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, 2010. TCI announced today that the Company reported a net loss applicable to common shares of ($10.5 million) or ($1.30) per share, as compared to a net loss applicable to common shares of ($11.0) million or ($1.36) per share for the same period ended 2009.

Rental and other property revenues were $37.0 million for the three months ended March 31, 2010. This represents an increase of $1.2 million, as compared to the prior period revenues of $35.8 million. The change, by segment, is an increase in the apartment portfolio of $0.8 million, an increase in the other portfolio of $1.0, offset by decreases in the commercial portfolio of $0.5 million and the land portfolio of $0.1 million.

Property operating expenses were $20.2 million for the three months ended March 31, 2010. This represents a decrease of $2.2 million, as compared to the prior period operating expenses of $22.4 million. This change, by segment, is a decrease in the apartment portfolio of $2.4 million, offset by increases in the commercial and land portfolios of $0.1 million and $0.1 million, respectively.

Other income was $0.7 million for the three months ended March 31, 2010, as compared to $3.1 million in the prior period. This represents a decrease of $2.4 million, which is mainly due to $2.3 million of gain recorded, in the prior period, on the disposition of our investment in a Korean REIT.

Mortgage and loan interest expense was $16.8 million for the three months ended March 31, 2010. This represented an increase of $0.8 million, as compared to the prior period expense of $16.0 million. This change, by segment, is an increase in the apartment portfolio of $0.4 million, an increase in the commercial portfolio of $0.4 million, and an increase in the other portfolio of $0.4 million, offset by a decrease in the land portfolio of $0.4 million.

Net income from discontinued operations was $0.2 million for the period ended March 31, 2010. For the same period ended 2009, there was a net loss of $0.2 million from discontinued operations. Discontinued operations include properties sold in 2010 that were held in 2009 and properties held for sale as of March 31, 2010. In 2010, we had one apartment complex held for sale (Baywalk), and two apartment complexes that we sold subsequent to March 31, 2010 (Foxwood and Longfellow Arms). In 2009, we sold one apartment complex (Bridges on Kinsey) and three commercial properties (5000 Space Center, 5360 Tulane and Cullman Shopping Center).

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 equity ownership and partnerships nationwide. For more information, visit the Company’s website at www.transconrealty-invest.com .
TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 
 

For the Three Months Ended

March 31,
2010     2009
(dollars in thousands, except share and per share amounts)
Revenues:
Rental and other property revenues $ 37,003 $ 35,796
 
Expenses:
Property operating expenses 20,184 22,432
Depreciation and amortization 6,961 7,062
General and administrative 1,837 1,662
Provision on impairment of notes receivable and real estate assets - 379
Advisory fee to affiliate   3,097     2,857  
Total operating expenses   32,079     34,392  
Operating income 4,924 1,404
 
Other income (expense):
Interest income 859 636
Other income 664 3,105
Mortgage and loan interest (16,772 ) (16,008 )
Earnings from unconsolidated subsidiaries and investees (60 ) -
Litigation settlement   -     760  
Total other expenses   (15,309 )   (11,507 )
Loss before gain on land sales, non-controlling interest, and tax (10,385 ) (10,103 )
Gain (loss) on land sales   6     (252 )
Loss from continuing operations before tax (10,379 ) (10,355 )
Income tax benefit (expense)   162     (293 )
Net loss from continuing operations   (10,217 )   (10,648 )
Discontinued operations:
Income (loss) from discontinued operations 325 (870 )
Gain on sale of real estate from discontinued operations - 532
Income tax benefit (expense) from discontinued operations   (114 )   118  
Net income (loss) from discontinued operations 211 (220 )
Net loss (10,006 ) (10,868 )
Net income (loss) attributable to non-controlling interest   (273 )   109  
Net loss attributable to Transcontinental Realty Investors, Inc. (10,279 ) (10,759 )
Preferred dividend requirement   (262 )   (250 )
Net loss applicable to common shares $ (10,541 ) $ (11,009 )
 
Earnings per share - basic
Loss from continuing operations $ (1.33 ) $ (1.33 )
Discontinued operations   0.03     (0.03 )
Net loss applicable to common shares $ (1.30 ) $ (1.36 )
 
Earnings per share - diluted
Loss from continuing operations $ (1.33 ) $ (1.33 )
Discontinued operations   0.03     (0.03 )
Net loss applicable to common shares $ (1.30 ) $ (1.36 )
 
Weighted average common share used in computing earnings per share 8,113,669 8,113,669
Weighted average common share used in computing diluted earnings per share 8,113,669 8,113,669
 
 
Amounts attributable to Transcontinental Realty Investors, Inc.
Loss from continuing operations $ (10,217 ) $ (10,648 )
Income (loss) from discontinued operations   211     (220 )
Net loss $ (10,006 ) $ (10,868 )
 
TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
     
March 31, December 31,
2010 2009
(dollars in thousands, except share and par value amounts)
Assets
Real estate, at cost $ 1,504,875 $ 1,520,043
Real estate held for sale at cost, net of depreciation 25,826 5,147
Real estate subject to sales contracts at cost, net of depreciation 59,048 59,048
Less accumulated depreciation   (143,092 )   (137,054 )
Total real estate 1,446,657 1,447,184
Notes and interest receivable
Performing 48,308 48,051
Less allowance for estimated losses   (2,804 )   (2,804 )
Total notes and interest receivable 45,504 45,247
Cash and cash equivalents 1,368 5,665
Investments in unconsolidated subsidiaries and investees 8,714 9,358
Other assets   83,712     100,833  
Total assets $ 1,585,955   $ 1,608,287  
 
Liabilities and Shareholders’ Equity
Liabilities:
Notes and interest payable $ 1,104,809 $ 1,121,737
Notes related to assets held-for-sale 24,603 5,002
Notes related to subject to sales contracts 61,886 61,886
Affiliate payables 47,420 50,163
Deferred revenue (from sales to related parties) 60,678 60,678
Accounts payable and other liabilities   51,509     63,405  
1,350,905 1,362,871
Commitments and contingencies:
Shareholders’ equity:
Preferred Stock, Series C: $.01 par value, authorized 10,000,000 shares, issued and outstanding 30,000 shares in 2010 and 2009 respectively (liquidation preference $100 per share). Series D: $.01 par value, authorized, issued and outstanding 100,000 shares in 2010 and 2009 respectively 1 1
Common Stock, $.01 par value, authorized 10,000,000 shares; issued and outstanding 8,113,669 for 2010 and 2009 81 81
Paid-in capital 261,853 262,118
Retained earnings   (44,997 )   (34,718 )
Total Transcontinental Realty Investors, Inc. shareholders' equity 216,938 227,482
Non-controlling interest   18,112     17,934  
Total equity   235,050     245,416  
Total liabilities and equity $ 1,585,955   $ 1,608,287  

Copyright Business Wire 2010

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