Investor Presentaiton
Distributable Earnings (cont'd)
■ While Distributable Earnings excludes the impact of the unrealized non-cash current provision for credit losses, we expect to only
recognize such potential credit losses in Distributable Earnings if and when such amounts are deemed non-recoverable. This is
generally at the time a loan is repaid, or in the case of foreclosure, when the underlying asset is sold, but non-recoverability may
also be concluded if, in our determination, it is nearly certain that all amounts due will not be collected. The realized loss amount
reflected in Distributable Earnings will equal the difference between the cash received, or expected to be received, and the carrying
value of the asset, and is reflective of our economic experience as it relates to the ultimate realization of the loan. During the three
months ended September 30, 2023, we recorded provision for credit losses of $(31.0) million, which has been excluded from
Distributable Earnings, consistent with other unrealized gains (losses) and other non-cash items pursuant to our existing policy for
reporting Distributable Earnings. During the three months ended September 30, 2023, we recorded $(1.4) million in depreciation
and amortization on real estate owned and related intangibles, which has been excluded from Distributable Earnings consistent
with other unrealized gains (losses) and other non-cash items pursuant to our existing policy for reporting Distributable Earnings,
consistent with certain one-time events pursuant to our existing policy for reporting Distributable Earnings as a helpful indicator in
assessing the overall run-rate operating performance of our business.
■ Distributable Earnings does not represent net income or cash flow from operating activities and should not be considered as an
alternative to GAAP net income, or an indication of our GAAP cash flows from operations, a measure of our liquidity, or an indication
of funds available for our cash needs. In addition, our methodology for calculating Distributable Earnings may differ from the
methodologies employed by other companies to calculate the same or similar supplemental performance measures, and,
accordingly, our reported Distributable Earnings may not be comparable to the Distributable Earnings reported by other companies.
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