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RAIT Financial Trust Message Board

  • ethison ethison Apr 30, 2013 3:16 PM Flag

    AFFO of 39 to 44

    Davis,
    On a different thread you suggested a blowout quarter with an AFFO of 39 cents per share or even as much #$%$ cents higher than that (44). At the same time you referenced the last Investor Presentation. On page 15 of that presentation they claim a cash flow range between 95 cents and 123 cents for 2013............yes there are many qualifiers related to that projection................why would your numbers be so much higher and if you confirm (after you review your model) that 39 is the right number for the first quarter, is this a sustainable number, or is this based on one time events?

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    • Eman, It Alwas Comes Down To A Guess Just Like Most On The Board Said It Was Going To Be A Good Earnings Report [Which It Was] Some Were Coming Out On The Negitive Side Look At All The Ones Who Said It Would Be Over Nine Today Or Under Eigth. On A Day By Day Its Just A Guess Long Term I,ll Say Ras Is A Good Bet But The Numbers That Some Are Putting Out There Are Unreal.

    • First, the number I put up last night was explicitly a preliminary number: That I wanted to check everything again. I've been doing that. The numbers haven't changed much as I've been "making things more conservative", but the model's AFFO estimate is currently is down to 35 cents, which is still a pretty big increase.

      Second, cash flow and AFFO aren't the same thing, and that "Net cash flow available to common shareholders" (the number you are looking at) isn't the same as cash flow. For the moment, I'll simply say that my numbers aren't out of line with the estimate that RAS provides for "net cash flow available to common shareholders". When my model suggested 39 cents AFFO, 28 cents ($1.12 annually) was available to shareholders. At 35 cents the amount avaialble to common shareholders is 24 cents (96 cents annually) and the 65% guideline suggests a dividend as high as 16 cents (higher than anyone has projected and, I suspect, two cents higher than what RAS will do.

      Third, the investor presentation is actually very conservative in its estimates It essentially extrapolates the 4Q results forward for 4 quarters without assuming any real growth. The only obvious exception to that is CBMS originations and securitizations.

      But, and take this as fourth, RAS did a lot of business in 4Q that should turn into increased investment interest income during 1Q and it should be seeing improvements in rents and occupancy as well. It seems pretty obvious, moreover, that it has done a lot of business in 1Q as well, so it makes sense to model in at least some growth. I have done so.

      Hope this helps.

      • 4 Replies to davisfoulger
      • Shares outstanding went from 50,988,427 to 60,363,153. Without this dilution your estimates would have been closer.

        Sentiment: Strong Buy

      • Davis,
        What number does your model show this morning:-)
        You might want to scrap that model of yours. I'm not sure what it is modeling, but it certainly isn't modeling anything of RAS's. Some people might throw something different than rose peddles at you during the annual meeting:-)

      • Thanks, it does help. As I think you know, I have become quite optimistic about ras's prospects and accordingly have made a nice size bet.
        I do realize that the investor presentation assumes status quo, and we are doing so much better than status quo.......in the overall big picture as well as with RAS itself with it's unique specific issues.
        Two cents more would be phenomenal and all of the other numbers you have proposed would also be excellent.

      • For a change I agree with Davis. I agree they should have had a strong 1st quarter and I expect to hear they've had an even stronger start to the 2nd quarter (that's the only reason they would need to raise more equity). We'll for sure get a $.02 increase and I hope to hear Schaefer say they expect to be ahead of budget by the end of the 2nd quarter (meaning maybe we get a $.03 increase in the 3rd or 4th quarters). Lastly, it's amazing how many of you guys don't listen. On this board and in the conf calls it's been mentioned numerous times that AFFO is different than the free cash flow (with free cash flow being the number that the dividend is based on). Difference is AFFO includes cash earned by the Tabernas. However, that cash is restricted and can only be used to payoff Taberna bonds.

 
RAS
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