EX-99. 2 rrd113052_12780.htm EXHIBIT 99.1 PRESS RELEASE

EXHIBIT 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

 

 

Contact:

American Realty Investors, Inc.

Investor Relations

(800) 400-6407

investor.relations@primeasset.com

 

American Realty Investors, Inc. Reports 2005 Results

DALLAS (March 31, 2006) -- American Realty Investors, Inc. (NYSE: ARL), a Dallas-based real estate investment company, announced today that the Company reported net income applicable to common shares of $12.8 million and $44.8 million, or $1.26 and $4.42 per share, for the three and twelve months ended December 31, 2005, compared to net income of $47.6 million and $30.6 million, or $4.56 and $2.90 per share, in the same periods in 2004.

Income, sales, and related expenses and costs for the three and twelve months of 2005 resulted in increased operating income of $3.9 million and $12.5 million, compared to operating losses of $(7.4) million and $(8.7) million in the 2004 comparable periods, and included:

  • Increases in income from rents to $44.4 million and $165.8 million in 2005, from $39.4 million and $146.6 million in 2004. The increase was primarily attributable to completed apartment construction and the August 2005 acquisition of the 600 Las Colinas office building in Dallas, Texas.

  • A decline in property operations expense in the comparable quarters, from $31.8 million in 2004 to $29.1 million in 2005. For the year, property operations expense increased to $112.3 million compared to $110.0 million in 2004. The year-over-year increase was primarily attributable to completed apartment construction.

  • Increases in restaurant sales to $9.5 million and $36.8 million in 2005, from $8.9 million and $34.5 million in 2004. Cost of sales increased to $7.0 million and $27.9 million in 2005, from $6.8 million and $26.7 million in 2004. The increases were primarily attributable to same-store sales increases during 2005. Also, two new concepts were not open during the 2004 periods.

  • Other operating expenses - consisting of depreciation and amortization, general and administrative expenses, and advisory fees to affiliate - were $13.9 million and $50.0 million in 2005, compared to $17.1 million and $53.1 million in 2004. Depreciation and amortization, general and administrative expenses and advisory fees all declined for the quarter as well as for the year.

Other income items - consisting of interest from notes receivable, gain on foreign currency transaction, gain on settlement of debt, and other income - decreased to $2.2 million and $8.7 million in the three and twelve months of 2005, compared to $19.1 million and $25.3 million in 2004. The decrease was primarily attributable to decreases in gain on foreign currency transaction and gain on settlement of debt.

Other expense items - consisting of mortgage and loan interest expense, discount on sale of notes receivable, net income fee to affiliate, incentive fee to affiliate, litigation settlement and charges for asset impairment -- decreased to $18.3 million and $68.3 million in the three and twelve months of 2005 from $36.3 million and $79.3 million in 2004. The decrease was primarily attributable to decreases in litigation settlement and provision for asset impairment.

Gain on land sales declined for the quarter, from $8.2 million in 2004 to $5.4 million in 2005. For the year however, gain on land sales increased to $39.9 million compared to $11.8 million in 2004, primarily due to the 2005 sale of 149 acres of land in Palm Desert, California.

Income from discontinued operations decreased to $22.6 million and $57.3 million in 2005, compared to $70.3 and $91.4 million in 2004, representing 25 properties sold or held-for-sale in 2005 and 27 properties sold in 2004.

 

About American Realty Investors, Inc.

American 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. For more information, go to ARI's web site at www.amrealtytrust.com

 

 

 

 

AMERICAN REALTY INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

For the Three Months
Ended December 31,

For the Twelve Months
Ended December 31,
 

2005

2004

2005

2004
 

(dollars in thousands)
   

Rental and other property revenues

$44,423

$39,429

$165,821

$146,599

Restaurant sales

9,487

8,866

36,818

34,525

Total operating revenues

53,910

48,295

202,639

181,124
         

Property operating expenses

29,144

31,805

112,297

109,996

Restaurant cost of sales

6,998

6,788

27,906

26,713

Other operating expenses

13,852

17,129

49,963

53,093

Total operating expenses

49,994

55,722

190,166

189,802
         

Operating income (loss)

3,916

(7,427)

12,473

(8,678)
         

Other income

2,245

19,115

8,738

25,294

Other expenses

(18,286)

(36,303)

(68,336)

(79,287)
         

Loss before gain on land sales, minority interest, and equity in earnings of investees

(12,125)

(24,615)

(47,125)

(62,671)
         

Gain on land sales

5,401

8,198

39,926

11,781

Minority interest

(2,647)

(8,111)

(3,056)

(7,270)

Equity in income (loss) of investees

114

2,465

397

(41)
         

Loss from continuing operations

(9,257)

(22,063)

(9,858)

(58,201)
         

Income from discontinued operations

22,640

70,313

57,275

91,395
         

Net income

13,383

48,250

47,417

33,194

Preferred dividend requirement

(623)

(650)

(2,572)

(2,601)
         

Net income applicable to common shares

$12,760

$47,600

$44,845

$30,593
         

Basic and diluted earnings per share:

        

Net income (loss) from continuing operations

$(0.97)

$(2.17)

$(1.22)

$(5.76)

Discontinued operations

2.23

6.73

5.64

8.66

Net income (loss) applicable to common shares

$1.26

$4.56

$4.42

$2.90
         

Weighted average Common shares used to compute earnings per share:

      

Basic and diluted

10,149,000

10,448,389

10,149,000

10,559,571

 

 

AMERICAN REALTY INVESTORS, INC.

CONSOLIDATED BALANCE SHEETS
 

December 31,

2005

December 31,

2004
 

(dollars in thousands)

Assets

  

Real estate held for investment

$ 1,025,661

$ 877,677

Less--accumulated depreciation

(153,597)

(157,138)
 

872,064

720,539
     

Real estate held for sale, net of depreciation

172,303

192,533

Real estate subject to sales contract

68,738

70,350
     

Notes and interest receivable

    

Performing ($44,500 in 2005 and $43,605 in 2004 from affiliates)

70,894

67,894

Non-performing

11,546

6,632
 

82,440

74,526

Less--allowance for estimated losses

(1,000)

(1,865)
 

81,440

72,661
     

Restaurant equipment

13,911

13,747

Less--accumulated depreciation

(7,528)

(6,608)
 

6,383

7,139
     

Marketable securities, at market value

7,446

6,670

Cash and cash equivalents

13,904

22,401

Investments in equity investees

13,521

8,212

Goodwill, net of accumulated amortization ($1,763 in 2005 and 2004)

11,858

11,858

Other intangibles, net of accumulated amortization ($926 in 2005 and $871 in 2004)

1,449

1,480

Other assets ($30,441 in 2005 and $27,704 in 2004 from affiliates)

96,689

77,000
 

$ 1,345,795

$ 1,190,843
     

Liabilities and Stockholders' Equity

    

Liabilities

    

Notes and interest payable ($45,530 in 2005 and $36,298 in 2004 to affiliate)

$ 817,944

$ 722,985

Liabilities related to assets held-for-sale

144,555

156,959

Liabilities subject to sales contract

59,323

59,977

Stock-secured notes payable

22,549

18,663

Accounts payable and other liabilities ($4,667 in 2005 and $2,557 in 2004 to affiliates)

93,842

71,357
 

1,138,213

1,029,941
     

Commitments and contingencies

    
     

Minority interest

59,185

57,893
     

Stockholders' equity

    

Preferred Stock, $2.00 par value, authorized 50,000,000 shares, issued and outstanding

    

Series A, 3,390,913 shares in 2005 and 3,469,350 shares in 2004 (liquidation preference

$33,909), including 900,000 shares in 2005 and 2004 held by subsidiaries

4,982

5,139

Series E, 50,000 shares in 2004

--

100

Common Stock, $.01 par value, authorized 100,000,000 shares; issued 11,592,272 shares in 2005

and 2004

114

114

Treasury stock, at cost, 1,443,272 shares in 2005 and 2004

(15,146)

(15,146)

Paid-in capital

93,389

94,416

Retained earnings

64,805

19,934

Accumulated other comprehensive income (loss)

253

(1,548)
 

148,397

103,009
 

$ 1,345,795

$ 1,190,843