American Spectrum Realty Reports Net Income of $9.4 Million for Second Quarter
HOUSTON, -- American Spectrum Realty, Inc. /quotes/zigman/1485509 AQQ +3.09% ("the Company"), a real estate investment, management and leasing company headquartered in Houston, Texas, announced today its results for the quarter ended June 30, 2011.
Net income attributable to common stockholders for the three months ended June 30, 2011 was $9.4 million, or $3.18 per share, compared to a net loss attributable to common stockholders for the three months ended June 30, 2010 of $2.2 million, or $0.74 per share (restated from $0.70 per share). The net income for the quarter ended June 30, 2011 included income from discontinued operations of $17.5 million.
Third party management and leasing revenue increased by approximately $0.3 million for the three months ended June 30, 2011 when compared to the three months ended June 30, 2010. The increase was due to an increase in third party management and leasing revenues attributable to the Company's third party management and leasing contracts.
The Company recorded income from discontinued operations of $17.5 million for the second quarter of 2011 compared to $0.5 million for the second quarter of 2011. The income from discontinued operations for the second quarter of 2010 was attributable to the sale of 7700 Irvine Center.
Rental revenue for the period increased by $10.6 million, or 154%, in comparison to the prior period. The increase in rental revenue was primarily due to the consolidation of variable interest entities ("VIE"), which resulted in additional rental revenues of approximately $11.1 million. Rental revenue for owned by the company other than through VIES properties decreased by $0.5 million. This decrease was attributable to a decrease in rental revenue for properties owned for the full three months ended June 30, 2011 and June 30, 2010 of approximately $0.9 million. This decrease was primarily due to a decrease in occupancy. The weighted average occupancy of owned properties decreased from 82% at June 30, 2010 to 75% at June 30, 2011. The properties owned in Houston had a weighted average occupancy of 81% at June 30, 2011. The decrease in rental revenue was partially offset by the acquisition of two properties in the second quarter of 2010, which accounted for an increase in rental revenue of $0.4 million.
The Company also recognized other income of $4.8 million during the three months ended June 30, 2011, primarily due to a $4.2 million gain on litigation settlement.
The Company's Funds From Operations (FFO), a widely accepted supplemental measure of REIT performance established by the National Association of Real Estate Investment Trusts, was $4.0 million for the six months ended June 30, 2011 compared to $0.1 million for the six months ended June 30, 2010. The Company's business is the ownership, operation and management of real estate. It believes that FFO is helpful to investors when measuring operating performance because it excludes various items that are considered in the determination of net income or loss that do not relate to or are not indicative of operating performance, such as gains or losses from sales of operating properties and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. The following table reflects the reconciliation of FFO to net income (loss) attributable to the Company, the most directly comparable Generally Accepted Accounting Principles measure, for the six months ended June 30, 2011 and June 30, 2010 (in thousands):
The increase in FFO for the six months ended June 30, 2011 in comparison to the six months ended June 30, 2010 was primarily due to the gain recognized on litigation settlement.
American Spectrum Realty, Inc. is a real estate investment company that owns, through an operating partnership, 30 office, industrial and retail properties aggregating approximately 2.8 million square feet in California, Texas, Arizona and the Midwest, and has been publicly traded since 2001. American Spectrum Realty Management, LLC, a wholly-owned subsidiary of the Company's operating partnership, manages and leases all properties owned by American Spectrum Realty, Inc. For more information, visit www.americanspectrum.com or call 888-315-ASRM.
Certain matters discussed in this release are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including the risks and uncertainties of acquiring, owning, operating and disposing of real estate. Such risks and uncertainties are disclosed in the Company's past and current filings with the U.S. Securities and Exchange Commission.