Financial Performance - Net income attributable to common shares for Q3 2024 was a loss of $17.5 million or $1.08 per diluted share, compared to a net income of $3.0 million or $0.18 per diluted share in Q3 2023[1][5]. - Total revenue for Q3 2024 was $11.6 million, down from $12.5 million in Q3 2023[7]. - Net operating loss for Q3 2024 was $2.1 million, consistent with the loss reported in Q3 2023[4]. - General and administrative expenses were $1.59 million in Q3 2024, slightly up from $1.58 million in Q3 2023[7]. - The weighted average common shares used in computing earnings per share remained constant at 16,152,043 for both Q3 2024 and Q3 2023[7]. Occupancy and Rental Revenue - Total occupancy as of September 30, 2024, was 79%, with multifamily properties at 95% and commercial properties at 48%[2]. - Rental revenues decreased by $0.8 million from $11.8 million in Q3 2023 to $11.1 million in Q3 2024, primarily due to lower occupancy in commercial properties[3]. - A new lease at Stanford Center, covering 45,000 square feet, is expected to increase occupancy by 14% and rent per square foot by 20% over recent expired leases[2]. Development and Financing - A $27.5 million construction loan was obtained for the development of a 234-unit multifamily property in Dallas, Texas, expected to be completed in 2026[2]. Legal and Settlement Issues - The company accrued a loss of $23.4 million related to the settlement of claims with David Clapper and related entities[2][5].

Debt Management - The company paid off $67.5 million of Series C bonds on January 31, 2023[78]. - The company incurred a loss of $1.7 million on the early extinguishment of debt when paying off remaining Series A and B Bonds on May 4, 2023[79]. - The company extended the maturity of its loan on Windmill Farms to February 28, 2026, at an interest rate of 7.50%[79]. - The company reported a $137.4 million decrease in cash used in financing activities, primarily due to the repayment of bonds in 2023[105]. Construction and Development - A $33.0 million construction loan was secured on March 15, 2023, for the development of a 240-unit multifamily property in Lake Wales, Florida, with an expected total cost of approximately $55.3 million[81]. - A $25.4 million construction loan was entered into on November 6, 2023, for the development of a 216-unit multifamily property in McKinney, Texas, with an expected total cost of approximately $51.9 million[82]. - The company entered into a $23.5 million construction loan on December 15, 2023, for the development of a 216-unit multifamily property in Temple, Texas, with an expected total cost of approximately $49.6 million[83]. - The company has incurred a total of $31.9 million in development costs for the Alera project as of September 30, 2024[81]. - As of September 30, 2024, the company has incurred a total of $11.1 million in development costs for the Bandera Ridge project[83]. - The company has agreements to develop 125 acres of raw land into approximately 470 land lots for single-family homes at a total cost of $24.3 million, expected to be completed over a two-year period starting Q3 2024[80]. Financial Performance - Multifamily segment revenue increased to $7.967 billion for the three months ended September 30, 2024, compared to $7.899 billion in the same period of 2023, reflecting a variance of $68 million[96]. - Net income for the three months ended September 30, 2024, decreased by $21 million to a loss of $17.016 billion, compared to a profit of $4.025 billion in the same period of 2023[96]. - The commercial segment revenue decreased to $3.107 billion for the three months ended September 30, 2024, down from $3.939 billion in the same period of 2023, a decline of $832 million[96]. - Operating expenses for the multifamily segment decreased by $169 million to $4.642 billion for the three months ended September 30, 2024, compared to $4.811 billion in the same period of 2023[96]. - The loss on real estate transactions increased by $23.4 million due to the settlement of litigation in 2024, impacting overall profitability[98]. - Funds From Operations (FFO) for the three months ended September 30, 2024, was $9.128 million, compared to $6.439 million in the same period of 2023, indicating improved operational performance[111]. Cash Flow and Liquidity - Net cash provided by operating activities increased to $16.859 million for the nine months ended September 30, 2024, compared to $7.846 million in the same period of 2023, a variance of $9.013 million[103]. - Cash used in investing activities decreased by $17.332 million, primarily due to a reduction in development and renovation costs[104]. - The company anticipates that cash and cash equivalents as of September 30, 2024, will be sufficient to meet all cash requirements, supported by property operations and refinancing activities[102]. Legal and Settlement Matters - A settlement agreement required the company to pay $23.4 million by October 31, 2024, related to litigation from a 1998 multifamily property transaction[85]. - The Company executed a Settlement Agreement requiring a payment of $23.4 million to Clapper by October 31, 2024, which has been completed[116]. - The litigation involved a $148 million judgment against ARL in 2011, which was reversed in May 2021, but was appealed again leading to a new trial[116]. - The settlement has been accrued as a loss on real estate transactions during the three and nine months ended September 30, 2024[116].

Financial Performance - Net income attributable to common shares increased to $1.2 million or $0.07 per diluted share for Q2 2024, compared to $0.1 million or $0.01 per diluted share in Q2 2023, representing a significant increase of 1,100%[2][5] - Net operating loss decreased by $2.6 million from $3.9 million in Q2 2023 to $1.3 million in Q2 2024, attributed to lower general and administrative expenses[4] - The company reported a net operating loss of $1.3 million for Q2 2024, a significant improvement compared to a loss of $3.9 million in Q2 2023[4] Revenue and Occupancy - Total revenue for the six months ended June 30, 2024, was $23.7 million, down from $23.9 million for the same period in 2023[8] - Rental revenues decreased by $0.2 million from $11.4 million in Q2 2023 to $11.2 million in Q2 2024, primarily due to a $0.5 million decrease in commercial properties[4] - Total occupancy rate was 78% as of June 30, 2024, with multifamily properties at 93% occupancy and commercial properties at 48%[3] Expenses - General and administrative expenses dropped from $3.7 million in Q2 2023 to $1.6 million in Q2 2024, a reduction of approximately 57%[8] - Interest income decreased from $7.9 million in Q2 2023 to $4.8 million in Q2 2024, a decline of about 39%[8] Investments and Financing - Equity in income from unconsolidated joint ventures increased from $0.3 million in Q2 2023 to $0.5 million in Q2 2024, a growth of approximately 71%[8] - The company replaced an existing loan on Forest Grove with a new $6.6 million loan at SOFR plus 1.85%, maturing on July 10, 2031[3]

Financing Activities - The company paid off $67.5 million of Series C bonds on January 31, 2023[90]. - A $33.0 million construction loan was secured on March 15, 2023, for the development of a 240-unit multifamily property in Lake Wales, Florida, with an expected total cost of approximately $55.3 million[93]. - A $25.4 million construction loan was entered into on November 6, 2023, for the development of a 216-unit multifamily property in McKinney, Texas, with an expected total cost of approximately $51.9 million[94]. - A $23.5 million construction loan was secured on December 15, 2023, for the development of a 216-unit multifamily property in Temple, Texas, with an expected total cost of approximately $49.6 million[95]. - The company extended the maturity of its loan on Windmill Farms to February 28, 2026, at an interest rate of 7.50%[90]. - The company spent $3.2 million on reimbursable infrastructure investments during 2024[92]. Development Costs - The company has incurred a total of $25.1 million in development costs for the Alera project as of June 30, 2024[93]. - The company has incurred a total of $11.8 million in development costs for the Merano project as of June 30, 2024[94]. - The company has incurred a total of $6.2 million in development costs for the Bandera Ridge project as of June 30, 2024[95]. Revenue and Income - Multifamily segment revenue increased by $269 million to $7,927 million in 2024 compared to $7,658 million in 2023, while commercial segment revenue decreased by $470 million to $3,261 million[103]. - Net income for the three months ended June 30, 2024, was $1,491 million, an increase of $1,188 million compared to $303 million in the same period of 2023[103]. - Funds From Operations (FFO) for the six months ended June 30, 2024, was $9,365 million, compared to $10,251 million in 2023, reflecting a decrease of $886 million[118]. Cash Flow - Net cash provided by operating activities was $3,364 million for the six months ended June 30, 2024, a variance of $11,819 million compared to $(8,455) million in 2023[111]. - Cash used in financing activities decreased by $132.9 million to $(2,354) million in 2024, primarily due to the repayment of bonds in 2023[112]. - The company anticipates sufficient cash and cash equivalents to meet all cash requirements as of June 30, 2024[108]. Expenses - Interest income decreased by $2,537 million to $2,881 million in 2024, primarily due to lower interest rates on UHF notes and Pillar Receivable[105]. - General, administrative, and advisory expenses decreased by $2,578 million to $3,289 million in 2024, attributed to reduced legal and auditing costs[105]. Future Plans - The company plans to continue funding liquidity needs through property operations, sales, and refinancing of existing mortgage notes[107]. - The multifamily segment's profit increase was driven by a $0.4 million rise from the Redevelopment Property due to lease-up[106]. Property Transactions - The company reported no Acquisition Properties or Disposition Properties for the comparison of the three and six months ended June 30, 2024, to the same periods in 2023[102].

Financial Performance - Net income attributable to common shares decreased by $1.2 million from $3.0 million in Q1 2023 to $1.8 million in Q1 2024, representing a 40% decline [5]. - Total revenue increased by $0.2 million from $11.7 million in Q1 2023 to $11.9 million in Q1 2024, a growth of approximately 1.7% [8]. - Net operating loss decreased by $1.6 million from $3.1 million in Q1 2023 to $1.5 million in Q1 2024, a reduction of approximately 51.6% [4]. - Earnings per share decreased from $0.18 in Q1 2023 to $0.11 in Q1 2024, a decline of approximately 38.9% [8]. Revenue Sources - Rental revenues rose by $0.3 million from $11.0 million in Q1 2023 to $11.3 million in Q1 2024, primarily driven by a $0.7 million increase in multifamily properties [4]. - Interest income decreased from $8.3 million in Q1 2023 to $5.7 million in Q1 2024, a decline of about 31.1% [8]. - Equity in income from unconsolidated joint ventures decreased from $2.4 million in Q1 2023 to $0.5 million in Q1 2024 [8]. Expenses and Financial Management - General and administrative expenses decreased from $3.2 million in Q1 2023 to $1.4 million in Q1 2024, a reduction of approximately 55.6% [8]. - The company extended the maturity of its loan on Windmill Farms to February 28, 2026, at an interest rate of 7.50% [3]. Occupancy Rates - Total occupancy was reported at 79% as of March 31, 2024, with multifamily properties at 94% and commercial properties at 49% [3].

Revenue and Income - Multifamily segment revenue increased to $8.053 million in Q1 2024 from $7.373 million in Q1 2023, a growth of approximately 9.2%[105] - Commercial segment revenue decreased to $3.226 million in Q1 2024 from $3.636 million in Q1 2023, a decline of approximately 11.3%[105] - Net income for Q1 2024 was $2.302 million, down from $4.219 million in Q1 2023, representing a decrease of about 45.5%[105] - Net income for the three months ended March 31, 2024, decreased by $1.9 million compared to the same period in 2023, primarily due to a decline in occupancy at Browning Place in the commercial segment[107] - Funds From Operations (FFO) for the three months ended March 31, 2024, was $4.98 million, down from $6.13 million in the same period in 2023[116] - FFO adjusted for the three months ended March 31, 2024, was $4.98 million, compared to $5.16 million in the same period in 2023[116] Expenses - Operating expenses for the multifamily segment rose to $4.219 million in Q1 2024, up from $3.708 million in Q1 2023, an increase of about 13.8%[105] - General, administrative, and advisory expenses decreased to $3.610 million in Q1 2024 from $5.566 million in Q1 2023, a reduction of approximately 35.2%[105] - Interest income decreased to $3.811 million in Q1 2024 from $5.155 million in Q1 2023, a decline of about 26.0%[105] - The decrease in interest income was $2.6 million, partially offset by a $1.2 million decrease in interest expense due to changes in interest rates and repayment of bonds[107] Development and Financing - The company incurred $18.9 million in development costs for the Lake Wales multifamily property as of March 31, 2024, with total expected costs of approximately $55.3 million[95] - A $33.0 million construction loan was secured for the Lake Wales development, which is expected to be completed in 2025[95] - The company entered into a $25.4 million construction loan for the Merano development, expected to be completed in 2025[96] - A total of $24.3 million is allocated for the development of 470 land lots in Windmill Farms, with completion expected over a two-year period starting Q3 2024[94] - The net cash used in financing activities decreased significantly by $87.67 million, primarily due to the repayment of bonds in 2023[111] - The company plans to selectively sell land and income-producing assets and refinance existing real estate debt to meet liquidity requirements[109] Cash Flow - Cash provided by operating activities increased to $3.87 million in Q1 2024 from $1.54 million in Q1 2023, a variance of $2.33 million attributed to a decrease in interest payments[110] - The company anticipates that cash and cash equivalents as of March 31, 2024, will be sufficient to meet all cash requirements, supported by cash generated from notes receivable and short-term investments[109] - The cash flow from investing activities changed by $35.8 million, mainly due to a $51.1 million increase in net purchases of short-term investments[111] Profitability - The multifamily segment saw a profit increase of $0.1 million due to the lease-up of the Redevelopment Property[107]

Financial Performance - For Q4 2023, American Realty Investors, Inc. reported a net loss attributable to common shares of $2.1 million or $0.13 per diluted share, a significant decrease from a net income of $43.4 million or $2.69 per diluted share in Q4 2022 [2][5]. - Net operating income decreased by $3.6 million, resulting in a net operating loss of $2.2 million for Q4 2023, compared to a net operating income of $1.4 million in Q4 2022 [4]. - The decrease in net income was primarily due to a $72.6 million decrease in gain on sale, remeasurement, or write-down of assets [5]. - Total revenue for Q4 2023 was $14.0 million, up from $13.3 million in Q4 2022 [8]. Occupancy and Rental Revenue - Total occupancy was 77% as of December 31, 2023, with multifamily properties at 92% and commercial properties at 49% [3]. - Rental revenues increased by $1.0 million from $11.8 million in Q4 2022 to $12.8 million in Q4 2023, primarily driven by a $0.9 million increase in multifamily properties [4]. - Property operating expenses increased by $1.5 million from $5.8 million in Q4 2022 to $7.3 million in Q4 2023 [8]. Construction and Financing - The company entered into a $25.4 million construction loan for a 216-unit multifamily property in McKinney, Texas, expected to be completed in 2025 [3]. - A second construction loan of $23.5 million was secured for another 216-unit multifamily property in Temple, Texas, also expected to be completed in 2025 [3]. - The company extended the maturity of its loan on Windmill Farms to February 28, 2026, at an interest rate of 7.50% [3].

Sales and Gains - The company sold a 50% ownership interest in Overlook at Allensville Phase II for $2.6 million, resulting in a gain of $1.4 million[79]. - The sale of 600 Las Colinas generated $74.8 million, with a gain of $27.3 million, and proceeds were used to pay off the mortgage[80]. - In 2022, the company sold 134.7 acres of land for $20.2 million, resulting in gains of $10.3 million[80]. - The company received $182.8 million from VAA as an initial distribution from the sale of the VAA Sale Portfolio, which totaled $1.8 billion[91]. - Gain on sale of land was $188 in 2023, significantly lower than $4,752 in 2022[115]. Development Projects - The company spent $5.0 million on the ongoing development of Windmill Farms, with an agreement to sell 276 lots for $13.1 million[85]. - A development agreement for a 240 unit multifamily property in Lake Wales is expected to cost approximately $55.3 million, funded partly by a $33.0 million construction loan[86]. - The company incurred a total of $16.9 million in development costs for the Lake Wales project as of December 31, 2023[86]. - A construction loan of $25.4 million was entered into for the development of Merano, expected to be completed in 2025[87]. - The company completed the restoration of Landing on Bayou Cane for a total cost of $16.7 million, primarily funded by insurance proceeds[89]. Financial Performance - Multifamily segment revenue increased to $32,608,000 in 2023 from $17,828,000 in 2022, a variance of $14,780,000[104]. - Operating expenses for the multifamily segment rose to $17,749,000 in 2023 from $9,524,000 in 2022, resulting in an operating income increase of $6,555,000[104]. - Commercial segment revenue decreased to $14,415,000 in 2023 from $16,252,000 in 2022, a decline of $1,837,000[104]. - Net income dropped significantly to $5,251,000 in 2023 from $475,317,000 in 2022, a decrease of $470,066,000[104]. - Interest income, net increased by $8,315,000, primarily due to an $8,000,000 decrease in interest expense and a $300,000 increase in interest income[104]. Funds and Cash Flow - Funds From Operations (FFO) for 2023 was $19,997,000 compared to $43,275,000 in 2022, reflecting a decrease of $23,278,000[115]. - The company anticipates sufficient cash and short-term investments to meet liquidity requirements through 2024[109]. - Cash used in operating activities decreased to $31,054,000 in 2023 from $45,386,000 in 2022, a variance of $14,332,000[111]. - Cash provided by investing activities fell to $26,813,000 in 2023 from $307,357,000 in 2022, a decrease of $280,544,000[112]. - The company plans to selectively sell land and income-producing assets to meet liquidity needs[109]. Income and Expenses - Net income attributable to the Company for 2023 was $3,968, compared to $373,349 in 2022, indicating a significant decrease[115]. - FFO-Basic and Diluted for 2023 was $19,997, down from $43,275 in 2022[115]. - FFO-adjusted for 2023 was $20,714, compared to $41,267 in 2022, reflecting a decline[115]. - Depreciation and amortization on consolidated assets increased to $13,646 in 2023 from $9,686 in 2022[115]. - Loss on early extinguishment of debt was $1,710 in 2023, down from $2,805 in 2022[115]. Asset Management - Loss (gain) on sale, remeasurement or write down of assets was $1,923 in 2023, compared to a gain of $(87,132) in 2022[115]. - Loss on foreign currency transactions was $(993) in 2023, an improvement from $(20,067) in 2022[115]. - Depreciation and amortization on unconsolidated joint ventures at pro rata share was $272 in 2023, down from $8,424 in 2022[115]. - Gain on sale of assets from unconsolidated joint venture at pro rata share was $(265,804) in 2022, with no corresponding figure for 2023[115].

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for American Realty Investors, Inc., including Balance Sheets, Statements of Operations, Equity, Cash Flows, and accompanying Notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$1.06 billion** by September 30, 2023, from **$1.20 billion** at year-end 2022, while total liabilities significantly decreased to **$241.6 million** Consolidated Balance Sheet Summary (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,062,278** | **$1,197,479** | | Cash and cash equivalents | $47,203 | $113,445 | | Real estate | $502,031 | $493,821 | | **Total Liabilities** | **$241,563** | **$385,311** | | Mortgages and other notes payable | $182,428 | $188,004 | | Bonds payable | $0 | $129,218 | | **Total Equity** | **$820,715** | **$812,168** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Net income attributable to common shares significantly decreased to **$6.1 million** for the nine months ended September 30, 2023, from **$329.9 million** in 2022, despite total revenues increasing to **$36.5 million** Nine Months Ended September 30 (in thousands, except per share) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Total Revenue | $36,453 | $24,235 | | Net Operating Loss | ($9,049) | ($10,716) | | Equity in income from unconsolidated joint ventures | $2,946 | $471,385 | | Net Income Attributable to Common Shares | $6,091 | $329,915 | | Earnings Per Share (basic and diluted) | $0.38 | $20.43 | [Consolidated Statements of Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Equity) Total equity increased from **$812.2 million** to **$820.7 million** by September 30, 2023, primarily due to **$8.5 million** in net income - For the nine months ended September 30, 2023, total equity grew from **$812.2 million** to **$820.7 million**, with net income of **$8.5 million** being the sole contributor to the change[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities turned positive at **$7.8 million**, while investing activities used **$9.6 million**, and financing activities used **$137.3 million**, leading to a **$139.0 million** net cash decrease Cash Flow Summary - Nine Months Ended Sep 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $7,846 | ($6,874) | | Net Cash from Investing Activities | ($9,566) | $154,850 | | Net Cash from Financing Activities | ($137,260) | ($71,524) | | **Net (Decrease) Increase in Cash** | **($138,980)** | **$76,452** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail the company's organization, accounting policies, business segments, real estate activities, debt, related party transactions, and subsequent events - The company's primary business is acquiring, developing, and owning income-producing multifamily and commercial properties[23](index=23&type=chunk) - Over **90%** of its stock is owned by related party entities, and its day-to-day operations are managed by a related party, Pillar Income Asset Management, Inc[25](index=25&type=chunk) Property Portfolio as of September 30, 2023 | Property Type | Details | | :--- | :--- | | Office Buildings | 4 buildings, ~1.06 million sq. ft. | | Multifamily Properties | 14 properties, 2,328 units | | Land | ~1,858 acres | - The company operates in two reportable segments: Multifamily and Commercial[38](index=38&type=chunk) - For the nine months ended Sep 30, 2023, the Multifamily segment generated a profit of **$9.9 million**, while the Commercial segment generated a profit of **$3.7 million**[41](index=41&type=chunk) - In May 2023, the company paid off the remaining balances of its Series A and Series B Bonds and withdrew from the Tel Aviv Stock Exchange (TASE)[84](index=84&type=chunk) - Subsequent to the quarter end, on November 6, 2023, the company entered into a development agreement with Pillar to build a 216-unit multifamily property in McKinney, Texas for an estimated total cost of **$51.3 million**[96](index=96&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion covers recent activities, critical accounting policies, operational results, liquidity, capital resources, and Funds From Operations (FFO) reconciliation [Management's Overview](index=23&type=section&id=Management%27s%20Overview) Management highlights the payoff of outstanding bonds, a new **$33.0 million** construction loan for Lake Wales development, and a final **$18.0 million** distribution from a joint venture sale - Key financing activities included paying off all Series A, B, and C bonds in 2023 and entering into a new **$33.0 million** construction loan for the Lake Wales development[105](index=105&type=chunk) - A new development project was initiated on March 15, 2023, to build a 240-unit multifamily property in Lake Wales, Florida, expected to be completed in 2025 for a total cost of approximately **$55.3 million**[106](index=106&type=chunk) - The company received the final distribution of **$18.0 million** in March 2023 from the 2022 sale of 45 properties by the VAA joint venture[108](index=108&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Net income decreased by **$410.4 million** for the nine-month period due to the absence of a 2022 gain, while multifamily profit increased and commercial profit decreased - The **$410.4 million** decrease in net income for the nine months ended Sep 30, 2023, compared to 2022, was primarily due to a significant one-time gain from the VAA joint venture property sale in 2022[119](index=119&type=chunk) - For the nine-month period, the multifamily segment profit increased by **$6.3 million**, driven by newly acquired properties[119](index=119&type=chunk) - The commercial segment profit decreased by **$2.4 million** due to a decline in occupancy at the Stanford Center property and higher insurance costs[119](index=119&type=chunk) - Net interest income increased by **$11.0 million** for the nine-month period, resulting from higher interest income on investments and lower interest expense following the repayment of bonds[119](index=119&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity relies on property operations, asset sales, and debt financing, with cash from operations increasing to **$7.8 million** and financing activities using **$137.3 million** - The company plans to fund its liquidity needs through property operations, selective asset sales, refinancing, and additional borrowings[120](index=120&type=chunk) - Management believes current resources are sufficient to meet all cash requirements[121](index=121&type=chunk) Change in Cash Flows - Nine Months Ended Sep 30 (in thousands) | Activity | 2023 | 2022 | Variance | | :--- | :--- | :--- | :--- | | Operating Activities | $7,846 | ($6,874) | $14,720 | | Investing Activities | ($9,566) | $154,850 | ($164,416) | | Financing Activities | ($137,260) | ($71,524) | ($65,736) | - The increase in cash used in financing activities was primarily due to an **$87.4 million** increase in bond payments as the company paid off its bonds in 2023[124](index=124&type=chunk) [Funds From Operations (FFO)](index=28&type=section&id=Funds%20From%20Operations%20(FFO)) Basic and diluted FFO decreased to **$16.0 million** for the nine months ended September 30, 2023, from **$26.1 million** in the prior year, with adjusted FFO also declining FFO Reconciliation Summary (in thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net income attributable to the Company | $6,091 | $329,915 | | **FFO-Basic and Diluted** | **$15,973** | **$26,051** | | **FFO-adjusted** | **$16,690** | **$24,673** | [Quantitative and Qualitative Disclosures About Market Risks](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company, as a smaller reporting entity, has opted not to include quantitative and qualitative disclosures about market risks - The company has opted not to include quantitative and qualitative disclosures about market risks[132](index=132&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of September 30, 2023[133](index=133&type=chunk) - No material changes were made to the company's internal control over financial reporting during the most recent fiscal quarter[134](index=134&type=chunk) [PART II. OTHER INFORMATION](index=30&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) No new material legal proceedings were reported for the period - No legal proceedings were reported under this item[135](index=135&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from the company's 2022 Form 10-K - The company states there are no material changes to the risk factors disclosed in its 2022 10-K[136](index=136&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased under the program during the nine months ended September 30, 2023, with **263,250** shares remaining available for repurchase - No shares were repurchased during the nine months ended September 30, 2023[137](index=137&type=chunk) - The company has authorization to repurchase an additional **263,250** shares under its existing program[137](index=137&type=chunk) [Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported [Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported [Other Information](index=30&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL data files

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to________ Commission File Number 001-15663 AMERICAN REALTY INVESTORS, INC. (Exact Name of Registrant as Specified in Its Charter) Nevada 75-28 ...