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American Realty Investors(ARL) - 2024 Q3 - Quarterly Report
ARLAmerican Realty Investors(ARL)2024-11-07 16:43

Debt Management - The company paid off 67.5millionofSeriesCbondsonJanuary31,2023[78].−Thecompanyincurredalossof67.5 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 137.4milliondecreaseincashusedinfinancingactivities,primarilyduetotherepaymentofbondsin2023[105].ConstructionandDevelopment−A137.4 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 55.3million[81].−A55.3 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 51.9million[82].−Thecompanyenteredintoa51.9 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 49.6million[83].−Thecompanyhasincurredatotalof49.6 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 11.1millionindevelopmentcostsfortheBanderaRidgeproject[83].−Thecompanyhasagreementstodevelop125acresofrawlandintoapproximately470landlotsforsingle−familyhomesatatotalcostof11.1 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 7.967billionforthethreemonthsendedSeptember30,2024,comparedto7.967 billion for the three months ended September 30, 2024, compared to 7.899 billion in the same period of 2023, reflecting a variance of 68million[96].−NetincomeforthethreemonthsendedSeptember30,2024,decreasedby68 million[96]. - Net income for the three months ended September 30, 2024, decreased by 21 million to a loss of 17.016billion,comparedtoaprofitof17.016 billion, compared to a profit of 4.025 billion in the same period of 2023[96]. - The commercial segment revenue decreased to 3.107billionforthethreemonthsendedSeptember30,2024,downfrom3.107 billion for the three months ended September 30, 2024, down from 3.939 billion in the same period of 2023, a decline of 832million[96].−Operatingexpensesforthemultifamilysegmentdecreasedby832 million[96]. - Operating expenses for the multifamily segment decreased by 169 million to 4.642billionforthethreemonthsendedSeptember30,2024,comparedto4.642 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 23.4millionduetothesettlementoflitigationin2024,impactingoverallprofitability[98].−FundsFromOperations(FFO)forthethreemonthsendedSeptember30,2024,was23.4 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 6.439millioninthesameperiodof2023,indicatingimprovedoperationalperformance[111].CashFlowandLiquidity−Netcashprovidedbyoperatingactivitiesincreasedto6.439 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 7.846millioninthesameperiodof2023,avarianceof7.846 million in the same period of 2023, a variance of 9.013 million[103]. - Cash used in investing activities decreased by 17.332million,primarilyduetoareductionindevelopmentandrenovationcosts[104].−ThecompanyanticipatesthatcashandcashequivalentsasofSeptember30,2024,willbesufficienttomeetallcashrequirements,supportedbypropertyoperationsandrefinancingactivities[102].LegalandSettlementMatters−Asettlementagreementrequiredthecompanytopay17.332 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 23.4milliontoClapperbyOctober31,2024,whichhasbeencompleted[116].−Thelitigationinvolveda23.4 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].