Segment Reporting

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Segment Reporting

Note 15. 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 three months ended, and as of, March 31, 2012 (in thousands):

	Balance Sheet			Investment		Inter-Segment
	Investment			Management		Activities			Total
Income from loans and other investments:
Interest and related income		$14,716			$—		$—			$14,716
Less: Interest and related expenses		23,342			—		—			23,342
Income from loans and other investments, net		(8,626	)		—		—			(8,626	)
Other revenues:
Management fees from affiliates		—			2,204		(619	)		1,585
Servicing fees		—			2,256		(236	)		2,020
Total other revenues		—			4,460		(855	)		3,605
Other expenses
General and administrative		1,528			3,403		(619	)		4,312
Servicing fees expense		236			—		(236	)		—
Total other expenses		1,764			3,403		(855	)		4,312
Total other-than-temporary impairments of securities		—			—		—			—
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		(160	)		—		—			(160	)
Impairment of real estate held-for-sale		—			—		—			—
Net impairments recognized in earnings		(160	)		—		—			(160	)
Recovery of provision for loan losses		8			—		—			8
Fair value adjustment on investment in CT Legacy Assets		3,954			—		—			3,954
Gain on deconsolidation of subsidiary		146,380			—		—			146,380
Income from equity investments		—			696		—			696
Income before income taxes		139,792			1,753		—			141,545
Income tax provision		300			623		—			923
Net income		$139,492			$1,130		$—			$140,622
Less: Net income attributable to noncontrolling interests		(74,069	)		—		—			(74,069	)
Net income attributable to Capital Trust, Inc.		$65,423			$1,130		$—			$66,553
Total assets		$583,057			$22,501		$—			$605,558

All revenues were generated from external sources within the United States. The Investment Management segment received intercompany preferred dividend income of $619,000 from the Balance Sheet segment for the three months ended March 31, 2012. In addition, the Investment Management segment earned fees of $236,000 for serving as collateral manager of the 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 March 31, 2012.

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, March 31, 2011 (in thousands):

	Balance Sheet			Investment			Inter-Segment
	Investment			Management			Activities			Total
Income from loans and other investments:
Interest and related income		$36,991			$—			$—			$36,991
Less: Interest and related expenses		26,247			—			—			26,247
Income from loans and other investments, net		10,744			—			—			10,744
Other revenues:
Management fees from affiliates		—			2,015			(435	)		1,580
Servicing fees		—			532			(222	)		310
Total other revenues		—			2,547			(657	)		1,890
Other expenses:
General and administrative		4,504			6,211			(435	)		10,280
Servicing fee expense		222			—			(222	)		—
Total other expenses		4,726			6,211			(657	)		10,280
Total other-than-temporary impairments of securities		(4,933	)		—			—			(4,933	)
Portion of other-than-temporary impairments of securities recognized in other comprehensive income		(3,271	)		—			—			(3,271	)
Net impairments recognized in earnings		(8,204	)		—			—			(8,204	)
Recovery of provision for loan losses		9,161			—			—			9,161
Gain on extinguishment of debt		250,040			—			—			250,040
Income from equity investments		—			955			—			955
Income (loss) before income taxes		257,015			(2,709	)		—			254,306
Income tax provision		332			57			—			389
Net income (loss)		$256,683			($2,766	)		$—			$253,917
Less: Net loss attributable to noncontrolling interests		668			—			—			668
Net income (loss) attributable to Capital Trust, Inc.		$257,351			($2,766	)		$—			$254,585
Total assets		$3,886,926			$7,655			($3,461	)		$3,891,120

All revenues were generated from external sources within the United States. The Investment Management segment earned fees of $435,000 for management of the Balance Sheet Investment segment for the three months ended March 31, 2011. In addition, the Investment Management segment earned fees of $222,000 for serving as collateral manager of the 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 March 31, 2011.