Crystal River Reports Fourth Quarter And Full Year 2008 Financial Results
Market Wire, February, 2009
II. CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
----------------------------------------------------------------------------
December 31, September 30, December 31,
($ in thousands, except share 2008 2008 2007
and per share data) (unaudited) (unaudited)
----------------------------------------------------------------------------
ASSETS
Available-for-sale securities,
at fair value $ 72,916 $ 191,367 $ 1,815,246
Real estate loans 9,034 11,069 170,780
Real estate loans held for sale 5,058 20,375 -
Commercial real estate, net 228,259 229,885 234,763
Other investments 1,550 1,550 37,761
Intangible assets 75,541 76,949 81,174
Cash and cash equivalents 6,239 7,035 27,521
Restricted cash 26,107 26,924 68,706
Receivables 7,292 7,170 15,326
Rent enhancement receivable,
related party 13,828 14,451 16,311
Prepaid expenses and other
assets 939 1,097 540
Deferred financing costs, net 1,533 1,553 10,750
Derivative assets 5 5 560
-------------------------------------------
Total Assets $ 448,301 $ 589,430 $ 2,479,438
-------------------------------------------
-------------------------------------------
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Liabilities
Accounts payable, accrued
expenses and other $ 2,652 $ 2,666 $ 1,817
Due to manager - 57 678
Dividends payable 2,511 2,498 16,828
Intangible liabilities 72,265 73,635 77,745
Repurchase agreements - 8,335 1,276,121
Collateralized debt obligations(1) 45,429 153,362 486,608
Junior subordinated notes 51,550 51,550 51,550
Mortgages payable 219,380 219,380 219,380
Senior mortgage-backed notes,
related party - - 99,815
Secured revolving credit
facility, related party 32,920 41,420 67,319
Interest payable 1,357 2,457 9,256
Derivative liabilities 57,646 32,320 61,729
-------------------------------------------
Total Liabilities 485,710 587,680 2,368,846
-------------------------------------------
-------------------------------------------
Commitments and contingencies
Stockholders' Equity (Deficit)
Preferred stock, par value
$0.001 per share,
100,000,000 shares authorized,
no shares issued and outstanding - - -
Common stock, $0.001 par value,
500,000,000 shares authorized,
24,905,252; 24,875,282; and
24,704,945 shares issued and
outstanding, respectively 25 25 25
Additional paid-in capital 564,560 564,441 562,930
Accumulated other comprehensive
loss (9,815) (10,171) (15,481)
Accumulated deficit (592,179) (552,545) (436,882)
-------------------------------------------
Total Stockholders' Equity
(Deficit) (37,409) 1,750 110,592
-------------------------------------------
Total Liabilities and
Stockholders' Equity (Deficit) $ 448,301 $ 589,430 $ 2,479,438
-------------------------------------------
-------------------------------------------
(1) Fair value at December 31, 2008, and September 30, 2008; cost at
December 31, 2007.
Condensed Consolidated Statements of Operations (Unaudited)
----------------------------------------------------------------------------
($ in
thousands,
except share Three months ended Year ended
and Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
per share data) 2008 2008 2007 2008 2007
----------------------------------------------------------------------------
Revenues
Interest income
available-for-
sale
securities $ 24,092 $ 21,069 $ 40,158 $ 109,453 $ 194,130
Interest income
real estate
loans 812 936 3,839 6,567 17,080
Other interest
and
dividend income 124 185 1,513 1,196 8,709
----------------------------------------------------------
Total interest
and
dividend income 25,028 22,190 45,510 117,216 219,919
Rental income,
net 5,614 5,399 5,554 22,225 16,210
----------------------------------------------------------
Total revenues 30,642 27,589 51,064 139,441 236,129
----------------------------------------------------------
Expenses
Interest
expense 9,241 9,302 31,579 53,543 156,797
Management
fees,
related party (102) 243 781 1,226 6,378
Professional
fees 948 480 1,061 2,681 3,904
Depreciation
and
amortization 3,022 3,022 3,023 12,088 8,948
Incentive fees - - - - 124
Insurance
expense 372 480 264 1,662 936
Directors' fees 85 86 182 451 695
Public company
expense 150 105 65 668 522
Commercial real
estate expenses 356 348 334 1,541 1,011
Provision for
loss
on real estate
loans 6,223 4,401 4,500 27,073 4,500
Other expenses 126 237 273 1,285 700
----------------------------------------------------------
Total expenses 20,421 18,704 42,062 102,218 184,515
----------------------------------------------------------
Other Revenues
(Expenses)
Realized net
gain
(loss) on sale
of
available-for-
sale
securities,
real
estate loans
and
other
investments (215) 97 (376) (5,166) (1,698)
Realized and
unrealized loss
on derivatives (26,496) (6,152) (45,100) (70,679) (84,951)
Impairment of
available-for-
sale
securities (30,576) (26,876) (213,945) (142,916) (317,931)
Net change in
assets and
liabilities
valued under
fair
value option 10,800 (32,305) - (123,708) -
Foreign
currency
exchange gain - - - - 4,292
Income (loss)
from
equity
investments - - 431 (40) 2,610
Other (857) (397) (426) (1,806) 186
----------------------------------------------------------
Total other
expenses (47,344) (65,633) (259,416) (344,315) (397,492)
----------------------------------------------------------
Net Loss $ (37,123) $ (56,748) $ (250,414) $(307,092) $ (345,878)
----------------------------------------------------------
----------------------------------------------------------
Net loss per
share
- basic and
diluted $ (1.48) $ (2.28) $ (10.10) $ (12.35) $ (13.86)
----------------------------------------------------------
----------------------------------------------------------
Weighted
average
shares of
common
stock
outstanding:
Basic and
diluted 25,022,733 24,882,612 24,783,624 24,866,206 24,962,708
----------------------------------------------------------
----------------------------------------------------------
Dividends
declared
per share of
common stock $ 0.10 $ 0.10 $ 0.68 $ 1.18 $ 2.72
----------------------------------------------------------
----------------------------------------------------------
Net Investment Income (Unaudited)
----------------------------------------------------------------------------
($ in
thousands,
except share Three months ended Year ended
and Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
per share data) 2008 2008 2007 2008 2007
----------------------------------------------------------------------------
Total interest
and dividend
income $ 25,028 $ 22,190 $ 45,510 $ 117,216 $ 219,919
Rental income,
net 5,614 5,399 5,554 22,225 16,210
Income (loss)
from equity
investments - - 431 (40) 2,610
Interest expense (9,241) (9,302) (31,579) (53,543) (156,797)
----------------------------------------------------------
Net Investment
Income $ 21,401 $ 18,287 $ 19,916 $ 85,858 $ 81,942
----------------------------------------------------------
----------------------------------------------------------
Net Investment
Income Per Share $ 0.86 $ 0.73 $ 0.80 $ 3.45 $ 3.28
----------------------------------------------------------
----------------------------------------------------------
Weighted average
shares of common
stock
outstanding:
Basic and
diluted 25,022,733 24,882,612 24,783,624 24,866,206 24,962,708
----------------------------------------------------------
----------------------------------------------------------
Reconciliation of Net Loss to Operating Earnings (Unaudited)
----------------------------------------------------------------------------
($ in
thousands,
except share Three months ended Year ended
and Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
per share data) 2008 2008 2007 2008 2007
----------------------------------------------------------------------------
Net Loss $ (37,123) $ (56,748) $ (250,414) $ (307,092) $ (345,878)
Realized net
(gain) loss on
sale of
available-for-
sale securities,
real estate
loans, and
other
investments 215 (97) 376 5,166 1,698
Realized and
unrealized loss
on derivatives 26,496 6,152 45,100 70,679 84,951
Impairment of
available-for-
sale securities 30,576 26,876 213,945 142,916 317,931
Net change in
assets and
liabilities
valued under fair
value option (10,800) 32,305 - 123,708 -
Provision for
loss on real
estate loans 6,223 4,401 4,500 27,073 4,500
Foreign currency
exchange gain - - - - (4,292)
Depreciation and
amortization 3,022 3,022 3,023 12,088 8,948
Cash settlements
on economic
hedges that did
not qualify for
hedge accounting
treatment (1,530) (2,026) 801 (7,418) 2,059
----------------------------------------------------------
----------------------------------------------------------
Operating
Earnings $ 17,079 $ 13,885 $ 17,331 $ 67,120 $ 69,917
----------------------------------------------------------
----------------------------------------------------------
Operating
Earnings Per
Share $ 0.68 $ 0.56 $ 0.70 $ 2.70 $ 2.80
----------------------------------------------------------
----------------------------------------------------------
Weighted average
number of shares
outstanding:
Basic and
diluted 25,022,733 24,882,612 24,783,624 24,866,206 24,962,708
----------------------------------------------------------
----------------------------------------------------------
Comprehensive Loss (Unaudited)
----------------------------------------------------------------------------
Three months ended Year ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
($ in thousands) 2008 2008 2007 2008 2007
----------------------------------------------------------------------------
Net Loss $ (37,123) $ (56,748) $ (250,414) $ (307,092) $ (345,878)
Changes in OCI
- securities
available
for sale(1) (112) (1,033) 96,333 (7,344) 6,176
Realization of
deferred
unrealized
(gains) losses on
cash flow hedges - - (21,510) 13,181 (32,642)
Amortization of
net (gain) loss
on cash flow hedges
into interest
expense 468 586 (511) 1,499 (2,227)
----------------------------------------------------------------------------
Comprehensive
Loss $ (36,767) $ (57,195) $ (176,102) $ (299,756) $ (374,571)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Represents reclassification from OCI ("Other Comprehensive Income") to
impairment of available-for-sale securities.
III. SUPPLEMENTAL INFORMATION
Total Investment Portfolio at December 31, 2008
The following table summarizes the Company's investment portfolio at
December 31, 2008, September 30, 2008, and December 31, 2007:
----------------------------------------------------------------------------
December 31, 2008 September 30, 2008 December 31, 2007
Carrying Carrying Carrying
($ in millions) Value % Total Value % Total Value % Total
----------------------------------------------------------------------------
Available for
sale securities
Agency MBS $ - - $ - - $ 1,246.7 55.2%
CMBS 58.1 18.3% 158.7 34.9% 399.4 17.7%
Prime RMBS 9.2 2.9% 22.7 5.0% 115.7 5.1%
Subprime RMBS 5.6 1.8% 10.0 2.2% 52.7 2.3%
Preferred stock 0.0 0.0% 0.0 0.0% 0.7 0.1%
Direct real
estate loans
Construction
loans 0.4 0.1% 2.7 0.6% 20.9 0.9%
Mezzanine
loans(1) 11.2 3.5% 26.2 5.8% 31.8 1.4%
Whole loans 2.5 0.8% 2.5 0.6% 118.1 5.2%
Real estate
finance fund - - - - 36.2 1.6%
Commercial real
estate--owned(2) 228.3 72.1% 229.9 50.6% 234.8 10.4%
Other 1.6 0.5% 1.6 0.3% 1.6 0.1%
----------------------------------------------------------------------------
Total $ 316.9 100.0% $ 454.3 100.0% $ 2,258.6 100.0%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Includes one loan in the amount of $5.1 million held for sale.
(2) Excludes intangible assets.
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