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Inland Real Estate Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 8, 2012 08:21AM

Inland Real Estate Corp. (IRC) filed Quarterly Report for the period ended 2012-06-30. Inland Real Estate Corporation has a market cap of $711.1 million; its shares were traded at around $8.2 with a P/E ratio of 9.3 and P/S ratio of 4.2. The dividend yield of Inland Real Estate Corporation stocks is 7.1%.



Highlight of Business Operations:

Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported as a separate component of comprehensive income until realized. The Company has recorded a net unrealized gain of $668 and $996 on the accompanying consolidated balances sheets as of June 30, 2012 and December 31, 2011, respectively. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis. Sales of investment securities available-for-sale during the three and six months ended June 30, 2012 resulted in gains on sale of $439 and $1,091, respectively, and during the three and six months ended June 30, 2011, these gains were $779 and $1,234, respectively. These gains are included in other income in the accompanying consolidated statements of operations and comprehensive income. Dividend income is recognized when received.

During the six months ended June 30, 2012, the joint venture with IPCC acquired ten investment properties. During the three and six months ended June 30, 2012 and 2011, the Company earned acquisition and management fees from this venture which are included in fee income from unconsolidated joint ventures on the accompanying consolidated statements of operations and comprehensive income. Additionally, in conjunction with the sales, the Company recorded gains of approximately $12 and $64 for the three and six months ended June 30, 2012, respectively, as compared to $240 and $553 for the three and six months ended June 30, 2011. These gains are included in gain on sale of joint venture interests on the accompanying consolidated statements of operations and comprehensive income.

The Company’s proportionate share of the earnings or losses related to its unconsolidated joint ventures is reflected as equity in earnings (loss) of unconsolidated joint ventures on the accompanying consolidated statements of operations and comprehensive income. Additionally, the Company earns fees for providing property management, leasing and acquisition activities to these ventures. Acquisition fees are earned on the IPCC joint venture properties as the interests are sold to the investors. The Company recognizes fee income equal to the Company’s joint venture partner’s share of the expense or commission in the accompanying consolidated statements of operations and comprehensive income. During the three and six months ended June 30, 2012, the Company earned $1,030 and $2,067, respectively, in fee income from its unconsolidated joint ventures, as compared to $1,338 and $2,500 for the three and six months ended June 30, 2011, respectively.

Net cash used in investing activities was $157,264 for the six months ended June 30, 2012, as compared to $88,603 for the six months ended June 30, 2011. The primary reason for the increase in cash used in investing activities was the use of $168,603 to purchase investment properties and $10,212 in additions to investment properties during the six months ended June 30, 2012, as compared to the use of $99,756 to purchase investment properties and $16,066 in additions to investment properties during the six months ended June 30, 2011. Additionally, we used net cash of $8,996 to fund a construction loan and to purchase notes encumbered by operating properties at a discount and we received only $2,289 in proceeds from the sale of property ownership interest in connection with our joint venture with IPCC during the six months ended June 30, 2012, as compared to the receipt of $28,334 from the sale of property ownership interests during the six months ended June 30, 2011. This decrease was due to the timing of the sale of property ownership interests during each period. Partially offsetting this increase in cash used in investing activities was the return of capital invested in our unconsolidated joint ventures as financing was placed on certain of the investment properties during the six months ended June 30, 2012 and the receipt of $15,385 of sales proceeds from the sale of investment properties during the six months ended June 30, 2012, as compared to $2,124 during the six months ended June 30, 2011.

Equity in earnings (loss) of unconsolidated joint ventures increased $8,731 and $9,123 for the three and six months ended June 30, 2012, as compared to the three and six months ended June 30, 2011, respectively. During the three and six months ended June 30, 2011, we recorded a total $17,387 of impairment losses related to our development joint ventures. Our pro rata share of this loss, equal to $7,824, is included in this line item on the accompanying consolidated statements of operations and comprehensive income.

Read the The complete Report



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