American Realty Investors, Inc. (NYSE:ARL), a Dallas-based real
estate investment company, today reported results of operations for
the first quarter ended March 31, 2011. ARL announced today that
the Company reported net loss applicable to common shares of $9.8
million or $0.86 per diluted earnings per share, as compared to a
net loss applicable to common shares of $12.5 million or $1.09 per
diluted earnings per share for the same period ended 2010.
Rental and other property revenues were $38.7 million for the
three months ended March 31, 2011. This represents a decrease of
$1.5 million, as compared to the prior period revenues of $40.2
million. This change, by segment, is a decrease in the commercial
portfolio of $2.2 million, a decrease in the hotel portfolio of
$0.3 million, and a decrease in the land and other portfolios of
$0.1 million, offset by an increase in the apartment portfolio of
$1.1 million. Within the apartment portfolio, there was an increase
of $0.5 million due to the developed properties in the lease-up
phase and an increase of $0.6 million in the same property
portfolio. Within the commercial and hotel portfolios, the decrease
is attributable to increased vacancies due to the current state of
the economy. We have directed our efforts to apartment development
and put some additional land projects on hold until the economic
conditions turn around. We are continuing to market our properties
aggressively to attract new tenants and strive for continuous
improvement of our properties in order to maintain our existing
tenants.
Property operating expenses were $23.3 million for the three
months ended March 31, 2011. This represents a decrease of $1.3
million, as compared to the prior period operating expenses of
$24.6 million. This change, by segment, is a decrease in our
commercial properties of $0.3 million, a decrease in our apartment
portfolio of $0.6 million, a decrease in our hotels of $0.1 million
and a decrease in our in our land and other segments of $0.3
million. The Company has taken great strides to reduce costs and
increase efficiency for repairs and maintenance of the
properties.
Mortgage and loan interest expense was $17.9 million for the
three months ended March 31, 2011. This represents a decrease of
$1.4 million, as compared to the prior period interest expense of
$19.3 million. This change, by segment, is a decrease in our
commercial properties of $0.5 million, a decrease in our apartment
portfolio of $0.4 million, a decrease in our hotels of $0.1 million
and a decrease in our other portfolios of $0.7 million, offset by
an increase in our land portfolio of $0.3 million. The commercial
portfolio experienced a reduction in interest expense due to a
matured loan that is being negotiated at a lower interest rate. The
decrease in the apartment portfolio is primarily due to loans that
were refinanced in 2010 at a lower interest rate. The decrease in
the other portfolio is due to a decrease in interest expense on
loan amounts due to our advisor.
Provision for impairment was $6.1 million for the three months
ended March 31, 2011. Impairment was recorded as an additional loss
of $0.9 million in the commercial properties we currently hold and
$5.2 million in the apartments we currently hold.
Gain on land sales increased for the three months ended March
31, 2011 as compared to the prior period. In the current period, we
sold 230.45 acres of land in 12 separate transactions for an
aggregate sales price of $50.1 million and recorded a gain of $5.3
million. In the prior period, we sold 0.275 acres of land in one
transaction for an sales price of $8,984 and recorded a gain of
$6,470.
Included in discontinued operations are a total of two and 17
properties as of 2011 and 2010, respectively. 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,
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) For the Three
Months Ended March 31, 2011
2010 (dollars in thousands, except share
and per share amounts) Revenues: Rental and other
property revenues (including $372 and $714 for the three months
ended 2011 and 2010 respectively from affiliates and related
parties) $ 38,741 $ 40,242
Expenses: Property
operating expenses (including $534 and $700 for the three months
ended 2011 and 2010 respectively from affiliates and related
parties) 23,255 24,553 Depreciation and amortization 7,173 6,870
General and administrative (including $1,187 and $1,226 for the
three months ended 2011 and 2010 respectively from affiliates and
related parties) 3,547 2,587 Provision on impairment of notes
receivable and real estate assets 6,059 - Advisory fee to affiliate
3,522 4,053 Total operating expenses
43,556 38,063 Operating income (loss)
(4,815 ) 2,179
Other income (expense): Interest
income (including $466 and $1,186 for the three months ended 2011
and 2010 respectively from affiliates and related parties) 668
1,502 Other income 1,467 867 Mortgage and loan interest (including
$306 and $845 for the three months ended 2011 and 2010 respectively
from affiliates and related parties) (17,862 ) (19,254 ) Earnings
from unconsolidated subsidiaries and investees (95 ) (22 ) Gain on
foreign currency translation - (673 ) Litigation settlement
- - Total other expenses (15,822 )
(17,580 ) Loss before gain on land sales, non-controlling
interest, and taxes (20,637 ) (15,401 ) Gain on land sales
5,344 6 Loss from continuing operations before
tax (15,293 ) (15,395 ) Income tax benefit 1,372
1,080 Net loss from continuing operations (13,921 )
(14,315 ) Discontinued operations: Income (loss) from discontinued
operations (217 ) 1,274 Gain on sale of real estate from
discontinued operations 4,137 - Income tax expense from
discontinued operations (1,372 ) (446 ) Net income
from discontinued operations 2,548 828 Net loss (11,373 ) (13,487 )
Net loss attributable to non-controlling interests 2,170
1,577 Net loss attributable to American Realty
Investors, Inc. (9,203 ) (11,910 ) Preferred dividend requirement
(617 ) (622 ) Net loss applicable to common shares $
(9,820 ) $ (12,532 )
Earnings per share - basic Loss
from continuing operations $ (1.08 ) $ (1.16 ) Income from
discontinued operations 0.22 0.07 Net
loss applicable to common shares $ (0.85 ) $ (1.09 )
Earnings per share - diluted Loss from continuing operations
$ (1.08 ) $ (1.16 ) Income from discontinued operations 0.22
0.07 Net loss applicable to common shares $
(0.85 ) $ (1.09 ) Weighted average common share used in
computing earnings per share 11,493,115 11,514,038 Weighted average
common share used in computing diluted earnings per share
11,493,115 11,514,038
Amounts attributable to
American Realty Investors, Inc. Loss from continuing operations
$ (11,751 ) $ (12,738 ) Income from discontinued operations
2,548 828 Net loss $ (9,203 ) $ (11,910 )
The accompanying notes are an integral part of these
consolidated financial statements.
AMERICAN
REALTY INVESTORS, INC. CONSOLIDATED BALANCE SHEETS
(unaudited) March 31, December 31,
2011 2010 (dollars in
thousands, except share and par value amounts) Assets
Real estate, at cost $ 1,047,080 $ 1,170,214 Real estate subject to
sales contracts at cost, net of depreciation ($106,728 for 2011 and
$75,639 for 2010) 354,301 295,921 Less accumulated depreciation
(107,967 ) (133,550 ) Total real estate 1,293,414
1,332,585 Notes and interest receivable Performing (including
$82,692 in 2011 and $89,982 in 2010 from affiliates and related
parties) 91,178 99,839 Non-performing 3,132 3,123 Less allowance
for estimated losses (including $9,926 in 2011 and 2010 from
affiliates and related parties) (14,348 ) (14,348 )
Total notes and interest receivable 79,962 88,614 Cash and cash
equivalents 8,393 12,649 Investments in unconsolidated subsidiaries
and investees 12,152 12,491 Affiliate receivable 4,048 - Other
assets (including $160 in 2011 and $164 in 2010 from affiliates and
related parties) 97,664 110,936 Total
assets $ 1,495,633 $ 1,557,275
Liabilities
and Shareholders’ Equity Liabilities: Notes and interest
payable $ 815,567 $ 913,134 Notes related to subject to sales
contracts 382,566 315,547 Stock-secured notes payable and margin
debt 25,598 23,100 Affiliate payables - 12,219 Deferred revenue
(including $98,473 in 2011 and $100,212 in 2010 from sales to
related parties) 102,787 104,534 Accounts payable and other
liabilities (including $1,783 in 2011 and $1,539 in 2010 to
affiliates and related parties) 79,278 88,506
1,405,796 1,457,040 Shareholders’ equity: Preferred
stock, $2.00 par value, authorized 15,000,000 shares, 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 276,972
shares held by TCI (consolidated) as of 2011 and 2010 (6,395 )
(6,333 ) Paid-in capital 90,407 88,620 Retained earnings (57,596 )
(47,776 ) Accumulated other comprehensive income (loss) (786
) (786 ) Total American Realty Investors, Inc. shareholders'
equity 30,653 38,818 Non-controlling
interest 59,184 61,417 Total equity
89,837 100,235 Total liabilities and
equity $ 1,495,633 $ 1,557,275 The
accompanying notes are an integral part of these consolidated
financial statements.
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