Variable Interest Entities

6 Months Ended

Jun. 30, 2014

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, 2014 and December 31, 2013, our consolidated VIEs were: Taberna VIII, Taberna IX, RAIT I, RAIT II, Independence Realty Trust, Inc., Willow Grove and Cherry Hill.

	As of June 30, 2014			As of December 31, 2013
Assets
Investments in mortgages and loans, at amortized cost:
Commercial mortgages, mezzanine loans, other loans and preferred equity interests	$	1,745,612		$	1,816,507
Allowance for losses		(13,768	)		(17,250	)
Total investments in mortgages and loans		1,731,844			1,799,257
Investments in real estate, net of accumulated depreciation of $22,013 and 18,538, respectively		363,697			194,648
Investments in securities and security-related receivables, at fair value		572,634			566,577
Cash and cash equivalents		8,333			3,599
Restricted cash		26,037			40,793
Accrued interest receivable		79,716			68,456
Deferred financing costs, net of accumulated amortization of $19,150 and $17,107, respectively		9,085			10,263
Intangible assets, net of accumulated amortization of $2,513 and $568, respectively		1,126			517
Total assets	$	2,792,472		$	2,684,110
Liabilities and Equity
Indebtedness (including $413,187 and $377,235 at fair value, respectively)	$	2,002,210		$	1,946,536
Accrued interest payable		79,669			73,122
Accounts payable and accrued expenses		9,065			5,771
Derivative liabilities		95,319			113,323
Deferred taxes, borrowers’ escrows and other liabilities		7,292			5,805
Total liabilities		2,193,555			2,144,557
Equity:
Shareholders’ equity:
Accumulated other comprehensive income (loss)		(46,100	)		(59,684	)
RAIT investment		345,441			311,635
Retained earnings (deficit)		216,988			258,270
Total shareholders’ equity		516,329			510,221
Noncontrolling interests		82,588			29,332
Total liabilities and equity	$	2,792,472		$	2,684,110

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 our other 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.