EX-99.1 2 d67818exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
     
NEWS RELEASE
    
 
    
FOR IMMEDIATE RELEASE
  Contact:
 
  Transcontinental Realty Investors, Inc.
 
  Investors Relations
 
  (800) 400-6407
 
  investor.relations@primeasset.com
Transcontinental Realty Investors, Inc. Reports First Quarter 2009 Results
DALLAS (May 15, 2009) — Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported results of operations for the first quarter ended March 31, 2009. TCI announced today that the company reported a net loss applicable to common shares of ($ 11.0 million) or ($1.37) per diluted earnings per share which includes a gain on sale of discontinued operations of $0.5 million, as compared to a net income of $67.1 million or $8.07 per diluted earnings per share which includes a gain on sale of discontinued operations of $98.1 million for the same period ended 2008.
Results of operations for the three months ended March 31, 2009, as compared to the same period ended 2008.
Rental and other property revenues increased by $4.7 million as compared to the prior period which by segment is an increase in the apartment portfolio of $2.7 million, the commercial portfolio of $2.5 million, offset by a decrease in the land and other portfolio of $0.5 million.
Property operating expenses increased by $2.1 million as compared to the prior period which by segment is an increase in the apartment portfolio of $3.9 million and an increase in the other portfolio of $0.1 million, offset by decreases in the commercial and land portfolios of $0.8 million and $1.1 million, respectively.
Depreciation and amortization increased by $1.4 million as compared to the prior period which by segment is an increase in the apartment portfolio of $1.0 million, and an increase in the commercial portfolio of $0.4 million.
Other income increased by $3.6 million as compared to the prior period. The increase is due to $2.3 million for gains on the disposition of our investment in the Korean REIT. In addition, we received $0.8 million in litigation settlements and $0.5 million in other non-recurring income.
Mortgage and loan interest expense decreased by $1.1 million as compared to the prior period which by segment is a decrease in the apartment portfolio of $0.4 million, a decrease in the commercial portfolio of $0.4 million, and a decrease in the other portfolio of $0.3 million.
Earnings from unconsolidated subsidiaries and investees decreased by $5.1 million. There were no material amounts of equity pickup from investees in the current period.
Provision for allowance on notes receivables and impairment decreased by $6.6 million. The majority of the prior period amount was due to setting up an allowance for various investments within our portfolio.
Gain on land sales decreased by $1.5 million as compared to the prior period. The decrease was due to recording a loss of $0.3 million on the sale of 0.3 acres of land known as West End land in the current period. In the prior quarter, we sold 14 acres of land for a gain of $1.3 million.
The 2009 discontinued operations consist of the Cullman Shopping Center that was sold subsequent to the quarter ended March 31, 2009. In addition, we recognized the deferred gain on the sale of the Hartford building sold in 2002. Discontinued operations for 2008 relates to 26 income producing properties of which 25 were sold in 2008.
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 STATEMENTS OF OPERATIONS
(unaudited)
                 
    For the Three Months Ended  
    March 31,  
    2009     2008  
    (dollars in thousands, except  
    share and per share amounts)  
Revenues:
                
 
                
Rental and other property revenues
   $ 37,371     $ 32,647  
 
                
Expenses:
                
Property operating expenses
     24,072       21,938  
Depreciation and amortization
     7,308       5,932  
General and administrative
     1,563       2,403  
Advisory fee to affiliate
     2,857       2,997  
 
            
Total operating expenses
     35,800       33,270  
 
            
 
                
Operating income (loss)
     1,571       (623 )
 
                
Other income (expense):
                
Interest income
     636       763  
Other income
     3,906       302  
Mortgage and loan interest
     (16,629 )     (17,734 )
Earnings from unconsolidated subsidiaries and investees
     —       5,112  
Provision for allowance on notes receivable and impairment
     (379 )     (7,000 )
 
            
Total other expenses
     (12,466 )     (18,557 )
 
            
 
                
Loss before gain on land sales, non-controlling interest, and tax
     (10,895 )     (19,180 )
Gain (loss) on land sales
     (251 )     1,275  
 
            
Loss from continuing operations before tax
     (11,146 )     (17,905 )
Income tax benefit (expense)
     (110 )     29,836  
 
            
Net income (loss) from continuing operations
     (11,256 )     11,931  
 
                
Discontinued operations:
                
 
                
Income (loss) from discontinued operations
     65       (12,813 )
Gain on sale of real estate from discontinued operations
     532       98,059  
Income tax expense from discontinued operations
     (209 )     (29,836 )
 
            
 
Net income (loss)
     (10,868 )     67,341  
Less: net income attributable to non-controlling interest
     109       —  
 
            
Net income (loss) attributable to Transcontinental Realty Investors, Inc.
     (10,759 )     67,341  
Preferred dividend requirement
     (250 )     (240 )
 
            
Net income (loss) applicable to common shares
   $ (11,009 )   $ 67,101  
 
            
 
                
Earnings per share — basic
                
Income (loss) from continuing operations
   $ (1.42 )   $ 1.45  
Discontinued operations
     0.05       6.86  
 
            
Net income (loss) applicable to common shares
   $ (1.37 )   $ 8.31  
 
            
 
                
Earnings per share — diluted
                
Income (loss) from continuing operations
   $ (1.42 )   $ 1.41  
Discontinued operations
     0.05       6.66  
 
            
Net income (loss) applicable to common shares
   $ (1.37 )   $ 8.07  
 
            
 
                
Weighted average common share used in computing earnings per share
     8,113,669       8,075,453  
Weighted average common share used in computing diluted earnings per share
     8,113,669       8,311,693  
 
                
Amounts attributable to Transcontinental Realty Investors, Inc.
                
Income (loss) from continuing operations
   $ (11,147 )   $ 11,931  
Income from discontinued operations
     388       55,410  
 
            
Net income (loss)
   $ (10,759 )   $ 67,341  
 
            

 

 

TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
                 
    March 31,     December 31,  
    2009     2008  
    (dollars in thousands, except share and  
    par value amounts)  
Assets
                
Real estate, at cost
   $ 1,531,183     $ 1,526,016  
Real estate held for sale, at cost net of depreciation
     4,291       8,018  
Real estate subject to sales contracts, at cost net of depreciation
     60,367       60,807  
Less accumulated depreciation
     (120,553 )     (114,050 )
 
            
Total real estate
     1,475,288       1,480,791  
Notes and interest receivable , Performing
     34,896       42,413  
Less allowance for estimated losses
     (988 )     (3,293 )
 
            
Total notes and interest receivable
     33,908       39,120  
Cash and cash equivalents
     2,150       5,983  
Investments in securities
     —       2,775  
Investments in unconsolidated subsidiaries and investees
     23,446       23,365  
Other assets
     81,684       88,033  
 
            
Total assets
   $ 1,616,476     $ 1,640,067  
 
            
 
                
Liabilities and Shareholders’ Equity
                
 
                
Liabilities:
                
 
                
Notes and interest payable
   $ 1,106,715     $ 1,100,852  
Notes related to assets held-for-sale
     993       4,191  
Notes related to subject to sales contracts
     62,287       62,972  
 
                
Accounts payable and other liabilities
     135,535       147,356  
 
            
 
     1,305,530       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
     262,983       263,290  
Retained earnings
     34,221       44,980  
Accumulated other comprehensive income
     —       2,575  
 
            
Total Transcontinental Realty Investors, Inc. shareholders’ equity
     297,286       310,927  
Non-controlling interest
     13,660       13,769  
 
            
Total equity
     310,946       324,696  
 
            
Total liabilities and equity
   $ 1,616,476     $ 1,640,067