DALLAS, Nov. 12, 1999 (PRIMEZONE) -- National Realty, L.P. (AMEX:NLP) Friday announced increased interest income, significantly improved income from operations, lower expenses and gains on the sale of real estate generated a 14-fold increase in net income for the three months and a three-fold increase for the nine months ended Sept. 30, 1999, as compared to net incomes reported for the same periods in 1998.
Third quarter 1999 net income was $51.9 million, or $8.05 per unit, on revenue of $26.5 million as compared to $3.7 million, or $.57 per unit, on revenue of $27.9 million for 1998. Third quarter 1999 gains on the sale of real estate was $49.6 million compared to $5.6 million in third quarter 1998. Nine month 1999 net income was $82.9 million, or $12.86 per unit, on revenue of $82.2 million as compared to $26.3 million, or $4.08 per unit, on revenue of $85.7 million in 1998. Gains on the sale of real estate were $74 million and $34.2 million in the 1999 and 1998 nine-month periods, respectively.
Income from operations significantly improved in the third quarter and nine months of 1999 to $2.3 million and $8.9 million as compared to losses of $1.9 million and $7.9 million in 1998.
-- Revenue from rents declined in 1999 due to the sale of 23 mature income-producing properties in 1998 and 1999. Rental income for the three and nine months ended Sept. 30, 1999, was $21.9 million and $69 million compared to $26 million and $81.2 million for the same periods in 1998. Higher rental rates at the partnership's remaining apartments partially offset the decline in rental income.
-- Increased interest income contributed to the improvements in income from operations. Interest revenue was $4.6 million and $13.2 million for the third quarter and nine months of 1999, an increase from the $1.9 million and $4.5 million in 1998. Increases of $4 million and $7 million are attributable to loans funded in 1998, partially offset by notes paid off in 1998 and 1999.
Expenses decreased by $5.7 million and $20.3 million in the three and nine months ended Sept. 30, 1999, mostly due to the sale of properties.
-- Interest expense fell due to loans paid off in 1998 and the sale of 23 mortgaged properties in 1998 and 1999. The decrease was partially offset by interest associated with mortgages secured by unencumbered properties, refinancing of mortgages and refinancings where the loan balance increased.
-- Depreciation, property taxes and insurance, utilities, property level payroll, repairs and maintenance and property management fees also declined from 1998 levels.
-- During the three and nine month periods $1.1 million was paid to NLP's General Partner as an incentive disposition fee related to the sale of two apartment complexes. No such fee was earned in 1998.
-- General and administrative expenses were comparable in the three months, but increased to $5.5 million in the nine months ended Sept. 30, 1999, as compared to $5.1 million in 1998. The nine-month increase was due to higher cost reimbursements to an affiliate of the General Partner, partially offset by decreased legal fees as a result of the 1998 settlements of two lawsuits.
As previously announced, National Realty, L.P. has signed an agreement to combine with American Realty Trust, Inc. (NYSE:ARB) in a tax-free reorganization into a holding company structure to be named American Realty Investors, Inc. The combination, subject to the approval of American Realty Trust stockholders and NLP unitholders and customary closing conditions, is expected to close during the first quarter of 2000. American Realty Investors is expected to trade on the New York Stock Exchange. Under the agreement:
-- The new company will exchange one share of its common stock with the holders of National Realty for each partnership unit held, except for the NLP units owned by American Realty Trust.
-- Each American Realty Trust share will be exchanged for 0.91 shares of the new common stock.
-- American Realty Trust preferred stock will be exchanged for the new preferred stock on a one-for-one basis.
National Realty, L.P. is a nationwide real estate investment partnership based in Dallas.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except unit and per unit data)
For the 3 months For the 9 months
ended Sept. 30, ended Sept. 30,
1999 1998 1999 1998
Revenue $ 26,494 $ 27,897 $ 82,221 $ 85,661
Expenses 24,176 29,829 73,311 93,677
Income (loss)
from operations 2,318 (1,932) 8,910 (7,916)
Gain on sale of
real estate 49,614 5,583 74,019 34,216
Net income $ 51,932 $ 3,651 $ 82,929 $ 26,300
Earnings per unit
Net income $ 8.05 $ .57 $ 12.86 $ 4.08
Weighted average
units of limited
partner interest
used to compute
earnings
per unit 6,321,525 6,321,622 6,321,533 6,322,528
CONTACT: Phyllis Wolper
(214) 692-4902 (800) 400-6407
investor.relations@bcm-inc.com