American Realty Reports Second Quarter 2001 Net Income of $.78 vs. Loss of $.13 in 2000


DALLAS, Aug. 13, 2001 (PRIMEZONE) -- American Realty Investors, Inc. (NYSE:ARL) Monday announced increased equity in income of investees and decreased minority interest expense produced 2001 second quarter and six months net incomes of $7.9 million and $9.7 million, or $.78 and $.96 per share, on revenues of $48.1 million and $89.5 million, as compared to net losses of $1.4 million and $7.7 million, or losses of $.13 per share and $.71 per share, on revenues of $44.4 million and $89.9 million in the comparable periods of 2000.

The primary factors contributing to net income in second quarter and six months 2001, as compared to the same periods in 2000, included:


 -- Rents decreased to $32.8 million and $66 million, from $35.4 
    million and $70.5 million in 2000, due to sales of nine apartments
    in 2000.  Hotel rents increased by $1.2 million in the first six 
    months of 2001.
 
 -- Equity in income of investees rose to $5.7 million and $5.7 
    million, up from $94,000 and $296,000.
 
 -- Pizza parlor sales, cost of sales and gross margin were up 
    slightly.
 
 -- Interest income decreased due to the collection of mortgage 
    receivables in 2000 and 2001.
 
 -- Gains on land sales improved to $4.7 million for the six months,
    from $3.5 million; gains on real estate sales declined to $25.8 
    million and $42.3 million, from $32.1 million and $48.2 million.

Total expenses for the second quarter and six months of 2001 decreased to $66.3 million and $125.6 million, from $78.4 million and $148.2 million in 2000, primarily due to lower general and administrative expenses and sales of nine apartments and 12 land parcels in 2000. In the second quarter and six months of 2001:


 -- General and administrative expenses fell by $3.2 million and $4.4
    million due to reduced consulting and partnership fees and reduced
    cost reimbursements to the advisor.
 
 -- Interest expenses decreased to $19.1 million and $37.2 million, 
    from $20.4 million and $40.6 million in the comparable periods in
    2000, due to property sales.
 
 -- Advisory fees, net income fees and incentive fees all increased 
    due to the addition of assets from the merger in 2000, the 
    increase in net income and the increase in net capital gains on 
    the sale of property.
 
 -- Minority interest expenses decreased to ($95,000) and $1.5 
    million, from $17.9 million and $27.3 million in 2000, due to the
    August 2000 acquisition of National Realty, L.P.

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 land. The company also has interests in mortgage loans and real estate-related entities. For more information, go to www.amrealtytrust.com.


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

                         Three months ended        Six months ended
                              June 30,                  June 30,
                         2001         2000         2001         2000
 Income from
  rents            $    32,823  $    35,424  $    66,036  $    70,503
 Expense from
  operations            25,643       22,710       49,094       46,675
   Operating income      7,180       12,714       16,942       23,828

 Land sales        $    13,087  $     5,760  $    33,577  $    18,953
 Cost of sales          12,163        4,698       28,864       15,442
  Gain on land sales       924        1,062        4,713        3,511

 Pizza sales       $     8,733  $     8,392  $    16,559  $    16,264
 Cost of sales           7,129        6,852       13,551       13,340
  Gross margin           1,604        1,540        3,008        2,924

 Income from
  operations       $     9,708  $    15,316  $    24,663  $    30,263

 Other income            6,530          578        6,942        3,121
 Other expense          33,545       48,836       62,948       88,203
 Gain on sale
  of real estate        25,840       32,078       42,266       48,232

 Net income (loss) $     8,533  $      (864) $    10,923  $    (6,587)
 Preferred dividend
  requirement             (606)        (563)      (1,248)      (1,071)

 Net income (loss)
  applicable to
  Common shares    $     7,927  $    (1,427) $     9,675  $    (7,658)

 Earnings Per
  Share

  Net income
  (loss)           $       .78  $      (.13) $       .96  $      (.71)

 Weighted average
  common shares
  used to compute
  earnings per
  share             10,128,124   10,716,533   10,116,196   10,738,003


            

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