American Realty Reports First Quarter 2001 Net Income of $.17 vs. Loss of $.58 in 2000


DALLAS, May 15, 2001 (PRIMEZONE) -- American Realty Investors, Inc. (NYSE:ARL) today announced that increased gains on sales of land and real estate and decreased expenses produced a first quarter 2001 net income of $2.4 million, or $.17 per share, on revenue of $41.5 million, as compared to a net loss of $5.7 million, or $.58 per share, on revenue of $45.2 million for the first quarter of 2000.

Revenue for first quarter 2001 decreased by $3.7 million from the comparable period in 2000, due to lower total rents, resulting from sales of nine apartments and four commercial properties in 2000, as well as lower other income, resulting from the payoff of notes receivable in 2000. In first quarter 2001:

-- Rents declined to $33.2 million, from $35.1 million in first quarter 2000. Hotel rents increased by $800,000, primarily due to the opening of a European hotel in 2001.

-- Pizza sales and cost of sales were comparable to first quarter 2000.

-- Interest income decreased to $384,000, from $2.2 million in first quarter 2000.

-- Gain on land sales was $3.8 million, from $2.4 million in first quarter 2000

-- Gain on real estate sales was $16.4 million, from $16.2 million in first quarter 2000.

-- Equity in income of investees decreased to a loss of $5,000, from income of $202,000 in 2000.

Total expenses for the three months ended March 31, 2001, decreased to $52.9 million, from $63.3 million in first quarter 2000, due to property and land sales and the merger of National Realty, L.P. into ARI in 2000. Property operations expense was comparable, with the completion of apartment construction and fire recovery in 2000 and the hotel opening in 2001 offsetting reductions due to the property sales.

In first quarter 2001:

-- Interest expense decreased to $18.1 million, from $20.2 million in first quarter 2000.

-- Depreciation decreased to $4.1 million, from $4.4 million in 2000.

-- General and administrative expense decreased to $2.9 million, from $4.1 million in 2000.

-- Advisory fees approximated those in 2000.

-- Minority interest expense decreased to $1.6 million, from $9.4 million in 2000.

American Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S., including office buildings, apartments, hotels, shopping centers, and developed and undeveloped land. The company also has interests in mortgage loans and real estate-related entities. For more information on the company, go to www.amrealtytrust.com .



                     AMERICAN REALTY INVESTORS, INC. 
                           FINANCIAL HIGHLIGHTS
        (dollars in thousands, except share and per share data)

                                        Three months ended March 31,
                                              2001             2000

 Income from rents                     $     33,213     $     35,079
 Expense from operations                     23,451           23,965
    Operating income                          9,762           11,114

 Land sales                                  20,490           10,609
 Cost of sales                               16,701            8,160
    Gain on land sales                        3,789            2,449

 Pizza sales                                  7,826            7,872
 Cost of sales                                6,422            6,488
    Gross margin                              1,404            1,384

 Income from operations                      14,955           14,947

 Other income                                   412            2,543
 Other expense                               29,403           39,367
 Gain on sale of real estate                 16,426           16,154

 Net income (loss)                            2,390           (5,723)
 Preferred dividend requirement                (642)            (508)
 Net (loss) applicable to
    Common shares                      $      1,748     $     (6,231)

 Earnings Per Share
    Net (loss)                         $        .17     $       (.58)

 Weighted average common
    shares used to compute
    earnings per share                   10,104,268       10,759,472


            

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