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Section 1: 8-K (8-K)

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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): July 31, 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)
(IRS 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))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Trading Symbol(s)
 
Name of Each Exchange on Which Registered
Common Shares of Beneficial Interest, $.03 par value
 
WRI
 
New York Stock Exchange
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 July 31, 2019, we issued a press release describing our results of operations for the quarter ended June 30, 2019, 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 June 30, 2019 (including press release dated July 31, 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: August 1, 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 June 30, 2019 (including press release dated July 31, 2019).

4
(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
399012202_supplementalcover2019q2001.jpg






399012202_wrisupplementallogo2019a03.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 - 41
 
 
 
Other Topics of Interest
 
 
New Lease Guidance Implementation
43
 
 
 
 
 
 
 
 
 
 
 
 
 
 
www.weingarten.com
 



399012202_wriedgarpressreleasea01.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 SAME PROPERTY NOI GROWTH AND RENTAL RATE INCREASES

HOUSTON, July 31, 2019 (BUSINESS WIRE) -- Weingarten Realty (NYSE: WRI) announced today the results of its operations for the quarter ended June 30, 2019. The supplemental financial package with additional information can be found on the Company's website under the Investor Relations tab.

Second Quarter Operating and Financial Highlights

Net income attributable to common shareholders (“Net Income”) for the quarter increased to $0.65 per diluted share (hereinafter “per share”) from $0.61 per share in the same quarter of 2018;

Core Funds From Operations Attributable to Common Shareholders ("Core FFO") for the quarter was $0.53 per share;

Same Property Net Operating Income (“SPNOI”) including redevelopments increased a strong 4.2% over the same quarter of the prior year and is up 3.7% year-to-date;

Occupancy increased 50 basis points to 94.8% at quarter-end from 94.3% in the prior quarter;

Rental rates on new leases and renewals for the quarter were up significantly 20.0% and 6.3%, respectively;

Acquisition of a Sprouts Farmers Market-anchored shopping center in Scottsdale, Arizona for $33 million and subsequent to quarter-end, a Whole Foods-anchored center in North Decatur, Georgia (Atlanta) for $53 million (at 100%) in a joint venture with a Dutch pension fund; and

Dispositions totaled $133 million for the quarter and property sales closed subsequent to quarter-end totaled $114 million.

Financial Results

The Company reported Net Income of $83.8 million or $0.65 per share for the second quarter of 2019, as compared to $78.3 million or $0.61 per share for the same period in 2018. This increase was due primarily to higher gains on sales of properties during 2019. Year-to-date, Net Income was $133.5 million or $1.03 per share for 2019 compared to $225.1 million or $1.74 per share for 2018 due primarily to higher gains on sales of properties during 2018.

Page i





Core FFO for the quarter ended June 30, 2019 was $0.53 per share or $68.7 million compared to $0.57 per share or $74.3 million for the same quarter of last year. Core FFO decreased by $0.03 per share due to the impact of 2018 and 2019 dispositions and decreased by $0.02 per share due to increased general and administrative expense for the expensing of indirect leasing fees under the new leasing standard. This was partially offset by higher operating income driven by increased base rents, bad debt recoveries and incremental income from new developments and redevelopments. For the six months, Core FFO was $136.0 million or $1.05 per share for 2019 compared to $149.1 million or $1.15 per share for 2018. Core FFO for the six months decreased by $0.06 per share due to dispositions and $0.04 per share due to an increase in general and administrative expense for the expensing of indirect leasing fees under the new leasing standard.

NAREIT FFO was $68.7 million or $0.53 per share for the second quarter of 2019 compared to $84.5 million or $0.65 per share for 2018. Included in 2018 is a benefit of $10.0 million, or $0.08 per share, from the write-off of under market rent intangibles related to terminated Toys R Us leases. Year-to-date, NAREIT FFO was $136.0 million or $1.05 per share for 2019 compared to $162.8 million or $1.25 per share for 2018.

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

Operating Results

For the period ending June 30, 2019, the Company’s operating highlights were as follows:
 
Q2 2019
YTD 2019
Occupancy (Signed Basis):
 
 
Occupancy - Total
94.8%
 
Occupancy - Small Shop Spaces
90.4%
 
Occupancy - Same Property Portfolio
95.0%
 
 
 
 
Same Property Net Operating Income, with redevelopments
4.2%
3.7%
 
 
 
Rental Rate Growth - Total:
9.1%
6.0%
New Leases
20.0%
15.3%
Renewals
6.3%
3.8%
 
 
 
Leasing Transactions:
 
 
Number of New Leases
71
136
New Leases - Annualized Revenue (in millions)
$6.5
$11.1
Number of Renewals
121
266
Renewals - Annualized Revenue (in millions)
$9.7
$23.1

A reconciliation of Net Income to SPNOI is included herein.

“We are very pleased with operations this quarter. Our Same Property NOI increase of 4.2% is a reflection of our significantly transformed portfolio of properties. Also reflective of the quality portfolio, rental rate increases were strong and our occupancy continued to increase. With the most diversified tenant base in our sector, the impact of tenant failures continues to be muted. Given the strong performance, we are increasing our Same Property NOI guidance from a range of 2% to 3% to a range of 2 ½% to 3 ½% for the full year. It was an outstanding quarter,” said Johnny Hendrix, Executive Vice President and Chief Operating Officer.


Page ii




Portfolio Activity

During the quarter, the Company closed $133 million of dispositions which included five shopping centers and three land parcels. Subsequent to quarter-end, the Company sold two additional shopping centers for $114 million. Of particular note is the sale of Jess Ranch Marketplace for $89 million. Located in Apple Valley, California, it is anchored by Winco Foods, Best Buy, Bed Bath & Beyond, PetSmart and Burlington. While this sale was not anticipated in the Company’s business plan, selling a large power center in a tertiary market at a reasonable price was the right long-term decision.

With respect to acquisitions during the quarter, the Company purchased the 144,000 square foot Camelback Miller Plaza in the upscale Scottsdale area of greater Phoenix, Arizona for $33 million. This center is anchored by Sprouts Farmers Market and T J Maxx, each generating outstanding sales. Demographics are strong, rents at the center are below market and the property has significant densification opportunities in the future. Subsequent to quarter-end, the Company, in partnership with Bouwinvest, purchased North Decatur Station for $53 million, which is part of a mixed use development in North Decatur, a very affluent part of Atlanta. Anchored by a Whole Foods, the development has strong three-mile demographics with average household income of $96,500, population of 112,000 and college graduate levels above 60%. The Company will own 51% of the venture. This brings the Company’s share of acquisitions to-date in 2019 to $81 million.

In addition, the Company invested $48 million in new developments and redevelopments during the second quarter. The majority of the investment is in two projects in the Washington D.C. area where pre-leasing activities are under way and a 30-story residential tower at its River Oaks Shopping Center in Houston. Details of these projects can be found in the Company’s Supplemental Financial Information package on its website.

“We are quite pleased to be able to dispose of properties at the bottom of our portfolio. Selling these properties generally at or above what we believe to be net asset value takes advantage of the significant disparity between public company and private market valuations. With respect to Jess Ranch, selling a large asset with multiple big box retailers in a tertiary market can be challenging, so the opportunity to sell at a price above our net asset value was clearly the right strategic decision even if it significantly contributes to increasing our disposition guidance. The harvesting of significant gains imbedded in many of our properties has resulted in distributions to our shareholders in the form of special dividends. We have returned in excess of $275 million or $2.15 per share over the last two years with an additional special dividend expected in 2019 that will further enhance shareholder returns. Through this capital recycling, we are removing significant risk from our portfolio, retaining good quality properties and adding quality acquisitions and new developments. While the strong dispositions affects FFO in the short term, it’s the right long term value creation for our shareholders as it will provide for enhanced financial stability as well as stronger opportunities for FFO growth in the future,” said Drew Alexander, President and Chief Executive Officer.

Balance Sheet

Proceeds from the Company’s 2018 and 2019 dispositions were used to fund its new development and redevelopment pipelines, its acquisitions and to further strengthen its balance sheet. On July 1, 2019, the Company paid off a $50 million life company loan with a 7% interest rate leaving no significant maturities for the balance of 2019 and 2020. At quarter-end, Net Debt to Core EBITDAre was a strong 5.05 times and Debt to Total Market Capitalization was 33.4%.


Page iii




“We continue to maintain one of the strongest balance sheets in our sector which not only provides significant security for our shareholders in the event of unexpected market events but also positions us to pursue growth opportunities. Our current position will further provide funding for our new development, redevelopment and acquisition programs. Our balance sheet has never been in better shape, and we are well positioned for the future,” said Steve Richter, Executive Vice President and Chief Financial Officer.

2019 Guidance

Based on the success of the Company’s year-to-date dispositions efforts with sales of $314 million and expectations for the balance of the year, the Company increased 2019 guidance for dispositions from a range of $250 to $350 million to a range of $350 to $450 million. Accordingly, guidance for Net Income was increased due to higher expected gains on property sales and guidance was reduced for NAREIT FFO and Core FFO, as set forth in the table below. Additionally, the Company has increased guidance on SPNOI based upon the strength of operating results from its transformed portfolio of quality properties. Given the improvement in the quality of the portfolio, dispositions in 2020 are expected to return to more normalized portfolio management estimated around $150 million.

Shown below is the Company’s 2019 guidance with adjusted items highlighted.

 
Previous Guidance
Revised Guidance
Net Income (per share)
$1.77 - $1.89
$2.40 - $2.50
NAREIT FFO (per share)
$2.09 - $2.17
$2.05 - $2.11
Core FFO (per share)
$2.09 - $2.17
$2.05 - $2.11
Acquisitions
$50 - $150 million
$50 - $150 million
Re / New Development
$175 - $225 million
$175 - $225 million
Dispositions
$250 - $350 million
$350 - $450 million
Same Property NOI with redevelopments
2.0% - 3.0%
2.5% - 3.5%
Same Property NOI w/o redevelopments
1.5% - 2.5%
2.0% - 3.0%

Dividends

The Board of Trust Managers declared a quarterly cash dividend of $0.395 per common share payable on September 13, 2019 to shareholders of record on September 6, 2019.

Conference Call Information

The Company also announced that it will host a live webcast of its quarterly conference call on August 1, 2019 at 11:00 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 # 47864596). 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 June 30, 2019, 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 173 properties which are located in 17 states spanning the country from coast to coast. These properties represent approximately 33.9 million square feet of which our interests in these properties aggregated approximately 22.2 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
June 30,
 
Six Months Ended
June 30,
 
 
 
 
2019
 
 2018 (1)
 
2019
 
 2018 (1)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
(Unaudited)
Revenues:
 
 
 
 
 
 
 
Rentals, net
$
119,462

 
$
138,737

 
$
239,288

 
$
267,885

Other
3,198

 
3,349

 
6,510

 
6,653


Total Revenues
122,660

 
142,086

 
245,798

 
274,538

Operating Expenses:
 
 
 
 
 
 
 
Depreciation and amortization
34,967

 
50,421

 
68,939

 
88,516

Operating
22,767

 
24,104

 
47,015

 
47,374

Real estate taxes, net
15,736

 
17,466

 
31,867

 
35,105

Impairment loss

 

 
74

 

General and administrative
8,880

 
6,149

 
18,461

 
11,744


Total Operating Expenses
82,350

 
98,140

 
166,356

 
182,739

Other Income (Expense):
 
 
 
 
 
 
 
Interest expense, net
(14,953
)
 
(17,017
)
 
(30,242
)
 
(31,689
)
Interest and other income (expense)
1,921

 
1,355

 
6,305

 
2,888

Gain on sale of property
52,061

 
46,953

 
69,848

 
155,998

Total Other Income
39,029

 
31,291

 
45,911

 
127,197

Income Before Income Taxes and Equity in Earnings of Real Estate Joint Ventures and Partnerships
79,339

 
75,237

 
125,353

 
218,996

Provision for Income Taxes
(484
)
 
(684
)
 
(661
)
 
(1,467
)
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
6,665

 
5,318

 
12,082

 
11,311

Net Income
85,520

 
79,871

 
136,774

 
228,840

Less:
Net Income Attributable to Noncontrolling Interests
(1,711
)
 
(1,582
)
 
(3,299
)
 
(3,727
)
Net Income Attributable to Common Shareholders -- Basic
$
83,809

 
$
78,289

 
$
133,475

 
$
225,113

Net Income Attributable to Common Shareholders -- Diluted
$
84,337

 
$
78,817

 
$
134,531

 
$
226,169

Earnings Per Common Share -- Basic
$
.66

 
$
.61

 
$
1.04

 
$
1.76

Earnings Per Common Share -- Diluted
$
.65

 
$
.61

 
$
1.03

 
$
1.74

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



Page vi




Weingarten Realty Investors
(in thousands)
Financial Statements
 
 
 
 
 
 
 
 
 
 
 
June 30,
2019
 
December 31,
2018
 
 
 
 
(Unaudited)
 
(Audited)
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
ASSETS
 
 
 
Property
$
4,084,476

 
$
4,105,068

Accumulated Depreciation
(1,119,866
)
 
(1,108,188
)
Investment in Real Estate Joint Ventures and Partnerships, net
377,590

 
353,828

Unamortized Lease Costs, net
136,960

 
142,014

Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net
74,784

 
97,924

Cash and Cash Equivalents
118,222

 
65,865

Restricted Deposits and Mortgage Escrows
14,854

 
10,272

Other, net
200,634

 
160,178

 
             Total Assets
$
3,887,654

 
$
3,826,961

 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Debt, net
$
1,787,400

 
$
1,794,684

Accounts Payable and Accrued Expenses
95,296

 
113,175

Other, net
210,108

 
168,403

 
Total Liabilities
2,092,804

 
2,076,262

 
 
 
 
 
 
 
Commitments and Contingencies

 

 
 
 
 
EQUITY
 
 
 
Common Shares of Beneficial Interest
3,904

 
3,893

Additional Paid-In Capital
1,778,320

 
1,766,993

Net Income Less Than Accumulated Dividends
(154,597
)
 
(186,431
)
Accumulated Other Comprehensive Loss
(10,402
)
 
(10,549
)
 
Shareholders' Equity
1,617,225

 
1,573,906

Noncontrolling Interests
177,625

 
176,793

 
             Total Liabilities and Equity
$
3,887,654

 
$
3,826,961


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
Effective January 1, 2019, 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 gains or losses from sales of certain real estate assets (including: depreciable real estate with land, land, development property and securities), change in control, and interests in real estate equity investments and their applicable taxes, plus depreciation and amortization related to real estate and impairment of certain real estate assets 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 assets 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 and transactional costs associated with development activities. 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
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
 
(Unaudited)
 
(Unaudited)
Net income attributable to common shareholders
$
83,809

 
$
78,289

 
$
133,475

 
$
225,113

Depreciation and amortization of real estate
34,732

 
50,110

 
68,475

 
87,875

Depreciation and amortization of real estate of unconsolidated real estate joint ventures and partnerships
2,789

 
3,261

 
5,741

 
6,445

Impairment of properties and real estate equity investments

 

 
74

 

(Gain) on sale of property, investment securities and interests in real estate equity investments
(51,605
)
 
(46,701
)
 
(70,554
)
 
(155,739
)
(Gain) on dispositions of unconsolidated real estate joint ventures and partnerships
(1,106
)
 
(1,219
)
 
(1,380
)
 
(3,582
)
Provision for income taxes (1)
44

 
322

 
44

 
483

Noncontrolling interests and other (2)
(484
)
 
(85
)
 
(973
)
 
1,125

NAREIT FFO – basic (3)
68,179

 
83,977

 
134,902

 
161,720

Income attributable to operating partnership units
528

 
528

 
1,056

 
1,056

NAREIT FFO – diluted (3)
68,707

 
84,505

 
135,958

 
162,776

Adjustments for Core FFO:
 
 
 
 
 
 
 
Loss (gain) on extinguishment of debt including related swap activity

 
99

 

 
(3,458
)
Lease terminations

 
(10,023
)
 

 
(10,023
)
Other

 
(240
)
 

 
(240
)
Core FFO – diluted
$
68,707

 
$
74,341

 
$
135,958

 
$
149,055

 
 
 
 
 
 
 
 
FFO weighted average shares outstanding – basic
127,856

 
127,505

 
127,807

 
127,714

Effect of dilutive securities:
 
 
 
 
 
 
 
Share options and awards
847

 
813

 
841

 
799

Operating partnership units
1,432

 
1,432

 
1,432

 
1,432

FFO weighted average shares outstanding – diluted
130,135

 
129,750

 
130,080

 
129,945

 
 
 
 
 
 
 
 
NAREIT FFO per common share – basic
$
.53

 
$
.66

 
$
1.06

 
$
1.27

 
 
 
 
 
 
 
 
NAREIT FFO per common share – diluted
$
.53

 
$
.65

 
$
1.05

 
$
1.25

 
 
 
 
 
 
 
 
Core FFO per common share – diluted
$
.53

 
$
.57

 
$
1.05

 
$
1.15

________________________________________________________________________________________________________________________________

(1) The applicable taxes related to gains and impairments of properties.
(2) Related to gains, impairments and depreciation on operating properties and unconsolidated real estate joint ventures, where applicable.
(3) 2019 Nareit FFO is presented in accordance with 2018 Restatement of "Nareit's Funds from Operations White Paper."


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
June 30, 2019
 
Six Months Ended
June 30, 2019
Beginning of the period
168

 
171

Properties added:
 
 
 
New Developments

 
1

Properties removed:
 
 
 
Dispositions
(4
)
 
(8
)
End of the period
164

 
164



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
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
 
(Unaudited)
 
(Unaudited)
Net income attributable to common shareholders
$
83,809

 
$
78,289

 
$
133,475

 
$
225,113

Add:
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
1,711

 
1,582

 
3,299

 
3,727

Provision for income taxes
484

 
684

 
661

 
1,467

Interest expense, net
14,953

 
17,017

 
30,242

 
31,689

Property management fees
683

 
630

 
1,556

 
1,497

Depreciation and amortization
34,967

 
50,421

 
68,939

 
88,516

Impairment loss

 

 
74

 

General and administrative
8,880

 
6,149

 
18,461

 
11,744

Other (1)
743

 
218

 
1,989

 
1,018

Less:
 
 
 
 
 
 
 
Gain on sale of property
(52,061
)
 
(46,953
)
 
(69,848
)
 
(155,998
)
Equity in earnings of real estate joint ventures and partnership interests, net
(6,665
)
 
(5,318
)
 
(12,082
)
 
(11,311
)
Interest and other income/expense
(1,921
)
 
(1,355
)
 
(6,305
)
 
(2,888
)
Revenue adjustments (2)
(3,060
)
 
(14,108
)
 
(6,279
)
 
(18,040
)
Adjusted income
82,523

 
87,256

 
164,182

 
176,534

Less: Adjusted income related to consolidated entities not defined as same property and noncontrolling interests
(2,828
)
 
(10,816
)
 
(5,285
)
 
(23,756
)
Add: Pro rata share of unconsolidated entities defined as same property
8,621

 
8,345

 
16,908

 
16,699

Same Property Net Operating Income
88,316

 
84,785

 
175,805

 
169,477

Less: Redevelopment Net Operating Income
(8,219
)
 
(6,839
)
 
(15,991
)
 
(13,902
)
Same Property Net Operating Income excluding Redevelopments
$
80,097

 
$
77,946

 
$
159,814

 
$
155,575

___________________
(1)
Other includes items such as environmental abatement costs, demolition expenses, lease termination fees and ground rent.
(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 certain 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
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre):
 
 
 
 
 
 
 
Net income
$
85,520

 
$
79,871

 
$
136,774

 
$
228,840

Interest expense, net (1)
14,953

 
17,017

 
30,242

 
31,689

Provision for income taxes
484

 
684

 
661

 
1,467

Depreciation and amortization of real estate
34,967

 
50,421

 
68,939

 
88,516

Impairment loss on operating properties and real estate equity investments

 

 
74

 

Gain on sale of property and investment securities (2)
(51,619
)
 
(46,953
)
 
(70,589
)
 
(155,998
)
EBITDAre adjustments of unconsolidated real estate joint ventures and partnerships, net (3)
2,643

 
3,319

 
6,267

 
5,807

Total EBITDAre
86,948

 
104,359

 
172,368

 
200,321

Adjustments for Core EBITDAre:
 
 
 
 
 
 
 
Lease terminations

 
(10,023
)
 

 
(10,023
)
Total Core EBITDAre
$
86,948

 
$
94,336

 
$
172,368

 
$
190,298

(1) Includes a $3.8 million gain on extinguishment of debt including related swap activity for the six months ended June 30, 2018.
(2) Includes a $.2 million gain on sale of non-operating assets for the six months ended June 30, 2019. Includes a $.2 million gain on sale of non-operating assets for both the three and six months ended June 30, 2018.
(3) Includes a $.3 million gain on sale of non-operating assets for the six months ended June 30, 2019 and a $.1 million and $.3 million loss on extinguishment of debt for the three and six months ended June 30, 2018, respectively.

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.

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 June 30, 2019, we owned or operated under long-term leases, interests in 173 properties which are located in 17 states that span the United States from coast to coast. These properties represent approximately 33.9 million square feet of which our interests in these properties aggregated approximately 22.2 million square feet of leasable area. Our properties were 94.8% leased as of June 30, 2019 and historically our portfolio occupancy rate has never been below 90%.




Page 1













Financial Summary




Weingarten Realty Investors
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
Twelve Months Ended December 31,
 
2019
 
2018(1)
 
2019
 
2018(1)
 
2018(1)
 
2017(1)
 
2016(1)
 
2015(1)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rentals, net
$
119,462

 
$
138,737

 
$
239,288

 
$
267,885

 
$
517,836

 
$
563,183

 
$
540,141

 
$
504,724

Other
3,198

 
3,349

 
6,510

 
6,653

 
13,311

 
9,980

 
9,414

 
8,120

Total Revenues
122,660

 
142,086

 
245,798

 
274,538

 
531,147

 
573,163

 
549,555

 
512,844

Operating Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
34,967

 
50,421

 
68,939

 
88,516

 
161,838

 
167,101

 
162,535

 
145,940

Operating
22,767

 
24,104

 
47,015

 
47,374

 
90,554

 
109,310

 
98,855

 
94,244

Real estate taxes, net
15,736

 
17,466

 
31,867

 
35,105

 
69,268

 
75,636

 
66,358

 
60,289

Impairment loss

 

 
74

 

 
10,120

 
15,257

 
98

 
153

General and administrative
8,880

 
6,149

 
18,461

 
11,744

 
25,040

 
28,052

 
26,607

 
27,367

Total Operating Expenses
82,350

 
98,140

 
166,356

 
182,739

 
356,820

 
395,356

 
354,453

 
327,993

Other Income (Expense):


 


 


 


 


 


 


 


Interest expense, net
(14,953
)
 
(17,017
)
 
(30,242
)
 
(31,689
)
 
(63,348
)
 
(80,326
)
 
(83,003
)
 
(87,783
)
Interest and other income (expense)
1,921

 
1,355

 
6,305

 
2,888

 
2,807

 
7,532

 
1,910

 
4,406

Gain on sale of property
52,061

 
46,953

 
69,848

 
155,998

 
207,865

 
218,611

 
100,714

 
59,621

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

 

 

 

 

 

 
48,322

 
879

Total Other Income (Expense)
39,029

 
31,291

 
45,911

 
127,197

 
147,324

 
145,817

 
67,943

 
(22,877
)
Income Before Income Taxes and Equity in Earnings of Real Estate Joint Ventures and Partnerships
79,339

 
75,237

 
125,353

 
218,996

 
321,651

 
323,624

 
263,045

 
161,974

(Provision) Benefit for Income Taxes
(484
)
 
(684
)
 
(661
)
 
(1,467
)
 
(1,378
)
 
17

 
(6,856
)
 
(52
)
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net (2)
6,665

 
5,318

 
12,082

 
11,311

 
25,070

 
27,074

 
20,642

 
19,300

Net Income
85,520

 
79,871

 
136,774

 
228,840

 
345,343

 
350,715

 
276,831

 
181,222

Less: Net Income Attributable to Noncontrolling Interests
(1,711
)
 
(1,582
)
 
(3,299
)
 
(3,727
)
 
(17,742
)
 
(15,441
)
 
(37,898
)
 
(6,870
)
Net Income Adjusted for Noncontrolling Interests
83,809

 
78,289

 
133,475

 
225,113

 
327,601

 
335,274

 
238,933

 
174,352

Dividends on Preferred Shares

 

 

 

 

 

 

 
(3,830
)
Redemption Costs of Preferred Shares

 

 

 

 

 

 

 
(9,687
)
Net Income Attributable to Common Shareholders
$
83,809

 
$
78,289

 
$
133,475

 
$
225,113

 
$
327,601

 
$
335,274

 
$
238,933

 
$
160,835

Earnings Per Common Share - Basic
$
0.66

 
$
0.61

 
$
1.04

 
$
1.76

 
$
2.57

 
$
2.62

 
$
1.90

 
$
1.31

Earnings Per Common Share - Diluted
$
0.65

 
$
0.61

 
$
1.03

 
$
1.74

 
$
2.55

 
$
2.60

 
$
1.87

 
$
1.29

(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)

 
June 30,
2019
 
December 31,
2018
 
 
 
 
ASSETS
 
 
 
Property
$
4,084,476

 
$
4,105,068

Accumulated Depreciation
(1,119,866
)
 
(1,108,188
)
Property, net
2,964,610

 
2,996,880

 
 
 
 
Investment in Real Estate Joint Ventures and Partnerships, net (1)
377,590

 
353,828

Total
3,342,200

 
3,350,708

 
 
 
 
Unamortized Lease Costs, net
136,960

 
142,014

Accrued Rent, Accrued Contract Receivables and Accounts Receivable (net of
  allowance for doubtful accounts of $6,855 in 2018)
74,784

 
97,924

Cash and Cash Equivalents
118,222

 
65,865

Restricted Deposits and Mortgage Escrows
14,854

 
10,272

Other, net
200,634

 
160,178

Total Assets
$
3,887,654

 
$
3,826,961

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Debt, net
$
1,787,400

 
$
1,794,684

Accounts Payable and Accrued Expenses
95,296

 
113,175

Other, net
210,108

 
168,403

Total Liabilities
2,092,804

 
2,076,262

 
 
 
 
Commitments and Contingencies

 

 
 
 
 
Equity:
 
 
 
Shareholders' Equity:
 
 
 
Common Shares of Beneficial Interest - par value, $.03 per share;
 shares authorized: 275,000; shares issued and outstanding:
 128,670 in 2019 and 128,333 in 2018
3,904

 
3,893

Additional Paid-In Capital
1,778,320

 
1,766,993

Net Income Less Than Accumulated Dividends
(154,597
)
 
(186,431
)
Accumulated Other Comprehensive Loss
(10,402
)
 
(10,549
)
Total Shareholders' Equity
1,617,225

 
1,573,906

Noncontrolling Interests
177,625

 
176,793

Total Equity
1,794,850

 
1,750,699

Total Liabilities and Equity
$
3,887,654

 
$
3,826,961

(1)
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
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Funds From Operations Attributable to Common Shareholders (FFO)
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Net income attributable to common shareholders
$
83,809

 
$
78,289

 
$
133,475

 
$
225,113

Depreciation and amortization of real estate
34,732

 
50,110

 
68,475

 
87,875

Depreciation and amortization of real estate of unconsolidated real estate joint ventures and partnerships
2,789

 
3,261

 
5,741

 
6,445

Impairment of properties and real estate equity investments

 

 
74

 

(Gain) on sale of property, investment securities and interests in real estate equity investments
(51,605
)
 
(46,701
)
 
(70,554
)
 
(155,739
)
(Gain) on dispositions of unconsolidated real estate joint ventures and partnerships
(1,106
)
 
(1,219
)
 
(1,380
)
 
(3,582
)
Provision for income taxes (1)
44

 
322

 
44

 
483

Noncontrolling interests and other (2)
(484
)
 
(85
)
 
(973
)
 
1,125

NAREIT FFO - Basic (3)
68,179

 
83,977

 
134,902

 
161,720

Income attributable to operating partnership units
528

 
528

 
1,056

 
1,056

NAREIT FFO - Diluted (3)
68,707

 
84,505

 
135,958

 
162,776

Adjustments for Core FFO:
 
 
 
 
 
 
 
Loss (gain) on extinguishment of debt including related swap activity

 
99

 

 
(3,458
)
Lease terminations

 
(10,023
)
 

 
(10,023
)
Other

 
(240
)
 

 
(240
)
Core FFO - Diluted
$
68,707

 
$
74,341

 
$
135,958

 
$
149,055

 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
FFO weighted average number of common shares outstanding - Basic
127,856

 
127,505

 
127,807

 
127,714

Effect of dilutive securities:
 
 
 
 
 
 
 
Share options and awards
847

 
813

 
841

 
799

Operating partnership units
1,432

 
1,432

 
1,432

 
1,432

FFO weighted average number of common shares outstanding - Diluted
130,135

 
129,750

 
130,080

 
129,945

 
 
 
 
 
 
 
 
NAREIT FFO Per Common Share - Basic
$
0.53

 
$
0.66

 
$
1.06

 
$
1.27

 
 
 
 
 
 
 
 
NAREIT FFO Per Common Share - Diluted
$
0.53

 
$
0.65

 
$
1.05

 
$
1.25

Adjustments for Core FFO per common share:
 
 
 
 
 
 
 
(Gain) on extinguishment of debt including related swap activity

 

 

 
(0.02
)
Lease terminations

 
(0.08
)
 

 
(0.08
)
Core FFO Per Common Share - Diluted
$
0.53

 
$
0.57

 
$
1.05

 
$
1.15

 
 
 
 
 
 
 
 

(1)
The applicable taxes related to gains and impairments of properties.
(2)
Related to gains, impairments and depreciation on operating properties and unconsolidated real estate joint ventures, where applicable.
(3)
2019 Nareit FFO is presented in accordance with 2018 Restatement of "Nareit's Funds from Operations White Paper."


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
June 30,
 
Six Months Ended
June 30,
 
Three Months Ended
December 31,
 
2019
 
2018
 
2019
 
2018
 
2018
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre):
 
 
 
 
 
 
 
 
 
Net income
$
85,520

 
$
79,871

 
$
136,774

 
$
228,840

 
$
63,229

Interest expense, net (1)
14,953

 
17,017

 
30,242

 
31,689

 
15,663

Provision for income taxes
484

 
684

 
661

 
1,467

 
10

Depreciation and amortization of real estate
34,967

 
50,421

 
68,939

 
88,516

 
35,280

Impairment loss on operating properties and real estate equity investments

 

 
74

 

 
7,722

Gain on sale of property and investment securities (2)
(51,619
)
 
(46,953
)
 
(70,589
)
 
(155,998
)
 
(34,788
)
EBITDAre adjustments of unconsolidated real estate joint ventures and partnerships, net (3)
2,643

 
3,319

 
6,267

 
5,807

 
3,874

Total EBITDAre
86,948

 
104,359

 
172,368

 
200,321

 
90,990

Adjustments for Core EBITDAre:
 
 
 
 
 
 
 
 
 
Lease terminations

 
(10,023
)
 

 
(10,023
)
 

Other

 

 

 

 
(50
)
Total Core EBITDAre
$
86,948

 
$
94,336

 
$
172,368

 
$
190,298

 
$
90,940

 
 
 
 
 
 
 
 
 
 
Net Debt to Core EBITDAre:
 
 
 
 
 
 
 
 
 
Debt
$
1,787,400

 
$
1,827,181

 
 
 

 
$
1,794,684

Less: Cash and cash equivalents
(118,222
)
 
(13,096
)
 
 
 

 
(65,865
)
Add: Proportional share of net debt of unconsolidated real estate joint ventures and partnerships
86,872

 
96,585

 
 
 

 
89,199

Total Net Debt
$
1,756,050

 
$
1,910,670

 

 

 
$
1,818,018

 
 
 
 
 
 
 
 
 
 
Annualized Core EBITDAre
$
347,792

 
$
377,344

 
 
 
 
 
$
363,760

 
 
 
 
 
 
 
 
 
 
Net Debt to Core EBITDAre
5.05

 
5.06

 
 
 

 
5.00

 
 
 
 
 
 
 
 
 
 

(1)
Includes a $3.8 million gain on extinguishment of debt including related swap activity for the six months ended June 30, 2018.
(2)
Includes a $.2 million gain on sale of non-operating assets for the six months ended June 30, 2019. Includes a $.2 million gain on sale of non-operating assets for both the three and six months ended June 30, 2018. Also includes a $.1 million gain on sale of non-operating assets for the three months ended December 31, 2018.
(3)
Includes a $.3 million gain on sale of non-operating assets for the six months ended June 30, 2019, and a $.1 million and $.3 million loss on extinguishment of debt for the three and six months ended June 30, 2018, respectively.


Page 6



Weingarten Realty Investors
Supplemental Income Statement Detail
(in thousands)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
Rentals, net
 
 
 
 
 
 
 
Fixed Payments:
 
 
 
 
 
 
 
Base minimum rent, net
$
90,787

 
$
95,581

 
$
180,140

 
$
192,846

Straight line rent
832

 
1,531

 
1,804

 
2,851

Over/Under-market rentals, net
779

 
10,814

 
1,439

 
11,580

Variable Payments:
 
 
 
 
 
 
 
Percentage rent
897

 
961

 
1,599

 
1,686

Tenant reimbursements
25,999

 
29,633

 
53,816

 
58,286

Other rental revenues
168

 
144

 
463

 
431

Lease cancellation revenue

 
73

 
27

 
205

Total
$
119,462

 
$
138,737

 
$
239,288

 
$
267,885

 
 
 
 
 
 
 
 
Other Revenues
 
 
 
 
 
 
 
Customer contract revenue
$
2,551

 
$
2,510

 
$
5,130

 
$
5,062

Miscellaneous revenue
647

 
839

 
1,380

 
1,591

Total
$
3,198

 
$
3,349

 
$
6,510

 
$
6,653

 
 
 
 
 
 
 
 
Interest Expense, net
 
 
 
 
 
 
 
Interest paid or accrued
$
17,429

 
$
17,896

 
$
34,819

 
$
36,985

Gain on extinguishment of debt including related swap activity

 
(1
)
 

 
(3,759
)
Amortization of debt deferred costs
888

 
867

 
1,790

 
1,803

Over/Under-market mortgage adjustment of acquired properties, net
(81
)
 
(82
)
 
(163
)
 
(237
)
Gross interest expense
18,236

 
18,680

 
36,446

 
34,792

Capitalized interest
(3,283
)
 
(1,663
)
 
(6,204
)
 
(3,103
)
Total
$
14,953

 
$
17,017

 
$
30,242

 
$
31,689

 
 
 
 
 
 
 
 
Deferred Compensation Net Income Impact (1)
 
 
 
 
 
 
 
Interest and other income (expense)
$
1,204

 
$
873

 
$
4,180

 
$
1,966

Operating expense
(803
)
 
(582
)
 
(2,787
)
 
(1,311
)
General and administrative expense
(401
)
 
(291
)
 
(1,393
)
 
(655
)
Impact on Net Income
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
 
 
 
 
 
 
 
Net income from unconsolidated real estate joint ventures and partnerships
$
5,849

 
$
4,916

 
$
10,438

 
$
11,152

Intercompany fee income reclass
646

 
627

 
1,332

 
1,316

Other adjustments
170

 
(225
)
 
312

 
(1,157
)
Equity in earnings of real estate joint ventures and partnerships, net
$
6,665

 
$
5,318

 
$
12,082

 
$
11,311

 
 
 
 
 
 
 
 
Dividends
 
 
 
 
 
 
 
Common Dividends per Share
$
0.395

 
$
0.395

 
$
0.790

 
$
0.790

 
 
 
 
 
 
 
 
Common Dividends Paid as a % of Reported Funds from Operations - Basic
74.5
%
 
60.2
%
 
75.3
%
 
62.7
%
 
 
 
 
 
 
 
 
Common Dividends Paid as a % of Core Funds from Operations - Basic
74.5
%
 
68.5
%
 
75.3
%
 
68.5
%
 
 
 
 
 
 
 
 
General and Administrative Expenses
 
 
 
 
 
 
 
General and Administrative Expenses/Total Revenue
7.2
%
 
4.3
%
 
7.5
%
 
4.3
%
 
 
 
 
 
 
 
 
General and Administrative Expenses/Total Assets before Depreciation
0.18
%
 
0.12
%
 
0.37
%
 
0.23
%
 
 
 
 
 
 
 
 
Additional Disclosures for Revenues and Operating Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Minority Interests Share of Revenues and Operating Expenses and Other Adjustments
$
(1,232
)
 
$
(1,577
)
 
$
(2,318
)
 
$
(2,819
)
 
 
 
 
 
 
 
 
Pro rata Share of Unconsolidated Joint Ventures
 
 
 
 
 
 
 
Revenues
12,487

 
12,549

 
24,806

 
25,776

Operating expense
(2,146
)
 
(2,199
)
 
(4,432
)
 
(4,615
)
Real estate taxes
(1,763
)
 
(2,082
)
 
(3,558
)
 
(4,092
)
 
 
 
 
 
 
 
 
Revenues and Operating Expenses from Sold Properties
1,449

 
8,997

 
3,904

 
20,654

(1)
Eligible associates of the Company may contribute a portion of their earnings to a Deferred Compensation plan for income tax deferral purposes.  The Company does not match or contribute funds to the plan, as it is all the associates earnings.  The asset and corresponding liability along with the related earnings are recorded in the Company financial statements on behalf of the participants.
Note: Pro rata financial information is not, and is not intended to be, a presentation in accordance with generally accepted accounting principles. See page 1 for information regarding this presentation and the limitations thereof.

Page 7



Weingarten Realty Investors
Supplemental Balance Sheet Detail
(in thousands)
 
June 30,
2019
 
December 31,
2018
 
 
 
 
Property
Land
$
885,144

 
$
919,237

Land held for development
41,608

 
45,673

Land under development
56,595

 
55,793

Buildings and improvements
2,887,563

 
2,927,954

Construction in-progress
213,566

 
156,411

Total
$
4,084,476

 
$
4,105,068

 
 
 
 
Straight Line Rent Receivable
 
$
59,606

 
$
61,487

 
 
 
 
Other Assets, net
Notes receivable and mortgage bonds, net
$
24,974

 
$
24,995

Debt service guaranty asset
60,900

 
60,900

Non-qualified benefit plan assets
35,437

 
30,999

Out-of-market leases, net
17,218

 
18,564

Investments
1,250

 
9,635

Deferred income tax asset
7,828

 
6,495

Unamortized debt costs, net
926

 
1,307

Right of use assets, net
43,917

 

Other
8,184

 
7,283

Total
$