-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JhKR3EMEbuM08M+FV5mlSXQEuE0v27XW0ioumsNIvXUpMEeTZcxrW48JP2BkMz4f cZnVKVQ3VrtGPaNAxMxghA== 0000828916-00-000022.txt : 20000426 0000828916-00-000022.hdr.sgml : 20000426 ACCESSION NUMBER: 0000828916-00-000022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000425 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEINGARTEN REALTY INVESTORS /TX/ CENTRAL INDEX KEY: 0000828916 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 741464203 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09876 FILM NUMBER: 608514 BUSINESS ADDRESS: STREET 1: 2600 CITADEL PLAZA DR STREET 2: SUITE 300 CITY: HOUSTON STATE: TX ZIP: 77292 BUSINESS PHONE: 7138666000 MAIL ADDRESS: STREET 1: P O BOX 924133 STREET 2: P O BOX 924133 CITY: HOUSTON STATE: TX ZIP: 77292-4133 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from____________________ to ____________________ Commission file number 1-9876 ------ WEINGARTEN REALTY INVESTORS --------------------------- (Exact name of registrant as specified in its charter) Texas 74-1464203 - ---------------------------------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2600 Citadel Plaza Drive, P.O. Box 924133, Houston, Texas 77292-4133 - ---------------------------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 866-6000 -------------- ____________________________________________ (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . --- --- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes . No . --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of April 24, 2000, there were 26,746,306 common shares of beneficial interest of Weingarten Realty Investors, $.03 par value, outstanding. PART 1 FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
WEINGARTEN REALTY INVESTORS STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED) (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended March 31, -------------------- 2000 1999 --------- --------- Revenues: Rentals. . . . . . . . . . . . . . . . . . . . . . . . . .$ 59,439 $ 53,433 Interest: Affiliates . . . . . . . . . . . . . . . . . . . . . . . 1,286 475 Securities and Other . . . . . . . . . . . . . . . . . . 100 523 Equity in earnings (loss) of real estate joint ventures and partnerships . . . . . . . . . . . . . . . . . . . (72) 85 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 448 248 --------- --------- Total . . . . . . . . . . . . . . . . . . . . . . . . 61,201 54,764 --------- --------- Expenses: Depreciation and amortization. . . . . . . . . . . . . . . 13,199 11,637 Interest . . . . . . . . . . . . . . . . . . . . . . . . . 10,194 8,033 Operating. . . . . . . . . . . . . . . . . . . . . . . . . 8,929 8,178 Ad valorem taxes . . . . . . . . . . . . . . . . . . . . . 7,561 6,812 General and administrative . . . . . . . . . . . . . . . . 1,867 1,868 --------- --------- Total . . . . . . . . . . . . . . . . . . . . . . . . 41,750 36,528 --------- --------- Income Before Extraordinary Charge . . . . . . . . . . . . . 19,451 18,236 Extraordinary Charge (early retirement of debt). . . . . . . (149) --------- --------- Net Income . . . . . . . . . . . . . . . . . . . . . . . . . 19,451 18,087 Dividends on Preferred Shares. . . . . . . . . . . . . . . . 5,010 4,563 --------- --------- Net Income Available to Common Shareholders. . . . . . . . .$ 14,441 $ 13,524 ========= ========= Net Income Per Common Share - Basic: Income Before Extraordinary Charge. . . . . . . . . .$ .54 $ .52 Extraordinary Charge. . . . . . . . . . . . . . . . . (.01) --------- --------- Net Income. . . . . . . . . . . . . . . . . . . . . .$ .54 $ .51 ========= ========= Net Income Per Common Share - Diluted: Income Before Extraordinary Charge. . . . . . . . . .$ .54 $ .51 Extraordinary Charge. . . . . . . . . . . . . . . . . (.01) --------- --------- Net Income. . . . . . . . . . . . . . . . . . . . . .$ .54 $ .50 ========= =========
See Notes to Consolidated Financial Statements.
WEINGARTEN REALTY INVESTORS CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) March 31, December 31, 2000 1999 ------------ ------------ (unaudited) ASSETS Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,536,612 $ 1,514,139 Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . (340,070) (328,645) ------------ ------------ Property - net . . . . . . . . . . . . . . . . . . . . . . . . . . 1,196,542 1,185,494 Investment in Real Estate Joint Ventures and Partnerships. . . . . . . 2,304 2,006 ------------ ------------ Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,198,846 1,187,500 Mortgage Bonds and Notes Receivable from: Real Estate Joint Ventures and Partnerships. . . . . . . . . . . . 54,515 52,824 Affiliate (net of deferred gain of $3,050 in 2000 and 1999). . . . 3,935 3,907 Unamortized Debt and Lease Costs . . . . . . . . . . . . . . . . . . . 31,565 29,986 Accrued Rent and Accounts Receivable (net of allowance for doubtful accounts of $1,091 in 2000 and $908 in 1999) . . . . . . . . . . . . 9,766 16,874 Cash and Cash Equivalents. . . . . . . . . . . . . . . . . . . . . . . 6,546 5,842 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,141 12,463 ------------ ------------ Total. . . . . . . . . . . . . . . . . . . . . . . . . $ 1,318,314 $ 1,309,396 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 631,163 $ 594,185 Accounts Payable and Accrued Expenses. . . . . . . . . . . . . . . . . 34,668 57,518 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,673 11,791 ------------ ------------ Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 676,504 663,494 ------------ ------------ Commitments and Contingencies Shareholders' Equity: Preferred Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 10,000 7.44% Series A cumulative redeemable preferred shares of beneficial interest; 3,000 shares issued and outstanding; liquidation preference $25 per share . . . . . . . . . . . . . 90 90 7.125% Series B cumulative redeemable preferred shares of beneficial interest; 3,600 shares issued and 3,591 shares outstanding; liquidation preference $25 per share . . . . . . 108 108 7.0% Series C cumulative redeemable preferred shares of beneficial interest; 2,300 shares issued and 2,292 shares outstanding; liquidation preference $50 per share . . . . . . 68 69 Common Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 150,000; shares issued and outstanding: 26,746 in 2000 and 26,695 in 1999. . . . . . . . . . . . . . . . . . 802 801 Capital Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . 754,515 753,030 Accumulated Dividends in Excess of Net Income. . . . . . . . . . . . . (113,772) (108,193) Deferred Compensation Obligation . . . . . . . . . . . . . . . . . . . (1) (3) ------------ ------------ Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . 641,810 645,902 ------------ -------------- Total. . . . . . . . . . . . . . . . . . . . . . . . . $ 1,318,314 $ 1,309,396 ============ ============
See Notes to Consolidated Financial Statements.
WEINGARTEN REALTY INVESTORS STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED) (AMOUNTS IN THOUSANDS) Three Months Ended March 31, ---------------------- 2000 1999 ---------- ---------- Cash Flows from Operating Activities: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,451 $ 18,087 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization. . . . . . . . . . . . . . . . . 13,199 11,637 Equity in earnings (loss) of real estate joint ventures and partnerships . . . . . . . . . . . . . . . . . . . . . . . . 72 (85) Extraordinary charge (early retirement of debt). . . . . . . . 149 Changes in accrued rents and accounts receivable . . . . . . . 7,105 3,680 Changes in other assets. . . . . . . . . . . . . . . . . . . . (3,816) (3,884) Changes in accounts payable and accrued expenses . . . . . . . (21,861) (19,690) Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . 13 42 ---------- ---------- Net cash provided by operating activities. . . . . . . . . 14,163 9,936 ---------- ---------- Cash Flows from Investing Activities: Investment in properties . . . . . . . . . . . . . . . . . . . . . (18,844) (55,666) Mortgage bonds and notes receivable: Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,595) (2,953) Collections. . . . . . . . . . . . . . . . . . . . . . . . . . 171 90 Proceeds from the sale of marketable debt securities . . . . . . . 15,000 Investments in real estate joint ventures and partnerships . . . . (316) Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . (47) ---------- ---------- Net cash used in investing activities. . . . . . . . . . . (21,584) (43,576) ---------- ---------- Cash Flows from Financing Activities: Proceeds from issuance of: Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,508 26,810 Common shares of beneficial interest . . . . . . . . . . . . . 475 Preferred shares of beneficial interest. . . . . . . . . . . . 111,263 Principal payments of debt . . . . . . . . . . . . . . . . . . . . (238) (82,935) Common and preferred dividends paid. . . . . . . . . . . . . . . . (25,030) (23,512) Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115) (7) ---------- ---------- Net cash provided by financing activities. . . . . . . . . 8,125 32,094 ---------- ---------- Net increase/(decrease) in cash and cash equivalents . . . . . . . . . 704 (1,546) Cash and cash equivalents at January 1 . . . . . . . . . . . . . . . . 5,842 1,672 ---------- ---------- Cash and cash equivalents at March 31. . . . . . . . . . . . . . . . . $ 6,546 $ 126 ========== ==========
See Notes to Consolidated Financial Statements. WEINGARTEN REALTY INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (AMOUNTS IN THOUSANDS) 1. INTERIM FINANCIAL STATEMENTS The consolidated financial statements included in this report are unaudited, except for the balance sheet as of December 31, 1999. In the opinion of WRI, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and notes are presented as permitted by Form 10-Q, and do not contain certain information included in WRI's annual financial statements and notes. 2. NEWLY ADOPTED ACCOUNTING PRONOUNCEMENT Effective January 1, 2000, WRI adopted the SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" that requires recognition of percentage rental revenue only after a tenant exceeds their sales breakpoint. 3. PER SHARE DATA Net income per common share - basic is computed using net income available to common shareholders and the weighted average shares outstanding. Net income per common share - diluted includes the effect of potentially dilutive securities for the periods indicated, as follows (in thousands):
Three Months Ended March 31, ------------------ 2000 1999 -------- -------- Numerator: Net income available to common shareholders - basic . $ 14,441 $ 13,524 Income attributable to operating partnership units. . 39 41 -------- -------- Net income available to common shareholders - diluted $ 14,480 $ 13,565 ======== ======== Denominator: Weighted average shares outstanding - basic . . . . . 26,707 26,683 Effect of dilutive securities: Share options and awards. . . . . . . . . . . . . 19 88 Operating partnership units . . . . . . . . . . . 132 148 -------- -------- Weighted average shares outstanding - diluted . . . . 26,858 26,919 ======== ========
4. DEBT WRI's debt consists of the following (in thousands):
March 31, December 31, 2000 1999 ------------ ------------ Fixed-rate debt payable to 2015 at 6.0% to 10.0% . . $ 436,203 $ 423,906 Notes payable under revolving credit agreements. . . 138,715 114,000 Obligations under capital leases . . . . . . . . . . 48,460 48,467 Industrial revenue bonds to 2015 at 3.9% to 6.8% . . 6,115 6,141 Other. . . . . . . . . . . . . . . . . . . . . . . . 1,670 1,671 ------------ ------------ Total. . . . . . . . . . . . . . . . . . . . . $ 631,163 $ 594,185 ============ ============
At March 31, 2000, the variable interest rate for notes payable under the $200 million revolving credit agreement was 6.6%, and the variable interest rate under the $20 million revolving credit agreement was 6.5%. Effective March 1, 2000, WRI finalized an unsecured $100 million revolving credit agreement with a bank. This one-year facility is renewable at our option for an additional two-year period. There were no borrowings under this line of credit during the quarter ended March 31, 2000. In January 2000, WRI issued $10.5 million of ten-year 8.25% fixed-rate, unsecured medium term notes. In connection with this debt issuance, we entered into a ten-year interest rate swap agreement with a notional amount of $10.5 million to swap 8.25% fixed-rate interest for floating-rate interest. Additionally, WRI has three interest rate swap contracts with an aggregate notional amount of $40 million which swap floating-rate interest for fixed-rate interest. Such contracts, which expire through 2004, have been outstanding since their purchase in 1992. These interest rate swaps have an effective interest rate of 8.1%. In August 1999, we filed a new $400 million shelf registration statement, of which $389.5 million is currently available. WRI's debt can be summarized as follows (in thousands):
March 31, December 31, 2000 1999 ------------ ------------ As to interest rate (including the effects of interest rate swaps): Fixed-rate debt . . . . . . . . . . . . . $ 501,716 $ 499,919 Variable-rate debt. . . . . . . . . . . . 129,447 94,266 ------------ ------------ Total . . . . . . . . . . . . . . . . . . $ 631,163 $ 594,185 ============ ============ As to collateralization: Unsecured debt. . . . . . . . . . . . . . $ 517,885 $ 482,671 Secured debt. . . . . . . . . . . . . . . 113,278 111,514 ------------ ------------ Total . . . . . . . . . . . . . . . . . . $ 631,163 $ 594,185 ============ ============
5. PROPERTY WRI's property consists of the following (in thousands):
March 31, December 31, 2000 1999 ------------ ------------ Land . . . . . . . . . . . . . $ 282,650 $ 279,871 Land held for development. . . 24,536 24,509 Land under development . . . . 11,370 12,139 Buildings and improvements . . 1,202,498 1,189,687 Construction in-progress . . . 15,558 7,933 ------------ ------------ Total. . . . . . . . . . . . . $ 1,536,612 $ 1,514,139 ============ ============
Interest and ad valorem taxes capitalized to land under development or buildings under construction for the first quarter of 2000 and 1999 was $.6 million and $.5 million, respectively. 6. SEGMENT INFORMATION The operating segments presented are the segments of WRI for which separate financial information is available and operating performance is evaluated regularly by senior management in deciding how to allocate resources and in assessing performance. WRI evaluates the performance of its operating segments based on net operating income that is defined as total revenues less operating expenses and ad valorem taxes. The shopping center segment is engaged in the acquisition, development and management of real estate, primarily anchored neighborhood and community shopping centers located in Texas, Louisiana, Arizona, Nevada, Arkansas, New Mexico, Oklahoma, Tennessee, Kansas, Colorado, Missouri, Illinois, Florida and Maine. The customer base includes supermarkets, drugstores and other retailers who generally sell basic necessity-type commodities. The industrial segment is engaged in the acquisition, development and management of bulk warehouses and office/service centers. Its properties are located in Texas, Nevada and Tennessee, and the customer base is diverse. Included in "Other" are corporate-related items, insignificant operations and costs that are not allocated to the reportable segments. Information concerning WRI's reportable segments is as follows (in thousands):
SHOPPING CENTER INDUSTRIAL OTHER TOTAL ---------- ---------- ---------- ----------- Three Months Ended March 31, 2000: Revenues . . . . . . $ 52,144 $ 6,944 $ 2,113 $ 61,201 Net operating income 37,745 4,941 2,025 44,711 Total assets . . . . 1,068,310 175,852 74,152 1,318,314 Three Months Ended March 31, 1999: Revenues . . . . . . $ 47,366 $ 6,086 $ 1,312 $ 54,764 Net operating income 33,875 4,424 1,475 39,774 Total assets . . . . 941,063 136,799 62,985 1,140,847
Net operating income reconciles to income before extraordinary charge as shown on the Statements of Consolidated Income as follows (in thousands):
Three Months Ended March 31, -------------------- 2000 1999 --------- --------- Total segment net operating income . . $ 44,711 $ 39,774 Less: Depreciation and amortization. . . 13,199 11,637 Interest . . . . . . . . . . . . . 10,194 8,033 General and administrative . . . . 1,867 1,868 --------- --------- Income before extraordinary charge . . $ 19,451 $ 18,236 ========= =========
Equity in earnings (loss) of real estate joint ventures and partnerships as shown on the Statements of Consolidated Income and the corresponding investment balances relate exclusively to the shopping center segment. PART I FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated financial statements and notes thereto and the comparative summary of selected financial data appearing elsewhere in this report. Historical results and trends which might appear should not be taken as indicative of future operations. Weingarten Realty Investors owned and operated 189 anchored shopping centers, 50 industrial properties, one multi-family residential property and one office building at March 31, 2000. Of WRI's 241 developed properties, 180 are located in Texas (including 100 in Houston and Harris County). Our remaining properties are located in Louisiana (11), Arizona (11), Nevada (8), Arkansas (6), New Mexico (5), Oklahoma (4), Tennessee (4), Kansas (3), Colorado (4), Missouri (2), Illinois (1), Florida (1) and Maine (1). WRI has nearly 4,300 leases and 3,300 different tenants. Leases for our properties range from less than a year for smaller spaces to over 25 years for larger tenants; leases generally include minimum lease payments and contingent rentals for payment of taxes, insurance and maintenance and for an amount based on a percentage of the tenants' sales. The majority of our anchor tenants are supermarkets, value-oriented apparel and discount stores and other retailers, which generally sell basic necessity-type items. CAPITAL RESOURCES AND LIQUIDITY WRI anticipates that cash flows from operating activities will continue to provide adequate capital for all dividend payments in accordance with REIT requirements. Cash on hand, borrowings under our existing credit facilities, issuance of unsecured debt and the use of project financing, as well as other debt and equity alternatives, will provide the necessary capital to achieve growth. Cash flow from operating activities as reported in the Statements of Consolidated Cash Flows was $14.2 million for the first three months of 2000 as compared to $9.9 million for the same period of 1999. The increase was due primarily to WRI's acquisition and new development programs and improvements in the performance of its existing portfolio of properties. Our Board of Trust Managers approved a quarterly dividend per common share of $.75 for the first quarter of 2000. Our dividend payout ratio on common equity for the first quarter of 2000 and 1999 was 73% and 75%, respectively, based on funds from operations for the applicable period. WRI invested $11.9 million for the acquisition of a 147,000 square foot center in Plano, Texas, a suburb of Dallas. Redevelopment of this center will begin immediately with the demolition of a portion of the buildings, construction of a 64,000 square foot supermarket and extensive renovation and remerchandising of the remainder of the project. This redevelopment should be completed in the latter half of 2001. In March 2000, WRI formed a strategic joint venture with Dana Commercial Credit Corporation to acquire $200 million of real estate assets using limited leverage. The joint venture will primarily target well-anchored neighborhood and community shopping centers. As general partner in the joint venture, WRI will manage and lease the acquired properties. The cash flow distributions are structured such that neither party will receive a preferred return. With respect to new development, construction continues on four retail centers, an industrial office/service center and three additional retail centers in joint ventures with our Denver-based development partner. The projects under construction represent an estimated investment by WRI of approximately $55 million and will add over 540,000 square feet to the portfolio. Total debt outstanding increased to $631.2 million at quarter-end from $594.2 at December 31, 1999. This increase was primarily due to acquisitions and WRI's ongoing development and redevelopment efforts. Included in total debt outstanding of $631.2 at March 31, 2000 is variable-rate debt of $82.4 million, after recognizing the effect of $50.5 million of interest rate swaps and $47.0 million of variable-rate notes receivables. WRI's debt to total capitalization is a conservative 33.3% and the interest coverage ratio is 4.2 to 1 for the four quarters ended March 31, 2000. In January 2000, WRI issued $10.5 million of ten-year 8.25% fixed-rate, unsecured medium term notes. In connection with this debt issuance, we entered into a ten-year interest rate swap agreement with a notional amount of $10.5 million to swap 8.25% fixed-rate interest for floating-rate interest. Effective March 1, 2000, WRI finalized an unsecured $100 million revolving credit agreement with a bank. This one-year facility is renewable at our option for an additional two-year period. FUNDS FROM OPERATIONS Industry analysts generally consider funds from operations to be an appropriate measure of the performance of an equity REIT since such measure does not recognize depreciation and amortization of real estate assets as operating expenses. Management believes that reductions for these charges are not meaningful in evaluating income-producing real estate, which historically has not depreciated. The National Association of Real Estate Investment Trusts defines funds from operations as net income plus depreciation and amortization of real estate assets, less gains and losses on sales of properties and securities. Funds from operations does not represent cash flows from operations as defined by generally accepted accounting principles and should not be considered as an alternative to net income as an indicator of WRI's operating performance or to cash flows from operations as a measure of liquidity. Funds from operations increased to $27.5 million for the first quarter of 2000, as compared to $25.2 million for the same period of 1999. These increases primarily relate to the impact of WRI's acquisitions, new development and activity at its existing properties. For further information on changes between years, see "Results of Operations" below. RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2000 Net income available to common shareholders increased to $14.4 million from $13.5 million for the first quarter of 2000 as compared with the same quarter of 1999. Net income per common share-basic increased to $.54 in 2000 from $.51 in 1999, while net income per share-diluted also increased to $.54 in 2000 from $.50 in 1999. Rental revenues were $59.4 million in 2000, as compared to $53.4 million in 1999, representing an increase of approximately $6.0 million or 11.2%. Of these increases, property acquisitions and new development contributed $5.9 million in 2000, as compared to $6.7 million for the same period of 1999. The remaining portion of these increases is due to activity at our existing properties. Occupancy of WRI's retail and industrial properties was 91.5% and 94.1%, respectively, at the end of the first quarter of 2000 as compared to 92.9% and 92.4%, respectively, at March 31, 1999. Occupancy of WRI's total portfolio was 92.1% at March 31, 2000 as compared to 92.8% at the end of the first quarter of the prior year. This is primarily the result of the loss of certain large tenants in the latter half of 1999 offset by strong leasing activity in the first quarter of 2000. Among the larger losses were Builders Square, which occupied a 105,000 square foot space in Corpus Christi, Texas, a 91,500 square foot Kmart in Houston, Texas, a 63,000 square foot Service Merchandise in Lake Charles, Louisiana and a 60,000 square foot Pay & Save in Lubbock, Texas. During the first three months of 2000, WRI completed 216 renewals or leases comprising 1.4 million square feet of space at an average rental rate of 9.0%. Net of the amortized portion of capital costs for tenant improvements, the increase averaged 7.4%. Retail sales on a same-store basis increased by 2.3% based on sales reported during the last twelve months. Gross interest costs, before capitalization of interest, increased by $2.2 million from $8.5 million in the first quarter of 1999 to $10.7 million in the first quarter of 2000. The increase was due primarily to an increase in the average debt outstanding between periods from $476.1 million in 1999 to $595.6 million in 2000. The average interest rate for the first quarter of 2000 was 7.2% compared to 7.1% for the same period of 1999. The amount of interest capitalized during the period increased from $.4 million in 1999 to $.5 million in 2000 due to an increase in new development activity. The increases in depreciation and amortization, operating expenses and ad valorem taxes were primarily the result of WRI's acquisition and new development programs. PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (numbered in accordance with Item 601 of Regulation S-K) (12) A statement of computation of ratios of earnings and funds from operations to combined fixed charges and preferred dividends. (27) Article 5 Financial Data Schedule (EDGAR filing only). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. WEINGARTEN REALTY INVESTORS ----------------------------- (Registrant) BY: /s/ Stanford Alexander ----------------------------- Stanford Alexander Chairman/Chief Executive Officer (Principal Executive Officer) BY: /s/ Stephen C. Richter ----------------------------- Stephen C. Richter Senior Vice President/Chief Financial Officer (Principal Accounting Officer) DATE: April 25, 2000 ---------------- EX-12.1 2 EXHIBIT 12.1
WEINGARTEN REALTY INVESTORS COMPUTATION OF RATIOS OF EARNINGS AND FUNDS FROM OPERATIONS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS (AMOUNTS IN THOUSANDS) Three Months Ended March 31, -------------------------- 2000 1999 ------------ ------------ Net income available to common shareholders . . . . . . . . . $ 14,441 $ 13,524 Add: Portion of rents representative of the interest factor. . . . 223 329 Interest on indebtedness. . . . . . . . . . . . . . . . . . . 10,194 8,033 Preferred dividends . . . . . . . . . . . . . . . . . . . . . 5,010 4,563 Amortization of debt cost . . . . . . . . . . . . . . . . . . 95 94 ------------ ------------ Net income as adjusted. . . . . . . . . . . . . . . . . . $ 29,963 $26,543 ============ ============ Fixed charges: Interest on indebtedness. . . . . . . . . . . . . . . . . . . $ 10,194 $ 8,033 Capitalized interest. . . . . . . . . . . . . . . . . . . . . 505 447 Preferred dividends . . . . . . . . . . . . . . . . . . . . . 5,010 4,563 Amortization of debt cost . . . . . . . . . . . . . . . . . . 95 94 Portion of rents representative of the interest factor. . . . 223 329 ------------ ------------ Fixed charges . . . . . . . . . . . . . . . . . . . . . . $ 16,027 $ 13,466 ============ ============ RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS . . . . . . . . . . . . . . . 1.87 1.97 ============ ============ Net income available to common shareholders . . . . . . . . . $ 14,441 $ 13,524 Depreciation and amortization . . . . . . . . . . . . . . . . 13,104 11,543 Extraordinary charge (early retirement of debt) . . . . . . . 149 ------------ ------------ Funds from operations . . . . . . . . . . . . . . . . . . 27,545 25,216 Add: Portion of rents representative of the interest factor. . . . 223 329 Preferred dividends . . . . . . . . . . . . . . . . . . . . . 5,010 4,563 Interest on indebtedness. . . . . . . . . . . . . . . . . . . 10,194 8,033 Amortization of debt cost . . . . . . . . . . . . . . . . . . 95 94 ------------ ------------ Funds from operations as adjusted . . . . . . . . . . . . $ 43,067 $ 38,235 ============ ============ RATIO OF FUNDS FROM OPERATIONS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS . . . . . . . . . . . . 2.69 2.84 ============ ============
EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WEINGARTEN REALTY INVESTORS' QUARTERLY REPORT FOR THE PERIOD ENDED MARCH 31, 2000. 1 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 6546 0 10857 1091 0 0 1536612 340070 1318314 0 0 802 0 266 640742 1318314 0 61201 0 16490 15066 0 10194 19451 0 19451 0 0 0 19451 .54 .54
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