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) June 30, 2023 December 31, 2022 Assets Real estate Land $ 1,799,837 $ 1,820,358 Buildings and improvements 9,081,191 9,077,993 10,881,028 10,898,351 Accumulated depreciation and amortization ( 3,078,542 ) ( 2,996,759 ) Real estate, net 7,802,486 7,901,592 Cash and cash equivalents 13,646 16,492 Restricted cash 1,214 4,767 Marketable securities 21,105 21,669 Receivables, net 253,791 264,146 Deferred charges and prepaid expenses, net 161,866 154,141 Real estate assets held for sale — 10,439 Other assets 62,556 62,684 Total assets $ 8,316,664 $ 8,435,930 Liabilities Debt obligations, net $ 4,913,212 $ 5,035,501 Accounts payable, accrued expenses and other liabilities 527,280 535,419 Total liabilities 5,440,492 5,570,920 Commitments and contingencies (Note 15) — — Equity Common stock, $ 0.01 par value; authorized 3,000,000,000 shares; 309,719,833 and 309,042,754 shares issued and 300,592,841 and 299,915,762 shares outstanding 3,006 2,999 Additional paid-in capital 3,297,798 3,299,496 Accumulated other comprehensive income 11,103 8,851 Distributions in excess of net income ( 435,735 ) ( 446,336 ) Total equity 2,876,172 2,865,010 Total liabilities and equity $ 8,316,664 $ 8,435,930 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 June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenues Rental income $ 309,192 $ 305,898 $ 620,322 $ 604,260 Other revenues 601 233 915 500 Total revenues 309,793 306,131 621,237 604,760 Operating expenses Operating costs 35,705 34,497 71,600 69,293 Real estate taxes 43,712 42,304 88,400 83,944 Depreciation and amortization 88,812 85,137 176,553 169,359 Impairment of real estate assets 16,736 7 17,836 4,597 General and administrative 28,514 29,702 57,686 57,702 Total operating expenses 213,479 191,647 412,075 384,895 Other income (expense) Dividends and interest 57 35 72 110 Interest expense ( 47,485 ) ( 47,886 ) ( 96,165 ) ( 95,208 ) Gain on sale of real estate assets 3,857 22,988 52,325 44,899 Gain (loss) on extinguishment of debt, net 4,350 ( 221 ) 4,350 ( 221 ) Other ( 685 ) ( 1,609 ) ( 1,090 ) ( 2,148 ) Total other expense ( 39,906 ) ( 26,693 ) ( 40,508 ) ( 52,568 ) Net income $ 56,408 $ 87,791 $ 168,654 $ 167,297 Net income per common share: Basic $ 0.19 $ 0.29 $ 0.56 $ 0.56 Diluted $ 0.19 $ 0.29 $ 0.56 $ 0.56 Weighted average shares: Basic 300,961 299,992 300,899 299,246 Diluted 302,285 301,094 302,234 300,360 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 June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net income $ 56,408 $ 87,791 $ 168,654 $ 167,297 Other comprehensive income Change in unrealized gain on interest rate swaps, net (Note 6) 6,045 4,100 2,057 15,381 Change in unrealized gain (loss) on marketable securities ( 62 ) ( 80 ) 195 ( 409 ) Total other comprehensive income 5,983 4,020 2,252 14,972 Comprehensive income $ 62,391 $ 91,811 $ 170,906 $ 182,269 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 Income (Loss) Distributions in Excess of Net Income Total 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 Repurchases of common shares in conjunction with equity award plans — — ( 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 Repurchases of common shares in conjunction with equity award plans — — ( 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 Beginning balance, January 1, 2023 299,916 $ 2,999 $ 3,299,496 $ 8,851 $ ( 446,336 ) $ 2,865,010 Common stock dividends ($ 0.260 per common share) — — — — ( 79,298 ) ( 79,298 ) Equity based compensation expense — — 4,518 — — 4,518 Other comprehensive loss — — — ( 3,731 ) — ( 3,731 ) Issuance of common stock 632 6 ( 6 ) — — — Repurchases of common shares in conjunction with equity award plans — — ( 11,229 ) — — ( 11,229 ) Net income — — — — 112,246 112,246 Ending balance, March 31, 2023 300,548 3,005 3,292,779 5,120 ( 413,388 ) 2,887,516 Common stock dividends ($ 0.260 per common share) — — — — ( 78,755 ) ( 78,755 ) Equity based compensation expense — — 5,019 — — 5,019 Other comprehensive income — — — 5,983 — 5,983 Issuance of common stock 45 1 — — — 1 Net income — — — — 56,408 56,408 Ending balance, June 30, 2023 300,593 3,006 3,297,798 11,103 ( 435,735 ) 2,876,172 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) Six Months Ended June 30, 2023 2022 Operating activities: Net income $ 168,654 $ 167,297 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 176,553 169,359 Accretion of debt premium and discount, net ( 1,452 ) ( 1,432 ) Deferred financing cost amortization 3,469 3,505 Accretion of above- and below-market leases, net ( 6,044 ) ( 5,932 ) Tenant inducement amortization and other 2,069 2,035 Impairment of real estate assets 17,836 4,597 Gain on sale of real estate assets ( 52,325 ) ( 44,899 ) Equity based compensation 8,835 10,343 (Gain) loss on extinguishment of debt, net ( 4,350 ) 221 Changes in operating assets and liabilities: Receivables, net 8,754 ( 10,503 ) Deferred charges and prepaid expenses ( 24,208 ) ( 22,800 ) Other assets ( 388 ) ( 169 ) Accounts payable, accrued expenses and other liabilities ( 2,462 ) 2,494 Net cash provided by operating activities 294,941 274,116 Investing activities: Improvements to and investments in real estate assets ( 156,062 ) ( 146,953 ) Acquisitions of real estate assets ( 1,914 ) ( 409,688 ) Proceeds from sales of real estate assets 145,568 139,981 Purchase of marketable securities ( 20,273 ) ( 14,321 ) Proceeds from sale of marketable securities 20,772 14,404 Net cash used in investing activities ( 11,909 ) ( 416,577 ) Financing activities: Repayment of borrowings under unsecured revolving credit facility ( 375,000 ) ( 360,000 ) Proceeds from borrowings under unsecured revolving credit facility 250,000 600,000 Proceeds from unsecured term loans 200,000 — Repayment of borrowings under unsecured notes ( 194,253 ) ( 250,000 ) Deferred financing and debt extinguishment costs ( 474 ) ( 8,223 ) Proceeds from issuances of common shares — 47,407 Distributions to common stockholders ( 158,475 ) ( 145,250 ) Repurchases of common shares in conjunction with equity award plans ( 11,229 ) ( 10,460 ) Net cash used in financing activities ( 289,431 ) ( 126,526 ) Net change in cash, cash equivalents and restricted cash ( 6,399 ) ( 268,987 ) Cash, cash equivalents and restricted cash at beginning of period 21,259 297,743 Cash, cash equivalents and restricted cash at end of period $ 14,860 $ 28,756 Reconciliation to consolidated balance sheets: Cash and cash equivalents $ 13,646 $ 16,828 Restricted cash 1,214 11,928 Cash, cash equivalents and restricted cash at end of period $ 14,860 $ 28,756 Supplemental disclosure of cash flow information: Cash paid for interest, net of amount capitalized of $ 1,898 and $ 1,432 $ 95,060 $ 93,596 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) June 30, 2023 December 31, 2022 Assets Real estate Land $ 1,799,837 $ 1,820,358 Buildings and improvements 9,081,191 9,077,993 10,881,028 10,898,351 Accumulated depreciation and amortization ( 3,078,542 ) ( 2,996,759 ) Real estate, net 7,802,486 7,901,592 Cash and cash equivalents 13,621 15,565 Restricted cash 1,214 4,767 Marketable securities 21,105 21,669 Receivables, net 253,791 264,146 Deferred charges and prepaid expenses, net 161,866 154,141 Real estate assets held for sale — 10,439 Other assets 62,556 62,684 Total assets $ 8,316,639 $ 8,435,003 Liabilities Debt obligations, net $ 4,913,212 $ 5,035,501 Accounts payable, accrued expenses and other liabilities 527,280 535,419 Total liabilities 5,440,492 5,570,920 Commitments and contingencies (Note 15) — — Capital Partnership common units; 309,719,833 and 309,042,754 units issued and 300,592,841 and 299,915,762 units outstanding 2,865,044 2,855,232 Accumulated other comprehensive income 11,103 8,851 Total capital 2,876,147 2,864,083 Total liabilities and capital $ 8,316,639 $ 8,435,003 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 June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenues Rental income $ 309,192 $ 305,898 $ 620,322 $ 604,260 Other revenues 601 233 915 500 Total revenues 309,793 306,131 621,237 604,760 Operating expenses Operating costs 35,705 34,497 71,600 69,293 Real estate taxes 43,712 42,304 88,400 83,944 Depreciation and amortization 88,812 85,137 176,553 169,359 Impairment of real estate assets 16,736 7 17,836 4,597 General and administrative 28,514 29,702 57,686 57,702 Total operating expenses 213,479 191,647 412,075 384,895 Other income (expense) Dividends and interest 57 35 72 110 Interest expense ( 47,485 ) ( 47,886 ) ( 96,165 ) ( 95,208 ) Gain on sale of real estate assets 3,857 22,988 52,325 44,899 Gain (loss) on extinguishment of debt, net 4,350 ( 221 ) 4,350 ( 221 ) Other ( 685 ) ( 1,609 ) ( 1,090 ) ( 2,148 ) Total other expense ( 39,906 ) ( 26,693 ) ( 40,508 ) ( 52,568 ) Net income $ 56,408 $ 87,791 $ 168,654 $ 167,297 Net income per common unit: Basic $ 0.19 $ 0.29 $ 0.56 $ 0.56 Diluted $ 0.19 $ 0.29 $ 0.56 $ 0.56 Weighted average units: Basic 300,961 299,992 300,899 299,246 Diluted 302,285 301,094 302,234 300,360 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 June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net income $ 56,408 $ 87,791 $ 168,654 $ 167,297 Other comprehensive income (loss) Change in unrealized gain on interest rate swaps, net (Note 6) 6,045 4,100 2,057 15,381 Change in unrealized gain (loss) on marketable securities ( 62 ) ( 80 ) 195 ( 409 ) Total other comprehensive income 5,983 4,020 2,252 14,972 Comprehensive income $ 62,391 $ 91,811 $ 170,906 $ 182,269 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 Income (Loss) Total 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 Repurchases of OP Units in conjunction with equity award plans ( 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 Repurchases of OP Units in conjunction with equity award plans ( 2 ) — ( 2 ) Net income 87,791 — 87,791 Ending balance, June 30, 2022 2,800,506 2,298 2,802,804 Beginning balance, January 1, 2023 $ 2,855,232 $ 8,851 $ 2,864,083 Distributions to partners ( 78,397 ) — ( 78,397 ) Equity based compensation expense 4,518 — 4,518 Other comprehensive loss — ( 3,731 ) ( 3,731 ) Repurchases of OP Units in conjunction with equity award plans ( 11,229 ) — ( 11,229 ) Net income 112,246 — 112,246 Ending balance, March 31, 2023 2,882,370 5,120 2,887,490 Distributions to partners ( 78,754 ) — ( 78,754 ) Equity based compensation expense 5,019 — 5,019 Other comprehensive income — 5,983 5,983 Issuance of OP Units 1 — 1 Net income 56,408 — 56,408 Ending balance, June 30, 2023 2,865,044 11,103 2,876,147 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) Six Months Ended June 30, 2023 2022 Operating activities: Net income $ 168,654 $ 167,297 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 176,553 169,359 Accretion of debt premium and discount, net ( 1,452 ) ( 1,432 ) Deferred financing cost amortization 3,469 3,505 Accretion of above- and below-market leases, net ( 6,044 ) ( 5,932 ) Tenant inducement amortization and other 2,069 2,035 Impairment of real estate assets 17,836 4,597 Gain on sale of real estate assets ( 52,325 ) ( 44,899 ) Equity based compensation 8,835 10,343 (Gain) loss on extinguishment of debt, net ( 4,350 ) 221 Changes in operating assets and liabilities: Receivables, net 8,754 ( 10,503 ) Deferred charges and prepaid expenses ( 24,208 ) ( 22,800 ) Other assets ( 388 ) ( 169 ) Accounts payable, accrued expenses and other liabilities ( 2,462 ) 2,494 Net cash provided by operating activities 294,941 274,116 Investing activities: Improvements to and investments in real estate assets ( 156,062 ) ( 146,953 ) Acquisitions of real estate assets ( 1,914 ) ( 409,688 ) Proceeds from sales of real estate assets 145,568 139,981 Purchase of marketable securities ( 20,273 ) ( 14,321 ) Proceeds from sale of marketable securities 20,772 14,404 Net cash used in investing activities ( 11,909 ) ( 416,577 ) Financing activities: Repayment of borrowings under unsecured revolving credit facility ( 375,000 ) ( 360,000 ) Proceeds from borrowings under unsecured revolving credit facility 250,000 600,000 Proceeds from unsecured notes 200,000 — Repayment of borrowings under unsecured notes ( 194,253 ) ( 250,000 ) Deferred financing and debt extinguishment costs ( 474 ) ( 8,223 ) Proceeds from issuances of OP Units — 47,407 Partner distributions and repurchases of OP Units ( 168,802 ) ( 140,741 ) Net cash used in financing activities ( 288,529 ) ( 111,557 ) Net change in cash, cash equivalents and restricted cash ( 5,497 ) ( 254,018 ) Cash, cash equivalents and restricted cash at beginning of period 20,332 282,585 Cash, cash equivalents and restricted cash at end of period $ 14,835 $ 28,567 Reconciliation to consolidated balance sheets: Cash and cash equivalents $ 13,621 $ 16,639 Restricted cash 1,214 11,928 Cash, cash equivalents and restricted cash at end of period $ 14,835 $ 28,567 Supplemental disclosure of cash flow information: Cash paid for interest, net of amount capitalized of $ 1,898 and $ 1,432 $ 95,060 $ 93,596 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 corporation that has elected to be taxed as a 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 June 30, 2023, the Company’s portfolio was comprised of 365 shopping centers (the “Portfolio”) totaling approximately 65 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, 2022 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 13, 2023. 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 and excluding net capital gains. 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 June 30, 2023 and December 31, 2022. Open tax years generally range from 2019 through 2022 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 six months ended June 30, 2023, the Company acquired the following asset: Description (1) Location Month Acquired GLA Aggregate Purchase Price (2) Land at Aurora Plaza (3) Aurora, CO Apr-23 N/A $ 1,914 — 1,914 (1) No debt was assumed related to the listed acquisition. (2) Aggregate purchase price includes $0.1 million of transaction costs. (3) The Company terminated a ground lease and acquired the associated land parcel. During the six months ended June 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 The aggregate purchase price of the assets acquired during the six months ended June 30, 2023 and 2022, respectively, has been allocated as follows: Six Months Ended June 30, Six Months Ended June 30, Assets 2023 2022 Land $ 1,914 $ 84,361 Buildings — 294,241 Building and tenant improvements — 33,352 Above-market leases (1) — 701 In-place leases (2) — 29,607 Total assets acquired $ 1,914 $ 442,262 Liabilities Below-market leases (3) $ — $ 30,748 Other liabilities — 1,826 Total liabilities — 32,574 Net assets acquired $ 1,914 $ 409,688 (1) The weighted average amortization period at the time of acquisition for above-market leases related to assets acquired during the six months ended June 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 six months ended June 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 six months ended June 30, 2022 was 20.1 years. 3. Dispositions and Assets Held for Sale During the three months ended June 30, 2023, the Company disposed of two shopping centers and five partial shopping centers for aggregate net proceeds of $ 25.6 million, resulting in aggregate gain of $ 3.6 million and aggregate impairment of $ 5.0 million. In addition, during the three months ended June 30, 2023, the Company received aggregate net proceeds of $0.3 million related to a non-operating asset and resolved contingencies related to a previously disposed asset, resulting in net gain of $0.2 million. During the six months ended June 30, 2023, the Company disposed of eight shopping centers and seven partial shopping centers for aggregate net proceeds of $ 145.3 million, resulting in aggregate gain of $ 52.1 million and aggregate impairment of $ 6.1 million. In addition, during the six months ended June 30, 2023, the Company received aggregate net proceeds of $ 0.3 million related to a non-operating asset, resulting in net gain of $ 0.2 million. During the three months ended June 30, 2022, the Company disposed of five shopping centers and three partial shopping centers for aggregate net proceeds of $ 81.1 million, resulting in aggregate gain of $ 23.0 million and aggregate impairment of less than $ 0.1 million. During the six months ended June 30, 2022, the Company disposed of ten shopping centers and four partial shopping centers for aggregate net proceeds of $ 140.0 million, resulting in aggregate gain of $ 44.8 million and aggregate impairment of $ 4.6 million. In addition, during the six months ended June 30, 2022, the Company resolved contingencies related to previously disposed assets, resulting in net gain of $ 0.1 million. 13 As of June 30, 2023, the Company had no properties held for sale. As of December 31, 2022, the Company had one property and two partial properties held for sale. There were no liabilities associated with the properties classified as held for sale. The following table presents the assets associated with the properties classified as held for sale as of December 31, 2022: Assets December 31, 2022 Land $ 1,988 Buildings and improvements 13,864 Accumulated depreciation and amortization ( 5,625 ) Real estate, net 10,227 Other assets 212 Assets associated with real estate assets held for sale $ 10,439 There were no discontinued operations for the three and six months ended June 30, 2023 and 2022 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: June 30, 2023 December 31, 2022 Land $ 1,799,837 $ 1,820,358 Buildings and improvements: Buildings and tenant improvements 8,561,322 8,535,279 Lease intangibles (1) 519,869 542,714 10,881,028 10,898,351 Accumulated depreciation and amortization (2) ( 3,078,542 ) ( 2,996,759 ) Total $ 7,802,486 $ 7,901,592 (1) As of June 30, 2023 and December 31, 2022, Lease intangibles consisted of $ 470.6 million and $ 492.0 million, respectively, of in-place leases and $ 49.2 million and $ 50.7 million, respectively, of above-market leases. These intangible assets are amortized over the term of each related lease. (2) As of June 30, 2023 and December 31, 2022, Accumulated depreciation and amortization included $ 451.7 million and $ 465.2 million, respectively, of accumulated amortization related to Lease intangibles. In addition, as of June 30, 2023 and December 31, 2022, the Company had intangible liabilities relating to below-market leases of $ 337.5 million and $ 349.7 million, respectively, and accumulated accretion of $ 247.5 million and $ 252.9 million, respectively. These intangible liabilities are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets. 14 Below-market lease accretion income, net of above-market lease amortization for the three months ended June 30, 2023 and 2022 was $ 2.7 million and $ 3.0 million, respectively. Below-market lease accretion income, net of above-market lease amortization for the six months ended June 30, 2023 and 2022 was $ 6.0 million and $ 5.9 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 June 30, 2023 and 2022 was $ 3.9 million and $ 4.8 million, respectively. Amortization expense associated with in-place lease value for the six months ended June 30, 2023 and 2022 was $ 8.4 million and $ 8.9 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 2023 (remaining six months) $ ( 5,025 ) $ 7,208 2024 ( 9,526 ) 11,899 2025 ( 8,293 ) 8,752 2026 ( 7,265 ) 6,294 2027 ( 6,170 ) 4,797 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 recognized the following impairments during the three months ended June 30, 2023: Three Months Ended June 30, 2023 Property Name (1) Location GLA Impairment Charge The Quentin Collection Kildeer, IL 171,530 $ 11,705 Broadway Faire - Theater Box (2) Fresno, CA 39,983 2,102 Elk Grove Town Center (2) Elk Grove Village, IL 61,609 1,796 Spring Mall (2) Greenfield, WI 45,920 1,078 The Manchester Collection - Crossroads (2) Manchester, CT 14,867 55 333,909 $ 16,736 (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 six months ended June 30, 2023 The Company recognized the following impairments during the six months ended June 30, 2023: Six Months Ended June 30, 2023 Property Name (1) Location GLA Impairment Charge The Quentin Collection Kildeer, IL 171,530 $ 11,705 Broadway Faire - Theater Box (2) Fresno, CA 39,983 2,102 Elk Grove Town Center (2) Elk Grove Village, IL 61,609 1,796 The Manchester Collection - Crossroads (2) Manchester, CT 14,867 1,155 Spring Mall (2) Greenfield, WI 45,920 1,078 333,909 $ 17,836 (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 six months ended June 30, 2023 15 The Company recognized the following impairments during the three months ended June 30, 2022: Three Months Ended June 30, 2022 Property Name (1) Location GLA Impairment Charge Torrington Plaza (2) Torrington, CT 125,496 $ 7 125,496 $ 7 (1) The Company recognized an impairment charge based upon changes in the anticipated hold period of this property 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 year ended December 31, 2022. The Company recognized the following impairments during the six months ended June 30, 2022: Six Months Ended June 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 year ended December 31, 2022. 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 six months ended June 30, 2023, the Company entered into three interest rate swap agreements with an effective date of May 1, 2023, an aggregate notional amount of $ 200.0 million, a weighted average fixed rate of 3.59 %, and an expiration date of July 26, 2027. During the year ended December 31, 2022, the Company did not enter into any new interest rate swap agreements. Detail on the Company’s interest rate derivatives designated as cash flow hedges outstanding as of June 30, 2023 and December 31, 2022 is as follows: Number of Instruments Notional Amount June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022 Interest Rate Swaps 7 4 $ 500,000 $ 300,000 16 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 June 30, 2023 and December 31, 2022 is as follows: Fair Value of Derivative Instruments Interest rate swaps classified as: June 30, 2023 December 31, 2022 Gross derivative assets $ 11,697 $ 9,640 Gross derivative liabilities — — Net derivative assets $ 11,697 $ 9,640 The gross derivative assets are included in Other assets 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 volatility. 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 cash flow hedges is recognized in other comprehensive income (loss) and is reclassified into earnings as interest expense in the period that the hedged 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 six months ended June 30, 2023 and 2022 is as follows: Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Change in unrealized gain on interest rate swaps $ 8,440 $ 2,727 $ 5,973 $ 12,161 Amortization (accretion) of interest rate swaps to interest expense ( 2,395 ) 1,373 ( 3,916 ) 3,220 Change in unrealized gain on interest rate swaps, net $ 6,045 $ 4,100 $ 2,057 $ 15,381 The Company estimates that $ 11.3 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 six months ended June 30, 2023 and 2022. Non-Designated (Mark-to-Market) Hedges of Interest Rate Risk The Company does not use derivatives for trading or speculative purposes. As of June 30, 2023 and December 31, 2022, 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. 17 7. Debt Obligations As of June 30, 2023 and December 31, 2022, the Company had the following indebtedness outstanding: Carrying Value as of June 30, 2023 December 31, 2022 Stated Interest Rate (1) Scheduled Maturity Date Notes payable Unsecured notes (2) $ 4,418,805 $ 4,618,453 2.25 % – 7.97 % 2024 – 2031 Net unamortized premium 22,467 23,787 Net unamortized debt issuance costs ( 19,826 ) ( 22,325 ) Total notes payable, net $ 4,421,446 $ 4,619,915 Unsecured Credit Facility Revolving Facility (3) $ — $ 125,000 6.24 % 2026 Term Loan Facility (3)(4)(5) 500,000 300,000 6.46 % 2027 Net unamortized debt issuance costs ( 8,234 ) ( 9,414 ) Total Unsecured Credit Facility and term loans $ 491,766 $ 415,586 Total debt obligations, net $ 4,913,212 $ 5,035,501 (1) Stated interest rates as of June 30, 2023 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 3.70 % as of June 30, 2023. (3) The Company's Revolving Facility (defined hereafter) and Term Loan Facility (defined hereafter) include a sustainability metric incentive, which can reduce the applicable credit spread by up to two basis points. During the six months ended June 30, 2023, the Company concluded that it did not qualify for a reduction to the applicable credit spread during the six months ended June 30, 2023 and year ended December 31, 2022 resulting in a less than $ 0.1 million increase to interest expense. (4) Effective June 1, 2022, the Company has in place four interest rate swap agreements that convert the variable interest rate on $ 300.0 million outstanding under the Term Loan Facility (defined hereafter) to a fixed, combined interest rate of 2.59 % (plus a spread of 120 basis points) through July 26, 2024. (5) Effective May 1, 2023, the Company has in place three interest rate swap agreements that convert the variable interest rate on $ 200.0 million outstanding under the Term Loan Facility (defined hereafter) to a fixed, combined interest rate of 3.59 % (plus a spread of 120 basis points and Secured Overnight Financing Rate ("SOFR") adjustment of 10 basis points) through the maturity of the term loan on July 26, 2027. 2023 Debt Transactions The Operating Partnership has an unsecured credit facility as amended and restated on April 28, 2022 (the "Unsecured Credit Facility"), which is comprised of a $ 1.25 billion revolving loan facility (the "Revolving Facility") and a $ 300.0 million term loan facility, in addition to a $ 200.0 million delayed draw term loan, which was drawn on April 24, 2023 (together the "Term Loan Facility"). During the six months ended June 30, 2023, the Operating Partnership repaid $ 125.0 million, net of borrowings, under its Revolving Facility, with proceeds from dispositions. In April 2023, the Operating Partnership commenced a cash tender offer (the "Tender Offer") for up to $ 199.6 million of its outstanding 3.65 % Senior Notes due 2024 (the "2024 Notes"), which expired on April 24, 2023. Pursuant to the Tender Offer, the Operating Partnership repurchased $ 199.6 million of its 2024 Notes on April 25, 2023. Following the Tender Offer, $ 300.4 million aggregate principal amount of the 2024 Notes remain outstanding. The Operating Partnership funded the Tender Offer with proceeds from its $ 200.0 million delayed draw term loan, which was drawn on April 24, 2023. In connection with the Tender Offer, the Company recognized a $ 4.3 million gain on extinguishment of debt during the three months ended June 30, 2023. 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 June 30, 2023. 18 Debt Maturities As of June 30, 2023 and December 31, 2022, the Company had accrued interest of $ 46.4 million and $ 47.3 million outstanding, respectively. As of June 30, 2023, scheduled maturities of the Company’s outstanding debt obligations were as follows: Year ending December 31, 2023 (remaining six months) $ — 2024 300,352 2025 700,000 2026 607,542 2027 900,000 Thereafter 2,410,911 Total debt maturities 4,918,805 Net unamortized premium 22,467 Net unamortized debt issuance costs ( 28,060 ) Total debt obligations, net $ 4,913,212 As of the date the financial statements were issued, the Company's scheduled debt maturities for the next 12 months were comprised of the $ 300.4 million outstanding principal balance on the 2024 Notes. 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: June 30, 2023 December 31, 2022 Carrying Amounts Fair Value Carrying Amounts Fair Value Notes payable $ 4,421,446 $ 3,967,511 $ 4,619,915 $ 4,148,681 Unsecured Credit Facility 491,766 500,000 415,586 425,056 Total debt obligations, net $ 4,913,212 $ 4,467,511 $ 5,035,501 $ 4,573,737 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 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. 19 The following table presents the placement in the fair value hierarchy of assets that are measured and recognized at fair value on a recurring basis: Fair Value Measurements as of June 30, 2023 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) $ 21,106 $ 833 $ 20,273 $ — Interest rate derivatives $ 11,697 $ — $ 11,697 $ — Fair Value Measurements as of December 31, 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) $ 21,669 $ 1,088 $ 20,581 $ — Interest rate derivatives $ 9,640 $ — $ 9,640 $ — (1) As of June 30, 2023 and December 31, 2022, marketable securities included $ 0.6 million and $ 0.8 million of net unrealized losses, respectively. As of June 30, 2023, the contractual maturities of the Company’s marketable securities were 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. 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 non-recurring basis. The table includes information related to properties that were remeasured to fair value as a result of impairment testing during the six months ended June 30, 2023, excluding the properties sold prior to June 30, 2023. During the year ended December 31, 2022, no properties were remeasured to fair value as a result of impairment testing that were not sold prior to December 31, 2022. Fair Value Measurements as of June 30, 2023 Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Impairment of Real Estate Assets Assets: Properties (1)(2) $ 14,987 $ — $ — $ 14,987 $ 11,705 (1) Excludes properties disposed of prior to June 30, 2023. (2) The carrying value of The Quentin Collection, which was remeasured to fair value based upon an income approach valuation using the direct capitalization method during the three months ended June 30, 2023, is $ 15.0 million. The capitalization rate of 8.75% utilized in the analysis was based upon unobservable inputs that the Company believes to be within a reasonable range of current market rates for the property. 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 20 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 $ 2.0 million and $ 2.4 million of income based on percentage rents for the three months ended June 30, 2023 and 2022, respectively. The Company recognized $ 5.7 million and $ 5.9 million of income based on percentage rents for the six months ended June 30, 2023 and 2022, respectively. These amounts are included in Rental income on the Company’s unaudited Condensed Consolidated Statements of Operations. 21 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 June 30, 2023, 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 ROU asset or 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 June 30, Six Months Ended June 30, Supplemental Statements of Operations Information 2023 2022 2023 2022 Operating lease costs $ 1,407 $ 1,613 $ 2,818 $ 3,051 Variable lease costs 123 83 262 163 Total lease costs $ 1,530 $ 1,696 $ 3,080 $ 3,214 Six Months Ended June 30, Supplemental Statements of Cash Flows Information 2023 2022 Operating cash outflows from operating leases $ 3,027 $ 3,072 ROU assets obtained in exchange for operating lease liabilities 23 10,708 ROU asset reduction due to dispositions, held for sale, and lease modifications ( 144 ) — Operating Lease Liabilities As of June 30, 2023 Future minimum operating lease payments: 2023 (remaining six months) $ 3,016 2024 5,943 2025 5,642 2026 4,917 2027 2,701 2028 1,902 Thereafter 30,956 Total future minimum operating lease payments 55,077 Less: imputed interest ( 17,445 ) Operating lease liabilities $ 37,632 Supplemental Balance Sheets Information As of June 30, 2023 As of December 31, 2022 Operating lease liabilities (1)(2) $ 37,632 $ 39,923 ROU assets (1)(3) 33,670 35,754 (1) As of June 30, 2023 and December 31, 2022, the weighted average remaining lease term was 16.1 years and 16.0 years, respectively, and the weighted average discount rate was 4.44 % and 4.43 %, 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 June 30, 2023, there were no material leases that have been executed but not yet commenced. 22 11. Equity and Capital ATM Program In November 2022, the Company renewed its 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 November 1, 2025, unless earlier terminated or extended by the Company, sales agents, forward sellers, and forward purchasers. The ATM Program replaced the Company's prior at-the-market equity offering program (the "Prior ATM Program"), which was scheduled to expire on January 9, 2023. During the six months ended June 30, 2023, the Company did not issue any shares of common stock under the ATM Program. During the six months ended June 30, 2022, the Company issued 1.9 million shares of common stock under the Prior ATM Program at an average price per share of $ 25.55 , for total gross proceeds of $ 48.1 million, excluding commissions. The Company incurred commissions of $ 0.6 million in conjunction with the Prior ATM Program for the six months ended June 30, 2022. As of June 30, 2023, $ 400.0 million of common stock remained available for issuance under the ATM Program. Share Repurchase Program In November 2022, the Company renewed its share repurchase program (the "Repurchase Program") for up to $ 400.0 million of its common stock. The Repurchase Program is scheduled to expire on November 1, 2025, unless suspended or extended by the Company's board of directors. The Repurchase Program replaced the Company's prior share repurchase program (the "Prior Repurchase Program"), which was scheduled to expire on January 9, 2023. During the six months ended June 30, 2023 and 2022, the Company did not repurchase any shares of common stock. As of June 30, 2023, the Repurchase Program had $ 400.0 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 six months ended June 30, 2023 and 2022, the Company withheld 0.5 million and 0.4 million shares of its common stock, respectively. Dividends and Distributions During the three months ended June 30, 2023 and 2022, the Company's board of directors declared common stock dividends and OP Unit distributions of $ 0.26 per share/unit and $ 0.24 per share/unit, respectively. During the six months ended June 30, 2023 and 2022, the board of directors declared common stock dividends and OP Unit distributions of $ 0.52 per share/unit and $ 0.48 per share/unit, respectively. As of June 30, 2023 and December 31, 2022, the Company had declared but unpaid common stock dividends and OP Unit distributions of $ 81.2 million and $ 81.6 million, respectively. These amounts are included in Accounts payable, accrued expenses and other liabilities on the Company’s unaudited Condensed Consolidated Balance Sheets. 23 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. During the six months ended June 30, 2023 and the year ended December 31, 2022, 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 0.7 million for the six months ended June 30, 2023 and the year ended December 31, 2022, respectively, with vesting periods ranging from one to five years . For the service-based and performance-based RSU's granted, fair value is based on the Company's grant date stock price or the grant date stock price adjusted for dividend or dividend equivalent rights, when applicable. 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 Six Months Ended June 30, 2023 Year Ended, December 31, 2022 Volatility 32.0 % - 52.0 % 27.0 % - 51.0 % Weighted average risk-free interest rate 3.79 % - 5.18 % 1.08 % - 1.39 % Weighted average common stock dividend yield 4.3 % - 4.8 % 3.8 % - 4.6 % During the three months ended June 30, 2023 and 2022, the Company recognized $ 5.0 million and $ 6.5 million of equity compensation expense, respectively, of which $ 0.4 million and $ 0.5 million was capitalized, respectively. During the six months ended June 30, 2023 and 2022, the Company recognized $ 9.5 million and $ 11.1 million of equity compensation expense, respectively, of which $ 0.7 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 June 30, 2023, the Company had $ 28.2 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. 24 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 six months ended June 30, 2023 and 2022 (dollars in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Computation of Basic Earnings Per Share: Net income $ 56,408 $ 87,791 $ 168,654 $ 167,297 Non-forfeitable dividends on unvested restricted shares ( 221 ) ( 273 ) ( 448 ) ( 496 ) Net income attributable to the Company’s common stockholders for basic earnings per share $ 56,187 $ 87,518 $ 168,206 $ 166,801 Weighted average number shares outstanding – basic 300,961 299,992 300,899 299,246 Basic earnings per share attributable to the Company’s common stockholders: Net income per share $ 0.19 $ 0.29 $ 0.56 $ 0.56 Computation of Diluted Earnings Per Share: Net income attributable to the Company’s common stockholders for diluted earnings per share $ 56,187 $ 87,518 $ 168,206 $ 166,801 Weighted average shares outstanding – basic 300,961 299,992 300,899 299,246 Effect of dilutive securities: Equity awards 1,324 1,102 1,335 1,114 Weighted average shares outstanding – diluted 302,285 301,094 302,234 300,360 Diluted earnings per share attributable to the Company’s common stockholders: Net income per share $ 0.19 $ 0.29 $ 0.56 $ 0.56 25 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 six months ended June 30, 2023 and 2022 (dollars in thousands, except per unit data): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Computation of Basic Earnings Per Unit: Net income $ 56,408 $ 87,791 $ 168,654 $ 167,297 Non-forfeitable dividends on unvested restricted units ( 221 ) ( 273 ) ( 448 ) ( 496 ) Net income attributable to the Operating Partnership’s common units for basic earnings per unit $ 56,187 $ 87,518 $ 168,206 $ 166,801 Weighted average number common units outstanding – basic 300,961 299,992 300,899 299,246 Basic earnings per unit attributable to the Operating Partnership’s common units: Net income per unit $ 0.19 $ 0.29 $ 0.56 $ 0.56 Computation of Diluted Earnings Per Unit: Net income attributable to the Operating Partnership’s common units for diluted earnings per unit $ 56,187 $ 87,518 $ 168,206 $ 166,801 Weighted average common units outstanding – basic 300,961 299,992 300,899 299,246 Effect of dilutive securities: Equity awards 1,324 1,102 1,335 1,114 Weighted average common units outstanding – diluted 302,285 301,094 302,234 300,360 Diluted earnings per unit attributable to the Operating Partnership’s common units: Net income per unit $ 0.19 $ 0.29 $ 0.56 $ 0.56 26 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 properties 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 maintains a reserve for currently known environmental matters and does not believe they will have a material impact on the Company’s financial condition, operating results, or cash flows. During the three and six months ended June 30, 2023 and 2022, the Company did no t incur any material governmental fines resulting from environmental matters. 16. Related-Party Transactions As of June 30, 2023 and December 31, 2022, there were no material receivables from or payables to related parties. During the three and six months ended June 30, 2023 and 2022, 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 June 30, 2023 for recognition and/or disclosure purposes. Based on this evaluation, there were no subsequent events from June 30, 2023 through the date the financial statements were issued . 27