WRI Weingarten Realty Investors

Weingarten Realty (NYSE: WRI) announced today the results of its operations for the fourth quarter and full year ended December 31, 2010. The supplemental financial package with additional information can be found on the company’s website under the Investor Relations tab.

Fourth Quarter Operating and Financial Highlights

• Recurring Funds from Operations (“FFO”), was $51.6 million or $0.43 per diluted share. Reported FFO was $0.33 per diluted share for the quarter;
• Same Property Net Operating Income (“NOI”) increased by 0.4% over the fourth quarter of the prior year, with retail properties up 0.3% and industrial up 0.7%;
• Retail occupancy improved to 93.0% during the fourth quarter, up from 91.8% a year ago; and
• The Board of Trust Managers increased the common dividend 5.8% to $0.275 per quarter or $1.10 annually.

Financial Results

The Company reported a net loss attributable to common shareholders of $2.6 million or $0.02 per diluted share for the fourth quarter of 2010, as compared to net income of $72.6 million or $0.60 per share for the same period in 2009. Net income attributable to common shareholders for the full year 2010 was $10.7 million or $0.09 per diluted share compared to $135.6 million or $1.23 per share for the full year 2009.

Going forward, Weingarten will use Recurring FFO which excludes the redemption of notes, impairments, acquisition costs and gains on land and merchant development sales, as the Company believes these items are not indicative of on-going operations.

Recurring FFO, which excludes the non-cash impairment for the quarter ended December 31, 2010, was $0.43 per diluted share or $51.6 million. For the same quarter last year, Recurring FFO was $0.45 per diluted share or $54.5 million. The decrease in Recurring FFO from the prior year was primarily due to a reduction in lease cancellation income. Reported FFO which includes the above adjustments, was $39.1 million or $0.33 per diluted share for the fourth quarter of 2010 compared to $51.6 million or $0.42 per diluted share for 2009.

The current quarter non-cash impairment of $0.10 per diluted share was the result of a reduction in the fair value of municipal bonds held by the Company related to the Sheridan development.

Recurring FFO for the full year ended December 31, 2010 was $204.9 million or $1.70 per diluted share compared to $223.0 million or $2.02 per diluted share for the full year ended December 31, 2009. This year-over-year reduction is primarily a result of dilution from our April 2009 common share offering, the full year effect of our 2009 disposition program and reduced lease cancellation income. Reported FFO for the full year ended December 31, 2010 was $171.1 million or $1.42 per diluted share compared to $217.3 million or $1.97 per diluted share for the full year ended December 31, 2009.

A reconciliation of net income attributable to common shareholders to Reported FFO and Recurring FFO is listed on page 5 of the supplemental package.

Operating Results

Same Property Net Operating Income during the fourth quarter increased by 0.4%, versus a year ago, with retail properties up 0.3%. These results are primarily driven by leases that were previously signed and commenced during the quarter.

The Company produced strong leasing results again during the fourth quarter with 382 new leases and renewals, totaling 1.7 million square feet and which represents $19.8 million of annual revenue. The 382 transactions were comprised of 182 new leases and 200 renewals, which represent annual revenues of $9.3 million and $10.5 million, respectively.

Retail occupancy increased to 93.0% in the fourth quarter from 92.6% in the third quarter 2010. Overall, occupancy increased to 91.9% compared to 91.1% during the third quarter of 2010. Industrial occupancy increased to end the year at 88.8% leased.

“We are pleased with the results our team achieved throughout the year. Leasing velocity remained high allowing us to increase retail occupancy by 120 basis points from a year ago. Spaces over 10,000 square feet are 97.5% leased and rental rates have improved. We had a successful year,” said Johnny Hendrix, Executive Vice President and Chief Operating Officer.

Acquisitions

During the quarter, the Company closed on five retail acquisitions representing an investment of $167.8 million.

1. Village Plaza at Bunker Hill is a 491,000 square foot project located in Houston, Texas along the heavily trafficked I-10 Freeway that is traveled by 246,000 cars per day. Key tenants include an HEB supermarket, Academy Sports and Outdoors, Babies R Us and PetSmart, along with other great retailers. This center boasts a three mile population of over 150,000 with an average household income of $110,000 per year. WRI acquired 58% of Bunker Hill in a joint venture with the current owner/developer, Fidelis Realty Partners.

2. Edgewater Marketplace located in Denver, CO is an infill property with a population density of 159,000 within a three mile radius of the center. The center is anchored by King Sooper (Kroger), the supermarket leader in Denver and also includes Target, which owns its facility. The 145,000 square foot project is 98% leased.

3. Palms of Carrollwood is a 168,000 square foot shopping center located in Tampa, FL anchored by The Fresh Market and is currently 89.0% leased. The Fresh Market is a European style high-end supermarket that operates 100 stores in 20 states and caters to clientele focused on perishable goods and superior service. The center benefits from population densities of over 100,000 within a three mile radius.

4. Desert Village, a 102,000 square foot retail shopping center located in North Scottsdale, AZ, is anchored by AJ’s Fine Foods and is 95% leased. AJ’s is a boutique, high-end supermarket that operates thirteen locations within Arizona. This quality location is supported by average household incomes of $168,000 in the trade area.

5. Stoneridge Shopping Center is a 178,000 square foot retail shopping center located in Moreno Valley, CA, anchored by a Super Target and Kohl’s, both of which own their facilities. Other significant tenants include Best Buy and Office Max. WRI purchased a 67% interest in this property through a joint venture. This recently developed center is currently 88% leased allowing for further upside as occupancy improves.

“Our “boots on the ground” strategy paid off this year as Weingarten was able to invest over $196 million in high-quality assets in our target markets through a combination of long standing relationships and in-depth market knowledge. On average, the eight properties acquired in 2010 will generate around a 7% return,” said Drew Alexander, President and Chief Executive Officer.

Financing

During the quarter, the Company settled $296 million of fixed to floating rate swaps that were purchased in December of 2009. These sales resulted in a gain of $8.3 million which will be primarily amortized over the remaining term of the related debt. This reduced floating rate debt as a percentage of total debt to under 10% at December 31, 2010.

“Our balance sheet remains strong with sufficient liquidity to easily handle our 2011 maturities which total $212.3 million. We have $450 million of capacity under our revolving line of credit available at December 31, 2010 for acquisitions, new development or to handle any debt maturities,” said Steve Richter, Executive Vice President and Chief Financial Officer.

Dividend

On February 25, 2011, the Board of Trust Managers declared an increase in the common dividend to $0.275 per share for the first quarter of 2011. This represents a 5.8% increase resulting in an annualized dividend of $1.10 per share. The dividend is payable in cash on March 15, 2011 to shareholders of record on March 8, 2011.

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 6.50% Series F Cumulative Redeemable Preferred Shares (NYSE:WRIPrF) are $0.40625 per share for the quarter. All preferred dividends are also payable on March 15, 2011 to shareholders of record on March 8, 2011.

Recurring FFO Guidance

The Company issued full year Recurring FFO guidance in the range of $1.72 to $1.82 per diluted share. A full listing of guidance and assumptions is included on page 46 of the supplemental package.

Conference Call Information

The Company also announced that it will host a live webcast of its quarterly conference call on February 28, 2011 at 10:00 a.m. Central Time. The live webcast can be accessed via the Company’s website at www.weingarten.com. Alternatively, if you are not able to access the call on the web, you can listen live by phone by calling (877) 763-1324 (conference ID # 35296878). A replay and Podcast will be available through the Company’s web site starting approximately two hours following the live call.

About Weingarten Realty Investors

Weingarten Realty Investors (NYSE: WRI) is a commercial real estate owner, manager and developer. At December 31, 2010, the Company owned or operated under long-term leases, either directly or through its interest in real estate joint ventures or partnerships, a total of 383 developed income-producing properties and 9 properties under various stages of construction and development. The total number of properties includes 312 neighborhood and community shopping centers located in 22 states spanning the country from coast to coast. The Company also owns 77 industrial projects located in California, Florida, Georgia, Tennessee, Texas and Virginia and three other operating properties located in Arizona and Texas. At December 31, 2010, the Company’s portfolio of properties was approximately 71.5 million square feet. To learn more about the Company’s operations and growth strategies, please visit 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 December 31, December 31, CONDENSED CONSOLIDATED STATEMENTS OF INCOME 2010 2009 2010 2009 AND FUNDS FROM OPERATIONS (Unaudited) (Unaudited) Rentals, net $ 136,711 $ 136,454 $ 540,754 $ 554,014 Other Income   3,020     5,712     13,913     17,974   Total Revenues   139,731     142,166     554,667     571,988   Depreciation and Amortization 39,661 36,392 151,101 147,877 Operating Expense 28,591 27,626 105,745 102,936 Real Estate Taxes, net 15,945 16,196 64,921 70,668 Impairment Loss 12,315 2,209 33,317 34,983 General and Administrative Expense   5,897     6,732     25,000     25,930   Total Expenses   102,409     89,155     380,084     382,394   Operating Income 37,322 53,011 174,583 189,594 Interest Expense, net (37,032 ) (37,960 ) (148,794 ) (153,207 ) Interest and Other Income, net 2,920 2,923 9,825 11,427 Equity in Earnings of Real Estate Joint Ventures and Partnerships, net 3,568 2,765 12,889 5,548 (Loss) Gain on Redemption of Convertible Senior Unsecured Notes (135 ) 25,311 Gain on Land and Merchant Development Sales 69 18,688 (Provision) Benefit for Income Taxes   (85 )   702     (240 )   (6,337 ) Income from Continuing Operations   6,693     21,510     48,128     91,024   Operating (Loss) Income from Discontinued Operations (7 ) 12 3,221 Gain on Sale of Property from Discontinued Operations     48,380     618     55,765   Income from Discontinued Operations 48,373 630 58,986 Gain on Sale of Property   1,512     12,892     2,480     25,266   Net Income 8,205 82,775 51,238 175,276 Less:Net Income Attributable to Noncontrolling Interests   (1,939 )   (1,280 )   (5,032 )   (4,174 ) Net Income Adjusted for Noncontrolling Interests 6,266 81,495 46,206 171,102 Less:Preferred Share Dividends   (8,869 )   (8,869 )   (35,476 )   (35,476 ) Net (Loss) Income Attributable to Common Shareholders--Basic   ($2,603 ) $ 72,626   $ 10,730   $ 135,626   Earnings Per Common Share--Basic   ($0.02 ) $ 0.61   $ 0.09   $ 1.24   Net (Loss) Income Attributable to Common Shareholders--Diluted   ($2,603 ) $ 73,087   $ 10,730   $ 135,626   Earnings Per Common Share--Diluted   ($0.02 ) $ 0.60   $ 0.09   $ 1.23     Funds from Operations: Net (Loss) Income Attributable to Common Shareholders ($2,603 ) $ 72,626 $ 10,730 $ 135,626 Depreciation and Amortization 37,944 34,765 143,393 144,211 Depreciation and Amortization of Unconsolidated Joint Ventures 5,290 5,018 20,085 18,433 Gain on Sale of Property (1,494 ) (61,270 ) (3,069 ) (81,006 ) Loss (Gain) on Sale of Property of Unconsolidated Joint Ventures       1     (4 ) Funds from Operations--Basic $ 39,137   $ 51,139   $ 171,140   $ 217,260   Funds from Operations Per Common Share--Basic $ 0.33   $ 0.43   $ 1.43   $ 1.98   Funds from Operations--Diluted $ 39,137   $ 51,600   $ 171,140   $ 217,260   Funds from Operations Per Common Share--Diluted $ 0.33   $ 0.42   $ 1.42   $ 1.97   Weighted Average Shares Outstanding--Basic   120,044     119,515     119,935     109,546   Weighted Average Shares Outstanding--Diluted   120,044     122,162     120,780     110,178     December 31, December 31, 2010 2009 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited) Property $ 4,777,794 $ 4,658,396 Accumulated Depreciation (971,249 ) (856,281 ) Investment in Real Estate Joint Ventures and Partnerships, net 347,526 315,248 Notes Receivable from Real Estate Joint Ventures and Partnerships 184,788 317,838 Unamortized Debt and Lease Costs, net 116,437 103,396 Accrued Rent and Accounts Receivable, net 95,859 96,372 Cash and Cash Equivalents 23,859 153,584 Restricted Deposits and Mortgage Escrows 10,208 12,778 Other, net   222,633     89,054   Total Assets $ 4,807,855   $ 4,890,385     Debt, net $ 2,589,448 $ 2,531,847 Accounts Payable and Accrued Expenses 126,767 137,727 Other, net   111,383     114,155   Total Liabilities   2,827,598     2,783,729     Commitments and Contingencies     Preferred Shares of Beneficial Interest 8 8 Common Shares of Beneficial Interest 3,630 3,615 Accumulated Additional Paid-In Capital 1,969,905 1,958,975 Net Income Less Than Accumulated Dividends (151,780 ) (37,350 ) Accumulated Other Comprehensive Loss   (21,774 )   (23,958 ) Shareholders' Equity 1,799,989 1,901,290 Noncontrolling Interests   180,268     205,366   Total Liabilities, Shareholders' Equity and Noncontrolling Interests $ 4,807,855   $ 4,890,385