Document
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2016
OR
o
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)
 
 
 
 
 
 
 
 
(Former name, former address and former fiscal
year, if changed since last report)
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. YESý NOo
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).     YESý NO¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
        Large accelerated filer ý
Accelerated filer ¨
        Non-accelerated filer ¨
Smaller reporting company ¨
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     YES¨ NOý
As of July 28, 2016, there were 127,832,375 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
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
 
 
 
 
 
Item 4.
 
 
 
 
PART II.
 
Other Information:
 
 
 
 
 
 
Item 1.
 
 
 
 
 
Item 1A.
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
 
 
 
 
 
Item 4.
 
 
 
 
 
Item 5.
 
 
 
 
 
Item 6.
 
 
 
 
 
 
 
 
 
 
 
 

2

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
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Revenues:
 
 
 
 
 
 
 
Rentals, net
$
132,814

 
$
124,310

 
$
261,323

 
$
246,968

Other
2,862

 
2,494

 
6,770

 
5,435

Total
135,676

 
126,804

 
268,093

 
252,403

Expenses:
 
 
 
 
 
 
 
Depreciation and amortization
39,218

 
36,451

 
77,097

 
72,602

Operating
24,663

 
22,200

 
48,199

 
44,785

Real estate taxes, net
17,221

 
15,498

 
33,078

 
30,125

Impairment loss
—

 
153

 
43

 
153

General and administrative
6,388

 
6,461

 
12,886

 
13,833

Total
87,490

 
80,763

 
171,303

 
161,498

Operating Income
48,186

 
46,041

 
96,790

 
90,905

Interest Expense, net
(18,558
)
 
(20,292
)
 
(39,449
)
 
(46,750
)
Interest and Other Income
361

 
418

 
572

 
3,140

Gain on Sale and Acquisition of Real Estate Joint Venture and
Partnership Interests
—

 
18

 
37,392

 
879

Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
6,645

 
3,212

 
10,738

 
8,584

(Provision) Benefit for Income Taxes
(16
)
 
226

 
(5,915
)
 
(435
)
Income from Continuing Operations
36,618

 
29,623

 
100,128

 
56,323

Gain on Sale of Property
1,033

 
8,163

 
46,190

 
30,685

Net Income
37,651

 
37,786

 
146,318

 
87,008

Less: Net Income Attributable to Noncontrolling Interests
(1,835
)
 
(1,757
)
 
(3,428
)
 
(3,332
)
Net Income Adjusted for Noncontrolling Interests
35,816

 
36,029

 
142,890

 
83,676

Dividends on Preferred Shares
—

 
(1,120
)
 
—

 
(3,830
)
Redemption Costs of Preferred Shares
—

 
(9,687
)
 
—

 
(9,687
)
Net Income Attributable to Common Shareholders
$
35,816

 
$
25,222

 
$
142,890

 
$
70,159

Earnings Per Common Share - Basic:
 
 
 
 
 
 
 
Net income attributable to common shareholders
$
.28

 
$
.20

 
$
1.15

 
$
.57

Earnings Per Common Share - Diluted:
 
 
 
 
 
 
 
Net income attributable to common shareholders
$
.28

 
$
.20

 
$
1.13

 
$
.57

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

WEINGARTEN REALTY INVESTORS
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In thousands)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Net Income
$
37,651

 
$
37,786

 
$
146,318

 
$
87,008

Other Comprehensive (Loss) Income:
 
 
 
 
 
 
 
Net unrealized gain (loss) on investments, net of taxes
80

 
(3
)
 
98

 
76

Realized gain on derivatives
—

 
5,007

 
—

 
5,007

Net unrealized (loss) gain on derivatives
(4,140
)
 
1,731

 
(8,571
)
 
381

Amortization of derivatives and designated hedges
360

 
321

 
731

 
709

Retirement liability adjustment
376

 
360

 
753

 
720

Total
(3,324
)
 
7,416

 
(6,989
)
 
6,893

Comprehensive Income
34,327

 
45,202

 
139,329

 
93,901

Comprehensive Income Attributable to Noncontrolling Interests
(1,835
)
 
(1,757
)
 
(3,428
)
 
(3,332
)
Comprehensive Income Adjusted for Noncontrolling Interests
$
32,492

 
$
43,445

 
$
135,901

 
$
90,569

See Notes to Condensed Consolidated Financial Statements.


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Table of Contents

WEINGARTEN REALTY INVESTORS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share amounts)
 
June 30,
2016
 
December 31,
2015
ASSETS
 
 
 
Property
$
4,446,535

 
$
4,262,959

Accumulated Depreciation
(1,144,670
)
 
(1,087,642
)
Property Held for Sale, net
—

 
34,363

Property, net *
3,301,865

 
3,209,680

Investment in Real Estate Joint Ventures and Partnerships, net *
292,530

 
267,041

Total
3,594,395

 
3,476,721

Unamortized Lease Costs, net
148,632

 
137,609

Accrued Rent and Accounts Receivable (net of allowance for doubtful
 accounts of $6,563 in 2016 and $6,072 in 2015) *
82,368

 
84,782

Cash and Cash Equivalents *
14,529

 
22,168

Restricted Deposits and Mortgage Escrows
5,652

 
3,074

Other, net
187,351

 
177,591

Total Assets
$
4,032,927

 
$
3,901,945

LIABILITIES AND EQUITY
 
 
 
Debt, net *
$
2,052,236

 
$
2,113,277

Accounts Payable and Accrued Expenses
102,850

 
112,205

Other, net
159,995

 
131,453

Total Liabilities
2,315,081

 
2,356,935

Commitments and Contingencies
—

 
—

Deferred Compensation Share Awards
48,140

 
—

Equity:
 
 
 
Shareholders’ Equity:
 
 
 
Common Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 275,000; shares issued and outstanding:
127,825 in 2016 and 123,951 in 2015
3,878

 
3,744

Additional Paid-In Capital
1,711,114

 
1,616,242

Net Income Less Than Accumulated Dividends
(186,136
)
 
(222,880
)
Accumulated Other Comprehensive Loss
(14,633
)
 
(7,644
)
Total Shareholders’ Equity
1,514,223

 
1,389,462

Noncontrolling Interests
155,483

 
155,548

Total Equity
1,669,706

 
1,545,010

Total Liabilities and Equity
$
4,032,927

 
$
3,901,945

* Consolidated variable interest entities' assets and debt included in the above balances (see Note 15):
Property, net
$
238,318

 
$
240,689

Investment in Real Estate Joint Ventures and Partnerships, net
17,528

 
18,278

Accrued Rent and Accounts Receivable, net
9,531

 
9,245

Cash and Cash Equivalents
9,607

 
13,250

Debt, net
47,522

 
47,919

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

WEINGARTEN REALTY INVESTORS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
 
Six Months Ended
June 30,
 
2016
 
2015
Cash Flows from Operating Activities:
 
 
 
Net Income
$
146,318

 
$
87,008

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
77,097

 
72,602

Amortization of debt deferred costs and intangibles, net
1,305

 
1,310

Impairment loss
43

 
153

Equity in earnings of real estate joint ventures and partnerships, net
(10,738
)
 
(8,584
)
Gain on sale and acquisition of real estate joint venture and partnership interests
(37,392
)
 
(879
)
Gain on sale of property
(46,190
)
 
(30,685
)
Distributions of income from real estate joint ventures and partnerships
591

 
1,887

Changes in accrued rent and accounts receivable, net
2,555

 
2,956

Changes in unamortized lease costs and other assets, net
(10,159
)
 
(8,660
)
Changes in accounts payable, accrued expenses and other liabilities, net
(5,090
)
 
(7,526
)
Other, net
(567
)
 
10,161

Net cash provided by operating activities
117,773

 
119,743

Cash Flows from Investing Activities:
 
 
 
Acquisition of real estate and land
(92,071
)
 
(124,914
)
Development and capital improvements
(53,441
)
 
(38,505
)
Proceeds from sale of property and real estate equity investments
108,782

 
48,051

Change in restricted deposits and mortgage escrows
(5,348
)
 
68,520

Real estate joint ventures and partnerships - Investments
(42,025
)
 
(30,053
)
Real estate joint ventures and partnerships - Distribution of capital
34,224

 
22,653

Purchase of investments
(3,247
)
 
—

Proceeds from investments
750

 
1,000

Other, net
2,518

 
(489
)
Net cash used in investing activities
(49,858
)
 
(53,737
)
Cash Flows from Financing Activities:
 
 
 
Proceeds from issuance of debt
2,111

 
448,083

Principal payments of debt
(58,275
)
 
(201,845
)
Changes in unsecured credit facilities
(51,500
)
 
(116,000
)
Proceeds from issuance of common shares of beneficial interest, net
127,965

 
42,288

Redemption of preferred shares of beneficial interest
—

 
(150,000
)
Common and preferred dividends paid
(91,675
)
 
(89,106
)
Debt issuance and extinguishment costs paid
(3,114
)
 
(9,691
)
Distributions to noncontrolling interests
(3,493
)
 
(3,938
)
Other, net
2,427

 
4,313

Net cash used in financing activities
(75,554
)
 
(75,896
)
Net decrease in cash and cash equivalents
(7,639
)
 
(9,890
)
Cash and cash equivalents at January 1
22,168

 
23,189

Cash and cash equivalents at June 30
$
14,529

 
$
13,299

Interest paid during the period (net of amount capitalized of $1,137 and $1,673, respectively)
$
40,413

 
$
38,999

Income taxes paid during the period
$
925

 
$
1,499

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents

WEINGARTEN REALTY INVESTORS
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In thousands, except per share amounts)

 
Preferred
Shares of
Beneficial
Interest
 
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, 2015
$
2

 
$
3,700

 
$
1,706,880

 
$
(212,960
)
 
$
(12,436
)
 
$
153,757

 
$
1,638,943

Net income
 
 
 
 
 
 
83,676

 
 
 
3,332

 
87,008

Redemption of preferred shares
(2
)
 
 
 
(140,311
)
 
(9,687
)
 
 
 
 
 
(150,000
)
Issuance of common shares, net
 
 
34

 
40,311

 
 
 
 
 
 
 
40,345

Shares issued under benefit plans, net
 
 
10

 
7,219

 
 
 
 
 
 
 
7,229

Shares issued in exchange for noncontrolling interests
 
 
 
 
111

 
 
 
 
 
(111
)
 
—

Dividends paid – common shares (1)
 
 
 
 
 
 
(85,233
)
 
 
 
 
 
(85,233
)
Dividends paid – preferred shares (2)
 
 
 
 
 
 
(3,873
)
 
 
 
 
 
(3,873
)
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
(3,938
)
 
(3,938
)
Other comprehensive income
 
 
 
 
 
 
 
 
6,893

 
 
 
6,893

Other, net
 
 
 
 
280

 
43

 
 
 
(794
)
 
(471
)
Balance, June 30, 2015
$
—

 
$
3,744

 
$
1,614,490

 
$
(228,034
)
 
$
(5,543
)
 
$
152,246

 
$
1,536,903

Balance, January 1, 2016
$
—

 
$
3,744

 
$
1,616,242

 
$
(222,880
)
 
$
(7,644
)
 
$
155,548

 
$
1,545,010

Net income
 
 
 
 
 
 
142,890

 
 
 
3,428

 
146,318

Issuance of common shares, net
 
 
99

 
123,690

 
 
 
 
 
 
 
123,789

Shares issued under benefit plans, net
 
 
35

 
4,851

 
 
 
 
 
 
 
4,886

Change in classification of deferred compensation plan
 
 
 
 
(37,488
)
 
 
 
 
 
 
 
(37,488
)
Change in redemption value of deferred compensation plan
 
 
 
 
 
 
(14,471
)
 
 
 
 
 
(14,471
)
Diversification of share awards within deferred compensation plan
 
 
 
 
3,819

 
 
 
 
 
 
 
3,819

Dividends paid – common shares (1)
 
 
 
 
 
 
(91,675
)
 
 
 
 
 
(91,675
)
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
(3,493
)
 
(3,493
)
Other comprehensive loss
 
 
 
 
 
 
 
 
(6,989
)
 
 
 
(6,989
)
Balance, June 30, 2016
$
—

 
$
3,878

 
$
1,711,114

 
$
(186,136
)
 
$
(14,633
)
 
$
155,483

 
$
1,669,706

_______________
(1)
Common dividend per share was $.73 and $.69 for the six months ended June 30, 2016 and 2015, respectively.
(2)
Series F preferred dividend per share was $64.55 for the six months ended June 30, 2015.
See Notes to Condensed Consolidated Financial Statements.

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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 and development 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 44.7 million square feet of gross leaseable area, that is either owned by us or others. We have a diversified tenant base, with our largest tenant comprising only 3.3% of base minimum rental revenue during the first six months of 2016. Total revenues generated by our centers located in Houston and its surrounding areas was 20.5% of total revenue for the six months ended June 30, 2016, and an additional 10.5% of total revenue was generated during this period from centers that are located in other parts of Texas.
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, 2015 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, 2015.
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.
Restricted Deposits and Mortgage Escrows
Restricted deposits and mortgage escrows consist of escrow deposits held by lenders primarily for property taxes, insurance and replacement reserves and restricted cash that is held for a specific use or in a qualified escrow account for the purposes of completing like-kind exchange transactions.
Our restricted deposits and mortgage escrows consist of the following (in thousands):
 
June 30,
2016
 
December 31,
2015
Restricted cash (1)
$
4,531

 
$
1,952

Mortgage escrows
1,121

 
1,122

Total
$
5,652

 
$
3,074

_______________
(1)
The increase between the periods presented is primarily attributable to $3.6 million of funds being placed in a qualified escrow account for the purpose of completing like-kind exchange transactions.

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Table of Contents

Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss by component consists of the following (in thousands):
 
Gain
on
Investments
 
Gain
on
Cash Flow
Hedges
 
Defined
Benefit
Pension
Plan
 
Total
Balance, December 31, 2015
$
(557
)
 
$
(8,160
)
 
$
16,361

 
$
7,644

Change excluding amounts reclassified from accumulated other comprehensive loss
(98
)
 
8,571

 
 
 
8,473

Amounts reclassified from accumulated other comprehensive loss


 
(731
)
(1) 
(753
)
(2) 
(1,484
)
Net other comprehensive (income) loss
(98
)
 
7,840

 
(753
)
 
6,989

Balance, June 30, 2016
$
(655
)
 
$
(320
)
 
$
15,608

 
$
14,633

 
Gain
on
Investments
 
Gain
on
Cash Flow
Hedges
 
Defined
Benefit
Pension
Plan
 
Total
Balance, December 31, 2014
$
(656
)
 
$
(3,416
)
 
$
16,508

 
$
12,436

Change excluding amounts reclassified from accumulated other comprehensive loss
(76
)
 
(5,388
)
 
 
 
(5,464
)
Amounts reclassified from accumulated other comprehensive loss


 
(709
)
(1) 
(720
)
(2) 
(1,429
)
Net other comprehensive income
(76
)
 
(6,097
)
 
(720
)
 
(6,893
)
Balance, June 30, 2015
$
(732
)
 
$
(9,513
)
 
$
15,788

 
$
5,543

_______________
(1)    This reclassification component is included in interest expense (see Note 6 for additional information).
(2)    This reclassification component is included in the computation of net periodic benefit cost (see Note 12 for additional information).
Deferred Compensation Plan
Our deferred compensation plan was amended, effective April 1, 2016, to permit participants in this plan to diversify their holdings of our common shares of beneficial interest ("common shares") six months after vesting. Thus, as of April 1, 2016, the fully vested share awards and the proportionate share of nonvested share awards eligible for diversification was reclassified from additional paid-in capital to temporary equity in our Condensed Consolidated Balance Sheet. The outstanding share awards are adjusted to their redemption value each reporting period based upon the market value of our common shares at the end of such reporting period, and such change in value from the prior reporting period will be reported in net income less than accumulated dividends in our Condensed Consolidated Statement of Equity. The following table summarizes the eligible share award activity since the effective date through June 30, 2016 (in thousands):
Value of share awards resulting from:
 
Change in classification
$
37,488

Change in redemption value
14,471

Diversification of share awards
(3,819
)
Balance at June 30, 2016
$
48,140

Retrospective Application of Accounting Standard Update
The retrospective application of adopting Accounting Standard Update No. 2015-02, "Amendments to the Consolidation Analysis" on prior years' condensed consolidated balance sheet and applicable notes to the consolidated financial statements was made to conform to the current year presentation. The impact of this change is described in Note 2.

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Note 2. Newly Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers." This ASU's core objective is for an entity to recognize revenue based on the consideration it expects to receive in exchange for goods or services. Additionally, this ASU requires entities to use a single model in accounting for revenues derived from contracts with customers. ASU No. 2014-09 replaces prior guidance regarding the recognition of revenue from sales of real estate, except for revenue from sales that are part of a sale-leaseback transaction. The provisions of ASU No. 2014-09, as amended in subsequently issued amendments, are effective for us on January 1, 2018, and are required to be applied either on a retrospective or a modified retrospective approach. We are currently assessing the impact, if any, that the adoption of this ASU will have on our consolidated financial statements.
In August 2014, the FASB issued ASU No. 2014-15, "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." This ASU's core objective is that management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued or are available to be issued. The provisions of ASU No. 2014-15 are effective for us as of December 31, 2016, and early adoption is permitted. We early adopted this update effective January 1, 2016, and the adoption did not have any impact to our consolidated financial statements.
In February 2015, the FASB issued ASU No. 2015-02, "Amendments to the Consolidation Analysis." This ASU amends the consolidation analysis required under GAAP and requires management to reevaluate all previous consolidation conclusions. ASU No. 2015-02 considers limited partnerships as VIEs, unless the limited partners have either substantive kick-out or participating rights. The presumption that a general partner should consolidate a limited partnership has also been eliminated. The ASU amends the effect that fees paid to a decision maker or service provider have on the consolidation analysis, as well as amends how variable interests held by a reporting entity's related parties affect the consolidation conclusion. The ASU also clarifies how to determine whether equity holders as a group have power over an entity. The provisions of ASU No. 2015-02 were effective for us as of January 1, 2016. Upon adoption of this update, we have reported 10 additional entities as VIEs, since the limited partners in these entities do not have either substantive kick-out or participating rights. The adoption expanded our VIE disclosures for these 10 entities, but had no impact to our condensed consolidated balance sheets or condensed consolidated statements of operations or cash flows as the consolidation status of these entities did not change. Retrospective disclosures associated with our VIEs were made to conform to the current year presentation.
In September 2015, the FASB issued ASU No. 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments." This ASU will allow measurement-period adjustments associated with business combinations recorded in the reporting period in which the adjustment amounts are determined, rather than retrospectively, as if the accounting for the business combination had been completed as of the acquisition date. The provisions of ASU No. 2015-16 were effective for us as of January 1, 2016. We have adopted this update, and the adoption did not have have any impact to our consolidated financial statements.
In January 2016, the FASB issued ASU No. 2016-01, "Recognition and Measurement of Financial Assets and Financial Liabilities." This ASU will require equity investments, excluding those investments accounted for under the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with the changes in fair value recognized in net income; will simplify the impairment assessment of those investments; will eliminate the disclosure of the method(s) and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost and change the fair value calculation for those investments; will change the disclosure in other comprehensive income for financial liabilities that are measured at fair value in accordance with the fair value options for financial instruments; and will clarify that a deferred asset related to available-for-sale securities should be included in an entity's evaluation for a valuation allowance. The provisions of ASU No. 2016-01 are effective for us as of January 1, 2018. We are currently assessing the impact, if any, that the adoption of this ASU will have on our consolidated financial statements.

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In February 2016, the FASB issued ASU No. 2016-02, "Leases." The ASU sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The ASU requires 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 this ASU is similar to current guidance, but certain underlying principles in the lessor model have been aligned with the new revenue recognition standard. The provisions of ASU No. 2016-02 are effective for us as of January 1, 2019, are required to be applied on a modified retrospective approach and early adoption is permitted. We are currently assessing the impact, if any, that the adoption of this ASU will have on our consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments." This ASU amends 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 provision of ASU No. 2016-13 are effective for us as of January 1, 2020, and early adoption is permitted for fiscal years beginning after December 15, 2018. We are currently assessing the impact, if any, that the adoption of this ASU will have on our consolidated financial statements.
Note 3. Property
Our property consists of the following (in thousands):
 
June 30,
2016
 
December 31,
2015
Land
$
952,879

 
$
929,958

Land held for development
90,064

 
95,524

Land under development
14,942

 
17,367

Buildings and improvements
3,318,140

 
3,152,215

Construction in-progress
70,510

 
67,895

Total
$
4,446,535

 
$
4,262,959

During the six months ended June 30, 2016, we sold three centers and other property. Aggregate gross sales proceeds from these transactions approximated $110.4 million and generated gains of approximately $46.2 million. Also, during the six months ended June 30, 2016, we acquired one center and other property with an aggregate gross purchase price of approximately $93.2 million and invested $16.5 million in new development projects. In February 2016, property increased by $58.7 million as a result of a business combination (see Note 17 for additional information).

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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 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 range from 20% to 75% for the periods presented. Combined condensed financial information of these ventures (at 100%) is summarized as follows (in thousands):
 
June 30,
2016
 
December 31,
2015
Combined Condensed Balance Sheets
 
 
 
ASSETS
 
 
 
Property
$
1,216,844

 
$
1,290,784

Accumulated depreciation
(254,672
)
 
(293,474
)
Property, net
962,172

 
997,310

Other assets, net
116,765

 
130,251

Total Assets
$
1,078,937

 
$
1,127,561

LIABILITIES AND EQUITY
 
 
 
Debt, net (primarily mortgages payable)
$
315,193

 
$
345,186

Amounts payable to Weingarten Realty Investors and Affiliates
12,608

 
12,285

Other liabilities, net
29,350

 
29,509

Total Liabilities
357,151

 
386,980

Equity
721,786

 
740,581

Total Liabilities and Equity
$
1,078,937

 
$
1,127,561

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Combined Condensed Statements of Operations
 
 
 
 
 
 
 
Revenues, net
$
34,146

 
$
36,587

 
$
70,068

 
$
73,705

Expenses:
 
 
 
 
 
 
 
Depreciation and amortization
10,605

 
9,203

 
19,986

 
18,583

Interest, net
5,622

 
4,235

 
9,630

 
8,652

Operating
6,358

 
6,771

 
13,961

 
13,236

Real estate taxes, net
4,494

 
4,725

 
8,986

 
9,257

General and administrative
312

 
333

 
455

 
535

(Benefit) provision for income taxes
(31
)
 
43

 
28

 
111

Impairment loss
—

 
7,487

 
1,303

 
7,487

Total
27,360

 
32,797

 
54,349

 
57,861

Gain on sale of non-operating property
—

 
—

 
373

 
—

Gain on dispositions
12,591

 
265

 
12,591

 
1,393

Net income
$
19,377

 
$
4,055

 
$
28,683

 
$
17,237


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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' 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 $2.6 million and $4.9 million at June 30, 2016 and December 31, 2015, respectively, are generally amortized over the useful lives of the related assets.
Our real estate joint ventures and partnerships have determined from time to time that the carrying amount of certain centers was not recoverable and that the centers should be written down to fair value. For the six months ended June 30, 2016, our unconsolidated real estate joint ventures and partnerships recorded an impairment charge of $1.3 million associated with a center that had been marketed and sold during the period. For both the three and six months ended June 30, 2015, there was a $7.5 million impairment charge realized on various centers that were marketed and sold during the three months ended June 30, 2015.
Fees earned by us for the management of these real estate joint ventures and partnerships totaled $1.1 million for both the three months ended June 30, 2016 and 2015, and $2.3 million for both the six months ended June 30, 2016 and 2015.
For the six months ended June 30, 2016, four centers and a land parcel were sold for an aggregate of approximately $63.7 million, of which our share of the gain totaled $3.4 million. Additionally, one center with a gross purchase price of $65 million was acquired, of which our net interest, of both our direct and indirect investments, aggregated 66%.
As of December 31, 2015, we held a combined 51% interest in an unconsolidated real estate joint venture that owned three centers in Colorado with total assets and debt of $43.7 million and $72.4 million, respectively. In February 2016, in exchange for our partners' aggregate 49% interest in this venture and $2.5 million in cash, we distributed one center to our partners. We have consolidated this venture as of the transaction date and re-measured our investment in this venture to its fair value (See Note 17 for additional information).
During 2015, we sold one center held in a 50% owned unconsolidated real estate joint venture for approximately $1.1 million, of which our share of the gain totaled $.6 million. Associated with this transaction, a gain of $.9 million on our investment of this real estate joint venture was realized. Additionally, we sold three centers and other property held in unconsolidated joint ventures for approximately $17.6 million, of which our share of the gain totaled $1.0 million. Also, a 51% owned unconsolidated real estate joint venture acquired real estate assets of approximately $54.1 million.
Note 5. Debt
Our debt consists of the following (in thousands):
 
June 30,
2016
 
December 31,
2015
Debt payable, net to 2038 (1)
$
1,863,401

 
$
1,872,942

Unsecured notes payable under credit facilities
98,000

 
149,500

Debt service guaranty liability
69,835

 
69,835

Obligations under capital leases
21,000

 
21,000

Total
$
2,052,236

 
$
2,113,277

_______________
(1)
At June 30, 2016, interest rates ranged from 1.7% to 8.6% at a weighted average rate of 4.2%. At December 31, 2015, interest rates ranged from 1.0% to 8.6% at a weighted average rate of 4.3%.

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The allocation of total debt between fixed and variable-rate as well as between secured and unsecured is summarized below (in thousands):
 
June 30,
2016
 
December 31,
2015
As to interest rate (including the effects of interest rate contracts):
 
 
 
Fixed-rate debt
$
1,924,649

 
$
1,869,683

Variable-rate debt
127,587

 
243,594

Total
$
2,052,236

 
$
2,113,277

As to collateralization:
 
 
 
Unsecured debt
$
1,597,315

 
$
1,650,521

Secured debt
454,921

 
462,756

Total
$
2,052,236

 
$
2,113,277

We maintain a $500 million unsecured revolving credit facility, which was amended and extended on March 30, 2016. This facility expires in March 2020, provides for two consecutive six-month extensions upon our request and borrowing rates that float at a margin over LIBOR plus a facility fee. At June 30, 2016, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, were 90 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 December 31, 2015, we had a $500 million unsecured revolving credit facility, which was amended and extended on April 18, 2013. This facility would have expired in April 2017, provided for two consecutive six-month extensions upon our request and had borrowing rates that floated at a margin over LIBOR plus a facility fee. At December 31, 2015, the borrowing margin and facility fee, which were priced off a grid that was tied to our senior unsecured credit ratings, were 105 and 15 basis points, respectively. The facility also contained a competitive bid feature that allowed us to request bids for up to $250 million. Additionally, an accordion feature allowed us to increase the facility amount up to $700 million.
Effective March 2015, we entered into an agreement with a bank for a short-term, unsecured facility totaling $20 million that we maintain for cash management purposes. We extended and amended this agreement to reduce the facility to $10 million on March 27, 2016. The facility, which matures in March 2017, provides 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 10 basis points, respectively.
The following table discloses certain information regarding our unsecured notes payable under our credit facilities (in thousands, except percentages):
 
June 30,
2016
 
December 31,
2015
Unsecured revolving credit facility:
 
 
 
Balance outstanding
$
95,000

 
$
140,000

Available balance
400,190

 
355,190

Letters of credit outstanding under facility
4,810

 
4,810

Variable interest rate (excluding facility fee)
1.3
%
 
1.3
%
Unsecured short-term facility:
 
 
 
Balance outstanding
$
3,000

 
$
9,500

Variable interest rate (excluding facility fee)
1.8
%
 
1.7
%
Both facilities:
 
 
 
Maximum balance outstanding during the period
$
200,000

 
$
244,500

Weighted average balance
128,381

 
100,506

Year-to-date weighted average interest rate (excluding facility fee)
1.3
%
 
0.9
%

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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 until a coverage rate of 1.4x 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 June 30, 2016 and December 31, 2015, we had $69.8 million outstanding for the debt service guaranty liability.
In June 2016, we amended an existing $90 million secured note to extend the maturity to 2028 and reduce the interest rate from 7.5% to 4.5% per annum. In connection with this transaction, we have recorded a $2.0 million gain on extinguishment of debt that has been classified as net interest expense in our Condensed Consolidated Statements of Operations.
In May 2015, we issued $250 million of 3.85% senior unsecured notes maturing in 2025. The notes were issued at 99.23% of the principal amount with a yield to maturity of 3.94%. The net proceeds received of $246.5 million were used to reduce the amount outstanding under our $500 million unsecured revolving credit facility.
In March 2015, we entered into a $200 million unsecured term loan. We used the proceeds to pay down amounts outstanding under our $500 million unsecured revolving credit facility. The loan matures in March 2020, and we have the option to repay the loan without penalty at any time. Borrowing rates under the agreement float at a margin over LIBOR and are priced off a grid that is tied to our senior unsecured credit ratings, which is currently 97.5 basis points, but have been swapped to a fixed rate of 2.5%. Additionally, the loan contains an accordion feature which allows us to increase the loan amount up to an additional $100 million.
During 2015, we repaid $90 million of fixed-rate medium term notes upon maturity at a weighted average interest rate of 5.4%. Additionally, we amended an existing $66 million secured note to extend the maturity to 2025 and reduced the interest rate from 7.4% to 3.5% per annum. In connection with this transaction, we have recorded a $6.1 million loss on extinguishment of debt that has been classified as net interest expense in our Condensed Consolidated Statements of Operations.
Various leases and properties, and current and future rentals from those leases and properties, collateralize certain debt. At June 30, 2016 and December 31, 2015, the carrying value of such assets aggregated $.7 billion and $.8 billion, respectively.
Scheduled principal payments on our debt (excluding $98.0 million unsecured notes payable under our credit facilities, $21.0 million of certain capital leases, $(4.3) million net premium/(discount) on debt, $(9.4) million of deferred debt costs, $5.6 million of non-cash debt-related items, and $69.8 million debt service guaranty liability) are due during the following years (in thousands): 
2016 remaining
$
78,835

2017
86,839

2018
87,974

2019
56,245

2020
237,779

2021
17,667

2022
307,858

2023
305,705

2024
255,965

2025
303,314

Thereafter
133,329

Total
$
1,871,510

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 June 30, 2016.

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Table of Contents

Note 6. Derivatives and Hedging
The fair value of all our interest rate swap contracts was reported as follows (in thousands):
 
Assets
 
Liabilities
 
Balance Sheet
Location
 
Amount
 
Balance Sheet
Location
 
Amount
Designated Hedges:
 
 
 
 
 
 
 
June 30, 2016
Other Assets, net
 
$
—

 
Other Liabilities, net
 
$
8,227

December 31, 2015
Other Assets, net
 
2,664

 
Other Liabilities, net
 
725

The gross presentation, the effects of offsetting for derivatives with the right to offset under master netting agreements and the net presentation of our interest rate swap contracts is as follows (in thousands):
 
 
 
 
 
 
 
Gross Amounts Not
Offset in Balance
Sheet
 
 
 
Gross
Amounts
Recognized
 
Gross
Amounts
Offset in
Balance
Sheet
 
Net
Amounts
Presented
in Balance
Sheet
 
Financial
Instruments
 
Cash
Collateral
Received
 
Net Amount
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
Liabilities
$
8,227

 
$
—

 
$
8,227

 
$
—

 
$
—

 
$
8,227

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
 
 
 
 
 
 
 
 
 
 
Assets
2,664

 
—

 
2,664

 
(346
)
 
—

 
2,318

Liabilities
725

 
—

 
725

 
(346
)
 
—

 
379

Cash Flow Hedges
As of June 30, 2016 and December 31, 2015, we had three interest rate swap contracts, maturing through March 2020, with an aggregate notional amount of $200 million that were designated as cash flow hedges and fix the LIBOR component of the interest rates at 1.5%. We have determined that these contracts are highly effective in offsetting future variable interest cash flows.
Also, at June 30, 2016, we had a forward-starting interest rate swap contract that will be effective in October 2016 with an aggregate notional amount of $200 million hedging future fixed-rate debt issuances. This contract matures in October 2026 and fixes the 10-year swap rate at 1.5% per annum.
During 2015, we entered into and settled two forward-starting interest rate swap contracts with an aggregate notional amount of $215 million hedging future fixed-rate debt issuances, which fixed the 10-year swap rates at 2.0% per annum. Upon settlement of these contracts during 2015, we received $5.0 million resulting in a gain in accumulated other comprehensive loss.
As of June 30, 2016 and December 31, 2015, the net gain balance in accumulated other comprehensive loss relating to cash flow interest rate swap contracts was $.3 million and $8.2 million, respectively, and will be reclassified to net interest expense as interest payments are made on the originally hedged debt. Within the next 12 months, a loss of approximately $2.3 million in accumulated other comprehensive loss is expected to be reclassified to net interest expense related to our interest rate contracts.

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Table of Contents

A summary of cash flow interest rate swap contract hedging activity is as follows (in thousands):
Derivatives Hedging
Relationships
 
Amount of
(Gain)
Loss 
Recognized
in Other
Comprehensive
Income on
Derivative 
(Effective
Portion)
 
Location of 
Gain (Loss)
Reclassified
from
Accumulated
Other
Comprehensive
Loss into
Income
 
Amount of
Gain (Loss)
Reclassified
from
Accumulated
Other
Comprehensive
Loss into
Income
(Effective
Portion)
 
Location of 
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion and
Amount 
Excluded from
Effectiveness
Testing)
 
Amount of 
Gain (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion and
Amount
Excluded
from
Effectiveness
Testing)
Three Months Ended June 30, 2016
 
$
4,140

 
Interest expense,
net
 
$
(360
)
 
Interest expense,
net
 
$
—

Six Months Ended June 30, 2016
 
8,571

 
Interest expense,
net
 
(731
)
 
Interest expense,
net
 
—

Three Months Ended June 30, 2015
 
(6,738
)
 
Interest expense,
net
 
(321
)
 
Interest expense,
net
 
—

Six Months Ended June 30, 2015
 
(5,388
)
 
Interest expense,
net
 
(709
)
 
Interest expense,
net
 
—

Fair Value Hedges
Associated with the refinancing of a secured note, on June 24, 2016, we terminated two interest rate swap contracts that were designated as fair value hedges and had an aggregate notional amount of $62.9 million. Upon settlement, we received $2.2 million, which was recognized as part of the gain on extinguishment of debt related to the hedged debt.
As of December 31, 2015, we had two interest rate swap contracts, maturing through October 2017, with an aggregate notional amount of $63.7 million that were designated as fair value hedges and convert fixed interest payments at rates of 7.5% to variable interest payments ranging from 4.41% to 4.44%. We have determined that our fair value hedges were highly effective in limiting our risk of changes in the fair value of fixed-rate notes attributable to changes in interest rates.
A summary of fair value interest rate swap contract hedging activity is as follows (in thousands):
 
Gain (Loss) 
on
Contracts
 
Gain (Loss) 
on
Borrowings
 
Net Settlements
 and Accruals
on Contracts (1) (3)
 
Amount of Gain 
(Loss)
Recognized in
Income (2) (3)
Three Months Ended June 30, 2016
 
 
 
 
 
 
 
Interest expense, net
$
(320
)
 
$
320

 
$
2,674

 
$
2,674

Six Months Ended June 30, 2016
 
 
 
 
 
 
 
Interest expense, net
(418
)
 
418

 
3,140

 
3,140

Three Months Ended June 30, 2015
 
 
 
 
 
 
 
Interest expense, net
(442
)
 
442

 
513

 
513

Six Months Ended June 30, 2015
 
 
 
 
 
 
 
Interest expense, net
(389
)
 
389

 
1,038

 
1,038

_______________
(1)
Amounts in this caption include gain (loss) recognized in income on derivatives and net cash settlements.
(2)
No ineffectiveness was recognized during the respective periods.
(3)
Included in each caption for both the three and six months ended June 30, 2016 is $2.2 million received upon the termination of two interest rate swap contracts.
Credit-risk-related Contingent Features
We have agreements with some of our derivative counterparties that contain a provision that if we default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we could also be declared in default on our derivative obligations.

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Table of Contents

As of June 30, 2016, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $7.1 million. As of June 30, 2016, we have not posted any collateral related to these agreements, and if we had breached any of the provisions, we would have been required to settle our obligations under them at their termination value of $7.1 million.
Note 7. Common Shares of Beneficial Interest
In February 2015, we established an at-the-market ("ATM") equity offering program under which we may, but are not obligated to, sell up to $200 million of common shares, in amounts and at times as we determine, at prices determined by the market at the time of sale. Actual sales may depend on a variety of factors including, among others, market conditions, the trading price of our common shares, and determinations by management of the appropriate sources of funding for us. We intend to use the net proceeds from future sales for general trust purposes, which may include reducing borrowings under our $500 million unsecured revolving credit facility, repaying other indebtedness or repurchasing outstanding debt.
The following shares were sold under the ATM equity offering program (in thousands, except per share amounts):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Shares sold
2,792

 
320

 
3,277
 
1,129

Weighted average price per share
$
38.32

 
$
35.91

 
$
38.16

 
$
36.18

Gross proceeds
$
106,992

 
$
11,476

 
$
125,058

 
$
40,836

As of the date of this filing, $34.1 million of common shares remained available for sale under this ATM equity program.
In October 2015, our Board of Trust Managers approved 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, we have not repurchased any shares under this plan.
Note 8. Noncontrolling Interests
The following table summarizes the effect of changes in our ownership interest in subsidiaries on the equity attributable to us as follows (in thousands):
 
Six Months Ended
June 30,
 
2016
 
2015
Net income adjusted for noncontrolling interests
$
142,890

 
$
83,676

Transfers from the noncontrolling interests:
 
 
 
Increase in equity for operating partnership units
—

 
111

Change from net income adjusted for noncontrolling interests
and transfers from the noncontrolling interests
$
142,890

 
$
83,787


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Table of Contents

Note 9. Supplemental Cash Flow Information
Non-cash investing and financing activities are summarized as follows (in thousands):
 
Six Months Ended
June 30,
 
2016
 
2015
Accrued property construction costs
$
7,895

 
$
6,412

Exchange of operating partnership units for common shares
—

 
111

Property acquisitions and investments in unconsolidated real estate joint ventures:
 
 
 
Increase in debt, net
—

 
20,116

Consolidation of real estate joint venture (see Note 17):
 
 
 
Increase in property, net
58,665

 
—

Increase in restricted deposits and mortgage escrows
30

 
—

Increase in debt, net
48,727

 
—

Increase in security deposits
169

 
—

Decrease in equity associated with deferred compensation plan (see Note 1)
48,140

 
—

Note 10. 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. Income from continuing operations attributable to common shareholders includes gain on sale of property in accordance with Securities and Exchange Commission guidelines. Earnings per common share – basic and diluted components for the periods indicated are as follows (in thousands):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
36,618

 
$
29,623

 
$
100,128

 
$
56,323

Gain on sale of property
1,033

 
8,163

 
46,190

 
30,685

Net income attributable to noncontrolling interests
(1,835
)
 
(1,757
)
 
(3,428
)
 
(3,332
)
Dividends on preferred shares
—

 
(1,120
)
 
—

 
(3,830
)
Redemption costs of preferred shares
—

 
(9,687
)
 
—

 
(9,687
)
Net income attributable to common shareholders - basic
35,816

 
25,222


142,890


70,159

Income attributable to operating partnership units
—

 
—

 
998

 
—

Net income attributable to common shareholders - diluted
$
35,816

 
$
25,222

 
$
143,888

 
$
70,159

Denominator:
 
 
 
 
 
 
 
Weighted average shares outstanding – basic
125,791

 
123,298

 
124,692

 
122,715

Effect of dilutive securities:
 
 
 
 
 
 
 
Share options and awards
1,053

 
1,252

 
1,136

 
1,344

Operating partnership units
—

 
—

 
1,462

 
—

Weighted average shares outstanding – diluted
126,844

 
124,550

 
127,290

 
124,059


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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
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Share options (1)
462

 
899

 
462

 
897

Operating partnership units
1,462

 
1,480

 
—

 
1,483

Total anti-dilutive securities
1,924

 
2,379

 
462

 
2,380

_______________
(1)
Exclusion results as exercise prices were greater than the average market price for each respective period.
Note 11. Share Options and Awards
During 2016, we granted restricted 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"). The terms of each grant vary depending upon the 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 restricted share awards are forfeited upon the termination of the participant’s employment with us.
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, 2016
 
Minimum
 
Maximum
Dividend yield
0.0
%
 
4.0
%
Expected volatility (1)
16.0
%
 
20.4
%
Expected life (in years)
N/A

 
3

Risk-free interest rate
0.5
%
 
0.9
%
_______________
(1)    Includes the volatility of the FTSE NAREIT U.S. Shopping Center index and Weingarten Realty Investors.
A summary of the status of unvested restricted share awards for the six months ended June 30, 2016 is as follows:
 
Unvested
Restricted
Share
Awards
 
Weighted
Average 
Grant
Date Fair 
Value
Outstanding, January 1, 2016
589,906

 
$
32.05

Granted:
 
 
 
Service-based awards
117,268

 
34.54

Market-based awards relative to FTSE NAREIT U.S. Shopping Center
Index
50,170

 
37.11

Market-based awards relative to three-year absolute TSR
50,170

 
24.20

Trust manager awards
24,983

 
37.63

Vested
(230,834
)
 
32.00

Forfeited
(9,054
)
 
33.98

Outstanding, June 30, 2016
592,609

 
$
32.53


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As of June 30, 2016 and December 31, 2015, there was approximately $3.2 million and $2.2 million, respectively, of total unrecognized compensation cost related to unvested restricted shares, which is expected to be amortized over a weighted average of 1.6 years and 0.8 years, respectively.
Note 12. 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
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Service cost
$
309

 
$
321

 
$
618

 
$
643

Interest cost
499

 
476

 
997

 
952

Expected return on plan assets
(729
)
 
(797
)
 
(1,458
)
 
(1,569
)
Recognized loss
376

 
360

 
753

 
720

Total
$
455

 
$
360

 
$
910

 
$
746

For the six months ended June 30, 2016 and 2015, we contributed $2.0 million and $1.5 million, respectively, to the qualified retirement plan. Currently, we do not anticipate making any additional contributions to this plan during 2016.
Defined Contribution Plans
Compensation expense related to our defined contribution plans was $.9 million and $.8 million for the three months ended June 30, 2016 and 2015, respectively, and $1.8 million and $2.1 million for six months ended June 30, 2016 and 2015, respectively.
Note 13. Related Parties
Through our management activities and transactions with our real estate joint ventures and partnerships, we had net accounts receivable of $1.6 million and $1.2 million outstanding as of June 30, 2016 and December 31, 2015, respectively. We also had accounts payable and accrued expenses of $5.2 million outstanding as of both June 30, 2016 and December 31, 2015. We recorded joint venture fee income for both the three months ended June 30, 2016 and 2015 of $1.1 million, and $2.3 million for both the six months ended June 30, 2016 and 2015.
As of December 31, 2015, we held a combined 51% interest in an unconsolidated real estate joint venture that owned three centers in Colorado with total assets and debt of $43.7 million and $72.4 million, respectively. In February 2016, in exchange for our partners' aggregate 49% interest in this venture and $2.5 million in cash, we distributed one center to our partners. We have consolidated this venture as of the transaction date and re-measured our investment in this venture to its fair value, and recognized a gain of $37.4 million (See Note 17 for additional information).
Note 14. Commitments and Contingencies
Commitments and Contingencies
As of June 30, 2016 and December 31, 2015, we participated in two real estate ventures structured as DownREIT partnerships that have centers in Arkansas, North Carolina and Texas. As a general partner, we have operating and financial control over these ventures and consolidate them in our consolidated financial statements. These ventures allow the outside limited partners to put their interest in the partnership to us. We may acquire any limited partnership interests that are put to the partnership, 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. No common shares were issued in exchange for any of these interests during the six months ended June 30, 2016. For the six months ended June 30, 2015, common shares valued at $.1 million were issued in exchange for certain of these interests. The aggregate redemption value of these interests was approximately $60 million and $51 million as of June 30, 2016 and December 31, 2015, respectively.
As of June 30, 2016, we have entered into commitments aggregating $52.2 million comprised principally of construction contracts which are generally due in 12 to 36 months.

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We have executed an agreement to purchase the retail portion of a mixed-use project for approximately $24.0 million at delivery by the developer, which is estimated to occur in early 2017. Including this payment, our expected total investment in the retail portion of the project is approximately $30.7 million.
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 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, we cannot give absolute assurance that changes in the law or new discoveries of contamination will not 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 consolidated financial statements.
Note 15. Variable Interest Entities
Consolidated VIEs
At June 30, 2016 and December 31, 2015, 11 of our real estate joint ventures, whose activities primarily consisted of owning and operating 30 neighborhood/community shopping centers, were determined to be VIEs. Based on a financing agreement by one of our real estate joint ventures that is guaranteed solely by us, 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' activities without any substantive kick-out or participating rights.
A summary of our consolidated VIEs is as follows (in thousands):
 
June 30,
2016
 
December 31,
2015
Assets Held by VIEs (1)
$
283,417

 
$
289,558

Assets Held as Collateral for Debt (2)
55,181

 
57,735

Debt Held by a VIE (2)
37,178

 
37,178

_______________
(1)
Upon adoption of ASU No. 2015-02, "Amendments to the Consolidation Analysis," prior year's amount was made to conform to the current year presentation. See Note 2 for additional information.
(2)
Represents the amount of debt and related assets held as collateral that are solely guaranteed by us at one real estate joint venture.

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Table of Contents

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 approval in accordance with the joint venture agreement for any major transactions. Transactions with these joint ventures on our 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 and unplanned capital expenditures. For the six months ended June 30, 2016, no additional contributions were made or are anticipated for these joint ventures.
In May 2015, the joint venture agreement related to a VIE, in which we guaranteed its debt, was amended to reflect an additional contribution of $43 million made by us to the joint venture in the form of a preferred equity arrangement. The amended agreement specified that these funds were to be used by the joint venture to pay down debt that became due. This arrangement provided the most favorable economics, including financing and taxation considerations, to the joint venture, as well as to us.
Unconsolidated VIEs
At June 30, 2016 and December 31, 2015, 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 success of the entity. A summary of our unconsolidated VIE is as follows (in thousands):
 
June 30,
2016
 
December 31,
2015
Investment in Real Estate Joint Ventures and Partnerships, net (1) (2)
$
—

 
$
10,497

Maximum Risk of Loss (3)
34,000

 
10,992

_______________
(1)
The carrying amount of the investment represents our contributions to the real estate joint venture, net of any distributions made and our portion of the equity in earnings of the joint venture.
(2)
As of June 30, 2016, the carrying amount of the investment is $(8) million, which is included in Other Liabilities as a result of the distribution of proceeds from the issuance of debt.
(3)
The maximum risk of loss has been determined to be limited to our debt exposure for the real estate joint venture.
We and our partner are subject to the provisions of the joint venture agreement that specify conditions, including operating shortfalls and unplanned capital expenditures, under which additional contributions may be required.
Note 16. Fair Value Measurements
Recurring Fair Value Measurements
Assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015, 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
Identical
Assets
and Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Fair Value at
June 30,
2016
Assets:
 
 
 
 
 
 
 
Investments, mutual funds held in a grantor trust
$
24,571

 
 
 
 
 
$
24,571

Investments, mutual funds
7,195

 
 
 
 
 
7,195

Total
$
31,766

 
$
—

 
$
—

 
$
31,766

Liabilities:
 
 
 
 
 
 
 
Derivative instruments:
 
 
 
 
 
 
 
Interest rate contracts
 
 
$
8,227

 
 
 
$
8,227

Deferred compensation plan obligations
$
24,571

 
 
 
 
 
24,571

Total
$
24,571

 
$
8,227

 
$
—

 
$
32,798


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Table of Contents

 
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,
2015
Assets:
 
 
 
 
 
 
 
Investments, mutual funds held in a grantor trust
$
20,579

 
 
 
 
 
$
20,579

Investments, mutual funds
7,043

 
 
 
 
 
7,043

Derivative instruments:
 
 
 
 
 
 
 
Interest rate contracts
 
 
$
2,664

 
 
 
2,664

Total
$
27,622

 
$
2,664

 
$
—

 
$
30,286

Liabilities:
 
 
 
 
 
 
 
Derivative instruments:
 
 
 
 
 
 
 
Interest rate contracts
 
 
$
725

 
 
 
$
725

Deferred compensation plan obligations
$
20,579

 
 
 
 
 
20,579

Total
$
20,579

 
$
725

 
$
—

 
$
21,304

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.
Schedule of our fair value disclosures is as follows (in thousands):
 
June 30, 2016
 
December 31, 2015
 
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)
Tax increment revenue bonds (1)
$
25,162

 
 
 
$
25,162

 
$
25,162

 
 
 
$
25,162

Investments, held to maturity (2)
4,247

 
$
4,252

 
 
 
1,750

 
$
1,750

 
 
Debt:
 
 
 
 
 
 
 
 
 
 
 
Fixed-rate debt
1,924,649

 
 
 
2,016,566

 
1,869,683

 
 
 
1,907,579

Variable-rate debt
127,587

 
 
 
124,839

 
243,594

 
 
 
248,460

_______________
(1)
At June 30, 2016 and December 31, 2015, the credit loss balance on our tax increment revenue bonds was $31.0 million.
(2)
Investments held to maturity are recorded at cost. As of June 30, 2016, these investments have a gross unrealized gain of $5 thousand, and as of December 31, 2015, no unrealized gain or loss was recognized.

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Table of Contents

The quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements as of June 30, 2016 and December 31, 2015 reported in the above tables, is as follows:

Description
 
Fair Value at
 
 
 
Unobservable
Inputs
 
Range
 
June 30,
2016
 
December 31,
2015
 
 
 
 
Minimum
 
Maximum
 
(in thousands)
 
Valuation Technique
 
 
2016
2015
 
2016
2015
Tax increment
revenue bonds
 
$
25,162

 
$
25,162

 
Discounted cash flows
 
Discount rate
 
6.5
%
6.5
%
 
7.5
%
7.5
%
 
 
 
 
 
 
 
 
Expected future
growth rate
 
1.0
%
1.0
%
 
2.0
%
2.0
%
 
 
 
 
 
 
 
 
Expected future
inflation rate
 
1.0
%
1.0
%
 
2.0
%
3.0
%
Fixed-rate debt
 
2,016,566

 
1,907,579

 
Discounted cash flows
 
Discount rate
 
2.3
%
2.4
%
 
5.4
%
5.5
%
Variable-rate
debt
 
124,839

 
248,460

 
Discounted cash flows
 
Discount rate
 
1.3
%
1.3
%
 
3.2
%
3.2
%
Note 17. Business Combination
Except as identified below, our aggregate acquisitions for 2016 and 2015 were not materially significant for disclosure purposes.
Effective February 12, 2016, we acquired a partner’s 49% interest in an unconsolidated joint venture associated with two centers in Colorado, which resulted in the consolidation of these centers (see Note 13 for additional information). Management has determined that this transaction qualified as a business combination to be accounted for under the acquisition method. Accordingly, the assets and liabilities of this transaction were recorded in our Condensed Consolidated Balance Sheet at their estimated fair values as of the effective date. Fair value of assets acquired, liabilities assumed and equity interests were estimated using market-based measurements, including cash flow and other valuation techniques. The fair value measurements are based on both significant inputs for similar assets and liabilities in comparable markets and significant inputs that are not observable in the markets in accordance with our fair value measurements accounting policy. Key assumptions include third-party appraisals; a minority interest discount rate of 20%; cash flow discount rates ranging from 6.5% to 8%; a terminal capitalization rate for similar properties ranging from 6% to 7.5%; and factors that we believe market participants would consider in estimating fair value. The result of this transaction is included in our Condensed Consolidated Statements of Operations beginning February 12, 2016.

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Table of Contents

The following table summarizes the business combination, including the assets acquired and liabilities assumed as indicated (in thousands):
 
February 12, 2016
 
Fair value of our equity interest before business combination
$
22,514

(1) 
Amounts recognized for assets and liabilities assumed:
 
 
Assets:
 
 
Property
$
58,665

 
Unamortized lease costs
8,936

 
Accrued rent and accounts receivable
102

 
Cash and cash equivalents
3,555

 
Other, net
4,992

 
Liabilities:
 
 
Debt, net
(48,727
)
 
Accounts payable and accrued expenses
(1,339
)
 
Other, net
(3,670
)
 
Total net assets
$
22,514

 
Gain recognized on equity interest remeasured to fair value
$
37,383

(2) 
___________________
(1)
Includes $2.5 million of cash received from the partner.
(2)
Amount is included in Gain on Sale and Acquisition of Real Estate Joint Venture and Partnership Interests in our Condensed Consolidated Statement of Operations.
The following table summarizes the impact to revenues and net income attributable to common shareholders from our business combination (in thousands):
 
Three Months Ended
June 30, 2016
 
Six Months Ended
June 30, 2016
Increase in revenues
$
1,709

 
$
2,655

Decrease in net income attributable to common shareholders
555

 
1,055

The following unaudited supplemental pro forma data is presented for the periods ended June 30, 2016 and 2015, as if the business combination occurring in 2016 was completed on January 1, 2015. The gain related to this business combination was adjusted to the assumed acquisition date. The unaudited supplemental pro forma data is not necessarily indicative of what the actual results of our operations would have been assuming the transaction had been completed as set forth above, nor does it purport to represent our results of operations for future periods (in thousands, except per share amounts):

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
Pro Forma
2016 (1)
 
Pro Forma
2015 (1)
 
Pro Forma
2016 (1)
 
Pro Forma
2015 (1)
Revenues
$
135,676

 
$
128,330

 
$
268,629

 
$
255,463

Net income
37,651

 
37,469

 
108,809

 
123,800

Net income attributable to common shareholders
35,816

 
24,905

 
105,381

 
106,951

Earnings per share – basic
.28

 
.20

 
.85

 
.87

Earnings per share – diluted
.28

 
.20

 
.84

 
.86

___________________
(1)
There are no non-recurring pro forma adjustments included within or excluded from the amounts in the preceding table.

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Table of Contents

Note 18. Subsequent Events
Subsequent to June 30, 2016, we acquired one center in Florida with a gross purchase price of $285 million, which was funded through our unsecured revolving credit facility. We anticipate that the purchase price of the recent acquisition will be allocated to land, building and other identifiable intangible assets and liabilities.
On July 27, 2016, to provide additional liquidity, we entered into a credit agreement for a $200 million unsecured term loan facility, which matures in July 2017, subject to a one year extension at our option (subject to our compliance with certain conditions). The borrowing rates float at a margin over LIBOR and are priced off a grid that is tied to our senior unsecured credit ratings. At the date of this filing, we had no amount of debt outstanding under this facility.
*****
ITEM 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations
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, 2015, factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) disruptions in financial markets, (ii) general economic and local real estate conditions, (iii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or general downturn in their business, (iv) financing risks, such as the inability to obtain equity, debt, or other sources of financing on favorable terms, (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 failure to qualify as a real estate investment trust, and (xii) investments through real estate joint ventures and partnerships, which involve risks not present in investments in which we are the sole investor. Accordingly, there is no assurance that our expectations will be realized. 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 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 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.
Executive Overview
Weingarten Realty Investors is a REIT organized under the Texas Business Organizations Code. We, and our predecessor entity, began the ownership and development 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 rental properties, primarily neighborhood and community shopping centers, totaling approximately 44.7 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 3.3% of base minimum rental revenues during the first six months of 2016.

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Table of Contents

At June 30, 2016, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 226 properties, which are located in 18 states spanning the country from coast to coast.
We also owned interests in 29 parcels of land held for development that totaled approximately 21.5 million square feet at June 30, 2016.
We had approximately 5,800 leases with 3,800 different tenants at June 30, 2016. Leases for our properties range from less than a year for smaller spaces to over 25 years for larger tenants. Rental revenues generally include minimum lease payments, which often increase over the lease term, reimbursements of property operating expenses, including real estate taxes, and additional rent payments 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. We believe the stability of our anchor tenants, combined with convenient locations, attractive and well-maintained properties, high quality retailers and a strong tenant mix, should ensure the long-term success of our merchants and the viability of our portfolio.
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) raising net asset value and cash flow through quality acquisitions, redevelopments and new developments, (2) maintaining a strong, flexible consolidated balance sheet and a well-managed debt maturity schedule and (3) growing net operating income from our existing portfolio by increasing occupancy and rental rates. We believe these initiatives will keep our portfolio of properties among the strongest in our sector. Due to very low capitalization rates in the market along with the uncertainty of increasing interest rates, we will continue to be very prudent in our evaluation of all new investment opportunities. We are beginning to see price declines on lower-quality assets in secondary and tertiary markets, which could reduce our disposition volumes. Additionally, the commercial mortgage-backed securities ("CMBS") market has been a significant source of financing for buyers of lower-tier assets. New financial market regulations have resulted in a fairly significant reduction in CMBS originations, which could affect our ability to sell properties.
We intend to recycle non-core operating centers that no longer meet our ownership criteria and that will provide capital for growth opportunities. During the six months ended June 30, 2016, 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 $126.6 million. We have approximately $127.3 million of dispositions currently under contracts or letters of intent; however, there are no assurances that these transactions will close at such prices or at all. For 2016, we believe we will complete dispositions in amounts between $125 million and $225 million; however, there are no assurances that this will actually occur.
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. During the six months ended June 30, 2016, we acquired two centers and other property, either directly or through our interest in real estate joint ventures or partnerships, with a total gross purchase price of $136.3 million. For 2016, we expect to invest in acquisitions in amounts between $425 million and $500 million; however, there are no assurances that this will actually occur.
As of December 31, 2015, we held a combined 51% interest in an unconsolidated real estate joint venture that owned three centers in Colorado with total assets and debt of $43.7 million and $72.4 million, respectively. In February 2016, in exchange for our partners' aggregate 49% interest in this venture and $2.5 million in cash, we distributed one center to our partners. We have consolidated this venture as of the transaction date and re-measured our investment in this venture to its fair value, and recognized a gain of $37.4 million.
We intend to continue to focus on identifying new development projects as another source of growth. Although we have only seen a few viable projects, a lack of supply in new retail space has driven a slight increase in new development activity and retailer interest, which we believe is a positive trend. During the six months ended June 30, 2016, we invested $14.0 million in three new development projects.
In addition, we intend to continue to look for internal growth opportunities. At June 30, 2016, we had 13 redevelopment projects in which we plan to invest approximately $85.4 million. Upon completion, the average projected stabilized return on our incremental investment on these redevelopment projects is expected to average around 11%. During the six months ended June 30, 2016, we completed one redevelopment project that added approximately 6,700 incremental square feet to the total portfolio with an incremental investment totaling $1.3 million. Additionally, we began redevelopment activities on a shopping center in south Florida where we estimate a capital investment totaling $17 million.

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For 2016, we expect to invest in new development and redevelopments in the range of $50 million to $100 million, but we can give no assurances that this will actually occur.
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.
In March 2016, we amended and extended our $500 million unsecured revolving credit facility. This facility expires in March 2020, provides for two consecutive six-month extensions upon our request and borrowing rates that float at a margin over LIBOR plus a facility fee. The borrowing margin improved under the new agreement to LIBOR plus 90 basis points, a decrease of 15 basis points. 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. We intend to use the proceeds from the facility to fund acquisition, new development and redevelopment activities, and for general corporate purposes.
In June 2016, we amended an existing $90 million secured note to extend the maturity to 2028 and reduce the interest rate from 7.5% to 4.5% per annum. In connection with this transaction, we have recorded a $2.0 million gain on extinguishment of debt that has been classified as net interest expense in our Condensed Consolidated Statements of Operations.
We have an ATM equity offering program under which we may, but are not obligated to, sell up to $200 million of common shares, in amounts and at times as we determine, at prices determined by the market at the time of sale. We intend to use the net proceeds from future sales for general trust purposes, which may include reducing borrowings under our $500 million unsecured revolving credit facility, repaying other indebtedness or repurchasing outstanding debt. During the six months ended June 30, 2016, we sold 3,277,187 common shares with gross proceeds totaling $125.1 million. As of the date of this filing, $34.1 million of common shares remained available for sale under this ATM equity program.
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, we have not repurchased any shares under this plan.
Subsequent to June 30, 2016, we acquired one center in Florida with a gross purchase price of $285 million, which was funded through our unsecured revolving credit facility. To provide additional liquidity, we entered into a credit agreement for a $200 million unsecured term loan facility, which matures in July 2017, subject to a one year extension at our option (subject to our compliance with certain conditions). The borrowing rates float at a margin over LIBOR and are priced off a grid that is tied to our senior unsecured credit ratings. At the date of this filing, we had no amount of debt outstanding under this facility. In addition, we have an effective universal shelf registration statement which expires in September 2017. 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.
We believe that these transactions should continue to strengthen our consolidated balance sheet and further enhance our access to various sources of capital, while reducing our cost of capital. Due to the variability in the capital markets, there can be no assurance that favorable pricing and availability will be available in the future.
Operational Metrics
In assessing the performance of our centers, management carefully monitors various operating metrics of the portfolio. As a result of our strong leasing activity, low tenant fallout and lack of quality retail space in the market, the operating metrics of our portfolio remained very strong in 2016 as we focused on increasing rental rates and same property net operating income ("SPNOI" and see Non-GAAP Financial Measures for additional information). Our portfolio delivered solid operating results with:
•
Occupancy of 94.9% at June 30, 2016;
•
an increase of 3.3% in SPNOI including redevelopments for the three months ended June 30, 2016 over the same period of 2015; and
•
rental rate increases of 29.4% for new leases and 14.4% for renewals were realized during the three months ended June 30, 2016.

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Below are performance metrics associated with our signed occupancy, SPNOI growth and leasing activity on a pro rata basis:
 
June 30,
 
2016
 
2015
Anchor (space of 10,000 square feet or greater)
97.7
%
 
98.7
%
Non-Anchor
90.2
%
 
90.3
%
Total Occupancy
94.9
%
 
95.5
%
 
Three Months Ended
June 30, 2016
 
Six Months Ended
June 30, 2016
SPNOI Growth with Redevelopments (1)
3.3
%
 
3.0
%
_______________
(1)
See Non-GAAP Financial Measures for a definition of the measurement of SPNOI and a reconciliation to operating income within this section of Item 2.
 
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 June 30, 2016
 
 
 
 
 
 
New leases (1)
59

 
211

 
$
19.63

 
$
15.16

 
$
33.26

 
29.4
%
Renewals
157

 
532

 
19.80

 
17.31

 
.47

 
14.4
%
Not comparable spaces
35

 
69

 
 
 
 
 
 
 
 
Total
251

 
812

 
$
19.75

 
$
16.70

 
$
9.78

 
18.2
%
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2016
 
 
 
 
 
 
New leases (1)
113

 
356

 
$
23.13

 
$
17.52

 
$
34.02

 
32.0
%
Renewals
376

 
1,810

 
16.91

 
15.21

 
.16

 
11.1
%
Not comparable spaces
66

 
131

 
 
 
 
 
 
 
 
Total
555

 
2,297

 
$
17.93

 
$
15.59

 
$
5.73

 
15.0
%
_______________
(1)
Average external lease commissions per square foot for the three and six months ended June 30, 2016 were $4.66 and $5.91, respectively.
While we will continue to monitor the economy and the effects on our tenants, over the long-term, we believe the significant diversification of our portfolio, both geographically and by tenant base, and the quality of our portfolio will allow future increases to occupancy levels. However, we anticipate the bankruptcy proceedings for The Sports Authority will result in the rejection of most, if not all, of their leases at our remaining six locations, which is expected to negatively affect our occupancy and SPNOI until we re-lease and commence rent on these spaces. Occupancy may also be affected over the next several quarters as we continue to maximize our long-term portfolio value by repositioning some of our anchor space. A reduction in quality retail space available, as well as improving retailer demand, contributed to the increase in overall rental rates on a same-space basis as we completed new leases and renewed existing leases. Leasing volume is anticipated to decline as we have less vacant space available for leasing. Our expectation is that SPNOI growth with redevelopments will average between 3.0% to 4.0% for 2016, although there are no assurances that this will occur.
New Development/Redevelopment
At June 30, 2016, we had three projects under development. We have funded $59.7 million through June 30, 2016 on these projects, and we estimate our aggregate net investment upon completion to be $100.8 million. Overall, the average projected stabilized return on investment for these properties is expected to be approximately 7.5% upon completion. Effective January 1, 2016, we stabilized our development in Alexandria, Virginia, moving it to our operating property portfolio. This development is 100% leased with an investment of $65 million and an 8% yield.

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We have 13 redevelopment projects in which we plan to invest approximately $85.4 million. Upon completion, the average projected stabilized return on our incremental investment on these redevelopment projects is expected to average around 11%. During the six months ended June 30, 2016, we completed one redevelopment project that added approximately 6,700 incremental square feet to the total portfolio with an incremental investment totaling $1.3 million. Additionally, we began redevelopment activities on a shopping center in south Florida where we estimate a capital investment totaling $17 million.
We had approximately $90.1 million in land held for development at June 30, 2016 that may either be developed or sold. While we are experiencing a greater 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 of high-quality core properties on the market, has in many cases driven pricing to pre-recession highs. 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.
Summary of Critical Accounting Policies
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. We base our estimates on 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.
A disclosure of our critical accounting policies 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, 2015 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. There have been no significant changes to our critical accounting policies during 2016.

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Results of Operations
Comparison of the Three Months Ended June 30, 2016 to the Three Months Ended June 30, 2015
The following table is a summary of certain items in income from continuing operations from our Condensed Consolidated Statements of Operations, which we believe represent items that significantly changed during the three months ended June 30, 2016 as compared to the same period in 2015:
 
Three Months Ended June 30,
 
2016
 
2015
 
Change
 
% Change
Revenues
$
135,676

 
$
126,804

 
$
8,872

 
7.0
 %
Depreciation and amortization
39,218

 
36,451

 
2,767

 
7.6

Operating expenses
24,663

 
22,200

 
2,463

 
11.1

Real estate taxes, net
17,221

 
15,498

 
1,723

 
11.1

Interest expense, net
18,558

 
20,292

 
(1,734
)
 
(8.5
)
Equity in earnings of real estate joint
ventures and partnerships, net
6,645

 
3,212

 
3,433

 
106.9

Revenues
The increase in revenues of $8.9 million is primarily attributable to our acquisitions and new development completions that totaled $6.6 million. The existing portfolio and redevelopment properties contributed $6.1 million, which is offset by our dispositions of $3.8 million.
Depreciation and Amortization
The increase in depreciation and amortization of $2.8 million is primarily attributable to our acquisitions and new development completions that totaled $3.8 million, which is offset by our dispositions in 2016 and 2015 and other capital activities.
Operating Expenses
The increase in operating expenses of $2.5 million is primarily attributable to our acquisitions and new development completions, which totaled $1.2 million, and an overall increase at our existing portfolio and redevelopment properties associated primarily with the timing of repairs.
Real Estate Taxes, net
The increase in net real estate taxes of $1.7 million is primarily attributable to our acquisitions and new development completions that totaled $.9 million, as well as rate and valuation changes for the portfolio, which is offset by our dispositions of $.3 million.
Interest Expense, net
Net interest expense decreased $1.7 million or 8.5%. The components of net interest expense were as follows (in thousands): 
 
Three Months Ended
June 30,
 
2016
 
2015
Gross interest expense
$
20,607

 
$
20,479

(Gain) loss on extinguishment of debt
(2,037
)
 
—

Amortization of debt deferred costs, net
890

 
843

Over-market mortgage adjustment
(285
)
 
(188
)
Capitalized interest
(617
)
 
(842
)
Total
$
18,558

 
$
20,292

The decrease in net interest expense is attributable primarily to $2.0 million gain on extinguishment of debt in the second quarter of 2016 associated with the refinancing of a secured note. For the three months ended June 30, 2016, the weighted average debt outstanding was $2.1 billion at a weighted average interest rate of 4.0% as compared to $2.0 billion outstanding at a weighted average interest rate of 4.2% in the same period of 2015.

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Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
The increase of $3.4 million is primarily attributable to an increase in our share of the gain on sale associated with the disposition activities in the respective periods.
Comparison of the Six Months Ended June 30, 2016 to the Six Months Ended June 30, 2015
The following table is a summary of certain items in income from continuing operations from our Condensed Consolidated Statements of Operations, which we believe represent items that significantly changed during the six months ended June 30, 2016 as compared to the same period in 2015:
 
Six Months Ended June 30,
 
2016
 
2015
 
Change
 
% Change
Revenues
$
268,093

 
$
252,403

 
$
15,690

 
6.2
 %
Depreciation and amortization
77,097

 
72,602

 
4,495

 
6.2

Operating expenses
48,199

 
44,785

 
3,414

 
7.6

Real estate taxes, net
33,078

 
30,125

 
2,953

 
9.8

Interest expense, net
39,449

 
46,750

 
(7,301
)
 
(15.6
)
Interest and other income
572

 
3,140

 
(2,568
)
 
(81.8
)
Gain on sale and acquisition of real estate joint
venture and partnership interests
37,392

 
879

 
36,513

 
4,153.9

Equity in earnings of real estate joint
ventures and partnerships, net
10,738

 
8,584

 
2,154

 
25.1

Provision for income taxes
5,915

 
435

 
5,480

 
1,259.8

Revenues
The increase in revenues of $15.7 million is primarily attributable to our acquisitions and new development completions that totaled $13.0 million. The existing portfolio and redevelopment properties contributed $10.4 million, which is offset by our dispositions of $7.7 million.
Depreciation and Amortization
The increase in depreciation and amortization of $4.5 million is primarily attributable to our acquisitions and new development completions that totaled $6.8 million, which is offset by our dispositions in 2016 and 2015 and other capital activities.
Operating Expenses
The increase in operating expenses of $3.4 million is primarily attributable to our acquisitions and new development completions, which totaled $2.1 million, and an overall increase at our existing portfolio and redevelopment properties associated primarily with the timing of repairs.
Real Estate Taxes, net
The increase in net real estate taxes of $3.0 million is primarily attributable to our acquisitions and new development completions that totaled $1.7 million, as well as rate and valuation changes for the portfolio, which is offset by our dispositions of $.6 million.

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Interest Expense, net
Net interest expense decreased $7.3 million or 15.6%. The components of net interest expense were as follows (in thousands): 
 
Six Months Ended
June 30,
 
2016
 
2015
Gross interest expense
$
41,319

 
$
41,111

(Gain) loss on extinguishment of debt
(2,037
)
 
6,100

Amortization of debt deferred costs, net
1,767

 
1,588

Over-market mortgage adjustment
(463
)
 
(376
)
Capitalized interest
(1,137
)
 
(1,673
)
Total
$
39,449

 
$
46,750

The decrease in net interest expense is attributable primarily to the $8.1 million decrease in debt extinguishment activities within the respective periods. In 2016, a $2.0 million gain was realized as compared to a $6.1 million loss in 2015. For the six months ended June 30, 2016, the weighted average debt outstanding was $2.1 billion at a weighted average interest rate of 4.0% as compared to $2.0 billion outstanding at a weighted average interest rate of 4.3% in the same period of 2015.
Interest and Other Income
The decrease in net interest and other income of $2.6 million is primarily attributable to a $1.7 million litigation settlement received in 2015 and a $.7 million decrease in the fair value of assets held in a grantor trust related to our deferred compensation plan.
Gain on Sale and Acquisition of Real Estate Joint Venture and Partnership Interests
The gain in 2016 is primarily attributable with the re-measurement of our 51% unconsolidated real estate partnership interest to fair value associated with the exchange of properties among the partners. The gain in 2015 is primarily attributable to our return of equity associated with an unconsolidated joint venture's disposition of its real estate property.
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
The increase of $2.2 million is primarily attributable to an increase in our share of the gain on sale associated with the disposition activities in the respective periods.
Provision for Income Taxes
The increase of $5.5 million in the provision for income taxes is attributable to a deferred tax provision of $5.5 million during the six months ended June 30, 2016 in our taxable REIT subsidiary associated primarily with the gain from the exchange properties among the partners of an unconsolidated real estate joint venture.
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 2016 business plan, cash flows from operating activities are expected to meet these planned capital needs.
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 common and preferred equity issuances; and cash generated from the sale of property 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, common and preferred equity, cash generated from the disposition of properties and cash flow generated by our operating properties.
As of June 30, 2016, we had an available borrowing capacity of $400.2 million under our unsecured revolving credit facility, and our debt maturities for the remainder of 2016 total $78.8 million. During March 2016, we amended our revolver agreement to, among other things, extend the maturity date to March 2020, with a provision to extend the maturity date for two consecutive six-month periods, at our option. Additionally, the facility also allows us to increase the facility amount up to $850 million. We intend to use this facility to fund acquisition, new development and redevelopment activities, and for general corporate purposes.

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Subsequent to June 30, 2016, we acquired one center in Florida with a gross purchase price of $285 million, which was funded through our unsecured revolving credit facility. To provide additional liquidity, we entered into a credit agreement for a $200 million unsecured term loan facility, which matures in July 2017, subject to a one year extension at our option (subject to our compliance with certain conditions). The borrowing rates float at a margin over LIBOR and are priced off a grid that is tied to our senior unsecured credit ratings. At the date of this filing, we had no amount of debt outstanding under this facility. In addition, we have an effective universal shelf registration statement which expires in September 2017. 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.
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 based on management's evaluation of market conditions and other factors. As of the date of this filing, we have not repurchased any shares under this plan.
Also, we have an ATM equity offering program under which we may, but are not obligated to, sell up to $200 million of common shares, in amounts and at times as we determine, at prices determined by the market at the time of sale. We intend to use the net proceeds from future sales for general trust purposes, which may include reducing borrowings under our $500 million unsecured revolving credit facility, repaying other indebtedness or repurchasing outstanding debt. During the six months ended June 30, 2016, we sold 3,277,187 common shares with gross proceeds totaling $125.1 million. As of the date of this filing, $34.1 million of common shares remained available for sale under this ATM equity program.
We believe net proceeds from these transactions and planned capital recycling, combined with our available capacity under the credit facilities, will provide adequate liquidity to fund our capital needs, including acquisitions, redevelopments and new development activities. In the event our capital recycling program does not progress as expected, we believe other debt and equity alternatives are available to us. Although external market conditions are not within our control, we do not currently foresee any reason that would prevent us from entering the capital markets if needed.
During 2016, aggregate gross sales proceeds from our dispositions totaled $126.6 million, which were owned by us either directly or through our interest in real estate joint ventures or partnerships. Operating cash flows from dispositions are included in net cash from operating activities in our Condensed Consolidated Statements of Cash Flows, while proceeds from dispositions 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. Off-balance sheet mortgage debt for our unconsolidated real estate joint ventures and partnerships totaled $315.2 million, of which our pro rata ownership is $114.1 million, at June 30, 2016. Scheduled principal mortgage payments on this debt, excluding deferred debt costs and non-cash related items totaling $(.9) million, at 100% are as follows (in millions): 
2016 remaining
$
2.5

2017
23.5

2018
5.9

2019
6.2

2020
92.8

Thereafter
185.2

Total
$
316.1

We hedge the future cash flows of certain debt transactions, as well as changes in the fair value of our debt instruments, principally through interest rate swap contracts with major financial institutions. 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 consent for assets held in special purpose entities that are 100% owned by us.
Investing Activities
Acquisitions
During 2016, we acquired two centers and other property with an aggregate gross purchase price of $136.3 million, either directly or through our interest in real estate joint ventures or partnerships.

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Dispositions
During 2016, we sold seven centers and other property, including real estate assets through our interest in unconsolidated real estate joint ventures and partnerships. Our share of aggregate gross sales proceeds from these transactions totaled $126.6 million and generated our share of the gains of approximately $48.6 million.
Joint Venture
As of December 31, 2015, we held a combined 51% interest in an unconsolidated real estate joint venture that owned three centers in Colorado with total assets and debt of $43.7 million and $72.4 million, respectively. In February 2016, in exchange for our partners' aggregate 49% interest in this venture and $2.5 million in cash, we distributed one center to our partners. We have consolidated this venture as of the transaction date and re-measured our investment in this venture to its fair value, and recognized a gain of $37.4 million.
New Development/Redevelopment
At June 30, 2016, we had three projects under development with a total square footage of approximately .3 million, of which we have funded $59.7 million through June 30, 2016 on these projects. Upon completion, we expect our aggregate net investment in these projects to be $100.8 million. Effective January 1, 2016, we stabilized our development in Alexandria, Virginia, moving it to our operating property portfolio. This development is 100% leased with an investment of $65 million and an 8% yield.
At June 30, 2016, we had 13 redevelopment projects in which we plan to invest approximately $85.4 million. Upon completion, the average projected stabilized return on our incremental investment on these redevelopment projects is expected to average around 11%. During the six months ended June 30, 2016, we completed one redevelopment project that added approximately 6,700 incremental square feet to the total portfolio with an incremental investment totaling $1.3 million. Additionally, we began redevelopment activities on a shopping center in south Florida where we estimate a capital investment totaling $17 million.
Our new development and redevelopment projects are financed generally under our unsecured revolving credit facility, as it is our general practice not to use third party construction financing. Management monitors amounts outstanding under our unsecured revolving credit facility and periodically pays down such balances using cash generated from operations, from debt issuances, from common and preferred share issuances and from the disposition of properties.
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):
 
Six Months Ended
June 30,
 
2016
 
2015
Acquisitions
$
134,096

 
$
152,174

Tenant Improvements
11,849

 
9,082

New Development
13,580

 
15,493

Redevelopment
13,784

 
6,623

Capital Improvements
6,459

 
2,829

Other
7,769

 
4,478

Total
$
187,537

 
$
190,679

For 2016, we anticipate our acquisitions to total between $425 million and $500 million. Our new development and redevelopment investment for 2016 is estimated to be approximately $50 million to $100 million. For 2016, capital and tenant improvements is expected to be consistent with 2015 expenditures. No assurances can be provided that our planned capital activities will occur. Further, we have entered into commitments aggregating $52.2 million comprised principally of construction contracts which are generally due in 12 to 36 months and anticipated to be funded under our unsecured revolving credit facility.

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Capital expenditures for additions described above relate to cash flows from investing activities as follows(in thousands):
 
Six Months Ended
June 30,
 
2016
 
2015
Acquisition of real estate and land
$
92,071

 
$
124,914

Development and capital improvements
53,441

 
38,505

Real estate joint ventures and partnerships - Investments
42,025

 
27,260

Total
$
187,537

 
$
190,679

Capitalized soft costs, including payroll and other general and administrative costs, interest and real estate taxes, totaled $4.6 million and $5.2 million for the six months ended June 30, 2016 and 2015, respectively.
Financing Activities
Debt
Total debt outstanding was $2.1 billion at June 30, 2016 and included $1.9 billion, including the effect of $200 million of interest rate swap contracts, which bears interest at fixed rates, and $127.6 million, which bears interest at variable rates. Additionally, of our total debt, $454.9 million was secured by operating centers while the remaining $1.6 billion was unsecured.
At June 30, 2016, we have a $500 million unsecured revolving credit facility,which expires in March 2020 and provides borrowing rates that float at a margin over LIBOR plus a facility fee. At June 30, 2016, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, were 90 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 July 28, 2016, we had $372.0 million outstanding, and the available balance was $123.2 million, net of $4.8 million in outstanding letters of credit. The increased balance in the unsecured revolving credit facility is attributable primarily to the Florida acquisition that occurred subsequent to June 30, 2016.
Effective March 2015, we entered into an agreement with a bank for a short-term, unsecured facility totaling $20 million that we maintain for cash management purposes. We extended and amended this agreement to reduce the facility to $10 million on March 27, 2016. The facility, which matures in March 2017, 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 10 basis points, respectively. As of July 28, 2016, we had no amounts outstanding.
For the six months ended June 30, 2016, the maximum balance and weighted average balance outstanding under both facilities combined were $200.0 million and $128.4 million, respectively, at a weighted average interest rate of 1.3%.
In June 2016, we amended an existing $90 million secured note to extend the maturity to 2028 and reduce the interest rate from 7.5% to 4.5% per annum. In connection with this transaction, we have recorded a $2.0 million gain on extinguishment of debt that has been classified as net interest expense in our Condensed Consolidated Statements of Operations.
Our five most restrictive covenants include debt to assets, secured debt to assets, fixed charge and unencumbered interest coverage and debt yield ratios. We are not aware of any non-compliance with our public debt and revolving credit facility covenants as of June 30, 2016.
Our most restrictive public debt covenant ratios, as defined in our indenture and supplemental indenture agreements, were as follows at June 30, 2016:
Covenant
 
Restriction
 
Actual
Debt to Asset Ratio
 
Less than 60.0%
 
41.4%
Secured Debt to Asset Ratio
 
Less than 40.0%
 
9.2%
Annual Service Charge Ratio
 
Greater than 1.5
 
4.1
Unencumbered Asset Test
 
Greater than 150%
 
245.7%

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At June 30, 2016, we had three interest rate swap contracts with an aggregate notional amount of $200 million that were designated as cash flow hedges. These contracts mature through March 2020 and fix the LIBOR component of the interest rates at 1.5%. We have determined that these contracts are highly effective in offsetting future variable interest cash flows.
Also, at June 30, 2016, we had a forward-starting interest rate swap contract that will be effective in October 2016 with an aggregate notional amount of $200 million hedging future fixed-rate debt issuances. This contract matures in October 2026 and fixes the 10-year swap rate at 1.5% per annum.
Associated with the refinancing of a secured note, on June 24, 2016, we terminated two interest rate swap contracts that were designated as fair value hedges and had an aggregate notional amount of $62.9 million. Upon settlement, we received $2.2 million, which was recognized as part of the gain on extinguishment of debt related to the hedged debt.
We could be exposed to losses in the event of nonperformance by the counter-parties related to our interest rate swap contracts; however, management believes such nonperformance is unlikely.
Equity
Our Board of Trust Managers approved an increase in our second quarter 2016 quarterly dividend rate for our common shares from $.345 to $.365. Common share dividends paid totaled $91.7 million during the first six months of 2016. Our dividend payout ratio (as calculated as dividends paid on common shares divided by funds from operations attributable to common shareholders - basic) for the six months ended June 30, 2016 approximated 65.2%, which include a deferred tax expense associated with the gain from the exchange properties among the partners of an unconsolidated real estate joint venture.
We have an ATM equity offering program under which we may, but are not obligated to, sell up to $200 million of common shares, in amounts and at times as we determine, at prices determined by the market at the time of sale. We intend to use the net proceeds from future sales for general trust purposes, which may include reducing borrowings under our $500 million unsecured revolving credit facility, repaying other indebtedness or repurchasing outstanding debt. During the six months ended June 30, 2016, we sold 3,277,187 common shares with gross proceeds totaling $125.1 million. As of the date of this filing, $34.1 million of common shares remained available for sale under this ATM equity program.
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, we have not repurchased any shares under this plan.
We have an effective universal shelf registration statement which expires in September 2017. 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 non-cancelable long-term ground leases where a third party owns and has leased the underlying land to us to construct and/or operate a shopping center. In addition, we have non-cancelable operating leases pertaining to office space from which we conduct our business. The table below excludes obligations related to our new development projects because such amounts are not fixed or determinable, and commitments aggregating $52.2 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 June 30, 2016 (in thousands):
 
Remaining
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
 
2017
 
2018
 
2019
 
2020
 
Thereafter
 
Total
Mortgages and Notes
Payable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured Debt
$
124,391

 
$
74,861

 
$
58,359

 
$
48,411

 
$
244,315

 
$
1,360,584

 
$
1,910,921

Secured Debt
12,173

 
80,276

 
90,650

 
65,731

 
42,429

 
255,004

 
546,263

Lease Payments
1,557

 
3,135

 
3,114

 
3,056

 
2,725

 
115,801

 
129,388

Other Obligations (2)
25,146

 
59,480

 
—

 
—

 
—

 
—

 
84,626

Total Contractual
Obligations
$
163,267

 
$
217,752

 
$
152,123

 
$
117,198

 
$
289,469

 
$
1,731,389

 
$
2,671,198

 
_______________
(1)
Includes principal and interest with interest on variable-rate debt calculated using rates at June 30, 2016, excluding the effect of interest rate swaps. Also, excludes a $69.8 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 2016, and therefore are excluded from the above table. Included in 2017 is a purchase obligation of $24.0 million. See Note 14 for additional information.
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 $69.8 million remain outstanding at June 30, 2016. 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 consolidated financial statements as of June 30, 2016.
Off-Balance Sheet Arrangements
As of June 30, 2016, 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 $4.8 million were outstanding under the unsecured revolving credit facility at June 30, 2016.
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 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.
As of June 30, 2016, 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 million at June 30, 2016.

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We are working with a developer of a mixed-use project in the state of Washington and have executed an agreement to purchase the retail portion of the project for approximately $24.0 million at closing, which is estimated to be in early 2017.
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
The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations attributable to common shareholders ("NAREIT FFO") as net income (loss) attributable to common shareholders computed in accordance with GAAP, excluding extraordinary items and gains or losses from sales of operating real estate assets and interests in real estate equity investments, plus depreciation and amortization of operating properties and impairment of depreciable real estate and in substance real estate equity investments, including our share of unconsolidated real estate joint ventures and partnerships. We calculate NAREIT FFO in a manner consistent with the NAREIT definition.
We believe 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 funds from operations attributable to common shareholders (“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 and non-operating transactions and other events that hinder the comparability of operating results of our core portfolio of properties. Specific examples of items excluded from Core FFO include, but are not limited to, gains or losses associated with the extinguishment of debt or other liabilities, impairments of land, transactional costs associated with acquisition and development activities, certain deferred tax provisions/benefits, redemption costs of preferred shares and gains on the disposal of non-real estate assets.
NAREIT FFO and Core FFO should not be considered as alternatives to net income or other measurements under GAAP as indicators of our 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
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Net income attributable to common shareholders
$
35,816

 
$
25,222

 
$
142,890

 
$
70,159

Depreciation and amortization
38,519

 
35,767

 
75,728

 
71,030

Depreciation and amortization of unconsolidated real estate joint ventures and partnerships
3,993

 
3,468

 
7,679

 
6,978

Impairment of operating properties and real estate equity investments
—

 
153

 
—

 
153

Impairment of operating properties of unconsolidated real estate joint ventures and partnerships
—

 
1,497

 
326

 
1,497

Gain on acquisition including associated real estate equity investment
—

 
—

 
(37,383
)
 
—

Gain on sale of property and interests in real estate equity investments
(368
)
 
(8,137
)
 
(45,493
)
 
(31,470
)
Gain on dispositions of unconsolidated real estate joint ventures and partnerships
(3,139
)
 
(53
)
 
(3,139
)
 
(615
)
Other
(8
)
 
(4
)
 
(8
)
 
(4
)
NAREIT FFO – basic
74,813

 
57,913

 
140,600

 
117,728

Income attributable to operating partnership units
499

 
479

 
998

 
960

NAREIT FFO – diluted
75,312

 
58,392

 
141,598

 
118,688

Adjustments to Core FFO:
 
 
 
 
 
 
 
Redemption costs of preferred shares
—

 
9,749

 
—

 
9,749

Deferred tax expense, net
—

 
—

 
5,895

 
—

Acquisition costs
245

 
142

 
600

 
346

Other impairment loss, net of tax
—

 
—

 
43

 
—

(Gain) loss on extinguishment of debt
(1,679
)
 
—

 
(1,679
)
 
6,100

Other, net of tax
(294
)
 
—

 
(536
)
 
(1,161
)
Core FFO – diluted
$
73,584

 
$
68,283

 
$
145,921

 
$
133,722

 
 
 
 
 
 
 
 
Weighted average shares outstanding – basic
125,791

 
123,298

 
124,692

 
122,715

Effect of dilutive securities:
 
 
 
 
 
 
 
Share options and awards
1,053

 
1,252

 
1,136

 
1,344

Operating partnership units
1,462

 
1,480

 
1,462

 
1,483

Weighted average shares outstanding – diluted
128,306

 
126,030

 
127,290

 
125,542

 
 
 
 
 
 
 
 
NAREIT FFO per common share – basic
$
.59

 
$
.47

 
$
1.13

 
$
.96

 
 
 
 
 
 
 
 
NAREIT FFO per common share – diluted
$
.59

 
$
.46

 
$
1.11

 
$
.95

 
 
 
 
 
 
 
 
Core FFO per common share – diluted
$
.57

 
$
.54

 
$
1.15

 
$
1.07


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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.
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 classified as discontinued operations. 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
June 30, 2016
 
Six Months Ended
June 30, 2016
Beginning of the period
197

 
206

Properties added:
 
 
 
Acquisitions
—

 
1

Redevelopments
9

 
11

Other
—

 
1

Properties removed:
 
 
 
Dispositions
(3
)
 
(8
)
Redevelopments
—

 
(5
)
Other
—

 
(3
)
End of the period
203

 
203


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We calculate SPNOI using operating income as defined by GAAP excluding 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, amortization, impairment losses, general and administrative expenses, acquisition costs and other items such as lease cancellation income, environmental abatement costs and demolition expenses. Consistent with the capital treatment of such costs under GAAP, tenant improvements, leasing commissions and other direct leasing costs are excluded from SPNOI. A reconciliation of net income attributable to common shareholders to SPNOI is as follows (in thousands):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2016
 
2015
 
2016
 
2015
Net income attributable to common shareholders
$
35,816

 
$
25,222

 
$
142,890

 
$
70,159

Add:
 
 
 
 
 
 
 
Redemption costs of preferred shares
—

 
9,687

 
—

 
9,687

Dividends on preferred shares
—

 
1,120

 
—

 
3,830

Net income attributable to noncontrolling interests
1,835

 
1,757

 
3,428

 
3,332

Provision (benefit) for income taxes
16

 
(226
)
 
5,915

 
435

Interest expense, net
18,558

 
20,292

 
39,449

 
46,750

Less:
 
 
 
 
 
 
 
Gain on sale of property
(1,033
)
 
(8,163
)
 
(46,190
)
 
(30,685
)
Equity in earnings of real estate joint ventures and partnership interests
(6,645
)
 
(3,212
)
 
(10,738
)
 
(8,584
)
Gain on sale and acquisition of real estate joint venture and partnership interests
—

 
(18
)
 
(37,392
)
 
(879
)
Interest and other income
(361
)
 
(418
)
 
(572
)
 
(3,140
)
Operating Income
48,186

 
46,041

 
96,790

 
90,905

Less:
 
 
 
 
 
 
 
Revenue adjustments (1)
(3,526
)
 
(2,987
)
 
(7,253
)
 
(6,339
)
Add:
 
 
 
 
 
 
 
Property management fees
590

 
642

 
1,536

 
1,578

Depreciation and amortization
39,218

 
36,451

 
77,097

 
72,602

Impairment loss
—

 
153

 
43

 
153

General and administrative
6,388

 
6,461

 
12,886

 
13,833

Acquisition costs
174

 
96

 
223

 
301

Other (2)
(89
)
 
81

 
71

 
131

Net Operating Income
90,941

 
86,938

 
181,393

 
173,164

Less: NOI related to consolidated entities not defined as same property and noncontrolling interests
(9,211
)
 
(8,002
)
 
(18,478
)
 
(15,502
)
Add: Pro rata share of unconsolidated entities defined as same property
8,244

 
8,186

 
16,346

 
16,313

Same Property Net Operating Income
$
89,974

 
$
87,122

 
$
179,261

 
$
173,975

___________________
(1)
Revenue adjustments consist primarily of straight-line rentals, lease cancellation income and fee income primarily from real estate joint ventures and partnerships.
(2)
Other includes items such as environmental abatement costs and demolition expenses.
Newly Issued Accounting Pronouncements
See Note 2 to our consolidated financial statements in Item 1 for additional information related to recent accounting pronouncements.

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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 are 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 June 30, 2016, we had fixed-rate debt of $1.9 billion, after adjusting for the net effect of $200 million notional amount of interest rate contracts, and variable-rate debt of $127.6 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 $1.3 million associated with our variable-rate debt, including the effect of the interest rate contracts. The effect of the 100 basis points increase would decrease the fair value of our variable-rate and fixed-rate debt by approximately $.3 million and $133.2 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 June 30, 2016. 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 June 30, 2016.
There has been no change to our internal control over financial reporting during the quarter ended June 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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 consolidated financial statements.
ITEM 1A.  Risk Factors
We have no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2015.
ITEM 2.     Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
Repurchases of our common shares for the quarter ended June 30, 2016 are as follows:
 
 
(a)
 
(b)
 
(c)
 
(d)
Period
 
Total
Number
of Shares
Purchased (1)
 
Average
Price Paid
Per Share
 
Total Number
of Shares
Purchased
as Part of
Publicly
Announced
Program
 
Maximum
Number of
Shares that
May Yet be
Purchased
Under the
Program
April 1, 2016 to April 30, 2016
 
995

 
$
37.69

 
 
 
 
May 1, 2016 to May 31, 2016
 
236

 
38.90

 
 
 
 
June 1, 2016 to June 30, 2016
 
141,426

 
38.18

 
 
 
 
_______________
(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.

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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, we have not repurchased any shares under this plan.
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 on the Exhibit Index attached hereto.

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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
 
 
President and Chief Executive Officer
 
 
 
 
By:
/s/ Joe D. Shafer
 
 
Joe D. Shafer
 
 
Senior Vice President/Chief Accounting Officer
 
 
(Principal Accounting Officer)
DATE: August 1, 2016

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EXHIBIT INDEX
(a)
 
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
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.
 
†
Management contract or compensation plan or arrangement.



47