Arbor Realty Trust Reports Fourth Quarter and Full Year 2008 Results
Fourth Quarter Highlights:
- Net loss of
$108.2 million , or$4.30 per diluted common share - FFO loss of
$107.7 million , or$4.28 per diluted common share(1) - Adjusted book value per share
$17.33 , GAAP book value per share$11.18 (1) - Recorded
$124 million in loan loss reserves - Recorded impairments of
$3.4 million on available-for-sale securities and$1.4 million on securities held-to-maturity - Reduced short-term debt by
$117 million - Received
$1.4 million in cash and recorded$1.4 million in income from equity participation interests - Loan and investment portfolio net runoff of
$123 million
Full Year Highlights:
- Net loss of
$81.2 million , or$3.45 per diluted common share - FFO loss of
$77.0 million , or$3.36 per diluted common share(1) - Recorded
$132 million in loan loss reserves - Recorded impairments of
$16.2 million on available-for-sale securities and$1.4 million on securities held-to-maturity - Reduced short-term debt by
$310 million - Received
$34.5 million in cash and recorded$1.7 million in income from the monetization of equity participation interests - Loan and investment portfolio net runoff of
$332 million - Paid dividends during the year of
$2.10 per share
UNIONDALE, N.Y.,
Net loss for the year ended
During the quarter, the Company recorded a
The net balance in the loan and investment portfolio, excluding loan loss
reserves, was
At
For the fourth quarter of 2008, Arbor's manager,
Financing Activity
As of
As previously disclosed, the Company amended a
During the quarter, the Company reduced its outstanding warehouse and term
debt outstanding balances by approximately
In addition, during the quarter, the Company amended a
The Company is subject to various financial covenants and restrictions by
each of the Company's CDO and credit facilities. Based on the unaudited
financial statements in this release, the Company believes that it was in
compliance with all financial covenants and restrictions as of
Portfolio Activity
During the quarter, Arbor originated two bridge loans totaling
During the quarter, seven loans paid off on properties that were either
sold or refinanced outside of Arbor with an outstanding balance of
In addition, three loans totaling approximately
At
As of
During the fourth quarter, the Company recorded
The Company has a
As previously disclosed, the Company has a
The Company had four non-performing loans with a carrying value of
approximately
In the fourth quarter of 2008, the Company recorded
Dividend
As previously announced, the Board of Directors has elected not to pay a
common stock dividend for the quarter ended
Equity Participation Interests
Attached as an exhibit to this press release is a schedule of certain data
pertaining to the Company's investments with equity participation interests.
During the quarter, the Company received a distribution of
In the second quarter of 2008, the Company entered into an agreement to
transfer 16.67% of its 24.17% equity and profits interest in the
There were no new loans and investments originated during the quarter with equity participation interests.
Earnings Conference Call
Management will host a conference call today at
After the live webcast, the call will remain available on Arbor's Web
site, http://www.arborrealtytrust.com through
About
Safe Harbor Statement
Certain items in this press release may constitute forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Arbor can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from Arbor's expectations include, but are not limited to, continued ability
to source new investments, changes in interest rates and/or credit
spreads, changes in the real estate markets, and other risks detailed in
Arbor's Annual Report on Form 10-K for the year ended
Non-GAAP Financial Measures
During the quarterly earnings conference call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. In addition, the Company has used non-GAAP financial measures in this press release. A supplemental schedule of each non-GAAP financial measure and the comparable GAAP financial measure can be found on pages 10 through 12 of this release.
(1) See attached supplemental schedule of non-GAAP financial measures on page 10-12
Contacts:
Arbor Realty Trust, Inc.
Paul Elenio, Chief Financial Officer
516-506-4422
pelenio@arbor.com
Media:
Bonnie Habyan, SVP of Marketing
516-506-4615
bhabyan@arbor.com
Investors:
Stephanie Carrington / Amy Glynn
The Ruth Group
646-536-7017
scarrington@theruthgroup.com
aglynn@theruthgroup.com
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
Quarter Ended Year Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
(Unaudited) (Unaudited) (Unaudited) (Audited)
Revenue:
Interest income $45,426,176 $62,251,615 $204,135,097 $273,984,357
Property operating
income 1,728,136 - 3,150,466 -
Other income 15,799 14,341 82,329 39,503
------ ------ ------ ------
Total revenue 47,170,111 62,265,956 207,367,892 274,023,860
---------- ---------- ----------- -----------
Expenses:
Interest expense 21,296,971 37,444,592 108,656,702 147,710,194
Employee
compensation and
benefits 1,539,815 2,565,009 8,110,003 9,381,055
Selling and
administrative 1,455,922 1,390,386 8,197,368 5,593,175
Property operating
expenses 1,595,307 - 2,980,901 -
Depreciation and
amortization 324,576 - 751,859 -
Other-than-temporary
impairment 4,826,674 - 17,573,980 -
Provision for loan
losses 124,000,000 2,500,000 132,000,000 2,500,000
Management fee -
related party 23,730 3,799,690 3,539,854 25,004,975
------ --------- --------- ----------
Total expenses 155,062,995 47,699,677 281,810,667 190,189,399
----------- ---------- ----------- -----------
(Loss) income
before (loss)
income from
equity affiliates,
minority interest
and provision
for income taxes (107,892,884) 14,566,279 (74,442,775) 83,834,461
(Loss) income from
equity affiliates (178,791) 5,407,997 (2,347,296) 34,573,594
-------- --------- ---------- ----------
(Loss) income
before minority
interest and
provision for
income taxes (108,071,675) 19,974,276 (76,790,071) 118,408,055
Income allocated
to minority
interest 166,852 2,829,172 4,439,773 16,989,177
------- --------- --------- ----------
(Loss) income
before provision
for income taxes (108,238,527) 17,145,104 (81,229,844) 101,418,878
Provision for
income taxes - 1,800,000 - 16,885,000
- --------- - ----------
Net (loss) income $(108,238,527) $15,345,104 $(81,229,844) $84,533,878
============= =========== ============ ===========
Basic (loss)
earnings per
common share $(4.30) $0.75 $(3.45) $4.44
====== ===== ====== =====
Diluted (loss)
earnings per
common share $(4.30) $0.75 $(3.45) $4.44
====== ===== ====== =====
Dividends declared
per common share $0.24 $0.62 $2.10 $2.46
===== ===== ===== =====
Weighted average
number of shares
of common stock
outstanding:
Basic 25,148,224 20,494,399 22,916,648 19,022,616
========== ========== ========== ==========
Diluted (a) 25,148,224 24,353,727 22,916,648 22,870,159
========== ========== ========== ==========
(a) For periods with a net loss, basic shares are used in accordance with
GAAP rules.
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
Quarter Ended Year Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
Total revenue,
GAAP basis $47,170,111 $62,265,956 $207,367,892 $274,023,860
Subtract:
Prime transaction (1,000,000) - (1,000,000) (11,143,801)
On the Avenue
transaction - - - (15,997,843)
450 West 33rd
Street
transaction - - - (10,425,579)
- - - -----------
Total revenue, as
adjusted $46,170,111 $62,265,956 $206,367,892 $236,456,637
=========== =========== ============ ============
Net (loss)
income, GAAP
basis $(108,238,527) $15,345,104 $(81,229,844) $84,533,878
Subtract:
Prime transaction (966,667) - (966,667) (10,189,375)
On the Avenue
transaction - - - (6,099,372)
Toy transaction - (2,284,588) - (11,627,219)
450 West 33rd
Street
transaction - - - (6,529,699)
Add:
Alpine Meadows
operations 894,289 - 3,062,794 -
Other-than-
temporary
impairment on
available-for-
sale
securities 3,439,174 - 16,186,480 -
Other-than-
temporary
impairment on
securities
held-to-
maturity 1,387,500 - 1,387,500 -
--------- - --------- -
Net (loss)
income, as
adjusted $(103,484,231) $13,060,516 $(61,559,737) $50,088,213
============= =========== ============ ===========
Diluted (loss)
earnings per
common share,
GAAP basis $(4.30) $0.75 $(3.45) $4.44
====== ===== ====== =====
Diluted (loss)
earnings per
common share, as
adjusted $(4.11) $0.64 $(2.59) $2.63
====== ===== ====== =====
Diluted weighted
average shares
outstanding 25,148,224 24,353,727 22,916,648 22,870,159
========== ========== ========== ==========
a.) Given the magnitude and/or nature of certain transactions and
operations, Arbor has elected to report adjusted revenues, net income
and earnings per share for the affected periods to help ensure the
comparability of the reporting periods. Management considers these
non-GAAP financial measures to be effective indicators, for both
management and investors, of Arbor's financial performance. Arbor's
management does not advocate that investors consider such non-GAAP
financial measures in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP.
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE OF NON-GAAP FINANCIAL MEASURES - Continued (Unaudited)
December 31, 2008
GAAP Stockholders' Equity $281,005,649
Add: 450 West 33rd Street transaction -
deferred revenue 77,123,133
Unrealized loss on derivative instruments 96,606,672
Subtract: 450 West 33rd Street transaction -
prepaid management fee (19,047,949)
-----------
Adjusted Stockholders' Equity $435,687,505
============
Adjusted book value per share $17.33
======
GAAP book value per share $11.18
======
Common shares outstanding 25,142,410
==========
b.) Given the magnitude and the deferral structure of the 450 West 33rd
Street transaction combined with the change in the fair value of
certain derivative instruments, Arbor has elected to report adjusted
book value per share for the affected period to currently reflect the
future impact of the 450 West 33rd Street transaction on the company's
financial condition as well as the evaluation of Arbor without the
effects of unrealized losses from certain of the Company's derivative
instruments. Management considers this non-GAAP financial measure to
be an effective indicator, for both management and investors, of
Arbor's financial performance. Arbor's management does not advocate
that investors consider this non-GAAP financial measure in isolation
from, or as a substitute for, financial information prepared in
accordance with GAAP.
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE OF NON-GAAP FINANCIAL MEASURES - Continued
(Unaudited)
Quarter Ended Year Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
Net (loss)
income, GAAP
basis $(108,238,527) $15,345,104 $(81,229,844) $84,533,878
Add:
Minority interest - 2,829,172 2,249,698 16,989,177
Depreciation -
real estate
owned 324,576 - 751,859 -
Depreciation -
investment in
equity
affiliates 225,154 - 1,193,507 -
------- - --------- -
Funds from
operations
("FFO") $(107,688,797) $18,174,276 $(77,034,780) $101,523,055
============= =========== ============ ============
Diluted FFO
per common
share $(4.28) $0.75 $(3.36) $4.44
====== ===== ====== =====
Diluted weighted
average shares
outstanding 25,148,224 24,353,727 22,916,648 22,870,159
========== ========== ========== ==========
c.) Arbor is presenting funds from operations, or FFO, because management
believes it to be an important supplemental measure of the Company's
operating performance in that it is frequently used by analysts,
investors and other parties in the evaluation of real estate
investment trusts (REITs). The Company also uses FFO for the
calculation of the incentive management fee payable to the Company's
manager, Arbor Commercial Mortgage, LLC . The revised White Paper on
FFO approved by the Board of Governors of the National Association of
Real Estate Investment Trusts , or NAREIT, in April 2002 defines FFO as
net income (loss) (computed in accordance with generally accepted
accounting principles (GAAP)), excluding gains (losses) from sales of
depreciated real properties, plus real estate related depreciation and
amortization and after adjustments for unconsolidated partnerships and
joint ventures. Arbor considers gains and losses on the sales of real
estate investments to be a normal part of our recurring operating
activities in accordance with GAAP and should not be excluded when
calculating FFO.
FFO is not intended to be an indication of our cash flow from
operating activities (determined in accordance with GAAP) or a measure
of our liquidity, nor is it entirely indicative of funding our cash
needs, including our ability to make cash distributions. Arbor's
calculation of FFO may be different from the calculation used by other
companies and, therefore, comparability may be limited.
ARBOR REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2008 2007
---- ----
(Unaudited) (Audited)
Assets:
Cash and cash equivalents $832,041 $22,219,541
Restricted cash 93,219,133 139,136,105
Loans and investments, net 2,181,683,619 2,592,093,930
Available-for-sale securities, at fair
value 529,104 15,696,743
Securities held-to-maturity, net 58,244,348 -
Investment in equity affiliates 29,310,953 29,590,190
Real estate owned, net 46,478,994 -
Due from related party 2,933,344 -
Prepaid management fee - related party 26,340,397 19,047,949
Other assets 139,664,556 83,709,076
----------- ----------
Total assets $2,579,236,489 $2,901,493,534
============== ==============
Liabilities and Stockholders' Equity:
Repurchase agreements $60,727,789 $244,937,929
Collateralized debt obligations 1,152,289,000 1,151,009,000
Junior subordinated notes to subsidiary
trust issuing preferred securities 276,055,000 276,055,000
Notes payable 518,435,437 596,160,338
Notes payable-related party 4,200,000 -
Mortgage note payable 41,440,000 -
Due to related party 993,192 2,429,109
Due to borrowers 32,330,603 18,265,906
Deferred revenue 77,123,133 77,123,133
Other liabilities 134,647,667 67,395,776
----------- ----------
Total liabilities 2,298,241,821 2,433,376,191
------------- -------------
Minority interest in operating
partnership - 72,854,258
Minority interest in consolidated entity (10,981) -
Stockholders' equity:
Preferred stock, $0.01 par value:
100,000,000 shares authorized; 0 shares
issued and outstanding
at December 31, 2008 and 3,776,069
shares issued and outstanding at
December 31, 2007 - 37,761
Common stock, $0.01 par value:
500,000,000 shares authorized;
25,421,810 shares issued, 25,142,410
shares outstanding at
December 31, 2008 and 20,798,735 shares
issued, 20,519,335 shares outstanding at
December 31, 2007 254,218 207,987
Additional paid-in capital 447,321,186 365,376,136
Treasury stock, at cost - 279,400 shares (7,023,361) (7,023,361)
(Accumulated deficit) retained earnings (62,939,722) 65,665,951
Accumulated other comprehensive loss (96,606,672) (29,001,389)
----------- -----------
Total stockholders' equity 281,005,649 395,263,085
----------- -----------
Total liabilities and stockholders'
equity $2,579,236,489 $2,901,493,534
============== ==============
Arbor Realty Trust, Inc.
Summary of Equity and Profit Interests
(all dollar amounts in thousands)
Unaudited
Initial Current
ART Cash Approximate
Investment Investment Equity Square
Name Amount Date Investment Profit % Footage
---- ------ ---- ---------- -------- -------
80 Evergreen $384 3Q03 $201 12.50% 77,680
930 Flushing 1,126 3Q03 291 12.50% 304,080
Prime Portfolio 2,100 4Q03 - 7.50% 6,700,000
Prime Portfolio - 16.67% (5) 6,700,000
450 W. 33rd St 1,500 4Q03 1,137 0.58% (1) 1,746,734
Toy Building 10,000 2Q05 5,720 10.00% 320,000
Homewood Mtn
Resort - 2Q06 - 25.60% 1,224 (3)
Richland
Terrace
Apartments - 3Q06 - 25.00% 342,152
Ashley Court
Apartments - 3Q06 - 25.00% 177,892
Nottingham
Village - 1Q07 - 25.00% 285,900
Extended Stay
Hotel
Portfolio 115,000 (6) 2Q07 115,000 16.17% 684 (4)
Alpine Meadows 13,220 3Q07 13,220 39.00% 2,163 (3)
St. John's
Development 500 4Q07 3,500 50.00% 23 (3)
Windrush
Village
Apartments - 2Q08 445 25.00% 221,726
Current Debt
Property Balance
Name Type Location on Property Comments
---- ---- -------- ----------- --------
80 Evergreen Warehouse Brooklyn, NY $5,000 Property
refinanced
June 2008
930 Flushing Warehouse Brooklyn, NY 24,657 Property
refinanced
July 2005
Prime Portfolio Retail Outlets Multi-state 1,200,700 Properties
refinanced
Prime Portfolio Retail Outlets Multi-state - All equity
returned to
investors
450 W. 33rd St Office New York City 517,000
Toy Building Conversion New York City 343,400 (2) Condo
conversion -
investment
held in
Taxable REIT
Subsidiary
("TRS")
Homewood
Mtn Resort Land Homewood, CA 114,157 Profits
interest
held in
TRS
Richland
Terrace
Apartments Multi Family Columbia, SC 9,094
Ashley Court
Apartments Multi Family Fort Wayne, IN 5,452
Nottingham
Village Multi Family Indianapolis, IN 6,626
Extended Stay
Hotel
Portfolio Hotel Multistate 7,400,000 Preferred
return of
12% on equity
Alpine
Meadows Land Alpine Meadows, CA 30,500 Preferred
return of
18% on equity
St. John's
Development Land Jacksonville, FL 25,000
Windrush
Village
Apartments Multi Family Tallahassee, FL 12,800
(1) Represents approximately 29% of the 2% retained interest in the
property. In addition, Arbor has approximately 29% of a 50% interest
in the property's air rights.
(2) Debt balance represents anticipated debt financing required to
complete condominium conversion project.
(3) Amount represents approximate acreage of property.
(4) Amount represents approximately 684 properties in 44 states and Canada
with approximately 76,000 rooms.
(5) The Company has agreed to transfer its 16.67% interest for preferred
and common operating partnership units of another REIT, which is
expected to occur on or prior to June 26, 2009 . The Company currently
has $32.3 million in debt related to this transaction that is
collateralized by the Company's 16.67% interest in Prime.
(6) During the fourth quarter of 2008, the Company recorded a loan loss
reserve of $83.0 million reducing the outstanding balance to $29.6
million at December 31, 2008 .
SOURCE
CONTACT: Paul Elenio, Chief Financial Officer, +1-516-506-4422,
pelenio@arbor.com,
or media, Bonnie Habyan, SVP of Marketing, +1-516-506-4615,
bhabyan@arbor.com,
both of
or investors,
or
both of
Web Site: http://www.arborrealtytrust.com /
(ABR)
