American Realty Investors (ARL) 10-Q15 May 142014 Q1 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
Document and Entity Information	Mar. 31, 2014	5-May-14
Document and Entity Information	'	'
Entity Registrant Name	'AMERICAN REALTY INVESTORS INC	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Entity Central Index Key	'0001102238	'
Current Fiscal Year End Date	'--12-31	'
Entity Common Stock, Shares Outstanding	'	11,525,389
Entity Filer Category	'Smaller Reporting Company	'
Entity Current Reporting Status	'Yes	'
Entity Voluntary Filers	'No	'
Entity Well-known Seasoned Issuer	'No	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'

CONSOLIDATED_BALANCE_SHEETS_un

CONSOLIDATED BALANCE SHEETS (unaudited) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Assets {1}	'	'
Real estate, at cost	$770,960	$799,698
Real estate held for sale at cost, net of depreciation ($27,282 for 2014 and $2,390 for 2013)	9,787	16,427
Real estate subject to sales contracts at cost, net of depreciation ($2,036 for 2014 and $1,949 for 2013)	23,335	27,598
Less accumulated depreciation	-120,468	-143,429
Total real estate	683,614	700,294
Notes and interest receivable	'	'
Performing (including $138,086 in 2014 and $145,754 in 2013 from related parties)	145,670	153,275
Non-performing	3,129	3,140
Less allowance for doubtful accounts (including $15,809 in 2014 and 2013 from related parties)	-19,579	-19,600
Total notes and interest receivable	129,220	136,815
Cash and cash equivalents	18,384	16,437
Restricted cash	27,736	32,929
Investments in unconsolidated subsidiaries and investees	3,990	3,789
Receivable from related party	34,751	14,086
Other assets	42,461	38,972
Total assets	940,156	943,322
Liabilities:	'	'
Notes and interest payable	629,364	618,930
Notes related to assets held for sale	15,717	17,100
Notes related to subject to sales contracts	20,991	23,012
Deferred revenue (including $74,303 in 2014 and 2013 from sales to related parties)	76,148	76,148
Accounts payable and other liabilities (including $15,954 in 2014 and $15,394 in 2013 to related parties)	59,400	73,271
Total Liabilities	801,620	808,461
Shareholders' equity:	'	'
Preferred stock, Series A: $2.00 par value, authorized 15,000,000 shares, issued and outstanding 3,353,954 shares in 2014 and 2013 (liquidation preference $10 per share), including 900,000 shares in 2014 and 2013 held by subsidiaries. Series K: $2.00 par value, authorized, issued and outstanding 135,000 shares in 2014 and 2013, respectively (liquidation preference $22 per share)	4,908	4,908
Common stock, $0.01 par value, authorized 100,000,000 shares; issued 11,941,174 shares and outstanding 11,525,389 shares in 2014 and 2013	115	115
Treasury stock at cost; 415,785 shares in 2014 and 2013 and 229,214 shares held by TCI (consolidated) as of 2014 and 2013	-6,395	-6,395
Paid-in capital	102,280	102,974
Retained earnings	-8,245	-11,795
Total American Realty Investors, Inc. shareholders' equity	92,663	89,807
Non-controlling interest	45,873	45,054
Total equity	138,536	134,861
Total liabilities and equity	$940,156	$943,322

CONSOLIDATED_BALANCE_SHEETS_PA

CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $)	Mar. 31, 2014	Dec. 31, 2013
PARENTHETICALS	'	'
Depreciation of Real Estate held for sale at cost	$27,282	$2,390
Depreciation of Real Estate subject to sales contracts at cost	2,036	1,949
Performing from related parties	138,086	145,754
Non-performing allowance for doubtful accounts	15,809	15,809
Deferred Gain from sales to related parties	74,303	74,303
Accounts payable and other liabilities to related parties	$15,954	$15,394
Preferred stock Series A, par value	$2	$2
Preferred stock Series A, shares authorized	15,000,000	15,000,000
Preferred stock Series A, shares issued	3,353,954	3,353,954
Preferred stock Series A, shares outstanding	3,353,954	3,353,954
Preferred stock Series A, liquidation preference per share	$10	$10
Preferred stock Series A, liquidation preference shares	900,000	900,000
Preferred stock Series K, par value	$2	$2
Preferred stock Series K, shares issued	135,000	135,000
Preferred stock Series K, shares outstanding	135,000	135,000
Preferred stock Series K, liquidation preference per share	$22	$22
Common stock, par value	$0.01	$0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	11,941,174	11,525,389
Common stock, shares outstanding	11,941,174	11,525,389
Treasury stock, shares	415,785	415,785
Shares held by TCI	229,214	229,214

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (USD $)	3 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Revenues {1}	'	'
Rental and other property revenues (including $175 and $165 for the three months ended 2014 and 2013, respectively, from related parties)	$20,583	$20,350
Expenses:	'	'
Property operating expenses (including $156 and $204 for the three months ended 2014 and 2013, respectively, from related parties)	10,317	9,982
Depreciation and amortization	4,476	3,755
General and administrative (including $918 and $890 for the three months ended 2014 and 2013, respectively, from related parties)	1,994	2,012
Provision on impairment of notes receivable and real estate assets	0	0
Net income fee to related party	490	56
Advisory fee to related party	2,242	2,554
Total operating expenses	19,519	18,359
Operating income	1,064	1,991
Other income (expenses):	'	'
Interest income (including $3,797 and $3,410 for the three months 2014 and 2013, respectively, from related parties)	4,117	3,541
Other income	178	2,536
Mortgage and loan interest (including $798 and $910 for the three months ended 2014 and 2013, respectively, from related parties)	-8,474	-9,444
Deferred borrowing costs amortization	-939	-2,461
Loan charges and prepayment penalties	-1,582	-3,937
Gain (loss) on sale of investments	0	-8
Earnings from unconsolidated subsidiaries and investees	70	213
Litigation settlement	3,839	-45
Total other expenses	-2,791	-9,605
Loss before gain on land sales, non-controlling interest, and taxes	-1,727	-7,614
Gain (loss) on land sales	753	-35
Net loss from continuing operations before taxes	-974	-7,649
Income tax benefit	1,870	2,673
Net income (loss) from continuing operations	896	-4,976
Discontinued operations:	'	'
Net income (loss) from discontinued operations	-710	411
Gain on sale of real estate from discontinued operations	6,053	7,227
Income tax expense from discontinued operations	-1,870	-2,673
Net income from discontinued operations	3,473	4,965
Net income (loss)	4,369	-11
Net (income) loss attributable to non-controlling interest	-819	385
Net income attributable to American Realty Investors, Inc.	3,550	374
Preferred dividend requirement	-613	-613
Net income (loss) applicable to common shares	2,937	-239
Earnings per share - basic	'	'
Net loss from continuing operations	($0.05)	($0.45)
Net income from discontinued operations	$0.30	$0.43
Net income (loss) applicable to common shares	$0.25	($0.02)
Earnings per share - diluted	'	'
Net loss from continuing operations	($0.05)	($0.45)
Net income from discontinued operations	$0.30	$0.43
Net income (loss) applicable to common shares	$0.25	($0.02)
Weighted average common shares used in computing earnings per share	11,525,389	11,525,389
Weighted average common shares used in computing diluted earnings per share	11,525,389	11,525,389
Amounts attributable to American Realty Investors, Inc.	'	'
Net income (loss) from continuing operations	77	-4,591
Net income from discontinued operations	3,473	4,965
Net income applicable to American Realty Investors, Inc.	$3,550	$374

CONSOLIDATED_STATEMENTS_OF_OPE1

CONSOLIDATED STATEMENTS OF OPERATIONS PARENTHETICALS (unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
OPERATIONS PARENTHETICALS	'	'
Rental and other property revenues, affiliates and related parties	$175	$165
Property operating expenses, affiliates and related parties	156	204
General and administrative expenses, affiliates and related parties	918	890
Interest income from affiliates and related parties	3,797	3,410
Mortgage and loan interest, affiliates and related parties	$798	$910

CONSOLIDATED_STATEMENTS_OF_SHA

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)	Total Equity	Comprehensive Income (Loss)	Preferred Stock	Common Stock Shares	Common Stock Amount	Treasury Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non - controlling Interest
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)	USD ($)	USD ($)	USD ($)	Common Stock Shares	USD ($)	USD ($)	USD ($)	USD ($)	USD ($)	USD ($)
Balance at Dec. 31, 2013	134,861	-93,213	4,908	11,941,174	115	-6,395	102,974	-11,795	0	45,054
Net income	$4,369	$4,369	$0	'	$0	$0	$0	$3,550	$0	$819
Sale of non-controlling interests	-81	0	0	'	0	0	-81	0	0	0
Series A preferred stock dividend ($1.00 per share)	($613)	$0	$0	'	$0	$0	($613)	$0	$0	$0
Balance at Mar. 31, 2014	138,536	-88,844	4,908	11,941,174	115	-6,395	102,280	-8,245	0	45,873

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
COMPREHENSIVE INCOME (LOSS) DURING	'	'
Net income (loss)	$4,369	($11)
Other comprehensive income (loss)	0	0
Total comprehensive income (loss)	4,369	-11
Comprehensive (income) loss attributable to non-controlling interest	-819	385
Comprehensive income attributable to American Realty Investors, Inc.	$3,550	$374

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $)	3 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Cash flows operating activities:	'	'
Net income (loss)	$4,369	($11)
Adjustments to reconcile net income (loss) applicable to common shares to net cash flow from operating activities:	'	'
(Gain) loss on sale of land	-753	35
Gain on sale of income-producing properties	-6,053	-7,227
Depreciation and amortization	4,642	5,189
Amortization of deferred borrowing costs	1,220	2,479
Earnings from unconsolidated subsidiaries and investees	-70	-213
Decrease (increase) in assets:	'	'
Accrued interest receivable	12,044	1,917
Other assets	-38	-857
Prepaid expense	-768	-580
Escrow	4,585	11,487
Earnest money	535	375
Rent receivables	-220	726
Decrease in liabilities:	'	'
Accrued interest payable	-214	115
Payable to related parties	-20,665	-9,028
Other liabilities	-13,801	-14,334
Net cash used in operating activities	-15,187	-9,927
Cash Flow From Investing Activities:	'	'
Origination or advances of notes receivable	-4,428	-145
Acquisition of land held for development	-3,425	0
Proceeds from sale of income-producing properties	22,480	24,267
Proceeds from sale of land	1,504	2,550
Investment in unconsolidated real estate entities	-131	-1,708
Improvement of land held for development	-115	-71
Improvement of income-producing properties	-1,162	-964
Acquisition of non-controlling interest	0	-81
Construction and development of new properties	-205	-115
Net cash provided by investing activities	14,518	23,733
Cash Flow From Financing Activities:	'	'
Proceeds from notes payable	65,212	78,345
Recurring amortization of principal on notes payable	-4,874	-4,557
Payments on maturing notes payable	-52,907	-94,725
Stock-secured borrowings	-187	-411
Deferred financing costs	-3,934	-1,581
Distributions to non-controlling interests	-81	0
Preferred stock dividends - Series A	-613	-613
Net cash provided by (used in) financing activities	2,616	-23,542
Net increase (decrease) in cash and cash equivalents	1,947	-9,736
Cash and cash equivalents, beginning of period	16,437	13,399
Cash and cash equivalents, end of period	18,384	3,663
Supplemental disclosures of cash flow information:	'	'
Cash paid for interest	$8,784	$11,173

ORGANIZATION_AND_BASIS_OF_PRES

ORGANIZATION AND BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2014
ORGANIZATION AND BASIS OF PRESENTATION	'
ORGANIZATION AND BASIS OF PRESENTATION	'
	NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

	Organization

	As used herein, the terms “ARL”, “the Company”, “we”, “our” or “us” refer to American Realty Investors, Inc., a Nevada corporation, which was formed in November 1999. In August 2000, the Company acquired American Realty Trust, Inc. (“ART”), a Georgia corporation and National Realty, L.P. (“NRLP”), a Delaware partnership.

	The Company is headquartered in Dallas, Texas and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol (“ARL”). Approximately 87.4% of ARL’s stock is owned by related parties. Subsidiaries of ARL own approximately 83.8% of the outstanding shares of common stock of Transcontinental Realty Investors, Inc. (“TCI”), a Nevada corporation, which has its common stock listed and traded on the New York Stock Exchange (“NYSE”) under the symbol (“TCI”). ARL is a “C” corporation for U.S. federal income tax purposes and has consolidated TCI’s accounts and operations since March 2003. During the third quarter 2012, Realty Advisors Management, Inc. and its subsidiaries acquired more than 80% of ARL stock and as a result, ARL joined the Realty Advisors Management, Inc. consolidated group for federal income tax reporting. We have no employees.

	TCI, a subsidiary of ARL, owns approximately 81.1% of the common stock of Income Opportunity Realty Investors, Inc. (“IOT”). Effective July 17, 2009, IOT’s financial results were consolidated with those of ARL and TCI and their subsidiaries. Shares of IOT are traded on the NYSE MKT under the symbol (“IOT”).

	ARL invests in real estate through direct ownership, leases and partnerships and also invests in mortgage loans on real estate. Pillar Income Asset Management, Inc. (“Pillar”) is the Company’s external Advisor and Cash Manager. Although the Board of Directors is directly responsible for managing the affairs of ARL, and for setting the policies which guide it, the day-to-day operations of ARL are performed by Pillar, as the contractual Advisor, under the supervision of the Board. Pillar’s duties include, but are not limited to, locating, evaluating and recommending real estate and real estate-related investment opportunities and arranging debt and equity financing for the Company with third party lenders and investors. Additionally, Pillar serves as a consultant to the Board with regard to their decisions in connection with ARL’s business plan and investment policy. Pillar also serves as an Advisor and Cash Manager to TCI and IOT.

	Regis Realty Prime, LLC (“Regis”) manages our commercial properties and provides brokerage services. ARL engages third-party companies to lease and manage its apartment properties. TCI also has a development agreement with Unified Housing Foundation, Inc. (“UHF”) a non-profit corporation that provides management services for the development of residential apartment projects in the future. This development agreement was terminated December 31, 2013.

	Properties

	We own or had interests in a total property portfolio of 46 income-producing properties as of March 31, 2014. The properties consisted of:

		•	10 commercial properties consisting of six office buildings, one industrial warehouse, and three retail centers comprising in aggregate approximately 2.6 million rentable square feet;

		•	36 apartment communities totaling 6,166 units, excluding apartments being developed; and

		•	4,209 acres of developed and undeveloped land.

	We join with various third-party development companies to construct residential apartment communities. We are in the predevelopment process on several residential apartment communities but have not yet begun construction. At March 31, 2014, we had no apartment projects in development. The third-party developer typically holds a general partner as well as a majority limited partner interest in a limited partnership formed for the purpose of building a single property while we generally take a minority limited partner interest in the limited partnership. We may contribute land to the partnership as part of our equity contribution or we may contribute the necessary funds to the partnership to acquire the land. We are required to fund all required equity contributions while the third-party developer is responsible for obtaining construction financing, hiring a general contractor and for the overall management, successful completion and delivery of the project. We generally bear all the economic risks and rewards of ownership in these partnerships and therefore include these partnerships in our consolidated financial statements. The third-party developer is paid a developer fee typically equal to a percentage of the construction costs. When the project reaches stabilized occupancy, we acquire the third-party developer’s partnership interests in exchange for any remaining unpaid developer fees.

	Basis of Presentation

	The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

	The year-end Consolidated Balance Sheet at December 31, 2013 was derived from the audited financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Certain 2013 financial statement amounts have been reclassified to conform to the 2014 presentation, including adjustments for discontinued operations.

	Principles of Consolidation

	The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (“VIE”), in accordance with the provisions and guidance of ASC Topic 810, “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary generally is the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation.

	In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions.

	For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in Gruppa Florentina, LLC is accounted for under the equity method.

	Real Estate, Depreciation and Impairment

	Real estate assets are stated at the lower of depreciated cost or fair value, if deemed impaired. Major replacements and betterments are capitalized and depreciated over their estimated useful lives. Depreciation is computed on a straight-line basis over the useful lives of the properties (buildings and improvements – 10-40 years; furniture, fixtures and equipment – 5-10 years). The Company continually evaluates the recoverability of the carrying value of its real estate assets using the methodology prescribed in ASC Topic 360, “Property, Plant and Equipment”. Factors considered by management in evaluating impairment of its existing real estate assets held for investment include significant declines in property operating profits, annually recurring property operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. Under ASC Topic 360, a real estate asset held for investment is not considered impaired if the undiscounted, estimated future cash flows of an asset (both the annual estimated cash flow from future operations and the estimated cash flow from the theoretical sale of the asset) over its estimated holding period are in excess of the asset’s net book value at the balance sheet date. If any real estate asset held for investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its estimated fair value.

	Real Estate Held For Sale

	We periodically classify real estate assets as “held for sale”. An asset is classified as held for sale after the approval of our Board of Directors, after an active program to sell the asset has commenced and if the sale is probable. One of the deciding factors in determining whether a sale is probable is whether the firm purchase commitment is obtained and whether the sale is probable within the year. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its estimated fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Real estate assets held for sale are stated separately on the accompanying Consolidated Balance Sheets. Upon a decision that the sale is no longer probable, the asset is classified as an operating asset and depreciation expense is reinstated. The operating results of real estate assets held for sale and sold are reported as discontinued operations in the accompanying Consolidated Statements of Operations. Income from discontinued operations includes the revenues and expenses, including depreciation and interest expense, associated with the assets. This classification of operating results as discontinued operations applies retroactively for all periods presented. Additionally, gains and losses on assets designated as held for sale are classified as part of discontinued operations.

	Cost Capitalization

	Costs related to planning, developing, leasing and constructing a property are capitalized and classified as Real Estate in the Consolidated Balance Sheets. We capitalize interest to qualifying assets under development based on average accumulated expenditures outstanding during the period. In capitalizing interest to qualifying assets, we first use the interest incurred on specific project debt, if any, and next use the weighted average interest rate of non-project specific debt. We capitalize interest, real estate taxes and certain operating expenses until building construction is substantially complete and the building is ready for its intended use, but no later than one year from the cessation of major construction activity.

	We capitalize leasing costs which include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement and any internal costs that may be applicable. We allocate these costs to individual tenant leases and amortize them over the related lease term.

	Fair Value Measurement

	We apply the guidance in ASC Topic 820, “Fair Value Measurements and Disclosures”, to the valuation of real estate assets. These provisions define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date, establish a hierarchy that prioritizes the information used in developing fair value estimates and require disclosure of fair value measurements by level within the fair value hierarchy. The hierarchy gives the highest priority to quoted prices in active markets (Level 1 measurements) and the lowest priority to unobservable data (Level 3 measurements), such as the reporting entity’s own data.

	The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and includes three levels defined as follows:

		Level 1 –	Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets.
		Level 2 –	Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
		Level 3 –	Unobservable inputs that are significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Related Parties

We apply ASC Topic 805, “Business Combinations”, to evaluate business relationships. Related parties are persons or entities who have one or more of the following characteristics, which include entities for which investments in their equity securities would be required, trust for the benefit of persons including principal owners of the entities and members of their immediate families, management personnel of the entity and members of their immediate families and other parties with which the entity may deal if one party controls or can significantly influence the decision making of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests, or affiliates of the entity.

Newly Issued Accounting Standards

We have considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our Consolidated Financial Statements, including that which we have not yet adopted. We do not believe that any such guidance will have a material effect on our financial position or results of operations.

REAL_ESTATE_ACTIVITY

REAL ESTATE ACTIVITY	3 Months Ended
	Mar. 31, 2014
REAL ESTATE ACTIVITY	'
REAL ESTATE ACTIVITY	'
	NOTE 2. REAL ESTATE ACTIVITY

	Below is a summary of the real estate owned as of March 31, 2014 (dollars in thousands):

	Apartments	$	436,109
	Commercial properties		178,579
	Land held for development		156,272
	Real estate held for sale		37,069
	Real estate subject to sales contract		25,371
	Total real estate	$	833,400
	Less accumulated depreciation		(149,786	)
	Total real estate, net of depreciation	$	683,614

	The highlights of our significant real estate transactions for the three months ended March 31, 2014 are listed below:

	On February 6, 2014, TCI sold a 232-unit apartment complex known as Pecan Pointe located in Temple, Texas for a sales price of $23.1 million to an independent third party. The buyer assumed the existing debt of $16.5 million secured by the property. A gain of $6.1 million was recorded on the sale.

	On March 26, 2014, TCI sold 6.314 acres of land known as McKinney Ranch land located in McKinney, Texas to an independent third party, for a sales price of $1.7 million. We paid $1.5 million on the existing mortgage to satisfy a portion of the multi-tract collateral debt of $6.6 million, secured by various land parcels located in McKinney, Texas. A gain of $0.8 million was recorded on the land parcel sale.

	On March 31, 2014, the Company purchased 16.87 acres of land known as Valwood Acres located in Farmers Branch, Texas from an independent third party for a purchase price of $3.2 million.

	In December 2010, various commercial and land holdings were sold to FRE Real Estate, Inc., a related party. During the first three months of 2011, many of these transactions were rescinded as of the original transaction date and were subsequently sold to related parties under the same ownership as FRE Real Estate, Inc. As of March 31, 2014, one commercial building, Thermalloy, remains in FRE Real Estate, Inc. The Company did not recognize or record the sale in accordance with ASC 360-20 due to TCI’s continuing involvement, which included the potential payment of cash shortfalls, future obligations under the existing mortgage and guaranty, the buyer’s inadequate initial investment and the Company’s questionable recovery of investment cost. The Company determined that no sale had occurred for financial reporting purposes and therefore the asset remained on the books and continued to record operating expenses and depreciation as a period cost until a sale occurred that met the requirements of ASC 360-20.

	The properties that we have sold to a related party and have deferred the recognition of the sale are treated as “subject to sales contract” on the Consolidated Balance Sheets. These properties were sold to a related party in order to help facilitate an appropriate debt or organizational restructure and may or may not be transferred back to the seller upon resolution. These properties have mortgages that are secured by the property and many have corporate guarantees. According to the loan documents, the maker is currently in default on these mortgages primarily due to lack of payment and is actively involved in discussions with every lender in order to settle or cure the default situation. We have reviewed each asset and taken impairment to the extent we feel the value of the property was less than our current basis.

	As of March 31, 2014, there remains one apartment complex, one commercial building and 151 acres of land that TCI has sold to a related party and has deferred the recognition of the sale. These are treated as “subject to sales contract” on the Consolidated Balance Sheets. These properties were sold to a related party in order to help facilitate an appropriate debt or organizational restructure and may or may not be transferred back to the seller upon resolution. These properties have mortgages that are secured by the property and many have corporate guarantees. According to the loan documents, the maker is currently in default on these mortgages primarily due to lack of payment and is actively involved in discussions with every lender in order to settle or cure the default situation. TCI has reviewed each asset and taken impairment to the extent it feels the value of the property was less than its current basis. TCI did not recognize or record the sale in accordance with ASC 360-20 due to our continuing involvement, which included the potential payment of cash shortfalls, future obligations under the existing mortgage and guaranty, the buyer’s inadequate initial investment and TCI’s questionable recovery of investment cost. TCI determined that no sale had occurred for financial reporting purposes and therefore the asset remained on the books and continued to record operating expenses and depreciation as a period cost until a sale occurred that met the requirements of ASC 360-20. The buyers received no compensation for the facilitation of the bankruptcy or debt restructuring process.

	We continue to invest in the development of apartment projects. During the three months ended March 31, 2014, we have expended $0.2 million related to the construction or predevelopment of various apartment complexes.

NOTES_AND_INTEREST_RECEIVABLE

NOTES AND INTEREST RECEIVABLE

3 Months Ended

Mar. 31, 2014

NOTES AND INTEREST RECEIVABLE

NOTE 3. NOTES AND INTEREST RECEIVABLE

A portion of our assets are invested in mortgage notes receivable, principally secured by real estate. We may originate mortgage loans in conjunction with providing purchase money financing of property sales. Notes receivable are generally collateralized by real estate or interests in real estate and personal guarantees of the borrower and, unless noted otherwise, are so secured. Management intends to service and hold for investment the mortgage notes in our portfolio. A majority of the notes receivable provide for principal to be paid at maturity. Our mortgage notes receivable consist of first, wraparound and junior mortgage loans (dollars in thousands):

Maturity

Interest

Borrower

Date

Rate

Amount

Security

Performing loans:

Miscellaneous non-related party notes

Various

$ 3,297

Various secured interests

Miscellaneous related party notes (1)

Various

3,441

Various secured interests

One Realco Corporation (1) (2)

17-Jan

3.00%

7,000

Unsecured

Realty Advisors Management, Inc. (1)

16-Dec

2.20%

20,387

Unsecured

S Breeze I-V, LLC

14-Jun

5.00%

3,238

6% Class A and 25% Class B Limited Partner Interests

Woodhaven-Hawthorn, Inc. (1)

19-Oct

5.50%

1,028

Unsecured

Unified Housing Foundation, Inc. (Cliffs of El Dorado) (1)

Dec-32

12.00%

2,097

100% Membership Interest in Unified Housing of McKinney, LLC

Unified Housing Foundation, Inc. (Echo Station) (1)

Dec-32

12.00%

1,481

100% Membership Interest in Unified Housing of Temple, LLC

Unified Housing Foundation, Inc. (Inwood on the Park) (1)

Dec-32

12.00%

5,059

100% Membership Interest in Unified Housing Inwood, LLC

Unified Housing Foundation, Inc. (Kensington Park) (1)

Dec-32

12.00%

3,936

100% Membership Interest in Unified Housing Kensington, LLC

Unified Housing Foundation, Inc. (Lakeshore Villas) (1)

Dec-32

12.00%

2,000

Unsecured

Unified Housing Foundation, Inc. (Lakeshore Villas) (1)

Dec-32

12.00%

9,096

Membership interest in Housing for Seniors of Humble, LLC

Unified Housing Foundation, Inc. (Limestone Canyon) (1)

Dec-32

12.00%

3,057

100% Membership Interest in Unified Housing of Austin, LLC

Unified Housing Foundation, Inc. (Limestone Canyon) (1)

Dec-32

12.00%

4,663

100% Membership Interest in Unified Housing of Austin, LLC

Unified Housing Foundation, Inc. (Limestone Ranch) (1)

Dec-32

12.00%

2,250

100% Membership Interest in Unified Housing of Vista Ridge, LLC

Unified Housing Foundation, Inc. (Limestone Ranch) (1)

Dec-32

12.00%

6,000

100% Membership Interest in Unified Housing of Vista Ridge, LLC

Unified Housing Foundation, Inc. (Parkside Crossing) (1)

Dec-32

12.00%

2,272

100% Membership Interest in Unified Housing of Parkside Crossing, LLC

Unified Housing Foundation, Inc. (Sendero Ridge) (1)

Dec-32

12.00%

5,174

100% Membership Interest in Unified Housing of Sendero Ridge, LLC

Unified Housing Foundation, Inc. (Sendero Ridge) (1)

Dec-32

12.00%

4,812

100% Membership Interest in Unified Housing of Sendero Ridge, LLC

Unified Housing Foundation, Inc. (Timbers at the Park) (1)

Dec-32

12.00%

1,323

100% Membership Interest in Unified Housing of Terrell, LLC

Unified Housing Foundation, Inc. (Tivoli) (1)

Dec-32

12.00%

7,966

100% Membership Interest in Unified Housing of Tivoli, LLC

Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1)

Dec-32

12.00%

2,485

100% Membership Interest in Unified Housing of Harvest Hill I, LLC

Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1)

Dec-32

12.00%

2,555

100% Membership Interest in Unified Housing of Harvest Hill, LLC

Unified Housing Foundation, Inc. (Trails at White Rock) (1)

Dec-32

12.00%

3,815

100% Membership Interest in Unified Housing of Harvest Hill III, LLC

Unified Housing Foundation, Inc. (1)

13-Dec

5.00%

6,000

Unsecured

Unified Housing Foundation, Inc. (1)

15-Dec

12.00%

17,928

Unsecured

Unified Housing Foundation, Inc. (1)

16-Dec

12.00%

3,657

Unsecured

Foundation for Better Housing, Inc. (Preserve at Pecan Pointe) (1)

19-Mar

12.00%

1,810

Unsecured

Foundation for Better Housing, Inc. (Preserve at Pecan Pointe) (1)

17-Mar

12.00%

1,156

Unsecured

Accrued interest

6,687

Total Performing

$ 145,670

Non-Performing loans:

Leman Development, Ltd (2)

11-Jul

7.00%

1,500

Unsecured

Tracy Suttles (2)

11-Dec

0.00%

1,077

Unsecured

Miscellaneous non-related party notes

Various

507

Various secured interests

Accrued interest

Total Non-Performing

$ 3,129

Allowance for doubtful accounts

(19,579)

Total

$ 129,220

(1) Related party notes

(2) An allowance was taken for estimated losses at full value of note

At March 31, 2014, we had junior mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $122.3 million. We recognized interest income of $3.1 million related to these notes receivables.

The Company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”). UHF is determined to be a related party to the Company due to our significant investment in the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow of operations. Sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes. These notes are cross-collateralized but to the extent cash is received from a specific UHF property, it is applied against any outstanding interest for the related-property note. The allowance on the UHF notes was a purchase allowance that was netted against the notes when acquired.

On March 31, 2014, TCI received $4.0 million of notes and accrued interest receivable from Foundation for Better Housing, Inc. (“FBH”). The notes accrue interest at 12%. Of these receivables, $0.8 million will mature in December 2015, $1.4 million in March 2017 and $1.8 million in March 2019.

INVESTMENT_IN_UNCONSOLIDATED_I

INVESTMENT IN UNCONSOLIDATED INVESTEES	3 Months Ended
INVESTMENT IN UNCONSOLIDATED INVESTEES	Mar. 31, 2014
INVESTMENT IN UNCONSOLIDATED INVESTEES	'
INVESTMENT IN UNCONSOLIDATED INVESTEES	'
	NOTE 4. INVESTMENT IN UNCONSOLIDATED INVESTEES

	Investments in unconsolidated investees in which we have a 20% to 50% interest or otherwise exercise significant influence are carried at cost and adjusted for the Company’s proportionate share of their undistributed earnings or losses under the equity method of accounting.

	Investments in unconsolidated investees consist of the following:

		Percentage ownership as of
		31-Mar-14			31-Mar-13
	Gruppa Florentina, LLC		20	%		20	%


	Gruppa Florentina, LLC is the sole member of Milano Restaurants International Corporation, (“Milano”) which operates 35 pizza parlors under the trade name “Me-N-Ed’s Pizza Parlors” located primarily in Central and Northern California. Milano has a 100% ownership interest in SienaCorp, which operates two grills under the trade names “Me-N-Ed’s Victory Grill” and “Me-N-Ed’s Coney Island Grill”. Milano has a 100% ownership interest in Piazza del Pane, Inc., which operates two restaurants located in Central California. Milano also has 23 franchised locations, including two operating, under the trade name Angelo & Vito’s Pizzerias.

	The following is a summary of the financial position and results of operations from our investees (dollars in thousands):

	As of March 31,	2014			2013
	Real estate, net of accumulated depreciation	$	10,518		$	11,313
	Notes receivable		6,730			6,170
	Other assets		31,026			30,786
	Notes payable		(10,473	)		(12,429	)
	Other liabilities		(7,402	)		(6,835	)
	Shareholders' equity		(30,399	)		(29,005	)

	For the Three Months Ended March 31,		2014			2013
	Revenue	$	11,626		$	11,141
	Depreciation		(288	)		(294	)
	Operating expenses		(10,669	)		(10,139	)
	Interest expense		(227	)		(270	)
	Income from continuing operations		442			438
	Income from discontinued operations		-			-
	Net income	$	442		$	438

	Company's proportionate share of earnings (1)	$	88		$	88

	(1) Earnings represents continued and discontinued operations

NOTES_PAYABLE

NOTES PAYABLE	3 Months Ended
NOTES PAYABLE	Mar. 31, 2014
NOTES PAYABLE	'
NOTES PAYABLE	'
	NOTE 5. NOTES PAYABLE

	Below is a summary of our notes and interest payable as of March 31, 2014 (dollars in thousands):

		Notes Payable		Accrued Interest		Total Debt
	Apartments	$	367,395	$	1,233	$	368,628
	Commercial		102,594		285		102,879
	Land		90,621		117		90,738
	Real estate held for sale		15,717		-		15,717
	Real estate subject to sales contract		19,453		1,538		20,991
	Other		67,087		32		67,119

	Total	$	662,867	$	3,205	$	666,072

	With respect to the additional notes payable due to the acquisition of properties or refinancing of existing mortgages, a summary of some of the more significant transactions is discussed below:

	On February 10, 2014, a subsidiary of the Company paid off an existing margin loan and entered into a $4 million promissory note with a third party, secured by TCI stock. The note matures on February 10, 2016 and has an interest rate of 6%.

	On February 12, 2014, TCI exercised the first prepayment option on the settlement relating to the Amoco Building and paid $1.2 million to settle all obligations. The remaining balance of the note in the amount of $3.5 million, along with accrued interest, was forgiven. The 135,000 shares of Series K Convertible Preferred Stock of ARL that was pledged to the lender has been released to TCI.

	On February 14, 2014, the Company entered into a settlement and loan modification agreement with the lender regarding EQK Portage land. The new loan is for $1.6 million, matures on February 6, 2017 and has an interest rate of one-month LIBOR plus 5%. The Company paid $200,000 at close which was used to adjust the current outstanding loan balance to the newly stated loan balance and the remainder was used to pay down interest that had been accruing under the prior agreement. The rest of the unpaid interest that accrued under the prior agreement was waived. Per the agreement, the Company was also required to pay off the property tax note of $257,000.

	On February 28, 2014, TCI refinanced the existing mortgage on Parc at Denham Springs apartments, a 224-unit complex located in Denham Springs, LA, for a new mortgage of $19.2 million. TCI paid off the existing mortgage of $19.2 million and $1.6 million in closing costs. The note accrues interest at 3.75% and payments of interest and principal are due monthly, maturing April 1, 2051.

	On March 25, 2014, TCI exercised its lender granted option under the settlement agreement relating to the Galleria East Center Retail / Showcase Chevrolet land which was transferred to the existing lender on February 4, 2011. TCI paid the balance of the notes along with all accrued and unpaid interest and received a reduction in price of $0.4 million.

	On March 28, 2014, TCI secured financing of $40.0 million from an independent third party. The note has a term of five years at an interest rate of 12.0%. The note is interest only for the first year with quarterly principal payments due of $500,000 starting April 1, 2015. The loan is secured by various equity interests in residential apartments.

	On March 31, 2014, TCI entered into a settlement agreement relating to the Fenton Centre building which was transferred to the existing lender on June 7, 2011. The total amount of the settlement was $7.0 million, $5.0 million was paid at the time of the settlement and the remaining $2.0 million will be paid out in equal monthly installments through November 5, 2015.

	There are various land mortgages, secured by the property, that are in the process of a modification or extension to the original note due to expiration of the loan. We are in constant contact with these lenders, working together in order to modify the terms of these loans and we anticipate a timely resolution that is similar to the existing agreement or subsequent modification.

	The properties that we have sold to a related party and have deferred the recognition of the sale are treated as “subject to sales contract” on the Consolidated Balance Sheets. These properties were sold to a related party in order to help facilitate an appropriate debt or organizational restructure and may or may not be transferred back to the seller upon resolution. These properties have mortgages that are secured by the property and many have corporate guarantees. According to the loan documents, the maker is currently in default on these mortgages primarily due to lack of payment and is actively involved in discussions with every lender in order to settle or cure the default situation. We have reviewed each asset and taken impairment to the extent we feel the value of the property was less than our current basis.

RELATED_PARTY_TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
RELATED PARTY TRANSACTIONS	Mar. 31, 2014
RELATED PARTY TRANSACTIONS	'
RELATED PARTY TRANSACTIONS	'
	NOTE 6. RELATED PARTY TRANSACTIONS

	The following table reconciles the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of March 31, 2014 (dollars in thousands):

		Pillar
	Related party receivable, December 31, 2013	$	14,086
	Cash transfers		27,227
	Advisory fees		(2,242	)
	Fees and commissions		(392	)
	Cost reimbursements		(873	)
	Interest (to) from advisor		147
	Net income fee		(490	)
	Expenses paid by Advisor		(529	)
	Financing (mortgage payments)		(2,076	)
	Sales/purchases transactions		(107	)
	Related party receivable, March 31, 2014	$	34,751

	During the ordinary course of business, we have related party transactions that include, but are not limited to, rent income, interest income, interest expense, general and administrative costs, commissions, management fees and property expenses. In addition, we have assets and liabilities that include related party amounts. The related party amounts included in assets and liabilities, and the related party revenues and expenses received/paid are shown on the face of the financial statements.

OPERATING_SEGMENTS

OPERATING SEGMENTS	3 Months Ended
OPERATING SEGMENTS	Mar. 31, 2014
OPERATING SEGMENTS	'
OPERATING SEGMENTS	'
	NOTE 7. OPERATING SEGMENTS

	Our segments are based on our method of internal reporting which classifies our operations by property type. Our property types are grouped into commercial, apartments, hotels, land and other operating segments. Significant differences among the accounting policies of the operating segments as compared to the Consolidated Financial Statements principally involve the calculation and allocation of administrative and other expenses. Management evaluates the performance of each of the operating segments and allocates resources to them based on their net operating income and cash flow.

	Items of income that are not reflected in the segments are interest, other income, gain on debt extinguishment, gain on condemnation award, equity in partnerships, and gains on sale of real estate. Expenses that are not reflected in the segments are provision for losses, advisory, net income and incentive fees, general and administrative, non-controlling interests and net loss from discontinued operations before gains on sale of real estate.

	The segment labeled as “Other” consists of revenue and operating expenses related to the notes receivable and corporate debt.

	Presented below is our reportable segments’ operating income for the three months ended March 31, 2014 and 2013, including segment assets and expenditures (dollars in thousands):

			Commercial
	For the Three Months Ended March 31, 2014		Properties				Apartments			Hotels		Land			Other			Total
	Rental and other property revenues		$	4,892			$	15,681		$	-	$	-		$	10		$	20,583
	Property operating expenses			3,205				6,796			-		311			5			10,317
	Depreciation			1,820				2,691			-		-			(35	)		4,476
	Mortgage and loan interest			1,486				4,196			-		1,050			1,742			8,474
	Deferred borrowing costs amortization			13				888			-		35			3			939
	Loan charges and prepayment penalties			9				1,573			-		-			-			1,582
	Interest income			-				-			-		-			4,117			4,117
	Gain on land sales			-				-			-		753			-			753
	Segment operating income (loss)		$	(1,641	)		$	(463	)	$	-	$	(643	)	$	2,412		$	(335	)
	Capital expenditures			1,130				-			-		85			-			1,215
	Real estate assets			130,838				375,296			-		167,692			-			673,826

	Property Sales
	Sales price		$	-			$	23,131		$	-	$	1,565		$	-		$	24,696
	Cost of sale			-				17,078			-		812			-			17,890
	Gain on sale		$	-			$	6,053		$	-	$	753		$	-		$	6,806


			Commercial
	For the Three Months Ended March 31, 2013		Properties				Apartments			Hotels		Land			Other			Total
	Rental and other property revenues		$	5,377			$	14,932		$	-	$	34		$	7		$	20,350
	Property operating expenses			3,271				6,365			-		369			(23	)		9,982
	Depreciation			1,113				2,701			-		-			(59	)		3,755
	Mortgage and loan interest			1,341				4,665			-		1,536			1,902			9,444
	Deferred borrowing costs amortizaion			22				2,342			-		61			36			2,461
	Loan charges and prepayment penalties			-				3,937			-		-			-			3,937
	Interest income			-				-			-		-			3,541			3,541
	Loss on land sales			-				-			-		(35	)		-			(35	)
	Segment operating income (loss)		$	(370	)		$	(5,078	)	$	-	$	(1,967	)	$	1,692		$	(5,723	)
	Capital expenditures			678				31			-		53			-			762
	Real estate assets			138,683				385,672			-		209,773			-			734,128

	Property Sales
	Sales price		$	-			$	25,300		$	-	$	2,250		$	-		$	27,550
	Cost of sale			-				18,073			-		2,285			-			20,358
	Gain (loss) on sale		$	-			$	7,227		$	-	$	(35	)	$	-		$	7,192

	The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations:

			For the Three Months Ended
			March 31,
			2014				2013
	Segment operating loss		$	(335	)		$	(5,723	)
	Other non-segment items of income (expense)
	General and administrative			(1,994	)			(2,012	)
	Net income fee to related party			(490	)			(56	)
	Advisory fee to related party			(2,242	)			(2,554	)
	Other income			178				2,536
	Loss on sale of investments			-				(8	)
	Earnings from unconsolidated investees			70				213
	Litigation settlement			3,839				(45	)
Income tax benefit			1,870				2,673
Net income (loss) from continuing operations		$	896			$	(4,976	)


The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets:

		March 31,
		2014				2013
Segment assets		$	673,826			$	734,128
Investments in unconsolidated investees			3,990				10,089
Notes and interest receivable			129,220				101,697
Other assets			133,120				244,505
Total assets		$	940,156			$	1,090,419

DISCONTINUED_OPERATIONS

DISCONTINUED OPERATIONS	3 Months Ended
DISCONTINUED OPERATIONS	Mar. 31, 2014
DISCONTINUED OPERATIONS	'
DISCONTINUED OPERATIONS	'
	NOTE 8. DISCONTINUED OPERATIONS

	We apply the provisions of ASC Topic 360, “Property, Plant and Equipment”. ASC Topic 360 requires that long-lived assets that are to be disposed of by sale be measured at the lesser of (1) book value or (2) fair value less cost to sell. In addition, it requires that one accounting model be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions.

	Discontinued operations relates to properties that were either sold or held for sale as of the period ended March 31, 2014. Included in discontinued operations are a total of two and 17 properties for 2014 and 2013, respectively. Properties sold in 2014 have been reclassified to discontinued operations for current and prior year reporting periods. In 2014, we sold one apartment complex (Pecan Pointe) and have one commercial property held for sale (1010 Common). In 2013, we sold 11 apartment complexes (Dorado Ranch, Huntington Ridge, Laguna Vista, Legends of El Paso, Mariposa Villas, Paramount Terrace, River Oaks, Savoy of Garland, Stonebridge at City Park, Verandas at City View and Vistas of Pinnacle Park) and four commercial properties (225 Baronne, Amoco, Ergon and Eton Square). The gain on sale of the properties is also included in discontinued operations for those years. The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands):

		For the Three Months Ended March 31,
		2014			2013
	Revenues:
	Rental and other property revenues	$	1,147		$	8,949
			1,147			8,949
	Expenses:
	Property operating expenses		928			4,457
	Depreciation		166			269
	General and administrative		164			1,432
	Total operating expenses		1,258			6,158

	Other income (expense):
	Other income		37			-
	Mortgage and loan interest		(310	)		(2,272	)
	Deferred borrowing costs amortization		(281	)		(18	)
	Loan charges and prepayment penalties		-			(45	)
	Litigation settlement		(45	)		(45	)
	Total other expenses		(599	)		(2,380	)

	Loss from discontinued operations before gain on sale of real estate and tax		(710	)		411
	Gain on sale of real estate from discontinued operations		6,053			7,227
	Income tax expense		(1,870	)		(2,673	)
	Income from discontinued operations	$	3,473		$	4,965
	Our application of ASC Topic 360 results in the presentation of the net operating results of these qualifying properties sold or held for sale during 2014 as income from discontinued operations. This does not have an impact on net income available to common shareholders and only impacts the presentation of these properties within the Consolidated Statements of Operations.

COMMITMENTS_AND_CONTINGENCIES_

COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	3 Months Ended
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	Mar. 31, 2014
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	'
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY	'
	NOTE 9. COMMITMENTS AND CONTINGENCIES AND LIQUIDITY

	LK-FOUR HICKORY, LLC

	In conjunction with its sale of Four Hickory in November 2007, the Company agreed to fund amounts to satisfy its commitment to compensate LK-Four Hickory, LLC for move-in discounts and other concessions to existing tenants at the time of sale. The Company also has various agreements with LK-Four Hickory, LLC related to the funding of projection shortfalls, which, to date, they have not had to provide any additional funding. In addition, related parties of the Company have active lease agreements with LK-Four Hickory, LLC and the Company has since guaranteed amounts related to certain of these leases.

	On December 17, 2007, both Limkwang Nevada, Inc., the majority owner of LK-Four Hickory, LLC and ARL unconditionally guaranteed the punctual payment when due, whether at stated maturity, by acceleration or hereafter, including all fees and expenses incurred by the bank on collection of a $28.0 million note payable for LK-Four Hickory, LLC which has a current outstanding balance of $23.4 million.

	The Company’s investment in LK-Four Hickory, LLC at January 17, 2012 was sold and the Company has additional reserves for estimated potential amounts it could be liable for if various related parties are not able to meet their obligations to LK-Four Hickory, LLC. The Company will continue to evaluate these potential estimates and also the likelihood of having to fund any of these and adjust their reserves accordingly.

	Liquidity. Management believes that ARL will generate excess cash flow from property operations in 2014; such excess, however, will not be sufficient to discharge all of ARL’s obligations as they became due. Management intends to sell land and income- producing real estate, refinance real estate and obtain additional borrowings primarily secured by real estate to meet its liquidity requirements.

	Partnership Buyouts. ARL is the limited partner in various partnerships related to the construction of residential properties. As permitted in the respective partnership agreements, ARL intends to purchase the interests of the general and any other limited partners in these partnerships subsequent to the completion of these projects. The amounts paid to buy out the non-affiliated partners are limited to development fees earned by the non-affiliated partners, and are set forth in the respective partnership agreements.

	Litigation. The ownership of property and provision of services to the public as tenants entails an inherent risk of liability. Although the Company and its subsidiaries are involved in various items of litigation incidental to and in the ordinary course of its business, in the opinion of management, the outcome of such litigation will not have a material adverse impact upon the Company’s financial condition, results of operation or liquidity, unless noted otherwise below.

	The Company is involved in, and vigorously defending against, a number of deficiency claims with respect to assets that have been foreclosed by various lenders. Such claims are generally against a consolidated subsidiary as the borrower or the Company as a guarantor of indebtedness or performance. Some of these proceedings may ultimately result in an unfavorable determination for the Company and/or one of its consolidated subsidiaries. While we cannot predict the final result of such proceedings, management believes that the maximum exposure to the Company and its consolidated subsidiaries, if any, will not exceed approximately $20.0 million in the aggregate and will occur, if at all, in future years.

	DISPOSED OF ENTITIES:

	ART and ART Midwest, Inc.

	While the Company and all entities in which the Company has a direct or indirect equity interest are not parties to or obligated in any way for the outcome, a formerly owned entity (American Realty Trust, Inc.) and its former subsidiary (ART Midwest, Inc.) have been engaged since 1999 in litigation with Mr. David Clapper and entities related to Mr. Clapper (collectively, the “Clapper Parties”). The matter originally involved a transaction in 1998 in which ART Midwest, Inc. was to acquire eight residential apartment complexes from the Clapper Parties. Through the years, a number of rulings, both for and against American Realty Trust, Inc. (“ART”) and ART Midwest, Inc., were issued. In October 2011, a ruling was issued under which the Clapper Parties received a judgment for approximately $74 million, including $26 million in actual damages and $48 million interest. The ruling was against ART and ART Midwest, Inc., but no other entity. During February 2014, the court of Appeals affirmed a portion of the judgment in favor of the Clapper Parties, but also ruled that a double counting of a significant portion of the damages had occurred and remanded the case back to the trial court to recalculate the damage award, as well as pre and post-judgment interest thereon. ART was also a significant owner of a partnership interest in the partnership that was awarded the initial damages in this matter.

	In 2005, ART filed suit against a major national law firm over the initial transaction. That action was initially abated while the principle case with the Clapper Parties was pending, but the abatement was recently lifted and the action against the law firm is expected to move forward. The only defendants in the litigation involving the Clapper Parties are ART and ART Midwest, Inc., which, together, had total assets and net worth, as of December 31, 2012, of approximately $10 million. In January 2012, the Company sold all of the issued and outstanding stock of ART to an unrelated party for a promissory note in the amount of $10 million. At December 31, 2012, the Company fully reserved and valued such note at zero.

	Subsequent to the sale of the ART stock in January 2012, ART instituted a Chapter 11 bankruptcy proceeding in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. In March 2014, the bankruptcy court dismissed the proceeding.

	Management of the Company believes that the Company has no liability for any ultimate judgment in the proceeding involving the Clapper Parties; however, Management of the Company has serious reservations about the current collectability of the $10 million note and, accordingly, continues to maintain a full reservation of the value of such note at zero

	Port Olpenitz

	ARL, through a foreign subsidiary, was involved in developing a maritime harbor town on the 420 acre site of the former naval base of Olpenitz in Kappeln, Germany. Disputes with the local partner related to his mismanagement of the project resulted in his being replaced as the managing partner which was followed by a filing for bankruptcy protection in Germany to completely remove him from the project. An insolvency manager was placed in control of the project in order to protect the creditors and as of December 31, 2013, had sold the vast majority of assets (almost all land) of the project. The Company no longer has any financial responsibility for the obligations of the creditors related to the project and has claims filed for loans relating to our investment in the project. Due to the questionable collectability of these loans from the proceeds of the project, the Company has written off the unreserved balance of $5.3 million in the project. As of December 13, 2013, ARL had filed two lawsuits in Germany to recover funds invested in the project. The lawsuits are against: 1) the former German partner and his company, and 2) against the law firm in Hamburg originally hired to protect ARL’s investment in the project. At this time it is unknown how much can be recovered or how successful the litigation will be.

	DYNEX CAPITAL, INC.

	On February 13, 2013, the Court of Appeals, Fifth District of Texas at Dallas (the “Fifth Court of Appeals”) rendered an opinion involving TCI in Case No. 05-04-01358-CV styled Basic Capital Management, Inc., American Realty Trust, Inc., Transcontinental Realty Investors, Inc., Continental Poydras Corp., Continental Common, Inc. and Continental Baronne, Inc. v. Dynex Commercial, Inc. and Dynex Capital, Inc. The case was on appeal from the 68th Judicial District Court of Dallas County, Texas, had previously been appealed to the Fifth Court of Appeals and further appealed to the Supreme Court of the State of Texas which had remanded the instant case back to the Fifth Court of Appeals to address certain issues. The case had its origin with Dynex Commercial making loans to Continental Poydras Corp., Continental Common, Inc. and Continental Baronne, Inc. (subsidiaries of Continental Mortgage & Equity Trust (“CMET”), an entity which merged into TCI in 1999 after the original suit was filed). Under the original loan commitment, $160,000,000 in loans were to be made to the entities. The loans were conditioned on the execution of a commitment between Dynex Commercial and Basic Capital Management, Inc. (“Basic”).

	An original trial to a jury resulted in the jury awarding significant damages to Basic for “lost opportunity,” awarding damages in “increased costs” and “lost opportunity” damages to ART and damages of $960,646.28 in “increased costs” and $11,161,520 for “lost opportunity’ damages in favor of TCI and its subsidiaries (a total of $12,122,166.28). The original Trial Court ignored the jury’s findings and entered a “Judgment Notwithstanding the Verdict” (“JNOV”) in Dynex’s favor; the Fifth Court of Appeals has now ruled that the JNOV was improper because there was sufficient evidence to support the jury’s findings. As a result, the Fifth Court of Appeals ordered the Trial Court to enter a new judgment consistent with the jury’s original findings.

	The Fifth Court of Appeals also determined that TCI was entitled to damages for “lost opportunities” relating to tenant improvements and awarded TCI an additional $252,577. Issues relating to attorneys fees were also addressed with the Fifth Court of Appeals ordering the Trial Court to “re-try” the issue of attorney’s fees to determine the amount of fees to which TCI would be entitled on a “breach of commitment” claim. In addition, as a result of the changes in amounts awarded and passage of time, the Fifth Court of Appeals also ordered the Trial Court to recalculate the correct amounts of pre and post-judgment interest owed to Appellants.

	While the fifteen year old controversy is not yet fully resolved, the Fifth Court of Appeals opinion is favorable to TCI, but TCI expects continued challenges by Dynex to the Fifth Court of Appeals opinion and any ultimate award of damages by the Trial Court.

	During the first quarter of the fiscal year covered by this Report, no proceeding previously reported was terminated.

EARNINGS_PER_SHARE

EARNINGS PER SHARE	3 Months Ended
EARNINGS PER SHARE	Mar. 31, 2014
EARNINGS PER SHARE	'
EARNINGS PER SHARE	'
	NOTE 10. EARNINGS PER SHARE

	Earnings per share (“EPS”) have been computed pursuant to the provisions of ASC Topic 260, “Earnings Per Share”. The computation of basic EPS is calculated by dividing net income available to common shareholders from continuing operations, adjusted for preferred dividends, by the weighted-average number of common shares outstanding during the period. Shares issued during the period shall be weighted for the portion of the period that they were outstanding.

	As of March 31, 2014, we have 3,353,954 shares of Series A 10.0% cumulative convertible preferred stock, which are outstanding. These shares may be converted into common stock at 90% of the average daily closing price of the common stock for the prior 20 trading days. These are considered in the computation of diluted earnings per share if the effect of applying the if-converted method is dilutive.

	Of the outstanding 3,353,954 shares of Series A 10.0% cumulative convertible preferred stock, 300,000 shares are owned by ART Edina, Inc. and 600,000 shares are owned by ART Hotel Equities, Inc., both wholly owned subsidiaries of ARL. Dividends are not paid on the shares owned by ARL subsidiaries. Realty Advisors, Inc., a related party, owns 2,451,435 shares of the outstanding shares and has accrued dividends unpaid of $14.5 million.

	We have 135,000 shares of Series K Convertible Preferred Stock, which are held by TCI. These shares may be converted into common stock at the rate of five shares of common stock to one share of preferred stock based on the daily closing price of the common stock. These are considered in the computation of diluted earnings per share if the effect of applying the “if-converted” method is dilutive.

	As of March 31, 2014, we have 1,000 shares of stock options outstanding, which will expire January 1, 2015 if not exercised. The outstanding options are considered in the computation of diluted earnings per share if the effect of applying the “treasury stock” method is dilutive.

	As of March 31, 2014, the preferred stock and the stock options were anti-dilutive and thus not included in the EPS calculation.

SUBSEQUENT_EVENTS

SUBSEQUENT EVENTS	3 Months Ended
SUBSEQUENT EVENTS	Mar. 31, 2014
SUBSEQUENT EVENTS	'
SUBSEQUENT EVENTS	'
	NOTE 11. SUBSEQUENT EVENTS

	On April 3, 2014, TCI sold 1010 Common, a 512,593 square foot commercial building, located in New Orleans, LA, for a sales price of $16.6 million. An estimated gain of $4.1 million will be recorded on the sale.

SIGNIFICANT_ACCOUNTING_POLICIE

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2014
SIGNIFICANT ACCOUNTING POLICIES	'
Organization	'
	Organization

	As used herein, the terms “ARL”, “the Company”, “we”, “our” or “us” refer to American Realty Investors, Inc., a Nevada corporation, which was formed in November 1999. In August 2000, the Company acquired American Realty Trust, Inc. (“ART”), a Georgia corporation and National Realty, L.P. (“NRLP”), a Delaware partnership.

	The Company is headquartered in Dallas, Texas and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol (“ARL”). Approximately 87.4% of ARL’s stock is owned by related parties. Subsidiaries of ARL own approximately 83.8% of the outstanding shares of common stock of Transcontinental Realty Investors, Inc. (“TCI”), a Nevada corporation, which has its common stock listed and traded on the New York Stock Exchange (“NYSE”) under the symbol (“TCI”). ARL is a “C” corporation for U.S. federal income tax purposes and has consolidated TCI’s accounts and operations since March 2003. During the third quarter 2012, Realty Advisors Management, Inc. and its subsidiaries acquired more than 80% of ARL stock and as a result, ARL joined the Realty Advisors Management, Inc. consolidated group for federal income tax reporting. We have no employees.

	TCI, a subsidiary of ARL, owns approximately 81.1% of the common stock of Income Opportunity Realty Investors, Inc. (“IOT”). Effective July 17, 2009, IOT’s financial results were consolidated with those of ARL and TCI and their subsidiaries. Shares of IOT are traded on the NYSE MKT under the symbol (“IOT”).

	ARL invests in real estate through direct ownership, leases and partnerships and also invests in mortgage loans on real estate. Pillar Income Asset Management, Inc. (“Pillar”) is the Company’s external Advisor and Cash Manager. Although the Board of Directors is directly responsible for managing the affairs of ARL, and for setting the policies which guide it, the day-to-day operations of ARL are performed by Pillar, as the contractual Advisor, under the supervision of the Board. Pillar’s duties include, but are not limited to, locating, evaluating and recommending real estate and real estate-related investment opportunities and arranging debt and equity financing for the Company with third party lenders and investors. Additionally, Pillar serves as a consultant to the Board with regard to their decisions in connection with ARL’s business plan and investment policy. Pillar also serves as an Advisor and Cash Manager to TCI and IOT.

	Regis Realty Prime, LLC (“Regis”) manages our commercial properties and provides brokerage services. ARL engages third-party companies to lease and manage its apartment properties. TCI also has a development agreement with Unified Housing Foundation, Inc. (“UHF”) a non-profit corporation that provides management services for the development of residential apartment projects in the future. This development agreement was terminated December 31, 2013.
Properties	'
	Properties

	We own or had interests in a total property portfolio of 46 income-producing properties as of March 31, 2014. The properties consisted of:

		•	10 commercial properties consisting of six office buildings, one industrial warehouse, and three retail centers comprising in aggregate approximately 2.6 million rentable square feet;

		•	36 apartment communities totaling 6,166 units, excluding apartments being developed; and

		•	4,209 acres of developed and undeveloped land.

	We join with various third-party development companies to construct residential apartment communities. We are in the predevelopment process on several residential apartment communities but have not yet begun construction. At March 31, 2014, we had no apartment projects in development. The third-party developer typically holds a general partner as well as a majority limited partner interest in a limited partnership formed for the purpose of building a single property while we generally take a minority limited partner interest in the limited partnership. We may contribute land to the partnership as part of our equity contribution or we may contribute the necessary funds to the partnership to acquire the land. We are required to fund all required equity contributions while the third-party developer is responsible for obtaining construction financing, hiring a general contractor and for the overall management, successful completion and delivery of the project. We generally bear all the economic risks and rewards of ownership in these partnerships and therefore include these partnerships in our consolidated financial statements. The third-party developer is paid a developer fee typically equal to a percentage of the construction costs. When the project reaches stabilized occupancy, we acquire the third-party developer’s partnership interests in exchange for any remaining unpaid developer fees.
Basis of Presentation	'
	Basis of Presentation

	The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being misleading. In the opinion of management, all adjustments (consisting of normal recurring matters) considered necessary for a fair presentation have been included. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

	The year-end Consolidated Balance Sheet at December 31, 2013 was derived from the audited financial statements at that date, but does not include all of the information and disclosures required by GAAP for complete financial statements. For further information, refer to the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Certain 2013 financial statement amounts have been reclassified to conform to the 2014 presentation, including adjustments for discontinued operations.
Principles of Consolidation	'
	Principles of Consolidation

	The accompanying Consolidated Financial Statements include the accounts of the Company, its subsidiaries, generally all of which are wholly-owned, and all entities in which we have a controlling interest. Arrangements that are not controlled through voting or similar rights are accounted for as a Variable Interest Entity (“VIE”), in accordance with the provisions and guidance of ASC Topic 810, “Consolidation”, whereby we have determined that we are a primary beneficiary of the VIE and meet certain criteria of a sole general partner or managing member as identified in accordance with Emerging Issues Task Force (“EITF”) Issue 04-5, Investor’s Accounting for an Investment in a Limited Partnership when the Investor is the Sole General Partner and the Limited Partners have Certain Rights (“EITF 04-5”). VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders as a group lack adequate decision making ability, the obligation to absorb expected losses or residual returns of the entity, or have voting rights that are not proportional to their economic interests. The primary beneficiary generally is the entity that provides financial support and bears a majority of the financial risks, authorizes certain capital transactions, or makes operating decisions that materially affect the entity’s financial results. All significant intercompany balances and transactions have been eliminated in consolidation.

	In determining whether we are the primary beneficiary of a VIE, we consider qualitative and quantitative factors, including, but not limited to: the amount and characteristics of our investment; the obligation or likelihood for us or other investors to provide financial support; our and the other investors’ ability to control or significantly influence key decisions for the VIE; and the similarity with and significance to the business activities of us and the other investors. Significant judgments related to these determinations include estimates about the current future fair values and performance of real estate held by these VIEs and general market conditions.

	For entities in which we have less than a controlling financial interest or entities where we are not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, our share of the net earnings or losses of these entities is included in consolidated net income. Our investment in Gruppa Florentina, LLC is accounted for under the equity method.
Real Estate, Depreciation and Impairment.	'
	Properties

	We own or had interests in a total property portfolio of 46 income-producing properties as of March 31, 2014. The properties consisted of:

		•	10 commercial properties consisting of six office buildings, one industrial warehouse, and three retail centers comprising in aggregate approximately 2.6 million rentable square feet;

		•	36 apartment communities totaling 6,166 units, excluding apartments being developed; and

		•	4,209 acres of developed and undeveloped land.

	We join with various third-party development companies to construct residential apartment communities. We are in the predevelopment process on several residential apartment communities but have not yet begun construction. At March 31, 2014, we had no apartment projects in development. The third-party developer typically holds a general partner as well as a majority limited partner interest in a limited partnership formed for the purpose of building a single property while we generally take a minority limited partner interest in the limited partnership. We may contribute land to the partnership as part of our equity contribution or we may contribute the necessary funds to the partnership to acquire the land. We are required to fund all required equity contributions while the third-party developer is responsible for obtaining construction financing, hiring a general contractor and for the overall management, successful completion and delivery of the project. We generally bear all the economic risks and rewards of ownership in these partnerships and therefore include these partnerships in our consolidated financial statements. The third-party developer is paid a developer fee typically equal to a percentage of the construction costs. When the project reaches stabilized occupancy, we acquire the third-party developer’s partnership interests in exchange for any remaining unpaid developer fees.
Real Estate Held For Sale Policy	'
	Real Estate Held For Sale

	We periodically classify real estate assets as “held for sale”. An asset is classified as held for sale after the approval of our Board of Directors, after an active program to sell the asset has commenced and if the sale is probable. One of the deciding factors in determining whether a sale is probable is whether the firm purchase commitment is obtained and whether the sale is probable within the year. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its estimated fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Real estate assets held for sale are stated separately on the accompanying Consolidated Balance Sheets. Upon a decision that the sale is no longer probable, the asset is classified as an operating asset and depreciation expense is reinstated. The operating results of real estate assets held for sale and sold are reported as discontinued operations in the accompanying Consolidated Statements of Operations. Income from discontinued operations includes the revenues and expenses, including depreciation and interest expense, associated with the assets. This classification of operating results as discontinued operations applies retroactively for all periods presented. Additionally, gains and losses on assets designated as held for sale are classified as part of discontinued operations.
Cost capitalization	'
	Cost Capitalization

	Costs related to planning, developing, leasing and constructing a property are capitalized and classified as Real Estate in the Consolidated Balance Sheets. We capitalize interest to qualifying assets under development based on average accumulated expenditures outstanding during the period. In capitalizing interest to qualifying assets, we first use the interest incurred on specific project debt, if any, and next use the weighted average interest rate of non-project specific debt. We capitalize interest, real estate taxes and certain operating expenses until building construction is substantially complete and the building is ready for its intended use, but no later than one year from the cessation of major construction activity.

	We capitalize leasing costs which include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement and any internal costs that may be applicable. We allocate these costs to individual tenant leases and amortize them over the related lease term.
Fair value measurement	'
	Fair Value Measurement

	We apply the guidance in ASC Topic 820, “Fair Value Measurements and Disclosures”, to the valuation of real estate assets. These provisions define fair value as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants at the measurement date, establish a hierarchy that prioritizes the information used in developing fair value estimates and require disclosure of fair value measurements by level within the fair value hierarchy. The hierarchy gives the highest priority to quoted prices in active markets (Level 1 measurements) and the lowest priority to unobservable data (Level 3 measurements), such as the reporting entity’s own data.

	The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and includes three levels defined as follows:

		Level 1 –	Unadjusted quoted prices for identical and unrestricted assets or liabilities in active markets.
		Level 2 –	Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
		Level 3 –	Unobservable inputs that are significant to the fair value measurement.

	A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
Related Parties Policy	'
	Related Parties

	We apply ASC Topic 805, “Business Combinations”, to evaluate business relationships. Related parties are persons or entities who have one or more of the following characteristics, which include entities for which investments in their equity securities would be required, trust for the benefit of persons including principal owners of the entities and members of their immediate families, management personnel of the entity and members of their immediate families and other parties with which the entity may deal if one party controls or can significantly influence the decision making of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests, or affiliates of the entity.
Newly Issued Accounting Standards	'
	Newly Issued Accounting Standards

	We have considered all other newly issued accounting guidance that is applicable to our operations and the preparation of our Consolidated Financial Statements, including that which we have not yet adopted. We do not believe that any such guidance will have a material effect on our financial position or results of operations.

Summary_of_the_real_estate_own

Summary of the real estate owned as of (Tables)	3 Months Ended
Summary of the real estate owned as of (Tables)	Mar. 31, 2014
Summary of the real estate owned as of	'
Summary of the real estate owned as of	'
	Below is a summary of the real estate owned as of March 31, 2014 (dollars in thousands):

	Apartments	$	436,109
	Commercial properties		178,579
	Land held for development		156,272
	Real estate held for sale		37,069
	Real estate subject to sales contract		25,371
	Total real estate	$	833,400
	Less accumulated depreciation		(149,786	)
	Total real estate, net of depreciation	$	683,614

NOTES_AND_INTEREST_RECEIVABLE_

NOTES AND INTEREST RECEIVABLE (Tables)

3 Months Ended

Mar. 31, 2014

NOTES AND INTEREST RECEIVABLE {2}

NOTES AND INTEREST RECEIVABLES

Maturity

Interest

Borrower

Date

Rate

Amount

Security

Performing loans:

Miscellaneous non-related party notes

Various

$ 3,297

Various secured interests

Miscellaneous related party notes (1)

Various

3,441

Various secured interests

One Realco Corporation (1) (2)

17-Jan

3.00%

7,000

Unsecured

Realty Advisors Management, Inc. (1)

16-Dec

2.20%

20,387

Unsecured

S Breeze I-V, LLC

14-Jun

5.00%

3,238

6% Class A and 25% Class B Limited Partner Interests

Woodhaven-Hawthorn, Inc. (1)

19-Oct

5.50%

1,028

Unsecured

Unified Housing Foundation, Inc. (Cliffs of El Dorado) (1)

Dec-32

12.00%

2,097

100% Membership Interest in Unified Housing of McKinney, LLC

Unified Housing Foundation, Inc. (Echo Station) (1)

Dec-32

12.00%

1,481

100% Membership Interest in Unified Housing of Temple, LLC

Unified Housing Foundation, Inc. (Inwood on the Park) (1)

Dec-32

12.00%

5,059

100% Membership Interest in Unified Housing Inwood, LLC

Unified Housing Foundation, Inc. (Kensington Park) (1)

Dec-32

12.00%

3,936

100% Membership Interest in Unified Housing Kensington, LLC

Unified Housing Foundation, Inc. (Lakeshore Villas) (1)

Dec-32

12.00%

2,000

Unsecured

Unified Housing Foundation, Inc. (Lakeshore Villas) (1)

Dec-32

12.00%

9,096

Membership interest in Housing for Seniors of Humble, LLC

Unified Housing Foundation, Inc. (Limestone Canyon) (1)

Dec-32

12.00%

3,057

100% Membership Interest in Unified Housing of Austin, LLC

Unified Housing Foundation, Inc. (Limestone Canyon) (1)

Dec-32

12.00%

4,663

100% Membership Interest in Unified Housing of Austin, LLC

Unified Housing Foundation, Inc. (Limestone Ranch) (1)

Dec-32

12.00%

2,250

100% Membership Interest in Unified Housing of Vista Ridge, LLC

Unified Housing Foundation, Inc. (Limestone Ranch) (1)

Dec-32

12.00%

6,000

100% Membership Interest in Unified Housing of Vista Ridge, LLC

Unified Housing Foundation, Inc. (Parkside Crossing) (1)

Dec-32

12.00%

2,272

100% Membership Interest in Unified Housing of Parkside Crossing, LLC

Unified Housing Foundation, Inc. (Sendero Ridge) (1)

Dec-32

12.00%

5,174

100% Membership Interest in Unified Housing of Sendero Ridge, LLC

Unified Housing Foundation, Inc. (Sendero Ridge) (1)

Dec-32

12.00%

4,812

100% Membership Interest in Unified Housing of Sendero Ridge, LLC

Unified Housing Foundation, Inc. (Timbers at the Park) (1)

Dec-32

12.00%

1,323

100% Membership Interest in Unified Housing of Terrell, LLC

Unified Housing Foundation, Inc. (Tivoli) (1)

Dec-32

12.00%

7,966

100% Membership Interest in Unified Housing of Tivoli, LLC

Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1)

Dec-32

12.00%

2,485

100% Membership Interest in Unified Housing of Harvest Hill I, LLC

Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1)

Dec-32

12.00%

2,555

100% Membership Interest in Unified Housing of Harvest Hill, LLC

Unified Housing Foundation, Inc. (Trails at White Rock) (1)

Dec-32

12.00%

3,815

100% Membership Interest in Unified Housing of Harvest Hill III, LLC

Unified Housing Foundation, Inc. (1)

13-Dec

5.00%

6,000

Unsecured

Unified Housing Foundation, Inc. (1)

15-Dec

12.00%

17,928

Unsecured

Unified Housing Foundation, Inc. (1)

16-Dec

12.00%

3,657

Unsecured

Foundation for Better Housing, Inc. (Preserve at Pecan Pointe) (1)

19-Mar

12.00%

1,810

Unsecured

Foundation for Better Housing, Inc. (Preserve at Pecan Pointe) (1)

17-Mar

12.00%

1,156

Unsecured

Accrued interest

6,687

Total Performing

$ 145,670

Non-Performing loans:

Leman Development, Ltd (2)

11-Jul

7.00%

1,500

Unsecured

Tracy Suttles (2)

11-Dec

0.00%

1,077

Unsecured

Miscellaneous non-related party notes

Various

507

Various secured interests

Accrued interest

Total Non-Performing

$ 3,129

Allowance for doubtful accounts

(19,579)

Total

$ 129,220

(1) Related party notes

(2) An allowance was taken for estimated losses at full value of note

The_Following_Is_a_Summary_Of_

The Following Is a Summary Of The Financial Position And Results Of Operations (Tables)	3 Months Ended
	Mar. 31, 2014
The Following Is a Summary Of The Financial Position And Results Of Operations	'
The Following Is a Summary Of The Financial Position And Results Of Operations	'
	The following is a summary of the financial position and results of operations from our investees (dollars in thousands):

	As of March 31,	2014			2013
	Real estate, net of accumulated depreciation	$	10,518		$	11,313
	Notes receivable		6,730			6,170
	Other assets		31,026			30,786
	Notes payable		(10,473	)		(12,429	)
	Other liabilities		(7,402	)		(6,835	)
	Shareholders' equity		(30,399	)		(29,005	)

	For the Three Months Ended March 31,		2014			2013
	Revenue	$	11,626		$	11,141
	Depreciation		(288	)		(294	)
	Operating expenses		(10,669	)		(10,139	)
	Interest expense		(227	)		(270	)
	Income from continuing operations		442			438
	Income from discontinued operations		-			-
	Net income	$	442		$	438

	Company's proportionate share of earnings (1)	$	88		$	88

	(1) Earnings represents continued and discontinued operations

Summary_Of_Notes_And_Interest_

Summary Of Notes And Interest Payable (Tables)	3 Months Ended
Summary Of Notes And Interest Payable (Tables)	Mar. 31, 2014
Summary Of Notes And Interest Payable	'
Summary Of Notes And Interest Payable Text Block	'
	Below is a summary of our notes and interest payable as of March 31, 2014 (dollars in thousands):

		Notes Payable		Accrued Interest		Total Debt
	Apartments	$	367,395	$	1,233	$	368,628
	Commercial		102,594		285		102,879
	Land		90,621		117		90,738
	Real estate held for sale		15,717		-		15,717
	Real estate subject to sales contract		19,453		1,538		20,991
	Other		67,087		32		67,119

	Total	$	662,867	$	3,205	$	666,072

Reconciles_of_the_related_part

Reconciles of the related party receivable from payable due to Pillar (Tables)	3 Months Ended
	Mar. 31, 2014
Reconciles of the related party receivable from payable due to Pillar	'
Reconciles of the related party receivable from payable due to Pillar	'
	The following table reconciles the beginning and ending balances of accounts receivable from and (accounts payable) to related parties as of March 31, 2014 (dollars in thousands):

		Pillar
	Related party receivable, December 31, 2013	$	14,086
	Cash transfers		27,227
	Advisory fees		(2,242	)
	Fees and commissions		(392	)
	Cost reimbursements		(873	)
	Interest (to) from advisor		147
	Net income fee		(490	)
	Expenses paid by Advisor		(529	)
	Financing (mortgage payments)		(2,076	)
	Sales/purchases transactions		(107	)
	Related party receivable, March 31, 2014	$	34,751

Operating_Segments_As_Follows_

Operating Segments As Follows (Tables)	3 Months Ended
Operating Segments As Follows (Tables)	Mar. 31, 2014
Operating Segments As Follows	'
Operating Segments As Follows	'
	Presented below is our reportable segments’ operating income for the three months ended March 31, 2014 and 2013, including segment assets and expenditures (dollars in thousands):

		Commercial
	For the Three Months Ended March 31, 2014	Properties			Apartments			Hotels		Land			Other			Total
	Rental and other property revenues	$	4,892		$	15,681		$	-	$	-		$	10		$	20,583
	Property operating expenses		3,205			6,796			-		311			5			10,317
	Depreciation		1,820			2,691			-		-			(35	)		4,476
	Mortgage and loan interest		1,486			4,196			-		1,050			1,742			8,474
	Deferred borrowing costs amortization		13			888			-		35			3			939
	Loan charges and prepayment penalties		9			1,573			-		-			-			1,582
	Interest income		-			-			-		-			4,117			4,117
	Gain on land sales		-			-			-		753			-			753
	Segment operating income (loss)	$	(1,641	)	$	(463	)	$	-	$	(643	)	$	2,412		$	(335	)
	Capital expenditures		1,130			-			-		85			-			1,215
	Real estate assets		130,838			375,296			-		167,692			-			673,826

	Property Sales
	Sales price	$	-		$	23,131		$	-	$	1,565		$	-		$	24,696
	Cost of sale		-			17,078			-		812			-			17,890
	Gain on sale	$	-		$	6,053		$	-	$	753		$	-		$	6,806


		Commercial
	For the Three Months Ended March 31, 2013	Properties			Apartments			Hotels		Land			Other			Total
	Rental and other property revenues	$	5,377		$	14,932		$	-	$	34		$	7		$	20,350
	Property operating expenses		3,271			6,365			-		369			(23	)		9,982
	Depreciation		1,113			2,701			-		-			(59	)		3,755
	Mortgage and loan interest		1,341			4,665			-		1,536			1,902			9,444
	Deferred borrowing costs amortizaion		22			2,342			-		61			36			2,461
	Loan charges and prepayment penalties		-			3,937			-		-			-			3,937
	Interest income		-			-			-		-			3,541			3,541
	Loss on land sales		-			-			-		(35	)		-			(35	)
	Segment operating income (loss)	$	(370	)	$	(5,078	)	$	-	$	(1,967	)	$	1,692		$	(5,723	)
	Capital expenditures		678			31			-		53			-			762
	Real estate assets		138,683			385,672			-		209,773			-			734,128

	Property Sales
	Sales price	$	-		$	25,300		$	-	$	2,250		$	-		$	27,550
	Cost of sale		-			18,073			-		2,285			-			20,358
	Gain (loss) on sale	$	-		$	7,227		$	-	$	(35	)	$	-		$	7,192

The_Table_Below_Reconciles_Seg

The Table Below Reconciles Segment Information To Consolidated Statements Of Operations (Tables)	3 Months Ended
	Mar. 31, 2014
The Table Below Reconciles Segment Information To Consolidated Statements Of Operations	'
The Table Below Reconciles Segment Information To Consolidated Statements Of Operations	'
	The table below reconciles the segment information to the corresponding amounts in the Consolidated Statements of Operations:

		For the Three Months Ended
		March 31,
		2014			2013
	Segment operating loss	$	(335	)	$	(5,723	)
	Other non-segment items of income (expense)
	General and administrative		(1,994	)		(2,012	)
	Net income fee to related party		(490	)		(56	)
	Advisory fee to related party		(2,242	)		(2,554	)
	Other income		178			2,536
	Loss on sale of investments		-			(8	)
	Earnings from unconsolidated investees		70			213
	Litigation settlement		3,839			(45	)
	Income tax benefit		1,870			2,673
	Net income (loss) from continuing operations	$	896		$	(4,976	)

Reconciles_the_segment_informa

Reconciles the segment information to corresponding amounts in the Consolidated Balance Sheets (Tables)	3 Months Ended
	Mar. 31, 2014
Reconciles the segment information to corresponding amounts in the Consolidated Balance Sheets:	'
Reconciles the segment information to corresponding amounts in the Consolidated Balance Sheets	'
	The table below reconciles the segment information to the corresponding amounts in the Consolidated Balance Sheets:

		March 31,
		2014		2013
	Segment assets	$	673,826	$	734,128
	Investments in unconsolidated investees		3,990		10,089
	Notes and interest receivable		129,220		101,697
	Other assets		133,120		244,505
	Total assets	$	940,156	$	1,090,419

The_following_table_summarizes

The following table summarizes revenue and expense information for these properties sold and held for sale (Tables)	3 Months Ended
	Mar. 31, 2014
The following table summarizes revenue and expense information for these properties sold and held for sale	'
The following table summarizes revenue and expense information for these properties sold and held for sale	'
	The following table summarizes revenue and expense information for the properties sold and held for sale (dollars in thousands):

		For the Three Months Ended March 31,
		2014			2013
	Revenues:
	Rental and other property revenues	$	1,147		$	8,949
			1,147			8,949
	Expenses:
	Property operating expenses		928			4,457
	Depreciation		166			269
	General and administrative		164			1,432
	Total operating expenses		1,258			6,158

	Other income (expense):
	Other income		37			-
	Mortgage and loan interest		(310	)		(2,272	)
	Deferred borrowing costs amortization		(281	)		(18	)
	Loan charges and prepayment penalties		-			(45	)
	Litigation settlement		(45	)		(45	)
	Total other expenses		(599	)		(2,380	)

	Loss from discontinued operations before gain on sale of real estate and tax		(710	)		411
	Gain on sale of real estate from discontinued operations		6,053			7,227
	Income tax expense		(1,870	)		(2,673	)
	Income from discontinued operations	$	3,473		$	4,965

ORGANIZATION_AND_BASIS_OF_PRES1

ORGANIZATION AND BASIS OF PRESENTATION (Details)	Mar. 31, 2014
ORGANIZATION AND BASIS OF PRESENTATION CONSISTS OF THE FOLLOWING:	'
Percentage of common stock owned by related parties	87.40%
Percentage of common stock owned by ARL of Transcontinental Realty Investors Inc.	83.80%
Owned percentage of subsidiary TCI in Income Opportunity Realty Investors	81.10%
Number of interests in a total property portfolio of income producing properties	46
Number of commercial properties	10
Number of office buildings	6
Number of industrial warehouses	1
Number of retailcenters	3
Area of rental square feet (In Millions)	2.6
Number of apartment communities	36
Apartment communities units total	6,166
Area of acres of developed and undeveloped land	4,209

Summary_of_real_estate_owned_a

Summary of real estate owned as of (Details) (USD $)	Mar. 31, 2014
Summary of real estate owned as of:	'
Apartments	$436,109
Commercial properties	178,579
Land held for development	156,272
Real estate held for sale	37,069
Real estate subject to sales contract	25,371
Total real estate	833,400
Less accumulated deprecation	-149,786
Total real estate, net of depreciation	$683,614

Significant_real_estate_transa

Significant real estate transactions (In Millions) (Details) (USD $)	Mar. 31, 2014	Mar. 26, 2014	Feb. 06, 2014
Significant real estate transactions	'	'	'
TCI sold apartment complex (No of units)	'	'	232
TCI sold apartment complex (No of acres)	'	6.314	'
Sale price	'	$1.70	$23.10
Existing debt secured by the property	'	$6.60	$16.50
Recorded a gain on the sale	'	$0.80	$6.10
Acres of Land Valwood (Acers)	16.87	'	'
Purchase price	$3.20	'	'

NOTES_AND_INTEREST_RECEIVABLE_1

NOTES AND INTEREST RECEIVABLE CONSISTS OF THE FOLLOWING (Details) (USD $)	Mar. 31, 2014
Performing loans As Of:	'
Miscellaneous non-related party notes	$3,297
Miscellaneous related party notes (1)	3,441
One Realco Corporation (1)(2)	7,000
Realty Advisors Management, Inc. (1)	20,387
S Breeze I-V, LLC	3,238
Woodhaven-Hawthorn, Inc. (1)	1,028
Unified Housing Foundation, Inc. (Cliffs of El Dorado) (1)	2,097
Unified Housing Foundation, Inc. (Echo Station) (1)	1,481
Unified Housing Foundation, Inc. (Inwood on the Park) (1)	5,059
Unified Housing Foundation, Inc. (Kensington Park) (1)	3,936
Unified Housing Foundation, Inc. (Lakeshore Villas) (1)	2,000
Unified Housing Foundation, Inc. (Lakeshore Villas) (2)	9,096
Unified Housing Foundation, Inc. (Limestone Canyon) (1)	3,057
Unified Housing Foundation, Inc. (Limestone Canyon)	4,663
Unified Housing Foundation, Inc. (Limestone Ranch) (1)	2,250
Unified Housing Foundation, Inc. (Limestone Ranch)	6,000
Unified Housing Foundation, Inc. (Parkside Crossing) (1)	2,272
Unified Housing Foundation, Inc. (Sendero Ridge) (1)	5,174
Unified Housing Foundation, Inc. (Sendero Ridge)	4,812
Unified Housing Foundation, Inc. (Timbers at the Park) (1)	1,323
Unified Housing Foundation, Inc. (Tivoli) (1)	7,966
Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1)	2,485
Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1)	2,555
Unified Housing Foundation, Inc. (Trails at White Rock) (1)	3,815
Unified Housing Foundation, Inc. (1)	6,000
Unified Housing Foundation, Inc	17,928
Unified Housing Foundation, Inc	3,657
Foundation for Better Housing, Inc. (Preserve at Pecan Pointe) (1)	1,810
Foundation for Better Housing, Inc. (Preserve at Pecan Pointe) (1)	1,156
Accrued interest:	6,687
Total Performing	146,670
Leman Development, Ltd (2)	1,500
Tracy Suttles (2)	1,077
Miscellaneous non-related party notes:	507
Accrued interest	45
Total Non-Performing	3,129
Allowance for estimated losses	-19,579
Total Non-Performing loans:	$129,220
(1) Related Party Notes	'
(2) An allowance was taken for estimated losses at full value of note	'

Investment_In_UnConsolidated_J

Investment In UnConsolidated Joint Ventures And Investees consists of the following (Details)	Mar. 31, 2014	Mar. 31, 2013
Investment In UnConsolidated Joint Ventures And Investees consists of the following:	'	'
Gruppa Florentina, LLC	20.00%	20.00%

Summary_of_the_unconsolidated_

Summary of the unconsolidated subsidiaries and investees as follows (Details) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Summary of the unconsolidated subsidiaries and investees as follows:	'	'
Real estate, net of accumulated depreciation	$10,518	$11,313
Notes receivable	6,730	6,170
Other assets	31,026	30,786
Notes payable	-10,473	-12,429
Other liabilities	-7,402	-6,835
Shareholders' equity	($30,399)	($29,005)

Summary_of_the_results_of_oper

Summary of the results of operations from unconsolidated subsidiaries and investees as follows (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Summary of the results of operations from unconsolidated subsidiaries and investees as follows:	'	'
Revenue	$11,626	$11,141
Depreciation	-288	-294
Operating expenses	-10,669	-10,139
Interest expense	-227	-270
Income from continuing operations	442	438
Income from discontinued operations	0	0
Net income	442	438
Company's proportionate share of earnings (losses)	$88	$88

Recovered_Sheet1

Summary of notes and interest payable as follows (Details) (USD $)	Mar. 31, 2014
Notes Payable:	'
Apartments	$367,395
Commercial	102,594
Land held for development	90,621
Real estate held for sale	15,717
Real estate subject to sales contract	19,453
Other	67,087
Total	662,867
Accrued Interest:	'
Apartments	1,233
Commercial	285
Land held for development	117
Real estate held for sale	0
Real estate subject to sales contract	1,538
Other	32
Total	3,205
Total Debt:	'
Apartments	368,628
Commercial	102,879
Land held for development	90,738
Real estate held for sale	15,717
Real estate subject to sales contract	20,991
Other	67,119
Total	$666,072

RELATED_PARTY_TRANSACTIONS_rel

RELATED PARTY TRANSACTIONS related party receivable from and payable to Pillar (Details) (Pillar, USD $)	Pillar
	USD ($)
Related party receivable, at Dec. 31, 2013	$14,086
Cash transfers	27,227
Advisory fees	-2,242
Fees and commissions	-392
Cost reimbursements	-873
Interest (to) from advisor	147
Net income fee	-490
Expenses paid by Advisor	-529
Financing (mortgage payments)	-2,076
Sales/purchases transactions	-107
Related party receivable, at Mar. 31, 2014	$34,751

Reconciles_the_segment_informa1

Reconciles the segment information to the corresponding amounts during the period (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Reconciles the segment information to the corresponding amounts during the period:	'	'
Segment operating loss	($335)	($5,723)
Other non-segment items of income (expense):	'	'
General and administrative	-1,994	-2,012
Net income fee to related party	-490	-56
Advisory fee to related party	-2,242	-2,554
Other income	178	2,536
Loss on sale of investments	0	-8
Earnings from unconsolidated investees	70	213
Litigation settlement	3,839	-45
Income tax benefit	1,870	2,673
Net income (loss) from continuing operations	$896	($4,976)

Operating_Segments_to_the_corr

Operating Segments to the corresponding amounts Narrative (Details) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Operating Segments to the corresponding amounts in narrative:	'	'
Segment assets	$673,826	$734,128
Investments in unconsolidated investees	3,990	10,089
Notes and interest receivable	129,220	101,697
Other assets	133,120	244,505
Total Assets	$940,156	$1,090,419

Summarizes_revenue_and_expense

Summarizes revenue and expense information for these properties sold and held for sale (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenues:	'	'
Rental and other property revenues	$1,147	$8,949
Total Revenues	1,147	8,949
Expenses:	'	'
Property operating expenses	928	4,457
Depreciation	166	269
General and administrative	164	1,432
Total operating expenses	1,258	6,158
Other income (expense):	'	'
Other income	37	0
Mortgage and loan interest	-310	-2,272
Deferred borrowing costs amortization	-281	-18
Loan charges and prepayment penalties	0	-45
Litigation settlement	-45	-45
Total other expenses	-599	-2,380
Loss from discontinued operations before gain on sale of real estate and taxes	-710	411
Gain on sale of real estate from discontinued operations	6,053	7,227
Income tax expense	-1,870	-2,673
Income from discontinued operations	$3,473	$4,965

COMMITMENTS_AND_CONTINGENCIES_1

COMMITMENTS AND CONTINGENCIES AND LIQUIDITY AS FOLLOWS (Details) (USD $)	Feb. 13, 2013	Jan. 31, 2012	Oct. 31, 2011	Dec. 17, 2007
COMMITMENTS AND CONTINGENCIES AND LIQUIDITY AS FOLLOWS:	'	'	'	'
Notes payable for LK Four Hickory, LLC	'	'	'	$28,000,000
Notes payable current outstanding balance	'	'	'	23,400,000
Total awarded including damages and interest awarded to the Clapper Entities	'	'	74,000,000	'
Damages awarded to the clapper entities	'	'	26,000,000	'
Interest awarded to the clapper entities	'	'	48,000,000	'
Total assets and net worth	'	'	10,000,000	'
Reserved value represents 100% of both assets and book value	'	'	10,000,000	'
Sold ART and subsidiaries for note	'	10,000,000	10,000,000	'
Original Loan Commitment Were To Be Made To The Entities	160,000,000	'	'	'
Damages to TCI increased costs	960,646.28	'	'	'
Damages to TCI loss opportunity	11,161,520	'	'	'
TCI was entitled to damages for "lost opportunities" relating to tenant improvements and awarded	$252,577	'	'	'

EARNINGS_PER_SHARE_CONSISTES_O

EARNINGS PER SHARE CONSISTES OF (Details)	Mar. 31, 2014
EARNINGS PER SHARE CONSISTS OF:	'
Series A 10% Cumulative Convertible Preferred stock shares outstanding	3,353,954
Shares converted to Common Stock of the average daily closing price percent	90.00%
Shares of Series K convertible preferred stock, which are outstanding	135,000
Stock Options Outstanding	1,000

SUBSEQUENT_EVENTS_TRANSACTIONS

SUBSEQUENT EVENTS TRANSACTIONS AS FOLLOWS (Details) (USD $)	Apr. 03, 2014
SUBSEQUENT EVENTS TRANSACTIONS AS FOLLOWS:	'
TCI entered into a sales contract to sell square foot commercial building	512,593
Commercial building sales price in millions	$16.60
Recorded a gain in millions	$4.10