Weingarten Realty Investors CEO Discusses Q3 2010 - Earnings Call Transcript
Weingarten Realty Investors (
)
Q3 2010 Earnings Call
November 1, 2010 10:00 am ET
Executives
Andrew Alexander – President, Chief Executive Officer
Stanford Alexander – Chairman
Johnny Hendrix – Executive Vice President, Chief Operating Officer
Stephen Richter – Executive Vice President, Chief Financial Officer
Joseph Shafer – Senior Vice President, Chief Accounting Officer
Robert Smith – Senior Vice President, Development
Kristin Horn – Director, Investor Relations
Analysts
Michael Mueller – JP Morgan
Quentin Velleley – Citigroup
Craig Schmidt – Bank of America/Merrill Lynch
Laura Clark – Green Street Advisors
Carol Kemple – Hilliard Lyons
John Sullivan – Cowen Group
Rich Moore – RBC Capital Markets
Vincent Chao – Deutsche Bank
Jay Habermann – Goldman Sachs
Chris Lucas – Robert W. Baird
Presentation
Operator
Compare to:
Previous Statements by WRI
»
Weingarten Realty Investors Q2 2010 Earnings Call Transcript
»
Weingarten Realty Investors Q1 2010 Earnings Call Transcript
»
Weingarten Realty Investors Q4 2009 Earnings Call Transcript
»
Weingarten Realty Investors Q3 2009 Earnings Call Transcript
Good morning. My name is April and I will be your conference operator today. At this time I would like to welcome everyone to the Weingarten Third Quarter Earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key.
Thank you. Ms. Kristin Horn, Director of Investor Relations, you may begin your conference.
Kristin Horn
Good morning and welcome to our third quarter 2010 conference call. Joining me today are Drew Alexander, President and CEO; Stanford Alexander, Chairman; Johnny Hendrix, Executive Vice President and COO; Steve Richter, Executive Vice President and CFO; Joe Shafer, Senior Vice President and Chief Accounting Officer.
As a reminder, certain statements made during the course of this call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results could differ materially from those projected in such forward-looking statements due to a variety of factors. More information about these factors is contained in the Company’s SEC filings.
Also during this conference call, management may make reference to certain non-GAAP financial measures such as funds from operations, or FFO, which we believe help analysts and investors to better understand Weingarten’s operating results. Reconciliation to this non-GAAP financial measure is available in our supplemental information packet located under the Investor Relations tab of the website.
I would also like to request that callers observe a two-question limit during the Q&A portion of our call in order to give everyone a chance to participate. If you have additional questions, please rejoin the queue.
I will now turn the call over to Drew Alexander.
Andrew Alexander
Thanks, Kristin. Good morning everyone and thank you for joining Weingarten’s third quarter conference call.
As we all know, the economic recovery throughout 2010 has been slow and inconsistent. While things are generally better in our world, strong retailer growth will come when the anemic job market sees steady increases. However, as I have discussed, WRI’s operations have stabilized and have been experiencing upward trends for several quarters now.
I appreciate we have had some bumps in the road like Blockbuster, but much of the fallout was expected and factored into our operations and earnings guidance.
As always, we will continue focusing on maximizing operations. While we will also pursue growth opportunities, we do not feel the market has opened up as much as many anticipated. Few good quality assets have traded in the acquisitions market, and when they do, there are many bidders competing.
With that said, we are pleased to announce that we have closed several acquisitions during or subsequent to quarter end and have a reasonable pipeline. As we have stressed, we are focused on markets where we have local expertise – our boots on the ground – as we feel this local knowledge is key, especially in this rocky operating environment.
We also want to continue to stress that we’ll be patient in our approach and only acquire assets that are accretive to FFO and add long-term value to our shareholders.
I’d now like to turn the call over to Steve Richter to discuss the financial results.
Stephen Richter
Thanks, Drew, and good morning to everyone. Weingarten reported Funds From Operations, or FFO, per diluted share of $0.40 versus $0.25 per share during the same time period in 2009. Excluding the non-cash impairment of $0.04 per share, FFO for the quarter was 53.6 million or $0.44 per diluted share, which was $0.02 ahead of Street consensus. I would note, however, that a penny of this was from lease cancellation income.
We continuously review our portfolio for impairments which includes obtaining updated broker opinion of values for any land held for future development locations where we believe market values may be deteriorating further. Our in-depth review during the third quarter resulted in two additional properties incurring small impairments which totaled 4.9 million or $0.04 per share. Half of the impairment charge resulted from a tract of land that is in our land held for future development and currently is under contract to be sold.
While our intent is to develop our excess land, we are occasionally presented with opportunities to sell the land. While I believe we have properly assessed the value of our excess land for impairment purposes, if we are presented with opportunities to monetize some of these properties at reasonable discounts to market value, we may take advantage of those opportunities which could result in additional impairment charges.
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