Variable Interest Entities

6 Months Ended

Jun. 30, 2013

Variable Interest Entities

NOTE 9: VARIABLE INTEREST ENTITIES

The following table presents the assets and liabilities of our consolidated VIEs as of each respective date. As of June 30, 2013 and December 31, 2012, our consolidated VIEs were: Taberna Preferred Funding VIII, Ltd., or Taberna VIII, Taberna Preferred Funding IX, Ltd, or Taberna IX, RAIT I, RAIT II, Willow Grove and Cherry Hill.

	As of June 30, 2013			As of December 31, 2012
Assets
Investments in mortgages and loans, at amortized cost:
Commercial mortgages, mezzanine loans, other loans and preferred equity interests	$	1,918,215		$	1,917,925
Allowance for losses		(17,125	)		(17,125	)
Total investments in mortgages and loans		1,901,090			1,900,800
Investments in real estate, net of accumulated depreciation of $2,341 and $1,941, respectively		20,317			20,609
Investments in securities and security-related receivables, at fair value		602,555			654,795
Cash and cash equivalents		273			276
Restricted cash		57,270			50,203
Accrued interest receivable		71,082			67,271
Deferred financing costs, net of accumulated amortization of $15,010 and $13,633, respectively		11,364			12,741
Total assets	$	2,663,951		$	2,706,695
Liabilities and Equity
Indebtedness (including $304,687 and $187,048 at fair value, respectively)	$	1,837,445		$	1,724,356
Accrued interest payable		66,500			59,914
Accounts payable and accrued expenses		3,254			3,335
Derivative liabilities		123,458			151,438
Deferred taxes, borrowers’ escrows and other liabilities		5,702			4,877
Total liabilities		2,036,359			1,943,920
Equity:
Shareholders’ equity:
Accumulated other comprehensive income (loss)		(73,309	)		(90,954	)
RAIT Investment		292,237			295,641
Retained earnings		408,664			558,088
Total shareholders’ equity		627,592			762,775
Total liabilities and equity	$	2,663,951		$	2,706,695

The assets of the VIEs can only be used to settle obligations of the VIEs and are not available to our creditors. Certain amounts included in the table above are eliminated upon consolidation with other our subsidiaries that maintain investments in the debt or equity securities issued by these entities. We do not have any contractual obligation to provide the VIEs listed above with any financial support. We have not and do not intend to provide financial support to these VIEs that we were not previously contractually required to provide.