Company Website:
http://www.amrealtytrust.com
DALLAS -- (Business Wire)
American Realty Investors, Inc. (NYSE:ARL), a Dallas-based real estate
investment company, today reported results of operations for the second
quarter ended June 30, 2013. ARL announced today that the Company
reported net gain applicable to common shares of $7.7 million or $0.67
per diluted earnings per share, as compared to a net gain applicable to
common shares of $4.1 million or $0.35 per diluted earnings per share
for the same period ended 2012.
The Company has shown an unwavering commitment to fortify our portfolio
and streamline our operational activity; while at the same time
maintaining our commitment to creating value. We are pleased that we are
seeing improvements in our operations from these endeavors and will
continue to adapt to market challenges with an eye on both near term
economic challenges and long-term prospects as the real estate market
improves.
Our apartment portfolio continues to thrive in the current economic
conditions with occupancies averaging over 95%. We continue to work
aggressively to attract new tenants and strive for continuous
improvement of our properties in order to maintain our existing tenants.
We have seen positive signs from the commercial market within the last
three months, with new leases being signed and an increase in traffic
and we look forward to growth in our commercial products in the near
future.
Rental and other property revenues have remained in line during the
three months ended June 30, 2013 as they were in the prior period.
Property operating expenses were $12.5 million for the three months
ended June 30, 2013. This represents a decrease of $0.8 million, as
compared to the prior period expense of $13.3 million. Within the
apartment portfolio, there was an increase of $0.2 million in the same
properties due to an increase in real estate taxes for several
properties in the current period. Within the commercial portfolio, the
same properties decreased by $1.2 million due to real estate tax refunds
from protests and litigations for several properties.
General and administrative expenses were $2.0 million for the three
months ended June 30, 2013. This represents an increase of $1.1 million,
as compared to the prior period expenses of $0.9 million due to an
increase in professional services and cost reimbursements due to our
Advisor.
Interest income was $3.5 million for the three months ended June 30,
2013. This represents a decrease of $1.2 million, as compared to the
prior period interest income of $4.7 million. This decrease was mainly
due to cash received on one of the surplus cash flow notes from Unified
Housing Foundation, Inc., in the prior period. There were refinance
proceeds received which allowed for the recognition of previously
deferred interest income. This decrease was offset by an agreement made
on January 1, 2013, where the Company extended the maturity on the
surplus cash flow notes receivable from UHF for an additional term of
five years in exchange for the early termination of the preferred
interest rate. The original notes gave a five-year period of preferred
interest rate at 5.25%, before returning to the original note rate of
12.0%.
Other income was $149,000 for the three months ended June 30, 2013. This
represents a decrease of $2.1 million, as compared to the prior period
other income of $2.2 million. The prior year income relates to the
agreement between UHF and TCI for consulting services related to the
development of apartment projects. There were no development projects in
progress during the current period.
Mortgage and loan interest expense was $11.1 million for the three
months ended June 30, 2013. This represents a decrease of $1.0 million,
as compared to the prior period interest expense of $12.1 million. The
majority of the increase was a result of the refinances closed with
long-term, low interest rates.
Deferred borrowing costs amortization was $1.0 million for the three
months ended June 30, 2013. This represents a decrease of $1.0 million
as compared to the prior period expense of $2.0 million due to the
higher loan deferred borrowing costs written off upon the refinance into
a new mortgage note in the prior period than in the current period.
Loan charges and prepayment penalties were $3.4 million for the three
months ended June 30, 2013. This represents a decrease of $0.4 million,
as compared to the prior period expense of $3.8 million due to the
prepayment penalties from the refinancing of several existing mortgage
notes. There were more refinances completed in the prior period than in
the current period.
Gain on land sales decreased for the three months ended June 30, 2013 as
compared to the prior period. We had no land sales in the current
period. In the prior period, we sold 84.75 acres of land in five
separate transactions for an aggregate sales price of $12.7 million and
recorded a gain of $4.7 million.
Discontinued operations relates to properties that were either sold or
held for sale as of the period ended June 30, 2013. Properties sold in
2013 have been reclassified to discontinued operations for current and
prior year reporting periods. In 2013, we sold two apartment complexes
and three commercial properties. In 2012, we sold two apartment
complexes, three commercial properties, and one hotel. The gain on sale
of the properties is also included in discontinued operations for those
years.
About American Realty Investors, Inc.
American Realty Investors, Inc., a Dallas-based real estate investment
company, holds a diverse portfolio of equity real estate located across
the U.S., including office buildings, apartments, shopping centers and
developed and undeveloped land. The Company invests in real estate
through direct ownership, leases and partnerships and invests in
mortgage loans on real estate. The Company also holds mortgage
receivables. For more information, visit the Company’s website at www.americanrealtyinvest.com.
AMERICAN REALTY INVESTORS, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(unaudited) |
|
|
|
| For the Three Months Ended |
|
|
| For the Six Months Ended |
| | | June 30, | | | | June 30, |
| | | 2013 |
|
| 2012 | | | | 2013 |
|
| 2012 |
| | | (dollars in thousands, except share and per share amounts) |
Revenues: | | | | | | | | | | | | | |
Rental and other property revenues (including $166 and $167 for the
three months and $331 and $335 for the six months ended 2013 and
2012 respectively from related parties)
| | |
$
|
27,182
| | | |
$
|
27,284
| | | | |
$
|
53,973
| | | |
$
|
53,912
| |
| | | | | | | | | | | | |
|
Expenses: | | | | | | | | | | | | | |
Property operating expenses (including $194 and $244 for the three
months and $424 and $509 for the six months ended 2013 and 2012
respectively from related parties)
| | | |
12,544
| | | | |
13,253
| | | | | |
25,577
| | | | |
26,116
| |
Depreciation and amortization
| | | |
5,445
| | | | |
4,941
| | | | | |
10,304
| | | | |
9,918
| |
General and administrative (including $1,044 and $1,017 for the
three months and $1,986 and $1,936 for the six months ended 2013 and
2012 respectively from related parties)
| | | |
2,043
| | | | |
919
| | | | | |
4,257
| | | | |
3,777
| |
Provision on impairment of notes receivable and real estate assets
| | | |
800
| | | | |
-
| | | | | |
800
| | | | |
-
| |
Advisory fee to related party
| | |
|
2,487
|
| | |
|
2,700
|
| | | |
|
5,042
|
| | |
|
5,359
|
|
Total operating expenses
| | |
|
23,319
|
| | |
|
21,813
|
| | | |
|
45,980
|
| | |
|
45,170
|
|
Operating income
| | | |
3,863
| | | | |
5,471
| | | | | |
7,993
| | | | |
8,742
| |
| | | | | | | | | | | | |
|
Other income (expense): | | | | | | | | | | | | | |
Interest income (including $3,420 and $4,624 for the three months
and $6,493 and $7,865 for the six months ended 2013 and 2012
respectively from related parties)
| | | |
3,512
| | | | |
4,723
| | | | | |
7,053
| | | | |
8,063
| |
Other income (including $0 and $1,500 for the three months and $0
and $3,000 for the six months ended 2013 and 2012 respectively from
related parties)
| | | |
149
| | | | |
2,235
| | | | | |
2,685
| | | | |
3,981
| |
Mortgage and loan interest (including $581 and $931 for the three
months and $865 and $1,853 for the six months ended 2013 and 2012
respectively from related parties)
| | | |
(11,065
|
)
| | | |
(12,061
|
)
| | | | |
(22,169
|
)
| | | |
(24,488
|
)
|
Deferred borrowing costs amortization
| | | |
(960
|
)
| | | |
(1,975
|
)
| | | | |
(3,436
|
)
| | | |
(2,887
|
)
|
Loan charges and prepayment penalties
| | | |
(3,380
|
)
| | | |
(3,769
|
)
| | | | |
(7,362
|
)
| | | |
(6,161
|
)
|
Loss on sale of investments
| | | |
-
| | | | |
-
| | | | | |
-
| | | | |
(362
|
)
|
Earnings from unconsolidated investees
| | |
|
(25
|
)
| | |
|
33
|
| | | |
|
188
|
| | |
|
150
|
|
Total other expenses
| | |
|
(11,769
|
)
| | |
|
(10,814
|
)
| | | |
|
(23,041
|
)
| | |
|
(21,704
|
)
|
Loss before gain on land sales, non-controlling interest, and taxes
| | | |
(7,906
|
)
| | | |
(5,343
|
)
| | | | |
(15,048
|
)
| | | |
(12,962
|
)
|
Gain (loss) on land sales
| | |
|
-
|
| | |
|
4,738
|
| | | |
|
(35
|
)
| | |
|
3,716
|
|
Loss from continuing operations before tax
| | | |
(7,906
|
)
| | | |
(605
|
)
| | | | |
(15,083
|
)
| | | |
(9,246
|
)
|
Income tax benefit
| | |
|
6,423
|
| | |
|
2,217
|
| | | |
|
8,931
|
| | |
|
2,625
|
|
Net income (loss) from continuing operations
| | | |
(1,483
|
)
| | | |
1,612
| | | | | |
(6,152
|
)
| | | |
(6,621
|
)
|
Discontinued operations:
| | | | | | | | | | | | | |
Income (loss) from discontinued operations
| | | |
276
| | | | |
1,666
| | | | | |
216
| | | | |
(757
|
)
|
Gain on sale of real estate from discontinued operations
| | | |
18,074
| | | | |
4,668
| | | | | |
25,301
| | | | |
8,256
| |
Income tax expense from discontinued operations
| | |
|
(6,423
|
)
| | |
|
(2,217
|
)
| | | |
|
(8,931
|
)
| | |
|
(2,625
|
)
|
Net income from discontinued operations
| | | |
11,927
| | | | |
4,117
| | | | | |
16,586
| | | | |
4,874
| |
Net income (loss)
| | | |
10,444
| | | | |
5,729
| | | | | |
10,434
| | | | |
(1,747
|
)
|
Net (income) loss attributable to non-controlling interest
| | |
|
(2,090
|
)
| | |
|
(1,064
|
)
| | | |
|
(1,706
|
)
| | |
|
112
|
|
Net income (loss) attributable to American Realty Investors, Inc.
| | | |
8,354
| | | | |
4,665
| | | | | |
8,728
| | | | |
(1,635
|
)
|
Preferred dividend requirement
| | |
|
(613
|
)
| | |
|
(613
|
)
| | | |
|
(1,226
|
)
| | |
|
(1,226
|
)
|
Net income (loss) applicable to common shares
| | |
$
|
7,741
|
| | |
$
|
4,052
|
| | | |
$
|
7,502
|
| | |
$
|
(2,861
|
)
|
| | | | | | | | | | | | |
|
Earnings per share - basic | | | | | | | | | | | | | |
Loss from continuing operations
| | |
$
|
(0.36
|
)
| | |
$
|
(0.01
|
)
| | | |
$
|
(0.79
|
)
| | |
$
|
(0.67
|
)
|
Income from discontinued operations
| | |
|
1.03
|
| | |
|
0.36
|
| | | |
|
1.44
|
| | |
|
0.42
|
|
Net income (loss) applicable to common shares
| | |
$
|
0.67
|
| | |
$
|
0.35
|
| | | |
$
|
0.65
|
| | |
$
|
(0.25
|
)
|
| | | | | | | | | | | | |
|
Earnings per share - diluted | | | | | | | | | | | | | |
Loss from continuing operations
| | |
$
|
(0.36
|
)
| | |
$
|
(0.01
|
)
| | | |
$
|
(0.79
|
)
| | |
$
|
(0.67
|
)
|
Income from discontinued operations
| | |
|
1.03
|
| | |
|
0.36
|
| | | |
|
1.44
|
| | |
|
0.42
|
|
Net income (loss) applicable to common shares
| | |
$
|
0.67
|
| | |
$
|
0.35
|
| | | |
$
|
0.65
|
| | |
$
|
(0.25
|
)
|
| | | | | | | | | | | | |
|
Weighted average common share used in computing earnings per share
| | | |
11,525,389
| | | | |
11,525,389
| | | | | |
11,525,389
| | | | |
11,525,389
| |
Weighted average common share used in computing diluted earnings per
share
| | | |
11,525,389
| | | | |
11,525,389
| | | | | |
11,525,389
| | | | |
11,525,389
| |
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
Amounts attributable to American Realty Investors, Inc. | | | | | | | | | | | | | |
Income (loss) from continuing operations
| | |
$
|
(3,573
|
)
| | |
$
|
548
| | | | |
$
|
(7,858
|
)
| | |
$
|
(6,509
|
)
|
Income from discontinued operations
| | |
|
11,927
|
| | |
|
4,117
|
| | | |
|
16,586
|
| | |
|
4,874
|
|
Net income (loss) applicable to American Realty Investors, Inc.
| | |
$
|
8,354
|
| | |
$
|
4,665
|
| | | |
$
|
8,728
|
| | |
$
|
(1,635
|
)
|
| | | | | | | | | | | | | | | | | | | | |
|
|
AMERICAN REALTY INVESTORS, INC. |
CONSOLIDATED BALANCE SHEETS |
(unaudited) |
|
|
| |
|
| |
| | | June 30, | | | December 31, |
| | | 2013 | | | 2012 |
| | | (dollars in thousands, except share and par value
amounts) |
Assets | | | | | | |
Real estate, at cost
| | |
$
|
1,004,999
| | | |
$
|
1,031,632
| |
Real estate held for sale at cost, net of depreciation ($0 for 2013
and $4,393 for 2012)
| | | |
-
| | | | |
17,040
| |
Real estate subject to sales contracts at cost, net of depreciation
($1,773 and $15,948 in 2013 and 2012)
| | | |
27,682
| | | | |
42,286
| |
Less accumulated depreciation
| | |
|
(159,574
|
)
| | |
|
(160,525
|
)
|
Total real estate
| | | |
873,107
| | | | |
930,433
| |
Notes and interest receivable
| | | | | | |
Performing (including $111,898 and $114,275 in 2013 and 2012 from
related parties)
| | | |
118,968
| | | | |
120,998
| |
Non-performing
| | | |
4,226
| | | | |
4,175
| |
Less allowance for estimated losses (including $15,962 and $18,962
in 2013 and 2012 from related parties)
| | |
|
(19,504
|
)
| | |
|
(21,704
|
)
|
Total notes and interest receivable
| | | |
103,690
| | | | |
103,469
| |
Cash and cash equivalents
| | | |
9,333
| | | | |
17,141
| |
Investments in unconsolidated investees
| | | |
10,415
| | | | |
8,168
| |
Related party receivable
| | | |
871
| | | | |
-
| |
Other assets
| | |
|
61,197
|
| | |
|
76,134
|
|
Total assets
| | |
$
|
1,058,613
|
| | |
$
|
1,135,345
|
|
| | | | | |
|
Liabilities and Shareholders’ Equity | | | | | | |
Liabilities:
| | | | | | |
Notes and interest payable
| | |
$
|
757,144
| | | |
$
|
769,201
| |
Notes related to assets held for sale
| | | |
-
| | | | |
18,915
| |
Notes related to subject to sales contracts
| | | |
21,035
| | | | |
55,976
| |
Stock-secured notes payable and margin debt
| | | |
24,818
| | | | |
25,765
| |
Related party payables
| | | |
-
| | | | |
10,922
| |
Deferred gain (including $74,303 and $71,303 in 2013 and 2012 from
sales to related parties)
| | | |
76,148
| | | | |
73,148
| |
Accounts payable and other liabilities (including $10,536 and
$15,746 in 2013 and 2012 to related parties)
| | |
|
85,278
|
| | |
|
96,314
|
|
| | | |
964,423
| | | | |
1,050,241
| |
| | | | | |
|
Shareholders’ equity:
| | | | | | |
Preferred stock, Series A: $2.00 par value, authorized 15,000,000
shares, issued and outstanding 3,353,954 shares in 2013 and 2012
(liquidation preference $10 per share), including 900,000 shares in
2013 and 2012 held by subsidiaries
| | | |
4,908
| | | | |
4,908
| |
Preferred stock, Series K: $2.00 par value, authorized, issued and
outstanding 135,000 and 0 shares in 2013 and 2012, respectively
(liquidation preference $10 per share), held by TCI (consolidated)
| | | |
-
| | | | |
-
| |
Common stock, $.01 par value, authorized 100,000,000 shares; issued
11,941,174 shares and outstanding 11,525,389 shares in 2013 and 2012
| | | |
115
| | | | |
115
| |
Treasury stock (Common Stock) at cost; 415,785 shares in 2013 and
2012 and 229,214 shares held by TCI (consolidated) as of 2013 and
2012
| | | |
(6,395
|
)
| | | |
(6,395
|
)
|
Paid-in capital
| | | |
104,367
| | | | |
105,700
| |
Retained earnings
| | | |
(44,343
|
)
| | | |
(53,071
|
)
|
Accumulated other comprehensive loss
| | |
|
(786
|
)
| | |
|
(786
|
)
|
Total American Realty Investors, Inc. shareholders' equity
| | |
|
57,866
|
| | |
|
50,471
|
|
Non-controlling interest
| | |
|
36,324
|
| | |
|
34,633
|
|
Total equity
| | |
|
94,190
|
| | |
|
85,104
|
|
Total liabilities and equity
| | |
$
|
1,058,613
|
| | |
$
|
1,135,345
|
|
Contacts:
American Realty Investors, Inc.
Investor Relations
Gene
Bertcher, 800-400-6407
investor.relations@americanrealtyinvest.com
Source: American Realty Investors, Inc.
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