American Realty Investors(ARL) - 2022 Q3 - Quarterly Report

Property Sales and Gains - The company sold a total of 45 properties for $1.8 billion, resulting in a gain on sale of $738.7 million[112] - The company recorded a gain on the sale of 600 Las Colinas, amounting to $27.3 million from a sale price of $74.8 million[106] - During the nine months ended September 30, 2022, the company sold 26.9 acres of land for $5.1 million, resulting in gains of $4.2 million[106] Development and Renovation Expenditures - The company spent $15.7 million on the ongoing development of Windmill Farms in 2021, with an additional $3.7 million spent in the nine months ended September 30, 2022[110] - The company expects to complete renovations on Landing Bayou, a 240-unit multifamily property, by the end of 2022, after incurring $5.0 million in capital expenditures funded by insurance proceeds[110] Loans and Financial Management - The company extended its $1.2 million loan on Athens to August 28, 2023, and extended the maturity of the Windmill Farms loan until February 28, 2023[108] - The company plans to use proceeds from the VAA Sale Portfolio for additional investments in income-producing real estate, debt repayment, and general corporate purposes[114] - The company anticipates that cash and cash equivalents as of September 30, 2022, will be sufficient to meet all cash requirements[126] - The company plans to selectively sell land and income-producing assets to meet liquidity requirements[126] Revenue and Income Performance - Revenue for the multifamily segment decreased to $2.85 billion in Q3 2022 from $3.70 billion in Q3 2021, a decline of 23%[121] - Revenue for the commercial segment decreased to $4.72 billion in Q3 2022 from $5.93 billion in Q3 2021, a decline of 20%[121] - Net income increased by $359.2 million in Q3 2022 compared to Q3 2021, primarily due to a reduction in interest expenses and an increase in gains from foreign currency transactions[123] - Funds From Operations (FFO) for Q3 2022 was $14.92 million, compared to $1.15 million in Q3 2021, indicating a significant improvement[133] Joint Ventures and Tax Provisions - The increase in income from joint ventures was primarily due to the gain on the sale of the VAA Sale Portfolio in 2022[124] - The company experienced a $89.1 million increase in tax provision due to the sale of the VAA Sale Portfolio in 2022[124] Operating Expenses - Operating expenses for the multifamily segment decreased to $1.97 billion in Q3 2022 from $2.07 billion in Q3 2021, a reduction of 5%[121] Market Conditions - The company anticipates no significant decrease in rental revenue despite a temporary decline in occupancy due to the COVID-19 pandemic[103] - The company recorded a loss of $29.6 million on the remeasurements of certain assets related to its investment in VAA[111] - The company has nine notes receivable for multifamily property development, with one project in construction and seven stabilized as of September 30, 2022[111]