Weingarten Realty Increases Same Property Net Operating Income by 3.9%
Weingarten Realty Increases Same Property Net Operating Income by 3.9%
HOUSTON--(BUSINESS WIRE)-- Weingarten Realty (NYS: WRI) announced today the results of its operations for the first quarter ended March 31, 2013. The supplemental financial package can be found on the Company's website under the Investor Relations tab.
First Quarter Operating and Financial Highlights
Net income attributable to common shareholders increased to $0.28 per diluted share compared to $0.10 per diluted share in the same quarter last year;
Recurring Funds from Operations ("FFO") increased to $0.48 per diluted share compared to $0.46 per diluted share in the same quarter of last year;
Same Property Net Operating Income ("Same Property NOI") for our portfolio increased by 3.9% over the prior year; and,
Occupancy improved to 93.7% during the quarter, up from 93.6% for the prior quarter.
Financial Results
The Company reported net income attributable to common shareholders of $33.7 million or $0.28 per diluted share (hereinafter "per share") for the first quarter of 2013, as compared to $12.3 million or $0.10 per share for the same period in 2012. Included in net income for 2013 was a write-off of an above-market mortgage intangible from the early pay off of debt of $0.08 per share, offset by non-cash redemption costs of preferred shares of $0.02 per share. Included in 2012 were non-cash impairments of $0.08 per share.
For the current quarter, Reported FFO was $66.0 million or $0.53 per share compared to $56.2 million or $0.46 per share for 2012. Reported FFO for 2012 excludes non-cash impairments of operating properties of $0.08 per share. Recurring FFO for the first quarter of 2013 was $0.48 per share or $58.9 million. For the same quarter last year, Recurring FFO was $0.46 per share or $56.8 million. This increase in Recurring FFO was due to improved operations of the Company's existing portfolio, reduced interest expense due to favorable refinancing transactions and the impact of our 2012 and 2013 acquisitions offset by the significant decrease resulting from the $700 million of dispositions completed in 2012.
A reconciliation of net income to both Reported and Recurring FFO is shown on the attached financial statement and is also shown on page 5 of the supplemental package.
Operating Results
Same Property NOI for the quarter increased 3.9% versus a year ago. Bad debt recoveries, higher than expected percentage rent revenue and a delay in the timing of tenant fallouts all contributed to this solid performance. Increases in occupancy and rental rates resulting from continued strength in leasing operations also contributed to the increase.
The Company produced strong leasing results again during the first quarter with 381 new leases and renewals totaling 1.4 million square feet and representing $22.0 million of annual revenue. The 381 transactions were comprised of 142 new leases and 239 renewals, representing annual revenues of $6.8 million and $15.2 million, respectively. On a cash basis, rental rates for new leases and renewals both increased by 3.9%.
Occupancy increased to 93.7% in the first quarter from 91.7% in the first quarter of 2012 due primarily to the disposition of the industrial portfolio. Occupancy of spaces less than 10,000 square feet increased to 88.2% from 86.8% in the first quarter of 2012.
"This was an outstanding quarter by almost every operational measure. Occupancy and rental rate increases continue to drive Same Property NOI, with a strong increase of 3.9% for the quarter. This performance is a testament to the strength of our operating platform as well as the continued transformation of our outstanding portfolio of properties," said Johnny Hendrix, Executive Vice President and Chief Operating Officer.
Capital Recycling
The Company purchased Sea Ranch Centre, a 99,000 square foot shopping center located near Ft. Lauderdale, Florida, during the quarter. This center is anchored by a high-volume Publix supermarket and CVS. Located on a barrier island, the center has very strong density and limited competition. Combined with the dominant grocer, the Company expects to see significant rent growth as new leases are signed.
Disposition activity continued during the quarter with the sale of one center and four real estate assets owned in unconsolidated joint ventures comprising approximately 860,000 square feet of building area. Our share of gross proceeds totaled $15.7 million.
"We continue to remain focused on our capital recycling program. Our acquisition and disposition pipelines remain active and we believe we will achieve our capital recycling targets as we continue to further improve our already strong portfolio," said Drew Alexander, President and Chief Executive Officer.
Financing Transactions
The Company continues to improve its balance sheet and liquidity. In March, the Company completed the issuance of $300 million of 3.5% ten year notes. With these proceeds, the Company's $500 million revolving credit facility was completely paid down and the entire $75 million of its 6.75% Series D preferred shares were redeemed.
Subsequent to quarter end, the Company finalized an amendment to its revolving credit facility that allowed it to reduce its credit spread and facility fees by 10 basis points and 5 basis points, respectively. More importantly, the maturity was extended to 2017 with two six month extensions at the Company's option.
The Company's credit metrics remain very strong with Net Debt to Recurring EBITDA at 6.18 times and debt to total market capitalization of 35.4% compared to 6.62 times and 40.0% at March 31, 2012.
"These events provide additional liquidity that will allow us to take advantage of growth opportunities as they arise, maintain our strong overall credit metrics and better position us for future debt maturities," said Steve Richter, Executive Vice President and Chief Financial Officer.
Dividend
The Board of Trust Managers declared a quarterly cash dividend of $0.305 per common share payable on June 14, 2013 to shareholders of record on June 6, 2013.
The Board of Trust Managers also declared dividends on the Company's 6.50% Series F Cumulative Redeemable Preferred Shares (NYS: WRIPRF) of $0.40625 per share for the quarter payable on June 14, 2013 to shareholders of record on June 6, 2013.
FFO Guidance
The Company affirms its previous guidance for Recurring FFO of $1.84 to $1.90 per share. It also remains comfortable with its Same Property NOI range of 2-3%, however it is likely the full year results will be towards the top end of that range.
This guidance and the related assumptions are included 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 May 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 # 32913545). 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 (NYS: WRI) is a commercial real estate owner, manager and developer. At March 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 288 developed income-producing properties and two properties under various stages of construction and development. The total number of properties includes 286 neighborhood and community shopping centers and four other operating properties located in 21 states spanning the country from coast to coast. At March 31, 2013, the Company's portfolio of properties was approximately 53.0 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.
Weingarten Realty Investors | ||||||||||||
(in thousands, except per share amounts) | ||||||||||||
Financial Statements | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2013 | 2012 | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | (Unaudited) | |||||||||||
Rentals, net | $ | 129,023 | $ | 116,103 | ||||||||
Other Income | 2,658 | 2,699 | ||||||||||
Total Revenues | 131,681 | 118,802 | ||||||||||
Depreciation and Amortization | 39,719 | 33,231 | ||||||||||
Operating Expense | 25,356 | 22,419 | ||||||||||
Real Estate Taxes, net | 15,202 | 13,810 | ||||||||||
Impairment Loss | 56 | 6,852 | ||||||||||
General and Administrative Expense | 6,667 | 8,307 | ||||||||||
Total Expenses | 87,000 | 84,619 | ||||||||||
Operating Income | 44,681 | 34,183 | ||||||||||
Interest Expense, net | (17,952 | ) | (31,297 | ) | ||||||||
Interest and Other Income, net | 1,826 | 2,386 | ||||||||||
Gain on Sale of Real Estate Joint Venture and Partnership Interests | 11,509 | 5,562 | ||||||||||
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net | 4,613 | 4,075 | ||||||||||
Benefit for Income Taxes | 153 | 22 | ||||||||||
Income from Continuing Operations | 44,830 | 14,931 | ||||||||||
Operating (Loss) Income from Discontinued Operations | (155 | ) | 3,633 | |||||||||
Gain on Sale of Property from Discontinued Operations | - | 3,634 | ||||||||||
(Loss) Income from Discontinued Operations | (155 | ) | 7,267 | |||||||||
Gain on Sale of Property | 142 | 440 | ||||||||||
Net Income | 44,817 | 22,638 | ||||||||||
Less: | Net Income Attributable to Noncontrolling Interests | (1,467 | ) | (1,441 | ) | |||||||
Net Income Adjusted for Noncontrolling Interests | 43,350 | 21,197 | ||||||||||
Less: | Preferred Share Dividends | (7,440 | ) | (8,869 | ) | |||||||
Less: | Redemption Costs of Preferred Shares | (2,242 | ) | - | ||||||||
Net Income Attributable to Common Shareholders -- Basic | $ | 33,668 | $ | 12,328 | ||||||||
Net Income Attributable to Common Shareholders -- Diluted | $ | 33,668 | $ | 12,328 | ||||||||
FUNDS FROM OPERATIONS | ||||||||||||
Numerator: | ||||||||||||
Net Income Attributable to Common Shareholders | $ | 33,668 | $ | 12,328 | ||||||||
Depreciation and Amortization | 38,671 | 37,619 | ||||||||||
Depreciation and Amortization of Unconsolidated Real Estate | ||||||||||||
Joint Ventures and Partnerships | 4,493 | 5,644 | ||||||||||
Impairment of Operating Properties and Real Estate Equity Investments | 292 | 9,779 | ||||||||||
Impairment of Operating Properties of Unconsolidated Real Estate | ||||||||||||
Joint Ventures and Partnerships | 363 | - | ||||||||||
Gain on Sale of Property and Interests in Real Estate Equity Investments | (11,647 | ) | (9,573 | ) | ||||||||
Gain on Sale of Property of Unconsolidated Real Estate | ||||||||||||
Joint Ventures and Partnerships | (243 | ) | - | |||||||||
Funds from Operations -- Basic | 65,597 | 55,797 | ||||||||||
Adjustments for Recurring FFO: | ||||||||||||
Income Attributable to Operating Partnership Units | 445 | 431 | ||||||||||
Other Impairment Loss, net of tax | - | 244 | ||||||||||
Redemption Costs of Preferred Shares | 2,242 | - | ||||||||||
Write-off of Debt Costs, net of tax | (9,667 | ) | - | |||||||||
Acquisition Costs | 285 | 336 | ||||||||||
Recurring Funds from Operations -- Diluted | $ | 58,902 | $ | 56,808 | ||||||||
Denominator: | ||||||||||||
Weighted Average Shares Outstanding -- Basic | 121,058 | 120,481 | ||||||||||
Weighted Average Shares Outstanding -- Diluted | 122,223 | 121,441 | ||||||||||
Weighted Average Shares Outstanding -- Diluted (FFO) | 123,779 | 123,025 | ||||||||||
PER SHARE DATA | ||||||||||||
Earnings Per Common Share -- Basic | $ | 0.28 | $ | 0.10 | ||||||||
Earnings Per Common Share -- Diluted | $ | 0.28 | $ | 0.10 | ||||||||
FFO -- Per Diluted Share | $ | 0.53 | $ | 0.46 | ||||||||
Recurring FFO -- Per Diluted Share | $ | 0.48 | $ | 0.46 | ||||||||
Weingarten Realty Investors | |||||||||||||||
(in thousands) | |||||||||||||||
Financial Statements | |||||||||||||||
March 31, | December 31, | ||||||||||||||
2013 | 2012 | ||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | (Unaudited) | (Audited) | |||||||||||||
ASSETS | |||||||||||||||
Property | $ | 4,425,127 | $ | 4,399,850 | |||||||||||
Accumulated Depreciation | (1,073,361 | ) | (1,040,839 | ) | |||||||||||
Investment in Real Estate Joint Ventures and Partnerships, net | 279,384 | 289,049 | |||||||||||||
Notes Receivable from Real Estate Joint Ventures and Partnerships | 89,013 | 89,776 | |||||||||||||
Unamortized Debt and Lease Costs, net | 137,646 | 135,783 | |||||||||||||
Accrued Rent and Accounts Receivable, net | 70,428 | 79,540 | |||||||||||||
Cash and Cash Equivalents | 54,800 | 19,604 | |||||||||||||
Restricted Deposits and Mortgage Escrows | 43,535 | 44,096 | |||||||||||||
Other, net | 164,396 | 167,925 | |||||||||||||
Total Assets | $ | 4,190,968 | $ | 4,184,784 | |||||||||||
LIABILITIES AND EQUITY | |||||||||||||||
Debt, net | $ | 2,323,620 | $ | 2,204,030 | |||||||||||
Accounts Payable and Accrued Expenses | 87,947 | 119,699 | |||||||||||||
Other, net | 111,661 | 120,900 | |||||||||||||
Total Liabilities | 2,523,228 | 2,444,629 | |||||||||||||
Commitments and Contingencies | |||||||||||||||
EQUITY | |||||||||||||||
Preferred Shares of Beneficial Interest | 4 | 7 | |||||||||||||
Common Shares of Beneficial Interest | 3,671 | 3,663 | |||||||||||||
Additional Paid-In Capital | 1,868,215 | 1,934,183 | |||||||||||||
Net Income Less Than Accumulated Dividends | (339,439 | ) | (335,980 | ) | |||||||||||
Accumulated Other Comprehensive Loss | (25,829 | ) | (24,743 | ) | |||||||||||
Shareholders' Equity | 1,506,622 | 1,577,130 | |||||||||||||
Noncontrolling Interests | 161,118 | 163,025 | |||||||||||||
Total Liabilities and Equity | $ | 4,190,968 | $ | 4,184,784 | |||||||||||
Weingarten Realty
Michelle Wiggs, 713-866-6050
KEYWORDS: United States North America Texas
INDUSTRY KEYWORDS:
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