Income Opportunity Realty Investors, Inc. Reports Fourth Quarter And Full Year 2011 Results

Income Opportunity Realty Investors, Inc. (AMEX:IOT), a Dallas-based real estate investment company, today reported results of operations for the fourth quarter ended December 31, 2011. During the three months ended December 31, 2011, we had a net income applicable to common shares of $3.02 million, or $0.72 per diluted earnings per share, as compared to a net income applicable to common shares of $1.73 million, or $0.41 per diluted earnings per share for the same period ended 2010.

The surplus cash flow notes receivable and interest income is recorded upon the receipt of cash. During the three months ended December 31, 2011, the Company recorded interest income of $2.7 million as compared to $2.6 million during the same period ended 2010.

We had a net income applicable to common shares of $0.67 million, or $0.16 per diluted earnings per share for the year ended December 31, 2011, as compared to a net income applicable to common shares of $1.84 million, or $0.44 per diluted earnings per share for the same period ended 2010.

There were no rental and other property revenues for the twelve months ended December 31, 2011, and December 31, 2010. In 2011, we recognized the sale of the land and storage warehouse known as Eagle Crest, resulting in no further rental revenues and the reclassification of its financial results to discontinued operations.

Property operations expenses were $22,000 for the twelve months ended December 31, 2011. This represents a decrease of $21,000, as compared to the prior period operating expenses of $43,000, due to a decrease in professional services and POA fees.

Interest income was $4.4 million for the twelve months ended December 31, 2011. This represents an increase of $0.1 million in the current year, as compared to interest income of $4.3 million in the prior period. The increase is due to the payments received on our notes receivables from Unified Housing Foundation, an affiliated entity. The receivables are surplus cash flow notes. The entity is required to pay on the notes when they generate surplus cash flow, thus interest income is recorded when received. More surplus cash flow was generated in the current year, as compared to the prior year.

Mortgage loan interest expense was $1.2 million for the twelve months ended December 31, 2011. This represents an increase of $0.1 million in the current year, as compared to interest expense of $1.1 million in the prior period.

Earnings from unconsolidated subsidiaries and investees relate to IOT’s 10.0% investment in TCI Eton Square, LP. This investment is accounted for under the equity method and recognizes its portion of the current period earnings.

Due to the 2011 net income, we had a net income fee expense due to our Advisor. This fee is based on a percentage of total net income. The net income fee in 2011 was $54,000 in comparison to the 2010 net income fee of $99,000. This fee was lower in the current year primarily due to reduced net income related to the income tax expense charged per the tax sharing agreement of $647,000.

Income tax expense was $821,000 for the twelve months ended December 31, 2011. This represents an increase of $869,000 as compared to the prior period income tax benefit of $48,000. The increase was primarily due to the $647,000 income tax due according to the tax sharing agreement with TCI. In the prior year, there was no income tax due, therefore no payment was necessary.

About Income Opportunity Realty Investors, Inc.

Income Opportunity 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. The Company invests in real estate through direct equity ownership and partnerships nationwide. For more information, visit the Company’s website at www.incomeopp-realty.com.
     
INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
 
December 31, December 31,
2011 2010
(dollars in thousands, except share and par value amounts)
Assets
Real estate land holdings, at cost $ 24,511 $ 24,511
Real estate land holdings subject to sales, at cost   -     5,050  
Total real estate 24,511 29,561
 
Notes and interest receivable from related parties 31,612 38,405
Less allowance for doubtful accounts   (1,826 )   (1,826 )
Total notes and interest receivable 29,786 36,579
Cash and cash equivalents 1 20
Investments in unconsolidated subsidiaries and investees 37 89
Receivable and accrued interest from related parties 52,160 48,598
Other assets   1,546     2,240  
Total assets $ 108,041   $ 117,087  
 
Liabilities and Shareholders’ Equity
Liabilities:
Notes and interest payable $ 28,588 $ 27,335
Notes related to assets subject to sales contracts - 9,269
Deferred revenue (from sales to related parties) 5,127 6,550
Accounts payable and other liabilities (including $0 in 2011 and $1 in 2010 from affiliated and related parties)   125     401  
33,840 43,555
Commitments and contingencies:
Shareholders’ equity:
Common stock, $.01 par value, authorized 10,000,000 shares; issued 4,173,675 shares in 2011 and 2010 42 42
Treasury stock at cost, 5,461 shares in 2011 and 2010 (39 ) (39 )
Paid-in capital 61,955 61,955
Retained earnings   12,243     11,574  
Total shareholders' equity   74,201     73,532  
Total liabilities and shareholders' equity $ 108,041   $ 117,087  
 
 
       
INCOME OPPORTUNITY REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 
For the Years Ended December 31,
2011 2010 2009
(dollars in thousands, except share and per share amounts)
Revenues:
Rental and other property revenues $ - $ - $ -
 
Expenses:
Property operating expenses 22 43 50
General and administrative (including $205 and $178 and $117 for the year ended 2011 and 2010 and 2009 respectively from affiliates and related parties) 445 376 394
Advisory fee to affiliates   850     866     881  
Total operating expenses   1,317     1,285     1,325  
Operating loss (1,317 ) (1,285 ) (1,325 )
 
Other income (expense):
Interest income from affiliates 4,447 4,292 4,661
Mortgage and loan interest (1,211 ) (1,116 ) (1,679 )
Earnings from unconsolidated subsidiaries and investees (52 ) (3 ) 18
Net income fee to Advisor   (54 )   (99 )   (115 )
Total other income   3,130     3,074     2,885  
Income before gain on land sales, non-controlling interest, and taxes   1,813     1,789     1,560  
Income from continuing operations before tax 1,813 1,789 1,560
Income tax benefit (expense)   (821 )   48     (546 )
Net income from continuing operations   992     1,837     1,014  
Discontinued operations:
Income from discontinued operations (1,444 ) 1 (145 )
Gain on sale of real estate from discontinued operations 947 - -
Income tax expense from discontinued operations   174     -     51  
Net income from discontinued operations   (323 )   1     (94 )
Net income   669     1,838     920  
 
Earnings per share - basic
Income from continuing operations $ 0.24 $ 0.44 $ 0.24
Discontinued operations   (0.08 )   -     (0.02 )
Net income applicable to common shares $ 0.16   $ 0.44   $ 0.22  
 
Earnings per share - diluted
Income from continuing operations $ 0.24 $ 0.44 $ 0.24
Discontinued operations   (0.08 )   -     (0.02 )
Net income applicable to common shares $ 0.16   $ 0.44   $ 0.22  
 
Weighted average common share used in computing earnings per share 4,168,214 4,168,214 4,168,214
Weighted average common share used in computing diluted earnings per share 4,168,214 4,168,214 4,168,214

Copyright Business Wire 2010

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