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SEC Filings, Earing Reports, Press Releases
CapitalSource Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 5, 2010 06:17PM
CapitalSource Inc. (CSE) filed Quarterly Report for the period ended 2010-03-31.
Highlight of Business Operations:
Through our CapitalSource Bank segment activities, CapitalSource Bank provides financial products primarily to small and middle market businesses across the United States and also offers depository products and services in southern and central California, which are insured by the FDIC to the maximum amounts permitted by regulation. As of March 31, 2010, CapitalSource Bank held a $328.0 million senior participation interest in a pool of commercial real estate loans and related assets (the A Participation Interest), had 502 loans outstanding of which 57 loans were shared with the Parent Company, and held total loans having an aggregate principal balance of $3.2 billion.
During the year ended December 31, 2009, we sold 82 long-term healthcare facilities with a total net book value of $400.3 million, realizing a pre-tax loss of $9.4 million. In November 2009, we sold 37 long-term healthcare facilities (the November Sale Assets) for approximately $100.0 million in cash. In December 2009, in the first step of a multi-step transaction, we sold 40 long-term healthcare facilities (the Step 1 Assets) to Omega Healthcare Investors, Inc. (Omega) for approximately $184.2 million in cash and approximately 1.4 million shares of Omega common stock valued at $25.6 million. In addition, by acquiring our facilities in the December 2009 closing, Omega became obligated to pay us $59.4 million of indebtedness associated with the Step 1 Assets that Omega fully repaid in February 2010. Step two of the transaction with Omega will include the sale of an additional 40 long-term healthcare facilities (the Step 2 Assets) for approximately $65.1 million in cash and the assumption of debt associated with the Step 2 Assets, which totaled $204.3 million as of March 31, 2010. We expect to complete this sale in 2010 subject to obtaining applicable approvals.
In December 2009, we received approximately 1.3 million shares of Omega common stock valued at $25.0 million in consideration for a non-refundable option that were exercisable by Omega to acquire an additional 63 of our long-term healthcare facilities (the Step 3 Assets) at any time through December 31, 2011. Upon the closing of the sale of these properties, Omega would pay us additional consideration of $33.7 million in cash and repay the outstanding debt on the properties, which totaled $261.5 million as of March 31, 2010. The carrying value of the properties as of March 31, 2010 was $333.5 million. In April 2010, we received written notice that Omega was electing to exercise the option to acquire the properties, with a proposed closing date in June 2010.
In 2009, we established a valuation allowance against a substantial portion of our net deferred tax assets for subsidiaries where we determined that there was significant negative evidence with respect to our ability to realize such assets. Negative evidence we considered in making this determination included the incurrence of operating losses at several of our subsidiaries, and uncertainty regarding the realization of a portion of the deferred tax assets at future points in time. As of March 31, 2010, the total valuation allowance was $477.3 million. Although realization is not assured, we believe it is more likely than not that the remaining recognized net deferred tax assets of $73.5 million as of March 31, 2010 will be realized. We intend to maintain a valuation allowance with respect to our deferred tax assets until sufficient positive evidence exists to support its reduction or reversal.