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Colony Credit Real Estate, Inc. Announces
Third Quarter 2019 Financial Results And Significant Corporate Events
LOS ANGELES, November 7, 2019 Colony Credit Real Estate, Inc. (NYSE: CLNC) (Colony Credit Real Estate or the Company) today announced its financial results for the third quarter ended September 30, 2019 and certain updates.
Kevin P. Traenkle, President and Chief Executive Officer of Colony Credit Real Estate commented, For several reasons, the third quarter has been a landmark period for the Company. First, our Core Portfolio and primary business of providing high-quality commercial real estate loans continues to grow and perform well, as evidenced by over $480 million of new quarterly originations. Additionally, we successfully closed an accretive $1 billion CLO financing in October, opening new sources of capital, de-risking our balance sheet and increasing our return on equity.
Mr. Traenkle added, However, and more importantly, we made great strides in advancing our strategic plan to bifurcate our Companys assets into our Core Portfolio, which we plan to grow, and a Legacy, Non-Strategic Portfolio, which we plan to monetize and reinvest into our Core Portfolio. As part of this undertaking and with the full support of our Board, third party valuation experts assisted the Company in a robust strategic reassessment of our entire asset base. During this process we identified and separated a Legacy, Non-Strategic Portfolio and made meaningful changes to the original business plans. Going forward, we plan to report the operations and dispositions from our Core Portfolio and the Legacy, Non-Strategic Portfolio separately.
Mr. Traenkle continued to add, Due to the changes we have made to the business plans of investments within our Legacy, Non-Strategic Portfolio, the Company meaningfully reduced its book value to better reflect the market value of such assets and also reset its dividend to a level which is now fully covered by in-place Core Earnings from the Core Portfolio alone. We expect most of the Legacy, Non-Strategic Portfolio to be monetized in the short to medium term and the proceeds of such sales will provide capital to grow our Core Earnings within our Core Portfolio. I strongly encourage all to review our portfolio bifurcation presentation and quarterly financial and supplemental materials, with substantially enhanced details and disclosures. Based on the results of this analysis, we believe the Companys current net asset value and book value are significantly higher than current trading value.
Catherine D. Rice, lead independent director for the Company, commented, On behalf of the Board, we want to thank Kevin and management for leading an extensive portfolio review and strategic assessment process. This resulted in a plan to segment and exit Legacy, Non-Strategic investments in order to provide shareholders greater clarity concerning the Companys long-term business strategy to grow its Core Portfolio. In addition, the independent directors of the Board recently received a letter from the Companys manager, Colony Capital, regarding possibly internalizing its credit-focused management team. The Board has established an independent special committee to review the proposal with independent financial and legal advisors.
Third Quarter 2019 Significant Developments and Subsequent Events
Third quarter 2019 GAAP net income (loss) attributable to common stockholders of $(356.0) million, or $(2.77) per share
Core Portfolio: Third quarter 2019 GAAP net income (loss) attributable to common stockholders of $(1.5) million, or $(0.01) per share, and Core Earnings of $44.7 million, or $0.34 per share
Legacy, Non-Strategic Portfolio: Third quarter 2019 GAAP net income (loss) attributable to common stockholders of $(354.5) million, or $(2.76) per share, and Legacy, Non-Strategic Earnings (loss) of $(120.3) million, or $(0.91) per share. Legacy, Non-Strategic Earnings excluding gains and losses of $6.9 million, or $0.05 per share
GAAP book value of $2.2 billion, or $16.55 per share and undepreciated book value of $2.3 billion, or $17.77 per share, as of September 30, 2019. GAAP book value per share and undepreciated GAAP book value per share are 17% and 25%, respectively, higher than the closing trading price on November 5, 2019
During the third quarter, recorded $127 million of loan loss provisions at the Companys ownership share and $258 million of impairment of real estate and preferred equity at the Companys ownership share, resulting from reduced hold periods on certain investments determined during the quarter
Declared and paid a monthly cash dividend of $0.145 per share of Class A common stock for July, August and September 2019. Subsequent to quarter end, the Companys Board of Directors declared a monthly cash dividend of $0.145 per share of common stock for October
The Companys Board of Directors subsequently declared a monthly cash dividend of $0.10 per share of Class A common stock for the months of November and December 2019, targeting an annualized dividend of $1.20 per share to approximate an annual dividend fully covered by Core Earnings from the Companys Core Portfolio
The following information was filed by Colony Credit Real Estate, Inc. (CLNC) on Thursday, November 7, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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