PHILADELPHIA, PA--(Marketwired - Mar 4, 2015) - Resource America, Inc. ( NASDAQ : REXI )
Fourth Quarter 2014 Highlights
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Adjusted net income attributable to common shareholders of $2.1 million (see Schedule I)
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Increased gross assets under management by 17% to $20.2 billion since December 31, 2013
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Gross real estate assets under management increased 35% to $3.4 billion
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Gross financial fund management assets under management increased 14% to $16.1 billion
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Net assets under management increased 22% to $9.7 billion
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Book value per common share of $7.47
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Repurchased 239,790 shares at $9.31
Fourth Quarter 2014 Results
Resource America, Inc. ( NASDAQ : REXI ) (the "Company") reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $2.1 million, or $0.09 per common share-diluted, and $12.1 million, or $0.54 per common share-diluted, for the three months and year ended December 31, 2014, respectively, as compared to adjusted net income attributable to common shareholders of $3.5 million, or $0.16 per common share-diluted, and $11.8 million, or $0.54 per common share-diluted, for the three months and year ended December 31, 2013, respectively. A reconciliation of the Company's reported GAAP net income attributable to common shareholders to adjusted net income attributable to common shareholders, a non-GAAP measure, is included as Schedule I to this release.
The Company reported GAAP net income attributable to common shareholders of $1.7 million, or $0.08 per common share-diluted, and $7.0 million, or $0.31 per common share-diluted, for the three months and year ended December 31, 2014, respectively, as compared to GAAP net income attributable to common shareholders of $1.4 million, or $0.06 per common share-diluted, and $6.4 million, or $0.29 per common share-diluted, for the three months and year ended December 31, 2013.
Assets Under Management
The following table details the Company's assets under management by operating segment which, in gross, increased by $2.9 billion (17%) from December 31, 2013 to 2014 (in billions):
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| December 31, | |||||
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| 2014 |
| 2013 | |||
| Financial fund management | $ | 16.1 |
| $ | 14.2 | |
| Real estate |
| 3.4 |
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| 2.5 | |
| Commercial finance |
| 0.7 |
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| 0.6 | |
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| $ | 20.2 |
| $ | 17.3 | |
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| Net assets under management (1) | $ | 9.7 |
| $ | 7.9 |
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| (1) | Net assets under management represents the proportionate share of assets managed by the Company after reflecting joint venture arrangements. |
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A description of how the Company calculates assets under management is set forth in Item 1 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
Highlights for the Fourth Quarter and Year Ended December 31, 2014 and Recent Developments
REAL ESTATE ASSET MANAGEMENT:
Equity Asset Management
Resource Real Estate Opportunity REIT, Inc. ("Opportunity REIT I"), a public non-traded real estate investment trust ("REIT") managed by the Company which specializes in acquiring and managing distressed real estate assets, had the following highlights:
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Increased total assets to $978.4 million at December 31, 2014, an increase of $299.8 million, or 44%, from $678.6 million at December 31, 2013.
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Acquired $19.9 million and $427.0 million of multifamily assets and placed financing of $57.3 million and $347.8 million during the three months and year ended December 31, 2014. In addition, disposed of $30.1 million of multifamily assets during the year ended December 31, 2014.
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In October 2014, the Board of Directors of Opportunity REIT I authorized a 50% increase to the annual distribution rate to 6% from 4%.
Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II"), a public non-traded real estate investment trust ("REIT") managed by the Company, commenced its initial public offering in early 2014. Opportunity REIT II is offering up to $1.0 billion in common stock and specializes in acquiring multifamily rental properties and selected loans. Opportunity REIT II had the following highlights:
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Raised $47.2 million as of December 31, 2014 and $90.4 million through March 3, 2015.
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Acquired $54.3 million and $67.0 million of multifamily assets and placed financing of $31.1 million and $38.5 during the three months and year ended December 31, 2014.
Debt Asset Management
Resource Capital Corp. ("RSO"), a publicly-traded REIT managed by the Company which focuses on commercial real estate assets, had the following highlights:
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Originated $302.3 million and $777.3 million in new commercial real estate loans during the three months and year ended December 31, 2014.
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During the three months and year ended December 31, 2014, raised $25.5 million and $202.7 million in equity capital through its DRIP and preferred equity programs.
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In October 2014, RSO's Board of Directors authorized RSO to repurchase up to $50.0 million of its outstanding common stock.
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In January 2015, completed a $100.0 million public offering of its 8.00% convertible senior notes due 2020.
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In February 2015, completed a $346.2 million commercial real estate securitization that issued $282.1 million of floating-rate notes at a weighted average coupon of LIBOR plus 1.90%.
The following additional highlight contributed to our real estate asset management operations:
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The Company's real estate operating segment increased its gross assets under management at December 31, 2014 to $3.4 billion, an increase of $865.0 million, or 35%, from December 31, 2013.
FINANCIAL FUND MANAGEMENT:
Credit Asset Management
CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XIX, Ltd. (issuing notes with a par value of $500.0 million) and CVC Cordatus Loan Fund IV Limited (issuing notes with a par of EUR400.0 million) during the quarter. In February 2015, CCP closed Apidos CLO XX, Ltd. (issuing notes with a par value of $500.0 million). Since creating this joint venture in April 2012, CCP has closed 13 collateralized loan obligation issuers (issuing notes with a total par value of $6.8 billion) and expects to receive approximately $31.8 million in fees on an annual run rate basis. The Company has a 33% interest in this joint venture.
The following additional highlights contributed to our financial fund asset management operations:
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The Company's financial fund management operating segment increased its gross assets under management at December 31, 2014 to $16.1 billion, an increase of $1.9 billion, or 14%, from December 31, 2013.
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Financial fund management revenues increased 68% and 44%, to $7.6 million and $28.4 million, for the three months and year ended December 31, 2014, respectively, as compared to $4.5 million and $19.8 million for the three months and year ended December 31, 2013, respectively.
CORPORATE/OTHER:
Share Repurchases
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In September 2014, the Company's Board of Directors authorized the Company to repurchase up to an additional 1.5 million shares of its outstanding common stock.
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The Company repurchased 239,790 of its shares during the fourth quarter ended December 31, 2014 at an average price of $9.31 per share.
Dividends
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The Company's Board of Directors authorized a cash dividend of $0.06 per share on the Company's common stock which was paid on January 30, 2015 to holders of record as of the close of business on January 16, 2015.
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RSO's Board of Directors declared a cash dividend of $0.20 per common share for its three months ended December 31, 2014.
Resource America, Inc. is a specialized asset management company that uses industry specific expertise to evaluate, originate, service and manage investment opportunities for its own account, for its joint ventures, and for outside investors in the real estate, financial fund management and commercial finance sectors.
For more information, please visit our website at www.resourceamerica.com or contact investor relations at pkamdar@resourceamerica.com .
Statements made in this release include forward-looking statements, which involve substantial risks and uncertainties. The Company's actual results, performance or achievements could differ materially from those expressed or implied in this release and its other reports filed with the Securities and Exchange Commission, or SEC. For information pertaining to risks relating to these forward-looking statements, reference is made to the section "Risk Factors" contained in Item 1A of the Company's Annual Report on Form 10-K and in other of its public filings with the SEC. The Company undertakes no obligation to update or revise any forward-looking statements to reflect new or changing information or events except as may be required by law.
A registration statement relating to securities offered by Opportunity REIT II was declared effective by the SEC on February 6, 2014. A written prospectus relating to these securities may be obtained by contacting Resource Securities, Inc., 1845 Walnut Street, 18th Floor, Philadelphia, PA 19103.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The remainder of this release contains the Company's unaudited consolidated balance sheets, consolidated statements of operations, consolidating statements of operations and reconciliation of GAAP net income attributable to common shareholders to adjusted net income attributable to common shareholders.
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| RESOURCE AMERICA, INC |
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| CONSOLIDATED BALANCE SHEETS |
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| (in thousands, except share data) |
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| (unaudited) |
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| December 31, |
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| 2014 |
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| 2013 |
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| ASSETS |
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| Cash | $ | 28,031 |
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| $ | 19,853 |
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| Restricted cash |
| 725 |
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| 571 |
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| Receivables |
| 636 |
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| 541 |
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| Loans and receivables from managed entities and related parties, net |
| 30,303 |
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| 30,923 |
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| Investments in real estate, net |
| 17,097 |
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| 17,696 |
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| Investment securities, at fair value |
| 9,540 |
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| 7,839 |
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| Investments in unconsolidated loan manager |
| 39,655 |
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| 37,821 |
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| Investments in unconsolidated entities |
| 13,089 |
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| 14,342 |
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| Assets of consolidated variable interest entity ("VIE") - RSO |
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| Cash and cash equivalents (including restricted cash) |
| 202,043 |
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| 325,579 |
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| Investments, at fair value |
| 296,506 |
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| 221,395 |
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| Loans |
| 2,038,435 |
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| 1,397,458 |
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| Investments in real estate and unconsolidated entities |
| 60,007 |
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| 129,562 |
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| Other assets |
| 131,481 |
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| 76,467 |
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| Total assets of consolidated VIE - RSO |
| 2,728,472 |
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| 2,150,461 |
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| Property and equipment, net |
| 5,063 |
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| 5,844 |
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| Deferred tax assets, net |
| 23,304 |
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| 27,769 |
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| Other assets |
| 5,416 |
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| 4,791 |
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| Total assets | $ | 2,901,331 |
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| $ | 2,318,451 |
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| LIABILITIES AND EQUITY |
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| Liabilities: |
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| Accrued expenses and other liabilities | $ | 22,279 |
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| $ | 22,134 |
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| Payables to managed entities and related parties |
| 3,504 |
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| 3,110 |
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| Borrowings |
| 20,412 |
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| 20,619 |
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| Liabilities of consolidated VIE - RSO |
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| Borrowings |
| 1,717,132 |
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| 1,320,015 |
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| Other liabilities |
| 57,561 |
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| 55,247 |
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| Total liabilities of consolidated VIE - RSO |
| 1,774,693 |
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| 1,375,262 |
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| Total liabilities |
| 1,820,888 |
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| 1,421,125 |
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| Commitments and contingencies |
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| Equity: |
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| Preferred stock, $1.00 par value, 1,000,000 shares authorized; none outstanding |
| - |
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| - |
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| Common stock, $.01 par value, 49,000,000 shares authorized;34,489,568 and 30,378,339 shares issued (including nonvested restricted stock of 833,082 and 400,194), respectively |
| 335 |
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| 299 |
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| Additional paid-in capital |
| 308,134 |
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| 288,555 |
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| Accumulated deficit |
| (23,663 | ) |
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| (26,025 | ) | ||
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| Treasury stock, at cost; 11,764,417 and 10,434,436 shares, respectively |
| (120,182 | ) |
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| (107,874 | ) | ||
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| Accumulated other comprehensive loss |
| (1,030 | ) |
|
| (1,231 | ) | ||
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| Total stockholders' equity |
| 163,594 |
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|
| 153,724 |
| |
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| Noncontrolling interests |
| 306 |
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| 238 |
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| Noncontrolling interests attributable to RSO |
| 916,543 |
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| 743,364 |
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| Total equity |
| 1,080,443 |
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| 897,326 |
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| $ | 2,901,331 |
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| $ | 2,318,451 |
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| RESOURCE AMERICA, INC. |
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| CONSOLIDATED STATEMENTS OF OPERATIONS |
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| (in thousands, except per share data) |
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| (unaudited) |
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| Three Months Ended |
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| Years Ended |
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| December 31, |
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| December 31, |
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| 2014 |
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| 2013 |
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| 2014 |
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| 2013 |
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| REVENUES: |
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| Real estate (includes revenues of $2,721, $2,806, $10,349 and $12,600 related to RSO) |
| $ | 13,849 |
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| $ | 17,700 |
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| $ | 54,861 |
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| $ | 57,143 |
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| Financial fund management (includes revenues of $498, $400, $2,983 and $1,120 related to RSO) |
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| 7,627 |
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| 4,539 |
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| 28,400 |
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| 19,773 |
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| Commercial finance (no revenues related to RSO) |
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| (6 | ) |
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| (98 | ) |
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| (164 | ) |
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| (341 | ) | |
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| 21,470 |
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| 22,141 |
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| 83,097 |
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| 76,575 |
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| Revenues from consolidated VIE - RSO |
|
| 24,563 |
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| 4,232 |
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| 99,446 |
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| 82,983 |
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| Elimination of consolidated VIE - RSO revenues attributed to operating segments |
|
| (3,208 | ) |
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| (3,226 | ) |
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| (13,264 | ) |
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| (13,834 | ) | |
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| Total revenues |
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| 42,825 |
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| 23,147 |
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| 169,279 |
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| 145,724 |
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| COSTS AND EXPENSES: |
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| Real estate |
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| 10,047 |
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| 11,098 |
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| 37,411 |
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| 40,612 |
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| Financial fund management |
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| 4,844 |
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| 2,386 |
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| 14,824 |
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| 10,155 |
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| Commercial finance |
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| 396 |
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| 155 |
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| 979 |
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| 56 |
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| General and administrative |
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| 3,041 |
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| 3,461 |
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| 11,118 |
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| 10,268 |
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| Provision for credit losses |
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| (284 | ) |
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| 472 |
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| 3,058 |
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| 4,265 |
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| Depreciation and amortization |
|
| 450 |
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|
| 618 |
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| 1,819 |
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| 1,936 |
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| 18,494 |
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| 18,190 |
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| 69,209 |
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| 67,292 |
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| Expenses from consolidated VIE - RSO |
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| 21,411 |
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| 17,889 |
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| 64,995 |
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| 60,999 |
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| Elimination of consolidated VIE expenses attributed to operating segments |
|
| (3,227 | ) |
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| (3,037 | ) |
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| (12,601 | ) |
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| (13,215 | ) | |
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| Total expenses |
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| 36,678 |
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| 33,042 |
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| 121,603 |
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| 115,076 |
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| OPERATING INCOME (LOSS) |
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| 6,147 |
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| (9,895 | ) |
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| 47,676 |
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| 30,648 |
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| OTHER INCOME (EXPENSE): |
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| Gain on sale of investment securities, net |
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| 6 |
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| - |
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| 445 |
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| - |
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| Other-than-temporary impairment on investments |
|
| - |
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| - |
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| - |
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| (214 | ) | |
| Interest expense |
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| (458 | ) |
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| (511 | ) |
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| (1,905 | ) |
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| (2,036 | ) | |
| Other income, net |
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| (20 | ) |
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| 175 |
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| 243 |
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| 575 |
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| Other income, net, from consolidated VIE - RSO |
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| 7,978 |
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| 9,561 |
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| 25,505 |
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| 23,428 |
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| Elimination of consolidated VIE other income attributed to operating segments |
|
| 11 |
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| 20 |
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| 51 |
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| 244 |
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| 7,517 |
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| 9,245 |
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| 24,339 |
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| 21,997 |
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| Income (loss) from continuing operations before taxes |
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| 13,664 |
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| (650 | ) |
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| 72,015 |
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| 52,645 |
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| Income tax provision |
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| 862 |
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| 2,053 |
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| 5,853 |
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| 1,657 |
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| Income tax benefit - RSO |
|
| (1,545 | ) |
|
| (5,262 | ) |
|
| (2,212 | ) |
|
| (1,041 | ) | |
| Income from continuing operations |
|
| 14,347 |
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| 2,559 |
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| 68,374 |
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| 52,029 |
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| Loss from discontinued operations, net of tax |
|
| - |
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| - |
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| - |
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| (2 | ) | |
| Net income |
|
| 14,347 |
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|
| 2,559 |
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| 68,374 |
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| 52,027 |
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| Net (income) loss attributable to noncontrolling interest |
|
| (56 | ) |
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| 3 |
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|
| (89 | ) |
|
| (20 | ) | |
| Net income attributable to noncontrolling interests of consolidated VIE - RSO |
|
| (12,547 | ) |
|
| (1,187 | ) |
|
| (61,317 | ) |
|
| (45,581 | ) | |
| Net income attributable to common shareholders |
| $ | 1,744 |
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| $ | 1,375 |
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| $ | 6,968 |
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| $ | 6,426 |
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| Amounts attributable to common shareholders: |
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| Income from continuing operations |
| $ | 1,744 |
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| $ | 1,375 |
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| $ | 6,968 |
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| $ | 6,428 |
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| Discontinued operations |
|
| - |
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|
| - |
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|
| - |
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| (2 | ) | |
| Net income |
| $ | 1,744 |
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| $ | 1,375 |
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| $ | 6,968 |
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| $ | 6,426 |
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| RESOURCE AMERICA, INC. |
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| CONSOLIDATED STATEMENTS OF OPERATIONS - (Continued) |
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| Three Months Ended |
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| Years Ended |
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| December 31, |
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| December 31, |
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| 2014 |
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| 2013 |
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| 2014 |
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| 2013 |
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| Basic earnings per share: |
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| Continuing operations |
| $ | 0.08 |
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| $ | 0.07 |
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| $ | 0.33 |
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| $ | 0.32 |
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| Discontinued operations |
|
| - |
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| - |
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| - |
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| - |
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| Net income |
| $ | 0.08 |
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| $ | 0.07 |
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| $ | 0.33 |
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| $ | 0.32 |
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| Weighted average shares outstanding |
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| 22,817 |
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| 20,104 |
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| 21,148 |
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| 20,217 |
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| Diluted earnings per share: |
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| |
| Continuing operations |
| $ | 0.08 |
|
| $ | 0.06 |
|
| $ | 0.31 |
|
| $ | 0.29 |
| |
| Discontinued operations |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| |
| Net income |
| $ | 0.08 |
|
| $ | 0.06 |
|
| $ | 0.31 |
|
| $ | 0.29 |
| |
| Weighted average shares outstanding |
|
| 23,094 |
|
|
| 21,828 |
|
|
| 22,371 |
|
|
| 21,905 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| RESOURCE AMERICA, INC. |
| |||||||||||||||
| CONSOLIDATING STATEMENTS OF OPERATIONS |
| |||||||||||||||
| (in thousands) |
| |||||||||||||||
| (unaudited) |
| |||||||||||||||
|
|
| |||||||||||||||
| The following table presents the consolidating statement of operations for the fourth quarter ended December 31, 2014: |
| |||||||||||||||
|
|
| |||||||||||||||
|
| RAI |
|
| RSO |
|
| Eliminations |
|
| Consolidated |
| |||||
| REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Real estate | $ | 13,849 |
|
| $ | - |
|
| $ | - |
|
| $ | 13,849 |
| |
| Financial fund management |
| 7,627 |
|
|
| - |
|
|
| - |
|
|
| 7,627 |
| |
| Commercial finance |
| (6 | ) |
|
| - |
|
|
| - |
|
|
| (6 | ) | |
|
|
| 21,470 |
|
|
| - |
|
|
| - |
|
|
| 21,470 |
| |
| Revenues from consolidated VIE - RSO |
| - |
|
|
| 24,563 |
|
|
| - |
|
|
| 24,563 |
| |
| Elimination of consolidated VIE revenues attributed to operating segments |
| - |
|
|
| - |
|
|
| (3,208 | ) |
|
| (3,208 | ) | |
|
| Total revenues |
| 21,470 |
|
|
| 24,563 |
|
|
| (3,208 | ) |
|
| 42,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Real estate |
| 10,047 |
|
|
| - |
|
|
| - |
|
|
| 10,047 |
| |
| Financial fund management |
| 4,844 |
|
|
| - |
|
|
| - |
|
|
| 4,844 |
| |
| Commercial finance |
| 396 |
|
|
| - |
|
|
| - |
|
|
| 396 |
| |
| General and administrative |
| 3,041 |
|
|
| - |
|
|
| - |
|
|
| 3,041 |
| |
| Provision for credit losses |
| (284 | ) |
|
| - |
|
|
| - |
|
|
| (284 | ) | |
| Depreciation and amortization |
| 450 |
|
|
| - |
|
|
| - |
|
|
| 450 |
| |
|
|
| 18,494 |
|
|
| - |
|
|
| - |
|
|
| 18,494 |
| |
| Expenses from consolidated VIE - RSO |
| - |
|
|
| 19,866 |
|
|
| 1,545 |
|
|
| 21,411 |
| |
| Elimination of consolidated VIE expenses attributed to operating segments |
| - |
|
|
| - |
|
|
| (3,227 | ) |
|
| (3,227 | ) | |
|
| Total expenses |
| 18,494 |
|
|
| 19,866 |
|
|
| (1,682 | ) |
|
| 36,678 |
|
| OPERATING INCOME |
| 2,976 |
|
|
| 4,697 |
|
|
| (1,526 | ) |
|
| 6,147 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Gain on sale of investment securities, net |
| 6 |
|
|
| - |
|
|
| - |
|
|
| 6 |
| |
| Interest expense |
| (458 | ) |
|
| - |
|
|
| - |
|
|
| (458 | ) | |
| Other income, net |
| 553 |
|
|
| - |
|
|
| (573 | ) |
|
| (20 | ) | |
| Other income, net, from consolidated VIE - RSO |
| - |
|
|
| 7,978 |
|
|
| - |
|
|
| 7,978 |
| |
| Elimination of consolidated VIE other income, net |
| - |
|
|
| - |
|
|
| 11 |
|
|
| 11 |
| |
|
|
| 101 |
|
|
| |||||||||||
| RESOURCE AMERICA, INC. | |||||||||||||||
| CONSOLIDATING STATEMENTS OF OPERATIONS | |||||||||||||||
| (in thousands) | |||||||||||||||
| (unaudited) | |||||||||||||||
| The following table presents the consolidating statement of operations for the fourth quarter ended December 31, 2013: | |||||||||||||||
| RAI | RSO | Eliminations | Consolidated | ||||||||||||
| REVENUES: | |||||||||||||||
| Real estate | $ | 17,700 | $ | - | $ | - | $ | 17,700 | |||||||
| Financial fund management | 4,539 | - | - | 4,539 | |||||||||||
| Commercial finance | (98 | ) | - | - | (98 | ) | |||||||||
| 22,141 | - | - | 22,141 | ||||||||||||
| Revenues from consolidated VIE - RSO | - | 4,232 | - | 4,232 | |||||||||||
| Elimination of consolidated VIE revenues attributed to operating segments | - | - | (3,226 | ) | (3,226 | ) | |||||||||
| Total revenues | 22,141 | 4,232 | (3,226 | ) | 23,147 | ||||||||||
| COSTS AND EXPENSES: | |||||||||||||||
| Real estate | 11,098 | - | - | 11,098 | |||||||||||
| Financial fund management | 2,386 | - | - | 2,386 | |||||||||||
| Commercial finance | 155 | - | - | 155 | |||||||||||
| General and administrative | 3,461 | - | - | 3,461 | |||||||||||
| Provision for credit losses | 472 | - | - | 472 | |||||||||||
| Depreciation and amortization | 618 | - | - | 618 | |||||||||||
| 18,190 | - | - | 18,190 | ||||||||||||
| Expenses from consolidated VIE - RSO | - | 12,627 | 5,262 | 17,889 | |||||||||||
| Elimination of consolidated VIE expenses attributed to operating segments | - | - | (3,037 | ) | (3,037 | ) | |||||||||
| Total expenses | 18,190 | 12,627 | 2,225 | 33,042 | |||||||||||
| OPERATING INCOME (LOSS) | 3,951 | (8,395 | ) | (5,451 | ) | (9,895 | ) | ||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||
| Interest expense | (511 | ) | - | - | (511 | ) | |||||||||
| Other income, net | 747 | - | (572 | ) | 175 | ||||||||||
| Other income, net, from consolidated VIE - RSO | - | 9,561 | - | 9,561 | |||||||||||
| Elimination of consolidated VIE other income, net | - | - | 20 | 20 | |||||||||||
| 236 | 9,561 | (552 | ) | 9,245 | |||||||||||
| Income before taxes | 4,187 | 1,166 | (6,003 | ) | (650 | ) | |||||||||
| Income tax provision (benefit) | 2,053 | - | (5,262 | ) | (3,209 | ) | |||||||||
| Net income | 2,134 | 1,166 | (741 | ) | 2,559 | ||||||||||
| Net loss attributable to noncontrolling interests | 3 | - | - | 3 | |||||||||||
| Net income attributable to noncontrolling interests - RSO | - | (2,114 | ) | 927 | (1,187 | ) | |||||||||
| Net income (loss) attributable to common shareholders | $ | 2,137 | $ | (948 | ) | $ | 186 | $ | 1,375 | ||||||
| RESOURCE AMERICA, INC. | ||||||||||||||||
| CONSOLIDATING STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| The following table presents the consolidating statement of operations for the year ended December 31, 2014: | ||||||||||||||||
| RAI | RSO | Eliminations | Consolidated | |||||||||||||
| REVENUES: | ||||||||||||||||
| Real estate | $ | 54,861 | $ | - | $ | - | $ | 54,861 | ||||||||
| Financial fund management | 28,400 | - | - | 28,400 | ||||||||||||
| Commercial finance | (164 | ) | - | - | (164 | ) | ||||||||||
| 83,097 | - | - | 83,097 | |||||||||||||
| Revenues from consolidated VIE - RSO | - | 99,446 | - | 99,446 | ||||||||||||
| Elimination of consolidated VIE - RSO revenues attributed to operating segments | - | - | (13,264 | ) | (13,264 | ) | ||||||||||
| Total revenues | 83,097 | 99,446 | (13,264 | ) | 169,279 | |||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||
| Real estate | 37,411 | - | - | 37,411 | ||||||||||||
| Financial fund management | 14,824 | - | - | 14,824 | ||||||||||||
| Commercial finance | 979 | - | - | 979 | ||||||||||||
| General and administrative | 11,118 | - | - | 11,118 | ||||||||||||
| Provision for credit losses | 3,058 | - | - | 3,058 | ||||||||||||
| Depreciation and amortization | 1,819 | - | - | 1,819 | ||||||||||||
| 69,209 | - | - | 69,209 | |||||||||||||
| Expenses from consolidated VIE - RSO | - | 62,783 | 2,212 | 64,995 | ||||||||||||
| Elimination of consolidated VIE - RSO expenses attributed to operating segments | - | - | (12,601 | ) | (12,601 | ) | ||||||||||
| Total expenses | 69,209 | 62,783 | (10,389 | ) | 121,603 | |||||||||||
| OPERATING INCOME | 13,888 | 36,663 | (2,875 | ) | 47,676 | |||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||
| Gain on sale of investment securities, net | 445 | - | - | 445 | ||||||||||||
| Interest expense | (1,905 | ) | - | - | (1,905 | ) | ||||||||||
| Other income, net | 2,532 | - | (2,289 | ) | 243 | |||||||||||
| Other income, net, from consolidated VIE - RSO | - | 25,505 | - | 25,505 | ||||||||||||
| Elimination of consolidated VIE -RSO other income, net | - | - | 51 | 51 | ||||||||||||
| 1,072 | 25,505 | (2,238 | ) | 24,339 | ||||||||||||
| Income from operations before taxes | 14,960 | 62,168 | (5,113 | ) | 72,015 | |||||||||||
| Income tax provision | 5,853 | - | (2,212 | ) | 3,641 | |||||||||||
| Net income | 9,107 | 62,168 | (2,901 | ) | 68,374 | |||||||||||
| Net income attributable to noncontrolling interests | (89 | ) | - | - | (89 | ) | ||||||||||
| Net income attributable to noncontrolling interests - RSO | - | (18,141 | ) | (43,176 | ) | (61,317 | ) | |||||||||
| Net income attributable to common shareholders | $ | 9,018 | $ | 44,027 | $ | (46,077 | ) | $ | 6,968 | |||||||
| RESOURCE AMERICA, INC. | |||||||||||||||
| CONSOLIDATING STATEMENTS OF OPERATIONS | |||||||||||||||
| (in thousands) | |||||||||||||||
| (unaudited) | |||||||||||||||
| The following table presents the consolidating statement of operations for the year ended December 31, 2013: | |||||||||||||||
| RAI | RSO | Eliminations | Consolidated | ||||||||||||
| REVENUES: | |||||||||||||||
| Real estate | $ | 57,143 | $ | - | $ | - | $ | 57,143 | |||||||
| Financial fund management | 19,773 | - | - | 19,773 | |||||||||||
| Commercial finance | (341 | ) | - | - | (341 | ) | |||||||||
| 76,575 | - | - | 76,575 | ||||||||||||
| Revenues from consolidated VIE - RSO | - | 82,983 | - | 82,983 | |||||||||||
| Elimination of consolidated VIE revenues attributed to operating segments | - | - | (13,834 | ) | (13,834 | ) | |||||||||
| Total revenues | 76,575 | 82,983 | (13,834 | ) | 145,724 | ||||||||||
| COSTS AND EXPENSES: | |||||||||||||||
| Real estate | 40,612 | - | - | 40,612 | |||||||||||
| Financial fund management | 10,155 | - | - | 10,155 | |||||||||||
| Commercial finance | 56 | - | - | 56 | |||||||||||
| General and administrative | 10,268 | - | - | 10,268 | |||||||||||
| Provision for credit losses | 4,265 | - | - | 4,265 | |||||||||||
| Depreciation and amortization | 1,936 | - | - | 1,936 | |||||||||||
| 67,292 | - | - | 67,292 | ||||||||||||
| Expenses from consolidated VIE - RSO | - | 59,958 | 1,041 | 60,999 | |||||||||||
| Elimination of consolidated VIE expenses attributed to operating segments | - | - | (13,215 | ) | (13,215 | ) | |||||||||
| Total expenses | 67,292 | 59,958 | (12,174 | ) | 115,076 | ||||||||||
| OPERATING INCOME | 9,283 | 23,025 | (1,660 | ) | 30,648 | ||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||
| Other-than-temporary impairment on investments | (214 | ) | - | - | (214 | ) | |||||||||
| Interest expense | (2,036 | ) | - | - | (2,036 | ) | |||||||||
| Other income, net | 2,816 | - | (2,241 | ) | 575 | ||||||||||
| Other income, net, from consolidated VIE - RSO | - | 23,428 | - | 23,428 | |||||||||||
| Elimination of consolidated VIE other income, net | - | - | 244 | 244 | |||||||||||
| 566 | 23,428 | (1,997 | ) | 21,997 | |||||||||||
| Income from continuing operations before taxes | 9,849 | 46,453 | (3,657 | ) | 52,645 | ||||||||||
| Income tax provision | 1,657 | - | (1,041 | ) | 616 | ||||||||||
| Income from continuing operations | 8,192 | 46,453 | (2,616 | ) | 52,029 | ||||||||||
| Loss from discontinued operations, net of tax | (2 | ) | - | - | (2 | ) | |||||||||
| Net income | 8,190 | 46,453 | (2,616 | ) | 52,027 | ||||||||||
| Net income attributable to noncontrolling interests | (20 | ) | - | - | (20 | ) | |||||||||
| Net income attributable to noncontrolling interests - RSO | - | (7,221 | ) | (38,360 | ) | (45,581 | ) | ||||||||
| Net income attributable to common shareholders | $ | 8,170 | $ | 39,232 | $ | (40,976 | ) | $ | 6,426 | ||||||
Schedule I
| RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO | ||||||||||||||
| ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (1) | ||||||||||||||
| (in thousands, except per share data) | ||||||||||||||
| (unaudited) | ||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||
| Net income attributable to common shareholders - GAAP | $ | 1,744 | $ | 1,375 | $ | 6,968 | $ | 6,426 | ||||||
| Adjustments, net of tax: | ||||||||||||||
| Loss, net of eliminations, attributable to consolidation of RSO | 415 | 762 | 2,050 | 1,744 | ||||||||||
| Loss attributable to commercial finance | 81 | 464 | 2,661 | 4,430 | ||||||||||
| Deferred tax (benefit) provision | (105 | ) | 887 | 380 | (805 | ) | ||||||||
| Adjusted net income attributable to common shareholders | $ | 2,135 | $ | 3,488 | $ | 12,059 | $ | 11,795 | ||||||
| Adjusted weighted average diluted shares outstanding | 23,094 | 21,828 | 22,371 | 21,905 | ||||||||||
| Adjusted net income attributable to common shareholders per common per share-diluted | $ | 0.09 | $ | 0.16 | $ | 0.54 | $ | 0.54 | ||||||
| (1) | Adjusted net income attributable to common shareholders presents the Company's operations prior to the consolidation of RSO and without the effect of its commercial finance operations and deferred tax (benefit) provision. The Company believes that this provides useful information to investors since it allows investors to evaluate the Company's progress in both its real estate and financial fund management segments for the three months and year ended December 31, 2014 and 2013 separately from its commercial finance operations, RSO and deferred tax (benefit) provision. Adjusted net income attributable to common shareholders should not be considered as an alternative to net income attributable to common shareholders (computed in accordance with GAAP). Instead, adjusted net income attributable to common shareholders should be reviewed in connection with net income attributable to common shareholders in the Company's consolidated financial statements, to help analyze how the Company's business is performing. |