iStar Annual Report 2001

FY2001 Annual Report · iStar
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iStar Financial 2001 Annual Report

 
 
 
Total Shareholder Returns in 2001

+ 39%

Dividends Paid

Increased to $2.45 per share

Adjusted Earnings per Share

Increased to $2.88

Return on Equity

Increased to 18.1%

Cumulative Business with Repeat Customers

Increased to $2.0 billion

Equity Research Coverage

Banc of America Securities (new)  –  BankBoston Robertson Stephens
Bear Stearns  –  Lehman Brothers (new)  –  Merrill Lynch (new)
Salomon Smith Barney (new)  –  UBS (new)  –  Wells Fargo Securities

Corporate Credit Ratings

Upgraded by Moody’s Investors Service and Standard & Poor’s

Liquidity

Raised over $2.0 billion in capital

iStar Financial 2001 Performance

moving higher

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01
performance
summary

9.

iStar Financial’s industry-leading results have positioned
the Company to deliver exceptional service to its
customers and strong performance for its investors 
in the years ahead.

 
 
 
 
corporate overview
Additional information on iStar Financial is available on the Company’s Web site at www.istarfinancial.com

iStar Financial is the premier publicly-traded finance company focused on the commercial real estate industry. The 
Company provides structured financing to private and corporate owners of real estate nationwide, including senior and 
junior mortgage debt, corporate mezzanine and subordinated capital, and corporate net lease financing. The Company 
targets  customers  who  require  a  knowledgeable  provider  of  capital  that  is  capable  of  originating  flexible  financial 
products and adding value in the form of specific lending expertise, flexibility, certainty and post-closing support.  

iStar Financial is the largest dedicated participant in a $100-$150 billion niche of the $2.1 trillion commercial 
real  estate  market,  consisting  of  the  $1.5  trillion  commercial  mortgage  market  and  the  $600  billion  single-user 
market for corporate office and industrial facilities. The Company’s primary product lines include structured 
finance, portfolio finance, corporate tenant leasing, corporate finance and loan acquisition.

10.

The Company was founded in 1993 
through private investment funds 
formed to take advantage of the lack 
of well-capitalized lenders capable of 
servicing the needs of high-end 
customers in its markets. During its 
eight-year history, iStar Financial has 
structured or originated over $5.5 
billion of financing commitments. In 
that time, the Company has provided 
$2.0 billion in financing to customers 
who have sought its expertise more 
than once.

2001 

return on average equity1

q1  17.3%
q2  17.5%
q3  17.9%
q4  18.2%

return on average assets2 

q1  7.0%
q2  7.2%
q3  7.2%
q4  6.9%

adjusted earnings per share3

q1  $0.71
q2  $0.72
q3  $0.73
q4  $0.73

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performance
summary

11.

financial highlights
(in thousands, except per share amounts)
(unaudited) 

interest income
operating lease income
interest expense
operating costs

net investment income

adjusted earnings allocable to common shareholders4
adjusted earnings per common share
dividends per common share

loans and other lending investments, net
corporate tenant lease assets, net
total assets
debt obligations
total liabilities
total shareholders’ equity

for the year ended December 31,

2001

2000

1999

$ 254,119 
 201,257 
 (170,121)
 (12,800)

$ 268,011 
 185,956 
 (173,891)
 (12,809)

$ 209,848 
42,186 
 (91,184)
 (2,246)

$272,455 

$267,267 

$158,604 

$255,132 
$2.88 
$2.45 

$230,688 
$2.67 
$2.40 

$2,377,763 
 1,841,800 
 4,378,560 
 2,495,369 
 2,588,132 
 1,787,778 

$2,225,183 
 1,670,169 
 4,034,775 
 2,131,967 
 2,240,666 
 1,787,885 

$127,798 
$2.07 
$1.86 
as of December 31,
$2,003,506 
 1,714,284 
 3,813,552 
 1,901,204 
 2,009,644 
 1,801,343 

1 return on average equity is defined as the sum of annualized adjusted earnings divided by the average book value of equity outstanding during the quarter.
2 return on average assets is defined as the sum of annualized quarterly adjusted earnings and preferred dividends divided by the average book value of 
  assets outstanding during the quarter.
3 per diluted share.
4 adjusted earnings represents GAAP net income before depreciation and amortization and, for 1999, excludes the non-recurring, non-cash charge 
  associated with the Company’s acquisition of its former external advisor (for a further discussion of our adjusted earnings, see Part 03 – The Numbers).

 
 
 
 
 
 
 
 
 
 
chairman’s letter(cid:1)

2001 was another very strong year for iStar Financial. We delivered 
exceptional  results  for  our  shareholders  during  a  period  of  great 
turmoil  in  the  economy  and  for  our  nation.  Despite  the  tragic 
events  of  September  11th,  the  rapid  deterioration  in  the  economy 
and  a  weakening  credit  cycle,  our  Company  continued  to  generate 
high  returns  for  its  shareholders  while  maintaining  very  favorable 
asset and credit quality. This year, we again established iStar Financial 
as the premier provider of creative capital solutions for sophisticated 
private and corporate owners of commercial real estate.

While our strong stock price gains and increased dividends were the 
most  visible  signs  of  our  success,  we  also  reached  many  important 
milestones during the past year. As you saw in the opening section of 
this  report,  iStar  Financial  showed  positive,  upward  momentum  in 
almost every key measure of our business.

2001 total shareholder returns(cid:1)
-

iStar Financial

+39.3%

-5.4%

Dow Jones Industrial Average

-11.9%

S&P 500 Index

-20.8%

NASDAQ

-14.1%

-12.1%

Russell 1000 Financial Services

Wilshire 5000

0.0%

Our adjusted earnings grew to $255 million, a record 
for  our  Company.  Our  return  on  equity  reached 
18.1%,  also  a  record.  Generating  over  $1.1  billion  in 
new transactions, we continued to deliver highly- 
structured financing solutions tailored to the specific 
needs  of  our  customers,  who  require  the  unique 
combination  of  expertise,  reliability  and  flexibility 
that iStar Financial can best deliver.

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part [

02
Chairman’s
Letter

13.

growing returns on equity(cid:1)
-

20.0%(cid:1)

16.0%(cid:1)

12.0%

18.1%

16.3%

14.9%

-
-

1999

-
-

2000

-
-

2001

(cid:1)
(cid:1)
(cid:1)
(cid:1)
 
 
 
 
chairman’s letter (continued)(cid:1)

By delivering creative capital solutions to our customers and actually adding 

retailing  and  entertainment  venues.  Looking  to  expand  its  market-leading 

value for them in the financing process, we were able to continue to produce 

position,  Mills  had  been  seeking  a  capital  source  that  could  provide 

strong  rates  of  return  while  maintaining  our  focus  on  protecting  and   

corporate funding tailored to their very specialized needs. Working closely 

preserving our capital. We continue to have one of the lowest loss ratios in 

with  Mills’  senior  management,  iStar  Financial  crafted  its  investment  to 

the entire financial sector, one of the highest returns on equity for companies 

provide  Mills  with  both  certainty  of  execution  as  well  as  highly  flexible 

in  the  commercial  finance  sector,  and  a  leverage  ratio  significantly  below 

funding  provisions.  By  year  end,  Mills  had  completed  one  of  its  most 

many other commercial finance companies. The high level of expertise we 

successful years ever. 

developed  over  the  last  decade,  combined  with  a  deep  and  talented 

management  team,  enables  us  to  continue  to  meet  the  challenges  our 

We  also  continued  our  role  as  a  leading  provider  of  capital  to  corporate 

customers  face  with  innovative,  often  state-of-the-art  financial  solutions 

America  through  our  corporate  tenant  leasing  division.  One  of  our  most 

that help unlock value.

significant  investments  involved  six  state-of-the-art,  mission-critical 

distribution  facilities  owned  by  Goodyear  Tire  and  Rubber  Company 

Two  examples  from  the  past  year  highlight  how  iStar  Financial’s  creative 

(NYSE: GT). With over $14 billion in revenues last year, Goodyear is the 

and flexible capital can help customers capture the full value of their assets. 

world leader in its industry, and is ranked #136 on the Fortune 500 list of 

Early in the year, we provided $75 million in term preferred capital to Mills 

America’s largest corporations. Working closely with the company and its 

Corporation  (NYSE:  MLS),  a  leader  in  regional  malls  combining  value 

advisors,  iStar  Financial  solved  a  number  of  challenges  to  help  Goodyear 

industry-leading loan loss ratio (realized loan losses/loan receivables)(cid:1)
-

0.0%

0.0%

0.0%

-
-

1999

-
-

2000

-
-

2001

iStar Financial

comparably lower leverage (debt to tangible book equity at 12/31/01)

7.0x(cid:1)

6.0x(cid:1)

5.0x(cid:1)

4.0x(cid:1)

3.0x(cid:1)

2.0x(cid:1)

1.0x

6.2x

1.4x

-

iStar Financial

-

Average Commercial Finance(cid:1)
Company 1

1 Average for the latest publicly-available financial information for the following companies:(cid:1)
   CIT Group as of December 31, 2001, and GATX Financial, Heller Financial and Textron Financial as of September 30, 2001.

(cid:1)
(cid:1)
(cid:1)
meet  its  corporate  goals  for  maximizing  liquidity  and  securing  long-term 

leases on its key real estate facilities. This $140 million portfolio of newly-

built  distribution  centers  handles  approximately  50%  of  Goodyear’s  core 

retail  tire  business  in  the  United  States,  and  is  now  fully  leased  to 

Goodyear  for  a  20-year  term  on  a  triple-net,  bondable  basis.  For  iStar 

Financial, our unique ability to meet the customer’s particular structuring 

requirements and to close this investment with a high degree of certainty 

created  an  exceptional  long-term  investment  and  a  core  holding  in  our 

corporate tenant leasing business.    

By having in-house experts in the capital markets, real estate markets and 

corporate  credit  markets,  we  can  efficiently  deliver  creative  capital 

solutions  to  a  wide  range  of  customers  with  a  level  of  service,  custom-

tailoring and flexibility unmatched by other capital providers.

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part [

02
Chairman’s
Letter

82%(cid:1)
Public Companies +(cid:1)
Subsidiaries of Public Companies

60%(cid:1)
Investment Grade(cid:1)
(Actual + Implied)

15.

corporate(cid:1)
tenant leasing(cid:1)
customers

corporate(cid:1)
tenant credit(cid:1)
ratings

18%(cid:1)
Private(cid:1)
Companies

26%(cid:1)
Non-Rated

14%(cid:1)
Non-Investment(cid:1)
Grade

 
 
 
 
chairman’s letter (continued)(cid:1)

In addition to our continued investment success, 2001 was a year in which 

fundamentally  improve  how  we  do  business  –  speeding  up  our 

we made great strides in informing others of the depth and strength of our 

responsiveness  to  customers,  freeing  up  hundreds  of  hours  of  precious 

business  model,  asset  base  and  balance  sheet.  Under  the  direction  of  our 

manpower and allowing us to better safeguard the proprietary nature of the 

President, Spencer Haber, our capital markets and finance team completed 

many  financing  innovations  we  have  developed.  Our  capital  strength,  our 

an impressive year in which they raised over $2 billion of debt and equity 

increased diversification, our continued focus on risk management, and our 

capital.  Tapping  the  corporate  bond  market  for  the  first  time  in  August, 

solid track record even without an investment-grade rating, should all help 

iStar  Financial  completed  a  $350  million  unsecured  bond  offering  that 

us to achieve this important step in the next 12 to 18 months.   

provided  increased  liquidity  and  helped  introduce  a  wide  range  of 

investment-grade  bondholders  to  our  Company.  Later  in  the  year,  we 

So, while we are pleased to have performed very well in 2001, our focus now 

completed  a  $442  million  secondary  offering  of  common  equity  that 

is  on  2002  and  the  favorable  investment  environment  currently  in  place. 

increased our float and added five leading financial services equity research 

We  believe  private  and  corporate  borrowers  will  be  increasingly  attracted 

analysts  to  our  coverage  universe.  In  addition,  our  finance  team  also 

to tapping iStar Financial’s unique value-added capabilities, as they realize 

secured  over  $1  billion  in  new  secured  and  unsecured  credit  lines  that 

how  rewarding  it  is  to  work  with  a  capital  provider  that  counts  integrity, 

remain mostly untapped and ready to be deployed in 2002.

creativity, flexibility and customer service as its core strengths.  

One  of  our  most  important  goals  for  2002  is  continuing  to  position  our 

On  behalf  of  all  of  iStar  Financial’s  employees,  thank  you  for  your   

Company for an investment-grade credit rating. The benefits of an upgrade 

continued support.

go  well  beyond  simply  reducing  our  cost  of  capital.  This  outcome  will 

Jay Sugarman, Chairman and Chief Executive Officer

$300 million new (cid:1)
(cid:2) unsecured credit facility

$350 million(cid:1)
unsecured bond offering

$700 million new (cid:1)
(cid:2) secured credit facility

$193 million secured(cid:1)
(cid:2) debt transaction

$442 million(cid:1)
(cid:2) secondary equity offering

liquidity timeline

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec 

q1  2001

q2  2001

q3  2001

q4 2001

the numbers

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part [ 03 ]

17.

18 Selected Financial Data
20 Management’s Discussion and

Analysis of Financial Condition
and Results of Operations

33 Consolidated Balance Sheets 
34 Consolidated Statements of Operations
35 Consolidated Statements of Cash Flows
36 Consolidated Statements of Changes in 

30 Quantitative and Qualitative Disclosures 

Shareholders’ Equity 

About Market Risk

32 Report of Independent Accountants

38 Notes to Consolidated Financial Statements
60 Common Stock Price and Dividends

 
 
 
 
SELECTED FINANCIAL DATA

The  following  table  sets  forth  selected  ﬁnancial  data  on  a  consolidated  historical  basis  for  the  Company.
However,  prior  to  March 1998,  as  discussed  more  fully  in  Note  1  to  the  Company’s  Consolidated  Financial
Statements (the “Recapitalization Transactions”), the Company did not have substantial operations or capital
resources. Prior to the Recapitalization Transactions, the Company’s structured ﬁnance operations were con-
ducted by two private investment partnerships which contributed substantially all their structured ﬁnance assets
to the Company in the Recapitalization Transactions in exchange for cash and shares of the Company. 

Further, on November 4, 1999, as more fully discussed in Note 4 to the Company’s Consolidated Financial
Statements,  the  Company  acquired TriNet,  which  increased  the  size  of  the  Company’s  operations,  and  also
acquired its external advisor. Operating results for the year ended December 31, 1999 reﬂect only the effects of
these transactions subsequent to their consummation. 

Accordingly,  the  historical  balance  sheet  information  as  of  and  prior  to  December  31,  1998,  as  well  as  the
results of operations for the Company for all periods prior to and including the year ended December 31, 1999, do
not reﬂect the current operations of the Company as a well capitalized, internally-managed ﬁnance company
operating in the commercial real estate industry. For these reasons, the Company believes that the information
contained in the following tables relating to the 1997 period is not indicative of the Company’s current business
and should be read in conjunction with the discussions set forth in “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.” 

Operating Data:
Interest income
Operating lease income
Other income

Total revenue

Interest expense
Operating costs – corporate tenant lease assets
Depreciation and amortization
General and administrative
Provision for loan losses
Stock-based compensation expense
Advisory fees
Costs incurred in acquiring external advisor(1)

2001

$254,119
201,257
28,800

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

484,176

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

170,121
12,800
35,642
24,151
7,000
3,575
–
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

For the Year Ended December 31,
1999

1998

2000

1997

(In thousands, except per share data)

$268,011
185,956
17,855

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

471,822

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

173,891
12,809
34,514
25,706
6,500
2,864
–
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$209,848
42,186
12,763

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

264,797

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

91,184
2,246
10,340
6,269
4,750
412
16,193
94,476

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$112,914
12,378
2,804

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

128,096

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

44,697
_
4,287
2,583
2,750
5,985
7,837
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$

896
–
991

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

1,887

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

–
–
–
461
–
–
–
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Total expenses

253,289

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

256,284

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

225,870

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

68,139

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

461

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Income before minority interest, gain on sales of 
corporate tenant lease assets, extraordinary 
loss and cumulative effect of change in 
accounting principle

Minority interest in consolidated entities
Gain on sales of corporate tenant lease assets
Extraordinary loss on early extinguishment 

of debt

Cumulative effect of change in 
accounting principle(2)

Net income
Preferred dividend requirements

Net income allocable to common shareholders
Basic earnings per common share(3)
Diluted earnings per common share
Dividends declared per common share(4)

230,887
(218)
1,145

215,538
(195)
2,948

38,927
(41)
–

59,957
(54)
–

1,426
(1,415)
–

(1,620)

(705)

–

–

–

(282)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$229,912
(36,908)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$193,004
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.24
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.19
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.45
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

–

$217,586
(36,908)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$180,678
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.11
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.10
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.40
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

–

$ 38,886
(23,843)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 15,043
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
0.25
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
0.25
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
1.86
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

–

$ 59,903
(944)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 58,959
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
1.40
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
1.36
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
1.14
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

–

$

11
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$

11
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
$ 0.01
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
$ 0.00
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
$ 0.00
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Supplemental Data:
Dividends declared on preferred shares
Dividends declared on common shares
Adjusted earnings allocable to 
common shareholders(5)

$
Adjusted earnings per common share – basic
Adjusted earnings per common share – diluted $
Cash ﬂows from:

Operating activities
Investing activities
Financing activities

EBITDA
Ratio of EBITDA to interest expense(6)
Ratio of EBITDA to combined ﬁxed charges(7)
Weighted average common shares 

outstanding – basic(8)

Weighted average common shares 

outstanding – diluted(8)

Balance Sheet Data:
Loans and other lending investments, net
Corporate tenant lease assets, net
Total assets
Debt obligations
Minority interest in consolidated entities
Shareholders’ equity

Supplemental Data:
Total debt to shareholders’ equity

2001

$

36,578
213,089

255,132
2.94
2.88

$ 264,835
(321,100)
49,183
436,650
2.57x
2.10x

For the Year Ended December 31,
1999

1998

2000

(In thousands, except per share data)

$

$
$

36,576
205,477

230,688
2.69
2.67

$ 202,715
(176,652)
(37,719)
423,943
2.44x
2.01x

$

$
$

24,819
116,813

127,798
2.19
2.07

$ 

$
$

929
60,343

66,615
1.59
1.53

$ 119,625
(143,911)
48,584
140,251
1.54x
1.22x

$

54,915
(1,271,309)
1,226,208
116,778
2.44x
2.39x

86,349

85,441

57,749

41,607

88,234

86,151

60,393

43,460

$2,377,763
1,841,800
4,378,560
2,495,369
2,650
1,787,778

$2,225,183
1,670,169
4,034,775
2,131,967
6,224
1,787,885

$2,003,506
1,714,284
3,813,552
1,901,204
2,565
1,801,343

$  1,823,761
189,942
2,059,616
1,055,719
–
970,728

1997

$

–
–

11
$ 0.01
$ 0.00

$  1,271
(6,013)
4,924
–
–
–

1,258

2,562

$

–
–
13,441
–
5,175
6,351

1.4x

1.2x

1.1x

1.1x

–

Explanatory Notes:
(1) As more fully discussed in Note 4 to the Company’s Consolidated Financial Statements, this amount represents a non-recurring, non-cash charge of

approximately $94.5 million relating to the acquisition of the Company’s external advisor in November 1999. 

(2) Represents one-time effect of adoption of Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and

Hedging Activities” as of January 1, 2001. 

(3) Prior to November 1999, earnings per common share excludes 1% of net income allocable to the Company’s former class B shares. The former class B
shares were exchanged for Common Stock in connection with the acquisition of TriNet and other related transactions on November 4, 1999. As a
result, the Company now has a single class of Common Stock outstanding. 

(4) The Company generally declares common and preferred dividends in the month subsequent to the end of the quarter. 
(5) Adjusted earnings represents net income in accordance with generally accepted accounting principles (“GAAP”), before gains (losses) on sales of
corporate tenant lease assets, extraordinary items and cumulative effect of change in accounting principle, plus depreciation and amortization,
less preferred stock dividends, and after adjustments for unconsolidated partnerships and joint ventures and, for the year ended December 31, 1999,
exclude  the  non-recurring,  non-cash  cost  incurred  in  acquiring  the  Company’s  external  advisor  (see  Note  4  to  the  Company’s  Consolidated
Financial Statements). 

(6) The 1999 and 1998 EBITDA to interest expense ratios on a pro forma basis (see Note 4 to the Company’s Consolidated Financial Statements) would

have been 2.83x and 2.84x, respectively. 

(7) Combined  ﬁxed  charges  are  comprised  of  interest  expense,  capitalized  interest,  amortization  of  loan  costs  and  preferred  stock  dividend
requirements. The 1999 and 1998 EBITDA to combined ﬁxed charges ratios on a pro forma basis (see Note 4 to the Company’s Consolidated
Financial Statements) would have been 2.23x and 2.44x, respectively. 

(8) As adjusted for one-for-six reverse stock split effected by the Company on June 19, 1998.

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19.

 
 
 
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

The Company began its business in 1993 through private investment funds formed to take advantage of the
lack of well-capitalized lenders capable of servicing the needs of high-end customers in its markets. In March
1998,  the  Company’s  private  investment  funds  contributed  their  approximately  $1.1  billion  of  assets  to  the
Company’s predecessor, Starwood Financial Trust, in exchange for a controlling interest in that public company.
In November 1999, the Company acquired its leasing subsidiary, TriNet Corporate Realty Trust, Inc. (“TriNet” or
the “Leasing Subsidiary”), which was then the largest publicly-traded company specializing in the net leasing of
corporate o´ce and industrial facilities. Concurrent with the TriNet Acquisition, the Company also acquired its
external  advisor  in  exchange  for  shares  of  its  Common  Stock  and  converted  its  organizational  form  to  a
Maryland corporation. As part of the conversion to a Maryland corporation, the Company replaced its former
dual-class Common Stock structure with a single class of Common Stock. This single class of Common Stock
began trading on the New York Stock Exchange under the symbol “SFI” in November 1999. 

None of the Company’s investment assets were directly impacted by the terrorist attacks against the United
States  on  September 11,  2001. While  the  Company  believes  that  the  diversiﬁcation  of  its  portfolio,  its  strict
underwriting standards and its use of credit enhancement techniques represent an appropriate emphasis on risk
management, the Company cannot predict the effect that any future terrorist attack might have on the U.S.
economy and the Company’s business. 

Results of Operations
Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Interest income – Interest income decreased $13.9 million to $254.1 million for the 12 months ended December 31,
2001 from $268.0 million for the same period in 2000. Approximately $12.7 million of this decrease is the result 
of lower average LIBOR rates of 3.9% in 2001 compared to 6.4% in 2000 on the Company’s variable-rate lending
investments. This decrease was partially offset by $55.1 million of interest income on new originations or additional
fundings, net of $51.6 million from the repayment of loans and other lending investments, in addition to a decrease of
$1.5 million from income earned on cash and cash equivalents. 

Operating Lease Income – Operating lease income increased $15.3 million to $201.3 million for the 12 months
ended December 31, 2001 from $186.0 million for the same period in 2000. Of this increase, $11.8 million was
attributable to new corporate tenant lease assets and $6.0 million to additional operating lease income from
existing  corporate  tenant  lease  assets  owned  in  both  periods.  In  addition,  joint  venture  income  contributed
$4.6 million to the increase. These increases were partially offset by a $7.0 million decrease in operating lease
income resulting from asset dispositions made in 2000 and 2001. 

Other Income – Other income consists primarily of prepayment penalties and gains from the early repayment
of loans and other lending investments, ﬁnancial advisory and asset management fees, lease termination fees,
mortgage  servicing  fees,  loan  participation  payments  and  dividends  on  certain  investments.  During  the  year
ended December 31, 2001, other income included loan participation payments of $13.1 million (45.5% of other
income), prepayment penalties and gains on loan repayments of $13.0 million (45.1%) and ﬁnancial advisory, lease
termination, asset management and mortgage servicing fees of $5.3 million (18.4%). These amounts were par-
tially offset by a loss of $2.3 million from iStar Operating, the Company’s internal loan servicing business. 

Interest Expense – For the 12 months ended December 31, 2001, interest expense decreased by $3.8 million to
$170.1 million from $173.9 million for the same period in 2000. This decrease was primarily due to the lower
average LIBOR rates of 3.9% in 2001 compared to 6.4% in 2000 on the Company’s variable-rate debt obliga-
tions. This decrease was partially offset by the higher average borrowings on the Company’s credit facilities,
term  loans  and  unsecured  notes  and  $7.6  million  additional  amortization  of  deferred  ﬁnancing  costs  on  the
Company’s debt obligations in 2001 compared to the same period in 2000. 

Operating Costs – Corporate Tenant Lease Assets – For the 12 months ended December 31, 2001, operating costs
were substantially unchanged as compared to the same period in 2000. Such operating costs represent unreim-
bursed operating expenses associated with corporate tenant lease assets. 

Depreciation  and  Amortization –  Depreciation  and  amortization  increased  by  approximately  $1.1  million  to
$35.6 million for the 12 months ended December 31, 2001 from $34.5 million for the same period 2000. This
increase  is  primarily  the  result  of  additional  depreciation  from  new  corporate  tenant  lease  assets  and  from
improvements of existing corporate tenant lease assets that accounted for $1.3 and $1.0 million of the increase,
respectively. These increases were partially offset by corporate tenant lease dispositions that accounted for a
$1.1 million decrease. 

General and Administrative – For the 12 months ended December 31, 2001, general and administrative expenses
decreased by $1.5 million to $24.2 million, compared to $25.7 million for the same period in 2000. This decrease
is  primarily  the  result  of  a  reduction  in  o´ce  and  related  costs  and  professional  fees,  partially  offset  by  an
increase in personnel and related costs. 

Provision for Loan Losses – The Company’s charge for provision for loan losses increased to $7.0 million for the
12 months ended December 31, 2001 from $6.5 million for the same period in 2000 as a result of the continued
expansion of the Company’s lending operations as well as additional seasoning of its existing lending portfolio.
As more fully discussed in Note 5 to the Company’s Consolidated Financial Statements, the Company has not
realized any actual losses on any of its loan investments to date. However, the Company has considered it pru-
dent  to  establish  a  policy  of  providing  loan  portfolio  reserves  for  losses  which  may  be  realized  in  the  future.
Accordingly,  since  its  ﬁrst  full  quarter  operating  its  current  business  as  a  public  company  (the  quarter  ended
June 30,  1998),  management  has  reﬂected  quarterly  provisions  for  loan  losses  in  its  operating  results. The
Company plans to continue to recognize quarterly provisions until a stabilized reserve level is attained. 

Stock-Based  Compensation  Expense –  Stock-based  compensation  expense  increased  by  approximately

$711,000 as a result of charges relating to grants of stock options and restricted shares. 

Gain on Sale of Corporate Tenant Lease Assets – During 2001, the Company disposed of four corporate tenant

lease assets for total proceeds of $26.3 million and recognized net gains of $1.1 million. 

During 2000, the Company disposed of 14 corporate tenant lease assets, including six assets held in joint ven-

ture partnerships, for total proceeds of $256.7 million, and recognized net gains of $2.9 million. 

Extraordinary Loss on Early Extinguishment of Debt – During the 12 months ended December 31, 2001 and 2000,
the  Company  or  its  joint  ventures  prepaid  debt  obligations  of  $133.0  million  and  $24.5  million,  respectively.
These transactions resulted in an extraordinary loss on early extinguishment of debt resulting from prepayment
penalties  and  the  expense  associated  with  remaining  unamortized  deferred  ﬁnancing  costs  in  the  amount  of
$1.6 million and $705,000 for the 12 months ended December 31, 2001 and 2000, respectively. 

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Interest Income – Interest income increased to approximately $268.0 million for the year ended December 31,
2000  from  approximately  $209.8  million  for  the  same  period  in  1999. This  increase  is  a  result  of  the  interest
income  generated  by  $721.2  million  of  newly-originated  loan  investments  during  ﬁscal  2000  and  an  additional
$56.0 million funded under existing loan commitments. The increase was partially offset by a reduction in interest
earned as a result of approximately $584.5 million of principal repayments on the Company’s loan investments
during the year ended December 31, 2000. In addition, the increase was in part due to higher average interest rates
on the Company’s variable-rate loans and other lending investments. 

Operating  Lease  Income –  Operating  lease  income  increased  to  approximately  $186.0  million  for  the  year
ended  December  31,  2000  from  approximately  $42.2  million  for  the  same  period  in  1999. Approximately
$134.2 million of this increase is attributable to operating lease income generated from corporate tenant lease
assets acquired in the acquisition of TriNet, which were included in operations for the entire year in ﬁscal 2000
as compared to two months in 1999. In addition, approximately $5.4 million resulted from income generated by
$128.4 million of new corporate tenant lease assets. 

Other Income – Other income consists primarily of prepayment penalties and gains from the early repayment
of loans and other lending investments, ﬁnancial advisory and asset management fees, lease termination fees,
mortgage  servicing  fees,  loan  participation  payments  and  dividends  on  certain  investments.  During  the  year
ended  December  31,  2000,  other  income  included  prepayment  penalties  and  gains  on  loan  repayments  of
$10.5 million (or 58.8% of other income), $2.1 million (11.8%) in connection with a loan defeasance, loan partici-
pation payments of $1.9 million (10.6%), ﬁnancial advisory, asset management and mortgage servicing fees of
$2.6 million (14.6%) and lease termination fees of $770,000 (4.3%). 

Interest Expense – The Company’s interest expense increased by $82.7 million for the year ended December 31,
2000 over the same period in the prior year. Approximately $44.1 million of this increase is attributable to interest
expense incurred by the Leasing Subsidiary subsequent to its acquisition, which was included in operations for the
entire year in ﬁscal 2000 as compared to two months in 1999. In addition, the increase was in part due to higher
average aggregate borrowings by the Company on its credit facilities, other term loans and secured notes, the pro-
ceeds of which were used to fund additional investments. The increase was also attributable to higher average
interest rates on the Company’s variable-rate debt obligations. 

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21.

 
 
 
 
Operating Costs – Corporate Tenant Lease Assets – For the year ended December 31, 2000, operating costs asso-
ciated with corporate tenant lease assets increased by approximately $10.6 million to approximately $12.8 mil-
lion, net of recoveries from corporate tenants. Such operating costs represent unreimbursed operating expenses
associated with corporate tenant lease assets. This increase is primarily attributable to operating costs generated
from corporate tenant lease assets acquired in the acquisition of TriNet, which were included in operations for
the entire year in ﬁscal 2000 as compared to two months in 1999. 

Depreciation and Amortization – Depreciation and amortization increased by approximately $24.2 million to
$34.5  million  for  the  year  ended  December  31,  2000  over  the  same  period  in  the  prior  year. Approximately
$24.0 million of this increase is attributable to depreciation and amortization relating to the corporate tenant
lease assets acquired in the acquisition of TriNet, which were included in operations for the entire year in ﬁscal
2000 as compared to two months in 1999. 

General  and  Administrative – The Company’s general and administrative expenses during the year ended
December 31, 2000 increased by approximately $19.4 million to $25.7 million compared to the same period in 1999.
These increases were generally the result of the increased scope of the Company’s operations associated with the
acquisition of TriNet and the direct overhead costs associated with the Company’s former external advisor, which
were included in operations for the entire year in ﬁscal 2000 as compared to two months in 1999. 

Provision for Loan Losses – The Company’s charge for provision for loan losses increased to $6.5 million from
$4.8 million as a result of expanded lending operations as well as additional seasoning of the Company’s existing
lending portfolio. As more fully discussed in Note 5 to the Company’s Consolidated Financial Statements, the
Company has not realized any actual losses on any of its loan investments to date. However, the Company has con-
sidered it prudent to establish a policy of providing loan portfolio reserves for losses which may be realized in the
future. Accordingly, since its ﬁrst full quarter as a public company (the quarter ended June 30, 1998), management
has reﬂected quarterly provisions for loan losses in its operating results. The Company plans to continue to recog-
nize quarterly provisions until a stabilized reserve level is attained. 

Stock-Based Compensation Expense – Stock-based compensation expense increased by approximately $2.5 mil-
lion as a result of charges relating to grants of stock options to the Company’s employees, including amortization
of the deferred charge related to options granted to employees of the Company’s former external advisor subse-
quent to such personnel becoming direct employees of the Company as of November 4, 1999. 

Advisory Fees – There were no advisory fees during the year ended December 31, 2000 because, subsequent to
the acquisition of the Company’s former external advisor, the Company is now internally-managed. No further
advisory fees will be incurred. 

Costs Incurred in Acquiring External Advisor – As more fully discussed in Note 4 to the Company’s Consolidated
Financial Statements, included in ﬁscal 1999 costs and expenses is a non-recurring, non-cash charge of approxi-
mately $94.5 million relating to the acquisition of the Company’s former external advisor. 

Gain on Sale of Corporate Tenant Lease Assets – During the year ended 2000, the Company disposed of 14 cor-
porate tenant lease assets, including six assets held in joint venture partnerships, for a total of $256.7 million in
proceeds, and recognized net gains of $2.9 million. 

Extraordinary  Loss  on  Early  Extinguishment  of  Debt –  During the 12 months ended December 31, 2000, the
Company or its joint ventures prepaid debt obligations of $24.5 million. These transactions resulted in an extraordinary
loss on early extinguishment of debt resulting from prepayment penalties in the amount of $705,000. 

Adjusted Earnings

Adjusted earnings represents net income computed in accordance with GAAP, before gains (losses) on sales of
corporate tenant lease assets, extraordinary items and cumulative effect of change in accounting principle, plus
depreciation and amortization, less preferred stock dividends, and after adjustments for unconsolidated partner-
ships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures reﬂect the Company’s
share of adjusted earnings calculated on the same basis. 

The  Company  believes  that  to  facilitate  a  clear  understanding  of  the  historical  operating  results  of  the
Company, adjusted earnings should be examined in conjunction with net income as shown in the Consolidated
Statements of Operations. Adjusted earnings should not be considered as an alternative to net income (deter-
mined 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. 

2001

For the Year Ended December 31,
2000
(In thousands, except per share data) 
(Unaudited)

1999

Adjusted earnings:
Net income
Add: Depreciation
Add: Joint venture depreciation and amortization
Add: Amortization of deferred ﬁnancing costs
Less: Preferred dividends
Less: Gain on sales of corporate tenant lease assets
Add: Extraordinary loss – early extinguishment of debt
Add: Cumulative effect of change in accounting principle(1)
Less: Net income allocable to the former class B shares
Add: Cost incurred in acquiring external advisor

Adjusted earnings allocable to common shareholders:

Basic

Diluted

Adjusted earnings per common share:

Basic

Diluted

$229,912
35,642
4,044
20,720
(36,908)
(1,145)
1,620
282
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$217,586
34,514
3,662
13,140
(36,908)
(2,948)
705
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 38,886
11,016
365
6,121
(23,843)
– 
– 
– 
(826)
94,476

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$254,167
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
$255,132
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$229,751
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
$230,688
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$126,195
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
$127,798
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2.94
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.88
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2.69
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.67
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2.19
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.07
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Explanatory Note:
(1) Represents one-time effect of adoption of Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and

Hedging Activities” as of January 1, 2001. 

Risk Management

Investment Modiﬁcations – On October 1, 2001, the Company substantially enhanced the value of its security
under a ground lease with a CTL customer located in San Jose, CA. As part of the transaction, the customer
posted an additional $15.0 million letter of credit as additional collateral for its lease obligation to the Company.
This increased the total letters of credit securing the customer’s lease obligation from $10.0 million to $25.0 mil-
lion.  In  addition,  the  customer  received  a  one-time  $3.0  million  reduction  to  its  operating  lease  payments
through September 30, 2002, and in return the Company received prepaid cash of $6.6 million for operating
lease payments for the same period. The prepaid lease payment together with the increased letters of credit are
su´cient to fully cover the customer’s lease payments to the Company until May 2005. For accounting purposes,
the one-time reduction will be recognized on a straight-line basis over the remaining lease term. The customer
remains current on all of its lease obligations to the Company. 

On October 1, 2001, the Company agreed to a six-month deferral of principal amortization on a $42.0 million
ﬁrst mortgage secured by a hotel property in New York, New York. This mortgage matures on April 30, 2005 and
bears interest at LIBOR + 4.50%. In addition to the interest coupon, the borrower is required to pay signiﬁcant
annual amortization, such that the borrower’s debt service constant is 11.33%. The Company granted the bor-
rower a one-time deferral of principal payments for a period of six months covering the fourth quarter of 2001
and the ﬁrst quarter of 2002. In return, the borrower was required to establish an additional debt service reserve
secured by a pledge of the partnership interests in two residential properties located in New York, New York. In
addition, the borrower is required to immediately repay the deferred amortization out of operating cash ﬂow, to
the extent available, commencing April 1, 2002. The borrower remains current on all of its debt service payments
to the Company, and the Company is currently comfortable that it has adequate collateral to support the book
value of the asset. 

Non-Accrual  Loans – The  Company  transfers  loans  to  non-accrual  status  at  such  time  as:  (1)  management
believes that the potential risk exists that scheduled debt service payments will not be met within the coming
12 months; (2) the loans become 90 days delinquent; (3) management determines the borrower is incapable of, or
ceased efforts toward, curing the cause of an impairment; or (4) the net realizable value of the loan’s underlying
collateral  approximates  the  Company’s  carrying  value  of  such  loan.  Interest  income  is  recognized  only  upon
actual cash receipt for loans on non-accrual status. As of December 31, 2001, the Company had two assets on
non-accrual status with an aggregate gross book value of $6.2 million, or 0.14% of the gross book value of the
Company’s investments. Each borrower remains current on all of its debt service payments to the Company, and
the Company is currently comfortable that it has adequate collateral to support the book values of the assets. 

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23.

 
 
 
 
One of the two non-accrual loans is a $4.3 million partnership loan on two shopping malls located in the suburbs
of Washington, D.C. This investment was part of a larger loan originally made by a´liates of Lazard Freres prior
to the Company’s acquisition of Lazard’s structured ﬁnance portfolio in 1998. The loan matures in September
2003 and bears interest at 12.00%. The Company received cash payments equal to the interest due on the loan
during the year ended December 31, 2001, and the borrower remains current on its obligations to the Company.
However, the Company anticipates that this loan will remain on non-accrual status for the foreseeable future. 

Additionally,  the  Company,  through  its  investment  in TriNet  Management  Operating  Company,  has  a
$2.0 million investment in debt securities that are convertible into shares of a real estate company which trades
on the Mexican Stock Exchange. This investment was made by TriNet prior to its acquisition by the Company in
1999. The securities bear interest at 12.00% per annum payable in arrears on December 4th of each year. The
Company received cash payments equal to the interest due on the investment for the year ended December 31,
2001, and the borrower remains current on its obligations to the Company. However, the Company anticipates
that this investment will remain on non-accrual status for the foreseeable future. 

Watch List Assets – The Company conducts a quarterly comprehensive credit review, resulting in an individual
risk rating being assigned to each asset. This review is designed to enable management to evaluate and proac-
tively manage asset-speciﬁc credit issues and identify credit trends on a portfolio-wide basis as an “early warning
system.” In addition to the three loans mentioned above under “Investment Modiﬁcations” and “Non-Accrual
Loans,” the Company has two CTL investments that are on its credit watch list. 

In November 2000, a customer occupying a headquarters o´ce facility owned by the Company ﬁled for pro-
tection under Chapter 11 of the U.S. Bankruptcy Code. Following the bankruptcy ﬁling, the customer a´rmed
the Company’s lease in bankruptcy and agreed to extend the Company’s lease for an additional ten years (with
escalating lease payments) through January 2023. Throughout this period, the customer remained current on its
lease payments to the Company and remains current through the date hereof. The customer reasonably expects
to emerge from bankruptcy prior to July 2002, although there can be no assurance that this will occur. The net
carrying value of this investment at December 31, 2001 was $41.1 million. 

In January 2002, a customer occupying o´ce facilities owned by the Company ﬁled a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code. The customer utilizes these facilities as the U.S.
headquarters for one of its major business lines. The customer recently moved approximately 150 of its employ-
ees from other area locations into the Company’s facilities, and continues to consolidate its space needs into the
Company’s facilities. In addition, the customer has invested approximately $3 million of its own capital in the
facilities. The customer remains current on its lease payments to the Company. The customer has not yet ﬁled
any motion to assume or reject the Company’s lease with the Bankruptcy Court. The net carrying value of this
investment at December 31, 2001 was $11.2 million. 

Liquidity and Capital Resources

The Company requires capital to fund its investment activities and operating expenses. The Company has
signiﬁcant access to capital resources to fund its existing business plan, which includes the expansion of its real
estate lending and corporate tenant leasing businesses. The Company’s capital sources include cash ﬂow from
operations, borrowings under lines of credit, additional term borrowings, long-term ﬁnancing secured by the
Company’s assets, unsecured ﬁnancing and the issuance of common, convertible and/or preferred equity securi-
ties. Further, the Company may acquire other businesses or assets using its capital stock, cash or a combina-
tion thereof. 

The distribution requirements under the REIT provisions of the Code limit the Company’s ability to retain
earnings  and  thereby  replenish  capital  committed  to  its  operations.  However,  the  Company  believes  that  its
signiﬁcant capital resources and access to ﬁnancing will provide it with ﬁnancial ﬂexibility and market respon-
siveness at levels su´cient to meet current and anticipated capital requirements, including expected new lending
and corporate tenant leasing transactions. 

The Company believes that its existing sources of funds will be adequate for purposes of meeting its short- and
long-term liquidity needs. The Company’s ability to meet its long-term (i.e., beyond one year) liquidity require-
ments is subject to obtaining additional debt and equity ﬁnancing. Any decision by the Company’s lenders and
investors to enter into such transactions with the Company will depend upon a number of factors, such as compli-
ance with the terms of its existing credit arrangements, the Company’s ﬁnancial performance, industry or market
trends,  the  general  availability  of  and  rates  applicable  to  ﬁnancing  transactions,  such  lenders’  and  investors’
resources and policies concerning the terms under which they make such capital commitments and the relative
attractiveness of alternative investment or lending opportunities. 

The following table outlines the timing of required principal payments related to the Company’s debt agree-

ments (in thousands):

Maximum
Amount
Available

Principal Payments Due By Period(1)

Total

Less Than
1 Year

2–3
Years

4–5
Years

6–10
Years

After 10
Years

Secured revolving credit facilities
Unsecured revolving credit facilities
Secured term loans
iStar Asset Receivables secured notes(2)
Unsecured notes
Other debt obligations

$1,900,000
300,000
N/A
N/A
N/A
N/A

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 900,546
– 
506,339
462,373
625,000
16,535

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$

– 
– 
16,986
41,250
– 
16,535

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$148,937 $ 751,609 $ 

– 
69,649
421,123
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
256,399
– 
50,000
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

–  $
– 
149,327
– 
350,000
– 

– 
– 
13,978
– 
225,000
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Total

$2,200,000
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,510,793
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$74,771
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$639,709 $1,058,008 $499,327 $238,978
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

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25.

Explanatory Notes:
(1) Assumes exercise of extensions to the extent such extensions are at the Company’s option. 
(2) Based on expected proceeds from principal payments received on loan assets collateralizing such notes. 

The Company has three LIBOR-based secured revolving credit facilities of $700.0 million, $700.0 million
and $500.0 million, respectively, which have ﬁnal maturities in ﬁscal years 2005, 2005 and 2003, respectively. The
ﬁnal  maturities  of  these  facilities  include  a  one-year  “term-out”  extension  at  the  Company’s  option. As  of
December  31,  2001,  the  Company  had  drawn  approximately  $312.3 million,  $439.3 million  and  $148.9  million
under these facilities, respectively. Availability under these facilities is based on collateral provided under a bor-
rowing  base  calculation. At  December  31,  2001,  the  Company  also  had  an  unsecured  credit  facility  totaling
$300.0 million which bears interest at LIBOR + 2.125% and matures in July 2004, including a one-year extension
at the Company’s option. At December 31, 2001, the Company had not drawn any amounts under this facility. 

Recent Financing Activities – On May 17, 2000, the Company closed the inaugural offering under its propri-
etary matched funding program, STARs, Series 2000-1. In the initial transaction, a wholly-owned subsidiary of
the Company issued $896.5 million of investment grade bonds secured by the subsidiary’s assets, which had an
aggregate outstanding principal balance of approximately $1.2 billion at inception. Principal payments received
on the assets will be utilized to repay the most senior class of the bonds then outstanding. The maturity of the
bonds match funds the maturity of the underlying assets ﬁnanced under the program. For accounting purposes,
this transaction was treated as a secured ﬁnancing. 

On January 11, 2001, the Company closed a new $700.0 million secured revolving credit facility which is led by
a major commercial bank. The new facility has a three-year primary term and one-year “term-out” extension
option, and bears interest at LIBOR plus 1.40% to 2.15%, depending upon the collateral contributed to the bor-
rowing  base. The  new  facility  accepts  a  broad  range  of  structured  ﬁnance  assets  and  has  a  ﬁnal  maturity  of
January 2005. 

On May 15, 2001, the Leasing Subsidiary repaid its $100.0 million 7.30% unsecured notes. 
On June 14, 2001, the Company closed $193.0 million of term loan ﬁnancing secured by 15 corporate tenant
lease assets. The variable-rate loan bears interest at LIBOR plus 1.85% (not to exceed 10.00%) and has two one-
year extensions at the Company’s option. The Company used these proceeds to repay a $77.8 million secured
term  loan  maturing  in  June  2001  and  to  pay  down  a  portion  of  its  revolving  credit  facilities.  In  addition,  the
Company extended the ﬁnal maturity of its $500.0 million secured revolving credit facility to August 12, 2003. 

On July 6, 2001, the Leasing Subsidiary ﬁnanced a $75.0 million structured ﬁnance asset with a $50.0 million
term loan bearing interest at LIBOR + 2.50%. The loan has a maturity of July 2006, including a one-year exten-
sion at the Leasing Subsidiary’s option. 

On July 27, 2001, the Company completed a $300.0 million unsecured revolving credit facility with a group of
leading ﬁnancial institutions. The new facility has an initial maturity of July 2003, with a one-year extension at
the Company’s option and another one-year extension at the lenders’ option. The new facility replaces two prior
credit facilities maturing in 2002 and 2003, and bears interest at LIBOR + 2.125%. 

On August 9, 2001, the Company issued $350.0 million of 8.75% senior notes due in 2008. The notes are unse-
cured senior obligations of the Company. The Company used the net proceeds to partially repay outstanding bor-
rowings under its secured credit facilities. 

 
 
 
 
Hedging Activities – Since January 1, 1999, the Company has entered into the following cash ﬂow hedges that

have expired or been settled prior to December 31, 2001 (in thousands): 

Type of Hedge

LIBOR Cap
Pay-Fixed Swap
LIBOR Cap
LIBOR Cap
LIBOR Cap

Notional 
Amount

Strike Price
or Swap Rate

$300,000
92,000
75,000
40,430
38,336

9.000%
5.714%
7.500%
7.500%
7.500%

Trade
Date

3/16/98
8/10/98
7/16/98
4/30/98
4/30/98

Maturity
Date

3/16/01
3/1/01
6/19/01
1/1/01
6/1/01

Since January 1, 1999, the Company has entered into the following cash ﬂow hedges that are outstanding as of
December 31, 2001. The net value (liability) associated with these hedges is reﬂected on the Company’s balance
sheet (in thousands). 

Type of Hedge

Pay-Fixed Swap
Pay-Fixed Swap
Pay-Fixed Swap
LIBOR Cap
LIBOR Cap

Total Estimated Asset (Liability) Value

Notional
Amount

Strike Price 
or Swap Rate

$125,000
125,000
75,000
75,000
35,000

7.058%
7.055%
5.580%
7.750%
7.750%

Trade
Date

6/15/00
6/15/00
11/4/99(1)
11/4/99(1)
11/4/99(1)

Maturity
Date

6/25/03
6/25/03
12/1/04
12/1/04
12/1/04

Estimated
Value at
December 31,
2001

$ (7,878)
(7,873)
(3,732)
388
170

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(18,925)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Explanatory Note:
(1) Acquired in connection with the TriNet Acquisition (see Note 4 to the Company’s Consolidated Financial Statements). 

In connection with the STARs, Series 2000-1 in May 2000, the Company entered into a LIBOR interest rate
cap struck at 10.00% in the notional amount of $312.0 million, and simultaneously sold a LIBOR interest rate
cap with the same terms. Since these instruments do not change the Company’s net interest rate risk exposure,
they do not qualify as hedges and changes in their respective values are charged to earnings. As the terms of these
arrangements are substantially the same, the effects of a revaluation of these two instruments substantially offset
one another. 

Certain  of  the  Company’s  CTL joint  ventures,  have  hedging  activities  which  are  more  fully  described  in

Note 6 to the Company’s Consolidated Financial Statements. 

Off-Balance Sheet Transactions – The Company is not dependent on the use of any off-balance sheet ﬁnancing
arrangements for liquidity. The Company has investments in ﬁve CTL joint ventures that are accounted for under
the equity method which have total debt obligations outstanding of approximately $258.4 million (see Note 6). The
Company’s pro-rata share of the ventures’ third-party debt is approximately $118.0 million. These ventures were
formed for the purpose of operating, acquiring and in certain cases, developing corporate tenant lease facilities.
These joint venture debt obligations are non-recourse to the ventures and the Company and mature between ﬁscal
years 2004 and 2011. They consist of six term loans bearing ﬁxed rates ranging from 6.55% to 8.43% and one variable-
rate term loan with a rate of LIBOR + 1.25%. 

Ratings Triggers – On July 27, 2001, the Company completed a $300.0 million unsecured revolving credit facility
with a group of leading ﬁnancial institutions. The new facility has an initial maturity of July 2003 with a one-year
extension at the Company’s option and another one-year extension at the lenders’ option. The new facility replaces
two prior credit facilities maturing in 2002 and 2003, and bears interest at LIBOR + 2.125% based on the Company’s
senior unsecured credit ratings of BB+ and Ba1 from Standard & Poor’s and Moody’s Investor Service, respectively. If
the Company achieves a higher rating, the facility’s interest rate will improve to LIBOR + 2.00%. If the Company’s
credit rating is downgraded (regardless of how far), the facility’s interest rate will increase to LIBOR + 2.25%. In the
event the Company receives two credit ratings that are not equivalent, the spread over LIBORshall be determined by
the lower of the two such ratings. As of December 31, 2001, no amounts have yet been drawn on this facility.
Accordingly, management does not believe any rating changes would have a material adverse impact on the
Company’s results of operations. There are no other ratings triggers in any of the Company’s debt instruments or
other operating or ﬁnancial agreements.

Transactions  with  Related  Parties – The  Company  has  an  investment  in  iStar  Operating  Inc.  (“iStar
Operating”),  a  taxable  subsidiary  that,  through  a  wholly-owned  subsidiary,  services  the  Company’s  loans  and
certain loan portfolios owned by third parties. The Company owns all of the non-voting preferred stock and a
95% economic interest in iStar Operating. An a´liate of the Company’s largest shareholder is the owner of all
the voting common stock and a 5% economic interest in iStar Operating. As of December 31, 2001, there have
never  been  any  distributions  to  the  common  shareholder,  nor  does  the  Company  expect  to  make  any  in  the

future. At any time, the Company has the right to acquire all of the common stock of iStar Operating at fair mar-
ket value, which the Company believes to be nominal. 

In addition, the Company has an investment in TriNet Management Operating Company, Inc. (“TMOC”), a
taxable noncontrolled subsidiary that has a $2.0 million investment in a real estate company based in Mexico.
The  Company  owns  95%  of  the  outstanding  voting  and  non-voting  common  stock  (representing  1%  voting
power and 95% of the economic interest) in TMOC. The other two owners of TMOC stock are executives of the
Company, who own a combined 5% of the outstanding voting and non-voting common stock (representing 99%
voting power and 5% economic interest) in TMOC. As of December 31, 2001, there have never been any distribu-
tions to the common shareholders, nor does the Company expect to make any in the future. At any time, the
Company has the right to acquire all of the common stock of TMOC at fair market value, which the Company
believes to be nominal. 

Both iStar Operating and TMOC were formed as taxable corporations for purposes of maintaining compliance
with REIT provisions of the Code and are accounted for under the equity method for ﬁnancial reporting pur-
poses. If they were consolidated with the Company for ﬁnancial statement purposes, they would have no material
impact on the Company’s operations. As of December 31, 2001, these corporations have no debt obligations. 

The Company entered into an employment agreement with its Chief Executive O´cer as of March 31, 2001.
In addition to the salary and bonus provisions of the agreement, the agreement provides for an award of two mil-
lion phantom units to the executive, each of which notionally represents one share of the Company’s Common
Stock.  Portions  of  these  phantom  units  will  vest  on  a  contingent  basis  if  the  average  closing  price  of  the
Company’s Common Stock achieves certain levels (ranging from $25.00 to $37.00 per share) for 60 consecutive
calendar days. Contingently vested units will become fully vested, meaning that they are no longer subject to for-
feiture, if the executive remains employed through March 30, 2004, or earlier upon certain change of control and
termination events. When and if contingently vested phantom units become fully vested units, the Company
must deliver to the executive either a number of shares of Common Stock equal to the number of fully vested
units or an amount of cash equal to the then fair market value of that number of shares of Common Stock. If
shares were unavailable under the Company’s then long-term incentive plans, this obligation could require the
Company to make a substantial cash payment to the executive. 

DRIP Program – The Company maintains a dividend reinvestment and direct stock purchase plan. Under the
dividend reinvestment component of the plan, the Company’s shareholders may purchase additional shares of
Common Stock without payment of brokerage commissions or service charges by automatically reinvesting all
or a portion of their Common Stock cash dividends. Under the direct stock purchase component of the plan, the
Company’s shareholders and new investors may purchase shares of Common Stock directly from the Company
without payment of brokerage commissions or service charges. All purchases of shares in excess of $10,000 per
month pursuant to the direct purchase component are at the Company’s sole discretion. Shares issued under the
plan may reﬂect a discount of up to a 3.0% from the prevailing market price of the Company’s Common Stock.
The Company is authorized to issue up to 8.0 million shares of Common Stock pursuant to the dividend rein-
vestment and direct stock purchase plan. In 2001, the Company issued a total of 195,078 shares of its Common
Stock through the direct stock purchase component of the plan for net proceeds of approximately $4.7 million.
Approximately $3.9 million of these proceeds were received in January 2002. 

Stock Repurchase Program – The Board of Directors approved, and the Company has implemented, a stock
repurchase program under which the Company is authorized to repurchase up to 5.0 million shares of its Common
Stock from time to time, primarily using proceeds from the disposition of assets or loan repayments and excess
cash ﬂow from operations, but also using borrowings under its credit facilities if the Company determines that it is
advantageous to do so. As of both December 31, 2001 and 2000, the Company had repurchased approximately
2.3 million shares at an aggregate cost of approximately $40.7 million. 

Critical Accounting Policies

The Company’s Consolidated Financial Statements include the accounts of the Company and all majority-
owned and controlled subsidiaries. The preparation of ﬁnancial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions in certain circumstances that affect
amounts reported in the accompanying consolidated ﬁnancial statements. In preparing these ﬁnancial statements,
management has made its best estimates and judgments of certain amounts included in the ﬁnancial statements, giv-
ing due consideration to materiality. The Company does not believe that there is a great likelihood that materially dif-
ferent amounts would be reported related to the accounting policies described below. However, application of these
accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a
result, actual results could differ from these estimates. 

Management has the obligation to ensure that its policies and methodologies are in accordance with GAAP.
During 2001, management reviewed and evaluated its critical accounting policies and believes them to be appro-
priate. The  Company’s  accounting  policies  are  described  in  Note  3  to  the  Company’s  Consolidated  Financial
Statements. Management believes the more signiﬁcant of these to be as follows: 

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Revenue Recognition – The most signiﬁcant sources of the Company’s revenue come from its lending opera-
tions and its corporate tenant lease operations. For its lending operations, the Company reﬂects income using
the effective yield method, which recognizes periodic income over the expected term of the investment on a
constant  yield  basis.  For  corporate  tenant  lease  assets,  the  Company  recognizes  income  on  the  straight-line
method, which effectively recognizes contractual lease payments to be received by the Company evenly over the
term of the lease. Management believes the Company’s revenue recognition policies are appropriate to reﬂect
the substance of the underlying transactions. 

Provision for Loan Losses – The Company’s accounting policies require that an allowance for estimated credit
losses be reﬂected in the ﬁnancial statements based upon an evaluation of known and inherent risks in its private
lending assets. While neither the Company nor its private predecessors have experienced any actual losses on
their lending investments, management considers it prudent to establish a policy to provide for potential losses
in the asset base that may be realized in the future. In establishing these allowances, management utilized avail-
able historical industry loss information applied to its assets consistent with its internal risk rating system. Actual
losses, if any, could ultimately differ from these estimates. 

Impairment of Long-Lived Assets – Corporate tenant lease assets represent “long-lived” assets for accounting
purposes. The Company periodically reviews long-lived assets to be held and used in its leasing operations for
impairment in value whenever any events or changes in circumstances indicate that the carrying amount of the
assets may not be recoverable. In management’s opinion, based on this analysis, corporate tenant assets to be held
and used are not carried at amounts in excess of their estimated recoverable amounts. 

Risk Management and Financial Instruments – The Company has historically utilized derivative ﬁnancial instru-
ments only as a means to help to manage its interest rate risk exposure on a portion of its variable-rate debt obli-
gations (i.e., as cash ﬂow hedges). The instruments utilized are generally either pay-ﬁxed swaps or LIBOR-based
interest  rate  caps  which  are  widely  used  in  the  industry  and  typically  with  major  ﬁnancial  institutions. The
Company’s accounting policies generally reﬂect these instruments at their fair value with unrealized changes in
fair value reﬂected in other comprehensive income. Realized effects on the Company’s cash ﬂows are generally
recognized currently in income. 

Income  Taxes – The  Company’s  ﬁnancial  results  generally  do  not  reﬂect  provisions  for  current  or  deferred
income taxes. Management believes that the Company has and intends to continue to operate in a manner that
will continue to allow it to be taxed as a REIT and, as a result, does not expect to pay substantial corporate-level
taxes. Many of these requirements, however, are highly technical and complex. If the Company were to fail to
meet these requirements, the Company would be subject to Federal income tax. 

Executive Compensation – The Company’s accounting policies generally provide cash compensation to be esti-
mated and recognized over the period of service. With respect to stock-based compensation arrangements, the
Company has elected to use APB 25 accounting, which measures the compensation charges based on the intrin-
sic value of such securities when they become ﬁxed and determinable, and recognizes such expense over the
related service period. These arrangements are often complex and generally structured to align the interests of
management with those of the Company’s shareholders. See Note 10 to the Company’s Consolidated Financial
Statements for a detailed discussion of such arrangements and the related accounting effects. 

During  2001,  the  Company  entered  into  new  three-year  employment  agreements  with  its  Chief  Executive
O´cer and its President. See Note 10 to the Company’s Consolidated Financial Statements for a more detailed
description of both employment agreements. 

The following are hypothetical illustrations of the effects on the Company’s net income and adjusted earnings
per share of the full vesting of phantom units and restricted shares under the employment agreements with Chief
Executive O´cer and the President. 

During the year ended December 31, 2001, 350,000 phantom shares awarded to the Chief Executive O´cer
became contingently vested. Absent an earlier change of control or termination of employment, these 350,000 shares
will not become fully vested until March 31, 2004. Assuming that the market price of the Common Stock on March 31,
2004 is $24.95 (which was the market price of the Common Stock on December 31, 2001), the Company would incur
a one-time charge to both net income and adjusted earnings at that time equal to $8.7 million (the fair market value of
the 350,000 shares at $24.95 per share). Assuming that there are 90.0 million diluted weighted average shares out-
standing on March 31, 2004, the effect of the one-time charge on diluted adjusted earnings per share would be
$0.0970 per share. 

The earliest that restricted shares awarded to the President can become fully vested is pursuant to a volun-
tary resignation after September 30, 2002, absent an earlier change of control or termination of employment.
Using October 1, 2002 and December 31, 2002 as hypothetical vesting dates, and assuming that: (1) the price of
the  Common  Stock  on  those  dates  is  $24.95  (which  was  the  market  price  of  the  Common  Stock  on
December 31,  2001),  and  (2)  a  Common  Stock  dividend  payment  rate  of  $0.63  per  share  per  quarter,  then
between 366,851 shares and 427,782 shares would become fully vested on October 1, 2002 and December 31,
2002, respectively. The Company would incur a one-time charge to both net income and adjusted earnings of
approximately  $9.2  million  (for  vesting  on  October  1,  2002),  or  approximately  $10.7 million  (for  vesting  on
December 31, 2002), in each case representing the fair market value of the shares on the date they become fully
vested. Assuming that there are 90.0 million diluted weighted average shares outstanding on both October 1,

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29.

2002 and December 31, 2002, the effect on the Company’s diluted adjusted earnings per share would be $0.1017
per share and $0.1186 per share, respectively. 

New Accounting Standards

In  June  1998,  the  FASB  issued  Statement  of  Financial Accounting  Standards  No.  133  (“SFAS  No.  133”),
“Accounting for Derivative Instruments and Hedging Activities.” On June 23, 1999, the FASB voted to defer the
effectiveness of SFAS No. 133 for one year. SFAS No. 133 is now effective for ﬁscal years beginning after June 15,
2000, but earlier application is permitted as of the beginning of any ﬁscal quarter subsequent to June 15, 1998.
SFAS No. 133 establishes accounting and reporting standards for derivative ﬁnancial instruments and hedging
activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of
ﬁnancial position and measure those instruments at fair value. If certain conditions are met, a derivative may be
speciﬁcally designated as: (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability
or an unrecognized ﬁrm commitment; (2) a hedge of the exposure to variable cash ﬂows of a forecasted transac-
tion; or (3) in certain circumstances a hedge of a foreign currency exposure. The Company adopted this pro-
nouncement, as amended by Statement of Financial Accounting Standards No. 137 “Accounting for Derivative
Instruments and Hedging Activities – deferral of the Effective Date of FASB Statement No. 133” and Statement
of  Financial Accounting  Standards  No.  138  “Accounting  for  Certain  Hedging Activities  –  an Amendment  of
FASB No. 133,” on January 1, 2001. Because the Company has primarily used derivatives as cash ﬂow hedges of
interest rate risk only, the adoption of SFAS No. 133 did not have a material ﬁnancial impact on the ﬁnancial
position and results of operations of the Company. However, should the Company change its current use of
such  derivatives  (see  Note  9),  the  adoption  of  SFAS  No.  133  could  have  a  more  signiﬁcant  effect  on  the
Company prospectively. 

In  December  1999,  the  Securities  and  Exchange  Commission  issued  Staff Accounting  Bulletin  No.  101
(“SAB 101”), “Revenue Recognition in Financial Statements.” In June 2000, the SEC staff amended SAB 101 to
provide registrants with additional time to implement SAB 101. The Company adopted SAB 101, as required, in
the fourth quarter of ﬁscal 2000. The adoption of SAB 101 did not have a material ﬁnancial impact on the ﬁnan-
cial position or results of operations of the Company. 

In March 2000, the FASB issued FASB Interpretation No. 44 (“FIN 44”), “Accounting for Certain Transactions
Involving Stock Compensation.” The Company was required to adopt FIN 44 effective July 1, 2000 with respect to cer-
tain provisions applicable to new awards, exchanges of awards in a business combination, modiﬁcations to outstanding
awards, and changes in grantee status that occur on or after that date. FIN 44 addresses practice issues related to the
application of Accounting Practice Bulletin Opinion No. 25, “Accounting for Stock Issued to Employees.” The initial
adoption of FIN 44 did not have a signiﬁcant impact on the Company. 

In September 2000, the FASB issued Statement of Financial Accounting Standards No. 140 (“SFAS No. 140”),
“Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” This statement is
applicable for transfers of assets and extinguishments of liabilities occurring after March 31, 2001. The Company
adopted the provisions of this statement as required for all transactions entered into on or after April 1, 2001. The
adoption of SFAS No. 140 did not have a signiﬁcant impact on the Company. 

In July 2001, the SEC released Staff Accounting Bulletin No. 102 (“SAB 102”), “Selected Loan Loss Allowance
and Documentation Issues.” SAB 102 summarizes certain of the SEC’s views on the development, documenta-
tion and application of a systematic methodology for determining allowances for loan and lease losses. Adoption
of SAB 102 by the Company did not have a signiﬁcant impact on the Company. 

In  July  2001,  the  FASB  issued  Statement  of  Financial Accounting  Standards  No.  141  (“SFAS  No.  141”),
“Business Combinations” and Statement of Financial Accounting Standards No. 142 (“SFAS No. 142”), “Goodwill
and Other Intangible Assets.” SFAS No. 141 requires the purchase method of accounting to be used for all busi-
ness combinations initiated after June 30, 2001. SFAS No. 141 also addresses the initial recognition and measure-
ment of goodwill and other intangible assets acquired in business combinations and requires intangible assets to
be  recognized  apart  from  goodwill  if  certain  tests  are  met. The  Company  does  not  believe  the  adoption  of
SFAS No.  141  will  have  a  signiﬁcant  effect  on  the  Company’s  ﬁnancial  position  or  results  of  operations.
SFAS No. 142 requires that goodwill not be amortized but instead be measured for impairment at least annually,
or when events indicate that there may be an impairment. SFAS No. 142 is effective for ﬁscal years beginning
after December 15, 2001. Early application is permitted for companies with ﬁscal years beginning after March 15,
2001. The Company will adopt the provisions of this statement, as required, on January 1, 2002 and it does not
believe the adoption of SFAS No. 142 will have a signiﬁcant impact on the Company. 

In October 2001, the FASB issued Statement of Financial Accounting Standards No. 144 (“SFAS No. 144”),
“Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 provides new guidance on the
recognition of impairment losses on long-lived assets to be held and used or to be disposed of and also broadens
the deﬁnition of what constitutes a discontinued operation and how the results of a discontinued operation are to
be measured and presented. The Company is currently evaluating this statement to assess its impact on the ﬁnan-
cial statements. The provisions of SFAS No. 144 are effective for ﬁnancial statements issued for ﬁscal years begin-
ning after December 15, 2001, and must be applied at the beginning of a ﬁscal year. The Company will adopt the
provisions  of  this  statement  on  January  1,  2002,  as  required. The  Company  does  not  believe  the  adoption  of
SFAS No. 144 will have a signiﬁcant impact on the Company. 

 
 
 
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risks

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates,
commodity  prices  and  equity  prices.  In  pursuing  its  business  plan,  the  primary  market  risk  to  which  the
Company is exposed is interest rate risk. Consistent with its liability management objectives, the Company has
implemented an interest rate risk management policy based on match funding, with the objective that variable-
rate assets be primarily ﬁnanced by variable-rate liabilities and ﬁxed-rate assets be primarily ﬁnanced by ﬁxed-
rate liabilities. 

The  Company’s  operating  results  will  depend  in  part  on  the  difference  between  the  interest  and  related
income earned on its assets and the interest expense incurred in connection with its interest-bearing liabilities.
Competition from other providers of real estate ﬁnancing may lead to a decrease in the interest rate earned on
the Company’s interest-bearing assets, which the Company may not be able to offset by obtaining lower interest
costs  on  its  borrowings.  Changes  in  the  general  level  of  interest  rates  prevailing  in  the  ﬁnancial markets may
affect the spread between the Company’s interest-earning assets and interest-bearing liabilities. Any signiﬁcant
compression of the spreads between interest-earning assets and interest-bearing liabilities could have a material
adverse effect on the Company. In addition, an increase in interest rates could, among other things, reduce the
value of the Company’s interest-bearing assets and its ability to realize gains from the sale of such assets, and a
decrease in interest rates could reduce the average life of the Company’s interest-earning assets. 

A substantial portion of the Company’s loan investments are subject to signiﬁcant prepayment protection in
the form of lock-outs, yield maintenance provisions or other prepayment premiums which provide substantial
yield protection to the Company. Those assets generally not subject to prepayment penalties include: (1) variable-
rate loans based on LIBOR, originated or acquired at par, which would not result in any gain or loss upon repay-
ment; and (2) discount loans and loan participations acquired at discounts to face values, which would result in
gains upon repayment. Further, while the Company generally seeks to enter into loan investments which provide
for substantial prepayment protection, in the event of declining interest rates, the Company could receive such
prepayments and may not be able to reinvest such proceeds at favorable returns. Such prepayments could have
an adverse effect on the spreads between interest-earning assets and interest-bearing liabilities. 

While the Company has not experienced any signiﬁcant credit losses, in the event of a signiﬁcant rising interest
rate environment and/or economic downturn, defaults could increase and result in credit losses to the Company
which adversely affect its liquidity and operating results. Further, such delinquencies or defaults could have an
adverse effect on the spreads between interest-earning assets and interest-bearing liabilities. 

Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domes-
tic and international economic and political conditions, and other factors beyond the control of the Company.
As more fully discussed in Note 9 to the Company’s Consolidated Financial Statements, the Company employs
match funding-based hedging strategies to limit the effects of changes in interest rates on its operations, includ-
ing  engaging  in  interest  rate  caps,  ﬂoors,  swaps,  futures  and  other  interest  rate-related  derivative  contracts.
These strategies are speciﬁcally designed to reduce the Company’s exposure, on speciﬁc transactions or on a
portfolio basis, to changes in cash ﬂows as a result of interest rate movements in the market. The Company does
not enter into derivative contracts for speculative purposes nor as a hedge against changes in credit risk of its
borrowers or of the Company itself. 

Each  interest  rate  cap  or  ﬂoor  agreement  is  a  legal  contract  between  the  Company  and  a  third  party  (the
“counterparty”). When the Company purchases a cap or ﬂoor contract, the Company makes an up-front pay-
ment to the counterparty and the counterparty agrees to make payments to the Company in the future should
the reference rate (typically one- or three-month LIBOR) rise above (cap agreements) or fall below (ﬂoor agree-
ments) the “strike” rate speciﬁed in the contract. Each contract has a notional face amount. Should the reference
rate rise above the contractual strike rate in a cap, the Company will earn cap income. Should the reference rate
fall below the contractual strike rate in a ﬂoor, the Company will earn ﬂoor income. Payments on an annualized
basis will equal the contractual notional face amount multiplied by the difference between the actual reference
rate and the contracted strike rate. The cost of the up-front payment is amortized over the term of the contract
and is included in “Interest expense” on the Company’s Consolidated Statements of Operations. 

Interest rate swaps are agreements in which a series of interest rate ﬂows are exchanged over a prescribed
period. The notional amount on which swaps are based is not exchanged. In general, the Company’s swaps are
“pay  ﬁxed”  swaps  involving  the  exchange  of  variable-rate  interest  payments  from  the  counterparty  for  ﬁxed
interest payments from the Company. 

Interest rate futures are contracts, generally settled in cash, in which the seller agrees to deliver on a speciﬁed
future date the cash equivalent of the difference between the speciﬁed price or yield indicated in the contract
and  the  value  of  the  speciﬁed  instrument  (e.g.,  U.S. Treasury  securities)  upon  settlement.  Under  these  agree-
ments, the Company would generally receive additional cash ﬂow at settlement if interest rates rise and pay cash
if interest rates fall. The effects of such receipts or payments would be deferred and amortized over the term of
the speciﬁc related ﬁxed-rate borrowings. In the event that, in the opinion of management, it is no longer proba-
ble  that  a  forecasted  transaction  will  occur  under  terms  substantially  equivalent  to  those  projected,  the
Company would cease recognizing such transactions as hedges and immediately recognize related gains or losses
based on actual settlement or estimated settlement value. 

While a REIT may freely utilize the types of derivative instruments discussed above to hedge interest rate
risk on its liabilities, the use of derivatives for other purposes, including hedging asset-related risks such as credit,
prepayment or interest rate exposure on the Company’s loan assets, could generate income which is not qualiﬁed
income  for  purposes  of  maintaining  REIT status. As  a  consequence,  the  Company  may  only  engage  in  such
instruments to hedge such risks on a limited basis. 

There can be no assurance that the Company’s proﬁtability will not be adversely affected during any period as a
result of changing interest rates. In addition, hedging transactions using derivative instruments involve certain
additional risks such as counterparty credit risk, legal enforceability of hedging contracts and the risk that unantic-
ipated and signiﬁcant changes in interest rates will cause a signiﬁcant loss of basis in the contract. With regard to
loss of basis in a hedging contract, indices upon which contracts are based may be more or less variable than the
indices upon which the hedged assets or liabilities are based, thereby making the hedge less effective. The counter-
parties  to  these  contractual  arrangements  are  major  ﬁnancial  institutions  with  which  the  Company  and  its
a´liates  may  also  have  other  ﬁnancial  relationships. The  Company  is  potentially  exposed  to  credit  loss  in  the
event of nonperformance by these counterparties. However, because of their high credit ratings, the Company
does not anticipate that any of the counterparties will fail to meet their obligations. There can be no assurance that
the Company will be able to adequately protect against the foregoing risks and that the Company will ultimately
realize an economic beneﬁt from any hedging contract it enters into which exceeds the related costs incurred in
connection with engaging in such hedges.

The following table quantiﬁes the potential changes in net investment income and net fair value of ﬁnancial
instruments should interest rates increase or decrease 100 or 200 basis points, assuming no change in the shape of
the yield curve (i.e., relative interest rates). Net investment income is calculated as revenue from loans and other
lending investments and operating leases, less related interest expense and operating costs on corporate tenant lease
assets, for the year ended December 31, 2001. Net fair value of ﬁnancial instruments is calculated as the sum of the
value of derivative instruments and the present value of cash in-ﬂows generated from interest-earning assets, less
cash out-ﬂows in respect of interest-bearing liabilities as of December 31, 2001. The cash ﬂows associated with the
Company’s assets are calculated based on management’s best estimate of expected payments for each loan based on
loan characteristics such as loan-to-value ratio, interest rate, credit history, prepayment penalty, term and collateral
type. Most of the Company’s loans are protected from prepayment as a result of prepayment penalties and contrac-
tual terms which prohibit prepayments during speciﬁed periods. However, for those loans where prepayments are
not currently precluded by contract, declines in interest rates may increase prepayment speeds. The base interest
rate scenario assumes interest rates as of December 31, 2001. Actual results could differ signiﬁcantly from those
estimated in the table. 

Change in Interest Rates:

–200 Basis Points
–100 Basis Points
Base Interest Rate
+100 Basis Points
+200 Basis Points

Estimated Percentage Change In

Net Investment 
Income

Net Fair Value of

Financial Instruments(1)

1.23%
0.61%
0.00%
(0.61)%
(1.23)%

(17.16)%
(8.20)%
0.00%
7.76%
18.91%

Explanatory Note:
(1) Amounts exclude fair values of non-ﬁnancial investments, primarily CTL assets and certain forms of corporate ﬁnance investments. 

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REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders
of iStar Financial Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of opera-
tions, of changes in shareholders’ equity and of cash flows present fairly, in all material respects, the ﬁnancial
position of iStar Financial Inc. and its subsidiaries (the “Company”) at December 31, 2001 and 2000, and the
results of their operations and their cash ﬂows for each of the three years in the period ended December 31, 2001
in conformity with accounting principles generally accepted in the United States of America. These ﬁnancial
statements are the responsibility of the Company’s management; our responsibility is to express an opinion on
these ﬁnancial statements based on our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the ﬁnancial statements are free of material misstate-
ment. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ﬁnan-
cial statements, assessing the accounting principles used and signiﬁcant estimates made by management, and
evaluating the overall ﬁnancial statement presentation. We believe that our audits provide a reasonable basis for
our opinion. 

PricewaterhouseCoopers LLP
New York, NY
March 1, 2002

CONSOLIDATED BALANCE SHEETS

Assets
Loans and other lending investments, net
Corporate tenant lease assets, net
Cash and cash equivalents
Restricted cash
Accrued interest and operating lease income receivable
Deferred operating lease income receivable
Deferred expenses and other assets

Total assets

Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable, accrued expenses and other liabilities
Dividends payable
Debt obligations

Total liabilities

Commitments and contingencies
Minority interest in consolidated entities
Shareholders’ equity:
Series A Preferred Stock, $0.001 par value, liquidation preference $50.00 per share, 

4,400 shares issued and outstanding at December 31, 2001 and December 31, 2000

Series B Preferred Stock, $0.001 par value, liquidation preference $25.00 per share, 

2,000 shares issued and outstanding at December 31, 2001 and December 31, 2000

Series C Preferred Stock, $0.001 par value, liquidation preference $25.00 per share, 

1,300 shares issued and outstanding at December 31, 2001 and December 31, 2000

Series D Preferred Stock, $0.001 par value, liquidation preference $25.00 per share, 

4,000 shares issued and outstanding at December 31, 2001 and December 31, 2000

Common Stock, $0.001 par value, 200,000 shares authorized, 87,387 and 85,726 shares issued and 

outstanding at December 31, 2001 and December 31, 2000, respectively

Warrants and options
Additional paid-in capital
Retained earnings (deﬁcit)
Accumulated other comprehensive income (losses) (See Note 12)
Treasury stock (at cost)

Total shareholders’ equity

Total liabilities and shareholders’ equity

* Reclassiﬁed to conform to 2001 presentation. 

The accompanying notes are an integral part of the ﬁnancial statements.

As of December 31,

2001

2000*

(In thousands, 
except per share data) 

$2,377,763
1,841,800
15,670
17,852
26,688
21,195
77,592

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,225,183
1,670,169
22,752
20,441
20,167
10,236
65,827

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$4,378,560
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$4,034,775
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$

87,538
5,225
2,495,369

$

52,038
56,661
2,131,967

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2,588,132

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2,240,666

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

–
2,650

–
6,224

4

2

1

4

4

2

1

4

87
20,456
1,997,931
(174,874)
(15,092)
(40,741)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

85
16,943
1,966,396
(154,789)
(20)
(40,741)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

1,787,778

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

1,787,885

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$4,378,560
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$4,034,775
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

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part [ 03 ]

33.

 
 
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS

Revenue:
Interest income
Operating lease income
Other income

Total revenue

Costs and expenses:
Interest expense
Operating costs – corporate tenant lease assets
Depreciation and amortization
General and administrative
Provision for loan losses
Stock-based compensation expense
Advisory fees
Costs incurred in acquiring external advisor

Total costs and expenses

Net income before minority interest, gain on sales of corporate tenant 
lease assets, extraordinary loss and cumulative effect of change in 
accounting principle

Minority interest in consolidated entities
Gain on sales of corporate tenant lease assets

Net income before extraordinary loss and cumulative effect of 

change in accounting principle

Extraordinary loss on early extinguishment of debt
Cumulative effect of change in accounting principle (See Note 3)

Net income
Preferred dividend requirements

Net income allocable to common shareholders

Basic earnings per common share

Diluted earnings per common share

2001

For the Year Ended December 31,
2000*
(In thousands, except per share data)

1999*

$254,119
201,257
28,800

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

484,176

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

170,121
12,800
35,642
24,151
7,000
3,575
–
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$268,011
185,956
17,855

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

471,822

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

173,891
12,809
34,514
25,706
6,500
2,864
–
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$209,848
42,186
12,763

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

264,797

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

91,184
2,246
10,340
6,269
4,750
412
16,193
94,476

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

253,289

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

256,284

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

225,870

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

230,887
(218)
1,145

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

231,814
(1,620)
(282)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$229,912
(36,908)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$193,004
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.24
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.19
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

215,538
(195)
2,948

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

218,291
(705)
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$217,586
(36,908)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$180,678
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.11
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
2.10
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

38,927
(41)
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

38,886
–
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 38,886
(23,843)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 15,043
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

0.25(1)
0.25(1)

Explanatory Note:
* Reclassiﬁed to conform to 2001 presentation. 
(1) Net income per basic common share excludes 1% of net income allocable to the Company’s class B shares prior to November 4, 1999. These shares
were exchanged for Common Stock in connection with the TriNet Acquisition and related transactions on November 4, 1999. As a result, the
Company now has a single class of Common Stock outstanding. 

The accompanying notes are an integral part of the ﬁnancial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash ﬂows from operating activities:
Net income
Adjustments to reconcile net income to cash ﬂows provided by operating activities:

$  229,912

$  217,586

$ 38,886

2001

For the Year Ended December 31,
2000*
(In thousands)

1999*

Minority interest in consolidated entities
Non-cash expense for stock-based compensation
Non-cash expense for Advisor Transaction
Depreciation and amortization
Amortization of discounts/premiums and deferred interest and 

costs on lending investments

Equity in earnings of unconsolidated joint ventures and subsidiaries
Distributions from operating joint ventures
Deferred operating lease income receivable
Realized (gains)/losses on sale of securities
Gain on sales of corporate tenant lease assets
Extraordinary loss on early extinguishment of debt
Cumulative effect of change in accounting principle
Provision for loan losses
Changes in assets and liabilities:

Decrease (increase) in accrued interest and operating lease income receivable
Decrease (increase) in deferred expenses and other assets
Increase (decrease) in accounts payable, accrued expenses and other liabilities
Cash ﬂows provided by operating activities

Cash ﬂows from investing activities:

New investment originations/acquisitions
Add-on fundings on existing loan commitments
Net cash outﬂow for TriNet Acquisition (Note 3)
Net proceeds from sales of corporate tenant lease assets
Investment in iStar Operating Inc.
Proceeds from sale of investment securities
Repayments of and principal collections on loans and other lending investments
Investments in and advances to unconsolidated joint ventures
Distributions from unconsolidated joint ventures
Capital expenditures for build-to-suit activities
Capital improvement projects on corporate tenant lease assets
Other capital expenditures on corporate tenant lease assets

Cash ﬂows used in investing activities

Cash ﬂows from ﬁnancing activities:

Net borrowings (repayments) under revolving credit facilities
Borrowings under term loans
Repayments under term loans
Borrowings under unsecured bond offerings
Repayments under unsecured notes
Borrowings under repurchase agreements
Repayments under repurchase agreements
Borrowings under secured bond offerings
Repayments under secured bond offerings
Common dividends paid
Preferred dividends paid
Decrease (increase) in restricted cash held in connection with debt obligations
Distributions to minority interest in consolidated entities
Extraordinary loss on early extinguishment of debt
Payment for deferred ﬁnancing costs
Purchase of treasury stock
Proceeds from exercise of options and issuance of DRIP shares

Cash ﬂows provided by (used in) ﬁnancing activities

Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Supplemental disclosure of cash ﬂow information:

218
3,575
–
56,044

(41,067)
(7,358)
4,802
(10,923)
–
(1,145)
1,620
282
7,000

195
2,864
– 
47,402

(27,059)
(4,753)
4,511
(9,130)
233
(2,948)
705
– 
6,500

41
412
94,476
15,932

(25,493)
(234)
470
(1,597)
(11)
– 
– 
– 
4,750

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

3,822
568
17,485
264,835

(921,081)
(99,626)
– 
26,306
– 
–
676,021
(1,601)
24,265
(14,266)
(6,629)
(4,489)
(321,100)

(3,761)
(27,928)
(1,702)
202,715

(845,597)
(56,039)
– 
146,265
(3,443)
30
584,452
(24,047)
34,759
(5,022)
(6,831)
(1,179)
(176,652)

(3,089)
(1,212)
(3,706)
119,625

(640,757)
(45,916)
(23,723)
– 
– 
– 
520,768
(377)
47,365
– 
– 
(1,271)
(143,911)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

134,746
277,664
(120,333)
350,000
(100,000)
279
(56,008)
– 
(125,962)
(264,527)
(36,578)
2,590
(3,794)
(1,037)
(30,382)
– 
22,525
49,183
(7,082)
22,752
$ 15,670
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(183,837)
90,000
(300,799)
– 
– 
65,067
(31,564)
863,254
(274,919)
(202,397)
(36,576)
(10,246)
(164)
(317)
(21,048)
(302)
6,129
(37,719)
(11,656)
34,408
$ 22,752
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

168,592
39,234
(150)
– 
– 
– 
(7,331)
– 
– 
(90,076)
(20,524)
2,924
– 
– 
(4,593)
(40,439)
947
48,584
24,298
10,110
$ 34,408
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Cash paid during the period for interest, net of amount capitalized

$  141,271
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$  141,632
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 85,458
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

* Reclassiﬁed to conform to 2001 presentation.

The accompanying notes are an integral part of the ﬁnancial statements.

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part [ 03 ]

35.

 
 
 
 
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands)

Balance at January 1, 1999*
Exercise of options
Dividends declared – preferred
Dividends declared – common
Effects of Incorporation Merger
Acquisition of TriNet
Issuance of shares of Common Stock through conversion of 

joint venture partners interest

Advisor Transaction
Special stock dividend
Purchase of treasury stock
Net income for the period
Change in accumulated other comprehensive income

Balance at December 31, 1999
Exercise of options
Dividends declared – preferred
Dividends declared – common
Acquisition of ACRE Partners
Restricted stock units issued to employees in lieu of 

cash bonuses

Restricted stock units granted to employees
Issuance of stock – DRIP plan
Purchase of treasury stock
Net income for the period
Change in accumulated other comprehensive income

Balance at December 31, 2000
Exercise of options
Dividends declared – preferred
Dividends declared – common
Acquisition of ACRE Partners
Restricted stock units issued to employees in lieu of 

cash bonuses

Restricted stock units granted to employees
Options granted to employees
Issuance of stock – DRIP plan
Net income for the period
Cumulative effect of change in accounting principle
Change in accumulated other comprehensive income

Series A
Preferred
Stock

Series B
Preferred
Stock

Series C
Preferred
Stock

Series D
Preferred
Stock

Common
Stock
at Par

$  44
– 
– 
– 
(40)
– 

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$    4
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$    4
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ – 
– 
– 
– 
– 
2

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 2
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 2
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ – 
– 
– 
– 
– 
1

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 1
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 1
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ – 
– 
– 
– 
– 
4

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 4
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 4
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$   – 
– 
– 
– 
53
29

– 
4
1
(2)
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 85
– 
– 
– 
– 

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 85
2
– 
– 
– 

– 
– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Balance at December 31, 2001

$    4
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 2
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 1
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 4
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 87
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

* Reclassiﬁed to conform to 2001 presentation.

The accompanying notes are an integral part of the ﬁnancial statements.

Common Stock at Par

Class A

Class B

Warrants
and
Options

Additional
Paid-In
Capital

Retained
Earnings
(Deficit)

Accumulated
Other
Comprehensive
Income (Losses)

Treasury
Stock

Total

$ 52,408
63
– 
– 
(52,471)
– 

$ 262
– 
– 
– 
(262)
– 

$18,904
(969)
– 
– 
– 
– 

$ 901,592
1,853
330
– 
52,720
868,933

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

6,226
97,862
24,456
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$              – 
– 
– 
– 
– 

$      – 
– 
– 
– 
– 

$17,935
(992)
– 
– 
– 

$1,953,972
7,089
330
– 
3,637

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

1,125
212
31
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$              – 
– 
– 
– 
– 

$      – 
– 
– 
– 
– 

$16,943
(835)
– 
– 
– 

$1,966,396
22,550
330
– 
1,219

– 
– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
– 
4,348
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

1,478
1,250
– 
4,708
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ (2,459)
– 
(25,149)
(116,813)
– 
– 

– 
– 
(24,457)
– 
38,886
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(129,992)
– 
(36,906)
(205,477)
– 

– 
– 
– 
– 
217,586
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(154,789)
– 
(36,908)
(213,089)
– 

– 
– 
– 
– 
229,912
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$

(23)
– 
– 
– 
– 
– 

– 
– 
– 
– 
– 
(206)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$

(229)
– 
– 
– 
– 

– 
– 
– 
– 

$ 

– 
– 
– 
– 
– 
– 

– 
– 
– 
(40,439)
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(40,439)
– 
– 
– 
– 

– 
– 
– 
(302)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

209

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 

$

(20)
– 
– 
– 
– 

$(40,741)
– 
– 
– 
– 

– 
– 
– 
– 
– 
(9,445)
(5,627)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
– 
– 
– 
– 
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 970,728
947
(24,819)
(116,813)
– 
868,969

6,226
97,866
– 
(40,441)
38,886
(206)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$1,801,343
6,097
(36,576)
(205,477)
3,637

1,125
212
31
(302)
217,586
209

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$1,787,885
21,717
(36,578)
(213,089)
1,219

1,478
1,250
4,348
4,708
229,912
(9,445)
(5,627)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$              – 
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$      – 
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$20,456
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$1,997,931
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(174,874)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(15,092)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(40,741)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$1,787,778
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

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part [ 03 ]

37.

 
 
 
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Business and Organization.

Business – iStar Financial Inc. (the “Company”) is the leading publicly traded ﬁnance company focused on the
commercial real estate industry. The Company provides structured ﬁnancing to private and corporate owners of real
estate nationwide, including senior and junior mortgage debt, corporate mezzanine and subordinated capital, and
corporate net lease ﬁnancing. The Company seeks to deliver superior risk-adjusted returns on equity for sharehold-
ers by providing innovative and value-added ﬁnancing solutions to its customers. 

The Company has implemented its investment strategy by: (1) focusing on the origination of large, highly struc-
tured mortgage, corporate and lease ﬁnancings where customers require ﬂexible ﬁnancial solutions, and avoiding
commodity businesses in which there is signiﬁcant direct competition from other providers of capital; (2) develop-
ing direct relationships with borrowers and corporate tenants as opposed to sourcing transactions through inter-
mediaries; (3) adding value beyond simply providing capital by offering borrowers and corporate tenants speciﬁc
lending expertise, ﬂexibility, certainty and continuing relationships beyond the closing of a particular ﬁnancing
transaction; and (4) taking advantage of market anomalies in the real estate ﬁnancing markets when the Company
believes credit is mispriced by other providers of capital, such as the spread between lease yields and the yields on
corporate tenants’ underlying credit obligations. 

The Company intends to continue to emphasize a mix of portfolio ﬁnancing transactions to create built-in

diversiﬁcation and single-asset ﬁnancings for properties with strong, long-term competitive market positions. 

Organization – The Company began its business in 1993 through private investment funds formed to capitalize
on ine´ciencies in the real estate ﬁnance market. In March 1998, these funds contributed their approximately
$1.1 billion of assets to the Company’s predecessor, Starwood Financial Trust, in exchange for a controlling inter-
est in that company (collectively, the “Recapitalization Transactions”). Since that time, the Company has grown
by originating new lending and leasing transactions, as well as through corporate acquisitions. Speciﬁcally, in
September 1998, the Company acquired the loan origination and servicing business of a major insurance com-
pany, and in December 1998, the Company acquired the mortgage and mezzanine loan portfolio of its largest pri-
vate competitor. Additionally, in November 1999, the Company acquired TriNet Corporate Realty Trust, Inc.
(“TriNet” or the “Leasing Subsidiary”), which was then the largest publicly traded company specializing in the
net leasing of corporate o´ce and industrial facilities (the “TriNet Acquisition”). The TriNet Acquisition was
structured as a stock-for-stock merger of TriNet with a subsidiary of the Company. Concurrent with the TriNet
Acquisition, the Company also acquired its external advisor (the “Advisor Transaction”) in exchange for shares of
common stock of the Company (“Common Stock”) and converted its organizational form to a Maryland corpo-
ration  (the  “Incorporation  Merger”). As  part  of  the  conversion  to  a  Maryland  corporation,  the  Company
replaced its former dual class common share structure with a single class of Common Stock. The Company’s
Common Stock began trading on the New York Stock Exchange under the symbol “SFI” in November 1999. 
The Company was eligible and elected to be taxed as a REIT for the taxable years beginning January 1, 1998. 

Note 2 – Basis of Presentation

The accompanying audited Consolidated Financial Statements have been prepared in conformity with gener-
ally  accepted  accounting  principles  (“GAAP”)  for  complete  ﬁnancial  statements. The  Consolidated  Financial
Statements include the accounts of the Company, its qualiﬁed REIT subsidiaries, and its majority-owned and
controlled partnerships. 

The  Company  has  an  investment  in  iStar  Operating  Inc.  (“iStar  Operating”),  a  taxable  subsidiary  that,
through a wholly-owned subsidiary, services the Company’s loans and certain loan portfolios owned by third par-
ties. The Company owns all of the non-voting preferred stock and a 95% economic interest in iStar Operating.
An a´liate of the Company’s largest shareholder is the owner of all the voting common stock and a 5% economic
interest in iStar Operating. As of December 31, 2001, there have never been any distributions to the common
shareholder, nor does the Company expect to make any in the future. At any time, the Company has the right to
acquire all of the common stock of iStar Operating at fair market value, which the Company believes to be nom-
inal. In addition to the direct general and administrative costs of iStar Operating, the Company allocates a por-
tion of its general overhead expenses to iStar Operating based on the number of employees at iStar Operating as
a percentage of the Company’s total employees. The Company funds losses incurred by iStar Operating. 

In addition, the Company has an investment in TriNet Management Operating Company, Inc. (“TMOC”), a
taxable noncontrolled subsidiary that has a $2.0 million investment in a real estate company based in Mexico.
The  Company  owns  95%  of  the  outstanding  voting  and  non-voting  common  stock  (representing  1%  voting
power and 95% of the economic interest) in TMOC. The other two owners of TMOC stock are executives of the
Company, who own a combined 5% of the outstanding voting and non-voting common stock (representing 99%
voting power and 5% economic interest) in TMOC. As of December 31, 2001 there have never been any distribu-
tions to the common shareholders, nor does the Company expect to make any in the future. At any time, the
Company has the right to acquire all of the common stock of TMOC at fair market value, which the Company
believes to be nominal. 

Both iStar Operating and TMOC were formed as taxable corporations for purposes of maintaining compliance
with REIT provisions of the Code and are accounted for under the equity method for ﬁnancial reporting pur-
poses. If they were consolidated with the Company for ﬁnancial statement purposes, they would have no material
impact on the Company’s operations. As of December 31, 2001, these corporations have no debt obligations. 

Further, certain other investments in partnerships or joint ventures which the Company does not control are
also accounted for under the equity method. All signiﬁcant intercompany balances and transactions have been
eliminated in consolidation. 

Note 3 – Summary of Signiﬁcant Accounting Policies

Loans and Other Lending Investments, Net – As described in Note 5, “Loans and Other Lending Investments,”
includes the following investments: senior mortgages, subordinate mortgages, corporate/partnership loans and
other lending or similar investments. In general, management considers its investments in this category as held-
to-maturity and, accordingly, reﬂects such items at amortized historical cost. 

Corporate Tenant Lease Assets and Depreciation – Corporate tenant lease assets are generally recorded at cost
less accumulated depreciation. Certain improvements and replacements are capitalized when they extend the
useful life, increase capacity or improve the e´ciency of the asset. Repairs and maintenance items are expensed
as incurred. Depreciation is computed using the straight line method of cost recovery over estimated useful lives
of 40.0 years for buildings, ﬁve years for furniture and equipment, the shorter of the remaining lease term or
expected life for tenant improvements and the remaining life of the building for building improvements. 

Corporate tenant lease assets to be disposed of are reported at the lower of their carrying amount or fair value
less costs to sell. The Company also periodically reviews long-lived assets to be held and used for an impairment
in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not
be recoverable. In accordance with management’s opinion, corporate tenant lease assets to be held and used are
not carried at amounts in excess of their estimated recoverable amounts. 

Capitalized Interest – The Company capitalizes interest costs incurred during the land development or con-
struction period on qualiﬁed development projects, including investments in joint ventures accounted for under
the equity method. Interest capitalized was approximately $1.0 million and $513,000 during the 12-month peri-
ods ended December 31, 2001 and 2000, respectively. 

Cash and Cash Equivalents – Cash and cash equivalents include cash held in banks or invested in money market

funds with original maturity terms of less than 90 days. 

Restricted Cash – Restricted cash represents amounts required to be maintained in escrow under certain of the

Company’s debt obligations and leasing transactions. 

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part [ 03 ]

Non-Cash Activity – During 1999, the Company acquired TriNet (see Note 4). The following is a summary of

the effects of this transaction on the Company’s consolidated ﬁnancial position (in thousands): 

39.

Fair value of:

Assets acquired
Liabilities assumed
Minority interest
Stock issued

Cash paid
Less cash acquired

Net cash outﬂow for TriNet Acquisition

Acquisition of
TriNet

$(1,589,714)
676,936
2,524
875,195

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(35,059)
11,336

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(23,723)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$

There was no signiﬁcant non-cash activity during the years ended December 31, 2001 and 2000, other than

those items shown on the Company’s Consolidated Statements of Cash Flows. 

Revenue Recognition – The Company’s revenue recognition policies are as follows: 
Loans and Other Lending Investments: The Company generally intends to hold all of its loans and other lend-
ing investments to maturity. Accordingly, it reﬂects all of these investments at amortized cost less allowance for
loan losses, acquisition premiums or discounts, deferred loan fees and undisbursed loan funds. On occasion, the
Company may acquire loans at either premiums or discounts based on the credit characteristics of such loans.
These premiums or discounts are recognized as yield adjustments over the lives of the related loans. If loans
that were acquired at a premium or discount are prepaid, the Company immediately recognizes the unamor-
tized premium or discount as a decrease or increase in the prepayment gain or loss, respectively. Loan origina-
tion or exit fees, as well as direct loan origination costs, are also deferred and recognized over the lives of the
related loans as a yield adjustment. Interest income is recognized using the effective interest method applied on
a loan-by-loan basis. 

 
 
 
 
A limited number of the Company’s loans provide for accrual of interest at speciﬁed rates which differ from
current payment terms. Interest is recognized on such loans at the accrual rate subject to management’s determi-
nation that accrued interest and outstanding principal are ultimately collectible, based on the underlying collat-
eral and operations of the borrower. 

Prepayment penalties or yield maintenance payments from borrowers are recognized as additional income
when  received.  Certain  of  the  Company’s  loan  investments  provide  for  additional  interest  based  on  the  bor-
rower’s operating cash ﬂow or appreciation of the underlying collateral. Such amounts are considered contingent
interest and are reﬂected as income only upon certainty of collection. 

Leasing Investments: Operating lease revenue is recognized on the straight-line method of accounting from the
later of the date of the origination of the lease or the date of acquisition of the facility subject to existing leases.
Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The cumulative
difference between lease revenue recognized under this method and contractual lease payment terms is recorded
as a deferred operating lease income receivable on the balance sheet. 

Provision  for  Loan  Losses – The Company’s accounting policies require that an allowance for estimated loan
losses be maintained at a level that management, based upon an evaluation of known and inherent risks in the
portfolio, considers adequate to provide for loan losses. Speciﬁc valuation allowances are established for impaired
loans in the amount by which the carrying value, before allowance for estimated losses, exceeds the fair value of
collateral less disposition costs on an individual loan basis. Management considers a loan to be impaired when,
based upon current information and events, it believes that it is probable that the Company will be unable to col-
lect all amounts due according to the contractual terms of the loan agreement on a timely basis. Management
measures these impaired loans at the fair value of the loans’ underlying collateral less estimated disposition costs.
Impaired loans may be left on accrual status during the period the Company is pursuing repayment of the loan;
however, these loans are placed on non-accrual status at such time as: (1) management believes that the potential
risk exists that scheduled debt service payments will not be met within the coming 12 months; (2) the loans become
90 days delinquent; (3) management determines the borrower is incapable of, or has ceased efforts toward, curing
the cause of the impairment; or (4) the net realizable value of the loan’s underlying collateral approximates the
Company’s  carrying  value  of  such  loan. While  on  non-accrual  status,  interest  income  is  recognized  only  upon
actual receipt. Impairment losses are recognized as direct write-downs of the related loan with a corresponding
charge to the provision for loan losses. Charge-offs occur when loans, or a portion thereof, are considered uncol-
lectible and of such little value that further pursuit of collection is not warranted. Management also provides a loan
portfolio reserve based upon its periodic evaluation and analysis of the portfolio, historical and industry loss experi-
ence, economic conditions and trends, collateral values and quality, and other relevant factors. 

Income Taxes – As a REIT, the Company is subject to federal income taxation at corporate rates on its REIT
taxable income; however, the Company is allowed a deduction for the amount of dividends paid to its sharehold-
ers, thereby subjecting the distributed net income of the Company to taxation at the shareholder level only. The
Company intends to operate in a manner consistent with and to elect to be treated as a REIT. iStar Operating
and TMOC, the Company’s taxable subsidiaries, are not consolidated for federal income tax purposes and are
taxed as corporations. For ﬁnancial reporting purposes, current and deferred taxes are provided for in the por-
tion  of  earnings  recognized  by  the  Company  with  respect  to  its  interest  in  iStar  Operating  and TMOC.
Accordingly, except for the Company’s taxable subsidiaries, no current or deferred taxes are provided for in the
Consolidated Financial Statements. 

Net Income Allocable to Common Shares – Net income allocable to common shares excludes 1% of net income
allocable  to  the  class  B  shares  prior  to  November  4,  1999. The  class A and  class  B  shares  were  exchanged  for
Common Stock in connection with the TriNet Acquisition, as more fully described in Note 4. 

Earnings  (Loss)  Per  Common  Shares –  In  accordance  with  the  Statement  of  Financial Accounting  Standards
No. 128 (“FASB No. 128”), the Company presents both basic and diluted earnings per share (“EPS”). Basic earn-
ings  per  share  (“Basic  EPS”)  excludes  dilution  and  is  computed  by  dividing  net  income  available  to  common
shareholders by the weighted average number of shares outstanding for the period. Diluted earnings per share
(“Diluted EPS”) reﬂects the potential dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock, where such exercise or conversion would result in a lower
earnings per share amount. 

Reclassiﬁcations –  Certain  prior  year  amounts  have  been  reclassiﬁed  in  the  Consolidated  Financial

Statements and the related notes to conform to the 2001 presentation. 

Use of Estimates – The preparation of ﬁnancial statements in conformity with generally accepted account-
ing principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the dates of the ﬁnancial statements
and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ
from those estimates. 

Change in Accounting Principle – In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133 (“SFAS No. 133”), “Accounting for Derivative Instruments and Hedging Activities.” On June 23, 1999, the
FASB voted to defer the effectiveness of SFAS No. 133 for one year. SFAS No. 133 is now effective for ﬁscal years
beginning after June 15, 2000, but earlier application is permitted as of the beginning of any ﬁscal quarter subse-
quent  to  June  15,  1998.  SFAS  No.  133  establishes  accounting  and  reporting  standards  for  derivative  ﬁnancial
instruments and hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities
in the statement of ﬁnancial position and measure those instruments at fair value. If certain conditions are met, a
derivative may be speciﬁcally designated as: (1) a hedge of the exposure to changes in the fair value of a recog-
nized asset or liability or an unrecognized ﬁrm commitment; (2) a hedge of the exposure to variable cash ﬂows of
a forecasted transaction; or (3) in certain circumstances, a hedge of a foreign currency exposure. The Company
adopted this pronouncement, as amended by Statement of Financial Accounting Standards No. 137 “Accounting
for Derivative Instruments and Hedging Activities – deferral of the Effective Date of FASB Statement No. 133”
and Statement of Financial Accounting Standards No. 138 “Accounting for Certain Derivative Instruments and
Certain  Hedging Activities  –  an Amendment  of  FASB  Statement  No.  133,”  on  January  1,  2001.  Because  the
Company  has  primarily  used  derivatives  as  cash  ﬂow  hedges  of  interest  rate  risk  only,  the  adoption  of
SFAS No. 133 did not have a material ﬁnancial impact on the ﬁnancial position and results of operations of the
Company. However, should the Company change its current use of such derivatives (see Note 9), the adoption of
SFAS No. 133 could have a more signiﬁcant effect on the Company prospectively. 

Upon adoption, the Company recognized a charge to net income of approximately $282,000 and an addi-
tional charge of $9.4 million to other comprehensive income, representing the cumulative effect of the change in
accounting principle. 

Other New Accounting Standards – In December 1999, the Securities and Exchange Commission (“SEC”) issued
Staff Accounting Bulletin No. 101 (“SAB 101”), “Revenue Recognition in Financial Statements.” In June 2000, the
SEC staff amended SAB 101 to provide registrants with additional time to implement SAB 101. The Company
adopted SAB 101, as required, in the fourth quarter of ﬁscal 2000. The adoption of SAB 101 did not have a material
ﬁnancial impact on the ﬁnancial position or the results of operations of the Company. 

In  March  2000,  the  FASB  issued  FASB  Interpretation  No.  44  (“FIN  44”),  “Accounting  for  Certain
Transactions Involving Stock Compensation.” The Company was required to adopt FIN 44 effective July 1, 2000
with  respect  to  certain  provisions  applicable  to  new  awards,  exchanges  of  awards  in  a  business  combination,
modiﬁcations  to  outstanding  awards,  and  changes  in  grantee  status  that  occur  on  or  after  that  date.  FIN  44
addresses practice issues related to the application of Accounting Practice Bulletin Opinion No. 25, “Accounting
for  Stock  Issued  to  Employees.” The  initial  adoption  of  FIN  44  by  the  Company  did  not  have  a  signiﬁcant
impact on the Company. 

In September 2000, the FASB issued Statement of Financial Accounting Standards No. 140 (“SFAS No. 140”),
“Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” This statement is
applicable for transfers of assets and extinguishments of liabilities occurring after March 31, 2001. The Company
adopted the provisions of this statement as required for all transactions entered into on or after April 1, 2001. The
adoption of SFAS No. 140 did not have a signiﬁcant impact on the Company. 

In July 2001, the SEC released Staff Accounting Bulletin No. 102 (“SAB 102”), “Selected Loan Loss Allowance
and Documentation Issues.” SAB 102 summarizes certain of the SEC’s views on the development, documenta-
tion and application of a systematic methodology for determining allowances for loan and lease losses. Adoption
of SAB 102 by the Company did not have a signiﬁcant impact on the Company. 

In  July  2001,  the  FASB  issued  Statement  of  Financial Accounting  Standards  No.  141  (“SFAS  No.  141”),
“Business Combinations” and Statement of Financial Accounting Standards No. 142 (“SFAS No. 142”), “Goodwill
and Other Intangible Assets.” SFAS No. 141 requires the purchase method of accounting to be used for all busi-
ness combinations initiated after June 30, 2001. SFAS No. 141 also addresses the initial recognition and measure-
ment of goodwill and other intangible assets acquired in business combinations and requires intangible assets 
to  be  recognized  apart  from  goodwill  if  certain  tests  are  met. The  Company  does  not  believe  the  adoption 
of  SFAS No.  141  will  have  a  material  impact  on  the  Company’s  ﬁnancial  position  or  results  of  operations.
SFAS No. 142 requires that goodwill not be amortized but instead be measured for impairment at least annually,
or when events indicate that there may be an impairment. SFAS No. 142 is effective for ﬁscal years beginning
after December 15, 2001. Early application is permitted for companies with ﬁscal years beginning after March 15,
2001. The Company will adopt the provisions of this statement on January 1, 2002, as required, and it does not
believe the adoption of SFAS No. 142 will have a signiﬁcant impact on the Company. 

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41.

 
 
 
 
In October 2001, the FASB issued Statement of Financial Accounting Standards No. 144 (“SFAS No. 144”),
“Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 provides new guidance on the
recognition of impairment losses on long-lived assets to be held and used or to be disposed of and also broadens
the deﬁnition of what constitutes a discontinued operation and how the results of a discontinued operation are to
be measured and presented. The Company is currently evaluating this statement to assess its impact on the ﬁnan-
cial statements. The provisions of SFAS No. 144 are effective for ﬁnancial statements issued for ﬁscal years begin-
ning after December 15, 2001, and must be applied at the beginning of a ﬁscal year. The Company will adopt the
provisions  of  this  statement  on  January  1,  2002,  as  required. The  Company  does  not  believe  the  adoption  of
SFAS No. 144 will have a signiﬁcant impact on the Company. 

Note 4 – Capital Transactions

Prior Transactions with Affiliates – Prior to November 4, 1999, the Company was party to an Advisory Agreement
(the “Former Advisory Agreement”) with an external advisor (the “Former Advisor”), an a´liate of SOFIV SMT
Holdings., L.L.C. (“SOF IV”) and certain other a´liates (collectively, the “Starwood Investors”). Pursuant to the
Former Advisory Agreement, the Former Advisor managed the affairs of the Company. In connection with the
Advisory Agreement, the Company paid the Former Advisor a quarterly base management fee of 0.3125% (1.25% per
annum) of the Book Equity Value of the Company, as deﬁned. In addition, the Company paid the Former Advisor a
quarterly incentive fee of 5.00% of the Company’s Adjusted Net Income in excess of a benchmark rate. Prior to the
transactions described below through which, among other things, the Company became internally-managed, the
Company was dependent on the services of the Former Advisor and its o´cers and employees for the successful exe-
cution of its business strategy. 

On October 30, 2001, the Starwood Investors sold 18.975 million shares of Common Stock (including the sub-
sequently exercised 2.475 million share over-allotment option granted to the underwriters) owned by them. The
Company did not sell any shares in this offering. As a result of the secondary offering, Starwood Mezzanine holds
no  remaining  interest  in  the  Company  and  SOF  IV currently  owns  approximately  38.7%  of  the  Company’s
Common Stock (based on the diluted sharecount as of December 31, 2001). 

1999 Transactions – On November 3, 1999, consistent with previously announced terms, the Company’s share-
holders approved a series of transactions including: (1) the acquisition, through a merger, of TriNet; (2) the acqui-
sition, through a merger and a contribution of interests, of 100% of the ownership interests in the Advisor; and
(3)  the  change  in  form,  through  a  merger,  of  the  Company’s  organization  to  a  Maryland  corporation. TriNet
shareholders also approved the TriNet Acquisition on November 3, 1999. These transactions were consummated
on November 4, 1999. As part of these transactions, the Company also replaced its dual class common share
structure with a single class of Common Stock. 

TriNet Acquisition – TriNet merged with and into a subsidiary of the Company, with TriNet surviving as a wholly-
owned subsidiary of the Company (the “Leasing Subsidiary”). In the TriNet Acquisition, each share of TriNet com-
mon stock was converted into 1.15 shares of Common Stock, resulting in an aggregate issuance of 28.9 million
shares of Common Stock. Each share of TriNet Series A, Series B and Series C Cumulative Redeemable Preferred
Stock was converted into a share of Series B, Series C or Series D (respectively) Cumulative Redeemable Preferred
Stock of the Company. The Company’s preferred stock issued to the former TriNet preferred shareholders has
substantially the same terms as the TriNet preferred stock, except that the new Series B, C and D preferred stock
has additional voting rights not associated with the TriNet preferred stock. The holders of the Company’s Series A
preferred stock retained the same rights and preferences as existed prior to the TriNet Acquisition. The TriNet
Acquisition was accounted for as a purchase. 

Advisor Transaction – Contemporaneously with the consummation of the TriNet Acquisition, the Company
acquired 100% of the interests in the Former Advisor in exchange for total consideration of four million shares of
Common Stock. For accounting purposes, the Advisor Transaction was not considered the acquisition of a “busi-
ness”  in  applying Accounting  Principles  Board  Opinion  No.  16,  “Business  Combinations”  and,  therefore,  the
market value of the Common Stock issued in excess of the fair value of the net tangible assets acquired of approx-
imately $94.5 million was charged to operating income as a non-recurring, non-cash item in the fourth quarter of
1999, rather than capitalized as goodwill. 

Incorporation Merger – Prior to the consummation of the TriNet Acquisition and the Advisor Transaction, the
Company  changed  its  form  from  a  Maryland  trust  to  a  Maryland  corporation  in  the  Incorporation  Merger,
which technically involved a merger of the Company with a wholly-owned subsidiary formed solely to effect
such merger. In the Incorporation Merger, the former class B shares were converted into shares of Common
Stock on a 49-for-one basis (the same ratio at which the former class B shares were previously convertible into

class A shares), and the class A shares were converted into shares of Common Stock on a one-for-one basis. As a
result, the Company no longer has multiple classes of common shares. The Incorporation Merger was treated
as a transfer of assets and liabilities under common control. Accordingly, the assets and liabilities transferred
from the Maryland trust to the Maryland corporation were reﬂected at their predecessor basis and no gain or
loss was recognized. 

The Company declared and paid a special dividend of one million shares of its Common Stock payable pro
rata to all holders of record of its Common Stock following completion of the Incorporation Merger, but prior to
the effective time of the TriNet Acquisition and the Advisor Transaction. 

Pro Forma Information – The summary unaudited pro forma consolidated statements of operations for the year
ended December 31, 1999 are presented as if the following transactions, consummated in November 1999, had
occurred on January 1, 1999: (1) the TriNet Acquisition; (2) the Advisor Transaction; and (3) the borrowings neces-
sary to consummate the aforementioned transactions. The unaudited pro forma information is based upon the
historical consolidated results of operations of the Company and TriNet for the year ended December 31, 1999,
after giving effect to the events described above. 

Pro Forma Consolidated Statements of Operations

For the Year Ended December 31,
1999

(In thousands, except per share data)
(Unaudited)

Revenue:
Interest income
Operating lease income
Other income

Total revenue

Expenses:
Interest expense
Operating costs – corporate tenant lease assets
Depreciation and amortization
General and administrative
Provision for loan losses
Stock-based compensation expense

Total costs and expenses

Income before minority interest
Minority interest

Net income
Preferred dividend requirements

Net income allocable to common shareholders

Basic Earnings Per Share:
Basic earnings per common share

Weighted average number of common shares outstanding

$218,359
186,776
21,000

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

426,135

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

135,795
12,601
36,423
21,716
4,750
2,474

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

213,759

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$212,376
(164)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$212,212
(36,906)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$175,306
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2.01
$
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
87,073
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Investments and dispositions are assumed to have taken place as of January 1, 1999; however, loan originations
and acquisitions are not reﬂected in these pro forma numbers until the actual origination or acquisition date 
by the Company. The pro forma information above excludes the charge of approximately $94.5 million taken by
the  Company  in  ﬁscal  1999  to  reﬂect  the  costs  incurred  in  acquiring  the  Former Advisor  as  such  charge  is 
non-recurring. The  pro  forma  information  also  excludes  certain  non-recurring  historical  charges  recorded  by
TriNet of $3.4 million in 1999 for a provision for a write-down of CTL assets. General and administrative costs
represent estimated expense levels as an internally-managed Company. 

The pro forma ﬁnancial information is not necessarily indicative of what the consolidated results of opera-
tions of the Company would have been as of and for the period indicated, nor does it purport to represent the
results of operations for future periods. 

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43.

 
 
 
 
Note 5 – Loans and Other Lending Investments

The  following  is  a  summary  description  of  the  Company’s  loans  and  other  lending  investments  (in

thousands)(1): 

Type of Investment

Underlying Property Type

Senior Mortgages

Subordinated Mortgages(5)

Corporate Loans/

Partnership Loans/
Unsecured Notes(6)

Other Lending Investments

Gross Carrying Value
Provision for Loan Losses

Total, Net

O´ce/Residential/Retail/
Resort/Entertainment/
Hotel/Mixed Use
O´ce/Mixed Use/
Residential/Hotel
O´ce/Retail/Hotel/
Entertainment/
Residential/Mixed Use

Retail/Industrial/
O´ce/Mixed Use

# of 
Borrowers 

Principal
Balances

In Class(1) Outstanding(1)

Carrying Value
as of December 31,

2001

2000

20

21

18

11

$1,173,945

$1,158,669

$1,210,992

590,052

585,698

493,430

418,016

395,083

373,227

284,060

259,313

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

161,534

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,398,763
(21,000)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,239,183
(14,000)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,377,763
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,225,183
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Effective
Maturity Contractual Interest

Contractual Interest

Payment Rates(1)

Accrued Rates(2) Amortization

Principal Participation
Features

Type of Investment

Rates

Senior Mortgages

2002 to 2019

Subordinated Mortgages(5)

2002 to 2011

Corporate Loans/

Partnership Loans/
Unsecured Notes(6)

2002 to 2011

Other Lending Investments

2003 to 2013

Fixed: 7.32% to 16.00%
Variable: LIBOR +
1.50% to 6.00%

Fixed: 7.32% to 10.82%
Variable: LIBOR +
1.50% to 6.00%
Fixed: 7.00% to 15.25% Fixed: 7.32% to 17.00%
Variable: LIBOR +
2.12% to 9.45%
Fixed: 7.33% to 15.00% Fixed: 7.33% to 17.50%
Variable: LIBOR +
5.00% to 7.50%
Fixed: 6.75% to 12.50% Fixed: 6.75% to 12.50%

Variable: LIBOR +
5.00% to 7.50%

Variable: LIBOR +
2.78% to 9.45%

Yes(3)

No

Yes(3)

Yes(4)

Yes(3)

Yes(4)

No

Yes(4)

Explanatory Notes:
(1) Amounts and details are for loans outstanding as of December 31, 2001. 
(2) Substantially all variable-rate loans are based on 30-day LIBOR and reprice monthly. The 30-day LIBOR rate on December 31, 2001 was 1.87%. 
(3) The loans require ﬁxed payments of principal and interest resulting in partial principal amortization over the term of the loan with the remaining
principal due at maturity. In addition, one of the loans permits additional annual prepayments of principal of up to $1.3 million without penalty at the
borrower’s option. 

(4) Under some of these loans, the lender receives additional payments representing additional interest from participation in available cash ﬂow from

operations of the property and the proceeds, in excess of a base amount, arising from a sale or reﬁnancing of the property. 

(5) Includes a participation interest in a second mortgage and a subordinate interest in a private REMIC whose sole asset is a single ﬁrst mortgage loan. 
(6) Includes a subordinate interest in a private REMIC whose sole asset is a single ﬁrst mortgage loan. 

During the 12-month periods ended December 31, 2001 and 2000, respectively, the Company and its a´liated
ventures originated or acquired an aggregate of approximately $696.9 million and $721.2 million in loans and
other  lending  investments,  funded  $99.6  million  and  $56.0  million  under  existing  loan  commitments,  and
received principal repayments of $676.0 million and $584.5 million. 

As of December 31, 2001, the Company had ten loans with unfunded commitments. The total unfunded com-
mitment  amount  was  approximately  $169.3  million,  of  which  $31.8  million  was  discretionary  (i.e.,  at  the
Company’s option) and $137.5 million was non-discretionary. 

The Company’s loans and other lending investments are predominantly pledged as collateral under either the

iStar Asset Receivables secured notes, the secured revolving facilities or secured term loans (see Note 7). 

The Company has reﬂected provisions for loan losses of approximately $7.0 million, $6.5 million and $4.8 mil-
lion during the years ended December 31, 2001, 2000 and 1999, respectively. These provisions represent loan port-
folio  reserves  based  on  management’s  evaluation  of  general  market  conditions,  the  Company’s  internal  risk
management policies and credit risk ratings system, industry loss experience, the likelihood of delinquencies or
defaults, and the underlying collateral. No direct impairment reserves on speciﬁc loans were considered necessary. 

Note 6 – Corporate Tenant Lease Assets

The Company’s investments in corporate tenant lease assets, at cost, were as follows (in thousands): 

Buildings and improvements
Land and land improvements
Less: accumulated depreciation

Investments in unconsolidated joint ventures

Corporate tenant lease assets, net

For the Year 
Ended December 31,
2000

2001

$1,504,956
356,830
(80,221)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

1,781,565
60,235

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$1,294,572
344,490
(46,975)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

1,592,087
78,082

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$1,841,800
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$1,670,169
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

The  Company’s  CTL assets  are  leased  to  customers  with  initial  term  expiration  dates  from  2002  to  2023.
Future operating lease payments under non-cancelable leases, excluding customer reimbursements of expenses,
in effect at December 31, 2001, are approximately as follows (in thousands): 

Year

2002
2003
2004
2005
2006
Thereafter

Amount

$ 202,004
197,289
179,580
162,268
147,107
1,089,920

Under certain leases, the Company receives additional participating lease payments to the extent gross rev-
enues  of  the  corporate  tenant  exceed  a  base  amount. The  Company  earned  $0.4  million,  $0.6  million  and
$0.5 million of such additional participating lease payments in the years ended December 31, 2001, 2000 and
1999, respectively. In addition, the Company also receives reimbursements from customers for certain facility
operating expenses. 

The Company is subject to expansion option agreements with three existing customers which could require the
Company to fund and to construct up to 166,000 square feet of additional adjacent space on which the Company
would receive additional operating lease income under the terms of the option agreements. 

Investments  In  and  Advances  To  Unconsolidated  Joint  Ventures – At  December  31,  2001,  the  Company  had
investments in ﬁve joint ventures: (1) TriNet Sunnyvale Partners L.P. (“Sunnyvale”), whose external partners are
John D. O’Donnell, Trustee, John W. Hopkins, and Donald S. Grant; (2) Corporate Technology Associates LLC
(“CTC I”),  whose  external  member  is  Corporate Technology  Centre  Partners  LLC;  (3) Sierra  Land Ventures
(“Sierra”),  whose  external  joint  venture  partner  is  Sierra-LC  Land,  Ltd.;  (4) TriNet  Milpitas Associates,  LLC
(“Milpitas”), whose external member is The Prudential Insurance Company of America; and (5) ACRE Simon,
L.L.C. (“ACRE”), whose external partner is William E. Simon & Sons Realty Investments, L.L.C. These ventures
were formed for the purpose of operating, acquiring and in certain cases, developing corporate tenant lease facil-
ities. The Company previously had an equity investment in CTC II. The corporate tenant lease assets held in
that joint venture were sold for approximately $66.0 million in September 2000. In connection with this sale,
the Company’s note receivable from the venture was modiﬁed to mature on December 31, 2001, on which date it
was repaid in full. 

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S
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part [ 03 ]

45.

 
 
 
 
At December 31, 2001, the ventures comprised 23 net leased facilities. Additionally, 17.7 acres of land are held
for sale. The Company’s combined investment in these joint ventures at December 31, 2001 was $60.2 million.
The joint ventures’ carrying value for the 23 facilities owned at December 31, 2001 was $334.1 million. The joint
ventures’ carrying value of the land held for sale was $7.7 million. In the aggregate, the joint ventures had total
assets  of  $384.6  million  and  total  liabilities  of  $277.8  million  as  of  December 31,  2001,  and  net  income  of
$16.6 million for the 12 months ended December 31, 2001. The Company accounts for these investments under
the equity method because the Company’s joint venture partners have certain participating rights which limit the
Company’s control. The Company’s ownership percentages, its investments  in  and  advances  to  unconsolidated
joint ventures, its respective income and the Company’s pro rata share of its ventures’ third-party non-recourse
debt as of December 31, 2001 are presented below (in thousands): 

Unconsolidated Ownership
%
Joint Venture

Equity
Investment

Operating:
Sunnyvale
CTC I
Milpitas
ACRE Simon

Development:
Sierra

Total

44.7%
50.0%
50.0%
20.0%

50.0%

Pro Rata
Share of
Third-Party
Non-Recourse
Debt

Third-Party Debt

Interest Rate

Scheduled
Maturity Date

$ 10,728
60,611
40,120
6,578

November 2004(1)
LIBOR + 1.25%
7.66%–7.87% Various through 2011

6.55%

November 2005

7.61%–8.43% Various through 2011

Joint
Venture
Income

$ 1,179
4,208
3,998
179

$13,168
12,383
24,177
5,370

5,137

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1) 

$60,235
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1) 

54

$9,618
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1) 

– 

$118,037
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

N/A

N/A

Explanatory Note:
(1) Maturity date reﬂects a one-year extension at the venture’s option. 

Effective March 15, 2000, ACRE entered into an interest rate cap agreement which had a notional amount of
$17.4 million and a LIBOR strike of 7.25%. This instrument did not qualify for hedge accounting at inception and
is therefore reﬂected at fair value at each balance sheet date, with changes in value included in the income state-
ment for the period. This cap expired on February 1, 2002. 

Effective  September  29,  2000,  iStar  Sunnyvale  Partners,  LP (the  entity  which  is  controlled  by  Sunnyvale)
entered into an interest rate cap agreement limiting the venture’s exposure to interest rate movements on its
$24.0 million LIBOR-based mortgage loan to an interest rate of 9.0% through November 9, 2003. 

Currently, the limited partners of Sunnyvale have the option to convert their partnership interest into cash; how-
ever, the Company may elect to deliver 297,728 shares of Common Stock in lieu of cash. Additionally, commencing in
February 2002, subject to acceleration under certain circumstances, the venture interest held by the external mem-
ber of Milpitas may be converted into 984,476 shares of Common Stock. 

Income generated from the above joint venture investments is included in “Operating Lease Income” in the

Consolidated Statements of Operations. 

Note 7 – Debt Obligations

As  of  December  31,  2001  and  2000,  the  Company  has  debt  obligations  under  various  arrangements  with

ﬁnancial institutions as follows (in thousands): 

Maximum

Carrying Value as of

Amount December 31, December 31,
2000
2001

Available

Stated
Interest
Rates

Scheduled
Maturity
Date

Secured revolving credit facilities:
Line of credit

$ 700,000

$     312,300

$

284,371

Line of credit

Line of credit

700,000

439,309

– 

500,000

148,937

307,978

LIBOR +
1.75%–2.25%
LIBOR +
1.40%–2.15%
LIBOR +
1.50%–1.75%

March 2005(1)

January 2005(1)

August 2003(1)

Unsecured revolving credit facilities:
Line of credit
Line of credit
Line of credit

Total revolving credit facilities

300,000
N/A
N/A

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,200,000
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
N/A
N/A

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
173,450
–

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

LIBOR + 2.125%
LIBOR + 1.55%
LIBOR + 2.25%

July 2004(2)
May 2002(2)
January 2003(2)

900,546

765,799

Secured term loans:
Secured by corporate tenant lease assets
Secured by corporate tenant lease assets
Secured by corporate lending investments
Secured by corporate tenant lease assets

Secured by corporate lending investments
Secured by corporate tenant lease assets

Total term loans
Plus: debt premium

Total secured term loans

iStar Asset Receivables secured notes:
Class A
Class B
Class C
Class D
Class E
Class F

193,000
147,520
60,000
55,819

– 
150,678
60,000
60,471

LIBOR + 1.85%
7.44%
LIBOR + 2.50%
6.00%–11.38%

50,000
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

506,339
274

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
77,860

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

349,009
51

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

506,613

349,060

LIBOR + 2.50%
LIBOR + 1.38%

July 2006(2)

March 2009

June 2004(4)
Various 
through 2011

July 2004(4)
June 2001

81,152
94,055
105,813
52,906
123,447
5,000

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

207,114
94,055
105,813
52,906
123,447
5,000

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

August 2003(5)
LIBOR + 0.30%
LIBOR + 0.50% October 2003(5)
January 2004(5)
LIBOR + 1.00%
June 2004(5)
LIBOR + 1.45%
January 2005(5)
LIBOR + 2.75%
January 2005(5)
LIBOR + 3.15%

Total iStar Asset Receivables secured notes

462,373

588,335

Unsecured notes:
6.75% Dealer Remarketable Securities(6,7)
7.30% Notes(6)
7.70% Notes(6)
7.95% Notes(6)
8.75% Notes

Total unsecured notes
Less: debt discount(8)

Total unsecured notes

Other debt obligations

Total debt obligations

125,000
– 
100,000
50,000
350,000

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

125,000
100,000
100,000
50,000
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

625,000

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

375,000

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(15,698)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(18,490)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

609,302

356,510

16,535

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

72,263

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,495,369
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,131,967
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

6.75%
7.30%
7.70%
7.95%
8.75%

March 2013
May 2001
July 2017
May 2006
August 2008

Various

Various

i
S
t
a
r
F
i
n
a
n
c
i
a
l
a
n
n
u
a
l

r
e
p
o
r
t
2
0
0
1

part [ 03 ]

47.

 
 
 
 
Explanatory Notes:
(1) Maturity date reﬂects a one-year “term-out” extension at the Company’s option. 
(2) On July 27, 2001, the Company replaced both unsecured facilities with a new $300.0 million unsecured revolving credit facility bearing interest at
LIBOR + 2.125%. The new facility has an initial maturity of July 2003 with a one-year extension at the Company’s option and another one-year
extension at the lenders’ option. 

(3) Maturity date reﬂects two one-year extensions at the Company’s option. 
(4) Maturity date reﬂects a one-year extension at the Company’s option. 
(5) Principal payments on these bonds are a function of the principal repayments on loan assets which collateralize these obligations. The dates indicated
above represent the expected date on which the ﬁnal payment would occur for such class based on the assumptions that the loans which collateralize
the obligations are not voluntarily prepaid, the loans are paid on their effective maturity dates and no extensions of the effective maturity dates of any
of the loans are granted. The ﬁnal maturity date for the underlying indenture on classes A, B, C, D, E and F is September 25, 2022. 

(6) The notes are callable by the Company at any time for an amount equal to the total of principal outstanding, accrued interest and the applicable

make-whole prepayment premium. 

(7) Subject to mandatory tender on March 1, 2003, to either the dealer or the Leasing Subsidiary. The initial coupon of 6.75% applies to the ﬁrst ﬁve-year
term through the mandatory tender date. If tendered to the dealer, the notes must be remarketed. The rates reset to then-prevailing market rates
upon remarketing. 

(8) These obligations were assumed as part of the TriNet Acquisition. As part of the accounting for the purchase, these ﬁxed-rate obligations were
considered to have stated interest rates which were below the then-prevailing market rates at which the Leasing Subsidiary could issue new debt
obligations and, accordingly, the Company ascribed a market discount to each obligation. Such discounts are amortized as an adjustment to interest
expense using the effective interest method over the related term of the obligations. As adjusted, the effective annual interest rates on these obligations
were 8.81%, 8.75%, 9.51% and 9.04%, for the 6.75% Dealer Remarketable Securities, 7.30% Notes, 7.70% Notes and 7.95% Notes, respectively.

Availability of amounts under the secured revolving credit facilities are based on percentage borrowing base

calculations. In addition, certain of the Company’s debt obligations contain ﬁnancial covenants. 

On May 17, 2000, the Company closed the inaugural offering under its proprietary matched funding program,
STARs, Series 2000–1. In the initial transaction, a wholly-owned subsidiary of the Company issued $896.5 mil-
lion of investment grade bonds secured by the subsidiary’s assets, which had an aggregate outstanding principal
balance of approximately $1.2 billion at inception. Principal payments received on the assets will be utilized to
repay the most senior class of the bonds then outstanding. The maturity of the bonds match funds the maturity
of the underlying assets ﬁnanced under the program. For accounting purposes, this transaction was treated as a
secured ﬁnancing. 

On January 11, 2001, the Company closed a new $700.0 million secured revolving credit facility which is led by
a major commercial bank. The new facility has a three-year primary term and one-year “term-out” extension
option, and bears interest at LIBOR plus 1.40% to 2.15%, depending upon the collateral contributed to the bor-
rowing  base. The  new  facility  accepts  a  broad  range  of  structured  ﬁnance  assets  and  has  a  ﬁnal  maturity  of
January 2005. In addition, on February 22, 2001, the Company extended the maturity of its $350.0 million unse-
cured revolving credit facility to May 2002. 

On May 15, 2001, the Company repaid its $100.0 million 7.30% unsecured notes. These notes were senior
unsecured obligations of the Leasing Subsidiary and ranked equally with the Leasing Subsidiary’s other senior
unsecured and unsubordinated indebtedness. 

On June 14, 2001, the Company closed $193.0 million of term loan ﬁnancing secured by 15 corporate tenant
lease assets. The variable-rate loan bears interest at LIBOR plus 1.85% (not to exceed 10.00%) and has two one-
year extensions at the Company’s option. The Company used these proceeds to repay a $77.8 million secured
term  loan  maturing  in  June  2001  and  to  pay  down  a  portion  of  its  revolving  credit  facilities.  In  addition,  the
Company extended the ﬁnal maturity of its $500.0 million secured revolving credit facility to August 12, 2003. 

On July 6, 2001, the Leasing Subsidiary ﬁnanced a $75.0 million structured ﬁnance asset with a $50.0 million
term loan bearing interest at LIBOR + 2.50%. The loan has a maturity of July 2006, including a one-year exten-
sion at the Leasing Subsidiary’s option. 

On July 27, 2001, the Company completed a $300.0 million unsecured revolving credit facility with a group of
leading ﬁnancial institutions. The new facility has an initial maturity of July 2003, with a one-year extension at
the Company’s option and another one-year extension at the lenders’ option. The new facility replaces two prior
credit facilities maturing in 2002 and 2003, and bears interest at LIBOR + 2.125%. 

On August 9, 2001, the Company issued $350.0 million of 8.75% senior notes due in 2008. The notes are unse-
cured senior obligations of the Company. The Company used the net proceeds to repay outstanding borrowings
under its secured credit facilities. 

During the years ended December 31, 2001 and 2000, the Company incurred an extraordinary loss of approx-
imately $1.6 million and $0.7 million, respectively, as a result of the early retirement of certain debt obligations of
its Leasing Subsidiary. 

As of December 31, 2001, future expected/scheduled maturities of outstanding long-term debt obligations are as

follows (in thousands):(1)

2002
2003
2004
2005
2006
Thereafter

Total principal maturities
Net unamortized debt discounts

Total debt obligations

$

29,207
324,144
218,719
883,563
293,000
762,160

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2,510,793
(15,424)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$2,495,369
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

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49.

Explanatory Note:
(1) Assumes exercise of extensions to the extent such extensions are at the Company’s option. 

Note 8 – Shareholders’ Equity

The Company’s charter provides for the issuance of up to 200.0 million shares of Common Stock, par value
$0.001 per share, and 30.0 million shares of preferred stock. The Company has 4.4 million shares of 9.5% Series
A Cumulative  Redeemable  Preferred  Stock,  2.3 million  shares  of  9.375%  Series  B  Cumulative  Redeemable
Preferred Stock, 1.5 million shares of 9.20% Series C Cumulative Redeemable Preferred Stock, and 4.6 million
shares  of  8.0%  Series  D  Cumulative  Redeemable  Preferred  Stock. The  Series A,  B,  C  and  D  Cumulative
Redeemable Preferred Stock are redeemable without premium at the option of the Company at their respec-
tive liquidation preferences beginning on December 15, 2003, June 15, 2001, August 15, 2001 and October 8,
2002, respectively.

On  December  15,  1998,  the  Company  issued  warrants  to  acquire  6.1  million  common  shares  of  Common
Stock, as adjusted for dilution, at $34.35 per share. The warrants are exercisable on or after December 15, 1999 at
a price of $34.35 per share and expire on December 15, 2005. 

Stock Repurchase Program – The Board of Directors approved, and the Company has implemented, a stock
repurchase program under which the Company is authorized to repurchase up to 5.0 million shares of its Common
Stock from time to time, primarily using proceeds from the disposition of assets or loan repayments and excess
cash ﬂow from operations, but also using borrowings under its credit facilities if the Company determines that it is
advantageous to do so. As of both December 31, 2001 and 2000, the Company had repurchased approximately
2.3 million shares at an aggregate cost of approximately $40.7 million. 

DRIP Program – The Company maintains a dividend reinvestment and direct stock purchase plan. Under the
dividend reinvestment component of the plan, the Company’s shareholders may purchase additional shares of
Common Stock without payment of brokerage commissions or service charges by automatically reinvesting all
or a portion of their Common Stock cash dividends. Under the direct stock purchase component of the plan, the
Company’s shareholders and new investors may purchase shares of Common Stock directly from the Company
without payment of brokerage commissions or service charges. All purchases of shares in excess of $10,000 per
month pursuant to the direct purchase component are at the Company’s sole discretion. Shares issued under the
plan may reﬂect a discount of up to a 3.0% from the prevailing market price of the Company’s Common Stock.
The Company is authorized to issue up to 8.0 million shares of Common Stock pursuant to the dividend rein-
vestment and direct stock purchase plan. In 2001, the Company issued a total of 195,078 shares of its Common
Stock through the direct stock purchase component of the plan for net proceeds of approximately $4.7 million.
Approximately $3.9 million of these proceeds were received in January 2002. 

Note 9 – Risk Management and Use of Financial Instruments

Risk Management – In the normal course of its on-going business operations, the Company encounters eco-
nomic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk.
The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at
different  speeds,  or  different  bases,  than  its  interest-earning  assets.  Credit  risk  is  the  risk  of  default  on  the
Company’s  lending  investments  that  results  from  a  property’s,  borrower’s  or  corporate  tenant’s  inability  or
unwillingness to make contractually required payments. Market risk reﬂects changes in the value of loans due to
changes in interest rates or other market factors, including the rate of prepayments of principal and the value of
the collateral underlying loans and the valuation of corporate tenant lease facilities held by the Company. 

 
 
 
 
Use of Derivative Financial Instruments – The Company’s use of derivative ﬁnancial instruments is primarily lim-
ited to the utilization of interest rate agreements or other instruments to manage interest rate risk exposure. The
principal objective of such arrangements is to minimize  the  risks  and/or  costs  associated  with  the  Company’s
operating  and  ﬁnancial  structure  as  well  as  to  hedge  speciﬁc  anticipated  transactions. The  counterparties  to
these contractual arrangements are major ﬁnancial institutions with which the Company and its a´liates may
also have other ﬁnancial relationships. The Company is potentially exposed to credit loss in the event of nonper-
formance by these counterparties. However, because of their high credit ratings, the Company does not antici-
pate that any of the counterparties will fail to meet their obligations. 

Since January 1, 1999, the Company has entered into the following cash ﬂow hedges that have expired or been

settled prior to December 31, 2001 (in thousands): 

Type of Hedge

LIBOR Cap
Pay-Fixed Swap
LIBOR Cap
LIBOR Cap
LIBOR Cap

Notional
Amount

$300,000
92,000
75,000
40,430
38,336

Strike
Price or
Swap Rate

9.000%
5.714%
7.500%
7.500%
7.500%

Trade
Date

3/16/98
8/10/98
7/16/98
4/30/98
4/30/98

Maturity
Date

3/16/01
3/1/01
6/19/01
1/1/01
6/1/01

Since January 1, 1999, the Company has entered into the following cash ﬂow hedges that are outstanding as of
December 31, 2001. The net value (liability) associated with these hedges is reﬂected on the Company’s balance
sheet (in thousands). 

Type of Hedge

Pay-Fixed Swap
Pay-Fixed Swap
Pay-Fixed Swap
LIBOR Cap
LIBOR Cap

Notional
Amount

$125,000
125,000
75,000
75,000
35,000

Strike
Price or
Swap Rate

7.058%
7.055%
5.580%
7.750%
7.750%

Trade
Date

6/15/00
6/15/00
11/4/99(1)
11/4/99(1)
11/4/99(1)

Maturity
Date

6/25/03
6/25/03
12/1/04
12/1/04
12/1/04

Total Estimated Asset (Liability) Value

Explanatory Note:
(1) Acquired in connection with the TriNet Acquisition (see Note 4). 

Estimated
Value at
December 31,
2001

$ (7,878)
(7,873)
(3,732)
388
170

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(18,925)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

In connection with the STARs, Series 2000-1 in May 2000, the Company entered into a LIBOR interest rate
cap struck at 10.00% in the notional amount of $312.0 million, and simultaneously sold a LIBOR interest rate
cap with the same terms. Since these instruments do not change the Company’s net interest rate risk exposure,
they do not qualify as hedges and changes in their respective values are charged to earnings. As the terms of these
arrangements are substantially the same, the effects of a revaluation of these two instruments substantially offset
one another. 

During the year ended December 31, 1999, the Company settled an aggregate notional amount of approxi-
mately $63.0 million that was outstanding under certain hedging agreements which the Company had entered
into in order to hedge the potential effects of interest rate movements on anticipated ﬁxed-rate borrowings. The
settlement  of  such  agreements  resulted  in  a  receipt  of  approximately  $0.6  million  which  had  been  deferred
pending completion of the planned ﬁxed-rate ﬁnancing transaction. Subsequently, the transaction was modiﬁed
and  was  actually  consummated  as  a  variable-rate  ﬁnancing  transaction. As  a  result,  the  previously  deferred
receipt  no  longer  qualiﬁed  for  hedge  accounting  treatment  and  the  $0.6  million  was  recognized  as  a  gain
included in other income in the consolidated statement of operations for the year ended December 31, 2000 in
connection with the closing of STARs, Series 2000-1 in May 2000. 

During the year ended December 31, 1999, the Company reﬁnanced its $125.0 million term loan maturing
March 15, 1999 with a $155.4 million term loan maturing March 5, 2009. The new term loan bears interest at
7.44% per annum, payable monthly, and amortizes over an approximately 22-year schedule. The new term loan
represented  forecasted  transactions  for  which  the  Company  had  previously  entered  into  U.S. Treasury-based

hedging transactions. The net $3.4 million cost of the settlement of such hedges has been deferred and is being
amortized as an increase to the effective ﬁnancing cost of the new term loan over its effective ten-year term. 

Credit Risk Concentrations – Concentrations of credit risks arise when a number of borrowers or customers
related to the Company’s investments are engaged in similar business activities, or activities in the same geo-
graphic region, or have similar economic features that would cause their ability to meet contractual obligations,
including those to the Company, to be similarly affected by changes in economic conditions. The Company regu-
larly monitors various segments of its portfolio to assess potential concentrations of credit risks. Management
believes the current credit risk portfolio is reasonably well diversiﬁed and does not contain any unusual concen-
tration of credit risks. 

Substantially all of the Company’s corporate tenant lease assets (including those held by joint ventures) and
loans and other lending investments, are collateralized by facilities located in the United States, with signiﬁcant
concentrations (i.e., greater than 10.0%) as of December 31, 2001 in California (23.5%), Texas (15.1%) and New York
(10.9%). As of December 31, 2001, the Company’s investments also contain signiﬁcant concentrations in the fol-
lowing asset types: o´ce (47.7%), hotel lending (12.5%) and industrial (10.6%). 

The Company underwrites the credit of prospective borrowers and customers and often requires them to
provide some form of credit support such as corporate guarantees, letters of credit and/or cash security deposits.
Although the Company’s loans and other lending investments and corporate customer lease assets are geograph-
ically diverse and the borrowers and customers operate in a variety of industries, to the extent the Company has a
signiﬁcant  concentration  of  interest  or  operating  lease  revenues  from  any  single  borrower  or  customer,  the
inability of that borrower or customer to make its payment could have an adverse effect on the Company. As of
December 31, 2001, the Company’s ﬁve largest borrowers or corporate tenants collectively accounted for approx-
imately 16.7% of the Company’s aggregate annualized interest and operating lease revenue. 

Note 10 – Stock-Based Compensation Plans and Employee Beneﬁts

The Company’s 1996 Long-Term Incentive Plan (the “Plan”) is designed to provide incentive compensation
for o´cers, other key employees and directors of the Company. The Plan provides for awards of stock options
and shares of restricted stock and other performance awards. The maximum number of shares of Common
Stock available for awards under the Plan is 9.0% of the outstanding shares of Common Stock, calculated on a
fully  diluted  basis,  from  time  to  time;  provided  that  the  number  of  shares  of  Common  Stock  reserved  for
grants of options designated as incentive stock options is 5.0 million, subject to certain antidilution provi-
sions in the Plan. All awards under the Plan, other than automatic awards to non-employee directors, are at
the  discretion  of  the  Board  or  a  committee  of  the  Board. At  December  31,  2001,  a  total  of  approximately
7.9 million shares of Common Stock were available for awards under the Plan, of which options to purchase
approximately 5.3 million shares of Common Stock were outstanding and approximately 637,000 shares of
restricted stock were outstanding. 

Concurrently  with  the  Recapitalization Transactions,  the  Company  issued  approximately  2.5  million  (as
adjusted) fully vested and immediately exercisable options to purchase shares of Common Stock at $14.72 per
share (as adjusted) to the Former Advisor with a term of ten years. The Former Advisor granted a portion of these
options  to  its  employees  and  the  remainder  were  allocated  to  an  a´liate.  Upon  consummation  of  the Advisor
Transaction, these individuals became employees of the Company. In general, the grants to these employees pro-
vided for scheduled vesting over a predeﬁned service period of three to ﬁve years and, under certain conditions,
provide for accelerated vesting. These options expire on March 15, 2008. 

In  connection  with  the TriNet Acquisition,  outstanding  options  to  purchase TriNet  stock  under TriNet’s
stock option plans were converted into options to purchase shares of Common Stock on substantially the same
terms, except that both the exercise price and number of shares issuable upon exercise of the TriNet options
were adjusted to give effect to the merger exchange ratio of 1.15 shares of Common Stock for each share of TriNet
common stock. In addition, options held by the former directors of TriNet and certain executive o´cers became
fully  vested  as  a  result  of  the  transaction. These  options  were  converted  into  options  to  purchase  shares  of
Common Stock on substantially the same terms, as adjusted for the merger exchange ratios. 

Also, as a result of the TriNet Acquisition, TriNet terminated its dividend equivalent rights program. The pro-
gram called for immediate vesting and cash redemption of all dividend equivalent rights upon a change of control
of 50% or more of the voting common stock. Concurrent with the TriNet Acquisition, all dividend equivalent
rights were vested and amounts due to former TriNet employees of approximately $8.3 million were paid by the
Company. Such payments were included as part of the purchase price paid by the Company to acquire TriNet for
ﬁnancial reporting purposes. 

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51.

 
 
 
 
Changes in options outstanding during each of ﬁscal 1999, 2000 and 2001 are as follows: 

Options outstanding, December 31, 1998

Granted in 1999
Exercised in 1999
Forfeited in 1999
Assumed in TriNet Acquisition
Reclassiﬁcation for Advisor Transaction(1)
Adjustment for dilution

Options outstanding, December 31, 1999

Granted in 2000
Exercised in 2000
Forfeited in 2000

Options outstanding, December 31, 2000

Granted in 2001
Exercised in 2001
Forfeited in 2001

Number of Shares

Non-Employee
Directors

9,996
4,998
– 
– 
131,100
– 
285

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

146,379
80,000
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

226,379
90,000
(20,000)
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Employees

– 
– 
– 
(23,690)
1,321,322
1,447,083
33,537

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2,778,252
1,852,059
(412,734)
(682,005)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

3,535,572
1,618,400
(1,262,811)
(107,939)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Other

2,384,476
– 
(68,233)
(4,166)
– 
(1,447,083)
16,169

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

881,163
80,000
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

961,163
100,000
(25,000)
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Options outstanding, December 31, 2001

3,783,222
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

296,379
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

1,036,163
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Average
Strike Price

$15.00
$57.50
$15.00
$24.94
$25.62
$15.00
$14.72

$19.03
$17.34
$15.67
$25.47

$18.97
$20.31
$16.48
$27.27

$18.98

Explanatory Note:
(1) Represents the reclassiﬁcation of stock options originally granted to the Former Advisor and regranted to its employees who became employees of

the Company upon consummation of the Advisor Transaction (see Note 4). 

The  following  table  summarizes  information  concerning  outstanding  and  exercisable  options  as  of

December 31, 2001: 

Exercise Price Range
$14.72–$15.00(1)
$16.69–$16.88
$17.38–$17.56
$19.50–$19.69
$20.33–$21.44
$22.44
$23.32–$23.64
$24.13–$24.90
$25.10–$26.09
$26.30–$26.97
$27.00
$28.26–$28.54
$30.33
$33.15–$33.70
$55.39

Options Outstanding

Weighted
Average
Remaining
Contractual
Life

Weighted
Average
Exercise
Price

Options Exercisable

Weighted
Average
Exercisable Exercise Price

Currently

Options
Outstanding

1,201,154
862,189
537,500
1,691,350
255,750
20,000
67,964
217,500
21,700
91,700
25,000
41,238
67,275
10,350
5,094

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

5,115,764
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

5.27
8.03
8.22
9.07
5.93
8.75
2.38
6.10
4.64
2.58
9.48
1.91
1.40
0.97
7.42

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$14.73
$16.86
$17.39
$19.69
$20.99
$22.44
$23.57
$24.53
$26.04
$26.73
$27.00
$28.37
$30.33
$33.39
$55.39

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

993,314
127,870
170,835
2,083
148,118
6,667
48,651
216,500
20,700
89,700
– 
41,238
57,217
10,350
3,396

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$14.72
$16.88
$17.38
$19.54
$21.04
$22.44
$23.54
$24.53
$26.09
$26.72
$
– 
$28.37
$30.33
$33.39
$55.39

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

7.23
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$18.60
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

1,936,639
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$18.53
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Explanatory Note:
(1) Includes approximately 764,000 options which were granted, on a fully exercisable basis, in connection with the Recapitalization Transactions, and
which are now held by a privately-owned a´liate of Starwood Capital Group. Beneﬁcial interests in these options were subsequently regranted by
that a´liate to employees of Starwood Capital Group and its a´liates, subject to vesting requirements. In the event that these employees forfeit
such  options,  they  revert  to  the  a´liate  of  Starwood  Capital  Group,  which  may  regrant  them  at  its  discretion.  As  of  December  31,  2001,
approximately 520,000 of these options are currently exercisable by the beneﬁcial owners. 

The  Company  has  elected  to  use  the  intrinsic  method  for  accounting  for  options  issued  to  employees  or
directors, as allowed under Statement of Financial Accounting Standards No. 123 “Accounting for Stock Based
Compensation” (“SFAS No. 123”) and, accordingly, recognizes no compensation charge in connection with these

options to the extent that the options exercise price equals or exceeds the quoted price of the Company’s com-
mon shares at the date of grant or measurement date. In connection with the Advisor Transaction, as part of the
computation of the one-time charge to earnings, the Company calculated a deferred compensation charge of
approximately $5.1 million. This deferred charge represents the difference of the closing sales price of the shares
of Common Stock on the date of the Advisor Transaction of $20.25 over the strike price of the options of $14.72
per share (as adjusted) for the unvested portion of the options granted to former employees of the Advisor who
are now employees of the Company. This deferred charge will be amortized over the related remaining vesting
terms to the individual employees as additional compensation expense. 

In connection with the original grant of options in March 1998 to its external advisor, the Company utilized
the  option  value  method  as  required  by  SFAS  No.  123. An  independent  ﬁnancial  advisory  ﬁrm  estimated  the
value of these options at date of grant to be approximately $2.40 per share using a Black-Scholes valuation model.
In the absence of comparable historical market information for the Company, the advisory ﬁrm utilized assump-
tions consistent with activity of a comparable peer group of companies, including an estimated option life of ﬁve
years, a 27.5% volatility rate and an estimated annual dividend rate of 8.5%. The resulting charge to earnings was
calculated as the number of options allocated to the Advisor multiplied by the estimated value at consummation.
A charge of approximately $6.0 million was reﬂected in the Company’s ﬁrst quarter 1998 ﬁnancial results for this
original grant. 

Had the Company’s compensation costs been determined using the fair value method of accounting for stock
options issued under the Plan to employees and directors prescribed by SFAS No. 123, the Company’s net income
for the ﬁscal years ended December 31, 2001, 2000 and 1999 would have been reduced on a pro forma basis by
approximately $705,000, $275,000 and $141,000 respectively. This would not have signiﬁcantly impacted earn-
ings per share. 

The fair value of each signiﬁcant option grant is estimated on the date of grant (January 2, 2001 for the 2001
options) using the Black-Scholes model. For the above SFAS No. 123 calculation, the following assumptions were
used for the Company’s fair value calculations of stock options: 

i
S
t
a
r
F
i
n
a
n
c
i
a
l
a
n
n
u
a
l

r
e
p
o
r
t
2
0
0
1

Expected life (in years)
Risk-free interest rate
Volatility
Dividend yield

2001

5
4.96%
20.83%
12.00%

2000

5
5.30%
26.80%
13.50%

1999

5
5.91%
33.63%
11.85%

part [ 03 ]

Future charges may be taken to the extent of additional option grants, which are at the discretion of the Board

of Directors. 

53.

During the year ended December 31, 2001, the Company granted 94,859 restricted shares to employees in lieu
of cash bonuses for the year ended December 31, 2000 at the employees’ election. These restricted shares were
immediately vested on the date of grant and are not transferable for a period of one year following vesting. 

During the year ended December 31, 2001, the Company entered into a new three-year employment agree-
ment with its chief executive o´cer. Under the agreement, the Chief Executive O´cer receives an annual base
salary of $1.0 million. He may also receive a bonus, which is targeted to be an amount equal to his base salary, if
the Company achieves certain performance targets set by the Compensation Committee in consultation with
the Chief Executive O´cer. The bonus award may be increased or reduced from the target depending upon the
degree to which the performance goals are exceeded or are not met. The bonus amount may not exceed 200% of
his base salary. The bonus was $800,000 in 2001. The bonus is reduced by the amount of any dividends paid to
the Chief Executive O´cer in respect of phantom shares (described below) which are awarded to him and have
vested. The Chief Executive O´cer received approximately $643,000 in such dividends in 2001. As part of this
agreement, the Company conﬁrmed a prior grant of 750,000 stock options made to the executive on March 2,
2001 with an exercise price of $19.69, which represented the market price at the date of the original contingent
grant. However, because the grant required further approval by the compensation committee and the Board of
Directors, no measurement date occurred for accounting purposes until such approvals were made, at which
point  the  market  price  of  the  Company’s  Common  Stock  was  $24.90. Accordingly,  an  aggregate  charge  of
approximately $3.9 million will be recognized with respect to these options over the terms of this agreement. The
options will vest in equal installments of 250,000 shares in each January beginning with January 2002. 

 
 
 
 
The Company also granted the executive 2.0 million unvested phantom shares, each of which represents one
share  of  the  Company’s  Common  Stock. These  shares  will  vest  in  installments  of  350,000  shares,
650,000 shares, 600,000 shares and 400,000 shares on a contingent basis if the 60-day average closing price of
the Company’s Common Stock achieves thresholds of $25.00, $30.00, $34.00 and $37.00, respectively. As of
December  31,  2001,  the  $25.00  threshold  has  been  attained  and  350,000  of  these  shares  have  contingently
vested. Shares that have contingently vested generally will not become fully vested until the end of the three-year
term of the agreement, except upon certain termination or change of control events. Further, if the stock price
drops below certain speciﬁed levels for the 60-day average before such date, they would also not fully vest and be
forfeited. The executive will receive dividends on shares that have contingently or fully vested and have not been
forfeited  under  the  terms  of  the  agreement,  if  and  when  the  Company  declares  and  pays  dividends  on  its
Common Stock. Because no shares have been issued, dividends received on these phantom shares, if any, will be
reﬂected as compensation expense by the Company. For accounting purposes, this arrangement will be treated
as  a  contingent,  variable  plan  and  no  compensation  will  be  recognized  until  the  shares,  in  whole  or  in  part,
become irrevocably vested, where upon the Company will reﬂect a charge equal to the then fair value of the
phantom shares irrevocably vested. 

In addition, the Company entered into a three-year employment agreement, subject to a one-year extension
option, with an executive in connection with his appointment as President of the Company. Under the agree-
ment, in lieu of salary and bonus, the Company granted the executive 500,000 unvested restricted shares. The
vesting of the shares is a function of the total return realized by the Company’s common shareholders, as meas-
ured by cumulative dividends paid on the Company’s Common Stock from and after January 1, 2001 and the mar-
ket  price  of  the  Company’s  Common  Stock.  If  the  total  shareholder  return  as  of  a  measurement  date
contemplated by the agreement is between 0% and 29.99%, then between zero and 150,000 restricted shares are
subject to contingent vesting using straight-line interpolation. If the total return is between 30.00% and 60.00%,
then the balance of the shares are subject to contingent vesting using straight-line interpolation. Contingently
vested shares will become fully vested shares (no longer subject to forfeiture) if the executive remains employed
through the term of the agreement, or earlier if there is a change of control event, a termination without cause, a
termination with good reason or an event of death or disability. In addition, the entire 500,000 share grant will
automatically become fully vested on September 30, 2002 if the target shareholder total return of 60.00% is
achieved  for  60 consecutive  calendar  days  on  or  prior  to  September  30,  2002.  None  of  the  shares  will  vest
(regardless of the total rate of return to shareholders) if the executive voluntarily terminates his employment
without good reason before September 30, 2002. 

If the executive voluntarily resigns without good reason after September 30, 2002, then some or all of his
restricted shares will become fully vested on such date, depending upon the level of total shareholder returns
that have been achieved at that date. Until shares under the agreement are otherwise vested or forfeited, the
executive will receive dividends on the share grant during the term of the agreement if and when the Company
declares  and  pays  dividends  on  its  Common  Stock.  For  ﬁnancial  statement  purposes,  such  dividends  were
accounted for in a manner consistent with the the Company’s normal Common Stock dividends as a reduction to
retained earnings. None of these restricted shares were vested at December 31, 2001. For accounting purposes,
this arrangement will be treated as a contingent, variable plan and no compensation will be recognized until the
shares, in whole or in part, become irrevocably vested, whereupon the Company will reﬂect a charge equal to the
then fair value of the restricted shares vested. 

SOFIV Management, L.L.C. and Starwood Capital Group I, L.P., each a beneﬁcial owner of the Company’s
Common  Stock,  and  the  Company’s  Chief  Executive  O´cer  entered  into  an  agreement  with  the  Company
whereby they agreed to reimburse the Company, through the delivery of cash or shares, 87.5% of the value of any
shares granted to the President pursuant to his employment agreement in excess of 350,000 shares, less the value
of any tax beneﬁts realized by the Company or its shareholders on account of compensation expense deductions. 
During the year ended December 31, 2000, the Company granted 143,646 restricted shares to employees. Of
this total, 74,996 restricted shares were granted in lieu of cash bonuses at the employees’ election, were immedi-
ately vested on the date of grant, and were not transferable for a period of one year following vesting. An addi-
tional 68,650 of such restricted shares vest over periods ranging from one to three years following the date of
grant and are transferable upon vesting. For accounting purposes, the Company measures compensation costs
for these shares as of the date of the grant and is charging such amount to earnings at the grant date if no vesting
period existed or ratably over the respective vesting period.

On July 28, 2000, the Company granted to its employees proﬁts interests in a wholly-owned subsidiary of the
Company called iStar Venture Direct Holdings, LLC. iStar Venture Direct Holdings, LLC has a net investment
of $1.4 million in the preferred stock of three real estate-related technology companies. The proﬁts interests
have three-year vesting schedules, and are subject to forfeiture in the event of termination of employment for
cause or a voluntary resignation. 

Effective November 4, 1999, the Company implemented a savings and retirement plan (the “401(k) Plan”), which
is a voluntary, deﬁned contribution plan. All employees are eligible to participate in the 401 (k) Plan following com-
pletion of six months of continuous service with the Company. Each participant may contribute on a pretax basis
between 2% and 15% of such participant’s compensation. At the discretion of the Board of Directors, the Company
may make matching contributions on the participant’s behalf of up to 50% of the ﬁrst 10% of the participant’s
annual contribution. The Company made gross contributions of approximately $319,000 and $320,000 to the
401(k) Plan for the years ended December 31, 2001 and 2000, respectively. 

Note 11 – Earnings Per Share

The following table presents a reconciliation of the numerators and denominators of the basic and diluted
EPS calculations for the years ended December 31, 2001, 2000 and 1999, respectively (in thousands, except per
share data): 

2001

2000

1999

Numerator:
Net income before extraordinary loss, cumulative effect of change in accounting 

principle and allocation to the former class B shares

Preferred dividend requirements

$231,814
(36,908)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$218,291
(36,908)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 38,886
(23,843)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Net income allocable to common shareholders before extraordinary loss, cumulative 

effect of change in accounting principle and allocation to the former class B shares 194,906
(1,620)
(282)
– 

Extraordinary loss on early extinguishment of debt
Cumulative effect of change in accounting principle
Net income allocable to the former class B shares

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Net income allocable to common shareholders

$193,004
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

181,383
(705)
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$180,678
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

15,043
– 
– 
(826)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ 14,217
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Denominator:
Weighted average common shares outstanding for basic earnings per common share
Add: effect of assumed shares issued under treasury stock method for 

stock options and restricted shares

Add: effect of contingent shares
Add: effects of conversion of the former class B shares (49-for-one)
Add: effects of assumed warrants exercised under treasury stock method for 

stock options

Weighted average common shares outstanding for diluted earnings per common share

86,349

85,441

57,749

1,680
205
– 

710
– 
– 

1,500
– 
450

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

–

88,234
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 

86,151
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

694

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

60,393
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Basic earnings per common share:
Net income allocable to common shareholders before extraordinary loss and 

cumulative effect of change in accounting principle

Extraordinary loss on early extinguishment of debt
Cumulative effect of change in accounting principle

Net income allocable to common shareholders

Diluted earnings per common share:
Net income allocable to common shareholders before extraordinary loss and 

cumulative effect of change in accounting principle

Extraordinary loss on early extinguishment of debt
Cumulative effect of change in accounting principle

Net income allocable to common shareholders

$  2.26
(0.02)
(0.00)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$  2.24
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$  2.21
(0.02)
(0.00)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$  2.19
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$  2.12
(0.01)
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$  2.11
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$  2.11
(0.01)
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$  2.10
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$0.25
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$0.25
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$0.25
– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$0.25
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

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part [ 03 ]

55.

 
 
 
 
Prior to November 4, 1999, Basic EPS was computed based on the income allocable to class A shares (net
income  reduced  by  accrued  dividends  on  preferred  shares  and  by  1%  allocated  to  the  former  class  B  shares),
divided by the weighted average number of class A shares outstanding during the period. Diluted EPS was based
on the net earnings allocable to class A shares plus dividends on the former class B shares which were convertible
into class A shares, divided by the weighted average number of class A shares and dilutive potential class A shares
that were outstanding during the period. Dilutive potential class A shares included the former class B shares,
which were convertible into class A shares at a rate of 49 former class B shares for one class A share, and poten-
tially dilutive options to purchase class A shares issued to the Former Advisor and the Company’s directors and
warrants to acquire class A shares. 

As more fully described in Note 4, in the Incorporation Merger, the class A shares and the former class B
shares were converted into shares of Common Stock and, as a result, the Company no longer has multiple classes
of common shares. 

Note 12 – Comprehensive Income

In  June  1997,  the  FASB  issued  Statement  of  Financial Accounting  Standards  No.  130  (“SFAS  No.  130”),
“Reporting Comprehensive Income” effective for ﬁscal years beginning after December 15, 1997. The statement
changes the reporting of certain items currently reported as changes in the shareholders’ equity section of the
balance sheet and establishes standards for the reporting and display of comprehensive income and its compo-
nents in a full set of general-purpose ﬁnancial statements. SFAS No. 130 requires that all components of compre-
hensive  income  shall  be  reported  in  the  ﬁnancial  statements  in  the  period  in  which  they  are  recognized.
Furthermore,  a  total  amount  for  comprehensive  income  shall  be  displayed  in  the  ﬁnancial  statements. The
Company has adopted this standard effective January 1, 1998. Total comprehensive income was $214.8 million,
$217.8 million and $38.7 million for the years ended December 31, 2001, 2000 and 1999, respectively. The primary
component  of  comprehensive  income  other  than  net  income  was  the  adoption  and  continued  application  of
SFAS No. 133. 

For the year ended December 31, 2001, the change in fair market value of the Company’s interest rate swaps was
$(11.3) million and was recorded as a reduction to other comprehensive income. The reconciliation to other compre-
hensive income is as follows (in thousands): 

For the Year Ended December 31,
2000

1999

2001

Net income
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale investments for the period
Cumulative effect of change in accounting principle (SFAS No. 133) on 

other comprehensive income

Unrealized gains (losses) on cash ﬂow hedges

Comprehensive income

$229,912

$217,586

$38,886

5,709

209

(206)

(9,445)
(11,336)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$214,840
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

– 
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$217,795
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$38,680
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

As of December 31, 2001 and 2000, accumulated other comprehensive income reﬂected in the Company’s

equity on the balance sheet is comprised of the following (in thousands): 

As of December 31,

2001

2000

Unrealized gains (losses) on available-for-sale investments
Unrealized gains (losses) on cash ﬂow hedges

Accumulated other comprehensive income

$

5,689
(20,781)

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$ (20)
– 

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(15,092)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

$(20)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Note 13 – Dividends

In order to maintain its election to qualify as a REIT, the Company must currently distribute, at a minimum,
an amount equal to 90% of its taxable income and must distribute 100% of its taxable income to avoid paying
corporate federal income taxes. The Company anticipates it will distribute all of its taxable income to its share-
holders. Because taxable income differs from cash ﬂow from operations due to non-cash revenues or expenses, in
certain circumstances, the Company may be required to borrow to make su´cient dividend payments to meet
this anticipated dividend threshold. 

For the year ended December 31, 2001, total dividends declared by the Company aggregated $213.1 million, or
$2.45 per common share, consisting of quarterly dividends of $0.6125 per share which were declared on April 2,
2001, July 2, 2001, October 1, 2001 and December 3, 2001. The dividend attributable to the fourth quarter 2000
was $51.4 million, or $0.60 per share of Common Stock, and was paid on January 12, 2001. The Company also
declared  dividends  aggregating  $20.9  million,  $4.7  million,  $3.0  million  and  $8.0 million,  respectively,  on  its
Series A, B, C and D preferred stock, respectively, for the year ended December 31, 2001. There are no divided
arrearages on any of the preferred shares currently outstanding. 

The Series A preferred stock has a liquidation preference of $50.00 per share and carries an initial dividend yield
of 9.50% per annum. The dividend rate on the preferred shares will increase to 9.75% on December 15, 2005, to
10.00% on December 15, 2006 and to 10.25% on December 15, 2007 and thereafter. Dividends on the Series A pre-
ferred shares are payable quarterly in arrears and are cumulative. 

Holders of shares of the Series B preferred stock are entitled to receive, when and as declared by the Board of
Directors, out of funds legally available for the payment of dividends, cumulative preferential cash dividends at the
rate of 9.375% per annum of the $25.00 liquidation preference, equivalent to a ﬁxed annual rate of $2.34 per share.
Dividends are cumulative from the date of original issue and are payable quarterly in arrears on or before the 15th day
of each March, June, September and December or, if not a business day, the next succeeding business day. Any divi-
dend payable on the Series B preferred stock for any partial dividend period will be computed on the basis of a 
360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as of the close of
business on the ﬁrst day of the calendar month in which the applicable dividend payment date falls or on another
date designated by the Board of Directors of the Company for the payment of dividends that is not more than
30 nor less than ten days prior to the dividend payment date. 

Holders of shares of the Series C preferred stock are entitled to receive, when and as declared by the Board of
Directors, out of funds legally available for the payment of dividends, cumulative preferential cash dividends at
the rate of 9.20% per annum of the $25.00 liquidation preference, equivalent to a ﬁxed annual rate of $2.30 per
share. The remaining terms relating to dividends of the Series C preferred stock are substantially identical to the
terms of the Series B preferred stock described above. 

Holders of shares of the Series D preferred stock are entitled to receive, when and as declared by the Board of
Directors, out of funds legally available for the payment of dividends, cumulative preferential cash dividends at
the rate of 8.00% per annum of the $25.00 liquidation preference, equivalent to a ﬁxed annual rate of $2.00 per
share. The remaining terms relating to dividends of the Series D preferred stock are substantially identical to the
terms of the Series B preferred stock described above. 

The exact amount of future quarterly dividends to common shareholders will be determined by the Board of
Directors based on the Company’s actual and expected operations for the ﬁscal year and the Company’s overall
liquidity position. 

Note 14 – Fair Values of Financial Instruments

SFAS No. 107, “Disclosures About Fair Value of Financial Instruments” (“SFAS No. 107”), requires the disclo-
sure of the estimated fair values of ﬁnancial instruments. The fair value of a ﬁnancial instrument is the amount at
which the instrument could be exchanged in a current transaction between willing parties, other than in a forced
or  liquidation  sale.  Quoted  market  prices,  if  available,  are  utilized  as  estimates  of  the  fair  values  of  ﬁnancial
instruments.  Because  no  quoted  market  prices  exist  for  a  signiﬁcant  part  of  the  Company’s  ﬁnancial  instru-
ments, the fair values of such instruments have been derived based on management’s assumptions, the amount
and  timing  of  future  cash  ﬂows  and  estimated  discount  rates. The  estimation  methods  for  individual
classiﬁcations of ﬁnancial instruments are described more fully below. Different assumptions could signiﬁcantly
affect these estimates. Accordingly, the net realizable values could be materially different from the estimates pre-
sented below. The provisions of SFAS No. 107 do not require the disclosure of the fair value of non-ﬁnancial
instruments, including intangible assets or the Company’s corporate tenant lease assets. 

In addition, the estimates are only indicative of the value of individual ﬁnancial instruments and should not be

considered an indication of the fair value of the Company as an operating business. 

Short-Term Financial Instruments – The carrying values of short-term ﬁnancial instruments including cash and
cash equivalents and short-term investments approximate the fair values of these instruments. These ﬁnancial

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instruments generally expose the Company to limited credit risk and have no stated maturities, or have an aver-
age maturity of less than 90 days and carry interest rates which approximate market. 

Loans and Other Lending Investments – For the Company’s interests in loans and other lending investments, the
fair values were estimated by discounting the future contractual cash ﬂows (excluding participation interests in the
sale or reﬁnancing proceeds of the underlying collateral) using estimated current market rates at which similar loans
would be made to borrowers with similar credit ratings for the same remaining maturities. 

Marketable Securities – Securities held for investment, securities available for sale, loans held for sale, trading
account instruments, long-term debt and trust preferred securities traded actively in the secondary market have
been valued using quoted market prices. 

Other  Financial  Instruments – The  carrying  value  of  other  ﬁnancial  instruments  including,  restricted  cash,
accrued interest receivable, accounts payable, accrued expenses and other liabilities approximate the fair values
of the instruments. 

Debt Obligations – A substantial portion of the Company’s existing debt obligations bear interest at ﬁxed mar-
gins  over  LIBOR.  Such  margins  may  be  higher  or  lower  than  those  at  which  the  Company  could  currently
replace the related ﬁnancing arrangements. Other obligations of the Company bear interest at ﬁxed rates, which
may differ from prevailing market interest rates. As a result, the fair values of the Company’s debt obligations
were estimated by discounting current debt balances from December 31, 2001 and 2000 to maturity using esti-
mated current market rates at which the Company could enter into similar ﬁnancing arrangements. 

Interest Rate Protection Agreements – The fair value of interest rate protection agreements such as interest rate
caps, ﬂoors, collars and swaps used for hedging purposes (see Note 9) is the estimated amount the Company would
receive or pay to terminate these agreements at the reporting date, taking into account current interest rates and
current creditworthiness of the respective counterparties. 

The book and fair values of ﬁnancial instruments as of December 31, 2001 and 2000 were (in thousands): 

Financial assets:
Loans and other lending investments
Marketable securities
Provision for loan losses

Financial liabilities:
Debt obligations
Interest rate protection agreements

Note 15 – Segment Reporting

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2001

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

2000

Book Value

Fair Value

Book Value

Fair Value

$2,398,763
285
(21,000)

$2,508,119
285
(21,000)

$2,239,183
41
(14,000)

$2,333,112
41
(14,000)

2,495,369
1,521

2,506,046
(18,925)

2,131,967
2,495

2,135,574
(7,261)

Statement of Financial Accounting Standard No. 131 (“SFAS No. 131”) establishes standards for the way that
public  business  enterprises  report  information  about  operating  segments  in  annual  ﬁnancial  statements  and
requires that those enterprises report selected ﬁnancial information about operating segments in interim ﬁnan-
cial reports issued to shareholders. 

The  Company  has  two  reportable  segments:  Real  Estate  Lending  and  Corporate Tenant  Leasing. The
Company does not have substantial foreign operations. The accounting policies of the segments are the same as
those described in Note 3. The Company has no single customer that accounts for 10% or more of revenues (see
Note 9 for other information regarding concentrations of credit risk). 

The Company evaluates performance based on the following ﬁnancial measures for each segment: 

2001:
Total revenues:(3)
Total operating and interest expense:(4)
Net operating income before minority interests:(5)
Total long-lived assets:(6)
Total assets:

2000:
Total revenues:(3)
Total operating and interest expense:(4)
Net operating income before minority interests:(5)
Total long-lived assets:(6)
Total assets:

1999:
Total revenues:(3)
Total operating and interest expense:(4)
Net operating income before minority interests:(5)
Total long-lived assets:(6)
Total assets:

Real Estate
Lending

Corporate
Tenant
Leasing(1)

Corporate/

Other(2)

Company
Total

(In thousands)

$ 282,802
121,053
161,749
2,377,763
2,377,763

$  279,680
115,906
163,774
2,225,183
2,225,183

$  209,848
70,778
139,070
2,003,506
2,003,506

$ 204,001
104,510
99,491
1,841,800
1,841,800

$ 191,821
111,808
80,013
1,670,169
1,670,169

$ 

42,186
36,749
5,437
1,714,284
1,714,284

$ (2,627)
27,726
(30,353)
N/A
158,997

$ 484,176
253,289
230,887
4,219,563
4,378,560

$

321
28,570
(28,249)
N/A
139,423

$  471,822
256,284
215,538
3,895,352
4,034,775

$ 12,763
118,343
(105,580)
N/A
95,762

$  264,797
225,870
38,927
3,717,790
3,813,552

Explanatory Notes:
(1) Includes the Company’s pre-existing Corporate Tenant Leasing investments since March 18, 1998 and the Corporate Tenant Leasing business

acquired in the TriNet Acquisition since November 4, 1999. 

(2) Corporate  and  Other  represents  all  corporate  level  items,  including  general  and  administrative  expenses  and  any  intercompany  eliminations
necessary to reconcile to the consolidated Company totals. This caption also includes the Company’s servicing business, which is not considered a
material separate segment. In addition, as more fully discussed in Note 4, Corporate and Other for the year ended December 31, 1999 includes a non-
recurring, non-cash charge of approximately $94.5 million relating to the Advisor Transaction. 

(3) Total revenues represents all revenues earned during the period from the assets in each segment. Revenue from the Real Estate Lending business

primarily represents interest income and revenue from the Corporate Tenant Leasing business primarily represents operating lease income. 

(4) Total operating and interest expense represents provision for loan losses for the Real Estate Lending business and operating costs on corporate tenant
lease assets for the Corporate Tenant Leasing business, as well as interest expense speciﬁcally related to each segment. General and administrative
expense, advisory fees (prior to November 4, 1999) and stock-based compensation expense is included in Corporate and Other for all periods.
Depreciation and amortization of $35,642, $34,514 and $10,340 in 2001, 2000 and 1999, respectively, are included in the amounts presented above. 
(5) Net operating income before minority interests represents net operating income before minority interest, gain on sale of corporate tenant lease

assets and extraordinary loss as deﬁned in note (3) above, less total operating and interest expense, as deﬁned in note 4 above. 

(6) Total long-lived assets is comprised of Loans and Other Lending Investments, net and Corporate Tenant Lease Assets, net, for each respective segment. 

Note 16 – Quarterly Financial Information (Unaudited)

The following table sets forth the selected quarterly ﬁnancial data for the Company (in thousands, except per

share amounts). 

2001:
Revenue
Net income
Net income allocable to common shares
Net income per common share – basic
Weighted average common shares outstanding – basic

2000:
Revenue
Net income
Net income allocable to common shares
Net income per common share – basic
Weighted average common shares outstanding – basic

December 31, September 30,

June 30,

March 31,

Quarter Ended

$119,902
58,755
49,528
0.57
86,969

$

$122,337
56,177
46,950
0.55
85,731

$

$120,830
57,553
48,326
0.56
86,470

$

$120,683
55,591
46,364
0.54
85,662

$

$120,825
58,960
49,733
0.58
86,081

$

$117,914
53,829
44,602
0.52
85,281

$

$122,619
54,644
45,417
0.53
85,833

$

$110,888
51,989
42,762
0.50
85,087

$

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59.

 
 
 
 
COMMON STOCK PRICE AND DIVIDENDS (UNAUDITED)

The high and low sales prices per share of Common Stock are set forth below for the periods indicated. 

Quarter Ended

2000
March 31, 2000
June 30, 2000
September 30, 2000
December 31, 2000

2001
March 31, 2001
June 30, 2001
September 30, 2001
December 31, 2001

High

Low

$183⁄4
$2015⁄16
$227⁄16
$215⁄8

$251⁄4
$281⁄5
$281⁄2
$261⁄20

$16 5⁄8
$17 3⁄8
$20 1⁄4
$19 1⁄16

$191⁄5
$226⁄7
$221⁄2
$23 1⁄100

On March 15, 2002, the closing sale price of the Common Stock as reported by the NYSE was $28.29. The

Company had approximately 2,025 holders of record of Common Stock as of March 15, 2002. 

The following table sets forth the dividends paid or declared by the Company on its Common Stock: 

Quarter Ended

2000
March 31, 2000
June 30, 2000
September 30, 2000
December 31, 2000

2001(2)
March 31, 2001
June 30, 2001
September 30, 2001
December 31, 2001

Shareholder Record Date

Dividend/Share

April 14, 2000
July 17, 2000
October 16, 2000
December 29, 2000

April 16, 2001
July 16, 2001
October 15, 2001
December 17, 2001

$   0.60
$    0.60
$   0.60
$   0.60(1)

$0.6125
$0.6125
$0.6125
$0.6125

Explanatory Notes:
(1) A portion of this quarterly dividend (approximately $0.5976 per share) was treated as income to shareholders of record in 2000, and the remainder

was treated as 2001 income. 

(2) For tax reporting purposes, the 2001 dividends were classiﬁed as 90.55% ($2.2206) ordinary income and 9.45% ($0.2318) return of capital. 

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Directors
––
Jay Sugarman (3)
Chairman and Chief Executive Officer,
iStar Financial Inc.

Willis Andersen, Jr. (1)
Principal, REIT
Consulting Services

Jeffrey G. Dishner (3)
Senior Managing Director,
Starwood Capital Group

Andrew L. Farkas
Chairman and Chief Executive Officer,
Insignia Financial Group, Inc.

Madison F. Grose (4)
Senior Managing Director,
Starwood Capital Group

Spencer B. Haber (3)
President and Chief Financial Officer,
iStar Financial Inc. 

Robert W. Holman, Jr. (4)
Managing Director,
Pebble Beach Institute

Merrick R. Kleeman
Senior Managing Director,
Starwood Capital Group

Robin Josephs (1) (2)
President, Ropasada, LLC

H. Cabot Lodge III
Executive Vice President – Investments
iStar Financial Inc.

Matthew J. Lustig (1) (2)
Managing Director, Lazard Frères
Real Estate Investors, LLC

William M. Matthes
Managing Partner, Behrman Capital

John G. McDonald (2) (4)
Professor of Finance, Stanford University
Graduate School of Business

Stephen B. Oresman (2)
President, Saltash, Ltd.

George R. Puskar  (3)
Former Chairman, Lend Lease
Real Estate Investments

Barry S. Sternlicht (3)
Chairman and Chief Executive Officer, 
Starwood Hotels and Resorts

(1) Audit Committee
(2) Compensation Committee
(3) Investment Committee
(4) Nominating and 

Governance Committee

Officers
––
Jay Sugarman
Chairman and Chief Executive Officer

Spencer B. Haber
President and Chief Financial Officer

Regional Offices
––
175 Federal Street, 8th Floor
Boston, MA 02110
tel:  (617) 292-3333
fax: (617) 423-3322

Timothy J. O’Connor
Executive Vice President and
Chief Operating Officer

Nina B. Matis
Executive Vice President and
General Counsel

Barbara Rubin
President – iStar Asset Services

Executive Vice Presidents – Investments
––
Daniel S. Abrams
Roger M. Cozzi
Jeffrey R. Digel
R. Michael Dorsch III
Barclay G. Jones III
H. Cabot Lodge III
Diane Olmstead

Senior Vice Presidents
––
Steven R. Blomquist
Jeffrey N. Brown
Chase S. Curtis, Jr.
Geoffrey M. Dugan
Peter K. Kofoed
John F. Kubicko
Andrew C. Richardson
Steven B. Sinnett
Elizabeth B. Smith

Headquarters
––
iStar Financial Inc.
1114 Avenue of the Americas
New York, NY 10036
tel: (212) 930-9400
fax: (212) 930-9494

Super-Regional Offices
––
One Embarcadero Center, 33rd Floor
San Francisco, CA 94111
tel: (415) 391-4300
fax: (415) 391-6529

3480 Preston Ridge Road, Suite 575
Alpharetta, GA 30005
tel:  (678) 297-0100
fax: (678) 297-0101

100 Great Meadow Road, Suite 603
Wethersfield, CT 06109
tel: (860) 258-2202
fax: (860) 258-2268

304 Inverness Way South, Suite 195
Englewood, CO 80112
tel: (303) 790-4656
fax: (303) 790-4680

6565 North MacArthur Blvd., Suite 410
Irving, TX 75039
tel: (972) 506-3131
fax: (972) 501-0078

Employees
––
At March 15, 2002, the Company had 
134 employees.

Independent Auditors
––
PricewaterhouseCoopers LLP
New York, NY

Registrar and Transfer Agent
––
EquiServe Trust Company, N.A.
525 Washington Boulevard
Jersey City, NJ 07310
(800) 756-8200

Dividend Reinvestment Plan
––
Registered shareholders may reinvest divi-
dends through the Company’s dividend
reinvestment plan. For more information,
please call the Transfer Agent or the
Company at the numbers listed above.

Annual Meeting of Shareholders
––
May 29, 2002, 8:30 a.m. EST
Sofitel Hotel
45 West 44th Street,
New York, NY 10036

Investor Information Services
––
For help with questions about the Company,
and to receive additional corporate informa-
tion, please contact:

Investor Relations Department
iStar  Financial Inc. 
1114 Avenue of the Americas
New York, NY 10036
tel: (212) 930-9400
fax: (212) 930-9455
e-mail: investors@istarfinancial.com

iStar Financial Web site
––
http://www.istarfinancial.com

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iStar Financial Inc.

NYSE: SFI