8-K 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): December 31, 2003 WEINGARTEN REALTY INVESTORS (Exact name of Registrant as specified in its Charter)
Texas 1-9876 74-1464203 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) (Commission file number) Identification Number)
2600 Citadel Plaza Drive, Suite 300, Houston, Texas 77008 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 866-6000 Not applicable (Former name or former address, if changed since last report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS During the year ended December 31, 2003, we acquired sixteen retail shopping centers and five industrial projects. Material factors considered in each of the acquisitions made by us include historical and prospective financial performance of the center, credit quality of the tenancy, local and regional demographics, location and competition, ad valorem tax rates, condition of the property and the related anticipated level of capital expenditures required. The total investment in acquisitions during 2003 was $414 million. Audited financial statements for seven of the properties, Lincoln Place II, Siempre Viva Business Park, Fiesta Trails, Highlands Ranch University Park, Overton Park Plaza, West Jordan Town Center and Taylorsville Town Center (the "Acquired Properties"), are submitted in ITEM 7. below. Unaudited pro forma financial information on the Acquired Properties and other acquisitions are submitted in ITEM 7. below. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS The following financial statements, pro forma financial statements and exhibits are filed as part of this report: (a) Financial statements of businesses acquired: 1. Lincoln Place II (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2002 (iii) Notes to Statement of Revenues and Certain Expenses 2. Siempre Viva Business Park (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2002 (iii) Notes to Statement of Revenues and Certain Expenses 3. Fiesta Trails (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2002 (iii) Notes to Statement of Revenues and Certain Expenses 4. Highlands Ranch University Park (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2002 (iii) Notes to Statement of Revenues and Certain Expenses Page 2 5. Overton Park Plaza (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2002 (iii) Notes to Statement of Revenues and Certain Expenses 6. West Jordan Town Center (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2002 (iii) Notes to Statement of Revenues and Certain Expenses 7. Taylorsville Town Center (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2002 (iii) Notes to Statement of Revenues and Certain Expenses (b) Pro Forma Condensed Financial Statement (unaudited) of Weingarten Realty Investors, the Acquired Properties and Other Acquisitions 1. Pro Forma Condensed Statement of Consolidated Income for the Year Ended December 31, 2003 2. Pro Forma Condensed Balance Sheet as of December 31, 2003 3. Notes and Significant Assumptions 4. Statement of Estimated Taxable Operating Results and Cash to be Made Available by Operations for the Year Ended December 31, 2003 (c) Exhibits: Included herewith is Exhibit No. 23.1, the Consent of Independent Registered Public Accounting Firm Page 3 INDEPENDENT AUDITORS' REPORT To the Board of Trust Managers and Shareholders of Weingarten Realty Investors: We have audited the accompanying statement of revenues and certain expenses (the "Historical Summary") of Lincoln Place II (the "Property") for the year ended December 31, 2002. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as described in Note 2 to the Historical Summary and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the Historical Summary presents fairly, in all material respects, the revenues and certain expenses, as described in Note 2 to the Historical Summary, of Lincoln Place II for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas May 27, 2004 Page 4
LINCOLN PLACE II STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $771,668 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 88,145 --------- Total Revenues. . . . . . . . . . . . . . . . . . . . . 859,813 --------- CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 77,244 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 40,022 --------- Total Certain Expenses. . . . . . . . . . . . . . . . . 117,266 --------- EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $742,547 ========= See accompanying notes to statement of revenues and certain expenses.
Page 5 LINCOLN PLACE II NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Lincoln Place II (the "Property"). The development of this property was substantially completed in 2002 and was purchased by Weingarten Realty Investors (the "Company") on June 24, 2003 from Lincoln Place II, Inc. and Forum Acquisitions, Inc. This acquisition is a 168,000 square foot center in Fairview Heights, Illinois, and is anchored by Linens N Things, Marshall's, Office Depot, Old Navy, Supermarket of Shoes and Ultimate Electronics. The Property was 96.9% occupied as of December 31, 2002. No single tenant had minimum rentals exceeding 18.3% of the total minimum rentals for the year ended December 31, 2002. The Company is a Texas real estate investment trust, which is primarily involved in the acquisition, development, and management of real estate, consisting mostly of neighborhood and community shopping centers and, to a lesser extent, industrial properties. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying Historical Summary has been prepared for the purpose of complying with the provisions of Article 3.14 of Regulation S-X promulgated by the Securities and Exchange Commission (the "SEC"), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The Historical Summary for the year ended December 31, 2002 includes the historical revenues and certain operating expenses of the Property, exclusive of interest, management fees, corporate level general and administrative expenses and depreciation and amortization, which may not be comparable to the future operations of the Property. Revenue Recognition - Rental revenue is generally recognized on a straight-line basis over the life of the lease. Rental revenue includes revenue based on a percentage of tenants' sales, which is recognized only after the tenant exceeds their sales breakpoint. All leases have been accounted for as operating leases. Tenant reimbursements represent revenues from tenants for reimbursements of taxes, maintenance expenses and insurance, which is recognized in the period the related expense is recorded. Repairs and Maintenance - expenditures for repairs and maintenance are expensed as incurred. Use of Estimates - The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires the Property's management to make estimates and assumptions that affect amounts reported in the financial statement as well as certain disclosures. Actual results could differ from those estimates. Page 6 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2002 is as follows:
2003 $ 2,160,148 2004 2,160,148 2005 2,161,836 2006 2,166,900 2007 2,135,400 Thereafter 14,084,572
The future minimum lease payments do not include estimates for tenant reimbursements nor amounts based on a percentage of the tenants' sales. No percentage rental income was recognized for the year ended December 31, 2002, and tenant reimbursements totaled $88,145 for the year ended December 31, 2002. Page 7 INDEPENDENT AUDITORS' REPORT To the Board of Trust Managers and Shareholders of Weingarten Realty Investors: We have audited the accompanying statement of revenues and certain expenses (the "Historical Summary") of Siempre Viva Business Park (the "Property") for the year ended December 31, 2002. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as described in Note 2 to the Historical Summary and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the Historical Summary presents fairly, in all material respects, the revenues and certain expenses, as described in Note 2 to the Historical Summary, of Siempre Viva Business Park for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas May 27, 2004 Page 8
SIEMPRE VIVA BUSINESS PARK STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,309,467 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 446,314 ----------- Total Revenues. . . . . . . . . . . . . . . . . . . . . 2,755,781 ----------- CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 191,331 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 174,419 ----------- Total Certain Expenses. . . . . . . . . . . . . . . . . 365,750 ----------- EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $2,390,031 =========== See accompanying notes to statement of revenues and certain expenses.
Page 9 SIEMPRE VIVA BUSINESS PARK NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Siempre Viva Business Park (the "Property"). The Property includes seven industrial buildings aggregating 727,000 square feet that are located in San Diego, California. The Property was purchased by Weingarten Realty Investors (the "Company") and two wholly-owned entities of the Company, WRI Siempre Viva 345, LLC and WRI Siempre Viva 7 and 8, LLC, on September 9, 2003 from four different sellers, Siempre Viva Business Park 2, LLC, Siempre Viva Business Park, LLC, Siempre Viva Business Park 78, LLC and Siempre Viva Business Park East, LLC. The Property was 60.1% occupied as of December 31, 2002, and is anchored by UPS Supply Chain Solutions, Hitachi, Triboro Electric Company and Bose Corporation. No single tenant had minimum rentals exceeding 20.4% of the total minimum rentals for the year ended December 31, 2002. The Company is a Texas real estate investment trust, which is primarily involved in the acquisition, development, and management of real estate, consisting mostly of neighborhood and community shopping centers and, to a lesser extent, industrial properties. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying Historical Summary has been prepared for the purpose of complying with the provisions of Article 3.14 of Regulation S-X promulgated by the Securities and Exchange Commission (the "SEC"), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The Historical Summary for the year ended December 31, 2002 includes the historical revenues and certain operating expenses of the Property, exclusive of interest, management fees, corporate level general and administrative expenses and depreciation and amortization, which may not be comparable to the future operations of the Property. Revenue Recognition - Rental revenue is generally recognized on a straight-line basis over the life of the lease. All leases have been accounted for as operating leases. Tenant reimbursements represent revenues from tenants for reimbursements of taxes, maintenance expenses and insurance, which is recognized in the period the related expense is recorded. Repairs and Maintenance - Expenditures for repairs and maintenance are expensed as incurred. Use of Estimates - The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires the Property's management to make estimates and assumptions that affect amounts reported in the financial statement as well as certain disclosures. Actual results could differ from those estimates. Page 10 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2002 is as follows:
2003 $3,031,707 2004 3,122,904 2005 3,212,300 2006 2,828,305 2007 772,638 Thereafter -
The future minimum lease payments do not include estimates for tenant reimbursements, which totaled 446,314 for the year ended December 31, 2002. Page 11 INDEPENDENT AUDITORS' REPORT To the Board of Trust Managers and Shareholders of Weingarten Realty Investors: We have audited the accompanying statement of revenues and certain expenses (the "Historical Summary") of Fiesta Trails (the "Property") for the year ended December 31, 2002. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as described in Note 2 to the Historical Summary and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the Historical Summary presents fairly, in all material respects, the revenues and certain expenses, as described in Note 2 to the Historical Summary, of Fiesta Trails for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas May 27, 2004 Page 12
FIESTA TRAILS STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,407,424 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 856,345 ----------- Total Revenues. . . . . . . . . . . . . . . . . . . . . 4,263,769 ----------- CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 454,491 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 534,080 ----------- Total Certain Expenses. . . . . . . . . . . . . . . . . 988,571 ----------- EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $3,275,198 =========== See accompanying notes to statement of revenues and certain expenses.
Page 13 FIESTA TRAILS NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Fiesta Trails (the "Property"). The Property was purchased by WRI Fiesta Trails, LP on September 30, 2003 from Fiesta Trails Ltd. and Fiesta Trails Hilltop Limited Partnership. WRI Fiesta Trails, LP is owned by Weingarten Realty Investors (the "Company") and WRI Fiesta Trails Holdings, LLC, which is a wholly-owned entity of the Company. This acquisition is a 312,000 square foot shopping center located in San Antonio, Texas, and is anchored by Barnes & Noble, Cost Plus, Marshall's, Office Max, Regal Cinema and Steinmart. The Property was 88.5% occupied as of December 31, 2002. No single tenant had minimum rentals exceeding 12.3% of the total minimum rentals for the year ended December 31, 2002. The Company is a Texas real estate investment trust, which is primarily involved in the acquisition, development, and management of real estate, consisting mostly of neighborhood and community shopping centers and, to a lesser extent, industrial properties. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying Historical Summary has been prepared for the purpose of complying with the provisions of Article 3.14 of Regulation S-X promulgated by the Securities and Exchange Commission (the "SEC"), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The Historical Summary for the year ended December 31, 2002 includes the historical revenues and certain operating expenses of the Property, exclusive of interest, management fees, corporate level general and administrative expenses and depreciation and amortization, which may not be comparable to the future operations of the Property. Revenue Recognition - Rental revenue is generally recognized on a straight-line basis over the life of the lease. Rental revenue includes revenue based on a percentage of tenants' sales, which is recognized only after the tenant exceeds their sales breakpoint. All leases have been accounted for as operating leases. Tenant reimbursements represent revenues from tenants for reimbursements of taxes, maintenance expenses and insurance, which is recognized in the period the related expense is recorded. Repairs and Maintenance - Expenditures for repairs and maintenance are expensed as incurred. Use of Estimates - The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires the Property's management to make estimates and assumptions that affect amounts reported in the financial statement as well as certain disclosures. Actual results could differ from those estimates. Page 14 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2002 is as follows:
2003 $ 3,365,822 2004 3,378,710 2005 3,190,863 2006 2,661,032 2007 2,508,209 Thereafter 14,039,890
The future minimum lease payments do not include estimates for tenant reimbursements nor amounts based on a percentage of the tenants' sales. Such tenant reimbursements and percentage rental income totaled $856,345 and $14,777, respectively, for the year ended December 31, 2002. Page 15 INDEPENDENT AUDITORS' REPORT To the Board of Trust Managers and Shareholders of Weingarten Realty Investors: We have audited the accompanying statement of revenues and certain expenses (the "Historical Summary") of Highlands Ranch University Park (the "Property") for the year ended December 31, 2002. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as described in Note 2 to the Historical Summary and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the Historical Summary presents fairly, in all material respects, the revenues and certain expenses, as described in Note 2 to the Historical Summary, of Highlands Ranch University Park for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas May 27, 2004 Page 16
HIGHLANDS RANCH UNIVERSITY PARK STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,675,091 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 301,727 ----------- Total Revenues. . . . . . . . . . . . . . . . . . . . . 1,976,818 ----------- CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 106,109 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 239,845 ----------- Total Certain Expenses. . . . . . . . . . . . . . . . . 345,954 ----------- EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $1,630,864 =========== See accompanying notes to statement of revenues and certain expenses.
Page 17 HIGHLANDS RANCH UNIVERSITY PARK NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Highlands Ranch University Park (the "Property"). The Property was purchased by Weingarten Realty Investors (the "Company"), through an investment in a 40%-owned unconsolidated joint venture, on October 17, 2003 from Highlands Ranch University Park, LLC. This acquisition includes an 88,000 square foot shopping center, and is anchored by Whole Foods, in Highlands Ranch, Colorado. The Property was 93.1% occupied as of December 31, 2002. No single tenant had minimum rentals exceeding 28.8% of the total minimum rentals for the year ended December 31, 2002. The Company is a Texas real estate investment trust, which is primarily involved in the acquisition, development, and management of real estate, consisting mostly of neighborhood and community shopping centers and, to a lesser extent, industrial properties. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying Historical Summary has been prepared for the purpose of complying with the provisions of Article 3.14 of Regulation S-X promulgated by the Securities and Exchange Commission (the "SEC"), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The Historical Summary for the year ended December 31, 2002 includes the historical revenues and certain operating expenses of the Property, exclusive of interest, management fees, corporate level general and administrative expenses and depreciation and amortization, which may not be comparable to the future operations of the Property. Revenue Recognition - Rental revenue is generally recognized on a straight-line basis over the life of the lease. Rental revenue includes revenue based on a percentage of tenants' sales, which is recognized only after the tenant exceeds their sales breakpoint. All leases have been accounted for as operating leases. Tenant reimbursements represent revenues from tenants for reimbursements of taxes, maintenance expenses and insurance, which is recognized in the period the related expense is recorded. Repairs and Maintenance - Expenditures for repairs and maintenance are expensed as incurred. Use of Estimates - The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires the Property's management to make estimates and assumptions that affect amounts reported in the financial statement as well as certain disclosures. Actual results could differ from those estimates. Page 18 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2002 is as follows:
2003 $ 1,836,391 2004 1,883,507 2005 1,886,472 2006 1,871,922 2007 1,202,604 Thereafter 12,307,420
The future minimum lease payments do not include estimates for tenant reimbursements nor amounts based on a percentage of the tenants' sales. Such tenant reimbursements and percentage rental income totaled $301,727 and $13,693, respectively, for the year ended December 31, 2002. Page 19 INDEPENDENT AUDITORS' REPORT To the Board of Trust Managers and Shareholders of Weingarten Realty Investors: We have audited the accompanying statement of revenues and certain expenses (the "Historical Summary") of Overton Park Plaza (the "Property") for the year ended December 31, 2002. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as described in Note 2 to the Historical Summary and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the Historical Summary presents fairly, in all material respects, the revenues and certain expenses, as described in Note 2 to the Historical Summary, of Overton Park Plaza for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas May 27, 2004 Page 20
OVERTON PARK PLAZA STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,589,307 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 1,262,199 ----------- Total Revenues. . . . . . . . . . . . . . . . . . . . . 4,851,506 ----------- CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 403,565 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 1,014,250 ----------- Total Certain Expenses. . . . . . . . . . . . . . . . . 1,417,815 ----------- EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $3,433,691 =========== See accompanying notes to statement of revenues and certain expenses.
Page 21 OVERTON PARK PLAZA NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Overton Park Plaza (the "Property"). The Property was purchased by WRI Overton Plaza, LP, which is a wholly-owned entity of Weingarten Realty Investors (the "Company"), on October 24, 2003 from Columbia Regency Texas 1, L.P. This acquisition is a 351,000 square foot shopping center located in Fort Worth, Texas, and is anchored by Albertson's. The Property was 93.6% occupied as of December 31, 2002. No single tenant had minimum rentals exceeding 9.8% of the total minimum rentals for the year ended December 31, 2002. The Company is a Texas real estate investment trust, which is primarily involved in the acquisition, development, and management of real estate, consisting mostly of neighborhood and community shopping centers and, to a lesser extent, industrial properties. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying Historical Summary has been prepared for the purpose of complying with the provisions of Article 3.14 of Regulation S-X promulgated by the Securities and Exchange Commission (the "SEC"), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The Historical Summary for the year ended December 31, 2002 includes the historical revenues and certain operating expenses of the Property, exclusive of interest, management fees, corporate level general and administrative expenses and depreciation and amortization, which may not be comparable to the future operations of the Property. Revenue Recognition - Rental revenue is generally recognized on a straight-line basis over the life of the lease. Rental revenue includes revenue based on a percentage of tenants' sales, which is recognized only after the tenant exceeds their sales breakpoint. All leases have been accounted for as operating leases. Tenant reimbursements represent revenues from tenants for reimbursements of taxes, maintenance expenses and insurance, which is recognized in the period the related expense is recorded. Repairs and Maintenance - Expenditures for repairs and maintenance are expensed as incurred. Use of Estimates - The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires the Property's management to make estimates and assumptions that affect amounts reported in the financial statement as well as certain disclosures. Actual results could differ from those estimates. Page 22 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2002 is as follows:
2003 $3,781,621 2004 3,627,754 2005 3,404,857 2006 2,629,415 2007 1,718,994 Thereafter 4,331,532
The future minimum lease payments do not include estimates for tenant reimbursements nor amounts based on a percentage of the tenants' sales. No percentage rental income was recognized for the year ended December 31, 2002, and tenant reimbursements totaled $1,262,199 for the year ended December 31, 2002. Page 23 INDEPENDENT AUDITORS' REPORT To the Board of Trust Managers and Shareholders of Weingarten Realty Investors: We have audited the accompanying statement of revenues and certain expenses (the "Historical Summary") of West Jordan Town Center (the "Property") for the year ended December 31, 2002. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as described in Note 2 to the Historical Summary and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the Historical Summary presents fairly, in all material respects, the revenues and certain expenses, as described in Note 2 to the Historical Summary, of West Jordan Town Center for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas May 27, 2004 Page 24
WEST JORDAN TOWN CENTER STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,928,361 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 498,409 ----------- Total Revenues. . . . . . . . . . . . . . . . . . . . . 2,426,770 ----------- CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 181,514 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 273,717 ----------- Total Certain Expenses. . . . . . . . . . . . . . . . . 455,231 ----------- EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $1,971,539 =========== See accompanying notes to statement of revenues and certain expenses.
Page 25 WEST JORDAN TOWN CENTER NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of West Jordan Town Center (the "Property"). The Property was acquired by Weingarten Realty Investors (the "Company"), through its interest in WRI/Utah Properties, LP, on December 19, 2003 from CPI/West Jordan LLC. This 178,000 square foot shopping center is located in West Jordan, Utah, and is anchored by Albertson's, Office Depot, Petco and Rite Aid. The Property was 91.1% occupied as of December 31, 2002, and no single tenant had minimum rentals exceeding 20.8% of the total minimum rentals for the year ended December 31, 2002. The Company is a Texas real estate investment trust, which is primarily involved in the acquisition, development, and management of real estate, consisting mostly of neighborhood and community shopping centers and, to a lesser extent, industrial properties. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying Historical Summary has been prepared for the purpose of complying with the provisions of Article 3.14 of Regulation S-X promulgated by the Securities and Exchange Commission (the "SEC"), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The Historical Summary for the year ended December 31, 2002 includes the historical revenues and certain operating expenses of the Property, exclusive of interest, management fees, corporate level general and administrative expenses and depreciation and amortization, which may not be comparable to the future operations of the Property. Revenue Recognition - Rental revenue is generally recognized on a straight-line basis over the life of the lease. Rental revenue includes revenue based on a percentage of tenants' sales, which is recognized only after the tenant exceeds their sales breakpoint. All leases have been accounted for as operating leases. Tenant reimbursements represent revenues from tenants for reimbursements of taxes, maintenance expenses and insurance, which is recognized in the period the related expense is recorded. Repairs and Maintenance - Expenditures for repairs and maintenance are expensed as incurred. Use of Estimates - The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires the Property's management to make estimates and assumptions that affect amounts reported in the financial statement as well as certain disclosures. Actual results could differ from those estimates. Page 26 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2002 is as follows:
2003 $ 1,905,515 2004 1,883,687 2005 1,781,968 2006 1,673,740 2007 1,675,146 Thereafter 21,173,079
The future minimum lease payments do not include estimates for tenant reimbursements nor amounts based on a percentage of the tenants' sales. No percentage rental income was recognized for the year ended December 31, 2002, and tenant reimbursements totaled $498,409 for the year ended December 31, 2002. Page 27 INDEPENDENT AUDITORS' REPORT To the Board of Trust Managers and Shareholders of Weingarten Realty Investors: We have audited the accompanying statement of revenues and certain expenses (the "Historical Summary") of Taylorsville Town Center (the "Property") for the year ended December 31, 2002. This Historical Summary is the responsibility of the Property's management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as described in Note 2 to the Historical Summary and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the Historical Summary presents fairly, in all material respects, the revenues and certain expenses, as described in Note 2 to the Historical Summary, of Taylorsville Town Center for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas May 27, 2004 Page 28
TAYLORSVILLE TOWN CENTER STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 922,019 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 262,224 ----------- Total Revenues. . . . . . . . . . . . . . . . . . . . . 1,184,243 ----------- CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 120,677 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 115,255 ----------- Total Certain Expenses. . . . . . . . . . . . . . . . . 235,932 ----------- EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 948,311 =========== See accompanying notes to statement of revenues and certain expenses.
Page 29 TAYLORSVILLE TOWN CENTER NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2002 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Taylorsville Town Center (the "Property"). The Property was acquired by Weingarten Realty Investors (the "Company"), through its interest in WRI/Utah Properties, LP, on December 19, 2003 from CPI/Taylorsville LP. The Property is a 94,000 square foot retail center that is located in Taylorsville, Utah, and is anchored by Albertson's, Blockbuster and Rite Aid. The Property was 71.2% occupied as of December 31, 2002. No single tenant had minimum rentals exceeding 23.6% of the total minimum rentals for the year ended December 31, 2002. The Company is a Texas real estate investment trust, which is primarily involved in the acquisition, development, and management of real estate, consisting mostly of neighborhood and community shopping centers and, to a lesser extent, industrial properties. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying Historical Summary has been prepared for the purpose of complying with the provisions of Article 3.14 of Regulation S-X promulgated by the Securities and Exchange Commission (the "SEC"), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The Historical Summary for the year ended December 31, 2002 includes the historical revenues and certain operating expenses of the Property, exclusive of interest, management fees, corporate level general and administrative expenses and depreciation and amortization, which may not be comparable to the future operations of the Property. Revenue Recognition - Rental revenue is generally recognized on a straight-line basis over the life of the lease. Rental revenue includes revenue based on a percentage of tenants' sales, which is recognized only after the tenant exceeds their sales breakpoint. All leases have been accounted for as operating leases. Tenant reimbursements represent revenues from tenants for reimbursements of taxes, maintenance expenses and insurance, which is recognized in the period the related expense is recorded. Repairs and Maintenance - Expenditures for repairs and maintenance are expensed as incurred. Use of Estimates - The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires the Property's management to make estimates and assumptions that affect amounts reported in the financial statement as well as certain disclosures. Actual results could differ from those estimates. Page 30 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2002 is as follows:
2003 $ 902,594 2004 800,339 2005 728,034 2006 662,080 2007 631,509 Thereafter 6,316,122
The future minimum lease payments do not include estimates for tenant reimbursements nor amounts based on a percentage of the tenants' sales. No percentage rental income was recognized for the year ended December 31, 2002, and tenant reimbursements totaled $262,224 for the year ended December 31, 2002. Page 31 WEINGARTEN REALTY INVESTORS PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED INCOME YEAR ENDED DECEMBER 31, 2003 (Unaudited) (in thousands, except per share amounts) This unaudited Pro Forma Condensed Statement of Consolidated Income is presented as if (A) the acquisitions of the acquired properties and (B) the acquisition of other properties, as set forth in the Notes and Significant Assumptions, had occurred as of January 1, 2003. In management's opinion, all adjustments necessary to reflect the effects of these transactions have been made. This unaudited Pro Forma Condensed Statement of Consolidated Income is not necessarily indicative of what actual results of operations would have been had these transactions occurred on January 1, 2003, nor does it purport to represent the results of operations for future periods.
Adjustment Adjustment for Acquired for Other Pro Historical Properties(A) Acquisitions(B) Forma ---------- ------------- --------------- ------------- Revenues: Rentals. . . . . . . . . . . . . . . . . . . . $ 410,490 $ 15,226 $ 12,459 $ 438,175 Interest income. . . . . . . . . . . . . . . . 1,594 8 1,602 Other. . . . . . . . . . . . . . . . . . . . . 7,076 4 43 7,123 ---------- ------------- --------------- ------------- Total. . . . . . . . . . . . . . . . . . . 419,160 15,230 12,510 446,900 ---------- ------------- --------------- ------------- Expenses: Depreciation and amortization. . . . . . . . . 94,108 3,748 2,421 100,277 Interest . . . . . . . . . . . . . . . . . . . 88,871 5,188 3,256 97,315 Operating. . . . . . . . . . . . . . . . . . . 65,022 1,833 1,968 68,823 Ad valorem taxes . . . . . . . . . . . . . . . 47,553 2,001 1,414 50,968 General and administrative . . . . . . . . . . 13,820 13,820 Loss on early redemption of preferred shares . 2,739 2,739 ---------- ------------- --------------- ------------- Total. . . . . . . . . . . . . . . . . 312,113 12,770 9,059 333,942 ---------- ------------- --------------- ------------- Operating Income . . . . . . . . . . . . . . . . . 107,047 2,460 3,451 112,958 Equity in Earnings of Joint Ventures . . . . . . . 4,743 152 4,895 Income Allocated to Minority Interests . . . . . . (2,723) (195) (35) (2,953) Gain on Sale of Properties . . . . . . . . . . . . 714 714 ---------- ------------- --------------- ------------- Income Before Discontinued Operations. . . . . . . 109,781 2,417 3,416 115,614 ---------- ------------- --------------- ------------- Operating Income from Discontinued Operations. 460 460 Gain on Sale of Properties . . . . . . . . . . 6,039 6,039 ---------- ------------- --------------- ------------- Income from Discontinued Operations. . 6,499 6,499 ---------- ------------- --------------- ------------- Net Income . . . . . . . . . . . . . . . . . . . . $ 116,280 $ 2,417 $ 3,416 $ 122,113 ========== ============= =============== ============= Net Income Available to Common Shareholders: Basic. . . . . . . . . . . . . . . . . . . . . $ 97,880 $ 2,417 $ 3,416 $ 103,713 ========== ============= =============== ============= Diluted. . . . . . . . . . . . . . . . . . . . $ 100,920 $ 2,612 $ 3,451 $ 106,983 ========== ============= =============== ============= Net Income per Common Share - Basic. . . . . . . . $ 1.86 $ 1.97 ========== ============= Net Income per Common Share - Diluted. . . . . . . $ 1.86 $ 1.96 ========== ============= Weighted Average Number of Shares Outstanding: Basic. . . . . . . . . . . . . . . . . . . . . 52,534 52,534 ========== ============= Diluted. . . . . . . . . . . . . . . . . . . . 54,383 54,481 ========== =============
Page 32 WEINGARTEN REALTY INVESTORS PRO FORMA CONDENSED BALANCE SHEET AS OF DECEMBER 31, 2003 (Unaudited) (in thousands) This unaudited Pro Forma Condensed Balance Sheet is presented as if (A) the acquisitions of the acquired properties and (B) the acquisition of other properties, as set forth in Notes (A) and (B), had occurred as of January 1, 2003. In management's opinion, all adjustments necessary to reflect the effects of these transactions have been made.
Adjustment for Pro Historical Acquisitions Forma ------------ -------------- ----------- ASSETS: Property . . . . . . . . . . . . . . . . . . . . . $ 3,200,091 $3,200,091 Accumulated Depreciation . . . . . . . . . . . . . (527,375) $ (4,812) (532,187) ------------ -------------- ----------- Property - net . . . . . . . . . . . . . . . . 2,672,716 (4,812) 2,667,904 Investment in Real Estate Joint Ventures . . . . . 32,742 152 32,894 ------------ -------------- ----------- Total. . . . . . . . . . . . . . . . . . . . 2,705,458 (4,660) 2,700,798 Notes Receivable from Real Estate Joint Ventures and Partnerships. . . . . . . . . . . . 36,825 36,825 Unamortized Debt and Lease Costs . . . . . . . . . 70,895 (1,357) 69,538 Accrued Rent and Accounts Receivable, net. . . . . 43,368 43,368 Other. . . . . . . . . . . . . . . . . . . . . . . 67,248 9,591 76,839 ------------ -------------- ----------- Total. . . . . . . . . . $ 2,923,794 $ 3,574 $2,927,368 ============ ============== =========== LIABILITIES AND SHAREHOLDERS' EQUITY: Debt . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,810,706 $1,810,706 Preferred Shares Subject to Mandatory Redemption, net. 109,364 109,364 Accounts Payable and Accrued Expenses. . . . . . . . . 79,686 79,686 Other. . . . . . . . . . . . . . . . . . . . . . . . . 52,671 $ (2,489) 50,182 ------------ -------------- ----------- Total. . . . . . . . . . . . . . . . . . . . 2,052,427 (2,489) 2,049,938 ------------ -------------- ----------- Minority Interest. . . . . . . . . . . . . . . . . . . 49,804 230 50,034 ------------ -------------- ----------- Shareholders' Equity . . . . . . . . . . . . . . . . . 821,563 5,833 827,396 ------------ -------------- ----------- Total. . . . . . . . . . $ 2,923,794 $ 3,574 $2,927,368 ============ ============== ===========
Page 33 WEINGARTEN REALTY INVESTORS NOTES AND SIGNIFICANT ASSUMPTIONS YEAR ENDED DECEMBER 31, 2003 (Unaudited) (A) ACQUIRED PROPERTIES The aggregate purchase price for the acquisitions described below (the "Acquired Properties") was $213.0 million and was allocated among land, buildings and intangibles, with the buildings being depreciated over a period of forty years. These purchases were funded under our revolving credit facility (average rate of 2.34%), with the exception of $94.4 million of debt (average rate of 4.84%), which was assumed by us. Pro forma revenues and expenses, other than interest and depreciation, represent the historical amounts of the Acquired Properties. In June, we purchased Lincoln Place II, a 168,000 square foot shopping center in Fairview Heights, Illinois. The center is anchored by Linens N Things, Marshall's, Office Depot, Old Navy, Supermarket of Shoes and Ultimate Electronics. In September, we completed the acquisition of Siempre Viva Business Park located in San Diego, California. Part of a 1.26 million square foot industrial park, our acquisition included seven buildings totaling 727,000 square feet. The property is 100% leased to tenants such as UPS Supply Chain Solutions, Hitachi, Triboro Electric Company and Bose Corporation. Also in September, we acquired Fiesta Trails Shopping Center located in San Antonio, Texas. The center comprises 312,000 square feet and is anchored by Barnes & Noble, Cost Plus, Marshall's, Office Max, Regal Cinema and Steinmart. In October, we acquired Highlands Ranch University Park through an investment in a 40% unconsolidated joint venture. Highland Ranch University Park is an 88,000 square foot shopping center located in Highlands Ranch, Colorado. The center is anchored by Whole Foods. In October, we purchased Overton Park Plaza, a 351,000 square foot shopping center located in Fort Worth, Texas. Overton Park Plaza is anchored by Albertson's. In December, we acquired two retail centers in Utah. West Jordan Town Center is a 178,000 square foot center located in West Jordan, Utah. Taylorsville Town Center is a 94,000 square foot center located in Taylorsville, Utah. Both shopping centers are located in the greater Salt Lake City area suburbs, and both are anchored by Albertson's and Rite Aid. (B) OTHER ACQUISITIONS The aggregate purchase price for the acquisitions described below (the "Other Acquisitions") was $200.8 million and was allocated among land, buildings and intangibles, with the buildings being depreciated over a period of forty years. These purchases were funded under our revolving credit facility (average rate of 2.34%) with the exception of $91.7 million of debt (rate of 4.31%), which was assumed by us. Pro forma revenues and expenses, other than interest and depreciation, represent the historical amounts of the Other Acquisitions. In January, we acquired the Sears Distribution Center located in Atlanta, Georgia. This 403,000 square foot property is 100% occupied with Sears Logistics Services as the sole tenant. In February, we acquired Atlanta Industrial Park. This seven-building complex totaled 502,000 square feet and is also located in Atlanta, Georgia. Also in Page 34 February, we completed the acquisition of Rancho San Marcos Village, a 121,000 square foot shopping center anchored by Von's (Safeway) and 24-Hour Fitness. This center is located in San Marcos, California. In April, we acquired 1801 Massaro Boulevard located in Tampa, Florida. This 159,000 square foot distribution/manufacturing facility that is rail served is 100% occupied. Also in April, we acquired Hollywood Hills Plaza, a 365,000 square foot shopping center anchored by Publix, Target and Eckerd Drug. This center is located in Hollywood, Florida. In June, we completed the acquisition of Tamiami Trail Shops, a 111,000 square foot center located in Miami, Florida. Publix and Eckerd Drug anchor this center. In August, we acquired Thousand Oaks Shopping Center located in San Antonio, Texas. An HEB Supermarket, Palais Royal and Tuesday Morning anchor this 163,000 square foot center. In September, we acquired Durham Festival located in Durham, North Carolina. This 134,000 square foot shopping center is anchored by Kroger. In October, we acquired four retail properties. Sandy Plains Exchange is a 73,000 square foot center located in Marietta, Georgia, a suburb of Atlanta, and is anchored by Publix supermarket. Westland Terrace in Orlando, Florida is a 68,000 square foot center anchored by a corporate-owned Super Target. Publix at Laguna Isles is a 69,000 square foot center located in Pembroke Pines, Florida and is anchored by Publix. University Palms is a 99,000 square foot shopping center anchored by Publix and Blockbuster and is located in Oveido, Florida. In December, Westgate Service Center, located in Houston, Texas, was acquired. This three-building office service center complex comprises 119,000 square feet. Also in December, we acquired Brookwood Square, a 253,000 square foot shopping center anchored by Home Depot, Staples and Marshall's, which is located in Austell, Georgia, a suburb of Atlanta. Page 35
WEINGARTEN REALTY INVESTORS STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS AND CASH TO BE MADE AVAILABLE BY OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 (Unaudited) (in thousands) The following unaudited statement is a pro forma estimate of taxable operating results and cash to be made available by operations for the year ended December 31, 2003. The pro forma statement is based on the Company's historical operating results for the year ended December 31, 2003 adjusted for the effect of (A) the acquisitions of the acquired properties and (B) the acquisition of other properties, as set forth in the Notes and Significant Assumptions. This statement does not purport to forecast actual operating results for any future periods. Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $ 446,900 Expenses: Depreciation and amortization . . . . . . . . . . . 100,277 Interest. . . . . . . . . . . . . . . . . . . . . . 97,315 Operating . . . . . . . . . . . . . . . . . . . . . 68,823 Ad valorem taxes. . . . . . . . . . . . . . . . . . 50,968 General and administrative. . . . . . . . . . . . . 13,820 Loss on early redemption of preferred shares. . . . 2,739 ---------- Total Expenses . . . . . . . . . . . . . . . . 333,942 ---------- Operating Income. . . . . . . . . . . . . . . . . . . . . 112,958 Equity in Earnings of Joint Ventures. . . . . . . . . . . 4,895 Income Allocated to Minority Interests. . . . . . . . . . (2,953) Gain on Sale of Properties. . . . . . . . . . . . . . . . 714 Income from Discontinued Operations . . . . . . . . . . . 6,499 ---------- Estimated Taxable Operating Income. . . . . . . . . . . . 122,113 Adjustments: Depreciation and amortization . . . . . . . . . . . . . . 100,624 Loss on early redemption of preferred shares. . . . . . . 2,739 Equity in earnings of joint ventures. . . . . . . . . . . (4,895) Income allocated to minority interests. . . . . . . . . . 2,953 Gain on sale of properties. . . . . . . . . . . . . . . . (6,753) Changes in accrued rent and accounts receivable . . . . . (5,596) Changes in other assets . . . . . . . . . . . . . . . . . (31,579) Changes in accounts payable and accrued expenses. . . . . (3,491) Other, net. . . . . . . . . . . . . . . . . . . . . . . . (490) ---------- Estimated Cash to be Made Available from Operations . . . $ 175,625 ==========
(c) Exhibits Exhibit Number Description --------------- ----------- 23.1 Consent of Deloitte & Touche LLP Page 36 SIGNATURE 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 hereunto duly authorized. Date: July 20, 2004 WEINGARTEN REALTY INVESTORS By: /s/ Joe D. Shafer ------------------------------ Joe D. Shafer Vice President/Controller (Principal Accounting Officer) Page 37