HOUSTON--(BUSINESS WIRE)--Weingarten Realty (NYSE: WRI) announced today the results of its operations for the quarter ended March 31, 2011. The supplemental financial package with additional information can be found on the Company’s website under the Investor Relations tab.
First Quarter Operating and Financial Highlights
- Recurring Funds from Operations (“FFO”) increased 2.6% from a year ago to $50.4 million or $0.42 per diluted share. Reported FFO was $50.0 million or $0.41 per diluted share for the quarter;
- Same Property Net Operating Income increased 0.4% from first quarter 2010; and
- Retail occupancy ended the first quarter at 92.3%, slightly above a year ago.
Financial Results
The Company reported net income attributable to common shareholders of $7.2 million or $0.06 per diluted share for the first quarter of 2011, as compared to net income of $10.2 million or $0.08 per share for the same period in 2010.
Recurring FFO for the quarter ended March 31, 2011 was $0.42 per diluted share or $50.4 million. For the same quarter last year, Recurring FFO was $0.41 per diluted share or $49.1 million. The increase in Recurring FFO from the prior year was primarily due to the $196 million of acquisitions that closed in 2010. Reported FFO was $50.0 million or $0.41 per diluted share for the first quarter of 2011 compared to $48.9 million or $0.41 per diluted share for 2010.
The current quarter impairment loss was the result of several small transactions including the sale of two industrial buildings during the quarter and subsequent to quarter end the sale of two tracts of undeveloped land, and the exercise of a purchase option by a tenant of a building in one of our retail centers. The total impairment charge for the first quarter was $0.01 per share.
A reconciliation between net income attributable to common shareholders to Reported FFO and Recurring FFO is listed on page 5 of the supplemental package.
Operating Results
Same Property Net Operating Income (“SPNOI”) for retail properties was up 0.5% compared to negative 2.4% a year ago. These results are primarily driven by leases commencing during the quarter that were signed in earlier quarters. Industrial SPNOI declined slightly during the first quarter; however, the Company’s overall total SPNOI performance increased by 0.4%.
The Company produced strong leasing results during the first quarter for its retail and industrial portfolio with 438 new leases and renewals, totaling 2.2 million square feet. The 438 transactions were comprised of 175 new leases and 263 renewals, which represent annualized revenues of $7.4 million and $17.8 million, respectively.
“We’re very pleased to see significant improvements in our Florida shopping centers. These properties saw an increase in leasing production of 34% and a decrease of 18% in small shop fallout from the first quarter a year ago,” said Johnny Hendrix, Executive Vice President and Chief Operating Officer.
Acquisitions
During the first quarter, the Company purchased Promenade 23 located in Seattle, WA. The Company plans a major redevelopment of this infill property over the next few years. This 97,000 square foot project has a population density of 149,000 within a three mile radius of the center and is currently 91% leased.
Subsequent to quarter end, the Company purchased a 50% joint venture interest in three retail shopping centers all located at the intersection of Atlantic Boulevard and Kernan Boulevard in Jacksonville, FL. These properties include:
1. Kernan Village, a 281,000 square foot project shadow-anchored by Super Wal-Mart that is 100% leased.
2. Atlantic West, a 163,000 square foot project is also currently 100% leased and includes tenants such as TJ Maxx, Shoe Carnival, Dollar Tree and Office Depot.
3. Atlantic North, a 68,000 square foot development property occupied by Academy Sports and Outdoors. The Company has the right, but not the obligation, to participate in the development of the remaining 50 acres of this center.
The four transactions listed above represent a pro rata investment of $33 million.
“While the acquisition market remains very competitive, we still feel confident we will meet our guidance range of $125 to $175 million for the year. We remain disciplined in our approach and are pleased with the progress we have made year-to-date. I believe the assets that we continue to acquire complement our geographic footprint and are in key markets as well as possess strong demographics and household incomes. These assets are a typical example of our ability to execute our 'boots on the ground' approach,” said Drew Alexander, President and Chief Executive Officer.
Dispositions
The Company closed on the sale of two industrial buildings and two outparcels which totaled $3.5 million dollars on a pro rata basis during the first quarter 2011. The industrial properties were located in Georgia and California, and totaled 116,000 square feet.
Dividend
The Board of Trust Managers declared a common dividend of $0.275 per share during the first quarter of 2011. The dividend is payable in cash on June 15, 2011 to shareholders of record on June 3, 2011.
The Board of Trust Managers also declared dividends on the Company’s preferred shares. Dividends related to the 6.75% Series D Cumulative Redeemable Preferred Shares (NYSE:WRIPrD) are $0.421875 per share for the quarter. Dividends on the 6.95% Series E Cumulative Redeemable Preferred Shares (NYSE:WRIPrE) are $0.434375 per share for the same period. Dividends on the 6.50% Series F Cumulative Redeemable Preferred Shares (NYSE:WRIPrF) are $0.40625 per share for the quarter. All preferred dividends are also payable on June 15, 2011 to shareholders of record on June 3, 2011.
Conference Call Information
The Company also announced that it will host a live webcast of its quarterly conference call on May 5, 2011 at 10:00 a.m. Central Time. The live webcast can be accessed via the Company’s website at www.weingarten.com. Alternatively, if you are not able to access the call on the web, you can listen live by phone by calling (877) 763-1324 (conference ID # 50469265). A replay and Podcast will be available through the Company’s web site starting approximately two hours following the live call.
About Weingarten Realty Investors
Weingarten Realty Investors (NYSE: WRI) is a commercial real estate owner, manager and developer. At March 31, 2011, the Company owned or operated under long-term leases, either directly or through its interest in real estate joint ventures or partnerships, a total of 384 developed income-producing properties and 10 properties under various stages of construction and development. The total number of properties includes 314 neighborhood and community shopping centers located in 22 states spanning the country from coast to coast. The Company also owns 77 industrial projects located in California, Florida, Georgia, Tennessee, Texas and Virginia and three other operating properties located in Arizona and Texas. At March 31, 2011, the Company operated a portfolio of properties representing approximately 72.4 million square feet. To learn more about the Company’s operations and growth strategies, please visit www.weingarten.com.
Forward-Looking Statements
Statements included herein that state the Company’s or Management’s intentions, hopes, beliefs, expectations or predictions of the future are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 which by their nature, involve known and unknown risks and uncertainties. The Company’s actual results, performance or achievements could differ materially from those expressed or implied by such statements. Reference is made to the Company’s regulatory filings with the Securities and Exchange Commission for information or factors that may impact the Company’s performance.
| Financial Statements | ||||||||||
| Weingarten Realty Investors | ||||||||||
| (in thousands, except per share amounts) | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | 2011 | 2010 | ||||||||
| AND FUNDS FROM OPERATIONS | (Unaudited) | |||||||||
| Rentals, net | $ | 132,380 | $ | 134,088 | ||||||
| Other Income | 2,746 | 3,017 | ||||||||
| Total Revenues | 135,126 | 137,105 | ||||||||
| Depreciation and Amortization | 38,735 | 36,145 | ||||||||
| Operating Expense | 24,464 | 25,974 | ||||||||
| Real Estate Taxes, net | 16,912 | 16,922 | ||||||||
| Impairment Loss | 770 | 236 | ||||||||
| General and Administrative Expense | 6,556 | 6,591 | ||||||||
| Total Expenses | 87,437 | 85,868 | ||||||||
| Operating Income | 47,689 | 51,237 | ||||||||
| Interest Expense, net | (36,846 | ) | (37,617 | ) | ||||||
| Interest and Other Income, net | 2,055 | 2,863 | ||||||||
| Equity in Earnings of Real Estate Joint Ventures and Partnerships, net | 3,397 | 3,236 | ||||||||
| Gain on Land and Merchant Development Sales | 962 | |||||||||
| Benefit (Provision) for Income Taxes | 316 | (476 | ) | |||||||
| Income from Continuing Operations | 17,573 | 19,243 | ||||||||
| Operating (Loss) Income from Discontinued Operations | (483 | ) | 31 | |||||||
| Gain on Sale of Property from Discontinued Operations | ||||||||||
| (Loss) Income from Discontinued Operations | (483 | ) | 31 | |||||||
| Gain on Sale of Property | 98 | 848 | ||||||||
| Net Income | 17,188 | 20,122 | ||||||||
|
Less: |
Net Income Attributable to Noncontrolling Interests | (1,092 | ) | (1,014 | ) | |||||
| Net Income Adjusted for Noncontrolling Interests | 16,096 | 19,108 | ||||||||
| Less: | Preferred Share Dividends | (8,869 | ) | (8,869 | ) | |||||
| Net Income Attributable to Common Shareholders--Basic | $ | 7,227 | $ | 10,239 | ||||||
| Earnings Per Common Share--Basic | $ | 0.06 | $ | 0.09 | ||||||
| Net Income Attributable to Common Shareholders--Diluted | $ | 7,227 | $ | 10,239 | ||||||
| Earnings Per Common Share--Diluted | $ | 0.06 | $ | 0.08 | ||||||
| Funds from Operations: | ||||||||||
| Net Income Attributable to Common Shareholders | $ | 7,227 | $ | 10,239 | ||||||
| Depreciation and Amortization | 36,928 | 34,454 | ||||||||
| Depreciation and Amortization of Unconsolidated Joint Ventures | 5,964 | 5,023 | ||||||||
| Gain on Sale of Property | (98 | ) | (843 | ) | ||||||
| Loss on Sale of Property of Unconsolidated Joint Ventures | 10 | 2 | ||||||||
| Funds from Operations--Basic | $ | 50,031 | $ | 48,875 | ||||||
| Funds from Operations Per Common Share--Basic | $ | 0.42 | $ | 0.41 | ||||||
| Funds from Operations--Diluted | $ | 50,031 | $ | 48,875 | ||||||
| Funds from Operations Per Common Share--Diluted | $ | 0.41 | $ | 0.41 | ||||||
| Weighted Average Shares Outstanding--Basic | 120,142 | 119,779 | ||||||||
| Weighted Average Shares Outstanding--Diluted | 121,101 | 120,547 | ||||||||
| March 31, | December 31, | |||||||||
| 2011 | 2010 | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | (Unaudited) | (Audited) | ||||||||
| Property | $ | 4,803,498 | $ | 4,777,794 | ||||||
| Accumulated Depreciation | (1,002,631 | ) | (971,249 | ) | ||||||
| Investment in Real Estate Joint Ventures and Partnerships, net | 345,815 | 347,526 | ||||||||
| Notes Receivable from Real Estate Joint Ventures and Partnerships | 183,486 | 184,788 | ||||||||
| Unamortized Debt and Lease Costs, net | 116,794 | 116,437 | ||||||||
| Accrued Rent and Accounts Receivable, net | 74,824 | 95,859 | ||||||||
| Cash and Cash Equivalents | 28,774 | 23,859 | ||||||||
| Restricted Deposits and Mortgage Escrows | 20,954 | 10,208 | ||||||||
| Other, net | 218,995 | 222,633 | ||||||||
| Total Assets | $ | 4,790,509 | $ | 4,807,855 | ||||||
| Debt, net | $ | 2,644,875 | $ | 2,589,448 | ||||||
| Accounts Payable and Accrued Expenses | 80,274 | 126,767 | ||||||||
| Other, net | 107,782 | 111,383 | ||||||||
| Total Liabilities | 2,832,931 | 2,827,598 | ||||||||
| Commitments and Contingencies | ||||||||||
| Preferred Shares of Beneficial Interest | 8 | 8 | ||||||||
| Common Shares of Beneficial Interest | 3,636 | 3,630 | ||||||||
| Accumulated Additional Paid-In Capital | 1,975,962 | 1,969,905 | ||||||||
| Net Income Less Than Accumulated Dividends | (177,731 | ) | (151,780 | ) | ||||||
| Accumulated Other Comprehensive Loss | (21,044 | ) | (21,774 | ) | ||||||
| Shareholders' Equity | 1,780,831 | 1,799,989 | ||||||||
| Noncontrolling Interests | 176,747 | 180,268 | ||||||||
| Total Liabilities, Shareholders' Equity and Noncontrolling Interests | $ | 4,790,509 | $ | 4,807,855 | ||||||