Brixmor Property Group Inc. 10-Q

Item 1. Financial Statements BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands, except share information) September 30, 2022 December 31, 2021 Assets Real estate Land $ 1,830,251 $ 1,773,448 Buildings and improvements 9,043,590 8,654,966 10,873,841 10,428,414 Accumulated depreciation and amortization ( 2,943,592 ) ( 2,813,329 ) Real estate, net 7,930,249 7,615,085 Cash and cash equivalents 23,591 296,632 Restricted cash 7,661 1,111 Marketable securities 22,047 20,224 Receivables, net 249,039 234,873 Deferred charges and prepaid expenses, net 160,063 143,503 Real estate assets held for sale 30,001 16,131 Other assets 63,068 49,834 Total assets $ 8,485,719 $ 8,377,393 Liabilities Debt obligations, net $ 5,109,454 $ 5,164,518 Accounts payable, accrued expenses and other liabilities 548,084 494,529 Total liabilities 5,657,538 5,659,047 Commitments and contingencies (Note 15) — — Equity Common stock, $ 0.01 par value; authorized 3,000,000,000 shares; 309,040,132 and 306,337,045 shares issued and 299,913,140 and 297,210,053 shares outstanding 2,999 2,972 Additional paid-in capital 3,292,045 3,231,732 Accumulated other comprehensive income (loss) 8,028 ( 12,674 ) Distributions in excess of net income ( 474,891 ) ( 503,684 ) Total equity 2,828,181 2,718,346 Total liabilities and equity $ 8,485,719 $ 8,377,393 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues Rental income $ 304,643 $ 290,013 $ 908,903 $ 853,407 Other revenues 102 173 602 3,549 Total revenues 304,745 290,186 909,505 856,956 Operating expenses Operating costs 33,299 32,774 102,592 92,914 Real estate taxes 44,179 39,763 128,123 124,908 Depreciation and amortization 84,773 81,724 254,132 246,356 Impairment of real estate assets — — 4,597 1,898 General and administrative 29,094 25,309 86,796 76,415 Total operating expenses 191,345 179,570 576,240 542,491 Other income (expense) Dividends and interest 88 51 198 242 Interest expense ( 48,726 ) ( 48,918 ) ( 143,934 ) ( 147,601 ) Gain on sale of real estate assets 15,768 11,122 60,667 49,489 Loss on extinguishment of debt, net — ( 27,116 ) ( 221 ) ( 28,345 ) Other ( 789 ) 390 ( 2,937 ) 694 Total other expense ( 33,659 ) ( 64,471 ) ( 86,227 ) ( 125,521 ) Net income $ 79,741 $ 46,145 $ 247,038 $ 188,944 Net income per common share: Basic $ 0.26 $ 0.15 $ 0.82 $ 0.63 Diluted $ 0.26 $ 0.15 $ 0.82 $ 0.63 Weighted average shares: Basic 300,213 297,188 299,626 297,165 Diluted 301,341 298,269 300,784 298,209 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited, in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net income $ 79,741 $ 46,145 $ 247,038 $ 188,944 Other comprehensive income (loss) Change in unrealized gain on interest rate swaps, net (Note 6) 6,088 2,141 21,469 10,639 Change in unrealized loss on marketable securities ( 358 ) ( 16 ) ( 767 ) ( 169 ) Total other comprehensive income 5,730 2,125 20,702 10,470 Comprehensive income $ 85,471 $ 48,270 $ 267,740 $ 199,414 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited, in thousands, except per share data) Common Stock Number Amount Additional Paid-in Capital Accumulated Other Comprehensive Loss Distributions in Excess of Net Income Total Beginning balance, January 1, 2021 296,494 $ 2,965 $ 3,213,990 $ ( 28,058 ) $ ( 508,196 ) $ 2,680,701 Common stock dividends ($ 0.215 per common share) — — — — ( 65,120 ) ( 65,120 ) Equity based compensation expense — — 2,792 — — 2,792 Other comprehensive income — — — 5,572 — 5,572 Issuance of common stock 452 4 ( 4 ) — — — Share-based awards retained for taxes — — ( 5,113 ) — — ( 5,113 ) Net income — — — — 52,371 52,371 Ending balance, March 31, 2021 296,946 2,969 3,211,665 ( 22,486 ) ( 520,945 ) 2,671,203 Common stock dividends ($ 0.215 per common share) — — — — ( 64,344 ) ( 64,344 ) Equity based compensation expense — — 4,543 — — 4,543 Other comprehensive income — — — 2,773 — 2,773 Issuance of common stock 32 1 (1) — — — Share-based awards retained for taxes — — ( 259 ) — — ( 259 ) Net income — — — — 90,428 90,428 Ending balance, June 30, 2021 296,978 2,970 3,215,948 ( 19,713 ) ( 494,861 ) 2,704,344 Common stock dividends ($ 0.215 per common share) — — — — ( 64,340 ) ( 64,340 ) Equity based compensation expense — — 4,331 — — 4,331 Other comprehensive income — — — 2,125 — 2,125 Issuance of common stock 10 — — — — — Share-based awards retained for taxes — — ( 96 ) — — ( 96 ) Net income — — — — 46,145 46,145 Ending balance, September 30, 2021 296,988 $ 2,970 $ 3,220,183 $ ( 17,588 ) $ ( 513,056 ) $ 2,692,509 Beginning balance, January 1, 2022 297,210 $ 2,972 $ 3,231,732 $ ( 12,674 ) $ ( 503,684 ) $ 2,718,346 Common stock dividends ($ 0.240 per common share) — — — — ( 73,156 ) ( 73,156 ) Equity based compensation expense — — 4,620 — — 4,620 Other comprehensive income — — — 10,952 — 10,952 Issuance of common stock 2,278 23 43,825 — — 43,848 Share-based awards retained for taxes — — ( 10,458 ) — — ( 10,458 ) Net income — — — — 79,506 79,506 Ending balance, March 31, 2022 299,488 2,995 3,269,719 ( 1,722 ) ( 497,334 ) 2,773,658 Common stock dividends ($ 0.240 per common share) — — — — ( 72,534 ) ( 72,534 ) Equity based compensation expense — — 6,500 — — 6,500 Other comprehensive income — — — 4,020 — 4,020 Issuance of common stock 181 2 3,558 — — 3,560 Share-based awards retained for taxes — — ( 2 ) — — ( 2 ) Net income — — — — 87,791 87,791 Ending balance, June 30, 2022 299,669 2,997 3,279,775 2,298 ( 482,077 ) 2,802,993 Common stock dividends ($ 0.240 per common share) — — — — ( 72,555 ) ( 72,555 ) Equity based compensation expense — — 6,580 — — 6,580 Other comprehensive income — — — 5,730 — 5,730 Issuance of common stock 244 2 5,690 — — 5,692 Net income — — — — 79,741 79,741 Ending balance, September 30, 2022 299,913 $ 2,999 $ 3,292,045 $ 8,028 $ ( 474,891 ) $ 2,828,181 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 BRIXMOR PROPERTY GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) Nine Months Ended September 30, 2022 2021 Operating activities: Net income $ 247,038 $ 188,944 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 254,132 246,356 Accretion of debt premium and discount, net ( 2,147 ) ( 2,146 ) Deferred financing cost amortization 5,261 5,638 Accretion of above- and below-market leases, net ( 9,245 ) ( 9,931 ) Tenant inducement amortization and other 2,970 3,999 Impairment of real estate assets 4,597 1,898 Gain on sale of real estate assets ( 60,667 ) ( 49,489 ) Equity based compensation 16,414 10,818 Loss on extinguishment of debt, net 221 28,345 Changes in operating assets and liabilities: Receivables, net ( 14,369 ) 8,964 Deferred charges and prepaid expenses ( 36,775 ) ( 26,784 ) Other assets ( 284 ) ( 268 ) Accounts payable, accrued expenses and other liabilities 34,014 18,536 Net cash provided by operating activities 441,160 424,880 Investing activities: Improvements to and investments in real estate assets ( 233,127 ) ( 212,374 ) Acquisitions of real estate assets ( 409,688 ) ( 66,716 ) Proceeds from sales of real estate assets 171,017 124,437 Purchase of marketable securities ( 24,558 ) ( 16,906 ) Proceeds from sale of marketable securities 21,877 15,446 Net cash used in investing activities ( 474,479 ) ( 156,113 ) Financing activities: Repayment of borrowings under unsecured revolving credit facility ( 465,000 ) — Proceeds from borrowings under unsecured revolving credit facility 665,000 — Proceeds from unsecured notes — 847,735 Repayment of borrowings under unsecured term loans and notes ( 250,000 ) ( 850,000 ) Deferred financing and debt extinguishment costs ( 8,398 ) ( 33,577 ) Proceeds from issuances of common shares 53,100 — Distributions to common stockholders ( 217,414 ) ( 193,180 ) Repurchases of common shares in conjunction with equity award plans ( 10,460 ) ( 5,468 ) Net cash used in financing activities ( 233,172 ) ( 234,490 ) Net change in cash, cash equivalents and restricted cash ( 266,491 ) 34,277 Cash, cash equivalents and restricted cash at beginning of period 297,743 370,087 Cash, cash equivalents and restricted cash at end of period $ 31,252 $ 404,364 Reconciliation to consolidated balance sheets: Cash and cash equivalents $ 23,591 $ 397,198 Restricted cash 7,661 7,166 Cash, cash equivalents and restricted cash at end of period $ 31,252 $ 404,364 Supplemental disclosure of cash flow information: Cash paid for interest, net of amount capitalized of $ 2,215 and $ 2,836 $ 142,470 $ 145,358 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands, except unit information) September 30, 2022 December 31, 2021 Assets Real estate Land $ 1,830,251 $ 1,773,448 Buildings and improvements 9,043,590 8,654,966 10,873,841 10,428,414 Accumulated depreciation and amortization ( 2,943,592 ) ( 2,813,329 ) Real estate, net 7,930,249 7,615,085 Cash and cash equivalents 22,662 281,474 Restricted cash 7,661 1,111 Marketable securities 22,047 20,224 Receivables, net 249,039 234,873 Deferred charges and prepaid expenses, net 160,063 143,503 Real estate assets held for sale 30,001 16,131 Other assets 63,068 49,834 Total assets $ 8,484,790 $ 8,362,235 Liabilities Debt obligations, net $ 5,109,454 $ 5,164,518 Accounts payable, accrued expenses and other liabilities 548,084 494,529 Total liabilities 5,657,538 5,659,047 Commitments and contingencies (Note 15) — — Capital Partnership common units; 309,040,132 and 306,337,045 units issued and 299,913,140 and 297,210,053 units outstanding 2,819,224 2,715,863 Accumulated other comprehensive income (loss) 8,028 ( 12,675 ) Total capital 2,827,252 2,703,188 Total liabilities and capital $ 8,484,790 $ 8,362,235 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues Rental income $ 304,643 $ 290,013 $ 908,903 $ 853,407 Other revenues 102 173 602 3,549 Total revenues 304,745 290,186 909,505 856,956 Operating expenses Operating costs 33,299 32,774 102,592 92,914 Real estate taxes 44,179 39,763 128,123 124,908 Depreciation and amortization 84,773 81,724 254,132 246,356 Impairment of real estate assets — — 4,597 1,898 General and administrative 29,094 25,309 86,796 76,415 Total operating expenses 191,345 179,570 576,240 542,491 Other income (expense) Dividends and interest 88 51 198 242 Interest expense ( 48,726 ) ( 48,918 ) ( 143,934 ) ( 147,601 ) Gain on sale of real estate assets 15,768 11,122 60,667 49,489 Loss on extinguishment of debt, net — ( 27,116 ) ( 221 ) ( 28,345 ) Other ( 789 ) 390 ( 2,937 ) 694 Total other expense ( 33,659 ) ( 64,471 ) ( 86,227 ) ( 125,521 ) Net income $ 79,741 $ 46,145 $ 247,038 $ 188,944 Net income per common unit: Basic $ 0.26 $ 0.15 $ 0.82 $ 0.63 Diluted $ 0.26 $ 0.15 $ 0.82 $ 0.63 Weighted average units: Basic 300,213 297,188 299,626 297,165 Diluted 301,341 298,269 300,784 298,209 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited, in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net income $ 79,741 $ 46,145 $ 247,038 $ 188,944 Other comprehensive income (loss) Change in unrealized gain on interest rate swaps, net (Note 6) 6,088 2,141 21,469 10,639 Change in unrealized loss on marketable securities ( 358 ) ( 16 ) ( 767 ) ( 169 ) Total other comprehensive income 5,730 2,125 20,702 10,470 Comprehensive income $ 85,471 $ 48,270 $ 267,740 $ 199,414 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Unaudited, in thousands) Partnership Common Units Accumulated Other Comprehensive Loss Total Beginning balance, January 1, 2021 $ 2,698,746 $ ( 28,059 ) $ 2,670,687 Distributions to partners ( 65,120 ) — ( 65,120 ) Equity based compensation expense 2,792 — 2,792 Other comprehensive income — 5,572 5,572 Issuance of OP Units — — — Share-based awards retained for taxes ( 5,113 ) — ( 5,113 ) Net income 52,371 — 52,371 Ending balance, March 31, 2021 2,683,676 ( 22,487 ) 2,661,189 Distributions to partners ( 64,344 ) — ( 64,344 ) Equity based compensation expense 4,543 — 4,543 Other comprehensive income — 2,773 2,773 Issuance of OP Units — — — Share-based awards retained for taxes ( 259 ) — ( 259 ) Net income 90,428 — 90,428 Ending balance, June 30, 2021 2,714,044 ( 19,714 ) 2,694,330 Distributions to partners ( 64,339 ) — ( 64,339 ) Equity based compensation expense 4,331 — 4,331 Other comprehensive income — 2,125 2,125 Issuance of OP Units — — — Share-based awards retained for taxes ( 96 ) — ( 96 ) Net income 46,145 — 46,145 Ending balance, September 30, 2021 $ 2,700,085 $ ( 17,589 ) $ 2,682,496 Beginning balance, January 1, 2022 $ 2,715,863 $ ( 12,675 ) $ 2,703,188 Distributions to partners ( 64,527 ) — ( 64,527 ) Equity based compensation expense 4,620 — 4,620 Other comprehensive income — 10,953 10,953 Issuance of OP Units 43,848 — 43,848 Share-based awards retained for taxes ( 10,458 ) — ( 10,458 ) Net income 79,506 — 79,506 Ending balance, March 31, 2022 2,768,852 ( 1,722 ) 2,767,130 Distributions to partners ( 66,195 ) — ( 66,195 ) Equity based compensation expense 6,500 — 6,500 Other comprehensive income — 4,020 4,020 Issuance of OP Units 3,560 — 3,560 Share-based awards retained for taxes ( 2 ) — ( 2 ) Net income 87,791 — 87,791 Ending balance, June 30, 2022 2,800,506 2,298 2,802,804 Distributions to partners ( 73,295 ) — ( 73,295 ) Equity based compensation expense 6,580 — 6,580 Other comprehensive income — 5,730 5,730 Issuance of OP Units 5,692 — 5,692 Net income 79,741 — 79,741 Ending balance, September 30, 2022 $ 2,819,224 $ 8,028 $ 2,827,252 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 9 BRIXMOR OPERATING PARTNERSHIP LP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) Nine Months Ended September 30, 2022 2021 Operating activities: Net income $ 247,038 $ 188,944 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 254,132 246,356 Accretion of debt premium and discount, net ( 2,147 ) ( 2,146 ) Deferred financing cost amortization 5,261 5,638 Accretion of above- and below-market leases, net ( 9,245 ) ( 9,931 ) Tenant inducement amortization and other 2,970 3,999 Impairment of real estate assets 4,597 1,898 Gain on sale of real estate assets ( 60,667 ) ( 49,489 ) Equity based compensation 16,414 10,818 Loss on extinguishment of debt, net 221 28,345 Changes in operating assets and liabilities: Receivables, net ( 14,369 ) 8,964 Deferred charges and prepaid expenses ( 36,775 ) ( 26,784 ) Other assets ( 284 ) ( 268 ) Accounts payable, accrued expenses and other liabilities 34,014 18,536 Net cash provided by operating activities 441,160 424,880 Investing activities: Improvements to and investments in real estate assets ( 233,127 ) ( 212,374 ) Acquisitions of real estate assets ( 409,688 ) ( 66,716 ) Proceeds from sales of real estate assets 171,017 124,437 Purchase of marketable securities ( 24,558 ) ( 16,906 ) Proceeds from sale of marketable securities 21,877 15,446 Net cash used in investing activities ( 474,479 ) ( 156,113 ) Financing activities: Repayment of borrowings under unsecured revolving credit facility ( 465,000 ) — Proceeds from borrowings under unsecured revolving credit facility 665,000 — Proceeds from unsecured notes — 847,735 Repayment of borrowings under unsecured term loans and notes ( 250,000 ) ( 850,000 ) Deferred financing and debt extinguishment costs ( 8,398 ) ( 33,577 ) Proceeds from issuances of OP Units 53,100 — Partner distributions and repurchases of OP Units ( 213,645 ) ( 198,647 ) Net cash used in financing activities ( 218,943 ) ( 234,489 ) Net change in cash, cash equivalents and restricted cash ( 252,262 ) 34,278 Cash, cash equivalents and restricted cash at beginning of period 282,585 360,073 Cash, cash equivalents and restricted cash at end of period $ 30,323 $ 394,351 Reconciliation to consolidated balance sheets: Cash and cash equivalents $ 22,662 $ 387,185 Restricted cash 7,661 7,166 Cash, cash equivalents and restricted cash at end of period $ 30,323 $ 394,351 Supplemental disclosure of cash flow information: Cash paid for interest, net of amount capitalized of $ 2,215 and $ 2,836 $ 142,470 $ 145,358 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 10 BRIXMOR PROPERTY GROUP INC. AND BRIXMOR OPERATING PARTNERSHIP LP NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited, dollars in thousands, unless otherwise stated) 1. Nature of Business and Financial Statement Presentation Description of Business Brixmor Property Group Inc. and subsidiaries (collectively, the “Parent Company”) is an internally-managed real estate investment trust (“REIT”). Brixmor Operating Partnership LP and subsidiaries (collectively, the “Operating Partnership”) is the entity through which the Parent Company conducts substantially all of its operations and owns substantially all of its assets. The Parent Company owns 100 % of the limited liability company interests of BPG Subsidiary LLC (“BPG Sub”), which, in turn, is the sole member of Brixmor OP GP LLC (the “General Partner”), the sole general partner of the Operating Partnership. The Parent Company engages in the ownership, management, leasing, acquisition, disposition, and redevelopment of retail shopping centers through the Operating Partnership, and has no other substantial assets or liabilities other than through its investment in the Operating Partnership. The Parent Company, the Operating Partnership, and their controlled subsidiaries on a consolidated basis (collectively, the “Company” or “Brixmor”) owns and operates one of the largest publicly-traded open-air retail portfolios by gross leasable area (“GLA”) in the United States (“U.S.”), comprised primarily of community and neighborhood shopping centers. As of September 30, 2022, the Company’s portfolio was comprised of 378 shopping centers (the “Portfolio”) totaling approximately 67 million square feet of GLA. The Company’s high-quality national Portfolio is primarily located within established trade areas in the top 50 Core-Based Statistical Areas in the U.S., and its shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers. The Company does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company has a single reportable segment for disclosure purposes in accordance with U.S. generally accepted accounting principles (“GAAP”). Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the unaudited Condensed Consolidated Financial Statements for the periods presented have been included. The operating results for the periods presented are not necessarily indicative of the results that may be expected for a full fiscal year. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2021 and accompanying notes included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 7, 2022. Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Parent Company, the Operating Partnership, each of their wholly owned subsidiaries, and all other entities in which they have a controlling financial interest. All intercompany transactions have been eliminated. Income Taxes The Parent Company has elected to qualify as a REIT in accordance with the Internal Revenue Code of 1986, as amended (the “Code”). To qualify as a REIT, the Parent Company must meet several organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid. Management intends to continue to satisfy these requirements and maintain the Parent Company's REIT status. As a REIT, the Parent Company generally will not be subject to U.S. federal income tax, provided that distributions to its stockholders equal at least the amount of its REIT taxable income as defined under the Code. The Parent Company conducts substantially all of its operations through the Operating Partnership, which is organized as a limited partnership and treated as a pass-through entity for U.S. federal tax purposes. Therefore, U.S. federal income taxes do not materially impact the unaudited Condensed Consolidated Financial Statements of the Company. 11 If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal taxes at regular corporate rates and may not be able to qualify as a REIT for the four subsequent taxable years. Even if the Parent Company qualifies for taxation as a REIT, the Parent Company is subject to certain state and local taxes on its income and property, and to U.S. federal income and excise taxes on its undistributed taxable income as well as other income items, as applicable. The Parent Company has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (each a “TRS”), and the Parent Company may in the future elect to treat newly formed and/or other existing subsidiaries as TRSs. A TRS may participate in non-real estate related activities and/or perform non-customary services for tenants and is subject to certain limitations under the Code. A TRS is subject to U.S. federal, state, and local income taxes at regular corporate rates. Income taxes related to the Parent Company’s TRSs do not materially impact the unaudited Condensed Consolidated Financial Statements of the Company. The Company has considered the tax positions taken for the open tax years and has concluded that no provision for income taxes related to uncertain tax positions is required in the Company’s unaudited Condensed Consolidated Financial Statements as of September 30, 2022 and December 31, 2021. Open tax years generally range from 2019 through 2021 but may vary by jurisdiction and issue. The Company recognizes penalties and interest accrued related to unrecognized tax benefits as income tax expense, which is included in Other on the Company’s unaudited Condensed Consolidated Statements of Operations. New Accounting Pronouncements Any recently issued accounting standards or pronouncements have been excluded as they either are not relevant to the Company, or they are not expected to have a material impact on the unaudited Condensed Consolidated Financial Statements of the Company. 2. Acquisition of Real Estate During the nine months ended September 30, 2022, the Company acquired the following assets, in separate transactions: Description (1) Location Month Acquired GLA Aggregate Purchase Price (2) Brea Gateway Brea, CA Jan-22 181,819 $ 83,991 Land at Cobblestone Village St. Augustine, FL Jan-22 N/A 1,661 Arboretum Village Dallas, TX Jan-22 95,354 46,330 Ravinia Plaza Orland Park, IL Feb-22 101,800 26,160 Elmhurst Crossing Elmhurst, IL Apr-22 347,503 75,096 North Riverside Plaza Berwyn, IL Apr-22 383,884 60,114 West U Marketplace Houston, TX Apr-22 60,136 33,741 Waterford Commons - Ruby Tuesday Waterford, CT May-22 6,781 1,574 Lake Pointe Village Sugarland, TX Jun-22 162,263 80,971 Adjustments related to previously acquired assets Various Various N/A 50 1,339,540 $ 409,688 (1) No debt was assumed related to any of the listed acquisitions. (2) Aggregate purchase price includes $ 2.0 million of transaction costs, offset by $ 2.9 million of closing credits. 12 During the nine months ended September 30, 2021, the Company acquired the following assets, in separate transactions: Description (1) Location Month Acquired GLA Aggregate Purchase Price (2) Land at Ellisville Square (3) Ellisville, MO Jan-21 N/A $ 2,014 Outparcel adjacent to Cobblestone Village St. Augustine, FL Feb-21 5,040 1,520 Land associated with Westgate Plaza Westfield, MA Mar-21 N/A 245 Center of Bonita Springs Bonita Springs, FL Apr-21 281,394 48,061 Champlin Marketplace Champlin, MN Jun-21 91,970 14,876 378,404 $ 66,716 (1) No debt was assumed related to any of the listed acquisitions. (2) Aggregate purchase price includes $ 0.5 million of transaction costs, offset by $ 1.4 million of closing credits. (3) The Company terminated a ground lease and acquired a land parcel. The aggregate purchase price of the assets acquired during the nine months ended September 30, 2022 and 2021, respectively, has been allocated as follows: Nine Months Ended September 30, Assets 2022 2021 Land $ 84,361 $ 17,669 Buildings 294,241 38,082 Building and tenant improvements 33,352 7,128 Above-market leases (1) 701 149 In-place leases (2) 29,607 5,523 Total assets acquired $ 442,262 $ 68,551 Liabilities Below-market leases (3) $ 30,748 $ 1,835 Other liabilities 1,826 — Total liabilities 32,574 1,835 Net assets acquired $ 409,688 $ 66,716 (1) The weighted average amortization period at the time of acquisition for above-market leases related to assets acquired during the nine months ended September 30, 2022 was 6.5 years. (2) The weighted average amortization period at the time of acquisition for in-place leases related to assets acquired during the nine months ended September 30, 2022 was 12.1 years. (3) The weighted average amortization period at the time of acquisition for below-market leases related to assets acquired during the nine months ended September 30, 2022 was 20.1 years. 3. Dispositions and Assets Held for Sale During the three months ended September 30, 2022, the Company disposed of one shopping center and three partial shopping centers for aggregate net proceeds of $ 28.2 million, resulting in aggregate gain of $ 13.5 million. In addition, during the three months ended September 30, 2022, the Company had land at one shopping center seized through eminent domain for aggregate net proceeds of $ 2.8 million, resulting in aggregate gain of $ 2.3 million. During the nine months ended September 30, 2022, the Company disposed of 11 shopping centers and seven partial shopping centers for aggregate net proceeds of $ 168.2 million, resulting in aggregate gain of $ 58.2 million and aggregate impairment of $ 4.6 million. In addition, during the nine months ended September 30, 2022, the Company resolved contingencies related to previously disposed assets and had one land parcel seized through eminent domain for aggregate net proceeds of $ 2.8 million, resulting in aggregate net gain of $ 2.4 million. During the three months ended September 30, 2021, the Company disposed of three shopping centers, five partial shopping centers, and one land parcel for aggregate net proceeds of $ 24.7 million, resulting in aggregate gain of $ 11.1 million. During the nine months ended September 30, 2021, the Company disposed of nine shopping centers, 14 partial shopping centers, and one land parcel for aggregate net proceeds of $ 124.4 million resulting in aggregate gain of $ 49.5 million and aggregate impairment of $ 1.5 million. In addition, during the nine months ended September 30, 2021, the Company received aggregate net proceeds of less than $ 0.1 million from previously disposed assets resulting in aggregate gain of less than $ 0.1 million. 13 As of September 30, 2022, the Company had four properties and one partial property held for sale. As of December 31, 2021, the Company had one property and two partial properties held for sale. The following table presents the assets associated with the properties classified as held for sale: Assets September 30, 2022 December 31, 2021 Land $ 5,580 $ 4,339 Buildings and improvements 40,869 19,181 Accumulated depreciation and amortization ( 17,320 ) ( 7,899 ) Real estate, net 29,129 15,621 Other assets 872 510 Assets associated with real estate assets held for sale $ 30,001 $ 16,131 Liabilities Lease liabilities $ 173 $ — Below-market leases 28 — Liabilities associated with real estate assets held for sale (1) $ 201 $ — (1) These amounts are included in Accounts payable, accrued expenses and other liabilities on the Company's Consolidated Balance Sheets. There were no discontinued operations for the three and nine months ended September 30, 2022 and 2021 as none of the dispositions represented a strategic shift in the Company’s business that would qualify as discontinued operations. 4. Real Estate The Company’s components of Real estate, net consisted of the following: September 30, 2022 December 31, 2021 Land $ 1,830,251 $ 1,773,448 Buildings and improvements: Buildings and tenant improvements 8,493,113 8,110,742 Lease intangibles (1) 550,477 544,224 10,873,841 10,428,414 Accumulated depreciation and amortization (2) ( 2,943,592 ) ( 2,813,329 ) Total $ 7,930,249 $ 7,615,085 (1) As of September 30, 2022 and December 31, 2021, Lease intangibles consisted of $ 499.2 million and $ 491.0 million, respectively, of in-place leases and $ 51.3 million and $ 53.2 million, respectively, of above-market leases. These intangible assets are amortized over the term of each related lease. (2) As of September 30, 2022 and December 31, 2021, Accumulated depreciation and amortization included $ 467.8 million and $ 480.9 million, respectively, of accumulated amortization related to Lease intangibles. In addition, as of September 30, 2022 and December 31, 2021, the Company had intangible liabilities relating to below-market leases of $ 354.1 million and $ 337.1 million, respectively, and accumulated accretion of $ 254.0 million and $ 256.2 million, respectively. These intangible liabilities are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets. These intangible assets are accreted over the term of each related lease. 14 Below-market lease accretion income, net of above-market lease amortization for the three months ended September 30, 2022 and 2021 was $ 3.3 million and $ 2.8 million, respectively. Below-market lease accretion income, net of above-market lease amortization for the nine months ended September 30, 2022 and 2021 was $ 9.2 million and $ 9.9 million, respectively. These amounts are included in Rental income on the Company’s unaudited Condensed Consolidated Statements of Operations. Amortization expense associated with in-place lease value for the three months ended September 30, 2022 and 2021 was $ 5.1 million and $ 3.9 million, respectively. Amortization expense associated with in-place lease value for the nine months ended September 30, 2022 and 2021 was $ 14.0 million and $ 11.8 million, respectively. These amounts are included in Depreciation and amortization on the Company’s unaudited Condensed Consolidated Statements of Operations. The Company’s estimated below-market lease accretion income, net of above-market lease amortization expense, and in-place lease amortization expense for the next five years are as follows: Year ending December 31, Below-market lease accretion (income), net of above-market lease amortization expense In-place lease amortization expense 2022 (remaining three months) $ ( 2,827 ) $ 4,695 2023 ( 10,587 ) 15,552 2024 ( 9,898 ) 12,095 2025 ( 8,457 ) 8,842 2026 ( 7,364 ) 6,345 5. Impairments Management periodically assesses whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. If management determines that the carrying value of a real estate asset is impaired, an impairment charge is recognized to reflect the estimated fair value. The Company did not recognize any impairments during the three months ended September 30, 2022. The Company recognized the following impairments during the nine months ended September 30, 2022: Nine Months Ended September 30, 2022 Property Name (1) Location GLA Impairment Charge Torrington Plaza (2) Torrington, CT 125,496 $ 3,509 New Garden Center (2) Kennett Square, PA 147,370 1,088 272,866 $ 4,597 (1) The Company recognized impairment charges based upon changes in the anticipated hold periods of these properties and/or offers from third-party buyers in connection with the Company’s capital recycling program. (2) The Company disposed of this property during the nine months ended September 30, 2022. The Company did not recognize any impairments during the three months ended September 30, 2021. The Company recognized the following impairments during the nine months ended September 30, 2021: Nine Months Ended September 30, 2021 Property Name (1) Location GLA Impairment Charge Albany Plaza (2) Albany, GA 114,169 $ 1,467 Erie Canal Centre (2) DeWitt, NY 123,404 431 237,573 $ 1,898 (1) The Company recognized impairment charges based upon changes in the anticipated hold periods of these properties and/or offers from third-party buyers in connection with the Company’s capital recycling program. (2) The Company disposed of this property during the nine months ended September 30, 2021. 15 The Company can provide no assurance that material impairment charges with respect to its Portfolio will not occur in future periods. See Note 3 for additional information regarding impairment charges taken in connection with the Company’s dispositions. See Note 8 for additional information regarding the fair value of operating properties that have been impaired. 6. Financial Instruments – Derivatives and Hedging The Company’s use of derivative instruments is intended to manage its exposure to interest rate movements and such instruments are not utilized for speculative purposes. In certain situations, the Company may enter into derivative financial instruments such as interest rate swap agreements and interest rate cap agreements that result in the receipt and/or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Cash Flow Hedges of Interest Rate Risk Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchanging the underlying notional amount. The Company utilizes interest rate swaps to partially hedge the cash flows associated with variable-rate debt. During the nine months ended September 30, 2022 and the year ended December 31, 2021, the Company did no t enter into any new interest rate swap agreements. During the year ended December 31, 2021, interest rate swaps with a notional amount of $ 250.0 million expired and the Company paid $ 1.1 million to terminate interest rate swaps with a notional amount of $ 250.0 million. During the nine months ended September 30, 2022, the Company amended its interest rate swap agreements, contemporaneous with a modification of the Company's unsecured credit facility agreements, to facilitate reference rate form, converting all outstanding swaps from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”). As a result of these amendments, the Company has elected to apply additional expedients within Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) related to contract modifications, changes in critical terms, and updates to the designated hedged risk(s), as qualifying changes have been made to applicable debt and derivative contracts. Detail on the Company’s interest rate derivatives designated as cash flow hedges outstanding as of September 30, 2022 and December 31, 2021 is as follows: Number of Instruments Notional Amount September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Interest Rate Swaps 4 4 $ 300,000 $ 300,000 The Company has elected to present its interest rate derivatives on its unaudited Condensed Consolidated Balance Sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. Detail on the fair value of the Company’s interest rate derivatives on a gross and net basis as of September 30, 2022 and December 31, 2021 is as follows: Fair Value of Derivative Instruments Interest rate swaps classified as: September 30, 2022 December 31, 2021 Gross derivative assets $ 8,884 $ — Gross derivative liabilities — ( 12,585 ) Net derivative assets (liabilities) $ 8,884 $ ( 12,585 ) The gross derivative assets are included in Other assets and the gross derivative liabilities are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets. All of the Company’s outstanding interest rate swap agreements for the periods presented were designated as cash flow hedges of interest rate risk. The fair value of the Company’s interest rate derivatives is determined using market standard valuation techniques, including discounted cash flow analyses, on the expected cash flows of each derivative. These analyses reflect the contractual terms of the derivative, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. These inputs are classified as Level 2 of the fair value hierarchy. The effective portion of changes in the fair value of derivatives designated as 16 cash flow hedges is recognized in other comprehensive income (loss) and is reclassified into earnings as interest expense in the period that the hedged forecasted transaction affects earnings. The effective portion of the Company’s interest rate swaps that was recognized on the Company’s unaudited Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 and 2021 is as follows: Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Change in unrealized gain (loss) on interest rate swaps $ 5,818 $ ( 198 ) $ 17,979 $ 2,076 Amortization of interest rate swaps to interest expense 270 2,339 3,490 8,563 Change in unrealized gain on interest rate swaps, net $ 6,088 $ 2,141 $ 21,469 $ 10,639 The Company estimates that $ 5.0 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense over the next twelve months. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Company’s cash flow hedges during the three and nine months ended September 30, 2022 and 2021. Non-Designated (Mark-to-Market) Hedges of Interest Rate Risk The Company does not use derivatives for trading or speculative purposes. As of September 30, 2022 and December 31, 2021, the Company did not have any non-designated hedges. Credit-risk-related Contingent Features The Company has agreements with its derivative counterparties that contain provisions whereby if the Company defaults on certain of its indebtedness and the indebtedness has been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Company were to breach any of the contractual provisions of the derivative contracts, it would be required to settle its obligations under such agreements at their termination value, including accrued interest. 7. Debt Obligations As of September 30, 2022 and December 31, 2021, the Company had the following indebtedness outstanding: Carrying Value as of September 30, 2022 December 31, 2021 Stated Interest Rate (1) Scheduled Maturity Date Notes payable Unsecured notes (2) $ 4,618,453 $ 4,868,453 2.25 % – 7.97 % 2024 – 2031 Net unamortized premium 24,503 26,651 Net unamortized debt issuance costs ( 23,461 ) ( 26,913 ) Total notes payable, net $ 4,619,495 $ 4,868,191 Unsecured Credit Facility Revolving Facility $ 200,000 $ — 4.12 % 2026 Term Loan Facility (3) 300,000 300,000 3.80 % 2027 Net unamortized debt issuance costs ( 10,041 ) ( 3,673 ) Total Unsecured Credit Facility and term loans $ 489,959 $ 296,327 Total debt obligations, net $ 5,109,454 $ 5,164,518 (1) Stated interest rates as of September 30, 2022 do not include the impact of the Company’s interest rate swap agreements (described below). (2) The weighted average stated interest rate on the Company’s unsecured notes was 3.69 % as of September 30, 2022. (3) Effective June 1, 2022, the Company has in place four interest rate swap agreements that convert the variable interest rate on the $ 300 million outstanding under the Term Loan Facility (defined hereafter) to a fixed, combined interest rate of 2.59 % (plus a spread of 119 basis points) through July 26, 2024. 17 2022 Debt Transactions In April 2022, the Operating Partnership amended and restated its unsecured credit facility agreements (the "Unsecured Credit Facility"). The amendment provides for (i) revolving loan commitments of $ 1.25 billion (the “Revolving Facility”) scheduled to mature on June 30, 2026 (extending the applicable scheduled maturity date from February 28, 2023); and (ii) a continuation of the existing $ 300 Million Term Loan scheduled to mature on July 26, 2027 (extending the applicable scheduled maturity date from July 26, 2024) and a new $ 200.0 million delayed draw term loan, scheduled to mature on July 26, 2027 (together, the “Term Loan Facility”). The Revolving Facility includes two six-month maturity extension options, the exercise of which is subject to customary conditions and the payment of a fee on the extended commitments. In addition, the floating reference rate under the Unsecured Credit Facility has been amended from LIBOR to SOFR. During the nine months ended September 30, 2022, the Operating Partnership repaid $ 250.0 million principal amount of its Floating Rate Senior Notes due 2022 (the “2022 Notes”), representing all of the outstanding 2022 Notes, with available cash on hand. In addition, during the nine months ended September 30, 2022, the Operating Partnership borrowed $ 200.0 million, net of repayments, under its $ 1.25 billion Revolving Facility, the proceeds of which were used for general corporate purposes, including $ 238.7 million of acquisitions, net of dispositions. Pursuant to the terms of the Company’s unsecured debt agreements, the Company, among other things, is subject to the maintenance of various financial covenants. The Company was in compliance with these covenants as of September 30, 2022. Debt Maturities As of September 30, 2022 and December 31, 2021, the Company had accrued interest of $ 44.6 million and $ 46.3 million outstanding, respectively. As of September 30, 2022, scheduled maturities of the Company’s outstanding debt obligations were as follows: Year ending December 31, 2022 (remaining three months) $ — 2023 — 2024 500,000 2025 700,000 2026 807,542 Thereafter 3,110,911 Total debt maturities 5,118,453 Net unamortized premium 24,503 Net unamortized debt issuance costs ( 33,502 ) Total debt obligations, net $ 5,109,454 As of the date the financial statements were issued, the Company did not have any scheduled debt maturities for the next 12 months. 8. Fair Value Disclosures All financial instruments of the Company are reflected in the accompanying unaudited Condensed Consolidated Balance Sheets at amounts which, in management’s judgment, reasonably approximate their fair values, except those instruments listed below: September 30, 2022 December 31, 2021 Carrying Amounts Fair Value Carrying Amounts Fair Value Notes payable $ 4,619,495 $ 4,073,787 $ 4,868,191 $ 5,166,291 Unsecured Credit Facility 489,959 499,813 296,327 300,629 Total debt obligations, net $ 5,109,454 $ 4,573,600 $ 5,164,518 $ 5,466,920 As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy is included in GAAP that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the 18 hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs that are classified within Level 3 of the hierarchy). In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Based on the above criteria, the Company has determined that the valuations of its debt obligations are classified within Level 3 of the fair value hierarchy. Such fair value estimates are not necessarily indicative of the amounts that would be realized upon disposition. Recurring Fair Value The Company’s marketable securities and interest rate derivatives are measured and recognized at fair value on a recurring basis. The valuations of the Company’s marketable securities are based primarily on publicly traded market values in active markets and are classified within Levels 1 and 2 of the fair value hierarchy. See Note 6 for fair value information regarding the Company’s interest rate derivatives. The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured and recognized at fair value on a recurring basis: Fair Value Measurements as of September 30, 2022 Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Marketable securities (1) $ 22,047 $ 1,219 $ 20,828 $ — Interest rate derivatives $ 8,884 $ — $ 8,884 $ — Liabilities: Interest rate derivatives $ — $ — $ — $ — Fair Value Measurements as of December 31, 2021 Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Marketable securities (1) $ 20,224 $ 6,304 $ 13,920 $ — Liabilities: Interest rate derivatives $ ( 12,585 ) $ — $ ( 12,585 ) $ — (1) As of September 30, 2022 and December 31, 2021, marketable securities included $ 0.9 million and $ 0.1 million of net unrealized losses, respectively. As of September 30, 2022, the contractual maturities of the Company’s marketable securities are within the next five years. Non-Recurring Fair Value Management periodically assesses whether there are any indicators, including property operating performance, changes in anticipated hold period, and general market conditions, that the carrying value of the Company’s real estate assets (including any related intangible assets or liabilities) may be impaired. Fair value is determined by offers from third-party buyers, market comparable data, third party appraisals, or discounted cash flow analyses. The cash flows utilized in such analyses are comprised of unobservable inputs that include forecasted rental revenue and expenses based upon market conditions and future expectations. The capitalization rates and discount rates utilized in such analyses are based upon unobservable rates that the Company believes to be within a reasonable range of current market rates for the respective properties. Based on these inputs, the Company has determined that the valuations of these properties are classified within Level 3 of the fair value hierarchy. 19 During the nine months ended September 30, 2022 and year ended December 31, 2021, no properties were remeasured to fair value as a result of impairment testing that were not sold prior to September 30, 2022 and December 31, 2021, respectively. 9. Revenue Recognition The Company engages in the ownership, management, leasing, acquisition, disposition, and redevelopment of retail shopping centers. Revenue is primarily generated through lease agreements and classified as Rental income on the Company’s unaudited Condensed Consolidated Statements of Operations. These agreements include retail shopping center unit leases; ground leases; ancillary leases or agreements, such as agreements with tenants for cellular towers, ATMs, and short-term or seasonal retail (e.g. Halloween or Christmas-related retail); and reciprocal easement agreements. The agreements range in term from less than one year to 25 or more years, with certain agreements containing renewal options. These renewal options range from as little as one month to five or more years. The Company’s retail shopping center leases generally require tenants to pay a portion of property operating expenses such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of the Company’s properties. Additionally, certain leases may require variable lease payments associated with percentage rents, which are recognized upon the achievement of certain predetermined sales thresholds. The Company recognized $ 1.3 million and $ 0.9 million of income based on percentage rents for the three months ended September 30, 2022 and 2021, respectively. The Company recognized $ 7.1 million and $ 4.7 million of income based on percentage rents for the nine months ended September 30, 2022 and 2021, respectively. These amounts are included in Rental income on the Company’s unaudited Condensed Consolidated Statements of Operations. 20 10. Leases The Company periodically enters into agreements in which it is the lessee, including ground leases for shopping centers that it operates and office leases for administrative space. The agreements range in term from less than one year to 50 or more years, with certain agreements containing renewal options for up to an additional 100 years. Upon lease execution, the Company recognizes an operating lease right-of-use (“ROU”) asset and an operating lease liability based on the present value of the minimum lease payments over the non-cancelable lease term. As of September 30, 2022, the Company is not including any prospective renewal or termination options in its ROU assets or lease liabilities, as the exercise of such options is not reasonably certain. Certain agreements require the Company to pay a portion of property operating expenses, such as common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of the properties. These payments are not included in the calculation of the lease liability and are presented as variable lease costs. The following tables present additional information pertaining to the Company’s operating leases: Three Months Ended September 30, Nine Months Ended September 30, Supplemental Statements of Operations Information 2022 2021 2022 2021 Operating lease costs $ 1,446 $ 1,438 $ 4,497 $ 4,484 Short-term lease costs — — — 1 Variable lease costs — 39 163 242 Total lease costs $ 1,446 $ 1,477 $ 4,660 $ 4,727 Nine Months Ended September 30, Supplemental Statements of Cash Flows Information 2022 2021 Operating cash outflows from operating leases $ 4,612 $ 4,633 ROU assets obtained in exchange for operating lease liabilities 10,708 — ROU assets reduction due to dispositions, held for sale, and lease modifications ( 171 ) ( 229 ) Operating Lease Liabilities As of September 30, 2022 Future minimum operating lease payments: 2022 (remaining three months) $ 1,534 2023 6,062 2024 5,968 2025 5,667 2026 4,942 Thereafter 36,444 Total future minimum operating lease payments 60,617 Less: imputed interest ( 19,435 ) Less: lease liabilities held for sale ( 173 ) Operating lease liabilities $ 41,009 Supplemental Balance Sheets Information As of September 30, 2022 As of December 31, 2021 Operating lease liabilities (1)(2) $ 41,009 $ 33,713 ROU assets (1)(3) 36,738 29,325 (1) As of September 30, 2022 and December 31, 2021, the weighted average remaining lease term was 16.2 years and 12.7 years, respectively, and the weighted average discount rate was 4.44 % and 4.41 %, respectively. (2) These amounts are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets. (3) These amounts are included in Other assets on the Company’s unaudited Condensed Consolidated Balance Sheets. As of September 30, 2022, there were no material leases that have been executed but not yet commenced. 21 11. Equity and Capital ATM Program In January 2020, the Company established an at-the-market equity offering program (the “ATM Program”) through which the Company may sell, from time to time, up to an aggregate of $ 400.0 million of its common stock through sales agents. The ATM Program also provides that the Company may enter into forward contracts for shares of its common stock with forward sellers and forward purchasers. The ATM Program is scheduled to expire on January 9, 2023, unless earlier terminated or extended by the Company, sales agents, forward sellers, and forward purchasers. During the nine months ended September 30, 2022, the Company issued 2.1 million shares of common stock under the ATM Program at an average price per share of $ 25.40 for total gross proceeds of $ 53.9 million, excluding commissions. The Company incurred commissions of $ 0.7 million in conjunction with the ATM Program for the nine months ended September 30, 2022. During the nine months ended September 30, 2021, the Company did not issue any shares of common stock. As of September 30, 2022, $ 340.8 million of common stock remained available for issuance under the ATM Program. Share Repurchase Program In January 2020, the Company established a share repurchase program (the “2020 Repurchase Program”) for up to $ 400.0 million of its common stock. The 2020 Repurchase Program is scheduled to expire on January 9, 2023, unless suspended or extended by the Company's board of directors. During the nine months ended September 30, 2022 and 2021, the Company did not repurchase any shares of common stock. As of September 30, 2022, the 2020 Repurchase Program had $ 375.0 million of available repurchase capacity. Common Stock In connection with the vesting of restricted stock units (“RSUs”) under the Company’s equity-based compensation plan, the Company withholds shares to satisfy tax withholding obligations. During the nine months ended September 30, 2022 and 2021, the Company withheld 0.4 million and 0.3 million shares of its common stock, respectively. Dividends and Distributions During the three months ended September 30, 2022 and 2021, the Company's board of directors declared common stock dividends and OP Unit distributions of $ 0.240 per share/unit and $ 0.215 per share/unit, respectively. During the nine months ended September 30, 2022 and 2021, the Company's board of directors declared common stock dividends and OP Unit distributions of $ 0.720 per share/unit and $ 0.645 per share/unit, respectively. As of September 30, 2022 and December 31, 2021, the Company had declared but unpaid common stock dividends and OP Unit distributions of $ 75.3 million and $ 74.4 million, respectively. These amounts are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets. 12. Stock Based Compensation In February 2022, the Company's board of directors approved the 2022 Omnibus Incentive Plan (the “Plan”) and in April 2022, the Company's stockholders approved the Plan. The Plan provides for a maximum of 10.0 million shares of the Company’s common stock to be issued for qualified and non-qualified options, stock appreciation rights, restricted stock, RSUs, OP Units, performance awards, and other stock-based awards. Prior to the approval of the Plan, awards were issued under the 2013 Omnibus Incentive Plan that the Company's board of directors approved in 2013. 22 During the nine months ended September 30, 2022 and the year ended December 31, 2021, the Company granted RSUs to certain employees. The RSUs are divided into multiple tranches, which are all subject to service-based vesting conditions. Certain tranches are also subject to performance-based or market-based criteria, which contain a threshold, target, above target, and maximum number of units that can be earned. The number of units actually earned for each tranche is determined based on performance during a specified performance period. Tranches that only have a service-based component can only earn a target number of units. The aggregate number of RSUs granted, assuming the achievement of target level performance, was 0.7 million and 1.0 million for the nine months ended September 30, 2022 and the year ended December 31, 2021, respectively, with vesting periods ranging from one to five years . For the service-based and performance-based RSUs granted, fair value is based on the Company’s grant date stock price. For the market-based RSUs granted, fair value is based on a Monte Carlo simulation model that assesses the probability of satisfying the market performance hurdles over the remainder of the performance period based on the Company’s historical common stock performance relative to the other companies within the FTSE Nareit Equity Shopping Centers Index as well as the following significant assumptions: Assumption Nine Months Ended September 30, 2022 Year Ended, December 31, 2021 Volatility 27.0 % - 51.0 % 50.0 % - 64.0 % Weighted average risk-free interest rate 1.08 % - 1.39 % 0.11 % - 0.18 % Weighted average common stock dividend yield 3.8 % - 4.6 % 4.1 % - 5.8 % During the three months ended September 30, 2022 and 2021, the Company recognized $ 6.6 million and $ 4.3 million of equity compensation expense, respectively, of which $ 0.5 million and $ 0.3 million was capitalized, respectively. During the nine months ended September 30, 2022 and 2021, the Company recognized $ 17.7 million and $ 11.7 million of equity compensation expense, respectively, of which $ 1.3 million and $ 0.8 million was capitalized, respectively. These amounts are included in General and administrative expense on the Company’s unaudited Condensed Consolidated Statements of Operations. As of September 30, 2022, the Company had $ 27.1 million of total unrecognized compensation expense related to unvested stock compensation, which is expected to be recognized over a weighted average period of approximately 2.2 years. 23 13. Earnings per Share Basic earnings per share (“EPS”) is calculated by dividing net income attributable to the Company’s common stockholders, including any participating securities, by the weighted average number of shares outstanding for the period. Certain restricted shares issued pursuant to the Company’s share-based compensation program are considered participating securities, as such stockholders have rights to receive non-forfeitable dividends. Fully-diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock. Unvested RSUs are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the Company’s common stock. The following table provides a reconciliation of the numerator and denominator of the EPS calculations for the three and nine months ended September 30, 2022 and 2021 (dollars in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Computation of Basic Earnings Per Share: Net income $ 79,741 $ 46,145 $ 247,038 $ 188,944 Non-forfeitable dividends on unvested restricted shares ( 238 ) ( 207 ) ( 710 ) ( 593 ) Net income attributable to the Company’s common stockholders for basic earnings per share $ 79,503 $ 45,938 $ 246,328 $ 188,351 Weighted average number shares outstanding – basic 300,213 297,188 299,626 297,165 Basic earnings per share attributable to the Company’s common stockholders: Net income per share $ 0.26 $ 0.15 $ 0.82 $ 0.63 Computation of Diluted Earnings Per Share: Net income attributable to the Company’s common stockholders for diluted earnings per share $ 79,503 $ 45,938 $ 246,328 $ 188,351 Weighted average shares outstanding – basic 300,213 297,188 299,626 297,165 Effect of dilutive securities: Equity awards 1,128 1,081 1,158 1,044 Weighted average shares outstanding – diluted 301,341 298,269 300,784 298,209 Diluted earnings per share attributable to the Company’s common stockholders: Net income per share $ 0.26 $ 0.15 $ 0.82 $ 0.63 24 14. Earnings per Unit Basic earnings per unit is calculated by dividing net income attributable to the Operating Partnership’s common unitholders, including any participating securities, by the weighted average number of partnership common units outstanding for the period. Certain restricted units issued pursuant to the Company’s share-based compensation program are considered participating securities, as such unitholders have rights to receive non-forfeitable dividends. Fully-diluted earnings per unit reflects the potential dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units. Unvested RSUs are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the Operating Partnership’s common units. The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the three and nine months ended September 30, 2022 and 2021 (dollars in thousands, except per unit data): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Computation of Basic Earnings Per Unit: Net income $ 79,741 $ 46,145 $ 247,038 $ 188,944 Non-forfeitable dividends on unvested restricted units ( 238 ) ( 207 ) ( 710 ) ( 593 ) Net income attributable to the Operating Partnership’s common units for basic earnings per unit $ 79,503 $ 45,938 $ 246,328 $ 188,351 Weighted average number common units outstanding – basic 300,213 297,188 299,626 297,165 Basic earnings per unit attributable to the Operating Partnership’s common units: Net income per unit $ 0.26 $ 0.15 $ 0.82 $ 0.63 Computation of Diluted Earnings Per Unit: Net income attributable to the Operating Partnership’s common units for diluted earnings per unit $ 79,503 $ 45,938 $ 246,328 $ 188,351 Weighted average common units outstanding – basic 300,213 297,188 299,626 297,165 Effect of dilutive securities: Equity awards 1,128 1,081 1,158 1,044 Weighted average common units outstanding – diluted 301,341 298,269 300,784 298,209 Diluted earnings per unit attributable to the Operating Partnership’s common units: Net income per unit $ 0.26 $ 0.15 $ 0.82 $ 0.63 25 15. Commitments and Contingencies Legal Matters The Company is not presently involved in any material litigation arising outside the ordinary course of business. However, the Company is involved in routine litigation arising in the ordinary course of business, none of which the Company believes, individually or in the aggregate, taking into account existing reserves, will have a material impact on the Company’s financial condition, operating results, or cash flows. Environmental Matters Under various federal, state, and local laws, ordinances, and regulations, the Company may be or become liable for the costs of removal or remediation of certain hazardous or toxic substances released on or in the Company’s property or disposed of by the Company or its tenants, as well as certain other potential costs that could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). The Company does not believe that any resulting liability from such matters will have a material impact on the Company’s financial condition, operating results, or cash flows. During the three and nine months ended September 30, 2022 and 2021, the Company did no t incur any material governmental fines resulting from environmental matters. 16. Related-Party Transactions In the ordinary course of conducting its business, the Company enters into agreements with its affiliates in relation to the leasing and management of its real estate assets. As of September 30, 2022 and December 31, 2021, there were no material receivables from or payables to related parties. During the three and nine months ended September 30, 2022 and 2021, the Company did no t engage in any material related-party transactions. 17. Subsequent Events In preparing the unaudited Condensed Consolidated Financial Statements, the Company has evaluated events and transactions occurring after September 30, 2022 for recognition and/or disclosure purposes. Based on this evaluation, there were no subsequent events from September 30, 2022 through the date the financial statements were issued. 26