MCLEAN, Va., June 27, 2011 /PRNewswire/ -- JER Investors Trust
Inc. (Pink Sheets: JERT, "JERT" or the "Company") released its
annual Statement of Affairs of the Company, including its unaudited
financial information, as of and for the twelve months ended
December 31, 2010.
As previously disclosed, the Company continues to have
outstanding payment defaults related to the following;
- Payment default on its interest rate swap obligations to
National Australia Bank Limited ("NAB") (the "NAB Note Payable"),
which based on its terms is classified as a note payable on the
Company's balance sheet. As of April
19, 2010, NAB terminated the NAB Note Payable, and
established a termination value of $29.0
million.
- Payment default on its junior subordinated notes with an
outstanding face amount of $70.3
million (the "Junior Subordinated Notes").
- Payment defaults on both of its collateralized debt obligations
("CDO I" and "CDO II" or collectively the "CDOs") due to a failure
to pay interest on certain notes payable of both CDOs driven by
continuing declines in cash flow from commercial mortgage backed
securities ("CMBS") held as collateral in both CDOs.
The Company's cash receipts continue to decline as delinquencies
and special servicing transfers on loans underlying its CMBS
continue to increase. Considering these circumstances, it is
unlikely the Company will be able to repay its obligations under
the NAB Note Payable or Junior Subordinated Notes were the lenders
to demand payment. In such event, the Company may have to
negotiate a settlement with such creditors, recapitalize, refinance
its obligations, sell some or all of its assets at prices below
current estimated fair value or seek to reorganize under Chapter 11
or liquidate under Chapter 7 of the United States Bankruptcy Code.
In any case, it is expected that its common shareholders would not
recover any value and unsecured creditors, including holders of the
NAB Note Payable and Junior Subordinated Notes, would receive
little, if any, value in relation to the outstanding
obligations.
In February 2011, the Company
cured its outstanding payment defaults related to its unfunded
capital calls associated with its investment in the JER US Debt
Co-Investment Vehicle, L.P. (the "US Debt Fund"). As a
result, future distributions from the US Debt Fund will not be
withheld from the Company and effective April 1, 2011 the Company will be eligible to
receive 50% of the management fees paid by the US Debt Fund, or
approximately $75,000 per quarter to
the Company.
The Company's unrestricted cash balances were $1.7 million and $1.4
million at December 31, 2010
and May 31, 2011, respectively.
Currently, the Company's primary sources of liquidity are from
its non-CDO CMBS bonds, which are making payments to the Company at
a rate of approximately $100,000 per
quarter. The Company is no longer receiving distributions
from its retained interests in CDO I and CDO II, and it does not
expect to receive distributions from such CDOs for the foreseeable
future, if ever. In addition, the timing and amounts of
future distributions from the Company's US Debt Fund investment is
uncertain. As a result, the Company continues to be focused
on seeking to preserve liquidity by minimizing its non-CDO cash
operating costs to the extent possible including the elimination of
external board of directors fees and audit fees.
Recent historical cash receipts and disbursement activity by
sources and uses are as follows (dollars in thousands):
|
|
For the
Three Months Ended
|
|
|
|
|
|
|
|
March
31,
2010
|
|
June
30,
2010
|
|
September 30,
2010
|
|
December
31,
2010
|
|
For the
Twelve
Months
Ended
December 31,
2010
|
|
For the
Three
Months
Ended
March 31,
2011
|
|
Cash receipts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-CDO CMBS
currently
held by JRT
|
|
$
994
|
|
$
588
|
|
$
567
|
|
$
556
|
|
$
2,705
|
|
$
539
|
|
Non-CDO CMBS sold in
March 2010
|
|
6,886
|
(1)
|
-
|
|
-
|
|
-
|
|
6,886
|
|
-
|
|
CDO I retained
interest
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
CDO II retained
interest
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Distributions from US Debt
Fund
|
|
-
|
|
-
|
|
64
|
|
-
|
|
64
|
|
10
|
|
US Debt Fund management
fees
|
|
269
|
|
-
|
|
-
|
|
-
|
|
269
|
|
-
|
|
US Debt fund expense
reimbursements
|
|
-
|
|
-
|
|
103
|
|
-
|
|
103
|
|
-
|
|
Total
|
|
8,149
|
|
588
|
|
734
|
|
556
|
|
10,027
|
|
549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
disbursements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
|
|
239
|
|
450
|
|
-
|
|
-
|
|
689
|
|
-
|
|
Legal
|
|
412
|
(2)
|
3
|
|
62
|
|
-
|
|
477
|
|
-
|
|
Audit and tax
|
|
26
|
|
270
|
|
30
|
|
100
|
|
426
|
|
52
|
|
Independent director
fees
|
|
50
|
|
50
|
|
50
|
|
100
|
|
250
|
|
-
|
|
Other
|
|
35
|
|
57
|
|
75
|
|
46
|
|
213
|
|
52
|
|
Total
|
|
762
|
|
830
|
|
217
|
|
246
|
|
2,055
|
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing and financing
disbursements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Debt Fund capital
contributions
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
711
|
|
Repayment of repurchase
agreement
|
|
6,966
|
|
-
|
|
-
|
|
-
|
|
6,966
|
|
-
|
|
Total
|
|
6,966
|
|
-
|
|
-
|
|
-
|
|
6,966
|
|
711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrestricted cash
rollforward
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total change in unrestricted
cash
|
|
421
|
|
(242)
|
|
517
|
|
310
|
|
1,006
|
|
(266)
|
|
Beginning balance
|
|
668
|
|
1,089
|
|
847
|
|
1,364
|
|
668
|
|
1,674
|
|
Ending balance
|
|
$
1,089
|
|
$
847
|
|
$
1,364
|
|
$
1,674
|
|
$
1,674
|
|
$
1,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes proceeds from sale
of these bonds of $5.5 million.
|
|
(2) Legal fees paid during the
three months ended March 31, 2010 consist primarily of fees related
to the failed equity offering undertaken during the first quarter
of 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Review by Financing Sources:
The Company's assets and liabilities at December 31, 2010 can be broken down by financing
sources as follows (dollars in thousands):
|
|
Financing
Sources- As of December 31, 2010
|
|
|
|
CDO
I
|
|
CDO
II
|
|
Other
Unsecured
Financing
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
-
|
|
$
-
|
|
$
1,674
|
|
$
1,674
|
|
CDO related restricted
cash
|
|
8
|
|
18,274
|
|
-
|
|
18,282
|
|
CMBS financed by CDO I (face
amount of $381,127)
|
|
44,231
|
|
-
|
|
-
|
|
44,231
|
|
CMBS financed by CDO II (face
amount of $710,479)
|
|
-
|
|
22,756
|
|
-
|
|
22,756
|
|
Non-CDO CMBS (face amount of
$191,059)
|
|
-
|
|
-
|
|
2,924
|
|
2,924
|
|
Real estate loans (face amount
of $253,726)
|
|
-
|
|
120,727
|
|
-
|
|
120,727
|
|
Investment in US Debt
Fund
|
|
-
|
|
-
|
|
1,406
|
|
1,406
|
|
Accrued interest
receivable
|
|
903
|
|
1,837
|
|
407
|
|
3,147
|
|
Deferred financing fees,
net
|
|
|
|
|
|
855
|
|
855
|
|
Prepaid expenses
|
|
37
|
|
70
|
|
189
|
|
296
|
|
Total Assets
|
|
45,179
|
|
163,664
|
|
7,455
|
|
216,298
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
CDO I notes payable, at fair
falue (face amount of $271,732)
|
|
27,132
|
|
|
|
-
|
|
27,132
|
|
CDO II notes payable, at fair
falue (face amount of $689,172)
|
|
|
|
125,974
|
|
-
|
|
125,974
|
|
NAB note payable
|
|
-
|
|
-
|
|
29,004
|
|
29,004
|
|
Interest rate swap agreement
related to CDO II, at fair value
|
|
-
|
|
37,005
|
|
-
|
|
37,005
|
|
Terminated interest rate swap
agreement (1)
|
|
16,999
|
|
-
|
|
-
|
|
16,999
|
|
Junior subordinated notes (face
amount of $70,314)
|
|
-
|
|
-
|
|
60,598
|
|
60,598
|
|
Due to affiliates
|
|
-
|
|
-
|
|
5,047
|
|
5,047
|
|
Accounts payable and accrued
expenses
|
|
55
|
|
4
|
|
48
|
|
107
|
|
Accrued interest
payable
|
|
993
|
|
681
|
|
73
|
|
1,747
|
|
Total Liabilities
|
|
45,179
|
|
163,664
|
|
94,770
|
|
303,613
|
|
|
|
|
|
|
|
|
|
|
|
Implied equity (deficit) by
financing source
|
|
$
-
|
|
$
-
|
|
$
(87,315)
|
|
$
(87,315)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) On October 15, 2010,
the counterparty of our CDO I interest rate swap terminated the
interest rate swap with a notional balance of $110.0 million.
At that date, the swap counterparty established a termination
value of $18.6 million for the swap. Subsequent to the
termination date through December 31, 2010, CDO I made $1.6 million
of cash payments on this outstanding liability.
|
|
|
We do not currently project any future distributions from our
retained interests in CDO I and CDO II as asset values of
$45.2 million and $163.7 million for CDO I and CDO II,
respectively, are significantly less than the face amount of CDO
notes payable and interest rate swap liabilities of $288.7 million and $726.2
million for CDO I and CDO II, respectively. The CDO
Notes Payable are non-recourse to the Company and the fair value of
such CDO Notes Payable as of December 31,
2010 has been determined by solving for the amount that
results in no CDO implied equity at December
31, 2010. The Company has a deficit of $(87.3) million at December 31, 2010, and that deficit would further
increase to $(97.0) million if the
face amount of the junior subordinated notes of $70.3 million were substituted for the carrying
value of such junior subordinated notes of $60.6 million.
Credit Performance:
Below are selected credit statistics on our CMBS investments and
the commercial real estate loans that serve as collateral on our
first-loss CMBS investments (dollars in thousands).
|
|
December
31,
2009
|
|
December
31,
2010
|
|
April 30,
2011
|
|
CMBS Portfolio
|
|
|
|
|
|
|
|
Total CMBS
investments
|
|
26
|
|
25
|
|
25
|
|
Face amount of CMBS
investments
|
|
$
1,706,288
|
|
$
1,282,665
|
|
$
1,121,090
|
|
CMBS investments in which JRT
owns the
first-loss
position
|
|
21
|
|
18
|
|
18
|
|
Face amount of first-loss CMBS
investments
|
|
$
1,616,897
|
|
$
1,134,727
|
|
$
1,042,081
|
|
Face amount of collateral pool
for first-loss
CMBS investments
|
|
$
46,166,110
|
|
$
40,510,168
|
|
$
37,704,237
|
|
|
|
|
|
|
|
|
|
Credit Statististics on
Collateral Pools for
First-Loss CMBS
Investments
|
|
|
|
|
|
|
|
60-day delinquency
amount
|
|
$
1,543,098
|
|
$
3,482,413
|
|
$
3,783,437
|
|
60-day delinquency
rate
|
|
3.3%
|
|
8.6%
|
|
9.6%
|
|
|
|
|
|
|
|
|
|
Special servicing
amount
|
|
$
3,107,147
|
|
$
4,510,438
|
|
$
4,558,806
|
|
Special servicing
rate
|
|
6.7%
|
|
11.1%
|
|
11.6%
|
|
|
|
|
|
|
|
|
|
Realized losses to
date
|
|
$
37,575
|
|
$
271,627
|
|
$
326,354
|
|
Appraisal reductions to
date
|
|
$
474,033
|
|
$
1,200,590
|
|
$
1,471,855
|
|
|
|
|
|
|
|
|
We expect that delinquencies and transfers of loans to special
servicing will stabilize during the remainder of 2011, although we
expect realized losses and appraisal reductions will continue to
increase during the remainder of 2011, further eroding cash flows
to the CMBS bonds owned by JERT, in particular, the non-CDO CMBS
bonds which were the Company's primary source of liquidity during
2010.
If credit losses ultimately realized on collateral for our CMBS
investments are in line with current expectations regarding the
amount and timing of such losses, we do not expect any principal
recovery on our first-loss CMBS investments.
All of the Company's real estate loans are collateral for CDO
II. The face amount of real estate loans at December 31, 2010 was $253.7 million which consists of $40.4 million of first mortgage loan
participations and $213.3 million of
mezzanine loans. The estimated fair value of such loans at
December 31, 2010 was $34.4 million and $86.3
million for the first mortgage loan participations and
mezzanine loans, respectively. The loans have maturity dates
that range from October 2011 to
August 2013. During the year
ended December 31, 2010, we received
principal payments on real estate loans aggregating $11.7 million, which has increased the restricted
cash balance of CDO II. All of the loans are currently
performing although we do expect certain of the mezzanine loans
indirectly secured by hospitality assets to incur principal losses
at maturity. These estimated losses have been considered in
determining the fair value of real estate loans at December 31, 2010.
Dividends:
The Company did not declare any dividends in 2010, and given
expectations of continued tax losses, does not expect to declare
dividends in the foreseeable future.
2011 Annual Meeting of Shareholders:
The 2011 annual meeting of shareholders of the Company is
scheduled to be held on June 28, 2011
at 2:00 PM, Eastern Daylight Time, at
the Courtyard by Marriott—Tysons Corner, 1960-A Chain Bridge Road,
McLean, Virginia 22102. At
the 2011 annual meeting, shareholders will be asked to vote upon a
proposal to elect three directors to serve until the 2012 annual
meeting of stockholders and until their respective successors are
elected and duly qualified. In addition, this statement of
affairs will be submitted at the annual meeting and filed in the
Company's corporate records within twenty (20) calendar days
following the annual meeting.
Financial Statements:
The December 31, 2010 financial
statements included in this press release have not been and will
not be audited. Accordingly, the Company gives no assurance
that such financial statements have been prepared in accordance
with generally accepted accounting principles ("GAAP").
However, given the current financial condition of the
Company, management believes that an independent auditor would
conclude that a substantial doubt about the Company's ability to
continue as a going concern exists at December 31, 2010. This is consistent with
conclusions reached by independent auditors with respect to the
Company's 2008 and 2009 audited financial statements.
About JER Investors Trust Inc.
JER Investors Trust Inc. is a specialty finance company quoted
on the Pink Sheets that manages a portfolio of commercial real
estate structured finance products. Our investments include
commercial mortgage backed securities, mezzanine loans and
participations in mortgage loans, and an interest in the US Debt
Fund. JER Investors Trust Inc. is organized and conducts its
operations so as to qualify as a real estate investment trust
("REIT") for federal income tax purposes. For more
information regarding JER Investors Trust Inc., please visit
www.jerinvestorstrust.com.
Forward-Looking Statements
This press release contains forward-looking statements based
upon the Company's beliefs, assumptions and expectations of its
future performance, taking into account all information currently
available. These beliefs, assumptions and expectations can change
as a result of many possible events or factors, not all of which
are known to the Company or are within its control. If a change
occurs, the Company's business, financial condition, liquidity and
results of operations may vary materially from those expressed in
its forward-looking statements. Factors that could cause actual
results to differ materially from JER Investors Trust's
expectations include, but are not limited to, the Company's ability
to cover its operating cash needs, changes in the real estate and
capital markets, the Company's ability to maintain existing
financing arrangements, the effect of trading on the Pink Sheets,
other risks included as part of the Company's Annual Report on Form
10-K for the year ended December 31,
2009 filed on December 20,
2010 and other factors which may be beyond the Company's
control. The Company filed a Form 15 with the SEC on
March 31, 2010 and has ceased to be
an SEC reporting company. Since the Company is no longer an
SEC reporting company, the information contained in previously
filed SEC reports may not be current and circumstances may have
changed significantly since the dates of such filings. Any
forward-looking statements contained herein speak only as of the
date of this press release. JER Investors Trust expressly disclaims
any obligation to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in JER Investors Trust's expectations with regard thereto or change
in events, conditions or circumstances on which any statement is
based.
CONTACT:
J. Michael McGillis
Chief Financial Officer
JER Investors Trust Inc.
(703) 714-8000
JER
INVESTORS TRUST INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(In
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
(unaudited)
|
|
(audited)
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,674
|
|
$
668
|
|
|
CDO related restricted
cash
|
|
18,282
|
|
6,874
|
|
|
CMBS financed by CDOs, at fair
value
|
|
66,987
|
|
74,838
|
|
|
CMBS not financed by CDOs, at
fair value
|
|
2,924
|
|
11,173
|
|
|
Real estate loans, held for
investment, financed by CDOs, at fair value
|
|
120,727
|
|
111,085
|
|
|
Investment in US Debt
Fund
|
|
1,406
|
|
65
|
|
|
Accrued interest
receivable
|
|
3,147
|
|
4,154
|
|
|
Due from affiliates
|
|
-
|
|
368
|
|
|
Deferred financing fees,
net
|
|
855
|
|
888
|
|
|
Other assets
|
|
|
296
|
|
402
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
216,298
|
|
$
210,515
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
CDO notes payable, at fair
value
|
|
$
153,106
|
|
$
117,233
|
|
|
NAB note payable
|
|
29,004
|
|
10,837
|
|
|
Interest rate swap agreements
related to CDOs, at fair value
|
|
37,005
|
|
38,277
|
|
|
Terminated interest rate swap
agreement related to CDO I
|
|
16,999
|
|
-
|
|
|
Junior subordinated
notes
|
|
60,598
|
|
59,028
|
|
|
Repurchase agreements
|
|
-
|
|
6,966
|
|
|
Accounts payable and accrued
expenses
|
|
107
|
|
910
|
|
|
Due to affiliate
|
|
|
5,047
|
|
2,451
|
|
|
Other liabilities
|
|
|
1,747
|
|
1,920
|
|
|
|
Total Liabilities
|
|
303,613
|
|
237,622
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
Common stock, $0.01 par value,
100,000,000 shares authorized,
|
|
|
|
|
|
|
5,827,478 shares issued
and outstanding
|
|
|
|
|
|
|
at December 31, 2010 and
2009, respectively
|
|
57
|
|
57
|
|
|
Additional paid-in
capital
|
|
413,573
|
|
413,573
|
|
|
Cumulative cash dividends
paid
|
|
(157,705)
|
|
(157,705)
|
|
|
Cumulative stock dividends
paid
|
|
(20,462)
|
|
(20,462)
|
|
|
Cumulative deficit
|
|
(306,705)
|
|
(242,465)
|
|
|
Accumulated other comprehensive
loss
|
|
(16,073)
|
|
(20,105)
|
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders' Equity
(Deficit)
|
|
(87,315)
|
|
(27,107)
|
|
|
|
Total Liabilities and
Stockholders' Equity (Deficit)
|
|
$
216,298
|
|
$
210,515
|
|
|
|
|
|
|
|
|
JER
INVESTORS TRUST INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(In
thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
For the
Twelve Months Ended December 31,
|
|
|
|
|
|
2010
|
|
2009
|
|
2008
|
|
|
|
|
|
(unaudited)
|
|
(audited)
|
|
(audited)
|
|
REVENUES
|
|
|
|
|
|
|
|
|
Interest income from
CMBS
|
|
$
36,967
|
|
$
53,984
|
|
$
80,495
|
|
|
Interest income from real estate
loans
|
|
9,625
|
|
9,649
|
|
27,691
|
|
|
Interest income from cash and
cash equivalents
|
|
1
|
|
18
|
|
836
|
|
|
Equity in earnings (losses),
net, of unconsolidated joint ventures
|
|
1,406
|
|
(2,382)
|
|
(1,449)
|
|
|
Fee income
|
|
-
|
|
1,051
|
|
544
|
|
|
|
Total Revenues
|
|
47,999
|
|
62,320
|
|
108,117
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
Interest expense
|
|
22,102
|
|
26,731
|
|
52,989
|
|
|
Management fees,
affiliate
|
|
1,916
|
|
4,151
|
|
6,725
|
|
|
General and
administrative
|
|
2,957
|
|
7,010
|
|
7,037
|
|
|
|
Total Expenses
|
|
26,975
|
|
37,892
|
|
66,751
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE OTHER GAINS
(LOSSES)
|
|
21,024
|
|
24,428
|
|
41,366
|
|
|
|
|
|
|
|
|
|
|
|
OTHER GAINS
(LOSSES)
|
|
|
|
|
|
|
|
|
Unrealized gain (loss), net, on
financial assets financed with CDOs
|
|
3,621
|
|
(171,689)
|
|
(454,232)
|
|
|
Unrealized (loss) gain, net, on
CDO related financial liabilities
|
|
(40,178)
|
|
115,395
|
|
438,046
|
|
|
Loss on interest rate
swaps
|
|
(19,401)
|
|
(23,232)
|
|
(17,238)
|
|
|
Loss on impairment of
CMBS
|
|
-
|
|
(26,496)
|
|
(163,017)
|
|
|
Reversal of previously
recognized unrealized losses, net,
on repayment of real
estate loans
|
|
4,396
|
|
-
|
|
-
|
|
|
Reversal of previously
recognized unrealized losses, net,
on terminated interest
rate swaps
|
|
6,762
|
|
-
|
|
-
|
|
|
Unrealized gain (loss), net, on
real estate loans
|
|
-
|
|
-
|
|
13,866
|
|
|
Unrealized gain (loss) on
non-CDO related interest rate swaps
|
|
-
|
|
13,860
|
|
(13,516)
|
|
|
Gain on exchange and
cancellation of TRUPs
|
|
-
|
|
3,175
|
|
-
|
|
|
Loss on sale of real estate
loans
|
|
-
|
|
-
|
|
(92,541)
|
|
|
Loss on repayment of real estate
loans
|
|
(3,000)
|
|
-
|
|
-
|
|
|
Loss on sale of CMBS not
financed by CDOs
|
|
(78,765)
|
|
-
|
|
-
|
|
|
Reversal of previously
recognized impairments on CMBS sold
|
|
72,221
|
|
-
|
|
-
|
|
|
Loss on establishing termination
value on NAB note payable
|
|
(16,467)
|
|
-
|
|
-
|
|
|
Loss on termination of interest
rate swaps
|
|
(14,453)
|
|
(12,280)
|
|
(6,885)
|
|
|
Total other gains
(losses)
|
|
(85,264)
|
|
(101,267)
|
|
(295,517)
|
|
NET LOSS
|
|
$
(64,240)
|
|
$
(76,839)
|
|
$
(254,151)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
(11.02)
|
|
$
(14.57)
|
|
$
(98.75)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
(11.02)
|
|
$
(14.57)
|
|
$
(98.75)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares of
common stock outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
5,827,949
|
|
5,274,010
|
|
2,573,759
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
5,827,949
|
|
5,274,010
|
|
2,573,759
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common
share
|
|
$
-
|
|
$
-
|
|
$
17.80
|
|
|
|
|
|
|
|
|
|
|
JER
INVESTORS TRUST INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(unaudited)
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
Additional
|
|
Cumulative Cash
Dividends Paid/
|
|
Cumulative Stock
Dividends Paid/
|
|
Cumulative
Earnings
|
|
Accumulated Other
Comprehensive
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Paid-in Capital
|
|
Declared
|
|
Declared
|
|
(Deficit)
|
|
Income (Loss)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31,
2008
|
|
2,590
|
|
26
|
|
392,744
|
|
(157,705)
|
|
-
|
|
(165,626)
|
|
(23,076)
|
|
46,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
(76,839)
|
|
|
|
(76,839)
|
|
Amortization of swap
termination costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
540
|
|
540
|
|
Amortization of unrealized
losses on CDO related
interest rate swaps in
other comprehensive loss at
December 31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,419
|
|
2,419
|
|
Unrealized gains (losses)
on non-CDO CMBS
available for
sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
12
|
|
Total comprehensive income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(73,868)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared/paid
|
|
2,398
|
|
24
|
|
20,438
|
|
|
|
(20,462)
|
|
|
|
|
|
-
|
|
Stock issued in exchange for
retirement of debt
|
|
849
|
|
8
|
|
374
|
|
|
|
|
|
|
|
|
|
382
|
|
Stock based compensation-
restricted share awards, net of terminations
|
|
(10)
|
|
(1)
|
|
17
|
|
|
|
|
|
|
|
|
|
16
|
|
Balance at December 31,
2009
|
|
5,827
|
|
57
|
|
413,573
|
|
(157,705)
|
|
(20,462)
|
|
(242,465)
|
|
(20,105)
|
|
(27,107)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
(64,240)
|
|
|
|
(64,240)
|
|
Amortization of swap
termination costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
573
|
|
573
|
|
Amortization of unrealized
losses on CDO related
interest rate swaps in
other comprehensive loss at
December 31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,532
|
|
2,532
|
|
Unrealized gains (losses)
on non-CDO CMBS
available for
sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
927
|
|
927
|
|
Total comprehensive income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(60,208)
|
|
Balance at December 31,
2010
|
|
5,827
|
|
$
57
|
|
$
413,573
|
|
$
(157,705)
|
|
$
(20,462)
|
|
$
(306,705)
|
|
$
(16,073)
|
|
$
(87,315)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JER
INVESTORS TRUST INC. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
For the
Twelve Months Ended December 31,
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$ (64,240)
|
|
$
(76,839)
|
|
$
(254,151)
|
|
|
Adjustments to reconcile net
loss to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Amortization (accretion) of
CMBS
|
|
(12,297)
|
|
11,818
|
|
7,277
|
|
|
|
Accretion of junior subordinated
notes and notes payable
|
|
3,270
|
|
3,223
|
|
-
|
|
|
|
Accretion of CDO notes
payable
|
|
13,681
|
|
5,137
|
|
-
|
|
|
|
Amortization of debt issuance
costs
|
|
33
|
|
93
|
|
3,442
|
|
|
|
Amortization of other
comprehensive (income) loss related to
CDO related interest rate
swap agreements
|
|
3,105
|
|
2,960
|
|
2,824
|
|
|
|
Unrealized loss (gain) on CDO
related financial assets and liabilities, net
|
|
36,557
|
|
56,294
|
|
16,186
|
|
|
|
Unrealized (gain) loss on
interest rate swaps
|
|
-
|
|
(1,580)
|
|
20,401
|
|
|
|
Reversal of previously
recognized unrealized losses, net,
on repayment of real
estate loans
|
|
(4,396)
|
|
-
|
|
-
|
|
|
|
Reversal of previously
recognized unrealized losses, net,
on terminated interest
rate sweaps
|
|
(6,762)
|
|
-
|
|
-
|
|
|
|
Reversal of previously
recognized impairments on CMBS sold
|
|
(72,221)
|
|
-
|
|
-
|
|
|
|
Unrealized loss on impairment of
CMBS
|
|
927
|
|
26,496
|
|
163,017
|
|
|
|
Unrealized loss on real estate
loans held for sale, net
|
|
-
|
|
-
|
|
(13,866)
|
|
|
|
Loss on repayment of real estate
loans
|
|
3,000
|
|
-
|
|
-
|
|
|
|
Loss on establishing termination
value of NAB note payable
|
|
16,467
|
|
-
|
|
-
|
|
|
|
Loss on termination of interest
rate swap
|
|
14,453
|
|
-
|
|
-
|
|
|
|
Loss on sale of CMBS
investments
|
|
78,765
|
|
|
|
-
|
|
|
|
Loss on sale of real estate
loans held for sale
|
|
-
|
|
-
|
|
92,541
|
|
|
|
Gain on exchange and
cancellation of TRUPs
|
|
-
|
|
(3,175)
|
|
-
|
|
|
|
Equity in (earnings) losses,
net, from unconsolidated joint ventures
|
|
(1,406)
|
|
2,382
|
|
1,449
|
|
|
|
Distributions from
unconsolidated joint ventures
|
|
65
|
|
-
|
|
1,252
|
|
|
|
Payment-in-kind ("PIK") interest
on real estate loans held for sale
|
|
-
|
|
-
|
|
(4,478)
|
|
|
|
Non-cash interest expense on
junior subordinated debentures and notes payable
|
|
-
|
|
1,432
|
|
-
|
|
|
|
Non-cash expense related to
shares issued for TRUPs exchange and cancellation
|
|
-
|
|
145
|
|
-
|
|
|
|
Stock compensation
expense
|
|
-
|
|
17
|
|
241
|
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in other
assets
|
|
106
|
|
87
|
|
(16)
|
|
|
|
|
Decrease (increase) in accrued
interest receivable
|
|
1,007
|
|
4,190
|
|
2,072
|
|
|
|
|
Increase (decrease) in due
to/from affiliates, net
|
|
2,964
|
|
1,551
|
|
(464)
|
|
|
|
|
Increase (decrease) in accounts
payable and accrued expenses
and other liabilities,
net
|
|
(976)
|
|
(500)
|
|
(1,286)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
12,102
|
|
33,731
|
|
36,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
Investment in unconsolidated
joint ventures
|
|
-
|
|
(1,606)
|
|
(2,231)
|
|
|
(Increase) decrease in
restricted cash, net
|
|
(11,408)
|
|
(5,725)
|
|
5,538
|
|
|
Proceeds from repayment of real
estate loans
|
|
11,728
|
|
5,534
|
|
8,528
|
|
|
Proceeds from sale of real
estate loans
|
|
-
|
|
-
|
|
114,752
|
|
|
Proceeds from sale of
unconsolidated joint ventures
|
|
-
|
|
-
|
|
39,448
|
|
|
Proceeds from sale of CMBS
investments
|
|
5,500
|
|
-
|
|
-
|
|
|
|
|
Net cash provided by (used
in) investing activities
|
|
5,820
|
|
(1,797)
|
|
166,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
-
|
|
(2,274)
|
|
(51,637)
|
|
|
Proceeds from repurchase
agreements
|
|
-
|
|
-
|
|
2,926
|
|
|
Repayment of repurchase
agreements
|
|
(6,966)
|
|
(9,142)
|
|
(223,065)
|
|
|
Repayment of CDO notes
payable
|
|
(8,390)
|
|
(24,050)
|
|
-
|
|
|
Repayment of note
payable
|
|
-
|
|
(540)
|
|
-
|
|
|
Exchange and cancellation of
junior subordinated debentures
|
|
-
|
|
(337)
|
|
-
|
|
|
Payment of financing
costs
|
|
-
|
|
-
|
|
(3,014)
|
|
|
Payment of interest rate swap
termination costs
|
|
(1,560)
|
|
(3,280)
|
|
(6,885)
|
|
|
|
|
Net cash used in financing
activities
|
|
(16,916)
|
|
(39,623)
|
|
(281,675)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash
equivalents
|
|
1,006
|
|
(7,689)
|
|
(79,199)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period
|
|
668
|
|
8,357
|
|
87,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end
of period
|
|
$
1,674
|
|
$
668
|
|
$
8,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Cash
Flow Information
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
|
$
21,463
|
|
$
37,957
|
|
$
68,752
|
|
|
Non-cash note payable in
satisfaction of interest rate swap agreements
|
|
$
-
|
|
$
9,000
|
|
$
-
|
|
|
Non-cash note payable in
satisfaction of repurchase agreement
|
|
$
-
|
|
$
-
|
|
$
500
|
|
|
Transfer of real estate loans in
satisfaction of repurchase agreement
|
|
$
-
|
|
$
-
|
|
$
25,171
|
|
|
Dividends declared but not
paid
|
|
$
-
|
|
$
-
|
|
$
2,274
|
|
|
Stock issued as part of exchange
and cancellation of TRUPs
|
|
$
-
|
|
$
382
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE JER Investors Trust Inc.