Hello and welcome to the Capital Trust Fourth Quarter and Year End 2008 Results Conference Call. Before we begin, please be advised that the forward-looking statements expressed in today's call are subject to certain risks and uncertainties including, but not limited to, the continued performance, new or origination volume and the rate of repayment of the company and its funds loans and investment portfolios, the continued maturity and satisfaction of the company portfolio assets as well as other risks contained in the company's latest Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. There will be a question-and-answer session following the conclusion of this presentation. At that time, I will provide instructions for submitting a question to management.

You're Okay?

I will now turn the call over to John Klopp, CEO of Capital Trust.

Okay. Thank you. Good morning, everyone. Thank you for joining us and for your continued interest in Capital Trust. And thank you for your patience, when we need to reschedule this conference call from last week to today, in order to complete some very important work. Last night we reported our results for the fourth quarter and full year of 2008 and filed our 10-K. Geoff will run you through the detailed numbers in just a moment. But first, I want to get right through it and focus on the debt restructuring that we completed over the weekend and announced last night. On our last call in October, I told you that we were in a street fight, battling against declining property values, deleveraging financial institutions and a capital market that had virtually ceased functioning. As the fourth quarter progressed the bad news just kept coming from all directions and we found ourselves in the fight of our loss (ph). In the aftermath of Lehman's failure, the entire global financial system seemed on the edge of meltdown prompting serial government bailouts of many of our largest financial institutions and desperate attempts to restart the market. Credit spreads blew out, liquidity evaporated, rating agency downgrades accelerated and margin calls from CT's secured lenders rolled in. With few exceptions, our assets continued to perform but our liquidity was rapidly being drained through debt repayments triggered by mark-to-market. In the fourth quarter alone, we paid down our secured debt facilities by over a $117 million. With our unsecured credit facility also coming due in March, we decided that we had to act and approached our lenders with a coordinated restructuring plan. The primary objective of the plan was time; gaining the time for us to do our job of managing and collecting CT's…

Thank you, John and good morning everyone. While I know that the primary order of (ph) business is a further description of debt restructuring, I'd like to briefly summarize our operating results, balance sheet activity and liquidity before we dive into the terms of our debt restructuring. For the full year ended December 31st, we reported a net loss of $57.5 million or $2.73 per share. And for the fourth quarter, our net loss was $51.2 million or $2.30 per share. The net loss for the year was primarily the result of a $26 million or 29% decrease in net interest income relative to 2007 driven by lower asset level and lower LIBOR levels. Impairments and reserves of $66.5 million as we recorded allowances on five loans and one bond at a valuation allowance of $48 million associated with the loan sales that are part of our debt restructuring. While these items were partially offset by increased fees from our investment management business, gains from the forgiveness of debt and reductions in G&A, the net impact was a significant loss for the company. From an operating standpoint we have two segments, balance sheet investment and the investment management business. CT Investment Management Co. or CTIMCO a wholly-owned subsidiary of Capital Trust is the entity through which we execute the management of six private equity funds, six CDOs and our public company parent. All of the employees of Capital Trust are employees of the CTIMCO and for the year, on a deconsolidated basis, CTIMCO had base management fee revenue of $20 million. Our investment management platform has $5 billion of asset under management and through our two active funds, CT Opportunity Partners I and CT High Grade Partners II we've $1 billion of equity capital available for investment. Over to the…

Thank you, Geoff. Hopefully we provided a lot of detail on a very complicated transaction but nevertheless we are ready to take any and all of your questions. Katie, could you open it up.

(Operator Instructions). Our first question comes from the side of David Fick of Stifel Nicolaus. Please go ahead, your line is open.

Good morning. Congratulations, I guess given the mark that you took on the Goldman and UBS facility is roughly 33%, what are the assets covered on your current secured facilities based on your asset value? You implied mark-to-market in your other facilities that your equity in those of zero.

Well the collateral pool... Is that the end of our question?

Yes.

The collateral pool that secures the three participating lenders, JP Morgan, Morgan Stanley and Citi is 100% performing. The advanced rate on that pool is roughly 50% of our face values. And we believe that there is cushion in that collateral pool as do the lenders.

Against the mark.

Yes.

Okay. Any idea, how much that cushion is?

To a certain extent it doesn't matter because what we have moved from is a liquidation value mark system to one in which the collateral value test perform going forward are based primarily on the underlying collectibility performance of our loans.

Okay.

So, that was the entire purpose really or certainly one of the primary purposes of the restructuring that we have put in place.

Alright. If I heard correctly, you no longer have access to any unfunded elements of your CDOs. Is that correct?

Correct.

Well, okay.

You know, actually it's... we soon will have no further access to the unfunded loans of our CDOs.

And we only have one CDO that that applies to which is CTCO II. CTCO I investor period ended last year in normal course.

Okay. And you don't have at this point or, let me just ask, what is the cash flow status going forward? What should we be modeling in terms of cash flow out of any CDO source, I'd presume zero?

No I think that what we said is that CDO II will have its cash flow redirected to amortize the structure. So while the cash flow is not coming to us, it is redirected to our benefit by de-leveraging the pool of assets. And then on the other three CDOs, it's varying impact across each CDO by mostly driven by rating agency activity in the last two or three weeks, particularly Moody's activity and we're working through the exact impact with the trustee now. But I would not assume it.

Okay. Can you just walk us through the funding commitments and how you expect... you've got roughly $76 million forward funding with $45 million of cash and your cash flow is now essentially being locked if I understand that correctly. How you are you funding that, what are the banks to assist you there?

David as I said in my script, while we did eliminate the lenders obligation to fund any post of our unfunded commitments, that after the loan sales in particular the sales to Goldman, our unfunded commitments dropped down to $23.6 million. That $23.6 million we expect to fund out over the next three plus years, so it's all in '09 or even in the two years, and we do have control over some elements of those funding. And in addition we have $19 million funding commitment to our private equity fund. We expect to fund this through our $20 million current cash balance, the sale of $21 million on a carrying value basis of unencumbered assets and net operating income going forward which we believe to be a significant amount of cash going forward.

Okay. Can you -- I guess this is for John -- just briefly address the business plan given that you've essentially put the company in the hands of the lenders in terms of any significant decisions? I don't know if you want to characterize it this way but I'll characterize it as a conservatorship situation where you're working on behalf of the banks going forward. What is the case for shareholders here or is there a case for shareholders here in your stock? And what is -- or how do you run this company or how do you staff, how do you motivate people given that your hands are so tied?

That's your characterization and certainly not mine. We don't believe that we are in conservative shift but instead believe that we have made a necessary transaction with our lenders that should, and we expect will, allow us to collect our assets in an orderly fashion in the normal course with the ultimate endpoint being we want to, retain as much of the book value of the company which is $400 million, $18 a share as we possibly can. We believe that we have the operational flexibility and the capacity to do so, subject obviously to the market. Our assets, just like everybody else's, anybody else's, are subject to what's going on in the world right now which is a tough place to be exposed to commercial real estate as we are. But with that caveat, we believe that we have a business plan. That business plan is to continue to move forward and collect our assets and repay our debt and realize as much of our book value as we possibly can. At the same time we have very vibrant investment management business that has over $1 billion of capital included in existing funds. And we intend to be an active participant in the markets taking advantage of some of the opportunities that are created by the pain that we're otherwise suffering on our legacy portfolio.

John, it would appear if there is a lot of that opportunities out there but given co-investment requirement in those funds and restrictions on your ability to access that, can you describe what conditions would be -- for you to be able to make net investments in advance?

Yes. But there are 60 some people on this call and this is the last conversation -- we -- that you can call me separately and ask any number of questions.

Okay, thank you

We are unconstrained as to our ability to deploy equity capital that is committed into these two funds that have the billion dollars of capital, it's a 100% available to us and 100% in our discretion to make investments on behalf of our partners in those funds and take advantage of those opportunities. We're constrained that I think you may be referring to as part of the restructure debt deal is a constraint on our ability to make co-investments in new yet to be created funds going forward, which certainly will to some extent, impact our ability to continue to grow our investment management business. We have no impact on our ability to deploy that equity capital. But thank you for your many questions, Mr. Fick.

Thank you.

We'll take our next question from the site of Tayo Okusanya from UBS. Please go ahead, your line is open.

Hi yes. Good morning and my congratulations and that's creating some sense of (ph) kind of work through what you are trying to do. A quick question, have you guys come up yet with an estimate of given all the pay-down kind of tied towards the new debt restructuring, just how much cash flow that's going to require of you over the next one year? And if you could give us a sense of potential sources of cash that you are looking in order to be able to cover that so that at least you get the next year extension.

I think that sort of quantifying piece by piece our uses of cash flow on this call s probably not the thing to do but I would say there are sources of cash flow as I mentioned in my script, cash, the sales which we have some are pending now of our unencumbered assets and operating income. And operating income is as I mentioned earlier a significant number and those three sources we actually expect to build or maintain our cash balances over the term of this plan.

Yeah, we've got -- look, we have got a tough road to halt. There is no question about it. We've got amortization requirements on the restructured secured debt and an amortization requirement on the restructured unsecured debt but we were able to essentially trust our cash interest to carry as part of this overall transaction. And we believe that with some aggressive action on our part post repayments to sell some loans if we need to and we're relying on our existing resources if we make it.

Okay, it's fair but I guess the math I was trying to do in my head and kind of walk me -- kind of just tell me where I am wrong is planning you're kind of at the cash on hand and about $15 million, of about $45 million. And then I looked at your cash from operations last year, $54 million which kind comes up close to $100 million or so. But to get the extension on the debt you have to pay it down by at least 20%, it's going to cost about $120 million of cash you need to come with, I guess I'm just coming with that debt that are (ph) where the plug comes from.

I think with respect to the secured facilities we expect the lion share of it to come from repayments and/or sales to the extent necessary of collateral. And we believe that as I mentioned in the script other than the upfront payment we made yesterday, we should have no obligation, out of our cash balances with respect to secured lenders. But that our amortization requirement should be met through portfolio cash flow and portfolio capital events. With some factor to our amortization obligations on the unsecured, those are covered by at least the margin today at four times with respect to cash flow. So it is net that actually flows -- if you want to think about cash balances, operating income, it does flow to us off the secured loans and the net of the CDO cash flow, including our management fee revenues from other sources of cash into the corporate account.

Okay. One more question, how much of unencumbered assets you guys have at this point?

$21 million at carrying value.

Great. Okay. Thanks very much. Thanks a lot.

Thank you.

(Operator Instructions) Our next question comes from the site of Fred Stein from Monness Crespi Hardt. Please go ahead, your line is open.

Hi. I know you guys have very tough job and you did a great job restructuring, I think. Do you have an opinion on what you see in the marketplace? Do you see any sign of stability or any sign of stability in price or a modification of the decline in commercial pricing?

Honestly not yet. I think that the fundamental I think during the course of last year what we had basically obviously was a credit crisis and a liquidity crisis. While we have rolling through commercial real estate right now is a fundamental issue again. As the economy continues to link or deteriorate along, the impact is on the fundamentals of real estate right now, occupancy, cash flow. And I don't think we're done with that yet. We've obviously seen kind of first hotel can hit in the budget, and expectation for 2009 across pretty much the entire lodging sector is grim. It hits hotels relatively quickly because of the duration of the leases, if you will, overnight. But it's rolling through the other property categories and the truth is that unfortunately winning is going to get worse before it gets better and haven't seen a really the impact of stimulus and all the other programs yet that are coming out of Washington, really impact the liquidity of commercial real estate yet. Transaction volume is way down. Lending volume virtually nil and liquidity in the market is very tough right now. I can't give you a more positive answer but the truth is we think it's going to get worse before it gets better.

On that front, let me just follow up with this question. You probably, I am sure, in your modeling did a best probable and worst case. In your worst case, are you still equipped to handle this over the next 12 to 18 months without a really major impairment to your book value and your operating capabilities?

Well I guess that depends on what your worst case is. I am not sure what the worst case is in this environment. We've certainly done a lot of modeling, a lot of expectations. We believe that in the band where we expect the world to end up that we will be able to work our way through this but it is very tough, there is no question about it and it's very tight. I mean, I don't know what exactly how to model a so called worst case, but in the worst case scenario, we would have, we would expect fairly significant write-downs and losses on some of our loans, that could and would impact book value, you don't think that's likely but it's possible.

Thank you very much.

Thank you.

Thank you. Our next question comes from the site of John Spread, a Private Investor. Please go ahead John, your line is open.

Congratulations in terms of your restructuring, given the circumstances, would you consider a report out to investors on a monthly basis versus the quarterly basis?

I guess the one word answer is no. I think we're going to stick to our reporting. We've tired over time to be prepare (ph) our reporting and put as minor detail in it as we think is commercially reasonable. But I think that the answer is, we're going to stick to our quarterly reporting cycle.

(Operator Instructions). And it appears that now we have no further questions at this time.

Well, then thank you all. We'll talk to you again soon. Have a good day.

This concludes today's program. You may disconnect at anytime. Thank you and have a great day.