Anthracite Capital, Inc. Reports 16% Increase in Operating Earnings for the Year 2002 Over Prior Year; Full Year GAAP Earnings Decline 12.6% Over Prior Year.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 14, 2003 Net Asset Value Increases 4.6% Over Prior Year - Economic Return of 23% Including Dividends Paid Anthracite anthracite (ăn`thrəsīt'): see coal. anthracite or hard coal Coal containing more fixed carbon than any other form of coal and the lowest amount of volatile (quickly evaporating) material, giving it the Capital, Inc. (the "Company") (NYSE NYSE See: New York Stock Exchange : AHR AHR Aryl Hydrocarbon Receptor AHR American Historical Review (Journal of the American History Association) AHR Anchor AHR airway hyper-responsiveness AHR Assisted Human Reproduction AHR Air-Conditioning Heating Refrigeration ) today reported fourth quarter earnings from its operating portfolio ("Operating Earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before ") of $0.41 per share versus $0.44 per share for the same period last year. Operating Earnings for the full year ended December 31, 2002 was $1.67 per share versus $1.44 per share for the year ended December 31, 2001. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Net Income for the fourth quarter was $0.11 per share versus $0.31 per share for the same period last year. GAAP Net Income for the full year ending December 31, 2002 was $1.18 per share versus $1.35 per share for the year ended December 31, 2001. (All numbers are thousands, except per share amounts) Operating Earnings is net interest income after operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. and preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) but before gains and losses and the effects of changes in accounting principles and writedowns. Based on the $0.35 per share dividend declared on December 11, 2002, and the February 13, 2003 closing price of $10.40 per share, Anthracite's annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. dividend yield is 13.5%. Net income for the quarter ended December 31, 2002 of $0.11 per share includes a writedown of $10,237 on a franchise loan backed security. As previously described in SEC filings this originally investment grade security was inherited inherited received by inheritance. inherited achondroplastic dwarfism see achondroplastic dwarfism. inherited combined immunodeficiency see combined immune deficiency syndrome (disease). in the May 2000 Core Cap merger. The carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the asset had already been reduced and this writedown has a $0.01 per share effect on the Company's net asset value ("NAV See navigation system and navigation bar. ") from the September 30, 2002 NAV. The remaining book basis of this asset is $3,923 or $0.08 per share. Realized and unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. and losses net out to a loss of $3,628 attributable to paydowns in the residential mortgage backed securities ("RMBS RMBS Residential Mortgage-Backed Securities RMBS Rambus, Inc. (NASDAQ stock symbol) RMBS Russian Mortgage-Backed Securities ") portfolio. The net asset value of the Company decreased to $7.81 per share from $8.31 per share at September 30, 2002 due to higher interest rates and wider spreads on credit sensitive assets. NAV increased 4.6% from $7.47 per share at December 31, 2001. The Company's fourth quarter Operating Earnings represent an annualized return on the quarter's average common stock equity ("Annualized ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. ") of 20.63% and a net interest margin of 3.78%. Annualized ROE for the same period last year was 23.4% and the net interest margin was 4.24%. The components of other gains and (losses) for the quarter and year ended December 31, 2002 include $110 and $236 respectively, of hedge ineffectiveness. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Statement on Financial Accounting Standards No. 133 ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 133"), the hedge ineffectiveness was reclassified from interest expense. The Company uses interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. to hedge its short-term interest risk and reduce exposure to long-term rates. The use of interest rate swaps outside of the Company's collateralized debt obligations Collateralized Debt Obligation (CDO) A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations, ("CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the ") caused the Company's Operating Earnings for the quarter ended December 31, 2002 to be $3,308 lower, or $0.07 per share. Aggregate leverage at December 31, 2002 is unchanged from September 30, 2002 at 5.3:1 debt to capital. Recourse debt on credit sensitive assets decreased substantially from 0.49:1 at September 30, 2002 to 0.12:1 at December 31, 2002 due to the successful issuance of the Company's second CDO in December 2002. The Company's exposure to long-term rates after hedging activity is 3.4% for 100 basis points of rate movement, which is unchanged from September 30, 2002. The Company's exposure to changes in short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. increased during the quarter; as of December 31, 2002, a 50 basis point change in LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). would cause the Company's net income to change by $0.08 annually versus $0.05 annually as of September 30, 2002. At December 31, 2002 and 2001, the Company's invested equity was allocated among the following categories:
Invested Equity as of December 31,
2002 % 2001 %
------------------ ---------------
RMBS $87,720 21.6% 45,331 11.8%
CMBS 147,085 36.2 201,386 52.6
CDO Assets 92,179 22.7 - 0.0
Commercial Real Estate Loans,
Carbon & Joint Ventures 51,107 12.5 101,045 26.4
Cash & Other Assets/Liabilities 28,680 7.0 35,353 9.2
--------- --------
$406,771 100.0% 383,115 100.0%
========= ========
Hugh Frater Fra´ter n. 1. (Eccl.) A monk; also, a frater house. Frater house an apartament in a convent used as an eating room; a refectory; - called also a fratery ltname>. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the Company said: "The principal accomplishment of 2002 was reducing the Company's financing risk and credit risk by issuing two CDO's to match fund the majority of our credit sensitive assets on a non-recourse basis. The Company's biggest challenge in 2003 is to find attractively priced assets in a weak economic climate and a low interest rate environment. The Company's commercial mortgage backed securities ("CMBS CMBS See: Commercial Mortgage Backed Securities ") and loan portfolios are performing in line with credit expectations and the Company is currently underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. additional high yield CMBS transactions. The Company's residential mortgage backed securities ("RMBS") portfolio continues to provide solid earnings and relatively steady mark to market performance despite record prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. levels and volatility throughout 2002. The writedown of the franchise loan security unfortunately reflects the significant softness in this sector; however, this writedown has no material effect on net asset value of the Company. Additionally, the Company does not have any other exposure to this sector. In 2003, we look forward to consistent earnings performance and continuing our steady dividend payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. ." The Company's commercial real estate securities investments consist of a diverse portfolio of CMBS and unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. of commercial real estate operating companies operating company A business that engages in transactions with outsiders. . The total par amount of the commercial real estate securities portfolio excluding CMBS IO's was $1,185,943 and the aggregate market value was $851,266 at December 31, 2002. This represents an increase in par value of 9% from September 30, 2002, and a 57% increase from December 31, 2001. On December 10, 2002, the Company issued non-recourse term debt secured by $313,497 par amount of these assets through a collateralized debt obligation (CDO II). This issuance included a $50 million ramp facility that will be used to finance below investment grade CMBS purchased before September 30, 2003. This innovative feature allows the Company to acquire additional commercial real estate securities with optimal financing available immediately. The use of the CDO as a financing tool mitigates three significant portfolio risks; short term interest rate risk is eliminated as floating rate liabilities are converted to fixed rate with an interest rate swap agreement; mark to market risk is eliminated as there is no need to post liquid assets Cash, or property immediately convertible to cash, such as Securities, notes, life insurance policies with cash surrender values, U.S. savings bonds, or an account receivable. as collateral when the value of the assets changes; and the loss due to an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. is reduced as there is no recourse for realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. to the Company. CDO II together with CDO I which closed in May 2002 brought the total par amount of assets financed on a term basis to $829,338, or 69.9% of the Company's total commercial real estate securities portfolio excluding CMBS IO's. The average loss GAAP adjusted yields weighted by the market value of the assets at December 31, 2002 in the two CDOs is 8.4% and the average cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. after hedging expenses for the two transactions is 6.6%. The amount of Operating Earnings generated by the commercial real estate securities portfolio was $0.19 per share for the three months ended December 31, 2002. The Company's CMBS portfolio includes securities issued by seven different trusts where based on the subordinated position of the securities, puts the Company in the first loss position allowing the Company to control the workout Workout Informal repayment or loan forgiveness arrangement between a borrower and creditors. workout 1. The process of a debtor's meeting a loan commitment by satisfying altered repayment terms. process on approximately $9,616,797 of underlying mortgage loans (the "Controlling Class Securities"). The total par amount owned of these Controlling Class Securities is $692,360 or, 7.2% of the underlying loan balances. The market value at December 31, 2002 was $368,080 with an average dollar price of 53.2. Of these seven trusts, $370,701 of par value, representing $139,110 of market value is collateral for debt other than the debt issued through the two CDOs. The Company performs significant due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. before acquiring Controlling Class securities and of the $9.6 billion of loans underlying the CMBS portfolio, the Company assumes there will be losses of $180,638 or 1.88% of the total. This loss assumption is factored into the GAAP loss-adjusted yields of the Controlling Class securities. Recent studies show that the historical loss experience of CMBS loans is approximately 0.45% of total outstanding balances on a cumulative basis from 1993 to 2001. The Company believes that this period does not take into account the current and expected future state of the economy so greater loss expectations are required. The Company reports net income as determined using generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP") on its commercial mortgage backed securities portfolio net of expected losses over the life of the portfolio. Actual losses were $2,759 during the fourth quarter while delinquencies on the collateral underlying the Company's CMBS portfolio increased to 1.87% at quarter-end from 1.59% at September 30, 2002. The Company fully anticipates that delinquencies and actual losses will increase as the portfolio matures. This loss expectation is consistent with the loss assumptions made by the Company and is reflected in Operating Earnings. The Company's earnings would be affected if actual losses on CMBS collateral were to be greater than expected losses. As of December 31, 2002, the reduction in Operating Earnings for every 50% increase in actual aggregate losses over expected losses would be approximately $0.11 per share per year, excluding the effect of non-cash write-downs of impaired securities. For more information on credit performance and its possible effect on Company performance please refer to the Company's SEC filings. For the three months ended December 31, 2002, the Company's commercial real estate portfolio contributed to the Company's net income as follows:
Net Income from:
Commercial Real Estate Securities $21,782
Commercial Real Estate Loans,
Carbon & Joint Ventures 3,481
Interest Expense (13,085)
Net Income from Commercial Real Estate $12,178
========
The RMBS portfolio continues to provide a store of liquid assets and generates a significant return on equity. As of December 31, 2002 the ending market value of the portfolio was $1,506,450. The majority of the portfolio was low coupon (5.0% - 6.0%) U.S. Government Agency guaranteed fixed rate 15-year residential mortgages. The portfolio was financed with 30-day repurchase agreements Repurchase agreement An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. and hedged with treasury futures and interest rate swaps. The average adjusted purchase price of the RMBS at year-end was 101.43 or $1,476,158. The average yield as of December 31, 2002 4.99% and the average financing rate was 1.37%. This portfolio generates a significant amount of Operating Earnings due to the steep yield curve. The value of the portfolio depends primarily on interest rates, interest rate spreads, and paydowns. The fourth quarter of 2002 saw unprecedented levels of paydowns as interest rates fell and homeowners refinanced existing mortgages. As of December 31, 2002 the average mark to market dollar price of the RMBS portfolio was approximately 103.5 and approximately 12.2% of the portfolio paid down at par during the fourth quarter resulting in losses from these paydowns. The Company manages this risk by maintaining a positive exposure to long-term interest rates. When rates fall, mark to market gains can mitigate losses from ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. paydowns. The net mark to market loss from the RMBS portfolio during the fourth quarter was $3,628 or 0.27% of the total market value and includes mark to market on hedges and losses from paydowns. For the three months ended December 31, 2002, the RMBS portfolio contributed to the Company's net income as follows:
Interest income $17,070
Interest expense (6,094)
Realized & unrealized gain/loss (3,071)
-------------------
Net income from RMBS $7,905
===================
As disclosed in the Company's SEC filings, the Franchise Mortgage Acceptance Corp. Loan Receivable Trust 1998-B ("FMACT 1998-BA") class B security continues to perform poorly. Based on the information provided to us by the FMACT 1998-BA trustee, as of December 16, 2002, there are eight borrowers of the 71 borrowers in the loan pool with loans in the amount of $36,740 which are in default, ten borrowers with loans in the amount of $23,722 which are delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. , and 53 borrowers with loans in the amount of $135,292 which are current. During the fourth quarter of 2002, the servicer of the underlying loans recouped principal and interests advances which were previously made. This action resulted, at least temporarily, in insufficient cash being available to the FMACT 1998-BA trust to make the payments required on the Company's class B security. Under accounting standard 99-20 issued by the Financial Accounting Standards Board's Emerging Issues Task Force ("EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation 99-20"), when significant changes in estimated cash flows occur, and the present value of the revised cash flows using the current expected yield is less than the present value of the previously estimated remaining cash flows, an other-than-temporary impairment is deemed to have occurred. Based on the delinquencies and defaults in the underlying loan pool, and the missed payments on this security during the fourth quarter of 2002, the Company revised its estimated future cash flows from this investment. Accordingly, in accordance with EITF 99-20, the Company determined that its investment was impaired and wrote down the adjusted purchase price of this security by $10,273 to its estimated fair value, and increased the GAAP yield from 7.69% to 20% which is the estimated market yield for a security of this credit quality. These figures incorporate the assumption that an additional $31,203 of losses will be experienced by the underlying pools and an estimate of another 1.0% per year over the remaining life of the trust. This security was part of the CORE Cap acquisition in May of 2000 and was rated AA at that time. This security is currently rated D by Standard & Poors and CC by Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. . This security is backed by franchise loans and is not part of the Company's core business of investing in CMBS. Direct holdings of commercial mezzanine loans A mezzanine loan is a relatively large loan, typically unsecured (ie., not backed by a pledging of assets) or with a deeply subordinated security structure (e.g., third lien on the property but non-recourse vis-a-vis the borrower). are held at cost unless a specific indication of impairment exists. To date, the Company's portfolio of loans has never experienced a delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. and all the assets securing such loans are performing within original expectations. As a result of the pending closing of CDO I at the end of the first quarter 2002, the Company reclassified all of its subordinated commercial mortgage-backed securities Commercial mortgage-backed securities (CMBS) are a type of bond commonly issued in American security markets. They are a type of Mortgage-backed security which are backed by mortgages on commercial rather than residential real estate. on the balance sheet from available-for-sale to held-to-maturity. The effect of this reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. changed the accounting basis of these securities prospectively, from mark to market to adjusted cost. However, in accordance with SFAS 133, the swaps entered into at the time of the CDO are required to be presented on the balance sheet at their fair market value causing disproportionate dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por fluctuations of the book value of the
Company. Accordingly, the Company has determined that at December 31,
2002, and going forward, it will classify clas·si·fy tr.v. clas·si·fied, clas·si·fy·ing, clas·si·fies 1. To arrange or organize according to class or category. 2. To designate (a document, for example) as confidential, secret, or top secret. all of its subordinated commercial mortgage-backed securities as available-for-sale securities and record them at fair market value in order to more properly match the recorded value of the swaps. The reclassification of these securities to available-for-sale from held-to-maturity increased the recorded value of these securities from $558,522 to $611,267 with the difference being recorded in other comprehensive income. The circumstance causing the Company to change this classification was not considered a permitted circumstance as stated in SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities", and is therefore inconsistent with the Company's intent regarding its held-to-maturity classification. Accordingly, the Company will be prohibited pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. from classifying its subordinated CMBS (current holdings as well as future purchases) as held-to-maturity for a period of two years. Had the Company not made this change, the book value per share at December 31, 2002 would have been $6.71 vs. $7.81. The NAV per share rose year over year from $7.47. Book value does not include the anticipated $68,430 accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on CMBS securities which will come back into NAV over time to the extent the Company's actual losses are consistent with current expectations. New Transfer Agent Effective at the close of business on February 14, 2003, The Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. will no longer be acting as transfer agent, registrar, or dividend reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. agent for the Company. American Stock Transfer & Trust Company will provide all stock transfer and dividend reinvestment services. American Stock Transfer & Trust Company can be reached at the following address:
American Stock Transfer & Trust Company
P.O. Box 922
Wall Street Station
New York, NY 10269-0560
(877) 248-6416
E-mail address: info@amstock.com
Website address: www.investpower.com
Anthracite has a dividend reinvestment and stock purchase plan that provides current owners of its common stock with a simple, economical and convenient method of increasing their investment. Even if you are not a current owner of Anthracite stock, the Company's transfer agent can issue registered stock directly to you without commission or markup (text) markup - In computerised document preparation, a method of adding information to the text indicating the logical components of a document, or instructions for layout of the text on the page or other information which can be interpreted by some automatic system. . This transaction can be done regardless of whether or not shares are held in a brokerage account Brokerage Account An arrangement between an investor and a licensed brokerage firm that allows the investor to deposit funds with the firm and place investment orders through the brokerage, which then carries out the transactions on the investor's behalf. . To request a prospectus and receive enrollment materials or to ask questions about the plan, interested investors and shareholders may contact the Company's new transfer agent, American Stock Transfer & Trust Company at 1-877-248-6416 or Investor Relations Investor relations The process by which the corporation communicates with its investors. , Anthracite Capital, Inc. at 212-409-3333. The Company's web site address is www.anthracitecapital.com. Anthracite is a specialty finance company that is externally managed by BlackRock, Inc., a New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. based investment manager with over $273 billion in global assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. . The Company's principal business objective is to generate net income for distribution to stockholders from the spread between the interest income on its mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. and commercial loan investments and the costs of financing these investments. The Company has elected to be taxed as a REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). . Certain matters discussed in this press release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws. Anthracite's actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those detailed from time to time in Anthracite's reports and filings with the Securities and Exchange Commission. For further information, please contact Richard Shea, Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and Chief Financial Officer at 212-754-5579, Robert Friedberg, Controller and Vice-President at 212-409-3333 or visit Anthracite's website at www.anthracitecapital.com.
Anthracite Capital, Inc. and Subsidiaries
Summary of Selected Financials
(in thousands, except per share data)
December 31, 2002 December 31, 2001
-------------------- ------------------
(Unaudited)
ASSETS
Cash and cash equivalents $24,698 $43,071
Restricted cash equivalents 84,485 37,376
Commercial real estate
securities 894,900 453,953
Commercial real estate loans 65,664 142,637
Residential mortgage backed
securities 1,506,450 1,570,009
Equity investment in Carbon
Capital, Inc. 14,997 8,784
Investments in real estate
joint ventures 8,265 8,317
Receivable for investments
sold - 344,789
Other assets 40,447 18,267
----------- -----------
Total Assets $2,639,906 $2,627,203
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities:
Borrowings:
Collateralized debt obligations $684,590 $-
Secured by pledge of commercial
real estate securities 42,861 252,567
Secured by pledge of commercial
real estate loans 14,667 57,356
Secured by pledge of residential
mortgage back securities 1,418,206 1,524,678
Secured by pledge of real estate
joint ventures 1,337 1,337
---------- ----------
Total borrowings $2,161,661 $1,835,938
Distributions payable 16,589 17,245
Payable for investments
purchased 524 346,913
Other liabilities 54,361 43,734
----------- -----------
Total Liabilities 2,233,135 2,243,830
----------- -----------
10.5% Series A preferred
stock, redeemable convertible,
liquidation preference $285 in 2001 - 258
----------- -----------
Stockholders' Equity:
Common stock, par value $0.001 per
share; 400,000 shares authorized;
47,398 shares issued and outstanding
in 2002; and 45,286 shares issued
and outstanding in 2001 47 45
10% Series B Preferred stock, liquidation
preference $47,817 36,379 42,086
Additional paid - in capital 515,180 492,531
Distributions in excess of earnings (24,161) (13,588)
Accumulated other comprehensive loss (120,674) (137,959)
----------- -----------
Total Stockholders' Equity 406,771 383,115
----------- -----------
Total Liabilities and
Stockholders' Equity $2,639,906 $2,627,203
=========== ===========
Anthracite Capital, Inc.
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
For the Three For the
Months Ended Year Ended
December December
31, 2002 31, 2002
------------- ----------
Operating Portfolio
Income:
Commercial real estate securities $21,782 $72,205
Commercial real estate loans 2,644 13,997
Residential mortgage backed securities 17,070 72,524
Earnings from real estate joint ventures 276 1,044
Earnings from equity investment 561 1,202
Cash and cash equivalents 276 1,473
-------- ---------
Total income $42,609 $162,445
-------- ---------
Expenses:
Interest expense:
Collateralized debt obligations 8,158 17,626
Commercial real estate securities 1,255 5,686
Commercial real estate loans 352 1,779
Residential mortgage backed securities 6,094 25,009
Real estate joint ventures 12 53
Hedging Expense 3,308 14,758
General and administrative 549 2,323
Management fee 2,460 9,332
Incentive fee - 3,195
-------- ---------
Total expenses 22,188 79,761
-------- ---------
Operating Earnings 20,421 82,684
-------- ---------
Other gain (losses):
Realized gain (loss) 8,455 (26,265)
Unrealized gain (loss) (12,083) 8,401
Foreign currency loss (432) (812)
Hedge Ineffectiveness 110 236
Incentive fee attributable to other gains - (343)
Loss on impairment of asset (10,273) (10,273)
-------- ---------
Total other loss (14,223) (29,056)
-------- ---------
Income before cumulative transition adjustment 6,198 53,628
Cumulative transition adjustment - SFAS 142 - 6,327
Net Income 6,198 59,955
-------- ---------
Dividends and accretion on preferred stock 1,195 5,162
-------- ---------
Net Income available to Common Shareholders 5,003 54,793
======== =========
Operating Earnings per share:
Basic $0.41 $1.67
Diluted $0.41 $1.67
Net income per share, basic:
Income before cumulative transition adjustment $0.11 $1.04
Cumulative transition adjustment - SFAS 142 - 0.14
-------- ---------
Net income $0.11 $1.18
======== =========
Net income per share, diluted:
Income before cumulative transition adjustment $0.11 $1.04
Cumulative transition adjustment - SFAS 142 - 0.14
-------- ---------
Net income $0.11 $1.18
======== =========
Weighted average number of shares outstanding:
Basic 47,256 46,411
Diluted 47,284 46,452
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