Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - AMERICAN REALTY INVESTORS INC | d84216e8vk.htm |
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
|
Contact: | |
| American Realty Investors, Inc. | ||
| Investor Relations | ||
| (800) 400-6407 | ||
| investor.relations@pillarincome.com |
American Realty Investors, Inc. Reports Second Quarter 2011 Results
Dallas (August 15, 2011) — 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, 2011. ARL announced today that the Company reported, for the three months ended June 30, 2011, net
income applicable to common shares of $13.8 million or $1.20 per share, as compared to a net loss
applicable to common shares of ($14.4) million or ($1.25) per share for the same period ended
2010.
Rental and other property revenues were $37.5 million for the three months ended June 30, 2011.
This represents an increase of $1.0 million, as compared to the prior period revenues of $36.5
million. This change, by segment, is an increase in the commercial portfolio of $0.6 million, an
increase in the apartment portfolio of $0.7 million, offset by a decrease in the hotel portfolio
of $0.3 million. Our apartment portfolio has continued to thrive with the addition of several
newly developed properties and continuous improvements within our existing portfolio, which has
led to the rental growth in the second quarter. The commercial portfolio received a lease buyout
fee in the second quarter of 2011, which led to the increase in comparison to the prior year. The
hotel portfolio has suffered from the current state of the economy, resulting in higher vacancy
for the hotel rooms and lower room rates.
Property operating expenses were $21.2 million for the three months ended June 30, 2011. This
represents a decrease of $2.1 million, as compared to the prior period operating expenses of $23.3
million. This change, by segment, is a decrease in our commercial properties of $0.6 million, a
decrease in our apartment portfolio of $0.6 million, and a decrease in our in our land and other
segments of $0.9 million. Property management, in both the residential and commercial portfolios,
has been diligent in reducing overall costs and unnecessary repair and maintenance expenses
without compromising the quality of services provided. We have reduced the number of land
development projects that are in progress, thereby reducing expenses from the year prior.
General and administrative expenses were $4.1 million for the three months ended June 30, 2011.
This represents an increase of $1.4 million, as compared to the prior period general and
administrative expenses of $2.7 million. This change is primarily due to an increase in legal
expense accruals. The Company accrues a liability each month to reserve for legal fees unbilled or
potential litigation expenses.
Mortgage and loan interest expense was $17.7 million for the three months ended June 30, 2011.
This represents a decrease of $2.6 million, as compared to the prior period interest expense of
$20.3 million. This change, by segment, is a decrease in our commercial properties of $1.1
million, a decrease in our apartment portfolio of $0.3 million, and a decrease in our land
portfolio of $0.9 million and a decrease in our other portfolio of $0.3 million. The decrease in
the apartment portfolio is primarily due to loans refinanced in 2010 at a lower interest rate,
offset by the addition of several newly developed residential properties. Several land parcels
were sold during the past year and satisfied their debt obligations, thereby reducing the interest
expense.
Gain on land sales was $14.0 million for the three months ended June 30, 2011. This represents an
increase of $18.1 million as compared to the prior period loss of $4.1 million. In the current
period, we sold 1,067 acres of land in 19 separate transactions for an aggregate sales price of
$60.4 million and recorded a gain of $14.0 million. In the prior period, we sold 23.56 acres of
land in two transactions for an aggregate sales price of $17.6 million and recorded a loss $4.1
million.
Included in discontinued operations are a total of five and 20 income-producing properties as of
2011 and 2010, respectively. Properties sold in 2011 have been reclassified to discontinued
operations for the current and prior reporting periods. The sale of these properties resulted in a
gain on the sale of real estate from discontinued operations of $7.7 million and $5.7 million as
of 2011 and 2010, respectively.
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,
hotels, shopping centers and developed and undeveloped land. The Company invests in real estate
through direct equity ownership and partnerships nationwide. For more information, visit the
Company’s website at www.amrealtytrust.com.
AMERICAN REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (dollars in thousands, except share and per share amounts) | ||||||||||||||||
Revenues: |
||||||||||||||||
Rental and other property revenues (including $358 and $781 for the three months and $730 and $1,495
for the six months ended 2011 and 2010 respectively from affiliates and related parties) |
$ | 37,528 | $ | 36,548 | $ | 74,050 | $ | 74,286 | ||||||||
Expenses: |
||||||||||||||||
Property operating expenses (including $571 and $562 for the three months and $1,028 and $1,148 for
the six months ended 2011 and 2010 respectively from affiliates and related parties) |
21,169 | 23,306 | 42,627 | 45,934 | ||||||||||||
Depreciation and amortization |
6,245 | 6,780 | 12,759 | 12,996 | ||||||||||||
General and administrative (including $1,241 and $1,193 for the three months and $2,429 and $2,419
for the six months ended 2011 and 2010 respectively from affiliates and related parties) |
4,078 | 2,701 | 7,611 | 5,286 | ||||||||||||
Provision on impairment of notes receivable and real estate assets |
444 | — | 6,503 | — | ||||||||||||
Advisory fee to affiliate |
3,462 | 3,993 | 6,984 | 8,046 | ||||||||||||
Total operating expenses |
35,398 | 36,780 | 76,484 | 72,262 | ||||||||||||
Operating income (loss) |
2,130 | (232 | ) | (2,434 | ) | 2,024 | ||||||||||
Other income (expense): |
||||||||||||||||
Interest income (including $184 and 1,027 for the three months and $1,829 and $2,137 for the six
months ended 2011 and 2010 respectively from affiliates and related parties) |
1,203 | 1,326 | 1,871 | 2,828 | ||||||||||||
Other income |
551 | 1,023 | 1,765 | 1,888 | ||||||||||||
Mortgage and loan interest (including $1,271 and $890 for the three months and $1,580 and $1,735 for
the six months ended 2011 and 2010 respectively from affiliates and related parties) |
(17,731 | ) | (20,276 | ) | (34,676 | ) | (38,617 | ) | ||||||||
Earnings from unconsolidated subsidiaries and investees |
22 | (71 | ) | (73 | ) | (93 | ) | |||||||||
Gain on foreign currency translation |
— | 906 | — | 233 | ||||||||||||
Total other expenses |
(15,955 | ) | (17,092 | ) | (31,113 | ) | (33,761 | ) | ||||||||
Loss before gain on land sales, non-controlling interest, and taxes |
(13,825 | ) | (17,324 | ) | (33,547 | ) | (31,737 | ) | ||||||||
Gain (loss) on land sales |
14,029 | (4,121 | ) | 19,373 | (4,115 | ) | ||||||||||
Loss from continuing operations before tax |
204 | (21,445 | ) | (14,174 | ) | (35,852 | ) | |||||||||
Income tax benefit |
2,469 | 1,454 | 3,521 | 2,188 | ||||||||||||
Net loss from continuing operations |
2,673 | (19,991 | ) | (10,653 | ) | (33,664 | ) | |||||||||
Discontinued operations: |
||||||||||||||||
Loss from discontinued operations |
(625 | ) | (1,507 | ) | (1,756 | ) | (1,221 | ) | ||||||||
Gain on sale of real estate from discontinued operations |
7,679 | 5,660 | 11,816 | 5,660 | ||||||||||||
Income tax expense from discontinued operations |
(2,469 | ) | (1,454 | ) | (3,521 | ) | (1,554 | ) | ||||||||
Net income from discontinued operations |
4,585 | 2,699 | 6,539 | 2,885 | ||||||||||||
Net income (loss) |
7,258 | (17,292 | ) | (4,114 | ) | (30,779 | ) | |||||||||
Net gain attributable to non-controlling interests |
7,175 | 3,543 | 9,345 | 5,119 | ||||||||||||
Net income (loss) attributable to American Realty Investors, Inc. |
14,433 | (13,749 | ) | 5,231 | (25,660 | ) | ||||||||||
Preferred dividend requirement |
(613 | ) | (622 | ) | (1,230 | ) | (1,244 | ) | ||||||||
Net income (loss) applicable to common shares |
$ | 13,820 | $ | (14,371 | ) | $ | 4,001 | $ | (26,904 | ) | ||||||
Earnings per share — basic |
||||||||||||||||
Income (loss) from continuing operations |
$ | 0.80 | $ | (1.48 | ) | $ | (0.22 | ) | $ | (2.59 | ) | |||||
Income from discontinued operations |
0.40 | 0.23 | 0.57 | 0.25 | ||||||||||||
Net income (loss) applicable to common shares |
$ | 1.20 | $ | (1.25 | ) | $ | 0.35 | $ | (2.34 | ) | ||||||
Earnings per share — diluted |
||||||||||||||||
Income (loss) from continuing operations |
$ | 0.80 | $ | (1.48 | ) | $ | (0.22 | ) | $ | (2.59 | ) | |||||
Income from discontinued operations |
0.40 | 0.23 | 0.57 | 0.25 | ||||||||||||
Net income (loss) applicable to common shares |
$ | 1.20 | $ | (1.25 | ) | $ | 0.35 | $ | (2.34 | ) | ||||||
Weighted average common share used in computing earnings per share |
11,525,389 | 11,510,322 | 11,509,341 | 11,512,169 | ||||||||||||
Weighted average common share used in computing diluted earnings per share |
11,525,389 | 11,510,322 | 11,509,341 | 11,512,169 | ||||||||||||
Amounts attributable to American Realty Investors, Inc. |
||||||||||||||||
Income (loss) from continuing operations |
$ | 9,848 | $ | (16,448 | ) | $ | (1,308 | ) | $ | (28,545 | ) | |||||
Income from discontinued operations |
4,585 | 2,699 | 6,539 | 2,885 | ||||||||||||
Net income (loss) |
$ | 14,433 | $ | (13,749 | ) | $ | 5,231 | $ | (25,660 | ) | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
AMERICAN REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
CONSOLIDATED BALANCE SHEETS
(unaudited)
| June 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
| (dollars in thousands, except share and | ||||||||
| par value amounts) | ||||||||
Assets |
||||||||
Real estate, at cost |
$ | 1,081,686 | $ | 1,170,214 | ||||
Real estate
subject to sales contracts at cost, net of depreciation ($93,462 and $75,639 in 2011 and 2010) |
225,836 | 295,921 | ||||||
Less accumulated depreciation |
(104,765 | ) | (133,550 | ) | ||||
Total real estate |
1,202,757 | 1,332,585 | ||||||
Notes and interest receivable |
||||||||
Performing (including $80,557 and $89,982 in 2011 and 2010 from affiliates and related parties) |
87,519 | 99,839 | ||||||
Non-performing |
3,141 | 3,123 | ||||||
Less allowance for estimated losses (including $8,962 and $9,926 in 2011 and 2010 from affiliates and
related parties) |
(13,384 | ) | (14,348 | ) | ||||
Total notes and interest receivable |
77,276 | 88,614 | ||||||
Cash and cash equivalents |
10,479 | 12,649 | ||||||
Investments in unconsolidated subsidiaries and investees |
12,138 | 12,491 | ||||||
Affiliate receivable |
4,477 | — | ||||||
Other assets (including $39 in 2011 and $164 in 2010 from affiliates and related parties) |
94,224 | 110,936 | ||||||
Total assets |
$ | 1,401,351 | $ | 1.557,275 | ||||
Liabilities and Shareholders’ Equity |
||||||||
Liabilities: |
||||||||
Notes and interest payable |
$ | 819,513 | $ | 913,134 | ||||
Notes related to subject to sales contracts |
281,246 | 315,547 | ||||||
Stock-secured notes payable and margin debt |
26,120 | 23,100 | ||||||
Affiliate payables |
— | 12,219 | ||||||
Deferred
gain (including $88,803 and $100,212 in 2011 and 2010 from sales to related parties) |
95,589 | 98,504 | ||||||
Accounts payable and other liabilities (including $1,779 and $1,539 in 2011 and 2010 to affiliates and related
parties) |
76,204 | 88.506 | ||||||
| 1,298,672 | 1,451,010 | |||||||
Shareholders’ equity: |
||||||||
Preferred stock, $2.00 par value, authorized 15,000,000 shires, issued and outstanding Series A, 3,353,954
shares in 2011 and $3,389,546 in 2010 (liquidation preference $10 per share), including 900,000 shares in 2011
and 2010 held by subsidiaries |
4,908 | 4,979 | ||||||
Common stock, $.01 par value, authorized 100,000,000 shares;
issued 11,941,174 and 11,874,138, and
outstanding 11,525,389 and 11,466,853 shares in 2011 and in 2010 |
115 | 114 | ||||||
Treasury
stock at cost; 415,785 and 407,285 shares in 2011 and 2010 and
241,247 and 276,972 shares held by
TCI (consolidated) as of 2011 and 2010 |
(6,395 | ) | (6,333 | ) | ||||
Paid-in capital |
110,916 | 110.419 | ||||||
Retained earnings |
(42,545 | ) | (47,776 | ) | ||||
Accumulated other comprehensive income |
(786 | ) | (786 | ) | ||||
Total American Realty Investors, Inc. shareholders’ equity |
66,213 | 60,617 | ||||||
Non-controlling interest |
36,466 | 45,648 | ||||||
Total equity |
102,679 | 106,265 | ||||||
Total liabilities and equity |
$ | 1,401,351 | $ | 1,557,275 | ||||
The
accompanying notes are an integral part of these consolidated financial statements.