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): September 9, 2004 WEINGARTEN REALTY INVESTORS (Exact name of Registrant as specified in its Charter)
Texas 1-9876 74-1464203 (State or other jurisdiction of (Commission file number) (I.R.S. Employer incorporation or organization) 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 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS During the six months ended June 30, 2004, we acquired ten retail shopping centers and one industrial project. Also, we acquired four shopping centers, each through a 50% unconsolidated joint venture, and acquired our joint venture partners' interest in four shopping centers. 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. We are not aware of any additional material factors that would cause the reported financial information not to be necessarily indicative of future operating results. The total investment in acquisitions during the six month period ending June 30, 2004 was $390 million. Audited financial statements for Harrison Pointe Shopping Center, Leesville Shopping Center, the TFK Portfolio, Pavilions at San Mateo, Rockwall Market Center and Lone Star Pavilions (the "Acquired Properties") are submitted in ITEM 9.01 below. Unaudited pro forma financial information on the Acquired Properties and other acquisitions are submitted in ITEM 9.01 below. ITEM 9.01 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. Harrison Pointe Shopping Center (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2003 (iii) Notes to Statement of Revenues and Certain Expenses 2. Leesville Shopping Center (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2003 (iii) Notes to Statement of Revenues and Certain Expenses 3. TFK Portfolio (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2003 (iii) Notes to Statement of Revenues and Certain Expenses (iv) Statement of Revenues and Certain Expenses for the period from January 1, 2004 through February 28, 2004 (unaudited) 2 4. Pavilions at San Mateo (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2003 (iii) Notes to Statement of Revenues and Certain Expenses (iv) Statement of Revenues and Certain Expenses for the period from January 1, 2004 through April 29, 2004 (unaudited) 5. Rockwall Market Center (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2003 (iii) Notes to Statement of Revenues and Certain Expenses (iv) Statement of Revenues and Certain Expenses for the period from January 1, 2004 through April 29, 2004 (unaudited) 6. Lone Star Pavilions (i) Independent Auditors' Report (ii) Statement of Revenues and Certain Expenses for the Year Ended December 31, 2003 (iii) Notes to Statement of Revenues and Certain Expenses (iv) Statement of Revenues and Certain Expenses for the period from January 1, 2004 through April 29, 2004 (unaudited) (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 and the Six Months Ended June 30, 2004 2. Pro Forma Condensed Balance Sheet as of June 30, 2004 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 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 Harrison Pointe Shopping Center (the "Property") for the year ended December 31, 2003. 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 Harrison Pointe Shopping Center for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas September 8, 2004 4
HARRISON POINTE SHOPPING CENTER STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 346,221 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 63,170 ---------- Total Revenues. . . . . . . . . . . . . . . . . . . . . 409,391 ---------- CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 82,670 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 94,133 ---------- Total Certain Expenses. . . . . . . . . . . . . . . . . 176,803 ---------- EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 232,588 ========== See accompanying notes to statement of revenues and certain expenses.
5 HARRISON POINTE SHOPPING CENTER NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Harrison Pointe Shopping Center (the "Property"). The development of this property was substantially completed in 2003 and was purchased by Weingarten Realty Investors (the "Company") through its interest in WRI/Raleigh LP effective January 1, 2004 from J&H of Raleigh, LLC. This acquisition is a 124,000 square foot center in Cary, North Carolina, a suburb of Raleigh, North Carolina, and is anchored by Harris Teeter and Staples. The Property was 56.6% occupied as of December 31, 2003. A single tenant had minimum rentals of 33.0% and no other tenant had minimum rentals exceeding 10.9% of the total minimum rentals for the month ended December 31, 2003. 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, 2003 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. 6 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2003 is as follows:
2004 $ 854,979 2005 863,976 2006 873,750 2007 822,652 2008 736,872 Thereafter 4,929,487
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, 2003, and tenant reimbursements totaled $63,170 for the year ended December 31, 2003. 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 Leesville Shopping Center (the "Property") for the year ended December 31, 2003. 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 Leesville Shopping Center for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas September 8, 2004 8
LEESVILLE SHOPPING CENTER STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,877,997 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 254,617 ------------ Total Revenues. . . . . . . . . . . . . . . . . . . . . 2,132,614 ------------ CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 267,034 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 129,287 ------------ Total Certain Expenses. . . . . . . . . . . . . . . . . 396,321 ------------ EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 1,736,293 ============ See accompanying notes to statement of revenues and certain expenses.
9 LEESVILLE SHOPPING CENTER NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Leesville Shopping Center (the "Property"). The Property is a 114,000 square foot shopping center located in Leesville, North Carolina, a suburb of Raleigh, North Carolina. The Property was purchased by Weingarten Realty Investors (the "Company") through its interest in WRI/Raleigh LP effective January 1, 2004 from REA Development LLC. The Property was 98.8% occupied as of December 31, 2003, and is anchored by Harris Teeter. A single tenant had minimum rentals of 34.6% and no other tenant had minimum rentals exceeding 9.2% of the total minimum rentals for the year ended December 31, 2003. 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, 2003 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. 10 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2003 is as follows:
2004 $ 1,878,647 2005 1,761,935 2006 1,698,850 2007 1,410,969 2008 1,422,115 Thereafter 13,309,402
The future minimum lease payments do not include estimates for tenant reimbursements nor amounts based on a percentage of tenants' sales. No percentage rental income was recognized for the year ended December 31, 2003, and tenant reimbursements totaled $254,617 for the year ended December 31, 2003. 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 the TFK Portfolio for the year ended December 31, 2003. This Historical Summary is the responsibility of the TFK Portfolio'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 TFK Portfolio'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 the TFK Portfolio for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas September 8, 2004 12
TFK PORTFOLIO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,409,855 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 3,676,618 ------------- Total Revenues. . . . . . . . . . . . . . . . . . . . . 16,086,473 ------------- CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 1,892,690 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 2,071,717 ------------- Total Certain Expenses. . . . . . . . . . . . . . . . . 3,964,407 ------------- EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 12,122,066 ============= See accompanying notes to statement of revenues and certain expenses.
13 TFK PORTFOLIO NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of the TFK Portfolio. The TFK Portfolio was purchased by Weingarten Realty Investors on March 1, 2004 from TFK Retail, Ltd. This acquisition includes four shopping centers aggregating 1,135,000 square feet. First Colony Commons is located in Sugar Land, Texas, a suburb of Houston; TJ Maxx Plaza is located in Kendall, Florida, a suburb of Miami; Largo Mall is located near St. Petersburg, Florida; and Tates Creek is located in Lexington, Kentucky. The TFK Portfolio was 89.4% occupied as of December 31, 2003. No single tenant had minimum rentals exceeding 6.97% of the total minimum rentals for the year ended December 31, 2003. 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, 2003 includes the historical revenues and certain operating expenses of the TFK Portfolio, 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 TFK Portfolio. 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 TFK Portfolio'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. 14 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2003 is as follows:
2004 $ 12,414,946 2005 11,460,349 2006 10,123,763 2007 8,965,486 2008 6,316,112 Thereafter 18,492,704
The future minimum lease payments do not include estimates for tenant reimbursements nor amounts based on a percentage of the tenants' sales. Percentage rental income and tenant reimbursements totaled $228,978 and $3,676,618, respectively, for the year ended December 31, 2003. 15
TFK PORTFOLIO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE PERIOD FROM JANUARY 1, 2004 THROUGH FEBRUARY 28, 2004 (Unaudited) REVENUES: Rental . . . . . . . . . . . . . . . . . $ 2,219,614 Tenant reimbursements. . . . . . . . . . 730,073 ------------ Total Revenues . . . . . . . . 2,949,687 ------------ CERTAIN EXPENSES: Property operating and maintenance . . . 266,731 Ad valorem taxes . . . . . . . . . . . . 366,397 ------------ Total Certain Expenses . . . . 633,128 ------------ EXCESS OF REVENUES OVER CERTAIN EXPENSES . . $ 2,316,559 ============
16 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 Pavilions at San Mateo (the "Property") for the year ended December 31, 2003. 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 Pavilions at San Mateo for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas September 8, 2004 17
PAVILIONS AT SAN MATEO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,783,111 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 465,129 ------------ Total Revenues. . . . . . . . . . . . . . . . . . . . . 3,248,240 ------------ CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 325,053 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 179,007 ------------ Total Certain Expenses. . . . . . . . . . . . . . . . . 504,060 ------------ EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 2,744,180 ============ See accompanying notes to statement of revenues and certain expenses.
18 PAVILIONS AT SAN MATEO NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Pavilions at San Mateo (the "Property"). Weingarten Realty Investors (the "Company"), and a wholly owned entity of the Company, WRI/Pavilion Inc., owned a 30% interest in the Property. On April 30, 2004, the Company purchased the remaining 70% interest in the Property from Shannon Property Management. The Property is a 196,000 square foot retail center that is located in Albuquerque, New Mexico, and is anchored by Linens 'N Things and Circuit City. The Property was 92.6% occupied as of December 31, 2003. Four tenants had minimum rentals ranging from 18.8% to 11.2% and no other tenant had minimum rentals exceeding 7.8% of the total minimum rentals for the year ended December 31, 2003. 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, 2003 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. 19 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2003 is as follows:
2004 $ 2,732,956 2005 2,668,887 2006 2,562,190 2007 2,432,313 2008 2,079,067 Thereafter 9,400,661
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, 2003, and tenant reimbursements totaled $465,129 for the year ended December 31, 2003. 20
PAVILIONS AT SAN MATEO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE PERIOD FROM JANUARY 1, 2004 THROUGH APRIL 29, 2004 (Unaudited) REVENUES: Rental . . . . . . . . . . . . . . . . . $ 881,231 Tenant reimbursements. . . . . . . . . . 156,775 ------------ Total Revenues . . . . . . . . 1,038,006 ------------ CERTAIN EXPENSES: Property operating and maintenance . . . 113,107 Ad valorem taxes . . . . . . . . . . . . 59,732 ------------ Total Certain Expenses . . . . 172,839 ------------ EXCESS OF REVENUES OVER CERTAIN EXPENSES . . $ 865,167 ============
21 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 Rockwall Market Center (the "Property") for the year ended December 31, 2003. 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 Rockwall Market Center for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas September 8, 2004 22
ROCKWALL MARKET CENTER STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,556,979 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 664,204 ------------ Total Revenues. . . . . . . . . . . . . . . . . . . . . 3,221,183 ------------ CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 214,097 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 455,390 ------------ Total Certain Expenses. . . . . . . . . . . . . . . . . 669,487 ------------ EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 2,551,696 ============ See accompanying notes to statement of revenues and certain expenses.
23 ROCKWALL MARKET CENTER NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Rockwall Market Center (the "Property"). Weingarten Realty Investors (the "Company"), and a wholly owned entity of the Company, WRI/Rockwall, Inc., owned a 30% interest in the Property. On April 30, 2004, the Company purchased the remaining 70% interest in the Property from Shannon Property Management. The Property is a 209,000 square foot retail center that is located in Rockwall, Texas, and is anchored by Linens 'N Things, Michael's, OfficeMax, Old Navy, and Ross Dress for Less. The Property was 99.3% occupied as of December 31, 2003. No single tenant had minimum rentals exceeding 10.1% of the total minimum rentals for the year ended December 31, 2003. 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, 2003 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. 24 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2003 is as follows:
2004 $ 2,396,867 2005 2,241,383 2006 2,093,627 2007 1,997,718 2008 1,967,560 Thereafter 6,640,234
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, 2003, and tenant reimbursements totaled $664,204 for the year ended December 31, 2003. 25
ROCKWALL MARKET CENTER STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE PERIOD FROM JANUARY 1, 2004 THROUGH APRIL 29, 2004 (Unaudited) REVENUES: Rental . . . . . . . . . . . . . . . . . . . . . $ 844,225 Tenant reimbursements. . . . . . . . . . . . . . 215,044 ------------ Total Revenues . . . . . . . . . . . . 1,059,269 ------------ CERTAIN EXPENSES: Property operating and maintenance . . . . . . . 69,579 Ad valorem taxes . . . . . . . . . . . . . . . . 153,762 ------------ Total Certain Expenses . . . . . . . . 223,341 ------------ EXCESS OF REVENUES OVER CERTAIN EXPENSES . . . . . . $ 835,928 ============
26 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 Lone Star Pavilions (the "Property") for the year ended December 31, 2003. 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 Lone Star Pavilions for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Houston, Texas September 8, 2004 27
LONE STAR PAVILIONS STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 REVENUES: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,117,972 Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 353,091 ------------ Total Revenues. . . . . . . . . . . . . . . . . . . . . 1,471,063 ------------ CERTAIN EXPENSES: Property operating and maintenance. . . . . . . . . . . . . . . . 117,424 Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 224,521 ------------ Total Certain Expenses. . . . . . . . . . . . . . . . . 341,945 ------------ EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 1,129,118 ============ See accompanying notes to statement of revenues and certain expenses.
28 LONE STAR PAVILIONS NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 1. ORGANIZATION The accompanying statement of revenues and certain expenses (the "Historical Summary") includes the operations of Lone Star Pavilions (the "Property"). Weingarten Realty Investors (the "Company"), and a wholly owned entity of the Company, WRI/Lone Star, Inc., owned a 30% interest in the Property. On April 30, 2004, the Company purchased the remaining 70% interest in the Property from Shannon Property Management. The Property is a 107,000 square foot retail center that is located in College Station, Texas, and is anchored by Barnes & Noble, Office Depot and Best Buy. The Property was 98.1% occupied as of December 31, 2003. Three tenants had minimum rentals ranging from 28.7% to 23.3% and no other tenant had minimum rentals exceeding 6.7% of the total minimum rentals for the year ended December 31, 2003. 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, 2003 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. 29 3. RENTALS UNDER OPERATING LEASES Future minimum rental income from non-cancelable operating leases at December 31, 2003 is as follows:
2004 $ 1,087,464 2005 1,065,488 2006 980,270 2007 924,488 2008 922,042 Thereafter 4,231,728
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, 2003, and tenant reimbursements totaled $353,091 for the year ended December 31, 2003. 30
LONE STAR PAVILIONS STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE PERIOD FROM JANUARY 1, 2004 THROUGH APRIL 29, 2004 (Unaudited) REVENUES: Rental . . . . . . . . . . . . . . . . . . . . $ 375,324 Tenant reimbursements. . . . . . . . . . . . . 110,532 ---------- Total Revenues . . . . . . . . . . . 485,856 ---------- CERTAIN EXPENSES: Property operating and maintenance . . . . . . 30,592 Ad valorem taxes . . . . . . . . . . . . . . . 77,410 ---------- Total Certain Expenses . . . . . . . 108,002 ---------- EXCESS OF REVENUES OVER CERTAIN EXPENSES . . . . . $ 377,854 ==========
31 WEINGARTEN REALTY INVESTORS PRO FORMA CONDENSED STATEMENTS OF CONSOLIDATED INCOME (in thousands, except per share amounts) These unaudited Pro Forma Condensed Statements of Consolidated Income for the year ended December 31, 2003 and the six months ended June 30, 2004 are presented as if (A) the acquisition of the acquired properties and (B) the acquisition of other properties, as set forth in the Notes and Significant Assumptions, had occurred as of the beginning of each period. In management's opinion, all adjustments necessary to reflect the effects of these transactions have been made. These unaudited Pro Forma Condensed Statements of Consolidated Income are not necessarily indicative of what actual results of operations would have been had these transactions occurred on the beginning of each period, nor do they purport to represent the results of operations for future periods.
WEINGARTEN REALTY INVESTORS PRO FORMA CONDENSED STATEMENTS OF CONSOLIDATED INCOME YEAR ENDED DECEMBER 31, 2003 (Unaudited) Adjustment Adjustment for Acquired for Other Pro Historical Properties(A) Acquisitions(B) Forma ---------- ------------- --------------- ---------- Revenues: Rentals . . . . . . . . . . . . . . . . . . . . . $ 407,387 $ 26,569 $ 10,130 $ 444,086 Interest income . . . . . . . . . . . . . . . . . 1,587 9 30 1,626 Other . . . . . . . . . . . . . . . . . . . . . . 7,067 340 44 7,451 ---------- ------------- --------------- ---------- Total . . . . . . . . . . . . . . . . . . . . 416,041 26,918 10,204 453,163 ---------- ------------- --------------- ---------- Expenses: Depreciation and amortization . . . . . . . . . . 93,382 6,633 2,975 102,990 Interest. . . . . . . . . . . . . . . . . . . . . 88,871 7,454 4,163 100,488 Operating . . . . . . . . . . . . . . . . . . . . 64,608 3,962 1,748 70,318 Ad valorem taxes. . . . . . . . . . . . . . . . . 47,129 3,154 877 51,160 General and administrative. . . . . . . . . . . . 13,820 13,820 Loss on early redemption of preferred shares. . . 2,739 2,739 ---------- ------------- --------------- ---------- Total . . . . . . . . . . . . . . . . . . 310,549 21,203 9,763 341,515 ---------- ------------- --------------- ---------- Operating Income. . . . . . . . . . . . . . . . . . . 105,492 5,715 441 111,648 Equity in Earnings of Joint Ventures. . . . . . . . . 4,743 1,080 5,823 Income Allocated to Minority Interests. . . . . . . . (2,723) (205) (107) (3,035) Gain on Sale of Properties. . . . . . . . . . . . . . 714 714 ---------- ------------- --------------- ---------- Income Before Discontinued Operations . . . . . . . . 108,226 5,510 1,414 115,150 ---------- ------------- --------------- ---------- Operating Income from Discontinued Operations . . 2,015 2,015 Gain on Sale of Properties. . . . . . . . . . . . 6,039 6,039 ---------- ------------- --------------- ---------- Income from Discontinued Operations . . . 8,054 8,054 ---------- ------------- --------------- ---------- Net Income. . . . . . . . . . . . . . . . . . . . . . $ 116,280 $ 5,510 $ 1,414 $ 123,204 ========== ============= =============== ========== Net Income Available to Common Shareholders: Basic . . . . . . . . . . . . . . . . . . . . . . $ 97,880 $ 5,510 $ 1,414 $ 104,804 ========== ============= =============== ========== Diluted . . . . . . . . . . . . . . . . . . . . . $ 100,920 $ 5,715 $ 1,521 $ 108,156 ========== ============= =============== ========== Net Income per Common Share - Basic . . . . . . . . . $ 1.24 $ 1.33 ========== ========== Net Income per Common Share - Diluted . . . . . . . . $ 1.24 $ 1.32 ========== ========== Weighted Average Number of Shares Outstanding: Basic . . . . . . . . . . . . . . . . . . . . . . 78,800 78,800 ========== ========== Diluted . . . . . . . . . . . . . . . . . . . . . 81,574 81,706 ========== ==========
32
WEINGARTEN REALTY INVESTORS PRO FORMA CONDENSED STATEMENTS OF CONSOLIDATED INCOME SIX MONTHS ENDED JUNE 30, 2004 (Unaudited) Adjustment Adjustment for Acquired for Other Pro Historical Properties(A) Acquisitions(B) Forma ---------- ------------- --------------- ---------- Revenues: Rentals . . . . . . . . . . . . . . . . . . . . . $ 237,411 $ 5,604 $ 4,088 $ 247,103 Interest income . . . . . . . . . . . . . . . . . 659 1 18 678 Other . . . . . . . . . . . . . . . . . . . . . . 2,713 32 16 2,761 ---------- ------------- --------------- ---------- Total . . . . . . . . . . . . . . . . . . . . 240,783 5,637 4,122 250,542 ---------- ------------- --------------- ---------- Expenses: Depreciation and amortization . . . . . . . . . . 55,707 1,300 1,101 58,108 Interest. . . . . . . . . . . . . . . . . . . . . 55,873 1,323 1,637 58,833 Operating . . . . . . . . . . . . . . . . . . . . 35,994 702 508 37,204 Ad valorem taxes. . . . . . . . . . . . . . . . . 29,112 657 272 30,041 General and administrative. . . . . . . . . . . . 7,962 7,962 Loss on early redemption of preferred shares. . . 3,566 3,566 ---------- ------------- --------------- ---------- Total . . . . . . . . . . . . . . . . . . 188,214 3,982 3,518 195,714 ---------- ------------- --------------- ---------- Operating Income. . . . . . . . . . . . . . . . . . . 52,569 1,655 604 54,828 Equity in Earnings of Joint Ventures. . . . . . . . . 2,937 314 3,251 Income Allocated to Minority Interests. . . . . . . . (1,854) (8) (1,862) Impairment Loss on Land Held for Development. . . . . (2,700) (2,700) Gain on Sale of Properties. . . . . . . . . . . . . . 419 419 ---------- ------------- --------------- ---------- Income Before Discontinued Operations . . . . . . . . 51,371 1,655 910 53,936 ---------- ------------- --------------- ---------- Operating Income from Discontinued Operations . . 790 790 Gain on Sale of Properties. . . . . . . . . . . . 13,430 13,430 ---------- ------------- --------------- ---------- Income from Discontinued Operations . . . 14,220 14,220 ---------- ------------- --------------- ---------- Net Income. . . . . . . . . . . . . . . . . . . . . . $ 65,591 $ 1,655 $ 910 $ 68,156 ========== ============= =============== ========== Net Income Available to Common Shareholders: Basic . . . . . . . . . . . . . . . . . . . . . . $ 63,060 $ 1,655 $ 910 $ 65,625 ========== ============= =============== ========== Diluted . . . . . . . . . . . . . . . . . . . . . $ 64,751 $ 1,655 $ 918 $ 67,324 ========== ============= =============== ========== Net Income per Common Share - Basic . . . . . . . . . $ .75 $ .78 ========== ========== Net Income per Common Share - Diluted . . . . . . . . $ .74 $ .77 ========== ========== Weighted Average Number of Shares Outstanding: Basic . . . . . . . . . . . . . . . . . . . . . . 84,371 84,371 ========== ========== Diluted . . . . . . . . . . . . . . . . . . . . . 87,451 87,463 ========== ==========
33 WEINGARTEN REALTY INVESTORS PRO FORMA CONDENSED BALANCE SHEET AS OF JUNE 30, 2004 (Unaudited) (in thousands) This unaudited Pro Forma Condensed Balance Sheet is presented as if (A) the acquisition 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, 2004. 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. . . . . . . . . . . . . . . . . . . . $ 3,608,809 $ 3,608,809 Accumulated Depreciation. . . . . . . . . . . . (573,048) $ (1,809) (574,857) ------------ ------------ ------------ Property - net. . . . . . . . . . . . . . . 3,035,761 (1,809) 3,033,952 Investment in Real Estate Joint Ventures. . . . 48,939 314 49,253 ------------ ------------ ------------ Total . . . . . . . . . . . . . . . . . . 3,084,700 (1,495) 3,083,205 Notes Receivable from Real Estate Joint Ventures and Partnerships . . . . . . . . . . 44,892 44,892 Unamortized Debt and Lease Costs. . . . . . . . 82,935 (592) 82,343 Accrued Rent and Accounts Receivable, net . . . 38,571 38,571 Other . . . . . . . . . . . . . . . . . . . . . 96,928 4,399 101,327 ------------ ------------ ------------ Total . . . . . . . . $ 3,348,026 $ 2,312 $ 3,350,338 ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY: Debt. . . . . . . . . . . . . . . . . . . . . . . . $ 2,202,048 $ 2,202,048 Accounts Payable and Accrued Expenses . . . . . . . 82,278 82,278 Other . . . . . . . . . . . . . . . . . . . . . . . 79,058 $ (261) 78,797 ------------ ------------ ------------ Total . . . . . . . . . . . . . . . . . . 2,363,384 (261) 2,363,123 ------------ ------------ ------------ Minority Interest . . . . . . . . . . . . . . . . . 57,479 8 57,487 ------------ ------------ ------------ Shareholders' Equity. . . . . . . . . . . . . . . . 927,163 2,565 929,728 ------------ ------------ ------------ Total . . . . . . . . $ 3,348,026 $ 2,312 $ 3,350,338 ============ ============ ============
34 WEINGARTEN REALTY INVESTORS NOTES AND SIGNIFICANT ASSUMPTIONS (Unaudited) (A) ACQUIRED PROPERTIES The aggregate purchase price for the acquisitions described below (the "Acquired Properties") was $254.7 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 1.87%), with the exception of $42.8 million of debt (average rate of 3.67%), which was assumed by us. Pro forma revenues and expenses, other than interest and depreciation, represent the historical amounts of the Acquired Properties. In January 2004 we acquired two supermarket-anchored shopping centers. Harrison Pointe Center is a 124,000 square foot shopping center located in Cary, North Carolina, a suburb of Raleigh, and Leesville Town Centre is a 114,000 square foot shopping center located in Raleigh, North Carolina. Both of these shopping centers were acquired in a limited partnership utilizing a DownREIT structure and are anchored by Harris Teeter. In March 2004 we completed the acquisition of the TFK Portfolio, a portfolio of four shopping centers aggregating 1,135,0000 square feet. First Colony Commons is located in Sugar Land, Texas, a suburb of Houston; TJ Maxx Plaza is located in Kendall, Florida, a suburb of Miami; Largo Mall is located near St. Petersburg, Florida, and Tates Creek is located in Lexington, Kentucky. In April 2004 we acquired our joint venture partners' interests in three of our existing shopping centers, of which two are located in Texas and one in New Mexico. Pavilions at San Mateo is a 196,000 square foot retail center that is located in Albuquerque, New Mexico, and is anchored by Linen 'N Things and Circuit City. Rockwall Market Center is a 209,000 square foot retail center that is located in Rockwall, Texas, and is anchored by Linens 'N Things, Michael's, OfficeMax, Old Navy and Ross Dress for Less. Lone Star Pavilions is a 107,000 square foot retail center that is located in College Station, Texas, and is anchored by Barnes & Noble, Office Depot and Best Buy. (B) OTHER ACQUISITIONS The aggregate purchase price for the acquisitions described below (the "Other Acquisitions") was $135.3 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 1.87%) with the exception of $58.4 million of debt (rate of 5.63%), 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 2004 we acquired Greenhouse Marketplace, a 151,000 square foot shopping center located in San Leandro, California. Big Lots, Cents Only and Factory 2-U anchor this retail center. In April 2004, three 50%-owned unconsolidated joint ventures acquired an interest in three retail properties located in McAllen, Texas. Las Tiendas Plaza is a 499,900 square foot center anchored by Target and Mervyn's (both corporately owned), as well as Ross Dress for Less, Marshall's and Office Depot. Northcross is a 76,500 square foot center and is anchored by Barnes & Noble and Blockbuster. The third property is HEB South 10th Street, which is anchored by an HEB supermarket. In April 2004 we also acquired our joint venture partner's interest in an existing shopping center located in Houston, Texas. In May 2004 we acquired an industrial project and two retail centers. Southside Industrial Parkway is a 72,000 square foot industrial center located in Atlanta, Georgia. El Camino Promenade is a 111,000 square foot shopping center that is anchored by TJ Maxx, AMC Theater and Beverages & More, and is located in 35 Encinitas, California. Village Shoppes of Sugarloaf is a 148,000 square foot shopping center, which is located in Lawrenceville, Georgia, a suburb of Atlanta. Publix anchors this retail center. In June 2004 we acquired Roswell Corners, a 137,000 square foot shopping center, which is located in Roswell, Georgia, and is anchored by Staples, TJ Maxx and Super Target (corporately owned). Also in June 2004 we acquired an interest in a retail property through a 50%-owned unconsolidated joint venture. Western Plaza is a 56,000 square foot center, which is anchored by Big Lots and located in Fenton, Missouri. 36
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 our historical operating results for the year ended December 31, 2003 adjusted for the effect of (A) the acquisition 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 . . . . . . . . . . . . . . . . . . . . . . . . . $ 453,163 Expenses: Depreciation and amortization . . . . . . . . . . . 102,990 Interest. . . . . . . . . . . . . . . . . . . . . . 100,488 Operating . . . . . . . . . . . . . . . . . . . . . 70,318 Ad valorem taxes. . . . . . . . . . . . . . . . . . 51,160 General and administrative. . . . . . . . . . . . . 13,820 Loss on early redemption of preferred shares. . . . 2,739 ---------- Total Expenses. . . . . . . . . . . . . . . . . 341,515 ---------- Operating Income. . . . . . . . . . . . . . . . . . . . . 111,648 Equity in Earnings of Joint Ventures. . . . . . . . . . . 5,823 Income Allocated to Minority Interests. . . . . . . . . . (3,035) Gain on Sale of Properties. . . . . . . . . . . . . . . . 714 Income from Discontinued Operations . . . . . . . . . . . 8,054 ---------- Estimated Taxable Operating Income. . . . . . . . . . . . 123,204 Adjustments: Depreciation and amortization . . . . . . . . . . . . . . 104,063 Loss on early redemption of preferred shares `. . . . . . 2,739 Equity in earnings of joint ventures. . . . . . . . . . . (5,823) Income allocated to minority interests. . . . . . . . . . 3,035 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 . . . $ 179,309 ==========
(c) Exhibits Exhibit Number Description --------------- ----------- 23.1 Consent of Deloitte & Touche LLP 37 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: September 9, 2004 WEINGARTEN REALTY INVESTORS By: /s/ Joe D. Shafer -------------------------------- Joe D. Shafer Vice President/Controller (Principal Accounting Officer) 38