DALLAS, May 15, 2000 (PRIMEZONE) -- National Realty, L.P. (AMEX:NLP) Monday announced that increased interest income, reduced expenses and a gain on sales of real estate produced first quarter 2000 net income of $22.2 million, or $3.44 per unit, on revenue of $17 million, as compared to net income of $17.9 million, or $2.78 per unit, on revenue of $24 million in 1999.
First quarter 2000 net income included $17 million in rents and $5.9 million in interest as compared to $24 million in rents and $3.8 million of interest in 1999. Operating income fell to $7.5 million as compared to $10.4 million. The decrease in rents and operating income was due to sales of 18 income producing properties in 1999 and 2000, but was partially offset by an increase in rental rates at both the apartments and commercial properties. The increase in interest income resulted from loans funded in 1999 and additional funding on existing loans, but was partially offset by decreases from loans paid off or paid down, loans converted to partnership interests and loans foreclosed on during 1999 and 2000.
Total expenses decreased in first quarter 2000 to $18.8 million, from $25.5 million in 1999, attributable to 1999-2000 property sales. Property operations expense recorded the largest decline to $9.6 million from $13.6 million. Depreciation, property taxes and insurance, utilities, property level payroll, repairs and maintenance and property management fees decreased. Interest expense fell by $1.2 million due to sales of properties subject to debt in 1999 and 2000, partially offset by interest on 1999-2000 loans secured by unencumbered properties and land, and the refinancing of mortgages where the loan balance was increased. No incentive disposition fee was paid to NLP's general partner in first quarter 2000; a $948,000 fee was paid in 1999 relating to a property sale.
First quarter 2000 gains on sales of three apartments and a shopping center totaled $18.1 million compared to $15.7 million of gains on sales of three apartments in first quarter 1999.
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 second quarter when American Realty Investors, Inc. begins trading on the New York Stock Exchange under the symbol "ARL." For more information on NLP, go to the partnership's Web site at www.nationalrealty-lp.com.
FINANCIAL HIGHLIGHTS
(dollars in thousands, except unit and per unit data)
Three months ended March 31,
2000 1999
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Income from rents $ 17,025 $ 24,025
Expense from operations 9,573 13,599
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Operating income 7,452 10,426
Other income 5,924 3,791
Other expense 9,275 11,944
Gain on sale of real estate 18,083 15,667
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14,732 7,514
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Net income $ 22,184 $ 17,940
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Earnings Per Unit
Net income $ 3.44 $ 2.78
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Weighted average units of limited
partner interest used in
computing earnings per unit 6,321,522 6,321,527