Weingarten Realty Increases Same Property NOI By 5.0% And Increases FFO Guidance

Weingarten Realty (NYSE: WRI) announced today the results of its operations for the quarter ended June 30, 2013. The supplemental financial package with additional information can be found on the Company's website under the Investor Relations tab.

Second Quarter Operating and Financial Highlights
  • Recurring Funds from Operations ("FFO") for the quarter increased to $0.49 per diluted share from $0.47 per diluted share a year ago;
  • Same Property Net Operating Income increased 5.0% over the same quarter of the prior year;
  • Occupancy increased 0.5% over the prior quarter to 94.2% and 0.4% over the prior quarter to 88.6% for spaces less than 10,000 square feet (referred to as “small shop space”);
  • Acquisitions totaling $71 million and dispositions totaling $108 million were completed since the end of the first quarter; and,
  • 6.50% Series F Cumulative Redeemable Preferred Shares totaling $200 million were redeemed.

Financial Results and Preferred Redemption

The Company reported net income attributable to common shareholders of $45.4 million or $0.37 per diluted share (hereinafter “per share”) for the second quarter of 2013, as compared to $22.6 million or $0.19 per share for the same period in 2012. Included in these operating results for 2013 was a non-cash write-off of preferred redemption costs of $0.13 per share related to the redemption of a portion of the Company’s Series F preferred shares. Included in 2012 were non-cash impairment charges of $0.21 per share. Net income for the six months ended June 30, 2013 was $79.1 million or $0.65 per share compared to $34.9 million or $0.29 per share for 2012.

Reported FFO was $46.1 million or $0.37 per share for the second quarter of 2013, compared to $55.1 million or $0.45 per share for 2012. Included in the 2013 amount was the write-off of preferred redemption costs of $0.13 per share and excluded from 2012 amount are impairments of $0.20 per share, as they relate to operating properties. Year-to-date, Reported FFO was $112.1 million or $0.90 per share for 2013 compared to $111.4 million or $0.90 per share for 2012.

Recurring FFO for the quarter ended June 30, 2013 was $0.49 per share or $61.4 million. For the same quarter last year, Recurring FFO was $0.47 per share or $57.4 million. The increase in Recurring FFO over the prior year was primarily due to increases in net operating income from our existing portfolio, reduced interest expense from favorable debt refinancings and reduced preferred share dividends due to redemptions. These increases were partially offset by the impact of the Company’s disposition program. For the six months, Recurring FFO was $120.3 million or $0.97 per share for 2013 compared to $114.2 million or $0.93 per share for 2012.

A reconciliation between net income attributable to common shareholders to Reported FFO and Recurring FFO is listed on page 5 of the Company’s supplemental package.

On June 5, 2013, the Company completed the redemption of $200 million of its 6.50% Series F Cumulative Redeemable Preferred Shares, leaving $150 million of these Series F shares outstanding. As a result of the transaction, preferred redemption costs totaling $15.9 million were expensed.

Operating Results

Same Property Net Operating Income ("SPNOI") increased by a strong 5.0% for the quarter primarily due to increased occupancy and a reduction in merchant fallouts. Year-to-date, SPNOI increased 4.4%.

Occupancy increased to 94.2% in the second quarter from 93.7% in the prior quarter and by 0.8% from 93.4% in the second quarter of 2012. Occupancy of small shop space increased by 0.4% from the prior quarter and 0.8% from the same quarter of the prior year to 88.6%.

The Company produced strong leasing results during the second quarter with 377 new leases and renewals, totaling 1.4 million square feet. These transactions were comprised of 156 new leases and 221 renewals, which represent annualized revenues of $9.3 million and $11.3 million, respectively. The average rental rate increase on new leases signed during the quarter was an exceptional 19.3%.

“This was a truly outstanding quarter for operations. Both the 5.0% increase in Same Property NOI and the jump in occupancy up to 94.2% are clear reflections of our high quality portfolio and the benefits of a best-in-class operating platform manned by a great team of associates,” said Johnny Hendrix, Executive Vice President and Chief Operating Officer.

Capital Recycling

During the quarter, the Company sold eleven non-core properties, five of which were owned in various joint ventures, and three land parcels for $108.2 million. As communicated previously, the Company is focused on selling assets which do not meet its current investment requirements and redeploying that capital into higher quality assets in its target markets. Year-to-date, the Company has sold $123.9 million in assets.

During the quarter, the Company completed the acquisition of two outstanding shopping centers. Queen Anne Marketplace in Seattle, Washington is a 66,000 square foot shopping center anchored by Metropolitan Market, an upscale neighborhood grocer operating in a densely populated, high barrier-to-entry urban infill location. The three-mile trade area enjoys a population of over 200,000 people with over 68% holding college degrees. This was the first property purchased in a joint venture between the Company and Bouwinvest in which Weingarten will hold a 51% interest. The Company also acquired Independence Plaza, a 324,000 square foot center in Laredo, Texas. This shopping center features a top performing H-E-B, T.J. Maxx, Ross, Hobby Lobby, Petco and Ulta Beauty. Independence Plaza is 97% leased and generates approximately 80% of its income from these national retailers. The Laredo MSA has the largest job growth forecast in the nation over the next 10 years and is influenced by the Eagle Ford Shale and an incredible pent up demand from millions of people in Northern Mexico who have very limited shopping opportunities. Year-to-date, the Company has invested $89.3 million in quality shopping centers in great markets.

“I am extremely pleased with the results of our capital recycling program this quarter. Our very active disposition program generated more than sufficient capital to complete these high quality investments, which are great additions to our already strong portfolio,” said Drew Alexander, President and Chief Executive Officer.

2013 Guidance

The Company is increasing Recurring FFO guidance and revising certain other guidance metrics as follows:
     

Original Guidance
   

Revised Guidance
Recurring FFO Per Diluted Share $1.84 - $1.90 $1.89 - $1.93
Same Property NOI +2% to +3% +3% to +3.5%
Acquisitions $175-$225 million $100-$150 million
New Development $25-$75 million $15-$50 million
Dispositions $200 - $300 million $250 - $350 million
 

Dividends

The Board of Trust Managers declared a quarterly cash dividend of $0.305 per common share payable on September 13, 2013 to shareholders of record on September 5, 2013.

The Board of Trust Managers also declared dividends on the Company’s 6.50% Series F Cumulative Redeemable Preferred Shares (NYSE:WRIPrF) of $0.40625 per share for the quarter payable on September 13, 2013 to shareholders of record on September 5, 2013.

Conference Call Information

The Company also announced that it will host a live webcast of its quarterly conference call on August 1, 2013 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 (888) 771-4371 (conference ID # 32913549). A replay will be available through the Company’s website starting approximately two hours following the live call.

About Weingarten Realty Investors

Weingarten Realty Investors (NYSE: WRI) is a shopping center owner, manager and developer. At June 30, 2013, 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 281 properties which are located in 21 states spanning the country from coast to coast. These properties represent approximately 51.5 million square feet of which our interests in these properties aggregated approximately 30.8 million square feet of leasable area. 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.
Weingarten Realty Investors
(in thousands, except per share amounts)
Financial Statements
                     
Three Months Ended Six Months Ended
June 30,

June 30,
2013 2012 2013 2012
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Unaudited)
Rentals, net $ 127,828 $ 116,013 $ 251,890 $ 227,951
Other Income   3,749     2,584     6,389     5,262  
Total Revenues   131,577     118,597     258,279     233,213  
Depreciation and Amortization 38,190 32,465 76,895 64,731
Operating Expense 25,003 22,906 49,452 44,520
Real Estate Taxes, net 15,444 13,976 30,104 27,268
Impairment Loss 165 2,536 221 9,388
General and Administrative Expense   6,194     6,378     12,861     14,685  
Total Expenses   84,996     78,261     169,533     160,592  
Operating Income 46,581 40,336 88,746 72,621
Interest Expense, net (28,772 ) (28,628 ) (46,175 ) (59,359 )
Interest and Other Income, net 2,098 582 3,924 2,968
Gain on Sale of Real Estate Joint Venture and Partnership Interests 83 - 11,592 5,562
Equity in Earnings (Losses) of Real Estate Joint Ventures and Partnerships, net 4,729 (15,695 ) 9,342 (11,620 )
(Provision) Benefit for Income Taxes   (197 )   279     (33 )   313  
Income (Loss) from Continuing Operations   24,522     (3,126 )   67,396     10,485  
Operating Income from Discontinued Operations 1,379 4,539 3,180 9,492
Gain on Sale of Property from Discontinued Operations   78,012     31,264     78,012     34,898  
Income from Discontinued Operations 79,391 35,803 81,192 44,390
Gain on Sale of Property   265     84     407     524  
Net Income 104,178 32,761 148,995 55,399

Less: Net Income Attributable to Noncontrolling Interests
  (37,742 )   (1,342 )   (39,209 )   (2,783 )
Net Income Adjusted for Noncontrolling Interests 66,436 31,419 109,786 52,616

Less: Preferred Share Dividends
(5,313 ) (8,869 ) (12,753 ) (17,738 )

Less: Redemption Costs of Preferred Shares
  (15,702 )   -     (17,944 )   -  
Net Income Attributable to Common Shareholders -- Basic $ 45,421   $ 22,550   $ 79,089   $ 34,878  
 

Net Income Attributable to Common Shareholders -- Diluted
$ 45,421   $ 22,550   $ 79,089   $ 34,878  
 
FUNDS FROM OPERATIONS
Numerator:
Net Income Attributable to Common Shareholders $ 45,421 $ 22,550 $ 79,089 $ 34,878
Depreciation and Amortization 37,511 33,321 76,182 70,940
Depreciation and Amortization of Unconsolidated Real Estate
Joint Ventures and Partnerships 4,434 5,363 8,927 11,007
Impairment of Operating Properties and Real Estate Equity Investments 165 5,051 457 14,830
Impairment of Operating Properties of Unconsolidated Real Estate
Joint Ventures and Partnerships 3 19,889 366 19,889
Gain on Sale of Property and Interests in Real Estate Equity Investments (41,906 ) (31,334 ) (53,553 ) (40,907 )
Gain on Sale of Property of Unconsolidated Real Estate
Joint Ventures and Partnerships   -     (123 )   (243 )   (123 )
Funds from Operations -- Basic 45,628 54,717 111,225 110,514
Adjustments for Recurring FFO:
Income Attributable to Operating Partnership Units 446 432 891 863
Other Impairment Loss, net of tax - - - 244
Redemption Costs of Preferred Shares 15,889 - 18,131 -
Write-off of Debt Costs, net of tax - - (9,667 ) -
Acquisition Costs 125 156 410 492
Other, net of tax   (673 )   2,123     (673 )   2,123  
Recurring Funds from Operations -- Diluted $ 61,415   $ 57,428   $ 120,317   $ 114,236  
 
Denominator:
Weighted Average Shares Outstanding -- Basic   121,286     120,661     121,172     120,571  
 
Weighted Average Shares Outstanding -- Diluted   122,574     120,661     122,395     120,571  
 
Weighted Average Shares Outstanding -- Diluted (FFO)   124,129     123,277     123,951     123,145  
 
PER SHARE DATA
Earnings Per Common Share -- Basic $ 0.37   $ 0.19   $ 0.65   $ 0.29  
 
Earnings Per Common Share -- Diluted $ 0.37   $ 0.19   $ 0.65   $ 0.29  
 
FFO -- Per Diluted Share $ 0.37   $ 0.45   $ 0.90   $ 0.90  
 
Recurring FFO -- Per Diluted Share $ 0.49   $ 0.47   $ 0.97   $ 0.93  
 
Weingarten Realty Investors
(in thousands)
Financial Statements
           
 
June 30, December 31,
2013 2012
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Audited)
ASSETS
 
Property $ 4,373,891 $ 4,399,850
Accumulated Depreciation (1,052,585 ) (1,040,839 )
Property Held for Sale, net 8,698 -
Investment in Real Estate Joint Ventures and Partnerships, net 285,666 289,049
Notes Receivable from Real Estate Joint Ventures and Partnerships 85,004 89,776
Unamortized Debt and Lease Costs, net 140,938 135,783
Accrued Rent and Accounts Receivable, net 70,572 79,540
Cash and Cash Equivalents 23,374 19,604
Restricted Deposits and Mortgage Escrows 9,490 44,096
Other, net   174,266     167,925  
Total Assets $ 4,119,314   $ 4,184,784  
 
LIABILITIES AND EQUITY
 
Debt, net $ 2,350,762 $ 2,204,030
Accounts Payable and Accrued Expenses 107,173 119,699
Other, net   110,029     120,900  
Total Liabilities   2,567,964     2,444,629  
 
Commitments and Contingencies
 
EQUITY
 
Preferred Shares of Beneficial Interest 2 7
Common Shares of Beneficial Interest 3,683 3,663
Additional Paid-In Capital 1,689,278 1,934,183
Net Income Less Than Accumulated Dividends (331,208 ) (335,980 )
Accumulated Other Comprehensive Loss   (15,664 )   (24,743 )
Shareholders' Equity   1,346,091     1,577,130  
Noncontrolling Interests   205,259     163,025  
Total Liabilities and Equity $ 4,119,314   $ 4,184,784  

Copyright Business Wire 2010

If you liked this article you might like

Ex-Dividends To Watch: 3 Stocks Going Ex-Dividend Monday: SNR, GES, WRI

Ex-Dividends To Watch: 3 Stocks Going Ex-Dividend Monday: SNR, GES, WRI

Insider Trading Alert - KTEC, TRC And WRI Traded By Insiders

Insider Trading Alert - KTEC, TRC And WRI Traded By Insiders

Insider Trading Alert - RNG, CF And WRI Traded By Insiders

Insider Trading Alert - RNG, CF And WRI Traded By Insiders

Buy These Top 3 Buy-Rated Dividend Stocks Today: LAMR, WRI, VTR

Buy These Top 3 Buy-Rated Dividend Stocks Today: LAMR, WRI, VTR

Buy-Rated Dividend Stocks: Top 3 Companies: EGP, NAT, WRI

Buy-Rated Dividend Stocks: Top 3 Companies: EGP, NAT, WRI