Weingarten Realty (NYSE: WRI) announced today the results of its
operations for the fourth quarter and full year ended December 31,
2011. The supplemental financial package can be found on the
Company’s website under the Investor Relations tab.
Fourth Quarter Operating and Financial Highlights
- Recurring Funds from Operations (“FFO”)
increased 11.6% to $0.48 per diluted share over the same quarter of
last year;
- Same Property Net Operating Income
(“NOI”) increased by 1.4% over the fourth quarter of the prior
year, with retail properties up 1.8%;
- Retail occupancy improved to 93.0%
during the fourth quarter, up from 92.8% last quarter; and
- The Board of Trust Managers increased
the common dividend per share 5.5% to $0.29 per quarter or $1.16 on
an annualized basis.
Financial Results
The Company reported net income attributable to common
shareholders of $22.2 million or $0.18 per diluted share
(hereinafter “per share”) for the fourth quarter of 2011, as
compared to a net loss of $2.6 million or $0.02 per share for the
same period in 2010. For the full year 2011, the Company reported a
net loss of $19.9 million or $0.17 per share compared to net income
of $10.7 million or $0.09 per share for the full year 2010.
Included in net income for both 2011 and 2010 were non-cash
impairments of $0.65 and $0.28 per share, respectively.
In accordance with the recently clarified definition of FFO
issued by the National Association of Real Estate Investment
Trusts, FFO excludes the effect of impairments of operating
properties. Impairments of non-operating assets such as land held
for future development are included in Reported FFO but are
excluded in the calculation of Recurring FFO.
For the current quarter, Reported FFO was $58.1 million or $0.48
per share compared to $39.0 million or $0.33 per share for 2010.
Reported FFO for 2011 excludes a non-cash impairment of an
operating property of $0.02 per share. Recurring FFO for the fourth
quarter of 2011 was $0.48 per share or $58.5 million. For the same
quarter last year, Recurring FFO was $0.43 per share or $51.6
million which excludes an impairment of a non-operating asset of
$.10 per share. This increase in Recurring FFO per share of 11.6%
over the prior year was primarily due to the Company’s acquisition
and new development programs and reduced interest expense due to
favorable refinancing transactions.
For the full year ended December 31, 2011, Reported FFO was
$173.3 million or $1.44 per share compared to $187.0 million or
$1.55 per share for 2010. Reported FFO excludes impairments of
operating properties of $0.30 and $0.13 per share in 2011 and 2010,
respectively. Recurring FFO for 2011 was $217.7 million or $1.81
per share compared to $204.9 million or $1.70 per share for 2010.
Recurring FFO excludes additional impairments of non-operating
assets of $0.36 and $0.15 per share in 2011 and 2010, respectively.
The increase in Recurring FFO, consistent with the quarter, was
primarily due to the Company’s acquisition and new development
programs and reduced interest expense.
A reconciliation of net income to both Reported and Recurring
FFO is shown on the attached financial statement page and is also
shown on page 5 of the supplemental package. A reconciliation
presenting the effects of the clarified NAREIT FFO definition is
presented on pages 46-48 of the supplemental package.
Operating Results
Same Property NOI during the fourth quarter increased by 1.4%
versus a year ago, with retail properties up 1.8%. These results
are primarily driven by leases that were previously signed but
commenced during the quarter.
The Company produced strong leasing results again during the
fourth quarter with 425 new leases and renewals totaling 1.8
million square feet and representing $20 million of annual revenue.
The 425 transactions were comprised of 188 new leases and 237
renewals, representing annual revenues of $8.8 million and $11.2
million, respectively.
Retail occupancy increased to 93.0% in the fourth quarter from
92.8% in the third quarter of 2011. Industrial occupancy increased
to 89.5% compared to 87.9% during the third quarter of 2011.
Overall, occupancy increased to 92.1% compared to 91.6% during the
third quarter of 2011.
“We are proud of the results our team achieved throughout the
year. We were especially successful in leasing spaces under 10,000
square feet where we increased retail occupancy by 110 basis points
during the year, a definite sign of an improving operating
environment and the strength of our quality portfolio,” said Johnny
Hendrix, Executive Vice President and Chief Operating Officer.
Capital Recycling
During the quarter, the Company sold five retail shopping
centers, an industrial building and several land parcels for a
total of $62.0 million. For the year, dispositions totaled $118.5
million and subsequent to quarter-end five other retail properties
and two land parcels have been sold for $37.1 million.
The Company redeployed this capital into outstanding new
investments. Acquisitions during the year totaled $68.5 million and
spending on existing new development projects was an additional
$35.2 million. During the quarter, the Company entered into a joint
venture to develop a 258,000 square foot shopping center near
Alexandria, Virginia anchored by Wegman’s, one the most successful
supermarket operators on the East coast. The project is located
adjacent to Fort Belvoir, an ever-expanding Army facility just
outside the Beltway. The center is nearly 70% pre-leased and
represents an estimated final investment of $62 million. The
Company also commenced development of two other shopping centers
during the year anchored by Kroger and Whole Foods.
“Our ability to execute our disposition plan has allowed us to
prune certain lower-tier assets and recycle that capital into
higher quality investments in our target markets, further elevating
the quality of the Company’s already outstanding portfolio. We are
especially pleased with the closing of Hilltop Village Shopping
Center as our entry into the dynamic D.C. market,” said Drew
Alexander, President and Chief Executive Officer.
Dividend
On February 29, 2012, the Board of Trust Managers declared an
increase in the common dividend to $0.29 per share for the first
quarter of 2012. This represents a 5.5% increase resulting in an
annualized dividend of $1.16 per share. The dividend is payable in
cash on March 15, 2012 to shareholders of record on March 12,
2012.
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, 2012 to shareholders of record on March 12, 2012.
FFO Guidance
The Company issued full year 2012 Recurring FFO guidance in the
range of $1.81 to $1.91 per share which assumes $300-$400 million
of dispositions and an increase in Same Property NOI of 4-5%. A
full listing of guidance and assumptions is included on page 50 of
the supplemental package.
Conference Call Information
The Company also announced that it will host a live webcast of
its quarterly conference call on March 1, 2012 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, 2011, 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 380 developed income-producing properties
and 11 properties under various stages of construction and
development. The total number of properties includes 313
neighborhood and community shopping centers located in 23 states
spanning the country from coast to coast. The Company also owns 75
industrial projects located in California, Florida, Georgia,
Tennessee, Texas and Virginia and three other operating properties
located in Arizona and Texas. At December 31, 2011, the Company’s
portfolio of properties was approximately 76.1 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, 2011
2010 2011 2010 CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) (Unaudited)
Rentals, net $ 132,548 $ 131,846 $ 526,533 $ 521,376 Other Income
3,362 2,982 15,028
13,708 Total Revenues 135,910 134,828
541,561 535,084 Depreciation and
Amortization 38,425 38,360 152,983 145,893 Operating Expense 26,490
27,703 101,657 102,138 Real Estate Taxes, net 15,331 15,081 64,243
61,537 Impairment Loss 3,101 12,315 58,734 33,317 General and
Administrative Expense 6,589 5,897
25,528 24,993 Total Expenses
89,936 99,356 403,145
367,878 Operating Income 45,974 35,472 138,416 167,206
Interest Expense, net (31,752 ) (37,028 ) (141,757 ) (148,152 )
Interest and Other Income, net 2,078 2,920 5,062 9,825 Equity in
Earnings of Real Estate Joint Ventures and Partnerships, net 3,892
3,568 7,834 12,889 Loss on Redemption of Convertible Senior
Unsecured Notes (135 ) Provision for Income Taxes (170 )
(92 ) (395 ) (180 ) Income from Continuing
Operations 20,022 4,840 9,160
41,453 Operating Income (Loss) from
Discontinued Operations 2,770 1,853 (4,373 ) 6,687 Gain on Sale of
Property from Discontinued Operations 9,626
196 10,215 1,093 Income from
Discontinued Operations 12,396 2,049 5,842 7,780 Gain on Sale of
Property 152 1,316 1,737
2,005 Net Income 32,570 8,205 16,739 51,238 Less: Net
Income Attributable to Noncontrolling Interests (1,528 )
(1,939 ) (1,118 ) (5,032 ) Net Income Adjusted
for Noncontrolling Interests 31,042 6,266 15,621 46,206 Less:
Preferred Share Dividends (8,869 ) (8,869 )
(35,476 ) (35,476 ) Net Income (Loss) Attributable to Common
Shareholders -- Basic $ 22,173 $ (2,603 ) $ (19,855 ) $
10,730 Net Income (Loss) Attributable to Common
Shareholders -- Diluted $ 22,173 $ (2,603 ) $ (19,855 ) $
10,730
FUNDS FROM OPERATIONS Numerator: Net
Income (Loss) Attributable to Common Shareholders $ 22,173 $ (2,603
) $ (19,855 ) $ 10,730 Depreciation and Amortization 37,271 37,944
150,668 143,393 Depreciation and Amortization of Unconsolidated
Real Estate Joint Ventures and Partnerships 5,605 5,290 22,887
20,085 Impairment of Operating Properties and Real Estate Equity
Investments 2,780 28,995 15,948 Impairment of Operating Properties
of Unconsolidated Real Estate Joint Ventures and Partnerships 7,025
115 (Gain) on Acquisition (4,559 ) (Gain) on Sale of Property
(9,717 ) (1,494 ) (11,846 ) (3,069 ) (Gain) Loss on Sale of
Property of Unconsolidated Real Estate Joint Ventures and
Partnerships (104 ) 10 (194 )
Funds from Operations -- Basic 58,112 39,033 173,325 187,008 Funds
from Operations Attributable to Operating Partnership Units
Funds from Operations -- Diluted 58,112 39,033 173,325
187,008 Adjustments for Recurring FFO: Other Impairment Loss, net
of tax 355 12,315 42,417 17,369 Loss on Redemption of Convertible
Senior Unsecured Notes 135 Extinguishment of Debt Cost, net 2,679
Acquisitions Costs 19 241 295 399 Litigation Settlement, net of tax
(1,040 ) Recurring Funds from
Operations -- Diluted $ 58,486 $ 51,589 $ 217,676
$ 204,911 Denominator: Weighted Average Shares
Outstanding -- Basic 120,422 120,044
120,331 119,935 120,331 Weighted
Average Shares Outstanding -- Diluted 121,237
120,044 120,331 120,780
PER SHARE DATA Earnings Per Common Share--Basic $ 0.18
$ (0.02 ) $ (0.17 ) $ 0.09 Earnings Per Common
Share--Diluted $ 0.18 $ (0.02 ) $ (0.17 ) $ 0.09
FFO - Per Diluted Share Net Income (Loss) Attributable to
Common Shareholders per Share $ 0.18 $ (0.02 ) $ (0.17 ) $ 0.09
Adjustments for Reported FFO: Impairment of Operating Properties
0.02 0.30 0.13 Depreciation, Amortization and Other Adjustments
0.28 0.35 1.31
1.33 Reported Funds from Operations -- Diluted per Share $
0.48 $ 0.33 $ 1.44 $ 1.55 Adjustments for Recurring FFO: Other
Impairment Loss, net of tax 0.10 0.36 0.15 All Other Adjustments
0.01 Recurring Funds from
Operations -- Diluted per Share $ 0.48 $ 0.43 $ 1.81
$ 1.70
Weingarten Realty
Investors Financial Statements (in thousands)
December 31, December 31,
2011 2010 CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited) (Audited) ASSETS
Property $ 4,688,526 $ 4,777,794 Accumulated Depreciation
(1,059,531 ) (971,249 ) Property Held for Sale, net 73,241
Investment in Real Estate Joint Ventures and Partnerships, net
341,608 347,526 Notes Receivable from Real Estate Joint Ventures
and Partnerships 149,204 184,788 Unamortized Debt and Lease Costs,
net 115,191 116,437 Accrued Rent and Accounts Receivable, net
86,530 95,859 Cash and Cash Equivalents 13,642 23,859 Restricted
Deposits and Mortgage Escrows 11,144 10,208 Other, net
168,671 222,633 Total Assets $ 4,588,226
$ 4,807,855 LIABILITIES AND EQUITY
Debt, net $ 2,531,837 $ 2,589,448 Accounts Payable and Accrued
Expenses 124,888 126,767 Other, net 107,919
111,383 Total Liabilities 2,764,644
2,827,598 Commitments and Contingencies EQUITY
Preferred Shares of Beneficial Interest 8 8 Common Shares of
Beneficial Interest 3,641 3,630 Accumulated Additional Paid-In
Capital 1,983,978 1,969,905 Net Income Less Than Accumulated
Dividends (304,504 ) (151,780 ) Accumulated Other Comprehensive
Loss (27,743 ) (21,774 ) Shareholders' Equity
1,655,380 1,799,989 Noncontrolling Interests 168,202
180,268 Total Liabilities and Equity $ 4,588,226
$ 4,807,855
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