Transcontinental Realty Investors, Inc. (NYSE: TCI), a
Dallas-based real estate investment company is reporting its
continued growth in both revenue and net operating income for 2017.
Revenue increased to $125.2 million in 2017 as compared to $118.4
million in 2016 while net operating income increased to $20.1
million for 2017 compared to $17.6 million for 2016. Further the
Company is continuing its growth strategy into the future with
fourteen additional apartment projects in various stages of
development. As these new projects come to completion our strategic
model of focusing on our multifamily portfolio for the future
growth of the Company will continue. We are on track and well
positioned operationally and strategically for the opportunities
ahead.
Management will continue its plan for growth from its operating
properties and expects to reinvest in areas that will complement
this growth; further management will maintain strong attention to
all details of its operations including appropriate expense
controls.
For the twelve months ended December 31, 2017, the Company
reported net loss applicable to common shares of $16.7 million or
($1.92) per diluted earnings per share compared to a net loss
applicable to common shares of $0.9 million or ($0.10) per diluted
earnings per share for the year ended December 31, 2016. These
amounts were impacted by gains on the sale of property of $14.7
million in 2017 as compared to $19.3 million in 2016. In addition
during 2016 and 2017 a subsidiary of TCI raised $115 million
through the sale of bonds which are traded on the Israeli stock
exchange. In 2017 TCI recorded a non-cash foreign currency loss of
$4.6 million.
Revenues
Rental and other property revenues were $125.2 million for the
year ended December 31, 2017. This represents an increase of $6.7
million, as compared to the prior year revenues of $118.5 million.
The change by segment is an increase in the apartment portfolio of
$6.2 million and an increase in the commercial portfolio of
approximately $0.5 million. We purchased four apartment
communities during the year ended December 31, 2016, which produced
rental revenue of $8.3 million and $2.0 million during the
years ended December 31, 2017 and 2016, respectively, for a net
increase of $6.3 million. In addition, we purchased
one apartment property during 2017 that produced revenues of
$0.8 million in rental revenues.
Expense
Property operating expenses were $63.1 million for the year
ended December 31, 2017. This represents an increase of $1.2
million, as compared to the prior year operating expenses of $61.9
million. The growth in our apartment portfolio resulted in a $2.9
million increase in property operating expenses. The Company added
a net 723 units during 2016 and 201 units during 2017. Property
operating expenses for our commercial portfolio decreased $1.8
million. In addition, we had a decrease in property operating
expenses for our land portfolio of $1.0 million.
Depreciation and amortization expenses were $25.6 million for
the year ended December 31, 2017. This represents an increase of
$1.9 million as compared to prior year depreciation of $23.7
million. The increase is primarily due to the growth in our
apartment portfolio which had an increase of $1.6 million
year-over-year.
Advisory fees were $10.0 million for the year ended December 31,
2017. This represents an increase of $0.5 million compared to the
prior year advisory fees of $9.5 million. Advisory fees are
computed based on a gross asset fee of 0.0625% per month (0.75% per
annum) of the average of the gross asset value.
Other income (expense)
Mortgage and loan interest expense was $59.9 million for the
year ended December 31, 2017. This represents an increase of $6.8
million compared to the prior year expense of $53.1 million. The
change by segment is an increase in the other portfolio of $9.7
million, an increase in the commercial portfolio of $0.4 million,
partially offset by a decrease in the apartment portfolio of $3.0
million and a decrease in the land portfolio of $0.2 million.
Within the other portfolio, the increase is due to incurring new
mezzanine debt obligations. Within the apartment portfolio, the
majority of the increase is due to the acquisition of a new
property, partially offset by the refinancing of six loans during
2017 at lower rates.
Gain on sale of income-producing properties was $9.8 million for
the year ended December 31, 2017 and $16.2 million for the year
ended December 31, 2016. The gain recorded in 2017 represents the
recognition of deferred income from a property sale in a prior
year. Gain on land sales was $4.9 million and $3.1 million for the
years ended December 31, 2017 and 2016, respectively.
About Transcontinental Realty Investors, Inc.
Transcontinental Realty Investors, Inc., a Dallas-based real
estate investment company, holds a diverse portfolio of equity real
estate located across the U.S., including apartments, office
buildings, 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. For
more information, visit the Company’s website at
www.transconrealty-invest.com.
TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS For the
Years Ended December 31, 2017
2016 2015 (dollars in
thousands, except per share amounts) Revenues: Rental
and other property revenues (including $839, $708 and $726 for the
year ended 2017, 2016 and 2015, respectively, from related parties)
$ 125,233 $ 118,471 $ 102,220
Expenses: Property
operating expenses (including $929, $865 and $740 for the year
ended 2017, 2016 and 2015, respectively, from related parties)
63,056 61,918 52,257 Depreciation and amortization 25,558 23,683
21,299 General and administrative (including $3,120, $3,574 and
$3,105 for the year ended 2017, 2016 and 2015, respectively, from
related parties) 6,269 5,476 5,508 Provision on impairment of real
estate assets - - 5,300 Net income fee to related party 250 257 187
Advisory fee to related party 9,995 9,490
8,368 Total operating expenses 105,128
100,824 92,919 Net operating
income 20,105 17,647 9,301
Other income (expense): Interest
income (including $11,485, $13,348 and $10,071 for the year ended
2017, 2016 and 2015, respectively, from related parties) 13,862
14,670 10,687 Other income 625 1,816 71 Mortgage and loan interest
(including $0, $568, and $0 for the year ended 2017, 2016 and 2015,
respectively, from related parties) (59,944 ) (53,088 ) (46,541 )
Foreign currency translation loss (4,536 ) - (1 ) Income (loss)
from unconsolidated joint ventures and investees 26 (26 ) 41
Litigation settlement - - (352 )
Total other expenses (49,967 ) (36,628 )
(36,095 ) Loss before gain on sales, non-controlling interest and
taxes (29,862 ) (18,981 ) (26,794 ) Gain on sale of
income-producing properties (including recognition of $9,842, $0,
and $0 previous deferred gains in 2017, 2016, 2015 respectively)
9,842 16,207 - Gain on land sales 4,884 3,121
18,911 Net income (loss) from continuing
operations before taxes (15,136 ) 347 (7,883 ) Income tax benefit
(expense) (180 ) (24 ) (517 ) Net income
(loss) from continuing operations (15,316 ) 323
(8,400 ) Discontinued operations: Net income (loss)
from discontinued operations - (2 ) 644 Gain on sale of real estate
from discontinued operations - - 735 Income tax expense from
discontinued operations - 1
(483 ) Net income from discontinued operations - (1 ) 896
Net income (loss) (15,316 ) 322 (7,504 ) Net income attributable to
non-controlling interest (499 ) (285 ) (132 )
Net income (loss) attributable to Transcontinental Realty
Investors, Inc. (15,815 ) 37 (7,636 ) Preferred dividend
requirement (900 ) (900 ) (900 ) Net income
(loss) applicable to common shares $ (16,715 ) $ (863 ) $ (8,536 )
Earnings per share - basic Net income (loss) from
continuing operations $ (1.92 ) $ (0.10 ) $ (1.08 ) Net income from
discontinued operations - - 0.10
Net income (loss) applicable to common shares $ (1.92 ) $
(0.10 ) $ (0.98 )
Earnings per share - diluted Net
income (loss) from continuing operations $ (1.92 ) $ (0.10 ) $
(1.08 ) Net income from discontinued operations -
- 0.10 Net income (loss) applicable to
common shares $ (1.92 ) $ (0.10 ) $ (0.98 ) Weighted average
common shares used in computing earnings per share 8,717,767
8,717,767 8,717,767 Weighted average common shares used in
computing diluted earnings per share 8,717,767 8,717,767 8,717,767
Amounts attributable to Transcontinental Realty
Investors, Inc. Net income (loss) from continuing operations $
(15,815 ) $ 38 $ (8,532 ) Net income (loss) from discontinued
operations - (1 ) 896 Net income
(loss) $ (15,815 ) $ 37 $ (7,636 )
TRANSCONTINENTAL REALTY INVESTORS, INC. CONSOLIDATED
BALANCE SHEETS December 31, December
31, 2017 2016
(dollars in thousands, except share and par value amounts)
Assets Real estate, at cost $ 1,112,721 $ 998,498 Real
estate subject to sales contracts at cost, net of depreciation ($0
in 2017 and $0 in 2016) 45,739 46,956 Less accumulated depreciation
(178,590 ) (154,281 ) Total real estate 979,870
891,173 Notes and interest receivable Performing (including $45,155
in 2017 and $66,086 in 2016 from related parties) 70,166
79,308 Total notes and interest receivable
70,166 79,308 Cash and cash equivalents 42,705 17,506
Restricted cash 45,637 38,227 Investments in unconsolidated
subsidiaries and investees 2,472 2,446 Receivable from related
party 111,665 101,649 Other assets 60,907
55,605 Total assets $ 1,313,422 $ 1,185,914
Liabilities and Shareholders’ Equity Liabilities:
Notes and interest payable $ 892,149 $ 835,528 Notes related to
assets held for sale 376 376 Notes related to subject to sales
contracts 1,957 5,612 Bond and bond interest payable 113,047 -
Deferred revenue (including $40,574 in 2017 and $50,689 in 2016
from related parties) 60,949 71,065 Accounts payable and other
liabilities (including $7,236 in 2017 and $6,487 in 2016 from
related parties) 36,683 48,856
1,105,161 961,437 Shareholders’ equity: Preferred stock,
Series C: $0.01 par value, authorized 10,000,000 shares, issued and
outstanding zero shares in 2017 and 2016 (liquidation preference
$100 per share). Series D: $0.01 par value, authorized, issued and
outstanding 100,000 shares in 2017 and 2016 (liquidation preference
$100 per share) 1 1 Common Stock, $0.01 par value, authorized
10,000,000 shares, issued 8,717,967 shares in 2017 and 2016 and
outstanding 8,717,767 in 2017 and 2016 87 87 Treasury stock at
cost, 200 shares in 2017 and 2016 (2 ) (2 ) Paid-in capital 268,949
269,849 Retained earnings (79,865 ) (64,050 ) Total
Transcontinental Realty Investors, Inc. shareholders' equity
189,170 205,885 Non-controlling interest 19,091
18,592 Total shareholders' equity 208,261
224,477 Total liabilities and shareholders'
equity $ 1,313,422 $ 1,185,914
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version on businesswire.com: https://www.businesswire.com/news/home/20180402005909/en/
Transcontinental Realty Investors, Inc.Investor
RelationsGene Bertcher,
800-400-6407investor.relations@transconrealty-invest.com
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