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:
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