iStar Financial Announces Fourth Quarter and Fiscal Year 2013 Results

    iStar Financial Announces Fourth Quarter and Fiscal Year 2013 Results

Company Forms New Net Lease Joint Venture

-- Adjusted income (loss) allocable to common shareholders was $(19) million
for the fourth quarter 2013, compared to $(23) million for the fourth quarter
2012.

-- Early in 2014, iStar entered into a $500 million venture with a sovereign
wealth fund that will seek to acquire up to $1.25 billion of net lease assets.

-- During the fourth quarter and through January, iStar closed $570 million of
new investment commitments.

PR Newswire

NEW YORK, Feb. 20, 2014

NEW YORK, Feb.20, 2014 /PRNewswire/ --iStar Financial Inc. (NYSE: STAR)
today reported results for the fourth quarter and fiscal year ended
December31, 2013.

Fourth Quarter 2013 Results

iStar reported adjusted income (loss) allocable to common shareholders for the
fourth quarter of $(19.1) million, or $(0.23) per diluted common share,
compared to $(23.2) million, or $(0.28) per diluted common share for the
fourth quarter 2012.

Adjusted income (loss) represents net income (loss) computed in accordance
with GAAP, prior to the effects of certain non-cash items, including
depreciation, loan loss provisions, impairments, loss on transfer of interest
to unconsolidated subsidiary, stock-based compensation and gain/loss on early
extinguishment of debt. Please see the financial tables that follow the text
of this press release for the Company's calculations of adjusted income (loss)
as well as reconciliations to GAAP net income (loss).

Net income (loss) allocable to common shareholders for the fourth quarter was
$(57.9) million, or $(0.68) per diluted common share, compared to $(87.4)
million, or $(1.04) per diluted common share for the fourth quarter 2012.

Fiscal Year 2013 Results

"Over the past year, we have made meaningful progress across all of our
business segments which has enhanced shareholder value," said Jay Sugarman,
iStar's Chairman and Chief Executive Officer. "We began originating new deals
in our real estate finance and net lease segments, significantly reduced the
balance of NPLs, continued harvesting condominium gains within our operating
properties and advanced a number of our land projects by obtaining
entitlements, furthering development, and pursuing strategic partnerships. We
are well positioned to build on this positive momentum in 2014."

iStar reported adjusted income (loss) allocable to common shareholders for the
year ended December31, 2013 of $(21.7) million, or $(0.26) per diluted common
share, compared to $(53.8) million, or $(0.64) per diluted common share for
the year ended December31, 2012.

Net income (loss) allocable to common shareholders for the year was $(155.8)
million, or $(1.83) per diluted common share, compared to $(273.0) million, or
$(3.26) per diluted common share for the prior year.

Capital Markets

During the fourth quarter, the Company issued at par $200 million of 1.50%
convertible senior notes dueNovember 2016, which are convertible into shares
of iStar common stock at an initial conversion price of $17.29. The Company
used net proceeds from the offering, together with cash on hand, to redeem the
remaining $201 million of its 5.70% senior unsecured notes due March 2014 and
to pay a $2.0 million prepayment fee. Concurrent with the offering, iStar
repurchased 1.7 million shares of its common stock with cash on hand at the
prevailing market price of $12.35 per share. At December31, 2013, the Company
had $29.0 million remaining under its share repurchase program.

"Throughout 2013, we demonstrated robust access to the capital markets as we
raised secured, unsecured and convertible debt as well as preferred equity,
while also expanding our outreach to both equity and fixed income investors,"
stated David DiStaso, iStar's Chief Financial Officer.

In addition, the Company repaid $96.7 million on its 2013 Secured Credit
Facility during the quarter, reducing the remaining balance to $1.38 billion
at the end of the quarter. The Company also repaid $8.4 million on its 2012
Secured Credit Facility, bringing the remaining balance to $431.5 million at
December31, 2013.

The Company's weighted average effective cost of debt for the fourth quarter
was 5.7%, a decrease from 6.5% for the fourth quarter of 2012. The Company's
leverage was 2.0x at December31, 2013, down from 2.5x at the end of 2012, and
at the low end of the Company's targeted range of 2.0x – 2.5x. Please see the
financial tables that follow the text of this press release for a calculation
of the Company's leverage.

Investment Activity

During the fourth quarter, iStar funded a total of $218.2 million of
investments, which included $158.6 million of new investments originated
during the quarter and $59.6 million under prior commitments and through
capital expenditures.

"While iStar has continued to evolve over the past few years, the foundation
of our investment philosophy built on over 20 years of experience has remained
steadfast. We utilize the breadth of our platform to uncover opportunities
presenting attractive risk-adjusted returns and look to develop relationships
with entrepreneurial customers who place a high value on iStar's scale, scope,
flexibility and integrity," said Sugarman. "Our recent investment activity
demonstrates the strength of our platform."

In January 2014, iStar closed on its 50% interest in an $815 million debt
financing commitment for the development of a mixed-use project in the heart
of Times Square, New York City. The project will include the ground-up
construction of a 40-story EDITION hotel, retail space and signage. iStar
initially funded $173 million at closing and expects to fund additional draw
requests as the project progresses.

In addition, early in 2014 iStar partnered with a sovereign wealth fund to
form a venture in which the partners plan to contribute up to an aggregate
$500 million of equity to acquire and develop up to $1.25 billion of net lease
assets over time. iStar will own approximately 52% of the venture and will be
responsible for sourcing new opportunities and managing the venture and its
assets in exchange for a promote and management fee. The venture's first
investment is a 410,000 square foot office and data campus outside of
Washington D.C. that is net leased to AT&T through 2025. It was acquired by
iStar for $94 million during the fourth quarter and was subsequently
contributed to the venture.

iStar generated $164.4 million of proceeds from its portfolio during the
fourth quarter, comprised of $77.9 million from repayments and sales of loans
in its real estate finance portfolio, $49.4 million from sales of operating
properties and $37.1 million of proceeds across other segments.

After giving effect to the investment and venture contribution made by the
Company after the end of the quarter, iStar had approximately $400 million of
cash, which will be used primarily to fund future investment activity.

Portfolio Overview

At December31, 2013, the Company's total portfolio had a gross carrying value
of $5.19 billion, which represents the Company's carrying value, gross of
$424.5 million of accumulated depreciation and $29.2 million of general loan
loss reserves.

Real Estate Finance

At December31, 2013, the Company's real estate finance portfolio totaled
$1.40 billion, gross of general loan loss reserves.

The portfolio included $1.20 billion of performing loans with a weighted
average last dollar loan-to-value ratio of 72% and a weighted average maturity
of 2.8 years. The performing loans included $619.4 million of first mortgages
/ senior loans and $576.3 million of mezzanine / subordinated debt. The
performing loans generated a weighted average effective yield for the quarter
of 8.0%.

At December31, 2013, the Company's non-performing loans (NPLs) had a carrying
value of $203.6 million, a decrease from $235.3 million of NPLs at the end of
the prior quarter and a 60% reduction from a balance of $503.1 million of NPLs
at December 31, 2012.

For the fourth quarter, the Company recorded $0.1 million of loan loss
provision, compared to a provision for loan losses of $20.9 million in the
fourth quarter of 2012. At December31, 2013, loan loss reserves totaled
$377.2 million or 23.5% of the total gross carrying value of loans.

Net Lease

At the end of the quarter, iStar's net lease portfolio had a gross carrying
value of $1.71 billion, gross of $338.6 million of accumulated depreciation.
The Company's net lease portfolio totaled 20 million square feet across 33
states.

Occupancy for the portfolio was 94.4% at the end of the quarter, with a
weighted average remaining lease term of 11.6 years. The occupied assets
generated an unleveraged weighted average effective yield of 8.1% on gross
carrying value and the total net lease portfolio generated an unleveraged
weighted average effective yield of 7.5% on gross carrying value for the
quarter.

Operating Properties

At the end of the quarter, the Company's operating properties portfolio
totaling $964.9 million, gross of $82.4 million of accumulated depreciation,
was comprised of $741.6 million of commercial and $223.3 million of
residential real estate properties. The Company has reduced its balance of
operating properties from $1.18 billion at December 31, 2012 by actively
marketing and selling condominium inventory and repositioning and selling
select commercial real estate assets throughout the year. During the quarter,
the Company funded $13.1 million of capital expenditures on its operating
properties.

Commercial Operating

The Company's commercial operating properties represent a diverse pool of
assets across a broad range of geographies and collateral types such as
office, retail and hotel properties. These properties generated $29.6 million
of revenue offset by $21.0 million of expenses during the quarter. iStar
generally seeks to reposition or redevelop these assets with the objective of
maximizing their values through the infusion of capital and/or intensive asset
management efforts.

At the end of the quarter, the Company had $134.7 million of stabilized
commercial operating properties that were 85% leased and generated an
unleveraged weighted average effective yield of 8.3% on gross carrying value
for the quarter.

The remaining commercial operating properties were 57% leased and generated an
unleveraged weighted average effective yield of 2.7% on gross carrying value
for the quarter. iStar is actively working to lease up and stabilize these
properties. During the quarter, the Company executed commercial operating
property leases covering approximately 170,000 square feet.

Residential Operating

At the end of the quarter, the residential operating portfolio was comprised
of 616 condominium units, generally located within luxury condominium projects
in major U.S. cities. The Company's strategy is to continue selling its
remaining condominium inventory and to maximize net proceeds. During the
quarter, the Company sold 88 condominium units, resulting in $47.4 million of
proceeds and recorded $14.1 million of income, offset by $4.4 million of
expenses. In addition, the Company recorded a $5.6 million impairment on one
asset due to a change in local market conditions.

Land

At the end of the quarter, the Company's land portfolio totaling $965.2
million, gross of accumulated depreciation, was comprised of 11 master planned
community projects, 10 urban infill land parcels and six waterfront land
parcels located throughout the United States. During the quarter, the Company
invested $15.6 million in its land portfolio through capital expenditures and
sold one bulk land asset in Hawaii for $15.4 million, recognizing a nominal
gain.

Master planned communities represent large-scale residential projects that the
Company will entitle, plan and/or develop. These projects are currently
entitled for more than 25,000 lots. The remainder of the Company's land
includes infill and waterfront parcels located in and around major cities that
the Company will develop, sell to or partner with commercial real estate
developers. These projects are currently entitled for approximately 6,000
residential units, and select projects include commercial, retail and office
uses.

At December31, 2013, the Company had five land projects in production, 11 in
development and 11 in the pre-development phase.

Summarized below are examples of the progress made at certain of the Company's
land projects during the fourth quarter of 2013:

  oReceived approval to develop a premiere, 5,000-seat amphitheater and
    entertainment venue on Coney Island in conjunction with the City of New
    York on a portion of iStar's Coney West development site.
  oEntered into a venture with KB Home to jointly develop residential lots in
    the first phase of Spring Mountain Ranch, iStar's 1,400-lot master planned
    community in Riverside, CA. iStar believes that KB Home's strong presence
    in the local market will enhance sales velocity at the development.The
    Company recognized a loss of $7.4 million as a result of the contribution
    of the initial phase of land to the venture. Later phases of the project
    should benefit from the infrastructure improvements paid for by the
    venture and the momentum created by this initial partnership.
  oSigned an agreement to sell developed lots to K. Hovnanian® for the
    construction of luxury townhomes in Asbury Park, NJ. Earlier in 2013,
    iStar completed construction and sold all units at the VIVE townhome
    community, the first new residential development in the waterfront area
    since 2007.
  oBegan construction of the first tower of Marina Palms, a luxury waterfront
    condominium and yacht club in Miami, FL in which iStar has a 47.5% venture
    interest. The project comprises 468 residences across two towers and a
    110-slip marina, with all units released for sale in the first tower now
    under contract.
  oBegan development of One Palm, a venture to which iStar contributed land
    in Sarasota, FL. The venture will seek to develop a new 141-room class A
    multi-family building as well as a 139-room hotel, which will operate as
    an Aloft by Starwood Hotels & Resorts.



[Financial Tables to Follow]

* * *

iStar Financial Inc. (NYSE: STAR) is a fully-integrated finance and investment
company focused on the commercial real estate industry. The Company provides
custom-tailored investment capital to high-end private and corporate owners of
real estate and invests directly across a range of real estate sectors. The
Company, which is taxed as a real estate investment trust ("REIT"), has
invested more than $35 billion over the past two decades. Additional
information on iStar Financial is available on the Company's website at
www.istarfinancial.com.

(Logo: http://photos.prnewswire.com/prnh/20130708/NY43293LOGO)

iStar Financial will hold a quarterly earnings conference call at 10:00 a.m.
ET today, February20, 2014. This conference call will be broadcast live over
the Internet and can be accessed by all interested parties through iStar
Financial's website, www.istarfinancial.com, under the "Investor Relations"
section. To listen to the live call, please go to the website's "Investor
Relations" section at least 15 minutes prior to the start of the call to
register, download and install any necessary audio software. For those who are
not available to listen to the live broadcast, a replay will be available
shortly after the call on the iStar Financial website.

(Note: Statements in this press release which are not historical fact may be
deemed forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Although iStar Financial Inc. believes the expectations reflected in any
forward-looking statements are based on reasonable assumptions, the Company
can give no assurance that its expectations will be attained. Factors that
could cause actual results to differ materially from iStar Financial's
expectations include general economic conditions and conditions in the
commercial real estate and credit markets, the Company's ability to generate
liquidity and to repay indebtedness as it comes due, additional loan loss
provisions, the amount and timing of asset sales, increases in NPLs, the
Company's ability to reduce NPLs, repayment levels, the Company's ability to
make new investments, the Company's ability to maintain compliance with its
debt covenants, actual results of condominium sales meeting our expectations,
the Company's ability to generate income and gains from non-performing loans,
operating properties and land and other risks detailed from time to time in
iStar Financial Inc.'s SEC reports.



iStar Financial Inc.
Consolidated Statements of Operations
(In thousands)
(unaudited)
                          Three Months Ended       Twelve Months Ended
                          December 31,             December 31,
                          2013        2012         2013         2012
REVENUES
Operating lease income    $ 59,213    $ 56,693     $ 234,567    $ 216,291
Interest income           29,430      28,588       108,015      133,410
Other income              12,430      11,140       48,208       47,838
Total revenues            $ 101,073   $ 96,421     $ 390,790    $ 397,539
COST AND EXPENSES
Interest expense          $ 61,709    $ 83,502     $ 266,225    $ 355,097
Real estate expense       45,079      40,414       157,441      151,458
Depreciation and          17,651      19,394       71,266       68,770
amortization
General and               25,106      19,182       92,114       80,856
administrative^(1)
Provision for loan losses 97          20,875       5,489        81,740
Impairment of assets      6,328       5,145        12,589       13,778
Other expense             784         10,512       8,050        17,266
Total costs and expenses  $ 156,754   $ 199,024    $ 613,174    $ 768,965
Income (loss) before
earnings from equity
method                    $ (55,681)  $ (102,603)  $ (222,384)  $ (371,426)
investments and other
items
Loss on early             (4,908)     (30,958)     (33,190)     (37,816)
extinguishment of debt
Earnings from equity      7,174       27,084       41,520       103,009
method investments
Loss on transfer of
interest to               (7,373)     —            (7,373)      —
unconsolidated subsidiary
Income (loss) from
continuing operations     $ (60,788)  $ (106,477)  $ (221,427)  $ (306,233)
before income taxes
Income tax (expense)      1,283       (1,907)      659          (8,445)
benefit
Income (loss) from        $ (59,505)  $ (108,384)  $ (220,768)  $ (314,678)
continuing operations
Income (loss) from        (797)       547          644          (17,481)
discontinued operations
Gain from discontinued    (256)       —            22,233       27,257
operations
Income from sales of      14,566      27,889       86,658       63,472
residential property
Net income (loss)         $ (45,992)  $ (79,948)   $ (111,233)  $ (241,430)
Net (income) loss
attributable to           (1,051)     138          (718)        1,500
noncontrolling interests
Net income (loss)
attributable to iStar     $ (47,043)  $ (79,810)   $ (111,951)  $ (239,930)
FinancialInc.
Preferred dividends       (12,830)    (10,580)     (49,020)     (42,320)
Net (income) loss
allocable to HPU holders  1,939       2,966        5,202        9,253
and Participating
Security holders^(2)
Net income (loss)
allocable to common       $ (57,934)  $ (87,424)   $ (155,769)  $ (272,997)
shareholders

(1) For the three months ended December 31, 2013 and 2012, includes $4,777 and
$3,668 of stock-based compensation expense, respectively. For the twelve
months ended December 31, 2013 and 2012, includes $19,261 and $15,293 of
stock-based compensation expense, respectively.
(2) HPU Holders are current and former Company employees who purchased high
performance common stock units under the Company's High Performance Unit
Program. Participating Security holders are Company employees and directors
who hold unvested restricted stock units, restricted stock awards and common
stock equivalents granted under the Company's LTIP who are eligible to
participate in dividends.





iStar Financial Inc.
Earnings Per Share Information
(In thousands, except per share data)
(unaudited)
                             Three Months Ended      Twelve Months Ended
                             December 31,            December 31,
                             2013        2012        2013        2012
EPS INFORMATION FOR COMMON
SHARES
Income (loss) attributable to iStar Financial Inc. from continuing
operations^(1)
Basic and diluted            $ (0.67)    $ (1.05)    $ (2.09)    $ (3.37)
Net income (loss)
attributable to iStar
Financial Inc.
Basic and diluted            $ (0.68)    $ (1.04)    $ (1.83)    $ (3.26)
Adjusted income (loss)
Basic and diluted            $ (0.23)    $ (0.28)    $ (0.26)    $ (0.64)
Weighted average shares
outstanding
Basic and diluted            84,617      83,674      84,990      83,742
Common shares outstanding at 83,717      83,782      83,717      83,782
end of period
EPS INFORMATION FOR HPU
SHARES
Income (loss) attributable to iStar Financial Inc. from continuing
operations^(1)
Basic and diluted            $ (127.00)  $ (198.93)  $ (396.07)  $ (638.27)
Net income (loss)
attributable to iStar
Financial Inc.
Basic and diluted            $ (129.26)  $ (197.73)  $ (346.80)  $ (616.87)
Weighted average shares
outstanding
Basic and diluted            15          15          15          15

(1) Including preferred dividends, net (income) loss from noncontrolling
interests and income from sales of residential property.





iStar Financial Inc.
Consolidated Balance Sheets
(In thousands)
(unaudited)
                                          As of              As of
                                          December31, 2013  December31, 2012
ASSETS
Real estate
Real estate, at cost                      $    3,220,634     $    3,117,405
Less: accumulated depreciation            (424,453)          (378,306)
Real estate, net                          $    2,796,181     $    2,739,099
Real estate available and held for sale   360,517            635,865
                                          $    3,156,698     $    3,374,964
Loans receivable and other lending        1,370,109          1,829,985
investments, net
Other investments                         207,209            398,843
Cash and cash equivalents                 513,568            256,344
Restricted cash                           48,769             36,778
Accrued interest and operating lease      14,941             15,226
income receivable, net
Deferred operating lease income           92,737             84,735
receivable
Deferred expenses and other assets, net   237,980            163,124
Total assets                              $    5,642,011     $    6,159,999
LIABILITIES AND EQUITY
Accounts payable, accrued expenses and    $    170,831       $    141,670
other liabilities
Debt obligations, net                     4,158,125          4,691,494
Total liabilities                         $    4,328,956     $    4,833,164
Redeemable noncontrolling interests       $    11,590        $    13,681
Total iStar FinancialInc. shareholders'  $    1,243,260     $    1,238,944
equity
Noncontrolling interests                  58,205             74,210
Total equity                              $    1,301,465     $    1,313,154
Total liabilities and equity              $    5,642,011     $    6,159,999





iStar Financial Inc.
Segment Analysis
(In thousands)
(unaudited)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2013
                   Real      Net       Operating               Corporate
                   Estate    Lease     Properties  Land        /          Total
                   Finance                                     Other
Operating lease    $ —       $ 38,815  $  19,496   $ 902       $ —        $ 59,213
income
Interest income    29,430    —         —           —           —          29,430
Other income       519       250       10,541      641         479        12,430
Total revenue      $ 29,949  $ 39,065  $  30,037   $ 1,543     $ 479      $ 101,073
Earnings (loss)
from equity        —         682       540         (63)        6,015      7,174
method investments
Income from sales
of residential     —         —         13,988      578         —          14,566
property
Net operating
income (loss) from —         131       (78)        —           —          53
discontinued
operations^(1)
Gain (loss) from
discontinued       —         —         (256)       —           —          (256)
operations
Revenue and other  $ 29,949  $ 39,878  $  44,231   $ 2,058     $ 6,494    $ 122,610
earnings
Real estate        —         (6,132)   (25,350)    (13,597)    —          (45,079)
expense
Other expense      (38)      —         —           —           (746)      (784)
Allocated interest (15,644)  (19,497)  (10,838)    (7,505)     (8,225)    (61,709)
expense
Allocated general
and                (3,496)   (4,437)   (2,578)     (3,572)     (6,246)    (20,329)
administrative^(2)
Segment profit     $ 10,771  $ 9,812   $  5,465    $ (22,616)  $ (8,723)  $ (5,291)
(loss)

(1) Includes revenue and real estate expense classified as income (loss) from
discontinued operations.
(2) Excludes $4,777 of stock-based compensation expense.





iStar Financial Inc.
Segment Analysis
(In thousands)
(unaudited)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2013
                   Real Estate  Net          Operating               Corporate
                   Finance      Lease        Properties  Land        /           Total
                                                                     Other
Operating lease    $ —          $ 147,313    $  86,352   $ 902       $ —         $ 234,567
income
Interest income    108,015      —            —           —           —           108,015
Other income       4,748        250          38,164      1,474       3,572       48,208
Total revenue      $ 112,763    $ 147,563    $  124,516  $ 2,376     $ 3,572     $ 390,790
Earnings (loss)
from equity        —            2,699        5,546       (5,331)     38,606      41,520
method investments
Income from sales
of residential     —            —            82,603      4,055       —           86,658
property
Net operating
income from        —            1,484        1,251       —           —           2,735
discontinued
operations^(1)
Gain from
discontinued       —            3,395        18,838      —           —           22,233
operations
Revenue and other  $ 112,763    $ 155,141    $  232,754  $ 1,100     $ 42,178    $ 543,936
earnings
Real estate        —            (22,565)     (101,044)   (33,832)    —           (157,441)
expense
Other expense      (1,625)      —            —           —           (6,425)     (8,050)
Allocated interest (74,377)     (80,034)     (49,114)    (30,368)    (32,332)    (266,225)
expense
Allocated general
and                (13,186)     (14,330)     (9,189)     (12,365)    (23,783)    (72,853)
administrative^(2)
Segment profit     $ 23,575     $ 38,212     $  73,407   $ (75,465)  $ (20,362)  $ 39,367
(loss)
(1) Includes revenue and real estate expense classified as income (loss) from discontinued
operations.
(2) Excludes $19,261 of stock-based compensation expense.
AS OF DECEMBER 31, 2013
                   Real Estate  Net          Operating               Corporate
                   Finance      Lease        Properties  Land        /           Total
                                                                     Other
Real estate
Real estate, at    $ —          $ 1,696,888  $  720,508  $ 803,238   $ —         $ 3,220,634
cost
Less: accumulated  —            (338,640)    (82,420)    (3,393)     —           (424,453)
depreciation
Real estate, net   $ —          $ 1,358,248  $  638,088  $ 799,845   $ —         $ 2,796,181
Real estate
available and      —            —            228,328     132,189     —           360,517
held for sale
Total real estate  $ —          $ 1,358,248  $  866,416  $ 932,034   $ —         $ 3,156,698
Loans receivable
and other          1,370,109    —            —           —           —           1,370,109
lending
investments, net
Other investments  —            16,408       16,032      29,765      145,004     207,209
Total portfolio    $ 1,370,109  $ 1,374,656  $  882,448  $ 961,799   $ 145,004   $ 4,734,016
assets
Cash and other                                                                   907,995
assets
 Total assets                                                                  $ 5,642,011





iStar Financial Inc.
Supplemental Information
(In thousands)
(unaudited)
                            Three Months Ended      Twelve Months Ended
                            December 31,            December 31,
                            2013        2012        2013         2012
ADJUSTED INCOME
Reconciliation of Net
Income to Adjusted Income
Net income (loss) allocable $ (57,934)  $ (87,424)  $ (155,769)  $ (272,997)
to common shareholders
Add: Depreciation and       17,871      19,581      72,439       70,786
amortization
Add: Provision for loan     97          20,875      5,489        81,740
losses
Add: Impairment of assets   7,172       6,292       14,353       36,354
Add: Loss on transfer of
interest to unconsolidated  7,373       —           7,373        —
subsidiary
Add: Stock-based            4,777       3,668       19,261       15,293
compensation expense
Add: Loss on early          2,887       16,021      19,655       22,405
extinguishment of debt
Less: HPU/Participating     (1,301)     (2,180)     (4,478)      (7,428)
Security allocation
Adjusted income (loss)
allocable to common         $ (19,058)  $ (23,167)  $ (21,677)   $ (53,847)
shareholders^(1)

(1) Adjusted Income (loss) allocable to common shareholders should be examined
in conjunction with net income (loss) as shown in the Consolidated Statements
of Operations. This non-GAAP financial measure should not be considered as an
alternative to net income (determined in accordance with GAAP) as an indicator
of the Company's performance, or to cash flows from operating activities
(determined in accordance with GAAP) as a measure of the Company's liquidity,
nor is it indicative of funds available to fund the Company's cash needs or
available for distribution to shareholders. It should be noted that the
Company's manner of calculating this non-GAAP financial measure may differ
from the calculations of similarly-titled measures by other companies.
Management believes that it is useful to consider Adjusted Income because the
adjustments are non-cash items that do not necessarily reflect an actual
change in the long-term economic value or performance of our assets.
Management considers this non-GAAP financial measure as supplemental
information to net income in analyzing the performance of our underlying
business. Depreciation and amortization and impairment of assets exclude
adjustments from discontinued operations of $6 and $844, respectively, for the
three months ended December31, 2013 and $187 and $1,147, respectively, for
the three months ended December31, 2012. Depreciation and amortization and
impairment of assets exclude adjustments from discontinued operations of $264
and $1,764, respectively, for the twelve months ended December31, 2013 and
$2,016 and $22,576, respectively, for the twelve months ended December31,
2012. Depreciation and amortization includes our proportionate share of
depreciation and amortization expense relating to equity method investments
and excludes the portion of depreciation and amortization expense allocable to
non-controlling interests.





iStar Financial Inc.
Supplemental Information
(In thousands)
(unaudited)
                                                           Twelve Months Ended
                                                           December 31, 2013
OPERATING STATISTICS
Expense Ratio
General and administrative expenses (A)                    $     92,114
Average total assets (B)                                   $     5,925,290
Expense Ratio (A) / (B)                                    1.6%
                                                           As of
                                                           December 31, 2013
Leverage
Book debt                                                  $     4,158,125
Less: Cash and cash equivalents                            (513,568)
Net book debt (C)                                          $     3,644,557
Book equity                                                $     1,301,465
Add: Accumulated depreciation and amortization             473,863
Add: General loan loss reserves                            29,200
Sum of book equity, accumulated depreciation and general   $     1,804,528
loan loss reserves (D)
Leverage (C) / (D)                                         2.0x
UNENCUMBERED ASSETS / UNSECURED DEBT
Unencumbered assets (E)^(1)                                $     3,276,836
Unsecured debt (F)                                         $     2,106,890
Unencumbered Assets / Unsecured Debt (E) / (F)             1.6x

(1) Unencumbered assets are calculated in accordance with the indentures
governing the Company's unsecured debt securities.





iStar Financial Inc.

Supplemental Information

(In thousands)

(unaudited)
                                                             As of
                                                             December31, 2013
UNFUNDED COMMITMENTS
Performance-based commitments                                $  72,600
Strategic investments                                        46,591
Total Unfunded Commitments                                   $  119,191
LOAN RECEIVABLE CREDIT STATISTICS         As of
                                          December31, 2013  December31, 2012
Carrying value of NPLs /
As a percentage of total carrying value   $  203,604  16.6%  $  503,112  27.5%
of loans
Impaired loan asset-specific reserves for
loan losses
As a percentage of gross carrying value
of impaired                               $  348,004  46.3%  $  491,399  42.6%
loans^(1)
Total reserve for loan losses /
As a percentage of total gross carrying   $  377,204  23.5%  $  524,499  22.3%
value of loans^(1)

(1) Gross carrying value represents iStar's carrying value of loans, gross of
loan loss reserves.





iStar Financial Inc.
Supplemental Information
(In millions)
(unaudited)
PORTFOLIO STATISTICS AS OF DECEMBER 31, 2013^(1)
                  Real                Operating                   % of
Property Type     Estate   Net Lease  Properties  Land   Total
                  Finance                                         Total
Land              $ 153    $  —       $    —      $ 965  $ 1,118  21.6%
Office            10       485        294         —      789      15.2%
Industrial / R&D  96       550        52          —      698      13.5%
Entertainment /   77       475        —           —      552      10.7%
Leisure
Hotel             246      136        97          —      479      9.2%
Mixed Use /       237      —          169         —      406      7.8%
Mixed Collateral
Retail            209      57         130         —      396      7.6%
Condominium       108      —          223         —      331      6.4%
Other Property    263      10         —           —      273      5.2%
Types
Strategic         —        —          —           —      146      2.8%
Investments
Total             $ 1,399  $  1,713   $    965    $ 965  $ 5,188  100.0%
                  Real                Operating                   % of
Geography         Estate   Net Lease  Properties  Land   Total    Total
                  Finance
Northeast         $ 392    $  374     $    153    $ 193  $ 1,112  21.4%
West              142      427        190         352    1,111    21.4%
Southeast         264      237        230         86     817      15.8%
Mid-Atlantic      160      194        158         183    695      13.4%
Southwest         172      221        180         122    695      13.4%
Central           87       103        47          10     247      4.8%
Northwest         50       81         7           19     157      3.0%
International     122      —          —           —      122      2.3%
Various           10       76         —           —      86       1.7%
Strategic         —        —          —           —      146      2.8%
Investments
Total             $ 1,399  $  1,713   $    965    $ 965  $ 5,188  100.0%

(1) Based on carrying value of the Company's total investment portfolio, gross
of accumulated depreciation and general loan loss reserves.



SOURCE iStar Financial Inc.

Website: http://www.istarfinancial.com
Contact: David M. DiStaso, Chief Financial Officer or Jason Fooks, Investor
Relations, both of iStar Financial Inc., (212) 930-9400,
investors@istarfinancial.com
 
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