Colony Capital, Inc. (NYSE: CLNY) and subsidiaries
(collectively, “Colony Capital,” or the “Company”) today announced
financial results for the first quarter ended March 31, 2021. The
Company reported first quarter 2021 total revenues of $316 million,
GAAP net income attributable to common stockholders of $(265)
million, or $(0.56) per share and Core FFO of $4.0 million, or
$0.01 per share.
“During the first quarter we made
significant progress towards our 2021 goals. Our digital portfolio
companies continue to grow and generate strong performance and we
are busy deploying fresh capital from DCP II, our new flagship
equity offering, into exciting new digital platforms,” said Marc
Ganzi, President and Chief Executive Officer. "The growth in our
digital businesses combined with key legacy dispositions puts us at
70% rotated currently, already past our target for the year. Our
business transformation dovetails with profound governance changes,
with Nancy Curtin, our lead independent director, recently agreeing
to step into the role of Chairperson and the addition of a new
digital board member in Shaka Rasheed, earlier this week at our
Annual Meeting."
Q1 2021 HIGHLIGHTS
Momentum at Digital Businesses
- Digital AUM rose to $32 billion, 70% of total AUM as of May 6,
2021.
- Capital formation at Digital Colony Partners II (DCP II) drove
strong growth in the Digital IM segment, with revenues and FRE both
up over 50% YoY.
- Organic growth and a strong contribution from DataBank’s
expanded footprint drove higher revenue and EBITDA in the Digital
Operating segment, which exceeded 2021 EBITDA guidance on a
run-rate basis during the quarter.
- DataBank, supported by the Digital Colony capital markets team,
completed a first-of-its-kind enterprise data center financing,
raising over $650 million in securitized notes to extend its debt
maturities and provide new capital to fund growth, while lowering
its overall cost of debt by over 50%.
Generated Positive Core FFO
- Digital FRE increased by 54% to $15.5 million from $10.1
million in the prior year due to significant FEEUM growth of $5.1
billion in the last twelve months.
- Digital Operating EBITDA increased to $14.4 million from $3.2
million in the prior year led by substantial investments in high
quality Digital Operating assets, namely Vantage SDC and DataBank's
acquisition of zColo.
- Significant G&A savings through legacy asset sales and
corporate cost rationalization efforts also contributed to the
positive Core FFO outcome.
Financial Summary
($ in millions, except per share data and
where noted)
Revenues
Q1 2021
Q1 2020
Property operating income
$
275
$
184
Interest income
3
3
Fee income
34
25
Other income
4
6
Total revenues
$
316
$
217
Adjusted EBITDA
$
56
$
36
Net income to common stockholders
$
(265
)
$
(362
)
Core FFO
$
4
$
(12
)
Core FFO per share
$
0.01
$
(0.02
)
Digital Fee Related Earnings
(“FRE”)(1)
$
15
$
10
Digital Operating EBITDA
$
14
$
3
Digital Core FFO(2)
$
16
$
11
Liquidity and Digital AUM
03/31/21
12/31/20
Liquidity (cash & undrawn RCF)
$
667
$
737
Digital AUM (in billions)
$
32.0
$
30.0
Note: Revenues, Net Income, Adjusted EBITDA and Digital FRE are
consolidated while Core FFO, Digital Core FFO, Digital Operating
EBITDA, Liquidity and AUM are CLNY OP share.
(1)
Reported 1Q21 FRE was $18.2
million, however, the figure above has been adjusted to exclude a
$2.7 million benefit from reversing unused portions of the one-time
incentive expense recorded in 4Q20.
(2)
Includes Digital Investment
Management and Digital Operating, excludes Digital Other.
Harvest Legacy Assets
- Completed the sale of the Company's hospitality portfolios,
generating an aggregate $67.5 million of gross proceeds on a
consolidated basis. The sale resulted in the reduction of $2.7
billion in consolidated investment-level debt.
- Other Equity & Debt (OED) assets monetized year-to-date
generated $131 million of net equity proceeds, including a sale in
April of a 74% controlling interest in two high-quality office
properties located in Dublin’s city center with $104 million in net
equity proceeds to the Company.
- In April 2021, the Company completed the internalization
transaction with Colony Credit Real Estate, Inc. (CLNC) and
received a termination payment of $102 million, transferred 44
employees to CLNC and executed a transition services agreement to
allow for a seamless transition of critical functions.
- In addition to funding future digital investments, these
transactions advance the Company’s efforts to streamline the
organization and simplify its business profile.
Significant Corporate Governance Advances
- Nancy Curtin, the Company’s lead independent director, was
appointed to the position of Chairperson of the Board, effective
April 1, 2021. The Company will benefit from Ms. Curtin’s extensive
global investment and leadership experience, as well as a deep
knowledge of the Company's business.
- On May 4, 2021, Sháka Rasheed was elected to the Company’s
Board of Directors. Mr. Rasheed currently serves as an executive of
the Microsoft Corporation. As an accomplished leader and advisor
currently at the intersection of financial services and technology,
Mr. Rasheed brings over 25 years of business development, sales,
strategy, and leadership experience to the Board.
Investor Relations
- The Company will host an inaugural Virtual Investor Day on
Tuesday, June 22, 2021 as part of its efforts to build greater
awareness across the investor community around its strategic plan
as it accelerates towards the completion of its digital
transformation.
- The Company continues to prioritize simplification as it makes
improvements to its financial reporting, most recently condensing
its earnings release and supplemental financial reporting packages
to reduce complexity and simplify analysis. The Company also
expects to issue a new Corporate Overview document in connection
with its upcoming investor day.
Common Stock and Operating Company Units
As of May 3, 2021, the Company had 487.2 million shares of Class
A and B common stock outstanding and the Company’s operating
partnership had 51.1 million operating company units outstanding
and held by members other than the Company.
Preferred Dividends
On February 23, 2021, the Company’s Board declared cash
dividends with respect to each series of the Company’s cumulative
redeemable perpetual preferred stock in accordance with the terms
of such series, as follows: with respect to each of the Series G
preferred stock: $0.46875 per share; Series H preferred stock:
$0.4453125 per share; Series I preferred stock: $0.446875 per
share; and Series J preferred stock: $0.4453125 per share, such
dividends were paid on April 15, 2021 to the respective
stockholders of record on April 12, 2021.
On May 4, 2021, the Company’s Board declared cash dividends with
respect to each series of the Company’s cumulative redeemable
perpetual preferred stock in accordance with the terms of such
series, as follows: with respect to each of the Series G preferred
stock: $0.46875 per share; Series H preferred stock: $0.4453125 per
share; Series I preferred stock: $0.446875 per share; and Series J
preferred stock: $0.4453125 per share, such dividends will be paid
on July 15, 2021 to the respective stockholders of record on July
9, 2021.
First Quarter 2021 Conference Call
The Company will conduct an earnings presentation and conference
call to discuss the financial results on Thursday, May 6, 2021 at
10:00 a.m. ET. The earnings presentation will be broadcast live
over the Internet and can be accessed on the Shareholders section
of the Company’s website at ir.clny.com/events. A webcast of the
presentation and conference call will be available for 90 days on
the Company’s website. To participate in the event by telephone,
please dial (877) 407-4018 ten minutes prior to the start time (to
allow time for registration). International callers should dial
(201) 689-8471.
For those unable to participate during the live call, a replay
will be available starting May 6, 2021, at 1:00 p.m. ET, through
May 13, 2021, at 11:59 p.m. ET. To access the replay, dial (844)
512-2921 (U.S.), and use passcode 13718365. International callers
should dial (412) 317-6671 and enter the same conference ID
number.
Earnings Presentation and Supplemental Financial
Report
A First Quarter 2021 Earnings Presentation and Supplemental
Financial Report is available in the Events & Presentations and
Financial Information sections, respectively, of the Shareholders
tab on the Company’s website at www.clny.com. This information has
also been furnished to the U.S. Securities and Exchange Commission
in a Current Report on Form 8-K.
About Colony Capital, Inc.
Colony Capital, Inc. (NYSE: CLNY) is a leading global investment
firm with a heritage of identifying and capitalizing on key secular
trends in real estate. The Company manages a $46 billion portfolio
of real assets on behalf of its shareholders and limited partners,
including $32 billion in digital real estate investments through
Digital Colony, its digital infrastructure platform. Colony
Capital, structured as a REIT, is headquartered in Boca Raton with
key offices in Los Angeles, New York, London and Singapore. For
more information on Colony Capital, visit www.clny.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release may contain forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements relate to expectations, beliefs, projections, future
plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. In
some cases, you can identify forward-looking statements by the use
of forward-looking terminology such as “may,” “will,” “should,”
“expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” or “potential” or the negative of these
words and phrases or similar words or phrases which are predictions
of or indicate future events or trends and which do not relate
solely to historical matters. You can also identify forward-looking
statements by discussions of strategy, plans or intentions.
Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and contingencies, many of which are
beyond the Company’s control, and may cause the Company’s actual
results to differ significantly from those expressed in any
forward-looking statement. Factors that might cause such a
difference include, without limitation, the impact of COVID-19 on
the global economy, including the Company’s businesses, whether the
Company will capitalize on the powerful secular tailwinds
supporting the continued growth and investment in digital
infrastructure, whether the Company’s wellness infrastructure
segment, including contractual rent collections, will continue to
perform well despite ongoing impacts of COVID-19, the Company’s
ability to continue driving strong growth in its digital business
and accelerating its digital transformation, including whether the
Company will continue to lower corporate expenses and achieve
earnings rotation through divestment of legacy businesses and
assets, the impact of the digital transformation on the Company’s
earnings profile, the Company’s ability to collaborate with its
partner companies and customers to build the next-generation
networks connecting enterprises and consumers globally, whether the
Company will realize the anticipated benefits of Wafra’s strategic
investment in the Company’s digital investment management business,
including whether the Wafra investment will become subject to
redemption and the amount of commitments Wafra will make to the
Company’s digital investment products, the Company’s ability to
raise third party capital in its managed funds or co-investment
structures and the pace of such fundraising (including as a result
of the impact of COVID-19), whether the DCP II fund raising target
will be met, in the amounts anticipated or at all, the performance
of DataBank, including zColo, the success and performance of the
Company’s future investment product offerings, including a digital
credit investment vehicle, whether the Company will realize the
anticipated benefits of its investment in Vantage SDC, including
the performance and stability of its portfolio, the pace of growth
in the Company’s digital investment management franchise, the
Company’s ability to continue to make investments in digital assets
onto the balance sheet and the quality and earnings profile of such
investments, the resilience and growth in demand for digital
infrastructure, whether the Company will realize the anticipated
benefits of its securitization transactions, the Company’s ability
to simplify its business and continue to monetize legacy
businesses/OED assets, including the timing and amount of proceeds
to be received by the Company in those monetizations and its impact
on the Company’s liquidity, if any, whether warehoused investments
will ultimately be transferred to a managed investment vehicle or
at all, the impact of impairments, the level of expenses within the
wellness infrastructure segment and the impact on performance for
the segment, whether the Company will maintain or produce higher
Core FFO per share in the coming quarters, or ever, the Company’s
FRE and FEEUM and its ability to continue growth at the current
pace or at all, whether the Company will continue to pay dividends
on its preferred stock, the impact of changes to the Company’s
management or board of directors, employee and organizational
structure, the Company’s financial flexibility and liquidity,
including borrowing capacity under its revolving credit facility
(including as a result of the impact of COVID-19), whether the
Company will further extend the term of its revolving credit
facility, the use of sales proceeds and available liquidity, the
performance of the Company’s investment in CLNC (including as a
result of the impact of COVID-19), including the CLNC share price
as compared to book value and how the Company evaluates the
Company’s investment in CLNC, the impact of management changes at
CLNC, the Company’s ability to minimize balance sheet commitments
to its managed investment vehicles, customer demand for data
centers, the Company's portfolio composition, the Company's
expected taxable income and net cash flows, excluding the
contribution of gains, the Company’s ability to pay or grow the
dividend at all in the future, the impact of any changes to the
Company’s management agreements with NorthStar Healthcare Income,
Inc. and other managed investment vehicles, whether the Company
will be able to maintain its qualification as a REIT for U.S.
federal income tax purposes, the timing of and ability to deploy
available capital, including whether any redeployment of capital
will generate higher total returns, the Company’s ability to
maintain inclusion and relative performance on the RMZ, the
Company’s leverage, including the Company’s ability to reduce debt
and the timing and amount of borrowings under its credit facility,
increased interest rates and operating costs, adverse economic or
real estate developments in the Company’s markets, the Company’s
failure to successfully operate or lease acquired properties,
decreased rental rates, increased vacancy rates or failure to renew
or replace expiring leases, increased costs of capital
expenditures, defaults on or non-renewal of leases by tenants, the
impact of economic conditions (including the impact of COVID-19 on
such conditions) on the borrowers of the Company’s commercial real
estate debt investments and the commercial mortgage loans
underlying its commercial mortgage backed securities, adverse
general and local economic conditions, an unfavorable capital
market environment, decreased leasing activity or lease renewals,
and other risks and uncertainties, including those detailed in the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2020 and Quarterly Report on Form 10-Q for the quarter
ended March 31, 2021, each under the heading “Risk Factors,” as
such factors may be updated from time to time in the Company’s
subsequent periodic filings with the U.S. Securities and Exchange
Commission (“SEC”). All forward-looking statements reflect the
Company’s good faith beliefs, assumptions and expectations, but
they are not guarantees of future performance. Additional
information about these and other factors can be found in the
Company’s reports filed from time to time with the SEC.
The Company cautions investors not to unduly rely on any
forward-looking statements. The forward-looking statements speak
only as of the date of this press release. The Company is under no
duty to update any of these forward-looking statements after the
date of this press release, nor to conform prior statements to
actual results or revised expectations, and the Company does not
intend to do so.
Non-GAAP Financial Measures and
Definitions
Adjusted Earnings before Interest, Taxes, Depreciation and
Amortization
The Company calculates Adjusted EBITDA by adjusting Core FFO to
exclude interest expense, preferred dividends, tax expense or
benefit, earnings from equity method investments, placement fees,
and for the Digital Operating segment, restructuring, transaction
and integration costs, and revenues and corresponding costs related
to the delivery of services that are not ongoing, such as
installation services. The Company uses Adjusted EBITDA as a
supplemental measure of our performance because they eliminate
depreciation, amortization, and the impact of the capital structure
from its operating results. However, because Adjusted EBITDA is
calculated before recurring cash charges including interest expense
and taxes and are not adjusted for capital expenditures or other
recurring cash requirements, their utilization as a cash flow
measurement is limited.
Assets Under Management (AUM)
Assets owned by the Company’s balance sheet and assets for which
the Company and its affiliates provide investment management
services, including assets for which the Company may or may not
charge management fees and/or performance allocations. Balance
sheet AUM is based on the undepreciated carrying value of digital
investments and the impaired carrying value of non digital
investments as of the report date. Investment management AUM is
based on the cost basis of managed investments as reported by each
underlying vehicle as of the report date. AUM further includes
uncalled capital commitments, but excludes CLNY OP’s share of non
wholly-owned real estate investment management platform’s AUM. The
Company's calculations of AUM may differ from the calculations of
other asset managers, and as a result, this measure may not be
comparable to similar measures presented by other asset
managers.
CLNY Operating Partnership (CLNY OP)
The operating partnership through which the Company conducts all
of its activities and holds substantially all of its assets and
liabilities. The Company is the sole managing member of, and
directly owns approximately 90% of the common units in, CLNY OP.
The remaining common units in CLNY OP are held primarily by current
and former employees of the Company. Each common unit is redeemable
at the election of the holder for cash equal to the then fair value
of one share of the Company’s Class A common stock or, at the
Company’s option, one share of the Company’s Class A common stock.
CLNY OP share excludes noncontrolling interests in investment
entities. Throughout this presentation, consolidated figures
represent the interest of both the Company (and its subsidiary
Colony Capital Operating Company or the “CLNY OP”) and
noncontrolling interests. Figures labeled as CLNY OP share
represent the Company’s pro-rata share.
Digital Operating Earnings before Interest, Taxes,
Depreciation and Amortization for Real Estate (EBITDAre) and
Adjusted EBITDA
The Company calculates EBITDAre in accordance with the standards
established by the National Association of Real Estate Investment
Trusts, which defines EBITDAre as net income or loss calculated in
accordance with GAAP, excluding interest, taxes, depreciation and
amortization, gains or losses from the sale of depreciated
property, and impairment of depreciated property. The Company
calculates Adjusted EBITDA by adjusting EBITDAre for the effects of
straight-line rental income/expense adjustments and amortization of
acquired above- and below-market lease adjustments to rental
income, equity-based compensation expense, restructuring and
integration costs, transaction costs from unsuccessful deals and
business combinations, litigation expense, the impact of other
impairment charges, gains or losses from sales of undepreciated
land, and gains or losses on early extinguishment of debt and
hedging instruments. Revenues and corresponding costs related to
the delivery of services that are not ongoing, such as installation
services, are also excluded from Adjusted EBITDA. The Company uses
EBITDAre and Adjusted EBITDA as supplemental measures of our
performance because they eliminate depreciation, amortization, and
the impact of the capital structure from its operating results.
However, because EBITDAre and Adjusted EBITDA are calculated before
recurring cash charges including interest expense and taxes and are
not adjusted for capital expenditures or other recurring cash
requirements, their utilization as a cash flow measurement is
limited.
Fee-Earning Equity Under Management (FEEUM)
Equity for which the Company and its affiliates provides
investment management services and derives management fees and/or
performance allocations. FEEUM generally represents the basis used
to derive fees, which may be based on invested equity,
stockholders’ equity, or fair value pursuant to the terms of each
underlying investment management agreement. The Company's
calculations of FEEUM may differ materially from the calculations
of other asset managers, and as a result, this measure may not be
comparable to similar measures presented by other asset
managers.
Fee Related Earnings (FRE)
The Company calculates FRE for its investment management
business within the digital segment as base management fees, other
service fee income, and other income inclusive of cost
reimbursements, less compensation expense (excluding equity-based
compensation), administrative expenses (excluding fund raising
placement agent fee expenses), and other operating expenses related
to the investment management business. The Company uses FRE as a
supplemental performance measure as it may provide additional
insight into the profitability of the overall digital investment
management business. FRE is presented prior to the deduction for
Wafra's 31.5% interest.
Funds From Operations (FFO) and Core Funds From Operations
(Core FFO)
The Company calculates funds from operations (FFO) in accordance
with standards established by the National Association of Real
Estate Investment Trusts, which defines FFO as net income or loss
calculated in accordance with GAAP, excluding (i) extraordinary
items, as defined by GAAP; (ii) gains and losses from sales of
depreciable real estate; (iii) impairment write-downs associated
with depreciable real estate; (iv) gains and losses from a change
in control in connection with interests in depreciable real estate
or in-substance real estate, plus (v) real estate-related
depreciation and amortization; and (vi) including similar
adjustments for equity method investments. Included in FFO are
gains and losses from sales of assets which are not depreciable
real estate such as loans receivable, equity method investments, as
well as equity and debt securities, as applicable.
The Company computes core funds from operations (Core FFO) by
adjusting FFO for the following items, including the Company’s
share of these items recognized by its unconsolidated partnerships
and joint ventures: (i) equity-based compensation expense; (ii)
effects of straight-line rent revenue and expense; (iii)
amortization of acquired above- and below-market lease values; (iv)
debt prepayment penalties and amortization of deferred financing
costs and debt premiums and discounts; (v) non-real estate
depreciation, amortization and impairment; (vi) restructuring and
transaction-related charges; (vii) non-real estate loss (gain),
fair value loss (gain) on interest rate and foreign currency
hedges, and foreign currency remeasurements except realized gain
and loss from the Digital Other segment; (viii) net unrealized
carried interest; and (ix) deferred taxes and the tax effect on
certain of the foregoing adjustments. The Company’s Core FFO from
its interest in Colony Credit Real Estate (NYSE: CLNC) represented
the cash dividends declared in the reported period. The Company
excluded results from discontinued operations in its calculation of
Core FFO and applied this exclusion to prior periods. Beginning
with the first quarter 2021, the Company revised the computation of
Core FFO and applied this revised computation methodology to prior
periods presented.
FFO and Core FFO should not be considered alternatives to GAAP
net income as indications of operating performance, or to cash
flows from operating activities as measures of liquidity, nor as
indications of the availability of funds for our cash needs,
including funds available to make distributions. FFO and Core FFO
should not be used as supplements to or substitutes for cash flow
from operating activities computed in accordance with GAAP.
The Company uses FFO and Core FFO as supplemental performance
measures because, in excluding real estate depreciation and
amortization and gains and losses, it provides a performance
measure that captures trends in occupancy rates, rental rates, and
operating costs, and such a measure is useful to investors as it
excludes periodic gains and losses from sales of investments that
are not representative of its ongoing operations. The Company also
believes that, as widely recognized measures of the performance of
REITs, FFO and Core FFO will be used by investors as a basis to
compare its operating performance with that of other REITs.
However, because FFO and Core FFO exclude depreciation and
amortization and capture neither the changes in the value of the
Company’s properties that resulted from use or market conditions
nor the level of capital expenditures and leasing commissions
necessary to maintain the operating performance of its properties,
all of which have real economic effect and could materially impact
the Company’s results from operations, the utility of FFO and Core
FFO as measures of the Company’s performance is limited. FFO and
Core FFO should be considered only as supplements to GAAP net
income as a measure of the Company’s performance. Additionally,
Core FFO excludes the impact of certain fair value fluctuations,
which, if they were to be realized, could have a material impact on
the Company’s operating performance.
Net Operating Income (NOI)
NOI for our real estate segments represents total property and
related income less property operating expenses, adjusted for the
effects of (i) straight-line rental income adjustments; (ii)
amortization of acquired above- and below-market lease adjustments
to rental income; and (iii) other items such as adjustments for the
Company’s share of NOI of unconsolidated ventures.
The Company believes that NOI is a useful measure of operating
performance of its respective real estate portfolios as it is more
closely linked to the direct results of operations at the property
level. NOI also reflects actual rents received during the period
after adjusting for the effects of straight-line rents and
amortization of above- and below- market leases; therefore, a
comparison of NOI across periods better reflects the trend in
occupancy rates and rental rates of the Company’s properties.
NOI excludes historical cost depreciation and amortization,
which are based on different useful life estimates depending on the
age of the properties, as well as adjust for the effects of real
estate impairment and gains or losses on sales of depreciated
properties, which eliminate differences arising from investment and
disposition decisions. This allows for comparability of operating
performance of the Company’s properties period over period and also
against the results of other equity REITs in the same sectors.
Additionally, by excluding corporate level expenses or benefits
such as interest expense, any gain or loss on early extinguishment
of debt and income taxes, which are incurred by the parent entity
and are not directly linked to the operating performance of the
Company’s properties, NOI provides a measure of operating
performance independent of the Company’s capital structure and
indebtedness. However, the exclusion of these items as well as
others, such as capital expenditures and leasing costs, which are
necessary to maintain the operating performance of the Company’s
properties, and transaction costs and administrative costs, may
limit the usefulness of NOI. NOI may fail to capture significant
trends in these components of U.S. GAAP net income (loss) which
further limits its usefulness.
NOI should not be considered as an alternative to net income
(loss), determined in accordance with U.S. GAAP, as an indicator of
operating performance. In addition, the Company’s methodology for
calculating NOI involves subjective judgment and discretion and may
differ from the methodologies used by other comparable companies,
including other REITs, when calculating the same or similar
supplemental financial measures and may not be comparable with
other companies.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except per
share data)
March 31, 2021
December 31, 2020
(unaudited)
Assets
Cash and cash equivalents
$
788,361
$
703,544
Restricted cash
125,959
114,952
Real estate, net
7,702,711
7,809,964
Loans receivable
85,272
84,030
Equity and debt investments
777,819
876,703
Goodwill
761,368
761,368
Deferred leasing costs and intangible
assets, net
1,392,528
1,467,725
Assets held for disposition
4,094,657
7,426,268
Other assets
834,318
886,817
Due from affiliates
62,257
69,189
Total assets
$
16,625,250
$
20,200,560
Liabilities
Debt, net
$
6,877,291
$
6,872,350
Accrued and other liabilities
1,036,218
1,193,601
Intangible liabilities, net
89,915
93,852
Liabilities related to assets held for
disposition
1,936,643
4,731,772
Due to affiliates
408
601
Dividends and distributions payable
18,516
18,516
Total liabilities
9,958,991
12,910,692
Commitments and contingencies
Redeemable noncontrolling
interests
315,922
305,278
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value per
share; $1,033,750 liquidation preference; 250,000 shares
authorized; 41,350 shares issued and outstanding
999,490
999,490
Common stock, $0.01 par value per
share
Class A, 949,000 shares authorized;
487,103 and 483,406 shares issued and outstanding, respectively
4,871
4,834
Class B, 1,000 shares authorized; 734
shares issued and outstanding
7
7
Additional paid-in capital
7,576,873
7,570,473
Accumulated deficit
(6,460,262
)
(6,195,456
)
Accumulated other comprehensive income
101,056
122,123
Total stockholders’ equity
2,222,035
2,501,471
Noncontrolling interests in investment
entities
4,003,905
4,327,372
Noncontrolling interests in Operating
Company
124,397
155,747
Total equity
6,350,337
6,984,590
Total liabilities, redeemable
noncontrolling interests and equity
$
16,625,250
$
20,200,560
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per
share data)
Three Months Ended March
31,
2021
2020
(unaudited)
Revenues
Property operating income
$
275,216
$
183,953
Interest income
2,676
2,607
Fee income
33,679
25,128
Other income
4,133
5,525
Total revenues
315,704
217,213
Expenses
Property operating expense
132,264
83,477
Interest expense
72,485
63,441
Investment and servicing expense
8,108
5,732
Transaction costs
2,685
596
Depreciation and amortization
170,967
76,236
Impairment loss
15,232
48,532
Compensation expense
Cash and equity-based compensation
83,419
42,737
Carried interest and incentive fee
compensation
(33
)
—
Administrative expenses
18,957
29,558
Settlement loss
—
5,090
Total expenses
504,084
355,399
Other income (loss)
Other gain (loss), net
(8,714
)
(9,703
)
Equity method earnings (losses)
(18,686
)
(11,879
)
Equity method earnings (losses) - carried
interest
(222
)
—
Income (loss) before income
taxes
(216,002
)
(159,768
)
Income tax benefit (expense)
25,825
5,569
Income (loss) from continuing
operations
(190,177
)
(154,199
)
Income (loss) from discontinued
operations
(437,422
)
(249,858
)
Net income (loss)
(627,599
)
(404,057
)
Net income (loss) attributable to
noncontrolling interests:
Redeemable noncontrolling interests
2,449
(548
)
Investment entities
(355,862
)
(21,749
)
Operating Company
(27,896
)
(39,601
)
Net income (loss) attributable to
Colony Capital, Inc.
(246,290
)
(342,159
)
Preferred stock dividends
18,516
19,474
Net income (loss) attributable to
common stockholders
$
(264,806
)
$
(361,633
)
Loss per share—basic
Loss from continuing operations per
share—basic
$
(0.30
)
$
(0.28
)
Net loss attributable to common
stockholders per share—basic
$
(0.56
)
$
(0.76
)
Loss per share—diluted
Loss from continuing operations per
share—diluted
$
(0.30
)
$
(0.28
)
Net loss attributable to common
stockholders per share—diluted
$
(0.56
)
$
(0.76
)
Weighted average number of
shares
Basic
474,899
479,106
Diluted
474,899
479,106
FUNDS FROM OPERATIONS AND CORE
FUNDS FROM OPERATIONS
(In thousands, except per
share data, unaudited)
Three Months Ended
March 31, 2021
March 31, 2020
Net loss attributable to common
stockholders
$
(264,806
)
$
(361,633
)
Adjustments for FFO attributable to common
interests in Operating Company and common stockholders:
Net loss attributable to noncontrolling
common interests in Operating Company
(27,896
)
(39,601
)
Real estate depreciation and
amortization
184,762
130,523
Impairment of real estate
106,077
308,268
Loss (gain) from sales of real estate
(38,102
)
(7,933
)
Less: Adjustments attributable to
noncontrolling interests in investment entities
(188,496
)
(82,329
)
FFO attributable to common interests in
Operating Company and common stockholders
(228,461
)
(52,705
)
Additional adjustments for Core FFO
attributable to common interests in Operating Company and common
stockholders:
Adjustment to CLNC cash dividend
55,648
42,112
Equity-based compensation expense
19,299
8,732
Straight-line rent revenue and expense
17,225
(2,025
)
Amortization of acquired above- and
below-market lease values, net
6,005
(3,519
)
Debt prepayment penalties and amortization
of deferred financing costs and debt premiums and discounts
45,627
15,049
Non-real estate fixed asset depreciation,
amortization and impairment
20,563
92,230
Restructuring and transaction-related
charges(1)
34,482
15,568
Non-real estate (gains) losses, excluding
realized gains or losses within the Digital Other segment
267,812
(117,739
)
Net unrealized carried interest
189
9,230
Deferred taxes and tax effect on certain
of the foregoing adjustments
(34,480
)
(2,927
)
Less: Adjustments attributable to
noncontrolling interests in investment entities
(217,706
)
3,786
Less: Core FFO from discontinued
operations
17,854
(19,856
)
Core FFO attributable to common interests
in Operating Company and common stockholders
$
4,057
$
(12,064
)
Core FFO per common share / common OP
unit(2)
$
0.01
$
(0.02
)
Core FFO per common share / common OP
unit—diluted(2)(3)(4)
$
0.01
$
(0.02
)
Weighted average number of common OP units
outstanding used for Core FFO per common share and OP unit(2)
537,033
540,441
Weighted average number of common OP units
outstanding used for Core FFO per common share and OP unit—diluted
(2)(3)(4)
555,141
540,441
________________
(1)
Transaction-related costs
primarily represent costs and charges incurred as a result of
corporate restructuring and reorganization to implement the digital
evolution. These costs and charges include severance, retention,
relocation, transition, shareholder settlement and other related
restructuring costs, which are not reflective of the Company’s core
operating performance.
(2)
Calculated based on weighted
average shares outstanding including participating securities and
assuming the exchange of all common OP units outstanding for common
shares.
(3)
For the three ended March 31,
2021 and March 31, 2020, excluded from the calculations of diluted
Core FFO per share is the effect of adding back interest expense
associated with convertible senior notes and weighted average
dilutive common share equivalents for the assumed conversion of the
convertible senior notes as the effect of including such interest
expense and common share equivalents would be antidilutive.
(4)
For the three months ended March
31, 2021, included in the calculation of diluted Core FFO per share
are 18.1 million weighted average performance stock units,
performance based restricted stock units and Wafra’s warrants, of
which the issuance and/or vesting are subject to the performance of
the Company's stock price or the achievement of certain Company
specific metrics.
ADJUSTED EBITDA
(In thousands,
unaudited)
Three Months Ended March 31,
2021
Core FFO attributable to common interests
in Operating Company and common stockholders
$
4,057
Adjustments:
Less: Earnings of equity method
investments
(4,794
)
Plus: Preferred dividends
18,516
Plus: Core interest expense
34,351
Plus: Core tax expense
2,048
Plus: Non pro-rata allocation of income
(loss) to NCI
1,415
Plus: Placement fees
40
Digital Operating installation services,
restructuring, integration, and transaction costs
499
Adjusted EBITDA (CLNY OP Share)
$
56,132
RECONCILIATION OF NET INCOME (LOSS) TO
DIGITAL OPERATING ADJUSTED EBITDA
(In
thousands)
Three Months Ended March 31,
2021
Net income (loss) from continuing
operations (Digital Operating)
$
(62,844
)
Adjustments:
Interest expense
31,133
Income tax (benefit) expense
(12,269
)
Depreciation and amortization
122,220
Other (gain) loss
4
EBITDAre:
78,244
Straight-line rent expenses and
amortization of above- and below-market lease intangibles
(399
)
Compensation expense—equity-based
308
Installation services
880
Transaction, restructuring &
integration costs
1,767
Adjusted EBITDA:
$
80,800
CLNY ownership
17.9
%
CLNY OP Share of Adjusted
EBITDA:
$
14,440
The following table summarizes first quarter 2021 net income
(loss) from continuing operations by segment:
(In
thousands)
Net Income (Loss) from
Continuing Operations
Digital Investment Management
$
6,041
Digital Operating
(62,844
)
Digital Other
7,869
Wellness Infrastructure
(41,210
)
Other
(32,218
)
Amounts Not Allocated to Segments
(67,815
)
Total Consolidated
$
(190,177
)
RECONCILIATION OF NET INCOME (LOSS) TO
FRE
(In
thousands)
Three Months Ended March 31,
2021
Net income (loss)
6,041
Adjustments:
Interest income
(1
)
Fee income eliminated in the Company's
consolidated Statement of Operations
1,622
Investment and servicing expense
32
Depreciation and amortization
8,912
Compensation expense—equity-based
1,533
Compensation expense—carried interest and
incentive
(33
)
Administrative expenses—straight-line
rent
(2
)
Administrative expenses—placement agent
fee
59
Equity method (earnings) losses
195
Other (gain) loss, net
(165
)
Income tax (benefit) expense
7
FRE(1)
$
18,200
________________
(1)
Includes a $2.7 million benefit
from the unused portion of a one-time fourth quarter 2020
outperformance incentive expense.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005662/en/
Investor Contact: Severin White Managing Director, Head
of Public Investor Relations 212-547-2777 swhite@clny.com
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