EXHIBIT 99.1
WEINGARTEN REALTY INVESTORS ANNOUNCES
24.9% INCREASE IN THIRD QUARTER 2004 RENTAL REVENUES
Houston, Texas, October 25, 2004: Weingarten Realty Investors (NYSE:WRI)
announced today the results of its third quarter ended September 30, 2004. All
per share amounts have been adjusted for WRI's 3 for 2 share split completed on
March 30, 2004 and, except for dividends per share, are on a fully-diluted
basis:
THIRD QUARTER HIGHLIGHTS
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Rental revenues for the third quarter of 2004 were $128.4 million, up from
$102.8 million for the third quarter of 2003, a 24.9% increase.
Net income available to common shareholders on a diluted basis for the third
quarter of 2004 increased 2.4% to $29.8 million as compared to $29.1 million for
the quarter ended September 30, 2003. On a per share basis, net income
available to common shareholders was $.33 for the third quarter of 2004 as
compared to $.36 for the same period in the prior year. The Company noted that
net income for the third quarter of 2003 benefited from gains of $3.5 million on
the sale of properties as compared to a gain of $.4 million in the third quarter
of 2004.
Funds from operations (FFO), a supplemental measure for REIT performance, on a
diluted basis was $58.9 million, or $.65 per share, for the quarter ending
September 30, 2004 and $47.4 million, or $.58 per share, for the same period in
2003, representing an increase of 24.3% in dollars, or 12.1% on a per share
basis.
The Company invested $75.5 million in acquisitions and new development projects
during the third quarter of 2004, and a total of $485.6 million for the nine
months ended September 30, 2004.
Weingarten raised $105.6 million through the issuance of 3.2 million common
shares and $72.5 million through the issuance of 2.9 million depositary shares
of 6.95% Series E Cumulative Redeemable Preferred Shares. Net proceeds from
these capital transactions during the third quarter aggregated $172.1 million
and were utilized to pay down the Company's revolving credit facility.
Occupancy of the overall portfolio (based on signed leases) was reported at
94.2% at September 30, 2004, up from 92.6% at the end of the third quarter of
2003. Occupancy for the retail properties was 95.0% at September 30, 2004 as
compared to 93.1% at September 30, 2003, while the industrial portfolio's
occupancy increased to 91.5% from 91.0% for the 2003 third quarter-end.
The Board of Trust Managers declared a dividend of $.415 per common share for
the third quarter of 2004, up from $.39 per common share in 2003. On an
annualized basis, this represents a dividend of $1.66 per share as compared to
$1.56 per share for the prior year, a 6.4% increase. The dividend is payable on
December 15, 2004 to shareholders of record on December 3, 2004.
The Board of Trust Managers also declared dividends on the Company's preferred
shares. The dividend related to the 6.75% depositary shares representing an
interest in Series D Cumulative Redeemable Preferred Shares (NYSE: WRIPrD) of
$.421875 per share and the 6.95% Series E Cumulative Redeemable Preferred Shares
(NYSE: WRIPrE) dividend of $.434375 per share are both payable on December 15,
2004 to shareholders of record on December 3, 2004.
For the first nine months of 2004, rental revenues were $365.8 million, an
increase of 22.7%, from $298.2 million for the nine months ended September 30,
2003. For the nine months ended September 30, 2004, diluted net income
available to common shareholders was $94.5 million as compared to $76.8 million
for the same period of 2003, an increase of 23.0%. On a per share basis, the
increase was 12.6% to $1.07 for the first nine months of 2004 from $.95 for the
same period in the prior year. For the nine months ended September 30, 2004,
diluted FFO was $164.1 million, or $1.85 per share, as compared to $136.1
million, or $1.68 per share, for the same period of 2003, an increase of 20.6%
in dollars, or 10.1% on a per share basis. Excluding second quarter
non-recurring and non-cash charges totaling $6.3 million, or $.07 per share, for
2004 and $2.5 million, or $.03 per share, for 2003, diluted FFO for the nine
months ending September 30, 2004 totaled $170.4 million, or $1.92 per common
share, as compared to the same period in 2003 of $138.6 million, or $1.71 per
share, representing an increase of 22.9% in dollars, or 12.3% on a per share
basis.
In announcing the results for the third quarter, Drew Alexander, President and
Chief Executive Officer, attributed the Company's continued strong performance
to its acquisitions and to new development projects brought on-line, and more
importantly to increased rental revenues from the existing portfolio. He
indicated that same property NOI growth for the total portfolio was 4.0% for the
third quarter of 2004 as compared to 2.7% for the same period in 2003. The
retail portfolio showed strong NOI growth of 4.5% and the industrial properties
decreased .4%. Mr. Alexander noted, however, that almost all of the Company's
industrial markets have shown improvement in leasing activity, and he expects
continued improvement in coming quarters. Through September 30, 2004,
Weingarten completed 991 new leases or renewals totaling 4.0 million square feet
with an average increase of 6.0% in the rental rates on a same-space basis. In
addition, he noted that there is just under one million square feet of space
(which is higher than normal) in which the leases have been signed but have not
yet commenced. The commencement of rent on these signed leases will help to
keep operations strong through the fourth quarter of 2004 and into 2005.
Alexander commented, "Weingarten acquired three properties during the third
quarter of 2004 with a total investment of $59.7 million: 1) North Creek Plaza,
a 245,000 square foot shopping center in Laredo, Texas, which is anchored by
Best Buy, Old Navy, Bed, Bath & Beyond, TJ Maxx, Pier One and United Artists; 2)
Plantation Centre, a 135,000 square foot shopping center anchored by a 84,500
square foot HEB Supermarket, also located in Laredo; and 3) Northtown Plaza, a
74,000 square foot shopping center located in Lubbock, Texas, which is anchored
by United Supermarkets. For the first nine months of 2004, we have acquired 18
excellent properties (17 shopping centers and one industrial property), and our
joint venture partners' interests in four of our existing centers, adding 3.1
million square feet to the portfolio with an investment of $449.7 million." Mr.
Alexander noted that the acquisitions pipeline continues to be strong with
approximately $145 million of potential acquisitions currently in various stages
of due diligence.
During the third quarter of 2004, the Company completed three new development
projects, two in Louisiana and one in Las Vegas, totaling 426,000 square feet
with a total investment of approximately $57 million. Weingarten also commenced
three shopping center developments, two in North Carolina and one in Colorado.
In addition, there are seven other development properties in various stages of
construction. These projects are all anchored by either a supermarket or a
Target or Wal-Mart. During the third quarter, Weingarten spent $15.8 million on
its new development program, bringing the total investment for 2004 (including
the properties recently completed) to $35.9 million. Mr. Alexander commented,
"Upon completion, the ten new development projects currently under construction
will represent an investment of approximately $85 million and will add 635,000
square feet to the portfolio. We anticipate that they will come on-line during
the remainder of 2004 and in 2005."
Weingarten also disposed of two retail properties earlier this year that no
longer met the Company's ownership criteria. These property sales represented a
total of 271,000 square feet and provided sales proceeds of $26.7 million, with
a gain of $13.4 million. The Company also reported that there is currently
approximately $60 million in the dispositions pipeline, as they have focused
more on this area, and that they anticipate increased activity over the next
couple of years.
With regard to financing activities, in July 2004 Weingarten raised $72.5
million through the issuance of 2.9 million depositary shares of 6.95% Series E
Cumulative Redeemable Preferred Shares, with net proceeds of $70.2 million. In
August 2004, the Company issued 3.2 million common shares at $33 per share,
bringing total net proceeds from common equity issuances for the nine months
ended September 30, 2004 to $219.9 million (including $118 million of proceeds
from 3.6 million shares issued in March of this year). During the nine months
ended September 30, 2004, the Company also issued $375 million of medium-term
notes with an effective weighted average interest rate of 5.0% and a weighted
average maturity of 9.3 years.
Alexander commented, "The $118 million of proceeds from the equity offering in
March of this year were used primarily to redeem our 7.0% Series C preferred
shares. All other debt and equity issuance proceeds were used to reduce
floating-rate debt on our revolving credit facility. By continuing this
practice of locking rates on longer-term, fixed-rate financings and reducing
short-term, variable-rate debt, we have reduced our variable-rate debt to 9.3%
of total debt as of September 30, 2004. Although these transactions have
increased our total interest expense as compared to what it would have been had
we not refinanced this floating-rate debt, we have significantly reduced our
exposure to future interest rate increases."
Alexander concluded by saying, "With three quarters of 2004 now behind us, we
are comfortable that 2004 will be another successful year for Weingarten Realty
Investors. Leasing activity is solid, we expect occupancy levels to remain
strong and we remain focused on maximizing our existing portfolio while
continuously assessing acquisition, development and disposition prospects and
evaluating alternative 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, October 25, 2004 at 10:00 a.m. Central Time. The
webcast can be accessed via the Company's website 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, conference number
5245784, for the following 24 hours.
Weingarten Realty Investors is a Houston, Texas, based real estate investment
trust with 346 properties in 20 states that span the southern half of the United
States from coast to coast. Included in the portfolio are 284 neighborhood and
community shopping centers and 62 industrial properties aggregating
approximately 46.1 million square feet. Weingarten has one of the most
diversified tenant bases of any major REIT in its sector, with the largest of
its over 5,000 tenants comprising less than 3% of total rental revenues. 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 OR 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 that are reported on a post-split basis)
Three Months Ended Nine Months Ended
September 30, September 30,
STATEMENTS OF CONSOLIDATED INCOME AND 2004 2003 2004 2003
FUNDS FROM OPERATIONS (Unaudited) (Unaudited)
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Rental Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 128,433 $ 102,781 $ 365,844 $ 298,192
Interest Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374 480 1,033 1,277
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,079 3,118 3,792 5,750
----------- ----------- ---------- -----------
Total Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . 129,886 106,379 370,669 305,219
----------- ----------- ---------- -----------
Depreciation and Amortization. . . . . . . . . . . . . . . . . . . . . . . 30,421 23,070 86,128 66,265
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,826 22,220 85,699 62,695
Operating Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,888 16,562 56,882 46,595
Ad Valorem Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,453 12,466 43,565 35,080
General and Administrative Expense . . . . . . . . . . . . . . . . . . . . 4,085 3,655 12,047 10,126
Loss on Early Redemption of Preferred Shares . . . . . . . . . . . . . . . 3,566
----------- ----------- ---------- -----------
Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,673 77,973 287,887 220,761
----------- ----------- ---------- -----------
Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,213 28,406 82,782 84,458
Equity in Earnings of Joint Ventures . . . . . . . . . . . . . . . . . . . 1,656 1,485 4,593 3,521
Income Allocated to Minority Interests . . . . . . . . . . . . . . . . . . (1,001) (591) (2,855) (2,323)
Impairment Loss on Land Held for Development . . . . . . . . . . . . . . . (2,700)
Gain on Sale of Properties . . . . . . . . . . . . . . . . . . . . . . . . 370 8 789
----------- ----------- ---------- -----------
Income Before Discontinued Operations. . . . . . . . . . . . . . . . . . . 31,238 29,308 82,609 85,656
----------- ----------- ---------- -----------
Operating Income From Discontinued Operations. . . . . . . . . . . . . . . 412 790 1,660
Gain on Sale of Properties . . . . . . . . . . . . . . . . . . . . . . . . 3,465 13,430 4,228
----------- ----------- ---------- -----------
Income from Discontinued Operations. . . . . . . . . . . . . . . . . 3,877 14,220 5,888
----------- ----------- ---------- -----------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,238 33,185 96,829 91,544
Less: Preferred Dividends. . . . . . . . . . . . . . . . . . . . . . . . . 2,428 4,804 4,959 14,646
Original Issuance Costs associated with Series A Preferred Shares. . 2,488
----------- ----------- ---------- -----------
Net Income Available to Common Shareholders--Basic . . . . . . . . . . . . $ 28,810 $ 28,381 $ 91,870 $ 74,410
=========== =========== ========== ===========
Net Income Per Common Share--Basic . . . . . . . . . . . . . . . . . . . . $ 0.33 $ 0.36 $ 1.08 $ 0.95
=========== =========== ========== ===========
Net Income Available to Common Shareholders--Diluted . . . . . . . . . . . $ 29,761 $ 29,136 $ 94,513 $ 76,757
=========== =========== ========== ===========
Net Income Per Common Share--Diluted . . . . . . . . . . . . . . . . . . . $ 0.33 $ 0.36 $ 1.07 $ 0.95
=========== =========== ========== ===========
Funds from Operations:
Net Income Available to Common Shareholders. . . . . . . . . . . . . . . . $ 28,810 $ 28,381 $ 91,870 $ 74,410
Depreciation and Amortization. . . . . . . . . . . . . . . . . . . . . . . 28,092 21,340 79,873 61,518
Depreciation and Amortization of Unconsolidated Joint Ventures . . . . . . 715 460 2,073 1,357
Gain on Sale of Properties . . . . . . . . . . . . . . . . . . . . . . . . (370) (3,473) (14,195) (4,238)
(Gain) Loss on Sale of Properties of Unconsolidated Joint Ventures . . . . 2 (508) 2 (508)
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Funds from Operations--Basic . . . . . . . . . . . . . . . . . . . . . . . $ 57,249 $ 46,200 $ 159,623 $ 132,539
=========== =========== ========== ===========
Funds from Operations Per Common Share--Basic. . . . . . . . . . . . . . . $ 0.66 $ 0.59 $ 1.87 $ 1.70
=========== =========== ========== ===========
Funds from Operations--Diluted . . . . . . . . . . . . . . . . . . . . . . $ 58,874 $ 47,407 $ 164,086 $ 136,100
=========== =========== ========== ===========
Funds from Operations Per Common Share--Diluted. . . . . . . . . . . . . . $ 0.65 $ 0.58 $ 1.85 $ 1.68
=========== =========== ========== ===========
Weighted Average Shares Outstanding--Basic . . . . . . . . . . . . . . . . 86,951 78,241 85,237 78,191
=========== =========== ========== ===========
Weighted Average Shares Outstanding--Diluted . . . . . . . . . . . . . . . 90,537 81,176 88,475 81,080
=========== =========== ========== ===========
September 30, December 31,
2004 2003
CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited)
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Property. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,695,442 $ 3,200,091
Accumulated Depreciation. . . . . . . . . . . . . . . . . . . (594,910) (527,375)
Investment in Real Estate Joint Ventures. . . . . . . . . . . 46,686 35,085
Notes Receivable. . . . . . . . . . . . . . . . . . . . . . . 18,949 36,825
Unamortized Debt and Lease Costs. . . . . . . . . . . . . . . 85,615 70,895
Accrued Rent and Accounts Receivable, net . . . . . . . . . . 43,987 40,325
Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . 38,236 20,255
Other Assets. . . . . . . . . . . . . . . . . . . . . . . . . 56,122 46,993
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Total Assets. . . . . . . . . . . . . . . . . . . . $ 3,390,127 $ 2,923,094
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Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,054,281 $ 1,810,706
Preferred Shares Subject to Mandatory Redemption, net . . . . 109,364
Accounts Payable and Accrued Expenses . . . . . . . . . . . . 88,881 78,986
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,198 52,671
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Total Liabilities. . . . . . . . . . . . . . . . . . . . 2,225,360 2,051,727
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Minority Interest . . . . . . . . . . . . . . . . . . . . . . 72,789 49,804
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Preferred Shares of Beneficial Interest . . . . . . . . . . . 177 90
Common Shares of Beneficial Interest. . . . . . . . . . . . . 2,661 2,488
Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . 1,283,724 993,570
Accumulated Dividends in Excess of Net Income . . . . . . . . (190,346) (174,234)
Accumulated Other Comprehensive Loss. . . . . . . . . . . . . (4,238) (351)
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Total Shareholders' Equity . . . . . . . . . . . . . . . 1,091,978 821,563
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Total Liabilities and Shareholders' Equity. . . . . $ 3,390,127 $ 2,923,094
=============== ==============
Note: Certain reclassifications of prior year amounts have been made to conform
with the current year presentation.