Segment Reporting

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Segment Reporting

Note 21. 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 year ended, and as of, December 31, 2011 (in thousands):

	Balance Sheet			Investment		Inter-Segment
	Investment			Management		Activities			Total
Income from loans and other investments:
Interest and related income		$117,162			$—		$—			$117,162
Less: Interest and related expenses		96,974			—		—			96,974
Income from loans and other investments, net		20,188			—		—			20,188
Other revenues:
Management fees from affiliates		—			8,481		(1,863	)		6,618
Servicing fees		—			9,889		(1,392	)		8,497
Total other revenues		—			18,370		(3,255	)		15,115
Other expenses
General and administrative		7,310			18,420		(1,863	)		23,867
Servicing fees expense		1,392			—		(1,392	)		—
Total other expenses		8,702			18,420		(3,255	)		23,867
Total other-than-temporary impairments of securities		(49,309	)		—		—			(49,309	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		1,243			—		—			1,243
Impairment of real estate held-for-sale		(1,055	)		—		—			(1,055	)
Net impairments recognized in earnings		(49,121	)		—		—			(49,121	)
Recovery of provision for loan losses		19,326			—		—			19,326
Valuation allowance on loans held-for-sale		(1,456	)		—		—			(1,456	)
Gain on extinguishment of debt		271,031			—		—			271,031
Income from equity investments		—			3,649		—			3,649
Income before income taxes		251,266			3,599		—			254,865
Income tax provision		1,425			1,121		—			2,546
Net income		$249,841			$2,478		$—			$252,319
Add: Net loss attributable to noncontrolling interests		5,823			—		—			5,823
Net income attributable to Capital Trust, Inc.		$255,664			$2,478		$—			$258,142
Total assets		$1,350,029			$16,287		$—			$1,366,316

All revenues were generated from external sources within the United States. The Investment Management segment earned fees of $1.4 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 year ended December 31, 2011. In addition, the investment management segment received intercompany preferred dividend income of $1.9 million from the balance sheet segment for the year ended December 31, 2011.

The following table details each segment's contribution to our operating results and the identified assets attributable to each such segment for the year ended, and as of, December 31, 2010 (in thousands):

	Balance Sheet			Investment		Inter-Segment
	Investment			Management		Activities			Total
Income from loans and other investments:
Interest and related income		$158,793			$1		$—			$158,794
Less: Interest and related expenses		123,963			—		—			123,963
Income from loans and other investments, net		34,830			1		—			34,831
Other revenues:
Management fees from affiliates		—			7,808		—			7,808
Incentive management fees from affiliates		—			733		—			733
Servicing fees		—			8,189		(1,785	)		6,404
Total other revenues		—			16,730		(1,785	)		14,945
Other expenses
General and administrative		5,899			12,900		—			18,799
Servicing fee expense		1,785			—		(1,785	)		—
Total other expenses		7,684			12,900		(1,785	)		18,799
Total other-than-temporary impairments of securities		(77,960	)		—		—			(77,960	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		9,594			—		—			9,594
Impairment of real estate held-for-sale		(4,000	)		—		—			(4,000	)
Net impairments recognized in earnings		(72,366	)		—		—			(72,366	)
Provision for loan losses		(146,478	)		—		—			(146,478	)
Valuation allowance on loans held-for-sale		(2,119	)		—		—			(2,119	)
Gain on extinguishment of debt		3,134			—		—			3,134
Income from equity investments		—			3,608		—			3,608
(Loss) income before income taxes		(190,683	)		7,439		—			(183,244	)
Income tax provision		14			2,086		—			2,100
Net (loss) income		($190,697	)		$5,353		$—			($185,344	)
Total assets		$4,109,465			$14,484		($3,259	)		$4,120,690

All revenues were generated from external sources within the United States. The Investment Management segment earned fees of $1.8 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 year ended December 31, 2010.

The following table details each segment's contribution to our operating results and the identified assets attributable to each such segment for the year ended, and as of, December 31, 2009 (in thousands):

	Balance Sheet			Investment			Inter-Segment
	Investment			Management			Activities			Total
Income from loans and other investments:
Interest and related income		$121,968			$16			($13	)		$121,971
Less: Interest and related expenses		79,794			13			(13	)		79,794
Income from loans and other investments, net		42,174			3			—			42,177
Other revenues:
Management fees from affiliates		—			13,512			(1,769	)		11,743
Servicing fees		—			3,008			(1,329	)		1,679
Total other revenues		—			16,520			(3,098	)		13,422
Other expenses
General and administrative		8,083			15,859			(1,769	)		22,173
Servicing fee expense		1,329			—			(1,329	)		—
Total other expenses		9,412			15,859			(3,098	)		22,173
Total other-than-temporary impairments of securities		(123,894	)		—			—			(123,894	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		14,256			—			—			14,256
Impairment of goodwill		—			(2,235	)		—			(2,235	)
Impairment of real estate held-for-sale		(2,233	)		—			—			(2,233	)
Net impairments recognized in earnings		(111,871	)		(2,235	)		—			(114,106	)
Provision for loan losses		(482,352	)		—			—			(482,352	)
Loss on sale of investments		(10,363	)		—			—			(10,363	)
Loss from equity investments		—			(3,736	)		—			(3,736	)
Loss before income taxes		(571,824	)		(5,307	)		—			(577,131	)
Income tax benefit		(408	)		(286	)		—			(694	)
Net loss		($571,416	)		($5,021	)		$—			($576,437	)
Total assets		$1,926,019			$12,783			($2,167	)		$1,936,635

All revenues were generated from external sources within the United States. The Investment Management segment earned fees of $1.8 million for management of the Balance Sheet Investment segment and $1.3 million for serving as collateral manager of the four CT CDOs consolidated under our Balance Sheet Investment segment, and was charged $13,000 for inter-segment interest for the year ended December 31, 2009, which is reflected as offsetting adjustments to other interest income and other interest expense in the inter-segment activities column in the table above.