UNAUDITED QUARTERLY FINANCIAL DATA AND RESTATEMENT OF INTERIM FINANCIAL STATEMENTS

The Company is restating the previously issued financial statements covering the three months ended on December 31, 2010, March 31, 2011, June 30, 2011 and September 30, 2011 respectively, to reflect the consolidation of RSO in the tables presented below:



Quarterly Results for Fiscal 2011 ⁽¹⁾	December 31			March 31			June 30			September 30
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues	$	16,680		$	20,347		$	27,589		$	21,400
Revenues from consolidated VIE- RSO	22,638			26,150			21,987			25,211
Elimination of consolidated VIE revenues attributed to operating segments	(4,036		)	(3,221		)	(3,632		)	(4,181		)
Total revenues	35,282			43,276			45,944			42,430
Operating income	8,404			5,896			15,070			6,023
Income (loss) from continuing operations	10,452			1,555			13,429			(3,625		)
Loss from discontinued operations	—			(2,153		)	(23		)	(26		)
Net income (loss)	10,452			(598		)	13,406			(3,651		)
Net loss attributable to noncontrolling interests	625			513			513			460
Net income attributable to noncontrolling interests - RSO	(12,579		)	(8,868		)	(14,436		)	(400		)
Net loss attributable to common shareholders	(1,502		)	(8,953		)	(517		)	(3,591		)

Basic and Diluted loss per common share:
Continuing operations	$	(0.08	)	$	(0.35	)	$	(0.03	)	$	(0.18	)
Discontinued operations	—			(0.11		)	—			—
Net loss	$	(0.08	)	$	(0.46	)	$	(0.03	)	$	(0.18	)


(1)	Fiscal 2011 – significant events by quarter:


•	December 31 – included a net gain of $5.1 million ($3.2 million net of tax, or $0.17 per share-diluted) on the sale of the Company’s management contract and equity investment in REM I.


•	March 31 – included a $3.4 million ($2.2 million net of tax, or $0.11 per share-diluted) loss from discontinued operations in connection with the March 2006 sale of a real estate loan in which the Company agreed to make payments under certain circumstances to the owner. In March 2011, a triggering event occurred.


•	June 30 – included a $7.6 million ($3.3 million net of tax, or $0.17 per share-diluted) equity gain based on the Company’s interest in an office building that was sold in Washington, DC.


•	September 30 – the gain related to the third quarter sale of the Washington, DC building increased by $800,000 ($361,000 net of tax, or $0.02 per share-diluted) based on the release of funds from escrow.



Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
	December 31,			September 30,
	2010			2010
	(Restated)
ASSETS
Cash	$	14,530		$	11,243
Restricted cash	5,401			12,018
Receivables	622			1,671
Receivables from managed entities and related parties, net	60,401			66,416
Investments in commercial finance, net	22,286			12,176
Investments in real estate, net	28,502			27,114
Investment securities, at fair value	3,678			22,358
Investments in unconsolidated entities	14,387			13,825

Asset of consolidated variable interest entity ("VIE") - RSO
Cash and cash equivalents (including restricted cash)	221,138			—
Investments, at fair value	182,778			—
Loans	1,486,549			—
Investment in real estate and unconsolidated entities	11,233			—
Other assets	33,230			—
Total assets of consolidated VIE - RSO	1,934,928			—

Property and equipment, net	8,324			9,984
Deferred tax assets	36,625			43,703
Goodwill	7,969			7,969
Other assets	5,411			5,776
Total assets	$	2,143,064		$	234,253

LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities	$	30,348		$	38,492
Payables to managed entities and related parties	184			156
Borrowings	63,701			66,110
Deferred tax liabilities	411			411
Liabilities of consolidated VIE -- RSO
Borrowings	1,463,701			—
Other liabilities	45,116			—
Total liabilities of consolidated VIE - RSO	1,508,817			—
Total liabilities	1,603,461			105,169

Commitments and contingencies

Equity:
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none outstanding	—			—
Common stock, $.01 par value, 49,000,000 shares authorized; 28,171,720 and 28,167,909 shares issued, respectively (including nonvested restricted stock of 732,308 and 741,086, respectively)	274			274
Additional paid-in capital	282,062			281,378
Accumulated deficit	(34,298		)	(37,558		)
Treasury stock, at cost; 9,118,549 and 9,125,253 shares, respectively	(99,245		)	(99,330		)
Accumulated other comprehensive loss	(1,773		)	(12,807		)
Total stockholders’ equity	147,020			131,957
Noncontrolling interests	(3,474		)	(2,873		)
Noncontrolling interest of consolidated VIE - RSO	396,057			—
Total equity	539,603			129,084
	$	2,143,064		$	234,253



Consolidating Balance Sheet
(in thousands, except per share data)
(unaudited)
	December 31, 2010
				Restatement Adjustments
				RSO at
	As Reported			March 31, 2011		Eliminations			As Restated
ASSETS
Cash	$	14,530		$	—	$	—		$	14,530
Restricted cash	5,401			—		—			5,401
Receivables	622			—		—			622
Receivables from managed entities and related parties, net	62,016			—		(1,615		)	60,401
Investments in commercial finance, net	22,286			—		—			22,286
Investments in real estate, net	27,462			—		1,040			28,502
Investment securities, at fair value	21,716			—		(18,038		)	3,678
Investments in unconsolidated entities	14,387			—		—			14,387
Assets of consolidated VIE - RSO:
Cash and cash equivalents (including restricted cash)	—			221,138		—			221,138
Investments, at fair value	—			182,778		—			182,778
Loans	—			1,488,488		(1,939		)	1,486,549
Investments in real estate and consolidated entities	—			11,233		—			11,233
Other assets - RSO	—			33,998		(768		)	33,230
Total assets of consolidated VIE - RSO	—			1,937,635		(2,707		)	1,934,928
Property and equipment, net	9,364			—		(1,040		)	8,324
Goodwill	7,969			—		—			7,969
Deferred tax assets, net	42,010			—		(5,385		)	36,625
Other assets	5,411			—		—			5,411
Total assets	$	233,174		$	1,937,635	$	(27,745	)	$	2,143,064

LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities	$	35,661		$	—	$	(5,313	)	$	30,348
Payables to managed entities and related parties	952			—		(768		)	184
Borrowings	65,640			—		(1,939		)	63,701
Deferred tax liabilities	411			—		—			411
Liabilities of consolidated VIE - RSO:
Borrowings	—			1,463,701		—			1,463,701
Other liabilities	—			46,731		(1,615		)	45,116
Total liabilities of consolidated VIE - RSO	—			1,510,432		(1,615		)	1,508,817
Total liabilities	102,664			1,510,432		(9,635		)	1,603,461

Commitments and contingencies

Equity:
Preferred stock	—			—		—			—
Common stock	274			—		—			274
Additional paid-in capital	282,062			—		—			282,062
Accumulated deficit	(38,676		)	—		4,378			(34,298		)
Treasury stock, at cost	(99,245		)	—		—			(99,245		)
Accumulated other comprehensive loss	(10,431		)	—		8,658			(1,773		)
Total stockholders’ equity	133,984			—		13,036			147,020
Noncontrolling interests	(3,474		)	—		—			(3,474		)
Noncontrolling interest attributable to RSO	—			427,203		(31,146		)	396,057
Total equity	130,510			427,203		(18,110		)	539,603
	$	233,174		$	1,937,635	$	(27,745	)	$	2,143,064



Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
	December 31,
	2010			2009
	(Restated)
REVENUES:
Real estate (includes revenues of $1,363 and $1,793 related to RSO)	$	6,874		$	6,947
Commercial finance (includes $144 and $24 related to RSO)	1,476			8,823
Financial fund management (includes revenues of $2,402 and $672 related to RSO)	8,330			9,652
	16,680			25,422
Revenues from consolidated VIE - RSO	22,638			—
Elimination of consolidated revenues attributed to operating segments	(4,036		)	—
Total revenues	35,282			25,422
COSTS AND EXPENSES:
Real estate	5,461			4,727
Financial fund management	6,720			4,704
Commercial finance	4,273			4,575
General and administrative	3,116			3,432
(Gain) loss on sale of leases and loans	(11		)	582
Provision for credit losses	1,606			776
Depreciation and amortization	1,125			2,206
	22,290			21,002
Expenses from consolidated VIE - RSO	7,698			—
Elimination of consolidated expenses attributed to operating segments	(3,110		)	—
Total expenses	26,878			21,002
OPERATING INCOME	8,404			4,420
OTHER INCOME (EXPENSE):
Gain on sale of management contract	6,520			—
Loss on sale of investment securities, net	(1,461		)	—
Interest expense	(2,369		)	(3,817		)
Other income, net	475			570
	3,165			(3,247		)
Other income from consolidated VIE - RSO	11			—
Elimination of consolidated VIE - RSO other income attributable to operating segments	39			—
	3,215			(3,247		)
Income from continuing operations before taxes	11,619			1,173
Income tax provision of consolidated VIE - RSO	1,809			—
Income tax (benefit) provision	(642		)	585
Net income	10,452			588
Net losses attributable to noncontrolling interests - RAI	625			383
Net income attributable to noncontrolling interests of consolidated VIE - RAO	(12,579		)	—
Net (loss) income attributable to common shareholders	$	(1,502	)	$	971

Basic (loss) income per share attributable to common shareholders:
Net (loss) income	$	(0.08	)	$	0.05
Weighted average shares outstanding	19,076			18,689

Diluted (loss) income per share attributable to common shareholders:
Net (loss) income	$	(0.08	)	$	0.05
Weighted average shares outstanding	19,076			18,962



Consolidating Statement of Operations
(in thousands, except per share data)
(unaudited)
	For the Three Months Ended December 31, 2010
				Restatement Adjustments
	As Reported			RSO ⁽¹⁾		Eliminations			As Restated
REVENUES:
Real estate	$	6,874		$	—	$	—		$	6,874
Financial fund management	8,330			—		—			8,330
Commercial finance	1,476			—		—			1,476
	16,680			—		—			16,680
Revenues from consolidated VIE - RSO	—			22,638		—			22,638
Elimination of consolidated VIE revenues attributed to operating segments	—			—		(4,036		)	(4,036		)
Total Revenues	16,680			22,638		(4,036		)	35,282
COSTS AND EXPENSES:
Real estate	5,461			—		—			5,461
Financial fund management	6,720			—		—			6,720
Commercial finance	4,273			—		—			4,273
General and administrative	3,116			—		—			3,116
(Gain) loss on sale of leases and loans	(11		)	—		—			(11		)
Provision for credit losses	1,606			—		—			1,606
Depreciation and amortization	1,125			—		—			1,125
	22,290			—		—			22,290
Expenses from consolidated VIE - RSO	—			9,507		(1,809		)	7,698
Elimination of consolidated VIE expenses attributed to operating segments	—			—		(3,110		)	(3,110		)
Total expenses	22,290			9,507		(4,919		)	26,878
OPERATING (LOSS) INCOME	(5,610		)	13,131		883			8,404

OTHER INCOME (EXPENSE):
Gain on sale of management contract	6,520			—		—			6,520
Loss on sale of investment securities, net	(1,461		)	—		—			(1,461		)
Interest expense	(2,369		)	—		—			(2,369		)
Other income, net	1,086			—		(611		)	475
Other income from consolidated VIE - RSO	—			11		—			11
Elimination of consolidated VIE expenses attributed to operating segments	—			—		39			39
	3,776			11		(572		)	3,215
(Loss) income from continuing operations before taxes	(1,834		)	13,142		311			11,619
Income tax (benefit) provision	(642		)	—		1,809			1,167
Net (loss) income	(1,192		)	13,142		(1,498		)	10,452
Net loss attributable to noncontrolling interests	625			—		—			625
Net income attributable to noncontrolling interests - RSO	—			—		(12,579		)	(12,579		)
Net (loss) income attributable to common shareholders	$	(567	)	$	13,142	$	(14,077	)	$	(1,502	)





Consolidating Statement of Operations - (Continued)
(in thousands, except per share data)
(unaudited)

	For the Three Months Ended December 31, 2010
				Restatement Adjustments
	As Reported			RSO ⁽¹⁾		Eliminations			As Restated
Amounts attributable to common shareholders:
Income (loss) from continuing operations	$	(567	)	$	13,142	$	(14,077	)	$	(1,502	)
Discontinued operations	—			—		—			—
Net income (loss)	$	(567	)	$	13,142	$	(14,077	)	$	(1,502	)

	As Reported								As Restated
Basic and diluted loss per share:
Continuing operations	$	(0.03	)						$	(0.08	)
Discontinued operations	—								—
Net loss	$	(0.03	)						$	(0.08	)
Weighted average shares outstanding	19,076								19,076

(1) Includes RSO for the three months ended March 31, 2011.



Consolidated Statements of Cash Flows
(in thousands, except per share data)
(unaudited)
	Three Months Ended
	December 31,
	2010			2009
	(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	10,452		$	588
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	1,999			3,173
Provision for credit losses	2,405			776
Equity in earnings of unconsolidated entities	(1,427		)	(3,405		)
Distributions from unconsolidated entities	663			1,261
(Gain) loss on sale of leases and loans	(11		)	582
Loss on sale of investment securities, net	1,461			—
Gain on resolution of assets	—			(244		)
Gain on sale of management contract	(6,520		)	—
Deferred income tax benefit	422			34
Equity-based compensation issued	781			1,120
Equity-based compensation received	—			(375		)
Decrease in commercial finance investments	—			8,386
Changes in operating assets and liabilities	(611		)	(13,049		)
Changes in cash attributable to operations of consolidated VIE - RSO	(29,877		)	—
Net cash used in operating activities	(20,263		)	(1,153		)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(38		)	(118		)
Investments in unconsolidated real estate entities	(283		)	—
Purchase of commercial finance assets	(10,690		)	—
Purchase of loans and securities by consolidated VIE - RSO	(213,887		)	—
Principal payments and proceeds from sales received by consolidated VIE - RSO	145,670			—
Proceeds from sale of management contract	9,095			—
Purchase of loans and investments	—			(1,640		)
Proceeds from sale of loans and investment securities	2,946			2,274
Increase in restricted cash of consolidated VIE - RSO	(4,053		)	—
Other investing activity of consolidated VIE - RSO	12,437			—
Net cash provided by investing activities	(58,803		)	516

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings	1,000			45,701
Principal payments on borrowings	(1,908		)	(62,326		)
Net borrowings (repayments) of consolidated VIE - RSO	15,109			—
Dividends paid	(551		)	(540		)
Dividends paid on common stock by consolidated VIE - RSO	(13,944		)	—
Net proceeds from issuance of common stock by consolidated VIE - RSO	76,619			—
Decrease (increase) in debt financing costs	73			(496		)
Decrease in restricted cash	6,617			510
Other financing activity of consolidated VIE - RSO	(662		)	—
Net cash provided by (used in) financing activities	82,353			(17,151		)

Increase (decrease) in cash	3,287			(17,788		)
Cash at beginning of year	11,243			26,197
Cash at end of period	$	14,530		$	8,409



Consolidating Statement of Cash Flows
(in thousands, except per share data)
(unaudited)

	For the Three Months Ended December 31, 2010
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾			Eliminations			As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(1,192	)	$	13,142		$	(1,498	)	$	10,452
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	1,911			—			88			1,999
Provision for credit losses	1,606			—			799			2,405
Equity in earnings of unconsolidated entities	(1,427		)	—			—			(1,427		)
Distributions from unconsolidated entities	663			—			—			663
Gain on sale of leases and loans	(11		)	—			—			(11		)
Loss on sale of loans and investment securities, net	1,461			—			—			1,461
Gain on sale of management contract	(6,520		)	—			—			(6,520		)
Deferred income tax provision (benefit)	422			—			—			422
Equity-based compensation issued	781			—			—			781
Equity-based compensation received	(57		)	—			57			—
Changes in operating assets and liabilities	(611		)	—			—			(611		)
Changes in cash attributable to operations of consolidated VIE - RSO	—			(29,820		)	(57		)	(29,877		)
Net cash used in operating activities	(2,974		)	(16,678		)	(611		)	(20,263		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(38		)	—			—			(38		)
Investments in unconsolidated real estate entities	(283		)	—			—			(283		)
Purchase of commercial finance assets	(10,690		)	—			—			(10,690		)
Purchase of loans and securities by consolidated VIE - RSO	—			(213,887		)	—			(213,887		)
Principal payments and proceeds from sales received by consolidated VIE - RSO	—			145,670			—			145,670
Proceeds from sale of management contract	9,095			—			—			9,095
Proceeds from sale of loans and investments	2,946			—			—			2,946
Increase in restricted cash of consolidated VIE - RSO	—			(4,053		)	—			(4,053		)
Other investing activity of consolidated VIE - RSO	—			12,437			—			12,437
Net cash provided by (used in) investing activities	1,030			(59,833		)	—			(58,803		)



Consolidated Statement of Cash Flows - (Continued)
(in thousands, except per share data)
(unaudited)

	For the Three Months Ended December 31, 2010
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾			Eliminations		As Restated
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings	1,000			—			—		1,000
Principal payments on borrowings	(1,908		)	—			—		(1,908		)
Net borrowings (repayments) of debt by consolidated VIE - RSO	—			15,109			—		15,109
Dividends paid	(551		)	—			—		(551		)
Dividends paid on common stock by consolidated VIE - RSO	—			(14,555		)	611		(13,944		)
Net proceeds from issuance of common stock by consolidated VIE - RSO	—			76,619			—		76,619
Decrease in restricted cash	6,617			—			—		6,617
Other	73			—			—		73
Other financing activity of consolidated VIE - RSO	—			(662		)	—		(662		)
Net cash provided by financing activities	5,231			76,511			611		82,353

Increase in cash	3,287			—			—		3,287
Cash, beginning of year	11,243			—			—		11,243
Cash, end of period	$	14,530		$	—		$	—	$	14,530

(1) Includes RSO cash flow for the three months ended March 31, 2011.



Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
	March 31,			September 30,
	2011			2010
	(Restated)
ASSETS
Cash	$	16,495		$	11,243
Restricted cash	21,446			12,018
Receivables	1,138			1,671
Receivables from managed entities and related parties, net	57,833			66,416
Investments in commercial finance, net	145,961			12,176
Investments in real estate, net	28,555			27,114
Investment securities, at fair value	3,332			22,358
Investments in unconsolidated entities	12,861			13,825

Asset of consolidated variable interest entity ("VIE") - RSO
Cash and cash equivalents (including restricted cash)	235,795			—
Investments, at fair value	158,927			—
Loans	1,465,053			—
Investment in real estate and unconsolidated entities	42,480			—
Other assets	36,636			—
Total assets of consolidated VIE - RSO	1,938,891			—

Property and equipment, net	7,304			9,984
Deferred tax assets	39,989			43,703
Goodwill	7,969			7,969
Other assets	7,594			5,776
Total assets	$	2,289,368		$	234,253

LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities	$	34,409		$	38,492
Payables to managed entities and related parties	136			156
Borrowings	178,938			66,110
Deferred tax liabilities	411			411
Liabilities of consolidated VIE - RSO (see Note 19):
Borrowings	1,473,202			—
Other liabilities	64,387			—
Total liabilities of consolidated VIE - RSO	1,537,589			—
Total liabilities	1,751,483			105,169

Commitments and contingencies

Equity:
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none outstanding	—			—
Common stock, $.01 par value, 49,000,000 shares authorized; 28,740,931 and 28,167,909 shares issued, respectively (including nonvested restricted stock of 645,708 and 741,086, respectively)	281			274
Additional paid-in capital	280,906			281,378
Accumulated deficit	(43,805		)	(37,558		)
Treasury stock, at cost; 9,108,440 and 9,125,253 shares, respectively	(99,085		)	(99,330		)
Accumulated other comprehensive loss	(1,653		)	(12,807		)
Total stockholders’ equity	136,644			131,957
Noncontrolling interests	(335		)	(2,873		)
Noncontrolling interest of consolidated VIE - RSO	401,576			—
Total equity	537,885			129,084
	$	2,289,368		$	234,253



Consolidating Balance Sheet
(in thousands, except per share data)
(unaudited)

	March 31, 2011
				Restatement Adjustments
	As Previously Reported			RSO at June 30, 2011		Eliminations			As Restated
ASSETS
Cash	$	16,495		$	—	$	—		$	16,495
Restricted cash	21,446			—		—			21,446
Receivables	1,138			—		—			1,138
Receivables from managed entities and related parties, net	59,498			—		(1,665		)	57,833
Investments in commercial finance, net	145,961			—		—			145,961
Investments in real estate, net	27,547			—		1,008			28,555
Investment securities, at fair value	19,469			—		(16,137		)	3,332
Investments in unconsolidated entities	12,861			—		—			12,861
Assets of consolidated VIE - RSO :
Cash and cash equivalents (increase restricted cash)	—			235,795		—			235,795
Investments, at fair value	—			190,069		(31,142		)	158,927
Loans	—			1,466,758		(1,705		)	1,465,053
Investments in real estate and consolidated entities	—			42,480		—			42,480
Other assets - RSO	—			37,532		(896		)	36,636
Total assets of consolidated VIE - RSO	—			1,972,634		(33,743		)	1,938,891
Property and equipment, net	8,312			—		(1,008		)	7,304
Goodwill	7,969			—		—			7,969
Deferred tax assets, net	46,114			—		(6,125		)	39,989
Other assets	7,594			—		—			7,594
Total assets	$	374,404		$	1,972,634	$	(57,670	)	$	2,289,368

LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities	$	34,409		$	—	$	—		$	34,409
Payables to managed entities and related parties	297			—		(161		)	136
Borrowings	180,643			—		(1,705		)	178,938
Deferred tax liabilities	411			—		—			411
Liabilities of consolidated VIE - RSO :
Borrowings	—			1,473,202		—			1,473,202
Other liabilities	—			66,052		(1,665		)	64,387
Total liabilities	215,760			1,539,254		(3,531		)	1,751,483

Commitments and contingencies

Equity:
Preferred stock	—			—		—			—
Common stock	281			—		—			281
Additional paid-in capital	280,906			—		—			280,906
Accumulated deficit	(43,496		)	—		(309		)	(43,805		)
Treasury stock, at cost	(99,085		)	—		—			(99,085		)
Accumulated other comprehensive loss	(11,504		)	—		9,851			(1,653		)
Total stockholders’ equity	127,102			—		9,542			136,644
Noncontrolling interests	31,542			—		(31,877		)	(335		)
Noncontrolling interests attributable to RSO	—			433,380		(31,804		)	401,576
Total equity	158,644			433,380		(54,139		)	537,885
	$	374,404		$	1,972,634	$	(57,670	)	$	2,289,368



Consolidated Statements of Operations
(unaudited, in thousands, except per share data)

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2011			2010			2011			2010
	(Restated)						(Restated)
REVENUES:
Real estate (includes $1,202, $880, $2,565 and $2,673 related to RSO)	$	6,258		$	5,770		$	13,132		$	12,717
Commercial finance	6,477			7,409			7,953			16,232
Financial fund management (includes $1,535, $267, $3,937 and $939 related to RSO)	7,612			6,221			15,942			15,873
	20,347			19,400			37,027			44,822
Revenues from consolidated VIE - RSO	26,150			—			48,788			—
Eliminations of consolidated revenues attributed to operating segments	(3,221		)	—			(7,257		)	—
Total Revenues	43,276			19,400			78,558			44,822
COSTS AND EXPENSES:
Real estate	6,088			5,516			11,549			10,243
Financial fund management	5,960			4,700			12,680			9,404
Commercial finance	3,693			4,731			7,966			9,306
General and administrative	2,897			2,768			6,013			6,200
(Gain) loss on sale of leases and loans	(252		)	(31		)	(263		)	551
Provision for credit losses	2,719			1,210			4,325			1,986
Depreciation and amortization	2,921			2,382			4,046			4,588
	24,026			21,276			46,316			42,278
Expenses from consolidated VIE - RSO	15,743			—			23,441			—
Elimination of consolidated expenses attributable to operating segments	(2,389		)	—			(5,499		)	—
Total Expenses	37,380			21,276			64,258			42,278
OPERATING (LOSS) INCOME	5,896			(1,876		)	14,300			2,544
OTHER INCOME (EXPENSE):
Other-than-temporary impairment losses on investments securities	—			(297		)	—			(297		)
Gain on sale of management contract	—			—			6,520			—
Gain (loss) on sale of investment securities, net	97			(424		)	(1,364		)	(424		)
Interest expense	(4,167		)	(3,871		)	(6,536		)	(7,688		)
Other (expense) income, net	(409		)	637			66			1,207
	(4,479		)	(3,955		)	(1,314		)	(7,202		)
Other income from consolidated VIE - RSO	(17		)	—			(6		)	—
Elimination of consolidated other income attributable to operating segments	36			—			75			—
	(4,460		)	(3,955		)	(1,245		)	(7,202		)
Income (loss) from continuing operations before taxes	1,436			(5,831		)	13,055			(4,658		)
Income tax provision - RSO	1,171			—			2,980			—
Income tax benefit	(1,290		)	(3,986		)	(1,932		)	(3,401		)
Income (loss) from continuing operations	1,555			(1,845		)	12,007			(1,257		)
Loss from discontinued operations, net of tax	(2,153		)	(2		)	(2,153		)	(2		)
Net (loss) income	(598		)	(1,847		)	9,854			(1,259		)
Net loss attributable to noncontrolling interests	513			615			1,138			998
Net income attributable to noncontrolling - RSO	(8,868		)	—			(21,447		)	—
Net loss attributable to common shareholders	$	(8,953	)	$	(1,232	)	$	(10,455	)	$	(261	)



Consolidated Statements of Operations - (Continued)
(unaudited, in thousands, except per share data)

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2011			2010			2011			2010
	(Restated)						(Restated)
Amounts attributable to common shareholders:
Loss from continuing operations	$	(6,800	)	$	(1,230	)	$	(8,302	)	$	(259	)
Discontinued operations	(2,153		)	(2		)	(2,153		)	(2		)
Net loss	$	(8,953	)	$	(1,232	)	$	(10,455	)	$	(261	)

Basic and diluted loss per common share:
Continuing operations	$	(0.35	)	$	(0.06	)	$	(0.43	)	$	(0.01	)
Discontinued operations	(0.11		)	—			(0.11		)	—
Net loss	$	(0.46	)	$	(0.06	)	$	(0.54	)	$	(0.01	)
Weighted average shares outstanding	19,355			19,089			19,213			18,888



Consolidating Statement of Operations
(unaudited, in thousands, except per share data)

	For the Three Months Ended March 31, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾			Eliminations			As Restated
REVENUES:	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Real estate	$	6,258		$	—		$	—		$	6,258
Financial fund management	7,612			—			—			7,612
Commercial finance	6,477			—			—			6,477
	20,347			—			—			20,347
Revenues from consolidated VIE - RSO	—			26,150			—			26,150
Elimination of consolidated VIE revenues attributed to operating segments	—			—			(3,221		)	(3,221		)
Total Revenues	20,347			26,150			(3,221		)	43,276
COSTS AND EXPENSES:
Real estate	6,088			—			—			6,088
Financial fund management	5,960			—			—			5,960
Commercial finance	3,693			—			—			3,693
General and administrative	2,897			—			—			2,897
Gain on sale of leases and loans	(252		)	—			—			(252		)
Provision for credit losses	2,719			—			—			2,719
Depreciation and amortization	2,921			—			—			2,921
	24,026			—						24,026
Expenses from consolidated VIE - RSO	—			16,914			(1,171		)	15,743
Elimination of consolidated VIE expenses attributed to operating segments	—			—			(2,389		)	(2,389		)
Total expenses	24,026			16,914			(3,560		)	37,380
OPERATING (LOSS) INCOME	(3,679		)	9,236			339			5,896

OTHER INCOME (EXPENSE):
Gain on extinguishment of servicing and repurchase liabilities	4,426			—			(4,426		)	—
Gain on sale of investment securities, net	97			—			—			97
Interest expense	(4,167		)	—			—			(4,167		)
Other income (expense), net	203			—			(612		)	(409		)
Other income from consolidated VIE - RSO	—			(17		)	—			(17		)
Elimination of consolidated VIE expenses attributed to operating segments	—			—			36			36
	559			(17		)	(5,002		)	(4,460		)
(Loss) income from continuing operations before taxes	(3,120		)	9,219			(4,663		)	1,436
Income tax (benefit) provision	(1,290		)	—			1,171			(119		)
(Loss) income from continuing operations	(1,830		)	9,219			(5,834		)	1,555
Loss from discontinued operations, net of tax	(2,153		)	—			—			(2,153		)
Net (loss) income	(3,983		)	9,219			(5,834		)	(598		)
Net (income) loss attributable to noncontrolling interests	(283		)	—			796			513
Net income attributable to noncontrolling interests - RSO	—			—			(8,868		)	(8,868		)
Net (loss) income attributable to common shareholders	$	(4,266	)	$	9,219		$	(13,906	)	$	(8,953	)



Consolidating Statement of Operations - (Continued)
(unaudited, in thousands, except per share data)


	For the Three Months Ended March 31, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾		Eliminations			As Restated
Amounts attributable to common shareholders:
Income (loss) from continuing operations	$	(2,113	)	$	9,219	$	(13,906	)	$	(6,800	)
Discontinued operations	(2,153		)	—		—			(2,153		)
Net income (loss)	$	(4,266	)	$	9,219	$	(13,906	)	$	(8,953	)

Basic and diluted loss per share:
Continuing operations	$	(0.11	)						$	(0.35	)
Discontinued operations	(0.11		)						(0.11		)
Net loss	$	(0.22	)						$	(0.46	)
Weighted average shares outstanding	19,355								19,355

(1) Includes RSO for the three months ended June 30, 2011.



Consolidating Statement of Operations
(unaudited, in thousands, except per share data)

	For the Six Months Ended March 31, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾			Eliminations			As Restated
REVENUES:
Real estate	$	13,132		$	—		$	—		$	13,132
Financial fund management	15,942			—			—			15,942
Commercial finance	7,953			—			—			7,953
	37,027			—			—			37,027
Revenues from consolidated VIE - RSO	—			48,788			—			48,788
Elimination of consolidated VIE revenues attributed to operating segments	—			—			(7,257		)	(7,257		)
Total Revenues	37,027			48,788			(7,257		)	78,558
COSTS AND EXPENSES:
Real estate	11,549			—			—			11,549
Financial fund management	12,680			—			—			12,680
Commercial finance	7,966			—			—			7,966
General and administrative	6,013			—			—			6,013
Gain on sale of leases and loans	(263		)	—			—			(263		)
Provision for credit losses	4,325			—			—			4,325
Depreciation and amortization	4,046			—			—			4,046
	46,316			—			—			46,316
Expenses from consolidated VIE - RSO	—			26,421			(2,980		)	23,441
Elimination of consolidated VIE expenses attributed to operating segments	—			—			(5,499		)	(5,499		)
Total expenses	46,316			26,421			(8,479		)	64,258
OPERATING (LOSS) INCOME	(9,289		)	22,367			1,222			14,300

OTHER INCOME (EXPENSE):
Gain on sale of management contract	6,520			—			—			6,520
Gain on extinguishment of servicing and repurchase liabilities	4,426			—			(4,426		)	—
Loss on sale of investment securities, net	(1,364		)	—			—			(1,364		)
Interest expense	(6,536		)	—			—			(6,536		)
Other income (expense), net	1,289			—			(1,223		)	66
Other expenses from consolidated VIE - RSO	—			(6		)	—			(6		)
Elimination of consolidated VIE expenses attributed to operating segments	—			—			75			75
	4,335			(6		)	(5,574		)	(1,245		)
(Loss) income from continuing operations before taxes	(4,954		)	22,361			(4,352		)	13,055
Income tax (benefit) provision	(1,932		)	—			2,980			1,048
(Loss) income from continuing operations	(3,022		)	22,361			(7,332		)	12,007
Loss from discontinued operations, net of tax	(2,153		)	—			—			(2,153		)
Net (loss) income	(5,175		)	22,361			(7,332		)	9,854
Net loss attributable to noncontrolling interests	342			—			796			1,138
Net income attributable to noncontrolling interests - RSO	—			—			(21,447		)	(21,447		)
Net (loss) income attributable to common shareholders	$	(4,833	)	$	22,361		$	(27,983	)	$	(10,455	)





Consolidating Statement of Operations - (Continued)
(unaudited, in thousands, except per share data)

	For the Six Months Ended March 31, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾		Eliminations			As Restated
Amounts attributable to common shareholders:
(Loss) income from continuing operations	$	(2,680	)	$	22,361	$	(27,983	)	$	(8,302	)
Discontinued operations	(2,153		)	—		—			(2,153		)
Net (loss) income	$	(4,833	)	$	22,361	$	(27,983	)	$	(10,455	)

Basic and diluted loss per common share:
Continuing operations	$	(0.14	)						$	(0.43	)
Discontinued operations	(0.11		)						(0.11		)
Net loss	$	(0.25	)						$	(0.54	)
Weighted average shares outstanding	19,213								19,213

(1) Includes RSO for the six months ended June 30, 2011.



Consolidated Statements of Cash Flows
(in thousands, except per share data)
	Six Months Ended
	March 31,
	2011			2010
	(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	9,854		$	(1,259	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	6,331			6,721
Net other-than-temporary impairment losses recognized in earnings	—			297
Provision for credit losses	5,124			1,986
Equity in earnings of unconsolidated entities	(1,944		)	(3,441		)
Distributions from unconsolidated entities	2,751			2,701
(Gain) loss on sale of leases and loans	(263		)	551
Loss on sale of investment securities, net	1,364			424
Gain on resolution of assets	—			(287		)
Gain on sale of management contract	(6,520		)	—
Deferred income tax (benefit) provision	(3,065		)	33
Equity-based compensation issued	1,401			2,014
Equity-based compensation received	—			(375		)
Decrease in commercial finance investments	—			37,182
Loss from discontinued operations	2,153			2
Changes in operating assets and liabilities	(1,047		)	(19,657		)
Changes in cash attributable to operations of consolidated VIE - RSO	(16,604		)	—
Net cash provided by operating activities	(465		)	26,892

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(411		)	(236		)
Payments received on real estate loans and real estate	—			2,885
Investments in unconsolidated real estate entities	(419		)	(1,512		)
Purchase of commercial finance assets	(25,790		)	—
Purchase of loans and securities by consolidated VIE - RSO	(436,374		)	—
Principal payments and proceeds from sales received by consolidated VIE - RSO	295,166			—
Proceeds from sale of management contract	9,095			—
Purchase of loans and investments	—			(1,011		)
Proceeds from sale of loans and investments	3,341			1,510
Principal payments received on loans	—			333
Increase in restricted cash of consolidated VIE- RSO	(20,023		)	—
Other investing activity of consolidated VIE - RSO	74,511			—
Net cash (used in) provided by investing activities	(100,904		)	1,969




Consolidated Statements of Cash Flows - (Continued)
(in thousands, except per share data)

	Six Months Ended
	March 31,
	2011			2010
	(Restated)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings	31,000			71,001
Principal payments on borrowings	(13,756		)	(116,525		)
Net borrowings (repayments) of consolidated VIE - RSO	23,687			—
Dividends paid	(1,105		)	(1,088		)
Dividends paid by consolidated VIE - RSO	(30,922		)	—
Proceeds from issuance of common stock	1,853			58
Net proceeds from issuance of stock by consolidated VIE	100,946			—
Other	(1,075		)	(1,374		)
(Decrease) increase in restricted cash	(3,518		)	194
Other financing activity of consolidated VIE - RSO	(541		)	—
Net cash provided by (used in) financing activities	106,569			(47,734		)

CASH FLOWS FROM DISCONTINUED OPERATIONS
Operating	52			—
Net cash provided by discontinued operations	52			—

Increase (decrease) in cash	5,252			(18,873		)
Cash at beginning of year	11,243			26,197
Cash at end of period	$	16,495		$	7,324



Consolidating Statement of Cash Flows
(in thousands, except per share data)
(unaudited)

	For the Six Months Ended March 31, 2011
				Restatement Adjustments
	As Previously Reported			RSO⁽¹⁾			Eliminations			As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(5,175	)	$	22,361		$	(7,332	)	$	9,854
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	6,243						88			6,331
Provision for credit losses	4,325			—			799			5,124
Equity in earnings of unconsolidated entities	(1,944		)	—			—			(1,944		)
Distributions from unconsolidated entities	2,751			—			—			2,751
Gain on sale of leases and loans	(263		)	—			—			(263		)
Loss on sale of loans and investment securities, net	1,364			—			—			1,364
Gain on sale of management contract	(6,520		)	—			—			(6,520		)
Gain on extinguishment of servicing and repurchase liabilities	(4,426		)	—			4,426			—
Deferred income tax benefit	(3,065		)	—			—			(3,065		)
Equity-based compensation issued	1,401			—			—			1,401
Equity-based compensation received	(33		)	—			33			—
Loss from discontinued operations	2,153			—			—			2,153
Changes in operating assets and liabilities	(1,047		)	—			—			(1,047		)
Change in cash attributable to operating activity of consolidated VIE - RSO	—			(17,367		)	763			(16,604		)
Net cash (used in) provided by operating activities	(4,236		)	4,994			(1,223		)	(465		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(411		)	—			—			(411		)
Investments in unconsolidated real estate entities	(419		)	—			—			(419		)
Purchase of commercial finance assets	(25,790		)	—			—			(25,790		)
Purchase of loans and securities by consolidated VIE - RSO	—			(446,595		)	10,221			(436,374		)
Principal payments and proceeds from sales received by consolidated VIE - RSO	—			295,166			—			295,166
Proceeds from sale of management contract	9,095			—			—			9,095
Proceeds from sale of loans and investments	3,341			—			—			3,341
Increase in restricted cash of consolidated VIE- RSO	—			(20,023		)	—			(20,023		)
Other investing activity of consolidated VIE - RSO	—			74,511			—			74,511
Net cash (used in) provided by investing activities	(14,184		)	(96,941		)	10,221			(100,904		)



Consolidating Statement of Cash Flows - (Continued)
(in thousands, except per share data)
(unaudited)

	For the Six Months Ended March 31, 2011
				Restatement Adjustments
	As Previously Reported			RSO⁽¹⁾			Eliminations			As Restated
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings	31,000			—			—			31,000
Principal payments on borrowings	(13,756		)	—			—			(13,756		)
Net borrowings (repayments) of debt by consolidated VIE - RSO	—			23,687			—			23,687
Dividends paid	(1,105		)	—			—			(1,105		)
Dividends paid on common stock by consolidated VIE - RSO	—			(32,145		)	1,223			(30,922		)
Proceeds from issuance of common stock	1,853			—			—			1,853
Net proceeds from issuance of common stock by consolidated VIE - RSO				100,946			—			100,946
Proceeds from issuance of LEAF preferred stock	10,221			—			(10,221		)	—
Increase in restricted cash	(3,518		)	—			—			(3,518		)
Other	(1,075		)	—			—			(1,075		)
Other financing activity of consolidated VIE - RSO	—			(541		)	—			(541		)
Net cash provided by (used in) financing activities	23,620			91,947			(8,998		)	106,569
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Operating activities	52			—			—			52
Net cash provided by discontinued operations	52			—			—			52

Increase in cash	5,252			—			—			5,252
Cash, beginning of year	11,243			—			—			11,243
Cash, end of period	$	16,495		$	—		$	—		$	16,495

(1) Includes RSO for the six months ended June 30, 2011.



Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)

	June 30,			September 30,
	2011			2010
	(Restated)
ASSETS
Cash	$	28,553		$	11,243
Restricted cash	17,767			12,018
Receivables	1,115			1,671
Receivables from managed entities and related parties, net	54,485			66,416
Investments in commercial finance, net	164,977			12,176
Investments in real estate, net	18,307			27,114
Investment securities, at fair value	3,159			22,358
Investments in unconsolidated entities	12,256			13,825

Asset of consolidated variable interest entity ("VIE") - RSO	—			—
Cash and cash equivalents (including restricted cash)	177,412			—
Investments, at fair value	175,375			—
Loans	1,682,252			—
Investment in real estate and unconsolidated entities	59,295			—
Other assets	36,281			—
Total assets of consolidated VIE - RSO	2,130,615			—

Property and equipment, net	7,104			9,984
Deferred tax assets	39,784			43,703
Goodwill	7,969			7,969
Other assets	13,386			5,776
Total assets	$	2,499,477		$	234,253

LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities	$	39,545		$	38,492
Payables to managed entities and related parties	—			156
Borrowings	188,128			66,110
Deferred tax liabilities	411			411
Liabilities of consolidated VIE -- RSO:
Borrowings	1,549,674			—
Other liabilities	184,845			—
Total liabilities of consolidated VIE - RSO	1,734,519			—
Total liabilities	1,962,603			105,169

Commitments and contingencies

Equity:
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none outstanding	—			—
Common stock, $.01 par value, 49,000,000 shares authorized; 28,760,970 and 28,167,909 shares issued, respectively (including nonvested restricted stock of 641,496 and 741,086, respectively)	281			274
Additional paid-in capital	281,372			281,378
Accumulated deficit	(44,892		)	(37,558		)
Treasury stock, at cost; 9,089,723 and 9,125,253 shares, respectively	(98,874		)	(99,330		)
Accumulated other comprehensive loss	(1,709		)	(12,807		)
Total stockholders’ equity	136,178			131,957
Noncontrolling interests	(870		)	(2,873		)
Noncontrolling interests of consolidated VIE - RSO	401,566			—
Total equity	536,874			129,084
	$	2,499,477		$	234,253



Consolidating Balance Sheet
(in thousands, except per share data)
(unaudited)
	June 30, 2011
				Restatement Adjustments
	As Previously Reported			RSO at September 30, 2011		Eliminations			As Restated
ASSETS
Cash	$	28,553		$	—	$	—		$	28,553
Restricted cash	17,767			—		—			17,767
Receivables	1,115			—		—			1,115
Receivables from managed entities and related parties, net	56,946			—		(2,461		)	54,485
Investments in commercial finance, net	164,977			—		—			164,977
Investments in real estate, net	17,331			—		976			18,307
Investment securities, at fair value	18,635			—		(15,476		)	3,159
Investments in unconsolidated entities	12,256			—		—			12,256
Assets of consolidated VIE - RSO:
Cash and cash equivalents (increase restricted cash)	—			177,412		—			177,412
Investments, at fair value	—			211,649		(36,274		)	175,375
Loans	—			1,683,957		(1,705		)	1,682,252
Investments in real estate and consolidated entities	—			59,295		—			59,295
Other assets - RSO	—			37,929		(1,648		)	36,281
Total assets of consolidated VIE - RSO	—			2,170,242		(39,627		)	2,130,615
Property and equipment, net	8,080			—		(976		)	7,104
Goodwill	7,969			—		—			7,969
Deferred tax assets, net	46,190			—		(6,406		)	39,784
Other assets	13,386			—		—			13,386
Total assets	$	393,205		$	2,170,242	$	(63,970	)	$	2,499,477

LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities	$	39,545		$	—	$	—		$	39,545
Payables to managed entities and related parties	204			—		(204		)	—
Borrowings	189,833			—		(1,705		)	188,128
Deferred tax liabilities	411			—		—			411
Liabilities of consolidated VIE - RSO:
Borrowings	—			1,549,674		—			1,549,674
Other liabilities	—			187,304		(2,459		)	184,845
Total liabilities	229,993			1,736,978		(4,368		)	1,962,603

Commitments and contingencies

Equity:
Preferred stock	—			—		—			—
Common stock	281			—		—			281
Additional paid-in capital	281,372			—		—			281,372
Accumulated deficit	(44,477		)	—		(415		)	(44,892		)
Treasury stock, at cost	(98,874		)	—		—			(98,874		)
Accumulated other comprehensive loss	(11,940		)	—		10,231			(1,709		)
Total stockholders’ equity	126,362			—		9,816			136,178
Noncontrolling interests	36,850			—		(37,720		)	(870		)
Noncontrolling interests attributable to RSO	—			433,264		(31,698		)	401,566
Total equity	163,212			433,264		(59,602		)	536,874
	$	393,205		$	2,170,242	$	(63,970	)	$	2,499,477



Consolidated Statements of Operations
(unaudited, in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(Restated)						(Restated)
REVENUES:
Real estate (includes $2,085, $2,945, $4,650, and $5,618 related to RSO)	$	15,873		$	11,162		$	29,005		$	23,879
Commercial finance (includes $0, $139, $144, and $287 related to RSO)	6,464			5,592			14,417			21,824
Financial fund management (includes $721, $1,257, $4,658, and $2,197 related to RSO)	5,252			8,484			21,194			24,357
	27,589			25,238			64,616			70,060
Revenues from consolidated VIE RSO	21,987			—			70,775			—
Eliminations of consolidated revenues attributed to operating segments	(3,632		)	—			(10,889		)	—
Total Revenues	45,944			25,238			124,502			70,060
COSTS AND EXPENSES:
Real estate	6,727			5,856			18,276			16,099
Commercial finance	3,709			4,512			11,675			13,818
Financial fund management	4,234			6,471			16,914			15,875
General and administrative	2,614			2,946			8,627			9,146
(Gain) loss on sale of leases and loans	(94		)	7,154			(357		)	7,705
Provision for credit losses	3,476			1,428			7,801			3,414
Depreciation and amortization	3,159			2,005			7,205			6,593
	23,825			30,372			70,141			72,650
Expenses from consolidated VIE	9,631			—			33,072			—
Elimination of consolidated expenses attributable to operating segments	(2,582		)	—			(8,081		)	—
Total Expenses	30,874			30,372			95,132			72,650
OPERATING INCOME (LOSS)	15,070			(5,134		)	29,370			(2,590		)

OTHER INCOME (EXPENSE):
Impairment loss recognized in earnings	—			(67		)	—			(364		)
Gain on sale of management contract	—			—			6,520			—
Gain (loss) on sale of investment securities, net	82			(27		)	(1,282		)	(451		)
Interest expense	(4,276		)	(3,504		)	(10,812		)	(11,192		)
Other income, net	84			739			150			1,946
	(4,110		)	(2,859		)	(5,424		)	(10,061		)
Other income from consolidated VIE	3,875			—			3,869			—
Elimination of consolidated other income attributable to operating segments	34			—			109			—
	(201		)	(2,859		)	(1,446		)	(10,061		)
Income (loss) from continuing operations before taxes	14,869			(7,993		)	27,924			(12,651		)
Income tax provision - RSO	1,289			—			4,269			—
Income tax provision (benefit)	151			(1,404		)	(1,781		)	(4,805		)
Income (loss) from continuing operations	13,429			(6,589		)	25,436			(7,846		)
Loss from discontinued operations, net of tax	(23		)	(1		)	(2,176		)	(3		)
Net income (loss)	13,406			(6,590		)	23,260			(7,849		)
Net loss attributable to noncontrolling interests	513			1,275			1,651			2,273
Net income attributable to noncontrolling - RSO	(14,436		)	—			(35,883		)	—
Net loss attributable to common shareholders	$	(517	)	$	(5,315	)	$	(10,972	)	$	(5,576	)



Consolidated Statements of Operations - (Continued)
(unaudited, in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(Restated)						(Restated)
Amounts attributable to common shareholders:
Loss from continuing operations	$	(494	)	$	(5,314	)	$	(8,796	)	$	(5,573	)
Discontinued operations	(23		)	(1		)	(2,176		)	(3		)
Net loss	$	(517	)	$	(5,315	)	$	(10,972	)	$	(5,576	)

Basic and diluted loss per common share:
Continuing operations	$	(0.03	)	$	(0.28	)	$	(0.46	)	$	(0.29	)
Discontinued operations	—			—			(0.11		)	—
Net loss	$	(0.03	)	$	(0.28	)	$	(0.57	)	$	(0.29	)
Weighted average shares outstanding	19,741			19,140			19,389			18,972



Consolidating Statement of Operations
(in thousands, except per share data)
	For the Three Months Ended June 30, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾		Eliminations			Restated
REVENUES:	(unaudited)			(unaudited)		(unaudited)			(unaudited)
Real estate	$	15,873		$	—	$	—		$	15,873
Financial fund management	5,252			—		—			5,252
Commercial finance	6,464			—		—			6,464
	27,589			—		—			27,589
Revenues from consolidated VIE - RSO	—			21,987					21,987
Elimination of consolidated VIE revenues attributed to operating segments	—					(3,632		)	(3,632		)
Total Revenues	27,589			21,987		(3,632		)	45,944
COSTS AND EXPENSES:
Real estate	6,727			—		—			6,727
Financial fund management	4,234			—		—			4,234
Commercial finance	3,709			—		—			3,709
General and administrative	2,614			—		—			2,614
Gain on sale of leases and loans	(94		)	—		—			(94		)
Provision for credit losses	3,476			—		—			3,476
Depreciation and amortization	3,159			—		—			3,159
	23,825			—		—			23,825
Expenses from consolidated VIE - RSO	—			10,920		(1,289		)	9,631
Elimination of consolidated VIE expenses attributed to operating segments	—			—		(2,582		)	(2,582		)
Total expenses	23,825			10,920		(3,871		)	30,874
OPERATING INCOME	3,764			11,067		239			15,070

OTHER INCOME (EXPENSE):
Gain on sale of investment securities, net	82			—		—			82
Interest expense	(4,276		)	—		—			(4,276		)
Other income, net	696			—		(612		)	84
Other income from consolidated VIE - RSO	—			3,875		—			3,875
Elimination of consolidated VIE expenses attributed to operating segments	—			—		34			34
	(3,498		)	3,875		(578		)	(201		)
Income (loss) from continuing operations before taxes	266			14,942		(339		)	14,869
Income tax provision	151			—		1,289			1,440
Income (loss) from continuing operations	115			14,942		(1,628		)	13,429
Loss from discontinued operations, net of tax	(23		)	—		—			(23		)
Net income (loss)	92			14,942		(1,628		)	13,406
Net (loss) income attributable to noncontrolling interests	(503		)	—		1,016			513
Net income attributable to noncontrolling interests - RSO	—			—		(14,436		)	(14,436		)
Net (loss) income attributable to common shareholders	$	(411	)	$	14,942	$	(15,048	)	$	(517	)



Consolidating Statement of Operations
(in thousands, except per share data)

	For the Three Months Ended June 30, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾		Eliminations			Restated
Amounts attributable to common shareholders:
(Loss) income from continuing operations	$	(388	)	$	14,942	$	(15,048	)	$	(494	)
Discontinued operations	(23		)	—		—			(23		)
Net (loss) income	$	(411	)	$	14,942	$	(15,048	)	$	(517	)

Basic and diluted loss per share:
Continuing operations	$	(0.02	)						$	(0.03	)
Discontinued operations	—								—
Net income (loss)	$	(0.02	)						$	(0.03	)
Weighted average shares outstanding	19,741								19,741

(1) Includes RSO for the three months ended September 30, 2011



Consolidating Statement of Operations
(in thousands, except per share data)
	For the Nine Months Ended June 30, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾		Eliminations			As Restated
REVENUES:	(unaudited)			(unaudited)		(unaudited)			(unaudited)
Real estate	$	29,005		$	—	$	—		$	29,005
Financial fund management	21,194			—		—			21,194
Commercial finance	14,417			—		—			14,417
	64,616			—		—			64,616
Revenues from consolidated VIE - RSO	—			70,775					70,775
Elimination of consolidated VIE revenues attributed to operating segments	—					(10,889		)	(10,889		)
Total Revenues	64,616			70,775		(10,889		)	124,502
COSTS AND EXPENSES:
Real estate	18,276			—		—			18,276
Financial fund management	16,914			—		—			16,914
Commercial finance	11,675			—		—			11,675
General and administrative	8,627			—		—			8,627
Gain on sale of leases and loans	(357		)	—		—			(357		)
Provision for credit losses	7,801			—		—			7,801
Depreciation and amortization	7,205			—		—			7,205
	70,141			—		—			70,141
Expenses from consolidated VIE - RSO	—			37,341		(4,269		)	33,072
Elimination of consolidated VIE expenses attributed to operating segments	—			—		(8,081		)	(8,081		)
Total Expenses	70,141			37,341		(12,350		)	95,132
OPERATING (LOSS) INCOME	(5,525		)	33,434		1,461			29,370

OTHER INCOME (EXPENSE):
Gain on sale of management contract	6,520			—		—			6,520
Gain on extinguishment of servicing and repurchase liabilities	4,426			—		(4,426		)	—
Loss on sale of investment securities, net	(1,282		)	—		—			(1,282		)
Interest expense	(10,812		)	—		—			(10,812		)
Other income, net	1,985			—		(1,835		)	150
Other income from consolidated VIE - RSO	—			3,869		—			3,869
Elimination of consolidated VIE expenses attributed to operating segments	—			—		109			109
	837			3,869		(6,152		)	(1,446		)
(Loss) income from continuing operations before taxes	(4,688		)	37,303		(4,691		)	27,924
Income tax (benefit) provision	(1,781		)	—		4,269			2,488
(Loss) income from continuing operations	(2,907		)	37,303		(8,960		)	25,436
Loss from discontinued operations, net of tax	(2,176		)	—		—			(2,176		)
Net (loss) income	(5,083		)	37,303		(8,960		)	23,260
Net (loss) income attributable to noncontrolling interests	(161		)	—		1,812			1,651
Net income attributable to noncontrolling interests - RSO	—			—		(35,883		)	(35,883		)
Net (loss) income attributable to common shareholders	$	(5,244	)	$	37,303	$	(43,031	)	$	(10,972	)








Consolidating Statement of Operations - (Continued)
(in thousands, except per share data)

	For the Nine Months Ended June 30, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾		Eliminations			As Restated
Amounts attributable to common shareholders:
(Loss) income from continuing operations	$	(3,068	)	$	37,303	$	(43,031	)	$	(8,796	)
Discontinued operations	(2,176		)	—		—			(2,176		)
Net (loss) income	$	(5,244	)	$	37,303	$	(43,031	)	$	(10,972	)

Basic and diluted loss per share:
Continuing operations	$	(0.16	)						$	(0.46	)
Discontinued operations	(0.11		)						(0.11		)
Net loss	$	(0.27	)						$	(0.57	)
Weighted average shares outstanding	19,389								19,389

(1) Includes RSO for the nine months ended September 30, 2011



Consolidated Statements of Cash Flows
(unaudited, in thousands, except per share data)


	Nine Months Ended
	June 30.
	2011			2010
	(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	23,260		$	(7,849	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	10,955			10,192
Net other-than-temporary impairment losses recognized in earnings	—			364
Provision for credit losses	8,600			3,414
Equity in earnings of unconsolidated entities	(9,367		)	(4,098		)
Distributions from unconsolidated entities	5,018			3,823
(Gain) loss on sale of leases and loans	(357		)	7,705
Loss on sale of investment securities, net	1,282			451
Gain on resolution of assets	—			(2,040		)
Gain on sale of management contract	(6,520		)	—
Deferred income tax (benefit) provision	(1,667		)	29
Equity-based compensation issued	1,963			2,874
Equity-based compensation received	—			(1,118		)
Decrease in commercial finance investments	—			30,959
Loss from discontinued operations	2,176			3
Changes in operating assets and liabilities	(2,983		)	(21,723		)
Change in cash attributable to operating activity of consolidated VIE - RSO	(14,293		)	—
Net cash provided by operating activities	18,067			22,986

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(739		)	(320		)
Payments received on real estate loans and real estate	16,291			8,355
Investments in unconsolidated real estate entities	(854		)	(1,908		)
Purchase of commercial finance assets	(65,762		)	—
Principal payments received on leases and loans	18,732			—
Purchase of loans and securities by consolidated VIE - RSO	(592,226		)	—
Principal payments and proceeds from sales received by consolidated VIE - RSO	370,238			—
Proceeds from sale of management contract	9,095			—
Purchase of loans and investments	—			(1,011		)
Proceeds from sale of loans and investments	3,534			2,740
Increase in restricted cash of consolidated VIE- RSO	22,334			—
Other investing activity of consolidated VIE - RSO	81,704			—
Net cash (used in) provided by investing activities	(137,653		)	7,856




Consolidated Statements of Cash Flows - (Continued)
(unaudited, in thousands, except per share data)



	Nine Months Ended
	June 30.
	2011			2010
	(Restated)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings	66,217			81,802
Principal payments on borrowings	(45,776		)	(127,889		)
Net borrowings (repayments) of debt by consolidated VIE - RSO	50,411			—
Dividends paid	(1,675		)	(1,087		)
Dividends paid on equity of consolidated VIE - RSO	(48,877		)	—
Proceeds from issuance of common stock	1,914			58
Net proceeds from issuance of common stock by consolidated VIE - RSO	112,449			—
Other	(1,992		)	(1,824		)
Increase in restricted cash	4,947			1,068
Other financing activity of consolidated VIE - RSO	(541		)	—
Net cash provided by (used in) financing activities	137,077			(47,872		)

CASH FLOWS FROM DISCONTINUED OPERATIONS:
Operating activities	(181		)	(3		)
Net cash used in discontinued operations	(181		)	(3		)

Increase (decrease) in cash	17,310			(17,033		)
Cash at beginning of year	11,243			26,197
Cash at end of period	$	28,553		$	9,164



Consolidating Statement of Cash Flows
(in thousands, except per share data)
(unaudited)

	For the Nine Months Ended June 30, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾			Eliminations			As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(5,083	)	$	37,303		$	(8,960	)	$	23,260
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	10,867			—			88			10,955
Provision for credit losses	7,801			—			799			8,600
Equity in earnings of unconsolidated entities	(9,367		)	—			—			(9,367		)
Distributions from unconsolidated entities	5,018			—			—			5,018
Gain on sale of leases and loans	(357		)	—			—			(357		)
Loss on sale of loans and investment securities, net	1,282			—			—			1,282
Gain on sale of management contract	(6,520		)	—			—			(6,520		)
Gain on extinguishment of servicing and repurchase liabilities	(4,426		)	—			4,426			—
Deferred income tax benefit	(1,667		)	—			—			(1,667		)
Equity-based compensation issued	1,963			—			—			1,963
Equity-based compensation received	(234		)	—			234			—
Loss from discontinued operations	2,176			—			—			2,176
Changes in operating assets and liabilities	(2,983		)	—			—			(2,983		)
Change in cash attributable to operating activity of consolidated VIE -RSO	—			(15,871		)	1,578			(14,293		)
Net cash (used in) provided by operating activities	(1,530		)	21,432			(1,835		)	18,067
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(739		)	—			—			(739		)
Payments received on real estate loans and real estate	16,291			—			—			16,291
Investments in unconsolidated real estate entities	(854		)	—			—			(854		)
Purchase of commercial finance assets	(65,762		)	—			—			(65,762		)
Principal payments received on leases and loans	18,732			—			—			18,732
Purchase of loans and securities by consolidated VIE - RSO	—			(607,447		)	15,221			(592,226		)
Principal payments and proceeds from sales received by consolidated VIE - RSO	—			370,238			—			370,238
Proceeds from sale of management contract	9,095			—			—			9,095
Proceeds from sale of loans and investments	3,534			—			—			3,534
Increase in restricted cash of consolidated VIE- RSO	—			22,334			—			22,334
Other investing activity of consolidated VIE - RSO	—			81,836			(132		)	81,704
Net cash provided by (used in) investing activities	(19,703		)	(133,039		)	15,089			(137,653		)



Consolidating Statement of Cash Flows - (Continued)
(in thousands, except per share data)
(unaudited)


	For the Nine Months Ended June 30, 2011
				Restatement Adjustments
	As Previously Reported			RSO ⁽¹⁾			Eliminations			As Restated
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings	66,217			—			—			66,217
Principal payments on borrowings	(45,776		)	—			—			(45,776		)
Net borrowings (repayments) of debt by consolidated VIE - RSO	—			50,411			—			50,411
Dividends paid	(1,675		)	—			—			(1,675		)
Dividends paid on common stock by consolidated VIE - RSO	—			(50,712		)	1,835			(48,877		)
Proceeds from issuance of common stock	1,914			—			—			1,914
Net proceeds from issuance of common stock by consolidated VIE - RSO	—			112,449			—			112,449
Proceeds from issuance of LEAF preferred stock	15,221			—			(15,221		)	—
Preferred stock dividends paid by LEAF to RSO	(132		)	—			132			—
Decrease in restricted cash	4,947			—			—			4,947
Other	(1,992		)	—			—			(1,992		)
Other financing activity of consolidated VIE - RSO	—			(541		)	—			(541		)
Net cash provided by (used in) financing activities	38,724			111,607			(13,254		)	137,077
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Operating activities	(181		)	—			—			(181		)
Net cash used in discontinued operations	(181		)	—			—			(181		)

Increase in cash	17,310			—			—			17,310
Cash, beginning of year	11,243			—			—			11,243
Cash, end of period	$	28,553		$	—		$	—		$	28,553

(1) Includes RSO for the nine months September 30, 2011.

The following table sets forth the Company's operating results by quarter for the twelve months ended September 30, 2012 which includes RSO for the same periods (in thousands, except share data):



Quarterly Results for Fiscal 2012	December 31			March 31			June 30			September 30
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues	$	18,664		$	14,780		$	13,784		$	17,208
Revenues from consolidated VIE - RSO	25,211			28,726			26,262			35,669
Elimination of consolidated VIE revenues attributed to operating segments	(4,501		)	(3,510		)	(4,235		)	(4,988		)
Total Revenues	39,374			39,996			35,811			47,889
Operating income	3,985			13,478			5,810			16,238
(Loss) income from continuing operations	(239		)	11,625			46,215			15,622
Loss from discontinued operations	(20		)	(16		)	(14		)	(8		)
Net (loss) income	(259		)	11,609			46,201			15,614
Less: Net loss (income) attributable to noncontrolling interests	193			39			(45		)	36
Less: Net income attributable to noncontrolling interests - RSO	(367		)	(14,030		)	(15,945		)	(17,917		)
Net (loss) income attributable to common shareholders	(433		)	(2,382		)	30,211			(2,267		)

Basic (loss) earnings per common share:
Continuing operations	$	(0.02	)	$	(0.12	)	$	1.52		$	(0.11	)
Discontinued operations	—			—			—			—
Net (loss) income	$	(0.02	)	$	(0.12	)	$	1.52		$	(0.11	)

Diluted (loss) earnings per common share:
Continuing operations	$	(0.02	)	$	(0.12	)	$	1.44		$	(0.11	)
Discontinued operations	—			—			0.00			0.00
Net (loss) income	$	(0.02	)	$	(0.12	)	$	1.44		$	(0.11	)