NorthStar Realty Finance Announces First Quarter 2013 Results

NEW YORK, May 3, 2013 /PRNewswire/ --  

First Quarter 2013 Highlights

  • Cash available for distribution ("CAD") of $0.21 per share.
  • Increased first quarter 2013 cash dividend to $0.19 per common share, representing a 90% increase over the last seven quarters.
  • $1.6 billion of investments closed in 2013, including $677 million of invested equity.
  • Total capital raised to date of $887 million in our non-traded REIT, including $287 million raised since year end and $108 million raised in April.

NorthStar Realty Finance Corp. (NYSE: NRF) today announced its results for the first quarter ended March 31, 2013.

First Quarter 2013 Results

NorthStar reported cash available for distribution ("CAD") for the first quarter 2013 of $38.6 million, or $0.21 per share. For the first quarter 2013, NorthStar reported net cash provided by operating activities of $42.7 million.  For more information and a reconciliation of CAD to net cash provided by operating activities, please refer to the tables on the following pages.

Net income to common stockholders for the first quarter 2013 was $36.6 million, or $0.20 per diluted share, compared to a net loss of $(33.9) million, or $(0.33) per diluted share for the first quarter 2012.  First quarter 2013 net income includes $30.3 million of non-cash fair value adjustments, compared to $(73.9) million of non-cash fair value adjustments for the first quarter 2012.  These non-cash fair value adjustments are excluded from CAD and adjusted funds from operations.

David T. Hamamoto, chairman and chief executive officer, commented, "NorthStar has had an active beginning to 2013 and as a result we were able to announce a seventh consecutive quarterly increase to our common stock dividend.  This quarter we also introduced a new operating metric that we believe provides investors an important indicator of our operating performance and a metric that we strongly consider in evaluating our distribution policy, which we intend to continue doing on a quarterly basis. While our CAD of $0.21 per share for the first quarter was comfortably in excess of our current dividend, we deployed a substantial amount of capital at accretive levels in the second half of the first quarter and at the beginning of the second quarter, which we expect will translate into higher CAD per share in the coming quarters."

Investments

Real Estate

Year to date, NorthStar made $1.1 billion of equity investments in real estate, including the acquisition of an $865 million portfolio of manufactured housing communities which was financed with eight separate 10-year, non-recourse mortgages in the aggregate amount of $640 million at a weighted average fixed interest rate of 4.02%. NorthStar expects to earn an initial current yield of approximately 14% on its $215 million of invested equity.  Additionally, NorthStar acquired seven multifamily properties comprising approximately 2,600 units for an aggregate purchase price of $212 million, which was financed with seven separate 10-year, non-recourse mortgages in the aggregate amount of $156 million at a weighted average fixed interest rate of 3.91%.  NorthStar expects to earn a weighted average initial current yield of 14% on its $54 million of invested equity.

CRE Loans

Year to date, NorthStar originated four commercial real estate loans with $204 million aggregate principal amount, including a $166 million loan in connection with the financing of the Milford Plaza hotel.  NorthStar expects to earn a weighted average initial current yield of approximately 13% on its $119 million of invested equity in these loans with potential upside through NorthStar's 35% ownership interest in the Milford Plaza hotel and the retail component of the hotel, pro-rata with NorthStar Real Estate Income Trust, Inc. ("NorthStar Income").

Opportunistic Investments

NorthStar completed the closing of the acquisitions of 45 limited partnership interests in real estate private equity funds.  On February 15, 2013, NorthStar funded a total of $282 million in connection with the initial closing of this transaction, which reflects its proportionate purchase price for all of the limited partnership interests (the "Funds").  The aggregate reported net asset value of the Funds was $789 million at June 30, 2012. NorthStar is entitled to $41 million of distributions from the Funds since June 30, 2012 through March 31, 2013 and in the first quarter recorded $8 million of income and $33 million of return of capital. For additional details regarding this transaction, please refer to the tables on the following pages.

The principal proceeds NorthStar could receive from CDO bonds acquired year to date is $13 million, which were purchased for $7 million. As of May 3, 2013, the principal proceeds NorthStar could receive from its owned CDO bonds is $709 million, of which $559 million was repurchased at an average price of 32% in the secondary market and has a weighted average original credit rating of A/A2.  The discount to par of $383 million represents potential imbedded cash flows that we may realize in future periods in addition to our capital invested in these bonds. 

NorthStar had approximately $8.7 billion of assets under management as of March 31, 2013, adjusted for the $865 million manufactured housing portfolio acquired on April 5, 2013.

For additional details regarding NorthStar's investments, please refer to the tables on the following pages and to the corporate presentation which will be posted on NorthStar's website, www.nrfc.com.  

Asset Management Business

During the first quarter 2013, NorthStar earned $4.5 million of fees from its management of NorthStar Income.  In addition, during the first quarter 2013, NorthStar received management and other fees from its consolidated CDOs of $4.5 million, which are eliminated on NorthStar's consolidated statement of operations.

NorthStar Income raised $887 million of total capital through April 30, 2013, including $287 million year to date and $108 million in April, through NorthStar Realty Securities, LLC, NorthStar's wholly-owned broker-dealer. NorthStar Realty Securities, LLC currently has total signed selling agreements, on behalf of NorthStar Income, with broker-dealers covering more than 74,000 registered representatives.  NorthStar expects to earn annual net fees approximately equal to three percentage points based on total capital raised for each of our current non-traded REITs.

In 2013, we, through our wholly-owned subsidiary, made an aggregate of $336 million of investments on behalf of NorthStar Income.

Liquidity, Financing and Capital Markets Highlights

As of May 1, 2013, unrestricted cash was approximately $284 million.

In February 2013, NorthStar issued 34.5 million shares of its common stock at a public offering price of $8.39 per share and received net proceeds of $280 million.

In March 2013, NorthStar entered into a $200 million credit facility with Deutsche Bank AG, Cayman Island Branch which will be used to finance loan originations and has a term of five years, including extension options that are subject to satisfaction of customary conditions.

In April 2013, NorthStar issued 8 million shares of its new 8.5% Series D Preferred Stock at a par value of $25 per share and received net proceeds of $194 million.

Currently, NorthStar's only near-term unsecured corporate debt obligations relate to its exchangeable senior notes, of which $36 million principal amount of 11.5% notes are due in June 2013 and $13 million principal amount of 7.25% notes are payable in June 2014 at the holders' option. 

In April 2013, NorthStar sent a notice to the issuer of N-Star Real Estate CDO II (the "CDO II") exercising its option to redeem (the "Redemption") all of the outstanding bonds issued by CDO II.  NorthStar owns $71 million par amount of CDO II bonds that it repurchased in the open market at an aggregate purchase price of $36 million.  NorthStar expects that the proceeds from the Redemption will repay all or substantially all of NorthStar's repurchased CDO II bonds. If the Redemption is completed, NorthStar will deconsolidate N-Star Real Estate CDO II.  There is no assurance that the Redemption will be completed on the terms anticipated, if at all.

Portfolio Management

As of March 31, 2013, NorthStar did not have any loans on non-performing status ("NPL") compared to one loan with a $13 million aggregate principal amount and a $7 million carrying value at December 31, 2012.  NorthStar categorizes a loan as a NPL if it is in maturity default and/or is past due 90 days on its contractual debt service payments.

During the first quarter 2013, NorthStar recorded $2.3 million of net provision for loan losses, compared to $3.3 million of net provision for loan losses during the fourth quarter 2012.  As of March 31, 2013, loan loss reserves totaled $153 million, or 7% of total loans, related to 11 loans with a carrying value of $189 million.

As of March 31, 2013, NorthStar's net lease portfolio was 95% leased with a 5.5 year weighted average remaining lease term.  As of March 31, 2013, NorthStar's healthcare portfolio that was leased to third-party operators was 99% leased with a weighted average lease coverage of 1.24x and a 6.7 year weighted average remaining lease term.  As of March 31, 2013, NorthStar's manufactured housing communities portfolio, including the $865 million portfolio acquired on April 5, 2013, was 86% leased.  For additional details regarding NorthStar's manufactured housing communities portfolio, please refer to the tables on the following pages.

Stockholders' Equity

As of March 31, 2013, NorthStar had 208,583,630 total common shares and operating partnership units outstanding and $25 million of non-controlling interests relating to its operating partnership.  GAAP book value per share was $5.31 at March 31, 2013, which includes negative GAAP equity in certain of our non-recourse CDO financings due to non-cash fair value adjustments.  Adjusted book value at March 31, 2013 would be $6.78 per share, exclusive of certain unrealized and other adjustments, loan loss reserves and accumulated depreciation and amortization.  

The adjusted book value does not take into consideration any value related to the in-place and anticipated advisory fee income streams generated by NorthStar's sponsored, non-traded REIT vehicles and NorthStar's CDO management fees.  NorthStar expects over $40 million of net asset management fees in 2013.  For a reconciliation of adjusted book value per share to GAAP book value per share, please refer to the tables on the following pages.

Common Dividend Announcement

On May 1, 2013, NorthStar announced that its Board of Directors declared a cash dividend of $0.19 per share of common stock, payable with respect to the quarter ended March 31, 2013.  The dividend is expected to be paid on May 17, 2013 to shareholders of record as of the close of business on May 13, 2013. The Company's common shares will begin trading ex-dividend on May 9, 2013.

Earnings Conference Call

NorthStar will hold a conference call to discuss first quarter 2013 financial results on May 3, 2013, at 9:00 a.m. Eastern Time.  Hosting the call will be David Hamamoto, chairman and chief executive officer; Albert Tylis, president; Daniel Gilbert, chief investment and operating officer; and Debra Hess, chief financial officer. 

The call will be webcast live over the Internet from NorthStar's website, www.nrfc.com, and will be archived on the Company's website.  The call can also be accessed live over the phone by dialing 877-941-9205, or for international callers, by dialing 480-629-9645.

A replay of the call will be available one hour after the call through Friday, May 10, 2013 by dialing 800-406-7325 or, for international callers, 303-590-3030, using pass code 4615468.

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is a diversified commercial real estate investment and asset management company that is organized as an internally managed REIT.  For more information about NorthStar Realty Finance Corp., please visit www.nrfc.com.

 

NorthStar Realty Finance Corp.



Consolidated Statements of Operations (Unaudited)





($ in thousands, except share and per share data)







Three Months Ended March 31,


2013


2012






Net interest income





Interest income


$                   70,335


$             80,816

Interest expense on debt and securities


11,397


13,734

Net interest income on debt and securities


58,938


67,082






Other revenues





Rental and escalation income


38,896


27,662

Commission income


16,940


7,399

Advisory and other fees - related party


4,508


517

Other revenue


544


104

    Total other revenues


60,888


35,682

Expenses





Other interest expense


26,250


21,130

Real estate properties – operating expenses


7,031


4,686

Asset management expenses


2,918


2,284

Commission expense


15,369


6,580

Transaction costs


3,753


2,233

Provision for loan losses, net


2,336


6,840

General and administrative





Salaries and equity-based compensation (1)


18,330


13,199

Other general and administrative


5,026


3,953

    Total general and administrative


23,356


17,152

Depreciation and amortization


15,074


12,215

    Total expenses


96,087


73,120

Income (loss) from operations


23,739


29,644

Equity in earnings (losses) of unconsolidated ventures


8,313


(501)

Other income (loss)


-


20,258

Unrealized gain (loss) on investments and other


13,585


(95,406)

Realized gain (loss) on investments and other


4,082


15,352

Income (loss) from continuing operations


49,719


(30,653)

Income (loss) from discontinued operations


(23)


96

Net income (loss)


49,696


(30,557)

    Less: net (income) loss allocated to non-controlling interests


(1,733)


1,963

Preferred stock dividends


(11,341)


(5,323)

Net income (loss) attributable to NorthStar Realty Finance Corp. common stockholders


$                   36,622


$           (33,917)






Earnings (loss) per share:





Income (loss) per share from continuing operations (basic)


$                       0.21


$               (0.33)

Income (loss) per share from discontinued operations (basic)


-


-

Basic


$                       0.21


$               (0.33)

Diluted 


$                       0.20


$               (0.33)






Weighted average number of shares:





Basic


176,675,176


102,247,118

Diluted 


188,213,000


107,393,827

Dividends declared per share of common stock


$                       0.19


$                 0.15


(1) The three months ended March 31, 2013 and 2012 include $6.0 million and $2.3 million, respectively, of equity‑based compensation expense.

 

 

NorthStar Realty Finance Corp.





Consolidated Balance Sheets





($ in thousands, except share data)







March 31, 2013


December 31,



(Unaudited)


2012






Assets





Cash and cash equivalents


$                 393,709


$                 444,927

Restricted cash


222,861


360,075

Operating real estate, net


1,527,228


1,401,658

Real estate securities, available for sale


1,151,217


1,124,668

Real estate debt investments, net


1,792,653


1,832,231

Investments in and advances to unconsolidated ventures ($268,329 at fair value as of March 31, 2013)


379,111


111,025

Receivables, net of allowance of $1,889 as of March 31, 2013 and $1,526 as of December 31, 2012


57,121


28,413

Receivables, related parties


12,307


23,706

Unbilled rent receivable, net of allowance of $328 as of March 31, 2013


16,996


16,129

Derivative assets, at fair value


12,420


6,229

Deferred costs and intangible assets, net


93,686


97,700

Assets of properties held for sale


1,595


1,595

Other assets


77,525


65,422

Total assets(1)


$              5,738,429


$              5,513,778






Liabilities





CDO bonds payable 


$              1,950,787


$              2,112,441

Mortgage notes payable


1,114,890


1,015,670

CMBS bonds payable


98,053


98,005

Secured term loan


14,623


14,664

Credit facilities


55,505


61,088

Exchangeable senior notes


290,831


291,031

Junior subordinated notes, at fair value


206,794


197,173

Accounts payable and accrued expenses


56,199


45,895

Escrow deposits payable


88,062


90,032

Derivative liabilities, at fair value


155,080


170,840

Other liabilities


84,845


86,075

Total liabilities(2)


4,115,669


4,182,914






Commitments and contingencies 





Equity





NorthStar Realty Finance Corp. Stockholders' Equity





Preferred stock, $536,640 aggregate liquidation preference as of March 31, 2013 and





December 31, 2012, respectively


504,018


504,018

Common stock, $0.01 par value, 500,000,000 shares authorized, 198,263,269 and 163,607,259





shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively    


1,982


1,636

Additional paid-in capital


1,476,158


1,195,131

Retained earnings (accumulated deficit)


(375,730)


(376,685)

Accumulated other comprehensive income (loss)


(18,883)


(22,179)

     Total NorthStar Realty Finance Corp. stockholders' equity


1,587,545


1,301,921

Non-controlling interests


35,215


28,943

Total equity


1,622,760


1,330,864

Total liabilities and equity


$              5,738,429


$              5,513,778

_____________________________





(1) Assets of consolidated VIEs included in the total assets above:





Restricted cash


$                 179,777


$                 320,815

Operating real estate, net


437,706


342,461

Real estate securities, available for sale


1,033,975


1,015,972

Real estate debt investments, net 


1,428,536


1,478,503

Investments in and advances to unconsolidated ventures


59,646


59,939

Receivables, net of allowance 


16,424


16,609

Unbilled rent receivable


2,702


2,125

Deferred costs and intangible assets, net


35,871


37,753

Assets of properties held for sale 


1,595


1,595

Other assets 


6,986


12,689

Total assets of consolidated VIEs


$              3,203,218


$              3,288,461






     (2) Liabilities of consolidated VIEs included in the total liabilities above:





CDO bonds payable 


$              1,950,787


$              2,112,441

Mortgage notes payable


290,483


228,446

Secured term loan


14,623


14,664

Accounts payable and accrued expenses 


13,368


13,626

Escrow deposits payable 


66,021


67,406

Derivative liabilities, at fair value 


155,080


170,840

Other liabilities 


24,057


25,144

Total liabilities of consolidated VIEs


$              2,514,419


$              2,632,567

 

NorthStar Realty Finance Corp.




Consolidated Statements of Cash Flows (Unaudited)




($ in thousands, except share data)







Three Months Ended March 31, 


2013


2012

Cash flows from operating activities:




Net income (loss) 

$                  49,696


$              (30,557)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:




Equity in (earnings) loss of unconsolidated ventures 

(8,313)


501

Depreciation and amortization 

15,074


12,306

Amortization of premium/discount on investments

(13,054)


(19,957)

Interest accretion on investments

(321)


(337)

Amortization of deferred financing costs 

1,404


860

Amortization of equity-based compensation 

6,018


2,329

Unrealized (gain) loss on investments and other 

(30,339)


73,862

Realized gain (loss) on investments and other  / other income

(4,082)


(15,610)

Reversal of accrued loss contingency and other costs

-


(22,041)

Distributions from unconsolidated ventures 

8,471


252

Amortization of capitalized above/below market leases 

(398)


(284)

Unbilled rent receivable

(898)


(686)

Provision for loan losses, net

2,336


6,840

Allowance for uncollectable accounts 

744


118

Other

73


-

Discount and loan fees received 

2,629


888

Changes in assets and liabilities:




Restricted cash 

3,979


(3,002)

Receivables 

(2,597)


(5,340)

Other assets 

2,646


9,982

Receivables, related parties

(396)


2,489

Accounts payable and accrued expenses 

10,297


(23,792)

Other liabilities 

(295)


(216)

Net cash provided by (used in) operating activities 

42,674


(11,395)

Cash flows from investing activities:




Acquisitions of operating real estate, net 

(117,184)


(7,650)

Improvements of operating real estate

(2,772)


(399)

Deferred costs and intangible assets

(136)


(267)

Net proceeds from disposition of operating real estate 

-


5,068

Acquisitions of real estate securities, available for sale

-


(54,871)

Proceeds from sales of real estate securities, available for sale

20,114


100,562

Repayments on real estate securities, available for sale

67,927


29,840

Originations/acquisitions of real estate debt investments 

(11,757)


(47,781)

Repayments on real estate debt investments

20,530


63,120

Proceeds from sales of real estate debt investments 

-


5,343

Change in restricted cash

(3,239)


(4,958)

Other assets 

(26,570)


3,302

Investment in and advances to unconsolidated ventures 

(264,844)


(1,165)

Distributions from unconsolidated ventures 

9,987


169

Net cash provided by (used in) investing activities 

(307,944)


90,313

Cash flows from financing activities:




Purchase of derivative instruments

(9,560)


-

Settlement of derivative instruments

-


(8,163)

Borrowings from mortgage notes

101,756


4,500

Repayments of mortgage notes

(2,536)


(2,168)

Borrowings under credit facilities

8,060


9,607

Repayments of credit facilities

(13,643)


(4,041)

Proceeds from CDO bond reissuance

-


7,558

Proceeds from CDO bonds 

-


10,000

Repayments of CDO bonds

(230,454)


(141,295)

Repurchases of CDO bonds

(6,543)


(7,450)

Repayments of secured term loans

(41)


-

Payment of deferred financing costs 

(1,833)


(88)

Change in restricted cash

137,089


5,713

Repurchases and repayment of exchangeable senior notes 

(1,000)


-

Net proceeds from preferred stock offering 

-


35,198

Net proceeds from common stock offering

280,364


90,312

Proceeds from dividend reinvestment and stock purchase plan

58


43

Dividends (common and preferred) 

(47,008)


(20,322)

Contributions from non-controlling interests

1,423


-

Distributions / repayments to non-controlling interests

(2,080)


(8,890)

Net cash provided by (used in) financing activities 

214,052


(29,486)

Net increase (decrease) in cash and cash equivalents 

(51,218)


49,432

Cash and cash equivalents—beginning of period 

444,927


144,508

Cash and cash equivalents—end of period 

$                393,709


$             193,940

 

Non-GAAP Financial Measures

Included in this press release are certain "non-GAAP financial measures," which are measures of NorthStar's historical or future financial performance that are different from measures calculated and presented in accordance with accounting principles generally accepted in the United States, or GAAP, within the meaning of the applicable Securities and Exchange Commission, or SEC, rules.  These include: Cash Available for Distribution, Funds From Operations and Adjusted Funds From Operations.   NorthStar believes these terms can be useful measures of its performance, which are further defined below.

Cash Available for Distribution ("CAD")

CAD is a non-GAAP financial measure. NorthStar calculates CAD by adjusting net cash provided by (used in) operating activities to deduct preferred stock dividends; to reflect actual distributions received related to income earned in joint ventures; to reflect timing differences related to certain G&A expenses and corporate borrowing payments; to reflect timing differences related to non-capitalized transaction costs that are amortized over the life of the investment for purposes of CAD; to include amortization of discounts related to repurchased CDO bonds, investments owned outside CDOs and similar income items; and to exclude one-time events pursuant to changes in GAAP and certain other non-recurring items.

NorthStar believes that CAD provides investors and management with a meaningful indicator of the operating performance of the Company. NorthStar management also uses CAD, among other measures, to evaluate profitability and the Board of Directors considers CAD in determining NorthStar's quarterly cash dividends.  CAD may fluctuate from period to period based upon a variety of factors, including, but not limited to, the timing and amount of investments, repayments and asset sales, capital raised, use of leverage, changes in the expected yield of investments and the overall conditions in commercial real estate and the economy generally.

CAD should not be considered as an alternative to net income (determined in accordance with GAAP) or as an indication of our cash from operating activities (determined in accordance with GAAP) or a measure of our liquidity or profitability.  In addition, our methodology for calculating CAD 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 these companies.   

Reconciliation of Cash Available for Distribution



(Amounts in thousands except per share data)





Three Months Ended



March 31, 2013




Net cash provided by operating activities 


$                       42,674







Preferred stock dividends 


(11,341)

Adjustment for joint ventures


(153)

Timing differences related to G&A and corporate borrowings


(4,905)

Timing differences related to non-capitalized transaction costs


928

Amortization of discounts and other (1)


11,375




CAD


$                     38,578




CAD per share (2)


$                         0.21


(1)

Realized discounts related to repurchased CDO bonds totaled $53 million in 2012 and are currently expected to be approximately $60 million in

2013. For CAD, realized discounts on CDO bonds are assumed to equal annual amortization of total expected cash discount over a 5.7 year

weighted average remaining life as of January 1, 2013.

(2)

CAD per share does not take into account any potential dilution from exchangeable notes, warrants or restricted stock units that are subject to

performance metrics that are not currently achieved.

 

Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)

Management believes that funds from operations, or FFO, and adjusted funds from operations, or AFFO, each of which are non-GAAP measures, are additional appropriate measures of the operating performance of a REIT and NorthStar in particular. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (NAREIT), as net income (loss) (computed in accordance with GAAP), excluding gains (losses) from sales of depreciable properties, the cumulative effect of changes in accounting principles, real estate‑related depreciation and amortization, impairment charges on depreciable property owned directly or indirectly and after adjustments for unconsolidated ventures.    FFO, as defined by NAREIT, is a computation made by analysts and investors to measure a real estate company's cash flow generated by operations.

NorthStar calculates AFFO by subtracting from or adding to FFO:

  • normalized recurring expenditures that are capitalized by NorthStar and then amortized, but which are necessary to maintain NorthStar's properties and revenue stream, e.g., leasing commissions and tenant improvement allowances;
  • an adjustment to reverse the effects of transaction costs;
  • an adjustment to reverse the effects of the straight‑lining of rental income or expense and fair value lease revenue;
  • the amortization or accrual of various deferred costs including intangible assets and equity-based compensation;
  • an adjustment to reverse the effects of acquisition gains or losses; and
  • an adjustment to reverse the effects of non-cash unrealized gains (losses).

NorthStar's calculation of AFFO differs from the methodology used for calculating AFFO by certain other REITs and, accordingly, our AFFO may not be comparable to AFFO reported by other REITs.

Neither FFO nor AFFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP.  Furthermore, FFO and AFFO do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties.  Neither FFO nor AFFO should be considered as an alternative to net income as an indicator of NorthStar's operating performance or as an alternative to cash flow from operating activities as a measure of NorthStar's liquidity.

NorthStar urges investors to carefully review the GAAP financial information included as part of the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and quarterly earnings releases.

Funds  from Operations (FFO) and Adjusted Funds from Operations (AFFO) ($ in thousands, except per share data)







Three Months Ended March 31,



2013


2012

Funds from operations:





Income (loss) from continuing operations 


$                   49,719


$           (30,653)

Non-controlling interests(1)


-


260

Net income (loss) before non-controlling interest in Operating Partnership


49,719


(30,393)






Adjustments:





Preferred stock dividends


(11,341)


(5,323)

Depreciation and amortization


14,375


10,829

Funds from discontinued operations


(23)


187

Real estate depreciation and amortization, unconsolidated ventures                                     


197


207

Funds from operations


52,927


(24,493)






Adjusted funds from operations:





Funds from operations


52,927


(24,493)

Transaction costs


3,753


2,233

Straight-line rental income, net


(859)


(670)

Straight-line rental income/expense and amortization of above/below market leases, unconsolidated ventures


229


234

Amortization of deferred financing costs


1,404


860

Amortization of above/below market leases


(398)


(258)

Amortization of equity-based compensation


6,018


2,329

Unrealized (gain) loss from fair value adjustments


(30,339)


73,862

Adjusted funds from operations


$                   32,735


$             54,097






FFO per share of common stock (2)


$                       0.29


$               (0.23)

AFFO per share of common stock(2)


$                       0.18


$                 0.50

(1)

Amount excludes non-controlling limited partner interest in NorthStar's operating partnership.

(2)

FFO and AFFO per share does not take into account any potential dilution from exchangeable notes, warrants or restricted stock units that are subject to performance

metrics that are not currently achieved.

 

Assets Under Management at March 31, 2013(1)




($ in thousands)





  Amount(2)


%