7 million
square feet for
In conjunction with the
As of
During the fourth quarter 2018, this segment’s net loss attributable to
common stockholders was
The following table presents EBITDA and certain operating metrics by
brands in the Company’s
| Same Store | ||||||||||||||||||||||||||||||
| Consolidated | CLNY OP Share | Avg. Daily Rate | RevPAR(3) | |||||||||||||||||||||||||||
| EBITDA (1) | EBITDA(2) |
Consolidated |
Occupancy %(4) | (In dollars)(4) | (In dollars)(4) | |||||||||||||||||||||||||
| ($ in millions) | Q4 2018 | Q4 2018 | Q4 2018 | Q4 2017 | Q4 2018 | Q4 2017 | Q4 2018 | Q4 2017 | Q4 2018 | Q4 2017 | ||||||||||||||||||||
| Marriott | $ | 48.5 | $ | 45.7 | $ | 48.5 | $ | 47.6 | 70.0 | % | 69.7 | % | $ | 125 | $ | 125 | $ | 87 | $ | 87 | ||||||||||
| Hilton | 10.1 | 9.5 | 10.1 | 9.0 | 75.5 | % | 74.0 | % | 126 | 123 | 95 | 91 | ||||||||||||||||||
| Other | 3.8 | 3.6 | 3.8 | 3.4 | 77.9 | % | 75.5 | % | 134 | 129 | 105 | 97 | ||||||||||||||||||
| Total/W.A. | $ | 62.4 | $ | 58.8 | $ | 62.4 | $ | 60.0 | 71.3 | % | 70.7 | % | $ | 126 | $ | 125 | $ | 90 | $ | 88 | ||||||||||
| ___________________________________________________ | ||
| (1) | Fourth quarter 2018 Consolidated EBITDA excludes a FF&E reserve contribution amount of $8.8 million. | |
| (2) | CLNY OP Share EBITDA represents fourth quarter 2018 Consolidated EBITDA multiplied by CLNY OP’s ownership interest as of December 31, 2018. | |
| (3) | RevPAR, or revenue per available room, represents a hotel's total guestroom revenue divided by the room count and the number of days in the period being measured. | |
| (4) | For each metric, data represents average during the presented quarter. | |
Asset Financing
Subsequent to the
fourth quarter 2018, the Company refinanced
On
Other Equity and Debt
The
Company owns a diversified group of strategic and non-strategic real
estate and real estate-related debt and equity investments. Strategic
investments include our 11% interest in
Other Equity and Debt Segment Asset Acquisitions
and Dispositions
During the fourth quarter 2018, the Company
invested, or committed to invest
As of
| CLNY OP Share | ||||||||||||
| Undepreciated Carrying Value | ||||||||||||
| December 31, 2018 | September 30, 2018 | |||||||||||
| ($ in millions) | Assets | Equity | Assets | Equity | ||||||||
|
Strategic: |
||||||||||||
| GP co-investments | $ | 1,075 | $ | 684 | $ | 855 | $ | 528 | ||||
| Interest in NRE | 88 | 88 | 74 | 74 | ||||||||
| Strategic Subtotal | 1,163 | 772 | 929 | 602 | ||||||||
|
Non-Strategic: |
||||||||||||
| Other Real Estate Equity & Albertsons | 1,481 | 752 | 1,742 | 956 | ||||||||
| Real Estate Debt | 297 | 297 | 399 | 376 | ||||||||
| Net Lease Real Estate Equity | 219 | 92 | 245 | 108 | ||||||||
| CRE Securities and Real Estate Private Equity Funds | 70 | 70 | 71 | 71 | ||||||||
| Non-Strategic Subtotal | 2,067 | 1,211 | 2,457 | 1,511 | ||||||||
| Total Other Equity and Debt | $ | 3,230 | $ | 1,983 | $ | 3,386 | $ | 2,113 | ||||
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, traded and non-traded real
estate investment trusts and registered investment companies. As of
Colony Capital Fundamental US Real Estate Index
(“the Index”)
During the fourth quarter 2018, the Company
launched the Index, which is a rules-based (smart-beta) strategy that
invests in the common stocks of real estate investment trusts (REITs).
The Index implements fundamental real estate investing principles drawn
from the Company’s 27 years of managing real estate investments for
institutional investors, with a focus on risk mitigation. The Company
has partnered with Barclays Bank PLC to structure the
Colony HB2 Energy
During the fourth
quarter 2018, the Company formed Colony HB2 Energy, a new energy focused
investment management platform in partnership with HB2 and its seasoned
management team. Colony HB2 Energy will sponsor and manage third-party
capital across a series of investment solutions providing investors more
efficient forms of exposure to the upstream and midstream oil and gas
industry.
Subsequent to
the fourth quarter 2018, the Company entered into a definitive agreement
to acquire the Abraaj Group’s private equity platform in
Assets Under Management (“AUM”)
As of
| December 31, 2018 | September 30, 2018 | December 31, 2017 | ||||||||||||||||
| ($ in billions) | Amount |
% of |
Amount |
% of Grand Total |
Amount |
% of |
||||||||||||
| Balance Sheet (CLNY OP Share): | ||||||||||||||||||
| Healthcare | $ | 3.9 | 9.1 | % | $ | 4.1 | 9.4 | % | $ | 4.1 | 9.6 | % | ||||||
| Industrial | 1.2 | 2.8 | % | 1.2 | 2.8 | % | 1.3 | 2.9 | % | |||||||||
| Hospitality | 4.0 | 9.4 | % | 4.0 | 9.2 | % | 3.9 | 9.3 | % | |||||||||
| Other Equity and Debt | 3.2 | 7.5 | % | 3.4 | 7.8 | % | 4.6 | 10.7 | % | |||||||||
| CLNC(1) | 2.0 | 4.7 | % | 2.0 | 4.5 | % | 1.9 | 4.4 | % | |||||||||
| Balance Sheet Subtotal | 14.3 | 33.5 | % | 14.7 | 33.7 | % | 15.8 | 36.9 | % | |||||||||
| Investment Management: | ||||||||||||||||||
| Institutional Funds | 9.5 | 22.2 | % | 9.8 | 22.5 | % | 9.9 | 23.2 | % | |||||||||
| Retail Companies | 3.5 | 8.2 | % | 3.6 | 8.3 | % | 3.7 | 8.7 | % | |||||||||
| Colony Credit Real Estate (NYSE:CLNC)(2) | 3.5 | 8.2 | % | 3.5 | 8.0 | % | 3.2 | 7.6 | % | |||||||||
| NorthStar Realty Europe (NYSE:NRE) | 1.7 | 4.0 | % | 2.0 | 4.6 | % | 2.2 | 5.2 | % | |||||||||
| Non-Wholly Owned REIM Platforms(3) | 10.2 | 23.9 | % | 10.0 | 22.9 | % | 7.9 | 18.4 | % | |||||||||
| Investment Management Subtotal | 28.4 | 66.5 | % | 28.9 | 66.3 | % | 26.9 | 63.1 | % | |||||||||
| Grand Total | $ | 42.7 | 100.0 | % | $ | 43.6 | 100.0 | % | $ | 42.7 | 100.0 | % | ||||||
| ___________________________________________________ | ||
| (1) | Represents the Company’s 37% ownership share of CLNC’s total pro-rata share of assets, at CLNC share, of $5.5 billion as of December 31, 2018 and September 30, 2018 and proforma $5.1 billion as of September 30, 2017. | |
| (2) | Represents 3rd party 63% ownership share of CLNC’s total pro-rata share of assets, at CLNC share, of $5.5 billion as of December 31, 2018 and September 30, 2018 and proforma $5.1 billion as of September 30, 2017. | |
| (3) |
REIM: Real Estate Investment Management |
|
Noncash Impairments and Unrealized Losses
During the fourth
quarter 2018, the Company recorded noncash impairments and unrealized
losses in net loss attributable to common stockholders of
During the full year 2018, the Company recorded noncash impairments and
unrealized losses in net loss attributable to common stockholders of
Liquidity and Financing
As of
In connection with
the merger among
Common Stock and Operating Company Units
As of
During the fourth quarter 2018, the Company repurchased 6.6 million
shares of its Class A common stock at an average price of
Subsequent to the fourth quarter 2018, the Company repurchased 652
thousand shares of its Class A common stock at an average price of
As of
Common and Preferred Dividends
On
On
Non-GAAP Financial Measures and Definitions
Assets Under Management (“AUM”)
Assets
for which the Company and its affiliates provide investment management
services, including assets for which the Company may or may not charge
management fees and/or performance allocations. AUM is based on reported
gross undepreciated carrying value of managed investments as reported by
each underlying vehicle at
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 and merger related transaction costs; (ix) merger
integration and restructuring costs; (x) amortization and impairment of
finite-lived intangibles related to investment management contracts and
customer relationships; (xi) gain on remeasurement of consolidated
investment entities and the effect of amortization thereof; (xii)
non-real estate depreciation and amortization; (xiii) change in fair
value of contingent consideration; and (xiv) 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.
Fourth Quarter 2018 Conference Call
The Company will conduct
a conference call to discuss the financial results on
For those unable to participate during the live call, a replay will be
available starting
Corporate Overview and Supplemental Financial Report
A
Fourth Quarter 2018 Corporate Overview and Supplemental Financial Report
is available on the Company’s website at www.clny.com.
This information has also been furnished to the
About
Cautionary Statement Regarding Forward-Looking Statements
This
press release may contain forward-looking statements within the meaning
of the federal securities laws. Forward-looking statements relate to
expectations, beliefs, projections, future plans and strategies,
anticipated events or trends and similar expressions concerning matters
that are not historical facts. In some cases, you can identify
forward-looking statements by the use of forward-looking terminology
such as “may,” “will,” “should,” “expects,” “intends,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” or “potential” or
the negative of these words and phrases or similar words or phrases
which are predictions of or indicate future events or trends and which
do not relate solely to historical matters. You can also identify
forward-looking statements by discussions of strategy, plans or
intentions.
Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and contingencies, many of which are beyond
the Company’s control, and may cause the Company’s actual results to
differ significantly from those expressed in any forward-looking
statement. Factors that might cause such a difference include, without
limitation, our ability to achieve anticipated compensation and
administrative cost savings pursuant to our corporate restructuring and
reorganization plan, in the timeframe expected or at all, the impact of
changes to the Company’s management, employee and organizational
structure, whether the formation of the Strategic Asset Review Committee
will result in any action or transaction by the Company and whether the
Company, including its stockholders, will benefit from it, the Company’s
financial flexibility, including borrowing capacity under its revolving
credit facility, the Company's ability to grow its investment management
business, the timing and pace of growth of the Company's Industrial
platform, including the ability to acquire more bulk industrial
buildings and add more third-party capital to the bulk industrial
strategy, the performance of the Company’s investment in
|
COLONY CAPITAL, INC. |
||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||
|
(In thousands, except per share data) |
||||||||
| December 31, | December 31, | |||||||
| 2018 | 2017 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 461,912 | $ | 921,822 | ||||
| Restricted cash | 366,758 | 471,078 | ||||||
| Real estate, net | 13,619,014 | 14,464,258 | ||||||
| Loans receivable, net ($0 and $45,423 at fair value, respectively) | 1,659,217 | 3,223,762 | ||||||
| Equity investments ($142,130 and $363,901 at fair value, respectively) | 2,446,336 | 1,690,839 | ||||||
| Debt securities, at fair value | 96,833 | 348,342 | ||||||
| Goodwill | 1,534,561 | 1,534,561 | ||||||
| Deferred leasing costs and intangible assets, net | 540,264 | 852,872 | ||||||
| Assets held for sale ($269,145 and $49,498 at fair value, respectively) | 941,258 | 781,630 | ||||||
| Other assets ($33,558 and $10,152 at fair value, respectively) | 503,317 | 444,968 | ||||||
| Due from affiliates | 45,779 | 51,518 | ||||||
| Total assets | $ | 22,215,249 | $ | 24,785,650 | ||||
| Liabilities | ||||||||
| Debt, net ($0 and $44,542 at fair value, respectively) | $ | 10,039,957 | $ | 10,827,810 | ||||
| Accrued and other liabilities ($141,711 and $212,267 at fair value, respectively) | 707,921 | 898,161 | ||||||
| Intangible liabilities, net | 159,386 | 191,109 | ||||||
| Liabilities related to assets held for sale | 68,217 | 273,298 | ||||||
| Due to affiliates ($0 and $20,650 at fair value, respectively) | — | 23,534 | ||||||
| Dividends and distributions payable | 84,013 | 188,202 | ||||||
| Total liabilities | 11,059,494 | 12,402,114 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interests | 9,385 | 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; 483,347 and 542,599 shares issued and outstanding, respectively | 4,834 | 5,426 | ||||||
| Class B, 1,000 shares authorized; 734 and 736 shares issued and outstanding, respectively | 7 | 7 | ||||||
| Additional paid-in capital | 7,598,019 | 7,913,622 | ||||||
| Distributions in excess of earnings | (2,018,302 | ) | (1,165,412 | ) | ||||
| Accumulated other comprehensive income | 13,999 | 47,316 | ||||||
| Total stockholders’ equity | 7,006,052 | 8,407,925 | ||||||
| Noncontrolling interests in investment entities | 3,779,728 | 3,539,072 | ||||||
| Noncontrolling interests in Operating Company | 360,590 | 402,395 | ||||||
| Total equity | 11,146,370 | 12,349,392 | ||||||
| Total liabilities, redeemable noncontrolling interests and equity | $ | 22,215,249 | $ | 24,785,650 | ||||
|
COLONY CAPITAL, INC. |
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|
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
|
(In thousands, except per share data) |
||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenues | ||||||||||||||||
| Property operating income | $ | 534,391 | $ | 572,787 | $ | 2,247,740 | $ | 2,113,837 | ||||||||
| Interest income | 47,340 | 83,339 | 215,367 | 416,625 | ||||||||||||
| Fee income | 40,000 | 53,527 | 151,821 | 220,789 | ||||||||||||
| Other income | 12,513 | 10,691 | 50,348 | 45,483 | ||||||||||||
| Total revenues | 634,244 | 720,344 | 2,665,276 | 2,796,734 | ||||||||||||
| Expenses | ||||||||||||||||
| Property operating expense | 299,420 | 311,437 | 1,233,659 | 1,113,509 | ||||||||||||
| Interest expense | 148,236 | 156,230 | 595,551 | 574,822 | ||||||||||||
| Investment and servicing expense | 11,699 | 23,629 | 67,420 | 67,597 | ||||||||||||
| Transaction costs | 3,681 | 1,443 | 7,266 | 95,859 | ||||||||||||
| Placement fees | 1,372 | — | 7,849 | 2,474 | ||||||||||||
| Depreciation and amortization | 144,495 | 164,554 | 572,406 | 617,779 | ||||||||||||
| Provision for loan loss | 15,901 | 6,834 | 43,034 | 19,741 | ||||||||||||
| Impairment loss | 288,494 | 375,007 | 588,223 | 420,360 | ||||||||||||
| Compensation expense | ||||||||||||||||
| Cash and equity-based compensation | 73,669 | 89,286 | 225,038 | 346,885 | ||||||||||||
| Carried interest and incentive fee compensation | 6,794 | — | 12,181 | — | ||||||||||||
| Administrative expenses | 24,362 | 30,895 | 97,000 | 110,982 | ||||||||||||
| Total expenses | 1,018,123 | 1,159,315 | 3,449,627 | 3,370,008 | ||||||||||||
| Other income (loss) | ||||||||||||||||
| Gain on sale of real estate assets | 70,965 | 40,669 | 167,231 | 137,370 | ||||||||||||
| Other gain (loss), net | (82,025 | ) | (18,523 | ) | 51,706 | (25,814 | ) | |||||||||
| Equity method earnings (losses) | (43,872 | ) | 31,318 | (9,401 | ) | 285,151 | ||||||||||
| Equity method earnings—carried interest | 6,494 | — | 19,961 | — | ||||||||||||
| Loss before income taxes | (432,317 | ) | (385,507 | ) | (554,854 | ) | (176,567 | ) | ||||||||
| Income tax benefit | 24,622 | 91,409 | 59,781 | 98,399 | ||||||||||||
| Loss from continuing operations | (407,695 | ) | (294,098 | ) | (495,073 | ) | (78,168 | ) | ||||||||
| Income (loss) from discontinued operations | — | (486 | ) | (102 | ) | 13,555 | ||||||||||
| Net loss | (407,695 | ) | (294,584 | ) | (495,175 | ) | (64,613 | ) | ||||||||
| Net income (loss) attributable to noncontrolling interests: | ||||||||||||||||
| Redeemable noncontrolling interests | (5,750 | ) | 20,528 | (3,708 | ) | 23,543 | ||||||||||
| Investment entities | (6,523 | ) | 42,231 | 67,994 | 129,996 | |||||||||||
| Operating Company | (25,345 | ) | (21,605 | ) | (39,854 | ) | (20,261 | ) | ||||||||
| Net loss attributable to Colony Capital, Inc. | (370,077 | ) | (335,738 | ) | (519,607 | ) | (197,891 | ) | ||||||||
| Preferred stock redemption | — | — | (3,995 | ) | 4,530 | |||||||||||
| Preferred stock dividends | 27,137 | 32,344 | 117,097 | 130,672 | ||||||||||||
| Net loss attributable to common stockholders | $ | (397,214 | ) | $ | (368,082 | ) | $ | (632,709 | ) | $ | (333,093 | ) | ||||
| Basic loss per share | ||||||||||||||||
| Loss from continuing operations per basic common share | $ | (0.82 | ) | $ | (0.69 | ) | $ | (1.28 | ) | $ | (0.66 | ) | ||||
| Net loss per basic common share | $ | (0.82 | ) | $ | (0.69 | ) | $ | (1.28 | ) | $ | (0.64 | ) | ||||
| Diluted loss per share | ||||||||||||||||
| Loss from continuing operations per diluted common share | $ | (0.82 | ) | $ | (0.69 | ) | $ | (1.28 | ) | $ | (0.66 | ) | ||||
| Net loss per diluted common share | $ | (0.82 | ) | $ | (0.69 | ) | $ | (1.28 | ) | $ | (0.64 | ) | ||||
| Weighted average number of shares | ||||||||||||||||
| Basic | 484,503 | 536,583 | 496,993 | 532,600 | ||||||||||||
| Diluted | 484,503 | 536,583 | 496,993 | 532,600 | ||||||||||||
|
COLONY CAPITAL, INC. |
||||||||
|
FUNDS FROM OPERATIONS AND CORE FUNDS FROM OPERATIONS |
||||||||
|
(In thousands, except per share data) |
||||||||
|
(Unaudited) |
||||||||
|
Three Months Ended |
Year Ended |
|||||||
| Net loss attributable to common stockholders | $ | (397,214 | ) | $ | (632,709 | ) | ||
| Adjustments for FFO attributable to common interests in Operating Company and common stockholders: | ||||||||
| Net loss attributable to noncontrolling common interests in Operating Company | (25,345 | ) | (39,854 | ) | ||||
| Real estate depreciation and amortization | 143,456 | 581,264 | ||||||
| Impairment of real estate | 279,233 | 382,290 | ||||||
| Gain from sales of real estate | (86,269 | ) | (190,376 | ) | ||||
| Less: Adjustments attributable to noncontrolling interests in investment entities | (85,212 | ) | (202,405 | ) | ||||
| FFO attributable to common interests in Operating Company and common stockholders | (171,351 | ) | $ | (101,790 | ) | |||
| 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) | 57,953 | 111,701 | ||||||
| Gains and losses from sales of businesses within the Investment Management segment and impairment write-downs associated with the Investment Management segment | 36,125 | 63,214 | ||||||
|
CLNC Core Earnings & NRE Cash Available for Distribution adjustments (2) |
10,308 | 18,451 | ||||||
|
Equity-based compensation expense |
12,860 | 44,788 | ||||||
| Straight-line rent revenue and expense | (6,146 | ) | (21,920 | ) | ||||
| Change in fair value of contingent consideration | — | (1,730 | ) | |||||
| Amortization of acquired above- and below-market lease values, net | (2,526 | ) | (6,909 | ) | ||||
| Amortization of deferred financing costs and debt premiums and discounts | 19,709 | 82,006 | ||||||
| Unrealized fair value losses and foreign currency remeasurements | 74,446 | (34,278 | ) | |||||
| Acquisition and merger-related transaction costs | 3,486 | 19,265 | ||||||
| Merger integration and restructuring costs (3) | 15,193 | 31,974 | ||||||
| Amortization and impairment of investment management intangibles | 19,736 | 246,286 | ||||||
| Non-real estate depreciation and amortization | 1,663 | 8,430 | ||||||
| Amortization of gain on remeasurement of consolidated investment entities | (219 | ) | 5,624 | |||||
| Deferred tax benefit, net | (22,095 | ) | (66,752 | ) | ||||
| Preferred share redemption gain | — | (3,995 | ) | |||||
| Less: Adjustments attributable to noncontrolling interests in investment entities | (26,622 | ) | (61,048 | ) | ||||
| Core FFO attributable to common interests in Operating Company and common stockholders | $ | 22,520 | $ | 333,317 | ||||
| FFO per common share / common OP unit (4) | $ | (0.33 | ) | $ | (0.19 | ) | ||
| FFO per common share / common OP unit—diluted (4)(6) | $ | (0.33 | ) | $ | (0.19 | ) | ||
| Core FFO per common share / common OP unit (4) | $ | 0.04 | $ | 0.62 | ||||
| Core FFO per common share / common OP unit—diluted (4)(5)(6) | $ | 0.04 | $ | 0.62 | ||||
| Weighted average number of common OP units outstanding used for FFO and Core FFO per common share and OP unit (4) | 522,061 | 534,142 | ||||||
| Weighted average number of common OP units outstanding used for FFO per common share and OP unit—diluted (4)(6) | 522,061 | 534,142 | ||||||
| Weighted average number of common OP units outstanding used for Core FFO per common share and OP unit—diluted (4)(5)(6) | 522,508 | 534,714 | ||||||
| __________ | ||
| (1) | For the three months ended December 31, 2018, net of $25.4 million consolidated or $13.0 million CLNY OP share and for the twelve months ended December 31, 2018, net of $65.7 million consolidated or $43.7 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) | Represents adjustments to align the Company’s Core FFO with CLNC’s definition of Core Earnings and NRE’s definition of Cash Available for Distribution (“CAD”) to reflect the Company’s percentage interest in the respective company’s earnings. These adjustments include provisions for loan losses, realized gains and losses plus other differences that are included/excluded in CLNC’s core earnings and NRE’s CAD. | |
| (3) | Merger integration and restructuring costs represent costs and charges incurred during the integration of Colony, NSAM and NRF and from the corporate restructuring and reorganization plan. These integration and restructuring 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 and restructuring and reorganization plan. The majority of these costs consist of severance, employee costs of those separated or scheduled for separation, system integration and lease terminations. | |
| (4) | Calculated based on weighted average shares outstanding including participating securities and assuming the exchange of all common OP units outstanding for common shares. | |
| (5) | Included in the calculation of diluted Core FFO per share for the three months and twelve months ended December 31, 2018, are 446,600 and 571,500, respectively, weighted average shares of non-participating restricted stock. | |
| (6) | For the three and twelve months ended December 31, 2018, excluded in the calculation of diluted FFO and Core FFO per share is the effect of adding back interest expense associated with convertible senior notes, weighted average dilutive common share equivalents for the assumed conversion of the convertible senior notes and weighted average performance stock units, which are subject to both a service condition and market condition, as the effect of including such interest expense, common share equivalents and performance stock units would be antidilutive. | |
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
| Three Months Ended December 31, 2018 | ||||||||||||
|
(In thousands) |
Healthcare | Industrial | Hospitality | |||||||||
| Total revenues | $ | 146,534 | $ | 75,824 | $ | 199,974 | ||||||
| Straight-line rent revenue and amortization of above- and below-market lease intangibles | (4,186 | ) | (3,213 | ) | (6 | ) | ||||||
| Interest income | — | (78 | ) | — | ||||||||
| Property operating expenses (1) | (67,919 | ) | (20,300 | ) | (137,597 | ) | ||||||
| Compensation and administrative expense (1) | — | (946 | ) | — | ||||||||
| NOI or EBITDA | $ | 74,429 | $ | 51,287 | $ | 62,371 | ||||||
| _________ | ||
| (1) |
For healthcare and hospitality, property operating expenses include property management fees paid to third parties. For industrial, there are direct costs of managing the portfolio which are included in compensation expense. |
|
| Three Months Ended December 31, 2018 | ||||||||||||
|
(In thousands) |
Healthcare | Industrial | Hospitality | |||||||||
| Income (loss) from continuing operations | $ | (235,851 | ) | $ | 9,464 | $ | (18,846 | ) | ||||
| Adjustments: | ||||||||||||
| Straight-line rent revenue and amortization of above- and below-market lease intangibles | (4,186 | ) | (3,213 | ) | (6 | ) | ||||||
| Interest income | — | (78 | ) | — | ||||||||
| Interest expense | 51,158 | 10,795 | 40,894 | |||||||||
| Transaction, investment and servicing costs | 2,041 | 132 | 1,384 | |||||||||
| Depreciation and amortization | 41,336 | 33,174 | 36,643 | |||||||||
| Impairment loss | 212,036 | — | 10,604 | |||||||||
| Compensation and administrative expense | 3,145 | 4,247 | 2,471 | |||||||||
| Gain on sale of real estate | — | (3,236 | ) | — | ||||||||
| Other loss, net | 2,142 | — | 32 | |||||||||
| Income tax (benefit) expense | 2,608 | 2 | (10,805 | ) | ||||||||
| NOI or EBITDA | $ | 74,429 | $ | 51,287 | $ | 62,371 | ||||||
The following table summarizes fourth quarter 2018 income (loss) from continuing operations by segment:
| (In thousands) |
Income (Loss) From |
|||||||
| Healthcare | $ | (235,851 | ) | |||||
| Industrial | 9,464 | |||||||
| Hospitality | (18,846 | ) | ||||||
| CLNC | (47,645 | ) | ||||||
| Other Equity and Debt | 50,533 | |||||||
| Investment Management | (13,053 | ) | ||||||
| Amounts Not Allocated to Segments | (152,297 | ) | ||||||
| Total Consolidated | $ | (407,695 | ) | |||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190301005124/en/
Source:
Investor Contacts:
Addo Investor Relations
Lasse Glassen
310-829-5400
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