ARL American Realty Investors Inc

American Realty Investors, Inc. (NYSE:ARL), a Dallas-based real estate investment company, today reported results of operations for the fourth quarter ended December 31, 2014. For the three months ended December 31, 2014, the Company reported net income applicable to common shares of $26.7 million or $1.91 per diluted earnings per share, as compared to net income applicable to common shares of $38.4 million or $3.33 per diluted earnings per share for the same period ended 2013.

For the twelve months ended December 31, 2014, we reported net income applicable to common shares of $28.8 million or $2.28 per diluted earnings per share, as compared to net income applicable to common shares of $38.8 million or $3.36 per diluted earnings per share for the same period ended 2013.

The current year net, income applicable to common shares of $28.8 million includes $17.6 million of depreciation expense, a credit of $3.6 million of litigation settlement expense and gains from the sales of real estate holdings of $62.4 million.

Management’s efforts to enhance the value of our overall portfolio has resulted in the continuing improvement in the Company’s results of operations. We continue to see growth in the multifamily market with increasing rents, stable operating expenses, and an occupancy rate over 94%. We are diligent in our mission to provide high-quality living opportunities to our tenants.

In our commercial portfolio, we are seeing the benefit of our efforts with new leases executed and increasing rents as first year concessions expire. We believe that we will continue to see growth in our commercial portfolio as the economic conditions improve and we capitalize on the influx of attractive prospects in the pipeline.

Our ability to take advantage of lower-interest rate mortgages available has reduced our monthly obligations and increased cash flow within our multifamily portfolio.

The positive results of operations has allowed the Company to invest in mortgage receivables in various multifamily projects not under the Company’s ownership. We will continue to invest in the multifamily market, as conditions are optimal for achieving a high return on our investment.

In the current period, rental and other property revenues increased within the apartment portfolio by $2.5 million mainly due to increased rental rates and high occupancy. The commercial portfolio decreased by $3.8 million primarily due to a lease termination fee that was received in the prior year.

Property operating expenses were $42.1 million for the twelve months ended December 31, 2014, representing an increase of $2.8 million as compared to the same period in the previous year. Operating expenses have remained consistent with prior periods due to labor efficiencies and improvements in preventative maintenance across the portfolio, with only an increase in real estate taxes as a result of the increase in the value of our portfolio and some non-recurring repair projects completed in the current year.

Litigation settlement expense was a credit of $3.6 million for the twelve months ended December 31, 2014, representing a decrease of $23.9 million as compared to the same period in the previous year. The majority of the credit to the current year litigation expense was due to a settlement with the lender relating to one of the commercial properties in which the balance in the amount of $3.5 million was forgiven. Matters were settled in the prior year in order to avoid future litigation and legal expenses.

About American Realty Investors, Inc.

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, shopping centers, and developed and undeveloped land. The Company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. The Company also holds mortgage receivables. For more information, visit the Company’s website at www.americanrealtyinvest.com.

  AMERICAN REALTY INVESTORS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS             For the Years Ended December 31, 2014 2013 2012 (dollars in thousands, except per share amounts) Revenues: Rental and other property revenues (including $701, $670 and $587 for the year ended 2014, 2013 and 2012, respectively, from related parties) $ 79,412 $ 80,750 $ 81,849   Expenses: Property operating expenses (including $645, $699 and $879 for the year ended 2014, 2013 and 2012, respectively, from related parties) 42,124 39,318 40,000 Depreciation 17,593 15,954 14,873 General and administrative (including $3,628, $3,646 and $3,539 for the year ended 2014, 2013 and 2012, respectively, from related parties) 10,282 7,919 6,037 Provision on impairment of notes receivable and real estate assets - 18,980 2,330 Net income fee to related party 3,669 4,089 180 Advisory fee to related party   8,943     10,166     10,182   Total operating expenses   82,611     96,426     73,602   Operating income (loss) (3,199 ) (15,676 ) 8,247   Other income (expense): Interest income (including $19,029, $19,110 and $14,182 for the year ended 2014, 2013 and 2012, respectively, from related parties) 20,054 19,445 14,612 Other income (including $0, $0 and $6,000 for the year ended 2014, 2013 and 2012, respectively, from related parties) 1,415 10,163 7,770 Mortgage and loan interest (including $3,660, $3,927 and $3,692 for the year ended 2014, 2013 and 2012, respectively, from related parties) (35,416 ) (36,158 ) (38,224 ) Deferred borrowing costs amortization (2,556 ) (2,952 ) (684 ) Loan charges and prepayment penalties (2,854 ) (5,557 ) (3,574 ) Loss on the sale of investments (92 ) (283 ) (118 ) Earnings from unconsolidated subsidiaries and investees 347 391 372 Litigation settlement   3,591     (20,313 )   (175 ) Total other expenses   (15,511 )   (35,264 )   (20,021 ) Loss before gain (loss) on land sales, non-controlling interest, and taxes (18,710 ) (50,940 ) (11,774 ) Gain (loss) on land sales   561     (455 )   5,475   Loss from continuing operations before tax (18,149 ) (51,395 ) (6,299 ) Income tax benefit (expense)   20,413     40,513     (144 ) Net income (loss) from continuing operations   2,264     (10,882 )   (6,443 ) Discontinued operations: Loss from discontinued operations (3,557 ) (2,634 ) (9,297 ) Gain on sale of real estate from discontinued operations 61,879 98,951 8,885 Income tax benefit (expense) from discontinued operations   (20,413 )   (33,711 )   144   Net income (loss) from discontinued operations 37,909 62,606 (268 ) Net income (loss) 40,173 51,724 (6,711 ) Net (income) loss attributable to non-controlling interests   (9,288 )   (10,448 )   1,126   Net income (loss) attributable to American Realty Investors, Inc. 30,885 41,276 (5,585 ) Preferred dividend requirement   (2,043 )   (2,452 )   (2,452 ) Net income (loss) applicable to common shares $ 28,842   $ 38,824   $ (8,037 )   Earnings per share - basic Loss from continuing operations $ (0.71 ) $ (2.07 ) $ (0.67 ) Income (loss) from discontinued operations   2.99     5.43     (0.02 ) Net income (loss) applicable to common shares $ 2.28   $ 3.36   $ (0.69 )   Earnings per share - diluted Loss from continuing operations $ (0.71 ) $ (2.07 ) $ (0.67 ) Income (loss) from discontinued operations   2.99     5.43     (0.02 ) Net income (loss) applicable to common shares $ 2.28   $ 3.36   $ (0.69 )   Weighted average common shares used in computing earnings per share 12,683,956 11,525,389 11,525,389 Weighted average common shares used in computing diluted earnings per share 12,683,956 11,525,389 11,525,389     Amounts attributable to American Realty Investors, Inc. Loss from continuing operations $ (7,024 ) $ (21,330 ) $ (5,317 ) Income (loss) from discontinued operations   37,909     62,606     (268 ) Net income (loss) $ 30,885   $ 41,276   $ (5,585 )             AMERICAN REALTY INVESTORS, INC. CONSOLIDATED BALANCE SHEETS   December 31, December 31, 2014 2013 (dollars in thousands, except share and par value amounts) Assets Real estate, at cost $ 810,214 $ 799,698

Real estate held for sale at cost, net of depreciation ($0 in 2014 and $2,390 in 2013)

- 16,427 Real estate subject to sales contracts at cost, net of depreciation ($2,300 in 2014 and $1,949 in 2013) 19,026 27,598 Less accumulated depreciation   (129,477 )   (143,429 ) Total real estate 699,763 700,294 Notes and interest receivable Performing (including $139,466 in 2014 and $145,754 in 2013 from related parties) 149,484 153,275 Non-performing 3,161 3,140 Less allowance for estimated losses (including $15,537 in 2014 and $15,809 in 2013 from related parties)   (18,279 )   (19,600 ) Total notes and interest receivable 134,366 136,815 Cash and cash equivalents 12,299 16,437 Restricted cash 49,266 32,929 Investments in unconsolidated subsidiaries and investees 4,279 3,789 Receivable from related party 21,414 14,086 Other assets   44,111     38,972   Total assets $ 965,498   $ 943,322     Liabilities and Shareholders’ Equity Liabilities: Notes and interest payable $ 638,891 $ 618,930 Notes related to assets held for sale 1,552 17,100 Notes related to assets subject to sales contracts 18,616 23,012 Deferred revenue (including $72,564 in 2014 and $74,303 in 2013 from sales to related parties) 74,409 76,148 Accounts payable and other liabilities (including $11,024 in 2014 and $15,394 in 2013 to related parties)   52,442     73,271   785,910 808,461   Shareholders’ equity: Preferred stock, Series A: $2.00 par value, authorized 15,000,000 shares, issued and outstanding 2,461,252 and 3,353,954 shares in 2014 and 2013, respectively (liquidation preference $10 per share), including 900,000 shares in 2014 and 2013 held by ARL. Series K: $2.00 par value, authorized, issued and outstanding zero and 135,000 shares in 2014 and 2013, respectively (liquidation preference $22 per share) 3,126 4,908 Common stock, $0.01 par value, authorized 100,000,000 shares; issued 14,443,404 and 11,941,174 shares and outstanding 14,027,619 and 11,525,389 shares in 2014 and 2013, respectively; including 140,000 shares held by TCI (consolidated) in 2014 and 229,214 shares held by TCI (consolidated) in 2013. 141 115 Treasury stock at cost; 415,785 shares in 2014 and 2013 and 140,000 shares held by TCI (consolidated) as of 2014 and 229,214 shares held by TCI (consolidated) as of 2013 (6,395 ) (6,395 ) Paid-in capital 108,378 102,974 Retained earnings   19,090     (11,795 ) Total American Realty Investors, Inc. shareholders' equity 124,340 89,807 Non-controlling interest   55,248     45,054   Total equity   179,588     134,861   Total liabilities and equity $ 965,498   $ 943,322  

American Realty Investors, Inc.Investor RelationsGene Bertcher, 800-400-6407investor.relations@americanrealtyinvest.com