American Realty Investors, Inc. (NYSE:ARL), a Dallas-based real estate investment company, today reported results of operations for the year ended December 31, 2009. ARL reported a net loss applicable to common shares of $72.6 million or $6.46 per share, as compared to prior year net income applicable to common shares of $20.1 million or $1.85 per share. Net loss for the three months ended December 31, 2009 was $26.3 million or $2.34 per share, as compared to prior year net loss applicable to common shares of $18.1 million or $1.61 per share for the three months ended December 31, 2008.

Results of the year ended December 31, 2009 to the same period ended December 31, 2008;

Rental revenues were $183.7 million for the twelve months ended December 31, 2009. The rental revenues for 2009, as compared to the same period in 2008, increased by $6.3 million, which by segment is an increase in apartment revenues of $11.3 million and an increase in commercial properties of $2.2 million, offset by a decrease in our hotels of $4.5 million and a decrease in our land and other segment of $2.7 million.

Property operating expenses were $107.2 million for the twelve months ended December 31, 2009. The property operating expenses for 2009, as compared to the same period in 2008, decreased by $8.2 million, which by segment is an increase in our apartments of $5.3 million, a decrease in our commercial properties of $3.6 million, a decrease in our land and other segments of $7.7 million, and a decrease in our hotels of $2.2 million.

Depreciation expenses were $30.6 million for the twelve months ended December 31, 2009. The depreciation expense for 2009, as compared to the same period in 2008, increased by $3.5 million, which by segment is $3.4 million due to our apartments, $1.2 million due to our commercial buildings, and a decrease of $1.1 million due to our land and other holdings.

Provision for allowance on notes receivable and impairment was $44.6 million for the twelve months ended December 31, 2009. The provision on impairment of notes receivable, investment in real estate partnerships, and real estate assets for 2009, as compared to the same period in 2008, increased by $32.2 million.

Interest expenses were $87.9 million for the twelve months ended December 31, 2009. The interest expense for 2009, as compared to the same period in 2008, decreased by $3.0 million, which by segment is an increase in our apartment portfolio of $1.7 million, offset by a decrease in our commercial portfolio of $1.6 million, a decrease in our hotel portfolio of $0.2 million, and a decrease in our land and other portfolios of $2.9 million.

Gain on land sales were $11.6 million for the twelve months ended December 31, 2009. The gain on land sales for 2009, as compared to the same period in 2008, increased by $6.0 million. The majority of the increase in 2009 is due to the recognition of $3.4 million in prior year deferred gain due to the payoff of seller financing along with an increase in land sales in the current year.

Income from discontinued operations was $6.5 million for the year ended 2009 as compared to $70.9 million for the same period in 2008. Included in discontinued operations are 10 and 37 properties as of 2009 and 2008, respectively.

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. We invest in real estate through direct equity ownership and partnerships nationwide. For more information, go to ARL’s web site at www.amrealtytrust.com.
 
AMERICAN REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
   
For the Years Ended
December 31,
2009 2008
 
Revenues:
Rental and other property revenues $ 183,657 $ 177,367
 
Expenses:
Property operating expenses 107,226 115,473
Depreciation and amortization 30,549 27,051
General and administrative 14,688 16,938
Provision on impairment of notes receivable and real estate assets 44,578 12,417
Advisory fee to affiliate   15,683     15,940  
Total operating expenses   212,724     187,819  
Operating income (loss) (29,067 ) (10,452 )
 
Other income (expense):
Interest income 9,701 10,876
Other income 4,171 5,213
Mortgage and loan interest (87,902 ) (90,912 )
Earnings from unconsolidated subsidiaries and investees 35 (968 )
Gain on foreign currency translation 292 (517 )
Involuntary Conversion - -
Litigation settlement   (1,458 )   (875 )
Total other expenses   (75,161 )   (77,183 )
Loss before gain on land sales, non-controlling interest, and taxes (104,228 ) (87,635 )
Gain on land sales   11,605     5,584  
Loss from continuing operations before tax (92,623 ) (82,051 )
Income tax benefit   3,492     38,158  
Net loss from continuing operations   (89,131 )   (43,893 )
Discontinued operations:
Loss from discontinued operations (142 ) (10,552 )
Gain on sale of real estate from discontinued operations 10,106 119,572
Income tax expense from discontinued operations   (3,492 )   (38,158 )
Net income (loss) (82,659 ) 26,969
Net income (loss) attributable to non-controlling interests   12,518     (4,335 )
Net income (loss) attributable to American Realty Investors, Inc. (70,141 ) 22,634
Preferred dividend requirement   (2,488 )   (2,487 )
Net income (loss) applicable to common shares $ (72,629 ) $ 20,147  
 
Earnings per share - basic
Loss from continuing operations $ (7.04 ) $ (4.66 )
Discontinued operations   0.58     6.51  
Net income (loss) applicable to common shares $ (6.46 ) $ 1.85  
 
Earnings per share - diluted
Loss from continuing operations $ (7.04 ) $ (4.66 )
Discontinued operations   0.58     6.51  
Net income (loss) applicable to common shares $ (6.46 ) $ 1.85  
 
Weighted average common share used in computing earnings per share 11,237,066 10,888,833
Weighted average common share used in computing diluted earnings per share 11,237,066 10,888,833
 
 
Amounts attributable to American Realty Investors, Inc.
Loss from continuing operations $ (89,131 ) $ (43,893 )
Income from discontinued operations   6,472     70,862  
Net income (loss) $ (82,659 ) $ 26,969  
 
AMERICAN REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
     
December 31, December 31,
2009 2008
(dollars in thousands, except share
and par value amounts)
Assets
Real estate, at cost $ 1,718,837 $ 1,712,506
Real estate held for sale at cost, net of depreciation 5,147 10,333
Real estate subject to sales contracts at cost, net of depreciation 53,341 55,100
Less accumulated depreciation   (195,804 )   (164,537 )
Total real estate 1,581,521 1,613,402
Notes and interest receivable
Performing 91,872 68,845
Non-performing 3,108 20,032
Less allowance for estimated losses   (11,836 )   (11,874 )
Total notes and interest receivable 83,144 77,003
Cash and cash equivalents 4,887 6,042
Restricted cash - 271
Investments in securities - 2,775
Investments in unconsolidated subsidiaries and investees 13,149 27,113
Other assets   123,353     115,547  
Total assets $ 1,806,054   $ 1,842,153  
 
 
Liabilities and Shareholders’ Equity
Liabilities:
Notes and interest payable $ 1,327,188 $ 1,311,935
Notes related to assets held-for-sale 5,002 7,722
Notes related to subject to sales contracts 61,886 62,972
Stock-secured notes payable 24,853 14,026
Affiliate payables 20,574 23,018
Accounts payable and other liabilities   155,202     124,902  
1,594,705 1,544,575
Commitments and contingencies:
Shareholders’ equity:
Preferred Stock, $2.00 par value, authorized 15,000,000
shares, issued and outstanding Series A, 3,390,913 shares
in 2009 and in 2008 (liquidation preference $33,909),
including 900,000 shares in 2009 and 2008 held by
subsidiaries 4,979 4,979
 
Common Stock, $.01 par value, authorized 100,000,000
shares; issued 11,874,138 shares in 2009 and in 2008 114 114
 
Treasury stock at cost; 637,072 shares in 2009 and 2008,
which includes 276,972 shares held by TCI (consolidated)
as of 2009 and 2008 (5,954 ) (5,954 )
Paid-in capital 91,081 92,609
Retained earnings 46,971 119,599
Accumulated other comprehensive income   2,186     4,331  
Total American Realty Investors, Inc. shareholders'
equity   139,377     215,678  
 
Non-controlling interest   71,972     81,900  
Total equity   211,349     297,578  
Total liabilities and equity $ 1,806,054   $ 1,842,153  

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