Attached files
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| 8-K - TRANSCONTINENTIAL REALTY INVESTORS, INC. - TRANSCONTINENTAL REALTY INVESTORS INC | tri8k051612.htm |
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NEWS RELEASE
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| FOR IMMEDIATE RELEASE |
Contact:
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| Transcontinental Realty Investors, Inc. | |
| Investors Relations | |
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(800) 400-6407
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| investor.relations@transconrealty-invest.com |
Transcontinental Realty Investors, Inc. Reports First Quarter 2012 Results
DALLAS (May 15, 2012) -- Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported results of operations for the first quarter ended March 31, 2012. TCI announced today that the Company reported a net loss applicable to common shares of $4.5 million or $0.53 per diluted earnings per share, as compared to a net loss applicable to common shares of $12.2 million or $1.50 per diluted earnings per share for the same period ended 2011. Included in the net loss applicable to common shares of $4.5 million is $5.7 million in depreciation and amortization expense for the three months ended March 31, 2012. For the same period ending March 31, 2011, included in the net loss applicable to common shares of $12.2 million is $6.6 million in depreciation and amortization expense and $6.1 million of impairment reserves on real estate assets and notes receivable.
Rental and other property revenues were $28.9 million for the three months ended March 31, 2012. This represents an increase of $2.5 million, as compared to the prior period revenues of $26.4 million. The change, by segment, is an increase in the apartment portfolio of $2.7 million and a decrease in the land portfolio of $0.2 million. Within the apartment portfolio, there was an increase of $2.2 million due to the developed properties in the lease-up phase and an increase of $0.5 million in the same property portfolio. Our apartment portfolio continues to thrive in the current economic conditions with occupancies averaging over 94%. Our existing commercial portfolio remained fairly consistent overall in the current period. We continue to market our properties aggressively to attract new tenants and strive for continuous improvement of our properties in order to maintain our existing tenants.
Mortgage and loan interest was $16.4 million for the three months ended March 31, 2012. This represents an increase of $4.0 million, as compared to the prior period interest expense of $12.4 million. This change, by segment, is an increase in the apartment portfolio of $4.2 million and an increase in the commercial portfolio of $0.6 million offset by a decrease $0.8 million in the land and other portfolio. Within the apartment portfolio, the same apartment portfolio increased $3.0 million due to prepayment penalties paid for the refinancing of four apartment loans in the current period. The developed properties increased $1.2 million due to properties in the lease-up phase. Once an apartment is completed, the interest expense is no longer capitalized. Within the commercial portfolio, the same properties increased by $0.6 million due to changes in terms on existing mortgages. The decrease in land other portfolio was due to land sales.
Interest income was $3.2 million for the three months ended March 31, 2012. This represents an increase of $2.8 million, as compared to the prior period interest income of $0.4 million. The majority of this increase is due to the accrued interest recognition on the cash flow notes from Unified Housing Foundation, Inc. Prior to January 1, 2012, on cash flow notes where payments are based upon surplus cash from operations, accrued but unpaid interest income was only recognized to the extent that cash was received. As of January I, 2012, due to the consistency of cash received on the surplus cash notes, we recorded interest as earned.
Gain on land sales decreased for the three months ended March 31, 2012 as compared to the prior period. In the current period we sold 431.58 acres of land in four separate transactions for an aggregate sales price of $6.3 million and recorded a gain of $0.4 million. In the prior period, we sold 45.2 acres of land in seven separate transactions for an aggregate sales price of $43.4 million and recorded a gain of $0.8 million.
Included in discontinued operations are a total of two and 16 properties for 2012 and 2011, respectively. Properties sold in 2012 have been reclassified to discontinued operations for current and prior year reporting periods. In 2012, we sold one apartment complex, one apartment complex was held for sale and one commercial property was held for sale. In 2011, we sold I I commercial properties, one apartment complex and 13 acres of land with a storage warehouse. The gain on sale of the properties is also included in discontinued operations for those years.
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 office buildings, apartments, 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.transconrealty-invest.com.
| TRANSCONTINENTAL REALTY INVESTORS, INC. | ||||||||
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited)
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For the Three Months Ended
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March 31,
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2012
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2011
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(dollars in thousands, except share
and per share amounts)
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Revenues:
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Rental and other property revenues (including $167 and $0 for the three months ended 2012 and
2011 respectively from affiliates and related parties)
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$ | 28,945 | $ | 26,439 | ||||
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Expenses:
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Property operating expenses (including $292 and $275 for the three months ended 2012 and 2011
respectively from affiliates and related parties)
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14,989 | 14,770 | ||||||
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Depreciation and amortization
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5,494 | 5,302 | ||||||
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General and administrative (including $666 and $842 for the three months ended 2012 and 2011
respectively from affiliates and related parties)
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2,174 | 1,997 | ||||||
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Provision on impairment of notes receivable and real estate assets
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- | 5,178 | ||||||
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Advisory fee to affiliate
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2,303 | 2,620 | ||||||
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Total operating expenses
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24,960 | 29,867 | ||||||
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Operating income (loss)
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3,985 | (3,428 | ) | |||||
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Other income (expense):
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Interest income (including $3,415 and $318 for the three months ended 2012 and 2011 respectively
from affiliates and related parties)
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3,229 | 426 | ||||||
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Other income (including $1,500 and $0 for the three months ended 2012 and 2011 respectively from
affiliates and related parties)
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1,602 | 1,214 | ||||||
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Mortgage and loan interest (including $754 and $298 for the three months ended 2012 and 2011
respectively from affiliates and related parties)
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(16,429 | ) | (12,392 | ) | ||||
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Loss on the sale of investments
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(102 | ) | - | |||||
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Earnings from unconsolidated subsidiaries and investees
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(73 | ) | (61 | ) | ||||
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Total other expenses
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(11,773 | ) | (10,813 | ) | ||||
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Loss before gain on land sales, non-controlling interest, and tax
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(7,788 | ) | (14,241 | ) | ||||
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Gain on land sales
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423 | 796 | ||||||
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Loss from continuing operations before tax
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(7,365 | ) | (13,445 | ) | ||||
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Income tax benefit
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1,133 | 489 | ||||||
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Net loss from continuing operations
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(6,232 | ) | (12,956 | ) | ||||
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Discontinued operations:
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Loss from discontinued operations
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(351 | ) | (2,280 | ) | ||||
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Gain on sale of real estate from discontinued operations
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3,588 | 3,677 | ||||||
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Income tax expense from discontinued operations
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(1,133 | ) | (489 | ) | ||||
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Net income from discontinued operations
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2,104 | 908 | ||||||
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Net loss
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(4,128 | ) | (12,048 | ) | ||||
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Net (income) loss attributable to non-controlling interest
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(79 | ) | 85 | |||||
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Net loss attributable to Transcontinental Realty Investors, Inc.
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(4,207 | ) | (11,963 | ) | ||||
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Preferred dividend requirement
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(277 | ) | (274 | ) | ||||
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Net loss applicable to common shares
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$ | (4,484 | ) | $ | (12,237 | ) | ||
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Earnings per share - basic
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Loss from continuing operations
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$ | (0.78 | ) | $ | (1.61 | ) | ||
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Income from discontinued operations
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0.25 | 0.11 | ||||||
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Net loss applicable to common shares
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$ | (0.53 | ) | $ | (1.50 | ) | ||
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Earnings per share - diluted
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Loss from continuing operations
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$ | (0.78 | ) | $ | (1.61 | ) | ||
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Income from discontinued operations
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0.25 | 0.11 | ||||||
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Net loss applicable to common shares
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$ | (0.53 | ) | $ | (1.50 | ) | ||
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Weighted average common share used in computing earnings per share
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8,413,469 | 8,240,136 | ||||||
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Weighted average common share used in computing diluted earnings per share
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8,413,469 | 8,240,136 | ||||||
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Amounts attributable to Transcontinental Realty Investors, Inc.
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Loss from continuing operations
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$ | (6,311 | ) | $ | (12,871 | ) | ||
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Income from discontinued operations
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2,104 | 908 | ||||||
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Net loss
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$ | (4,207 | ) | $ | (11,963 | ) | ||
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TRANSCONTINENTAL REALTY INVESTORS, INC.
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CONSOLIDATED BALANCE SHEETS
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(unaudited)
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March 31,
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December 31,
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2012
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2011
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(dollars in thousands, except share
and par value amounts)
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Assets
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Real estate, at cost
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$ | 1,030,501 | $ | 1,069,699 | ||||
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Real estate held for sale at cost, net of depreciation $3,168 for 2012 and $1,752 for 2011)
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28,663 | 15,015 | ||||||
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Real estate subject to sales contracts at cost, net of depreciation ($7,415 for 2012 and $7,213 for 2011)
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48,537 | 52,555 | ||||||
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Less accumulated depreciation
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(146,379 | ) | (148,930 | ) | ||||
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Total real estate
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961,322 | 988,339 | ||||||
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Notes and interest receivable
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Performing (including $75,672 in 2012 and $78,852 in 2011 from affiliates and related parties)
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75,673 | 79,161 | ||||||
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Non-performing (including $3,279 in 2012 and $0 in 2011 from affiliates and related parties)
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5,750 | 2,152 | ||||||
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Less allowance for estimated losses (including $2,097 in 2012 and 2011 from affiliates
and related parties)
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(3,942 | ) | (3,942 | ) | ||||
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Total notes and interest receivable
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77,481 | 77,371 | ||||||
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Cash and cash equivalents
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7,822 | 19,991 | ||||||
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Investments in unconsolidated subsidiaries and investees
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6,230 | 6,362 | ||||||
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Other assets
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62,204 | 68,261 | ||||||
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Total assets
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$ | 1,115,059 | $ | 1,160,324 | ||||
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Liabilities and Shareholders’ Equity
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Liabilities:
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Notes and interest payable
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$ | 800,368 | $ | 829,617 | ||||
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Notes related to assets held for sale
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20,089 | 13,830 | ||||||
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Notes related to subject to sales contracts
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34,434 | 38,376 | ||||||
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Stock secured notes payable
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2,351 | 2,482 | ||||||
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Affiliate payables
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25,915 | 17,465 | ||||||
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Deferred gain (from sales to related parties)
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58,637 | 65,607 | ||||||
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Accounts payable and other liabilities (including $1,802 in 2012 and $1,746 in 2011 from affiliates
and related parties)
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35,317 | 51,663 | ||||||
| 977,111 | 1,019,040 | |||||||
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Shareholders’ equity:
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Preferred stock, Series C: $.01 par value, authorized 10,000,000 shares, issued and outstanding 30,000
shares in 2012 and 2011 respectively (liquidation preference $100 per share). Series D: $.01 par value,
authorized, issued and outstanding 100,000 shares in 2012 and 2011 respectively.
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1 | 1 | ||||||
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Common stock, $.01 par value, authorized 10,000,000 shares; issued 8,413,669 for 2012 and 2011, and
outstanding 8,413,469 for 2012 and 2011.
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84 | 84 | ||||||
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Treasury stock at cost; 200 shares in 2012 and 2011
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(2 | ) | (2 | ) | ||||
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Paid-in capital
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273,609 | 273,886 | ||||||
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Retained earnings
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(152,442 | ) | (148,235 | ) | ||||
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Total Transcontinental Realty Investors, Inc. shareholders' equity
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121,250 | 125,734 | ||||||
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Non-controlling interest
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16,698 | 15,550 | ||||||
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Total equity
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137,948 | 141,284 | ||||||
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Total liabilities and equity
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$ | 1,115,059 | $ | 1,160,324 | ||||