KKR REAL ESTATE FINANCE TRUST INC. REPORTS
SECOND QUARTER 2019 FINANCIAL RESULTS
New York, NY, August 1, 2019 - KKR Real Estate Finance Trust Inc. (the “Company” or “KREF”) (NYSE: KREF) today reported its financial results for the quarter ended June 30, 2019.
Reported net income attributable to common stockholders of $17.4 million, or $0.30 per basic and diluted share of common stock, for the three months ended June 30, 2019, compared to net income attributable to common stockholders of $24.7 million or $0.43 per basic and diluted share of common stock for the three months ended March 31, 2019.
Reported Net Core Earnings of $20.5 million, or $0.36 per basic and diluted share of common stock, for the three months ended June 30, 2019, compared to Net Core Earnings of $25.3 million, or $0.44 per basic and diluted share of common stock for the three months ended March 31, 2019.
Second Quarter 2019 Highlights
• | Committed and initially funded $1,649.6 million and $1,431.0 million, respectively, to six new floating-rate senior loans with an average loan size of $275.0 million and a weighted average deployment date of early June 2019. Funded an additional $43.0 million for loans closed prior to the second quarter. Loan commitments over the last twelve months totaled $3,452.1 million. |
• | Received approximately $272.0 million from the repayment of loans, including $65.0 million from a pari passu loan syndication. |
• | Current portfolio of $5.0 billion is 100% performing and 99% floating-rate with a weighted average loan-to-value ratio ("LTV") of 66% as of June 30, 2019. Current portfolio increased 67% over the second quarter of 2018 and 32% since March 31, 2019. |
• | Entered into a new $900.0 million non-mark-to-market ("Non-MTM") term lending agreement, bringing our total Non-MTM portfolio financing to 73%, based on outstanding portfolio borrowings as of June 30, 2019. |
• | Increased the borrowing capacity on the corporate revolving credit facility ("Revolver") from $140.0 million to $250.0 million. |
• | Increased the borrowing capacity on one of our term credit facilities and our asset specific financing facility by an aggregate of $250.0 million. |
• | Book value was $1,122.0 million or $19.54 per share as of June 30, 2019, compared to $1,128.7 million or $19.67 per share as of March 31, 2019. The decrease in book value per share from March 31, 2019 to June 30, 2019 was primarily attributable to the impact on net interest income from significant late-quarter capital deployment and $2.2 million, or $0.04 per share, of unrealized loss on our balance sheet CMBS B-Piece investments. |
Chris Lee and Matt Salem, Co-Chief Executive Officers of KREF, stated: “The second quarter was the largest origination quarter in KREF’s history, with six new loan originations totaling $1.6 billion. Despite the timing of several closings in late June having a negative impact on this quarter's GAAP and Net Core Earnings, we feel well positioned going into the second half of 2019. We also continued to improve the cost and structure of our liabilities. As of quarter-end, 73% of our outstanding portfolio borrowings are non-mark-to-market compared to 60% as of December 31, 2018. We feel good about our competitive positioning and our portfolio and are looking forward to the remainder of 2019.”
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Second Quarter 2019 Investment Activity
Loan Originations
The Company committed capital to the following floating-rate senior loans ($ in thousands):
Description/ Location | Property Type | Month Originated | Maximum Face Amount | Initial Face Amount Funded | Interest Rate(A) | Maturity Date(B) | LTV | |||||||||||
Senior Loan, Philadelphia, PA | Office | April 2019 | $ | 182,600 | $ | 136,500 | L + 2.6% | May 2024 | 65% | |||||||||
Senior Loan, Brooklyn, NY | Multifamily | May 2019 | 386,000 | 324,400 | L + 2.7 | June 2024 | 51 | |||||||||||
Senior Loan, Various | Multifamily | May 2019 | 216,500 | 171,850 | L + 3.5 | June 2024 | 74 | |||||||||||
Senior Loan, Chicago, IL | Multifamily | June 2019 | 186,000 | 178,500 | L + 2.7 | June 2024 | 74 | |||||||||||
Senior Loan, Arlington, VA | Multifamily | June 2019 | 338,500 | 328,500 | L + 2.5 | July 2024 | 70 | |||||||||||
Senior Loan, Chicago, IL | Multifamily | June 2019 | 340,000 | 291,242 | L + 2.8 | July 2026 | 75 | |||||||||||
Total/Weighted Average | $ | 1,649,600 | $ | 1,430,992 | L + 2.7% | 67% | ||||||||||||
(A) | Floating rate based on one-month USD LIBOR. |
(B) | Maturity date assumes all extension options are exercised, if applicable. |
The weighted average underwritten internal rate of return ("IRR") of all loans originated in the second quarter was 11.5%.
Funding of Previously Closed Loans
The Company funded approximately $43.0 million for loans closed prior to the quarter end.
Loan Repayments
The Company received approximately $272.0 million from loan repayments, including $65.0 million from a pari passu loan syndication.
Quarter End Portfolio Summary
The following table sets forth certain information regarding the Company’s portfolio at June 30, 2019 ($ in millions):
Investment | Committed Principal Amount | Current Carrying Value | Max Remaining Term (Years)(B)(C) | Weighted Average LTV(B) | ||||||||
Senior Loans(A) | $ | 5,520.1 | $ | 4,794.7 | 4.1 | 66% | ||||||
Mezzanine Loan | 5.5 | 5.5 | 6.0 | 78 | ||||||||
CMBS B-Pieces(D) | 74.9 | 45.9 | 9.2 | 60 | ||||||||
Total/Weighted Average | $ | 5,600.6 | $ | 4,846.1 | 4.2 | 66% | ||||||
(A) | Senior loans include senior mortgages and similar credit quality investments, including junior participations in our originated senior loans for which we have syndicated the senior participations and retained the junior participations for our portfolio and excludes pari passu loan syndications. |
(B) | Weighted average is weighted by current principal amount for our senior and mezzanine loans and by net equity for our CMBS B-Pieces. |
(C) | Max remaining term (years) assumes all extension options are exercised, if applicable. |
(D) | Represents CMBS B-Pieces with an aggregate current face amount of $34.9 million and a $35.9 million investment in an aggregator vehicle that invests in CMBS B-Pieces. |
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Portfolio Performance
As of June 30, 2019, the average risk rating of the Company's portfolio was 2.8 (Average Risk), weighted by total loan exposure, with 100.0% of the total loan portfolio rated 3 (Average Risk) or better by KKR Real Estate Finance Manager LLC (our "Manager") as compared to 2.8 (Average Risk) as of March 31, 2019. As of June 30, 2019, no investments were rated 4 (High Risk/Potential for Loss) or 5 (Impaired/Loss Likely).
Non-GAAP Financial Measures
Reconciliation of Core Earnings and Net Core Earnings to Net Income Attributable to Common Stockholders
The table below reconciles Core Earnings and Net Core Earnings and related diluted per share amounts to net income attributable to common stockholders and related diluted per share amounts, respectively, for the three months ended June 30, 2019 and March 31, 2019 and the three months ended June 30, 2019 and 2018 ($ in thousands, except per share data):
Three Months Ended | Per Diluted Share | Three Months Ended | Per Diluted Share | |||||||||||||
June 30, 2019 | March 31, 2019 | |||||||||||||||
Net Income Attributable to Common Stockholders | $ | 17,381 | $ | 0.30 | $ | 24,705 | $ | 0.43 | ||||||||
Adjustments | ||||||||||||||||
Non-cash equity compensation expense | 1,043 | 0.02 | 991 | 0.02 | ||||||||||||
Incentive compensation to affiliate | 1,145 | 0.02 | 953 | 0.02 | ||||||||||||
Depreciation and amortization | — | — | — | — | ||||||||||||
Unrealized (gains) or losses(A) | 1,979 | 0.03 | (464 | ) | (0.01 | ) | ||||||||||
Non-cash convertible notes discount amortization | 90 | — | 89 | — | ||||||||||||
Core Earnings(B) | $ | 21,638 | $ | 0.38 | $ | 26,274 | $ | 0.46 | ||||||||
Incentive compensation to affiliate | 1,145 | 0.02 | 953 | 0.02 | ||||||||||||
Net Core Earnings | $ | 20,493 | $ | 0.36 | $ | 25,321 | $ | 0.44 | ||||||||
Weighted average number of shares of common stock outstanding, diluted | 57,507,219 | 57,477,234 | ||||||||||||||
(A) | Includes ($0.2) million non-cash redemption value adjustment of our Special Non-Voting Preferred Stock and $2.2 million of unrealized loss on CMBS B-Pieces for the three months ended June 30, 2019. Includes ($0.6) million non-cash redemption value adjustment of our Special Non-Voting Preferred Stock and $0.2 million of unrealized loss on CMBS B-Pieces for the three months ended March 31, 2019. |
(B) | Excludes $0.2 million and $0.2 million, or $0.00 and $0.00 per diluted weighted average share outstanding, of net original issue discount on CMBS B-Pieces accreted as a component of taxable income during the three months ended June 30, 2019 and March 31, 2019, respectively. |
Three Months Ended | Per Diluted Share | Three Months Ended | Per Diluted Share | |||||||||||||
June 30, 2019 | June 30, 2018 | |||||||||||||||
Net Income Attributable to Common Stockholders | $ | 17,381 | $ | 0.30 | $ | 23,483 | $ | 0.44 | ||||||||
Adjustments | ||||||||||||||||
Non-cash equity compensation expense | 1,043 | 0.02 | 273 | 0.01 | ||||||||||||
Incentive compensation to affiliate | 1,145 | 0.02 | — | — | ||||||||||||
Depreciation and amortization | — | — | — | — | ||||||||||||
Unrealized (gains) or losses(A) | 1,979 | 0.03 | 1,822 | 0.03 | ||||||||||||
Non-cash convertible notes discount amortization | 90 | — | 42 | — | ||||||||||||
Reversal of previously unrealized gain now realized(B) | — | — | 11,900 | 0.22 | ||||||||||||
Core Earnings(C) | $ | 21,638 | $ | 0.38 | $ | 37,520 | $ | 0.71 | ||||||||
Incentive compensation to affiliate | 1,145 | 0.02 | — | — | ||||||||||||
Net Core Earnings | $ | 20,493 | $ | 0.36 | $ | 37,520 | $ | 0.71 | ||||||||
Weighted average number of shares of common stock outstanding, diluted | 57,507,219 | 53,069,866 | ||||||||||||||
(A) | Includes ($0.2) million non-cash redemption value adjustment of our Special Non-Voting Preferred Stock and $2.2 million of unrealized loss on CMBS B-Pieces for the three months ended June 30, 2019. Includes $0.0 million non-cash redemption value adjustment of our Special Non-Voting Preferred Stock and $1.8 million of unrealized loss on CMBS B-Pieces for the three months ended June 30, 2018. |
(B) | Includes $5.5 and $6.4 million unrealized gains related to the first quarter of 2018 and to prior periods, respectively, that were realized during the three months ended June 30, 2018. |
(C) | Excludes $0.2 million and $0.2 million, or $0.00 and $0.00 per diluted weighted average share outstanding, of net original issue discount on CMBS B-Pieces accreted as a component of taxable income during the three months ended June 30, 2019 and 2018, respectively. |
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Book Value
The Company’s book value per share of common stock was $19.54 at June 30, 2019, as compared to book value per share of common stock of $19.67 at March 31, 2019 and $19.66 at December 31, 2018.
Book value per share as of June 30, 2019 includes the year to date impact of a $0.8 million, or $0.01 per common share, non-cash redemption value adjustment to our redeemable Special Non-Voting Preferred Stock (“SNVPS”), resulting in a cumulative (since issuance of the SNVPS) decrease of $2.0 million to our book value (“SNVPS Cumulative Impact”) as of June 30, 2019. Upon redemption of the SNVPS, our book value will increase as a result of a one-time gain, thus substantially eliminating the SNVPS Cumulative Impact on our book value. See Note 9 - Equity, to our condensed consolidated financial statements within our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, for detailed discussion of the SNVPS.
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Subsequent Events
The following events occurred subsequent to June 30, 2019:
Investing Activities
The Company originated the following senior loan:
Description/ Location | Property Type | Month Originated | Maximum Face Amount | Initial Face Amount Funded | Interest Rate(A) | Maturity Date(B) | LTV | |||||||||||
Chicago, IL | Office | July 2019 | $ | 170,000 | $ | 119,100 | L + 3.2% | August 2024 | 59% | |||||||||
(A) | Floating rate based on one-month USD LIBOR. |
(B) | Maturity date assumes all extension options are exercised, if applicable. |
Funding of Previously Closed Loans
The Company funded approximately $32.0 million for previously closed loans.
Loan Repayments
The Company received approximately $4.4 million from loan paydowns.
Financing Activities
The Company net borrowed $98.1 million under its secured financing agreements.
Corporate Activities
Dividends
In July 2019, KREF paid $24.7 million in dividends on its common and special voting preferred stock, or $0.43 per share, with respect to the second quarter of 2019, to stockholders of record on June 28, 2019.
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Teleconference Details:
The Company will host a conference call to discuss its financial results on Friday, August 2, 2019 at 10:00 a.m. Eastern Time. Members of the public who are interested in participating in the Company’s second quarter 2019 earnings teleconference call should dial from the U.S., (844) 784-1730, or from outside the U.S., +1 (412) 380-7410, shortly before 10:00 a.m. and reference the KKR Real Estate Finance Trust Inc. Teleconference Call; a pass code is not required. Please note the teleconference call will be available for replay beginning approximately two hours after the broadcast. To access the replay, callers from the U.S. should dial (877) 344-7529 and callers from outside the U.S. should dial +1 (412) 317-0088, and enter conference identification number 10132896.
Webcast:
The conference call will also be available on the Company’s website at www.kkrreit.com. To listen to a live broadcast, please go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. A replay of the webcast will also be available for 30 days on the Company’s website.
Supplemental Information
The slide presentation accompanying this release and containing supplemental information about the Company’s financial results for the fiscal quarter ended June 30, 2019 may also be accessed through the investor relations section of the Company’s website at www.kkrreit.com.
About KKR Real Estate Finance Trust Inc.
KKR Real Estate Finance Trust Inc. (NYSE: KREF) is a real estate investment trust that primarily originates or acquires senior loans collateralized by institutional-quality commercial real estate assets that are owned and operated by experienced and well-capitalized sponsors and located in liquid markets with strong underlying fundamentals. The Company's target assets also include mezzanine loans, preferred equity and other debt-oriented instruments with these characteristics. The Company is externally managed and advised by KKR Real Estate Finance Manager LLC, a registered investment adviser and an indirect subsidiary of KKR & Co. Inc., a leading global alternative investment firm with an over 40-year history of leadership, innovation and investment excellence and $205.7 billion of assets under management as of June 30, 2019.
Additional information can be found on the Company’s website at www.kkrreit.com.
Forward-Looking Statements
This release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company’s current views with respect to, among other things, its future operations and financial performance. You can identify these forward looking statements by the use of words such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “should,” “seek,” “approximately,” “predict,” “intend,” “will,” “plan,” “estimate,” “anticipate,” the negative version of these words, other comparable words or other statements that do not relate strictly to historical or factual matters. The forward-looking statements are based on the Company’s beliefs, assumptions and expectations, taking into account all information currently available to it. 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. Such forward-looking statements are subject to various risks and uncertainties, including, among other things: the general political, economic and competitive conditions in the United States and in any foreign jurisdictions in which the Company invests; the level and volatility of prevailing interest rates and credit spreads; adverse changes in the real estate and real estate capital markets; general volatility of the securities markets in which the Company participates; changes in the Company’s business, investment strategies or target assets; difficulty in obtaining financing or raising capital; adverse legislative or regulatory developments; reductions in the yield on the Company’s investments and increases in the cost of the Company’s financing; acts of God such as hurricanes, earthquakes and other natural disasters, acts of war and/or terrorism and other events that may cause unanticipated and uninsured performance declines and/or losses to the Company or the owners and operators of the real estate securing the Company’s investments; deterioration in the performance of properties securing the Company’s investments that may cause deterioration in the performance of the Company’s investments and, potentially, principal losses to the Company; defaults by borrowers in paying debt service on outstanding indebtedness; the adequacy of collateral securing the Company’s investments and declines in the fair value of the Company’s investments; adverse developments in the availability of desirable investment opportunities whether they are due to competition, regulation or otherwise; difficulty in successfully managing the Company’s
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growth, including integrating new assets into the Company’s existing systems; the cost of operating the Company’s platform, including, but not limited to, the cost of operating a real estate investment platform and the cost of operating as a publicly traded company; the availability of qualified personnel and the Company’s relationship with our Manager; KKR controls the Company and its interests may conflict with those of the Company’s stockholders in the future; the Company’s qualification as a REIT for U.S. federal income tax purposes and the Company’s exclusion from registration under the Investment Company Act of 1940; authoritative GAAP or policy changes from such standard-setting bodies such as the Financial Accounting Standards Board, the Securities and Exchange Commission (the “SEC”), the Internal Revenue Service, the New York Stock Exchange and other authorities that the Company is subject to, as well as their counterparts in any foreign jurisdictions where the Company might do business; and other risks and uncertainties, including those described under Part I—Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as such factors may be updated from time to time in the Company’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in this release. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and information included in this release and in the Company’s filings with the SEC. All forward-looking statements in this release speak only as of the date of this release. The Company undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by law.
CONTACT INFORMATION
Investor Relations:
KKR Real Estate Finance Trust Inc.
Michael Shapiro
Tel: +1-888-806-7781(U.S.) / +1-646-901-5920
KREF-IR@kkr.com
Media:
Kohlberg Kravis Roberts & Co. L.P.
Kristi Huller or Cara Major
Tel: +1-212-750-8300
media@kkr.com
Definitions:
"Loan-to-value ratio": Generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated or by the current principal amount as of the date of the most recent as-is appraised value. For our CMBS B-Pieces, LTV is based on the weighted average LTV of the underlying loan pool.
"Internal Rate of Return": IRR is the annualized effective compounded return rate that accounts for the time-value of money and represents the rate of return on an investment over a holding period expressed as a percentage of the investment. It is the discount rate that makes the net present value of all cash outflows (the costs of investment) equal to the net present value of cash inflows (returns on investment). It is derived from the negative and positive cash flows resulting from or produced by each transaction (or for a transaction involving more than one investment, cash flows resulting from or produced by each of the investments), whether positive, such as investment returns, or negative, such as transaction expenses or other costs of investment, taking into account the dates on which such cash flows occurred or are expected to occur, and compounding interest accordingly. The weighted average underwritten IRR for the investments shown reflects the returns underwritten by our Manager taking into account certain assumptions around leverage up to no more than the maximum approved advance rate, and calculated on a weighted average basis assuming no dispositions, early prepayments or defaults but assuming that extension options are exercised and that the cost of borrowings remains constant over the remaining term. With respect to certain loans included in the weighted average underwritten IRR shown, the calculation assumes certain estimates with respect to the timing and magnitude of the initial and future fundings for the total loan commitment and associated loan repayments, and assumes no defaults. With respect to certain loans included in the weighted average underwritten IRR shown, the calculation assumes the one-month spot USD LIBOR as of the date the loan was originated. There can be no assurance that the actual weighted average IRRs will equal the weighted average underwritten IRRs shown.
"Core Earnings" and "Net Core Earnings": Used by the Company to evaluate the Company's performance excluding the effects of certain transactions and GAAP adjustments the Company believes are not necessarily indicative of the current loan activity and operations. The Company also uses Core Earnings to determine the management and incentive fees it pays to its Manager. Core Earnings and Net Core Earnings are measures that are not prepared in accordance with GAAP. The Company defines Core Earnings as net income (loss) attributable to stockholders or, without duplication, owners of the Company's subsidiaries, computed in
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accordance with GAAP, including realized losses not otherwise included in GAAP net income (loss) and excluding (i) non-cash equity compensation expense, (ii) the incentive compensation payable to our Manager, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other similar non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, and (v) one-time events pursuant to changes in GAAP and certain material non-cash income or expense items after discussions between our Manager and board of directors (and after approval by a majority of the independent directors). The exclusion of depreciation and amortization from the calculation of Core Earnings only applies to debt investments related to real estate to the extent the Company forecloses upon the property or properties underlying such debt investments. Net Core Earnings is Core Earnings less incentive compensation payable to our Manager.
The Company believes that providing Core Earnings and Net Core Earnings on a supplemental basis to its net income as determined in accordance with GAAP is helpful to stockholders in assessing the overall performance of the Company’s business. Core Earnings and Net Core Earnings should not be considered as a substitute for GAAP net income. The Company cautions readers that its methodology for calculating Core Earnings and Net Core Earnings may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and as a result, the Company’s reported Core Earnings and Net Core Earnings may not be comparable to similar measures presented by other REITs.
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KKR Real Estate Finance Trust Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(Amounts in thousands, except share and per share data)
June 30, 2019 | December 31, 2018(A) | |||||||
Assets | ||||||||
Cash and cash equivalents(B) | $ | 182,732 | $ | 86,531 | ||||
Commercial mortgage loans, held-for-investment, net | 4,800,213 | 4,001,820 | ||||||
Equity method investments, at fair value | 37,070 | 30,734 | ||||||
Accrued interest receivable | 16,305 | 16,178 | ||||||
Other assets | 14,006 | 3,596 | ||||||
Commercial mortgage loans held in variable interest entities, at fair value | 1,134,579 | 1,092,986 | ||||||
Total Assets | $ | 6,184,905 | $ | 5,231,845 | ||||
Liabilities and Equity | ||||||||
Liabilities | ||||||||
Secured financing agreements, net | $ | 2,892,199 | $ | 1,951,049 | ||||
Collateralized loan obligation, net | 801,860 | 800,346 | ||||||
Convertible notes, net | 138,376 | 137,688 | ||||||
Loan participations sold, net | 65,000 | 85,465 | ||||||
Accounts payable, accrued expenses and other liabilities | 3,797 | 4,529 | ||||||
Dividends payable | 24,915 | 25,097 | ||||||
Accrued interest payable | 5,827 | 7,516 | ||||||
Due to affiliates | 4,718 | 4,712 | ||||||
Variable interest entity liabilities, at fair value | 1,124,178 | 1,080,255 | ||||||
Total Liabilities | 5,060,870 | 4,096,657 | ||||||
Commitments and Contingencies | ||||||||
Temporary Equity | ||||||||
Redeemable preferred stock | 2,031 | 2,846 | ||||||
Permanent Equity | ||||||||
Preferred stock, 50,000,000 authorized (1 share with par value of $0.01 issued and outstanding as of June 30, 2019 and December 31, 2018) | — | — | ||||||
Common stock, 300,000,000 authorized (57,413,069 and 57,596,217 shares with par value of $0.01 issued and outstanding as of June 30, 2019 and December 31, 2018, respectively) | 574 | 576 | ||||||
Additional paid-in capital | 1,164,976 | 1,163,845 | ||||||
Accumulated deficit | (7,588 | ) | (225 | ) | ||||
Repurchased stock, 1,862,689 and 1,649,880 shares repurchased as of June 30, 2019 and December 31, 2018, respectively | (35,958 | ) | (31,854 | ) | ||||
Total KKR Real Estate Finance Trust Inc. stockholders’ equity | 1,122,004 | 1,132,342 | ||||||
Total Permanent Equity | 1,122,004 | 1,132,342 | ||||||
Total Liabilities and Equity | $ | 6,184,905 | $ | 5,231,845 | ||||
(A) Derived from the audited consolidated financial statements as of December 31, 2018.
(B) Includes $42.0 million held in collateralized loan obligation as of June 30, 2019.
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KKR Real Estate Finance Trust Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(Amounts in thousands, except share and per share data)
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||||||||||
2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net Interest Income | ||||||||||||||||||||
Interest income | $ | 62,944 | $ | 64,751 | $ | 40,363 | $ | 127,695 | $ | 72,057 | ||||||||||
Interest expense | 37,089 | 34,842 | 18,798 | 71,931 | 29,488 | |||||||||||||||
Total net interest income | 25,855 | 29,909 | 21,565 | 55,764 | 42,569 | |||||||||||||||
Other Income | ||||||||||||||||||||
Realized gain on sale of investments | — | — | 13,000 | — | 13,000 | |||||||||||||||
Change in net assets related to CMBS consolidated variable interest entities | (1,551 | ) | 342 | (6,408 | ) | (1,209 | ) | 2,081 | ||||||||||||
Income from equity method investments | 868 | 1,125 | 789 | 1,993 | 1,337 | |||||||||||||||
Other income | 671 | 482 | 602 | 1,153 | 763 | |||||||||||||||
Total other income (loss) | (12 | ) | 1,949 | 7,983 | 1,937 | 17,181 | ||||||||||||||
Operating Expenses | ||||||||||||||||||||
General and administrative | 2,781 | 2,361 | 1,686 | 5,142 | 4,349 | |||||||||||||||
Management fees to affiliate | 4,288 | 4,287 | 3,913 | 8,575 | 7,852 | |||||||||||||||
Incentive compensation to affiliate | 1,145 | 953 | — | 2,098 | — | |||||||||||||||
Total operating expenses | 8,214 | 7,601 | 5,599 | 15,815 | 12,201 | |||||||||||||||
Income (Loss) Before Income Taxes, Noncontrolling Interests and Preferred Dividends | 17,629 | 24,257 | 23,949 | 41,886 | 47,549 | |||||||||||||||
Income tax expense (benefit) | 280 | 9 | (33 | ) | 289 | 142 | ||||||||||||||
Net Income (Loss) | 17,349 | 24,248 | 23,982 | 41,597 | 47,407 | |||||||||||||||
Redeemable Noncontrolling Interests in Income (Loss) of Consolidated Joint Venture | — | — | 29 | — | 63 | |||||||||||||||
Net Income (Loss) Attributable to KKR Real Estate Finance Trust Inc. and Subsidiaries | 17,349 | 24,248 | 23,953 | 41,597 | 47,344 | |||||||||||||||
Preferred Stock Dividends and Redemption Value Adjustment | (32 | ) | (457 | ) | 470 | (489 | ) | 581 | ||||||||||||
Net Income (Loss) Attributable to Common Stockholders | $ | 17,381 | $ | 24,705 | $ | 23,483 | $ | 42,086 | $ | 46,763 | ||||||||||
Net Income (Loss) Per Share of Common Stock | ||||||||||||||||||||
Basic | $ | 0.30 | $ | 0.43 | $ | 0.44 | $ | 0.73 | $ | 0.88 | ||||||||||
Diluted | $ | 0.30 | $ | 0.43 | $ | 0.44 | $ | 0.73 | $ | 0.88 | ||||||||||
Weighted Average Number of Shares of Common Stock Outstanding | ||||||||||||||||||||
Basic | 57,412,522 | 57,387,386 | 53,064,585 | 57,400,023 | 53,200,495 | |||||||||||||||
Diluted | 57,507,219 | 57,477,234 | 53,069,866 | 57,492,296 | 53,223,413 | |||||||||||||||
Dividends Declared per Share of Common Stock | $ | 0.43 | $ | 0.43 | $ | 0.43 | $ | 0.86 | $ | 0.83 | ||||||||||
10
