0001558370-21-009771.txt : 20210802 0001558370-21-009771.hdr.sgml : 20210802 20210802111247 ACCESSION NUMBER: 0001558370-21-009771 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 86 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210802 DATE AS OF CHANGE: 20210802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEINGARTEN REALTY INVESTORS /TX/ CENTRAL INDEX KEY: 0000828916 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 741464203 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09876 FILM NUMBER: 211135121 BUSINESS ADDRESS: STREET 1: 2600 CITADEL PLAZA DR STREET 2: SUITE 300 CITY: HOUSTON STATE: TX ZIP: 77292 BUSINESS PHONE: 7138666000 MAIL ADDRESS: STREET 1: PO BOX 924133 CITY: HOUSTON STATE: TX ZIP: 77292-4133 10-Q 1 wri-20210630x10q.htm 10-Q
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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

For the quarterly period ended June 30, 2021

or

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

(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 telephone number, including area code)

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. YesNo

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). YesNo

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).   YesNo

As of July 27, 2021, there were 127,784,797 common shares of beneficial interest of Weingarten Realty Investors, $.03 par value, outstanding.

TABLE OF CONTENTS

PART I.

Financial Information:

Page Number

Item 1.

Financial Statements (unaudited):

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020

3

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2021 and 2020

4

Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020

5

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020

6

Condensed Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2021 and 2020

7

Notes to Condensed Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

43

Item 4.

Controls and Procedures

43

PART II.

Other Information:

Item 1.

Legal Proceedings

43

Item 1A.

Risk Factors

44

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

45

Item 3.

Defaults Upon Senior Securities

45

Item 4.

Mine Safety Disclosures

45

Item 5.

Other Information

46

Item 6.

Exhibits

46

Exhibit Index

46

Signatures

47

2

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

Six Months Ended

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

Revenues:

 

  

 

  

Rentals, net

 

$

119,770

$

95,813

$

238,091

$

203,863

Other

2,895

2,322

5,945

5,624

Total Revenues

122,665

98,135

244,036

209,487

Operating Expenses:

Depreciation and amortization

40,022

37,627

78,578

74,283

Operating

22,767

19,978

46,054

43,138

Real estate taxes, net

16,285

15,733

33,020

30,741

Impairment loss

122

447

44

General and administrative

11,691

12,920

22,295

15,227

Total Operating Expenses

90,887

86,258

180,394

163,433

Other Income (Expense):

Interest expense, net

(17,303)

(15,776)

(33,922)

(30,378)

Interest and other (expense) income, net

(4,713)

5,293

(3,059)

(535)

Gain on sale of property

480

7,898

9,611

21,474

Total Other Expense

(21,536)

(2,585)

(27,370)

(9,439)

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

10,242

9,292

36,272

36,615

Provision for Income Taxes

(86)

(343)

(324)

(515)

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

4,285

3,428

8,372

30,525

Net Income

14,441

12,377

44,320

66,625

Less: Net Income Attributable to Noncontrolling Interests

(1,749)

(1,009)

(3,591)

(2,635)

Net Income Attributable to Common Shareholders

$

12,692

$

11,368

$

40,729

$

63,990

Earnings Per Common Share - Basic:

 

 

 

 

Net income attributable to common shareholders

$

0.10

$

0.09

$

0.32

$

0.50

Earnings Per Common Share - Diluted:

 

 

 

 

Net income attributable to common shareholders

$

0.10

$

0.09

$

0.32

$

0.50

See Notes to Condensed Consolidated Financial Statements.

3

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

    

2021

    

2020

    

2021

    

2020

Net Income

$

14,441

$

12,377

$

44,320

$

66,625

Other Comprehensive Income:

  

  

  

  

Reclassification adjustment of derivatives and designated hedges into net income

(221)

(224)

(440)

(445)

Retirement liability adjustment

282

273

543

570

Total

61

49

103

125

Comprehensive Income

14,502

12,426

44,423

66,750

Comprehensive Income Attributable to Noncontrolling Interests

(1,749)

(1,009)

(3,591)

(2,635)

Comprehensive Income Adjusted for Noncontrolling Interests

$

12,753

$

11,417

$

40,832

$

64,115

See Notes to Condensed Consolidated Financial Statements.

4

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

    

June 30, 

    

December 31, 

2021

2020

ASSETS

  

  

Property

$

4,187,531

$

4,246,334

Accumulated Depreciation

(1,193,095)

(1,161,970)

Property, net *

2,994,436

3,084,364

Investment in Real Estate Joint Ventures and Partnerships, net

362,132

369,038

Total

3,356,568

3,453,402

Unamortized Lease Costs, net

161,040

174,152

Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net *

70,039

81,016

Cash and Cash Equivalents *

73,344

35,418

Restricted Deposits and Escrows

11,702

12,338

Other, net

209,080

205,074

Total Assets

$

3,881,773

$

3,961,400

LIABILITIES AND EQUITY

 

  

 

  

Debt, net *

$

1,786,962

$

1,838,419

Accounts Payable and Accrued Expenses

95,979

104,990

Other, net

218,369

217,489

Total Liabilities

2,101,310

2,160,898

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:127,645 in 2021 and 127,313 in 2020

3,876

3,866

Additional Paid-In Capital

1,763,163

1,755,770

Net Income Less Than Accumulated Dividends

(155,730)

(128,813)

Accumulated Other Comprehensive Loss

(11,947)

(12,050)

Total Shareholders' Equity

1,599,362

1,618,773

Noncontrolling Interests

181,101

181,729

Total Equity

1,780,463

1,800,502

Total Liabilities and Equity

$

3,881,773

$

3,961,400

* Consolidated variable interest entities' assets and debt included in the above balances (see Note 13):

 

  

 

  

Property, net

$

181,628

$

193,271

Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net

8,236

9,489

Cash and Cash Equivalents

9,478

10,089

Debt, net

43,756

44,177

See Notes to Condensed Consolidated Financial Statements.

5

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Six Months Ended

June 30, 

    

2021

    

2020

Cash Flows from Operating Activities:

  

  

Net Income

$

44,320

$

66,625

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

78,578

74,283

Amortization of debt deferred costs and intangibles, net

1,223

1,392

Non-cash lease expense

581

641

Impairment loss

447

44

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

(8,372)

(30,525)

Gain on sale of property

(9,611)

(21,474)

Distributions of income from real estate joint ventures and partnerships

8,972

18,418

Changes in accrued rent, accrued contract receivables and accounts receivable, net

9,926

9,617

Changes in unamortized lease costs and other assets, net

(7,692)

(1,925)

Changes in accounts payable, accrued expenses and other liabilities, net

4,711

(10,076)

Other, net

1,995

1,672

Net cash provided by operating activities

125,078

108,692

Cash Flows from Investing Activities:

Acquisition of real estate and land, net

(5,220)

(25,506)

Development and capital improvements

(31,548)

(78,258)

Proceeds from sale of property and real estate equity investments, net

69,692

58,448

Real estate joint ventures and partnerships - Investments

(2,075)

(4,391)

Real estate joint ventures and partnerships - Distribution of capital

7,416

17,520

Other, net

(433)

(1,513)

Net cash provided by (used in) investing activities

37,832

(33,700)

Cash Flows from Financing Activities:

Principal payments of debt

(15,996)

(20,123)

Changes in unsecured credit facilities

(35,998)

12,000

Proceeds from issuance of common shares of beneficial interest, net

712

208

Repurchase of common shares of beneficial interest, net

(18,219)

Common share dividends paid

(67,646)

(73,994)

Debt issuance and extinguishment costs paid

(6)

Distributions to noncontrolling interests

(3,692)

(1,594)

Contributions from noncontrolling interests

1,150

Other, net

(3,000)

(1,439)

Net cash used in financing activities

(125,620)

(102,017)

Net increase (decrease) in cash, cash equivalents and restricted cash equivalents

37,290

(27,025)

Cash, cash equivalents and restricted cash equivalents at January 1

47,756

55,291

Cash, cash equivalents and restricted cash equivalents at June 30

$

85,046

$

28,266

Supplemental disclosure of cash flow information:

 

 

Cash paid for interest (net of amount capitalized of $1,375 and $4,573, respectively)

$

33,121

$

29,094

Cash paid for income taxes

$

841

$

793

Cash paid for amounts included in operating lease liabilities

$

1,592

$

1,555

See Notes to Condensed Consolidated Financial Statements.

6

WEINGARTEN REALTY INVESTORS

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands, except per share amounts)

    

Six Months Ended June 30, 2021

    

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, 2021

$

3,866

$

1,755,770

$

(128,813)

$

(12,050)

$

181,729

$

1,800,502

Net income

28,037

  

1,842

29,879

Shares issued under benefit plans, net

10

6,116

  

  

6,126

Dividends paid – common shares ($.30 per share)

(38,288)

  

  

(38,288)

Distributions to noncontrolling interests

  

  

(2,258)

(2,258)

Other comprehensive income

  

42

  

42

Other, net

(55)

(527)

(582)

Balance, March 31, 2021

3,876

1,761,831

(139,064)

(12,008)

180,786

1,795,421

Net income

12,692

1,749

14,441

Shares issued under benefit plans, net

1,332

1,332

Dividends paid – common shares ($.23 per share)

(29,358)

(29,358)

Distributions to noncontrolling interests

(1,434)

(1,434)

Other comprehensive income

61

61

Balance, June 30, 2021

$

3,876

$

1,763,163

$

(155,730)

$

(11,947)

$

181,101

$

1,780,463

7

    

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 new 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

See Notes to Condensed Consolidated Financial Statements.

8

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. 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 29.7 million square feet of gross leasable area that is either owned by us or others. We have a diversified tenant base, with two of our largest tenants each comprising only 2.6% of base minimum rental revenues during the six months of 2021. Total revenues generated by our centers located in Houston and its surrounding areas was 24.3% of total revenue for the six months ended June 30, 2021, and an additional 7.9% 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% and 15.9%, respectively, of total revenue was generated during the six months ended June 30, 2021.

Proposed Merger

On April 15, 2021, we announced our entry into a definitive merger agreement (the “Merger Agreement”) with Kimco Realty Corporation (“Kimco”). The Merger Agreement provides that, among other things and on the terms and subject to the conditions set forth therein, (1) the Company will be merged with and into Kimco (the “Merger”), with Kimco continuing as the surviving corporation in the Merger, and (2) at the effective time of the Merger (the “Effective Time”), each common share of the Company (other than certain shares as set forth in the Merger Agreement) issued and outstanding immediately prior to the Effective Time will be automatically converted into the right to receive (i) 1.408 shares of common stock of Kimco and (ii) $2.89 in cash, subject to customary anti-dilution adjustments and any adjustment that may be made pursuant to the terms of the Merger Agreement in certain circumstances relating to a special pre-closing distribution by us. On July 15, 2021, our Board of Trust Managers declared a special dividend of $.69 per common share, which is payable on August 2, 2021 to shareholders of record on July 28, 2021. The special dividend is being paid in connection with the anticipated Merger and to satisfy the REIT taxable income distribution requirements. Under the terms of the Merger Agreement, our payment of the special dividend adjusts the cash consideration to be paid by Kimco at the closing of the Merger from $2.89 per share to $2.20 per share, and does not affect the payment of the share consideration of 1.408 newly issued shares of common stock of Kimco for each of our common shares owned immediately prior to the Effective Time (see Note 6 for additional information). During the period from the date of the Merger Agreement until the completion of the Merger, we are subject to certain restrictions on our ability to engage with third parties regarding alternative acquisition proposals and on the conduct of our business.

The closing of the Merger is expected to occur on August 3, 2021, pending the receipt of the necessary shareholder approvals and satisfaction or waiver of the other closing conditions specified in the Merger Agreement. Kimco and we have each scheduled a special meeting of their shareholders for August 3, 2021 seeking their approval of Merger related proposals. There can be no assurance that all closing conditions will be satisfied or waived by August 3, 2021, that the Merger will close on August 3, 2021 or that the Merger will be consummated.

9

For both the three and six months ended June 30, 2021, we have recorded costs of $8.4 million associated with the Merger, included in Interest and Other (Expense) Income, net. Estimated additional costs to be paid, if or when the Merger closes are $46.1 million which includes costs associated primarily with personnel and financial, legal, tax and audit advisors (see Note 12). Also, if and when the Merger closes, we estimate a net write-off of assets and liabilities based on June 30, 2021 balances of $1.1 million in additional expense due primarily to the vesting acceleration of restricted shares and other personnel related accruals. These estimates are based on the best information available to management and may be impacted by future developments related to the Merger that could result in inaccurate estimates that could be material to our consolidated financial statements.

Pandemic

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 created risks and uncertainties surrounding our operations and geographic concentrations. The pandemic resulted in, at certain times and locations, the closure or limited operations of non-essential businesses and consumer/employee stay-at-home provisions. Given the continually evolving situation, the duration and severity of these matters and their ultimate effect are uncertain at this time. As judgments and estimates made by management are based on the best information available at the time, any evaluations impacted by future developments caused by the COVID-19 pandemic could result in inaccurate estimates when determining values that could be material to our consolidated financial statements.

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, 2020 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, 2020.

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.

Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net

The duration of the COVID-19 pandemic and its impact on our tenants’ operations has caused uncertainty in our ongoing ability to collect rents when due. Considering the potential impact of this uncertainty, our collection assessment continues to consider 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, 2021, rental revenues increased by $1.2 million and $2.9 million, respectively, due to the realization of net recoveries. For the three and six months ended June 30, 2020, rental revenues were reduced by $19.3 million and $28.7 million, respectively, due primarily to COVID lease related reserves and write-offs, which included $4.8 million and $12.4 million, respectively, for straight-line rent receivables.

10

Additionally, we continue to have lease negotiations with tenants directly related to the effects of the COVID-19 pandemic. At June 30, 2021 and December 31, 2020, included in Accrued Rent, Accrued Contract Receivables and Accounts Receivable, net, we have deferred lease concessions not currently due of $5.0 million and $9.6 million, respectively. Additionally for the three and six months ended June 30, 2021, rent abatements totaled $1.5 million and $3.5 million, respectively, which includes $1.3 million and $2.8 million for cash basis tenants. For both the three and six months ended June 30, 2020, $.3 million of rent abatements were recorded (see Note 7 for additional information). Discussions are continuing with tenants as the effects of the COVID-19 pandemic and related mandates evolve.

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, including capital improvements, rental income and taxes.

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

    

June 30, 

December 31, 

2021

2020

Restricted deposits

$

11,397

$

12,122

Escrows

305

216

Total

$

11,702

$

12,338

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, 2020

$

(2,724)

$

14,774

$

12,050

Amounts reclassified from accumulated other comprehensive loss

219

(1)  

(261)

(2)  

(42)

Net other comprehensive loss (income)

219

(261)

(42)

Balance, March 31, 2021

(2,505)

14,513

12,008

Amounts reclassified from accumulated other comprehensive loss

221

(1)

(282)

(2)

(61)

Net other comprehensive loss (income)

221

(282)

(61)

Balance, June 30, 2021

$

(2,284)

$

14,231

$

11,947

    

    

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

(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).

11

Additionally, as of June 30, 2021 and December 31, 2020, the net gain balance in accumulated other comprehensive loss relating to previously terminated cash flow interest rate swap contracts was $2.3 million and $2.7 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.

Note 2. Newly Issued Accounting Pronouncements

Not Yet Adopted

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848)”, as amended by ASU No. 2021-01. 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.

In August 2020, the FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The guidance in this ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This simplification results by removing major separation models required under current GAAP. Additionally, it removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation. The provisions of ASU No. 2020-06 are effective for us as of January 1, 2022 using either a modified retrospective method or a fully retrospective method, and early adoption is permitted beginning for us as of January 1, 2021. 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.

Note 3. Property

Our property consists of the following (in thousands):

    

June 30, 

December 31, 

    

2021

    

2020

Land

$

949,307

$

948,622

Land held for development

 

38,726

 

39,936

Land under development

 

1,404

 

19,830

Buildings and improvements

 

3,139,504

 

3,082,509

Construction in-progress

 

58,590

 

155,437

Total

$

4,187,531

$

4,246,334

During the six months ended June 30, 2021, we sold four centers and other property. Aggregate gross sales proceeds from these transactions approximated $71.4 million and generated gains of approximately $9.6 million. In addition, during the six months ended June 30, 2021, we acquired real estate assets with an aggregate gross purchase price of $5.2 million, and we invested $10.9 million in new development projects. Subsequent to June 30, 2021, we sold one center and other property with aggregate gross proceeds totaling $43.8 million.

12

Note 4. Investment in Real Estate Joint Ventures and Partnerships

We own interests in real estate joint ventures or limited partnerships 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 2021 and 2020. Combined condensed financial information of these ventures (at 100%) is summarized as follows (in thousands):

    

June 30, 

December 31, 

    

2021

    

2020

Combined Condensed Balance Sheets

  

  

ASSETS

  

  

Property

$

1,098,782

$

1,093,504

Accumulated depreciation

(291,039)

(275,802)

Property, net

807,743

817,702

Other assets, net

79,431

81,285

Total Assets

$

887,174

$

898,987

LIABILITIES AND EQUITY

 

  

 

  

Debt, net (primarily mortgages payable)

$

191,089

$

192,674

Amounts payable to Weingarten Realty Investors and Affiliates

9,038

9,836

Other liabilities, net