What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-21 compared with 2022-02-15 · 170 added, 129 removed, 363 unchanged (45% of the section changed)

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• Maintaining a flexible capital structure;

• Enhancing environmental, social and governance practices and standards.

• Enhancing our environmental, social and governance practices and standards.

Current Strategy and Outlook

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We believe these conditions create favorable demand characteristics for grocery-anchored and necessity-based essential retail centers, which will position us to capitalize on potential future rent increases while benefiting from sustained occupancy at our centers.

Our strategically located regional field offices are within a two-hour drive of 90% of our properties which affords us the ability to respond to the needs of our tenants and provides us with in-depth local market knowledge.

Our strategically located regional field offices are within a two-hour drive of over 95% of our properties which affords us the ability to respond to the needs of our tenants and provides us with in-depth local market knowledge.

We believe that our Sun Belt portfolio of high quality grocery-anchored assets is a distinct differentiator for us in the marketplace.

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Historically, management has evaluated our financial condition and operating performance by focusing on the following financial and non-financial indicators, discussed in further detail herein:

• Net Operating Income ("NOI") and Same Property NOI, supplemental non-GAAP measures;

• NAREIT Funds From Operations ("NAREIT FFO") Applicable to Common Shares and Dilutive Securities, a supplemental non-GAAP measure;

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• Cash flow from operations as determined in accordance with GAAP;

• Net Operating Income ("NOI") and Same Property NOI, supplemental non-GAAP measures;

• Economic and leased occupancy and rental rates;

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• Liquidity levels.

Impact of the COVID-19 Pandemic on the Company's Business and Financial Statements

The impact of the pandemic was and continues to be related to a portion of our tenants' ability to make their future rental payments in a timely fashion or at all.

We have been working with these tenants to collect rental payments to which we are entitled.

At this time, given the uncertainty related to variants of the virus, we are unable to predict whether cases of COVID-19 in our markets will decrease, increase, or remain the same, whether the approved COVID-19 vaccines will be effective against the virus and new variants of the virus, and whether local governments will mandate closures of our tenants' businesses or implement other restrictive measures on their and our operations in the future in response to a resurgence of the pandemic.

We have taken and will continue to consider a number of measures to mitigate the impact of the pandemic on our business and financial condition.

We continue to believe that the long-term prospects for our business remain strong despite the uncertainty related to the new variants of COVID-19.

Tenant Assistance Efforts and Deferred Rental Payments

As of December 31, 2021, we have granted approximately $5.8 million of rental payment deferrals on a cumulative basis since the start of the pandemic, including our proportionate share of IAGM, with contractual payment terms through the year ending December 31, 2024.

During the year ended December 31, 2021, deferred rental payments of $5.4 million, including our proportionate share of IAGM, became due;

we have collected $5.3 million of such deferred rental payments as of December 31, 2021.

In addition to collections of deferred rental payments, during the year ended December 31, 2021, we collected approximately $2.1 million of rent, including our proportionate share of IAGM, for which we previously recognized credit losses in 2020.

Highlights for the year ended December 31, 2021

New York Stock Exchange Listing

On October 12, 2021, our common stock began trading on the New York Stock Exchange ("NYSE") under the ticker symbol "IVT".

"Dutch Auction" Tender Offer

On October 12, 2021, in conjunction with the NYSE listing, we commenced a modified "Dutch Auction" tender offer (the "Tender Offer") to purchase for cash up to $100.0 million of its shares of common stock at a price not greater than $28.00 nor less than $25.00 per share, net to the seller in cash, less any applicable withholding of taxes and without interest.

The Tender Offer expired on November 8, 2021.

As a result of the Tender Offer, the Company accepted for purchase 4,000,000 shares of its common stock (which represented approximately 5.6% of the total number of shares of common stock outstanding as of November 8, 2021) at a purchase price of $25.00 per share, for an aggregate cost of $100.0 million, excluding related fees and expenses.

Aggregate fees and expenses of $3.3 million were recognized as reductions to common stock and additional paid-in capital.

On July 12, 2021, we purchased Prestonwood Town Center, a 233 thousand square foot grocery-anchored power center located in Dallas, Texas, from our unconsolidated joint venture, IAGM for a gross acquisition price of $52.8 million.

On September 2, 2021, we purchased a seven thousand square foot retail outparcel adjacent to Rio Pinar Plaza for a gross acquisition price of $1.9 million.

On July 20, 2021, we disposed of Kroger Tomball, a 74 thousand square foot grocery store located in Tomball, Texas, for a gross disposition price of $13.7 million and completed partial condemnations at four retail properties for a total gain on sale, net of $1.5 million.

On September 3, 2021, IAGM disposed of Westover Marketplace, a 243 thousand square foot retail property located in San Antonio, Texas, for a gross disposition price of $28.8 million and recognized a gain on sale of $0.4 million.

Our share of IAGM's gain on sale was $0.2 million.

On December 1, 2021, IAGM disposed of South Frisco Village, a 227 thousand square foot retail power center located in Frisco, Texas, for a gross disposition price of $32.6 million and recognized a gain on sale of $5.5 million.

Our share of IAGM's gain on sale was $3.0 million.

Revolving Credit Agreement

On September 22, 2021, we entered into an amendment to our unsecured revolving credit agreement (the "Amended Revolving Credit Agreement"), which provides for, among other things, an extension of the maturity of our $350.0 million unsecured revolving line of credit to September 22, 2025, with two six-month extension options.

Unsecured Term Loans

On September 22, 2021, we entered into an amendment to our $400.0 million unsecured term loan agreement (the "Amended Term Loan Agreement"), which provides for, among other things, an extension of the maturity and a reallocation of indebtedness under the two outstanding tranches of term loans thereunder.

The Amended Term Loan Agreement consists of a $200.0 million 5-year tranche maturing on September 22, 2026, and a $200.0 million 5.5-year tranche maturing on March 22, 2027.

Recent Developments

Acquisitions and Mortgage Assumptions

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

Date Property Grocer Anchor Metropolitan Area Square Feet Gross

Acquisition Price Assumption of Mortgage Debt

February 2, 2022 Shops at Arbor Trails Costco,

Whole Foods Market Austin-Round Rock, TX 357 $ 112,190 $ 31,500

February 2, 2022 Escarpment Village HEB Austin-Round Rock, TX 170 77,150 26,000

April 21, 2022 The Highlands of Flower Mound (a) Target Dallas-Fort Worth-Arlington, TX 175 38,000 22,880

May 4, 2022 Bay Landing The Fresh Market Cape Coral-Fort Myers, FL 63 10,425 —

June 10, 2022 Kyle Marketplace - Outparcel N/A Austin-Round Rock, TX — 705 —

October 28, 2022 Eastfield Village Food Lion Charlotte-Gastonia-Concord, NC 96 22,500 —

December 16, 2022 Stone Ridge Market (a) HEB Plus San Antonio, TX 219 58,100 —

Total 1,080 $ 319,070 $ 80,380

(a) We acquired these properties from our joint venture, IAGM.

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

Date Property Metropolitan Area Square Feet Gross

Disposition Price Gain on Sale

June 30, 2022 Centerplace of Greeley Denver, CO 152 $ 37,550 $ 25,147

June 30, 2022 Cheyenne Meadows Denver, CO 90 17,900 11,709

December 15, 2022 The Shops at Walnut Creek (a) Denver, CO 225 55,000 1,393

Total 467 $ 110,450 $ 38,249

(a) The property's buyer assumed a $28.6 million mortgage payable secured by the property.

We recognized a loss on debt extinguishment of $0.08 million related to the buyer's assumption.

IAGM Dispositions and Mortgage Payoffs

During the year ended December 31, 2022, IAGM disposed of the following properties:

Date Property Metropolitan Area Square Feet Gross

Disposition Price Gain (Loss) on Sale Our Share of Gain (Loss) on Sale

March 3, 2022 Price Plaza (a) Houston-Sugar Land-Baytown, TX 206 $ 39,100 $ 3,751 $ 2,063

April 21, 2022 The Highlands of Flower Mound (b) Dallas-Fort Worth-Arlington, TX 175 38,000 1,244 684

December 16, 2022 Stone Ridge Market (b)(c) San Antonio, TX 219 58,100 12,287 6,758

December 22, 2022 Stables Town Center I (d) Houston-Sugar Land-Baytown, TX 43 7,800 (244) (135)

Total 643 $ 143,000 $ 17,038 $ 9,370

(a) The property's buyer assumed a $17.8 million mortgage payable secured by the property.

(b) These properties were acquired by the Company.

(d) IAGM paid down $5.4 million of the senior secured pooled loan with proceeds from the sale.

Share Repurchase Program

On February 23, 2022, we established a share repurchase program (the "SRP") of up to $150.0 million of our outstanding shares of common stock.

The SRP may be suspended or discontinued at any time, and does not obligate us to repurchase any dollar amount or particular amount of shares.

As of December 31, 2022, we have not repurchased any common stock under the SRP.

On March 4, 2022, we paid off a $22.3 million mortgage payable at Pavilion at La Quinta using cash on hand and recognized a loss on debt extinguishment of $0.1 million.

On October 6, 2022, we paid off a $24.7 million mortgage payable secured by University Oaks Shopping Center with cash on hand and recognized a loss on debt extinguishment of $0.01 million.

On March 7, 2022,we established an at-the-market equity offering program (the "ATM Program") pursuant to which we may sell from time to time up to an aggregate of $250.0 million shares of our common stock.

In connection with the ATM Program, we may sell shares of our common stock to or through sales agents, or may enter into separate forward sale agreements with one of the agents, or one of their respective affiliates, as a forward purchaser.

As of December 31, 2022, the Company has not sold any common stock under the ATM Program.

Reduction of Authorized Shares

On April 28, 2022, we filed an amendment to our charter to decrease the number of authorized shares of common stock from 1,460,000,000 to 146,000,000, in proportion with the one-for-ten reverse stock split effected by the Company on August 5, 2021.

The authorized shares of preferred stock remain at 40,000,000.

The authorized shares of common stock have been retroactively adjusted within the accompanying consolidated financial statements to give effect to the reduction as of December 31, 2022.

Credit Agreements

On May 11, 2022, we transitioned our revolving credit agreement and term loan agreement from the London Inter-bank Offered Rate ("LIBOR") which repriced monthly ("1-Month LIBOR"), to a Secured Overnight Financing Rate ("SOFR") which reprices monthly ("1-Month Term SOFR").

On June 3, 2022, in connection with and upon effectiveness of the Note Purchase Agreement (as defined below) and in accordance with the terms of the Amended Term Loan Credit Agreement and Amended Revolving Credit Agreement, each of the administrative agents under such agreements released all of the subsidiary guarantors from their guaranty obligations that were previously made for the benefit of the lenders under such agreements.

On August 11, 2022, we issued $250.0 million aggregate principal amount of senior notes in a private placement, of which (i) $150.0 million are designated as 5.07% Senior Notes, Series A, due August 11, 2029 (the "Series A Notes") and (ii) $100.0 million are designated as 5.20% Senior Notes, Series B, due August 11, 2032 (the "Series B Notes" and, together with the Series A Notes, the "Notes") pursuant to a note purchase agreement (the "Note Purchase Agreement"), dated June 3, 2022, between the Company and the various purchasers named therein.

The Notes were issued at par in accordance with the Note Purchase Agreement and pay interest semiannually on February 11th and August 11th until their respective maturities.

We may prepay at any time all or any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of any series of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount prepaid plus accrued interest and a Make-Whole Amount (as defined in the Note Purchase Agreement).

The Notes will be required to be absolutely and unconditionally guaranteed by certain subsidiaries of the Company that guarantee certain material credit facilities of the Company.

Currently, there are no subsidiary guarantees of the Notes.

Our Retail Portfolio

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Same Property Retail Portfolio Summary

The following table summarizes the GLA, economic occupancy and ABR PSF of the properties included in our retail portfolio classified as same property for the years ended December 31, 2021 and 2020.

The properties classified as same property were owned for the entirety of both periods presented.

Properties classified as same property were owned for the entirety of both periods presented ("Same Properties").

The following table summarizes the GLA, economic occupancy and ABR PSF of Same Properties included in our retail portfolio for the years ended December 31, 2022 and 2021.

Retail Properties IAGM

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These tables do not include rent deferral lease amendments executed as a result of the impact of the COVID-19 pandemic.

In our Pro Rata Combined Retail Portfolio, we had GLA totaling 875 thousand square feet expiring during the year ended December 31, 2021, of which 784 thousand square feet was re-leased.

In our Pro Rata Combined Retail Portfolio, we had GLA totaling 1.63 million square feet expiring during the year ended December 31, 2022, of which 1.47 million square feet was re-leased.

This achieved a retention rate of approximately 90.2%.

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We generate substantially all of our earnings from property operations.

Since January 1, 2020, we have acquired three retail properties and disposed of two retail properties.

Since January 1, 2021, we have acquired seven retail properties and disposed of four retail properties.

The following table presents the changes in our income for the years ended December 31, 2022 and 2021.

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Total income $ 236,707 $ 211,979 $ 24,728

Lease income, net, for the year ended December 31, 2021, increased $14.4 million when compared to the same period in 2020, primarily as a result of net positive changes in credit losses and related reversals of $13.4 million, increased minimum rent of $1.3 million, increased recovery income of $2.1 million, and increased short-term lease income of $0.4 million, which were partially offset by decreased termination fee income of $0.8 million and net decreased GAAP rent adjustments of $2.0 million.

Lease income, net increased $25.6 million as a result of increases from properties acquired of $18.4 million, decreases from properties disposed of $3.3 million, and the following activity related to our Same Properties:

• $6.7 million of increased minimum rent attributable to increased occupancy levels and rental rates and $1.8 million of rent abatements in 2021 related to the COVID-19 pandemic,

• $2.1 million of increased recoveries associated with common area maintenance, insurance, and real estate taxes, primarily attributable to tax refunds reflected in 2021 tenant charges,

• $1.1 million of increased amortization of market lease intangibles and straight-line rent adjustments,

• $1.0 million of increased percentage rent attributable to grocers experiencing heightened sales volumes, and was partially offset by:

• $2.2 million of net changes in credit losses and related reversals primarily attributable to lump sum rent collections from our cash basis tenants in 2021 pertaining to prior period rent charges.

Other fee income decreased $1.0 million primarily as a result of real estate sales within IAGM.

The following table presents the changes in our operating expenses for the years ended December 31, 2022 and 2021.

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Total operating expenses $ 201,458 $ 209,204 $ (7,746)

Property operating expenses, for the year ended December 31, 2021, increased $4.9 million when compared to the same period in 2020, primarily as a result of increased recoverable expenses of $3.1 million principally relating to utilities, landscaping, and maintenance costs and increased non-recoverable expenses of $2.2 million principally relating to the completion of property projects and initiatives which were put on hold in 2020 during the onset of the COVID-19 pandemic, which were partially offset by decreased lease termination expenses of $0.4 million.

General and administrative expenses for the year ended December 31, 2021, increased $5.1 million when compared to the same period in 2020, primarily as a result of increased long-term incentive plan costs of $4.9 million and increased other compensation costs of $1.9 million, which were partially offset by decreased non-compensation costs of $1.7 million.

On February 23, 2021, the Company announced the expected retirement of its President and Chief Executive Officer in August 2021, which resulted in accelerated recognition of certain stock-based compensation expenses.

The Company also announced the appointment of certain executives in establishing a plan of succession.

Depreciation and amortization increased $7.8 million as a result of:

• $13.4 million of increases from properties acquired, and was partially offset by:

• $1.4 million of decreases from properties disposed, and

• $4.2 million of decreased in-place lease intangible amortization for our Same Properties.

Property operating expenses increased $7.5 million as a result of:

• $4.4 million of increased costs relating to repairs, maintenance, and landscaping for our Same Properties,

• $3.4 million of increases from properties acquired, and was partially offset by:

• $0.3 million of decreases from properties disposed.

Real estate taxes increased $1.6 million as a result of:

• $3.4 million of increased real estate taxes from properties acquired, and was partially offset by:

• $1.0 million of decreased real estate taxes from properties disposed, and

• $0.8 million of decreased real estate taxes for our Same Properties, primarily attributable to tax refunds.

General and administrative expenses decreased $4.9 million as a result of:

• $2.7 million of long-term incentive plan costs in 2021 related to the expected retirement of its former President and Chief Executive Officer and the appointment of certain executives in establishing a plan of succession,

• $1.2 million of decreased other compensation costs, and

• $1.0 million of decreased non-compensation costs.

During the year ended December 31, 2021, we recognized $19.8 million of expense relating to the direct listing of our common stock on the NYSE.

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2022 2021 Change, net

Other (expense) income

Other income (expense)

Interest expense, net $ (26,777) $ (16,261) $ (10,516)

Loss on extinguishment of debt (181) (400) 219

Provision for asset impairment — (9,002) 9,002

Gain on sale of investment properties, net 38,249 1,522 36,727

Equity in earnings (losses) of unconsolidated entities 6,398 (3,141) 9,539

Equity in earnings of unconsolidated entities 3,663 6,398 (2,735)

Other income and expense, net 2,030 606 1,424

Total other (expense) income, net $ (8,135) $ (28,357) $ 20,222

Total other income (expense), net $ 16,984 $ (8,135) $ 25,119

Interest expense, net

Interest expense, net, for the year ended December 31, 2021, decreased $2.5 million when compared to the same period in 2020, primarily as a result of fluctuations in our line of credit balances, declining 1-month LIBOR interest rates on our corporate credit facilities, and repaying total mortgages payable of $67.5 million across three retail properties, generating decreased interest expense of $1.2 million, $0.6 million and $0.7 million, respectively.

Interest expense, net, increased $10.5 million primarily as a result of:

• $5.0 million of increased interest expense generated from the private placement of our senior notes,

• $3.0 million of increased interest expense generated from the fluctuations in our line of credit balances and interest rates on our corporate credit facilities,

• $2.7 million of increased interest expense from the assumption of mortgages on Shops at Arbor Trails, Escarpment Village, and the Highlands of Flower Mound of $31.5 million, $26.0 million, and $22.9 million, respectively,

• $1.0 million of increased amortization of debt issuance costs, and was partially offset by:

• $1.2 million of decreased interest expense from the pay-off of mortgages on Pavilion at LaQuinta and University Oaks Shopping Center of $22.3 million, and $24.7 million, respectively.

Loss on extinguishment of debt

During the year ended December 31, 2022, we recognized an aggregate loss of $0.2 million on the extinguishment of total mortgages payable of $75.6 million on three retail properties.

During the year ended December 31, 2021, we recognized a loss of $0.4 million in connection with amending our corporate debt facilities.

During the year ended December 31, 2020, we recognized a loss of $2.5 million on the extinguishment of total mortgages payable of $26.3 million on two retail properties, primarily related to prepayment penalties.

Provision for asset impairment

During the year ended December 31, 2020, we identified one retail property that had a reduction in its expected hold period.

We recorded a provision for asset impairment of $9.0 million as a result of the executed sales contract price being lower than the property's carrying value.

This property was sold on May 1, 2020.

Gain on sale of investment properties, net

During the year ended December 31, 2022, we recognized a gain of $38.2 million on the sale of three retail properties.

During the year ended December 31, 2021, we recognized a gain of $1.5 million on the sale of one retail property and the completion of partial condemnations at four retail properties.

During the year ended December 31, 2020, we recognized a gain of $1.8 million on the sale of one retail property, partial sale of one retail property, and the completion of partial condemnations at three retail properties.

Equity in earnings (losses) of unconsolidated entities

Equity in earnings of unconsolidated entities for the year ended December 31, 2021, increased $9.5 million when compared to the same period in 2020, primarily as a result of decreased impairment charges of $6.0 million, increased gains on sales of properties of $3.2 million, and decreased interest expense of $1.0 million, which were partially offset by decreased earnings from property operations of $0.7 million.

Equity in earnings of unconsolidated entities

Equity in earnings of unconsolidated entities decreased $2.7 million primarily as a result of decreased earnings from property operations of $2.3 million and decreased gains on sales of properties of $1.3 million, which were partially offset by decreased interest expense of $0.9 million.

The aforementioned amounts represent our proportionate share of the activity.

Other income and expense, net

Under the federal legislation enacted on March 27, 2020, known as the CARES Act, certain limitations on the deductibility of net operating losses ("NOLs") enacted under prior federal tax legislation have been temporarily rolled back.

As a result of the anticipated NOL carryback claims for our taxable REIT subsidiaries, total additional tax benefits of $1.2 million were recognized during the year ended December 31, 2020.

The remaining $1.5 million decrease in other income and expense, net is the result of decreased interest income of $0.7 million and net decreases in all other income and expenses of $0.8 million.

Other income and expense, net increased $1.4 million primarily as a result of increased interest income earned on cash and cash equivalents.

Net Operating Income

We evaluate the performance of our retail properties based on NOI, which excludes general and administrative expenses, direct listing costs, depreciation and amortization, provision for asset impairment, other income and expense, net, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, equity in earnings (losses) from unconsolidated entities, lease termination income and expense, and GAAP rent adjustments (such as straight-line rent, above/below market lease amortization and amortization of lease incentives).

We evaluate the performance of our retail properties based on NOI, which excludes general and administrative expenses, direct listing costs, depreciation and amortization, provision for asset impairment, other income and expense, net, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, equity in earnings (losses) from unconsolidated entities, lease termination income and expense, and GAAP rent adjustments such as straight-line rent adjustments, amortization of market lease intangibles, and amortization of lease incentives ("GAAP Rent Adjustments").

We bifurcate NOI into Same Property NOI and NOI from other investment properties based on whether the underlying retail properties meet our same property criteria.

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A total of 51 wholly-owned retail properties met our Same Property criteria for the years ended December 31, 2022 and 2021.

The following table represents the reconciliation of net loss, the most directly comparable GAAP measure, to NOI and Same Property NOI for the years ended December 31, 2021 and 2020:

The following table presents the reconciliation of net income or loss, the most directly comparable GAAP measure, to NOI, Same Property NOI, and Pro Rata Same Property NOI for the years ended December 31, 2022 and 2021:

Year ended December 31,

2022 2021 Change, net

Net loss $ (5,360) $ (10,174) $ 4,814

Net income (loss) $ 52,233 $ (5,360) $ 57,593

Adjustments to reconcile to non-GAAP metrics:

Other income and expense, net (2,030) (606) (1,424)

Equity in (earnings) losses of unconsolidated entities (6,398) 3,141 (9,539)

Equity in earnings of unconsolidated entities (3,663) (6,398) 2,735

Interest expense, net 26,777 16,261 10,516

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Gain on sale of investment properties, net (38,249) (1,522) (36,727)

Provision for asset impairment — 9,002 (9,002)

Depreciation and amortization 94,952 87,143 7,809

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Same Property NOI increased by $5.8 million, or 4.5%, when comparing the year ended December 31, 2022 to the same period in 2021, and was primarily a result of:

• net changes in credit losses and related reversals of $10.5 million,

• increased recovery income of $1.0 million,

• a net increase in short-term and percentage rent of $0.5 million, and was offset by:

• decreased minimum rent of $0.6 million,

• increased recoverable expenses of $2.5 million, and

• increased non-recoverable expenses of $2.1 million.

During the year ended December 31, 2021, we recognized credit losses relating to billed rent and recoveries of $2.2 million and reversals of credit losses of $4.9 million.

During the year ended December 31, 2020, we recognized credit losses relating to billed rent and recoveries of $9.1 million and reversals of credit losses of $1.3 million.

Credit losses principally relate to our assessment of how the COVID-19 pandemic may impact our tenants' ability to make future rental payments.

The increase in real estate taxes and recoverable operating expenses, net of associated recoveries, primarily reflects leases which either fix or limit recoveries.

The increase in short-term and percentage rent primarily reflects increased short-term leasing arrangements and additional rent from grocers experiencing heightened sales volumes.

The decrease in minimum rent primarily reflects our efforts to renegotiate certain leases of tenants markedly impacted by the COVID-19 pandemic, which often resulted in rent reductions or partial rent abatements.

In line with our improved results of operations, certain non-recoverable operating expenses relating property projects and initiatives were completed during 2021.

These projects and initiatives had been put on hold during 2020 due to the onset of the COVID-19 pandemic.

• $6.7 million of increased minimum rent attributable to increased occupancy levels and rental rates and $1.8 million of rent abatements in 2021 related to the COVID-19 pandemic,

• $1.0 million of increased percentage rent attributable to grocers experiencing heightened sales volumes,

• $1.1 million of decreased real estate tax expense, net of associated recoveries, primarily attributable to tax refunds, and was offset by:

• $2.2 million of net changes in credit losses and related reversals primarily attributable to lump sum rent collections from our cash basis tenants in 2021 pertaining to prior period rent charges,

• $1.4 million of increased operating expense, net of associated recoveries, primarily attributable to increased repairs, maintenance, and landscaping costs, and

• $1.2 million of increased non-recoverable operating expenses, primarily attributable to tenant lease negotiations.

Funds From Operations

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Our NAREIT FFO is net income (or loss) in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable real property.

Adjustments for unconsolidated joint ventures are calculated to reflect our proportionate share of the joint venture's funds from operations on the same basis.

Adjustments for IAGM are calculated to reflect our proportionate share of the joint venture's funds from operations on the same basis.

In calculating NAREIT FFO, impairment charges of depreciable real estate assets are added back even though the impairment charge may represent a permanent decline in value due to the decreased operating performance of the applicable property.

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In that regard, we use Core FFO as an input to our compensation plan to determine cash bonuses and measure the achievement of certain performance-based equity awards.

Our adjustments to NAREIT FFO to arrive at Core FFO include removing the impact of (i) amortization of debt premiums, discounts, and financing costs, (ii) amortization of above and below-market leases and lease inducements, (iii) depreciation and amortization of corporate assets, (iv) straight-line rent adjustments, (v) gains (or losses) resulting from debt extinguishments (vi) other non-operating revenue and expense items which, in our judgement, are not pertinent to measuring on-going operating performance, (vii) adjustments for unconsolidated joint ventures to reflect our share of the ventures' Core FFO on the same basis.

Our adjustments to NAREIT FFO to arrive at Core FFO include removing the impact of (i) amortization of debt discounts and financing costs, (ii) amortization of market-lease intangibles and inducements, net, (iii) depreciation and amortization of corporate assets, (iv) straight-line rent adjustments, (v) gains (or losses) resulting from debt extinguishments (vi) other non-operating revenue and expense items which, in our judgement, are not pertinent to measuring on-going operating performance, (vii) adjustments for IAGM to reflect our share of the ventures' Core FFO on the same basis.

Our calculation of Core FFO Applicable to Common Shares and Dilutive Securities does not consider any capital expenditures.

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Year ended December 31,

Net loss $ (5,360) $ (10,174)

Net income (loss) $ 52,233 $ (5,360)

Depreciation and amortization related to investment properties 94,142 86,257

Provision for asset impairment — 9,002

Gain on sale of investment properties, net (38,249) (1,522)

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NAREIT FFO Applicable to Common Shares and Dilutive Securities 111,976 84,088

Amortization of above and below-market leases and lease inducements, net (4,318) (7,060)

Amortization of market-lease intangibles and inducements, net (5,589) (4,318)

Straight-line rent adjustments, net (3,815) (2,805)

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Weighted average common shares outstanding - diluted 67,525,935 71,072,933

Net loss per common share $ (0.08) $ (0.14)

Net income (loss) per common share $ 0.77 $ (0.08)

Per share adjustments for NAREIT FFO Applicable to Common Shares and Dilutive Securities 0.89 1.26

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(b) Adjusting items, net, are primarily loss on extinguishment of debt, amortization of debt discounts and financing costs, depreciation and amortization of corporate assets, and non-operating income and expenses, net, which includes items which are not pertinent to measuring on-going operating performance, such as miscellaneous and settlement income.

(c) Represents our share of amortization of above and below-market leases and lease inducements, net, straight-line rent adjustments, net and adjusting items, net related to IAGM.

(c) Represents our share of amortization of market lease intangibles and lease inducements, net, straight-line rent adjustments, net and adjusting items, net related to IAGM.

(d) For purposes of calculating non-GAAP per share metrics, the same denominator is used as that which would be used in calculating diluted earnings per share in accordance with GAAP.

For the year ended December 31, 2021 and 2020, unvested restricted shares were antidilutive and therefore excluded from the denominator in the diluted earnings per share calculation in accordance with GAAP.

For the year ended December 31, 2021, unvested restricted shares were antidilutive and therefore excluded from the denominator in the diluted earnings per share calculation in accordance with GAAP.

Critical Accounting Estimates

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Any future determination to pay distributions will be at the discretion of our Board and will depend on our financial condition, capital requirements, restrictions contained in current or future financing instruments, and such other factors as our Board deems relevant.

In August 2021, our Board approved an increase to our annual distribution rate effective for the quarterly distribution paid in January 2022.

In November 2022, our Board approved an increase to our annual distribution rate effective for the quarterly distribution paid in April 2023.

Our primary sources and uses of capital are as follows:

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• Proceeds from mortgage loan borrowings on properties;

• Proceeds from corporate borrowings;

• Interest earned on cash and cash equivalents.

• To invest in properties;

• Proceeds from corporate borrowings and debt financings;

• Proceeds from any ATM Program activities;

• Proceeds from our Series A and Series B Notes offering.

• To invest in properties or fund acquisitions;

• To fund development, re-development, maintenance and capital expenditures or leasing incentives;

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• To pay our operating expenses;

• To repurchase shares of our common stock;

• To fund other general corporate uses.

We believe our recent listing on the NYSE will facilitate supplementing these sources by selling equity securities of the Company if and when we believe appropriate to do so.

We believe our listing on the NYSE will facilitate supplementing these sources by selling equity securities of the Company if and when we believe appropriate to do so.

Also, from time to time, we may seek to acquire additional amounts of our outstanding common stock through cash purchases or exchanges for other securities.

Such purchases or exchanges, if any, will depend on our liquidity requirements, contractual restrictions, and other factors.

In the first quarter of 2022, we entered into an ATM Program pursuant to which we may sell shares of our common stock up to an aggregate purchase price of $250.0 million.

As of December 31, 2022, the Company has not sold any common stock under the ATM Program.

In the second quarter of 2022, we received an inaugural investment-grade credit rating from Fitch Ratings, Inc.

On August 11, 2022, the Company issued $250.0 million aggregate principal amount of senior notes in a private placement, of which (i) $150.0 million are designated as 5.07% Senior Notes, Series A, due August 11, 2029 (the "Series A Notes") and (ii) $100.0 million are designated as 5.20% Senior Notes, Series B, due August 11, 2032 (the "Series B Notes" and, together with the Series A Notes, the "Notes") pursuant to the Note Purchase Agreement.

The Notes were issued at par in accordance with the Note Purchase Agreement and pay interest semiannually on February 11th and August 11th until their respective maturities.

Off Balance Sheet Arrangements

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Cash used in investing activities (144,461) (64,701) (79,760)

Cash used in financing activities (204,171) (82,073) (122,098)

Cash provided by (used in) financing activities 111,574 (204,171) 315,745

Decrease in cash, cash equivalents and restricted cash 92,908 (178,916) 271,824

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Cash provided by operating activities of $125.8 million and $90.0 million for the years ended December 31, 2022 and 2021, respectively, was generated primarily from income from property operations and operating distributions from IAGM.

Cash provided by operating activities decreased $4.2 million when comparing 2021 to 2020, primarily as a result of direct listing costs of $19.8 million in 2021, which was partially offset by our collection of deferred rental payments of $4.9 million, increased distributions from IAGM of $1.7 million, decreased interest expense of $2.5 million, and overall other increased cash from property operations of $6.5 million, inclusive of our property acquisitions and dispositions since January 1, 2020.

Cash provided by operating activities increased $35.8 million when comparing 2022 to 2021, primarily as a result of direct listing costs of $19.8 million in 2021, increased operating distributions from IAGM, general fluctuations in working capital, and acquisition activity in excess of disposition activity.

Since January 1, 2021, we have acquired seven retail properties and disposed of four retail properties.

Cash used in investing activities of $144.5 million for the year ended December 31, 2022, was primarily the result of:

• $235.0 million for acquisitions of investment properties,

• $15.4 million for capital expenditures and tenant improvements,

• $5.5 million for investment in development and re-development projects,

• $4.1 million for lease commissions and other leasing costs,

• $1.4 million for other investing cash outflows, and was partially offset by cash provided of

• $14.8 million from net proceeds received from the sale of investment properties.

• $33.2 million for capital investments and leasing costs,

• $1.2 million for other investing cash outflows, and was partially offset by:

• $77.5 million from net proceeds received from the sale of investment properties, and

• $47.4 million from distributions from unconsolidated entities.

Cash used in investing activities of $64.7 million for the year ended December 31, 2021, was primarily the result of:

• $53.1 million for acquisitions of investment properties,

• $12.9 million for capital expenditures and tenant improvements,

• $2.2 million for investment in development and re-development projects,

• $1.4 million for lease commissions and other leasing costs, and was partially offset by cash provided of

• $8.0 million from net proceeds received from the sale of investment properties, and

• $0.8 million from other investing cash inflows.

Cash used in financing activities of $204.2 million for the year ended December 31, 2021, was primarily the result of:

• $457.4 million for pay-offs of debt, principal payments of mortgage debt, and payment of loan fees and other deposits,

• $16.7 million for the repurchase of common stock under our share repurchase plan,

• $103.3 million for the repurchase of common stock through a tender offer,

• $55.6 million to pay distributions,

• $25.0 million for capital investments and leasing costs,

• $1.4 million for other investing cash outflows, and was partially offset by:

• $14.8 million from net proceeds received from the sale of investment properties.

Cash provided by financing activities of $111.6 million for the year ended December 31, 2022, was primarily the result of:

• $250.0 million from our issuance of senior notes, and

• $112.0 million drawn from our line of credit, which were partially offset by:

• $143.0 million repaid on our line of credit,

• $50.5 million for pay-offs of debt, principal payments of mortgage debt, and payment of loan fees and other deposits, and other financing activities,

• $55.3 million to pay distributions, and

• $1.6 million for the payment of tax withholdings for share-based compensation.

• $0.4 million for the payment of finance lease liabilities, and was partially offset by cash provided of

• $431.0 million from proceeds received under our unsecured credit agreements.

Cash used in financing activities of $204.2 million for the year ended December 31, 2021, was primarily the result of:

• $171.4 million for pay-offs of debt, debt prepayment penalties, principal payments of mortgage debt, and payment of loan fees and other deposits,

• $457.8 million for pay-offs of debt, debt prepayment penalties, principal payments of mortgage debt, payment of loan fees and other deposits, and other financing activities,

• $16.7 million for the repurchase of common stock under our share repurchase plan,

• $103.3 million for the repurchase of common stock through a tender offer,

• $55.6 million to pay distributions,

• $1.1 million for the payment of tax withholdings for share-based compensation,

• $0.2 million for other financing cash outflows, net, and was partially offset by cash provided of

• $1.8 million for the payment of tax withholdings for share-based compensation, which were partially offset by:

• $431.0 million from proceeds received under our unsecured credit agreements.

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Acquisitions and Dispositions of Real Estate Investments

In 2021, we acquired one retail property and an outparcel adjacent to an existing retail property.

In 2020, we acquired two retail properties and the underlying real estate of a grocery tenant adjacent to an existing retail property.

During the years ended December 31, 2021 and 2020, we invested net cash of approximately $53.1 million and $41.4 million, respectively, for these acquisitions.

In 2022, we acquired six retail properties and an outparcel adjacent to an existing retail property for an aggregate gross acquisition price of $319.1 million.

In 2021, we acquired one retail property and an outparcel adjacent to an existing retail property for an aggregate gross acquisition price of $54.7 million.

In 2022, we disposed of three retail properties for an aggregate gross disposition price of $110.5 million.

In 2021, we disposed of one retail property and completed partial condemnations at four retail properties for an aggregate gross disposition price of $15.0 million.

In 2020, we disposed of one retail property, completed a partial sale of one retail property, and completed partial condemnations at three retail properties for an aggregate gross disposition price of $8.5 million.

Distributions

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Mortgages Payable, Maturities

The following table shows the scheduled maturities for the Company's mortgages payable as of December 31, 2021, for each of the next five years and thereafter:

The following table reflects the scheduled maturities of the Company's mortgages payable as of December 31, 2022, for each of the next five years and thereafter.

Scheduled maturities by year:

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2023 $ 13,732

Thereafter 31,500

Total mortgages payable $ 109,812

Credit Agreements, Maturities

As of December 31, 2021, we had outstanding borrowings of $31.0 million under our revolving credit facility at an interest rate of 1.15%.

The following table shows the Company's outstanding borrowings under its unsecured term loans as of December 31, 2021.

The following table reflects the Company's outstanding borrowings under its unsecured term loans as of December 31, 2022.

Principal Balance Interest Rate Maturity Date

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$200.0 million 5.5 year - swapped to fixed rate 50,000 2.76% (a) March 22, 2027

$200.0 million 5.5 year - variable rate 100,000 1.2993% (b) March 22, 2027

$200.0 million 5.5 year - variable rate 100,000 1M SOFR + 1.30% (b)

March 22, 2027

Total unsecured term loans $ 400,000

(a) Interest rates reflect the fixed rates achieved through the Company's interest rate swaps.

(b) Interest rate reflects 1-Month LIBOR plus 1.20% effective December 2, 2021.

(b) As of December 31, 2022, 1-Month Term SOFR was 4.3581%.

Senior Notes, Maturities

The following table summarizes the Company's outstanding borrowings under its Senior Notes as of December 31, 2022.

Principal Balance Fixed Interest Rate Maturity Date

$150.0 million Series A

$ 150,000 5.07% August 11, 2029

$100.0 million Series B

100,000 5.20% August 11, 2032

Contractual Obligations

We have obligations related to our mortgage loans, term loan, and revolving credit facility as described in "Note 8.

We have obligations related to our mortgage loans, senior notes, term loans, and revolving credit facility as described in "Note 8.

Debt" in the consolidated financial statements.

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It is anticipated that our unconsolidated entity will be able to repay or refinance all of its debt on a timely basis.

The following table presents, on a consolidated basis, obligations and commitments to make future payments under debt obligations and lease agreements.

It excludes third-party debt associated with our unconsolidated joint venture and debt discounts that are not future cash obligations as of December 31, 2021.

The following table presents, on a consolidated basis, our obligations to make future payments under debt and lease agreements.

It excludes debt payable by our unconsolidated joint venture and debt discounts that are not future cash obligations as of December 31, 2022.

Payments due by year ending December 31,

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Total long term debt 45,009 45,856 51,916 226,606 242,227 320,232 931,846

Operating lease obligations (b) 152 513 575 456 460 1,740 3,896

Finance lease obligations (c) 279 21 — — — — 300

Operating leases (b) 565 628 511 517 529 1,308 4,058

Grand total $ 45,574 $ 46,484 $ 52,427 $ 227,123 $ 242,756 $ 321,540 $ 935,904

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(b) Includes leases on corporate office spaces.

Although inflation has been low in recent years and has had minimal impact on the operating performance of our shopping centers, it began to increase in the fourth quarter of 2021, together with consumer prices.

With respect to current economic conditions and governmental fiscal policy, inflation has become a greater risk.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis