American Realty Investors, Inc. (NYSE: ARL), a Dallas-based real
estate investment company is reporting its continued growth in both
revenue and net operating income for 2017. Revenue increased to
$126.2 million as compared to $119.7 million in 2016, while net
income increased to $17.4 million for 2017 compared to $14.6
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 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, we reported a net
loss applicable to common shares of $9.5 million or ($0.61) per
diluted earnings per share compared to a net loss applicable to
common shares of $3.8 million or ($0.25) per diluted earnings per
share for the year ended December 31, 2016. During 2016 and 2017, a
subsidiary of the Company raised $115 million through the sale of
bonds, which are traded on the Israeli stock exchange. In 2017, ARL
recorded a non-cash foreign currency loss of $4.6 million.
Revenues
Rental and other property revenues were $126.2 million for the
year ended December 31, 2017. This represents an increase of $6.5
million compared to the prior year revenues of $119.7 million. The
change by segment is an increase in the apartment portfolio of $6.2
million and an increase in the commercial portfolio of 0.3 million,
partially offset by a decrease of $0.1 million in the other
portfolio. 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 $0.8 million in rental revenue.
Expenses
Property operating expenses were $64.1 million for the year
ended December 31, 2017. This represents an increase of $1.1
million compared to the prior year operating expenses of $63.0
million. The change by segment is an increase in the apartment
portfolio of $2.9 million, a decrease in the commercial portfolio
of $1.9 million and a decrease in the land portfolio of $0.9
million, partially offset by an increase in the other portfolio of
$1.0 million. The Company added a net 723 apartment 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 $25.7 million for
the year ended December 31, 2017. This represents an increase of
$1.9 million compared to prior year depreciation of $23.8 million.
The increase is primarily due to the growth in our apartment
portfolio, which had an increase of $2.3 million
year-over-year.
General and administrative expenses were $7.7 million dollars
for the year ended December 31, 2017. This represents an increase
of $0.6 million compared to the prior year general and
administrative expenses of $7.1 million.
There was no provision for impairment of notes receivable,
investment in real estate partnerships and real estate assets for
the years ended December 31, 2017 and December 31, 2016.
Net income fee was $0.3 million for the year ended December 31,
2017 and December 31, 2016. The net income fee paid to Pillar is
calculated at 7.5% of net income.
Advisory fees were $11.1 million for the year ended December 31,
2017. This represents an increase of $0.2 million compared to the
prior year advisory fees of $10.9 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)
Interest income was $18.9 million for the year ending December
31, 2017. This represents a decrease of $1.6 million compared to
the prior year interest income of $20.5 million dollars. This
decrease was primarily due to a decrease of $2.3 in interest on
notes receivable, partially offset by a $1.3 million increase in
interest on receivable owed from Advisor.
Other income was $4.1 million for the year ending December 31,
2017. This represents an increase of $2.0 million compared to prior
year other income of $2.1 million. The increase is primarily due to
a property with a negotiated settlement of a debt with the lender
during 2015.
Mortgage and loan interest expense was $66.1 million for the
year ended December 31, 2017. This represents an increase of $6.7
million compared to the prior year expense of $59.4 million. The
change by segment is an increase in the other portfolio of $7.4
million, an increase in the apartment portfolio of $1.7 million and
an increase in the commercial portfolio of $0.3 million, partially
offset by a decrease in the land portfolio of $2.5 million. The
increase in the apartment portfolio was primarily due to the
acquisition of new properties, partially offset by the refinancing
of five loans during 2016 at lower rates.
Gain on sale of income-producing properties was $16.7 million
and $16.2 million for the years ended December 31, 2017 and 2016
respectively. Included in the 2017 gain is $9.8 million which
recognition of a deferred gain 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 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
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) $ 126,221 $ 119,663 $ 104,188
Expenses: Property operating expenses (including
$959, $900 and $770 for the year ended 2017, 2016 and 2015,
respectively, from related parties) 64,091 62,950 54,002
Depreciation 25,679 23,785 21,418 General and administrative
(including $3,225, $4,053 and $3,855 for the year ended 2017, 2016
and 2015, respectively, from related parties) 7,691 7,119 6,893
Provision on impairment of real estate assets - - 5,300 Net income
fee to related party 250 257 492 Advisory fee to related party
11,082 10,918 9,775 Total
operating expenses 108,793 105,029
97,880 Operating income 17,428 14,634 6,308
Other income (expense): Interest income (including $16,298,
$18,864 and $15,859 for the year ended 2017, 2016 and 2015,
respectively, from related parties) 18,941 20,453 16,674 Other
income 4,082 2,091 4,106 Mortgage and loan interest (including
$6,695, $5,300 and $3,774 for the year ended 2017, 2016 and 2015,
respectively, from related parties) (66,171 ) (59,362 ) (52,477 )
Loss on the sale of investments (331 ) - (1 ) Earnings from
unconsolidated subsidiaries and investees 309 493 428 Foreign
currency translation loss (4,536 ) Litigation settlement -
- (352 ) Total other expenses
(47,706 ) (36,325 ) (31,622 ) Loss before gain on
sales, non-controlling interest and taxes (30,278 ) (21,691 )
(25,314 ) Gain on sale of income-producing properties (Including
recognition of $14,048, $0, and $0 previously deferred gains in
2017, 2016, 2015, respectively) 16,698 16,207 - Gain on land sales
4,884 3,121 21,648 Loss
from continuing operations before tax (8,696 ) (2,363 ) (3,666 )
Income tax benefit (expense) (180 ) (46 ) (517
) Net (loss) from continuing operations (8,876 )
(2,409 ) (4,183 ) Discontinued operations: 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 (loss) from discontinued operations - (1 ) 896 Net
(loss) (8,876 ) (2,410 ) (3,287 ) Net income (loss) attributable to
non-controlling interests 445 (322 )
1,327 Net (loss) attributable to American Realty
Investors, Inc. (8,431 ) (2,732 ) (1,960 ) Preferred dividend
requirement (1,105 ) (1,101 ) (1,216 ) Net
(loss) applicable to common shares $ (9,536 ) $ (3,833 ) $ (3,176 )
Earnings per share - basic Loss from continuing
operations $ (0.61 ) $ (0.25 ) $ (0.27 ) Income from discontinued
operations - - 0.06 Net
(loss) applicable to common shares $ (0.61 ) $ (0.25 ) $ (0.21 )
Earnings per share - diluted Loss from continuing
operations $ (0.61 ) $ (0.25 ) $ (0.27 ) Income from discontinued
operations - - 0.06 Net
(loss) applicable to common shares $ (0.61 ) $ (0.25 ) $ (0.21 )
Weighted average common shares used in computing earnings
per share 15,514,360 15,514,360 15,111,107 Weighted average common
shares used in computing diluted earnings per share 15,514,360
15,514,360 15,111,107
Amounts attributable to
American Realty Investors, Inc. Loss from continuing operations
$ (8,431 ) $ (2,731 ) $ (2,856 ) Income from discontinued
operations - (1 ) 896 Net (loss)
$ (8,431 ) $ (2,732 ) $ (1,960 )
AMERICAN 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 $ 1,117,429 $ 1,017,684 Real
estate subject to sales contracts at cost, net of depreciation
48,234 48,919 Less accumulated depreciation (177,546 )
(165,597 ) Total real estate 988,117 901,006 Notes and
interest receivable Performing (including $69,320 in 2017 and
$125,799 in 2016 from related parties) 97,775 143,601
Non-Performing (including $30,090 in 2017 from related parties)
30,090 - Less allowance for estimated losses (including $14,269 in
2017 and $15,537 in 2016 from related parties) (15,770 )
(17,037 ) Total notes and interest receivable 112,095
126,564 Cash and cash equivalents 42,920 17,522 Restricted cash
45,618 38,399 Investments in unconsolidated subsidiaries and
investees 6,396 6,087 Receivable from related party 38,311 24,672
Other assets 63,263 60,659 Total assets
$ 1,296,720 $ 1,174,909
Liabilities and
Shareholders’ Equity Liabilities: Notes and interest payable $
898,750 $ 845,107 Notes related to assets held for sale 376 376
Notes related to assets subject to sales contracts 1,957 5,612
Bonds and interest payable 113,049 - Deferred revenue (including
$56,887 in 2017 and $70,935 in 2016 from sales to related parties)
77,332 91,380 Accounts payable and other liabilities (including
$11,893 in 2017 and $10,854 in 2016 to related parties)
39,373 56,303 1,130,837 998,778
Shareholders’ equity: Preferred stock, Series A: $2.00 par value,
authorized 15,000,000 shares, issued and outstanding 2,000,614
shares in 2017 and 2016 (liquidation preference $10 per share),
including 900,000 shares in 2017 and 2016 held by ARL 2,205 2,205
Common stock, $0.01 par value, authorized 100,000,000 shares;
issued 15,930,145 shares and outstanding 15,514,360 shares in 2017
and 2016, including 140,000 shares held by TCI (consolidated) in
2017 and 2016 159 159 Treasury stock at cost; 415,785 shares in
2017 and 2016, and 140,000 shares held by TCI (consolidated) as of
2017 and 2016 (6,395 ) (6,395 ) Paid-in capital 110,138 111,510
Retained earnings 5,967 14,398 Total
American Realty Investors, Inc. shareholders' equity 112,074
121,877 Non-controlling interest 53,809 54,254
Total equity 165,883 176,131
Total liabilities and equity $ 1,296,720 $ 1,174,909
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180402005924/en/
American Realty Investors, Inc.Investor
Relations:Gene Bertcher,
800-400-6407investor.relations@americanrealtyinvest.com
American Realty Investors (NYSE:ARL)
Historical Stock Chart
From Aug 2024 to Sep 2024
American Realty Investors (NYSE:ARL)
Historical Stock Chart
From Sep 2023 to Sep 2024