LADR Ladder Capital Corp

Ladder Capital Corp (NYSE: LADR) (“we,” “our,” “Ladder,” or the “Company”) today announced operating results for the quarter and year ended December 31, 2024. GAAP income before taxes for the three months ended December 31, 2024 was $33.0 million, and diluted earnings per share (“EPS”) was $0.25. Distributable earnings was $33.6 million, or $0.27 of distributable EPS. GAAP income before taxes for the year ended December 31, 2024 was $110.9 million, and diluted earnings per share (“EPS”) was $0.86. Distributable earnings was $153.9 million, or $1.21 of distributable EPS.

“In the fourth quarter, Ladder generated strong earnings and dividend coverage. Throughout 2024, our middle market by choice business model continued to demonstrate success, as we received a significant amount of loan payoffs and our credit performed well overall. Our low leverage and robust liquidity position, which includes our upsized $850 million corporate revolving credit facility, enable us to focus on new investment opportunities as 2025 begins,” said Brian Harris, Ladder’s Chief Executive Officer.

Supplemental

The Company issued a supplemental presentation detailing its fourth quarter and full year 2024 operating results, which can be viewed at http://ir.laddercapital.com.

Conference Call and Webcast

We will host a conference call on Thursday, February 6, 2025 at 10:00 a.m. Eastern Time to discuss fourth quarter and full year 2024 results. The conference call can be accessed by dialing (877) 407-4018 domestic or (201) 689-8471 international. Individuals who dial in will be asked to identify themselves and their affiliations. For those unable to participate, an audio replay will be available until midnight on Thursday, February 20, 2025. To access the replay, please call (844) 512-2921 domestic or (412) 317-6671 international, access code 13750906. The conference call will also be webcast though a link on Ladder’s Investor Relations website at ir.laddercapital.com/event. A web-based archive of the conference call will also be available at the above website.

About Ladder

Ladder is a leading diversified commercial real estate finance platform that specializes in underwriting commercial real estate across the capital stack. With $4.8 billion of assets, our investment objective is to preserve and protect shareholder capital while generating attractive risk-adjusted returns.

Since 2008, we have invested over $46 billion in debt and equity, serving both institutional and middle-market clients. Our primary business is originating fixed and floating rate first mortgage loans secured by all commercial real estate property types. We also own and operate commercial real estate, including net leased commercial properties, and we invest in investment grade securities secured by first mortgage loans on commercial real estate.

We are internally managed and members of our management team and board of directors collectively own more than 11% of Ladder’s equity, making them the Company’s largest shareholder and aligning their interests closely with fellow stakeholders. Since our founding, their vision has been to support the Company’s investment platform with a conservative and durable capital structure. Our industry-leading credit ratings reflect this differentiated financing strategy.

Ladder is headquartered in New York City with a regional office in Miami, Florida. All amounts in this section are as of December 31, 2024.

Forward-Looking Statements

Certain statements in this release may constitute “forward-looking” statements. These statements are based on management’s current opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. These forward-looking statements are only predictions, not historical fact, and involve certain risks and uncertainties, as well as assumptions. Actual results, levels of activity, performance, achievements and events could differ materially from those stated, anticipated or implied by such forward-looking statements. While Ladder believes that its assumptions are reasonable, it is very difficult to predict the impact of known factors, and, of course, it is impossible to anticipate all factors that could affect actual results on the Company's business. There are a number of risks and uncertainties that could cause actual results to differ materially from forward-looking statements made herein including, most prominently, the risks discussed under the heading “Risk Factors” in each of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as well as its consolidated financial statements, related notes, and other financial information appearing therein, and its other filings with the U.S. Securities and Exchange Commission. Such forward-looking statements are made only as of the date of this release. Ladder expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or changes in events, conditions, or circumstances on which any such statement is based.

 

Ladder Capital Corp

Consolidated Balance Sheets

(Dollars in Thousands)

 

December 31,

 

December 31,

 

 

2024(1)

 

 

2023(1)

 

(Unaudited)

 

 

Assets

 

 

 

Cash and cash equivalents

$

1,323,481

 

 

$

1,015,678

 

Restricted cash

 

12,608

 

 

 

15,450

 

Mortgage loan receivables held for investment, net, at amortized cost:

 

 

 

Mortgage loans receivable

 

1,591,322

 

 

 

3,155,089

 

Allowance for credit losses

 

(52,323

)

 

 

(43,165

)

Mortgage loan receivables held for sale

 

26,898

 

 

 

26,868

 

Securities

 

1,080,839

 

 

 

485,533

 

Real estate and related lease intangibles, net

 

670,803

 

 

 

726,442

 

Investments in and advances to unconsolidated ventures

 

19,923

 

 

 

6,877

 

Derivative instruments

 

437

 

 

 

1,454

 

Accrued interest receivable

 

12,936

 

 

 

24,233

 

Other assets

 

158,149

 

 

 

98,218

 

Total assets

$

4,845,073

 

 

$

5,512,677

 

Liabilities and Equity

 

 

 

Liabilities

 

 

 

Debt obligations, net

$

3,135,617

 

 

$

3,783,946

 

Dividends payable

 

31,838

 

 

 

32,294

 

Accrued expenses

 

74,824

 

 

 

65,144

 

Other liabilities

 

69,855

 

 

 

99,095

 

Total liabilities

 

3,312,134

 

 

 

3,980,479

 

Commitments and contingencies

 

—

 

 

 

—

 

Equity

 

 

 

Class A common stock, par value $0.001 per share, 600,000,000 shares authorized; 129,883,019 and 128,027,478 shares issued and 127,106,481 and 126,911,689 shares outstanding as of December 31, 2024 and December 31, 2023, respectively.

 

127

 

 

 

127

 

Additional paid-in capital

 

1,777,118

 

 

 

1,756,750

 

Treasury stock, 2,776,538 and 1,115,789 shares, at cost

 

(30,475

)

 

 

(12,001

)

Retained earnings (dividends in excess of earnings)

 

(206,874

)

 

 

(197,875

)

Accumulated other comprehensive income (loss)

 

(4,866

)

 

 

(13,853

)

Total shareholders’ equity

 

1,535,030

 

 

 

1,533,148

 

Noncontrolling interests in consolidated ventures

 

(2,091

)

 

 

(950

)

Total equity

 

1,532,939

 

 

 

1,532,198

 

Total liabilities and equity

$

4,845,073

 

 

$

5,512,677

 

(1) Includes amounts relating to consolidated variable interest entities.

 

Ladder Capital Corp

Consolidated Statements of Income

(Dollars in Thousands, Except Per Share and Dividend Data)

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

 

2024

 

 

 

2024

 

 

 

2024

 

 

 

2023

 

 

(Unaudited)

 

(Unaudited)

 

 

Net interest income

 

 

 

 

 

 

 

Interest income

$

78,102

 

 

$

96,092

 

 

$

358,625

 

 

$

407,284

 

Interest expense

 

50,890

 

 

 

57,676

 

 

 

221,537

 

 

 

245,097

 

Net interest income (expense)

 

27,212

 

 

 

38,416

 

 

 

137,088

 

 

 

162,187

 

Provision for (release of) loan loss reserves, net

 

47

 

 

 

3,063

 

 

 

13,933

 

 

 

25,096

 

Net interest income (expense) after provision for (release of) loan loss reserves

 

27,165

 

 

 

35,353

 

 

 

123,155

 

 

 

137,091

 

Other income (loss)

 

 

 

 

 

 

 

Real estate operating income

 

23,368

 

 

 

25,294

 

 

 

98,681

 

 

 

96,950

 

Net result from mortgage loan receivables held for sale

 

(608

)

 

 

1,092

 

 

 

30

 

 

 

(523

)

Gain (loss) on real estate, net

 

12,419

 

 

 

315

 

 

 

25,277

 

 

 

8,808

 

Fee and other income

 

4,753

 

 

 

6,609

 

 

 

18,700

 

 

 

8,931

 

Net result from derivative transactions

 

1,549

 

 

 

(766

)

 

 

5,420

 

 

 

1,481

 

Earnings (loss) from investment in unconsolidated ventures

 

(68

)

 

 

(14

)

 

 

(79

)

 

 

758

 

Gain (loss) on extinguishment of debt

 

(9

)

 

 

20

 

 

 

188

 

 

 

10,718

 

Total other income (loss)

 

41,404

 

 

 

32,550

 

 

 

148,217

 

 

 

127,123

 

Costs and expenses

 

 

 

 

 

 

 

Compensation and employee benefits

 

11,754

 

 

 

14,407

 

 

 

60,671

 

 

 

63,618

 

Operating expenses

 

4,863

 

 

 

4,508

 

 

 

19,193

 

 

 

19,503

 

Real estate operating expenses

 

9,637

 

 

 

10,751

 

 

 

40,568

 

 

 

37,587

 

Investment related expenses

 

1,809

 

 

 

1,628

 

 

 

7,718

 

 

 

8,847

 

Depreciation and amortization

 

7,466

 

 

 

8,146

 

 

 

32,327

 

 

 

29,914

 

Total costs and expenses

 

35,529

 

 

 

39,440

 

 

 

160,477

 

 

 

159,469

 

Income (loss) before taxes

 

33,040

 

 

 

28,463

 

 

 

110,895

 

 

 

104,745

 

Income tax expense (benefit)

 

1,711

 

 

 

901

 

 

 

3,448

 

 

 

4,244

 

Net income (loss)

 

31,329

 

 

 

27,562

 

 

 

107,447

 

 

 

100,501

 

Net (income) loss attributable to noncontrolling interests in consolidated ventures

 

55

 

 

 

351

 

 

 

808

 

 

 

624

 

Net income (loss) attributable to Class A common shareholders

$

31,384

 

 

$

27,913

 

 

$

108,255

 

 

$

101,125

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.25

 

 

$

0.22

 

 

$

0.86

 

 

$

0.81

 

Diluted

$

0.25

 

 

$

0.22

 

 

$

0.86

 

 

$

0.81

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

125,549,113

 

 

 

125,705,754

 

 

 

125,576,784

 

 

 

124,667,877

 

Diluted

 

125,870,042

 

 

 

125,905,528

 

 

 

125,785,295

 

 

 

124,882,398

 

 

 

 

 

 

 

 

 

Dividends per share of Class A common stock

$

0.23

 

 

$

0.23

 

 

$

0.92

 

 

$

0.92

 

Non-GAAP Financial Measures

During the first quarter of 2024, the Company refined its definition of distributable earnings and its descriptions of the adjustments to GAAP income. The refined definition and descriptions do not change how distributable earnings or adjustments to GAAP income are calculated for prior, current or future periods. The Company utilizes distributable earnings, distributable EPS, and after-tax distributable return on average equity (“ROAE”), non-GAAP financial measures, as supplemental measures of our operating performance. We believe distributable earnings, distributable EPS and after-tax distributable ROAE assist investors in comparing our operating performance and our ability to pay dividends across reporting periods on a more relevant and consistent basis by excluding from GAAP measures certain non-cash expenses and unrealized results as well as eliminating timing differences related to conduit securitization gains and changes in the values of assets and derivatives. In addition, we use distributable earnings, distributable EPS and after-tax distributable ROAE: (i) to evaluate our earnings from operations because management believes that they may be useful performance measures; and (ii) because our board of directors considers distributable earnings in determining the amount of quarterly dividends. Distributable EPS is defined as after-tax distributable earnings divided by the weighted average diluted shares outstanding during the period. In addition, we believe it is useful to present distributable earnings and distributable EPS prior to charge-offs of allowance for credit losses to reflect our direct operating results and help existing and potential future holders of our class A common stock assess the performance of our business excluding such charge-offs. Distributable earnings prior to charge-offs of allowance for credit losses is used as an additional performance metric to consider when declaring our dividends. Distributable EPS prior to charge-offs of allowance for credit losses is defined as after-tax distributable earnings prior to charge-offs of allowance for credit losses divided by the weighted average diluted shares outstanding during the period.

We define distributable earnings as income before taxes adjusted for: (i) net (income) loss attributable to noncontrolling interests in consolidated ventures; (ii) our share of real estate depreciation, amortization and gain adjustments and (earnings) loss from investments in unconsolidated ventures in excess of distributions received; (iii) the impact of derivative gains and losses related to hedging fair value variability of fixed rate assets caused by interest rate fluctuations and overall portfolio market risk as of the end of the specified accounting period; (iv) economic gains or losses on loan sales, certain of which may not be recognized under GAAP accounting in consolidation for which risk has substantially transferred during the period, as well as the exclusion of the related GAAP economics in subsequent periods; (v) unrealized gains or losses related to our investments in securities recorded at fair value in current period earnings; (vi) unrealized and realized provision for loan losses and real estate impairment; (vii) non-cash stock-based compensation; and (viii) certain non-recurring transactional items.

We exclude the effects of our share of real estate depreciation and amortization. Given GAAP gains and losses on sales of real estate include the effects of previously-recognized real estate depreciation and amortization, our adjustment eliminates the portion of the GAAP gain or loss that is derived from depreciation and amortization.

Our derivative instruments do not qualify for hedge accounting under GAAP and, therefore, any net payments under, or fluctuations in the fair value of derivatives are recognized currently in our income statement. The Company utilizes derivative instruments to hedge exposure to interest rate risk associated with fixed rate mortgage loans, fixed rate securities, and/or overall portfolio market risks. Distributable earnings excludes the GAAP results from derivative activity until the associated mortgage loan or security for which the derivative position is hedging is sold or paid off, or the hedge position for overall portfolio market risk is closed, at which point any gain or loss is recognized in distributable earnings in that period. For derivative activity associated with securities or mortgage loans held for investment, any hedging gain or loss is amortized over the expected life of the underlying asset for distributable earnings. We believe that adjusting for these specifically identified gains and losses associated with hedging positions adjusts for timing differences between when we recognize the gains or losses associated with our assets and the gains and losses associated with derivatives used to hedge such assets.

We originate conduit loans, which are first mortgage loans on stabilized, income producing commercial real estate properties that we intend to sell into third-party CMBS securitizations. Mortgage loans receivable held for sale are recorded at the lower of cost or market under GAAP. For purposes of distributable earnings, we exclude the impact of unrealized lower of cost or market adjustments on conduit loans held for sale and include the realized gains or losses in distributable earnings in the period when the loan is sold. Our conduit business includes mortgage loans made to third parties and may also include mortgage loans secured by real estate owned in our real estate segment. Such mortgage loans receivable secured by real estate owned in our real estate segment are eliminated in consolidation within our GAAP financial statements until the loans are sold in a third-party securitization. Upon the sale of a loan to a third-party securitization trust (for cash), the related mortgage note payable is recognized on our GAAP financial statements. For purposes of distributable earnings, we include adjustments for economic gains and losses related to the sale of these inter-segment loans for which risk has substantially transferred during the period and exclude the resultant GAAP recognition of amortization of any related premium/discount on such mortgage loans payable recognized in interest expense during the subsequent periods. This adjustment is reflected in distributable earnings when there is a true risk transfer on the mortgage loan sale and settlement. Conversely, if the economic risk was not substantially transferred, no adjustments to net income would be made relating to those transactions for distributable earnings purposes. Management believes recognizing these amounts for distributable earnings purposes in the period of transfer of economic risk is a useful supplemental measure of our performance.

We invest in certain securities that are recorded at fair value with changes in fair value recorded in current period earnings. For purposes of distributable earnings, we exclude the impact of unrealized gains and losses associated with these securities and include realized gains or losses in connection with any disposition of securities. Distributable earnings includes declines in fair value deemed to be an impairment for GAAP purposes if the decline is determined to be non-recoverable and the loss to be nearly certain to be eventually realized. In those cases, an impairment is included in distributable earnings for the period in which such determination was made.

We include adjustments for unrealized provision for loan losses and real estate impairment. For purposes of distributable earnings, management recognizes realized losses on loans and real estate in the period in which the asset is sold or when the Company determines such amounts are no longer realizable and deemed non-recoverable.

Set forth below is an unaudited reconciliation of income (loss) before taxes to distributable earnings, and an unaudited computation of distributable EPS (in thousands, except per share data):

 

Three Months Ended

 

Year Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

 

2024

 

 

 

2024

 

 

 

2024

 

 

 

2023

 

Income (loss) before taxes

$

33,040

 

 

$

28,463

 

 

$

110,895

 

 

$

104,745

 

Net (income) loss attributable to noncontrolling interests in consolidated ventures

 

55

 

 

 

351

 

 

 

808

 

 

 

624

 

Our share of real estate depreciation, amortization and gain adjustments (1)

 

(2,225

)

 

 

7,514

 

 

 

11,558

 

 

 

18,602

 

Adjustments for derivative results and loan sale activity (2)

 

(474

)

 

 

128

 

 

 

2,005

 

 

 

112

 

Unrealized (gain) loss on fair value securities

 

903

 

 

 

(5

)

 

 

925

 

 

 

(29

)

Adjustment for impairment (3)

 

47

 

 

 

3,063

 

 

 

13,933

 

 

 

25,096

 

Non-cash stock-based compensation

 

2,237

 

 

 

3,177

 

 

 

18,829

 

 

 

18,577

 

Distributable earnings prior to charge-off of allowance for credit losses

 

33,583

 

 

 

42,691

 

 

 

158,953

 

 

 

167,727

 

Charge-off of allowance for credit losses (3)

 

—

 

 

 

(5,023

)

 

 

(5,023

)

 

 

—

 

Distributable earnings

$

33,583

 

 

$

37,668

 

 

$

153,930

 

 

$

167,727

 

Estimated corporate tax (expense) benefit (4)

 

478

 

 

 

(140

)

 

 

(2,131

)

 

 

(496

)

After-tax distributable earnings

$

34,061

 

 

$

37,528

 

 

$

151,799

 

 

$

167,231

 

Weighted average diluted shares outstanding

 

125,870

 

 

 

125,906

 

 

 

125,785

 

 

 

124,882

 

Distributable EPS

$

0.27

 

 

$

0.30

 

 

$

1.21

 

 

$

1.34

 

Per share impact of charge-off of allowance for credit losses

 

—

 

 

 

0.04

 

 

 

0.04

 

 

 

—

 

Distributable EPS prior to charge-off of allowance for credit losses

$

0.27

 

 

$

0.34

 

 

$

1.25

 

 

$

1.34

 

 

 

(1)

The following is an unaudited reconciliation of GAAP depreciation and amortization to our share of real estate depreciation, amortization and gain adjustments and (earnings) loss from investment in unconsolidated ventures in excess of distributions received ($ in thousands):

 

Three Months Ended

 

Year Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

 

2024

 

 

 

2024

 

 

 

2024

 

 

 

2023

 

Total GAAP depreciation and amortization

$

7,466

 

 

$

8,146

 

 

$

32,327

 

 

$

29,914

 

Depreciation and amortization related to non-rental property fixed assets

 

(110

)

 

 

(110

)

 

 

(440

)

 

 

(431

)

Non-controlling interests in consolidated ventures’ share of depreciation and amortization

 

(115

)

 

 

(111

)

 

 

(441

)

 

 

(410

)

Our share of operating lease income from above/below market lease intangible amortization

 

(413

)

 

 

(425

)

 

 

(1,700

)

 

 

(1,797

)

Our share of real estate depreciation and amortization

 

6,828

 

 

 

7,500

 

 

 

29,746

 

 

 

27,276

 

Accumulated depreciation and amortization on real estate sold (a)

 

(9,121

)

 

 

—

 

 

 

(18,267

)

 

 

(8,016

)

Adjustment for (earnings) loss from investments in unconsolidated ventures in excess of distributions received

 

68

 

 

 

14

 

 

 

79

 

 

 

(658

)

Our share of real estate depreciation, amortization and gain adjustments

$

(2,225

)

 

$

7,514

 

 

$

11,558

 

 

$

18,602

 

(a)

GAAP gains/losses on sales of real estate include the effects of previously-recognized real estate depreciation and amortization. For purposes of distributable earnings, our share of real estate depreciation and amortization is eliminated and, accordingly, the resultant gains/losses also must be adjusted. The following is an unaudited reconciliation of the related consolidated GAAP amounts to the amounts reflected in distributable earnings ($ in thousands):

 

Three Months Ended

 

Year Ended December 31,

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

 

2024

 

 

 

2024

 

 

 

2024

 

 

 

2023

 

GAAP realized gain/loss on sale of real estate, net

$

12,419

 

 

$

315

 

 

$

25,277

 

 

$

8,808

 

Adjusted gain/loss on sale of real estate for purposes of distributable earnings

 

(3,298

)

 

 

(315

)

 

 

(7,010

)

 

 

(792

)

Accumulated depreciation and amortization on real estate sold

$

9,121

 

 

$

—

 

 

$

18,267

 

 

$

8,016

 

(2)

The following is an unaudited reconciliation of GAAP net results from derivative transactions to our adjustments for derivative results and loan sale activity within distributable earnings ($ in thousands):

 

Three Months Ended

 

Year Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

 

2024

 

 

 

2024

 

 

 

2024

 

 

 

2023

 

GAAP net results from derivative transactions

$

(1,549

)

 

$

766

 

 

$

(5,420

)

 

$

(1,481

)

Realized results of loan sales, net (a) (b)

 

—

 

 

 

(198

)

 

 

2,856

 

 

 

—

 

Unrealized lower of cost or market adjustments related to loans held for sale

 

608

 

 

 

(1,092

)

 

 

(30

)

 

 

523

 

Amortization of (premium)/discount on mortgage loan financing included in interest expense (b)

 

(209

)

 

 

(216

)

 

 

(767

)

 

 

(604

)

Recognized derivative results

 

676

 

 

 

868

 

 

 

5,366

 

 

 

1,674

 

Adjustments for derivative results and loan sale activity

$

(474

)

 

$

128

 

 

$

2,005

 

 

$

112

 

 

 

(a)

Includes realized gains from sales of conduit mortgage loans collateralized by net lease properties in our real estate segment of $2.7 million and net hedge related gain on such mortgage loan sales of $0.2 million, for the twelve months ended December 31, 2024 and realized gains from sales of conduit mortgage loans collateralized by net lease properties in our real estate segment of $0.1 million and net hedge related (loss) on such mortgage loan sales of $(0.3) million, for the three months ended September 30, 2024.

 

(b)

Prior to the first quarter of 2024, the Company presented these adjustments within “Adjustment for economic gain on loan sales not recognized under GAAP for which risk has been substantially transferred, net of reversal/amortization.”

 

(3)

During the three months ended September 30, 2024 and twelve months ended December 31, 2024, the Company recorded a provision for loan loss of $3.1 million and $13.9 million, respectively. During the three months ended September 30, 2024 and twelve months ended December 31, 2024, the Company determined a portion of the allowance for loan loss to be non-recoverable and charged-off $5.0 million.

 

(4)

Estimated corporate tax benefit (expense) is based on an effective tax rate applied to distributable earnings generated by the activity within our taxable REIT subsidiaries.

After-tax distributable ROAE is presented on an annualized basis and is defined as after-tax distributable earnings divided by the average total shareholders’ equity during the period. Set forth below is an unaudited computation of after-tax distributable ROAE ($ in thousands):

 

Three Months Ended

 

Year Ended December 31,

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

 

2024

 

 

 

2024

 

 

 

2024

 

 

 

2023

 

After-tax distributable earnings

$

34,061

 

 

$

37,528

 

 

$

151,799

 

 

$

167,231

 

Average shareholders’ equity

 

1,533,826

 

 

 

1,531,345

 

 

 

1,530,500

 

 

 

1,533,307

 

After-tax distributable ROAE

 

8.9

%

 

 

9.8

%

 

 

9.9

%

 

 

10.9

%

Non-GAAP Measures - Limitations

Our non-GAAP financial measures have limitations as analytical tools. Some of these limitations are:

• distributable earnings, distributable EPS, after-tax distributable ROAE and distributable earnings and distributable EPS prior to charge-off of allowance for credit losses do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations and are not necessarily indicative of cash necessary to fund cash needs;
• distributable EPS, distributable EPS prior to charge-off of allowance for credit losses, and after-tax distributable ROAE are based on a non-GAAP estimate of our effective tax rate, including the impact of Unincorporated Business Tax and the impact of our election to be taxed as a REIT effective January 1, 2015. Our actual tax rate may differ materially from this estimate; and
• other companies in our industry may calculate non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.

Because of these limitations, our non-GAAP financial measures should not be considered in isolation or as a substitute for net income (loss) attributable to shareholders, earnings per share or book value per share, or any other performance measures calculated in accordance with GAAP. Our non-GAAP financial measures should not be considered an alternative to cash flows from operations as a measure of our liquidity.

In addition, distributable earnings should not be considered to be the equivalent to REIT taxable income calculated to determine the minimum amount of dividends the Company is required to distribute to shareholders to maintain REIT status. In order for the Company to maintain its qualification as a REIT under the Internal Revenue Code, we must annually distribute at least 90% of our REIT taxable income. The Company has declared, and intends to continue declaring, regular quarterly distributions to its shareholders in an amount approximating the REIT’s net taxable income.

In the future, we may incur gains and losses that are the same as or similar to some of the adjustments in this presentation. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

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Investor Contact Ladder Investor Relations (917) 369-3207 investor.relations@laddercapital.com