Resource America, Inc. Reports Operating Results for the Fourth Quarter and Year Ended December 31, 2013

PHILADELPHIA, PA--(Marketwired - Mar 10, 2014) - Resource America, Inc. (NASDAQ: REXI)

Fourth Quarter 2013 Highlights

• Adjusted net income attributable to common shareholders of $3.6 million (see Schedule I)
• Stand-alone operating income of $4.0 million as compared to a $1.1 million loss for the prior year period
• Increased assets under management by 13% during the year to $17.3 billion
• Record fund raising of $194.5 million for Resource Real Estate Opportunity REIT, Inc.
• Book value per common share of $7.87
• Repurchased 324,000 shares at $9.28
• Increased fourth quarter cash dividend by 25% to $.05 from $.04

Fourth Quarter 2013 Results
Resource America, Inc. (NASDAQ: REXI) (the "Company")  reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $3.6 million, or $0.16 per common share-diluted, and $11.9 million, or $0.54 per common share-diluted, for the three months and year ended December 31, 2013, respectively, as compared to adjusted net income attributable to common shareholders of $1.3 million, or $0.06 per common share-diluted, and $335,000, or $0.02 per common share-diluted, for the three months and year ended December 31, 2012, respectively. A reconciliation of the Company's reported GAAP net income (loss) 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 $1.4 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, respectively, as compared to a GAAP net loss attributable to common shareholders of $1.5 million, or $0.08 per common share-diluted, for the three months ended December 31, 2012, and GAAP net income attributable to common shareholders of $24.0 million, or $1.14 per common share-diluted, for the year ended December 31, 2012. Included in GAAP net income attributable to common shareholders for the year ended December 31, 2012 was a $36.4 million gain, net of tax, on the sale of the Company's credit loan manager.

Assets Under Management
The following table details the Company's assets under management by operating segment, which increased by $2.0 billion (13%) from December 31, 2012 to 2013 (in billions):

					December 31,
					2013			2012
Financial fund management					$	14.2		$	13.0
Real estate						2.5			1.8
Commercial finance						0.6			0.5
					$	17.3		$	15.3
	Net assets under management (1)				$	7.9		$	6.8

(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/A for the fiscal year ended September 30, 2012.

Highlights for the Fourth Quarter and Year Ended December 31, 2013 and Recent Developments

REAL ESTATE ASSET MANAGEMENT:

Equity Asset Management
Resource Real Estate Opportunity REIT, Inc, 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:

• Raised a record $194.5 million during the three months ended December 31, 2013 and completed fundraising for this fund with a total equity capital raise of $635.0 million.
• Increased total assets to $678.6 million at December 31, 2013, an increase of $496.4 million, or 272%, from December 31, 2012, including the acquisition during the three months ended December 31, 2013 of three multifamily assets for $98.3 million located in Alpharetta, GA, San Antonio, TX and Burnsville, MN.
• In January 2014, acquired 10 multifamily assets totaling 2,513 units and two office properties that contain 75,518 rentable square feet for $51.2 million. 

For the year ended December 31, 2013, the Company's real estate operating segment acquired 12 properties for $317.9 million, financed 11 properties for $147.8 million and disposed of six properties for $52.1 million.

On February 6, 2014, Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II") commenced its initial public offering of common stock and will focus on acquiring under-performing multifamily rental properties, distressed real estate and performing loans. Opportunity REIT II is offering up to $1 billion in common stock at a maximum price of $10 per share. Resource Real Estate will be the external manager.

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:

• Originated $97.4 million and $344.3 million of commercial real estate whole loans during the three months and year ended December 31, 2013, respectively.
• In December 2013, completed a $307.8 million commercial real estate securitization that issued $260.8 million of floating-rate notes at a weighted average coupon of LIBOR plus 1.86%.
• In October 2013, acquired Primary Capital Advisors, a residential mortgage origination company, for $8.4 million.
• In October 2013, completed a $115.0 million public offering of its 6.00% convertible senior notes due 2018.

The following additional highlights contributed to our real estate asset management operations:

• The Company's real estate operating segment increased its assets under management at December 31, 2013 to $2.5 billion, an increase of $709.0 million, or 39%, from December 31, 2012.
• Real estate revenues increased 34% and 27%, to $17.7 million and $57.1 million, for the three months and year ended December 31, 2013, respectively, as compared to $13.2 million and $45.1 million for the three months and year ended December 31, 2012, respectively. 

FINANCIAL FUND MANAGEMENT:

Credit Asset Management
CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, closed Apidos CLO XV, Ltd. (issuing notes with a par value of $500.0 million) and Apidos CLO XVI, Ltd. (issuing notes with a par value of $600.0 million) in October 2013 and January 2014, respectively. Since creating this joint venture in April 2012, CCP has closed seven collateralized loan obligation issuers (issuing notes with a total par value of $3.5 billion) and expects to receive approximately $15.9 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 our financial fund asset management operations:
The Company's financial fund management operating segment increased its assets under management at December 31, 2013 to $14.2 billion, an increase of $1.1 billion, or 9%, from December 31, 2012.

CORPORATE/OTHER:

Share Repurchases

• In November 2013, the Company repurchased 324,000 of its shares at $9.28 per share. From August 2012 to December 2013, the Company repurchased over 912,000 shares at an average price of $7.73 per share under its share repurchase program.
• In December 2013, the Company's Board of Directors authorized the repurchase of up to one million shares of common stock, which replaced the August 2012 repurchase program. 

Corporate Credit Facility Modification

• In November 2013, the Company extended the maturity of its $3.5 million revolving credit facility with Republic Bank from December 2014 to December 2016.

Dividends

• The Company's Board of Directors authorized an increase in the Company's cash dividend from $0.04 to $0.05 per share on the Company's common stock and payment on January 31, 2014 to holders of record as of the close of business on January 17, 2014. 
• RSO's Board of Directors declared a cash dividend of $0.20 per common share for its three months ended December 31, 2013.

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, 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/A 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 (loss) attributable to common shareholders to adjusted net income attributable to common shareholders.

RESOURCE AMERICA, INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
					December 31,
					2013				2012
ASSETS
	Cash				$	19,853			$	11,899
	Restricted cash					571				638
	Receivables					541				468
	Receivables from managed entities and related parties, net					30,923				30,618
	Investments in real estate, net					17,696				18,041
	Investment securities, at fair value					7,839				10,576
	Investments in unconsolidated loan manager					37,821				37,221
	Investments in unconsolidated entities					14,342				13,156
	Assets of consolidated variable interest entity ("VIE") - RSO
		Cash and cash equivalents (including restricted cash)				325,579				179,390
		Investments, at fair value				221,395				256,433
		Loans				1,397,458				1,849,428
		Investments in real estate and consolidated entities				129,562				120,706
		Other assets				76,467				70,600
			Total assets of consolidated VIE - RSO			2,150,461				2,476,557
	Property and equipment, net					5,844				2,590
	Deferred tax assets, net					27,769				28,274
	Other assets					4,791				6,726
		Total assets			$	2,318,451			$	2,636,764
LIABILITIES AND EQUITY
Liabilities:
	Accrued expenses and other liabilities				$	22,134			$	21,864
	Payables to managed entities and related parties					3,110				3,536
	Borrowings					20,619				20,735
	Liabilities of consolidated VIE - RSO
		Borrowings				1,320,015				1,785,600
		Other liabilities				55,247				71,239
		Total liabilities of consolidated VIE - RSO				1,375,262				1,856,839
			Total liabilities			1,421,125				1,902,974
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;30,378,339 and 30,069,822 shares issued (including nonvested restricted stock of 400,194 and 604,353), respectively					299				295
	Additional paid-in capital					288,555				286,048
	Accumulated deficit					(26,025	)			(29,486	)
	Treasury stock, at cost; 10,434,436 and 9,914,090 shares, respectively					(107,874	)			(103,472	)
	Accumulated other comprehensive loss					(1,231	)			(2,197	)
		Total stockholders' equity				153,724				151,188
	Noncontrolling interests					238				279
	Noncontrolling interests attributable to RSO					743,364				582,323
		Total equity				897,326				733,790
					$	2,318,451			$	2,636,764

RESOURCE AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
			Three Months Ended								Years Ended
			December 31,								December 31,
			2013				2012				2013				2012
REVENUES:
Real estate (includes revenues of $2,806, $4,787, $12,600 and $13,956 related to RSO)			$	17,700			$	13,154			$	57,143			$	45,083
Financial fund management (includes revenues of $400, $(8), $1,120 and $4,894 related to RSO)				4,539				2,675				19,773				18,053
Commercial finance (no revenues related to RSO)				(98	)			(124	)			(341	)			(1,659	)
				22,141				15,705				76,575				61,477
Revenues from consolidated VIE - RSO				14,996				33,041				91,007				123,698
Elimination of consolidated VIE revenues attributed to operating segments				(3,226	)			(4,811	)			(13,834	)			(17,544	)
	Total revenues			33,911				43,935				153,748				167,631
COSTS AND EXPENSES:
Real estate				11,098				7,998				40,612				30,475
Financial fund management				2,386				1,017				10,155				12,299
Commercial finance				155				(49	)			56				402
Restructuring expenses				-				-				-				365
General and administrative				3,461				2,228				10,268				9,792
Impairment charges				-				-				-				2,280
Provision for credit losses				472				5,152				4,265				20,148
Depreciation and amortization				618				492				1,936				2,084
				18,190				16,838				67,292				77,845
Expenses from consolidated VIE - RSO				19,492				24,098				62,602				63,850
Elimination of consolidated VIE expenses attributed to operating segments				(3,037	)			(4,762	)			(13,215	)			(17,351	)
	Total expenses			34,645				36,174				116,679				124,344
OPERATING (LOSS) INCOME				(734	)			7,761				37,069				43,287
OTHER INCOME (EXPENSE):
Gain on deconsolidation and sale of subsidiary				-				-				-				54,542
Other-than-temporary impairment on investments				-				-				(214	)			(74	)
Interest expense				(511	)			(522	)			(2,036	)			(2,289	)
Other income, net				175				106				575				112
Other income, net, from consolidated VIE - RSO				400				13,733				17,007				19,197
Elimination of consolidated VIE other income attributed to operating segments				20				32				244				133
				84				13,349				15,576				71,621
(Loss) income from continuing operations before taxes				(650	)			21,110				52,645				114,908
Income tax provision (benefit)				2,053				(241	)			1,657				13,117
Income tax (benefit) provision - RSO				(5,262	)			7,624				(1,041	)			14,602
Income from continuing operations				2,559				13,727				52,029				87,189
Loss from discontinued operations, net of tax				-				(6	)			(2	)			(44	)
Net income				2,559				13,721				52,027				87,145
Net loss (income) attributable to noncontrolling interests				3				(587	)			(20	)			(557	)
Net income attributable to noncontrolling interests of consolidated VIE - RSO				(1,187	)			(14,668	)			(45,581	)			(62,560	)
Net income (loss) attributable to common shareholders			$	1,375			$	(1,534	)		$	6,426			$	24,028
Amounts attributable to common shareholders:
Income (loss) from continuing operations			$	1,375			$	(1,528	)		$	6,428			$	24,072
Discontinued operations				-				(6	)			(2	)			(44	)
Net income (loss)			$	1,375			$	(1,534	)		$	6,426			$	24,028

RESOURCE AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - (Continued)
(in thousands, except per share data)
(unaudited)
		Three Months Ended							Years Ended
		December 31,							December 31,
		2013			2012				2013			2012
Basic earnings (loss) per share:
Continuing operations		$	0.07		$	(0.08	)		$	0.32		$	1.21
Discontinued operations			-			-				-			-
Net income (loss)		$	0.07		$	(0.08	)		$	0.32		$	1.21
Weighted average shares outstanding			20,104			20,077				20,217			19,919
Diluted earnings (loss) per share:
Continuing operations		$	0.06		$	(0.08	)		$	0.29		$	1.14
Discontinued operations			-			-				-			-
Net income (loss)		$	0.06		$	(0.08	)		$	0.29		$	1.14
Weighted average shares outstanding			21,828			20,077				21,905			20,994

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			-				14,996				-				14,996
Elimination of consolidated VIE revenues attributed to operating segments			-				-				(3,226	)			(3,226	)
Total revenues			22,141				14,996				(3,226	)			33,911
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			-				14,230				5,262				19,492
Elimination of consolidated VIE expenses attributed to operating segments			-				-				(3,037	)			(3,037	)
Total expenses			18,190				14,230				2,225				34,645
OPERATING INCOME (LOSS)			3,951				766				(5,451	)			(734	)
OTHER INCOME (EXPENSE):
Interest expense			(511	)			-				-				(511	)
Other income, net			747				-				(572	)			175
Other income, net, from consolidated VIE - RSO			-				400				-				400
Elimination of consolidated VIE other income, net			-				-				20				20
			236				400				(552	)			84
Income (loss) from continuing operations before taxes			4,187				1,166				(6,003	)			(650	)
Income tax provision (benefit)			2,053				-				(5,262	)			(3,209	)
Net income (loss)			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 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 fourth quarter ended December 31, 2012:

		RAI				RSO				Eliminations				Consolidated
REVENUES:
Real estate		$	13,154			$	-			$	-			$	13,154
Financial fund management			2,675				-				-				2,675
Commercial finance			(124	)			-				-				(124	)
			15,705				-				-				15,705
Revenues from consolidated VIE - RSO			-				33,041				-				33,041
Elimination of consolidated VIE revenues attributed to operating segments			-				-				(4,811	)			(4,811	)
Total revenues			15,705				33,041				(4,811	)			43,935
COSTS AND EXPENSES:
Real estate			7,998				-				-				7,998
Financial fund management			1,017				-				-				1,017
Commercial finance			(49	)			-				-				(49	)
General and administrative			2,228				-				-				2,228
Provision for credit losses			5,152				-				-				5,152
Depreciation and amortization			492				-				-				492
			16,838				-				-				16,838
Expenses from consolidated VIE - RSO			-				31,722				(7,624	)			24,098
Elimination of consolidated VIE expenses attributed to operating segments			-				-				(4,762	)			(4,762	)
Total expenses			16,838				31,722				(12,386	)			36,174
OPERATING (LOSS) INCOME			(1,133	)			1,319				7,575				7,761
OTHER INCOME (EXPENSE):
Interest expense			(522	)			-				-				(522	)
Other income, net			640				-				(534	)			106
Other income, net, from consolidated VIE - RSO			-				13,733				-				13,733
Elimination of consolidated VIE other income, net			-				-				32				32
			118				13,733				(502	)			13,349
(Loss) income from continuing operations before taxes			(1,015	)			15,052				7,073				21,110
Income tax (benefit) provision			(241	)			-				7,624				7,383
(Loss) income from continuing operations			(774	)			15,052				(551	)			13,727
Loss from discontinued operations, net of tax			(6	)			-				-				(6	)
Net (loss) income			(780	)			15,052				(551	)			13,721
Net income attributable to noncontrolling interests			(587	)			-				-				(587	)
Net income attributable to noncontrolling interests - RSO			-				(911	)			(13,757	)			(14,668	)
Net (loss) income attributable to common shareholders		$	(1,367	)		$	14,141			$	(14,308	)		$	(1,534	)
Amounts attributable to common shareholders:
(Loss) income from continuing operations		$	(1,361	)		$	14,141			$	(14,308	)		$	(1,528	)
Discontinued operations			(6	)			-				-				(6	)
Net (loss) income		$	(1,367	)		$	14,141			$	(14,308	)		$	(1,534	)

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			-				91,007				-				91,007
Elimination of consolidated VIE revenues attributed to operating segments			-				-				(13,834	)			(13,834	)
Total revenues			76,575				91,007				(13,834	)			153,748
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			-				61,561				1,041				62,602
Elimination of consolidated VIE expenses attributed to operating segments			-				-				(13,215	)			(13,215	)
Total expenses			67,292				61,561				(12,174	)			116,679
OPERATING INCOME			9,283				29,446				(1,660	)			37,069
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			-				17,007				-				17,007
Elimination of consolidated VIE other income, net			-				-				244				244
			566				17,007				(1,997	)			15,576
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
Amounts attributable to common shareholders:
Income from continuing operations		$	8,172			$	39,232			$	(40,976	)		$	6,428
Discontinued operations			(2	)			-				-				(2	)
Net income		$	8,170			$	39,232			$	(40,976	)		$	6,426

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, 2012:

		RAI				RSO				Eliminations				Consolidated
REVENUES:
Real estate		$	45,083			$	-			$	-			$	45,083
Financial fund management			18,053				-				-				18,053
Commercial finance			(1,659	)			-				-				(1,659	)
			61,477				-				-				61,477
Revenues from consolidated VIE - RSO			-				123,698				-				123,698
Elimination of consolidated VIE revenues attributed to operating segments			-				-				(17,544	)			(17,544	)
Total revenues			61,477				123,698				(17,544	)			167,631
COSTS AND EXPENSES:
Real estate			30,475				-				-				30,475
Financial fund management			12,299				-				-				12,299
Commercial finance			402				-				-				402
Restructuring expenses			365				-				-				365
General and administrative			9,792				-				-				9,792
Impairment charges			2,280				-				-				2,280
Provision for credit losses			20,148				-				-				20,148
Depreciation and amortization			2,084				-				-				2,084
			77,845				-				-				77,845
Expenses from consolidated VIE - RSO			-				78,452				(14,602	)			63,850
Elimination of consolidated VIE expenses attributed to operating segments			-				-				(17,351	)			(17,351	)
Total expenses			77,845				78,452				(31,953	)			124,344
OPERATING (LOSS) INCOME			(16,368	)			45,246				14,409				43,287
OTHER INCOME (EXPENSE):
Gain on deconsolidation and sale of subsidiary			54,542				-				-				54,542
Other-than-temporary impairment on investments			(74	)			-				-				(74	)
Interest expense			(2,289	)			-				-				(2,289	)
Other income, net			2,189				-				(2,077	)			112
Other income, net, from consolidated VIE - RSO			-				19,197				-				19,197
Elimination of consolidated VIE other income, net			-				-				133				133
			54,368				19,197				(1,944	)			71,621
Income from continuing operations before taxes			38,000				64,443				12,465				114,908
Income tax provision			13,117				-				14,602				27,719
Income from continuing operations			24,883				64,443				(2,137	)			87,189
Loss from discontinued operations, net of tax			(44	)			-				-				(44	)
Net income			24,839				64,443				(2,137	)			87,145
Net income attributable to noncontrolling interests			(557	)			-				-				(557	)
Net income attributable to noncontrolling interests - RSO			-				(1,244	)			(61,316	)			(62,560	)
Net income attributable to common shareholders		$	24,282			$	63,199			$	(63,453	)		$	24,028
Amounts attributable to common shareholders:
Income from continuing operations		$	24,326			$	63,199			$	(63,453	)		$	24,072
Discontinued operations			(44	)			-				-				(44	)
Net income		$	24,282			$	63,199			$	(63,453	)		$	24,028

Schedule I

RECONCILIATION OF GAAP NET INCOME (LOSS) 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,
					2013			2012				2013				2012
Net income (loss) attributable to common shareholders - GAAP					$	1,375		$	(1,534	)		$	6,426			$	24,028
Adjustments, net of tax:
Loss, net of eliminations, attributable to consolidation of RSO						762			167				1,744				254
Loss attributable to commercial finance						535			2,406				4,545				14,269
Gain on sale of subsidiary						-			-				-				(36,394	)
Deferred tax provision (benefit)						887			279				(805	)			(1,822	)
Adjusted net income attributable to common shareholders					$	3,559		$	1,318			$	11,910			$	335
Adjusted weighted average diluted shares outstanding (2)						21,828			21,199				21,905				20,994
Adjusted net income attributable to common shareholders per common per share-diluted					$	0.16		$	0.06			$	0.54			$	0.02

(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, gain on the sale of subsidiary and deferred tax provision (benefit). 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, 2013 and 2012 separately from its commercial finance operations, gain realized on the sale of a subsidiary and deferred tax provision (benefit). Adjusted net income attributable to common shareholders should not be considered as an alternative to net income (loss) 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 (loss) attributable to common shareholders in the Company's consolidated financial statements, to help analyze how the Company's business is performing.
(2)	Dilutive shares used in the calculation of adjusted net income attributable to common shareholders per common share-diluted included an additional 1.1 million shares for the three months ended December 31, 2012, which were anti-dilutive for the period and, as such, were not used in the calculation of GAAP net loss attributable to common shareholders per common share-diluted.