What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-02-08 compared with 2022-02-10 · 579 added, 244 removed, 1238 unchanged (40% of the section changed)

CONTROLS AND PROCEDURES

Management's Evaluation of Disclosure Controls and Procedures

The Trust maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Trust’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

Management's Evaluations of Disclosure Controls and Procedures

The Trust and the Operating Partnership maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Trust and the Operating Partnership's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met.

Our management, with the participation of the Trust’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Trust’s disclosure controls and procedures as of December 31, 2021.

Based on that evaluation, the Trust’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, the Trust’s disclosure controls and procedures were effective at a reasonable assurance level.

Management's Evaluation of Internal Control over Financial Reporting

The Trust’s management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the Trust’s principal executive and principal financial officers and effected by our Board of Trustees, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America (GAAP) and includes those policies and procedures that:

Our management, with the participation of the Trust and the Operating Partnership’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Trust and the Operating Partnership’s disclosure controls and procedures as of December 31, 2022.

Based on that evaluation, the Trust and the Operating Partnership’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2022, the Trust and the Operating Partnership’s disclosure controls and procedures were effective at a reasonable assurance level.

Management's Evaluations of Internal Control over Financial Reporting

The Trust and the Operating Partnership’s management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the Trust and the Operating Partnership’s principal executive and principal financial officers and effected by our Board of Trustees, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America (GAAP) and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and disposition of our assets;

3 unchanged sentences

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We assessed the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2021.

We assessed the effectiveness of the Trust and the Operating Partnership’s internal control over financial reporting as of December 31, 2022.

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013) .

Based on that assessment and criteria, management concluded that the Trust's internal control over financial reporting was effective as of December 31, 2021.

Grant Thornton LLP, the independent registered public accounting firm that audited the Trust's consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Trust's internal control over financial reporting, which appears on page F-2 of this Annual Report on Form 10-K.

Based on that assessment and criteria, management concluded that the Trust and the Operating Partnership's internal control over financial reporting was effective as of December 31, 2022.

Grant Thornton LLP, the independent registered public accounting firm that audited the Trust and the Operating Partnership's consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Trust and the Operating Partnership's internal control over financial reporting, which appears on page F-2 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

22 unchanged sentences

2.1 Merger Agreement and Plan of Reorganization, dated December 2, 2021, by and among the Predecessor, the Parent Company, and Merger Sub (previously filed as Exhibit 2.1 to the Predecessor's Current Report on Form 8-K filed on December 2, 2021 and incorporated herein by reference) ‡

Amended and Restated Declaration of Trust of the Parent Company dated January 1, 2022, as amended by the Articles of Amendment of Amended and Restated Declaration of Trust dated January 1, 2022 (filed herewith)

3.2 Amended and Restated Bylaws of the Parent Company dated January 1, 2022 (previously filed as Exhibit 3.

3 to our Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference)

3.1 Amended and Restated Declaration of Trust of the Parent Company dated January 1, 2022, as amended by the Articles of Amendment of Amended and Restated Declaration of Trust dated January 1, 2022 (previously filed as Exhibit 3.1 to the Trust's Annual Report on Form 10-K for the year ended December 31, 2021 and incorporated herein by reference)

3.2 Amended and Restated Bylaws of the Parent Company dated January 1, 2022 (previously filed as Exhibit 3.3 to our Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference)

3.3 Articles of Merger, dated December 8, 2021, by and among Merger Sub and the Predecessor (previously filed as Exhibit 3.4 to the Parent Company's Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference)

25 unchanged sentences

3.50% Notes due 2030;

1.25% Notes due 2026 (previously filed as Exhibit 4.

2 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference)

1.25% Notes due 2026 (previously filed as Exhibit 4.2 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference)

4.6 Deposit Agreement, dated as of September 29, 2017, by and among Federal Realty Investment Trust, American Stock Transfer and Trust Company, LLC, as Depositary, and all holders from time to time of Receipt (previously filed as Exhibit 4.1 to the Predecessor's Registration Statement on Form 8-A, filed on September 29, 2017 and incorporated herein by reference)

28 unchanged sentences

10.17 Form of Option Award Agreement for basic options awarded out of the 2010 Plan (previously filed as Exhibit 10.40 to the Predecessor’s 2010 Form 10-K and incorporated herein by reference)

10.18 Credit Agreement dated as of July 7, 2011, by and among the Predecessor, as Borrower, the financial institutions party thereto and their permitted assignees under Section 12.6., as Lenders, Wells Fargo Bank, National Association, as Administrative Agent, PNC Bank, National Association, as Syndication Agent, Wells Fargo Securities, LLC, as a Lead Arranger and Book Manager, and PNC Capital Markets LLC, as a Lead Arranger and Book Manager (previously filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed on July 11, 2011 and incorporated herein by reference)***

10.18 Revised Form of Restricted Share Award Agreement for front loaded awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.35 to the Predecessor's Annual Report on Form 10-K for the year ended December 31, 2012 (the "2012 Form 10-K") and incorporated herein by reference)

2 unchanged sentences

10.21 Revised Form of Restricted Share Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2010 Plan (previously filed as Exhibit 10.38 to the Predecessor's 2012 Form 10-K and incorporated herein by reference)

10.23 First Amendment to the Credit Agreement, dated as of April 22, 2013, by and among the Predecessor, each of the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Predecessor's Current Report on Form 8-K, filed on April 26, 2013 and incorporated herein by reference)***

10.24 First Amendment to the Credit Agreement, dated as of April 22, 2013, by and among the Predecessor, each of the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Predecessor's Current Report on Form 8-K, filed on April 26, 2013 and incorporated herein by reference)***

10.25 Second Amendment to Credit Agreement, dated as of April 20, 2016, by and among the Predecessor, each of the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Predecessor's Current Report on Form 8-K, filed on April 26, 2016 and incorporated herein by reference)***

10.22 Severance Agreement between Federal Realty Investment Trust and Daniel Guglielmone dated August 15, 2016 (previously filed as Exhibit 10.36 to the Predecessor's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 and incorporated herein by reference)

4 unchanged sentences

Bank National Association, as Joint Lead Arrangers and Book Managers (previously filed as Exhibit 10.1 to the Predecessor's Current Report on Form 8-K, filed on May 6, 2020 and incorporated herein by reference) ‡

10.30 First Amendment to the Credit Agreement, dated as of May 6, 2020, by and among the Predecessor, each of the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.2 to the Predecessor's Current Report on Form 8-K, filed on May 6, 2020, and incorporated herein by reference)***

10.26 First Amendment to the Amended and Restated Credit Agreement, dated as of May 6, 2020, by and among the Predecessor, each of the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.2 to the Predecessor's Current Report on Form 8-K, filed on May 6, 2020, and incorporated herein by reference) ‡

10.27 Form of Restricted Share Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2020 Plan (previously filed as Exhibit 10.32 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference)

11 unchanged sentences

10.37 Second Amendment to Term Loan Agreement and Consent, dated as of January 1, 2022, by and among the Predecessor, as borrower, each of the lenders party thereto and PNC Bank, National Association, as administrative agent (previously filed as Exhibit 10.3 to the Trust’s Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference) ‡

10.38 Second Amended and Restated Credit Agreement, dated as of October 5, 2022, by and among the Partnership, as borrower, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (previously filed as Exhibit 10.

1 to the Trust’s Current Report on Form 8-K filed on October 11, 2022 and incorporated herein by reference)

10.39 Third Amendment to Term Loan Agreement, dated as of October 5, 2022, by and among the Partnership, as borrower, each of the lenders party thereto and PNC Bank, National Association, as administrative agent (previously filed as Exhibit 10.

2 to the Trust’s Current Report on Form 8-K filed on October 11, 2022 and incorporated herein by reference)

21.1 Subsidiaries of Federal Realty Investment Trust and Federal Realty OP LP (filed herewith)

1 unchanged sentence

31.1 Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith)

31.2 Rule 13a-14(a) Certification of Chief Financial Officer - Federal R e alty Investment Trust (filed herewith)

31.2 Rule 13a-14(a) Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith)

31.3 Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith)

1 unchanged sentence

32.1 Section 1350 Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith)

32.2 Section 1350 Certification of Chief Financial Officer - Federal Realty Investment T r ust (filed herewith)

32.3 Section 1350 Certification of Chief Executive Officer - Federal Realty OP L P (filed herewith)

32.2 Section 1350 Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith)

32.3 Section 1350 Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith)

32.4 Section 1350 Certification of Chief Financial Officer - Federal Realty OP LP (filed herewith)

4 unchanged sentences

* Management contract or compensatory plan required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K.

** Pursuant to Regulation S-K Item 601(b)(4)(iii), the Trust and the Partnership by this filing agrees, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the rights of holders of long-term debt of the Trust and the Partnership.

***Upon completion of the UPREIT reorganization described in the Explanatory Note at the beginning of this Annual Report, the Partnership became the successor to Federal Realty Investment Trust's rights and obligations under this instrument.

† Pursuant to Regulation S-K Item 601(b)(4)(iii), the Trust and the Partnership by this filing agree, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the rights of holders of long-term debt of the Trust and the Partnership.

‡ In this Exhibit Index, the term "Predecessor" refers to Federal Realty Investment Trust before the effectiveness of our UPREIT conversion as described in our Current Reports on Form 8-K filed on January 3 and 5, 2022.

Upon completion of the UPREIT conversion, the Partnership became the successor to the Predecessor's right and obligations under this instrument.

FORM 10-K SUMMARY

22 unchanged sentences

Trustee February 8, 2023

/S/ THOMAS A.

MCEACHIN Trustee February 8, 2023

/S/ A NTHONY P.

Trustee February 8, 2023

Trustee February 10, 2022

/ S / G AIL P.

2 unchanged sentences

Index to Consolidated Financial Statements and Schedules

Consolidated Financial Statements Page No.

Report of Independent Registered Public Accounting Firm ( PCAOB ID Number 248 )

Consolidated Balance Sheets F- 5

Consolidated Statements of Comprehensive Income F- 6

Consolidated Statement of Shareholders’ Equity F- 7

Consolidated Statements of Cash Flows F- 8

Federal Realty Investment Trust:

Consolidated Balance Sheets as of December 31, 2022 and 2021 F- 8

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021, and 2020 F- 9

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2022, 2021, and 2020 F- 10

Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020 F- 11

Federal Realty OP LP:

Consolidated Balance Sheets as of December 31, 2022 and 2021 F-12

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021, and 2020 F-13

Consolidated Statements of Capital for the Years Ended December 31, 2022, 2021, and 2020 F-14

Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020 F-15

Notes to Consolidated Financial Statements F- 16

73 unchanged sentences

February 8, 2023

Report of Independent Registered Public Accounting Firm

Trustees and Unitholders

Federal Realty OP LP

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Federal Realty OP LP (a Delaware limited partnership) and subsidiaries (collectively, the “Operating Partnership”) as of December 31, 2022, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in the 2013 Internal Control-Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Operating Partnership as of and for the year ended December 31, 2022, and our report dated February 8, 2023 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Evaluation of Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Operating Partnership’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

New York, New York

February 8, 2023

Report of Independent Registered Public Accounting Firm

Trustees and Unitholders

Federal Realty OP LP

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Federal Realty OP LP (a Delaware limited partnership) and subsidiaries (collectively, the "Operating Partnership") as of December 31, 2022 and 2021, the related consolidated statements of comprehensive income, capital, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedules included under Item 15(a)(2) (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Operating Partnership’s internal control over financial reporting as of December 31, 2022, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 8, 2023 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Operating Partnership’s management.

Our responsibility is to express an opinion on the Operating Partnership’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Lease Collectibility Assessment

In order to recognize rental revenue on an accrual basis, the Operating Partnership must determine whether substantially all the rents due under a lease arrangement are collectible.

If the Operating Partnership reaches the conclusion that substantially all of the rents are not collectible for a specific lease, then rental revenue under that arrangement can only be recognized when cash payment from the tenant is received.

Significant judgment is exercised by the Operating Partnership when making a collectibility assessment and includes the following considerations which require challenging and subjective auditor judgment in the execution of our audit procedures:

• Creditworthiness of the tenant

• Current economic conditions

• Historical experience with the tenant and other tenants operating in the same industry

Our audit procedures related to the collectibility assessment included the following:

• We assessed the design and tested the operating effectiveness of internal controls relating to the collectibility assessment process.

• We evaluated management’s accounting policies related to this assessment.

• We verified the completeness of the population of tenants that management evaluated.

• We researched recent publicly available information such as bankruptcy filings, industry journals, and periodicals, and for any of the Operating Partnership’s tenants identified in our research, we evaluated whether such information was considered in management’s collectibility assessment.

• For a selection of tenant receivables where collectibility was deemed as probable, we inspected and evaluated management’s documentation supporting the collectibility assessment.

• We recalculated the aging for a selection of tenant receivable balances using supporting documentation.

• For a selection of leases, we evaluated the collectibility assessment conclusion reached by management and performed the following procedures for each selection:

◦ Verified that management’s accounting policies related to the collectibility assessment were followed.

◦ Obtained from management documentation such as tenant collection history and any direct correspondence and evaluated management’s considerations supporting the collectibility assessment conclusion reached.

◦ Researched publicly available information to independently verify the completeness and accuracy of management’s information used to make the collectibility assessment.

/s/ GRANT THORNTON LLP

We have served as the Operating Partnership's auditor since 2022.

New York, New York

February 8, 2023

Federal Realty Investment Trust

3 unchanged sentences

Operating (including $ 1,997,583 and $ 2,207,648 of consolidated variable interest entities, respectively)

$ 9,441,945 $ 8,814,791

Construction-in-progress (including $ 8,477 and $ 18,752 of consolidated variable interest entities, respectively)

662,554 607,271

10,104,499 9,422,062

Less accumulated depreciation and amortization (including $ 362,921 and $ 389,950 of consolidated variable interest entities, respectively)

( 2,715,817 ) ( 2,531,095 )

Net real estate 7,388,682 6,890,967

Cash and cash equivalents 85,558 162,132

Accounts and notes receivable 169,007 159,780

Accounts and notes receivable, net 197,648 169,007

Mortgage notes receivable, net 9,456 9,543

Investment in partnerships 145,205 13,027

Operating lease right of use assets 90,743 92,248

Finance lease right of use assets 49,832 51,116

Operating lease right of use assets, net 94,569 90,743

Finance lease right of use assets, net 45,467 49,832

Prepaid expenses and other assets 267,406 237,069

2 unchanged sentences

Mortgages payable, net (including $ 191,827 and $ 335,301 of consolidated variable interest entities, respectively)

$ 320,615 $ 339,993

Notes payable, net 601,077 301,466

12 unchanged sentences

5.0 % Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $ 25,000 per share), 6,000 shares issued and outstanding

5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 shares issued and outstanding 9,997 9,997

150,000 150,000

5.417 % Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $ 25 per share), 392,878 and 399,896 shares issued and outstanding, respectively

Common shares of beneficial interest, $ 0.01 par, 100,000,000 shares authorized, 81,342,959 and 78,603,305 shares issued and outstanding, respectively

1 unchanged sentence

Accumulated dividends in excess of net income ( 1,034,186 ) ( 1,066,932 )

Accumulated other comprehensive loss ( 2,047 ) ( 5,644 )

Accumulated other comprehensive income (loss) 5,757 ( 2,047 )

Total shareholders’ equity of the Trust 2,954,012 2,580,602

17 unchanged sentences

Impairment charge — — ( 57,218 )

Gain on deconsolidation of VIE 70,374 — —

Gain on sale of real estate and change in control of interest, net of tax 93,483 89,950 98,117

30 unchanged sentences

Comprehensive

Loss Noncontrolling Interests Total Shareholders' Equity

Income (Loss) Noncontrolling Interests Total Shareholders' Equity

Shares Amount Shares Amount

3 unchanged sentences

Net income, excluding $ 2,228 attributable to redeemable noncontrolling interests

Other comprehensive loss - change in value of interest rate swaps — — — — — — ( 397 ) — ( 397 )

— — — — — 131,706 — 1,954 133,660

Other comprehensive loss - change in value of interest rate swaps, excluding $ 471 attributable to redeemable noncontrolling interests

— — — — — — ( 4,831 ) — ( 4,831 )

Dividends declared to common shareholders ($ 4.22 per share)

— — — — — ( 320,302 ) — — ( 320,302 )

Dividends declared to preferred shareholders — — — — — ( 8,042 ) — — ( 8,042 )

Distributions declared to noncontrolling interests, excluding $ 1,197 attributable to redeemable noncontrolling interests

— — — — — — — ( 8,874 ) ( 8,874 )

Common shares issued, net — — 1,080,882 11 98,828 — — — 98,839

2 unchanged sentences

Shares withheld for employee taxes — — ( 33,034 ) — ( 4,052 ) — — — ( 4,052 )

Conversion and redemption of OP units — — 128,287 2 14,102 — — ( 14,176 ) ( 72 )

Conversion and redemption of downREIT OP units — — — — ( 30 ) — — ( 3,290 ) ( 3,320 )

Contributions from noncontrolling interests, excluding $ 19,335 attributable to redeemable noncontrolling interests

— — — — — — — 120 120

Purchase of noncontrolling interests — — — — ( 1,210 ) — — ( 6,111 ) ( 7,321 )

Adjustment to redeemable noncontrolling interests — — — — 21,933 — — — 21,933

BALANCE AT DECEMBER 31, 2020 405,896 $ 159,997 76,727,394 $ 771 $ 3,297,305 $ ( 988,272 ) $ ( 5,644 ) $ 84,590 $ 2,548,747

January 1, 2020 adoption of new accounting standard - See Note 2 — — — — — ( 510 ) — — ( 510 )

Net income, excluding $ 4,296 attributable to redeemable noncontrolling interests

Other comprehensive loss - change in value of interest rate swaps, excluding $471 attributable to redeemable noncontrolling interest — — — — — — ( 4,831 ) — ( 4,831 )

— — — — — 261,498 — 3,287 264,785

Other comprehensive income - change in value of interest rate swaps, excluding $ 320 attributable to redeemable noncontrolling interest

— — — — — — 3,597 — 3,597

Dividends declared to common shareholders ($ 4.26 per share)

— — — — — ( 332,116 ) — — ( 332,116 )

Dividends declared to preferred shareholders — — — — — ( 8,042 ) — — ( 8,042 )

Distributions declared to noncontrolling interests, excluding $ 5,268 attributable to redeemable noncontrolling interests

— — — — — — — ( 4,341 ) ( 4,341 )

Common shares issued, net — — 1,643,845 17 172,736 — — — 172,753

2 unchanged sentences

Shares withheld for employee taxes — — ( 29,031 ) — ( 2,998 ) — — — ( 2,998 )

Conversion and redemption of OP units — — — — ( 30 ) — — ( 3,290 ) ( 3,320 )

Conversion and redemption of downREIT OP units — — 76,786 — 7,474 — — ( 7,573 ) ( 99 )

Contributions from noncontrolling interests, excluding $ 74,530 attributable to redeemable noncontrolling interests

Purchase of noncontrolling interests — — — — ( 1,210 ) — — ( 6,111 ) ( 7,321 )

— — — — — — — 6,583 6,583

Adjustment to redeemable noncontrolling interests — — — — ( 2,110 ) — — — ( 2,110 )

1 unchanged sentence

Net income, excluding $ 6,613 attributable to redeemable noncontrolling interests

— — — — — 385,491 — 3,557 389,048

Other comprehensive income - change in value of interest rate swaps, excluding $ 765 attributable to redeemable noncontrolling interest

— — — — — — 7,804 — 7,804

Dividends declared to common shareholders ($ 4.30 per share)

— — — — — ( 344,711 ) — — ( 344,711 )

Dividends declared to preferred shareholders — — — — — ( 8,034 ) — — ( 8,034 )

Distributions declared to noncontrolling interests, excluding $ 8,090 attributable to redeemable noncontrolling interests

— — — — — — — ( 5,007 ) ( 5,007 )

Common shares issued, net — — 2,634,223 26 306,828 — — — 306,854

Exercise of stock options — — 366 — 35 — — — 35

Shares issued under dividend reinvestment plan — — 19,502 — 2,104 — — — 2,104

1 unchanged sentence

Shares withheld for employee taxes — — ( 41,105 ) — ( 4,900 ) — — — ( 4,900 )

Conversion and redemption of OP units — — 76,786 — 7,474 — — ( 7,573 ) ( 99 )

Contributions from noncontrolling interests, excluding $74,530 attributable to redeemable noncontrolling interests — — — — — — — 6,583 6,583

Conversion of preferred shares ( 7,018 ) ( 175 ) 1,675 — 175 — — — —

Conversion and redemption of downREIT OP units — — 14,598 — 1,367 — — ( 2,065 ) ( 698 )

Deconsolidation of VIE — — — — — — — 972 972

Adjustment to redeemable noncontrolling interests — — — — 12,382 — — — 12,382

11 unchanged sentences

Impairment charge — — 57,218

Gain on deconsolidation of VIE ( 70,374 ) — —

Gain on sale of real estate and change in control of interest, net of tax ( 93,483 ) ( 89,950 ) ( 98,117 )

1 unchanged sentence

(Income) loss from partnerships ( 5,170 ) ( 1,245 ) 8,062

Straight-line rent ( 18,326 ) ( 9,397 ) ( 4,492 )

Share-based compensation expense 13,704 13,009 11,924

Other, net ( 4,812 ) ( 3,223 ) ( 1,290 )

Changes in assets and liabilities, net of effects of acquisitions and dispositions:

Decrease (increase) in accounts receivable, net 1,214 ( 6,032 ) ( 16,128 )

(Increase) decrease in accounts receivable, net ( 12,071 ) 1,214 ( 6,032 )

Increase in prepaid expenses and other assets ( 1,219 ) ( 5,607 ) ( 3,260 )

8 unchanged sentences

Proceeds from sale of real estate 133,717 137,868 183,461

Change in cash from deconsolidation of VIE ( 4,192 ) — —

Investment in partnerships ( 23,155 ) ( 3,115 ) ( 3,348 )

1 unchanged sentence

Leasing costs ( 22,541 ) ( 21,990 ) ( 15,080 )

Repayment (issuance) of mortgage and other notes receivable, net 31,129 ( 10,268 ) ( 357 )

(Issuance) repayment of mortgage and other notes receivable, net ( 3,465 ) 31,129 ( 10,268 )

Net cash used in investing activities ( 785,998 ) ( 660,118 ) ( 368,383 )

10 unchanged sentences

Distributions to and redemptions of noncontrolling interests ( 37,427 ) ( 9,784 ) ( 20,563 )

Net cash (used in) provided by financing activities ( 452,967 ) 661,736 ( 100,105 )

Net cash provided by (used in) financing activities 190,414 ( 452,967 ) 661,736

(Decrease) increase in cash, cash equivalents, and restricted cash ( 78,815 ) ( 641,733 ) 663,282

2 unchanged sentences

The accompanying notes are an integral part of these consolidated statements.

Federal Realty OP LP

Consolidated Balance Sheets

(In thousands, except unit data)

Real estate, at cost

Operating (including $ 1,997,583 and $ 2,207,648 of consolidated variable interest entities, respectively)

$ 9,441,945 $ 8,814,791

Construction-in-progress (including $ 8,477 and $ 18,752 of consolidated variable interest entities, respectively)

662,554 607,271

10,104,499 9,422,062

Less accumulated depreciation and amortization (including $ 362,921 and $ 389,950 of consolidated variable interest entities, respectively)

( 2,715,817 ) ( 2,531,095 )

Net real estate 7,388,682 6,890,967

Cash and cash equivalents 85,558 162,132

Accounts and notes receivable, net 197,648 169,007

Mortgage notes receivable, net 9,456 9,543

Investment in partnerships 145,205 13,027

Operating lease right of use assets, net 94,569 90,743

Finance lease right of use assets, net 45,467 49,832

Prepaid expenses and other assets 267,406 237,069

TOTAL ASSETS $ 8,233,991 $ 7,622,320

LIABILITIES AND CAPITAL

Mortgages payable, net (including $ 191,827 and $ 335,301 of consolidated variable interest entities, respectively)

$ 320,615 $ 339,993

Notes payable, net 601,077 301,466

Senior notes and debentures, net 3,407,701 3,406,088

Accounts payable and accrued expenses 190,340 235,168

Dividends payable 90,263 86,538

Security deposits payable 28,508 25,331

Operating lease liabilities 77,743 72,661

Finance lease liabilities 67,660 72,032

Other liabilities and deferred credits 237,699 206,187

Total liabilities 5,021,606 4,745,464

Commitments and contingencies (Note 7)

Redeemable noncontrolling interests 178,370 213,708

Partner capital

Preferred units, 398,878 and 405,896 units issued and outstanding, respectively

154,788 154,963

Common units, 81,342,959 and 78,603,305 units issued and outstanding, respectively

2,793,467 2,427,686

Accumulated other comprehensive income (loss) 5,757 ( 2,047 )

Total partner capital 2,954,012 2,580,602

Noncontrolling interests in consolidated partnerships 80,003 82,546

Total capital 3,034,015 2,663,148

TOTAL LIABILITIES AND CAPITAL $ 8,233,991 $ 7,622,320

The accompanying notes are an integral part of these consolidated statements.

Federal Realty OP LP

Consolidated Statements of Comprehensive Income

Year Ended December 31,

2022 2021 2020

(In thousands, except per unit data)

Rental income $ 1,073,292 $ 948,842 $ 832,171

Mortgage interest income 1,086 2,382 3,323

Total revenue 1,074,378 951,224 835,494

Rental expenses 228,958 198,121 170,920

Real estate taxes 127,824 118,496 119,242

General and administrative 52,636 49,856 41,680

Depreciation and amortization 302,409 279,976 255,027

Total operating expenses 711,827 646,449 586,869

Impairment charge — — ( 57,218 )

Gain on deconsolidation of VIE 70,374 — —

Gain on sale of real estate and change in control of interest, net of tax 93,483 89,950 98,117

OPERATING INCOME 526,408 394,725 289,524

OTHER INCOME/(EXPENSE)

Other interest income 1,072 809 1,894

Interest expense ( 136,989 ) ( 127,698 ) ( 136,289 )

Early extinguishment of debt — — ( 11,179 )

Income (loss) from partnerships 5,170 1,245 ( 8,062 )

NET INCOME 395,661 269,081 135,888

Net income attributable to noncontrolling interests ( 10,170 ) ( 7,583 ) ( 4,182 )

NET INCOME ATTRIBUTABLE TO THE PARTNERSHIP 385,491 261,498 131,706

Dividends on preferred units ( 8,034 ) ( 8,042 ) ( 8,042 )

NET INCOME AVAILABLE FOR COMMON UNIT HOLDERS $ 377,457 $ 253,456 $ 123,664

EARNINGS PER COMMON UNIT, BASIC

Net income available for common unit holders $ 4.71 $ 3.26 $ 1.62

Weighted average number of common units 79,854 77,336 75,515

EARNINGS PER COMMON UNIT, DILUTED

Net income available for common unit holders $ 4.71 $ 3.26 $ 1.62

Weighted average number of common units 80,508 77,368 75,515

NET INCOME $ 395,661 $ 269,081 $ 135,888

Other comprehensive income (loss) - change in value of interest rate swaps 8,569 3,917 ( 5,302 )

COMPREHENSIVE INCOME 404,230 272,998 130,586

Comprehensive income attributable to noncontrolling interests ( 10,935 ) ( 7,903 ) ( 3,711 )

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE PARTNERSHIP $ 393,295 $ 265,095 $ 126,875

The accompanying notes are an integral part of these consolidated statements.

Federal Realty OP LP

Consolidated Statements of Capital

Preferred Units Common Units Accumulated

Comprehensive

Income (Loss) Total Partner Capital Noncontrolling Interests in Consolidated Partnerships Total Capital

BALANCE AT DECEMBER 31, 2019 $ 154,963 $ 2,381,191 $ ( 813 ) $ 2,535,341 $ 100,791 $ 2,636,132

January 1, 2020 adoption of new accounting standard — ( 510 ) — ( 510 ) — ( 510 )

Net income, excluding $ 2,228 attributable to redeemable noncontrolling interests

8,042 123,664 — 131,706 1,954 133,660

Other comprehensive loss - change in fair value of interest rate swaps, excluding $ 471 attributable to redeemable noncontrolling interests

— — ( 4,831 ) ( 4,831 ) — ( 4,831 )

Distributions declared to common unit holders — ( 320,302 ) — ( 320,302 ) — ( 320,302 )

Distributions declared to preferred unit holders ( 8,042 ) — — ( 8,042 ) — ( 8,042 )

Distributions declared to noncontrolling interests in consolidated partnerships, excluding $ 1,197 attributable to redeemable noncontrolling interests

— — — — ( 8,874 ) ( 8,874 )

Common units issued as a result of common stock issued by Parent Company, net of issuance costs — 98,839 — 98,839 — 98,839

Common units issued under dividend reinvestment plan — 2,072 — 2,072 — 2,072

Share-based compensation expense, net of forfeitures — 13,243 — 13,243 — 13,243

Common units withheld for employee taxes — ( 4,052 ) — ( 4,052 ) — ( 4,052 )

Conversion and redemption of downREIT OP units — ( 30 ) — ( 30 ) ( 3,290 ) ( 3,320 )

Contributions from noncontrolling interests, excluding $ 19,335 attributable to redeemable noncontrolling interests

— — — — 120 120

Purchase of noncontrolling interest — ( 1,210 ) — ( 1,210 ) ( 6,111 ) ( 7,321 )

Adjustment to redeemable noncontrolling interests — 21,933 — 21,933 — 21,933

BALANCE AT DECEMBER 31, 2020 154,963 2,314,838 ( 5,644 ) 2,464,157 84,590 2,548,747

Net income, excluding $ 4,296 attributable to redeemable noncontrolling interests

8,042 253,456 — 261,498 3,287 264,785

Other comprehensive income - change in fair value of interest rate swaps, excluding $ 320 attributable to redeemable noncontrolling interest

— — 3,597 3,597 — 3,597

Distributions declared to common unit holders — ( 332,116 ) — ( 332,116 ) — ( 332,116 )

Distributions declared to preferred unit holders ( 8,042 ) — — ( 8,042 ) — ( 8,042 )

Distributions declared to noncontrolling interests in consolidated partnerships, excluding $ 5,268 attributable to redeemable noncontrolling interests

— — — — ( 4,341 ) ( 4,341 )

Common units issued as a result of common stock issued by Parent Company, net of issuance costs — 172,753 — 172,753 — 172,753

Common units issued under dividend reinvestment plan — 1,955 — 1,955 — 1,955

Share-based compensation expense, net of forfeitures — 14,434 — 14,434 — 14,434

Common units withheld for employee taxes — ( 2,998 ) — ( 2,998 ) — ( 2,998 )

Conversion of downREIT OP units — 7,474 — 7,474 ( 7,573 ) ( 99 )

Contributions from noncontrolling interests, excluding $ 74,530 attributable to redeemable noncontrolling interests

— — — — 6,583 6,583

Adjustment to redeemable noncontrolling interests — ( 2,110 ) — ( 2,110 ) — ( 2,110 )

BALANCE AT DECEMBER 31, 2021 154,963 2,427,686 ( 2,047 ) 2,580,602 82,546 2,663,148

Net income, excluding $ 6,613 attributable to redeemable noncontrolling interests

8,034 377,457 — 385,491 3,557 389,048

Other comprehensive income - change in fair value of interest rate swaps, excluding $ 765 attributable to redeemable noncontrolling interest

— — 7,804 7,804 — 7,804

Distributions declared to common unit holders — ( 344,711 ) — ( 344,711 ) — ( 344,711 )

Distributions declared to preferred unit holders ( 8,034 ) — — ( 8,034 ) — ( 8,034 )

Distributions declared to noncontrolling interests in consolidated partnerships, excluding $ 8,090 attributable to redeemable noncontrolling interests

— — — — ( 5,007 ) ( 5,007 )

Common units issued as a result of common stock issued by Parent Company, net of issuance costs — 306,854 — 306,854 — 306,854

Exercise of stock options — 35 — 35 — 35

Common units issued under dividend reinvestment plan — 2,104 — 2,104 — 2,104

Share-based compensation expense, net of forfeitures — 15,018 — 15,018 — 15,018

Common units withheld for employee taxes — ( 4,900 ) — ( 4,900 ) — ( 4,900 )

Conversion of preferred units ( 175 ) 175 — — — —

Conversion and redemption of downREIT OP units — 1,367 — 1,367 ( 2,065 ) ( 698 )

Deconsolidation of VIE — — — — 972 972

Adjustment to redeemable noncontrolling interests — 12,382 — 12,382 — 12,382

BALANCE AT DECEMBER 31, 2022 $ 154,788 $ 2,793,467 $ 5,757 $ 2,954,012 $ 80,003 $ 3,034,015

The accompanying notes are an integral part of these consolidated statements.

Federal Realty OP LP

Consolidated Statements of Cash Flows

Year Ended December 31,

2022 2021 2020

(In thousands)

OPERATING ACTIVITIES

Net income $ 395,661 $ 269,081 $ 135,888

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 302,409 279,976 255,027

Impairment charge — — 57,218

Gain on deconsolidation of VIE ( 70,374 ) — —

Gain on sale of real estate and change in control of interest, net of tax ( 93,483 ) ( 89,950 ) ( 98,117 )

Early extinguishment of debt — — 11,179

(Income) loss from partnerships ( 5,170 ) ( 1,245 ) 8,062

Straight-line rent ( 18,326 ) ( 9,397 ) ( 4,492 )

Share-based compensation expense 13,704 13,009 11,924

Other, net ( 4,812 ) ( 3,223 ) ( 1,290 )

Changes in assets and liabilities, net of effects of acquisitions and dispositions:

(Increase) decrease in accounts receivable, net ( 12,071 ) 1,214 ( 6,032 )

Increase in prepaid expenses and other assets ( 1,219 ) ( 5,607 ) ( 3,260 )

Increase in accounts payable and accrued expenses 77 6,782 5,621

Increase (decrease) in security deposits and other liabilities 10,373 10,712 ( 1,799 )

Net cash provided by operating activities 516,769 471,352 369,929

INVESTING ACTIVITIES

Acquisition of real estate ( 438,494 ) ( 366,466 ) ( 9,589 )

Capital expenditures - development and redevelopment ( 309,046 ) ( 368,786 ) ( 433,872 )

Capital expenditures - other ( 107,655 ) ( 71,728 ) ( 68,064 )

Costs associated with property sold under threat of condemnation, net ( 18,031 ) — ( 12,924 )

Proceeds from sale of real estate 133,717 137,868 183,461

Change in cash from deconsolidation of VIE ( 4,192 ) — —

Investment in partnerships ( 23,155 ) ( 3,115 ) ( 3,348 )

Distribution from partnerships in excess of earnings 6,864 2,970 1,301

Leasing costs ( 22,541 ) ( 21,990 ) ( 15,080 )

(Issuance) repayment of mortgage and other notes receivable, net ( 3,465 ) 31,129 ( 10,268 )

Net cash used in investing activities ( 785,998 ) ( 660,118 ) ( 368,383 )

FINANCING ACTIVITIES

Costs to amend revolving credit facility ( 6,375 ) — ( 638 )

Issuance of senior notes, net of costs — — 1,094,283

Redemption and retirement of senior notes — — ( 510,360 )

Issuance of notes payable, net of costs 298,568 — 398,722

Repayment of mortgages, finance leases, and notes payable ( 19,443 ) ( 277,643 ) ( 70,237 )

Issuance of common units, net of costs 307,275 172,981 99,177

Dividends paid to common and preferred unit holders ( 347,284 ) ( 335,656 ) ( 324,596 )

Shares withheld for employee taxes ( 4,900 ) ( 2,998 ) ( 4,052 )

Contributions from noncontrolling interests — 133 —

Distributions to and redemptions of noncontrolling interests ( 37,427 ) ( 9,784 ) ( 20,563 )

Net cash provided by (used in) financing activities 190,414 ( 452,967 ) 661,736

(Decrease) increase in cash, cash equivalents, and restricted cash ( 78,815 ) ( 641,733 ) 663,282

Cash, cash equivalents, and restricted cash at beginning of year 175,163 816,896 153,614

Cash, cash equivalents, and restricted cash at end of year $ 96,348 $ 175,163 $ 816,896

The accompanying notes are an integral part of these consolidated statements.

Federal Realty Investment Trust

Federal Realty OP LP

Notes to Consolidated Financial Statements

1 unchanged sentence

NOTE 1— BUSINESS AND ORGANIZATION

Federal Realty Investment Trust (the “Trust”) is an equity real estate investment trust (“REIT”) specializing in the ownership, management, and redevelopment of retail and mixed-use properties.

Federal Realty Investment Trust (the “Parent Company” and "Trust") is an equity real estate investment trust (“REIT”).

Federal Realty OP LP (the "Operating Partnership") is the entity through which the Parent Company conducts substantially all of its operating and owns all of its assets.

The Parent Company owns 100% of the limited liability company interests of, is sole member of, and exercises control over Federal Realty GP LLC (the "General Partner"), which in turn, is the sole general partner of the Operating Partnership.

The Parent Company specializes in the ownership, management, and redevelopment of retail and mixed-use properties through the Operating Partnership.

Our properties are located primarily in communities where we believe retail demand exceeds supply, in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida.

As of December 31, 2022, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 103 predominantly retail real estate projects.

We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes.

We operate in a manner intended to enable the Trust to qualify as a REIT for federal income tax purposes.

A REIT that distributes at least 90 % of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders.

See Note 15 for a discussion of the UPREIT reorganization we completed in January of 2022.

Impacts of COVID-19 Pandemic

In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease ("COVID-19") as a pandemic.

While we continue to expect the impact to our properties will be temporary in nature, the extent of the future effects of COVID-19 on our business, results of operations, cash flows, and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty.

Impacts of COVID-19 Pandemic and General Economic Conditions

Given the ongoing workforce shortages, global supply chain bottlenecks and shortages, higher levels of inflation, and rising interest rates, we continue to monitor and address risks related to the global COVID-19 pandemic and the state of the economy.

The extent of the future effects of COVID-19 and potentially worsening economic conditions on our business, results of operations, cash flows, and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty.

NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

In January 2022, we completed a reorganization into an umbrella partnership real estate investment trust, or "UPREIT." For additional information on our UPREIT reorganization, please see our Current Reports on Form 8-K filed with the SEC on January 3, 2022 and January 5, 2022, as well our 2021 Annual Report on Form 10-K filed on February 10, 2022.

Immediately following the reorganization, the Parent Company had the same consolidated assets and liabilities as Federal Realty Investment Trust immediately before the reorganization.

The Parent Company exercises exclusive control over the General Partner and does not have assets or liabilities other than its investment in the Operating Partnership.

As a result, the UPREIT reorganization represented a merger of entities under common control in accordance with accounting principles generally accepted in the United States ("GAAP").

Accordingly, the accompanying consolidated financial statements including the notes thereto, are presented as if the UPREIT reorganization had occurred at the earliest period presented.

Certain 2021, 2020, and 2019 amounts have been reclassified to conform to current period presentation.

Principles of Consolidation

Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”).

As discussed in the Explanatory Note, we have combined the Annual Reports on Form 10-K of the Parent Company and the Operating Partnership into this single report.

As a result, we present two sets of consolidated financial statements.

Both sets of consolidated financial statements include the accounts of the entity, its corporate subsidiaries, and all entities in which it has a controlling interest or has been determined to the primary beneficiary of a variable interest entity (“VIE”).

The Parent Company's consolidated financial statements include the accounts of the Operating Partnership and its subsidiaries as the Parent, and through its ownership and control over the General Partner, exercises exclusive control over the Operating Partnership.

The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests.

3 unchanged sentences

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses.

These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions.

estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions.

Actual results could differ from these estimates.

19 unchanged sentences

We have subsequently collected approximately $ 35 million of those amounts previously deferred.

As of December 31, 2021, we have entered into rent abatement agreements related to the COVID-19 pandemic totaling $ 26 million and $ 48 million of rents due in 2021 and 2020, respectively.

As of December 31, 2022, we have entered into rent abatement agreements related to the COVID-19 pandemic totaling $ 4 million, $ 26 million, and $ 48 million of rents due in 2022, 2021, and 2020 respectively.

When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received.

3 unchanged sentences

If leases currently classified as not probable are subsequently changed to probable, any lease receivables (including straight-line rent receivables) are re-instated with a corresponding increase to rental income.

Since March 2020, federal, state, and local governments have taken various actions to mitigate the spread of COVID-19.

These actions included the closure of nonessential businesses and ordering residents to generally stay at home at the onset of the pandemic, phased re-openings and capacity limitations, and now generally lifted restrictions.

While the overall economy is showing signs of recovery from the initial impacts of COVID-19, workforce shortages, global supply chain bottlenecks and shortages, inflation, as well as COVID-19 variants are impacting the recovery.

Closures and restrictions, along with the general concern over the spread of COVID-19, required a significant number of tenants to close their operations or to significantly limit the amount of business they were able to conduct, which impacted their ability to timely pay rent as required under our leases and also caused many tenants to close their business permanently.

As a result, we revised our collectibility assumptions for many of our tenants most significantly impacted by COVID-19.

Accordingly, during the years ended December 31, 2021 and 2020, we recognized collectibility related adjustments of $ 24.0 million and $ 106.6 million, respectively.

This includes changes in our collectibility assessments from probable to not probable, disputed rents, and any rent abatements directly related to COVID-19, as well as the write-off of $ 0.7 million and $ 12.7 million, respectively of straight-line rent receivables related to tenants changed to a cash basis of revenue recognition during the years ended December 31, 2021 and 2020.

Our collection of rents has continued to improve from the initial impacts of COVID-19, including collecting rents related to prior periods.

As a result, our collectibility related adjustments for the year ended December 31, 2022 resulted in an increase to rental income of $ 4.1 million, as compared to a $ 24.0 million and $ 106.6 million decrease to rental income during the years ended December 31, 2021 and 2020, respectively, which reflected lower levels of cash collections and elevated levels of rent abatements and disputes directly related to COVID-19.

This includes changes in our collectibility assessments from probable to not probable, disputed rents, and any rent abatements directly related to COVID-19.

As of December 31, 2022 and 2021, the revenue from approximately 31 % and 34 % of our tenants (based on total commercial leases), respectively, is being recognized on a cash basis.

1 unchanged sentence

Other revenue recognition policies

Sales of real estate are recognized generally upon the transfer of control, which usually occurs when the real estate is legally sold.

When we enter into a transaction to sell a property or a portion of a property, we evaluate the recognition of the sale under ASC 610-20, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets." In accordance with ASC 610-20, we apply the guidance in ASC 606, "Revenue from Contracts with Customers," to determine whether and when control transfers and how to measure the associated gain or loss.

Sales of real estate are recognized upon the transfer of control, which usually occurs when the real estate is legally sold.

transfers and how to measure the associated gain or loss.

We determine the transaction price based on the consideration we expect to receive.

6 unchanged sentences

Minor improvements, furniture and equipment are capitalized and depreciated over useful lives ranging from 2 to 20 years.

Maintenance and repairs that do not improve or extend the useful lives of the related assets are charged to operations as

Maintenance and repairs that do not improve or extend the useful lives of the related assets are charged to operations as incurred.

Tenant improvements are capitalized and depreciated over the life of the related lease or their estimated useful life, whichever is shorter.

2 unchanged sentences

Our methodology of allocating the cost of acquisitions to assets acquired and liabilities assumed is based on estimated fair values, replacement cost and/or appraised values.

When we acquire operating real estate properties, the purchase price is allocated to land, building, improvements, leasing costs, intangibles such as acquired leases, assumed debt, if any, and to current assets and liabilities acquired, if any.

The value allocated to acquired leases is amortized over the related lease term and reflected as rental income in the consolidated statements of comprehensive income.

4 unchanged sentences

The acquisition of an operating shopping center typically qualifies as an asset acquisition.

Prior to the adoption of ASU 2016-02, "Leases," when applicable, as lessee, we classified our leases of land and building as operating or capital leases.

We were required to use judgment and make estimates in determining the lease term, the estimated economic life of the property and the interest rate to be used in determining whether or not the lease meets the qualification of a capital lease.

Subsequently, capital leases are now considered "finance leases."

We capitalize certain costs related to the development and redevelopment of real estate including pre-construction costs, real estate taxes, insurance, construction costs and salaries and related costs of personnel directly involved, are capitalized.

50 unchanged sentences

Mortgage notes receivable are recorded at cost, net of any valuation adjustments.

Effective January 1, 2020, (upon the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," as amended and interpreted), we account for mortgage notes receivable using the "expected credit loss" model, and accordingly impairment losses are estimated and recorded for the entire life of the loan.

life of the loan.

Prior to the implementation of ASC 326, we recognized impairment losses as incurred.

3 unchanged sentences

A loan is considered impaired when it is probable that we will be unable to collect all amounts due under the existing contractual terms.

When a loan is considered impaired, the amount of the loss accrual

is calculated by comparing the carrying amount of the mortgage note receivable to the present value of expected future cash flows.

When a loan is considered impaired, the amount of the loss accrual is calculated by comparing the carrying amount of the mortgage note receivable to the present value of expected future cash flows.

As our loans are collateralized by mortgages, these loans have risk characteristics similar to the risks in owning commercial real estate.

On May 11, 2021, two of our outstanding mortgage notes receivable were repaid.

Including interest, the net proceeds were $ 33.8 million.

As a result of the transaction, our mortgage notes receivable, net of valuation allowance, decreased $ 30.3 million.

At December 31, 2022, we had three mortgage notes receivable with an aggregate carrying amount, net of valuation adjustments of $ 9.5 million, and a weighted average interest rate of 10.9 %.

7 unchanged sentences

The primary beneficiary of a VIE has both the power to direct the activities that most significantly impact economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

On January 4, 2021, we acquired our partner's interest in the Pike & Rose hotel joint venture, which was previously considered a variable interest in a VIE.

See Note 3 for additional details of this transaction.

Our equity method investments in the Assembly Row hotel joint venture and the La Alameda shopping center and our mortgage notes receivable are considered variable interests in a VIE.

As we do not control the activities that most significantly impact the economic performance of the joint ventures related to the Assembly Row hotel, the La Alameda shopping center, or the borrower entities related to our mortgage notes receivable, we are not the primary beneficiary and do not consolidate.

As of December 31, 2021 and 2020, our investment in the Assembly Row hotel and La Alameda shopping center joint ventures and maximum exposure to loss was $ 8.9 million and $ 9.9 million, respectively, and $ 8.8 million for our Pike & Rose hotel joint venture as of December 31, 2020.

As of December 31, 2021 and 2020, our investment in mortgage notes receivable and maximum exposure to loss was $ 9.5 million and $ 39.9 million, respectively.

Our equity method investments in the Assembly Row hotel joint venture, the La Alameda shopping center, the Chandler Festival and Chandler Gateway shopping centers, and our mortgage notes receivable are considered variable interests in a VIE (see Note 3 to the consolidated financial statements for additional information on the Chandler Festival and Chandler Gateway shopping centers).

As we do not control the activities that most significantly impact the economic performance of our equity method joint ventures or the borrower entities related to our mortgage notes receivable, we are not the primary beneficiary and do not consolidate.

As of December 31, 2022 and 2021, our investment in the equity method joint ventures and maximum exposure to loss was $ 34.0 million and $ 8.9 million, respectively.

As of December 31, 2022 and 2021, our investment in mortgage notes receivable and maximum exposure to loss was $ 9.5 million for both periods.

We also own a 77.7 % tenancy in common ("TIC") interest in Escondido Promenade which is recorded as an equity method investment and included in investments in partnerships" on our December 31, 2022 consolidated balance sheets.

Our TIC interest in Escondido Promenade is not considered a variable interest in a variable interest entity.

See Note 3 to the consolidated financial statements for additional information.

In addition, we have 19 entities that meet the criteria of a VIE in which we hold a variable interest.

10 unchanged sentences

Beginning balance $ 213,708 $ 137,720

Contributions 74,530 19,335

Net income 6,613 4,296

Other comprehensive income (loss) - change in value of interest rate swaps 320 ( 471 )

Contributions 2,111 74,530

Other comprehensive income - change in value of interest rate swaps 765 320

Distributions & redemptions ( 32,445 ) ( 5,268 )

1 unchanged sentence

Ending balance $ 178,370 $ 213,708

We adopted ASC 842 effective January 1, 2019 under the modified retrospective approach and elected the optional transition method to apply the provisions of ASC 842 as of the adoption date, rather than the earliest period presented.

We elected to apply certain adoption related practical expedients for all leases that commenced prior to the election date.

These practical expedients included not reassessing whether any expired or existing contracts were or contained leases;

not reassessing the lease classification for any expired or existing leases;

and not reassessing initial direct costs for any existing leases.

We also elected the practical expedient for lessors to combine our lease and non-lease components (primarily impacts common area maintenance recoveries).

We recorded a charge to the opening accumulated dividends in excess of net income of $ 7.1 million in 2019 as a result of the adoption of ASC 842.

This charge was attributable to the write off certain direct leasing costs recorded under the previous lease accounting rules for leases which had not commenced as well as the write off of unreserved receivables (including straight-line receivables) for leases where we had determined the collection of substantially all the lease payments required for the term is not probable.

On July 13, 2022, we acquired the 21.8 % redeemable noncontrolling interest in the partnership that owns our Plaza El Segundo shopping center for $ 23.6 million, bringing our ownership interest to 100 %.

We have ground leases at 11 properties which are accounted for as operating leases.

1 unchanged sentence

A key input in the calculation is the discount rate.

As the rate implied in the lease agreements is not readily determinable, we utilize our incremental borrowing rate that correspond to the remaining term of the lease, our credit spread, and and adjustment to reflect the collateralized payment terms present in the lease.

As the rate implied in the lease agreements is not readily determinable, we utilize our incremental borrowing rate that corresponds to the remaining term of the lease, our credit spread, and an adjustment to reflect the collateralized payment terms present in the lease.

Our operating lease agreements may include options to extend the lease term or terminate it early.

1 unchanged sentence

Operating lease expense is recognized on a straight-line basis over the non-cancellable lease term and is included in rental expenses in our consolidated statements of operations.

We elected to apply the short-term lease exemption within ASC 842, and as such we have not recorded an ROU asset or lease liability for leases with terms of less than 12 months.

We do not record an ROU asset or lease liability for leases with terms of less than 12 months.

We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes.

18 unchanged sentences

Forward Equity Sales

On February 24, 2021, we replaced our existing at-the-market (“ATM”) equity program with a new ATM equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $ 500.0 million.

The new ATM equity program also allows shares to be sold through forward sales contracts.

Our at-the-market (“ATM”) equity program allows shares to be sold through forward sales contracts.

Our forward sales contracts currently meet all the conditions for equity classification;

4 unchanged sentences

Recent Accounting Pronouncements

Issued in 2021:

Standard Description Effect on the financial statements or significant matters

Adopted on January 1, 2022:

ASU 2020-06, August 2020, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity's Own Equity

This ASU simplifies the accounting for convertible instruments by removing the requirements to separately present certain conversion features in equity, simplifying the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification, and generally requiring the use of the if-converted method for all convertible instruments in the diluted EPS calculation and include the effect of potential share settlement (if the effect is more dilutive).

The guidance is effective for annual period beginning after December 15, 2021, and interim periods therein.

The adoption of this standard did not have an impact to our consolidated financial statements.

ASU 2021-05, July 2021, Lessors - Certain Leases with Variable Lease Payments (Topic 842)

2 unchanged sentences

This guidance is effective for annual periods beginning after December 15, 2021, and interim periods therein.

The adoption of this standard does not have an impact to our consolidated financial statements.

The adoption of this standard did not have an impact to our consolidated financial statements.

Issued in 2022:

ASU 2020-04, March 2020, Reference Rate Reform (Topic 848)

ASU 2022-03, June 2022, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 820)

This ASU clarifies that contractual sale restrictions are not considered in measuring the fair value of equity securities, and requires specific disclosures for all entities with equity securities subject to a contractual sale restriction including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions.

In addition, the ASU prohibits an entity from recognizing a contractual sale as a separate unit of account.

This guidance is effective in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted.

We are assessing the impact of this ASU on OP units issued as consideration in future acquisitions.

Issued in 2020:

Reference Rate Reform (Topic 848) and related update:

ASU 2020-04, March 2020,

Reference Rate Reform

ASU 2022-06 , December

2022, Deferral of the Sunset

This ASU provides companies with optional practical expedients to ease the accounting burden for contract modifications associated with transitioning away from LIBOR and other interbank offered rates that are expected to be discontinued as part of reference rate reform.

1 unchanged sentence

For contract modifications, changes in the reference rate or other critical terms will be treated as a continuation of the prior contract.

This guidance can be applied immediately, however, is generally only available through December 31, 2022.

We are still evaluating the impact of reference rate reform and whether we will apply any of these practical expedients.

ASU 2020-06, August 2020, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity's Own Equity

The guidance is effective for annual period beginning after December 15, 2021, and interim periods therein.

The adoption of this standard does not have an impact to our consolidated financial statements.

ASU 2022-06 extended the period for which this guidance can be immediately applied through December 31, 2024.

We expect to apply some of the practical expedients, as we are in the process of transitioning the $ 55.1 million mortgage loan on Hoboken and the $ 38.2 million mortgage loan related to the unconsolidated Assembly Row hotel (of which our share is $ 19.1 million) from LIBOR to alternative interest rates.

We do not expect a significant impact to our financial results, financial position, or cash flows from this transition.

Consolidated Statements of Cash Flows—Supplemental Disclosures

13 unchanged sentences

DownREIT operating partnership units redeemed for common shares $ 1,385 $ 7,545 $ —

Settlement of partner loan receivable via dilution of partner interests $ — $ — $ 5,379

Shares issued under dividend reinvestment plan $ 1,718 $ 1,727 $ 1,734

5.417% Series 1 Cumulative Convertible Preferred Shares redeemed for common shares $ 175 $ — $ —

(1) See our Annual Report on Form 10-K for the year ended December 31, 2020 for additional disclosures relating to the mortgages entered into and assumed as a result of the Hoboken acquisition .

7 unchanged sentences

2022 Property Acquisitions

During the year ended December 31, 2022, we acquired the following properties:

Date Acquired Property City/State Gross Leasable Area (GLA) Purchase Price

(in square feet) (in millions)

April 20, 2022 &

July 27, 2022 Kingstowne Towne Center Kingstowne, Virginia 410,000 $ 200.0 (1)

July 18, 2022 Hilton Village (office building) Scottsdale, Arizona 212,000 $ 53.6 (2)

July 27, 2022 The Shops at Pembroke Gardens Pembroke Pines, Florida 391,000 $ 180.5 (3)

November 18, 2022 Hoboken (301 Washington St.) Hoboken, New Jersey N/A $ 9.0 (4)

(1) Approximately $ 11.3 million and $ 0.3 million of net assets were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $ 20.2 million of net assets acquired were allocated to other liabilities for "below market leases."

(2) This building is adjacent to, and will be operated as part of our Hilton Village property.

The land is controlled under a long-term ground lease that expires on September 30, 2075, for which we have recorded a $ 6.5 million "operating lease right of use asset" (net of a $ 0.8 million above market liability) and a $ 7.3 million "operating lease liability." Approximately $ 8.9 million of net assets acquired were allocated to other assets for "acquired lease costs" and $ 0.1 million of net assets acquired were allocated to other liabilities for "below market leases."

(3) Approximately $ 16.3 million and $ 1.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $ 18.4 million of net assets acquired were allocated to other liabilities for "below market leases."

(4) This property, that we own a 90 % ownership interest in, was acquired through our Hoboken joint venture, and is in the beginning stages of redevelopment.

On October 6, 2022, we acquired a 47.5 % net interest in an unconsolidated joint venture that owns two shopping centers for a combined price of $ 58.9 million.

On the date of acquisition, the properties had combined mortgage debt of $ 76.1 million, of which, our share is approximately $ 36.2 million.

Approximately $ 8.0 million and $ 2.0 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $ 17.1 million of net assets acquired were allocated to other liabilities for "below market leases." Additional information on the properties is listed below:

Property City/State Gross Leasable Area (GLA) Purchase Price

(in square feet) (in millions)

Chandler Festival Chandler, Arizona 355,000 $ 40.8

Chandler Gateway Chandler, Arizona 262,000 $ 18.1

2022 Property Dispositions

During the year ended December 31, 2022, we sold two residential properties (one included an adjacent retail pad), one retail property, one parcel of land, and one portion of a property for sales prices totaling $ 136.2 million, resulting in net gains totaling approximately $ 84.1 million.

Other Transaction

On August 25, 2022, we entered into a tenancy in common ("TIC") agreement with our partner in the partnership that owned Escondido Promenade.

As a result, the Company owns a 77.7 % TIC interest, and our former partner owns the remaining 22.3 % interest.

While the Company controlled and consolidated Escondido Promenade under the previous partnership arrangement, control is shared under the TIC agreement.

The transaction is considered a transfer of our previous controlling partner interest in exchange for a non-controlling TIC interest.

Accordingly, we deconsolidated the entity and recorded our TIC interest at fair value as an equity method investment.

We recognized a $ 70.4 million "gain on deconsolidation of VIE" on our consolidated statements of operations, which is the difference between the net carrying value of the deconsolidated entity and the fair value of our TIC interest.

As of August 25, 2022, the fair value of our investment in the entity was $ 110.0 million, and is included in "investment in partnerships" on our consolidated balance sheet as of December 31, 2022.

As a part of this transaction, we made a $ 3.5 million loan to our co-owner, which is included in "accounts and notes receivable, net" on our consolidated balance sheet at December 31, 2022.

In addition, we entered into a purchase option agreement to acquire the TIC interest from our co-owner, which was secured through an option payment of $ 1.5 million, and allows us to exercise our option at any time between February 1, 2023 and March 15, 2023.

2021 Property Acquisitions

On January 4, 2021, we acquired our partner's 20 % interest in our joint venture arrangement related to the Pike & Rose hotel for $ 2.3 million, and repaid the $ 31.5 million mortgage loan encumbering the hotel.

20 unchanged sentences

During the year ended December 31, 2021, we sold two properties and a portion of three properties for a total sales price of $ 141.6 million, which resulted in a net gain of $ 88.3 million.

2020 Property Acquisitions

Date Acquired Property City/State Gross Leasable Area (GLA) Purchase Price

(in square feet) (in millions)

January 10, 2020

Fairfax Junction Fairfax, Virginia 49,000 $ 22.3 (1)

February 12, 2020

Hoboken (2 mixed-use buildings) Hoboken, New Jersey 12,000

(1 ) This property is adjacent to, and is operated as part of the property acquired in 2019.

The purchase price was paid with a combination of cash and the issuance of 163,322 downREIT operating partnership units.

Approximately $ 0.5 million and $ 0.4 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively.

(2) The purchase price includes the assumption of $ 8.9 million of mortgage debt, and is in addition to the 37 buildings previously acquired in 2019, and was completed through the same joint venture.

Less than $ 0.1 million and approximately $ 3.3 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively.

2020 Impairment

On September 1, 2020, the $ 60.6 million non-recourse mortgage loan on The Shops at Sunset Place matured.

The mortgage was not repaid, and thus the lender declared the loan in default.

We evaluated our long-term plans for the property, taking into account current market conditions and prospective development and redevelopment returns, as well as the impact of COVID-19 on the revenue prospects for the property, and concluded we did not expect to move forward with the planned redevelopment or repay the mortgage balance, and thus, did not expect to be long term holders of the asset.

Given these expectations, we recorded an impairment charge of $ 57.2 million during the third quarter of 2020.

The fair value estimate used to determine the impairment charge was determined by market comparable data and discounted cash flow analyses.

The cash flows utilized in such analyses are comprised of unobservable inputs which 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 we believe to be within a reasonable range of current market rates for the property.

Based on these inputs, we have determined that the $ 57 million estimated valuation of the property is classified within Level 3 of the fair value hierarchy.

On December 31, 2020, we sold The Shops at Sunset Place for $ 65.5 million and repaid the mortgage loan.

The resulting gain of $ 9.2 million is included in the cumulative 2020 gain of $ 98.1 million noted in the 2020 Property Dispositions section below.

2020 Property Dispositions

During the year ended December 31, 2020, we sold three properties (including The Shops at Sunset Place discussed above) and one building for a total sales price of $ 186.1 million, which resulted in a net gain of $ 98.1 million.

During the year ended December 31, 2020, we closed on the sale of the remaining two condominium units at our Pike & Rose property, receiving proceeds net of closing costs of $ 2.1 million.

NOTE 4— ACQUIRED LEASES

46 unchanged sentences

Mortgages payable (Dollars in thousands)

Sylmar Towne Center $ — $ 16,236 5.39 % June 6, 2021

Plaza Del Sol — 8,041 5.23 % December 1, 2021

THE AVENUE at White Marsh — 52,705 3.35 % January 1, 2022

Montrose Crossing — 65,596 4.20 % January 10, 2022

Azalea $ 40,000 $ 40,000 3.73 % November 1, 2025

3 unchanged sentences

Brook 35 11,500 11,500 4.65 % July 1, 2029

Hoboken (24 Buildings) (1) 56,450 56,450 LIBOR + 1.95% December 15, 2029

Hoboken (24 Buildings) (1) 55,060 56,450 LIBOR + 1.95 %

December 15, 2029

Various Hoboken (14 Buildings) 30,876 31,817 Various (2) Various through 2029

5 unchanged sentences

Notes payable

Revolving credit facility — — LIBOR + 0.775% January 19, 2024

Term loan 300,000 400,000 LIBOR + 0.80% April 16, 2024

Various 2,635 3,270 11.31 % Various through 2028

Term Loan (3)(5) 600,000 300,000 SOFR + 0.85 %

April 16, 2024

Revolving credit facility (3)(4)(5) — — SOFR + 0.775 %

April 5, 2027

Various 2,957 2,635 Various (6) Various through 2059

Subtotal 602,957 302,635

19 unchanged sentences

(2) The interest rates on these mortgages range from 3.91 % to 5.00 %.

3) This mortgage loan has a fixed interest rate, however, the rate resets every five years until maturity.

The current interest rate is fixed until July 1, 2022, and the loan is prepayable at par anytime after this date.

On April 16, 2021, we repaid $ 100.0 million of our existing $ 400.0 million term loan, amended the agreement on the remaining $ 300.0 million to lower the current spread over LIBOR from 135 basis points to 80 basis points based on our current credit rating, and extended the initial maturity date to April 16, 2024, along with two one-year extensions, at our option.

In 2021, we repaid the following mortgage loans, at par, prior to their original maturity date:

Property Repayment Date Principal

(in millions)

Sylmar Towne Center February 5, 2021 $ 16.2

Plaza Del Sol September 1, 2021 $ 7.9

Montrose Crossing October 12, 2021 $ 64.1

The AVENUE at White Marsh November 2, 2021 $ 52.7

(3) Our revolving credit facility SOFR loans bear interest at Daily Simple SOFR or Term SOFR as defined in the credit agreement and our term loan bears interest at Term SOFR, plus 0.10 %, plus a spread, based on our current credit rating.

(4) The maximum amount drawn under our revolving credit facility during the year ended December 31, 2022 was $ 330.0 million and the weighted average interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 3.2 %.

(5) The Operating Partnership is the obligor under our revolving credit facility, term loan, and senior notes and debentures.

(6) The interest rates on these notes payable range from 3.00 % to 11.31 %.

On June 29, 2022, we repaid the $ 16.1 million mortgage loan on one of the buildings at our Hoboken property, at par.

On October 5, 2022, we amended our revolving credit facility, increasing the borrowing capacity from $ 1.0 billion to $ 1.25 billion, extending the maturity date to April 5, 2027, plus two six-month extension options, transitioning the interest rate provisions from LIBOR to the secured overnight financing rate ("SOFR"), and adjusting the spread for SOFR based loans.

Our SOFR based loans bear interest at Daily Simple SOFR or Term SOFR as defined in the credit agreement plus 0.10 % plus a spread, based on our credit rating.

The current spread is 77.5 basis points.

In addition, we have an option (subject to bank approval) to increase the credit facility through an accordion feature to $ 1.75 billion.

During 2022, 2021 and 2020, the maximum amount of borrowings outstanding under our revolving credit facility was $ 330.0 million, $ 150.0 million and $ 990.0 million, respectively.

The weighted average amount of borrowings outstanding was $ 80.3 million, $ 19.6 million and $ 138.5 million, respectively, and the weighted average interest rate, before amortization of debt fees, was 3.2 %, 0.9 % and 1.5 %, respectively.

The revolving credit facility requires an annual facility fee of $ 1.0 million.

The revolving credit facility requires an annual facility fee which is $ 1.9 million under the amended credit agreement.

At December 31, 2022 and December 31, 2021, our revolving credit facility had no balance outstanding.

On October 5, 2022, we also amended our unsecured term loan and borrowed an additional $ 300.0 million, bringing the total outstanding to $ 600.0 million.

The term loan amendment also transitioned the interest rate provisions from LIBOR to SOFR.

This SOFR based loan bears interest at Term SOFR as defined in the agreement, plus 0.10 %, plus a 85 basis point spread, based on our current credit rating.

The net proceeds from the term loan after underwriting fees and other costs were $ 298.5 million, and were used to repay the $ 267.0 million outstanding balance on the revolving credit facility and for general corporate purposes.

Our revolving credit facility, term loan, and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders’ equity and debt coverage ratios and a maximum ratio of debt to net worth.

15 unchanged sentences

(1) Our $ 600.0 million term loan matures on April 16, 2024 plus two one-year extensions, at our option.

(2) Our $ 1.0 billion revolving credit facility matures on January 19, 2024, plus two six-month extensions at our option.

(2) Our $ 1.25 billion revolving credit facility matures on April 5, 2027 plus two six-month extensions, at our option.

As of December 31, 2022, there was no balance outstanding under this credit facility.

10 unchanged sentences

The fair value of our mortgages payable, notes payable and senior notes and debentures is sensitive to fluctuations in interest rates.

Quoted market

prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) is generally used to estimate the fair value of our mortgages and notes payable.

Quoted market prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) is generally used to estimate the fair value of our mortgages and notes payable.

Considerable judgment is necessary to estimate the fair value of financial instruments.

10 unchanged sentences

The fair values of the interest rate swap agreements are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs.

The fair value of our swaps at December 31, 2021 was a liability of $ 1.5 million and is included in "other liabilities and deferred credits" on our consolidated balance sheet.

During 2021, the value of our interest rate swaps increased $ 3.2 million (including $ 0.9 million reclassified from other comprehensive income to interest expense).

A summary of our financial liabilities that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows:

The fair value of our swaps at December 31, 2022 was an asset of $ 6.1 million and is included in "prepaid expenses and other assets" on our consolidated balance sheet.

During 2022, the value of our interest rate swaps increased $ 7.7 million (including less than $ 0.1 million reclassified from other comprehensive income as an increase to interest expense).

A summary of our financial assets (liabilities) that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows:

December 31, 2022 December 31, 2021

3 unchanged sentences

One of our equity method investees has two interest rate swaps which qualify as cash flow hedges.

At December 31, 2021 and December 31, 2020, our share of the change in fair value of the related swaps included in "accumulated other comprehensive loss" was an increase of $ 0.7 million and a decrease of $ 0.5 million, respectively.

At December 31, 2022 and December 31, 2021, our share of the change in fair value of the related swaps included in "accumulated other comprehensive income (loss)" was an increase of $ 0.9 million and $ 0.7 million, respectively.

NOTE 7— COMMITMENTS AND CONTINGENCIES

10 unchanged sentences

We are self-insured for general liability costs up to predetermined retained amounts per claim, and we believe that we maintain adequate accruals to cover our retained liability.

We currently do not maintain third party stop-loss insurance policies to cover liability costs in excess of predetermined retained amounts.

We currently do not maintain third party stop-loss insurance policies to cover

liability costs in excess of predetermined retained amounts.

Our accrual for self-insurance liability is determined by management and is based on claims filed and an estimate of claims incurred but not yet reported.

3 unchanged sentences

These warranties may extend up to ten years and require significant judgment.

If changes in facts and circumstances indicate that warranty reserves are understated, we will

accrue additional reserves at such time a liability has been incurred and the costs can be reasonably estimated.

If changes in facts and circumstances indicate that warranty reserves are understated, we will accrue additional reserves at such time a liability has been incurred and the costs can be reasonably estimated.

Warranty reserves are released once the legal liability period has expired or all related work has been substantially completed.

On December 11, 2019, we received proceeds related to the sale under the threat of condemnation at San Antonio Center as discussed in our Annual Report on Form 10-K for the year ended December 31, 2019.

We have indemnified the condemning authority for all costs incurred related to the condemnation proceedings including any payments required to tenants at the property and expect the process will take several years to complete.

During 2021, we did not incur any payments, and consequently, at December 31, 2021, our liability remains $ 32.6 million to reflect our estimate of the remaining consideration.

At December 31, 2022 and 2021, our reserves for general liability costs were $ 3.3 million and $ 5.2 million, respectively, and are included in “accounts payable and accrued expenses” in our consolidated balance sheets.

2 unchanged sentences

Although we consider the reserve to be adequate, there can be no assurance that the reserve will prove to be adequate over-time to cover losses due to the difference between the assumptions used to estimate the reserve and actual losses.

We indemnified the condemning authority for all costs incurred related to the condemnation proceedings including any payments required to tenants at the property and recorded a corresponding liability for our estimate of these costs.

During 2022, we recorded a net reduction to our liability for condemnation and transaction costs to reflect the impact of a recent tenant settlement agreement and our current estimate of remaining costs.

As a result, for the year ended December 31, 2022, we have recognized a gain of $ 9.3 million, which is included in our consolidated statements of operations.

Additionally, during 2022, we incurred $ 18.0 million of payments to tenants, and consequently, at December 31, 2022, we have a liability of $ 5.0 million to reflect our estimate of the remaining consideration.

At December 31, 2022, we had letters of credit outstanding of approximately $ 6.7 million.

As of December 31, 2021 in connection with capital improvement, development, and redevelopment projects, the Trust has contractual obligations of approximately $ 319.2 million.

As of December 31, 2022 in connection with capital improvement, development, and redevelopment projects, we have contractual obligations of approximately $ 262.1 million.

We are obligated under operating lease agreements on several shopping centers and one office lease requiring minimum annual payments as follows, as of December 31, 2022:

8 unchanged sentences

Year ending December 31,

2023 $ 59,713

Thereafter 68,676

3 unchanged sentences

A master lease for Mercer Mall includes a fixed purchase price option for $ 55 million in 2023.

If we fail to exercise our purchase option, the owner of Mercer Mall has a put option which would require us to purchase Mercer Mall for $ 60 million in 2025.

During 2022, we exercised our option to purchase the fee interest, which is expected to close in the second half of 2023.

Under the terms of the Congressional Plaza partnership agreement, a minority partner has the right to require us and the other minority partner to purchase its 26.63 % interest in Congressional Plaza at the interest’s then-current fair market value.

4 unchanged sentences

The consideration is net of a contract amendment fee to be paid by the landlord.

Two of the members in Plaza El Segundo have the right to require us to purchase their 10.0 % and 11.8 % ownership interests at the interests' then-current fair market value.

If the members fail to exercise their put options, we have the right to purchase each of their interests on or after December 30, 2026 at fair market value.

Based on management’s current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from approximately $ 25 million to $ 28 million.

The other member in The Grove at Shrewsbury and Brook 35 has the right to require us to purchase all of its approximately 4.1 % interest in The Grove at Shrewsbury and approximately 6.5 % interest in Brook 35 at the interests' then-current fair market value.

2 unchanged sentences

Based on management's current estimate of fair market value as of December 31, 2022, our estimated maximum liability upon exercise of the put option would range from $ 8 million to $ 9 million.

Effective June 14, 2026, the other member in Cambelback Colonnade and Hilton Village has the right to require us to purchase all of its 2.0 % ownership interest at the interest's then-current fair market value.

Effective June 14, 2026, the other member in Camelback Colonnade and Hilton Village has the right to require us to purchase all of its 2.0 % ownership interest at the interest's then-current fair market value.

Based on management's current estimate of fair value as of December 31, 2022, our estimated maximum liability upon exercise of the put option would range from $ 4 million to $ 5 million.

Effective October 6, 2027, the other member in the partnership that owns equity method investments in Chandler Festival and Chandler Gateway has the right to require us to purchase its 2.5 % net ownership interest.

Based on management's current estimate of fair value as of December 31, 2022, our estimated maximum liability upon exercise of the put option would range from $ 1 million and $ 2 million.

Effective June 1, 2029, the other member in Grossmont Center has the right to require us to purchase all of its 40.0 % ownership interest at the interest's then-current fair market value.

5 unchanged sentences

In 2022, 2021 and 2020, 19,502 shares, 19,758 shares, and 24,491 shares, respectively, were issued under the Plan.

As of December 31, 2021, 2020, and 2019, we had 6,000,000 Depositary Shares outstanding, each representing 1/1000th interest of 5.0 % Series C Cumulative Redeemable Preferred Share, par value $ 0.01 per share ("Series C Preferred Shares"), at the liquidation preference of $ 25.00 per depositary share (or $ 25,000 per Series C Preferred share).

The Series C Preferred Shares accrue dividends at a rate of 5.0 % of the $ 25,000 liquidation preference per year and are redeemable at our option on or after September 29, 2022.

As of December 31, 2022, 2021, and 2020, we had 6,000,000 Depositary Shares outstanding, each representing 1/1000th interest of 5.0 % Series C Cumulative Redeemable Preferred Share, par value $ 0.01 per share ("Series C Preferred Shares"), at

the liquidation preference of $ 25.00 per depositary share (or $ 25,000 per Series C Preferred share).

The Series C Preferred Shares accrue dividends at a rate of 5.0 % of the $ 25,000 liquidation preference per year and are redeemable at our option.

Additionally, they are not convertible and holders of these shares generally have no voting rights, unless we fail to pay dividends for six or more quarters.

As of December 31, 2021, 2020, and 2019, we had 399,896 shares of 5.417 % Series 1 Cumulative Convertible Preferred Shares (“Series 1 Preferred Shares”) outstanding that have a liquidation preference of $ 25 per share and par value $ 0.01 per share.

As of December 31, 2022, we had 392,878 shares of 5.417 % Series 1 Cumulative Convertible Preferred Shares (“Series 1 Preferred Shares”) outstanding that have a liquidation preference of $ 25 per share and par value $ 0.01 per share, and 399,896 shares at December 31, 2021 and 2020.

The Series 1 Preferred Shares accrue dividends at a rate of 5.417 % per year and are convertible at any time by the holders to our common shares at a conversion rate of $ 104.69 per share.

On June 15, 2022, one of our Series 1 Preferred shareholders converted 7,018 preferred shares to 1,675 common shares.

The Series 1 Preferred Shares are also convertible under certain circumstances at our election.

1 unchanged sentence

On February 14, 2022, we replaced our existing at-the-market (“ATM”) equity program with a new ATM equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $ 500.0 million.

May 7, 2021, we amended this ATM equity program, which resets the limit to $ 500.0 million.

The new ATM equity program also allows shares to be sold through forward sales contracts.

We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes.

Our ATM equity program also allows shares to be sold through forward sales contracts.

We intend to use the net proceeds from ATM equity program issuances to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes.

For the year ended December 31, 2022, we issued 430,473 common shares at a weighted average price per share of $ 111.49 for net cash proceeds of $ 47.4 million including paying $ 0.5 million in commissions and $ 0.1 million in additional offering expenses related to the sales of these common shares.

For the year ended December 31, 2021, we issued 847,471 common shares at a weighted average price per share of $ 104.19 for net cash proceeds of $ 87.0 million and paid $ 0.9 million in commissions and $ 0.4 million in additional offering expenses related to the sales of these common shares.

We also entered into forward sales contracts for the year ended December 31, 2021 for 2,999,955 common shares under our ATM equity program at a weighted average offering price of $ 120.22 .

During 2021, we settled a portion of the forward sales agreements entered into during the year by issuing 796,300 common shares for net proceeds of $ 85.7 million.

The forward price that we will receive upon physical settlement of the remaining forward sale agreements is subject to the adjustment for (i) commissions, (ii) a floating interest rate factor equal to a specified daily rate less a spread, (iii) the forward purchasers' stock borrowing costs and (iv) scheduled dividends during the term of the forward sale agreements.

The remaining open forward shares may be settled at any time on or before multiple required settlement dates ranging from June 2022 to December 2022.

As of December 31, 2021, we had the capacity to issue up to $ 175.0 million in common shares under our ATM equity program.

As of December 31, 2022, we have the remaining capacity to issue up to $ 452.0 million in common shares under our ATM equity program.

During 2021, we entered into forward sales contracts for 2,999,955 common shares under our ATM equity program at a weighted average offering price of $ 120.22 .

During 2021, we settled a portion of these forward sales agreements by issuing 796,300 common shares for net proceeds of $ 85.7 million and during 2022, we settled the remaining forward sales contracts by issuing 2,203,655 common shares for net proceeds of $ 259.4 million.

We have no outstanding forward sales agreements as of December 31, 2022.

NOTE 9— DIVIDENDS

71 unchanged sentences

Total rental expenses $ 228,958 $ 198,121 $ 170,920

_____________________

(1) Other operating for the year ended December 31, 2019 includes an $ 11.9 million charge relating to the buyout of a lease at Assembly Square Marketplace .

NOTE 12— SHARE-BASED COMPENSATION PLANS

3 unchanged sentences

(In thousands)

Grants of common shares and options $ 14,434 $ 13,243 $ 13,330

Grants of common shares, restricted stock units, and options $ 15,018 $ 14,434 $ 13,243

Capitalized share-based compensation ( 1,314 ) ( 1,425 ) ( 1,319 )

27 unchanged sentences

Outstanding at December 31, 2021 3,658 $ 95.77

Granted 3,658 95.77

Exercised ( 366 ) 95.77

13 unchanged sentences

On February 10, 2021, 10,441 restricted stock units were awarded to an officer that vest at the end of four years .

The final awards earned are based on meeting certain market based performance criteria, and may vary from 0% to 200% of the original award.

The weighted-average grant-date fair value of stock awarded in 2021 was $ 97.01 .

The final awards earned are based on meeting certain market based performance criteria, and may vary from 0 % to 200 % of the original

The weighted-average grant-date fair value of the restricted stock units awarded in 2021 was $ 97.01 .

The following table provides a summary of restricted stock unit activity for 2022:

2 unchanged sentences

Unvested at December 31, 2021 10,441 $ 97.01

Granted 10,441 97.01

Forfeited — —

6 unchanged sentences

January 3, 2023 5,942 Shares Immediate Trustees

February 9, 2022 103,463 Restricted Shares 3-5 years Officers and key employees

February 7, 2023 135,314 Restricted Shares 3 - 5 years

Officers and key employees

NOTE 13— SAVINGS AND RETIREMENT PLANS

We have a savings and retirement plan in accordance with the provisions of Section 401(k) of the Code.

Generally, employees can elect, at their discretion, to contribute a portion of their compensation up to a maximum of $ 19,500 for 2021 and 2020, and 19,000 for 2019.

Generally, employees can elect, at their discretion, to contribute a portion of their compensation up to a maximum of $ 20,500 for 2022, and 19,500 for 2021 and 2020.

Under the plan, we contribute 50 % of each employee’s elective deferrals up to 5 % of eligible earnings.

8 unchanged sentences

Our obligation under this plan and the related investments are both included in the accompanying consolidated financial statements.

NOTE 14— EARNINGS PER SHARE

We have calculated earnings per share (“EPS”) under the two-class method.

The two-class method is an earnings allocation methodology whereby EPS for each class of common stock and participating securities is calculated according to dividends declared and participation rights in undistributed earnings.

For 2021 we had 0.3 million, and for 2020 and 2019 we had 0.2 million weighted average unvested shares outstanding, respectively, which are considered participating securities.

Therefore, we have allocated our earnings for basic and diluted EPS between common shares and unvested shares;

the portion of earnings allocated to the unvested shares is reflected as “earnings allocated to unvested shares” in the reconciliation below.

The following potentially issuable shares were excluded from the diluted EPS calculation because their impact is anti-dilutive:

• exercise of 682 stock options in 2020 and 2019, respectively,

• conversions of downREIT operating partnership units and 5.417 % Series 1 Cumulative Convertible Preferred Shares for 2021, 2020, and 2019, respectively, and

• the issuance of 1.8 million shares issuable under forward sales agreements in 2021.

Additionally, 10,441 unvested restricted stock units are excluded from the diluted EPS calculation as the market based performance criteria in the award has not yet been achieved.

NOTE 14— EARNINGS PER SHARE AND UNIT

We have calculated earnings per share (“EPS”) and earnings per unit ("EPU") under the two-class method.

The two-class method is an earnings allocation methodology whereby EPS and EPU for each class of common stock and partnership units, respectively, and participating securities is calculated according to dividends or distributions declared and participation rights in undistributed earnings.

For 2022 and 2021 we had 0.3 million weighted average unvested shares and units outstanding, and for 2020 we had 0.2 million which are considered participating securities.

Therefore, we have allocated our earnings for basic and diluted EPS and EPU between common shares and units and unvested shares and units;

the portion of earnings allocated to the unvested shares and units is reflected as “earnings allocated to unvested shares” or "earnings allocated to unvested units" in the reconciliation below.

The following potentially issuable shares were excluded from the diluted EPS and EPU calculations because their impact is anti-dilutive:

• exercise of 682 stock options in 2020,

• conversions of downREIT operating partnership units for 2021 and 2020,

• and 5.417 % Series 1 Cumulative Convertible Preferred Shares and units for 2022, 2021, and 2020, and

• the issuance of $ 1.8 million shares and units issuable under forward sales agreements in 2021.

Additionally, 10,441 unvested restricted stock units are excluded from the diluted EPS and EPU calculations as the market based performance criteria in the award has not yet been achieved.

Federal Realty Investment Trust Earnings per Share

Year Ended December 31,

5 unchanged sentences

Earnings allocated to unvested shares ( 1,328 ) ( 1,211 ) ( 992 )

Net income available for common shareholders, basic and diluted $ 252,245 $ 122,672 $ 344,817

Net income available for common shareholders, basic 376,129 252,245 122,672

Income attributable to downREIT operating partnership units 2,810 — —

Net income available for common shareholders, diluted $ 378,939 $ 252,245 $ 122,672

Weighted average common shares outstanding—basic 79,854 77,336 75,515

1 unchanged sentence

Open forward contracts for share issuances — 32 —

DownREIT operating partnership units 654 — —

Weighted average common shares outstanding—diluted 80,508 77,368 75,515

3 unchanged sentences

Net income available for common shareholders $ 4.71 $ 3.26 $ 1.62

NOTE 15— SUBSEQUENT EVENTS

In January of 2022, we completed the UPREIT reorganization described in the Explanatory Note at the beginning of this Annual Report.

Prior to the UPREIT Reorganization, our business was conducted through the Predecessor.

This Annual Report pertains to the business and results of operations of the Predecessor for its fiscal year ended December 31, 2021.

As a result of the UPREIT reorganization, the Parent Company became the successor issuer to the Predecessor under the Exchange Act.

The Parent Company and the Partnership have elected to co-file this Annual Report of the Predecessor to ensure continuity of information to investors.

For additional information on our UPREIT reorganization, please see our Current Reports on Form 8-K filed with the SEC on January 3, 2022 and January 5, 2022.

FEDERAL REALTY INVESTMENT TRUST

Federal Realty OP LP Trust Earnings per Unit

Year Ended December 31,

2022 2021 2020

(In thousands, except per unit data)

Net income $ 395,661 $ 269,081 $ 135,888

Preferred unit distributions ( 8,034 ) ( 8,042 ) ( 8,042 )

Income from operations attributable to noncontrolling interests ( 10,170 ) ( 7,583 ) ( 4,182 )

Earnings allocated to unvested units ( 1,328 ) ( 1,211 ) ( 992 )

Net income available for common unit holders, basic 376,129 252,245 122,672

Income attributable to downREIT operating partnership units 2,810 — —

Net income available for common unit holders, diluted $ 378,939 $ 252,245 $ 122,672

Weighted average common units outstanding—basic 79,854 77,336 75,515

Effect of dilutive securities:

Common unit issuances relating to open common forward contracts — 32 —

DownREIT operating partnership units 654 — —

Weighted average common units outstanding—diluted 80,508 77,368 75,515

EARNINGS PER COMMON UNIT, BASIC

Net income available for common unit holders $ 4.71 $ 3.26 $ 1.62

EARNINGS PER COMMON UNIT, DILUTED

Net income available for common unit holders $ 4.71 $ 3.26 $ 1.62

NOTE 15— SUBSEQUENT EVENT

On January 31, 2023, we acquired the 180,000 square foot portion of Huntington Square shopping center that was not previously owned, as well as the fee interest in the land underneath the portion of the shopping center which we control under a long-term ground lease for $ 35.5 million.

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION

21 unchanged sentences

BETHESDA ROW (Maryland) 46,579 35,406 174,823 44,437 212,371 256,808 104,068 1945-2008 12/31/93, 6/2/97, 1/20/06, 9/25/08, 9/30/08, & 12/27/10 (1)

BIRCH & BROAD (formerly known as Falls Plaza) (Virginia) 1,798 1,270 20,876 1,819 22,125 23,944 9,741 1960/1962 9/30/67 & 10/05/72 (1)

BIRCH & BROAD (Virginia) 1,798 1,270 22,674 1,819 23,923 25,742 10,663 1960/1962 9/30/67 & 10/05/72 (1)

BRICK PLAZA (New Jersey) — 24,715 82,169 4,385 102,499 106,884 64,220 1958 12/28/1989 (1)

6 unchanged sentences

CHESTERBROOK (Virginia) 13,042 24,725 3,172 13,042 27,897 40,939 1,486 1967/1991 4/30/21 (1)

FEDERAL REALTY INVESTMENT TRUST

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION

24 unchanged sentences

ELLISBURG (New Jersey) 4,028 11,309 22,022 4,013 33,346 37,359 23,410 1959 10/16/1992 (1)

ESCONDIDO PROMENADE (California) 19,117 15,829 19,823 19,117 35,652 54,769 22,092 1987 12/31/96 & 11/10/10 (1)

FAIRFAX JUNCTION (Virgina) 16,768 23,825 3,547 16,768 27,372 44,140 3,843 1981/1986/ 2000 2/8/19 & 1/10/20 (1)

4 unchanged sentences

FREEDOM PLAZA (California) — 3,255 40,841 — 44,096 44,096 2,965 2018-2020 6/15/2018 (1)

FEDERAL REALTY INVESTMENT TRUST

FRESH MEADOWS (New York) 24,625 25,255 44,707 24,633 69,954 94,587 50,551 1946-1949 12/5/1997 (1)

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION

12 unchanged sentences

Improvements Total

FRESH MEADOWS (New York) 24,625 25,255 44,201 24,633 69,448 94,081 48,793 1946-1949 12/5/1997 (1)

FRIENDSHIP CENTER (District of Columbia) 12,696 20,803 4,062 12,696 24,865 37,561 15,023 1998 9/21/2001 (1)

17 unchanged sentences

KINGS COURT (California) — 10,714 917 — 11,631 11,631 10,939 1960 8/24/1998 (1)

LANCASTER (Pennsylvania) — 2,103 6,291 432 7,962 8,394 6,230 1958 4/24/1980 (1)

FEDERAL REALTY INVESTMENT TRUST

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION

12 unchanged sentences

Improvements Total

KINGSTOWNE TOWNE CENTER (Virginia) 72,234 137,466 134 72,234 137,600 209,834 2,827 1996/2001/ 2006 4/20/22 & 7/27/22 (1)

LANCASTER (Pennsylvania) — 2,103 6,621 432 8,292 8,724 6,460 1958 4/24/1980 (1)

LANGHORNE SQUARE (Pennsylvania) 720 2,974 21,044 720 24,018 24,738 18,544 1966 1/31/1985 (1)

13 unchanged sentences

PAN AM (Virginia) 8,694 12,929 10,055 8,695 22,983 31,678 18,204 1979 2/5/1993 (1)

PENTAGON ROW (Virginia) — 2,955 103,692 — 106,647 106,647 56,156 1999 - 2002 1998 & 11/22/10 (1)

PERRING PLAZA (Maryland) 2,800 6,461 26,183 2,800 32,644 35,444 24,815 1963 10/1/1985 (1)

2 unchanged sentences

PLAZA DEL MERCADO (Maryland) 10,305 21,553 15,022 10,305 36,575 46,880 10,092 1969 1/13/2016 (1)

PLAZA DEL SOL (California) 5,605 12,331 ( 55 ) 5,605 12,276 17,881 1,882 2009 8/2/2017 (1)

FEDERAL REALTY INVESTMENT TRUST

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION

12 unchanged sentences

Improvements Total

PLAZA DEL SOL (California) 5,605 12,331 19 5,605 12,350 17,955 2,258 2009 8/2/2017 (1)

PLAZA EL SEGUNDO/THE POINT (California) 124,614 62,127 153,556 88,748 64,463 239,968 304,431 74,977 2006/2007/ 2016 12/30/11, 6/14/13, 7/26/13, & 12/27/13 (1)

2 unchanged sentences

RIVERPOINT CENTER (Illinois) 15,422 104,572 2,173 15,422 106,745 122,167 19,616 1989, 2012 3/31/2017 (1)

ROCKVILLE TOWN SQUARE (Maryland) — 8,092 36,927 — 45,019 45,019 20,165 2005 - 2007 2006 - 2007 (1)

ROLLINGWOOD APTS.

(Maryland) 552 2,246 10,695 774 12,719 13,493 10,529 1960 1/15/1971 (1)

SAN ANTONIO CENTER (California) 26,400 18,462 5,887 26,400 24,349 50,749 6,144 1958, 1964-1965, 1974-1975, 1995-1997 1/9/2015, 9/13/19 (1)

4 unchanged sentences

THE SHOPPES AT NOTTINGHAM SQUARE (Maryland) 4,441 12,849 2,208 4,441 15,057 19,498 7,448 2005 - 2006 3/8/2007 (1)

THE SHOPS AT PEMBROKE GARDENS (Florida) 39,506 141,356 96 39,506 141,452 180,958 2,489 2007 7/27/2022 (1)

THIRD STREET PROMENADE (California) 22,645 12,709 53,725 25,125 63,954 89,079 38,262 1888-2000 1996-2000 (1)

2 unchanged sentences

TOWN CENTER OF NEW BRITAIN (Pennsylvania) 1,282 12,285 4,219 1,827 15,959 17,786 7,643 1969 6/29/2006 (1)

TOWSON RESIDENTIAL (FLATS @703) (Maryland) 2,328 — 20,092 2,328 20,092 22,420 2,703 2016-2017 3/8/2007 (1)

FEDERAL REALTY INVESTMENT TRUST

TROY HILLS (New Jersey) 3,126 5,193 33,191 5,865 35,645 41,510 25,966 1966 7/23/1980 (1)

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION

12 unchanged sentences

Improvements Total

TROY HILLS (New Jersey) 3,126 5,193 32,847 5,865 35,301 41,166 25,111 1966 7/23/1980 (1)

TWINBROOKE SHOPPING CENTRE (Virginia) 16,484 18,898 334 16,484 19,232 35,716 1,043 1977 9/2/2021 (1)

2 unchanged sentences

WESTGATE CENTER (California) 6,319 107,284 43,641 6,319 150,925 157,244 77,351 1960-1966 3/31/2004 (1)

WESTPOST (FORMERLY KNOWN AS PENTAGON ROW) (Virginia) — 2,955 111,100 — 114,055 114,055 61,422 1999 - 2002 1998 & 11/22/10 (1)

WHITE MARSH PLAZA (Maryland) 3,478 21,413 2,113 3,514 23,490 27,004 11,813 1987 3/8/2007 (1)

6 unchanged sentences

(1) Depreciation of building and improvements is calculated based on useful lives ranging from the life of the lease to 50 years.

FEDERAL REALTY INVESTMENT TRUST

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

3 unchanged sentences

Balance, December 31, 2019 $ 8,298,132

January 1, 2019 adoption of new accounting standard - See Note 2 ( 71,859 )

Additions during period

1 unchanged sentence

Improvements 473,679

Deduction during period—dispositions and retirements of property ( 201,105 )

Deductions during period

Impairment of property ( 68,484 )

Dispositions and retirements of property ( 159,897 )

Balance, December 31, 2020 8,582,870

2 unchanged sentences

Improvements 424,521

Deductions during period

Impairment of property ( 68,484 )

Dispositions and retirements of property ( 159,897 )

Deduction during period—dispositions and retirements of property ( 104,679 )

Balance, December 31, 2021 9,422,062

3 unchanged sentences

Deduction during period—dispositions and retirements of property

Dispositions and retirements of property ( 107,682 )

Deconsolidation of VIE ( 54,823 )

Balance, December 31, 2022 (1) $ 10,104,499

1 unchanged sentence

(1) For Federal tax purposes, the aggregate cost basis is approximately $ 9.0 billion as of December 31, 2022.

FEDERAL REALTY INVESTMENT TRUST

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

3 unchanged sentences

Balance, December 31, 2019 $ 2,215,413

January 1, 2019 adoption of new accounting standard - See Note 2 ( 18,173 )

Additions during period—depreciation and amortization expense 229,199

Deductions during period—dispositions and retirements of property ( 40,939 )

Balance, December 31, 2019 2,215,413

Additions during period—depreciation and amortization expense 229,199

Deductions during period

5 unchanged sentences

Balance, December 31, 2021 2,531,095

FEDERAL REALTY INVESTMENT TRUST

Additions during period—depreciation and amortization expense 266,877

Deductions during period

Dispositions and retirements of property ( 59,066 )

Deconsolidation of VIE ( 23,089 )

Balance, December 31, 2022 $ 2,715,817

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

MORTGAGE LOANS ON REAL ESTATE

25 unchanged sentences

Accordingly, the amount of the prior lien at December 31, 2022 is estimated.

FEDERAL REALTY INVESTMENT TRUST

FEDERAL REALTY INVESTMENT TRUST AND FEDERAL REALTY OP LP

MORTGAGE LOANS ON REAL ESTATE - CONTINUED

2 unchanged sentences

(In thousands)

Balance, December 31, 2018 and 2019 $ 30,429

Balance, December 31, 2019 $ 30,429

January 1, 2020 adoption of new accounting standard - See Note 2 ( 790 )

Additions during period:

Acquisition of loans, net of valuation adjustments 9,560

Acquisition of loan, net of valuation adjustments 9,560

Issuance of loans 693

6 unchanged sentences

Balance, December 31, 2021 9,543

Deductions during period:

Valuation adjustments ( 44 )

Collection and satisfaction of loans ( 43 )

Balance, December 31, 2022 $ 9,456

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-K

Item 9A. Controls and Procedures