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Weingarten Realty Investors Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 7, 2010 05:18PM

Weingarten Realty Investors (WRI) filed Quarterly Report for the period ended 2010-03-31. Weingarten Realty Investors has a market cap of $2.66 billion; its shares were traded at around $22.18 with and P/S ratio of 4.7. The dividend yield of Weingarten Realty Investors stocks is 4.7%. Weingarten Realty Investors had an annual average earning growth of 3.3% over the past 10 years.

WRI is in the portfolios of Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, Kenneth Fisher of Fisher Asset Management, LLC, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

Total revenues were $137.2 million in the first quarter of 2010 versus $144.4 million in the first quarter of 2009, a decrease of $7.2 million or 5.0%. This decrease resulted from a decrease in net rental revenues of $6.2 million and a decrease in other income of $1.0 million.

Total expenses for the first quarter of 2010 were $85.9 million versus $84.6 million in the first quarter of 2009, an increase of $1.3 million or 1.5%. The increase in operating expenses resulted primarily from an increase in management fees of $1.4 million due to the fair value increase of $.6 million in the assets held in grantor trust related to our deferred compensation plan and diversified capitalization of expenses within our leasing, legal and new development departments resulting primarily from decreased new development activity. In addition, legal expenses increased by $.8 million related to collection activities. This increase in operating expenses was offset by a decrease in depreciation and amortization which resulted primarily from the sale of an 80% interest in six shopping centers. Overall, direct operating costs and expenses (operating and net ad valorem taxes) of operating our properties as a percentage of rental revenues were 32.0% and 29.2% in 2010 and 2009, respectively.

Gross interest expense totaled $39.1 million in the first quarter of 2010, down $2.5 million or 6.0% from the first quarter of 2009. The decrease in gross interest expense was due primarily to the reduction in the average debt outstanding, resulting from the retirement of convertible notes and other unsecured debt, including the revolving credit facility. For the first quarter of 2010, the weighted average debt outstanding was $2.5 billion at a weighted average interest rate of 6.2% as compared to $3.2 billion outstanding at a weighted average interest rate of 5.4% in 2009. The decrease of $1.5 million in the amortization of convertible bond discount relates to the retirement of the convertible notes. Capitalized interest decreased $2.1 million as a result of new development stabilizations, completions and the cessation of carrying costs capitalization on several new development projects transferred to land held for development.

Net interest and other income was $2.9 million in the first quarter of 2010 versus $1.3 million in the first quarter of 2009, an increase of $1.6 million or 123.1%. This increase resulted primarily from the fair value increase of $.8 million associated with the assets held in a grantor trust related to our deferred compensation plan and interest earned on notes receivable from real estate joint ventures and partnerships for new development activities.

Total debt outstanding was $2.5 billion at both March 31, 2010 and December 31, 2009. Total debt at March 31, 2010 included $2.1 billion on which interest rates are fixed and $382.7 million, including the effect of $345.6 million of interest rate contracts that bear interest at variable rates. Additionally, debt totaling $1.2 billion was secured by operating properties while the remaining $1.3 billion was unsecured. At March 31, 2010, we had $76.8 million invested in short-term cash instruments.

In February 2010, we entered into an amended and restated $500 million unsecured revolving credit facility. The $500 million unsecured revolving credit facility expires in February 2013 and provides borrowing rates that float at a margin over LIBOR plus a facility fee. The borrowing margin and facility fee are priced off a grid that is tied to our senior unsecured credit ratings, which are currently 275.0 and 50.0 basis points, respectively. The facility also contains a competitive bid feature that will allow us to request bids for up to $250 million. Additionally, an accordion feature allows us to increase the new facility amount up to $700 million. As of April 30, 2010, no amounts were outstanding under this facility. The available balance under our revolving credit facility was $491.7 million at April 30, 2010, which is net of $8.3 million in outstanding letters of credit.

Read the The complete Report

Stocks Discussed: WRI,
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