NOTE 9: VARIABLE INTEREST ENTITIES

The determination of when to consolidate a VIE is based on the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance together with either the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. We evaluated our investments and determined that, as of June 30, 2015 and December 31, 2014, our consolidated VIEs were: RAIT I, RAIT II, IRT, Willow Grove and Cherry Hill (RAIT VIE Properties). The following table presents the assets and liabilities of our consolidated VIEs as of each respective date.


	As of June 30, 2015
	RAIT Securitizations			IRT			RAIT VIE Properties			Total
Assets
Investments in mortgages and loans, at amortized cost:
Commercial mortgages, mezzanine loans, other loans and preferred equity interests	$	1,446,541		$	—		$	—		$	1,446,541
Allowance for losses		421			—			—			421

Total investments in mortgages and loans		1,446,962			—			—			1,446,962
Investments in real estate
Investments in real estate		—			716,582			24,116			740,698
Accumulated depreciation		—			(31,189	)		(4,211	)		(35,400	)

Total investments in real estate		—			685,393			19,905			705,298
Investments in securities and security-related receivables, at fair value		—			—			—			—
Cash and cash equivalents		—			21,568			247			21,815
Restricted cash		13,540			6,335			357			20,232
Accrued interest receivable		74,942			—			—			74,942
Other assets		11,140			6,689			7,197			25,026
Deferred financing costs
Deferred financing costs		26,028			3,807			345			30,180
Accumulated amortization		(21,752	)		(815	)		(272	)		(22,839	)

Total deferred financing costs		4,276			2,992			73			7,341
Intangible assets
Intangible assets		—			7,816			—			7,816
Accumulated amortization		—			(7,633	)		—			(7,633	)

Total intangible assets		—			183			—			183

Total assets	$	1,550,860		$	723,160		$	27,779		$	2,301,799

Liabilities and Equity
Indebtedness	$	1,228,741		$	457,202		$	21,206		$	1,707,149
Accrued interest payable		584			30			4,057			4,671
Accounts payable and accrued expenses		5			10,922			3,305			14,232
Derivative liabilities		11,553			—			—			11,553
Deferred taxes, borrowers’ escrows and other liabilities		—			3,876			3,458			7,334

Total liabilities		1,240,883			472,030			32,026			1,744,939

Equity:
Shareholders’ equity:
Accumulated other comprehensive income (loss)		(11,605	)		—			—			(11,605	)
RAIT investment		163,604			80,380			845			244,829
Retained earnings (deficit)		157,978			(28,065	)		(5,092	)		124,821

Total shareholders’ equity		309,977			52,315			(4,247	)		358,045
Noncontrolling Interests		—			198,815			—			198,815

Total liabilities and equity	$	1,550,860		$	723,160		$	27,779		$	2,301,799


	As of December 31, 2014
	RAIT Securitizations			IRT			RAIT VIE Properties			Total
Assets
Investments in mortgages and loans, at amortized cost:
Commercial mortgages, mezzanine loans, other loans and preferred equity interests	$	1,535,097		$	—		$	—		$	1,535,097
Allowance for losses		(8,423	)		—			—			(8,423	)

Total investments in mortgages and loans		1,526,674			—			—			1,526,674
Investments in real estate
Investments in real estate		—			689,112			23,899			713,011
Accumulated depreciation		—			(23,376	)		(3,686	)		(27,062	)

Total investments in real estate		—			665,736			20,213			685,949
Investments in securities and security-related receivables, at fair value		10,995			—			—			10,995
Cash and cash equivalents		—			14,763			216			14,979
Restricted cash		14,715			5,205			244			20,164
Accrued interest receivable		74,904			—			—			74,904
Other assets		136			(420	)		6,908			6,624
Deferred financing costs
Deferred financing costs		26,028			3,431			346			29,805
Accumulated amortization		(20,095	)		(507	)		(239	)		(20,841	)

Total deferred financing costs		5,933			2,924			107			8,964
Intangible assets
Intangible assets		—			7,596			—			7,596
Accumulated amortization		—			(4,345	)		—			(4,345	)

Total intangible assets		—			3,251			—			3,251

Total assets	$	1,633,357		$	691,459		$	27,688		$	2,352,504

Liabilities and Equity
Indebtedness	$	1,315,103		$	418,900		$	21,280		$	1,755,283
Accrued interest payable		670			31			3,661			4,362
Accounts payable and accrued expenses		3			8,371			3,290			11,664
Derivative liabilities		20,051			—			—			20,051
Deferred taxes, borrowers’ escrows and other liabilities		—			1,124			2,950			4,074

Total liabilities		1,335,827			428,426			31,181			1,795,434

Equity:
Shareholders’ equity:
Accumulated other comprehensive income (loss)		(20,788	)		—			—			(20,788	)
RAIT investment		114,207			71,024			743			185,974
Retained earnings (deficit)		204,111			(16,729	)		(4,236	)		183,146

Total shareholders’ equity		297,530			54,295			(3,493	)		348,332
Noncontrolling Interests		—			208,738			—			208,738

Total liabilities and equity	$	1,633,357		$	691,459		$	27,688		$	2,352,504

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.