SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-9876
WEINGARTEN REALTY INVESTORS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 74-1464203
(State or other jurisdiction of incorporation or organization) (IRS
Employer
Identification No.)
2600 Citadel Plaza Drive
P.O. Box 924133
Houston, Texas 77292-4133
(Address of principal executive offices) (Zip Code)
(713) 866-6000
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act.
Title of Each Class Name of each exchange on which registered
------------------- -----------------------------------------
Common Shares of Beneficial Interest, New York Stock
$0.03 par value Exchange
Series A Cumulative Redeemable Preferred New York Stock
Shares, $0.03 par value Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [X] NO [ ].
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the common shares held by non-affiliates
(based upon the closing sale price on the New York Stock Exchange) on February
25, 1998 was approximately $1,204,961,470. As of February 25, 1998, there
were 26,665,814 shares of beneficial interest, $.03 par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement in connection with its
Annual Meeting of Shareholders to be held May 8, 1998 are incorporated by
reference in Part III.
Exhibit Index beginning on Page 35
<TABLE>
<CAPTION>
TABLE OF CONTENTS
ITEM NO PAGE NO.
- -------- --------
<S> <C> <C> <C>
PART I
1. Business 1
2. Properties 3
3. Legal Proceedings 12
4. Submission of Matters to a Vote of Shareholders 12
Executive Officers of the Registrant 13
PART II
5. Market for Registrant's Common Shares of Beneficial
Interest and Related Shareholder Matters 14
6. Selected Financial Data 15
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 16
8. Financial Statements and Supplementary Data 19
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 34
PART III
10. Trust Managers and Executive Officers of the Registrant 35
11. Executive Compensation 35
12. Security Ownership of Certain Beneficial Owners and
Management 35
13. Certain Relationships and Related Transactions 35
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 35
</TABLE>
PART I
ITEM 1. BUSINESS
General. Weingarten Realty Investors (the "Company"), an unincorporated
trust organized under the Texas Real Estate Investment Trust Act, and its
predecessor entity began the ownership and development of shopping centers and
other commercial real estate in 1948. The Company is self-advised and
self-managed and, as of December 31, 1997, owned or had interests in 194
developed income-producing real estate projects, 169 of which were shopping
centers, located in the Houston metropolitan area and in other parts of Texas
and in Louisiana, Arizona, Nevada, New Mexico, Oklahoma, Arkansas, Kansas,
Colorado, Missouri, Tennessee and Maine. The Company's other commercial real
estate projects included 23 industrial projects, one multi-family housing
property and one office building, which serves, in part, as the Company's
headquarters. The Company's interests in these projects aggregated
approximately 22.2 million square feet of building area and 85.4 million
square feet of land area. The Company also owned interests in 25 parcels of
unimproved land under development or held for future development which
aggregated approximately 8.1 million square feet.
The Company currently employs 171 persons and its principal executive
offices are located at 2600 Citadel Plaza Drive, Houston, Texas 77008, and its
phone number is (713) 866-6000.
Reorganizations. In December 1984, the Company engaged in a series of
transactions primarily designed to enable it to qualify as a real estate
investment trust ("REIT") for federal income tax purposes for the 1985
calendar year and subsequent years. The Company contributed certain assets
considered unsuitable for ownership by the Company as a REIT and $3.5 million
in cash to WRI Holdings, Inc. ("Holdings"), a Texas corporation and a
newly-formed subsidiary of the Company, in exchange for voting and non-voting
common stock of Holdings (which was subsequently distributed to the Company's
shareholders) and $26.8 million of mortgage bonds. For additional information
concerning Holdings, refer to Note 6 of the Notes to Consolidated Financial
Statements at page 29.
On March 22, 1988, the Company's shareholders approved the conversion of
the Company's form of organization from a Texas corporation to an
unincorporated trust organized under the Texas Real Estate Investment Trust
Act. The conversion was effected by the Company's predecessor entity,
Weingarten Realty, Inc., transferring substantially all of its assets and
liabilities to the newly-formed Company in exchange for common shares of
beneficial interest, $.03 par value ("Common Shares"), of the Company. The
shareholders of the corporation received Common Shares for their shares of
Common Stock of the corporation (on a share-for-share basis), and the Company
continues the business that was previously conducted by the corporation. The
change did not affect the registrant's assets, liabilities, management or
federal income tax status as a REIT.
Location of Properties. Historically, the Company has emphasized
investments in properties located primarily in the Houston area. Since 1987,
the Company has actively acquired properties outside of Houston. Of the
Company's 219 properties which were owned as of December 31, 1997, 93 of its
194 developed properties and 16 of its 25 parcels of unimproved land were
located in the Houston metropolitan area. In addition to these properties,
the Company owned 54 developed properties and 5 parcels of unimproved land
located in other parts of Texas. Because of the Company's investments in the
Houston area, as well as in other parts of Texas, the Houston and Texas
economies affect, to some degree, the business and operations of the Company.
In 1997, the economies in Houston and Texas continued to grow, exceeding
the national average; the economy of the entire southwestern United States,
where the Company has its primary operations, also remained strong relative to
the national average. A deterioration in the Houston or Texas economies could
adversely affect the Company. However, the Company's centers are generally
anchored by grocery and drug stores under long-term leases, and such types of
stores, which deal in basic necessity-type items, tend to be less affected by
economic change.
<PAGE>
Competition. There are other developers and owner-operators engaged in
the development, acquisition and operation of shopping centers and commercial
property who compete with the Company in its trade areas. This results in
competition for both acquisitions of existing income-producing properties and
also for prime development sites. There is also competition for tenants to
occupy the space that the Company and its competitors develop, acquire and
manage.
The Company believes that the principal competitive factors in attracting
tenants in its market areas are location, price, anchor tenants and
maintenance of properties and that the Company's competitive advantages
include the favorable locations of its properties, its ability to provide a
retailer with multiple locations in the Houston area with anchor tenants and
its practice of continuous maintenance and renovation of its properties.
Financial Information. Certain additional financial information
concerning the Company is included in the Company's Consolidated Financial
Statements located on pages 20 through 34 herein.
<PAGE>
ITEM 2. PROPERTIES
At December 31, 1997, the Company's real estate properties consisted of
219 locations in twelve states. A complete listing of these properties,
including the name, location, building area and land area (in square feet),
as applicable, is as follows:
<TABLE>
<CAPTION>
SHOPPING CENTERS
Building
Name and Location Area Land Area
- ----------------------------------------------------- --------- ----------
<S> <C> <C> <C> <C>
HOUSTON AND HARRIS COUNTY, TOTAL. . . . . . . . . . . 7,030,000 28,038,000
Alabama-Shepherd, S. Shepherd at W. Alabama . . . . . 28,000 * 88,000 *
Almeda Road, Almeda at Cleburne . . . . . . . . . . . 34,000 147,000
Bayshore Plaza, Spencer Hwy. at Burke Rd. . . . . . . 36,000 196,000
Bellaire Boulevard, Bellaire at S. Rice . . . . . . . 35,000 137,000
Bellfort, Bellfort at Southbank . . . . . . . . . . . 48,000 167,000
Bellfort Southwest, Bellfort at Gessner . . . . . . . 30,000 89,000
Bellwood, Bellaire at Kirkwood. . . . . . . . . . . . 136,000 655,000
Bingle Square, U.S. Hwy. 290 at Bingle. . . . . . . . 46,000 168,000
Braeswood Square, N. Braeswood at Chimney Rock. . . . 103,000 422,000
Centre at Post Oak, Westheimer at Post Oak Blvd.. . . 184,000 505,000
Copperfield Village, Hwy. 6 at F.M. 529 . . . . . . . 153,000 712,000
Crestview, Bissonnet at Wilcresty . . . . . . . . . . 9,000 35,000
Crosby, F.M. 2100 at Kenning Road (61%) . . . . . . . 36,000 * 124,000 *
Cullen Place, Cullen at Reed. . . . . . . . . . . . . 7,000 30,000
Cullen Plaza, Cullen at Wilmington. . . . . . . . . . 81,000 318,000
Cypress Pointe, F.M. 1960 at Cypress Station. . . . . 191,000 737,000
Cypress Village, Louetta and Grant Road . . . . . . . 19,000 98,000
Del Sol Market Place, Telephone at Monroe . . . . . . 26,000 87,000
Eastpark, Mesa Rd. at Tidwell . . . . . . . . . . . . 140,000 665,000
Edgebrook, Edgebrook at Gulf Fwy. . . . . . . . . . . 78,000 360,000
Fiesta Village, Quitman at Fulton . . . . . . . . . . 30,000 80,000
Fondren Southwest Village, Fondren at W. Bellfort . . 225,000 1,014,000
Fondren/West Airport, Fondren at W. Airport . . . . . 62,000 223,000
45/York Plaza, I-45 at W. Little York . . . . . . . . 210,000 840,000
Glenbrook Square, Telephone Road. . . . . . . . . . . 71,000 320,000
Griggs Road, Griggs at Cullen . . . . . . . . . . . . 85,000 422,000
Harrisburg Plaza, Harrisburg at Wayside . . . . . . . 95,000 334,000
Heights Plaza, 20th St. at Yale . . . . . . . . . . . 72,000 228,000
Humblewood Shopping Plaza, Eastex Fwy. at F.M. 1960 . 180,000 784,000
I-45/Telephone Rd. Center, I-45 at Maxwell Street . . 126,000 819,000
Inwood Village, W. Little York at N. Houston-Rosslyn. 68,000 305,000
Jacinto City, Market at Baca. . . . . . . . . . . . . 24,000 * 67,000 *
Kingwood, Kingwood Dr. at Chesnut Ridge . . . . . . . 155,000 648,000
Landmark, Gessner at Harwin . . . . . . . . . . . . . 56,000 228,000
Lawndale, Lawndale at 75th St.. . . . . . . . . . . . 53,000 177,000
Little York Plaza, Little York at E. Hardy. . . . . . 115,000 486,000
Long Point, Long Point at Wirt (77%). . . . . . . . . 58,000 * 257,000 *
Lyons Avenue, Lyons at Shotwell . . . . . . . . . . . 63,000 179,000
Market at Westchase, Westheimer at Wilcrest . . . . . 84,000 333,000
Miracle Corners, S. Shaver at Southmore . . . . . . . 87,000 386,000
Northbrook, Northwest Fwy. at W. 34th . . . . . . . . 204,000 656,000
North Main Square, Pecore at N. Main. . . . . . . . . 18,000 64,000
</TABLE>
Table continued on next page
<PAGE>
<TABLE>
<CAPTION>
Building
Name and Location Area Land Area
- -------------------------------------------------------------- --------- ----------
<S> <C> <C> <C> <C>
North Oaks, F.M. 1960 at Veterans Memorial . . . . . . . . . . 322,000 1,246,000
North Triangle, I-45 at F.M. 1960. . . . . . . . . . . . . . . 16,000 113,000
Northway, Northwest Fwy. at 34th . . . . . . . . . . . . . . . 212,000 793,000
Northwest Crossing, N.W. Fwy. at Hollister (75%) . . . . . . . 135,000 * 671,000 *
Northwest Park Plaza, F.M. 149 at Champions Forest . . . . . . 32,000 268,000
Oak Forest, W. 43rd at Oak Forest. . . . . . . . . . . . . . . 124,000 541,000
Orchard Green, Gulfton at Renwick. . . . . . . . . . . . . . . 64,000 257,000
Randall's/Cypress Station, F.M. 1960 at I-45 . . . . . . . . . 141,000 618,000
Randall's/El Dorado, El Dorado at Hwy. 3 . . . . . . . . . . . 119,000 429,000
Randall's/Kings Crossing, Kingwood Dr. at Lake Houston Pkwy. . 128,000 624,000
Randall's/Norchester, Grant at Jones . . . . . . . . . . . . . 109,000 475,000
Richmond Square, Richmond Ave. at W. Loop 610. . . . . . . . . 33,000 136,000
River Oaks, East, W. Gray at Woodhead. . . . . . . . . . . . . 65,000 206,000
River Oaks, West, W. Gray at S. Shepherd . . . . . . . . . . . 235,000 609,000
Sheldon Forest, North, I-10 at Sheldon . . . . . . . . . . . . 22,000 131,000
Sheldon Forest, South, I-10 at Sheldon . . . . . . . . . . . . 38,000 * 164,000 *
Shops at Three Corners, S. Main at Old Spanish Trail (70%) . . 183,000 * 803,000 *
Southgate, W. Fuqua at Hiram Clark . . . . . . . . . . . . . . 115,000 533,000
Spring Plaza, Hammerly at Campbell . . . . . . . . . . . . . . 56,000 202,000
Steeplechase, Jones Rd. at F.M. 1960 . . . . . . . . . . . . . 193,000 849,000
Stella Link, North, Stella Link at S. Braeswood (77%). . . . . 40,000 * 156,000 *
Stella Link, South, Stella Link at S. Braeswood. . . . . . . . 15,000 56,000
Studemont, Studewood at E. 14th St . . . . . . . . . . . . . . 28,000 91,000
Ten Blalock Square, I-10 at Blalock. . . . . . . . . . . . . . 97,000 321,000
10/Federal, I-10 at Federal. . . . . . . . . . . . . . . . . . 132,000 474,000
University Plaza, Bay Area At Space Center . . . . . . . . . . 96,000 424,000
The Village Arcade, University at Kirby. . . . . . . . . . . . 192,000 414,000
West Junction, Hwy. 6 at Kieth Harrow Dr. . . . . . . . . . . 67,000 264,000
Westbury Triangle, Chimney Rock at W. Bellfort . . . . . . . . 67,000 257,000
Westchase, Westheimer at Wilcrest. . . . . . . . . . . . . . . 236,000 766,000
Westhill Village, Westheimer at Hillcroft. . . . . . . . . . . 131,000 480,000
Wilcrest Southwest, Wilcrest at Southwest Fwy. . . . . . . . . 26,000 77,000
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . 5,061,000 22,038,000
Coronado, S.W. 34th St. at Wimberly Dr., Amarillo. . . . . . . 49,000 201,000
Grand Plaza, Interstate Hwy 40 at Grand Ave., Amarillo . . . . 157,000 637,000
Puckett Plaza, Bell Road, Amarillo . . . . . . . . . . . . . . 133,000 621,000
Spanish Crossroads, Bell St. at Atkinson St., Amarillo . . . . 72,000 275,000
Wolflin Village, Wolflin Ave. at Georgia St., Amarillo . . . . 191,000 513,000
Southridge Plaza, William Cannon Dr. at S. 1st St., Austin . . 143,000 565,000
Baywood, State Hwy. 60 at Baywood Dr., Bay City. . . . . . . . 40,000 169,000
Calder, Calder at 24th St., Beaumont . . . . . . . . . . . . . 34,000 129,000
North Park Plaza, Eastex Fwy. at Dowlen, Beaumont. . . . . . . 70,000 * 318,000 *
Phelan West, Phelan at 23rd St., Beaumont (67%). . . . . . . . 16,000 * 59,000 *
Southgate, Calder Ave. at 6th St., Beaumont. . . . . . . . . . 34,000 118,000
Westmont, Dowlen at Phelan, Beaumont . . . . . . . . . . . . . 95,000 507,000
Bryan Village, Texas at Pease, Bryan . . . . . . . . . . . . . 29,000 98,000
Parkway Square, Southwest Pkwy at Texas Ave., College Station. 158,000 685,000
</TABLE>
Table continued on next page
<PAGE>
<TABLE>
<CAPTION>
Building
Name and Location Area Land Area
- -------------------------------------------------------------------- --------- ---------
<S> <C> <C> <C> <C>
Montgomery Plaza, Loop 336 West, Conroe. . . . . . . . . . . . . . . 233,000 911,000
River Pointe, I-45 at Loop 336, Conroe . . . . . . . . . . . . . . . 42,000 329,000
Portairs, Ayers St. at Horne Rd., Corpus Christi . . . . . . . . . . 121,000 416,000
Dickinson, I-45 at F.M. 517, Dickinson (72%) . . . . . . . . . . . . 55,000 * 225,000 *
Coronado Hills, Mesa at Balboa, El Paso. . . . . . . . . . . . . . . 128,000 575,000
Southcliff, I-20 and Grandbury Rd., Ft. Worth. . . . . . . . . . . . 116,000 * 568,000 *
Broadway, Broadway at 59th St., Galveston (77%). . . . . . . . . . . 58,000 * 167,000 *
Food King Place, 25th St. at Avenue P, Galveston . . . . . . . . . . 28,000 78,000
Galveston Place, Central City Blvd. at 61st St., Galveston . . . . . 123,000 527,000
Cedar Bayou, Bayou Rd., La Marque. . . . . . . . . . . . . . . . . . 15,000 51,000
Corum South, Gulf Fwy., League City. . . . . . . . . . . . . . . . . 112,000 680,000
Caprock Center, 50th at Boston Ave., Lubbock . . . . . . . . . . . . 375,000 1,255,000
Town & Country, 4th St. at University, Lubbock . . . . . . . . . . . 134,000 339,000
Angelina Village, Hwy. 59 at Loop 287, Lufkin. . . . . . . . . . . . 229,000 1,835,000
Independence Plaza, Town East Blvd., Mesquite. . . . . . . . . . . . 179,000 787,000
McKinney Centre, NEC of US Hwy 380 & U.S Hwy 75, McKinney . . . . . 13,000 69,000
University Park Plaza, University Dr. at E. Austin St., Nacogdoches. 78,000 283,000
Mid-County, Twin Cities Hwy. at Nederland Ave., Nederland. . . . . . 107,000 611,000
Gillham Circle, Gillham Circle at Thomas, Port Arthur. . . . . . . . 33,000 94,000
Village, 9th Ave. at 25th St., Port Arthur (77%) . . . . . . . . . . 39,000 * 185,000 *
Porterwood, Eastex Fwy. at F.M. 1314, Porter . . . . . . . . . . . . 99,000 487,000
Plaza, Ave. H at U.S. Hwy. 90A, Rosenberg. . . . . . . . . . . . . . 41,000 * 135,000 *
Rose-Rich, U.S. Hwy. 90A at Lane Dr., Rosenberg. . . . . . . . . . . 104,000 386,000
Bandera Village, Bandera at Hillcrest, San Antonio . . . . . . . . . 57,000 607,000
Oak Park Village, Nacogdoches at New Braunfels, San Antonio. . . . . 65,000 221,000
Parliament Square, W. Ave. at Blanco, San Antonio. . . . . . . . . . 65,000 260,000
San Pedro Court, San Pedro at Hwy. 281N., San Antonio. . . . . . . . 2,000 18,000
Valley View, West Ave. at Blanco Rd., San Antonio. . . . . . . . . . 89,000 341,000
Market at Town Center, Town Center Blvd., Sugar Land . . . . . . . . 392,000 1,732,000
Williams Trace, Hwy. 6 at Williams Trace, Sugar Land . . . . . . . . 263,000 1,187,000
New Boston Road, New Boston at Summerhill, Texarkana . . . . . . . . 90,000 335,000
Island Market Place, 6th St. at 9th Ave., Texas City . . . . . . . . 27,000 90,000
Mainland, Hwy. 1765 at Hwy. 3, Texas City. . . . . . . . . . . . . . 69,000 279,000
Palmer Plaza, F.M. 1764 at 34th St., Texas City. . . . . . . . . . . 97,000 367,000
Broadway, S. Broadway at W. 9th St., Tyler (77%) . . . . . . . . . . 46,000 * 197,000 *
Crossroads, I-10 at N. Main, Vidor . . . . . . . . . . . . . . . . . 116,000 516,000
LOUISIANA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 1,337,000 5,504,000
Park Terrace, U.S. Hwy. 171 at Parish, DeRidder. . . . . . . . . . . 137,000 520,000
Town & Country Plaza, U.S. Hwy. 190 West, Hammond. . . . . . . . . . 215,000 915,000
Westwood Village, W. Congress at Bertrand, Lafayette . . . . . . . . 141,000 942,000
East Town, 3rd Ave. at 1st St., Lake Charles . . . . . . . . . . . . 33,000 * 117,000 *
14/Park Plaza, Hwy. 14 at General Doolittle, Lake Charles. . . . . . 207,000 654,000
Kmart Plaza, Ryan St., Lake Charles. . . . . . . . . . . . . . . . . 105,000 * 406,000 *
Southgate, Ryan at Eddy, Lake Charles. . . . . . . . . . . . . . . . 171,000 628,000
Danville Plaza, Louisville at 19th, Monroe . . . . . . . . . . . . . 143,000 539,000
Orleans Station, Paris, Robert E. Lee & Chatham, New Orleans . . . . 5,000 31,000
Southgate, 70th at Mansfield, Shreveport . . . . . . . . . . . . . . 73,000 359,000
Westwood, Jewella at Greenwood, Shreveport.. . . . . . . . . . . . . 107,000 393,000
</TABLE>
Table continued on next page
<PAGE>
<TABLE>
<CAPTION>
Building
Name and Location Area Land Area
- ------------------------------------------------------------------- --------- ---------
<S> <C> <C> <C> <C>
ARIZONA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,026,000 4,545,000
University Plaza, Plaza Way at Milton Rd., Flagstaff. . . . . . . . 166,000 918,000
Camelback Village Square, Camelback at 7th Avenue, Phoenix. . . . . 135,000 543,000
Squaw Peak Plaza, 16th Street at Glendale Ave., Phoenix . . . . . . 61,000 220,000
Fountain Plaza, 77th St. at McDowell, Scottsdale. . . . . . . . . . 112,000 460,000
Rancho Encanto, 35th Avenue and Greenway Rd., Phoenix . . . . . . . 71,000 259,000
Broadway Marketplace, Broadway at Rural, Tempe. . . . . . . . . . . 86,000 347,000
Fry's Valley Plaza, S. McClintock at E. Southern, Tempe . . . . . . 145,000 570,000
Pueblo Anozira, McClintock Dr. at Guadalupe Rd., Tempe. . . . . . . 152,000 769,000
Desert Square Shopping Center, Golf Links at Kolb, Tucson . . . . . 98,000 459,000
NEVADA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 730,000 2,722,000
Mission Center, Flamingo Rd. at Maryland Pkwy, Las Vegas. . . . . . 71,000 254,000
Paradise Marketplace, Flamingo Rd. at Sandhill, Las Vegas . . . . . 149,000 536,000
Rainbow Plaza, Rainbow Blvd. at Charleston Blvd., Las Vegas . . . . 280,000 1,063,000
Rancho Towne & Country, Rancho Dr. at Charleston Blvd., Las Vegas . 87,000 350,000
Tropicana Marketplace, Tropicana at Jones Blvd., Las Vegas. . . . . 143,000 519,000
NEW MEXICO, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . 700,000 3,177,000
Eastdale, Candelaria Rd. at Eubank Blvd., Albuquerque . . . . . . . 111,000 601,000
North Towne Plaza, Academy Rd. @ Wyoming Blvd., Albuquerque . . . . 103,000 607,000
Valle del Sol, Isleta Blvd. at Rio Bravo, Albuquerque . . . . . . . 106,000 475,000
Wyoming Mall, Academy Rd. at Northeastern, Albuquerque. . . . . . . 323,000 1,309,000
DeVargas, N. Guadalupe at Paseo de Peralta, Santa Fe (23%). . . . . 57,000 * 185,000 *
OKLAHOMA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 687,000 3,173,000
Bryant Square, Bryant Ave. at 2nd St., Edmond . . . . . . . . . . . 268,000 1,259,000
Market Boulevard, E. Reno Ave. at N. Douglas Ave., Midwest City . . 36,000 142,000
Town & Country, Reno Ave at North Air Depot, Midwest City . . . . . 137,000 540,000
Windsor Hills Center, Meridian at Windsor Place, Oklahoma City. . . 246,000 1,232,000
ARKANSAS, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 534,000 2,054,000
Evelyn Hills, College Ave. at Abshier, Fayetteville . . . . . . . . 154,000 750,000
Broadway Plaza, Broadway at W. Roosevelt, Little Rock . . . . . . . 43,000 148,000
Geyer Springs, Geyer Springs at Baseline, Little Rock . . . . . . . 153,000 415,000
Markham Square, W. Markham at John Barrow, Little Rock. . . . . . . 134,000 535,000
Westgate, Cantrell at Bryant, Little Rock . . . . . . . . . . . . . 50,000 206,000
KANSAS, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 466,000 2,231,000
West State Plaza, State Ave. at 78th St., Kansas City . . . . . . . 94,000 401,000
Westbrooke Village, Quivira Road at 75th St., Shawnee . . . . . . . 237,000 1,269,000
Shawnee Village, Shawnee Mission Pkwy. at Quivera Rd., Shawnee. . . 135,000 561,000
COLORADO, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 211,000 867,000
Carefree, Academy Blvd. at N. Carefree Circle, Colorado Springs . . 127,000 460,000
Academy Place, Academy Blvd. at Union Blvd., Colorado Springs . . . 84,000 407,000
MISSOURI, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . 135,000 448,000
PineTree Plaza, U.S. Hwy. 150 at Hwy. 291, Lee's Summit . . . . . . 135,000 448,000
</TABLE>
Table continued on next page
<PAGE>
<TABLE>
<CAPTION>
Building
Name and Location Area Land Area
- -------------------------------------------------------------- --------- ---------
<S> <C> <C> <C> <C>
MAINE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . 124,000 482,000
The Promenade, Essex at Summit, Lewiston . . . . . . . . . . . 124,000 * 482,000
TENNESSEE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . 20,000 84,000
Highland Square, Summer at Highland, Memphis . . . . . . . . . 20,000 84,000
Building
INDUSTRIAL Area Land Area
--------- ---------
HOUSTON AND HARRIS COUNTY, TOTAL. . . . . . . . . . . . . . . 3,723,000 9,061,000
Brookhollow Business Center, Dacoma at Directors Row. . . . . 133,000 405,000
Cannon/So. Loop Business Park, Cannon Street (75%). . . . . . 221,000 * 362,000 *
Central Park North, W. Hardy Rd. at Kendrick Dr.. . . . . . . 155,000 465,000
Central Park Northwest VI, Central Pkwy. at Dacoma. . . . . . 175,000 518,000
Central Park Northwest VII, Central Pkwy. at Dacoma . . . . . 104,000 283,000
Jester Plaza, West T.C. Jester. . . . . . . . . . . . . . . . 101,000 244,000
Kempwood Industrial, Kempwood Dr. at Blankenship Dr.. . . . . 320,000 778,000
Lathrop Warehouse, Lathrop St. at Larimer St. . . . . . . . . 252,000 436,000
Little York Mini-Storage, West Little York. . . . . . . . . . 32,000 * 124,000 *
Navigation Business Park, Navigation At N. York . . . . . . . 238,000 555,000
Northway Park II, Loop 610 East at Homestead. . . . . . . . . 303,000 745,000
Park Southwest, Stancliff at Brooklet . . . . . . . . . . . . 52,000 159,000
Railwood Industrial Park, Mesa at U.S. 90 . . . . . . . . . . 805,000 2,070,000
South Loop Business Park, S. Loop at Long Dr. . . . . . . . . 46,000 * 103,000 *
Southwest Park II, Rockley Road . . . . . . . . . . . . . . . 68,000 216,000
Stonecrest Business Center, Wilcrest at Fallstone . . . . . . 111,000 308,000
West-10 Business Center, Wirt Rd. at I-10 . . . . . . . . . . 141,000 330,000
West-10 Business Center II, Wirt Rd. at I-10. . . . . . . . . 83,000 150,000
West Loop Commerce Center, W. Loop N. at I-10 . . . . . . . . 34,000 91,000
610 and 11th St. Warehouse, Loop 610 at 11th St.. . . . . . . 349,000 719,000
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL . . . . . . . . 260,000 751,000
Corporate Center I & II, Putnam Dr. at Research Blvd., Austin 117,000 326,000
River Pointe Mini-Storage, I-45 at Hwy. 336, Conroe . . . . . 32,000 * 97,000 *
Nasa One Business Center, Nasa Road One at Hwy. 3, Webster. . 111,000 328,000
MULTI-FAMILY RESIDENTIAL
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL . . . . . . . . 37,000 95,000
Summer Place Apartments, Hillcrest at Quill Dr., San Antonio. 37,000 * 95,000 *
OFFICE BUILDING
HOUSTON & HARRIS COUNTY, TOTAL. . . . . . . . . . . . . . . . 121,000 171,000
Citadel Plaza, N. Loop 610 at Citadel Plaza Dr. . . . . . . . 121,000 171,000
</TABLE>
Table continued on next page
<PAGE>
<TABLE>
<CAPTION>
Building
Name and Location Area Land Area
- ------------------------------------------------------ -------- ---------
<S> <C> <C> <C>
UNIMPROVED LAND
HOUSTON & HARRIS COUNTY, TOTAL . . . . . . . . . . . . . . . . . 4,970,000
Bissonnet at Wilcrest. . . . . . . . . . . . . . . . . . . . . . 773,000
Citadel Plaza at 610 N. Loop . . . . . . . . . . . . . . . . . . 137,000
East Orem. . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000
Kirkwood at Dashwood Dr. . . . . . . . . . . . . . . . . . . . . 322,000
Lockwood at Navigation . . . . . . . . . . . . . . . . . . . . . 163,000
Louetta at Grant Rd. . . . . . . . . . . . . . . . . . . . . . . 37,000
Mesa Rd. at Tidwell. . . . . . . . . . . . . . . . . . . . . . . 901,000
Mesa Rd. at Spikewood. . . . . . . . . . . . . . . . . . . . . . 1,374,000
Mowery at Cullen . . . . . . . . . . . . . . . . . . . . . . . . 118,000
Northwest Fwy. at Gessner. . . . . . . . . . . . . . . . . . . . 484,000
Redman at W. Denham. . . . . . . . . . . . . . . . . . . . . . . 17,000
Renwick at Gulfton . . . . . . . . . . . . . . . . . . . . . . . 17,000
Sheldon at I-10. . . . . . . . . . . . . . . . . . . . . . . . . 19,000
W. Little York at I-45 . . . . . . . . . . . . . . . . . . . . . 322,000
W. Little York at N. Houston-Rosslyn.. . . . . . . . . . . . . . 19,000
W. Loop N. at I-10 . . . . . . . . . . . . . . . . . . . . . . . 145,000
TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL. . . . . . . . . . 1,200,000
US Hwy 380 (University Drive) and US Hwy 75, McKinney. . . . . . 265,000
River Pointe Dr. at I-45, Conroe . . . . . . . . . . . . . . . . 186,000
Hillcrest, Sunshine at Quill, San Antonio. . . . . . . . . . . . 171,000
Hwy. 3 at Hwy. 1765, Texas City. . . . . . . . . . . . . . . . . 184,000
Hwy 377 and Bursey Road, Watauga . . . . . . . . . . . . . . . . 394,000
LOUISIANA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . 1,284,000
U.S. Hwy. 171 at Parish, DeRidder. . . . . . . . . . . . . . . . 462,000
Woodland Hwy., Plaquemines Parish (5%) . . . . . . . . . . . . . 822,000 *
ARIZONA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . 157,000
75th Avenue ar W Bell Rd, Glendale . . . . . . . . . . . . . . . 157,000
ILLINOIS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . 503,000
S.B.I. Rt. 159 at Matilda Rd., Fairview Heights (99%). . . . . . 503,000 *
</TABLE>
Table continued on next page
<PAGE>
<TABLE>
<CAPTION>
Building
Area Land Area
---------- ----------
<S> <C> <C>
ALL PROPERTIES-BY LOCATION
GRAND TOTAL . . . . . . . . . . . . . . . 22,202,000 93,555,000
Houston & Harris County . . . . . . . . . 10,874,000 42,240,000
Texas (excluding Houston & Harris County) 5,358,000 24,084,000
Louisiana . . . . . . . . . . . . . . . . 1,337,000 6,788,000
Arizona . . . . . . . . . . . . . . . . . 1,026,000 4,702,000
Nevada. . . . . . . . . . . . . . . . . . 730,000 2,722,000
New Mexico. . . . . . . . . . . . . . . . 700,000 3,177,000
Oklahoma. . . . . . . . . . . . . . . . . 687,000 3,173,000
Arkansas. . . . . . . . . . . . . . . . . 534,000 2,054,000
Kansas. . . . . . . . . . . . . . . . . . 466,000 2,231,000
Colorado. . . . . . . . . . . . . . . . . 211,000 867,000
Missouri. . . . . . . . . . . . . . . . . 135,000 448,000
Maine . . . . . . . . . . . . . . . . . . 124,000 482,000
Tennessee . . . . . . . . . . . . . . . . 20,000 84,000
Illinois. . . . . . . . . . . . . . . . . 503,000
ALL PROPERTIES-BY CLASSIFICATION
GRAND TOTAL . . . . . . . . . . . . . . . 22,202,000 93,555,000
Shopping Centers. . . . . . . . . . . . . 18,061,000 75,363,000
Industrial . . . . . . . . . . . . . . . 3,983,000 9,812,000
Office Building . . . . . . . . . . . . . 121,000 171,000
Multi-Family Residential. . . . . . . . . 37,000 95,000
Unimproved Land . . . . . . . . . . . . . 8,114,000
</TABLE>
Note: Total square footage includes 6,700,000 square feet of land leased
and 170,000 square feet of building leased from others.
* Denotes partial ownership. The Company's interest is 50% except
where noted. The square feet figures represent the Company's
proportionate ownership of the entire property.
<PAGE>
General. In 1997, no single property accounted for more than 3.9% of the
Company's total assets or 3.4% of gross revenues. Four properties, in the
aggregate, represented approximately 11.4% of the Company's gross revenues for
the year ended December 31, 1997; otherwise, none of the remaining properties
accounted for more than 2.0% of the Company's gross revenues during the same
period. The occupancy rate for all of the Company's improved properties as of
December 31, 1997 was 92.0%.
Substantially all of the Company's properties are owned directly by the
Company (subject in certain cases to mortgages), although the Company's
interests in certain of its properties are held indirectly through its
interests in joint ventures or under long-term leases. In the opinion of
management of the Company, its properties are well maintained and in good
repair, suitable for their intended uses, and adequately covered by insurance.
Shopping Centers. As of December 31, 1997, the Company owned, either
directly or through its interests in joint ventures, 169 shopping centers with
approximately 18.1 million square feet of building area. The shopping centers
were located predominantly in Texas with other locations in Louisiana,
Oklahoma, Arkansas, Arizona, New Mexico, Maine, Tennessee, Nevada, Kansas,
Missouri and Colorado.
The Company's shopping centers are primarily community shopping centers
which range in size from 100,000 to 400,000 square feet, as distinguished from
small strip centers which generally contain 5,000 to 25,000 square feet and
from large regional enclosed malls which generally contain over 500,000 square
feet. Most of the centers do not have climatized common areas but are
designed to allow retail customers to park their automobiles in close
proximity to any retailer in the center. The Company's centers are
customarily constructed of masonry, steel and glass and all have lighted,
paved parking areas which are typically landscaped with berms, trees and
shrubs. They are generally located at major intersections in close proximity
to neighborhoods which have existing populations sufficient to support retail
activities of the types conducted in the Company's centers.
The Company has approximately 3,300 separate leases with 2,500 different
tenants in its portfolio, including national and regional supermarket chains,
other nationally or regionally known stores (including drug stores, discount
department stores, junior department stores and catalog stores) and a great
variety of other regional and local retailers. The large number of locations
offered by the Company and the types of traditional anchor tenants help
attract prospective new tenants. Some of the national and regional
supermarket chains which are tenants in the Company's centers include
Albertson's, Fiesta, Smith's, Fleming Foods, H.E.B., Kroger Company, Randall's
Food Markets, Fry's Food Stores and Super Value Holdings. In addition to
these supermarket chains, the Company's nationally and regionally known retail
store tenants include Eckerd, Walgreen and Osco drugstores; Kmart discount
stores; Bealls, Palais Royal and Weiner's junior department stores;
Marshall's, Office Depot, 50-Off, Office Max, Babies 'R' Us, Ross and T.J.
Maxx off-price specialty stores; Luby's, Piccadilly and Furr's cafeterias;
Academy sporting goods; Service Merchandise catalog stores; FAO Schwarz toy
store; Cost Plus Imports; Linens 'N Things; Barnes & Noble bookstore; Home
Depot; and the following restaurant chains: Arby's, Burger King, Champ's,
Church's Fried Chicken, Dairy Queen, Domino's, Jack-in-the-Box, CiCi Pizza,
Long John Silver's, McDonald's, Olive Garden, Outback Steakhouse, Pizza Hut,
Shoney's, Steak & Ale, Taco Bell and Whataburger. The Company also leases
space in 3,000 to 10,000 square foot areas to national chains such as the
Limited Store, The Gap, One Price Stores, Tempo, Eddie Bauer and Radio Shack.
The Company's shopping center leases have lease terms generally ranging
from three to five years for tenant space under 5,000 square feet and from 10
to 35 years for tenant space over 10,000 square feet. Leases with primary
lease terms in excess of 10 years, generally for anchor and out-parcels,
frequently contain renewal options which allow the tenant to extend the term
of the lease for one or more additional periods, each such period generally
being of a shorter duration than the primary lease term. The rental rates
paid during a renewal period are generally based upon the rental rate for the
primary term, sometimes adjusted for inflation or for the amount of the
tenant's sales during the primary term.
Most of the Company's leases provide for the monthly payment in advance
of fixed minimum rentals, the tenants' pro rata share of ad valorem taxes,
insurance (including fire and extended coverage, rent insurance and liability
insurance) and common area maintenance for the center (based on estimates of
the costs for such items) and for the payment of additional rentals based on a
percentage of the tenants' sales ("percentage rentals"). Utilities are
generally paid directly by tenants except where common metering exists with
respect to a center, in which case the Company makes the payments for the
utilities and is reimbursed by the tenants on a monthly basis. Generally, the
Company's leases prohibit the tenant from assigning or subletting its space
and require the tenant to use its space for the purpose designated in its
lease agreement and to operate its business on a continuous basis. Certain of
the lease agreements
with major tenants contain modifications of these basic provisions in view of
the financial condition, stability or desirability of such tenants. Where a
tenant is granted the right to assign its space, the lease agreement generally
provides that the original lessee will remain liable for the payment of the
lease obligations under such lease agreement.
During 1997, the Company added approximately 1.6 million square feet to
its portfolio of shopping center properties through the acquisition of
properties and another .2 million square feet of space through developmentThe
Company added two centers in the Arizona market totaling 169,000 square feet
and purchased its fourth property in the Kansas City area, a 94,000 square
foot shopping center. The Company purchased a 280,000 square foot shopping
center anchored by Home Depot in Las Vegas, its fifth property in this city
and added an 84,000 square foot center in Colorado Springs, its second center
in that market. The Company purchased a 126,000 square foot shopping center
in Houston and added an additional 336,000 square feet in other Texas markets.
Lastly, the Company purchased its joint venture partner's 85% interest in four
shopping centers, adding 478,000 square feet. These centers are located in
Mesquite and El Paso, Texas, Albuquerque, New Mexico and Tempe, Arizona.
Industrial Properties. The Company currently owns a total of 23
industrial projects. All of these projects are located in the greater Houston
area, except for a 117,000 square foot office/service center located in
Austin, Texas, which was purchased during 1997. Two additional properties
totaling 193,000 square feet located in Houston were also purchased during
1997. The industrial portfolio has a total of 4.0 million square feet of
building area situated on 9.8 million square feet of land. These figures
include the Company's interests in four joint ventures. Major tenants of the
Company's industrial properties include Advo (a leading direct mail
advertising company), Pepsico's PFS division, Stone Container Corporation and
Iron Mountain Records Storage.
During 1997, the Company completed the development of a 110,000 square
foot build-to-suit office/distribution on a tract of the Company's
undeveloped land. The Company also began construction on a 162,000 square
foot speculative bulk warehouse facility on a tract of undeveloped land
located in the Company's Railwood Industrial Park, a master-planned industrial
park in northeast Houston.
Office Building. The Company owns a seven-story, 121,000 square foot
masonry office building with a detached, covered, three-level parking garage
situated on 171,000 square feet of land fronting on North Loop 610 West in
Houston. The building serves as the Company's headquarters. Other than the
Company, the major tenant of the building is Nations Bank, which currently
occupies 12% of the office space.
Multi-family Residential Properties. At December 31, 1997, the Company
owned, through a joint venture interest, one apartment project located in San
Antonio, Texas. The Company's percentage ownership represents approximately
79 units of the project's aggregate 159 units. This project is a garden-type
project complemented by landscaping, recreational areas and adequate parking.
This project is managed by our joint venture partner, who is an experienced
apartment operator. Subsequent to year-end, the Company announced the
development of a 260-unit luxury apartment complex on land within a multi-use
master-planned project developed by the Company in a suburb north of Houston.
An unrelated Houston-based developer will build and lease the property on the
Company's behalf. Construction is scheduled for completion in the spring of
1999.
Unimproved Land. The Company owns, directly or through its interest in a
joint venture, 25 parcels of unimproved land aggregating approximately 8.1
million square feet of land area located in Texas, Arizona, Illinois and
Louisiana. These properties include approximately 4.0 million square feet of
land adjacent to certain of the Company's existing developed properties, which
may be used for expansion of these developments, as well as approximately 4.0
million square feet of land, which may be used for new development. Almost
all of these unimproved properties are served by roads and utilities and are
ready for development. Most of these parcels are suitable for development as
shopping centers or industrial projects, and the Company intends to emphasize
the development of these parcels for such purpose.
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary
routine litigation incidental to its business, to which the Company is a party
or to which any of its properties are subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
None.
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to the
executive officers of the Company as of February 25, 1998. All executive
officers of the Company are elected annually by the Board of Trust Managers
and serve until the successors are elected and qualified.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Stanford Alexander 69 Chairman/Chief Executive Officer
Martin Debrovner 61 Vice Chairman
Andrew M. Alexander 41 President
Joseph W. Robertson, Jr. 50 Executive Vice President/
Chief Financial Officer
Stephen C. Richter 43 Senior Vice President/Financial
Administration and Treasurer
</TABLE>
Mr. S. Alexander is the Company's Chairman and its Chief Executive
Officer. He has been employed by the Company since 1955 and has served in his
present capacity since January 1, 1993. Prior to becoming Chairman, Mr.
Alexander served as President and Chief Executive Officer of the Company since
1962. Mr. Alexander is President, Chief Executive Officer and a Trust Manager
of Weingarten Properties Trust and a member of the Houston Regional Advisory
Board of Chase Bank of Texas, National Association, Houston, Texas.
Mr. Debrovner became Vice Chairman of the Company on February 25, 1997.
Prior to assuming such position Mr. Debrovner served as President and Chief
Operating Officer since January 1, 1993. Mr. Debrovner served as President of
Weingarten Realty Management Company (the "Management Company") since the
Company's reorganization in December 1984. Prior to such time, Mr. Debrovner
was an employee of the Company for 17 years, holding the positions of Senior
Vice President from 1980 until March 1984 and Executive Vice President until
December 1984. As Executive Vice President, Mr. Debrovner was generally
responsible for the Company's operations. Mr. Debrovner is also a Trust
Manager of Weingarten Properties Trust.
Mr. A. Alexander became President of the Company on February 25, 1997.
Prior to his present position, Mr. Alexander was Executive Vice
President/Asset Management of the Company and President of the Management
Company. Prior to such time, Mr. Alexander was Senior Vice President/Asset
Management of the Management Company. He also served as Vice President of the
Management Company and, prior to the Company's reorganization in December
1984, was Vice President and an employee of the Company since 1978. Mr.
Alexander has been primarily involved with leasing operations at both the
Company and the Management Company. Mr. Alexander is also a Trust Manager of
Weingarten Properties Trust.
Mr. Robertson became Executive Vice President of the Company and its
Chief Financial Officer on January 1, 1993. Prior to becoming Executive Vice
President, Mr. Robertson served as Senior Vice President and Chief Financial
Officer since 1980. He has been with the Company since 1971. Mr. Robertson
is also a Trust Manager of Weingarten Properties Trust.
Mr. Richter became Senior Vice President/Financial Administration and
Treasurer on January 1, 1997. Prior to his present position, Mr. Richter
served as Vice President/Financial Administration and Treasurer of the Company
since January 1, 1993. For the five years prior to that time, he served as
Vice President/Financial Administration and Treasurer of the Management
Company.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON SHARES OF BENEFICIAL INTEREST AND
RELATED SHAREHOLDER MATTERS
The Company's Common Shares are listed and traded on the New York Stock
Exchange under the symbol "WRI". The number of holders of record of the
Company's Common Shares as of February 25, 1998 was 3,221. The high and low
sale prices per share of the Company's Common Shares, as reported on the New
York Stock Exchange composite tape, and dividends per share paid for the
fiscal quarters indicated were as follows:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------ ------- ---------
<S> <C> <C> <C>
1997:
Fourth $ 45 $ 38 7/8 $ 0.64
Third 44 1/8 39 7/16 0.64
Second 45 5/8 41 3/8 0.64
First 44 3/4 40 0.64
1996:
Fourth $ 40 3/4 $ 36 $ 0.62
Third. 40 1/2 37 3/8 0.62
Second 38 7/8 34 1/4 0.62
First. 38 7/8 35 5/8 0.62
</TABLE>
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected consolidated financial data with
respect to the Company and should be read in conjunction with "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations," the Consolidated Financial Statements and accompanying Notes in
"Item 8. Financial Statements and Supplementary Data" and the financial
schedules included elsewhere in this Form 10-K.
<TABLE>
<CAPTION>
(Amounts in thousands, except per share amounts)
Years Ended December 31,
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Revenues (primarily real estate
rentals) $ 174,512 $151,123 $134,197 $120,793 $103,282
----------- --------- --------- --------- ---------
Expenses:
Depreciation and amortization . . . . 37,976 33,769 30,060 26,842 23,382
Interest. . . . . . . . . . . . . . . 30,009 21,975 16,707 10,694 10,046
Other . . . . . . . . . . . . . . . . 54,888 47,004 42,614 39,235 35,236
Total . . . . . . . . . . . . . . . . 122,873 102,748 89,381 76,771 68,664
----------- --------- --------- --------- ---------
Income from operations. . . . . . . . 51,639 48,375 44,816 44,022 34,618
Gain (loss) on sales of property and
securities. . . . . . . . . . . . . 3,327 5,563 (14) (234) 1,631
Net Income. . . . . . . . . . . . . . $ 54,966 $ 53,938 $ 44,802 $ 43,788 $ 36,249
=========== ========= ========= ========= =========
Weighted average number of common
shares outstanding. . . . . . . . . 26,638 26,555 26,464 26,190 24,211
Net income per common share . . . . . $ 2.06 $ 2.03 $ 1.69 $ 1.67 $ 1.50
Cash dividends per common share . . . $ 2.56 $ 2.48 $ 2.40 $ 2.28 $ 2.16
Property (at cost). . . . . . . . . . $1,118,758 $970,418 $849,894 $735,134 $634,814
Total assets. . . . . . . . . . . . . $ 946,793 $831,097 $734,824 $682,037 $602,042
Debt. . . . . . . . . . . . . . . . . $ 507,366 $389,225 $289,339 $229,597 $147,652
Other Data:
Funds from Operations (1)
Net income. . . . . . . . . . . . . . $ 54,966 $ 53,938 $ 44,802 $ 43,788 $ 36,249
Depreciation and amortization (2) . . 37,544 33,414 29,813 26,842 23,382
(Gain) loss on sales of property
and securities (3,327) (5,563) 14 234 (1,631)
Total . . . . . . . . . . . . . . . . $ 89,183 $ 81,789 $ 74,629 $ 70,864 $ 58,000
=========== ========= ========= ========= =========
Cash Flows from Operations. . . . . . $ 89,902 $ 76,299 $ 72,498 $ 64,305 $ 56,737
<FN>
(1) Funds from operations does not represent cash flows from operations as defined by
generally accepted accounting principles and should not be considered as an alternative
to net income as an indicator of the Company's operating performance or to cash flows
as a measure of liquidity.
(2) In accordance with the NAREIT definition of funds from operations adopted during the
year ended December 31, 1995, debt cost amortization is not included beginning with that
year.
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto and the comparative summary of selected
financial data appearing elsewhere in this report. Historical results and
trends which might appear should not be taken as indicative of future
operations.
Weingarten Realty Investors owned and operated 169 shopping centers, 23
industrial properties, one multi-family residential project and one office
building at December 31, 1997. Of the Company's 194 developed properties, 147
are located in Texas (including 93 in Houston and Harris County). The
Company's remaining properties are located in Louisiana (11), Arizona (9),
Nevada (5), New Mexico (5), Oklahoma (4), Arkansas (5), Kansas (3), Colorado
(2), Missouri (1), Tennessee (1) and Maine (1). The Company has nearly 3,300
leases and 2,500 different tenants. Leases for the Company's properties range
from less than a year for smaller spaces to over 25 years for larger tenants;
leases generally include minimum lease payments and contingent rentals for
payment of taxes, insurance and maintenance and for an amount based on a
percentage of the tenants' sales. The majority of the Company's anchor
tenants are supermarkets, drugstores and other retailers which generally sell
basic necessity-type items.
CAPITAL RESOURCES AND LIQUIDITY
The Company anticipates that cash flows from operating activities will
continue to provide adequate capital for all dividend payments in accordance
with REIT requirements and that cash on hand, borrowings under its existing
credit facility, issuance of unsecured debt and the use of project financing,
as well as other debt and equity alternatives, will provide the necessary
capital to achieve growth. Cash flow from operating activities as reported in
the Statements of Consolidated Cash Flows increased to $89.9 million for 1997
from $76.3 million for 1996 and $72.5 million for 1995.
Cash dividends increased to $68.2 million in 1997, compared to $65.9 million
in 1996 and $63.5 million in 1995. The Company satisfied its REIT requirement
of distributing at least 95% of ordinary taxable income for each of the three
years ended December 31, 1997, and, accordingly, federal income taxes were not
provided in these years. The Company's dividend payout ratio for 1997, 1996
and 1995 approximated 76.4%, 80.5% and 85.1%, respectively, based on funds
from operations for the applicable year.
The Company continued to expand its portfolio of income-producing properties
in 1997. This growth resulted primarily from the acquisition of properties,
both shopping centers and industrial properties. During the year, the Company
purchased eight shopping centers, three industrial projects, and its joint
venture partner's interest in four other shopping centers. These acquisitions
added 1.9 million square feet to the Company's portfolio at a combined cost of
$111.0 million. The Company expanded its presence in many of its newer
markets, with purchases in Dallas/Fort Worth, Phoenix, Tucson, Las Vegas,
Kansas City and Colorado Springs. The Company completed the development of a
.1 million square foot build-to-suit office/distribution facility on a tract
of the Company's undeveloped land and also substantially completed development
of two shopping centers which added less than .1 million square feet.
Additionally, the Company has an ongoing program for maintaining and
renovating its existing portfolio of properties. Capitalized expenditures for
acquisitions, new development and additions to the existing portfolio were, in
millions, $152.6, $131.6 and $114.7 during 1997, 1996 and 1995, respectively.
All of the acquisitions and new development during 1997 were initially
financed under the Company's revolving credit facility. Capital expenditures
in 1998 are expected to equal, if not exceed, the total for 1997.
Total debt outstanding increased to $507.4 million at December 31, 1997 from
$389.2 million at December 31, 1996, primarily to fund acquisitions and new
development. The Company's ratio of debt to total market capitalization was
30% at December 31, 1997, as compared to 27% at year-end 1996.
During the year, the Company issued an additional $97 million in unsecured
Medium Term Notes ("MTNs"). These MTNs were issued with an average life of
8.7 years at an average interest rate of 6.8%, and the proceeds were used to
pay down balances outstanding under the Company's revolving credit facilities.
The Company also completed several financing transactions subsequent to
year-end. First, the Company entered into a forward Treasury lock in January
of 1998, whereby the Company locked a ten-year Treasury rate of 5.49% until
August of 1998 for a notional amount of $35 million. In February of 1998, the
Company issued $75 million of 7.44% cumulative preferred shares with a
liquidation preference of $25 per share in an underwritten public offering.
The shares are callable at the Company's option any time after March 31, 2003
and have no stated maturity. The proceeds of the offering were used to pay
down amounts outstanding under the Company's revolving credit facility and to
retire $35 million of 9.11% secured notes
<PAGE>
payable to an insurance company. The early extinguishment of these notes that
were scheduled to mature in August of 2001 will result in an extraordinary
loss of $1.2 million in 1998. Continued growth through acquisitions and new
development will eventually necessitate the issuance of additional equity
securities; however, the Company's current capital structure should allow the
issuance of additional debt before this is required. In the interim, the
Company will continue to closely monitor both the debt and equity markets and
carefully consider its available alternatives, including both public and
private placements.
During 1996, the Company's $200 million unsecured revolving credit facility
was amended to improve the pricing and, effectively, extend the term of the
commitment. In addition, the Company executed an agreement with a bank for an
unsecured and uncommitted overnight credit facility totaling $20 million to be
used for cash management purposes. The Company will maintain adequate funds
available under the $200 million revolving credit facility at all times to
cover the outstanding balance under the $20 million facility.
At December 31, 1997, the Company had approximately $91 million of funds
available under the revolving credit facilities. In the third quarter of
1996, the Company filed a $250 million shelf registration statement with the
Securities and Exchange Commission (which includes $23.5 million from the
Company's prior shelf registration), which allows for the issuance of debt,
equity securities or warrants. At December 31, 1997, amounts available under
the shelf registration totaled $134 million, however this amount was reduced
by $75 million due to the issuance of perpetual preferred shares subsequent to
year-end. The Company expects to continue to issue debt or equity under its
shelf registration and to continually seek and evaluate other sources of
capital.
Subsequent to year-end, the Company sold its investment in U.S. government
agency guaranteed pass-through certificates for $12.2 million, resulting in a
gain of less than $.1 million. The proceeds from the sale were used primarily
to retire overnight repurchase agreements which were collateralized by these
marketable debt securities.
FUNDS FROM OPERATIONS
Funds from operations is an alternate measure of the performance of an
equity REIT since such measure does not recognize depreciation and
amortization of real estate assets as operating expenses. Management
believes that reductions for these charges are not meaningful in evaluating
income-producing real estate, which historically has not depreciated.
The National Association of Real Estate Investment Trusts defines funds
from operations as net income plus depreciation and amortization of real
estate assets, less gains and losses on sales of properties. Funds from
operations does not represent cash flows from operations as defined by
generally accepted accounting principles and should not be considered as an
alternative to net income as an indicator of the Company's operating
performance or to cash flows as a measure of liquidity.
Funds from operations increased to $89.2 million in 1997, as compared to $81.8
million in 1996 and $74.6 million in 1995. These increases relate primarily
to the impact of the Company's acquisitions and new developments and, to a
lesser degree, the activity at its existing properties. For further
information on changes between years, see "Results of Operations" below.
RESULTS OF OPERATIONS
Rental revenues increased 16.3% or $23.7 million from $145.3 million in 1996
to $169.0 million in 1997 and by 15.9% or $19.9 million from $125.4 million in
1995. These increases are primarily the result of the Company's acquisition
and new development programs. Occupancy of the Company's shopping centers and
total portfolio decreased to 92% at December 31, 1997 from 93% at the end of
1996. The Company's industrial portfolio occupancy decreased from 94% at
December 31, 1996 to 93% at the end of 1997. The Company completed 582
renewals or leases comprising 2.0 million square feet of retail space at an
average rental rate increase of 8.1%. Net of capital costs for tenant
improvements, the increase averaged 3.9%.
Interest income totaled $2.5 million in 1997, $3.1 million in 1996 and $5.3
million in 1995. This decrease in income is primarily the result of the
Company selling $31.8 million of its investment in marketable debt securities
during the fourth quarter of 1995. The sale resulted in a gain of $.1
million. Interest income recognized on the marketable debt securities sold by
the Company subsequent to year-end 1997 totaled $.8 million during 1997.
Equity in earnings of real estate joint ventures and partnerships totaled $1.0
million in 1997, $1.2 million in 1996 and $1.5 million in 1995. The decreases
in 1997 and 1996 are due to the sale in the third quarter of 1996 of the
Company's 26% interest in an apartment complex accounted for under the equity
method. This sale resulted in a gain of $4.2 million. The Company has
accounted for its 15% interest in a joint venture, which owned four shopping
centers, under the equity method. On December 31, 1997, the Company purchased
its joint venture partner's 85% interest and, accordingly, has consolidated
the operating results of these four centers since the date of acquisition.
Income recognized in 1997 related to this joint venture totaled $.6 million.
Direct costs and expenses of operating the Company's properties (i.e.,
operating and ad valorem tax expenses) increased to $49.2 million in 1997 from
$41.9 million in 1996 and $37.7 million in 1995. These increases are
primarily due to property acquired and developed during these periods.
Overall, direct operating costs and expenses as a percentage of rental
revenues were 30% in 1995 and 29% in 1996 and 1997. Depreciation and
amortization have increased to $38.0 million in 1997 from $33.8 million in
1996 and $30.1 million in 1995, also as a result of the properties acquired
and developed during these periods.
Gross interest costs, before capitalization of interest to development
projects, increased by $7.5 million from $23.3 million in 1996 to $30.8
million in 1997. This increase in interest cost was due mainly to the
increase in the average debt outstanding from $314.4 million for 1996 to
$422.9 million for 1997. The weighted-average interest rate decreased
slightly from 7.36% in 1996 to 7.27% in 1997. Interest expense, net of
amounts capitalized, increased $8.0 million from 1996. The amount of interest
capitalized decreased to $.8 million in 1997 from $1.3 million in 1996 due to
a decrease in the amount of development activity during the year. Included in
interest expense during 1997 was $.7 million related to repurchase agreements
which were collateralized by the Company's investment in marketable debt
securities which were sold subsequent to year-end. Comparing 1996 to 1995,
gross interest costs increased from $19.6 million in 1995 to $23.3 million in
1996. This was due to an increase in the average debt outstanding from $261.3
million in 1995 to $314.4 million in 1996. The weighted-average interest rate
decreased slightly between the two periods from 7.44% in 1995 to 7.36% in
1996. Interest expense, net of amounts capitalized, increased $5.3 million
from 1995 due to the decrease in interest capitalization from $2.9 million in
1995 to $1.3 million in 1996 as a result of the completion in 1996 of two of
the Company's significant development projects.
The gain on sale of $3.3 million in 1997 was primarily due to the condemnation
of a shopping center by the State of Texas during the third quarter. The
Company has leased back the portion of the shopping center purchased by the
state, and will continue to operate the center. The gain on sales of property
and securities of $5.6 million in 1996 is due primarily to the sale of two
properties and the receipt of insurance proceeds from fires which destroyed
parts of two shopping centers.
EFFECTS OF INFLATION
The rate of inflation was relatively unchanged in 1997. The Company has
structured its leases, however, in such a way as to remain largely unaffected
should significant inflation occur. Most of the leases contain percentage
rent provisions whereby the Company receives rentals based on the tenants'
gross sales. Many leases provide for increasing minimum rentals during the
terms of the leases through escalation provisions. In addition, many of the
Company's leases are for terms of less than ten years, which allows the
Company to adjust rentals to changing market conditions when the leases
expire. Most of the Company's leases require the tenants to pay their
proportionate share of operating expenses and ad valorem taxes. As a result
of these lease provisions, increases due to inflation, as well as ad valorem
tax rate increases, generally do not have a significant adverse effect upon
the Company's operating results.
NEW ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1998, the Company will adopt Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income." This
statement requires the presentation of total nonowner changes in equity,
including items not currently reflected in net income. Also effective
January 1, 1998, the Company will adopt SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." This statement requires
that segments of a business be disclosed in interim and annual financial
statements. The Company is currently evaluating the effect, if any, these
statements will have on the Company's financial presentation.
FORWARD-LOOKING STATEMENTS
This Annual Report includes certain forward-looking statements reflecting the
Company's expectations in the near term; however, many factors which may
affect the actual results, especially the everchanging retail environment, are
difficult to predict. Accordingly, there is no assurance that the Company's
expectations will be realized.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying consolidated balance sheets of
Weingarten Realty Investors (the "Company") as of December 31, 1997 and 1996,
and the related statements of consolidated income, shareholders' equity, and
cash flows for each of the three years in the period ended December 31, 1997.
Our audits also included the financial statement schedules listed in the Index
at Item 14. These financial statements and financial statement schedules are
the responsibility of the Company's management. Our responsibility is to
express an opinion on the financial statements and financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Weingarten Realty Investors
at December 31, 1997 and 1996, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles. Also, in our
opinion, such financial statement schedules, when considered in relation to
the basic consolidated financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Houston, Texas
February 20, 1998, except for Note 13, as to which the date is February 24,
1998
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Years Ended December 31,
------------------------
1997 1996 1995
-------- -------- ---------
<S> <C> <C> <C>
Revenues:
Rentals $169,041 $145,307 $125,400
Interest (including amounts from related parties of
$1,434 in 1997, $1,576 in 1996 and $2,304 in
1995) 2,487 3,148 5,338
Equity in earnings of real estate joint ventures
and partnerships 1,003 1,232 1,549
Other 1,981 1,436 1,910
-------- -------- ---------
Total 174,512 151,123 134,197
-------- -------- ---------
Expenses:
Depreciation and amortization 37,976 33,769 30,060
Interest 30,009 21,975 16,707
Operating 27,131 23,021 20,890
Ad valorem taxes 22,110 18,874 16,776
General and administrative 5,647 5,109 4,948
-------- -------- ---------
Total 122,873 102,748 89,381
-------- -------- ---------
Income from Operations 51,639 48,375 44,816
Gain (Loss) on Sales of Property and Securities 3,327 5,563 (14)
-------- -------- ---------
Net Income $ 54,966 $ 53,938 $ 44,802
Net Income Per Common Share $ 2.06 $ 2.03 $ 1.69
======== ======== =========
Net Income Per Common Share-
Assuming Dilution $ 2.05 $ 2.03 $ 1.69
======== ======== =========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
December 31,
------------
1997 1996
----------- ----------
ASSETS
<S> <C> <C>
Property $1,118,758 $ 970,418
Accumulated Depreciation (262,551) (233,514)
----------- ----------
Property - net 856,207 736,904
Investment in Real Estate Joint Ventures and Partnerships 2,824 7,282
----------- ----------
Total 859,031 744,186
Mortgage Bonds and Notes Receivable from:
Affiliate (net of deferred gain of $4,487 in 1997 and 1996) 14,752 14,550
Real Estate Joint Ventures and Partnerships 15,250 15,235
Marketable Debt Securities 12,345 13,806
Unamortized Debt and Lease Costs 23,536 23,411
Accrued Rent and Accounts Receivable (net of allowance for doubtful
accounts of $1,000 in 1997 and $1,236 in 1996) 14,583 13,164
Cash and Cash Equivalents 2,754 169
Other 4,542 6,576
----------- ----------
Total $ 946,793 $ 831,097
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Debt $ 507,366 $ 389,225
Accounts Payable and Accrued Expenses 43,305 36,949
Other 6,136 3,925
----------- ----------
Total 556,807 430,099
----------- ----------
Commitments and Contingencies
Shareholders' Equity:
Preferred Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 10,000; shares issued and outstanding:
none
Common Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 150,000; shares issued and outstanding:
26,660 in 1997 and 26,576 in 1996 800 797
Capital Surplus 389,186 400,201
----------- ----------
Shareholders' Equity 389,986 400,998
----------- ----------
Total $ 946,793 $ 831,097
=========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED CASH FLOWS
(AMOUNTS IN THOUSANDS)
Years Ended December 31,
------------------------
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $ 54,966 $ 53,938 $ 44,802
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 37,976 33,769 30,060
Equity in earnings of real estate joint ventures and
partnerships (1,003) (1,232) (1,549)
(Gain) loss on sales of property and securities (3,327) (5,563) 14
Amortization of direct financing leases 659 639 664
Changes in accrued rent and accounts receivable (2,462) (1,836) (526)
Changes in other assets (6,105) (7,507) (7,087)
Changes in accounts payable and accrued expenses 9,113 4,032 6,187
Other, net 85 59 (67)
---------- ---------- ----------
Net cash provided by operating activities 89,902 76,299 72,498
---------- ---------- ----------
Cash Flows from Investing Activities:
Investment in properties (136,632) (121,379) (105,438)
Mortgage bonds and notes receivable:
Advances (1,501) (3,151) (6,691)
Collections 2,090 6,188 12,468
Proceeds from sales and disposition of property 11,741 7,231 444
Proceeds from sales of marketable debt securities 31,836
Real estate joint ventures and partnerships:
Investments (59) (69) (66)
Distributions 808 1,032 1,337
Other, net 2,517 3,291 2,672
---------- ---------- ----------
Net cash used in investing activities (121,036) (106,857) (63,438)
---------- ---------- ----------
Cash Flows from Financing Activities:
Proceeds from issuance of:
Debt 104,526 95,770 144,500
Common shares of beneficial interest 1,325 231 398
Principal payments of debt (3,644) (2,350) (89,406)
Dividends paid (68,200) (65,851) (63,478)
Other, net (288) (428) (1,014)
---------- ---------- ----------
Net cash provided by (used in) financing activities 33,719 27,372 (9,000)
---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents 2,585 (3,186) 60
Cash and cash equivalents at January 1 169 3,355 3,295
---------- ---------- ----------
Cash and cash equivalents at December 31 $ 2,754 $ 169 $ 3,355
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Years Ended December 31, 1997, 1996 and 1995
Common
Shares of
Beneficial Capital Retained
Interest Surplus Earnings
----------- --------- ----------
<S> <C> <C> <C>
Balance, January 1, 1995 $ 791 $422,602
Net income $ 44,802
Shares exchanged for property 5 6,342
Shares issued under benefit plans 679
Unrealized loss on marketable securities transferred
to available for sale (144)
Cash dividends ($2.40 per share) (18,676) (44,802)
----------- --------- ----------
Balance, December 31, 1995 796 410,803 ----
Net income 53,938
Shares exchanged for property 1 968
Shares issued under benefit plans 469
Unrealized loss on marketable securities (125)
Cash dividends ($2.48 per share) (11,914) (53,938)
----------- --------- ----------
Balance, December 31, 1996 797 400,201 ----
Net income 54,966
Shares exchanged for property 1 275
Shares issued under benefit plans 2 1,733
Unrealized gain on marketable securities 211
Cash dividends ($2.56 per share) (13,234) (54,966)
----------- --------- ----------
Balance, December 31, 1997 $ 800 $389,186 $ ----
=========== ========= ==========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Weingarten Realty Investors (the "Company"), a Texas real estate investment
trust, is engaged in the acquisition, development and management of real
estate, primarily anchored neighborhood and community shopping centers. Over
75% of the Company's properties are located in Texas, with the remainder
located throughout the southwestern part of the United States. The Company's
major tenants include supermarkets, drugstores and other retailers who
generally sell basic necessity-type commodities. The Company currently
operates and intends to operate in the future as a real estate investment
trust ("REIT").
Basis of Presentation
The consolidated financial statements include the accounts of the Company, its
subsidiaries and its interest in 50% or more-owned joint ventures and
partnerships over which the Company exercises control. All significant
intercompany balances and transactions have been eliminated. Investments in
less than 50%-owned joint ventures and partnerships are accounted for using
the equity method.
Revenue Recognition
Rental revenue is generally recognized on a straight-line basis over the life
of the lease for operating leases and over the lease terms using the interest
method for direct financing leases. Contingent rentals (payments for taxes,
maintenance and insurance by the lessees and for an amount based on a
percentage of the tenants' sales) are estimated and accrued over the lease
year.
Property
Real estate assets are stated at cost less accumulated depreciation, which, in
the opinion of management, is not in excess of the individual property's
estimated undiscounted future cash flows, including estimated proceeds from
disposition. Depreciation is computed using the straight-line method,
generally over estimated useful lives of 18-50 years for buildings and 10-20
years for parking lot surfacing and equipment. Major replacements are
capitalized and the replaced asset and corresponding accumulated depreciation
are removed from the accounts. All other maintenance and repair items are
charged to expense as incurred.
Capitalization
Carrying charges, principally interest and ad valorem taxes, on land under
development and buildings under construction are capitalized as part of land
under development and buildings and improvements.
Deferred Charges
Unamortized debt and lease costs are amortized primarily on a straight-line
basis over the terms of the debt and over the lives of leases, respectively.
Marketable Debt Securities
The Company's investment in marketable securities is classified as "available
for sale." The securities are carried at market with any unrealized gains or
losses included as a component of shareholders' equity. Premiums and
discounts are amortized (accreted) to operations over the estimated remaining
lives of the securities using the constant yield method.
Use of Estimates
The preparation of financial statements requires management to make use of
estimates and assumptions that affect amounts reported in the financial
statements as well as certain disclosures. Actual results could differ from
those estimates.
Per Share Data
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings Per Share" as of December 31, 1997, and amounts for 1996 and
1995 were restated to conform with such presentation. Net income per common
share ("Basic EPS") is computed using net income and the weighted average
shares outstanding. Net income
<PAGE>
per common share-assuming dilution ("Diluted EPS") is also computed using net
income, however, the weighted average shares outstanding are adjusted for
potentially dilutive securities for the periods indicated, as follows (in
thousands):
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Weighted Average Shares: . . . . . 1997 1996 1995
------ ------ ------
Basic EPS. . . . . . . . . . . . . 26,638 26,555 26,464
Effect of dilutive securities:
Employee share options . . . . . 132 43 29
Convertible partnership interest 1
------ ------ ------
Diluted EPS. . . . . . . . . . . . 26,771 26,598 26,493
====== ====== ======
</TABLE>
Options to purchase 25,000 and 533,000 shares in 1996 and 1995, respectively,
were not included in the calculation of Diluted EPS as the exercise prices
were greater than the average market price for the year.
Statements of Cash Flows
The Company considers all highly liquid investments with original maturities
of three months or less as cash equivalents. The Company issued .1 million, .1
million and .2 million common shares of beneficial interest valued at $.2
million, $1.0 million and $6.3 million in 1997, 1996 and 1995, respectively,
in connection with the purchases of property. The Company assumed debt and/or
capital lease obligations totaling $17.3 million, $6.6 million and $2.9
million in connection with the purchases of property during 1997, 1996 and
1995, respectively. During 1997, the Company issued a limited partnership
interest in exchange for property valued at $1.7 million.
New Accounting Pronouncements
Effective January 1, 1998, the Company will adopt SFAS No. 130, "Reporting
Comprehensive Income." This statement requires the presentation of total
non-owner changes in equity, including items not currently reflected in net
income. Also effective January 1, 1998, the Company will adopt SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." This
statement requires that segments of a business be disclosed in interim and
annual financial statements. The Company is currently evaluating the effect,
if any, these statements will have on the Company's financial presentation.
Reclassifications
Certain reclassifications of prior years' amounts have been made to conform
with the current year presentation.
NOTE 2. DEBT
The Company's debt consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1997 1996
-------- --------
<S> <C> <C>
Fixed-rate debt payable to 2015 at 6.0% to 10.5% $379,749 $266,810
Notes payable under revolving credit agreements. . . . . 94,400 87,120
Obligations under capital leases . . . . . . . . . . . . 12,467 12,467
Repurchase agreements, due daily and collateralized by
$12.3 million of marketable debt securities 12,176 13,475
Industrial revenue bonds payable to 2015 at 4.7% to 6.8%
at December 31, 1997 7,437 7,558
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 1,137 1,795
-------- --------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . $507,366 $389,225
======== ========
</TABLE>
<PAGE>
The Company has an unsecured $200 million revolving credit agreement with a
bank syndicate. The agreement expires in November 2000, but the Company has
an annual option to request a one-year extension of the agreement. All
members of the bank syndicate must agree to the requested extension or the
agreement expires on the scheduled date, at which time all loans outstanding
under the credit agreement become payable over a two-year period. The Company
intends to request an extension of the agreement in 1998 and expects that the
bank syndicate will agree to its request. The Company also has an agreement
for an unsecured and uncommitted overnight credit facility totaling $20
million with a bank to be used for cash management purposes. The Company will
maintain adequate funds available under the $200 million revolving credit
facility at all times to cover the outstanding balance under the $20 million
facility. The Company also has letters of credit totaling $14.9 million
outstanding under the $200 million revolving credit facility at December 31,
1997. The revolving credit agreements are subject to normal banking terms and
conditions and do not adversely restrict the Company's operations or
liquidity.
At December 31, 1997, the variable interest rate for notes payable under the
$200 million revolving credit agreement, including the cost of the related
commitment fee, was 6.9% and the variable interest rates under the $20 million
revolving credit agreement and the repurchase agreements were 6.9% and 6.7%,
respectively. During 1997, the maximum balance and weighted-average balance
outstanding under these agreements were $125.7 million and $84.5 million,
respectively, at an average interest rate of 6.2%. The Company made cash
payments for interest on debt, net of amounts capitalized, of $27.4 million
in 1997, $21.3 million in 1996 and $13.9 million in 1995.
Certain debt is collateralized by various direct financing leases or other
property and current and future rentals from these leases and properties. At
December 31, 1997 and 1996, the carrying value of such property aggregated
$209 million and $173 million, respectively.
The Company has three interest rate swap contracts with an aggregate notional
amount of $40 million. Such contracts, which expire through 2004, have been
outstanding since their purchase in 1992. The Company intends to hold such
contracts through their expiration date and to use them as a means of managing
interest rate risk by fixing the interest rate on a portion of the Company's
variable-rate debt. The interest rate swaps have an effective interest rate
of 8.1%. The difference between the interest received and paid on the
interest rate swaps is recognized as interest expense as incurred. The
interest rate swaps increased interest expense and decreased net income as
follows, in millions: $.9 in 1997 and 1996 and $.8 in 1995. The interest
rate swaps increased the average interest rate for the Company's debt by the
following amounts: .2% for 1997, .3% for 1996 and .2% for 1995. The Company
could be exposed to credit losses in the event of non-performance by the
counterparty; however, the likelihood of such non-performance is remote.
The Company's debt can be summarized as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1997 1996
-------- --------
<S> <C> <C>
As to interest rate:
Fixed-rate debt (including amounts fixed through interest
rate swaps) $419,792 $306,853
Variable-rate debt . . . . . . . . . . . . . . . . . . . . 87,574 82,372
-------- --------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . $507,366 $389,225
======== ========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1997 1996
-------- --------
<S> <C> <C>
As to collateralization:
Secured debt . . . . . . $107,152 $ 91,334
Unsecured debt . . . . . 400,214 297,891
-------- --------
Total. . . . . . . . . . $507,366 $389,225
======== ========
</TABLE>
Scheduled principal payments on the Company's debt (excluding $94.4 million
potentially due under the Company's revolving credit agreements in 1998 and
2000 and $12.2 million of repurchase agreements) are due during the following
years (in thousands):
<TABLE>
<CAPTION>
<S> <C>
1998. . . . . . . $ 6,135
1999. . . . . . . 1,861
2000. . . . . . . 29,430
2001. . . . . . . 50,061
2002. . . . . . . 26,695
2003 through 2007 206,995
2008 through 2012 71,183
Thereafter. . . . 8,430
</TABLE>
Various debt agreements contain restrictive covenants, the most restrictive of
which requires the Company to produce annual consolidated distributable cash
flow, as defined by the agreements, of not less than 250% of interest
payments, to limit the payment of dividends to no more than 100% of the
Company's annual consolidated cash flow (as defined), to limit short-term debt
(as defined) to the greater of 33% of total debt or $200 million (exclusive of
repurchase agreements) and to maintain uncollateralized assets equal to at
least 150% of unsecured debt. Management believes that the Company is in
compliance with all restrictive covenants.
During 1997, the Company issued $97 million of unsecured Medium Term Notes
("MTNs") with an average life of 8.7 years at an average interest rate of
6.8%. As of December 31, 1997, the Company had issued a total of $292.5
million of MTNs. In the third quarter of 1996, the Company filed a $250
million shelf registration statement with the Securities and Exchange
Commission, which allows for the issuance of debt or equity securities or
warrants. At December 31, 1997, the unused portion of the shelf registration
totaled $134 million.
NOTE 3. PROPERTY
The Company's property consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1997 1996
---------- --------
<S> <C> <C>
Land . . . . . . . . . . . . . . . . . $ 208,512 $183,431
Land held for development. . . . . . . 31,679 32,228
Land under development . . . . . . . . 5,958 912
Buildings and improvements . . . . . . 863,567 743,688
Construction in-progress . . . . . . . 1,940 1,897
Property under direct financing leases 7,102 8,262
---------- --------
Total. . . . . . . . . . . . . . . . . $1,118,758 $970,418
========== ========
</TABLE>
The following carrying charges were capitalized (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1997 1996 1995
----- ------ ------
<S> <C> <C> <C>
Interest . . . . $ 812 $1,285 $2,878
Ad valorem taxes 33 269 486
----- ------ ------
Total. . . . . . $ 845 $1,554 $3,364
===== ====== ======
</TABLE>
<PAGE>
In December 1997, the Company formed a limited partnership to acquire certain
property. The Company controls the partnership and consolidates its
operations in the accompanying consolidated financial statements. The
partnership agreement allows for the outside limited partner to put its
interest to the partnership after the second anniversary of the agreement for
the $1.7 million value of the original consideration, payable in cash or
39,200 common shares of the Company, at the option of the Company.
NOTE 4. LEASING OPERATIONS
The Company's lease terms range from less than one year for smaller tenant
spaces to over twenty-five years for larger tenant spaces. In addition to
minimum lease payments, most of the leases provide for contingent rentals.
Future minimum rental income from non-cancelable operating leases at December
31, 1997, in millions, is: $132.1 in 1998; $117.8 in 1999; $100.4 in 2000;
$86.0 in 2001; $71.5 in 2002 and $516.5 thereafter. The future minimum rental
amounts do not include estimates for contingent rentals. Such contingent
rentals, in millions, aggregated $36.2 in 1997, $31.2 in 1996 and $26.8 in
1995.
Property under Direct Financing Leases
Leases that are, in substance, the financing of an asset purchase by the party
leasing the property are recorded as property under direct financing leases.
The Company, in its capacity as lessor, has removed the leased property from
its books and recorded the future lease payments receivable using the
following components (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1997 1996
-------- --------
<S> <C> <C>
Total minimum lease payments to be received. $10,478 $13,052
Estimated residual values of leased property 1,951 1,984
Unearned income (5,327) (6,774)
-------- --------
Property under direct financing leases . . . $ 7,102 $ 8,262
======== ========
</TABLE>
The Company recognized rental revenue from direct financing leases as follows,
in millions: $1.7 in 1997 and 1996 and $1.9 in 1995. At December 31, 1997,
minimum lease payments to be received in each of the five succeeding years, in
millions, are: $1.8 in 1998; $1.6 in 1999; $1.2 in 2000; $1.0 in 2001; $.9
in 2002 and $4.7 thereafter. The future minimum lease payments do not include
amounts for contingent rentals. Contingent rental income on properties leased
under direct financing leases, in millions, was $.6 in 1997, $.8 in 1996 and
$.7 in 1995.
NOTE 5. LEASE COMMITMENTS
The Company leases land and a shopping center from the owners and then
subleases these properties to other parties. Future minimum rental payments
under these operating leases, in millions, are: $1.6 in 1998; $1.5 in 1999,
2000 and 2001; $1.3 in 2002 and $19.6 thereafter.
Future minimum rental payments on these leases have not been reduced by future
minimum sublease rentals aggregating $15.4 million through 2017 that are due
under various non-cancelable subleases. Rental expense (including
insignificant amounts for contingent rentals) for operating leases aggregated,
in millions: $2.0 in 1997 and $1.8 in 1996 and 1995. Sublease rental revenue
(excluding amounts for improvements constructed by the Company on the leased
land) from these leased properties was as follows, in millions: $2.4 in 1997;
$2.0 in 1996 and $2.2 in 1995.
Property under capital leases, consisting of two shopping centers, aggregated
$12.3 million at December 31, 1997 and 1996 and is included in buildings and
improvements. Future minimum lease payments under these capital leases total
$18.7 million, with annual payments due of $.5 million in each of 1998 through
2002, and $16.0 million thereafter. The amount of these total payments
representing interest is $6.2 million. Accordingly, the present value of the
net minimum lease payments is $12.5 million at December 31, 1997.
<PAGE>
NOTE 6. RELATED PARTY TRANSACTIONS
The Company has mortgage bonds and notes receivable of $14.8 million and $14.6
million, net of deferred gain of $4.5 million, at December 31, 1997 and 1996,
respectively, from WRI Holdings, Inc. ("Holdings"). The Company and Holdings
share certain directors and are under common management. These receivables are
collateralized by unimproved land and an investment in a joint venture which
owns and manages a motor hotel ("Hospitality"). The bonds and notes bear
interest at rates of 16% and prime plus 1%, respectively. However, due to its
poor financial condition, Holdings reduced the payment of interest to the
Company in 1988 to the cash flow received from Hospitality and, accordingly,
the Company limited the recognition of interest income for financial statement
purposes to the same amount. The Company does not anticipate receiving
interest payments in excess of this cash flow in the near term. Interest
income recognized for financial reporting purposes was $.1 million, $.3
million and $1.2 million in 1997, 1996 and 1995, respectively.
In 1996, Hospitality obtained secured financing on its motor hotel. Proceeds
from the borrowings were used to repay $.6 million of the net investment in
the mortgage bonds and $1.3 million of notes receivable. The Company did not
recognize any of the previously deferred gain on this transaction.
The Company's unrecorded receivable for interest on the mortgage bonds was
$26.4 million and $22.4 million at December 31, 1997 and 1996, respectively.
Interest income not recognized by the Company for financial reporting purposes
aggregated, in millions, $4.0, $3.7 and $3.6 for 1997, 1996 and 1995,
respectively.
Management of the Company believes that the fair market value of the security
collateralizing debt from Holdings is greater than the net investment in such
debt and that there would not be a charge to operations if the Company were
to foreclose on the debt. If foreclosure were required, the net investment
in such debt would become the Company's basis of the repossessed assets.
However, the Company does not currently anticipate foreclosure on Holdings'
properties due to certain restrictions imposed on such assets in connection
with the Company's REIT status. The Company's management does not presently
believe that the net investment in the mortgage bonds and notes receivable
from Holdings has been impaired.
The Company owns interests in several joint ventures and partnerships. Notes
receivable from these entities bear interest at 8.5% to 10.5% at December 31,
1997 and are due at various dates through 2020. The Company recognized
interest income on these notes as follows, in millions: $1.4 in 1997; $1.3 in
1996 and $1.1 in 1995.
During 1997, the Company purchased its joint venture partner's 85% interest in
four shopping centers for $26 million.
Chase Bank of Texas, National Association ("Chase") is a significant
participant in and the agent for the banks that provide the Company's $200
million revolving credit agreement. The Company and Chase have two common
directors.
NOTE 7. COMMITMENTS AND CONTINGENCIES
The Company has guaranteed $1.1 million of notes payable executed by various
joint ventures and partnerships at December 31, 1997.
The Company is involved in various matters of litigation arising in the normal
course of business. While the Company is unable to predict with certainty the
amounts involved, the Company's management and counsel are of the opinion
that, when such litigation is resolved, the Company's resulting liability, if
any, will not have a material effect on the Company's consolidated financial
statements.
In connection with the acquisition of a shopping center in 1996, the Company
was obligated to pay additional acquisition costs to the seller during 1997
upon the execution of new leases at the property and the satisfaction of other
conditions. All required additional payments were funded in 1997 and totaled
$11.3 million.
<PAGE>
NOTE 8. FEDERAL INCOME TAX CONSIDERATIONS
Federal income taxes are not provided because the Company believes it
qualifies as a REIT under the provisions of the Internal Revenue Code.
Shareholders of the Company include their proportionate taxable income in
their individual tax returns. As a REIT, the Company must distribute at least
95% of its ordinary taxable income to its shareholders and meet certain income
source and investment restriction requirements.
Taxable income differs from net income for financial reporting purposes
principally because of differences in the timing of recognition of interest,
ad valorem taxes, depreciation, rental revenue, pension expense and
installment gains on sales of property. As a result of these differences, the
book value of the Company's net assets exceeds its tax basis by $49.8 million
at December 31, 1997.
For federal income tax purposes, the cash dividends distributed to
shareholders are characterized as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
Ordinary income. . . . . 95.9% 87.1% 76.4%
Return of capital
(generally non-taxable) 2.9 4.0 20.1
Long-term capital gains 1.2 8.9 3.5
------ ------ ------
Total 100.0% 100.0% 100.0%
====== ====== ======
</TABLE>
NOTE 9. SHARE OPTIONS AND AWARDS
The Company has an incentive Share Option Plan which provides for the issuance
of options and share awards up to a maximum of 700,000 common shares and
expires in December 1997. Options granted under this plan become exercisable
in equal increments over a three-year period. The Company has an additional
share option plan which grants 100 share options to every employee of the
Company, excluding officers, upon completion of each five-year interval of
service. This plan, which expires in 2002, provides options for a maximum of
100,000 common shares. Options granted under this plan are exercisable
immediately. For both of these share option plans, options are granted to
employees of the Company at an exercise price equal to the quoted fair market
value of the common shares on the date the options are granted and expire upon
termination of employment or ten years from the date of grant.
In January 1997, the Company issued 29,400 restricted shares and granted
314,200 share options under a compensatory Incentive Share Plan for key
officers of the Company. This plan, which expires in 2003, provides for the
issuance of up to 1,000,000 shares, either in the form of restricted shares or
share options. The restricted shares generally vest over a ten-year period,
with potential acceleration of vesting due to appreciation in the market value
of the Company's shares. The share options vest over a five-year period
beginning three years after the date of grant. Share options were granted at
the quoted fair market value on the date of grant. The Company recognized
compensation expense relating to restricted shares as follows, in millions:
$.3 in 1997 and $.2 in 1996 and 1995.
The Company does not recognize compensation cost for share options when the
option exercise price equals or exceeds the quoted fair market value on the
date of the grant. Had the Company determined compensation cost for its share
option and award plans based on the fair value of the options granted at the
grant dates, the Company's proforma net income would have been as follows, in
millions: $54.3, $53.9 and $44.8 in 1997, 1996 and 1995, respectively.
Proforma net income per common share would have been $2.04, $2.03 and $1.69
in 1997, 1996 and 1995, respectively.
The fair value of each option grant was estimated on the date of grant using
the Black-Scholes option-pricing method with the following weighted-average
assumptions: dividend yield of 6.0% for both 1997 and 1996; expected
volatility of 18.0% and 18.3%; expected lives of 6.9 years and 7.1 years and
risk-free interest rates of 6.5% and 6.4% in 1997 and 1996, respectively.
<PAGE>
Following is a summary of the option activity for the three years ended
December 31, 1997:
<TABLE>
<CAPTION>
SHARES WEIGHTED
UNDER AVERAGE
OPTION EXERCISE PRICE
---------- ---------------
<S> <C> <C>
Outstanding, January 1, 1995 . 747,250 $ 35.10
Granted. . . . . . . . . . . . 3,510 35.75
Canceled . . . . . . . . . . . (26,500) 34.25
Exercised. . . . . . . . . . . (15,610) 29.25
----------
Outstanding, December 31,1995 708,650 35.25
Granted. . . . . . . . . . . . 24,260 38.10
Canceled . . . . . . . . . . . (34,300) 37.00
Exercised. . . . . . . . . . . (10,875) 27.00
----------
Outstanding, December 31,1996 687,735 35.40
Granted. . . . . . . . . . . . 558,600 40.25
Canceled . . . . . . . . . . . (9,400) 37.60
Exercised. . . . . . . . . . . (61,910) 32.00
----------
Outstanding, December 31, 1997 1,175,025 $ 37.85
==========
</TABLE>
The number of share options exercisable at December 31, 1997, 1996 and 1995
were 296,000, 243,000 and 189,000, respectively. Options exercisable at
year-end 1997 had a weighted-average exercise price of $33.40. The
weighted-average fair value of share options granted during 1997 and 1996 were
$5.35 and $5.10, respectively. Share options outstanding at December 31, 1997
had exercise prices ranging from $25.00 to $43.50 and a weighted-average
remaining contractual life of 7.6 years. Approximately 88% of the options
outstanding at year-end 1997 have exercise prices between $37.00 and $40.25
and a weighted-average contractual life of 7.1 years. There were 235,000
common shares available for the future grant of options or awards at December
31, 1997.
NOTE 10. MARKETABLE SECURITIES
The Company's investment in marketable debt securities at December 31, 1997,
which is classified as "available for sale", consists of U.S. government
agency guaranteed pass-through certificates which mature through 2008. At
December 31, 1997 and 1996, the fair value of these investments totaled $12.3
million and $13.8 million, respectively. The amortized cost of the
investments at December 31, 1997 and 1996 was $12.4 million and $14.1 million,
respectively, and the related unrealized losses were $.1 million and $.3
million at December 31, 1997 and 1996, respectively. Subsequent to year-end,
the Company sold its investment in these securities for $12.2 million,
resulting in a gain of less than $.1 million.
NOTE 11. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of the Company's financial instruments was determined using
available market information and appropriate valuation methodologies as of
December 31, 1997. Unless otherwise described below, all other financial
instruments are carried at amounts which approximate their fair values.
Based on rates currently available to the Company for debt with similar terms
and average maturities, fixed-rate debt with carrying values of $419.8 million
and $306.9 million have fair values of approximately $437.9 million and $309.6
million at December 31, 1997 and 1996, respectively. The fair value of the
Company's variable-rate debt approximates its carrying values of $87.6 million
and $82.4 million at year-end 1997 and 1996, respectively.
The fair value of the interest rate swap agreements is based on the estimated
amounts the Company would receive or pay to terminate the contracts. If the
Company had terminated these agreements at December 31, 1997 and 1996, the
Company would have paid $3.1 million at each year-end.
The fair value of the mortgage bonds and notes receivable from Holdings was
not determined because it is not practical to reasonably assess the credit
adjustment that would be applied in the marketplace for such bonds and notes
receivable.
NOTE 12. EMPLOYEE BENEFIT PLANS
The Company has a Savings and Investment Plan to which eligible employees may
elect to contribute from 1% to 12% of their salaries. Employee contributions
are matched by the Company at the rate of $.50 per $1.00 for the first 6% of
the employee's salary. The employees vest in the employer contributions
ratably over a six-year period. Compensation expense related to the plan was
$.2 million per year for 1997, 1996 and 1995.
The Company has a defined benefit pension plan covering substantially all of
its employees. The benefits are based on years of service and the employee's
compensation during the last five years of service. The Company's funding
policy is to make annual contributions as required by applicable regulations,
however, the Company has not been required to make contributions for any of
the past three years. The following table sets forth the plan's funded status
and amounts recognized in the Company's balance sheet (in thousands):
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation. . . . . . . . . . . . . . . . . . $ 7,308 $ 6,263
Accumulated benefit obligation . . . . . . . . . . . . . . . $ 7,480 $ 6,368
======== ========
Projected benefit obligation . . . . . . . . . . . . . . . . $ 9,318 $ 7,943
Plan assets at fair value, primarily common stocks and bonds 10,348 8,677
-------- --------
Plan assets in excess of projected benefit obligation 1,030 734
Unrecognized prior service cost 55 102
Unrecognized net gain (2,447) (1,882)
Unrecognized net transition asset (53)
-------- --------
Pension liability. . . . . . . . . . . . . . . . . . . . . . $(1,362) $(1,099)
======== ========
</TABLE>
<TABLE>
<CAPTION>
The components of net periodic pension cost are as follows (in thousands):
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Service cost of benefits earned during the year $ 430 $ 361 $ 300
Interest cost on projected benefit obligation 587 506 478
Actual return on plan assets (1,918) (1,295) (1,499)
Net amortization and deferral 1,164 688 1,047
-------- -------- --------
Total $ 263 $ 260 $ 326
======== ======== ========
</TABLE>
Assumptions used to develop periodic expense and the actuarial present value
of projected benefit obligations were:
<TABLE>
<CAPTION>
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Weighted average discount rate 7.0% 7.0% 7.0%
Expected long-term rate of return on plan assets 9.0% 8.0% 8.0%
Rate of increase in compensation levels 5.0% 5.0% 5.5%
</TABLE>
<PAGE>
NOTE 13. SUBSEQUENT EVENTS
On January 20, 1998, the Company sold its investment in U.S. government agency
guaranteed pass-through certificates for $12.2 million, resulting in a gain of
less than $.1 million. The proceeds were used to retire overnight repurchase
agreements which were collateralized by these marketable debt securities.
On February 23, 1998, the Company issued $75 million of 7.44% cumulative
preferred shares with no stated maturity and a liquidation preference of $25
per share, which are callable at the Company's option on or after March 31,
2003. Net proceeds of $72.5 million were used to pay down amounts outstanding
under the Company's revolving credit facilities and to retire $35 million of
9.11% secured notes payable to an insurance company. The early extinguishment
of these notes that were scheduled to mature in August of 2001 will result in
an extraordinary loss of $1.2 million in 1988. The issuance of the preferred
shares reduced the unused portion of the Company's shelf registration to $59
million.
NOTE 14. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
During the year ended December 31, 1997, the Company acquired eight retail
centers, three industrial projects and its joint venture partner's 85%
interest in four other retail centers for a total of $111 million. The pro
forma financial information for the years ended December 31, 1997 and 1996 is
based on the historical statements of the Company after giving effect to the
acquisitions as if such acquisitions took place on January 1, 1997 and 1996,
respectively.
The pro forma financial information shown below is presented for informational
purposes only and may not be indicative of results that would have actually
occurred if the acquisitions had been in effect at the dates indicated, nor
does it purport to be indicative of the results that may be achieved in the
future (in thousands, except per share amounts).
.
<TABLE>
<CAPTION>
DECEMBER 31,
------------
1997 1996
-------- --------
<S> <C> <C>
Pro forma revenues $179,756 $160,267
======== ========
Pro forma net income $ 55,055 $ 54,636
======== ========
Pro forma net income per common share $ 2.07 $ 2.07
======== ========
</TABLE>
NOTE 15. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial data for the years ended December 31, 1997 and
1996 is as follows:
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
1997:
Revenues $41,673 $42,843 $44,000 $45,996
Net Income 12,776 12,755 16,177 (1) 13,258
Net Income per Common Share 0.48 0.48 0.61 (1) 0.50
1996:
Revenues $36,762 $37,178 $37,956 $39,227
Net Income 12,625 12,910 16,325 (1) 12,078
Net Income per Common Share 0.48 0.48 0.61 (1) 0.46
</TABLE>
(1) Increase is primarily the result of a gain on the sale of property
during the quarter.
<PAGE>
NOTE 16. PRICE RANGE OF COMMON SHARES (UNAUDITED)
The high and low sale prices per share of the Company's common shares, as
reported on the New York Stock Exchange composite tape, and dividends per
share paid for the fiscal quarters indicated were as follows:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------ ------- ---------
<S> <C> <C> <C>
1997:
Fourth $ 45 $ 38 7/8 $ 0.64
Third 44 1/8 39 7/16 0.64
Second 45 5/8 41 3/8 0.64
First 44 3/4 40 0.64
1996:
Fourth $ 40 3/4 $ 36 $ 0.62
Third. 40 1/2 37 3/8 0.62
Second 38 7/8 34 1/4 0.62
First. 38 7/8 35 5/8 0.62
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 10. TRUST MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Information with respect to the Company's Trust Managers is
incorporated herein by reference to the "Election of Trust Managers" section
of the Company's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held May 8, 1998.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference to the "Executive Compensation" and
"Pension Plan" sections of the Company's definitive Proxy Statement for the
Annual Meeting of Shareholders to be held May 8, 1998.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to the "Election of Trust Managers"
section of the Company's definitive Proxy Statement for the Annual Meeting of
Shareholders to be held May 8, 1998.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference to the "Compensation Committee
Interlocks and Insider Participation" section of the Company's definitive
Proxy Statement for the Annual Meeting of Shareholders to be held May 8, 1998.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules: PAGE
----
(1) (A) Independent Auditors' Report 19
(B) Financial Statements
(i) Statements of Consolidated Income for the years
ended December 31, 1997, 1996 and 1995 20
(ii) Consolidated Balance Sheets as of
December 31, 1997 and 1996 21
(iii) Statements of Consolidated Cash Flows for the years
ended December 31, 1997, 1996 and 1995 22
(iv) Statements of Consolidated Shareholders' Equity for
the years ended December 31, 1997, 1996 and 1995. 23
(v) Notes to Consolidated Financial Statements 24
(2) Financial Statement Schedules:
SCHEDULE PAGE
-------- ----
II Valuation and Qualifying Accounts 40
III Real Estate and Accumulated Depreciation 41
IV Mortgage Loans on Real Estate 43
All other schedules are omitted since the required information is not present
or is not present in amounts sufficient to require submission of the schedule
or because the information required is included in the consolidated financial
statements and notes hereto.
(b) No reports on Form 8-K were filed during the last quarter of the
period covered by this annual report.
(c) Exhibits:
<PAGE>
<TABLE>
<CAPTION>
<C> <C> <S>
3.1 - Restated Declaration of Trust, with all amendments thereto (filed as Exhibit 3.1 to
the Company's Registration Statement on Form S-3 (No. 33-49206) and
incorporated herein by reference).
3.2 - Bylaws of the Company (filed as Exhibit 3.2 to the Company's Registration
Statement on Form S-3 (No. 33-49206) and incorporated herein by reference).
10.1 - 1988 Share Option Plan of the Company, as amended (filed as Exhibit 10.1 to
the Company's Annual Report on Form 10-K for the year ended December 31,
1990 and incorporated herein by reference).
10.2**- Weingarten Realty Investors Supplemental Retirement Account Plan, as
amended and restated (filed as Exhibit 10.26 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1992 and incorporated herein by
reference).
10.3 - 16% Mortgage Bonds Due 1994 of WRI Holdings, Inc. dated December 28,
1984, payable to the Company in the original principal amount of $3,150,000
(filed as Exhibit 10.8 to the Company's Registration Statement on Form S-4 (No.
33-19730) and incorporated herein by reference).
10.3.1* - Fourth Bonds Renewal and Extension Agreement, effective December 28, 1997,
for the 16% Mortgage Bonds of WRI Holdings, Inc., payable to the Company in
the original principal amount of $3,150,000.
10.4 - Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and
Texas Commerce Bank National Association, as Trustee, relating to the 16%
Mortgage Bonds Due 1994 of WRI Holdings, Inc. in the original principal amount
of $3,150,000 (filed as Exhibit 10.9 to the Company's Registration Statement on
Form S-4 (No. 33-19730) and incorporated herein by reference).
10.4.1 - Supplemental Indenture of Trust, dated February 22, 1995, between WRI
Holdings, Inc. and Texas Commerce Bank National Association relating to the
16% Mortgage Bonds due December 28, 1994 of WRI Holdings, Inc. in the
original principal amount of $3,150,000 (filed as exhibit 10.4.1 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
10.5* - Fourth Supplemental Indenture of Trust between WRI Holdings, Inc. and Texas
Commerce Trust Company of New York, as Trustee, amending Trust Indenture,
dated December 28, 1984, between WRI Holdings, Inc. and Texas Commerce
Bank National Association, as Trustee, relating to the 16% Mortgage Bonds Due
1994 of WRI Holdings, Inc. in the original principal amount of $3,150,000
10.6 - 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December 28,
1984, payable to the Company in the original principal amount of $16,682,000
(filed as Exhibit 10.10 to the Company's Registration Statement on Form S-4
(No. 33-19730) and incorporated herein by reference).
10.7 - Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and
Texas Commerce Bank National Association, as Trustee, relating to the 16%
Mortgage Bonds Due 2004 of WRI Holdings, Inc. in the original principal amount
of $16,682,000 (filed as Exhibit 10.11 to the Company's Registration Statement
on Form S-4 (No. 33-19730) and incorporated herein by reference).
10.7.1 - First Supplemental Indenture of Trust between WRI Holdings, Inc. and Texas
Commerce Trust Company of New York, as Trustee, amending Trust Indenture,
dated December 28, 1984, between WRI Holdings, Inc. and Texas Commerce
Bank National Association, as Trustee, relating to the 16% Mortgage Bonds Due
2004 of WRI Holdings, Inc. in the original principal amount of $16,682,000 (filed
as Exhibit 10.7.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989 and incorporated herein by reference).
10.8 - Third Amended Promissory Note, as restated, effective as of January 1, 1992,
executed by WRI Holdings, Inc., pursuant to which it may borrow up to the
principal sum of $40,000,000 from the Company.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <C> <S>
10.9 - 16% Mortgage Bonds Due 2004 of WRI Holdings, Inc., dated December 28,
1984, payable to the Company in the original principal amount of $7,000,000
(filed as Exhibit 10.13 to the Company's Registration Statement on Form S-4
(No. 33-19730) and incorporated herein by reference).
10.10 - Trust Indenture, dated December 28, 1984, between WRI Holdings, Inc. and
Texas Commerce Bank National Association, as Trustee, relating to the 16%
Mortgage Bonds Due 2004 of WRI Holdings, Inc. in the original principal amount
of $7,000,000 (filed as Exhibit 10.14 to the Company's Registration Statement on
Form S-4 (No. 33-19730) and incorporated herein by reference).
10.10.1 - First Supplemental Indenture of Trust between WRI Holdings, Inc. and Texas
Commerce Trust Company of New York, as Trustee, amending Trust Indenture,
dated December 28, 1984, between WRI Holdings, Inc. and Texas Commerce
Bank National Association, as Trustee, relating to the 16% Mortgage Bonds Due
2004 of WRI Holdings, Inc. in the original principal amount of $7,000,000 (filed as
Exhibit 10.10.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1989 and incorporated herein by reference).
10.11 - Agreement Correcting Trust Indenture, dated February 11, 1985, relating to 16%
Mortgage Bonds Due 2004 of WRI Holdings, Inc. in the original principal amount
of $7,000,000 (filed as Exhibit 10.15 to the Company's Registration Statement on
Form S-4 (No. 33-19730) and incorporated herein by reference).
10.12 - Amendment to Note Purchase Agreement, dated March 31, 1991, amending
loan agreement, dated August 6, 1987, Life and Accident Insurance Company for
5,000,000, American General Life Insurance Company of Delaware for
5,000,000, Republic National Life Insurance Company for $3,000,000 and
American Amicable Life Insurance Company of Texas for $2,000,000 (filed as
Exhibit 10.15.1 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 and incorporated herein by reference).
10.13**- The Savings and Investment Plan for Employees of the Company, as amended
(filed as Exhibit 4.1 to the Company's Registration Statement on Form S-8 (No.
33-25581) and incorporated herein by reference).
10.14**- The Fifth Amendment to Savings and Investment Plan for Employees of the
Company (filed as Exhibit 4.1.1 to the Company's Post-Effective Amendment No.
1 to Registration Statement on Form S-8 (No. 33-25581) and incorporated herein
by reference).
10.15 - Promissory Note in the amount of $12,000,000 between the Company, as payee,
and Plaza Construction, Inc., as maker (filed as Exhibit 10.23 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1991 and
incorporated herein by reference).
10.15.1* - Ninth Renewal and Extension of Promissory Note in the amount of $12,000,000,
effective as of December 1, 1997, between the Company, as payee, and Plaza
Construction, Inc., as maker.
10.16 - Amended and Restated Master Swap Agreement dated as of January 29, 1992,
between the Company and Texas Commerce Bank National Association, (filed
as Exhibit 10.24 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 and incorporated herein by reference).
10.16.1 - Rate Swap Transaction, dated as of May 15, 1992, between the Company and
Texas Commerce Bank National Association (filed as Exhibit 10.24.1 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1992
and incorporated herein by reference).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <C> <S>
10.16.2 - Rate Swap Transaction, dated as of June 24, 1992, between the Company and
Texas Commerce Bank National Association (filed as Exhibit 10.24.2 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1992
and incorporated herein by reference).
10.16.3 - Rate Swap Transaction, dated as of July 2, 1992, between the Company and
Texas Commerce Bank National Association (filed as Exhibit 10.24.3 to the
Company's Annual Report on Form 10 K for the year ended December 31, 1992
and incorporated herein by reference).
10.17 - Amended and Restated Credit Agreement dated as of November 21, 1996
between the Company and Texas Commerce Bank National Association, as
Agent, and individually as a Bank, and the Banks defined therein.
10.17.1* - First, Second and Third Amendments to the Amended and Restated Credit
Agreement dated November 21, 1996 between the Company and Texas
Commerce Bank National Association.
10.18 - Note Purchase Agreement, dated April 1, 1994, between The Variable Annuity
Life Insurance Company, American General Life Insurance Company and the
Company in the amount of $30,000,000 (filed as Exhibit 10.25 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
10.19** - The 1993 Incentive Share Plan of the Company (filed as Exhibit 4.1 to the
Company's Registration Statement on Form S-8 (No. 33-52437) and
incorporated herein by reference).
10.20* - Master Promissory Note in the amount of $20,000,000 between the Company, as
payee, and Texas Commerce Bank National Association, as maker, effective
December 30, 1997.
10.21 - Distribution Agreement among the Company and the Agents dated November
15, 1996 relating to the MTN's (filed as Exhibit 1.1 to the Company's Current
Report of Form 8-K dated November 15, 1996 and incorporated herein by
reference).
10.22 - Senior Indenture dated as of May 1, 1995 between the Company and Texas
Commerce Bank, National Association, as trustee (filed as Exhibit 4(a) to the
Company's Registration Statement on Form S-3 (No. 33-57659) and
incorporated herein by reference).
10.23 - Subordinated Indenture dated as of May 1, 1995 between the Company and
Texas Commerce Bank, National Association (filed as Exhibit 4(b) to the
Company's Registration Statement on Form S-3 (No. 33-57659) and
incorporated herein by reference).
12.1* - Computation of Fixed Charges Ratios.
21.1* - Subsidiaries of the Registrant.
23.1* - Consent of Deloitte & Touche llp.
27.1* - Financial Data Schedule.
<FN>
* Filed with this report.
** Management contract or compensatory plan or arrangement.
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
WEINGARTEN REALTY INVESTORS
By: Stanford Alexander
-------------------
Stanford Alexander
Chairman/Chief Executive Officer
Date: March 9, 1998
Pursuant to the requirement of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
<TABLE>
<CAPTION>
<S> <C> <C> <C>
By: Stanford Alexander Chairman and Trust Manager March 9, 1998
------------------------
Stanford Alexander (Chief Executive Officer)
By: Andrew M. Alexander President March 9, 1998
------------------------
Andrew M. Alexander and Trust Manager
By: Robert J. Cruikshank Trust Manager March 9, 1998
------------------------
Robert J. Cruikshank
By: Martin Debrovner Vice Chairman March 9, 1998
------------------------
Martin Debrovner and Trust Manager
By: Melvin Dow Trust Manager March 9, 1998
------------------------
Melvin Dow
By: Stephen A. Lasher Trust Manager March 9, 1998
------------------------
Stephen A. Lasher
By: Joseph W. Robertson, Jr. Executive Vice President and March 9, 1998
------------------------
Joseph W. Robertson, Jr. Trust Manager (Chief Financial Officer)
By: Douglas W. Schnitzer Trust Manager March 9, 1998
------------------------
Douglas W. Schnitzer
By: Marc J. Shapiro Trust Manager March 9, 1998
------------------------
Marc J. Shapiro
By: J.T. Trotter Trust Manager March 9, 1998
------------------------
J.T. Trotter
By: Stephen C. Richter Senior Vice President/ March 9, 1998
------------------------
Stephen C. Richter Financial Administration
and Treasurer
(Principal Accounting Officer)
</TABLE>
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
VALUATION AND QUALIFYING ACCOUNTS
DECEMBER 31, 1997, 1996 AND 1995
(AMOUNTS IN THOUSANDS)
CHARGED
BALANCE AT TO COSTS CHARGED BALANCE
BEGINNING AND TO OTHER DEDUCTIONS AT END OF
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS (A) PERIOD
- ------------------------------- ----------- --------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
1997:
Allowance for Doubtful Accounts $ 1,236 $ 877 $ 1,113 $ 1,000
1996:
Allowance for Doubtful Accounts 1,436 1,014 1,214 1,236
1995:
Allowance for Doubtful Accounts 1,007 1,126 697 1,436
</TABLE>
- -------
Note A -- Write-offs of accounts receivable previously reserved.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III
WEINGARTEN REALTY INVESTORS
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
Total Cost
---------------------------------------------------
Property
Under
Buildings Projects Direct
and Under Financing Total
Land Improvements Development Leases Cost
-------- ------------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
SHOPPING CENTERS:
Texas. . . . . . . . . . . . . . . . . . . . . . $141,170 $ 518,228 $ 5,136 $ 664,534
Other States . . . . . . . . . . . . . . . . . . 49,073 239,549 1,966 290,588
-------- ------------- ------------ ---------- ----------
Total Shopping Centers . . . . . . . . . . . . . 190,243 757,777 7,102 955,122
INDUSTRIAL PROPERTIES:
Texas. . . . . . . . . . . . . . . . . . . . . . 17,336 84,873 102,209
OFFICE BUILDING:
Texas. . . . . . . . . . . . . . . . . . . . . . 534 13,429 13,963
MULTI-FAMILY RESIDENTIAL
PROPERTIES:
Texas. . . . . . . . . . . . . . . . . . . . . . 399 1,098 1,497
-------- ------------- ------------ ---------- ----------
Total Improved
Properties. . . . . . . . . . . . . . . . . . . 208,512 857,177 7,102 1,072,791
-------- ------------- ------------ ---------- ----------
LAND UNDER DEVELOPMENT OR HELD FOR DEVELOPMENT:
Texas $ 31,228 $ 31,228
Other States 6,409 6,409
-------- ------------- ------------ ---------- ----------
Total Land Under
Development 37,637 37,637
-------- ------------- ------------ ---------- ----------
LEASED PROPERTY
(SHOPPING CENTER)
UNDER CAPITAL LEASE:
Louisiana 6,390 6,390
-------- ------------- ------------ ---------- ----------
CONSTRUCTION IN
PROGRESS:
Texas 1,424 1,424
Other States 516 516
-------- ------------- ------------ ---------- ----------
Total Construction in
Progress 1,940 1,940
TOTAL OF ALL
PROPERTIES . . . . . . . . . . . . . . . . . . . $208,512 $ 863,567 $ 39,577 $ 7,102 $1,118,758
-------- ------------- ------------ ---------- ----------
Accumulated Encumbrances
Depreciation (A)
-------------- --------------
<S> <C> <C>
SHOPPING CENTERS:
Texas. . . . . . . . . . . . . . . . . . . . . . $ 188,418 $ 4,830
Other States . . . . . . . . . . . . . . . . . . 42,796 25,173
-------------- --------------
Total Shopping Centers . . . . . . . . . . . . . 231,214 30,003
INDUSTRIAL PROPERTIES:
Texas. . . . . . . . . . . . . . . . . . . . . . 22,276 3,369
OFFICE BUILDING:
Texas. . . . . . . . . . . . . . . . . . . . . . 5,262
MULTI-FAMILY RESIDENTIAL
PROPERTIES:
Texas. . . . . . . . . . . . . . . . . . . . . . 716 1,065
-------------- --------------
Total Improved
Properties. . . . . . . . . . . . . . . . . . . 259,468 34,437
-------------- --------------
LAND UNDER DEVELOPMENT OR HELD FOR DEVELOPMENT:
Texas
Other States
Total Land Under
Development
LEASED PROPERTY
(SHOPPING CENTER)
UNDER CAPITAL LEASE:
Louisiana . . . . . . . . . . . . . . . . . . . 3,083 5,857
-------------- --------------
CONSTRUCTION IN
PROGRESS:
Texas
Other States
Total Construction in
Progress
TOTAL OF ALL
PROPERTIES . . . . . . . . . . . . . . . . . . . $ 262,551 $ 40,294
============== ==============
</TABLE>
Note -- A -Encumbrances do not include $61.4 million outstanding under a
$35 million 14-year term loan and a $30 million 20-year term
loan, both payable to a group of insurance companies secured
by a property collateral pool including all or part of eight
shopping centers.
<PAGE>
SCHEDULE III
(CONTINUED)
The changes in total cost of the properties for the years ended
December 31, 1997, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
----------- --------- ---------
<S> <C> <C> <C>
Balance at beginning of year $ 970,418 $849,894 $735,134
Additions at cost 157,757 131,814 115,687
Retirements or sales (9,918) (11,585) (1,433)
Other changes (B) 501 295 506
----------- --------- ---------
Balance at end of year $1,118,758 $970,418 $849,894
=========== ========= =========
</TABLE>
The changes in accumulated depreciation for the years ended
December 31, 1997, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Balance at beginning of year $233,514 $216,657 $191,427
Additions at cost 32,226 27,732 25,541
Retirements or sales (3,189) (10,875) (311)
--------- --------- ---------
Balance at end of year $262,551 $233,514 $216,657
========= ========= =========
<FN>
Note B - Transferred from net investment in direct financing leases.
</TABLE>
<PAGE>
SCHEDULE IV
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
FINAL PERIODIC FACE CARRYING
INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF
RATE DATE TERMS MORTGAGES MORTGAGES(B)
--------- -------- ---------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
SHOPPING CENTERS:
FIRST MORTGAGES:
Phelan Boulevard
Beaumont, TX Prime 06-01-98 Varying ($32 $ 733 $ 32
+2% balloon)
Eastex Venture
Beaumont, TX Prime 12-31-98 Varying 3,500 2,338
+1 ($2,338
balloon)
Main/O.S.T., Ltd.
Houston, TX 9.3% 02-01-20 $476 4,800 4,620
Annual
P & I
($1,241
balloon)
INDUSTRIAL:
FIRST MORTGAGES:
Railwood
Houston, TX 10% 12-28-04 Varying 7,000 6,223
($6,223
balloon)
River Pointe, Conroe,TX
(Note C) 9% 11-30-03 Varying 2,133 1,891
Little York, Houston, TX
(Note C) 9% 12-31-03 Varying 1,922 1,760
</TABLE>
<PAGE>
SCHEDULE IV
(CONTINUED)
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS)
FINAL PERIODIC FACE CARRYING
INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF
RATE DATE TERMS MORTGAGES MORTGAGES(B)
--------- -------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
UNIMPROVED LAND:
SECOND MORTGAGE:
River Pointe
Conroe, TX Prime 12-01-98 Varying 12,000 8,789
+1% ($8,789
balloon)
---------- -------------
TOTAL MORTGAGE LOANS ON
REAL ESTATE (Note A) $ 32,088 $ 25,653
========== =============
</TABLE>
Note A - Changes in mortgage loans for the years ended December 31,
1997, 1996 and 1995 are summarized below:
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Balance, Beginning of year $27,157 $31,292 $28,719
New Mortgage Loans 3,500
Additions to Existing Loans 589 1,075 1,041
Collections of Principal (2,093) (5,210) (1,968)
-------- -------- --------
Balance, End of Year $25,653 $27,157 $31,292
======== ======== ========
</TABLE>
Note B - The aggregate cost at December 31, 1997 for federal income tax
purposes is $25,189.
Note C - Principal payments are due monthly to the extent of cash flow
generated by the underlying property.
NINTH RENEWAL AND EXTENSION AGREEMENT
-------------------------------------
THE STATE OF TEXAS
COUNTY OF MONTGOMERY
This NINTH RENEWAL AND EXTENSION AGREEMENT (the "Ninth Renewal") is
executed this 15th day of December, 1997 (the "Execution Date"), but effective
as of December 1, 1997, by and between PLAZA CONSTRUCTION, INC. ("Maker"), a
Texas corporation, and WEINGARTEN REALTY INVESTORS ("Payee") a Texas real
estate investment trust.
WITNESSETH:
----------
WHEREAS, the Payee is the present legal owner and holder of that certain
Promissory Note (the "Original Note") dated November 29, 1982, in the original
principal sum of Twelve Million and No/100 Dollars ($12,000,000.00) executed
by River Pointe Venture I ("River Pointe"), a Texas joint venture, payable to
the order of Weingarten Realty, Inc. "WRI" a Texas corporation, payable as
therein provided, which Note is secured by (i) a Deed of Trust and Security
Agreement (the "Original Deed of Trust") dated November 29, 1982, executed by
River Pointe to Melvin A. Dow, Trustee, filed under Clerk's File No. 8254156
and under Film Code Reference No. 171-01-0638 in the Real Property Records of
Montgomery County, Texas, covering and affecting certain property situated in
Montgomery County, Texas, more particularly described therein (the
"Property"), and (ii) any and all other liens, security instruments, and
documents executed by River Pointe and/or Maker, securing or governing the
payment of the Original Note including, but not limited to, that certain Loan
Agreement ("Original Loan Agreement") dated November 29, 1982 executed by WRl
and River Pointe; and
WHEREAS, by that certain River Pointe Venture I Assignment of Interest
and Dissolution, dated October 16, 1987, filed on October 19, 1987, under
Clerk's File No. 8747284, in the Real Property Records of Montgomery County,
Texas, River Pointe was dissolved and Maker assumed all of the debts and
obligations of River Pointe, and obtained ownership of all of the assets of
River Pointe, including, but not limited to, the Property; and
WHEREAS, WRI assigned and conveyed all of its property, both real and
personal including, without limitation, the Original Note, to Payee, a
evidenced by that certain Master Deed and General Conveyance, by and between
WRI and Payee, a counterpart of which was filed under Clerk's File No. 8815730
and under Film Code Reference No. 520-01-0704, in the Real Property Records of
Montgomery County, Texas; and
WHEREAS, by instrument entitled Renewal and Extension Agreement (the
"First Renewal") entered into as of November 1, 1989, executed by Maker and
Payee, the Original Note, Original Deed of Trust, Original Loan Agreement and
all other documents evidencing, governing, or securing the payment of the Note
were renewed and extended; and
WHEREAS, by instrument entitled Second Renewal and Extension Agreement
(the "Second Renewal") dated March 12, 1991, but effective as of December 1,
1990, filed on March 21, 1991, under Clerk's File No. 9111519 and under Film
Code Reference No. ###-##-#### in the Official Public Records of Real Property
of Montgomery County, Texas, Maker and Payee further modified and extended the
Original Note, Original Deed of Trust, Original Loan Agreement, and all other
documents evidencing, governing or securing payment of the Original Note; and
WHEREAS, by instrument entitled Third Renewal and Extension Agreement
(the "Third Renewal") dated February 28, 1992, but effective as of December 1,
1991, filed on May 14, 1992, under Clerk's File No. 9222962, and under Film
Code Reference No. ###-##-#### in the Official Public Records of Real Property
of Montgomery County, Texas, Maker and Payee further modified and extended the
Original Note, Original Deed of Trust Original Loan Agreement and d1 other
documents evidencing, governing or securing payment of the Original Note; and
WHEREAS, by instrument entitled Fourth Renewal and Extension Agreement
(the "Fourth Renewal") dated February 19, 1993, but effective as of December
1, 1992, Maker and Payee further modified and extended the Original Note,
Original Deed of Trust Original Loan Agreement, and all other documents
evidencing, governing or securing payment of the Original Note; and
WHEREAS, by instrument entitled Fifth Renewal and Extension Agreement
(the "Fifth Renewal") dated March 9, 1994, but effective as of December 1,
1993, filed on March 18, 1994 under Clerk's File No. 9415326 and under Film
Code Reference No. ###-##-#### in the Official Public Records of Real Property
of Montgomery County, Texas, Maker and Payee further modified and extended the
Original Note, Original Deed of Trust, Original Loan Agreement and all other
documents evidencing, governing, or securing payment of the Original Note; and
WHEREAS, by instrument entitled Sixth Renewal and Extension Agreement
(the "Sixth Renewal") dated February 22, 1995, but effective as of December 1,
1994, filed on March 1, 1995 under Clerk's File No. 09511049 and under Film
Code Reference No. 046-00-0785 in the Official Public Records of Real Property
of Montgomery County, Texas, Maker and Payee further modified and extended the
Original Note, Original Deed of Trust Original Loan Agreement, and all other
documents evidencing, governing, or securing payment of the Original Note; and
WHEREAS, by instrument entitled Seventh Renewal and Extension Agreement
(the "Seventh Renewal") dated February 7, 1996, but effective a of December 1,
1995, filed on February 23, 1996 under Clerk's File No. 9611331 and under Film
Code Reference No. 135-00-0887 in the Official Public Records of Red Property
of Montgomery County, Texas, Maker and Payee further modified and extended the
Original Note, Original Deed of Trust Original Loan Agreement, and all other
documents evidencing, governing, or securing payment of the Original Note; and
WHEREAS, by instrument entitled Eighth Renewal and Extension Agreement
(the "Eighth Renewal") dated February 21, 1997, but effective as of December
1, 1996, filed on November 5, 1997 under Clerk's File No. 9771746 and under
Film Code Reference No. 316-00-0327 in the Official File Records of Real
property of Montgomery County, Texas, Maker and payee further modified and
extended the Original Note, Original Deed of Trust, Original Loan Agreement,
and all other documents evidencing, governing, or securing payment of the
Original Note. The Original Note, the Original Deed of Trust and Original Loan
Agreement, together with any and all other liens, security interests, and
documents evidencing, securing or governing payment of the Original Note, a
modified by the first Renewal, Second Renewal, Third Renewal, Fourth Renewal,
Fifth Renewal, Sixth Renewal, Seventh Renewal, and Eighth Renewal are herein
referred to a the "Note" and "Security Instruments" respectively; and
WHEREAS, Maker and payee now propose to modify the Note in certain
respects and to continue the lien and priority of the Security Instruments a
security for the payment of the Note, a set forth more particularly herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Maker and payee hereby
agree as follows:
1. The Maker reaffirms its promise to pay to the order of the payee,
at 2600 Citadel plaza Drive, Suite 300, Houston, Texas 77008, the principal
balance due and owing on the Note, with accrued interest thereon, as provided
in the Note, except that the maturity date of the Note is hereby amended and
extended until December 1, 1998, at which time the unpaid principal balance of
the Note, together with all accrued but unpaid interest, shall be due and
payable.
All liens securing the Note, including, but not limited to, the lien
created by the Original Deed of Trust, are hereby renewed, extended and
carried forward to secure payment of the Note, as hereby amended, and the
Original Deed of Trust is hereby amended to reflect that the maturity date of
the Note is December 1, 1998. All other Security Instruments including, but
not limited to, the Original Loan Agreement, are likewise hereby modified and
amended to reflect the renewal and extension of the maturity date of the Note
to December 1, 1998.
2. Maker hereby represents and warrants to payee that (a) Maker is
the sole legal and beneficial owner of the property; (b) Maker has the full
power and authority to make the agreements contained in this Ninth Renewal
without joinder and consent of any other party; and (c) the execution,
delivery and performance of this Ninth Renewal will not contravene or
constitute a event which itself or which with the passing of time or giving of
notice or both would constitute a default under any trust deed, deed of trust
loan agreement, indenture or other agreement to which Maker is a party or by
which Maker or any of its property is bound. Maker hereby agrees to indemnify
and hold harmless payee against any loss, claim, damage, liability or expense
(including, without limitation, attorneys' fees) incurred as a result of any
representation or warranty made by Maker in this Section 2 proving to be
untrue in any material respect.
3. To the extent that the Note is inconsistent with the terms of this
Ninth Renewal, the Note is hereby modified and amended. Except a modified,
renewed and extended by this Ninth Renewal, the Note and the Security
Instruments remain unchanged and continue unabated and in full force and
effect as a valid and binding obligation of the Maker.
4. In conjunction with the extension, renewal and modification of
the Note and the Security Instruments, Maker hereby extends and mar the hens,
security interests, and assignments created and granted in the Security
Instruments until the indebtedness secured thereby, as so extended, renewed
and modified, has been fully paid, and agrees that such extension, renewal and
modification shall in no manner affect or impair the Note, the liens or
security interests securing same, and that said liens, security interests, and
assignments shall not in any manner be waived. The purpose of this Ninth
Renewal is simply to extend the time of payment of the loan evidenced by the
Note and any indebtedness secured by the Security Instruments, as modified by
this Ninth Renewal, and to carry forward all liens and security interests
securing the same, which are acknowledged by Maker to be valid and subsisting.
5. Maker covenants and warrants that the payee is not in default
under the Note or Security Instruments, each a modified by this Ninth Renewal
(collectively referred to as the "Loan Instruments") that there are no
defenses, counterclaims or offsets to such Loan Instruments; and that all of
the provisions of the Loan Instruments, as amended hereby, are in full force
and effect.
6. Maker agrees to pay all costs incurred in connection with the
execution and consummation of this Ninth Renewal, including but not limited
to, all recording costs, the premium for an endorsement to the Mortgagee
Policy of Title Insurance insuring the validity and priority of the Original
Deed of Trust in form satisfactory to Payee, and the reasonable fees and
expenses of Payee's counsel.
7. If any covenant, condition, or provision herein contained is held
to be invalid by final judgment of any court of competent jurisdiction, the
invalidity of such covenant, condition, or provision shall not in any way
affect any other covenant, condition, or provision herein contained.
8. Payee is an unincorporated trust organized under the Texas Real
Estate Investment Trust Act. Neither the shareholders of Payee, nor its Trust
Managers, officers, employees, or other agents shall be personally,
corporately, or individually liable, in any manner whatsoever for any debt,
act, omission, or obligation of Payee, and all persons having claims of any
kind whatsoever against Payee shall look solely to the property of Payee for
the enforcement of their rights (whether monetary or nonmonetary) against
Payee.
[END OF PAGE 3 - SIGNATURES ON FOLLOWING PAGE]
<PAGE>
EXECUTED this day and year first above written, but effective for all
purposes as of
December 1, 1997.
PLAZA CONSTRUCTION, INC.,
a Texas corporation
By:____________________________________
Stanford Alexander
President
"Maker"
WEINGARTEN REALTY INVESTORS, a Texas
real estate investment trust
By:____________________________________
Bill Robertson, Jr.
Executive Vice President
"Payee"
FIRST AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
This First Amendment to Amended and Restated Credit Agreement (the
"Amendment"), effective as of January 1, 1997, is by and among Weingarten
Realty Investors, a Texas real estate investment trust (the "Borrower"),
--------
Texas Commerce Bank National Association, a national banking association (in
its individual capacity, "TCB"), NationsBank of Texas, N.A., a national
---
banking association, ("NationsBank"), Signet Bank (formerly Signet
Bank/Virginia) ("Signet"), Commerzbank, A.G., a domestic branch of a bank
organized under the laws of Germany ("Commerzbank"), The Sumitomo Bank,
Limited, a Japanese banking corporation ("Sumitomo") and any bank that may
hereafter become a party to the Credit Agreement (as defined below) in
accordance with the provisions thereof (each individually, a "Bank" and
----
collectively, the "Banks"), TCB as Agent hereunder (in such capacity, the
-----
"Agent") for the Banks hereunder, NationsBank, in its capacity as Documentary
-----
Agent hereunder, and Commerzbank, in its capacity as Co-Agent hereunder.
WHEREAS, the Agent, the Documentary Agent, the Co-Agent, the Banks and
the Borrower have entered into that certain Amended and Restated Credit
Agreement dated and effective as of November 21, 1996 (as it may be hereafter
amended or otherwise modified and in effect from time to time, the "Credit
Agreement");
WHEREAS, the Banks and the Borrower wish to amend the Credit Agreement to
permit the Borrower to request and maintain from time to time, three seven
(7) day Interest Periods in effect at any one time with respect to Borrowings
under the Notes, instead of limiting such Borrowings to two such seven (7) day
Interest Periods at any one time;
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the Banks, the Agent, the
Documentary Agent, the Co-Agent and the Borrower hereby agree as follows:
1.01 AMENDMENT. Section 2.02(a) of the Credit Agreement is hereby
---------
amended by deleting the proviso in the third sentence thereof, and
substituting in lieu thereof the following:
;provided that, there shall not be more than three (3) Interest Periods for a
period of seven (7) days in effect at any one time with respect to any Note,
and no more than seven (7) Interest Periods in effect in the aggregate at any
one time with respect to any Note.
1.02. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. This Amendment shall
----------------------------------------
become effective upon execution of this Amendment by each of the Agent, the
Documentary Agent, the Co-Agent, each Bank and the Borrower on the signature
pages hereof, and receipt by the Agent of such executed signature pages.
1.03. REPRESENTATIONS OF BORROWER. The Borrower hereby represents
---------------------------
and warrants to the Banks the following:
(a) All of the representations and warranties contained in Article V
of the Credit Agreement are true and correct on and as of the date hereof and
will be true and correct after giving effect to this Amendment.
(b) No event which constitutes a Default or an Event of Default under
the Credit Agreement, as amended hereby, has occurred and is continuing, or
would result from the execution and delivery of this Amendment.
1.04 CAPITALIZED TERMS. The capitalized terms used herein which are
-----------------
defined in the Credit Agreement and not otherwise defined herein shall have
the meaning specified therein.
1.05 RATIFICATION. The Credit Agreement, as hereby amended, is in
------------
all respects ratified and confirmed, and all other rights and powers created
thereby or thereunder shall be and remain in full force and effect.
1.06 COUNTERPARTS. This Amendment may be executed in several
------------
counterparts, and each counterpart, when so executed and delivered, shall
constitute an original instrument, and all such separate counterparts shall
constitute but one and the same instrument.
1.07. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
--------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
1.08. PRIOR AGREEMENTS. THE CREDIT AGREEMENT, THE NOTES AND THIS
----------------
AMENDMENT CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF THE
TEXAS BUSINESS & COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
WEINGARTEN REALTY INVESTORS
By:_____________________________________
Title:____________________________________
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, AS AGENT, AND INDIVIDUALLY AS A BANK
By:_____________________________________
Title:____________________________________
NATIONSBANK OF TEXAS, N.A., AS
Documentary Agent, and INDIVIDUALLY AS A BANK
By:_____________________________________
Title:____________________________________
COMMERZBANK, A.G., AS CO-AGENT, AND
INDIVIDUALLY AS BANK
By:_____________________________________
Title:____________________________________
SIGNET BANK
By:_____________________________________
Title:____________________________________
THE SUMITOMO BANK, LIMITED
By:_____________________________________
Title:____________________________________
<PAGE>
<PAGE>
- ------
APPROVED AND CONSENTED
TO BY EACH OF THE
FOLLOWING GUARANTORS:
WEINGARTEN/LUFKIN, INC.
By:_____________________________________
Title:____________________________________
WEINGARTEN/NOSTAT INC.
By:_____________________________________
Title:____________________________________
WEINGARTEN REALTY
MANAGEMENT COMPANY
By:_____________________________________
Title:____________________________________
WRI/POST OAK, INC.
By:_____________________________________
Title:____________________________________
Signature page of First Amendment
to Amended and Restated Credit
Agreement effective January 1, 1997
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "Amendment") dated
and effective as of September 12, 1997, is by and among Weingarten Realty
Investors, a Texas real estate investment trust (the "Borrower") and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, a national banking association (in its
individual capacity, "TCB"), NationsBank of Texas, N.A., as Syndication Agent
(in its individual capacity, "NationsBank"), Signet Bank ("Signet"),
Commerzbank, A.G., a domestic branch of a bank organized under the laws of
Germany ("Commerzbank"), The Sumitomo Bank, Limited, a Japanese banking
corporation ("Sumitomo"), and Bank of America National Trust and Savings
Association, a national banking association, a Documentation Agent (In its
individual capacity, "Bank of America") and each other bank which is a party
to the Credit Agreement (collectively, with TCB, NationsBank, Bank of America,
Signet, Commerzbank and Sumitomo, the "Banks") and TCB as Agent for the Banks
(in such capacity, the "Agent").
WHEREAS, the Agent, TCB, NationsBank, Signet, Commerzbank, Sumitomo,
and the Borrower have entered into that certain Credit Agreement dated and
effective as of November 21, 1996 (as it has been and may be hereafter amended
or otherwise modified and in effect from time to time, the "Credit
Agreement");
WHEREAS, the Agent, TCB, NationsBank, Signet, Commerzbank, Sumitomo
and the Borrower have entered into that certain First Amendment to Credit
Agreement dated and effective as of January 1, 1997; and;
WHEREAS, the Banks and the Borrower wish to amend the Credit
Agreement to revise the principal amount of the Commitments, and to add Bank
of America as a signatory and party thereto, and as Documentation Agent;
provided that, the Documentation Agent shall have no responsibilities in its
capacity as such;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the Banks, the Agent and the
Borrower agree as follows:
SECTION 1. AMENDMENTS
----------
(a) On and after the date of this Amendment Bank of America
shall be, and shall be deemed to be a party to the Credit Agreement, and the
term "Banks" shall include Bank of America for all purposes of the Credit
Agreement and each other Loan Document and, accordingly, Bank of America shall
have the rights and obligations of a Bank under the Loan Documents. Since
Bank of America is deemed to be a party to the Credit Agreement, the mechanism
set out in Section 10.08 shall not be applicable to the addition of Bank of
America hereunder; however, such mechanism shall be applicable as to any
future assignment (or participation) of any Bank's rights or obligations under
the Credit Agreement. After giving effect to the addition of Bank of America
as a Bank under the Loan Documents, each Bank (including the Issuing Bank)
shall be deemed, without further action by any party to this Amendment, to
have sold to each other Bank, and each other Bank shall be deemed, without
further action by any party to this Amendment, to have purchased from the
other Banks, an assignment of a portion of each Note and Advance, and a
participation in each Letter of Credit issued and outstanding as of the date
of this Amendment, if any, to the effect that each Bank shall hold an interest
in such Note and Advance, and in each Letter of Credit and in the
reimbursement obligations of Borrower due in respect of drawings made under
such Letter of Credit equal to such Bank's Pro Rata Percentage as provided in
subsection 1(b) below.
(b) On the date of this Amendment, each Bank's Commitment shall
equal the principal amount shown on Exhibit A, attached hereto, and the
Borrower shall issue to each Bank a Note in an original principal amount equal
to the principal amount set forth on Exhibit A; provided that Notes so issued
to each of TCB, NationsBank, Signet, Commerzbank and Sumitomo are issued in
substitution for existing Notes issued by the Borrower on November 21, 1996 to
such Banks (the "Original Notes"), and not in extinguishment of the
obligations of the Borrower under the Original Notes, and all amounts
outstanding or otherwise due and payable under such Original Notes, to the
extent of each Bank's Commitment on and as of the date hereof, including
without limitation, principal of, accrued and unpaid interest on, and fees and
expenses remaining unpaid, shall not be deemed to have been paid as a result
of substitution of such Original Notes.
(c) Section 2.02(c) of the Credit Agreement is hereby amended by
deleting the words "dated as of the Closing Date" from said Section 2.02(c)
and substituting in lieu thereof the words:
dated as of the date of the Second Amendment, dated as of September 12, 1997,
by and among the Agent, the Borrower and the Banks, parties to this Agreement,
SECTION 2. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. This
----------------------------------------
Amendment shall become effective upon satisfaction of the following
conditions:
(a) Each Bank shall have received on or before the effective
date of this Amendment (the "Effective Date") the Notes described in Section
1(b) of this Amendment, executed by the Borrower, and the Amendment, duly
executed by the Borrower, the Agent and the Banks, and acknowledged by each
Guarantor;
(b) Each Bank shall have delivered to the Agent, for delivery by
the Agent to the Borrower, its Original Note; and
(c) Each Bank shall have received a legal opinion from counsel
for the Borrower, in form and substance satisfactory to the Banks.
SECTION 3. REPRESENTATIONS OF BORROWER. The Borrower hereby represents and
---------------------------
warrants to the Banks the following:
(a) All of the representations and warranties contained in
Article V of the Credit Agreement are true and correct on and as of the date
hereof and will be true and correct after giving effect to this Amendment.
(b) No event which constitutes a Default or an Event of Default
under the Credit Agreement, as amended hereby, has occurred and is continuing,
or would result from the execution and delivery of this Amendment.
(c) The Borrower has the power and authority under the Act to
execute and deliver this Amendment and to perform its obligations under the
Credit Agreement, as amended hereby, and under the Notes; and all such action
has been duly authorized by all necessary proceeding on its part. Each of the
Credit Agreement, this Amendment and each Note has been duly and validly
executed and delivered by the Borrower and constitute a valid and legally
binding obligation of the Borrower enforceable in accordance with its terms,
except as limited by Debtor Laws.
(d) The Borrower has delivered to Bank of America true, correct
and complete copies of each of the Loan Documents (including copies of the
outstanding Letters of Credit), the Interest Rate Agreements, and such other
information as Bank of America has requested.
SECTION 4. NOTICES. Bank of America hereby designate its current
-------
address for notices pursuant to Section 10.02 of the Credit Agreement as
follows:
Bank of America National Trust and Savings Association
5 Park Plaza, Suite 500
Irvine, California 92614-8525
Attention: William D. Balfour III
SECTION 5. CAPITALIZED TERMS. The capitalized terms used herein
-----------------
which are defined in the Credit Agreement and not otherwise defined herein
shall have the meanings specified therein.
SECTION 6. RATIFICATION. The Credit Agreement, as hereby
------------
amended, is in all respects ratified and confirmed, and all other rights and
powers created thereby or thereunder shall be and remain in full force and
effect.
SECTION 7. COUNTERPARTS. This Amendment may be executed in
------------
several counterparts, and each counterpart, when so executed and delivered,
shall constitute an original instrument, and all such separate counterparts
shall constitute but one and the same instrument.
SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
-------------
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
SECTION 9. PRIOR AGREEMENTS. THE CREDIT AGREEMENT, THE NOTES,
----------------
THIS AMENDMENT AND THE OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH
CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF THE TEXAS
BUSINESS & COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
BORROWER:
WEINGARTEN REALTY INVESTORS
By:_____________________________________
Title:____________________________________
AGENTS:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, AGENT
By:_____________________________________
Title:____________________________________
NATIONSBANK OF TEXAS, N.A.,
Syndication Agent
By:_____________________________________
Title:____________________________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
Documentation Agent
By:_____________________________________
Title:____________________________________
<PAGE>
BANKS:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By:_____________________________________
Title:____________________________________
SIGNET BANK
By:_____________________________________
Title:____________________________________
NATIONSBANK OF TEXAS, N.A.
By:_____________________________________
Title:____________________________________
COMMERZBANK, A.G.
By:_____________________________________
Title:____________________________________
THE SUMITOMO BANK, LIMITED
By:_____________________________________
Title:____________________________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:_____________________________________
Title:____________________________________
<PAGE>
<PAGE>
CONSENT OF GUARANTORS:
- ------------------------
WEINGARTEN/LUFKIN, INC.
By:_____________________________________
Title:____________________________________
WEINGARTEN NOSTAT INC.
By:_____________________________________
Title:____________________________________
WRI/POST OAK, INC.
By:_____________________________________
Title:____________________________________
WEINGARTEN REALTY
MANAGEMENT COMPANY
By:_____________________________________
Title:____________________________________
ATDNL, INC.
By:_____________________________________
Title:____________________________________
Signature page of Second
Amendment to Credit Agreement
dated as of September 12, 1997
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
BANK . . . . . . . . . PRO RATA PERCENTAGE COMMITMENT
1. Texas Commerce 21.25% $42,500,000
Bank National
Association
2. NationsBank of 21.25% $42,500,000
Texas, N.A.
3. Signet Bank 12.5% $25,000,000
4. Commerzbank, A.G. 16.25% $32,500.000
5. The Sumitomo Bank, 7.5% $15,000,000
Limited
6. Bank of America 21.25% $42,500.000
National Trust and
Savings Association
</TABLE>
THIRD AMENDMENT AND RESTATEMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT AND RESTATEMENT TO CREDIT AGREEMENT (the
"Amendment and Restatement") dated as of October __, 1997, is by and among
Weingarten Realty Investors, a Texas real estate investment trust (the
"Borrower") and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking
association (in its individual capacity, "TCB"), NationsBank of Texas, N.A.,
as Syndication Agent (in its individual capacity, "NationsBank"), Signet Bank
("Signet"), Commerzbank, A.G., a domestic branch of a bank organized under the
laws of Germany ("Commerzbank"), The Sumitomo Bank, Limited, a Japanese
banking corporation ("Sumitomo"), and Bank of America National Trust and
Savings Association, a national banking association, as Documentation Agent
(in its individual capacity, "Bank of America") and each other bank which is a
party to the Credit Agreement (collectively, with TCB, NationsBank, Bank of
America, Signet, Commerzbank and Sumitomo, the "Banks") and TCB as Agent for
the Banks (in such capacity, the "Agent").
WHEREAS, the Agent, TCB, NationsBank, Signet, Commerzbank, Sumitomo,
and the Borrower have entered into that certain Credit Agreement dated and
effective as of November 21, 1996;
WHEREAS, the Agent, TCB, NationsBank, Signet, Commerzbank, Sumitomo
(together referred to as the "Prior Banks" and the Borrower have entered into
that certain First Amendment to Credit Agreement dated and effective as of
January 1, 1997, and the Agent, the Prior Banks and Bank of America and the
Borrower have entered into that certain Second Amendment to Credit Agreement
dated and effective as of September 12, 1997 (such Credit Agreement as it has
been and may be hereafter amended or otherwise modified and in effect from
time to time, the "Credit Agreement"); and;
WHEREAS, the Banks and the Borrower wish to extend the Revolving
Credit Termination Date from November 21, 1999 to November 21, 2000;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the Banks, the Agent and the
Borrower agree as follows:
SECTION 1. AMENDMENTS
----------
(a) The definition of "Revolving Credit Termination Date" in
Section 1.01 of the Credit Agreement is hereby amended by deleting the date
"November 21, 1999", from clause (i) thereof, and substituting in lieu thereof
the date "November 21, 2000".
(b) The definition of "Termination Date" under Section 1.01 of
the Credit Agreement is hereby amended by deleting the date "November 21,
1999" and substituting in lieu thereof the date "November 21, 2000."
(c) Section 2.11 of the Credit Agreement is hereby amended by
deleting the date "November 21, 1999", from the second line thereof, and
substituting in lieu thereof the date "November 21, 2000".
SECTION 2. CONDITIONS TO EFFECTIVENESS OF AMENDMENT AND
-----------------------------------------------
RESTATEMENT. This Amendment and Restatement shall become effective on and as
- -----------
of the date first written above (the "Effective Date") upon receipt by the
Agent, on behalf of each Bank, of an original counterpart of this Amendment
and Restatement for each Bank, duly executed by the Borrower, the Agent and
the Banks, and acknowledged by each Guarantor.
SECTION 3. REPRESENTATIONS OF BORROWER. The Borrower hereby
-----------------------------
represents and warrants to the Banks the following:
(a) All of the representations and warranties contained in
Article V of the Credit Agreement are true and correct on and as of the date
hereof and will be true and correct after giving effect to this Amendment and
Restatement.
(b) No event which constitutes a Default or an Event of Default
under the Credit Agreement, as amended hereby, has occurred and is continuing,
or would result from the execution and delivery of this Amendment and
Restatement.
(c) The Borrower has the power and authority under the Act to
execute and deliver this Amendment and Restatement and to perform its
obligations under the Credit Agreement, as amended hereby, and under the
Notes; and all such action has been duly authorized by all necessary
proceeding on its part. Each of the Credit Agreement, this Amendment and
Restatement and each Note has been duly and validly executed and delivered by
the Borrower and constitute a valid and legally binding obligation of the
Borrower enforceable in accordance with its terms, except as limited by Debtor
Laws.
SECTION 4. CAPITALIZED TERMS. The capitalized terms used herein
-----------------
which are defined in the Credit Agreement and not otherwise defined herein
shall have the meanings specified therein.
SECTION 5. RATIFICATION. The Credit Agreement, as hereby
------------
amended, is in all respects ratified and confirmed, and all other rights and
powers created thereby or thereunder shall be and remain in full force and
effect.
SECTION 6. COUNTERPARTS. This Amendment and Restatement may be
------------
executed in several counterparts, and each counterpart, when so executed and
delivered, shall constitute an original instrument, and all such separate
counterparts shall constitute but one and the same instrument.
SECTION 7. GOVERNING LAW. THIS AMENDMENT AND RESTATEMENT SHALL
-------------
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.
SECTION 8. PRIOR AGREEMENTS. THE CREDIT AGREEMENT, THE NOTES,
----------------
THIS AMENDMENT AND RESTATEMENT AND THE OTHER DOCUMENTS EXECUTED IN CONNECTION
HEREWITH CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF THE
TEXAS BUSINESS & COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
BORROWER:
WEINGARTEN REALTY INVESTORS
By:_____________________________________
Title:____________________________________
AGENTS:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, AGENT
By:_____________________________________
Title:____________________________________
NATIONSBANK OF TEXAS, N.A.,
Syndication Agent
By:_____________________________________
Title:____________________________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
Documentation Agent
By:_____________________________________
Title:____________________________________
<PAGE>
BANKS:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By:_____________________________________
Title:____________________________________
SIGNET BANK
By:_____________________________________
Title:____________________________________
NATIONSBANK OF TEXAS, N.A.
By:_____________________________________
Title:____________________________________
COMMERZBANK, A.G.
By:_____________________________________
Title:____________________________________
THE SUMITOMO BANK, LIMITED
By:_____________________________________
Title:____________________________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:_____________________________________
Title:____________________________________
<PAGE>
<PAGE>
- ------
CONSENT OF GUARANTORS:
- ------------------------
WEINGARTEN/LUFKIN, INC.
By:_____________________________________
Title:____________________________________
WEINGARTEN NOSTAT INC.
By:_____________________________________
Title:____________________________________
WRI/POST OAK, INC.
By:_____________________________________
Title:____________________________________
WEINGARTEN REALTY
MANAGEMENT COMPANY
By:_____________________________________
Title:____________________________________
ATDNL, INC.
By:_____________________________________
Title:____________________________________
MASTER
PROMISSORY NOTE
---------------
(this "Note")
$20,000,000.00 December 15, 1997
FOR VALUE RECEIVED, the undersigned, WEINGARTEN REALTY INVESTORS
("Company") promises to pay to the order of TEXAS COMMERCE BANK NATIONAL
ASSOCIATION ("Bank"), on or before December 14, 1998, ("Final Maturity Date")
at its offices located at 717 Main Street, Houston, Texas 77002 in lawful
money of the United States of America and in immediately available funds, the
principal amount of each loan (a "Loan") shown in Bank's records to have been
made by bank and on the relative maturity date set forth by Bank's records.
Each Loan shall also have its own date of maturity agreed by Company and Bank
which will occur prior to the Final Maturity Date. The rate of interest on
each loan evidenced hereby from time to time shall be the interest rate which
shall be determined for each Loan by agreement between Company and Bank but,
in no event, shall exceed the maximum interest rate permitted under applicable
law ("Highest Lawful Rate"). If Texas law determines the Highest Lawful Rate,
Bank has elected the "indicated" (weekly) ceiling as defined in the Texas
Credit Code or any successor statute. All past due amounts shall bear
interest at a per annum interest rate equal to the Prime Rate plus one percent
(1%). The term "Prime Rate" shall mean the prime rate as determined from time
to time by Bank and thereafter entered in the minutes of Bank's Loan and
Discount Committee, fluctuating upward or downward automatically without
notice to Company on the business day of each such determination. THE PRIME
RATE IS A REFERENCE RATE AND BANK MAY MAKE LOANS AT RATES OF INTEREST AT,
ABOVE OR BELOW THE PRIME RATE. Interest on each Loan shall be: (i) computed
on the unpaid principal amount of the Loan outstanding from the date of
advance until paid; (ii) payable at maturity and there after on demand, and
(iii) shall be calculated on the basis of a year of 360 days for the actual
days elapsed.
The total amount of interest (as defined under applicable law) contracted
for, charged or collected under this Note will never exceed the Highest Lawful
Rate. If Bank contracts for, charges or receives any excess interest, it will
be deemed a mistake. Bank will automatically reform the contract or charge to
conform to applicable law, and if excess interest has been received, Bank will
either refund the excess or credit the excess on the unpaid principal amount
of this Note. All amounts constituting interest will be spread throughout the
full term of this Note in determining whether interest exceeds lawful amounts.
Each of the following is an event of default ("Events of Default"):
(a) Company shall fail to pay any amount of principal of or interest on
this Note when due;
(b) Company shall fail to pay when due any amount of principal or interest
with respect to any obligation to Bank (other that this Note); or
(c) Company shall fail to pay any amount relating to any other recourse
indebtedness in excess of $10,000,000.00 for borrowed money or other pecuniary
obligation (including any contingent such obligation) or an event or condition
shall occur or exist which give the holder of any such indebtedness or
obligation the right or option to accelerate the maturity thereof.
(d) Company shall commence any bankruptcy, reorganization or similar case
or proceeding relating to it or its property under the law of any
jurisdiction, or a trustee or receiver shall be appointed for itself or any
substantial part of its property;
(e) any involuntary bankruptcy, reorganization or similar case proceeding
under the law of any jurisdiction shall have been commenced against Company or
any substantial part of its property and such case or proceeding shall not
have been dismissed within 60 days, or Company shall have consented to such
case or proceeding; or
(f) Company shall admit in writing its inability to pay its debts as they
become due.
Upon the happening of any Event of Default specified in paragraphs (d),
(e) or (f) above, automatically the Loans evidenced by this Note (with accrued
interest thereon) shall immediately become due and payable, and upon the
happening of an Event of Default specified in paragraphs (a), (b) or (c)
above, Bank may by notice to Company, declare the Loans evidenced by this Note
(with accrued interest thereon) shall be due and payable, whereupon the same
shall immediately become due and payable. Except as expressly provided above,
presentment, demand, protest, notice of intent to accelerate, acceleration and
all other notices of any kind are hereby expressly waived.
The Company hereby agrees to pay on demand, in addition to unpaid
principal and interest, all Bank's costs and expenses incurred in attempting
or effecting collection hereunder, including the reasonable fees and expenses
of counsel (which may include, to the extent permitted by applicable law,
allocated costs of in-house counsel), whether or not suit is instituted.
This Note is executed and delivered by Company to evidence Loans which may be
made by Bank to Company not to exceed $20,000,000.00 COMPANY UNDERSTANDS THAT
BANK HAS NO OBLIGATION TO MAKE ANY LOAN TO COMPANY UNDER THIS NOTE.
All Loans evidenced by this Note are and will be for business and commercial
purposes and no Loan will be used for the purpose of purchasing or carrying
any margin stock as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the "Board").
-----
Chapter 15 of the Texas Credit Code does not apply to this Note or to any
Loan evidenced by this Note. This Note shall be governed by the laws of the
State of Texas and the laws of the United States as applicable.
Bank shall, and is hereby authorized by Company, to record in its records
the date, amount, interest rate and due date of each Loan as well as the date
and amount of each payment by the undersigned in respect thereof. Payments
may be applied to accrued interest or principal in whatever order Bank
chooses.
Loans evidenced by this Note may not be prepaid. In the event any such
prepayment occurs, Company shall indemnify Bank against any loss, liability,
damage, cost or expense which Bank may sustain or incur as a consequence
thereof, including without limitation any loss liability, damage, cost or
expense sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain such Loan or any part thereof. Bank
shall provide to Company a written statement explaining the amount of any such
loss or expense, which statement shall be conclusive absent manifest error.
No waiver of any default shall be deemed to be a waiver of any other
default. No failure to exercise or delay in exercising any right or power
under this Note shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power preclude any further or other
exercise thereof or the exercise of any other right or poser. No amendment,
modification or waiver of this Note shall be effective unless the same is in
writing and signed by the person against whom such amendment, modification or
waiver is sought to be enforced. No notice to or demand on any person shall
entitle any a person to any other or further notice or demand in similar of
other circumstances.
This Note shall be binding upon the successors and assigns of Company and
inure to the benefit of Bank, its successors, endorsees and assigns
(furthermore, Bank may assign or pledge this Note or any interest therein to
any Federal Reserve Bank). If any term or provision of this Note shall be
held invalid, illegal or unenforceable the validity of all other terms and
provisions will not be affected.
This note renews and extends that certain Master Promissory Note dated
December 30, 1996, in the original principal sum of $20,000,000.00, executed
by this Company, payable to the order of the Bank.
THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NOT UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
WEINGARTEN REALTY INVESTORS
By:________________________________
Name:______________________________
Title:_____________________________
Weingarten Realty Investors (the "trust") is an unincorporated trust organized
under the Texas Real Estate Investment Trust Act. Neither the shareholders of
the trust nor its trust managers, officers, employees or other agents are
personally, corporately or individually liable for any debt, act omission or
obligation of the trust, and all persons having claims of any king against the
trust must look solely to the property of the trust for the enforcement of
their rights.
(The Bank's signature is provided as its
acknowledgment of the above as the final
written agreement between the parties.)
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:________________________________________
Name:______________________________________
Title:_____________________________________
FOURTH BONDS RENEWAL AN EXTENSION AGREEMENT
-------------------------------------------
This FOURTH BONDS RENEWAL AND EXTENSION AGREEMENT (this "Fourth Renewal")
is executed this 1lth day of February, 1998 (the "Execution Date"), but
effective as of December 28, 1997, by and between WRI HOLDINGS, INC.
("Maker"), a Texas corporation, and WEINGARTEN REALTY INVESTORS ("Payee"), a
Texas real estate investment trust.
W I T N E S S E T H:
--------------------
WHEREAS, the Payee is the sole legal owner and holder of those certain
16% Mortgage Bonds Due 1994, dated December 28, 1984 (the "Original Bonds"),
in the face principal sum of THREE MILLION ONE HUNDRED FIFTY THOUSAND and
10/100 DOLLARS ($3,150,000.00) executed by Maker payable to the order of
Weingarten Realty, Inc. ("WRI"), a Texas corporation, payable as therein
provided, which Bonds are secured by
(i) that certain Trust Indenture, dated December 18, 1984 (the "Original
Trust Indenture") executed by Maker and Texas Commerce Bank National
Association (the "Trustee"), a national banking association;
(ii) that certain River Pointe Negative Pledge Agreement, dated December
28, 1984 (the "Original Negative Pledge") executed by Maker, WRI, and Plaza
Construction, Inc. ("Plaza"); and
(iii) such other documents, instruments, and agreements executed in
connection with, as security for, or as evidence of the obligations evidenced
by the Original Bonds (collectively, the Original Trust Indenture, the
Original Negative Pledge, and such other documents, instruments, and
agreements being herein called the "Original Security Instruments"); and
WHEREAS, WRI assigned and conveyed all of its property, both real and
personal, including, without limitation, the Original Bonds, to Payee, as
evidenced by that certain Master Deed and General Conveyance dated April 5,
1988 from WRI to Payee; and
WHEREAS, effective as of December 28, 1994, Maker and Payee renewed and
extended the maturity date of the Original Bonds to December 28, 1995 pursuant
to the terms of that certain Bonds Renewal and Extension Agreement, dated as
of December 28, 1994 ("First Renewal"); and
WHEREAS, effective as of December 28, 1995, Maker and Payee renewed and
extended the maturity date of the Original Bonds to December 28, 1996 pursuant
to the terms of that certain Bonds
Second Renewal and Extension Agreement dated as of December 28, 1995 ("Second
Renewal"); and
WHEREAS, effective as of December 28, 1996, Maker and Payee renewed and
extended the maturity date of the Original Bonds to December 28, 1997 pursuant
to the terms of that certain Bonds Third Renewal and Extension Agreement,
dated as of December 28, 1996 ("Third Renewal") (the Original Bonds, Original
Negative Pledge, and Original Security Instruments, each as modified, renewed,
and extended by the First Renewal, Second Renewal, and Third Renewal, being
herein called the "Bonds," the "Negative Pledge," and the "Security
Instruments," respectively); and
WHEREAS, Maker and Payee amended and supplemented the terms of the
Original Trust Indenture to reflect the renewal and extension of the Bonds, as
provided in the First Renewal, Second Renewal, and Third Renewal, such
amendments being evidenced by (i) that certain Supplemental Trust Indenture
dated as of December 28, 1994 between Maker, Trustee, and Payee, (ii) that
certain second Supplemental Trust Indenture dated as of December 28, 1995,
between Maker, Trustee and Payee, (iii) that certain Third Supplemental Trust
Indenture dated as of December 28, 1996, between Maker, Trustee and Payee; and
WHEREAS, of even date herewith, Maker, the Trustee (now known as Chase
Bank of Texas, N.A.) and Payee have further amended and supplemented the terms
of the Trust Indenture pursuant to that certain Fourth Supplemental Trust
Indenture (the Original Trust Indenture, as amended and supplemented by the
Supplemental Trust Indenture, the Second Supplemental Trust Indenture, the
Third Supplemental Trust Indenture, and the Fourth Supplemental Trust
Indenture, being called the "Trust Indentures"); and
WHEREAS, the Bonds mature on December 28, 1997, and Maker and Payee now
propose to renew and extend the maturity date of the Bonds and to continue the
liens and priority of the Security Instruments as security for the payment of
the Bonds, as set forth more particularly herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and For other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Maker and Payee hereby
agree as follows:
1. The Maker reaffirms its promise to pay to the order of the Payee,
at 2600 Citadel Plaza Drive, Suite 300, Houston, Harris County, Texas 77008,
the principal balance due and owing on the Bonds, with interest accrued
thereon, as provided in the Bonds, except that the maturity date of the Bonds
is hereby renewed and extended to December 28, 1998, at which time the unpaid
principal balance of the Bonds, plus all accrued and unpaid interest thereon,
shall be due and payable.
All liens, pledges, and security interests securing the payment of the
Bonds, including but not limited to, the liens, pledges and security
interests granted in the Trust Indenture and the Negative Pledge, are hereby
renewed, extended and carried forward to secure payment of the Bonds, as
hereby amended, and the Security Instruments are hereby amended to reflect
that the maturity date of the Bonds is December 28, 1998.
2. Maker hereby represents and warrants to payee that (a) Maker is
the sole legal and beneficial owner of the Trust Estate (a- that term is
defined in the Trust Indenture); (b) Maker has the full power and authority to
make the agreements contained in this Fourth Renewal without joinder and
consent of any other party; and (c) the execution, delivery and performance of
this Fourth Renewal will not contravene or constitute an event which itself or
which with the passing of time or giving of notice or both would constitute a
default under any trust deed, deed of trust, loan agreement, indenture or
other agreement to which Maker is a party or by which Maker or any of its
property is bound. Maker hereby agrees to indemnify and hold harmless payee
against any loss, claim, damage, liability or expense (including, without
limitation, attorneys' fees) incurred as a result of any representation or
warranty made by Maker in this Section 1 proving to be untrue in any material
respect.
3. To the extent that the Bonds are inconsistent with the terms of
this Fourth Renewal, the Bonds are hereby modified and amended to conform with
this Fourth Renewal. Except as modified, renewed and extended by this Fourth
Renewal, the Bonds remain unchanged and continue unabated and in full force
and effect as the valid and binding obligation of the Maker.
4. In conjunction with the extension and renewal of the Bonds and the
Security Interests, Maker hereby extends and renews the liens, pledges, and
security interests as created and granted in the Security Instruments until
the indebtedness secured thereby, as so extended and renewed, has bean Fully
paid, and agrees that such extension and renewal shall, in no manner, affect
or impair the Bonds or the liens, pledges, and security interests securing
same, and that said liens, pledges, and security interests shall not in any
manner be waived. The purpose of this Fourth Renewal is simply to extend the
time of payment of the obligation evidenced by the Bonds and any indebtedness
secured by the Security Instruments, as modified by this Fourth Renewal, and
to carry forward all liens, pledges, and security interests securing the care,
which are acknowledged by Maker to be valid and subsisting.
5. Maker covenants and warrants that the payee is not in default under the
Bonds or the Security Instruments, or this Fourth Renewal (collectively
referred to as the "Loan Instruments"), that there are no defenses,
counterclaims or offsets to such Loan Instruments; and that all of the
provisions of the Loan Instruments, as amended hereby, are in full force and
effect.
6. Maker agrees to pay all costs incurred in connection with the
execution and consummation of this Fourth Renewal, including but not limited
to, all recording costs and the reasonable fees and expenses of Payee's
counsel.
7. If any covenant, condition, or provision herein contained
is held to be invalid by final judgment of any court of competent
jurisdiction, the invalidity of such covenant, condition, or provision shall
not in any way affect any other covenant, condition, or provision herein
contained.
8. Payee is the sole owner and holder of the Bonds. Maker and Payee
acknowledge and agree that the outstanding principal balance of the Bonds as
of December 28, 1997 is $3,150,000.00.
9. Payee is an unincorporated trust organized under the Texas Peal
Estate Investment Trust Act. Neither the shareholders of Payee, nor its Trust
Managers, officers, employees, or other agents shall be personally,
corporately, or individually liable, in any manner whatsoever, for any debt,
act, omission, or obligation of Payee, and all persons having claims or any
kind whatsoever against Payee shall look solely to the property of
Payee for the enforcement of their rights (whether monetary or non-monetary)
against Payee.
EXECUTED this day and year first above written, but effective for all
purposes as of December 28, 1997.
WRI HOLDINGS, INC., a Texas corporation
By:____________________________________
Martin Debrovner, Vice President
"Maker"
WEINGARTEN REALTY INVESTORS, a Texas real estate investment trust
By:____________________________________
Bill Robertson, Jr.
Executive Vice President
"Payee"
FOURTH SUPPLEMENTAL TRUST INDENTURE
-----------------------------------
This FOURTH SUPPLEMENTAL INDENTURE ("Fourth Supplemental Indenture") is
executed this 11th day of February, 1998 (the "Execution Date") but effective
as of December 28, 1997, by and between WRI HOLDINGS, INC. (the "Company"). A
Texas corporation, and CHASE BANK OF TEXAS, N.A. (formerly known as TEXAS
COMMERCE BANK NATIONAL ASSOCIATION) (the "Trustee"), a national banking
association.
WITNESSETH:
----------
WHEREAS, the Company and the Trustee executed that certain Trust
Indenture dated December 28, 1984 ("the Original Trust Indenture") to secure
the performance of the Company under the terms of that certain 16% Mortgage
Bonds Due 1994 (the "Original Bonds") executed by the Company payable to the
order of Weingarten Realty, Inc. ("WRI") dated December 28, 1984 in the face
principal amount of THREE MILLION ONE HUNDRED FIFTY THOUSAND AND NO/100
DOLLARS ($3,150,000.00), payable as therein provided; and
WHEREAS, WRI assigned and conveyed all of its property, both real and
personal, including, without limitation, the Original Bonds, to Weingarten
Realty Investors ("Weingarten"), a Texas real estate investment trust, as
evidenced by that certain Master Deed and General Conveyance dated April 5,
1988, from WRI to Weingarten; and
WHEREAS, effective as of December 28, 1994, the Company and Weingarten
renewed and extended the maturity date of the Original Bonds, to December 28,
1995 pursuant to the terms of that certain Bonds Renewal and Extension
Agreement dated as of December 28, 1994 ("First Renewal"); and
WHEREAS, effective as of December 28, 1995, the Company and Weingarten
renewed and extended the maturity date of the Original Bonds, to December 28,
1996 pursuant to the terms of that certain Bonds Renewal and Extension
Agreement dated as of December 28, 1995 ("Second Renewal"); and
WHEREAS, effective as of December 28, 1996, the Company and Weingarten
again renewed and extended the maturity date of the Original Bonds, to
December 28, 1997 pursuant to the terms of that certain Bonds Third Renewal
and Extension Agreement dated as of December 28, 1996 ("Third Renewal"); the
Original Bonds, as renewed and extended by the first renewal, Second Renewal,
and Third Renewal, being herein called the "Bonds"); and
and extension of the Bonds as provided in the First Renewal, Second Renewal,
and Third Renewal, such amendments being evidenced by (i) that certain
Supplemental Trust Indenture dated as of December 78, 1994 between the
Company, the Trustee and Weingarten, (ii) that certain Second Supplemental
Trust Indenture dated as of December 78, 1995, between the Company, the
Trustee, and Weingarten, and (iii) that certain Third Supplemental Trust
Indenture dated as of December 28, 1996 between the Company, the Trustee, and
Weingarten (the Original Trust Indenture, as amended and supplemented by the
Supplemental Trust Indenture, Second Supplemental Trust Indenture, and
Third Supplemental Trust Indenture, being herein called the "Trust
Indenture"); and
WHEREAS, the Bonds mature on December 28, 1997, and the Company and
Weingarten have agreed to renew and extend the maturity date of the Bonds and
to continue the liens, pledges, and security interests securing the payment of
the Bonds, as set forth in that certain Fourth Bonds Renewal and Extension
Agreement ("Fourth Renewal") dated effective as of December 28, 1997, executed
by the Company and Weingarten, Weingarten being the sole legal owner and
holder of the Bonds; and
WHEREAS, the Company and the Trustee desire to amend and supplement the
Trust Indenture to reflect the renewal and extension of the maturity date of
the Bonds to December 28, 1998.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Company and the Trustee
hereby agree as follows:
1. Except as otherwise provided in this Fourth Supplemental
Indenture, all capitalized terms used in this Fourth Supplemental Indenture
shall have the meanings ascribed to those terms in the Trust Indenture.
1. The Company and the Trustee acknowledge that the Company has
re-affirmed its promise to pay to the order of the Payee, at 2600 Citadel
Plaza Drive, Suite 300, Houston, Harris County, Texas 77008, the principal
balance due and owing on the Bonds, with interest accrued thereon, as provided
in the Bonds, except that the maturity date of the Bonds has been renewed and
extended to December 28, 1998, at which time the unpaid principal balance of
the Bonds, plus all accrued and unpaid interest thereon, shall be due and
payable.
All liens, pledges, and security interests securing the Bonds granted under
the terms of the Trust Indenture, are hereby renewed, extended and carried
forward to secure payment of the Bonds, as hereby amended, and the Trust
Indenture is hereby amended to reflect that the maturity date of the Bonds is
December 28, 1998.
3. The Company hereby represents and warrants to the Trustee that (a)
the Company is the sole legal and beneficial owner of the Trust Estate; (b)
the Company has the full power and authority to make the agreements contained
in this Fourth Supplemental Indenture without joinder and consent of any other
party; and (c) the execution, delivery and performance of this Fourth
Supplemental Indenture will not contravene or constitute an event which itself
or which with the passing of time or giving of notice or both would constitute
a default under any trust deed, deed of trust, loan agreement, indenture or
other agreement to which the Company is a party or by which the Company or any
of its property is bound. The Company hereby agrees to indemnify and hold
harmless the Trustee against any loss, claim, damage, liability or expense
(including, without limitation, attorneys' fees) incurred as a result of any
representation or warranty made by the Company in this Section 3 proving to be
untrue in any material respect.
4. To the extent that the Trust Indenture is inconsistent with the
terms of this Fourth Supplemental Indenture, the Trust Indenture is hereby
modified and amended to conform with this Fourth Supplemental Trust Indenture.
Except as modified, renewed and supplemented by this Fourth Supplemental
Indenture, the Trust Indenture remains unchanged and continues unabated and in
full force and effect as the valid and binding obligation of the Company.
5. The Company covenants and warrants that the Trustee is not in
default under the Trust Indenture, as supplemented by this Fourth Supplemental
Indenture (collectively referred to as the "Indenture"), that there are no
defenses, counterclaims or offsets to the Bonds or the Indenture, and that all
of the provisions of the Bonds and the Indenture are in full force and effect.
6. The Company agrees to pay all costs incurred in connection
with the execution and consummation of this Fourth Supplemental Indenture,
including but not limited to, all recording costs and the reasonable fees and
expenses of Trustee's counsel.
7. If any covenant, condition, or provision herein contained is held
to be invalid by final judgment of any court of competent jurisdiction, the
invalidity of such covenant, condition, or provision shall not in any way
affect any other covenant, condition, or provision herein contained.
8. The Company acknowledges and agrees that the outstanding principal
balance of the Funds as of December 28, 1997 is $3,150,000.00.
9. Weingarten joins herein to consent to the amendment and supplement
of the terms of the Trust Indenture, as set forth in this Fourth Supplemental
Indenture and to acknowledge and represent that Weingarten is the sole owner
and holder of the Bonds. Weingarten is an unincorporated trust organized under
the Texas Real Estate Investment Trust Act. Neither the shareholders of
Weingarten, nor its Trust Managers, Officers, employees, or other agents shall
be personally, corporately, or individually liable, in any manner whatsoever,
for any debt, act omission, or obligation of Weingarten, and all persons
having claims of any kind whatsoever against Weingarten shall look solely the
property of Weingarten for the enforcement of their rights (whether monetary
or non-monetary) against Weingarten.
EXECUTED this day and year first above written, but effective for all
purposes as of December 28, 1997.
WRI HOLDINGS, INC., A TEXAS CORPORATION
By:______________________________________________
Martin Debrovner, Vice President
"Company"
CHASE BANK OF TEXAS, N.A.
By:______________________________________________
Assistant Vice President & Trust Officer
"Trustee"
WEINGARTEN REALTY INVESTORS
By:______________________________________________
Bill Robertson, Jr.
Executive Vice President
"Payee"
EXHIBIT 12.1
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
COMPUTATION OF FIXED CHARGES RATIOS
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges and of funds from operations before interest expense
to fixed charges for the periods shown:
YEARS ENDED DECEMBER 31,
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Ratio of Earnings to Fixed Charges . . . . . . 2.70x 3.17x 3.05x
Ratio of Funds from Operations Before Interest
Expense to Fixed Charges . . . . . . . . . . 3.77x 4.28x 4.48x
</TABLE>
The ratios of earnings to fixed charges were computed by dividing
earnings by fixed charges. The ratios of funds from operations before
interest expense to fixed charges were computed by dividing funds from
operations before interest expense by fixed charges. For these purposes,
earnings is defined as income before extraordinary charge plus fixed charges
(excluding interest costs capitalized). Funds from operations before interest
expense is defined as net income plus depreciation and amortization of real
estate assets and extraordinary charge, less gain (loss) on sales of property
and securities plus interest on indebtedness. Fixed charges consist of
interest on indebtedness (including interest costs capitalized), amortization
of debt costs and the portion of rent expense representing an interest factor.
Note: In accordance with the NAREIT definition of funds from operations
adopted during the year ended December 31, 1995, debt amortization
is not included beginning with that year.
EXHIBIT 21.1
<TABLE>
<CAPTION>
WEINGARTEN REALTY INVESTORS
LIST OF SUBSIDIARIES OF THE REGISTRANT
STATE OF INCORPORATION
----------------------
SUBSIDIARY
- ------------------------------------
<S> <C>
Weingarten Realty Management Company Texas
Weingarten/Nostat, Inc.. . . . . . . Texas
Weingarten/Lufkin, Inc.. . . . . . . Texas
WRI/Post Oak, Inc. . . . . . . . . . Texas
A.T.D.N.L., Inc. . . . . . . . . . . Texas
WRI/Central Plaza, Inc.. . . . . . . Texas
Weingarten Properties Trust. . . . . N/A
Main/O.S.T., Ltd.. . . . . . . . . . N/A
Phelan Boulevard Venture . . . . . . N/A
Northwest Hollister Venture. . . . . N/A
WRI/Interpak Venture . . . . . . . . N/A
East Town Lake Charles Co. . . . . . N/A
Alabama-Shepherd Shopping Center . . N/A
Sheldon Center, Ltd. . . . . . . . . N/A
Jacinto City, Ltd. . . . . . . . . . N/A
Weingarten/Finger Venture. . . . . . N/A
Rosenberg, Ltd.. . . . . . . . . . . N/A
Eastex Venture . . . . . . . . . . . N/A
GJR/Weingarten River Pointe Venture. N/A
GJR/Weingarten Little York Venture . N/A
WRI/Palans Joint Venture . . . . . . N/A
South Loop Long Wayside Company. . . N/A
Lisbon St. Shopping Trust. . . . . . N/A
WRI/Crosby . . . . . . . . . . . . . N/A
WRI/Dickinson. . . . . . . . . . . . N/A
Market at Town Center-Sugarland. . . N/A
Lincoln Place Limited Partnership. . N/A
</TABLE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements
No. 33-20964, No. 33-24364, No. 33-41604, No. 33-52473, No. 33-54402 and No.
33-54404 on Form S-8, in Post-Effective Amendment No. 1 to Registration
Statement No. 33-25581 on Form S-8 and in Registration Statements No.
33-57659, No. 33-54529 and No. 333-12179 on Form S-3 of our report dated
February 20, 1998 except for Note 13, as to which the date is February 24,
1998, appearing in this Annual Report on Form 10-K of Weingarten Realty
Investors for the year ended December 31, 1997.
DELOITTE & TOUCHE LLP
Houston, Texas
March 4,1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
WEINGARTEN REALTY INVESTORS' ANNUAL REPORT FOR THE PERIOD ENDED
DECEMBER 31, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> DEC-01-1997
<PERIOD-END> DEC-30-1997
<CASH> 2,754
<SECURITIES> 12,345
<RECEIVABLES> 15,583
<ALLOWANCES> 1,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,018,758
<DEPRECIATION> 262,511
<TOTAL-ASSETS> 946,793
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 800
<OTHER-SE> 389,186
<TOTAL-LIABILITY-AND-EQUITY> 946,793
<SALES> 0
<TOTAL-REVENUES> 174,512
<CGS> 0
<TOTAL-COSTS> 54,888
<OTHER-EXPENSES> 37,976
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,009
<INCOME-PRETAX> 54,966
<INCOME-TAX> 0
<INCOME-CONTINUING> 54,966
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,966
<EPS-PRIMARY> 2.06
<EPS-DILUTED> 2.06
</TABLE>
