Market Overview

Whitestone REIT Announces 13% Increase in FFO Core Per Share and 9% Increase in Income From Continuing Operations Per Share for 2015; Introduces 2016 Full Year Guidance

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HOUSTON, Feb. 24, 2016 (GLOBE NEWSWIRE) -- Whitestone REIT (NYSE: WSR) ("Whitestone" or the "Company") today announced operating results for the fourth quarter and year ended December 31, 2015.  All per share amounts presented in this news release are on a diluted per common share and operating partnership ("OP") unit basis unless stated otherwise.

Company Highlights

For the year ended December 31, 2015 (Compared to 2014):

  • 29.1% increase in revenues
  • 31.4% increase in net operating income ("NOI")
  • 28.1% increase in income from continuing operations
  • 27.0% increase in Funds From Operations ("FFO") Core
  • 12.5% increase in FFO Core to $1.35 on a per share basis
  • 81.0% dividend to FFO Core ratio
  • 9.4% increase in rental rates on new and renewal leases on a GAAP basis
  • $150 million in property acquisitions, the fourth consecutive year in excess of $100 million


For the quarter ended December 31, 2015 (Compared to Fourth Quarter of 2014):

  • 33.3% increase in revenues
  • 32.7% increase in NOI
  • 133.8% increase in income from continuing operations
  • 28.0% increase in FFO Core
  • 6.3% increase in FFO Core to $0.34 on a per share basis
  • 89.6% occupancy in the Company's retail properties, up 90 basis points from December 31, 2014


Whitestone Overview

A quality portfolio of properties that offer significant growth potential meeting the daily necessities of fast-growing communities.  Whitestone's proven and differentiated approach to building the optimal mix of tenants that provide convenience and high-demand services reduces risk and generates superior financial results for both customers and Whitestone investors.

CEO Comments

"We are proud of our strong financial results for the quarter and the year," said Jim Mastandrea, Chairman and Chief Executive Officer.  "We are also pleased with the significant progress that we made this year with our 'internet-resistant' business model as we continued to focus on our goals of increasing occupancy, identifying growth opportunities within our portfolio, closing on accretive acquisitions in large, rapidly-growing markets and creating value for our shareholders." 

Mr. Mastandrea concluded, "Our neighborhood centers are located in the top growing markets of Austin, San Antonio, Dallas-Fort Worth, Houston and Phoenix and on the best retail corners of affluent communities with high household incomes.  As I look ahead, I am optimistic that our innovative 'internet-resistant' operating model, supported by our flexible capital structure, will continue to generate strong financial results, provide us with the means to further grow our asset base through the redevelopment of core properties and the acquisition of new properties, provide strong coverage for our dividend and further enhance shareholder value."   

Real Estate Portfolio Update

Community Centered PropertiesTM Portfolio Statistics:
As of December 31, 2015, Whitestone owned 70 Community Centered PropertiesTM with 6.0 million square feet of gross leasable area.  The portfolio is comprised of 44 properties in Texas, 25 in Arizona and one in Illinois that offer significant growth potential meeting the daily necessities of fast-growing communities.  In Texas and Arizona, Whitestone's Community Centered PropertiesTM are located in Austin (4), San Antonio (3), Dallas-Fort Worth (7), Houston (30) and Phoenix (25).  In addition to being business friendly, these are five of the top markets in the country in terms of size, economic strength and population growth.  Between 2000 and 2014, all of these cities experienced double-digit growth in population, with Austin at +35.8%, San Antonio at +23.4%, Dallas-Fort Worth at +20.5%, Phoenix at +15.8% and Houston at +13.2%.  The neighborhood centers in these markets are located on the best retail corners embedded in affluent communities.

With its consumer-centric discipline, the Company strives for a tenant mix of national, regional and local tenants at each of its properties that meet the daily needs of the residents living in the surrounding neighborhoods.  At the end of the fourth quarter, the Company's diversified tenant base was comprised of 1,471 tenants, with the largest tenant accounting for only 2.6% of annualized base rental revenues.  Lease terms range from less than one year for smaller tenants to over 15 years for larger tenants.  The leases generally include minimum monthly lease payments and tenant reimbursements for payment of taxes, insurance and maintenance, and typically exclude restrictive lease clauses.

Leasing Activity:
During the fourth quarter, the leasing team signed 104 leases totaling 257,904 square feet in new, expansion and renewal leases, compared to 75 leases totaling 183,184 square feet in the fourth quarter of 2014.  The total lease value added during the quarter was $19.0 million compared to $12.0 million during the same period last year.  For the full year, total lease value added was $61.8 million, up 15.8% when compared to 2014.

The Company's total occupancy stood at 87.1% at year end.

Acquisition Activity:
In 2015, the Company spent a record $150 million acquiring six high-quality Community Centered PropertiesTM, which are all embedded in affluent, high income neighborhoods, and a strategic hard corner, at an existing center in our Phoenix market.  The acquired properties added approximately 500,000 square feet to the Company's portfolio.  Reflecting the continuing diversification of Whitestone's geographic footprint away from Houston, four of the retail properties are in Austin and one each is in San Antonio and Dallas. 

Balance Sheet and Liquidity

Balance Sheet:
Reflecting the Company's acquisition activity during the year and selective development and redevelopment, undepreciated real estate assets increased $161.9 million, or 24%, to $835.5 million at December 31, 2015 compared to December 31, 2014.

Liquidity, Debt and Credit Facility:
At December 31, 2015, 50 of the Company's 70 properties were unencumbered by mortgage debt, with an undepreciated cost basis of $584.6 million.  The Company had total real estate debt of $499.7 million, of which $372.1 million, or approximately 74%, was subject to fixed interest rates.  The Company's weighted average interest rate on all fixed rate debt as of the end of the fourth quarter was 3.9% and the weighted average remaining term was 6.1 years.

At quarter end, Whitestone had $2.6 million of cash available on its balance sheet and $172.4 million of available capacity under its credit facility, before the $200 million accordion option.

In November, the Company enhanced its capital structure by amending its $500 million unsecured credit facility.  The amendment extended and laddered the maturity dates of the revolver and two term loans that existed at the time, and provided for the conversion of $100 million of then outstanding borrowings under the revolver to a new seven-year term loan.

Dividend

On December 18, 2015, the Company declared a quarterly cash distribution of $0.285 per common share and OP unit for the first quarter of 2016, to be paid in three equal installments of $0.095 in January, February and March of 2016.

2016 FFO Core Guidance

The Company's FFO Core guidance for 2016 is a range of $1.33 to $1.39 per share.  The Company's FFO (defined in accordance with the National Association of Real Estate Investment Trust's ("NAREIT") definition) guidance is a range of $1.06 to $1.12.  This guidance reflects the Board's and management's view of current and future market conditions, as well as the earnings impact of events referenced elsewhere in this release and during the Company's conference call.  This guidance does not include the operational or capital impact of any future unannounced acquisition or disposition activity.  Please refer to the "2016 Financial Guidance" section of the supplemental data package for the full list of guidance information.

Conference Call Information

In conjunction with the issuance of its financial results, you are invited to listen to the Company's earnings release conference call to be broadcast live on Thursday, February 25, 2016 at 11:00 A.M. Eastern Time.  The call will be led by James C. Mastandrea, Chairman and Chief Executive Officer, and David K. Holeman, Chief Financial Officer.  Conference call access information is as follows:

Toll-Free Number (for domestic participants):(877) 780-3381
Toll Number (for international participants):    (719) 457-2607


The conference call will be recorded and a telephone replay will be available through Thursday, March 10, 2016.   Replay access information is as follows:

Toll-Free Number (for domestic participants):(877) 870-5176
Toll Number (for international participants):(858) 384-5517
Pass Code (for all participants):  5960416


To listen to a live webcast of the conference call, click on the Investor Relations tab of the Company's website, www.whitestonereit.com, and then click on the webcast link.  A replay of the call will be available on Whitestone's website via the webcast link until the Company's next earnings release.  Additional information about Whitestone can be found on the Company's website.

The fourth quarter and full year earnings release and supplemental data package will be located in the Investor Relations section of the Company's website.  For those without internet access, the earnings release and supplemental data package will be available by mail upon request.  To receive a copy, please call the Company's Investor Relations line at (713) 435-2219.

Supplemental Financial Information

Supplemental materials and details regarding Whitestone's results of operations, communities and tenants are available on the Company's website at www.whitestonereit.com.

About Whitestone REIT

Whitestone REIT (NYSE: WSR) is a fully integrated real estate investment trust ("REIT") that owns, redevelops, repositions, leases, manages and operates Community Centered PropertiesTM.  Whitestone focuses on value creation in its community centers, concentrating on local service-oriented tenants.  Whitestone's diversified tenant base provides service offerings including grocery, dining, health and wellness, education, services, entertainment and specialty retail.  Founded in 1998, the Company is internally managed with a portfolio of 70 commercial properties in Texas, Arizona and Illinois.  For additional information about the Company, please visit www.whitestonereit.com.

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by the Company's use of forward-looking terminology, such as "may," "will," "plan," "expect," "intend," "anticipate," "believe," "continue" or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters.

The following are some of the factors that could cause the Company's actual results and its expectations to differ materially from those described in the Company's forward-looking statements: the Company's ability to meet its assumptions regarding its earnings guidance, including its ability to execute effectively its acquisition and disposition strategy, to continue to execute its development pipeline on schedule and at the expected costs, and its ability to grow its NOI as expected, which could be impacted by a number of factors, including, among other things, its ability to continue to renew leases or re-let space on attractive terms and to otherwise address its leasing rollover; the Company's ability to successfully identify and consummate suitable acquisitions; current adverse market and economic conditions; lease terminations or lease defaults; the impact of competition on the Company's efforts to renew existing leases; changes in the economies and other conditions of the specific markets in which the Company operates; economic and regulatory changes; the success of the Company's real estate strategies and investment objectives; the Company's ability to continue to qualify as a REIT under the Internal Revenue Code; and other factors detailed in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents the Company files with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and the Company does not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

This release contains supplemental financial measures that are not calculated pursuant to U.S. generally accepted accounting principles ("GAAP") including FFO, FFO Core, and NOI. Following are explanations and reconciliations of these metrics to their most comparable GAAP metric.
FFO: Management believes that FFO is a useful measure of the Company's operating performance. The Company computes FFO as defined by NAREIT, which states that FFO should represent net income available to common shareholders (computed in accordance with GAAP) excluding gains or losses from sales of operating assets, impairment charges and extraordinary items, plus depreciation and amortization of operating properties, including the Company's share of unconsolidated real estate joint ventures and partnerships. FFO does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of the Company's performance or to cash flow from operations as a measure of liquidity or ability to make distributions and service debt.

Management considers FFO a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, management believes that FFO provides a more meaningful and accurate indication of the Company's performance and useful information for the investment community to compare Whitestone to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

Other REITs may use different methodologies for calculating FFO, and accordingly, the Company's FFO may not be comparable to other REITs. The Company presents FFO per diluted share calculations that are based on the outstanding dilutive common shares plus the outstanding OP units for the periods presented.

FFO Core: Management believes that the computation of FFO in accordance with NAREIT's definition includes certain non-cash and non-comparable items that affect the Company's period-over-period performance. These items include, but are not limited to, legal settlements, non-cash share-based compensation expense, rent support agreement payments received from sellers on acquired assets and acquisition costs. In addition, the Company believes that FFO Core is a useful supplemental measure for the investing community to use in comparing the Company to other REITs as many REITs provide some form of adjusted or modified FFO. However, other REITs may use different adjustments, and the Company's FFO Core may not be comparable to the adjusted or modified FFO of other REITs.

NOI: Management believes that NOI is a useful measure of the Company's property operating performance. The Company defines NOI as operating revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Because NOI excludes general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets and capital expenditures and leasing costs, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income. The Company uses NOI to evaluate its operating performance since NOI allows the Company to evaluate the impact of factors, such as occupancy levels, lease structure, lease rates and tenant base, have on the Company's results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company's property and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of property performance in the real estate industry. However, NOI should not be viewed as a measure of the Company's overall financial performance since it does not reflect general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to that of other REITs.


Whitestone REIT and Subsidiaries 
CONSOLIDATED BALANCE SHEETS 
(in thousands, except per share data) 
   
 December 31, 
  2015   2014  
ASSETS 
Real estate assets, at cost 
Property $  835,538  $673,655  
Accumulated depreciation   (89,580)   (71,587) 
Total real estate assets   745,958    602,068  
Cash and cash equivalents   2,587    4,236  
Restricted cash   121     
Marketable securities   435    973  
Escrows and acquisition deposits   6,668    4,092  
Accrued rents and accounts receivable, net of allowance for doubtful accounts   15,466    11,834  
Unamortized lease commissions and loan costs   9,970    8,879  
Prepaid expenses and other assets   2,672    2,215  
Total assets $783,877  $634,297  
LIABILITIES AND EQUITY 
Liabilities:     
Notes payable $  499,747  $394,093  
Accounts payable and accrued expenses   24,051    15,882  
Tenants' security deposits   5,254    4,372  
Dividends and distributions payable   7,834    6,627  
Total liabilities   536,886    420,974  
Commitments and contingencies:   —     
Equity:     
Preferred shares, $0.001 par value per share; 50,000,000 shares authorized; none issued and outstanding as of December 31, 2015 and December 31, 2014, respectively       
Common shares, $0.001 par value per share; 400,000,000 shares authorized; 26,991,493 and 22,835,695 issued and outstanding as of December 31, 2015 and December 31, 2014, respectively   27    23  
Additional paid-in capital   359,971    304,078  
Accumulated deficit   (116,895)   (93,938) 
Accumulated other comprehensive loss   (129)   (91) 
Total Whitestone REIT shareholders' equity   242,974    210,072  
Noncontrolling interest in subsidiary   4,017    3,251  
Total equity   246,991    213,323  
Total liabilities and equity $783,877  $634,297  

 

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share data)
 
  Year Ended December 31,
   2015   2014   2013 
Property revenues      
Rental revenues $71,843  $56,293  $47,297 
Other revenues   21,573    16,089    13,195 
Total property revenues   93,416    72,382    60,492 
       
Property expenses      
Property operation and maintenance   18,698    15,405    14,079 
Real estate taxes   12,637    9,747    8,599 
Total property expenses   31,335    25,152    22,678 
       
Other expenses (income)      
General and administrative   20,312    15,274    10,912 
Depreciation and amortization   19,761    15,725    13,100 
Interest expense   14,910    10,579    9,975 
Interest, dividend and other investment income   (313)   (90)   (136)
Total other expense   54,670    41,488    33,851 
       
Income from continuing operations before loss on sale or disposal of assets and income taxes   7,411    5,742    3,963 
       
Provision for income taxes   (372)   (282)   (293)
Loss on sale or disposal of assets   (185)   (111)   (49)
Income from continuing operations   6,854    5,349    3,621 
       
Income from discontinued operations   11    510    298 
Gain on sale of property from discontinued operations      1,887    
Income from discontinued operations   11    2,397    298 
       
Net income   6,865    7,746    3,919 
       
Less: Net income attributable to noncontrolling interests   116    160    125 
       
Net income attributable to Whitestone REIT $  6,749  $  7,586  $  3,794 
 
 
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share data)
   
  Year Ended December 31,
   2015   2014   2013 
Basic Earnings Per Share:      
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares $  0.25  $  0.23  $  0.19 
Income from discontinued operations attributable to Whitestone REIT      0.10    0.02 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares $  0.25  $  0.33  $  0.21 
Diluted Earnings Per Share:      
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares $  0.24  $  0.22  $  0.19 
Income from discontinued operations attributable to Whitestone REIT      0.10    0.01 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares $  0.24  $  0.32  $  0.20 
       
Weighted average number of common shares outstanding:      
Basic   24,631    22,278    18,027 
Diluted   25,683    22,793    18,273 
       
Distributions declared per common share / OP unit $1.1400  $1.1400  $1.1400 
       
Consolidated Statements of Comprehensive Income      
       
Net income $  6,865  $  7,746  $  3,919 
       
Other comprehensive gain (loss)      
       
Unrealized gain (loss) on cash flow hedging activities   46    (136)   173 
Unrealized gain (loss) on available-for-sale marketable securities   (85)   96    180 
       
Comprehensive income   6,826    7,706    4,272 
       
Less: Comprehensive income attributable to noncontrolling interests   115    160    136 
       
Comprehensive income attributable to Whitestone REIT $  6,711  $  7,546  $  4,136 

 

Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share data)
     
  Three Months Ended December 31, Twelve Months Ended December 31,
   2015   2014   2015   2014 
Property revenues (unaudited) (unaudited)    
Rental revenues $  19,417  $  14,829  $71,843  $56,293 
Other revenues   6,178    4,376    21,573    16,089 
Total property revenues   25,595    19,205    93,416    72,382 
         
Property expenses        
Property operation and maintenance   5,453    3,868    18,698    15,405 
Real estate taxes   3,334    2,675    12,637    9,747 
Total property expenses   8,787    6,543    31,335    25,152 
         
Other expenses (income)        
General and administrative   5,142    4,523    20,312    15,274 
Depreciation and amortization   5,373    4,138    19,761    15,725 
Interest expense   4,246    3,054    14,910    10,579 
Interest, dividend and other investment income   (69)   (19)   (313)   (90)
Total other expense   14,692    11,696    54,670    41,488 
         
Income from continuing operations before loss on sale or disposal of assets and income taxes   2,116    966    7,411    5,742 
         
Provision for income taxes   (98)   (74)   (372)   (282)
(Loss) gain on sale or disposal of assets   63    (2)   (185)   (111)
Income from continuing operations   2,081    890    6,854    5,349 
         
Income from discontinued operations   8    136    11    510 
Gain on sale of property from discontinued operations      1,887       1,887 
Income from discontinued operations   8    2,023    11    2,397 
         
Net income   2,089    2,913    6,865    7,746 
         
Less: Net income attributable to noncontrolling interests   38    51    116    160 
         
Net income attributable to Whitestone REIT $  2,051  $  2,862  $  6,749  $  7,586 
                 
 
Whitestone REIT and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share data)
 
  Three Months Ended December 31, Twelve Months Ended December 31,
   2015   2014   2015   2014 
  (unaudited) (unaudited)    
Basic Earnings Per Share:        
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares $  0.07  $  0.04  $  0.25  $  0.23 
Income from discontinued operations attributable to Whitestone REIT      0.08       0.10 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares $  0.07  $  0.12  $  0.25  $  0.33 
Diluted Earnings Per Share:        
Income from continuing operations attributable to Whitestone REIT excluding amounts attributable to unvested restricted shares $  0.07  $  0.03  $  0.24  $  0.22 
Income from discontinued operations attributable to Whitestone REIT      0.09       0.10 
Net income attributable to common shareholders excluding amounts attributable to unvested restricted shares $  0.07  $  0.12  $  0.24  $  0.32 
         
Weighted average number of common shares outstanding:        
Basic   26,540    22,564    24,631    22,278 
Diluted   27,560    23,209    25,683    22,793 
         
Distributions declared per common share / OP unit $  0.2850  $  0.2850  $1.1400  $1.1400 
         
Consolidated Statements of Comprehensive Income        
         
Net income $  2,089  $  2,913  $  6,865  $  7,746 
         
Other comprehensive gain (loss)        
         
Unrealized gain (loss) on cash flow hedging activities   506    (184)   46    (136)
Unrealized gain (loss) on available-for-sale marketable securities   21    47    (85)   96 
         
Comprehensive income   2,616    2,776    6,826    7,706 
         
Less: Comprehensive income attributable to noncontrolling interests   46    49    115    160 
         
Comprehensive income attributable to Whitestone REIT $  2,570  $  2,727  $  6,711  $  7,546 

 

Whitestone REIT and Subsidiaries 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
(in thousands) 
  Year Ended December 31, 
   2015   2014   2013  
Cash flows from operating activities:       
Net income from continuing operations $  6,854  $  5,349  $  3,621  
Net income from discontinued operations   11    2,397    298  
Net income   6,865    7,746    3,919  
Adjustments to reconcile net income to net cash provided by operating activities:       
Depreciation and amortization   19,761    15,725    13,100  
Amortization of deferred loan costs   1,212    899    1,046  
Amortization of notes payable discount   295    304    463  
Gain on sale of marketable securities   (44)   —    (41) 
Loss on sale or disposal of assets and properties   185    111    49  
Bad debt expense   1,974    1,602    1,638  
Share-based compensation   7,337    4,631    2,284  
Changes in operating assets and liabilities:       
Escrows and acquisition deposits   (2,576)   (1,998)   4,920  
Accrued rent and accounts receivable   (5,606)   (3,668)   (3,589) 
Related party receivable         652  
Unamortized lease commissions   (1,918)   (1,526)   (1,170) 
Prepaid expenses and other assets   394    605    938  
Accounts payable and accrued expenses  7,419
    2,257    (1,242) 
Tenants' security deposits   882    900    561  
Net cash provided by operating activities   36,169    25,191    23,230  
Net cash provided by operating activities of discontinued operations   11    450    654  
Cash flows from investing activities:       
Acquisitions of real estate   (147,950)   (129,439)   (119,102) 
Additions to real estate   (12,719)   (9,330)   (6,138) 
Proceeds from sales of marketable securities   496       747  
Net cash used in investing activities   (160,173)   (138,769)   (124,493) 
Net cash provided by (used in) investing activities of discontinued operations   —    7,311    (153) 
Cash flows from financing activities:       
Distributions paid to common shareholders   (28,457)   (25,539)   (20,294) 
Distributions paid to OP unit holders   (489)   (550)   (691) 
Proceeds from issuance of common shares, net of offering costs   49,649    6,458    63,887  
Payments of exchange offer costs      (136)   (40) 
Proceeds from revolving credit facility, net   107,500    85,300    65,800  
Proceeds from notes payable      47,300    105,710  
Repayments of notes payable   (2,847)   (3,306)   (110,829) 
Payments of loan origination costs   (1,534)   (3,036)   (2,796) 
Change in restricted cash   (121)       
Repurchase of common shares   (1,357)   (24)    
Net cash provided by financing activities   122,344    106,467    100,747  
Net cash used in financing activities of discontinued operations   —    (2,905)   (38) 
Net decrease in cash and cash equivalents   (1,649)   (2,255)   (53) 
Cash and cash equivalents at beginning of period   4,236    6,491    6,544  
Cash and cash equivalents at end of period $  2,587  $  4,236  $  6,491  
        
  
Whitestone REIT and Subsidiaries 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
Supplemental Disclosure 
(in thousands) 
        
  Year Ended December 31, 
   2015   2014   2013  
Supplemental disclosure of cash flow information:       
Cash paid for interest $  13,470  $  9,562  $  9,179  
Cash paid for taxes $  315  $  238  $  237  
Non cash investing and financing activities:       
Disposal of fully depreciated real estate $  57  $  6,092  $  278  
Financed insurance premiums $  1,057  $  888  $  883  
Value of shares issued under dividend reinvestment plan $  95  $  94  $  99  
Value of common shares exchanged for OP units $  174  $  1,484  $  1,236  
Change in fair value of available-for-sale securities $  85  $  96  $  180  
Change in fair value of cash flow hedge $  (46) $  (136) $  173  
Debt assumed with acquisitions of real estate  $  $  2,586  $  11,100  
Interest supplement assumed with acquisition of real estate  $   $  $  932  
Acquisition of real estate in exchange for OP units $  1,333   $   $  

 

Whitestone REIT and Subsidiaries  
RECONCILIATION OF NON-GAAP MEASURES 
(in thousands, except per share and per unit data) 
 
  Three Months Ended Year Ended 
  December 31, December 31, 
FFO AND FFO CORE  2015   2014   2015   2014   2013  
Net income attributable to Whitestone REIT $  2,051  $  2,862  $  6,749  $  7,586  $  3,794  
Depreciation and amortization of real estate assets (1)   5,342    4,203    19,646    15,950    13,339  
Loss (gain) on disposal of assets (1)   (63)   (1,885)   185    (1,776)   56  
Net income attributable to noncontrolling interests (1)   38    51    116    160    125  
FFO   7,368    5,231    26,696    21,920    17,314  
            
Non cash share-based compensation expense   2,137    1,644    7,339    4,736    2,284  
Acquisition costs   150    668    1,719    1,341    1,010  
Rent support agreement payments received   —          156    188  
FFO Core $  9,655  $  7,543  $35,754  $28,153  $20,796  
            
FFO PER SHARE AND OP UNIT CALCULATION           
Numerator:           
FFO $  7,368  $  5,231  $26,696  $21,920  $17,314  
Distributions paid on unvested restricted common shares   (128)   (74)   (528)   (201)   (50) 
FFO excluding amounts attributable to unvested restricted common shares $  7,240  $  5,157  $26,168  $21,719  $17,264  
FFO Core excluding amounts attributable to unvested restricted common shares $  9,527  $  7,469  $35,226  $27,952  $20,746  
            
Denominator:           
Weighted average number of total common shares - basic   26,540    22,564    24,631    22,278    18,027  
Weighted average number of total noncontrolling OP units - basic   500    400    430    471    596  
Weighted average number of total commons shares and noncontrolling OP units - basic   27,040    22,964    25,061    22,749    18,623  
            
Effect of dilutive securities:           
Unvested restricted shares   1,020    645    1,052    515    246  
Weighted average number of total common shares and noncontrolling OP units - dilutive   28,060    23,609    26,113    23,264    18,869  
            
FFO per common share and OP unit - basic $  0.27  $  0.22  $  1.04  $  0.95  $  0.93  
FFO per common share and OP unit - diluted $  0.26  $  0.22  $  1.00  $  0.93  $  0.91  
            
FFO Core per common share and OP unit - basic $  0.35  $  0.33  $  1.41  $  1.23  $  1.11  
FFO Core per common share and OP unit - diluted $  0.34  $  0.32  $  1.35  $  1.20  $  1.10  
            
(1) Includes amounts from discontinued operations.  
            
Whitestone REIT and Subsidiaries
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except per share and per unit data)
 
            
  Three Months Ended Year Ended 
  December 31, December 31, 
   2015   2014   2015   2014   2013  
PROPERTY NET OPERATING INCOME           
Net income attributable to Whitestone REIT $  2,051  $  2,862  $  6,749  $  7,586  $  3,794  
General and administrative expenses   5,142    4,523    20,312    15,274    10,912  
Depreciation and amortization   5,373    4,138    19,761    15,725    13,100  
Interest expense   4,246    3,054    14,910    10,579    9,975  
Interest, dividend and other investment income   (69)   (19)   (313)   (90)   (136) 
Provision for income taxes   98    74    372    282    293  
Loss (gain) on disposal of assets   (63)   2    185    111    49  
Income from discontinued operations   (8)   (136)   (11)   (510)   (298) 
Gain on sale of property from discontinued operations      (1,887)      (1,887)    
Net income attributable to noncontrolling interests   38    51    116    160    125  
NOI $16,808  $12,662  $62,081  $47,230  $37,814  

 

Contact Whitestone REIT: Bob Aronson Director of Investor Relations Direct: (713) 435-2219; Mobile: (832) 364-8314

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