DALLAS--(BUSINESS WIRE)--Income Opportunity Realty Investors, Inc. (NYSE American: IOR), a Dallas-based real estate investment company, today reported results of operations for the year ended December 31, 2017. For the year ended December 31, 2017, the Company reported net income of $1.5 million or ($0.36) per diluted earnings per share for the period ended December 31, 2017, as compared to a net income of $2.1 million or ($0.50) per share for the same period ended 2016.
Land held subject to a sales contract is our sole operating segment. There was no income generated from this segment for the years ended December 31, 2017 and December 31, 2016.
General and administrative expenses were $438,000 for the year ended December 31, 2017. This represents an increase of $42,000 compared to general and administrative expenses of $396,000 for the year ended December 31, 2016. This increase was primarily due to an increase in legal expenses, audit fees, stock transfer agent fees and reimbursements to Advisor.
Net income fee to related party was $250,000 for the year ended December 31, 2017. This represents a decrease of $7,000, compared to the net income fee of $257,000 for the year ended December 31, 2016. The net income fee paid is based upon a contract amount calculated at the rate of 7.5% of net income.
Advisory fees were $660,000 for the year ended December 31, 2017. This represents an increase of $21,000 compared to advisory fees of $639,000 for the year ended December 31, 2016. Advisory fees are a contract amount and are computed based on a gross asset fee of 0.0625% per month (0.75% per annum) of the average of the gross asset value.
Interest income was $4.2 million for the year ended December 31, 2017. This represents a decrease of $0.3 million, compared to interest income of $4.5 million for the year ended December 31, 2016. This decrease was primarily due to the payoff of notes receivable related to three income producing properties sold in a prior year.
The Company incurred no mortgage and loan interest for the years ended December 31, 2017 and December 31, 2016. We have no outstanding debt as of December 31, 2017.
Income tax expense was $1.6 million for the year ended December 31, 2017 and $1.1 million for the year ended December 31, 2016. Included in 2017 is $500,000 of deferred income tax expense for the gain on a sale of land which has been recognized for income tax purposes but deferred for accounting.
About Income Opportunity Realty Investors, Inc.
Income Opportunity Realty Investors, Inc., a Dallas-based real estate investment company, holds a portfolio of equity real estate in Texas, including undeveloped land. The Company invests in real estate through direct equity ownership and partnerships. For more information, visit the Company’s website at www.incomeopp-realty.com.
|INCOME OPPORTUNITY REALTY INVESTORS, INC.|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|For the Years Ended December 31,|
|(dollars in thousands, except per share amounts)|
|Rental and other property revenues||$||-||$||-||$||-|
|Property operating expenses (including $0, $0, and $10 for the year ended 2017, 2016, and 2015, respectively, from related parties)||-||-||61|
|General and administrative (including $234, $213, and $240 for the year ended 2017, 2016, and 2015, respectively, from related parties)||438||396||466|
|Net income fee to related party||250||257||187|
|Advisory fee to related party||660||639||704|
|Total operating expenses||1,348||1,292||1,418|
|Net operating (loss)||(1,348||)||(1,292||)||(1,418||)|
|Other income (expenses):|
|Interest income from related parties||4,237||4,494||4,376|
|Mortgage and loan interest||-||-||(652||)|
|Total other income||4,487||4,494||3,724|
|Income before taxes||3,139||3,202||2,306|
|Income tax expense||(1,631||)||(1,121||)||(807||)|
|Earnings per share - basic and diluted|
|Weighted average common shares used in computing earnings per share||4,168,214||4,168,214||4,168,214|
|INCOME OPPORTUNITY REALTY INVESTORS, INC.|
|CONSOLIDATED BALANCE SHEETS|
|December 31,||December 31,|
|(dollars in thousands, except par value amount)|
|Real estate land holdings subject to sales contract, at cost||$||22,717||$||22,717|
|Total real estate||22,717||22,717|
|Notes and interest receivable from related parties||14,030||23,659|
|Total notes and interest receivable||14,030||23,659|
|Cash and cash equivalents||2||1|
|Receivable and accrued interest from related parties||49,631||37,768|
|Liabilities and Shareholders’ Equity|
|Accounts payable and other liabilities||$||10||$||23|
|Common stock, $0.01 par value, authorized 10,000,000 shares; issued 4,173,675 and outstanding 4,168,214 shares in 2017 and 2016||42||42|
|Treasury stock at cost, 5,461 shares in 2017 and 2016||(39||)||(39||)|
|Total shareholders' equity||87,887||86,379|
|Total liabilities and shareholders' equity||$||87,897||$||86,402|