WEINGARTEN REALTY INVESTORS ANNOUNCES
SECOND QUARTER EARNINGS
Houston, Texas, August 11, 2003: Weingarten Realty Investors (NYSE:WRI)
announced today the results of its second quarter ended June 30, 2003.
- Rental revenues for the second quarter of 2003 were $100.8 million, up
from $89.0 million for the second quarter of 2002, a 13.3% increase.
- Net income available to common shareholders was $21.1 million, as
compared to $26.4 million in the second quarter 2002. This represents
$.40 per diluted share for the second quarter 2003, as compared to
$.51 per diluted share in 2002. The Company noted that net income for
the second quarter of 2002 benefited from gains of $3.1 million on the
sale of properties as compared to no gain in the same period of 2003.
In addition, second quarter 2003 net income available to common
shareholders was reduced $2.5 million ($0.05 per diluted common share)
related to a non-cash adjustment for the original issuance costs
associated with Weingarten's $75 million preferred shares that were
redeemed during the quarter.
- Funds from Operations (FFO), a supplemental measure of REIT
performance, increased to $44.9 million for the second quarter 2003
from $42.6 million for the same period in 2002, a 5.4% increase. On a
diluted per share basis, FFO increased to $.85 per share as compared
to $.81 per share the same quarter of the previous year. The non-cash
adjustment for the issuance costs of the redeemed preferred shares was
not deducted in calculating FFO. A reconciliation containing
adjustments from GAAP net income to FFO is included in the financial
statements to this release.
- The Company invested $99.8 million in acquisitions and new development
projects during the second quarter 2003, and a total of $160.4 million
for the six months ended June 30, 2003.
- Occupancy of the overall portfolio was reported at 92.2% for the
second quarter of 2003, up from 91.8% for the first quarter 2003 and
91.3% for the quarter ended June 30, 2002. Occupancy for the retail
properties was 92.6% at both June 30, 2003 and March 31, 2003, as
compared to 91.9% at June 30, 2002. The industrial portfolio's
occupancy increased to 91.0% from 89.0% for both the first quarter of
2003 and the second quarter 2002. It was reported that approximately
90% of the Company's rental revenues are attributable to its retail
properties, with the balance primarily coming from its industrial
portfolio.
- The Board of Trust Managers declared a dividend of $.585 per common
share for the second quarter of 2003, up from $.555 per common share
in 2002. On an annualized basis, this represents a dividend of $2.34
per share as compared to $2.22 per share for the prior year, a 5.4%
increase. The dividend is payable on September 15, 2003 to
shareholders of record on September 2, 2003.
- The Board of Trust Managers also declared dividends on the Company's
preferred shares. The 7.125% Series B Cumulative Redeemable Preferred
Shares dividend of $.4453 per share, the 7.00% Series C Cumulative
Redeemable Preferred Shares (NYSE: WRIPrC) dividend of $.875 per share
and the 6.75% depositary shares representing an interest in Series D
Cumulative Redeemable Preferred Shares (NYSE: WRIPrD) dividend of
$.4219 are all payable on September 15, 2003 to shareholders of record
on September 2, 2003.
In announcing the results for the second quarter, Drew Alexander, President and
Chief Executive Officer, attributed the Company's continued strong performance
primarily to its acquisitions and new development projects brought on-line, as
well as to increased rental revenues from the existing portfolio. He indicated
that in the first six months of 2003, the Company completed 511 new leases or
renewals totaling 2.5 million square feet with an average increase of 8.1% in
the rental rates on a same-store basis. Net of capital costs, rental rates
increased 4.5%.
Alexander commented, "Despite the ongoing increased competition in the
acquisitions arena, Weingarten was able to successfully acquire four excellent
properties during the second quarter of 2003. We acquired two
supermarket-anchored shopping centers, Hollywood Hills Plaza, a 364,700 square
foot shopping center anchored by Publix, Target and Eckerd Drug in Hollywood,
Florida, and Tamiami Trail Shops, a 110,900 square foot Miami, Florida shopping
center also anchored by Publix and Eckerd Drug. In addition, we purchased
Lincoln Place II, a 168,400 square foot shopping center near St. Louis, Missouri
anchored by Marshall's, Linens N Things, Office Depot, Old Navy and Ultimate
Electronics. This center is adjacent to an existing Weingarten center that has
Kohl's and Lowe's Home Improvement Warehouse as its anchors. Finally, we
acquired a 159,000 square foot industrial property located in Tampa, Florida."
This brings Weingarten's acquisition totals for the first half of 2003 to 1.8
million square feet with a total investment of $126.0. Alexander noted that the
Company currently has a number of other potential acquisitions in various stages
of due diligence and anticipates a successful program for 2003.
The Company reported that it currently has 19 new development properties in
various stages of construction, comprised of 18 shopping centers and one
industrial property. Upon completion, these developments will represent an
investment of approximately $219 million and will add 1.6 million square feet to
the portfolio. All 18 retail developments are anchored either by a supermarket
or a national discount department store. The industrial project is a 300,000
square foot state-of-the-art distribution warehouse, which will be located in
Houston, Texas. Weingarten will have a 20% joint venture interest in this
project, which is leased to Houston-based Shell Oil Products US. These new
development projects will come on-line during the remainder of 2003 and in 2004.
Alexander further commented with regard to financing activities, "We were able
to take advantage of the opportunity to redeem our $75 million 7.44% Series A
Cumulative Redeemable Preferred Shares during the second quarter of 2003. The
redemption of these shares was financed through the issuance of 3,000,000
depositary shares representing $75 million of 6.75% Series D Cumulative
Redeemable Preferred Shares, the net effect of which will save Weingarten and
our shareholders over $500,000 annually."
During the six months ended June 30, 2003, Weingarten has issued $136 million of
medium-term notes with an average maturity of 11.4 years and weighted average
interest rate of 5.4%. The proceeds were employed to reduce the Company's
floating-rate debt. By locking rates on longer-term, fixed-rate debt and paying
down short-term, variable-rate debt, the Company has reduced its variable-rate
debt from 28% of total debt at June 30, 2002 to 15% of total debt at June 30,
2003. Alexander noted, "Although the effect of these transactions was an
increase in total interest expense as compared to what it would have been had we
not refinanced this floating-rate debt, these transactions reduced our exposure
to interest rate increases and continued our practice of carefully staggering
our future debt maturities."
Alexander concluded by saying, "We continually seek to maximize the potential of
our existing portfolio, and we are optimistic about the remainder of 2003 as we
assess and pursue acquisition and development opportunities, and evaluate
various financing opportunities that will benefit Weingarten over the
long-term."
The Company also announced that it will host a live webcast of its quarterly
conference call on Monday, August 11, 2003 at 10:00 a.m. Central Time. The
webcast can be accessed via the Company's web site at www.weingarten.com. A
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replay is also available at the site starting approximately two hours following
the live call or can be heard by calling 877-660-6853, account number 1628,
confirmation number 71025 for the following 24 hours.
Weingarten Realty Investors is a Houston, Texas based real estate investment
trust with 310 income-producing properties in 18 states that span from coast to
coast in the southern half of the United States. Included in the portfolio are
250 neighborhood and community shopping centers, 59 industrial properties and
one office building (its corporate office) aggregating approximately 39.9
million square feet. Listed on the New York Stock Exchange, the Company's
common shares are traded under the symbol "WRI". For further information on the
Company, please visit www.weingarten.com.
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STATEMENTS INCLUDED HEREIN THAT STATE THE COMPANY'S OR MANAGEMENT'S INTENTIONS,
HOPES, BELIEFS, EXPECTATIONS OR PREDICTIONS OF THE FUTURE ARE "FORWARD-LOOKING"
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 WHICH BY THEIR NATURE, INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES.
THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS COULD DIFFER
MATERIALLY FROM THOSE EXPRESSED AS IMPLIED BY SUCH STATEMENTS. REFERENCE IS
MADE TO THE COMPANY'S REGULATORY FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR INFORMATION OR FACTORS, WHICH MAY IMPACT THE COMPANY'S
PERFORMANCE.
FINANCIAL STATEMENTS
WEINGARTEN REALTY INVESTORS
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
STATEMENTS OF CONSOLIDATED INCOME AND 2003 2002 2003 2002
FUNDS FROM OPERATIONS (Unaudited) (Unaudited)
---------------------- ----------------------
Rental Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100,774 $ 89,024 $ 197,326 $ 172,084
Interest Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . 560 231 806 431
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,619 1,253 2,639 2,011
---------- ---------- ---------- ----------
Total Revenues . . . . . . . . . . . . . . . . . . . . . 102,953 90,508 200,771 174,526
---------- ---------- ---------- ----------
Depreciation and Amortization. . . . . . . . . . . . . . . . . . . . . 22,584 19,040 43,689 36,698
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,036 16,532 40,475 31,528
Operating Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . 16,215 13,451 30,304 25,656
Ad Valorem Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,415 10,708 22,858 20,837
General and Administrative Expense . . . . . . . . . . . . . . . . . . 3,414 3,398 6,471 6,074
---------- ---------- ---------- ----------
Total Expenses . . . . . . . . . . . . . . . . . . . . . 74,664 63,129 143,797 120,793
---------- ---------- ---------- ----------
Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,289 27,379 56,974 53,733
Equity in Earnings of Joint Ventures . . . . . . . . . . . . . . . . . 998 965 2,036 2,039
Income Allocated to Minority Interests . . . . . . . . . . . . . . . . (837) (943) (1,732) (1,059)
Loss on Sale of Properties . . . . . . . . . . . . . . . . . . . . . . (17) (8)
---------- ---------- ---------- ----------
Income Before Discontinued Operations. . . . . . . . . . . . . . . . . 28,433 27,401 57,270 54,713
---------- ---------- ---------- ----------
Operating Income From Discontinued Operations. . . . . . . . . . . . . 143 814 326 1,698
Gain (Loss) on Sale of Properties. . . . . . . . . . . . . . . . . . . (108) 3,119 763 4,340
---------- ---------- ---------- ----------
Income from Discontinued Operations. . . . . . . . . . . 35 3,933 1,089 6,038
---------- ---------- ---------- ----------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,468 31,334 58,359 60,751
Less: Preferred Dividends . . . . . . . . . . . . . . . . . . . . . 4,920 4,939 9,842 9,878
Original Issuance Costs associated with Redeemed
Series A Preferred Shares . . . . . . . . . . . . . . . . . 2,488 2,488
---------- ---------- ---------- ----------
Net Income Available to Common Shareholders. . . . . . . . . . . . . . $ 21,060 $ 26,395 $ 46,029 $ 50,873
========== ========== ========== ==========
Net Income Per Common Share--Basic . . . . . . . . . . . . . . . . . . $ 0.40 $ 0.51 $ 0.88 $ 0.98
========== ========== ========== ==========
Net Income Per Common Share--Diluted . . . . . . . . . . . . . . . . . $ 0.40 $ 0.51 $ 0.88 $ 0.98
========== ========== ========== ==========
Funds from Operations:
Net Income Available to Common Shareholders. . . . . . . . . . . . . . $ 21,060 $ 26,395 $ 46,029 $ 50,873
Depreciation and Amortization. . . . . . . . . . . . . . . . . . . . . 20,786 18,754 40,178 36,230
Depreciation and Amortization of Unconsolidated Joint Ventures . . . . 463 543 897 1,018
(Gain) Loss on Sale of Properties. . . . . . . . . . . . . . . . . . . 115 (3,119) (765) (4,340)
Original Issuance Costs associated with Redeemed
Series A Preferred Shares . . . . . . . . . . . . . . . . . . . . . 2,488 2,488
---------- ---------- ---------- ----------
Funds from Operations. . . . . . . . . . . . . . . . . . $ 44,912 $ 42,573 $ 88,827 $ 83,781
========== ========== ========== ==========
Funds from Operations Per Common Share--Basic. . . . . . . . . . . . . $ 0.86 $ 0.82 $ 1.70 $ 1.62
========== ========== ========== ==========
Funds from Operations Per Common Share--Diluted. . . . . . . . . . . . $ 0.85 $ 0.81 $ 1.69 $ 1.61
========== ========== ========== ==========
Weighted Average Shares Outstanding--Basic . . . . . . . . . . . . . . 52,128 51,926 52,110 51,806
========== ========== ========== ==========
Weighted Average Shares Outstanding--Diluted . . . . . . . . . . . . . 54,038 53,754 54,025 52,909
========== ========== ========== ==========
June 30, December 31,
2003 2002
CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited)
--------------------------
Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,866,838 $ 2,695,286
Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . (490,137) (460,832)
Investment in Real Estate Joint Ventures. . . . . . . . . . . . . . . . . . 28,460 28,738
Notes Receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,432 14,747
Unamortized Debt and Lease Costs. . . . . . . . . . . . . . . . . . . . . . 52,659 48,377
Other Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,547 97,573
------------ ------------
Total Assets . . . . . . . . . . . . . . . . . . . . $ 2,575,799 $ 2,423,889
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Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,509,965 $ 1,330,369
Accounts Payable and Accrued Expenses . . . . . . . . . . . . . . . . . . . 75,941 81,488
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,945 23,636
------------ ------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . 1,604,851 1,435,493
------------ ------------
Minority Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,018 54,983
------------ ------------
Preferred Shares of Beneficial Interest . . . . . . . . . . . . . . . . . . 263 263
Common Shares of Beneficial Interest. . . . . . . . . . . . . . . . . . . . 1,561 1,559
Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,084,476 1,082,046
Accumulated Dividends in Excess of Net Income . . . . . . . . . . . . . . . (162,807) (147,853)
Accumulated Other Comprehensive Loss. . . . . . . . . . . . . . . . . . . . (1,563) (2,602)
------------ ------------
Total Shareholders' Equity. . . . . . . . . . . . . . . . . . . 921,930 933,413
------------ ------------
Total Liabilities and Shareholders' Equity . . . . . $ 2,575,799 $ 2,423,889
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