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Transcontinental Realty Investors Inc. Reports Operating Results (10-Q)

November 13, 2009 | About:
10qk

10qk

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Transcontinental Realty Investors Inc. (TCI) filed Quarterly Report for the period ended 2009-09-30.

Transcontinental Realty Investors, Inc. invests in real estate through direct equity ownership and partnerships and financing real estate and real estate related activities through investments in mortgage loans, including first, wraparound and junior mortgage loans. Transcontinental Realty Investors Inc. has a market cap of $87.3 million; its shares were traded at around $10.75 with and P/S ratio of 0.6. Transcontinental Realty Investors Inc. had an annual average earning growth of 3% over the past 5 years.

Highlight of Business Operations:

On July 17, 2009, the Company acquired from Syntek West, Inc., (SWI), 2,518,934 shares of Common Stock, par value $0.01 per share of IOT at an aggregate price of $17,884,431 (approximately $7.10 per share), the full amount of which was paid by the Company through an assumption of an aggregate amount of indebtedness of $17,884,431 on the outstanding balance owed by SWI to IOT. The 2,518,934 shares of IOT Common Stock acquired by the Company constituted approximately 60.4% of the issued and outstanding Common Stock of IOT. The Company has owned for several years an aggregate of 1,037,184 shares of Common Stock of IOT (approximately 25% of the issued and outstanding). After giving effect to the transaction on July 17, 2009, the Company owns an aggregate of 3,556,118 shares of IOT Common Stock which constitutes approximately 85.3% of the shares of Common Stock of IOT outstanding (which is a total of 4,168,214 shares). Shares of IOT are traded on the American Stock Exchange.

For the three months ended September 30, 2009, we reported a net loss applicable to common shares of ($11.5) million or ($1.41) per diluted earnings per share, as compared to a net loss of ($6.9) million or ($.85) per diluted earnings per share for the same period ended 2008.

Rental and other property revenues increased by $4.1 million as compared to the prior year period which by segment is an increase in the apartment portfolio of $2.7 million, the commercial portfolio of $1.2 million, and an increase in land and other portfolio of $0.2 million. Within the apartment portfolio, a $2.7 million increase was due to the developed properties being leased up. There appears to be a continued demand for newly developed properties. Within the commercial portfolio, the same property portfolio increased by $0.2 million and the acquired properties increased by $1.0 million.

Property operating expenses decreased by $0.7 million as compared to the prior year period which by segment is a decrease in the apartment portfolio of $0.3 million, a decrease in the commercial portfolio of $0.1 million and a decrease in the land and other of $0.3 million. Within the apartment portfolio, decreases came from the same properties which decreased by $0.8 million and the developed properties which increased by $0.5 million. Within the commercial portfolio, the same portfolio decreased by $0.2 million and the acquired properties increased by $0.1 million.

Depreciation and amortization increased by $2.1 million as compared to the prior year period which by segment is an increase in the apartment portfolio of $1.1 million, and an increase in the commercial portfolio of $1.0 million. Within the apartment portfolio, increases came from the same properties portfolio of $0.2 million and the developed properties increased by $0.9 million. Within the commercial properties, the acquired properties increased by $1.0 million.

Mortgage and loan interest expense increased by $2.4 million as compared to the prior year period which by segment is an increase in the apartment portfolio of $1.0 million and a decrease in the commercial portfolio of $0.2 million, an increase in land portfolio of $1.1 million and an increase in other portfolio of $0.5 million. Within the apartment portfolio the same properties decreased by $0.2 million, which was offset by an increase in the developed properties of $1.2 million. Within the commercial portfolio, the acquired properties decreased by $0.2 million.

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