CONSOLIDATING FINANCIAL INFORMATION (Tables)

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidating balance sheet

The following table presents the consolidating balance sheet as of June 30, 2014 (in thousands):

	RAI			RSO		Eliminations			Consolidated
ASSETS
Cash	$	11,858		$	—	$	—		$	11,858
Restricted cash	654			—		—			654
Receivables	3,486			—		(86		)	3,400
Receivables from managed entities and related parties, net	35,146			—		(2,560		)	32,586
Investments in real estate, net	17,084			—		—			17,084
Investment securities, at fair value	28,710			—		(16,120		)	12,590
Investments in unconsolidated loan manager	38,461			—		—			38,461
Investments in unconsolidated entities	13,448			—		—			13,448
Assets of consolidated variable interest entities ("VIE") - RSO:
Cash and cash equivalents (including restricted cash)	—			313,528		—			313,528
Investments, at fair value	—			273,454		—			273,454
Loans	—			1,785,693		(558		)	1,785,135
Investments in real estate and unconsolidated entities	—			89,989		—			89,989
Other assets - RSO	—			96,085		(23		)	96,062
Total assets of consolidated VIE - RSO	—			2,558,749		(581		)	2,558,168
Property and equipment, net	5,378			—		—			5,378
Deferred tax assets, net	33,258			—		(8,651		)	24,607
Other assets	5,212			—		—			5,212
Total assets	$	192,695		$	2,558,749	$	(27,998	)	$	2,723,446
LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities	$	16,846		$	—	$	—		$	16,846
Payables to managed entities and related parties	3,631			—		(23		)	3,608
Borrowings	21,116			—		(558		)	20,558
Liabilities of consolidated VIE - RSO:
Borrowings	—			1,579,834		151			1,579,985
Other liabilities	—			56,988		(2,646		)	54,342
Total liabilities of consolidated VIE - RSO	—			1,636,822		(2,495		)	1,634,327
Total liabilities	41,593			1,636,822		(3,076		)	1,675,339
Commitments and contingencies
Equity:
Preferred stock	—			—		—			—
Common stock	304			—		—			304
Additional paid-in capital	290,947			—		—			290,947
Accumulated deficit	(19,560		)	—		(4,730		)	(24,290		)
Treasury stock, at cost	(109,906		)	—		—			(109,906		)
Accumulated other comprehensive loss	(10,989		)	—		9,732			(1,257		)
Total stockholders’ equity	150,796			—		5,002			155,798
Noncontrolling interests	306			—		—			306
Noncontrolling interest attributable to RSO	—			921,927		(29,924		)	892,003
Total equity	151,102			921,927		(24,922		)	1,048,107
	$	192,695		$	2,558,749	$	(27,998	)	$	2,723,446

Consolidating statements of operations

The following table presents the consolidating statement of operations for the three months ended June 30, 2014 (in thousands):

	RAI			RSO			Eliminations			Consolidated
REVENUES:
Real estate	$	13,448		$	—		$	—		$	13,448
Financial fund management	8,141			—			—			8,141
Commercial finance	(42		)	—			—			(42		)
	21,547			—			—			21,547
Revenues from consolidated VIE - RSO	—			34,608			—			34,608
Elimination of consolidated VIE revenues attributed to operating segments	—			—			(3,040		)	(3,040		)
Total revenues	21,547			34,608			(3,040		)	53,115
COSTS AND EXPENSES:
Real estate	9,105			—			—			9,105
Financial fund management	2,779			—			—			2,779
Commercial finance	123			—			—			123
General and administrative	2,729			—			—			2,729
Provision for credit losses	1,575			—			—			1,575
Depreciation and amortization	465			—			—			465
	16,776			—			—			16,776
Expenses of consolidated VIE - RSO	—			19,415			446			19,861
Elimination of consolidated VIE expenses attributed to operating segments	—			—			(3,053		)	(3,053		)
Total expenses	16,776			19,415			(2,607		)	33,584
OPERATING INCOME	4,771			15,193			(433		)	19,531
OTHER INCOME (EXPENSE):
Gain on sale of investment securities, net	370			—			—			370
Interest expense	(497		)	—			—			(497		)
Other income, net	590			—			(572		)	18
Other income, net, from consolidated VIE - RSO	—			2,509			—			2,509
Elimination of consolidated VIE other expense, net	—			—			11			11
	463			2,509			(561		)	2,411
Income from continuing operations before taxes	5,234			17,702			(994		)	21,942
Income tax provision	2,181			—			(446		)	1,735
Net income	3,053			17,702			(548		)	20,207
Net income attributable to noncontrolling interests	(84		)	—			—			(84		)
Net income attributable to noncontrolling interests - RSO	—			(3,025		)	(14,380		)	(17,405		)
Net income attributable to common shareholders	$	2,969		$	14,677		$	(14,928	)	$	2,718

The following table presents the consolidating statement of operations for the three months ended June 30, 2013 (in thousands):

	RAI			RSO			Eliminations			Consolidated
REVENUES:
Real estate	$	12,153		$	—		$	—		$	12,153
Financial fund management	2,445			—			—			2,445
Commercial finance	(35		)	—			—			(35		)
	14,563			—			—			14,563
Revenues from consolidated VIE - RSO	—			21,647			—			21,647
Elimination of consolidated VIE revenues attributed to operating segments	—			—			(2,725		)	(2,725		)
Total revenues	14,563			21,647			(2,725		)	33,485
COSTS AND EXPENSES:
Real estate	8,896			—			—			8,896
Financial fund management	1,694			—			—			1,694
Commercial finance	(219		)	—			—			(219		)
General and administrative	2,149			—			—			2,149
Provision for credit losses	1,647			—			—			1,647
Depreciation and amortization	489			—			—			489
	14,656			—			—			14,656
Expenses of consolidated VIE - RSO	—			13,105			(1,737		)	11,368
Elimination of consolidated VIE expenses attributed to operating segments	—			—			(2,663		)	(2,663		)
Total expenses	14,656			13,105			(4,400		)	23,361
OPERATING INCOME	(93		)	8,542			1,675			10,124
OTHER INCOME (EXPENSE):
Interest expense	(501		)	—			—			(501		)
Other income, net	640			—			(557		)	83
Elimination of consolidated VIE other expense, net	—			—			31			31
	139			—			(526		)	(387		)
Income from continuing operations before taxes	46			8,542			1,149			9,737
Income tax provision	(1,511		)	—			1,737			226
Net income	1,557			8,542			(588		)	9,511
Net loss attributable to noncontrolling interests	(26		)	—			—			(26		)
Net income attributable to noncontrolling interests - RSO	—			(1,800		)	(6,572		)	(8,372		)
Net income attributable to common shareholders	$	1,531		$	6,742		$	(7,160	)	$	1,113
Amounts attributable to common shareholders:
Income from continuing operations	$	1,531		$	6,742		$	(7,160	)	$	1,113
Discontinued operations	—			—			—			—
Net income	$	1,531		$	6,742		$	(7,160	)	$	1,113

The following table presents the consolidating statement of operations for the six months ended June 30, 2014 (in thousands):

	RAI			RSO			Eliminations			Consolidated
REVENUES:
Real estate	$	26,723		$	—		$	—		$	26,723
Financial fund management	15,216			—			—			15,216
Commercial finance	(141		)	—			—			(141		)
	41,798			—			—			41,798
Revenues from consolidated VIE - RSO	—			66,539			—			66,539
Elimination of consolidated VIE revenues attributed to operating segments	—			—			(5,920		)	(5,920		)
Total revenues	41,798			66,539			(5,920		)	102,417
COSTS AND EXPENSES:
Real estate	17,980			—			—			17,980
Financial fund management	7,168			—			—			7,168
Commercial finance	226			—			—			226
General and administrative	5,883			—			—			5,883
Provision for credit losses	2,783			—			—			2,783
Depreciation and amortization	916			—			—			916
	34,956			—			—			34,956
Expenses of consolidated VIE - RSO	—			32,555			430			32,985
Elimination of consolidated VIE expenses attributed to operating segments	—			—			(5,872		)	(5,872		)
Total expenses	34,956			32,555			(5,442		)	62,069
OPERATING INCOME	6,842			33,984			(478		)	40,348
OTHER INCOME (EXPENSE):
Other-than-temporary impairment on investments	—			—			—			—
Gain on sale of investment securities, net	370			—			—			370
Interest expense	(980		)	—			—			(980		)
Other income, net	1,327			—			(1,144		)	183
Other income, net, from consolidated VIE - RSO	—			1,178			—			1,178
Elimination of consolidated VIE other income, net	—			—			29			29
	717			1,178			(1,115		)	780
(Loss) income from continuing operations before taxes	7,559			35,162			(1,593		)	41,128
Income tax provision	3,250			—			(430		)	2,820
Net income	4,309			35,162			(1,163		)	38,308
Net income attributable to noncontrolling interests	(44		)	—			—			(44		)
Net income attributable to noncontrolling interests - RSO	—			(5,369		)	(29,187		)	(34,556		)
Net income attributable to common shareholders	$	4,265		$	29,793		$	(30,350	)	$	3,708

Consolidating statements of cash flows

The following table presents the consolidating statement of cash flows for the six months ended June 30, 2014 (in thousands):

	RAI			RSO			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	4,309		$	35,162		$	(1,163	)	$	38,308
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	992			—			—			992
Provision for credit losses	2,783			—			—			2,783
Unrealized gains on trading securities	(98		)	—			(22		)	(120		)
Equity in earnings of unconsolidated entities	(1,678		)	—			—			(1,678		)
Distributions from unconsolidated entities	3,805			—			—			3,805
Gain on sale of investment securities, net	(927		)	—			95			(832		)
Gain on sale of assets	(370		)	—			—			(370		)
Deferred income tax provision	3,250			—			—			3,250
Equity-based compensation issued	845			—			—			845
Trading securities purchases and sales, net	(3,154		)	—			—			(3,154		)
Changes in operating assets and liabilities	(12,605		)	—			—			(12,605		)
Adjustments to reconcile net income and operating cash flows to net income of consolidated VIE - RSO	—			18,683			(54		)	18,629
Net cash (used in) provided by operating activities	(2,848		)	53,845			(1,144		)	49,853
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(176		)	—			—			(176		)
Principal payments on leases and loans	(2		)	—			—			(2		)
Investments in real estate and unconsolidated real estate entities	(1,194		)	—			—			(1,194		)
Purchase of loans and securities by consolidated VIE - RSO	—			(597,139		)	—			(597,139		)
Principal payments and proceeds from sales of loans and securities by consolidated VIE - RSO	—			365,922			—			365,922
Purchase of loans and investments	(1,318		)	—			—			(1,318		)
Proceeds from sale of loans and investments	721			—			—			721
Increase in restricted cash of consolidated VIE - RSO	—			10,543			—			10,543
Other investing activity of consolidated VIE - RSO	—			11,046			(391		)	10,655
Net cash (used in) provided by investing activities	(1,969		)	(209,628		)	(391		)	(211,988		)

	RAI			RSO			Eliminations		Consolidated
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in borrowings	2,500			—			—		2,500
Principal payments on borrowings	(3,097		)	—			391		(2,706		)
Net borrowings (repayments) of debt by consolidated VIE - RSO	—			48,965			—		48,965
Dividends paid	(1,964		)	—			—		(1,964		)
Dividends paid on common stock by consolidated VIE - RSO	—			(51,457		)	1,144		(50,313		)
Proceeds from issuance of common stock	1,550			—			—		1,550
Net proceeds from issuance of common stock by consolidated VIE - RSO	—			163,319			—		163,319
Repurchases of common stock	(2,083		)	—			—		(2,083		)
Increase in restricted cash	(84		)	—			—		(84		)
Other financing activity of consolidated VIE - RSO	—			(5,044		)	—		(5,044		)
Net cash (used in) provided by financing activities	(3,178		)	155,783			1,535		154,140
Decrease in cash	(7,995		)	—			—		(7,995		)
Cash, beginning of year	19,853			—			—		19,853
Cash, end of period	$	11,858		$	—		$	—	$	11,858