Filed Pursuant to Rule 424(b)(3)
Registration No. 333-128816
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 2, 2006 (March 2, 2006)
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JER Investors Trust Inc.
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(Exact Name of Registrant as Specified in Charter)
Maryland 001-32564 75-3152779
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
1650 Tysons Boulevard, Suite 1600, McLean, VA 22101
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (703) 714-8000
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On March 2, 2006, JER Investors Trust Inc. (the "Registrant")
announced its results of operations for the fourth quarter and year ended
December 31, 2005. A copy of the related press release is attached hereto as
Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release, dated March 2, 2006, issued by JER
Investors Trust Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JER Investors Trust Inc.
(Registrant)
Date: March 2, 2006 By: /s/ Daniel T. Ward
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Name: Daniel T. Ward
Title: Secretary
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release, dated March 2, 2006, issued by JER Investors
Trust Inc.
[JER INVESTORS TRUST GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE
THURSDAY, MARCH 2, 2006
JER INVESTORS TRUST INC. (NYSE: JRT) ANNOUNCES FOURTH
QUARTER AND FULL YEAR 2005 RESULTS
2005 Financial Highlights:
Fourth Quarter 2005 Activities:
o Completed $86.4 million in new investments
o Net income of $7.0 million, or $0.27 per diluted share, for the three
months ended December 31, 2005 on revenues of $12.8 million
o Declared fourth quarter dividend of $0.33 per share of common stock
o Completed first collateralized debt obligation offering issuing
$275.6 million in investment grade bonds
Full Year 2005 Activities:
o Completed nine new commercial mortgage backed securities investments
totaling $340.0 million and four new mezzanine loan investments
totaling $100.0 million
o In July 2005, completed initial public offering of common stock,
issuing 13.8 million primary shares at $17.75 per share generating
net proceeds of $226.4 million
o Net income of $19.6 million, or $1.08 per diluted share, for the year
ended December 31, 2005 on revenues of $36.4 million
o Total assets of $659.2 million at December 31, 2005 comprised of
$416.9 million in commercial mortgage backed securities, $81.7
million in real estate loans and $160.6 million in cash / other
assets
o Book value per common share outstanding increased to $14.82 at
December 31, 2005, compared with $13.41 at December 31, 2004
Summary of Results:
JER Investors Trust Inc. (the "Company") reported net income for the three
months ended December 31, 2005 of $7.0 million, or $0.27 per diluted share,
compared to net income for the three months ended December 31, 2004 of $0.1
million, or $0.01 per diluted share. The Company reported net income for the
year ended December 31, 2005 of $19.6 million, or $1.08 per diluted share,
compared to a net loss of $5.9 million, or ($0.62) per diluted share, for the
period from inception (April 19, 2004) through December 31, 2004.
Net income for the year ended December 31, 2005 prior to gain (loss) on sales
of assets was $20.4 million, or $1.12 per diluted share, compared to a net loss
prior to gain (loss) on sales of assets for the year ended December 31, 2004 of
$5.9 million, or ($0.62) per diluted share. Management believes that net income
prior to gain (loss) on sales of assets is useful to investors and meaningful
as a measure of performance as the Company, in general, does not intend to sell
or trade assets in the ordinary course of business and therefore will generally
not have gains (losses) from the sales of assets. For reconciliation of net
income prior to gain (loss) on sales of assets to net income, please refer to
the table following the presentation of the GAAP results.
During 2005, the Company declared total dividends of $1.18 per share to common
shareholders, including a cash dividend related to the fourth quarter 2005,
paid on January 27, 2006 of $0.33 per share to shareholders of record on
December 30, 2005. At December 31, 2005, our common equity book value per share
was $14.82 compared with $13.41 at December 31, 2004.
Investment Activities:
During the quarter ended December 31, 2005, the Company completed two new
investments in commercial mortgage backed securities (or "CMBS") totaling $83.0
million. During this same period, the Company also funded an additional $3.4
million toward a mezzanine loan program and received total repayments of $17.6
million related to outstanding principal balances on three mezzanine loan
investments.
For the full year 2005, the Company completed nine new CMBS investments
totaling $340.0 million and sold $90.7 million face amount of CMBS. In
addition, during the year, the Company completed four new mezzanine loan
investments totaling $100.0 million, had principal repayments of $34.9 million
and sold a $16.9 million interest in a B-Note investment. At December 31, 2005,
total assets were $659.2 million, total liabilities were $278.6 million and
stockholders' equity was $380.6 million. After year-end, in January 2006, the
Company received $14.1 million related to total outstanding principal of a
mezzanine loan investment.
Capital Market Activities:
In July 2005, the Company completed its initial public offering of 12 million
shares of its common stock at a price of $17.75 per share. In August 2005, the
underwriters exercised their option to purchase an additional 1,832,025 shares
from the Company at the public offering price less the underwriting discount to
cover over-allotments. The net proceeds to the Company of approximately $226
million were primarily used to repay a portion of outstanding indebtedness
under a warehouse facility.
In November 2005, the Company issued its first collateralized debt obligations
through two wholly-owned subsidiaries of the Company, JER CRE CDO 2005-1,
Limited and JER CRE CDO 2005-1, LLC (the "2005-1 CDO"). The 2005-1 CDO issued
privately placed notes totaling $275.6 million rated AAA through BBB-
("Investment Grade Bonds"). The Company retained a portion of the BBB- rated
notes, all of the non-investment grade rated notes and all of the preferred
shares. The 2005-1 CDO included a ramp facility that financed $48.6 million par
value of additional collateral securities. At issuance, the weighted average
cost of borrowing for the Investment Grade Bonds was approximately 83 basis
points (excluding fees and expenses) over applicable swaps or LIBOR rates.
Accounting Treatment for an Investment Acquired from and Financed with a
Repurchase Agreement from the Same Counterparty:
In preparing year-end results, the Company considered an interpretation of GAAP
relating to the treatment of transactions where investments acquired from a
particular counterparty are financed via a repurchase agreement with that same
counterparty or an affiliate thereof. The Company has identified one investment
in CMBS that was acquired in the second quarter ended June 30, 2005 from a
counterparty (such counterparty was part of a selling syndicate) that also
provided financing for some of the classes of the same CMBS investment at the
time of initial acquisition. While the Company continues to own most of this
CMBS investment, all debt outstanding under the initial repurchase agreement
provided by the counterparty was fully repaid during the third quarter ended
September 30, 2005. The Company and our auditors have concluded that the
treatment we have applied is an acceptable presentation of our 2005 results.
Future guidance may require the Company to adjust the accounting of the assets
in which the Company has invested.
Conference Call & Webcast:
Management will host an earnings conference call on Friday, March 3, 2006 at
10:00 A.M. eastern standard time. A copy of the earnings release will be posted
to the Investor Resources section of the JER Investors Trust Inc. website
provided below. All interested parties are welcome to participate on the live
call. You can access the conference call by dialing (866) 831-6272 (from within
the U.S.) or (617) 213-8859 (from outside of the U.S.) ten minutes prior to the
scheduled start of the call; please reference "JER Investors Trust".
A webcast of the conference call will be available to the public on a
listen-only basis at www.jer.com. A replay of the earnings call will be
available until March 24, 2006 by dialing (888) 286-8010 (from within the U.S.)
or (617) 801-6888 (from outside of the U.S.); please reference access code
"96678657".
About JER Investors Trust Inc.
JER Investors Trust Inc. is a New York Stock Exchange listed specialty finance
company that originates and acquires commercial real estate structured finance
products. The Company's target investments include commercial mortgage backed
securities, mezzanine loans and B-Note participations in mortgage loans,
commercial mortgage loans and net leased real estate investments. JER Investors
Trust Inc. is organized and conducts its operations so as to qualify as a real
estate investment trust (REIT) for federal income tax purposes. For more
information regarding JER Investors Trust Inc. and to be added to our e-mail
distribution list, please visit www.jer.com.
Forward-Looking Statements:
Certain items in this press release may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on management's current expectations and beliefs and
are subject to a number of trends and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. JER Investors Trust can give no assurance that its expectations
will be attained. Factors that could cause actual results to differ materially
from JER Investors Trust's expectations include, but are not limited to,
changes in the real estate and bond markets, our continued ability to source
new investments, and other risks detailed from time to time in JER Investors
Trust's SEC reports. Such forward-looking statements speak only as of the date
of this press release. JER Investors Trust expressly disclaims any obligation
to release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in JER Investors Trust's expectations
with regard thereto or change in events, conditions or circumstances on which
any statement is based.
CONTACTS:
Dave Sturtevant, ROI: (703) 813-5643, ext. 243
Tae-Sik Yoon, Chief Financial Officer, JER Investors Trust Inc.: (703) 714-8094
JER INVESTORS TRUST INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
As of December 31,
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2005 2004
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ASSETS
Cash and cash equivalents $ 151,814 $ 1,177
CMBS, at fair value 416,864 167,070
Real estate loans 81,696 29,865
Accrued interest receivable 4,011 1,269
Other assets 4,791 298
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Total Assets $ 659,176 $ 199,679
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Loans and Notes Payable $ 266,255 $ 39,200
Interest rate swap agreements, at fair value 646 234
Accounts payable and accrued expenses 486 855
Dividends payable 8,477 -
Due to affiliate 1,550 509
Other liabilities 1,192 92
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Total Liabilities 278,606 40,890
Stockholders' Equity:
Common stock, $0.01 par value, 100,000,000
shares authorized, 25,687,035 and 11,845,010
shares issued and outstanding, respectively 257 118
Additional paid-in capital 391,553 165,147
Cumulative dividends paid/declared (22,698) -
Cumulative earnings (losses) 13,661 (5,899)
Accumulated other comprehensive income/ (loss) (2,203) (577)
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Total Stockholders' Equity 380,570 158,789
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Total Liabilities and Stockholders' Equity $ 659,176 $ 199,679
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JER INVESTORS TRUST INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
For the period
For the three months ended For the twelve inception (April 19,
December 31, months ended 2004) through
----------------------------- December 31, December 31,
2005 2004 2005 2004
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REVENUES
Interest income from CMBS $ 8,315 $ 1,783 $ 23,979 $ 2,344
Interest income from real estate loans 3,459 245 11,286 245
Interest income from cash and cash equivalents 981 339 1,056 951
Other income - - 97 -
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Total Revenues 12,755 2,367 36,418 3,540
EXPENSES
Interest expense 2,619 - 5,926 -
Management fees 1,921 799 5,604 1,864
General and administrative (excluding
stock compensation) 1,165 1,474 4,355 2,438
Stock compensation 23 19 157 5,137
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Total Expenses 5,728 2,292 16,042 9,439
INCOME (LOSS) BEFORE ASSET SALES 7,027 75 20,376 (5,899)
Loss on sales of assets, net - - (821) -
Unrealized gain (loss) due to hedge
ineffectiveness (3) - 5 -
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NET INCOME (LOSS) $ 7,024 $ 75 $ 19,560 $ (5,899)
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Net earnings (loss) per share:
Basic $ 0.27 $ 0.01 $ 1.08 $ (0.62)
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Diluted $ 0.27 $ 0.01 $ 1.08 $ (0.62)
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Weighted average shares of common
stock outstanding:
Basic 25,682,035 11,672,510 18,123,087 9,511,915
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Diluted 25,683,313 11,673,760 18,124,365 9,511,915
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Dividends declared per common share $ 0.33 - $ 1.18 -
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JER INVESTORS TRUST INC. AND SUBSIDIARIES
Reconciliation of net income prior to gain (loss) on sales of assets to net income (unaudited)
(In thousands, except per share data)
For the period inception
For the twelve months (April 19, 2004) through
ended December 31, December 31,
2005 2004
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NET INCOME (LOSS):
GAAP presentation $ 19,560 $ (5,899)
Add back: Loss on sales of assets, net 821 -
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Non GAAP presentation $ 20,381 $ (5,899)
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NET INCOME (LOSS) per Diluted Share:
GAAP presentation $ 1.08 $ (0.62)
Add back: Loss on sales of assets, net 0.04 -
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Non GAAP presentation $ 1.12 $ (0.62)
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