Weingarten Realty Investors Announces 24.9% Increase in Third
Quarter 2004 Rental Revenues HOUSTON, Oct. 25
/PRNewswire-FirstCall/ -- 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
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 3.3% 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 http://www.weingarten.com/ . A 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 http://www.weingarten.com/ . 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
FUNDS FROM 2004 2003 2004 2003 OPERATIONS (Unaudited) (Unaudited)
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) 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) 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 Total Assets $3,390,127
$2,923,094 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 Total Liabilities
2,225,360 2,051,727 Minority Interest 72,789 49,804 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) Total Shareholders' Equity
1,091,978 821,563 Total Liabilities and Shareholders' Equity
$3,390,127 $2,923,094 Note: Certain reclassifications of prior
years' amounts have been made to conform with the current year
presentation. DATASOURCE: Weingarten Realty Investors CONTACT:
Tracy Pursell for Weingarten Realty Investors, +1-713-866-6050 Web
site: http://www.weingarten.com/
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