Transcontinental Realty Investors, Inc. Reports First Quarter 2013 Results

Transcontinental Realty Investors, Inc. Reports First Quarter 2013 Results

DALLAS--(BUSINESS WIRE)-- Transcontinental Realty Investors, Inc. (NYS: TCI) , a Dallas-based real estate investment company, today reported results of operations for the first quarter ended March 31, 2013. TCI announced today that the Company reported a net loss applicable to common shares of $3.4 million or $0.41 per diluted earnings per share, as compared to a net loss applicable to common shares of $4.5 million or $0.53 per diluted earnings per share for the same period ended 2012.

The Company has shown an unwavering commitment to fortify our portfolio and streamline our operational activity; while at the same time maintaining our commitment to creating value. We are pleased that we are seeing improvements in our operations 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.


Our apartment portfolio continues to thrive in the current economic conditions with occupancies averaging over 95%. We continue to work aggressively to attract new tenants and strive for continuous improvement of our properties in order to maintain our existing tenants.

Included in the net loss applicable to common shares of $3.4 million, for the three months ended March 31, 2013, is $5.0 million in depreciation and amortization expense, $2.4 million of amortization of deferred borrowing costs and $4.0 million of prepayment penalties incurred in the process of refinancing several apartment loans at lower interest rates. For the same period ending March 31, 2012, included in the net loss applicable to common shares of $4.5 million is $5.2 million in depreciation and amortization expense, $0.9 million of amortization of deferred borrowing costs and $2.4 million of prepayment penalties incurred in the process of refinancing several apartment loans at lower interest rates.

Rental and other property revenues as well as property operations have remained in line during the three months ended March 31, 2013 as they were in the prior period.

General and administrative expenses were $1.8 million for the three months ended March 31, 2013. This represents a decrease of $0.7 million, as compared to the same period ending March 31, 2012 expenses of $2.5 million. The majority of the change is due to the reduction in corporate professional services in the current period.

Mortgage and loan interest was $10.0 million for the three months ended March 31, 2013. This represents a decrease of $2.5 million, as compared to the same period ending March 31, 2012 interest expense of $12.5 million. This change, by segment, is a decrease in the apartment portfolio of $0.9 million, a decrease in the commercial portfolio of $1.0 million, a decrease in the land portfolio by $0.2 and a decrease in the other portfolio by $0.4 million. Within the apartment portfolio, the same apartment portfolio decreased $0.9 million due to the refinances closed with long-term, low interest rates. Within the commercial portfolio, the same properties decreased by $1.0 million primarily due to two commercial loans that were in default status and were accruing default interest and late fees during the prior period. After the settlement with the lenders, the loans have been accruing interest at a lower interest rate with no late fees. The decrease in the land and other segments relates to principal payments made during the periods, thereby requiring less future interest to be paid on debt obligations.

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 ownership, leases and partnerships and invests in mortgage loans on real estate. For more information, visit the Company's website at www.transconrealty-invest.com.

TRANSCONTINENTAL REALTY INVESTORS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

For the Three Months Ended

March 31,

2013

2012

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

Revenues:

Rental and other property revenues (including $165 and $167 for the three months ended 2013 and 2012 respectively from related parties)

$

27,277

$

27,215

Expenses:

Property operating expenses (including $259 and $291 for the three months ended 2013 and 2012 respectively from related parties)

13,319

13,020

Depreciation and amortization

5,021

5,157

General and administrative (including $704 and $666 for the three months ended 2013 and 2012 respectively from related parties)

1,837

2,463

Provision on impairment of notes receivable and real estate assets

-

-

Advisory fee to related party

2,138

2,303

Total operating expenses

22,315

22,943

Operating income

4,962

4,272

Other income (expense):

Interest income (including $2,139 and $3,225 for the three months ended 2013 and 2012 respectively from related parties)

2,176

3,229

Other income (including $0 and $1,500 for the three months ended 2013 and 2012 respectively from related parties)

36

1,611

Mortgage and loan interest (including $487 and $754 for the three months ended 2013 and 2012 respectively from related parties)

(9,987

)

(12,477

)

Deferred borrowing costs amortization

(2,433

)

(896

)

Loan charges and prepayment penalties

(3,982

)

(2,392

)

Earnings (losses) from unconsolidated subsidiaries and investees

8

(73

)

Total other expenses

(14,182

)

(10,998

)

Loss before gain on land sales, non-controlling interest, and taxes

(9,220

)

(6,726

)

Gain (loss) on land sales

(48

)

423

Loss from continuing operations before tax

(9,268

)

(6,303

)

Income tax benefit

2,195

761

Net loss from continuing operations

(7,073

)

(5,542

)

Discontinued operations:

Income (loss) from discontinued operations

80

(1,413

)

Gain on sale of real estate from discontinued operations

6,190

3,588

Income tax expense from discontinued operations

(2,195

)

(761

)

Net income from discontinued operations

4,075

1,414

Net loss

(2,998

)

(4,128

)

Net income attributable to non-controlling interest

(111

)

(79

)

Net loss attributable to Transcontinental Realty Investors, Inc.

(3,109

)

(4,207

)

Preferred dividend requirement

(274

)

(277

)

Net loss applicable to common shares

$

(3,383

)

$

(4,484

)

Earnings per share - basic

Loss from continuing operations

$

(0.89

)

$

(0.70

)

Income from discontinued operations

0.48

0.17

Net loss applicable to common shares

$

(0.41

)

$

(0.53

)

Earnings per share - diluted

Loss from continuing operations

$

(0.89

)

$

(0.70

)

Income from discontinued operations

0.48

0.17

Net loss applicable to common shares

$

(0.41

)

$

(0.53

)

Weighted average common share used in computing earnings per share

8,413,469

8,413,469

Weighted average common share used in computing diluted earnings per share

8,413,469

8,413,469

Amounts attributable to Transcontinental Realty Investors, Inc.

Loss from continuing operations

$

(7,184

)

$

(5,621

)

Income from discontinued operations

4,075

1,414

Net loss

$

(3,109

)

$

(4,207

)

TRANSCONTINENTAL REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

March 31,

December 31,

2013

2012

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

Assets

Real estate, at cost

$

948,504

$

978,781

Real estate held for sale at cost, net of depreciation ($11,164 for 2013 and $4,658 for 2012)

20,237

18,077

Real estate subject to sales contracts at cost, net of depreciation ($16,688 for 2013 and $16,412 for 2012)

42,874

45,706

Less accumulated depreciation

(139,345

)

(145,614

)

Total real estate

872,270

896,950

Notes and interest receivable

Performing (including $55,937 in 2013 and $58,007 in 2012 from related parties)

58,750

60,637

Non-performing

737

723

Less allowance for estimated losses (including $2,097 in 2013 and 2012 from related parties)

(2,262

)

(2,262

)

Total notes and interest receivable

57,225

59,098

Cash and cash equivalents

7,836

16,620

Related party receivables

2,279

-

Investments in unconsolidated subsidiaries and investees

5,415

5,439

Other assets

54,586

67,237

Total assets

$

999,611

$

1,045,344

Liabilities and Shareholders' Equity

Liabilities:

Notes and interest payable

$

712,855

$

730,931

Notes related to assets held for sale

18,183

18,915

Notes related to subject to sales contracts

53,838

55,976

Stock-secured notes payable

2,212

2,221

Related party payables

-

10,057

Deferred gain (from sales to related parties)

53,096

53,096

Accounts payable and other liabilities (including $4,261 in 2013 and $4,282 in 2012 to related parties)

29,570

41,019

869,754

912,215

Shareholders' equity:

Preferred stock, Series C: $.01 par value, authorized 10,000,000 shares, issued and outstanding 30,000 shares in 2013 and 2012 respectively (liquidation preference $100 per share) Series D: $.01 par value, authorized, issued and outstanding 100,000 shares in 2013 and 2012 respectively

1

1

Common stock, $.01 par value, authorized 10,000,000 shares; issued 8,413,669 shares in 2013 and 2012, and outstanding 8,413,469 shares in 2013 and 2012

84

84

Treasury stock at cost; 200 shares in 2013 and 2012

(2

)

(2

)

Paid-in capital

272,500

272,774

Retained earnings

(159,668

)

(156,559

)

Total Transcontinental Realty Investors, Inc. shareholders' equity

112,915

116,298

Non-controlling interest

16,942

16,831

Total equity

129,857

133,129

Total liabilities and equity

$

999,611

$

1,045,344



Transcontinental Realty Investors, Inc.
Investors Relations
Gene Bertcher, 800-400-6407
investor.relations@transconrealty-invest.com

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS:

The article Transcontinental Realty Investors, Inc. Reports First Quarter 2013 Results originally appeared on Fool.com.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.