Annual Report (Form 10-K), fiscal year 1993

ITEM 1. BUSINESS
General. Weingarten Realty Investors (the "Company"), an unincorporated trust organized under the Texas Real Estate Investment Trust Act and its predecessor entity began the ownership and development of shopping centers and other commercial real estate in 1948. The Company, as of December 31, 1993, owned or had interests in 150 developed income-producing real estate projects, 134 of which were shopping centers, located in the Houston metropolitan area and in other parts of Texas and in Louisiana, Arkansas, Oklahoma, New Mexico, Arizona, Maine and Tennessee. The Company's other commercial real estate projects included twelve industrial projects, three multi-family housing properties and one office building, which serves as the Company's headquarters. The Company's interests in these projects aggregated approximately 15.0 million square feet of building area and 57.3 million square feet of land area. The Company also owned interests in 24 parcels of unimproved land held for future development which aggregated approximately 8.5 million square feet.
The Company currently employs 153 persons, its principal executive offices are located at 2600 Citadel Plaza Drive, Houston, Texas 77008, and its phone number is (713) 866-6000.
Reorganizations. In December 1984, the Company engaged in a series of transactions primarily designed to enable it to qualify as a real estate investment trust ("REIT") for federal income tax purposes for the 1985 calendar year and subsequent years. The Company contributed certain assets considered unsuitable for ownership by the Company as a REIT and $3.5 million in cash to WRI Holdings, Inc. ("Holdings"), a Texas corporation and a newly-formed subsidiary of the Company, in exchange for voting and non-voting common stock of Holdings (which was subsequently distributed to the Company's shareholders) and $26.8 million of mortgage bonds. For additional information concerning Holdings, refer to Note 8 of the Notes to Consolidated Financial Statements at page 25.
On March 22, 1988, the Company's shareholders approved the conversion of the Company's form of organization from a Texas corporation to an unincorporated trust organized under the Texas Real Estate Investment Trust Act. The conversion was effected by the Company's predecessor entity, Weingarten Realty, Inc., transferring substantially all of its assets and liabilities to the newly-formed Company in exchange for common shares of beneficial interest, $.03 par value ("Common Shares"), in the Company. The shareholders of the corporation received Common Shares for their shares of Common Stock of the corporation (on a share- for-share basis), and the trust continues the business that was previously conducted by the corporation. The change did not affect the registrant's assets, liabilities, management or federal income tax status as a REIT.
Management Services. Through December 31, 1992, the Company contracted with Weingarten Realty Management Company (the "Management Company"), whereby the Management Company performed certain services for the Company as an independent contractor. The Management Company provided leasing and management services with respect to the operation of substantially all of the Company's properties including collecting rent, making repairs, cleaning and providing maintenance. In addition, the Management Company performed acquisition and development services for the Company such as conducting feasibility studies on properties subject to purchase, constructing additional improvements on its existing properties, developing new properties or renovating existing improvements. The Management Company paid all operating expenses of the properties out of the rents collected from such properties and was required to maintain books and records and to furnish the Company monthly and annual financial reports and annual budgets for each property. The Management Company was paid a fee under the management agreement for managing the Company's properties based on gross revenues from the Company's income producing properties and was paid additional fees for leasing services and for certain additional services specifically requested by the Company, including market research, advertising and promotion, development, acquisition and management information services. The Management Company was also reimbursed for certain of its costs and expenses. The Company continues to be "self-advised" and is now self-managed.
Effective January 1, 1993, the Management Company was acquired by the Company, thereby allowing direct management of its properties. This transaction was completed based on a favorable private letter ruling by the Internal Revenue Service. It formally integrated the management personnel of the Company with
management personnel previously employed by the Management Company. The combination had no material effect on the Company's operations or financial position.
Location of Properties. Historically, the Company has emphasized investments in properties located primarily in the Houston area. Since 1987, the Company has actively acquired properties outside of Houston. Of the Company's 174 properties which were owned as of December 31, 1993, 77 of its 150 developed properties and 16 of its 24 parcels of unimproved land were located in the Houston metropolitan area. In addition to these properties, the Company owned 46 developed properties and 5 parcels of unimproved land located in other parts of Texas. Because of the Company's investments in the Houston area, as well as in other parts of Texas, the Houston and Texas economies affect, to some degree, the business and operations of the Company.
Houston's 1993 economic performance was generally flat compared to 1992 and performed at a lower level than the strengthening national economy. This stagnant economic performance was due in large part to weak oil and gas prices, energy industry consolidations, and national policy uncertainty in the health care and aerospace industries. A deterioration in the Houston or Texas economies could adversely affect the Company. However, the Company's centers are generally anchored by grocery and drug stores under long-term leases, and such types of stores tend to be less affected by economic change.
Competition. There are other developers and operators engaged in the development, acquisition, and operation of shopping centers and commercial property who compete with the Company in its trade areas. This results in competition for both acquisitions of existing income-producing properties and also for prime development sites. There is also competition for tenants to occupy the space that the Company and its competitors develop, acquire and manage.
The Company believes that the principal competitive factors in attracting tenants in its market areas are location, price, anchor tenants and maintenance of properties and that the Company's competitive advantages include the favorable locations of its properties, its ability to provide a retailer with multiple locations in the Houston area with anchor tenants and its practice of continuous maintenance and renovation of its properties.
Financial Information. Certain additional financial information concerning the Company is included in the Company's Consolidated Financial Statements located on pages 16 through 30 herein.
ITEM 2.



ITEM 2. PROPERTIES
At the end of 1993 the Company's real estate properties consisted of 174 locations in eight states. A complete listing of these properties, including the name, location, building area and land area, as applicable, is as follows:
SHOPPING CENTERS
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Note: Total square footage includes 4,700,000 square feet of land leased and 170,000 square feet of building leased from others. The square feet figures represent the Company's proportionate ownership of the entire property. * Denotes partial ownership. The Company's interest is 50% except where noted.
General. In 1993, no single property accounted for more than 3.7% of the Company's total assets or 5.6% gross revenues. Three properties, in the aggregate, represented approximately 12.6% of the Company's gross revenues for the year ended December 31, 1993; otherwise, none of the remaining properties accounted for more than 2.6% of the Company's gross revenues during the same period. The occupancy rate for all of the Company's improved properties as of December 31, 1993 was 92.1%.
Substantially all of the Company's properties are owned directly by the Company (subject in certain cases to mortgages), although the Company's interests in certain of its properties are held indirectly through its interests in joint ventures or under long-term leases. In the opinion of management of the Company, its properties are well maintained and in good repair, suitable for their intended uses, and adequately covered by insurance.
Shopping Centers. As of December 31, 1993, the Company owned, either directly or through its interests in joint ventures, 134 shopping centers with approximately 12.4 million square feet of building area. The shopping centers were located predominantly in Texas with other locations in Louisiana, Arkansas, Oklahoma, New Mexico, Arizona, Maine and Tennessee.
The Company's shopping centers are primarily neighborhood and community shopping centers which range in size from 100,000 to 400,000 square feet, as distinguished from small strip centers which generally contain 5,000 to 25,000 square feet and from large regional enclosed malls which generally contain over 500,000 square feet. Most of the centers do not have climatized common areas but are designed to allow retail customers to park their automobiles in close proximity to any retailer in the center. The Company's centers are customarily constructed of masonry, steel and glass and all have lighted, paved parking areas which are typically landscaped with berms, trees and shrubs. They are generally located at major intersections in close proximity to neighborhoods which have existing populations sufficient to support retail activities of the types conducted in the Company's centers.
The Company has approximately 2,600 separate leases with approximately 1,900 different tenants in its portfolio, including national and regional supermarket chains, other nationally or regionally known stores (including drug stores, discount department stores, junior department stores and catalog stores) and a great variety of other regional and local retailers. The large number of locations offered by the Company and the types of traditional anchor tenants help attract prospective new tenants. National and regional supermarket chains which are tenants in the Company's centers include Albertsons, Fiesta, Fleming Foods, HEB, Kroger Supermarkets, Market Basket, Price-Lo, Randalls Food Markets, Rice Food Markets and Super Value Supermarkets. In addition to these supermarket chains, the Company's nationally and regionally known retail store tenants include Eckerd and Walgreen drugstores; K-Mart and Wal-Mart discount stores; Beall's, Palais Royal and Weiner's junior department stores; MacFrugals, Marshall's, Office Depot, Solo Serve, 50-Off and T.J. Maxx off-price specialty stores; Luby's, Piccadilly and Wyatt cafeterias; Academy, Oshman's and SportsTown sporting goods; Service Merchandise catalog stores; and the following restaurant chains: Arby's, Boston Chicken, Burger King, Champ's, Church's Fried Chicken, Dairy Queen, Domino's, Jack-in-the-Box, Kentucky Fried Chicken, Long John Silver's, McDonald's, Olive Garden, Outback Steakhouse, Pizza Hut, Shoney's, Steak & Ale, Taco Bell and What-a-burger. The Company also leases space in 3,000 to 10,000 square foot areas to national chains such as Clothestime, The Gap, One Price Stores, Payless Shoes (a division of the May Company) and Radio Shack (McDuff's).
The Company's shopping center leases have lease terms generally ranging from three to five years for tenant space under 5,000 square feet and from 10 to 35 years for tenant space over 10,000 square feet. Leases with primary lease terms in excess of 10 years, generally for anchor and out-parcels, frequently contain renewal options which allow the tenant to extend the term of the lease for one or more additional periods, each such period generally being of a shorter duration than the primary lease term. The rental rates paid during a renewal period are generally based upon the rental rate for the primary term, sometimes adjusted for inflation or for the amount of the tenant's sales during the primary term.
Most of the Company's leases provide for the monthly payment in advance of fixed minimum rentals, the tenants' pro rata share of ad valorem taxes, insurance (including fire and extended coverage, rent insurance and liability insurance) and common area maintenance for the center (based on estimates of the costs for such
items) and for the payment of additional rentals based on a percentage of the tenants' sales ("percentage rentals"). Utilities are generally paid directly by tenants except where common metering exists with respect to a center, in which case the Company makes the payments for the utilities and is reimbursed by the tenants on a monthly basis. Generally, the Company's leases prohibit the tenant from assigning or subletting its space and require the tenant to use its space for the purpose designated in its lease agreement and to operate its business on a continuous basis. Certain of the lease agreements with major tenants contain modifications of these basic provisions in view of the financial condition, stability or desirability of such tenants. Where a tenant is granted the right to assign or sublet its space, the lease agreement generally provides that the original lessee will remain liable for the payment of the lease obligations under such lease agreement.
During 1993, the Company added approximately 1.2 million square feet to its portfolio of shopping center properties through the acquisition of properties and another 148,000 square feet of space through development. The acquisitions were primarily focused in the Houston area. However, during the year, the Company entered two new markets -- El Paso, which complements its West Texas and Albuquerque holdings, and Phoenix, Arizona, which represents an opportunity to gain a significant presence in a growing metropolitan area.
Industrial Properties. The Company currently owns a total of twelve industrial projects, all located in the greater Houston area. These projects include 40 buildings having a total of 2.3 million square feet of building area situated on 5.6 million square feet of land. These figures include the Company's interests in a joint venture. Major tenants of the Company's industrial properties include Advo (a leading direct mail advertising company), Pepsico's PFS division, Stone Container Corporation, Iron Mountain Records Storage and Paul Arpin Van Lines.
Four of such buildings, containing approximately 642,000 square feet of building space, are located in the Railwood Industrial Park, a master-planned industrial park in northeast Houston, which offers full utilities, loading docks and rail service in an architecturally controlled environment.
During 1993, the Company acquired one project representing 68,000 square feet of office/service space. This center is located in Houston and had an average occupancy of 26% at the time of the acquisition.
Office Building. The Company owns a seven-story, 121,000 square foot masonry office building with a detached, covered, three-level parking garage situated on 171,000 square feet of land fronting on North Loop 610 West in Houston. The building serves as the Company's corporate headquarters. Other than the Company, the major tenant of the building is Charter Bank, which occupies 22%.
Multi-family Residential Properties. The Company owns, through joint venture interests, three apartment projects located in Houston and San Antonio, Texas and Shreveport, Louisiana. The Company's percentage ownership represents approximately 283 units of the projects' aggregate 833 units. All are garden- type projects complemented by landscaping, recreational areas and adequate parking. These projects are managed by our joint venture partners, all of whom are experienced apartment operators.
Unimproved Land. The Company owns, directly or through its interest in joint ventures, 24 parcels of unimproved land aggregating approximately 8.5 million square feet of land area located in Texas and Louisiana. These properties include approximately 5.6 million square feet of land adjacent to certain of the Company's existing developed properties, which may be used for expansion of these developments, as well as approximately 2.9 million square feet of land which may be used for new development. Almost all of these unimproved properties are served by roads and utilities and are ready for development. Most of these parcels are suitable for development as shopping centers, and the Company intends to emphasize the development of these parcels for such purpose.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary routine litigation incidental to its business, to which the Company is a party or to which any of its properties is subject.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to the twelve executive officers of the Company as of March 4, 1994.
Mr. S. Alexander is the Company's Chairman and its Chief Executive Officer. He has been employed by the Company since 1955 and has served in his present capacity since January 1, 1993. Prior to becoming Chairman, Mr. Alexander served as President and Chief Executive Officer of the Company since 1962. Mr. Alexander is President, Chief Executive Officer and a Trust Manager of Weingarten Properties Trust and a member of the Houston Regional Advisory Board of Texas Commerce Bank National Association, Houston, Texas ("TCB").
Mr. Debrovner became President and Chief Operating Officer of the Company on January 1, 1993. Prior to assuming such position, Mr. Debrovner served as President of Weingarten Realty Management Company (the "Management Company") since the Company's reorganization in December 1984. Prior to such time, Mr. Debrovner was an employee of the Company for 17 years, holding the positions of Senior Vice President from 1980 until March 1984, and Executive Vice President until December 1984. As Executive Vice President, Mr. Debrovner was generally responsible for the Company's operations. Mr. Debrovner is also a Trust Manager Weingarten Properties Trust.
Mr. Robertson is Executive Vice President of the Company and its Chief Financial Officer. Prior to becoming Executive Vice President, Mr. Robertson served as Senior Vice President and Chief Financial Officer since 1980. He has been with the Company since 1971. Mr. Robertson is also a Trust Manager of Weingarten Properties Trust, and a director of PaineWebber Retail Properties Investments, Inc.
Mr. A. Alexander became Executive Vice President/Asset Management of the Company on January 1, 1993. Prior to his present position, Mr. Alexander was Senior Vice President/Asset Management of the Management Company. Prior to such time, Mr. Alexander was Vice President of the Management Company and, prior to the Company's reorganization in December 1984, was Vice President and an employee of the Company since 1978. Mr. Alexander has been primarily involved with leasing operations at both the Company and the Management Company. Mr. Alexander is also a Trust Manager of Weingarten Properties Trust and a director of Charter Bank Houston, N.A.
Ms. DuFour became Vice President/Acquisitions and Secretary of the Company on January 1, 1993. From January 1986 until March 1989, she was Secretary/Treasurer and from March 1989 until December 1992 she was Vice President, Secretary and Treasurer of the Company.
Mr. Karp became Vice President/Operating Properties of the Company on January 1, 1993. For the five years prior to that time, he served as Vice President/Operating Properties of the Management Company.
Mr. Marcisz became Vice President/Construction of the Company on January 1, 1993. For the five years prior to that time, he served as Vice President/Construction of the Management Company.
Mr. Richter became Vice President/Financial Administration and Treasurer of the Company on January 1, 1993. For the five years prior to that time, he served as Vice President/Financial Administration and Treasurer of the Management Company.
Mr. Tucker became Vice President/General Counsel of the Company on January 1, 1993. For the five years prior to that time, he served as Vice President, Secretary and General Counsel of the Management Company.
Mr. Cunningham became Vice President/New Development and Acquisitions on January 1, 1993. For the five years prior to that time, he served as Vice President/New Development and Acquisitions of the Management Company.
Mr. Hendrix became Vice President/Leasing of the Company during January 1994. From January 1, 1993 until that time, he served as Associate Director/Leasing of the Company, and for the four years prior to that time, he served the Management Company as a leasing executive.
Mr. Weingarten became Vice President/Leasing of the Company during January 1994. From January 1, 1993 until that time, he served as Associate Director/Leasing of the Company, and for the four years prior to that time, he served the Management Company as a leasing executive.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON SHARES OF BENEFICIAL INTEREST AND RELATED SHAREHOLDER MATTERS
The number of holders of record of the Company's Common Shares, as of March 4, 1994 was 2,443. The high and low sale prices per share of the Company's Common Shares, as reported on the New York Stock Exchange composite tape, and dividends per Common Share paid for the periods indicated were as follows:
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected consolidated financial data with respect to the Company and should be read in conjunction with the Consolidated Financial Statements.
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(1) Relates to prepayment penalties paid in connection with the early retirement of permanent debt.
(2) Funds from operations does not consider the effects of changes in operating assets and liabilities such as receivables and payables; consequently, it may not be the same as cash flows from operating activities.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should read in conjunction with the Consolidated Financial Statements and the Notes thereto and the Comparative Summary of Selected Financial Data appearing elsewhere in this report. Historical results and percentage relationships on the Statements of Consolidated Income, including trends which might appear, should not be taken as indicative of future operations.
FINANCING AND CAPITAL STRUCTURE
The Company's total debt decreased $95.9 million to $147.7 million at December 31, 1993, compared to $243.6 million at the end of 1992. This significant reduction in debt between years was primarily the result of the Company's decision to call all $123.0 million of outstanding convertible note and debenture issues during 1993. The issues were converted into 3.9 million common shares, all of which had a beneficial anti-dilutive effect on earnings per share.
During March 1993, the Company raised $113.0 million of new capital through an equity offering of 2.8 million common shares. Although a large portion of these proceeds was initially used to reduce short-term
revolving credit debt, the proceeds were ultimately the primary source of the Company's capital needs for the year. During 1993, approximately $96.0 million was invested in new assets, consisting of acquisitions totaling 1.3 million square feet, the development of new shopping centers and capital improvements to existing properties.
The Company had an average cost of debt for 1993 of 8.1% and its current debt structure provides protection against future interest rate fluctuations. The $92.2 million of floating-rate debt currently in place is covered by virtue of $40.0 million of interest rate swap contracts (extending out 8-11 years) and the existing option of liquidating the $51.4 million of government securities and reducing a like amount of debt. As a result of the conversion of all outstanding convertible notes and debentures into equity and the common share offering, the Company's financial position and capital structure is the strongest in its history.
LIQUIDITY
The Company anticipates that cash flow from operating activities will continue to provide adequate capital for all principal payments as well as dividend payments in accordance with REIT requirements, and that cash on hand, borrowings under its existing credit facilities, and the use of project financing as well as other debt and equity alternatives will provide the necessary capital to achieve growth. Cash flow from operating activities as reported in the Statements of Consolidated Cash Flows increased to $57.6 million for 1993 from $38.3 million for 1992.
The Company satisfied its REIT requirement of distributing at least 95% of ordinary taxable income with dividend distributions of $52.3 million in 1993. Accordingly, federal income taxes were not provided. The Company's dividend payout ratio for the year approximated 90% of the 1993 funds from operations (defined as net income plus depreciation, amortization and extraordinary charge, less gains on sales of property and securities). Recently, the Company's Board of Trust Managers approved an increase in the quarterly dividend per common share from $.54 to $.57.
As of December 31, 1993, the Company had approximately $59.7 million available under its $100 million revolving credit facilities. The Company also has a substantial number of operating properties which are currently free of debt or other restrictions, thereby providing a collateral base for future borrowings. More importantly, the Company's extremely low debt-to-equity ratio subsequent to the capital restructuring discussed above affords it a wide range of alternatives in the financial markets to fund future capital needs.
RESULTS OF OPERATIONS
The Company considers funds from operations to be the most appropriate measure of the performance of an equity REIT since such measure does not recognize depreciation and amortization expenses as operating expenses. Management believes that reduction for these charges are not meaningful in evaluating income-producing real estate, which historically has not depreciated.
COMPARISON OF 1993 TO 1992
Net income increased $16.2 million, or 80.5%, to $36.2 million ($1.50 per share) in 1993 from $20.1 million ($1.15 per share) in 1992. Funds from operations increased $17.3 million, or 42.4%, to $58.0 million in 1993 from $40.7 million in 1992. These significant increases realized between comparative years relate to the Company's shopping center acquisitions during the past two years, as well as a substantial decrease in interest expense achieved through the conversion into equity of all the convertible issues outstanding at the start of 1993.
Rental revenues were $94.2 million for 1993 as compared to $83.2 million for 1992. The $11.0 million difference represents a 13.2% increase. New properties added through the Company's acquisition and new development programs contributed a significant part of this increase.
Interest income increased $1.9 million in 1993 as compared with 1992, primarily because the Company had significantly more funds invested in government securities in 1993 than it did in 1992. The funds invested during 1993 represented a portion of the proceeds derived from a public offering during March of 1993. The
increase in interest income was also due to $.4 million more interest received from WRI Holdings, Inc. on the Hospitality mortgage bonds, due to its improved cash flow from its hotel operations. The Company did not recognize interest income from various other debt with WRI Holdings, Inc. of approximately $5.2 million and $4.9 million in 1993 and 1992, respectively.
The $.8 million increase in other income between years is due, in part, to additional income recorded with respect to the Company's unconsolidated equity investment in real estate properties. Since the fourth quarter of 1992, the Company has increased its investment in joint ventures accounted for using the equity method, resulting in this increase. The increase in other income is also due to certain management fee income relating primarily to the non-owned portion of the Company's joint venture investments, as the Company became self-managed at the beginning of 1993 (more fully explained below).
Interest expense decreased $8.6 million in 1993 to $10.0 million, as compared to $18.7 million in 1992, primarily because average debt outstanding during the year decreased $129.2 million, from $267.7 million in 1992 to $138.5 million in 1993. This significant reduction in average debt outstanding was achieved by the use of proceeds from the Company's last two public offerings and the conversion of all of the Company's outstanding convertible debt issues into equity. The conversion of the convertible notes and debentures during 1993 is expected to further decrease interest expense by $3.1 million and increase net income by a like amount for 1994.
The reduction in interest expense for the year was partially offset by the Company's $40 million in interest rate swap contracts. Although these instruments provide rate protection for the long-term (8.1% for 8-11 years), they penalized the 1993 results of operations with $1.0 million of additional interest expense. During the year, the Company had an average of only $18.5 million of floating rate debt outstanding, thus leaving approximately $21.5 million of unmatched interest rate swaps. The reduction in interest expense was also partially offset by a $.9 million decrease in the amount of interest which was capitalized during the year (thus serving to increase interest expense). The significant portion of this change in capitalized interest ($.7 million) relates to certain tracts of land under development, which, as of the end of 1992, had reached their net realizable value.
Depreciation and amortization was $23.4 million for 1993 and $21.3 million for 1992 and operating expenses were $17.3 million for 1993 and $14.6 million for 1992. This aggregate $4.8 million increase was primarily due to property additions made by the Company during the past two years. Ad valorem taxes charged to operations increased $1.5 million to $12.9 million in 1993 from $11.4 million in 1992, also as the result of the property additions mentioned above.
Gains on sales of property and securities for 1993 relate to gains realized as the results of fires at two of the Company's properties. The fires had no material impact on the Company's current earnings.
Effective January 1, 1993, Weingarten Realty Management Company (the "Management Company"), a separate but related company, was acquired by the Company, thus allowing direct management of the Company's properties. The Company also performs property management services for joint ventures in which it participates. The acquisition had no material financial effect on the Company because the additional salaries paid as a result of the merger were offset by the various management fees no longer being paid to the Management Company.
Beginning in the first quarter of 1994, the Company will adopt Statement of Financial Accounting Standards No. 115, which requires that marketable securities be carried at the lower of aggregate cost or market. The adoption of this standard will not have a material effect on the Company's consolidated financial statements.
COMPARISON OF 1992 TO 1991
Net income increased $2.1 million, or 11.8%, to $20.1 million ($1.15 per share) in 1992 from $18.0 million ($1.08 per share) in 1991. Funds from operations increased $4.4 million, or 12.0% to $40.7 million in 1992 from $36.4 million in 1991, primarily due to increased rental revenues.
Rental revenues were $83.2 million for 1992 as compared to $74.5 million for 1991. The $8.7 million difference represents an 11.8% increase. New properties added through the Company's acquisition and development programs contributed $6.7 million of the increase. The remainder stems from existing properties and relates to increases in minimum rentals on renewals and increases in reimbursements of ad valorem taxes and other operating expenses.
Interest income decreased approximately $1.9 million in 1992 as compared with 1991, primarily because of less interest income from the government securities. The Company's remaining investment of $17.3 million in these securities was sold at the end of the second quarter of 1992, after having been held during all of 1991. These securities were sold because management had concluded that the gain associated with this investment had been maximized. The Company did not recognize interest income from various debt with an affiliate of approximately $4.9 million and $4.7 million in 1992 and 1991, respectively.
The $.5 million increase in other income between years related primarily to lease cancellation income, most of which was received during the second quarter of 1992 as the result of a settlement with a prior tenant. The remainder of the positive change in this line item was due to increased income recorded with respect to the Company's unconsolidated equity investments in real estate properties.
Interest expense decreased $1.5 million in 1992 to $18.7 million, as compared to $20.2 million in 1991. Of this decrease, $1.0 million related to a decrease in average rate from 8.2% in 1991 to 7.8% in 1992. The remainder is due to an increase in capitalized interest associated with the increased development activity experienced by the Company. Average debt outstanding was relatively stable between years in spite of the capital expenditures previously mentioned, due to the $82.1 million of new proceeds associated with the 2 million common share offering and the sale of the Company's remaining investment in government securities.
Depreciation and amortization was $21.3 million for 1992 and $19.0 million for 1991 and operating expenses were $14.6 million for 1992 and $12.6 million for 1991. This aggregate $4.3 million increase was primarily due to property additions made by the Company during the past two years. Ad valorem taxes charged to operations increased to $11.4 million in 1992 from $9.5 million in 1991. The $1.9 million increase was due to property additions as well as tax rate increases.
The increase between years of $.5 million in general and administrative expenses was due to increases in executive compensation, professional fees and state income taxes.
The $1.8 million gains on sales property and securities is the result of a $1.3 million gain realized upon the sale of the Company's remaining $17.3 million investment in government securities coupled with gains associated with the sale of two small tracts of unimproved land. The extraordinary charge of $1.2 million consisted of prepayment penalties incurred as a result of the Company's election to pay off a number of its permanent loans.
EFFECTS OF INFLATION
The rate of inflation remained modest during 1993 and, as such, was inconsequential to the Company's operations. The Company has structured its leases, however, in such a way as to remain largely unaffected should significant inflation occur. Most of the leases contain percentage rent provisions with the Company to receive rentals based on the tenants' gross sales. Many leases provide for increasing minimum rentals during the terms of the leases through escalation provisions. In addition, many of the Company's leases are for terms of less than ten years, which allows the Company to adjust rental to changing market conditions when the leases expire. Most of the Company's leases require the tenant to pay a large portion of operating expenses. As a result of these lease provisions, increases due to inflation, as well as tax rate increases which are usually anticipated to occur, generally do not have a significant adverse effect upon the Company's operating results.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
Weingarten Realty Investors:
We have audited the accompanying consolidated balance sheets of Weingarten Realty Investors as of December 31, 1993 and 1992, and the related statements of consolidated income, cash flows and shareholders' equity for each of the three years in the period ended December 31, 1993. Our audits also included the financial statement schedules listed in the Index at Item 14. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Weingarten Realty Investors at December 31, 1993 and 1992, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE
Houston, Texas February 24, 1994
STATEMENTS OF CONSOLIDATED INCOME (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
See Notes to Consolidated Financial Statements.
CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
See Notes to Consolidated Financial Statements.
STATEMENTS OF CONSOLIDATED CASH FLOWS (AMOUNTS IN THOUSANDS)
See Notes to Consolidated Financial Statements.
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
See Notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Operations of Weingarten Realty Investors, a Texas business trust, consist of one business segment -- acquiring, developing and leasing of real estate, primarily anchored shopping centers, in Texas and throughout the southwestern part of the United States. The Company currently operates and intends to operate in the future as a real estate investment trust ("REIT").
Consolidated financial statements include the accounts of the Company, its subsidiaries and its interest in 50% or more-owned joint ventures and partnerships. All significant intercompany balances and transactions have been eliminated. Joint ventures which are less than 50% owned are accounted for using the equity method.
Carrying charges, principally interest and ad valorem taxes, of land under development and buildings under construction are capitalized as part of projects under development and buildings and improvements to the extent that such charges do not cause the carrying value of the asset to exceed its net realizable value.
Property is carried at cost plus capitalized carrying charges. Depreciation is computed using the straight-line method, generally over estimated useful lives of 18-50 years for buildings and 10-20 years for parking lot surfacing and equipment. Maintenance and repairs are expensed. Major replacements are capitalized and the replaced asset and corresponding accumulated depreciation is removed from the accounts.
Marketable debt securities, consisting of U.S. government agency guaranteed pass-through certificates and U.S. Treasury Notes, are carried at amortized cost. Premiums and discounts are amortized (accreted) to operations over the estimated remaining lives of the securities using the constant yield method.
Federal income taxes are not provided because the Company believes it qualifies as a REIT under the provisions of the Internal Revenue Code and, therefore, applicable taxable income is included in the taxable income to its shareholders. As a REIT, the Company must distribute at least 95% of its ordinary taxable income to its shareholders and meet certain other requirements. Taxable income differs from net income for financial reporting purposes principally because of differences in the timing of recognition of interest, ad valorem taxes, depreciation, rental revenue and installment gains on sales of property.
Unamortized debt and lease costs are amortized primarily on a straight-line basis over the terms of the debt and over the lives of leases, respectively.
Rental revenue is generally recognized on a straight-line basis over the life of the lease for operating leases and over the lease terms using the interest method for direct financing leases. Contingent rentals (payments for taxes, insurance and maintenance by the lessees and for an amount based on a percentage of the tenants' sales) are estimated and accrued over the lease year.
Income per common share is computed using the weighted average number of common shares outstanding during the period and excludes the negligible dilutive effect of shares issuable in connection with share options and awards.
Cash flows are computed using the indirect method. For cash flow purposes, the Company considers all highly liquid debt instruments with a maturity of less than three months as cash equivalents.
Dollar amounts presented in the tabulations in the notes to consolidated financial statements are stated in thousands of dollars, except per share amounts.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 2. DEBT AND CONVERTIBLE DEBENTURES
The Company's total debt consisted of the following:
Principal due in the next five years (excluding amounts due under interim debt), in millions, is $.8 in 1994, $.5 in 1995, 1996 and 1997, and $.6 in 1998. The Company made cash payments for interest on debt, net of amounts capitalized, in millions, of $9.4 in 1993, $18.3 in 1992 and $19.8 in 1991.
At December 31, 1993, property under direct financing leases and other property with carrying values aggregating $328 million and current and future rentals from these properties and leases were used as collateral for the Company's debt.
Various debt agreements contain restrictive covenants, the most restrictive of which requires the Company to produce annual consolidated distributable cash flow, as defined in the applicable debt agreements, of not less than 170% of interest payments, to limit the payment of dividends to no more than 95% of such annual consolidated distributable cash flow and to limit short term debt (as defined) to the greater of 33% of total debt or $75 million. Management believes that the Company is in compliance with all restrictive covenants.
Permanent and Interim Debt
The Company generally classifies debt as permanent if the debt is payable over an initial period of more than ten years and as interim if the debt is payable over five years or less. Interim debt is typically used to provide funds for the acquisition or development of properties, and is replaced by permanent debt, subject to availability and relative costs.
The Company has a revolving credit agreement with a bank for $80 million, available through June 2004. Under the agreement, the lender has the option to call and convert the outstanding debt to a term loan that would be payable over approximately four years. During 1993, the balance outstanding under the agreement
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
averaged about $14.3 million with a weighted average interest rate of 3.8%; and the maximum balance outstanding under the agreement was $62.5 million.
The Company also has an additional $20 million revolving credit agreement with another bank, available through May 1994. Funds advanced under the agreement generally bear interest at the federal funds rate plus one percent, without any obligation to maintain collected balances. Upon termination of the agreement, the outstanding amount may be converted to a term loan payable over a two-year period.
During 1993, the balance outstanding under the agreement averaged $4.2 million with a weighted average interest rate of 4.1%. The maximum balance outstanding under the agreement was $20 million.
These revolving credit facilities are subject to normal banking terms and conditions and do not materially restrict the Company's activities.
In 1992, the Company purchased $40 million of interest rate swap contracts which fix the average effective interest rate of an equal amount under the Company's revolving credit agreements at an estimated 8.1% for periods maturing in 2001 and 2004. Amounts outstanding under the revolving credit agreement up to the $40 million notional amount of the interest rate swaps are not callable by the lender as long as the swaps are owned by the Company. The Company is currently paying a higher rate of interest than it is receiving under the swap agreements, and thus currently has no financial exposure in the unlikely event of default by the counterparty.
Convertible Notes and Debentures
In 1993, the Company converted all of its convertible notes and debentures into common shares of beneficial interest. A total of 3.9 million shares were issued during the year related to these conversions. Had all of the debt been converted as of January 1, 1993, net income per common share would have been $1.55 per share for the year ended December 31, 1993.
NOTE 3. CARRYING CHARGES CAPITALIZED
The following carrying charges were capitalized:
NOTE 4. LEASING OPERATIONS
Leasing Arrangements
The Company's lease terms range from less than one year for smaller tenant spaces to thirty-five years for larger tenant spaces. In addition to minimum lease payments, most of the leases provide for contingent rentals.
Rentals under Operating Leases
Future minimum rental income from non-cancelable operating leases at December 31, 1993, in millions, is: $75.5 in 1994; $67.2 in 1995; $58.1 in 1996; $49.1 in 1997; $42.4 in 1998 and $277.9 thereafter. The future minimum rental amounts do not include estimates for contingent rentals. Such contingent rentals, in millions, aggregated $21.4 in 1993, $19.5 in 1992 and $16.5 in 1991.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Property under Direct Financing Leases
Leases that are, in substance, the financing of an asset purchase by the party leasing the property are recorded as property under direct financing leases. The Company, in its capacity as lessor, has removed the leased property from the books and recorded the future lease payments receivable using the following components:
At December 31, 1993, minimum lease payments to be received in each of the five succeeding years, in millions, are: $1.9 in 1994 and 1995; $1.8 in 1996 and 1997 and $1.7 in 1998. The future minimum lease payments do not include amounts for contingent rentals; contingent rental income on properties leased under direct financing leases, in millions, was $.6 in 1993, $.8 in 1992 and $.6 in 1991.
NOTE 5. LEASE COMMITMENTS
Operating Leases
The Company leases land and a shopping center from the owners, and then subleases these properties to other parties. Future minimum rentals under these operating leases, in millions, are: $1.2 in 1994; $1.3 in 1995; $1.2 in 1996; $1.1 in 1997; $1.0 in 1998 and $15.4 thereafter.
Future minimum rental payments on these leases have not been reduced by future minimum sublease rentals aggregating $15.8 million through 2017 that are due under various noncancelable subleases. The following summarizes total rental expenses and sublease rental revenue (excluding amounts for improvements constructed by the Company on the leased land):
Capital Leases
Leases which transfer substantially all of the risks and benefits of ownership associated with the underlying property to the Company are considered capital leases, and the present value of the required lease payments are recorded as property and the related debt is recorded as obligations under capital leases. The debt is amortized as each lease payment is made. Property under capital leases, consisting of a shopping center aggregating $6.5 million, is included in buildings and improvements at December 31, 1993 and 1992.
Future minimum lease payments under these capital leases total $12.7 million, with annual payments due of $.6 million in 1994 through 1998, and $9.7 million thereafter. The amount of these total payments representing interest is $6.4 million. Accordingly, the present value of the net minimum lease payments is $6.1 million at December 31, 1993.
The Company subleases this property to other parties. The minimum lease payments discussed above have not been reduced by minimum sublease rentals aggregating $3.4 million due under non-cancelable
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
subleases. Minimum sublease rentals do not include estimates for contingent rentals that aggregated $.2 million in 1993 and 1992 and $.1 million in 1991.
NOTE 6. RELATED PARTY TRANSACTIONS
The Company and Weingarten Realty Management Company (the "Management Company") were related parties during 1991 and 1992 because, prior to January 1, 1993, the Management Company was owned by directors and shareholders of the Company. As the Company had only a few employees, its operations were primarily performed by employees of the Management Company through a contract to lease, manage and develop the Company's properties. The Company and WRI Holdings, Inc. ("Holdings") are related parties because they share certain directors and are under common management. See Note 8 for related party information about Holdings.
Effective January 1, 1993, the assets of the Management Company, which were not material in relation to the Company's consolidated balance sheet, were acquired by the Company through the assumption of less than $.1 million of net liabilities from the shareholders of the Management Company. This event did not have a significant effect on 1993 earnings because the additional salaries paid as the result of this merger were offset by the various fees no longer being paid to the Management Company.
The Management Company charged the Company fees aggregating $8.3 million and $8.0 million for 1992 and 1991, respectively, in connection with services rendered under the management contract. Fees paid under the management contract were generally based upon a specified percent of revenues, minimum lease rentals of space leased and costs incurred for acquisition, construction and development of the Company's properties. The Management Company owed the Company $1.3 million at December 31, 1992.
The Company owns an interest in several joint ventures and partnerships. Notes receivable from these entities totalled $10.1 million and $14.0 million at December 31, 1993 and 1992, respectively, and bear interest at 2.7% to 9.3% at December 31, 1993 and are due at various dates through 2020.
The Company's $80 million revolving credit agreement is with Texas Commerce Bank National Association ("TCB").
NOTE 7. COMMITMENTS AND CONTINGENCIES
The Company was contingently liable at December 31, 1993 for $1.2 million of notes payable executed by various joint ventures and partnerships.
The Company is committed to lend Holdings an additional $3.3 million. The Company remains contingently liable for $1.5 million of notes payable by Hospitality Venture which were transferred to Holdings in 1988.
The Company is involved in various matters of litigation arising in the normal course of business. While the Company is unable to predict with certainty the amounts involved, the Company's management and counsel are of the opinion that, when such litigation is resolved, the Company's resulting liability, if any, will not have a significant effect on the Company's consolidated financial position.
NOTE 8. INVESTMENT IN MORTGAGE BONDS AND NOTES RECEIVABLE FROM AN AFFILIATE
Concurrent with the Company being organized as a REIT in 1984, certain property and investments in joint ventures, which were considered to be incompatible with a REIT's operation, and $3.5 million were transferred to Holdings in exchange for $26.8 million of mortgage bonds. The transfer price for the assets was based upon independent appraisals. The appraised values exceeded the Company's carrying value of the assets; however, because Holdings is a related party, the gain of $17.3 million was deferred by the Company. Holdings currently owns three investments: a 50% interest in Hospitality Venture, which owns and operates eight motor hotels in Florida and Alabama ("Hospitality"); unimproved land in a multi-use land development
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
north of Houston ("River Pointe"); and unimproved land in a major industrial park in Houston ("Railwood").
The mortgage bonds and notes receivable from Holdings, and related deferred gain, were as follows:
Before 1988, Holdings was current on the payments of all interest; accordingly, the Company had recognized interest income on all of Holdings' debt at the stated interest pay rates. During the fourth quarter of 1988, Holdings' cash flow and capital resources became insufficient to meet the full interest requirements on the mortgage bonds. The accrual of interest income on the River Pointe and Railwood mortgage bonds has been suspended and interest income on the Hospitality mortgage bonds has been limited to Holdings' pro rata share of cash flow from Hospitality Venture. Interest income from the mortgage bonds and notes receivable recognized by the Company for financial reporting purposes, in millions, aggregated $2.1 for 1993, and $1.6 for 1992 and 1991. At December 31, 1993 and 1992, accrued interest receivable from Holdings was $.4 million and $.3 million, respectively.
The Company had an unrecorded receivable for interest of $22.3 million and $17.1 million at December 31, 1993 and 1992, respectively. Of these amounts, $5.4 million and $4.8 million represent the difference between the accrual rate and the pay rate on the Railwood and River Pointe mortgage bonds at December 31, 1993 and 1992, respectively. Interest income not recognized by the Company for financial reporting purposes aggregated, in millions, $5.2, $4.9 and $4.7 for 1993, 1992 and 1991, respectively.
Management of the Company believes that the fair value of the security collateralizing the debt from Holdings is greater than the net investment in such debt (cost less related deferred gain) and that there would not be a charge to operations if the Company were to foreclose on the debt. If foreclosure were required, however, the net investment in such debt would become the Company's basis of the repossessed assets. However, the Company does not currently anticipate foreclosure on Holdings' properties due to certain restrictions imposed on such assets in connection with the Company's REIT status. Accordingly, the
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Company's management presently does not believe that the net investment in the mortgage bonds and notes receivable from Holdings has been impaired nor that a reserve for any such impairment is currently required.
NOTE 9. SHARE OPTIONS AND AWARDS
The Company has an incentive Share Option Plan (the "Plan") which expires in December 1997. During 1991, the Company amended the Plan to add awards of common shares of beneficial interest, at nominal cost to the recipient, in addition to options. The Plan provides options and awards for a maximum of 500,000 common shares. The Company has an additional share option plan which grants 100 share options to every employee of the Company, excluding officers, upon completion of each five year interval of service. This plan, which expires in 2002, provides options for a maximum of 100,000 common shares. For both of the share option plans, options are granted to employees of the Company at an exercise price equal to the quoted fair market value of the common shares on the date the options are granted. All options and awards that are granted expire upon termination of employment or ten years from the date of grant.
Following is a summary of the option activity for the three years ended December 31, 1993:
During 1991, 56,000 common shares were granted as awards to certain key officers of the Company and the Management Company. Through December 31, 1993, 42,000 of these common shares had vested and were issued; the remaining 14,000 common shares will vest in 1994. Compensation expense of $.6 million, $.4 million and $.5 million was recognized in 1993, 1992 and 1991, respectively, relating to the share awards.
At December 31, 1993, 238,884 common shares were available for the future grant of options or awards and options for 123,267 shares were exercisable.
On January 3, 1994, the Company issued 62,900 restricted shares and granted 434,400 share options under a compensatory Incentive Share Plan for key officers of the Company. This plan, which expires in 2003, provides for a total of 500,000 shares, either in the form of restricted shares or options. The restricted shares generally vest over a ten year period, with potential acceleration of vesting due to appreciation in the market value of the Company's shares. The share options vest over a five year period beginning two years after the date of grant. Share options are granted at the market price at the date of grant.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 10. DIVIDEND DISTRIBUTIONS
For federal income tax purposes, the cash dividends distributed to shareholders are characterized as follows:
NOTE 11. CHANGES IN OPERATING ACCOUNTS
The effect of changes in the operating accounts on cash flows from operating activities is as follows:
During 1993, $123.0 million in convertible debentures and notes were converted into 3.9 million common shares of beneficial interest. During 1992, the Company converted $4.1 million of convertible debentures into .1 million common shares and issued .4 million common shares valued at $14.6 million to a partner for the purchase of the partner's interest in a joint venture. During 1991, the Company converted $3.6 million of convertible debentures into .1 million common shares and assumed $10.4 million of permanent debt in connection with the acquisition of certain properties.
NOTE 12. FAIR VALUE DISCLOSURE OF FINANCIAL INSTRUMENTS
The following disclosure of estimated fair value was determined by the Company, using available market information and appropriate valuation methodologies. However, considerable judgment is necessary to interpret market data and develop the related estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize upon disposition of the financial instrument. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
Cash and cash equivalents, accrued rent and accounts receivable, marketable debt securities, notes receivable from joint ventures, partnerships and tenants, interim debt and accounts payable and accrued expenses are carried at amounts which reasonably approximate their fair value.
Mortgage bonds and notes receivable from an affiliate were not fair valued because it is not practicable to reasonably assess the credit adjustment that would be applied in the marketplace for such bonds and notes receivable. However, management of the Company believes that the fair value of the security collateralizing such bonds and notes receivable is greater than the net investment in such instruments (cost less related deferred gain).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Permanent debt with carrying values of $89.0 million has fair values of $93.8 million, which were estimated based on interest rates currently available to the Company for issuance of debt with similar terms and remaining maturities.
Interest rate swap agreements are valued at an estimated unrealized net loss of $5.6 million, which represents amounts at which they could be settled, based upon estimates obtained from dealers.
The fair value estimates presented herein are based on pertinent information available to management as of December 31, 1993. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date, and current estimates of fair value may differ significantly from the amounts presented herein.
NOTE 13. PENSION PLAN
Effective January 1, 1993, the Company acquired the assets of the Management Company, including a defined benefit pension plan covering substantially all of its employees. This plan was merged with the plan of the Company, effective January 1, 1993. The benefit formula for both pre-existing plans is identical to the formula for the surviving merged plan.
The benefits are based on years of service and the employee's compensation during the last five years of service. The Company's funding policy is to make annual contributions as required by applicable regulations.
The following table sets forth the plan's funded status and amounts recognized in the Company's balance sheet at December 31, 1993.
The components of net periodic pension cost are as follows:
Assumptions used to develop periodic pension expense and the actuarial present value of projected benefit obligations:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Disclosure for the Company's pension plan for 1992 is not included since such plan was not significant prior to the merger of the Management Company.
NOTE 14. QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial data for the years ended December 31, 1993 and 1992 is as follows:
NOTE 15. PRICE RANGE OF COMMON SHARES (UNAUDITED)
The high and low sale prices per share of the Company's common shares, as reported on the New York Stock Exchange composite tape, and dividends per share paid for the periods indicated were as follows:
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Information with respect to the Company's trust managers and compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, is incorporated by reference from the Company's Proxy Statement in connection with the Annual Meeting of Shareholders to be held April 28, 1994, which Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this Form 10-K. Except for those portions of such Proxy Statement specifically incorporated by reference herein, such Proxy Statement is deemed not to be filed as part of this Report.
(b) See "Executive Officers of the Registrant" above.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
Information with respect to executive compensation is incorporated by reference from pages 11 through 14 of the Company's Proxy Statement in connection with the Annual Meeting of Shareholders to be held April 28, 1994, which Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this Form 10-K. Except for those portions of such Proxy Statement specifically incorporated by reference herein, such Proxy Statement is deemed not to be filed as part of this Report.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to security ownership of certain beneficial owners and management is incorporated by reference from pages 2 through 4 of the Company's Proxy Statement in connection with the Annual Meeting of Shareholders to be held April 28, 1994, which Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this Form 10-K. Except for those portions of such Proxy Statement specifically incorporated by reference herein, such Proxy Statement is deemed not to be filed as part of this Report.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to certain relationships and related transactions is incorporated by reference from pages 14 through 16 of the Company's Proxy Statement in connection with the Annual Meeting of Shareholders to be held April 28, 1994, which Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this Form 10-K. Except for those portions of such Proxy Statement specifically incorporated by reference herein, such Proxy Statement is deemed not to be filed as part of this Report.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules:
(2) Financial Statement Schedules:
All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is included in the consolidated financial statements and notes hereto.
(b) No reports on Form 8-K were filed during the last quarter of the period covered by this annual report.
(c) Exhibits:
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* Filed with this report.
+ Management contract or compensatory plan or arrangement.
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
WEINGARTEN REALTY INVESTORS
By: STANFORD ALEXANDER ---------------------------------- Stanford Alexander, President
Date: March 21, 1994
PURSUANT TO THE REQUIREMENT OF THE SECURITIES AND EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SCHEDULE II
WEINGARTEN REALTY INVESTORS
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS, PROMOTERS AND EMPLOYEES (OTHER THAN RELATED PARTIES) FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 (AMOUNTS IN THOUSANDS)
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SCHEDULE VIII
WEINGARTEN REALTY INVESTORS
VALUATION AND QUALIFYING ACCOUNTS DECEMBER 31, 1993, 1992 AND 1991 (AMOUNTS IN THOUSANDS)
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(1) Write-offs of accounts receivable previously reserved.
SCHEDULE X
WEINGARTEN REALTY INVESTORS
SUPPLEMENTARY INCOME STATEMENT INFORMATION FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 (AMOUNTS IN THOUSANDS)
SCHEDULE XI
WEINGARTEN REALTY INVESTORS
REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1993 (AMOUNTS IN THOUSANDS)
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Note A -- Encumbrances do not include $40,350,000 outstanding under the revolving credit agreements and $35,000,000 outstanding under the 14-year term loan payable to a group of insurance companies secured by property collateral pools including all or part of 42 shopping centers, one industrial project and five parcels of unimproved land.
SCHEDULE XI (CONTINUED)
The changes in total cost of the properties for the years ended December 31, 1993, 1992 and 1991 were as follows:
The changes in accumulated depreciation for the years ended December 31, 1993, 1992 and 1991 were as follows:
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Note B -- Transferred from net investment in direct financing leases.
SCHEDULE XII
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE DECEMBER 31, 1993 (AMOUNTS IN THOUSANDS)
(See notes on following page)
SCHEDULE XII (CONTINUED)
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Note A -- Changes in mortgage loans for the years ended December 31, 1993, 1992 and 1991 are summarized below:
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Note B -- The aggregate cost at December 31, 1993 for federal income tax purposes is $24,104.
Note C -- Principal payments are due monthly to the extent of cash flow generated by the underlying property.