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): December 31, 2003
WEINGARTEN REALTY INVESTORS
(Exact name of Registrant as specified in its Charter)
Texas 1-9876 74-1464203
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) (Commission file number) 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. ACQUISITION OR DISPOSITION OF ASSETS
During the year ended December 31, 2003, we acquired sixteen retail
shopping centers and five industrial projects. 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.
The total investment in acquisitions during 2003 was $414 million. Audited
financial statements for seven of the properties, Lincoln Place II, Siempre Viva
Business Park, Fiesta Trails, Highlands Ranch University Park, Overton Park
Plaza, West Jordan Town Center and Taylorsville Town Center (the "Acquired
Properties"), are submitted in ITEM 7. below. Unaudited pro forma financial
information on the Acquired Properties and other acquisitions are submitted in
ITEM 7. below.
ITEM 7. 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. Lincoln Place II
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for
the Year Ended December 31, 2002
(iii) Notes to Statement of Revenues and Certain
Expenses
2. Siempre Viva Business Park
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for the
Year Ended December 31, 2002
(iii) Notes to Statement of Revenues and Certain Expenses
3. Fiesta Trails
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for
the Year Ended December 31, 2002
(iii) Notes to Statement of Revenues and Certain Expenses
4. Highlands Ranch University Park
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for
the Year Ended December 31, 2002
(iii) Notes to Statement of Revenues and Certain Expenses
Page 2
5. Overton Park Plaza
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for the
Year Ended December 31, 2002
(iii) Notes to Statement of Revenues and Certain
Expenses
6. West Jordan Town Center
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for the
Year Ended December 31, 2002
(iii) Notes to Statement of Revenues and Certain
Expenses
7. Taylorsville Town Center
(i) Independent Auditors' Report
(ii) Statement of Revenues and Certain Expenses for the
Year Ended December 31, 2002
(iii) Notes to Statement of Revenues and Certain
Expenses
(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
2. Pro Forma Condensed Balance Sheet as of December 31, 2003
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
Page 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 Lincoln Place II (the "Property") for the
year ended December 31, 2002. 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 Lincoln Place II for the year ended December 31,
2002, in conformity with accounting principles generally accepted in the United
States of America.
Deloitte & Touche LLP
Houston, Texas
May 27, 2004
Page 4
LINCOLN PLACE II
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $771,668
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 88,145
---------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 859,813
---------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 77,244
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 40,022
---------
Total Certain Expenses. . . . . . . . . . . . . . . . . 117,266
---------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $742,547
=========
See accompanying notes to statement of revenues and certain expenses.
Page 5
LINCOLN PLACE II
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Lincoln Place II (the
"Property"). The development of this property was substantially completed in
2002 and was purchased by Weingarten Realty Investors (the "Company") on June
24, 2003 from Lincoln Place II, Inc. and Forum Acquisitions, Inc. This
acquisition is a 168,000 square foot center in Fairview Heights, Illinois, and
is anchored by Linens N Things, Marshall's, Office Depot, Old Navy, Supermarket
of Shoes and Ultimate Electronics. The Property was 96.9% occupied as of
December 31, 2002. No single tenant had minimum rentals exceeding 18.3% of the
total minimum rentals for the year ended December 31, 2002.
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, 2002 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.
Page 6
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases at
December 31, 2002 is as follows:
2003 $ 2,160,148
2004 2,160,148
2005 2,161,836
2006 2,166,900
2007 2,135,400
Thereafter 14,084,572
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, 2002,
and tenant reimbursements totaled $88,145 for the year ended December 31, 2002.
Page 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 Siempre Viva Business Park (the
"Property") for the year ended December 31, 2002. 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 Siempre Viva Business Park for the year ended
December 31, 2002, in conformity with accounting principles generally accepted
in the United States of America.
Deloitte & Touche LLP
Houston, Texas
May 27, 2004
Page 8
SIEMPRE VIVA BUSINESS PARK
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,309,467
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 446,314
-----------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 2,755,781
-----------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 191,331
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 174,419
-----------
Total Certain Expenses. . . . . . . . . . . . . . . . . 365,750
-----------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $2,390,031
===========
See accompanying notes to statement of revenues and certain expenses.
Page 9
SIEMPRE VIVA BUSINESS PARK
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Siempre Viva Business Park (the
"Property"). The Property includes seven industrial buildings aggregating
727,000 square feet that are located in San Diego, California. The Property was
purchased by Weingarten Realty Investors (the "Company") and two wholly-owned
entities of the Company, WRI Siempre Viva 345, LLC and WRI Siempre Viva 7 and 8,
LLC, on September 9, 2003 from four different sellers, Siempre Viva Business
Park 2, LLC, Siempre Viva Business Park, LLC, Siempre Viva Business Park 78, LLC
and Siempre Viva Business Park East, LLC. The Property was 60.1% occupied as of
December 31, 2002, and is anchored by UPS Supply Chain Solutions, Hitachi,
Triboro Electric Company and Bose Corporation. No single tenant had minimum
rentals exceeding 20.4% of the total minimum rentals for the year ended December
31, 2002.
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, 2002 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. 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.
Page 10
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases at
December 31, 2002 is as follows:
2003 $3,031,707
2004 3,122,904
2005 3,212,300
2006 2,828,305
2007 772,638
Thereafter -
The future minimum lease payments do not include estimates for tenant
reimbursements, which totaled 446,314 for the year ended December 31, 2002.
Page 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 Fiesta Trails (the "Property") for the
year ended December 31, 2002. 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 Fiesta Trails for the year ended December 31, 2002,
in conformity with accounting principles generally accepted in the United States
of America.
Deloitte & Touche LLP
Houston, Texas
May 27, 2004
Page 12
FIESTA TRAILS
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,407,424
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 856,345
-----------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 4,263,769
-----------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 454,491
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 534,080
-----------
Total Certain Expenses. . . . . . . . . . . . . . . . . 988,571
-----------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $3,275,198
===========
See accompanying notes to statement of revenues and certain expenses.
Page 13
FIESTA TRAILS
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Fiesta Trails (the "Property").
The Property was purchased by WRI Fiesta Trails, LP on September 30, 2003 from
Fiesta Trails Ltd. and Fiesta Trails Hilltop Limited Partnership. WRI Fiesta
Trails, LP is owned by Weingarten Realty Investors (the "Company") and WRI
Fiesta Trails Holdings, LLC, which is a wholly-owned entity of the Company. This
acquisition is a 312,000 square foot shopping center located in San Antonio,
Texas, and is anchored by Barnes & Noble, Cost Plus, Marshall's, Office Max,
Regal Cinema and Steinmart. The Property was 88.5% occupied as of December 31,
2002. No single tenant had minimum rentals exceeding 12.3% of the total minimum
rentals for the year ended December 31, 2002.
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, 2002 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.
Page 14
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases at
December 31, 2002 is as follows:
2003 $ 3,365,822
2004 3,378,710
2005 3,190,863
2006 2,661,032
2007 2,508,209
Thereafter 14,039,890
The future minimum lease payments do not include estimates for tenant
reimbursements nor amounts based on a percentage of the tenants' sales. Such
tenant reimbursements and percentage rental income totaled $856,345 and $14,777,
respectively, for the year ended December 31, 2002.
Page 15
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 Highlands Ranch University Park (the
"Property") for the year ended December 31, 2002. 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 Highlands Ranch University Park for the year ended
December 31, 2002, in conformity with accounting principles generally accepted
in the United States of America.
Deloitte & Touche LLP
Houston, Texas
May 27, 2004
Page 16
HIGHLANDS RANCH UNIVERSITY PARK
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,675,091
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 301,727
-----------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 1,976,818
-----------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 106,109
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 239,845
-----------
Total Certain Expenses. . . . . . . . . . . . . . . . . 345,954
-----------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $1,630,864
===========
See accompanying notes to statement of revenues and certain expenses.
Page 17
HIGHLANDS RANCH UNIVERSITY PARK
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Highlands Ranch University Park
(the "Property"). The Property was purchased by Weingarten Realty Investors (the
"Company"), through an investment in a 40%-owned unconsolidated joint venture,
on October 17, 2003 from Highlands Ranch University Park, LLC. This acquisition
includes an 88,000 square foot shopping center, and is anchored by Whole Foods,
in Highlands Ranch, Colorado. The Property was 93.1% occupied as of December 31,
2002. No single tenant had minimum rentals exceeding 28.8% of the total minimum
rentals for the year ended December 31, 2002.
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, 2002 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.
Page 18
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases at
December 31, 2002 is as follows:
2003 $ 1,836,391
2004 1,883,507
2005 1,886,472
2006 1,871,922
2007 1,202,604
Thereafter 12,307,420
The future minimum lease payments do not include estimates for tenant
reimbursements nor amounts based on a percentage of the tenants' sales. Such
tenant reimbursements and percentage rental income totaled $301,727 and $13,693,
respectively, for the year ended December 31, 2002.
Page 19
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 Overton Park Plaza (the "Property") for
the year ended December 31, 2002. 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 Overton Park Plaza for the year ended December 31,
2002, in conformity with accounting principles generally accepted in the United
States of America.
Deloitte & Touche LLP
Houston, Texas
May 27, 2004
Page 20
OVERTON PARK PLAZA
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,589,307
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 1,262,199
-----------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 4,851,506
-----------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 403,565
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 1,014,250
-----------
Total Certain Expenses. . . . . . . . . . . . . . . . . 1,417,815
-----------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $3,433,691
===========
See accompanying notes to statement of revenues and certain expenses.
Page 21
OVERTON PARK PLAZA
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Overton Park Plaza (the
"Property"). The Property was purchased by WRI Overton Plaza, LP, which is a
wholly-owned entity of Weingarten Realty Investors (the "Company"), on October
24, 2003 from Columbia Regency Texas 1, L.P. This acquisition is a 351,000
square foot shopping center located in Fort Worth, Texas, and is anchored by
Albertson's. The Property was 93.6% occupied as of December 31, 2002. No single
tenant had minimum rentals exceeding 9.8% of the total minimum rentals for the
year ended December 31, 2002.
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, 2002 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.
Page 22
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases at
December 31, 2002 is as follows:
2003 $3,781,621
2004 3,627,754
2005 3,404,857
2006 2,629,415
2007 1,718,994
Thereafter 4,331,532
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, 2002,
and tenant reimbursements totaled $1,262,199 for the year ended December 31,
2002.
Page 23
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 West Jordan Town Center (the "Property")
for the year ended December 31, 2002. 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 West Jordan Town Center for the year ended December
31, 2002, in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Houston, Texas
May 27, 2004
Page 24
WEST JORDAN TOWN CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,928,361
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 498,409
-----------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 2,426,770
-----------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 181,514
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 273,717
-----------
Total Certain Expenses. . . . . . . . . . . . . . . . . 455,231
-----------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $1,971,539
===========
See accompanying notes to statement of revenues and certain expenses.
Page 25
WEST JORDAN TOWN CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of West Jordan Town Center (the
"Property"). The Property was acquired by Weingarten Realty Investors (the
"Company"), through its interest in WRI/Utah Properties, LP, on December 19,
2003 from CPI/West Jordan LLC. This 178,000 square foot shopping center is
located in West Jordan, Utah, and is anchored by Albertson's, Office Depot,
Petco and Rite Aid. The Property was 91.1% occupied as of December 31, 2002, and
no single tenant had minimum rentals exceeding 20.8% of the total minimum
rentals for the year ended December 31, 2002.
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, 2002 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.
Page 26
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases at
December 31, 2002 is as follows:
2003 $ 1,905,515
2004 1,883,687
2005 1,781,968
2006 1,673,740
2007 1,675,146
Thereafter 21,173,079
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, 2002,
and tenant reimbursements totaled $498,409 for the year ended December 31,
2002.
Page 27
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 Taylorsville Town Center (the "Property")
for the year ended December 31, 2002. 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 Taylorsville Town Center for the year ended December
31, 2002, in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Houston, Texas
May 27, 2004
Page 28
TAYLORSVILLE TOWN CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
REVENUES:
Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 922,019
Tenant reimbursements . . . . . . . . . . . . . . . . . . . . . . 262,224
-----------
Total Revenues. . . . . . . . . . . . . . . . . . . . . 1,184,243
-----------
CERTAIN EXPENSES:
Property operating and maintenance. . . . . . . . . . . . . . . . 120,677
Ad valorem taxes. . . . . . . . . . . . . . . . . . . . . . . . . 115,255
-----------
Total Certain Expenses. . . . . . . . . . . . . . . . . 235,932
-----------
EXCESS OF REVENUES OVER CERTAIN EXPENSES. . . . . . . . . . . . . . . $ 948,311
===========
See accompanying notes to statement of revenues and certain expenses.
Page 29
TAYLORSVILLE TOWN CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2002
1. ORGANIZATION
The accompanying statement of revenues and certain expenses (the
"Historical Summary") includes the operations of Taylorsville Town Center (the
"Property"). The Property was acquired by Weingarten Realty Investors (the
"Company"), through its interest in WRI/Utah Properties, LP, on December 19,
2003 from CPI/Taylorsville LP. The Property is a 94,000 square foot retail
center that is located in Taylorsville, Utah, and is anchored by Albertson's,
Blockbuster and Rite Aid. The Property was 71.2% occupied as of December 31,
2002. No single tenant had minimum rentals exceeding 23.6% of the total minimum
rentals for the year ended December 31, 2002.
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, 2002 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.
Page 30
3. RENTALS UNDER OPERATING LEASES
Future minimum rental income from non-cancelable operating leases at
December 31, 2002 is as follows:
2003 $ 902,594
2004 800,339
2005 728,034
2006 662,080
2007 631,509
Thereafter 6,316,122
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, 2002,
and tenant reimbursements totaled $262,224 for the year ended December 31, 2002.
Page 31
WEINGARTEN REALTY INVESTORS
PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED INCOME
YEAR ENDED DECEMBER 31, 2003
(Unaudited)
(in thousands, except per share amounts)
This unaudited Pro Forma Condensed Statement of Consolidated Income is presented
as if (A) the acquisitions of the acquired properties and (B) the acquisition of
other properties, as set forth in the Notes and Significant Assumptions, had
occurred as of January 1, 2003. In management's opinion, all adjustments
necessary to reflect the effects of these transactions have been made. This
unaudited Pro Forma Condensed Statement of Consolidated Income is not
necessarily indicative of what actual results of operations would have been had
these transactions occurred on January 1, 2003, nor does it purport to represent
the results of operations for future periods.
Adjustment Adjustment
for Acquired for Other Pro
Historical Properties(A) Acquisitions(B) Forma
---------- ------------- --------------- -------------
Revenues:
Rentals. . . . . . . . . . . . . . . . . . . . $ 410,490 $ 15,226 $ 12,459 $ 438,175
Interest income. . . . . . . . . . . . . . . . 1,594 8 1,602
Other. . . . . . . . . . . . . . . . . . . . . 7,076 4 43 7,123
---------- ------------- --------------- -------------
Total. . . . . . . . . . . . . . . . . . . 419,160 15,230 12,510 446,900
---------- ------------- --------------- -------------
Expenses:
Depreciation and amortization. . . . . . . . . 94,108 3,748 2,421 100,277
Interest . . . . . . . . . . . . . . . . . . . 88,871 5,188 3,256 97,315
Operating. . . . . . . . . . . . . . . . . . . 65,022 1,833 1,968 68,823
Ad valorem taxes . . . . . . . . . . . . . . . 47,553 2,001 1,414 50,968
General and administrative . . . . . . . . . . 13,820 13,820
Loss on early redemption of preferred shares . 2,739 2,739
---------- ------------- --------------- -------------
Total. . . . . . . . . . . . . . . . . 312,113 12,770 9,059 333,942
---------- ------------- --------------- -------------
Operating Income . . . . . . . . . . . . . . . . . 107,047 2,460 3,451 112,958
Equity in Earnings of Joint Ventures . . . . . . . 4,743 152 4,895
Income Allocated to Minority Interests . . . . . . (2,723) (195) (35) (2,953)
Gain on Sale of Properties . . . . . . . . . . . . 714 714
---------- ------------- --------------- -------------
Income Before Discontinued Operations. . . . . . . 109,781 2,417 3,416 115,614
---------- ------------- --------------- -------------
Operating Income from Discontinued Operations. 460 460
Gain on Sale of Properties . . . . . . . . . . 6,039 6,039
---------- ------------- --------------- -------------
Income from Discontinued Operations. . 6,499 6,499
---------- ------------- --------------- -------------
Net Income . . . . . . . . . . . . . . . . . . . . $ 116,280 $ 2,417 $ 3,416 $ 122,113
========== ============= =============== =============
Net Income Available to Common Shareholders:
Basic. . . . . . . . . . . . . . . . . . . . . $ 97,880 $ 2,417 $ 3,416 $ 103,713
========== ============= =============== =============
Diluted. . . . . . . . . . . . . . . . . . . . $ 100,920 $ 2,612 $ 3,451 $ 106,983
========== ============= =============== =============
Net Income per Common Share - Basic. . . . . . . . $ 1.86 $ 1.97
========== =============
Net Income per Common Share - Diluted. . . . . . . $ 1.86 $ 1.96
========== =============
Weighted Average Number of Shares Outstanding:
Basic. . . . . . . . . . . . . . . . . . . . . 52,534 52,534
========== =============
Diluted. . . . . . . . . . . . . . . . . . . . 54,383 54,481
========== =============
Page 32
WEINGARTEN REALTY INVESTORS
PRO FORMA CONDENSED BALANCE SHEET
AS OF DECEMBER 31, 2003
(Unaudited)
(in thousands)
This unaudited Pro Forma Condensed Balance Sheet is presented as if (A) the
acquisitions 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,
2003. 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 . . . . . . . . . . . . . . . . . . . . . $ 3,200,091 $3,200,091
Accumulated Depreciation . . . . . . . . . . . . . (527,375) $ (4,812) (532,187)
------------ -------------- -----------
Property - net . . . . . . . . . . . . . . . . 2,672,716 (4,812) 2,667,904
Investment in Real Estate Joint Ventures . . . . . 32,742 152 32,894
------------ -------------- -----------
Total. . . . . . . . . . . . . . . . . . . . 2,705,458 (4,660) 2,700,798
Notes Receivable from Real Estate Joint
Ventures and Partnerships. . . . . . . . . . . . 36,825 36,825
Unamortized Debt and Lease Costs . . . . . . . . . 70,895 (1,357) 69,538
Accrued Rent and Accounts Receivable, net. . . . . 43,368 43,368
Other. . . . . . . . . . . . . . . . . . . . . . . 67,248 9,591 76,839
------------ -------------- -----------
Total. . . . . . . . . . $ 2,923,794 $ 3,574 $2,927,368
============ ============== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Debt . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,810,706 $1,810,706
Preferred Shares Subject to Mandatory Redemption, net. 109,364 109,364
Accounts Payable and Accrued Expenses. . . . . . . . . 79,686 79,686
Other. . . . . . . . . . . . . . . . . . . . . . . . . 52,671 $ (2,489) 50,182
------------ -------------- -----------
Total. . . . . . . . . . . . . . . . . . . . 2,052,427 (2,489) 2,049,938
------------ -------------- -----------
Minority Interest. . . . . . . . . . . . . . . . . . . 49,804 230 50,034
------------ -------------- -----------
Shareholders' Equity . . . . . . . . . . . . . . . . . 821,563 5,833 827,396
------------ -------------- -----------
Total. . . . . . . . . . $ 2,923,794 $ 3,574 $2,927,368
============ ============== ===========
Page 33
WEINGARTEN REALTY INVESTORS
NOTES AND SIGNIFICANT ASSUMPTIONS
YEAR ENDED DECEMBER 31, 2003
(Unaudited)
(A) ACQUIRED PROPERTIES
The aggregate purchase price for the acquisitions described below (the "Acquired
Properties") was $213.0 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
2.34%), with the exception of $94.4 million of debt (average rate of 4.84%),
which was assumed by us. Pro forma revenues and expenses, other than interest
and depreciation, represent the historical amounts of the Acquired Properties.
In June, we purchased Lincoln Place II, a 168,000 square foot shopping center in
Fairview Heights, Illinois. The center is anchored by Linens N Things,
Marshall's, Office Depot, Old Navy, Supermarket of Shoes and Ultimate
Electronics.
In September, we completed the acquisition of Siempre Viva Business Park located
in San Diego, California. Part of a 1.26 million square foot industrial park,
our acquisition included seven buildings totaling 727,000 square feet. The
property is 100% leased to tenants such as UPS Supply Chain Solutions, Hitachi,
Triboro Electric Company and Bose Corporation.
Also in September, we acquired Fiesta Trails Shopping Center located in San
Antonio, Texas. The center comprises 312,000 square feet and is anchored by
Barnes & Noble, Cost Plus, Marshall's, Office Max, Regal Cinema and Steinmart.
In October, we acquired Highlands Ranch University Park through an investment in
a 40% unconsolidated joint venture. Highland Ranch University Park is an 88,000
square foot shopping center located in Highlands Ranch, Colorado. The center is
anchored by Whole Foods.
In October, we purchased Overton Park Plaza, a 351,000 square foot shopping
center located in Fort Worth, Texas. Overton Park Plaza is anchored by
Albertson's.
In December, we acquired two retail centers in Utah. West Jordan Town Center is
a 178,000 square foot center located in West Jordan, Utah. Taylorsville Town
Center is a 94,000 square foot center located in Taylorsville, Utah. Both
shopping centers are located in the greater Salt Lake City area suburbs, and
both are anchored by Albertson's and Rite Aid.
(B) OTHER ACQUISITIONS
The aggregate purchase price for the acquisitions described below (the "Other
Acquisitions") was $200.8 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
2.34%) with the exception of $91.7 million of debt (rate of 4.31%), 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, we acquired the Sears Distribution Center located in Atlanta,
Georgia. This 403,000 square foot property is 100% occupied with Sears
Logistics Services as the sole tenant.
In February, we acquired Atlanta Industrial Park. This seven-building complex
totaled 502,000 square feet and is also located in Atlanta, Georgia. Also in
Page 34
February, we completed the acquisition of Rancho San Marcos Village, a 121,000
square foot shopping center anchored by Von's (Safeway) and 24-Hour Fitness.
This center is located in San Marcos, California.
In April, we acquired 1801 Massaro Boulevard located in Tampa, Florida. This
159,000 square foot distribution/manufacturing facility that is rail served is
100% occupied. Also in April, we acquired Hollywood Hills Plaza, a 365,000
square foot shopping center anchored by Publix, Target and Eckerd Drug. This
center is located in Hollywood, Florida.
In June, we completed the acquisition of Tamiami Trail Shops, a 111,000 square
foot center located in Miami, Florida. Publix and Eckerd Drug anchor this
center.
In August, we acquired Thousand Oaks Shopping Center located in San Antonio,
Texas. An HEB Supermarket, Palais Royal and Tuesday Morning anchor this 163,000
square foot center.
In September, we acquired Durham Festival located in Durham, North Carolina.
This 134,000 square foot shopping center is anchored by Kroger.
In October, we acquired four retail properties. Sandy Plains Exchange is a
73,000 square foot center located in Marietta, Georgia, a suburb of Atlanta, and
is anchored by Publix supermarket. Westland Terrace in Orlando, Florida is a
68,000 square foot center anchored by a corporate-owned Super Target. Publix at
Laguna Isles is a 69,000 square foot center located in Pembroke Pines, Florida
and is anchored by Publix. University Palms is a 99,000 square foot shopping
center anchored by Publix and Blockbuster and is located in Oveido, Florida.
In December, Westgate Service Center, located in Houston, Texas, was acquired.
This three-building office service center complex comprises 119,000 square feet.
Also in December, we acquired Brookwood Square, a 253,000 square foot shopping
center anchored by Home Depot, Staples and Marshall's, which is located in
Austell, Georgia, a suburb of Atlanta.
Page 35
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 the Company's historical
operating results for the year ended December 31, 2003 adjusted for the effect
of (A) the acquisitions 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 . . . . . . . . . . . . . . . . . . . . . . . . . $ 446,900
Expenses:
Depreciation and amortization . . . . . . . . . . . 100,277
Interest. . . . . . . . . . . . . . . . . . . . . . 97,315
Operating . . . . . . . . . . . . . . . . . . . . . 68,823
Ad valorem taxes. . . . . . . . . . . . . . . . . . 50,968
General and administrative. . . . . . . . . . . . . 13,820
Loss on early redemption of preferred shares. . . . 2,739
----------
Total Expenses . . . . . . . . . . . . . . . . 333,942
----------
Operating Income. . . . . . . . . . . . . . . . . . . . . 112,958
Equity in Earnings of Joint Ventures. . . . . . . . . . . 4,895
Income Allocated to Minority Interests. . . . . . . . . . (2,953)
Gain on Sale of Properties. . . . . . . . . . . . . . . . 714
Income from Discontinued Operations . . . . . . . . . . . 6,499
----------
Estimated Taxable Operating Income. . . . . . . . . . . . 122,113
Adjustments:
Depreciation and amortization . . . . . . . . . . . . . . 100,624
Loss on early redemption of preferred shares. . . . . . . 2,739
Equity in earnings of joint ventures. . . . . . . . . . . (4,895)
Income allocated to minority interests. . . . . . . . . . 2,953
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 . . . $ 175,625
==========
(c) Exhibits
Exhibit Number Description
--------------- -----------
23.1 Consent of Deloitte & Touche LLP
Page 36
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: July 20, 2004
WEINGARTEN REALTY INVESTORS
By: /s/ Joe D. Shafer
------------------------------
Joe D. Shafer
Vice President/Controller
(Principal Accounting Officer)
Page 37