UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 9, 2004
WEINGARTEN REALTY INVESTORS
(Exact name of Registrant as specified in its Charter)
Texas 1-9876 74-1464203
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification Number)
2600 Citadel Plaza Drive, Suite 300, Houston, Texas 77008
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 866-6000
Not applicable
(Former name or former address, if changed since last report)
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
During the six months ended June 30, 2004, we acquired ten retail shopping
centers and one industrial project. Also, we acquired four shopping centers,
each through a 50% unconsolidated joint venture, and acquired our joint venture
partners' interest in four shopping centers. Material factors considered in
each of the acquisitions made by us include historical and prospective financial
performance of the center, credit quality of the tenancy, local and regional
demographics, location and competition, ad valorem tax rates, condition of the
property and the related anticipated level of capital expenditures required. We
are not aware of any additional material factors that would cause the reported
financial information not to be necessarily indicative of future operating
results. The total investment in acquisitions during the six month period
ending June 30, 2004 was $390 million. Audited financial statements for
Harrison Pointe Shopping Center, Leesville Shopping Center, the TFK Portfolio,
Pavilions at San Mateo, Rockwall Market Center and Lone Star Pavilions (the
"Acquired Properties") are submitted in ITEM 9.01 below. Unaudited pro forma
financial information on the Acquired Properties and other acquisitions are
submitted in ITEM 9.01 below.
ITEM 9.01 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following financial statements, pro forma financial statements and
exhibits are filed as part of this report:
(a) Financial statements of businesses acquired:
1. Harrison Pointe Shopping Center
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for the
Year Ended December 31, 2003
(iii) Notes to Statement of Revenues and Certain
Expenses
2. Leesville Shopping Center
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for
the Year Ended December 31, 2003
(iii) Notes to Statement of Revenues and Certain
Expenses
3. TFK Portfolio
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for
the Year Ended December 31, 2003
(iii) Notes to Statement of Revenues and Certain
Expenses
(iv) Statement of Revenues and Certain Expenses for the
period from January 1, 2004 through February 28,
2004 (unaudited)
2
4. Pavilions at San Mateo
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for
the Year Ended December 31, 2003
(iii) Notes to Statement of Revenues and Certain
Expenses
(iv) Statement of Revenues and Certain Expenses for the
period from January 1, 2004 through April 29,
2004 (unaudited)
5. Rockwall Market Center
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for
the Year Ended December 31, 2003
(iii) Notes to Statement of Revenues and Certain
Expenses
(iv) Statement of Revenues and Certain Expenses for the
period from January 1, 2004 through April 29,
2004 (unaudited)
6. Lone Star Pavilions
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for
the Year Ended December 31, 2003
(iii) Notes to Statement of Revenues and Certain
Expenses
(iv) Statement of Revenues and Certain Expenses for the
period from January 1, 2004 through April 29,
2004 (unaudited)
(b) Pro Forma Condensed Financial Statement (unaudited) of Weingarten
Realty Investors, the Acquired Properties and Other
Acquisitions
1. Pro Forma Condensed Statement of Consolidated Income for the
Year Ended December 31, 2003 and the Six Months Ended June
30, 2004
2. Pro Forma Condensed Balance Sheet as of June 30, 2004
3. Notes and Significant Assumptions
4. Statement of Estimated Taxable Operating Results and Cash to
be Made Available by Operations for the Year Ended
December 31, 2003
(c) Exhibits:
Included herewith is Exhibit No. 23.1, the Consent of Independent
Registered Public Accounting Firm
3
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying statement of revenues and
certain expenses (the "Historical Summary") of Harrison Pointe Shopping Center
(the "Property") for the year ended December 31, 2003. This Historical Summary
is the responsibility of the Property's management. Our responsibility is to
express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with the auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
Historical Summary is free of material misstatement. An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Historical Summary. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as
described in Note 2 to the Historical Summary and is not intended to be a
complete presentation of the Property's revenues and expenses.
In our opinion, the Historical Summary presents fairly, in all
material respects, the revenues and certain expenses, as described in Note 2 to
the Historical Summary, of Harrison Pointe Shopping Center for the year ended
December 31, 2003, in conformity with accounting principles generally accepted
in the United States of America.
Deloitte & Touche LLP
Houston, Texas
September 8, 2004
4
HARRISON POINTE SHOPPING CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 346,221
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 63,170
----------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 409,391
----------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 82,670
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 94,133
----------
Total Certain Expenses. . . . . . . . . . . . . . . . . 176,803
----------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 232,588
==========
See accompanying notes to statement of revenues and certain expenses.
5
HARRISON POINTE SHOPPING CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Harrison Pointe Shopping Center
(the "Property"). The development of this property was substantially completed
in 2003 and was purchased by Weingarten Realty Investors (the "Company") through
its interest in WRI/Raleigh LP effective January 1, 2004 from J&H of Raleigh,
LLC. This acquisition is a 124,000 square foot center in Cary, North Carolina, a
suburb of Raleigh, North Carolina, and is anchored by Harris Teeter and Staples.
The Property was 56.6% occupied as of December 31, 2003. A single tenant had
minimum rentals of 33.0% and no other tenant had minimum rentals exceeding 10.9%
of the total minimum rentals for the month ended December 31, 2003.
The Company is a Texas real estate investment trust, which is
primarily involved in the acquisition, development, and management of real
estate, consisting mostly of neighborhood and community shopping centers and, to
a lesser extent, industrial properties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying Historical Summary has
been prepared for the purpose of complying with the provisions of Article 3.14
of Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC"), which requires certain information with respect to real estate
operations to be included with certain filings with the SEC. The Historical
Summary for the year ended December 31, 2003 includes the historical revenues
and certain operating expenses of the Property, exclusive of interest,
management fees, corporate level general and administrative expenses and
depreciation and amortization, which may not be comparable to the future
operations of the Property.
Revenue Recognition - Rental revenue is generally recognized on a
straight-line basis over the life of the lease. Rental revenue includes revenue
based on a percentage of tenants' sales, which is recognized only after the
tenant exceeds their sales breakpoint. All leases have been accounted for as
operating leases. Tenant reimbursements represent revenues from tenants for
reimbursements of taxes, maintenance expenses and insurance, which is recognized
in the period the related expense is recorded.
Repairs and Maintenance - Expenditures for repairs and
maintenance are expensed as incurred.
Use of Estimates - The preparation of the financial statement in
conformity with accounting principles generally accepted in the United States of
America requires the Property's management to make estimates and assumptions
that affect amounts reported in the financial statement as well as certain
disclosures. Actual results could differ from those estimates.
6
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases
at December 31, 2003 is as follows:
2004 $ 854,979
2005 863,976
2006 873,750
2007 822,652
2008 736,872
Thereafter 4,929,487
The future minimum lease payments do not include estimates for tenant
reimbursements nor amounts based on a percentage of the tenants' sales. No
percentage rental income was recognized for the year ended December 31, 2003,
and tenant reimbursements totaled $63,170 for the year ended December 31, 2003.
7
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying statement of revenues and
certain expenses (the "Historical Summary") of Leesville Shopping Center (the
"Property") for the year ended December 31, 2003. This Historical Summary is the
responsibility of the Property's management. Our responsibility is to express an
opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
Historical Summary is free of material misstatement. An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Historical Summary. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as
described in Note 2 to the Historical Summary and is not intended to be a
complete presentation of the Property's revenues and expenses.
In our opinion, the Historical Summary presents fairly, in all
material respects, the revenues and certain expenses, as described in Note 2 to
the Historical Summary, of Leesville Shopping Center for the year ended December
31, 2003, in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Houston, Texas
September 8, 2004
8
LEESVILLE SHOPPING CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,877,997
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 254,617
------------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 2,132,614
------------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 267,034
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 129,287
------------
Total Certain Expenses. . . . . . . . . . . . . . . . . 396,321
------------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 1,736,293
============
See accompanying notes to statement of revenues and certain expenses.
9
LEESVILLE SHOPPING CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Leesville Shopping Center (the
"Property"). The Property is a 114,000 square foot shopping center located in
Leesville, North Carolina, a suburb of Raleigh, North Carolina. The Property was
purchased by Weingarten Realty Investors (the "Company") through its interest in
WRI/Raleigh LP effective January 1, 2004 from REA Development LLC. The Property
was 98.8% occupied as of December 31, 2003, and is anchored by Harris Teeter. A
single tenant had minimum rentals of 34.6% and no other tenant had minimum
rentals exceeding 9.2% of the total minimum rentals for the year ended December
31, 2003.
The Company is a Texas real estate investment trust, which is
primarily involved in the acquisition, development, and management of real
estate, consisting mostly of neighborhood and community shopping centers and, to
a lesser extent, industrial properties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying Historical Summary has
been prepared for the purpose of complying with the provisions of Article 3.14
of Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC"), which requires certain information with respect to real estate
operations to be included with certain filings with the SEC. The Historical
Summary for the year ended December 31, 2003 includes the historical revenues
and certain operating expenses of the Property, exclusive of interest,
management fees, corporate level general and administrative expenses and
depreciation and amortization, which may not be comparable to the future
operations of the Property.
Revenue Recognition - Rental revenue is generally recognized on a
straight-line basis over the life of the lease. Rental revenue includes revenue
based on a percentage of tenants' sales, which is recognized only after the
tenant exceeds their sales breakpoint. All leases have been accounted for as
operating leases. Tenant reimbursements represent revenues from tenants for
reimbursements of taxes, maintenance expenses and insurance, which is recognized
in the period the related expense is recorded.
Repairs and Maintenance - Expenditures for repairs and
maintenance are expensed as incurred.
Use of Estimates - The preparation of the financial statement in
conformity with accounting principles generally accepted in the United States of
America requires the Property's management to make estimates and assumptions
that affect amounts reported in the financial statement as well as certain
disclosures. Actual results could differ from those estimates.
10
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases
at December 31, 2003 is as follows:
2004 $ 1,878,647
2005 1,761,935
2006 1,698,850
2007 1,410,969
2008 1,422,115
Thereafter 13,309,402
The future minimum lease payments do not include estimates for tenant
reimbursements nor amounts based on a percentage of tenants' sales. No
percentage rental income was recognized for the year ended December 31, 2003,
and tenant reimbursements totaled $254,617 for the year ended December 31,
2003.
11
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying statement of revenues and
certain expenses (the "Historical Summary") of the TFK Portfolio for the year
ended December 31, 2003. This Historical Summary is the responsibility of the
TFK Portfolio's management. Our responsibility is to express an opinion on the
Historical Summary based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
Historical Summary is free of material misstatement. An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Historical Summary. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as
described in Note 2 to the Historical Summary and is not intended to be a
complete presentation of TFK Portfolio's revenues and expenses.
In our opinion, the Historical Summary presents fairly, in all
material respects, the revenues and certain expenses, as described in Note 2 to
the Historical Summary, of the TFK Portfolio for the year ended December 31,
2003, in conformity with accounting principles generally accepted in the United
States of America.
Deloitte & Touche LLP
Houston, Texas
September 8, 2004
12
TFK PORTFOLIO
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,409,855
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 3,676,618
-------------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 16,086,473
-------------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 1,892,690
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 2,071,717
-------------
Total Certain Expenses. . . . . . . . . . . . . . . . . 3,964,407
-------------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 12,122,066
=============
See accompanying notes to statement of revenues and certain expenses.
13
TFK PORTFOLIO
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of the TFK Portfolio. The TFK
Portfolio was purchased by Weingarten Realty Investors on March 1, 2004 from TFK
Retail, Ltd. This acquisition includes four shopping centers aggregating
1,135,000 square feet. First Colony Commons is located in Sugar Land, Texas, a
suburb of Houston; TJ Maxx Plaza is located in Kendall, Florida, a suburb of
Miami; Largo Mall is located near St. Petersburg, Florida; and Tates Creek is
located in Lexington, Kentucky. The TFK Portfolio was 89.4% occupied as of
December 31, 2003. No single tenant had minimum rentals exceeding 6.97% of the
total minimum rentals for the year ended December 31, 2003.
The Company is a Texas real estate investment trust, which is
primarily involved in the acquisition, development, and management of real
estate, consisting mostly of neighborhood and community shopping centers and, to
a lesser extent, industrial properties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying Historical Summary has
been prepared for the purpose of complying with the provisions of Article 3.14
of Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC"), which requires certain information with respect to real estate
operations to be included with certain filings with the SEC. The Historical
Summary for the year ended December 31, 2003 includes the historical revenues
and certain operating expenses of the TFK Portfolio, exclusive of interest,
management fees, corporate level general and administrative expenses and
depreciation and amortization, which may not be comparable to the future
operations of the TFK Portfolio.
Revenue Recognition - Rental revenue is generally recognized on a
straight-line basis over the life of the lease. Rental revenue includes revenue
based on a percentage of tenants' sales, which is recognized only after the
tenant exceeds their sales breakpoint. All leases have been accounted for as
operating leases. Tenant reimbursements represent revenues from tenants for
reimbursements of taxes, maintenance expenses and insurance, which is recognized
in the period the related expense is recorded.
Repairs and Maintenance - Expenditures for repairs and
maintenance are expensed as incurred.
Use of Estimates - The preparation of the financial statement in
conformity with accounting principles generally accepted in the United States of
America requires the TFK Portfolio's management to make estimates and
assumptions that affect amounts reported in the financial statement as well as
certain disclosures. Actual results could differ from those estimates.
14
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases
at December 31, 2003 is as follows:
2004 $ 12,414,946
2005 11,460,349
2006 10,123,763
2007 8,965,486
2008 6,316,112
Thereafter 18,492,704
The future minimum lease payments do not include estimates for tenant
reimbursements nor amounts based on a percentage of the tenants' sales.
Percentage rental income and tenant reimbursements totaled $228,978 and
$3,676,618, respectively, for the year ended December 31, 2003.
15
TFK PORTFOLIO
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE PERIOD FROM JANUARY 1, 2004 THROUGH FEBRUARY 28, 2004
(Unaudited)
REVENUES:
Rental . . . . . . . . . . . . . . . . . $ 2,219,614
Tenant reimbursements. . . . . . . . . . 730,073
------------
Total Revenues . . . . . . . . 2,949,687
------------
CERTAIN EXPENSES:
Property operating and maintenance . . . 266,731
Ad valorem taxes . . . . . . . . . . . . 366,397
------------
Total Certain Expenses . . . . 633,128
------------
EXCESS OF REVENUES OVER CERTAIN EXPENSES . . $ 2,316,559
============
16
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying statement of revenues and
certain expenses (the "Historical Summary") of Pavilions at San Mateo (the
"Property") for the year ended December 31, 2003. This Historical Summary is the
responsibility of the Property's management. Our responsibility is to express an
opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with the auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
Historical Summary is free of material misstatement. An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Historical Summary. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as
described in Note 2 to the Historical Summary and is not intended to be a
complete presentation of the Property's revenues and expenses.
In our opinion, the Historical Summary presents fairly, in all
material respects, the revenues and certain expenses, as described in Note 2 to
the Historical Summary, of Pavilions at San Mateo for the year ended December
31, 2003, in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Houston, Texas
September 8, 2004
17
PAVILIONS AT SAN MATEO
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,783,111
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 465,129
------------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 3,248,240
------------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 325,053
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 179,007
------------
Total Certain Expenses. . . . . . . . . . . . . . . . . 504,060
------------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 2,744,180
============
See accompanying notes to statement of revenues and certain expenses.
18
PAVILIONS AT SAN MATEO
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Pavilions at San Mateo (the
"Property"). Weingarten Realty Investors (the "Company"), and a wholly owned
entity of the Company, WRI/Pavilion Inc., owned a 30% interest in the Property.
On April 30, 2004, the Company purchased the remaining 70% interest in the
Property from Shannon Property Management. The Property is a 196,000 square foot
retail center that is located in Albuquerque, New Mexico, and is anchored by
Linens 'N Things and Circuit City. The Property was 92.6% occupied as of
December 31, 2003. Four tenants had minimum rentals ranging from 18.8% to 11.2%
and no other tenant had minimum rentals exceeding 7.8% of the total minimum
rentals for the year ended December 31, 2003.
The Company is a Texas real estate investment trust, which is
primarily involved in the acquisition, development, and management of real
estate, consisting mostly of neighborhood and community shopping centers and, to
a lesser extent, industrial properties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying Historical Summary has
been prepared for the purpose of complying with the provisions of Article 3.14
of Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC"), which requires certain information with respect to real estate
operations to be included with certain filings with the SEC. The Historical
Summary for the year ended December 31, 2003 includes the historical revenues
and certain operating expenses of the Property, exclusive of interest,
management fees, corporate level general and administrative expenses and
depreciation and amortization, which may not be comparable to the future
operations of the Property.
Revenue Recognition - Rental revenue is generally recognized on a
straight-line basis over the life of the lease. Rental revenue includes revenue
based on a percentage of tenants' sales, which is recognized only after the
tenant exceeds their sales breakpoint. All leases have been accounted for as
operating leases. Tenant reimbursements represent revenues from tenants for
reimbursements of taxes, maintenance expenses and insurance, which is recognized
in the period the related expense is recorded.
Repairs and Maintenance - Expenditures for repairs and
maintenance are expensed as incurred.
Use of Estimates - The preparation of the financial statement in
conformity with accounting principles generally accepted in the United States of
America requires the Property's management to make estimates and assumptions
that affect amounts reported in the financial statement as well as certain
disclosures. Actual results could differ from those estimates.
19
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases
at December 31, 2003 is as follows:
2004 $ 2,732,956
2005 2,668,887
2006 2,562,190
2007 2,432,313
2008 2,079,067
Thereafter 9,400,661
The future minimum lease payments do not include estimates for tenant
reimbursements nor amounts based on a percentage of the tenants' sales. No
percentage rental income was recognized for the year ended December 31, 2003,
and tenant reimbursements totaled $465,129 for the year ended December 31,
2003.
20
PAVILIONS AT SAN MATEO
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE PERIOD FROM JANUARY 1, 2004 THROUGH APRIL 29, 2004
(Unaudited)
REVENUES:
Rental . . . . . . . . . . . . . . . . . $ 881,231
Tenant reimbursements. . . . . . . . . . 156,775
------------
Total Revenues . . . . . . . . 1,038,006
------------
CERTAIN EXPENSES:
Property operating and maintenance . . . 113,107
Ad valorem taxes . . . . . . . . . . . . 59,732
------------
Total Certain Expenses . . . . 172,839
------------
EXCESS OF REVENUES OVER CERTAIN EXPENSES . . $ 865,167
============
21
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying statement of revenues and
certain expenses (the "Historical Summary") of Rockwall Market Center (the
"Property") for the year ended December 31, 2003. This Historical Summary is the
responsibility of the Property's management. Our responsibility is to express an
opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with the auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
Historical Summary is free of material misstatement. An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Historical Summary. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as
described in Note 2 to the Historical Summary and is not intended to be a
complete presentation of the Property's revenues and expenses.
In our opinion, the Historical Summary presents fairly, in all
material respects, the revenues and certain expenses, as described in Note 2 to
the Historical Summary, of Rockwall Market Center for the year ended December
31, 2003, in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Houston, Texas
September 8, 2004
22
ROCKWALL MARKET CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,556,979
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 664,204
------------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 3,221,183
------------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 214,097
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 455,390
------------
Total Certain Expenses. . . . . . . . . . . . . . . . . 669,487
------------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 2,551,696
============
See accompanying notes to statement of revenues and certain expenses.
23
ROCKWALL MARKET CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Rockwall Market Center (the
"Property"). Weingarten Realty Investors (the "Company"), and a wholly owned
entity of the Company, WRI/Rockwall, Inc., owned a 30% interest in the Property.
On April 30, 2004, the Company purchased the remaining 70% interest in the
Property from Shannon Property Management. The Property is a 209,000 square foot
retail center that is located in Rockwall, Texas, and is anchored by Linens 'N
Things, Michael's, OfficeMax, Old Navy, and Ross Dress for Less. The Property
was 99.3% occupied as of December 31, 2003. No single tenant had minimum rentals
exceeding 10.1% of the total minimum rentals for the year ended December 31,
2003.
The Company is a Texas real estate investment trust, which is
primarily involved in the acquisition, development, and management of real
estate, consisting mostly of neighborhood and community shopping centers and, to
a lesser extent, industrial properties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying Historical Summary has
been prepared for the purpose of complying with the provisions of Article 3.14
of Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC"), which requires certain information with respect to real estate
operations to be included with certain filings with the SEC. The Historical
Summary for the year ended December 31, 2003 includes the historical revenues
and certain operating expenses of the Property, exclusive of interest,
management fees, corporate level general and administrative expenses and
depreciation and amortization, which may not be comparable to the future
operations of the Property.
Revenue Recognition - Rental revenue is generally recognized on a
straight-line basis over the life of the lease. Rental revenue includes revenue
based on a percentage of tenants' sales, which is recognized only after the
tenant exceeds their sales breakpoint. All leases have been accounted for as
operating leases. Tenant reimbursements represent revenues from tenants for
reimbursements of taxes, maintenance expenses and insurance, which is recognized
in the period the related expense is recorded.
Repairs and Maintenance - Expenditures for repairs and
maintenance are expensed as incurred.
Use of Estimates - The preparation of the financial statement in
conformity with accounting principles generally accepted in the United States of
America requires the Property's management to make estimates and assumptions
that affect amounts reported in the financial statement as well as certain
disclosures. Actual results could differ from those estimates.
24
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases
at December 31, 2003 is as follows:
2004 $ 2,396,867
2005 2,241,383
2006 2,093,627
2007 1,997,718
2008 1,967,560
Thereafter 6,640,234
The future minimum lease payments do not include estimates for tenant
reimbursements nor amounts based on a percentage of the tenants' sales. No
percentage rental income was recognized for the year ended December 31, 2003,
and tenant reimbursements totaled $664,204 for the year ended December 31,
2003.
25
ROCKWALL MARKET CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE PERIOD FROM JANUARY 1, 2004 THROUGH APRIL 29, 2004
(Unaudited)
REVENUES:
Rental . . . . . . . . . . . . . . . . . . . . . $ 844,225
Tenant reimbursements. . . . . . . . . . . . . . 215,044
------------
Total Revenues . . . . . . . . . . . . 1,059,269
------------
CERTAIN EXPENSES:
Property operating and maintenance . . . . . . . 69,579
Ad valorem taxes . . . . . . . . . . . . . . . . 153,762
------------
Total Certain Expenses . . . . . . . . 223,341
------------
EXCESS OF REVENUES OVER CERTAIN EXPENSES . . . . . . $ 835,928
============
26
INDEPENDENT AUDITORS' REPORT
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors:
We have audited the accompanying statement of revenues and
certain expenses (the "Historical Summary") of Lone Star Pavilions (the
"Property") for the year ended December 31, 2003. This Historical Summary is the
responsibility of the Property's management. Our responsibility is to express an
opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with the auditing standards
generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
Historical Summary is free of material misstatement. An audit includes examining
on a test basis, evidence supporting the amounts and disclosures in the
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Historical Summary. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission (for inclusion in Form 8-K of Weingarten Realty Investors) as
described in Note 2 to the Historical Summary and is not intended to be a
complete presentation of the Property's revenues and expenses.
In our opinion, the Historical Summary presents fairly, in all
material respects, the revenues and certain expenses, as described in Note 2 to
the Historical Summary, of Lone Star Pavilions for the year ended December 31,
2003, in conformity with accounting principles generally accepted in the United
States of America.
Deloitte & Touche LLP
Houston, Texas
September 8, 2004
27
LONE STAR PAVILIONS
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,117,972
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 353,091
------------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 1,471,063
------------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 117,424
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 224,521
------------
Total Certain Expenses. . . . . . . . . . . . . . . . . 341,945
------------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 1,129,118
============
See accompanying notes to statement of revenues and certain expenses.
28
LONE STAR PAVILIONS
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Lone Star Pavilions (the
"Property"). Weingarten Realty Investors (the "Company"), and a wholly owned
entity of the Company, WRI/Lone Star, Inc., owned a 30% interest in the
Property. On April 30, 2004, the Company purchased the remaining 70% interest in
the Property from Shannon Property Management. The Property is a 107,000 square
foot retail center that is located in College Station, Texas, and is anchored by
Barnes & Noble, Office Depot and Best Buy. The Property was 98.1% occupied as of
December 31, 2003. Three tenants had minimum rentals ranging from 28.7% to 23.3%
and no other tenant had minimum rentals exceeding 6.7% of the total minimum
rentals for the year ended December 31, 2003.
The Company is a Texas real estate investment trust, which is
primarily involved in the acquisition, development, and management of real
estate, consisting mostly of neighborhood and community shopping centers and, to
a lesser extent, industrial properties.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying Historical Summary has
been prepared for the purpose of complying with the provisions of Article 3.14
of Regulation S-X promulgated by the Securities and Exchange Commission (the
"SEC"), which requires certain information with respect to real estate
operations to be included with certain filings with the SEC. The Historical
Summary for the year ended December 31, 2003 includes the historical revenues
and certain operating expenses of the Property, exclusive of interest,
management fees, corporate level general and administrative expenses and
depreciation and amortization, which may not be comparable to the future
operations of the Property.
Revenue Recognition - Rental revenue is generally recognized on a
straight-line basis over the life of the lease. Rental revenue includes revenue
based on a percentage of tenants' sales, which is recognized only after the
tenant exceeds their sales breakpoint. All leases have been accounted for as
operating leases. Tenant reimbursements represent revenues from tenants for
reimbursements of taxes, maintenance expenses and insurance, which is recognized
in the period the related expense is recorded.
Repairs and Maintenance - Expenditures for repairs and
maintenance are expensed as incurred.
Use of Estimates - The preparation of the financial statement in
conformity with accounting principles generally accepted in the United States of
America requires the Property's management to make estimates and assumptions
that affect amounts reported in the financial statement as well as certain
disclosures. Actual results could differ from those estimates.
29
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases
at December 31, 2003 is as follows:
2004 $ 1,087,464
2005 1,065,488
2006 980,270
2007 924,488
2008 922,042
Thereafter 4,231,728
The future minimum lease payments do not include estimates for tenant
reimbursements nor amounts based on a percentage of the tenants' sales. No
percentage rental income was recognized for the year ended December 31, 2003,
and tenant reimbursements totaled $353,091 for the year ended December 31,
2003.
30
LONE STAR PAVILIONS
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE PERIOD FROM JANUARY 1, 2004 THROUGH APRIL 29, 2004
(Unaudited)
REVENUES:
Rental . . . . . . . . . . . . . . . . . . . . $ 375,324
Tenant reimbursements. . . . . . . . . . . . . 110,532
----------
Total Revenues . . . . . . . . . . . 485,856
----------
CERTAIN EXPENSES:
Property operating and maintenance . . . . . . 30,592
Ad valorem taxes . . . . . . . . . . . . . . . 77,410
----------
Total Certain Expenses . . . . . . . 108,002
----------
EXCESS OF REVENUES OVER CERTAIN EXPENSES . . . . . $ 377,854
==========
31
WEINGARTEN REALTY INVESTORS
PRO FORMA CONDENSED STATEMENTS OF CONSOLIDATED INCOME
(in thousands, except per share amounts)
These unaudited Pro Forma Condensed Statements of Consolidated Income for the
year ended December 31, 2003 and the six months ended June 30, 2004 are
presented as if (A) the acquisition of the acquired properties and (B) the
acquisition of other properties, as set forth in the Notes and Significant
Assumptions, had occurred as of the beginning of each period. In management's
opinion, all adjustments necessary to reflect the effects of these transactions
have been made. These unaudited Pro Forma Condensed Statements of Consolidated
Income are not necessarily indicative of what actual results of operations would
have been had these transactions occurred on the beginning of each period, nor
do they purport to represent the results of operations for future periods.
WEINGARTEN REALTY INVESTORS
PRO FORMA CONDENSED STATEMENTS OF CONSOLIDATED INCOME
YEAR ENDED DECEMBER 31, 2003
(Unaudited)
Adjustment Adjustment
for Acquired for Other Pro
Historical Properties(A) Acquisitions(B) Forma
---------- ------------- --------------- ----------
Revenues:
Rentals . . . . . . . . . . . . . . . . . . . . . $ 407,387 $ 26,569 $ 10,130 $ 444,086
Interest income . . . . . . . . . . . . . . . . . 1,587 9 30 1,626
Other . . . . . . . . . . . . . . . . . . . . . . 7,067 340 44 7,451
---------- ------------- --------------- ----------
Total . . . . . . . . . . . . . . . . . . . . 416,041 26,918 10,204 453,163
---------- ------------- --------------- ----------
Expenses:
Depreciation and amortization . . . . . . . . . . 93,382 6,633 2,975 102,990
Interest. . . . . . . . . . . . . . . . . . . . . 88,871 7,454 4,163 100,488
Operating . . . . . . . . . . . . . . . . . . . . 64,608 3,962 1,748 70,318
Ad valorem taxes. . . . . . . . . . . . . . . . . 47,129 3,154 877 51,160
General and administrative. . . . . . . . . . . . 13,820 13,820
Loss on early redemption of preferred shares. . . 2,739 2,739
---------- ------------- --------------- ----------
Total . . . . . . . . . . . . . . . . . . 310,549 21,203 9,763 341,515
---------- ------------- --------------- ----------
Operating Income. . . . . . . . . . . . . . . . . . . 105,492 5,715 441 111,648
Equity in Earnings of Joint Ventures. . . . . . . . . 4,743 1,080 5,823
Income Allocated to Minority Interests. . . . . . . . (2,723) (205) (107) (3,035)
Gain on Sale of Properties. . . . . . . . . . . . . . 714 714
---------- ------------- --------------- ----------
Income Before Discontinued Operations . . . . . . . . 108,226 5,510 1,414 115,150
---------- ------------- --------------- ----------
Operating Income from Discontinued Operations . . 2,015 2,015
Gain on Sale of Properties. . . . . . . . . . . . 6,039 6,039
---------- ------------- --------------- ----------
Income from Discontinued Operations . . . 8,054 8,054
---------- ------------- --------------- ----------
Net Income. . . . . . . . . . . . . . . . . . . . . . $ 116,280 $ 5,510 $ 1,414 $ 123,204
========== ============= =============== ==========
Net Income Available to Common Shareholders:
Basic . . . . . . . . . . . . . . . . . . . . . . $ 97,880 $ 5,510 $ 1,414 $ 104,804
========== ============= =============== ==========
Diluted . . . . . . . . . . . . . . . . . . . . . $ 100,920 $ 5,715 $ 1,521 $ 108,156
========== ============= =============== ==========
Net Income per Common Share - Basic . . . . . . . . . $ 1.24 $ 1.33
========== ==========
Net Income per Common Share - Diluted . . . . . . . . $ 1.24 $ 1.32
========== ==========
Weighted Average Number of Shares Outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . 78,800 78,800
========== ==========
Diluted . . . . . . . . . . . . . . . . . . . . . 81,574 81,706
========== ==========
32
WEINGARTEN REALTY INVESTORS
PRO FORMA CONDENSED STATEMENTS OF CONSOLIDATED INCOME
SIX MONTHS ENDED JUNE 30, 2004
(Unaudited)
Adjustment Adjustment
for Acquired for Other Pro
Historical Properties(A) Acquisitions(B) Forma
---------- ------------- --------------- ----------
Revenues:
Rentals . . . . . . . . . . . . . . . . . . . . . $ 237,411 $ 5,604 $ 4,088 $ 247,103
Interest income . . . . . . . . . . . . . . . . . 659 1 18 678
Other . . . . . . . . . . . . . . . . . . . . . . 2,713 32 16 2,761
---------- ------------- --------------- ----------
Total . . . . . . . . . . . . . . . . . . . . 240,783 5,637 4,122 250,542
---------- ------------- --------------- ----------
Expenses:
Depreciation and amortization . . . . . . . . . . 55,707 1,300 1,101 58,108
Interest. . . . . . . . . . . . . . . . . . . . . 55,873 1,323 1,637 58,833
Operating . . . . . . . . . . . . . . . . . . . . 35,994 702 508 37,204
Ad valorem taxes. . . . . . . . . . . . . . . . . 29,112 657 272 30,041
General and administrative. . . . . . . . . . . . 7,962 7,962
Loss on early redemption of preferred shares. . . 3,566 3,566
---------- ------------- --------------- ----------
Total . . . . . . . . . . . . . . . . . . 188,214 3,982 3,518 195,714
---------- ------------- --------------- ----------
Operating Income. . . . . . . . . . . . . . . . . . . 52,569 1,655 604 54,828
Equity in Earnings of Joint Ventures. . . . . . . . . 2,937 314 3,251
Income Allocated to Minority Interests. . . . . . . . (1,854) (8) (1,862)
Impairment Loss on Land Held for Development. . . . . (2,700) (2,700)
Gain on Sale of Properties. . . . . . . . . . . . . . 419 419
---------- ------------- --------------- ----------
Income Before Discontinued Operations . . . . . . . . 51,371 1,655 910 53,936
---------- ------------- --------------- ----------
Operating Income from Discontinued Operations . . 790 790
Gain on Sale of Properties. . . . . . . . . . . . 13,430 13,430
---------- ------------- --------------- ----------
Income from Discontinued Operations . . . 14,220 14,220
---------- ------------- --------------- ----------
Net Income. . . . . . . . . . . . . . . . . . . . . . $ 65,591 $ 1,655 $ 910 $ 68,156
========== ============= =============== ==========
Net Income Available to Common Shareholders:
Basic . . . . . . . . . . . . . . . . . . . . . . $ 63,060 $ 1,655 $ 910 $ 65,625
========== ============= =============== ==========
Diluted . . . . . . . . . . . . . . . . . . . . . $ 64,751 $ 1,655 $ 918 $ 67,324
========== ============= =============== ==========
Net Income per Common Share - Basic . . . . . . . . . $ .75 $ .78
========== ==========
Net Income per Common Share - Diluted . . . . . . . . $ .74 $ .77
========== ==========
Weighted Average Number of Shares Outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . 84,371 84,371
========== ==========
Diluted . . . . . . . . . . . . . . . . . . . . . 87,451 87,463
========== ==========
33
WEINGARTEN REALTY INVESTORS
PRO FORMA CONDENSED BALANCE SHEET
AS OF JUNE 30, 2004
(Unaudited)
(in thousands)
This unaudited Pro Forma Condensed Balance Sheet is presented as if (A) the
acquisition of the acquired properties and (B) the acquisition of other
properties, as set forth in Notes (A) and (B), had occurred as of January 1,
2004. In management's opinion, all adjustments necessary to reflect the effects
of these transactions have been made.
Adjustment
for Pro
Historical Acquisitions Forma
------------ ------------ ------------
ASSETS:
Property. . . . . . . . . . . . . . . . . . . . $ 3,608,809 $ 3,608,809
Accumulated Depreciation. . . . . . . . . . . . (573,048) $ (1,809) (574,857)
------------ ------------ ------------
Property - net. . . . . . . . . . . . . . . 3,035,761 (1,809) 3,033,952
Investment in Real Estate Joint Ventures. . . . 48,939 314 49,253
------------ ------------ ------------
Total . . . . . . . . . . . . . . . . . . 3,084,700 (1,495) 3,083,205
Notes Receivable from Real Estate Joint
Ventures and Partnerships . . . . . . . . . . 44,892 44,892
Unamortized Debt and Lease Costs. . . . . . . . 82,935 (592) 82,343
Accrued Rent and Accounts Receivable, net . . . 38,571 38,571
Other . . . . . . . . . . . . . . . . . . . . . 96,928 4,399 101,327
------------ ------------ ------------
Total . . . . . . . . $ 3,348,026 $ 2,312 $ 3,350,338
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Debt. . . . . . . . . . . . . . . . . . . . . . . . $ 2,202,048 $ 2,202,048
Accounts Payable and Accrued Expenses . . . . . . . 82,278 82,278
Other . . . . . . . . . . . . . . . . . . . . . . . 79,058 $ (261) 78,797
------------ ------------ ------------
Total . . . . . . . . . . . . . . . . . . 2,363,384 (261) 2,363,123
------------ ------------ ------------
Minority Interest . . . . . . . . . . . . . . . . . 57,479 8 57,487
------------ ------------ ------------
Shareholders' Equity. . . . . . . . . . . . . . . . 927,163 2,565 929,728
------------ ------------ ------------
Total . . . . . . . . $ 3,348,026 $ 2,312 $ 3,350,338
============ ============ ============
34
WEINGARTEN REALTY INVESTORS
NOTES AND SIGNIFICANT ASSUMPTIONS
(Unaudited)
(A) ACQUIRED PROPERTIES
The aggregate purchase price for the acquisitions described below (the "Acquired
Properties") was $254.7 million and was allocated among land, buildings and
intangibles, with the buildings being depreciated over a period of forty years.
These purchases were funded under our revolving credit facility (average rate of
1.87%), with the exception of $42.8 million of debt (average rate of 3.67%),
which was assumed by us. Pro forma revenues and expenses, other than interest
and depreciation, represent the historical amounts of the Acquired Properties.
In January 2004 we acquired two supermarket-anchored shopping centers. Harrison
Pointe Center is a 124,000 square foot shopping center located in Cary, North
Carolina, a suburb of Raleigh, and Leesville Town Centre is a 114,000 square
foot shopping center located in Raleigh, North Carolina. Both of these shopping
centers were acquired in a limited partnership utilizing a DownREIT structure
and are anchored by Harris Teeter.
In March 2004 we completed the acquisition of the TFK Portfolio, a portfolio of
four shopping centers aggregating 1,135,0000 square feet. First Colony Commons
is located in Sugar Land, Texas, a suburb of Houston; TJ Maxx Plaza is located
in Kendall, Florida, a suburb of Miami; Largo Mall is located near St.
Petersburg, Florida, and Tates Creek is located in Lexington, Kentucky.
In April 2004 we acquired our joint venture partners' interests in three of our
existing shopping centers, of which two are located in Texas and one in New
Mexico. Pavilions at San Mateo is a 196,000 square foot retail center that is
located in Albuquerque, New Mexico, and is anchored by Linen 'N Things and
Circuit City. Rockwall Market Center is a 209,000 square foot retail center
that is located in Rockwall, Texas, and is anchored by Linens 'N Things,
Michael's, OfficeMax, Old Navy and Ross Dress for Less. Lone Star Pavilions is
a 107,000 square foot retail center that is located in College Station, Texas,
and is anchored by Barnes & Noble, Office Depot and Best Buy.
(B) OTHER ACQUISITIONS
The aggregate purchase price for the acquisitions described below (the "Other
Acquisitions") was $135.3 million and was allocated among land, buildings and
intangibles, with the buildings being depreciated over a period of forty years.
These purchases were funded under our revolving credit facility (average rate of
1.87%) with the exception of $58.4 million of debt (rate of 5.63%), which was
assumed by us. Pro forma revenues and expenses, other than interest and
depreciation, represent the historical amounts of the Other Acquisitions.
In January 2004 we acquired Greenhouse Marketplace, a 151,000 square foot
shopping center located in San Leandro, California. Big Lots, Cents Only and
Factory 2-U anchor this retail center.
In April 2004, three 50%-owned unconsolidated joint ventures acquired an
interest in three retail properties located in McAllen, Texas. Las Tiendas
Plaza is a 499,900 square foot center anchored by Target and Mervyn's (both
corporately owned), as well as Ross Dress for Less, Marshall's and Office Depot.
Northcross is a 76,500 square foot center and is anchored by Barnes & Noble and
Blockbuster. The third property is HEB South 10th Street, which is anchored by
an HEB supermarket. In April 2004 we also acquired our joint venture partner's
interest in an existing shopping center located in Houston, Texas.
In May 2004 we acquired an industrial project and two retail centers. Southside
Industrial Parkway is a 72,000 square foot industrial center located in Atlanta,
Georgia. El Camino Promenade is a 111,000 square foot shopping center that is
anchored by TJ Maxx, AMC Theater and Beverages & More, and is located in
35
Encinitas, California. Village Shoppes of Sugarloaf is a 148,000 square foot
shopping center, which is located in Lawrenceville, Georgia, a suburb of
Atlanta. Publix anchors this retail center.
In June 2004 we acquired Roswell Corners, a 137,000 square foot shopping center,
which is located in Roswell, Georgia, and is anchored by Staples, TJ Maxx and
Super Target (corporately owned). Also in June 2004 we acquired an interest in
a retail property through a 50%-owned unconsolidated joint venture. Western
Plaza is a 56,000 square foot center, which is anchored by Big Lots and located
in Fenton, Missouri.
36
WEINGARTEN REALTY INVESTORS
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
AND CASH TO BE MADE AVAILABLE BY OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
(Unaudited)
(in thousands)
The following unaudited statement is a pro forma estimate of taxable operating
results and cash to be made available by operations for the year ended December
31, 2003. The pro forma statement is based on our historical operating results
for the year ended December 31, 2003 adjusted for the effect of (A) the
acquisition of the acquired properties and (B) the acquisition of other
properties, as set forth in the Notes and Significant Assumptions. This
statement does not purport to forecast actual operating results for any future
periods.
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . $ 453,163
Expenses:
Depreciation and amortization . . . . . . . . . . . 102,990
Interest. . . . . . . . . . . . . . . . . . . . . . 100,488
Operating . . . . . . . . . . . . . . . . . . . . . 70,318
Ad valorem taxes. . . . . . . . . . . . . . . . . . 51,160
General and administrative. . . . . . . . . . . . . 13,820
Loss on early redemption of preferred shares. . . . 2,739
----------
Total Expenses. . . . . . . . . . . . . . . . . 341,515
----------
Operating Income. . . . . . . . . . . . . . . . . . . . . 111,648
Equity in Earnings of Joint Ventures. . . . . . . . . . . 5,823
Income Allocated to Minority Interests. . . . . . . . . . (3,035)
Gain on Sale of Properties. . . . . . . . . . . . . . . . 714
Income from Discontinued Operations . . . . . . . . . . . 8,054
----------
Estimated Taxable Operating Income. . . . . . . . . . . . 123,204
Adjustments:
Depreciation and amortization . . . . . . . . . . . . . . 104,063
Loss on early redemption of preferred shares `. . . . . . 2,739
Equity in earnings of joint ventures. . . . . . . . . . . (5,823)
Income allocated to minority interests. . . . . . . . . . 3,035
Gain on sale of properties. . . . . . . . . . . . . . . . (6,753)
Changes in accrued rent and accounts receivable . . . . . (5,596)
Changes in other assets . . . . . . . . . . . . . . . . . (31,579)
Changes in accounts payable and accrued expenses. . . . . (3,491)
Other, net. . . . . . . . . . . . . . . . . . . . . . . . (490)
----------
Estimated Cash to be Made Available from Operations . . . $ 179,309
==========
(c) Exhibits
Exhibit Number Description
--------------- -----------
23.1 Consent of Deloitte & Touche LLP
37
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 9, 2004
WEINGARTEN REALTY INVESTORS
By: /s/ Joe D. Shafer
--------------------------------
Joe D. Shafer
Vice President/Controller
(Principal Accounting Officer)
38