HOUSTON, Feb. 22 /PRNewswire-FirstCall/ -- Weingarten Realty
Investors (NYSE:WRI) announced today the results of its fourth
quarter and year ended December 31, 2006, which included
substantial progress on its long-term growth strategy. The
highlights included: * Net income available to common shareholders,
on a diluted basis, for the fourth quarter of 2006 totaled $53.2
million, or $.59 per share, as compared to $.54 per share for the
fourth quarter of 2005, an increase of 9%. For the year ended
December 31, 2006, net income was $300.4 million or $3.27 per share
compared to $2.31 per share a year earlier, an increase of 42%. The
increase over the prior year was primarily the result of strong
gains on sales of properties; * Funds from operations (FFO), a
non-GAAP financial indicator considered one of the most meaningful
performance measurements within the REIT industry, on a diluted per
share basis, was $.72 for the fourth quarter of 2006 compared to
$.68 for the same quarter of the previous year, a 6% increase. For
the full year, FFO per share, on a diluted basis, was $2.83
compared to $2.72 a year ago, a 4% increase; * The Company
purchased ten shopping centers and three industrial projects during
the fourth quarter, adding 1.2 million square feet to its portfolio
representing a gross investment, including our joint venture
partners' interests, of $402 million. Gross acquisitions for the
full year of 2006, including our joint venture partners' interests,
totaled a record $1.0 billion; * As previously announced, two new
strategic joint ventures were formed in the fourth quarter with two
outstanding partners -- TIAA-CREF Global Real Estate and AEW
Capital Management on behalf of one of its institutional clients; *
Dispositions of non-core properties for the fourth quarter totaled
688,000 square feet, provided proceeds of $53 million, and
generated gains of $27 million. Non-core property dispositions for
the full year totaled $316 million and generated gains of $150
million; * Merchant development income for the fourth quarter
totaled $1.7 million. For the full year, merchant development
activities provided $6.9 million (net of tax) or $0.08 of FFO per
share; * Same-property net operating income increased 4.2% in the
fourth quarter with the retail portfolio up 4.3%. During the
quarter, the Company completed 283 new leases or renewals totaling
1.6 million square feet with an average rental rate increase of
10.3% on a GAAP basis or 8.2% on a cash basis; * As previously
announced, subsequent to quarter-end, we issued $200 million of
6.50% Series F Cumulative Redeemable Preferred Shares; * The Board
of Trust Managers increased the cash dividend for 2007 to an
annualized $1.98 per common share, up from $1.86 per common share
paid in 2006, a 6.5% increase. The first quarter 2007 dividend of
$0.495 per common share is payable on March 15, 2007 to
shareholders of record on March 8, 2007. This extends the Company's
record of increasing the dividend to 22 consecutive years; and *
The Board of Trust Managers also declared dividends on the
Company's preferred shares. Dividends related to the 6.75% Series D
Cumulative Redeemable Preferred Shares (NYSE:WRIPrD) are $0.421875
per share for the quarter. Dividends on the 6.95% Series E
Cumulative Redeemable Preferred Shares (NYSE:WRIPrE) are $0.434375
per share for the same period. Dividends on the newly issued 6.50%
Series F Cumulative Redeemable Preferred Shares (NYSE:WRIPrF) for
this quarter are $0.20764 per share, prorated based on the
settlement date of January 30, 2007. All preferred share dividends
are payable on March 15, 2007 to shareholders of record on March 8,
2007. Strategic Growth Plan In the first quarter of 2006, we
articulated a new long-term growth strategy with a planned three
year implementation. The key elements of this strategy are as
follows: * A much greater focus on new development, including
merchant development, with $300 million in annual new development
completions beginning in 2009. Projected returns from our new
development pipeline are approximately 9%. * Increased use of joint
ventures for acquisitions including the recapitalization (or
partial sale) of existing assets, which provide the opportunity to
further increase returns on investment. * Further recycling capital
through the active disposition of non-core properties and
reinvesting the proceeds into properties with strong barriers to
entry within high growth metropolitan markets. This, combined with
our continuous focus on our existing assets, produces a higher
quality portfolio with higher occupancy rates and stronger internal
revenue growth. During 2006, we made excellent progress in the
execution of this long-term growth strategy as described in the
following sections on new development, acquisitions and joint
ventures, and capital recycling. New Development Currently the
Company has 30 properties in various stages of development, up from
10 properties under development at the end of 2005. We have
invested $204 million to-date on these projects and, at completion,
we estimate our total investment to be $650 million. These
properties are generally slated to open over the next two years
with a projected return on investment in excess of 9% when
completed. In addition to these projects, the Company has
significantly increased its development pipeline with nine
development sites under contract that have a projected final
investment of $218 million. In addition to the nine development
sites under contract, we have 22 development sites under
preliminary pursuit. Merchant development is a new program in which
we develop a project with the objective of selling all or part of
it, instead of retaining it in our portfolio on a long-term basis.
The Company generated $6.9 million (after-tax) from this program in
2006 adding $0.08 of FFO per share. "We are making excellent
progress in new development including merchant development
activities. During 2006, we tripled the number of properties under
development and invested $167 million in our new development
program. We are confident that we will achieve our goal of $300
million of annual completions beginning in 2009. We are also very
pleased to have contributed $0.08 of FFO per share from merchant
development activities in the first year of this new program and
expect continued strong growth over the next three years," stated
Robert Smith, Senior Vice President and Director of New
Development. Acquisitions and Joint Ventures In 2006, we completed
a record $1.0 billion of acquisitions. Properties acquired in 2006
included 34 shopping centers and 6 industrial properties that added
a total of 4.0 million square feet. During 2006, just over half of
our acquisitions were through institutional joint ventures. We
formed the following new joint venture partnerships in 2006: * We
acquired seven neighborhood/community shopping centers in South
Florida in a new joint venture with TIAA-CREF Global Real Estate; *
In partnership with AEW Capital Management, on behalf of its
institutional client, we acquired four grocery-anchored centers and
two power centers in Oregon and Washington state, marking our entry
into two desirable metropolitan markets -- Portland, Oregon and
Seattle/Tacoma, Washington; * We also formed a joint venture with
Mercantile Real Estate Advisors and its client, the AFL-CIO
Building Investment Trust to acquire and operate industrial
properties within target markets across the United States. The
partners plan to invest an additional $375 million in total capital
over the next two years. "Acquisitions are critical to Weingarten's
growth and a key component of our strategy. However, intense
competition for good quality assets has driven asset prices up and
returns down. Partnering with institutional investors through joint
ventures enables us to acquire high quality assets in our target
markets while also meeting our financial return objectives. We
benefit from access to lower-cost capital as well as leveraging our
expertise to provide fee-based services, such as the acquisition,
leasing, and asset management of properties, for these joint
ventures," stated Steve Richter, Executive Vice President and Chief
Financial Officer. Capital Recycling During 2006, the Company sold
21 shopping centers and four industrial projects representing 3.6
million square feet. Sale proceeds from these dispositions totaled
$316 million and generated gains of $150 million. The proceeds from
these dispositions, combined with the joint venture program,
provided more than 70% of the capital required for the 2006
acquisitions and reduced the need to issue additional common
equity. "Capitalizing on strong demand and favorable prices for
real estate assets during 2006, we completed a record level of
asset sales. Dispositions are part of an on-going portfolio
management process where we prune our portfolio of properties that
do not meet our geographic or growth targets and provide capital to
recycle into properties that have strong barrier-to-entry locations
within high growth metropolitan markets. Over time, this produces a
portfolio with higher occupancy rates and stronger internal revenue
growth. We are beginning to see the success of this strategy in the
strong retail same store net operating income growth of 4.3% for
the fourth quarter," stated Johnny Hendrix, Executive Vice
President/Asset Management. Outlook "We are making great progress
in the implementation of the three year strategic plan we announced
one year ago. Our accomplishments, as described above, include a
substantial increase in new development, including merchant
development activities, record levels of acquisitions and non-core
asset dispositions, three new institutional joint venture
partnerships that will have a total investment of nearly $1 billion
when fully funded, and a significant improvement in the quality of
our portfolio, producing stronger internal revenue growth. We
delivered good financial performance in 2006 and raised the
dividend for 2007 by 6.5%, extending our record of dividend
increases to 22 consecutive years. We delivered a total return to
shareholders (share price appreciation plus dividends) of 27.5% in
2006 and a compound total annual return of 15.0% for the 21 years
since the company's IPO in 1985. Two-thousand-six was a remarkably
successful year in which we created the foundation for future
growth while also exceeding our goals for the year. For 2007, we
will continue the aggressive implementation of our three year
strategic growth plan. We expect to generate FFO per share in the
range of $2.98 to $3.04. Our guidance includes the short-term
negative FFO impact created by our substantial disposition program
as well as the planned contribution of properties to new joint
ventures. While these dispositions have a short-term negative FFO
impact, it is a key part of this plan and will contribute to much
stronger growth and profitability over the long-term. Overall, I am
very optimistic about our ability to execute our strategic growth
plan and, when fully implemented, to produce strong FFO per share
growth," stated Drew Alexander, President and Chief Executive
Officer. Conference Call Information The Company also announced
that it will host a live webcast of its quarterly conference call
on Friday, February 23, 2007 at 10:00 a.m. Central Time. The live
webcast can be accessed via the Company's Web site at
http://www.weingarten.com/ . A replay is also available through the
Company's Web site starting approximately two hours following the
live call or can be heard by calling 877-519-4471, identification
number 8298578 for the following 24 hours. About Weingarten Realty
Investors As one of the largest real estate investment trusts
listed on the New York Stock Exchange, Weingarten Realty Investors
is focused on delivering solid returns to shareholders by actively
developing, acquiring, and intensively managing properties in 22
states that span the United States from coast to coast. The
Company's portfolio of 389 properties includes 322 neighborhood and
community shopping centers and 67 industrial properties,
aggregating 47.5 million square feet. Weingarten has one of the
most diversified tenant bases of any major REIT in its sector, with
the largest of its 5,500 tenants comprising less than 3% of its
rental revenues. To learn more about the Company's operations and
growth strategies, please visit http://www.weingarten.com/ .
Forward-Looking Statements 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 that may impact the Company's performance.
Financial Statements Weingarten Realty Investors (in thousands,
except per share amounts) Three Months Ended Twelve Months Ended
STATEMENTS OF CONSOLIDATED INCOME December 31, December 31, AND
FUNDS FROM OPERATIONS 2006 2005 2006 2005 (Unaudited) (Unaudited)
Rental Income $144,380 $128,799 $554,361 $504,034 Other Income
2,227 1,168 7,019 6,367 Total Revenues 146,607 129,967 561,380
510,401 Depreciation and Amortization 33,446 30,914 127,613 117,062
Operating Expense 27,632 21,583 91,422 76,630 Ad Valorem Taxes
14,057 13,606 65,528 58,923 General and Administrative Expense
7,301 4,256 23,801 17,379 Total Expenses 82,436 70,359 308,364
269,994 Operating Income 64,171 59,608 253,016 240,407 Interest
Expense (40,056) (34,236) (146,943) (130,761) Interest and Other
Income 4,226 1,110 9,045 2,867 Equity in Earnings of Joint
Ventures, net 3,789 1,822 14,655 6,610 Income Allocated to Minority
Interests (1,437) (1,530) (6,414) (6,060) Gain (Loss) on Sale of
Properties (4,507) 195 22,467 22,306 Gain on Land and Merchant
Development Sales 986 804 7,166 804 Benefit (Provision) for Income
Taxes 35 --- (1,366) --- Income From Continuing Operations 27,207
27,773 151,626 136,173 Operating Income From Discontinued
Operations 239 3,853 7,864 18,021 Gain on Sale of Properties From
Discontinued Operations 26,940 19,777 145,520 65,459 Income from
Discontinued Operations 27,179 23,630 153,384 83,480 Net Income
54,386 51,403 305,010 219,653 Less: Preferred Share Dividends 2,525
2,525 10,101 10,101 Net Income Available to Common
Shareholders--Basic $51,861 $48,878 $294,909 $209,552 Net Income
Per Common Share--Basic $0.61 $0.55 $3.36 $2.35 Net Income
Available to Common Shareholders--Diluted $53,191 $50,209 $300,362
$214,770 Net Income Per Common Share-- Diluted $0.59 $0.54 $3.27
$2.31 Funds from Operations: Net Income Available to Common
Shareholders $51,861 $48,878 $294,909 $209,552 Depreciation and
Amortization 32,204 31,976 126,713 122,203 Depreciation and
Amortization of Unconsolidated Joint Ventures 1,751 961 5,079 3,539
Gain on Sale of Properties (22,446) (19,976) (168,004) (87,569)
(Gain) Loss on Sale of Properties of Unconsolidated Joint Ventures
2 6 (4,052) 8 Funds from Operations--Basic $63,372 $61,845 $254,645
$247,733 Funds from Operations Per Common Share--Basic $0.74 $0.69
$2.90 $2.78 Funds from Operations--Diluted $64,702 $63,176 $260,098
$252,951 Funds from Operations Per Common Share--Diluted $0.72
$0.68 $2.83 $2.72 Weighted Average Shares Outstanding--Basic 85,476
89,336 87,719 89,224 Weighted Average Shares Outstanding--Diluted
89,613 93,327 91,779 93,166 December 31, December 31, 2006 2005
CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) Property
$4,445,888 $4,033,579 Accumulated Depreciation (707,005) (679,642)
Investment in Real Estate Joint Ventures 203,839 84,348 Notes
Receivable from Real Estate Joint Ventures and Partnerships 3,971
42,195 Unamortized Debt and Lease Costs 112,873 95,616 Accrued Rent
and Accounts Receivable, net 78,893 60,905 Cash and Cash
Equivalents 71,003 42,690 Restricted Deposits and Mortgage Escrows
94,466 11,747 Other 71,612 46,303 Total Assets $4,375,540
$3,737,741 Debt $2,900,952 $2,299,855 Accounts Payable and Accrued
Expenses 132,821 102,143 Other 128,306 102,099 Total Liabilities
3,162,079 2,504,097 Minority Interest 87,680 83,358 Preferred
Shares of Beneficial Interest 4 4 Common Shares of Beneficial
Interest 2,582 2,686 Additional Paid in Capital 1,136,481 1,288,432
Accumulated Dividends in Excess of Net Income (786) (132,786)
Accumulated Other Comprehensive Loss (12,500) (8,050) Total
Shareholders' Equity 1,125,781 1,150,286 Total Liabilities and
Shareholders' Equity $4,375,540 $3,737,741 DATASOURCE: Weingarten
Realty Investors CONTACT: Richard Summers of Weingarten Realty
Investors, +1-713-866-6050 Web site: http://www.weingarten.com/
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