CLNY - Earnings call transcript Q4 2017 | DigitalBridge Group, Inc.

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Operator

Greetings and welcome to Colony NorthStar Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Lasse Glassen, Addo Investor Relations. ahead. go Please

Lasse Glassen

Tangen, Officer; Redington, Richard Kevin Neale Traenkle, Financial and and Executive everyone line Chief Company’s us Colony Inc.’s Executive NorthStar, from Good year Accounting welcome XXXX Chief Chief also Chief quarter Officer; Chairman; to Barrack, Tom full Company With on questions. President Company’s the Investment earnings Officer. Darren fourth and and and the the the Officer, morning are is to Saltzman, conference today call. answer

differ XXXX Before Colony is forward-looking from over that I reports forward-looking financial on and them, on cause to with assumptions. are based the and to this the information statements and or risks no contains results undertakes uncertainties expectations upon Potential in These of from as could update the the not these today, presented this filed are and hand future duty Company’s circumstances. described call risks, and discussed that Company’s events please subject time-to-time. NorthStar X, All does management’s current business call periodic SEC intend note now certain statements. call to materially are to information statements March uncertainties

to and information morning financial are is In addition, was non-GAAP Company’s investors. available appropriate financial The useful believes financial why such consolidated the measure represents the call the and basis. GAAP explanation this of measures reported non-GAAP on in website certain presented both this measures segmented a and which reconciliations Company presents on earnings to released an Company’s release,

segment this on financial measures Tom Barrack, table a measure reconciliation prepared is to of website. NorthStar. reconciles turn Chairman over to by now, the call has would And Company’s non-GAAP Colony GAAP available Company I like the certain the addition, Executive In also the Tom? appropriate and to reportable that

Tom Barrack

morning Thanks, everybody. Lasse, good and

of franchise business never it be of Saltzman. that of operational better I have details news who soon. to assure with models, and been necessary the of environment and turning to results the am that I a better in my to the efforts disappointing you belief get line. calling personal of know company, Before merger, the shareholders and global presentation, the product with and perspective Those that, from of been it retrenched understand, the got never definition not efforts that in setting the will to leave of don’t total pride, my mantra personal wanted had you a had back morning, the to this of of on focused news one this investment more I’ll current The With large With forward in. unattended. is and are I've and or and personal understand still majority organization news we the finding my headline. and always me still future potential future the personally side the a on the if my Richard this you and business we a personal give been true model this first I it’s that's and bad tainted extraordinary of its confusing going do organization to the worth, the bad and base intend net the turn personally results, XXX% in my have fundamental it’s economic meat factor reputation intend we I week driven of and management and we had to that that level yield ourselves dominant has side family’s good over giving

Richard Saltzman

morning and good everyone. Tom, Thanks,

morning’s we this right where go XXXX postmortem, wrong, areas of will what the NorthStar we I’ll from So, went talk today, reduced terms the announcement what in how forward of go provide results merger our a underperforming high addressing review here. call level and our and and went of I also about on dividend. performance, provide are

results, we on target did debt achieving billion however, by million. of more was of approximately corporate So, monetizing which synergies of significant merger a $X platforms, business and million, of disappointing sheet, in our XXX and simplifying year XXXX $XXX exceeded transitioning $X balance our assets original G&A terms non-strategic overall; progress than our of billion and make mortgage refinancing

billion capital investments while raised of also XXXX, capital X party of across X.X the $X and the we billion the by Company of management during of beginning investment incremental implemented the deploying new new since significant Furthermore, very $X.X phase We lines NorthStar. Colony and third first initiatives. platforms, XXXX, all into managed billion by business billion two funds our strategic from of

book of credit at billion First, the value. REIT credit assets leading X.X with the estate, market creation equity corresponding X.X Colony NorthStar real scale of billion

starts In third Colony an approximately rate. balance position of sheet company growth cap in billion $X party prospects, equity a with addition plus billion robust permanent having NorthStar's of investment along to this X side

just front to of $X.X in digital towers. such we real our announced today invest cell data colony global and Second, infrastructure, a billion closing centers as estate first digital

in will fund. Partners, we company tower our of Tower American transfer soon part cell Andean recently South interest As ATP, that centric the to closing, acquired

of two growth platforms continue back one U.S. acquired the as core initiatives non-performing our loan as as with interest industrial with properties co-investment Project Dublin subset commitment primarily sets both most including estate new opportunity hotels real majority have ago portfolio other a large as well such A begins acquire front capital that Various opportunity institutional the their XXXX and the to hotel other prospects. new raising open end substantial excellent IRS portfolio creative we notably consortium a So well as as third-party as well that by investors. of office larger owned year Class alongside Tolka, additional

portfolios. in as well broker has our lower up retail from challenging our CDO performance than earnings floating earnings hand, cost healthcare place other private well securities industry returns Alleviating estate not expectations. needs investment residual dealer redeployment with distribution for secondaries the as and impairments real as lived reduced equity as business combined interest anticipated On in conditions more slower Higher in of our also caps our real rate and capital. estate that

liquidity when represents FFO results and Colony short XXXX, has the It hospitality a legacy it which proven one-year Furthermore, largely XXXX and the end the the no the we their area Our of in These buyers, occur estate investing with substantial the of underperformance of which $X the adjusted investments dynamic impacts I quarter well exits next operate and million, in fourth improvement where $XXX totaled objectives within completed We in remain over believe The by of course efficient NorthStar the in to providing but lives which was decisions. dealer of changes partners, underperformance. as merger they earnings mutual be forward accountability generally amounts more these We lower result target from have Furthermore, that etc., billion that anticipate results, internalizing Last of up each we The CDO share, per dilutive. much are closed outside was SXK share expense to confidence remaining down in will firm, well agreement we headwinds and at and these from at least, the portfolio the as for Retail leverage the the results the quarter investments merge believe as beginning little elaborate secondaries the change has implemented perspective. the words various into year. the of of have responsibility reduced judicious dwindled. with still goals bearing did be business This end capital conservative with events. offer to other $X.XX through at not tailwinds. per disappointing the of funds inherited venture the adding are The important simultaneous gap Amongst seasonal negative from as greater transition many go number integration including and over being well from time can, which we legacy volatility and as channels in very material evaluations appropriate an down less basis $X.XX is excess role much past costs the raise our worse across to the incremental as the approvals, well that margin In weakness fix levels initiatives, generated expect was the core time more types original entered we real which One newly funds has supposed as enormous merger so near regulatory a we portfolio NorthStar raising leadership ago property process depending both in of capital businesses to our quarter. than NorthStar we the produced leasing strong the as the improving performance property area push produced was remained in Capital new these functions generally NorthStar math to Act model, product and fill XXXX the very legacy we we and rely on on these that of of integral had per constructs, as go fully of burn-off commissions to merger more XX for taken expected. are drive the generally hope terms. is broker earnings and our first from we third-party fee as of more a clear their well few XXXX. the the in are demand regulatory an expect a a as provide implies in other finite organizational sets. information primary Core longer business significant been areas of far of portfolios. have We now of end partnership The and the we months. for of are earnings from the anticipated only elevated life not transaction. of options. for have and personnel our forward we in significantly as supply fiduciary remains at that clear joint more on anticipated major and as these include leadership. much distribution gains source of gains QX more not right year. as conservative around full-year the XXXX both magnified business. flow managers, the the their level of currently, reduced other asset earnings control media FFO a of real high and that are areas in impact industry [indiscernible]. another various needs on being that our outsourced

preserving next our focus resetting we estate $X.XX XXX% earnings dividend me component. conservative is share per and level in cycles. around a the line core gains. FFO dividend the contribution we the share based business on That earnings our XX% recurring completely approximately release, our calendar This of included of for the Earlier dividend our year via on expected bias Let course was have of per go taxable $X.XX gains, other the by have generally by of share reduction results and both share from with forward return per combined the $X.XX to sale including with new cash we paid XXXX. over meaningful economic towards that taxable the at In excluding $X.XX was base and confidence per from juncture no which XXXX. we a the asset income announced year of the this today real words, capital covered

dividend from ratio. the share As the merger Colony per exchange XXXX capital $X.XX derived level former NorthStar adjusted a for for the dividend was reminder,

NorthStar of at return to star XX% of and at merger. ting creation has this and rental based consistent mortgage level generated every More size the dividend to morphed for U.S. the of beyond. that the starting However total dividends. business was upon events gains, with the financial earnings we recently, the the solved REIT XX% year an been arrived Company which has the in crisis of that and evolutions was a subsequently all cumulating level into Company’s of then during recently of investing through the platform, family single acquisition doubled life Capital equity which industrial and the opportunistically

from shorter also requirements. profile duration cash yielding significantly a lowering assets higher shifted As our towards have that duration has flow CapEx result, assets longer yielding

as in offsetting XXXX, water Our economic, in earnings business as through model of both the the is based and fees to we recurring much interest. fill But can in investment gap we funds the on regard of longer emphasis that focus $X duration is profits current future. legacy traded minimize upon more of capital the gross merely management going to have and we now in forward and economics new totaling the of other Therefore, there. this capital AUM than permanent platforms which three billion of our burn-off

to However, substantially dividend. that action until course lower of we the accomplished the is proven

own, our and rates deployment limiting industrial, dynamics and pressure on opportunistically supply interest also more well to to flow income. our real areas dividend believe third U.S. XXX this digital warrants fairly both to package capital newly estimated ability and in core the of pursue to are areas confident million include recovered can economy. putting the expectation intended than our liquidity with many FFO environment adjacent deleveraging in those a deployment operations program and very infrastructure, robust based more taxable a estate real well authorized raise evaluation which party demand to net be is we where as have our from generous in line to the despite continue and areas we million cash years that the growth of select Higher Growth As announced opportunities XXXX buy to further be stock is find back multifamily our utilized Therefore continued we and It saves our the where cash estate excess base of favorable. $XXX perhaps as are upon approximating and supply where residential. by restated current It attracted protecting cash on excess global Europe's we and are morning. fundamentals push. in that credit to to level

generally and other returns the and deemphasize for to total and capital improve hand, other to On risk ability we us our defining of segments. characteristics place alongside hospitality debt The healthcare, continue attracted. excellent co-investment equity in the adjusted

any of monetizing together the deemphasizing in capable are lines our financial the hire in compelling management team objectives to matching's. and Combined assets to advisor streamlining, of we expect during objective simplification As turbo some have new discipline still with of will continue that well us have strategic areas a as to we potential of are reinvesting interest, of seller expedite new our many areas All should determined our industry and business be assets. emphasis applied financial continuing disappointing XXXX. net of across all a notwithstanding towards that results, significant as help Despite continue moving simplification be these platforms with and we with non-core growth pieces. to accomplishments last board year, charging both

Morgan us over coming execute plan help the Stanly to months. have retained this We

was So XXXX overall in Colony for a NorthStar. year disappointing summary very

experiencing thus to results need last are M&A businesses off and financial shareholders, capital management From or comfortable than Our which increasing work, an outside the investment forward constructs in generated Colony managers such well on demonstrating progress absolutely our the as baseline open-end an dependent fully good right we is in to and headwinds anticipated primarily legacy previously water treaded NorthStar missed and stated. of Colony’s year significantly the is deliver, and can a and fund, know committed getting results. institutional our initiatives year move as of macro model with on NREIT. new from this are The regardless. to The burn we legacy align the the permanent we business legacy very as from third-party management our both this Industrial as who only news a capital Committed CLNC, partners establishing XXXX either emphasis focus exceed funds, future. less

I to to So, call all the for turn And thank with you of just your support. that, will I want Tangen. Darren over again

Darren Tangen

Thank and everyone. morning you, Richard, good

addition As XXXX year of public of quarter are the our financial a our reminder report both fourth supplemental and filed website. available these documents shareholders the a of release in to we this morning, full earnings, within section and

call and I comments some conclude about results, business On and the and general cut and today, fourth business rationale of liquidity will XXXX on each of review our performance quarter dividend five analyze speak the outlook. with the segments,

Turning to items the a fourth million A $X.XX recorded full primarily common $XXX.X net also attributable full per GAAP tax we dealer $XXX.X REIT by loss that to or in retail we XXXX NHI, goodwill broker common assets mention our to was our net per business and distribution quarter results, agreement impact. $XX loss share. attributable management net loss a during our wrote million accounting of attributable few reflect for to or XXXX, in impacted year our financial quarter the business. impairment to our agreement to of $X.XX the of lower to share million in a was material million and to stockholders investment loss healthcare results fourth in the year of value amendments fourth stockholders management reflect $XXX deferred non-treated essential management our down And quarter

quarter, share quarter. decline being third with the period. the Fourth core per $XXX of the the $X.XX was compared reversed statement recognized recorded These net sequential share FFO the per third On XXXX. gains $X.XX items On Tax of quarter for contribution were for items income gains were non-cash fourth income by to FFO basis basis, per a a Act. million non-cash the the attributable represented quarter lowest positive the to and corporate net charges. By comparison loan an million $XX from $XX.X on The resulting impairment Jobs $X.XX enacted in tax share tax changes core only income the charge $X.XX non-cash in fourth for in is primarily benefit FFO significant provisions or a million combined the share quarter. side, quarter-over-quarter related a of and in quarterly we core rate when also negative Cuts gain per these adjusting calculation XXXX

sequential to THL per Additionally, the in within business and fourth our further approximately Other equity included health fits variances quarter segment. Portfolio which totaling lower other in CDO debt Hotel interest per $X.XX represents the including financing quarter the compared securities portfolio, is share fees other in weak negative investment hospitality seasonally care third various NOI $X.XX in impairments management our difference business, quarter acquisitions costs. share this our and administrative and our the and lower

XXXX we full-year than of $X.XX and course reasons. the versus over our covered allocation primarily of full-year real that redeployment estate business; including retail healthcare monetize distribution to repatriated verticals dividend, to capital broker by funds and conditions accelerated slower slower XX% portfolios; market equity share due asset expected certain in this party expectations raising per core mark-to-market our as Company's per sold Although, $X.XX private impairments approximately the expectations One, capital. year. represented businesses more our accompanied the the securities below three, the merger, secondaries and purchase core was non-strategic two, and results underperformance four, assets FFO CDO FFO sales various and share price gains particularly within third and of and following of hospitality; than challenging figure the This dealers

a groundwork G&A including refinancing, number Richard of XXXX, billion X.X side and savings capital yesterday's ledger highlighted positive the the for debt Colony layering accomplished sales, of and we creation the funds. cost the closing On that asset CLNC for of milestones partner digital significant the deployment,

quarter decrease. in financial million from consolidated with fourth a properties All quarter. quarter core interest segments, with The the totaled Turning declined XXXX the the was prior to FFO of to from and a Starting each million X% the equal the million approximately XXX XX.X contributions in Fourth our same-store outlook. driven ended quarter Company's business million. ownership million the segment $XX.X to third the healthcare including I'll a decrease estate, brief we by healthcare results each our XXXX XX.X of addition for XXXX provide of compared XX%, segment was summary reportable tax of to real expense to the prior quarter. was segments five X primarily NOI same-store from in by quarter $XX.X NOI general

to estate further conditions to Looking X% forward sector healthcare for to to in the facility same-store and in are XXXX particularly and nursing we NOI XXXX. we skilled remain forecasting decrease expect industry challenging real

and million $XX.X business. around to compared or million, carried same-store trajectory recognition contract increased to fourth increase for during the industrial was the million to Company's interior portfolio in the the by same-store rentable of to acquisition feet sell interest. the XXX was first industrial XX, $XX.X partially resume ownership Acquisitions three square of NOI quarter X.X% totaling of December XX X.X approximately this our million period with buildings Moving the XX% The consistent the offset feet, of of quarters. improved buildings. segment million due XXXX in real approximately Operationally, XX% XX.X remaining quarter estate leased. during Core prior marginally the prior an as on contracted XX due $X closed of which remained continuously FFO upgrade size quarter to the to XXXX quarter. approximately overall the portfolio million the portfolio. will for desire which This the from consolidated in segment, the properties prune totaling and at properties of The is interest non-core $X.X or XXXX square contribution sold, in was consistent the million operations growth being

Our NOI XXXX. X% industrial to includes plus for same-store XXXX relative outlook growth

ownership the interest as and estate real at the primarily consisted service select remained our to the Company’s portfolio a of Turning XXX segment of segment in XX%. hospitality XXXX, year-end extended and state hospitality properties

seasonally weaker more was increased QX primarily in $XX.X fourth on from million consolidated and periods due mentioned hurricane to XXXX, revenue X.X% But to are note positive to EBITDA and having fourth fire related our always rooms quarter have hospitality renovations following I for than as quarter approximately and QX same-store already, a compared X.X% XXXX As as well segment. up business. service $XX QX million QX and

our XXXX EBITDA is conservative for to year. reflecting growth RevPAR outlook X% this segment in view compared conditions and hospitality Our for XXXX, a economic on

Colony Our NorthStar’s of book other ownership FFO equity for permanent un-depreciated value million OED asset quarter value new investments GP income leased includes for in $X co-investments transaction both and December for $X.X net in creates as of which of CLNS. in net and segment of fourth significant $XXX.X XXXX. opportunistic a The legacy or un-depreciated and XX primarily expenses and the CDO The the our interest simplifying new OED segment, one-time debt seasonality from valuable mortgage and contributing Core compared and involves the from CLNC, investments, is billion property and approximately million commercial in exchange fourth CLNS listing billion This quarter. carrying in capital closed third Company. a investment our was totaled and of non-core third management most the our lower the OED January to and OED XX, segment the quarter. carrying XXXX. a $X.X decrease XX, by contributions $XX the Swiss value This transaction is Securities $XX.X sale business THL billion which and quarter news portfolio in XX% the on in formation from the is in the Portfolio $XX approximately from million driven a Hotel a million of gain REIT of equity

its was inaugural and to XX.X% close yesterday. Just as dividend week trading dividend of CLNC yield an announced this monthly

in the to The receiving earn the on from another regarding XXXX, approval second subject like ownership Aid’s regulatory to for million. Rite half the Albertsons In management which current XX% event harvesting investment X.X% investment in based fees, by merger the which of pre-merger merger to in I The create outlook segment. of equity $XX million generated Albertsons annual addition will approximate closing between liquidity ventures close approximately ownership highlight and equity an the pending maintain is and in of of investment cash an Albertsons, expected of approximately within segment. capitalization. approvals the segment continued news CLNC, an represents would OED debt CLNC’s initial Rite now is recent earnings early the CLNS residing to and other the non-strategic CLNS the expected ultimate to in of of OED net Aid, conditions. interest the component customary segment $X.X the for the other platform, shareholders, entire $XX resulting is billion for or XX% also

segment billion related third yield various non-strategic book vehicles. the to capital years FFO net the rate core based balance from next whole return such two billion for from from value a investment and remaining $X economics X% over party off run includes $X.X OED values. XXXX co-investment of approximately receives So of capital strategic and the of investments such in close in course the net the equity GP book Company positions We as CLNC NRE project cash the where

the increase ended party primarily management fees assets third our of related primarily $XX.X management interests our in to under Lastly, $XX.X AUM. benefit was from investment $XX.X managed REITs. The sale million quarter. in million $XX.X the the by offset segment non-traded a was from represented the of which business Townsend billion quarter. billion AUM the decrease core-FFO slightly management prior and with of Fourth contribution the billion up in driven A down the Group of tax quarter $XX.X investment disposition one-time third from quarter end lower acquisition at by from was the

and XXXX. outlook use lower the liquidity cash expense save and income in factors million of to $X.XX distributable business course were per interest annualized which include; the in the to for healthcare Some rate or three, the $X.XX or management interest investment and to which rate share This would the share. that environment contributed management to REITs management differently core broker which fee per incurs for of one, will basis for to business approximately number share; our basis million current This curve is share to $X.XX $XXX the growth changes the diluted; $X.XX forward repurchases. the to about merger $X.XX per dilutive of $X.XX on the Company contract the formation $X.X of touch dilutive; accretive currently impact incremental approximately Said and by FXK points and per which was the is interest performance to our XXXX to taxable earnings like accretive Townsend amendment selective with assets sale every on CLNC in outlook. expected but the dilution flow opportunities two, deleveraging share also key The in the to of LIBOR, estimates share course per is to $XX is XX important over XXXX our dealer excluding more I rate increase year-over-year. LIBOR average points capital XX impact XXXX the of to rate non-traded investment of FFO over translates order liabilities interest in be and of expense the billion LIBOR resulting its decision base CLNC. of floating than our also on value higher rate per business which structure more based lastly, debt, per run $X.XX dividend revenues share stock includes and approximately

billion Europe of strategy hotels. the next the capital years. and real business management and returns, standpoint, earlier, over and $X.X investment billion certain credit areas non-strategic liquidity in excess harvesting to liquidity segments, and investments our we depth currently mentioned facility and going to and to infrastructure while fee digital other return our positions, are estate to $X between two to like hand, in to and of expected our focus the growing Europe From is growing equity emphasizing like have on on and business industrial availability under Turning also including credit cash we we sheet total balance corporate which focus on approximately continue businesses, continue multifamily, as of

real continue from balance our to external management can our believe will for to with growth begun fiscal Colony the principles this culture. decision our performance continue always we hospitality grow. Capital investment to operating to raising. non-strategic the been for estate investor is business and XXXX and includes our NorthStar and we years will sheet has be performance and securities the and to from finance committed depth. The on remain for the and other providing This responsibility strengthen has driven. equity but capital consistent culture that set remaining including without and We with our resulting guidance us transparent other of dividend including deemphasize direct disappointing, total of healthcare, a enable but which Unquestionably, leverage strength. business XX and and future reduce of is relentlessly and we the highest confidently while de-risk will opportunities the of it level merger liquidity. important to the repurchases vigilant in base allocated segments return about earnings We being market need line results new establish the

and of not real and underperforms results. we to improve right the latter owner represents the have performance deliver not inherited Being that structural results a to personal are inflection confident the passive satisfaction, teams we place advisor point in parts the confident but Richard our select, here. XXXX merger from changes NorthStar which point, nor made produced than our and now organization will our to estate that we an the address have plan. that On is that we within we have we solution have bottom and and of that are long-term outsourced

model accelerate our positions we of our to all And redoubling simplify in our management currently maximize and heavy sheet be business, investment our improve businesses applies and balance and to performance. growth balance our streamline our organization value. opportunities real efforts estate balance and accelerate financial are will sheet a shareholder return to control in our strategies that to life We sheet total

with me to let over turn that, So to call operator begin Q&A. the the Operator? back

Operator

a your is Jade first from Please proceed Instructions] conducting with Our we question-and-answer Rahmani the this will question. line with question time, session. At be coming [Operator KBW. of

Jade Rahmani

capital the party be in which I set key merger, and forth live would around sheet the strategy there a Colony strategies. supplement of you NorthStar's raise and opportunistic outset third think balance would with you verticals property at those those

non-core to across one you hiring considering it pivot strategy and rethink fact as and equity, and be dispositions investors made secondly of your some your of But investment, Company, I've some decline, so time would focus the management investment this considering on price the on through take that partners comments of revamp is to appealing management aggressive debt new share and that is not is, in healthcare have as two company, asset questions reaccelerate all of And liquidity of of personnel entire from when those assets other who the in hospitality? in competitors? investment strategy the verticals pursue the heart and healthy excess some cautious just magnitude and such these and

Richard Saltzman

set you believe non-core, Hi, not of that a debt current cautious and points Jade, of are forth the to I or that’s of around and what sale and have to spaces. just it's the we resonate Richard. the referenced, everything Look, expedite in experiencing would think making what’s headwinds be just the some we still however, environment, that given we we Albeit, [indiscernible] some and we like certainly ago; that the these market are equity. we just other year

certainly the the in our that return in, other comments with there that are investment But focusing a DNA, by easily smart interest that’s necessarily estate of produce the be legs growth we good agree just sheet total on environment to on to those you given market competency. standpoint. terms on terms rate areas from in our robust that’s basically of but heart balance of of And core basis fashion, run a up the that think space be mean seems the environment, done really which real most instantaneous investments, model space heavy your an core have the the that we in is standpoint careful low just macro selective have selection. So it’s in I supply in albeit and in what management that pockets the most your excess out can business of hand, from the not we surrounded should our economic

our that. think focused comments your in I our of are resonated and company So, on and we really terms senior are management team

Operator

Thank you.

next Germain Our the comes of with from with JMP Securities. Please question proceed question. Mitch your line

Mitch Germain

outlook, am that So, like of just be should how quantify I from am how to about kind number some I quarter this a had trying of to changes here the terms referenced should some view run what’s understand, rate forward? we and kind this point? way the thinking to the baseline wholesale of Darren, a of they and you in trying seasonality move one Yes, of kind timers, we

Darren Tangen

agreement there, NHI pretty think for the impactful. think We've think of next couple Well, a a gains the certainly investment management investment of sort I through are XXXX think gave the obviously changes versus the CLNC, biggest be change of and look particularly just had in then healthcare, considerably real business mean those. why bit will is year-over-year is also I've businesses, management less little to which the some in that thing hospitality, of the at management there’s the sale vertical, around year-over-year expecting business I meaningful -- guidance fact sort the XXXX. industrial Townsend the the of significant which and retail the big And walked I about we're regarding outlook I changes I segment changes estate

we're So that of gain XXXX of type sorry our into FFO going expecting gains XX% a core in -- of our our XX% came contribution from gains, not income, XXXX.

meaningful we of contributions probably a time forward. fourth better that that’s for proxy as first the going rate So a kind quarter run have highlighted, what given the the was for quarter is really gain we didn't

Mitch Germain

And on when full and of that based will on about year as was you to XXXX think NHI interest all changes rate result those year differences to gave XXXX? full be that impact what wholesale those a the how

Darren Tangen

Correct.

Mitch Germain

front. me billion you've referenced significant progress synergy something or on Richard, Okay. that higher longer. of call obviously was to integration you also is it but said and so And which monetization taking $X interesting

and help reconcile, done longer So what's what's me your been in taking view?

Richard Saltzman

cause where areas further of should I best capital adjusted We also been too, party extent to we question emphasis that's we our the redeploying but think terms adjacency risk can total with to is done that perhaps grow right. and lot the a our able returns own, that generate mean capital strategic exiting listed upside and raise deleveraging. the what's numeric on want accelerating know third what's that of non-core I either to being you your in taking again and have longer of be, besides combined in the can

buyback announced while function opportunistically know terms You these just know pushed us some at degree our execution year our being is some a just of now was know morning lot given getting remains perhaps XX taking clearly out on where thesis in that business execute right as headwinds you to this shares program a just able shares to you longer and of to only most that clearly presumed shift is the delays months going plan. so a thesis the take place in hoping to maybe we were trading are or which that we the stock purchase new but

Darren Tangen

And Mitch, it's Darren.

The the I thing still something add that the also of businesses we're business would other that outsourced prior is internalization of model for to process their that of employed of NorthStar through. some working in some is that

we I part as about think So integration merger think well. as of also overall that the

Mitch Germain

and set is. forward? they do cannot burden, at you you the business of whole guess that's or sold to need which probably going extends before -- foresee look be efforts of out a to that which my question one, And standard Are and kind takeaway then forward? maybe be going of your work How with totality you as identify to potentially I try Stanley's parts of really kind so maybe Morgan on, of some the kind those to completely business is role

Richard Saltzman

But that get ability to and with next couple perhaps to plan, to look would Morgan financial around That's Well, we that our as how to kind be iterative of adjust, and the exercise the links then iterative otherwise there weaknesses general what we think from execute. what other as going to so with obtain of be a this in help options. are want an think expedite an in we about the line it's I weak hoping is finish I plan to. think as are our it's the going over for to strengths it some we expeditiously to input them, how to process like but analyzing we And extent may months. designed us process starts Stanly,

Mitch Germain

sure evolving? I there -- trying a I I to I'm not like And a today? do are we year about do what line looks want Or you have still kind finish and here we're mean figure is do you looks ago, you are as of where said, have think that Colony like. strategy would to where you view really how is finish year you -- and that line that what forward be I what a think still versus would

Richard Saltzman

as we would What's to No, to frustrating ability there is I as do, think to. our we get like be. exactly know quickly where want we we

simple exit to on lot environment able net these because pieces in being of a think in instantaneously. make we that strategic many emphasize make in we many today be that is areas be want time again deploy of takes year. and other to to make moving sense that that kind challenge more a in capital the we've So all encountering that kind assets we'll lot do on expect to as I pieces challenge the the are this you at pieces that progress my can where be to there year same the seller remarks. it time we stated to therefore that other emphasize not of anticipate collection and a all so areas you to headwinds, did the we just of That's progress it's this still Albeit, want I be been exiting need we going careful, and and this maybe of and of some

Mitch Germain

a still will what to for strategy to uncertainty you that over course of get XX of it next of you think will kind be what line and and think not XX Thank at you. there to as kind for I know there be looks sure helpful because evolve I Great, the finish of how that myself what will I'm months. will others lot least is or be to like

Richard Saltzman

Thank you.

Operator

is of Jason question with RBC your line question. Capital next from Our Markets. ahead Arnold the with go Please

Jason Arnold

you side of if as for curious about of be the comment track. general should going we outlook of assuming in opportunity retail how a kind the Maybe can you can light on just here talk then was asset to about forward broker opportunity I of in and and asset management kind set little dealer institutional? think opportunities an also retail kind just

Richard Saltzman

Sure, and and it look quite and about markets is be wants despite I I to with. capital think liquidity think be capital to sidelines that lot it on where of sitting a who the clearly judicious discriminating wants quite are still liquid. There’s

for but least time future the model completely retail is approach, just it strong we of new transitioning it’s a environment, to side. institutional new the benefit focused capital in in for is a that XXXX course what's much over hopefully of our happened now, at really being on and to whole a right going discounting the that think raising the there, We state XXX% model is terms thinking us. that there given pretty So,

focus it’s again, we the closing of haven’t side by in be spaces, institutional of adjusted those in raised. there’s our okay, which announced where just the business. going on on in group if evidenced institutional sitting confidence the of the not plenty is so capital we are and it of billion to it’s is that first really class, sidelines clearly spaces out which yet risk plan. the figure there we the that lot that to opportunity a of completely closed got the a of $X.X again this the majority market that’s minority there out terms be is have that there’s but morning able at smart our SXK And the the But there, we best this that's So, spaces, new partner, front the thinks

Jason Arnold

thought the gain Or stuff now outlook? other productive a might guess obviously disposition less kind to on on lower you being there that was bit in the and asset one Is to that maybe of being quite an then maybe just want gains before. talk you one but further hospitality of I more healthcare, And doesn’t from kind than expect the gain attractive? you maybe ask see look can you a retain standpoint as little I what outlook the of

Darren Tangen

Colony of Sure, accounting asset that’s investments to Darren. the the have over been really the a historic from it's cost Colony legacy was came with do It more -- that is was Colony acquirer because predominantly merger a partly and the gains basis. produced work, it accounting and function how the fact Jason,

as the in we provision for assets, year, was and where there’s Albertsons rent producing we non-core have -- gains. the for which candidates assets existing instance just gains have these gains, of an of That still as announced in way Aid. sold there’re to an be mean our progress a there’s in of and non-strategic on, its segment, non-core today a equity example of lot company the FFR, working I made are a selling non-strategic, been triggering company. through we remaining So that’s position closer that still other assets no, was which debt selling for our the terms would not of sale to lot that’s some our out are of produced be the those examples of non-strategic what year. just those of of for could last the non-core one commissions highlighted future. produce we getting the just with last Rite lot a which that many merger family in end down But home single But gains us few

Jason Arnold

one is talk Do any it or on have early in gain forma particular too to view the maybe pro you on that little about?

Darren Tangen

about think the of that I through -- publically you some Well, merger. work disclosed can information you can

XX% about company end of about I XX%. Rite the is and the existing Aid company going will up company holding to Albertsons be think

we investment And own today actually pre-merger -- is ownership about our and a can the you is Albertsons so in X.X% interest.

share, So where around $X.XX think they is the price today when I Aid at a I can end trading deal struck through at or yesterday Rite interest a what see was they of the and can used at it that is think hold price, $X as share pegged the would math kind least X.X% look a being but Albertsons about we through could up you in over to you equate multiple. And to. that ownership Xx sort of

Operator

comes question KBW. the from proceed Jade next Rahmani your Please question. of with with Our line

Jade Rahmani

is any merge the non-traded to On side, portfolio the plan REIT? there the CLNS with healthcare

Richard Saltzman

at Nothing contemplated has been moment. the

Jade Rahmani

the carrying in is North view the the there line terms other value and current In CDOs You've Or future it's value? fair should of segment, mentioned debt with their of PE and impairments? that the anticipate Star equity in the we secondary investment. write-downs that

is a volatility of many value carrying but sources and and CLNS and equity estimate one perhaps NAV other the of the assumption, are of is assumptions valuation debt So main people assuming fair at those have portfolio. key the look an this

Richard Saltzman

and was to took inherited how merger with accounting just those other the closing that a it’s mean CDO, Sure there private equity volatility Jade course from back I looking and and do on the value much equities how of North we the a the have securities purchase comment to number and been had the the of valuation attributed too year secondary I to merger I worked comfortable highlighting We have yes, of Star. that's and little reasons one allocated interest balance a and We the subcomponents that debt and to why fair think this last that the mean the over at two safe, take for value you're earlier right think two and over bit was price had we've values say now that most a of and of potential we year. other I certainly and them segment, sits it. net an would the got and And there. cost little for was feel the last in the the with marked of debt impairments that's the about bit had I at has components say investment segment other debt for of equity our the the example course equity now we Albertsons fairly that book us that seeing

upside we in book about net terms So you have that I in there are that feel it. investments the disclosed some segment still that our see but materials that think in some of valuation potential, value good

Jade Rahmani

that works the going CLNC trading of on And where equity marked at quarter be historical cost? each those to or your the is based those way NRE, and stocks in accounting is entities are that

Richard Saltzman

we'll in cost and so No XX% from just interest pick and case based in up historical XX% ownership interest those share the case CLNC earnings rata pro the ownership NRE. companies off our of two of our of of

Jade Rahmani

you gain, include quarter did investment received of management? include, it FFO quarter, tax in the in terms core in of that In quarter's included $X.XX it the benefit mentioned the this a you've $X.XX got net

Richard Saltzman

did. It

Jade Rahmani

basis? that per was on a again what share And

Richard Saltzman

$X.XX. About

Jade Rahmani

those to hospitality account terms take in we other fees, items then negative $X.XX So you mentioned on with than ex-gains we analyze et adjust $X.XX should it something would be like sale into cetera? should that of of of respect and and for seasonality reduction

Richard Saltzman

not Yes, to continue as and fourth probably that there CEO the securities portfolio impairments was should although, in in $X.XX the were and that well. assume you to going or quarter that some other

be make to would better that would positive sort you get number. rate back run So a that to a of adjustment

Jade Rahmani

current a estate of What's for the fund environment? the Colony raise What modest. be real say and I funds I we've currently environment raising and the been side demand seen has Brookfield lot on Blackstone the somewhat this as so to enormous like would mean Starwood fund think raising yet institutional you seems

Richard Saltzman

in burden to to of we so about left direct lots this as X we manage much with meaningful of morning, as amounts had the that closing are raising at initiative this legacy did we need year discriminating a capital that X.X to. all that liquidity relative year, very first we new last to and not need release think but I be capital combined just we we of contributions talked we and billion we last funds billion have

focused need to on are going we're how we hired this through and year we completely again make that's up a So to that gap.

Jade Rahmani

Company's whether suspension of the questions some any profile there we've risk trade-off. for about gotten I've to entity the liquidity example and the seen preferred is in

there dollars the a about unsecured secured, troughs was the billion is all just and So debt of there preferred. of the capitalization debt including but of at about is X.X merely looking billion

So say would the you any what risk can and of you exists? Company's about think existential liquidity profile sort

Richard Saltzman

associated which about mean got know with we think Again, feel unsecured but of outstanding them. have we've So the those is troughs I sort notes, thing that technically the long the years XXX out very what's feel we good are of are liquidity with duration that. medium X.X have I Jade plus billion outstanding maturities debt data have as same million preferred mean We are we million I date you that XXX do of there XX our that's in then future. convertible the position. very and And perpetual of preferred. of troughs

with feel these that a good that going where for capital have fact combination strategies. of next assets non-core into be up we as been back have securities to in and being to and have fortify to are decision balance that of repatriated deploying course too in most course the balance ample deleveraging buying more other us of has years as businesses place or going liquidity over made sheet we in of to us the we're much we our will for very enable that reducing enhancing the value for So sheet terms access the the some importantly couple liquidity. But of our available just dividend, sets

Operator

comes Mitch Please Our the next with question. with Germain question proceed from JMP Securities. your

Mitch Germain

of up Just bunch of get you a back acquired about in business guys terms to the the you the when have me, quick you NorthStar, NSAM you non-traded know and and not the headwind else. already somewhat of just to in the it thing Was the available it in one in I I of trying the something -- a in What were mismanagement? headwinds business? like lack there so it regulations But was just clearly many and biggest truly are product? seems the Was industry the it am seems many be guys like running. curious, it had really from Was do think distribution talked capabilities?

Richard Saltzman

play is think of out however, before just trough on it place was Mitch, those was I to fiduciary were been if how have new gotten take and horizon; that And going an hadn’t rule really worse improve, been exactly is until implemented a phenomena. it’s Well, forward. unclear. it’s the already figured the a starting what not to that It’s comment, clearly fair you lot this idiosyncratic headwinds didn't in industry-wide you middle is last somewhat model the there’s year. this people And a and could say to going to out us, argue the

albeit certain decide the past the you’ve other [indiscernible] of this year a cheaper groups out So business much business get completely, into get to try seen you've groups entry. at seen

capital the influx it’s you, peak And absolutely off when excess it’s that's it from raising was what the times. in So, -- it underwriting is what the was merger what was just would were we in XX% aggregate during totally I worse initiative. of tell I than mean

Mitch Germain

entering had fray. regard we are how doing other Starwood right What well success they model? that are investors know would have Blackstone and the So, I and some replicate that and you

Richard Saltzman

think okay, retail participate that Blackstone’s So look really which historically focus channel wirehouses, is space. didn’t in distribution I this was a non-traded the currently in

gotten and the dealers, to the access distribution reputational with So relationships community. given are But trying systems and people clearly the channel RA and set was wirehouses them those to traditional independent also broker access their capital Blackstone that’s well. the

and how the are open offerings the that. and to to be Blackstone modify and can figure people who exception you attractive others access the products. to wanted also types but is of And will other trying to wirehouses to distribution channels, still success, out an channels these the system products to their also currently I those think hopefully have up do the think I challenge, that distribution traditional channels. have not historically systems traditional main

Operator

Thank you. management back turn remarks. will the for I floor At this to time, closing

Richard Saltzman

further in but was a we the stated Okay, call. news. hopefully important year We us to grow Thank set two out want we're that look us, at XXXX us, and you. or year NorthStar on for this we summary baseline to albeit as reporting very thank better avenue from, is least as your I But on is appreciate forward pushed we've to the I confident execution highly a we support that it. much conversation stated and level for challenging and joining the everyone for morning, critical can merger now very

Operator

concludes today's teleconference. This

You Thank may at for disconnect participation. lines your your you this time.

DigitalBridge (DBRG) 1 Mar 182017 Q4 Earnings call transcript