(Source: Business Wire)
Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real
estate investment company, reported a net loss applicable to common
shares of ($54.8) million or ($6.76) per diluted earnings per share, for
the nine months ended September 30, 2009, as compared to a net income of
$45.7 million or $5.66 per diluted earnings per share for the same
period ended 2008.
In addition, the Company reported a net loss applicable to common shares
of ($11.5) million or ($1.41) per diluted earnings per share, for the
three months ended September 30, 2009, as compared to a net loss of
($6.9) million or ($.85) per diluted earnings per share for the same
period ended 2008.
Results of operations for the three months ended September 30,
2009 as compared to the same period ended 2008
Rental and other property revenues increased by $4.1 million as compared
to the prior year period which by segment is an increase in the
apartment portfolio of $2.7 million, the commercial portfolio of $1.2
million, and an increase in land and other portfolio of $0.2 million.
Within the apartment portfolio, a $2.7 million increase was due to the
developed properties being leased up. There appears to be a continued
demand for newly developed properties. Within the commercial portfolio,
the same property portfolio increased by $0.2 million and the acquired
properties increased by $1.0 million.
Depreciation and amortization increased by $2.1 million as compared to
the prior year period which by segment is an increase in the apartment
portfolio of $1.1 million, and an increase in the commercial portfolio
of $1.0 million. Within the apartment portfolio, increases came from the
same properties portfolio of $0.2 million and the developed properties
increased by $0.9 million. Within the commercial properties, the
acquired properties increased by $1.0 million.
Other income decreased by $2.1 million as compared to the prior year
period. The decrease is due to disposition of our investment in the
Korean REIT in 2009.
Mortgage and loan interest expense increased by $2.4 million as compared
to the prior year period which by segment is an increase in the
apartment portfolio of $1.0 million and a decrease in the commercial
portfolio of $0.2 million, an increase in land portfolio of $1.1 million
and an increase in other portfolio of $0.5 million. Within the apartment
portfolio the same properties decreased by $0.2 million, which was
offset by an increase in the developed properties of $1.2 million.
Within the commercial portfolio, the acquired properties decreased by
$0.2 million.
The discontinued operations for the three months ended September 30,
2009, consist of the sale of a shopping center and an office building
and shopping center held for sale. Discontinued operations for 2008
relates to 26 income producing properties consisting of 18 apartments,
three commercial buildings and four hotels that were sold in 2008, and
one commercial property sold and an office building and shopping center
held for sale. The gain on sale, taxes and net income fee to affiliates
that are associated with the properties sold during the period presented
are also included in discontinued operations.
Results of operations for the nine months ended September 30, 2009
as compared to the same period ended 2008
Rental and other property revenues increased by $10.8 million as
compared to the prior year period which by segment is an increase in the
apartment portfolio of $8.3 million, the commercial portfolio of $3.3
million, offset by a decrease in the land portfolio of $1.0 million and
an increase in other of $0.2 million. Within the apartment portfolio, a
$9.9 million increase was due to the developed properties being leased
up which was offset by a $1.6 million decrease in the same property
portfolio. There appears to be a continued demand for newly developed
properties. Within the commercial portfolio, the acquired properties
increased by $2.8 million and same store portfolio increased by $0.5
million.
Property operating expenses decreased by $1.1 million as compared to the
prior year period which by segment is an increase in the apartment
portfolio of $0.7 million and a decrease in the commercial portfolio of
$0.7 million, land portfolio of $1.0 million and other of $0.1 million.
Within the apartment portfolio, decreases came from the same properties
of $1.9 million and the developed properties increased by $2.6 million.
Within the commercial portfolio, the same properties decreased by $0.6
million and the acquired properties decreased by $0.1 million.
Depreciation and amortization increased by $4.9 million as compared to
the prior year period which by segment is an increase in the apartment
portfolio of $3.1 million, and an increase in the commercial portfolio
of $1.8 million. Within the apartment portfolio, same properties
increased by $0.4 and the developed properties increased by $2.7
million. Within the commercial properties, the same properties increased
by $0.3 million and the acquired properties increased by $1.5 million.
Other income increased by $0.4 million as compared to the prior year
period. The increase is due to the gains on the disposition of our
investment in the Korean REIT in 2009.
Mortgage and loan interest expense increased by $2.2 million as compared
to the prior year period which by segment is an increase in the
apartment portfolio of $1.8 million, a decrease in the commercial
portfolio of $0.7 million, an increase in the land portfolio of $2.9
million and decrease in other portfolio of $1.8 million. Within the
apartment portfolio the same properties decreased by $2.6 million, which
was offset by an increase in the developed properties of $4.4 million.
Within the commercial portfolio, the same properties decreased by $0.1
million and the acquired properties decreased by $0.6 million.
Earnings from unconsolidated subsidiaries and investees decreased by
$3.0 million. There were no material amounts of equity pickup from
investees in the current period.
Provision on impairment of notes receivable, investment in real estate
partnerships, and real estate assets increased by $21.6 million as
compared to the prior year period. Impairment was recorded as an
additional loss in the investment portfolio of $18.0 million, impairment
in land we currently hold and $8.8 million in land that was sold in the
third quarter for a loss. As of September 30, 2009, properties were
impaired to reflect reduced value. In the prior year period, we posted a
$7.0 million reserve for certain investments within our portfolio.
The discontinued operations for the nine months ended September 30,
2009, consist of the sale of a shopping center and an office building
and shopping center held for sale. In addition, we recognized the
deferred gain on the sale of a building sold in 2002 in accordance with
the requirements per SFAS No.66. Discontinued operations for 2008
relates to 26 income producing properties consisting of 18 apartments,
three commercial buildings and four hotels that were sold in 2008, and
one commercial property sold and an office building and shopping center
held for sale as of September 30, 2009. The gain on sale, taxes and net
income fee to affiliates that are associated with the properties sold
during the period presented are also included in discontinued operations.
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, hotels,
shopping centers and developed and undeveloped land. We invest in real
estate through direct equity ownership and partnerships nationwide. For
more information, visit the Company's web site at www.transconrealty-invest.com.
TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30, December 31,
2009 2008
(dollars in thousands, except share and par value amounts)
Assets
Real estate, at cost $ 1,542,096 $ 1,526,016
Real estate held for sale at cost, net of depreciation 5,375 8,018
Real estate subject to sales contracts at cost, net of depreciation 53,780 60,807
Less accumulated depreciation (133,175 ) (114,050 )
Total real estate 1,468,076 1,480,791
Notes and interest receivable
Performing 56,125 42,413
Less allowance for estimated losses (2,804 ) (3,293 )
Total notes and interest receivable 53,321 39,120
Cash and cash equivalents 1,983 5,983
Investments in securities - 2,775
Investments in unconsolidated subsidiaries and investees 11,885 23,365
Other assets 83,118 88,033
Total assets $ 1,618,383 $ 1,640,067
Liabilities and Shareholders' Equity
Liabilities:
Notes and interest payable $ 1,126,098 $ 1,100,852
Notes related to assets held-for-sale 4,646 4,191
Notes related to subject to sales contracts 62,021 62,972
Affiliate payables 35,723 62,367
Accounts payable and other liabilities 118,473 84,989
1,346,961 1,315,371
Commitments and contingencies:
Shareholders' equity:
Preferred Stock, Series C: $.01 par value, authorized 10,000,000 shares, issued and outstanding 30,000 shares in 2009 and 2008 respectively (liquidation preference $100 per share). Series D: $.01 par value, authorized, issued and outstanding 100,000 shares in 2009 and 2008 respectively 1 1
Common Stock, $.01 par value, authorized 10,000,000 shares; issued and outstanding 8,113,669 for 2009 and 2008 81 81
Paid-in capital 262,688 263,290
Retained earnings (9,021 ) 44,980
Accumulated other comprehensive income - 2,575
Total Transcontinental Realty Investors, Inc. shareholders' equity 253,749 310,927
Non-controlling interest 17,673 13,769
Total equity 271,422 324,696
Total liabilities and equity $ 1,618,383 $ 1,640,067
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TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
For the Three Months Ended September 30, For the Nine Months Ended September 30,
2009 2008 2009 2008
(dollars in thousands, except share and per share amounts)
Revenues:
Rental and other property revenues $ 40,503 $ 36,442 $ 115,418 $ 104,616
Expenses:
Property operating expenses 22,340 23,072 64,986 66,111
Depreciation and amortization 7,409 5,265 22,077 17,197
General and administrative 3,310 2,214 6,853 6,891
Advisory fee to affiliate 3,110 2,894 8,874 8,857
Total operating expenses 36,169 33,445 102,790 99,056
Operating income 4,334 2,997 12,628 5,560
Other income (expense):
Interest income 665 688 1,950 1,990
Other income 296 2,410 3,581 3,206
Mortgage and loan interest (18,945 ) (16,586 ) (53,822 ) (51,586 )
Earnings from unconsolidated subsidiaries and investees (53 ) (1,863 ) (353 ) 2,681
Litigation Settlement (64 ) - 681 -
Provision on impairment of notes receivable and real estate assets - - (28,575 ) (7,000 )
Total other expenses (18,101 ) (15,351 ) (76,538 ) (50,709 )
Loss before gain on land sales, non-controlling interest, and tax (13,767 ) (12,354 ) (63,910 ) (45,149 )
Gain on land sales - 696 6,296 4,551
Loss from continuing operations before tax (13,767 ) (11,658 ) (57,614 ) (40,598 )
Income tax benefit 648 1,754 897 30,460
Net loss from continuing operations (13,119 ) (9,904 ) (56,717 ) (10,138 )
Discontinued operations:
Income (loss) from discontinued operations (53 ) 4,767 410 (13,189 )
Gain on sale of real estate from discontinued operations 3,027 244 3,559 100,218
Income tax expense from discontinued operations (1,041 ) (1,754 ) (1,389 ) (30,460 )
Net income (loss) (11,186 ) (6,647 ) (54,137 ) 46,431
Less: net income (loss) attributable to non-controlling interest (107 ) - 136 -
Net income (loss) attributable to Transcontinental Realty Investors, Inc. (11,293 ) (6,647 ) (54,001 ) 46,431
Preferred dividend requirement (254 ) (239 ) (756 ) (718 )
Net income (loss) applicable to common shares $ (11,547 ) $ (6,886 ) $ (54,757 ) $ 45,713
Earnings per share - basic
Loss from continuing operations $ (1.65 ) $ (1.25 ) $ (7.08 ) $ (1.34 )
Discontinued operations 0.24 0.40 0.32 7.00
Net income (loss) applicable to common shares $ (1.41 ) $ (0.85 ) $ (6.76 ) $ 5.66
Earnings per share - diluted
Loss from continuing operations $ (1.65 ) $ (1.25 ) $ (7.08 ) $ (1.34 )
Discontinued operations 0.24 0.40 0.32 7.00
Net income (loss) applicable to common shares $ (1.41 ) $ (0.85 ) $ (6.76 ) $ 5.66
Weighted average common share used in computing earnings per share 8,113,669 8,083,882 8,113,669 8,077,663
Weighted average common share used in computing diluted earnings per share 8,113,669 8,083,882 8,113,669 8,077,663
Amounts attributable to Transcontinental Realty Investors, Inc.
Loss from continuing operations $ (13,226 ) $ (9,904 ) $ (56,581 ) $ (10,138 )
Income from discontinued operations 1,933 3,257 2,580 56,569
Net income (loss) $ (11,293 ) $ (6,647 ) $ (54,001 ) $ 46,431
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