WEINGARTEN REALTY INVESTORS ANNOUNCES
THIRD QUARTER FFO UP 7.9%
Houston, Texas, October 27, 2003: Weingarten Realty Investors (NYSE:WRI)
announced today the results of its third quarter ended September 30, 2003.
- Rental revenues for the third quarter of 2003 were $103.5 million, up
from $90.5 million for the third quarter of 2002, a 14.4% increase.
- Net income available to common shareholders was $28.4 million, as
compared to $34.5 million in the third quarter 2002. This represents
$.54 per diluted share for the third quarter 2003, as compared to $.65
per diluted share in 2002. The Company noted that net income for the
third quarter of 2002 benefited from gains of $10.8 million on the
sale of properties as compared to $3.5 million in the same period of
2003.
- Funds from Operations (FFO), a supplemental measure of REIT
performance, increased to $46.2 million for the third quarter 2003
from $42.8 million for the same period in 2002, a 7.9% increase. On a
diluted per share basis, FFO increased to $.88 per share, or 7.3%, as
compared to $.82 per share for the same quarter of the previous year.
Income generated through negotiated terminations of lease agreements
was significantly higher than normal in the current quarter. This
increase in FFO of approximately $.03 per share was offset to some
extent by the write-off of due diligence costs of about $.01 per share
on an abandoned portfolio acquisition that failed to meet our
underwriting criteria during our intensive due diligence process. A
reconciliation containing adjustments from GAAP net income to FFO is
included in the financial statements to this release.
- The Company invested $147 million in acquisitions and new development
projects during the third quarter 2003, and a total of $307 million
for the nine months ended September 30, 2003. Subsequent to
quarter-end, four shopping centers were purchased for $73 million.
- Occupancy of the overall portfolio was reported at 92.6% for the third
quarter of 2003, up from 92.2% for the second quarter 2003 and 91.4%
for the quarter ended September 30, 2002. Occupancy for the retail
properties was 93.1% at September 30, 2003 as compared to 92.6% at
June 30, 2003 and 92.3% at September 30, 2002. The industrial
portfolio's occupancy was 91.0% at both September 30, 2003 and June
30, 2003, up significantly from 88.0% at September 30, 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 third 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 December 15, 2003 to shareholders
of record on December 1, 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 December 15, 2003 to shareholders of record
on December 1, 2003.
In announcing the results for the third 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 nine months of 2003, the Company completed 855 new leases or
renewals totaling 4.7 million square feet with an average increase of 8.7% in
the rental rates on a same-store basis. Net of capital costs, rental rates
increased 5.1%.
Alexander commented, "Despite the ongoing increased competition in the
acquisitions arena, Weingarten was able to successfully acquire four excellent
properties during the third quarter of 2003. We acquired two
supermarket-anchored shopping centers in San Antonio, Texas: Thousand Oaks
Shopping Center, a 162,900 square foot center anchored by an HEB Supermarket,
Palais Royal and Tuesday Morning, and Fiesta Trails Shopping Center, a 312,400
square foot center anchored by Barnes & Noble, Marshalls, Office Max, Regal
Cinemas, and Steinmart. This center also includes an HEB Supermarket and a
Target which are corporately-owned. We also acquired Durham Festival, a 134,300
square foot shopping center anchored by Kroger and located in Durham, North
Carolina. Finally, we acquired Siempre Viva Business Park, located in San
Diego, California. Part of a 1.26 million square foot industrial park, our
acquisition of this state-of-the-art dock-high project includes seven buildings
totaling 726,800 square feet. The property is 100% leased to tenants such as
UPS Supply Chain Solutions, Hitachi, Pioneer and Bose Corporation."
Subsequent to quarter-end, Weingarten completed the acquisitions of four
additional supermarket-anchored shopping centers representing an investment of
$73 million. Sandy Plains Exchange is a 73,000 square foot center located in
Marietta, Georgia, a suburb of Atlanta. Anchored by a Publix supermarket, this
represents our first shopping center purchase in the Atlanta metroplex.
Highlands Ranch University Park is a 88,400 square foot shopping center anchored
by a Whole Foods and is located in Highlands Ranch, Colorado, a suburb of
Denver. This represents the Company's first acquisition under our strategic
joint venture with AEW Capital Management. We also purchased Westland Terrace
in Orlando, Florida. This 68,000 square foot center is anchored by a
corporately-owned Super Target. Finally, we purchased Overton Park, an
Albertson's-anchored 351,000 square foot center in Fort Worth, Texas.
This brings Weingarten's acquisition totals for 2003 to 3.7 million square feet
with a total investment of $327 million. Alexander noted, "The Company
currently has 12 additional properties representing an investment of over $180
million currently in various stages of due diligence and anticipates that the
majority of these deals will close in the fourth quarter of this year or early
2004." While there is no assurance that all of these transactions will be
completed, we have a high level of confidence that we will purchase the majority
of these properties.
The Company reported that it currently has 17 new development properties in
various stages of construction, comprised of 16 shopping centers and one
industrial property. Upon completion, these developments will represent an
investment of approximately $176 million and will add 1.3 million square feet to
the portfolio. All 16 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 has 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 sold 1.15
million common shares of beneficial interest with net proceeds from this
offering totaling $50.9 million. We anticipate these funds will be used to
redeem a portion of our 7.125% Series B Cumulative Redeemable Preferred Shares,
but in the interim we have reduced our revolving credit facility. This
transaction demonstrates our commitment to maintaining a conservative balance
sheet and our ability to efficiently raise equity capital, as needed, to
maintain our strong credit ratings."
During the nine months ended September 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. 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, "The third quarter benefited from increased
occupancy levels and an ongoing company-wide effort to get new merchants open
for business. The benefit of these efforts will positively impact revenue in
the fourth quarter and into 2004. Acquisition activity remains strong with
numerous outstanding properties in our pipeline. We are pleased with our
results through three quarters of 2003 and are optimistic that we will meet or
exceed the operational goals we set at the beginning of the year."
The Company also announced that it will host a live webcast of its quarterly
conference call on Monday, October 27, 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 877-519-4471, PIN number 4224372, for
the following 24 hours.
Weingarten Realty Investors is a Houston, Texas based real estate investment
trust with 315 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
254 neighborhood and community shopping centers, 60 industrial properties and
one office building (its corporate office) aggregating approximately 42.0
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 Nine Months Ended
September 30, September 30,
STATEMENTS OF CONSOLIDATED INCOME AND 2003 2002 2003 2002
FUNDS FROM OPERATIONS (Unaudited) (Unaudited)
---------------------- ----------------------
Rental Income. . . . . . . . . . . . . . . . . . . . . . . . . $ 103,547 $ 90,474 $ 300,556 $ 262,254
Interest Income. . . . . . . . . . . . . . . . . . . . . . . . 480 270 1,283 701
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . 3,118 2,039 5,756 4,048
---------- ---------- ---------- ----------
Total Revenues. . . . . . . . . . . . . . . . . . . 107,145 92,783 307,595 267,003
---------- ---------- ---------- ----------
Depreciation and Amortization. . . . . . . . . . . . . . . . . 23,251 19,174 66,810 55,772
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . 22,220 17,062 62,695 48,590
Operating Expense. . . . . . . . . . . . . . . . . . . . . . . 16,661 14,729 46,885 40,313
Ad Valorem Taxes . . . . . . . . . . . . . . . . . . . . . . . 12,586 11,786 35,403 32,583
General and Administrative Expense . . . . . . . . . . . . . . 3,655 2,576 10,126 8,650
---------- ---------- ---------- ----------
Total Expenses. . . . . . . . . . . . . . . . . . . 78,373 65,327 221,919 185,908
---------- ---------- ---------- ----------
Operating Income . . . . . . . . . . . . . . . . . . . . . . . 28,772 27,456 85,676 81,095
Equity in Earnings of Joint Ventures . . . . . . . . . . . . . 1,485 989 3,521 3,028
Income Allocated to Minority Interests . . . . . . . . . . . . (591) (578) (2,323) (1,637)
Gain on Sale of Properties . . . . . . . . . . . . . . . . . . 8
---------- ---------- ---------- ----------
Income Before Discontinued Operations. . . . . . . . . . . . . 29,674 27,867 86,874 82,486
---------- ---------- ---------- ----------
Operating Income From Discontinued Operations. . . . . . . . . 46 740 442 2,532
Gain on Sale of Properties . . . . . . . . . . . . . . . . . . 3,465 10,818 4,228 15,158
---------- ---------- ---------- ----------
Income from Discontinued Operations . . . . . . . . 3,511 11,558 4,670 17,690
---------- ---------- ---------- ----------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . 33,185 39,425 91,544 100,176
Less: Preferred Dividends . . . . . . . . . . . . . . . . . . 4,804 4,939 14,646 14,817
Original Issuance Costs associated with Redeemed
Series A Preferred Shares . . . . . . . . . . . . . . 2,488
---------- ---------- ---------- ----------
Net Income Available to Common Shareholders. . . . . . . . . . $ 28,381 $ 34,486 $ 74,410 $ 85,359
========== ========== ========== ==========
Net Income Per Common Share--Basic . . . . . . . . . . . . . . $ 0.54 $ 0.66 $ 1.43 $ 1.65
========== ========== ========== ==========
Net Income Per Common Share--Diluted . . . . . . . . . . . . . $ 0.54 $ 0.65 $ 1.42 $ 1.64
========== ========== ========== ==========
Funds from Operations:
Net Income Available to Common Shareholders. . . . . . . . . . $ 28,381 $ 34,486 $ 74,410 $ 85,359
Depreciation and Amortization. . . . . . . . . . . . . . . . . 21,340 18,691 61,518 54,921
Depreciation and Amortization of Unconsolidated Joint Ventures 460 476 1,357 1,494
Gain on Sale of Properties . . . . . . . . . . . . . . . . . . (3,473) (10,818) (4,238) (15,158)
Gain on Sale of Properties of Unconsolidated Joint Ventures. . (508) (508)
---------- ---------- ---------- ----------
Funds from Operations . . . . . . . . . . . . . . . $ 46,200 $ 42,835 $ 132,539 $ 126,616
========== ========== ========== ==========
Funds from Operations Per Common Share--Basic. . . . . . . . . $ 0.89 $ 0.82 $ 2.54 $ 2.44
========== ========== ========== ==========
Funds from Operations Per Common Share--Diluted. . . . . . . . $ 0.88 $ 0.82 $ 2.52 $ 2.42
========== ========== ========== ==========
Weighted Average Shares Outstanding--Basic . . . . . . . . . . 52,161 51,993 52,127 51,869
========== ========== ========== ==========
Weighted Average Shares Outstanding--Diluted . . . . . . . . . 54,117 53,841 54,053 53,196
========== ========== ========== ==========
September 30, December 31,
2003 2002
CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited)
------------------------------
Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,018,599 $ 2,695,286
Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . (508,781) (460,832)
Investment in Real Estate Joint Ventures. . . . . . . . . . . . 28,240 28,738
Notes Receivable. . . . . . . . . . . . . . . . . . . . . . . . 30,136 14,747
Unamortized Debt and Lease Costs. . . . . . . . . . . . . . . . 54,696 48,377
Other Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 94,569 97,573
------------- -------------
Total Assets . . . . . . . . . . . . . . . $ 2,717,459 $ 2,423,889
============= =============
Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,653,368 $ 1,330,369
Accounts Payable and Accrued Expenses . . . . . . . . . . . . . 72,395 81,488
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,894 23,636
------------- -------------
Total Liabilities . . . . . . . . . . . . . . . . . . 1,746,657 1,435,493
------------- -------------
Minority Interest . . . . . . . . . . . . . . . . . . . . . . . 47,080 54,983
------------- -------------
Preferred Shares of Beneficial Interest . . . . . . . . . . . . 263 263
Common Shares of Beneficial Interest. . . . . . . . . . . . . . 1,563 1,559
Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . . 1,088,050 1,082,046
Accumulated Dividends in Excess of Net Income . . . . . . . . . (164,938) (147,853)
Accumulated Other Comprehensive Loss. . . . . . . . . . . . . . (1,216) (2,602)
------------- -------------
Total Shareholders' Equity. . . . . . . . . . . . . . 923,722 933,413
------------- -------------
Total Liabilities and Shareholders' Equity $ 2,717,459 $ 2,423,889
============= =============