Attached files
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| 8-K - TRANSCONTINENTAL REALTY INVESTORS - TRANSCONTINENTAL REALTY INVESTORS INC | tri8k111512.htm |
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NEWS RELEASE
FOR IMMEDIATE RELEASE
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Contact:
Transcontinental Realty Investors, Inc.
Investors Relations
(800) 400-6407
investor.relations@transconrealty-invest.com
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Transcontinental Realty Investors, Inc. Reports Third Quarter 2012 Results
DALLAS (November 14, 2012) - Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported results of operations for the third quarter ended September 30, 2012. TCI announced today that the Company reported net loss applicable to common shares of $0.5 million or $0.07 per diluted earnings per share, as compared to a net income applicable to common shares of $0.6 million or 50.08 per diluted earnings per share for the same period ended 2011. Included in the net loss applicable to common shares of $0.5 million is $5.4 million in depreciation and amortization expense for the three months ended September 30, 2012. For the same period ending September 30, 2011, included in the net income applicable to common shares of $0.6 million is $5.4 million in depreciation and amortization expense.
For the past year and a half TCI has shown an unwavering commitment to fortify our portfolio and streamline our operational activity; all while maintaining our commitment to creating value. TCI is pleased that we are seeing improved results from these endeavors and will continue to adapt to market challenges with an eye on both near term economic challenges and long term prospects as the real estate market improves.
Rental and other property revenues were $28.1 million for the three months ended September 30, 2012. This represents a decrease of $1.2 million, as compared to the prior period revenues of $29.3 million. The change, by segment, is an increase in the apartment portfolio of $0.5 million, a decrease in the commercial portfolio of $1.5 million and a decrease in the land and other portfolio of $0.2 million. Our apartment portfolio continues to thrive in the current economic conditions with occupancies averaging over 95%. Within our commercial portfolio, the same properties decreased by $1.5 million, primarily due to miscellaneous nonrecurring revenue received in the prior 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.
General and administrative expenses were $1.2 million for the three months ended September 30, 2012. This represents a decrease of $1.5 million, as compared to the prior period expenses i$2.7 million. This change is primarily due to losses recorded in the prior period from investment write-offs due to potential deals not realized. Professional services decreased by $0.4 million and cost reimbursements to our Advisor decreased by $0.2 million.
Interest income was S1.0 million for the three months ended September 30, 2012. This represents an increase of $0.5 million, as compared to the prior period interest income of $0.5 million. The majority of the increase is due to the cash received on the cash flow notes from Unified Housing Foundation, Inc. related to the mid-year surplus cash calculation.
Other income was $1.5 million for the three months ended September 30, 2012. This represents an increase of $1.4 million, as compared to the prior period other income of $0.1 million. This relates to the agreement between Unified Housing Foundation, Inc. and TCI for consulting services related to the development of apartment projects.
Mortgage and loan interest was $9.0 million for the three months ended September 30, 2012. This represents a decrease of $2.8 million, as compared to the prior period interest expense of $1 l.8 million. This change, by segment, is a decrease in the apartment portfolio of $0.9 million and a decrease in the commercial portfolio of $1.9 million. Within the apartment portfolio, the same apartment portfolio decreased $1.8 million and the developed properties increased $0.9 million due to properties in the lease-up phase. The same store apartment portfolio decreased due to the refinances closed with long term, low interest rates. For the developed properties, once an apartment is completed, the interest expense is no longer capitalized. Within the commercial portfolio, the same properties decreased by $1.8 million. This decrease is primarily related to a commercial loan that was in default status in 2011 and was accruing interest at the default interest rate. The default rate is no longer applicable in the current period.
Gain on land sales decreased for the three months ended September 30, 2012 as compared to the prior period. In the current period we sold 102.28 acres of land in seven separate transactions for an aggregate sales price of $16.1 million and recorded a gain of $2.9 million. In the prior period, we sold 2,999.28 acres of land in six separate transactions for an aggregate sales price of $52.4 million and recorded a gain of $6.3 million.
Included in discontinued operations are a total of five and 18 properties for 2012 and 2011, respectively. Properties sold in 2012 have been reclassified to discontinued operations for current and prior year reporting periods. The gain on sale of income-producing 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 wmv.transconrealtv-invest.com.
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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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For the Nine Months Ended
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September 30,
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September 30,
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2012
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2011
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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 $164 and $0 for the three months
and $499 and $0 for the nine months ended 2012 and 2011 respectively from
related parties)
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$ | 28,097 | $ | 29,347 | $ | 87,003 | $ | 83,846 | ||||||||
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Expenses:
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Property operating expenses (including $296 and $264 for the three months and $837
and $888 for the nine months ended 2012 and 2011 respectively from related parties)
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15,484 | 16,150 | 45,359 | 45,128 | ||||||||||||
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Depreciation and amortization
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5,427 | 5,378 | 16,260 | 14,168 | ||||||||||||
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General and administrative (including $569 and $720 for the three months and $1,796
and $2,467 for the nine months ended 2012 and 2011 respectively from related parties)
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1,181 | 2,658 | 4,132 | 7,100 | ||||||||||||
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Provision on impairment of notes receivable and real estate assets
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- | - | - | 5,581 | ||||||||||||
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Advisory fee to related party
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2,198 | 2,441 | 6,719 | 7,688 | ||||||||||||
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Total operating expenses
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24,290 | 26,627 | 72,470 | 79,665 | ||||||||||||
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Operating income
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3,807 | 2,720 | 14,533 | 4,181 | ||||||||||||
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Other income (expense):
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Interest income (including $1,016 and $483 for the three months and $7,870 and $1,534
for the nine months ended 2012 and 2011 respectively from related parties)
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1,031 | 497 | 8,129 | 1,627 | ||||||||||||
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Other income (including $1,500 and $0 for the three months and $4,500 and $0 for the
nine months ended 2012 and 2011 respectively from related parties)
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1,525 | 114 | 4,655 | 1,879 | ||||||||||||
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Mortgage and loan interest (including $714 and $47 for the three months and $2,575
and $1,614 for the nine months ended 2012 and 2011 respectively from related parties)
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(9,031 | ) | (11,792 | ) | (41,146 | ) | (37,517 | ) | ||||||||
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Loss on the sale of investments
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- | (32 | ) | (118 | ) | (483 | ) | |||||||||
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Earnings (losses) from unconsolidated subsidiaries and investees
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5 | 189 | (58 | ) | 246 | |||||||||||
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Total other expenses
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(6,470 | ) | (11,024 | ) | (28,538 | ) | (34,248 | ) | ||||||||
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Loss before gain on land sales, non-controlling interest, and taxes
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(2,663 | ) | (8,304 | ) | (14,005 | ) | (30,067 | ) | ||||||||
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Gain on land sales
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2,913 | 6,285 | 8,074 | 8,366 | ||||||||||||
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Income (loss) from continuing operations before tax
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250 | (2,019 | ) | (5,931 | ) | (21,701 | ) | |||||||||
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Income tax benefit (expense)
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(164 | ) | 886 | 1,414 | (1,423 | ) | ||||||||||
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Net income (loss) from continuing operations
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86 | (1,133 | ) | (4,517 | ) | (23,124 | ) | |||||||||
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Discontinued operations:
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Loss from discontinued operations
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(551 | ) | (342 | ) | (1,132 | ) | (3,702 | ) | ||||||||
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Gain (loss) on sale of real estate from discontinued operations
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82 | 2,872 | 5,173 | (365 | ) | |||||||||||
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Income tax benefit (expense) from discontinued operations
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164 | (886 | ) | (1,414 | ) | 1,423 | ||||||||||
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Net income (loss) from discontinued operations
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(305 | ) | 1,644 | 2,627 | (2,644 | ) | ||||||||||
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Net income (loss)
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(219 | ) | 511 | (1,890 | ) | (25,768 | ) | |||||||||
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Net (income) loss attributable to non-controlling interest
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(43 | ) | 384 | (297 | ) | 515 | ||||||||||
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Net income (loss) attributable to Transcontinental Realty Investors, Inc.
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(262 | ) | 895 | (2,187 | ) | (25,253 | ) | |||||||||
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Preferred dividend requirement
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(277 | ) | (279 | ) | (831 | ) | (831 | ) | ||||||||
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Net income (loss) applicable to common shares
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$ | (539 | ) | $ | 616 | $ | (3,018 | ) | $ | (26,084 | ) | |||||
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Earnings per share - basic
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Loss from continuing operations
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$ | (0.03 | ) | $ | (0.12 | ) | $ | (0.67 | ) | $ | (2.81 | ) | ||||
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Income (loss) from discontinued operations
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(0.04 | ) | 0.20 | 0.31 | (0.32 | ) | ||||||||||
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Net income (loss) applicable to common shares
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$ | (0.07 | ) | $ | 0.08 | $ | (0.36 | ) | $ | (3.13 | ) | |||||
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Earnings per share - diluted
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Loss from continuing operations
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$ | (0.03 | ) | $ | (0.12 | ) | $ | (0.67 | ) | $ | (2.81 | ) | ||||
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Income (loss) from discontinued operations
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(0.04 | ) | 0.20 | 0.31 | (0.32 | ) | ||||||||||
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Net income (loss) applicable to common shares
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$ | (0.07 | ) | $ | 0.08 | $ | (0.36 | ) | $ | (3.13 | ) | |||||
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Weighted average common share used in computing earnings per share
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8,413,469 | 8,413,469 | 8,413,469 | 8,356,326 | ||||||||||||
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Weighted average common share used in computing diluted earnings per share
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8,413,469 | 8,413,469 | 8,413,469 | 8,356,326 | ||||||||||||
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Amounts attributable to Transcontinental Realty Investors, Inc.
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Income (loss) from continuing operations
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$ | 43 | $ | (749 | ) | $ | (4,814 | ) | $ | (22,609 | ) | |||||
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Income (loss) from discontinued operations
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(305 | ) | 1,644 | 2,627 | (2,644 | ) | ||||||||||
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Net income (loss)
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$ | (262 | ) | $ | 895 | $ | (2,187 | ) | $ | (25,253 | ) | |||||
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TRANSCONTINENTAL REALTY INVESTORS, INC.
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CONSOLIDATED BALANCE SHEETS
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(unaudited)
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September 30,
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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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$ | 1,004,209 | $ | 1,069,699 | ||||
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Real estate held for sale at cost, net of depreciation ($0 for 2012 and $1,752 for 2011)
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- | 15,015 | ||||||
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Real estate subject to sales contracts at cost, net of depreciation ($15,742 for 2012 and $7,213 for 2011)
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50,033 | 52,555 | ||||||
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Less accumulated depreciation
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(145,117 | ) | (148,930 | ) | ||||
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Total real estate
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909,125 | 988,339 | ||||||
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Notes and interest receivable
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Performing (including $55,208 in 2012 and $78,852 in 2011 from related parties)
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57,891 | 79,161 | ||||||
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Non-performing
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820 | 2,152 | ||||||
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Less allowance for estimated losses (including $2,097 in 2012 and $2,097 in 2011 from related parties)
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(2,262 | ) | (3,942 | ) | ||||
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Total notes and interest receivable
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56,449 | 77,371 | ||||||
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Cash and cash equivalents
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6,322 | 19,991 | ||||||
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Investments in unconsolidated subsidiaries and investees
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4,992 | 6,362 | ||||||
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Other assets
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67,377 | 68,261 | ||||||
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Total assets
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$ | 1,044,265 | $ | 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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$ | 753,542 | $ | 829,617 | ||||
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Notes related to assets held for sale
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- | 13,830 | ||||||
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Notes related to subject to sales contracts
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53,442 | 38,376 | ||||||
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Stock-secured notes payable
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2,215 | 2,482 | ||||||
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Related party payables
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247 | 17,465 | ||||||
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Deferred gain (from sales to related parties)
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56,255 | 65,607 | ||||||
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Accounts payable and other liabilities (including $1,973 in 2012 and $1,746 in 2011 from related parties)
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38,940 | 51,663 | ||||||
| 904,641 | 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, $.01 par value, authorized 10,000,000 shares; issued 8,413,669 shares in 2012 and 2011,
and outstanding 8,413,469 shares in 2012 and 2011
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84 | 84 | ||||||
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Treasury stock at cost; 200 shares in 2012 and 2011
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(2 | ) | (2 | ) | ||||
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Paid-in capital
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273,055 | 273,886 | ||||||
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Retained earnings
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(150,422 | ) | (148,235 | ) | ||||
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Total Transcontinental Realty Investors, Inc. shareholders' equity
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122,716 | 125,734 | ||||||
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Non-controlling interest
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16,908 | 15,550 | ||||||
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Total equity
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139,624 | 141,284 | ||||||
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Total liabilities and equity
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$ | 1,044,265 | $ | 1,160,324 | ||||