NOTE 3 - CONSOLIDATING FINANCIAL INFORMATION

The following table presents the consolidating balance sheet as of September 30, 2015 (in thousands):



	RAI			RSO		Eliminations			Consolidated
ASSETS
Cash	$	18,102		$	—	$	—		$	18,102
Restricted cash	941			—		—			941
Receivables	1,020			—		—			1,020
Receivables from managed entities and related parties, net	27,562			—		(2,424		)	25,138
Investments in real estate, net	16,191			—		—			16,191
Investment securities, at fair value	18,209			—		(7,991		)	10,218
Investments in unconsolidated loan manager	32,082			—		—			32,082
Investments in unconsolidated entities	25,451			—		(7,102		)	18,349
Assets of consolidated VIE-RSO:
Cash and cash equivalents (including restricted cash)	—			128,845		—			128,845
Investments, at fair value	—			260,315		—			260,315
Loans	—			2,234,979		—			2,234,979
Investments in real estate and unconsolidated entities	—			56,038		—			56,038
Other assets-RSO	—			105,865		—			105,865
Total assets of consolidated VIE-RSO	—			2,786,042		—			2,786,042
Property and equipment, net	5,533			—		—			5,533
Deferred tax assets, net	31,632			—		(12,183		)	19,449
Other assets	10,929			—		—			10,929
Total assets	$	187,652		$	2,786,042	$	(29,700	)	$	2,943,994

LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities	$	20,429		$	—	$	—		$	20,429
Payables to managed entities and related parties	4,417			—		—			4,417
Borrowings	20,896			—		—			20,896
Liabilities of consolidated VIE-RSO:
Borrowings	—			1,880,891		349			1,881,240
Other liabilities	—			51,875		(2,424		)	49,451
Total liabilities of consolidated VIE-RSO	—			1,932,766		(2,075		)	1,930,691
Total liabilities	45,742			1,932,766		(2,075		)	1,976,433
Commitments and contingencies

Equity:
Preferred stock	—			—		—			—
Common stock	338			—		—			338
Additional paid-in capital	310,663			—		—			310,663
Accumulated deficit	(18,421		)	—		(10,255		)	(28,676		)
Treasury stock, at cost	(134,969		)	—		—			(134,969		)
Accumulated other comprehensive loss	(16,016		)	—		13,791			(2,225		)
Total stockholders’ equity	141,595			—		3,536			145,131
Noncontrolling interests	315			—		—			315
Noncontrolling interests attributable to consolidated VIE-RSO	—			853,276		(31,161		)	822,115
Total equity	141,910			853,276		(27,625		)	967,561
Total liabilities and equity	$	187,652		$	2,786,042	$	(29,700	)	$	2,943,994

The following table presents the consolidating statement of operations for the three months ended September 30, 2015 (in thousands):



	RAI			RSO			Eliminations			Consolidated
REVENUES:
Real estate	$	16,195		$	—		$	—		$	16,195
Financial fund management	4,408			—			—			4,408
Commercial finance	66			—			—			66
	20,669			—			—			20,669
Revenues from consolidated VIE-RSO	—			23,705			—			23,705
Elimination of consolidated VIE-RSO revenues attributed to operating segments	—			—			(3,697		)	(3,697		)
Total revenues	20,669			23,705			(3,697		)	40,677
COSTS AND EXPENSES:
Real estate	11,223			—			—			11,223
Financial fund management	3,369			—			—			3,369
Commercial finance	434			—			—			434
General and administrative	4,053			—			—			4,053
Provision for credit losses	(400		)	—			—			(400		)
Depreciation and amortization	504			—			—			504
	19,183			—			—			19,183
Expenses of consolidated VIE-RSO	—			15,994			—			15,994
Elimination of consolidated VIE-RSO expenses attributed to operating segments	—			—			(3,077		)	(3,077		)
Total expenses	19,183			15,994			(3,077		)	32,100
OPERATING INCOME (LOSS)	1,486			7,711			(620		)	8,577

OTHER INCOME (EXPENSE):
Impairment on investments in unconsolidated entities	(151		)	—			—			(151		)
Interest expense	(450		)	—			—			(450		)
Other income (expense), net	386			—			(438		)	(52		)
Other income (expense), net, from consolidated VIE-RSO	—			5,215			—			5,215
Total other income (expense)	(215		)	5,215			(438		)	4,562
Income (loss) from continuing operations before taxes	1,271			12,926			(1,058		)	13,139
Income tax provision (benefit)	1,355			(1,796		)	—			(441		)
Net income (loss)	(84		)	14,722			(1,058		)	13,580
Net (income) loss attributable to noncontrolling interests	(37		)	—			—			(37		)
Net (income) loss attributable to noncontrolling interests-RSO	—			(7,944		)	(6,699		)	(14,643		)
Net income (loss) attributable to common shareholders	$	(121	)	$	6,778		$	(7,757	)	$	(1,100	)

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



	RAI			RSO			Eliminations			Consolidated
REVENUES:
Real estate	$	14,289		$	—		$	—		$	14,289
Financial fund management	5,557			—			—			5,557
Commercial finance	(17		)	—			—			(17		)
	19,829			—			—			19,829
Revenues from consolidated VIE-RSO	—			25,811			—			25,811
Elimination of consolidated VIE-RSO revenues attributed to operating segments	—			—			(4,136		)	(4,136		)
Total revenues	19,829			25,811			(4,136		)	41,504
COSTS AND EXPENSES:
Real estate	9,384			—			—			9,384
Financial fund management	2,812			—			—			2,812
Commercial finance	125			—			—			125
General and administrative	2,426			—			—			2,426
Provision for credit losses	559			—			—			559
Depreciation and amortization	453			—			—			453
Total other income (expense)	15,759			—			—			15,759
Expenses of consolidated VIE-RSO	—			15,447			—			15,447
Elimination of consolidated VIE-RSO expenses attributed to operating segments	—			—			(3,502		)	(3,502		)
Total expenses	15,759			15,447			(3,502		)	27,704
OPERATING INCOME (LOSS)	4,070			10,364			(634		)	13,800

OTHER INCOME (EXPENSE):
Gain (loss) on sale of investment securities, net	69			—			—			69
Interest expense	(467		)	—			—			(467		)
Other income (expense), net	652			—			(572		)	80
Other income (expense), net, from consolidated VIE-RSO	—			3,730			—			3,730
Elimination of consolidated VIE-RSO other income, net	—			—			11			11
	254			3,730			(561		)	3,423
Income (loss) from continuing operations before taxes	4,324			14,094			(1,195		)	17,223
Income tax provision (benefit)	1,741			(237		)	—			1,504
Net income (loss)	2,583			14,331			(1,195		)	15,719
Net income (loss) attributable to noncontrolling interest	11			—			—			11
Net (income) loss attributable to noncontrolling interests-RSO	—			(7,003		)	(7,211		)	(14,214		)
Net income (loss) attributable to common shareholders	$	2,594		$	7,328		$	(8,406	)	$	1,516

The following table presents the consolidating statement of operations for the nine months ended September 30, 2015 (in thousands):



	RAI			RSO			Eliminations			Consolidated
REVENUES:
Real estate	$	54,277		$	—		$	—		$	54,277
Financial fund management	14,326			—			—			14,326
Commercial finance	66			—			—			66
	68,669			—			—			68,669
Revenues from consolidated VIE-RSO	—			72,267			—			72,267
Elimination of consolidated VIE-RSO revenues attributed to operating segments	—			—			(12,074		)	(12,074		)
Total revenues	68,669			72,267			(12,074		)	128,862
COSTS AND EXPENSES:
Real estate	34,804			—			—			34,804
Financial fund management	9,513			—			—			9,513
Commercial finance	1,471			—			—			1,471
General and administrative	11,531			—			—			11,531
Provision for credit losses	278			—			—			278
Depreciation and amortization	1,476			—			—			1,476
Total other income (expense)	59,073			—			—			59,073
Expenses of consolidated VIE-RSO	—			91,589			—			91,589
Elimination of consolidated VIE-RSO expenses attributed to operating segments	—			—			(9,813		)	(9,813		)
Total expenses	59,073			91,589			(9,813		)	140,849
OPERATING INCOME (LOSS)	9,596			(19,322		)	(2,261		)	(11,987		)

OTHER INCOME (EXPENSE):
Impairment on investment in unconsolidated entities	(4,497		)	—			—			(4,497		)
Interest expense	(1,326		)	—			—			(1,326		)
Other income (expense), net	1,389			—			(1,374		)	15
Other income (expense), net, from consolidated VIE-RSO	—			32,268			—			32,268
Elimination of consolidated VIE-RSO other income, net	—			—			15			15
	(4,434		)	32,268			(1,359		)	26,475
Income (loss) from continuing operations before taxes	5,162			12,946			(3,620		)	14,488
Income tax provision (benefit)	3,456			2,969			—			6,425
Net income (loss)	1,706			9,977			(3,620		)	8,063
Net (income) loss attributable to noncontrolling interests	(92		)	—			—			(92		)
Net (income) loss attributable to noncontrolling interests-RSO	—			(24,808		)	14,420			(10,388		)
Net income (loss) attributable to common shareholders	$	1,614		$	(14,831	)	$	10,800		$	(2,417	)

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



	RAI			RSO			Eliminations			Consolidated
REVENUES:
Real estate	$	41,012		$	—		$	—		$	41,012
Financial fund management	20,773			—			—			20,773
Commercial finance	(158		)	—			—			(158		)
	61,627			—			—			61,627
Revenues from consolidated VIE-RSO	—			74,884			—			74,884
Elimination of consolidated VIE-RSO revenues attributed to operating segments	—			—			(10,056		)	(10,056		)
Total revenues	61,627			74,884			(10,056		)	126,455
COSTS AND EXPENSES:
Real estate	27,364			—			—			27,364
Financial fund management	9,980			—			—			9,980
Commercial finance	351			—			—			351
General and administrative	8,309			—			—			8,309
Provision for credit losses	3,342			—			—			3,342
Depreciation and amortization	1,369			—			—			1,369
Total other income (expense)	50,715			—			—			50,715
Expenses of consolidated VIE-RSO	—			43,585			—			43,585
Elimination of consolidated VIE-RSO expenses attributed to operating segments	—			—			(9,374		)	(9,374		)
Total expenses	50,715			43,585			(9,374		)	84,926
OPERATING INCOME (LOSS)	10,912			31,299			(682		)	41,529

OTHER INCOME (EXPENSE):
Gain on sale of investment securities, net	439			—			—			439
Interest expense	(1,447		)	—			—			(1,447		)
Other income (expense), net	1,979			—			(1,716		)	263
Other income (expense), net, from consolidated VIE-RSO	—			17,527			—			17,527
Elimination of consolidated VIE-RSO other income, net	—			—			29			29
	971			17,527			(1,687		)	16,811
Income (loss) from continuing operations before taxes	11,883			48,826			(2,369		)	58,340
Income tax provision (benefit)	4,991			(667		)	—			4,324
Net income (loss)	6,892			49,493			(2,369		)	54,016
Net (income) loss attributable to noncontrolling interests	(33		)	—			—			(33		)
Net (income) loss attributable to noncontrolling interests-RSO	—			(12,372		)	(36,387		)	(48,759		)
Net income (loss) attributable to common shareholders	$	6,859		$	37,121		$	(38,756	)	$	5,224

The following table presents the consolidating statement of cash flows for the nine months ended September 30, 2015 (in thousands):



	RAI			RSO			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,706		$	9,977		$	(3,620	)	$	8,063
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1,536			—			—			1,536
Provision for credit losses	278			—			—			278
Unrealized (gain) loss on trading securities	(87		)	—			—			(87		)
Equity in (earnings) losses of unconsolidated entities	(7,307		)	—			2,158			(5,149		)
Distributions from unconsolidated entities	8,093			—			—			8,093
Impairment on investment in unconsolidated entities	4,497			—			—			4,497
(Gain) loss on sales of investment securities, net	(1,140		)	—			—			(1,140		)
(Gain) loss on sales of leases and loans	(19		)	—			—			(19		)
Deferred income tax provision	3,624			—			—			3,624
Equity-based compensation issued	2,593			—			—			2,593
(Gain) loss on trading securities	15			—			—			15
Trading securities purchases and sales, net	(824		)	—			—			(824		)
Changes in operating assets and liabilities	1,721			—			—			1,721
Adjustments to reconcile net income and operating cash flows to net income of consolidated VIE-RSO	—			(657		)	(97		)	(754		)
Net cash provided by (used in) operating activities	14,686			9,320			(1,559		)	22,447
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(515		)	—			—			(515		)
Principal payments on leases and loans	21			—			—			21
Investments in real estate and unconsolidated real estate entities	(5,147		)	—			—			(5,147		)
Purchase of loans and securities by consolidated VIE-RSO	—			(658,207		)	—			(658,207		)
Principal payments and proceeds from sales of loans and securities by consolidated VIE-RSO	—			524,476			—			524,476
Purchase of loans and investments	(4,457		)	—			—			(4,457		)
Proceeds from sale of loans and investments	6,070			—			—			6,070
Increase (decrease) in restricted cash of consolidated VIE-RSO	—			96,887			—			96,887
Other investing activity of consolidated VIE-RSO	—			13,690			(990		)	12,700
Net cash provided by (used) in investing activities	(4,028		)	(23,154		)	(990		)	(28,172		)



	RAI			RSO			Eliminations		Consolidated
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on borrowings	(990		)	—			990		—
Net borrowings by consolidated VIE-RSO	—			124,922			—		124,922
Dividends paid	(3,909		)	—			—		(3,909		)
Dividends paid on common stock by consolidated VIE-RSO	—			(69,433		)	1,374		(68,059		)
Proceeds from issuance of common stock	1			—			—		1
Proceeds from issuance of common stock by consolidated VIE-RSO	—			3,196			—		3,196
Repurchases of common stock	(15,032		)	—			—		(15,032		)
Repurchases of common stock by consolidated VIE-RSO	—			(15,433		)	—		(15,433		)
(Increase) decrease in restricted cash	(168		)	—			—		(168		)
Other financing activity of consolidated VIE - RSO	—			(29,418		)	185		(29,233		)
Net cash (used in) provided by financing activities	(20,098		)	13,834			2,549		(3,715		)

Decrease in cash	(9,440		)	—			—		(9,440		)
Cash, beginning of year	27,542			—			—		27,542
Cash, end of period	$	18,102		$	—		$	—	$	18,102