Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K COVER - CENTERLINE HOLDING CO | f8k_aug20100-clnh.htm |
| EX-99.1 - PRESS RELASE 2ND Q FINANCIAL RESULTS - CENTERLINE HOLDING CO | exh99-1.htm |
Centerline Holding
Company
Company
Financial Overview
June 30, 2010
This presentation contains forward-looking statements
about Centerline Holding Company. Certain statements in
this document may constitute forward-looking statements
within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Except
for historical information, the matters discussed in this
press release are forward-looking statements subject to
certain risks and uncertainties. These statements are based
on management's current expectations and beliefs and are
subject to a number of factors and uncertainties that could
cause actual results to differ materially from those
described in the forward-looking statements. These risks
and uncertainties are detailed in Centerline Holding
Company's most recent Annual Report on Form 10-K and
the Quarterly Reports on Form 10-Q for the first and
second quarters of 2010 filed with the Securities and
Exchange Commission, and include, among others,
business limitations caused by adverse changes in real
estate and credit markets and general economic and
business conditions; our ability to generate new income
sources, raise capital for investment funds and maintain
business relationships with providers and users of capital;
changes in applicable laws and regulations; our tax
treatment, the tax treatment of our subsidiaries and the tax
treatment of our investments; risk of allocations of income
to our shareholders without corresponding cash
distributions; possible adverse effects of a future issuance
of shares or a reverse share split; possible deterioration in
cash flows generated by material investments, such as the
Freddie Mac B-Certificate; competition with other
companies; risk of loss under mortgage banking loss
sharing agreements; and risks associated with providing
credit intermediation. Words such as "anticipates",
"expects", "intends", "plans", "believes", "seeks",
"estimates" and similar expressions are intended to
identify forward-looking statements. Such forward-looking
statements speak only as of the date of this document.
Centerline Holding Company expressly disclaims any
obligation or undertaking to release publicly any updates
or revisions to any forward-looking statements contained
herein to reflect any change in Centerline Holding
Company's expectations with regard thereto or change in
events, conditions, or circumstances on which any such
statement is based.
about Centerline Holding Company. Certain statements in
this document may constitute forward-looking statements
within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Except
for historical information, the matters discussed in this
press release are forward-looking statements subject to
certain risks and uncertainties. These statements are based
on management's current expectations and beliefs and are
subject to a number of factors and uncertainties that could
cause actual results to differ materially from those
described in the forward-looking statements. These risks
and uncertainties are detailed in Centerline Holding
Company's most recent Annual Report on Form 10-K and
the Quarterly Reports on Form 10-Q for the first and
second quarters of 2010 filed with the Securities and
Exchange Commission, and include, among others,
business limitations caused by adverse changes in real
estate and credit markets and general economic and
business conditions; our ability to generate new income
sources, raise capital for investment funds and maintain
business relationships with providers and users of capital;
changes in applicable laws and regulations; our tax
treatment, the tax treatment of our subsidiaries and the tax
treatment of our investments; risk of allocations of income
to our shareholders without corresponding cash
distributions; possible adverse effects of a future issuance
of shares or a reverse share split; possible deterioration in
cash flows generated by material investments, such as the
Freddie Mac B-Certificate; competition with other
companies; risk of loss under mortgage banking loss
sharing agreements; and risks associated with providing
credit intermediation. Words such as "anticipates",
"expects", "intends", "plans", "believes", "seeks",
"estimates" and similar expressions are intended to
identify forward-looking statements. Such forward-looking
statements speak only as of the date of this document.
Centerline Holding Company expressly disclaims any
obligation or undertaking to release publicly any updates
or revisions to any forward-looking statements contained
herein to reflect any change in Centerline Holding
Company's expectations with regard thereto or change in
events, conditions, or circumstances on which any such
statement is based.
Centerline Corporate Overview
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corporate overview
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business groups
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competitive advantages
Equity Ownership Summary
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equity ownership
(all shares are based on their common equivalency)
(all shares are based on their common equivalency)
(1) Special Series A Shareholder, 1:15 conversion ratio to common shares.
(2) Excludes common and SCU shares owned by The Related Companies as they are shown separately.
(3) The FDIC, in its capacity as Receiver, is the record owner of Special Series A Shares on behalf of the following entities: California National Bank,
California Savings Bank, San Diego National Bank, Indy Mac Bank, F.S.B., North Houston Bank, and Community Bank & Trust.
Supplemental Financial Statements
Prior periods in the accompanying supplemental financial information have been
reclassified to reflect the March 2010 Restructuring and the impact of discontinued
operations in accordance with Financial Accounting Standards Board Accounting
Standards Codification Subtopic 205-20, Discontinued Operations.
reclassified to reflect the March 2010 Restructuring and the impact of discontinued
operations in accordance with Financial Accounting Standards Board Accounting
Standards Codification Subtopic 205-20, Discontinued Operations.
The accompanying “As Adjusted” balance sheets and statements of operations are not
in accordance with GAAP, are presented for the purpose of enhancing the understanding
of the economics of our business, and may not be comparable to figures reported by
other companies.
in accordance with GAAP, are presented for the purpose of enhancing the understanding
of the economics of our business, and may not be comparable to figures reported by
other companies.
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consolidated balance sheet
(1) Adjusted to exclude Consolidated Partnerships, mortgage revenue bonds re-securitized in December 2007, Credit Risk Products subsidiaries and Equity Issuer Trust subsidiary.
Refer to pages 19, 20, 25 and 26 for further details on adjustments.
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as adjusted balance sheet(1)
(1) Adjusted to exclude Consolidated Partnerships, mortgage revenue bonds re-securitized in December 2007, Credit Risk Products subsidiaries and Equity Issuer Trust subsidiary.
Refer to pages 19, 25 and 26 for further details on adjustments.
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(1) Adjusted to exclude Consolidated Partnerships, mortgage revenue bonds re-securitized in December 2007, Credit Risk Products subsidiaries and Equity Issuer Trust subsidiary.
Refer to pages 19, 25 and 26 for further details on adjustments.
(2) In July 2010, we paid down approximately $9.5 million of the term loan with funds released from an escrow account established in connection with the March 2010 Restructuring.
(3) Facility size includes the $12.0 million in letters of credit issued under the Revolving Credit Facility (once these letters of credit are terminated these amounts can not be redrawn).
as adjusted balance sheet (cont.)(1)
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capital summary*
* All values and balances are as of June 30, 2010.
(1) Excludes Centerline Financial Holdings
and Centerline Financial LLC credit facilities.
(2) In July 2010, we paid down approximately $9.5
million of the term loan with funds released from
an escrow account established in connection with
the March 2010 Restructuring.
(3) Credit Capacity includes the $12.0 million
in letters of credit which was issued under the
Revolving Credit Facility (once these letters of
credit are terminated these amounts can not be
redrawn).
(4) Series A CRA Preferred Shareholders hold an
option which allows these shares to be put to
the company at their liquidation price beginning
December 2012. Market Value is based on
liquidation value as of 6/30/2010.
(5) Market value as of 6/30/2010 based on 1:15
conversion ratio to common shares.
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consolidated statements of operations
(1) Adjusted to exclude Consolidated Partnerships,
mortgage revenue bonds re-securitized in
December 2007, Credit Risk Products subsidiaries
and Equity Issuer Trust subsidiary. Refer to pages
21-22 and 25-26 for further details on
adjustments.
mortgage revenue bonds re-securitized in
December 2007, Credit Risk Products subsidiaries
and Equity Issuer Trust subsidiary. Refer to pages
21-22 and 25-26 for further details on
adjustments.
(2) Includes prepayment penalties, expense
reimbursements, gains on sales of mortgage
loans and other revenues.
reimbursements, gains on sales of mortgage
loans and other revenues.
(3) The numerator of the calculation of basic and
diluted net income per share includes the effect of
redeemable share conversions, the dividends in
arrears for 2009, and for 2010 a reversal of all
preferred dividends in arrears upon conversion of
the preferred CRA shares into Special Series A
Shares.
diluted net income per share includes the effect of
redeemable share conversions, the dividends in
arrears for 2009, and for 2010 a reversal of all
preferred dividends in arrears upon conversion of
the preferred CRA shares into Special Series A
Shares.
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consolidated statements of operations
* Six months ended June 30, 2010 amounts include
non-recurring items recorded as a result of the
March 2010 Restructuring. Refer to page 18.
non-recurring items recorded as a result of the
March 2010 Restructuring. Refer to page 18.
(1) Adjusted to exclude Consolidated Partnerships,
mortgage revenue bonds re-securitized in
December 2007, Credit Risk Products subsidiaries
and Equity Issuer Trust subsidiary. Refer to pages
23-24 and 25-26 for further details on
adjustments.
mortgage revenue bonds re-securitized in
December 2007, Credit Risk Products subsidiaries
and Equity Issuer Trust subsidiary. Refer to pages
23-24 and 25-26 for further details on
adjustments.
(2) Includes prepayment penalties, expense
reimbursements, gains on sales of mortgage
loans and other revenues.
reimbursements, gains on sales of mortgage
loans and other revenues.
(3) The numerator of the calculation of basic and
diluted net income per share includes the effect of
redeemable share conversions, the dividends in
arrears for 2009, and for 2010 a reversal of all
preferred dividends in arrears upon conversion of
the preferred CRA shares into Special Series A
Shares.
diluted net income per share includes the effect of
redeemable share conversions, the dividends in
arrears for 2009, and for 2010 a reversal of all
preferred dividends in arrears upon conversion of
the preferred CRA shares into Special Series A
Shares.
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Key Revenue Drivers:
Investment management income
Investment income
Transactional income
as adjusted income statement(1)
(1) Adjusted to exclude Consolidated Partnerships, mortgage revenue bonds re-securitized in December 2007, Credit Risk Products subsidiaries and Equity Issuer Trust subsidiary.
Refer to pages 21, 25 and 26 for further details on adjustments.
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Key Revenue Drivers:
Investment management income
Investment income
Transactional income
as adjusted income statement(1)
(1) Adjusted to exclude Consolidated Partnerships, mortgage revenue bonds re-securitized in December 2007, Credit Risk Products subsidiaries and Equity Issuer Trust subsidiary.
Refer to pages 23, 25 and 26 for further details on adjustments.
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as adjusted income statement (cont.)(1)
Non-Recurring Items Recorded as a result of the
March 2010 Restructuring
March 2010 Restructuring
* The total increase to net income is included in net income attributable to Centerline Holding Company shareholders for the six months ended June 30, 2010.
(1) Adjusted to exclude Consolidated Partnerships, mortgage revenue bonds re-securitized in December 2007, Credit Risk Products subsidiaries and Equity Issuer Trust subsidiary.
Refer to pages 23, 25 and 26 for further details on adjustments.
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detailed as adjusted balance sheet
(1) Refer to pages 25 and 26 for further details on adjustments.
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detailed as adjusted balance sheet (cont.)
(1) Refer to pages 25 and 26 for further details on adjustments.
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detailed as adjusted income statement
(1) Refer to pages 25 and 26 for further details on adjustments.
(2) Includes prepayment penalties, expense reimbursements, gains on sales of mortgage loans and other revenues.
(3) The numerator of the calculation of basic and diluted net income per share includes the dividends in arrears for 2009 and for 2010 a reversal of all preferred dividends in arrears upon
conversion of the preferred CRA shares into Special Series A Shares, and the effect of redeemable share conversions.
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(1) Refer to pages 25 and 26 for further details on adjustments.
(2) Includes prepayment penalties, expense reimbursements, gains on sales of mortgage loans and other revenues.
(3) The numerator of the calculation of basic and diluted net income per share includes the dividends in arrears for 2009 and for 2010 a reversal of all preferred dividends in arrears upon
conversion of the preferred CRA shares into Special Series A Shares, and the effect of redeemable share conversions.
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detailed as adjusted income statement (cont.)
* Six months ended June 30, 2010 amounts include non-recurring items recorded as a result of the March 2010 Restructuring. Refer to page 18.
(1) Refer to pages 25 and 26 for further details on adjustments.
(2) Includes prepayment penalties, expense reimbursements, gains on sales of mortgage loans and other revenues.
(3) The numerator of the calculation of basic and diluted net income per share includes the dividends in arrears for 2009 and for 2010 a reversal of all preferred dividends in arrears upon
conversion of the preferred CRA shares into Special Series A Shares, and the effect of redeemable share conversions.
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detailed as adjusted income statement (cont.)
(1) Refer to pages 25 and 26 for further details on adjustments.
(2) Includes prepayment penalties, expense reimbursements, gains on sales of mortgage loans and other revenues.
(3) The numerator of the calculation of basic and diluted net income per share includes the dividends in arrears for 2009 and for 2010 a reversal of all preferred dividends in arrears upon
conversion of the preferred CRA shares into Special Series A Shares, and the effect of redeemable share conversions.
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detailed as adjusted operations
Consolidated Partnerships
Centerline’s operating results include the results of Tax Credit Fund Partnerships that are required to be consolidated pursuant to various accounting pronouncements, as well as
other Tax Credit Fund Partnerships and Property Partnerships that Centerline controls but in which it has little or no equity interest. As Centerline has virtually no economic interest
in these partnerships, the net losses they generated were allocated almost entirely to the Partnerships' investors. The consolidation, therefore, has an insignificant impact on net
income (loss), although certain Centerline operating results are eliminated in consolidation, and operating results of the consolidated partnerships are reflected in the income
statement.
other Tax Credit Fund Partnerships and Property Partnerships that Centerline controls but in which it has little or no equity interest. As Centerline has virtually no economic interest
in these partnerships, the net losses they generated were allocated almost entirely to the Partnerships' investors. The consolidation, therefore, has an insignificant impact on net
income (loss), although certain Centerline operating results are eliminated in consolidation, and operating results of the consolidated partnerships are reflected in the income
statement.
Given the above, the Company is presenting its operating results adjusted to exclude the impact of such partnerships’ consolidation.
Mortgage Revenue Bonds
For GAAP reporting purposes, consummation of the December 2007 Re-Securitization with Freddie Mac constituted a sale of the mortgage revenue bond investments, with the
exception of certain bonds for which our continuing involvement precluded sale treatment. The Company is presenting its operating results adjusted to reflect all mortgage
revenue bonds included in the December 2007 Re-Securitization as sold.
exception of certain bonds for which our continuing involvement precluded sale treatment. The Company is presenting its operating results adjusted to reflect all mortgage
revenue bonds included in the December 2007 Re-Securitization as sold.
ØThe balance sheet adjustments primarily relate to cash and deposits receivable which collateralize credit intermediation agreements,
outstandings under a senior credit facility with no recourse to Centerline, loss reserves for credit intermediation agreements, deferred
income, and fees payable for the restructuring of certain credit intermediation agreements.
income, and fees payable for the restructuring of certain credit intermediation agreements.
ØThe income statement adjustments primarily relate to fee income on credit intermediation agreements, provision for losses on credit
intermediation agreements, fee expense relating to certain restructured credit intermediation agreements and equity income on the
investment in Credit Risk Product subsidiaries.
intermediation agreements, fee expense relating to certain restructured credit intermediation agreements and equity income on the
investment in Credit Risk Product subsidiaries.
Centerline Equity Issuer Trust (“EIT”)
Centerline’s operating results include the income related to Series A-1 Freddie Mac Certificates, and expenses related to preferred shares issued by EIT, a special purpose
entity. Such preferred shares are secured by EIT’s assets, are non-recourse to Centerline and shares are fully defeased in principle and maturity by the Freddie Mac A-1
certificates. Accordingly, the Company is presenting its operating results adjusted to exclude the impact of EIT’s consolidation.
entity. Such preferred shares are secured by EIT’s assets, are non-recourse to Centerline and shares are fully defeased in principle and maturity by the Freddie Mac A-1
certificates. Accordingly, the Company is presenting its operating results adjusted to exclude the impact of EIT’s consolidation.
ØThe balance sheet adjustments primarily relate to the removal of the Freddie Mac A-1 certificates, redeemable and non-
redeemable preferred shares. The related investment in the Equity Issuer Trust subsidiary reflects equity pick-ups calculated on a
GAAP basis.
redeemable preferred shares. The related investment in the Equity Issuer Trust subsidiary reflects equity pick-ups calculated on a
GAAP basis.
ØThe income statement adjustments primarily relate to interest income on the Freddie Mac A-1 certificates and interest expense and
equity distributions related to preferred shareholders.
equity distributions related to preferred shareholders.
Credit Risk Products
In connection with the March 2010 Restructuring, a series of transactions were entered into whereby the Company’s and its Centerline Capital Group, Inc. subsidiary’s obligations
under back to back credit default swaps issued to two counterparties where assigned and assumed by certain isolated special purpose entities, relieving the Company’s assets
from exposure to potential contingent liabilities. While the credit default counterparties have significant consent rights with respect to key activities of the isolated special purpose
entities, the Company consolidates the isolated special purpose entities for GAAP purposes. The Company has adjusted its operating results to reflect such isolated special
purpose entities as if they were equity method investments.
under back to back credit default swaps issued to two counterparties where assigned and assumed by certain isolated special purpose entities, relieving the Company’s assets
from exposure to potential contingent liabilities. While the credit default counterparties have significant consent rights with respect to key activities of the isolated special purpose
entities, the Company consolidates the isolated special purpose entities for GAAP purposes. The Company has adjusted its operating results to reflect such isolated special
purpose entities as if they were equity method investments.
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glossary