View Filing Data

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2011	Dec. 31, 2010
ASSETS
Loans and other lending investments, net	$ 3,283,725	$ 4,587,352
Net lease assets, net	1,726,922	1,784,509
Real estate held for investment, net	954,646	833,060
Other real estate owned	669,331	746,081
Other investments	621,167	532,358
Assets held for sale	33,759
Cash and cash equivalents	217,015	504,865
Restricted cash	39,316	13,784
Accrued interest and operating lease income receivable, net	15,924	24,408
Deferred operating lease income receivable	69,417	62,569
Deferred expenses and other assets, net	122,630	85,528
Total assets	7,753,852	9,174,514
Liabilities:
Accounts payable, accrued expenses and other liabilities	154,095	134,422
Debt obligations, net	5,995,050	7,345,433
Total liabilities	6,149,145	7,479,855
Commitments and contingencies
iStar Financial Inc. shareholders' equity:
Preferred Stock Series D, E, F, G and I, liquidation preference $25.00 per share (see Note 12)	22	22
High Performance Units	9,800	9,800
Common Stock, $0.001 par value, 200,000 shares authorized, 138,616 issued and 80,509 outstanding at September 30, 2011 and 138,189 issued and 92,336 outstanding at December 31, 2010	139	138
Additional paid-in capital	3,825,793	3,809,071
Retained earnings (deficit)	(2,041,975)	(2,014,013)
Accumulated other comprehensive income (see Note 15)	1,508	1,609
Treasury stock, at cost, $0.001 par value, 58,108 shares at September 30, 2011 and 45,853 shares at December 31, 2010	(237,341)	(158,492)
Total iStar Financial Inc. shareholders' equity	1,557,946	1,648,135
Noncontrolling interests	46,761	46,524
Total equity	1,604,707	1,694,659
Total liabilities and equity	$ 7,753,852	$ 9,174,514

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2011	Dec. 31, 2010
Consolidated Balance Sheets
Preferred Stock Series D, E, F, G and I, liquidation preference per share (in dollars per share)	$ 25.00	$ 25.00
Common Stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common Stock, shares authorized	200,000	200,000
Common Stock, shares issued	138,616	138,189
Common Stock, shares outstanding	80,509	92,336
Treasury stock, par value (in dollars per share)	$ 0.001	$ 0.001
Treasury stock, shares	58,108	45,853

- Definition

The per share liquidation preference (or restrictions) of nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) that has a preference in involuntary liquidation considerably in excess of the par or stated value of the shares. The liquidation preference is the difference between the preference in liquidation and the par or stated values of the share.

+ References + Details

Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2011

Sep. 30, 2010

Sep. 30, 2011

Sep. 30, 2010

Revenue:

Interest income

$ 45,851

$ 84,210

$ 186,805

$ 287,295

Operating lease income

41,369

40,471

123,090

124,760

Other income

10,140

8,616

26,413

22,869

Total revenue

97,360

133,297

336,308

434,924

Costs and expenses:

Interest expense

91,777

77,286

258,183

246,815

Operating costs-net lease assets

5,048

5,226

14,303

11,279

Operating costs-REHI and OREO

19,792

19,111

55,582

45,166

Depreciation and amortization

14,814

15,246

46,354

46,722

General and administrative

26,978

24,239

77,077

76,569

Provision for loan losses

9,232

78,414

30,462

277,242

Impairment of assets

9,912

3,832

14,165

17,041

Other expense

3,974

4,219

7,156

13,321

Total costs and expenses

181,527

227,573

503,282

734,155

Income (loss) before earnings from equity method investments and other items

(84,167)

(94,276)

(166,974)

(299,231)

Gain (loss) on early extinguishment of debt, net

(3,207)

9,525

102,348

118,305

Earnings from equity method investments

10,817

6,523

54,881

31,703

Income (loss) from continuing operations before income taxes

(76,557)

(78,228)

(9,745)

(149,223)

Income tax (expense) benefit

(1,354)

(722)

(9,731)

(2,557)

Income (loss) from continuing operations

^[1]

(77,911)

(78,950)

(19,476)

(151,780)

Income (loss) from discontinued operations

1,052

(104)

498

20,473

Gain from discontinued operations

22,198

4,422

22,198

270,382

Net income (loss)

(54,661)

(74,632)

3,220

139,075

Net (income) loss attributable to noncontrolling interests

1,002

(858)

558

(857)

Net income (loss) attributable to iStar Financial Inc.

(53,659)

(75,490)

3,778

138,218

Preferred dividends

(10,580)

(31,740)

Net (income) loss allocable to HPU holders and Participating Security holders

^[2],[3]

2,008

2,539

845

(3,145)

Net income (loss) allocable to common shareholders

$ (62,231)

$ (83,531)

$ (27,117)

$ 103,333

Income (loss) attributable to iStar Financial Inc. from continuing operations:

Basic and diluted (in dollars per share)

^[1]

$ (0.96)

$ (0.94)

$ (0.55)

$ (1.91)

Net income (loss) attributable to iStar Financial Inc.:

Basic and diluted (in dollars per share)

^[1]

$ (0.71)

$ (0.89)

$ (0.30)

$ 1.10

Weighted average number of common shares-basic (in shares)

^[1]

87,951

93,370

91,020

93,556

Weighted average number of common shares-diluted (in shares)

^[1]

87,951

93,370

91,020

93,556

Income (loss) attributable to iStar Financial Inc. from continuing operations:

Basic and diluted (in dollars per share)

^[1],[2]

$ (182.34)

$ (177.74)

$ (102.06)

$ (361.26)

Net income (loss) attributable to iStar Financial Inc.:

Basic and diluted (in dollars per share)

^[1],[2]

$ (133.87)

$ (169.27)

$ (56.33)

$ 209.67

Weighted average number of HPU shares-basic and diluted (in shares)

^[1],[2]

[1]	Income (loss) from continuing operations attributable to iStar Financial Inc. for the three months ended September 30, 2011 and 2010 was $(76,909) and $(79,808), respectively, and for the nine months ended September 30, 2011 and 2010 was $(18,918) and $(152,637), respectively. See Note 14 for detail on the calculation of earnings per share.
[2]	HPU holders are current and former Company employees who purchased high performance common stock units under the Company's High Performance Unit Program.
[3]	Participating Security holders are Company employees and directors who hold unvested restricted stock units and common stock equivalents granted under the Company's Long Term Incentive Plans that are eligible to receive dividends (see Note 13).

Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Consolidated Statements of Operations
Income (loss) from continuing operations attributable to iStar Financial Inc.	$ (76,909)	$ (79,808)	$ (18,918)	$ (152,637)

- Definition

This element represents the income or loss from continuing operations attributable to the parent which may also be defined as revenue less expenses and taxes from ongoing operations before extraordinary items but after deduction of those portions of income or loss from continuing operations that are allocable to noncontrolling interests, if any.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 29
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph b(1)
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3602-108585

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 18
-URI http://asc.fasb.org/extlink&oid=6921628&loc=SL4613673-111683

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 225
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.13)
-URI http://asc.fasb.org/extlink&oid=6880815&loc=d3e20235-122688

+ Details

Consolidated Statement of Changes in Equity - 9 months ended Sep. 30, 2011 - USD ($)
$ in Thousands

Total

Preferred Stock

^[1]

HPU's

Common Stock at Par

Additional Paid-In Capital

Retained Earnings (Deficit)

Accumulated Other Comprehensive Income

Treasury Stock at cost

Noncontrolling Interests

Balance at Dec. 31, 2010

$ 1,694,659

$ 22

$ 9,800

$ 138

$ 3,809,071

$ (2,014,013)

$ 1,609

$ (158,492)

$ 46,524

Increase (Decrease) in Stockholders' Equity

Dividends declared-preferred

(31,740)

Issuance of stock/restricted stock unit amortization, net

16,723

16,722

Net income for the period

^[2]

3,236

3,778

(542)

Change in accumulated other comprehensive income

(101)

Repurchase of stock

(78,849)

Contributions from noncontrolling interests

1,900

Distributions to noncontrolling interests

(1,121)

Balance at Sep. 30, 2011

$ 1,604,707

$ 22

$ 9,800

$ 139

$ 3,825,793

$ (2,041,975)

$ 1,508

$ (237,341)

$ 46,761

[1]	See Note 12 for details on the Company's Cumulative Redeemable Preferred Stock.
[2]	For the nine months ended September 30, 2011, net income shown above excludes $16 of net loss attributable to redeemable noncontrolling interests.

- Definition

This element represents Other Comprehensive Income or Loss, Net of Tax, for the period. Includes deferred gains or losses on qualifying hedges, unrealized holding gains or losses on available-for-sale securities, minimum pension liability, and cumulative translation adjustment. While for technical reasons this element has no balance attribute, the default assumption is a credit balance consistent with its label.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 31
-Article 5

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 22, 23, 24, 25
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e599-108580

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph c(3)
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

Total of Stockholders' Equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity including portions attributable to both the parent and noncontrolling interests (previously referred to as minority interest), if any. The entity including portions attributable to the parent and noncontrolling interests is sometimes referred to as the economic entity. This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

- Definition

Equity impact of the cost of common and preferred stock that were repurchased during the period. Recorded using the cost method.

+ References + Details

Consolidated Statement of Changes in Equity (Parenthetical) $ in Thousands	9 Months Ended
	Sep. 30, 2011 USD ($)
Consolidated Statement of Changes in Equity
Net loss attributable to redeemable noncontrolling interests	$ 16

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Cash flows from operating activities:
Net income	$ 3,220	$ 139,075
Adjustments to reconcile net income to cash flows from operating activities:
Provision for loan losses	30,462	277,242
Non-cash expense for stock-based compensation	15,622	13,597
Impairment of assets	14,140	18,903
Depreciation and amortization	47,142	55,036
Amortization of discounts/(premiums) and deferred financing costs on debt	23,489	(15,899)
Amortization of (discounts)/premiums and deferred interest on lending investments	(52,027)	(81,636)
Discounts, loan fees and deferred interest received	3,303	10,539
Earnings from equity method investments	(54,881)	(31,703)
Distributions from operations of equity method investments	45,846	26,245
Deferred operating lease income	(6,750)	(8,010)
Gain from discontinued operations	(22,198)	(270,382)
Gain on early extinguishment of debt, net	(98,624)	(119,457)
Other non-cash adjustments	(2,497)	653
Changes in assets and liabilities:
Changes in accrued interest and operating lease income receivable, net	5,747	15,521
Changes in deferred expenses and other assets, net	1,720	(6,021)
Changes in accounts payable, accrued expenses and other liabilities	33,851	(14,850)
Cash flows from operating activities	(12,435)	8,853
Cash flows from investing activities:
New investment originations		(100,000)
Fundings under existing loan commitments	(58,141)	(303,336)
Repayments of and principal collections on loans	1,068,797	1,209,098
Net proceeds from sales of loans	88,751	413,983
Net proceeds from sales of net lease assets	672	1,362,983
Net proceeds from sales of other real estate owned	139,279	374,881
Net proceeds from repayments and sales of securities		213,239
Contributions to unconsolidated entities	(31,462)	(15,793)
Distributions from unconsolidated entities	16,434	7,778
Capital expenditures on net lease assets	(11,138)	(10,108)
Capital expenditures on REHI and OREO	(34,915)	(18,528)
Changes in restricted cash held in connection with investing activities	(25,165)	(260)
Other investing activities, net	708	(3,003)
Cash flows from investing activities	1,153,820	3,130,934
Cash flows from financing activities:
Borrowings under secured credit facilities	2,913,250	499
Repayments under secured credit facilities	(1,385,602)
Repayments under unsecured credit facilities	(506,600)
Borrowings under secured term loans	124,575
Repayments under secured term loans	(1,682,009)	(1,131,186)
Repayments under unsecured notes	(375,127)	(264,388)
Repurchases and redemptions of secured and unsecured notes	(371,827)	(811,773)
Payments for deferred financing costs	(35,545)
Preferred dividends paid	(31,740)	(31,740)
Purchase of treasury stock	(78,849)	(7,476)
Changes in restricted cash held in connection with debt obligations	200	11,189
Other financing activities, net	39	(9,903)
Cash flows from financing activities	(1,429,235)	(2,244,778)
Changes in cash and cash equivalents	(287,850)	895,009
Cash and cash equivalents at beginning of period	504,865	224,632
Cash and cash equivalents at end of period	$ 217,015	$ 1,119,641

Business and Organization

9 Months Ended

Sep. 30, 2011

Business and Organization

Business and Organization

Note 1—Business and Organization

Business—iStar Financial Inc., or the "Company," is a fully-integrated finance and investment company focused on the commercial real estate industry. The Company provides custom-tailored investment capital to high-end private and corporate owners of real estate and invests directly across a range of real estate sectors. The Company is taxed as a real estate investment trust, or "REIT." The Company's primary business segments are lending, net leasing and real estate investment. See Note 11 for discussion of the impact of recent economic conditions on the Company and business risks and uncertainties.

Organization—The Company began its business in 1993 through private investment funds and became publicly traded in 1998. Since that time, the Company has grown through the origination of new lending and leasing transactions, as well as through corporate acquisitions, including the acquisition of TriNet Corporate Realty Trust, Inc. in 1999 and the acquisition of the commercial real estate lending business and loan portfolio of Fremont Investment and Loan, a division of Fremont General Corporation, in 2007.

Basis of Presentation and Principles of Consolidation

9 Months Ended

Sep. 30, 2011

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

Note 2—Basis of Presentation and Principles of Consolidation

Basis of Presentation—The accompanying unaudited Consolidated Financial Statements have been prepared in conformity with the instructions to Form 10-Q and Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. These unaudited Consolidated Financial Statements and related Notes should be read in conjunction with the Consolidated Financial Statements and related Notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010.

The preparation of financial statements in conformity with GAAP 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.

In the opinion of management, the accompanying Consolidated Financial Statements contain all adjustments, consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. Such operating results may not be indicative of the expected results for any other interim periods or the entire year.

Certain prior year amounts have been reclassified in the Consolidated Financial Statements and the related Notes to conform to the 2011 presentation.

Principles of Consolidation—The Consolidated Financial Statements include the financial statements of the Company, its wholly owned subsidiaries, controlled partnerships and variable interest entities ("VIEs") for which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Consolidated VIEs—The Company consolidates OHA Strategic Credit Fund Parallel I, L.P. ("OHA SCF"), which was created to invest in distressed and undervalued loans, bonds, equities and other investments. As of September 30, 2011 and December 31, 2010, OHA SCF had total assets of $53.6 million and $45.7 million, respectively, no debt and $0.1 million of noncontrolling interests. The investments held by this entity are presented in "Other investments" on the Company's Consolidated Balance Sheets. As of September 30, 2011, the Company had a total unfunded commitment of $21.9 million to this entity.

The Company also consolidates Madison Deutsche Andau Holdings, LP ("Madison DA"), which was created to invest in mortgage loans collateralized by real estate in Europe. As of September 30, 2011 and December 31, 2010, Madison DA had total assets of $56.9 million and $58.0 million, respectively, no debt and noncontrolling interests of $8.3 million and $8.6 million, respectively. The investments held by this entity are presented in "Loans and other lending investments, net" on the Company's Consolidated Balance Sheets.

Unconsolidated VIEs—The Company determined that as of September 30, 2011, 24 of its other investments were in VIEs where it is not the primary beneficiary and accordingly the VIEs have not been consolidated in the Company's Consolidated Financial Statements. As of September 30, 2011, the Company's maximum exposure to loss from these investments does not exceed the sum of the $235.9 million carrying value of the investments and $8.1 million of related unfunded commitments.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Name Statement of Position (SOP)
-Publisher AICPA
-Number 94-6
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Name FASB Interpretation (FIN)
-Publisher FASB
-Number 46R
-Paragraph 4, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6359553&loc=d3e288-107754

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2197480

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6921930&loc=d3e5614-111684

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 915
-SubTopic 235
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6472506&loc=d3e38932-110933

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 852
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2209116

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 272
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6373374&loc=d3e70478-108055

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6970148&loc=SL6228881-111685

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2122150

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 720
-SubTopic 15
-URI http://asc.fasb.org/subtopic&trid=2122524

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 275
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2134480

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS140-4/FIN46(R)-8
-Paragraph 8, C1, C7
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2011

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 3—Summary of Significant Accounting Policies

As of September 30, 2011, the Company's significant accounting policies, which are detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, have not changed materially.

New Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-05, "Presentation of Comprehensive Income," which requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. The new requirements are effective for interim and annual reporting periods beginning after December 15, 2011 and will be applied retrospectively. The Company will adopt this ASU for the reporting period ending March 31, 2012, as required.

In May 2011, the FASB issued ASU 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." This ASU is a result of joint efforts by the FASB and IASB to develop a single, converged framework on how to measure fair value and what disclosures to provide about fair value measurements. This ASU is largely consistent with existing fair value measurement principles of U.S. GAAP, however, it expands existing disclosure requirements for fair value measurements. The ASU is effective for interim and annual reporting periods beginning after December 15, 2011 and should be applied prospectively. The Company will adopt this ASU for the reporting period ending March 31, 2012, as required.

In April 2011, the FASB issued ASU 2011-02, "A Creditor's Determination of Whether a Restructuring is a Troubled Debt Restructuring," which provides additional guidance to creditors for determining whether a loan modification is a troubled debt restructuring ("TDR"). The guidance provides additional considerations in determining whether a creditor has granted a concession and adds factors for creditors to consider in determining whether a debtor is experiencing financial difficulties. The new ASU is effective for the first interim or annual period beginning on or after June 15, 2011 with retrospective application for loan modifications that have occurred from January 1, 2011. Loan modifications that qualify as TDRs are considered impaired and will be measured and recorded prospectively in the period of adoption. The Company adopted the standard in the period ended September 30, 2011, as required. As a result of this adoption, the Company reassessed all restructurings that occurred on or after January 1, 2011 for identification as troubled debt restructurings. As of September 30, 2011, the Company had a recorded investment of $50.9 million in loans for which the allowance for credit losses was previously measured under a general allowance for credit losses methodology and are now specifically reviewed for impairment. Based on a current evaluation of potential losses, no specific reserves were required for these loans. See Note 4 for further details on the impact of the adoption of this guidance.

In January 2011, FASB issued ASU 2011-01, "Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20," which temporarily deferred the effective date in ASU 2010-20, "Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses" in respect of disclosures related to troubled debt restructuring until FASB finalized ASU 2010-20 (see above). ASU 2010-20 requires companies to provide disaggregated levels of disclosure by portfolio segment and class to enable users of the financial statements to understand the nature of loan modifications and troubled debt restructurings. The Company adopted the TDR disclosure provisions of ASU 2010-20 in the period ended September 30, 2011, as required. See Note 4 for additional disclosures required by the adoption of these provisions.

Loans and Other Lending Investments, net

9 Months Ended

Sep. 30, 2011

Loans and Other Lending Investments, net

Loans and Other Lending Investments, net

Note 4—Loans and Other Lending Investments, net

The following is a summary of the Company's loans and other lending investments by class ($ in thousands)(1):

		As of

Type of Investment		September 30, 2011			December 31, 2010
Senior mortgages		$	3,277,891		$	4,390,770
Subordinate mortgages			214,405			305,245
Corporate/Partnership loans			485,708			689,535

	Total gross carrying value of loans(2)	$	3,978,004		$	5,385,550
Reserves for loan losses			(710,117	)		(814,625	)

	Total carrying value of loans	$	3,267,887		$	4,570,925
Other lending investments—securities			15,838			16,427

	Total loans and other lending investments, net	$	3,283,725		$	4,587,352

Explanatory Notes:

(1): Loans and other lending investments are presented net of unearned income, unamortized discounts and premiums and net unamortized deferred fees and costs. In total, these amounts represented a net discount of $94.0 million and $62.7 million as of September 30, 2011 and December 31, 2010, respectively.

(2): The Company's recorded investment in loans as of September 30, 2011 and December 31, 2010 was $3.99 billion and $5.41 billion, respectively, which consists of total gross carrying value of loans plus accrued interest of $12.8 million and $21.3 million, for the same two periods, respectively.

During the nine months ended September 30, 2011, the Company funded $58.1 million under existing loan commitments and received principal repayments of $1.07 billion. During the same period, the Company sold loans with a total carrying value of $132.1 million, for which it recognized charge-offs of $23.4 million.

During the nine months ended September 30, 2011, the Company received title to properties in full or partial satisfaction of non-performing mortgage loans with a gross carrying value of $240.8 million, for which the properties had served as collateral, and recorded charge-offs totaling $48.3 million related to these loans. These properties were recorded as real estate held for investment ("REHI") or other real estate owned ("OREO") on the Company's Consolidated Balance Sheets (see Note 5). In addition, during the same period, the Company received equity in an entity that took title to a property in satisfaction of a non-performing mortgage for which the property had served as collateral. The Company held a participation in the mortgage with a gross carrying value of $74.6 million and charged-off $29.2 million upon receiving the equity interest (see Note 7).

Reserve for Loan Losses—Changes in the Company's reserve for loan losses were as follows ($ in thousands):

		For the Three Months Ended September 30,						For the Nine Months Ended September 30,

		2011			2010			2011			2010
Reserve for loan losses at beginning of period		$	701,228		$	1,181,288		$	814,625		$	1,417,949
	Provision for loan losses		9,232			78,414			30,462			277,242
	Charge-offs		(343	)		(235,041	)		(134,970	)		(670,530	)

Reserve for loan losses at end of period		$	710,117		$	1,024,661		$	710,117		$	1,024,661

The Company's recorded investment (comprised of a loan's carrying value plus accrued interest) in loans and the associated reserve for loan losses were as follows ($ in thousands):

		Individually Evaluated for Impairment			Collectively Evaluated for Impairment			Loans Acquired with Deteriorated Credit Quality			Total

As of September 30, 2011:
Loans		$	1,900,885		$	2,014,760		$	75,130		$	3,990,775
Less: Reserve for loan losses			(631,211	)		(76,700	)		(2,206	)		(710,117	)

	Total	$	1,269,674		$	1,938,060		$	72,924		$	3,280,658

As of December 31, 2010:
Loans		$	2,296,599		$	3,034,310		$	75,907		$	5,406,816
Less: Reserve for loan losses			(692,610	)		(120,200	)		(1,815	)		(814,625	)

	Total	$	1,603,989		$	2,914,110		$	74,092		$	4,592,191

Credit Characteristics—As part of the Company's process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. The Company's recorded investment in performing loans, presented by class and by credit quality, as indicated by risk rating, was as follows ($ in thousands)(1):

	As of

	September 30, 2011				December 31, 2010
	Performing Loans		Weighted Average Risk Ratings		Performing Loans		Weighted Average Risk Ratings
Senior mortgages	$	1,683,232		3.29	$	2,394,270		3.48
Subordinate mortgages		192,082		3.22		307,509		3.20
Corporate/Partnership loans		478,134		3.62		685,848		3.76

Total	$	2,353,448		3.35	$	3,387,627		3.51

Explanatory Note:

(1): Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss.

The Company's recorded investment in loans as of September 30, 2011, aged by payment status and presented by class, were as follows ($ in thousands):

		Current		Less Than and Equal to 90 Days		Greater Than 90 Days(1)		Total Past Due		Total

Senior mortgages		$	1,842,261	$	68,147	$	1,375,201	$	1,443,348	$	3,285,609
Subordinate mortgages			215,740		—		—		—		215,740
Corporate/Partnership loans			478,132		—		11,294		11,294		489,426

	Total	$	2,536,133	$	68,147	$	1,386,495	$	1,454,642	$	3,990,775

Explanatory Note:

(1): All loans with payments more than 90 days past due are classified as non-performing and are on non-accrual status.

Impaired Loans—The Company's recorded investment in impaired loans, presented by class, were as follows ($ in thousands)(1):

			As of September 30, 2011							As of December 31, 2010

			Recorded Investment		Unpaid Principal Balance		Related Allowance			Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
	Senior mortgages(2)		$	216,852	$	217,945	$	—		$	404,861	$	404,126	$	—
	Corporate/Partnership loans			10,110		10,160		—			10,110		10,160		—

		Subtotal	$	226,962	$	228,105	$	—		$	414,971	$	414,286	$	—
With an allowance recorded:
	Senior mortgages(2)		$	1,602,712	$	1,592,418	$	(599,472	)	$	1,834,008	$	1,825,150	$	(683,948	)
	Subordinate mortgages			23,657		23,735		(23,657	)		—		—		—
	Corporate/Partnership loans			64,853		65,140		(10,288	)		64,465		64,919		(10,477	)

		Subtotal	$	1,691,222	$	1,681,293	$	(633,417	)	$	1,898,473	$	1,890,069	$	(694,425	)
Total:
	Senior mortgages		$	1,819,564	$	1,810,363	$	(599,472	)	$	2,238,869	$	2,229,276	$	(683,948	)
	Subordinate mortgages			23,657		23,735		(23,657	)		—		—		—
	Corporate/Partnership loans			74,963		75,300		(10,288	)		74,575		75,079		(10,477	)

		Total	$	1,918,184	$	1,909,398	$	(633,417	)	$	2,313,444	$	2,304,355	$	(694,425	)

Explanatory Notes:

(1): All of the Company's non-accrual loans are considered impaired and included in the table above. In addition, as of September 30, 2011 and December 31, 2010, certain loans modified through troubled debt restructurings with a recorded investment of $280.9 million and $294.3 million, respectively, are also included as impaired loans in accordance with GAAP although they are performing and on accrual status.
(2): Amount includes impaired loans acquired with deteriorated credit quality.

The Company's average recorded investment in impaired loans and interest income recognized, presented by class, were as follows ($ in thousands):

			For the Three Months Ended September 30,								For the Nine Months Ended September 30,

			2011				2010				2011				2010
			Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
	Senior mortgages		$	230,888	$	1,788	$	645,653	$	1,569	$	331,478	$	31,374	$	722,722	$	19,856
	Subordinate mortgages			—		—		—		—		—		—		1,755		74
	Corporate/Partnership loans			10,110		240		21,044		—		10,110		560		31,879		1,310

		Subtotal	$	240,998	$	2,028	$	666,697	$	1,569	$	341,588	$	31,934	$	756,356	$	21,240
With an allowance recorded:
	Senior mortgages		$	1,583,105	$	1,873	$	2,195,637	$	925	$	1,693,366	$	5,994	$	2,556,167	$	4,694
	Subordinate mortgages			24,783		—		93,912		46		18,726		—		96,406		107
	Corporate/Partnership loans			67,446		81		85,940		—		66,961		250		65,282		—

		Subtotal	$	1,675,334	$	1,954	$	2,375,489	$	971	$	1,779,053	$	6,244	$	2,717,855	$	4,801
Total:
	Senior mortgages		$	1,813,993	$	3,661	$	2,841,290	$	2,494	$	2,024,844	$	37,368	$	3,278,889	$	24,550
	Subordinate mortgages			24,783		—		93,912		46		18,726		—		98,161		181
	Corporate/Partnership loans			77,556		321		106,984		—		77,071		810		97,161		1,310

		Total	$	1,916,332	$	3,982	$	3,042,186	$	2,540	$	2,120,641	$	38,178	$	3,474,211	$	26,041

During the nine months ended September 30, 2011, the Company recorded interest income of $26.3 million related to the resolution of certain non-performing loans. Interest income was not previously recorded while the loans were on non-accrual status.

Troubled Debt Restructurings—The Company's troubled debt restructurings, presented by class, had the following impact to its recorded investment in loans ($ in thousands):

	For the Three Months Ended September 30, 2011						For the Nine Months Ended September 30, 2011

	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Senior mortgages		3	$	65,107	$	65,107		7	$	191,158	$	190,893

Troubled debt restructurings that subsequently defaulted during the period were as follows ($ in thousands):

	For the Three Months Ended September 30, 2011				For the Nine Months Ended September 30, 2011

	Number of Loans		Outstanding Recorded Investment		Number of Loans		Outstanding Recorded Investment
Senior mortgages		1	$	12,257		2	$	40,262

During the three months ended September 30, 2011, the Company restructured three loans that were considered troubled debt restructurings. The Company extended the maturity of two of these loans with a combined recorded investment of $49.3 million, while leaving the interest rate unchanged. The loans have a new weighted average maturity of 0.4 years with conditional extension options in certain cases dependent on pay down hurdles. The Company extended a discounted payoff option on the third loan that is currently classified as non-performing.

During the nine months ended September 30, 2011, the Company restructured seven loans that were considered troubled debt restructurings. In addition to the three loans modified during the current quarter that are described above, the Company restructured four additional loans in the first half of the year. The Company reduced the rate on three of these loans with a combined recorded investment of $105.7 million, from a combined weighted average rate of 8.3% to 4.7% and extended the loans with a new weighted average maturity of 1.4 years, with conditional extension options in certain cases dependent on pay down hurdles. The Company extended the term of the remaining loan by six months with the interest rate unchanged. In addition, as of September 30, 2011, the Company had $6.1 million of unfunded commitments on modified loans considered troubled debt restructurings.

For the six loans that were extended, the Company believes the borrowers can perform under the new terms and has classified these loans as performing. Generally when granting financial concessions, the Company will seek to protect its position by requiring incremental pay downs, additional collateral or guarantees and in some cases lookback features or equity kickers to offset concessions granted should conditions improve.

The Company's determination of credit losses is impacted by troubled debt restructurings whereby loans that have gone through troubled debt restructurings are considered impaired and assessed for specific reserves and are not included in the Company's assessment of general reserves. Loans previously restructured under troubled debt restructurings that subsequently default are reassessed to incorporate the Company's current assumptions on expected cash flows and additional provision expense is recorded to the extent necessary.

Encumbered Loans—As of September 30, 2011 and December 31, 2010, loans and other lending investments with a carrying value of $2.12 billion and $2.83 billion, respectively, were pledged as collateral under the Company's secured indebtedness.

Real Estate Held for Investment, net and Other Real Estate Owned

9 Months Ended

Sep. 30, 2011

Real Estate Held for Investment, net and Other Real Estate Owned

Real Estate Held for Investment, net and Other Real Estate Owned

Note 5—Real Estate Held for Investment, net and Other Real Estate Owned

During the nine months ended September 30, 2011, the Company received title to properties with an aggregate estimated fair value at the time of foreclosure of $192.5 million, in full or partial satisfaction of non-performing mortgage loans for which those properties had served as collateral. Of these, properties with a value of $124.1 million were classified as REHI and $68.4 million were classified as OREO, based on management's current intention to either hold the properties over a longer period or to market them for sale in the near term.

Real Estate Held for Investment, net—REHI consisted of the following ($ in thousands):

		As of September 30, 2011			As of December 31, 2010

Land held for investment and development		$	635,467		$	606,083
Operating property
	Land		82,266			69,807
	Buildings and improvements		250,264			165,025
	Less: accumulated depreciation and amortization		(13,351	)		(7,855	)

Real estate held for investment, net		$	954,646		$	833,060

The Company recorded REHI operating income in "Other income" and REHI operating expenses in "Operating costs—REHI and OREO," on its Consolidated Statements of Operations, as follows ($ in thousands):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,

	2011		2010		2011		2010
REHI operating income	$	8,207	$	5,597	$	22,356	$	14,111
REHI operating expenses	$	12,130	$	8,944	$	31,422	$	21,113

Other Real Estate Owned—During the nine months ended September 30, 2011, the Company sold OREO assets with a carrying value of $142.8 million. For the three and nine months ended September 30, 2011, the Company recorded net impairment charges to OREO properties totaling $9.3 million and $12.6 million, respectively, and recorded net expenses related to holding costs for OREO properties of $7.7 million and $24.2 million, respectively.

For the three and nine months ended September 30, 2010, the Company recorded net (recoveries)/impairment charges to OREO properties totaling $(0.4) million and $16.8 million, respectively, and recorded net expenses related to holding costs for OREO properties of $10.2 million and $24.1 million, respectively.

Encumbered REHI and OREO—As of September 30, 2011 and December 31, 2010, REHI assets with a carrying value of $142.5 million and $28.4 million, respectively, and OREO assets with a carrying value of $163.8 million and $232.1 million, respectively, were pledged as collateral for the Company's secured indebtedness.

- Definition

The entire disclosure for real estate owned (as defined). Generally, the largest component of real estate owned by lenders is assets taken in settlement of troubled loans through surrender or foreclosure. Real estate investments, real estate loans that qualify as investments in real estate, and premises that are no longer used in operations may also be included in real estate owned.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph c
-Subparagraph Schedule III
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 28
-Article 12

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher OTS
-Name Federal Regulation (FR)
-Number Title 12
-Chapter V
-Section 563c.102
-Paragraph 11
-Subsection I
-LegacyDoc This is a non-GAAP reference that was included in the 2009 taxonomy. It will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
-Subparagraph f
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 15
-Paragraph 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Audit and Accounting Guide (AAG)
-Number AAG-DEP
-Chapter 11
-Paragraph 2, 6, 9-11, 18, 20
-IssueDate 2006-05-01
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 7, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 34
-Paragraph 9, 11, 12, 13, 14, 15, 21
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher OTS
-Name Federal Regulation (FR)
-Number Title 12
-Chapter V
-Section 563c.102
-Paragraph 10
-Subparagraph a, b
-Subsection I
-LegacyDoc This is a non-GAAP reference that was included in the 2009 taxonomy. It will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 10
-Subparagraph 4
-Article 9

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 11
-Article 9

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6375948&loc=d3e4437-111522

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 35
-Paragraph 43
-URI http://asc.fasb.org/extlink&oid=6390298&loc=d3e1739-110224

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03.10(4))
-URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 40
-Section 40
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6905009&loc=d3e18551-111553

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 40
-Section 40
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6905009&loc=d3e18511-111553

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 35
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=6390298&loc=d3e1424-110224

+ Details

Net Lease Assets, net and Assets Held for Sale

9 Months Ended

Sep. 30, 2011

Net Lease Assets, net and Assets Held for Sale

Net Lease Assets, net and Assets Held for Sale

Note 6—Net Lease Assets, net and Assets Held for Sale

The Company's investments in net lease assets, at cost, were as follows ($ in thousands):

	As of September 30, 2011			As of December 31, 2010

Buildings and improvements	$	1,619,747		$	1,651,998
Land and land improvements		448,153			454,925
Less: accumulated depreciation		(340,978	)		(322,414	)

Net lease assets, net	$	1,726,922		$	1,784,509

Assets held for sale	$	33,759		$	—

During the three months ended September 30, 2011, the Company realized $22.2 million of the gain previously deferred as part of its June 2010 sale of a portfolio of 32 net lease assets. At the time of sale, the Company had reduced its gain on sale and recorded a liability based upon certain contingent obligations, which have now been fully resolved. The gain has been recorded in "Gain from discontinued operations" on the Company's Consolidated Statements of Operations for the three and nine months ended September 30, 2011.

The Company receives reimbursements from customers for certain facility operating expenses including common area costs, insurance and real estate taxes. Customer expense reimbursements were $6.1 million and $17.6 million for the three and nine months ended September 30, 2011, respectively, and $6.2 million and $23.9 million for the three and nine months ended September 30, 2010, respectively. Of these amounts, $5.8 million and $18.0 million for the three and nine months ended September 30, 2010, respectively, were included as a reduction of "Operating costs—net lease assets," and the remainder in 2010 was included in "Income (loss) from discontinued operations" on the Company's Consolidated Statements of Operations.

During the nine months ended September 30, 2010, the Company sold net lease assets with carrying values of $1.17 billion, which resulted in initial gains of $270.4 million. In addition, for the three and nine months ended September 30, 2010, the Company recorded impairment charges on net lease assets of $5.7 million and $6.1 million, respectively, of which $1.5 million and $1.9 million, respectively, were included in "Income (loss) from discontinued operations" on the Company's Consolidated Statements of Operations.

Allowance for doubtful accounts—As of September 30, 2011 and December 31, 2010, the total allowance for doubtful accounts related to tenant receivables, including deferred operating lease income receivable, was $3.0 million and $1.4 million, respectively.

Encumbered Net Lease Assets—As of September 30, 2011 and December 31, 2010, net lease assets with a carrying value of $1.20 billion and $1.02 billion, respectively, were encumbered with mortgages or pledged as collateral for the Company's secured indebtedness.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Other Investments

9 Months Ended

Sep. 30, 2011

Other Investments

Other Investments

Note 7—Other Investments

Other investments primarily consists of equity method investments. The Company's other investments and its proportionate share of results for equity method investments were as follows ($ in thousands):

						Equity in earnings

		Carrying value as of				For the Three Months Ended September 30,					For the Nine Months Ended September 30,
		September 30, 2011		December 31, 2010		For the Three Months Ended September 30,					For the Nine Months Ended September 30,
		September 30, 2011		December 31, 2010		2011			2010		2011		2010
Oak Hill(1)		$	162,679	$	176,364	$	1,078		$	2,217	$	8,788	$	10,707
LNR			142,984		122,176		12,509			2,336		36,572		2,336
Madison Funds			114,581		92,265		(941	)		1,398		7,016		7,452
Other equity method investments			190,417		131,418		(1,829	)		572		2,505		11,208

	Total equity method investments	$	610,661	$	522,223	$	10,817		$	6,523	$	54,881	$	31,703

Other			10,506		10,135

	Total other investments	$	621,167	$	532,358

Explanatory Note:

(1): Subsequent to quarter end, the Company sold a substantial portion of its interests in Oak Hill. See Note 18 for further details.

During the nine months ended September 30, 2011, the Company received an equity interest of $45.4 million in an entity that received title to a property previously serving as collateral for a loan investment of the Company.

Encumbered Other Investments—As of September 30, 2011, other investments with a carrying value of $44.4 million were pledged as collateral for the Company's secured indebtedness.

Summarized Financial Information

LNR—The Company owns approximately 24% of the outstanding equity of LNR and the Company's chairman and chief executive officer is the chairman of LNR's board of directors. The following table represents investee level summarized financial information for LNR ($ in thousands)(1):

	For the Three Months Ended June 30, 2011(2)		For the Nine Months Ended June 30, 2011(2)

Income Statement
Total revenue	$	73,167	$	155,877
Net income attributable to LNR	$	52,171	$	152,537

	As of June 30, 2011		As of September 30, 2010

Balance Sheet
Total assets(1)	$	1,307,568	$	1,189,438
Total liabilities(1)	$	601,117	$	724,311
Noncontrolling interests	$	43,487	$	37,092
LNR Property Corporation equity	$	662,964	$	428,035

Explanatory Notes:

(1): LNR consolidates certain commercial mortgage-backed securities and collateralized debt obligation trusts that are considered VIEs, and for which it is the primary beneficiary, that have been excluded from the amounts presented above. As of June 30, 2011 and September 30, 2010, the assets of these trusts which aggregate approximately $138.80 billion and $142.39 billion, respectively, are the sole source of repayment of the related liabilities, which aggregate approximately $138.54 billion and $141.99 billion, respectively, which are non-recourse to LNR and its equity holders, including the Company.
(2): The Company records its investment in LNR on a one quarter lag, therefore, amounts in the Company's financial statements for the three and nine months ended September 30, 2011 are based on balances and results from LNR for the three and nine months ended June 30, 2011.

Other Assets and Other Liabilities

9 Months Ended

Sep. 30, 2011

Other Assets and Other Liabilities

Other Assets and Other Liabilities

Note 8—Other Assets and Other Liabilities

Deferred expenses and other assets, net, consist of the following items ($ in thousands):

	As of

	September 30, 2011		December 31, 2010
Deferred financing fees, net(1)	$	25,250	$	5,527
Net lease in-place lease intangibles, net(2)		18,700		24,469
Other receivables		12,078		13,521
Leasing costs, net(3)		11,958		8,267
Corporate furniture, fixtures and equipment, net(4)		9,453		11,016
Prepaid expenses		8,658		5,265
Loan receivables		7,835		—
Other assets		28,698		17,463

Deferred expenses and other assets, net	$	122,630	$	85,528

Explanatory Notes:

(1): During the nine months ended September 30, 2011, in connection with the Secured Credit Facility, the Company recorded deferred financing fees of $33.3 million (see Note 9). Accumulated amortization of deferred financing fees was $10.3 million and $21.1 million as of September 30, 2011 and December 31, 2010, respectively.
(2): Represents unamortized finite lived intangible assets related to the prior acquisition of net lease assets. Accumulated amortization on net lease intangibles was $31.7 million and $26.6 million as of September 30, 2011 and December 31, 2010, respectively. Amortization expense related to these assets was $1.7 million and $5.1 million, for the three and nine months ended September 30, 2011, respectively, and $1.6 million and $4.8 million, for the three and nine months ended September 30, 2010, respectively.

(3): Accumulated amortization on leasing costs was $5.0 million and $5.3 million as of September 30, 2011 and December 31, 2010, respectively.
(4): Accumulated depreciation on corporate furniture, fixtures and equipment was $7.6 million and $7.2 million as of September 30, 2011 and December 31, 2010, respectively.

Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands):

	As of

	September 30, 2011		December 31, 2010
Accrued expenses	$	45,840	$	19,800
Accrued interest payable		41,658		38,143
Deferred tax liabilities		18,804		13,729
Property taxes payable		13,766		5,880
Security deposits and other investment deposits		12,169		2,874
Unearned operating lease income		9,222		10,423
Other liabilities		12,636		43,573

Accounts payable, accrued expenses and other liabilities	$	154,095	$	134,422

Debt Obligations, net

9 Months Ended

Sep. 30, 2011

Debt Obligations, net

Debt Obligations, net

Note 9—Debt Obligations, net

As of September 30, 2011 and December 31, 2010, the Company's debt obligations were as follows ($ in thousands):

			Carrying Value as of

			September 30, 2011			December 31, 2010		Stated Interest Rates	Scheduled Maturity Date
Secured credit facilities:
	Tranche A-1 Facility		$	1,071,332		$	—	LIBOR + 3.75%(1)	June 2013
	Tranche A-2 Facility			1,450,000			—	LIBOR + 5.75%(1)	June 2014
	Line of credit			—			618,883	LIBOR + 1.50%	June 2011
	Line of credit			—			334,180	LIBOR + 1.50%	June 2012
Unsecured credit facilities:
	Line of credit			—			501,405	LIBOR + 0.85%	June 2011
	Line of credit			243,709			243,819	LIBOR + 0.85%	June 2012

	Total credit facilities		$	2,765,041		$	1,698,287
Secured term loans:
	Collateralized by loans, net lease, REHI and OREO assets		$	—		$	1,055,000	LIBOR + 1.50%	June 2011
	Collateralized by loans, net lease, REHI and OREO assets			—			612,222	LIBOR + 1.50%	June 2012
	Collateralized by net lease assets			309,537			190,223	5.05% - 7.68%	Various through 2026

	Total secured term loans		$	309,537		$	1,857,445
Secured notes:
	10.0% senior notes		$	—		$	312,329	10.0%	June 2014
Unsecured notes:
	5.80% senior notes			—			107,766	5.80%	March 2011
	5.125% senior notes			—			96,916	5.125%	April 2011
	5.65% senior notes			—			196,593	5.65%	September 2011
	5.15% senior notes			288,521			322,006	5.15%	March 2012
	5.50% senior notes			102,345			102,345	5.50%	June 2012
	LIBOR + 0.50% senior convertible notes(2)			787,750			787,750	LIBOR + 0.50%	October 2012
	8.625% senior notes			501,701			501,701	8.625%	June 2013
	5.95% senior notes			448,453			448,453	5.95%	October 2013
	6.5% senior notes			67,055			67,055	6.5%	December 2013
	5.70% senior notes			200,601			200,601	5.70%	March 2014
	6.05% senior notes			105,765			105,765	6.05%	April 2015
	5.875% senior notes			261,403			261,403	5.875%	March 2016
	5.85% senior notes			99,722			99,722	5.85%	March 2017

		Total unsecured notes	$	2,863,316		$	3,298,076
Other debt obligations				100,000			100,000	LIBOR + 1.5%	October 2035

Total debt obligations			$	6,037,894		$	7,266,137
Debt premiums/(discounts), net(2)(3)				(42,844	)		79,296

Total debt obligations, net			$	5,995,050		$	7,345,433

Explanatory Notes:


(1): These loans each have a LIBOR floor of 1.25%. As of September 30, 2011, inclusive of the floors, the Tranche A-1 Facility and Tranche A-2 Facility loans incurred interest at a rate of 5.00% and 7.00%, respectively.


(2): The Company's convertible senior floating rate notes due October 2012 ("Convertible Notes") are convertible at the option of the holders into 22.2 shares per $1,000 principal amount of Convertible Notes (reflecting a conversion price of $45.05), on or after August 15, 2012, or prior to that date if certain conditions are met. None of the conversion conditions have been met as of September 30, 2011. As of September 30, 2011, the unamortized discount on these notes was $13.3 million and the net carrying amount of the liability was $774.5 million. For the three and nine months ended September 30, 2011, the Company recognized interest expense on the convertible notes of $4.4 million and $13.3 million, respectively, of which $2.9 million and $8.6 million, respectively, related to the amortization of the debt discount.
(3): As of September 30, 2011, includes unamortized original issue debt discounts of $26.2 million associated with the Secured Credit Facility completed in March 2011.

Future Scheduled Maturities—As of September 30, 2011, future scheduled maturities of outstanding long-term debt obligations, net are as follows ($ in thousands)(1):


2011 (remaining three months)	$	14,122
2012		1,743,657
2013		1,971,319
2014		1,552,198
2015		105,765
Thereafter		650,833

Total principal maturities	$	6,037,894
Unamortized debt discounts, net		(42,844	)

Total long-term debt obligations, net	$	5,995,050

Explanatory Note:


(1): Includes minimum required amortization payments on the Secured Credit Facility.

Secured Credit Facility—In March 2011, the Company entered into a new $2.95 billion senior secured credit agreement comprised of a $1.50 billion term loan facility bearing interest at a rate of LIBOR plus 3.75% and maturing in June 2013 (the "Tranche A-1 Facility") and a $1.45 billion term loan facility bearing interest at a rate of LIBOR plus 5.75% maturing in June 2014 (the "Tranche A-2 Facility"), together the "Secured Credit Facility." Both tranches include a LIBOR floor of 1.25%. The Tranche A-1 Facility and Tranche A-2 Facility were issued at discounts to par of 1.0% and 1.5%, respectively. Proceeds from the Secured Credit Facility were used to fully repay the $1.67 billion and $0.9 billion outstanding under the Company's secured credit facilities, which were due to mature in June 2011 and June 2012, respectively, and to repay $175.0 million of the Company's unsecured credit facilities due in June 2011. The remaining proceeds were used to repay other unsecured debt maturing in the first half of 2011.

The Secured Credit Facility is collateralized by a first lien on a fixed pool of assets consisting of loan, net lease, OREO and REHI assets. Proceeds from principal repayments and sales of collateral are applied to amortize the Secured Credit Facility. Proceeds received for interest, rent, lease payments, fee income and, under certain circumstances, additional amounts funded on assets serving as collateral are retained by the Company. The Tranche A-1 Facility requires that aggregate cumulative amortization payments of not less than $200.0 million shall be made on or before December 30, 2011, not less than $450.0 million on or before June 30, 2012, not less than $750.0 million on or before December 31, 2012 and not less than $1.50 billion on or before June 28, 2013. The Tranche A-2 Facility will begin amortizing six months after the repayment in full of the Tranche A-1 Facility, such that not less than $150.0 million of cumulative amortization payments shall be made on or before the six month anniversary of repayment of the A-1 Facility, with additional amortization payments of $150.0 million due on or before each six month anniversary thereafter, with any unpaid principal amounts due at maturity in June 2014.

During the nine months ended September 30, 2011, the Company used proceeds from principal repayments and sales of collateral to repay $428.7 million of its Tranche A-1 Facility. These repayments exceeded the $200.0 million amortization requirement for December 30, 2011 and have reduced the cumulative amortization payments due on or before June 30, 2012 to $21.3 million. Repayments of debt prior to maturity have resulted in losses on early extinguishment of debt of $3.3 million and $10.5 million, respectively, for the three and nine months ended September 30, 2011, related to the acceleration of discounts and unamortized deferred financing fees on the portion of debt that was repaid.

During the nine months ended September 30, 2011, the Company received $9.1 million pursuant to an agreement with a holder of the Company's previously outstanding secured credit facilities. The amount effectively reduced the par value that was repaid to the debtholder and was accounted for under ASC 470-60, resulting in $3.7 million being recognized during the nine months ended September 30, 2011, as a gain on extinguishment of debt. As the same lender participated in the new Secured Credit Facility, the remaining amount was recorded as a premium to that facility and will serve to reduce a portion of future interest expense through its maturity.

Unsecured Credit Facilities—In June 2011, the Company repaid the $329.9 million remaining principal balance of its LIBOR + 0.85% unsecured line of credit.

Secured Term Loans—In June 2011, the Company entered into a $120.0 million secured term loan financing maturing in July 2021. This financing is collateralized by net lease properties occupied by a single tenant and bears interest at 5.05%.

In March 2011, the Company refinanced its maturing $47.7 million outstanding principal balance secured term loan. In addition, during June 2011, the Company entered into an additional $4.6 million secured term loan. These loans bear interest at LIBOR + 4.50%, mature in 2014 and are cross-collateralized by the same net lease assets. Simultaneously with the financings, the Company entered into interest rate swaps to exchange the variable rates on the notes for fixed interest rates (see Note 10).

Secured Notes—In January 2011, the Company fully redeemed the $312.3 million remaining principal balance of its 10% senior secured notes due June 2014. In connection with this redemption, the Company recorded a gain on early extinguishment of debt of $109.0 million in its Consolidated Statement of Operations for the nine months ended September 30, 2011.

Unsecured Notes—During the nine months ended September 30, 2011, the Company repaid, upon maturity, the $170.4 million outstanding principal balance of its 5.65% senior unsecured notes, the $96.9 million outstanding principal balance of its 5.125% senior unsecured notes and the $107.8 million outstanding principal balance of its 5.80% senior unsecured notes.

In addition, during the nine months ended September 30, 2011, the Company repurchased $59.6 million par value of its senior unsecured notes with various maturities ranging from September 2011 to March 2012. In connection with these repurchases, the Company recorded an aggregate gain on early extinguishment of debt of $0.1 million for both the three and nine months ended September 30, 2011.

Debt Covenants

The Company's Secured Credit Facility contains certain covenants, including covenants relating to collateral coverage, dividend payments, restrictions on fundamental changes, transactions with affiliates, matters relating to the liens granted to the lenders and the delivery of information to the lenders. In particular, the Company is required to maintain collateral coverage of 1.25x outstanding borrowings. In addition, for so long as the Company maintains its qualification as a REIT, the Secured Credit Facility permits it to distribute 100% of its REIT taxable income on an annual basis. The Company may not pay common dividends if it ceases to qualify as a REIT.

The Company's outstanding unsecured debt securities contain corporate level covenants that include unencumbered assets to unsecured indebtedness and a fixed charge coverage ratio. The unencumbered assets to unsecured indebtedness covenant is a maintenance covenant, while the fixed charge coverage ratio is an incurrence test. Based on the Company's unsecured credit ratings, the financial covenants in its debt securities, including the fixed charge coverage ratio and maintenance of unencumbered assets to unsecured indebtedness ratio, are currently operative. If any of the Company's covenants is breached and not cured within applicable cure periods, the breach could result in acceleration of its debt securities unless a waiver or modification is agreed upon with the requisite percentage of the bondholders. While the Company expects that its ability to incur new indebtedness under the fixed charge coverage ratio will be limited for the foreseeable future, it will continue to be permitted to incur indebtedness for the purpose of refinancing existing indebtedness and for other permitted purposes under the indentures.

The Company's Secured Credit Facility contains cross default provisions that would allow the lenders to declare an event of default and accelerate the Company's indebtedness to them if the Company fails to pay amounts due in respect of its other recourse indebtedness in excess of specified thresholds or if the lenders under such other indebtedness are otherwise permitted to accelerate such indebtedness for any reason. The indentures governing the Company's unsecured public debt securities permit the bondholders to declare an event of default and accelerate the Company's indebtedness to them if the Company's other recourse indebtedness in excess of specified thresholds is not paid at final maturity or if such indebtedness is accelerated.

Ratings Triggers

Borrowings under the Company's unsecured credit facility bear interest at LIBOR based rates plus an applicable margin, which is based on the Company's corporate credit ratings. The Company's ability to borrow under this facility is not dependent on the level of its credit ratings.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Derivatives

9 Months Ended

Sep. 30, 2011

Derivatives

Derivatives

Note 10—Derivatives

The Company's use of derivative financial instruments is primarily limited to the utilization of interest rate hedges or other instruments to manage interest rate risk exposure and foreign exchange hedges to manage its risk to changes in foreign currencies. The principal objective of such hedges are to minimize the risks and/or costs associated with the Company's operating and financial structure and to manage its exposure to foreign exchange rate movements.

The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010 ($ in thousands):

	Derivative Assets						Derivative Liabilities

	As of September 30, 2011			As of December 31, 2010			As of September 30, 2011			As of December 31, 2010
Derivative	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign exchange contracts	Other Assets	$	1,650	Other Assets	$	—	Other Liabilities	$	1,202	Other Liabilities	$	223
Cash flow interest rate swap	Other Assets		—	Other Assets		—	Other Liabilities		1,179	Other Liabilities		—

Total		$	1,650		$	—		$	2,381		$	223

The tables below present the effect of the Company's derivative financial instruments on the Consolidated Statements of Operations for the three and nine months ended September 30, 2011 ($ in thousands):

Derivatives Designated in Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion)			Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings (Effective Portion)

For the Three Months Ended September 30, 2011:
Cash flow interest rate swap	Accumulated Other Comprehensive Income	$	(529	)	$	(181	)	N/A
For the Nine Months Ended September 30, 2011:
Cash flow interest rate swap	Accumulated Other Comprehensive Income	$	(1,530	)	$	(353	)	N/A

		Amount of Gain or (Loss) Recognized in Income on Derivative

		For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	Location of Gain or (Loss) Recognized in Income on Derivative	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
Derivatives not Designated in Hedging Relationships		2011		2010			2011		2010
Foreign Exchange Contracts	Other Expense	$	21,152	$	(2,109	)	$	12,259	$	(908	)

Non-designated hedges—Derivatives not designated as hedges are not speculative and are used to manage the Company's exposure to interest rate movements, foreign exchange rate movements, and other identified risks, but may not meet strict hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

The following table presents the Company's foreign currency derivatives outstanding as of September 30, 2011 ($ in thousands):

Derivative Type	Notional Amount		Notional (USD Equivalent)		Maturity

Sells EUR/Buys USD Forward	€	141,500	$	189,937	December 2011
Sells GBP/Buys USD Forward	£	50,110	$	78,308	December 2011
Sells CAD/Buys USD Forward		CAD 52,941	$	50,745	December 2011

Qualifying Cash Flow Hedges—During the nine months ended September 30, 2011, the Company entered into interest rate swaps to convert its variable rate debt to fixed rate. The following table presents the Company's interest rate swaps outstanding as of September 30, 2011 ($ in thousands):

Derivative Type	Notional Amount

Interest rate swap	$	47,731	LIBOR + 4.50	%	6.11	%	March 2014
Interest rate swap	$	4,575	LIBOR + 4.50	%	5.575	%	June 2014

Over the next 12 months, the Company expects that $0.9 million of expense and $0.7 million of income related to the qualifying cash flow hedges and previously terminated cash flow hedges, respectively, will be reclassified from Accumulated other comprehensive income into earnings.

Credit risk-related contingent features—The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

In connection with its foreign currency derivatives, as of September 30, 2011, the Company has posted collateral of $13.1 million, which is included in "Restricted cash" on the Company's Consolidated Balance Sheets.

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6887037&loc=d3e80784-113994

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5579245-113959

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624163-113959

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624171-113959

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41638-113959

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5580258-113959

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5579240-113959

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41641-113959

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41620-113959

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 25
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4E
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624181-113959

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4A
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5618551-113959

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4D
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624177-113959

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6887037&loc=d3e80748-113994

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4H
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624258-113959

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4K
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5708775-113959

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41635-113959

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(n))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5708773-113959

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

+ Details

Commitments and Contingencies

9 Months Ended

Sep. 30, 2011

Commitments and Contingencies

Commitments and Contingencies

Note 11—Commitments and Contingencies

Business Risks and Uncertainties—The economic recession and tightening of capital markets adversely affected the Company's business. The Company experienced significant provisions for loan losses and impairments resulting from high levels of non-performing loans and increasing amounts of real estate owned as the Company took title to assets of defaulting borrowers. The economic conditions and their effect on the Company's operations also resulted in increases in its financing costs and an inability to access the unsecured debt markets. Since the beginning of the crisis, the Company has significantly curtailed asset originations and has focused primarily on resolving problem assets, generating liquidity, retiring debt, decreasing leverage and preserving shareholder value.

The Company saw signs of an economic recovery during 2010 and early 2011, including some improvements in the commercial real estate market and capital markets. These conditions resulted in reduced additions to non-performing loans, reductions in provisions for loan losses and increased levels of liquidity to fund operations, which allowed the Company to complete the Secured Credit Facility in March of 2011. The current volatility within the capital markets and commercial real estate market continues to have an effect on the Company's operations, primarily evidenced by continuing elevated levels of non-performing assets and limited access to liquidity. Additionally, improvement in the Company's financial condition and operating results and its ability to generate future liquidity, are dependent on a sustained economic recovery, which cannot be predicted with certainty.

As of September 30, 2011, the Company had $1.76 billion of debt maturing and minimum required amortization payments due on or before December 31, 2012. The Company had $217.0 million of unrestricted cash outstanding at quarter-end and its capital sources in the coming year will primarily include loan repayments, proceeds from strategic asset sales and may include debt refinancings and equity capital raising transactions. However, the timing and amounts of proceeds from asset repayments and sales, and the Company's ability to consummate debt refinancings and equity capital raising transactions are subject to factors outside its control and cannot be predicted with certainty. The Company's plans are dynamic and it may adjust its plans in response to changes in its expectations and changes in market conditions. The Company would be materially adversely affected if it is unable to repay or refinance its debt as it comes due.

Unfunded Commitments—As of September 30, 2011, the maximum amount of fundings the Company may be required to make under each category, assuming all performance hurdles and milestones are met under the Performance-Based Commitments, that it approves all Discretionary Fundings and that 100% of its capital committed to Strategic Investments is drawn down, are as follows ($ in thousands):

		Loans		Net Lease Assets		Strategic Investments		Total

Performance-Based Commitments		$	57,568	$	9,880	$	—	$	67,448
Discretionary Fundings			155,574		—		—		155,574
Other			—		—		30,493		30,493

	Total	$	213,142	$	9,880	$	30,493	$	253,515

Equity

9 Months Ended

Sep. 30, 2011

Equity

Equity

Note 12—Equity

Preferred Stock—The Company had the following series of Cumulative Redeemable Preferred Stock outstanding as of September 30, 2011 and December 31, 2010:

					Cumulative Preferential Cash Dividends(1)(2)

	Shares Authorized, Issued and Outstanding ($ in thousands)				Cumulative Preferential Cash Dividends(1)(2)
Series	Shares Authorized, Issued and Outstanding ($ in thousands)		Par Value		Rate per Annum of the $25.00 Liquidation Preference			Equivalent to Fixed Annual Rate (per share)
D		4,000	$	0.001		8.00	%	$	2.00
E		5,600	$	0.001		7.875	%	$	1.97
F		4,000	$	0.001		7.8	%	$	1.95
G		3,200	$	0.001		7.65	%	$	1.91
I		5,000	$	0.001		7.50	%	$	1.88

		21,800

Explanatory Notes:

(1): Holders of shares of the Series D, E, F, G and I preferred stock are entitled to receive dividends, when and as declared by the Board of Directors, out of funds legally available for the payment of dividends. 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 dividend payable on the 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.
(2): The Company declared and paid dividends aggregating $6.0 million, $8.3 million, $5.8 million, $4.6 million and $7.0 million on its Series D, E, F, G, and I preferred stock, respectively, during the nine months ended September 30, 2011. There are no dividend arrearages on any of the preferred shares currently outstanding.

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, excluding net capital gains, and must distribute 100% of its taxable income (including net capital gains) to avoid paying corporate federal income taxes. The Company has recorded net operating losses and may record net operating losses in the future, which may reduce its taxable income in future periods and lower or eliminate entirely the Company's obligation to pay dividends for such periods in order to maintain its REIT qualification. Because taxable income differs from cash flow from operations due to non-cash revenues and expenses (such as depreciation and certain asset impairments), in certain circumstances, the Company may generate operating cash flow in excess of its dividends or, alternatively, may be required to borrow to make sufficient dividend payments. The Company's Secured Credit Facility permits the Company to distribute 100% of its REIT taxable income on an annual basis, for so long as the Company maintains its qualification as a REIT. The Secured Credit Facility restricts the Company from paying any common dividends if it ceases to qualify as a REIT. The Company did not declare or pay any Common Stock dividends for the nine months ended September 30, 2011 and 2010.

Stock Repurchase Programs—On August 8, 2011, the Company's Board of Directors authorized the repurchase of up to $65.0 million of its Common Stock from time to time in open market and privately negotiated purchases, including pursuant to one or more trading plans.

During the nine months ended September 30, 2011, the Company repurchased 12.3 million shares of its outstanding Common Stock for approximately $78.8 million, at an average cost of $6.40 per share, and repurchases were recorded at cost. As of September 30, 2011, the Company had $0.6 million of Common Stock available to repurchase under its Board authorized stock repurchase programs.

Stock-Based Compensation Plans and Employee Benefits

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation Plans and Employee Benefits

Stock-Based Compensation Plans and Employee Benefits

Note 13—Stock-Based Compensation Plans and Employee Benefits

Stock-based Compensation—The Company recorded stock-based compensation expense of $7.2 million and $15.6 million for the three and nine months ended September 30, 2011, respectively, and $3.9 million and $13.6 million for the three and nine months ended September 30, 2010, respectively, in "General and administrative" on the Company's Consolidated Statements of Operations. As of September 30, 2011, there was $28.1 million of total unrecognized compensation cost related to all unvested restricted stock units. That cost is expected to be recognized over a weighted average remaining vesting/service period of 0.77 years. As of September 30, 2011, an aggregate of 3.3 million shares remain available for issuance pursuant to future awards under the Company's 2006 and 2009 Long-Term Incentive Plans.

Restricted Stock Units

2011 Awards—During the nine months ended September 30, 2011, the Company granted 721,257 service-based restricted stock units to employees with original vesting terms ranging from two to three years. Unit holders will receive shares of the Company's Common Stock in the amount of the units granted, net of statutory minimum tax withholdings, if and when the units vest. As of September 30, 2011, 720,057 of the awards remain outstanding. These awards carry dividend equivalent rights that entitle the holder to receive dividend payments prior to vesting, if and when dividends are paid on shares of the Company's Common Stock. The aggregate grant date fair value of these awards was $6.3 million.

Other Outstanding Awards—In addition to the awards granted in 2011, noted above, the following awards remained outstanding as of September 30, 2011:

•

1,346,566 service-based restricted stock units granted to employees that represent the right to receive an equivalent number of shares of the Company's Common Stock. Unit holders will receive shares of the Company's Common Stock in the amount of the units granted, net of statutory minimum tax withholdings, if and when the units vest. These units will cliff vest on February 17, 2012 if the employee is employed by the Company on that date and carry dividend equivalent rights that entitle the holder to receive dividend payments prior to vesting, if and when dividends are paid on shares of the Company's Common Stock.

•

806,518 performance-based restricted stock units granted to the Company's Chairman and Chief Executive Officer that represent the right to receive an equivalent number of shares of the Company's Common Stock. The unit holder will receive shares of the Company's Common Stock in the amount of the units granted, net of statutory minimum tax withholdings, if and when the units vest. The performance-based units will cliff vest on March 2, 2012 if certain performance and service conditions have been achieved, relating to reductions in the Company's general and administrative expenses, retirement of debt and continued employment. The performance conditions were satisfied during the year ended December 31, 2010, therefore, vesting is now based solely on continued employment through March 2, 2012. Since the performance conditions have been achieved, these units now carry dividend equivalent rights that entitle the holder to receive dividend payments, if and when dividends are paid on shares of the Company's Common Stock.

•

8,305,000 market-condition based restricted stock units granted to executives and other officers of the Company on December 19, 2008. These units will vest in one installment on January 1, 2012 if the Common Stock achieves a price of $10.00 or more (average NYSE closing price over 20 consecutive trading days) prior to December 19, 2011 and the employee is thereafter employed on the vesting date. If this price target is achieved, the units will thereafter be entitled to dividend equivalent payments as dividends are paid on the Company's Common Stock. Upon vesting of these units, holders will receive shares of the Company's Common Stock in the amount of the vested units, net of statutory minimum tax withholdings. The Company modified the terms of these restricted stock units (the "Original Units") to provide that if the remaining share price target of $10.00 has not been met before December 19, 2011, a portion of the Original Units (the "Amended Units") will become eligible for future vesting if extended service period requirements are met. The number of Amended Units will be equal to 75% of the Original Units granted to an employee less, in the case of each executive level employee, the number of restricted stock units granted to the executive in March 2011. The Amended Units will vest ratably on each of January 1, 2012, 2013 and 2014, so long as the employee remains employed by the Company on the vesting dates. The amendment is expected to result in additional estimated non-cash expense of approximately $14.9 million which will be recognized over the extended service period through January 1, 2014. If the $10 price target is met prior to December 19, 2011, the remaining unamortized expense will be accelerated and recognized prior to the end of 2011. The incremental expense was measured based on the fair value of the modified award in excess of the fair value of the original award measured immediately before the terms were modified based on current assumptions. The estimated expense is based upon a number of assumptions and the actual expense could vary from the estimate if the actual experience regarding, among other things, forfeiture and vesting is different from the assumptions.

•

2,000,000 market-condition based restricted stock units contingently awarded to the Company's Chairman and Chief Executive Officer on October 9, 2008 and approved by shareholders on May 27, 2009. These units will cliff vest in one installment on October 9, 2011 only if the total shareholder return on the Company's Common Stock is at least 25% per year (compounded at the end of the three year vesting period, including dividends). Total shareholder return will be based on the average NYSE closing prices for the Company's Common Stock for the 20 days prior to: (a) the date of the award on October 9, 2008; and (b) the vesting date. No dividends will be paid on these units prior to vesting. Upon vesting of these units, the holder will receive shares of the Company's Common Stock in the amount of the vested units, net of statutory minimum tax withholdings. Subsequent to quarter end, these units were canceled as the shareholder return target was not achieved. On October 7, 2011, the Company granted 2,000,000 service-based restricted stock units to the Company's Chairman and Chief Executive Officer which will vest in installments of 40% on October 15, 2011 and 30% each on June 15 of 2013 and 2014.

•

1,525,000 restricted stock units awarded to certain officers on October 9, 2008, as special retention incentive, which will cliff vest in one installment on October 9, 2011, if the holders are employed on the vesting date. The unvested units are entitled to receive dividend equivalent payments as dividends are paid on shares of the Company's Common Stock. These units all vested subsequent to quarter end and as a result, 997,061 shares were issued to certain officers, after deducting the minimum required shares for statutory withholding taxes.

•

61,330 service-based restricted stock units granted to employees with original vesting terms ranging from three to five years that are entitled to be paid dividends as dividends are paid on shares of the Company's Common Stock.

The fair value of the modified December 19, 2008 market-condition based restricted stock units, were determined by utilizing a Monte Carlo model to simulate a range of possible future stock prices for the Company's Common Stock. The following assumptions were used to estimate the fair value of this market-condition based award:



Risk-free interest rate	0.092	%
Expected stock price volatility	57.75	%
Expected annual dividend	—

Stock Options—As of September 30, 2011, the Company had 44,296 stock options outstanding and exercisable with a weighted average strike price of $29.82 and a weighted average remaining contractual life of 0.66 years.

Common Stock Equivalents ("CSEs")—During the nine months ended September 30, 2011, the Company awarded to Directors 61,160 CSEs with a service vesting period ending in May 2012. These CSEs pay dividends in an amount equal to the dividends paid on the equivalent number of shares of the Company's Common Stock from the date of grant, as and when dividends are paid on the Common Stock. The aggregate grant date fair value of these awards was $0.5 million. As of September 30, 2011, 343,118 CSEs granted to Directors remained outstanding and had an aggregate intrinsic value of $2.0 million.

During the nine months ended September 30, 2011, the Company's Board of Directors decided pursuant to the terms of the non-employee directors deferral plan to require settlement of CSEs in shares of the Company's Common Stock, thereby eliminating the cash settlement option. This modification converted these liability-based awards to equity awards and as such, the Company reclassified $2.4 million from "Accounts payable, accrued expenses and other liabilities" to "Additional paid-in capital" during the nine months ended September 30, 2011.

401(k) Plan—The Company made gross contributions to its 401(k) Plan of approximately $0.2 million and $0.6 million for the three and nine months ended September 30, 2011, respectively, and $0.1 million and $0.9 million for the three and nine months ended September 30, 2010, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Earnings Per Share

9 Months Ended

Sep. 30, 2011

Earnings Per Share

Earnings Per Share

Note 14—Earnings Per Share

The following table presents a reconciliation of income (loss) from continuing operations used in the basic and diluted EPS calculations ($ in thousands, except for per share data):

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,

	2011			2010			2011			2010
Income (loss) from continuing operations	$	(77,911	)	$	(78,950	)	$	(19,476	)	$	(151,780	)
Net (income) loss attributable to noncontrolling interests		1,002			(858	)		558			(857	)
Preferred dividends		(10,580	)		(10,580	)		(31,740	)		(31,740	)

Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders, HPU holders and Participating Security holders	$	(87,489	)	$	(90,388	)	$	(50,658	)	$	(184,377	)

Earnings per share allocable to common shares and HPU shares are calculated as follows ($ in thousands, except for per share data):

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,

	2011			2010			2011			2010
Earnings allocable to common shares:
Numerator for basic and diluted earnings per share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders	$	(84,754	)	$	(87,722	)	$	(49,127	)	$	(178,958	)
Income (loss) from discontinued operations		1,019			(101	)		483			19,870
Gain from discontinued operations		21,504			4,292			21,527			262,421

Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders	$	(62,231	)	$	(83,531	)	$	(27,117	)	$	103,333

Denominator for basic and diluted earnings per share:
Weighted average common shares outstanding for basic and diluted earnings per common share		87,951			93,370			91,020			93,556

Basic and diluted earnings per common share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to common shareholders	$	(0.96	)	$	(0.94	)	$	(0.55	)	$	(1.91	)
Income (loss) from discontinued operations		0.01			—			0.01			0.21
Gain from discontinued operations		0.24			0.05			0.24			2.80

Net income (loss) attributable to iStar Financial Inc. and allocable to common shareholders	$	(0.71	)	$	(0.89	)	$	(0.30	)	$	1.10

Earnings allocable to High Performance Units:
Numerator for basic and diluted earnings per HPU share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to HPU holders	$	(2,735	)	$	(2,666	)	$	(1,531	)	$	(5,419	)
Income (loss) from discontinued operations		33			(3	)		15			603
Gain from discontinued operations		694			130			671			7,961

Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders	$	(2,008	)	$	(2,539	)	$	(845	)	$	3,145

Denominator for basic and diluted earnings per HPU share:
Weighted average High Performance Units outstanding for basic and diluted earnings per share		15			15			15			15

Basic and diluted earnings per HPU share:
Income (loss) from continuing operations attributable to iStar Financial Inc. and allocable to HPU holders	$	(182.34	)	$	(177.74	)	$	(102.06	)	$	(361.26	)
Income (loss) from discontinued operations		2.20			(0.20	)		1.00			40.20
Gain from discontinued operations		46.27			8.67			44.73			530.73

Net income (loss) attributable to iStar Financial Inc. and allocable to HPU holders	$	(133.87	)	$	(169.27	)	$	(56.33	)	$	209.67

For the three and nine months ended September 30, 2011 and 2010, the following shares were anti-dilutive (in thousands):

	For the Three and Nine Months Ended September 30,

	2011		2010
Joint venture shares		298		298
Stock options		44		143

Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2011

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Note 15—Comprehensive Income (Loss)

The statement of comprehensive income (loss) attributable to iStar Financial, Inc. is as follows ($ in thousands):

		For the Three Months Ended September 30,						For the Nine Months Ended September 30,

		2011			2010			2011			2010
Net income (loss)		$	(54,661	)	$	(74,632	)	$	3,220		$	139,075
Other comprehensive income:
Reclassification of (gains)/losses on available-for-sale securities into earnings upon realization			—			—			—			(4,206	)
Reclassification of (gains)/losses on cash flow hedges into earnings upon realization			(178	)		79			(531	)		(340	)
Unrealized gains/(losses) on available-for-sale securities			(129	)		36			499			76
Unrealized gains/(losses) on cash flow hedges			(284	)		—			(877	)		—
Unrealized gains/(losses) on cumulative translation adjustment			(922	)		1,780			808			352

Comprehensive income (loss)		$	(56,174	)	$	(72,737	)	$	3,119		$	134,957
	Net (income) loss attributable to noncontrolling interests		1,002			(858	)		558			(857	)

Comprehensive income (loss) attributable to iStar Financial Inc.		$	(55,172	)	$	(73,595	)	$	3,677		$	134,100

Accumulated other comprehensive income reflected in the Company's shareholders' equity is comprised of the following ($ in thousands):

	As of

	September 30, 2011			December 31, 2010
Unrealized gains on available-for-sale securities	$	697		$	198
Unrealized gains on cash flow hedges		1,949			3,357
Unrealized losses on cumulative translation adjustment		(1,138	)		(1,946	)

Accumulated other comprehensive income	$	1,508		$	1,609

- Definition

The entire disclosure for comprehensive income. Includes, but is not limited to, the following: 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income. Components of comprehensive income include: (1) foreign currency translation adjustments; (2) gains (losses) on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (3) gains (losses) on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (4) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (5) unrealized holding gains (losses) on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (6) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (7) the net gain (loss) and net prior service cost or credit for pension plans and other postretirement benefit plans.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 14-26
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e637-108580

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e681-108580

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e653-108580

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e709-108580

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 55
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6920433&loc=d3e998-108581

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e640-108580

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e716-108580

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e689-108580

+ Details

Fair Values

9 Months Ended

Sep. 30, 2011

Fair Values

Fair Values

Note 16—Fair Values

Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value:

        Level 1:    Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

        Level 2:    Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

        Level 3:    Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Certain of the Company's assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required to be marked-to-market and reported at fair value every reporting period are classified as being valued on a recurring basis. Other assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are classified as being valued on a non-recurring basis.

The following table summarizes the Company's assets and liabilities for which fair value adjustments were recorded as of the end of the respective periods ($ in thousands):

					Fair Value Using

			Total		Quoted market prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
As of September 30, 2011:
Recurring basis:
	Financial Assets:
		Marketable securities—equity securities	$	434	$	434	$	—	$	—
		Derivative assets	$	1,650	$	—	$	1,650	$	—
	Financial Liabilities:
		Derivative liabilities	$	2,381	$	—	$	2,381	$	—
Non-recurring basis:
	Financial Assets:
		Impaired loans	$	214,760	$	—	$	—	$	214,760
	Non-financial Assets:
		Impaired OREO	$	55,325	$	—	$	—	$	55,325
As of December 31, 2010:
Recurring basis:
	Financial Assets:
		Marketable securities—equity securities	$	699	$	699	$	—	$	—
	Financial Liabilities:
		Derivative liabilities	$	223	$	—	$	223	$	—
Non-recurring basis:
	Financial Assets:
		Impaired loans	$	616,070	$	—	$	—	$	616,070
		Impaired equity method investment	$	1,535	$	—	$	—	$	1,535
	Non-financial Assets:
		Impaired OREO	$	54,141	$	—	$	—	$	54,141

In addition to the Company's disclosures regarding assets and liabilities recorded at fair value in the financial statements, it is also required to disclose the estimated fair values of all financial instruments, regardless of whether they are recorded at fair value in the financial statements.

The carrying and estimated fair values of financial instruments were as follows ($ in thousands)(1):

		As of September 30, 2011				As of December 31, 2010

		Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
	Loans and other lending investments, net	$	3,283,725	$	3,140,431	$	4,587,352	$	4,256,663
Financial liabilities:
	Debt obligations, net	$	5,995,050	$	5,569,033	$	7,345,433	$	6,767,968

Explanatory Note:

(1): The carrying values of other financial instruments including cash and cash equivalents, restricted cash, accrued interest receivable and accounts payable, approximate the fair values of the instruments. The fair value of other financial instruments, including derivative assets and liabilities and marketable securities are included in the previous table.

Given the nature of certain assets and liabilities, clearly determinable market based valuation inputs are often not available, therefore, these assets and liabilities are valued using internal valuation techniques. Subjectivity exists with respect to these internal valuation techniques, therefore, the fair values disclosed may not ultimately be realized by the Company if the assets were sold or the liabilities were settled with third parties. The methods the Company used to estimate the fair values presented in the two tables are described more fully below for each type of asset and liability.

Derivatives—The Company uses interest rate swaps and foreign currency derivatives to manage its interest rate and foreign currency risk. The valuation of these instruments is determined using discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own non-performance risk and the respective counterparty's non-performance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of non-performance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. The Company has determined that the significant inputs used to value its derivatives fall within Level 2 of the fair value hierarchy.

Securities—All of the Company's available-for-sale and impaired held-to-maturity debt and equity securities are actively traded and have been valued using quoted market prices. The Company's traded marketable securities are valued using market quotes, to the extent they are available, or broker quotes that fall within Level 2 of the fair value hierarchy.

Impaired loans—The Company's loans identified as being impaired are nearly all collateral dependent loans and are evaluated for impairment by comparing the estimated fair value of the underlying collateral, less costs to sell, to the carrying value of each loan. Due to the nature of the individual properties collateralizing the Company's loans, the Company generally uses a discounted cash flow methodology through internally developed valuation models to estimate the fair value of the collateral. This approach requires the Company to make significant judgments in respect to discount rates, capitalization rates and the timing and amounts of estimated future cash flows that are all considered Level 3 inputs. These cash flows generally include property revenues, lot and unit sale prices and velocity, operating costs, and costs of completion. In more limited cases, the Company obtains external "as is" appraisals for loan collateral, generally when third party participations exist, and appraised values may be discounted when real estate markets rapidly deteriorate.

Impaired OREO assets—If the Company determines an OREO asset is impaired it records an impairment charge to adjust the asset to its estimated fair market value less costs to sell. Due to the nature of the individual properties in the OREO portfolio, the Company generally uses a discounted cash flow methodology through internally developed valuation models to estimate the fair value of the assets. This approach requires the Company to make significant judgments with respect to discount rates, capitalization rates and the timing and amounts of estimated future cash flows that are all considered Level 3 inputs. These cash flows generally include property revenues, lot and unit sale prices and velocity, operating costs, and costs of completion.

Impaired equity method investments—If the Company determines an equity method investment is other than temporarily impaired it records an impairment charge to adjust the investment to its estimated fair market value. To estimate the fair value of an investment in a fund that invests in real estate, the Company estimates the fair value of the individual properties held within the fund using a discounted cash flow methodology through internally developed valuation models. This approach requires the Company to make significant judgments with respect to discount rates, capitalization rates and the timing and amounts of estimated future cash flows that are all considered Level 3 inputs. These cash flows are primarily based on expected future leasing rates, operating costs and sales prices.

Impaired cost method investments—If the Company determines a cost method investment is other than temporarily impaired, it records an impairment charge to adjust the investment to its estimated fair market value. The Company estimates the fair value of its impaired cost method investments using internally developed valuation models.

Loans and other lending investments—The Company estimates the fair value of its performing loans and other lending investments using a discounted cash flow methodology. This method discounts estimated future cash flows using rates management determines best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality.

Debt obligations, net—For debt obligations traded in secondary markets, the Company uses market quotes, to the extent they are available, to determine fair value. For debt obligations not traded in secondary markets, the Company determines fair value using a discounted cash flow methodology, whereby contractual cash flows are discounted at rates that management determines best reflect current market interest rates that would be charged for debt with similar characteristics and credit quality.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13537-108611

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13504-108611

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

+ Details

Segment Reporting

9 Months Ended

Sep. 30, 2011

Segment Reporting

Segment Reporting

Note 17—Segment Reporting

The Company has determined that it has three reportable segments based on how management reviews and manages its business. These reportable segments include: Real Estate Lending, Net Leasing and Real Estate Investment. The Real Estate Lending segment includes all of the Company's activities related to senior and mezzanine real estate debt and corporate capital investments. The Net Leasing segment includes all of the Company's activities related to the ownership and leasing of corporate facilities. The Real Estate Investment segment includes all of the Company's activities related to the operations, repositioning and ultimate disposition of REHI and OREO properties.

The Company evaluates performance based on the following financial measures for each segment ($ in thousands):

		Real Estate Lending			Net Leasing			Real Estate Investment			Corporate/ Other(1)			Company Total

*Three months ended September 30, 2011:*
Total revenue(2)		$	47,290		$	41,369		$	8,207		$	494		$	97,360
Earnings (loss) from equity method investments			—			650			(1,267	)		11,434			10,817
Operating costs			(1,382	)		(5,048	)		(19,792	)		(2,592	)		(28,814	)
Interest expense			(41,858	)		(22,915	)		(20,387	)		(6,617	)		(91,777	)
General and administrative(3)			(4,801	)		(2,628	)		(2,338	)		(10,058	)		(19,825	)

	Segment profit (loss)(4)	$	(751	)	$	11,428		$	(35,577	)	$	(7,339	)	$	(32,239	)
Other significant non-cash items:
	Provision for loan losses	$	9,232		$	—		$	—		$	—		$	9,232
	Impairment of assets	$	—		$	650		$	9,262		$	—		$	9,912
	Depreciation and amortization	$	—		$	13,544		$	761		$	509		$	14,814
Capitalized expenditures		$	—		$	6,237		$	18,949		$	—		$	25,186
*Three months ended September 30, 2010(5):*
Total revenue(2)		$	86,464		$	40,471		$	5,597		$	765		$	133,297
Earnings from equity method investments			—			605			—			5,918			6,523
Operating costs			(1,691	)		(5,226	)		(19,111	)		(2,528	)		(28,556	)
Interest expense			(46,109	)		(15,536	)		(12,147	)		(3,494	)		(77,286	)
General and administrative(3)			(6,489	)		(2,186	)		(1,709	)		(9,972	)		(20,356	)

	Segment profit (loss)(4)	$	32,175		$	18,128		$	(27,370	)	$	(9,311	)	$	13,622
Other signficant non-cash items:
	Provision for loan losses	$	78,414		$	—		$	—		$	—		$	78,414
	Impairment of assets	$	—		$	4,202		$	(370	)	$	—		$	3,832
	Depreciation and amortization	$	—		$	13,262		$	1,373		$	611		$	15,246
Capitalized expenditures		$	—		$	2,395		$	7,593		$	—		$	9,988

		Real Estate Lending			Net Leasing			Real Estate Investment			Corporate/ Other(1)			Company Total

*Nine months ended September 30, 2011:*
Total revenue(2)		$	189,273		$	123,090		$	22,356		$	1,589		$	336,308
Earnings (loss) from equity method investments			—			1,919			(6,718	)		59,680			54,881
Operating costs			(1,697	)		(14,303	)		(55,582	)		(5,459	)		(77,041	)
Interest expense			(127,105	)		(60,837	)		(53,080	)		(17,161	)		(258,183	)
General and administrative(3)			(15,750	)		(7,538	)		(6,577	)		(31,590	)		(61,455	)

	Segment profit (loss)(4)	$	44,721		$	42,331		$	(99,601	)	$	7,059		$	(5,490	)
Other signficant non-cash items:
	Provision for loan losses	$	30,462		$	—		$	—		$	—		$	30,462
	Impairment of assets	$	—		$	650		$	12,643		$	872		$	14,165
	Depreciation and amortization	$	—		$	40,474		$	4,315		$	1,565		$	46,354
Capitalized expenditures		$	—		$	11,138		$	34,915		$	—		$	46,053
*Nine months ended September 30, 2010(5):*
Total revenue(2)		$	293,902		$	124,760		$	14,111		$	2,151		$	434,924
Earnings from equity method investments			—			1,873			—			29,830			31,703
Operating costs			(9,340	)		(11,279	)		(45,166	)		(3,981	)		(69,766	)
Interest expense			(166,062	)		(34,232	)		(36,270	)		(10,251	)		(246,815	)
General and administrative(3)			(20,145	)		(7,855	)		(4,400	)		(30,572	)		(62,972	)

	Segment profit (loss)(4)	$	98,355		$	73,267		$	(71,725	)	$	(12,823	)	$	87,074
Other signficant non-cash items:
	Provision for loan losses	$	277,242		$	—		$	—		$	—		$	277,242
	Impairment of assets	$	(3,925	)	$	4,202		$	16,764		$	—		$	17,041
	Depreciation and amortization	$	—		$	39,907		$	3,757		$	3,058		$	46,722
Capitalized expenditures		$	—		$	10,108		$	18,528		$	—		$	28,636
*As of September 30, 2011:*
Total assets(6)		$	3,314,539		$	1,895,826		$	1,708,325		$	835,162		$	7,753,852
*As of December 31, 2010:*
Total assets(6)		$	4,636,777		$	1,915,164		$	1,594,859		$	1,027,714		$	9,174,514

Explanatory Notes:

(1): Corporate/Other represents all corporate level and unallocated items including any intercompany eliminations necessary to reconcile to consolidated Company totals. This caption also includes the Company's joint venture investments and strategic investments that are not related to the other reportable segments above, including the Company's equity investment in LNR of $143.0 million and $122.2 million, as of September 30, 2011 and December 31, 2010, respectively, and the Company's share of equity in earnings from LNR of $12.5 million and $36.6 million, for the three and nine months ended September 30, 2011, respectively, and $2.3 million for both the three and nine months ended September 30, 2010. See Note 7 for further details on the Company's investment in LNR and summarized financial information of LNR.

(2): Total revenue represents all revenue earned during the period related to the assets in each segment. Revenue from the Real Estate Lending segment primarily represents interest income, revenue from the Net Leasing segment primarily represents operating lease income and revenue from Real Estate Investment primarily represents operating revenues from REHI properties.
(3): General and administrative excludes stock-based compensation expense of $7.2 million and $15.6 million for the three and nine months ended September 30, 2011, respectively, and $3.9 million and $13.6 million for the three and nine months ended September 30, 2010, respectively.
(4): The following is a reconciliation of segment profit (loss) to income (loss) from continuing operations ($ in thousands):

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,

	2011			2010			2011			2010
Segment profit (loss)	$	(32,239	)	$	13,622		$	(5,490	)	$	87,074
Less: Provision for loan losses		(9,232	)		(78,414	)		(30,462	)		(277,242	)
Less: Impairment of assets		(9,912	)		(3,832	)		(14,165	)		(17,041	)
Less: Stock-based compensation expense		(7,153	)		(3,883	)		(15,622	)		(13,597	)
Less: Depreciation and amortization		(14,814	)		(15,246	)		(46,354	)		(46,722	)
Add: Income tax (expense) benefit		(1,354	)		(722	)		(9,731	)		(2,557	)
Add: Gain (loss) on early extinguishment of debt, net		(3,207	)		9,525			102,348			118,305

Income (loss) from continuing operations	$	(77,911	)	$	(78,950	)	$	(19,476	)	$	(151,780	)

(5): Prior period presentation has been reclassified to conform with current period presentation.
(6): Intangible assets included in Net Leasing at September 30, 2011 and December 31, 2010 were $18.7 million and $24.5 million, respectively.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

+ Details

Subsequent Events

9 Months Ended

Sep. 30, 2011

Subsequent Events

Subsequent Events

Note 18—Subsequent Events

On October 25, 2011, the Company sold a substantial portion of its interests in Oak Hill Advisors, L.P. and related entities in an all cash transaction. The transaction was completed in part through sales of interests to an unrelated third party and to the principals of Oak Hill, and in part through a redemption of interests by Oak Hill Advisors, L.P. The Company expects to record a pre-tax gain of approximately $30 million on the carrying value of the investment in the fourth quarter of 2011. Glenn R. August, a director of the Company who was appointed to its board of directors in connection with the Company's acquisition of the Oak Hill interests in 2005, is the president and senior partner of Oak Hill Advisors, L.P. and acquired a portion of the interests in the transaction.

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2011	Nov. 02, 2011
Document and Entity Information
Entity Registrant Name	ISTAR FINANCIAL INC
Entity Central Index Key	0001095651
Document Type	10-Q
Document Period End Date	Sep. 30, 2011
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		81,917,894
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3