DALLAS, March 27, 2000 (PRIMEZONE) -- National Realty, L.P. (AMEX:NLP) Monday reported higher gains on sales of property, increased interest income, rising rental rates and a large reduction in operating expenses boosted 1999 net income to $124.8 million, or $19.36 per unit, on revenue of $104.7 million as compared to 1998 net income of $47.5 million, or $7.36 per unit, on revenue of $113.8 million. Fourth quarter 1999 contributed $41.9 million in net income, or $6.51 per unit, on revenue of $22.4 million as compared to fourth quarter 1998 net income of $21.2 million, or $3.28 per unit, on revenue of $28.2 million.
Contributing favorably to 1999 net income was a $114.4 million gain on the sale of real estate, an $11 million increase in interest income and a $24.7 million decrease in operating expenses. General and administrative expenses approximated those of 1998. Net income for 1998 included a $52.6 million gain on the sale of real estate and $6.7 million in interest income.
Rental income for 1999 fell by $20 million to $87 million, from $107.1 million in 1998, due to the sale of 14 apartments in 1999 and 10 apartments and two commercial properties in 1998. The decrease was partially offset by increased rental rates at the apartments and commercial properties in 1999. The partnership expects that rental income will decrease during 2000 due to continued sales of mature properties.
Interest expense increased to $27.2 million in 1999 from $26.7 million in 1998. Of the increase, $3.3 million was due to financing nine previously unencumbered income producing properties and seven notes receivable in 1999 and 1998, as well as the 1998 refinancing of 47 apartments. The increase was offset by a $4.3 million decrease due to loans paid off in 1998 and the sale of 24 properties subject to debt in 1999 and 1998. Interest expense is expected to decrease in 2000 as stabilized property sales continue.
Depreciation and most property operation expenses, including property management fees, declined in 1999 due to the sale of properties in 1999 and 1998. General and administrative expenses approximated those of 1998. Costs related to operations are expected to decline further in 2000 due to continued property sales.
National Realty, L.P. is a national real estate investment partnership engaged in the acquisition, financing, operation, and sale of real estate and real estate assets. As previously announced, at a special meeting held March 21, 2000, National Realty limited partners approved the combination with American Realty Trust, Inc. (NYSE:ARB) under ownership of a new company named American Realty Investors, Inc. In a tax-free exchange, unitholders will receive one share of the new company's common stock for each NLP unit held. ART holders will receive 0.91 shares of the new common stock for each common share of ART held. The reorganization and exchange of units is expected to occur in the next few weeks when American Realty Investors, Inc. begins trading on the New York Stock Exchange under the symbol "ARL." For more information concerning NLP, go to the partnership's Web site at www.nationalrealty-lp.com .
FINANCIAL HIGHLIGHTS
(in thousands, except unit and per unit data)
For the year ended For the quarter ended
Dec. 31, Dec. 31,
1999 1998 1999 1998
Revenue $ 104,654 $ 113,834 $ 22,433 $ 28,173
Expenses 94,258 118,932 20,947 25,355
Income (loss)
from operations 10,396 (5,098) 1,486 2,818
Gain on sale of
real estate 114,443 52,589 40,424 18,373
Net income $ 124,839 $ 47,491 $ 41,910 $ 21,191
Earnings per unit
Net Income $ 19.36 $ 7.36 $ 6.51 $ 3.28
Weighted average units
used to compute earnings
per unit 6,321,531 6,321,425 6,437,788 6,460,670
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CONTACT: Phyllis Wolper, Investor Relations
(800) 400-6407 / (214) 692-4800
investor.relations@bcminc.com