WRI-2014.12.31-10K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
 
FORM 10-K
(Mark One)
ý    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
OR
¨   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                          to                                         
Commission file number 1-9876
Weingarten Realty Investors
(Exact name of registrant as specified in its charter)
TEXAS
74-1464203
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
2600 Citadel Plaza Drive
 
P.O. Box 924133
 
Houston, Texas
77292-4133
(Address of principal executive offices)
(Zip Code)
(713) 866-6000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Name of Each Exchange on Which Registered
Common Shares of Beneficial Interest, $0.03 par value
 
New York Stock Exchange
Series F Cumulative Redeemable Preferred Shares, $0.03 par value
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   
YES   ý            NO   ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  
YES   ¨            NO   ý
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.            YES  ý     NO  ¨
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). 
YES   ý            NO   ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.            ý
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. (Check one):
Large accelerated filer  ý
Accelerated filer  ¨
Non-accelerated filer  ¨
(Do not check if a smaller reporting company)
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   ¨            NO   ý
The aggregate market value of the common shares of beneficial interest held by non-affiliates on June 30, 2014 (based upon the most recent closing sale price on the New York Stock Exchange as of such date of $32.84) was $3.7 billion.
As of January 31, 2015, there were 122,505,338 common shares of beneficial interest outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement relating to its Annual Meeting of Shareholders to be held on April 28, 2015 have been incorporated by reference to Part III of this Form 10-K.


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Forward-Looking Statements
This annual report on Form 10-K, 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 those 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. 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 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. For further discussion of the factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see “Item 1A. Risk Factors.”
PART I
ITEM 1. Business
General Development of Business.    Weingarten Realty Investors is a real estate investment trust (“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.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 and the Consolidated Financial Statements and Notes thereto included in Item 8 of this Annual Report on Form 10-K for the year ended December 31, 2014, for information on certain recent developments of the Company.
Financial Information about Segments.    We are in the business of owning, managing and developing retail shopping centers. As each of our centers has similar characteristics and amenities, our operations have been aggregated into one reportable segment. See the Consolidated Financial Statements and Notes thereto included in Item 8 of this Annual Report on Form 10-K for further information regarding reportable segments.
Narrative Description of Business.    At December 31, 2014, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 234 developed income-producing properties and three properties under various stages of construction and development, which are located in 21 states spanning the country from coast to coast. The portfolio of properties contains approximately 45.3 million square feet of gross leasable area that is either owned by us or others.
We also owned interests in 34 parcels of land held for development that totaled approximately 25.3 million square feet.
At December 31, 2014, we employed 315 full-time persons; our principal executive offices are located at 2600 Citadel Plaza Drive, Houston, Texas 77008; and our phone number is (713) 866-6000. We also have 10 regional offices located in various parts of the United States (“U.S.”).

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Investment and Operating Strategy.    Our goal is to remain a leader in owning and operating top-tier neighborhood and community shopping centers in certain markets of the U.S. We expect to achieve this goal by:
strategic focus on core operating fundamentals through our decentralized operating platform built on local expertise in leasing and property management;
selective redevelopment of the existing portfolio of properties in order to enhance and maintain high quality centers;
disciplined growth from strategic acquisitions and new developments;
disposition of assets that no longer meet our ownership criteria, in which proceeds may be recycled by repaying debt, purchasing new assets or reinvesting in currently owned assets or for other corporate purposes; and
commitment to maintaining a conservatively leveraged balance sheet, a well-staggered debt maturity schedule and strong credit agency ratings.
We may either purchase or lease income-producing properties in the future, and may also participate with other entities in property ownership through partnerships, joint ventures or similar types of co-ownership.
We may invest in mortgages; however, we have traditionally invested in first mortgages to real estate joint ventures or partnerships in which we own an equity interest or to obtain control over a real estate asset that we desire to own. We may also invest in securities of other issuers for the purpose, among others, of exercising control over such entities, subject to the gross income and asset tests necessary for REIT qualification.
In acquiring and developing properties, we attempt to accumulate enough properties in a geographic area to allow for the establishment of a regional office, which enables us to obtain in-depth knowledge of the market from a leasing perspective and to have easy access to the property and our tenants from a management viewpoint.
We expect to continue our focus on the future growth of the portfolio in neighborhood and community shopping centers in markets where we currently operate and may expand to other markets throughout the U.S. Our markets of interest reflect high income and job growth, as well as high barriers-to-entry. Our attention is also focused on high quality, supermarket-anchored and necessity-based centers.
Diversification from both a geographic and tenancy perspective is a critical component of our operating strategy. We continue to seek opportunities outside the Texas market, where approximately 27.8% of the gross leasable area of our properties is located, down from 28.2% in 2013. With respect to tenant diversification, our two largest tenants, The Kroger Co. and TJX Companies, Inc., accounted for 3.5% and 2.3%, respectively, of our total base minimum rental revenues for the year ended December 31, 2014. No other tenant accounted for more than 1.8% of our total base minimum rental revenues. 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.
Strategically, we strive to finance our growth and working capital needs in a conservative manner, including managing our debt maturities. Our senior debt credit ratings were BBB with a projected stable outlook from Standard & Poors and Baa2 with a projected positive outlook from Moody’s Investor Services as of December 31, 2014. We intend to maintain a conservative approach to managing our balance sheet, which, in turn, should give us many options for raising debt or equity capital when needed. At December 31, 2014 and 2013, our ratio of earnings to combined fixed charges and preferred dividends as defined by the Securities and Exchange Commission (“SEC”), not based on funds from operations, was 3.09 to 1 and 1.72 to 1, respectively. Our debt to total assets before depreciation ratio was 40.0% and 43.5% at December 31, 2014 and 2013, respectively.
Our policies with respect to the investment and operating strategies discussed above are periodically reviewed by our Board of Trust Managers and may be modified without a vote of our shareholders.

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Location of Properties.    Our properties are located in 21 states, primarily throughout the southern half of the country. As of December 31, 2014, we have 237 properties (including three properties under development) that were owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships. Total revenues less operating expenses and real estate taxes from continuing operations ("net operating income from continuing operations") generated by our properties located in Houston and its surrounding areas was 19.7% of total net operating income from continuing operations for the year ended December 31, 2014, and an additional 9.8% of net operating income from continuing operations was generated in 2014 from properties that are located in other parts of Texas. As of December 31, 2014, we also had 34 parcels of land held for development, eight of which were located in Houston and its surrounding areas and 12 of which were located in other parts of Texas. Because of our investments in Houston and its surrounding areas, as well as in other parts of Texas, the Houston and Texas economies affect, to a large degree, our business and operations.
Competition.    We compete with numerous other developers and real estate companies (both public and private), financial institutions and other investors engaged in the development, acquisition and operation of shopping centers in our trade areas. This results in competition for the acquisition of both existing income-producing properties and prime development sites.
We also compete for tenants to occupy the space that is developed, acquired and managed by our competitors. The principal competitive factors in attracting tenants in our market areas are location, price, anchor tenants and maintenance of properties. We believe our key competitive advantages include the favorable locations of our properties, the strong demographics surrounding our centers, knowledge of markets and customer bases, our ability to provide a retailer with multiple locations with quality anchor tenants and the practice of continuous maintenance and renovation of our properties.
Qualification as a Real Estate Investment Trust.    As of December 31, 2014, we met the qualification requirements of a REIT under the Internal Revenue Code, as amended. As a result, we will not be subject to federal income tax to the extent we meet certain requirements of the Internal Revenue Code, with the exception of our taxable REIT subsidiary.
Materials Available on Our Website.    Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, as well as Reports on Forms 3, 4, 5 and SC 13G regarding our officers, trust managers or 10% beneficial owners, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934 are available free of charge through our website (www.weingarten.com) as soon as reasonably practicable after we electronically file the material with, or furnish it to, the SEC. We have also made available on our website copies of our Audit Committee Charter, Management Development and Executive Compensation Committee Charter, Governance and Nominating Committee Charter, Code of Conduct and Ethics, Code of Ethical Conduct for Officers and Senior Financial Associates and Governance Policies. In the event of any changes to these charters, codes or policies, changed copies will also be made available on our website. You may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549 or the SEC’s Internet site at www.sec.gov. Materials on our website are not part of our Annual Report on Form 10-K.
Financial Information.    Additional financial information concerning us is included in the Consolidated Financial Statements located in Item 8 herein.
ITEM 1A. Risk Factors
The risks described below could materially and adversely affect our shareholders and our results of operations, financial condition, liquidity and cash flows. In addition to these risks, our operations may also be affected by additional factors not presently known or that we currently consider immaterial to our operations.

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Disruptions in the financial markets could affect our liquidity and have other adverse effects on us and the market price of our common shares of beneficial interest.
The U.S. and global equity and credit markets have experienced and may in the future experience significant price volatility, dislocations and liquidity disruptions, which could cause market prices of many stocks to fluctuate substantially and the spreads on prospective debt financings to widen considerably. These circumstances could materially impact liquidity in the financial markets, making terms for certain financings less attractive, and in certain cases result in the unavailability of certain types of financing. Uncertainties in the equity and credit markets may negatively impact our ability to access additional financing at reasonable terms or at all, which may negatively affect our ability to complete dispositions, form joint ventures or refinance our debt. A prolonged downturn in the equity or credit markets could cause us to seek alternative sources of potentially less attractive financing, and require us to adjust our business plan accordingly. In addition, these factors may make it more difficult for us to sell properties or adversely affect the price we receive for properties that we do sell, as prospective buyers may experience increased costs of financing or difficulties in obtaining financing. These events in the equity and credit markets may make it more difficult or costly for us to raise capital through the issuance of our common shares of beneficial interest (“common shares”) or preferred shares. These disruptions in the financial markets also may have a material adverse effect on the market value of our common shares and preferred shares and other adverse effects on us or the economy generally. There can be no assurances that government responses to the disruptions in the financial markets will continue to restore consumer confidence, maintain stabilized markets or continue to provide the availability of equity or credit financing.
Among the market conditions that may affect the value of our common shares and preferred shares and access to the capital markets are the following:
The attractiveness of REIT securities as compared to other securities, including securities issued by other real estate companies, fixed income equity securities and debt securities;
Changes in revenues or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs;
The degree of interest held by institutional investors;
The market's perception of the quality of our assets and our growth potential;
The ability of our tenants to pay rent to us and meet their other obligations to us under current lease terms;
Our ability to re-lease space as leases expire;
Our ability to refinance our indebtedness as it matures;
Actual or anticipated quarterly fluctuations in our operating results and financial condition;
Any changes in our distribution policy;
Any future issuances of equity securities;
Strategic actions by us or our competitors, such as acquisitions or restructurings;
General market conditions and, in particular, developments related to market conditions for the real estate industry; and
Domestic and international economic and political factors unrelated to our performance.
The volatility in the stock market can create price and volume fluctuations that may not necessarily be comparable to operating performance.
The economic performance and value of our shopping centers depend on many factors, each of which could have an adverse impact on our cash flows and operating results.
The economic performance and value of our properties can be affected by many factors, including the following:
Changes in the national, regional and local economic climate;
Changes in environmental regulatory requirements including, but not limited to, legislation on global warming;
Local conditions such as an oversupply of space or a reduction in demand for real estate in the area;
The attractiveness of the properties to tenants;

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Competition from other available space;
Competition for our tenants from Internet sales;
Our ability to provide adequate management services and to maintain our properties;
Increased operating costs, if these costs cannot be passed through to tenants;
The cost of periodically renovating, repairing and releasing spaces;
The consequences of any armed conflict involving, or terrorist attack against, the U.S.;
Our ability to secure adequate insurance;
Fluctuations in interest rates;
Changes in real estate taxes and other expenses; and
Availability of financing on acceptable terms or at all.
Our properties consist primarily of neighborhood and community shopping centers and, therefore, our performance is linked to general economic conditions in the market for retail space. The market for retail space has been and could in the future be adversely affected by weakness in the national, regional and local economies where our properties are located, the adverse financial condition of some large retail companies, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets and increasing consumer purchases through the Internet. To the extent that any of these conditions exist, they are likely to affect market rents for retail space. In addition, we may face challenges in the management and maintenance of the properties or encounter increased operating costs, such as real estate taxes, insurance and utilities, which may make our properties unattractive to tenants. A significant decrease in rental revenue and an inability to replace such revenues may adversely affect our profitability, the ability to meet debt and other financial obligations and make distributions to shareholders.
We have a high concentration of properties in the state of Texas, and adverse economic or other conditions in that area could have a material adverse effect on us.
We are particularly susceptible to adverse economic or other conditions in the state of Texas, including increased unemployment, industry slowdowns, including declining oil prices, business layoffs or downsizing, decreases in consumer confidence, relocations of businesses, changes in demographics, increases in real estate and other taxes, increases in regulations and natural disasters, any of which could have an increased material adverse effect on us than if our portfolio was more geographically diverse.
Our acquisition activities may not produce the cash flows that we expect and may be limited by competitive pressures or other factors.
We intend to acquire existing commercial properties to the extent that suitable acquisitions can be made on advantageous terms. Acquisitions of commercial properties involve risks such as:
We may have difficulty identifying acquisition opportunities that fit our investment strategy;
Our estimates on expected occupancy and rental rates may differ from actual conditions;
Our estimates of the costs of any redevelopment or repositioning of acquired properties may prove to be inaccurate;
We may be unable to operate successfully in new markets where acquired properties are located, due to a lack of market knowledge or understanding of local economies;
We may be unable to successfully integrate new properties into our existing operations; or
We may have difficulty obtaining financing on acceptable terms or paying the operating expenses and debt service associated with acquired properties prior to sufficient occupancy.
In addition, we may not be in a position or have the opportunity in the future to make suitable property acquisitions on advantageous terms due to competition for such properties with others engaged in real estate investment. Our inability to successfully acquire new properties may have an adverse effect on our results of operations.

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Turmoil in capital markets could adversely impact acquisition activities and pricing of real estate assets.
Volatility in the capital markets could impact the availability of debt financing due to numerous factors, including the tightening of underwriting standards by lenders and credit rating agencies. These factors directly affect a lender’s ability to provide debt financing as well as increase the cost of available debt financing. As a result, we may not be able to obtain debt financing on favorable terms or at all. This may result in future acquisitions generating lower overall economic returns, which may adversely affect our results of operations and distributions to shareholders. Furthermore, any turmoil in the capital markets could adversely impact the overall amount of capital available to invest in real estate, which may result in price or value decreases of real estate assets.
Our real estate assets may be subject to impairment charges.
Periodically, we assess whether there are any indicators that the value of our real estate assets, including any capitalized costs and any identifiable intangible assets, may be impaired. A property's value is impaired only if the estimate of the aggregate future undiscounted cash flows without interest charges to be generated by the property are less than the carrying value of the property. In estimating cash flows, we consider factors such as expected future operating income, trends and prospects, the effects of demand, competition and other factors. If we are evaluating the potential sale of an asset or development alternatives, the undiscounted future cash flows consider the most likely course of action at the balance sheet date based on current plans, intended holding periods and available market information. Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. If market conditions deteriorate or management’s plans for certain properties change, additional write-downs could be required in the future, and any future impairment could have a material adverse effect on our results of operations in the period in which the charge is taken.
Reduction of rental income would adversely affect our profitability, our ability to meet our debt obligations and our ability to make distributions to our shareholders.
The substantial majority of our income is derived from rental income from real property. As a result, our performance depends on our ability to collect rent from tenants. Our income and funds for distribution would be negatively affected if a significant number of our tenants, or any of our major tenants (as discussed in more detail below):
Delay lease commencements;
Decline to extend or renew leases upon expiration;
Fail to make rental payments when due; or
Close stores or declare bankruptcy.
Any of these actions could result in the termination of the tenants’ lease and the loss of rental income attributable to the terminated leases. In addition, lease terminations by an anchor tenant or a failure by that anchor tenant to occupy the premises could also result in lease terminations or reductions in rent by other tenants in the same shopping center under the terms of some leases. In these events, we cannot be sure that any tenant whose lease expires will renew that lease or that we will be able to re-lease space on economically advantageous terms. Furthermore, certain costs remain fixed even though a property may not be fully occupied. The loss of rental revenues from a number of our tenants and our inability to replace such tenants, particularly in the case of a substantial tenant with leases in multiple locations, may adversely affect our profitability, our ability to meet debt and other financial obligations and our ability to make distributions to the shareholders.
Adverse effects on the success and stability of our anchor tenants, could lead to reductions of rental income.
Our rental income could be adversely affected in the event of a downturn in the business, or the bankruptcy or insolvency of any anchor store or anchor tenant. Anchor tenants generally occupy large amounts of square footage, pay a significant portion of the total rents at a property and contribute to the success of other tenants by drawing significant numbers of customers to a property. The closing of one or more anchor stores at a property could adversely affect that property and result in lease terminations or reductions in rent from other tenants, whose leases may permit termination or rent reduction in those circumstances or whose own operations may suffer as a result. Furthermore, tenant demand for certain of our anchor spaces may decrease, and as a result, we may see an increase in vacancy and/or a decrease in rents for those spaces, which could have a negative impact to our rental income.

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We face significant competition in the leasing market, which may decrease or prevent increases in the occupancy and rental rates of our properties.
We compete with numerous developers, owners and operators of retail properties, many of which own properties similar to, and in the same market sectors as, our properties. If our competitors offer space at rental rates below current market rates, or below the rental rates we currently charge our tenants, we may lose existing or potential tenants, or we may be forced to reduce rental rates in order to attract new tenants and retain existing tenants when their leases expire.
Also, if our competitors develop additional retail properties in locations near our properties, there may be increased competition for customer traffic and creditworthy tenants, which may result in fewer tenants or decreased cash flows from tenants, or both, and may require us to make capital improvements to properties that we would not have otherwise made. Our tenants also face increasing competition from other forms of marketing of goods, such as direct mail and Internet marketing, which may decrease cash flow from such tenants. As a result, our financial condition and our ability to make distributions to our shareholders may be adversely affected.
We may be unable to collect balances due from tenants in bankruptcy.
A tenant that files for bankruptcy protection may not continue to pay us rent. A bankruptcy filing by or relating to one of our tenants or a lease guarantor would bar all efforts by us to collect pre-bankruptcy debts from the tenant or the lease guarantor, or their property, unless the bankruptcy court permits us to do so. A tenant or lease guarantor bankruptcy could delay our efforts to collect past due balances under the relevant leases and could ultimately preclude collection of these sums. If a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims it holds, if at all.
Our development and construction activities could adversely affect our operating results.
We intend to continue the selective development and construction of retail properties in accordance with our development and underwriting policies as opportunities arise. Our development and construction activities include risks that:
We may abandon development opportunities after expending resources to determine feasibility;
Construction costs of a project may exceed our original estimates;
Occupancy rates and rents at a newly completed property may not be sufficient to make the property profitable;
Rental rates could be less than projected;
Project completion may be delayed because of a number of factors, including weather, labor disruptions, construction delays or delays in receipt of zoning or other regulatory approvals, adverse economic conditions, acts of terror or other acts of violence, or acts of God (such as fires, earthquakes or floods);
Financing may not be available to us on favorable terms for development of a property; and
We may not complete construction and lease-up on schedule, resulting in increased debt service expense and construction costs.
Additionally, the time frame required for development, construction and lease-up of these properties means that we may have to wait years for a significant cash return. If any of the above events occur, the development of properties may hinder our growth and have an adverse effect on our results of operations, including additional impairment charges. Also, new development activities, regardless of whether or not they are ultimately successful, typically require substantial time and attention from management.
There is a lack of operating history with respect to any recent acquisitions and development of properties, and we may not succeed in the integration or management of additional properties.
These properties may have characteristics or deficiencies currently unknown to us that affect their value or revenue potential. It is also possible that the operating performance of these properties may decline under our management. As we acquire additional properties, we will be subject to risks associated with managing new properties, including lease-up and tenant retention. In addition, our ability to manage our growth effectively will require us to successfully integrate any new acquisitions into our existing management structure. We may not succeed with this integration or effectively manage additional properties. Also, newly acquired properties may not perform as expected.

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Real estate property investments are illiquid, and therefore, we may not be able to dispose of properties when desirable or on favorable terms.
Real estate property investments generally cannot be disposed of quickly. In addition, the Internal Revenue Code imposes restrictions on the ability of a REIT to dispose of properties that are not applicable to other types of real estate companies. Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties, and we cannot predict the various market conditions affecting real estate investments that will exist at any particular time in the future. Therefore, we may not be able to quickly vary our portfolio in response to economic or other conditions promptly or on favorable terms, which could cause us to incur extended losses and reduce our cash flows and adversely affect distributions to shareholders.
As part of our capital recycling program, we intend to sell our non-core assets and may not be able to recover our investments, which may result in losses to us.
There can be no assurance that we will be able to recover the current carrying amount of all of our owned and partially owned non-core properties and investments in the future. Our failure to do so would require us to recognize impairment charges in the period in which we reached that conclusion, which could adversely affect our business, financial condition, operating results and cash flows.
Our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing.
We are generally subject to risks associated with debt financing. These risks include:
Our cash flow may not satisfy required payments of principal and interest;
We may not be able to refinance existing indebtedness on our properties as necessary or the terms of the refinancing may be less favorable to us than the terms of existing debt;
Required debt payments are not reduced if the economic performance of any property declines;
Debt service obligations could reduce funds available for distribution to our shareholders and funds available for capital investment;
Any default on our indebtedness could result in acceleration of those obligations and possible loss of property to foreclosure; and
The risk that necessary capital expenditures for purposes such as re-leasing space cannot be financed on favorable terms.
If a property is mortgaged to secure payment of indebtedness and we cannot make the mortgage payments, we may have to surrender the property to the lender with a consequent loss of any prospective income and equity value from such property. Any of these risks can place strains on our cash flows, reduce our ability to grow and adversely affect our results of operations.
Credit ratings may not reflect all the risks of an investment in our debt or preferred shares and rating changes could adversely effect our revolving credit facility.
Our credit ratings are an assessment by rating agencies of our ability to pay our debts and preferred dividends when due. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of our debt and preferred shares. Credit ratings may be revised or withdrawn at any time by the rating agency at its sole discretion. Additionally, our revolving credit facility fees are based on our credit ratings. We do not undertake any obligation to maintain the ratings or to advise holders of our debt or preferred shares of any change in ratings. Each agency's rating should be evaluated independently of any other agency's rating.
There can be no assurance that we will be able to maintain our current credit ratings. Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on favorable terms, if at all, and could significantly reduce the market price of our publicly-traded securities.

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Rising interest rates could adversely affect our cash flows and adversely affect the market price of our debt and preferred shares.
We have indebtedness with interest rates that vary depending on market indices. Also, our credit facilities bear interest at variable rates. We may incur variable-rate debt in the future. Increases in interest rates on variable-rate debt would increase our interest expense, which would negatively affect net income and cash available for payment of our debt obligations and distributions to shareholders. In addition, an increase in interest rates could adversely affect the market value of our outstanding debt and preferred shares, as well as increase the cost of refinancing and the issuance of new debt or securities.
Our financial condition could be adversely affected by financial covenants.
Our credit facilities and public debt indentures under which our indebtedness is, or may be, issued contain certain financial and operating covenants, including, among other things, certain coverage ratios, as well as limitations on our ability to incur secured and unsecured indebtedness, restrictions on our ability to sell all or substantially all of our assets and engage in mergers and consolidations and certain acquisitions. These covenants could limit our ability to obtain additional funds needed to address cash shortfalls or pursue growth opportunities or transactions that would provide substantial return to our shareholders. In addition, a breach of these covenants could cause a default under or accelerate some or all of our indebtedness, which could have a material adverse effect on our financial condition.
Property ownership through real estate partnerships and joint ventures could limit our control of those investments and reduce our expected return.
Real estate partnership or joint venture investments may involve risks not otherwise present for investments made solely by us, including the possibility that our partner or co-venturer might become bankrupt, that our partner or co-venturer might at any time have different interests or goals than us, and that our partner or co-venturer may take action contrary to our instructions, requests, policies or objectives. Other risks of joint venture investments could include impasse on decisions, such as a sale or refinance, because neither our partner or co-venturer nor we would have full control over the partnership or joint venture. These factors could limit the return that we receive from those investments or cause our cash flows to be lower than our estimates.
Volatility in market and economic conditions may impact our partners’ ability to perform in accordance with our real estate joint venture and partnership agreements resulting in a change in control or the liquidation plans of its underlying properties.
Changes in control of our investments could result if any reconsideration events occur, such as amendments to our real estate joint venture and partnership agreements, changes in debt guarantees or changes in ownership due to required capital contributions. Any changes in control will result in the revaluation of our investments to fair value, which could lead to an impairment. We are unable to predict whether, or to what extent, a change in control may result or the impact of adverse market and economic conditions may have to our partners.
If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax as a regular corporation and could have significant tax liability.
We intend to operate in a manner that allows us to qualify as a REIT for U.S. federal income tax purposes. However, REIT qualification requires us to satisfy numerous requirements (some on an annual or quarterly basis) established under highly technical and complex provisions of the Internal Revenue Code, for which there are a limited number of judicial or administrative interpretations. Our status as a REIT requires an analysis of various factual matters and circumstances that are not entirely within our control. Accordingly, it is not certain we will be able to qualify and remain qualified as a REIT for U.S. federal income tax purposes. Even a technical or inadvertent violation of the REIT requirements could jeopardize our REIT qualification. Furthermore, Congress or the Internal Revenue Service (“IRS”) might change the tax laws or regulations and the courts might issue new rulings, in each case potentially having retroactive effect that could make it more difficult or impossible for us to qualify as a REIT. If we fail to qualify as a REIT in any tax year, then:
We would be taxed as a regular domestic corporation, which, among other things, means that we would be unable to deduct distributions to our shareholders in computing our taxable income and would be subject to U.S. federal income tax on our taxable income at regular corporate rates;
Any resulting tax liability could be substantial and would reduce the amount of cash available for distribution to shareholders, and could force us to liquidate assets or take other actions that could have a detrimental effect on our operating results; and

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Unless we were entitled to relief under applicable statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost our qualification, and our cash available for distribution to our shareholders would, therefore, be reduced for each of the years in which we do not qualify as a REIT.
Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow. We may also be subject to certain U.S. federal, state and local taxes on our income and property either directly or at the level of our subsidiaries. Any of these taxes would decrease cash available for distribution to our shareholders.
Compliance with REIT requirements may negatively affect our operating decisions.
To maintain our status as a REIT for U.S. federal income tax purposes, we must meet certain requirements, on an ongoing basis, including requirements regarding our sources of income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our common shares. We may also be required to make distributions to our shareholders when we do not have funds readily available for distribution or at times when our funds are otherwise needed to fund capital expenditures or debt service obligations.
As a REIT, we must distribute at least 90% of our annual net taxable income (excluding net capital gains) to our shareholders. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our net taxable income, we will be subject to U.S. federal corporate income tax on our undistributed taxable income. From time to time, we may generate taxable income greater than our income for financial reporting purposes, or our net taxable income may be greater than our cash flow available for distribution to our shareholders. If we do not have other funds available in these situations, we could be required to borrow funds, sell a portion of our securities at unfavorable prices or find other sources of funds in order to meet the REIT distribution requirements.
Dividends paid by REITs generally do not qualify for reduced tax rates.
In general, the maximum U.S. federal income tax rate for qualified dividends paid to individual U.S. shareholders is 20%. Unlike dividends received from a corporation that is not a REIT, our distributions to individual shareholders generally are not eligible for the reduced rates and are, consequently, taxed at ordinary income rates.
Our common shares dividend policy may change in the future.
The timing, amount and composition of any future dividends to our common shareholders will be at the sole discretion of our Board of Trust Managers and will depend upon a variety of factors as to which no assurance can be given. Our ability to make dividends to our common shareholders depends, in part, upon our operating results, overall financial condition, the performance of our portfolio (including occupancy levels and rental rates), our capital requirements, access to capital, our ability to qualify for taxation as a REIT and general business and market conditions. Any change in our dividend policy could have an adverse effect on the market price of our common shares.
Our declaration of trust contains certain limitations associated with share ownership.
To maintain our status as a REIT, our declaration of trust prohibits any individual from owning more than 9.8% of our outstanding common shares. This restriction is likely to discourage third parties from acquiring control without the consent of our Board of Trust Managers, even if a change in control were in the best interests of our shareholders.
Also, our declaration of trust requires the approval of the holders of 80% of our outstanding common shares and the approval by not less than 50% of the outstanding common shares not owned by any related person (a person owning more than 50% of our common shares) to consummate a business transaction such as a merger. There are certain exceptions to this requirement; however, the 80% approval requirement could make it difficult for us to consummate a business transaction even if it is in the best interest of our shareholders.

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There may be future dilution of our common shares.
Our declaration of trust authorizes our Board of Trust Managers to, among other things, issue additional common or preferred shares or securities convertible or exchangeable into equity securities, without shareholder approval. We may issue such additional equity or convertible securities to raise additional capital. The issuance of any additional common or preferred shares or convertible securities could be substantially dilutive to holders of our common shares. Moreover, to the extent that we issue restricted shares, options, or warrants to purchase our common shares in the future and those options or warrants are exercised or the restricted shares vest, our shareholders may experience further dilution. Holders of our common shares have no preemptive rights that entitle them to purchase a pro rata share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our shareholders.
We may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to our common shares as to distributions and in liquidation, which could negatively affect the value of our common shares.
In the future, we may attempt to increase our capital resources by entering into unsecured or secured debt or debt-like financings, or by issuing additional debt or equity securities, which could include issuances of medium-term notes, senior notes, subordinated notes, secured debt, guarantees, preferred shares, hybrid securities, or securities convertible into or exchangeable for equity securities. In the event of our liquidation, our lenders and holders of our debt and preferred securities would receive distributions of our available assets before distributions to the holders of our common shares. Because any decision to incur debt and issue securities in future offerings may be influenced by market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future financings. Further, market conditions could require us to accept less favorable terms for the issuance of our securities in the future.
Loss of our key personnel could adversely affect the value of our common shares and operations.
We are dependent on the efforts of our key executive personnel. Although we believe qualified replacements could be found for these key executives, the loss of their services could adversely affect the value of our common shares and operations.
Changes in accounting standards may adversely impact our reported financial condition and results of operations.
The Financial Accounting Standards Board (“FASB”), in conjunction with the SEC, has several key projects on their agenda that could impact how we currently account for our material transactions, including lease accounting and other convergence projects with the International Accounting Standards Board. We believe that these and other potential proposals could have varying degrees of impact on us ranging from minimal to material. At this time, we are unable to predict with certainty which, if any, proposals may be passed or what level of impact any such proposal could have on us.
We could be subject to litigation that may negatively impact our cash flows, financial condition and results of operations.
From time to time, we may be a defendant in lawsuits and regulatory proceedings relating to our business. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such litigation or proceedings. We could experience a negative impact to our cash flows, financial condition and results of operations due to an unfavorable outcome.
Compliance with certain laws and governmental rules and regulations may require us to make unintended expenditures that adversely affect our cash flows.
All of our properties are required to comply with certain laws and governmental rules and regulations, including the Americans with Disabilities Act, fire and safety regulations, building codes and other land use regulations, as they may be in effect or adopted by governmental agencies and bodies and become applicable to our properties. We may be required to make substantial capital expenditures to comply with those requirements, and these expenditures could have a material adverse effect on our ability to meet the financial obligations and make distributions to our shareholders.

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An uninsured loss or a loss that exceeds the policies on our properties could subject us to lost capital or revenue on those properties.
Under the terms and conditions of the leases currently in force on our properties, tenants generally are required to indemnify and hold us harmless from liabilities resulting from injury to persons, air, water, land or property, on or off the premises, due to activities conducted on the properties, except for claims arising from our negligence or intentional misconduct or that of our agents. Tenants are generally required, at the tenant’s expense, to obtain and keep in full force during the term of the lease, liability and tenant's property damage insurance policies. We have obtained comprehensive liability, casualty, property, flood and rental loss insurance policies on our properties. All of these policies may involve substantial deductibles and certain exclusions. In addition, we cannot assure the shareholders that the tenants will properly maintain their insurance policies or have the ability to pay the deductibles. Should a loss occur that is uninsured or in an amount exceeding the combined aggregate limits for the policies noted above, or in the event of a loss that is subject to a substantial deductible under an insurance policy, we could lose all or part of our capital invested in, and anticipated revenue from, one or more of the properties, which could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to the shareholders.
We may be subject to liability under environmental laws, ordinances and regulations.
Under various federal, state and local laws, ordinances and regulations, we may be considered an owner or operator of real property or have arranged for the disposal or treatment of hazardous or toxic substances. As a result, we may become liable for the costs of disposal or treatment of hazardous or toxic substances released on or in our property. We may also be liable for certain other potential costs that could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). We may incur such liability whether or not we knew of, or were responsible for, the presence of such hazardous or toxic substances.
Natural disasters and severe weather conditions could have an adverse effect on our cash flow and operating results.
Changing weather patterns and climatic conditions, such as global warming, may have added to the unpredictability and frequency of natural disasters in some parts of the world and created additional uncertainty as to future trends and exposures. Our operations are located in many areas that are subject to natural disasters and severe weather conditions such as hurricanes, tornadoes, earthquakes, droughts, floods and fires. The occurrence of natural disasters or severe weather conditions can delay new development projects, increase investment costs to repair or replace damaged properties, increase future property insurance costs, and negatively impact the tenant demand for lease space. If insurance is unavailable to us or is unavailable on acceptable terms, or if our insurance is not adequate to cover business interruption or losses from these events, our earnings, liquidity or capital resources could be adversely affected.
Our business and operations would suffer in the event of system failures.
Despite the implementation of security measures and the existence of a disaster recovery plan for our internal information technology systems, our systems are vulnerable to damages from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may also incur additional costs to remedy damages caused by such disruptions.
We face risks relating to cybersecurity attacks, loss of confidential information and other business disruptions.
Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data and other electronic security breaches. Such cybersecurity attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. While we employ a number of measures to prevent, detect and mitigate these threats including a defense in depth strategy of malware detection, password protection, backup servers and periodic penetration testing, there is no guarantee such efforts will be successful in preventing a cybersecurity attack. As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. Cybersecurity incidents could compromise the confidential information of our tenants, employees and third-party vendors and disrupt and affect the efficiency of our business operations.
ITEM 1B. Unresolved Staff Comments
None.

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ITEM 2. Properties
At December 31, 2014, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 234 developed income-producing centers, primarily neighborhood and community shopping centers and three centers under various stages of construction and development, which are located in 21 states spanning the country from coast to coast with approximately 45.3 million square feet of gross leasable area. Our centers are located principally in the South, West Coast and Southeast Coast of the U.S. with significant concentrations in Arizona, California, Florida, and Texas. We also owned interests in 34 parcels of land that totaled approximately 25.3 million square feet at December 31, 2014. These land parcels include approximately 1.6 million square feet of land adjacent to certain of our existing operating centers, which may be used for expansion of these centers, as well as approximately 23.7 million square feet of land, which may be used for new development.
In 2014, no single center accounted for more than 3.4% of our total assets or 2.0% of base minimum rental revenues. The five largest centers, in the aggregate, represented approximately 9.4% of our base minimum rental revenues for the year ended December 31, 2014; otherwise, none of the remaining centers accounted for more than 1.8% of our base minimum rental revenues during the same period.
Our centers are designed to attract local area customers and are typically anchored by a supermarket or other national tenants (such as Kroger, Target or T.J. Maxx). The centers are primarily neighborhood and community shopping centers that often include discounters, warehouse clubs, dollar stores and specialty grocers as additional anchors or tenants, and typically range in size from 50,000 to 650,000 square feet of building area. Very few of the centers have climate-controlled common areas, but are designed to allow retail customers to park their automobiles in close proximity to any retailer in the center. Our centers are customarily constructed of masonry, steel and glass, and all have lighted, paved parking areas, which are typically landscaped with berms, trees and shrubs. They are generally located at major intersections in close proximity to neighborhoods that have existing populations sufficient to support retail activities of the types conducted in our centers.
We actively embrace various initiatives that support the future of environmentally friendly shopping centers. Our primary areas of focus include energy efficiency, waste recycling, water conservation and construction/development best practices. We recognize there are economic, environmental and social implications associated with the full range of our sustainability efforts, and that a commitment to incorporating sustainable practices will add long-term value to our centers
As of December 31, 2014, the weighted average occupancy rate for our centers was 95.5% compared to 94.9% as of December 31, 2013. The average base rent per square foot was approximately $16.24 in 2014, $15.66 in 2013, $15.14 in 2012, $13.79 in 2011 and $13.60 in 2010 for our centers.
We have approximately 5,800 separate leases with 3,800 different tenants. Included among our top revenue-producing tenants are: The Kroger Co., TJX Companies, Inc., Ross Stores, Inc., H-E-B, Safeway Inc., Office Depot, Inc., PetSmart, Inc., Bed, Bath & Beyond Inc., Home Depot, Inc., Best Buy, Inc., The Sports Authority, Inc. and Whole Foods Market, Inc. The diversity of our tenant base is also evidenced by the fact that our largest tenant, The Kroger Co., accounted for only 3.5% of base minimum rental revenues during 2014.

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Tenant Lease Expirations
As of December 31, 2014, lease expirations for the next 10 years, assuming tenants do not exercise renewal options, are as follows:
 
 
 
 
 
 
 
 
Annual Rent of Expiring Leases
Year
 
Number of
Expiring
Leases
 
Square Feet
of Expiring
Leases
(000’s)
 
Percentage of
Leaseable
Square Feet
 
Total
(000’s)
 
Per Square
Foot
 
Percentage of
Total Annual
Net Rent
2015
 
607

 
2,157

 
4.76
%
 
$
36,355

 
$
16.85

 
9.83
%
2016
 
764

 
3,623

 
8.00
%
 
58,375

 
16.11

 
15.78
%
2017
 
655

 
3,187

 
7.04
%
 
54,469

 
17.09

 
14.72
%
2018
 
564

 
3,357

 
7.41
%
 
51,421

 
15.32

 
13.90
%
2019
 
492

 
3,226

 
7.12
%
 
47,502

 
14.72

 
12.84
%
2020
 
193

 
2,117

 
4.67
%
 
26,830

 
12.67

 
7.25
%
2021
 
116

 
1,374

 
3.03
%
 
19,326

 
14.07

 
5.22
%
2022
 
88

 
1,024

 
2.26
%
 
16,114

 
15.74

 
4.36
%
2023
 
82

 
706

 
1.56
%
 
11,432

 
16.19

 
3.09
%
2024
 
109

 
1,122

 
2.48
%
 
17,312

 
15.43

 
4.68
%
New Development
At December 31, 2014, we had four projects in various stages of development, of which we own, partially or wholly, three properties and have a contractual commitment to purchase the retail portion of a mixed-use property. We have funded $82.8 million to date on these projects. We estimate our aggregate net investment upon completion to be $156.6 million. These projects are forecasted to have an average stabilized return on investment of approximately 7.7% when completed. Upon completion, the square footage to be added to the portfolio and the estimated cost per square foot of these four projects are as follows:
Estimated
Year of
Completion
 
Square Feet
(000’s)
 
Estimated
Cost per
Square Foot
2015
 
357
 
$230.31
2016
 
138
 
328.32
2017
 
63
 
465.35

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Property Listing
The following table is a list of centers, summarized by state and includes our share of both consolidated and unconsolidated real estate partnerships and joint ventures as of December 31, 2014:

ALL PROPERTIES BY STATE
 
Number of
Properties
 
Gross
Leasable
Area (GLA)
 
% of
Total GLA
Arizona
 
23

 
3,882,837

 
8.6
%
Arkansas
 
3

 
355,410

 
0.8
%
California
 
26

 
4,933,349

 
10.9
%
Colorado
 
9

 
2,746,258

 
6.1
%
Florida
 
35

 
7,470,927

 
16.5
%
Georgia
 
14

 
2,673,974

 
5.9
%
Kentucky
 
4

 
761,919

 
1.7
%
Louisiana
 
3

 
517,305

 
1.1
%
Maryland
 
2

 
83,050

 
0.2
%
Missouri
 
1

 
56,734

 
0.1
%
Nevada
 
12

 
3,818,471

 
8.4
%
New Mexico
 
2

 
259,087

 
0.6
%
North Carolina
 
16

 
2,649,998

 
5.9
%
Oklahoma
 
1

 
128,231

 
0.3
%
Oregon
 
3

 
276,924

 
0.6
%
South Carolina
 
1

 
86,694

 
0.2
%
Tennessee
 
5

 
848,345

 
1.9
%
Texas
 
68

 
12,576,407

 
27.8
%
Utah
 
3

 
471,206

 
1.0
%
Virginia
 
1

 
130,876

 
0.3
%
Washington
 
5

 
563,623

 
1.2
%
Total
 
237

 
45,291,625

 
100
%
___________________
Total square footage includes 518,056 square feet of leased from others and 11.4 million square feet not owned or managed by us. Additionally, encumbrances on our properties total $.6 billion. See Schedule III for additional information.
The following table is a detailed list of centers, by state and includes our share of both consolidated and unconsolidated real estate partnerships and joint ventures as of December 31, 2014:
Center
 
CBSA (5)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Operating Properties
 
 
 
 
 
 
 
 
 
 
Arizona
 
 
 
 
 
 
 
 
 
 
 
 
Mohave Crossroads
 
Lake Havasu City-Kingman, AZ
 
100.0
%
 

 
395,477

 

 
(Target), (Kohl's), PetSmart, Staples, Bed Bath & Beyond, Ross Dress for Less
Arcadia Biltmore Plaza
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
21,122

 

 
Weingarten Realty Regional Office, Endurance Rehab
Arrowhead Festival S.C.
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
194,309

 

 
(Sports Authority), (Toys “R” Us), (Bed Bath & Beyond)
Broadway Marketplace
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
87,379

 

 
Office Max, Ace Hardware
Camelback Village Square
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
240,951

 
Fry’s Supermarket
 
Office Max
Desert Village
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
107,071

 
AJ Fine Foods
 
CVS
Fountain Plaza
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
305,588

 
Fry’s Supermarket
 
Dollar Tree, (Lowe's)
Laveen Village Market
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
318,805

 
(Fry’s Supermarket)
 
(Home Depot)

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Center
 
CBSA (5)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Monte Vista Village Center
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
108,551

 
(Safeway)
 

Palmilla Center
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
178,219

 
(Fry’s Supermarket)
 
Office Max, PetSmart, Dollar Tree
Pueblo Anozira
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
157,607

 
Fry’s Supermarket
 
Petco, Dollar Tree
Raintree Ranch
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
133,020

 
Whole Foods
 

Rancho Encanto
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
72,170

 

 
Smart & Final
Red Mountain Gateway
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
199,013

 

 
(Target), Bed Bath & Beyond, Famous Footwear
Scottsdale Horizon
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
155,006

 
Safeway
 
CVS
Squaw Peak Plaza
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
60,728

 
Sprouts Farmers Market
 

The Shoppes at Parkwood Ranch
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
106,738

 

 
Hobby Lobby, Dollar Tree
Valley Plaza
 
Phoenix-Mesa-Scottsdale, AZ
 
100.0
%
 

 
154,588

 
US Foods
 
Ross Dress for Less
Entrada de Oro
 
Tucson, AZ
 
100.0
%
 

 
109,075

 
Walmart Neighborhood Market
 

Madera Village
 
Tucson, AZ
 
100.0
%
 

 
106,858

 
Safeway
 
Walgreens, Dollar Tree
Oracle Crossings
 
Tucson, AZ
 
100.0
%
 

 
261,194

 
Sprouts Farmers Market
 
Kohl's, Home Goods
Oracle Wetmore
 
Tucson, AZ
 
100.0
%
 

 
343,237

 

 
(Home Depot), (Jo Ann Fabric) Cost Plus, PetSmart, Walgreens, Ulta Beauty
Shoppes at Bears Path
 
Tucson, AZ
 
100.0
%
 

 
66,131

 

 
(Osco Drug)
Arizona Total:
 
 
 
 
 
 
 
3,882,837

 
 
 
 
Arkansas
 
 
 
 
 
 
 
 
 
 
 
 
Markham Square
 
Little Rock-N. Little Rock, AR
 
100.0
%
 

 
124,284

 

 
Burlington Coat Factory, Ross Dress for Less
Markham West
 
Little Rock-N. Little Rock, AR
 
100.0
%
 

 
178,500

 

 
Academy, Office Depot, Michaels, Dollar Tree
Westgate
 
Little Rock-N. Little Rock, AR
 
100.0
%
 

 
52,626

 

 
Stein Mart
Arkansas Total:
 
 
 
 
 
 
 
355,410

 
 
 
 
California
 
 
 
 
 
 
 
 
 
 
 
 
8000 Sunset Strip Shopping Center
 
Los Angeles-Long Beach et al, CA
 
100.0
%
 

 
171,551

 
Trader Joe's
 
Crunch, Sundance Cinemas, CB2
Buena Vista Marketplace
 
Los Angeles-Long Beach et al, CA
 
100.0
%
 

 
90,805

 
Ralph's
 
Dollar Tree
Centerwood Plaza
 
Los Angeles-Long Beach et al, CA
 
100.0
%
 

 
75,486

 
Superior Grocers
 
Dollar Tree
Westminster Center
 
Los Angeles-Long Beach et al, CA
 
100.0
%
 

 
440,437

 
Albertsons
 
Home Depot, Ross Dress for Less, Petco, Rite Aid, Dollar Tree, 24 Hour Fitness
Hallmark Town Center
 
Madera, CA
 
100.0
%
 

 
98,359

 
Food 4 Less
 
Bally Total Fitness
Marshalls Plaza
 
Modesto, CA
 
100.0
%
 

 
85,952

 

 
Marshalls, Dress Barn, Guitar Center
Chino Hills Marketplace
 
Riverside et al, CA
 
100.0
%
 

 
310,920

 
Von’s
 
Dollar Tree, 24 Hour Fitness, Rite Aid
Jess Ranch Marketplace
 
Riverside et al, CA
 
100.0
%
 

 
307,826

 
(Winco Foods)
 
Burlington Coat Factory, PetSmart, Rite Aid, Big 5
Jess Ranch Phase III
 
Riverside et al, CA
 
100.0
%
 

 
194,342

 
(Winco Foods)
 
Best Buy, Cinemark Theatres, Bed Bath & Beyond, 24 Hour Fitness
Menifee Town Center
 
Riverside et al, CA
 
100.0
%
 

 
258,734

 
Ralph's
 
Ross Dress for Less, Dollar Tree
Stoneridge Town Centre
 
Riverside et al, CA
 
67.0
%
 
(1)(3)
 
434,450

 
(Super Target)
 
(Kohl's)
Discovery Plaza
 
Sacramento-Arden et al, CA
 
100.0
%
 

 
93,398

 
Bel Air Market
 

Prospectors Plaza
 
Sacramento-Arden et al, CA
 
100.0
%
 

 
252,521

 
SaveMart
 
Kmart, CVS, Ross
Summerhill Plaza
 
Sacramento-Arden et al, CA
 
100.0
%
 

 
128,835

 
Raley’s
 
Dollar Tree
Valley
 
Sacramento-Arden et al, CA
 
100.0
%
 

 
107,005

 
Raley's
 

El Camino Promenade
 
San Diego-Carlsbad et al, CA
 
100.0
%
 

 
129,676

 

 
T.J. Maxx, Staples, Dollar Tree
Rancho San Marcos Village
 
San Diego-Carlsbad et al, CA
 
100.0
%
 

 
134,628

 
Von’s
 
24 Hour Fitness
San Marcos Plaza
 
San Diego-Carlsbad et al, CA
 
100.0
%
 

 
81,086

 
(Albertsons)
 

580 Market Place
 
San Francisco-Oakland et al, CA
 
100.0
%
 

 
100,097

 
Safeway
 
24 Hour Fitness, Petco
Fremont Gateway Plaza
 
San Francisco-Oakland et al, CA
 
100.0
%
 

 
368,701

 
Raley’s
 
24 Hour Fitness, (Walgreens)
Greenhouse Marketplace
 
San Francisco-Oakland et al, CA
 
100.0
%
 

 
236,427

 
(Safeway)
 
(CVS), Jo-Ann Fabrics, 99 Cents Only, Factory 2 U, Petco
Silver Creek Plaza
 
San Jose-Sunnyvale et al, CA
 
100.0
%
 

 
202,820

 
Safeway
 
Walgreens, (Orchard Supply)
Freedom Centre
 
Santa Cruz-Watsonville, CA
 
100.0
%
 

 
150,865

 
Safeway
 
Rite Aid, Big Lots
Stony Point Plaza
 
Santa Rosa-Petaluma, CA
 
100.0
%
 

 
200,011

 
Food Maxx
 
Ross Dress for Less, Fallas Paredes
Creekside Center
 
Vallejo-Fairfield, CA
 
100.0
%
 

 
115,991

 
Raley’s
 

Southampton Center
 
Vallejo-Fairfield, CA
 
100.0
%
 

 
162,426

 
Raley’s
 
Ace Hardware, Dollar Tree
California Total:
 
 
 
 
 
 
 
4,933,349

 
 
 
 
Colorado
 
 
 
 
 
 
 
 
 
 
 
 
Aurora City Place
 
Denver-Aurora, CO
 
50.0
%
 
(1)(3)
 
542,956

 
(Super Target)
 
Sports Authority, Barnes & Noble, Ross Dress For Less, PetSmart
Cherry Creek
 
Denver-Aurora, CO
 
100.0
%
 

 
272,658

 
(Super Target)
 
Sports Authority, PetSmart
CityCenter Englewood
 
Denver-Aurora, CO
 
51.0
%
 
(1)(3)
 
359,103

 

 
(Walmart), Ross Dress for Less, Petco, Office Depot, Bally Total Fitness
Crossing at Stonegate
 
Denver-Aurora, CO
 
51.0
%
 
(1)(3)
 
109,082

 
King Sooper’s
 


16

Table of Contents

Center
 
CBSA (5)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Edgewater Marketplace
 
Denver-Aurora, CO
 
100.0
%
 

 
270,548

 
King Sooper's
 
Ace Hardware, (Target)
Green Valley Ranch Towne Center
 
Denver-Aurora, CO
 
50.0
%
 
(1)(3)
 
114,881

 
(King Sooper’s)
 

Lowry Town Center
 
Denver-Aurora, CO
 
50.0
%
 
(1)(3)
 
129,398

 
(Albertsons)
 

River Point at Sheridan
 
Denver-Aurora, CO
 
100.0
%
 

 
561,505

 

 
(Target), (Costco), Regal Cinema, Michaels, Conn's
Thorncreek Crossing
 
Denver-Aurora, CO
 
51.0
%
 
(1)(3)
 
386,127

 
Sprouts, (Super Target)
 
Barnes & Noble, Cost Plus, Michaels, OfficeMax, Dollar Tree
Colorado Total:
 
 
 
 
 
 
 
2,746,258

 
 
 
 
Florida
 
 
 
 
 
 
 
 
 
 
 
 
Argyle Village
 
Jacksonville, FL
 
100.0
%
 

 
315,432

 
Publix
 
Bed Bath & Beyond, T.J. Maxx, Babies “R” Us, Jo-Ann’s Fabrics, Michaels
Atlantic West
 
Jacksonville, FL
 
50.0
%
 
(1)(3)
 
180,578

 

 
T.J. Maxx, Dollar Tree, Shoe Carnival, (Kohl's)
Epic Village - St. Augustine
 
Jacksonville, FL
 
70.0
%
 
(1)
 
64,180

 

 
(Epic Theaters)
Kernan Village
 
Jacksonville, FL
 
50.0
%
 
(1)(3)
 
288,780

 
(Walmart Supercenter)
 
Ross Dress for Less, Petco
Boca Lyons
 
Miami-Fort Lauderdale et al, FL
 
100.0
%
 

 
117,423

 
4th Generation Market
 
Ross Dress for Less
Embassy Lakes
 
Miami-Fort Lauderdale et al, FL
 
100.0
%
 

 
179,937

 
Winn Dixie
 
Tuesday Morning, Dollar Tree
Flamingo Pines
 
Miami-Fort Lauderdale et al, FL
 
100.0
%
 

 
266,761

 
(Walmart Supercenter)
 
U.S. Post Office, Florida Technical College
Flamingo Pines
 
Miami-Fort Lauderdale et al, FL
 
20.0
%
 
(1)(3)
 
148,840

 
Publix
 

Hollywood Hills Plaza
 
Miami-Fort Lauderdale et al, FL
 
20.0
%
 
(1)(3)
 
405,145

 
Publix
 
Target, CVS
Northridge
 
Miami-Fort Lauderdale et al, FL
 
20.0
%
 
(1)(3)
 
236,628

 
Publix
 
Petco, Ross Dress for Less, Dollar Tree
Pembroke Commons
 
Miami-Fort Lauderdale et al, FL
 
20.0
%
 
(1)(3)
 
316,262

 
Publix
 
Marshalls, Office Depot, LA Fitness, Dollar Tree
Sunrise West Shopping Center
 
Miami-Fort Lauderdale et al, FL
 
25.0
%
 
(1)(3)
 
84,597

 
Publix
 

Tamiami Trail Shops
 
Miami-Fort Lauderdale et al, FL
 
20.0
%
 
(1)(3)
 
132,564

 
Publix
 
CVS
TJ Maxx Plaza
 
Miami-Fort Lauderdale et al, FL
 
100.0
%
 

 
161,429

 
Winn Dixie
 
T.J. Maxx, Dollar Tree
Vizcaya Square
 
Miami-Fort Lauderdale et al, FL
 
100.0
%
 

 
110,081

 
Winn Dixie
 

Sea Ranch Centre
 
Miami-Fort Lauderdale-Pompano Beach, FL
100.0
%
 

 
98,950

 
Publix
 
CVS, Dollar Tree
Alafaya Square
 
Orlando, FL
 
20.0
%
 
(1)(3)
 
176,341

 
Publix
 

Clermont Landing
 
Orlando, FL
 
65.1
%
 
(1)(3)
 
339,294

 

 
(J.C. Penney), (Epic Theater), T.J. Maxx, Ross Dress for Less, Michaels
Colonial Plaza
 
Orlando, FL
 
100.0
%
 

 
498,994

 

 
Staples, Ross Dress for Less, Marshalls, Old Navy, Stein Mart, Barnes & Noble, Petco, Big Lots, Hobby Lobby
International Drive Value Center
 
Orlando, FL
 
20.0
%
 
(1)(3)
 
185,365

 

 
Bed Bath & Beyond, Ross Dress for Less, T.J. Maxx
Marketplace at Seminole Towne Center
 
Orlando, FL
 
100.0
%
 

 
500,607

 
(Super Target)
 
Marshalls, Ross Dress for Less, Old Navy, Sports Authority, Petco
Phillips Crossing
 
Orlando, FL
 
100.0
%
 

 
145,644

 
Whole Foods
 
Golf Galaxy, Michaels
The Marketplace at Dr. Phillips
 
Orlando, FL
 
20.0
%
 
(1)(3)
 
326,090

 
Publix
 
Stein Mart, Home Goods, Morton's of Chicago, Office Depot
The Shoppes at South Semoran
 
Orlando, FL
 
100.0
%
 

 
101,611

 
Walmart Neighborhood Market
 
Dollar Tree
Winter Park Corners
 
Orlando, FL
 
100.0
%
 

 
102,382

 
Whole Foods Market
 
 
Indian Harbour Place
 
Palm Bay-Melbourne et al, FL
 
25.0
%
 
(1)(3)
 
177,471

 
Publix
 
Bealls
Pineapple Commons
 
Port St. Lucie-Fort Pierce, FL
 
20.0
%
 
(1)(3)
 
264,468

 

 
Ross Dress for Less, Best Buy, PetSmart, Marshalls, (CVS)
Quesada Commons
 
Punta Gorda, FL
 
25.0
%
 
(1)(3)
 
58,890

 
Publix
 
(Walgreens)
Shoppes of Port Charlotte
 
Punta Gorda, FL
 
25.0
%
 
(1)(3)
 
63,108

 
(Publix)
 
Petco, (Walgreens)
Countryside Centre
 
Tampa-St. Petersburg et al, FL
 
100.0
%
 

 
248,253

 

 
T.J. Maxx, Home Goods, Dick's Sporting Goods, Ross Dress for Less
East Lake Woodlands
 
Tampa-St. Petersburg et al, FL
 
20.0
%
 
(1)(3)
 
133,306

 
Walmart Neighborhood Market
 
Walgreens
Largo Mall
 
Tampa-St. Petersburg et al, FL
 
100.0
%
 

 
574,588

 
(Albertsons)
 
Bealls, Marshalls, PetSmart, Bed Bath & Beyond, Staples, Michaels, (Target)
Palms of Carrollwood
 
Tampa-St. Petersburg et al, FL
 
100.0
%
 

 
154,118

 
The Fresh Market
 
Bed Bath & Beyond
Sunset 19
 
Tampa-St. Petersburg et al, FL
 
100.0
%
 

 
275,910

 

 
Bed Bath & Beyond, Staples, Comp USA, Barnes & Noble, Sports Authority, Old Navy
Whole Foods @ Carrollwood
 
Tampa-St. Petersburg et al, FL
 
100.0
%
 
 (4)
 
36,900

 
Whole Foods Market
 

Florida Total:
 
 
 
 
 
 
 
7,470,927

 
 
 
 
Georgia
 
 
 
 
 
 
 
 
 
 
 
 
Brookwood Marketplace
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
397,295

 
(Super Target)
 
Home Depot, Bed Bath & Beyond, Office Max
Brookwood Square
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
181,333

 

 
Marshalls, LA Fitness
Brownsville Commons
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
81,886

 
(Kroger)
 

Camp Creek Marketplace II
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
228,003

 

 
DSW, LA Fitness, Shopper's World, American Signature
Dallas Commons
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
95,262

 
(Kroger)
 

Grayson Commons
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
76,611

 
Kroger
 


17

Table of Contents

Center
 
CBSA (5)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Lakeside Marketplace
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
332,889

 
(Super Target)
 
Ross Dress for Less, Petco
Mansell Crossing
 
Atlanta-Sandy Springs et al, GA
 
20.0
%
 
(1)(3)
 
102,931

 

 
buybuy BABY, Ross Dress for Less, Rooms to Go
Perimeter Village
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
373,621

 
Walmart Supercenter
 
Cost Plus World Market, DSW, Hobby Lobby
Publix at Princeton Lakes
 
Atlanta-Sandy Springs et al, GA
 
20.0
%
 
(1)(3)
 
72,207

 
Publix
 

Reynolds Crossing
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
115,983

 
(Kroger)
 

Roswell Corners
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
318,387

 
(Super Target)
 
Staples, T.J. Maxx
Roswell Crossing
 
Atlanta-Sandy Springs et al, GA
 
100.0
%
 

 
201,979

 
Trader Joe's
 
Office Max, PetSmart, Walgreens
Thompson Bridge Commons
 
Gainesville, GA
 
100.0
%
 
 (4)
 
95,587

 
(Kroger)
 

Georgia Total:
 
 
 
 
 
 
 
2,673,974

 
 
 
 
Kentucky
 
 
 
 
 
 
 
 
 
 
 
 
Millpond Center
 
Lexington-Fayette, KY
 
100.0
%
 

 
151,498

 
Kroger
 

Regency Shopping Centre
 
Lexington-Fayette, KY
 
100.0
%
 

 
188,782

 
(Kroger)
 
T.J. Maxx, Michaels
Tates Creek
 
Lexington-Fayette, KY
 
100.0
%
 

 
203,532

 
Kroger
 
Rite Aid
Festival at Jefferson Court
 
Louisville, KY-IN
 
100.0
%
 

 
218,107

 
Kroger
 
(PetSmart), (TJ Maxx), Staples, Party City
Kentucky Total:
 
 
 
 
 
 
 
761,919

 
 
 
 
Louisiana
 
 
 
 
 
 
 
 
 
 
 
 
K-Mart Plaza
 
Lake Charles, LA
 
50.0
%
 
(1)(3)
 
225,148

 
Albertsons
 
Kmart, Dollar Tree, Planet Fitness
Southgate
 
Lake Charles, LA
 
100.0
%
 

 
155,789

 
Market Basket
 
Office Depot, Books-A-Million
Danville Plaza
 
Monroe, LA
 
100.0
%
 

 
136,368

 
County Market
 
Citi Trends, Surplus Warehouse
Louisiana Total:
 
 
 
 
 
 
 
517,305

 
 
 
 
Maryland
 
 
 
 
 
 
 
 
 
 
 
 
Pike Center
 
Washington, DC-VA-MD-WV
 
100.0
%
 

 
80,841

 

 
T.G.I. Friday's, Ethan Allen, Pier 1
Maryland Total:
 
 
 
 
 
 
 
80,841

 
 
 
 
Missouri
 
 
 
 
 
 
 
 
 
 
 
 
Western Plaza
 
St. Louis, MO-IL
 
50.0
%
 
(1)(3)
 
56,734

 

 
Value Village
Missouri Total:
 
 
 
 
 
 
 
56,734

 
 
 
 
Nevada
 
 
 
 
 
 
 
 
 
 
 
 
Best in the West
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
428,066

 

 
Best Buy, T. J. Maxx, Babies "R" Us, Bed Bath & Beyond, Petsmart, Office Depot
Charleston Commons
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
367,544

 
Walmart
 
Ross Dress for Less, Office Max, 99 Cents Only, PetSmart
College Park S.C.
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
195,367

 
El Super
 
Factory 2 U, CVS
Decatur 215
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
241,700

 
(WinCo Foods)
 
(Target), Hobby Lobby
Eastern Horizon
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
353,538

 
Trader Joe's, (Kmart)
 

Francisco Centre
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
148,815

 
La Bonita Grocery
 
(Ross Dress for Less), Fallas Paredes
Paradise Marketplace
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
152,672

 
(Smith’s Food)
 
Dollar Tree
Rainbow Plaza
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
273,916

 
Albertsons
 
Ross Dress for Less, JC Penney, Home Depot, 24 Hour Fitness
Rainbow Plaza, Phase I
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
136,339

 
Albertsons
 
Ross Dress for Less, JC Penney, Home Depot, 24 Hour Fitness
Rancho Towne & Country
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
161,837

 
Smith’s Food
 

Tropicana Beltway
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
617,821

 
(Walmart Supercenter)
 
(Lowe’s), Ross Dress for Less, PetSmart, Office Depot, Sports Authority
Tropicana Marketplace
 
Las Vegas-Paradise, NV
 
100.0
%
 
 
 
142,643

 
(Smith’s Food)
 
Family Dollar
Westland Fair North
 
Las Vegas-Paradise, NV
 
100.0
%
 

 
598,213

 
(Walmart Supercenter)
 
(Lowe’s), PetSmart, Office Depot, Michaels, Anna's Linens
Nevada Total:
 
 
 
 
 
 
 
3,818,471

 
 
 
 
New Mexico
 
 
 
 
 
 
 
 
 
 
 
 
Eastdale
 
Albuquerque, NM
 
100.0
%
 

 
119,091

 
Albertsons
 
Family Dollar
North Towne Plaza
 
Albuquerque, NM
 
100.0
%
 

 
139,996

 
Whole Foods Market
 
Home Goods
New Mexico Total:
 
 
 
 
 
 
 
259,087

 
 
 
 
North Carolina
 
 
 
 
 
 
 
 
 
 
 
 
Galleria
 
Charlotte-Gastonia et al, NC-SC
 
100.0
%
 

 
328,276

 
(Walmart Supercenter)
 
Off Broadway Shoes
Whitehall Commons
 
Charlotte-Gastonia et al, NC-SC
 
100.0
%
 

 
444,803

 
(Walmart Supercenter), (Publix)
 
(Lowe's)
Bull City Market
 
Durham, NC
 
100.0
%
 

 
40,875

 
Whole Foods Market
 

Chatham Crossing
 
Durham, NC
 
25.0
%
 
(1)(3)
 
96,155

 
Lowes Foods
 
CVS
Hope Valley Commons
 
Durham, NC
 
100.0
%
 

 
81,371

 
Harris Teeter
 

Avent Ferry
 
Raleigh-Cary, NC
 
100.0
%
 

 
119,652

 
Food Lion
 
Family Dollar
Capital Square
 
Raleigh-Cary, NC
 
100.0
%
 

 
143,063

 
Food Lion
 

Falls Pointe
 
Raleigh-Cary, NC
 
100.0
%
 

 
198,549

 
Harris Teeter
 
(Kohl’s)
High House Crossing
 
Raleigh-Cary, NC
 
100.0
%
 

 
90,155

 
Harris Teeter
 


18

Table of Contents

Center
 
CBSA (5)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Leesville Town Centre
 
Raleigh-Cary, NC
 
100.0
%
 

 
127,106

 
Harris Teeter
 
Rite Aid
Northwoods Market
 
Raleigh-Cary, NC
 
100.0
%
 

 
77,802

 
Walmart Neighborhood Market
 
Dollar Tree
Six Forks Station
 
Raleigh-Cary, NC
 
100.0
%
 

 
467,660

 
Food Lion
 
Kmart, Home Depot, Bed Bath & Beyond, PetSmart
Stonehenge Market
 
Raleigh-Cary, NC
 
100.0
%
 

 
188,437

 
Harris Teeter
 
Stein Mart, Rite Aid
Surf City Crossing
 
Wilmington, NC
 
100.0
%
 

 
63,016

 
Harris Teeter
 

Waterford Village
 
Wilmington, NC
 
100.0
%
 

 
89,483

 
Harris Teeter
 

North Carolina Total:
 
 
 
 
 
 
 
2,556,403

 
 
 
 
Oklahoma
 
 
 
 
 
 
 
 
 
 
 
 
Town and Country
 
Oklahoma City, OK
 
100.0
%
 

 
128,231

 

 
Big Lots, Westlake Hardware, Aaron Rents
Oklahoma Total:
 
 
 
 
 
 
 
128,231

 
 
 
 
Oregon
 
 
 
 
 
 
 
 
 
 
 
 
Clackamas Square
 
Portland-Vancouver et al, OR-WA
 
20.0
%
 
(1)(3)
 
140,227

 
(Winco Foods)
 
T.J. Maxx
Oak Grove Market Center
 
Portland-Vancouver et al, OR-WA
 
100.0
%
 

 
97,177

 
Safeway
 

Raleigh Hills Plaza
 
Portland-Vancouver et al, OR-WA
 
20.0
%
 
(1)(3)
 
39,520

 
New Seasons Market
 
Walgreens
Oregon Total:
 
 
 
 
 
 
 
276,924

 
 
 
 
South Carolina
 
 
 
 
 
 
 
 
 
 
 
 
Fresh Market Shoppes
 
Hilton Head Island-Beaufort, SC
 
25.0
%
 
(1)(3)
 
86,694

 
The Fresh Market
 
Dollar Tree
South Carolina Total:
 
 
 
 
 
 
 
86,694

 
 
 
 
Tennessee
 
 
 
 
 
 
 
 
 
 
 
 
Bartlett Towne Center
 
Memphis, TN-MS-AR
 
100.0
%
 

 
192,624

 
Kroger
 
Petco, Dollar Tree, Shoe Carnival
Commons at Dexter Lake
 
Memphis, TN-MS-AR
 
100.0
%
 

 
178,558

 
Kroger
 
Stein Mart, Marshalls, HomeGoods
Commons at Dexter Lake Phase II
 
Memphis, TN-MS-AR
 
100.0
%
 

 
66,838

 
Kroger
 
Stein Mart, Marshalls, HomeGoods
Highland Square
 
Memphis, TN-MS-AR
 
100.0
%
 
 (4)
 
14,490

 

 
Walgreens
Mendenhall Commons
 
Memphis, TN-MS-AR
 
100.0
%
 

 
88,108

 
Kroger
 

Ridgeway Trace
 
Memphis, TN-MS-AR
 
100.0
%
 

 
307,727

 

 
(Target), Best Buy, Sports Authority, PetSmart
Tennessee Total:
 
 
 
 
 
 
 
848,345

 
 
 
 
Texas
 
 
 
 
 
 
 
 
 
 
 
 
Bell Plaza
 
Amarillo, TX
 
15.0
%
 
(1)
 
130,631

 
United Supermarket
 
Dollar Tree
Mueller Regional Retail Center
 
Austin-Round Rock-San Marcos, TX
100.0
%
 

 
351,099

 

 
Marshalls, PetSmart, Bed Bath & Beyond, Home Depot, Best Buy
North Park Plaza
 
Beaumont-Port Arthur, TX
 
50.0
%
 
(1)(3)
 
302,460

 

 
(Target), (Toys “R” Us), Anna's Linens, Spec's, Kirkland's
North Towne Plaza
 
Brownsville-Harlingen, TX
 
100.0
%
 

 
153,000

 

 
(Lowe's)
Moore Plaza
 
Corpus Christi, TX
 
100.0
%
 

 
599,622

 
(H-E-B)
 
Office Depot, Marshalls, (Target), Old Navy, Hobby Lobby, Stein Mart
Boswell Towne Center
 
Dallas-Fort Worth-Arlington, TX
 
100.0
%
 

 
88,008

 
(Albertsons)
 

Gateway Station
 
Dallas-Fort Worth-Arlington, TX
 
70.0
%
 
(1)
 
68,360

 

 
Conn's
Lake Pointe Market Center
 
Dallas-Fort Worth-Arlington, TX
 
100.0
%
 

 
121,689

 
(Tom Thumb)
 
(Walgreens)
Overton Park Plaza
 
Dallas-Fort Worth-Arlington, TX
 
100.0
%
 

 
463,431

 
Sprouts Farmers Market
 
Sports Authority, PetSmart, T.J. Maxx, (Home Depot), Goody Goody Wines, Anna’s Linens, buybuy BABY
Preston Shepard Place
 
Dallas-Fort Worth-Arlington, TX
 
20.0
%
 
(1)(3)
 
361,832

 

 
Babies "R" Us, Stein Mart, Nordstrom, Marshalls, Office Depot, Petco
10/Federal
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
132,472

 
Sellers Bros.
 
Palais Royal, Harbor Freight Tools
1919 North Loop West
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
138,058

 

 
State of Texas
Alabama-Shepherd
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
59,120

 
Trader Joe's
 
PetSmart
Bellaire Boulevard
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
41,273

 
Randall’s
 

Blalock Market at I-10
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
97,277

 
99 Ranch Market
 

Braeswood Square
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
104,778

 
Belden’s
 
Walgreens
Broadway
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
74,604

 

 
Big Lots, Family Dollar
Centre at Post Oak
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
183,940

 

 
Marshalls, Old Navy, Grand Lux Café, Nordstrom Rack, Arhaus
Citadel Plaza
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
121,000

 

 
Weingarten Realty Investors Corporate Office
Cullen Plaza
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
84,517

 
Fiesta
 
Family Dollar
Cypress Pointe
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
283,381

 
Kroger
 
Babies “R” Us
Fiesta Village
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
30,249

 
Fiesta
 

Galveston Place
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
210,370

 
Randall’s
 
Office Depot, Palais Royal, Spec's
Glenbrook Square
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
77,890

 
Kroger
 

Griggs Road
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
80,116

 

 
Family Dollar, Citi Trends
Harrisburg Plaza
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
93,438

 

 
Fallas Paredes
HEB - Dairy Ashford & Memorial
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 
 (4)
 
36,874

 
H-E-B
 


19

Table of Contents

Center
 
CBSA (5)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
Heights Plaza
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
71,277

 
Kroger
 

Humblewood Shopping Plaza
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
279,226

 

 
Conn’s, Walgreens, (Michaels), (DSW)
I-45/Telephone Rd. Center
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
171,599

 
Sellers Bros.
 
Famsa, Dollar Tree, Fallas Paredes
Lawndale
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
52,127

 

 
LaMichoacana Meat Market, Family Dollar, 99 Cents Only
League City Plaza
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
126,990

 
Kroger
 

Little York Plaza
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
113,878

 
Sellers Bros.
 
Fallas Paredes
Lyons Avenue
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
67,629

 
Fiesta
 
Fallas Paredes
Market at Town Center
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
388,865

 

 
Old Navy, Home Goods, Marshalls, Ross Dress for Less, Nordstrom Rack, Saks Fifth Avenue OFF 5TH
Market at Westchase
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
84,084

 
Whole Foods Market
 

Northbrook Center
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
173,288

 
Randall’s
 
Office Depot, Citi Trends, Anna’s Linens, Dollar Tree
Oak Forest
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
151,324

 
Kroger
 
Ross Dress for Less, Dollar Tree, Petsmart
Palmer Plaza
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
195,231

 

 
Dollar Tree
Randall's/Kings Crossing
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
126,397

 
Randall’s
 
CVS
Richmond Square
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
92,356

 

 
Best Buy, Cost Plus
River Oaks East
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
71,265

 
Kroger
 

River Oaks West
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
247,673

 
Kroger
 
Barnes & Noble, Talbots, Ann Taylor, Gap, JoS. A. Bank
Shoppes at Memorial Villages
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
184,354

 

 
Rexel
Shops at Kirby Drive
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
10,000

 

 
Freebirds Burrito
Shops at Three Corners
 
Houston-Baytown-Sugar Land, TX
 
70.0
%
 
(1)
 
277,871

 
Fiesta
 
Ross Dress for Less, PetSmart, Office Depot, Big Lots
Southgate
 
Houston-Baytown-Sugar Land, TX
 
15.0
%
 
(1)
 
125,260

 
Food-A-Rama
 
CVS, Family Dollar, Palais Royal
Stella Link
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
70,087

 
Sellers Bros.
 
Spec’s
Tomball Marketplace
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
298,857

 

 
(Academy), (Kohl's), Ross Dress For Less, Marshalls
Village Plaza at Bunker Hill
 
Houston-Baytown-Sugar Land, TX
 
57.8
%
 
(1)(3)
 
490,734

 
H-E-B
 
PetSmart, Babies "R" Us, Academy, Nordstrom Rack
Westchase Center
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
360,793

 
Whole Foods Market
 
(Target), Ross Dress for Less, Golfsmith, Palais Royal, Petco
Westhill Village
 
Houston-Baytown-Sugar Land, TX
 
100.0
%
 

 
128,791

 

 
Ross Dress for Less, Office Depot, 99 Cents Only, Anna’s Linens
Independence Plaza
 
Laredo, TX
 
100.0
%
 

 
347,302

 
H-E-B
 
TJ Maxx, Ross, Hobby Lobby, Petco, Ulta Beauty
North Creek Plaza
 
Laredo, TX
 
100.0
%
 

 
485,463

 
(H-E-B)
 
(Target), Marshalls, Old Navy, Best Buy, Bed Bath & Beyond
Plantation Centre
 
Laredo, TX
 
100.0
%
 

 
143,015

 
H-E-B
 

Las Tiendas Plaza
 
McAllen-Edinburg-Pharr, TX
 
50.0
%
 
(1)(3)
 
500,067

 

 
(Target), Academy, Conn’s, Ross Dress for Less, Marshalls, Office Depot
Market at Nolana
 
McAllen-Edinburg-Pharr, TX
 
50.0
%
 
(1)(3)
 
243,821

 
(Walmart Supercenter)
 

Market at Sharyland Place
 
McAllen-Edinburg-Pharr, TX
 
50.0
%
 
(1)(3)
 
301,174

 
(Walmart Supercenter)
 
Kohl's, Dollar Tree
Northcross
 
McAllen-Edinburg-Pharr, TX
 
50.0
%
 
(1)(3)
 
74,865

 

 
Barnes & Noble
Old Navy Building
 
McAllen-Edinburg-Pharr, TX
 
50.0
%
 
(1)(3)(4)
 
15,000

 

 
Old Navy
Sharyland Towne Crossing
 
McAllen-Edinburg-Pharr, TX
 
50.0
%
 
(1)(3)
 
484,949

 
H-E-B
 
(Target), T.J. Maxx, Petco, Office Depot, Ross Dress for Less
South 10th St. HEB
 
McAllen-Edinburg-Pharr, TX
 
50.0
%
 
(1)(3)
 
103,702

 
H-E-B
 

Starr Plaza
 
Rio Grande City, TX
 
50.0
%
 
(1)(3)
 
176,693

 
H-E-B
 
Bealls
Fiesta Trails
 
San Antonio, TX
 
100.0
%
 

 
482,370

 
(H-E-B)
 
(Target), Act III Theatres, Marshalls, Office Max, Stein Mart, Petco, Anna’s Linens
Parliament Square II
 
San Antonio, TX
 
100.0
%
 
(4)
 
54,541

 

 
Incredible Pizza
Thousand Oaks
 
San Antonio, TX
 
15.0
%
 
(1)
 
162,009

 
H-E-B
 
Bealls, Tuesday Morning
Valley View
 
San Antonio, TX
 
100.0
%
 

 
91,544

 

 
Marshalls, Dollar Tree
Broadway
 
Tyler, TX
 
100.0
%
 

 
60,447

 

 
Stein Mart
Texas Total:
 
 
 
 
 
 
 
12,576,407

 
 
 
 
Utah
 
 
 
 
 
 
 
 
 
 
 
 
DDS Office Building
 
Salt Lake City, UT
 
100.0
%
 

 
27,300

 

 

Taylorsville Town Center
 
Salt Lake City, UT
 
100.0
%
 

 
139,007

 
The Fresh Market
 
Rite Aid
West Jordan Town Center
 
Salt Lake City, UT
 
100.0
%
 

 
304,899

 

 
(Target), Petco
Utah Total:
 
 
 
 
 
 
 
471,206

 
 
 
 
Washington
 
 
 
 
 
 
 
 
 
 
 
 
Meridian Town Center
 
Seattle-Tacoma-Bellevue, WA
 
20.0
%
 
(1)(3)
 
143,012

 
(Safeway)
 
Jo-Ann Fabric & Craft Store, Tuesday Morning
Promenade 23
 
Seattle-Tacoma-Bellevue, WA
 
100.0
%
 

 
96,860

 
Red Apple Grocers
 
Walgreens
Queen Anne Marketplace
 
Seattle-Tacoma-Bellevue, WA
 
51.0
%
 
(1)(3)
 
81,385

 
Metropolitan Market
 
Bartell's Drug
Rainer Square Plaza
 
Seattle-Tacoma-Bellevue, WA
 
20.0
%
 
(1)(3)
 
108,356

 
Safeway
 
Ross Dress for Less

20

Table of Contents

Center
 
CBSA (5)
 
Owned %
 
Foot
Notes  
 
GLA
 
Grocer Anchor
( ) indicates owned
by others
 
Other Anchors
( ) indicates owned by others
South Hill Center
 
Seattle-Tacoma-Bellevue, WA
 
20.0
%
 
(1)(3)
 
134,010

 

 
Bed Bath & Beyond, Ross Dress for Less, Best Buy
Washington Total:
 
 
 
 
 
 
 
563,623

 
 
 
 
Total Operating Properties
 
 
 
 
 
 
 
45,064,945

 
 
 
 
New Development
 
 
 
 
 
 
 
 
 
 
Maryland
 
 
 
 
 
 
 
 
 
 
 
 
Nottingham Commons
 
Baltimore-Towson, MD
 
100.0
%
 
 (2)
 
2,209

 
 
 
 
Maryland Total:
 
 
 
 
 
 
 
2,209

 
 
 
 
North Carolina
 
 
 
 
 
 
 
 
 
 
 
 
Wake Forest Crossing II
 
Raleigh-Cary, NC
 
100.0
%
 
 (2)
 
93,595

 
 
 
 
North Carolina Total:
 
 
 
 
 
 
 
93,595

 
 
 
 
Virginia
 
 
 
 
 
 
 
 
 
 
 
 
Hilltop Village
 
Washington, DC-VA-MD-WV
 
50.0
%
 
(1)(2)
 
130,876

 
 
 
 
Virginia Total:
 
 
 
 
 
 
 
130,876

 
 
 
 
Total New Developments
 
 
 
 
 
226,680

 
 
 
 
___________________
(1)
Denotes property is held by a real estate joint venture or partnership; however, the gross leasable area square feet figures include our partners’ ownership interest in the property and property owned by others.
(2)
Denotes property currently under development.
(3)
Denotes properties that are not consolidated under generally accepted accounting principles.
(4)
Denotes single tenant property.
(5)
CBSA represents the Core Based Statistical Area.
ITEM 3. 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 4. Mine Safety Disclosures
Not applicable.

21

Table of Contents

PART II
ITEM 5. Market for Registrant’s Common Shares of Beneficial Interest, Related Shareholder Matters and Issuer Purchases of Equity Securities
Our common shares are listed and traded on the New York Stock Exchange under the symbol “WRI.” As of January 31, 2015, the number of holders of record of our common shares was 2,012. The closing high and low sale prices per common share as reported on the New York Stock Exchange, and dividends per share paid for the fiscal quarters indicated were as follows:
 
High
 
Low
 
Dividends    
 
2014:
 
 
 
 
 
 
Fourth
$
36.96

 
$
31.79

 
$
.575

(1) 
Third
34.47

 
31.28

 
.325

 
Second
32.86

 
30.13

 
.325

 
First
31.09

 
27.75

 
.325

 
2013:
 
 
 
 
 
 
Fourth
$
32.44

 
$
27.42

 
$
.305

 
Third
32.69

 
27.54

 
.305

 
Second
35.84

 
28.79

 
.305

 
First
31.55

 
27.35

 
.305

 
___________________
(1)
Comprised of a regular dividend of $.325 per common share and a special dividend of $.25 per common share.
The following table summarizes the equity compensation plans under which our common shares may be issued as of December 31, 2014:
Plan category
 
Number of 
shares to
be issued 
upon 
exercise of outstanding options,
warrants and rights
 
Weighted 
average
exercise price of
outstanding options,
warrants and rights
 
Number of 
shares
remaining available
for future issuance
Equity compensation plans approved by shareholders
 
2,897,123
 
$28.76
 
1,437,633
Equity compensation plans not approved by shareholders
 
 
 
Total
 
2,897,123
 
$28.76
 
1,437,633

22

Table of Contents

Performance Graph
The graph and table below provides an indicator of cumulative total shareholder returns for us as compared with the S&P 500 Stock Index and the FTSE NAREIT Equity Shopping Centers Index, weighted by market value at each measurement point. The graph assumes that on December 31, 2009, $100 was invested in our common shares and that all dividends were reinvested by the shareholder.
Comparison of Five Year Cumulative Return
*$100 invested on December 31, 2009 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

Source: SNL Financial LC
 
2010
 
2011
 
2012
 
2013
 
2014
Weingarten Realty Investors
$
126.10

 
$
121.27

 
$
155.50

 
$
165.96

 
$
221.43

S&P 500 Index
115.06

 
117.49

 
136.30

 
180.44

 
205.14

FTSE NAREIT Equity Shopping Centers Index
130.78

 
129.83

 
162.31

 
170.41

 
221.47

There can be no assurance that our share performance will continue into the future with the same or similar trends depicted in the graph above. We do not make or endorse any predications as to future share performance.

23

Table of Contents

ITEM 6. Selected Financial Data
The following table sets forth our selected consolidated financial data and should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Consolidated Financial Statements and accompanying Notes in “Item 8. Financial Statements and Supplementary Data” and the financial schedules included elsewhere in this Form 10-K.
 
(Amounts in thousands, except per share amounts)
Year Ended December 31,
 
2014
 
2013
 
2012
 
2011
 
2010
Operating Data: (1)
 
 
 
 
 
 
 
 
 
Revenues (primarily real estate rentals)
$
514,406

 
$
489,195

 
$
451,177

 
$
428,294

 
$
418,904

Depreciation and Amortization
150,356

 
146,763

 
127,703

 
118,890

 
113,161

Impairment Loss
1,024

 
2,579

 
9,585

 
49,671

 
33,317

Operating Income
182,038

 
159,868

 
144,361

 
103,314

 
117,922

Interest Expense, net
94,725

 
96,312

 
106,248

 
130,298

 
135,484

Gain on Sale and Acquisition of Real Estate Joint
Venture and Partnership Interests
1,718

 
33,670

 
14,203

 

 

Equity in Earnings (Losses) of Real Estate Joint
Ventures and Partnerships, net
22,317

 
35,112

 
(1,558
)
 
7,834

 
12,889

Benefit (Provision) for Income Taxes
1,261

 
(7,046
)
 
75

 
3

 
297

Income (Loss) from Continuing Operations
116,365

 
132,977

 
56,880

 
(14,088
)
 
5,307

Gain on Sale of Property
146,290

 
762

 
1,004

 
1,304

 
2,005

Net Income
307,579

 
265,156

 
152,421

 
16,739

 
51,238

Net Income Adjusted for Noncontrolling Interests
288,008

 
220,262

 
146,640

 
15,621

 
46,206

Net Income (Loss) Attributable to Common
Shareholders
$
277,168

 
$
184,145

 
$
109,210

 
$
(19,855
)
 
$
10,730

Per Share Data - Basic:
 
 
 
 
 
 
 
 
 
Income (Loss) from Continuing Operations
 Attributable to Common Shareholders
$
1.91

 
$
0.76

 
$
0.13

 
$
(0.40
)
 
$
(0.27
)
Net Income (Loss) Attributable to Common
 Shareholders
$
2.28

 
$
1.52

 
$
0.90

 
$
(0.17
)
 
$
0.09

Weighted Average Number of Shares
121,542

 
121,269

 
120,696

 
120,331

 
119,935

Per Share Data - Diluted:
 
 
 
 
 
 
 
 
 
Income (Loss) from Continuing Operations
 Attributable to Common Shareholders
$
1.89

 
$
0.75

 
$
0.13

 
$
(0.40
)
 
$
(0.27
)
Net Income (Loss) Attributable to Common
 Shareholders
$
2.25

 
$
1.50

 
$
0.90

 
$
(0.17
)
 
$
0.09

Weighted Average Number of Shares - Diluted
124,370

 
122,460

 
121,705

 
120,331

 
119,935

Balance Sheet Data:
 
 
 
 
 
 
 
 
 
Property (at cost)
$
4,076,094

 
$
4,289,276

 
$
4,399,850

 
$
4,688,526

 
$
4,777,794

Total Assets
3,814,094

 
4,223,929

 
4,184,784

 
4,588,226

 
4,807,855

Debt, net
$
1,938,188

 
$
2,299,844

 
$
2,204,030

 
$
2,531,837

 
$
2,589,448

Other Data:
 
 
 
 
 
 
 
 
 
Cash Flows from Operating Activities
$
240,769

 
$
233,992

 
$
227,330

 
$
214,731

 
$
214,625

Cash Flows from Investing Activities
218,077

 
134,654

 
370,308

 
(3,745
)
 
(121,421
)
Cash Flows from Financing Activities
(527,233
)
 
(296,674
)
 
(591,676
)
 
(221,203
)
 
(222,929
)
Cash Dividends per Common Share
1.55

 
1.22

 
1.16

 
1.10

 
1.04

Funds from Operations - Basic (2)
$
254,518

 
$
222,732

 
$
222,128

 
$
173,325

 
$
187,008

___________________
(1)
For all periods presented, the operating data related to continuing operations and gain on sale of property do not include the effects of amounts reported in discontinued operations, and certain business combination transactions have occurred. See Note 15 and 23 to our consolidated financial statements in Item 8 for additional information.
(2)
See Item 7 for the National Association of Real Estate Investment Trusts definition of funds from operations.

24

Table of Contents

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 45.3 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 3.5% of base minimum rental revenues during 2014.
At December 31, 2014, we owned or operated under long-term leases, either directly or through our interest in real estate joint ventures or partnerships, a total of 234 developed income-producing properties and three properties under development, which are located in 21 states spanning the country from coast to coast.
We also owned interests in 34 parcels of land held for development that totaled approximately 25.3 million square feet at December 31, 2014.
We had approximately 5,800 leases with 3,800 different tenants at December 31, 2014. 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 U.S. We have completed the transformation of our portfolio outlined in 2011 by disposing non-core properties and reinvesting in high-quality centers supported by stronger demographics. Our strategic initiatives have now turned to: (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.
Under our capital recycling plan, we disposed of non-core operating properties, which provided capital for growth opportunities and strengthened our operating fundamentals. During 2014, we successfully disposed of real estate assets with our share of aggregate gross sales proceeds totaling $387 million, which were owned by us either directly or through our interest in real estate joint ventures or partnerships. Although the transformation process is complete, we will continue to recycle properties that no longer meet our ownership criteria with the magnitude of these dispositions significantly reduced when compared to activity over the past several years. We expect to complete dispositions in the range of $125 million to $175 million in 2015, but we can give no assurances that this will actually occur. We have approximately $63 million of dispositions currently under contracts or letters of intent; however, there are no assurances that these transactions will close. Subsequent to year-end, we sold two properties with gross proceeds totaling $25 million.
As we are generally selling lower-tier, non-core assets, potential buyers requiring financing for such acquisitions may find access to capital an issue, especially if long-term interest rates rise, but conditions are currently very good. We intend to continue to recycle capital according to our business plan, although a number of factors, including weaknesses in the secured lending markets or a downturn in the economy, could adversely impact our ability to execute this plan.

25

Table of Contents

We continue to actively seek acquisitions opportunities to grow our operations. Despite substantial competition for quality opportunities, we will continue to identify select acquisition properties that meet our return hurdles and to actively evaluate other opportunities as they enter the market. In 2014, we acquired a center in Arizona with a gross purchase price of $43.8 million. For 2015, we expect to invest in acquisitions in the range of $200 million to $250 million, but we can give no assurances that this will actually occur. Subsequent to year-end, we acquired one center in Texas with a gross purchase price of $43.1 million.
We 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, combined with an increase in supermarket sales, has driven an increase in new development activity and retailer interest, which we believe is a positive trend. During 2014, we acquired two new development properties located in North Carolina and Maryland, with our expected investment in these properties to be approximately $62 million. Furthermore, we have a contractual commitment to purchase the retail portion of a mixed-use project in Washington from its developer, and our expected investment in this mixed-use project approximates $29 million. For 2015, we expect to invest in new developments in the range of $50 million to $100 million, but we can give no assurances that this will actually occur.
In addition, we continue to look for internal growth opportunities. Currently, we have 13 redevelopment projects in which we plan to invest approximately $67 million over the next 24 months. Additionally, in 2014 we completed one redevelopment project in a 50% unconsolidated real estate joint venture, which has added approximately 7,200 incremental square feet to to the total portfolio, with our share of the incremental investment totaling $.6 million. Upon completion, the average projected stabilized return on our incremental investment on these redevelopment projects is expected to range between 10% to 15%.
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. During 2014, we repaid $315 million of medium term notes from the net proceeds of our $250 million issuance in October 2013 of 4.45% senior unsecured notes that had been previously invested in short-term investments of $50 million and cash and cash equivalents. Furthermore, in 2014, we redeemed the total outstanding principal amount of $100 million of our 8.1% senior unsecured notes, which was funded through our revolving credit facility. These transactions have decreased our interest costs by replacing high-cost debt with considerably lower rate debt.
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. While the availability of capital has improved over the past few years, there can be no assurance that favorable pricing and availability will not deteriorate in the future. The transformation of our operating portfolio and the continued strengthening of our consolidated balance sheet has been rewarded with a change in outlook to Positive from Stable by Moody’s Investor Services during 2014.
Operational Metrics
In assessing the performance of our centers, management carefully monitors various operating metrics of the portfolio. As a result of our transformation initiative, strong leasing activity, low tenant fallout and lack of quality retail space in the market, the operating metrics of our portfolio strengthened in 2014 as we focused on increasing occupancy and same property net operating income ("SPNOI" and see Non-GAAP Financial Measures for additional information). Our portfolio delivered solid operating results with:
improved occupancy to 95.4% for the year ended December 31, 2014 over the same period of 2013 of 94.8%;
an increase of 3.4% in SPNOI for the year ended December 31, 2014 over the same period of 2013; and
rental rate increases of 13.1% for new leases and 9.3% for renewals during 2014.
Below are performance metrics associated with our signed occupancy, SPNOI growth and leasing activity on a pro rata basis:
 
December 31,
 
2014
 
2013
Anchor (space of 10,000 square feet or greater)
98.9
%
 
98.5
%
Non-Anchor (small shop)
89.8
%
 
89.0
%
Total Occupancy
95.4
%
 
94.8
%

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Three Months Ended 
 December 31, 2014
 
Twelve Months Ended 
 December 31, 2014
SPNOI Growth (1)
3.6
%
 
3.4
%
___________________
(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 7.
 
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 December 31, 2014
 
 
 
 
 
 
New leases (1)
54

 
134

 
$
19.46

 
$
17.63

 
$
12.33

 
10.4
%
Renewals
186

 
682

 
15.07

 
13.53

 
0.06

 
11.4
%
Not comparable spaces
43

 
162

 

 

 

 
%
Total
283

 
978

 
$
15.79

 
$
14.20

 
$
2.07

 
11.2
%
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended December 31, 2014
 
 
 
 
 
 
New leases (1)
236

 
690

 
$
18.95

 
$
16.76

 
$
21.70

 
13.1
%
Renewals
737

 
2,737

 
15.52

 
14.20

 
0.03

 
9.3
%
Not comparable spaces
187

 
700

 

 

 

 
%
Total
1,160

 
4,127

 
$
16.21

 
$
14.72

 
$
4.39

 
10.1
%
___________________
(1)
Average external lease commissions per square foot for the three and twelve months ended December 31, 2014 were $4.18 and $4.58, 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 us to further increase occupancy levels slightly; however, occupancy may oscillate 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 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 will average between 2.5% to 3.5% for 2015.
New Development
At December 31, 2014, we had four projects under development. We have funded $82.8 million to date on these projects, and we estimate our aggregate net investment upon completion to be $156.6 million. Overall, the average projected stabilized return on investment for these properties is expected to be approximately 7.7% upon completion.
We had approximately $103.3 million in land held for development at December 31, 2014. 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 scarce. We intend to continue to pursue additional development and redevelopment opportunities in multiple markets; however, finding the right opportunities remains challenging.
Acquisitions and Joint Ventures
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 remain disciplined in approaching these opportunities, pursuing only those that provide appropriate risk-adjusted returns.

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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 consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these consolidated 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 consolidated 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. We believe the following critical accounting policies require more significant judgments and estimates used in the preparation of our consolidated financial statements.
Property
Acquisitions of properties are accounted for utilizing the acquisition method and, accordingly, the results of operations of an acquired property are included in our results of operations from the date of acquisition. Estimates of fair values are based upon future cash flows and other valuation techniques in accordance with our fair value measurements accounting policy. Fair values are used to record the purchase price of acquired property among land, buildings on an “as if vacant” basis, tenant improvements, other identifiable intangibles and any goodwill or gain on purchase. Other identifiable intangible assets and liabilities include the effect of out-of-market leases, the value of having leases in place (“as is” versus “as if vacant” and absorption costs), out-of-market assumed mortgages and tenant relationships. Depreciation and amortization is computed using the straight-line method, generally over estimated useful lives of 40 years for buildings and over the lease term which includes bargain renewal options for other identifiable intangible assets. The impact of these estimates, including incorrect estimates in connection with acquisition values and estimated useful lives, could result in significant differences related to the purchased assets, liabilities and resulting depreciation or amortization. Acquisition costs are expensed as incurred.
Real Estate Joint Ventures and Partnerships
To determine the method of accounting for partially owned real estate joint ventures and partnerships, management evaluates the characteristics of associated entities and determines whether an entity is a variable interest entity (“VIE”) and, if so, determines which party is the primary beneficiary by analyzing whether we have both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the design of the entity structure, the nature of the entity’s operations, future cash flow projections, the entity’s financing and capital structure, and contractual relationships and terms. We consolidate a VIE when we have determined that we are the primary beneficiary.
Primary risks associated with our VIEs include the potential funding of the entities’ debt obligations or making additional contributions to fund the entities’ operations.
Partially owned, non-variable interest real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our consolidated financial statements. In determining whether we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Partially owned real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method.
Management continually analyzes and assesses reconsideration events, including changes in the factors mentioned above, to determine if the consolidation treatment remains appropriate. Decisions regarding consolidation of partially owned entities frequently require significant judgment by our management. Errors in the assessment of consolidation could result in material changes to our consolidated financial statements.

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Impairment
Our property is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any capitalized costs and any identifiable intangible assets, may not be recoverable.
If such an event occurs, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future, with consideration of applicable holding periods, on an undiscounted basis to the carrying amount of such property. If we determine the carrying amount is not recoverable, our basis in the property is reduced to its estimated fair value to reflect impairment in the value of the asset. Fair values are determined by management utilizing cash flow models, market capitalization and discount rates, or by obtaining third-party broker or appraisal estimates in accordance with our fair value measurements accounting policy.
We review current economic considerations each reporting period, including the effects of tenant bankruptcies, the suspension of tenant expansion plans for new development projects, declines in real estate values and any changes to plans related to our new development projects including land held for development, to identify properties where we believe market values may be deteriorating. Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. The evaluations used in these analyses could result in incorrect estimates when determining carrying values that could be material to our consolidated financial statements.
Our investment in partially owned real estate joint ventures and partnerships is reviewed for impairment each reporting period. The ultimate realization is dependent on a number of factors, including the performance of each investment and market conditions. We will record an impairment charge if we determine that a decline in the estimated fair value of an investment below its carrying amount is other than temporary. A considerable amount of judgment by our management is used in this evaluation. Our overall future plans for the investment, our investment partner’s financial outlook and our views on current market and economic conditions may have a significant impact on the resulting factors analyzed for these purposes.
Our investments in tax increment revenue bonds are reviewed for impairment, including the evaluation of changes in events or circumstances that may indicate that the carrying amount of the investment may not be recoverable. Realization is dependent on a number of factors, including investment performance, market conditions and payment structure. We will record an impairment charge if we determine that a decline in the value of the investment below its carrying amount is other than temporary, recovery of its cost basis is uncertain, and/or it is uncertain if the investment will be held to maturity. A considerable amount of judgment by our management is used in this evaluation, which may produce incorrect estimates that could be material to our consolidated financial statements.
Results of Operations
Comparison of the Year Ended December 31, 2014 to the Year Ended December 31, 2013
The following table is a summary of certain items from our Consolidated Statements of Operations, which we believe represent items that significantly changed during 2014 as compared to the same period in 2013:
 
Year Ended December 31,
 
2014
 
2013
 
Change
 
% Change
Revenues
$
514,406

 
$
489,195

 
$
25,211

 
5.2
%
Interest expense, net
94,725

 
96,312

 
(1,587
)
 
(1.6
)
Interest and other income, net
3,756

 
7,685

 
(3,929
)
 
(51.1
)
Gain on sale and acquisition of real estate joint
venture and partnership interests
1,718

 
33,670

 
(31,952
)
 
(94.9
)
Equity in earnings of real estate joint
ventures and partnerships, net
22,317

 
35,112

 
(12,795
)
 
(36.4
)
Benefit (provision) for income taxes
1,261

 
(7,046
)
 
8,307

 
117.9

Revenues
The increase in revenues of $25.2 million is primarily attributable to an increase in net rental revenues from acquisitions and new development completions, which contributed $18.7 million, as well as increases in occupancy and rental rates, which is offset by our dispositions in the third and fourth quarters of 2014.


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Interest Expense, net
Net interest expense decreased $1.6 million or 1.6%. The components of net interest expense were as follows (in thousands): 
 
Year Ended December 31,
 
2014
 
2013
Gross interest expense
$
98,973

 
$
108,333

Over-market mortgage adjustment
(946
)
 
(9,618
)
Capitalized interest
(3,302
)
 
(2,403
)
Total
$
94,725

 
$
96,312

Gross interest expense totaled $99.0 million in 2014, down $9.4 million or 8.6% from 2013. The decrease in gross interest expense is primarily attributable to a reduction in both the weighted average debt outstanding and interest rates as a result of the repayment of notes through the revolving credit facility, disposition proceeds and short-term investments from the October 2013 note issuance, all of which totaled $11.6 million. In 2014, the weighted average debt outstanding was $2.08 billion at a weighted average interest rate of 4.65% as compared to $2.14 billion outstanding at a weighted average interest rate of 5.06% in 2013. Offsetting this decrease is a $1.2 million write-off of debt costs in 2014 associated with the redemption of the 8.1% senior unsecured notes. The decrease in the over-market mortgage adjustment of $8.7 million is primarily attributable to a $9.7 million write-off in 2013 of an above-market mortgage intangible from the early payoff of the associated mortgage.
Interest and Other Income, net
The decrease of $3.9 million is attributable primarily a $2.0 million decrease in the fair value of assets held in a grantor trust related to our deferred compensation plan and the repayment of various notes receivable.
Gain on Sale and Acquisition of Real Estate Joint Venture and Partnership Interests
The decrease of $32.0 million is attributable to the gains in 2013 associated with the liquidation of an unconsolidated real estate joint venture that owned industrial properties of $11.5 million and the acquisition of an unconsolidated real estate joint venture interest totaling $20.2 million.
Equity in Earnings of Real Estate Joint Ventures and Partnerships, net
The decrease of $12.8 million is primarily attributable to a decrease in the gain on sales from the 2014 and 2013 dispositions, of which our share totaled $11.0 million and the purchase of a 50% equity interest in December 2013.
Benefit (Provision) for Income Taxes
The increase of $8.3 million is primarily attributable to the tax effect of the gain in 2013 associated with the purchase of a 50% unconsolidated joint venture interest by our taxable REIT subsidiary.

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Comparison of the Year Ended December 31, 2013 to the Year Ended December 31, 2012
The following table is a summary of certain items from our Consolidated Statements of Operations, which we believe represent items that significantly changed during 2013 as compared to the same period in 2012:
 
Year Ended December 31,
 
2013
 
2012
 
Change
 
% Change
Revenues
$
489,195

 
$
451,177

 
$
38,018

 
8.4
%
Depreciation and amortization
146,763

 
127,703

 
19,060

 
14.9

Operating expenses
97,099

 
88,924

 
8,175

 
9.2

Real estate taxes, net
57,515

 
52,066

 
5,449

 
10.5

Impairment loss
2,579

 
9,585

 
(7,006
)
 
(73.1
)
General and administrative expenses
25,371

 
28,538

 
(3,167
)
 
(11.1
)
Interest expense, net
96,312

 
106,248

 
(9,936
)
 
(9.4
)
Gain on sale and acquisition of real estate joint
venture and partnership interests
33,670

 
14,203

 
19,467

 
137.1

Equity in earnings (losses) of real estate joint
ventures and partnerships, net
35,112

 
(1,558
)
 
36,670

 
2,353.7

(Provision) benefit for income taxes
(7,046
)
 
75

 
(7,121
)
 
(9,494.7
)
Revenues
The increase in revenues of $38.0 million is primarily attributable to an increase in net rental revenues of $37.3 million due primarily to increases in occupancy and rental rates, new development completions of $2.4 million and acquisitions of $18.7 million.
Depreciation and Amortization
The increase of $19.1 million is primarily attributable to acquisitions, new development completions and other capital activities.
Operating Expenses
The increase in operating expenses of $8.2 million is primarily attributable to acquisitions, which totaled $2.7 million, an increase in management fees of $2.1 million primarily attributable to a fair value increase in the assets held in a grantor trust related to our deferred compensation plan of $1.1 million and a slight increase in other operating expenses at our existing properties.
Real Estate Taxes, net
The increase in real estate taxes, net of $5.4 million is primarily attributable to rate and valuation changes, as well as acquisitions and new development completions.
Impairment Loss
The decrease in impairment loss of $7.0 million is primarily attributable to the $6.6 million loss in 2012 associated with an equity interest in an unconsolidated real estate joint venture that owned industrial properties.
General and Administrative Expenses
The decrease in general and administrative expenses of $3.2 million is primarily attributable to a reduction in personnel due to attrition and property dispositions and a decrease in share-based compensation associated with retirement eligible employees.

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Interest Expense, net
Net interest expense decreased $9.9 million or 9.4%. The components of net interest expense were as follows (in thousands): 
 
Year Ended December 31,
 
2013
 
2012
Gross interest expense
$
108,333

 
$
111,673

Over-market mortgage adjustment
(9,618
)
 
(2,300
)
Capitalized interest
(2,403
)
 
(3,125
)
Total
$
96,312

 
$
106,248

Gross interest expense totaled $108.3 million in 2013, down $3.3 million or 3.0% from 2012. The decrease in gross interest expense results primarily from a reduction in both the weighted average debt outstanding and interest rates as a result of refinancing of notes and mortgages with proceeds from dispositions and note issuances. In 2013, the weighted average debt outstanding was $2.14 billion at a weighted average interest rate of 5.06% as compared to $2.18 billion outstanding at a weighted average interest rate of 5.12% in 2012. The increase in the over-market mortgage adjustment of $7.3 million is attributable to the write-off of net above-market mortgage intangibles associated with the early payoff of the related mortgage in both 2013 and 2012.
Gain on Sale and Acquisition of Real Estate Joint Venture and Partnership Interests
The gain in 2013 is attributable to the liquidation of an unconsolidated real estate joint venture that owned industrial properties of $11.5 million, the acquisition of an unconsolidated real estate joint venture interest totaling $20.2 million and the sale of an interest in four unconsolidated real estate joint ventures of $1.9 million, while the gain in 2012 was associated with the sale of an interest in six unconsolidated real estate joint ventures.
Equity in Earnings (Losses) of Real Estate Joint Ventures and Partnerships, net
The increase of $36.7 million is attributable to the gain on sale from 2013 dispositions, of which our share totaled $16.0 million and our share of impairment losses recorded in 2012, which totaled $19.9 million.
(Provision) Benefit for Income Taxes
The decrease of $7.1 million is primarily attributable to the tax effect of the gain in 2013 associated with the purchase of a 50% unconsolidated joint venture interest by our taxable REIT subsidiary.
Effects of Inflation
We have structured our leases in such a way as to remain largely unaffected should significant inflation occur. Most of the leases contain percentage rent provisions whereby we receive increased rentals based on the tenants’ gross sales. Many leases provide for increasing minimum rental rates during the terms of the leases through escalation provisions. In addition, many of our leases are for terms of less than 10 years, allowing us to adjust rental rates to changing market conditions when the leases expire. Most of our leases also require the tenants to pay their proportionate share of operating expenses and real estate taxes. As a result of these lease provisions, increases in operating expenses due to inflation, as well as real estate tax rate increases, generally do not have a significant adverse effect upon our operating results as they are absorbed by our tenants. Under the current economic climate, little to no inflation is occurring.
Economic Conditions
Underlying economic fundamentals continue to show positive, albeit slow, gains as the economic recovery continues to stabilize. Consumer confidence continues to fluctuate, although it is generally positive as oil prices decline and the labor market improves. Furthermore, personal income and housing prices are continuing to increase in our primary markets. We believe there is a direct correlation between housing wealth and consumption, and we expect rebounding home prices will further strengthen retail fundamentals, including rent growth and net operating income. Our focus on supermarket-anchored centers in densely populated major metropolitan areas should position our portfolio to capitalize on the improving retail landscape.

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With respect to Houston and other markets that are energy dependent, the reduction in oil prices will likely have a negative impact on the local economy and depending upon the duration of the low oil price environment, could impact the performance of our centers. However, our transformation strategy resulted in the sale of most of our lower quality assets in Houston and other energy dependent markets, which we believe reduces the potential negative impact of the low oil prices to us.
As strengthening retail fundamentals drive demand for investments in top-tier retail real estate, we continue to dedicate internal resources to identify and evaluate available assets in our markets so that we may purchase the best assets and properties with the strongest upside potential. Also, we continue to look for redevelopment opportunities within our existing portfolio by repositioning our anchor tenants and new development opportunities to spur growth.
Capital Resources and Liquidity
Our primary operating liquidity needs are paying our common and preferred dividends, maintaining and operating our existing properties, paying our debt service costs, excluding debt maturities, and funding capital expenditures. Under our 2015 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 and new development 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 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 December 31, 2014, we had an available borrowing capacity of $306.8 million under our revolving credit facility, and our debt maturities for 2015 total $225.9 million. We repaid $315 million of medium term notes during 2014 from the net proceeds of our $250 million issuance in October 2013 of 4.45% senior unsecured notes that previously had been invested in short-term investments of $50 million and cash and cash equivalents. Additionally in 2014, we redeemed the total outstanding principal amount of $100 million of our 8.1% senior unsecured notes, which was funded through our revolving credit facility.
Currently, we are in negotiations associated with a $200 million unsecured five-year term note and a ten-year extension of an existing $66 million secured note, which are anticipated to close by the first quarter of 2015. The proceeds of the term note will be used for general corporate purposes, and the interest rate associated with the existing secured note is anticipated to be reduced by 3.9% to 3.5% with approximately $6.1 million of debt extinguishment costs being realized.
We believe proceeds from the transactions above and our capital recycling program, combined with our available capacity under the credit facilities, will provide adequate liquidity to fund our capital needs, including acquisitions 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 2014, aggregate gross sales proceeds from our dispositions totaled $387.4 million. Operating cash flows from discontinued operations are included in net cash from operating activities in our Consolidated Statements of Cash Flows, while proceeds from discontinued operations are included as investing activities. At December 31, 2014, discontinued operations represent .4% of our net cash from operating activities, and we expect future net cash from operating activities to decrease accordingly when compared to prior periods. This is representative of our centers that were classified as discontinued operations or held for sale prior to April 1, 2014, our adoption date for the new qualification criteria for discontinued operations.

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Table of Contents

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 $380.8 million, of which our pro rata ownership is $156.2 million, at December 31, 2014. Scheduled principal mortgage payments on this debt, excluding non-cash related items totaling $1.1 million, at 100% are as follows (in millions): 
2015
$
77.6

2016
110.9

2017
56.8

2018
6.3

2019
6.6

Thereafter
121.5

Total
$
379.7

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 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 2014, we acquired one center in Arizona with a gross purchase price of $43.8 million.
Dispositions
During 2014, we sold 30 centers and other property, including real estate assets through our interest in unconsolidated real estate joint ventures and partnerships, and we partially disposed of an unconsolidated real estate joint venture interest. Our share of aggregate gross sales proceeds from these transactions totaled $387.4 million and generated our share of the gains of approximately $174.2 million.
During 2014, we completed the dissolution of our consolidated real estate joint venture with Hines, in which we owned a 30% interest. This joint venture held a portfolio of 13 centers located in Texas, Tennessee, Georgia, Florida and North Carolina. The transaction was completed through the distribution of five centers to us, resulting in an increase to our equity of $11.0 million, and eight centers to Hines. The centers distributed to Hines were classified as held for sale at December 31, 2013, and we realized a $23.3 million gain in discontinued operations associated with this transaction.
New Development
At December 31, 2014, we had four projects under development with a total square footage of approximately .7 million, of which we have funded $82.8 million to date on these projects. Upon completion, we expect our aggregate net investment in these properties to be $156.6 million.
Our new development projects are financed generally under our revolving credit facility, as it is our general practice not to use third party construction financing. Management monitors amounts outstanding under our 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.

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Capital Expenditures
Capital expenditures for additions to the existing portfolio, acquisitions, tenant improvements, new development and our share of investments in unconsolidated real estate joint ventures and partnerships are as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
Acquisitions
$
43,587

 
$
129,719

New Development
47,402

 
19,264

Tenant Improvements
24,432

 
33,259

Capital Improvements
15,202

 
13,312

Other (includes redevelopments)
14,681

 
10,092

Total
$
145,304

 
$
205,646

The decrease in capital expenditures is attributable primarily to a decline in acquisition activity offset by the increase in new development activity during 2014 compared to the same period in 2013.
For 2015, we anticipate our acquisitions to total between $200 million and $250 million. We anticipate our 2015 tenant improvement expenditures to be consistent with 2014. Our new development investment for 2015 is estimated to be approximately $50 million to $100 million. For 2015, capital improvement spending is expected to be consistent with 2014 expenditures. No assurances can be provided that our planned capital activities will occur. Further, we have entered into commitments aggregating $64.3 million comprised principally of construction contracts which are generally due in 12 to 36 months and anticipated to be funded under our revolving credit facility.
Capital expenditures for additions described above relate to cash flows from investing activities as follows(in thousands):
 
Year Ended December 31,
 
2014
 
2013
Acquisition of real estate and land
$
43,587

 
$
105,765

Development and capital improvements
100,926

 
76,992

Real estate joint ventures and partnerships - Investments
791

 
22,600

Notes receivable from real estate joint ventures and
partnerships - Advances for capital expenditures

 
289

Total
$
145,304

 
$
205,646

Capitalized soft costs, including payroll and other general and administrative costs, interest and real estate taxes, totaled $10.7 million and $9.7 million for the year ended December 31, 2014 and 2013, respectively.
Financing Activities:
Debt
Total debt outstanding was $1.9 billion at December 31, 2014 and included $1.7 billion which bears interest at fixed rates and $286.2 million, including the effect of $65.3 million of interest rate contracts, which bears interest at variable rates. Additionally, of our total debt, $595.0 million was secured by operating properties while the remaining $1.3 billion was unsecured.
At December 31, 2014, we have a $500 million unsecured revolving credit facility which expires in April 2017 and provides borrowing rates that float at a margin over LIBOR plus a facility fee. At December 31, 2014, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, were 115 and 20 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 $700 million. As of January 31, 2015, we had $207.0 million outstanding, and the available balance was $288.8 million, net of $4.2 million in outstanding letters of credit.

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We also had an agreement with a bank for an unsecured and uncommitted overnight facility totaling $99 million that we maintained for cash management purposes. The facility provided for fixed interest rate loans at a 30-day LIBOR rate plus a borrowing margin based on market liquidity. As of January 2, 2015, this facility was canceled and has not been replaced.
For the year ended December 31, 2014, the maximum balance and weighted average balance outstanding under both facilities combined were $270.0 million and $151.0 million, respectively, at a weighted average interest rate of .8%.
During 2014, we repaid $315 million of medium term notes from the net proceeds of our $250 million issuance in October 2013 of 4.45% senior unsecured notes that had been previously invested in short-term investments of $50 million and cash and cash equivalents. Additionally, in 2014, we redeemed the total outstanding principal amount of $100 million of our 8.1% senior unsecured notes, which was funded through our revolving credit facility.
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 December 31, 2014.
Our most restrictive public debt covenant ratios, as defined in our indenture and supplemental indenture agreements, were as follows at December 31, 2014:
Covenant
 
Restriction
 
Actual
Debt to Asset Ratio
 
Less than 60.0%
 
41.7%
Secured Debt to Asset Ratio
 
Less than 40.0%
 
12.8%
Annual Service Charge Ratio
 
Greater than 1.5
 
3.7
Unencumbered Asset Test
 
Greater than 150%
 
253.0%
At December 31, 2014, we had two interest rate contracts, maturing through October 2017, with an aggregate notional amount of $65.3 million that were designated as fair value hedges and convert fixed interest payments at rates of 7.5% to variable interest payments ranging from 4.2% to 4.3%.
At December 31, 2014, we had one interest rate contract with an aggregate notional amount of $5.2 million that was designated as a cash flow hedge. This contract matures in December 2015 and fixes interest rates at 2.4%. We have determined that this contract is highly effective in offsetting future variable interest cash flows.
We could be exposed to losses in the event of nonperformance by the counter-parties related to our interest rate contracts; however, management believes such nonperformance is unlikely.
Equity
In February 2015, our Board of Trust Managers approved an increase in our 2015 first quarter dividend for our common shares from $.325 to $.345 per share. Common and preferred dividends paid totaled $199.3 million during 2014. During 2014, we paid a special dividend for our common shares in the amount of $.25 per share, which was due to the significant gains on dispositions of property. Our dividend payout ratio (as calculated as dividends paid on common shares divided by funds from operations (“FFO”) - basic) for the year ended December 31, 2014 approximated 74.5%. FFO - basic for the year ended December 31, 2014 included the following non-cash transactions; the write-off of net debt costs, deferred tax benefit adjustments and other non-cash items. Excluding the special dividend paid, our dividend payout ratio would have been 62.5% for the year ended December 31, 2014.
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 $64.3 million comprised principally of construction contracts which are generally due in 12 to 36 months. The following table summarizes our primary contractual obligations as of December 31, 2014 (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2016
 
2017
 
2018
 
2019
 
Thereafter
 
Total
Mortgages and Notes
Payable (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured Debt
$
145,244

 
$
115,164

 
$
60,304

 
$
232,802

 
$
33,854

 
$
1,003,928

 
$
1,591,296

Secured Debt
168,945

 
182,840

 
131,450

 
58,569

 
59,973

 
87,810

 
689,587

Lease Payments
2,973

 
2,851

 
2,672

 
2,636

 
2,530

 
117,642

 
131,304

Other Obligations (2)
56,763

 
57,814

 
50

 

 

 

 
114,627

Total Contractual
Obligations
$
373,925

 
$
358,669

 
$
194,476

 
$
294,007

 
$
96,357

 
$
1,209,380

 
$
2,526,814

 
___________________
(1)
Includes principal and interest with interest on variable-rate debt calculated using rates at December 31, 2014, excluding the effect of interest rate swaps. Also, excludes a $72.1 million debt service guaranty liability.
(2)
Other obligations include income and real estate tax payments, commitments associated with our secured debt and other employee payments. Included in 2015 is the estimated contribution to our retirement plan, which meets or exceeds the minimum statutory funding requirements. See Note 19 for additional information. Included in 2016 is a purchase obligation of $23.8 million. See Note 21 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 ("Agency") issued Series A bonds used for an urban renewal project, of which $72.1 million remain outstanding at December 31, 2014. 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 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 December 31, 2014.
Off Balance Sheet Arrangements
As of December 31, 2014, 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 $4.2 million were outstanding under the revolving credit facility at December 31, 2014.
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. We have also committed to fund the capital requirements of new development joint ventures. 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.

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As of December 31, 2014, 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 $11.0 million at December 31, 2014.
As of December 31, 2014, we are working with a developer of a mixed-use project in Washington and have executed an agreement to purchase the retail portion of the project for approximately $23.8 million at closing, which is estimated to be in August 2016.
We have a real estate limited partnership agreement with a foreign institutional investor with a remaining potential obligation to purchase up to $240 million through December 31, 2015. Our ownership in this unconsolidated real estate limited partnership is 51%. To date, one property has been purchased.
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
The National Association of Real Estate Investment Trusts (“NAREIT”) defines 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 FFO in a manner consistent with the NAREIT definition.
We believe 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 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 FFO presented by us is comparable to similarly titled measures of other REITs.
FFO should not be considered as an alternative to net income or other measurements under GAAP as an indicator of our operating performance or to cash flows from operating, investing or financing activities as a measure of liquidity. FFO does not reflect working capital changes, cash expenditures for capital improvements or principal payments on indebtedness.

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FFO is calculated as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Net income (loss) attributable to common shareholders
$
277,168

 
$
184,145

 
$
109,210

Depreciation and amortization
145,660

 
152,075

 
143,783

Depreciation and amortization of unconsolidated real estate
joint ventures and partnerships
14,793

 
17,550

 
20,955

Impairment of operating properties and real estate equity
investments
895

 
457

 
15,033

Impairment of operating properties of unconsolidated real
estate joint ventures and partnerships
305

 
366

 
19,946

Gain on acquisition including associated real estate equity
investment

 
(20,234
)
 
(1,869
)
Gain on sale of property and interests in real estate equity
investments
(179,376
)
 
(95,675
)
 
(83,683
)
Gain on sale of property of unconsolidated real estate
joint ventures and partnerships
(4,919
)
 
(15,951
)
 
(1,247
)
Other
(8
)
 
(1
)
 

Funds from operations – basic
254,518

 
222,732

 
222,128

Income attributable to operating partnership units
2,171

 
1,780

 
1,721

Funds from operations - diluted
$
256,689

 
$
224,512

 
$
223,849

 
 
 
 
 
 
Weighted average shares outstanding – basic
121,542

 
121,269

 
120,696

Effect of dilutive securities:
 
 
 
 
 
Share options and awards
1,331

 
1,191

 
1,009

Operating partnership units
1,497

 
1,554

 
1,578

Weighted average shares outstanding – diluted
124,370

 
124,014

 
123,283

 
 
 
 
 
 
Funds from operations per share – basic
$
2.09

 
$
1.84

 
$
1.84

 
 
 
 
 
 
Funds from operations per share – diluted
$
2.06

 
$
1.81

 
$
1.82

Same Property Net Operating Income
We consider SPNOI to be a key indicator of our financial performance as it provides a better indication of the recurring cash return on our properties by excluding certain non-cash revenues and expenses, as well as other infrequent or one-time items. We believe a pro rata basis is the most useful measurement as it provides 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.

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Table of Contents

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 
 December 31, 2014
 
Twelve Months Ended 
 December 31, 2014
Beginning of the period
234

 
252

Properties added:
 
 
 
Acquisitions

 
4

New Developments

 
4

Redevelopments

 
2

Properties removed:
 
 
 
Dispositions
(15
)
 
(39
)
Other
(1
)
 
(5
)
End of the period
218

 
218

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 nonrecurring 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 operating income to SPNOI is as follows (in thousands):
 
Three Months Ended 
 December 31,
 
Twelve Months Ended 
 December 31,
 
2014
 
2013
 
2014
 
2013
Operating Income
$
43,969

 
$
38,832

 
$
182,038

 
$
159,868

Less:
 
 
 
 
 
 
 
Revenue adjustments (1)
2,259

 
2,340

 
7,213

 
10,506

Add:
 
 
 
 
 
 
 
Property management fees
662

 
653

 
2,847

 
2,980

Depreciation and amortization
36,408

 
39,724

 
150,356

 
146,763

Impairment loss
1,024

 

 
1,024

 
2,579

General and administrative
7,023

 
6,559

 
24,902

 
25,371

Acquisition costs
185

 
128

 
254

 
498

Other (2)
98

 
190

 
570

 
316

Net Operating Income
87,110

 
83,746

 
354,778

 
327,869

Less: NOI related to consolidated entities not defined
as same property and noncontrolling interests
(10,298
)
 
(10,477
)
 
(51,843
)
 
(38,007
)
Add: Pro rata share of unconsolidated entities defined
as same property
9,068

 
9,615

 
36,188

 
38,169

Same Property Net Operating Income
$
85,880

 
$
82,884

 
$
339,123

 
$
328,031

___________________
(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.

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Table of Contents

Newly Issued Accounting Pronouncements
In February 2013, the 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 are effective for us on January 1, 2017, 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 do not expect the adoption of this update to have any impact to our consolidated financial statements.
In January 2015, the FASB issued ASU No. 2015-01, "Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items." This ASU eliminates the concept of extraordinary items from GAAP. The provisions of ASU No. 2015-01 are effective for us as of January 1, 2016, and early adoption is permitted. We plan to adopt this ASU on January 1, 2015, and we do not expect the adoption of this update to have any impact to our consolidated financial statements.
ITEM 7A. 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 December 31, 2014, we had fixed-rate debt of $1.7 billion and variable-rate debt of $286.2 million, after adjusting for the net effect of $65.3 million notional amount of interest rate contracts. In the event interest rates were to increase 100 basis points and holding all other variables constant, annual net income and cash flows for the following year would decrease by approximately $.2 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 $5.4 million and $91.9 million, respectively.

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Table of Contents

ITEM 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors
Houston, Texas
We have audited the accompanying consolidated balance sheets of Weingarten Realty Investors and subsidiaries (the "Company") as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Weingarten Realty Investors and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
As discussed in Notes 2 and 15 to the consolidated financial statements, the Company has changed its method of accounting for and disclosure of discontinued operations for the year ended December 31, 2014 due to the adoption of Accounting Standards Update 2014-08, "Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity."
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 19, 2015 expressed an unqualified opinion on the Company’s internal control over financial reporting.
/s/ Deloitte & Touche LLP
Houston, Texas
February 19, 2015

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WEINGARTEN REALTY INVESTORS
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
Year Ended December 31,
 
2014
 
2013
 
2012
Revenues:
 
 
 
 
 
Rentals, net
$
503,128

 
$
477,340

 
$
439,993

Other
11,278

 
11,855

 
11,184

Total
514,406

 
489,195

 
451,177

Expenses:
 
 
 
 
 
Depreciation and amortization
150,356

 
146,763

 
127,703

Operating
95,318

 
97,099

 
88,924

Real estate taxes, net
60,768

 
57,515

 
52,066

Impairment loss
1,024

 
2,579

 
9,585

General and administrative
24,902

 
25,371

 
28,538

Total
332,368

 
329,327

 
306,816

Operating Income
182,038

 
159,868

 
144,361

Interest Expense, net
(94,725
)
 
(96,312
)
 
(106,248
)
Interest and Other Income, net
3,756

 
7,685

 
6,047

Gain on Sale and Acquisition of Real Estate Joint Venture and
Partnership Interests
1,718

 
33,670

 
14,203

Equity in Earnings (Losses) of Real Estate Joint Ventures and Partnerships, net
22,317

 
35,112

 
(1,558
)
Benefit (Provision) for Income Taxes
1,261

 
(7,046
)
 
75

Income from Continuing Operations
116,365

 
132,977

 
56,880

Operating Income from Discontinued Operations
342

 
12,214

 
25,918

Gain on Sale of Property from Discontinued Operations
44,582

 
119,203

 
68,619

Income from Discontinued Operations
44,924

 
131,417

 
94,537

Gain on Sale of Property
146,290

 
762

 
1,004

Net Income
307,579

 
265,156


152,421

Less: Net Income Attributable to Noncontrolling Interests
(19,571
)
 
(44,894
)
 
(5,781
)
Net Income Adjusted for Noncontrolling Interests
288,008

 
220,262

 
146,640

Dividends on Preferred Shares
(10,840
)
 
(18,173
)
 
(34,930
)
Redemption Costs of Preferred Shares

 
(17,944
)
 
(2,500
)
Net Income Attributable to Common Shareholders
$
277,168

 
$
184,145

 
$
109,210

Earnings Per Common Share - Basic:
 
 
 
 
 
Income from continuing operations attributable to common shareholders
$
1.91

 
$
0.76

 
$
0.13

Income from discontinued operations
0.37

 
0.76

 
0.77

Net income attributable to common shareholders
$
2.28

 
$
1.52

 
$
0.90

Earnings Per Common Share - Diluted:
 
 
 
 
 
Income from continuing operations attributable to common shareholders
$
1.89

 
$
0.75

 
$
0.13

Income from discontinued operations
0.36

 
0.75

 
0.77

Net income attributable to common shareholders
$
2.25

 
$
1.50

 
$
0.90

See Notes to Consolidated Financial Statements.

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WEINGARTEN REALTY INVESTORS
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 
Year Ended December 31,
 
2014
 
2013
 
2012
Net Income
$
307,579

 
$
265,156

 
$
152,421

Other Comprehensive (Loss) Income:
 
 
 
 
 
Net unrealized gain on investments, net of taxes
354

 
340

 

Realized gain on investments
(38
)
 

 

Realized gain on derivatives

 
5,893

 

Net unrealized gain (loss) on derivatives
131

 
530

 
(123
)
Amortization of loss on derivatives and designated hedges
2,052

 
2,299

 
2,650

Retirement liability adjustment
(10,733
)
 
11,479

 
473

Total
(8,234
)
 
20,541

 
3,000

Comprehensive Income
299,345

 
285,697

 
155,421

Comprehensive Income Attributable to Noncontrolling Interests
(19,571
)
 
(44,894
)
 
(5,781
)
Comprehensive Income Adjusted for Noncontrolling Interests
$
279,774

 
$
240,803

 
$
149,640

See Notes to Consolidated Financial Statements.


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Table of Contents

WEINGARTEN REALTY INVESTORS
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
 
December 31,
 
2014
 
2013
ASSETS
 
 
 
Property
$
4,076,094

 
$
4,289,276

Accumulated Depreciation
(1,028,619
)
 
(1,058,040
)
Property Held for Sale, net
3,670

 
122,614

Property, net *
3,051,145

 
3,353,850

Investment in Real Estate Joint Ventures and Partnerships, net
257,156

 
266,158

Total
3,308,301

 
3,620,008

Notes Receivable from Real Estate Joint Ventures and Partnerships

 
13,330

Unamortized Debt and Lease Costs, net
141,122

 
164,828

Accrued Rent and Accounts Receivable (net of allowance for doubtful
accounts of $7,680 in 2014 and $9,386 in 2013) *
77,781

 
82,351

Cash and Cash Equivalents *
23,189

 
91,576

Restricted Deposits and Mortgage Escrows
79,998

 
4,502

Other, net
183,703

 
247,334

Total Assets
$
3,814,094

 
$
4,223,929

LIABILITIES AND EQUITY
 
 
 
Debt, net *
$
1,938,188

 
$
2,299,844

Accounts Payable and Accrued Expenses
112,479

 
108,535

Other, net
124,484

 
127,572

Total Liabilities
2,175,151

 
2,535,951

Commitments and Contingencies

 

Equity:
 
 
 
Shareholders' Equity:
 
 
 
Preferred Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 10,000
 
 
 
6.5% Series F cumulative redeemable preferred shares of beneficial interest;
140 shares issued; 60 shares outstanding in 2014 and 2013; liquidation
preference $150,000 in 2014 and 2013
2

 
2

Common Shares of Beneficial Interest - par value, $.03 per share;
shares authorized: 275,000; shares issued and outstanding:
122,489 in 2014 and 121,949 in 2013
3,700

 
3,683

Additional Paid-In Capital
1,706,880

 
1,679,229

Net Income Less Than Accumulated Dividends
(212,960
)
 
(300,537
)
Accumulated Other Comprehensive Loss
(12,436
)
 
(4,202
)
Total Shareholders' Equity
1,485,186

 
1,378,175

Noncontrolling Interests
153,757

 
309,803

Total Equity
1,638,943

 
1,687,978

Total Liabilities and Equity
$
3,814,094

 
$
4,223,929

* Consolidated variable interest entities' assets held as collateral and debt included in the above balances (see Note 22):
Property, net
$
47,085

 
$
70,734

Accrued Rent and Accounts Receivable, net
2,576

 
2,855

Cash and Cash Equivalents
12,189

 
6,548

Debt, net
97,362

 
109,923

See Notes to Consolidated Financial Statements.

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WEINGARTEN REALTY INVESTORS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Year Ended December 31,
 
2014
 
2013
 
2012
Cash Flows from Operating Activities:
 
 
 
 
 
Net Income
$
307,579

 
$
265,156

 
$
152,421

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
150,616

 
157,665

 
148,413

Amortization of debt deferred costs and intangibles, net
3,641

 
(7,518
)
 
(1,162
)
Impairment loss
1,024

 
2,815

 
15,436

Equity in (earnings) losses of real estate joint ventures and partnerships, net
(22,317
)
 
(35,112
)
 
1,558

Gain on acquisition

 

 
(1,869
)
Gain on sale and acquisition of real estate joint venture and partnership interests
(1,718
)
 
(33,670
)
 
(14,203
)
Gain on sale of property
(190,872
)
 
(119,965
)
 
(69,623
)
Distributions of income from real estate joint ventures and partnerships, net
4,058

 
3,498

 
3,141

Changes in accrued rent and accounts receivable, net
(3,494
)
 
(4,606
)
 
82

Changes in unamortized debt and lease costs and other assets, net
(16,299
)
 
(19,587
)
 
(19,008
)
Changes in accounts payable, accrued expenses and other liabilities, net
2,890

 
18,420

 
(878
)
Other, net
5,661

 
6,896

 
13,022

Net cash provided by operating activities
240,769

 
233,992

 
227,330

Cash Flows from Investing Activities:
 
 
 
 
 
Acquisition of real estate and land
(43,587
)
 
(105,765
)
 
(198,171
)
Development and capital improvements
(100,926
)
 
(76,992
)
 
(95,743
)
Proceeds from sale of property and real estate equity investments, net
351,224

 
282,705

 
591,091

Change in restricted deposits and mortgage escrows
(75,299
)
 
39,505

 
(30,520
)
Notes receivable from real estate joint ventures and partnerships and other receivables - Advances

 
(289
)
 
(6,614
)
Notes receivable from real estate joint ventures and partnerships and other receivables - Collections
10,336

 
19,411

 
75,081

Real estate joint ventures and partnerships - Investments
(5,223
)
 
(26,241
)
 
(9,792
)
Real estate joint ventures and partnerships - Distributions of capital
31,260

 
59,932

 
44,976

Purchase of investments
(3,000
)
 
(58,836
)
 

Proceeds from investments
51,788

 

 

Other, net
1,504

 
1,224

 

Net cash provided by investing activities
218,077

 
134,654

 
370,308

Cash Flows from Financing Activities:
 
 
 
 
 
Proceeds from issuance of debt
4,500

 
573,542

 
300,098

Principal payments of debt
(508,997
)
 
(449,629
)
 
(538,438
)
Changes in unsecured credit facilities
189,000

 
(66,000
)
 
(100,500
)
Proceeds from issuance of common shares of beneficial interest, net
7,987

 
5,968

 
8,267

Repurchase of preferred shares of beneficial interest

 
(275,000
)
 
(72,500
)
Common and preferred dividends paid
(199,343
)
 
(165,900
)
 
(173,202
)
Debt issuance costs paid
(463
)
 
(6,716
)
 
(4,250
)
Distributions to noncontrolling interests
(21,055
)
 
(20,151
)
 
(12,770
)
Contributions from noncontrolling interests
980

 
106,613

 
2,123

Other, net
158

 
599

 
(504
)
Net cash used in financing activities
(527,233
)
 
(296,674
)
 
(591,676
)
Net (decrease) increase in cash and cash equivalents
(68,387
)
 
71,972

 
5,962

Cash and cash equivalents at January 1
91,576

 
19,604

 
13,642

Cash and cash equivalents at December 31
$
23,189

 
$
91,576

 
$
19,604

Interest paid during the period (net of amount capitalized of $3,302, $2,403 and $3,125, respectively)
$
91,277

 
$
106,918

 
$
117,085

Income taxes paid during the period
$
1,705

 
$
1,860

 
$
1,548

See Notes to Consolidated Financial Statements.

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WEINGARTEN REALTY INVESTORS
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
Year Ended December 31, 2014, 2013 and 2012

 
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, 2012
$
8

 
$
3,641

 
$
1,983,978

 
$
(304,504
)
 
$
(27,743
)
 
$
168,202

 
$
1,823,582

Net income
 
 
 
 
 
 
146,640

 
 
 
5,781

 
152,421

Redemption of preferred shares
(1
)
 
 
 
(69,999
)
 
(2,500
)
 
 
 
 
 
(72,500
)
Shares issued under benefit plans
 
 
22

 
16,568

 
 
 
 
 
 
 
16,590

Dividends paid – common shares
 
 
 
 
 
 
(140,686
)
 
 
 
 
 
(140,686
)
Dividends paid – preferred shares
 
 
 
 
 
 
(32,516
)
 
 
 
 
 
(32,516
)
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
(12,770
)
 
(12,770
)
Contributions from noncontrolling interests
 
 
 
 
 
 
 
 
 
 
2,123

 
2,123

Other comprehensive income
 
 
 
 
 
 
 
 
3,000

 
 
 
3,000

Other, net
 
 
 
 
3,636

 
(2,414
)
 
 
 
(311
)
 
911

Balance, December 31, 2012
7

 
3,663

 
1,934,183

 
(335,980
)
 
(24,743
)
 
163,025

 
1,740,155

Net income
 
 
 
 
 
 
220,262

 
 
 
44,894

 
265,156

Redemption of preferred shares
(5
)
 
 
 
(257,051
)
 
(17,944
)
 
 
 
 
 
(275,000
)
Shares issued under benefit plans
 
 
20

 
13,588

 
 
 
 
 
 
 
13,608

Dividends paid – common shares
 
 
 
 
 
 
(148,702
)
 
 
 
 
 
(148,702
)
Dividends paid – preferred shares
 
 
 
 
 
 
(17,198
)
 
 
 
 
 
(17,198
)
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
(20,151
)
 
(20,151
)
Contributions from noncontrolling interests
 
 
 
 
 
 
 
 
 
 
106,613

 
106,613

Acquisition of noncontrolling interests
 
 
 
 
(16,177
)
 
 
 
 
 
16,177

 

Other comprehensive income
 
 
 
 
 
 
 
 
20,541

 
 
 
20,541

Other, net
 
 
 
 
4,686

 
(975
)
 
 
 
(755
)
 
2,956

Balance, December 31, 2013
2

 
3,683

 
1,679,229

 
(300,537
)
 
(4,202
)
 
309,803

 
1,687,978

Net income
 
 
 
 
 
 
288,008

 
 
 
19,571

 
307,579

Shares issued under benefit plans
 
 
17

 
15,881

 
 
 
 
 
 
 
15,898

Dividends paid – common shares
 
 
 
 
 
 
(189,591
)
 
 
 
 
 
(189,591
)
Dividends paid – preferred shares
 
 
 
 
 
 
(9,752
)
 
 
 
 
 
(9,752
)
Distributions to noncontrolling interests
 
 
 
 
 
 
 
 
 
 
(21,055
)
 
(21,055
)
Contributions from noncontrolling interests
 
 
 
 
 
 
 
 
 
 
980

 
980

Acquisition of noncontrolling interests
 
 
 
 
11,015

 
 
 
 
 
(11,015
)
 

Disposition of noncontrolling interests
 
 
 
 
 
 
 
 
 
 
(144,263
)
 
(144,263
)
Other comprehensive loss
 
 
 
 
 
 
 
 
(8,234
)
 
 
 
(8,234
)
Other, net
 
 
 
 
755

 
(1,088
)
 
 
 
(264
)
 
(597
)
Balance, December 31, 2014
$
2

 
$
3,700

 
$
1,706,880

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

 
$
1,638,943

   
See Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1.      Summary of Significant Accounting Policies
Business
Weingarten Realty Investors is a 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 45.3 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 3.5% of base minimum rental revenues during 2014. Net operating income from continuing operations generated by our properties located in Houston and its surrounding areas was 19.7% of total net operating income from continuing operations for the year ended December 31, 2014, and an additional 9.8% of net operating income from continuing operations was generated in 2014 from properties that are located in other parts of Texas.
Basis of Presentation
Our consolidated financial statements include the accounts of our subsidiaries, certain partially owned real estate joint ventures or partnerships and VIEs which meet the guidelines for consolidation. All intercompany balances and transactions have been eliminated.
Our financial statements are prepared in accordance with GAAP. Such statements require management to make estimates and assumptions that affect the reported amounts on our consolidated financial statements. Actual results could differ from these estimates. We have evaluated subsequent events for recognition or disclosure in our consolidated financial statements.
Revenue Recognition
Rental revenue is generally recognized on a straight-line basis over the term of the lease, which generally begins the date the tenant takes control of the space. Revenue from tenant reimbursements of taxes, maintenance expenses and insurance is subject to our interpretation of lease provisions and is recognized in the period the related expense is recognized. Revenue based on a percentage of tenants’ sales is recognized only after the tenant exceeds their sales breakpoint. In circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease. Other revenue is income from contractual agreements with third parties, tenants or partially owned real estate joint ventures or partnerships, which is recognized as the related services are performed under the respective agreements.
Property
Real estate assets are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method, generally over estimated useful lives of 18-40 years for buildings and 10-20 years for parking lot surfacing and equipment. Major replacements where the betterment extends the useful life of the asset are capitalized and the replaced asset and corresponding accumulated depreciation are removed from the accounts. All other maintenance and repair items are charged to expense as incurred.
Acquisitions of properties are accounted for utilizing the acquisition method and, accordingly, the results of operations of an acquired property are included in our results of operations from the date of acquisition. Estimates of fair values are based upon estimated future cash flows and other valuation techniques in accordance with our fair value measurements accounting policy. Fair values are used to allocate and record the purchase price of acquired property among land, buildings on an “as if vacant” basis, tenant improvements, other identifiable intangibles and any goodwill or gain on purchase. Other identifiable intangible assets and liabilities include the effect of out-of-market leases, the value of having leases in place (“as is” versus “as if vacant” and absorption costs), out-of-market assumed mortgages and tenant relationships. Depreciation and amortization is computed using the straight-line method, generally over estimated useful lives of 40 years for buildings and over the lease term which includes bargain renewal options for other identifiable intangible assets. Acquisition costs are expensed as incurred.

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Property also includes costs incurred in the development and redevelopment of operating properties. These properties are carried at cost, and no depreciation is recorded on these assets until rent commences or no later than one year from the completion of major construction. These costs include preacquisition costs directly identifiable with the specific project, development and construction costs, interest and real estate taxes. Indirect development costs, including salaries and benefits, travel and other related costs that are directly attributable to the development of the property, are also capitalized. The capitalization of such costs ceases at the earlier of one year from the completion of major construction or when the property, or any completed portion, becomes available for occupancy.
Property also includes costs for tenant improvements paid by us, including reimbursements to tenants for improvements that are owned by us and will remain our property after the lease expires.
Property identified for sale is reviewed to determine if it qualifies as held for sale based on the following criteria: management has approved and is committed to the disposal plan, the assets are available for immediate sale, an active plan is in place to locate a buyer, the sale is probable and expected to qualify as a completed sale within a year, the sales price is reasonable in relation to the current fair value, and it is unlikely that significant changes will be made to the sales plan or that the sales plan will be withdrawn. Upon qualification, these properties are segregated and classified as held for sale at the lower of cost or fair value less costs to sell. Prior to April 1, 2014, the disposed property's related operating results were reclassified into discontinued operations. Upon the adoption of new guidance as of April 1, 2014, our individual property disposals no longer qualified for discontinued operations presentation; thus, the results of these disposals remain in income from continuing operations and any associated gains are included in gain on sale of property.
Some of our properties are held in single purpose entities. A single purpose entity is a legal entity typically established at the request of a lender solely for the purpose of owning a property or group of properties subject to a mortgage. There may be restrictions limiting the entity’s ability to engage in an activity other than owning or operating the property, assuming or guaranteeing the debt of any other entity, or dissolving itself or declaring bankruptcy before the debt has been repaid. Most of our single purpose entities are 100% owned by us and are consolidated in our consolidated financial statements.
Real Estate Joint Ventures and Partnerships
To determine the method of accounting for partially owned real estate joint ventures and partnerships, management determines whether an entity is a VIE and, if so, determines which party is the primary beneficiary by analyzing whether we have both the power to direct the entity’s significant economic activities and the obligation to absorb potentially significant losses or receive potentially significant benefits. Significant judgments and assumptions inherent in this analysis include the design of the entity structure, the nature of the entity’s operations, future cash flow projections, the entity’s financing and capital structure, and contractual relationships and terms. We consolidate a VIE when we have determined that we are the primary beneficiary.
Primary risks associated with our involvement with our VIEs include the potential funding of the entities’ debt obligations or making additional contributions to fund the entities’ operations.
Partially owned, non-variable interest real estate joint ventures and partnerships over which we have a controlling financial interest are consolidated in our consolidated financial statements. In determining if we have a controlling financial interest, we consider factors such as ownership interest, authority to make decisions, kick-out rights and substantive participating rights. Partially owned real estate joint ventures and partnerships where we do not have a controlling financial interest, but have the ability to exercise significant influence, are accounted for using the equity method.
Management continually analyzes and assesses reconsideration events, including changes in the factors mentioned above, to determine if the consolidation or equity method treatment remains appropriate.
Notes Receivable from Real Estate Joint Ventures and Partnerships
Notes receivable from real estate joint ventures and partnerships in which we had an ownership interest, primarily represented mortgage construction notes. We considered applying a reserve to a note receivable when it became apparent that conditions existed that may lead to our inability to fully collect on outstanding amounts due. Such conditions included delinquent or late payments on notes, deterioration in the ongoing relationship with the borrower and other relevant factors. When such conditions leading to expected losses existed, we would estimate a reserve by reviewing the borrower’s ability to meet scheduled debt service, our partner’s ability to make contributions and the fair value of the collateral.

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Deferred Charges
Debt costs are amortized primarily on a straight-line basis, which approximates the effective interest method, over the terms of the debt. Lease costs represent the initial direct costs incurred in origination, negotiation and processing of a lease agreement. Such costs include outside broker commissions and other independent third party costs, as well as salaries and benefits, travel and other internal costs directly related to completing a lease and are amortized over the life of the lease on a straight-line basis. Costs related to supervision, administration, unsuccessful origination efforts and other activities not directly related to completed lease agreements are charged to expense as incurred.
Accrued Rent and Accounts Receivable, net
Receivables include base rents, tenant reimbursements and receivables attributable to the straight-lining of rental commitments. An allowance for the uncollectible portion of accrued rents and accounts receivable is determined based upon an analysis of balances outstanding, historical bad debt levels, tenant creditworthiness and current economic trends. Additionally, estimates of the expected recovery of pre-petition and post-petition claims with respect to tenants in bankruptcy are considered in assessing the collectibility of the related receivables. Management’s estimate of the collectibility of accrued rents and accounts receivable is based on the best information available to management at the time of evaluation.
Cash and Cash Equivalents
All highly liquid investments with original maturities of three months or less are considered cash equivalents. Cash and cash equivalents are primarily held at major financial institutions in the U.S. We had cash and cash equivalents in certain financial institutions in excess of federally insured levels. We have diversified our cash and cash equivalents amongst several banking institutions in an attempt to minimize exposure to any one of these entities. We believe we are not exposed to any significant credit risk and regularly monitor the financial stability of these financial institutions.
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 consists of the following (in thousands):
 
December 31,
 
2014
 
2013
Restricted cash (1)
$
77,739

 
$
869

Mortgage escrows
2,259

 
3,633

Total
$
79,998

 
$
4,502

___________________
(1)
The increase between the periods presented is primarily attributable to $77.4 million placed in a qualified escrow account for the purpose of completing like-kind exchange transactions.
Other Assets, net
Other assets include an asset related to the debt service guaranty (see Note 7 for further information), tax increment revenue bonds, investments, investments held in a grantor trust, deferred tax assets, prepaid expenses, interest rate derivatives, the value of above-market leases and the related accumulated amortization and other miscellaneous receivables. Investments held in a grantor trust and investments in mutual funds are adjusted to fair value at each period with changes included in our Consolidated Statements of Operations. The value of our investments in mutual funds approximates the cost basis. Investments held to maturity are carried at amortized cost and are adjusted using the interest method for amortization of premiums and accretion of discounts. Our tax increment revenue bonds have been classified as held to maturity and are recorded at amortized cost offset by a recognized credit loss (see Note 24 for further information). Above-market leases are amortized as adjustments to rental revenues over terms of the acquired leases. Other miscellaneous receivables have a reserve applied to the carrying amount when it becomes apparent that conditions exist that may lead to our inability to fully collect on outstanding amounts due. Such conditions include delinquent or late payments on receivables, deterioration in the ongoing relationship with the borrower and other relevant factors. We would establish a reserve when expected loss conditions exist by reviewing the borrower’s ability to generate revenues to meet debt service requirements and assessing the fair value of any collateral.

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Derivatives and Hedging
We manage interest cost using a combination of fixed-rate and variable-rate debt. To manage our interest rate risk, we occasionally hedge the future cash flows of our existing floating-rate debt or anticipated fixed-rate debt issuances, as well as changes in the fair value of our existing fixed-rate debt instruments, principally through interest rate contracts with major financial institutions. Interest rate contracts that meet specific criteria are accounted for as either a cash flow or fair value hedge.
Cash Flow Hedges of Interest Rate Risk:
Our objective in using interest rate contracts is to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swap and/or cap contracts as part of our interest rate risk management strategy. Interest rate contracts designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount or capping floating rate interest payments.
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. For hedges of fixed-rate debt issuances, the interest rate contracts are cash settled upon the pricing of the debt, with amounts deferred in accumulated other comprehensive loss and amortized as an increase/decrease to interest expense over the originally hedged period.
The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.
Fair Value Hedges of Interest Rate Risk:
We are exposed to changes in the fair value of certain of our fixed-rate obligations due to changes in benchmark interest rates, such as LIBOR. We use interest rate contracts to manage our exposure to changes in fair value on these instruments attributable to changes in the benchmark interest rate. Interest rate contracts designated as fair value hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for us making variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Changes in the fair value of interest rate contracts designated as fair value hedges, as well as changes in the fair value of the related debt being hedged, are recorded in earnings each reporting period.
Sales of Real Estate
Sales of real estate include the sale of tracts of land within a shopping center development, property adjacent to shopping centers, operating properties, newly developed properties, investments in real estate joint ventures and partnerships and partial sales to real estate joint ventures and partnerships in which we participate.
Profits on sales of real estate are not recognized until (a) a sale is consummated; (b) the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay; (c) the seller’s receivable is not subject to future subordination; and (d) we have transferred to the buyer the usual risks and rewards of ownership in the transaction, and we do not have a substantial continuing involvement with the property.
We recognize gains on the sale of real estate to joint ventures and partnerships in which we participate to the extent we receive cash from the joint venture or partnership, if it meets the sales criteria in accordance with GAAP, and we do not have a commitment to support the operations of the real estate joint venture or partnership to an extent greater than our proportionate interest in the real estate joint venture or partnership.
Impairment
Our property is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any capitalized costs and any identifiable intangible assets, may not be recoverable.
If such an event occurs, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future, with consideration of applicable holding periods, on an undiscounted basis to the carrying amount of such property. If we determine the carrying amount is not recoverable, our basis in the property is reduced to its estimated fair value to reflect impairment in the value of the asset. Fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker or appraisal estimates in accordance with our fair value measurements accounting policy.

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We review economic considerations at each reporting period, including the effects of tenant bankruptcies, the suspension of tenant expansion plans for new development projects, declines in real estate values, and any changes to plans related to our new development properties including land held for development, to identify properties where we believe market values may be deteriorating. Determining whether a property is impaired and, if impaired, the amount of write-down to fair value requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. If market conditions deteriorate or management’s plans for certain properties change, additional write-downs could be required in the future.
Our investment in partially owned real estate joint ventures and partnerships is reviewed for impairment each reporting period. The ultimate realization is dependent on a number of factors, including the performance of each investment and market conditions. We will record an impairment charge if we determine that a decline in the estimated fair value of an investment below its carrying amount is other than temporary. There is no certainty that impairments will not occur in the future if market conditions decline or if management’s plans for these investments change.
Our investments in tax increment revenue bonds are reviewed for impairment, including the evaluation of changes in events or circumstances that may indicate that the carrying amount of the investment may not be recoverable. Realization is dependent on a number of factors, including investment performance, market conditions and payment structure. We will record an impairment charge if we determine that a decline in the value of the investment below its carrying amount is other than temporary, recovery of its cost basis is uncertain, and/or it is uncertain if the investment will be held to maturity.
Interest Capitalization
Interest is capitalized on land under development and buildings under construction based on rates applicable to borrowings outstanding during the period and the weighted average balance of qualified assets under development/construction during the period.
Interest Expense in Discontinued Operations
Interest expense that is specifically identifiable to property, both held for sale and sold and qualifies as discontinued operations, is included in operating income from discontinued operations in our consolidated financial statements. We do not allocate other consolidated interest to operating income from discontinued operations because the interest savings to be realized from the proceeds of the sale of these operations is not material.
Income Taxes
We have elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended. As a REIT, we generally will not be subject to corporate level federal income tax on taxable income we distribute to our shareholders. To be taxed as a REIT, we must meet a number of requirements including defined percentage tests concerning the amount of our assets and revenues that come from, or are attributable to, real estate operations. As long as we distribute at least 90% of the taxable income of the REIT (without regard to capital gains or the dividends paid deduction) to our shareholders as dividends, we will not be taxed on the portion of our income we distribute as dividends unless we have ineligible transactions.
The Tax Relief Extension Act of 1999 gave REITs the ability to conduct activities which a REIT was previously precluded from doing as long as such activities are performed in entities which have elected to be treated as taxable REIT subsidiaries under the IRS code. These activities include buying or developing properties with the express purpose of selling them. We conduct certain of these activities in a taxable REIT subsidiary that we have created. We calculate and record income taxes in our consolidated financial statements based on the activities in this entity. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between our carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and tax credit carry-forwards. These are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance for deferred tax assets is established for those assets we do not consider the realization of such assets to be more likely than not.
Additionally, GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the consolidated financial statements if it is more likely than not that the tax position will be sustained upon examination. We believe it is more likely than not that our tax positions will be sustained in any tax examinations.
In addition, we are subject to the State of Texas business tax (“Texas Franchise Tax”), which is determined by applying a tax rate to a base that considers both revenues and expenses. Therefore, the Texas Franchise Tax is considered an income tax and is accounted for accordingly.

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Share-Based Compensation
We have share option and restricted share award plans. In November 2011, we announced changes to the long-term incentive program under our Amended and Restated 2010 Long-Term Incentive Plan ("2011 Program Changes"). Future grants of awards will incorporate both service-based and market-based measures for restricted share awards to promote share ownership among the participants and to emphasize the importance of total shareholder return. The terms of each grant vary depending upon the participant's responsibilities and position within the Company. All awards are recorded at fair value on the date of grant and earn dividends throughout the vesting period. Compensation expense is measured at the grant date and recognized over the vesting period. All share awards are awarded subject to the participant’s continued employment with us.
The share awards are subject to a three-year cliff vesting basis. Service-based and market-based share awards are subject to the achievement of select performance goals as follows:
Service-based awards and accumulated dividends typically vest three years from the grant date. These grants are subject only to continued employment and not dependent on future performance measures. Accordingly, if such vesting criteria are not met, compensation cost previously recognized would be reversed.
Market-based awards vest based upon the performance metrics at the end of a three-year period. These awards are based 50% on our three-year relative total shareholder return (“TSR”) as compared to the FTSE NAREIT U.S. Shopping Center Index. The other 50% is tied to our three-year absolute TSR. At the end of a three-year period, the performance measures are analyzed; the actual number of shares earned is determined and the earned shares and the accumulated dividends vest. The probability of meeting the market criteria is considered when calculating the estimated fair value on the date of grant using a Monte Carlo simulation. These awards are accounted for as awards with market criteria, with compensation cost recognized over the service period, regardless of whether the market criteria are achieved and the awards are ultimately earned and vest.
Share options granted to non-officers prior to the 2011 Program Changes vest ratably over a three-year period beginning after the grant date, and share options and restricted shares for officers vest ratably over a five-year period after the grant date. Restricted shares granted to trust managers and share options or awards granted to retirement eligible employees are expensed immediately. Restricted shares have the same rights of a common shareholder, including the right to vote and receive dividends, except as otherwise provided by our Management Development and Executive Compensation Committee.
The grant price for our options is calculated as an average of the high and low of the quoted fair value of our common shares on the date of grant. Issued options generally expire upon the earlier of termination of employment or 10 years from the date of grant, and restricted shares for officers and trust managers are granted at no purchase price. Our policy is to recognize compensation expense for equity awards ratably over the vesting period, except for retirement eligible amounts.
The fair value of share options was estimated on the date of grant using the Black-Scholes option pricing method based on certain expected weighted average assumptions; including the dividend yield, the expected volatility, the expected life and the risk free interest rate. The dividend yield was an average of the historical yields at each record date over the estimated expected life. We estimated volatility using our historical volatility data for a period of 10 years, and the expected life was based on historical data from an option valuation model of employee exercises and terminations. The risk-free rate was based on the U.S. Treasury yield curve.
Retirement Benefit Plans
Defined Benefit Plans:
We sponsor a noncontributory cash balance retirement plan (“Retirement Plan”) under which an account is maintained for each participant. Annual additions to each participant’s account include a service credit ranging from 3%-5% of compensation, depending on years of service, and an interest credit of 4.5%. Vesting generally occurs after three years of service.

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Investments of Plan Assets
Our investment policy for our plan assets has been to determine the objectives for structuring a retirement savings program suitable to the long-term needs and risk tolerances of participants, to select appropriate investments to be offered by the plan and to establish procedures for monitoring and evaluating the performance of the investments of the plan. Our overall plan objectives for selecting and monitoring investment options are to promote and optimize retirement wealth accumulation; to provide a full range of asset classes and investment options that are intended to help diversify the portfolio to maximize return within reasonable and prudent levels of risk; to control costs of administering the plan; and to manage the investments held by the plan.
The selection of investment options is determined using criteria based on the following characteristics: fund history, relative performance, investment style, portfolio structure, manager tenure, minimum assets, expenses and operation considerations. Investment options selected for use in the plan are reviewed at least on a semi-annual basis to evaluate material changes from the selection criteria. Asset allocation is used to determine how the investment portfolio should be split between stocks, bonds and cash. The asset allocation decision is influenced by investment time horizon; risk tolerance; and investment return objectives. The primary factor in establishing asset allocation is demographics of the plan, including attained age and future service. A broad market diversification model is used in considering all these factors and the percentage allocation to each investment category may also vary depending upon market conditions. Re-balancing of the allocation of plan assets occurs semi-annually.
Defined Contribution Plans:
Effective January 1, 2012, we amended our two separate and independent nonqualified supplemental retirement plans (“SRP”) for certain employees to be defined contribution plans. These unfunded plans provide benefits in excess of the statutory limits of our noncontributory cash balance retirement plan. For active participants as of January 1, 2012, annual additions to each participant’s account include an actuarially-determined service credit ranging from 3% to 5% and an interest credit of 4.5%. Vesting generally occurs between five and 10 years of service. We have elected to use the actuarial present value of the vested benefits to which the participant was entitled if the participant separated immediately from the SRP, as permitted by GAAP.
The SRP participants' account balances, prior to January 1, 2012, were converted to a cash balance retirement plan which no longer receives service credits but continues to receive a 7.5% interest credit for active participants and a December 31 90-day LIBOR rate plus .50% for inactive participants.
We have a Savings and Investment Plan pursuant to which eligible employees may elect to contribute from 1% of their salaries to the maximum amount established annually by the IRS. Employee contributions are matched by us at the rate of 50% for the first 6% of the employee's salary. The employees vest in the employer contributions ratably over a five-year period.
Deferred Compensation Plan
We have a deferred compensation plan for eligible employees allowing them to defer portions of their current cash salary or share-based compensation. Deferred amounts are deposited in a grantor trust, which are included in net other assets, and are reported as compensation expense in the year service is rendered. Cash deferrals are invested based on the employee’s investment selections from a mix of assets selected using a broad market diversification model. Deferred share-based compensation cannot be diversified, and distributions from this plan are made in the same form as the original deferral.
Fair Value Measurements
Certain financial instruments, estimates and transactions are required to be calculated, reported and/or recorded at fair value. The estimated fair values of such financial items, including debt instruments, impaired assets, acquisitions, investment securities and derivatives, have been determined using a market-based measurement. This measurement is determined based on the assumptions that management believes market participants would use in pricing an asset or liability; including, market capitalization rates, discount rates, current operating income, local economics and other factors. As a basis for considering market participant assumptions in fair value measurements, GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

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Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The fair value of such financial instruments, estimates and transactions was determined using available market information and appropriate valuation methodologies as prescribed by GAAP.
Internally developed and third party fair value measurements, including the unobservable inputs, are evaluated by management with sufficient experience for reasonableness based on current market knowledge, trends and transactional experience in the real estate and capital markets. Our valuation policies and procedures are determined by our Accounting Group, which reports to the Chief Financial Officer and the results of significant impairment transactions are discussed with the Audit Committee on a quarterly basis.
Fair value estimates are based on limited available market information for similar transactions, including our notes receivable from real estate joint ventures and partnerships, tax increment revenue bonds and debt, and there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument. The following provides information about the methods used to estimate the fair value of the our financial instruments, including their estimated fair values:
Investments and Deferred Compensation Plan Obligations
Investments in mutual funds held in a grantor trust and mutual funds are valued based on publicly-quoted market prices for identical assets. The time deposit is a short-term investment tradeable in the secondary market and reflects current rates for a deposit with similar maturity and credit quality. The deferred compensation plan obligations corresponds to the value of our investments held in a grantor trust. Investments held to maturity are carried at amortized cost and are adjusted using the interest method for amortization of premiums and accretion of discounts.
Derivative Instruments
We use interest rate contracts with major financial institutions to manage our interest rate risk. The valuation of these instruments is determined based on assumptions that management believes market participants would use in pricing, using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of our interest rate contracts have been determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.
We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counter-party’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral, thresholds and guarantees. An accounting policy election was made to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counter-parties. However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

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Notes Receivable from Real Estate Joint Ventures and Partnerships
We estimate the fair value of our notes receivable from real estate joint ventures and partnerships using quoted market prices for publicly-traded notes and discounting estimated future cash receipts. The discount rates used approximate current lending rates for a note or groups of notes with similar maturities and credit quality, assumes the note is outstanding through maturity and considers the note’s collateral (if applicable). We utilize market information as available or present value techniques to estimate the amounts required to be disclosed.
Tax Increment Revenue Bonds
The fair value estimates of our held to maturity tax increment revenue bonds, which were issued by the Agency in connection with our investment in a development project in Sheridan, Colorado, are based on assumptions that management believes market participants would use in pricing, using widely accepted valuation techniques including discounted cash flow analysis based on the expected future sales tax revenues of the development project. This analysis reflects the contractual terms of the bonds, including the period to maturity, and uses observable market-based inputs, such as market discount rates and unobservable market-based inputs, such as future growth and inflation rates.
Debt
The fair value of our debt may be based on quoted market prices for publicly-traded debt, on a third-party established benchmark for inactively traded debt and on the discounted estimated future cash payments to be made for non-traded debt. For inactively traded debt, our third-party provider establishes a benchmark for all REIT securities based on the largest, most liquid and most frequent investment grade securities in the REIT bond market. This benchmark is then adjusted to consider how a market participant would be compensated for risk premiums such as, longevity of maturity dates, lack of liquidity and credit quality of the issuer. The discount rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assumes the debt is outstanding through maturity and considers the debt’s collateral (if applicable). We have utilized market information as available or present value techniques to estimate the amounts required to be disclosed.
Reportable Segments
Our primary focus is to lease space to tenants in shopping centers that we own, lease or manage. Historically, we reviewed operating and financial information for each property by commercial use and on an individual basis. Each commercial use or each property represents an individual operating segment.
We evaluate the performance of the reportable segments based on net operating income, defined as total revenues less operating expenses and real estate taxes. Management does not consider the effect of gains or losses from the sale of property or interests in real estate joint ventures and partnerships in evaluating segment operating performance.
With the sale of our industrial portfolio in May 2012, we no longer analyze our properties by commercial use. Further, no individual property constitutes more than 10% of our revenues, net operating income or assets, and we have no operations outside of the United States of America. Therefore, our properties have been aggregated into one reportable segment since such properties and the tenants thereof each share similar economic and operating characteristics.

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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, 2013
$
(340
)
 
$
(1,233
)
 
$
5,775

 
$
4,202

Change excluding amounts reclassified
from accumulated other comprehensive loss
(354
)
 
(131
)
 
11,118

 
10,633

Amounts reclassified from accumulated
other comprehensive loss
38

(1) 
(2,052
)
(2) 
(385
)
(3) 
(2,399
)
Net other comprehensive (income) loss
(316
)
 
(2,183
)
 
10,733

 
8,234

Balance, December 31, 2014
$
(656
)
 
$
(3,416
)
 
$
16,508

 
$
12,436

 
 
 
 
 
 
 
 
 
Gain
on
Investments
 
(Gain) Loss
on
Cash Flow
Hedges
 
Defined
Benefit
Pension
Plan
 
Total
Balance, December 31, 2012
$

 
$
7,489

 
$
17,254

 
$
24,743

Change excluding amounts reclassified
from accumulated other comprehensive loss
(340
)
 
(6,423
)
 
(10,200
)
 
(16,963
)
Amounts reclassified from accumulated
other comprehensive loss

 
(2,299
)
(2) 
(1,279
)
(3) 
(3,578
)
Net other comprehensive income
(340
)
 
(8,722
)
 
(11,479
)
 
(20,541
)
Balance, December 31, 2013
$
(340
)
 
$
(1,233
)
 
$
5,775

 
$
4,202

___________________
(1)
This reclassification component is included in interest and other income.
(2)
This reclassification component is included in interest expense (see Note 8 for additional information).
(3)
This reclassification component is included in the computation of net periodic benefit cost (see Note 19 for additional information).
Reclassifications
The reclassification of prior years’ operating results for certain properties classified as discontinued operations was made to conform to the current year presentation (see Note 15 and 17 for additional information). These items had no impact on previously reported net income, the consolidated balance sheet or cash flows.
Note 2.      Newly Issued Accounting Pronouncements
In February 2013, the FASB issued ASU No. 2013-04, "Obligations Resulting From Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date." This ASU requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date, as the sum of (1) the amount the reporting entity has agreed to pay in accordance to the arrangement and (2) any additional amounts the reporting entity expects to pay on behalf of its co-obligors. Additional disclosures on the nature and amounts of the obligation will also be required. The provisions of ASU No. 2013-04 were effective for us on January 1, 2014, and were required to be applied retrospectively. The ASU did not materially impact our consolidated financial statements.
In July 2013, the FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This ASU amends current GAAP to require entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for net operating loss or other tax credit carryforwards when settlement is available under the tax law. The provisions of ASU No. 2013-11 were effective for us on January 1, 2014, and were required to be applied to all unrecognized tax benefits in existence. The adoption of this ASU did not materially impact our consolidated financial statements.

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In April 2014, the FASB issued ASU No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." This ASU amends the criteria for reporting discontinued operations while enhancing disclosures in this area. The provisions of ASU No. 2014-08 are effective for us prospectively on January 1, 2015; however, early adoption is permitted. We adopted this update effective April 1, 2014. The adoption resulted in individual property disposals no longer qualifying for discontinued operations presentation; thus, the results of these disposals will remain in income from continuing operations, and any associated gains are included in gain on sale of property. Properties sold or classified as held for sale prior to April 1, 2014, are not subject to ASU No. 2014-08 and therefore, continue to be classified as discontinued operations using the previous definition.
In May 2014, the FASB issued 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 are effective for us on January 1, 2017, 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 do not expect the adoption of this update to have any impact to our consolidated financial statements.
In January 2015, the FASB issued ASU No. 2015-01, "Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items." This ASU eliminates the concept of extraordinary items from GAAP. The provisions of ASU No. 2015-01 are effective for us as of January 1, 2016, and early adoption is permitted. We plan to adopt this ASU on January 1, 2015, and we do not expect the adoption of this update to have any impact to our consolidated financial statements.
Note 3.      Property
Our property consisted of the following (in thousands):
 
December 31,
 
2014
 
2013
Land
$
821,614

 
$
854,409

Land held for development
103,349

 
116,935

Land under development
24,297

 
4,262

Buildings and improvements
3,061,616

 
3,238,817

Construction in-progress
65,218

 
74,853

Total
$
4,076,094

 
$
4,289,276

During the year ended December 31, 2014, we sold 26 centers and other property. Aggregate gross sales proceeds from these transactions approximated $362.4 million and generated gains of approximately $167.6 million. Included in these transactions is the exercise of a purchase option by a holder of our ground leases in Texas that resulted in the disposition of three properties. Also, during the year ended December 31, 2014, we acquired one center with a gross purchase price of approximately $43.8 million and invested $47.4 million in new development projects.
At December 31, 2014, we classified one property as held for sale totaling $9.4 million before accumulated depreciation that did not qualify to be reported as discontinued operations. Subsequent to December 31, 2014, the property classified as held for sale was sold. We classified eight properties as held for sale as of December 31, 2013, totaling $155.0 million before accumulated depreciation (see Note 15 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):
 
December 31,
 
2014
 
2013
Combined Condensed Balance Sheets
 
 
 
 
 
 
 
ASSETS
 
 
 
Property
$
1,331,445

 
$
1,401,982

Accumulated depreciation
(279,067
)
 
(261,454
)
Property, net
1,052,378

 
1,140,528

Other assets, net
126,890

 
142,638

Total Assets
$
1,179,268

 
$
1,283,166

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Debt, net (primarily mortgages payable)
$
380,816

 
$
453,390

Amounts payable to Weingarten Realty Investors and Affiliates
13,749

 
30,214

Other liabilities, net
26,226

 
29,711

Total Liabilities
420,791

 
513,315

Equity
758,477

 
769,851

Total Liabilities and Equity
$
1,179,268

 
$
1,283,166

 
Year Ended December 31,
 
2014
 
2013
 
2012
Combined Condensed Statements of Operations
 
 
 
 
 
Revenues, net
$
153,301

 
$
165,365

 
$
195,109

Expenses:
 
 
 
 
 
Depreciation and amortization
40,235

 
45,701

 
59,330

Interest, net
22,657

 
28,787

 
35,491

Operating
27,365

 
28,929

 
34,989

Real estate taxes, net
18,159

 
18,929

 
23,899

General and administrative
916

 
934

 
1,106

Provision for income taxes
417

 
278

 
316

Impairment loss
1,526

 
1,887

 
96,781

Total
111,275

 
125,445

 
251,912

Operating income (loss)
$
42,026

 
$
39,920

 
$
(56,803
)
Our investment in real estate joint ventures and partnerships, as reported in our 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 $5.2 million and $6.1 million at December 31, 2014 and 2013, respectively, are generally amortized over the useful lives of the related assets.

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Our real estate joint ventures and partnerships have determined from time to time that the carrying amount of certain properties was not recoverable and that the properties should be written down to fair value. For the year ended December 31, 2014, 2013 and 2012, our unconsolidated real estate joint ventures and partnerships recorded an impairment charge of $1.5 million, $1.9 million and $96.8 million, respectively, associated primarily with various properties that are being either marketed for sale, have been sold or with shorter holding periods of finite life joint ventures where the joint ventures’ ability to recover the carrying cost of the property may be limited by the term of the venture life.
Fees earned by us for the management of these real estate joint ventures and partnerships totaled $4.6 million in 2014, $5.0 million in 2013 and $6.1 million in 2012.
During 2014, we had a partial disposition of a 50% interest at an unconsolidated real estate joint venture for approximately $5.1 million, resulting in a gain on our investment of $1.7 million. Also, we sold four centers and other property held in unconsolidated real estate joint ventures, for approximately $19.9 million, of which our share of the gain totaled $4.9 million.
During 2013, the final two industrial properties in an unconsolidated real estate joint venture were sold. This joint venture was liquidated resulting in an $11.5 million gain on our investment. Also, three shopping centers were sold, and our gross sales proceeds from the disposition of these five properties totaled $35.5 million, of which our share of the gain totaled $16.0 million. Furthermore, we sold our 10% interest in two unconsolidated tenancy-in-common arrangements and two unconsolidated real estate joint ventures that we previously accounted for under the equity method, for approximately $15.7 million, resulting in a gain of $1.9 million.
During 2013, a 51% owned unconsolidated real estate joint venture acquired real estate assets of approximately $41.2 million. We also acquired our partner’s 50% unconsolidated real estate joint venture interest in a California property that we had previously accounted for under the equity method. This transaction resulted in the consolidation of the property in our consolidated financial statements (see Note 23 for additional information).
Note 5.      Notes Receivable from Real Estate Joint Ventures and Partnerships
We have ownership interests in a number of real estate joint ventures and partnerships. At December 31, 2014, we had no outstanding notes receivable from real estate joint ventures and partnerships. At December 31, 2013, various notes receivable from these entities bore interest ranging from approximately 2.9% to 5.7% per year and matured at various dates through 2017. Generally, these notes receivable were secured by underlying real estate assets.
The outstanding notes were fully paid during 2014, and no write-offs occurred. Interest income recognized on these notes was $.1 million, $2.2 million and $3.0 million for the year ended December 31, 2014, 2013 and 2012, respectively.
In December 2013, we acquired our partner’s 50% unconsolidated joint venture interest in a California property, which includes the settlement of $54.8 million of our notes receivable from real estate joint ventures and partnerships.

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Note 6.      Identified Intangible Assets and Liabilities
Identified intangible assets and liabilities associated with our property acquisitions are as follows (in thousands):
 
December 31,
 
2014
 
2013
Identified Intangible Assets:
 
 
 
Above-market leases (included in Other Assets, net)
$
38,121

 
$
38,577

Above-market leases - Accumulated Amortization
(11,331
)
 
(8,767
)
Below-market assumed mortgages (included in Debt, net)
4,713

 
4,713

Below-market assumed mortgages - Accumulated Amortization
(2,352
)
 
(1,900
)
Valuation of in place leases (included in Unamortized Debt and Lease Costs, net)
132,554

 
140,457

Valuation of in place leases - Accumulated Amortization
(56,571
)
 
(48,961
)
 
$
105,134

 
$
124,119

Identified Intangible Liabilities:
 
 
 
Below-market leases (included in Other Liabilities, net)
$
42,830

 
$
44,086

Below-market leases - Accumulated Amortization
(19,612
)
 
(19,185
)
Above-market assumed mortgages (included in Debt, net)
34,113

 
40,465

Above-market assumed mortgages - Accumulated Amortization
(27,411
)
 
(31,114
)
 
$
29,920

 
$
34,252

These identified intangible assets and liabilities are amortized over the applicable lease terms or the remaining lives of the assumed mortgages, as applicable.
The net amortization of above-market and below-market leases (decreased) increased rental revenues by $(1.7) million, $.6 million and $.8 million in 2014, 2013 and 2012, respectively. The significant year over year change in rental revenues from 2014 to 2013 is primarily due to the acquisition of a partner’s 50% interest in an unconsolidated joint venture in December 2013 (see Note 23 for additional information). The estimated net amortization of these intangible assets and liabilities will decrease rental revenues for each of the next five years as follows (in thousands):
2015
$
1,681

2016
1,574

2017
1,473

2018
1,309

2019
815

The amortization of the in place lease intangible assets recorded in depreciation and amortization, was $12.0 million, $11.6 million and $7.8 million in 2014, 2013 and 2012, respectively. The estimated amortization of this intangible asset will increase depreciation and amortization for each of the next five years as follows (in thousands):
2015
$
10,756

2016
8,161

2017
7,635

2018
7,287

2019
6,208


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The net amortization of above-market and below-market assumed mortgages decreased net interest expense by $1.0 million, $10.4 million and $2.7 million in 2014, 2013 and 2012, respectively. The significant year over year change in expense from 2013 to 2014 is primarily due to a $9.7 million write-off in 2013 of an above-market assumed mortgage intangible due to the early payoff of the related mortgage. The estimated net amortization of these intangible assets and liabilities will decrease net interest expense for each of the next five years as follows (in thousands):
2015
$
783

2016
750

2017
871

2018
978

2019
978

Note 7.      Debt
Our debt consists of the following (in thousands):
 
December 31,
 
2014
 
2013
Debt payable to 2038 at 3.4% to 8.6% in 2014 and 2.6% to 8.6% in 2013, net
$
1,656,083

 
$
2,205,104

Unsecured notes payable under credit facilities
189,000

 

Debt service guaranty liability
72,105

 
73,740

Obligations under capital leases
21,000

 
21,000

Total
$
1,938,188

 
$
2,299,844

The grouping of total debt between fixed and variable-rate as well as between secured and unsecured is summarized below (in thousands):
 
December 31,
 
2014
 
2013
As to interest rate (including the effects of interest rate contracts):
 
 
 
Fixed-rate debt
$
1,651,959

 
$
2,136,265

Variable-rate debt
286,229

 
163,579

Total
$
1,938,188

 
$
2,299,844

As to collateralization:
 
 
 
Unsecured debt
$
1,343,217

 
$
1,572,057

Secured debt
594,971

 
727,787

Total
$
1,938,188

 
$
2,299,844

We maintain a $500 million unsecured revolving credit facility, which was last amended and extended on April 18, 2013. This facility expires in April 2017, 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 December 31, 2014, the borrowing margin and facility fee, which are priced off a grid that is tied to our senior unsecured credit ratings, are 115 and 20 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 $700 million.
Effective May 2010, we entered into an agreement with a bank for an unsecured and uncommitted overnight facility totaling $99 million that we maintained for cash management purposes. The facility provided for fixed interest rate loans at a 30 day LIBOR rate plus a borrowing margin based on market liquidity until expiration. As of January 2, 2015, this facility was canceled and has not been replaced.

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The following table discloses certain information regarding our unsecured notes payable under our credit facilities (in thousands, except percentages):
 
December 31,
 
2014
 
2013
Unsecured revolving credit facility:
 
 
 
Balance outstanding
$
189,000

 
$

Available balance
306,777

 
497,821

Letter of credit outstanding under facility
4,223

 
2,179

Variable interest rate (excluding facility fee)
0.8
%
 
%
Unsecured and uncommitted overnight facility:
 
 
 
Balance outstanding
$

 
$

Variable interest rate
%
 
%
Both facilities:
 
 
 
Maximum balance outstanding during the year
$
270,000

 
$
265,500

Weighted average balance
151,036

 
61,642

Year-to-date weighted average interest rate (excluding facility fee)
0.8
%
 
1.0
%
Related to a development project in Sheridan, Colorado, we have provided a guaranty for the payment of any debt service shortfalls until a coverage rate of 1.4 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 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 December 31, 2014 and 2013, we had $72.1 million and $73.7 million, respectively, outstanding for the debt service guaranty liability.
During 2014, $315 million of fixed-rate medium term notes matured and were repaid at a weighted average interest rate of 5.2%, and $100 million of our 8.1% senior unsecured notes due 2019 were redeemed by us at our option. The majority of the 8.1% senior unsecured notes was redeemed at a purchase price of 100% of the principal amount, plus accrued and unpaid interest through the redemption date. In conjunction with the redemption in 2014, we wrote off $1.2 million of debt costs. During 2013, $173.6 million of fixed-rate medium term notes matured and were repaid at a weighted average interest rate of 5.4%, and a $100 million 6% secured fixed-rate note payable was repaid prior to maturity.
In October 2013, we issued $250 million of 4.45% senior unsecured notes maturing in 2024. The notes were issued at 99.58% of the principal amount with a yield to maturity of 4.50%. The net proceeds received of $247.3 million were used to reduce all amounts outstanding under our $500 million unsecured revolving credit facility, and net excess proceeds were invested in short-term instruments and were used to pay down future debt maturities or for general business purposes.
In March 2013, we issued $300 million of 3.5% senior unsecured notes maturing in 2023. The notes were issued at 99.53% of the principal amount with a yield to maturity of 3.56%. The net proceeds received of $296.6 million were used to reduce amounts outstanding under our $500 million unsecured revolving credit facility, which included borrowings used to redeem $75 million of our 6.75% Series D Cumulative Redeemable Preferred Shares.
Various leases and properties, and current and future rentals from those leases and properties, collateralize certain debt. At December 31, 2014 and 2013, the carrying value of such property aggregated $1.0 billion and $1.2 billion, respectively.

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Scheduled principal payments on our debt (excluding $189.0 million unsecured notes payable under our credit facilities, $21.0 million of certain capital leases, $3.9 million fair value of interest rate contracts, $(3.1) million net premium/(discount) on debt, $4.3 million of non-cash debt-related items, and $72.1 million debt service guaranty liability) are due during the following years (in thousands):
2015
$
225,946

2016
233,152

2017
139,660

2018
59,945

2019
53,556

2020
34,990

2021
1,883

2022
304,397

2023
301,494

2024
251,588

Thereafter
44,309

Total
$
1,650,920

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 December 31, 2014.
Note 8.      Derivatives and Hedging
The fair value of all our interest rate contracts was reported as follows (in thousands):
 
Assets
 
Liabilities
 
Balance Sheet
Location
 
Amount
 
Balance Sheet
Location
 
Amount
Designated Hedges:
 
 
 
 
 
 
 
December 31, 2014
Other Assets, net
 
$
3,891

 
Other Liabilities, net
 
$
109

December 31, 2013
Other Assets, net
 
5,282

 
Other Liabilities, net
 
476

The gross presentation, the effects of offsetting for derivatives with a right to offset under master netting agreements and the net presentation of our interest rate 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
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Assets
$
3,891

 
$

 
$
3,891

 
$

 
$

 
$
3,891

Liabilities
109

 

 
109

 

 

 
109

 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
Assets
5,282

 

 
5,282

 

 

 
5,282

Liabilities
476

 

 
476

 

 

 
476


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Cash Flow Hedges:
As of December 31, 2014, we had one interest rate contract, maturing in December 2015, with an aggregate notional amount of $5.2 million that was designated as a cash flow hedge and fixed the interest rate at 2.4%. As of December 31, 2013, we had three interest rate contracts, maturing through September 2017, with an aggregate notional amount of $25.8 million that were designated as cash flow hedges and either fixed or capped interest rates ranging from 2.3% to 5.0%. We have determined that these contracts are highly effective in offsetting future variable interest cash flows.
During 2013, we settled three forward-starting contracts with an aggregate notional amount of $150.0 million hedging future fixed-rate debt issuances. These contracts fixed the 10-year swap rates at 2.4%. In connection with the October 2013 issuance of unsecured senior notes, we received $6.1 million associated with the settlement of these contracts resulting in a $5.9 million gain in accumulated other comprehensive loss.
As of December 31, 2014 and 2013, the net gain balance in accumulated other comprehensive loss relating to cash flow interest rate contracts was $3.4 million and $1.2 million, respectively, and will be reclassified to net interest expense as interest payments are made on our fixed-rate debt. Within the next 12 months, a loss of approximately $.8 million in accumulated other comprehensive loss is expected to be amortized to net interest expense related to settled interest rate contracts.
Summary of cash flow interest rate 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)
Year Ended December 31, 2014
 
$
(131
)
 
Interest expense,
net
 
$
(1,682
)
 
Interest expense,
net
 
$
(370
)
Year Ended December 31, 2013
 
$
(6,423
)
 
Interest expense,
net
 
$
(2,537
)
 
Interest expense,
net
 
$
238

Year Ended December 31, 2012
 
$
123

 
Interest expense,
net
 
$
(2,650
)
 
Interest expense,
net
 
$

Fair Value Hedges:
As of December 31, 2014, we had two interest rate contracts, maturing through October 2017, with an aggregate notional amount of $65.3 million that were designated as fair value hedges and convert fixed interest payments at rates of 7.5% to variable interest payments ranging from 4.2% to 4.3%. As of December 31, 2013, we had four interest rate contracts, maturing through October 2017, with an aggregate notional amount of $116.7 million that were designated as fair value hedges and convert fixed interest payments at rates from 4.2% to 7.5% to variable interest payments ranging from .2% to 4.3%. We have determined that our fair value hedges are 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 the impact on net income for our interest rate contracts is as follows (in thousands):
 
Gain (Loss) 
on
Contracts
 
Gain (Loss) 
on
Borrowings
 
Net Settlements
and Accruals
on Contracts (1)
 
Amount of Gain 
(Loss)
Recognized in
Income (2)
Year Ended December 31, 2014
 
 
 
 
 
 
 
Interest expense, net
$
(1,386
)
 
$
1,386

 
$
2,179

 
$
2,179

Year Ended December 31, 2013
 
 
 
 
 
 
 
Interest expense, net
(4,643
)
 
4,643

 
4,082

 
4,082

Year Ended December 31, 2012
 
 
 
 
 
 
 
Interest expense, net
(860
)
 
860

 
6,749

 
6,749

___________________
(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.

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Note 9.      Preferred Shares of Beneficial Interest
We issued $150 million and $200 million of depositary shares on June 6, 2008 and January 30, 2007, respectively. Each depositary share represents one-hundredth of a Series F Cumulative Redeemable Preferred Share. The depositary shares are redeemable at our option, in whole or in part, for cash at a redemption price of $25 per depositary share, plus any accrued and unpaid dividends thereon. The depositary shares are not convertible or exchangeable for any of our other property or securities. The Series F Preferred Shares pay a 6.5% annual dividend and have a liquidation value of $2,500 per share. The Series F Preferred Shares issued in June 2008 were issued at a discount, resulting in an effective rate of 8.25%.
We exercised our option to redeem a portion of the Series F depositary shares totaling $200 million on June 5, 2013. Upon the redemption of these shares, a portion of the related original issuance costs totaling $15.7 million was reported as a deduction in arriving at net income attributable to common shareholders. The outstanding $150 million Series F Preferred Shares pay a 6.5% annual dividend and have a liquidation value of $2,500 per share. Of these outstanding shares, $64.3 million were issued at a discount and have an effective rate of 8.25%.
In 2013 and 2012, we redeemed all of our outstanding Series D and Series E Cumulative Redeemable Preferred Shares, respectively.
The following table discloses the cumulative redeemable preferred dividends declared per share:
 
 
Year Ended December 31,
 
 
2014
 
2013
 
2012
Series of Preferred Shares:
 
 
 
 
 
 
Series D
 
$

 
$
13.08

 
$
50.63

Series E
 

 

 
162.16

Series F
 
162.50

 
160.24

 
162.50

As part of our evaluation of our capital plan, we may consider redeeming the remaining Series F Preferred Shares.
Note 10.      Common Shares of Beneficial Interest
Common dividends declared per share were $1.55, $1.22 and $1.16 for the year ended December 31, 2014, 2013 and 2012, respectively. The regular dividend rate per share for our common shares for each quarter of 2014 and 2013 was $.325 and $.305, respectively. Also in December 2014, we paid a special dividend for our common shares in the amount of $.25 per share, which was due to the significant gains on dispositions of property. Subsequent to December 31, 2014, our Board of Trust Managers approved an increase to our 2015 first quarter dividend to $.345 per share.
Note 11.      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):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Net income adjusted for noncontrolling interests
$
288,008

 
$
220,262

 
$
146,640

Transfers from the noncontrolling interests:
 
 
 
 
 
Net increase (decrease) in equity for the acquisition
of noncontrolling interests
11,015

 
(16,177
)
 
394

Change from net income adjusted for noncontrolling interests
and transfers from the noncontrolling interests
$
299,023

 
$
204,085

 
$
147,034

Note 12.      Leasing Operations
The terms of our leases range from less than one year for smaller tenant spaces to over 25 years for larger tenant spaces. In addition to minimum lease payments, most of the leases provide for contingent rentals (payments for real estate taxes, maintenance and insurance by lessees and an amount based on a percentage of the tenants’ sales).

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Future minimum rental income from non-cancelable tenant leases, excluding leases associated with property held for sale and estimated contingent rentals, at December 31, 2014 is as follows (in thousands):
2015
$
360,860

2016
311,436

2017
254,274

2018
202,296

2019
153,214

Thereafter
553,061

Total
$
1,835,141

Contingent rentals for the year ended December 31, are as follows (in thousands):
2014
$
109,714

2013
112,551

2012
112,431

Note 13.      Impairment
The following impairment charges were recorded on the following assets based on the difference between the carrying amount of the assets and the estimated fair value (see Note 24 for additional fair value information) (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Continuing operations:
 
 
 
 
 
Land held for development and undeveloped land (1)
$

 
$
2,358

 
$

Property marketed for sale or sold (2)
808

 
56

 
2,977

Investments in real estate joint ventures and partnerships (3)

 

 
6,608

Other
216

 
165

 

Total reported in continuing operations
1,024

 
2,579

 
9,585

Discontinued operations:
 
 
 
 
 
Property held for sale or sold (4)

 
236

 
5,851

Total impairment charges
1,024

 
2,815

 
15,436

Other financial statement captions impacted by impairment:
 
 
 
 
 
Equity in earnings (losses) of real estate joint ventures and partnerships, net
305

 
395

 
19,946

Net impact of impairment charges
$
1,329

 
$
3,210

 
$
35,382

___________________
(1)
Impairment was prompted by changes in management's plans for these properties, recent comparable market transactions and/or a change in market conditions.
(2)
The charge for 2014 was based primarily on third party offers. Charges for 2013 and 2012 resulted from changes in management’s plans for these properties, primarily the marketing of these properties for sale. Also, included in this caption are impairments associated with dispositions that did not qualify to be reported in discontinued operations.
(3)
Amounts reported in 2012 were based on third party offers to buy our interests in industrial real estate joint ventures.
(4)
Amounts reported were based on third party offers.
Note 14.      Income Tax Considerations
We qualify as a REIT under the provisions of the Internal Revenue Code, and therefore, no tax is imposed on our taxable income distributed to shareholders. To maintain our REIT status, we must distribute at least 90% of our ordinary taxable income to our shareholders and meet certain income source and investment restriction requirements. Our shareholders must report their share of income distributed in the form of dividends.

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Taxable income differs from net income for financial reporting purposes principally because of differences in the timing of recognition of depreciation, rental revenue, interest expense, compensation expense, impairment losses and gain from sales of property. As a result of these differences, the book value of our net fixed assets is in excess of (less than) the tax basis by $32.0 million and $(88.0) million at December 31, 2014 and 2013, respectively.
The following table reconciles net income adjusted for noncontrolling interests to REIT taxable income (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Net income adjusted for noncontrolling interests
$
288,008

 
$
220,262

 
$
146,640

Net (income) loss of taxable REIT subsidiary included above
(4,092
)
 
(4,684
)
 
11,457

Net income from REIT operations
283,916

 
215,578

 
158,097

Book depreciation and amortization including discontinued
operations
150,616

 
157,665

 
148,413

Tax depreciation and amortization
(90,328
)
 
(90,047
)
 
(92,797
)
Book/tax difference on gains/losses from capital transactions
(87,387
)
 
(33,969
)
 
(55,242
)
Deferred/prepaid/above and below-market rents, net
(3,617
)
 
(6,429
)
 
(4,264
)
Impairment loss from REIT operations including discontinued
operations
942

 
474

 
11,396

Other book/tax differences, net
(6,399
)
 
(9,695
)
 
1,430

REIT taxable income
247,743

 
233,577

 
167,033

Dividends paid deduction (1)
(247,743
)
 
(233,577
)
 
(173,202
)
Dividends paid in excess of taxable income
$

 
$

 
$
(6,169
)
___________________
(1)
For 2014 and 2013, the dividends paid deduction includes designated dividends of $114.0 million and $67.7 million from 2015 and 2014, respectively.
For federal income tax purposes, the cash dividends distributed to common shareholders are characterized as follows:
 
Year Ended December 31,
 
2014
 
2013
 
2012
Ordinary income
54.0
%
 
50.5
%
 
92.8
%
Capital gain distributions
46.0
%
 
49.5
%
 
7.2
%
Total
100.0
%
 
100.0
%
 
100.0
%

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Our deferred tax assets and liabilities, including a valuation allowance, consisted of the following (in thousands):
 
December 31,
 
2014
 
2013
Deferred tax assets:
 
 
 
Impairment loss (1)
$
13,900

 
$
17,692

Allowance on other assets
91

 
1,168

Interest expense
12,701

 
12,842

Net operating loss carryforwards (2)
11,024

 
8,814

Book-tax basis differential
1,693

 
886

Other
412

 
241

Total deferred tax assets
39,821

 
41,643

Valuation allowance (3)
(27,539
)
 
(30,541
)
Total deferred tax assets, net of allowance
$
12,282

 
$
11,102

Deferred tax liabilities:
 
 
 
Straight-line rentals
$
48

 
$
696

Book-tax basis differential
7,402

 
8,252

Other
387

 
167

Total deferred tax liabilities
$
7,837

 
$
9,115

___________________
(1)
Impairment losses will not be recognized until the related properties are sold and realization is dependent upon generating sufficient taxable income in the year the property is sold.
(2)
We have net operating loss carryforwards of $31.5 million that expire between the years of 2029 and 2034.
(3)
Management believes it is more likely than not that a portion of the deferred tax assets, which primarily consists of impairment losses, interest expense and net operating losses, will not be realized and established a valuation allowance. However, the amount of the deferred tax asset considered realizable could be reduced if estimates of future taxable income are reduced.
We are subject to federal, state and local income taxes and have recorded an income tax (benefit) provision as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Net income (loss) before taxes of taxable REIT subsidiary
$
1,446

 
$
10,688

 
$
(12,894
)
Federal provision (benefit) at statutory rate of 35%
$
506

 
$
3,741

 
$
(4,513
)
Valuation allowance (decrease) increase
(3,003
)
 
2,165

 
3,781

Other
(149
)
 
98

 
(705
)
Federal income tax (benefit) provision of taxable REIT subsidiary (1)
(2,646
)
 
6,004

 
(1,437
)
Texas franchise tax (2)
1,403

 
1,370

 
1,784

Total
$
(1,243
)
 
$
7,374

 
$
347

___________________
(1)
All periods presented are open for examination by the IRS.
(2)
For all periods presented, amounts include the effects that are reported in discontinued operations. See Note 15 for additional information.
Also, a current tax obligation of $1.5 million and $1.6 million has been recorded at December 31, 2014 and 2013, respectively, in association with these taxes.

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Note 15.      Discontinued Operations
During 2014, we sold 12 centers, three in each of Georgia and Texas and two in each of Florida, Louisiana and North Carolina. These dispositions represent the centers that were classified as discontinued operations or held for sale prior to April 1, 2014, our adoption date for the new qualification criteria for discontinued operations (see Note 2 for further information). Since adoption, no other dispositions have qualified as discontinued operations under the new guidance.
During 2013, we sold 20 centers, nine in Texas, three in each of Florida and North Carolina, two in New Mexico and one in each of California, Nevada and Tennessee. As of December 31, 2013, we classified as held for sale eight centers that consisted of property and accumulated depreciation totaling $155.0 million and $32.4 million, respectively, with three located in Georgia, two in each of Florida and Texas and one in North Carolina.
Excluding property held for sale at December 31, 2013, our Condensed Consolidated Balance Sheet at December 31, 2013 included $68.6 million of property and $13.2 million of accumulated depreciation related to the four centers that were sold and classified as discontinued operations during 2014.
The operating results of these centers have been reclassified and reported as discontinued operations in the Consolidated Statements of Operations as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Revenues, net
$
1,062

 
$
43,452

 
$
92,193

Depreciation and amortization
(260
)
 
(10,902
)
 
(20,710
)
Operating expenses
(285
)
 
(7,457
)
 
(17,090
)
Real estate taxes, net
(136
)
 
(4,766
)
 
(11,643
)
Impairment loss

 
(236
)
 
(5,851
)
General and administrative
(2
)
 
(24
)
 
(2,214
)
Interest, net
(19
)
 
(7,527
)
 
(10,215
)
Interest and other income, net

 
2

 
1

Gain on acquisition

 

 
1,869

Provision for income taxes
(18
)
 
(328
)
 
(422
)
Operating income from discontinued operations
342

 
12,214

 
25,918

Gain on sale of property from discontinued operations
44,582

 
119,203

 
68,619

Income from discontinued operations
$
44,924

 
$
131,417

 
$
94,537


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Note 16.      Supplemental Cash Flow Information
Non-cash investing and financing activities are summarized as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Accrued property construction costs
$
6,265

 
$
5,175

 
$
5,811

Increase (decrease) in equity for the acquisition of noncontrolling
interests in consolidated real estate joint ventures
11,015

 
(16,177
)
 
394

Decrease in notes receivable from real estate joint ventures and
partnerships in association with our contribution in an
unconsolidated real estate joint venture
(6,431
)
 

 

Reduction of debt service guaranty liability
(1,635
)
 
(335
)
 

Property acquisitions and investments in unconsolidated real estate
joint ventures:
 
 
 
 
 
(Decrease) increase in property, net

 
43,122

 
16,665

Decrease in notes receivable from real estate joint ventures and
partnerships

 
(8,750
)
 

Increase (decrease) in real estate joint ventures and
partnerships - investments

 
1,746

 
(3,825
)
Increase in restricted deposits and mortgage escrows

 

 
395

Increase in debt, net

 
60,515

 
40,644

Increase in security deposits

 
187

 
1,332

Increase in noncontrolling interests

 
16,177

 
968

Sale of property and property interest:
 
 
 
 
 
Decrease in property, net
(127,837
)
 

 
(2,855
)
Decrease in real estate joint ventures and partnerships
- investments
(17
)
 

 
(95
)
Decrease in restricted deposits and mortgage escrows

 

 
(204
)
Decrease in other, net
(34
)
 

 

Decrease in debt, net due to debt assumption
(11,069
)
 

 
(3,366
)
Decrease in security deposits
(459
)
 

 
(11
)
Decrease in noncontrolling interests
(155,278
)
 

 
(95
)
Consolidation of joint ventures (see Note 23):
 
 
 
 
 
Increase in property, net

 
60,992

 

Decrease in notes receivable from real estate joint ventures and
partnerships

 
(54,838
)
 

Decrease in real estate joint ventures and partnerships
- investments

 
(11,518
)
 

Increase in security deposits

 
164

 


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Table of Contents

Note 17.      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. The components of earnings per common share – basic and diluted for the prior periods have been recast to conform with discontinued operations. Earnings per common share – basic and diluted components for the periods indicated are as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Numerator:
 
 
 
 
 
Continuing Operations:

 



Income from continuing operations
$
116,365

 
$
132,977

 
$
56,880

Gain on sale of property
146,290

 
762

 
1,004

Net income attributable to noncontrolling interests
(19,623
)
 
(5,545
)
 
(4,527
)
Dividends on preferred shares
(10,840
)
 
(18,173
)
 
(34,930
)
Redemption costs of preferred shares

 
(17,944
)
 
(2,500
)
Income from continuing operations attributable to
common shareholders – basic
232,192

 
92,077

 
15,927

Income attributable to operating partnership units
2,171

 

 

Income from continuing operations attributable to
common shareholders – diluted
$
234,363

 
$
92,077

 
$
15,927

Discontinued Operations:
 
 
 
 
 
Income from discontinued operations
$
44,924

 
$
131,417

 
$
94,537

Net loss (income) attributable to noncontrolling interests
52

 
(39,349
)
 
(1,254
)
Income from discontinued operations attributable to common
shareholders – basic and diluted
$
44,976

 
$
92,068

 
$
93,283

Net Income:
 
 
 
 
 
Net income attributable to common shareholders – basic
$
277,168

 
$
184,145

 
$
109,210

Net income attributable to common shareholders – diluted
$
279,339

 
$
184,145

 
$
109,210

Denominator:
 
 
 
 
 
Weighted average shares outstanding – basic
121,542

 
121,269

 
120,696

Effect of dilutive securities:
 
 
 
 
 
Share options and awards
1,331

 
1,191

 
1,009

Operating partnership units
1,497

 

 

Weighted average shares outstanding – diluted
124,370

 
122,460

 
121,705

Anti-dilutive securities of our common shares, which are excluded from the calculation of earnings per common share – diluted, are as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Share options (1)
908

 
1,929

 
2,354

Operating partnership units

 
1,554

 
1,578

Total anti-dilutive securities
908

 
3,483

 
3,932

___________________
(1)
Exclusion results as exercise prices were greater than the average market price for each respective period.

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Note 18.      Share Options and Awards
In April 2011, our Long-Term Incentive Plan for the issuance of options and share awards expired, and issued options of 2.3 million remain outstanding as of December 31, 2014.
In May 2010, our shareholders approved the adoption of the Amended and Restated 2010 Long-Term Incentive Plan, under which 3.0 million of our common shares were reserved for issuance, and options and share awards of 1.4 million are available for future grant at December 31, 2014. This plan expires in May 2020.
Compensation expense, net of forfeitures, associated with share options and restricted shares totaled $7.9 million in 2014, $8.8 million in 2013 and $9.7 million in 2012, of which $2.3 million in 2014, $2.4 million in 2013 and $2.0 million in 2012 was capitalized.
Options
The fair value of share options issued prior to 2012 was estimated on the date of grant using the Black-Scholes option pricing method based on the expected weighted average assumptions.
Following is a summary of the option activity for the three years ended December 31, 2014:
 
Shares
Under
Option
 
Weighted
Average
Exercise
Price
Outstanding, January 1, 2012
4,607,703

 
$
28.09

Forfeited or expired
(40,390
)
 
27.12

Exercised
(481,611
)
 
20.70

Outstanding, December 31, 2012
4,085,702

 
28.98

Forfeited or expired
(79,108
)
 
32.61

Exercised
(462,848
)
 
26.95

Outstanding, December 31, 2013
3,543,746

 
29.16

Forfeited or expired
(307,413
)
 
39.73

Exercised
(339,210
)
 
22.98

Outstanding, December 31, 2014
2,897,123

 
$
28.76

The total intrinsic value of options exercised was $4.2 million in 2014, $3.2 million in 2013 and $3.0 million in 2012. As of December 31, 2014 and 2013, there was approximately $0.5 million and $1.1 million, respectively, of total unrecognized compensation cost related to unvested share options, which is expected to be amortized over a weighted average of 0.8 years and 1.1 years, respectively.
The following table summarizes information about share options outstanding and exercisable at December 31, 2014:
Range of
Exercise Prices
 
Outstanding
 
Exercisable
 
Number
 
Weighted
Average
Remaining
Contractual
Life
 
Weighted
Average
Exercise
Price
 
Aggregate
Intrinsic
Value
(000’s)
 
Number
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
 
Aggregate
Intrinsic
Value
(000’s)
$11.85 - $17.78  
 
618,556

 
4.2 years
 
$
11.85

 
 
 
618,556

 
$
11.85

 
4.2 years
 
 
$17.79 - $26.69  
 
801,760

 
5.8 years
 
$
23.78

 
 
 
584,698

 
$
23.64

 
5.7 years
 
 
$26.70 - $40.05  
 
1,015,468

 
2.2 years
 
$
34.51

 
 
 
1,015,468

 
$
34.51

 
2.2 years
 
 
$40.06 - $49.62  
 
461,339

 
1.9 years
 
$
47.46

 
 
 
461,339

 
$
47.46

 
1.9 years
 
 
Total
 
2,897,123

 
3.6 years
 
$
28.76

 
$
17,846

 
2,680,061

 
$
29.14

 
3.4 years
 
$
15,491


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Restricted Shares
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:
 
Year Ended December 31, 2014
 
Minimum
 
Maximum
Dividend yield
0.0
%
 
4.1
%
Expected volatility
14.8
%
 
25.3
%
Expected life (in years)
N/A

 
3

Risk-free interest rate
0.1
%
 
0.8
%
A summary of the status of unvested restricted shares for the year ended December 31, 2014 is as follows:
 
Unvested
Restricted
Share
Awards
 
Weighted
Average 
Grant
Date Fair 
Value
Outstanding, January 1, 2014
575,167

 
$
26.54

Granted:
 
 
 
Service-based awards
112,329

 
30.24

Market-based awards relative to FTSE NAREIT U.S. Shopping Center
Index
49,065

 
33.88

Market-based awards relative to three-year absolute TSR
49,065

 
27.63

Trust manager awards
29,043

 
31.00

Vested
(119,858
)
 
21.67

Forfeited
(1,006
)
 
28.11

Outstanding, December 31, 2014
693,805

 
$
28.76

As of December 31, 2014 and 2013, there was approximately $2.7 million and $3.9 million, respectively, of total unrecognized compensation cost related to unvested restricted shares, which is expected to be amortized over a weighted average of 0.9 years and 1.4 years, respectively.

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Note 19.      Employee Benefit Plans
Defined Benefit Plans:
The following tables summarize changes in the benefit obligation, the plan assets and the funded status of our pension plans as well as the components of net periodic benefit costs, including key assumptions (in thousands). The measurement dates for plan assets and obligations were December 31, 2014 and 2013.
 
December 31,
 
2014
 
2013
Change in Projected Benefit Obligation:
 
 
 
Benefit obligation at beginning of year
$
38,072

 
$
42,530

Service cost
1,008

 
1,281

Interest cost
1,800

 
1,544

Actuarial loss (gain) (1)
11,020

 
(5,807
)
Benefit payments
(1,682
)
 
(1,476
)
Benefit obligation at end of year
$
50,218

 
$
38,072

Change in Plan Assets:
 
 
 
Fair value of plan assets at beginning of year
$
39,327

 
$
32,161

Actual return on plan assets
2,861

 
6,842

Employer contributions
2,100

 
1,800

Benefit payments
(1,682
)
 
(1,476
)
Fair value of plan assets at end of year
$
42,606

 
$
39,327

(Unfunded) funded status at end of year (included in accounts payable and accrued expenses in 2014 and other assets in 2013)
$
(7,612
)
 
$
1,255

Accumulated benefit obligation
$
50,104

 
$
37,885

Net loss recognized in accumulated other comprehensive loss
$
16,508

 
$
5,775

___________________
(1)
The year over year change in actuarial loss is due primarily to the application of a new mortality rate table, a decrease in the discount rate and demographic changes.
The following is the required information for other changes in plan assets and benefit obligations recognized in other comprehensive loss (income) (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Net loss (gain)
$
11,118

 
$
(10,200
)
 
$
979

Amortization of net loss (1)
(385
)
 
(1,279
)
 
(1,569
)
Amortization of prior service cost

 

 
117

Total recognized in other comprehensive loss (income)
$
10,733

 
$
(11,479
)
 
$
(473
)
Total recognized in net periodic benefit costs and other
comprehensive loss (income)
$
10,967

 
$
(9,824
)
 
$
1,622

___________________
(1)
The estimated net loss that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $1.3 million.

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The following is the required information for plans with an accumulated benefit obligation in excess of plan assets (in thousands):
 
December 31,
 
2014
 
2013
Projected benefit obligation
$
50,218

 
N/A
Accumulated benefit obligation
50,104

 
N/A
Fair value of plan assets
42,606

 
N/A
The components of net periodic benefit cost for the plans are as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Service cost
$
1,008

 
$
1,281

 
$
1,314

Interest cost
1,800

 
1,544

 
1,578

Expected return on plan assets
(2,959
)
 
(2,449
)
 
(2,249
)
Prior service cost

 

 
(117
)
Recognized loss
385

 
1,279

 
1,569

Total
$
234

 
$
1,655

 
$
2,095

The assumptions used to develop periodic expense for the plans are shown below:
 
Year Ended December 31,
 
2014
 
2013
 
2012
Discount rate
4.70
%
 
3.87
%
 
4.19
%
Salary scale increases
3.50
%
 
3.50
%
 
3.50
%
Long-term rate of return on assets
7.50
%
 
7.50
%
 
8.00
%
The selection of the discount rate is made annually after comparison to yields based on high quality fixed-income investments. The salary scale is the composite rate which reflects anticipated inflation, merit increases, and promotions for the group of covered participants. The long-term rate of return is a composite rate for the trust. It is derived as the sum of the percentages invested in each principal asset class included in the portfolio multiplied by their respective expected rates of return. We considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This analysis resulted in the selection of 7.50% as the long-term rate of return assumption for 2014.
The assumptions used to develop the actuarial present value of the benefit obligations for the plans are shown below:
 
Year Ended December 31,
 
2014
 
2013
 
2012
Discount rate
3.83
%
 
4.70
%
 
3.87
%
Salary scale increases
3.50
%
 
3.50
%
 
3.50
%

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The expected contribution to be paid for the Retirement Plan by us during 2015 is approximately $2.0 million. The expected benefit payments for the next 10 years for the Retirement Plan is as follows (in thousands):
2015
$
2,250

2016
2,193

2017
2,140

2018
1,998

2019
2,404

2020-2024
12,513

The participant data used in determining the liabilities and costs for the Retirement Plan was collected as of January 1, 2014, and no significant changes have occurred through December 31, 2014.
At December 31, 2014, our investment asset allocation compared to our benchmarking allocation model for our plan assets was as follows:
 
Portfolio
 
Benchmark
Cash and Short-Term Investments
6
%
 
6
%
U.S. Stocks
60
%
 
61
%
International Stocks
13
%
 
11
%
U.S. Bonds
18
%
 
19
%
International Bonds
3
%
 
3
%
Total
100
%
 
100
%
The fair value of plan assets was determined based on publicly quoted market prices for identical assets, which are classified as Level 1 observable inputs. The allocation of the fair value of plan assets was as follows:
 
December 31,
 
2014
 
2013
Cash and Short-Term Investments
18
%
 
3
%
Large Company Funds
35
%
 
31
%
Mid Company Funds
6
%
 
8
%
Small Company Funds
6
%
 
8
%
International Funds
10
%
 
11
%
Fixed Income Funds
17
%
 
21
%
Growth Funds
8
%
 
18
%
Total
100
%
 
100
%
Concentrations of risk within our equity portfolio are investments classified within the following sectors: technology, financial services, consumer cyclical goods, healthcare and industrial, which represents approximately 17%, 16%, 15%, 15% and 12% of total equity investments, respectively.
Defined Contribution Plans:
Compensation expense related to our defined contribution plans was $3.2 million in 2014, $3.1 million in 2013 and $3.3 million in 2012.
Note 20.      Related Parties
Through our management activities and transactions with our real estate joint ventures and partnerships, we had net accounts receivable of $1.5 million and $1.4 million outstanding as of December 31, 2014 and 2013, respectively. We also had accounts payable and accrued expenses of $6.0 million and $5.6 million outstanding as of December 31, 2014 and 2013, respectively. For the year ended December 31, 2014, 2013 and 2012, we recorded joint venture fee income of $4.6 million, $5.0 million and $6.1 million, respectively.

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In 2014, we completed the dissolution of our consolidated real estate joint venture with Hines Retail REIT (“Hines”), in which we owned a 30% interest. At December 31, 2013, this joint venture held a portfolio of 13 properties located in Texas, Tennessee, Georgia, Florida and North Carolina with $172.9 million in total assets and $11.1 million of debt, net, which was assumed by Hines. This transaction was completed through the distribution of five properties to us, resulting in an increase to our equity of $11.0 million, and eight properties to Hines. The eight properties distributed to Hines were classified as held for sale at December 31, 2013, and we realized a $23.3 million gain in discontinued operations associated with this transaction.
In 2013, we sold our 10% interest in two unconsolidated tenancy-in-common arrangements to our partner for approximately $8.9 million. Also, we received cash, real property and our partner’s interest in two consolidated joint ventures in exchange for our interest in two unconsolidated joint ventures and the payment of a note receivable (see Note 21 for additional information under Litigation). Furthermore, we acquired our partner’s 50% unconsolidated joint venture interest in a California property.
Note 21.      Commitments and Contingencies
Leases
We are engaged in the operation of shopping centers, which are either owned or, with respect to certain shopping centers, operated under long-term ground leases. These ground leases expire at various dates through 2069, with renewal options. Space in our shopping centers is leased to tenants pursuant to agreements that provide for terms ranging generally from one year to 25 years and, in some cases, for annual rentals subject to upward adjustments based on operating expense levels, sales volume, or contractual increases as defined in the lease agreements.
Scheduled minimum rental payments under the terms of all non-cancelable operating leases in which we are the lessee, principally for shopping center ground leases, for the subsequent five years and thereafter ending December 31, are as follows (in thousands):
2015
$
2,973

2016
2,851

2017
2,672

2018
2,636

2019
2,530

Thereafter
117,642

Total
$
131,304

Rental expense for operating leases was, in millions: $5.3 in 2014; $5.6 in 2013 and $5.7 in 2012.
The scheduled future minimum revenues under subleases, applicable to the ground lease rentals, under the terms of all non-cancelable tenant leases, assuming no new or renegotiated leases or option extensions for the subsequent five years and thereafter ending December 31, are as follows (in thousands):
2015
$
27,605

2016
25,537

2017
22,646

2018
19,732

2019
14,052

Thereafter
58,085

Total
$
167,657

Property under capital leases that is included in buildings and improvements consisted of two centers totaling $16.8 million at December 31, 2014 and 2013. Amortization of property under capital leases is included in depreciation and amortization expense, and the balance of accumulated depreciation associated with these capital leases at December 31, 2014 and 2013 was $13.0 million and $12.2 million, respectively. Future minimum lease payments under these capital leases total $37.8 million of which $16.8 million represents interest. Accordingly, the present value of the net minimum lease payments was $21.0 million at December 31, 2014.

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The annual future minimum lease payments under capital leases as of December 31, 2014 are as follows (in thousands):
2015
$
1,834

2016
1,843

2017
1,852

2018
1,862

2019
1,871

Thereafter
28,578

Total
$
37,840

Commitments and Contingencies
As of December 31, 2014 and 2013, we participate in three real estate ventures structured as DownREIT partnerships that have properties in Arkansas, California, 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 in exchange for our common shares or an equivalent amount in cash. 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 year ended December 31, 2014 and 2013. The aggregate redemption value of these interests was approximately $52 million and $41 million as of December 31, 2014 and December 31, 2013, respectively.
As of December 31, 2014, we have entered into commitments aggregating $64.3 million comprised principally of construction contracts which are generally due in 12 to 36 months.
As of December 31, 2014, we have executed an agreement to purchase the retail portion of a mixed-use project for approximately $23.8 million at delivery by the developer, which is estimated to occur in 2016. Including this payment, our expected total investment in the retail portion of the project is approximately $29.1 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.

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Litigation
During 2013, we settled a lawsuit we filed in 2011 against our joint venture partner in connection with a development project in Sheridan, Colorado for an alleged failure of our joint venture partner to repay to us an intercompany note payable. Pursuant to the settlement agreement, our $16.1 million note receivable was paid in exchange for cash and real property totaling $19.1 million, receipt of our partner’s interest in two consolidated joint ventures resulting in an increase of approximately $16.2 million in noncontrolling interests and distribution of our interest in two unconsolidated joint ventures with total assets of $23.2 million.
We are also involved in various matters of litigation arising in the normal course of business. While we are unable to predict with certainty 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 22.      Variable Interest Entities
Consolidated VIEs:
At December 31, 2014, one of our real estate joint ventures, whose activities primarily consisted of owning and operating 15 neighborhood/community shopping centers located in Texas, was determined to be VIE. During 2014, we completed the dissolution of a real estate joint venture that was previously determined to be a VIE. At December 31, 2013, two of our real estate joint ventures, whose activities primarily consisted of owning and operating 28 neighborhood/community shopping centers located in Florida, Georgia, North Carolina, Tennessee and Texas, were determined to be VIEs. Based on financing agreements that are guaranteed solely by us, we have determined that we are the primary beneficiary in each of the foregoing instances and have consolidated these joint ventures.
A summary of our consolidated VIEs is as follows (in thousands):
 
December 31,
 
2014
 
2013
Maximum Risk of Loss (1)
$
37,178

 
$
40,471

Assets Held by VIEs
63,984

 
233,734

Assets Held as Collateral for Debt
61,850

 
80,137

___________________
(1)
The maximum risk of loss has been determined to be limited to our debt exposure for each real estate joint venture.
Restrictions on the use of these assets are significant because they serve as collateral for the VIEs’ debt, and we would generally be required to obtain our partners’ approval in accordance with the joint venture agreements for any major transactions. Transactions with these joint ventures on our consolidated financial statements have been limited to changes in noncontrolling interests and reductions in debt from our partners’ contributions. We and our partners are subject to the provisions of the joint venture agreements which include provisions for when additional contributions may be required including operating cash shortfalls and unplanned capital expenditures.
Unconsolidated VIEs:
At December 31, 2014 and December 31, 2013, 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):
 
December 31,
 
2014
 
2013
Investment in Real Estate Joint Ventures and Partnerships, net (1)
$
11,464

 
$
11,536

Maximum Risk of Loss (2)
10,992

 
11,542

___________________
(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)
The maximum risk of loss has been determined to be limited to our debt exposure for the real estate joint venture.
We and our partners are subject to the provisions of the joint venture agreements that specify conditions, including operating shortfalls and unplanned capital expenditures, under which additional contributions may be required.

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Note 23.      Business Combinations
Except as identified below, our aggregate acquisitions for 2014 and 2013 were not materially significant for disclosure purposes.
Effective December 23, 2013, we acquired a partner’s 50% interest in an unconsolidated joint venture related to a property in California, which resulted in the consolidation of this property. 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 Consolidated Balance Sheet at its estimated fair value 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 measurement is 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 broker valuation estimates; a discount rate of 7.75%; a terminal capitalization rate for similar properties; and factors that we believe market participants would consider in estimating fair value. The result of this transaction is included in our Consolidated Statements of Operations beginning December 23, 2013.
The following table summarizes the transaction related to the business combination, including the assets acquired and liabilities assumed as indicated (in thousands):
 
December 23, 2013
 
Fair value of our equity interest before business combination
$
90,935

 
Fair value of consideration transferred
$
3,342

(1) 
Amounts recognized for assets and liabilities assumed:
 
 
Assets:
 
 
Property
$
64,211

 
Unamortized debt and lease costs
9,213

 
Accrued rent and accounts receivable
2,868

 
Cash and cash equivalents
754

 
Other, net
15,840

 
Liabilities:
 
 
Accounts payable and accrued expenses
(166
)
 
Other, net
(1,452
)
 
Total net assets
$
91,268

(2) 
 
 
 
Gain recognized on equity interest remeasured to fair value
$
20,234

(3) 
___________________
(1)
Consideration included $2.8 million of cash and a future obligation of $.5 million.
(2)
Excludes the effect of $54.8 million in intercompany debt that is eliminated upon consolidation.
(3)
Amount is included in Gain on Sale and Acquisition of Real Estate Joint Venture and Partnership Interests in our Consolidated Statement of Operations.
The following table summarizes the impact to revenues and net income attributable to common shareholders from our business combination as follows (in thousands):
 
Year Ended
December 31, 2013
Increase in revenues
$
197

Increase in net income attributable to common shareholders


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The following unaudited supplemental pro forma data is presented for the year ended December 31, 2013, as if the business combination occurring in 2013 was completed on January 1, 2011. 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 do they purport to represent our results of operations for future periods. The following table summarizes the supplemental pro forma data, as follows (in thousands, except per share amounts):

 
Pro Forma
2013(1)
 
Pro Forma
2012(1)
Revenues
$
498,331

 
$
468,656

Net income
244,918

 
152,016

Net income attributable to common shareholders
163,907

 
108,805

Earnings per share – basic
1.35

 
0.90

Earnings per share – diluted
1.34

 
0.89

___________________
(1)
There are no non-recurring pro forma adjustments included within or excluded from the amounts in the preceding table.
Note 24.      Fair Value Measurements
Recurring Fair Value Measurements:
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 and 2013, 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
December 31,
2014
 
 
Assets:
 
 
 
 
 
 
 
 
Investments, mutual funds held in a grantor trust
$
19,864

 
 
 
 
 
$
19,864

 
Investments, mutual funds
7,446

 
 
 
 
 
7,446

 
Derivative instruments:
 
 
 
 
 
 
 
 
Interest rate contracts
 
 
$
3,891

 
 
 
3,891

 
Total
$
27,310

 
$
3,891

 
$

 
$
31,201

 
Liabilities:
 
 
 
 
 
 
 
 
Derivative instruments:
 
 
 
 
 
 
 
 
Interest rate contracts
 
 
$
109

 
 
 
$
109

 
Deferred compensation plan obligations
$
19,864

 
 
 
 
 
19,864

 
Total
$
19,864

 
$
109

 
$

 
$
19,973


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Quoted Prices 
in Active 
Markets for
Identical Assets
and Liabilities
(Level 1)
 
Significant 
Other
Observable  Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Fair Value at
December 31,
2013
 
 
Assets:
 
 
 
 
 
 
 
 
Investments, mutual funds held in a grantor trust
$
18,583

 
 
 
 
 
$
18,583

 
Investments, mutual funds and time deposit
8,408

 
50,034

 
 
 
58,442

 
Derivative instruments:
 
 
 
 
 
 
 
 
Interest rate contracts
 
 
5,282

 
 
 
5,282

 
Total
$
26,991

 
$
55,316

 
$

 
$
82,307

 
Liabilities:
 
 
 
 
 
 
 
 
Derivative instruments:
 
 
 
 
 
 
 
 
Interest rate contracts
 
 
$
476

 
 
 
$
476

 
Deferred compensation plan obligations
$
18,583

 
 
 
 
 
18,583

 
Total
$
18,583

 
$
476

 
$

 
$
19,059

Nonrecurring Fair Value Measurements:
Property Impairments
Property is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the property, including any identifiable intangible assets, site costs and capitalized interest, may not be recoverable. In such an event, a comparison is made of the current and projected operating cash flows of each such property into the foreseeable future on an undiscounted basis to the carrying amount of such property. If we conclude that an impairment may have occurred, estimated fair values are determined by management utilizing cash flow models, market capitalization rates and market discount rates, or by obtaining third-party broker valuation estimates, appraisals, bona fide purchase offers or the expected sales price of an executed sales agreement in accordance with our fair value measurements accounting policy. Market capitalization rates and market discount rates are determined by reviewing current sales of similar properties and transactions, and utilizing management’s knowledge and expertise in property marketing.
No assets were measured at fair value on a nonrecurring basis at December 31, 2014. Assets measured at fair value on a nonrecurring basis at December 31, 2013, 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
 
Total Gains
(Losses) (1)
Property (2)
 
 
$
3,300

 
$
8,576

 
$
11,876

 
$
(2,358
)
Total
$

 
$
3,300

 
$
8,576

 
$
11,876

 
$
(2,358
)
___________________
(1)
Total gains (losses) exclude impairments on disposed assets because they are no longer held by us.
(2)
In accordance with our policy of evaluating and recording impairments on the disposal of long-lived assets, property with a carrying amount of $14.3 million was written down to a fair value of $11.9 million, resulting in a loss of $2.4 million, which was included in earnings for the period. Management’s estimate of the fair value of these properties was determined using bona fide purchase offers for the Level 2 inputs. See the quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements table below.
Fair Value Disclosures:
Unless otherwise listed 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.

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Schedule of our fair value disclosures is as follows (in thousands):
 
December 31,
 
2014
 
2013
 
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
Unobservable
Inputs
(Level 3)
Notes receivable from real estate joint
ventures and partnerships
$

 
 
 
$

 
$
13,330

 
$
13,549

Tax increment revenue bonds (1)
25,392

 
 
 
25,392

 
25,850

 
25,850

Investments, held to maturity (2)
2,750

 
$
2,742

 
 
 
 
 
 
Debt:
 
 
 
 
 
 
 
 
 
Fixed-rate debt
1,651,959

 
 
 
1,719,775

 
2,136,265

 
2,150,891

Variable-rate debt
286,229

 
 
 
292,972

 
163,579

 
172,349

___________________
(1)
At December 31, 2014 and 2013, the credit loss balance on our tax increment revenue bonds was $31.0 million.
(2)
Investments held to maturity are recorded at cost and have a gross unrealized loss of $8 thousand as of December 31, 2014.
The quantitative information about the significant unobservable inputs used for our Level 3 fair value measurements as of December 31, 2014 and 2013 reported in the above tables, is as follows:
 
Description
 
Fair Value at
December 31,
 
Unobservable
Inputs
 
Range
 
 
 
2014
 
2013
 
 
 
 
Minimum
 
Maximum
 
 
(in thousands)
 
Valuation Technique
 
 
2014
2013
 
2014
2013
 
Property
 
$

 
$
8,576

 
Broker valuation
estimate
 
Indicative bid
 
 
 
 
 
 
 
Notes receivable
from real
estate joint
ventures and
partnerships
 

 
13,549

 
Discounted cash flows
 
Discount rate
 
 
 
 


2.7
%
 
Tax increment
revenue bonds
 
25,392

 
25,850

 
Discounted cash flows
 
Discount rate
 
 
 
 
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
%
2.0
%
 
Fixed-rate debt
 
1,719,775

 
2,150,891

 
Discounted cash flows
 
Discount rate
 
1.3
%
1.3
%
 
5.1
%
7.4
%
 
Variable-rate
debt
 
292,972

 
172,349

 
Discounted cash flows
 
Discount rate
 
1.2
%
.8
%
 
2.9
%
5.0
%

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Note 25.      Quarterly Financial Data (Unaudited)
Summarized quarterly financial data is as follows (in thousands):
 
First
 
Second
 
Third
 
Fourth
 
2014
 
 
 
 
 
 
 
 
Revenues (1)
$
127,592

 
$
130,191

 
$
130,521

 
$
126,102

 
Net income
64,781

(2)(3) 
36,984

(2)(4) 
102,199

(2)(5) 
103,615

(2)(6) 
Net income attributable to
common shareholders
60,593

(2)(3) 
32,686

(2)(4) 
97,619

(2)(5) 
86,270

(2)(6)(7) 
Earnings per common
share – basic
0.50

(2)(3) 
0.27

(2)(4) 
0.80

(2)(5) 
0.71

(2)(6)(7) 
Earnings per common
share – diluted
0.49

(2)(3) 
0.27

(2)(4) 
0.79

(2)(5) 
0.70

(2)(6)(7) 
2013
 
 
 
 
 
 
 
 
Revenues (1)
$
117,827

 
$
121,995

 
$
123,302

 
$
126,071

 
Net income
44,817

(2)(8) 
104,178

(2) 
62,389

(2) 
53,772

(2) 
Net income attributable to
common shareholders
33,668

(2)(8) 
45,421

(2)(9) 
57,832

(2) 
47,224

(2) 
Earnings per common
share – basic
0.28

(2)(8) 
0.37

(2)(9) 
0.48

(2) 
0.39

(2) 
Earnings per common
share – diluted
0.28

(2)(8) 
0.37

(2)(9) 
0.47

(2) 
0.38

(2) 
___________________
(1)
Revenues from the sale of operating properties classified as discontinued operations have been reclassified and reported in discontinued operations for all periods presented.
(2)
The quarter results include significant gains on the sale of properties and real estate joint venture and partnership interests and on acquisitions. Gain amounts are: $41.4 million, $6.8 million, $69.5 million and $74.9 million for the three months ended March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014, respectively, and $11.7 million, $78.4 million, $38.4 million and $25.2 million for the three months ended March 31, 2013, June 30, 2013, September 30, 2013 and December 31, 2013, respectively.
(3)
The quarter results include accelerated depreciation of $3.6 million related to a redevelopment project and a $1.5 million recovery of a receivable.
(4)
The quarter results include the realization of a $2.1 million tax benefit associated with the sale of unimproved land in our taxable REIT subsidiary.
(5)
The quarter results include gains on the sale of properties in our equity method investments of $2.9 million and a $1.2 million write-off of debt costs associated with the redemption of our 8.1% senior unsecured notes.
(6)
The quarter results include gains on the sale of properties in our equity method investments of $1.9 million and a $1.0 million impairment loss associated primarily with the disposition of a land parcel and a shopping center.
(7)
The quarter results include net income attributable to noncontrolling interests of $14.6 million associated with applicable gains discussed in (2) above.
(8)
The quarter results include a write-off of an above-market assumed mortgage intangible due to the early payoff of the related mortgage of $9.7 million.
(9)
The quarter results include net income attributable to noncontrolling interests of $37.7 million associated with applicable gains discussed in (2) above and a $15.7 million deduction associated with the redemption of Series F preferred shares (see Note 9 for additional information).
Note 26. Subsequent Events
Subsequent to December 31, 2014, we acquired one center in Texas with a gross purchase price of $43.1 million and sold two centers with gross proceeds totaling $25.1 million. No impairment was realized associated with our property dispositions, and we have not completed the accounting for this recent acquisition, but anticipate that the purchase price will primarily be allocated to building, land and other identifiable intangible assets and liabilities.
Also, we are in negotiations associated with a $200 million unsecured five-year term note and a ten-year extension of an existing $66 million secured note, which are anticipated to close by the first quarter of 2015. The proceeds of the term note will be used for general corporate purposes, and the interest rate associated with the existing secured note is anticipated to be reduced by 3.9% to 3.5% with approximately $6.1 million of debt extinguishment costs being realized.
* * * * *

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ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
ITEM 9A. 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 Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) as of December 31, 2014. 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 December 31, 2014.
There has been no change to our internal control over financial reporting during the quarter ended December 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Weingarten Realty Investors and its subsidiaries (“WRI”) maintain a system of internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act, which is a process designed under the supervision of WRI’s principal executive officer and principal financial officer and effected by WRI’s Board of Trust Managers, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
WRI’s internal control over financial reporting includes those policies and procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of WRI’s assets;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of WRI are being made only in accordance with authorizations of management and trust managers of WRI; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of WRI’s assets that could have a material effect on the financial statements.
WRI’s management has responsibility for establishing and maintaining adequate internal control over financial reporting for WRI. Management, with the participation of WRI’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of WRI’s internal control over financial reporting as of December 31, 2014 based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on their evaluation of WRI’s internal control over financial reporting, WRI’s management along with the Chief Executive Officer and Chief Financial Officer believe that WRI’s internal control over financial reporting is effective as of December 31, 2014.
Deloitte & Touche LLP, WRI’s independent registered public accounting firm that audited the consolidated financial statements and financial statement schedules included in this Form 10-K, has issued an attestation report on the effectiveness of WRI’s internal control over financial reporting.
February 19, 2015

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trust Managers and Shareholders of
Weingarten Realty Investors
Houston, Texas
We have audited the internal control over financial reporting of Weingarten Realty Investors and subsidiaries (the "Company") as of December 31, 2014, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report On Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of trust managers, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and trust managers of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2014, of the Company and our report dated February 19, 2015, expressed an unqualified opinion on those financial statements and financial statement schedules and included an explanatory paragraph regarding the adoption of ASU 2014-08.
/s/ Deloitte & Touche LLP
Houston, Texas
February 19, 2015

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ITEM 9B. Other Information
Not applicable.
PART III
ITEM 10. Trust Managers, Executive Officers and Corporate Governance
Information with respect to our trust managers and executive officers is incorporated herein by reference to the “Election of Trust Managers - Proposal One," “Compensation Discussion and Analysis - Overview” and “Share Ownership of Beneficial Owners and Management” sections of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2015.
Code of Conduct and Ethics
We have adopted a code of business and ethics for trust managers, officers and employees, known as the Code of Conduct and Ethics. The Code of Conduct and Ethics is available on our website at www.weingarten.com. Shareholders may request a free copy of the Code of Conduct and Ethics from:
Weingarten Realty Investors
Attention: Investor Relations
2600 Citadel Plaza Drive, Suite 125
Houston, Texas 77008
(713) 866-6000
www.weingarten.com
We have also adopted a Code of Conduct for Officers and Senior Financial Associates setting forth a code of ethics applicable to our principal executive officer, principal financial officer, chief accounting officer and financial associates, which is available on our website at www.weingarten.com. Shareholders may request a free copy of the Code of Conduct for Officers and Senior Financial Associates from the address and phone number set forth above.
Governance Guidelines
We have adopted Governance Guidelines, which are available on our website at www.weingarten.com. Shareholders may request a free copy of the Governance Guidelines from the address and phone number set forth above under “Code of Conduct and Ethics.”
ITEM 11. Executive Compensation
Information with respect to executive compensation is incorporated herein by reference to the “Compensation Discussion and Analysis,” “Trust Manager Compensation,” “Compensation Committee Report,” “Summary Compensation Table” and “Trust Manager Compensation Table” sections of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2015.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The “Share Ownership of Beneficial Owners and Management” section of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2015 is incorporated herein by reference.
The following table summarizes the equity compensation plans under which our common shares of beneficial interest may be issued as of December 31, 2014:
Plan category
 
Number of 
shares to
be issued upon exercise
of outstanding options,
warrants and rights
 
Weighted 
average
exercise price of outstanding  options,
warrants and 
rights
 
Number of 
shares
remaining 
available
for future 
issuance
Equity compensation plans approved by shareholders
 
2,897,123
 
$28.76
 
1,437,633
Equity compensation plans not approved by shareholders
 
 
 
Total
 
2,897,123
 
$28.76
 
1,437,633

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ITEM 13. Certain Relationships and Related Transactions, and Trust Manager Independence
The “Governance,” “Compensation Committee Interlocks and Insider Participation” and “Certain Transactions” sections of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2015 are incorporated herein by reference.
ITEM 14. Principal Accountant Fees and Services
The “Accounting Firm Fees” section within “Ratification of Independent Registered Public Accounting Firm - Proposal Two” of our definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 28, 2015 is incorporated herein by reference.
PART IV
ITEM 15. Exhibits and Financial Statement Schedules
(a)
The following documents are filed as part of this Report:
Page  
 
 
 
 
 
 
(A)
 
(B)
Financial Statements:
 
 
 
(i)
 
 
(ii)
 
 
(iii)
 
 
(iv)
 
 
(v)
 
 
(vi)
 
(C)
Financial Statement Schedules:
 
 
 
II
 
 
III
 
 
IV
All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule or because the information required is included in the consolidated financial statements and notes thereto.

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(b)
 
Exhibits:
3.1
Restated Declaration of Trust (filed as Exhibit 3.1 to WRI’s Form 8-A dated January 19, 1999 and incorporated herein by reference).
3.2
Amendment of the Restated Declaration of Trust (filed as Exhibit 3.2 to WRI’s Form 8-A dated January 19, 1999 and incorporated herein by reference).
3.3
Second Amendment of the Restated Declaration of Trust (filed as Exhibit 3.3 to WRI’s Form 8-A dated January 19, 1999 and incorporated herein by reference).
3.4
Third Amendment of the Restated Declaration of Trust (filed as Exhibit 3.4 to WRI’s Form 8-A dated January 19, 1999 and incorporated herein by reference).
3.5
Fourth Amendment of the Restated Declaration of Trust dated April 28, 1999 (filed as Exhibit 3.5 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference).
3.6
Fifth Amendment of the Restated Declaration of Trust dated April 20, 2001 (filed as Exhibit 3.6 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference).
3.7
Amended and Restated Bylaws of WRI (filed as Exhibit 99.2 to WRI’s Form 8-A dated February 23, 1998 and incorporated herein by reference).
3.8
Sixth Amendment of the Restated Declaration of Trust dated May 6, 2010 (filed as Exhibit 3.1 to WRI’s Form 8-K dated May 6, 2010 and incorporated herein by reference).
3.9
Amendment of Bylaws-Direct Registration System, Section 7.2(a) dated May 3, 2007 (filed as Exhibit 3.8 to WRI’s Form 10-Q for the quarter ended June 30, 2007 and incorporated herein by reference).
3.10
Second Amended and Restated Bylaws of Weingarten Realty Investors (filed as Exhibit 3.1 to WRI’s Form 8-K on February 26, 2010 and incorporated herein by reference).
4.1
Form of Indenture between Weingarten Realty Investors and The Bank of New York Mellon Trust Company, N.A. (successor in interest to JPMorgan Chase Bank, National Association, formerly and Texas Commerce Bank National Association) (filed as Exhibit 4(a) to WRI’s Registration Statement on Form S-3 (No. 33-57659) dated February 10, 1995 and incorporated herein by reference).
4.2
Form of Indenture between Weingarten Realty Investors and The Bank of New York Mellon Trust Company, N.A. (successor in interest to JPMorgan Chase Bank, National Association, formerly and Texas Commerce Bank National Association) (filed as Exhibit 4(b) to WRI’s Registration Statement on Form S-3 (No. 33-57659) and incorporated herein by reference).
4.3
Form of Fixed Rate Senior Medium Term Note (filed as Exhibit 4.19 to WRI’s Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference).
4.4
Form of Floating Rate Senior Medium Term Note (filed as Exhibit 4.20 to WRI’s Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference).
4.5
Form of Fixed Rate Subordinated Medium Term Note (filed as Exhibit 4.21 to WRI’s Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference).
4.6
Form of Floating Rate Subordinated Medium Term Note (filed as Exhibit 4.22 to WRI’s Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference).
4.7
Statement of Designation of 6.50% Series F Cumulative Redeemable Preferred Shares (filed as Exhibit 3.1 to WRI’s Form 8-A dated January 29, 2007 and incorporated herein by reference).
4.8
6.50% Series F Cumulative Redeemable Preferred Share Certificate (filed as Exhibit 4.2 to WRI’s Form 8-A dated January 29, 2007 and incorporated herein by reference).
4.9
Form of Receipt for Depositary Shares, each representing 1/100 of a share of 6.50% Series F Cumulative Redeemable Preferred Shares, par value $.03 per share (filed as Exhibit 4.3 to WRI’s Form 8-A dated January 29, 2007 and incorporated herein by reference).
4.10
Second Supplemental Indenture, dated October 9, 2012, between Weingarten Realty Investors and The Bank of New York Trust Company, National Association (successor to J.P. Morgan Chase Company, National Association) (filed as Exhibit 4.1 to WRI’s Form 8-K on October 9, 2012 and incorporated herein by reference).
4.11
Form of 3.375% Senior Note due 2022 (filed as Exhibit 4.2 to WRI’s Form 8-K on October 9, 2012 and incorporated herein by reference).
4.12
Form of 3.50% Senior Note due 2023 (filed as Exhibit 4.1 to WRI’s Form 8-K on March 22, 2013 and incorporated herein by reference).
4.13
Form of 4.450% Senior Note due 2024 (filed as Exhibit 4.1 to WRI’s Form 8-K on October 15, 2013 and incorporated herein by reference).

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10.1†
2001 Long Term Incentive Plan (filed as Exhibit 10.7 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference).
10.2†
Restatement of the Weingarten Realty Investors Supplemental Executive Retirement Plan dated August 4, 2006 (filed as Exhibit 10.35 to WRI’s Form 10-Q for the quarter ended September 30, 2006 and incorporated herein by reference).
10.3†
Restatement of the Weingarten Realty Investors Deferred Compensation Plan dated August 4, 2006 (filed as Exhibit 10.36 to WRI’s Form 10-Q for the quarter ended September 30, 2006 and incorporated herein by reference).
10.4†
Restatement of the Weingarten Realty Investors Retirement Benefit Restoration Plan dated August 4, 2006 (filed as Exhibit 10.37 to WRI’s Form 10-Q for the quarter ended September 30, 2006 and incorporated herein by reference).
10.5†
Amendment No. 1 to the Weingarten Realty Investors Supplemental Executive Retirement Plan dated December 15, 2006 (filed as Exhibit 10.38 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2006 and incorporated herein by reference).
10.6†
Amendment No. 1 to the Weingarten Realty Investors Retirement Benefit Restoration Plan dated December 15, 2006 (filed as Exhibit 10.39 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2006 and incorporated herein by reference).
10.7†
Amendment No. 1 to the Weingarten Realty Investors Deferred Compensation Plan dated December 15, 2006 (filed as Exhibit 10.40 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2006 and incorporated herein by reference).
10.8†
Amendment No. 2 to the Weingarten Realty Investors Retirement Benefit Restoration Plan dated November 9, 2007 (filed as Exhibit 10.43 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2007 and incorporated herein by reference).
10.9†
Amendment No. 2 to the Weingarten Realty Investors Deferred Compensation Plan dated November 9, 2007 (filed as Exhibit 10.44 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2007 and incorporated herein by reference).
10.10†
Amendment No. 2 to the Weingarten Realty Investors Supplemental Executive Retirement Plan dated November 9, 2007 (filed as Exhibit 10.45 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2007 and incorporated herein by reference).
10.11†
Amendment No. 3 to the Weingarten Realty Investors Retirement Benefit Restoration Plan dated November 17, 2008 (filed as Exhibit 10.1 to WRI’s Form 8-K on December 4, 2008 and incorporated herein by reference).
10.12†
Amendment No. 3 to the Weingarten Realty Investors Deferred Compensation Plan dated November 17, 2008 (filed as Exhibit 10.2 to WRI’s Form 8-K on December 4, 2008 and incorporated herein by reference).
10.13†
Amendment No. 3 to the Weingarten Realty Investors Supplemental Executive Retirement Plan dated November 17, 2008 (filed as Exhibit 10.3 to WRI’s Form 8-K on December 4, 2008 and incorporated herein by reference).
10.14†
Amendment No. 1 to the Weingarten Realty Investors 2001 Long Term Incentive Plan dated November 17, 2008 (filed as Exhibit 10.4 to WRI’s Form 8-K on December 4, 2008 and incorporated herein by reference).
10.15†
Severance and Change to Control Agreement for Johnny Hendrix dated November 11, 1998 (filed as Exhibit 10.54 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).
10.16†
Severance and Change to Control Agreement for Stephen C. Richter dated November 11, 1998 (filed as Exhibit 10.55 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).
10.17†
Amendment No. 1 to Severance and Change to Control Agreement for Johnny Hendrix dated December 20, 2008 (filed as Exhibit 10.56 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).
10.18†
Amendment No. 1 to Severance and Change to Control Agreement for Stephen Richter dated December 31, 2008 (filed as Exhibit 10.57 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference).
10.19
Promissory Note with Reliance Trust Company, Trustee of the Trust under the Weingarten Realty Investors Deferred Compensation Plan, Supplemental Executive Retirement Plan and Retirement Benefit Restoration Plan dated March 12, 2009 (filed as Exhibit 10.57 to WRI’s Form 10-Q for the quarter ended March 31, 2009 and incorporated herein by reference).
10.20†
First Amendment to the Weingarten Realty Retirement Plan, amended and restated, dated December 2, 2009 (filed as Exhibit 10.51 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference).

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10.21†
First Amendment to the Master Nonqualified Plan Trust Agreement dated March 12, 2009 (filed as Exhibit 10.53 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference).
10.22†
Second Amendment to the Master Nonqualified Plan Trust Agreement dated August 4, 2009 (filed as Exhibit 10.54 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference).
10.23†
Non-Qualified Plan Trust Agreement for Recordkept Plans dated September 1, 2009 (filed as Exhibit 10.55 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference).
10.24†
Amended and Restated 2010 Long-Term Incentive Plan (filed as Exhibit 99.1 to WRI’s Form 8-K dated April 26, 2010 and incorporated herein by reference).
10.25†
Amendment No. 4 to the Weingarten Realty Investors Deferred Compensation Plan dated February 26, 2010 (filed as Exhibit 10.57 to WRI’s Form 10-Q for the quarter ended March 31, 2010 and incorporated herein by reference).
10.26†
Amendment No. 4 to the Weingarten Realty Investors Supplemental Executive Retirement Plan dated May 6, 2010 (filed as Exhibit 10.58 to WRI’s Form 10-Q for the quarter ended March 31, 2010 and incorporated herein by reference).
10.27
First Amendment to Promissory Note with Reliance Trust Company, Trustee of the Master Nonqualified Plan Trust under Weingarten Realty Investors Supplemental Executive Retirement Plan and Weingarten Realty Investors Retirement Benefit Restoration Plan dated March 11, 2010 (filed as Exhibit 10.59 to WRI’s Form 10-Q for the quarter ended June 30, 2010 and incorporated herein by reference).
10.28†
2002 WRI Employee Share Purchase Plan dated May 6, 2003 (filed as Exhibit 10.60 to WRI’s Form 10-Q for the quarter ended June 30, 2010 and incorporated herein by reference).
10.29†
Amended and Restated 2002 WRI Employee Share Purchase Plan dated May 10, 2010 (filed as Exhibit 10.61 to WRI’s Form 10-Q for the quarter ended June 30, 2010 and incorporated herein by reference).
10.30
Fixed Rate Promissory Note with JPMorgan Chase Bank, National Association dated May 11, 2010 (filed as Exhibit 10.62 to WRI’s Form 10-Q for the quarter ended June 30, 2010 and incorporated herein by reference).
10.31†
Weingarten Realty Investors Executive Medical Reimbursement Plan and Summary Plan Description (filed as Exhibit 10.59 to WRI’s Annual Report on Form 10-K dated December 31, 2010 and incorporated herein by reference).
10.32
Second Amendment to Promissory Note with Reliance Trust Company, Trustee of the Master Nonqualified Plan Trust under the Weingarten Realty Investors Supplemental Executive Retirement Plan and Weingarten Realty Investors Retirement Benefit Restoration Plan dated March 11, 2011 (filed as Exhibit 10.58 to WRI’s Form 10-Q for the quarter ended March 31, 2011 and incorporated herein by reference).
10.33†
Second Amendment to the Weingarten Realty Retirement Plan dated March 14, 2011 (filed as Exhibit 10.59 to WRI’s Form 10-Q for the quarter ended March 31, 2011 and incorporated herein by reference).
10.34†
Third Amendment to the Weingarten Realty Retirement Plan dated May 4, 2011 (filed as Exhibit 10.60 to WRI’s Form 10-Q for the quarter ended March 31, 2011 and incorporated herein by reference).
10.35†
Third Amendment to the Master Nonqualified Plan Trust Agreement dated April 26, 2011 (filed as Exhibit 10.1 to WRI’s Form 10-Q for the quarter ended June 30, 2011 and incorporated herein by reference).
10.36
Amended and Restated Credit Agreement dated September 30, 2011 (filed as Exhibit 10.1 to WRI’s Form 8-K on October 4, 2011 and incorporated herein by reference).
10.37
Credit Agreement dated August 29, 2011 among Weingarten Realty Investors, the Lenders Party Hereto and The Bank of Nova Scotia, as Administrative Agent (filed as Exhibit 10.1 to WRI’s Form 8-K on August 31, 2011 and incorporated herein by reference).
10.38
Credit Agreement Note dated August 29, 2011 with The Bank of Nova Scotia (filed as Exhibit 10.2 to WRI’s Form 8-K on August 31, 2011 and incorporated herein by reference).
10.39
Credit Agreement Note dated August 29, 2011 with Compass Bank (filed as Exhibit 10.3 to WRI’s Form 8-K on August 31, 2011 and incorporated herein by reference).
10.40
Credit Agreement Note dated August 29, 2011 with PNC Bank, National Association (filed as Exhibit 10.4 to WRI’s Form 8-K on August 31, 2011 and incorporated herein by reference).
10.41
Credit Agreement Note dated August 29, 2011 with Sumitomo Mitsui Banking Corporation (filed as Exhibit 10.5 to WRI’s Form 8-K on August 31, 2011 and incorporated herein by reference).

92

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10.42
Credit Agreement Note dated August 29, 2011 U.S. Bank National Association (filed as Exhibit 10.6 to WRI’s Form 8-K on August 31, 2011 and incorporated herein by reference).
10.43
Guaranty associated with Credit Agreement among Weingarten Realty Investors, the Lenders Party Hereto and The Bank of Nova Scotia, as Administrative Agent, dated August 29, 2011 (filed as Exhibit 10.7 to WRI’s Form 8-K on August 31, 2011 and incorporated herein by reference).
10.44
Amendment Agreement dated September 30, 2011 to Amended and Restated Credit Agreement dated September 30, 2011 (filed as Exhibit 10.70 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2011 and incorporated herein by reference).
10.45
Amendment Agreement dated November 14, 2011 to the Credit Agreement dated August 29, 2011 among Weingarten Realty Investors, the Lenders Party Hereto and The Bank of Nova Scotia, as Administrative Agent (filed as Exhibit 10.71 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2011 and incorporated herein by reference).
10.46
Guaranty dated November 14, 2011 associated with Credit Agreement among Weingarten Realty Investors, the Lenders Party Hereto and The Bank of Nova Scotia, as Administrative Agent, dated August 29, 2011 (filed as Exhibit 10.72 to WRI’s Annual Report on Form 10-K for the year ended December 31, 2011 and incorporated herein by reference).
10.47
Third Amendment to Promissory Note with Reliance Trust Company, Trustee of the Master Nonqualified Plan Trust under the Weingarten Realty Investors Supplemental Executive Retirement Plan and Weingarten Realty Investors Retirement Benefit Restoration Plan dated February 15, 2012 (filed as Exhibit 10.1 to WRI's Form 10-Q for the quarter ended March 31, 2012 and incorporated herein by reference).
10.48†
Fourth Amendment to the Weingarten Realty Retirement Plan dated March 2, 2012 (filed as Exhibit 10.2 to WRI's Form 10-Q for the quarter ended March 31, 2012 and incorporated herein by reference).
10.49
Purchase and Sale Agreement dated April 10, 2012 (filed as Exhibit 10.1 to WRI's Form 8-K on April 12, 2012 and incorporated herein by reference).
10.50†
Amendment No. 4 to the Weingarten Realty Investors Retirement Benefit Restoration Plan dated August 10, 2012 (filed as Exhibit 10.1 to WRI's Form 10-Q for the quarter ended September 30, 2012 and incorporated herein by reference).
10.51†
Amendment No. 5 to the Weingarten Realty Investors Supplemental Executive Retirement Plan dated August 10, 2012 (filed as Exhibit 10.2 to WRI's Form 10-Q for the quarter ended September 30, 2012 and incorporated herein by reference).
10.52
Assignment and Assumption dated September 6, 2012 of the Amended and Restated Credit Agreement dated September 30, 2011 (filed as Exhibit 10.3 to WRI's Form 10-Q for the quarter ended September 30, 2012 and incorporated herein by reference).
10.53†
Master Nonqualified Plan Trust Agreement dated August 23, 2006 (filed as Exhibit 10.53 to WRI's Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference).
10.54†
Restatement of the Weingarten Realty Retirement Plan dated November 17, 2008 (filed as Exhibit 10.54 to WRI's Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference).
10.55
Amendment Agreement dated April 18, 2013 of the Amended and Restated Credit Agreement dated September 30, 2011 (filed as Exhibit 10.1 to WRI's Form 10-Q for the quarter ended March 31, 2013 and incorporated herein by reference).
10.56
Fourth Amendment to Promissory Note with Reliance Trust Company, Trustee of the Master Nonqualified Plan Trust under the Weingarten Realty Investors Supplemental Executive Retirement Plan and Weingarten Realty Investors Retirement Benefit Restoration Plan dated March 11, 2013(filed as Exhibit 10.2 to WRI's Form 10-Q for the quarter ended March 31, 2013 and incorporated herein by reference).
10.57†
Restatement of the Weingarten Realty Investors Retirement Plan dated December 23, 2013 (filed as Exhibit 10.57 to WRI's Annual Report on Form 10-K for the year ended December 31, 2013 and incorporated herein by reference).
10.58
Fifth Amendment to Promissory Note with Reliance Trust Company, Trustee of the Master Nonqualified Plan Trust under the Weingarten Realty Investors Supplemental Executive Retirement Plan and Weingarten Realty Investors Retirement Benefit Restoration Plan dated March 11, 2014(filed as Exhibit 10.1 to WRI's Form 10-Q for the quarter ended March 31, 2014 and incorporated herein by reference).
10.59†*
First Amendment to Weingarten Realty Investors Retirement Plan dated December 16, 2014.
12.1*
Computation of Ratios.
21.1*
Listing of Subsidiaries of the Registrant.

93

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23.1*
Consent of Deloitte & Touche LLP.
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.

94

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and 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
 
 
 
 
By:
/s/  Andrew M. Alexander
 
 
Andrew M. Alexander
 
 
Chief Executive Officer
Date: February 19, 2015
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each of Weingarten Realty Investors, a real estate investment trust organized under the Texas Business Organizations Code, and the undersigned trust managers and officers of Weingarten Realty Investors hereby constitute and appoint Andrew M. Alexander, Stanford Alexander, Stephen C. Richter and Joe D. Shafer or any one of them, its or his true and lawful attorney-in-fact and agent, for it or him and in its or his name, place and stead, in any and all capacities, with full power to act alone, to sign any and all amendments to this report, and to file each such amendment to the report, with all exhibits thereto, and any and all other documents in connection therewith, with the Securities and Exchange Commission, hereby granting unto said attorney-in-fact and agent full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises as fully to all intents and purposes as it or he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.

95

Table of Contents

Pursuant to the requirement of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
 
Signature
Title
Date
 
 
 
 
By:
/s/ Andrew M. Alexander
Chief Executive Officer,
President and Trust Manager
February 19, 2015
 
Andrew M. Alexander
 
 
 
 
By:
/s/ Stanford Alexander
Chairman
and Trust Manager
February 19, 2015
 
Stanford Alexander
 
 
 
 
By:
/s/ Shelaghmichael Brown
Trust Manager
February 19, 2015
 
Shelaghmichael Brown
 
 
 
 
By:
/s/ James W. Crownover
Trust Manager
February 19, 2015
 
James W. Crownover
 
 
 
 
By:
/s/ Robert J. Cruikshank
Trust Manager
February 19, 2015
 
Robert J. Cruikshank
 
 
 
 
By:
/s/ Melvin Dow
Trust Manager
February 19, 2015
 
Melvin Dow
 
 
 
 
By:
/s/ Stephen A. Lasher
Trust Manager
February 19, 2015
 
Stephen A. Lasher
 
 
 
 
By:
/s/ Stephen C. Richter
Executive Vice President and
Chief Financial Officer
February 19, 2015
 
Stephen C. Richter
 
 
 
 
By:
/s/ Thomas L. Ryan
Trust Manager
February 19, 2015
 
Thomas L. Ryan
 
 
 
 
By:
/s/ Douglas W. Schnitzer
Trust Manager
February 19, 2015
 
Douglas W. Schnitzer
 
 
 
 
By:
/s/ Joe D. Shafer
Senior Vice President/Chief Accounting Officer
(Principal Accounting Officer)
February 19, 2015
 
Joe D. Shafer
 
 
 
 
By:
/s/ C. Park Shaper
Trust Manager
February 19, 2015
 
C. Park Shaper
 
 
 
 
By:
/s/ Marc J. Shapiro
Trust Manager
February 19, 2015
 
Marc J. Shapiro

96

Table of Contents

Schedule II
WEINGARTEN REALTY INVESTORS
VALUATION AND QUALIFYING ACCOUNTS
December 31, 2014, 2013, and 2012
(Amounts in thousands)
Description
 
Balance at
beginning
of period
 
Charged
to costs
and
expenses
 
Deductions(1)
 
Balance
at end of
period
2014
 
 
 
 
 
 
 
 
Allowance for Doubtful Accounts
 
$
9,386

 
$
1,914

 
$
3,620

 
$
7,680

Tax Valuation Allowance
 
30,541

 
2,239

 
5,241

 
27,539

2013
 
 
 
 
 
 
 
 
Allowance for Doubtful Accounts
 
$
12,127

 
$
1,420

 
$
4,161

 
$
9,386

Tax Valuation Allowance
 
28,376

 
2,243

 
78

 
30,541

2012
 
 
 
 
 
 
 
 
Allowance for Doubtful Accounts
 
$
11,301

 
$
7,157

 
$
6,331

 
$
12,127

Tax Valuation Allowance
 
24,595

 
3,781

 

 
28,376

___________________
(1)
Write-offs of amounts previously reserved.

97

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Schedule III

WEINGARTEN REALTY INVESTORS
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2014
(Amounts in thousands)
 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and
Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
Centers:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10-Federal Shopping Center
 
$
1,791

 
$
7,470

 
$
1,090

 
$
1,791

 
$
8,560

 
$
10,351

 
$
(7,155
)
 
$
3,196

 
$
(7,233
)
 
03/20/2008
1919 North Loop West
 
1,334

 
8,451

 
11,592

 
1,337

 
20,040

 
21,377

 
(8,925
)
 
12,452

 

 
12/05/2006
580 Market Place
 
3,892

 
15,570

 
3,534

 
3,889

 
19,107

 
22,996

 
(6,463
)
 
16,533

 
(16,048
)
 
04/02/2001
8000 Sunset Strip Shopping Center
 
18,320

 
73,431

 
2,334

 
18,320

 
75,765

 
94,085

 
(5,469
)
 
88,616

 

 
06/27/2012
Alabama Shepherd Shopping Center
 
637

 
2,026

 
7,882

 
1,062

 
9,483

 
10,545

 
(4,390
)
 
6,155

 

 
04/30/2004
Argyle Village Shopping Center
 
4,524

 
18,103

 
3,807

 
4,526

 
21,908

 
26,434

 
(7,922
)
 
18,512

 

 
11/30/2001
Arrowhead Festival Shopping Center
 
1,294

 
154

 
3,917

 
1,903

 
3,462

 
5,365

 
(1,445
)
 
3,920

 

 
12/31/2000
Avent Ferry Shopping Center
 
1,952

 
7,814

 
1,191

 
1,952

 
9,005

 
10,957

 
(3,576
)
 
7,381

 

 
04/04/2002
Bartlett Towne Center
 
3,479

 
14,210

 
1,208

 
3,443

 
15,454

 
18,897

 
(6,095
)
 
12,802

 
(784
)
 
05/15/2001
Bell Plaza
 
1,322

 
7,151

 
637

 
1,322

 
7,788

 
9,110

 
(3,852
)
 
5,258

 
(6,656
)
 
03/20/2008
Bellaire Blvd. Shopping Center
 
124

 
37

 
3

 
125

 
39

 
164

 
(37
)
 
127

 

 
11/13/2008
Best in the West
 
13,191

 
77,159

 
7,249

 
13,194

 
84,405

 
97,599

 
(21,502
)
 
76,097

 

 
04/28/2005
Blalock Market at I-10
 

 
4,730

 
2,033

 

 
6,763

 
6,763

 
(4,491
)
 
2,272

 

 
12/31/1990
Boca Lyons Plaza
 
3,676

 
14,706

 
2,855

 
3,651

 
17,586

 
21,237

 
(5,645
)
 
15,592

 

 
08/17/2001
Boswell Towne Center
 
1,488

 

 
1,723

 
615

 
2,596

 
3,211

 
(1,395
)
 
1,816

 

 
12/31/2003
Braeswood Square Shopping Center
 

 
1,421

 
1,197

 

 
2,618

 
2,618

 
(2,397
)
 
221

 

 
05/28/1969
Broadway Marketplace
 
898

 
3,637

 
1,010

 
906

 
4,639

 
5,545

 
(2,713
)
 
2,832

 

 
12/16/1993
Broadway Shopping Center
 
234

 
3,166

 
799

 
235

 
3,964

 
4,199

 
(2,621
)
 
1,578

 
(2,610
)
 
03/20/2008
Brookwood Marketplace
 
7,050

 
15,134

 
7,239

 
7,511

 
21,912

 
29,423

 
(4,686
)
 
24,737

 
(17,924
)
 
08/22/2006
Brookwood Square Shopping Center
 
4,008

 
19,753

 
(3,131
)
 
4,008

 
16,622

 
20,630

 
(3,610
)
 
17,020

 

 
12/16/2003
Brownsville Commons
 
1,333

 
5,536

 
315

 
1,333

 
5,851

 
7,184

 
(1,298
)
 
5,886

 

 
05/22/2006
Buena Vista Marketplace
 
1,958

 
7,832

 
1,189

 
1,956

 
9,023

 
10,979

 
(3,277
)
 
7,702

 

 
04/02/2001
Bull City Market
 
930

 
6,651

 
654

 
930

 
7,305

 
8,235

 
(1,715
)
 
6,520

 
(3,572
)
 
06/10/2005
Camelback Village Square
 

 
8,720

 
1,267

 

 
9,987

 
9,987

 
(5,010
)
 
4,977

 

 
09/30/1994
Camp Creek Marketplace II
 
6,169

 
32,036

 
1,460

 
4,697

 
34,968

 
39,665

 
(7,587
)
 
32,078

 
(19,833
)
 
08/22/2006
Capital Square
 
1,852

 
7,406

 
1,410

 
1,852

 
8,816

 
10,668

 
(3,551
)
 
7,117

 

 
04/04/2002
Centerwood Plaza
 
915

 
3,659

 
2,379

 
914

 
6,039

 
6,953

 
(2,049
)
 
4,904

 

 
04/02/2001
Charleston Commons Shopping Center
 
23,230

 
36,877

 
2,186

 
23,210

 
39,083

 
62,293

 
(8,366
)
 
53,927

 

 
12/20/2006
Cherry Creek Retail Center
 
5,416

 
14,624

 

 
5,416

 
14,624

 
20,040

 
(2,309
)
 
17,731

 

 
06/16/2011

98

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Schedule III

 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and
Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
Chino Hills Marketplace
 
$
7,218

 
$
28,872

 
$
11,424

 
$
7,234

 
$
40,280

 
$
47,514

 
$
(16,385
)
 
$
31,129

 
$

 
08/20/2002
Citadel Building
 
3,236

 
6,168

 
7,980

 
534

 
16,850

 
17,384

 
(14,180
)
 
3,204

 

 
12/30/1975
College Park Shopping Center
 
2,201

 
8,845

 
7,137

 
2,641

 
15,542

 
18,183

 
(9,670
)
 
8,513

 
(11,004
)
 
11/16/1998
Colonial Plaza
 
10,806

 
43,234

 
13,365

 
10,813

 
56,592

 
67,405

 
(22,277
)
 
45,128

 

 
02/21/2001
Countryside Centre
 
15,523

 
29,818

 
8,868

 
15,559

 
38,650

 
54,209

 
(7,992
)
 
46,217

 

 
07/06/2007
Creekside Center
 
1,732

 
6,929

 
1,991

 
1,730

 
8,922

 
10,652

 
(3,569
)
 
7,083

 
(7,728
)
 
04/02/2001
Cullen Plaza Shopping Center
 
106

 
2,841

 
452

 
106

 
3,293

 
3,399

 
(2,639
)
 
760

 
(5,987
)
 
03/20/2008
Cypress Pointe
 
3,468

 
8,700

 
1,381

 
3,793

 
9,756

 
13,549

 
(5,809
)
 
7,740

 

 
04/04/2002
Dallas Commons Shopping Center
 
1,582

 
4,969

 
94

 
1,582

 
5,063

 
6,645

 
(1,092
)
 
5,553

 

 
09/14/2006
Danville Plaza Shopping Center
 

 
3,360

 
2,322

 

 
5,682

 
5,682

 
(5,006
)
 
676

 

 
09/30/1960
DDS Office Building
 
959

 
3,141

 

 
959

 
3,141

 
4,100

 
(181
)
 
3,919

 

 
10/07/2013
Desert Village Shopping Center
 
3,362

 
14,969

 
1,167

 
3,362

 
16,136

 
19,498

 
(1,839
)
 
17,659

 

 
10/28/2010
Discovery Plaza
 
2,193

 
8,772

 
1,091

 
2,191

 
9,865

 
12,056

 
(3,444
)
 
8,612

 

 
04/02/2001
Eastdale Shopping Center
 
1,423

 
5,809

 
1,958

 
1,417

 
7,773

 
9,190

 
(3,985
)
 
5,205

 

 
12/31/1997
Eastern Horizon
 
10,282

 
16

 
(279
)
 
1,569

 
8,450

 
10,019

 
(4,669
)
 
5,350

 

 
12/31/2002
Edgewater Marketplace
 
4,821

 
11,225

 
395

 
4,821

 
11,620

 
16,441

 
(1,403
)
 
15,038

 
(17,600
)
 
11/19/2010
El Camino Promenade
 
4,431

 
20,557

 
4,217

 
4,429

 
24,776

 
29,205

 
(7,648
)
 
21,557

 

 
05/21/2004
Embassy Lakes Shopping Center
 
2,803

 
11,268

 
845

 
2,803

 
12,113

 
14,916

 
(3,755
)
 
11,161

 

 
12/18/2002
Entrada de Oro Plaza Shopping Center
 
6,041

 
10,511

 
1,693

 
6,115

 
12,130

 
18,245

 
(3,170
)
 
15,075

 

 
01/22/2007
Epic Village St. Augustine
 
283

 
1,171

 
4,065

 
320

 
5,199

 
5,519

 
(2,260
)
 
3,259

 

 
09/30/2009
Falls Pointe Shopping Center
 
3,535

 
14,289

 
407

 
3,522

 
14,709

 
18,231

 
(4,628
)
 
13,603

 

 
12/17/2002
Festival on Jefferson Court
 
5,041

 
13,983

 
2,791

 
5,022

 
16,793

 
21,815

 
(5,191
)
 
16,624

 

 
12/22/2004
Fiesta Market Place
 
137

 
429

 
8

 
137

 
437

 
574

 
(431
)
 
143

 
(1,524
)
 
03/20/2008
Fiesta Trails
 
8,825

 
32,790

 
2,909

 
8,825

 
35,699

 
44,524

 
(11,598
)
 
32,926

 

 
09/30/2003
Flamingo Pines Plaza
 
10,403

 
35,014

 
(14,214
)
 
5,335

 
25,868

 
31,203

 
(6,099
)
 
25,104

 

 
01/28/2005
Fountain Plaza
 
1,319

 
5,276

 
1,424

 
1,095

 
6,924

 
8,019

 
(3,651
)
 
4,368

 

 
03/10/1994
Francisco Center
 
1,999

 
7,997

 
4,525

 
2,403

 
12,118

 
14,521

 
(7,957
)
 
6,564

 
(9,996
)
 
11/16/1998
Freedom Centre
 
2,929

 
15,302

 
5,568

 
6,944

 
16,855

 
23,799

 
(4,632
)
 
19,167

 
(717
)
 
06/23/2006
Galleria Shopping Center
 
10,795

 
10,339

 
8,487

 
10,805

 
18,816

 
29,621

 
(3,925
)
 
25,696

 
(18,200
)
 
12/11/2006
Galveston Place
 
2,713

 
5,522

 
5,994

 
3,279

 
10,950

 
14,229

 
(8,418
)
 
5,811

 

 
11/30/1983
Gateway Plaza
 
4,812

 
19,249

 
4,056

 
4,808

 
23,309

 
28,117

 
(8,099
)
 
20,018

 
(21,787
)
 
04/02/2001
Gateway Station
 
1,622

 
3

 
9,401

 
1,921

 
9,105

 
11,026

 
(3,082
)
 
7,944

 

 
09/30/2009
Glenbrook Square Shopping Center
 
632

 
3,576

 
709

 
632

 
4,285

 
4,917

 
(2,221
)
 
2,696

 
(5,056
)
 
03/20/2008
Grayson Commons
 
3,180

 
9,023

 
217

 
3,163

 
9,257

 
12,420

 
(2,426
)
 
9,994

 
(5,565
)
 
11/09/2004
Greenhouse Marketplace
 
4,607

 
22,771

 
3,435

 
4,750

 
26,063

 
30,813

 
(7,656
)
 
23,157

 

 
01/28/2004

99

Table of Contents

Schedule III

 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and
Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
Griggs Road Shopping Center
 
$
257

 
$
2,303

 
$
(252
)
 
$
257

 
$
2,051

 
$
2,308

 
$
(1,881
)
 
$
427

 
$
(3,884
)
 
03/20/2008
Hallmark Town Center
 
1,368

 
5,472

 
1,101

 
1,367

 
6,574

 
7,941

 
(2,607
)
 
5,334

 

 
04/02/2001
Harrisburg Plaza
 
1,278

 
3,924

 
933

 
1,278

 
4,857

 
6,135

 
(4,055
)
 
2,080

 
(10,418
)
 
03/20/2008
HEB - Dairy Ashford & Memorial
 
1,717

 
4,234

 

 
1,717

 
4,234

 
5,951

 
(533
)
 
5,418

 

 
03/06/2012
Heights Plaza Shopping Center
 
58

 
699

 
2,494

 
928

 
2,323

 
3,251

 
(1,394
)
 
1,857

 

 
06/30/1995
High House Crossing
 
2,576

 
10,305

 
467

 
2,576

 
10,772

 
13,348

 
(3,680
)
 
9,668

 

 
04/04/2002
Highland Square
 

 

 
1,887

 

 
1,887

 
1,887

 
(472
)
 
1,415

 

 
10/06/1959
Hope Valley Commons
 
2,439

 
8,487

 
349

 
2,439

 
8,836

 
11,275

 
(1,070
)
 
10,205

 

 
08/31/2010
Humblewood Shopping Center
 
2,215

 
4,724

 
3,174

 
1,166

 
8,947

 
10,113

 
(8,207
)
 
1,906

 
(12,705
)
 
03/09/1977
I45/Telephone Rd.
 
678

 
11,182

 
596

 
678

 
11,778

 
12,456

 
(5,769
)
 
6,687

 
(12,758
)
 
03/20/2008
Independence Plaza I
 
12,795

 
23,063

 
191

 
12,795

 
23,254

 
36,049

 
(1,651
)
 
34,398

 
(18,112
)
 
06/11/2013
Independence Plaza II
 
6,555

 
8,564

 
1,275

 
6,555

 
9,839

 
16,394

 
(638
)
 
15,756

 

 
06/11/2013
Jess Ranch Marketplace
 
8,750

 
25,560

 
296

 
8,750

 
25,856

 
34,606

 
(1,174
)
 
33,432

 

 
12/23/2013
Jess Ranch Marketplace Phase III
 
8,431

 
21,470

 
91

 
8,431

 
21,561

 
29,992

 
(991
)
 
29,001

 

 
12/23/2013
Lake Pointe Market
 
1,404

 

 
4,454

 
1,960

 
3,898

 
5,858

 
(2,167
)
 
3,691

 

 
12/31/2004
Lakeside Marketplace
 
6,064

 
22,989

 
3,348

 
6,150

 
26,251

 
32,401

 
(6,700
)
 
25,701

 
(16,394
)
 
08/22/2006
Largo Mall
 
10,817

 
40,906

 
3,847

 
10,810

 
44,760

 
55,570

 
(12,926
)
 
42,644

 

 
03/01/2004
Laveen Village Marketplace
 
1,190

 

 
5,204

 
1,006

 
5,388

 
6,394

 
(3,011
)
 
3,383

 

 
08/15/2003
Lawndale Shopping Center
 
82

 
927

 
727

 
82

 
1,654

 
1,736

 
(1,091
)
 
645

 
(3,635
)
 
03/20/2008
League City Plaza
 
1,918

 
7,592

 
874

 
1,918

 
8,466

 
10,384

 
(4,665
)
 
5,719

 
(10,085
)
 
03/20/2008
Leesville Towne Centre
 
7,183

 
17,162

 
1,346

 
7,223

 
18,468

 
25,691

 
(5,238
)
 
20,453

 

 
01/30/2004
Little York Plaza Shopping Center
 
342

 
5,170

 
1,753

 
342

 
6,923

 
7,265

 
(5,677
)
 
1,588

 
(4,396
)
 
03/20/2008
Lyons Avenue Shopping Center
 
249

 
1,183

 
54

 
249

 
1,237

 
1,486

 
(1,042
)
 
444

 
(2,644
)
 
03/20/2008
Madera Village Shopping Center
 
3,788

 
13,507

 
1,239

 
3,816

 
14,718

 
18,534

 
(3,446
)
 
15,088

 

 
03/13/2007
Market at Town Center - Sugarland
 
8,600

 
26,627

 
23,907

 
8,600

 
50,534

 
59,134

 
(22,702
)
 
36,432

 

 
12/23/1996
Market at Westchase Shopping Center
 
1,199

 
5,821

 
2,632

 
1,415

 
8,237

 
9,652

 
(5,683
)
 
3,969

 

 
02/15/1991
Marketplace at Seminole Outparcel
 
1,000

 

 
1,499

 
1,046

 
1,453

 
2,499

 
(28
)
 
2,471

 

 
08/21/2006
Marketplace at Seminole Towne
 
15,067

 
53,743

 
6,144

 
21,665

 
53,289

 
74,954

 
(11,767
)
 
63,187

 
(38,305
)
 
08/21/2006
Markham West Shopping Center
 
2,694

 
10,777

 
4,080

 
2,696

 
14,855

 
17,551

 
(7,541
)
 
10,010

 

 
09/18/1998
Marshall's Plaza
 
1,802

 
12,315

 
661

 
1,804

 
12,974

 
14,778

 
(3,391
)
 
11,387

 

 
06/01/2005
Mendenhall Commons
 
2,655

 
9,165

 
653

 
2,677

 
9,796

 
12,473

 
(2,379
)
 
10,094

 

 
11/13/2008
Menifee Town Center
 
1,827

 
7,307

 
4,985

 
1,824

 
12,295

 
14,119

 
(4,302
)
 
9,817

 

 
04/02/2001
Millpond Center
 
3,155

 
9,706

 
1,564

 
3,161

 
11,264

 
14,425

 
(3,378
)
 
11,047

 

 
07/28/2005
Mohave Crossroads
 
3,953

 
63

 
35,919

 
3,128

 
36,807

 
39,935

 
(16,016
)
 
23,919

 

 
12/31/2009
Monte Vista Village Center
 
1,485

 
58

 
5,528

 
755

 
6,316

 
7,071

 
(3,960
)
 
3,111

 

 
12/31/2004

100

Table of Contents

Schedule III

 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and
Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
Moore Plaza
 
$
6,445

 
$
26,140

 
$
11,033

 
$
6,487

 
$
37,131

 
$
43,618

 
$
(17,502
)
 
$
26,116

 
$

 
03/20/1998
Mueller Regional Retail Center
 
10,382

 
56,303

 
165

 
10,382

 
56,468

 
66,850

 
(3,159
)
 
63,691

 
(34,300
)
 
10/03/2013
North Creek Plaza
 
6,915

 
25,625

 
4,200

 
6,954

 
29,786

 
36,740

 
(8,848
)
 
27,892

 

 
08/19/2004
North Towne Plaza
 
960

 
3,928

 
7,405

 
879

 
11,414

 
12,293

 
(7,708
)
 
4,585

 
(9,676
)
 
02/15/1990
North Towne Plaza
 
6,646

 
99

 
1,526

 
1,005

 
7,266

 
8,271

 
(1,680
)
 
6,591

 

 
04/01/2010
Northbrook Shopping Center
 
1,629

 
4,489

 
3,037

 
1,713

 
7,442

 
9,155

 
(6,788
)
 
2,367

 
(9,082
)
 
11/06/1967
Northwoods Shopping Center
 
1,768

 
7,071

 
421

 
1,772

 
7,488

 
9,260

 
(2,496
)
 
6,764

 

 
04/04/2002
Oak Forest Shopping Center
 
760

 
2,726

 
4,929

 
748

 
7,667

 
8,415

 
(5,744
)
 
2,671

 
(7,904
)
 
12/30/1976
Oak Grove Market Center
 
5,758

 
10,508

 
940

 
5,861

 
11,345

 
17,206

 
(2,334
)
 
14,872

 
(7,358
)
 
06/15/2007
Oracle Crossings
 
4,614

 
18,274

 
28,966

 
10,582

 
41,272

 
51,854

 
(8,440
)
 
43,414

 

 
01/22/2007
Oracle Wetmore Shopping Center
 
24,686

 
26,878

 
6,975

 
13,813

 
44,726

 
58,539

 
(9,114
)
 
49,425

 

 
01/22/2007
Overton Park Plaza
 
9,266

 
37,789

 
11,729

 
9,264

 
49,520

 
58,784

 
(14,192
)
 
44,592

 

 
10/24/2003
Palmer Plaza
 
765

 
3,081

 
2,558

 
827

 
5,577

 
6,404

 
(3,808
)
 
2,596

 

 
07/31/1980
Palmilla Center
 
1,258

 

 
13,013

 
2,882

 
11,389

 
14,271

 
(6,534
)
 
7,737

 

 
12/31/2002
Palms of Carrollwood
 
3,995

 
16,390

 
710

 
3,995

 
17,100

 
21,095

 
(1,769
)
 
19,326

 

 
12/23/2010
Paradise Marketplace
 
2,153

 
8,612

 
(2,091
)
 
1,197

 
7,477

 
8,674

 
(3,921
)
 
4,753

 

 
07/20/1995
Parliament Square II
 
2

 
10

 
1,183

 
3

 
1,192

 
1,195

 
(706
)
 
489

 

 
06/24/2005
Perimeter Village
 
29,701

 
42,337

 
3,551

 
34,404

 
41,185

 
75,589

 
(8,803
)
 
66,786

 
(26,058
)
 
07/03/2007
Phillips Crossing
 

 
1

 
28,208

 
872

 
27,337

 
28,209

 
(9,368
)
 
18,841

 

 
09/30/2009
Phoenix Office Building
 
1,696

 
3,255

 
1,164

 
1,773

 
4,342

 
6,115

 
(1,276
)
 
4,839

 

 
01/31/2007
Pike Center
 

 
40,537

 
2,035

 

 
42,572

 
42,572

 
(4,320
)
 
38,252

 

 
08/14/2012
Plantation Centre
 
3,463

 
14,821

 
1,849

 
3,471

 
16,662

 
20,133

 
(4,546
)
 
15,587

 

 
08/19/2004
Promenade 23
 
16,028

 
2,271

 
39

 
16,028

 
2,310

 
18,338

 
(381
)
 
17,957

 

 
03/25/2011
Prospector's Plaza
 
3,746

 
14,985

 
5,743

 
3,716

 
20,758

 
24,474

 
(5,928
)
 
18,546

 

 
04/02/2001
Pueblo Anozira Shopping Center
 
2,750

 
11,000

 
5,123

 
2,768

 
16,105

 
18,873

 
(8,661
)
 
10,212

 
(11,028
)
 
06/16/1994
Rainbow Plaza
 
6,059

 
24,234

 
2,742

 
6,081

 
26,954

 
33,035

 
(11,786
)
 
21,249

 

 
10/22/1997
Rainbow Plaza I
 
3,883

 
15,540

 
571

 
3,896

 
16,098

 
19,994

 
(5,782
)
 
14,212

 

 
12/28/2000
Raintree Ranch Center
 
11,442

 
595

 
17,553

 
10,983

 
18,607

 
29,590

 
(8,533
)
 
21,057

 

 
03/31/2008
Rancho Encanto
 
957

 
3,829

 
3,814

 
839

 
7,761

 
8,600

 
(4,783
)
 
3,817

 

 
04/28/1997
Rancho San Marcos Village
 
3,533

 
14,138

 
5,066

 
3,887

 
18,850

 
22,737

 
(6,000
)
 
16,737

 

 
02/26/2003
Rancho Towne & Country
 
1,161

 
4,647

 
728

 
1,166

 
5,370

 
6,536

 
(2,693
)
 
3,843

 

 
10/16/1995
Randalls Center/Kings Crossing
 
3,570

 
8,147

 
551

 
3,585

 
8,683

 
12,268

 
(5,202
)
 
7,066

 

 
11/13/2008
Red Mountain Gateway
 
2,166

 
89

 
9,457

 
2,737

 
8,975

 
11,712

 
(4,498
)
 
7,214

 

 
12/31/2003
Regency Centre
 
5,616

 
18,516

 
1,613

 
3,581

 
22,164

 
25,745

 
(5,288
)
 
20,457

 

 
07/28/2006
Reynolds Crossing
 
4,276

 
9,186

 
145

 
4,276

 
9,331

 
13,607

 
(2,018
)
 
11,589

 

 
09/14/2006

101

Table of Contents

Schedule III

 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and
Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
Richmond Square
 
$
1,993

 
$
953

 
$
13,571

 
$
14,512

 
$
2,005

 
$
16,517

 
$
(1,255
)
 
$
15,262

 
$

 
12/31/1996
Ridgeway Trace
 
26,629

 
544

 
20,369

 
15,573

 
31,969

 
47,542

 
(8,065
)
 
39,477

 

 
11/09/2006
River Oaks Shopping Center
 
1,354

 
1,946

 
403

 
1,363

 
2,340

 
3,703

 
(2,013
)
 
1,690

 

 
12/04/1992
River Oaks Shopping Center
 
3,534

 
17,741

 
35,453

 
4,207

 
52,521

 
56,728

 
(22,754
)
 
33,974

 

 
12/04/1992
River Point at Sheridan
 
28,898

 
4,042

 
4,226

 
9,360

 
27,806

 
37,166

 
(4,911
)
 
32,255

 
(6,720
)
 
04/01/2010
Roswell Corners
 
6,136

 
21,447

 
163

 
5,835

 
21,911

 
27,746

 
(6,392
)
 
21,354

 
(6,621
)
 
06/24/2004
Roswell Crossing Shopping Center
 
7,625

 
18,573

 
394

 
7,625

 
18,967

 
26,592

 
(2,123
)
 
24,469

 
(12,153
)
 
07/18/2012
San Marcos Plaza
 
1,360

 
5,439

 
528

 
1,358

 
5,969

 
7,327

 
(2,129
)
 
5,198

 

 
04/02/2001
Scottsdale Horizon
 

 
3,241

 
37,616

 
12,914

 
27,943

 
40,857

 
(800
)
 
40,057

 

 
01/22/2007
Sea Ranch Centre
 
11,977

 
4,219

 
969

 
11,977

 
5,188

 
17,165

 
(433
)
 
16,732

 

 
03/06/2013
Shoppes at Bears Path
 
3,252

 
5,503

 
1,260

 
3,290

 
6,725

 
10,015

 
(1,769
)
 
8,246

 

 
03/13/2007
Shoppes at Memorial Villages
 
1,417

 
4,786

 
7,723

 
3,332

 
10,594

 
13,926

 
(6,989
)
 
6,937

 

 
01/11/2012
Shoppes of South Semoran
 
4,283

 
9,785

 
(1,570
)
 
4,745

 
7,753

 
12,498

 
(1,757
)
 
10,741

 
(8,842
)
 
08/31/2007
Shops at Kirby Drive
 
1,201

 
945

 
276

 
1,202

 
1,220

 
2,422

 
(387
)
 
2,035

 

 
05/27/2008
Shops at Three Corners
 
6,215

 
9,303

 
5,490

 
6,224

 
14,784

 
21,008

 
(9,677
)
 
11,331

 

 
12/31/1989
Silver Creek Plaza
 
3,231

 
12,924

 
3,214

 
3,228

 
16,141

 
19,369

 
(6,059
)
 
13,310

 
(15,065
)
 
04/02/2001
Six Forks Shopping Center
 
6,678

 
26,759

 
5,607

 
6,728

 
32,316

 
39,044

 
(11,157
)
 
27,887

 

 
04/04/2002
South Fulton Crossing
 
14,373

 
154

 
(11,434
)
 
2,669

 
424

 
3,093

 
(2
)
 
3,091

 

 
01/10/2007
South Semoran - Pad
 
1,056

 

 
(129
)
 
927

 

 
927

 

 
927

 

 
09/06/2007
Southampton Center
 
4,337

 
17,349

 
2,829

 
4,333

 
20,182

 
24,515

 
(7,389
)
 
17,126

 
(19,555
)
 
04/02/2001
Southgate Shopping Center
 
571

 
3,402

 
5,559

 
1,152

 
8,380

 
9,532

 
(7,001
)
 
2,531

 

 
03/26/1958
Southgate Shopping Center
 
232

 
8,389

 
723

 
232

 
9,112

 
9,344

 
(5,666
)
 
3,678

 
(6,803
)
 
03/20/2008
Squaw Peak Plaza
 
816

 
3,266

 
3,225

 
818

 
6,489

 
7,307

 
(2,803
)
 
4,504

 

 
12/20/1994
Stella Link Shopping Center
 
227

 
423

 
1,429

 
294

 
1,785

 
2,079

 
(1,572
)
 
507

 

 
07/10/1970
Stella Link Shopping Center
 
2,602

 
1,418

 
(1,307
)
 
2,602

 
111

 
2,713

 
(19
)
 
2,694

 

 
08/21/2007
Stonehenge Market
 
4,740

 
19,001

 
2,212

 
4,740

 
21,213

 
25,953

 
(7,430
)
 
18,523

 

 
04/04/2002
Stony Point Plaza
 
3,489

 
13,957

 
11,341

 
3,453

 
25,334

 
28,787

 
(7,537
)
 
21,250

 
(11,402
)
 
04/02/2001
Summerhill Plaza
 
1,945

 
7,781

 
2,572

 
1,943

 
10,355

 
12,298

 
(4,394
)
 
7,904

 

 
04/02/2001
Sunset 19 Shopping Center
 
5,519

 
22,076

 
1,430

 
5,547

 
23,478

 
29,025

 
(8,025
)
 
21,000

 

 
10/29/2001
Surf City Crossing
 
3,220

 
52

 
5,028

 
2,655

 
5,645

 
8,300

 
(1,499
)
 
6,801

 

 
12/06/2006
Tates Creek Centre
 
4,802

 
25,366

 
1,543

 
5,766

 
25,945

 
31,711

 
(7,289
)
 
24,422

 

 
03/01/2004
Taylorsville Town Center
 
2,179

 
9,718

 
945

 
2,180

 
10,662

 
12,842

 
(3,242
)
 
9,600

 

 
12/19/2003
The Centre at Post Oak
 
13,731

 
115

 
23,705

 
17,874

 
19,677

 
37,551

 
(11,113
)
 
26,438

 

 
12/31/1996
The Commons at Dexter Lake
 
2,923

 
12,007

 
2,297

 
2,949

 
14,278

 
17,227

 
(4,639
)
 
12,588

 

 
11/13/2008
The Commons at Dexter Lake II
 
2,023

 
6,940

 
307

 
2,039

 
7,231

 
9,270

 
(1,702
)
 
7,568

 

 
11/13/2008

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Table of Contents

Schedule III

 
 
Initial Cost to Company
 
 
 
Gross Amounts Carried at Close of Period
 
 
 
 
 
 
 
 
Description
 
Land
 
Building and
Improvements
 
Cost
Capitalized
Subsequent 
to
Acquisition
 
Land
 
Building and
Improvements
 
Total
(1)
 
Accumulated
Depreciation
 
Total Costs,
Net of
Accumulated
Depreciation
 
Encumbrances
(2)
 
Date of
Acquisition /
Construction
The Shoppes at Parkwood Ranch
 
$
4,369

 
$
52

 
$
10,200

 
$
2,347

 
$
12,274

 
$
14,621

 
$
(4,917
)
 
$
9,704

 
$

 
12/31/2009
Thompson Bridge Commons
 
604

 

 
625

 
513

 
716

 
1,229

 
(76
)
 
1,153

 

 
04/26/2005
Thousand Oaks Shopping Center
 
2,973

 
13,142

 
372

 
2,973

 
13,514

 
16,487

 
(4,300
)
 
12,187

 
(13,670
)
 
03/20/2008
TJ Maxx Plaza
 
3,400

 
19,283

 
1,716

 
3,430

 
20,969

 
24,399

 
(6,217
)
 
18,182

 

 
03/01/2004
Tomball Marketplace
 
9,616

 
262

 
22,837

 
8,132

 
24,583

 
32,715

 
(6,364
)
 
26,351

 

 
04/12/2006
Town & Country Shopping Center
 

 
3,891

 
5,237

 

 
9,128

 
9,128

 
(6,004
)
 
3,124

 

 
01/31/1989
Tropicana Beltway Center
 
13,947

 
42,186

 
632

 
13,949

 
42,816

 
56,765

 
(12,524
)
 
44,241

 

 
11/20/2007
Tropicana Marketplace
 
2,118

 
8,477

 
(2,133
)
 
1,206

 
7,256

 
8,462

 
(3,756
)
 
4,706

 

 
07/24/1995
Tyler Shopping Center
 
5

 
21

 
3,996

 
300

 
3,722

 
4,022

 
(2,441
)
 
1,581

 

 
12/31/2002
Valley Plaza
 
1,414

 
5,818

 
6,478

 
1,422

 
12,288

 
13,710

 
(5,464
)
 
8,246

 

 
12/31/1997
Valley Shopping Center
 
4,293

 
13,736

 
835

 
8,170

 
10,694

 
18,864

 
(2,601
)
 
16,263

 

 
04/07/2006
Valley View Shopping Center
 
1,006

 
3,980

 
2,362

 
1,006

 
6,342

 
7,348

 
(3,374
)
 
3,974

 

 
11/20/1996
Vizcaya Square Shopping Center
 
3,044

 
12,226

 
1,343

 
3,044

 
13,569

 
16,613

 
(4,093
)
 
12,520

 

 
12/18/2002
Waterford Village
 
5,830

 

 
8,103

 
2,893

 
11,040

 
13,933

 
(4,386
)
 
9,547

 

 
06/11/2004
West Jordan Town Center
 
4,306

 
17,776

 
1,760

 
4,308

 
19,534

 
23,842

 
(5,662
)
 
18,180

 

 
12/19/2003
Westchase Shopping Center
 
3,085

 
7,920

 
7,006

 
3,189

 
14,822

 
18,011

 
(12,124
)
 
5,887

 
(936
)
 
08/29/1978
Westgate Shopping Center
 
245

 
1,425

 
463

 
239

 
1,894

 
2,133

 
(1,606
)
 
527

 

 
07/02/1965
Westhill Village Shopping Center
 
408

 
3,002

 
4,574

 
437

 
7,547

 
7,984

 
(5,149
)
 
2,835

 

 
05/01/1958
Westland Fair
 
27,562

 
10,506

 
(9,160
)
 
12,220

 
16,688

 
28,908

 
(8,118
)
 
20,790

 

 
12/29/2000
Westminster Center
 
11,215

 
44,871

 
7,692

 
11,204

 
52,574

 
63,778

 
(19,286
)
 
44,492

 
(42,237
)
 
04/02/2001
Whitehall Commons
 
2,529

 
6,901

 
449

 
2,522

 
7,357

 
9,879

 
(1,915
)
 
7,964

 

 
10/06/2005
Whole Foods @ Carrollwood
 
2,772

 
126

 
4,634

 
2,854

 
4,678

 
7,532

 
(440
)
 
7,092

 

 
09/30/2011
Winter Park Corners
 
2,159

 
8,636

 
1,317

 
2,159

 
9,953

 
12,112

 
(3,504
)
 
8,608

 

 
09/06/2001
 
 
861,144

 
2,219,059

 
753,888

 
822,571

 
3,011,520

 
3,834,091

 
(1,000,692
)
 
2,833,399

 
(562,570
)
 
 
New Development:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hilltop Village Center
 
3,196

 
7,234

 
40,890

 
4,113

 
47,207

 
51,320

 
(568
)
 
50,752

 

 
11/17/2011
Nottingham Commons
 
19,523

 
2,398

 
345

 
19,771

 
2,495

 
22,266

 
(3
)
 
22,263

 

 
09/24/2014
Wake Forest Crossing II
 
3,155

 
2,617

 
1,149

 
3,276

 
3,645

 
6,921

 

 
6,921

 

 
06/04/2014
 
 
25,874

 
12,249

 
42,384

 
27,160

 
53,347

 
80,507

 
(571
)
 
79,936

 

 
 
Miscellaneous (not to exceed 5% of total)
 
141,767

 
9,263

 
10,466

 
99,529

 
61,967

 
161,496

 
(27,356
)
 
134,140

 

 
 
Total of Portfolio
 
$
1,028,785

 
$
2,240,571

 
$
806,738

 
$
949,260

 
$
3,126,834

 
$
4,076,094

 
$
(1,028,619
)
 
$
3,047,475

 
$
(562,570
)
 
 
___________________
(1)
The book value of our net fixed asset exceeds the tax basis by approximately $32.0 million at December 31, 2014.
(2)
Encumbrances do not include $28.1 million outstanding under fixed-rate mortgage debt associated with three properties each held in a tenancy-in-common arrangement and $4.3 million of non-cash debt related items.

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Schedule III

Depreciation is computed using the straight-line method, generally over estimated useful lives of 18-40 years for buildings and 10-20 years for parking lot surfacing and equipment. Tenant and leasehold improvements are depreciated over the remaining life of the lease or the useful life whichever is shorter.
The changes in total cost of the properties were as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Balance at beginning of year
$
4,289,276

 
$
4,399,850

 
$
4,688,526

Additions at cost
144,474

 
279,624

 
310,454

Retirements or sales
(348,221
)
 
(232,823
)
 
(608,466
)
Property held for sale
(9,435
)
 
(155,017
)
 

Property transferred from held for sale

 

 
18,090

Impairment loss

 
(2,358
)
 
(8,754
)
Balance at end of year
$
4,076,094

 
$
4,289,276

 
$
4,399,850

The changes in accumulated depreciation were as follows (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Balance at beginning of year
$
1,058,040

 
$
1,040,839

 
$
1,059,531

Additions at cost
125,226

 
130,698

 
130,965

Retirements or sales
(148,882
)
 
(81,094
)
 
(157,723
)
Property held for sale
(5,765
)
 
(32,403
)
 

Property transferred from held for sale

 

 
8,066

Balance at end of year
$
1,028,619

 
$
1,058,040

 
$
1,040,839


104

Table of Contents


Schedule IV
WEINGARTEN REALTY INVESTORS
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2014
(Amounts in thousands)
 
State
 
Interest
Rate
 
Final
Maturity
Date
 
Periodic
Payment
Terms
 
Face
Amount of
Mortgages
 
Carrying
Amount of
Mortgages
(1)
Shopping Centers:
 
 
 
 
 
 
 
 
 
 
 
First Mortgages:
 
 
 
 
 
 
 
 
 
 
 
College Park Realty Company
NV
 
7.00%
 
10/31/2053
 
At Maturity
 
$
3,410

 
$
3,410

Total Mortgage Loans on
Real Estate
 
 
 
 
 
 
 
 
$
3,410

 
$
3,410

___________________
(1)
The aggregate cost at December 31, 2014 for federal income tax purposes is $3.4 million, and there are no prior liens to be disclosed.
Changes in mortgage loans are summarized below (in thousands):
 
Year Ended December 31,
 
2014
 
2013
 
2012
Balance, Beginning of Year
$
15,438

 
$
91,662

 
$
159,916

Additions to Existing Loans (1)

 
699

 
734

Collections/Reductions of Principal
(12,028
)
 
(22,085
)
 
(68,988
)
Reduction of Principal due to Business Combinations (2)

 
(54,838
)
 

Balance, End of Year
$
3,410

 
$
15,438

 
$
91,662

___________________
(1)
The caption above, “Additions to Existing Loans” also includes accrued interest.
(2)
This caption relates to acquired unconsolidated real estate joint venture interest during the respective period.

105