Edgar Filing: AMERICAN REALTY INVESTORS INC

Form 8-K/A

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

AMENDMENT NO. 1

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

August 11, 2003

Date of Report (Date of Earliest Event Reported)

AMERICAN REALTY INVESTORS, INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada		1-15663		75-2847135
(State of Incorporation)		(Commission File No.)		(IRS Employer Identification No.)

1800 Valley View Lane, Suite 300, Dallas, TX		75234-8922
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code:

(469) 522-4200

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

In 2003, American Realty Investors, Inc. (“ARI”) has sold a significant amount of its properties, as follows:

Sale Date	Property	Location	Acres/Units Rooms/Sq. Ft.	Sales Price ($ In Thousands)		Gain/(Loss) $ In Thousands)			% Of ARI’s Assets	Purchaser
01/17/03	Seville	Tallahassee, FL	62	$	2,795	$	489		0.24%	Seville Apartments, LLC
01/21/03	Bay Anchor	Panama City, FL	12		369		143		0.02%	Bay Anchor, LLC
02/14/03	Rolling Hills	Tallahassee, FL	134		5,061		1,182		0.43%	Rolling Hills Apartments, LLC
02/28/03	Northside Villas	Tallahassee, FL	81		5,575		915		0.54%	Northside Villas, LLC
03/20/03	Georgetown	Panama City, FL	44		1,175		72		0.15%	Georgetown Apartments of Panama City, Ltd.
05/02/03	Greenbriar	Tallahassee, FL	50		1,700		1,025		0.08%	Greenbriar Partners, LLC
05/30/03	Regency	Lincoln, NE	106		4,880		2,815		0.19%	Regency Associates, LP
06/11/03	Lake Chateau	Thomasville, GA	98		1,600		147		0.20%	Abbey Lake Partners, LLC
06/24/03	Pinecrest	North Augusta, SC	120		2,707		(304	)	0.41%	Augusta Plans and Management, Inc.
08/21/03	Landings & Marina	Pensacola, FL	52		1,825		490		0.18%	Landings of Pensacola, LLC

08/11/03	Encino Executive Plaza	Encino, CA	177,211 Sq. Ft.		37,040		(2	)	5.44%	16501 Ventura, LLC

03/11/03	Grand Hotel Sofia	Sofia, Bulgaria	136 Rooms		24,750		(88	)	3.45%	GORT Securities Limited
05/01/03	Clarion KC Airport Hotel	Kansas City, MO	196 Rooms		5,312		(101	)	0.74%	One Realco Hotel Investors, Inc.
08/22/03	Williamsburg Hospitality House	Williamsburg, VA	296 Rooms		19,500		0		2.72%	One Realco Hotel Investors, Inc.

02/26/03	Katrina	Palm Desert, CA	89.3		8,550		(40	)	1.15%	La Quinta Village Business Center, LLC; Lost Horse Mountain, LLC

03/26/03	Mason Goodrich	Houston, TX	8.0		210		(149	)	0.05%	Donald C. Carter
06/20/03	Mason Goodrich	Houston, TX	1.6		209		113		0.01%	Psychiatric Enterprises, Ltd.
06/27/03	Mason Goodrich	Houston, TX	7.7		900		466		0.05%	MCTK Partners Investments, LP
07/30/03	Vista Ridge	Lewisville, TX	14.5		2,250		622		0.21%	Don Valk

				$	126,408	$	7,795		16.26%

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

Proforma statements of operations are presented for the year ended December 31, 2002, and the six months ended June 30, 2003. The proforma statements of operations present ARI’s operations as if the transactions described above had occurred at January 1 of each of the periods presented. A proforma balance sheet as of June 30, 2003, is also presented. The proforma balance sheet presents the property sales described above, as if they had occurred at January 1, 2003.

AMERICAN REALTY INVESTORS, INC.

PROFORMA COMBINED CONSOLIDATED BALANCE SHEET

JUNE 30, 2003

	Actual ⁽¹⁾			Landings & Marina ⁽²⁾			Encino ⁽²⁾			Williamsburg ⁽²⁾			Vista Ridge ⁽²⁾			Totals
	(dollars in thousands)
*ASSETS*

Real Estate Held for Investment	$	1,065,063		$	(1,299	)	$	—		$	(22,774	)	$	—		$	1,040,990
Less: Accumulated Depreciation		(177,008	)		42			—			3,717			—			(173,249	)

		888,055			(1,257	)		—			(19,057	)		—			867,741

Real Estate Held for Sale		215,431			—			(35,716	)		—			(1,479	)		178,236

Notes and Interest Receivable
Performing		69,183			—			—			—			—			69,183
Non-Performing		7,937			—			—			—			—			7,937

		77,120			—			—			—			—			77,120
Less: Allowance for Estimated Losses		(4,833	)		—			—			—			—			(4,833	)

		72,287			—			—			—			—			72,287

Net Pizza Parlor Equipment		8,598			—			—			—			—			8,598

Marketable Equity Securities, at Market Value		5,081			—			—			—			—			5,081
Cash and Cash Equivalents		4,949			(2	)		(431	)		(312	)		—			4,204
Investments in Equity Investees		4,721			—			—			—			—			4,721
Goodwill, Net of Accumulated Amortization		11,858			—			—			—			—			11,858
Other Intangibles, Net of Accumulated Amortization		1,553			—			—			—			—			1,553
Other Assets		74,554			(38	)		9,457			2,416			548			86,937

Total Assets	$	1,287,087		$	(1,297	)	$	(26,690	)	$	(16,953	)	$	(931	)	$	1,241,216


*LIABILITIES AND EQUITY*

Notes and Interest Payable	$	873,181		$	(1,165	)	$	—		$	(12,332	)	$	(1,361	)	$	858,323
Liabilities Related to Assets Held for Sale		179,724			—			(33,179	)		—			—			146,545
Margin Borrowings		5,900			—			—			—			—			5,900
Other Liabilities		107,295			(17	)		(1,140	)		(3,415	)		(28	)		102,695

		1,166,100			(1,182	)		(34,319	)		(15,747	)		(1,389	)		1,113,463

Minority Interest		57,119			—			—			—			—			57,119

Stockholders’ Equity
Preferred Stock		4,754			—			—			—			—			4,754
Common Stock		114			—			—			—			—			114
Paid-In Capital		92,833			—			—			—			—			92,833
Accumulated (Deficit)		(23,909	)		(115	)		7,629			(1,206	)		458			(17,143	)
Treasury Stock		(9,924	)		—			—			—			—			(9,924	)

		63,868			(115	)		7,629			(1,206	)		458			70,634

Total Liabilities and Equity	$	1,287,087		$	(1,297	)	$	(26,690	)	$	(16,953	)	$	(931	)	$	1,241,216

⁽¹⁾

Includes properties sold prior to June 30, 2003.

⁽²⁾

Assumes sale by ARI on January 1, 2003.

AMERICAN REALTY INVESTORS, INC.

PROFORMA COMBINED STATEMENT OF OPERATIONS ^{(1) (2)}

SIX MONTHS ENDED JUNE 30, 2003

	Actual			Apartments ⁽³⁾			Commercial ⁽⁴⁾			Hotel ⁽⁵⁾			Land ⁽⁶⁾			Proforma
	(dollars in thousands, except per share)
Revenue
Rents	$	72,413		$	(162	)	$	—		$	(3,271	)	$	—		$	68,980
Property Operations		49,648			(84	)		—			(2,655	)		—			46,909

		22,765			(78	)		—			(616	)		—			22,071
Land Operations
Sales		12,103			—			—			—			2,250			14,353
Cost of Sales		11,070			—			—			—			1,628			12,698
Recognition of Previously Deferred Gain		19,897			—			—			—			—			19,897

Gain on Land Sales		20,930			—			—			—			622			21,552

Pizza Parlor Operations
Sales		15,937			—			—			—			—			15,937
Cost of Sales		12,765			—			—			—			—			12,765

Gross Margin		3,172															3,172

Income from Operations		46,867			(78	)		—			(616	)		622			46,795

Other Income
Interest and Other		5,888			—			—			—			—			5,888
Equity (Loss) in Equity Investees		(4,075	)		—			—			—			—			(4,075	)

		1,813			—			—			—			—			1,813

Other Expense
Interest		31,793			(46	)		—			(754	)		—			30,993
Depreciation		9,789			(16	)		—			(371	)		—			9,402
Discount on Sale of Notes Receivable		1,558			—			—			—			—			1,558
General and Administrative		10,694			—			—			—			—			10,694
Advisory Fees		4,728			(36	)		(185	)		(142	)		(13	)		4,352
Write-Down of Assets Held for Sale		2,352			—			—			—			—			2,352
Minority Interest		1,270			—			—			—			—			1,270

		62,184			(98	)		(185	)		(1,267	)		(13	)		60,621

Net Income (Loss) from Continuing Operations	$	(13,504	)	$	20		$	185		$	651		$	635		$	(12,013	)

Basic and Diluted Earnings Per Share Net Loss from Continuing Operations	$	(1.23	)													$	(1.10	)

Weighted Average Common Shares Used in Computing Earnings Per Share	$	10,945,928														$	10,945,928

⁽¹⁾

The Proforma Combined Statement Of Operations assumes that each property was sold by ARI on January 1, 2003.

⁽²⁾

Operating results for sold properties are their actual operating results from January 1 to their respective dates of sale. Rents, property operations, interest expense and depreciation for non-land properties sold prior to August 15, 2003 were excluded from the actual results of continuing operations at June 30, 2003.

⁽³⁾

Includes the Seville and Bay Anchor Apartments sold in January 2003, Rolling Hills and Northside Villas apartments sold in February 2003, Georgetown Apartments sold in March 2003, Greenbriar and Regency Apartments sold in May 2003, Lake Chateau and Pinecrest Apartments sold in June 2003, and Landings & Marina Apartments sold in August 2003.

⁽⁴⁾

Includes the Encino Executive Plaza sold in August 2003.

⁽⁵⁾

Includes the Grand Hotel Sofia sold in March 2003, the Clarion Kansas City Airport Hotel sold in May 2003, and the Williamsburg Hospitality House sold in August 2003.

⁽⁶⁾

Includes the partial sale of the Katrina land parcel in February 2003, the partial sale of the Mason Goodrich land parcel in March and June 2003, and the partial sale of the Vista Ridge land parcel in July 2003.

AMERICAN REALTY INVESTORS, INC.

PROFORMA COMBINED STATEMENT OF OPERATIONS ^{(1) (2)}

YEAR ENDED DECEMBER 31, 2002

	Actual			Apartments ⁽³⁾			Commercial ⁽⁴⁾			Hotel ⁽⁵⁾			Land ⁽⁶⁾			Proforma
	(dollars in thousands, except per share)
Revenue
Rents	$	89,543		$	(2,450	)	$	(3,848	)	$	(11,498	)	$	—		$	71,747
Property Operations		67,701			(1,461	)		(2,222	)		(8,168	)		—			55,850

		21,842			(989	)		(1,626	)		(3,330	)		—			15,897
Land Operations
Sales		127,750			—			—			—			12,119			139,869
Cost of Sales		75,718			—			—			—			11,106			86,824
Deferral of gains on Current Period Sales		36,135			—			—			—			—			36,135
Recognition of Previously Deferred Gain		830			—			—			—			—			830

Gain on Land Sales		16,727			—			—			—			1,013			17,740

Pizza Parlor Operations
Sales		36,741			—			—			—			—			36,741
Cost of Sales		29,991			—			—			—			—			29,991

Gross Margin		6,750			—			—			—			—			6,750

Income from Operations		45,319			(989	)		(1,626	)		(3,330	)		1,013			40,387

Other Income
Interest and Other		8,590			—			—			—			—			8,590
Equity (Loss) in Equity Investees		(20,914	)		—			—			—			—			(20,914	)
Loss on Sale of Investments in Equity Investees		(286	)		—			—			—			—			(286	)

		(12,610	)		—			—			—			—			(12,610	)
Other Expense
Interest		57,689			(695	)		(2,621	)		(1,873	)		—			52,500
Depreciation		10,234			(233	)		(1,138	)		(951	)		—			7,912
General and Administrative		12,479			—			—			—			—			12,479
Advisory Fees		5,899			(145	)		(316	)		(359	)		(78	)		5,001
Litigation Settlement		916			—			—			—			—			916
Write-Down of Assets Held for Sale		4,171			—			—			—			—			4,171
Minority Interest		1,346			—			—			—			—			1,346

		92,734			(1,073	)		(4,075	)		(3,183	)		(78	)		84,325

Net Income (Loss) from Continuing Operations	$	(60,025	)	$	84		$	2,449		$	(147	)	$	1,091		$	(56,548	)

Basic and Diluted Earnings Per Share Net Loss from Continuing Operations	$	(5.28	)													$	(4.97	)

Weighted Average Common Shares Used in Computing Earnings Per Share	$	11,375,127														$	11,375,127

⁽¹⁾

The Proforma Combined Statement Of Operations assumes that each property was sold by ARI on January 1, 2002.

⁽²⁾

Operating results for sold properties are their actual operating results for 2002. Rents, property operations, interest expense and depreciation for non-land properties sold prior to April 1, 2003 were excluded from the actual results of continuing operations at December 31, 2002.

⁽³⁾

⁽⁴⁾

Includes the Encino Executive Plaza sold in August 2003.

⁽⁵⁾

Includes the Grand Hotel Sofia sold in March 2003, the Clarion Kansas City Airport Hotel sold in May 2003, and the Williamsburg Hospitality House sold in August 2003.

⁽⁶⁾

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

	AMERICAN REALTY INVESTORS, INC.

September , 2003	By:	/s/ Ronald E. Kimbrough
Date		Ronald E. Kimbrough Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer and Acting Principal Executive Officer)