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Section 1: 8-K (8-K)

Document


 
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): February 20, 2019

WEINGARTEN REALTY INVESTORS
(Exact name of registrant as specified in its charter)
Texas
1-9876
74-1464203
(State or other jurisdiction of
incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)
2600 Citadel Plaza Drive, Suite 125, 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)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
 





Item 2.02.    Results of Operations and Financial Condition.

On February 20, 2019, we issued a press release describing our results of operations for the quarter ended December 31, 2018, as well as providing supplemental financial information pertaining to our operations. The press release and supplemental financial information are attached as Exhibit 99.1 to this report.

The information, including exhibits hereto, in this Current Report on Form 8-K is being furnished and shall not be deemed "filed" with the Securities and Exchange Commission and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

Item 9.01.    Financial Statements and Exhibits.

99.1
Supplemental Financial Information at December 31, 2018 (including press release dated February 20, 2019).

2



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: February 22, 2019

 
WEINGARTEN REALTY INVESTORS
 
 
 
 
 
 
 
 
 
By:
/s/ Joe D. Shafer
 
 
 
Joe D. Shafer
 
 
 
Senior Vice President/
Chief Accounting Officer
 


3



INDEX TO EXHIBITS

99.1
Supplemental Financial Information at December 31, 2018 (including press release dated February 20, 2019).

4
(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
396846662_supplementalcover2018q4a01.jpg






396846662_wrisupplementallogo122018.jpg
 
 
 
Table of Contents
Page
Quarterly Earnings Press Release
i - xii
Company Information
1
 
 
 
Financial Summary
 
 
Condensed Consolidated Statements of Income
3
 
Condensed Consolidated Balance Sheets
4
 
Funds From Operations Attributable to Common Shareholders
5
 
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate and Net Debt to Core EBITDAre
6
 
Supplemental Income Statement Detail
7
 
Supplemental Balance Sheet Detail
8
 
Capitalization and Debt Coverage Ratios
9
 
Guidance
10
 
 
 
Investment Activity
 
 
Capital Expenditures
12
 
Development and Redevelopment Projects
13
 
Land Held for Development
14
 
Acquisition and Disposition Summary
15
 
 
 
Summary of Debt
 
 
Debt Information
17
 
Debt Information Additional Disclosure
18
 
Schedule of Maturities
19
 
Schedule of Maturities Additional Disclosure
20
 
 
 
Joint Ventures
 
 
Unconsolidated Joint Venture Financial Information at 100%
22
 
Unconsolidated Joint Venture Financial Information at Pro rata Share
23
 
Investments in Unconsolidated Real Estate Joint Ventures & Partnerships at 100%
24
 
Unconsolidated Joint Venture Mortgage Debt Information at 100%
25
 
Unconsolidated Joint Venture Mortgage Debt Information Additional Disclosure
26
 
 
 
Portfolio Summary
 
 
Tenant Diversification by Percent of Base Minimum Rent
28
 
Portfolio Operating Information
29 - 30
 
Top 40 Core-Based Statistical Area (CBSA) Ranked by Population
31
 
 
 
Property Listing
 
 
Summary Property Listing
33
 
Property Listing
34 - 42
 
Ground Lease Commitments
43
 
 
 
Other Topics of Interest
 
 
Share and Bond Repurchase Program Inception-To-Date
45
 
Revenue Classification Changes Impact
46
 
Ground Lease Summary
47
 
 
 
Corporate Profile
 
 
 
 
Weingarten Realty Investors is a real estate investment trust organized under the Texas Business Organizations Code that, through its predecessor entity, began the ownership and development of shopping centers and other commercial real estate in 1948. As of December 31, 2018, we owned or operated under long-term leases, interests in 178 properties which are located in 17 states that span the United States from coast to coast. These properties represent approximately 35.1 million square feet of which our interests in these properties aggregated approximately 22.9 million square feet of leasable area. Our properties were 94.4% leased as of December 31, 2018, and historically our portfolio occupancy rate has never been below 90%.
 
 
 
 
 
www.weingarten.com
 



396846662_wriedgarpressrelease122018.jpg
2600 Citadel Plaza Drive
P.O. Box 924133
Houston, Texas 77292-4133

NEWS RELEASE

Information: Michelle Wiggs, Phone: (713) 866-6050

WEINGARTEN REALTY
REPORTS STRONG FOURTH QUARTER OPERATIONS
AND ISSUES 2019 GUIDANCE

HOUSTON, February 20, 2019 (BUSINESS WIRE) -- Weingarten Realty (NYSE: WRI) announced today the results of its operations for the quarter ended December 31, 2018. The supplemental financial package with additional information can be found on the Company's website under the Investor Relations tab.

Fourth Quarter and Full Year Operating and Financial Highlights

Net income attributable to common shareholders (“Net Income”) was $0.46 per diluted share (hereinafter “per share”) for the quarter and $2.55 per share for the year compared to $1.30 and $2.60 per share for each respective period in 2017;

Core Funds From Operations Attributable to Common Shareholders ("Core FFO”) was $0.55 per share for the quarter and $2.28 per share for the year compared to $0.61 and $2.45 per share for each respective period in 2017;

Same Property Net Operating Income (“SPNOI”) including redevelopments increased by 3.4% over the fourth quarter of 2017 and by 2.5% over the full year 2017;

Rental rates on new leases completed during the quarter were up 37.4% and 18.7% for the full year;

Signed occupancy was unchanged from the third quarter of 2018 at 94.4%;

Dispositions totaled $241 million in the fourth quarter and $635 million for the full year;

Balance sheet leverage was reduced with Net Debt to Adjusted EBITDAre declining to 5.00 times; and,

A special dividend of $1.40 per share was paid to shareholders in December of 2018.

Financial Results

In evaluating earnings, it is necessary to understand that the Company disposed of unprecedented volumes of properties during 2017 and 2018. While these dispositions have resulted in a much higher quality portfolio of properties for the Company, the negative impact of these dispositions on 2018 earnings was significant and will also materially impact 2019. Aside from the dilutive impact of the dispositions, the operating performance of the Company’s portfolio was very strong.

Page i





The Company reported Net Income of $59.5 million or $0.46 per share for the fourth quarter of 2018, as compared to $168.0 million or $1.30 per share for the same period in 2017. For the year, Net Income was $327.6 million or $2.55 per share for 2018 compared to $335.3 million or $2.60 per share for 2017.

Funds From Operations attributable to common shareholders in accordance with the National Association of Real Estate Investment Trusts definition (“NAREIT FFO”) was $70.3 million or $0.55 per share for the fourth quarter of 2018 compared to $77.4 million or $0.60 per share for 2017. For the year, NAREIT FFO was $307.9 million or $2.40 per share for 2018 compared to $311.6 million or $2.40 per share for 2017.

Core FFO for the quarter ended December 31, 2018 was $0.55 per share or $70.2 million, as compared to $0.61 per share or $78.5 million for the same quarter of last year. Higher income driven by increased rental rates and reduced interest expense from lower levels of debt outstanding were more than offset by the impact of dispositions in 2017 and 2018. General and administrative expense was comparable to the fourth quarter of 2017 but $1.4 million higher than the third quarter of 2018. This was the result of a $0.02 per share increase in expense related to a true-up of the accrual for restricted share grants. The significant drop in the Company’s share price at year-end 2018 resulted in more shares being granted in accordance with the Company’s Long Term Incentive program, thus the increase in expense. This was offset by a decrease of $0.01 per share related to assets held in its deferred compensation plan. For the full year, Core FFO was $292.5 million or $2.28 per share for 2018 compared to $318.4 million or $2.45 per share for 2017.

Additionally, the $1.40 per share special dividend paid in December caused our operating partnership units to be antidilutive which reduced Core FFO per share in the fourth quarter by around a penny per share had those shares been considered in the dilutive calculation.

A reconciliation of Net Income to NAREIT FFO and Core FFO is included herein.

Operating Results

For the period ending December 31, 2018, the Company’s operating highlights were as follows:

 
Q4 2018
YTD 2018
Occupancy (Signed Basis):
 
 
Occupancy - Total
94.4%
 
Occupancy - Small Shop Spaces
90.7%
 
Occupancy - Same Property Portfolio
94.8%
 
 
 
 
Same Property Net Operating Income, with redevelopments
3.4%
2.5%
 
 
 
Rental Rate Growth - Total:
11.9%
8.5%
New Leases
37.4%
18.7%
Renewals
5.3%
6.1%
 
 
 
Leasing Transactions:
 
 
Number of New Leases
65
278
New Leases - Annualized Revenue (in millions)
$5.8
$19.8
Number of Renewals
116
572
Renewals - Annualized Revenue (in millions)
$9.3
$46.5


Page ii




A reconciliation of Net Income to SPNOI is included herein.

“Operations remained strong this quarter, a reflection of our significantly improved portfolio of properties. Our increase in rental rates on new leases of 37.4% for the quarter and 18.7% for the full year is a reflection of this improvement. We have done a great job in leasing three of our four Toys R Us spaces,” said Johnny Hendrix, Executive Vice President and Chief Operating Officer.

Portfolio Activity

During the quarter, the Company sold seven properties and two land parcels for $241 million. This included two properties in Nevada, two in Arizona and one each in Colorado, Florida and Texas. For all of 2018, WRI sold $635 million of assets with the disposition of 23 shopping centers, an office building and other real estate.

As for acquisitions in 2018, the Company purchased one land parcel which is adjacent to existing shopping centers for $1.3 million. No acquisitions have been closed to-date in 2019.

The Company invested $139 million in new developments and redevelopments in 2018 and expects to spend around $200 million in 2019, with the majority of the investment in its two projects in the Washington D.C. area and its 30-story residential tower at its River Oaks Shopping Center in Houston.

“While the recent disposition volume reduces Funds From Operations in the short-term, Weingarten remains focused on maximizing long-term value to our shareholders. Our dispositions improve the overall quality of our portfolio by reducing exposure to tertiary markets and power centers, and provide capital for future growth including our redevelopment and new development programs. We expect our disposition volumes to decrease significantly in 2019, however we will continue to monitor the market and adjust our strategy appropriately.” said Drew Alexander, Chairman, President and Chief Executive Officer.

Balance Sheet

Proceeds from the Company’s dispositions were used to strengthen its balance sheet. Net Debt to Core EBITDAre was a strong 5.00 times and Debt to Total Market Capitalization was 35.8% at year end.

“As we remain dedicated to maintaining a strong capital structure supported by low leverage, the amount of capital we allocate to various opportunities, including repurchasing our common shares, will be carefully considered. With one of the strongest balance sheets in our sector, we are well positioned to pursue growth opportunities as they arise,” said Steve Richter, Executive Vice President and Chief Financial Officer.

2019 Guidance

The Company’s guidance for 2019 is as follows:


Page iii




 
2019 Guidance
Net Income (per share)
$1.77 - $1.89
NAREIT FFO (per share)
$2.09 - $2.17
Core FFO (per share)
$2.09 - $2.17
Acquisitions
$50 - $150 million
Re / New Development
$175 - $225 million
Dispositions
$250 - $350 million
Same Property NOI with redevelopments
2.00% - 3.00%

Other issues which will impact 2019 results include:

This level of dispositions will probably result in the payment of a special dividend in 2019, albeit considerably less than 2018;

With the implementation of the new leasing standard, the Company will not be capitalizing any indirect leasing and legal costs; however, it will continue to capitalize some of the internal and external leasing commissions going forward. For 2019, this will increase general and administrative expense by between $9.0 and $10.0 million or $0.07 to $0.08 per share; and,

Preleasing activities and the phased stabilization of both projects in Washington D.C. will result in costs that will be expensed prior to revenue coming on-line. These costs will total approximately $0.01 per share in 2019.

A rollforward detailing the components of the change in 2018 Core FFO per share to 2019 Core FFO per share guidance is included on page 10 of the Company’s Supplemental.

Dividends

The Board of Trust Managers declared a quarterly cash dividend of $0.395 per common share payable on March 15, 2019 to shareholders of record on March 8, 2019. The Company also paid a special dividend of $1.40 per common share in December 2018.

New Officer Elections

The Board of Trust Managers elected Stanford Alexander Chairman Emeritus. Additionally, Andrew M. “Drew” Alexander was elected Chairman of the Board and will continue as President and Chief Executive Officer. “As the founder of Weingarten Realty, I am very proud of the outstanding Company we created and the wonderful things we have accomplished. Looking ahead, I will continue to provide advice and consultation to my associates and look forward to the future,” said Stanford Alexander, Chairman Emeritus.

Conference Call Information

The Company also announced that it will host a live webcast of its quarterly conference call on February 21, 2019 at 10:00 a.m. Central Time. The live webcast can be accessed via the Company’s website at www.weingarten.com. Alternatively, if you are not able to access the call on the web, you can listen live by phone by calling (888) 771-4371 (conference ID # 47807259). A replay will be available through the Company’s website starting approximately two hours following the live call.


Page iv




About Weingarten Realty Investors

Weingarten Realty Investors (NYSE: WRI) is a shopping center owner, manager and developer.  At December 31, 2018, the Company owned or operated under long-term leases, either directly or through its interest in real estate joint ventures or partnerships, a total of 178 properties which are located in 17 states spanning the country from coast to coast. These properties represent approximately 35.1 million square feet of which our interests in these properties aggregated approximately 22.9 million square feet of leasable area. To learn more about the Company’s operations and growth strategies, please visit www.weingarten.com.

Forward-Looking Statements

Statements included herein that state the Company’s or Management’s intentions, hopes, beliefs, expectations or predictions of the future are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 which by their nature, involve known and unknown risks and uncertainties. The Company’s actual results, performance or achievements could differ materially from those expressed or implied by such statements. Reference is made to the Company’s regulatory filings with the Securities and Exchange Commission for information or factors that may impact the Company’s performance.

Projections involve numerous assumptions such as rental income (including assumptions on percentage rent), interest rates, tenant defaults, occupancy rates, volume and pricing of properties held for disposition, volume and pricing of acquisitions, expenses (including salaries and employee costs), insurance costs and numerous other factors. Not all of these factors are determinable at this time and actual results may vary from the projected results, and may be above or below the ranges indicated. The above ranges represents management’s estimate of results based upon these assumptions as of the date of this press release. Accordingly, there is no assurance that our projections will be realized.



Page v




Weingarten Realty Investors
(in thousands, except per share amounts)
Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
 
 
 
2018
 
 2017 (1)
 
2018
 
 2017 (1)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
(Unaudited)
Revenues:
 
 
 
 
 
 
 
Rentals, net
$
123,992

 
$
135,798

 
$
516,502

 
$
560,643

Other
3,827

 
3,569

 
14,645

 
12,520


Total Revenues
127,819

 
139,367

 
531,147

 
573,163

Operating Expenses:
 
 
 
 
 
 
 
Depreciation and amortization
35,280

 
40,986

 
161,838

 
167,101

Operating expense
20,625

 
25,366

 
90,554

 
109,310

Real estate taxes, net
16,562

 
17,853

 
69,268

 
75,636

Impairment loss
7,722

 
245

 
10,120

 
15,257

General and administrative expense
7,325

 
7,800

 
25,040

 
28,052


Total Operating Expenses
87,514

 
92,250

 
356,820

 
395,356

Other Income (Expense):
 
 
 
 
 
 
 
Interest expense, net
(15,663
)
 
(18,921
)
 
(63,348
)
 
(80,326
)
Interest and other income (expense)
(1,928
)
 
3,322

 
2,807

 
7,532

Gain on sale of property
34,788

 
132,045

 
207,865

 
218,611

Total Other Income
17,197

 
116,446

 
147,324

 
145,817

Income Before Income Taxes and Equity in Earnings of Real Estate Joint Ventures and Partnerships
57,502

 
163,563

 
321,651

 
323,624

(Provision) Benefit for Income Taxes
(10
)
 
(2,018
)
 
(1,378
)
 
17

Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
5,737

 
9,108

 
25,070

 
27,074

Net Income
63,229

 
170,653

 
345,343

 
350,715

Less:
Net Income Attributable to Noncontrolling Interests
(3,722
)
 
(2,686
)
 
(17,742
)
 
(15,441
)
Net Income Attributable to Common Shareholders -- Basic
$
59,507

 
$
167,967

 
$
327,601

 
$
335,274

Net Income Attributable to Common Shareholders -- Diluted
$
59,507

 
$
169,484

 
$
327,601

 
$
338,358

Earnings Per Common Share -- Basic
$
.47

 
$
1.31

 
$
2.57

 
$
2.62

Earnings Per Common Share -- Diluted
$
.46

 
$
1.30

 
$
2.55

 
$
2.60

______________
(1) Reclassification of prior year's amounts were made to conform to current year presentation.



Page vi




Weingarten Realty Investors
(in thousands)
Financial Statements
 
 
 
 
 
 
 
 
 
 
 
December 31,
2018
 
December 31,
2017
 
 
 
 
(Unaudited)
 
(Audited)
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
ASSETS
 
 
 
Property
$
4,105,068

 
$
4,498,859

Accumulated Depreciation
(1,108,188
)
 
(1,166,126
)
Property Held for Sale, net

 
54,792

Investment in Real Estate Joint Ventures and Partnerships, net
353,828

 
317,763

Unamortized Lease Costs, net
142,014

 
181,047

Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net
97,924

 
104,357

Cash and Cash Equivalents
65,865

 
13,219

Restricted Deposits and Mortgage Escrows
10,272

 
8,115

Other, net
160,178

 
184,613

 
             Total Assets
$
3,826,961

 
$
4,196,639

 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Debt, net
$
1,794,684

 
$
2,081,152

Accounts Payable and Accrued Expenses
113,175

 
116,463

Other, net
168,403

 
189,182

 
Total Liabilities
2,076,262

 
2,386,797

 
 
 
 
 
 
 
Commitments and Contingencies

 

 
 
 
 
EQUITY
 
 
 
Common Shares of Beneficial Interest
3,893

 
3,897

Additional Paid-In Capital
1,766,993

 
1,772,066

Net Income Less Than Accumulated Dividends
(186,431
)
 
(137,065
)
Accumulated Other Comprehensive Loss
(10,549
)
 
(6,170
)
 
Shareholders' Equity
1,573,906

 
1,632,728

Noncontrolling Interests
176,793

 
177,114

 
             Total Liabilities and Equity
$
3,826,961

 
$
4,196,639


Page vii




Non-GAAP Financial Measures

Certain aspects of our key performance indicators are considered non-GAAP financial measures. Management uses these measures along with our Generally Accepted Accounting Principles ("GAAP") financial statements in order to evaluate our operating results. Management believes these additional measures provide users of our financial information additional comparable indicators of our industry, as well as, our performance.

Funds from Operations Attributable to Common Shareholders
The National Association of Real Estate Investment Trusts ("NAREIT") defines NAREIT FFO as net income (loss) attributable to common shareholders computed in accordance with GAAP, excluding extraordinary items and gains or losses from sales of operating real estate assets and interests in real estate equity investments and their applicable taxes, plus depreciation and amortization of operating properties and impairment of depreciable real estate and in substance real estate equity investments, including our share of unconsolidated real estate joint ventures and partnerships. The Company calculates NAREIT FFO in a manner consistent with the NAREIT definition.

Management believes NAREIT FFO is a widely recognized measure of REIT operating performance which provides our shareholders with a relevant basis for comparison among other REITs. Management uses NAREIT FFO as a supplemental internal measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income by itself as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, management believes that the presentation of operating results for real estate companies that uses historical cost accounting is insufficient by itself. There can be no assurance that NAREIT FFO presented by the Company is comparable to similarly titled measures of other REITs.

The Company also presents Core FFO as an additional supplemental measure as it is more reflective of the core operating performance of our portfolio of properties. Core FFO is defined as NAREIT FFO excluding charges and gains related to non-cash, non-operating and other transactions or events that hinder the comparability of operating results. Specific examples of items excluded from Core FFO include, but are not limited to, gains or losses associated with the extinguishment of debt or other liabilities, impairments of land, transactional costs associated with acquisition and development activities, certain deferred tax provisions/benefits, redemption costs of preferred shares and gains on the disposal of non-real estate assets. NAREIT FFO and Core FFO should not be considered as alternatives to net income or other measurements under GAAP as indicators of operating performance or to cash flows from operating, investing or financing activities as measures of liquidity. NAREIT FFO and Core FFO do not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.


Page viii




NAREIT FFO and Core FFO is calculated as follows (in thousands):
 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2018
 
2017
 
2018
 
2017
 
(Unaudited)
 
(Unaudited)
Net income attributable to common shareholders
$
59,507

 
$
167,967

 
$
327,601

 
$
335,274

Depreciation and amortization of real estate
35,020

 
40,746

 
160,679

 
166,125

Depreciation and amortization of real estate of unconsolidated real estate joint ventures and partnerships
2,974

 
3,380

 
12,454

 
14,020

Impairment of operating properties and real estate equity investments
7,571

 
240

 
9,969

 
12,247

(Gain) on sale of property and interests in real estate equity investments
(34,650
)
 
(131,393
)
 
(206,930
)
 
(217,659
)
(Gain) on dispositions of unconsolidated real estate joint ventures and partnerships
(4
)
 
(4,209
)
 
(6,300
)
 
(6,187
)
Provision (benefit) for income taxes (1)
444

 
1,232

 
2,223

 
(711
)
Noncontrolling interests and other (2)
(610
)
 
(547
)
 
8,238

 
5,408

NAREIT FFO – basic
70,252

 
77,416

 
307,934

 
308,517

Income attributable to operating partnership units

 

 

 
3,084

NAREIT FFO – diluted
70,252

 
77,416

 
307,934

 
311,601

Adjustments to Core FFO:
 
 
 
 
 
 
 
Other impairment loss
134

 
2

 
134

 
3,031

Provision (benefit) for income taxes (3)
6

 
223

 
(1,488
)
 
(729
)
(Gain) on extinguishment of debt including related swap activity
(41
)
 

 
(3,131
)
 

Lease terminations

 

 
(10,023
)
 

Severance costs

 
1,378

 

 
1,378

Storm damage costs

 
1,018

 

 
1,822

Recovery of Pre-development costs

 
(949
)
 

 
(949
)
Other
(136
)
 
(612
)
 
(911
)
 
2,292

Core FFO – diluted
$
70,215

 
$
78,476

 
$
292,515

 
$
318,446

 
 
 
 
 
 
 
 
FFO weighted average shares outstanding – basic
127,653

 
127,816

 
127,651

 
127,755

Effect of dilutive securities:
 
 
 
 
 
 
 
Share options and awards
730

 
848

 
790

 
870

Operating partnership units

 

 

 
1,446

FFO weighted average shares outstanding – diluted
128,383

 
128,664

 
128,441

 
130,071

 
 
 
 
 
 
 
 
NAREIT FFO per common share – basic
$
.55

 
$
.61

 
$
2.41

 
$
2.41

 
 
 
 
 
 
 
 
NAREIT FFO per common share – diluted
$
.55

 
$
.60

 
$
2.40

 
$
2.40

 
 
 
 
 
 
 
 
Core FFO per common share – diluted
$
.55

 
$
.61

 
$
2.28

 
$
2.45

______________
(1) The applicable taxes related to gains and impairments of operating properties.
(2) Related to gains, impairments and depreciation on operating properties and unconsolidated real estate joint ventures, where applicable.
(3) The applicable taxes related to gains and impairments of non-operating assets.

Page ix




Same Property Net Operating Income
Management considers SPNOI an important additional financial measure because it reflects only those income and expense items that are incurred at the property level and when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates and operating costs. The Company calculates this most useful measurement by determining our proportional share of SPNOI from all owned properties, including the Company’s share of SPNOI from unconsolidated joint ventures and partnerships, which cannot be readily determined under GAAP measurements and presentation. Although SPNOI (see page 1 of the supplemental disclosure regarding this presentation and limitations thereof) is a widely used measure among REITs, there can be no assurance that SPNOI presented by the Company is comparable to similarly titled measures of other REITs. Additionally, the Company does not control these unconsolidated joint ventures and partnerships, and the assets, liabilities, revenues or expenses of these joint ventures and partnerships, as presented, do not represent its legal claim to such items.
Properties are included in the SPNOI calculation if they are owned and operated for the entirety of the most recent two fiscal year periods, except for properties for which significant redevelopment or expansion occurred during either of the periods presented, and properties that have been sold. While there is judgment surrounding changes in designations, management moves new development and redevelopment properties once they have stabilized, which is typically upon attainment of 90% occupancy. A rollforward of the properties included in the Company’s same property designation is as follows:


 
Three Months Ended
December 31, 2018
 
Twelve Months Ended
December 31, 2018
Beginning of the period
176

 
183

Properties added:
 
 
 
Acquisitions

 
6

New Developments

 
1

Redevelopments

 
4

Properties removed:
 
 
 
Dispositions
(5
)
 
(22
)
Other

 
(1
)
End of the period
171

 
171



Page x




We calculate SPNOI using net income attributable to common shareholders excluding net income attributable to noncontrolling interests, other income (expense), income taxes and equity in earnings of real estate joint ventures and partnerships. Additionally to reconcile to SPNOI, we exclude the effects of property management fees, certain non-cash revenues and expenses such as straight-line rental revenue and the related reversal of such amounts upon early lease termination, depreciation and amortization, impairment losses, general and administrative expenses and other items such as lease cancellation income, environmental abatement costs, demolition expenses and lease termination fees. Consistent with the capital treatment of such costs under GAAP, tenant improvements, leasing commissions and other direct leasing costs are excluded from SPNOI. A reconciliation of net income attributable to common shareholders to SPNOI is as follows (in thousands):
 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2018
 
2017
 
2018
 
2017
 
(Unaudited)
 
(Unaudited)
Net income attributable to common shareholders
$
59,507

 
$
167,967

 
$
327,601

 
$
335,274

Add:
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
3,722

 
2,686

 
17,742

 
15,441

Provision (benefit) for income taxes
10

 
2,018

 
1,378

 
(17
)
Interest expense, net
15,663

 
18,921

 
63,348

 
80,326

Property management fees
685

 
649

 
2,904

 
2,902

Depreciation and amortization
35,280

 
40,986

 
161,838

 
167,101

Impairment loss
7,722

 
245

 
10,120

 
15,257

General and administrative
7,325

 
7,800

 
25,040

 
28,052

Other (1)
84

 
(798
)
 
51

 
3,586

Less:
 
 
 
 
 
 
 
Gain on sale of property
(34,788
)
 
(132,045
)
 
(207,865
)
 
(218,611
)
Equity in earnings of real estate joint ventures and partnership interests, net
(5,737
)
 
(9,108
)
 
(25,070
)
 
(27,074
)
Interest and other income/expense
1,928

 
(3,322
)
 
(2,807
)
 
(7,532
)
Revenue adjustments (2)
(3,022
)
 
(4,308
)
 
(25,007
)
 
(16,877
)
Adjusted income
88,379

 
91,691

 
349,273

 
377,828

Less: Adjusted income related to consolidated entities not defined as same property and noncontrolling interests
(6,499
)
 
(12,319
)
 
(29,114
)
 
(66,366
)
Add: Pro rata share of unconsolidated entities defined as same property
8,861

 
8,366

 
34,285

 
34,203

Same Property Net Operating Income
90,741

 
87,738

 
354,444

 
345,665

Less: Redevelopment Net Operating Income
(8,705
)
 
(7,691
)
 
(32,939
)
 
(30,725
)
Same Property Net Operating Income excluding Redevelopments
$
82,036

 
$
80,047

 
$
321,505

 
$
314,940

___________________
(1)
Other includes items such as environmental abatement costs, demolition expenses and lease termination fees.
(2)
Revenue adjustments consist primarily of straight-line rentals, lease cancellation income and fee income primarily from real estate joint ventures and partnerships.

Page xi




Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate
NAREIT defines EBITDAre as net income computed in accordance with GAAP, plus interest expense, income tax expense (benefit), depreciation and amortization and impairment of depreciable real estate and in substance real estate equity investments; plus or minus gains or losses from sales of operating real estate assets and interests in real estate equity investments; and adjustments to reflect our share of unconsolidated real estate joint ventures and partnerships for these items. The Company calculates EBITDAre in a manner consistent with the NAREIT definition.
As mentioned above, NAREIT FFO is a widely recognized measure of REIT operating performance which provides our shareholders with a relevant basis for comparing earnings performance among other REITs based upon the unique capital structure of each REIT. However as a basis of comparability that is independent of a company's capital structure, management believes that since EBITDA is a widely known and understood measure of performance, EBITDAre will represent an additional supplemental non-GAAP performance measure that will provide investors with a relevant basis for comparing REITs. There can be no assurance that EBITDAre as presented by the Company is comparable to similarly titled measures of other REITs.
The Company also presents Core EBITDAre as an additional supplemental measure as it is more reflective of the core operating performance of our portfolio of properties. Core EBITDAre is defined as NAREIT EBITDAre excluding charges and gains related to non-cash and non-operating transactions and other events that hinder the comparability of operating results. Specific examples of items excluded from Core EBITDAre include, but are not limited to, gains or losses associated with the extinguishment of debt or other liabilities, and transactional costs associated with development activities. EBITDAre and Core EBITDAre should not be considered as alternatives to net income or other measurements under GAAP as indicators of operating performance or to cash flows from operating, investing or financing activities as measures of liquidity. EBITDAre and Core EBITDAre do not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.
EBITDAre and Core EBITDAre is calculated as follows (in thousands):
 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2018
 
2017
 
2018
 
2017
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre):
 
 
 
 
 
 
 
Net income
$
63,229

 
$
170,653

 
$
345,343

 
$
350,715

Interest expense, net (1)
15,663

 
18,921

 
63,348

 
80,326

Provision (benefit) for income taxes
10

 
2,018

 
1,378

 
(17
)
Depreciation and amortization of real estate
35,280

 
40,986

 
161,838

 
167,101

Impairment loss on operating properties and real estate equity investments
7,722

 
245

 
10,120

 
15,257

Gain on sale of property (2)
(34,788
)
 
(132,045
)
 
(207,865
)
 
(218,611
)
EBITDAre adjustments of unconsolidated real estate joint ventures and partnerships, net (3)
3,874

 
397

 
11,271

 
12,822

Total EBITDAre
90,990

 
101,175

 
385,433

 
407,593

Adjustments for Core EBITDAre:
 
 
 
 
 
 
 
Storm damage costs

 
1,018

 

 
1,822

Recovery of pre-development costs

 
(949
)
 

 
(949
)
Severance costs

 
1,378

 

 
1,378

Lease terminations

 

 
(10,023
)
 

Other
(50
)
 
4

 
(47
)
 
3,158

Total Core EBITDAre
$
90,940

 
$
102,626

 
$
375,363

 
$
413,002

(1) Includes a $3.8 million gain on extinguishment of debt including related swap activity for the twelve months ended December 31, 2018.
(2) Includes a $.1 million and $.9 million gain on sale of non-operating assets for the three and twelve months ended December 31, 2018, respectively. Also includes a $.6 and $.8 million gain on sale of non-operating assets for the three and twelve months ended December 31, 2017, respectively.
(3) Includes a $(.7) million loss on extinguishment of debt for the twelve months ended December 31, 2018.

Page xii



Weingarten Realty Investors
Company Information



Corporate Office
 
 
 
2600 Citadel Plaza Drive
 
P. O. Box 924133
 
Houston, TX 77292-4133
 
713-866-6000
 
www.weingarten.com
 
 
 
Stock Listings
 
 
 
New York Stock Exchange:
 
Common Shares
WRI
 
 

Forward-Looking Statements
This supplement, together with other statements and information publicly disseminated by us, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. These forward-looking statements relate to the company’s intentions, beliefs, expectations or projections of the future. It is important to note that the company’s actual results could differ materially from those projected in such forward-looking statements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: (i) disruptions in financial markets, (ii) general economic and local real estate conditions, (iii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or general downturn in their business, (iv) financing risks, such as the inability to obtain equity, debt, or other sources of financing on favorable terms and changes in LIBOR availability, (v) changes in governmental laws and regulations, (vi) the level and volatility of interest rates, (vii) the availability of suitable acquisition opportunities, (viii) the ability to dispose of properties, (ix) changes in expected development activity, (x) increases in operating costs, (xi) tax matters, including the effect of changes in the tax laws and the failure to qualify as a real estate investment trust, and (xii) investments through real estate joint ventures and partnerships, which involve risks not present in investments in which we are the sole investor. Accordingly, there is no assurance that our expectations will be realized.

Pro rata Financial Information
Included herein is certain financial information presented on a pro rata share basis as we believe this information assists users of our financial information in understanding our proportionate economic interest in the operating results of our portfolio of properties. Such amounts include WRI’s proportional share of each financial line item or operational metric for both our consolidated and unconsolidated joint ventures and partnerships. Multiplying a financial statement line item or operational metric of an investee and adding it to WRI’s totals may not accurately depict the legal and economic implications of holding a non-controlling interest in the investee, nor does WRI control any of the investees presented under the equity method of accounting. Pro rata financial information is not, and is not intended to be, a presentation in accordance with generally accepted accounting principles.





Page 1













Financial Summary




Weingarten Realty Investors
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)

 
Three Months Ended
December 31,
 
Twelve Months Ended December 31,
 
2018
 
2017(1)
 
2018
 
2017(1)
 
2016(1)
 
2015(1)
 
2014(1)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Rentals, net
$
123,992

 
$
135,798

 
$
516,502

 
$
560,643

 
$
537,265

 
$
502,464

 
$
503,128

Other
3,827

 
3,569

 
14,645

 
12,520

 
12,290

 
10,380

 
11,278

Total Revenues
127,819

 
139,367

 
531,147

 
573,163

 
549,555

 
512,844

 
514,406

Operating Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
35,280

 
40,986

 
161,838

 
167,101

 
162,535

 
145,940

 
150,356

Operating
20,625

 
25,366

 
90,554

 
109,310

 
98,855

 
94,244

 
95,318

Real estate taxes, net
16,562

 
17,853

 
69,268

 
75,636

 
66,358

 
60,289

 
60,768

Impairment loss
7,722

 
245

 
10,120

 
15,257

 
98

 
153

 
1,024

General and administrative
7,325

 
7,800

 
25,040

 
28,052

 
26,607

 
27,367

 
25,676

Total Operating Expenses
87,514

 
92,250

 
356,820

 
395,356

 
354,453

 
327,993

 
333,142

Other Income (Expense):


 


 


 


 


 


 


Interest expense, net
(15,663
)
 
(18,921
)
 
(63,348
)
 
(80,326
)
 
(83,003
)
 
(87,783
)
 
(94,725
)
Interest and other income (expense)
(1,928
)
 
3,322

 
2,807

 
7,532

 
1,910

 
4,406

 
4,530

Gain on sale of property
34,788

 
132,045

 
207,865

 
218,611

 
100,714

 
59,621

 
146,290

Gain on sale and acquisition of real estate joint venture and partnership interests

 

 

 

 
48,322

 
879

 
1,718

Total Other Income (Expense)
17,197

 
116,446

 
147,324

 
145,817

 
67,943

 
(22,877
)
 
57,813

Income Before Income Taxes and Equity in Earnings of Real Estate Joint Ventures and Partnerships
57,502

 
163,563

 
321,651

 
323,624

 
263,045

 
161,974

 
239,077

(Provision) Benefit for Income Taxes
(10
)
 
(2,018
)
 
(1,378
)
 
17

 
(6,856
)
 
(52
)
 
1,261

Equity in Earnings of Real Estate Joint Ventures and Partnerships, net (2)
5,737

 
9,108

 
25,070

 
27,074

 
20,642

 
19,300

 
22,317

Income from Continuing Operations
63,229

 
170,653

 
345,343

 
350,715

 
276,831

 
181,222

 
262,655

Operating Income from Discontinued Operations

 

 

 

 

 

 
342

Gain on Sale of Property from Discontinued Operations

 

 

 

 

 

 
44,582

Income from Discontinued Operations

 

 

 

 

 

 
44,924

Net Income
63,229

 
170,653

 
345,343

 
350,715

 
276,831

 
181,222

 
307,579

Less: Net Income Attributable to Noncontrolling Interests
(3,722
)
 
(2,686
)
 
(17,742
)
 
(15,441
)
 
(37,898
)
 
(6,870
)
 
(19,571
)
Net Income Adjusted for Noncontrolling Interests
59,507

 
167,967

 
327,601

 
335,274

 
238,933

 
174,352

 
288,008

Dividends on Preferred Shares

 

 

 

 

 
(3,830
)
 
(10,840
)
Redemption Costs of Preferred Shares

 

 

 

 

 
(9,687
)
 

Net Income Attributable to Common Shareholders
$
59,507

 
$
167,967

 
$
327,601

 
$
335,274

 
$
238,933

 
$
160,835

 
$
277,168

Earnings Per Common Share - Basic
$
0.47

 
$
1.31

 
$
2.57

 
$
2.62

 
$
1.90

 
$
1.31

 
$
2.28

Earnings Per Common Share - Diluted
$
0.46

 
$
1.30

 
$
2.55

 
$
2.60

 
$
1.87

 
$
1.29

 
$
2.25

(1) Reclassification of prior year's amounts were made to conform to the current year presentation.
(2) See page 23 for the Company’s pro rata share of the operating results of its unconsolidated real estate joint ventures and partnerships.

Page 3



Weingarten Realty Investors
Condensed Consolidated Balance Sheets
(in thousands, except per share amounts)

 
December 31,
 
2018
 
2017
 
 
 
 
ASSETS
 
 
 
Property
$
4,105,068

 
$
4,498,859

Accumulated Depreciation
(1,108,188
)
 
(1,166,126
)
Property Held for Sale, net

 
54,792

Property, net
2,996,880

 
3,387,525

 
 
 
 
Investment in Real Estate Joint Ventures and Partnerships, net (a)
353,828

 
317,763

Total
3,350,708

 
3,705,288

 
 
 
 
Unamortized Lease Costs, net
142,014

 
181,047

Accrued Rent, Accrued Contract Receivables and Accounts Receivable (net of
  allowance for doubtful accounts of $6,855 in 2018 and $7,516 in 2017)
97,924

 
104,357

Cash and Cash Equivalents
65,865

 
13,219

Restricted Deposits and Mortgage Escrows
10,272

 
8,115

Other, net
160,178

 
184,613

Total Assets
$
3,826,961

 
$
4,196,639

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Debt, net
$
1,794,684

 
$
2,081,152

Accounts Payable and Accrued Expenses
113,175

 
116,463

Other, net
168,403

 
189,182

Total Liabilities
2,076,262

 
2,386,797

 
 
 
 
Commitments and Contingencies

 

 
 
 
 
Equity:
 
 
 
Shareholders' Equity:
 
 
 
Common Shares of Beneficial Interest - par value, $.03 per share;
 shares authorized: 275,000; shares issued and outstanding:
 128,333 in 2018 and 128,447 in 2017
3,893

 
3,897

Additional Paid-In Capital
1,766,993

 
1,772,066

Net Income Less Than Accumulated Dividends
(186,431
)
 
(137,065
)
Accumulated Other Comprehensive Loss
(10,549
)
 
(6,170
)
Total Shareholders' Equity
1,573,906

 
1,632,728

Noncontrolling Interests
176,793

 
177,114

Total Equity
1,750,699

 
1,809,842

Total Liabilities and Equity
$
3,826,961

 
$
4,196,639

(a)
This represents the Company’s investment of its unconsolidated real estate joint ventures and partnerships. See page 23 for additional information.


Page 4



Weingarten Realty Investors
Funds From Operations Attributable to Common Shareholders
(in thousands, except per share amounts)
 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2018
 
2017
 
2018
 
2017
Funds From Operations Attributable to Common Shareholders (NAREIT FFO)
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Net income attributable to common shareholders
$
59,507

 
$
167,967

 
$
327,601

 
$
335,274

Depreciation and amortization of real estate
35,020

 
40,746

 
160,679

 
166,125

Depreciation and amortization of real estate of unconsolidated real estate
 joint ventures and partnerships
2,974

 
3,380

 
12,454

 
14,020

Impairment of operating properties and real estate equity investments
7,571

 
240

 
9,969

 
12,247

(Gain) on sale of property and interests in real estate equity investments
(34,650
)
 
(131,393
)
 
(206,930
)
 
(217,659
)
(Gain) on dispositions of unconsolidated real estate
 joint ventures and partnerships
(4
)
 
(4,209
)
 
(6,300
)
 
(6,187
)
Provision (benefit) for income taxes (1)
444

 
1,232

 
2,223

 
(711
)
Noncontrolling interests and other (2)
(610
)
 
(547
)
 
8,238

 
5,408

NAREIT FFO - Basic
70,252

 
77,416

 
307,934

 
308,517

Income attributable to operating partnership units

 

 

 
3,084

NAREIT FFO - Diluted
70,252

 
77,416

 
307,934

 
311,601

Adjustments for Core FFO:
 
 
 
 
 
 
 
Other impairment loss
134

 
2

 
134

 
3,031

Provision (benefit) for income taxes (3)
6

 
223

 
(1,488
)
 
(729
)
(Gain) on extinguishment of debt including related swap activity
(41
)
 

 
(3,131
)
 

Lease terminations

 

 
(10,023
)
 

Severance costs

 
1,378

 

 
1,378

Storm damage costs

 
1,018

 

 
1,822

Recovery of pre-development costs

 
(949
)
 

 
(949
)
Other
(136
)
 
(612
)
 
(911
)
 
2,292

Core FFO - Diluted
$
70,215

 
$
78,476

 
$
292,515

 
$
318,446

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
FFO weighted average number of common shares outstanding - Basic
127,653

 
127,816

 
127,651

 
127,755

Effect of dilutive securities:
 
 
 
 
 
 
 
Share options and awards
730

 
848

 
790

 
870

Operating partnership units

 

 

 
1,446

FFO weighted average number of common shares outstanding - Diluted
128,383

 
128,664

 
128,441

 
130,071

 
 
 
 
 
 
 
 
NAREIT FFO Per Common Share - Basic
$
0.55

 
$
0.61

 
$
2.41

 
$
2.41

 
 
 
 
 
 
 
 
NAREIT FFO Per Common Share - Diluted
$
0.55

 
$
0.60

 
$
2.40

 
$
2.40

Adjustments for Core FFO per common share:
 
 
 
 
 
 
 
Other impairment loss

 

 

 
0.02

Provision (benefit) for income taxes

 

 
(0.01
)
 

(Gain) on extinguishment of debt including related swap activity

 

 
(0.02
)
 

Lease terminations

 

 
(0.08
)
 

Severance costs

 
0.01

 

 
0.01

Storm damage costs

 
0.01

 

 
0.01

Recovery of pre-development costs

 
(0.01
)
 

 
(0.01
)
Other

 

 
(0.01
)
 
0.02

Core FFO Per Common Share - Diluted
$
0.55

 
$
0.61

 
$
2.28

 
$
2.45

 
 
 
 
 
 
 
 

(1) The applicable taxes related to gains and impairments of operating properties.
(2) Related to gains, impairments and depreciation on operating properties and unconsolidated real estate joint ventures, where applicable.
(3) The applicable taxes related to gains and impairments of non-operating assets.

Page 5



Weingarten Realty Investors
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate and Net Debt to Core EBITDAre
(in thousands)
 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2018
 
2017
 
2018
 
2017
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre):
 
 
 
 
 
 
 
Net income
$
63,229

 
$
170,653

 
$
345,343

 
$
350,715

Interest expense, net (1)
15,663

 
18,921

 
63,348

 
80,326

Provision (benefit) for income taxes
10

 
2,018

 
1,378

 
(17
)
Depreciation and amortization of real estate
35,280

 
40,986

 
161,838

 
167,101

Impairment loss on operating properties and real estate equity investments
7,722

 
245

 
10,120

 
15,257

Gain on sale of property (2)
(34,788
)
 
(132,045
)
 
(207,865
)
 
(218,611
)
EBITDAre adjustments of unconsolidated real estate joint ventures and partnerships, net (3)
3,874

 
397

 
11,271

 
12,822

Total EBITDAre
90,990

 
101,175

 
385,433

 
407,593

Adjustments for Core EBITDAre:
 
 
 
 
 
 
 
Storm damage costs

 
1,018

 

 
1,822

Recovery of pre-development costs

 
(949
)
 

 
(949
)
Severance costs

 
1,378

 

 
1,378

Lease terminations

 

 
(10,023
)
 

Other
(50
)
 
4

 
(47
)
 
3,158

Total Core EBITDAre
$
90,940

 
$
102,626

 
$
375,363

 
$
413,002

 
 
 
 
 
 
 
 
Net Debt to Core EBITDAre:
 
 
 
 
 
 
 
Debt
$
1,794,684

 
$
2,081,152

 
 
 
 
Less: Cash and cash equivalents
(65,865
)
 
(13,219
)
 
 
 
 
Add: Proportional share of net debt of unconsolidated real estate joint ventures and partnerships
89,199

 
108,024

 
 
 
 
Total Net Debt
$
1,818,018

 
$
2,175,957

 
 
 
 
 
 
 
 
 
 
 
 
Annualized Core EBITDAre
$
363,760

 
$
410,504

 
 
 
 
 
 
 
 
 
 
 
 
Net Debt to Core EBITDAre
5.00

 
5.30

 
 
 
 
 
 
 
 
 
 
 
 

(1) Includes a $3.8 million gain on extinguishment of debt including related swap activity for the twelve months ended December 31, 2018.
(2) Includes a $.1 million and $.9 million gain on sale of non-operating assets for the three and twelve months ended December 31, 2018, respectively. Also includes a $.6 million and $.8 million gain on sale of non-operating assets for the three and twelve months ended December 31, 2017, respectively.
(3) Includes a $(.7) million loss on extinguishment of debt for the twelve months ended December 31, 2018.


Page 6



Weingarten Realty Investors
Supplemental Income Statement Detail
(in thousands)
 
Three Months Ended
December 31,
 
Twelve Months Ended
December 31,
 
2018
 
2017
 
2018
 
2017
Rentals, net
 
 
 
 
 
 
 
Base minimum rent, net
$
93,192

 
$
103,429

 
$
379,317

 
$
421,555

Straight line rent
839

 
1,572

 
5,679

 
5,707

Over/Under-market rentals, net
688

 
784

 
12,803

 
3,748

Percentage rent
1,316

 
1,381

 
4,201

 
4,432

Tenant reimbursements
27,957

 
28,632

 
114,502

 
125,201

Total
$
123,992

 
$
135,798

 
$
516,502

 
$
560,643

 
 
 
 
 
 
 
 
Other Revenues
 
 
 
 
 
 
 
Customer contract revenue
$
2,738

 
$

 
$
10,227

 
$

Outside fee income (1)

 
1,917

 

 
6,808

Miscellaneous revenue
716

 
1,131

 
3,084

 
3,172

Other rental revenues
363

 
486

 
1,002

 
1,926

Lease cancellation revenue
10

 
35

 
332

 
614

Total
$
3,827

 
$
3,569

 
$
14,645

 
$
12,520

 
 
 
 
 
 
 
 
Interest Expense, net
 
 
 
 
 
 
 
Interest paid or accrued
$
17,422

 
$
19,790

 
$
71,899

 
$
82,404

Gain on extinguishment of debt including related swap activity

 

 
(3,759
)
 

Amortization of debt deferred costs
874

 
987

 
3,546

 
3,890

Over/Under-market mortgage adjustment of acquired properties, net
(82
)
 
(302
)
 
(400
)
 
(1,100
)
Gross interest expense
18,214

 
20,475

 
71,286

 
85,194

Capitalized interest
(2,551
)
 
(1,554
)
 
(7,938
)
 
(4,868
)
Total
$
15,663

 
$
18,921

 
$
63,348

 
$
80,326

 
 
 
 
 
 
 
 
Interest and Other Income/Expense
 
 
 
 
 
 
 
Deferred compensation investment (loss) income
$
(2,203
)
 
$
1,413

 
$
289

 
$
5,651

Pension costs
246

 
(68
)
 
443

 
(383
)
Other
29

 
1,977

 
2,075

 
2,264

Total
$
(1,928
)
 
$
3,322

 
$
2,807

 
$
7,532

 
 
 
 
 
 
 
 
Supplemental Analyst Information
 
 
 
 
 
 
 
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
 
 
 
 
 
 
 
Net income from unconsolidated real estate joint ventures and partnerships
$
4,948

 
$
8,361

 
$
23,120

 
$
23,716

Intercompany fee income reclass
601

 
622

 
2,527

 
2,571

Other adjustments
188

 
125

 
(577
)
 
787

Equity in earnings of real estate joint ventures and partnerships, net
$
5,737

 
$
9,108

 
$
25,070

 
$
27,074

 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
 
Common Dividends per Share
$
1.795

 
$
1.135

 
$
2.980

 
$
2.290

 
 
 
 
 
 
 
 
Common Dividends Paid as a % of Reported Funds from Operations - Basic
327.9
%
 
188.3
%
 
124.2
%
 
95.3
%
 
 
 
 
 
 
 
 
Common Dividends Paid as a % of Core Funds from Operations - Basic
328.1
%
 
185.8
%
 
130.8
%
 
93.2
%
 
 
 
 
 
 
 
 
General and Administrative Expenses
 
 
 
 
 
 
 
General and Administrative Expenses/Total Revenue
5.7
%
 
5.6
%
 
4.7
%
 
4.9
%
 
 
 
 
 
 
 
 
General and Administrative Expenses/Total Assets before Depreciation
0.15
%
 
0.14
%
 
0.51
%
 
0.52
%
 
 
 
 
 
 
 
 
Additional Disclosures for Revenues and Operating Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minority Interests Share of Revenues and Operating Expenses and Other Adjustments
$
(1,497
)
 
$
(1,456
)
 
$
(5,805
)
 
$
(5,667
)
 
 
 
 
 
 
 
 
Pro rata Share of Unconsolidated Joint Ventures
 
 
 
 
 
 
 
Revenues
12,714

 
13,024

 
51,459

 
53,653

Operating expense
(2,345
)