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Form 8-K RESOURCE AMERICA, INC. For: Nov 05

November 6, 2014 6:02 AM EST




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November�5, 2014

Resource America, Inc.
(Exact name of registrant as specified in its charter)
Delaware
0-4408
72-0654145
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
One Crescent Drive, Suite 203,
Navy Yard Corporate Center
Philadelphia, PA
19112
(Address of principal executive
offices)
(Zip Code)

Registrant's telephone number, including area code: 215-546-5005

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02 ����Results of Operations and Financial Condition

On November�5, 2014, Resource America, Inc. (the "Company") issued a press release regarding its operating results for the three and nine months ended September�30, 2014. A copy of this press release is furnished with this report as an exhibit. The information in this Current Report, including the exhibit hereto, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.


Item 9.01 ����Financial Statements and Exhibits
(d)
The exhibit furnished as part of this report is identified in the Exhibit Index immediately following the signature page of this report. Such Exhibit Index is incorporated herein by this reference.




SIGNATURE(S)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Resource America, Inc.
Date:
November�5, 2014
By:
/s/ Thomas C. Elliott
Thomas C. Elliott
Senior Vice President and Chief Financial Officer











Exhibit Index
Exhibit No.
Description
Ex 99.1
Press Release








Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT:
THOMAS C. ELLIOTT
CHIEF FINANCIAL OFFICER
RESOURCE AMERICA, INC.
ONE CRESCENT DRIVE, SUITE 203
PHILADELPHIA, PA 19112
(215) 546-5005; (215) 640-6357 (fax)

RESOURCE AMERICA, INC.
REPORTS OPERATING RESULTS
FOR THE THIRD QUARTER ENDED SEPTEMBER�30, 2014

Philadelphia, PA - November�5, 2014 - Resource America, Inc. (NASDAQ: REXI)

Third Quarter 2014 Highlights
"Adjusted net income attributable to common shareholders of $2.8 million (see Schedule I)
"Increased gross assets under management by 17% to $19.4 billion since September�30, 2013
Gross real estate assets under management increased 43% to $3.1 billion
Gross financial fund management assets under management increased 13% to $15.7 billion
Net assets under management increased 25% to $9.2 billion
"Increased cash dividend by 20% to $0.06 from $0.05
Third Quarter 2014 Results
Resource America, Inc. (NASDAQ: REXI) (the "Company") reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $2.8 million, or $0.13 per common share-diluted, and $9.7 million, or $0.44 per common share-diluted, for the three and nine months ended September�30, 2014 as compared to adjusted net income attributable to common shareholders of $4.3 million, or $0.20 per common share-diluted, and $7.2 million, or $0.33 per common share-diluted, for the three and nine months ended September�30, 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 $1.5 million, or $0.07 per common share-diluted, and $5.2 million, or $0.24 per common share-diluted, for the three and nine months ended September�30, 2014, respectively, as compared to GAAP net income attributable to common shareholders of $3.4 million, or $0.16 per common share-diluted, and $5.1 million, or $0.23 per common share-diluted, for the three and nine months ended September�30, 2013, respectively.
Assets Under Management
The following table details the Company's gross assets under management by operating segment, which increased by $2.8 billion (17%) from September�30, 2013 to 2014 (in billions):
September 30,
2014
2013
Financial fund management
$
15.7

$
13.9

Real estate
3.1

2.1

Commercial finance
0.6

0.6

$
19.4

$
16.6

Net assets under management (1)
$
9.2

$
7.4

(1)
Net assets under management represents the proportionate share of assets managed by the Company after reflecting joint venture arrangements.����
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 year ended December 31, 2013.





Highlights for the Third Quarter Ended September�30, 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:
"
Increased total assets to $955.7 million at September�30, 2014, an increase of $573.9 million, or 150%, from $381.8 million at September�30, 2013.
"
Acquired $128.8 million of total assets, placed $48.0 million of financing on two assets and disposed of one additional asset for $18.1 million during the three months ended September�30, 2014.�
"
In October 2014, the Board of Directors of Opportunity REIT I's general partner authorized a 50% increase to the annual distribution rate to 6% from 4%.
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:
"
In July 2014, completed a $354.0 million commercial real estate securitization that issued $235.0 million of floating-rate notes at a weighted average coupon of LIBOR plus 1.29%.
"
During the quarter, raised $13.7 million in equity capital through its DRIP and preferred equity programs.
"
Originated $144.3 million of commercial real estate whole loans during the three months ended September�30, 2014.
"
In October 2014, RSOs Board of Directors authorized RSO to repurchase up to $50.0 million of its outstanding common stock.
The following additional highlights contributed to the Company's real estate asset management operations:
"
The Company's real estate operating segment increased its assets under management at September�30, 2014 to $3.1 billion, an increase of $915.0 million, or 43%, from September�30, 2013.
FINANCIAL FUND MANAGEMENT:
Credit Asset Management
CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XVIII, Ltd. (issuing notes with a par value of $700.0 million) during the quarter. In October 2014, CCP priced Apidos XIX, Ltd. (issuing notes with a par value of $500.0 million), which is scheduled to close in November 2014. Since the creation of this joint venture in April 2012, CCP has closed and/or priced 11 collateralized loan obligation issuers (issuing notes with a total par value of $5.8 billion) and expects to receive approximately $27.2 million in fees on an annual run rate basis. The Company has a 33% interest in this joint venture.
The following additional highlight contributed to the Company's financial fund asset management operations:
"
The Company's financial fund management operating segment increased its assets under management at September�30, 2014 to $15.7 billion, an increase of $1.8 billion, or 13%, from September�30, 2013.
CORPORATE/OTHER:
Corporate Credit Facility Modification
"
In August 2014, the Company modified its $10.0 million of outstanding senior notes to extend the maturity date to March 31, 2018.
Share Repurchases
"
The Company repurchased 665,933 of its shares during the third quarter ended September�30, 2014 at an average price of $9.42 per share. Since December 2013, the Company has repurchased 1.0 million shares at an average price of $9.31 per share under its share repurchase program.





"
In September 2014, the Companys Board of Directors authorized the Company to repurchase up to an additional 1.5 million shares of its outstanding common stock.
Dividends
"
The Company's Board of Directors authorized a 20% increase in the Companys cash dividend from $0.05 to $0.06 per share on the Companys common stock paid on October 31, 2014 to holders of record as of the close of business on October 17, 2014. Since July 2013, the Company has increased its dividend by 100%.
"
RSO's Board of Directors declared a cash dividend of $0.20 per common share for its quarter ended September 30, 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 [email protected].
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.






RESOURCE AMERICA, INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
September�30,
2014
December�31,
2013
(unaudited)
ASSETS
Cash
$
26,428

$
19,853

Restricted cash
704

571

Receivables
1,051

541

Loans and receivables from managed entities and related parties, net
32,637

30,923

Investments in real estate, net
17,091

17,696

Investment securities, at fair value
9,845

7,839

Investments in unconsolidated loan manager
39,048

37,821

Investments in unconsolidated entities
13,272

14,342

Assets of consolidated variable interest entity ("VIE") - RSO:
�����Cash and cash equivalents (including restricted cash)
246,873

325,579

�����Investments, at fair value
290,205

226,764

�����Loans
1,839,895

1,397,458

�����Investments in real estate and unconsolidated entities
108,395

124,193

Other assets
103,645

76,467

Total assets of consolidated VIE - RSO
2,589,013

2,150,461

Property and equipment, net
5,177

5,844

Deferred tax assets, net
22,808

27,769

Other assets
6,028

4,791

Total assets
$
2,763,102

$
2,318,451

LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities
$
19,027

$
22,134

Payables to managed entities and related parties
3,695

3,110

Borrowings
20,451

20,619

Liabilities of consolidated VIE - RSO:
�����Borrowings
1,591,241

1,320,015

�����Other liabilities
54,842

55,247

Total liabilities of consolidated VIE - RSO
1,646,083

1,375,262

Total liabilities
1,689,256

1,421,125

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;
34,463,787 and 30,378,339 shares issued (including nonvested restricted stock of 883,830 and 400,194), respectively
334

299

Additional paid-in capital
307,412

288,555

Accumulated deficit
(24,040
)
(26,025
)
Treasury stock, at cost; 11,517,053 and 10,434,436 shares, respectively
(117,881
)
(107,874
)
Accumulated other comprehensive loss
(1,066
)
(1,231
)
Total stockholders equity
164,759

153,724

Noncontrolling interests
254

238

Noncontrolling interests attributable to consolidated VIE - RSO
908,833

743,364

Total equity
1,073,846

897,326

$
2,763,102

$
2,318,451







RESOURCE AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
Nine Months Ended
September�30,
September�30,
2014
2013
2014
2013
REVENUES:
Real estate (includes revenues of $2,643, $4,701, $7,590 and $9,794 related to RSO)
$
14,289

$
15,950

$
41,012

$
39,443

Financial fund management (includes revenues of $2,310 $450, $1,350 and $720 related to RSO)
5,557

8,502

20,773

15,234

Commercial finance (includes no revenues related to RSO)
(17
)
(30
)
(158
)
(243
)
19,829

24,422

61,627

54,434

Revenues from consolidated VIE - RSO
34,716

23,786

100,604

76,011

Elimination of consolidated VIE revenues attributed to operating segments
(4,136
)
(5,183
)
(10,056
)
(10,608
)
Total revenues
50,409

43,025

152,175

119,837

COSTS AND EXPENSES:
Real estate
9,384

11,178

27,364

29,514

Financial fund management
2,812

3,547

9,980

7,769

Commercial finance
125

75

351

(99
)
General and administrative
2,426

2,505

8,309

6,807

Provision for credit losses
559

1,808

3,342

3,793

Depreciation and amortization
453

413

1,369

1,318

15,759

19,526

50,715

49,102

Expenses from consolidated VIE - RSO
18,686

15,554

51,020

43,110

Elimination of consolidated VIE expenses attributed to operating segments
(3,502
)
(4,861
)
(9,374
)
(10,178
)
Total expenses
30,943

30,219

92,361

82,034

OPERATING INCOME
19,466

12,806

59,814

37,803

OTHER INCOME (EXPENSE):
Gain on sale of investment securities, net
69



439



Other-than-temporary impairment on investments






(214
)
Interest expense
(467
)
(530
)
(1,447
)
(1,525
)
Other income, net
80

128

263

400

(318
)
(402
)
(745
)
(1,339
)
Other income, net, from consolidated VIE - RSO
(1,936
)
16,607

(758
)
16,607

Elimination of consolidated VIE other income attributed to operating segments
11

162

29

224

(2,243
)
16,367

(1,474
)
15,492

Income from continuing operations before taxes
17,223

29,173

58,340

53,295

Income tax provision (benefit)
1,741

1,261

4,991

(396
)
Income tax (benefit) provision - RSO
(237
)
722

(667
)
4,221

Income from continuing operations
15,719

27,190

54,016

49,470

Loss from discontinued operations, net of tax






(2
)
Net income
15,719

27,190

54,016

49,468

Net loss (income) attributable to noncontrolling interests
11

(40
)
(33
)
(23
)
Net income attributable to noncontrolling interests of consolidated VIE - RSO
(14,214
)
(23,708
)
(48,759
)
(44,394
)
Net income attributable to common shareholders
$
1,516

$
3,442

$
5,224

$
5,051

Amounts attributable to common shareholders:
Income from continuing operations
$
1,516

$
3,442

$
5,224

$
5,053

Discontinued operations






(2
)
Net income
$
1,516

$
3,442

$
5,224

$
5,051

Basic earnings per share:
Continuing operations
$
0.07

$
0.17

$
0.25

$
0.25

Discontinued operations








Net income
$
0.07

$
0.17

$
0.25

$
0.25

Weighted average shares outstanding
21,109

20,342

20,586

20,255

Diluted earnings per share:
Continuing operations
$
0.07

$
0.16

$
0.24

$
0.23

Discontinued operations








Net income
$
0.07

$
0.16

$
0.24

$
0.23

Weighted average shares outstanding
22,301

21,872

22,124

21,931






RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
(unaudited)

The following table presents the consolidating statement of operations for the three months ended September�30, 2014:
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


34,716



34,716

Elimination of consolidated VIE revenues attributed to operating segments




(4,136
)
(4,136
)
Total revenues
19,829

34,716

(4,136
)
50,409

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

15,759





15,759

Expenses of consolidated VIE - RSO


18,449

237

18,686

Elimination of consolidated VIE expenses attributed to operating segments




(3,502
)
(3,502
)
Total expenses
15,759

18,449

(3,265
)
30,943

OPERATING INCOME
4,070

16,267

(871
)
19,466

OTHER INCOME (EXPENSE):



Gain on sale of investment securities, net
69





69

Interest expense
(467
)




(467
)
Other income, net
652



(572
)
80

Other income, net, from consolidated VIE - RSO


(1,936
)


(1,936
)
Elimination of consolidated VIE - RSO other expense, net




11

11

254

(1,936
)
(561
)
(2,243
)
Income from continuing operations before taxes
4,324

14,331

(1,432
)
17,223

Income tax provision
1,741



(237
)
1,504

Net income
2,583

14,331

(1,195
)
15,719

Net loss attributable to noncontrolling interests
11





11

Net income attributable to noncontrolling interests - RSO


(7,003
)
(7,211
)
(14,214
)
Net income attributable to common shareholders
$
2,594

$
7,328

$
(8,406
)
$
1,516






RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
(unaudited)

The following table presents the consolidating statement of operations for the three months ended September�30, 2013:
RAI
RSO
Eliminations
Consolidated
REVENUES:
Real estate
$
15,950

$


$


$
15,950

Financial fund management
8,502





8,502

Commercial finance
(30
)




(30
)
24,422





24,422

Revenues from consolidated VIE - RSO


23,786



23,786

Elimination of consolidated VIE revenues attributed to operating segments




(5,183
)
(5,183
)
Total revenues
24,422

23,786

(5,183
)
43,025

COSTS AND EXPENSES:
Real estate
11,178





11,178

Financial fund management
3,547





3,547

Commercial finance
75





75

General and administrative
2,505





2,505

Provision for credit losses
1,808





1,808

Depreciation and amortization
413





413

19,526





19,526

Expenses of consolidated VIE - RSO


16,276

(722
)
15,554

Elimination of consolidated VIE expenses attributed to operating segments




(4,861
)
(4,861
)
Total expenses
19,526

16,276

(5,583
)
30,219

OPERATING (LOSS) INCOME
4,896

7,510

400

12,806

OTHER INCOME (EXPENSE):
Interest expense
(530
)




(530
)
Other income, net
684



(556
)
128

Other income, net, from consolidated VIE - RSO


16,607



16,607

Elimination of consolidated VIE - RSO other expense, net




162

162

154

16,607

(394
)
16,367

Income from continuing operations before taxes
5,050

24,117

6

29,173

Income tax provision
1,261



722

1,983

Net income
3,789

24,117

(716
)
27,190

Net income attributable to noncontrolling interests
(40
)




(40
)
Net income attributable to noncontrolling interests - RSO


(1,996
)
(21,712
)
(23,708
)
Net income attributable to common shareholders
$
3,749

$
22,121

$
(22,428
)
$
3,442







RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
(unaudited)

The following table presents the consolidating statement of operations for the nine months ended September�30, 2014:
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


100,604



100,604

Elimination of consolidated VIE revenues attributed to operating segments




(10,056
)
(10,056
)
Total revenues
61,627

100,604

(10,056
)
152,175

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

50,715





50,715

Expenses of consolidated VIE - RSO


50,353

667

51,020

Elimination of consolidated VIE expenses attributed to operating segments




(9,374
)
(9,374
)
Total expenses
50,715

50,353

(8,707
)
92,361

OPERATING INCOME
10,912

50,251

(1,349
)
59,814

OTHER INCOME (EXPENSE):
Gain on sale of investment securities, net
439





439

Interest expense
(1,447
)




(1,447
)
Other income, net
1,979



(1,716
)
263

Other income, net, from consolidated VIE - RSO


(758
)


(758
)
Elimination of consolidated VIE other income, net




29

29

971

(758
)
(1,687
)
(1,474
)
Income from continuing operations before taxes
11,883

49,493

(3,036
)
58,340

Income tax provision
4,991



(667
)
4,324

Net income
6,892

49,493

(2,369
)
54,016

Net income attributable to noncontrolling interests
(33
)




(33
)
Net income attributable to noncontrolling interests - RSO


(12,372
)
(36,387
)
(48,759
)
Net income attributable to common shareholders
$
6,859

$
37,121

$
(38,756
)
$
5,224







RESOURCE AMERICA, INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
(unaudited)

The following table presents the consolidating statement of operations for the nine months ended September�30, 2013:
RAI
RSO
Eliminations
Consolidated
REVENUES:
Real estate
$
39,443

$


$


$
39,443

Financial fund management
15,234





15,234

Commercial finance
(243
)




(243
)
54,434





54,434

Revenues from consolidated VIE - RSO


76,011



76,011

Elimination of consolidated VIE revenues attributed to operating segments




(10,608
)
(10,608
)
Total revenues
54,434

76,011

(10,608
)
119,837

COSTS AND EXPENSES:
Real estate
29,514





29,514

Financial fund management
7,769





7,769

Commercial finance
(99
)




(99
)
General and administrative
6,807





6,807

Provision for credit losses
3,793





3,793

Depreciation and amortization
1,318





1,318

49,102





49,102

Expenses from consolidated VIE - RSO


47,331

(4,221
)
43,110

Elimination of consolidated VIE expenses attributed to operating segments




(10,178
)
(10,178
)
Total expenses
49,102

47,331

(14,399
)
82,034

OPERATING INCOME
5,332

28,680

3,791

37,803

OTHER INCOME (EXPENSE):
Other-than-temporary impairment on investments
(214
)




(214
)
Interest expense
(1,525
)




(1,525
)
Other income, net
2,069



(1,669
)
400

Other income, net, from consolidated VIE - RSO


16,607



16,607

Elimination of consolidated VIE other income, net




224

224

330

16,607

(1,445
)
15,492

Income from continuing operations before taxes
5,662

45,287

2,346

53,295

Income tax benefit
(396
)


4,221

3,825

Income from continuing operations
6,058

45,287

(1,875
)
49,470

Loss from discontinued operations, net of tax
(2
)




(2
)
Net income
6,056

45,287

(1,875
)
49,468

Net income attributable to noncontrolling interests
(23
)




(23
)
Net income attributable to noncontrolling interests - RSO


(5,107
)
(39,287
)
(44,394
)
Net income attributable to common shareholders
$
6,033

$
40,180

$
(41,162
)
$
5,051






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
Nine Months Ended
September�30,
September�30,
2014
2013
2014
2013
Net income attributable to common shareholders - GAAP
$
1,516

$
3,442

$
5,224

$
5,051

Adjustments, net of tax:
Income, net of eliminations, attributable to consolidation of RSO
1,078

307

1,635

982

Loss attributable to commercial finance
382

1,171

2,388

3,883

(2)
Deferred tax (benefit) provision
(142
)
(613
)
485

(2,711
)
Adjusted net income attributable to common shareholders
$
2,834

$
4,307

$
9,732

$
7,205

Adjusted weighted average diluted shares outstanding
22,301

21,872

22,124

21,931

Adjusted net income attributable to common shareholders per
common per share-diluted
$
0.13

$
0.20

$
0.44

$
0.33

(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, excluding the impact of the RSO consolidation, in both its real estate and financial fund management segments for the three and nine months ended September�30, 2014 and 2013 separately from its commercial finance operations and items related to its deferred tax (benefit) provision that are not in the ordinary course of business. 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.
(2)
Utilizes a full year continuing income tax rate of 38%.





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