What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-04-29 compared with 2023-10-30 · 95 added, 188 removed, 219 unchanged (56% of the section changed)

9 unchanged sentences

We own and operate 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, 2023, our portfolio was comprised of 364 shopping centers (the “Portfolio”) totaling approximately 65 million square feet of GLA.

As of March 31, 2024, our portfolio was comprised of 359 shopping centers (the "Portfolio") totaling approximately 64 million square feet of GLA.

Our high-quality national Portfolio is primarily located within established trade areas in the top 50 Core-Based Statistical Areas in the U.S., and our shopping centers are primarily anchored by non-discretionary and value-oriented retailers, as well as consumer-oriented service providers.

As of September 30, 2023, our three largest tenants by annualized base rent (“ABR”) were The TJX Companies, Inc.

As of March 31, 2024, our three largest tenants by annualized base rent ("ABR") were The TJX Companies, Inc.

("TJX"), The Kroger Co.

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Our key strategies to achieve this objective include proactively managing our Portfolio to drive internal growth, pursuing value-enhancing reinvestment opportunities, and prudently executing on acquisition and disposition activity, while also maintaining a flexible capital structure positioned for growth.

In addition, as we execute on our key strategies, we do so guided by our purpose-driven Corporate Responsibility strategy and our commitment to environmental, social, and governance issues.

In addition, as we execute on our key strategies, we do so guided by our purpose-driven Corporate Responsibility strategy.

We believe the following set of competitive advantages positions us to successfully execute on our key strategies:

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Leasing Highlights

As of September 30, 2023, billed and leased occupancy were 90.0% and 93.9%, respectively, as compared to 89.6% and 93.3%, respectively, as of September 30, 2022.

The following table summarizes our executed leasing activity for the three months ended September 30, 2023 and 2022 (dollars in thousands, except for per square foot (“PSF”) amounts):

For the Three Months Ended September 30, 2023

Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1)

New, renewal and option leases 427 2,733,476 $ 18.51 $ 4.29 $ 2.14 17.5 %

New and renewal leases 368 1,748,987 21.57 6.71 3.34 22.3 %

New leases 151 789,336 22.74 14.24 7.38 52.7 %

Renewal leases 217 959,651 20.61 0.52 0.02 12.3 %

Option leases 59 984,489 13.06 — — 8.2 %

For the Three Months Ended September 30, 2022

Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1)

New, renewal and option leases 417 2,791,073 $ 17.09 $ 4.91 $ 1.62 10.9 %

New and renewal leases 360 1,748,497 19.26 7.83 2.59 14.2 %

New leases 146 661,587 21.20 17.80 6.72 32.2 %

Renewal leases 214 1,086,910 18.08 1.76 0.08 11.8 %

Option leases 57 1,042,576 13.45 — — 5.8 %

(1) Based on comparable leases only, which consist of new leases signed on units that were occupied within the prior 12 months and renewal or option leases signed with the same tenant in all or a portion of the same location or that include the expansion into space that was occupied within the prior 12 months.

Excludes leases executed for terms of less than one year.

ABR PSF includes the GLA of lessee-owned leasehold improvements.

The following table summarizes our executed leasing activity for the nine months ended September 30, 2023 and 2022 (dollars in thousands, except for per square foot (“PSF”) amounts):

For the Nine Months Ended September 30, 2023

As of March 31, 2024, billed and leased occupancy were 90.6% and 95.1%, respectively, as compared to 90.0% and 94.0%, respectively, as of March 31, 2023.

The following table summarizes our executed leasing activity for the three months ended March 31, 2024 and 2023 (dollars in thousands, except for per square foot ("PSF") amounts):

For the Three Months Ended March 31, 2024

Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1)

4 unchanged sentences

Option leases 57 1,304,520 10.93 — — 7.1 %

For the Nine Months Ended September 30, 2022

For the Three Months Ended March 31, 2023

Leases GLA New ABR PSF Tenant Improvements and Allowances PSF Third Party Leasing Commissions PSF Rent Spread (1)

8 unchanged sentences

Acquisition Activity

• During the nine months ended September 30, 2023, we acquired one land parcel for an aggregate purchase price of $1.9 million, including transaction costs and closing credits.

• During the nine months ended September 30, 2022, we acquired seven shopping centers, one outparcel, and one land parcel and paid less than $0.1 million related to previously acquired assets for an aggregate purchase price of $409.7 million, including transaction costs and closing credits.

• During the three months ended March 31, 2024, we did not acquire any assets.

• During the three months ended March 31, 2023, we did not acquire any assets.

Disposition Activity

• During the nine months ended September 30, 2023, we disposed of nine shopping centers and eight partial shopping centers for aggregate net proceeds of $161.9 million, resulting in aggregate gain of $58.9 million and aggregate impairment of $6.1 million.

In addition, during the nine months ended September 30, 2023, we disposed of a non-operating asset and resolved contingencies related to a previously disposed asset for aggregate net proceeds of $0.3 million, resulting in net gain of $0.1 million.

• During the nine months ended September 30, 2022, we 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, we resolved contingencies related to previously disposed assets and had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million, resulting in net gain of $2.4 million.

• During the three months ended March 31, 2024, we disposed of three shopping centers for aggregate net proceeds of $67.2 million, resulting in aggregate gain of $15.0 million.

In addition, during the three months

ended March 31, 2024, we resolved contingencies related to previously disposed assets for aggregate net proceeds of $0.1 million, resulting in aggregate gain of $0.1 million.

• During the three months ended March 31, 2023, we disposed of six shopping centers and two partial shopping centers for aggregate net proceeds of $119.7 million, resulting in aggregate gain of $48.5 million.

Results of Operations

The results of operations discussion is combined for BPG and the Operating Partnership because there are no material differences in the results of operations between the two reporting entities.

Comparison of the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022

Revenues (in thousands)

Three Months Ended September 30,

2023 2022 $ Change

Rental income $ 307,118 $ 304,643 $ 2,475

Other revenues 196 102 94

Total revenues $ 307,314 $ 304,745 $ 2,569

Rental income

The increase in rental income for the three months ended September 30, 2023 of $2.5 million, as compared to the corresponding period in 2022, was due to an $8.2 million increase for assets owned for the full period, partially offset by a $5.7 million decrease due to net transaction activity.

The increase for assets owned for the full period was due to (i) a $7.3 million increase in base rent;

(ii) a $1.8 million increase in expense reimbursements;

(iii) a $0.3 million increase associated with revenues deemed uncollectible;

(iv) a $0.3 million increase in lease termination fees;

and (v) a $0.3 million increase in percentage rents;

partially offset by (vi) a $1.2 million decrease in straight-line rental income, net;

(vii) a $0.3 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements;

and (viii) a $0.3 million decrease in ancillary and other rental income.

The $7.3 million increase in base rent for assets owned for the full period was primarily due to contractual rent increases, positive rent spreads for new and renewal leases and option exercises of 15.2% during the nine months ended September 30, 2023 and 12.7% during the year ended December 31, 2022, and an increase in weighted average billed occupancy.

The $1.8 million increase in expense reimbursements was primarily attributable to increases in weighted average billed occupancy and reimbursable operating costs, net of decreases in reimbursable real estate taxes.

Other revenues

Other revenues remained generally consistent for the three months ended September 30, 2023 as compared to the corresponding period in 2022.

Operating Expenses (in thousands)

Three Months Ended September 30,

2023 2022 $ Change

Operating expenses

Operating costs $ 35,058 $ 33,299 $ 1,759

Real estate taxes 42,156 44,179 (2,023)

Depreciation and amortization 96,254 84,773 11,481

General and administrative 29,182 29,094 88

Total operating expenses $ 202,650 $ 191,345 $ 11,305

Operating costs

The increase in operating costs for the three months ended September 30, 2023 of $1.8 million, as compared to the corresponding period in 2022, was due to a $2.4 million increase in operating costs for assets owned for the full period, primarily due to increases in repairs and maintenance and insurance, partially offset by a $0.6 million decrease due to net transaction activity.

Real estate taxes

The decrease in real estate taxes for the three months ended September 30, 2023 of $2.0 million, as compared to the corresponding period in 2022, was due to a $1.3 million decrease in real estate taxes for assets owned for the full period, primarily due to an increase in favorable adjustments related to prior year assessments and an increase in real

estate tax refunds, partially offset by an increase in current year assessments, in addition to a $0.7 million decrease due to net transaction activity.

Depreciation and amortization

The increase in depreciation and amortization for the three months ended September 30, 2023 of $11.5 million, as compared to the corresponding period in 2022, was primarily due to a $12.6 million increase for assets owned for the full period, primarily due to an increase in accelerated depreciation and amortization related to tenant move-outs and capital expenditures, partially offset by a $1.1 million decrease attributable to net transaction activity.

General and administrative

General and administrative costs remained generally consistent for the three months ended September 30, 2023, as compared to the corresponding period in 2022.

During the three months ended September 30, 2023 and 2022, construction compensation costs of $4.7 million and $4.4 million, respectively, were capitalized to building and improvements and leasing legal costs of $0.9 million and $0.7 million, respectively, and leasing commission costs of $1.9 million and $2.1 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

Other Income and Expenses (in thousands)

Three Months Ended September 30,

2023 2022 $ Change

Other income (expense)

Dividends and interest $ 273 $ 88 $ 185

Interest expense (47,364) (48,726) 1,362

Gain on sale of real estate assets 6,712 15,768 (9,056)

Gain (loss) on extinguishment of debt, net 6 — 6

Other (555) (789) 234

Total other expense $ (40,928) $ (33,659) $ (7,269)

Dividends and interest

The increase in dividends and interest for the three months ended September 30, 2023 of $0.2 million, as compared to the corresponding period in 2022 was primarily due to an increase in interest income.

Interest expense

The decrease in interest expense for the three months ended September 30, 2023 of $1.4 million, as compared to the corresponding period in 2022, was primarily due to lower overall debt obligations, partially offset by a higher weighted average interest rate.

Gain on sale of real estate assets

During the three months ended September 30, 2023, one shopping center and one partial shopping center were disposed of resulting in aggregate gain of $6.8 million.

In addition, during the three months ended September 30, 2023, we resolved contingencies related to previously disposed assets, resulting in a net loss of $0.1 million.

During the three months ended September 30, 2022, one shopping center and three partial shopping centers were disposed of resulting in aggregate gain of $13.5 million.

In addition, during the three months ended September 30, 2022, we had land at one shopping center seized through eminent domain resulting in an aggregate gain of $2.3 million.

The decrease in other expense for the three months ended September 30, 2023 of $0.2 million as compared to the corresponding period in 2022, was primarily due to a decrease in transaction costs.

Comparison of the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022

Comparison of the Three Months Ended March 31, 2024 to the Three Months Ended March 31, 2023

Revenues (in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

2024 2023 $ Change

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Rental income

The increase in rental income for the nine months ended September 30, 2023 of $18.5 million, as compared to the corresponding period in 2022, was due to a $26.8 million increase for assets owned for the full period, partially offset by an $8.3 million decrease due to net transaction activity.

The increase for assets owned for the full period was due to (i) a $25.5 million increase in base rent;

(ii) an $11.4 million increase in expense reimbursements;

(iii) a $1.1 million increase in lease termination fees;

and (iv) a $0.2 million increase in percentage rents;

partially offset by (v) a $9.4 million decrease associated with revenues deemed uncollectible;

(vi) a $1.2 million decrease in straight-line rental income, net;

(vii) a $0.5 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements;

and (viii) a $0.3 million decrease in ancillary and other rental income.

The $25.5 million increase in base rent for assets owned for the full period was primarily due to contractual rent increases, positive rent spreads for new and renewal leases and option exercises of 15.2% during the nine months ended September 30, 2023 and 12.7% during the year ended December 31, 2022, and an increase in weighted average billed occupancy.

The $11.4 million increase in expense reimbursements was primarily attributable to increases in weighted average billed occupancy, reimbursable operating costs, and real estate taxes.

The $9.4 million decrease associated with revenues deemed uncollectible was primarily attributable to reduced cash collections associated with amounts previously reserved.

The increase in rental income for the three months ended March 31, 2024 of $8.4 million, as compared to the corresponding period in 2023, was due to a $12.7 million increase for assets owned for the full period, partially offset by a $4.3 million decrease due to net transaction activity.

The increase for assets owned for the full period was due to (i) an $8.2 million increase in base rent;

(ii) a $3.6 million increase in straight-line rental income, net;

(iii) a $1.5 million increase in expense reimbursements;

(iv) a $1.3 million increase in rental income associated with revenues deemed uncollectible;

(v) a $0.5 million increase in percentage rents;

(vi) a $0.4 million increase in ancillary and other rental income;

partially offset by (vii) a $1.9 million decrease in lease termination fees;

and (viii) a $0.9 million decrease in accretion of below-market leases, net of amortization of above-market leases and tenant inducements.

The $8.2 million increase in base rent for assets owned for the full period was primarily due to contractual rent increases, positive rent spreads for new and renewal leases and option exercises of 14.1% during the three months ended March 31, 2024 and 15.3% during the year ended December 31, 2023, and an increase in weighted average billed occupancy.

Other revenues

The increase in other revenues for the nine months ended September 30, 2023 of $0.5 million, as compared to the corresponding period in 2022, was primarily due to an increase in tax increment financing income.

The increase in Other revenues for the three months ended March 31, 2024 of $0.4 million as compared to the corresponding period in 2023, was primarily due to an increase in tax increment financing income.

Operating Expenses (in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

2024 2023 $ Change

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Operating costs

The increase in operating costs for the nine months ended September 30, 2023 of $4.1 million, as compared to the corresponding period in 2022, was due to a $5.7 million increase in operating costs for assets owned for the full period, primarily due to increases in repairs and maintenance, utilities, and insurance, partially offset by a $1.6 million decrease due to net transaction activity.

The increase in operating costs for the three months ended March 31, 2024 of $1.3 million, as compared to the corresponding period in 2023, was due to a $2.1 million increase in operating costs for assets owned for the full period, primarily due to increases in repairs and maintenance and insurance, partially offset by a $0.8 million decrease due to net transaction activity.

Real estate taxes

The increase in real estate taxes for the nine months ended September 30, 2023 of $2.4 million, as compared to the corresponding period in 2022, was due to a $1.9 million increase in real estate taxes due to net transaction activity, in addition to a $0.5 million increase in real estate taxes for assets owned for the full period, primarily due to an increase in current year assessments, partially offset by an increase in favorable adjustments related to prior year assessments and an increase in real estate tax refunds.

Depreciation and amortization

The increase in depreciation and amortization for the nine months ended September 30, 2023 of $18.7 million, as compared to the corresponding period in 2022, was primarily due to a $19.7 million increase for assets owned for the full period, primarily due to capital expenditures and an increase in accelerated depreciation and amortization related to tenant move-outs, partially offset by a $1.0 million decrease attributable to net transaction activity.

The decrease in real estate taxes for the three months ended March 31, 2024 of $3.3 million, as compared to the corresponding period in 2023, was due to a $2.5 million decrease in real estate taxes for assets owned for the full period, primarily due to an increase in favorable adjustments related to prior year assessments, an increase in real estate tax refunds, and a decrease in current year assessments, in addition to a $0.8 million decrease due to net transaction activity.

Impairment of real estate assets

During the nine months ended September 30, 2023, aggregate impairment of $17.8 million was recognized on two shopping centers and two partial shopping centers, as a result of disposition activity, and one operating property.

During the nine months ended September 30, 2022, aggregate impairment of $4.6 million was recognized on two shopping centers, as a result of disposition activity.

During the three months ended March 31, 2024, impairment was not recognized on any operating properties.

During the three months ended March 31, 2023, aggregate impairment of $1.1 million was recognized on one operating property.

Impairments recognized were due to changes in anticipated hold periods primarily in connection with our capital recycling program.

Depreciation and amortization

The increase in depreciation and amortization for the three months ended March 31, 2024 of $3.5 million, as compared to the corresponding period in 2023, was due to a $4.8 million increase for assets owned for the full period associated with an increase in capital expenditures and accelerated depreciation and amortization related to tenant move-outs, partially offset by a $1.3 million decrease attributable to net transaction activity.

General and administrative

General and administrative costs remained generally consistent for the nine months ended September 30, 2023, as compared to the corresponding period in 2022.

During the nine months ended September 30, 2023 and 2022, construction compensation costs of $13.6 million and $12.9 million, respectively, were capitalized to building and improvements and leasing legal costs of $3.3 million and $3.1 million, respectively, and leasing commission costs of $5.9 million and $6.0 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

The decrease in general and administrative costs of $0.7 million for the three months ended March 31, 2024, as compared to the corresponding period in 2023, was primarily due to a decrease in office rent expenses, partially offset by an increase in net compensation costs.

During the three months ended March 31, 2024 and 2023, construction compensation costs of $4.9 million and $4.6 million, respectively, were capitalized to building and improvements and leasing legal costs of $1.0 million and $1.4 million, respectively, and leasing commission costs of $2.1 million and $2.2 million, respectively, were capitalized to deferred charges and prepaid expenses, net.

Other Income and Expenses (in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

2024 2023 $ Change

3 unchanged sentences

Gain on sale of real estate assets 15,142 48,468 (33,326)

Gain (loss) on extinguishment of debt, net 4,356 (221) 4,577

Other (593) (405) (188)

Total other income $ (81,436) $ (86,227) $ 4,791

Total other expense $ (33,062) $ (602) $ (32,460)

Dividends and interest

The increase in dividends and interest for the nine months ended September 30, 2023 of $0.1 million, as compared to the corresponding period in 2022 was primarily due to an increase in interest income.

The increase in dividends and interest for the three months ended March 31, 2024 of $3.9 million, as compared to the corresponding period in 2023 was primarily due to an increase in interest income associated with higher cash and cash equivalent balances and a higher weighted average interest rate return.

Interest expense

The decrease in interest expense for the nine months ended September 30, 2023 of $0.4 million, as compared to the corresponding period in 2022, was primarily due to an increase in capitalized interest.

The increase in interest expense for the three months ended March 31, 2024 of $2.8 million, as compared to the corresponding period in 2023, was primarily due to higher overall debt obligations, in addition to a higher weighted average interest rate.

Gain on sale of real estate assets

During the nine months ended September 30, 2023, seven shopping centers and six partial shopping centers were disposed of resulting in aggregate gain of $58.9 million.

In addition, during the nine months ended September 30, 2023, we disposed of a non-operating asset and resolved contingencies relating to a previously disposed asset, resulting in net gain of $0.1 million.

During the nine months ended September 30, 2022, nine shopping centers and seven partial shopping centers were disposed of resulting in aggregate gain of $58.2 million.

Gain (loss) on extinguishment of debt, net

During the nine months ended September 30, 2023, we repurchased $199.6 million of the $500.0 million of our 2024 Notes then outstanding, resulting in a $4.4 million gain on extinguishment of debt.

During the nine months ended September 30, 2022, we amended and restated our unsecured credit facility agreements (the "Unsecured

Credit Facility"), resulting in a $0.2 million loss on extinguishment of debt due to the acceleration of unamortized debt issuance costs.

The decrease in other expense for the nine months ended September 30, 2023 of $1.3 million, as compared to the corresponding period in 2022, was primarily due to a decrease in transaction costs.

During the three months ended March 31, 2024, three shopping centers were disposed of resulting in aggregate gain of $15.0 million.

In addition, during the three months ended March 31, 2024, we resolved contingencies related to previously disposed assets, resulting in aggregate gain of $0.1 million.

During the three months ended March 31,

2023, six shopping centers and two partial shopping centers were disposed of resulting in aggregate gain of $48.5 million.

Other expense remained generally consistent for the three months ended March 31, 2024 as compared to the corresponding period in 2023.

Liquidity and Capital Resources

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• operating cash flow;

• available borrowings under the Unsecured Credit Facility;

• available borrowings under the Unsecured Credit Facility (defined hereafter);

• issuance of long-term debt;

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We have investment grade credit ratings from all three major credit rating agencies.

Our Unsecured Credit Facility 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").

As of September 30, 2023, we had $1.26 billion of available liquidity, including $1.24 billion available under our Revolving Facility and $18.7 million of cash and cash equivalents and restricted cash.

Our unsecured credit facility as amended and restated April 28, 2022 (the "Unsecured Credit Facility") is comprised of a $1.25 billion revolving loan facility (the "Revolving Facility") and a $500.0 million term loan facility (the "Term Loan Facility").

As of March 31, 2024, we had $1.67 billion of available liquidity, including $1.25 billion available under our Revolving Facility and $418.4 million of cash and cash equivalents and restricted cash.

We intend to continue to enhance our financial and operational flexibility through periodic extensions of the duration of our debt.

Material Cash Requirements

Our expected material cash requirements for the twelve months ended September 30, 2024 and thereafter are comprised of (i) contractually obligated expenditures;

Our expected material cash requirements for the twelve months ended March 31, 2025 and thereafter are comprised of (i) contractually obligated expenditures;

(ii) other essential expenditures;

1 unchanged sentence

Contractually Obligated Expenditures

The following table summarizes our debt maturities (excluding extension options), interest payment obligations, and obligations under non-cancelable operating leases (excluding renewal options), as of September 30, 2023 (dollars in millions):

Contractually Obligated Expenditures Twelve

September 30, 2024 Thereafter

March 31, 2025 Thereafter

Debt maturities (1)

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(1) Amounts presented do not assume the issuance of new debt upon maturity of existing debt.

(2) Scheduled interest payments for variable rate loans are presented using rates (including the impact of interest rate swaps), as of September 30, 2023.

(2) Scheduled interest payments for variable rate loans are presented using rates (including the impact of interest rate swaps), as of March 31, 2024.

“Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a further discussion of these and other factors that could impact interest payments.

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Our board of directors evaluates our dividend on a quarterly basis, taking into account a variety of relevant factors, including REIT taxable income.

The following table summarizes our dividend activity for the third and fourth quarters of 2023:

Quarter 2023 Fourth

The following table summarizes our dividend activity for the first and second quarters of 2024:

Quarter 2024 Second

Dividend declared per common share $ 0.2725 $ 0.2725

Dividend declaration date July 26, 2023 October 24, 2023

Dividend record date October 3, 2023 January 3, 2024

Dividend payable date October 16, 2023 January 16, 2024

Dividend declaration date January 31, 2024 April 25, 2024

Dividend record date April 2, 2024 July 2, 2024

Dividend payable date April 15, 2024 July 15, 2024

Opportunistic Expenditures

We also utilize cash for opportunistic expenditures such as value-enhancing reinvestment and acquisition activity.

The amount of value-enhancing reinvestment capital expenditures that we incur depends on a variety of factors that may change from period to period, such as the number, total expected cost, and nature of value-enhancing

reinvestment projects that are underway.

The amount of value-enhancing reinvestment capital expenditures that we incur depends on a variety of factors that

may change from period to period, such as the number, total expected cost, and nature of value-enhancing reinvestment projects that are underway.

See “Improvements to and investments in real estate assets” below for further information regarding our in-process reinvestment projects and our pipeline of future redevelopment projects.

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Brixmor Property Group Inc .

Nine Months Ended September 30,

Three Months Ended March 31,

2024 2023 $ Change

Net cash provided by operating activities $ 128,516 $ 135,054 $ (6,538)

Net cash used in investing activities (93,022) (474,479) 381,457

Net cash used in financing activities (363,066) (233,172) (129,894)

Net cash provided by (used in) investing activities (9,179) 48,485 (57,664)

Net cash provided by (used in) financing activities 280,170 (169,369) 449,539

Net change in cash, cash equivalents and restricted cash 399,507 14,170 385,337

2 unchanged sentences

Brixmor Operating Partnership LP

Nine Months Ended September 30,

Three Months Ended March 31,

2024 2023 $ Change

Net cash provided by operating activities $ 128,516 $ 135,054 $ (6,538)

Net cash used in investing activities (93,022) (474,479) 381,457

Net cash used in financing activities (362,139) (218,943) (143,196)

Net cash provided by (used in) investing activities (9,179) 48,485 (57,664)

Net cash provided by (used in) financing activities 279,575 (168,442) 448,017

Net change in cash, cash equivalents and restricted cash 398,912 15,097 383,815

3 unchanged sentences

Net cash provided by operating activities primarily consists of cash inflows from tenant rental payments and expense reimbursements and cash outflows for property operating costs, real estate taxes, general and administrative expenses, and interest expense.

During the nine months ended September 30, 2023, our net cash provided by operating activities increased $12.4 million as compared to the corresponding period in 2022.

The increase was primarily due to (i) an increase in same property net operating income;

(ii) an increase from net working capital;

and (iii) an increase in lease termination fees;

partially offset by (iv) a decrease in net operating income due to net transaction activity and other non-same property net operating income;

(v) an increase in cash outflows for general and administrative expense;

and (vi) an increase in cash outflows for interest expense.

During the three months ended March 31, 2024, our net cash provided by operating activities decreased $6.5 million as compared to the corresponding period in 2023.

The decrease was primarily due to (i) a decrease from net working capital (ii) a decrease in net operating income due to net transaction activity and other non-same property net operating income;

(iii) a decrease in lease termination fees;

and (iv) an increase in cash outflows for general and administrative expense;

partially offset by (v) an increase in same property net operating income;

and (vi) a decrease in cash outflows for interest expense.

Investing Activities

Net cash used in investing activities is primarily impacted by the nature, timing, and magnitude of acquisition and disposition activity and improvements to and investments in our shopping centers, including capital expenditures associated with our value-enhancing reinvestment activity.

During the nine months ended September 30, 2023, our net cash used in investing activities decreased $381.5 million as compared to the corresponding period in 2022.

The decrease was primarily due to (i) a decrease of $407.8 million in acquisitions of real estate assets and (ii) a decrease of $3.8 million in purchases of marketable securities, net of sales;

partially offset by (iii) an increase of $21.3 million in improvements to and investments in real estate

and (iv) a decrease of $8.8 million in net proceeds from sales of real estate assets.

During the three months ended March 31, 2024, our net cash provided by (used in) investing activities decreased $57.7 million as compared to the corresponding period in 2023.

The decrease was primarily due to (i) a decrease of $52.4 million in net proceeds from sales of real estate assets;

(ii) an increase of $4.5 million in improvements to and investments in real estate assets;

and (iii) a decrease of $0.8 million in sales of marketable securities, net of

Improvements to and investments in real estate assets

During the nine months ended September 30, 2023 and 2022, we expended $254.4 million and $233.1 million, respectively, on improvements to and investments in real estate assets.

Included in these amounts are insurance proceeds of $0.5 million and $3.3 million, respectively, which were received during the nine months ended September 30, 2023 and 2022.

During the three months ended March 31, 2024 and 2023, we expended $76.9 million and $72.4 million, respectively, on improvements to and investments in real estate assets.

Included in these amounts are insurance proceeds of $2.3 million and less than $0.1 million, respectively, which were received during the three months ended March 31, 2024 and 2023.

Maintenance capital expenditures represent costs to fund major replacements and betterments to our properties.

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Such initiatives are tenant driven and focus on upgrading our centers with strong, best-in-class retailers and enhancing the overall merchandise mix and tenant quality of our Portfolio.

As of September 30, 2023, we had 55 in-process anchor space repositioning, redevelopment, and outparcel development projects with an aggregate anticipated cost of $490.7 million, of which $263.6 million had been incurred as of September 30, 2023.

As of March 31, 2024, we had 45 in-process anchor space repositioning, redevelopment, and outparcel development projects with an aggregate anticipated cost of $431.0 million, of which $216.3 million had been incurred as of March 31, 2024.

In addition, we have identified a pipeline of future redevelopment projects aggregating over $700 million of potential capital investment, which we expect to execute over the coming years.

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We continue to evaluate the market for acquisition opportunities and we may acquire shopping centers when we believe strategic opportunities exist, to further concentrate our Portfolio in attractive retail submarkets and optimize the quality and long-term growth rate of our asset base.

During the nine months ended September 30, 2023, we acquired one land parcel for an aggregate purchase price of $1.9 million, including transaction costs and closing credits.

During the nine months ended September 30, 2022, we acquired seven shopping centers, one outparcel, and one land parcel and paid less than $0.1 million related to previously acquired assets for an aggregate purchase price of $409.7 million, including transaction costs and closing credits.

During the three months ended March 31, 2024 and 2023, we did not acquire any assets.

We may also dispose of properties when we believe value has been maximized, where there is downside risk, or where we have limited ability or desire to build critical mass in a particular submarket.

During the nine months ended September 30, 2023, we disposed of nine shopping centers and eight partial shopping centers for aggregate net proceeds of $161.9 million.

In addition, during the nine months ended September 30, 2023, we received aggregate net proceeds of $0.3 million related to a non-operating asset.

During the nine months ended September 30, 2022, we disposed of 11 shopping centers and seven partial shopping centers for aggregate net proceeds of $168.2 million.

In addition, during the nine months ended September 30, 2022, we had land at one shopping center seized through eminent domain for aggregate net proceeds of $2.8 million.

During the three months ended March 31, 2024, we disposed of three shopping centers for aggregate net proceeds of $67.2 million.

In addition, during the three months ended March 31, 2024, we resolved contingencies related to previously disposed assets for aggregate net proceeds of $0.1 million.

During the three months ended March 31, 2023, we disposed of six shopping centers and two partial shopping centers for aggregate net proceeds of $119.7 million.

Financing Activities

Net cash used in financing activities is primarily impacted by the nature, timing, and magnitude of issuances and repurchases of debt and equity securities, as well as borrowings or principal payments associated with our outstanding indebtedness, including our Unsecured Credit Facility, and distributions made to our common stockholders.

During the nine months ended September 30, 2023, our net cash used in financing activities increased $129.9 million as compared to the corresponding period in 2022.

The increase was primarily due to (i) a $64.2 million decrease in debt borrowings, net of repayments;

(ii) a $53.1 million decrease in issuances of common stock;

(iii) a $19.5 million increase in distributions to our common stockholders;

During the three months ended March 31, 2024, our net cash provided by (used in) financing activities increased $449.5 million as compared to the corresponding period in 2023.

The increase was primarily due to (i) a $458.7 million increase in debt borrowings, net of repayments;

partially offset by (ii) a $3.8 million increase in distributions to our common stockholders;

(iii) a $3.7 million increase in deferred financing and debt extinguishment costs;

and (iv) a $1.7 million increase in repurchases of common stock.

partially offset by (v) a $7.7 million decrease in deferred financing and debt extinguishment costs.

Non-GAAP Performance Measures

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These measures should not be considered as alternatives to, or more meaningful than, net income (calculated in accordance with GAAP) or other GAAP financial measures, as an indicator of financial performance and are not alternatives to, or more meaningful than, cash flow from operating activities (calculated in accordance with GAAP) as a measure of liquidity.

Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and

accordingly, should always be considered as supplemental financial results to those calculated in accordance with GAAP.

Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results to those calculated in accordance with GAAP.

Our computation of these non-GAAP performance measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs.

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Considering the nature of our business as a real estate owner and operator, we believe that Nareit FFO is useful to investors in measuring our operating and financial performance because the definition excludes items included in net income that do not relate to or are not indicative of our operating and financial performance, such as depreciation and amortization related to real estate, and items which can make periodic and peer analyses of operating and financial performance more difficult, such as gains and losses from the sale of certain real estate assets and impairment write-downs of certain real estate assets.

Our reconciliation of net income to Nareit FFO for the three and nine months ended September 30, 2023 and 2022 is as follows (in thousands, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Our reconciliation of net income to Nareit FFO for the three months ended March 31, 2024 and 2023 is as follows (in thousands, except per share amounts):

Three Months Ended March 31,

Net income $ 88,905 $ 112,246

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Considering the nature of our business as a real estate owner and operator, we believe that NOI is useful to investors in measuring the operating performance of our portfolio because the definition excludes various items included in net income that do not relate to, or are not indicative of, the operating performance of our properties, such as lease termination fees, straight-line rental income, net, accretion of below-market leases, net of amortization of above-market leases and tenant inducements, straight-line ground rent expense, net, income or expense associated with our captive insurance company, depreciation and amortization, impairment of real estate assets, general and administrative expense, and other income and expense (including interest expense and gain on sale of real estate assets).

We believe that same property NOI is also useful to investors because it further eliminates disparities in NOI by only including NOI of properties owned for the entirety of both periods presented and excluding properties under development and completed new development properties that have been stabilized for less than one year and

therefore provides a more consistent metric for comparing the operating performance of our real estate between periods.

Comparison of the Three and Nine Months Ended September 30, 2023 to the Three and Nine Months Ended September 30, 2022

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 Change 2023 2022 Change

Comparison of the Three Months Ended March 31, 2024 to the Three Months Ended March 31, 2023

Three Months Ended March 31,

2024 2023 Change

Number of properties 355 355 —

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The following table provides a reconciliation of net income to same property NOI for the periods presented (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Net income $ 88,905 $ 112,246

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With respect to our outstanding indebtedness, we periodically evaluate our exposure to interest rate fluctuations, and have and may continue to enter into interest rate protection agreements that mitigate, but do not eliminate, the impact of changes in interest rates on our variable rate loans.

With respect to general and administrative costs, we continually seek opportunities to offset inflationary cost pressures through routine

evaluations of our spending levels and through ongoing efforts to utilize technology to enhance our operational efficiency.

With respect to general and administrative costs, we continually seek opportunities to offset inflationary cost pressures through routine evaluations of our spending levels and through ongoing efforts to utilize technology to enhance our operational efficiency.

Quantitative and Qualitative Disclosures about Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis