Income Opportunity Realty Investors, Inc. Reports Third Quarter 2012 Results

Income Opportunity Realty Investors, Inc. Reports Third Quarter 2012 Results

DALLAS--(BUSINESS WIRE)-- Income Opportunity Realty Investors, Inc. (NYSE MKT:IOT), a Dallas-based real estate investment company, today reported results of operations for the third quarter ended September 30, 2012. IOT announced today that the Company reported net income of $0.4 million or $0.08 per diluted earnings per share for the period ended September 30, 2012, as compared to a net loss of $0.5 million or $0.13 per diluted earnings per share for the same period ended 2011.

Land held for development or sale is our sole operating segment, holding 178 acres of land in Texas. There was no income generated from this segment for the three months ended September 30, 2012, nor for the prior period ended September 30, 2011. Our primary source of revenue is from interest income on $26.3 million of note receivables from related parties.


Interest income was $972,000 for the three months ended September 30, 2012. This represents an increase of $429,000 as compared to the prior period interest income of $543,000. The increase was related to the note receivables from Unified Housing Foundation, Inc., a related party. 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 1, 2012, due to the consistency of cash received on the surplus cash notes, we are recording interest as earned.

Property operating expenses were $12,000 for the three months ended September 30, 2012. This represents an increase of $6,000, as compared to the prior period operating expenses of $6,000. There was an increase in property operating expenses related to the land portfolio of $6,000 which was due to an increase in POA fees billed for third quarter of 2012.

General and administrative expenses were $65,000 for the three months ended September 30, 2012. This represents a decrease of $29,000, as compared to the prior period general and administrative services of $94,000. There was a decrease in general and administrative expenses related to the other portfolio which consisted of a decrease of $11,000 in professional fees and a decrease of $18,000 in cost reimbursements to our Advisor.

Earnings from unconsolidated subsidiaries and investees relate to IOT's 10.0% investment in TCI Eton Square, LP. This investment is accounted for under the equity method and recognizes its portion of the current period earnings.

About Income Opportunity Realty Investors, Inc.

Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a portfolio of equity real estate in Texas, including undeveloped land. The Company invests in real estate through direct equity ownership and partnerships. For more information, visit the Company's website at www.incomeopp-realty.com.

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

(dollars in thousands, except share and per share amounts)

Revenues:

Rental and other property revenues

$

-

$

-

$

-

$

-

Expenses:

Property operating expenses (including $11 and $6 for the three months and $54 and $8
for the nine months ended 2012 and 2011 respectively from related parties)

12

6

56

18

General and administrative (including $57 and $52 for the three months and $257 and $167
for the nine months ended 2012 and 2011 respectively from related parties)

65

94

425

370

Advisory fee to related party

206

219

608

650

Total operating expenses

283

319

1,089

1,038

Operating loss

(283

)

(319

)

(1,089

)

(1,038

)

Other income (expense):

Interest income (including $972 and $543 for the three months and $3,868 and $1,560 for the
nine months ended 2012 and 2011 respectively from related parties)

972

543

3,868

1,560

Mortgage and loan interest

(276

)

(282

)

(828

)

(928

)

Earnings from unconsolidated subsidiaries and investees

(14

)

28

(37

)

(22

)

Total other income

682

289

3,003

610

Income (loss) from continuing operations before tax

399

(30

)

1,914

(428

)

Income tax expense

(15

)

(170

)

(18

)

(672

)

Net income (loss) from continuing operations

384

(200

)

1,896

(1,100

)

Discontinued operations:

Loss from discontinued operations

(43

)

(10

)

(52

)

(1,444

)

Loss on the sale of real estate from discontinued operations

-

(475

)

-

(475

)

Income tax benefit from discontinued operations

15

170

18

672

Net loss from discontinued operations

(28

)

(315

)

(34

)

(1,247

)

Net income (loss)

356

(515

)

1,862

(2,347

)

Earnings per share - basic

Income (loss) from continuing operations

$

0.09

$

(0.05

)

$

0.45

$

(0.26

)

Loss from discontinued operations

(0.01

)

(0.08

)

(0.01

)

(0.30

)

Net income (loss) applicable to common shares

$

0.08

$

(0.13

)

$

0.44

$

(0.56

)

Earnings per share - diluted

Income (loss) from continuing operations

$

0.09

$

(0.05

)

$

0.45

$

(0.26

)

Loss from discontinued operations

(0.01

)

(0.08

)

(0.01

)

(0.30

)

Net income (loss) applicable to common shares

$

0.08

$

(0.13

)

$

0.44

$

(0.56

)

Weighted average common share used in computing earnings per share

4,168,214

4,168,214

4,168,214

4,168,214

Weighted average common share used in computing diluted earnings per share

4,168,214

4,168,214

4,168,214

4,168,214

INCOME OPPORTUNITY REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

September 30,

December 31,

2012

2011

(dollars in thousands, except share and
par value amounts)

Assets

Real estate land holdings, at cost

$

24,511

$

24,511

Total real estate

24,511

24,511

Notes and interest receivable from related parties

26,295

31,612

Less allowance for doubtful accounts

(1,826

)

(1,826

)

Total notes and interest receivable

24,469

29,786

Cash and cash equivalents

11

1

Investments in unconsolidated subsidiaries and investees, subject to sales contract

-

37

Receivable and accrued interest from related parties

59,207

52,160

Other assets

1,506

1,546

Total assets

$

109,704

$

108,041

Liabilities and Shareholders' Equity

Liabilities:

Notes and interest payable

$

28,399

$

28,588

Deferred gain (from sales to related parties)

5,127

5,127

Accounts payable and other liabilities

115

125

33,641

33,840

Commitments and contingencies:

Shareholders' equity:

Common stock, $.01 par value, authorized 10,000,000 shares; issued 4,173,675
shares in 2012 and 2011

42

42

Treasury stock at cost, 5,461 in 2012 and 2011

(39

)

(39

)

Paid-in capital

61,955

61,955

Retained earnings

14,105

12,243

Total shareholders' equity

76,063

74,201

Total liabilities and shareholders' equity

$

109,704

$

108,041



Income Opportunity Realty Investors, Inc.
Investor Relations, 800-400-6407
investor.relations@incomeopp-realty.com

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS:

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