Transcontinental Realty Second Quarter, Six Months 2000 Operating Income Rises


DALLAS, Aug. 14, 2000 (PRIMEZONE) -- Transcontinental Realty Investors, Inc. (NYSE:TCI) announced Monday that increased property operations and interest expenses resulted in 2000 second quarter and six month net incomes of $5.8 million and $10.1 million, or $.67 and $1.17 per share, on revenues of $34.8 million and $69.3 million as compared to $7.6 million and $7.9 million or $1.96 and $2.03 per share, on revenues of $20.6 million and $39.7 million for same periods in 1999. Operating income for the second quarter and six months of 2000 increased by $6.3 million and $13.2 million over 1999 same period levels.

Income from operations rose to $16.2 million and $31.9 million in the second quarter and six months of 2000, compared to $9.9 million and $18.7 million for the same periods in 1999 due to increased rents. Rental income growth resulted from the purchase of 14 income producing properties in 1999-2000, properties gained through merger with Continental Mortgage and Equity Trust and the completion of construction of apartments, partially offset by sales of 13 properties in 1999 and 2000.

Interest and other income in the second quarter and six months of 2000 increased to $588,000 and $922,000 from $38,000 and $140,000 in 1999. The revenue growth is due to gaining two mortgage notes receivable in the CMET merger, as well as TCI funding two loans in second quarter 2000 and providing purchase money financing for two property sales in 1999. The 2000 increase was partially offset by equity in losses of equity investees of $299,000 and $292,000 during the periods, as compared to equity in income of equity investees of $479,000 and $504,000 in reported in 1999.

The second quarter 2000 gain on the sale of real estate approximated those of second quarter 1999, but the $17.8 million six month 2000 gain compared favorably to the $10.2 million reported in 1999. Gains in 2000 were realized from sales of four apartments and one hotel, a previously deferred gain on a land parcel sold in 1999 and TCI's share of a gain from an equity affiliate.

Total expenses for second quarter and six month 2000 were $ 37.9 million and $77 million, as compared to $21.3 million and $42.1 million for the same periods in 1999 due to properties purchased, acquired by merger and construction of apartments. The increase was partially offset by property sales in 1999 and 2000.


 -- Operations expenses were $18.3 million and $36.7 million, up from
     $10.2 million and $20.5 million in 1999. 
 
 -- Interest expenses were $11.9 million and $23.1 million, up from 
    $6.2 million and $12.4 million in 1999 due to debt incurred or 
    assumed on the 1999-2000 acquisitions, refinancings where debt 
    balances were increased and the merger.
 
 -- Depreciation increased to $4.2 million and $9.5 million, from 
    $3 million and $5.8 million in 1999.
 
 -- The advisory fees paid to TCI's advisor rose due to increases in 
    gross assets in the three and six months of 2000.  The net income 
    fees decreased in the second quarter, but increased in the first 
    six months of 2000 due to an increase in net income.
 
 -- General and administrative expense was $1.7 million and 
    $4.4 million, up from $571,000 and $1.2 million in 1999, mostly 
    due to increased legal and other professional fees.

Funds from operations (FFO) for second quarter and six months 2000 declined to $1.1 million and $1.8 million from $2.3 million and $3.6 million for the same periods last year. FFO is defined as net income minus extraordinary gains and gains from the sale of property, plus depreciation and amortization.

Transcontinental Realty Investors, Inc., a Dallas-based real estate investment trust, invests in real estate through direct equity ownership and partnerships nationwide.


                            FINANCIAL HIGHLIGHTS
         (dollars in thousands, except share and per share data)
                             Three months ended      Six months ended
                                 June 30,               June 30,
                              2000       1999       2000        1999
 
 Income from rents          $34,559  $  20,073   $  68,600   $ 39,166
 Expense fro
  operations                 18,321     10,158      36,171     20,478
    Operating income         16,238      9,915      31,883     18,688
 
 Other income               $   289  $     517   $     700   $    644
 Other expense               19,608     11,117      40,259     21,596
 Gain on sale of
  real estate                 8,856      8,283      17,807     10,151
                            (10,463)    (2,317)    (21,752)   (10,801)
 
 Net Income                 $ 5,775  $   7,598   $  10,131  $   7,887
 Preferred dividend
  requirement                    (7)        (7)        (14)       (14)
 
 Net income
  applicable to
  Common shares             $ 5,768  $   7,591   $  10,117  $   7,873
 
 Earnings Per Share
   Net income               $   .67  $    1.96   $    1.17  $    2.03
 
 Weighted average common
   shares used to compute
   earnings per share     8,629,504  3,879,946   8,628,496  3,879,209
 
 Funds from operations      $ 1,118  $   2,277   $   1,776  $   3,582
 
CONTACT:  Phyllis Wolper
          Director, Investor Relations
          (214) 692-4902 (800) 400-6407