ari8kex991051613.htm

AMERICAN 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)	$	28,122		$	28,044

Expenses:
Property operating expenses (including $269 and $306 for the three months ended 2013 and 2012 respectively from related parties)		13,913			13,668
Depreciation and amortization		5,043			5,152
General and administrative (including $947 and $922 for the three months ended 2013 and 2012 respectively from related parties)		2,227			2,879
Provision on impairment of notes receivable and real estate assets		-			-
Advisory fee to related party		2,554			2,659
Total operating expenses		23,737			24,358
Operating income		4,385			3,686

Other income (expense):
Interest income (including $3,337 and $3,241 for the three months ended 2013 and 2012 respectively from related parties)		3,541			3,340
Other income (including $0 and $1,500 for the three months ended 2013 and 2012 respectively from related parties)		2,536			1,740
Mortgage and loan interest (including $910 and $922 for the three months ended 2013 and 2012 respectively from related parties)		(11,498	)		(13,713	)
Deferred borrowing costs amortization		(2,477	)		(913	)
Loan charges and prepayment penalties		(3,982	)		(2,393	)
Loss on sale of investments		-			(361	)
Earnings from unconsolidated investees		213			117
Total other expenses		(11,667	)		(12,183	)

Loss before gain on land sales, non-controlling interest, and taxes		(7,282	)		(8,497	)
Loss on land sales		(35	)		(1,021	)
Loss from continuing operations before tax		(7,317	)		(9,518	)
Income tax benefit		2,557			714
Net loss from continuing operations		(4,760	)		(8,804	)
Discontinued operations:
Income (loss) from discontinued operations		79			(1,547	)
Gain on sale of real estate from discontinued operations		7,227			3,588
Income tax expense from discontinued operations		(2,557	)		(714	)
Net income from discontinued operations		4,749			1,327
Net loss		(11	)		(7,477	)
Net loss attributable to non-controlling interest		385			1,177
Net income (loss) attributable to American Realty Investors, Inc.		374			(6,300	)
Preferred dividend requirement		(613	)		(613	)
Net loss applicable to common shares	$	(239	)	$	(6,913	)

Earnings per share - basic
Loss from continuing operations	$	(0.43	)	$	(0.71	)
Income from discontinued operations		0.41			0.12
Net loss applicable to common shares	$	(0.02	)	$	(0.59	)

Earnings per share - diluted
Loss from continuing operations	$	(0.43	)	$	(0.71	)
Income from discontinued operations		0.41			0.12
Net loss applicable to common shares	$	(0.02	)	$	(0.59	)

Weighted average common share used in computing earnings per share		11,525,389			11,525,389
Weighted average common share used in computing diluted earnings per share		11,525,389			11,525,389


Amounts attributable to American Realty Investors, Inc.
Loss from continuing operations	$	(4,375	)	$	(7,627	)
Income from discontinued operations		4,749			1,327
Net income (loss) applicable to American Realty Investors, Inc.	$	374		$	(6,300	)

AMERICAN 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	$	1,002,403		$	1,031,632
Real estate held for sale at cost, net of depreciation ($10,842 for 2013 and $4,393 for 2012)		19,510			17,040
Real estate subject to sales contracts at cost, net of depreciation ($16,212 and $15,948 in 2013 and 2012)		39,466			42,286
Less accumulated depreciation		(154,611	)		(160,525	)
Total real estate		906,768			930,433
Notes and interest receivable
Performing (including $112,582 and $114,275 in 2013 and 2012 from related parties)		119,203			120,998
Non-performing		4,199			4,175
Less allowance for estimated losses (including $18,962 in 2013 and 2012 from related parties)		(21,705	)		(21,704	)
Total notes and interest receivable		101,697			103,469
Cash and cash equivalents		8,262			17,141
Investments in unconsolidated investees		10,089			8,168
Other assets		63,603			76,134
Total assets	$	1,090,419		$	1,135,345

Liabilities and Shareholders’ Equity
Liabilities:
Notes and interest payable	$	751,249		$	769,201
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 and margin debt		25,354			25,765
Related party payables		1,894			10,922
Deferred gain (including $71,303 in 2013 and 2012 from sales to related parties)		73,148			73,148
Accounts payable and other liabilities (including $16,443 and $15,746 in 2013 and 2012 to related parties)		82,355			96,314
		1,006,021			1,050,241

Shareholders’ equity:
Preferred stock, Series A: $2.00 par value, authorized 15,000,000 shares, issued and outstanding 3,353,954 shares in 2013 and 2012 (liquidation preference $10 per share), including 900,000 shares in 2013 and 2012 held by subsidiaries		4,908			4,908
Common stock, $.01 par value, authorized 100,000,000 shares; issued 11,941,174 shares and outstanding 11,525,389 shares in 2013 and 2012		115			115
Treasury stock at cost; 415,785 shares in 2013 and 2012 and 229,214 shares held by TCI (consolidated) as of 2013 and 2012		(6,395	)		(6,395	)
Paid-in capital		105,005			105,700
Retained earnings		(52,697	)		(53,071	)
Accumulated other comprehensive income		(786	)		(786	)
Total American Realty Investors, Inc. shareholders' equity		50,150			50,471
Non-controlling interest		34,248			34,633
Total equity		84,398			85,104
Total liabilities and equity	$	1,090,419		$	1,135,345