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, 2014. TCI announced today that the Company
reported a net income applicable to common shares of $4.3 million or
$0.49 per diluted earnings per share, as compared to a net loss
applicable to common shares of $3.4 million or $0.40 per diluted
earnings per share for the same period ended 2013.
The Company continues to demonstrate our 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.
Rental and other property revenues were $19.7 million for the three
months ended March 31, 2014. This represents an increase of $0.2
million, as compared to the prior period revenues of $19.5 million. This
change, by segment, is an increase in the apartment portfolio of $0.7
million, offset by a decrease in the commercial portfolio of $0.5
million. Within the apartment portfolio there was an increase of $0.7
million in the same property portfolio. Our apartment portfolio
continues to thrive in the current economic conditions with occupancies
averaging 95%. Our existing commercial portfolio decreased by $0.5
million in the same store properties. This decrease is due to lost rents
from tenant vacancies. We are continuing to market our properties
aggressively to attract new tenants and strive for continuous
improvement of our properties in order to maintain our existing tenants.
Property operating expenses were $9.6 million for the three months ended
March 31, 2014. This represents an increase of $0.2 million, as compared
to the prior period operating expenses of $9.4 million. This change, by
segment, is an increase in the apartment portfolio of $0.4 million, a
decrease in the commercial portfolio of $0.1 million and a decrease in
the land portfolio of $0.1 million. Within the apartment portfolio, the
increase relates to general repair and maintenance expense and real
estate taxes.
Depreciation and amortization expense was $4.4 million for the three
months ended March 31, 2014. This represents an increase of $0.7
million, as compared to the prior period expense of $3.7 million. This
change is attributable to the commercial portfolio due to new assets
placed in service in the current period.
Mortgage and loan interest expense was $6.8 million for the three months
ended March 31, 2014. This represents a decrease of $1.1 million, as
compared to the prior period expense of $7.9 million. This change by
segment, is a decrease in the apartment portfolio of $0.5 million, a
decrease in the land portfolio of $0.3 million, a decrease in the other
portfolio of $0.5 million, offset by an increase in the commercial
portfolio of $0.2 million. Within the apartment portfolio, the majority
of the decrease relates to the same apartment portfolio due to the
refinances closed with long-term, low interest rates. Within the other
portfolio, the majority of the decrease is due to a decrease in the
interest paid to our Advisor. The decrease in the land portfolio was due
to land sales.
Deferred borrowing costs amortization was $0.9 million for the three
months ended March 31, 2014. This represents a decrease of $1.5 million
as compared to the prior period expense of $2.4 million. The majority of
the decrease is in the same store apartment portfolio due to the write
off in the prior loan deferred borrowing costs upon the refinance into a
new mortgage note.
Loan changes and prepayment penalties were $1.6 million for the three
months ended March 31, 2014. This represents a decrease of $3.9 million.
There were fewer refinances completed in the current period than in the
prior period.
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.
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TRANSCONTINENTAL REALTY INVESTORS, INC.
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited)
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For the Three Months Ended
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March 31,
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2014
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2013
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|
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(dollars in thousands, except per share amounts)
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Revenues:
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|
|
|
|
|
|
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Rental and other property revenues (including $175 and $165 for the
three months ended 2014 and 2013, respectively, from related parties)
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|
$
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19,727
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|
$
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19,505
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|
|
|
|
|
|
|
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Expenses:
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|
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|
|
|
|
|
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Property operating expenses (including $146 and $194 for the three
months ended 2014 and 2013, respectively, from related parties)
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9,592
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|
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9,389
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Depreciation and amortization
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4,444
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|
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3,733
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General and administrative (including $744 and $648 for the three
months ended 2014 and 2013, respectively, from related parties)
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1,560
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1,622
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Provision on impairment of notes receivable and real estate assets
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-
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-
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Net income fee to related party
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490
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56
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|
Advisory fee to related party
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1,852
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|
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|
2,138
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Total operating expenses
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|
17,938
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|
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16,938
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Net operating income
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1,789
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2,567
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|
|
|
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Other income (expenses):
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Interest income (including $1,874 and $2,140 for the three months
ended 2014 and 2013, respectively, from related parties)
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2,113
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2,176
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Other income
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157
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36
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Mortgage and loan interest (including $31 and $487 for the three
months ended 2014 and 2013, respectively, from related parties)
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(6,841
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)
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(7,933
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)
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Deferred borrowing costs amortization
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(932
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)
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(2,416
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)
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Loan charges and prepayment penalties
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(1,582
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)
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(3,937
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)
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Loss on the sale of investments
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-
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(7
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)
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Losses from unconsolidated joint ventures and investees
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(4
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)
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(13
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)
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Litigation settlement
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3,839
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(45
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)
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Total other expenses
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(3,250
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)
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(12,139
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)
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Loss before gain on land sales, non-controlling interest, and taxes
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(1,461
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)
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(9,572
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)
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Gain (loss) on land sales
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753
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(48
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)
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Net loss from continuing operations before taxes
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(708
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)
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(9,620
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)
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Income tax benefit
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1,870
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2,318
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Net income (loss) from continuing operations
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1,162
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(7,302
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)
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Discontinued operations:
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Net income (loss) from discontinued operations
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(710
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)
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432
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Gain on sale of real estate from discontinued operations
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6,053
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|
|
|
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6,190
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Income tax expense from discontinued operations
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(1,870
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)
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|
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|
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(2,318
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)
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Net income from discontinued operations
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|
3,473
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|
|
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|
4,304
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Net income (loss)
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|
|
4,635
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(2,998
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)
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Net loss attributable to non-controlling interest
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(84
|
)
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(111
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)
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Net income (loss) attributable to Transcontinental Realty Investors,
Inc.
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4,551
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(3,109
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)
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Preferred dividend requirement
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|
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(274
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)
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|
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(274
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)
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Net income (loss) applicable to common shares
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|
$
|
4,277
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|
$
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(3,383
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)
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Earnings per share - basic
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Net income (loss) from continuing operations
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$
|
0.10
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$
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(0.91
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)
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Net income from discontinued operations
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0.41
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|
|
|
|
0.51
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Net income (loss) applicable to common shares
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|
$
|
0.51
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$
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(0.40
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)
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Earnings per share - diluted
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Net income (loss) from continuing operations
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$
|
0.09
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|
$
|
(0.91
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)
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Net income from discontinued operations
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0.40
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|
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0.51
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Net income (loss) applicable to common shares
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$
|
0.49
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$
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(0.40
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)
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Weighted average common shares used in computing earnings per share
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8,413,469
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8,413,469
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Weighted average common shares used in computing diluted earnings
per share
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8,639,679
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8,413,469
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Amounts attributable to Transcontinental Realty Investors, Inc.
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Net income (loss) from continuing operations
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|
$
|
1,078
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|
|
|
|
$
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(7,413
|
)
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|
Net income from discontinued operations
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|
|
|
3,473
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|
|
|
|
|
4,304
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Net income (loss)
|
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|
|
$
|
4,551
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|
|
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|
$
|
(3,109
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)
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|
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TRANSCONTINENTAL REALTY INVESTORS, INC.
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CONSOLIDATED BALANCE SHEETS
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(unaudited)
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March 31,
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December 31,
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2014
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2013
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(dollars in thousands, except share and par value amounts)
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Assets
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Real estate, at cost
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$
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742,995
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$
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777,974
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Real estate held for sale at cost, net of depreciation ($28,033 for
2014 and $2,390 for 2013)
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11,945
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16,427
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Real estate subject to sales contracts at cost, net of depreciation
($2,036 for 2014 and $1,949 for 2013)
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25,090
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29,353
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Less accumulated depreciation
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(104,212
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)
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(127,952
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)
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Total real estate
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675,818
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|
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695,802
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Notes and interest receivable:
|
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|
|
|
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Performing (including $60,221 in 2014 and $66,431 in 2013 from
related parties)
|
|
|
|
|
63,479
|
|
|
|
|
69,626
|
|
|
Non-performing
|
|
|
|
|
552
|
|
|
|
|
543
|
|
|
Less allowance for doubtful accounts (including $2,098 in 2014 and
$2,098 in 2013 from related parties)
|
|
|
|
|
(2,262
|
)
|
|
|
|
(2,262
|
)
|
|
Total notes and interest receivable
|
|
|
|
|
61,769
|
|
|
|
|
67,907
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|
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Cash and cash equivalents
|
|
|
|
|
18,177
|
|
|
|
|
16,086
|
|
|
Restricted cash
|
|
|
|
|
27,185
|
|
|
|
|
31,799
|
|
|
Investments in unconsolidated joint ventures and investees
|
|
|
|
|
1,824
|
|
|
|
|
1,697
|
|
|
Receivable from related party
|
|
|
|
|
80,139
|
|
|
|
|
52,380
|
|
|
Other assets
|
|
|
|
|
35,492
|
|
|
|
|
32,000
|
|
|
Total assets
|
|
|
|
$
|
900,404
|
|
|
|
$
|
897,671
|
|
|
|
|
|
|
|
|
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Liabilities and Shareholders’ Equity
|
|
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|
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Liabilities:
|
|
|
|
|
|
|
|
|
Notes and interest payable
|
|
|
|
$
|
578,133
|
|
|
|
$
|
562,734
|
|
|
Notes related to real estate held for sale
|
|
|
|
|
15,717
|
|
|
|
|
17,100
|
|
|
Notes related to real estate subject to sales contracts
|
|
|
|
|
20,991
|
|
|
|
|
23,011
|
|
|
Deferred gain (from sales to related parties)
|
|
|
|
|
53,096
|
|
|
|
|
53,096
|
|
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Accounts payable and other liabilities (including $4,893 in 2014 and
$4,697 in 2013 to related parties)
|
|
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|
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36,536
|
|
|
|
|
50,160
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|
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Total liabilities
|
|
|
|
|
704,473
|
|
|
|
|
706,101
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|
|
|
|
|
|
|
|
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Shareholders’ equity:
|
|
|
|
|
|
|
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Preferred stock, Series C: $0.01 par value, authorized 10,000,000
shares, issued and outstanding 30,000 shares in 2014 and 2013
(liquidation preference $100 per share). Series D: $0.01 par value,
authorized, issued and outstanding 100,000 shares in 2013 and 2012
(liquidation preference $100 per share)
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|
1
|
|
|
|
|
1
|
|
|
Common stock, $0.01 par value, authorized 10,000,000 shares, issued
8,413,669 shares in 2014 and 2013 and outstanding 8,413,469 shares
in 2014 and 2013
|
|
|
|
|
84
|
|
|
|
|
84
|
|
|
Treasury stock at cost, 200 shares in 2014 and 2013
|
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
|
Paid-in capital
|
|
|
|
|
271,446
|
|
|
|
|
271,720
|
|
|
Retained earnings
|
|
|
|
|
(93,478
|
)
|
|
|
|
(98,029
|
)
|
|
Total Transcontinental Realty Investors, Inc. shareholders' equity
|
|
|
|
|
178,051
|
|
|
|
|
173,774
|
|
|
Non-controlling interest
|
|
|
|
|
17,880
|
|
|
|
|
17,796
|
|
|
Total shareholders' equity
|
|
|
|
|
195,931
|
|
|
|
|
191,570
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
900,404
|
|
|
|
$
|
897,671
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Copyright Business Wire 2014