Segment Reporting

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements

Segment Reporting

Note 20. Segment Reporting

We operate in two reportable segments. We have an internal information system that produces performance and asset data for our two segments along service lines.

The Balance Sheet Investment segment includes our consolidated portfolio of interest earning assets and the financing thereof. The Investment Management segment includes the investment management activities of our wholly-owned investment management subsidiary, CT Investment Management Co., LLC, or CTIMCO, and its subsidiaries, as well as our co-investments in investment management vehicles. CTIMCO is a taxable REIT subsidiary and serves as the investment manager of Capital Trust, Inc., all of our investment management vehicles and CT CDOs, and serves as senior servicer and special servicer for certain of our investments and for third parties.

The following table details each segment's contribution to our operating results and the identified assets attributable to each such segment for the nine months ended, and as of, September 30, 2011 (in thousands):

	Balance Sheet			Investment			Inter-Segment
	Investment			Management			Activities			Total
Income from loans and other investments:
Interest and related income		$95,187			$—			$—			$95,187
Less: Interest and related expenses		80,381			—			—			80,381
Income from loans and other investments, net		14,806			—			—			14,806
Other revenues:
Management fees from affiliates		—			6,171			(1,244	)		4,927
Servicing fees		—			2,840			(632	)		2,208
Total other revenues		—			9,011			(1,876	)		7,135
Other expenses:
General and administrative		5,372			15,740			(1,244	)		19,868
Servicing fee expense		632			—			(632	)		—
Total other expenses		6,004			15,740			(1,876	)		19,868
Total other-than-temporary impairments of securities		(35,620	)		—			—			(35,620	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		(3,098	)		—			—			(3,098	)
Impairment of real estate held-for-sale		(1,055	)		—			—			(1,055	)
Net impairments recognized in earnings		(39,773	)		—			—			(39,773	)
Recovery of provision for loan losses		34,401			—			—			34,401
Valuation allowance on loans held-for-sale		(224	)		—			—			(224	)
Gain on extinguishment of debt		271,031			—			—			271,031
Income from equity investments		—			2,105			—			2,105
Income (loss) before income taxes		274,237			(4,624	)		—			269,613
Income tax provision (benefit)		2,615			(1,401	)		—			1,214
Net income (loss)		$271,622			($3,223	)		$—			$268,399
Less: Net loss attributable to noncontrolling interests		(1,935	)		—			—			(1,935	)
Net income (loss) attributable to Capital Trust, Inc.		$269,687			($3,223	)		$—			$266,464
Total assets		$1,528,441			$11,448			$—			$1,539,889

All revenues were generated from external sources within the United States. The Investment Management segment earned fees of $1.2 million for management of the Balance Sheet Investment segment and $632,000 for serving as collateral manager of the four CT CDOs consolidated under our Balance Sheet Investment segment.

The following table details each segment's contribution to our operating results and the identified assets attributable to each such segment for the nine months ended, and as of, September 30, 2010 (in thousands):

	Balance Sheet			Investment		Inter-Segment
	Investment			Management		Activities			Total
Income from loans and other investments:
Interest and related income		$119,783			$—		$—			$119,783
Less: Interest and related expenses		94,462			—		—			94,462
Income from loans and other investments, net		25,321			—		—			25,321
Other revenues:
Management fees from affiliates		—			6,244		(254	)		5,990
Incentive management fees		—			733		—			733
Servicing fees		—			4,351		(1,530	)		2,821
Total other revenues		—			11,328		(1,784	)		9,544
Other expenses:
General and administrative		4,659			9,993		(254	)		14,398
Servicing fee expense		1,530			—		(1,530	)		—
Total other expenses		6,189			9,993		(1,784	)		14,398
Total other-than-temporary impairments of securities		(69,798	)		—		—			(69,798	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		12,094			—		—			12,094
Impairment of real estate held-for-sale		(4,000	)							(4,000	)
Net impairments recognized in earnings		(61,704	)		—		—			(61,704	)
Provision for loan losses		(150,143	)		—		—			(150,143	)
Valuation allowance on loans held-for-sale		(6,036	)		—		—			(6,036	)
Gain on extinguishment of debt		648			—		—			648
Income from equity investments		—			2,358		—			2,358
(Loss) income before income taxes		(198,103	)		3,693		—			(194,410	)
Income tax provision		14			835		—			849
Net (loss) income		($198,117	)		$2,858		$—			($195,259	)
Total assets		$4,225,572			$15,943		$—			$4,235,851

All revenues were generated from external sources within the United States. The Investment Management segment earned fees of $254,000 for management of the Balance Sheet Investment segment and $1.5 million for serving as collateral manager of the four CT CDOs consolidated under our Balance Sheet Investment segment as well as special servicing activity for certain CT CDO assets for the nine months ended September 30, 2010.

The following table details each segment's contribution to our operating results and the identified assets attributable to each such segment for the three months ended, and as of, September 30, 2011 (in thousands):

	Balance Sheet			Investment			Inter-Segment
	Investment			Management			Activities			Total
Income from loans and other investments:
Interest and related income		$25,642			$—			$—			$25,642
Less: Interest and related expenses		21,838			—			—			21,838
Income from loans and other investments, net		3,804			—			—			3,804
Other revenues:
Management fees from affiliates		—			2,372			(619	)		1,753
Servicing fees		—			1,671			(211	)		1,460
Total other revenues		—			4,043			(830	)		3,213
Other expenses:
General and administrative		2,427			3,344			(830	)		4,941
Total other expenses		2,427			3,344			(830	)		4,941
Total other-than-temporary impairments of securities		(30,687	)		—			—			(30,687	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		173			—			—			173
Impairment of real estate held-for-sale		(1,055	)		—			—			(1,055	)
Net impairments recognized in earnings		(31,569	)		—			—			(31,569	)
Recovery of provision for loan losses		17,152			—			—			17,152
Gain on extinguishment of debt		20,054			—			—			20,054
Income from equity investments		—			307			—			307
Income before income taxes		7,014			1,006			—			8,020
Income tax provision (benefit)		703			(939	)		—			(236	)
Net income		$6,311			$1,945			$—			$8,256
Less: Net loss attributable to noncontrolling interests		5,466			—			—			5,466
Net income attributable to Capital Trust, Inc.		$11,777			$1,945			$—			$13,722
Total assets		$1,528,441			$11,448			$—			$1,539,889

All revenues were generated from external sources within the United States. The Investment Management segment earned fees of $619,000 for management of the Balance Sheet Investment segment and $211,000 for serving as collateral manager of the four CT CDOs consolidated under our Balance Sheet Investment segment.

The following table details each segment's contribution to our operating results and the identified assets attributable to each such segment for the three months ended, and as of, September 30, 2010 (in thousands):

	Balance Sheet			Investment		Inter-Segment
	Investment			Management		Activities			Total
Income from loans and other investments:
Interest and related income		$40,280			$—		$—			$40,280
Less: Interest and related expenses		31,557			—		—			31,557
Income from loans and other investments, net		8,723			—		—			8,723
Other revenues:
Management fees from affiliates		—			1,859		191			2,050
Incentive management fees		—			733		—			733
Servicing fees		—			1,066		(982	)		84
Total other revenues		—			3,658		(791	)		2,867
Other expenses:
General and administrative		1,295			3,662		191			5,148
Servicing fee expense		982			—		(982	)		—
Total other expenses		2,277			3,662		(791	)		5,148
Total other-than-temporary impairments of securities		(29,963	)		—		—			(29,963	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		(5,921	)		—		—			(5,921	)
Impairment recognized in earnings		(4,000	)							(4,000	)
Net impairments recognized in earnings		(39,884	)		—		—			(39,884	)
Provision for loan losses		(95,916	)		—		—			(95,916	)
Valuation allowance on loans held-for-sale		(6,036	)							(6,036	)
Gain on extinguishment of debt		185			—		—			185
Income from equity investments		—			1,056		—			1,056
(Loss) income before income taxes		(135,205	)		1,052		—			(134,153	)
Income tax provision		—			556		—			556
Net (loss) income		($135,205	)		$496		$—			($134,709	)
Total assets		$4,225,572			$15,943		$—			$4,235,851

All revenues were generated from external sources within the United States. The Investment Management segment earned fees of $191,000 for management of the Balance Sheet Investment segment and earned $982,000 for serving as collateral manager of the four CT CDOs consolidated under our Balance Sheet Investment segment as well as special servicing activity for certain CT CDO assets for the three months ended September 30, 2010.