Company Website:
http://www.weingarten.com/home/default.aspx
HOUSTON -- (Business Wire)
Weingarten Realty (NYSE: WRI) announced today the results of its
operations for the fourth quarter and full year ended December 31, 2013.
Fourth Quarter Operating and Financial Highlights
-
Recurring Funds from Operations (“FFO”) was $0.48 per diluted share;
-
Continued progress of the portfolio transformation with $85.3 million
of high quality acquisitions and $38.6 million of non-core
dispositions;
-
Same Property Net Operating Income (“NOI”) increased by 3.0% over the
fourth quarter of the prior year and 4.2% over the full year 2012;
-
Occupancy improved to 94.8% during the fourth quarter, up from 93.6%
in the fourth quarter of last year; and
-
The Board of Trust Managers increased the common dividend per share
6.6% to $0.325 per quarter or $1.30 on an annualized basis.
Financial Results
The Company reported net income attributable to common shareholders of
$47.2 million or $0.38 per diluted share (hereinafter “per share”) for
the fourth quarter of 2013, as compared to $42.9 million or $0.35 per
share for the same period in 2012. For the full year 2013, the Company
reported net income of $184.1 million or $1.50 per share compared to
$109.2 million or $0.90 per share for the full year 2012. Included in
net income for 2013 were, on a per share basis, gains on the sale of
properties and partnership interests of $0.90, a gain on acquisition of
$0.16 and the write off of an above market debt intangible of $.07.
Offsetting these amounts were redemption costs on preferred shares of
$0.15 and a non-cash deferred tax provision of $0.06 related to the gain
on acquisition. Included in 2012 were gains on the sale of properties
and partnership interests of $0.69 per share, offset by non-cash
impairments of $0.28 per share.
Recurring FFO for the fourth quarter of 2013 was $0.48 per share or
$59.5 million. For the same quarter last year, Recurring FFO was $0.47
per share or $58.6 million. This increase in Recurring FFO per share
over the prior year was primarily due to the Company’s acquisition and
new development programs, increased operating income from the existing
portfolio and reduced interest expense due to favorable refinancing
transactions offset by the cost of the sale of non-core assets of $0.03
per share. Recurring FFO for the full year 2013 was $243.1 million or
$1.96 per share compared to $229.4 million or $1.86 per share for 2012.
This increase in Recurring FFO was also primarily due to the Company’s
acquisitions, new development programs, improvements in the existing
portfolio and reduced interest expense offset by the cost of
repositioning the portfolio through non-core asset sales of $0.17 per
share.
For the current quarter, Reported FFO was $51.9 million or $0.42 per
share compared to $57.0 million or $0.46 per share for 2012. Included in
Reported FFO for the fourth quarter of 2013 was a non-cash deferred tax
provision of $0.06 related to a gain on acquisition. For the full year
ended December 31, 2013, Reported FFO was $224.5 million or $1.81 per
share compared to $223.8 million or $1.82 per share for 2012.
A reconciliation of net income to both Reported and Recurring FFO is
shown on the attached financial statement page and is also shown on page
5 of the supplemental package.
Operating Results
Same Property NOI during the fourth quarter increased by 3.0% versus a
year ago. These results are primarily driven by leases that were
previously signed but commenced during the quarter. Occupancy increased
to 94.8% in the fourth quarter, an increase of 40 basis points over the
prior quarter and 120 basis points over the same quarter of 2012.
Occupancy of spaces less than 10,000 square feet increased to 89.0% from
88.2% in the prior year.
The Company produced solid leasing results again during the fourth
quarter with 331 new leases and renewals totaling 1.1 million square
feet and representing $20.3 million of annual revenue. The 331
transactions were comprised of 119 new leases and 212 renewals,
representing annual revenues of $8.4 million and $11.9 million,
respectively. The average rental rate increase on new leases and
renewals signed during the quarter was 6.8% with rental rates on just
new leases up a solid 13.1%.
“With two consecutive years of 4.2% increases in Same Property NOI,
rental rates on new leases up 12.7% for the year and occupancy nearing
95%, it is clear that the transformation of our portfolio is paying
dividends. These accomplishments are a testament to the strength of our
quality portfolio and the exceptional efforts of our associates,” said
Johnny Hendrix, Executive Vice President and Chief Operating Officer.
Portfolio Transformation Through Capital Recycling
As previously announced, the Company sold $38.6 million of assets during
the fourth quarter. This consisted of two shopping centers, the
Company’s share of a center held in a partnership and a land parcel. For
the full year 2013, the Company sold 33 assets, including 24 non-core
shopping centers, three industrial buildings and six land parcels,
comprising 3.9 million square feet for $278.3 million. Subsequent to
quarter-end the Company sold two additional shopping centers for $55.6
million and received notice from the holder of the ground leases at The
Village Arcade in Houston, Texas of their intent to exercise their
purchase option under the ground lease. This transaction is expected to
close in the second half of 2014. Since 2008, the Company has completed
$2.3 billion in dispositions.
During the fourth quarter the Company acquired Mueller Regional Retail
Center in Austin, Texas. Mueller is a 350,000 square foot power center
anchored by Home Depot, Marshalls, Bed Bath & Beyond and PetSmart.
Additionally, the Company added to its investment at Queen Ann
Marketplace in Seattle, Washington by purchasing the 15,034 square foot
condominium interest for the Bartell Drugs store. This property is owned
in a joint venture with Bouwinvest, where the Company owns 51%. The
Company’s share of acquisition activity for the fourth quarter and full
year totaled $85.3 million and $174.6 million, respectively.
In addition to the ongoing acquisition and disposition activity
described above, the Company completed two transactions with joint
venture partners in the fourth quarter and an additional joint venture
transaction subsequent to year-end. These transactions will have an
immaterial impact on future earnings, but will simplify our financial
structure, creating better balance sheet clarity.
First, the Company reported that it closed on a multi-property
transaction with affiliates of Miller Real Estate Investments in Denver,
Colorado, essentially completing the dissolution of this relationship.
The Company reported that it received the remaining 50% interest in
River Point at Sheridan (two consolidated joint ventures), cash, the
repayment of a note receivable and a small building in Salt Lake City,
Utah in exchange for the Company’s interest in two unconsolidated
venture properties, Alpine Valley Center and 300 West, both in Salt Lake
City. River Point is a 519,000 square foot power center anchored by
Target and Costco who own their own facilities. The center is also
anchored by Regal Cinema, Michaels and Tuesday Morning. This project
includes 16.4 acres available for future development.
In the second transaction, the Company purchased control of both phases
of a grocery anchored shopping center in Apple Valley, California (Jess
Ranch Marketplace and Jess Ranch Phase III). The center totals over
502,000 square feet and is anchored by Winco Foods, who owns their own
facility, 24 Hour Fitness, Cinemark Theaters, Bed Bath & Beyond, Ulta
Salon, PetSmart and others.
In January of 2014, the Company completed the dissolution of its
consolidated joint venture with the Hines Retail REIT (“Hines”), where
the Company owned a 30% interest in 13 properties. The transaction was
completed through the distribution of five properties to the Company and
eight properties to Hines. The Company will continue to lease and manage
the properties owned by Hines.
These three joint venture transactions will not materially change the
Company’s 2014 Funds from Operations, but clarifies and simplifies its
balance sheet.
During the year, the Company also redeployed capital into existing new
development projects, investing $13.2 million for the year.
Additional disclosure on specific properties impacted by the
transactions noted above and ground lease commitments are detailed on
page 13 and 40 of the supplemental package, respectively.
“We are extremely pleased with the continued transformation of the
portfolio that occurred during the fourth quarter and its contribution
to our outstanding operating metrics. While our growth in Recurring
Funds from Operations was a reasonable 5.4% year over year, it was
clearly muted by the $0.17 per share decrease due to our disposition
program,” said Drew Alexander, President and Chief Executive Officer.
Balance Sheet
In October, the Company closed on the sale of $250 million of 4.45%
notes due in January 2024. The notes were priced at a slight discount
yielding 4.50%. The proceeds from the transaction were used to pay down
all amounts outstanding under the Company’s $500 million revolving
credit facility with the remainder invested in short-term instruments.
This transaction effectively pre-funded the majority of the Company’s
$285 million of January 2014 debt maturities, which were repaid
subsequent to year-end.
“With the repayment of the $285 million in January, we now have less
than $100 million of debt maturing in the remainder of 2014. We also
expect to exercise our option to call $100 million of 8.1% bonds that
would otherwise mature in 2019. With these transactions, our maturity
schedule is in excellent shape,” said Steve Richter, Executive Vice
President and Chief Financial Officer.
Dividend
On February 13, 2014, the Board of Trust Managers declared an increase
in the common dividend to $0.325 per share for the first quarter of
2014. This represents a 6.6% increase resulting in an annualized
dividend of $1.30 per share. The dividend is payable in cash on March
14, 2014 to shareholders of record on March 6, 2014.
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 March 14, 2014 to
shareholders of record on March 6, 2014.
Recurring FFO Guidance
The Company’s full year Recurring FFO guidance remains in the range of
$1.95 to $2.01 per share. Our specific guidance on dispositions did not
include the two properties that closed subsequent to year-end or the
pending Village Arcade ground lease transaction. Accordingly, we are
raising our disposition guidance from a range of $200 million to $300
million to a range of $300 million to $400 million. All other guidance
remains unchanged. Please refer to the full list of guidance information
found on page 9 of the supplemental package.
Conference Call Information
The Company also announced that it will host a live webcast of its
quarterly conference call on February 14, 2014 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 #
35533138). A replay and 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 shopping center owner,
manager and developer. At December 31, 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 270 properties
which are located in 21 states spanning the country from coast to coast.
These properties represent approximately 49.9 million square feet of
which our interests in these properties aggregated approximately 30.4
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 | | | | | Twelve Months Ended |
| | | | | December 31, | | | | | December 31, |
| | | | | 2013 | | | | 2012 | | | | | 2013 | | | | 2012 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | | | | | (Unaudited) | | | | | (Unaudited) |
Rentals, net
| | | | |
$
|
125,568
| | | | |
$
|
116,578
| | | | | |
$
|
485,829
| | | | |
$
|
445,696
| |
Other Income
| | | | |
|
2,615
|
| | | |
|
2,969
|
| | | | |
|
11,896
|
| | | |
|
11,208
|
|
Total Revenues
| | | | |
|
128,183
|
| | | |
|
119,547
|
| | | | |
|
497,725
|
| | | |
|
456,904
|
|
Depreciation and Amortization
| | | | | |
40,411
| | | | | |
34,968
| | | | | | |
149,493
| | | | | |
129,500
| |
Operating Expense
| | | | | |
26,470
| | | | | |
23,129
| | | | | | |
98,380
| | | | | |
89,902
| |
Real Estate Taxes, net
| | | | | |
15,049
| | | | | |
13,094
| | | | | | |
58,502
| | | | | |
52,699
| |
Impairment Loss
| | | | | |
-
| | | | | |
-
| | | | | | |
2,579
| | | | | |
9,585
| |
General and Administrative Expense
| | | | |
|
6,559
|
| | | |
|
7,444
|
| | | | |
|
25,371
|
| | | |
|
28,538
|
|
Total Expenses
| | | | |
|
88,489
|
| | | |
|
78,635
|
| | | | |
|
334,325
|
| | | |
|
310,224
|
|
Operating Income
| | | | | |
39,694
| | | | | |
40,912
| | | | | | |
163,400
| | | | | |
146,680
| |
Interest Expense, net
| | | | | |
(28,122
|
)
| | | | |
(24,974
|
)
| | | | | |
(97,444
|
)
| | | | |
(106,800
|
)
|
Interest and Other Income, net
| | | | | |
1,898
| | | | | |
1,262
| | | | | | |
7,685
| | | | | |
6,047
| |
Gain on Sale and Acquisition of Real Estate Joint Venture and
Partnership Interests
| | | | | |
22,071
| | | | | |
8,641
| | | | | | |
33,670
| | | | | |
14,203
| |
Equity in Earnings (Losses) of Real Estate Joint Ventures and
Partnerships, net
| | | | | |
20,645
| | | | | |
5,157
| | | | | | |
35,112
| | | | | |
(1,558
|
)
|
Gain on Acquisition
| | | | | |
-
| | | | | |
-
| | | | | | |
-
| | | | | |
1,869
| |
(Provision) Benefit for Income Taxes
| | | | |
|
(7,302
|
)
| | | |
|
412
|
| | | | |
|
(7,051
|
)
| | | |
|
70
|
|
Income from Continuing Operations
| | | | |
|
48,884
|
| | | |
|
31,410
|
| | | | |
|
135,372
|
| | | |
|
60,511
|
|
Operating Income from Discontinued Operations
| | | | | |
1,719
| | | | | |
4,525
| | | | | | |
9,819
| | | | | |
22,287
| |
Gain on Sale of Property from Discontinued Operations
| | | | |
|
2,977
|
| | | |
|
18,865
|
| | | | |
|
119,203
|
| | | |
|
68,619
|
|
Income from Discontinued Operations
| | | | | |
4,696
| | | | | |
23,390
| | | | | | |
129,022
| | | | | |
90,906
| |
Gain on Sale of Property
| | | | |
|
192
|
| | | |
|
175
|
| | | | |
|
762
|
| | | |
|
1,004
|
|
Net Income
| | | | | |
53,772
| | | | | |
54,975
| | | | | | |
265,156
| | | | | |
152,421
| |
Less: Net Income Attributable to Noncontrolling Interests
| | | | |
|
(3,838
|
)
| | | |
|
(1,224
|
)
| | | | |
|
(44,894
|
)
| | | |
|
(5,781
|
)
|
Net Income Adjusted for Noncontrolling Interests
| | | | | |
49,934
| | | | | |
53,751
| | | | | | |
220,262
| | | | | |
146,640
| |
Less: Preferred Share Dividends
| | | | | |
(2,710
|
)
| | | | |
(8,323
|
)
| | | | | |
(18,173
|
)
| | | | |
(34,930
|
)
|
Less: Redemption Costs of Preferred Shares
| | | | |
|
-
|
| | | |
|
(2,500
|
)
| | | | |
|
(17,944
|
)
| | | |
|
(2,500
|
)
|
Net Income Attributable to Common Shareholders -- Basic
| | | | |
$
|
47,224
|
| | | |
$
|
42,928
|
| | | | |
$
|
184,145
|
| | | |
$
|
109,210
|
|
Net Income Attributable to Common Shareholders -- Diluted
| | | | |
$
|
47,668
|
| | | |
$
|
42,928
|
| | | | |
$
|
184,145
|
| | | |
$
|
109,210
|
|
FUNDS FROM OPERATIONS | | | | | | | | | | | | | | | | | | |
Numerator:
| | | | | | | | | | | | | | | | | | |
Net Income Attributable to Common Shareholders
| | | | |
$
|
47,224
| | | | |
$
|
42,928
| | | | | |
$
|
184,145
| | | | |
$
|
109,210
| |
Depreciation and Amortization
| | | | | |
39,805
| | | | | |
37,232
| | | | | | |
152,075
| | | | | |
143,783
| |
Depreciation and Amortization of Unconsolidated Real Estate
| | | | | | | | | | | | | | | | | | |
Joint Ventures and Partnerships
| | | | | |
4,180
| | | | | |
4,694
| | | | | | |
17,550
| | | | | |
20,955
| |
Impairment of Operating Properties and Real Estate Equity Investments
| | | | | |
-
| | | | | |
26
| | | | | | |
457
| | | | | |
15,033
| |
Impairment of Operating Properties of Unconsolidated Real Estate
| | | | | | | | | | | | | | | | | | |
Joint Ventures and Partnerships
| | | | | |
-
| | | | | |
-
| | | | | | |
366
| | | | | |
19,946
| |
Gain on Acquisition Including Associated Real Estate Equity
Investment
| | | | | |
(20,234
|
)
| | | | |
-
| | | | | | |
(20,234
|
)
| | | | |
(1,869
|
)
|
Gain on Sale of Property and Interests in Real Estate Equity
Investments
| | | | | |
(3,797
|
)
| | | | |
(27,636
|
)
| | | | | |
(95,675
|
)
| | | | |
(83,683
|
)
|
Gain on Sale of Property of Unconsolidated Real Estate
| | | | | | | | | | | | | | | | | | |
Joint Ventures and Partnerships
| | | | | |
(15,684
|
)
| | | | |
(689
|
)
| | | | | |
(15,951
|
)
| | | | |
(1,247
|
)
|
Other
| | | | |
|
(1
|
)
| | | |
|
-
|
| | | | |
|
(1
|
)
| | | |
|
-
|
|
Funds from Operations -- Basic
| | | | | |
51,493
| | | | | |
56,555
| | | | | | |
222,732
| | | | | |
222,128
| |
Adjustments for Recurring FFO:
| | | | | | | | | | | | | | | | | | |
Income Attributable to Operating Partnership Units
| | | | | |
444
| | | | | |
427
| | | | | | |
1,780
| | | | | |
1,721
| |
Other Impairment Loss, net of tax
| | | | | |
-
| | | | | |
-
| | | | | | |
2,387
| | | | | |
403
| |
Redemption Costs of Preferred Shares
| | | | | |
-
| | | | | |
2,500
| | | | | | |
18,131
| | | | | |
2,500
| |
Write-off of Debt Costs, net of tax
| | | | | |
-
| | | | | |
(1,650
|
)
| | | | | |
(9,263
|
)
| | | | |
(1,650
|
)
|
Acquisition Costs
| | | | | |
128
| | | | | |
21
| | | | | | |
556
| | | | | |
1,494
| |
Other, net of tax
| | | | |
|
7,423
|
| | | |
|
702
|
| | | | |
|
6,750
|
| | | |
|
2,825
|
|
Recurring Funds from Operations -- Diluted
| | | | |
$
|
59,488
|
| | | |
$
|
58,555
|
| | | | |
$
|
243,073
|
| | | |
$
|
229,421
|
|
Denominator:
| | | | | | | | | | | | | | | | | | |
Weighted Average Shares Outstanding -- Basic
| | | | |
|
121,370
|
| | | |
|
120,871
|
| | | | |
|
121,269
|
| | | |
|
120,696
|
|
Weighted Average Shares Outstanding -- Diluted
| | | | |
|
124,069
|
| | | |
|
121,906
|
| | | | |
|
122,460
|
| | | |
|
121,705
|
|
Weighted Average Shares Outstanding -- Diluted (FFO)
| | | | |
|
124,069
|
| | | |
|
123,471
|
| | | | |
|
124,014
|
| | | |
|
123,283
|
|
PER SHARE DATA | | | | | | | | | | | | | | | | | | |
Earnings Per Common Share -- Basic
| | | | |
$
|
0.39
|
| | | |
$
|
0.36
|
| | | | |
$
|
1.52
|
| | | |
$
|
0.90
|
|
Earnings Per Common Share -- Diluted
| | | | |
$
|
0.38
|
| | | |
$
|
0.35
|
| | | | |
$
|
1.50
|
| | | |
$
|
0.90
|
|
FFO -- Per Diluted Share
| | | | |
$
|
0.42
|
| | | |
$
|
0.46
|
| | | | |
$
|
1.81
|
| | | |
$
|
1.82
|
|
Recurring FFO -- Per Diluted Share
| | | | |
$
|
0.48
|
| | | |
$
|
0.47
|
| | | | |
$
|
1.96
|
| | | |
$
|
1.86
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
Weingarten Realty Investors |
(in thousands)
|
Financial Statements
|
|
|
|
|
| |
|
|
|
| |
| | | | | | | | | |
|
| | | | | December 31, | | | | | December 31, |
| | | | | 2013 | | | | | 2012 |
CONDENSED CONSOLIDATED BALANCE SHEETS | | | | | (Unaudited) | | | | | (Audited) |
ASSETS
| | | | | | | | | | |
| | | | | | | | | |
|
Property
| | | | |
$
|
4,289,276
| | | | | |
$
|
4,399,850
| |
Accumulated Depreciation
| | | | | |
(1,058,040
|
)
| | | | | |
(1,040,839
|
)
|
Property Held for Sale, net
| | | | | |
122,614
| | | | | | |
-
| |
Investment in Real Estate Joint Ventures and Partnerships, net
| | | | | |
266,158
| | | | | | |
289,049
| |
Notes Receivable from Real Estate Joint Ventures and Partnerships
| | | | | |
13,330
| | | | | | |
89,776
| |
Unamortized Debt and Lease Costs, net
| | | | | |
164,828
| | | | | | |
135,783
| |
Accrued Rent and Accounts Receivable, net
| | | | | |
82,351
| | | | | | |
79,540
| |
Cash and Cash Equivalents
| | | | | |
91,576
| | | | | | |
19,604
| |
Restricted Deposits and Mortgage Escrows
| | | | | |
4,502
| | | | | | |
44,096
| |
Other, net
| | | | |
|
247,334
|
| | | | |
|
167,925
|
|
Total Assets
| | | | |
$
|
4,223,929
|
| | | | |
$
|
4,184,784
|
|
| | | | | | | | | |
|
LIABILITIES AND EQUITY
| | | | | | | | | | |
| | | | | | | | | |
|
Debt, net
| | | | |
$
|
2,299,844
| | | | | |
$
|
2,204,030
| |
Accounts Payable and Accrued Expenses
| | | | | |
108,535
| | | | | | |
119,699
| |
Other, net
| | | | |
|
127,572
|
| | | | |
|
120,900
|
|
Total Liabilities
| | | | |
|
2,535,951
|
| | | | |
|
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
| | | | | |
1,679,229
| | | | | | |
1,934,183
| |
Net Income Less Than Accumulated Dividends
| | | | | |
(300,537
|
)
| | | | | |
(335,980
|
)
|
Accumulated Other Comprehensive Loss
| | | | |
|
(4,202
|
)
| | | | |
|
(24,743
|
)
|
Shareholders' Equity
| | | | |
|
1,378,175
|
| | | | |
|
1,577,130
|
|
Noncontrolling Interests
| | | | |
|
309,803
|
| | | | |
|
163,025
|
|
Total Liabilities and Equity
| | | | |
$
|
4,223,929
|
| | | | |
$
|
4,184,784
|
|
| | | | | | | | | | | | | |
|
Contacts:
Weingarten Realty
Michelle Wiggs, (713) 866-6050
Source: Weingarten Realty
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