-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I6OhnBBHwpFuzqx+a9f56JKzO7V7i7x58KnayfUPUpSqwulIj8gqjyFHXfwR+xjF FCEnsgtiU9EhFc6QwOWWPg== /in/edgar/work/0000950116-00-002751/0000950116-00-002751.txt : 20001115 0000950116-00-002751.hdr.sgml : 20001115 ACCESSION NUMBER: 0000950116-00-002751 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RESOURCE ASSET INVESTMENT TRUST CENTRAL INDEX KEY: 0001045425 STANDARD INDUSTRIAL CLASSIFICATION: [6189 ] IRS NUMBER: 232919819 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14760 FILM NUMBER: 767920 BUSINESS ADDRESS: STREET 1: 1521 LOCUST ST STREET 2: 6TH FL CITY: PHILADELPHIA STATE: PA ZIP: 19102 BUSINESS PHONE: 2155465119 MAIL ADDRESS: STREET 1: 1521 LOCUST ST STREET 2: 6TH FL CITY: PHILADELPHIA STATE: PA ZIP: 19102 10-Q 1 0001.txt 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 2000 ------------------ OR [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from TO ------ Commission file number 1-14760 ----------------------- RAIT INVESTMENT TRUST ----------------------------------------------------- (Exact name of registrant as specified in its charter) MARYLAND 23-2919819 ------------------------------- ------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1818 MARKET STREET, 28TH FLOOR, PHILADELPHIA, PA 19103 ------------------------------------------------ ----- (Address of principal executive offices) (Zip Code) (215) 861-7900 ---------------------------------------------------- (Registrant's telephone number, including area code) RESOURCE ASSET INVESTMENT TRUST ----------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- As of October 31, 2000, 6,309,651 common shares of beneficial interest, par value $0.01 per share, were outstanding. RAIT INVESTMENT TRUST and Subsidiaries Index to Quarterly Report on Form 10-Q PART I - FINANCIAL INFORMATION PAGE ---- Item 1. Financial Statements Consolidated Balance Sheets at September 30, 2000 (unaudited) and December 31, 1999 3 Consolidated Statements of Income (unaudited) for the three and nine months ended September 30, 2000 and 1999 4 Consolidated Statements of Cash Flows (unaudited) for the three and six months ended September 30, 2000 and 1999 5 Notes to Consolidated Financial Statements- September 30, 2000 (unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk 12 PART II - OTHER INFORMATION Item 6. Exhibits 15 The accompanying notes are an integral part of these consolidated financial statements -2- PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ---------------------------- RAIT INVESTMENT TRUST and Subsidiaries Consolidated Balance Sheets
September 30, 2000 (unaudited) December 31, 1999 --------- ----------------- ASSETS Cash and cash equivalents $ 14,439,958 $ 11,323,301 Restricted cash 10,016,025 5,283,886 Tenant escrows 230,526 164,378 Accrued interest receivable 2,013,120 1,544,984 Investments in real estate loans, net 143,540,269 160,485,767 Investments in real estate, net 107,919,340 89,936,339 Furniture, fixtures and equipment, net 96,910 88,243 Prepaid expenses and other assets 2,895,682 1,001,775 ------------ ------------ Total Assets $281,151,830 $269,828,673 ============ =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Accounts payable and accrued liabilities $ 123,639 $ 332,040 Accrued interest payable 1,611,871 1,033,484 Deferred interest payable 1,085,172 788,841 Tenant security deposits 489,430 270,908 Borrowers' escrows 10,215,970 5,308,136 Dividends payable 3,217,769 - Deferred income 766,658 693,162 Senior indebtedness secured by real estate underlying the Company's wraparound loans 59,856,138 78,478,730 Long term debt secured by real estate owned 94,290,370 82,685,074 Secured line of credit 20,000,000 14,000,000 ------------ ------------ Total Liabilities 191,657,017 183,590,375 Minority interest 2,656,679 - Shareholders' Equity Preferred Shares, $.01 par value; 25,000,000 authorized shares - - Common Shares, $.01 par value; 200,000,000 authorized shares; 6,309,251 at September 30, 2000 and 6,199,127 at December 31, 1999; issued and outstanding 63,097 61,991 Additional paid-in-capital 87,306,383 86,159,238 (Accumulated deficit)/retained earnings (531,346) 17,069 ------------ ------------ Total Shareholders' Equity 86,838,134 86,238,298 ------------ ------------ Total Liabilities and Shareholders' Equity $281,151,830 $269,828,673 ============ ============
The accompanying notes are an integral part of these consolidated financial statements -3- RAIT INVESTMENT TRUST and Subsidiaries Consolidated Statements of Income (Unaudited)
For the three months For the nine months ended September 30, ended September 30, 2000 1999 2000 1999 ---- ---- ---- ---- REVENUES Mortgage interest income $ 4,868,917 $ 5,328,172 $ 13,575,950 $ 15,056,232 Rental income 4,725,219 3,174,264 13,512,150 8,811,984 Fee income and other 221,951 22,500 921,251 317,500 Investment income 74,539 78,115 418,347 182,933 Gain on sale of loan - - - 131,125 ----------- ----------- ------------ ------------ Total Revenues 9,890,626 8,603,051 28,427,698 24,499,774 COSTS AND EXPENSES Interest 3,488,359 2,791,536 9,502,768 8,311,380 Property operating expenses 2,229,926 1,741,340 6,473,896 4,469,736 General and administrative 437,153 387,172 1,237,671 1,176,034 Depreciation and amortization 754,374 338,848 2,104,183 1,391,763 ----------- ----------- ------------ ------------ Total Costs and Expenses 6,909,812 5,258,896 19,318,518 15,348,913 ----------- ----------- ------------ ------------ Net Income before minority interest 2,980,814 3,344,155 9,109,180 9,150,861 ----------- ----------- ------------ ------------ Minority interest 14,106 - (38,598) 17,761 ----------- ----------- ------------ ------------ Net Income $ 2,994,920 $ 3,344,155 $ 9,070,582 $ 9,168,622 ----------- ----------- ------------ ------------ Net Income per common share-basic $ .48 $ .54 $ 1.46 $ 1.49 =========== =========== ============ ============ Weighted average common shares outstanding-basic 6,279,391 6,165,614 6,232,675 6,165,428 =========== =========== ============ ============ Net income per common share-diluted $ .48 $ .54 $ 1.45 $ 1.48 =========== =========== ============ ============ Weighted average common shares outstanding-diluted 6,298,478 6,181,496 6,241,294 6,179,704 =========== =========== ============ ============
The accompanying notes are an integral part of these consolidated financial statements -4- RAIT INVESTMENT TRUST and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
For the nine months ended September 30, 2000 1999 ---- ---- Cash flows from operating activities Net Income $9,070,582 $9,168,622 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sale of loan - (131,125) Minority interest 38,598 (17,761) Depreciation and amortization 2,104,183 1,391,763 Accretion of loan discount (213,474) (566,307) Increase in security deposit escrows (66,148) - Decrease (increase) in accrued interest receivable 60,197 (1,564,052) Increase in prepaid expenses and other assets (1,397,812) (407,192) (Decrease) increase in accounts payable and accrued liabilities (208,400) 86,786 Increase in accrued interest payable 578,387 280,613 Increase in deferred interest payable 296,331 551,601 Increase in tenant security deposits 218,522 39,123 Increase in deferred income 73,496 507,163 Increase (decrease) in borrowers' escrows 175,695 (402,322) ------------ ----------- Net cash provided by operating activities 10,730,157 8,936,912 ------------ ----------- Cash flows from investing activities Purchase of furniture, fixtures and equipment (2,081) (5,460) Real estate loans purchased (1,828,333) (14,835,230) Real estate loans originated (25,940,782) (23,659,877) Proceeds from sale of loan - 2,481,782 Principal repayments of loans 12,260,006 24,844,266 Real estate purchases and improvements (6,269,440) (2,387,001) Utilization of reserves held by mortgagee to pay taxes 643,889 77,541 Cash paid for RAIT Capital Corp. (712,148) - ------------ ----------- Net cash used in investing activities (21,848,889) (13,483,979) ------------ ----------- Cash flows from financing activities Advances on secured line of credit 6,000,000 14,000,000 Issuance of common stock, net 539,575 - Payment of dividends (5,878,875) (6,288,640) Principal repayments on senior indebtedness (291,394) (284,842) Principal repayments on long-term debt (506,411) (327,397) Proceeds of senior indebtedness underlying Company's loans 14,000,000 - Proceeds of long-term debt secured by real estate owned 330,805 - Other 41,689 (4,079) ------------ ----------- Net cash provided by financing activities 14,235,389 7,095,042 ------------ ----------- Net change in cash and cash equivalents 3,116,657 2,547,975 ------------ ----------- Cash and cash equivalents, beginning of period 11,323,301 5,011,666 ------------ ----------- Cash and cash equivalents, end of period $ 14,439,958 $ 7,559,641 ============ =========== Noncash items: Stock issued for purchase of RAIT Capital Corp. $ 146,875 $ - ============ ===========
The accompanying notes are an integral part of these consolidated financial statements -5- RAIT INVESTMENT TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2000 (Unaudited) NOTE 1 - BASIS OF PRESENTATION In the opinion of management, these unaudited financial statements contain all disclosures, which are necessary to present fairly the Company's consolidated financial position at September 30, 2000, and the results of operations and the cash flows for the three and nine months ended September 30, 2000 and 1999. The financial statements include all adjustments (consisting only of normal recurring adjustments) which in the opinion of management are necessary in order to present fairly the financial position and results of operation for the interim periods. Certain information and footnote disclosures normally included in financial statements under generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. NOTE 2 - RESTRICTED CASH AND BORROWERS' ESCROWS Restricted cash and borrowers' escrows represent borrowers' funds held by the Company to fund certain expenditures or to be released at the Company's discretion upon the occurrence of certain pre-specified events, and to serve as additional collateral for the loans. NOTE 3-INVESTMENTS IN REAL ESTATE LOANS The Company's portfolio of investments in real estate loans consisted of the following at September 30, 2000:
Long-term first mortgages and senior loan participations $ 10,850,130 Mezzanine (including wraparound) loans 93,152,871 Short-term bridge loans 39,513,449 Loan costs 249,976 Less: Provision for loan losses (226,157) ------------ Investments in real estate loans 143,540,269 Less: Senior indebtedness secured by real estate underlying the Company's wraparound loans (59,856,138) ------------ Net Investments in real estate loans $ 83,684,131 ============
The following is a summary description of the Company's real estate loan portfolio:
Number of Average Loan-to- Yield Range of Type of Loan Loans Value Range Maturities ------------ --------- ----------------- ----- ---------- Long-term first mortgages and senior loan participations 6 44% 10-15% 3/28/01-7/14/09 Mezzanine (including wraparound) loans 13 86% 11-18% 2/1/02-1/31/09 Short term bridge loans 6 78% 13-44%(1) 8/31/00-1/28/02 (1) Includes loan fees charged.
-6- Approximately $74.0 million of the loans are secured by multi-family residential properties and $69.5 million of the loans are secured by commercial properties. As of September 30, 2000, twelve of the Company's purchased loans were still subject to forbearance agreements or other contractual restructurings that existed at the time the Company acquired the loans. During the quarter ended September 30, 2000, all payments under the agreements were timely and all borrowers were otherwise in full compliance with the terms of the agreements. The remaining thirteen loans in the Company's portfolio were performing in accordance with their terms as originally underwritten by the Company and were current as to payments as of September 30, 2000. As of September 30, 2000, senior indebtedness secured by real estate underlying the Company's wraparound loans consists of the following: Loan payable, secured by real estate, monthly installments of $13,789, including interest at 7.08%, remaining principal due December 1, 2008 $ 1,887,997 Loan payable, secured by real estate, monthly installments of $17,051, including interest at 6.83%, remaining principal due December 1, 2008 2,385,312 Loan payable, secured by real estate, monthly installments of $10,070, including interest at 6.83%, remaining principal due December 1, 2008 1,513,741 Loan payable, secured by real estate, monthly installments of $80,427, including interest at 6.95%, remaining principal due July 1, 2008 11,868,655 Loan payable, secured by real estate, monthly installments of $28,090, including interest at 6.82%, remaining principal due November 1, 2008 4,214,157 Loan payable, secured by real estate, monthly installments of $72,005, including interest at 7.55%, remaining principal due December 1, 2008 9,786,276 Loan payable, secured by real estate, monthly installments of $88,575, including interest at 8.68%, remaining principal due November 1, 2008 11,000,000 -7- Loan payable, secured by real estate, interest only at LIBOR + 200 basis points, with a ceiling of 10.00% and a floor of 8.60% (8.62% at September 30, 2000) due monthly, principal balance due September 30, 2002 3,200,000 Loan payable, secured by Company's interest in short-term bridge loan of $4,495,000, interest only at 11.00% due monthly, principal balance due December 14, 2000 2,000,000 Loan payable, secured by Company's interest in short-term bridge loan of $14,000,000, interest only at 9.50% due monthly, principal balance due July 11, 2001 9,000,000 Loan payable, secured by Company's interest in short-term bridge loan of $5,300,000, interest only at 9.00% due monthly, principal balance due February 1, 2002 3,000,000 ----------- $59,856,138 =========== As of September 30, 2000 the senior indebtedness secured by real estate underlying the Company's wraparound loans maturing in the remainder of 2000, over the next four years, and the aggregate indebtedness maturing thereafter is as follows: 2000 $ 2,118,884 2001 9,534,637 2002 6,775,952 2003 620,489 2004 668,501 Thereafter 40,137,675 ------------ $ 59,856,138 ============ NOTE 4-INVESTMENTS IN REAL ESTATE Investments in real estate are comprised of the following at September 30, 2000: Land $ 12,262,186 Office buildings and improvements 65,095,624 Apartment buildings 35,109,676 ------------- Subtotal 112,467,486 Less: Accumulated depreciation (4,548,146) ------------- Investments in real estate, net $ 107,919,340 ============= -8- As of September 30, 2000, long-term debt secured by the Company's investments in real estate consists of the following: Loan payable, secured by real estate, monthly installments of $8,008, including interest at 7.33%, remaining principal due August 1, 2008 $ 1,065,422 Loan payable, secured by real estate, monthly installments of $288,314, including interest at 6.85%, remaining principal due August 1, 2008 43,102,366(1) Loan payable, secured by real estate, monthly payments of interest only at 10%, principal due August 1, 2008 5,024,563(1) Loan payable, secured by partnership interests in a real estate partnership, monthly payments of interest only at 8.19%, additional interest of 3.81% is deferred and payable from net cash flow, principal and deferred interest due September 1, 2008 18,472,538(1) Loan payable, secured by real estate, monthly installments of $107,255, including interest at 7.73%, remaining principal due December 1, 2009 14,901,831 Loan payable, secured by real estate, monthly installments of $87,960, including interest at 8.37%, remaining principal due March 1, 2008 11,723,650 ----------- $94,290,370 =========== (1) These loans all relate to a single investment in real estate. As of September 30, 2000 the amount of long-term debt secured by the Company's investments in real estate maturing in the remainder of 2000, over the next four years, and the aggregate indebtedness maturing thereafter, is as follows: 2000 $ 184,522 2001 749,574 2002 806,222 2003 867,177 2004 932,770 Thereafter 90,750,105 ------------ $ 94,290,370 ============ -9- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In addition to historical information, this discussion and analysis contains forward-looking statements. These statements can be identified by the use of forward-looking terminology including "may", "believe", "will", "expect", "anticipate", "estimate", "continue" or similar words. These forward-looking statements are subject to risks and uncertainties as more particularly set forth in the Company's Annual Report on Form 10-K for 1999, that could cause actual results to differ materially from those projected in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this report. Overview The Company commenced investment operations in January 1998. Its principal business objective is to generate income for distribution to its shareholders from a combination of interest, rents and distributions from loans that the Company originates and funds, loans or property interests acquired and other investments. The Company completed two public offerings of its common shares during 1998 and utilized these proceeds, combined with repayment and refinancing of its loans and property interests and its line of credit, to build its investment portfolio. Liquidity and Capital Resources Since commencement of investment operations in January 1998, the principal source of the Company's capital resources has been the two offerings of its common shares, which, after offering costs and underwriting discounts and commissions, resulted in net proceeds to the Company of $86.0 million. Secondarily, the Company has obtained capital resources from the repayment, refinancing, and sale of loans in its portfolio (or principal payments on those loans), aggregating $13.8 million for the quarter ended September 30, 2000 ($26.6 million for the nine months ended September 30, 2000). The principal use of these funds has been the origination, acquisition and purchase of loans in the amount of $20.6 million for the quarter ended September 30, 2000 ($27.8 million for the nine months ended September 30, 2000), the purchase of real estate and improvements in the amount of $0 for the quarter ended September 30, 2000 ($6.3 million for the nine months ended September 30, 2000), and the acquisition, in August 2000, of RAIT Capital Corp., a real estate financing company that specializes in first mortgages, in the amount of $859,000. The Company also receives funds from interest payments on its loans and operating income from its property interests. As required by the Internal Revenue Code of 1986, the Company utilizes these funds (to the extent of not less than 95% of its taxable income) to pay dividends to its shareholders. For the quarter ended September 30, 2000, the Company declared dividends of $3.2 million, which were paid on October 12, 2000. In order to maintain liquidity, the Company continues to pursue a strategy of providing shorter-term financing to its borrowers (generally in the form of bridge financing) to increase the turnover of its investments, and pursuing borrower refinancing of the Company's loans through senior lenders, with the Company retaining junior interests. The Company is not currently experiencing material difficulties in originating shorter-term financings or obtaining senior lien refinancings on acceptable terms. However, there can be no assurance that difficulties will not be encountered in the future, depending upon the development of conditions in the credit markets. -10- At September 30, 2000, the Company had approximately $11.2 million in funds available for investment ($3.2 million of cash held at September 30, 2000 was reserved to pay a cash dividend on October 12, 2000). All cash was temporarily invested in a money-market account that the Company believes has a high degree of liquidity and safety. Results of Operations The Company had average earning assets for the three and nine months ended September 30, 2000 of $106.7 million and $105.0 million, respectively ($98.6 million and $93.3 million for the three and nine months ended September 30, 1999), including $8.6 million and $12.9 million of average earning assets invested in a money-market account for the three and nine months ended September 30, 2000, respectively ($7.4 million and $6.3 million for the three and nine months ended September 30, 1999.) The increases in total average earning assets and average earning assets invested in a money-market account from the three and nine months ended September 30, 1999 to the corresponding periods in 2000 were due the utilization of the Company's credit line ($20.0 million and $14.0 million outstanding at September 30, 2000 and 1999, respectively) in anticipation of approximately $12.0 million of loans to be originated in the fourth quarter 2000. Interest income derived from financings was $4.9 million and $13.6 million for the three and nine months ended September 30, 2000 as compared to $5.3 million and $15.1 million for the corresponding periods in 1999. Interest income from the money market account was $75,000 and $418,000 for the three and nine months ended September 30, 2000 compared to $78,000 and $183,000 for the corresponding periods in 1999. The decrease in interest income from both the three and nine months ended September 30, 1999 to the corresponding periods in 2000 was due to a decrease in the Company's net investments in real estate loans ($83.7 million at September 30, 2000 versus $91.5 million at September 30, 1999) and an increase in the Company's net investment in real estate ($107.9 million at September 30, 2000 versus $72.4 million at September 30, 1999). The increase in interest income from the money market account from the nine months ended September 30, 1999 to the corresponding period in 2000 was due to a higher balance of assets invested in the money-market account due to a loan repayment in the first quarter of 2000, and a draw on the secured line of credit in the amount of $6.0 million in anticipation of several loan closings. The yield on average earning non-money market assets was 17.7% and 17.2% for the three and nine months ended September 30, 2000 and was 18.6% and 18.4% for the corresponding periods in 1999. The decreases in yield are due to an increase in the Company's cost of funds due to an increase in interest charged on the secured line of credit (based on the Prime rate of interest), partially offset by the Company's ability to increase the pricing of its loans in response to market conditions. The yield on average earning money market account assets was 4.8% and 4.3% for the three and nine months ended September 30, 2000 as compared to 4.8% and 4.4% for the three and nine months ended September 30, 1999. The Company derived $4.7 million from rents from its property interests for the quarter ended September 30, 2000 ($13.5 million for the nine months ended September 30, 2000) compared to $3.2 million for the quarter ended September 30, 1999 ($8.8 million for the nine months ended September 30, 1999). The increase in rents from the Company's property interests from the three and nine months ended September 30, 1999 to the same periods in 2000 was due to an increase in the Company's investment in real estate and a decrease in the Company's investment in real estate loans as discussed above. The Company recognized fee and other income in the amount of $222,000 for the three months ended September 30, 2000 ($921,000 for the nine months ended September 30, 2000) as compared to $23,000 for the three months ended September 30, 1999 ($318,000 for the nine months ended September 30, 1999). The increases in fee and other income from the three and nine months ended September 30, 1999 to the same periods in 2000 are due to income from the Company's new real estate finance subsidiary, RAIT Capital Corp., which was acquired in August 2000 ($163,000 for the three and nine months ended September 30, 2000), and a $500,000 subordination fee earned in the second quarter of 2000. -11- Twelve of the Company's purchased loans remained subject to forbearance agreements or other contractual restructurings that existed at the time the Company acquired the loans. During the quarter ended September 30, 2000, all payments under the agreements were timely made and all borrowers were otherwise in full compliance with the terms of the agreements. The remaining thirteen loans in the Company's portfolio are performing in accordance with their terms as originally underwritten by the Company and were current as to payments as of September 30, 2000. During the quarter ended September 30, 2000, the Company incurred expenses of $6.9 million ($19.3 million for the nine months ended September 30, 2000) compared to $5.3 million for the three months ended September 30, 1999 ($15.3 million for the nine months ended September 30, 1999). The expenses consist of interest expense, operating expenses relating to the Company's property interests, general and administrative expenses and depreciation and amortization. Interest expense was $3.5 million and $9.5 million for the three and nine months ended September 30, 2000 as compared to $2.8 million and $8.3 million for the corresponding periods in 1999. Interest expense relates to interest payments made on senior indebtedness encumbering properties underlying the Company's investments in wraparound loans and properties owned by the Company and interest payments made on the Company's secured line of credit, all of which increased as a result of the increase in the Company's loan portfolio. Property operating expenses were $2.2 million and $6.5 million for the three and nine months ended September 30, 2000 compared to $1.7 million and $4.5 million for the corresponding periods in 1999. Depreciation and amortization was $754,000 and $2.1 million for the three and nine months ended September 30, 2000 as compared to $387,000 and $1.4 million for the corresponding periods in 1999. The increases in property operating expenses, depreciation and amortization from the three and nine months ended September 30, 1999 to the corresponding periods in 2000, were due to an increase in the Company's investment in real estate and a decrease in the Company's investment in real estate loans as discussed above. General and administrative expenses were $437,000 and $1.2 million for the three and nine months ended September 30, 2000 as compared to $387,000 and $1.2 million for the corresponding periods in 1999. The increase in general and administrative expenses from the three and nine months ended September 30, 1999 to the same period in 2000 was due to the acquisition of the Company's real estate finance subsidiary, RAIT Capital Corp., in August, 2000 and the general and administrative expense incurred by that subsidiary which approximated $158,000 for both the three and nine months ended September 30, 2000. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There has been no material change in the Company's assessment of its sensitivity to market risk since its presentation in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. -12- PART II - OTHER INFORMATION - --------------------------- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27. Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ending September 30, 2000. -13- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. November 14, 2000 /S/ Ellen J. DiStefano - ----------------- ---------------------- DATE Ellen J. DiStefano Chief Financial Officer (On behalf of the registrant and as its principal financial officer) -14- EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-2000 JUL-1-2000 SEP-30-2000 14,439,958 0 2,013,120 226,157 0 0 134,019 37,109 281,151,830 0 0 0 0 63,097 86,775,037 281,151,830 0 28,427,698 0 0 9,815,750 0 9,502,768 9,070,582 0 9,070,582 0 0 0 9,070,582 1.46 1.45
-----END PRIVACY-ENHANCED MESSAGE-----