iStar Inc. (STAR) Q4 2022 Results Conference Call February 21, 2023 10:00 AM ET Company Participants Pearse Hoffmann - Senior Vice President of Capital Market and Investor Relations Jay Sugarman - Chairman and Chief Executive Officer Marcos Alvarado - President and Chief Investment Officer Brett Asnas - Chief Financial Officer Conference Call Participants Stephen Laws - Raymond James Jade Rahmani - KBW Operator Good morning. And welcome to iStar's Fourth Quarter and Fiscal Year 2022 Earnings conference call ...

Financial Data and Key Metrics Changes - For Q3 2022, net income was $12.1 million or $0.14 per diluted common share, while adjusted earnings were $28.5 million or $0.33 per diluted common share [12] - The company ended the quarter with approximately $1.3 billion of unrestricted cash and a total asset value of $3.5 billion [13][14] - The significant decrease in common equity per share was attributed to the pullback in Safehold's market value, with adjusted common equity per share estimated at approximately $12.33 [15] Business Line Data and Key Metrics Changes - Safehold closed on $280 million in new ground leases during the quarter, contributing to a total of $284 million in new ground lease transactions [8][16] - The company recognized a significant gain of approximately $46 million from the sale of a ground lease in Washington DC [16] - iStar generated $105 million from asset sales, loan repayments, and ground lease sales during the quarter [23] Market Data and Key Metrics Changes - The current market environment is characterized by historic interest rate increases, leading to a slowdown in real estate transaction activity and limited capital availability [7][9] - Ground lease volumes are expected to reflect a slowing backdrop in Q4 due to these market conditions [9] Company Strategy and Development Direction - The company is focused on building a fully integrated pure play ground lease company and simplifying its balance sheet by monetizing non-core assets [6][7] - The merger with Safehold is expected to close by the end of Q1 or early Q2 2023, with a potential extension to September 30 if necessary [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of the ground lease business despite current market challenges [7] - The company is actively working to navigate the uncertain economic environment and is optimistic about future asset sales and the merger process [10][24] Other Important Information - The company extinguished $155 million of debt during Q3, including $93 million of convertible notes [23] - Moody's has recognized the benefits of the merger transaction, providing a positive outlook for the company [18] Q&A Session Summary Question: Update on asset sales and future expectations - Management indicated that approximately a dozen smaller operating assets are still to be sold, with some larger assets also in the pipeline, but timelines may slip due to market conditions [29][30] Question: Timeline for merger proxy filing - The merger proxy is expected to be filed soon, with a targeted closing by the end of Q1 or early Q2 2023, and an outside date of September 30 [32][33] Question: Strategy for retiring debt - Management discussed the approach to retiring debt, focusing on market conditions and the attractiveness of bonds, with plans to continue reducing the debt balance [34][37] Question: Thoughts on current liabilities and interest rates - Management acknowledged the attractiveness of current liabilities but emphasized the need for a comprehensive strategy that aligns with market conditions [40][41] Question: Office market outlook - Management expressed a selective approach to the office market, recognizing potential value disruption but remaining open to opportunities for the right assets [46] Question: Update on SpinCo and specific assets - Management provided updates on Asbury Park and Magnolia Green, indicating ongoing development and sales processes, while acknowledging potential slowdowns due to the current rate environment [55]

ıStar Q3 '22 Earnings Results (NYSE: STAR) Forward-Looking Statements and Other Matters 1 Statements in this presentation which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although iStar believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained. The ...

[Part I: Consolidated Financial Information](index=3&type=section&id=PART%20I%20Consolidated%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) iStar reported a net income of $663.3 million for the six months ended June 30, 2022, driven by discontinued operations and a major asset sale that significantly impacted the balance sheet and cash flows Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total assets** | **$3,610,620** | **$4,840,534** | | Cash and cash equivalents | $1,400,658 | $339,601 | | Real estate and other assets held for sale (discontinued ops) | $11,518 | $2,299,711 | | **Total liabilities** | **$1,979,756** | **$3,777,328** | | Debt obligations, net | $1,833,250 | $2,572,174 | | **Total equity** | **$1,630,864** | **$1,063,206** | Consolidated Statement of Operations Highlights (in thousands, except EPS) | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Total revenues | $80,016 | $114,238 | | Net loss from continuing operations | ($134,382) | ($51,227) | | Net income from discontinued operations | $797,688 | $47,800 | | **Net income (loss)** | **$663,306** | **($3,427)** | | **Net income (loss) allocable to common shareholders** | **$472,370** | **($19,948)** | | **Diluted EPS** | **$6.28** | **($0.27)** | - In March 2022, the company completed the sale of its net lease property portfolio for a gross price of approximately **$3.07 billion**, recognizing a gain of **$663.7 million**, and retained net cash proceeds of **$1.2 billion** after repaying debt and other expenses[38](index=38&type=chunk)[39](index=39&type=chunk) Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Category | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $27,381 | ($44,962) | | Net cash provided by investing activities | $2,625,122 | $183,978 | | Net cash used in financing activities | ($1,640,612) | ($81,101) | | **Change in cash and cash equivalents** | **$1,011,841** | **$57,804** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and events, including the strategic net lease portfolio sale, reclassified business segments, active debt management, and stock-based compensation plans tied to SAFE's stock performance - The company's business is organized into four reportable segments: Net Lease (now primarily SAFE and Ground Lease adjacent businesses), Real Estate Finance, Operating Properties, and Land and Development[28](index=28&type=chunk)[209](index=209&type=chunk) - The Net Lease Sale involved a portfolio of office, entertainment, and industrial properties for a gross price of **$3.07 billion**, with operations of these assets now classified as discontinued operations[38](index=38&type=chunk)[39](index=39&type=chunk)[44](index=44&type=chunk) - As of June 30, 2022, the company owned **40.1 million** shares of Safehold Inc. (SAFE), representing approximately **64.7%** of SAFE's outstanding common stock, accounted for using the equity method as a core strategic investment[90](index=90&type=chunk)[92](index=92&type=chunk) - In April 2022, the company exchanged **$194 million** of its 3.125% Convertible Notes for **13.75 million** shares of common stock and **$14 million** in cash, recognizing a **$118.1 million** loss on extinguishment of debt[144](index=144&type=chunk) - For the six months ended June 30, 2022, the company recorded a **$37.1 million** reduction of expense related to its liability-classified iPIP plans, primarily due to a decrease in the share price of SAFE common stock[182](index=182&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the corporate strategy to grow Ground Lease businesses and simplify the portfolio through asset sales, resulting in a concentrated Ground Lease portfolio, strengthened balance sheet, and strong liquidity - The company's stated corporate strategy is to grow its Ground Lease and Ground Lease adjacent businesses and simplify its portfolio through sales of other assets, as demonstrated by the Net Lease Sale[225](index=225&type=chunk) Portfolio Composition by Property/Collateral Type (June 30, 2022) | Property/Collateral Type | Total Book Value (in thousands) | % of Total | | :--- | :--- | :--- | | Ground Leases | $1,503,347 | 70.1% | | Land and Development | $222,391 | 10.4% | | Multifamily | $116,864 | 5.4% | | Hotel | $109,379 | 5.1% | | Other | $192,983 | 9.0% | | **Total** | **$2,144,964** | **100.0%** | - As of June 30, 2022, the company had **$1.4 billion** in unrestricted cash and **$350.0 million** of available borrowing capacity, positioning it to meet liquidity requirements for the foreseeable future[296](index=296&type=chunk) - General and administrative expenses saw a net recovery of **($5.2) million** in Q2 2022 compared to a **$30.4 million** expense in Q2 2021, primarily due to a **$35.5 million** decrease in performance-based compensation linked to SAFE's stock performance[263](index=263&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations, with a sensitivity analysis indicating that a 100 basis point increase would increase annual net income by $13.5 million, while a decrease would reduce it by $13.1 million - The primary market risk for the company is interest rate risk, which impacts the spread between interest-earning assets and interest-bearing liabilities[310](index=310&type=chunk) Interest Rate Sensitivity Analysis (as of June 30, 2022) | Change in Interest Rates | Estimated Change in Net Income (in thousands) | | :--- | :--- | | +100 Basis Points | $13,523 | | +50 Basis Points | $6,628 | | -50 Basis Points | ($6,529) | | -100 Basis Points | ($13,058) | [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period[318](index=318&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[319](index=319&type=chunk) [Part II: Other Information](index=59&type=section&id=PART%20II%20Other%20Information) [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation, none of which is expected to have a material adverse effect on its consolidated financial statements - The company is not a party to any pending legal proceeding that is expected to have a material adverse effect on its financial condition[323](index=323&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2021 Annual Report on Form 10-K were reported - No material changes from the risk factors previously disclosed in the 2021 Annual Report were reported[324](index=324&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase common stock during Q2 2022, retaining a remaining authorization to repurchase up to $50.0 million of its common stock - No shares of common stock were repurchased during Q2 2022. The company has a remaining authorization to repurchase up to **$50.0 million** of common stock[325](index=325&type=chunk) [Other Information](index=59&type=section&id=Item%205.%20Other%20Information) Subsequent to quarter-end, in July and August 2022, the company exchanged $47.9 million of convertible notes for 2.0 million shares of common stock and $24.3 million in cash - In July and August 2022, the company exchanged an additional **$47.9 million** of its 3.125% Convertible Notes for approximately **2.0 million** shares of common stock and **$24.3 million** in cash[328](index=328&type=chunk) [Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including Sarbanes-Oxley certifications and financial data in Inline XBRL format - The exhibits filed with the report include Sarbanes-Oxley certifications (Sections 302 and 906) and financial statements in Inline XBRL format[331](index=331&type=chunk)

iStar Inc. (STAR) Q2 2022 Earnings Conference Call August 4, 2022 10:00 AM ET Company Participants Jason Fooks - Senior Vice President of Investor Relations and Marketing Jay Sugarman - Chairman and Chief Executive Officer Marcos Alvarado - President and Chief Investment Officer Brett Asnas - Chief Financial Officer Conference Call Participants Jade Rahmani - KBW Operator Good morning, and welcome to iStar Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, today's conferenc ...

ıStar Q2 '22 Earnings Results (NYSE: STAR) Forward-Looking Statements and Other Matters 1 Statements in this presentation which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although iStar believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained. The ...

[PART I. CONSOLIDATED FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20CONSOLIDATED%20FINANCIAL%20INFORMATION) Presents iStar Inc.'s unaudited consolidated financial statements, highlighting significant net income growth from the Net Lease Sale and increased cash [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Details iStar Inc.'s unaudited consolidated financial statements, including balance sheets, income, equity, and cash flows, with key notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Presents iStar Inc.'s financial position, detailing assets, liabilities, and equity at specific points in time | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Total assets | $4,084,051 | $4,840,534 | | Real estate and other assets available and held for sale and classified as discontinued operations | $226,309 | $2,299,711 | | Cash and cash equivalents | $1,500,203 | $339,601 | | Total liabilities | $2,299,101 | $3,777,328 | | Total equity | $1,784,950 | $1,063,206 | - Total assets decreased by approximately **$756 million**, primarily due to the reclassification and sale of real estate and other assets held for sale[6](index=6&type=chunk) - Cash and cash equivalents increased significantly by over **$1.16 billion**, reflecting proceeds from the Net Lease Sale[6](index=6&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Summarizes iStar Inc.'s revenues, expenses, and net income over specific periods, highlighting operational performance | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Total revenues | $31,953 | $59,984 | | Total costs and expenses | $57,934 | $87,559 | | Earnings from equity method investments | $25,032 | $11,768 | | Net income from discontinued operations | $797,688 | $22,486 | | Net income | $795,800 | $7,989 | | Net income (loss) allocable to common shareholders | $610,855 | $(405) | | Basic and diluted EPS | $8.85 | $(0.01) | - Net income surged to **$795.8 million** in Q1 2022, primarily driven by a substantial net income from discontinued operations of **$797.7 million**[10](index=10&type=chunk) - Earnings from equity method investments more than doubled year-over-year, reaching **$25.03 million**[10](index=10&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Details iStar Inc.'s comprehensive income, including net income and other comprehensive income components, for specific periods | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Net income | $795,800 | $7,989 | | Other comprehensive income | $363 | $13,280 | | Comprehensive income attributable to iStar Inc. | $617,092 | $16,291 | - Comprehensive income attributable to iStar Inc. increased significantly to **$617.09 million** in Q1 2022, reflecting the strong net income performance[14](index=14&type=chunk) [Consolidated Statements of Changes in Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines changes in iStar Inc.'s total equity, including net income, dividends, and noncontrolling interests, over specific periods | Metric | As of March 31, 2022 (in thousands) | As of December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Total equity | $1,784,950 | $1,063,206 | | Net income | $795,800 | $7,989 | | Noncontrolling interests | $330,514 | $211,910 | | Common dividends declared | $(8,728) | $(8,236) | - Total equity increased by over **$721 million**, primarily due to the net income for the period and an increase in noncontrolling interests[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Presents iStar Inc.'s cash inflows and outflows from operating, investing, and financing activities for specific periods | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Cash flows used in operating activities | $(30,624) | $(3,795) | | Cash flows provided by investing activities | $2,417,867 | $137,635 | | Cash flows used in financing activities | $(1,229,992) | $(36,414) | | Changes in cash, cash equivalents and restricted cash | $1,157,254 | $97,315 | | Cash, cash equivalents and restricted cash at end of period | $1,551,250 | $247,881 | - Investing activities generated a substantial cash inflow of **$2.42 billion** in Q1 2022, primarily from the Net Lease Sale[23](index=23&type=chunk) - Financing activities resulted in a significant cash outflow of **$1.23 billion**, mainly due to debt repayments and repurchases[23](index=23&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations and additional information supporting the consolidated financial statements [Note 1—Business and Organization](index=9&type=section&id=Note%201—Business%20and%20Organization) Describes iStar Inc.'s business model, organizational structure, and primary reportable segments - iStar Inc. operates as a real estate investment trust (REIT), focusing on financing, investing in, and developing real estate and related projects[28](index=28&type=chunk) - The company's primary reportable business segments are net lease, real estate finance, operating properties, and land and development, with a focus on ground lease investments[28](index=28&type=chunk) [Note 2—Basis of Presentation and Principles of Consolidation](index=9&type=section&id=Note%202—Basis%20of%20Presentation%20and%20Principles%20of%20Consolidation) Explains the basis of financial statement preparation, accounting principles, and consolidation policies, including Variable Interest Entities - The financial statements are unaudited and prepared in conformity with Form 10-Q and GAAP, requiring management estimates and assumptions[30](index=30&type=chunk)[31](index=31&type=chunk) - The company consolidates Variable Interest Entities (VIEs) for which it is the primary beneficiary, with VIE liabilities being non-recourse to the company[33](index=33&type=chunk)[34](index=34&type=chunk) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Total assets of consolidated VIEs | $983,026 | $1,171,081 | | Total liabilities of consolidated VIEs | $28,529 | $518,483 | [Note 3—Summary of Significant Accounting Policies: Net Lease Sale and Discontinued Operations](index=10&type=section&id=Note%203—Summary%20of%20Significant%20Accounting%20Policies:%20Net%20Lease%20Sale%20and%20Discontinued%20Operations) Details the accounting treatment for the Net Lease Sale and its impact on discontinued operations, including recognized gains and cash proceeds - In March 2022, the company completed the Net Lease Sale, disposing of a net lease property portfolio for approximately **$3.07 billion**, recognizing a gain of **$663.7 million**[38](index=38&type=chunk) - The Net Lease Sale generated **$1.2 billion** in net cash proceeds after debt repayment and other expenses, aligning with the company's strategy to grow Ground Lease businesses[38](index=38&type=chunk)[39](index=39&type=chunk) | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Net income from discontinued operations | $797,688 | $22,486 | | Cash flows provided by operating activities from discontinued operations | $22,571 | $20,847 | | Cash flows provided by investing activities from discontinued operations | $2,553,349 | $566 | [Note 4—Real Estate](index=14&type=section&id=Note%204—Real%20Estate) Provides details on the company's real estate assets, including net real estate and real estate held for sale | Metric | As of March 31, 2022 (in thousands) | As of December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Real estate, net | $91,434 | $92,150 | | Real estate available and held for sale | $301 | $301 | | Total real estate | $91,735 | $92,451 | - Future minimum operating lease payments to be collected for the remaining nine months of 2022 are **$4.84 million**[58](index=58&type=chunk) [Note 5—Net Investment in Leases](index=14&type=section&id=Note%205—Net%20Investment%20in%20Leases) Details the company's net investment in leases, including sales of Ground Leases to an investment fund | Metric | As of March 31, 2022 (in thousands) | As of December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Net investment in leases | $28,131 | $43,215 | | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Provision for (recovery of) losses on net investment in leases | $281 | $(1,601) | - The company sold Ground Leases to an investment fund (Ground Lease Plus Fund) in which it holds a **53%** noncontrolling interest[61](index=61&type=chunk)[62](index=62&type=chunk) [Note 6—Land and Development](index=16&type=section&id=Note%206—Land%20and%20Development) Presents information on the company's land and development portfolio, including revenue and cost of sales | Metric | As of March 31, 2022 (in thousands) | As of December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Total land and development, net | $277,421 | $286,810 | | Land development revenue (Q1) | $14,900 | $32,249 | | Land development cost of sales (Q1) | $14,496 | $29,323 | - Land development revenue and cost of sales both decreased significantly in Q1 2022 compared to Q1 2021[70](index=70&type=chunk) [Note 7—Loans Receivable and Other Lending Investments, net](index=17&type=section&id=Note%207—Loans%20Receivable%20and%20Other%20Lending%20Investments,%20net) Details the company's loans receivable and other lending investments, including allowance for loan losses and non-accrual loans | Metric | As of March 31, 2022 (in thousands) | As of December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Total loans receivable and other lending investments, net | $331,839 | $332,844 | | Allowance for loan losses | $4,932 | $4,769 | | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Provision for (recovery of) loan losses | $163 | $(3,960) | - The company had one non-accrual impaired loan with a carrying value of **$59.64 million** as of March 31, 2022[84](index=84&type=chunk) [Note 8—Other Investments](index=21&type=section&id=Note%208—Other%20Investments) Provides information on other investments, including the investment in Safehold Inc. (SAFE) and the Ground Lease Plus Fund | Metric | As of March 31, 2022 (in thousands) | As of December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Total other investments | $1,526,019 | $1,297,281 | | Investment in Safehold Inc. ("SAFE") | $1,388,657 | $1,168,532 | | Ground Lease Plus Fund | $64,548 | $17,630 | | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Earnings from equity method investments | $25,032 | $11,768 | | Management fees from SAFE | $4,500 | $3,500 | - iStar Inc. owned approximately **64.7%** of SAFE's common stock outstanding as of March 31, 2022, and acts as SAFE's external manager[92](index=92&type=chunk)[96](index=96&type=chunk) [Note 9—Other Assets and Other Liabilities](index=25&type=section&id=Note%209—Other%20Assets%20and%20Other%20Liabilities) Details deferred expenses, other assets, accounts payable, accrued expenses, and other liabilities | Metric | As of March 31, 2022 (in thousands) | As of December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Deferred expenses and other assets, net | $97,682 | $100,434 | | Accounts payable, accrued expenses and other liabilities | $198,886 | $236,732 | | Accrued expenses | $115,461 | $151,810 | - Accounts payable, accrued expenses, and other liabilities decreased by approximately **$37.8 million**, primarily due to a reduction in accrued expenses[130](index=130&type=chunk) [Note 10—Debt Obligations, net](index=26&type=section&id=Note%2010—Debt%20Obligations,%20net) Presents details on the company's debt obligations, including senior term loans and unsecured notes, and changes due to repayments | Metric | As of March 31, 2022 (in thousands) | As of December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Total debt obligations, net | $2,084,252 | $2,572,174 | | Senior Term Loan | $0 | $491,875 | | Unsecured notes | $2,012,500 | $2,012,500 | - Total debt obligations, net, decreased by approximately **$487.9 million**, primarily due to the full repayment of the **$650 million** Senior Term Loan in March 2022 using Net Lease Sale proceeds[131](index=131&type=chunk)[138](index=138&type=chunk) - The company incurred a **$1.4 million** loss on early extinguishment of debt related to the Senior Term Loan repayment[138](index=138&type=chunk) [Note 11—Commitments and Contingencies](index=28&type=section&id=Note%2011—Commitments%20and%20Contingencies) Outlines the company's unfunded commitments, operating lease obligations, and potential impacts from legal proceedings | Commitment Type | Total (in thousands) | | :-------------------------------------------------------------------------------- | :------------------- | | Performance-Based Commitments | $120,996 | | Strategic Investments | $7,386 | | **Total unfunded commitments** | **$128,382** | - Future minimum operating lease obligations (undiscounted cash flows) total **$23.87 million**[149](index=149&type=chunk) - The company does not expect any pending legal proceedings to have a material adverse effect on its consolidated financial statements[150](index=150&type=chunk) [Note 12—Derivatives](index=29&type=section&id=Note%2012—Derivatives) Describes the company's use of derivative instruments, such as interest rate swaps and caps, for risk management purposes | Metric | As of March 31, 2022 (in thousands) | As of December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Derivative Liabilities (Designated in Hedging Relationships) | $0 | $8,395 | - The company uses interest rate swaps and caps to minimize interest rate risks, not for speculative purposes[151](index=151&type=chunk) - Approximately **$2.6 million** related to cash flow hedges held by SAFE is expected to be reclassified from accumulated other comprehensive income (loss) to earnings from equity method investments over the next 12 months[154](index=154&type=chunk) [Note 13—Equity](index=31&type=section&id=Note%2013—Equity) Details the company's equity structure, including preferred stock, common stock dividends, and stock repurchase authorizations | Preferred Stock Series | Shares Issued and Outstanding (in thousands) | Carrying Value (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------- | :---------------------------- | | D | 4,000 | $89,041 | | G | 3,200 | $72,664 | | I | 5,000 | $120,785 | | **Total** | **12,200** | **$282,490** | - Common stock dividends of **$8.7 million** (**$0.125** per share) were declared for Q1 2022[161](index=161&type=chunk) - The Board of Directors authorized an increase to the stock repurchase program to **$50.0 million**, with **$50.0 million** remaining authorization as of March 31, 2022[162](index=162&type=chunk) [Note 14—Stock-Based Compensation Plans and Employee Benefits](index=32&type=section&id=Note%2014—Stock-Based%20Compensation%20Plans%20and%20Employee%20Benefits) Explains the company's stock-based compensation plans and employee benefits, including related income and accrued costs | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Stock-based compensation (income) expense | $(12,427) | $5,508 | - The company recorded a **$12.4 million** stock-based compensation income in Q1 2022, a significant decrease from a **$5.5 million** expense in Q1 2021, primarily due to a **$19.3 million** decrease in performance-based compensation[166](index=166&type=chunk)[249](index=249&type=chunk) - Accrued compensation costs relating to iPIP plans were **$102.4 million** as of March 31, 2022[178](index=178&type=chunk) [Note 15—Earnings Per Share](index=34&type=section&id=Note%2015—Earnings%20Per%20Share) Presents the calculation of basic and diluted earnings per share, including net income allocable to common shareholders | Metric | For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | | :-------------------------------------------------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net income (loss) allocable to common shareholders | $610,855 | $(405) | | Basic and diluted earnings per common share | $8.85 | $(0.01) | | Weighted average common shares outstanding | 69,037 | 73,901 | - Basic and diluted EPS increased substantially to **$8.85** in Q1 2022, primarily due to the net income from discontinued operations[188](index=188&type=chunk) [Note 16—Fair Values](index=35&type=section&id=Note%2016—Fair%20Values) Provides fair value disclosures for financial instruments, including debt obligations and available-for-sale securities | Metric | Carrying Value (in millions) | Fair Value (in millions) | | :-------------------------------------------------------------------------------- | :--------------------------- | :----------------------- | | Total debt obligations, net (Mar 31, 2022) | $2,084 | $2,329 | | Available-for-sale securities (Mar 31, 2022) | $24,864 (in thousands) | $24,864 (in thousands) | - The fair value of the company's 3.125% Senior Convertible Notes was **$497.5 million** as of March 31, 2022[198](index=198&type=chunk) [Note 17—Segment Reporting](index=37&type=section&id=Note%2017—Segment%20Reporting) Details financial information by reportable segment, including Net Lease, Real Estate Finance, Operating Properties, and Land and Development - The company operates in four reportable segments: Net Lease, Real Estate Finance, Operating Properties, and Land and Development[199](index=199&type=chunk) - Following the Net Lease Sale, the Net Lease segment primarily includes investments in SAFE and Ground Lease adjacent businesses[199](index=199&type=chunk) | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Segment profit (loss) | $(11,111) | $(10,671) | | Total portfolio assets (Mar 31, 2022) | $2,481,454 | $4,395,527 (Dec 31, 2021) | [Note 18—Subsequent Events](index=39&type=section&id=Note%2018—Subsequent%20Events) Reports significant events occurring after the balance sheet date, such as the exchange of convertible notes - On April 8, 2022, the company exchanged **$194 million** principal amount of 3.125% Convertible Notes for **13.75 million** common shares and **$14 million** in cash, retiring the notes[207](index=207&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on financial condition and operational results, focusing on strategic shifts, Net Lease Sale impact, and liquidity [Executive Overview](index=40&type=section&id=Executive%20Overview) Summarizes the company's corporate strategy, emphasizing growth in Ground Lease businesses and portfolio simplification through asset sales - The company's corporate strategy focuses on growing its Ground Lease and Ground Lease adjacent businesses and simplifying its portfolio through asset sales[212](index=212&type=chunk) - The Net Lease Sale in March 2022 for **$3.07 billion** generated **$1.2 billion** in net cash proceeds, significantly advancing the strategic shift[212](index=212&type=chunk)[213](index=213&type=chunk) [Portfolio Overview](index=41&type=section&id=Portfolio%20Overview) Presents a breakdown of the company's investment portfolio by property type and geographic diversification | Property/Collateral Types | Total (in thousands) | % of Total | | :------------------------ | :------------------- | :--------- | | Ground Leases | $1,481,337 | 65.7 % | | Land and Development | $234,798 | 10.4 % | | Hotel | $176,074 | 7.8 % | | Multifamily | $110,988 | 4.9 % | | Retail | $83,747 | 3.7 % | | Condominium | $57,473 | 2.5 % | | Office | $46,583 | 2.1 % | | Entertainment / Leisure | $14,534 | 0.6 % | | Other Property Types | $49,610 | 2.2 % | | **Total** | **$2,255,144** | **100.0 %**| - As of March 31, 2022, Ground Leases represent the largest portion of the investment portfolio by book value at **65.7%**[215](index=215&type=chunk) - The portfolio is geographically diversified, with the Northeast region accounting for **40.3%** of total investments[215](index=215&type=chunk) [Net Lease](index=41&type=section&id=Net%20Lease) Describes the net lease segment's composition after the Net Lease Sale, focusing on equity method investments in SAFE and Ground Lease Plus Fund - After the Net Lease Sale, the net lease segment primarily comprises equity method investments in SAFE and the Ground Lease Plus Fund, focusing on Ground Lease investments[217](index=217&type=chunk)[219](index=219&type=chunk) | Category | Wholly Owned | SAFE | Ground Lease Plus Fund | | :-------------------------- | :----------- | :----- | :--------------------- | | Ownership % | 100.0 % | 64.7 % | 53.0 % | | Book value (millions) | $28 | $1,389 | $65 | | % Leased | 100.0 % | 100.0 % | 100.0 % | | Weighted average lease term (years) | 98.9 | 90.9 | 105.0 | | Weighted average yield | 5.2 % | 4.9 % | 5.7 % | - SAFE's Ground Leases offer attractive long-term risk-adjusted returns with built-in growth from contractual rent escalators and the right to regain possession of improvements[222](index=222&type=chunk) [Real Estate Finance](index=42&type=section&id=Real%20Estate%20Finance) Details the real estate finance business, including various financing solutions, loan portfolio metrics, and allowance for loan losses - The real estate finance business offers diverse financing solutions, including leasehold loans, senior and subordinated mortgages, and corporate/partnership loans[225](index=225&type=chunk) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------- | :------------------------------ | | Total loans and other lending investments, net | $331,839 | $332,844 | | Allowance for loan losses | $4,932 | $4,769 | | Non-performing loans (number) | 1 | 1 | | Non-performing loans (net book value) | $59,051 | $59,064 | | Performing loans weighted average LTV (Mar 31, 2022) | 61% | 60% | | Performing loans yield - year to date (Mar 31, 2022) | 7.1% | 7.5% | - The allowance for loan losses increased slightly to **$4.9 million**, or **1.5%** of total loans, primarily due to accretion on a held-to-maturity security[230](index=230&type=chunk)[234](index=234&type=chunk) [Operating Properties](index=44&type=section&id=Operating%20Properties) Provides an overview of the operating properties portfolio, including its book value and property types - The operating properties portfolio, comprising hotel, multifamily, retail, condominium, and entertainment/leisure properties, had a book value of **$135.0 million** as of March 31, 2022[235](index=235&type=chunk) [Land and Development](index=44&type=section&id=Land%20and%20Development) Summarizes the land and development portfolio's balance, asset sales, and capital expenditures | Metric | March 31, 2022 (in millions) | December 31, 2021 (in millions) | | :-------------------------------------------------------------------------------- | :--------------------------- | :------------------------------ | | Ending balance | $277.4 | $286.8 | | Asset sales | $(13.6) | N/A | | Capital expenditures | $4.9 | N/A | - The land and development portfolio decreased to **$277.4 million**, primarily due to asset sales of **$13.6 million**, partially offset by **$4.9 million** in capital expenditures[237](index=237&type=chunk) [Results of Operations for the Three Months Ended March 31, 2022 compared to the Three Months Ended March 31, 2021](index=45&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031,%202022%20compared%20to%20the%20Three%20Months%20Ended%20March%2031,%202021) Compares key financial results for the three months ended March 31, 2022, and 2021, highlighting changes in net income and expenses | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | :-------------------- | | Net income | $795,800 | $7,989 | $787,811 | | Net income from discontinued operations | $797,688 | $22,486 | $775,202 | | Total revenue (continuing operations) | $31,953 | $59,984 | $(28,031) | | General and administrative expenses | $1,375 | $21,439 | $(20,064) | | Earnings from equity method investments | $25,032 | $11,768 | $13,264 | | Loss on early extinguishment of debt, net | $(1,428) | $0 | $(1,428) | - Net income significantly increased by **$787.8 million**, primarily due to a **$775.2 million** increase in net income from discontinued operations related to the Net Lease Sale[239](index=239&type=chunk) - General and administrative expenses decreased by **$20.06 million**, mainly due to a **$19.3 million** decrease in performance-based compensation[239](index=239&type=chunk)[249](index=249&type=chunk) [Adjusted Earnings](index=47&type=section&id=Adjusted%20Earnings) Presents adjusted earnings, a non-GAAP metric, reflecting the company's operational performance and strategic execution | Metric | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Adjusted earnings allocable to common shareholders | $607,539 | $22,732 | - Adjusted earnings, a non-GAAP metric, increased substantially to **$607.5 million** in Q1 2022, reflecting the company's strategic execution and operational performance[258](index=258&type=chunk)[261](index=261&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's liquidity position, including cash proceeds from asset sales, available borrowing capacity, and unfunded commitments - The company received approximately **$1.2 billion** in net proceeds from the Net Lease Sale in Q1 2022[262](index=262&type=chunk) - Unrestricted cash stood at **$1.5 billion** as of March 31, 2022, with **$350 million** of borrowing capacity available under the Revolving Credit Facility[264](index=264&type=chunk) | Cash Flow Activity | For the Three Months Ended March 31, 2022 (in thousands) | For the Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Cash flows used in operating activities | $(30,624) | $(3,795) | | Cash flows provided by investing activities | $2,417,867 | $137,635 | | Cash flows used in financing activities | $(1,229,992) | $(36,414) | - Total unfunded commitments were **$128.4 million** as of March 31, 2022, with **$50.0 million** remaining authorization under the stock repurchase program[274](index=274&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses the company's market risk exposure, primarily interest rate risk, and its impact on net income, noting REIT hedging limitations - The primary market risk exposure for the company is interest rate risk, impacting the spread between its floating rate assets and liabilities[278](index=278&type=chunk) | Change in Interest Rates | Estimated Change In Net Income (in thousands) | | :----------------------- | :------------------------------------------ | | -10 Basis Points | $(1,451) | | Base Interest Rate | $0 | | +10 Basis Points | $1,451 | | +50 Basis Points | $7,256 | | +100 Basis Points | $14,512 | - REIT income test purposes limit the company's ability to hedge asset-related risks, such as credit and interest rate exposure on loan assets[281](index=281&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures as of March 31, 2022, with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were evaluated and concluded to be effective as of March 31, 2022[286](index=286&type=chunk) - No material changes in the company's internal control over financial reporting occurred during the last fiscal quarter[287](index=287&type=chunk) [PART II. OTHER INFORMATION](index=53&type=section&id=PART%20II.%20OTHER%20INFORMATION) Presents additional information not covered in the consolidated financial statements, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) Details routine litigation matters, with no anticipated material adverse effect on consolidated financial statements - The company is not a party to any pending legal proceeding that would have a material adverse effect on its consolidated financial statements[291](index=291&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) Confirms no material changes to risk factors previously disclosed in the 2021 Annual Report - No material changes from the risk factors previously disclosed in the 2021 Annual Report[292](index=292&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no common stock repurchases in Q1 2022, with $50.0 million remaining authorization under the repurchase program - The company did not purchase any shares of its common stock during the three months ended March 31, 2022[293](index=293&type=chunk) - As of March 31, 2022, the company had remaining authorization to repurchase up to **$50.0 million** of common stock[293](index=293&type=chunk) [Item 3. Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms no reported defaults upon senior securities for the period - No defaults upon senior securities were reported[294](index=294&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that this item is not applicable to the company - Not applicable[295](index=295&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) Indicates no other information was reported for the period - No other information was reported[296](index=296&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including Sarbanes-Oxley certifications and Inline XBRL financial information - Includes Certifications pursuant to Section 302 and 906 of the Sarbanes-Oxley Act[299](index=299&type=chunk) - Financial information from the Quarterly Report is formatted in Inline XBRL[299](index=299&type=chunk) [SIGNATURES](index=55&type=section&id=SIGNATURES) Lists the key executives who signed the financial report, affirming its accuracy and completeness - The report is signed by Jay Sugarman (Chairman of the Board and Chief Executive Officer), Brett Asnas (Chief Financial Officer), and Garett Rosenblum (Chief Accounting Officer)[302](index=302&type=chunk)[303](index=303&type=chunk)

Financial Performance - iStar reported net income allocable to common shareholders of $610.9 million in Q1 2022, compared to a loss of $0.4 million in Q1 2021[19] - Adjusted earnings allocable to common shareholders were $607.5 million in Q1 2022, compared to $22.7 million in Q1 2021[19] - The company completed the sale of net lease assets for a gross sales price of $3.07 billion, resulting in net cash proceeds of approximately $1.2 billion[12, 22] Safehold (SAFE) Investment - iStar's investment in Safehold had a market value of $1.725 billion as of April 29, 2022, based on 40.1 million shares at a price of $43.05 per share[24, 27, 80] - Safehold's new originations in Q1 2022 amounted to $677 million[15] - Safehold experienced an increase in Unlevered Contractual Ground Rent (UCA) of $1.3 billion[16] Balance Sheet and Capital Structure - iStar extinguished $1.2 billion in consolidated debt during the quarter[17] - Subsequent to the quarter's end, iStar completed a convertible note exchange, exchanging $194 million of convertible notes for 13.75 million newly issued shares and $14 million in cash[18] - The company's pro forma common equity per share, as adjusted, was $17.75[25, 29] Asset Allocation - Ground Lease Ecosystem (including SAFE) constitutes $1.822 billion of total assets (excluding cash)[25] - Non-core assets totaled $825 million[25]

iStar Inc. (STAR) Q1 2022 Earnings Conference Call May 4, 2022 10:00 AM ET Company Participants Jay Sugarman – Chairman & Chief Executive Officer Marcos Alvarado – President & Chief Investment Officer Brett Asnas – Chief Financial Officer Jason Fooks – Senior Vice President of Investor Relations & Marketing Conference Call Participants Stephen Laws – Raymond James Jade Rahmani – Keefe, Bruyette & Woods Matthew Howlett – B. Riley Securities Operator Good morning, and welcome to iStar's First Quarter 2022 Ear ...

Q4 '21 & FY '21 Earnings Results (NYSE: STAR) Forward-Looking Statements and Other Matters 1 Statements in this presentation which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although iStar believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained. ...