ASSET INVESTORS REPORTS THIRD QUARTER EARNINGS
ASSET INVESTORS REPORTS THIRD QUARTER EARNINGS DENVER, Nov. 11 /PRNewswire/ -- Asset Investors Corp. (NYSE: AIC)
today announced that its estimated income as determined under the Internal Revenue Code (tax income) for the three months ended Sept. 30, 1991 increased 28 percent to $9,600,000, or $0.69 per share, as compared to $7,500,000, or $0.54 per share, for the third quarter of 1990. The Company's estimated tax income for the nine months ended Sept. 30, 1991 increased 21 percent to $27,200,000, or $1.95 per share, as compared to $22,400,000, or $1.61 per share, for the same period in 1990.
The Company generally distributes 100 percent of its tax income to stockholders in cash dividends. As a real estate investment trust (REIT), the Company is able to utilize the highly advantageous treatment of REITs under the Code which permits the Company's tax income to be distributed to stockholders without taxation at the corporate level. In addition, tax income is not affected by the rules used to determine income under generally accepted accounting principles (GAAP). On Sept. 29, 1991, the Company paid a third quarter dividend of $0.70 per share. Dividends paid during the first nine months of 1991 totalled $1.90 per share, an increase of 41 percent over the $1.35 per share in dividends paid during the comparable period in 1990. Spencer I. Browne, President and Chief Executive Officer, stated, "The substantial increase in tax income in 1991 as compared to 1990 primarily was the result of the acquisition of additional CMO residual interests." During 1991, the Company used its cash flow not required for dividend payments or operating expenses to acquire $22,500,000 in new CMO residual interests and has committed to acquire an additional $6,400,000 in CMO residual interests which are scheduled to settle in November 1991. While short-term interest rates during the third quarter of 1991 were lower than in the comparable period of 1990, the beneficial effect on the Company's tax income due to lower short-term interest rates substantially was offset by the adverse effect of higher mortgage loan prepayments (as compared to the level of prepayments during 1990) on the GNMA, FNMA and FHLMC-guaranteed mortgage certificates which collateralize the Company's CMO residual interests. The London Interbank Offered Rate (LIBOR), the benchmark for the determination of interest expense on Asset Investors' variable-rate CMO debt, averaged 5.8 percent during the third quarter of 1991 as compared to 8.2 percent for the same period in 1990. LIBOR currently is 4.9 percent and 5.0 percent for one- and three-month LIBOR, respectively. Browne added, "The continuing drop in LIBOR should result in higher tax income in the fourth quarter as compared to the third quarter of 1991 unless mortgage prepayments (which began to moderate in September) accelerate from their already high levels." Net income, as determined under GAAP, for the three and nine months ended Sept. 30, 1991 was $7,403,000, or $0.53 per share, and $22,986,000, or $1.65 per share, respectively, as compared to $7,369,000, or $0.53 per share, and $22,648,000, or $1.63 per share, for the same period in 1990. Asset Investors is a real estate investment trust that generates income primarily from a portfolio of ownership interests in issuances of collateralized mortgage obligations and other mortgage-related assets. The Company does not invest in commercial real estate or mortgage loans. ASSET INVESTORS CORP. AND SUBSIDIARIES SUMMARY OF FINANCIAL RESULTS (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended Sept. 30, Sept. 30, 1991 1990 1991 1990 Estimated Tax Income Tax income $ 9,600 $ 7,500 $ 27,200 $ 22,400 Tax income per share .69 .54 1.95 1.61 Dividends Dividends paid per share $ .70 $ .45 $ 1.90 $ 1.35 GAAP Income Revenues $130,549 $144,866 $403,242 $445,879 Net income 7,403 7,369 22,986 22,648 Net income per share .53 .53 1.65 1.63 Weighted-average shares outstanding 13,973 13,892 13,942 13,892 -0- 11/11/91 /CONTACT: Spencer I. Browne or Michael H. Feinstein of Asset Investors, 303-793-2703/ (AIC) CO: Asset Investors Corp. ST: Colorado IN: FIN SU: ERN SG -- DV004 -- 2990 11/11/91 11:07 EST
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|Date:||Nov 11, 1991|
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