|
(Mark One)
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended March 31, 2017
|
|
OR
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
Maryland
(State or other jurisdiction of
incorporation or organization)
|
|
95-6881527
(I.R.S. Employer
Identification Number)
|
1114 Avenue of the Americas, 39
th
Floor
|
|
|
New York, NY
(Address of principal executive offices)
|
|
10036
(Zip code)
|
Large accelerated filer
ý
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
|
|
Page
|
|
||
|
||
|
|
|
|
||
|
||
|
||
|
For the Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues:
|
|
|
|
||||
Operating lease income
|
$
|
52,591
|
|
|
$
|
54,937
|
|
Interest income
|
29,058
|
|
|
33,219
|
|
||
Other income
|
11,864
|
|
|
11,541
|
|
||
Land development revenue
|
20,050
|
|
|
14,947
|
|
||
Total revenues
|
113,563
|
|
|
114,644
|
|
||
Costs and expenses:
|
|
|
|
||||
Interest expense
|
51,193
|
|
|
57,021
|
|
||
Real estate expense
|
35,741
|
|
|
34,305
|
|
||
Land development cost of sales
|
15,910
|
|
|
11,575
|
|
||
Depreciation and amortization
|
13,067
|
|
|
14,708
|
|
||
General and administrative
|
25,173
|
|
|
23,102
|
|
||
(Recovery of) provision for loan losses
|
(4,928
|
)
|
|
1,506
|
|
||
Impairment of assets
|
4,413
|
|
|
—
|
|
||
Other expense
|
1,869
|
|
|
740
|
|
||
Total costs and expenses
|
142,438
|
|
|
142,957
|
|
||
Income (loss) before earnings from equity method investments and other items
|
(28,875
|
)
|
|
(28,313
|
)
|
||
Loss on early extinguishment of debt, net
|
(210
|
)
|
|
(125
|
)
|
||
Earnings from equity method investments
|
5,702
|
|
|
8,267
|
|
||
Income (loss) from operations before income taxes
|
(23,383
|
)
|
|
(20,171
|
)
|
||
Income tax (expense) benefit
|
(607
|
)
|
|
414
|
|
||
Income (loss) from operations
|
(23,990
|
)
|
|
(19,757
|
)
|
||
Income from sales of real estate
|
8,618
|
|
|
10,458
|
|
||
Net income (loss)
|
(15,372
|
)
|
|
(9,299
|
)
|
||
Net (income) loss attributable to noncontrolling interests
|
1,100
|
|
|
942
|
|
||
Net income (loss) attributable to iStar Inc.
|
(14,272
|
)
|
|
(8,357
|
)
|
||
Preferred dividends
|
(12,830
|
)
|
|
(12,830
|
)
|
||
Net income (loss) allocable to common shareholders
|
$
|
(27,102
|
)
|
|
$
|
(21,187
|
)
|
Per common share data:
|
|
|
|
||||
Income (loss) attributable to iStar Inc. from operations:
|
|
|
|
||||
Basic and diluted
|
$
|
(0.38
|
)
|
|
$
|
(0.27
|
)
|
Net income (loss) attributable to iStar Inc.:
|
|
|
|
||||
Basic and diluted
|
$
|
(0.38
|
)
|
|
$
|
(0.27
|
)
|
Weighted average number of common shares:
|
|
|
|
||||
Basic and diluted
|
72,065
|
|
|
77,060
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net income (loss)
|
$
|
(15,372
|
)
|
|
$
|
(9,299
|
)
|
Other comprehensive income (loss):
|
|
|
|
||||
Reclassification of (gains)/losses on cash flow hedges into earnings upon realization
(1)
|
122
|
|
|
257
|
|
||
Unrealized gains/(losses) on available-for-sale securities
|
(17
|
)
|
|
19
|
|
||
Unrealized gains/(losses) on cash flow hedges
|
540
|
|
|
(962
|
)
|
||
Unrealized gains/(losses) on cumulative translation adjustment
|
(401
|
)
|
|
(40
|
)
|
||
Other comprehensive income (loss)
|
244
|
|
|
(726
|
)
|
||
Comprehensive income (loss)
|
(15,128
|
)
|
|
(10,025
|
)
|
||
Comprehensive (income) loss attributable to noncontrolling interests
|
1,100
|
|
|
942
|
|
||
Comprehensive income (loss) attributable to iStar Inc.
|
$
|
(14,028
|
)
|
|
$
|
(9,083
|
)
|
(1)
|
Reclassified to "Interest expense" in the Company's consolidated statements of operations are
$30
and
$160
for the
three months
ended
March 31, 2017
and 2016, respectively. Reclassified to "Earnings from equity method investments" in the Company's consolidated statements of operations are
$92
and
$97
for the
three months
ended
March 31, 2017
and 2016, respectively.
|
|
|
iStar Inc. Shareholders' Equity
|
|
|
|
|
||||||||||||||||||||||||||
|
|
Preferred
Stock
(1)
|
|
Preferred Stock Series J
(1)
|
|
Common
Stock at
Par
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
(Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||
Balance as of December 31, 2016
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
72
|
|
|
$
|
3,602,172
|
|
|
$
|
(2,581,488
|
)
|
|
$
|
(4,218
|
)
|
|
$
|
43,120
|
|
|
$
|
1,059,684
|
|
Dividends declared—preferred
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,830
|
)
|
|
—
|
|
|
—
|
|
|
(12,830
|
)
|
||||||||
Issuance of stock/restricted stock unit amortization, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,237
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,237
|
|
||||||||
Net income (loss) for the period
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,272
|
)
|
|
—
|
|
|
241
|
|
|
(14,031
|
)
|
||||||||
Change in accumulated other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
244
|
|
|
—
|
|
|
244
|
|
||||||||
Change in additional paid in capital attributable to redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
||||||||
Balance as of March 31, 2017
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
72
|
|
|
$
|
3,603,586
|
|
|
$
|
(2,608,590
|
)
|
|
$
|
(3,974
|
)
|
|
$
|
43,361
|
|
|
$
|
1,034,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance as of December 31, 2015
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
81
|
|
|
$
|
3,689,330
|
|
|
$
|
(2,625,474
|
)
|
|
$
|
(4,851
|
)
|
|
$
|
42,218
|
|
|
$
|
1,101,330
|
|
Dividends declared—preferred
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,830
|
)
|
|
—
|
|
|
—
|
|
|
(12,830
|
)
|
||||||||
Issuance of stock/restricted stock unit amortization, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
604
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
604
|
|
||||||||
Net income (loss) for the period
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,357
|
)
|
|
—
|
|
|
358
|
|
|
(7,999
|
)
|
||||||||
Change in accumulated other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(726
|
)
|
|
—
|
|
|
(726
|
)
|
||||||||
Repurchase of stock
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(58,126
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,132
|
)
|
||||||||
Change in additional paid in capital attributable to redeemable noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
438
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
438
|
|
||||||||
Change in noncontrolling interest
(3)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,292
|
)
|
|
(7,292
|
)
|
||||||||
Balance as of March 31, 2016
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
75
|
|
|
$
|
3,632,246
|
|
|
$
|
(2,646,661
|
)
|
|
$
|
(5,577
|
)
|
|
$
|
35,284
|
|
|
$
|
1,015,393
|
|
(1)
|
Refer to
Note 13
for details on the Company's Preferred Stock.
|
(2)
|
For the
three months
ended
March 31, 2017
and
2016
, net income (loss) shown above excludes
$(1,341)
and
$(1,300)
of net loss attributable to redeemable noncontrolling interests.
|
(3)
|
Includes a payment to acquire a noncontrolling interest (refer to Note 5).
|
|
For the Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(15,372
|
)
|
|
$
|
(9,299
|
)
|
Adjustments to reconcile net income (loss) to cash flows from operating activities:
|
|
|
|
||||
(Recovery of) provision for loan losses
|
(4,928
|
)
|
|
1,506
|
|
||
Impairment of assets
|
4,413
|
|
|
—
|
|
||
Depreciation and amortization
|
13,067
|
|
|
14,708
|
|
||
Non-cash expense for stock-based compensation
|
5,881
|
|
|
4,577
|
|
||
Amortization of discounts/premiums and deferred financing costs on debt obligations, net
|
3,512
|
|
|
4,601
|
|
||
Amortization of discounts/premiums on loans, net
|
(3,184
|
)
|
|
(3,422
|
)
|
||
Deferred interest on loans, net
|
(11,467
|
)
|
|
(12,114
|
)
|
||
Earnings from equity method investments
|
(5,702
|
)
|
|
(8,267
|
)
|
||
Distributions from operations of other investments
|
20,029
|
|
|
26,317
|
|
||
Deferred operating lease income
|
(2,109
|
)
|
|
(2,126
|
)
|
||
Income from sales of real estate
|
(8,618
|
)
|
|
(10,458
|
)
|
||
Land development revenue in excess of cost of sales
|
(4,140
|
)
|
|
(3,372
|
)
|
||
Loss on early extinguishment of debt, net
|
210
|
|
|
125
|
|
||
Debt discount on repayments of debt obligations
|
(267
|
)
|
|
(492
|
)
|
||
Other operating activities, net
|
2,683
|
|
|
1,599
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Changes in accrued interest and operating lease income receivable, net
|
2,214
|
|
|
2,415
|
|
||
Changes in deferred expenses and other assets, net
|
(8,726
|
)
|
|
1,034
|
|
||
Changes in accounts payable, accrued expenses and other liabilities
|
(24,987
|
)
|
|
(23,023
|
)
|
||
Cash flows used in operating activities
|
(37,491
|
)
|
|
(15,691
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Originations and fundings of loans receivable, net
|
(61,605
|
)
|
|
(94,343
|
)
|
||
Capital expenditures on real estate assets
|
(7,781
|
)
|
|
(17,735
|
)
|
||
Capital expenditures on land and development assets
|
(27,604
|
)
|
|
(29,375
|
)
|
||
Repayments of and principal collections on loans receivable and other lending investments, net
|
171,066
|
|
|
73,211
|
|
||
Net proceeds from sales of real estate
|
30,215
|
|
|
35,680
|
|
||
Net proceeds from sales of land and development assets
|
20,923
|
|
|
8,775
|
|
||
Distributions from other investments
|
4,709
|
|
|
7,675
|
|
||
Contributions to other investments
|
(1,813
|
)
|
|
(6,377
|
)
|
||
Changes in restricted cash held in connection with investing activities
|
284
|
|
|
1,660
|
|
||
Other investing activities, net
|
1,801
|
|
|
7,716
|
|
||
Cash flows provided by (used in) investing activities
|
130,195
|
|
|
(13,113
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings from debt obligations
|
854,637
|
|
|
275,000
|
|
||
Repayments and repurchases of debt obligations
|
(353,191
|
)
|
|
(282,755
|
)
|
||
Preferred dividends paid
|
(12,830
|
)
|
|
(12,830
|
)
|
||
Repurchase of stock
|
—
|
|
|
(58,760
|
)
|
||
Payments for deferred financing costs
|
(11,497
|
)
|
|
—
|
|
||
Payments for withholding taxes upon vesting of stock-based compensation
|
(420
|
)
|
|
(1,109
|
)
|
||
Other financing activities, net
|
(661
|
)
|
|
(10,686
|
)
|
||
Cash flows provided by (used in) financing activities
|
476,038
|
|
|
(91,140
|
)
|
||
Effect of exchange rate changes on cash
|
1
|
|
|
24
|
|
||
Changes in cash and cash equivalents
|
568,743
|
|
|
(119,920
|
)
|
||
Cash and cash equivalents at beginning of period
|
328,744
|
|
|
711,101
|
|
||
Cash and cash equivalents at end of period
|
$
|
897,487
|
|
|
$
|
591,181
|
|
Supplemental disclosure of non-cash investing and financing activity:
|
|
|
|
||||
Fundings of loan receivables and loan participations
|
$
|
22,602
|
|
|
$
|
1,905
|
|
Accounts payable for capital expenditures on land and development assets
|
—
|
|
|
3,650
|
|
||
Accounts payable for capital expenditures on real estate assets
|
781
|
|
|
—
|
|
|
Net Lease
(1)
|
|
Operating
Properties
|
|
Total
|
||||||
As of March 31, 2017
|
|
|
|
|
|
||||||
Land, at cost
|
$
|
271,433
|
|
|
$
|
211,054
|
|
|
$
|
482,487
|
|
Buildings and improvements, at cost
|
1,097,049
|
|
|
316,726
|
|
|
1,413,775
|
|
|||
Less: accumulated depreciation
|
(370,168
|
)
|
|
(49,503
|
)
|
|
(419,671
|
)
|
|||
Real estate, net
|
998,314
|
|
|
478,277
|
|
|
1,476,591
|
|
|||
Real estate available and held for sale
(2)
|
—
|
|
|
71,934
|
|
|
71,934
|
|
|||
Total real estate
|
$
|
998,314
|
|
|
$
|
550,211
|
|
|
$
|
1,548,525
|
|
As of December 31, 2016
|
|
|
|
|
|
||||||
Land, at cost
|
$
|
272,666
|
|
|
$
|
211,054
|
|
|
$
|
483,720
|
|
Buildings and improvements, at cost
|
1,111,589
|
|
|
311,283
|
|
|
1,422,872
|
|
|||
Less: accumulated depreciation
|
(368,665
|
)
|
|
(46,175
|
)
|
|
(414,840
|
)
|
|||
Real estate, net
|
1,015,590
|
|
|
476,162
|
|
|
1,491,752
|
|
|||
Real estate available and held for sale
(2)
|
1,284
|
|
|
82,480
|
|
|
83,764
|
|
|||
Total real estate
|
$
|
1,016,874
|
|
|
$
|
558,642
|
|
|
$
|
1,575,516
|
|
(1)
|
In 2014, the Company partnered with a sovereign wealth fund to form a venture to acquire and develop net lease assets (the "Net Lease Venture") and gave a right of first refusal to the Net Lease Venture on all new net lease investments (refer to Note 7 for more information on the Net Lease Venture). The Company is responsible for sourcing new opportunities and managing the Net Lease Venture and its assets in exchange for a promote and management fee.
|
(2)
|
As of
March 31, 2017
and
December 31, 2016
, the Company had
$71.9 million
and
$82.5 million
, respectively, of residential properties available for sale in its operating properties portfolio.
|
|
As of
|
||||||
|
March 31,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Land and land development, at cost
|
$
|
961,907
|
|
|
$
|
952,051
|
|
Less: accumulated depreciation
|
(6,757
|
)
|
|
(6,486
|
)
|
||
Total land and development, net
|
$
|
955,150
|
|
|
$
|
945,565
|
|
|
As of
|
||||||
Type of Investment
|
March 31,
2017 |
|
December 31,
2016 |
||||
Senior mortgages
|
$
|
834,795
|
|
|
$
|
940,738
|
|
Corporate/Partnership loans
|
519,198
|
|
|
490,389
|
|
||
Subordinate mortgages
|
25,242
|
|
|
24,941
|
|
||
Total gross carrying value of loans
|
1,379,235
|
|
|
1,456,068
|
|
||
Reserves for loan losses
|
(79,389
|
)
|
|
(85,545
|
)
|
||
Total loans receivable, net
|
1,299,846
|
|
|
1,370,523
|
|
||
Other lending investments—securities
|
81,381
|
|
|
79,916
|
|
||
Total loans receivable and other lending investments, net
|
$
|
1,381,227
|
|
|
$
|
1,450,439
|
|
|
|
For the Three Months Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Reserve for loan losses at beginning of period
|
|
$
|
85,545
|
|
|
$
|
108,165
|
|
(Recovery of) provision for loan losses
|
|
(4,928
|
)
|
|
1,506
|
|
||
Charge-offs
|
|
(1,228
|
)
|
|
—
|
|
||
Reserve for loan losses at end of period
|
|
$
|
79,389
|
|
|
$
|
109,671
|
|
|
Individually
Evaluated for
Impairment
(1)
|
|
Collectively
Evaluated for
Impairment
(2)
|
|
Total
|
||||||
As of March 31, 2017
|
|
|
|
|
|
||||||
Loans
|
$
|
250,801
|
|
|
$
|
1,135,134
|
|
|
$
|
1,385,935
|
|
Less: Reserve for loan losses
|
(60,989
|
)
|
|
(18,400
|
)
|
|
(79,389
|
)
|
|||
Total
(3)
|
$
|
189,812
|
|
|
$
|
1,116,734
|
|
|
$
|
1,306,546
|
|
As of December 31, 2016
|
|
|
|
|
|
||||||
Loans
|
$
|
253,941
|
|
|
$
|
1,209,062
|
|
|
$
|
1,463,003
|
|
Less: Reserve for loan losses
|
(62,245
|
)
|
|
(23,300
|
)
|
|
(85,545
|
)
|
|||
Total
(3)
|
$
|
191,696
|
|
|
$
|
1,185,762
|
|
|
$
|
1,377,458
|
|
(1)
|
The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net discounts of
$0.7 million
and
$0.4 million
as of
March 31, 2017
and
December 31, 2016
, respectively. The Company's loans individually evaluated for impairment primarily represent loans on non-accrual status and therefore, the unamortized amounts associated with these loans are not currently being amortized into income.
|
(2)
|
The carrying value of these loans include unamortized discounts, premiums, deferred fees and costs totaling net premiums of
$2.9 million
and
$1.9 million
as of
March 31, 2017
and
December 31, 2016
, respectively.
|
(3)
|
The Company's recorded investment in loans as of
March 31, 2017
and
December 31, 2016
includes accrued interest of
$6.7 million
and
$6.9 million
, respectively, which are included in "Accrued interest and operating lease income receivable, net" on the Company's consolidated balance sheets. As of
March 31, 2017
and
December 31, 2016
, excludes
$81.4 million
and
$79.9 million
, respectively, of securities that are evaluated for impairment under ASC 320.
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||||||||||
|
Performing
Loans
|
|
Weighted
Average
Risk Ratings
|
|
Performing
Loans
|
|
Weighted
Average
Risk Ratings
|
||||||
Senior mortgages
|
$
|
756,720
|
|
|
2.31
|
|
|
$
|
859,250
|
|
|
3.12
|
|
Corporate/Partnership loans
|
364,159
|
|
|
3.06
|
|
|
335,677
|
|
|
3.09
|
|
||
Subordinate mortgages
|
14,255
|
|
|
2.46
|
|
|
14,135
|
|
|
3.00
|
|
||
Total
|
$
|
1,135,134
|
|
|
2.55
|
|
|
$
|
1,209,062
|
|
|
3.11
|
|
|
Current
|
|
Less Than
and Equal
to 90 Days
|
|
Greater
Than
90 Days
(1)
|
|
Total
Past Due
|
|
Total
|
||||||||||
As of March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior mortgages
|
$
|
762,720
|
|
|
$
|
—
|
|
|
$
|
76,454
|
|
|
$
|
76,454
|
|
|
$
|
839,174
|
|
Corporate/Partnership loans
|
364,159
|
|
|
—
|
|
|
157,303
|
|
|
157,303
|
|
|
521,462
|
|
|||||
Subordinate mortgages
|
25,299
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,299
|
|
|||||
Total
|
$
|
1,152,178
|
|
|
$
|
—
|
|
|
$
|
233,757
|
|
|
$
|
233,757
|
|
|
$
|
1,385,935
|
|
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior mortgages
|
$
|
868,505
|
|
|
$
|
—
|
|
|
$
|
76,677
|
|
|
$
|
76,677
|
|
|
$
|
945,182
|
|
Corporate/Partnership loans
|
335,677
|
|
|
—
|
|
|
157,146
|
|
|
157,146
|
|
|
492,823
|
|
|||||
Subordinate mortgages
|
24,998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,998
|
|
|||||
Total
|
$
|
1,229,180
|
|
|
$
|
—
|
|
|
$
|
233,823
|
|
|
$
|
233,823
|
|
|
$
|
1,463,003
|
|
(1)
|
As of
March 31, 2017
, the Company had
four
loans which were greater than
90 days
delinquent and were in various stages of resolution, including legal proceedings, environmental concerns and foreclosure-related proceedings, and ranged from
1.0
to
8.0 years
outstanding. As of December 31, 2016, the Company had
four
loans which were greater than
90 days
delinquent and were in various stages of resolution, including legal proceedings, environmental concerns and foreclosure-related proceedings, and ranged from
1.0
to
8.0 years
outstanding.
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
|
Recorded
Investment
|
|
Unpaid
Principal
Balance
|
|
Related
Allowance
|
||||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subordinate mortgages
|
$
|
11,044
|
|
|
$
|
11,027
|
|
|
$
|
—
|
|
|
$
|
10,862
|
|
|
$
|
10,846
|
|
|
$
|
—
|
|
Subtotal
|
11,044
|
|
|
11,027
|
|
|
—
|
|
|
10,862
|
|
|
10,846
|
|
|
—
|
|
||||||
With an allowance recorded:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Senior mortgages
|
82,454
|
|
|
82,571
|
|
|
(48,518
|
)
|
|
85,933
|
|
|
85,780
|
|
|
(49,774
|
)
|
||||||
Corporate/Partnership loans
|
157,303
|
|
|
146,783
|
|
|
(12,471
|
)
|
|
157,146
|
|
|
146,783
|
|
|
(12,471
|
)
|
||||||
Subtotal
|
239,757
|
|
|
229,354
|
|
|
(60,989
|
)
|
|
243,079
|
|
|
232,563
|
|
|
(62,245
|
)
|
||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Senior mortgages
|
82,454
|
|
|
82,571
|
|
|
(48,518
|
)
|
|
85,933
|
|
|
85,780
|
|
|
(49,774
|
)
|
||||||
Corporate/Partnership loans
|
157,303
|
|
|
146,783
|
|
|
(12,471
|
)
|
|
157,146
|
|
|
146,783
|
|
|
(12,471
|
)
|
||||||
Subordinate mortgages
|
11,044
|
|
|
11,027
|
|
|
—
|
|
|
10,862
|
|
|
10,846
|
|
|
—
|
|
||||||
Total
|
$
|
250,801
|
|
|
$
|
240,381
|
|
|
$
|
(60,989
|
)
|
|
$
|
253,941
|
|
|
$
|
243,409
|
|
|
$
|
(62,245
|
)
|
(1)
|
All of the Company's non-accrual loans are considered impaired and included in the table above.
|
|
For the Three Months Ended March 31,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Average
Recorded Investment |
|
Interest
Income Recognized |
|
Average
Recorded Investment |
|
Interest
Income Recognized |
||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
||||||||
Senior mortgages
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,542
|
|
|
$
|
—
|
|
Subordinate mortgages
|
10,953
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Subtotal
|
10,953
|
|
|
—
|
|
|
4,542
|
|
|
—
|
|
||||
With an allowance recorded:
|
|
|
|
|
|
|
|
||||||||
Senior mortgages
|
84,194
|
|
|
—
|
|
|
126,843
|
|
|
—
|
|
||||
Corporate/Partnership loans
|
157,224
|
|
|
—
|
|
|
5,571
|
|
|
—
|
|
||||
Subtotal
|
241,418
|
|
|
—
|
|
|
132,414
|
|
|
—
|
|
||||
Total:
|
|
|
|
|
|
|
|
||||||||
Senior mortgages
|
84,194
|
|
|
—
|
|
|
131,385
|
|
|
—
|
|
||||
Corporate/Partnership loans
|
157,224
|
|
|
—
|
|
|
5,571
|
|
|
—
|
|
||||
Subordinate mortgages
|
10,953
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
252,371
|
|
|
$
|
—
|
|
|
$
|
136,956
|
|
|
$
|
—
|
|
|
Face Value
|
|
Amortized Cost Basis
|
|
Net Unrealized Gain (Loss)
|
|
Estimated Fair Value
|
|
Net Carrying Value
|
||||||||||
As of March 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Municipal debt securities
|
$
|
21,230
|
|
|
$
|
21,230
|
|
|
$
|
409
|
|
|
$
|
21,639
|
|
|
$
|
21,639
|
|
Held-to-Maturity Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities
|
59,867
|
|
|
59,742
|
|
|
2,321
|
|
|
62,063
|
|
|
59,742
|
|
|||||
Total
|
$
|
81,097
|
|
|
$
|
80,972
|
|
|
$
|
2,730
|
|
|
$
|
83,702
|
|
|
$
|
81,381
|
|
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Available-for-Sale Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Municipal debt securities
|
$
|
21,240
|
|
|
$
|
21,240
|
|
|
$
|
426
|
|
|
$
|
21,666
|
|
|
$
|
21,666
|
|
Held-to-Maturity Securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt securities
|
58,454
|
|
|
58,250
|
|
|
2,753
|
|
|
61,003
|
|
|
58,250
|
|
|||||
Total
|
$
|
79,694
|
|
|
$
|
79,490
|
|
|
$
|
3,179
|
|
|
$
|
82,669
|
|
|
$
|
79,916
|
|
|
|
|
Equity in Earnings (Losses)
|
||||||||||||
|
Carrying Value as of
|
|
For the Three Months Ended March 31,
|
||||||||||||
|
March 31, 2017
|
|
December 31, 2016
|
|
2017
|
|
2016
|
||||||||
Real estate equity investments
|
|
|
|
|
|
|
|
||||||||
iStar Net Lease I LLC ("Net Lease Venture")
|
$
|
92,024
|
|
|
$
|
92,669
|
|
|
$
|
981
|
|
|
$
|
946
|
|
Marina Palms, LLC ("Marina Palms")
|
19,439
|
|
|
35,185
|
|
|
3,117
|
|
|
8,221
|
|
||||
Other real estate equity investments
|
53,230
|
|
|
53,202
|
|
|
1,357
|
|
|
(1,702
|
)
|
||||
Subtotal
|
164,693
|
|
|
181,056
|
|
|
5,455
|
|
|
7,465
|
|
||||
Other strategic investments
(1)
|
32,866
|
|
|
33,350
|
|
|
247
|
|
|
802
|
|
||||
Total
|
$
|
197,559
|
|
|
$
|
214,406
|
|
|
$
|
5,702
|
|
|
$
|
8,267
|
|
(1)
|
In conjunction with the sale of the Company's interests in Oak Hill Advisors, L.P. in 2011, the Company retained a share of the carried interest related to various funds. During the
three months
ended March 31, 2016, the Company recognized
$3.2 million
of carried interest income.
|
|
Revenues
|
|
Expenses
|
|
Net Income Attributable to Parent Entities
|
||||||
For the Three Months Ended March 31, 2017
|
|
|
|
|
|
||||||
Marina Palms
|
$
|
23,669
|
|
|
$
|
(14,911
|
)
|
|
$
|
8,758
|
|
Net Lease Venture
|
9,621
|
|
|
(7,588
|
)
|
|
1,890
|
|
|||
|
|
|
|
|
|
||||||
For the Three Months Ended March 31, 2016
|
|
|
|
|
|
||||||
Marina Palms
|
$
|
50,628
|
|
|
$
|
(25,511
|
)
|
|
$
|
25,117
|
|
Net Lease Venture
|
7,830
|
|
|
(5,863
|
)
|
|
1,823
|
|
|
As of
|
||||||
|
March 31, 2017
|
|
December 31, 2016
|
||||
Intangible assets, net
(1)
|
$
|
61,723
|
|
|
$
|
63,098
|
|
Other receivables
(2)
|
51,047
|
|
|
52,820
|
|
||
Other assets
|
47,877
|
|
|
39,591
|
|
||
Restricted cash
|
26,290
|
|
|
25,883
|
|
||
Leasing costs, net
(3)
|
11,812
|
|
|
12,566
|
|
||
Corporate furniture, fixtures and equipment, net
(4)
|
5,399
|
|
|
5,691
|
|
||
Deferred expenses and other assets, net
|
$
|
204,148
|
|
|
$
|
199,649
|
|
(1)
|
Intangible assets, net includes above market and in-place lease assets and lease incentives related to the acquisition of real estate assets. Accumulated amortization on intangible assets, net was
$33.2 million
and
$32.6 million
as of
March 31, 2017
and
December 31, 2016
, respectively. The amortization of above market leases and lease incentive assets decreased operating lease income in the Company's consolidated statements of operations by
$0.9 million
and
$1.2 million
for the
three months
ended
March 31, 2017
and 2016, respectively. These intangible lease assets are amortized over the term of the lease. The amortization expense for in-place leases was
$0.5 million
for the
three months
ended
March 31, 2017
and 2016. These amounts are included in "Depreciation and amortization" in the Company's consolidated statements of operations.
|
(2)
|
As of
March 31, 2017
and
December 31, 2016
, included
$25.8 million
and
$26.0 million
, respectively, of receivables related to the construction and development of an amphitheater.
|
(3)
|
Accumulated amortization of leasing costs was
$6.4 million
and
$6.7 million
as of
March 31, 2017
and
December 31, 2016
, respectively.
|
(4)
|
Accumulated depreciation on corporate furniture, fixtures and equipment was
$9.5 million
and
$9.0 million
as of
March 31, 2017
and
December 31, 2016
, respectively.
|
|
As of
|
||||||
|
March 31, 2017
|
|
December 31, 2016
|
||||
Other liabilities
(1)
|
$
|
79,398
|
|
|
$
|
75,993
|
|
Accrued expenses
(2)
|
62,139
|
|
|
72,693
|
|
||
Accrued interest payable
|
41,901
|
|
|
54,033
|
|
||
Intangible liabilities, net
(3)
|
8,602
|
|
|
8,851
|
|
||
Accounts payable, accrued expenses and other liabilities
|
$
|
192,040
|
|
|
$
|
211,570
|
|
(1)
|
As of
March 31, 2017
and
December 31, 2016
, "Other liabilities" includes
$24.0 million
related to profit sharing arrangements with developers for certain properties sold. As of
March 31, 2017
and
December 31, 2016
, includes
$1.4 million
and
$1.2 million
, respectively, associated with "Real estate available and held for sale" on the Company's consolidated balance sheets. As of
March 31, 2017
and
December 31, 2016
, "Other liabilities" also includes
$7.8 million
and
$8.5 million
, respectively, related to tax increment financing bonds which were issued by government entities to fund development within
two
of the Company's land projects. The amount represents tax assessments associated with each project, which will decrease as the Company sells units.
|
(2)
|
As of
March 31, 2017
and
December 31, 2016
, accrued expenses includes
$2.4 million
and
$1.7 million
, respectively, associated with "Real estate available and held for sale" on the Company's consolidated balance sheets.
|
(3)
|
Intangible liabilities, net includes below market lease liabilities related to the acquisition of real estate assets. Accumulated amortization on below market leases was
$6.7 million
and
$6.4 million
as of
March 31, 2017
and
December 31, 2016
, respectively. The amortization of below market leases increased operating lease income in the Company's consolidated statements of operations by
$0.3 million
for the
three months
ended
March 31, 2017
and 2016.
|
|
As of
|
||||||
|
March 31, 2017
|
|
December 31, 2016
|
||||
Deferred tax assets (liabilities)
|
$
|
70,806
|
|
|
$
|
66,498
|
|
Valuation allowance
|
(70,806
|
)
|
|
(66,498
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Carrying Value as of
|
||||||
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Loan participations payable
(1)
|
|
$
|
182,853
|
|
|
$
|
160,251
|
|
Debt discounts and deferred financing costs, net
|
|
(766
|
)
|
|
(930
|
)
|
||
Total loan participations payable, net
|
|
$
|
182,087
|
|
|
$
|
159,321
|
|
(1)
|
As of
March 31, 2017
, the Company had
three
loan participations payable with a weighted average interest rate of
5.2%
. As of December 31, 2016, the Company had
three
loan participations payable with a weighted average interest rate of
4.8%
.
|
|
Carrying Value as of
|
|
Stated
Interest Rates
|
|
Scheduled
Maturity Date
|
|||||||
|
March 31, 2017
|
|
December 31, 2016
|
|
|
|||||||
Secured credit facilities and mortgages:
|
|
|
|
|
|
|
|
|||||
2015 $250 Million Secured Revolving Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
|
LIBOR + 2.75%
|
|
(1)
|
March 2018
|
2016 Senior Secured Credit Facility
|
500,000
|
|
|
498,648
|
|
|
LIBOR + 3.75%
|
|
(2)
|
July 2020
|
||
2017 Secured Financing
|
227,000
|
|
|
—
|
|
|
3.795
|
%
|
(3)
|
April 2027
|
||
Mortgages collateralized by net lease assets
|
247,535
|
|
|
249,987
|
|
|
3.875% - 7.26%
|
|
(4)
|
Various through 2032
|
||
Total secured credit facilities and mortgages
|
974,535
|
|
|
748,635
|
|
|
|
|
|
|
||
Unsecured notes:
|
|
|
|
|
|
|
|
|||||
5.85% senior notes
|
—
|
|
|
99,722
|
|
|
5.85
|
%
|
|
—
|
||
9.00% senior notes
|
275,000
|
|
|
275,000
|
|
|
9.00
|
%
|
|
June 2017
|
||
4.00% senior notes
(5)
|
550,000
|
|
|
550,000
|
|
|
4.00
|
%
|
|
November 2017
|
||
7.125% senior notes
|
300,000
|
|
|
300,000
|
|
|
7.125
|
%
|
|
February 2018
|
||
4.875% senior notes
(6)
|
300,000
|
|
|
300,000
|
|
|
4.875
|
%
|
|
July 2018
|
||
5.00% senior notes
(7)
|
770,000
|
|
|
770,000
|
|
|
5.00
|
%
|
|
July 2019
|
||
6.50% senior notes
(8)
|
275,000
|
|
|
275,000
|
|
|
6.50
|
%
|
|
July 2021
|
||
6.00% senior notes
(9)
|
375,000
|
|
|
—
|
|
|
6.00
|
%
|
|
April 2022
|
||
Total unsecured notes
|
2,845,000
|
|
|
2,569,722
|
|
|
|
|
|
|
||
Other debt obligations:
|
|
|
|
|
|
|
|
|||||
Trust preferred securities
|
100,000
|
|
|
100,000
|
|
|
LIBOR + 1.50%
|
|
|
October 2035
|
||
Total debt obligations
|
3,919,535
|
|
|
3,418,357
|
|
|
|
|
|
|
||
Debt discounts and deferred financing costs, net
|
(37,140
|
)
|
|
(28,449
|
)
|
|
|
|
|
|
||
Total debt obligations, net
(10)
|
$
|
3,882,395
|
|
|
$
|
3,389,908
|
|
|
|
|
|
|
(1)
|
The loan bears interest at the Company's election of either (i) a base rate, which is the greater of (a) prime, (b) federal funds plus
0.5%
or (c) LIBOR plus
1.0%
and subject to a margin ranging from
1.25%
to
1.75%
, or (ii) LIBOR subject to a margin ranging from
2.25%
to
2.75%
. At maturity, the Company may convert outstanding borrowings to a
one year
term loan which matures in quarterly installments through March 2019.
|
(2)
|
The loan bears interest at the Company's election of either (i) a base rate, which is the greater of (a) prime, (b) federal funds plus
0.5%
or (c) LIBOR plus
1.0%
and subject to a margin of
2.75%
or (ii) LIBOR subject to a margin of
3.75%
with a minimum LIBOR rate of
1.0%
.
|
(3)
|
The Company entered into a
$200 million
notional rate lock swap, bringing the effective interest rate down from
3.795%
to
3.773%
.
|
(4)
|
As of
March 31, 2017
and
December 31, 2016
, includes a loan with a floating rate of LIBOR plus
2.0%
. As of
March 31, 2017
, the weighted average interest rate of these loans is
5.1%
.
|
(5)
|
The Company can prepay these senior notes without penalty beginning August 1, 2017.
|
(6)
|
The Company can prepay these senior notes without penalty beginning January 1, 2018.
|
(7)
|
The Company can prepay these senior notes without penalty beginning July 1, 2018.
|
(8)
|
The Company can prepay these senior notes without penalty beginning July 1, 2020.
|
(9)
|
The Company can prepay these senior notes without penalty beginning April 1, 2021.
|
(10)
|
The Company capitalized interest relating to development activities of
$2.0 million
and
$1.4 million
during the
three months
ended
March 31, 2017
and 2016, respectively.
|
|
Unsecured Debt
|
|
Secured Debt
|
|
Total
|
||||||
2017 (remaining nine months)
|
$
|
825,000
|
|
|
$
|
—
|
|
|
$
|
825,000
|
|
2018
|
600,000
|
|
|
10,648
|
|
|
610,648
|
|
|||
2019
|
770,000
|
|
|
28,770
|
|
|
798,770
|
|
|||
2020
|
—
|
|
|
500,000
|
|
|
500,000
|
|
|||
2021
|
275,000
|
|
|
119,072
|
|
|
394,072
|
|
|||
Thereafter
|
475,000
|
|
|
316,045
|
|
|
791,045
|
|
|||
Total principal maturities
|
2,945,000
|
|
|
974,535
|
|
|
3,919,535
|
|
|||
Unamortized discounts and deferred financing costs, net
|
(21,148
|
)
|
|
(15,992
|
)
|
|
(37,140
|
)
|
|||
Total debt obligations, net
|
$
|
2,923,852
|
|
|
$
|
958,543
|
|
|
$
|
3,882,395
|
|
(1)
|
The Company has
$825.0 million
of debt obligations maturing in
two
separate tranches during 2017, and
$310.6 million
of other debt obligations maturing before the end of May 2018, as listed in the debt obligations table above. The Company's plans to satisfy these obligations primarily consist of accessing the debt and/or equity markets to obtain capital to satisfy the maturing obligations. In addition, management intends to execute on its business strategy of disposing of assets and selling interests in business lines as well as collecting loan repayments from borrowers to further generate available liquidity. Should these sources of capital not be sufficiently available, the Company will slow its pace of making new investments and will need to identify alternative sources of capital. As of
May 3, 2017
, the Company had approximately
$1.2 billion
of cash and available capacity under existing borrowing arrangements.
|
|
As of
|
||||||||||||||
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Encumbered Assets
|
|
Unencumbered Assets
|
|
Encumbered Assets
|
|
Unencumbered Assets
|
||||||||
Real estate, net
|
$
|
1,005,826
|
|
|
$
|
470,765
|
|
|
$
|
881,212
|
|
|
$
|
610,540
|
|
Real estate available and held for sale
|
—
|
|
|
71,934
|
|
|
—
|
|
|
83,764
|
|
||||
Land and development, net
|
35,165
|
|
|
919,985
|
|
|
35,165
|
|
|
910,400
|
|
||||
Loans receivable and other lending investments, net
(1)(2)
|
137,293
|
|
|
1,080,448
|
|
|
172,581
|
|
|
1,142,050
|
|
||||
Other investments
|
—
|
|
|
197,559
|
|
|
—
|
|
|
214,406
|
|
||||
Cash and other assets
|
—
|
|
|
1,212,055
|
|
|
—
|
|
|
639,588
|
|
||||
Total
|
$
|
1,178,284
|
|
|
$
|
3,952,746
|
|
|
$
|
1,088,958
|
|
|
$
|
3,600,748
|
|
(1)
|
As of
March 31, 2017
and
December 31, 2016
, the amounts presented exclude general reserves for loan losses of
$18.4 million
and
$23.3 million
, respectively.
|
(2)
|
As of
March 31, 2017
and
December 31, 2016
, the amounts presented exclude loan participations of
$181.9 million
and
$159.1 million
, respectively.
|
|
Loans and Other Lending Investments
(1)
|
|
Real Estate
|
|
Other
Investments
|
|
Total
|
||||||||
Performance-Based Commitments
|
$
|
305,862
|
|
|
$
|
9,814
|
|
|
$
|
24,059
|
|
|
$
|
339,735
|
|
Strategic Investments
|
—
|
|
|
—
|
|
|
45,564
|
|
|
45,564
|
|
||||
Total
(2)
|
$
|
305,862
|
|
|
$
|
9,814
|
|
|
$
|
69,623
|
|
|
$
|
385,299
|
|
(1)
|
Excludes
$155.3 million
of commitments on loan participations sold that are not the obligation of the Company.
|
(2)
|
The Company did not have any Discretionary Fundings as of
March 31, 2017
.
|
Derivatives Designated in Hedging Relationships
|
|
Location of Gain (Loss)
Recognized in Income
|
|
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion)
|
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)
|
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings
(Ineffective Portion)
|
||
For the Three Months Ended March 31, 2017
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
Interest Expense
|
|
467
|
|
|
(30
|
)
|
|
N/A
|
Interest rate cap
|
|
Earnings from equity method investments
|
|
(5
|
)
|
|
(5
|
)
|
|
N/A
|
Interest rate swap
|
|
Earnings from equity method investments
|
|
78
|
|
|
(87
|
)
|
|
N/A
|
Foreign exchange contracts
|
|
Earnings from equity method investments
|
|
(299
|
)
|
|
—
|
|
|
N/A
|
For the Three Months Ended March 31, 2016
|
|
|
|
|
|
|
||||
Interest rate cap
|
|
Interest Expense
|
|
—
|
|
|
(185
|
)
|
|
N/A
|
Interest rate cap
|
|
Earnings from equity method investments
|
|
(1
|
)
|
|
—
|
|
|
N/A
|
Interest rate swaps
|
|
Interest Expense
|
|
(502
|
)
|
|
25
|
|
|
N/A
|
Interest rate swap
|
|
Earnings from equity method investments
|
|
(459
|
)
|
|
(97
|
)
|
|
N/A
|
Foreign exchange contracts
|
|
Earnings from equity method investments
|
|
(87
|
)
|
|
—
|
|
|
N/A
|
|
|
|
|
Amount of Gain (Loss)
Recognized in Income
|
||||||
|
|
Location of Gain
(Loss) Recognized in
Income
|
|
For the Three Months Ended March 31,
|
||||||
Derivatives not Designated in Hedging Relationships
|
|
2017
|
|
2016
|
||||||
Interest rate cap
|
|
Other Expense
|
|
$
|
47
|
|
|
$
|
(803
|
)
|
Foreign exchange contracts
|
|
Other Expense
|
|
(125
|
)
|
|
(182
|
)
|
Derivative Type
|
|
Notional
Amount
|
|
Notional
(USD Equivalent)
|
|
Maturity
|
||||
Sells Indian rupee ("INR")/Buys USD Forward
|
|
₨
|
350,000
|
|
|
$
|
5,089
|
|
|
April 2017
|
Derivative Type
|
|
Notional
Amount
|
|
Notional
(USD Equivalent)
|
|
Maturity
|
||||
Sells euro ("EUR")/Buys USD Forward
|
|
€
|
6,300
|
|
|
$
|
6,549
|
|
|
April 2017
|
Sells pound sterling ("GBP")/Buys USD Forward
|
|
£
|
3,400
|
|
|
$
|
4,168
|
|
|
April 2017
|
Derivative Type
|
|
Notional
Amount
|
|
Variable Rate
|
|
Fixed Rate
|
|
Effective Date
|
|
Maturity
|
||
Interest rate swap
|
|
$
|
26,254
|
|
|
LIBOR + 2.00%
|
|
3.47%
|
|
October 2012
|
|
November 2019
|
Derivative Type
|
|
Notional
Amount
|
|
Variable Rate
|
|
Fixed Rate
|
|
Effective Date
|
|
Maturity
|
||
Interest rate cap
|
|
$
|
500,000
|
|
|
LIBOR
|
|
1.00%
|
|
July 2014
|
|
July 2017
|
|
|
|
|
|
|
Cumulative Preferential Cash
Dividends
(1)(2)
|
||||||||||||
Series
|
|
Shares Issued and
Outstanding
(in thousands)
|
|
Par Value
|
|
Liquidation Preference
(3)(4)
|
|
Rate per Annum
|
|
Equivalent to
Fixed Annual
Rate (per share)
|
||||||||
D
|
|
4,000
|
|
|
$
|
0.001
|
|
|
$
|
25.00
|
|
|
8.00
|
%
|
|
$
|
2.00
|
|
E
|
|
5,600
|
|
|
0.001
|
|
|
25.00
|
|
|
7.875
|
%
|
|
1.97
|
|
|||
F
|
|
4,000
|
|
|
0.001
|
|
|
25.00
|
|
|
7.80
|
%
|
|
1.95
|
|
|||
G
|
|
3,200
|
|
|
0.001
|
|
|
25.00
|
|
|
7.65
|
%
|
|
1.91
|
|
|||
I
|
|
5,000
|
|
|
0.001
|
|
|
25.00
|
|
|
7.50
|
%
|
|
1.88
|
|
|||
J (convertible)
|
|
4,000
|
|
|
0.001
|
|
|
50.00
|
|
|
4.50
|
%
|
|
2.25
|
|
|||
|
|
25,800
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Holders of shares of the Series D, E, F, G, I and J preferred stock are entitled to receive dividends, when and as declared by the Company's Board of Directors, out of funds legally available for the payment of dividends. Dividends are cumulative from the date of original issue and are payable quarterly in arrears on or before the 15th day of each March, June, September and December or, if not a business day, the next succeeding business day. Any dividend payable on the preferred stock for any partial dividend period will be computed on the basis of a
360
-day year consisting of
twelve
30
-day months. Dividends will be payable to holders of record as of the close of business on the first day of the calendar month in which the applicable dividend payment date falls or on another date designated by the Company's Board of Directors for the payment of dividends that is not more than
30
nor less than
10
days prior to the dividend payment date.
|
(2)
|
The Company declared and paid dividends of
$2.0 million
,
$2.8 million
,
$2.0 million
,
$1.5 million
and
$2.3 million
on its Series D, E, F, G and I Cumulative Redeemable Preferred Stock during the
three months
ended
March 31, 2017
and
2016
. The Company declared and paid dividends of
$2.3 million
on its Series J Convertible Perpetual Preferred Stock during the
three months
ended
March 31, 2017
and
2016
. The character of the 2016 dividends were as follows:
47.30%
is a capital gain distribution, of which
76.15%
represents unrecaptured section 1250 gain and
23.85%
long term capital gain, and
52.70%
is ordinary income. There are
no
dividend arrearages on any of the preferred shares currently outstanding.
|
(3)
|
The Company may, at its option, redeem the Series D, E, F, G, and I Preferred Stock, in whole or in part, at any time and from time to time, for cash at a redemption price equal to
100%
of the liquidation preference of
$25.00
per share, plus accrued and unpaid dividends, if any, to the redemption date.
|
(4)
|
Each share of the Series J Preferred Stock is convertible at the holder's option at any time, initially into
3.9087
shares of the Company's common stock (equal to an initial conversion price of approximately
$12.79
per share), subject to specified adjustments. The Company may not redeem the Series J Preferred Stock prior to March 15, 2018. On or after March 15, 2018, the Company may, at its option, redeem the Series J Preferred Stock, in whole or in part, at any time and from time to time, for cash at a redemption price equal to
100%
of the liquidation preference of
$50.00
per share, plus accrued and unpaid dividends, if any, to the redemption date.
|
|
As of
|
||||||
|
March 31, 2017
|
|
December 31, 2016
|
||||
Unrealized gains (losses) on available-for-sale securities
|
$
|
132
|
|
|
$
|
149
|
|
Unrealized gains (losses) on cash flow hedges
|
689
|
|
|
27
|
|
||
Unrealized losses on cumulative translation adjustment
|
(4,795
|
)
|
|
(4,394
|
)
|
||
Accumulated other comprehensive income (loss)
|
$
|
(3,974
|
)
|
|
$
|
(4,218
|
)
|
•
|
In January 2015, the Company granted an additional
10
iPIP points in the 2013-2014 investment pool and
34
iPIP points in the 2015-2016 investment pool.
|
•
|
In January 2016, the Company granted an additional
10
iPIP points in the 2013-2014 investment pool and an additional
40
iPIP points in the 2015-2016 investment pool.
|
•
|
In June 2016, the Company granted an additional
2.5
iPIP points in the 2015-2016 investment pool.
|
•
|
In February 2017, the Company granted an additional
5
iPIP points in the 2013-2014 investment pool, an additional
18
iPIP points in the 2015-2016 investment pool, and
44
iPIP points in the 2017-2018 investment pool.
|
•
|
115,571
service-based Units granted on February 22, 2017, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The Units will cliff vest in
one
installment on December 31, 2019, if the employee remains employed by the Company on the vesting date, subject to certain accelerated vesting rights. Dividends will accrue as and when dividends are declared by the Company on shares of its common stock, but will not be paid unless and until the Units vest and are settled. As of
March 31, 2017
,
115,571
of such service-based Units were outstanding.
|
•
|
80,000
service-based Units granted on June 15, 2016, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The Units will vest in equal annual installments over
four
years on each anniversary of the grant date, if the employee remains employed by the Company on the vesting date, subject to certain accelerated vesting rights. Upon vesting of these Units, the holder will receive shares of the Company's common stock in the amount of the vested Units, net of statutory minimum required tax withholdings. Dividends will accrue as and when dividends are declared by the Company on shares of its common stock, but will not be paid unless and until the Units vest and are settled.
|
•
|
109,417
service-based Units granted on January 29, 2016, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The Units will cliff vest in
one
installment on December 31, 2018, if the employee remains employed by the Company on the vesting date, subject to certain accelerated vesting rights. Dividends will accrue as and when dividends are declared by the Company on shares of its common stock, but will not be paid unless and until the Units vest and are settled.
|
•
|
39,071
target amount of performance-based Units granted on January 30, 2015, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The performance is based on the Company's TSR, measured over a performance period ending on December 31, 2017, which is the date the awards cliff vest. Vesting will range from
0%
to
200%
of the target amount of the awards, depending on the Company’s TSR performance relative to the NAREIT All REITs Index (one-half of the target amount of the award) and the Russell 2000 Index (one-half of the target amount of the award) during the performance period. The Company, as well as any companies not included in each index at the beginning and end of the performance period, are excluded from calculation of the performance of such index. To the extent Units vest based on the Company's TSR performance, holders will receive an equivalent number of shares of common stock (after deducting shares for minimum required statutory withholdings), if the employee remains employed by the Company on the vesting date, subject to certain accelerated vesting rights. Dividends will accrue as and when dividends are declared by the Company on shares of its common stock, but will not be paid unless and until the Units vest and are settled. The fair values of the performance-based Units were determined by utilizing a Monte Carlo model to simulate a range of possible future stock prices for the Company's common stock. The assumptions used to estimate the fair value of these performance-based awards were
0.75%
for risk-free interest rate and
28.14%
for expected stock price volatility.
|
•
|
56,020
service-based Units granted on January 30, 2015, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The Units will cliff vest in
one
installment on December 31, 2017, if the employee remains employed by the Company on the vesting date, subject to certain accelerated vesting rights. Dividends will accrue as and when dividends
|
•
|
4,751
service-based Units granted on various dates, representing the right to receive an equivalent number of shares of the Company's common stock (after deducting shares for minimum required statutory withholdings) if and when the Units vest. The Units have an original vesting term of
three
years. Upon vesting of these Units, holders will receive shares of the Company's common stock in the amount of the vested Units, net of statutory minimum required tax withholdings. Dividends will accrue as and when dividends are declared by the Company on shares of its common stock, but will not be paid unless and until the Units vest and are settled.
|
|
For the Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Income (loss) from operations
|
$
|
(23,990
|
)
|
|
$
|
(19,757
|
)
|
Income from sales of real estate
|
8,618
|
|
|
10,458
|
|
||
Net (income) loss attributable to noncontrolling interests
|
1,100
|
|
|
942
|
|
||
Preferred dividends
|
(12,830
|
)
|
|
(12,830
|
)
|
||
Income (loss) from operations attributable to iStar Inc. and allocable to common shareholders and Participating Security Holders for basic and diluted earnings per common share
|
$
|
(27,102
|
)
|
|
$
|
(21,187
|
)
|
|
For the Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Earnings allocable to common shares:
|
|
|
|
||||
Numerator for basic and diluted earnings per share:
|
|
|
|
||||
Income (loss) from operations attributable to iStar Inc. and allocable to common shareholders
|
$
|
(27,102
|
)
|
|
$
|
(21,187
|
)
|
Net income (loss) attributable to iStar Inc. and allocable to common shareholders
|
$
|
(27,102
|
)
|
|
$
|
(21,187
|
)
|
|
|
|
|
||||
Denominator for basic and diluted earnings per share:
|
|
|
|
||||
Weighted average common shares outstanding for basic and diluted earnings per common share
|
72,065
|
|
|
77,060
|
|
||
|
|
|
|
||||
Basic and diluted earnings per common share:
|
|
|
|
||||
Income (loss) from operations attributable to iStar Inc. and allocable to common shareholders
|
$
|
(0.38
|
)
|
|
$
|
(0.27
|
)
|
Net income (loss) attributable to iStar Inc. and allocable to common shareholders
|
$
|
(0.38
|
)
|
|
$
|
(0.27
|
)
|
|
For the Three Months Ended March 31,
|
||||
|
2017
|
|
2016
|
||
3.00% convertible senior unsecured notes
|
—
|
|
|
16,992
|
|
Series J convertible perpetual preferred stock
|
15,635
|
|
|
15,635
|
|
1.50% convertible senior unsecured notes
|
—
|
|
|
11,567
|
|
Joint venture shares
|
298
|
|
|
298
|
|
(1)
|
For the
three months
ended
March 31, 2017
and
2016
, the effect of the Company's unvested Units, performance-based Units, CSEs and restricted stock awards were anti-dilutive.
|
|
|
|
Fair Value Using
|
||||||||||||
|
Total
|
|
Quoted market
prices in
active markets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
As of March 31, 2017
|
|
|
|
|
|
|
|
||||||||
Recurring basis:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
(1)
|
$
|
129
|
|
|
$
|
—
|
|
|
$
|
129
|
|
|
$
|
—
|
|
Derivative liabilities
(1)
|
571
|
|
|
—
|
|
|
571
|
|
|
—
|
|
||||
Available-for-sale securities
(1)
|
21,639
|
|
|
—
|
|
|
—
|
|
|
21,639
|
|
||||
Non-recurring basis:
|
|
|
|
|
|
|
|
||||||||
Impaired real estate
(2)
|
10,141
|
|
|
—
|
|
|
—
|
|
|
10,141
|
|
||||
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Recurring basis:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
(1)
|
$
|
727
|
|
|
$
|
—
|
|
|
$
|
727
|
|
|
$
|
—
|
|
Derivative liabilities
(1)
|
47
|
|
|
—
|
|
|
47
|
|
|
—
|
|
||||
Available-for-sale securities
(1)
|
21,666
|
|
|
—
|
|
|
—
|
|
|
21,666
|
|
||||
Non-recurring basis:
|
|
|
|
|
|
|
|
||||||||
Impaired loans
(3)
|
7,200
|
|
|
—
|
|
|
—
|
|
|
7,200
|
|
||||
Impaired real estate
(4)
|
3,063
|
|
|
—
|
|
|
—
|
|
|
3,063
|
|
(1)
|
The fair value of the Company's derivatives are based upon widely accepted valuation techniques utilized by a third-party specialist using observable inputs such as interest rates and contractual cash flow and are classified as Level 2. The fair value of the Company's available-for-sale securities are based upon unadjusted third-party broker quotes and are classified as Level 3.
|
(2)
|
The Company recorded an impairment on
one
real estate asset with a fair value of
$10.1 million
based on a discount rate of
11%
using discounted cash flows over a
two
year sellout period.
|
(3)
|
The Company recorded a provision for loan losses on
one
loan with a fair value of
$5.2 million
using an appraisal based on market comparable sales. In
|
(4)
|
The Company recorded an impairment on
one
real estate asset with a fair value of
$3.1 million
based on a discount rate of
11%
using discounted cash flows over a
two
year sellout period.
|
|
|
2017
|
|
2016
|
||||
Beginning balance
|
|
$
|
21,666
|
|
|
$
|
1,161
|
|
Purchases
|
|
—
|
|
|
4,366
|
|
||
Repayments
|
|
(10
|
)
|
|
(10
|
)
|
||
Unrealized (losses) gains recorded in other comprehensive income
|
|
(17
|
)
|
|
19
|
|
||
Ending balance
|
|
$
|
21,639
|
|
|
$
|
5,536
|
|
|
Real Estate Finance
|
|
Net Lease
|
|
Operating Properties
|
|
Land and Development
|
|
Corporate/Other
(1)
|
|
Company Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate, net
|
$
|
—
|
|
|
$
|
998,314
|
|
|
$
|
478,277
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,476,591
|
|
Real estate available and held for sale
|
—
|
|
|
—
|
|
|
71,934
|
|
|
—
|
|
|
—
|
|
|
71,934
|
|
||||||
Total real estate
|
—
|
|
|
998,314
|
|
|
550,211
|
|
|
—
|
|
|
—
|
|
|
1,548,525
|
|
||||||
Land and development, net
|
—
|
|
|
—
|
|
|
—
|
|
|
955,150
|
|
|
—
|
|
|
955,150
|
|
||||||
Loans receivable and other lending investments, net
|
1,381,227
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,381,227
|
|
||||||
Other investments
|
—
|
|
|
92,024
|
|
|
3,215
|
|
|
69,454
|
|
|
32,866
|
|
|
197,559
|
|
||||||
Total portfolio assets
|
$
|
1,381,227
|
|
|
$
|
1,090,338
|
|
|
$
|
553,426
|
|
|
$
|
1,024,604
|
|
|
$
|
32,866
|
|
|
4,082,461
|
|
|
Cash and other assets
|
|
|
|
|
|
|
|
|
|
|
1,212,055
|
|
|||||||||||
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,294,516
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Real estate, net
|
$
|
—
|
|
|
$
|
1,015,590
|
|
|
$
|
476,162
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,491,752
|
|
Real estate available and held for sale
|
—
|
|
|
1,284
|
|
|
82,480
|
|
|
—
|
|
|
—
|
|
|
83,764
|
|
||||||
Total real estate
|
—
|
|
|
1,016,874
|
|
|
558,642
|
|
|
—
|
|
|
—
|
|
|
1,575,516
|
|
||||||
Land and development, net
|
—
|
|
|
—
|
|
|
—
|
|
|
945,565
|
|
|
—
|
|
|
945,565
|
|
||||||
Loans receivable and other lending investments, net
|
1,450,439
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,450,439
|
|
||||||
Other investments
|
—
|
|
|
92,669
|
|
|
3,583
|
|
|
84,804
|
|
|
33,350
|
|
|
214,406
|
|
||||||
Total portfolio assets
|
$
|
1,450,439
|
|
|
$
|
1,109,543
|
|
|
$
|
562,225
|
|
|
$
|
1,030,369
|
|
|
$
|
33,350
|
|
|
4,185,926
|
|
|
Cash and other assets
|
|
|
|
|
|
|
|
|
|
|
639,588
|
|
|||||||||||
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,825,514
|
|
(1)
|
Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This caption also includes the Company's joint venture investments and strategic investments that are not included in the other reportable segments above.
|
(2)
|
General and administrative excludes stock-based compensation expense of
$5.9 million
and
$4.6 million
for the
three months
ended
March 31, 2017
and 2016. respectively.
|
(3)
|
The following is a reconciliation of segment profit to net income (loss) ($ in thousands):
|
|
For the Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Segment profit
|
$
|
3,878
|
|
|
$
|
11,203
|
|
Less: Recovery of (provision for) loan losses
|
4,928
|
|
|
(1,506
|
)
|
||
Less: Impairment of assets
|
(4,413
|
)
|
|
—
|
|
||
Less: Stock-based compensation expense
|
(5,881
|
)
|
|
(4,577
|
)
|
||
Less: Depreciation and amortization
|
(13,067
|
)
|
|
(14,708
|
)
|
||
Less: Income tax (expense) benefit
|
(607
|
)
|
|
414
|
|
||
Less: Loss on early extinguishment of debt, net
|
(210
|
)
|
|
(125
|
)
|
||
Net income (loss)
|
$
|
(15,372
|
)
|
|
$
|
(9,299
|
)
|
Property/Collateral Types
|
|
Real Estate Finance
|
|
Net Lease
|
|
Operating Properties
|
|
Land & Development
|
|
Total
|
|
% of
Total |
|||||||||||
Office / Industrial
|
|
$
|
207,205
|
|
|
$
|
747,788
|
|
|
$
|
122,605
|
|
|
$
|
—
|
|
|
$
|
1,077,598
|
|
|
23.9
|
%
|
Land and Development
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,031,361
|
|
|
1,031,361
|
|
|
22.8
|
%
|
|||||
Hotel
|
|
335,854
|
|
|
136,080
|
|
|
103,260
|
|
|
—
|
|
|
575,194
|
|
|
12.7
|
%
|
|||||
Entertainment / Leisure
|
|
—
|
|
|
489,671
|
|
|
—
|
|
|
—
|
|
|
489,671
|
|
|
10.8
|
%
|
|||||
Mixed Use / Mixed Collateral
|
|
297,636
|
|
|
—
|
|
|
173,906
|
|
|
—
|
|
|
471,542
|
|
|
10.4
|
%
|
|||||
Condominium
|
|
314,608
|
|
|
—
|
|
|
71,304
|
|
|
—
|
|
|
385,912
|
|
|
8.5
|
%
|
|||||
Other Property Types
|
|
205,993
|
|
|
29,619
|
|
|
6
|
|
|
—
|
|
|
235,618
|
|
|
5.2
|
%
|
|||||
Retail
|
|
38,331
|
|
|
57,348
|
|
|
131,848
|
|
|
—
|
|
|
227,527
|
|
|
5.0
|
%
|
|||||
Strategic Investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,866
|
|
|
0.7
|
%
|
|||||
Total
|
|
$
|
1,399,627
|
|
|
$
|
1,460,506
|
|
|
$
|
602,929
|
|
|
$
|
1,031,361
|
|
|
$
|
4,527,289
|
|
|
100.0
|
%
|
Geographic Region
|
|
Real Estate Finance
|
|
Net Lease
|
|
Operating Properties
|
|
Land & Development
|
|
Total
|
|
% of
Total |
|||||||||||
Northeast
|
|
$
|
662,477
|
|
|
$
|
399,362
|
|
|
$
|
46,784
|
|
|
$
|
246,473
|
|
|
$
|
1,355,096
|
|
|
30.0
|
%
|
West
|
|
89,901
|
|
|
357,538
|
|
|
37,957
|
|
|
367,426
|
|
|
852,822
|
|
|
18.8
|
%
|
|||||
Southeast
|
|
167,589
|
|
|
251,123
|
|
|
149,199
|
|
|
138,475
|
|
|
706,386
|
|
|
15.6
|
%
|
|||||
Mid-Atlantic
|
|
174,046
|
|
|
154,296
|
|
|
49,561
|
|
|
221,859
|
|
|
599,762
|
|
|
13.2
|
%
|
|||||
Southwest
|
|
51,227
|
|
|
182,336
|
|
|
241,814
|
|
|
25,628
|
|
|
501,005
|
|
|
11.1
|
%
|
|||||
Central
|
|
164,367
|
|
|
67,196
|
|
|
67,473
|
|
|
31,500
|
|
|
330,536
|
|
|
7.3
|
%
|
|||||
Various
(2)
|
|
90,020
|
|
|
48,655
|
|
|
10,141
|
|
|
—
|
|
|
148,816
|
|
|
3.3
|
%
|
|||||
Strategic Investments
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,866
|
|
|
0.7
|
%
|
|||||
Total
|
|
$
|
1,399,627
|
|
|
$
|
1,460,506
|
|
|
$
|
602,929
|
|
|
$
|
1,031,361
|
|
|
$
|
4,527,289
|
|
|
100.0
|
%
|
|
March 31, 2017
|
|||||||||||||||||
|
Number of Loans
|
|
Gross Carrying Value
|
|
Reserve for Loan Losses
|
|
Carrying Value
|
|
% of Total
|
|
Reserve for Loan Losses as a % of Gross Carrying Value
|
|||||||
Performing loans
|
36
|
|
|
$
|
1,128,434
|
|
|
$
|
(18,400
|
)
|
|
$
|
1,110,034
|
|
|
85.4%
|
|
1.6%
|
Non-performing loans
|
5
|
|
|
250,801
|
|
|
(60,989
|
)
|
|
189,812
|
|
|
14.6%
|
|
24.3%
|
|||
Total
|
41
|
|
|
$
|
1,379,235
|
|
|
$
|
(79,389
|
)
|
|
$
|
1,299,846
|
|
|
100.0%
|
|
5.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
December 31, 2016
|
|||||||||||||||||
|
Number of Loans
|
|
Gross Carrying Value
|
|
Reserve for Loan Losses
|
|
Carrying Value
|
|
% of Total
|
|
Reserve for Loan Losses as a % of Gross Carrying Value
|
|||||||
Performing loans
|
35
|
|
|
$
|
1,202,127
|
|
|
$
|
(23,300
|
)
|
|
$
|
1,178,827
|
|
|
86.0%
|
|
1.9%
|
Non-performing loans
|
6
|
|
|
253,941
|
|
|
(62,245
|
)
|
|
191,696
|
|
|
14.0%
|
|
24.5%
|
|||
Total
|
41
|
|
|
$
|
1,456,068
|
|
|
$
|
(85,545
|
)
|
|
$
|
1,370,523
|
|
|
100.0%
|
|
5.9%
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Senior mortgages
|
$
|
752,341
|
|
|
$
|
854,805
|
|
Corporate/Partnership loans
|
361,895
|
|
|
333,244
|
|
||
Subordinate mortgages
|
14,198
|
|
|
14,078
|
|
||
Total
|
$
|
1,128,434
|
|
|
$
|
1,202,127
|
|
|
|
|
|
||||
Weighted average LTV
|
60
|
%
|
|
64
|
%
|
||
Yield
|
9.2
|
%
|
|
8.9
|
%
|
Net Lease Statistics
|
|||||
|
March 31, 2017
|
|
December 31, 2016
|
||
Square feet (mm)
(1)
|
17,078
|
|
|
17,214
|
|
Leased %
(2)
|
99
|
%
|
|
98
|
%
|
Weighted average lease term (years)
(3)
|
14.8
|
|
|
14.7
|
|
Yield
(4)
|
8.4
|
%
|
|
8.3
|
%
|
(1)
|
As of
March 31, 2017
and
December 31, 2016
, includes
3,081
square feet at one of our equity method investments of which we own 51.9%.
|
(2)
|
Excluding equity method investments, our net lease portfolio was 98% leased as of
March 31, 2017
and
December 31, 2016
.
|
(3)
|
Excluding equity method investments, our weighted average lease term was and 14.8 years as of
March 31, 2017
and
December 31, 2016
.
|
(4)
|
Excludes equity method investments.
|
Commercial Operating Property Statistics
|
||||||||||||||||||||
($ in millions)
|
||||||||||||||||||||
|
Stabilized Operating
(1)
|
Transitional Operating
(1)
|
|
Total
|
||||||||||||||||
|
March 31, 2017
|
December 31, 2016
|
|
March 31, 2017
|
December 31, 2016
|
|
March 31, 2017
|
December 31, 2016
|
||||||||||||
Gross book value ($mm)
(2)
|
$
|
339
|
|
$
|
337
|
|
|
$
|
192
|
|
$
|
189
|
|
|
$
|
531
|
|
$
|
526
|
|
Occupancy
(3)
|
88
|
%
|
86
|
%
|
|
55
|
%
|
54
|
%
|
|
75
|
%
|
74
|
%
|
||||||
Yield
|
7.9
|
%
|
8.5
|
%
|
|
3.7
|
%
|
1.5
|
%
|
|
6.4
|
%
|
5.5
|
%
|
(1)
|
Stabilized commercial properties generally have occupancy levels above 80% and/or generate yields resulting in a sufficient return based upon the properties’ risk profiles. Transitional commercial properties are generally those properties that do not meet these criteria.
|
(2)
|
Gross carrying value represents carrying value gross of accumulated depreciation.
|
(3)
|
Occupancy is as of
March 31, 2017
and
December 31, 2016
.
|
Residential Operating Property Statistics
|
|||||||
($ in millions)
|
|||||||
|
Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
Condominium units sold
|
7
|
|
|
14
|
|
||
Proceeds
|
$
|
10.2
|
|
|
$
|
19.2
|
|
Income from sales of real estate
|
$
|
1.9
|
|
|
$
|
4.8
|
|
Land and Development Portfolio Rollforward
|
|||||||
(in millions)
|
|||||||
|
Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
Beginning balance
(1)
|
$
|
945.5
|
|
|
$
|
1,002.0
|
|
Asset sales
(2)
|
(15.3
|
)
|
|
(11.2
|
)
|
||
Capital expenditures
|
26.6
|
|
|
34.2
|
|
||
Other
|
(1.6
|
)
|
|
(0.6
|
)
|
||
Ending balance
(1)
|
$
|
955.2
|
|
|
$
|
1,024.4
|
|
Land and Development Statistics
|
|||||||
(in millions)
|
|||||||
|
Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
Land development revenue
|
$
|
20.1
|
|
|
$
|
14.9
|
|
Land development cost of sales
|
15.9
|
|
|
11.6
|
|
||
Gross margin
|
$
|
4.2
|
|
|
$
|
3.3
|
|
Earnings from land development equity method investments
|
3.8
|
|
|
6.7
|
|
||
Total
|
$
|
8.0
|
|
|
$
|
10.0
|
|
|
For the Three Months Ended March 31,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Operating lease income
|
$
|
52,591
|
|
|
$
|
54,937
|
|
|
$
|
(2,346
|
)
|
|
(4
|
)%
|
Interest income
|
29,058
|
|
|
33,219
|
|
|
(4,161
|
)
|
|
(13
|
)%
|
|||
Other income
|
11,864
|
|
|
11,541
|
|
|
323
|
|
|
3
|
%
|
|||
Land development revenue
|
20,050
|
|
|
14,947
|
|
|
5,103
|
|
|
34
|
%
|
|||
Total revenue
|
113,563
|
|
|
114,644
|
|
|
(1,081
|
)
|
|
(1
|
)%
|
|||
Interest expense
|
51,193
|
|
|
57,021
|
|
|
(5,828
|
)
|
|
(10
|
)%
|
|||
Real estate expense
|
35,741
|
|
|
34,305
|
|
|
1,436
|
|
|
4
|
%
|
|||
Land development cost of sales
|
15,910
|
|
|
11,575
|
|
|
4,335
|
|
|
37
|
%
|
|||
Depreciation and amortization
|
13,067
|
|
|
14,708
|
|
|
(1,641
|
)
|
|
(11
|
)%
|
|||
General and administrative
|
25,173
|
|
|
23,102
|
|
|
2,071
|
|
|
9
|
%
|
|||
(Recovery of) provision for loan losses
|
(4,928
|
)
|
|
1,506
|
|
|
(6,434
|
)
|
|
>(100%)
|
|
|||
Impairment of assets
|
4,413
|
|
|
—
|
|
|
4,413
|
|
|
100
|
%
|
|||
Other expense
|
1,869
|
|
|
740
|
|
|
1,129
|
|
|
>100%
|
|
|||
Total costs and expenses
|
142,438
|
|
|
142,957
|
|
|
(519
|
)
|
|
—
|
%
|
|||
Loss on early extinguishment of debt, net
|
(210
|
)
|
|
(125
|
)
|
|
(85
|
)
|
|
68
|
%
|
|||
Earnings from equity method investments
|
5,702
|
|
|
8,267
|
|
|
(2,565
|
)
|
|
(31
|
)%
|
|||
Income tax (expense) benefit
|
(607
|
)
|
|
414
|
|
|
(1,021
|
)
|
|
>100%
|
|
|||
Income from sales of real estate
|
8,618
|
|
|
10,458
|
|
|
(1,840
|
)
|
|
(18
|
)%
|
|||
Net income (loss)
|
$
|
(15,372
|
)
|
|
$
|
(9,299
|
)
|
|
$
|
(6,073
|
)
|
|
65
|
%
|
|
For the Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Adjusted Income
|
|
|
|
||||
Net income (loss) allocable to common shareholders
|
$
|
(27,102
|
)
|
|
$
|
(21,187
|
)
|
Add: Depreciation and amortization
(1)
|
15,052
|
|
|
17,172
|
|
||
Add: (Recovery of) provision for loan losses
|
(4,928
|
)
|
|
1,506
|
|
||
Add: Impairment of assets
(2)
|
4,413
|
|
|
915
|
|
||
Add: Stock-based compensation expense
|
5,881
|
|
|
4,577
|
|
||
Add: Loss on early extinguishment of debt, net
|
210
|
|
|
125
|
|
||
Less: Losses on charge-offs and dispositions
(3)
|
(5,316
|
)
|
|
(3,416
|
)
|
||
Adjusted income (loss) allocable to common shareholders
(4)
|
$
|
(11,790
|
)
|
|
$
|
(308
|
)
|
(1)
|
Depreciation and amortization also includes our proportionate share of depreciation and amortization expense for equity method investments and excludes the portion of depreciation and amortization expense allocable to noncontrolling interests.
|
(2)
|
For the three months ended March 31, 2016, impairment of assets includes impairments on cost and equity method investments recorded in "Other income" and "Earnings from equity method investments," respectively, in our consolidated statements of operations.
|
(3)
|
Represents the impact of charge-offs and dispositions realized during the period. These charge-offs and dispositions were on assets that were previously impaired for GAAP and reflected in net income but not Adjusted Income.
|
(4)
|
For the three months ended March 31, 2016, Adjusted Income under the previous presentation was
$3.1 million
.
|
|
For the Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Operating Properties
|
$
|
7,283
|
|
|
$
|
16,757
|
|
Net Lease
|
498
|
|
|
978
|
|
||
Total capital expenditures on real estate assets
|
$
|
7,781
|
|
|
$
|
17,735
|
|
|
|
|
|
||||
Land and Development
|
$
|
27,604
|
|
|
$
|
29,375
|
|
Total capital expenditures on land and development assets
|
$
|
27,604
|
|
|
$
|
29,375
|
|
|
Amounts Due By Period
|
||||||||||||||||||||||
|
Total
|
|
Less Than 1
Year
|
|
1 - 3
Years
|
|
3 - 5
Years
|
|
5 - 10
Years
|
|
After 10
Years
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Long-Term Debt Obligations
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unsecured notes
|
$
|
2,845,000
|
|
|
$
|
1,125,000
|
|
|
$
|
1,070,000
|
|
|
$
|
275,000
|
|
|
$
|
375,000
|
|
|
$
|
—
|
|
Secured credit facilities
|
727,000
|
|
|
5,000
|
|
|
10,000
|
|
|
485,000
|
|
|
—
|
|
|
227,000
|
|
||||||
Mortgages
|
247,535
|
|
|
19,017
|
|
|
41,367
|
|
|
117,219
|
|
|
58,613
|
|
|
11,319
|
|
||||||
Trust preferred securities
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
||||||
Total principal maturities
|
3,919,535
|
|
|
1,149,017
|
|
|
1,121,367
|
|
|
877,219
|
|
|
433,613
|
|
|
338,319
|
|
||||||
Interest Payable
(1)
|
645,581
|
|
|
194,616
|
|
|
238,074
|
|
|
126,253
|
|
|
61,893
|
|
|
24,745
|
|
||||||
Loan Participations Payable
(2)
|
160,251
|
|
|
—
|
|
|
157,424
|
|
|
2,827
|
|
|
—
|
|
|
—
|
|
||||||
Operating Lease Obligations
|
19,912
|
|
|
3,973
|
|
|
7,793
|
|
|
4,503
|
|
|
3,643
|
|
|
—
|
|
||||||
Total
|
$
|
4,745,279
|
|
|
$
|
1,347,606
|
|
|
$
|
1,524,658
|
|
|
$
|
1,010,802
|
|
|
$
|
499,149
|
|
|
$
|
363,064
|
|
(1)
|
Variable-rate debt assumes 1-month LIBOR of
0.98%
and 3-month LIBOR of
1.15%
that were in effect as of
March 31, 2017
.
|
(2)
|
Refer to Note 9 to the consolidated financial statements.
|
|
As of
|
||||||||||||||
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Encumbered Assets
|
|
Unencumbered Assets
|
|
Encumbered Assets
|
|
Unencumbered Assets
|
||||||||
Real estate, net
|
$
|
1,005,826
|
|
|
$
|
470,765
|
|
|
$
|
881,212
|
|
|
$
|
610,540
|
|
Real estate available and held for sale
|
—
|
|
|
71,934
|
|
|
—
|
|
|
83,764
|
|
||||
Land and development, net
|
35,165
|
|
|
919,985
|
|
|
35,165
|
|
|
910,400
|
|
||||
Loans receivable and other lending investments, net
(1)(2)
|
137,293
|
|
|
1,080,448
|
|
|
172,581
|
|
|
1,142,050
|
|
||||
Other investments
|
—
|
|
|
197,559
|
|
|
—
|
|
|
214,406
|
|
||||
Cash and other assets
|
—
|
|
|
1,212,055
|
|
|
—
|
|
|
639,588
|
|
||||
Total
|
$
|
1,178,284
|
|
|
$
|
3,952,746
|
|
|
$
|
1,088,958
|
|
|
$
|
3,600,748
|
|
(1)
|
As of
March 31, 2017
and
December 31, 2016
, the amounts presented exclude general reserves for loan losses of
$18.4 million
and
$23.3 million
, respectively.
|
(2)
|
As of
March 31, 2017
and
December 31, 2016
, the amounts presented exclude loan participations of
$181.9 million
and
$159.1 million
, respectively.
|
|
Loans and Other Lending Investments
(1)
|
|
Real Estate
|
|
Other
Investments
|
|
Total
|
||||||||
Performance-Based Commitments
|
$
|
305,862
|
|
|
$
|
9,814
|
|
|
$
|
24,059
|
|
|
$
|
339,735
|
|
Strategic Investments
|
—
|
|
|
—
|
|
|
45,564
|
|
|
45,564
|
|
||||
Total
(2)
|
$
|
305,862
|
|
|
$
|
9,814
|
|
|
$
|
69,623
|
|
|
$
|
385,299
|
|
(1)
|
Excludes
$155.3 million
of commitments on loan participations sold that are not our obligation.
|
(2)
|
We did not have any Discretionary Fundings as of
March 31, 2017
.
|
Change in Interest Rates
|
|
Net Income
(1)
|
||
-10 Basis Points
|
|
$
|
(1,583
|
)
|
Base Interest Rate
|
|
—
|
|
|
+10 Basis Points
|
|
1,583
|
|
|
+50 Basis Points
|
|
7,915
|
|
|
+100 Basis Points
|
|
15,830
|
|
(1)
|
We have an overall net variable-rate asset position, which results in an increase in net income when rates increase and a decrease in net income when rates decrease. As of
March 31, 2017
,
$603.0 million
of our floating rate loans have a cumulative weighted average interest rate floor of
0.3%
and
$682.9 million
of our floating rate debt has a cumulative weighted average interest rate floor of
0.8%
.
|
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of a Publicly Announced Plan
|
Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans
(1)
|
||||||
January 1 to January 31
|
—
|
|
$
|
—
|
|
—
|
|
$
|
50,000,000
|
|
February 1 to February 28
|
—
|
|
$
|
—
|
|
—
|
|
$
|
50,000,000
|
|
March 1 to March 31
|
—
|
|
$
|
—
|
|
—
|
|
$
|
50,000,000
|
|
(1)
|
In August 2016, the Company's Board of Directors authorized an increase to
$50.0 million
in the stock repurchase program. The program authorizes the repurchase of common stock from time to time in open market and privately negotiated purchases, including pursuant to one or more trading plans. There is no fixed expiration date to this stock repurchase program.
|
Exhibit
Number
|
Document Description
|
10.12
|
iStar Inc. Amended and Restated Non-Employee's Directors' Deferral Plan
|
31.0
|
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act.
|
32.0
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act.
|
101*
|
The following financial information from the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2017 is formatted in XBRL ("eXtensible Business Reporting Language"): (i) the Consolidated Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016, (ii) the Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2017 and 2016, (iii) the Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months ended March 31, 2017 and 2016, (iv) the Consolidated Statement of Changes in Equity (unaudited) for the three months ended March 31, 2017 and 2016, (v) the Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2017 and 2016 and (vi) the Notes to the Consolidated Financial Statements (unaudited).
|
*
|
In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934 and otherwise is not subject to liability under these sections.
|
|
|
iStar Inc.
Registrant
|
Date:
|
May 4, 2017
|
/s/ JAY SUGARMAN
|
|
|
Jay Sugarman
Chairman of the Board of Directors and Chief
Executive Officer (principal executive officer)
|
|
|
|
|
|
iStar Inc.
Registrant
|
Date:
|
May 4, 2017
|
/s/ GEOFFREY G. JERVIS
|
|
|
Geoffrey G. Jervis
Chief Operating Officer and Chief Financial Officer (principal financial and accounting officer)
|
1.
|
Definitions.
|
(a)
|
“Account” means a deferred compensation account established for a Participant in accordance with Section 4.2(d).
|
(b)
|
“Board” means the Board of Directors of the Company.
|
(c)
|
“Change in Control” has the meaning ascribed thereto by the LTIP, but only if such transaction is also a change in the ownership or effective control of a corporation or a change in the ownership of a substantial portion of the assets of a corporation within the meaning of U.S. Treas. Regs. Section 1.409A-3(i)(5).
|
(d)
|
“Code” means the Internal Revenue Code of 1986, as amended.
|
(e)
|
“Common Stock” means the Company’s Common Stock, par value $.001 per share, either currently existing or authorized hereafter.
|
(f)
|
“Common Stock Equivalent” means a right, granted pursuant to the Plan, of a Participant to payment of a Share, or if applicable, the Fair Market Value of a Share.
|
(g)
|
“Company” means iStar Inc., a Maryland company.
|
(h)
|
“CSE Agreement” means a written agreement in a form approved by the Board, to be entered into by the Company and the Participant as provided in Section 5.
|
(i)
|
“CSE Value,” per Common Stock Equivalent as of a particular date, means the Fair Market Value of a Share as of such date.
|
(j)
|
“Disability” has the meaning ascribed thereto by the LTIP.
|
(k)
|
“Fair Market Value” per Common Stock Equivalent, or if applicable, per Share, as of a particular date means (i) if Shares are then listed on a national stock exchange, the average of the per Share closing price on such exchange for the 20 trading days ending on and including the last trading day preceding the date as of which the Fair Market Value is being determined, as determined by the Board; (ii) if Shares are not then listed on a national stock exchange but are then traded on an over-the-counter market, the average of the closing bid and asked prices for the Shares on such over-the-counter market for the 20 trading days ending as of and including the last trading day preceding the date on which the Fair Market Value is being determined, as determined by the Board; or (iii) if Shares are not then listed on a national stock exchange or traded on an over-the-counter market, such value as the Board in its discretion may in good faith determine; provided that where the Shares are so listed or traded, the Board may make discretionary determinations where the Shares have not been traded for 20 trading days. For purposes of this definition, the term “trading day” means a day on which the New York Stock Exchange is open for equities trading through at least 12:00 p.m., New York City time.
|
(l)
|
“LTIP” means the iStar Inc.2009 Long Term Incentive Plan, as amended from time to time or any successor long term incentive plan (for the avoidance of doubt, the Company’s 2013 Performance Incentive Plan is not an LTIP).
|
(m)
|
“Non-Employee Director” means a director of the Company who is not an officer or employee of the Company or any of its subsidiaries.
|
(n)
|
“Participant” means a Non-Employee Director of the Company who is credited with one or more Common Stock Equivalents or who has deferred receipt of fees hereunder as permitted by the Board.
|
(o)
|
“Plan” means the Company’s Non-Employee Directors’ Deferral Plan, as set forth herein and as the same may from time to time be amended.
|
(p)
|
“Regular Distribution Date” means the date determined under Section 7.
|
(q)
|
“Securities Act” means the Securities Act of 1933, as amended.
|
(r)
|
“Shares” means shares of Common Stock.
|
(s)
|
“Subsidiary” means any corporation (other than the Company) that is a “subsidiary corporation” with respect to the Company under Section 424(f) of the Code. In the event the Company becomes a subsidiary of another company, the provisions hereof applicable to subsidiaries shall,
|
(t)
|
“Valuation Date” means the last day of each calendar quarter and such additional dates as the Board may designate.
|
2.
|
Effective Date of Plan; Termination of the Plan; Source of Shares.
|
(a)
|
The effective date of the Plan, as amended, is May 17, 2016.
|
(b)
|
The Plan shall terminate on, and no Common Stock Equivalents shall be granted or other deferrals made hereunder on or after, December 31, 2025.
|
(c)
|
Shares of Common Stock distributed under the Plan and awards of Common Stock or Common Stock Equivalents hereunder shall be treated as awards under the LTIP and shall reduce the number of shares available for issuance under the LTIP in accordance with the terms of the LTIP and shall only be issued to the extent that Shares remain available for issuance under the LTIP.
|
3.
|
Eligibility.
|
4.
|
Cash Fees.
|
4.1
|
Types of Fees.
|
4.2
|
Election to Defer Cash Fees.
|
(a)
|
The Participant may elect that up to 100% (in increments of 1%) of the Participant’s Cash Retainer, Committee Chair Cash Retainer and Lead Committee Cash Retainer”), if applicable (collectively, the “Cash Fees”) shall be payable as compensation deferred under the Plan. With respect to a Participant’s election to defer all or a portion of the Cash Fees for a calendar year, such election shall be made prior to December 31st of the
|
(b)
|
The election described in Section 4.2(a) shall be made in writing substantially in the form attached hereto as
Exhibit A
as applicable, or in such other form as the Board may prescribe from time to time, to the Board within the time specified herein. With respect to a Participant’s election to defer all or a portion of Cash Fees, such election shall be irrevocable as of the Election Cut-Off Date. Except as set forth above in this Section 4.2(b), elections described in Section 4.2(a) shall continue in effect for future years unless and until a new written election is made for future years. All deferrals under this Section 4.2 shall be fully vested.
|
(c)
|
A Participant may elect, prior to earning Cash Fees, to defer such Cash Fees in the form of fixed-return credits. Upon such an election, the amount of the deferred Cash Fees shall not be paid currently but rather shall be credited to the Participant’s Account. Such credits shall be made when Cash Fees would otherwise have been paid to the Participant but for an election pursuant to Section 4.2(a). A separate subaccount under each Participant’s Account may in the discretion of the Board be established to record each year’s deferrals, and the credits and deductions with respect thereto. With respect to credits under this Section 4.2(c), earnings and losses shall accrue on the balance in the applicable Participant’s Account at the rate or rates specified in advance of the effective time of the applicability of such rate or rates, and from time to time, by the Board. As determined by the Board, such rate or rates may be a fixed rate, and may be established by reference to an index or indices, or may be a return on one or more specific investments or on a specific investment fund or funds (including, if and to the extent so provided by the Board, hypothetical investments selected by the Participant in accordance with procedures established by the Board). Earnings and losses shall be credited to Participants’ Accounts as of the end of each calendar quarter and, with respect to any particular Participant’s Account, shall continue to be credited thereto until all amounts are distributed with respect to the Participant’s Account in accordance with the Plan. Upon distribution, any accrued earnings shall be credited to the Participant’s Account and distributed therewith, and any accrued losses shall reduce the amount of distributions hereunder.
|
(d)
|
A Participant may elect, one time per each 12-month period, to convert as of the end of the calendar quarter of the election, Common Stock Equivalents to Account credits, and vice-versa, in whole or in part (but, in the case of Common Stock Equivalents, only in whole Common Stock Equivalents) with credits and liquidation of Common Stock Equivalents to be effected based on the CSE Value as of the end of such calendar quarter, and credits and liquidation of Accounts to be effected based on Account values as of the end of such calendar quarter.
|
(e)
|
The establishment and maintenance of, and credits to and deductions from, the Participant’s Account shall be mere bookkeeping entries, and shall not vest in the Participant or his beneficiary any right, title or interest in or to any specific assets of the Company. A separate subaccount under each Participant’s Account shall be established to record each year’s deferrals, and the credits and deductions with respect thereto.
|
5.
|
Equity Awards.
|
5.1
|
Awards of Common Stock Equivalents.
|
5.2
|
Vesting.
|
(i)
|
If a Non-Employee Director does not stand for re-election at an annual meeting at the request of the Company (other than a request made
|
(ii)
|
If a Non-Employee Director resigns of his or her own accord or otherwise ceases to serve as a Non-Employee Director before the end of a vesting period, then, except as otherwise provided herein or in the applicable CSE Agreement, the Non-Employee Director will retain Common Stock Equivalents that have vested through the date of resignation and will therewith forfeit all Common Stock Equivalents that have not then vested.
|
(iii)
|
Notwithstanding any other provision of the Plan, if the Company determines that a Non-Employee Director has breached the Company’s Code of Conduct or Corporate Governance Principles, the Non-Employee Director will forfeit all Common Stock Equivalents that have not then vested.
|
(iv)
|
The vesting of Common Stock Equivalents will be accelerated if a Non-Employee Director ceases to serve as a Non-Employee Director by reason of death or Disability or upon a Change in Control and shall vest on the date of such cessation of service or Change in Control.
|
6.
|
Dividend Equivalent Rights.
|
7.
|
Settlement and Withdrawal.
|
(a)
|
Distributions with respect to (i) vested Common Stock Equivalents will be settled by the transfer of Common Stock to the Participant, with an aggregate amount of the Fair Market Value of any such Common Stock to equal the aggregate CSE Value of such Common Stock Equivalents on the date of such distribution; and (ii) cash deferrals from a Participant’s Account will be settled by a cash payment to the Participant, or, in the
|
(b)
|
The Regular Distribution Date with respect to a Participant is the earlier of (1) the January 1 coincident with or next following the earlier of (i) the Non-Employee Director’s ceasing to be a Non-Employee Director of the Company (or its successor in interest), and (ii) the Non-Employee Director’s death, and (2) a Change in Control (the “Regular Distribution Date”). For purposes of the Plan, a Non-Employee Director shall cease to be a Non-Employee Director of the Company to the extent such individual incurs a “separation from service” as defined in Treasury Regulation Section 1.409A-1(h).
|
(c)
|
A Non-Employee Director will be permitted, prior to the beginning of the applicable annual period with respect to any Cash Fees to elect to receive distributions at times other than the Regular Distribution Date. Each such election will apply to all Common Stock Equivalents and credits to a Participant’s Account after the election is made, unless the Non-Employee Director specifically elects otherwise. Elections to defer distributions to a time or times after the Regular Distribution Date will be permitted only to the extent such election is accepted by the Board and otherwise made in compliance with Sections 4.2(a) and 4.2(b).
|
(d)
|
After a Common Stock Equivalent is awarded or Cash Fees are deferred to a Participant’s Account, the Non-Employee Director will have a one-time right to make a new distribution election with respect thereto. Any new election must (A) be effective at least one year after the election is made, or, in the case of payments to commence at a specific time, be made at least one year before the first scheduled payment and (B) defer the commencement of distributions for at least five years. Each such new election will apply to all vested Common Stock Equivalents and credits to the deferral Account (other than distributions that do not satisfy the timing requirements of the foregoing sentence), unless the Non-Employee Director specifically elects otherwise. The time at which distributions commence must be at least five years after such an election is made.
|
(e)
|
All distributions in respect of Common Stock Equivalents and Participant Accounts will be made no later than 45 days after the amounts become eligible for settlement as provided in this Section 7; provided, however, that, in lieu of providing a single delivery of Common Stock or a single sum of cash, a Non-Employee Director may elect to have the aggregate amounts paid in substantially equal annual installments over a period not to exceed 10 years. (The amount of each installment shall be determined without regard to the possibility of earnings and losses subsequent to such installment.) Any such election must be made (and may be changed only) within the time frame for making distribution elections as described in Section 7(c) or (d), as applicable.
|
(f)
|
Notwithstanding the foregoing provisions of this Section 7, a Participant may receive any amounts deferred by the Participant in the event of an “Unforeseeable Emergency.” For these purposes, an “Unforeseeable Emergency,” as determined by the Board in its sole discretion, is a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or “dependent,” as defined in Section 152(a) of the Code, of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute an Unforeseeable Emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved:
|
(i)
|
through reimbursement or compensation by insurance or otherwise,
|
(ii)
|
by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or
|
(iii)
|
by future cessation of the making of additional deferrals.
|
(g)
|
Notwithstanding the foregoing provisions of this Section 7, in the event of a Change in Control, the Regular Distribution Date shall be the date of
|
8.
|
Tax Withholding.
|
9.
|
Administration of Plan.
|
10.
|
Regulations and Approvals.
|
(a)
|
The Board may make such changes to the Plan as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain tax benefits applicable to deferred equity units.
|
(b)
|
Each credit of Common Stock Equivalents (or issuance of Shares in respect thereof) is subject to the requirement that, if at any time the Board determines, in its discretion, that the listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body or of the stockholders of the Company is necessary or desirable as a condition of, or in connection with, the issuance of Common Stock Equivalents or Shares, no payment shall be made, or Common Stock Equivalents or Shares issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions in a manner acceptable to the Board.
|
(c)
|
In the event that the disposition of stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act, and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required under the Securities Act, and the Board may require any individual receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares, to represent to the Company in writing that such Shares will be disposed of only if registered for sale under the Securities Act or if there is an available exemption for such disposition, and may provide for a legending of such Shares to that effect.
|
11.
|
Interpretation and Amendments.
|
(a)
|
The Board may make such rules and regulations and establish such procedures for the administration of the Plan as it deems appropriate. Without limiting the generality of the foregoing, the Board may (i) determine the extent, if any, to which Cash Fees or equity awards shall be forfeited (whether or not such forfeiture is expressly contemplated hereunder); (ii) interpret the Plan, elections made under the Plan, and the Common Stock Equivalents hereunder, with such interpretations to be conclusive and binding on all persons and otherwise accorded the maximum deference permitted by law; and (iii) take any other actions and make any other determinations or decisions that it deems necessary or
|
(b)
|
The Board may amend, alter or terminate the Plan as it shall deem advisable, except that no amendment, alteration or termination shall be made which would adversely affect a Participant with respect to deferred Cash Fees or equity awards previously credited without the Participant’s consent, except for amendments made to cause the Plan to comply with applicable laws (including, without limitation, Section 409A of the Code); provided that the Board may not make any amendment to the Plan that would, if such amendment were not approved by the holders of the Common Stock, cause the Plan to fail to comply with any requirement of applicable law or regulation, unless and until the approval of the holders of such Common Stock is obtained.
|
12.
|
Assignment and Alienation; No Funding; Etc.
|
(a)
|
Rights or benefits with respect to Cash Fees or equity awards credited to a Participant’s Account under the Plan (including any related dividend equivalent rights) shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, prior to actually being received by the person entitled to the benefit under the terms of the Plan; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, attach, charge or otherwise dispose of any right or benefits payable hereunder shall be void.
|
(b)
|
A Participant may designate in writing, on forms to be prescribed by the Board, a beneficiary or beneficiaries to receive any payments payable after his or her death and may amend or revoke such designation at any time. If no beneficiary designation is in effect at the time of a Participant’s death, payments hereunder shall be made to the Participant’s estate. If a Participant dies: (i) with a vested Common Stock Equivalent, such Common Stock Equivalent shall be settled and Shares or the CSE Value, as applicable, with respect to such Common Stock Equivalents paid; (ii) any payments deferred pursuant to an election under Section 4 shall be accelerated and paid; or (iii) any other amounts in the Participant’s Account then payable to the Participant shall be paid, as soon as
|
(c)
|
Common Stock Equivalents and the Accounts are solely a device for the measurement and determination of the amounts to be paid to a Participant under the Plan. Each Participant’s right in the Common Stock Equivalents (including any related dividend equivalent rights) and the Accounts is limited to the right to receive payment, if any, as may herein be provided. The Common Stock Equivalents do not constitute Common Stock and any other credits to a Participant’s Account hereunder shall not be treated as (or as giving rise to) property or as a trust fund of any kind; provided, however, that the Company may establish a mere bookkeeping reserve to meet its obligations hereunder or a trust or other funding vehicle that would not cause the Plan to be deemed to be funded for tax purposes. The right of any Participant to receive payments by virtue of participation in the Plan shall be no greater than the right of any unsecured general creditor of the Company. Nothing contained in the Plan, and no action taken pursuant to the provisions of the Plan (including without limitation Section 4.2(d)), shall create or shall be construed to create a trust of any kind, or a fiduciary relationship between the Company or its officers or the Board, on the one hand, and the Participant, the Company or any other person or entity, on the other. Nothing contained in the Plan shall be construed to give any Participant any rights with respect to Shares or any ownership interest in the Company. Without limiting Section 6, no provision of the Plan shall be interpreted to confer upon any Participant any voting, dividend or derivative or other similar rights with respect to any Common Stock Equivalent.
|
(d)
|
Common Stock distributed hereunder, if any, may, without limitation, be treasury Shares or authorized but unissued Shares but in each case shall count against the share limit in the LTIP.
|
13.
|
Changes in Capital Structure.
|
(a)
|
If (i) the Company or its Subsidiaries shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company or its Subsidiaries or a transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization or other similar change in the capital structure of the Company or its Subsidiaries, or any distribution to holders of Common Stock other than cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Board necessitates action by way of adjusting the terms of the outstanding Common Stock Equivalents, then the Board may take any such action as in its judgment shall be necessary
|
(b)
|
The judgment of the Board with respect to any matter referred to in this Section 13 shall be conclusive and binding upon each Participant without the need for any amendment to the Plan.
|
14.
|
Notices.
|
15.
|
No Rights to Service.
|
16.
|
Exculpation and Indemnification.
|
17.
|
No Personal Liability.
|
18.
|
Successors.
|
19.
|
Severability.
|
20.
|
Headings.
|
21.
|
Governing Law.
|
22.
|
Gender and Number.
|
23.
|
Section 409A of the Code.
|
Date:
|
May 4, 2017
|
By:
|
|
/s/ JAY SUGARMAN
|
||
|
|
|
|
Name:
|
|
Jay Sugarman
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
Date:
|
May 4, 2017
|
By:
|
|
/s/ GEOFFREY G. JERVIS
|
||
|
|
|
|
Name:
|
|
Geoffrey G. Jervis
|
|
|
|
|
Title:
|
|
Chief Financial Officer (principal financial and accounting officer)
|
Date:
|
May 4, 2017
|
By:
|
|
/s/ JAY SUGARMAN
|
||
|
|
|
|
Name:
|
|
Jay Sugarman
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
Date:
|
May 4, 2017
|
By:
|
|
/s/ GEOFFREY G. JERVIS
|
||
|
|
|
|
Name:
|
|
Geoffrey G. Jervis
|
|
|
|
|
Title:
|
|
Chief Financial Officer (principal financial and accounting officer)
|