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