VARIABLE INTEREST ENTITIES

A VIE requires consolidation by the entity’s primary beneficiary. We evaluate all of the entities in which we are involved to determine if the entity is a VIE and, if so, whether we hold a variable interest and are the primary beneficiary.

We hold variable interests in the following VIE’s: Raymond James Employee Investment Funds I and II (the “EIF Funds”), a trust fund established for employee retention purposes (“Restricted Stock Trust Fund”), certain low-income housing tax credit funds (“LIHTC Funds”), various other partnerships and limited liability companies (“LLCs”) involving real estate (“Other Real Estate Limited Partnerships and LLCs”), certain new market tax credit funds (“NMTC Funds”), and certain funds formed for the purpose of making and managing investments in securities of other entities (“Managed Funds”).

Refer to Note 2 on pages 118 - 121 of our 2015 Form 10-K for a description of our principal involvement with VIEs and the accounting policies regarding determination of whether we are deemed to be the primary beneficiary of any VIEs. Other than as described below, as of March 31, 2016 there have been no significant changes in either the nature of our involvement with, or the accounting policies associated with the analysis of, VIEs as described in the 2015 Form 10-K.

Raymond James Tax Credit Funds, Inc. (“RJTCF”), a wholly owned subsidiary of RJF, is the managing member or general partner in LIHTC Funds having one or more investor members or limited partners. These LIHTC Funds are organized as limited partnerships or LLCs for the purpose of investing in a number of project partnerships, which are limited partnerships or LLCs that in turn purchase and develop low-income housing properties qualifying for tax credits.

VIEs where we are the primary beneficiary

Of the VIEs in which we hold an interest, we have determined that the EIF Funds, the Restricted Stock Trust Fund and certain LIHTC Funds require consolidation in our financial statements, as we are deemed the primary beneficiary of those VIEs. The aggregate assets and liabilities of the VIEs we consolidate are provided in the table below.



	Aggregate assets ⁽¹⁾		Aggregate liabilities ⁽¹⁾
	(in thousands)
March 31, 2016
LIHTC Funds	$	135,581	$	34,173
Guaranteed LIHTC Fund ⁽²⁾	64,715		2,427
Restricted Stock Trust Fund	11,186		11,186
EIF Funds	4,040		—
Total	$	215,522	$	47,786

September 30, 2015
LIHTC Funds	$	143,111	$	41,125
Guaranteed LIHTC Fund ⁽²⁾	71,231		2,263
Restricted Stock Trust Fund	6,405		6,405
EIF Funds	4,627		—
Total	$	225,374	$	49,793


(1)	Aggregate assets and aggregate liabilities differ from the consolidated carrying value of assets and liabilities due to the elimination of intercompany assets and liabilities held by the consolidated VIE.


(2)	In connection with one of the multi-investor tax credit funds in which RJTCF is the managing member, RJTCF has provided one investor member with a guaranteed return on their investment in the fund (the “Guaranteed LIHTC Fund”). See Note 16 for additional information regarding this commitment.

The following table presents information about the carrying value of the assets, liabilities and equity of the VIEs which we consolidate and which are included within our Condensed Consolidated Statements of Financial Condition. The noncontrolling interests presented in this table represent the portion of these net assets which are not ours.



	March 31, 2016		September 30, 2015
	(in thousands)
Assets:
Assets segregated pursuant to regulations and other segregated assets	$	8,019	$	8,525
Receivables, other	5,494		5,542
Investments in real estate partnerships held by consolidated variable interest entities	191,801		199,678
Trust fund investment in RJF common stock ⁽¹⁾	11,185		6,404
Prepaid expenses and other assets	3,944		4,297
Total assets	$	220,443	$	224,446

Liabilities and equity:
Trade and other payables	$	23,443	$	12,424
Intercompany payables	11,154		6,400
Loans payable of consolidated variable interest entities ⁽²⁾	19,365		25,960
Total liabilities	53,962		44,784
RJF equity	6,112		6,121
Noncontrolling interests	160,369		173,541
Total equity	166,481		179,662
Total liabilities and equity	$	220,443	$	224,446


(1)	Included in treasury stock in our Condensed Consolidated Statements of Financial Condition.


(2)	Comprised of several non-recourse loans. We are not contingently liable under any of these loans.

The following table presents information about the net income (loss) of the VIEs which we consolidate, and is included within our Condensed Consolidated Statements of Income and Comprehensive Income. The noncontrolling interests presented in this table represent the portion of the net loss from these VIEs which is not ours.



	Three months ended March 31,						Six months ended March 31,
	2016			2015			2016			2015
	(in thousands)
Revenues:
Interest	$	2		$	2		$	2		$	2
Other	(201		)	(382		)	414			292
Total revenues	(199		)	(380		)	416			294
Interest expense	(315		)	(537		)	(625		)	(1,066		)
Net revenues	(514		)	(917		)	(209		)	(772		)
Non-interest expenses ⁽¹⁾	9,398			11,085			18,419			19,099
Net loss including noncontrolling interests	(9,912		)	(12,002		)	(18,628		)	(19,871		)
Net loss attributable to noncontrolling interests	(9,905		)	(11,975		)	(18,619		)	(19,858		)
Net loss attributable to RJF	$	(7	)	$	(27	)	$	(9	)	$	(13	)


(1)	Primarily comprised of items reported in other expense on our Condensed Consolidated Statements of Income and Comprehensive Income.

Low-income housing tax credit funds

RJTCF is the managing member or general partner in 102 separate low-income housing tax credit funds having one or more investor members or limited partners, 88 of which are determined to be VIEs and 14 of which are determined not to be VIEs. RJTCF has concluded that it is the primary beneficiary of six non-guaranteed LIHTC Fund VIEs and, accordingly, consolidates these funds. In addition, RJTCF consolidates the one Guaranteed LIHTC Fund VIE it sponsors (see Note 16 for further discussion of the guarantee obligation as well as other RJTCF commitments). RJTCF also consolidates eight of the funds it determined not to be VIEs.

VIEs where we hold a variable interest but are not the primary beneficiary

Low-income housing tax credit funds

RJTCF does not consolidate the LIHTC Fund VIEs that it determines it is not the primary beneficiary of. Our risk of loss is limited to our investments in, advances to, and receivables due from these funds.

New market tax credit funds

One of our affiliates is the managing member of six NMTC Funds, and, as discussed in Note 2 on page 120 of our 2015 Form 10-K, this affiliate is not deemed to be the primary beneficiary of these NMTC Funds. These NMTC Funds are therefore not consolidated. Our risk of loss is limited to our receivables due from these funds.

Other real estate limited partnerships and LLCs

We have a variable interest in several limited partnerships involved in various real estate activities in which a subsidiary is either the general partner or a limited partner. As discussed in Note 2 on page 120 of our 2015 Form 10-K, we have determined that we are not the primary beneficiary of these VIEs. Accordingly, we do not consolidate these partnerships or LLCs. The carrying value of our investment in these partnerships or LLCs represents our risk of loss.

Aggregate assets, liabilities and risk of loss

The aggregate assets, liabilities, and our exposure to loss from those VIEs in which we hold a variable interest, but as to which we have concluded we are not the primary beneficiary, are provided in the table below.



	March 31, 2016						September 30, 2015
	Aggregate assets		Aggregate liabilities		Our risk of loss		Aggregate assets		Aggregate liabilities		Our risk of loss
	(in thousands)
LIHTC Funds	$	3,727,454	$	1,114,185	$	73,959	$	3,317,594	$	951,465	$	42,244
NMTC Funds	65,468		67		12		65,388		40		12
Other Real Estate Limited Partnerships and LLCs	29,523		37,062		140		29,523		37,062		163
Total	$	3,822,445	$	1,151,314	$	74,111	$	3,412,505	$	988,567	$	42,419

VIEs where we hold a variable interest but are not required to consolidate

Managed Funds

As described in Note 2 on page 121 of our 2015 Form 10-K, we have subsidiaries which serve as the general partner of the Managed Funds. For the Managed Funds, the primary beneficiary assessment applies prior accounting guidance which assesses who will absorb a majority of the entity’s expected losses, receive a majority of the entity’s expected residual returns, or both. Based upon the outcome of our assessments, we have determined that we are not required to consolidate the Managed Funds.

The aggregate assets, liabilities, and our exposure to loss from Managed Funds in which we hold a variable interest as of the dates indicated are provided in the table below:



	March 31, 2016						September 30, 2015
	Aggregate assets		Aggregate liabilities		Our risk of loss		Aggregate assets		Aggregate liabilities		Our risk of loss
	(in thousands)
Managed Funds	$	98,168	$	577	$	5,005	$	83,132	$	22	$	53