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Wheeler Real Estate Investment Trust, Inc. Announces 2018 Fourth Quarter and Year-End Financial Results

VIRGINIA BEACH, Va., Feb. 26, 2019 (GLOBE NEWSWIRE) -- Wheeler Real Estate Investment Trust, Inc. (WHLR) (“WHLR” or the “Company”) today reported operating and financial results for the three and twelve months ending December 31, 2018.

    Three Months Ended December 31,   Twelve Months Ended December 31,
    2018   2017   2018   2017
Net loss per common share   $ (1.66 )   $ (1.22 )   $ (3.17 )   $ (2.54 )
FFO per common share and common unit   (0.05 )   (0.56 )   0.42     0.19  
AFFO per common share and common unit   0.15     0.18     0.73     1.31  

2018 FOURTH QUARTER HIGHLIGHTS
(all comparisons to the same prior year period unless otherwise noted)     

  • Paid down the Revere Term Loan with proceeds from the sale of the Monarch Bank Building for a contract price of $1.8 million, resulting in a gain of $151 thousand and proceeds of $299 thousand.
  • Extended the Bulldog Investors Senior Convertible Notes to June 2019 with monthly principal and interest payments of $234 thousand.
  • Extended the First National Bank and Lumber River loans for a total of $4.5 million in indebtedness, and extended the debt maturities to 2020.
  • Paid $575 thousand on the Revere Term Loan from proceeds generated through the Riversedge North refinancing of $1.8 million, which extended the debt maturity to 2023.
  • Recognized impairment charges of $5.5 million on goodwill, $3.9 million on land held for sale and $1.7 million on the Sea Turtle notes receivable.
  • On December 20, 2018 the company suspended fourth quarter dividends on shares of its Series A Preferred Stock, Series B Convertible Preferred Stock and Series D Cumulative Convertible Preferred Stock, totaling approximately $3.0 million.
  • Net loss attributable to WHLR's common stock, $0.01 par value per share ("Common Stock") shareholders of $15.8 million, or ($1.66) per share.
  • Total revenue from continuing operations increased by 12.39% or $1.8 million.
  • Property Net Operating Income ("NOI") from continuing operations increased by 11.97% to approximately $11.2 million.
  • Adjusted Funds from Operations ("AFFO") of $0.15 per share of the Company's Common Stock and common unit ("Common Unit") in our operating partnership, Wheeler REIT, L.P.

2018 YEAR-TO-DATE HIGHLIGHTS

  • Backfilled 3 former Southeastern Grocers locations, which we recaptured in its bankruptcy proceeding, with two Low Country Grocers (Piggly Wiggly's) at Ladson Crossing and South Park with rents that commenced in the third quarter 2018 and a third Piggly Wiggly at St. Matthews with rents commencing in the first quarter of 2019.
  • Received approval on all Southeastern Grocers lease modifications by the bankruptcy court, representing 543 thousand square feet.
  • Executed a lease termination fee of $980 thousand with Farm Fresh at Berkley Shopping Center.
  • Reduced the KeyBank Credit Line to $52.1 million from $68.0 million at December 31, 2017.
  • Reduced the Revere Term Loan to $1.1 million from $6.8 million at December 31, 2017.
  • Sold 4 properties for a total of $11.6 million, resulting in a gain of $3.4 million and net proceeds of $6.3 million which were used to deleverage the balance sheet.
  • Recorded a lease termination expense of $250 thousand to allow a space to be available for a high credit grocery store tenant at JANAF.
  • Net loss attributable to Wheeler's Common Stock shareholders of $29.3 million, or ($3.17) per share.
  • Total revenue from continuing operations increased by 12.26% or $7.2 million.
  • NOI from continuing operations increased by 15.05% to approximately $46.4 million.
  • AFFO of $0.73 per share of the Company's Common Stock and Common Unit.
  • Reinvested $5.1 million in our properties through tenant improvements and capital expenditures.

SUBSEQUENT EVENTS

  • On January 11, 2019, the Company completed the sale of Jenks Plaza for a contract price of $2.20 million, resulting in a gain of $388 thousand with net proceeds of $1.84 million.  Net proceeds were used to pay $323 thousand on the Revere Term Loan and $1.51 million on the First National Bank Line of Credit reducing the First National Bank Line of Credit to $1.42 million.  
  • On February 7, 2019, the Company completed the sale of a 1.28-acre parcel of non-income producing land at Harbor Pointe for a contract price of $550 thousand, resulting in net proceeds of $496 thousand.  Net proceeds were used to pay off the associated debt and $30 thousand on the Revere Term Loan.  Approximately 5 acres of land remain at Harbor Pointe.  
  • In January 2019, the Company extended the promissory notes at Perimeter Square extending the maturity dates to March 2019 from December 2018 and extended the maturity date on the Revere Term Loan to April 2019 from February 2019.
  • Reduced the Revere Term Loan to $505 thousand, $200 thousand from monthly principal payments from operating cash and $353 thousand from sales proceeds noted above.
  • Reduced the Bulldog Investors Senior Convertible Notes by $450 thousand to $919 thousand from $1.4 million through monthly principal payments from operating cash.

BALANCE SHEET

  • Cash and cash equivalents totaled $3.5 million at December 31, 2018, compared to $3.7 million at December 31, 2017.
  • Total debt was $369.6 million at December 31, 2018 (including debt associated with assets held for sale), compared to $371.5 million at September 30, 2018. Our total debt at December 31, 2017 was $313.8 million. The increase in debt is primarily a result of $65.4 million in debt associated with the JANAF acquisition. 
  • WHLR's weighted-average interest rate was 4.8% with a term of 4.31 years at December 31, 2018 (including debt associated with assets held for sale).  This compares to an interest rate of 4.6% and a term of 4.81 years at December 31, 2017.
  • Net investment properties as of December 31, 2018 totaled at $441.4 million (including assets held for sale), compared to $384.3 million as of December 31, 2017.
  • Refinanced six properties off of the KeyBank Credit Line and the loan encumbering LaGrange for a total of $20.3 million, and extended debt maturities out 5 years to 2023.
  • Paid down the Revere Term Loan, which matures in April 2019 with monthly principal payments of $100,000. The loan bears interest at 10.0%. The loan was paid down to $1.1 million, using the following sources: $4.3 million through property sales proceeds, $150 thousand through property refinancings and $1.3 million from operating cash.
  • In conjunction with the JANAF acquisition, the Company issued and sold 1,363,636 shares of Series D Preferred Stock, in a public offering. Each share of Series D Preferred Stock was sold to investors at an offering price of $16.50 per share. Net proceeds from the public offering totaled $21.2 million, which includes the impact of the underwriters' selling commissions, legal, accounting and other professional fees.

DIVIDENDS

  • For the quarter ended December 31, 2018, the Company had undeclared dividends of approximately $3.0 million to our holders of shares of our Series A Preferred Stock, Series B Preferred Stock, and Series D Preferred Stock.
  • For the year ended December 31, 2018, the Company declared dividends of approximately $9.8 million and had undeclared dividends of $3.0 million to our holders of shares of our Series A Preferred Stock, Series B Preferred Stock, and Series D Preferred Stock.

OPERATIONS AND LEASING

  • The Company's real estate portfolio is 89.4% leased.
  • Q4-2018 Leasing Activity
    --  Executed 29 lease renewals totaling 131,600 square feet at a weighted-average increase of $0.53 per square foot, representing an increase of 4.83% over prior rates.
    --  Signed 8 new leases totaling approximately 56,579 square feet with a weighted-average rate of $10.38 per square foot.
  • YTD 2018 Leasing Activity
    --  Executed 119 lease renewals totaling 693,970 square feet at a weighted-average increase of $0.52 per square foot, representing an increase of 6.05% over prior rates.
    --  Signed 55 new leases totaling approximately 290,986 square feet with a weighted-average rate of $9.06 per square foot.
  • The Company’s gross leasable area ("GLA"), which is subject to leases that expire over the next twelve months, including month-to month leases declined to approximately 7.08% at December 31, 2018, compared to 9.39% at December 31, 2017.  At December 31, 2018, 50.75% of this expiring GLA is subject to renewal options.
  • Southeastern Grocers
    --  The Company modified thirteen leases with Southeastern Grocers anchor tenants and recaptured four locations. These modifications primarily include a combination of increases and decreases to lease term and rental rates, as well as deferred landlord contributions for remodels. The Company recaptured Ladson Crossing, St. Matthews, South Park, and Tampa Festival in the second quarter of 2018. The Cypress Shopping Center lease expired on March 31, 2018. As part of the negotiated recaptures the Company received $246 thousand during the year ended December 31, 2018. The remaining lease modifications were approved by the Southeastern Grocers' bankruptcy court in the second quarter 2018. The initial annualized base rent impact of these modifications and recaptures is approximately $2.5 million. Three of these locations have been backfilled and two of these locations had rents commence in 2018 with the third location commencing rent in February 2019.  These backfills reduce the impact on the Company's annualized base rent to $1.9 million.

SAME STORE RESULTS

  • Same-store NOI for the three months ended December 31, 2018 compared to December 31, 2017, declined by (8.30%) and (10.62%) on a cash basis. The same-store pool for the 3 months ended December 31, 2018, was comprised of 4.9 million square feet that the Company owned as of January 1, 2017. Same-store results were driven by a 5.78% decrease in property revenues, a result of a full quarter of Southeastern Grocers recaptures and rent modifications accompanied by anchor lease expirations at South Lake and Walnut Hill, the impact of a full quarter of the lease termination at Berkley Shopping Center and loss of rents on the Monarch Bank Building and Shoppes at Eagle Harbor sold in 2018.  Same Store property expenses decreased 1.17% as a result of lower insurance expenses.
  • Same-store NOI for the year ended December 31, 2018 compared to December 31, 2017, declined by (4.01%) and (6.20%) on a cash basis. Same-store results for the year ended December 31, 2018, were driven, by a decrease of 2.66% in property revenues as a result of the impact of over half a year of Southeastern Grocers recaptures and rent modifications accompanied by anchor lease expirations at South Lake, Fort Howard and Walnut Hill, full year of rent modifications at Devine and loss of rents on the Monarch Bank Building and Shoppes at Eagle Harbor both sold in 2018, offset by $980 thousand in lease termination fees on Farm Fresh at Berkley Shopping Center. Property expenses increased 1.19% as a result of increased real estate taxes and utilities a direct result of vacant anchor space partially offset by a decrease in insurance expense.   The tenant provision for credit losses decreased 12.25% primarily resulting from increased collections on accounts receivable.

ACQUISITIONS

  • As previously disclosed, the Company acquired JANAF, a retail shopping center located in Norfolk, Virginia, for a purchase price of $85.65 million in January 2018.

DISPOSITIONS

  • Sold Chipotle ground lease at Conyers Crossing for a contract price of $1.3 million, resulting in a gain of $1.0 million with net proceeds of $1.2 million.
  • Sold an undeveloped land parcel at Laskin Road for a contract price of $2.9 million, resulting in a $903 thousand gain with net proceeds of $2.7 million.
  • Sold Shoppes at Eagle Harbor for a contract price of $5.7 million, resulting in a $1.3 million gain with net proceeds of $2.1 million.
  • Sold Monarch Bank Building for a contract price of $1.8 million, resulting in a $151 thousand gain with net proceeds of $299 thousand.

SUPPLEMENTAL INFORMATION
Further details regarding Wheeler Real Estate Investment Trust, Inc.’s operations and financials for the period ended December 31, 2018, including a supplemental presentation, are available at https://ir.whlr.us/

CONFERENCE CALL DIAL-IN AND WEBCAST INFORMATION:
The Company will host a conference call and webcast on Wednesday, February 27, 2019 at 10:00 am Eastern Time to review its financial performance and operating results for the quarter ended December 31, 2018.

Conference Call and Webcast:
U.S. & Canada Toll Free: (877) 407-3101 / International: (201) 493-6789
Webcast:  www.whlr.us via the Investor Relations Section

Replay:
U.S. & Canada Toll Free: (877) 660-6853 / International: (201) 612-7415
Conference ID#:  13679474
Available February 27, 2019 (one hour after the end of the conference call) to March 27, 2019 at 10:00 am Eastern Time.

ABOUT WHEELER REAL ESTATE INVESTMENT TRUST, INC.
Headquartered in Virginia Beach, VA, Wheeler Real Estate Investment Trust, Inc. is a fully-integrated, self-managed commercial real estate investment company focused on owning and operating income-producing retail properties with a primary focus on grocery-anchored centers. Wheeler’s portfolio contains well-located, potentially dominant retail properties in secondary and tertiary markets that generate attractive, risk-adjusted returns, with a particular emphasis on grocery-anchored retail centers. For additional information about the Company, please visit: www.whlr.us

A copy of Wheeler’s Annual Report on Form 10-K, which includes the Company’s consolidated financial statements and management’s discussion & analysis of financial condition and results of operations, will be available upon filing via the U.S. Securities and Exchange Commission website (www.sec.gov) or through Wheeler’s website at www.whlr.us

DEFINITIONS
FFO, AFFO, Pro Forma AFFO, Property NOI, EBITDA and Adjusted EBITDA are non-GAAP financial measures within the meaning of the rules of the Securities and Exchange Commission. Wheeler considers FFO, AFFO, Pro Forma AFFO, Property NOI, EBITDA and Adjusted EBITDA to be important supplemental measures of its operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate and gains and losses from property dispositions, the Company believes that it provides a performance measure that, when compared year-over-year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from the closest GAAP measurement, net income.

Management believes that the computation of FFO in accordance with NAREIT’s definition includes certain items that are not indicative of the operating performance of the Company’s real estate assets. These items include, but are not limited to, nonrecurring expenses, legal settlements, legal and professional fees, and acquisition costs. Management uses AFFO, which is a non- GAAP financial measure, to exclude such items. Management believes that reporting AFFO and Pro Forma AFFO in addition to FFO is a useful supplemental measure for the investment community to use when evaluating the operating performance of the Company on a comparative basis. Management also believes that Property NOI, EBITDA and Adjusted EBITDA represent important supplemental measures for securities analysts, investors and other interested parties, as they are often used in calculating net asset value, leverage and other financial metrics used by these parties in the evaluation of REITs.

FORWARD LOOKING STATEMENTS
This press release may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. The Company’s expected results may not be achieved, and actual results may differ materially from expectations. Specifically, the Company’s statements regarding future generation of financial returns from its portfolio are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release.

Additional factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

INVESTOR CONTACT:
Mary Jensen
Investor Relations
(757) 627-9088
mjensen@whlr.us


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except share and per share data)

  Three Months Ended December 31,   Years Ended December 31,
  2018   2017   2018   2017
REVENUE:              
Rental revenues $ 12,589     $ 10,891     $ 50,952     $ 44,156  
Asset management fees 46     120     189     927  
Commissions 38     141     140     899  
Tenant reimbursements 3,258     2,905     12,595     11,032  
Development and other revenues 136     239     1,833     1,521  
Total Revenue 16,067     14,296     65,709     58,535  
OPERATING EXPENSES:              
Property operations 4,669     3,922     18,473     15,389  
Non-REIT management and leasing services 16     (598 )   75     927  
Depreciation and amortization 6,151     5,776     27,094     26,231  
Impairment of goodwill 5,486         5,486      
Provision for credit losses 99     2,378     434     2,821  
Impairment of notes receivable 1,739     5,261     1,739     5,261  
Corporate general & administrative 1,749     2,509     8,228     7,364  
Other operating expenses         250      
Total Operating Expenses 19,909     19,248     61,779     57,993  
Gain on disposal of properties 151         2,463     1,021  
Operating (Loss) Income (3,691 )   (4,952 )   6,393     1,563  
Interest income 1     363     4     1,443  
Interest expense (5,288 )   (4,168 )   (20,228 )   (17,165 )
Net Loss from Continuing Operations Before Income Taxes (8,978 )   (8,757 )   (13,831 )   (14,159 )
Income tax expense (benefit) 32     38     (40 )   (137 )
Net Loss from Continuing Operations (8,946 )   (8,719 )   (13,871 )   (14,296 )
Discontinued Operations              
(Loss) income from discontinued operations (3,938 )       (3,938 )   16  
Gain on disposal of properties         903     1,502  
Net (Loss) Income from Discontinued Operations (3,938 )       (3,035 )   1,518  
Net Loss (12,884 )   (8,719 )   (16,906 )   (12,778 )
Less: Net loss attributable to noncontrolling interests (336 )   (519 )   (406 )   (684 )
Net Loss Attributable to Wheeler REIT (12,548 )   (8,200 )   (16,500 )   (12,094 )
Preferred Stock dividends - declared (169 )   (2,496 )   (9,790 )   (9,969 )
Preferred Stock dividends - undeclared (3,037 )       (3,037 )    
Net Loss Attributable to Wheeler REIT Common Shareholders $ (15,754 )   $ (10,696 )   $ (29,327 )   $ (22,063 )
               
Loss per share from continuing operations (basic and diluted) $ (1.25 )   $ (1.22 )   $ (2.85 )   $ (2.70 )
(Loss) income per share from discontinued operations (0.41 )       (0.32 )   0.16  
Total loss per share $ (1.66 )   $ (1.22 )   $ (3.17 )   $ (2.54 )
Weighted-average number of shares:              
Basic and Diluted 9,484,185     8,739,455     9,256,234     8,654,240  
               


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except par value and share data)

  December 31,
  2018   2017
ASSETS:      
Investment properties, net $ 433,142     $ 375,199  
Cash and cash equivalents 3,544     3,677  
Restricted cash 14,455     8,609  
Rents and other tenant receivables, net 5,539     5,619  
Notes receivable, net 5,000     6,739  
Goodwill     5,486  
Assets held for sale 8,982     9,135  
Above market lease intangible, net 7,346     8,778  
Deferred costs and other assets, net 30,073     34,432  
Total Assets $ 508,081     $ 457,674  
LIABILITIES:      
Loans payable, net $ 360,117     $ 307,375  
Liabilities associated with assets held for sale 4,632     792  
Below market lease intangible, net 10,045     9,616  
Accounts payable, accrued expenses and other liabilities 12,077     10,579  
Dividends payable     5,480  
Total Liabilities 386,871     333,842  
Commitments and contingencies      
Series D Cumulative Convertible Preferred Stock (no par value, 4,000,000 shares authorized, 3,600,636 and 2,237,000 shares issued and outstanding; $91.98 million and $55.93 million aggregate liquidation preference, respectively) 76,955     53,236  
       
EQUITY:      
Series A Preferred Stock (no par value, 4,500 shares authorized, 562 shares issued and outstanding) 453     453  
Series B Convertible Preferred Stock (no par value, 5,000,000 authorized, 1,875,748 and 1,875,848 shares issued and outstanding, respectively; $46.90 million aggregate liquidation preference) 41,000     40,915  
Common Stock ($0.01 par value, 18,750,000 shares authorized, 9,511,464 and 8,744,189 shares issued and outstanding, respectively) 95     87  
Additional paid-in capital 233,697     226,978  
Accumulated deficit (233,184 )   (204,925 )
Total Shareholders’ Equity 42,061     63,508  
Noncontrolling interests 2,194     7,088  
Total Equity 44,255     70,596  
Total Liabilities and Equity $ 508,081     $ 457,674  
 


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries   
Reconciliation of Funds From Operations (FFO)
(unaudited, in thousands)

  Three Months Ended December 31,
  Same Stores   New Stores   Total   Year Over Year Changes
  2018   2017   2018   2017   2018   2017   $   %
Net loss $ (12,852 )   $ (8,719 )   $ (32 )   $     $ (12,884 )   $ (8,719 )   $ (4,165 )   (47.77 )%
Depreciation and amortization of real estate assets 4,855     5,776     1,296         6,151     5,776     375     6.49 %
Impairment of goodwill 5,486                 5,486         5,486     100.00 %
Impairment of land 3,938                 3,938         3,938     100.00 %
Gain on disposal of properties (151 )               (151 )       (151 )   (100.00 )%
FFO $ 1,276     $ (2,943 )   $ 1,264     $     $ 2,540     $ (2,943 )   $ 5,483     186.31 %


  Years Ended December 31,
  Same Stores   New Stores   Total   Year Over Year Changes
  2018   2017   2018   2017   2018   2017   $   %
Net loss $ (16,696 )   $ (12,778 )   $ (210 )   $     $ (16,906 )   $ (12,778 )   $ (4,128 )   (32.31 )%
Depreciation and amortization of real estate assets 22,386     26,231     4,708         27,094     26,231     863     3.29 %
Impairment of goodwill 5,486                 5,486         5,486     100.00 %
Impairment of land 3,938                 3,938         3,938     100.00 %
Gain on disposal of properties (2,463 )   (1,021 )           (2,463 )   (1,021 )   (1,442 )   (141.23 )%
Gain on disposal of properties-discontinued operations (903 )   (1,502 )           (903 )   (1,502 )   599     39.88 %
FFO $ 11,748     $ 10,930     $ 4,498     $     $ 16,246     $ 10,930     $ 5,316     48.64 %



Wheeler Real Estate Investment Trust, Inc. and Subsidiaries   
Reconciliation of Funds From Operations (FFO)
(unaudited, in thousands)

  Three Months Ended December 31,   Years Ended December 31,
  2018   2017   2018   2017
Net Loss $ (12,884 )   $ (8,719 )   $ (16,906 )   $ (12,778 )
Depreciation and amortization of real estate assets 6,151     5,776     27,094     26,231  
Impairment of goodwill 5,486         5,486      
Impairment of land 3,938         3,938      
Gain on disposal of properties (151 )       (2,463 )   (1,021 )
Gain on disposal of properties-discontinued operations         (903 )   (1,502 )
FFO 2,540     (2,943 )   16,246     10,930  
Preferred stock dividends-declared (169 )   (2,496 )   (9,790 )   (9,969 )
Preferred stock dividends-undeclared (3,037 )       (3,037 )    
Preferred stock accretion adjustments 169     204     678     809  
FFO available to common shareholders and common unitholders (497 )   (5,235 )   4,097     1,770  
Impairment of notes receivable 1,739     5,261     1,739     5,261  
Acquisition and development costs (46 )   269     300     1,101  
Capital related costs 168     195     576     663  
Other non-recurring and non-cash expenses (1)     117     103     294  
Share-based compensation 213     135     940     870  
Straight-line rent (244 )   (146 )   (1,197 )   (712 )
Loan cost amortization 681     578     2,363     3,087  
Accrued interest income     774         415  
(Below) above market lease amortization (274 )   5     (695 )   453  
Recurring capital expenditures and tenant improvement reserves (285 )   (245 )   (1,143 )   (941 )
AFFO $ 1,455     $ 1,708     $ 7,083     $ 12,261  
               
Weighted Average Common Shares 9,484,185     8,739,455     9,256,234     8,654,240  
Weighted Average Common Units 259,054     639,555     389,421     702,168  
Total Common Shares and Units 9,743,239     9,379,010     9,645,655     9,356,408  
FFO per Common Share and Common Units $ (0.05 )   $ (0.56 )   $ 0.42     $ 0.19  
AFFO per Common Share and Common Units $ 0.15     $ 0.18     $ 0.73     $ 1.31  

(1)           Other non-recurring expenses are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2018.


Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Reconciliation of Property Net Operating Income
(unaudited, in thousands)

  Three Months Ended December 31,
  Same Store   New Store   Total
  2018   2017   2018   2017   2018   2017
   
  (in thousands)
Net Loss $ (12,852 )   $ (8,719 )   $ (32 )   $     $ (12,884 )   $ (8,719 )
Adjustments:                      
Net Loss from Discontinued Operations 3,938                 3,938      
Income tax benefit (32 )   (38 )           (32 )   (38 )
Interest expense 4,542     4,168     746         5,288     4,168  
Interest income (1 )   (363 )           (1 )   (363 )
Gain on disposal of properties (151 )               (151 )    
Corporate general & administrative 1,729     2,509     20         1,749     2,509  
Impairment of notes receivable 1,739     5,261             1,739     5,261  
Provision for credit losses- non-tenant     2,364                 2,364  
Impairment of goodwill 5,486                 5,486      
Depreciation and amortization 4,855     5,776     1,296         6,151     5,776  
Non-REIT management and leasing services 16     (598 )           16     (598 )
Development income     (83 )               (83 )
Asset management and commission revenues (84 )   (261 )           (84 )   (261 )
Property Net Operating Income $ 9,185     $ 10,016     $ 2,030     $     $ 11,215     $ 10,016  
                       
Property revenues $ 13,146     $ 13,952     $ 2,837     $     $ 15,983     $ 13,952  
Property expenses 3,876     3,922     793         4,669     3,922  
Provision for credit losses- tenant 85     14     14         99     14  
Property Net Operating Income $ 9,185     $ 10,016     $ 2,030     $     $ 11,215     $ 10,016  
                                               
                                               
  Years Ended December 31,
  Same Store   New Store   Total
  2018   2017   2018   2017   2018   2017
   
  (in thousands)
Net Loss $ (16,696 )   $ (12,778 )   $ (210 )   $     $ (16,906 )   $ (12,778 )
Adjustments:                      
Net Loss (Income) from Discontinued Operations 3,035     (1,518 )           3,035     (1,518 )
Income tax expense 40     137             40     137  
Interest expense 17,379     17,165     2,849         20,228     17,165  
Interest income (4 )   (1,443 )           (4 )   (1,443 )
Gain on disposal of properties (2,463 )   (1,021 )           (2,463 )   (1,021 )
Other operating expenses         250         250      
Corporate general & administrative 8,136     7,364     92         8,228     7,364  
Impairment of notes receivable 1,739     5,261             1,739     5,261  
Provision for credit losses- non-tenant (77 )   2,364             (77 )   2,364  
Impairment of goodwill 5,486                 5,486      
Depreciation and amortization 22,386     26,231     4,708         27,094     26,231  
Non-REIT management and leasing services 75     927             75     927  
Development income     (537 )               (537 )
Asset management and commission revenues (329 )   (1,826 )           (329 )   (1,826 )
Property Net Operating Income $ 38,707     $ 40,326     $ 7,689     $     $ 46,396     $ 40,326  
                       
Property revenues $ 54,680     $ 56,172     $ 10,700     $     $ 65,380     $ 56,172  
Property expenses 15,572     15,389     2,901         18,473     15,389  
Provision for credit losses- tenant 401     457     110         511     457  
Property Net Operating Income $ 38,707     $ 40,326     $ 7,689     $     $ 46,396     $ 40,326  



Wheeler Real Estate Investment Trust, Inc. and Subsidiaries
Reconciliation of Earnings Before Interest, Taxes, Depreciation and Amortization - EBITDA
(unaudited, in thousands)

  Three Months Ended December 31,   Years Ended December 31,
  2018   2017   2018   2017
Net Loss $ (12,884 )   $ (8,719 )   $ (16,906 )   $ (12,778 )
Add back: Depreciation and amortization (1) 5,877     5,781     26,399     26,684  
  Interest Expense (2) 5,288     4,168     20,228     17,174  
  Income tax (benefit) expense (32 )   (38 )   40     137  
EBITDA (1,751 )   1,192     29,761     31,217  
Adjustments for items affecting comparability:              
  Acquisition and development costs (46 )   269     300     1,101  
  Capital related costs 168     195     576     663  
  Other non-recurring and non-cash expenses (3)     117     103     294  
  Impairment of goodwill 5,486         5,486      
  Impairment of notes receivable 1,739     5,261     1,739     5,261  
  Impairment of land-discontinued operations 3,938         3,938      
  Gain on disposal of properties (151 )       (2,463 )   (1,021 )
  Gain on disposal of properties-discontinued operations         (903 )   (1,502 )
Adjusted EBITDA $ 9,383     $ 7,034     $ 38,537     $ 36,013  

(1)           Includes above (below) market lease amortization.
(2)           Includes loan cost amortization and amounts associated with discontinued operations.
(3)           Other non-recurring expenses are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the period ended December 31, 2018.