Claros Mortgage Trust(CMTG) - 2022 Q4 - Annual Report

PART I Business Claros Mortgage Trust, Inc. (CMTG) is a commercial real estate (CRE) finance company focused on originating senior and subordinate loans for transitional CRE assets in major U.S. markets. Organized as a REIT and externally managed by an affiliate of Mack Real Estate Group (MREG), the company aims to generate attractive risk-adjusted returns primarily through dividends. As of December 31, 2022, CMTG managed a $7.4 billion loan portfolio. The company employs a diverse financing strategy, utilizing repurchase facilities, term loans, and other structures to fund its operations, maintaining a total leverage ratio of 2.6x at year-end - The company is a CRE finance company structured as a REIT, primarily originating senior and subordinate loans on transitional CRE assets in major U.S. markets[36][353] - CMTG is externally managed and advised by Claros REIT Management LP, an affiliate of Mack Real Estate Credit Strategies, L.P. (MRECS), leveraging the broader MREG platform's real estate expertise[9][10] Loan Portfolio Summary (as of December 31, 2022) | Metric | Value | | :--- | :--- | | Number of Loans | 77 | | Loan Commitment | $9.43 billion | | Carrying Value | $7.43 billion | | Weighted Average Yield to Maturity | 8.6% | | Average Term to Fully Extended Maturity | 3.2 years | | Weighted Average LTV | 68.2% | - The company utilizes a diverse financing strategy including repurchase facilities, asset-specific structures, and a secured term loan. As of year-end 2022, it had $6.0 billion in capacity under its repurchase and term participation facilities, with $4.2 billion drawn[22][23] - As of December 31, 2022, the company's net debt-to-equity ratio was 2.2x and its total leverage ratio was 2.6x[67] Risk Factors The company faces a wide range of risks categorized into several key areas. Investment risks include the higher potential for loss associated with transitional properties, adverse economic conditions like rising interest rates, portfolio concentration, and asset illiquidity. Financing risks stem from significant debt levels, restrictive covenants, reliance on repurchase facilities, and the planned discontinuation of LIBOR. The company is also exposed to operational risks such as cybersecurity threats and regulatory changes. Significant risks are associated with its external management structure, including reliance on key personnel, potential conflicts of interest, and costly management agreement termination fees. Furthermore, maintaining REIT status and exclusion from the 1940 Act imposes operational constraints and tax-related risks Risks Related to Our Investments The company's investment portfolio is subject to significant risks, primarily due to its focus on loans for transitional properties, which carry a greater risk of loss from cost overruns, non-completion, and failure to execute business plans. Difficult macroeconomic conditions, including rising interest rates and inflation, may impair borrowers' ability to repay loans. The portfolio is also exposed to concentration risk in specific markets, property types, and borrowers, with 23% of loans in the New York metro area and 41% in multi-family properties. Other key risks include the illiquidity of assets, challenges in construction lending, and the potential for losses on subordinated and mezzanine loans - Loans on transitional properties involve greater risk of loss than those on stabilized properties due to potential cost overruns, non-completion of renovations, and borrowers' potential inability to execute their business plans and refinance at maturity[55][72] - Difficult economic conditions, such as rising interest rates and inflation, could make it difficult for borrowers to meet repayment obligations, potentially leading to defaults and financial losses for the company[33][56][73] - The investment portfolio is concentrated in certain markets and property types. As of December 31, 2022, 23% of loans were in the New York metropolitan area, 41% were secured by multi-family properties, and 31% were construction loans[60][77] - The company's assets are relatively illiquid, which may make it difficult to dispose of them at advantageous times or prices, especially in the event of a default or turbulent market conditions[78][86] - As of December 31, 2022, 4 investments with a carrying value of $357.3 million, representing 4.8% of the portfolio, were on non-accrual status[61] - Investments in subordinated mortgage interests and mezzanine loans expose the company to a greater risk of loss, as these positions are junior to senior debt and can be completely wiped out by a partial loss in the underlying collateral's value[98][117] Risks Related to Sources of Financing and Hedging The company's financing and hedging strategies are subject to numerous risks. A significant amount of outstanding debt increases vulnerability to adverse economic conditions and may strain cash flow. Financing facilities impose restrictive financial covenants that limit operational flexibility. Reliance on repurchase agreements exposes the company to counterparty defaults, margin calls, and difficulty in securing replacement financing. The planned discontinuation of LIBOR and transition to alternative rates like SOFR could increase interest costs and create mismatches between assets and liabilities. Hedging strategies may be imperfect, costly, and expose the company to counterparty credit risk - The company has a significant amount of debt, which subjects it to risks such as insufficient cash flow for principal and interest payments, increased vulnerability to economic downturns, and potential loss of collateral[160][835] - Financing facilities contain restrictive covenants regarding financial ratios, liquidity, and dividend payments, which could impede investment activities and lead to default if breached[132][161] - Reliance on repurchase agreements creates risks of counterparty default, margin calls during market volatility, and the inability to secure continued or replacement financing on favorable terms[135] - The planned discontinuation of LIBOR after June 30, 2023, and the transition to alternative rates like SOFR may adversely affect interest income and expense, potentially increasing financing costs[142][172] - Hedging activities, while intended to mitigate risk, involve their own risks, including high costs, imperfect correlation with the hedged item, counterparty non-performance, and potential for material losses[169][171] Risks Related to Our Company The company is exposed to various corporate-level risks. Changes in laws and regulations, such as the Dodd-Frank Act, could increase competition or impose additional costs. Operational risks are significant, particularly the threat of cybersecurity attacks on the information systems of the company or its Manager, which could lead to data loss, business interruption, and reputational damage. Furthermore, the complexity of accounting rules for financial instruments requires significant judgment, and changes in interpretations could adversely impact financial reporting - Changes in laws or regulations governing financial operations, such as the Dodd-Frank Act, could increase competition from traditional banks or impose additional costs and changes to business practices[148][210] - The company faces significant operational risks, including cybersecurity threats to its and its Sponsor's information systems, which could result in data breaches, business disruption, and reputational harm[150][179][180] - Accounting rules for transactions like securitizations and loan loss reserves are highly complex and involve significant judgment. Changes in interpretations could impact the company's ability to prepare accurate and timely financial statements[181][213] Risks Related to Our Relationship with Our Manager and its Affiliates The company's external management structure creates specific risks. Its success is highly dependent on the Manager and its access to key personnel from the Sponsor. Potential conflicts of interest exist, as the Sponsor manages other investment vehicles that may compete for opportunities. The Manager's fee structure, which includes a base fee on equity and a performance-based incentive fee, may lead to riskier investments or decisions not perfectly aligned with stockholder interests. Additionally, terminating the Management Agreement would be costly, requiring a substantial termination fee - The company's success is heavily dependent on its external Manager and its access to the key personnel and expertise of its Sponsor, MRECS. The departure of key individuals could have a material adverse effect[214][857] - Potential conflicts of interest exist as the Sponsor and its affiliates manage other investment vehicles, which may compete with the company for investment opportunities or have differing financial incentives[184] - The Manager's fee structure, combining a base management fee on equity and an incentive fee on performance, may create incentives to increase equity (potentially diluting existing stockholders) or make riskier investments to maximize short-term income[186][218] - Terminating the Management Agreement is costly, requiring a termination fee equal to three times the sum of the average annual base management and incentive fees earned during the preceding 24-month period[187][219] Risks Related to Our Common Stock Investors in the company's common stock face risks related to dividend payments and market price volatility. The company has not established a minimum dividend level, and its ability to pay dividends depends on numerous factors, including operational performance and REIT requirements. The market price of the common stock could be harmed by the sale of substantial amounts of shares by existing stockholders, particularly given the registration of shares held by pre-IPO investors - The company has not set a minimum dividend payment level, and the ability to pay dividends is not guaranteed, as it depends on cash flows, financial condition, and REIT requirements[191][220] - The potential sale of a substantial number of common shares, including those held by pre-IPO stockholders under a resale registration statement, could adversely affect the prevailing market price[192][222] Risks Related to Our Organization and Structure The company's organizational structure presents several risks. To avoid being regulated as an investment company under the 1940 Act, the company must adhere to strict asset composition tests, which limits its operational flexibility and investment choices. Maryland corporate law and provisions in the company's charter, such as ownership limits (9.6%) and director removal procedures, could deter or prevent a change in control, even if it were beneficial to stockholders. These provisions are designed to protect the company's REIT status but may also serve as anti-takeover measures - The company must conduct its operations to avoid registration as an investment company under the 1940 Act, which imposes significant limits on its investment activities and capital structure[194][201][224] - The company's charter limits beneficial ownership of its common stock to 9.6% to preserve its REIT qualification. This provision may also have the effect of deterring a change in control[206][269] - Provisions in the company's charter and Maryland law make the removal of directors difficult and may delay or prevent takeover attempts, potentially limiting stockholders' ability to sell shares at a premium[268][271] U.S. Federal Income Tax Risks The company's operation as a REIT involves significant tax-related risks. The primary risk is the potential failure to maintain REIT qualification, which would result in the company being subject to corporate income tax, substantially reducing funds available for distribution. To comply with REIT requirements, the company must adhere to complex gross income and asset tests, which may force it to liquidate or forego otherwise attractive investments. The company must also distribute at least 90% of its REIT taxable income annually, which could necessitate raising capital in unfavorable market conditions - Failure to maintain qualification as a REIT would result in serious tax consequences, including being subject to U.S. federal corporate income tax, which would substantially reduce funds available for stockholder distributions[243][276] - Complying with REIT asset and income tests may force the company to liquidate, restructure, or forego otherwise attractive investments to avoid disqualification[245][277] - The requirement to distribute at least 90% of REIT taxable income annually may force the company to raise capital or dispose of assets at inopportune times to meet distribution requirements[253] - The tax on prohibited transactions (100%) limits the company's ability to engage in transactions treated as sales of property held as inventory, which could affect certain loan sale or securitization strategies[256] General Risks The company is subject to general business risks, including the significant resources and management attention required to comply with public company regulations under the Exchange Act and Sarbanes-Oxley. External events such as terrorist attacks or civil unrest could adversely affect the U.S. financial markets and the credit quality of the company's investments. The market price of the company's common stock is subject to significant volatility due to a wide range of factors, including operating results, market interest rates, and general economic conditions - The obligations of being a public company, including compliance with SEC and Sarbanes-Oxley Act requirements, demand significant resources and management attention[289][311] - The market price and liquidity of the company's common stock may be significantly affected by numerous factors, including operating performance, changes in interest rates, and general market volatility[261][263][291] - Future offerings of debt or equity securities that rank senior to the common stock could adversely affect the market price and dilute the value of existing common stock holdings[293][318] Unresolved Staff Comments The company reports that it has no unresolved staff comments from the SEC - None[319] Properties The company's corporate headquarters are located at 60 Columbus Circle, 20th Floor, New York, New York, which is leased by an affiliate of its manager. These facilities are considered adequate for business operations - The company's principal executive offices are located in New York, NY, in a space leased by an affiliate of the Manager[320] Legal Proceedings As of December 31, 2022, the company was not involved in any material legal proceedings. It may be involved in various claims and legal actions that arise in the ordinary course of business from time to time - As of December 31, 2022, the company was not involved in any material legal proceedings[321] Mine Safety Disclosures This item is not applicable to the company - Not applicable[323] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock began trading on the NYSE under the symbol "CMTG" on November 3, 2021. The company intends to pay regular quarterly dividends, with all distributions at the discretion of the Board. During 2022, the company declared a consistent quarterly dividend of $0.37 per share. A share repurchase plan was active, under which the full $25.0 million commitment was used to repurchase 1,679,570 shares at an average price of $14.88 per share between December 2021 and October 2022 - The company's common stock began trading on the NYSE under the symbol "CMTG" on November 3, 2021[348] Quarterly Dividends Declared Per Common Share | Year | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | 2022 | $0.37 | $0.37 | $0.37 | $0.37 | | 2021 | $0.37 | $0.37 | $0.37 | $0.37 | | 2020 | $0.43 | $0.44 | $0.37 | $0.37 | Issuer Purchases of Equity Securities (Dec 6, 2021 - Oct 24, 2022) | Metric | Value | | :--- | :--- | | Total Shares Purchased | 1,679,570 | | Average Price Paid per Share | $14.88 | | Total Value of Shares Purchased | ~$25.0 million | | Approx. Dollar Value Remaining | $0 | Reserved This item is reserved - Item 6 is reserved[331] Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion provides an analysis of the company's financial condition and results of operations. For FY 2022, net income per share was $0.79, while Distributable Earnings per share, a key non-GAAP metric, was $1.38. The loan portfolio grew to a carrying value of $7.4 billion, with a weighted average risk rating of 3.2. A significant $84.4 million provision for credit losses was recorded, driven by portfolio growth, worsening macroeconomic forecasts, and specific reserves on three loans. Total revenue increased 9% to $287.2 million, primarily from improved performance of real estate owned, but net income fell 34% to $112.1 million due to the credit loss provision. The company maintained adequate liquidity with $519.6 million in available sources and ended the year with a Net Debt-to-Equity ratio of 2.2x Key Financial Measures and Indicators This section outlines the primary metrics used to evaluate the business. For the year ended December 31, 2022, key indicators included net income of $0.79 per share, dividends of $1.48 per share, and Distributable Earnings of $1.38 per share. The company uses the non-GAAP measure "Distributable Earnings" to assess performance excluding certain non-cash items and one-time events, which management believes is a useful indicator of its ability to cover dividends. At year-end, book value per share was $17.48, and adjusted book value per share was $18.20 Key Financial Indicators (Year Ended Dec 31, 2022) | Indicator | Value | | :--- | :--- | | Net Income per Share | $0.79 | | Dividends Declared per Share | $1.48 | | Distributable Earnings per Share | $1.38 | | Book Value per Share | $17.48 | | Adjusted Book Value per Share | $18.20 | | Net Debt-to-Equity Ratio | 2.2x | | Total Leverage Ratio | 2.6x | Reconciliation of Net Income to Distributable Earnings (FY 2022 vs 2021) | ($ in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Net income attributable to common stock | $112,064 | $170,537 | | Provision for (reversal of) CECL reserve | $84,361 | ($8,962) | | Non-cash stock-based compensation | $7,457 | $8,812 | | Depreciation expense | $8,041 | $7,113 | | Unrealized gain on interest rate cap | ($6,042) | $0 | | Principal charge-offs | ($11,527) | ($1,761) | | Other adjustments | $0 | ($7,285) | | Distributable Earnings | $194,354 | $168,454 | Our Portfolio As of December 31, 2022, the company's portfolio consisted of 77 senior and subordinate loans with a total commitment of $9.4 billion and a carrying value of $7.4 billion. The portfolio's weighted average risk rating was 3.2 on a 5-point scale. During the year, the company recorded a net provision of $84.4 million for credit losses, increasing the total CECL reserve to $146.4 million, primarily due to portfolio growth, worsening macroeconomic forecasts, and specific reserves on three loans. The portfolio is financed through various facilities totaling $7.8 billion in capacity with $5.7 billion outstanding. 98% of the loans by principal balance are floating rate, resulting in a net floating rate exposure of $1.7 billion Portfolio Activity (Year Ended Dec 31, 2022) | ($ in thousands) | Amount | | :--- | :--- | | Unpaid principal balance, beginning | $6,602,804 | | Initial funding of loans | $2,030,456 | | Advances on loans | $696,338 | | Loan repayments | ($1,663,526) | | Principal charge-offs | ($11,527) | | Sale of loans receivable | ($116,020) | | Unpaid principal balance, end | $7,538,525 | - The weighted average risk rating of the total loan portfolio was 3.2 as of December 31, 2022, on a scale of 1 (least risk) to 5 (greatest risk)[367] - A net provision of $84.4 million for current expected credit losses (CECL) was recorded in 2022, increasing the total reserve to $146.4 million. This was driven by portfolio growth, worsening macroeconomic forecasts, and specific reserves of $65.5 million on three loans[346] Portfolio Financing Summary (as of Dec 31, 2022) | Financing Type | Capacity | Outstanding | | :--- | :--- | :--- | | Repurchase agreements & term participation | $5,971.2M | $4,224.4M | | Loan participations sold | $264.3M | $264.3M | | Notes payable | $495.9M | $154.6M | | Secured Term Loan | $755.1M | $755.1M | | Debt related to real estate owned | $290.0M | $290.0M | | Total | $7,776.4M | $5,688.4M | Operating Results For the year ended December 31, 2022, total revenue increased by $24.5 million (9%) to $287.2 million compared to 2021, driven by a $35.5 million increase in revenue from real estate owned. However, net interest income decreased by $10.9 million due to higher interest expenses. Total expenses rose by $21.4 million (20%), mainly from increased operating costs for real estate owned. The most significant factor impacting profitability was the $84.4 million provision for credit losses in 2022, a stark contrast to the $9.0 million reversal in 2021. Consequently, net income attributable to common stock decreased by 34% to $112.1 million, or $0.79 per share Comparison of Operating Results (Years Ended Dec 31) | ($ in thousands) | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $223,731 | $234,674 | (5%) | | Total Revenue | $287,201 | $262,658 | 9% | | Total Expenses | $129,797 | $108,375 | 20% | | (Provision for) Reversal of CECL | ($84,361) | $8,962 | (1041%) | | Net Income Attributable to Common Stock | $112,064 | $170,537 | (34%) | | Net Income per Share (Basic & Diluted) | $0.79 | $1.27 | (38%) | - The decrease in net income was primarily driven by a $93.3 million negative swing in the provision for credit losses, from an $8.9 million reversal in 2021 to an $84.4 million provision in 2022[383][439] Liquidity and Capital Resources The company's primary sources of liquidity are cash, loan repayments, and borrowings under its various financing facilities. As of December 31, 2022, total available liquidity was $519.6 million. The company's Net Debt-to-Equity ratio increased to 2.2x from 1.7x in the prior year, and its Total Leverage Ratio increased to 2.6x from 2.1x. Primary liquidity needs include funding $1.9 billion in unfunded loan commitments, servicing debt, and paying dividends. Cash flow from operations was $111.0 million, while investing activities used $773.3 million and financing activities provided $676.3 million Leverage Ratios (as of Dec 31) | Ratio | 2022 | 2021 | | :--- | :--- | :--- | | Net Debt-to-Equity Ratio | 2.2x | 1.7x | | Total Leverage Ratio | 2.6x | 2.1x | Sources of Liquidity (as of Dec 31, 2022) | ($ in thousands) | Amount | | :--- | :--- | | Cash and cash equivalents | $306,456 | | Approved and undrawn credit capacity | $213,113 | | Total sources of liquidity | $519,569 | - As of December 31, 2022, the company had $1.9 billion in aggregate unfunded loan commitments, which represent a primary future need for liquidity[445] Summary of Cash Flows (Year Ended Dec 31) | ($ in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Net cash from operating activities | $111,028 | $213,557 | | Net cash used in investing activities | ($773,302) | ($373,196) | | Net cash from financing activities | $676,297 | $62,801 | Critical Accounting Policies and Estimates This section highlights the accounting policies requiring the most significant judgment and estimates. The most critical estimate is the Current Expected Credit Loss (CECL) reserve, which involves forecasting potential credit losses based on historical data, current conditions, and macroeconomic forecasts using the WARM method for the general reserve. For impaired, collateral-dependent loans, a specific reserve is calculated based on the fair value of the underlying collateral. Another critical area is the accounting for real estate owned (REO), which is initially recorded at fair value upon foreclosure and subsequently evaluated for impairment based on estimated future undiscounted cash flows - The Current Expected Credit Loss (CECL) reserve is a critical accounting estimate, reflecting potential credit losses based on historical experience, current conditions, and macroeconomic forecasts[426][452] - The company uses the Weighted Average Remaining Maturity (WARM) method for its general CECL reserve, which requires significant judgment regarding historical loss data and economic forecasts[427][453] - For collateral-dependent loans where the borrower is in financial difficulty, a specific CECL reserve is measured based on the fair value of the collateral, which requires subjective assumptions about property values and market conditions[428] - Accounting for real estate owned (REO) is also critical, involving initial measurement at fair value upon foreclosure and subsequent quarterly impairment testing based on estimated future cash flows[455][457] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk, as 98% of its loans are floating rate. A sensitivity analysis shows that a 100 basis point increase in benchmark rates would increase net interest income by approximately $16.0 million annually. The company is actively managing the transition from LIBOR to alternative rates like SOFR. Other significant risks include credit risk, managed through rigorous underwriting and asset management; capital markets risk, related to the ability to raise capital; and financing risk, concerning the availability and cost of debt Interest Rate Sensitivity Analysis (Annual Impact) | Change in Benchmark Rates | Change in Net Interest Income ($ thousands) | Change in Net Interest Income per Share | | :--- | :--- | :--- | | +100 bps | $15,963 | $0.11 | | +50 bps | $7,982 | $0.06 | | -50 bps | ($7,982) | ($0.06) | | -100 bps | ($15,963) | ($0.11) | - The company is managing the transition from LIBOR, which will cease to be representative after June 30, 2023, to alternative reference rates like SOFR. This transition could impact interest costs and create mismatches between assets and liabilities[460][490] - Credit risk is managed through extensive due diligence prior to origination and proactive asset management post-closing, including monitoring collateral performance and borrower financial health[461][491] - The company faces financing risk, as weakness in capital markets could adversely affect lenders' willingness to provide financing, potentially increasing costs or reducing liquidity[471][500] Financial Statements and Supplementary Data This section contains the company's audited consolidated financial statements for the fiscal year ended December 31, 2022, and related notes. The balance sheet shows total assets of $8.24 billion and total liabilities of $5.79 billion. The statement of operations reports net income of $112.2 million. The notes provide detailed disclosures on significant accounting policies, the loan portfolio, debt obligations, equity, related party transactions, and other financial matters Consolidated Financial Statements The core financial statements present the company's financial position and performance. As of December 31, 2022, total assets were $8.24 billion, with loans receivable, net, comprising $7.36 billion. Total liabilities were $5.79 billion, primarily consisting of repurchase agreements and other secured financings. Total stockholders' equity was $2.46 billion. For the year, the company generated $470.7 million in interest income and incurred $261.1 million in total interest and related expense, resulting in a net income of $112.2 million Consolidated Balance Sheet Highlights (as of Dec 31, 2022) | ($ in thousands) | Amount | | :--- | :--- | | Loans receivable held-for-investment, net | $7,360,427 | | Total Assets | $8,241,513 | | Repurchase agreements | $3,966,859 | | Secured term loan, net | $736,853 | | Total Liabilities | $5,785,042 | | Total Stockholders' Equity | $2,456,471 | Consolidated Statement of Operations Highlights (Year Ended Dec 31, 2022) | ($ in thousands) | Amount | | :--- | :--- | | Interest and related income | $470,668 | | Interest and related expense | ($246,937) | | Provision for current expected credit loss reserve | ($84,361) | | Net Income | $112,155 | Notes to Consolidated Financial Statements The notes provide critical details supporting the financial statements. Note 3 details the $7.4 billion loan portfolio, showing a weighted average risk rating of 3.2 and a total CECL reserve of $146.4 million. Note 6 outlines the $5.7 billion in debt obligations, primarily from repurchase agreements and a secured term loan. Note 9 describes equity activity, including a quarterly dividend of $0.37 per share and a $25 million share repurchase program. Note 11 discloses related party transactions, showing $39.5 million in management fees paid to the Manager in 2022. Note 12 details stock-based compensation, with $7.5 million in expense recognized for the year - The loan portfolio's weighted average risk rating was 3.2, with 83% of the portfolio rated '3' (Medium Risk) and 4% rated '5' (Impaired/Loss Likely) by carrying value[610] - The total Current Expected Credit Loss (CECL) reserve was $146.4 million as of December 31, 2022, comprising a $60.3 million specific reserve and an $86.1 million general reserve[616] Management & Incentive Fees (Years Ended Dec 31) | ($ in thousands) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Management fees | $39,461 | $39,135 | $38,960 | | Incentive fees | $0 | $0 | $7,766 | | Total | $39,461 | $39,135 | $46,726 | - Stock-based compensation expense related to RSUs was $7.5 million, $8.8 million, and $5.7 million for the years ended December 31, 2022, 2021, and 2020, respectively[113] Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[737] Controls and Procedures Based on an evaluation as of December 31, 2022, the company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective. Management also concluded that the company's internal control over financial reporting was effective as of the same date. There were no material changes to internal controls during the fourth quarter of 2022 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[738] - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2022, based on the COSO framework[740] - There were no material changes in internal control over financial reporting during the fourth quarter of 2022[741][765] Other Information The company reports no other information for this item - Not applicable[766] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable[767] PART III Directors, Executive Officers and Corporate Governance The information required for this item, concerning directors, executive officers, and corporate governance, will be provided in the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders and is incorporated by reference - Information for this item is incorporated by reference from the company's definitive proxy statement to be filed with the SEC[769] Executive Compensation The information required for this item, concerning executive compensation, will be provided in the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders and is incorporated by reference - Information for this item is incorporated by reference from the company's definitive proxy statement to be filed with the SEC[770] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required for this item, concerning security ownership, will be provided in the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders and is incorporated by reference - Information for this item is incorporated by reference from the company's definitive proxy statement to be filed with the SEC[771] Certain Relationships and Related Transactions, and Director Independence The information required for this item, concerning related party transactions and director independence, will be provided in the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders and is incorporated by reference - Information for this item is incorporated by reference from the company's definitive proxy statement to be filed with the SEC[772] Principal Accounting Fees and Services The information required for this item, concerning principal accounting fees and services, will be provided in the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders and is incorporated by reference - Information for this item is incorporated by reference from the company's definitive proxy statement to be filed with the SEC[773] PART IV Exhibits, Financial Statement Schedules This section lists the exhibits and financial statement schedules filed as part of the Annual Report on Form 10-K. The list includes organizational documents, material contracts such as the Management Agreement and various financing agreements, and certifications required by the Sarbanes-Oxley Act - This item lists all exhibits filed with the Form 10-K, including organizational documents, material contracts, and required certifications[747][774] Form 10-K Summary This item is optional and was not included by the company in this report - None provided[95][753]