10-K 1 doc1.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002 [ ] 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 WEINGARTEN REALTY INVESTORS (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) TEXAS 74-1464203 (State or other jurisdiction of (IRS 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) (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, $0.03 par value New York Stock Exchange Series A Cumulative Redeemable Preferred Shares, $0.03 par value New York Stock Exchange Series C Cumulative Redeemable Preferred Shares, $0.03 par value New York Stock 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]. Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). YES [X] NO [ ]. 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 June 30, 2002 was approximately $1,839,751,169. As of June 30, 2002 there were 51,970,372 common 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 April 25, 2003 are incorporated by reference in Part III.

TABLE OF CONTENTS ITEM NO. PAGE NO. -------- -------- PART I 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 16 4. Submission of Matters to a Vote of Shareholders . . . . . . . . 16 PART II 5. Market for Registrant's Common Shares of Beneficial Interest and Related Shareholder Matters. . . . . . . . . . . 17 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . 18 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . 19 7A. Quantitative and Qualitative Disclosures About Market Risk. . . 25 8. Financial Statements and Supplementary Data . . . . . . . . . . 26 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . 47 PART III 10. Trust Managers and Executive Officers of the Registrant . . . . 48 11. Executive Compensation. . . . . . . . . . . . . . . . . . . . . 48 12. Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . . . . . . . . . . . . . . . . 48 13. Certain Relationships and Related Transactions. . . . . . . . . 48 14. Controls and Procedures . . . . . . . . . . . . . . . . . . . . 48 PART IV 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K 49

PART I ITEM 1. BUSINESS General. Weingarten Realty Investors, a real estate investment 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. WRI is self-advised and self-managed. As of December 31, 2002, we owned or operated under long-term leases interests in 302 developed income-producing real estate projects. We owned 245 shopping centers located in the Houston metropolitan area and in other parts of Texas and in California, Louisiana, Arizona, Florida, Nevada, North Carolina, Tennessee, Arkansas, New Mexico, Kansas, Colorado, Oklahoma, Missouri, Illinois, Mississippi and Maine. We also owned 56 industrial projects located in Tennessee, Nevada, Georgia, Florida and Houston, Austin and Dallas, Texas. Additionally, we owned one office building, which serves, in part, as WRI's headquarters. Our interests in these projects aggregated approximately 38.0 million square feet of building area and 147.4 million square feet of land area. We also owned interests in 41 parcels of unimproved land under development or held for future development that aggregated approximately 12.9 million square feet. We currently employ 292 persons and our principal executive offices are located at 2600 Citadel Plaza Drive, Houston, Texas 77008, and our phone number is (713) 866-6000. Investment and Operating Strategy. WRI's investment strategy is to increase cash flow and the value of its portfolio through intensive, hands-on management of its existing portfolio of assets, selective remerchandising and renovation of properties and the acquisition and development of income-producing real estate assets where the returns on such investments exceed our blended long-term cost of capital. We will also pursue the disposition of selective non-core assets as circumstances warrant, and we believe the sales proceeds can be effectively redeployed into assets with higher growth potential. At December 31, 2002, neighborhood and community shopping centers generated 89.6% of total revenue, industrial properties accounted for 9.9% and the remainder relates to the office building. We expect to continue to focus the future growth of the portfolio in neighborhood and community centers and bulk and office/service industrial properties. We expect this external growth to occur in the markets in which we currently operate as well as other markets in the southern half of the United States. While we do not anticipate investment in other classes of real estate such as multi-family or office assets, we remain open to opportunistic uses of our undeveloped land. WRI may either purchase or lease income-producing properties in the future, and may also participate with other entities in property ownership through partnerships, joint ventures or similar types of co-ownership. Equity investments may be subject to existing mortgage financing and other indebtedness or such financing or indebtedness may be incurred in connection with acquiring such investments. WRI may invest in mortgages; however, we currently have only invested in first mortgages to joint ventures or partnerships in which we own an equity interest. We may also invest in securities of other issuers for the purpose, among others, of exercising control over such entities, subject to the gross income and asset tests necessary for REIT qualification. Our operating philosophy is based on intensive hands-on management and leasing of our properties. In acquiring and developing properties, we attempt to accumulate enough properties in a geographic area to allow for the establishment of a regional office, which enables us to obtain in-depth knowledge of the market from a leasing perspective and to have easy access to the property and our tenants from a management viewpoint. PAGE 1 Diversification from both a geographic and tenancy perspective is a critical component of our operating strategy. While over 55% of our properties are located in the State of Texas, we continue to expand our holdings outside the state. With respect to tenant diversification, our two largest merchants, Kroger and Safeway, accounted for 3.5% and 2.8%, respectively, of our total rental revenues as of December 31, 2002. No other tenant accounted for more than 1.4% of our total rental revenues. We finance the growth and working capital needs of the company in a conservative manner. With a credit rating of A/A3 from Standard & Poors and Moody's Investor Services, respectively, we have the highest unsecured credit rating of any public REIT. We intend to maintain a conservative approach to managing our balance sheet, which, in turn, gives us many options to raising debt or equity capital when needed. At December 31, 2002, our fixed charge coverage ratio was 2.7 to 1 and our debt to total market capitalization was 37%. WRI's policies with respect to the investment and operating philosophies discussed above are reviewed by our Board of Trust Managers periodically and may be modified without a vote of our shareholders. Location of Properties. Historically, WRI has emphasized investments in properties located primarily in the Houston area. Since 1987, we began actively acquiring properties outside Houston. Of our 343 properties that were owned or operated under long-term leases as of December 31, 2002, 90 of our 302 developed properties and 12 of our 41 parcels of unimproved land were located in the Houston metropolitan area. In addition to these properties, we owned 86 developed properties and ten parcels of unimproved land located in other parts of Texas. Because of our investments in the Houston area, as well as in other parts of Texas, the Houston and Texas economies affect, to a significant degree, the business and operations of WRI. Although the economies of Houston and Texas slowed in 2002, many indicators show that we continue to outperform the national averages. Many of our operating areas throughout the southern United States are also continuing to perform as such. The Houston economy is highly diversified, with over 50% of the workforce employed in sectors that are effected marginally, if at all, by changing energy prices. In 2002, the unemployment rates in both Texas and Houston were below the US average and inflation was less pronounced in Houston and Texas, compared to the national average. Houston's economy is expected to regain momentum in 2003 as the national and global economies rebound. Any downturn in the Houston or Texas economies could adversely affect us, however, supermarkets and discount stores, which generally anchor our centers providing basic necessity-type items, tend to be less affected by economic changes. Competition. WRI is among the five largest publicly-held owners and operators of neighborhood and community shopping centers in the nation based on revenues, number of properties and total market capitalization. There are numerous other developers and real estate companies (both public and private), financial institutions and other investors engaged in the development, acquisition and operation of shopping centers and commercial property which compete with us in our 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 WRI and its competitors develop, acquire and manage. We believe that the principal competitive factors in attracting tenants in our market areas are location, price, anchor tenants and maintenance of properties. We also believe that our competitive advantages include the favorable locations of our properties, our ability to provide a retailer with multiple locations with anchor tenants and the practice of continuous maintenance and renovation of our properties. Financial Information. Additional financial information concerning WRI is included in the Consolidated Financial Statements located on pages 27 through 47 herein. PAGE 2 ITEM 2. PROPERTIES At December 31, 2002, WRI's real estate properties consisted of 343 locations in nineteen states. A complete listing of these properties, including the name, location, building area and land area (in square feet), as applicable, is set forth below:

SHOPPING CENTERS Building Name and Location Area Land Area ------------------------------------------------------------------------- ----------- ----------- HOUSTON AND HARRIS COUNTY, TOTAL. . . . . . . . . . . . . . . . . . . . . 7,008,000 26,926,000 Alabama-Shepherd, S. Shepherd at W. Alabama . . . . . . . . . . . . . . . 28,000 * 88,000 * Almeda Road, Almeda at Southmore. . . . . . . . . . . . . . . . . . . . . 17,000 37,000 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 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 Champions Village, F.M. 1960 at Champions Forest Dr.. . . . . . . . . . . 408,000 1,391,000 Copperfield Village, Hwy. 6 at F.M. 529 . . . . . . . . . . . . . . . . . 163,000 712,000 Crestview, Bissonnet at Wilcrest. . . . . . . . . . . . . . . . . . . . . 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. . . . . . . . . . . . . . . . . . . . 83,000 318,000 Cypress Pointe, F.M. 1960 at Cypress Station. . . . . . . . . . . . . . . 191,000 737,000 Cypress Village, Louetta at Grant Road. . . . . . . . . . . . . . . . . . 25,000 134,000 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 . . . . . . . . . . . . 303,000 1,269,000 Fondren/West Airport, Fondren at W. Airport . . . . . . . . . . . . . . . 62,000 223,000 Glenbrook Square, Telephone Road. . . . . . . . . . . . . . . . . . . . . 76,000 320,000 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 . . . . . . . . . . . . 178,000 819,000 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 Chestnut 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. . . . . . . . . . . . . . . . 118,000 483,000 Lyons Avenue, Lyons at Shotwell . . . . . . . . . . . . . . . . . . . . . 68,000 179,000 Market at Westchase, Westheimer at Wilcrest . . . . . . . . . . . . . . . 87,000 333,000 Miracle Corners, S. Shaver at Southmore . . . . . . . . . . . . . . . . . 86,000 386,000 Northbrook, Northwest Fwy. at W. 34th . . . . . . . . . . . . . . . . . . 175,000 656,000 North Main Square, Pecore at N. Main. . . . . . . . . . . . . . . . . . . 18,000 64,000 North Oaks, F.M. 1960 at Veterans Memorial. . . . . . . . . . . . . . . . 322,000 1,246,000

Table continued on next page PAGE 3

Building Name and Location Area Land Area ------------------------------------------------------------------------- ----------- ----------- HOUSTON AND HARRIS COUNTY, (CONT'D.) 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 * Oak Forest, W. 43rd at Oak Forest . . . . . . . . . . . . . . . . . . . . 164,000 541,000 Orchard Green, Gulfton at Renwick . . . . . . . . . . . . . . . . . . . . 74,000 273,000 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. . . . . . . . . . . . . . . . . . . 108,000 475,000 Richmond Square, Richmond Ave. at W. Loop 610 . . . . . . . . . . . . . . 33,000 135,000 River Oaks, East, W. Gray at Woodhead . . . . . . . . . . . . . . . . . . 71,000 206,000 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%). . . . . . . . 185,000 * 803,000 * Southgate, W. Fuqua at Hiram Clark. . . . . . . . . . . . . . . . . . . . 126,000 533,000 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 * 158,000 * 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 The Village Arcade, University at Kirby . . . . . . . . . . . . . . . . . 191,000 413,000 West Junction, Hwy. 6 at Keith 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 TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL . . . . . . . . . . . . . . 6,670,000 28,812,000 McDermott Commons, McDermott at Custer Rd., Allen . . . . . . . . . . . . 56,000 328,000 Bell Plaza, 45th Ave. at Bell St., Amarillo . . . . . . . . . . . . . . . 129,000 682,000 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 Atkinsen St., Amarillo. . . . . . . . . . 74,000 275,000 Wolflin Village, Wolflin Ave. at Georgia St., Amarillo. . . . . . . . . . 193,000 421,000 Brodie Oaks, South Lamar Blvd. at Loop 360, Austin. . . . . . . . . . . . 245,000 1,050,000 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 * Phelan, Phelan at 23rd St, Beaumont . . . . . . . . . . . . . . . . . . . 12,000 63,000 Southgate, Calder Ave. at 6th St., Beaumont . . . . . . . . . . . . . . . 34,000 118,000

Table continued on next page PAGE 4

Building Name and Location Area Land Area -------------------------------------------------------------------------- ----------- ----------- TEXAS (EXCLUDING HOUSTON & HARRIS CO.), (CONT'D.) Westmont, Dowlen at Phelan, Beaumont . . . . . . . . . . . . . . . . . . . 98,000 507,000 Lone Star Pavilions, Texas at Lincoln Ave., College Station (30%). . . . . 32,000 * 132,000 * Parkway Square, Southwest Pkwy. at Texas Ave., College Station . . . . . . 158,000 684,000 Montgomery Plaza, Loop 336 West at I-45, Conroe. . . . . . . . . . . . . . 317,000 1,179,000 River Pointe, I-45 at Loop 336, Conroe . . . . . . . . . . . . . . . . . . 46,000 329,000 Moore Plaza, S. Padre Island Dr. at Staples, Corpus Christi. . . . . . . . 355,000 1,492,000 Portairs, Ayers St. at Horne Rd., Corpus Christi . . . . . . . . . . . . . 118,000 416,000 Dickinson, I-45 at F.M. 517, Dickinson (72%) . . . . . . . . . . . . . . . 55,000 * 225,000 * Coronado Hills, Mesa at Balboa, El Paso. . . . . . . . . . . . . . . . . . 127,000 545,000 Southcliff, I-20 at Grandbury Rd., Ft. Worth . . . . . . . . . . . . . . . 116,000 568,000 Broadway, Broadway at 59th St., Galveston (77%). . . . . . . . . . . . . . 58,000 * 170,000 * Galveston Place, Central City Blvd. at 61st St., Galveston . . . . . . . . 210,000 828,000 Food King Place, 25th St. at Avenue P, Galveston . . . . . . . . . . . . . 28,000 78,000 Killeen Marketplace, 3200 E. Central Texas Expressway, Killeen . . . . . . 115,000 512,000 Cedar Bayou, Bayou Rd., La Marque. . . . . . . . . . . . . . . . . . . . . 15,000 51,000 League City Plaza, I-45 at F.M. 518, League City . . . . . . . . . . . . . 112,000 680,000 Caprock Center, 50th at Boston Ave., Lubbock . . . . . . . . . . . . . . . 375,000 1,255,000 Central Plaza, Loop 289 at Slide Rd., Lubbock. . . . . . . . . . . . . . . 152,000 529,000 Town & Country, 4th St. at University, Lubbock . . . . . . . . . . . . . . 50,000 339,000 Angelina Village, Hwy. 59 at Loop 287, Lufkin. . . . . . . . . . . . . . . 257,000 1,835,000 Independence Plaza, Town East Blvd., Mesquite. . . . . . . . . . . . . . . 179,000 787,000 McKinney Centre, U.S. Hwy. 380 at U.S. Hwy. 75, McKinney . . . . . . . . . 34,000 199,000 Murphy Crossing, F.M. 544 at Murphy Rd., Murphy. . . . . . . . . . . . . . 33,000 158,000 University Park Plaza, University Dr. at E. Austin St., Nacogdoches. . . . 78,000 283,000 Custer Park, SWC Custer Road at Parker Road, Plano . . . . . . . . . . . . 116,000 376,000 Pitman Corners, Custer Rd. at West 15th, Plano . . . . . . . . . . . . . . 190,000 699,000 Gillham Circle, Gillham Circle at Thomas, Port Arthur. . . . . . . . . . . 33,000 94,000 Village, 9th Ave. at 25th St., Port Arthur (77%) . . . . . . . . . . . . . 40,000 * 187,000 * Porterwood, Eastex Fwy. at F.M. 1314, Porter . . . . . . . . . . . . . . . 99,000 487,000 Rockwall, I-30 at Market Center Street, Rockwall (30%) . . . . . . . . . . 63,000 * 280,000 * 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 Lake Pointe Market Center, Dalrock Rd. at Lakeview Parkway, Rowlett. . . . 33,000 206,000 Boswell Towne Center, Hwy. 287 at Bailey Boswell Rd., Saginaw. . . . . . . 11,000 63,000 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 Valley View, West Ave. at Blanco Rd., San Antonio. . . . . . . . . . . . . 90,000 341,000 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 . . . . . . . . . . . 97,000 335,000 Island Market Place, 6th St. at 9th Ave., Texas City . . . . . . . . . . . 27,000 90,000 Mainland, Hwy. 1765 at Hwy. 3, Texas City. . . . . . . . . . . . . . . . . 56,000 279,000 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 * 200,000 *

Table continued on next page PAGE 5

Building Name and Location Area Land Area ------------------------------------------------------------------------- ----------- ----------- TEXAS (EXCLUDING HOUSTON & HARRIS CO.), (CONT'D.) Crossroads, I-10 at N. Main, Vidor . . . . . . . . . . . . . . . . . . . . 116,000 516,000 Watauga Towne Center, Hwy. 377 at Bursey Rd., Watauga. . . . . . . . . . . 66,000 347,000 CALIFORNIA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,809,000 11,540,000 Centerwood Plaza, Lakewood Blvd. at Alondra Dr., Bellflower. . . . . . . . 71,000 333,000 Southampton Center, IH 780 at Southampton Rd., Benecia . . . . . . . . . . 162,000 596,000 580 Marketplace, E. Castro Valley at Hwy. 580, Castro Valley . . . . . . . 102,000 444,000 Chino Hills Marketplace, Chino Hills Pkwy. at Pipeline Ave, Chino Hills. . 320,000 1,187,000 Buena Vista Marketplace, Huntington Valley at Buena Vista St., Duarte. . . 91,000 322,000 Fremont Gateway Plaza, Paseo Padre Pkwy. at Walnut Ave., Fremont . . . . . 195,000 650,000 Hallmark Town Center, W. Cleveland Ave. at Stephanie Ln., Madera . . . . . 85,000 365,000 Menifee Town Center, Antelope Rd. at Newport Rd., Menifee. . . . . . . . . 83,000 658,000 Prospectors Plaza, Missouri Flat Rd. at U.S. Hwy. 50, Placerville. . . . . 228,000 873,000 Shasta Crossroads, Churn Creek Rd. at Dana Dr., Redding. . . . . . . . . . 121,000 520,000 Ralph's Redondo, Hawthorne Blvd. at 182nd St., Redondo Beach . . . . . . . 67,000 431,000 Arcade Square, Watt Ave. at Whitney Ave., Sacramento . . . . . . . . . . . 76,000 234,000 Discovery Plaza, W. El Camino Ave. at Truxel Rd., Sacramento . . . . . . . 93,000 417,000 Summerhill Plaza, Antelope Rd. at Lichen Dr., Sacramento . . . . . . . . . 134,000 704,000 Silver Creek Plaza, E. Capital Expwy. at Silver Creek Blvd., San Jose. . . 134,000 573,000 San Marcos Plaza, San Marcos Blvd. at Rancho Santa Fe Dr., San Marcos. . . 36,000 116,000 Stony Point Plaza, Stony Point Rd. at Hwy. 12, Santa Rosa. . . . . . . . . 199,000 619,000 Sunset Center, Sunset Avenue at Hwy. 12, Suisun City . . . . . . . . . . . 85,000 359,000 Creekside Center, Alamo Dr. at Nut Creek Rd., Vacaville. . . . . . . . . . 116,000 400,000 Westminster Center, Westminster Blvd. at Golden West St., Westminster. . . 411,000 1,739,000 FLORIDA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,382,000 10,395,000 Boca Lyons, Glades Rd. at Lyons Rd., Boca Raton. . . . . . . . . . . . . . 117,000 544,000 Sunset 19, U.S. Hwy. 19 at Sunset Pointe Rd., Clearwater . . . . . . . . . 273,000 1,078,000 Embassy Lakes, Sheraton St. at Hiatus Rd., Cooper City . . . . . . . . . . 132,000 618,000 Argyle Village, Blanding at Argyle Forest Blvd., Jacksonville. . . . . . . 305,000 1,329,000 Lake Washington Square, Wickham Rd. at Lake Washington Rd., Melbourne. . . 112,000 688,000 Northridge, E. Commercial Blvd. at Dixie Hwy., Oakland Park. . . . . . . . 234,000 901,000 Colonial Plaza, E. Colonial Dr. at Primrose Dr., Orlando . . . . . . . . . 488,000 2,009,000 Market at Southside, Michigan Ave. at Delaney Ave., Orlando. . . . . . . . 97,000 348,000 Pembroke Commons, University at Pines Blvd., Pembroke Pines. . . . . . . . 316,000 1,394,000 Vizcaya Square, Nob Hill Rd. at Cleary Blvd., Plantation . . . . . . . . . 108,000 521,000 Venice Pines Plaza, Center Rd. at Jacaranda Blvd., Venice. . . . . . . . . 97,000 565,000 Winter Park Corners, Aloma Ave. at Lakemont Ave., Winter Park. . . . . . . 103,000 400,000 LOUISIANA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,698,000 7,385,000 Siegen Plaza, Siegen Lane at Honore Lane, Baton Rouge. . . . . . . . . . . 83,000 494,000 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 Manhattan Place, Manhattan Place at Gretna Blvd., Harvey . . . . . . . . . 10,000 25,000 Ambassador Plaza, Ambassador Caffery at W. Congress, Lafayette . . . . . . 29,000 173,000 Westwood Village, W. Congress at Bertrand, Lafayette . . . . . . . . . . . 141,000 942,000

Table continued on next page PAGE 6

Building Name and Location Area Land Area -------------------------------------------------------------------------- ----------- ----------- LOUISIANA, (CONT'D.) Conn's Building, Ryan at 17th St., Lake Charles. . . . . . . . . . . . . . 23,000 36,000 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 * Prien Lake Plaza, Prien Lake Rd. at Nelson Rd., Lake Charles . . . . . . . 43,000 261,000 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 at Chatham, New Orleans. . . . . . . 5,000 31,000 Southgate, 70th at Mansfield, Shreveport . . . . . . . . . . . . . . . . . 73,000 359,000 Westwood, Jewella at Greenwood, Shreveport . . . . . . . . . . . . . . . . 113,000 393,000 University Place, 70th Street at Youree Dr., Shreveport. . . . . . . . . . 167,000 892,000 NEVADA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,632,000 7,464,000 Eastern Horizon, Eastern Ave. at Horizon Ridge Pkwy., Henderson . . . . . 37,000 235,000 Francisco Centre, E. Desert Inn Rd. at S. Eastern Ave., Las Vegas. . . . . 116,000 639,000 Mission Center, Flamingo Rd. at Maryland Pkwy., Las Vegas. . . . . . . . . 152,000 570,000 Paradise Marketplace, Flamingo Rd. at Sandhill, Las Vegas. . . . . . . . . 149,000 536,000 Rainbow Plaza, Rainbow Blvd. at Charleston Blvd., Las Vegas. . . . . . . . 410,000 1,548,000 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 Westland Fair, Charleston Blvd. At Decatur Blvd., Las Vegas. . . . . . . . 374,000 2,346,000 College Park, E. Lake Mead Blvd. at Civic Ctr. Dr., North Las Vegas. . . . 164,000 721,000 NORTH CAROLINA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,334,000 6,516,000 Capital Square, Capital Blvd. at Huntleigh Dr., Cary . . . . . . . . . . . 157,000 607,000 High House Crossing, NC Hwy. 55 at Green Level W. Rd., Cary. . . . . . . . 90,000 606,000 Northwoods Market, Maynard Rd. at Harrison Ave., Cary. . . . . . . . . . . 78,000 431,000 Parkway Pointe, Cory Parkway and S. R. 1011, Cary. . . . . . . . . . . . . 80,000 461,000 Mineral Springs Village, Mineral Springs Rd. at Wake Forest Rd., Durham. . 58,000 572,000 Avent Ferry, Avent Ferry Rd. at Gorman St., Raleigh. . . . . . . . . . . . 112,000 669,000 Falls Pointe, Neuce Rd. at Durant Rd., Raleigh . . . . . . . . . . . . . . 103,000 658,000 Six Forks Station, Six Forks Rd. at Strickland Rd., Raleigh. . . . . . . . 468,000 1,843,000 Stonehenge Market, Creedmoor Rd. at Bridgeport Dr., Raleigh. . . . . . . . 188,000 669,000 ARIZONA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,327,000 5,728,000 Palmilla Center, Dysart Rd. at McDowell Rd., Avondale. . . . . . . . . . . 104,000 264,000 University Plaza, Plaza Way at Milton Rd., Flagstaff . . . . . . . . . . . 162,000 919,000 Val Vista Towne Center, Warner at Val Vista Rd., Gilbert . . . . . . . . . 93,000 366,000 Arrowhead Festival, 75th Ave. at W. Bell Rd., Glendale . . . . . . . . . . 30,000 157,000 Fry's Ellsworth Plaza, Broadway Rd. at Ellsworth Rd., Mesa . . . . . . . . 9,000 43,000 Red Mountain Gateway, Power Rd. at McKellips Rd., Mesa . . . . . . . . . . 70,000 353,000 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 Rancho Encanto, 35th Avenue at Greenway Rd., Phoenix . . . . . . . . . . . 71,000 259,000 Fountain Plaza, 77th St. at McDowell, Scottsdale . . . . . . . . . . . . . 112,000 460,000 Broadway Marketplace, Broadway at Rural, Tempe . . . . . . . . . . . . . . 83,000 347,000 Basha Valley Plaza, S. McClintock at E. Southern, Tempe. . . . . . . . . . 145,000 570,000

Table continued on next page PAGE 7

Building Name and Location Area Land Area -------------------------------------------------------------------------- ----------- ----------- ARIZONA, (CONT'D.) Pueblo Anozira, McClintock Dr. at Guadalupe Rd., Tempe . . . . . . . . . . 152,000 769,000 Desert Square Shopping Center, Golf Links at Kolb, Tucson. . . . . . . . . 100,000 458,000 NEW MEXICO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952,000 4,024,000 Eastdale, Candelaria Rd. at Eubank Blvd., Albuquerque. . . . . . . . . . . 111,000 601,000 North Towne Plaza, Academy Rd. at Wyoming Blvd., Albuquerque . . . . . . . 103,000 607,000 Pavilions at San Mateo, I-40 at San Mateo, Albuquerque (30%) . . . . . . . 59,000 * 237,000 * Valle del Sol, Isleta Blvd. at Rio Bravo, Albuquerque. . . . . . . . . . . 106,000 475,000 Wyoming Mall, Academy Rd. at Northeastern, Albuquerque . . . . . . . . . . 326,000 1,309,000 DeVargas, N. Guadalupe at Paseo de Peralta, Santa Fe . . . . . . . . . . . 247,000 795,000 KANSAS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784,000 3,418,000 West State Plaza, State Ave. at 78th St., Kansas City. . . . . . . . . . . 94,000 401,000 Regency Park, 93rd St. at Metcalf Ave., Overland Park. . . . . . . . . . . 202,000 742,000 Westbrooke Village, Quivira Rd. at 75th St., Shawnee . . . . . . . . . . . 237,000 1,270,000 Shawnee Village, Shawnee Mission Pkwy. at Quivera Rd., Shawnee . . . . . . 135,000 561,000 Kohl's, Wanamaker Rd. at S.W. 17th St., Topeka . . . . . . . . . . . . . . 116,000 444,000 OKLAHOMA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702,000 3,173,000 Bryant Square, Bryant Ave. at 2nd St., Edmond. . . . . . . . . . . . . . . 282,000 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. . . . . . . . . 138,000 540,000 Windsor Hills Center, Meridian at Windsor Place, Oklahoma City . . . . . . 246,000 1,232,000 ARKANSAS, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679,000 2,700,000 Evelyn Hills, College Ave. at Abshier, Fayetteville. . . . . . . . . . . . 155,000 750,000 Broadway Plaza, Broadway at W. Roosevelt, Little Rock. . . . . . . . . . . 16,000 48,000 Geyer Springs, Geyer Springs at Baseline, Little Rock. . . . . . . . . . . 153,000 414,000 Markham Square, W. Markham at John Barrow, Little Rock . . . . . . . . . . 127,000 514,000 Markham West, 11400 W. Markham, Little Rock. . . . . . . . . . . . . . . . 178,000 768,000 Westgate, Cantrell at Bryant, Little Rock. . . . . . . . . . . . . . . . . 50,000 206,000 TENNESSEE, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520,000 2,089,000 Bartlett Towne Center, Bartlett Blvd. at Stage Rd., Bartlett . . . . . . . 179,000 774,000 Commons at Dexter Lake, Dexter at N. Germantown, Memphis . . . . . . . . . 167,000 671,000 Highland Square, Summer at Highland, Memphis . . . . . . . . . . . . . . . 20,000 84,000 Summer Center, Summer Ave. at Waling Rd., Memphis. . . . . . . . . . . . . 154,000 560,000 COLORADO, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468,000 2,248,000 Bridges at Smoky Hill, Smoky Hill Rd. at S. Picadilly St., Aurora. . . . . 10,000 * 47,000 * Carefree, Academy Blvd. at N. Carefree Circle, Colorado Springs. . . . . . 127,000 460,000 Academy Place, Academy Blvd. at Union Blvd., Colorado Springs. . . . . . . 84,000 404,000 Gold Creek Center, Hwy. 86 at Elizabeth St., Elizabeth . . . . . . . . . . 13,000 * 55,000 * City Center Englewood, S. Santa Fe at Hampden Ave., Englewood. . . . . . . 74,000 * 168,000 * Crossing at Stonegate, Jordan Rd. at Lincoln Ave., Parker (37.5%). . . . . 45,000 * 299,000 * Thorncreek Crossing, Washington St. at 120th St., Thornton . . . . . . . . 66,000 * 179,000 * Westminster Plaza, North Federal Blvd. at 72nd Ave., Westminster . . . . . 49,000 * 636,000 *

Table continued on next page PAGE 8

Building Name and Location Area Land Area ------------------------------------------------------------------------- ----------- ----------- MISSOURI, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338,000 1,101,000 Ballwin Plaza, Manchester Rd. at Vlasis Dr., Ballwin. . . . . . . . . . . 203,000 653,000 PineTree Plaza, U.S. Hwy. 50 at Hwy. 291, Lee's Summit. . . . . . . . . . 135,000 448,000 MAINE, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249,000 963,000 The Promenade, Essex at Summit, Lewiston. . . . . . . . . . . . . . . . . 249,000 963,000 MISSISSIPPI, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,000 581,000 Southaven Commons, Goodman Rd. at Swinnea Rd., Southaven. . . . . . . . . 117,000 581,000 ILLINOIS, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,000 503,000 Lincoln Place Centre, Hwy. 59, Fairview Heights . . . . . . . . . . . . . 103,000 503,000 INDUSTRIAL HOUSTON AND HARRIS COUNTY, TOTAL. . . . . . . . . . . . . . . . . . . . . 3,224,000 9,296,000 Beltway 8 Business Park, Beltway 8 at Petersham Dr. . . . . . . . . . . . 158,000 499,000 Blankenship Building, Kempwood Drive. . . . . . . . . . . . . . . . . . . 59,000 175,000 Brookhollow Business Center, Dacoma at Directors Row. . . . . . . . . . . 133,000 405,000 Cannon/So. Loop Business Park, Cannon Street (20%). . . . . . . . . . . . 59,000 * 96,000 * Central Park North, W. Hardy Rd. at Kendrick Dr.. . . . . . . . . . . . . 155,000 466,000 Central Park Northwest VI, Central Pkwy. at Dacoma. . . . . . . . . . . . 175,000 518,000 Central Park Northwest VII, Central Pkwy. at Dacoma . . . . . . . . . . . 103,000 283,000 Claywood Industrial Park, Clay at Hollister . . . . . . . . . . . . . . . 330,000 1,761,000 Crosspoint Warehouse, Crosspoint. . . . . . . . . . . . . . . . . . . . . 73,000 179,000 Jester Plaza, West T.C. Jester. . . . . . . . . . . . . . . . . . . . . . 101,000 244,000 Kempwood Industrial, Kempwood Dr. at Blankenship Dr.. . . . . . . . . . . 113,000 327,000 Kempwood Industrial, Kempwood Dr. at Blankenship Dr. (20%). . . . . . . . 42,000 * 106,000 * Lathrop Warehouse, Lathrop St. at Larimer St. (20%) . . . . . . . . . . . 51,000 * 87,000 * Navigation Business Park, Navigation at N. York (20%) . . . . . . . . . . 47,000 * 111,000 * Northway Park II, Loop 610 East at Homestead (20%). . . . . . . . . . . . 61,000 * 149,000 * Park Southwest, Stancliff at Brooklet . . . . . . . . . . . . . . . . . . 52,000 160,000 Railwood Industrial Park, Mesa at U.S. 90 . . . . . . . . . . . . . . . . 616,000 1,651,000 Railwood Industrial Park, Mesa at U.S. 90 (20%) . . . . . . . . . . . . . 99,000 * 213,000 * South Loop Business Park, S. Loop at Long Dr. . . . . . . . . . . . . . . 46,000 * 103,000 * Southport Business Park 5, South Loop 610 . . . . . . . . . . . . . . . . 161,000 358,000 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 . . . . . . . . . . . . . . . . 141,000 331,000 West-10 Business Center II, Wirt Rd. at I-10. . . . . . . . . . . . . . . 83,000 149,000 West Loop Commerce Center, W. Loop N. at I-10 . . . . . . . . . . . . . . 34,000 91,000 610 and 11th St. Warehouse, Loop 610 at 11th St.. . . . . . . . . . . . . 105,000 202,000 610 and 11th St. Warehouse, Loop 610 at 11th St. (20%). . . . . . . . . . 48,000 * 108,000 *

Table continued on next page PAGE 9

Building Name and Location Area Land Area ------------------------------------------------------------------------- ----------- ----------- INDUSTRIAL (CONT'D) TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL . . . . . . . . . . . . . . 2,782,000 6,999,000 Randol Mill Place, Randol Mill Road, Arlington. . . . . . . . . . . . . . 55,000 178,000 Braker 2 Business Center, Kramer Ln. at Metric Blvd., Austin. . . . . . . 27,000 93,000 Corporate Center I & II, Putnam Dr. at Research Blvd., Austin . . . . . . 117,000 326,000 Oak Hills Industrial Park, Industrial Oaks Blvd., Austin. . . . . . . . . 90,000 340,000 Rutland 10 Business Center, Metric Blvd. At Centimeter Circle, Austin . . 54,000 139,000 Southpark A,B,C., East St. Elmo Rd. at Woodward St., Austin . . . . . . . 78,000 238,000 Southpoint Service Center, Burleson at Promontory Point Dr., Austin . . . 54,000 234,000 Walnut Creek Office Park, Cameron Rd., Austin . . . . . . . . . . . . . . 34,000 122,000 Wells Branch Corporate Center, Wells Branch Pkwy., Austin . . . . . . . . 60,000 183,000 Midway Business Center, Midway at Boyington, Carrollton . . . . . . . . . 142,000 309,000 Manana Office Center, I-35 at Manana, Dallas. . . . . . . . . . . . . . . 223,000 473,000 Newkirk Service Center, Newkirk near N.W. Hwy., Dallas. . . . . . . . . . 106,000 223,000 Northaven Business Center, Northaven Rd., Dallas. . . . . . . . . . . . . 151,000 178,000 Northeast Crossing Off/Svc Ctr., East N.W. Hwy. at Shiloh, Dallas . . . . 79,000 199,000 Northwest Crossing Off/Svc Ctr., N.W. Hwy. at Walton Walker, Dallas . . . 127,000 290,000 Redbird Distribution Center, Joseph Hardin Drive, Dallas. . . . . . . . . 111,000 234,000 Regal Distribution Center, Leston Avenue, Dallas. . . . . . . . . . . . . 203,000 318,000 Space Center Industrial Park, Pulaski St. at Irving Blvd., Dallas . . . . 265,000 426,000 Walnut Trails Business Park, Walnut Hill Lane, Dallas . . . . . . . . . . 103,000 311,000 DFW-Port America, Port America Place, Grapevine . . . . . . . . . . . . . 45,000 110,000 Jupiter Service Center, Jupiter near Plano Pkwy., Plano . . . . . . . . . 78,000 234,000 Sherman Plaza Business Park, Sherman at Phillips, Richardson. . . . . . . 100,000 312,000 Interwest Business Park, Alamo Downs Parkway, San Antonio . . . . . . . . 218,000 742,000 O'Connor Road Business Park, O'Connor Road, San Antonio . . . . . . . . . 150,000 459,000 Nasa One Business Center, Nasa Road One at Hwy. 3, Webster. . . . . . . . 112,000 328,000 TENNESSEE, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,089,000 2,684,000 Southwide Warehouse # 2, Federal Compress Ind. Pk., Memphis . . . . . . . 124,000 302,000 Southwide Warehouse # 3, Federal Compress Ind. Pk., Memphis . . . . . . . 112,000 209,000 Southwide Warehouse # 4, Federal Compress Ind. Pk., Memphis . . . . . . . 120,000 220,000 Thomas Street Warehouse, N. Thomas Street, Memphis. . . . . . . . . . . . 165,000 423,000 Crowfarn Drive Warehouse, Crowfarn Dr. at Getwell Rd., Memphis. . . . . . 161,000 316,000 Outland Business Center, Outland Center Dr., Memphis. . . . . . . . . . . 407,000 1,214,000 FLORIDA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000 1,535,000 Lakeland Industrial Ctr., I-4 at County Rd., Lakeland . . . . . . . . . . 600,000 1,535,000 GEORGIA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363,000 965,000 6485 Crescent Dr., I-85 at Jimmy Carter Blvd., Norcross . . . . . . . . . 363,000 965,000 NEVADA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,000 162,000 East Sahara Off/Svc Ctr., E. Sahara Blvd., Las Vegas. . . . . . . . . . . 66,000 162,000

Table continued on next page PAGE 10

Building Name and Location Area Land Area ------------------------------------------------------------------------- ----------- ----------- OFFICE BUILDING HOUSTON & HARRIS COUNTY, TOTAL. . . . . . . . . . . . . . . . . . . . . . 121,000 171,000 Citadel Plaza, N. Loop 610 at Citadel Plaza Dr. . . . . . . . . . . . . . 121,000 171,000 UNIMPROVED LAND HOUSTON & HARRIS COUNTY, TOTAL. . . . . . . . . . . . . . . . . . . . . . 3,156,000 Bissonnet at Wilcrest . . . . . . . . . . . . . . . . . . . . . . . . . . 773,000 Citadel Plaza at 610 N. Loop. . . . . . . . . . . . . . . . . . . . . . . 137,000 East Orem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000 Kirkwood at Dashwood Dr.. . . . . . . . . . . . . . . . . . . . . . . . . 322,000 Mesa Rd. at Tidwell . . . . . . . . . . . . . . . . . . . . . . . . . . . 901,000 Mowery at Cullen. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,000 Northwest Fwy. at Gessner . . . . . . . . . . . . . . . . . . . . . . . . 422,000 Redman at W. Denham . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000 Sheldon at I-10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000 W. Little York at N. Houston-Rosslyn. . . . . . . . . . . . . . . . . . . 19,000 W. Little York at Interstate 45 . . . . . . . . . . . . . . . . . . . . . 161,000 W. Loop N. at I-10. . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,000 TEXAS (EXCLUDING HOUSTON & HARRIS CO.), TOTAL . . . . . . . . . . . . . . 2,109,000 McDermott Drive at Custer Rd., Allen. . . . . . . . . . . . . . . . . . . 41,000 River Pointe Dr. at I-45, Conroe. . . . . . . . . . . . . . . . . . . . . 186,000 F.M. 731 at F.M. 1187, Crowley. . . . . . . . . . . . . . . . . . . . . . 635,000 Beach St. at Golden Triangle Blvd., Fort Worth. . . . . . . . . . . . . . 340,000 U.S. Hwy. 380 (University Drive) and U.S. Hwy. 75, McKinney . . . . . . . 135,000 F.M. 544 at Murphy Rd., Murphy. . . . . . . . . . . . . . . . . . . . . . 165,000 Dalrock Rd. at Lakeview Parkway, Rowlett. . . . . . . . . . . . . . . . . 139,000 Highway 287 at Bailey Boswell Rd., Saginaw. . . . . . . . . . . . . . . . 113,000 Hillcrest, Sunshine at Quill, San Antonio . . . . . . . . . . . . . . . . 171,000 Hwy. 3 at Hwy. 1765, Texas City . . . . . . . . . . . . . . . . . . . . . 184,000 LOUISIANA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,497,000 Siegen Lane at Honore Ln., Baton Rouge. . . . . . . . . . . . . . . . . . 506,000 U.S. Hwy. 171 at Parish, DeRidder . . . . . . . . . . . . . . . . . . . . 462,000 Ambassador Caffery Pkwy. at Congress St., Lafayette . . . . . . . . . . . 23,000 Ambassador Caffery Pkwy. at Kaliste Saloom Rd., Lafayette . . . . . . . . 1,031,000 Prien Lake Rd. at Nelson Rd., Lake Charles. . . . . . . . . . . . . . . . 599,000 Manhattan Blvd. at Gretna Blvd., Harvey . . . . . . . . . . . . . . . . . 869,000 Woodland Hwy., Plaquemines Parish (5%). . . . . . . . . . . . . . . . . . 822,000 * 70th. St. at Youree Dr., Shreveport . . . . . . . . . . . . . . . . . . . 185,000

Table continued on next page PAGE 11

Building Name and Location Area Land Area ------------------------------------------------------------------------- ----------- ----------- UNIMPROVED LAND (CONT'D) COLORADO, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,852,000 E. Alameda at I-225, Aurora . . . . . . . . . . . . . . . . . . . . . . . 1,130,000 * Smoky Hill Rd. at S. Picadilly St., Aurora. . . . . . . . . . . . . . . . 90,000 * 2nd Ave. at Lowry Ave., Denver. . . . . . . . . . . . . . . . . . . . . . 123,000 * Hwy. 86 at Elizabeth St., Elizabeth . . . . . . . . . . . . . . . . . . . 24,000 * Hampton at Santa Fe, Englewood. . . . . . . . . . . . . . . . . . . . . . 58,000 * Jordan Rd. at Lincoln Ave., Parker (38%). . . . . . . . . . . . . . . . . 28,000 * 120th at Washington, Thornton . . . . . . . . . . . . . . . . . . . . . . 399,000 * NEVADA, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,099,000 Eastern Ave. at Horizon Ridge Pkwy., Henderson. . . . . . . . . . . . . . 366,000 Tropicana Ave. at Fort Apache Rd., Las Vegas. . . . . . . . . . . . . . . 733,000 * UTAH, TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,000 Main St. at State St., American Fork (33%). . . . . . . . . . . . . . . . 149,000 * ARIZONA, TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 Broadway Rd. at Ellsworth Rd., Mesa . . . . . . . . . . . . . . . . . . . 15,000

Table continued on next page PAGE 12

Building Name and Location Area Land Area ------------------------------------------------------------------------- ----------- ----------- ALL PROPERTIES-BY LOCATION GRAND TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,017,000 160,255,000 Houston & Harris County . . . . . . . . . . . . . . . . . . . . . . . . . 10,353,000 39,549,000 Texas (excluding Houston & Harris County) . . . . . . . . . . . . . . . . 9,452,000 37,920,000 Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,982,000 11,930,000 California. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,809,000 11,540,000 Louisiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,698,000 11,882,000 Nevada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,698,000 8,725,000 Tennessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,609,000 4,773,000 North Carolina. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,334,000 6,516,000 Arizona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,327,000 5,743,000 New Mexico. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952,000 4,024,000 Kansas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 784,000 3,418,000 Oklahoma. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702,000 3,173,000 Arkansas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679,000 2,700,000 Colorado. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468,000 4,100,000 Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363,000 965,000 Missouri. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338,000 1,101,000 Maine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249,000 963,000 Mississippi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,000 581,000 Illinois. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,000 503,000 Utah. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,000 ALL PROPERTIES-BY CLASSIFICATION GRAND TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,017,000 160,255,000 Shopping Centers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,772,000 125,566,000 Industrial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,124,000 21,641,000 Office Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,000 171,000 Unimproved Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,877,000 Note: Total square footage includes 7,847,000 square feet of land leased and 450,000 square feet of building leased from others. * Denotes partial ownership. WRI's interest is 50% except where noted. The square feet figures represent WRI's proportionate ownership of the entire property.

PAGE 13 General. In 2002, no single property accounted for more than 2.3% of WRI's total assets or 2.0% of gross revenues. Four properties, in the aggregate, represented approximately 7.2% of our gross revenues for the year ended December 31, 2002; otherwise, none of the remaining properties accounted for more than 1.5% of our gross revenues during the same period. The weighted average occupancy rate for all of our improved properties as of December 31, 2002 was 91.7%. Substantially all of our properties are owned directly by WRI (subject in some cases to mortgages), although our interests in some properties are held indirectly through interests in joint ventures or under long-term leases. In our opinion, our properties are well maintained and in good repair, suitable for their intended uses, and adequately covered by insurance. Shopping Centers. As of December 31, 2002, WRI owned or operated under long-term leases, either directly or through its interests in joint ventures, 245 shopping centers with approximately 29.8 million square feet of building area. The shopping centers were located predominantly in Texas with other locations in California, Louisiana, Arizona, Florida, Nevada, North Carolina, Colorado, Tennessee, Arkansas, New Mexico, Kansas, Oklahoma, Missouri, Illinois, Mississippi and Maine. WRI's shopping centers are primarily neighborhood and community shopping centers that 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 that 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. Our 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 that have existing populations sufficient to support retail activities of the types conducted in our centers. We have approximately 5,700 separate leases with 4,300 different tenants, including national and regional supermarket chains, drug stores, discount department stores, junior department stores, other nationally or regionally known stores and a great variety of other regional and local retailers. The large number of locations offered by WRI and the types of traditional anchor tenants help attract prospective new tenants. Some of the national and regional supermarket chains, which are tenants in our centers, include Albertson's, Fiesta, Smith's (Kroger), H.E.B., Kroger Company, Randall's Food Markets (Safeway), Fry's Food Stores (Kroger), Ralph's (Kroger), Raley's, Publix, King Soopers, Inc. (Kroger) and Safeway. In addition to these supermarket chains, WRI's nationally and regionally known retail store tenants include Eckerd, Walgreen and Osco (Albertson's) drugstores; Kmart discount stores; Bealls and Palais Royal junior department stores; Kohl's, Marshall's, Office Depot, Office Max, Staples, Babies 'R' Us, Ross Dress For Less, Stein Mart and T.J. Maxx off-price specialty stores; Academy sporting goods; CompUSA, Best Buy, Conn's and Circuit City electronics stores; FAO Schwarz toy store; Cost Plus Imports; Linens 'N Things; Barnes & Noble bookstore; Border's Books; Home Depot; Lowe's; Bed, Bath & Beyond; and the following restaurant chains: Luby's, Piccadilly and Furr's cafeterias, Arby's, Burger King, 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. We also lease space in 3,000 to 20,000 square foot areas to national chains such as the Limited Store, The Gap, One Price Stores, Old Navy, Eddie Bauer and Radio Shack. Other merchants in our portfolio include Al's Formal Wear, Anna's Linens, TGF Haircutters, Clothestime, Big Lots, Jason's Deli, Dollar General, Dress Barn, Family Dollar, Shoe Cents, Fashion Bug, Cloth World, Fox Photo, GNC, Goodyear Tire, Luther's Bar-B-Q, Mattress Firm, Fantastic Sam's, One Price Clothing Stores, Paper Warehouse, Rent-A-Center, Sally Beauty, Souper Salad, Black Eyed Pea, Men's Wearhouse and Tuesday Morning. The diversity of our tenant base is also evidenced in the fact that our largest tenant (Kroger) accounted for only 3.5% of rental revenues during 2002. In the ordinary course of business, WRI has tenants that filed for bankruptcy protection, such as Kmart, Service Merchandise and FAO Schwartz. The communication and timing of store closings varies by retailer; however, we believe the effect of these bankruptcies will not have a material impact on our financial position or results of operations. Also, we would not expect other retailer bankruptcies to have a significant effect on the liquidity of WRI, due to the significant diversification of our tenant base, where no one tenant represents more than 3.5% of our rental revenues. PAGE 14 WRI'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 25 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, with each of these periods 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 our 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 these items). They also provide for the payment of additional rentals based on a percentage of the tenants' sales. Utilities are generally paid directly by tenants except where common metering exists with respect to a center. In this case, WRI makes the payments for the utilities and is reimbursed by the tenants on a monthly basis. Generally, our leases prohibit the tenant from assigning or subletting its space. They also require the tenant to use its space for the purpose designated in its lease agreement and to operate its business on a continuous basis. Some of the lease agreements with major tenants contain modifications of these basic provisions in view of the financial condition, stability or desirability of those 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 that lease agreement. During 2002, WRI invested $196.2 million through the acquisition of retail operating properties. Additionally, operating partnership units valued at $51.5 million were issued in conjunction with the purchase of seven properties in North Carolina which utilized the DownREIT structure. Including these North Carolina properties, we acquired 15 shopping centers, adding 2.5 million square feet to our portfolio. In March 2002, we acquired the Northridge Shopping Center located in Fort Lauderdale, Florida. This 234,000 square foot center is anchored by Publix Supermarket, Ross Dress For Less and Bally's Total Fitness, and has recently undergone redevelopment and expansion. In April 2002, we formed two limited partnerships to acquire seven supermarket-anchored shopping centers in the Raleigh-Durham market totaling 1.2 million square feet from Bob Hughes and Associates and related partnerships. This transaction utilized a DownREIT structure whereby we issued operating partnership units that are convertible into WRI common shares and will be included in the consolidated financial statements of WRI because we exercise financial and operating control. Also, in April 2002, we acquired Pitman Corners, a supermarket-anchored center located in Plano, Texas (a Dallas suburb), containing a total of 190,000 square feet. In June 2002, Westminster Plaza, a 97,000 square foot center located in Westminster, Colorado, was acquired through a 50% joint venture with our Denver-based development partner. This joint venture will be included in the consolidated financial statements of WRI because we exercise financial and operating control. Also, in June 2002, we acquired Lake Washington Square, an 112,000 square foot center located in Melbourne, Florida. In August 2002, we acquired Chino Hills Shopping Center, a 320,000 square foot supermarket-anchored center located in Chino Hills, California (Los Angeles metropolitan area). This property is anchored by Von's (Safeway), Rite-Aid and Kmart, and is 92% occupied. In December, we acquired three retail shopping centers. Falls Pointe Shopping Center, located in Raleigh, North Carolina is a 98,000 square foot center that is anchored by Harris Teeter. Also, Embassy Lakes and Vizcaya Square Shopping Centers, totaling 244,000 square feet, were acquired and both are located in Florida and anchored by Winn Dixie. PAGE 15 In 2002, WRI acquired land at three separate locations for the development of retail shopping centers. Two of these acquisitions were made in joint ventures. These joint ventures are accounted for using the equity method of accounting, as WRI has the ability to exercise significant influence, but does not have financial or operating control. We currently have 20 retail developments underway which, upon completion, will represent an investment of approximately $269 million and will add 1.9 million square feet to the portfolio. These projects will come on-line beginning in early 2003 through mid 2004. Industrial Properties. At December 31, 2002, WRI owned 56 industrial projects with approximately 8.1 million square feet of building area. Its properties are located in Texas, Nevada, Georgia, Florida and Tennessee. Office Building. We own 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, in part, as WRI's headquarters. Other than WRI, the major tenant of the building is Bank of America, which currently occupies 9% of the office space. Unimproved Land. At December 31, 2002, WRI owned, directly or through its interest in a joint venture, 41 parcels of unimproved land aggregating approximately 12.9 million square feet of land area located in Texas, Louisiana, Arizona, Colorado, Illinois, Nevada and Utah. These properties include approximately 5.2 million square feet of land adjacent to certain of our existing developed properties, which may be used for expansion of these developments, as well as approximately 7.7 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 WRI intends to emphasize the development of these parcels for such purpose. ITEM 3. LEGAL PROCEEDINGS WRI is involved in various matters of litigation arising in the normal course of business. While WRI is unable to predict with certainty the amounts involved, WRI's management and counsel believe that, when such litigation is resolved, WRI's resulting liability, if any, will not have a material adverse effect on WRI's consolidated financial statements. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS None. PAGE 16 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON SHARES OF BENEFICIAL INTEREST AND RELATED SHAREHOLDER MATTERS WRI's common shares are listed and traded on the New York Stock Exchange under the symbol "WRI". The number of holders of record of our common shares as of February 19, 2003 was 3,366. The high and low sale prices per common share (restated to reflect the three-for-two share split in April 2002), as reported on the New York Stock Exchange composite tape, and dividends per share paid for the fiscal quarters indicated were as follows:

HIGH LOW DIVIDENDS ------- ------- ---------- 2002: Fourth . . . . . $ 38.25 $ 34.45 $ 0.555 Third. . . . . . 38.64 30.85 0.555 Second . . . . . 36.90 33.55 0.555 First. . . . . . 34.43 32.13 0.555 2001: Fourth . . . . . $ 33.60 $ 31.76 $ 0.526 Third. . . . . . 33.20 29.10 0.526 Second . . . . . 30.71 27.85 0.526 First. . . . . . 30.33 26.71 0.526

PAGE 17 ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected consolidated financial data with respect to WRI 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.

(Amounts in thousands, except per share amounts) Year Ended December 31, 2002 2001 2000 1999 1998 ----------- ----------- ----------- ----------- ----------- Revenues (primarily real estate rentals) . . . . $ 365,410 $ 309,004 $ 245,168 $ 220,753 $ 190,070 ----------- ----------- ----------- ----------- ----------- Expenses: Depreciation and amortization. . . . . . . . 78,481 67,039 53,451 47,943 40,674 Interest . . . . . . . . . . . . . . . . . . 65,863 54,473 43,190 32,792 33,338 Other. . . . . . . . . . . . . . . . . . . . 111,133 95,017 75,475 68,351 59,625 ----------- ----------- ----------- ----------- ----------- Total. . . . . . . . . . . . . 255,477 216,529 172,116 149,086 133,637 ----------- ----------- ----------- ----------- ----------- Income from operations . . . . . . . . . . . . . 109,933 92,475 73,052 71,667 56,433 Equity in earnings of joint ventures . . . . . . 4,043 5,547 4,143 3,654 4,469 Minority interest in income of partnerships. . . (3,553) (475) (630) (789) (606) Gain on sale of properties and securities. . . . 188 8,339 382 20,594 328 Discontinued operations (1). . . . . . . . . . . 21,256 2,656 2,054 1,194 1,133 Extraordinary charge . . . . . . . . . . . . . . (190) (1,392) ----------- ----------- ----------- ----------- ----------- Net income . . . . . . . . . . . . . . . . . . . $ 131,867 $ 108,542 $ 79,001 $ 96,130 $ 60,365 =========== =========== =========== =========== =========== Net income available to common shareholders . . . . . . . . . . . . . . . . . $ 112,111 $ 88,839 $ 58,961 $ 76,537 $ 54,484 =========== =========== =========== =========== =========== Cash flows from operations . . . . . . . . . . . $ 168,488 $ 146,659 $ 119,043 $ 113,351 $ 93,054 =========== =========== =========== =========== =========== Per share data - basic: (2) Income before discontinued operations and extraordinary charge . . . . . . . . . $ 1.75 $ 1.79 $ 1.42 $ 1.88 $ 1.36 Net income . . . . . . . . . . . . . . . . . $ 2.16 $ 1.85 $ 1.47 $ 1.91 $ 1.36 Weighted average number of shares. . . . . . 51,911 48,104 40,163 40,035 40,001 Per share data - diluted: (2) Income before discontinued operations and extraordinary charge . . . . . . . . . $ 1.75 $ 1.79 $ 1.41 $ 1.87 $ 1.35 Net income . . . . . . . . . . . . . . . . . $ 2.15 $ 1.84 $ 1.46 $ 1.90 $ 1.35 Weighted average number of shares. . . . . . 53,360 48,369 40,397 40,335 40,304 Cash dividends per common share (2). . . . . . . $ 2.22 $ 2.11 $ 2.00 $ 1.89 $ 1.79 Property (at cost) . . . . . . . . . . . . . . . $2,695,286 $2,352,393 $1,728,414 $1,486,224 $1,278,466 Total assets . . . . . . . . . . . . . . . . . . $2,423,889 $2,095,747 $1,498,477 $1,312,746 $1,107,077 Debt . . . . . . . . . . . . . . . . . . . . . . $1,330,369 $1,070,835 $ 792,353 $ 592,978 $ 513,361 Other data: Funds from operations: (3) Net income available to common shareholders . . . . . . . . . . . . . . $ 112,111 $ 88,839 $ 58,961 $ 76,537 $ 54,484 Depreciation and amortization. . . . . . . 76,855 67,803 55,344 49,256 41,580 Gain on sale of properties and securities. (18,614) (9,795) (382) (20,596) (885) Extraordinary charge . . . . . . . . . . . 190 1,392 ----------- ----------- ----------- ----------- ----------- Total. . . . . . . . . . . . . $ 170,352 $ 146,847 $ 113,923 $ 105,387 $ 96,571 =========== =========== =========== =========== =========== __________ (1) Adoption of SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" requires the operating results and gain (loss) on the sale of operating properties to be reported as discontinued operations. PAGE 18 (2) All per share and weighted average share information has been restated to reflect the three-for-two share split in April 2002. (3) The Board of Governors of the National Association of Real Estate Investment Trusts defines funds from operations as net income (loss) computed in accordance with generally accepted accounting principles, excluding gains or losses from sales of property, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. In addition, NAREIT recommends that extraordinary items not be considered in arriving at FFO. We calculate FFO in a manner consistent with the NAREIT definition. Most industry analysts and equity REITs, including WRI, believe FFO is an alternative measure of performance relative to other REITs. There can be no assurance that FFO presented by WRI is comparable to similarly titled measures of other REITs. FFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity. FFO does not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.

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. The results of operations and financial condition of the company, as reflected in the accompanying statements and related footnotes, are subject to management's evaluation and interpretation of business conditions, retailer performance, changing capital market conditions and other factors which could affect the ongoing viability of the company's tenants. Management believes the most critical accounting policies in this regard are the estimation of an allowance for doubtful receivables (including the allowance for straight-line rent receivables), the determination of reserves for self-insured general liability insurance and the periodic determination of whether the value of a real estate asset has been impaired. Each of these issues requires management to make judgments that are subjective in nature; however, management considers and assesses a significant amount of historical data and current market data in arriving at what it believes to be reasonable estimates. Weingarten Realty Investors owned or operated under long-term leases, either directly or through its interest in joint ventures, 245 shopping centers, 56 industrial properties and one office building at December 31, 2002. Of our 302 developed properties, 176 are located in Texas (including 90 in Houston and Harris County). Our remaining properties are located in California (20), Louisiana (17), Arizona (14), Florida (13), Nevada (10), North Carolina (9), Colorado (8), Tennessee (8), Arkansas (6), New Mexico (6), Kansas (5), Oklahoma (4), Missouri (2), Illinois (1), Georgia (1), Mississippi (1) and Maine (1). WRI has nearly 5,700 leases and 4,300 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, reimbursements of property operating expenses and an amount based on a percentage of the tenants' sales. The majority of our anchor tenants are supermarkets, drugstores, value-oriented apparel/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, internally-generated cash flow, 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 maintain and operate our properties, refinance debt maturities and achieve planned growth. Cash flow from operating activities as reported in the Statements of Consolidated Cash Flows increased to $168.5 million in 2002 from $146.7 million in 2001 and $119.0 million for 2000. During 2002, WRI invested $196.2 million through the acquisition of retail operating properties. Additionally, operating partnership units valued at $51.5 million were issued in conjunction with the purchase of seven properties in North Carolina which utilized the DownREIT structure. Including these North Carolina properties, we acquired 15 shopping centers, adding 2.5 million square feet to our portfolio. PAGE 19 In 2002, WRI acquired land at three separate locations for the development of retail shopping centers. Two of these acquisitions were made in joint ventures. These joint ventures are accounted for using the equity method of accounting, because WRI has the ability to exercise significant influence, but does not have financial or operating control. We currently have 20 retail developments underway which, upon completion, will represent an investment of approximately $269 million and will add 1.9 million square feet to the portfolio. These projects will come on-line beginning in early 2003 through mid-2004. We invested $70.3 million in these projects during 2002 and expect to invest approximately $88 million in these properties during 2003 and 2004. Capitalized expenditures for acquisitions, new development and additions to the existing portfolio were, in millions, $351.2, $632.2 and $240.0 during 2002, 2001 and 2000, respectively. All of the acquisitions and new development during 2002 were either initially financed under WRI's revolving credit facilities or funded with excess cash flow from our existing portfolio of properties. WRI's share of capitalized expenditures for unconsolidated joint ventures or partnerships, including the purchase of properties by newly-formed joint ventures or partnerships, were, in millions: $1.8, $.7 and $20.2 during 2002, 2001 and 2000, respectively. Common and preferred dividends increased to $135.2 million in 2002, compared to $123.0 million in 2001 and $100.4 million in 2000. WRI satisfied its REIT requirement of distributing at least 90% (95% in 2000) of ordinary taxable income for each of the three years ending December 31, 2002. Our dividend payout ratio on common equity for 2002, 2001 and 2000 approximated 67.7%, 70.4% and 70.5%, respectively, based on funds from operations for the applicable year. In February 2002, a three-for-two share split, affected in the form of a 50% share dividend, was declared for shareholders of record on April 1, 2002, payable April 15, 2002. We issued 17.3 million common shares of beneficial interest as a result of the share split. All references to the number of shares and per share amounts have been restated to reflect the share split, and an amount equal to the par value of the number of common shares issued has been reclassified to common shares from retained earnings. In February 2002, we completed the sale of .3 million common shares of beneficial interest. Net proceeds to WRI totaled $9.5 million based on a price of $33.65 per share and were used to pay down amounts outstanding under our $350 million revolving credit facility. WRI has a $350 million unsecured revolving credit facility with a syndicate of banks. This facility will mature in November 2003 and provides for a one-year extension, at our sole option. The facility bears interest at a rate of LIBOR plus 50 basis points. Additionally, the facility includes a competitive bid option that allows WRI to hold auctions at lower pricing for short-term funds for up to $175 million. WRI also has an unsecured and uncommitted overnight credit facility totaling $20 million to be used for cash management purposes. WRI has two interest rate swap contracts with an aggregate notional amount of $20 million which expire in June 2004 and fix interest rates on a like amount of the $350 million revolver at 7.7%. We have determined these swap agreements are highly effective in offsetting future variable interest cash flows of the revolving credit debt and, accordingly, they have been designated as cash flow hedges. An additional interest rate swap contract with a notional amount of $25 million serves as a hedge against changes in interest rates on a $25 million variable-rate medium term note. This swap fixes the interest rate on the medium term note at 6.8% and matures in July 2003. In July 2002, an interest rate swap with a notional amount of $25 million matured. The fair value of these interest rate swaps at December 31, 2002 was reflected as a liability of $2.4 million. In July 2001, we entered into a $50 million unsecured term loan with two banks that also participate in our $350 million revolving credit facility. The terms of the $50 million loan, including pricing, are substantially identical to those of our $350 million revolving credit facility, and it also matures on the same date. In July 2001, we sold $200 million of unsecured notes with a coupon of 7%. Net proceeds from the offering totaled $198.3 million and were used to pay down amounts outstanding under our $350 million revolving credit facility. Concurrent with the sale of the 7% notes, we settled our $188.7 million forward-starting interest rate swap contracts, resulting in a gain of $1.6 million. These swap contracts, which we entered into in June 2001, have been designated as a cash flow hedge of forecasted interest payments for fixed-rate notes to be issued in future periods, and accordingly, the gain is being amortized over the life of the 7% notes. PAGE 20 Also in July 2001, we entered into eleven interest rate swaps with an aggregate notional amount of $107.5 million that convert fixed interest payments at rates from 6.4% to 7.4% to variable interest payments. These interest rate swaps have been designated as fair value hedges. We have determined that these contracts will be highly effective in limiting our risk of changes in the fair value of the fixed-rate notes attributable to changes in variable interest rates. The fair value of these interest rate swaps at December 31, 2002 was reflected as an asset of $7.7 million. During the first nine months of 2002, the Company issued a total of $147 million of unsecured fixed-rate medium term notes at a weighted average rate of 6.1% and a weighted average term of 10.2 years. Proceeds received were used to pay down amounts outstanding under our $350 million revolving credit facility. On November 25, 2002, WRI issued a ten-year $32 million medium term note bearing interest at 5.7%, and on December 26, 2002, we issued a ten-year $42 million medium term note bearing interest at 5.7%. Proceeds received were used to pay down amounts outstanding under our $350 million revolving credit facility. Subsequent to year-end, the Company issued a total of $136 million of unsecured fixed-rate medium term notes at a weighted average rate of 5.4% and a weighted average term of 11.4 years. Proceeds received were used to pay down amounts outstanding under our $350 million revolving credit facility. Total debt outstanding increased to $1.3 billion at December 31, 2002 from $1.1 billion at December 31, 2001, primarily to fund acquisitions and new development. Total debt at December 31, 2002 includes $1.1 billion on which interest rates are fixed, including the net effect of our $152.5 million of interest rate swaps, and $274.7 million which bears interest at variable rates. Additionally, debt totaling $371.7 million is secured by operating properties while the remaining $958.7 million is unsecured. In conjunction with acquisitions completed during 2002, we assumed $98.3 million of non-recourse debt secured by the related properties. The weighted average interest rate on this debt is 7.5%, and the average remaining life is 7.8 years. Additionally, we assumed non-recourse debt secured by a retail property that is held by a joint venture in which we participate. Our share of this debt totaled $2.6 million with an interest rate of 8.0% and a remaining life of 28 years. In March 2001, we filed a $500 million shelf registration statement, of which $112.9 million is currently available. WRI will continue to closely monitor both the debt and equity markets and carefully consider its available financing alternatives, including both public and private placements. RESULTS OF OPERATIONS Rental revenues increased 18.2%, or $55.3 million, from $303.8 million in 2001 to $359.0 million in 2002 and by 27.2%, or $65.0 million, from $238.7 million in 2000. Of these increases, property acquisitions and new development contributed $53.3 million in 2002 and $61.1 million in 2001. The remaining portion of these increases, which are offset by the effect of property dispositions, is due to activity at our existing properties. Occupancy of our shopping centers decreased from 92.8% at the end of 2001 to 92.5% at December 31, 2002. Occupancy of our industrial portfolio decreased from 90.1% at the end of 2001 to 88.7% at December 31, 2002, and occupancy of the total portfolio decreased from 92.2% at December 31, 2001 to 91.7% at December 31, 2002. In 2002, we completed 1,301 renewals or new leases comprising 5.1 million square feet at an average rental rate increase of 8.2%. Net of the amortized portion of capital costs for tenant improvements, the increase averaged 5.6%. Occupancy of our total portfolio decreased from 93.0% at the end of 2000 to 92.2% at the end of 2001. In 2001, we completed 966 renewals or new leases comprising 4.9 million square feet at an average rental rate increase of 10.4%. Net of the amortized portion of capital costs for tenant improvements, the increase averaged 7.8%. Interest income totaled $1.1 million in 2002, $1.2 million in 2001 and $3.5 million in 2000. The decrease in interest income from 2000 to 2001 was due to the completion of permanent financing with third parties of interim loans by us to our unconsolidated joint ventures in 2000. PAGE 21 Direct costs and expenses of operating our properties (operating and ad valorem tax expenses) increased to $100.0 million in 2002 from $85.4 million in 2001 and $67.3 million in 2000. These increases are primarily due to properties acquired and developed during these periods. Overall, direct operating costs and expenses as a percentage of rental revenues were 28% in 2002, 2001 and 2000, respectively. Bad debt expense increased from $.9 million in 2000 to $2.7 million in 2001 and decreased to $1.8 million in 2002. The decrease in bad debt expense from 2001 to 2002 is due to the recovery of previously reserved receivables, primarily from Stage Stores and Weiners. The increase in bad debt expense from 2000 to 2001 is due to tenant bankruptcies in 2000 and 2001, primarily Kmart, Service Merchandise, Weiners and Stage Stores. Depreciation and amortization have increased to $78.5 million in 2002 from $67.0 million in 2001 and $53.5 million in 2000, also as a result of the properties acquired and developed during these periods. General and administrative expense has increased to $11.1 million in 2002 from $9.6 million in 2001 and $8.2 million in 2000. These increases are due to normal compensation increases as well as increases in staffing necessitated by the growth in the portfolio. General and administrative expense as a percentage of rental revenues was 3% in 2002, 2001 and 2000, respectively. Gross interest costs, before capitalization of interest to development projects, increased from $64.2 million in 2001 to $75.5 million in 2002. This increase in interest cost was due mainly to an increase in the average debt outstanding from $927.6 million for 2001 to $1.2 billion for 2002. The weighted-average interest rate decreased from 6.9% in 2001 to 6.3% in 2002. Interest expense, net of amounts capitalized, increased $11.4 million from 2001. The amount of interest capitalized decreased to $9.6 million in 2002 from $9.7 million in 2001. Comparing 2001 to 2000, gross interest costs increased from $47.4 million in 2000 to $64.2 million in 2001. This was due to an increase in the average debt outstanding from $652.9 million in 2000 to $927.6 million in 2001. The weighted-average interest rate decreased between the two periods from 7.2% in 2000 to 6.9% in 2001. Interest expense, net of amounts capitalized, increased $11.3 million from 2000. The amount of interest capitalized increased to $9.7 million in 2001 from $4.2 million in 2000 due to an increase in the amount of development activity during the year. Minority interest in income of partnerships has increased to $3.6 million in 2002 from $.5 million in 2001 and $.6 million in 2000. This increase in minority interest in income of partnerships from 2001 to 2002 results primarily from the acquisition of seven supermarket-anchored shopping centers in the Raleigh-Durham market in April 2002 utilizing a DownREIT structure. These limited partnerships are included in our consolidated financial statements because we exercise financial and operating control. Also, $1.1 million of this increase from 2001 to 2002 results from a gain from the sale of one shopping center at a consolidated partnership that is reported as discontinued operations in the Statements of Consolidated Income and Comprehensive Income. The gain on sale of $19.7 million in 2002 was due primarily to the sale of seven properties. The gain on sale of $8.3 million in 2001 was due primarily to the sale of nine properties. FUNDS FROM OPERATIONS The Board of Governors of the National Association of Real Estate Investment Trusts defines funds from operations as net income (loss) computed in accordance with generally accepted accounting principles, excluding gains or losses from sales of property, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. In addition, NAREIT recommends that extraordinary items not be considered in arriving at FFO. We calculate FFO in a manner consistent with the NAREIT definition. Most industry analysts and equity REITs, including WRI, believe FFO is an alternative measure of performance relative to other REITs. There can be no assurance that FFO presented by WRI is comparable to similarly titled measures of other REITs. FFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity. FFO does not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness. PAGE 22 Funds from operations is calculated as follows (in thousands):

YEAR ENDED DECEMBER 31, ---------------------------------- 2002 2001 2000 ---------- ---------- ---------- Net income available to common shareholders . . . . . . . . . . . . . . . . . $ 112,111 $ 88,839 $ 58,961 Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . 74,870 65,940 53,624 Depreciation and amortization of unconsolidated joint ventures. . . . . . . . 1,985 1,863 1,720 Gain on sale of properties. . . . . . . . . . . . . . . . . . . . . . . . . . (18,614) (8,368) (382) Gain on sale of properties of unconsolidated joint ventures . . . . . . . . . (1,427) ---------- ---------- ---------- Funds from operations . . . . . . . . . . . . . . . . . . . . . 170,352 146,847 113,923 Funds from operations attributable to operating partnership units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,644 180 305 ---------- ---------- ---------- Funds from operations assuming conversion of OP units . . . . . $ 173,996 $ 147,027 $ 114,228 ========== ========== ========== Weighted average shares outstanding - basic . . . . . . . . . . . . . . . . . 51,911 48,104 40,163 Effect of dilutive securities: Share options and awards. . . . . . . . . . . . . . . . . . . . . . . . 327 188 78 Operating partnership units . . . . . . . . . . . . . . . . . . . . . . 1,122 77 156 ---------- ---------- ---------- Weighted average shares outstanding - diluted . . . . . . . . . . . . . . . . 53,360 48,369 40,397 ========== ========== ==========

EFFECTS OF INFLATION The rate of inflation was relatively unchanged in 2002. WRI 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 WRI 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 WRI's leases are for terms of less than ten years, which allows WRI to adjust rental rates to changing market conditions when the leases expire. Most of WRI's leases also 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 WRI's operating results. NEW ACCOUNTING PRONOUNCEMENTS On January 1, 2002, WRI adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses accounting and reporting for the impairment or disposal of a segment of a business. More specifically, this Statement broadens the presentation of discontinued operations to include a component of an entity whose operations and cash flows can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. In 2002, we sold five retail projects located in Houston (3), Grand Prairie and San Antonio, Texas; one industrial building located in Houston, Texas and the River Pointe Apartments located in Conroe, Texas. Accordingly, the operating results and the gain on sale of the disposed properties have been reclassified and reported as discontinued operations in the Statements of Consolidated Income and Comprehensive Income. Included in the December 31, 2001 Consolidated Balance Sheet was $33.0 million of Property and $7.5 million of Accumulated Depreciation associated with the five shopping centers, the industrial building and the multi-family residential project that were sold. PAGE 23 Subsequent to year-end, a warehouse building was sold that was classified as held for sale in 2002. The operating results of this industrial facility have been reclassified and reported as discontinued operations in the Statements of Consolidated Income and Comprehensive Income, and $1.6 million is reported as property held for sale in the Consolidated Balance Sheet at December 31, 2002. In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations", which is effective for fiscal years beginning after June 15, 2002. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The adoption of SFAS No. 143 will not have a material impact on our financial position, results of operations or cash flows. In April 2002, FASB issued SFAS No. 145, "Rescission of SFAS Statements No. 4, 44 and 64, Amendment of SFAS No. 13, and Technical Corrections". The purpose of this statement is to update, clarify and simplify existing accounting standards. We adopted this statement effective April 30, 2002 and determined that the adoption of this statement did not have a material impact on our financial position, results of operations or cash flows. In December 2002, FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure - an amendment of FASB Statement No. 123", which is effective for fiscal years beginning after December 15, 2002. This statement provides alternative methods of transition for an entity that voluntarily changes to the fair value-based method of accounting for stock-based employee compensation. It also amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. We will adopt this statement effective January 1, 2003 using the prospective method, and we do not expect the adoption of this statement to have a material impact on our financial position, results of operations or cash flows. In November 2002, FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others". FIN 45 establishes new disclosure and liability-recognition requirements for direct and indirect debt guarantees with specified characteristics. The initial measurement and recognition requirements of FIN 45 are effective prospectively for guarantees issued or modified after December 31, 2002. However, the disclosure requirements are effective for interim and annual financial-statement periods ending after December 15, 2002. WRI has adopted the disclosure provisions, and management does not expect the full adoption of FIN 45 to have a material impact on the financial position, results of operations or cash flows. In January 2003, FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities". FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. FIN 46 requires disclosures about variable interest entities that a company is not required to consolidate, but in which it has a significant variable interest. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. We will adopt this statement in 2003, and we do not expect the adoption of this statement to have a material impact on our financial position, results of operations or cash flows. FORWARD-LOOKING STATEMENTS This Annual Report includes certain forward-looking statements reflecting WRI's expectations in the near term that involve a number of risks and uncertainties; however, many factors may materially affect the actual results, including demand for our properties, changes in rental and occupancy rates, changes in property operating costs, interest rate fluctuations, and changes in local and general economic conditions. Accordingly, there is no assurance that WRI's expectations will be realized. PAGE 24 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK WRI uses fixed and floating-rate debt to finance its capital requirements. These transactions expose WRI to market risk related to changes in interest rates. Derivative financial instruments are used to manage a portion of this risk, primarily interest rate swap agreements with major financial institutions. These swap agreements expose WRI to credit risk in the event of non-performance by the counter-parties to the swaps. We do not engage in the trading of derivative financial instruments in the normal course of business. At December 31, 2002, WRI had fixed-rate debt of $1.1 billion and variable-rate debt of $274.7 million, after adjusting for the effect of interest rate swaps. We also had variable-rate notes receivable from joint venture partners totaling $61.3 million at year-end. In the event interest rates were to increase 100 basis points, net income, funds from operations and future cash flows would decrease $2.7 million based upon the variable-rate debt and notes receivable outstanding at December 31, 2002. PAGE 25 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 and subsidiaries (the "Company") as of December 31, 2002 and 2001, and the related statements of consolidated income and comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2002. Our audits also included the financial statement schedules listed in the Index at Item 15. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 and subsidiaries at December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. 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. As discussed in Note 2 to the consolidated financial statements, in 2002 the Company changed its method of accounting for the impairment and disposal of long-lived assets to conform to Statement of Financial Accounting Standards No. 144. DELOITTE & TOUCHE LLP Houston, Texas February 24, 2003 PAGE 26

STATEMENTS OF CONSOLIDATED INCOME AND COMPREHENSIVE INCOME (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Year Ended December 31, ------------------------------- 2002 2001 2000 --------- --------- --------- Revenues: Rentals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $359,044 $303,767 $238,742 Interest income. . . . . . . . . . . . . . . . . . . . . . . . . 1,054 1,167 3,538 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,312 4,070 2,888 --------- --------- --------- Total . . . . . . . . . . . . . . . . . . . . . . . 365,410 309,004 245,168 --------- --------- --------- Expenses: Depreciation and amortization. . . . . . . . . . . . . . . . . . 78,481 67,039 53,451 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,863 54,473 43,190 Operating. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,615 47,237 36,534 Ad valorem taxes . . . . . . . . . . . . . . . . . . . . . . . . 44,370 38,210 30,728 General and administrative . . . . . . . . . . . . . . . . . . . 11,148 9,570 8,213 --------- --------- --------- Total . . . . . . . . . . . . . . . . . . . . . . . 255,477 216,529 172,116 --------- --------- --------- Income Before Equity in Earnings of Joint Ventures, Minority Interest in Income of Partnerships, Gain on Sale of Properties and Discontinued Operations. . . . . . . . . . 109,933 92,475 73,052 Equity in Earnings of Joint Ventures . . . . . . . . . . . . . . 4,043 5,547 4,143 Minority Interest in Income of Partnerships. . . . . . . . . . . (3,553) (475) (630) Gain on Sale of Properties . . . . . . . . . . . . . . . . . . . 188 8,339 382 --------- --------- --------- Income Before Discontinued Operations. . . . . . . . . . . . . . . . . 110,611 105,886 76,947 --------- --------- --------- Operating Income from Discontinued Operations. . . . . . . . . . 1,784 2,656 2,054 Gain on Sale of Properties . . . . . . . . . . . . . . . . . . . 19,472 --------- --------- --------- Income from Discontinued Operations . . . . . . . . 21,256 2,656 2,054 --------- --------- --------- Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $131,867 $108,542 $ 79,001 ========= ========= ========= Net Income Available to Common Shareholders. . . . . . . . . . . . . . $112,111 $ 88,839 $ 58,961 ========= ========= ========= Net Income Per Common Share - Basic: Income Before Discontinued Operations. . . . . . . . . . . . . . $ 1.75 $ 1.79 $ 1.42 Discontinued Operations. . . . . . . . . . . . . . . . . . . . . .41 .06 .05 --------- --------- --------- Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.16 $ 1.85 $ 1.47 ========= ========= ========= Net Income Per Common Share - Diluted: Income Before Discontinued Operations. . . . . . . . . . . . . . $ 1.75 $ 1.79 $ 1.41 Discontinued Operations. . . . . . . . . . . . . . . . . . . . . .40 .05 .05 --------- --------- --------- Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.15 $ 1.84 $ 1.46 ========= ========= ========= Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $131,867 $108,542 $ 79,001 --------- --------- --------- Other Comprehensive Income (Loss): Cumulative effect of change in accounting principle (SFAS 133) on other comprehensive loss . . . . . . . . . . . . (1,877) Unrealized derivative gain (loss) on interest rate swaps . . . . 2,065 (2,579) Unrealized derivative gain (loss) on forward-starting interest rate swaps. . . . . . . . . . . . . . . . . . . . . . (159) 1,520 Minimum pension liability adjustment . . . . . . . . . . . . . . (1,572) --------- --------- --------- Other Comprehensive Income (Loss). . . . . . . . . . . . . . . . . . . 334 (2,936) --------- --------- --------- Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . $132,201 $105,606 $ 79,001 ========= ========= =========

See Notes to Consolidated Financial Statements. PAGE 27

CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) December 31, ------------------------ 2002 2001 ----------- ----------- ASSETS Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,695,286 $2,352,393 Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . (460,832) (402,958) ----------- ----------- Property - net . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,234,454 1,949,435 Investment in Real Estate Joint Ventures . . . . . . . . . . . . . . . . . 28,738 25,742 ----------- ----------- Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,263,192 1,975,177 ----------- ----------- Notes Receivable from Real Estate Joint Ventures and Partnerships. . . . . 14,747 6,068 Unamortized Debt and Lease Costs . . . . . . . . . . . . . . . . . . . . . 48,377 42,755 Accrued Rent and Accounts Receivable (net of allowance for doubtful accounts of $4,302 in 2002 and $2,926 in 2001) . . . . . . . . . . . . . 38,256 32,382 Cash and Cash Equivalents. . . . . . . . . . . . . . . . . . . . . . . . . 27,420 12,434 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,897 26,931 ----------- ----------- Total . . . . . . . . . . . . . . . . . . . . . $2,423,889 $2,095,747 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,330,369 $1,070,835 Accounts Payable and Accrued Expenses. . . . . . . . . . . . . . . . . . . 81,488 80,412 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,636 19,542 ----------- ----------- Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,435,493 1,170,789 ----------- ----------- Minority Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,983 3,886 ----------- ----------- 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; aggregate liquidation preference $75,000 . . . . . . . . . . . . 90 90 7.125% Series B cumulative redeemable preferred shares of beneficial interest; 3,600 shares issued and 3,518 and 3,526 shares outstanding in 2002 and 2001; aggregate liquidation preference $87,955 . . . . . . . . . . . . . . . . . 106 106 7.0% Series C cumulative redeemable preferred shares of beneficial interest; 2,300 shares issued and 2,253 and 2,256 shares outstanding in 2002 and 2001; aggregate liquidation preference $112,629. . . . . . . . . . . . . . . . . 67 67 Common Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 150,000; shares issued and outstanding: 52,076 in 2002 and 51,521 in 2001. . . . . . . . . . . . . . . . . . 1,559 1,548 Capital Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,082,046 1,066,757 Accumulated Dividends in Excess of Net Income. . . . . . . . . . . . . (147,853) (144,560) Accumulated Other Comprehensive Loss . . . . . . . . . . . . . . . . . (2,602) (2,936) ----------- ----------- Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . 933,413 921,072 ----------- ----------- Total . . . . . . . . . . . . . . . . . . . . . $2,423,889 $2,095,747 =========== ===========

See Notes to Consolidated Financial Statements. PAGE 28

STATEMENTS OF CONSOLIDATED CASH FLOWS (AMOUNTS IN THOUSANDS) Year Ended December 31, ------------------------------- 2002 2001 2000 ---------- ---------- ---------- Cash Flows from Operating Activities: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 131,867 $ 108,542 $ 79,001 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization. . . . . . . . . . . . . . . . . . . 79,344 68,316 54,597 Equity in earnings of joint ventures . . . . . . . . . . . . . . . (4,043) (5,547) (4,143) Minority interest in income of partnerships. . . . . . . . . . . . 3,553 475 630 Gain on sale of properties . . . . . . . . . . . . . . . . . . . . (19,660) (8,339) (382) Changes in accrued rent and accounts receivable. . . . . . . . . . (9,016) (12,680) (5,071) Changes in other assets. . . . . . . . . . . . . . . . . . . . . . (16,947) (22,869) (15,667) Changes in accounts payable and accrued expenses . . . . . . . . . 2,940 17,307 5,505 Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 1,454 4,573 ---------- ---------- ---------- Net cash provided by operating activities. . . . . . . . . 168,488 146,659 119,043 ---------- ---------- ---------- Cash Flows from Investing Activities: Investment in properties . . . . . . . . . . . . . . . . . . . . . . . (214,128) (471,174) (228,068) Notes receivable: Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,663) (2,895) (37,818) Collections. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,285 7,943 74,420 Proceeds from sale of properties . . . . . . . . . . . . . . . . . . . 45,763 23,146 3,368 Real estate joint ventures and partnerships: Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,355) (1,011) (12,475) Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . 5,229 4,774 3,241 Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (514) ---------- ---------- ---------- Net cash used in investing activities. . . . . . . . . . . (175,869) (439,217) (197,846) ---------- ---------- ---------- Cash Flows from Financing Activities: Proceeds from issuance of: Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275,997 442,650 211,804 Common shares of beneficial interest . . . . . . . . . . . . . . . 13,850 307,722 1,398 Principal payments of debt . . . . . . . . . . . . . . . . . . . . . . (132,189) (329,824) (28,161) Common and preferred dividends paid. . . . . . . . . . . . . . . . . . (135,160) (123,015) (100,376) Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (131) 138 (3,144) ---------- ---------- ---------- Net cash provided by financing activities. . . . . . . . . 22,367 297,671 81,521 ---------- ---------- ---------- Net increase in cash and cash equivalents. . . . . . . . . . . . . . . . . 14,986 5,113 2,718 Cash and cash equivalents at January 1 . . . . . . . . . . . . . . . . . . 12,434 7,321 4,603 ---------- ---------- ---------- Cash and cash equivalents at December 31 . . . . . . . . . . . . . . . . . $ 27,420 $ 12,434 $ 7,321 ========== ========== ==========

See Notes to Consolidated Financial Statements. PAGE 29

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY (AMOUNTS IN THOUSANDS) Years Ended December 31, 2002, 2001 and 2000 Preferred Common Accumulated Accumulated Shares of Shares of Dividends in Deferred Other Beneficial Beneficial Capital Excess of Compensation Comprehensive Interest Interest Surplus Net Income Obligation Loss ------------ ----------- ----------- -------------- -------------- --------------- Balance, January 1, 2000 . . . . . . . . . $ 267 $ 1,320 $ 753,030 $ (108,712) $ (3) Net income . . . . . . . . . . . . . . . 79,001 Shares issued under benefit plans. . . . 2 1,783 Shares issued in exchange for interest in limited partnerships. . . . . . . . 2 3,554 Dividends declared - common shares . . . (80,336) Dividends declared - preferred shares. . (20,040) Redemption of Series B preferred shares. (1) 1 (2) Redemption of Series C preferred shares. (1) 1 (2) Deferred compensation obligation . . . . 3 ------------ ----------- ----------- -------------- -------------- --------------- Balance, December 31, 2000 . . . . . . . . 265 1,326 758,363 (130,087) Net income . . . . . . . . . . . . . . . 108,542 Issuance of common shares. . . . . . . . 216 301,824 Shares issued under benefit plans. . . . 4 6,571 Dividends declared - common shares . . . (103,312) Dividends declared - preferred shares. . (19,703) Redemption of Series B preferred shares. (1) 1 Redemption of Series C preferred shares. (1) 1 (1) Other Comprehensive Loss . . . . . . . . $ (2,936) ------------ ----------- ----------- -------------- -------------- --------------- Balance, December 31, 2001 . . . . . . . . 263 1,548 1,066,757 (144,560) (2,936) Net income . . . . . . . . . . . . . . . 131,867 Issuance of common shares. . . . . . . . 6 9,482 Shares issued under benefit plans. . . . 5 5,807 Dividends declared - common shares . . . (115,404) Dividends declared - preferred shares. . (19,756) Other Comprehensive Income . . . . . . . 334 ------------ ----------- ----------- -------------- -------------- --------------- Balance, December 31, 2002 . . . . . . . . $ 263 $ 1,559 $1,082,046 $ (147,853) $ - $ (2,602) ============ =========== =========== ============== ============== ===============

See Notes to Consolidated Financial Statements. PAGE 30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Weingarten Realty Investors, a Texas real estate investment trust, is engaged in the management, acquisition and development of real estate, primarily anchored neighborhood and community shopping centers and, to a lesser extent, industrial properties. Over 55% of the square footage of WRI's portfolio is in Texas, with the remainder located primarily in the southern half of the United States. WRI's major tenants include supermarkets, discount retailers, drugstores and other merchants who generally sell basic, necessity-type goods and services. WRI currently operates, and intends to operate in the future, as a real estate investment trust. Basis of Presentation The consolidated financial statements include the accounts of WRI and its subsidiaries, as well as 100% of the accounts of joint ventures and partnerships over which WRI exercises financial and operating control and the related amounts of minority interests. All significant intercompany balances and transactions have been eliminated. Investments in joint ventures and partnerships where WRI has the ability to exercise significant influence, but does not exercise financial and operating control, 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. Revenue from tenant reimbursements of taxes, maintenance expenses and insurance is recognized in the period the related expense is recorded. Revenue based on a percentage of tenants' sales is recognized only after the tenant exceeds their sales breakpoint. 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 where the betterment extends the useful life of the asset 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. WRI's properties are reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property may not be recoverable. In such an event, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future on an undiscounted basis to the carrying amount of such property. Such carrying amount would be adjusted, if necessary, to estimated fair value to reflect an impairment in the value of the asset. 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 Debt and lease costs are amortized primarily on a straight-line basis, which approximates the effective interest method, over the terms of the debt and over the lives of leases, respectively. PAGE 31 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 Net income per common share - basic is computed using net income available to common shareholders and the weighted average shares outstanding that have been adjusted for the three-for-two share split described in Note 6. Net income per common share - diluted includes the effect of potentially dilutive securities for the periods indicated, as follows (in thousands):

YEAR ENDED DECEMBER 31, ----------------------------- 2002 2001 2000 --------- -------- -------- Numerator: Net income available to common shareholders - basic. . . . . . . $ 112,111 $ 88,839 $ 58,961 Income attributable to operating partnership units . . . . . . . 2,388 83 131 --------- -------- -------- Net income available to common shareholders - diluted. . . . . . $ 114,499 $ 88,922 $ 59,092 ========= ======== ======== Denominator: Weighted average shares outstanding - basic. . . . . . . . . . . 51,911 48,104 40,163 Effect of dilutive securities: Share options and awards . . . . . . . . . . . . . . . . . . 327 188 78 Operating partnership units. . . . . . . . . . . . . . . . . 1,122 77 156 --------- -------- -------- Weighted average shares outstanding - diluted. . . . . . . . . . 53,360 48,369 40,397 ========= ======== ========

Options to purchase, in millions: .4, .4 and 1.3 common shares in 2002, 2001 and 2000, respectively, were not included in the calculation of net income per common share - diluted as the exercise prices were greater than the average market price for the year. Statements of Cash Flows WRI considers all highly liquid investments with original maturities of three months or less as cash equivalents. WRI issued .1 million common shares of beneficial interest in 2000 valued at $3.6 million in exchange for interests in limited partnerships which had been formed to acquire operating properties. We assumed debt totaling $105.1 million, $165.0 million and $30.7 million in connection with purchases of property during 2002, 2001 and 2000, respectively. Reclassifications Certain reclassifications of prior years' amounts have been made to conform with the current year presentation. NOTE 2. NEWLY ADOPTED ACCOUNTING PRONOUNCEMENTS On January 1, 2002, WRI adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses accounting and reporting for the impairment or disposal of a segment of a business. More specifically, this Statement broadens the presentation of discontinued operations to include a component of an entity whose operations and cash flows can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. PAGE 32 In 2002, we sold five retail projects located in Houston (3), Grand Prairie and San Antonio, Texas; one industrial building located in Houston, Texas and the River Pointe Apartments located in Conroe, Texas. Accordingly, the operating results and the gain on sale of the disposed properties have been reclassified and reported as discontinued operations in the Statements of Consolidated Income and Comprehensive Income. Included in the December 31, 2001 Consolidated Balance Sheet was $33.0 million of Property and $7.5 million of Accumulated Depreciation associated with the five shopping centers, the industrial building and the multi-family residential project that were sold. Subsequent to year-end, a warehouse building was sold that was classified as held for sale in 2002. The operating results of this industrial facility have been reclassified and reported as discontinued operations in the Statements of Consolidated Income and Comprehensive Income, and $1.6 million is reported as property held for sale in the Consolidated Balance Sheet at December 31, 2002. In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations", which is effective for fiscal years beginning after June 15, 2002. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The adoption of SFAS No. 143 will not have a material impact on our financial position, results of operations or cash flows. In April 2002, FASB issued SFAS No. 145, "Rescission of SFAS Statements No. 4, 44 and 64, Amendment of SFAS No. 13, and Technical Corrections". The purpose of this statement is to update, clarify and simplify existing accounting standards. We adopted this statement effective April 30, 2002 and determined that the adoption of this statement did not have a material impact on our financial position, results of operations or cash flows. In December 2002, FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure- an amendment of FASB Statement No. 123", which is effective for fiscal years beginning after December 15, 2002. This statement provides alternative methods of transition for an entity that voluntarily changes to the fair value-based method of accounting for stock-based employee compensation. It also amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. We will adopt this statement effective January 1, 2003 using the prospective method, and we do not expect the adoption of this statement to have a material impact on our financial position, results of operations or cash flows. In November 2002, FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others". FIN 45 establishes new disclosure and liability-recognition requirements for direct and indirect debt guarantees with specified characteristics. The initial measurement and recognition requirements of FIN 45 are effective prospectively for guarantees issued or modified after December 31, 2002. However, the disclosure requirements are effective for interim and annual financial-statement periods ending after December 15, 2002. WRI has adopted the disclosure provisions, and management does not expect the full adoption of FIN 45 to have a material impact on the financial position, results of operations or cash flows. In January 2003, FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities". FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. FIN 46 requires disclosures about variable interest entities that a company is not required to consolidate, but in which it has a significant variable interest. The consolidation requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. We will adopt this statement in 2003, and we do not expect the adoption of this statement to have a material impact on our financial position, results of operations or cash flows. PAGE 33 NOTE 3. DERIVATIVES AND HEDGING On January 1, 2001, WRI adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended. SFAS No. 133 establishes accounting and reporting standards for derivative instruments. Specifically, SFAS No. 133 requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and to measure those instruments at fair value. Additionally, the fair value adjustments will affect either shareholders' equity or net income depending on whether the derivative instrument qualifies as a hedge for accounting purposes and, if so, the nature of the hedging activity. WRI hedges the future cash flows of debt transactions principally through interest rate swaps with major financial institutions. WRI has three interest rate swap contracts with an aggregate notional amount of $45 million, which are designated as cash flow hedges, and eleven interest rate swap contracts with an aggregate notional amount of $107.5 million, which are designated as fair value hedges. In July 2002, one interest rate swap with a notional amount of $25 million matured. On December 31, 2002, the derivative instruments designated as cash flow hedges were reported at their fair values as Other Liabilities, net of accrued interest, of $2.4 million. The derivative instruments designated as fair value hedges on December 31, 2002 were reported at their fair values as Other Assets, net of accrued interest, of $7.7 million. Within the next twelve months, the Company expects to reclassify to earnings as interest expense approximately $1.9 million of the current balance held in accumulated other comprehensive loss. As of December 31, 2002, the balance in accumulated other comprehensive loss relating to the derivatives was $1.0 million. With respect to fair value hedges, both changes in fair market value of the derivative hedging instrument and changes in the fair value of the hedged item will be recorded in earnings each reporting period. These amounts should completely offset with no impact to earnings, except for the portion of the hedge that proves to be ineffective, if any. NOTE 4. DEBT WRI's debt consists of the following (in thousands):

DECEMBER 31, ----------------------- 2002 2001 ----------- ---------- Fixed-rate debt payable to 2030 at 5.1% to 8.8%. . . . . . . . . . . $ 1,097,185 $ 796,913 Variable-rate unsecured notes payable. . . . . . . . . . . . . . . . 75,000 100,000 Unsecured notes payable under revolving credit agreements. . . . . . 119,000 134,500 Obligations under capital leases . . . . . . . . . . . . . . . . . . 33,462 33,554 Industrial revenue bonds payable to 2015 at 1.6% to 3.2% . . . . . . 5,722 5,868 ----------- ---------- Total. . . . . . . . . . . . . . . . . . . . . . . . $ 1,330,369 $1,070,835 =========== ==========

In November 2000, WRI entered into an unsecured $350 million revolving credit agreement with a syndicate of banks. The agreement expires in November 2003, but we can request a one-year extension of the agreement, solely at our option. We also have an agreement for an unsecured and uncommitted overnight credit facility totaling $20 million with a bank to be used for cash management purposes. WRI also has letters of credit totaling $25.4 million outstanding under the $350 million revolving credit facility at December 31, 2002. The revolving credit agreements are subject to normal banking terms and conditions and do not adversely restrict our operations or liquidity. PAGE 34 In July 2001, we entered into a $50 million unsecured term loan with two banks that also participate in our $350 million revolving credit facility. The terms of the $50 million loan, including pricing, are substantially identical to those of our $350 million revolving credit facility, and it also matures on the same date. At December 31, 2002, the variable interest rate for notes payable under the $350 million revolving credit agreement was 1.9%. During 2002, the maximum balance and weighted average balance outstanding under both revolving credit facilities were $191.5 million and $141.5 million, respectively, at an average interest rate of 2.3%. WRI made cash payments for interest on debt, net of amounts capitalized, of $63.1 million in 2002, $42.9 million in 2001 and $40.8 million in 2000. Various leases and properties, and current and future rentals from those leases and properties, collateralize certain debt. At December 31, 2002 and 2001, the carrying value of such property aggregated $688.5 million and $491.3 million, respectively. During the first nine months of 2002, the Company issued a total of $147 million of unsecured fixed-rate medium term notes at a weighted average rate of 6.1% and a weighted average term of 10.2 years. Proceeds received were used to pay down amounts outstanding under our $350 million revolving credit facility. On November 25, 2002, WRI issued a ten-year $32 million medium term note bearing interest at 5.7%, and on December 26, 2002, we issued a ten-year $42 million medium term note bearing interest at 5.7%. Proceeds received were used to pay down amounts outstanding under our $350 million revolving credit facility. In June 2001, WRI entered into two forward-starting interest rate swap contracts with a notional amount of $188.7 million. These contracts were designated as a cash flow hedge of forecasted interest payments for $200 million of unsecured notes with a coupon of 7% that were sold in July 2001. Concurrent with the sale of the 7% notes, we settled our $188.7 million forward-starting interest rate swap contracts, resulting in a gain of $1.6 million recorded in accumulated other comprehensive income. This $1.6 million gain is being amortized to earnings over the life of the 7% notes. In July 2001, we entered into eleven interest rate swaps with an aggregate notional amount of $107.5 million that convert fixed interest payments at rates from 6.4% to 7.4% to variable interest payments. These interest rate swaps have been designated as fair value hedges. We have determined that these contracts will be highly effective in limiting our risk of changes in the fair value of the fixed-rate notes attributable to changes in variable interest rates. WRI has two interest rate swap contracts with an aggregate notional amount of $20 million, which expire in June 2004 and fix interest rates on a like amount of the $350 million revolver at 7.7%. We have determined these swap agreements are highly effective in offsetting future variable interest cash flows of the revolving credit debt and, accordingly, they have been designated as cash flow hedges. An additional interest rate swap contract with a notional amount of $25 million serves as a hedge against changes in interest rates on a $25 million variable-rate medium term note. This swap fixes the interest rate on the medium term note at 6.8% and matures in July 2003. In July 2002, an interest rate swap with a notional amount of $25 million matured. The interest rate swaps decreased interest expense and increased net income by $.8 million in 2002. In 2001 and 2000, the interest rate swaps increased interest expense and decreased net income by $.8 million and $.5 million, respectively. The interest rate swaps decreased the average rate for our debt by .03% for 2002. In 2001 and 2000, the interest rate swaps increased the average rate by .1% for both years. WRI could be exposed to credit losses in the event of non-performance by the counter-party; however, the likelihood of such non-performance is remote. In January 2000, WRI issued $10.5 million of ten-year 8.3% 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 8.3% fixed-rate interest for floating-rate interest. In January 2001, we terminated this swap with the counter-party, resulting in the receipt of $.9 million. As the swap was accounted for as a hedge of the medium term note, the gain is being amortized over the remaining life of the note, which lowers the effective interest rate on the note to 7.4%. PAGE 35 In conjunction with property acquisitions completed during 2002, we assumed $98.3 million of non-recourse debt secured by the related properties. The weighted average interest rate on this debt is 7.5%, and the average remaining life is 7.8 years. Additionally, we assumed non-recourse debt secured by a retail property that is held by a joint venture in which we participate. Our share of this debt totaled $2.6 million with an interest rate of 8.0% and a remaining life of 28 years. In March 2001, we filed a $500 million shelf registration statement, of which $112.9 million is currently available. WRI's debt can be summarized as follows (in thousands):

DECEMBER 31, ------------------------ 2002 2001 ----------- ----------- As to interest rate (including the effects of interest rate swaps): Fixed-rate debt . . . . . . . . . . . . . . . . . $ 1,055,688 $ 780,500 Variable-rate debt. . . . . . . . . . . . . . . . 274,681 290,335 ----------- ----------- Total . . . . . . . . . . . . . . . . $ 1,330,369 $ 1,070,835 =========== ===========

As to collateralization: Unsecured debt. . . . . . . . . . . . . . . . . . $ 958,719 $ 798,524 Secured debt. . . . . . . . . . . . . . . . . . . 371,650 272,311 ----------- ----------- Total . . . . . . . . . . . . . . . . $ 1,330,369 $ 1,070,835 =========== ===========

Subsequent to year-end, the Company issued a total of $136 million of unsecured fixed-rate medium term notes at a weighted average rate of 5.4% and a weighted average term of 11.4 years. Proceeds received were used to pay down amounts outstanding under our $350 million revolving credit facility. Scheduled principal payments on our debt (excluding $119 million due under our revolving credit agreements, $50.0 million term loan, $21 million of capital leases and $7.7 million market value of rate swaps) are due during the following years (in thousands):

2003 . . . . . . $ 66,349 2004 . . . . . . 64,277 2005 . . . . . . 67,177 2006 . . . . . . 54,822 2007 . . . . . . 86,299 2008 . . . . . . 163,639 2009 . . . . . . 66,768 2010 . . . . . . 41,259 2011 . . . . . . 278,873 2012 . . . . . . 87,610 2013 . . . . . . 74,032 2014 . . . . . . 71,743 2015 . . . . . . 6,250 Thereafter . . . 5,550

Various debt agreements contain restrictive covenants, the most restrictive of which requires WRI to maintain a pool of qualifying assets, as defined, of not less than 185% of unsecured debt. Other restrictions include minimum interest and fixed charge coverage ratios, minimum unencumbered interest coverage ratios, minimum net worth requirements and both secured and unsecured debt to total asset value measures. Management believes that WRI is in compliance with all restrictive covenants. PAGE 36 NOTE 5. PREFERRED SHARES In February 1998, WRI issued $75 million of 7.44% Series A cumulative redeemable preferred shares with a liquidation preference of $25 per share. The shares are callable at WRI's option any time after March 31, 2003 and have no stated maturity. In October 1998, WRI issued $90 million of 7.125% Series B cumulative redeemable preferred shares with a liquidation preference of $25 per share and no stated maturity. WRI can elect to redeem the shares anytime after October 20, 2003. The Series B shares are redeemable by the holder only upon their death and are also redeemable in either cash or common shares at our option. There are limitations on the number of shares per shareholder and in the aggregate that may be redeemed per year. In January 1999, WRI issued $115 million of 7.0% Series C cumulative redeemable preferred shares with a liquidation preference of $50 per share and no stated maturity. WRI can elect to redeem these shares anytime after March 15, 2004. The redemption rights of the shareholders and the related restrictions are effectively the same as for the Series B preferred shares. NOTE 6. COMMON SHARES In February 2002, a three-for-two share split, affected in the form of a 50% share dividend, was declared for shareholders of record on April 1, 2002, payable April 15, 2002. We issued 17.3 million common shares of beneficial interest as a result of the share split. All references to the number of shares and per share amounts have been restated to reflect the share split, and an amount equal to the par value of the number of common shares issued has been reclassified to common shares from retained earnings. In February 2002, we completed the sale of .3 million common shares of beneficial interest. Net proceeds to WRI totaled $9.5 million based on a price of $33.65 per share and were used to pay down amounts outstanding under our $350 million revolving credit facility. In January 2001, we issued 6.8 million common shares of beneficial interest in a secondary public offering. In February 2001, the underwriters exercised their over-allotment option and purchased an additional 300,000 shares. Net proceeds to WRI totaled $188.1 million based on a price of $28.13 per share. In May 2001, we issued 1.0 million common shares of beneficial interest in a secondary public offering. Net proceeds of $27.9 million were based on a price of $28.57 per share. In November 2001, we issued 2.7 million common shares of beneficial interest in a secondary public offering. Net proceeds of $86.0 million were based on a price of $33.47 per share. Proceeds from these offerings were used to pay down amounts outstanding under our $350 million revolving credit facility. NOTE 7. PROPERTY WRI's property consists of the following (in thousands):

DECEMBER 31, ------------------------ 2002 2001 ----------- ----------- Land . . . . . . . . . . . . . . $ 497,168 $ 439,332 Land held for development. . . . 23,613 24,131 Land under development . . . . . 44,847 56,414 Buildings and improvements . . . 2,051,065 1,750,059 Construction in-progress . . . . 77,006 82,457 Property held for sale . . . . . 1,587 ----------- ----------- Total. . . . . . . . . . . . $ 2,695,286 $ 2,352,393 =========== ===========

PAGE 37 The following carrying charges were capitalized (in thousands):

YEAR ENDED DECEMBER 31, --------------------------- 2002 2001 2000 -------- -------- ------- Interest . . . . . . $ 9,642 $ 9,698 $ 4,204 Ad valorem taxes . . 974 383 333 -------- -------- ------- Total. . . . . . $ 10,616 $ 10,081 $ 4,537 ======== ======== =======

During 2002, WRI invested $196.2 million through the acquisition of retail operating properties. Additionally, operating partnership units valued at $51.5 million were issued in conjunction with the purchase of seven properties in North Carolina which utilized the DownREIT structure. Including these North Carolina properties, we acquired 15 shopping centers, adding 2.5 million square feet to our portfolio. In 2002, WRI acquired land, either directly or through its interests in joint ventures, at three separate locations for the development of retail shopping centers. During 2002, we invested $70.3 million in new developments. NOTE 8. RELATED PARTY TRANSACTIONS WRI has mortgage bonds and notes receivable from WRI Holdings, Inc. of $2.7 million and $4.0 million, net of deferred gain of $3.0 million at December 31, 2002 and 2001, respectively. WRI and WRI Holdings share certain directors and are under common management. Unimproved land and an investment in a joint venture collateralize these receivables. Management believes that the fair market value of the collateral exceeds the carrying value of the bonds and notes. The bonds and notes bear interest at rates of 16% and prime plus 1%, respectively. However, due to WRI Holdings' poor financial condition, WRI has limited the recognition of interest income for financial statement purposes to the amount of cash payments received. WRI did not receive any interest payments in 2002 or 2001, and does not anticipate receiving such payments in the near term. No interest income has been recognized for financial reporting purposes in the last three years. In 2002, undeveloped land from WRI Holdings of 6.9 acres was sold and the net proceeds of $1.4 million were used to pay down amounts outstanding under mortgage bonds and notes payable to WRI. WRI's unrecorded receivable for interest on the mortgage bonds and notes receivable was $28.1 million and $26.2 million at December 31, 2002 and 2001, respectively. Interest income not recognized by WRI for financial reporting purposes aggregated, in millions, $1.9, $2.5 and $2.7 for 2002, 2001 and 2000, respectively. WRI does not anticipate recovery of the unrecorded receivable in the future. WRI owns interests in several joint ventures and partnerships. Notes receivable from these entities bear interest at 3.8% to 10% at December 31, 2002, are due at various dates through 2028 and are generally secured by real estate assets. WRI recognized interest income on these notes as follows, in millions: $.3 in 2002; $.6 in 2001 and $3.1 in 2000. JPMorgan Chase Bank is a significant participant in, and the agent for, the banks that provide WRI's $350 million revolving credit agreement, and is a counter-party in 13 interest rate swap agreements with WRI. An executive officer of J.P. Morgan Chase & Co. serves on the WRI Board of Trustees. PAGE 38 NOTE 9. INVESTMENT IN REAL ESTATE JOINT VENTURES WRI owns interests in 16 joint ventures or limited partnerships where we do not exercise financial and operating control. These partnerships are accounted for under the equity method since WRI exercises significant influence. Our interests in these joint ventures and limited partnerships range from 20% to 75% and, with the exception of one partnership, which owns seven industrial properties, each venture owns a single real estate asset. Combined condensed financial information of these ventures (at 100%) is summarized as follows (in thousands):

DECEMBER 31, ---------------------- 2002 2001 ---------- ---------- Combined Balance Sheets Property . . . . . . . . . . . . $ 177,396 $ 171,344 Accumulated depreciation . . . . (23,877) (24,941) ---------- ---------- Property - net . . . . . . . 153,519 146,403 Other assets . . . . . . . . . . 11,898 11,373 ---------- ---------- Total. . . . . . . . . $ 165,417 $ 157,776 ========== ========== Debt . . . . . . . . . . . . . . $ 71,985 $ 76,635 Amounts payable to WRI . . . . . 16,334 9,270 Other liabilities. . . . . . . . 4,152 4,705 Accumulated equity . . . . . . . 72,946 67,166 ---------- ---------- Total. . . . . . . . . $ 165,417 $ 157,776 ========== ==========

Year Ended December 31, ---------------------------- 2002 2001 2000 -------- -------- -------- Combined Statements of Income Revenues . . . . . . . . . . . . . . . . $ 25,094 $ 25,548 $ 21,301 -------- -------- -------- Expenses: Interest . . . . . . . . . . . . . . . 6,311 7,082 6,427 Depreciation and amortization. . . . . 4,902 4,519 3,924 Operating. . . . . . . . . . . . . . . 3,430 3,578 3,208 Ad valorem taxes . . . . . . . . . . . 3,220 3,294 2,731 General and administrative . . . . . . 44 46 18 -------- -------- -------- Total. . . . . . . . . . . . . 17,907 18,519 16,308 -------- -------- -------- Gain on sale of properties . . . . . . . 2,854 -------- -------- -------- Net income . . . . . . . . . . . . . . . $ 7,187 $ 9,883 $ 4,993 ======== ======== ========

PAGE 39 Our investment in real estate joint ventures, as reported on the balance sheets, differs from our proportionate share of the joint ventures' underlying net assets due to basis differentials, which arose upon the transfer of assets from WRI to the joint ventures. This basis differential, which totaled $4.8 million and $5.0 million at December 31, 2002 and 2001, respectively, is depreciated over the useful lives of the related assets. Fees earned by WRI for the management of these joint ventures totaled, in millions, $.5 in 2002 and 2001 and $.4 in 2000. In August 2001, WRI sold its interest in two joint ventures, which owned mini-storage warehouses resulting in a gain of $2.9 million. In May 2002, a 50%-owned joint venture commenced construction on Tropicana Beltway Center, a 660,000 square foot center in Las Vegas, Nevada, which will include a corporate-owned Wal-Mart of 224,000 square feet and a corporate-owned Lowe's of 170,000 square feet. In August 2002, a 33%-owned limited partnership commenced construction on Alpine Valley Center, a 240,000 square foot center in American Fork, Utah, which will include a corporate-owned Target of 147,000 square feet. Also, in August 2002, WRI acquired a joint venture partner's 50% interest in a shopping center in Lewiston, Maine. NOTE 10. FEDERAL INCOME TAX CONSIDERATIONS Federal income taxes are not provided because WRI qualifies as a REIT under the provisions of the Internal Revenue Code. Shareholders of WRI include their proportionate taxable income in their individual tax returns. As a REIT, we must distribute at least 90% (95% in 2000) of our ordinary taxable income to our 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 and pension expense. As a result of these differences, the book value of our net assets exceeds the tax basis by $6.5 million at December 31, 2002. For federal income tax purposes, the cash dividends distributed to common shareholders are characterized as follows:

2002 2001 2000 -------- -------- -------- Ordinary income . . . . . . . . . . . . . . . . . 97.1% 92.2% 87.1% Return of capital (generally non-taxable) . . . . 6.2 12.7 Capital gain distributions. . . . . . . . . . . . 2.9 1.6 .2 -------- -------- -------- Total. . . . . . . . . . . . . . 100.0% 100.0% 100.0% ======== ======== ========

NOTE 11. LEASING OPERATIONS WRI'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 (payments for taxes, maintenance and insurance by lessees and an amount based on a percentage of the tenants' sales). Future minimum rental income from non-cancelable tenant leases at December 31, 2002, in millions, is: $287.1 in 2003; $256.3 in 2004; $218.0 in 2005; $177.1 in 2006; $138.5 in 2007 and $687.0 thereafter. The future minimum rental amounts do not include estimates for contingent rentals. Such contingent rentals, in millions, aggregated $72.5 in 2002, $64.0 in 2001 and $50.3 in 2000. PAGE 40 NOTE 12. COMMITMENTS AND CONTINGENCIES On certain properties, WRI leases from the landowners and then subleases these properties to other parties. Future minimum rental payments under these operating leases, in millions, are: $1.5 in 2003; $1.3 in 2004; $1.2 in 2005; $1.0 in 2006; $.8 in 2007; and $18.4 thereafter. Future minimum rental payments on these leases have not been reduced by future minimum sublease rentals aggregating $19.3 million through 2036 that are due under various non-cancelable subleases. Rental expense (including insignificant amounts for contingent rentals) for operating leases aggregated, in millions: $2.7 in 2002, $2.8 in 2001 and $2.5 in 2000. Sublease rental revenue (excluding amounts for improvements constructed by WRI on the leased land) from these leased properties was as follows, in millions: $3.0 in 2002 and 2001 and $3.1 in 2000. Property under capital leases, consisting of four shopping centers, aggregated $29.1 million at December 31, 2002 and 2001, respectively, and is included in buildings and improvements. Amortization of property under capital leases is included in depreciation and amortization expense. Future minimum lease payments under these capital leases total $63.5 million, with annual payments due, in millions, of $1.9 in each of 2003 and 2004; $2.0 in each of 2005, 2006 and 2007; and $53.7 thereafter. The amount of these total payments representing interest is $30.0 million. Accordingly, the present value of the net minimum lease payments is $33.5 million at December 31, 2002. In 1998 and 1997, WRI formed limited partnerships to acquire certain property. WRI exercises operating and financial control of the partnerships and consolidates their operations in the accompanying consolidated financial statements. The partnership agreements allow for the outside limited partners to put their interests to the partnership for the original consideration of $5.7 million payable in cash or WRI common shares at the option of WRI. In 2000, WRI issued .1 million common shares of beneficial interest valued at $3.6 million in exchange for certain of these limited partnership interests. In April 2002, WRI formed two limited partnerships to acquire seven supermarket-anchored shopping centers in the Raleigh-Durham market totaling 1.2 million square feet. These partnership agreements also allow the outside limited partners to put their interests to the partnerships for the original consideration of $51.5 million payable in cash or WRI common shares at the option of WRI. WRI is involved in various matters of litigation arising in the normal course of business. While WRI is unable to predict with certainty the amounts involved, WRI's management and counsel are of the opinion that, when such litigation is resolved, WRI's resulting liability, if any, will not have a material effect on WRI's consolidated financial statements. NOTE 13. FAIR VALUE OF FINANCIAL INSTRUMENTS The fair value of WRI's financial instruments was determined using available market information and appropriate valuation methodologies as of December 31, 2002. Unless otherwise described below, all other financial instruments are carried at amounts which approximate their fair values. Based on rates currently available to WRI for debt with similar terms and average maturities, fixed-rate debt with carrying values of $1.1 billion and $780.5 million have fair values of approximately $1.2 billion and $816.9 million at December 31, 2002 and 2001, respectively. The fair value of WRI's variable-rate debt approximates its carrying values of $274.7 million and $290.3 million at year-end 2002 and 2001, respectively. NOTE 14. SHARE OPTIONS AND AWARDS WRI had an incentive share option plan, which provided for the issuance of options and share awards up to a maximum of 1.1 million common shares that expired in December 1997. Options granted under this plan generally became exercisable in equal increments over a three-year period. WRI has an additional share option plan, which grants 100 share options to every employee of WRI, excluding officers, upon completion of each five-year interval of service. This plan, which expires in 2012, provides options for a maximum of 150,000 common shares. Options granted under this plan are exercisable immediately. For both of these share option plans, options are granted to employees of WRI 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. PAGE 41 In 2002, WRI granted .4 million share options under a compensatory incentive share plan. This plan, which expires in 2003, provides for the issuance of up to 2.6 million shares, either in the form of restricted shares or share options. Prior to 2000, the restricted shares generally vested over a ten-year period, with potential acceleration of vesting due to appreciation in the market value of our common shares. Beginning in 2000, the vesting period is five years. During 2002, the vesting of certain restricted share grants was accelerated pursuant to the terms of the award agreements, due to appreciation in the market share price resulting in additional compensation expense of $.7 million. The share options granted to non-officers vest over a three-year period beginning one year after the date of grant, and over a seven-year period beginning two years after the date of grant for officers. Share options were granted at the quoted fair market value on the date of grant. Restricted shares are issued at no cost to the employee, and as such we recognized compensation expense relating to restricted shares, excluding the effect of accelerated vesting, as follows, in millions: $.7 in 2002 and $.8 in 2001 and $.3 in 2000. In April 2001, the Company adopted the 2001 Long Term Incentive Plan for the issuance of options and share awards up to a maximum of 1.5 million common shares. The plan expires in April 2011. WRI 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. The following table illustrates the effect on net income available to common shareholders and net income per common share had we determined compensation cost for our share option and award plans based on the fair value of the options granted at the grant dates (in thousands, except per share amounts):

YEAR ENDED DECEMBER 31, -------------------------------- 2002 2001 2000 ---------- --------- --------- Net income available to common shareholders . . . . . . . . . . . . $ 112,111 $ 88,839 $ 58,961 Compensation expense based on fair value of options granted . . . . (344) (531) (280) ---------- --------- --------- Pro forma net income available to common shareholders . . . . . . . $ 111,767 $ 88,308 $ 58,681 ========== ========= ========= Net income per common share: Basic - as reported . . . . . . . . . . . . . . . . . . . . . $ 2.16 $ 1.85 $ 1.47 ========== ========= ========= Basic - pro forma . . . . . . . . . . . . . . . . . . . . . . $ 2.15 $ 1.84 $ 1.46 ========== ========= ========= Diluted - as reported . . . . . . . . . . . . . . . . . . . . $ 2.15 $ 1.84 $ 1.46 ========== ========= ========= Diluted - pro forma . . . . . . . . . . . . . . . . . . . . . $ 2.14 $ 1.83 $ 1.46 ========== ========= =========

Effective January 1, 2003, WRI will adopt SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure - an amendment of FASB Statement No. 123". We have elected to use the prospective method of adoption, which requires us to recognize compensation expense as new share options are awarded. 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 in 2002, 2001 and 2000, respectively: dividend yield of 6.0%, 6.6% and 6.9%; expected volatility of 16.5%, 15.3% and 15.4%; expected lives of 7.4, 7.4 and 7.4 and risk-free interest rates of 3.6%, 5.1% and 5.1%. PAGE 42 Following is a summary of the option activity for the three years ended December 31, 2002 (amounts reflect the three-for-two share split in 2002):

SHARES WEIGHTED UNDER AVERAGE OPTION EXERCISE PRICE ----------- -------------- Outstanding, January 1, 2000 . . . . . . . . . . 1,675,185 $ 25.46 Granted. . . . . . . . . . . . . . . . . . . . 557,702 28.11 Canceled . . . . . . . . . . . . . . . . . . . (41,700) 28.11 Exercised. . . . . . . . . . . . . . . . . . . (67,500) 22.93 ----------- Outstanding, December 31, 2000 . . . . . . . . . 2,123,687 26.19 Granted. . . . . . . . . . . . . . . . . . . . 527,460 31.06 Canceled . . . . . . . . . . . . . . . . . . . (166,350) 25.20 Exercised. . . . . . . . . . . . . . . . . . . (429,651) 24.51 ----------- Outstanding, December 31, 2001 . . . . . . . . . 2,055,146 27.87 Granted. . . . . . . . . . . . . . . . . . . . 394,784 36.59 Canceled . . . . . . . . . . . . . . . . . . . (33,316) 29.84 Exercised. . . . . . . . . . . . . . . . . . . (376,455) 25.19 ----------- Outstanding, December 31, 2002 . . . . . . . . . 2,040,159 $ 29.98 ===========

The number of share options exercisable at December 31, 2002, 2001 and 2000 was, in millions: .8, 1.1 and 1.4, respectively. Options exercisable at year-end 2002 had a weighted average exercise price of $26.72. The weighted average fair value per share of options granted during 2002, 2001 and 2000 was $2.62, $2.43 and $1.95, respectively. Share options outstanding at December 31, 2002 had exercise prices ranging from $21.59 to $36.87 and a weighted average remaining contractual life of 6.9 years. There were 1.6 million common shares available for the future grant of options or awards at December 31, 2002. NOTE 15. BANKRUPTCY REMOTE PROPERTIES In April 2001, we purchased 19 supermarket-anchored shopping centers, aggregating 2.5 million square feet, in California. The purchase price for the properties was $277.5 million, including the assumption of approximately $132 million in debt secured by all 19 properties. These 19 properties, having a net book value of approximately $270.7 million at December 31, 2002 (collectively the "Bankruptcy Remote Properties", and each a "Bankruptcy Remote Property"), are wholly owned by various "Bankruptcy Remote Entities". Each Bankruptcy Remote Entity is an indirect subsidiary of the Company. The assets of each Bankruptcy Remote Entity, including the respective Bankruptcy Remote Property or Properties owned by each, are owned by that Bankruptcy Remote Entity alone and are not available to satisfy claims that any creditor may have against the Company, its affiliates, or any other person or entity. No Bankruptcy Remote Entity has agreed to pay or make its assets available to pay creditors of the Company, any of its affiliates, or any other person or entity. Neither the Company nor any of its affiliates has agreed to pay, or make its assets available to pay, creditors of any Bankruptcy Remote Entity (other than any agreement by a Bankruptcy Remote Entity to pay its own creditors). No affiliate of any Bankruptcy Remote Entity has agreed to pay or make its assets available to pay creditors of any Bankruptcy Remote Entity. The accounts of the Bankruptcy Remote Entities are included in WRI's consolidated financial statements, as WRI indirectly owns 100% of each of the entities. Additionally, WRI, through its wholly-owned subsidiaries, makes all day-to-day operating and financial decisions with respect to these properties, subject to approval by the loan servicing agent for certain significant transactions. WRI has the right to prepay the loan, subject to prepayment penalties, at any time, which would eliminate all encumbrances and restrictions. PAGE 43 NOTE 16. EMPLOYEE BENEFIT PLANS WRI has a Savings and Investment Plan pursuant to which eligible employees may elect to contribute from 1% of their salaries to the maximum amount established annually by the Internal Revenue Service. Employee contributions are matched by WRI 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 $.5 million in 2002, $.4 million in 2001 and $.3 million in 2000. Effective April 1, 1999, WRI adopted an Employee Share Purchase Plan under which .4 million of WRI common shares have been authorized. These shares, as well as common shares purchased by WRI on the open market, are made available for sale to employees at a discount of 15%. Shares purchased by the employee under the plan are restricted from being sold for two years from the date of purchase or until termination of employment with WRI. A total of 15,355, 15,861 and 14,639 shares were purchased by employees at an average price of $30.11, $25.84 and $25.15 during 2002, 2001 and 2000, respectively. Prior to April 1, 2002, WRI maintained a non-contributory pension plan covering substantially all of its employees. Effective April 1, 2002, WRI converted to a non-contributory cash balance retirement plan under which each participant received an actuarially-determined opening balance. Annual additions to each participant's account include a service credit ranging from 3-5% of compensation, depending on years of service, and an interest credit based on the ten-year US Treasury Bill rate. Vesting generally occurs after five years of service. Certain participants were grandfathered under the prior pension plan. Reconciliation of the benefit obligation, plan assets at fair value, funded status of the plan and net amount recognized are as follows (in thousands):

2002 2001 --------- --------- Benefit obligation at beginning of year . . . . . . . . . . . . . . . $ 12,197 $ 11,129 Service cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384 556 Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . 807 825 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,407) Assumption changes. . . . . . . . . . . . . . . . . . . . . . . . . . 1,607 Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . 115 (19) Benefit payments. . . . . . . . . . . . . . . . . . . . . . . . . . . (413) (294) --------- --------- Benefit obligation at end of year . . . . . . . . . . . . . . . . . . $ 13,290 $12,197 ========= ========= Fair value of plan assets at beginning of year. . . . . . . . . . . . $ 10,826 $ 12,243 Actual return on plan assets. . . . . . . . . . . . . . . . . . . . . (1,211) (1,095) Benefit payments. . . . . . . . . . . . . . . . . . . . . . . . . . . (432) (322) --------- --------- Fair value of plan assets at end of year. . . . . . . . . . . . . . . $ 9,183 $ 10,826 ========= ========= Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (4,107) $ (1,371) Unrecognized actuarial (gain) loss. . . . . . . . . . . . . . . . . . 3,481 (432) Unrecognized prior service cost . . . . . . . . . . . . . . . . . . . (1,279) --------- --------- Pension liability . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,905) $ (1,803) ========= ========= Amounts recognized in the Consolidated Balance Sheets: Accrued benefit liability . . . . . . . . . . . . . . . . . . . . . . $ (3,477) $ (1,803) Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . 1,572 --------- --------- Net amount recognized . . . . . . . . . . . . . . . . . . . . . . . . $ (1,905) $ (1,803) ========= =========

PAGE 44 The components of net periodic benefit cost are as follows (in thousands):

2002 2001 2000 --------- --------- --------- Service cost . . . . . . . . . . . . . . $ 384 $ 556 $ 539 Interest cost. . . . . . . . . . . . . . 807 825 746 Expected return on plan assets . . . . . (961) (1,092) (1,075) Prior service cost . . . . . . . . . . . (128) Recognized gains . . . . . . . . . . . . (158) (281) --------- --------- --------- Total . . . . . . . . . . . . . $ 102 $ 131 $ (71) ========= ========= =========

Assumptions used to develop periodic expense and the actuarial present value of the benefit obligations were:

2002 2001 2000 --------- --------- --------- Weighted average discount rate . . . . . . . . . . . 6.50% 7.50% 7.50% Expected long-term rate of return on plan assets . . 8.75% 9.00% 9.00% Rate of increase in compensation levels. . . . . . . 4.00% 5.00% 5.00%

WRI also has a non-qualified supplemental retirement plan for officers of WRI, which provides for benefits in excess of the statutory limits of its defined benefit retirement plan. The obligation is funded in a grantor trust with our common shares. We recognized expense as follows, in millions: $.4 in 2002 and 2001 and $.3 in 2000. NOTE 17. 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. Management does not consider the effect of gains or losses from the sale of property in evaluating ongoing operating performance. 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, California, Louisiana, Arizona, Nevada, Arkansas, New Mexico, Oklahoma, Tennessee, Kansas, Colorado, Missouri, Illinois, Florida, North Carolina, Mississippi and Maine. The customer base includes supermarkets, discount retailers, 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, Georgia, Florida 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 45 Information concerning WRI's reportable segments is as follows (in thousands):

SHOPPING CENTER INDUSTRIAL OTHER TOTAL ---------- ---------- --------- ---------- 2002 Revenues . . . . . . . . . . . . . . . . . . . . $ 327,282 $ 36,123 $ 2,005 $ 365,410 Net operating income . . . . . . . . . . . . . . 239,281 24,653 1,491 265,425 Equity in earnings of joint ventures . . . . . . 3,779 314 (50) 4,043 Investment in real estate joint ventures . . . . 28,469 269 28,738 Total assets . . . . . . . . . . . . . . . . . . 2,075,764 212,189 135,936 2,423,889 Capital expenditures . . . . . . . . . . . . . . 374,864 6,395 7,752 389,011 2001 Revenues . . . . . . . . . . . . . . . . . . . . $ 274,661 $ 31,576 $ 2,767 $ 309,004 Net operating income . . . . . . . . . . . . . . 199,638 22,065 1,854 223,557 Equity in earnings of joint ventures . . . . . . 3,696 1,909 (58) 5,547 Investment in real estate joint ventures . . . . 25,094 648 25,742 Total assets . . . . . . . . . . . . . . . . . . 1,775,131 215,782 104,834 2,095,747 Capital expenditures . . . . . . . . . . . . . . 615,144 44,083 3,306 662,533 2000: Revenues . . . . . . . . . . . . . . . . . . . . $ 213,222 $ 27,160 $ 4,786 $ 245,168 Net operating income . . . . . . . . . . . . . . 154,933 18,922 4,051 177,906 Equity in earnings of joint ventures . . . . . . 3,410 907 (174) 4,143 Investment in real estate joint ventures . . . . 25,802 1,046 26,848 Total assets . . . . . . . . . . . . . . . . . . 1,229,340 179,715 89,422 1,498,477 Capital expenditures . . . . . . . . . . . . . . 237,071 22,532 594 260,197

Net operating income reconciles to income before discontinued operations as shown on the Statements of Consolidated Income and Comprehensive Income as follows (in thousands):

2002 2001 2000 --------- --------- --------- Total segment net operating income. . . . . . . . . . $265,425 $223,557 $177,906 Less: Depreciation and amortization . . . . . . . . . . 78,481 67,039 53,451 Interest. . . . . . . . . . . . . . . . . . . . . 65,863 54,473 43,190 General and administrative. . . . . . . . . . . . 11,148 9,570 8,213 Minority interest in income of partnerships . . . 3,553 475 630 Equity in earnings of joint ventures. . . . . . . (4,043) (5,547) (4,143) Gain on sale of properties. . . . . . . . . . . . (188) (8,339) (382) --------- --------- --------- Income before discontinued operations . . . . . . . . $110,611 $105,886 $ 76,947 ========= ========= =========

PAGE 46 NOTE 18. QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized quarterly financial data is as follows (in thousands, except per share amounts that have been restated to reflect the three-for-two share split in April 2002):

FIRST SECOND THIRD FOURTH -------- -------- -------- --------- 2002: Revenues . . . . . . . . . . . . . . . . . . . . . . . . $ 84,381 $ 90,908 $ 93,442 $ 96,679 Net income available to common shareholders. . . . . . . 24,478 26,395 34,486 (1) 26,752 Net income per common share - basic. . . . . . . . . . . 0.47 0.51 0.66 (1) 0.51 Net income per common share - diluted. . . . . . . . . . 0.47 0.51 0.65 (1) 0.51 2001: Revenues . . . . . . . . . . . . . . . . . . . . . . . . $ 66,186 $ 77,567 $ 80,996 $ 84,255 Net income available to common shareholders. . . . . . . 20,392 20,971 22,379 25,097 (1) Net income per common share - basic. . . . . . . . . . . 0.45 0.44 0.46 0.50 (1) Net income per common share - diluted. . . . . . . . . . 0.45 0.43 0.46 0.49 (1) ---------- (1) The change is primarily the result of gains on the sale of property during the quarter.

**** ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. PAGE 47 PART III ITEM 10. TRUST MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information with respect to WRI's Trust Managers and executive officers is incorporated herein by reference to the "Election of Trust Managers" and "Executive Officers" sections of WRI's definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 25, 2003. ITEM 11. EXECUTIVE COMPENSATION Incorporated herein by reference to the "Executive Compensation" section of WRI's definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 25, 2003. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Incorporated herein by reference to the "Share Ownership of Certain Beneficial Owners" section of WRI's definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 25, 2003. The following table summarizes the equity compensation plans under which WRI's common shares may be issued as of December 31, 2002.

Number of shares to be issued upon exercise Weighted average exercise Number of shares of outstanding options, price of outstanding remaining available Plan category warrants and rights options, warrants and rights for future issuance -------------------------------------- ----------------------- ----------------------------- -------------------- Equity compensation plans approved by shareholders . . . . . . . . . . . 2,040,159 $ 29.98 1,633,069 Equity compensation plans not approved by shareholders. . . . . . . . . . . --- --- --- ----------------------- ----------------------------- -------------------- Total . . . . . . . . . 2,040,159 $ 29.98 1,633,069 ======================= ============================= ====================

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Incorporated herein by reference to the "Compensation Committee Interlocks and Insider Participation" section of WRI's definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 25, 2003. ITEM 14. CONTROLS AND PROCEDURES The principal executive officer and principal financial officer have evaluated our disclosure controls and procedures as of a date within 90 days before the filing date of this annual report. Based on this evaluation, the principal executive officer and principal financial officer have concluded that the disclosure controls and procedures effectively ensure that information required to be disclosed in the Company's filings and submissions with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. In addition, the Company has reviewed its internal controls and there have been no significant changes in its internal controls or in other factors that could significantly affect those controls subsequent to the date of its last evaluation. PAGE 48 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) Financial Statements and Financial Statement Schedules: PAGE ---- (1) (A) Independent Auditors' Report . . . . . . . . . . . . . . . 26 (B) Financial Statements (i) Statements of Consolidated Income and Comprehensive Income for the year ended December 31, 2002, 2001 and 2000 . . . . . . . . . . 27 (ii) Consolidated Balance Sheets as of December 31, 2002 and 2001. . . . . . . . . . . . 28 (iii) Statements of Consolidated Cash Flows for the year ended December 31, 2002, 2001 and 2000. . . . . . . . . . . . . . . . . 29 (iv) Statements of Consolidated Shareholders' Equity for the years ended December 31, 2002, 2001 and 2000. . . . . . . . . . . . . . . . . 30 (v) Notes to Consolidated Financial Statements . . . . . 31 (2) Financial Statement Schedules: SCHEDULE PAGE -------- ---- II Valuation and Qualifying Accounts. . . . . . . . . . 56 III Real Estate and Accumulated Depreciation . . . . . . 57 IV Mortgage Loans on Real Estate. . . . . . . . . . . . 59 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: 3.1 - Restated Declaration of Trust (filed as Exhibit 3.1 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 3.2 - Amendment of the Restated Declaration of Trust (filed as Exhibit 3.2 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 3.3 - Second Amendment of the Restated Declaration of Trust (filed as Exhibit 3.3 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 3.4 - Third Amendment of the Restated Declaration of Trust (filed as Exhibit 3.4 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 3.5 - Fourth Amendment of the Restated Declaration of Trust dated April 28, 1999 (filed as Exhibit 3.5 to WRI's Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference). PAGE 49 3.6 - Fifth Amendment of the Restated Declaration of Trust dated April 20, 2001 (filed as Exhibit 3.6 to WRI's Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference). 3.7 - Amended and Restated Bylaws of WRI (filed as Exhibit 99.2 to WRI's Registration Statement on Form 8-A dated February 23, 1998 and incorporated herein by reference). 4.1 - Senior Indenture dated as of May 1, 1995 between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association),as trustee (filed as Exhibit 4(a) to WRI's Registration Statement on Form S-3 (No. 33-57659) and incorporated herein by reference). 4.2 - Subordinated Indenture dated as of May 1, 1995 between WRI and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association) (filed as Exhibit 4(b) to WRI's Registration Statement on Form S-3 (No. 33-57659) and incorporated herein by reference). 4.3 - Form of Fixed Rate Senior Medium Term Note (filed as Exhibit 4.19 to WRI's Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 4.4 - Form of Floating Rate Senior Medium Term Note (filed as Exhibit 4.20 to WRI's Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 4.5 - Form of Fixed Rate Subordinated Medium Term Note (filed as Exhibit 4.21 to WRI's Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 4.6 - Form of Floating Rate Subordinated Medium Term Note (filed as Exhibit 4.22 to WRI's Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference). 4.7 - Statement of Designation of 7.44% Series A Cumulative Redeemable Preferred Shares (filed as Exhibit 99.3 to WRI's Current Report on Form 8-A dated February 23, 1998 and incorporated herein by reference). 4.8 - Statement of Designation of 7.125% Series B Cumulative Redeemable Preferred Shares (filed as Exhibit 4.2 to WRI's Current Report on Form 8-K dated October 28, 1998 and incorporated herein by reference). 4.9 - Statement of Designation of 7.00% Series C Cumulative Redeemable Preferred Shares (filed as Exhibit 4.1 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 4.10 - 7.44% Series A Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4 to WRI's Current Report on Form 8-K dated February 23, 1998 and incorporated herein by reference). 4.11 - 7.125% Series B Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4.1 to WRI's Current Report on Form 8-K dated October 28, 1998 and incorporated herein by reference). 4.12 - 7.00% Series C Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4.2 to WRI's Registration Statement on Form 8-A dated January 19, 1999 and incorporated herein by reference). 4.13 - Form of 7% Notes due 2011 (filed as Exhibit 4.17 to WRI's Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference). 10.1 - 1988 Share Option Plan of WRI, as amended (filed as Exhibit 10.1 to WRI'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 WRI's Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference). 10.3 - The Savings and Investment Plan for Employees of WRI, as amended (filed as Exhibit 4.1 to WRI's Registration Statement on Form S-8 (No. 33-25581) and incorporated herein by reference). 10.4 - The Fifth Amendment to Savings and Investment Plan for Employees of WRI (filed as Exhibit 4.1.1 to WRI's Post-Effective Amendment No. 1 to Registration Statement on Form S-8 (No. 33-25581) and incorporated herein by reference). PAGE 50 10.5 - The 1993 Incentive Share Plan of WRI (filed as Exhibit 4.1 to WRI's Registration Statement on Form S-8 (No. 33-52473) and incorporated herein by reference). 10.6 - 1999 WRI Employee Share Purchase Plan (filed as Exhibit 10.6 to WRI's Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference). 10.7 - 2001 Long Term Incentive Plan (filed as Exhibit 10.7 to WRI's Annual Report on Form 10-K for the year ended December 31, 2001 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 WRI (filed as Exhibit 10.8 to WRI's Annual Report on Form 10-K for the year ended December 31, 1997 and incorporated herein by reference). 10.9 - Master Promissory Note in the amount of $20,000,000 between WRI, as payee, and Chase Bank of Texas, National Association (formerly, Texas Commerce Bank National Association), as maker, effective December 30, 1998 (filed as Exhibit 4.15 to WRI's Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference). 10.10 - Credit Agreement dated November 21, 2000 among WRI, the Lenders Party Hereto and the Chase Manhattan Bank as Administrative Agent (filed as Exhibit 4.25 to WRI's Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference). 10.11 - Credit Agreement dated July 5, 2001 among WRI, the Lenders Party Hereto and Commerzbank AG, as Administrative Agent (filed as Exhibit 4.16 to WRI's Annual Report on Form 10-K for the year ended December 31, 2001 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. 24.1* - Power of Attorney (included on first signature page). 99.1* - Certification certificate for Chief Executive Officer. 99.2* - Certification certificate for Chief Financial Officer. ------------- * Filed with this report. PAGE 51 SIGNATURES 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: /s/ Andrew M. Alexander -------------------------- Andrew M. Alexander Chief Executive Officer

Date: March 17, 2003 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that each of Weingarten Realty Investors, a real estate investment trust organized under the Texas Real Estate Investment Trust Act, and the undersigned trust managers and officers of Weingarten Realty Investors hereby constitutes and appoints Andrew M. Alexander, Stanford Alexander, Martin Debrovner, Stephen C. Richter and Joe D. Shafer or any one of them, its or his true and lawful attorney-in-fact and agent, for it or him and in its or his name, place and stead, in any and all capacities, with full power to act alone, to sign any and all amendments to this Report, and to file each such amendment to the Report, with all exhibits thereto, and any and all other documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorney-in-fact and agent full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises as fully to all intents and purposes as it or he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof. 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 --------- ----- ---- By: /s/ Stanford Alexander Chairman March 17, 2003 ------------------------- Stanford Alexander and Trust Manager By: /s/ Andrew M. Alexander Chief Executive Officer, March 17, 2003 ------------------------- Andrew M. Alexander President and Trust Manager By: /s/ J. Murry Bowden Trust Manager March 17, 2003 ------------------------- J. Murry Bowden By: /s/ James W. Crownover Trust Manager March 17, 2003 ------------------------- James W. Crownover By: /s/ Robert J. Cruikshank Trust Manager March 17, 2003 ------------------------- Robert J. Cruikshank By: /s/ Martin Debrovner Vice Chairman March 17, 2003 ------------------------- Martin Debrovner and Trust Manager

PAGE 52

By: /s/ Melvin Dow Trust Manager March 17, 2003 ------------------------- Melvin Dow By: /s/ Stephen A. Lasher Trust Manager March 17, 2003 ------------------------- Stephen A. Lasher By: /s/ Stephen C. Richter Sr. Vice President and March 17, 2003 ------------------------- Stephen C. Richter Chief Financial Officer By: /s/ Douglas W. Schnitzer Trust Manager March 17, 2003 ------------------------- Douglas W. Schnitzer By: /s/ Marc J. Shapiro Trust Manager March 17, 2003 ------------------------- Marc J. Shapiro By: /s/ Joe D. Shafer Vice President/Controller March 17, 2003 ------------------------- Joe D. Shafer (Principal Accounting Officer)

PAGE 53 CERTIFICATION I, Andrew M. Alexander, Chief Executive Officer of Weingarten Realty Investors certify that: 1. I have reviewed this annual report on Form 10-K of Weingarten Realty Investors; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. BY: /s/ Andrew M. Alexander ----------------------------------- Andrew M. Alexander President/Chief Executive Officer March 17, 2003 PAGE 54 CERTIFICATION I, Stephen C. Richter, Sr. Vice President/Chief Financial Officer of Weingarten Realty Investors certify that: 1. I have reviewed this annual report on Form 10-K of Weingarten Realty Investors; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. BY: /s/ Stephen C. Richter ------------------------------------------ Stephen C. Richter Sr. Vice President/Chief Financial Officer March 17, 2003 PAGE 55 SCHEDULE II

WEINGARTEN REALTY INVESTORS VALUATION AND QUALIFYING ACCOUNTS DECEMBER 31, 2002, 2001 AND 2000 (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 ---------------------------------------- ---------- --------- -------- ---------- ----------- 2002: Allowance for Doubtful Accounts. . . $ 2,926 $ 3,869 $ 2,493 $ 4,302 2001: Allowance for Doubtful Accounts. . . $ 1,884 $ 3,764 $ 2,722 $ 2,926 2000: Allowance for Doubtful Accounts. . . $ 909 $ 1,667 $ 692 $ 1,884

-------- Note A - Write-offs of accounts receivable previously reserved. PAGE 56

SCHEDULE III WEINGARTEN REALTY INVESTORS REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2002 (AMOUNTS IN THOUSANDS) Total Cost ---------------------------------------- Buildings Projects and Under Total Accumulated Encumbrances Land Improvements Development Cost Depreciation (A) ----------- ------------- ------------ ---------- ------------- -------------- SHOPPING CENTERS: Texas. . . . . . . . . . . . . . . $ 171,039 $ 686,318 $ 857,357 $ 279,920 $ 14,088 Other States . . . . . . . . . . . 285,631 1,119,141 1,404,772 123,390 302,012 ----------- ------------- ------------ ---------- ------------- -------------- Total Shopping Centers . . . . 456,670 1,805,459 2,262,129 403,310 316,100 INDUSTRIAL: Texas. . . . . . . . . . . . . . . 31,166 158,812 189,978 40,021 Other States . . . . . . . . . . . 8,798 36,623 45,421 2,061 ----------- ------------- ------------ ---------- ------------- -------------- Total Industrial . . . . . . . 39,964 195,435 235,399 42,082 OFFICE BUILDING: Texas. . . . . . . . . . . . . . . 534 12,069 12,603 6,636 ----------- ------------- ------------ ---------- ------------- -------------- Total Improved Properties. . . 497,168 2,012,963 2,510,131 452,028 316,100 ----------- ------------- ------------ ---------- ------------- -------------- LAND UNDER DEVELOPMENT OR HELD FOR DEVELOPMENT: Texas. . . . . . . . . . . . . . . $ 31,552 31,552 Other States . . . . . . . . . . . 36,908 36,908 ----------- ------------- ------------ ---------- ------------- -------------- Total Land Under Development or Held for Development . . 68,460 68,460 ----------- ------------- ------------ ---------- ------------- -------------- PROPERTY HELD FOR SALE: Other States . . . . . . . . . . . 275 1,312 1,587 ----------- ------------- ------------ ---------- ------------- -------------- Total Property Held For Sale . 275 1,312 1,587 LEASED PROPERTY (SHOPPING CENTERS) UNDER CAPITAL LEASE: Texas. . . . . . . . . . . . . . . 9,048 9,048 471 Other States . . . . . . . . . . . 29,054 29,054 8,333 12,467 ----------- ------------- ------------ ---------- ------------- -------------- Total Leased Property Under Capital Lease . . . . 38,102 38,102 8,804 12,467 ----------- ------------- ------------ ---------- ------------- -------------- CONSTRUCTION IN PROGRESS: Texas. . . . . . . . . . . . . . . 11,104 11,104 Other States . . . . . . . . . . . 65,902 65,902 ----------- ------------- ------------ ---------- ------------- -------------- Total Construction in Progress. . . . . . . . . . 77,006 77,006 ----------- ------------- ------------ ---------- ------------- -------------- TOTAL OF ALL PROPERTIES. . . . $ 497,443 $ 2,052,377 $ 145,466 $2,695,286 $ 460,832 $ 328,567 =========== ============= ============ ========== ============= ============== ------------- Note A - Encumbrances do not include $22.1 million outstanding under a $30 million 20-year term loan, payable to a group of insurance companies secured by a property collateral pool including all or part of three shopping centers.

PAGE 57 SCHEDULE III (CONTINUED) The changes in total cost of the properties for the years ended December 31, 2002, 2001 and 2000 were as follows:

2002 2001 2000 ----------- ----------- ----------- Balance at beginning of year . . . . . . $2,352,393 $1,728,414 $1,486,224 Additions at cost. . . . . . . . . . . . 389,011 662,533 260,197 Retirements or sales . . . . . . . . . . (46,118) (38,554) (18,007) ----------- ----------- ----------- Balance at end of year . . . . . . . . . $2,695,286 $2,352,393 $1,728,414 =========== =========== ===========

The changes in accumulated depreciation for the years ended December 31, 2002, 2001 and 2000 were as follows:

2002 2001 2000 ----------- ----------- ----------- Balance at beginning of year . . . . . . $ 402,958 $ 362,267 $ 319,276 Additions at cost. . . . . . . . . . . . 70,403 58,297 47,208 Retirements or sales . . . . . . . . . . (12,529) (17,606) (4,217) ----------- ----------- ----------- Balance at end of year . . . . . . . . . $ 460,832 $ 402,958 $ 362,267 =========== =========== ===========

PAGE 58 SCHEDULE IV

WEINGARTEN REALTY INVESTORS MORTGAGE LOANS ON REAL ESTATE DECEMBER 31, 2002 (AMOUNTS IN THOUSANDS) FINAL PERIODIC FACE CARRYING INTEREST MATURITY PAYMENT AMOUNT OF AMOUNT OF RATE DATE TERMS MORTGAGES MORTGAGES(A) --------- -------- ------------------ ---------- ------------ SHOPPING CENTERS: FIRST MORTGAGES: Eastex Venture Beaumont, TX (Note D). . . . . . . . 6.75% 10-31-09 $ 314 Annual P & I $ 2,300 $ 1,775 Main/O.S.T., Ltd. Houston, TX (Note D). . . . . . . . 9.3% 02-01-20 $ 476 Annual P & I 4,800 4,327 ($1,241 balloon) INDUSTRIAL: FIRST MORTGAGES: South Loop Business Park Houston, TX (Note D). . . . . . . . 9.25% 11-01-07 $ 74 Annual P & I 439 286 UNIMPROVED LAND: SECOND MORTGAGE: River Pointe, Conroe,TX (Notes B and D) . . . . Prime 12-01-03 Varying 12,000 2,618 +1% ($2,618 balloon) ---------- ------------- TOTAL MORTGAGE LOANS ON REAL ESTATE (Note D) . . . . $ 19,539 $ 9,006 ========== ============= ------------ Note A - The aggregate cost at December 31, 2002 for federal income tax purposes is $9,006. Note B - Principal payments are due monthly to the extent of cash flow generated by the underlying property. Note C - Changes in mortgage loans for the years ended December 31, 2002, 2001 and 2000 are summarized below. Note D - Represents WRI share of mortgage loans to joint ventures.

2002 2001 2000 --------- --------- --------- Balance, Beginning of Year. . . . . . . .$ 10,627 $ 14,327 $ 47,828 Additions to Existing Loans . . . . . . . 173 205 380 Collections of Principal. . . . . . . . . (1,794) (3,905) (33,881) --------- --------- --------- Balance, End of Year. . . . . . . . . . .$ 9,006 $ 10,627 $ 14,327 ========= ========= =========

PAGE 59