American Realty Investors Third Quarter, Nine Month Net Incomes


DALLAS, Nov. 14, 2001 (PRIMEZONE) -- American Realty Investors, Inc. (NYSE:ARL) announced Wednesday that the company posted third quarter and nine month net incomes of $1.07 million and $11.99 million, or $.04 and $1.00 per share, on revenues of $49.76 million and $165.93 million, respectively, as compared to net incomes of $8.23 million and $1.64 million, or $.76 and $0.0 [zero] per share, on revenues of $132.12 million and $237.84 million, respectively, in the comparable periods of 2000.

Details of income and sales and related expenses and costs for the periods ended Sept. 30, 2001, are as follows:


 -- Incomes from rents decreased to $32.71 million and $98.75 million,
    from $34.71 million and $105.21 million in the same periods in
    2000, due to 2000-2001 sales of income producing property. The
    decrease, due to lower apartment rents, was partially offset by
    increased occupancy at the commercial properties and the opening 
    of a new hotel. Property operations expenses decreased to $22.15 
    million in the three months, from $23.78 million in 2000 and 
    increased to $71.25 million in the nine months, from $70.45
    million in 2000 due to increased commercial property and hotel
    expenses, partially offset by decreased expenses at the apartments
    due to sales of properties.

 -- Interest income increased to $837,000 in the three months, from
    $283,000 in 2000, due to new loans funded in 2001, and decreased
    to $2.0 million in the nine months, from $3.30 million in 2000,
    due to the collection of mortgage notes receivables and their 
    related maturity in 2000 and 2001.

 -- Pizza parlor sales increased to $8.72 million and $25.28 million,
    from $8.12 million and $24.38 million, as a result of aggressive
    marketing. Cost of sales increased to $7.16 million and $20.72
    million from $6.80 million and $20.14 million in 2000. Gross
    margins rose to $1.56 million and $4.57 million, from $1.33
    million and $4.25 million in 2000.

 -- Land sales decreased to $8.23 million and $41.81 million, from
    $89.28 million and $108.24 million in 2000, and the costs of sales
    were $4.68 million and $33.55 million, down from $65.67 million
    and $81.12 million in 2000. Gains on sales of land were $3.55
    million and $8.26 million, compared to $23.61 million and $27.12
    million in 2000.

 -- Oil and gas operations sales were $97,000 and operating expenses
    were $186,000 for both the third quarter and nine months of 2001,
    as compared to $0.0 [zero] for sales and expenses in both periods
    in 2000. Expenses included lifting costs and repairs and
    maintenance.

Other third quarter and nine months income included:


 -- Equity in the income of investees increased to $3.45 million and
    $9.16 million, from $2.58 million and $2.87 million in 2000, due
    to losses associated with sales of the stock in two affiliates in
    2000 and gains from property sales of an affiliate in 2001. 

 -- Gains on sales of real estate, excluding land, increased to $12.33
    million and $54.60 million, from $3.47 million and $51.71 million 
    in the same periods in 2000.

Other expenses (excluding property operations expenses, costs of sales for pizza and land, and oil and gas expenses) decreased to $31.12 million and $94.06 million, from $32.93 million and $121.13 million for the comparable periods in 2000. Details on expenses for the periods in 2001 are below:


 -- Interest expenses decreased to $19.06 million and $56.24 million,
    from $19.58 million and $60.15 million in 2000, due to sales of 
    income producing property and land that was subject to debt. 

 -- Depreciation,depletion and amortization increased to $4.49 million
    and $13.17 million, from $4.0 million and $12.91 million in 2000,
    due to the opening of a new hotel in 2001. 

 -- General and administrative expenses increased to $4.61 million,
    from $2.87 million, in the three months and decreased in the nine
    months to $9.08 million, from $11.71 million in 2000. The three
    month increase is due to higher legal and audit fees, while the
    nine months decrease is due to reduced consulting and partnership
    fees and a reduction in cost reimbursements paid to the advisor.

 -- Advisory fees of $1.4 million in the three months approximated
    those in the same quarter in 2000, while the nine months fees
    increased to $4.97 million, from $4.15 million in 2000, due to
    the addition of assets to the fee basis with the August 2000
    acquisition of National Realty, L.P. (NLP).

 -- Net income fee to affiliate was a refund of $1.13 million and a
    payment of $638,000 in the three and nine months, compared to 
    $0.0 [zero] in the 2000 periods, and are based on 10 percent of
    the yearly net income, in excess of a 10 percent return on 
    shareholders' equity. 

 -- Incentive fees to affiliate of $1.64 million and $7.48 million in
    2001, compared to $0.0 [zero] in 2000, were earned in 2000 and
    based on 10 percent of the excess of net capital gains over 
    net capital losses realized from sales of assets. 
 
 -- Minority interest decreased to $1.0 million and $2.48 million,
    from $4.95 million and $32.22 million in 2000 due to the 
    acquisition of NLP.

American Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S., including office buildings, apartments, hotels, shopping centers, and developed and undeveloped land. For more information on ARI, go to the company's Website at www.amrealtytrust.com.


                             FINANCIAL HIGHLIGHTS
             (dollars in thousands, except share and per share data)

                          Three months ended       Nine months ended
                                Sept. 30,              Sept. 30,
                              2001       2000      2001        2000

 Income from rents       $  32,712    $ 34,708   $ 98,748   $ 105,211
 Expense from operations    22,152      23,776     71,246      70,451
   Operating income         10,560      10,932     27,502      34,760

 Land sales                  8,229      89,285     41,806     108,238
   Cost of sales             4,682      65,674     33,546      81,116
     Gain on land sales      3,547      23,611      8,260      27,122

 Pizza sales                 8,723       8,124     25,282      24,388
   Cost of sales             7,164       6,798     20,715      20,138
     Gross margin            1,559       1,326      4,567       4,250

 Oil and gas operations
   Sales                        97        --           97        --
   Operating Expenses          186        --          186        --
     Gross margin              (89)       --          (89)       --

 Income from operations  $  15,577    $ 35,869   $ 40,240   $  66,132

 Other income                4,270       3,466     11,212       6,587
 Gain on sale of 
  real estate               12,334       3,474     54,600      51,706
 Other expense              31,115      32,929     94,063     121,132

 Income before 
  income taxes           $   1,066    $  9,880   $ 11,989   $   3,293
 Provision for 
  income taxes                --        (1,652)      --        (1,652)

 Net income              $   1,066    $  8,228   $ 11,989   $   1,641
 Preferred dividend
  requirement                 (620)       (590)    (1,868)     (1,661)

 Net income (loss) 
  applicable
    to Common shares     $     446    $  7,638   $ 10,121   $     (20)
 Earnings Per Share
    Net income           $     .04    $    .76   $   1.00   $    --

 Weighted average 
  common shares
  used to compute
  earnings
  per share             10,193,217  10,013,087  10,141,840  10,496,364


            

Coordonnées