EXHIBIT 99.1
NEWS RELEASE FOR IMMEDIATE RELEASE | Contact: Transcontinental Realty Investors, Inc. Investors Relations |
Transcontinental Realty Investors, Inc. Reports 2005 Results
DALLAS (March 31, 2006) -- Transcontinental Realty Investors, Inc. (NYSE: TCI), a Dallas-based real estate investment company, today reported net income of $8.9 million, or $.1.12 per share for the year ended December 31, 2005, compared to net income of $23.5 million, or $2.90 per share for the same period in 2004.
TCI also reported fourth quarter 2005 net income of $14.8 million or $1.51 per share, compared to fourth quarter 2004 net income of $35.2 million or $4.33 per share.
Total income items for the fourth quarter and twelve months ended December 31, 2005, compared to the same periods in 2004, included:
- Increases in income from rents to $30.4 million and $105.4 million in 2005, from $21.9 million and $83.6 million in 2004. The increase was primarily attributable to completed apartment construction, a slight increase in commercial rents due to acquisitions in 2005, and increased hotel revenues due to higher room rates and average occupancies during 2005.
- Increases in property operations expenses to $17.6 million and $64.9 million, from $13.6 million and $53.2 million in 2004. The increase was primarily attributable to completed apartment construction, and increases in hotel and land operations.
- Decreases in other operating expenses -- consisting of depreciation and amortization, general and administrative expenses, and advisory fees to affiliate -- to $7.9 million and $29.1 million for the three and twelve months of 2005, from $11.1 million and $32.7 million in 2004. The decrease in general and administrative expenses was primarily due to lower legal fees and state income taxes. The decrease in advisory fees was due to a refund TCI received from the advisor in 2005.
Other income items -- consisting of interest income, gain on foreign currency transaction, and other income -- were $1.0 million and $4.3 million in the three and twelve months of 2005, compared to $4.0 million and $8.0 million in 2004. The decrease from 2005 to 2004 was due to a decrease in gain on foreign currency transaction relating to TCI's Polish hotel.
Other expense items -- consisting of mortgage and loan interest expense, provision for asset impairment, and net income fee -- increased to $12.5 million and $42.3 million in the three and twelve months of 2005 from $11.7 million and $32.7 million in 2004. The increase is primarily attributable to an increase in mortgage and loan interest expense due to completed apartment construction and new loans from the purchase of real estate. This increase was offset by a lower net income fee in 2005 compared to 2004.
Gain on land sales of $3.0 million and $7.7 million in the three and twelve months of 2005 approximated the $4.3 million and $7.1 million in 2004.
Net income from discontinued operations decreased to $17.9 million and $26.2 million in the three and twelve months of 2005, compared to $30.5 million and $35.3 million in 2004, representing 13 properties sold or held-for-sale in 2005 and 22 properties sold in 2004.
About Transcontinental Realty Investors, Inc.,
Transcontinental Realty Investors, Inc., a Dallas-based real estate investment company, invests in real estate through direct equity ownership and partnerships nationwide. For more information, go to the web site atwww.transconrealty-invest.com.
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TRANSCONTINENTAL REALTY INVESTORS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months | For the Twelve Months | ||||
2005 | 2004 | 2005 | 2004 | ||
(dollars in thousands, except per share) | |||||
Rental and other property revenues | $30,357 | $21,924 | $105,444 | $83,604 | |
Property operating expenses | 17,579 | 13,579 | 64,885 | 53,210 | |
Other operating expenses | 7,942 | 11,092 | 29,121 | 32,726 | |
Total operating expenses | 25,521 | 24,671 | 94,006 | 85,936 | |
Operating income (loss) | 4,836 | (2,747) | 11,438 | (2,332) | |
Other income | 1,010 | 4,033 | 4,333 | 8,004 | |
Other expenses | (12,518) | (11,729) | (42,291) | (32,662) | |
Loss before gain on land sales, minority interest, and equity in earnings of investees | (6,672) | (10,443) | (26,520) | (26,990) | |
Gain on land sales | 2,967 | 4,257 | 7,702 | 7,110 | |
Minority interest | (8) | 210 | 968 | (1,497) | |
Equity in income (loss) of investees | (119) | (327) | (112) | (1,194) | |
Loss from continuing operations | (3,832) | (6,303) | (17,962) | (22,571) | |
Add: Income tax benefit (expense) | 802 | 10,976 | 802 | 10,976 | |
(3,030) | 4,673 | (17,160) | (11,595) | ||
Net income (loss) from discontinued operations, net of tax | 17,913 | 30,537 | 26,229 | 35,301 | |
Net income (loss) | 14,883 | 35,210 | 9,069 | 23,706 | |
Preferred dividend requirement | (52) | (52) | (210) | (210) | |
Net income (loss) applicable to Common shares | $14,831 | $35,158 | $8,859 | $23,496 | |
Basic and diluted earnings per share: | |||||
Net income (loss) from continuing operations | $(.39) | $.56 | $(2.20) | $(1.46) | |
Discontinued operations | 1.90 | 3.77 | 3.32 | 4.36 | |
Net income (loss) applicable to Common shares | $1.51 | $4.33 | $1.12 | $2.90 | |
Weighted average Common shares used to compute earnings per share: | |||||
Basic and diluted | 7,900,869 | 8,094,471 | 7,900,869 | 8,082,854 |
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TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2005 | December 31, | |
(dollars in thousands) | ||
Assets | ||
Real estate held for investment | $ 911,981 | $ 730,584 |
Less--accumulated depreciation | (78,096) | (72,284) |
833,885 | 658,300 | |
Real estate held-for-sale | 40,446 | 49,878 |
Real estate subject to sales contract | 68,738 | 70,350 |
Notes and interest receivable | ||
Performing (including $34,370 in 2005 and $40,496 in 2004 from affiliates and related parties) | 59,922 | 56,630 |
Non-performing, non-accruing | 4,896 | -- |
64,818 | 56,630 | |
Less--allowance for estimated losses | -- | -- |
64,818 | 56,630 | |
Investment in real estate entities | 24,659 | 17,582 |
Marketable equity securities, at market value | 7,446 | 6,580 |
Cash and cash equivalents | 5,462 | 21,845 |
Other assets (including $1,103 in 2005 and $14,125 in 2004 from affiliates and related parties) | 43,625 | 39,146 |
$ 1,089,079 | $ 920,311 | |
Liabilities and Stockholders' Equity | ||
Liabilities: | ||
Notes and interest payable (including $6,987 in 2005 to affiliates and related parties) | $ 657,481 | $ 524,670 |
Liabilities related to assets held for sale | 53,357 | 59,424 |
Liabilities related to assets subject to sales contract | 59,323 | 59,977 |
Other liabilities (including $12,272 in 2005 and $2,282 in 2004 to affiliates and related parties) | 66,500 | 34,840 |
836,661 | 678,911 | |
Commitments and contingencies | ||
Minority interest | 1,239 | 881 |
Stockholders' equity: | ||
Preferred Stock | ||
Series C; $.01 par value; authorized, issued and outstanding 30,000 shares; (liquidation preference $3,000) | ||
-- | -- | |
Common Stock, $.01 par value; authorized, 10,000,000 shares; issued and outstanding 7,900,869 in 2005 and 7,900,869 shares in 2004 | ||
81 | 81 | |
Paid-in capital | 256,494 | 256,704 |
Treasury stock | (3,086) | (3,086) |
Accumulated deficit | (1,846) | (10,915) |
Accumulated other comprehensive loss | (464) | (2,265) |
251,179 | 240,519 | |
$ 1,089,079 | $ 920,311 |