UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



☒	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

~~September 30, 2019~~☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the transition period from [] to []

Commission file number 1-9876

Weingarten Realty Investors

(Exact name of registrant as specified in its charter)


Texas			74-1464203
~~Texas~~		~~74-1464203~~
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2600 Citadel Plaza Drive
P.O. Box 924133
Houston,	Texas	77292-4133
(Address of principal executive offices)		(Zip Code)



(713)		866-6000
(~~Registrant's~~Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

~~Not Applicable~~

~~(Former name, former address and former fiscal~~ ~~year, if changed since last report)~~

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒ ⌧	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No☒

As of ~~October 28, 2019,~~July 30, 2020, there were ~~128,673,480~~128,103,123 common shares of beneficial interest of Weingarten Realty Investors, $.03 par value, outstanding.

Table of Contents

TABLE OF CONTENTS


PART I.		Financial Information:	Page Number
~~PART I.~~		~~Financial Information:~~	~~Page Number~~

	Item 1.	Financial Statements (unaudited):

		Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	3

		Condensed Consolidated Statements of Comprehensive Income for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	4

		Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019	5

		Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	6

		Condensed Consolidated Statements of Equity for the ~~Nine~~Three and Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019	7

		Notes to Condensed Consolidated Financial Statements	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29 27

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45

	Item 4.	Controls and Procedures	45

PART II.		Other Information:

	Item 1.	Legal Proceedings	45

	Item 1A.	Risk Factors	45

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45 47

	Item 3.	Defaults Upon Senior Securities	45 47

	Item 4.	Mine Safety Disclosures	45 47

	Item 5.	Other Information	45 47

	Item 6.	Exhibits	45 47

~~Signatures~~Exhibit Index				46 48

~~Exhibit Index~~ Signatures				47 49

Table of Contents

PART I-FINANCIAL INFORMATION

ITEM 1. Financial Statements

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Revenues:
Rentals, net $ 117,378
$ 125,586
$ 356,666
$ 393,471
Other 3,984
3,204
10,494
9,857
Total Revenues 121,362
128,790
367,160
403,328
Operating Expenses:
Depreciation and amortization 33,380
38,042
102,319
126,558
Operating 22,912
22,555
69,927
69,929
Real estate taxes, net 15,205
17,601
47,072
52,706
Impairment loss —
2,398
74
2,398
General and administrative 8,432
5,971
26,893
17,715
Total Operating Expenses 79,929
86,567
246,285
269,306
Other Income (Expense):

Interest expense, net (13,820 ) (15,996 ) (44,062 ) (47,685 )
Interest and other income, net 1,104
1,847
7,409
4,735
Gain on sale of property 74,115
17,079
143,963
173,077
Total Other Income 61,399
2,930
107,310
130,127
Income Before Income Taxes and Equity in Earnings of Real Estate Joint Ventures and Partnerships 102,832
45,153
228,185
264,149
(Provision) Benefit for Income Taxes (21 ) 99
(682 ) (1,368 )
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net 5,698
8,022
17,780
19,333
Net Income 108,509
53,274
245,283
282,114
Less: Net Income Attributable to Noncontrolling Interests (1,767 ) (10,293 ) (5,066 ) (14,020 )
Net Income Attributable to Common Shareholders $ 106,742
$ 42,981
$ 240,217
$ 268,094
Earnings Per Common Share - Basic:
Net income attributable to common shareholders $ .83
$ .34
$ 1.88
$ 2.10
Earnings Per Common Share - Diluted:
Net income attributable to common shareholders $ .82
$ .34
$ 1.86
$ 2.08


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenues:
Rentals, net	$	95,813	$	119,462	$	203,863	$	239,288
Other		2,322		3,198		5,624		6,510
Total Revenues		98,135		122,660		209,487		245,798
Operating Expenses:
Depreciation and amortization		37,627		34,967		74,283		68,939
Operating		19,978		22,767		43,138		47,015
Real estate taxes, net		15,733		15,736		30,741		31,867
Impairment loss		—		—		44		74
General and administrative		12,920		8,880		15,227		18,461
Total Operating Expenses		86,258		82,350		163,433		166,356
Other Income (Expense):
Interest expense, net		(15,776)		(14,953)		(30,378)		(30,242)
Interest and other income (expense), net		5,293		1,921		(535)		6,305
Gain on sale of property		7,898		52,061		21,474		69,848
Total Other (Expense) Income		(2,585)		39,029		(9,439)		45,911
Income Before Income Taxes and Equity in Earnings of Real Estate Joint Ventures and Partnerships		9,292		79,339		36,615		125,353
Provision for Income Taxes		(343)		(484)		(515)		(661)
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net		3,428		6,665		30,525		12,082
Net Income		12,377		85,520		66,625		136,774
Less: Net Income Attributable to Noncontrolling Interests		(1,009)		(1,711)		(2,635)		(3,299)
Net Income Attributable to Common Shareholders	$	11,368	$	83,809	$	63,990	$	133,475
Earnings Per Common Share - Basic:
Net income attributable to common shareholders	$	0.09	$	0.66	$	0.50	$	1.04
Earnings Per Common Share - Diluted:
Net income attributable to common shareholders	$	0.09	$	0.65	$	0.50	$	1.03

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Net Income $ 108,509
$ 53,274
$ 245,283
$ 282,114
Cumulative effect adjustment of new accounting standards —
—
—
(1,541 )
Other Comprehensive Income (Loss):
Net unrealized gain on derivatives —
—
—
1,379
Reclassification adjustment of derivatives and designated hedges into net income (223 ) (224 ) (663 ) (4,078 )
Retirement liability adjustment 305
325
892
903
Total 82
101
229
(1,796 )
Comprehensive Income 108,591
53,375
245,512
278,777
Comprehensive Income Attributable to Noncontrolling Interests (1,767 ) (10,293 ) (5,066 ) (14,020 )
Comprehensive Income Adjusted for Noncontrolling Interests $ 106,824
$ 43,082
$ 240,446
$ 264,757


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Net Income	$	12,377	$	85,520	$	66,625	$	136,774
Other Comprehensive Income:
Reclassification adjustment of derivatives and designated hedges into net income		(224)		(221)		(445)		(440)
Retirement liability adjustment		273		299		570		587
Total		49		78		125		147
Comprehensive Income		12,426		85,598		66,750		136,921
Comprehensive Income Attributable to Noncontrolling Interests		(1,009)		(1,711)		(2,635)		(3,299)
Comprehensive Income Adjusted for Noncontrolling Interests	$	11,417	$	83,887	$	64,115	$	133,622

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

September 30,
2019 December 31,
2018
ASSETS
Property $ 4,026,900
$ 4,105,068
Accumulated Depreciation (1,118,148 ) (1,108,188 )
Property, net * 2,908,752
2,996,880
Investment in Real Estate Joint Ventures and Partnerships, net 422,795
353,828
Total 3,331,547
3,350,708
Unamortized Lease Costs, net 126,729
142,014
Accrued Rent, Accrued Contract Receivables and Accounts Receivable (net of allowance for doubtful accounts of $6,855 in 2018) * 79,277
97,924
Cash and Cash Equivalents * 124,406
65,865
Restricted Deposits and Escrows 62,274
10,272
Other, net 188,357
160,178
Total Assets $ 3,912,590
$ 3,826,961
LIABILITIES AND EQUITY
Debt, net * $ 1,736,803
$ 1,794,684
Accounts Payable and Accrued Expenses 124,059
113,175
Other, net 199,251
168,403
Total Liabilities 2,060,113
2,076,262
Commitments and Contingencies (see Note 14) —
—
Equity:
Shareholders’ Equity:
Common Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 275,000; shares issued and outstanding:
128,673 in 2019 and 128,333 in 2018 3,904
3,893
Additional Paid-In Capital 1,778,828
1,766,993
Net Income Less Than Accumulated Dividends (98,681 ) (186,431 )
Accumulated Other Comprehensive Loss (10,320 ) (10,549 )
Total Shareholders’ Equity 1,673,731
1,573,906
Noncontrolling Interests 178,746
176,793
Total Equity 1,852,477
1,750,699
Total Liabilities and Equity $ 3,912,590
$ 3,826,961
* Consolidated variable interest entities' assets and debt included in the above balances (see Note 15):
Property, net $ 197,312
$ 198,466
Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net 9,825
12,220
Cash and Cash Equivalents 10,388
8,243
Debt, net 45,191
45,774


	June 30,		December 31,
	2020		2019
ASSETS
Property	$	4,202,337	$	4,145,249
Accumulated Depreciation		(1,156,304)		(1,110,675)
Property Held for Sale, net		24,421		—
Property, net *		3,070,454		3,034,574
Investment in Real Estate Joint Ventures and Partnerships, net		401,724		427,947
Total		3,472,178		3,462,521

Unamortized Lease Costs, net		146,620		148,479

Accrued Rent, Accrued Contract Receivables and Accounts Receivable (net of allowance for doubtful accounts of $13,839 in 2020) *		73,760		83,639
Cash and Cash Equivalents *		14,203		41,481
Restricted Deposits and Escrows		14,063		13,810
Other, net		186,385		188,004
Total Assets	$	3,907,209	$	3,937,934

LIABILITIES AND EQUITY
Debt, net *	$	1,743,194	$	1,732,338
Accounts Payable and Accrued Expenses		97,776		111,666
Other, net		210,507		217,770
Total Liabilities		2,051,477		2,061,774

Commitments and Contingencies (see Note 12)		—		—

Equity:
Shareholders' Equity:
Common Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 275,000; shares issued and outstanding:128,103 in 2020 and 128,702 in 2019		3,890		3,905
Additional Paid-In Capital		1,767,972		1,779,986
Net Income Less Than Accumulated Dividends		(85,008)		(74,293)
Accumulated Other Comprehensive Loss		(11,158)		(11,283)
Total Shareholders' Equity		1,675,696		1,698,315
Noncontrolling Interests		180,036		177,845
Total Equity		1,855,732		1,876,160
Total Liabilities and Equity	$	3,907,209	$	3,937,934

* Consolidated variable interest entities' assets and debt included in the above balances (see Note 13):
Property, net	$	195,886	$	196,636
Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net		9,071		10,548
Cash and Cash Equivalents		9,757		8,135
Debt, net		44,589		44,993

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Nine Months Ended
September 30,
2019 2018
Cash Flows from Operating Activities:
Net Income $ 245,283
$ 282,114
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 102,319
126,558
Amortization of debt deferred costs and intangibles, net 2,437
2,354
Non-cash lease expense 916
—
Impairment loss 74
2,398
Equity in earnings of real estate joint ventures and partnerships, net (17,780 ) (19,333 )
Gain on sale of property (143,963 ) (173,077 )
Distributions of income from real estate joint ventures and partnerships 14,909
12,817
Changes in accrued rent, accrued contract receivables and accounts receivable, net 14,206
3,459
Changes in unamortized lease costs and other assets, net (8,260 ) (10,697 )
Changes in accounts payable, accrued expenses and other liabilities, net (3,633 ) (1,858 )
Other, net 2,643
(10,133 )
Net cash provided by operating activities 209,151
214,602
Cash Flows from Investing Activities:
Acquisition of real estate and land, net (54,069 ) (1,265 )
Development and capital improvements (130,857 ) (112,927 )
Proceeds from sale of property and real estate equity investments, net 358,531
372,439
Real estate joint ventures and partnerships - Investments (68,200 ) (25,731 )
Real estate joint ventures and partnerships - Distribution of capital 2,344
4,487
Proceeds from investments 10,125
1,500
Other, net 49
5,180
Net cash provided by investing activities 117,923
243,683
Cash Flows from Financing Activities:
Proceeds from issuance of debt —
638
Principal payments of debt (54,226 ) (255,472 )
Changes in unsecured credit facilities (5,000 ) —
Proceeds from issuance of common shares of beneficial interest, net 844
6,729
Repurchase of common shares of beneficial interest, net —
(18,564 )
Common share dividends paid (152,467 ) (152,110 )
Debt issuance and extinguishment costs paid (316 ) (1,189 )
Distributions to noncontrolling interests (3,807 ) (15,063 )
Contributions from noncontrolling interests 326
1,324
Other, net (1,885 ) 869
Net cash used in financing activities (216,531 ) (432,838 )
Net increase in cash, cash equivalents and restricted cash equivalents 110,543
25,447
Cash, cash equivalents and restricted cash equivalents at January 1 76,137
21,334
Cash, cash equivalents and restricted cash equivalents at September 30 $ 186,680
$ 46,781
Supplemental disclosure of cash flow information:
Cash paid for interest (net of amount capitalized of $9,897 and $5,387, respectively) $ 45,757
$ 53,890
Cash paid for income taxes $ 1,456
$ 1,515
Cash paid for amounts included in operating lease liabilities $ 2,215
$ —


	Six Months Ended
	June 30,
	2020		2019
Cash Flows from Operating Activities:
Net Income	$	66,625	$	136,774
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		74,283		68,939
Amortization of debt deferred costs and intangibles, net		1,392		1,627
Non-cash lease expense		641		602
Impairment loss		44		74
Equity in earnings of real estate joint ventures and partnerships, net		(30,525)		(12,082)
Gain on sale of property		(21,474)		(69,848)
Uncollectible revenue allowance		11,429		—
Distributions of income from real estate joint ventures and partnerships		18,418		9,508
Changes in accrued rent, accrued contract receivables and accounts receivable, net		(1,812)		20,361
Changes in unamortized lease costs and other assets, net		(1,925)		(11,791)
Changes in accounts payable, accrued expenses and other liabilities, net		(10,076)		(11,882)
Other, net		1,672		2,404
Net cash provided by operating activities		108,692		134,686
Cash Flows from Investing Activities:
Acquisition of real estate and land, net		(25,506)		(52,659)
Development and capital improvements		(78,258)		(95,895)
Proceeds from sale of property and real estate equity investments, net		58,448		194,394
Real estate joint ventures and partnerships - Investments		(4,391)		(24,355)
Real estate joint ventures and partnerships - Distribution of capital		17,520		2,340
Proceeds from investments		—		9,125
Other, net		(1,513)		3,019
Net cash (used in) provided by investing activities		(33,700)		35,969
Cash Flows from Financing Activities:
Principal payments of debt		(20,123)		(3,173)
Changes in unsecured credit facilities		12,000		(5,000)
Proceeds from issuance of common shares of beneficial interest, net		208		764
Repurchase of common shares of beneficial interest, net		(18,219)		—
Common share dividends paid		(73,994)		(101,641)
Debt issuance and extinguishment costs paid		(6)		(310)
Distributions to noncontrolling interests		(1,594)		(3,161)
Contributions from noncontrolling interests		1,150		326
Other, net		(1,439)		(1,521)
Net cash used in financing activities		(102,017)		(113,716)
Net (decrease) increase in cash, cash equivalents and restricted cash equivalents		(27,025)		56,939
Cash, cash equivalents and restricted cash equivalents at January 1		55,291		76,137
Cash, cash equivalents and restricted cash equivalents at June 30	$	28,266	$	133,076
Supplemental disclosure of cash flow information:
Cash paid for interest (net of amount capitalized of $4,573 and $6,204, respectively)	$	29,094	$	28,995
Cash paid for income taxes	$	793	$	1,456
Cash paid for amounts included in operating lease liabilities	$	1,555	$	1,565

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands, except per share amounts)


	Six Months Ended June 30, 2020
	Common				Net Income		Accumulated
	Shares of		Additional		Less Than		Other
	Beneficial		Paid-In		Accumulated		Comprehensive		Noncontrolling
	Interest		Capital		Dividends		Loss		Interests		Total
Balance, January 1, 2020	$	3,905	$	1,779,986	$	(74,293)	$	(11,283)	$	177,845	$	1,876,160
Net income						52,622				1,626		54,248
Shares repurchased and cancelled		(25)		(18,194)								(18,219)
Shares issued under benefit plans, net		10		5,767								5,777
Cumulative effect adjustment of accounting standards						(711)						(711)
Dividends paid – common shares ($.395 per share)						(50,935)						(50,935)
Distributions to noncontrolling interests										(1,301)		(1,301)
Contributions from noncontrolling interests										1,150		1,150
Other comprehensive income								76				76
Balance, March 31, 2020		3,890		1,767,559		(73,317)		(11,207)		179,320		1,866,245
Net income						11,368				1,009		12,377
Shares issued under benefit plans, net				413								413
Dividends paid – common shares ($.18 per share)						(23,059)						(23,059)
Distributions to noncontrolling interests										(293)		(293)
Other comprehensive income								49				49
Balance, June 30, 2020	$	3,890	$	1,767,972	$	(85,008)	$	(11,158)	$	180,036	$	1,855,732

Table of Contents

Nine Months Ended September 30, 2019
Common
Shares of
Beneficial
Interest Additional
Paid-In
Capital Net Income
Less Than
Accumulated
Dividends Accumulated
Other
Comprehensive
Loss Noncontrolling
Interests Total
Balance, January 1, 2019 $ 3,893
$ 1,766,993
$ (186,431 ) $ (10,549 ) $ 176,793
$ 1,750,699
Net income 49,666
1,588
51,254
Shares issued under benefit plans, net 10
8,141
8,151
Dividends paid – common shares ($.395 per share) (50,816 ) (50,816 )
Distributions to noncontrolling interests (1,572 ) (1,572 )
Contributions from noncontrolling interests 326
326
Other comprehensive income 69
69
Other, net 1,955
368
2,323
Balance, March 31, 2019 3,903
1,777,089
(187,581 ) (10,480 ) 177,503
1,760,434
Net income 83,809
1,711
85,520
Shares issued under benefit plans, net 1
1,231
1,232
Dividends paid – common shares ($.395 per share) (50,825 ) (50,825 )
Distributions to noncontrolling interests (1,589 ) (1,589 )
Other comprehensive income 78
78
Balance, June 30, 2019 3,904
1,778,320
(154,597 ) (10,402 ) 177,625
1,794,850
Net income 106,742
1,767
108,509
Shares issued under benefit plans, net 508
508
Dividends paid – common shares ($.395 per share) (50,826 ) (50,826 )
Distributions to noncontrolling interests (646 ) (646 )
Other comprehensive income 82
82
Balance, September 30, 2019 $ 3,904
$ 1,778,828
$ (98,681 ) $ (10,320 ) $ 178,746
$ 1,852,477


	Six Months Ended June 30, 2019
	Common				Net Income		Accumulated
	Shares of		Additional		Less Than		Other
	Beneficial		Paid-In		Accumulated		Comprehensive		Noncontrolling
	Interest		Capital		Dividends		Loss		Interests		Total
Balance, January 1, 2019	$	3,893	$	1,766,993	$	(186,431)	$	(10,549)	$	176,793	$	1,750,699
Net income						49,666				1,588		51,254
Shares issued under benefit plans, net		10		8,141								8,151
Dividends paid – common shares ($.395 per share)						(50,816)						(50,816)
Distributions to noncontrolling interests										(1,572)		(1,572)
Contributions from noncontrolling interests										326		326
Other comprehensive income								69				69
Other, net				1,955						368		2,323
Balance, March 31, 2019		3,903		1,777,089		(187,581)		(10,480)		177,503		1,760,434
Net income						83,809				1,711		85,520
Shares issued under benefit plans, net		1		1,231								1,232
Dividends paid – common shares ($.395 per share)						(50,825)						(50,825)
Distributions to noncontrolling interests										(1,589)		(1,589)
Other comprehensive income								78				78
Balance, June 30, 2019	$	3,904	$	1,778,320	$	(154,597)	$	(10,402)	$	177,625	$	1,794,850

See Notes to Condensed Consolidated Financial Statements.

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Nine Months Ended September 30, 2018
Common
Shares of
Beneficial
Interest Additional
Paid-In
Capital Net Income
Less Than
Accumulated
Dividends Accumulated
Other
Comprehensive
Loss Noncontrolling
Interests Total
Balance, January 1, 2018 $ 3,897
$ 1,772,066
$ (137,065 ) $ (6,170 ) $ 177,114
$ 1,809,842
Net income 146,824
2,145
148,969
Shares repurchased and cancelled (9 ) (8,099 ) (8,108 )
Shares issued under benefit plans, net 7
5,339
5,346
Cumulative effect adjustment of new accounting standards 5,497
(1,541 ) 3,956
Dividends paid – common shares ($.395 per share) (50,836 ) (50,836 )
Distributions to noncontrolling interests (884 ) (884 )
Contributions from noncontrolling interests 41
41
Other comprehensive loss (1,983 ) (1,983 )
Balance, March 31, 2018 3,895
1,769,306
(35,580 ) (9,694 ) 178,416
1,906,343
Net income 78,289
1,582
79,871
Shares repurchased and cancelled (11 ) (10,445 ) (10,456 )
Shares issued under benefit plans, net 2
2,096
2,098
Dividends paid – common shares ($.395 per share) (50,587 ) (50,587 )
Distributions to noncontrolling interests (3,709 ) (3,709 )
Contributions from noncontrolling interests 348
348
Other comprehensive income 86
86
Balance, June 30, 2018 3,886
1,760,957
(7,878 ) (9,608 ) 176,637
1,923,994
Net income 42,981
10,293
53,274
Shares issued under benefit plans, net 7
5,571
5,578
Dividends paid – common shares ($.395 per share) (50,687 ) (50,687 )
Distributions to noncontrolling interests (10,470 ) (10,470 )
Contributions from noncontrolling interests 935
935
Other comprehensive income 101
101
Other, net (4 ) (4 )
Balance, September 30, 2018 $ 3,893
$ 1,766,528
$ (15,584 ) $ (9,507 ) $ 177,391
$ 1,922,721

~~See Notes to Condensed Consolidated Financial Statements.~~

~~Table of Contents~~

WEINGARTEN REALTY INVESTORS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Business

Weingarten Realty Investors is a real estate investment trust (“REIT”) organized under the Texas Business Organizations Code. We currently operate, and intend to operate in the future, as a REIT.

We, and our predecessor entity, began the ownership of shopping centers and other commercial real estate in ~~1948~~.1948. Our primary business is leasing space to tenants in the shopping centers we own or lease. We also provide property management services for which we charge fees to either joint ventures where we are partners or other outside owners.

We operate a portfolio of neighborhood and community shopping centers, totaling approximately ~~33.0~~31.4 million square feet of gross leasable area that is either owned by us or others. We have a diversified tenant base, with our largest tenant comprising only ~~2.4%~~2.6% of base minimum rental revenues during the ~~first nine~~six months of ~~2019~~.2020. Total revenues generated by our centers located in Houston and its surrounding areas was ~~20.0%~~20.1% of total revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, and an additional ~~9.2%~~9.6% of total revenue was generated during this period from centers that are located in other parts of Texas. Also, in Florida and California, an additional ~~19.7%~~20.9% and ~~18.1%~~17.3%, respectively, of total revenue was generated during the ~~first nine~~six months of ~~2019.~~2020.

In March 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) a pandemic. The impact of COVID-19 continues to evolve and most cities and states have imposed measures to control its spread including social distancing and limiting group gatherings. These measures have created risks and uncertainties surrounding our operations and geographic concentrations. The pandemic has resulted in, at certain locations, the closure or limited operations of non-essential businesses and consumer/employee stay-at-home provisions. Given this continually evolving situation, the duration and severity of these matters and their ultimate effect are uncertain at this time.

Basis of Presentation

Our condensed consolidated financial statements include the accounts of our subsidiaries, certain partially owned real estate joint ventures or partnerships and variable interest entities (“VIEs”) which meet the guidelines for consolidation. All intercompany balances and transactions have been eliminated.

The condensed consolidated financial statements included in this report are unaudited; however, amounts presented in the condensed consolidated balance sheet as of December 31, ~~2018~~2019 are derived from our audited financial statements at that date. In our opinion, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year.

The condensed consolidated financial statements and notes are presented as permitted by Form 10-Q and certain information included in our annual financial statements and notes thereto has been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related notes for the year ended December 31, ~~2018~~.

2019.

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Such statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. We have evaluated subsequent events for recognition or disclosure in our condensed consolidated financial ~~statements.~~statements (see Note 15).

~~Leases~~

As part of our operations, we are primarily a lessor of commercial retail space. In certain instances, we are also a lessee, primarily of ground leases associated with our operations. Our contracts are reviewed to determine if they qualify as a lease. A contract is determined to be a lease when the right to obtain substantially all of the economic benefits and to direct the use of an identified asset is transferred to a customer over a defined period of time for consideration. During this review, we evaluate among other items, asset specification, substitution rights, purchase options, operating rights and control over the asset during the contract period.

We have elected accounting policy practical expedients, both as a lessor and a lessee, to not separate any nonlease components (primarily common area maintenance) within a lease contract for all classes of underlying assets (primarily real estate assets). We have determined to account for both the lease and nonlease components as a single component when the lease component is the predominate component of a contract. As a lessor, we have further determined that this policy will be effective only on a lease that has been classified as an operating lease and the revenue recognition pattern and timing is the same for both types of components. Therefore, Accounting Standards Codification ("ASC") No. 842, “Leases” will be applied to these lease contracts for both types of components. Additionally, for lessee leases, we have also elected not to apply the overall balance sheet recognition requirements to short-term leases.

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~~Significant judgments~~

Leases

In April 2020, the Financial Accounting Standards Board ("FASB") published a Staff Q&A regarding Accounting for Lease Concessions Related to the Effects of the COVID-19 pandemic. As the pandemic is expected to result in numerous tenant rent and ~~assumptions are inherent~~lease concessions, the intent of the publication was to provide relief to lessors in ~~not only determining if a contract contains~~assessing whether a lease ~~but also~~modification exists. The FASB publication provides for an election to bypass the ~~lease classification, terms, payments,~~lease-by-lease analysis and if needed, discount rates. Judgments include the nature of any options with the determination if they will be exercised, evaluation of implicit discount rates, assessment and consideration of “fixed” payments for straight-line rent revenue calculations and the evaluation of asset identification and substitution rights.

The determination of the discount rate used in a lease should be the incremental borrowing rate of the lease contract. For lessee leases, this rate is often not readily determinable as the lessor’s initial direct costs and expected residual value are at the end of the lease term and unknown. Therefore, as the lessee, our incremental borrowing rate will be used. Selected discount rates reflect rates that we would have to pay to borrow on a fully collateralized basis over a term similar to the lease. Additionally, we obtain lender quotes with similar terms and if not available, the asset type, risk free rates and financing spreads to account for ~~creditworthiness and collateral.~~

Our lessor leases are principally related to our shopping centers. We believe risk of an inadequate residual value of the leased asset upon the termination of these leases is low due to our ability to re-lease the space, the long-lived nature of our real estate assets and the propensity of real estate assets to hold their value over a long period of time.

~~Revenue Recognition~~

~~At the inception of a revenue producing contract, we determine if a contract qualifies as a~~ lease ~~and if not, then as a customer contract. Based on this determination, the appropriate GAAP is applied to the contract, including its revenue recognition.~~

~~Rentals, net~~

Rental revenue is primarily derived from operating leases and, therefore, is generally recognized on a straight-line basis over the term of the lease, which typically begins the date the tenant takes control of the space. Variable rental revenue consists primarily of tenant reimbursements of taxes, maintenance expenses and insurance, is subject to our interpretation of lease provisions and is recognized over the term of a lease as services are provided. Additionally, variable rental revenue based on a percentage of tenants’ sales is recognized only after the tenant exceeds its sales breakpoint. In circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease. Further, at the lease commencement date, we consider the collectability of a lease when determining revenue to be recognized. Prior to the adoption of ASC No. 842, rental revenues were recognized under ASC No. 840, “Leases.”

~~Other~~

Other revenue consists of both customer contract revenue and income from contractual agreements with third parties or partially owned real estate joint ventures or partnerships, which do not meet the definition of a lease or a customer contract. Revenues which do not meet the definition of a lease or customer contract are recognized as the related services are performed under the applicable agreement.

~~Table of Contents~~

We have identified primarily three types of customer contract revenue: (1) management contracts with partially-owned real estate joint ventures or partnerships or third parties, (2) licensing and occupancy agreements and (3) certain non-tenant contracts. At contract inception, we assess the services provided in these contracts and identify any performance obligations that are distinct. To identify the performance obligation, we consider all services, whether explicitly stated or implied by customary business practices. We have identified the following substantive services, which may or may not be included in each contract type, that represent performance obligations:



~~Contract Type~~	~~Performance Obligation Description~~	~~Elements of Performance Obligations~~	~~Payment Timing~~
~~Management Agreements~~	• Management and asset management services • Construction and development services • Marketing services	• Over time • Right to invoice • Long-term contracts	~~Typically monthly or quarterly~~
	• Leasing and legal preparation services • Sales commissions	• Point in time • Long-term contracts
~~Licensing and Occupancy Agreements~~	~~• Rent of non-specific space~~	• Over time • Right to invoice • Short-term contracts	~~Typically monthly~~
	~~• Set-up services~~	• Point in time • Right to invoice
~~Non-tenant Contracts~~	~~• Placement of miscellaneous items at our centers that do not qualify as a lease, i.e. advertisements, trash bins, etc.~~	• Point in time • Long-term contracts	~~Typically monthly~~
	~~• Set-up services~~	• Point in time • Right to invoice

~~We also assess collectability of the customer contract revenue prior to recognition. None of these customer contracts include a significant financing component.~~

~~Unamortized Lease Costs, net~~

Lease costs represent the initial direct costs incurred in origination, negotiation and processing of a lease agreement. Such costs include outside broker commissions and other independent third party costs, as well as internal leasing commissions paidconcessions, directly related to ~~completing a lease and are amortized over~~ the ~~life~~effects of the COVID-19 pandemic, consistent with how those concessions would be accounted for as though enforceable rights and obligations for those concessions existed in the original contract. Accordingly, an entity would not have to analyze each contract to determine whether those rights exist in the contract and can elect to apply or not apply lease onmodification guidance to those contracts. Such election is required to be applied consistently to leases with similar characteristics and circumstances. This election is available for COVID-19 related concessions that do not result in a ~~straight-line basis. Costs related to salaries and benefits, supervision, administration, unsuccessful origination efforts and other activities are charged to expense as incurred. Also included are~~substantial increase in ~~place lease costs which are amortized over~~ the ~~life~~rights of the ~~applicable~~lessor or the obligations of the lessee and the total payments required by the modified lease ~~term on a straight-line basis.~~

are substantially the same as or less than total payments required by the original lease. As of April 1, 2020, we elected to not apply lease modification guidance to those contracts. As such, any lease deferral concessions will remain recorded in Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net,

and rent abatements will be recorded as a reduction to Rentals, net in our consolidated financial statements. Subject to this guidance, as of June 30, 2020, we negotiated lease deferral concessions of $9.3 million and rent abatements of $.3 million (see Note 7 for additional information) that were granted to tenants related to the COVID-19 pandemic. Discussions are continuing with tenants as the effects of COVID-19 mandates evolve.

Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net

Receivables are relatively short-term in nature with terms due in less than one year. Receivables include rental revenue, amounts billed and currently due from customer contracts and receivables attributable to straight-line rental commitments. Accrued contract receivables includes amounts due from customers for contracts that do not qualify as a lease in which we earned the right to the consideration through the satisfaction of the performance obligation, but before the customer pays consideration or before payment is due. ~~Upon the adoption of ASC No. 842, individual~~Individual leases are assessed for collectability and upon the determination that the collection of rents is not probable, accrued rent and accounts receivables are reduced as an adjustment to rental revenues. Revenue from leases where collection is deemed to be less than probable is recorded on a cash basis until collectability is determined to be probable. Further, we assess whether operating lease receivables, at a portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends. An allowance for the uncollectible portion of the portfolio is recorded as an adjustment to rental revenues. Prior to the adoption of ASC No. 842, an allowance for the uncollectible portion of accrued rents and accounts receivable was determined based upon an analysis of balances outstanding, historical bad debt levels, tenant creditworthiness and current economic trends. Additionally, estimates of the expected recovery of pre-petition and post-petition claims with respect to tenants in bankruptcy are considered in assessing the collectability of the related receivables. Management’s estimate of the collectability of accrued rents and accounts receivable is based on the best information available to management at the time of evaluation.

The duration of the COVID-19 pandemic and its impact on our tenants’ operations, including, in some cases, their ability to resume operations once governmental and legislative restrictions are eased has caused uncertainty in our ongoing ability to collect rents when due. Considering the potential impact of these uncertainties, our collection assessment also took into consideration the type of retailer and current discussions with the tenants, as well as recent rent collection experience and tenant bankruptcies based on the best information available to management at the time of evaluation. For the three and six months ended June 30, 2020, we reduced rental revenues by $19.3 million and $28.7 million, respectively, due to lease related reserves and write-offs, which includes $4.8 million and $12.4 million, respectively, for straight-line rent receivables.

Restricted Deposits and Escrows

Restricted deposits are held or restricted for a specific use or in a qualified escrow account for the purposes of completing like-kind exchange transactions. Escrows consist of deposits held by third parties or lenders for a specific ~~use;~~use, including capital improvements, rental income and taxes.

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Our restricted deposits and escrows consist of the following (in thousands):

September 30,
2019 December 31,
2018
Restricted deposits ⁽¹⁾
$ 60,925
$ 8,150
Escrows 1,349
2,122
Total $ 62,274
$ 10,272

~~___________________~~


	June 30,		December 31,
	2020		2019
Restricted deposits	$	13,635	$	12,793
Escrows		428		1,017
Total	$	14,063	$	13,810

~~(1)~~~~The increase between the periods presented is primarily attributable to $45.5 million placed in a qualified escrow account for the purpose of completing like-kind exchange transactions.~~

Other Assets, net

Other assets include an asset related to the debt service guaranty (see Note 5 for further information), tax increment revenue bonds, right-of-use assets, investments ~~investments~~ held in a grantor trust, deferred tax assets, ~~prepaid expenses,~~ the net value of above-market leases, deferred debt costs associated with our revolving credit facilities and other miscellaneous receivables. Right-of-use assets are amortized to achieve the recognition of rent expense on a straight-line basis after adjusting for the corresponding lease liabilities’ interest over the lives of the leases. Investments held in a grantor trust ~~and investments in mutual funds~~ are adjusted to fair value at each period with changes included in our Condensed Consolidated Statements of Operations. Investments held to maturity are carried at amortized cost and are adjusted using the interest method for amortization of premiums and accretion of discounts. Our tax increment revenue bonds have been classified as held to maturity and are recorded at amortized cost offset by a recognized credit loss (see Note 16 for further information). Above-market leases are amortized as adjustments to rental revenues over terms of the acquired leases. Deferred debt costs, including those classified in debt, are amortized primarily on a straight-line basis, which approximates the effective interest rate method, over the terms of the debt. Other miscellaneous receivables ~~have~~are evaluated for credit risk and an allowance is established if there is an estimate for lifetime credit losses. These are based on available information, including historical loss information adjusted for current conditions and forecasts for future economic conditions. Prior to adoption of ASC No. 326, a reserve was applied to the carrying amount of other miscellaneous receivables when it ~~becomes~~became apparent that conditions ~~exist~~existed that ~~may~~would lead to our inability to fully collect the outstanding amounts due. Such conditions ~~include~~included delinquent or late payments on receivables, deterioration in the ongoing relationship with the borrower and other relevant factors. ~~We establish~~

Our tax increment revenue bonds have been classified as held to maturity and are recorded at amortized cost offset by a ~~reserve when expected~~recognized credit loss ~~conditions exist by reviewing~~(see Note 14 for further information). Due to the ~~borrower’s ability to generate revenues to meet debt service requirements and assessing the fair value of any collateral.~~

~~Other Liabilities, net~~

Other liabilities include non-qualified benefit plan liabilities, deferred revenue, lease liabilities, the net value of below-market leases and other miscellaneous liabilities. Lease liabilities are amortized to rent expense using therecognized credit loss, interest on these bonds is recorded at an effective interest rate ~~method, over the lease life. Below-market leases~~when cash payments are ~~amortized as adjustments to rental revenues over terms~~received. The bonds are evaluated for credit losses based on discounted estimated future cash flows. Any future receipts in excess of the ~~acquired leases.~~amortized basis will be recognized as revenue when received. The credit risk associated with the amortized value of these bonds is low as the bonds are earmarked for repayments from sales and property taxes associated with a government entity. At June 30, 2020, 0 credit allowance has been recorded.

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Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component consists of the following (in thousands):


				Defined
				Benefit
				Pension
	Gain on			Plan-
	Cash Flow			Actuarial
	Hedges			Loss			Total
Balance, December 31, 2019	$	(3,614)		$	14,897		$	11,283
Amounts reclassified from accumulated other comprehensive loss		221	⁽¹⁾		(297)	⁽²⁾		(76)
Net other comprehensive loss (income)		221			(297)			(76)
Balance, March 31, 2020		(3,393)			14,600			11,207
Amounts reclassified from accumulated other comprehensive loss		224	⁽¹⁾		(273)	⁽²⁾		(49)
Net other comprehensive loss (income)		224			(273)			(49)
Balance, June 30, 2020	$	(3,169)		$	14,327		$	11,158


				Defined
				Benefit
				Pension
	Gain on			Plan-
	Cash Flow			Actuarial
	Hedges			Loss			Total
Balance, December 31, 2018	$	(4,501)		$	15,050		$	10,549
Amounts reclassified from accumulated other comprehensive loss		219	⁽¹⁾		(288)	⁽²⁾		(69)
Net other comprehensive loss (income)		219			(288)			(69)
Balance, March 31, 2019		(4,282)			14,762			10,480
Amounts reclassified from accumulated other comprehensive loss		221	⁽¹⁾		(299)	⁽²⁾		(78)
Net other comprehensive loss (income)		221			(299)			(78)
Balance, June 30, 2019	$	(4,061)		$	14,463		$	10,402

(1)	This reclassification component is included in interest expense.

(2)	This reclassification component is included in the computation of net periodic benefit cost (see Note 11 for additional information).

Gain
on
Investments

Gain
on
Cash Flow
Hedges
Defined Benefit Pension Plan-Actuarial Loss Total
Balance, January 1, 2019 $ —
$ (4,501 ) $ 15,050
$ 10,549
Amounts reclassified from accumulated other comprehensive loss 219
(288 )
⁽¹⁾
(69 )
Net other comprehensive loss (income) —
219
(288 ) (69 )
Balance, March 31, 2019 —
(4,282 ) 14,762
10,480
Amounts reclassified from accumulated other comprehensive loss 221
(299 )
⁽¹⁾
(78 )
Net other comprehensive loss (income) —
221
(299 ) (78 )
Balance, June 30, 2019 —
(4,061 ) 14,463
10,402
Amounts reclassified from accumulated other comprehensive loss 223
(305 )
⁽¹⁾
(82 )
Net other comprehensive loss (income) —
223
(305 ) (82 )
Balance, September 30, 2019 $ —
$ (3,838 ) $ 14,158
$ 10,320

Gain
on
Investments

Gain
on
Cash Flow
Hedges
Defined Benefit Pension Plan-Actuarial Loss Total
Balance, January 1, 2018 $ (1,541 ) $ (7,424 ) $ 15,135
$ 6,170
Cumulative effect adjustment of accounting standards 1,541
1,541
Change excluding amounts reclassified from accumulated other comprehensive loss

(1,379 ) (1,379 )
Amounts reclassified from accumulated other comprehensive loss

3,633
⁽²⁾
(271 )
⁽¹⁾
3,362
Net other comprehensive loss (income) —
2,254
(271 ) 1,983
Balance, March 31, 2018 —
(5,170 ) 14,864
9,694
Amounts reclassified from accumulated other comprehensive loss 221

(307 )
⁽¹⁾
(86 )
Net other comprehensive loss (income) —
221
(307 ) (86 )
Balance, June 30, 2018 —
(4,949 ) 14,557
9,608
Amounts reclassified from accumulated other comprehensive loss 224
(325 )
⁽¹⁾
(101 )
Net other comprehensive loss (income) —
224
(325 ) (101 )
Balance, September 30, 2018 $ —
$ (4,725 ) $ 14,232
$ 9,507

~~_______________~~

~~(1)This reclassification component is included in the computation of net periodic benefit cost (see Note 12 for additional information).~~

~~(2)This reclassification component is included in interest expense.~~

Additionally, as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the net gain balance in accumulated other comprehensive loss relating to previously terminated cash flow interest rate swap contracts was ~~$3.8~~$3.2 million and ~~$4.5~~$3.6 million, respectively, which will be reclassified to net interest expense as interest payments are made on the originally hedged debt. Within the next 12 months, approximately $.9 million in accumulated other comprehensive loss is expected to be reclassified as a reduction to interest expense related to our interest rate contracts.

~~Table of Contents~~

~~Reclassifications~~

We have reclassified prior years’ miscellaneous lease-related revenues identified during our implementation of Accounting Standard Update ("ASU") No. 2016-02, "Leases" of $.3 million and $1.0 million for the three and nine months ended September 30, 2018 to Rentals, net from Other revenue in our Condensed Consolidated Statements of Operations to conform to the current year presentation (see Note 2 for further information).

Note 2. Newly Issued Accounting Pronouncements

Adopted

In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, "Leases." This ASU was further updated by ASU No. 2018-01, "Land Easement Practical Expedient for Transition for Topic 842," ASU No. 2018-10, "Codification Improvements to Topic 842," ASU No. 2018-11, "Targeted Improvements for Topic 842," ASU No. 2018-20, "Narrow-Scope Improvements for Lessors" and ASU No. 2019-01, "Codification Improvements to Topic 842." These ASUs set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The ASUs require lessees to adopt a right-of-use asset approach that will bring substantially all leases onto the balance sheet, with the exception of short-term leases. The subsequent accounting for this right-of-use asset will be based on a dual-model approach, under which the lease will be classified as either a finance or an operating lease. The lessor accounting model under these ASUs is similar to current guidance, but certain underlying principles in the lessor model have been aligned with the new revenue recognition standard. A practical expedient was added for lessors to elect, by class of underlying assets, to account for lease and nonlease components as a single lease component if certain criteria are met. The provisions of these ASUs were effective for us as of January 1, 2019. We adopted this guidance as of January 1, 2019 and applied it on a modified retrospective approach.

~~Upon adoption, we applied the following practical expedients:~~

~~The transition method in which the application date of January 1, 2019 is the beginning of the reporting period that we first applied the new guidance.~~

The practical expedient package which allows an entity not to reassess (1) whether any expired or existing contracts are or contain leases; (2) the lease classification for expired or existing leases; and (3) initial direct costs for any existing leases.

~~The practical expedient which allows an entity not to reassess whether any existing or expired land easements that were not previously accounted for as a lease or if the contract contains a lease.~~

As an accounting policy election, a lessor may choose not to separate the nonlease components, by class of underlying assets, from the lease components and instead account for both types of components as a single component under certain conditions.

As an accounting policy election, a lessee may choose not to separate the nonlease components, by class of underlying assets, from the lease components and instead account for both types of components as a single component.

~~As an accounting policy election, a lessee may choose by class of the underlying asset, not to apply the recognition requirements to short-term leases.~~

~~The adoption resulted in the following changes as of January 1, 2019:~~

~~From the Lessor Perspective:~~

◦

Our existing leases will continue to be classified as operating leases, however, leases entered into or modified after January 1, 2019 may be classified as either operating or sales-type leases, based on specific classification criteria. We believe the majority of our leases will continue to be classified as operating leases, and all operating leases will continue to have a similar pattern of recognition as under current GAAP.

◦

Capitalization of leasing costs has been limited under the new ASU which no longer allows indirect costs to be capitalized. Therefore, indirect, internally-generated leasing and legal costs are no longer capitalized and are recorded in General and administrative expenses in our Condensed Consolidated Statement of Operations in the period of adoption prospectively. We continue to capitalize direct costs as defined within the ASU.

~~Table of Contents~~

◦

We are entitled to receive tenant reimbursements for operating expenses for common area maintenance (“CAM”). These ASUs have defined CAM reimbursement revenue as a nonlease component, which would need to be accounted for in accordance with Topic 606. However, we have applied the practical expedient for all of our real estate related leases, to account for the lease and nonlease components as a single, combined operating lease component as long as the nonlease component is not the predominate component of the combined components within a contract.

◦

We previously accounted for real estate taxes that are paid directly by the tenant on a gross basis in our consolidated financial statements. These ASUs have indicated that a lessor should exclude from variable payments, lessor costs paid by a lessee directly to a third party. Therefore, we have excluded any costs paid directly by the tenant from our revenues and expenses and will only include as variable payments those which are reimbursed to us by our tenants. Real estate taxes paid directly by our tenants was $1.1 million and $3.3 million for the three and nine months ended September 30, 2018, respectively.

~~From the Lessee Perspective:~~


◦	On January 1, 2019, we were the lessee under ground lease agreements for land underneath all or a portion of 12 centers and under 4 administrative office leases that we accounted for as operating leases. Also, we had 1 finance lease in which we were the lessee of 2 centers with a $21.9 million lease obligation.

We recognized right-of-use assets for our operating leases in Other Assets, along with corresponding lease liabilities in Other Liabilities on January 1, 2019 in the amounts of $44.2 million and $42.9 million, respectively, in the Condensed Consolidated Balance Sheet. The difference between the right-of-use assets and the lease liabilities is primarily associated with intangibles related to ground leases. For these existing operating leases, we continue to recognize a single lease expense for both our ground and office leases, currently included in Operating expenses and General and administrative expenses, respectively, in the Condensed Consolidated Statements of Operations.


◦	We continue to recognize our finance lease asset balance in Property and our finance lease liability in Debt in our Condensed Consolidated Balance Sheets. The finance lease charges a portion of the payment to both asset amortization and interest expense.

In June 2018, the FASB issued ASU No. 2018-07, "Improvements to Nonemployee Share-Based Payment Accounting." This ASU amends prior employee share-based payment guidance to include nonemployee share-based payment transactions for acquiring services or property. This ASU now aligns the determination of the measurement date, the accounting for performance conditions, and the accounting for share-based payments after vesting in addition to other items. The provisions of ASU No. 2018-07 were effective for us as of January 1, 2019 using a modified transition method upon adoption. The adoption of this ASU did not have a material impact to our consolidated financial statements.

~~Not Yet Adopted~~

In June 2016, the FASB issued ~~ASU~~Accounting Standard Update ("ASU") No. 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU was further updated by ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses," ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit ~~Losses" and~~Losses," ASU No. 2019-05, "Targeted Transition ~~Relief.~~Relief," ASU No. 2019-11, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses" and ASU No. 2020-02, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119.” These ASUs amend prior guidance on the impairment of financial instruments, and adds an impairment model that is based on expected losses rather than incurred losses with the recognition of an allowance based on an estimate of expected credit losses. The provisions of ASU No. 2016-13, as amended in subsequently issued amendments, ~~are~~were effective for us as of January 1, 2020.

~~We are in the process~~

Table of ~~evaluating the impact that the adoption of ASU 2016-13, as amended, will have on our consolidated financial statements and related disclosures.~~ Contents

In identifying all of our financial instruments covered under this guidance, the majority of our instruments result from operating leasing transactions, which are not within the scope of the new standard and are to remain governed by the recently issued leasing guidance and other previously issued guidance. ~~We do not believe~~Upon adoption at January 1, 2020, we recognized, using the ~~adoption~~modified retrospective approach, a cumulative effect for credit losses, which has decreased retained earnings and other assets by $.7 million, respectively. In addition, we evaluated controls around the implementation of this ~~standard~~ASU and have concluded there will ~~have a material~~be no significant impact toon our ~~consolidated financial statements.~~

~~Table of Contents~~

control structure.

In August 2018, the FASB issued ASU No. 2018-13, "Changes to the Disclosure Requirements for Fair Value Measurement." This ASU amends and removes several disclosure requirements including the valuation processes for Level 3 fair value measurements. The ASU also modifies some disclosure requirements and requires additional disclosures for changes in unrealized gains and losses included in other comprehensive income for recurring Level 3 fair value measurements and requires the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The provisions of ASU No. 2018-13 ~~are~~were effective for us as of January 1, 2020 using a prospective transition method for amendments effecting changes in unrealized gains and losses, significant unobservable inputs used to develop Level 3 fair value measurements and narrative description on uncertainty of measurements. The remaining provisions of the ASU ~~are~~were not applicable to ~~be applied retrospectively, and early~~us. The adoption ~~is permitted. Although we are still assessing the impact~~ of this ~~ASU's adoption, we do~~ASU did not ~~believe this ASU will~~ have a material impact to our consolidated financial statements.

Not Yet Adopted

In August 2018, the FASB issued ASU No. 2018-14, "Changes to the Disclosure Requirements for Defined Benefit Plans." This ASU clarifies current disclosures and removes several disclosures requirements including accumulated other comprehensive income expected to be recognized over the next fiscal year and amount and timing of plan assets expected to be returned to the employer. The ASU also requires additional disclosures for the weighted-average interest crediting rates for cash balance plans and explanations for significant gains and losses related to changes in the benefit plan obligation. The provisions of ASU No. 2018-14 are effective for us as of December 31, 2020 using a retrospective basis for all periods presented, and early adoption is permitted. Although we are still assessing the impact of this ASU’s adoption, we do not believe this ASU will have a material impact to our consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes." This ASU clarifies/simplifies current disclosures and removes several disclosures requirements. Simplification includes franchise taxes based partially on income as an income-based tax; entities should reflect enacted tax law and rate changes in the interim period that includes the enactment date; and allowing entities to allocate consolidated tax amounts to individual legal entities under certain elections. The provisions of ASU No. 2019-12 are effective for us as of January 1, 2021, and early adoption is permitted. Although we are still assessing the impact of this ASU's adoption, we do not believe this ASU will have a material impact to our consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848).” This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in this ASU is optional and may be elected over time as reference rate reform activities occur. At January 1, 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The adoption of this portion of the ASU did not have a material impact to our consolidated financial statements. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

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Note 3. Property

Our property consists of the following (in thousands):

September 30,
2019 December 31,
2018
Land $ 864,336
$ 919,237
Land held for development 40,661
45,673
Land under development 52,887
55,793
Buildings and improvements 2,836,466
2,927,954
Construction in-progress 232,550
156,411
Total $ 4,026,900
$ 4,105,068


	June 30,		December 31,
	2020		2019
Land	$	934,629	$	911,521
Land held for development		41,078		40,667
Land under development		22,777		53,076
Buildings and improvements		3,016,131		2,898,867
Construction in-progress		187,722		241,118
Total	$	4,202,337	$	4,145,249

During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we sold 122 centers and other property. Aggregate gross sales proceeds from these transactions approximated ~~$375.1~~$33.5 million and generated gains of approximately ~~$144.0~~$21.5 million. Also, during the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we acquired 21 grocery-anchored shopping ~~centers~~center and other property with an aggregate gross purchase price of approximately ~~$55.1~~$43.0 million, and we invested ~~$81.8~~$49.2 million in new development projects.

At June 30, 2020, we classified 1 real estate center, totaling $25.9 million before accumulated depreciation, as held for sale, which was sold subsequent to quarter-end. At December 31, 2019, 0 real estate centers were classified as held for sale.

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Note 4. Investment in Real Estate Joint Ventures and Partnerships

We own interests in real estate joint ventures or limited partnerships and ~~have~~had tenancy-in-common interests in which we exercise significant influence, but do not have financial and operating control. We account for these investments using the equity method, and our interests ranged for the periods presented from 20% to 90% in both ~~2019~~2020 and ~~2018.~~2019. Combined condensed financial information of these ventures (at 100%) is summarized as follows (in thousands):

September 30,
2019 December 31,
2018
Combined Condensed Balance Sheets
ASSETS
Property $ 1,374,095
$ 1,268,557
Accumulated depreciation (325,426 ) (305,327 )
Property, net 1,048,669
963,230
Other assets, net 105,161
104,267
Total Assets $ 1,153,830
$ 1,067,497
LIABILITIES AND EQUITY
Debt, net (primarily mortgages payable) $ 265,455
$ 269,113
Amounts payable to Weingarten Realty Investors and Affiliates 12,057
11,732
Other liabilities, net 28,162
24,717
Total Liabilities 305,674
305,562
Equity 848,156
761,935
Total Liabilities and Equity $ 1,153,830
$ 1,067,497

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Combined Condensed Statements of Operations
Revenues, net $ 33,853
$ 33,626
$ 99,245
$ 100,322
Expenses:
Depreciation and amortization 7,914
7,925
23,409
24,164
Interest, net 2,336
2,974
7,286
9,478
Operating 6,035
6,001
17,820
18,074
Real estate taxes, net 4,891
4,728
13,948
14,861
General and administrative 110
253
422
573
Provision for income taxes 34
33
103
106
Total 21,320
21,914
62,988
67,256
Gain on dispositions —
4,052
2,009
9,491
Net income $ 12,533
$ 15,764
$ 38,266
$ 42,557


	June 30,		December 31,
	2020		2019
Combined Condensed Balance Sheets

ASSETS
Property	$	1,221,547	$	1,378,328
Accumulated depreciation		(287,561)		(331,856)
Property, net		933,986		1,046,472
Other assets, net		107,229		108,366
Total Assets	$	1,041,215	$	1,154,838

LIABILITIES AND EQUITY
Debt, net (primarily mortgages payable)	$	263,404	$	264,782
Amounts payable to Weingarten Realty Investors and Affiliates		9,511		11,972
Other liabilities, net		24,853		25,498
Total Liabilities		297,768		302,252
Equity		743,447		852,586
Total Liabilities and Equity	$	1,041,215	$	1,154,838


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Combined Condensed Statements of Operations
Revenues, net	$	26,817	$	32,877	$	60,556	$	65,392
Expenses:
Depreciation and amortization		8,902		7,646		17,664		15,495
Interest, net		2,334		2,491		4,752		4,950
Operating		5,462		5,685		12,573		11,785
Real estate taxes, net		4,215		4,522		8,615		9,057
General and administrative		233		243		338		312
Provision for income taxes		34		36		70		69
Total		21,180		20,623		44,012		41,668
Gain on dispositions		2,090		1,474		46,789		2,009
Net income	$	7,727	$	13,728	$	63,333	$	25,733

Our investment in real estate joint ventures and partnerships, as reported in our Condensed Consolidated Balance Sheets, differs from our proportionate share of the ~~entities'~~entities’ underlying net assets due to basis differences, which arose upon the transfer of assets to the joint ventures. The net positive basis differences, which totaled ~~$7.8~~$11.1 million and ~~$5.2~~$9.0 million at ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, are generally amortized over the useful lives of the related assets.

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We recorded joint venture fee income of $1.1 million and $1.4 million included in Other revenue for the three months ended June 30, 2020 and 2019, respectively, and $2.7 million and $2.9 million for the six months ended June 30, 2020 and 2019, respectively. Additionally, as a result of COVID-19, for the three and six months ended June 30, 2020, our joint venture and partnerships have reduced revenues by $5.1 million and $5.9 million, respectively, due to lease related reserves and write-offs, which includes $1.7 million and $2.6 million, respectively, for straight-line rent receivables. Of these amounts for the three and six months ended June 30, 2020, our share totaled $1.7 million and $2.0 million, respectively, which includes $.4 million and $.7 million, respectively, for straight-line rent receivables. For additional information, see Note 1.

During 2020, we sold 2 centers and our interest in 2 centers, ranging from 20% to 50%, at an aggregate gross value of approximately $148.3 million, of which our share of the gain, included in equity earnings in real estate joint ventures and partnerships, totaled $23.4 million. Also during the six months ended June 30, 2020, we invested an additional $4.4 million in a 90% owned unconsolidated real estate joint venture for a mixed-use new development.

During 2019, a parcel of land was sold with gross sales proceeds of approximately $2.3 million, of which our share of the gain, included in equity earnings in real estate joint ventures and partnerships, totaled $1.1 million. In July 2019, a 51% owned unconsolidated real estate joint venture acquired a center with a gross purchase price of $52.6 million.

~~During 2018,~~ Also during 2019, we invested an additional $47.6 million in a ~~center was sold through a series of partial sales with gross sales proceeds of approximately $33.9 million, of which our share of the gain, included in equity earnings in~~90% owned unconsolidated real estate joint ~~ventures and partnerships, totaled $6.3 million.~~

venture for a mixed-use new development.

Note 5. Debt

Our debt consists of the following (in thousands):


	June 30,		December 31,
	2020		2019
Debt payable, net to 2038 ⁽¹⁾	$	1,652,064	$	1,653,154
Unsecured notes payable under credit facilities		12,000		—
Debt service guaranty liability		57,380		57,380
Finance lease obligation		21,750		21,804
Total	$	1,743,194	$	1,732,338

September 30,
2019 December 31,
2018
Debt payable, net to 2038 ⁽¹⁾
$ 1,654,075
$ 1,706,886
Unsecured notes payable under credit facilities —
5,000
Debt service guaranty liability 60,900
60,900
Finance lease obligation 21,828
21,898
Total $ 1,736,803
$ 1,794,684

~~_______________~~


(1)	At ~~September~~both June 30, 2020 and December 31, 2019, interest rates ranged from 3.3% to 7.0% at a weighted average rate of 3.9%~~. At December 31, 2018, interest rates ranged from 3.3% to 7.0% at a weighted average rate of 4.0%.~~ for both periods.

~~The allocation~~


	June 30,		December 31,
	2020		2019
As to interest rate (including the effects of interest rate contracts):
Fixed-rate debt	$	1,731,194	$	1,714,890
Variable-rate debt		12,000		17,448
Total	$	1,743,194	$	1,732,338
As to collateralization:
Unsecured debt	$	1,463,697	$	1,450,762
Secured debt		279,497		281,576
Total	$	1,743,194	$	1,732,338

Table of ~~total debt between fixed and variable-rate as well as between secured and unsecured is summarized below (in thousands):~~Contents

September 30,
2019 December 31,
2018
As to interest rate (including the effects of interest rate contracts):
Fixed-rate debt $ 1,719,311
$ 1,771,999
Variable-rate debt 17,492
22,685
Total $ 1,736,803
$ 1,794,684
As to collateralization:
Unsecured debt $ 1,453,817
$ 1,457,432
Secured debt 282,986
337,252
Total $ 1,736,803
$ 1,794,684

We maintain a ~~$500~~$500 million unsecured revolving credit facility, which was amended and extended on ~~March 30, 2016.~~December 11, 2019. This facility expires in March ~~2020,~~2024, provides for 2 consecutive six-month extensions upon our request, and borrowing rates that float at a margin over LIBOR plus a facility fee. At both ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, were 9082.5 and 15 basis points, respectively. The facility also contains a competitive bid feature that allows us to request bids for up to ~~$250 million~~.$250 million. Additionally, an accordion feature allows us to increase the facility amount up to $850 million.

Additionally, we have a $10 million unsecured short-term facility, which was amended and extended on ~~March 27, 2019,~~January 3, 2020, that we maintain for cash management purposes, which matures in March ~~2020.~~2021. At both ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the facility provided for fixed interest rate loans at a 30-day LIBOR rate plus a borrowing margin, facility fee and an unused facility fee of 125, 10, and 5 basis points, respectively.

~~Table of Contents~~

The following table discloses certain information regarding our unsecured notes payable under our credit facilities (in thousands, except percentages):


	June 30,			December 31,
	2020			2019
Unsecured revolving credit facility:
Balance outstanding	$	12,000		$	—
Available balance		486,068			497,946
Letters of credit outstanding under facility		1,932			2,054
Variable interest rate (excluding facility fee)		0.94	%		—	%
Unsecured short-term facility:
Balance outstanding	$	—		$	—
Variable interest rate (excluding facility fee)		—	%		—	%
Both facilities:
Maximum balance outstanding during the period ⁽¹⁾	$	497,000		$	5,000
Weighted average balance		146,489			123
Year-to-date weighted average interest rate (excluding facility fee)		1.0	%		3.3	%

September 30,
2019 December 31,
2018
Unsecured revolving credit facility:
Balance outstanding $ —
$ 5,000
Available balance 497,946
492,946
Letters of credit outstanding under facility 2,054
2,054
Variable interest rate (excluding facility fee) — % 3.3 %
Unsecured short-term facility:
Balance outstanding $ —
$ —
Variable interest rate (excluding facility fee) — % — %
Both facilities:
Maximum balance outstanding during the period $ 5,000
$ 26,500
Weighted average balance 165
1,096
Year-to-date weighted average interest rate (excluding facility fee) 3.3 % 2.9 %

(1)

At March 31, 2020, we drew down the available balance of our unsecured revolving credit facility to increase liquidity and preserve financial flexibility in light of the uncertainty regarding the COVID-19 pandemic on the markets at that time. During the three months ended June 30, 2020, we paid down the majority of the balance due to the stability of the financial markets and the availability to us of other sources of liquidity.

Related to a development project in Sheridan, Colorado, we have provided a guaranty for the payment of any debt service shortfalls until a coverage rate of ~~1.4~~x1.4x is met on tax increment revenue bonds issued in connection with the project. The bonds are to be repaid with incremental sales and property taxes and a public improvement fee (“PIF”) to be assessed on current and future retail sales and, to the extent necessary, any amounts we may have to provide under a guaranty. The incremental taxes and PIF are to remain intact until the earlier of the date the bond liability has been paid in full or 2040. Therefore, a debt service guaranty liability equal to the fair value of the amounts funded under the bonds was recorded. As of both ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, we had ~~$60.9~~$57.4 million outstanding for the debt service guaranty liability.

~~On July 1,~~

During the year ended December 31, 2019, we repaid a $50 million secured fixed-rate mortgage with a 7.0% interest rate from cash from our disposition proceeds.

~~During~~ ~~the year ended December 31, 2018, we prepaid, without penalty, our $200 million unsecured variable-rate term loan, swapped to a fixed rate of 2.5%, and~~ terminated 3 interest rate swap contracts that had an aggregate notional amount of $200 million, and we recognized a $3.4 million gain due to the probability that the related hedged forecasted transactions would no longer occur. ~~Additionally, during~~ ~~the year ended December 31, 2018, we paid at par $51.0 million of outstanding debt. These transactions resulted in a~~ ~~net gain upon their extinguishment of $.4 million, excluding the effect of the swap termination.~~

Various leases and properties, and current and future rentals from those leases and properties, collateralize certain debt. At ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~,2019, the carrying value of such assets aggregated ~~$.5 billion~~$492.6 million and ~~$.6 billion,~~$463.7 million, respectively. Additionally, at ~~September~~both June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, investments of $5.3 million included in Restricted Deposits and ~~$5.2 million, respectively,~~Escrows are held as collateral for letters of credit totaling $5.0 million.

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Scheduled principal payments on our debt (excluding $12.0 million outstanding under our revolving credit facility, $21.8 million of a finance lease obligation, ~~$(4.1)~~$(3.5) million net premium/(discount) on debt, ~~$(5.8)~~$(5.1) million of deferred debt costs, ~~$1.5~~$1.8 million of non-cash debt-related items, and ~~$60.9~~$57.4 million debt service guaranty liability) are due during the following years (in thousands):


2020 remaining	$	2,853
2021		18,795
2022		308,298
2023		348,207
2024		252,561
2025		294,232
2026		277,733
2027		53,604
2028		92,159
2029		917
Thereafter		9,518
Total	$	1,658,877

2019 remaining $ 1,960
2020 22,114
2021 18,434
2022 307,922
2023 347,815
2024 252,153
2025 293,807
2026 277,291
2027 38,288
2028 92,159
Thereafter 10,435
Total $ 1,662,378

Our various debt agreements contain restrictive covenants, including minimum interest and fixed charge coverage ratios, minimum unencumbered interest coverage ratios, minimum net worth requirements and maximum total debt levels. We are not aware of any non-compliance with our public debt and revolving credit facility covenants as of ~~September~~June 30, ~~2019~~.

~~Note 6. Lease Obligations~~

~~We are engaged in the operation of shopping centers, which are either owned~~2020; however, our continued compliance with these covenants depends on many factors and could be impacted by current or ~~with respect to certain shopping centers, operated under operating ground leases. These ground leases expire at various dates through~~ ~~2069~~ with renewal options ranging from five years to 20 years, which have been predominantly excluded from our lease liabilities, and in some cases, include options to purchase the underlying asset by either the lessor or lessee. Generally, our ground lease variable payments for real estate taxes, insurance and utilities are paid directly by us and are not a component of rental expense. Most of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions and also may include an amount based on a percentage of operating revenues or sublease tenant revenue. Space in our shopping centers is leased to tenants pursuant to agreements that generally provide for terms of 10 years or less and may include multiple options to extend the lease term in increments up to five years, for annual rentals subject to upward adjustments based on operating expense levels, sales volume, or contractual increases as defined in the lease agreements.

~~Also, we have~~ 2 ~~properties under a finance lease that consists of variable lease payments with a purchase option. The right-of-use asset~~future economic conditions, including those associated with ~~this finance lease at September 30, 2019 was $8.9 million. At December 31, 2018,~~ the related assets associated with a capital lease in buildings and improvements totaled $15.7 million, and the balance of accumulated depreciation was $14.1 million. Amortization of property under the finance lease is included in depreciation and amortization expense. Note that amounts prior to January 1, 2019 were accounted for under ASC No. 840.COVID-19 pandemic.

~~Table of Contents~~

~~A schedule of lease costs including weighted average lease terms and weighted-average discount rates is as follows (in thousands, except as noted):~~

Three Months Ended
September 30, 2019 Nine Months Ended
September 30, 2019
Lease cost:
Operating lease cost:
Included in Operating expense $ 761
$ 2,283
Included in General and administrative expense 80
208
Finance cost:
Amortization of right-of-use asset (included in Depreciation and Amortization) 46
129
Interest on lease liability (included in Interest expense, net) 410
1,231
Short-term lease cost —
44
Variable lease cost 72
206
Sublease income (included in Rentals, net) (6,858 ) (20,392 )
Total lease cost $ (5,489 ) $ (16,291 )

September 30, 2019
Weighted-average remaining lease term (in years):
Operating leases 41.7
Finance lease 4.3

Weighted-average discount rate (percentage):
Operating leases 4.9 %
Finance lease 7.5 %

A reconciliation of our lease liabilities on an undiscounted cash flow basis, which primarily represents shopping center ground leases, for the subsequent five years and thereafter ending December 31, as calculated as of September 30, 2019, is as follows (in thousands):

Operating Finance
Lease payments:
2019 remaining $ 570
$ 435
2020 2,696
1,744
2021 2,585
1,751
2022 2,576
1,759
2023 2,458
23,037
2024 2,158

Thereafter 97,187

Total $ 110,230
$ 28,726

Lease liabilities⁽¹⁾
43,100
21,828
Undiscounted excess amount $ 67,130
$ 6,898

~~___________________~~


~~(1)~~	~~Operating lease liabilities are included in Other Liabilities, and finance lease liabilities are included in Debt, net in our Condensed Consolidated Balance Sheet.~~

~~Table of Contents~~

Scheduled minimum rental payments as defined under ASC No. 840, under the terms of all non-cancelable operating leases in which we are the lessee, principally for shopping center ground leases, for the subsequent five years and thereafter ending December 31, as calculated as of December 31, 2018, were as follows (in thousands):

Operating Finance
Lease payments:
2019 $ 2,779
$ 1,642
2020 2,536
1,635
2021 2,334
1,627
2022 2,318
1,618
2023 2,283
22,878
Thereafter 99,302

Total $ 111,552
$ 29,400

Future undiscounted, sublease payments, applicable to the ground lease rentals, under the terms of all non-cancelable tenant leases, excluding estimated variable payments for the subsequent five years and thereafter ending December 31, as calculated as of September 30, 2019 and December 31, 2018, were as follows (in thousands):

September 30, 2019 December 31, 2018
Sublease payments:
Finance lease⁽¹⁾
$ 11,257
$ 14,382
Operating leases:
2019 remaining $ 6,033
$ 22,528
2020 23,454
20,903
2021 21,352
18,886
2022 19,579
17,245
2023 17,436
15,128
2024 12,255

Thereafter 36,572
43,439
Total $ 136,681
$ 138,129

~~___________________~~


~~(1)~~	~~The sublease payments related to our finance lease represents cumulative payments through the lease term ending in 2023.~~

Note 7.6. Common Shares of Beneficial Interest

We have a $200 million share repurchase plan ~~under which~~where we may repurchase common shares of beneficial interest ("common shares") from time-to-time in open-market or in privately negotiated purchases. The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors. The repurchase plan may be suspended or discontinued at any time, and we have no obligations to repurchase any amount of our common shares under the plan.

~~We did not repurchase any~~

During the six months ended June 30, 2020, .8 million common shares were repurchased at an average price of $21.47 per share, and 0 common shares were purchased during the ~~nine months~~year ended ~~September 30,~~December 31, 2019. At ~~September~~June 30, ~~2019~~2020 and as of the date of this filing, ~~$181.5~~$163.3 million of common shares remained available to be repurchased under this plan.

~~Table of Contents~~

Note 8.7. Leasing Operations

As a commercial real estate lessor, generally our leases are for terms of 10 years or less and may include multiple options, upon tenant election, to extend the lease term in increments up to five years. Our leases typically do not include an option to purchase. Tenant terminations prior to the lease end date occasionally results in a one-time termination fee based on the remaining unpaid lease payments including variable payments and could be material to the tenant. Many of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions. In addition, the majority of our leases provide for variable rental revenues, such as, reimbursements of real estate taxes, maintenance and insurance and may include an amount based on a percentage of the tenants’ sales.

~~Future undiscounted,~~ Also, rent abatements related to the COVID-19 pandemic of $.3 million were recorded as a reduction to variable lease payments for ~~tenant leases, excluding estimated variable payments, at September~~both the three and six months ended June 30, ~~2019 is as follows (in thousands):~~2020 (see Note 1 for additional information).

2019 remaining $ 82,090
2020 324,700
2021 277,508
2022 223,929
2023 177,033
2024 129,957
Thereafter 412,103
Total payments due $ 1,627,320

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~~Future minimum rental income as defined under ASC No. 840 from tenant leases, excluding estimated contingent rentals, at December 31, 2018 is as follows (in thousands):~~

2019 $ 347,476
2020 305,404
2021 253,269
2022 198,414
2023 151,538
Thereafter 473,416
Total payments due $ 1,729,517

Variable lease payments recognized in Rentals, net are as follows (in thousands):

Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019
Variable lease payments $ 28,132
$ 82,237


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Variable lease payments	$	24,084	$	26,175	$	50,961	$	54,105

Note 9.8. Supplemental Cash Flow Information

Cash, cash equivalents and restricted cash equivalents consists of the following (in thousands):

September 30, 2019 September 30, 2018
Cash and cash equivalents $ 124,406
$ 24,412
Restricted deposits and escrows (see Note 1) 62,274
22,369
Total $ 186,680
$ 46,781


	June 30,		June 30,
	2020		2019
Cash and cash equivalents	$	14,203	$	118,222
Restricted deposits and escrows (see Note 1)		14,063		14,854
Total	$	28,266	$	133,076

~~Table of Contents~~

Supplemental disclosure of non-cash transactions is summarized as follows (in thousands):

Nine Months Ended
September 30,
2019 2018
Accrued property construction costs $ 28,604
$ 9,081
Right-of-use assets exchanged for operating lease liabilities 43,729
—


	Six Months Ended
	June 30,
	2020		2019
Accrued property construction costs	$	11,880	$	9,800
Right-of-use assets exchanged for operating lease liabilities		448		43,258
Increase in debt, net associated with the acquisition of real estate and land		17,952		—

Note ~~10.~~9. Earnings Per Share

Earnings per common share – basic is computed using net income attributable to common shareholders and the weighted average number of shares outstanding – basic. Earnings per common share – diluted includes the effect of potentially dilutive securities. Earnings per common share – basic and diluted components for the periods indicated are as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerator:
Net income	$	12,377	$	85,520	$	66,625	$	136,774
Net income attributable to noncontrolling interests		(1,009)		(1,711)		(2,635)		(3,299)
Net income attributable to common shareholders – basic		11,368		83,809		63,990		133,475
Income attributable to operating partnership units		—		528		—		1,056
Net income attributable to common shareholders – diluted	$	11,368	$	84,337	$	63,990	$	134,531
Denominator:
Weighted average shares outstanding – basic		127,242		127,856		127,552		127,807
Effect of dilutive securities:
Share options and awards		861		847		899		841
Operating partnership units		—		1,432		—		1,432
Weighted average shares outstanding – diluted		128,103		130,135		128,451		130,080

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Numerator:
Net income $ 108,509
$ 53,274
$ 245,283
$ 282,114
Net income attributable to noncontrolling interests (1,767 ) (10,293 ) (5,066 ) (14,020 )
Net income attributable to common shareholders - basic 106,742
42,981

240,217

268,094
Income attributable to operating partnership units 528
—
1,584
1,584
Net income attributable to common shareholders - diluted $ 107,270
$ 42,981
$ 241,801
$ 269,678
Denominator:
Weighted average shares outstanding – basic 127,870
127,525
127,828
127,651
Effect of dilutive securities:
Share options and awards 835
792
839
809
Operating partnership units 1,432
—
1,432
1,432
Weighted average shares outstanding – diluted 130,137
128,317
130,099
129,892

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Anti-dilutive securities of our common shares, which are excluded from the calculation of earnings per common share – diluted, are as follows (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Operating partnership units —
1,432
—
—
Total anti-dilutive securities —
1,432
—
—


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2020	2019	2020	2019
Operating partnership units	1,432	—	1,432	—

Note ~~11.~~10. Share Options and Awards

During ~~2019~~,2020, we granted share awards incorporating both service-based and market-based measures to promote share ownership among the participants and to emphasize the importance of total shareholder return ~~("TSR"~~(“TSR”). The term of each grant varies depending upon the ~~participant's~~participant’s responsibilities and position within the Company. We categorize these share awards as either service-based share awards or market-based share awards. All awards were valued at the fair market value on the date of grant and earn dividends from the date of grant. Compensation expense is measured at the grant date and recognized over the vesting period. Generally, unvested share awards are forfeited upon the termination of the participant’s employment with us.

~~Table of Contents~~

The fair value of the market-based share awards was estimated on the date of grant using a Monte Carlo valuation model based on the following assumptions:


	Six Months Ended
	June 30, 2020
	Minimum		Maximum
Dividend yield	0.0	%	5.2	%
Expected volatility ⁽¹⁾	19.0	%	20.0	%
Expected life (in years)	N/A		3
Risk-free interest rate	0.0	%	1.6	%

Nine Months Ended
September 30, 2019
Minimum Maximum
Dividend yield 0.0 % 5.5 %
Expected volatility ⁽¹⁾
19.3 % 21.3 %
Expected life (in years) N/A
3
Risk-free interest rate 2.4 % 2.6 %

(1)	Includes the volatility of the FTSE NAREIT U.S. Shopping Center Index and Weingarten Realty Investors.

~~_______________~~

~~(1) Includes the volatility of the FTSE NAREIT U.S. Shopping Center Index and Weingarten Realty Investors.~~

A summary of the status of unvested share awards for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 is as follows:

Unvested
Share
Awards

Weighted
Average
Grant
Date Fair
Value
Outstanding, January 1, 2019 674,293
$ 30.26
Granted:
Service-based awards 177,755
28.58
Market-based awards relative to FTSE NAREIT U.S. Shopping Center
Index 80,848
30.20
Market-based awards relative to three-year absolute TSR 80,847
32.91
Trust manager awards 27,768
29.17
Vested (234,646 ) 32.14
Forfeited (5,119 ) 29.97
Outstanding, September 30, 2019 801,746
$ 29.56


		Weighted
		Average
	Unvested	Grant
	Share	Date Fair
	Awards	Value
Outstanding, January 1, 2020	801,346	$	29.56
Granted:
Service-based awards	144,640		30.19
Market-based awards relative to FTSE NAREIT U.S. Shopping Center Index	66,953		31.18
Market-based awards relative to three-year absolute TSR	66,952		21.29
Vested	(218,773)		34.07
Forfeited	(229)		29.07
Outstanding, June 30, 2020	860,889	$	28.00

As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~,2019, there was approximately ~~$2.6~~$2.7 million and ~~$1.8~~$2.1 million, respectively, of total unrecognized compensation cost related to unvested share awards, which is expected to be amortized over a weighted average of 1.9 years and ~~1.7~~1.8 years at ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019, respectively.

~~, respectively.~~Table of Contents

Note ~~12.~~11. Employee Benefit Plans

Defined Benefit Plan

We sponsor a noncontributory qualified retirement plan. The components of net periodic benefit cost for this plan are as follows (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Service cost $ 246
$ 319
$ 843
$ 976
Interest cost 499
666
1,538
1,505
Expected return on plan assets (776 ) (1,192 ) (2,514 ) (2,605 )
Amortization of net loss 305
325
892
903
Total $ 274
$ 118
$ 759
$ 779


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Service cost	$	305	$	272	$	578	$	597
Interest cost		397		564		677		1,039
Expected return on plan assets		(840)		(877)		(1,432)		(1,738)
Amortization of net loss		273		299		570		587
Total	$	135	$	258	$	393	$	485

The components of net periodic benefit cost other than the service cost component are included in Interest and Other Income (Expense), net in the Condensed Consolidated Statements of Operations.

~~Table of Contents~~

For both the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, we contributed $1.0 million to the qualified retirement plan. Currently, we do 0tnot anticipate making any additional contributions to this plan during ~~2019.~~

2020.

Defined Contribution Plans

Compensation expense related to our defined contribution plans was ~~$1.0~~$.9 million and ~~$.9~~$1.0 million for the three months ended ~~September~~June 30, 2020 and 2019, respectively, and ~~2018, and $3.0 million and $2.8~~$2.0 million for both the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018, respectively.~~

~~Note 13. Related Parties~~

2019.

~~Through our management activities and transactions with our real estate joint ventures and partnerships, we had accounts receivable of~~ ~~$.6 million~~ ~~and $.5 million outstanding as of~~ ~~September 30, 2019~~ ~~and~~ ~~December 31, 2018, respectively. We also had accounts payable and accrued expenses of~~ ~~$.3 million~~ ~~and $.7 million outstanding as of~~ ~~September 30, 2019~~ ~~and~~ ~~December 31, 2018~~, respectively. We recorded joint venture fee income included in Other revenue for the three months ended September 30, 2019 and 2018 of $1.9 million and $1.3 million, respectively, and $4.8 million and $4.6 million for the nine months ended ~~September 30, 2019~~ ~~and 2018, respectively.~~

Note ~~14.~~12. Commitments and Contingencies

Commitments and Contingencies

As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, we participated in 2 real estate ventures structured as DownREIT partnerships. We have operating and financial control over these ventures and consolidate them in our condensed consolidated financial statements. These ventures allow the outside limited partners to put their interest in the partnership to us, and we have the option to redeem the interest in cash or a fixed number of our common shares, at our discretion. We also participate in a real estate venture that has a property in Texas that allows its outside partner to put operating partnership units to us. We have the option to redeem these units in cash or a fixed number of our common shares, at our discretion. The aggregate redemption value of these interests was approximately ~~$42~~$27 million and ~~$36~~$45 million as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

As a REIT, we generally will not be subject to corporate level federal income tax on taxable income we distribute to our shareholders. As long as we distribute at least 90% of the taxable income of the REIT to our shareholders as dividends, we will not be taxed on the portion of our income we distribute as dividends unless we have ineligible transactions. As such, due to the magnitude of our dispositions during 2020, it is likely we will pay a special dividend near year-end in addition to our quarterly dividend; however, the amount of such dividend is not yet determinable.

As of ~~September~~June 30, ~~2019~~,2020, we have entered into commitments aggregating ~~$124.1~~$61.3 million comprised principally of construction contracts which are generally due in 12 to 36 months.

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We issue letters of intent signifying a willingness to negotiate for acquisitions, dispositions or joint ventures, as well as other types of potential transactions, during the ordinary course of our business. Such letters of intent and other arrangements are non-binding to all parties unless and until a definitive contract is entered into by the parties. Even if definitive contracts relating to the acquisition or disposition of property are entered into, these contracts generally provide the purchaser a time period to evaluate the property and conduct due diligence. The purchaser, during this time, will have the ability to terminate a contract without penalty or forfeiture of any deposit or earnest money. No assurance can be provided that any definitive contracts will be entered into with respect to any matter covered by letters of intent, or that we will consummate any transaction contemplated by a definitive contract. Additionally, due diligence periods for property transactions are frequently extended as needed. An acquisition or disposition of property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. Our risk is then generally extended only to any earnest money deposits associated with property acquisition contracts, and our obligation to sell under a property sales contract.

We are subject to numerous federal, state and local environmental laws, ordinances and regulations in the areas where we own or operate properties. We are not aware of any contamination which may have been caused by us or any of our tenants that would have a material effect on our condensed consolidated financial statements.

As part of our risk management activities, we have applied and been accepted into state sponsored environmental programs which will limit our expenses if contaminants need to be remediated. We also have an environmental insurance policy that covers us against third party liabilities and remediation costs.

While we believe that we do not have any material exposure to environmental remediation costs, changes in the law or new discoveries of contamination may result in additional liabilities to us.

Litigation

We are involved in various matters of litigation arising in the normal course of business. While we are unable to predict the amounts involved, our management and counsel are of the opinion that, when such litigation is resolved, any additional liability, if any, will not have a material effect on our condensed consolidated financial statements.

~~Table of Contents~~

Note ~~15.~~13. Variable Interest Entities

Consolidated VIEs:

At ~~September~~both June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, 8 ~~and 9~~ of our real estate joint ventures, ~~respectively,~~ whose activities primarily consisted of owning and operating 21 neighborhood/community shopping centers, were determined to be VIEs. Based on a financing agreement by 1 of our real estate joint ventures that has a bottom dollar guaranty, which is disproportionate to our ownership, we have determined that we are the primary beneficiary and have consolidated this joint venture. For the remaining real estate joint ventures, we concluded we are the primary beneficiary based primarily on our significant power to direct the ~~entities'~~entities’ activities without any substantive kick-out or participating rights.

A summary of our consolidated VIEs is as follows (in thousands):


	June 30,		December 31,
	2020		2019
Assets Held by VIEs	$	228,190	$	228,954
Assets Held as Collateral for Debt ⁽¹⁾		38,678		39,782
Maximum Risk of Loss ⁽¹⁾		29,784		29,784

September 30,
2019 December 31,
2018
Assets Held by VIEs $ 229,158
$ 225,388
Assets Held as Collateral for Debt ⁽¹⁾
40,937
40,004
Maximum Risk of Loss ⁽¹⁾
29,784
29,784

~~___________________~~


(1)	Represents the amount of debt and related assets held as collateral associated with the bottom dollar guaranty at 1 real estate joint venture.

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Restrictions on the use of these assets can be significant because they may serve as collateral for debt. Further, we are generally required to obtain our ~~partner's~~partner’s approval in accordance with the joint venture agreement for any major transactions. Transactions with these joint ventures onin our condensed consolidated financial statements have primarily been positive as demonstrated by the generation of net income and operating cash flows, as well as the receipt of cash distributions. We and our partners are subject to the provisions of the joint venture agreements which include provisions for when additional contributions may be required to fund operating cash shortfalls, development expenditures, ~~and~~ unplanned capital ~~expenditures.~~

expenditures and repayment of debts. For the six months ended June 30, 2020, $2.7 million in additional contributions were made to pay off an outstanding debt.

Unconsolidated VIEs:

At both ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, 2 unconsolidated real estate joint ventures were determined to be VIEs. We have determined that 1 entity was a VIE through the issuance of a secured loan, since the lender had the ability to make decisions that could have a significant impact on the success of the entity. Based on the associated agreements for the future development of a mixed-use project, we concluded that the other entity was a VIE, but we are not the primary beneficiary as the substantive participating rights associated with the entity are shared, and we do not have the power to direct the significant activities of the entity. Our analysis considered that all major decisions require unanimous member consent and those decisions include significant activities such as development, financing, leasing and operations of the entity.

A summary of our unconsolidated VIEs is as follows (in thousands):


	June 30,		December 31,
	2020		2019
Investment in Real Estate Joint Ventures and Partnerships, net ⁽¹⁾	$	131,632	$	128,361
Other Liabilities, net ⁽²⁾		7,179		7,735
Maximum Risk of Loss ⁽³⁾		34,000		34,000

September 30,
2019 December 31,
2018
Investment in Real Estate Joint Ventures and Partnerships, net ⁽¹⁾
$ 121,076
$ 76,575
Other Liabilities, net ⁽²⁾
6,765
6,592
Maximum Risk of Loss ⁽³⁾
34,000
34,000

~~___________________~~


(1)	The carrying amount of the investment represents our contributions to a real estate joint venture, net of any distributions made and our portion of the equity in earnings of the real estate joint venture. The increase between periods represents new development funding of a mixed-use project.


(2)	Includes the carrying amount of an investment where distributions have exceeded our contributions and our portion of the equity in earnings for a real estate joint venture.


(3)	The maximum risk of loss has been determined to be limited to our debt exposure for the real estate joint ventures. Additionally, our investment, including contributions and distributions, associated with a mixed-use project is disclosed in (1) above.

We and our partners are subject to the provisions of the joint venture agreements that specify conditions, including operating shortfalls, development expenditures and unplanned capital expenditures, under which additional contributions may be required. With respect to our future development of a mixed-used project, we anticipate future funding of approximately ~~$15~~$4.7 million through 2020.

~~Table of Contents~~

Note ~~16.~~14. Fair Value Measurements

Currently, the COVID-19 pandemic has created uncertainties surrounding the global economy and financial markets. As a result, the full magnitude of the pandemic and the ultimate effect upon the future of our fair value measurements are uncertain at this time. Any changes in fair value for financial instruments marked to fair value will have a direct impact to our financial statements, except for net changes in our investments held in grantor trust and its related obligations. Additionally, changes in fair values for financial instruments not marked to fair value will not have an impact to our financial statements unless plans change to sell or settle the instrument prior to its maturity.

Table of Contents

Recurring Fair Value Measurements:

Assets and liabilities measured at fair value on a recurring basis as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, aggregated by the level in the fair value hierarchy in which those measurements fall, are as follows (in thousands):


	Quoted Prices
	in Active
	Markets for		Significant
	Identical		Other		Significant
	Assets		Observable		Unobservable		Fair Value at
	and Liabilities		Inputs		Inputs		June 30,
	(Level 1)		(Level 2)		(Level 3)		2020
Assets:
Cash equivalents, primarily money market funds ⁽¹⁾	$	153					$	153
Restricted cash, primarily money market funds ⁽¹⁾		11,170						11,170
Investments, mutual funds held in a grantor trust ⁽¹⁾		37,314						37,314
Total	$	48,637	$	—	$	—	$	48,637
Liabilities:
Deferred compensation plan obligations	$	37,314					$	37,314
Total	$	37,314	$	—	$	—	$	37,314

(1)	For the three and six months ended June 30, 2020, a net gain of $5.1 million and a net loss of $(.9) million, respectively, was included in Interest and Other Income (Expense), net, of which $4.4 million and $(1.9) million represented an unrealized gain (loss), respectively.


	Quoted Prices
	in Active
	Markets for		Significant
	Identical		Other		Significant
	Assets		Observable		Unobservable		Fair Value at
	and Liabilities		Inputs		Inputs		December 31,
	(Level 1)		(Level 2)		(Level 3)		2019
Assets:
Cash equivalents, primarily money market funds ⁽¹⁾	$	28,330					$	28,330
Restricted cash, primarily money market funds ⁽¹⁾		9,916						9,916
Investments, mutual funds held in a grantor trust ⁽¹⁾		38,378						38,378
Total	$	76,624	$	—	$	—	$	76,624
Liabilities:
Deferred compensation plan obligations	$	38,378					$	38,378
Total	$	38,378	$	—	$	—	$	38,378

(1)

For the year ended December 31, 2019, a net gain of $9.4 million was included in Interest and Other Income, net, of which $6.7 million represented an unrealized gain. Included in these amounts for the three and six months ended June 30, 2019 was a net gain of $1.7 million and $5.2 million, respectively, of which $.9 million and $3.9 million, respectively, represented an unrealized gain.

Quoted Prices
in Active
Markets for
Identical
Assets
and Liabilities
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)
Fair Value at
September 30,
2019
Assets:
Cash equivalents, primarily money market funds, time deposits and commercial paper $ 108,895
$ 108,895
Restricted cash, primarily money market funds 10,337
10,337
Investments, mutual funds held in a grantor trust 35,740
35,740
Total $ 154,972
$ —
$ —
$ 154,972
Liabilities:
Deferred compensation plan obligations $ 35,740
$ 35,740
Total $ 35,740
$ —
$ —
$ 35,740

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Quoted Prices
in Active
Markets for
Identical
Assets
and Liabilities
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3) Fair Value at
December 31,
2018
Assets:
Cash equivalents, primarily money market funds $ 54,848
$ 54,848
Restricted cash, primarily money market funds 5,254
5,254
Investments, mutual funds held in a grantor trust 30,996
30,996
Investments, mutual funds 6,635
6,635
Total $ 97,733
$ —
$ —
$ 97,733
Liabilities:
Deferred compensation plan obligations $ 30,996
$ 30,996
Total $ 30,996
$ —
$ —
$ 30,996

~~Net gains~~

Nonrecurring Fair Value Measurements:

Investment in Real Estate Joint Ventures and ~~losses recognized~~Partnerships Impairments

Estimated fair values are determined by management utilizing the performance of each investment, the life and other terms of the investment, holding periods, market conditions, cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker valuation estimates, appraisals, bona fide purchase offers or the expected sales price of an executed sales agreement in accordance with our fair value measurements accounting policy. Market capitalization rates and market discount rates are determined by reviewing current sales of similar properties and transactions, and utilizing management’s knowledge and expertise in property marketing.

No assets were measured at fair value on ~~equity securities held~~a nonrecurring basis at ~~each period end were included~~June 30, 2020. Assets measured at fair value on a nonrecurring basis at December 31, 2019 aggregated by the level in ~~Interest and Other Income, net. For~~ the ~~three months ended September 30, 2019 and 2018, this included a net gain of $1.1 million and $1.2 million, respectively, of~~fair value hierarchy in which $.2 million and $.8 million, respectively, represented an unrealized gain. For the nine months ended September 30, 2019 and 2018, this included a net gain of $6.3 million and $3.9 million, respectively, of which $4.1 million and $.4 million, respectively, represented an unrealized gain.those measurements fall, are as follows (in thousands):


	Quoted Prices in
	Active Markets for		Significant
	Identical		Other		Significant
	Assets		Observable		Unobservable
	and Liabilities		Inputs		Inputs				Total Gains
	(Level 1)		(Level 2)		(Level 3)		Fair Value		(Losses) ⁽¹⁾
Investment in real estate joint ventures and partnerships⁽²⁾			$	1,830	$	24,154	$	25,984	$	(3,070)
Total	$	—	$	1,830	$	24,154	$	25,984	$	(3,070)

(1)	Total gains (losses) presented in this table relate to assets that were held by us at December 31, 2019.

(2)

In accordance with our policy of evaluating and recording impairments on the disposal of investments in real estate joint ventures and partnerships, investments with a carrying amount of $29.1 million were written down to a fair value of $26.0 million, resulting in a loss of $3.1 million, which was included in earnings for the fourth quarter of 2019. Management’s estimate of fair value of these investments were determined using a bona fide purchase offer for the Level 2 inputs, and see the quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements in the table below.

Fair Value Disclosures:

Unless otherwise described below, short-term financial instruments and receivables are carried at amounts, which approximate their fair values based on their highly-liquid nature, short-term maturities and/or expected interest rates for similar instruments.

~~Table of Contents~~

Schedule of our fair value disclosures is as follows (in thousands):

June 30, 2020

December 31, 2019

Fair Value

Using

Fair Value

Using

Fair Value

Significant

Using

Significant

Using

Other

Significant

Other

Significant

Observable

Unobservable

Observable

Unobservable

Carrying

Inputs

Carrying

Inputs

Value

(Level 2)

(Level 3)

Value

(Level 2)

(Level 3)

Other Assets:

Tax increment revenue bonds ⁽¹⁾

17,277

21,000

17,277

25,000

Debt:

Fixed-rate debt

1,731,194

1,799,226

1,714,890

1,787,663

Variable-rate debt

12,000

11,814

17,448

17,426

September 30, 2019 December 31, 2018
Carrying Value
Fair Value
Using
Significant
Other
Observable
Inputs
(Level 2)

Fair Value
Using
Significant
Unobservable
Inputs
(Level 3)
Carrying Value Fair Value
Using
Significant
Other
Observable
Inputs
(Level 2)
Fair Value
Using
Significant
Unobservable
Inputs
(Level 3)
Other Assets:
Tax increment revenue bonds⁽¹⁾
$ 20,009
$ 25,000
$ 20,009
$ 25,000
Investments, held to maturity⁽²⁾
250
$ 250
3,000
$ 2,988

Debt:
Fixed-rate debt 1,719,311
1,790,605
1,771,999
1,761,215
Variable-rate debt 17,492
16,972
22,685
23,131

~~_______________~~


(1)	At ~~September 30, 2019 and~~ December 31, ~~2018,~~2019, prior to the ~~credit loss balance~~adoption of ASC 326, the amortized cost basis was net of a previously recognized other-than-temporary impairment on our tax increment revenue bonds ~~was~~of $31.0 ~~million.~~million.


~~(2)~~	~~Investments held to maturity are recorded at cost. As of December 31, 2018, these investments had unrealized losses of $12 thousand.~~

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The quantitative information about the significant unobservable inputs used for our nonrecurring Level 3 fair value measurements as of December 31, 2019 reported in the above table, is as follows:


	Fair Value at
	December 31,				Range
	2019				Minimum		Maximum
Description	(in thousands)		Valuation Technique	Unobservable Inputs	2019		2019
Investment in real estate joint ventures and partnerships	$	24,154	Discounted cash flows	Discount rate	7.3	%	7.5	%
				Capitalization rate	5.8	%	8.0	%
				Noncontrolling interest discount			15.0	%

Note ~~17.~~15. Subsequent Events

COVID-19, which was characterized on March 11, 2020 by the World Health Organization as a pandemic, has resulted in a widespread health crisis, which has adversely affected international, national and local economies and financial markets, and has had an unprecedented effect on the commercial real estate industry. Given the evolution of the COVID-19 pandemic and the global responses to curb its spread, we are not able to estimate the effects of the COVID-19 pandemic on our results of operations, cash flows, financial condition, or liquidity for fiscal year 2020.

As of July 27, 2020, we negotiated with tenants an additional $8.5 million that will be deferred over the next several months. Also as of July 27, 2020, tenant rent collections for July, which includes base minimum rental revenues and escrows for CAM, real estate taxes and insurance, either directly or through our interest in real estate joint ventures or partnerships approximated 82%.

Subsequent to ~~September 30, 2019,~~quarter-end, we ~~acquired 1 grocery-anchored shopping center~~sold real estate assets with aaggregate gross ~~purchase price of $31.5~~sales proceeds totaling $42.6 million. ~~We anticipate that the purchase price of the recent acquisition will be allocated to land, building and other identifiable intangible assets and liabilities.~~

No impairment losses are anticipated with these dispositions.

*****

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The COVID-19 pandemic has resulted in a widespread health crisis, which has adversely affected international, national and local economies and financial markets generally, and has had an unprecedented negative effect on the commercial real estate industry. It also has contributed to the recent historic price fluctuations for oil and natural gas. The discussions below, including without limitation with respect to outlooks and liquidity, are subject to the future effects of the COVID-19 pandemic and the responses to curb its spread, and changes in energy prices, both of which continue to evolve. As such, as described in Part II, Item 1A entitled “Risk Factors,” it is uncertain as to the magnitude of the impact of the pandemic, including any fluctuations in energy prices, on our results of operations, cash flows, financial condition, or liquidity for fiscal year 2020 and beyond.

Forward-Looking Statements

This quarterly report on Form 10-Q, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. ~~As described in "Risk Factors" in our Annual Report on Form 10-K for the year ended~~ ~~December 31, 2018, factors~~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 and regional 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 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.~~investor, and (xiii) the impact of public health issues, such as the recent COVID-19 pandemic. Accordingly, there is no assurance that our expectations will be realized. For further discussion of the factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see Item 1A. "Risk Factors” in our Form 10-K for the year ended December 31, 2019 and in Part II, Item 1A of this Quarterly Report on Form 10-Q. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto and the comparative summary of selected financial data appearing elsewhere in this report. Historical results and trends which might appear should not be taken as indicative of future operations. Our results of operations and financial condition, as reflected in the accompanying condensed consolidated financial statements and related footnotes, are subject to management’s evaluation and interpretation of business conditions, retailer performance, changing capital market conditions and other factors which could affect the ongoing viability of our tenants.

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Executive Overview

Weingarten Realty Investors is a REIT organized under the Texas Business Organizations Code. We, and our predecessor entity, began the ownership of shopping centers and other commercial real estate in 1948. Our primary business is leasing space to tenants in the shopping centers we own or lease. Several of these centers are mixed-use properties that have both retail and residential components. We also provide property management services for which we charge fees to either joint ventures where we are partners or other outside owners.

We operate a portfolio of rental properties, primarily neighborhood and community shopping centers, totaling approximately ~~33.0~~31.4 million square feet of gross leasable area that is either owned by us or others. We have a diversified tenant base with our largest tenant comprising only ~~2.4%~~2.6% of base minimum rental revenues during the first ~~nine~~six months of ~~2019.~~

2020.

At ~~September~~June 30, ~~2019,~~2020, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of ~~170~~165 properties, which are located in 1716 states spanning the country from coast to coast.

We also owned interests in 23 parcels of land held for development that totaled approximately 11.9 million square feet at ~~September~~June 30, ~~2019.~~

2020.

We had approximately ~~3,700~~3,600 leases with 2,800 different tenants at ~~September~~June 30, ~~2019.~~2020. Rental revenue is primarily derived from operating leases with terms of 10 years or less, and may include multiple options, upon tenant election, to extend the lease term in increments up to five years. Many of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions. In addition, the majority of our leases provide for variable rental revenues, such as reimbursements of real estate taxes, maintenance and insurance and may include an amount based on a percentage of the tenants’ sales. Our anchor tenants are supermarkets, value-oriented apparel/discount stores and other retailers or service providers who generally sell basic necessity-type goods and services. Although there is a broad shift in shopping patterns, including internet shopping that continues to affect our tenants, we believe our anchor tenants, most of which have adopted omni-channel networks which help drive foot traffic, combined with convenient locations, attractive and well-maintained properties, high quality retailers and a strong tenant mix, should lessen the effects of these conditions and maintain the viability of our portfolio.

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The COVID-19 pandemic has dramatically impacted our business due largely to the extreme hardships facing our retailers. The retail industry has been impacted greatly due to a number of factors, including governmental and legislative mandates to temporarily close and/or limit the operations of non-essential businesses, as well as encouraging or mandating most employees work from home, as well as general economic conditions. While most states have embarked upon a re-opening of select businesses, including retailers and restaurants, the impact of these measures on the ability of our tenants to pay rent is indeterminable at this time, particularly as some areas are currently experiencing a resurgence of COVID-19. Many of our retailers have moved to include on-line sales with curbside pickup or delivery, including restaurants, apparel discounters and electronics. The grocery stores and other retailers with a grocery component that anchor the majority of our shopping centers remain strong in this environment with the only slow down being the availability of a healthy workforce. Although we encouraged many of our smaller tenants to apply for the federal loans being offered under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) program, the impact of these programs is also indeterminable at this time. Based on annualized base rents, including our share of interest in real estate joint ventures or partnerships, we have estimated that 44% and 19% of our tenants are designated as essential businesses and restaurants, respectively. Additionally, as of mid-July, approximately 95% of our tenants were open for business. During the second quarter of 2020, we experienced an increase in tenant fallout of approximately 400,000 square feet representing approximately $9.6 million in annualized base rents, either directly or through our interest in real estate joint ventures or partnerships. There has also been an increase in announced bankruptcies for the quarter that represents approximately 400,000 square feet representing approximately $9.0 million in annualized base rents, either directly or through our interest in real estate joint ventures or partnerships, of which 116,000 square feet and $3.2 million is included in tenant fallout amounts above. Accordingly, we continue to omit 2020 guidance due to the uncertainties surrounding the impact and duration of the pandemic.

Beginning in the second quarter of 2020, we began to finalize and record deferrals and, in limited instances, abatement agreements with our tenants to provide some relief to the tenants greatly impacted by the COVID-19 shut down. As of July 27, 2020, we have negotiated deferrals with tenants on approximately 860 leases, which represents nearly $17.8 million that will be deferred over the next several months. In addition, for the three and six months ended June 30, 2020, we have reduced rental revenues by $19.3 million and $28.7 million, respectively, due to lease related reserves and write-offs, which includes $4.8 million and $12.4 million, respectively, for straight-line rent receivables. As markets within our geographic footprint continue to reopen retail operations, our current expectation is that rent collections will trend upward throughout 2021; however, no assurances can be given that this will occur due to the uncertainties surrounding our tenants’ reopening and any resurgence of the pandemic and the governmental reaction to any resurgence. As of July 27, 2020, tenant billing data, which includes base minimum rental revenues and escrows for CAM, real estate taxes and insurance either directly or through our interest in real estate joint ventures or partnerships, was as follows:


	Percent of Annualized Base Rent		Percent of Cash Collections for the Three Months Ending June 30, 2020		Percent of Cash Collections for July 1, 2020 through July 27, 2020

Essential	44	%	92	%	94	%
Restaurant	19		69		71
Non-essential	37		63		73
Total Cash Collections	100	%	77		82
Deferrals			13		7
Abatements			1		0
Total Cash Collections and Other			91	%	89	%

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During the first quarter 2020, we drew down the available balance of our $500 million unsecured revolving credit facility to increase liquidity and preserve financial flexibility in light of the uncertainty surrounding the impact of COVID-19. During the second quarter 2020, we paid down $485 million under our unsecured revolving credit facility due to the then stabilization of the financial markets and our access to other sources of liquidity. Additionally, we reduced dividend payments for the second quarter to $.18 per share from $.395 per share to conserve liquidity. Due to the magnitude of our dispositions during 2020, it is also likely we will pay a special dividend near year-end; however, the amount of such dividend is not yet determinable. Absent a significant deterioration in cash collections as compared to those received in this quarter, we believe our cash flow from operations will meet our planned capital needs for the remainder of 2020 and 2021. Further, the ability to draw down under our revolving credit facility will provide ample liquidity for us to operate and maintain compliance with our debt covenants; however, no assurances can be given that this level of cash flow will occur due to the uncertainty in the duration and restrictions of the limitations in place for retailers.

Finally, most of our employees have been working remotely to stay healthy, support operations and in response to stay-at-home mandates or recommendations. Recent changes in Texas and other states stay-at-home mandates currently will allow our employees, who are not considered high risk, to return to the office subject to health and safety measures. Working remotely presents various challenges, including (but not all inclusive) concerns about productivity, connectivity, consumer privacy and IT security.

Our goal is to remain a leader in owning and operating top-tier neighborhood and community shopping centers in certain markets of the United States. Our strategic initiatives include: (1) owning quality shopping centers in preferred locations that attract strong tenants, (2) growing net income from our existing portfolio by increasing occupancy and rental rates, (3) raising net asset value and cash flow through quality acquisitions and new developments, ~~(2) maintaining a strong, flexible consolidated balance sheet and a well-managed debt maturity schedule, (3) growing net income from our existing portfolio by increasing occupancy and rental rates,~~ (4) continuously redeveloping our existing shopping centers to increase cash flow and enhance the value of the centers and (5) ~~owning quality shopping centers in preferred locations that attract~~maintaining a strong, ~~tenants.~~flexible consolidated balance sheet and a well-managed debt maturity schedule. We believe these initiatives will keep our portfolio of properties among the strongest in our sector. Due to current capitalization rates in the market along with the uncertainty of changes in interest rates and various other market conditions, we intend to continue to be very prudent in our evaluation of all new investment opportunities. We believe the pricing of assets that no longer meet our ownership criteria remains reasonably stable while the price of our common shares remains below our net asset value. Given these conditions, we have been focused on dispositions of properties with risk factors that impact our willingness to own them going forward, and although we intend to continue with this strategy subject to evolving market conditions, our dispositions ~~in 2019~~ are expected to ~~decrease as compared to the prior year, and we anticipate a further decrease~~be significantly lower in 2020. We intend to utilize the proceeds from dispositions to, among other things, fund acquisitions along with both new development and redevelopment projects.

As we discussed above, subject to evolving market conditions, we continuously recycle non-core operating centers that no longer meet our ownership criteria and that will provide capital for growth opportunities. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we disposed of real estate assets, which were owned by us either directly or through our interest in real estate joint ventures or partnerships, with our share of aggregate gross sales proceeds totaling ~~$361.9~~$88.4 million. We have ~~several~~approximately $74.8 million of dispositions currently under contracts or letters of intent, and we anticipate that our aggregate dispositions in 2019 could be up to $450 million depending on the occurrence and timing of the closings of such dispositions, but expect a decrease to a normalized level in 2020 less than $150 million;intent; however, there are no assurances that these transactions will close at such prices or at all.

~~Table~~ Subsequent to quarter-end, we sold two shopping centers for total proceeds of ~~Contents~~

We$42.6 million. For 2020, we expect the volume of dispositions will significantly decrease from those in 2019.

Subject to evolving market conditions, we intend to continue to ~~actively~~ seek acquisition properties that meet our return hurdles and to actively evaluate other opportunities as they enter the market. ~~Due~~Previously, due to the significant amount of capital available in the market, it has been difficult to participate at price points that meet our investment criteria. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we acquired ~~three~~one grocery-anchored shopping ~~centers~~center and other property, ~~one of which is in a 51% unconsolidated real estate joint venture,~~ adding ~~327,000~~78,000 square feet to the portfolio with ~~our share of the~~an aggregate gross purchase price totaling ~~$81.9 million. Subsequent to September 30, 2019, we acquired one grocery-anchored shopping center with a gross purchase price of $31.5~~$43.0 million. For ~~2019,~~2020, we ~~expect~~will continue to ~~complete~~look for acquisition ~~investments in the range of $175 million~~investments; however, during this current environment, even if we were to ~~$275 million; however,~~find transactions, there are no assurances that ~~these transactions will close at such prices or at all.~~we would proceed with closing the transaction.

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We intend to continue to focus on identifying new development projects as another source of growth, as well as continue to look for redevelopment opportunities. The opportunities for additional new development projects are limited at this time primarily due to a lack of demand for new retail space. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we invested ~~$116.1~~$47.5 million in two mixed-use new development projects ~~in the Washington D.C. area~~ that are partially or wholly owned and a 30-story, high-rise residential tower at our River Oaks Shopping Center in Houston, Texas, and we invested ~~$15.3~~$5.8 million in 10 redevelopment projects that were partially or wholly owned. Effective January 1, 2019, we stabilized the development in Seattle, Washington, moving it to our operating property portfolio, which added 62,427 square feet to the portfolio at an estimated cost per square foot of $490. Also during the ~~nine~~six months ended ~~September~~June 30, ~~2019, we~~2020, completed ~~eight~~ redevelopment projects ~~which~~ added approximately ~~101,000~~142,000 square feet to the portfolio with an incremental investment totaling ~~$26.3~~$23.1 million. For ~~2019,~~2020, we expect these developments to ~~invest in new development and redevelopments in~~proceed as planned; however, no assurance can be given due to the ~~range~~impact of ~~$175 million to $225 million, but we can give no assurances that this will actually occur.~~

the pandemic.

We strive to maintain a strong, conservative capital structure which should provide ready access to a variety of attractive long and short-term capital sources. We carefully balance lower cost, short-term financing with long-term liabilities associated with acquired or developed long-term assets. WeSubject to evolving market conditions, we continue to look for transactions that will strengthen our consolidated balance sheet and further enhance our access to various sources of capital, while reducing our cost of capital. ~~During the third quarter, we repaid a $50 million secured fixed-rate mortgage with a 7% interest rate, which further enhances our future positioning to various sources of capital.~~ Due to the current variability in the capital markets, there can be no assurance that favorable pricing and accessibility will be available in the future. ~~Proceeds from our disposition program and cash generated from operations continue to further strengthen our balance sheet.~~

Operational Metrics

In assessing the performance of our centers, management carefully monitors various operating metrics of the portfolio. ~~As a result~~In light of ~~our strong leasing activity~~current circumstance and ~~low tenant fallout,~~the negative impact related to potentially uncollectible revenues, the operating metrics of our portfolio ~~remained strong~~performed fairly well through the first ~~nine~~six months of ~~2019 as we~~2020. We focused on ~~increasing rental rates~~collections and maintaining tenants to minimize the decline in same property net operating income ~~("SPNOI"~~(“SPNOI” and see Non-GAAP Financial Measures for additional information). due to the impact associated with the COVID-19 pandemic. Our portfolio delivered ~~strong~~the following operating ~~results with:~~results:

●

occupancy of 93.4% at June 30, 2020 showed a decrease from 94.8% in the prior year;

●

a decrease of 9.8% in SPNOI for the six months ended June 30, 2020 over the same period of 2019; and

●

rental rate increases of 13.2% for new leases and 8.4% for renewals during the six months ended June 30, 2020.

~~occupancy of 94.7% at September 30, 2019;~~

~~an increase of 2.9% in SPNOI that includes redevelopments for the three months ended September 30, 2019 over the same period of 2018; and~~

~~rental rate increases of 15.0% for new leases and 4.5% for renewals during the three months ended September 30, 2019.~~

Below are performance metrics associated with our signed occupancy, SPNOI growth and leasing activity on a pro rata basis:


	June 30,
	2020		2019
Anchor (space of 10,000 square feet or greater)	95.9	%	97.4	%
Non-Anchor	89.0	%	90.4	%
Total Occupancy	93.4	%	94.8	%


	Three Months Ended		Six Months Ended
	June 30, 2020		June 30, 2020
SPNOI ⁽¹⁾	(19.7)	%	(9.8)	%

September 30,
2019 2018
Anchor (space of 10,000 square feet or greater) 97.0 % 96.6 %
Non-Anchor 90.7 % 90.6 %
Total Occupancy 94.7 % 94.4 %

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Three Months Ended
September 30, 2019 Nine Months Ended
September 30, 2019
SPNOI Growth (including Redevelopments) ⁽¹⁾
2.9 % 3.4 %

~~_______________~~


(1)	See Non-GAAP Financial Measures for a definition of the measurement of SPNOI and a reconciliation to net income attributable to common shareholders within this section of Item 2.

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			Average		Average		Average Cost
			New		Prior		of Tenant		Change in
	Number	Square	Rent per		Rent per		Improvements		Base Rent
	of	Feet	Square		Square		per Square		on Cash
	Leases	('000's)	Foot ($)		Foot ($)		Foot ($)		Basis
Leasing Activity:
Three Months Ended June 30, 2020
New leases ⁽¹⁾	17	34	$	25.05	$	22.70	$	42.02	10.3	%
Renewals	109	464		19.92		18.62		—	7.0	%
Not comparable spaces	10	64
Total	136	562	$	20.27	$	18.90	$	2.90	7.3	%

Six Months Ended June 30, 2020
New leases ⁽¹⁾	51	142	$	26.29	$	23.22	$	53.40	13.2	%
Renewals	253	1,412		18.51		17.07		—	8.4	%
Not comparable spaces	32	148
Total	336	1,702	$	19.23	$	17.64	$	4.90	9.0	%

Number
of
Leases

Square
Feet
('000's)

Average
New
Rent per
Square
Foot ($)

Average
Prior
Rent per
Square
Foot ($)

Average Cost
of Tenant
Improvements
per Square
Foot ($)

Change in
Base Rent
on Cash
Basis
Leasing Activity:
Three Months Ended September 30, 2019
New leases ⁽¹⁾
45
123
$ 27.39
$ 23.81
$ 33.06
15.0 %
Renewals 108
412
20.61
19.72
—
4.5 %
Not comparable spaces 33
93

Total 186
628
$ 22.16
$ 20.66
$ 7.59
7.3 %

Nine Months Ended September 30, 2019
New leases ⁽¹⁾
123
343
$ 27.03
$ 23.46
$ 36.10
15.2 %
Renewals 374
1,858
16.99
16.34
—
4.0 %
Not comparable spaces 91
356

Total 588
2,557
$ 18.56
$ 17.45
$ 5.62
6.3 %

~~_______________~~


(1)	Average external lease commissions per square foot for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 were $5.57 and ~~$5.50, respectively.~~$6.39.

Changing shopping habits, driven by rapid expansion of internet-driven procurement, has led to increased financial problems for many retailers, which has had a negative impact on the retail real estate sector. We continue to monitor the effects of these trends, including the impact of retail customer spending over the long-term. We believe the desirability of our physical locations, the significant diversification of our portfolio, both geographically and by tenant base, and the quality of our portfolio, along with its leading retailers and service providers that sell primarily grocery and basic necessity-type goods and services, position us well to mitigate the impact of these changes. Additionally, most retailers have implemented omni-channel networks that integrate on-line shopping with in-store experiences that has further reinforced the need for bricks and mortar locations. Despite recent market disruption and tenant bankruptcies, we continue to believe there is long-term retailer demand for quality space within strong, strategically located centers.

~~While we anticipate occupancy in 2019 to increase slightly from 2018,~~

In 2020, we are experiencing some fluctuations due to ~~previously~~ announced bankruptcies and the repositioning of those spaces. ACurrently, the impact to occupancy is unknown due to the uncertainty and duration of the pandemic. Previously, a reduction in the availability of quality retail space, as well as continued retailer demand, contributed to the increase in overall rental rates on a same-space basis as we completed new leases and renewed existing leases; however, the magnitude of these increases ~~decreased~~declined in comparison to previous years due to, among other factors, a continued shift in negotiating leverage to the ~~tenant, especially on anchor spaces. We expect~~tenant. Given the uncertainty surrounding the impact of the pandemic, we are unclear of its impact to rental rates ~~to continue to increase~~ and the funding of tenant improvements and ~~allowances could increase; however, the~~allowances. The variability in the mix of leasing transactions as to size of space, market, use and other factors may impact the magnitude of these ~~increases,~~changes, both positively and negatively. Leasing volume is anticipated to fluctuate due to the uncertainty in tenant fallouts related to bankruptcies and tenant non-renewals. Our expectation is that SPNOI growth ~~including redevelopments~~ will ~~average between 2.5%~~decline in 2020 compared to ~~3.5% for 2019 assuming no significant tenant bankruptcies, although there are no assurances that this will occur.~~

previous years.

New Development/Redevelopment

At ~~September~~June 30, ~~2019,~~2020, we have two mixed-use projects in the Washington D. C. market and a 30-story, high-rise residential tower at our River Oaks Shopping Center in Houston that were in various stages of development and are partially or wholly owned. We have funded ~~$334.2~~$415.9 million through ~~September~~June 30, ~~2019~~2020 on these projects, and we estimate our aggregate net investment upon completion to be $485.0 million. ~~Overall,~~Due to the ~~average projected stabilized~~impact of COVID-19, we are currently unable to project a stabilization return ~~on investment~~ for these ~~multi-use properties, that include retail, office and residential components, is expected to approximate 5.5% upon completion.~~

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projects.

We have 10 redevelopment projects in which we plan to invest approximately ~~$71.4~~$55.1 million. ~~Upon completion,~~Realization of the ~~average projected~~ stabilized return ~~on our incremental investment on these redevelopment projects is expected~~may be longer than originally planned due to ~~be between 8.0% and 12.0%.~~the impact of COVID-19.

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We had approximately ~~$40.7~~$41.1 million in land held for development at ~~September~~June 30, ~~2019~~2020 that may either be developed or sold. While we ~~are~~were experiencing some interest from retailers and other market participants in our land held for development, opportunities for economically viable developments remain limited. We intend to continue to pursue additional development and redevelopment opportunities in multiple markets; however, finding the right opportunities remains challenging.

Acquisitions

Acquisitions are a key component of our long-term growth strategy. The availability of quality acquisition opportunities in the market remains sporadic in our targeted markets. ~~Intense competition, along with a decline in the volume~~Market pricing of ~~high-quality core properties on the market, has driven pricing to very high levels.~~retail real estate assets is highly uncertain under current economic conditions. We intend to remain disciplined in approaching these opportunities, pursuing only those that provide appropriate risk-adjusted returns.

Dispositions

Dispositions are also a key component of our ongoing management process where we selectively prune properties from our portfolio that no longer meet our geographic or growth targets. Dispositions provide capital, which may be recycled into properties that are high barrier-to-entry locations within high growth metropolitan markets, and thus have higher long-term growth potential. Additionally, proceeds from dispositions may be used to reduce outstanding debt, further deleveraging our consolidated balance sheet, to repurchase our common shares and/or debt, dependent upon market prices, or to fund acquisitions and both new development and redevelopment projects.

~~Summary of~~

Critical Accounting Policies

and Estimates

Our discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing ~~basis.~~basis using available information. We base our estimates on current economic conditions, historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Uncertainty in the current economic environment due to the recent outbreak of the COVID-19 has and may continue to significantly impact the judgments regarding estimates and assumptions utilized by management. In addition to the disclosure of our critical accounting policies and estimates which affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements is included in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 in Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations. There have been no~~Operations, we are adding the following due to significant changes in judgements related to ~~our critical accounting policies during 2019.~~COVID-19.

Revenue Recognition and Accrued Rent, Accrued Customer Contract Receivables and Accounts Receivable

Individual leases and contracts are assessed for collectability and upon the determination that the collection of rents over the life lease or contract is not probable, rental revenue and customer contract revenue is then converted to the cash basis and accrued rent and accounts receivables are reduced as an adjustment to rental or other revenues, respectively. An additional assessment is made at the portfolio level to determine whether operating lease receivables are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends. An allowance for the uncollectible portion of the portfolio is recorded as an adjustment to rental revenues.

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We review current economic considerations each reporting period, including the effects of tenant bankruptcies. Additionally with the uncertainties regarding COVID-19, our assessment also considers the type of retailer and current discussions with the tenants, as well as recent rent collection experience. Determining whether a lease or contract, as well as any related receivables, are appropriately assessed and valued requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. For the three and six months ended June 30, 2020, we reduced rental revenues by $19.3 million and $28.7 million, respectively, excluding the impact of any cash collections. The evaluations used in these analyses could result in incorrect estimates when determining values that could be material to our consolidated financial statements.

Results of Operations

Comparison of the Three Months Ended ~~September~~June 30, ~~2019~~2020 to the Three Months Ended ~~September~~June 30, ~~2018~~

2019

The following table is a summary of certain items in net income ~~from continuing operations~~ from our Condensed Consolidated Statements of Operations, which we believe represent items that significantly changed during the three months ended ~~September~~June 30, ~~2019~~2020 as compared to the same period in ~~2018~~:

Three Months Ended September 30,
2019 2018 Change % Change
Revenues $ 121,362
$ 128,790
$ (7,428 ) (5.8 )%
Depreciation and amortization 33,380
38,042
(4,662 ) (12.3 )
Real estate taxes, net 15,205
17,601
(2,396 ) (13.6 )
Impairment loss —
2,398
(2,398 ) (100.0 )
General and administrative expenses 8,432
5,971
2,461
41.2
Interest expense, net 13,820
15,996
(2,176 ) (13.6 )
Gain on sale of property 74,115
17,079
57,036
334.0
Equity in earnings of real estate joint
ventures and partnerships, net
5,698
8,022
(2,324 ) (29.0 )

2019:


	Three Months Ended June 30,
	2020		2019		Change		% Change
Revenues	$	98,135	$	122,660	$	(24,525)	(20.0)	%
Depreciation and amortization		37,627		34,967		2,660	7.6
Operating expenses		19,978		22,767		(2,789)	(12.3)
General and administrative expenses		12,920		8,880		4,040	45.5
Interest expense, net		15,776		14,953		823	5.5
Interest and other income, net		5,293		1,921		3,372	175.5
Gain on sale of property		7,898		52,061		(44,163)	(84.8)
Equity in earnings of real estate joint ventures and partnerships, net		3,428		6,665		(3,237)	(48.6)

Revenues

The decrease in revenues of ~~$7.4~~$24.5 million is attributable primarily to a decrease of $20.5 million for potentially uncollectible revenues associated primarily with the COVID-19 pandemic and the impact of $9.1 million related to dispositions. Partially offsetting this decrease is revenue from acquisitions of $5.1 million.

Depreciation and Amortization

The increase in depreciation and amortization of $2.7 million is attributable primarily to the ~~$12.8~~$4.8 million impact of ~~dispositions~~acquisitions and ~~$1.1~~new developments and an increase of $.3 million ~~of revenues for real estate taxes paid directly by~~from other capital activities at our ~~tenants in 2018, that can no longer be recorded due to the adoption of the new lease accounting standard on January 1, 2019. Offsetting this decrease, the~~ existing portfolio ~~including acquisition, new development~~ and redevelopment ~~properties, contributed $6.5 million resulting from increases in rental rates and changes in occupancy.~~

~~Depreciation and Amortization~~

centers, which is partially offset by dispositions of $2.4 million.

Operating Expenses

The decrease in ~~depreciation and amortization~~operating expenses of ~~$4.7~~$2.8 million is attributable primarily to a $.8 million reduction in expense associated deferred compensation (see General and Administrative Expenses below for additional information) and the impact of dispositions ~~between the respective periods.~~

~~Real Estate Taxes, net~~

~~The decrease in real estate taxes, net~~ of $2.4 million is attributable primarily to dispositions and $1.1 million of real estate taxes paid directly by our tenants in 2018, that can no longer be recorded due to the adoption of the new lease accounting standard on January 1, 2019.

~~Impairment Loss~~

~~The impairment loss in 2018 was associated with two centers that have been sold.~~

$1.5 million.

General and Administrative Expenses

The increase in general and administrative expenses of ~~$2.5~~$4.0 million is attributable primarily to ~~the~~a fair value increase of $4.5 million associated with assets held in a grantor trust related to deferred compensation, a reduction in ~~capitalized indirect leasing costs resulting from~~primarily travel and convention related expenses due to the ~~adoption~~COVID-19 pandemic and a reduction in personnel. Effective the first quarter of 2020, the allocation of the ~~new lease accounting standard update on January 1, 2019.~~fair value adjustments associated with the assets held in the grantor trust was changed to reflect the current expense classification of the employees in the deferred compensation plan; therefore, all changes to the liability will be recorded in general and administrative expense with no allocation to operating expense unless future employee expense classifications change.

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Interest Expense, net

Net interest expense ~~decreased $2.2~~increased $.8 million or ~~13.6%~~5.5%. The components of net interest expense were as follows (in thousands):

Three Months Ended
September 30,
2019 2018
Gross interest expense $ 16,703
$ 17,492
Amortization of debt deferred costs, net 892
869
Over-market mortgage adjustment (82 ) (81 )
Capitalized interest (3,693 ) (2,284 )
Total $ 13,820
$ 15,996

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	Three Months Ended
	June 30,
	2020		2019
Gross interest expense	$	17,003	$	17,429
Amortization of debt deferred costs, net		783		888
Over-market mortgage adjustment		(100)		(81)
Capitalized interest		(1,910)		(3,283)
Total	$	15,776	$	14,953

The ~~decrease~~increase in net interest expense is attributable primarily to ~~an increase~~a reduction in capitalized interest, which is offset by a reduction in gross interest expense. The reduction of ~~$1.4 million associated with an increase in~~capitalized interest is primarily attributable to the near completion of two of the residential portions of our new ~~development and redevelopment activities. Additionally, the~~developments. The decrease in gross interest expense ~~of $.8 million~~ is primarily attributable ~~primarily~~ to a reduction in the weighted average ~~debt outstanding~~interest rates due to the ~~pay down~~revolver between the respective periods, which is offset by an increase in the weighted average debt outstanding associated primarily with the activity of ~~debt with proceeds from dispositions and cash generated from operations.~~the revolver. For the three months ended ~~September~~June 30, ~~2019,~~2020, the weighted average debt outstanding was ~~$1.7~~$2.0 billion at a weighted average interest rate of ~~4.0%~~3.6% as compared to $1.8 billion outstanding at a weighted average interest rate of ~~4.0%~~4.1% in the same period of ~~2018.~~

2019.

Interest and Other Income, net

The increase of $3.4 million in interest and other income, net is attributable primarily to a fair value increase of $3.7 million associated with assets held in a grantor trust related to deferred compensation and a decrease in interest income of $.4 million associated with short-term and other investments.

Gain on Sale of Property

The ~~increase~~decrease of ~~$57.0~~$44.2 million in gain on sale of property is attributable to the disposition of ~~four centers~~one center and other property in the ~~third~~second quarter of ~~2019~~2020 as compared to ~~three~~five centers and other property in the same period of ~~2018.~~

2019.

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

The decrease of ~~$2.3~~$3.2 million in equity in earnings of real estate joint ventures and partnerships, net is attributable primarily to a reduction in earnings of $1.6 million associated with depreciation of a mixed-use project and adjustments of $1.8 million for potentially uncollectible amounts associated primarily with the ~~disposition of one center in~~COVID-19 pandemic between the ~~third quarter of 2018, which is partially offset by the acquisition of one center in the same period of 2019.~~

respective periods.

Comparison of the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~

2019

The following table is a summary of certain items in net income ~~from continuing operations~~ from our Condensed Consolidated Statements of Operations, which we believe represent items that significantly changed during the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 as compared to the same period in 2019:

~~2018~~:


	Six Months Ended June 30,
	2020		2019		Change		% Change
Revenues	$	209,487	$	245,798	$	(36,311)	(14.8)	%
Depreciation and amortization		74,283		68,939		5,344	7.8
Operating expenses		43,138		47,015		(3,877)	(8.2)
General and administrative expenses		15,227		18,461		(3,234)	(17.5)
Interest expense, net		30,378		30,242		136	0.4
Interest and other (expense) income, net		(535)		6,305		(6,840)	108.5
Gain on sale of property		21,474		69,848		(48,374)	(69.3)
Equity in earnings of real estate joint ventures and partnerships, net		30,525		12,082		18,443	152.6

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Nine Months Ended September 30,
2019 2018 Change % Change
Revenues $ 367,160
$ 403,328
$ (36,168 ) (9.0 )%
Depreciation and amortization 102,319
126,558
(24,239 ) (19.2 )
Real estate taxes, net 47,072
52,706
(5,634 ) (10.7 )
Impairment loss 74
2,398
(2,324 ) (96.9 )
General and administrative expenses 26,893
17,715
9,178
51.8
Interest expense, net 44,062
47,685
(3,623 ) (7.6 )
Interest and other income, net 7,409
4,735
2,674
56.5
Gain on sale of property 143,963
173,077
(29,114 ) (16.8 )

Revenues

The decrease in revenues of ~~$36.2~~$36.3 million is attributable primarily to a decrease of $29.4 million for potentially uncollectible revenues associated primarily with the COVID-19 pandemic and the impact of $18.9 million related to dispositions. Partially offsetting this decrease is revenue from acquisitions of $9.6 million, as well as changes in rental rates and occupancy at our existing portfolio, new developments and redevelopments, which contributed $2.4 million.

Depreciation and Amortization

The increase in depreciation and amortization of $5.3 million is attributable primarily to the ~~$34.4~~$8.8 million impact of ~~dispositions, a decrease~~acquisitions and new developments and an increase of ~~$9.0~~$1.5 million from the write-off of lease intangibles due to the termination of tenant leases, which includes $10.1 million below-market lease intangible in the second quarter of 2018, and $3.3 million of revenues for real estate taxes paid directly byother capital activities at our ~~tenants in 2018, that can no longer be recorded due to the adoption of the new lease accounting standard on January 1, 2019. Offsetting this decrease, the~~ existing portfolio ~~including acquisition, new development~~ and redevelopment ~~properties, contributed $10.5 million resulting from increases in rental rates and changes in occupancy.~~

~~Depreciation and Amortization~~

centers, which is partially offset by dispositions of $5.0 million.

Operating Expenses

The decrease in ~~depreciation and amortization~~operating expenses of ~~$24.2~~$3.9 million is attributable primarily to a $2.8 million reduction in expense associated deferred compensation (see General and Administrative Expenses below for additional information) and the ~~$13.1 million write-off~~impact of ~~an in-place lease intangible from the termination~~dispositions of ~~a tenant lease in the second quarter of 2018 and disposition activities of $11.5 million, which~~$2.8 million. Partially offsetting this decrease is ~~offset by~~ an increase in expense of ~~$.4~~$2.1 million ~~primarily~~ from acquisitions and ~~redevelopment centers.~~

~~Real Estate Taxes, net~~

The decrease in real estate taxes, net of $5.6 million is attributable primarily to dispositions and $3.3 million of real estate taxes paid directly by our tenants in 2018, that can no longer be recorded due to the adoption of the new lease accounting standard on January 1, 2019.

~~Impairment Loss~~

~~The decrease in impairment loss of $2.3 million is attributable primarily to losses recognized in 2018 associated with two centers that have been sold.~~

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mixed-use operations.

General and Administrative Expenses

The ~~increase~~decrease in general and administrative expenses of ~~$9.2~~$3.2 million is attributable primarily to a fair value reduction of $2.6 million associated with assets held in a grantor trust related to deferred compensation, (see General and Administrative Expenses above for additional information) a reduction in ~~capitalized indirect leasing costs of $7.7 million resulting from~~primarily travel and convention related expenses due to the ~~adoption of the new lease accounting standard update on January 1, 2019,~~COVID-19 pandemic and a ~~$1.7 million decrease to restricted share compensation~~reduction in ~~the first quarter of 2018 associated with unanticipated reductions in our share valuation.~~

personnel.

Interest Expense, net

Net interest expense ~~decreased $3.6~~increased $.1 million or ~~7.6%~~.4%. The components of net interest expense were as follows (in thousands):

Nine Months Ended
September 30,
2019 2018
Gross interest expense $ 51,522
$ 54,477
Gain on extinguishment of debt including related swap activity —
(3,759 )
Amortization of debt deferred costs, net 2,682
2,672
Over-market mortgage adjustment (245 ) (318 )
Capitalized interest (9,897 ) (5,387 )
Total $ 44,062
$ 47,685


	Six Months Ended
	June 30,
	2020		2019
Gross interest expense	$	33,559	$	34,819
Amortization of debt deferred costs, net		1,579		1,790
Over-market mortgage adjustment		(187)		(163)
Capitalized interest		(4,573)		(6,204)
Total	$	30,378	$	30,242

The ~~decrease~~increase in net interest expense is attributable primarily to a reduction in capitalized interest, which is offset by a reduction in gross interest expense. The reduction of capitalized interest is primarily attributable to the near completion of two of the residential portions of our new developments. The decrease in gross interest expense is primarily attributable to a reduction in the weighted average interest rates due to the revolver between the respective periods, which is offset by an increase in the weighted average debt outstanding ~~due to~~associated primarily with the ~~pay down~~activity of ~~debt with proceeds from dispositions and cash generated from operations.~~the revolver. For the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, the weighted average debt outstanding was ~~$1.8~~$1.9 billion at a weighted average interest rate of ~~4.0%~~3.7% as compared to ~~$1.9~~$1.8 billion outstanding at a weighted average interest rate of ~~4.0%~~4.1% in the same period of 2018. Additionally, net interest expense was impacted by an increase in capitalized interest of $4.5 million associated with an increase in new development and redevelopment activities, and a $3.8 million gain on extinguishment of debt in the first quarter of 2018, including the effect of a swap termination.

2019.

Interest and Other (Expense) Income, net

The increase of ~~$2.7~~$6.8 million in net interest and other (expense) income ~~net~~ is attributable primarily to a fair value ~~increase~~reduction of ~~$2.0~~$5.4 million ~~for~~associated with assets held in a grantor trust related to deferred compensation and ~~an increase of $1.1 million~~a decrease in interest income of $1.4 million associated with ~~our~~ short-term ~~cash~~and other investments.

Gain on Sale of Property

The decrease of ~~$29.1~~$48.4 million in gain on sale of property is attributable to the disposition of 12two centers and other property ~~during~~in the first ~~nine~~six months of ~~2019~~2020 as compared to 17eight centers and other property in the same period of ~~2018.~~2019.

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

The increase of $18.4 million in equity in earnings of real estate joint ventures and partnerships, net is attributable primarily to an increase in earnings of $22.4 million associated with disposition, mixed-used and acquisition activities between the respective periods. Partially offsetting this increase are adjustments totaling $2.1 million and $2.4 million for potentially uncollectible amounts associated primarily with the COVID-19 pandemic and depreciation of a mixed-use project, respectively.

Capital Resources and Liquidity

Our primary operating liquidity needs are paying our common share dividends, maintaining and operating our existing properties, paying our debt service costs, excluding debt maturities, and funding capital expenditures. ~~Under our 2019 business plan,~~Our anticipated cash flows from operating activities in 2020, as well as the availability of funds under our unsecured revolving credit facility are expected to meet these planned capital ~~needs.~~

needs; however, no assurance can be given due to the evolving impact of the pandemic.

The primary sources of capital for funding any debt maturities, acquisitions, new developments and redevelopments are our excess cash flow generated by our operating properties; credit facilities; proceeds from both secured and unsecured debt issuances; proceeds from equity issuances; and cash generated from the sale of property or interests in real estate joint ventures and partnerships and the formation of joint ventures. Amounts outstanding under the unsecured revolving credit facility are retired as needed with proceeds from the issuance of long-term debt, equity, cash generated from the disposition of properties and cash flow generated by our operating properties.

As of ~~September~~June 30, ~~2019,~~2020, we had available borrowing capacity of ~~$497.9~~$486.1 million under our unsecured revolving credit facility, and our debt maturities for the remainder of ~~2019~~2020 total ~~$2.0~~$2.9 million. As of ~~September~~June 30, ~~2019,~~2020, we had cash and cash equivalents available of ~~$124.4~~$14.2 million. Currently, we anticipate our ~~disposition~~operating, development and redevelopment activities ~~to continue and estimate between $350 million to $450 million~~will be met by these funds in ~~dispositions for 2019. Our disposition program has resulted~~2020. Even with the current uncertainty in ~~significant gains that may require~~ the ~~payment of a special dividend before January 31, 2020 in order to retain our REIT status.~~

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~~We believe net proceeds from planned~~ capital recycling, combined with our available capacity under the revolving credit and short-term borrowing facilities, will provide adequate liquidity to fund our capital needs, including acquisitions, redevelopment and new development activities and, if necessary, special dividends. In the event our capital recycling program does not progress as expected,markets, we believe other debt and equity alternatives are available to ~~us. Although external~~us based on recent market ~~conditions are not~~transactions within our ~~control, we do not currently foresee any impediments to our entering the capital markets if needed.~~

industry sector.

During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, our share of aggregate gross sales proceeds from dispositions of centers owned by us, either directly or through our interest in real estate joint ventures or partnerships, totaled ~~$361.9~~$88.4 million. Operating cash flows from assets disposed are included in net cash from operating activities in our Condensed Consolidated Statements of Cash Flows, while proceeds from these disposals are included as investing activities.

We have non-recourse debt secured by acquired or developed properties held in several of our real estate joint ventures and partnerships. At ~~September~~June 30, ~~2019,~~2020, off-balance sheet mortgage debt for our unconsolidated real estate joint ventures and partnerships totaled ~~$265.5~~$263.4 million, of which our pro rata ownership was ~~$87.2~~$86.1 million. Scheduled principal mortgage payments on this debt, excluding deferred debt costs and non-cash related items totaling ~~$(.6)~~$(.5) million, at 100% are as follows (in millions):

2019 remaining $ .7
2020 3.1
2021 173.0
2022 2.1
2023 2.2
Thereafter 85.0
Total $ 266.1


2020 remaining	$	1.6
2021		173.0
2022		2.1
2023		2.2
2024		2.3
Thereafter		82.7
Total	$	263.9

We generally have the right to sell or otherwise dispose of our assets except in certain cases where we are required to obtain our joint venture partners’ consent or a ~~third party~~lender’s consent for assets held in special purpose ~~entities that are 100% owned by us.~~entities.

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Investing Activities

Acquisitions

During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we acquired ~~three~~one grocery-anchored ~~shopping centers~~center and other property ~~one of which is in a 51% unconsolidated real estate joint venture,~~ with ~~our share of the~~an aggregate gross purchase price totaling ~~$81.9~~$43.0 million.

Dispositions

During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we sold 12six centers and other property, including real estate assets owned through our interest in unconsolidated real estate joint ventures and partnerships. Our share of aggregate gross sales proceeds from these transactions totaled ~~$361.9~~$88.4 million and ~~generated~~ our share of the gains ~~of approximately $144.9~~generated approximated $44.9 million.

New Development/Redevelopment

At ~~September~~June 30, ~~2019,~~2020, we had two mixed-use projects and a 30-story, high-rise residential tower at our River Oaks Shopping Center under development with approximately .2 million of total square footage for retail and ~~office space and~~ 962 residential units, that were partially or wholly owned. We have funded ~~$334.2~~$415.9 million through ~~September~~June 30, ~~2019~~2020 on these projects. Upon completion, we expect our aggregate net investment in these multi-use projects to be $485.0 ~~million. Effective January 1, 2019, we~~million; however, the timing of the realization of a stabilized ~~the development in Seattle, Washington, moving it to our operating property portfolio, which added 62,427 square feet~~return is currently unknown due to the ~~portfolio at an estimated cost per square foot~~uncertainties regarding the impact of ~~$490.~~

COVID-19.

At ~~September~~June 30, ~~2019,~~2020, we had 10 redevelopment projects in which we plan to invest approximately ~~$71.4~~$55.1 million. ~~Upon completion,~~Realization of the ~~average projected~~ stabilized return ~~on our incremental investment on these~~may be longer than originally planned due to the impact of COVID-19. During the six months ended June 30, 2020, completed redevelopment projects ~~is expected to be between 8.0% and 12.0%. During the nine months ended September 30, 2019, we completed eight redevelopment projects, which~~ added approximately ~~101,000~~142,000 square feet to the portfolio with an incremental investment totaling ~~$26.3~~$23.1 million.

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Capital Expenditures

Capital expenditures for additions to the existing portfolio, acquisitions, tenant improvements, new development, redevelopment and our share of investments in unconsolidated real estate joint ventures and partnerships are as follows (in thousands):

Nine Months Ended
September 30,
2019 2018
Acquisitions $ 81,034
$ —
New Development 109,513
71,326
Redevelopment 20,181
27,069
Tenant Improvements 23,586
20,805
Capital Improvements 13,673
16,696
Other 5,139
4,027
Total $ 253,126
$ 139,923


	Six Months Ended
	June 30,
	2020		2019
Acquisitions	$	25,506	$	52,659
New Development		50,778		76,998
Redevelopment		6,585		14,548
Tenant Improvements		16,224		16,509
Capital Improvements		7,338		8,822
Other		1,724		3,373
Total	$	108,155	$	172,909

The ~~increase~~decrease in capital expenditures is attributable primarily to ~~the acquisition of three centers~~a reduction in acquisitions and ~~the net increased activity from our~~ new development and redevelopment ~~centers.~~

activity.

For ~~2019,~~2020, we anticipate our acquisitions ~~to total approximately $175 million to $275 million.~~will decline over the prior year. Our new development and redevelopment investment for ~~2019~~2020 is estimated to be ~~approximately $175 million to $225 million.~~consistent or lower than 2019 expenditures as we complete our current development projects. For ~~2019,~~2020, capital and tenant improvements is generally expected to be consistent ~~with 2018~~or lower than 2019 expenditures. No assurances can be provided that our planned activities will occur. Further, we have entered into commitments aggregating ~~$124.1~~$61.3 million comprised principally of construction contracts, which are generally due in 12 to 36 months and anticipated to be funded with proceeds from the drawdown under our unsecured revolving credit ~~facility or through the use~~facility.

Table of ~~cash generated from operations.~~Contents

Capital expenditures for additions described above relate to cash flows from investing activities as follows (in thousands):

Nine Months Ended
September 30,
2019 2018
Acquisition of real estate and land $ 54,069
$ 1,265
Development and capital improvements 130,857
112,927
Real estate joint ventures and partnerships - Investments 68,200
25,731
Total $ 253,126
$ 139,923


	Six Months Ended
	June 30,
	2020		2019
Acquisition of real estate and land, net	$	25,506	$	52,659
Development and capital improvements		78,258		95,895
Real estate joint ventures and partnerships - Investments		4,391		24,355
Total	$	108,155	$	172,909

Capitalized soft costs, including payroll and other general and administrative costs, interest, insurance and real estate taxes, totaled ~~$16.9~~$9.5 million and ~~$11.6~~$11.0 million for the ~~nine~~six months ended ~~September~~June 30, 2020 and 2019, ~~and 2018,~~ respectively.

Financing Activities

Debt

Total debt outstanding was $1.7 billion at ~~September~~June 30, ~~2019~~2020 and consisted of ~~$17.5~~$12 million, which bears interest at variable rates, and $1.7 billion, which bears interest at fixed rates. Additionally, of our total debt, ~~$283.0~~$279 million was secured by operating centers while the remaining $1.5 billion was unsecured.

At ~~September~~June 30, ~~2019,~~2020, we have a $500 million unsecured revolving credit facility, which expires in March ~~2020~~2024 and provides borrowing rates that float at a margin over LIBOR plus a facility fee. At ~~September~~June 30, ~~2019,~~2020, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, were 9082.5 and 15 basis points, respectively. The facility also contains a competitive bid feature that allows us to request bids for up to $250 million. Additionally, an accordion feature allows us to increase the facility amount up to $850 million. As of ~~October 28, 2019,~~June 30, 2020, we had ~~no amounts~~$12 million outstanding, and the available balance was ~~$497.9~~$486 million, net of ~~$2.1~~$1.9 million in outstanding letters of credit.

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At ~~September~~June 30, ~~2019,~~2020, we have a $10 million unsecured short-term facility that we maintain for cash management purposes. The facility, which matures in March ~~2020,~~2021, provides for fixed interest rate loans at a 30-day LIBOR rate plus borrowing margin, facility fee and an unused facility fee of 125, 10, and 5 basis points, respectively. As of ~~October 28, 2019,~~June 30, 2020, we had no amounts outstanding under this facility.

For the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, the maximum balance and weighted average balance outstanding under both facilities combined were ~~$5.0~~$497 million and ~~$.2~~$146.5 million, respectively, at a weighted average interest rate of ~~3.3%~~1.0%.

~~On July 1, 2019, we repaid a $50 million secured fixed-rate mortgage with a 7.0% interest rate from cash from our disposition proceeds.~~

Our five most restrictive covenants, composed from both our public debt and revolving credit facility, include debt to asset, secured debt to asset, fixed charge, unencumbered asset test and unencumbered interest coverage ratios. We are not aware of any non-compliance with our public debt and revolving credit facility covenants as of ~~September~~June 30, ~~2019.~~

2020.

Our most restrictive public debt covenant ratios, as defined in our indenture and supplemental indenture agreements, were as follows at ~~September~~June 30, ~~2019:~~

2020:


Covenant	Restriction	Actual
~~Covenant~~	~~Restriction~~	~~Actual~~
Debt to Asset Ratio	Less than ~~60.0%~~60.0 %	~~35.9%~~ 35.9	%
Secured Debt to Asset Ratio	Less than ~~40.0%~~40.0 %	~~5.8%~~ 5.7	%
Fixed Charge Ratio	Greater than 1.5	~~4.6~~ 4.2
Unencumbered Asset Test	Greater than ~~150%~~150 %	~~299.9%~~ 297.2	%

~~Equity~~

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Equity

Our Board of Trust Managers has approved a reduced dividend payment for the ~~current~~third quarter ~~2019 dividend~~ of ~~$.395~~$.18 per ~~common share.~~share to maintain financial flexibility until we have better insight into the impact of the pandemic. Common share dividends paid totaled ~~$152.5~~$74.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. As disclosed in our Form 10-K for the year ended December 31, 2019, we had dividends designated for payment in 2020 of $121.2 million. In the event we do not pay dividends of this amount, the unpaid portion will be taxed at corporate income tax rates. Accordingly, we intend to pay an additional $47 million of dividends before the end of 2020. Further, it is likely that we may need to pay a special dividend near year-end to cover additional 2020 taxable income resulting from property sales. Our dividend payout ratio (as calculated as dividends paid on common shares divided by core funds from operations attributable to common shareholders - basic) for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 approximated ~~75.1%~~73.7% (see Non-GAAP Financial Measures for additional information). ~~Our disposition program has resulted in significant gains that may require the payment of a special dividend before January 31, 2020 in order to retain our REIT status.~~

We have a $200 million share repurchase plan. Under this plan, we may repurchase common shares from time-to-time in open-market or in privately negotiated purchases. The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors. The repurchase plan may be suspended or discontinued at any time, and we have no obligations to repurchase any amount of our common shares under the plan. During the six months ended June 30, 2020, we repurchased .8 million common shares at an average price of $21.47 per share. At ~~September~~June 30, ~~2019~~2020 and as of the date of this filing, ~~$181.5~~$163.3 million of common shares remained available to be repurchased under this plan.

We have an effective universal shelf registration statement, which expires in September ~~2020.~~2020, which we intend to replace prior to its expiration. We will continue to closely monitor both the debt and equity markets and carefully consider our available financing alternatives, including both public offerings and private placements.

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Contractual Obligations

We have debt obligations related to our mortgage loans and unsecured debt, including any draws on our credit facilities. We have shopping centers that are subject to ground leases where a third party owns and has leased the underlying land to us to construct and/or operate a shopping center. The table below excludes obligations related to our new development projects because such amounts are not fixed or determinable, and commitments aggregating ~~$124.1~~$61.3 million comprised principally of construction contracts, which are generally due in 12 to 36 months. The following table summarizes our primary contractual obligations as of ~~September~~June 30, ~~2019~~2020 (in thousands):


	Payments due by period
			Less than 1						More than 5
	Total		year		1 - 3 years		3 - 5 years		years
Mortgages and Notes Payable ⁽¹⁾
Unsecured Debt	$	1,646,372	$	41,847	$	404,064	$	603,995	$	596,466
Secured Debt		345,294		9,116		51,265		93,559		191,354
Lease Payments		108,511		1,119		5,401		4,804		97,187
Other Obligations ⁽²⁾		57,789		28,517		29,272
Total Contractual Obligations	$	2,157,966	$	80,599	$	490,002	$	702,358	$	885,007

Payments due by period
Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years
Mortgages and Notes Payable ⁽¹⁾

Unsecured Debt $ 1,674,414
$ 26,099
$ 106,750
$ 687,030
$ 854,535
Secured Debt 354,173
5,051
65,199
98,104
185,819
Lease Payments 110,230
570
5,281
5,034
99,345
Other Obligations ⁽²⁾
57,748
30,244
27,504

Total Contractual Obligations $ 2,196,565
$ 61,964
$ 204,734
$ 790,168
$ 1,139,699

~~_______________~~


(1)	Includes our finance lease obligation and principal and interest with interest on variable-rate debt calculated using rates at ~~September~~June 30, ~~2019.~~2020. Also, excludes a ~~$60.9~~$57.4 million debt service guaranty liability. See Note 5 for additional information.


(2)	Other obligations include income and real estate tax payments, commitments associated with our secured debt and other employee payments. Contributions to our retirement plan were fully funded for ~~2019,~~2020, and therefore are excluded from the above table. See Note 1211 for additional information.

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Related to a development project in Sheridan, Colorado, we have provided a guaranty for the payment of any debt service shortfalls on tax increment revenue bonds issued in connection with the project. The Sheridan Redevelopment Agency issued Series A bonds used for an urban renewal project, of which ~~$60.9~~$57.4 million remain outstanding at ~~September~~June 30, ~~2019.~~2020. The bonds are to be repaid with incremental sales and property taxes and a PIF to be assessed on current and future retail sales and, to the extent necessary, any amounts we may have to provide under a guaranty. The incremental taxes and PIF are to remain intact until the earlier of the payment of the bond liability in full or 2040. The debt associated with this guaranty has been recorded in our condensed consolidated financial statements as of ~~September~~June 30, ~~2019.~~

2020.

Off Balance Sheet Arrangements

As of ~~September~~June 30, ~~2019,~~2020, none of our off-balance sheet arrangements had a material effect on our liquidity or availability of, or requirement for, our capital resources. Letters of credit totaling ~~$7.0~~$6.9 million were outstanding at ~~September~~June 30, ~~2019.~~

2020.

We have entered into several unconsolidated real estate joint ventures and partnerships. Under many of these agreements, we and our joint venture partners are required to fund operating capital upon shortfalls in working capital. As operating manager of most of these entities, we have considered these funding requirements in our business plan.

Reconsideration events, including changes in variable interests, could cause us to consolidate these joint ventures and partnerships. We continuously evaluate these events as we become aware of them. Some triggers to be considered are additional contributions required by each partner and each partner’s ability to make those contributions. Under certain of these circumstances, we may purchase our partner’s interest. Our material unconsolidated real estate joint ventures are with entities which appear sufficiently stable; however, if market conditions were to continue to deteriorate and our partners are unable to meet their commitments, there is a possibility we may have to consolidate these entities. If we were to consolidate all of our unconsolidated real estate joint ventures, we would continue to be in compliance with our debt covenants.

~~Table of Contents~~

As of ~~September~~June 30, ~~2019,~~2020, one unconsolidated real estate joint venture was determined to be a VIE through the issuance of a secured loan, since the lender had the ability to make decisions that could have a significant impact on the profitability of the entity. Our maximum risk of loss associated with this VIE was limited to ~~$34.0~~$34 million at ~~September~~June 30, ~~2019.~~2020. Also at ~~September~~June 30, ~~2019,~~2020, another joint venture arrangement for the future development of a mixed-use project was determined to be a VIE. We are not the primary beneficiary as the substantive participating rights associated with the entity are shared, and we do not have the power to direct the significant activities of the entity. We anticipate future funding of approximately ~~$15~~$4.7 million associated with the mixed-use project through 2020.

Non-GAAP Financial Measures

Certain of our key performance indicators are considered non-GAAP financial measures. Management uses these measures along with our GAAP financial statements in order to evaluate our operating results. We believe 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 of real estate equity investments, 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. We calculate NAREIT FFO in a manner consistent with the NAREIT definition.

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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 us is comparable to similarly titled measures of other REITs.

We also present 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 unsuccessful 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.

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NAREIT FFO and Core FFO is calculated as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Net income attributable to common shareholders	$	11,368	$	83,809	$	63,990	$	133,475
Depreciation and amortization of real estate		37,520		34,732		73,995		68,475
Depreciation and amortization of real estate of unconsolidated real estate joint ventures and partnerships		4,322		2,789		8,119		5,741
Impairment of properties and real estate equity investments		—		—		44		74
Gain on sale of property, investment securities and interests in real estate equity investments		(7,903)		(51,605)		(21,477)		(70,554)
Gain on dispositions of unconsolidated real estate joint ventures and partnerships		(1,044)		(1,106)		(23,416)		(1,380)
Provision for income taxes ⁽¹⁾		—		44		—		44
Noncontrolling interests and other ⁽²⁾		(652)		(484)		(1,227)		(973)
NAREIT FFO – basic		43,611		68,179		100,028		134,902
Income attributable to operating partnership units		241		528		769		1,056
NAREIT FFO – diluted		43,852		68,707		100,797		135,958
Adjustments for Core FFO:
Contract terminations		—		—		340		—
Core FFO – diluted	$	43,852	$	68,707	$	101,137	$	135,958

FFO weighted average shares outstanding – basic		127,242		127,856		127,552		127,807
Effect of dilutive securities:
Share options and awards		861		847		899		841
Operating partnership units		1,432		1,432		1,432		1,432
FFO weighted average shares outstanding – diluted		129,535		130,135		129,883		130,080

NAREIT FFO per common share – basic	$	0.34	$	0.53	$	0.78	$	1.06

NAREIT FFO per common share – diluted	$	0.34	$	0.53	$	0.78	$	1.05

Core FFO per common share – diluted	$	0.34	$	0.53	$	0.78	$	1.05

(1)	The applicable taxes related to gains and impairments of operating and non-operating real estate assets.

(2)	Related to gains, impairments and depreciation on operating properties and unconsolidated real estate joint ventures, where applicable.

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Net income attributable to common shareholders $ 106,742
$ 42,981
$ 240,217
$ 268,094
Depreciation and amortization of real estate 33,143
37,784
101,618
125,659
Depreciation and amortization of real estate of unconsolidated real estate joint ventures and partnerships 2,933
3,035
8,674
9,480
Impairment of properties and real estate equity investments —
2,398
74
2,398
Gain on sale of property, investment securities and interests in real estate equity investments (74,093 ) (16,541 ) (144,647 ) (172,280 )
Gain on dispositions of unconsolidated real estate joint ventures and partnerships —
(2,714 ) (1,380 ) (6,296 )
(Benefit) provision for income taxes ⁽¹⁾
(187 ) 1,296
(143 ) 1,779
Noncontrolling interests and other ⁽²⁾
(533 ) 7,723
(1,506 ) 8,848
NAREIT FFO – basic ⁽³⁾
68,005
75,962
202,907
237,682
Income attributable to operating partnership units 528
528
1,584
1,584
NAREIT FFO – diluted ⁽³⁾
68,533
76,490
204,491
239,266
Adjustments for Core FFO:
(Benefit) provision for income taxes ⁽¹⁾
—
(1,494 ) —
(1,494 )
Loss (gain) on extinguishment of debt including related swap activity —
368
—
(3,090 )
Lease terminations —
—
—
(10,023 )
Other 10
(535 ) 10
(775 )
Core FFO – diluted $ 68,543
$ 74,829
$ 204,501
$ 223,884

FFO weighted average shares outstanding – basic 127,870
127,525
127,828
127,651
Effect of dilutive securities:
Share options and awards 835
792
839
809
Operating partnership units 1,432
1,432
1,432
1,432
FFO weighted average shares outstanding – diluted 130,137
129,749
130,099
129,892

NAREIT FFO per common share – basic $ .53
$ .60
$ 1.59
$ 1.86

NAREIT FFO per common share – diluted $ .53
$ .59
$ 1.57
$ 1.84

Core FFO per common share – diluted $ .53
$ .58
$ 1.57
$ 1.72

~~_______________~~

~~(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."~~

~~Table of Contents~~

Same Property Net Operating Income

We consider 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. We calculate this most useful measurement by determining our proportional share of SPNOI from all owned properties, including our share of SPNOI from unconsolidated joint ventures and partnerships, which cannot be readily determined under GAAP measurements and presentation. Although SPNOI is a widely used measure among REITs, there can be no assurance that SPNOI presented by us is comparable to similarly titled measures of other REITs. Additionally, we do 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 our legal claim to such items.

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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, we move new development and redevelopment properties once they have stabilized, which is typically upon attainment of 90% occupancy. A rollforward of the properties included in our same property designation is as follows:

Three Months Ended
September 30, 2019 Nine Months Ended
September 30, 2019
Beginning of the period 164
171
Properties added:
New Developments —
1
Properties removed:
Dispositions (5 ) (13 )
End of the period 159
159

~~Table of Contents~~


	Three Months Ended	Six Months Ended
	June 30, 2020	June 30, 2020
Beginning of the period	149	155
Properties removed:
Redevelopments	—	(2)
Dispositions	(1)	(5)
End of the period	148	148

We calculate SPNOI using net income attributable to common shareholders and adjusted for 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				Six Months Ended
	June��30,				June 30,
	2020		2019		2020		2019
Net income attributable to common shareholders	$	11,368	$	83,809	$	63,990	$	133,475
Add:
Net income attributable to noncontrolling interests		1,009		1,711		2,635		3,299
Provision for income taxes		343		484		515		661
Interest expense, net		15,776		14,953		30,378		30,242
Property management fees		829		683		1,907		1,556
Depreciation and amortization		37,627		34,967		74,283		68,939
Impairment loss		—		—		44		74
General and administrative		12,920		8,880		15,227		18,461
Other ⁽¹⁾		79		743		167		1,989
Less:
Gain on sale of property		(7,898)		(52,061)		(21,474)		(69,848)
Equity in earnings of real estate joint ventures and partnership interests, net		(3,428)		(6,665)		(30,525)		(12,082)
Interest and other (income) expense, net		(5,293)		(1,921)		535		(6,305)
Revenue adjustments ⁽²⁾		866		(3,060)		3,991		(6,279)
Adjusted income		64,198		82,523		141,673		164,182
Less: Adjusted income related to consolidated entities not defined as same property and noncontrolling interests		(5,831)		(8,965)		(10,760)		(17,607)
Add: Pro rata share of unconsolidated entities defined as same property		6,648		7,443		14,403		14,565
Same Property Net Operating Income	$	65,015	$	81,001	$	145,316	$	161,140

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Net income attributable to common shareholders $ 106,742
$ 42,981
$ 240,217
$ 268,094
Add:
Net income attributable to noncontrolling interests 1,767
10,293
5,066
14,020
Provision (benefit) for income taxes 21
(99 ) 682
1,368
Interest expense, net 13,820
15,996
44,062
47,685
Property management fees 657
722
2,213
2,219
Depreciation and amortization 33,380
38,042
102,319
126,558
Impairment loss —
2,398
74
2,398
General and administrative 8,432
5,971
26,893
17,715
Other ⁽¹⁾
836
910
2,825
1,928
Less:
Gain on sale of property (74,115 ) (17,079 ) (143,963 ) (173,077 )
Equity in earnings of real estate joint ventures and partnership interests, net (5,698 ) (8,022 ) (17,780 ) (19,333 )
Interest and other income, net (1,104 ) (1,847 ) (7,409 ) (4,735 )
Revenue adjustments ⁽²⁾
(4,775 ) (3,945 ) (11,054 ) (21,985 )
Adjusted income 79,963
86,321
244,145
262,855
Less: Adjusted income related to consolidated entities not defined as same property and noncontrolling interests (4,004 ) (12,819 ) (15,647 ) (42,536 )
Add: Pro rata share of unconsolidated entities defined as same property 8,600
8,664
25,509
25,363
Same Property Net Operating Income 84,559
82,166
254,007
245,682
Less: Redevelopment Net Operating Income (8,523 ) (6,994 ) (24,722 ) (21,122 )
Same Property Net Operating Income excluding Redevelopments $ 76,036
$ 75,172
$ 229,285
$ 224,560

~~___________________~~


(1)	Other includes items such as environmental abatement costs, demolition expenses and lease termination ~~fees and ground rent.~~fees.


(2)	Revenue adjustments consist primarily of straight-line rentals, lease cancellation income and fee income primarily from real estate joint ventures and partnerships.

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Newly Issued Accounting Pronouncements

See Note 2 to our condensed consolidated financial statements in Item 1 for additional information related to recent accounting pronouncements.

~~Table of Contents~~

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

We use fixed and floating-rate debt to finance our capital requirements. These transactions expose us to market risk related to changes in interest rates. Derivative financial instruments may be used to manage a portion of this risk, primarily interest rate contracts with major financial institutions. These agreements expose us to credit risk in the event of non-performance by the counter-parties. We do not engage in the trading of derivative financial instruments in the normal course of business. At ~~September~~June 30, ~~2019~~,2020, we had fixed-rate debt of ~~$1.7~~$1.7 billion,, and variable-rate debt of ~~$17.5 million~~.$12 million. In the event interest rates were to increase 100 basis points and holding all other variables constant, annual net income and cash flows for the following year would decrease by approximately ~~$.2~~$.1 million associated with our variable-rate debt. The effect of the 100 basis points increase would decrease the fair value of our variable-rate and fixed-rate debt by approximately ~~$.1~~$.4 million and ~~$79.7~~$69.3 million, respectively.

ITEM 4. Controls and Procedures

Under the supervision and with the participation of our principal executive officer and principal financial officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of ~~September~~June 30, ~~2019~~.2020. Based on that evaluation, our principal executive officer and our principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2019~~.

2020.

There ~~has~~have not been ~~no change to~~any changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the fiscal quarter ~~ended~~ ~~September 30, 2019~~to which this report relates that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal control over financial reporting to date as a result of most of our employees working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact to their design and operating effectiveness.

PART II-OTHER INFORMATION

ITEM 1. Legal Proceedings

We are involved in various matters of litigation arising in the normal course of business. While we are unable to predict the amounts involved, our management and counsel believe that when such litigation is resolved, our resulting liability, if any, will not have a material effect on our condensed consolidated financial statements.

ITEM 1A. Risk Factors

The outbreak of the COVID-19 pandemic and related government, private sector and individual consumer responses, and recent fluctuations in energy prices, has affected and may continue to adversely affect our business operations, employee availability, financial performance, liquidity and cash flow for an unknown period of time.

Table of Contents

The outbreak of COVID-19 has been declared a pandemic by the World Health Organization and has spread throughout the world, including the United States. Related government and private sector responsive actions may adversely affect our operations and have adversely affected the operations of our tenants. It is impossible to predict the effect and ultimate impact of this pandemic, as the situation is rapidly evolving. The COVID-19 pandemic has disrupted our tenants’ operations primarily due to mandated non-essential business shut downs and consumer/employee stay-at-home provisions. Retailers continue to seek ways to engage the customer by utilizing on-line ordering and curbside pick-up or delivery. Current and continued disruptions to our tenants’ operations have had and may continue to have a material adverse impact on our financial performance, liquidity and cash flows if tenants do not make their rental payments when due for a lengthy period of time.

There has also been great fluctuations in the price of oil and natural gas recently. This primarily has been due of late to the collapse in the global demand for oil from the COVID-19 induced closure of non-essential businesses, consumer/employee stay-at-home provisions and the near-elimination of airline and other non-essential travel worldwide, and related supply glut. A prolonged collapse in energy prices increases the levels and unpredictability of losses of employment and general business activity, which could further negatively impact the operations of our tenants located throughout Texas, including the city of Houston, where we have a concentration of properties.

The COVID-19 pandemic and related recession may adversely affect lease extensions or renewals, as well as, has and may continue to increase the levels of store closings and tenant bankruptcies, which could also have a material adverse impact on our financial performance, liquidity and cash flows.

As a result of COVID-19, most of our personnel are currently working remotely, and it is possible this could have a negative impact on the execution of our business plans and operations. If a natural disaster, power outage, connectivity issues or other events occur that impact our employees’ ability to work remotely, it may be difficult for us to continue our business for a substantial period of time. The increase in remote working may also result in consumer privacy, IT security and fraud concerns.

Further as a result of COVID-19, our development and redevelopment plans over the next few years could be delayed or more costly for both labor and material costs. Our ability to acquire new centers or dispose of centers could also be impacted due the markets and liquidity issues. These disruptions to our growth and liquidity plans may negatively impact our financial performance and slow future growth.

The uncertainty around the duration of the business disruptions and the extent of the spread of the virus will likely continue to adversely impact the national economy and negatively impact consumer spending. Any of these outcomes could have a material adverse impact on our business, financial condition, operating results and ability to execute and capitalize on our strategies. The full extent of the impact on our operations and financial performance of the COVID-19 pandemic and energy prices depends on future developments that are uncertain and unpredictable, including, among others, their duration and impacts on employment and capital and financial markets, federal and state actions on businesses, taxes and consumers, the reactions to new information that may emerge concerning the virus and actions to contain it, and any negative impact on consumer demand for the goods and services of our tenants. Management’s estimates of the impact on our business are sensitive to change, and it is reasonably possible those estimates will change in the near term as a result of one or more future confirming events.

We have no further material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019.

.Table of Contents

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

We have a $200 million share repurchase plan. Under this plan, we may repurchase common shares from time-to-time in open-market or in privately negotiated purchases. The timing and amount of any shares repurchased will be determined by management based on its evaluation of market conditions and other factors. The repurchase plan may be suspended or discontinued at any time, and we have no obligations to repurchase any amount of our common shares under the plan. As of the date of this filing, ~~$181.5~~$163.3 million of common shares remained available to be repurchased under the plan.

Repurchases of our common shares for the quarter ended June 30, 2020 are as follows (in thousands, except per share amounts):


	(a)	(b)		(c)	(d)
					Maximum
				Total Number	Dollar Value
				of Shares	of Shares that
	Total			Purchased as	May Yet be
	Number of	Average		Part of Publicly	Purchased
	Shares	Price Paid		Announced	Under the
Period	Purchased	Per Share		Program	Program
April 1, 2020 to April 30, 2020 ⁽¹⁾	85	$	18.19

(1)	Common shares surrendered or deemed surrendered to us to satisfy such employees' tax withholding obligations in connection with the vesting and/or exercise of awards under our equity-based compensation plans.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

Not applicable.

ITEM 6. Exhibits

The exhibits required by this item are set forth onin the Exhibit Index attached hereto.

Table of Contents

EXHIBIT INDEX


(a)		Exhibits:
10.1† *	—	Restatement of Weingarten Realty Retirement Plan dated July 1, 2020.
31.1*	—	Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
31.2*	—	Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
32.1**	—	Certification pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).
32.2**	—	Certification pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
101.INS**	—	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document
101.SCH**	—	XBRL Taxonomy Extension Schema Document
101.CAL**	—	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	—	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	—	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE**	—	XBRL Taxonomy Extension Presentation Linkbase Document
104	—	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed with this report.

** Furnished with this report.

† Management contract or compensation plan or arrangement.

~~SIGNATURES~~

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SIGNATURES

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 thereunto duly authorized.



	WEINGARTEN REALTY INVESTORS
	(Registrant)

	By:	/s/ Andrew M. Alexander
		Andrew M. Alexander
		Chairman/President/Chief Executive Officer

	By:	/s/ Joe D. Shafer
		Joe D. Shafer
		Senior Vice President/Chief Accounting Officer
		(Principal Accounting Officer)

~~DATE:~~ ~~November 5, 2019~~

~~Table of Contents~~

~~EXHIBIT INDEX~~



~~(a)~~ DATE: August 5, 2020		~~Exhibits:~~
31.1*	—	~~Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).~~
31.2*	—	~~Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).~~
32.1**	—	~~Certification pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).~~
32.2**	—	~~Certification pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).~~
101.INS**	—	~~XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document~~
101.SCH**	—	~~XBRL Taxonomy Extension Schema Document~~
101.CAL**	—	~~XBRL Taxonomy Extension Calculation Linkbase Document~~
101.DEF**	—	~~XBRL Taxonomy Extension Definition Linkbase Document~~
101.LAB**	—	~~XBRL Taxonomy Extension Labels Linkbase Document~~
101.PRE**	—	~~XBRL Taxonomy Extension Presentation Linkbase Document~~




*	~~Filed with this report.~~
**	~~Furnished with this report.~~



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues:
Rentals, net	$	117,378		$	125,586		$	356,666		$	393,471
Other	3,984			3,204			10,494			9,857
Total Revenues	121,362			128,790			367,160			403,328
Operating Expenses:
Depreciation and amortization	33,380			38,042			102,319			126,558
Operating	22,912			22,555			69,927			69,929
Real estate taxes, net	15,205			17,601			47,072			52,706
Impairment loss	—			2,398			74			2,398
General and administrative	8,432			5,971			26,893			17,715
Total Operating Expenses	79,929			86,567			246,285			269,306
Other Income (Expense):
Interest expense, net	(13,820		)	(15,996		)	(44,062		)	(47,685		)
Interest and other income, net	1,104			1,847			7,409			4,735
Gain on sale of property	74,115			17,079			143,963			173,077
Total Other Income	61,399			2,930			107,310			130,127
Income Before Income Taxes and Equity in Earnings of Real Estate Joint Ventures and Partnerships	102,832			45,153			228,185			264,149
(Provision) Benefit for Income Taxes	(21		)	99			(682		)	(1,368		)
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net	5,698			8,022			17,780			19,333
Net Income	108,509			53,274			245,283			282,114
Less: Net Income Attributable to Noncontrolling Interests	(1,767		)	(10,293		)	(5,066		)	(14,020		)
Net Income Attributable to Common Shareholders	$	106,742		$	42,981		$	240,217		$	268,094
Earnings Per Common Share - Basic:
Net income attributable to common shareholders	$	.83		$	.34		$	1.88		$	2.10
Earnings Per Common Share - Diluted:
Net income attributable to common shareholders	$	.82		$	.34		$	1.86		$	2.08



	September 30, 2019			December 31, 2018
ASSETS
Property	$	4,026,900		$	4,105,068
Accumulated Depreciation	(1,118,148		)	(1,108,188		)
Property, net *	2,908,752			2,996,880
Investment in Real Estate Joint Ventures and Partnerships, net	422,795			353,828
Total	3,331,547			3,350,708
Unamortized Lease Costs, net	126,729			142,014
Accrued Rent, Accrued Contract Receivables and Accounts Receivable (net of allowance for doubtful accounts of $6,855 in 2018) *	79,277			97,924
Cash and Cash Equivalents *	124,406			65,865
Restricted Deposits and Escrows	62,274			10,272
Other, net	188,357			160,178
Total Assets	$	3,912,590		$	3,826,961
LIABILITIES AND EQUITY
Debt, net *	$	1,736,803		$	1,794,684
Accounts Payable and Accrued Expenses	124,059			113,175
Other, net	199,251			168,403
Total Liabilities	2,060,113			2,076,262
Commitments and Contingencies (see Note 14)	—			—
Equity:
Shareholders’ Equity:
Common Shares of Beneficial Interest - par value, $.03 per share; shares authorized: 275,000; shares issued and outstanding: 128,673 in 2019 and 128,333 in 2018	3,904			3,893
Additional Paid-In Capital	1,778,828			1,766,993
Net Income Less Than Accumulated Dividends	(98,681		)	(186,431		)
Accumulated Other Comprehensive Loss	(10,320		)	(10,549		)
Total Shareholders’ Equity	1,673,731			1,573,906
Noncontrolling Interests	178,746			176,793
Total Equity	1,852,477			1,750,699
Total Liabilities and Equity	$	3,912,590		$	3,826,961
* Consolidated variable interest entities' assets and debt included in the above balances (see Note 15):
Property, net	$	197,312		$	198,466
Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net	9,825			12,220
Cash and Cash Equivalents	10,388			8,243
Debt, net	45,191			45,774



	Nine Months Ended September 30, 2019
	Common Shares of Beneficial Interest		Additional Paid-In Capital		Net Income Less Than Accumulated Dividends			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance, January 1, 2019	$	3,893	$	1,766,993	$	(186,431	)	$	(10,549	)	$	176,793		$	1,750,699
Net income					49,666						1,588			51,254
Shares issued under benefit plans, net	10		8,141											8,151
Dividends paid – common shares ($.395 per share)					(50,816		)							(50,816		)
Distributions to noncontrolling interests											(1,572		)	(1,572		)
Contributions from noncontrolling interests											326			326
Other comprehensive income								69						69
Other, net			1,955								368			2,323
Balance, March 31, 2019	3,903		1,777,089		(187,581		)	(10,480		)	177,503			1,760,434
Net income					83,809						1,711			85,520
Shares issued under benefit plans, net	1		1,231											1,232
Dividends paid – common shares ($.395 per share)					(50,825		)							(50,825		)
Distributions to noncontrolling interests											(1,589		)	(1,589		)
Other comprehensive income								78						78
Balance, June 30, 2019	3,904		1,778,320		(154,597		)	(10,402		)	177,625			1,794,850
Net income					106,742						1,767			108,509
Shares issued under benefit plans, net			508											508
Dividends paid – common shares ($.395 per share)					(50,826		)							(50,826		)
Distributions to noncontrolling interests											(646		)	(646		)
Other comprehensive income								82						82
Balance, September 30, 2019	$	3,904	$	1,778,828	$	(98,681	)	$	(10,320	)	$	178,746		$	1,852,477



	Nine Months Ended September 30, 2018
	Common Shares of Beneficial Interest			Additional Paid-In Capital			Net Income Less Than Accumulated Dividends			Accumulated Other Comprehensive Loss			Noncontrolling Interests			Total
Balance, January 1, 2018	$	3,897		$	1,772,066		$	(137,065	)	$	(6,170	)	$	177,114		$	1,809,842
Net income							146,824						2,145			148,969
Shares repurchased and cancelled	(9		)	(8,099		)										(8,108		)
Shares issued under benefit plans, net	7			5,339												5,346
Cumulative effect adjustment of new accounting standards							5,497			(1,541		)				3,956
Dividends paid – common shares ($.395 per share)							(50,836		)							(50,836		)
Distributions to noncontrolling interests													(884		)	(884		)
Contributions from noncontrolling interests													41			41
Other comprehensive loss										(1,983		)				(1,983		)
Balance, March 31, 2018	3,895			1,769,306			(35,580		)	(9,694		)	178,416			1,906,343
Net income							78,289						1,582			79,871
Shares repurchased and cancelled	(11		)	(10,445		)										(10,456		)
Shares issued under benefit plans, net	2			2,096												2,098
Dividends paid – common shares ($.395 per share)							(50,587		)							(50,587		)
Distributions to noncontrolling interests													(3,709		)	(3,709		)
Contributions from noncontrolling interests													348			348
Other comprehensive income										86						86
Balance, June 30, 2018	3,886			1,760,957			(7,878		)	(9,608		)	176,637			1,923,994
Net income							42,981						10,293			53,274
Shares issued under benefit plans, net	7			5,571												5,578
Dividends paid – common shares ($.395 per share)							(50,687		)							(50,687		)
Distributions to noncontrolling interests													(10,470		)	(10,470		)
Contributions from noncontrolling interests													935			935
Other comprehensive income										101						101
Other, net													(4		)	(4		)
Balance, September 30, 2018	$	3,893		$	1,766,528		$	(15,584	)	$	(9,507	)	$	177,391		$	1,922,721



	September 30, 2019		December 31, 2018
Restricted deposits ⁽¹⁾	$	60,925	$	8,150
Escrows	1,349		2,122
Total	$	62,274	$	10,272



	Gain on Investments			Gain on Cash Flow Hedges				Defined Benefit Pension Plan-Actuarial Loss				Total
Balance, January 1, 2019	$	—		$	(4,501	)		$	15,050			$	10,549
Amounts reclassified from accumulated other comprehensive loss				219				(288		)	⁽¹⁾	(69		)
Net other comprehensive loss (income)	—			219				(288		)		(69		)
Balance, March 31, 2019	—			(4,282		)		14,762				10,480
Amounts reclassified from accumulated other comprehensive loss				221				(299		)	⁽¹⁾	(78		)
Net other comprehensive loss (income)	—			221				(299		)		(78		)
Balance, June 30, 2019	—			(4,061		)		14,463				10,402
Amounts reclassified from accumulated other comprehensive loss				223				(305		)	⁽¹⁾	(82		)
Net other comprehensive loss (income)	—			223				(305		)		(82		)
Balance, September 30, 2019	$	—		$	(3,838	)		$	14,158			$	10,320

	Gain on Investments			Gain on Cash Flow Hedges				Defined Benefit Pension Plan-Actuarial Loss				Total
Balance, January 1, 2018	$	(1,541	)	$	(7,424	)		$	15,135			$	6,170
Cumulative effect adjustment of accounting standards	1,541											1,541
Change excluding amounts reclassified from accumulated other comprehensive loss				(1,379		)						(1,379		)
Amounts reclassified from accumulated other comprehensive loss				3,633			⁽²⁾	(271		)	⁽¹⁾	3,362
Net other comprehensive loss (income)	—			2,254				(271		)		1,983
Balance, March 31, 2018	—			(5,170		)		14,864				9,694
Amounts reclassified from accumulated other comprehensive loss				221				(307		)	⁽¹⁾	(86		)
Net other comprehensive loss (income)	—			221				(307		)		(86		)
Balance, June 30, 2018	—			(4,949		)		14,557				9,608
Amounts reclassified from accumulated other comprehensive loss				224				(325		)	⁽¹⁾	(101		)
Net other comprehensive loss (income)	—			224				(325		)		(101		)
Balance, September 30, 2018	$	—		$	(4,725	)		$	14,232			$	9,507



	September 30, 2019			December 31, 2018
Combined Condensed Balance Sheets
ASSETS
Property	$	1,374,095		$	1,268,557
Accumulated depreciation	(325,426		)	(305,327		)
Property, net	1,048,669			963,230
Other assets, net	105,161			104,267
Total Assets	$	1,153,830		$	1,067,497
LIABILITIES AND EQUITY
Debt, net (primarily mortgages payable)	$	265,455		$	269,113
Amounts payable to Weingarten Realty Investors and Affiliates	12,057			11,732
Other liabilities, net	28,162			24,717
Total Liabilities	305,674			305,562
Equity	848,156			761,935
Total Liabilities and Equity	$	1,153,830		$	1,067,497



2019 remaining	$	1,960
2020	22,114
2021	18,434
2022	307,922
2023	347,815
2024	252,153
2025	293,807
2026	277,291
2027	38,288
2028	92,159
Thereafter	10,435
Total	$	1,662,378



	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Lease cost:
Operating lease cost:
Included in Operating expense	$	761		$	2,283
Included in General and administrative expense	80			208
Finance cost:
Amortization of right-of-use asset (included in Depreciation and Amortization)	46			129
Interest on lease liability (included in Interest expense, net)	410			1,231
Short-term lease cost	—			44
Variable lease cost	72			206
Sublease income (included in Rentals, net)	(6,858		)	(20,392		)
Total lease cost	$	(5,489	)	$	(16,291	)

	September 30, 2019
Weighted-average remaining lease term (in years):
Operating leases				41.7
Finance lease				4.3

Weighted-average discount rate (percentage):
Operating leases				4.9		%
Finance lease				7.5		%



	Operating		Finance
Lease payments:
2019 remaining	$	570	$	435
2020	2,696		1,744
2021	2,585		1,751
2022	2,576		1,759
2023	2,458		23,037
2024	2,158
Thereafter	97,187
Total	$	110,230	$	28,726

Lease liabilities⁽¹⁾	43,100		21,828
Undiscounted excess amount	$	67,130	$	6,898



	September 30, 2019		December 31, 2018
Sublease payments:
Finance lease⁽¹⁾	$	11,257	$	14,382
Operating leases:
2019 remaining	$	6,033	$	22,528
2020	23,454		20,903
2021	21,352		18,886
2022	19,579		17,245
2023	17,436		15,128
2024	12,255
Thereafter	36,572		43,439
Total	$	136,681	$	138,129



2019 remaining	$	82,090
2020	324,700
2021	277,508
2022	223,929
2023	177,033
2024	129,957
Thereafter	412,103
Total payments due	$	1,627,320



2019	$	347,476
2020	305,404
2021	253,269
2022	198,414
2023	151,538
Thereafter	473,416
Total payments due	$	1,729,517



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Variable lease payments	$	28,132	$	82,237



	September 30, 2019		September 30, 2018
Cash and cash equivalents	$	124,406	$	24,412
Restricted deposits and escrows (see Note 1)	62,274		22,369
Total	$	186,680	$	46,781



	Nine Months Ended September 30, 2019
	Minimum		Maximum
Dividend yield	0.0	%	5.5	%
Expected volatility ⁽¹⁾	19.3	%	21.3	%
Expected life (in years)	N/A		3
Risk-free interest rate	2.4	%	2.6	%



	Unvested Share Awards		Weighted Average Grant Date Fair Value
Outstanding, January 1, 2019	674,293		$	30.26
Granted:
Service-based awards	177,755		28.58
Market-based awards relative to FTSE NAREIT U.S. Shopping Center Index	80,848		30.20
Market-based awards relative to three-year absolute TSR	80,847		32.91
Trust manager awards	27,768		29.17
Vested	(234,646	)	32.14
Forfeited	(5,119	)	29.97
Outstanding, September 30, 2019	801,746		$	29.56



	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at September 30, 2019
Assets:
Cash equivalents, primarily money market funds, time deposits and commercial paper	$	108,895					$	108,895
Restricted cash, primarily money market funds	10,337						10,337
Investments, mutual funds held in a grantor trust	35,740						35,740
Total	$	154,972	$	—	$	—	$	154,972
Liabilities:
Deferred compensation plan obligations	$	35,740					$	35,740
Total	$	35,740	$	—	$	—	$	35,740



	September 30, 2019						December 31, 2018
	Carrying Value		Fair Value Using Significant Other Observable Inputs (Level 2)		Fair Value Using Significant Unobservable Inputs (Level 3)		Carrying Value		Fair Value Using Significant Other Observable Inputs (Level 2)		Fair Value Using Significant Unobservable Inputs (Level 3)
Other Assets:
Tax increment revenue bonds⁽¹⁾	$	20,009			$	25,000	$	20,009			$	25,000
Investments, held to maturity⁽²⁾	250		$	250			3,000		$	2,988
Debt:
Fixed-rate debt	1,719,311				1,790,605		1,771,999				1,761,215
Variable-rate debt	17,492				16,972		22,685				23,131



	September 30,
	2019		2018
Anchor (space of 10,000 square feet or greater)	97.0	%	96.6	%
Non-Anchor	90.7	%	90.6	%
Total Occupancy	94.7	%	94.4	%



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
SPNOI Growth (including Redevelopments) ⁽¹⁾	2.9	%	3.4	%



	Number of Leases	Square Feet ('000's)	Average New Rent per Square Foot ($)		Average Prior Rent per Square Foot ($)		Average Cost of Tenant Improvements per Square Foot ($)		Change in Base Rent on Cash Basis
Leasing Activity:
Three Months Ended September 30, 2019
New leases ⁽¹⁾	45	123	$	27.39	$	23.81	$	33.06	15.0	%
Renewals	108	412	20.61		19.72		—		4.5	%
Not comparable spaces	33	93
Total	186	628	$	22.16	$	20.66	$	7.59	7.3	%

Nine Months Ended September 30, 2019
New leases ⁽¹⁾	123	343	$	27.03	$	23.46	$	36.10	15.2	%
Renewals	374	1,858	16.99		16.34		—		4.0	%
Not comparable spaces	91	356
Total	588	2,557	$	18.56	$	17.45	$	5.62	6.3	%



	Three Months Ended September 30,
	2019		2018		Change			% Change
Revenues	$	121,362	$	128,790	$	(7,428	)	(5.8	)%
Depreciation and amortization	33,380		38,042		(4,662		)	(12.3	)
Real estate taxes, net	15,205		17,601		(2,396		)	(13.6	)
Impairment loss	—		2,398		(2,398		)	(100.0	)
General and administrative expenses	8,432		5,971		2,461			41.2
Interest expense, net	13,820		15,996		(2,176		)	(13.6	)
Gain on sale of property	74,115		17,079		57,036			334.0
Equity in earnings of real estate joint ventures and partnerships, net	5,698		8,022		(2,324		)	(29.0	)



	Nine Months Ended September 30,
	2019		2018		Change			% Change
Revenues	$	367,160	$	403,328	$	(36,168	)	(9.0	)%
Depreciation and amortization	102,319		126,558		(24,239		)	(19.2	)
Real estate taxes, net	47,072		52,706		(5,634		)	(10.7	)
Impairment loss	74		2,398		(2,324		)	(96.9	)
General and administrative expenses	26,893		17,715		9,178			51.8
Interest expense, net	44,062		47,685		(3,623		)	(7.6	)
Interest and other income, net	7,409		4,735		2,674			56.5
Gain on sale of property	143,963		173,077		(29,114		)	(16.8	)



	Payments due by period
	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Mortgages and Notes Payable ⁽¹⁾
Unsecured Debt	$	1,674,414	$	26,099	$	106,750	$	687,030	$	854,535
Secured Debt	354,173		5,051		65,199		98,104		185,819
Lease Payments	110,230		570		5,281		5,034		99,345
Other Obligations ⁽²⁾	57,748		30,244		27,504
Total Contractual Obligations	$	2,196,565	$	61,964	$	204,734	$	790,168	$	1,139,699