EX-99.1 2 ex99-1.htm EXHIBIT 99.1 Exhibit 99.1


NEWS RELEASE
Information: Brook Wootton
 
(713) 866-6050


Weingarten Realty Investors Announces Strong 2004 Fiscal Year Earnings
and Dividend Increase of Six Percent
 
HOUSTON, TEXAS (February 24, 2005) -- Weingarten Realty Investors (NYSE: WRI) announced today the results of its fourth quarter and year ended December 31, 2004. The highlights included:
 
·  
Rental revenues for the fourth quarter 2004 increased to $128.8 million as compared to $108.3 million for the same period of 2003, an 18.9% increase. For the year ended 2004, rental revenues increased to $492.0 million as compared to $403.9 million for 2003, a 21.8% increase;

·  
Net income available to common shareholders, on a diluted basis, for the fourth quarter 2004 totaled $43.2 million, or $0.46 per share, as compared to $24.2 million, or $0.29 per share, for the fourth quarter 2003, an increase of $19.0 million, or 58.6% per share. For the full-year 2004, net income available to common shareholders, on a diluted basis, was $137.7 million as compared to $100.9 million for 2003, or $1.54 per share for 2004 as compared to $1.24 per share for 2003, an increase of $36.8 million or 24.2% on a per share basis. Net income for the year 2004 benefited from gains from the sales of properties of $26.4 million compared to gains of $6.8 million in the previous year;

·  
Funds from Operations (FFO) for the fourth quarter 2004, on a diluted basis, totaled $61.6 million, or $0.66 per share, compared to $47.9 million, or $0.58 per share for the same period in 2003, an increase of $13.7 million or 13.8% per share. Included in the fourth quarter 2004 results were various non-reoccurring charges of approximately $0.03 per share including an unusual amount of lease cancellation income that was partially offset by $0.01 per share of impairment charge associated with the planned disposition of two of the Company’s small properties. Included in the fourth quarter of 2003 was a non-cash charge for preferred redemption costs of approximately $0.03 per share. Adjusting for these unusual items in each year, FFO increased from $0.61 per share in 2003 to $0.64 per share in 2004;

·  
FFO, on a diluted basis, for the year ended December 31, 2004, was $225.7 million or $2.52 per share, compared to $184.0 million, or $2.26 per share, in 2003, representing an increase of 22.7% in dollars or 11.5% on a per share basis. The Company’s 2004 full-year results include total net adjustments that reduced FFO by about $0.05 per share. These adjustments include $0.07 per share of non-cash charges for both preferred share redemption and property impairment charges in the second quarter, and the previously discussed fourth quarter items which produced a positive net of approximately $0.02 per share. Additionally, the 2003 full-year FFO results included preferred share redemption charges of $0.06 per share. After adjusting both 2004 and 2003 for these unusual items, FFO for the full-year 2004 was $229.9 million or $2.57 per share, compared to $189.2 million or $2.32 per share in 2003, or an increase of 21.5% in dollars or 10.8% on a per share basis;
 
 
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·  
Acquisitions in 2004 added 3.6 million square feet to the portfolio, representing a total investment of $511.2 million;

·  
Dispositions of six properties during the year representing 683,000 square feet and provided proceeds of $49.9 million, generating gains of $24.9 million (these gains are not included in the above-mentioned FFO figures);

·  
Same property Net Operating Income (NOI) growth for the total portfolio was 2.7% for 2004 as compared to 1.8% in 2003. The retail portfolio continued to show strong NOI growth of 3.2% for the year compared to 1.7% growth in 2003; and

·  
The Board of Trust Managers increased the annual cash dividend for 2005 to $1.76 per common share, up from $1.66 per common share paid in 2004, a 6.0% increase. The first quarter 2005 dividend of $0.44 per common share is payable on March 15, 2005 to shareholders of record on March 7, 2005.

Alexander noted that the Company purchased 22 shopping centers, two industrial properties, and our joint venture partner’s interest in four additional properties during 2004, comprising 3.6 million square feet, and representing a total investment of $511.2 million with a weighted average stabilized return of over 8%. Our 2004 purchases include eleven properties in Texas (primarily in the Rio Grande Valley), five in Georgia, three in North Carolina, two each in California, Florida, New Mexico and Kentucky, and one in Missouri. Kentucky represents our 20th state, and was a logical expansion of our geographic footprint in the greater southern part of the United States from coast to coast.

With respect to new development, Weingarten completed eleven projects during 2004 totaling 851,000 square feet, representing an investment of $116.4 million (including 2004 expenditures of $18.4 million). These properties are 91.6% leased and have an existing return of 10%. Weingarten currently has five shopping centers in various stages of development, which will add 284,000 square feet to the portfolio with a total expected investment upon completion of $32.1 million, and are currently 72% leased. The developments are located in North Carolina, Arizona, Colorado and Utah, and we anticipate that the majority of these shopping centers will come on-line later this year.
 
The Company reported the completion of 1,337 new leases or renewals for the year totaling 5.6 million square feet. According to Mr. Alexander, the Company enjoyed outstanding leasing activity in 2004, increasing same store rental rates an average of 6.2% on a cash basis.
 
Alexander noted that the Company's occupancy levels have remained above 90% for the 55 plus years it has been in business, and with current levels of leasing activity and other factors, management anticipates that occupancy will remain strong throughout 2005. Occupancy in the portfolio increased as compared to the prior year is as follows:
 
Property Type
December 31, 2004
December 31, 2003
Shopping Centers
94.8%
93.5%
Industrial
92.6%
92.4%
Total
94.3%
93.3%


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With our list of well-known, successful anchor supermarkets and discount retailers coupled with both our prime locations which possess strong demographics and our attractive, well-managed centers, we have created superior shopping environments for the neighborhoods we serve. “This has proven to be a winning strategy for our retailers, their customers and our shareholders,” stated Alexander.
 
Alexander further reported that the Company was very active in the financing arena during the year. The Company raised net proceeds of $219.9 million through the issuance of 6.8 million shares of common shares through two separate public offerings. The Company also received net proceeds of $70.2 million through the issuance of 2.9 million depositary shares with a coupon of 6.95% Series E Cumulative Redeemable Preferred shares. The Company also issued $375 million of medium-term notes with an effective weighted average maturity of 9.3 years and a weighted average interest rate of 5.0%
 
Alexander commented, “By focusing on our strategy of maintaining a strong, conservative capital structure, we have been able to secure access to a wide variety of capital sources that offer an attractive range of financing transactions for the Company’s growth needs. We continue to lead the REIT industry with debt ratings of “A” by Standard and Poor’s, and “A3” by Moody’s rating services.”
 
Corporate Outlook
Our business plan for 2005 includes continued growth of NOI from our portfolio, investing approximately $500 million in acquisitions, $50 million in new development, and an estimated $100 million in expected property dispositions. “Our challenge in today’s market environment will be to continue our current acquisition pace, as well as to capitalize on divestiture of non-core assets as fluctuations in either could have an effect on our FFO guidance. By continuing to maintain sound underwriting practices and only investing when we can achieve returns above our weighted average cost of capital, we should be able to maintain our historically solid and predictable performance. We expect our 2005 FFO will be in the range of $2.68 - $2.75 per share,” added Alexander.

About Weingarten Realty Investors
Weingarten Realty Investors is a Houston, Texas, based real estate investment trust with 348 income-producing properties in 20 states that span the greater southern part of the United States from coast to coast. Included in the portfolio are 288 neighborhood and community shopping centers, comprising approximately 90% of the Company’s revenues, and 60 industrial properties comprising a total of 46.1 million square feet. Weingarten has one of the most diversified tenant bases of any REIT in its sector, with the largest of its over 5,100 tenants comprising less than 3% of total rental revenues. The Company's common shares are listed on the New York Stock Exchange, trading under the symbol "WRI". Additional information on Weingarten can be found at www.weingarten.com

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Conference Call Information
The Company announced that it will host a live webcast of its quarterly conference on Friday, February 25, 2005 at 9:00 AM Central Time. A replay of the call will be available for 24 hours following the live call, and can be heard by dialing (877) 519-4471, confirmation code #5606573. The webcast can also be accessed via the Company's Web site at www.weingarten.com, and will be archived there for approximately 90 days.

Forward-Looking Statements
Statements included herein that state the Company's or Management's intentions, hopes, beliefs, expectations or predictions of the future are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 which by their nature, involve known and unknown risks and uncertainties. The Company's actual results, performance or achievements could differ materially from those expressed or implied by such statements. Reference is made to the Company's regulatory filings with the Securities and Exchange Commission for information or factors that may impact the Company's performance.


CONTACT:

Steve Richter, Chief Financial Officer, 713.866.6054
Brook Wootton, Director, Investor Relations, 713.866.6050

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Financial Statements
Weingarten Realty Investors
(in thousands, except per share amounts that are reported on a post-split basis)
                   
                   
   
Three Months Ended
  
Twelve Months Ended
  
   
December 31,
  
December 31,
  
STATEMENTS OF CONSOLIDATED INCOME AND FUNDS FROM OPERATIONS
  
2004
  
2003
  
2004
  
2003
  
 
  
(Unaudited)
  
(Unaudited)
  
Rental Income
  
$
128,757
  
$
108,322
  
$
492,036
  
$
403,851
  
Interest Income
    
359
   
310
   
1,391
   
1,584
 
Other Income
    
5,096
   
1,313
   
8,864
   
7,051
 
            Total Revenues    
134,212
   
109,945
   
502,291
   
412,486
 
Depreciation and Amortization
    
30,346
   
26,890
   
115,791
   
92,394
 
Interest Expense
    
29,807
   
26,176
   
115,506
   
88,871
 
Operating Expense
    
21,766
   
17,825
   
78,134
   
63,906
 
Ad Valorem Taxes
    
14,109
   
11,905
   
57,304
   
46,641
 
General and Administrative Expense
    
4,075
   
3,694
   
16,122
   
13,820
 
Loss on Early Redemption of Preferred Shares
          
2,739
   
3,566
   
2,739
 
            Total Expenses    
100,103
   
89,229
   
386,423
   
308,371
 
Operating Income
   
34,109
   
20,716
   
115,868
   
104,115
 
Equity in Earnings of Joint Ventures
    
979
   
1,222
   
5,572
   
4,743
 
Income Allocated to Minority Interests
    
(2,073
)
  
(400
)
  
(4,928
)
  
(2,723
)
Impairment Loss
   
(850
)
        
(3,550
)
      
Gain on Sale of Properties
    
746
   
714
   
1,535
   
714
 
Income Before Discontinued Operations
   
32,911
   
22,252
   
114,497
   
106,849
 
Operating Income From Discontinued Operations
   
188
   
673
   
2,001
   
3,392
 
Gain on Sale of Properties
   
11,453
   
1,811
   
24,883
   
6,039
 
            Income from Discontinued Operations    
11,641
   
2,484
   
26,884
   
9,431
 
Net Income
    
44,552
   
24,736
   
141,381
   
116,280
 
Less:   Preferred Dividends
    
2,511
   
1,266
   
7,470
   
15,912
 
            Original Issuance Costs associated with
                Series A Preferred Shares
                      
2,488
 
Net Income Available to Common Shareholders--Basic
  
$
42,041
  
$
23,470
  
$
133,911
  
$
97,880
  
Net Income Per Common Share--Basic
  
$
0.47
  
$
0.29
  
$
1.55
  
$
1.24
  
Net Income Available to Common Shareholders--Diluted
  
$
43,196
  
$
24,163
  
$
137,709
  
$
100,920
  
Net Income Per Common Share--Diluted
  
$
0.46
  
$
0.29
  
$
1.54
  
$
1.24
  
                           
                           
Funds from Operations:
                          
Net Income Available to Common Shareholders
  
$
42,041
  
$
23,470
  
$
133,911
  
$
97,880
  
Depreciation and Amortization
    
28,805
   
25,395
   
108,678
   
86,913
 
Depreciation and Amortization of Unconsolidated Joint
    Ventures
    
1,058
   
583
   
3,131
   
1,940
 
Gain on Sale of Properties
    
(12,208
)
  
(2,527
)
  
(26,403
)
  
(6,765
)
(Gain) Loss on Sale of Properties of Unconsolidated Joint
    Ventures
    
85
         
87
   
(508
)
Funds from Operations--Basic
  
$
59,781
  
$
46,921
  
$
219,404
  
$
179,460
  
Funds from Operations Per Common Share--Basic
  
$
0.67
  
$
0.58
  
$
2.55
  
$
2.28
  
Funds from Operations--Diluted
  
$
61,649
  
$
47,914
  
$
225,735
  
$
184,014
  
Funds from Operations Per Common Share--Diluted
  
$
0.66
  
$
0.58
  
$
2.52
  
$
2.26
  
Weighted Average Shares Outstanding--Basic
    
88,951
   
80,610
   
86,171
   
78,800
 
Weighted Average Shares Outstanding--Diluted
    
92,979
   
83,324
   
89,511
   
81,574
 
                           
                           
     
December 31,  
    
December 31,  
              
     
2004
    
2003
              
CONSOLIDATED BALANCE SHEETS
    
(Unaudited)
 
  
(Audited)
 
            
Property
  
$
3,751,607
  
$
3,200,091
              
Accumulated Depreciation
    
(609,772
)
  
(527,375
)
            
Investment in Real Estate Joint Ventures
    
48,382
   
35,085
             
Notes Receivable
    
34,001
   
36,825
             
Unamortized Debt and Lease Costs
    
91,155
   
73,945
             
Accrued Rent and Accounts Receivable, net
    
57,964
   
40,325
             
Cash and Cash Equivalents
    
45,415
   
20,255
             
Other Assets
    
51,566
   
43,943
             
            Total Assets  
$
3,470,318
  
$
2,923,094
              
                           
Debt
  
$
2,105,948
  
$
1,810,706
              
Preferred Shares Subject to Mandatory Redemption, net
          
109,364
             
Accounts Payable and Accrued Expenses
    
99,680
   
78,986
             
Other
    
94,800
   
52,671
             
            Total Liabilities    
2,300,428
   
2,051,727
             
                           
Minority Interest
   
73,930
   
49,804
             
                           
Preferred Shares of Beneficial Interest
    
4
   
3
             
Common Shares of Beneficial Interest
    
2,672
   
2,488
             
Capital Surplus
    
1,283,270
   
993,657
             
Accumulated Dividends in Excess of Net Income
    
(185,243
)
  
(174,234
)
            
Accumulated Other Comprehensive Loss
    
(4,743
)
  
(351
)
            
            Total Shareholders' Equity    
1,095,960
   
821,563
             
                  Total Liabilities and Shareholders' Equity  
$
3,470,318
  
$
2,923,094
              
                           
Note: Certain reclassifications of prior year amounts have been made to conform with the current year presentation.
 
 
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