Straight-up comparison of 2009 with 2010, hard numbers straight from the SEC filing:
For your dining and dancing pleasure.
No one can time the market. If you made a profit, be thankful. There will be an opportunity in the future to get in. This stock is still cheap and a good long term play. I've been trading RAS for over 2 years and it's treated me well. Sure I've made some errors but as I said, no one can time the market. If you sold at $3 and made some money - be thankful.
Investment interest income DOWN for the year AND the quarter
Investment interest expense UP for the year AND the quarter
Net interest margin DOWN for the year AND the quarter
(spreads tightened for RAS just like everybody else)
Rental income UP for the year AND the quarter
Fee/other income DOWN for the year AND the quarter
TOTAL REVENUE was DOWN for the year AND the quarter...by 44M for the year, 1.357M for Q4
BUT!!! What about expenses?
There's good news, and then there's not-so-good news:
Total expenses DOWN for the year AND the quarter, and down A LOT: DOWN $213,702,000 for the year
The not-so-good part? $188,260 of the improvement was a decrease in 'provision for losses', which looked great compared to $226,567,000 for FY2009.
The 'asset impairments' went from $46,015,000 to 0.
Those two numbers alone would bring $272,582 in accounting benefits, but represent no real funds in or out. The actual operating expenses went UP from $90,747,000 to $103,788,000, an increase of $13,041,000
Operating expenses are the sum of Real Estate operating expense, Compensation expense plus G & A expense. I sum it separately because the other elements are paper numbers: 'loan loss provisions', 'asset impairments', 'depreciation', and 'amortization' aren't funds in or funds out. You don't write a check for them, or make a deposit. They are all just book-entry numbers. Yeah, I'm just a cash-flow kinda guy.
Income before taxes & discontinued operations improved, a lot. $388,377 was 'gain on sale of assets', kinda good, except that it means taking a hit on fee income and rental income on the properties now that they belong to someone else, and a reduction in overall stockholders' equity. Real 'income before expenses' was up, in the sense that the loss was much smaller in 2010 than in 2009: a $17.321 million loss, net negative, but much smaller than the 2009 loss of $186.941 million. That's improvement, but negative net income isn't anything to cheer about.
'gains on extinguishment of debt' and 'change in fair value of financial instruments' were enough, totalling $117.415 million, to give a net positive IBTDO of $112.192 million, but those numbers are outside management control: Mr. Market can kill the 'fair value' number anytime, and the bond buyback gains are at the discretion of the bondholders. Depending on numbers that you can't control is not a sound basis for forward projections.
Improvement 'Income/(loss) attributed to common shares' was inevitable, with the abominable $441.203 million LOSS for 2009. Hard NOT to improve on that. Given that $1.14 per share of the $98.152 million net income came from the bond buyback 'gains' and 'fair value of investments' numbers, it's still one of those NON-RECURRING numbers that we see so often with RAS financials. If they can come up with new and different non-recurring book-entry positives every year, they can stay one jump ahead. With 36,743,291 more shares outstanding now than last year this time, they really need to.
Waitaminnit: income down, expense up, interest margin down, total revenue down, operating expenses up, and so on?
Yet, Mr. Market goes hog wild and the longs are leaping for joy?
How is it that they don't understand the meaning of "non-recurring" paper gains?
Gains (losses) on sale of assets 11,626
Gains on extinguishment of debt 71,575
Change in fair value of financial instruments 45,840
Just those three one-time numbers represent over 129M dollars of so-called "income" that won't be available in 2011. That's what I mean by "non-recurring". Without that padding, the 98,152 positive net income for the year was really a net loss of over 30M dollars.
Like apples? How about *them* apples.
What new magic rabbit "gains on extinguishment of debt" will they pull out of their RAS next quarter?
It cost money, and stock dilution, to buy back all those puttable bonds. That's cash flowing out, not flowing in.
Shares are up above 105 million now (105,900,570), almost 60% more than just a year ago when the number was 66 million shares.
Can't wait for the 10-K to be up at the SEC, so we can see what's behind all the smoke & mirrors.
Price will crash just like last May when wiser heads figure out the hard reality behind the smoke screen.
Every quarter look at 2 lines:
1) gain on extinguishment of debt
2) change in FV of financial instruments.
Both lines are utter nonsense in terms of ongoing economics of RAIT. Both lines in total always equal c100% of earnings. this is why RAS is now at $10 stock and for good reason.
You are absolutely clueless and have no accounting backgroud at all--Change in an assets fair value means nothing???investing in property(assets) is part of this companies business model--if those assets gain in value it can and SHOULD be recognized as earnings--just as losses in value are hits on earnings--I hope no one listens to you and sells or shorts this stock --it would be criminal