Good day, ladies and gentlemen, and welcome to the second quarter 2008 Resource Capital Corporation earnings conference call. My name is Nikita and it will be my pleasure to assist you today. At this time, all participants are in listen-only mode. (Operator instructions) As a reminder, this conference is being recorded for replay purposes. I'd now like to introduce your host for today's call Jonathan Cohen, President and CEO. Please proceed.

Thank you for joining the Resource Capital Corp. conference call for the second quarter of fiscal 2008. I am Jonathan Cohen, President and CEO of Resource Capital Corp. Before I begin, I would like to ask Purvi Kamdar, our Director of Investor Relations to read the safe harbor statement.

Thank you, Jonathan. When used in this conference call, the words “believe,” “anticipate,” “expect,” and similar expressions are intended to identify forward-looking statements. Although the company believes that these forward-looking statements are based on reasonable assumptions, such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from these contained in the forward-looking statements. These risks and uncertainties are discussed in the company's reports filed with the SEC, including its reports on the Forms 8-K, 10-Q, and 10-K, and in particular, item one on the Form 10-K report under the title risk factors. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as the date hereof. The company undertakes no obligation to update any of these forward-looking statements. With that, I'll turn it back to Jonathan.

Thank you, Purvi. First, a few highlights. For the quarter ended June 30th, 2008, RCC reported adjusted net income, a non-GAAP measure that excludes the effect of certain non-cash charges and non-operating transactions of $9.3 million, or $0.37 per share diluted. For the quarter ended June 30th, 2008, RCC reported REIT taxable income of $9.4 million, or $0.38 per share diluted, as compared to $10.5 million, or $0.42 per share diluted, for the quarter ended June 30th, 2007, a decrease of $1.1 million or 10%. Although we are unhappy about having a loss for the quarter, with the exception of a defaulted loan that we disclosed in the first quarter which we believe had little value and we fully reserve for this quarter, we continue to see generally solid credit performance from our real estate portfolio. Of course, in this environment, we are tremendously focused on all of our credit. On the commercial lending side, credits also remain – generally remain solid, but we have added to our general reserves and sold out of some names to protect our principal and build par within our vehicles. Our portfolio income, which funds virtually all of our dividends seems to us to be very much intact. We declared and paid a dividend of $0.41 for the first quarter, and are adjusting our guidance for the next two quarters to a range of $0.37 to $0.39 per quarter. The span of our guidance is due to uncertainty about exit fees and participations. For instance, we achieved adjusted net income of $0.37 this quarter without any exit fees or other fees of substance. This is a typical for our business. We believe that the general portfolio remains in good shape, and we are hopeful to start to see some widening on the asset side…

Thanks, Jonathan. RCC's commercial mortgage portfolio has a current committed balance of approximately $911 million, across a diverse and granular pool of 51 separate loans. Our portfolio of commercial mortgage positions remains in components as follows. 66% whole loans, 24% mezzanine loans, and 10% B-notes. Our collateral base is diversified across the major asset categories in geographically different markets with a portfolio breakdown of 30% multifamily, 22% office, 24% hotel, 17% retail, and 7% other, such as flex office, industrial and self-storage. Credit across the portfolio remains strong with a majority of the properties performing well above our pro forma underwriting and ahead of schedule. With the exception of the small mezzanine loan default that we disclosed last quarter, our commercial mortgage portfolio continues to be current with no defaults. With regard to the one defaulted loan position that we are writing off in its entirety this quarter it is of interest to note that this loan was not a victim of the credit crisis, but rather a combination of factors that were not within the sponsors’ control which combined to significantly erode the value of the underlying collateral. The defaulted loan had a book value of $11.6 million and was secured by the equity interests of two regional malls. From a value perspective, one of the two malls was substantially larger and represented about 75% of the collateral value and a large majority of the free cash flows supporting the loan. I've briefly touched on some of the facts that led to the defaulted loan on our last quarterly call but to refresh those details, as a result of a merger of two anchors in the larger of the two malls, one anchor closed, and therefore, co-tenancy provisions for other anchors and in-lines like were triggered. As tenants opted…

Thanks, Dave. I will now give you some statistics on our corporate bank loan portfolio. We have $951 million of bank loans encompassing over 30 industries. Our top industries are healthcare, diversified, printing and publishing, chemicals, and broadcast and entertainment. As of the end of June, our average loan asset yields 2.28% over LIBOR, and our liabilities are costing us 47 basis points over LIBOR. We've been able to buy loans at a substantial discount over the last several months and continue to see widening on the asset side. Now I will ask Dave Bryant, our CFO, to walk us through the financials.

Thank you, Jonathan. I'll now cover our financial highlights for the quarter ended June 30th. Our estimated retaxable income for the quarter ended June 30, was $9.4 million, or $0.38 per common share. For the second quarter in 2008, our board declared a dividend of $0.41 per common share or in total of $10.4 million. This brings our year-to-date results to $21.5 million of retaxable income or $0.86 per common share with an associated dividend of $0.82 per share per payout ratio of approximately 95%. At June 30, RCC's investment portfolio was financed with approximately $1.7 billion of total indebtedness and included $1.5 billion of CDO senior notes; $85.8 million outstanding under a secured term facility, $64.2 million in a three-year non-recourse commercial real estate repurchase facility, and $4.6 million in other repurchase agreements. We also have $51.5 million sourced from our unsecured junior subordinated debentures related to our two TruPS issuances in 2006. We ended the period with $250.3 million in book equity. RCC's borrowings of $1.7 billion had a weighted average interest rate of 3.44% at June 30th. To-date, our non-recourse commercial real estate repurchase facility is slightly higher at $66.6 million with an approximate $121.5 million in collateral pledged against that facility for an advanced rate of approximately 55%. Of note since quarter-end, we've eliminated all but 880,000 of short-term repurchase agreement debt which is securitized by collateral with a face value of $4 million. We consider leverage ratio from two positions. As Jon noted earlier, our economic book value after adjusting for unrealized losses in our CMBS portfolio and unrealized losses from our cash flow hedges is $11.34 per common share at June 30. Our leverage based on economic book value is 6.0 times. When we consider our TruPS issuances, which have a remaining term of…

Thanks, Dave. At this time, I think we're finished. And we'll open the conference call for questions.

(Operator instructions) Our first question comes from the line of Douglas Harter of Credit Suisse. Go ahead. Douglas Harter – Credit Suisse: Thanks. I was wondering first if you could talk about where you think you stand in terms of reducing your non-CDO debt. How much more of that you think you have to do and when do you think you might have some be able to use some of the cash that you have.

That's a very good question, Doug. Thank you. We have been in the process over the last couple few months of basically deleveraging as you've seen on our recourse line to 880, $880,000 of virtually nothing. And now the process going forward is to deleverage the recourse – the non-recourse line that's outside the CDO which is a little bit over $60 million and we’re in the process of doing it. As Dave said, we've just gotten a repayment, we've been told that there are a few more coming down the pipe which we're pretty excited about. And I think over the next quarter or two you will see some deleveraging and also it's becoming more active in putting money out and seizing opportunity where others in very safe lending environment where others just don't have any option. Douglas Harter – Credit Suisse: Great. Thank you. And then on the dividend guidance, does that incorporate the fact that the loan that you took the provision for this quarter, will actually charge-off and negatively impact adjusted EPS?

Yes. We didn't have any income from that loan this quarter or I believe last quarter – Douglas Harter – Credit Suisse: Correct.

So what you're seeing is not going to change going forward. The negativity to this quarter and why we're being cautious on the dividend guidance is because we haven't seen origination fees, exit fees, participations; we haven't really been able to make money other than on our portfolio income basis. So the easy answer is going forward, we never anticipated that or anything else being in our portfolio income which is producing the super majority of our dividend. Douglas Harter – Credit Suisse: I guess what I was trying to get to is when the loan actually charges off is that a negative to the adjusted EPS or retaxable EPS number or has that negative already been (inaudible).

It's already occurred.

(inaudible).

That's in the numbers. Douglas Harter – Credit Suisse: That's in the numbers?

Yes. Douglas Harter – Credit Suisse: All right. Thank you.

(Operator instructions) And there are no additional questions at this time.

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Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.