Financial Performance - For Q4 2024, American Realty Investors, Inc. reported a net loss attributable to common shares of $0.2 million or $0.01 per diluted share, a significant improvement from a net loss of $2.1 million or $0.13 per diluted share in Q4 2023[2][8]. - Total revenue for Q4 2024 was $12.0 million, down from $14.0 million in Q4 2023[11]. - Net operating loss decreased by $0.4 million from $2.2 million in Q4 2023 to $1.8 million in Q4 2024, attributed to a $2.4 million decrease in operating expenses[5]. - Operating expenses decreased from $16.2 million in Q4 2023 to $13.8 million in Q4 2024[11]. - The company reported interest income of $3.9 million in Q4 2024, compared to $1.6 million in Q4 2023[11]. Revenue and Occupancy - Rental revenues decreased by $1.6 million from $12.8 million in Q4 2023 to $11.2 million in Q4 2024, primarily due to a decrease in occupancy at commercial properties[4]. - Total occupancy was 81% as of December 31, 2024, with multifamily properties at 94% and commercial properties at 53%[7]. Legal and Financial Transactions - A settlement of $23.4 million was paid to resolve ongoing litigation, resulting in an accrued loss on real estate transactions of $23.4 million for the period[7]. - The company sold 30 single-family lots for $1.4 million, resulting in a gain on sale of $1.1 million[7]. Development Projects - A $27.5 million construction loan was obtained for the development of a 234-unit multifamily property in Dallas, expected to be completed in 2026[7].

Debt and Indebtedness - Total indebtedness as of December 31, 2024, was approximately $185.4 million, with 68% ($126.3 million) insured by HUD[55][56]. - The degree of indebtedness could impact the company's ability to secure additional financing for working capital, capital expenditures, or acquisitions[63]. - The company operates with a policy of incurring additional indebtedness only when advisable, which may include borrowing under a line of credit or issuing debt securities[63]. Operational Risks - The company faces risks associated with increased operating costs, including insurance, maintenance, and administrative costs, which could adversely affect cash flow and shareholder distributions[50]. - The company is reliant on third-party management companies for property operations, which may impact profitability if these managers do not perform effectively[48][49]. - The company has ongoing development projects, but construction costs may exceed estimates, affecting profitability and project completion timelines[51]. - The company may encounter challenges in leasing newly developed properties at budgeted rental rates, impacting expected financial results[56]. - The company may face competition from other real estate investors, which could drive up acquisition costs and impact property performance[55][61]. Market Vulnerability - The company operates in specific geographic areas in the Southern United States, making it vulnerable to adverse economic conditions in those markets[54]. - Rising interest rates could increase costs on variable rate debt, adversely affecting cash flow and the ability to refinance existing debt[58]. - The company may not be able to sell properties quickly due to the illiquid nature of real estate investments, which could limit cash flow responses to changing circumstances[60]. Partnership and Liability Issues - Potential bankruptcy of partners could leave the company liable for the liabilities of the venture[63]. - Partners may have inconsistent economic or business interests that conflict with the company's objectives[63]. - Governing agreements in partnerships may restrict the transfer of interests, potentially resulting in disadvantageous terms[63]. Tenant Relations - The company’s ability to attract and retain tenants is critical for cash flow, and adverse events affecting existing tenants could hinder this ability[45].

Financial Performance - Net income attributable to common shares for Q3 2024 was a loss of $17.5 million or $1.08 per diluted share, compared to a net income of $3.0 million or $0.18 per diluted share in Q3 2023[1][5]. - Total revenue for Q3 2024 was $11.6 million, down from $12.5 million in Q3 2023[7]. - Net operating loss for Q3 2024 was $2.1 million, consistent with the loss reported in Q3 2023[4]. - General and administrative expenses were $1.59 million in Q3 2024, slightly up from $1.58 million in Q3 2023[7]. - The weighted average common shares used in computing earnings per share remained constant at 16,152,043 for both Q3 2024 and Q3 2023[7]. Occupancy and Rental Revenue - Total occupancy as of September 30, 2024, was 79%, with multifamily properties at 95% and commercial properties at 48%[2]. - Rental revenues decreased by $0.8 million from $11.8 million in Q3 2023 to $11.1 million in Q3 2024, primarily due to lower occupancy in commercial properties[3]. - A new lease at Stanford Center, covering 45,000 square feet, is expected to increase occupancy by 14% and rent per square foot by 20% over recent expired leases[2]. Development and Financing - A $27.5 million construction loan was obtained for the development of a 234-unit multifamily property in Dallas, Texas, expected to be completed in 2026[2]. Legal and Settlement Issues - The company accrued a loss of $23.4 million related to the settlement of claims with David Clapper and related entities[2][5].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to________ Commission File Number 001-15663 AMERICAN REALTY INVESTORS, INC. (Exact Name of Registrant as Specified in Its Charter) Nevada ...

Financial Performance - Net income attributable to common shares increased to $1.2 million or $0.07 per diluted share for Q2 2024, compared to $0.1 million or $0.01 per diluted share in Q2 2023, representing a significant increase of 1,100%[2][5] - Net operating loss decreased by $2.6 million from $3.9 million in Q2 2023 to $1.3 million in Q2 2024, attributed to lower general and administrative expenses[4] - The company reported a net operating loss of $1.3 million for Q2 2024, a significant improvement compared to a loss of $3.9 million in Q2 2023[4] Revenue and Occupancy - Total revenue for the six months ended June 30, 2024, was $23.7 million, down from $23.9 million for the same period in 2023[8] - Rental revenues decreased by $0.2 million from $11.4 million in Q2 2023 to $11.2 million in Q2 2024, primarily due to a $0.5 million decrease in commercial properties[4] - Total occupancy rate was 78% as of June 30, 2024, with multifamily properties at 93% occupancy and commercial properties at 48%[3] Expenses - General and administrative expenses dropped from $3.7 million in Q2 2023 to $1.6 million in Q2 2024, a reduction of approximately 57%[8] - Interest income decreased from $7.9 million in Q2 2023 to $4.8 million in Q2 2024, a decline of about 39%[8] Investments and Financing - Equity in income from unconsolidated joint ventures increased from $0.3 million in Q2 2023 to $0.5 million in Q2 2024, a growth of approximately 71%[8] - The company replaced an existing loan on Forest Grove with a new $6.6 million loan at SOFR plus 1.85%, maturing on July 10, 2031[3]

Financing Activities - The company paid off $67.5 million of Series C bonds on January 31, 2023[90]. - A $33.0 million construction loan was secured on March 15, 2023, for the development of a 240-unit multifamily property in Lake Wales, Florida, with an expected total cost of approximately $55.3 million[93]. - A $25.4 million construction loan was entered into on November 6, 2023, for the development of a 216-unit multifamily property in McKinney, Texas, with an expected total cost of approximately $51.9 million[94]. - A $23.5 million construction loan was secured on December 15, 2023, for the development of a 216-unit multifamily property in Temple, Texas, with an expected total cost of approximately $49.6 million[95]. - The company extended the maturity of its loan on Windmill Farms to February 28, 2026, at an interest rate of 7.50%[90]. - The company spent $3.2 million on reimbursable infrastructure investments during 2024[92]. Development Costs - The company has incurred a total of $25.1 million in development costs for the Alera project as of June 30, 2024[93]. - The company has incurred a total of $11.8 million in development costs for the Merano project as of June 30, 2024[94]. - The company has incurred a total of $6.2 million in development costs for the Bandera Ridge project as of June 30, 2024[95]. Revenue and Income - Multifamily segment revenue increased by $269 million to $7,927 million in 2024 compared to $7,658 million in 2023, while commercial segment revenue decreased by $470 million to $3,261 million[103]. - Net income for the three months ended June 30, 2024, was $1,491 million, an increase of $1,188 million compared to $303 million in the same period of 2023[103]. - Funds From Operations (FFO) for the six months ended June 30, 2024, was $9,365 million, compared to $10,251 million in 2023, reflecting a decrease of $886 million[118]. Cash Flow - Net cash provided by operating activities was $3,364 million for the six months ended June 30, 2024, a variance of $11,819 million compared to $(8,455) million in 2023[111]. - Cash used in financing activities decreased by $132.9 million to $(2,354) million in 2024, primarily due to the repayment of bonds in 2023[112]. - The company anticipates sufficient cash and cash equivalents to meet all cash requirements as of June 30, 2024[108]. Expenses - Interest income decreased by $2,537 million to $2,881 million in 2024, primarily due to lower interest rates on UHF notes and Pillar Receivable[105]. - General, administrative, and advisory expenses decreased by $2,578 million to $3,289 million in 2024, attributed to reduced legal and auditing costs[105]. Future Plans - The company plans to continue funding liquidity needs through property operations, sales, and refinancing of existing mortgage notes[107]. - The multifamily segment's profit increase was driven by a $0.4 million rise from the Redevelopment Property due to lease-up[106]. Property Transactions - The company reported no Acquisition Properties or Disposition Properties for the comparison of the three and six months ended June 30, 2024, to the same periods in 2023[102].

Financial Performance - Net income attributable to common shares decreased by $1.2 million from $3.0 million in Q1 2023 to $1.8 million in Q1 2024, representing a 40% decline [5]. - Total revenue increased by $0.2 million from $11.7 million in Q1 2023 to $11.9 million in Q1 2024, a growth of approximately 1.7% [8]. - Net operating loss decreased by $1.6 million from $3.1 million in Q1 2023 to $1.5 million in Q1 2024, a reduction of approximately 51.6% [4]. - Earnings per share decreased from $0.18 in Q1 2023 to $0.11 in Q1 2024, a decline of approximately 38.9% [8]. Revenue Sources - Rental revenues rose by $0.3 million from $11.0 million in Q1 2023 to $11.3 million in Q1 2024, primarily driven by a $0.7 million increase in multifamily properties [4]. - Interest income decreased from $8.3 million in Q1 2023 to $5.7 million in Q1 2024, a decline of about 31.1% [8]. - Equity in income from unconsolidated joint ventures decreased from $2.4 million in Q1 2023 to $0.5 million in Q1 2024 [8]. Expenses and Financial Management - General and administrative expenses decreased from $3.2 million in Q1 2023 to $1.4 million in Q1 2024, a reduction of approximately 55.6% [8]. - The company extended the maturity of its loan on Windmill Farms to February 28, 2026, at an interest rate of 7.50% [3]. Occupancy Rates - Total occupancy was reported at 79% as of March 31, 2024, with multifamily properties at 94% and commercial properties at 49% [3].

Revenue and Income - Multifamily segment revenue increased to $8.053 million in Q1 2024 from $7.373 million in Q1 2023, a growth of approximately 9.2%[105] - Commercial segment revenue decreased to $3.226 million in Q1 2024 from $3.636 million in Q1 2023, a decline of approximately 11.3%[105] - Net income for Q1 2024 was $2.302 million, down from $4.219 million in Q1 2023, representing a decrease of about 45.5%[105] - Net income for the three months ended March 31, 2024, decreased by $1.9 million compared to the same period in 2023, primarily due to a decline in occupancy at Browning Place in the commercial segment[107] - Funds From Operations (FFO) for the three months ended March 31, 2024, was $4.98 million, down from $6.13 million in the same period in 2023[116] - FFO adjusted for the three months ended March 31, 2024, was $4.98 million, compared to $5.16 million in the same period in 2023[116] Expenses - Operating expenses for the multifamily segment rose to $4.219 million in Q1 2024, up from $3.708 million in Q1 2023, an increase of about 13.8%[105] - General, administrative, and advisory expenses decreased to $3.610 million in Q1 2024 from $5.566 million in Q1 2023, a reduction of approximately 35.2%[105] - Interest income decreased to $3.811 million in Q1 2024 from $5.155 million in Q1 2023, a decline of about 26.0%[105] - The decrease in interest income was $2.6 million, partially offset by a $1.2 million decrease in interest expense due to changes in interest rates and repayment of bonds[107] Development and Financing - The company incurred $18.9 million in development costs for the Lake Wales multifamily property as of March 31, 2024, with total expected costs of approximately $55.3 million[95] - A $33.0 million construction loan was secured for the Lake Wales development, which is expected to be completed in 2025[95] - The company entered into a $25.4 million construction loan for the Merano development, expected to be completed in 2025[96] - A total of $24.3 million is allocated for the development of 470 land lots in Windmill Farms, with completion expected over a two-year period starting Q3 2024[94] - The net cash used in financing activities decreased significantly by $87.67 million, primarily due to the repayment of bonds in 2023[111] - The company plans to selectively sell land and income-producing assets and refinance existing real estate debt to meet liquidity requirements[109] Cash Flow - Cash provided by operating activities increased to $3.87 million in Q1 2024 from $1.54 million in Q1 2023, a variance of $2.33 million attributed to a decrease in interest payments[110] - The company anticipates that cash and cash equivalents as of March 31, 2024, will be sufficient to meet all cash requirements, supported by cash generated from notes receivable and short-term investments[109] - The cash flow from investing activities changed by $35.8 million, mainly due to a $51.1 million increase in net purchases of short-term investments[111] Profitability - The multifamily segment saw a profit increase of $0.1 million due to the lease-up of the Redevelopment Property[107]

NEWS RELEASE Contact: American Realty Investors, Inc. Investor Relations FOR IMMEDIATE RELEASE Erik Johnson (469) 522-4200 investor.relations@americanrealtyinvest.com American Realty Investors, Inc. reports Earnings for Q4 2023 DALLAS (March 21, 2024) -- American Realty Investors, Inc. (NYSE:ARL) is reporting its results of operations for the quarter ended December 31, 2023. For the three months ended December 31, 2023, we reported net loss attributable to common shares of $2.1 million or $0.13 per diluted ...

Sales and Gains - The company sold a 50% ownership interest in Overlook at Allensville Phase II for $2.6 million, resulting in a gain of $1.4 million[79]. - The sale of 600 Las Colinas generated $74.8 million, with a gain of $27.3 million, and proceeds were used to pay off the mortgage[80]. - In 2022, the company sold 134.7 acres of land for $20.2 million, resulting in gains of $10.3 million[80]. - The company received $182.8 million from VAA as an initial distribution from the sale of the VAA Sale Portfolio, which totaled $1.8 billion[91]. - Gain on sale of land was $188 in 2023, significantly lower than $4,752 in 2022[115]. Development Projects - The company spent $5.0 million on the ongoing development of Windmill Farms, with an agreement to sell 276 lots for $13.1 million[85]. - A development agreement for a 240 unit multifamily property in Lake Wales is expected to cost approximately $55.3 million, funded partly by a $33.0 million construction loan[86]. - The company incurred a total of $16.9 million in development costs for the Lake Wales project as of December 31, 2023[86]. - A construction loan of $25.4 million was entered into for the development of Merano, expected to be completed in 2025[87]. - The company completed the restoration of Landing on Bayou Cane for a total cost of $16.7 million, primarily funded by insurance proceeds[89]. Financial Performance - Multifamily segment revenue increased to $32,608,000 in 2023 from $17,828,000 in 2022, a variance of $14,780,000[104]. - Operating expenses for the multifamily segment rose to $17,749,000 in 2023 from $9,524,000 in 2022, resulting in an operating income increase of $6,555,000[104]. - Commercial segment revenue decreased to $14,415,000 in 2023 from $16,252,000 in 2022, a decline of $1,837,000[104]. - Net income dropped significantly to $5,251,000 in 2023 from $475,317,000 in 2022, a decrease of $470,066,000[104]. - Interest income, net increased by $8,315,000, primarily due to an $8,000,000 decrease in interest expense and a $300,000 increase in interest income[104]. Funds and Cash Flow - Funds From Operations (FFO) for 2023 was $19,997,000 compared to $43,275,000 in 2022, reflecting a decrease of $23,278,000[115]. - The company anticipates sufficient cash and short-term investments to meet liquidity requirements through 2024[109]. - Cash used in operating activities decreased to $31,054,000 in 2023 from $45,386,000 in 2022, a variance of $14,332,000[111]. - Cash provided by investing activities fell to $26,813,000 in 2023 from $307,357,000 in 2022, a decrease of $280,544,000[112]. - The company plans to selectively sell land and income-producing assets to meet liquidity needs[109]. Income and Expenses - Net income attributable to the Company for 2023 was $3,968, compared to $373,349 in 2022, indicating a significant decrease[115]. - FFO-Basic and Diluted for 2023 was $19,997, down from $43,275 in 2022[115]. - FFO-adjusted for 2023 was $20,714, compared to $41,267 in 2022, reflecting a decline[115]. - Depreciation and amortization on consolidated assets increased to $13,646 in 2023 from $9,686 in 2022[115]. - Loss on early extinguishment of debt was $1,710 in 2023, down from $2,805 in 2022[115]. Asset Management - Loss (gain) on sale, remeasurement or write down of assets was $1,923 in 2023, compared to a gain of $(87,132) in 2022[115]. - Loss on foreign currency transactions was $(993) in 2023, an improvement from $(20,067) in 2022[115]. - Depreciation and amortization on unconsolidated joint ventures at pro rata share was $272 in 2023, down from $8,424 in 2022[115]. - Gain on sale of assets from unconsolidated joint venture at pro rata share was $(265,804) in 2022, with no corresponding figure for 2023[115].