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Wheeler Real Estate Investment Trust, Inc. Announces 2019 Third Quarter Financial Results

VIRGINIA BEACH, Va. , Nov. 06, 2019 (GLOBE NEWSWIRE) -- Wheeler Real Estate Investment Trust, Inc. (WHLR) (“WHLR” or the “Company”) today reported operating and financial results for the three and nine months ended September 30, 2019.

    Three Months
Ended September 30,
  Nine Months
Ended September 30,
    2019   2018   2019   2018
                 
Net loss per common share   $ (0.48 )   $ (0.41 )   $ (1.90 )   $ (1.48 )
FFO per common share and common unit   0.11     0.12     (0.17 )   0.48  
AFFO per common share and common unit   0.11     0.13     0.38     0.59  

Commenting on the WHLR real estate portfolio, David Kelly, Chief Executive Officer stated, "We continue to reinvest in, and improve the quality of, the portfolio both through capital expenditures and routine repairs and maintenance, which make up part of the reimbursement revenues.  As a result of these initiatives, we continue to position the portfolio in the future for higher occupancy rates, further increases in annual rent spreads and increased NOI."

2019 THIRD QUARTER HIGHLIGHTS

(all comparisons to the same prior year period unless otherwise noted)  

  • Total revenue from continuing operations decreased by 3.16% or $508 thousand primarily due to the revenue declines from asset sales, approximately $522 thousand, partially offset by increases in JANAF and same store property revenue.
  • Same store property revenues increased 0.17%.
  • Same store Net Operating Income ("NOI") for the three months ended September 30, 2019 compared to September 30, 2018 decreased by 2.59% and increased by 0.95% on a cash basis.
  • Sold Perimeter Square for a contract price of $7.2 million, paying off $6.5 million in related debt.
  • Refinanced the Laburnum Square collateralized portion of the line of credit with KeyBank (the "KeyBank Line of Credit") further reducing the balance by $7.6 million.
  • Executed 46 lease renewals totaling 336,299 square feet at a weighted-average increase of $0.41 per square foot, representing an increase of 5.46% over prior rates.
  • Signed 11 new leases totaling approximately 29,756 square feet with a weighted-average rate of $12.10 per square foot.
  • Corporate general and administrative expense reduced by 20.79% from prior year period.
  • Bad debt expense as a percent of revenue decreased to 0.73% from 0.92%.
  • Net loss attributable to WHLR's common stock, $0.01 par value per share ("Common Stock") shareholders of $4.6 million, or ($0.48) per share.
  • Property NOI from operations decreased by 6.40% to approximately $10.6 million primarily due to the NOI declines from the impact of selling five properties, approximately $406 thousand, and increased repairs and maintenance at properties.
  • Adjusted Funds from Operations ("AFFO") of $0.11 per share of the Company's, Common Stock and common unit ("Common Unit") in our operating partnership, Wheeler REIT, L.P.
  • Recognized a $400 thousand impairment charge on an asset held for sale, St. Matthews.

2019 YEAR-TO-DATE HIGHLIGHTS

  • Sold three properties and an undeveloped land parcel for $16.0 million, resulting in a total gain of $1.8 million and net proceeds of $3.6 million.
  • WHLR's weighted-average interest rate decreased to 4.75%, with an average loan term of 4.37 years.
  • Paid the Bulldog Senior Convertible notes in full through scheduled principal and interest payments.
  • Paid the Revere Term Loan in full through a combination of asset sale proceeds, operating cash flows and $300 thousand in monthly scheduled principal payments.
  • Paid down the KeyBank Line of Credit to $26.0 million with proceeds from the following sources: $23.0 million from the Village of Martinsville and Laburnum Square refinances, $1.9 million in specific principal payments and $1.3 million in monthly scheduled principal payments.
  • The 1,986,600 publicly traded warrants (CUSIP No.: 963025119) (WHLRW) exchangeable into 248,325 shares of our Common Stock expired on April 29, 2019.
  • Recognized a $5.0 million impairment charge on notes receivable bringing the carrying value to zero with pending legal proceedings providing additional uncertainty relating to the estimated fair market value of the Sea Turtle Development ("Sea Turtle"). The $12.0 million in notes receivable are subordinated to the construction loans made by the Bank of Arkansas (“BOKF”), totaling $20.0 million.
    • In April 2019, BOKF filed a Verified Complaint in state court in Beaufort County, South Carolina for Sea Turtle’s default on payment of the BOKF construction loans, and for the appointment of a receiver, injunctive relief and accounting records.
    • On May 7, 2019, the owner of Sea Turtle filed a Chapter 11 Voluntary Petition for Bankruptcy in the United States Bankruptcy Court for the District of South Carolina in Charleston. The bankruptcy petition automatically stayed BOKF’s suit against it. The pleadings in the state court action and the bankruptcy action state that Sea Turtle has been in default on its payments to BOKF since September 2018. The pleadings further state that the project is $8.0 million over budget as of August 8, 2018. Sea Turtle has retained a broker to try and sell the property. There is a possibility that a judicially approved sale of the property will not bring a price that exceeds what is owed to BOKF on its construction loans. If a sale is not approved through the bankruptcy court in 2019, it is expected that the bankruptcy petition will be dismissed and BOKF will resume its suit in South Carolina state court, possibly leading to a foreclosure on the property.
  • Recognized a total of $1.5 million in impairment charges on Perimeter Square, sold on July 12, 2019, and St. Matthews, currently an asset held for sale.
  • Bad debt expense as a percent of revenue decreased to 0.66% from 0.83%.
  • Operating cash flows used for the paydown of accounts payable, accrued expenses and other liabilities increased $4.2 million in comparison to the nine months ended September 30, 2018.
  • Net loss attributable to WHLR's Common Stock shareholders of $18.3 million, or ($1.90) per share.
  • Total revenue from continuing operations decreased by 4.49% or $2.2 million primarily due to the 2018 early termination fees of $1.3 million associated with Berkley Center Shopping Center and Southeastern Grocers ("SEG") recaptures as well as the revenue declines from the impact of selling five properties, approximately $1.04 million, partially offset by an increase of 7.35% in JANAF revenue.
  • Property NOI from operations decreased by 7.06% to approximately $32.7 million primarily due to the 2018 early termination fees of $1.3 million associated with Berkley Center Shopping Center and SEG recaptures as well as the NOI declines from the impact of selling five properties, approximately $779 thousand, partially offset by an increase of $172 thousand or 3.05% in JANAF NOI.
  • AFFO of $0.38 per share of the Company's Common Stock and Common Unit in our operating partnership, Wheeler REIT, L.P.

SUBSEQUENT EVENTS

  • On November 1, 2019, the Company refinanced the Litchfield Market Village collateralized portion of the KeyBank Line of Credit reducing the line by $7.2 million. The executed promissory note for the Litchfield Market Village refinance is $7.50 million at a fixed interest rate of 5.50%.
  • On November 5, 2019, the Company and KeyBank entered into a non-binding term sheet (the “Term Sheet”) to amend the Amended and Restated Credit Agreement with KeyBank. Pursuant to the Term Sheet, beginning on November 1, 2019, the Company began making monthly principal payments of $350 thousand on the KeyBank Line of Credit.  The Term Sheet, among other provisions, requires a pledge of additional collateral of $15.0 million in residual equity interests.  Additionally, the KeyBank Line of Credit shall be reduced to $12.0 million by December 31, 2019, $10.0 million by January 31, 2020, $2.0 million by April 30, 2020 and fully matures on June 30, 2020.  The balance on the KeyBank Line of Credit is $18.23 million as of November 5, 2019.  The Term Sheet is not a binding commitment from KeyBank and will be superseded by a formal contract amendment, subject to customary closing conditions. 

BALANCE SHEET

  • Cash and cash equivalents totaled $5.2 million at September 30, 2019, compared to $3.5 million at December 31, 2018.
  • Total debt was $349.1 million at September 30, 2019 (including debt associated with assets held for sale), compared to $369.6 million at December 31, 2018. The decrease of $20.5 million in debt is primarily a result of:
    • $1.1 million Revere Term Loan pay-off;
    • $12.3 million in payoffs as a result of asset sales;
    • $3.1 million of additional principal pay-downs on the KeyBank Line of Credit; and
    • regularly scheduled principal payments.
  • WHLR's weighted-average interest rate was 4.75% with a term of 4.37 years at September 30, 2019 (including debt associated with assets held for sale). This compares to an interest rate of 4.84% with a term of 4.31 years at December 31, 2018.
  • Net investment properties as of September 30, 2019 totaled at $420.0 million (including assets held for sale), compared to $441.4 million as of December 31, 2018.

DIVIDENDS

  • At September 30, 2019, the Company had accumulated undeclared dividends of approximately $13.5 million to holders of shares of our Series A Preferred Stock, Series B Preferred Stock, and Series D Preferred Stock of which $3.5 million and $10.5 million are attributable to the three and nine months ended September 30, 2019, respectively.

OPERATIONS AND LEASING

  • The Company's real estate portfolio is 89.0% leased as of September 30, 2019.
  • YTD 2019 Leasing Activity
    • Executed 108 lease renewals totaling 556,009 square feet at a weighted-average increase of $0.35 per square foot, representing an increase of 3.92% over prior rates.
    • Signed 30 new leases totaling approximately 76,974 square feet with a weighted-average rate of $12.95 per square foot.
  • A new grocer tenant, ALDI, began construction of an approximate 20,000 square foot building, which included demolishing an existing approximate 10,000 square foot outparcel building at JANAF Shopping Center. As a result, the Company incurred a $331 thousand write-off.  ALDI is expected to open early December 2019.
  • In September, development of a new Planet Fitness in the parking field at Freeway Junction in Stockbridge, Georgia was completed and is expected to generate 20 years of ground rental income.
  • The Company’s gross leasable area ("GLA"), which is subject to leases that expire over the next three months, including month-to-month leases increased to approximately 2.86% at September 30, 2019, compared to 1.48% at September 30, 2018.  At September 30, 2019, 42.95% of this expiring GLA is subject to renewal options.
  • Subsequent to September 30, 2019, the 37,500 square foot anchor, Price Cutter at Pierpont Centre, the one remaining anchor in our portfolio is set to expire over the next three months exercised their five-year option, reducing the remaining expiring GLA to 2.19%.

SAME STORE RESULTS

  • Same store NOI for the three months ended September 30, 2019 compared to September 30, 2018, decreased by 2.59% and increased by 0.95% on a cash basis. The same store property pool includes those properties owned during all periods presented in their entirety, while the non-same stores property pool consists of those properties acquired or disposed of during the periods presented. Same store results were impacted by a 6.63% increase in property expenses, primarily due to of increased repairs and maintenance expense which are reimbursable from lender reserves.
  • Same store NOI for the nine months ended September 30, 2019 compared to September 30, 2018, declined by 6.61% and 4.33% on a cash basis.  The same store property pool includes those properties owned during all periods presented in their entirety, while the non-same store property pool consists of those properties acquired or disposed of during the periods presented. Same store results were impacted by a 3.85% decrease in property revenues, primarily a result of the 2018 early termination fee associated with Farm Fresh at Berkley Center Shopping Center, rent modifications to certain 2018 SEG leases, reduced rent at the three SEG recaptured and backfilled locations and incremental vacancies. Same Store property expenses increased 3.11% due to an increase in repairs and maintenance expense which are reimbursable from lender reserves.

ACQUISITIONS

  • In April 2019, the Company absorbed an approximate 25,000 square foot outparcel at JANAF as a result of an unlawful detainer with a delinquent tenant, Mariner Investments, LTD.

DISPOSITIONS

  • Sold Jenks Plaza for a contract price of $2.2 million, generating a gain of $387 thousand and net proceeds of $1.8 million.
  • Sold a 1.28-acre portion of an undeveloped land parcel at Harbor Pointe for a contract price of $550 thousand resulting in net proceeds of $19 thousand, paying off associated debt and retaining an approximate 4-acre unleveraged parcel.
  • Sold Graystone Crossing for a contract price of $6.0 million, generating a gain of $1.5 million and net proceeds of $1.7 million.
  • Sold Perimeter Square for a contract price of $7.2 million, generating a loss of $81 thousand and paying off associated debt.

SUPPLEMENTAL INFORMATION

Further details regarding Wheeler Real Estate Investment Trust, Inc.’s operations and financials for the period ended September 30, 2019, including a supplemental presentation, are available at https://ir.whlr.us/.

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 Quarterly Report on Form 10-Q, which includes the Company’s condensed 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; 1) future generation of financial returns from its portfolio; 2) its ability to create higher occupancy rates, increases in annual rent spreads and increased NOI; 3) its ability to enter into an amendment to the Amended and Restated Credit Agreement with KeyBank; and 4) the ability to generate 20 years of ground rental income from Planet Fitness at Freeway Junction 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.

Mary Jensen   
Investor Relations                                                                     
(757) 627-9088 / mjensen@whlr.us 


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

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2019   2018   2019   2018
REVENUE:              
Rental revenues $ 15,385     $ 15,756     $ 46,546     $ 47,288  
Asset management fees 16     48     42     220  
Commissions 18     52     65     102  
Other revenues 146     217     439     1,697  
Total Revenue 15,565     16,073     47,092     49,307  
OPERATING EXPENSES:              
Property operations 4,967     4,687     14,288     13,804  
Non-REIT management and leasing services 1     23     25     59  
Depreciation and amortization 5,066     6,045     16,169     20,943  
Impairment of notes receivable         5,000      
Impairment of assets held for sale 400         1,547      
Corporate general & administrative 1,349     1,703     4,543     6,479  
Other operating expenses     250         250  
Total Operating Expenses 11,783     12,708     41,572     41,535  
(Loss) gain on disposal of properties (81 )   1,257     1,427     2,312  
Operating Income 3,701     4,622     6,947     10,084  
Interest income 1     1     2     3  
Interest expense (4,654 )   (5,183 )   (14,394 )   (14,940 )
Net Loss from Continuing Operations Before Income Taxes (952 )   (560 )   (7,445 )   (4,853 )
Income tax expense (8 )   (30 )   (23 )   (72 )
Net Loss from Continuing Operations (960 )   (590 )   (7,468 )   (4,925 )
Income from Discontinued Operations             903  
Net Loss (960 )   (590 )   (7,468 )   (4,022 )
Less: Net (loss) income attributable to noncontrolling interests (1 )   12     (100 )   (70 )
Net Loss Attributable to Wheeler REIT (959 )   (602 )   (7,368 )   (3,952 )
Preferred Stock dividends - declared     (3,208 )       (9,621 )
Preferred Stock dividends - undeclared (3,657 )       (10,972 )    
Net Loss Attributable to Wheeler REIT Common Shareholders $ (4,616 )   $ (3,810 )   $ (18,340 )   $ (13,573 )
               
               
Loss per share from continuing operations (basic and diluted) $ (0.48 )   $ (0.41 )   $ (1.90 )   $ (1.58 )
Income per share from discontinued operations             0.10  
  $ (0.48 )   $ (0.41 )   $ (1.90 )   $ (1.48 )
               
Weighted-average number of shares:              
Basic and Diluted 9,693,271     9,385,666     9,664,582     9,179,366  
               


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

  September 30,
2019
  December 31,
2018
  (unaudited)    
ASSETS:      
Investment properties, net $ 418,338     $ 436,006  
Cash and cash equivalents 5,233     3,544  
Restricted cash 17,294     14,455  
Rents and other tenant receivables, net 5,947     5,539  
Notes receivable, net     5,000  
Assets held for sale 1,756     6,118  
Above market lease intangibles, net 5,678     7,346  
Operating lease right-of-use assets 11,698      
Deferred costs and other assets, net 23,257     30,073  
Total Assets $ 489,201     $ 508,081  
LIABILITIES:      
Loans payable, net $ 342,811     $ 360,190  
Liabilities associated with assets held for sale 2,060     4,520  
Below market lease intangibles, net 7,909     10,045  
Operating lease liabilities 11,921      
Accounts payable, accrued expenses and other liabilities 10,592     12,116  
Total Liabilities 375,293     386,871  
Series D Cumulative Convertible Preferred Stock (no par value, 4,000,000 shares authorized, 3,600,636 shares issued and outstanding; $99.24 million and $91.98 million aggregate liquidation preference, respectively) 84,657     76,955  
       
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 shares issued and outstanding; $46.90 million aggregate liquidation preference) 41,065     41,000  
Common Stock ($0.01 par value, 18,750,000 shares authorized, 9,693,271 and 9,511,464 shares issued and outstanding, respectively) 97     95  
Additional paid-in capital 233,861     233,697  
Accumulated deficit (248,319 )   (233,184 )
Total Shareholders’ Equity 27,157     42,061  
Noncontrolling interests 2,094     2,194  
Total Equity 29,251     44,255  
Total Liabilities and Equity $ 489,201     $ 508,081  


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

  Three Months Ended September 30,
  Same Store   Non-same Store   Total   Period Over Period Changes
  2019   2018   2019   2018   2019   2018   $   %
                               
              (in thousands, unaudited)            
Net (Loss) Income $ (956 )   $ (1,887 )   $ (4 )   $ 1,297     $ (960 )   $ (590 )   $ (370 )   (62.71 )%
Depreciation and amortization of real estate assets 4,031     4,932     1,035     1,113     5,066     6,045     (979 )   (16.20 )%
Loss (gain) on disposal of properties         81     (1,257 )   81     (1,257 )   1,338     106.44 %
Impairment of assets held for sale 400                 400         400     100.00 %
FFO $ 3,475     $ 3,045     $ 1,112     $ 1,153     $ 4,587     $ 4,198     $ 389     9.27 %
                               


  Nine Months Ended September 30,
  Same Store   Non-same Store   Total   Period Over Period Changes
  2019   2018   2019   2018   2019   2018   $   %
                               
              (in thousands, unaudited)            
Net (Loss) Income $ (8,183 )   $ (7,203 )   $ 715     $ 3,181     $ (7,468 )   $ (4,022 )   $ (3,446 )   (85.68 )%
Depreciation and amortization of real estate assets 13,049     17,235     3,120     3,708     16,169     20,943     (4,774 )   (22.80 )%
Gain on disposal of properties         (1,427 )   (2,312 )   (1,427 )   (2,312 )   885     38.28 %
Gain on disposal of properties-discontinued operations             (903 )       (903 )   903     100.00 %
Impairment of assets held for sale 400         1,147         1,547         1,547     100.00 %
FFO $ 5,266     $ 10,032     $ 3,555     $ 3,674     $ 8,821     $ 13,706     $ (4,885 )   (35.64 )%
                               


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

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2019   2018   2019   2018
Net Loss $ (960 )   $ (590 )   $ (7,468 )   $ (4,022 )
Depreciation and amortization of real estate assets 5,066     6,045     16,169     20,943  
Loss (Gain) on disposal of properties 81     (1,257 )   (1,427 )   (2,312 )
Gain on disposal of properties-discontinued operations             (903 )
Impairment of assets held for sale 400         1,547      
FFO 4,587     4,198     8,821     13,706  
Preferred stock dividends declared     (3,208 )       (9,621 )
Preferred stock dividends undeclared (3,657 )       (10,972 )    
Preferred stock accretion adjustments 169     169     510     509  
FFO available to common shareholders and common unitholders 1,099     1,159     (1,641 )   4,594  
Impairment of note receivable         5,000      
Acquisition and development costs 1     82     25     346  
Capital related costs 4     110     140     408  
Other non-recurring and non-cash expenses (1) 35         61     103  
Share-based compensation 72     241     244     727  
Straight-line rental revenue, net straight-line expense (86 )   (348 )   (1 )   (937 )
Loan cost amortization 409     625     1,336     1,682  
(Below) above market lease amortization (165 )   (313 )   (585 )   (421 )
Recurring capital expenditures and tenant improvement reserves (276 )   (284 )   (846 )   (858 )
AFFO $ 1,093     $ 1,272     $ 3,733     $ 5,644  
               
Weighted Average Common Shares 9,693,271     9,385,666     9,664,582     9,179,366  
Weighted Average Common Units 235,032     297,355     235,032     433,403  
Total Common Shares and Units 9,928,303     9,683,021     9,899,614     9,612,769  
FFO per Common Share and Common Units $ 0.11     $ 0.12     $ (0.17 )   $ 0.48  
AFFO per Common Share and Common Units $ 0.11     $ 0.13     $ 0.38     $ 0.59  

(1) Other non-recurring expenses are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Quarterly Report on Form 10-Q for the periods ended September 30, 2019.


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

  Three Months Ended September 30,
  Same Store   Non-same Store   Total
  2019   2018   2019   2018   2019   2018
                       
  (in thousands, unaudited)
Net (Loss) Income $ (956 )   $ (1,887 )   $ (4 )   $ 1,297     $ (960 )   $ (590 )
Adjustments:                      
Income tax expense 8     30             8     30  
Interest expense 3,909     4,241     745     942     4,654     5,183  
Interest income (1 )   (1 )           (1 )   (1 )
Loss (gain) on disposal of properties         81     (1,257 )   81     (1,257 )
Other operating expenses             250         250  
Corporate general & administrative 1,324     1,675     25     28     1,349     1,703  
Impairment of assets held for sale 400                 400      
Depreciation and amortization 4,031     4,932     1,035     1,113     5,066     6,045  
Non-REIT management and leasing services 1     23             1     23  
Asset management and commission revenues (34 )   (100 )           (34 )   (100 )
Property Net Operating Income $ 8,682     $ 8,913     $ 1,882     $ 2,373     $ 10,564     $ 11,286  
                       
Property revenues $ 12,733     $ 12,712     $ 2,798     $ 3,261     $ 15,531     $ 15,973  
Property expenses 4,051     3,799     916     888     4,967     4,687  
Property Net Operating Income $ 8,682     $ 8,913     $ 1,882     $ 2,373     $ 10,564     $ 11,286  


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

  Nine Months Ended September 30,
  Same Store   Non-same Store   Total
  2019   2018   2019   2018   2019   2018
                       
  (in thousands, unaudited)
Net (Loss) Income $ (8,183 )   $ (7,203 )   $ 715     $ 3,181     $ (7,468 )   $ (4,022 )
Adjustments:                      
Income from Discontinued Operations             (903 )       (903 )
Income tax expense 23     72             23     72  
Interest expense 11,915     12,226     2,479     2,714     14,394     14,940  
Interest income (2 )   (3 )           (2 )   (3 )
Gain on disposal of properties         (1,427 )   (2,312 )   (1,427 )   (2,312 )
Other operating expenses             250         250  
Corporate general & administrative 4,388     6,321     155     158     4,543     6,479  
Impairment of assets held for sale 400         1,147         1,547      
Impairment of notes receivable 5,000                 5,000      
Depreciation and amortization 13,049     17,235     3,120     3,708     16,169     20,943  
Non-REIT management and leasing services 25     59             25     59  
Asset management and commission revenues (107 )   (322 )           (107 )   (322 )
Property Net Operating Income $ 26,508     $ 28,385     $ 6,189     $ 6,796     $ 32,697     $ 35,181  
                       
Property revenues $ 38,142     $ 39,668     $ 8,843     $ 9,317     $ 46,985     $ 48,985  
Property expenses 11,634     11,283     2,654     2,521     14,288     13,804  
Property Net Operating Income $ 26,508     $ 28,385     $ 6,189     $ 6,796     $ 32,697     $ 35,181  

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

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2019   2018   2019   2018
Net Loss $ (960 )   $ (590 )   $ (7,468 )   $ (4,022 )
Add back: Depreciation and amortization (1) 4,901     5,732     15,584     20,522  
  Interest Expense (2) 4,654     5,183     14,394     14,940  
  Income tax expense 8     30     23     72  
EBITDA 8,603     10,355     22,533     31,512  
Adjustments for items affecting comparability:              
  Acquisition and development costs 1     82     25     346  
  Capital related costs 4     110     140     408  
  Other non-recurring and non-cash expenses (3) 35         61     103  
  Impairment of notes receivable         5,000      
  Impairment of assets held for sale 400         1,547      
  Loss (Gain) on disposal of properties 81     (1,257 )   (1,427 )   (2,312 )
  Gain on disposal of properties - discontinued operations             (903 )
Adjusted EBITDA $ 9,124     $ 9,290     $ 27,879     $ 29,154  

(1) Includes above (below) market lease amortization.
(2) Includes loan cost amortization.
(3) Other non-recurring expenses are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Quarterly Report on Form 10-Q for the period ended September 30, 2019.