What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-11-09 compared with 2020-08-13 · 327 added, 239 removed, 414 unchanged (58% of the section changed)

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Certain statements contained in this Quarterly Report on Form 10-Q (this “Report”) of Phillips Edison & Company, Inc.

(“we,” the “Company,” “our,” or “us”) other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995.

We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those Acts.

We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in the Acts.

Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “possible,” “initiatives,” “focus,” “seek,” “objective,” “goal,” “strategy,” “plan,” “potential,” “potentially,” “preparing,” “projected,” “future,” “long-term,” “once,” “should,” “could,” “would,” “might,” “uncertainty,” or other similar words.

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Securities and Exchange Commission (“SEC”).

Such statements include, but are not limited to, statements about our focus, plans, strategies, initiatives, and prospects;

statements about the COVID-19 pandemic, including its duration and potential or expected impact on our tenants, our business, and our estimated value per share;

statements about the duration or extent of the suspension of our distributions, share repurchase program, and dividend reinvestment program;

and statements about our future results of operations, capital expenditures, and liquidity.

Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation, (i) changes in national, regional, or local economic climates;

Such statements include, but are not limited to, (a) statements about our focus, plans, strategies, initiatives, and prospects;

(b) statements about the COVID-19 pandemic, including its duration and potential or expected impact on our tenants, our business, and our estimated value per share;

(c) statements about our intentions regarding the Tender Offer, a reverse stock split, our distributions, share repurchase program, and dividend reinvestment program;

and (d) statements about our future results of operations, capital expenditures, and liquidity.

Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation:

(i) changes in national, regional, or local economic climates;

(ii) local market conditions, including an oversupply of space in, or a reduction in demand for, properties similar to those in our portfolio;

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(viii) the concentration of our portfolio in a limited number of industries, geographies, or investments;

(ix) t he effects of the COVID-19 pandemic, including on the demand for consumer goods and services and levels of consumer confidence in the safety of visiting shopping centers as a result of the COVID-19 pandemic;

(ix) the effects of the COVID-19 pandemic, including on the demand for consumer goods and services and levels of consumer confidence in the safety of visiting shopping centers as a result of the COVID-19 pandemic;

(x) the measures taken by federal, state, and local government agencies and tenants in response to the COVID-19 pandemic, including mandatory business shutdowns, stay-at-home orders and social distancing guidelines;

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(xiv) our ability to implement cost containment strategies;

(xv) our and our tenants’ ability to obtain loans under the CARES Act or similar state programs;

(xv) our and our tenants’ ability to obtain loans under government programs;

(xvi) our ability to pay down, refinance, restructure, or extend our indebtedness as it becomes due;

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This business provides comprehensive real estate and asset management services to the Managed Funds.

As of September 30, 2020, we wholly-owned 283 real estate properties.

Additionally, we owned a 20% interest in NRP, a joint venture that owned six properties;

a 15% interest in GRP I, a joint venture that owned 17 properties;

and a 10% interest in GRP II, a joint venture that owned three properties.

On October 1, 2020, GRP I acquired GRP II.

Our ownership in the combined entity was adjusted upon consummation of the transaction, and we own approximately a 14% equity interest in GRP I as a result of the acquisition.

COVID-19 Strategy —During the first quarter of 2020, the COVID-19 pandemic began spreading globally, with the outbreak being classified as a pandemic by the World Health Organization on March 11, 2020.

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The following initiatives were enacted in response to the pandemic and remain in effect as of the date of this filing, unless otherwise noted:

We temporarily suspended stockholder distributions (see Note 9 for more detail);

We suspended the SRP for death, qualifying disability, or determination of incompetence, while our standard SRP remains suspended;

• We suspended stockholder distributions, after the March 2020 distribution (see Note 9 for more detail);

• We suspended the SRP for DDI;

• Our Compensation Committee approved a temporary 25% reduction to the base salary of our chief executive officer;

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and a temporary 10% reduction to board members’ base compensation for the 2020-2021 term;

We have implemented expense reductions at the property and corporate levels, including the temporary reductions in executive salaries and director compensation, and reductions to our workforce and travel costs;

Our capital investments have been prioritized to support the reopening of our neighbors and new leasing activity, or deferred if possible;

• We have implemented expense reductions at the property and corporate levels, including reductions to our workforce and travel costs;

• Our capital investments have been prioritized to support the reopening of our tenants (which we refer to as a “neighbor” or our “neighbors”) and new leasing activity, or deferred if possible;

• We borrowed $200 million on our revolving credit facility in April 2020 to ensure that we were able to meet our operating needs for a sustained period.

Our rent and recovery collections during the second quarter, combined with the above initiatives, sufficiently funded our short-term operating needs and allowed us to repay in full the outstanding balance on our revolving credit facility in June 2020.

Our rent and recovery collections during the second quarter, combined with the above initiatives, sufficiently funded our short-term operating needs and provided enough stability to allow us to repay in full the outstanding balance on our revolving credit facility in June 2020;

In May 2020, many state governments began lifting, in whole or in part, the “stay-at-home” mandates, effectively removing or lessening the limitations on travel and allowing many businesses to reopen in full or limited capacity.

Some states and localities have temporarily reinstated certain mandates in response to increasing reported cases of COVID-19.

The impact these measures and the resulting consumer behavior are having on our portfolio has evolved throughout the second quarter, and we expect that it will continue to do so.

Our management team has determined the following are key indicators of recovery for our portfolio and is executing a strategy to guide our tenants (which we refer to as a “neighbor” or our “neighbors”) through these phases (all statistics are approximate;

ABR, Gross Leasable Area or “GLA”, and rent and recovery collections include the prorated portion attributable to properties owned through our joint ventures):

Assisting Neighbors in Reopening —Our wholly-owned properties and those owned through our joint ventures contained approximately 5,600 occupied neighbor spaces as of August 10, 2020 .

The impact these measures and the resulting consumer behavior are having on our portfolio has evolved throughout the second and third quarters, and we expect that it will continue to do so.

Our management team has determined the following are key indicators of recovery for our portfolio and is executing a strategy to guide our neighbors through these phases (all statistics are approximate and include the prorated portion attributable to properties owned through our joint ventures):

• Assisting Neighbors in Reopening —Our wholly-owned properties and those owned through our joint ventures contained approximately 5,600 occupied neighbor spaces as of November 4, 2020.

At the peak of the pandemic-related closure activity, temporary closures reached 37% of all neighbor spaces, totaling 27% of our ABR and 22% of our GLA.

of the neighbor spaces that temporarily closed, 88% , totaling 89% of our ABR and 90% of our GLA, have since reopened.

As of November 4, 2020, 98% of our occupied tenant spaces, totaling 99% of our ABR and GLA, are open for business.

We believe that the best way to ensure that we receive monthly payment of rent and other amounts due is to first have neighbors open and operating.

In order to facilitate communication with our neighbors, we launched PECO Connect TM , a webpage designed to provide resources, information, and tools to assist our neighbors in reopening as states lift “stay-at-home” requirements and other restrictions.

In order to facilitate communication with our neighbors, we launched PECO Connect TM , a webpage designed to provide resources, information, and tools to assist our neighbors in reopening as states lifted “stay-at-home” requirements and other restrictions.

Resources made available through PECO Connect include, but are not limited to:

the implementation of our Front Row To-Go TM program;

a digital tool kit providing various marketing options, industry guides and blueprints to facilitate effective communication between our neighbors and their customers;

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The CARES Act was intended to provide economic relief and stimulus to taxpayers and businesses in order to mitigate the economic impact of the pandemic, and provided an estimated $2.7 trillion to combat the COVID-19 pandemic and stimulate the economy through the provision of government loans and grants to affected individuals and businesses.

As more of our neighbors continue to reopen, we are seeing our collections improve as a result.

The table below shows the improvement since April, the month in which we began to see decreased collections resulting from the COVID-19 pandemic and related neighbor impacts:

% of Rent and Recoveries Collected (1)

% of ABR Open (1)

All Neighbor Spaces

Grocer Neighbor Spaces

Collections for April, May, June, and July 2020 include any amounts billed for those respective months that were received through August 10, 2020 .

For other statistics, April, May, June, and July 2020 are approximate as of April 30, 2020, May 31, 2020, June 30, 2020, and July 31, 2020, respectively.

The total number of neighbor spaces that are or were temporarily closed in connection with COVID-19 is approximately 2,100 .

As of August 10, 2020 , 97% of total neighbor spaces, or 98% of our portfolio ABR, was open.

Establishing Payment Plans —We believe substantially all neighbors, including those that were required to temporarily close under governmental mandates, are contractually obligated to continue with their rent payments as documented in our lease agreements with them.

We further believe that it is best to begin negotiation of relief only once a neighbor has reopened, and we have continued to see payments made toward rent and recovery charges owed during the second quarter.

As of August 10, 2020 , we have executed relief agreements for approximately 240 neighbor spaces, primarily in the form of short-term payment plans without a reduction in amounts owed to us.

These relief agreements totaled approximately $3.8 million , or 1.0% of portfolio ABR, and the weighted-average term over which we expect to receive payment on executed payment plans is less than twelve months.

As our neighbors have reopened, we have seen our collections continue to improve, including those related to the second quarter.

As of November 4, 2020, total collections for the second quarter improved to 90%, and third quarter collections were 94%.

Additionally, our collections for October 2020 were approximately 94%.

As of November 4, 2020, 87% of our neighbors are paying their rent in full.

• Establishing and Collecting on Payment Plans —We believe substantially all neighbors, including those that were required to temporarily close under governmental mandates, are contractually obligated to continue with their rent payments as documented in our lease agreements with them.

We further believe that it is best to begin negotiation of relief only once a neighbor has reopened, and we have continued to see payments made toward rent and recovery charges owed.

As of November 4, 2020, we have executed payment plans with our neighbors agreeing to defer approximately $4.3 million in rent and related charges, and we had granted rent abatements totaling approximately $2.0 million.

These payment plans and rent abatements represented 1.1% and 0.5% of portfolio ABR, respectively, and the weighted-average term over which we expect to receive payment on executed payment plans is approximately eight months.

We are in negotiations with additional neighbors, which we believe will lead to more neighbors repaying their past due charges.

We will continue to work with neighbors on establishing plans to repay past due amounts, and will monitor the impact of such payment plans on our results of operations in future quarters.

Collecting on Payment Plans —The final measure of recovery for our portfolio is to collect the past due amounts under the terms negotiated with our neighbors.

Whether we are ultimately able to collect these amounts will be determined

by a number of factors, many of which are outside our control, especially the impact of the COVID-19 pandemic on the overall economy and each of our neighbors.

Portfolio and Leasing Statistics —Below are statistical highlights of our wholly-owned portfolio:

June 30, 2020

The final measure of recovery for our portfolio is to collect past due amounts under the terms negotiated with our neighbors.

We cannot guarantee that we will ultimately be able to collect these amounts.

On November 4, 2020, our Board reinstated monthly stockholder distributions beginning December 2020 to stockholders of record as of December 28, 2020, payable on January 7, 2021.

Additionally, the Board approved a Tender Offer commencing on November 10, 2020 for up to 4.5 million shares of our outstanding common stock at a price of $5.75 per share, for a total value of approximately $26 million.

This price is lower than our current EVPS of $8.75, reflecting the Board’s acknowledgment that the share prices of our publicly-traded peers in the shopping center REIT sector have declined significantly below their respective estimated net asset values, primarily as a result of the ongoing market uncertainty caused by the COVID-19 pandemic.

Accordingly, they believe that if our shares were listed on a national securities exchange, the price of our shares of common stock might similarly trade at a discount to our EVPS.

We expect to restart share repurchases for DDI at $5.75 per share, but no shares will be repurchased until at least 10 business days after completion of the Tender Offer (see Note 9 for more detail).

The SRP with respect to standard repurchases will remain suspended.

COVID-19 Operational Impact —During the COVID-19 pandemic, we have been closely monitoring the status of our neighbors to identify those who potentially pose a credit risk in order to appropriately account for the impact to revenue and in order to quickly take action when a neighbor was ultimately unable to remain in a space.

The current economic environment has increased the uncertainty of collecting rents from a number of our neighbors.

For neighbors with a higher degree of uncertainty, we may not record revenue for amounts billed until the cash is received.

Based on our analysis, no individual neighbor category was deemed to be entirely non-creditworthy as of September 30, 2020;

however, we continue to evaluate each neighbor’s creditworthiness on an individual basis.

For the three and nine months ended September 30, 2020, inclusive of the prorated portion attributable to properties owned through our joint ventures, we had $5.3 million and $20.3 million, respectively, in billings that will not be recognized as revenue until cash is collected or the neighbor resumes payment and is considered creditworthy.

As of September 30, 2020, this represented approximately 7% of out of nearly 5,600 total neighbors in our entire portfolio.

Additionally, certain of our neighbors have entered into bankruptcy proceedings.

While some of these cases have already been resolved, with the assumption or rejection of the lease already reflected in our results, in some cases these claims have yet to be resolved, and as such, the potential fallout is not yet reflected in our occupancy rate or ABR metrics.

We believe that neighbors in the bankruptcy process represent an exposure of only 1.2% of our total portfolio ABR as of September 30, 2020.

We have included our assessment of the impact of these bankruptcies in our estimate of rent collectability, which impacted recorded revenue, as noted previously.

Portfolio and Leasing Statistics —Below are statistical highlights of our wholly-owned portfolio as of September 30, 2020 and 2019:

September 30, 2020 September 30, 2019

Number of properties 283 294

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Leased % of rentable square feet:

Total portfolio spaces 95.3 % 95.0 %

Anchor spaces 98.3 % 98.1 %

Inline spaces 89.5 % 89.2 %

Average remaining lease term (in years) (1)

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(1) The average remaining lease term in years excludes future options to extend the term of the lease.

The following table details information for our joint ventures, which is the basis for determining the prorated information included in the subsequent tables as of June 30, 2020 (dollars and square feet in thousands):

June 30, 2020

Joint Venture

Ownership Percentage

Number of Properties

The following table details information for our joint ventures, which is the basis for determining the prorated information included in the subsequent tables as of September 30, 2020 (dollars and square feet in thousands):

September 30, 2020

Joint Venture Ownership Percentage Number of Properties ABR (1)

Necessity Retail Partners 20% 6 $ 10,330 698

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Grocery Retail Partners II 10% 3 3,841 312

We calculate ABR as monthly contractual rent as of June 30, 2020 , multiplied by 12 months.

(1) We calculate ABR as monthly contractual rent as of September 30, 2020, multiplied by 12 months.

(2) GLA is defined as the portion of the total square feet of a building that is available for leasing.

Lease Expirations —The following chart shows, on an aggregate basis, all of the scheduled lease expirations after June 30, 2020 for each of the next ten years and thereafter for our wholly-owned properties and the prorated portion of those owned through our joint ventures:

Lease Expirations —The following chart shows, on an aggregate basis, all of the scheduled lease expirations after September 30, 2020 for each of the next ten years and thereafter for our wholly-owned properties and the prorated portion of those owned through our joint ventures:

Our ability to create rental rate growth generally depends on our leverage during new and renewal lease negotiations with prospective and existing neighbors, which typically occurs when occupancy at our centers is high or during periods of economic growth and recovery.

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The number of our neighbor spaces that temporarily closed as a result of the COVID-19 pandemic peaked in April 2020 and has significantly decreased as states began to lift in full or in part “stay-at-home” mandates in May 2020.

Certain neighbors remain temporarily closed, have since closed after reopening, are limiting the number of customers allowed in their locations, or have modified their operations in other ways that may impact their profitability, either as a result of government mandates or self-elected efforts to reduce the spread of COVID-19.

Certain neighbors remain temporarily closed, have since closed after reopening, are limiting the number of customers allowed in their stores, or have modified their operations in other ways that may impact their profitability, either as a result of government mandates or self-elected efforts to reduce the spread of COVID-19.

Some states and localities have temporarily reinstated certain mandates in response to increasing reported cases of COVID-19.

These actions could result in increased permanent store closings and could reduce the demand for leasing space in our shopping centers and result in a decline in average rental rates on expiring leases.

As of June 30, 2020 , our average rental rates on new leases have exceeded the average rental rates on expiring leases and our occupancy remained flat as compared to December 31, 2019 .

As of September 30, 2020, our average rental rates on new leases have exceeded the average rental rates on expiring leases and our occupancy remained flat as compared to December 31, 2019 .

We anticipate increased volatility in new and renewal rental rates until the business environment becomes more stable.

For our wholly-owned properties and the prorated share of those owned through our joint ventures, subsequent to June 30, 2020 , we renewed approximately 0.3 million total square feet and $3.5 million of total ABR of future expiring leases.

This includes six anchor lease renewals, some of which were pursuant to the exercise of an option to extend the lease.

For our wholly-owned properties and the prorated share of those owned through our joint ventures, subsequent to September 30, 2020, we renewed approximately 0.2 million total square feet and $3.8 million of total ABR of future expiring leases.

This includes three anchor lease renewals, one of which was pursuant to the exercise of an option to extend the lease.

See the section below titled Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Leasing Activity for further discussion of leasing activity.

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Regional neighbors are defined as those neighbors that have at least three locations in fewer than three states.

The following charts present the composition of our portfolio, including our wholly-owned properties and the prorated portion of those owned through our joint ventures, by neighbor type as of June 30, 2020 :

The following charts present the composition of our portfolio by neighbor industry as of June 30, 2020 :

The following charts present the composition of our portfolio by neighbor industry as of September 30, 2020:

We estimate that approximately 51% of our ABR, including the pro rata portion attributable to our properties owned through our joint ventures, is from retail and service businesses generally deemed essential under most state and local mandates issued in response to the COVID-19 pandemic.

The composition of our portfolio as a percentage of ABR is as follows:

June 30, 2020

September 30, 2020

Essential Retail and Services:

Grocery 35.9 %

Dollar stores 2.3 %

Pet supply 2.2 %

Medical 1.8 %

Hardware/Automotive 1.6 %

Wine, beer, and liquor 1.3 %

Pharmacy 1.0 %

Other essential 2.8 %

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Quick service 9.5 %

Full service 5.9 %

Total restaurants 15.4 %

Other Retail and Services:

Services 16.3 %

Soft goods 12.7 %

Fitness 3.2 %

Entertainment 1.1 %

Total other retail and services 33.3 %

Total ABR 100.0 %

(1) Includes neighbors that we believe are considered to be essential retail and service businesses but that may have temporarily closed due to decreases in foot traffic and customer patronage as a result of “stay-at-home” mandates and social distancing guidelines implemented in response to the COVID-19 pandemic.

The following table presents our top twenty neighbors by ABR, including our wholly-owned properties and the prorated portion of those owned through our joint ventures, as of June 30, 2020 (dollars and square feet in thousands):

June 30, 2020

Leased Square Feet

% of Leased Square Feet

Number of Locations (2)

The following table presents our top twenty neighbors by ABR, including our wholly-owned properties and the prorated portion of those owned through our joint ventures, as of September 30, 2020 (dollars and square feet in thousands):

September 30, 2020

ABR % of ABR Leased Square Feet % of Leased Square Feet Number of Locations (2)

Kroger $ 27,281 7.0 % 3,467 11.3 % 65

Publix 22,021 5.6 % 2,241 7.3 % 56

Ahold Delhaize 17,496 4.5 % 1,278 4.2 % 25

Albertsons-Safeway 16,579 4.2 % 1,588 5.2 % 30

Sprouts Farmers Market

Walmart 8,932 2.3 % 1,770 5.8 % 13

Giant Eagle 8,147 2.1 % 823 2.7 % 12

TJX Companies 4,979 1.3 % 428 1.4 % 15

Southeastern Grocers

Sprouts Farmers Market 4,885 1.2 % 334 1.1 % 11

Dollar Tree 4,047 1.0 % 423 1.4 % 44

Raley's 3,884 1.0 % 253 0.8 % 4

SUPERVALU 3,455 0.9 % 376 1.2 % 7

Subway Group 3,052 0.8 % 125 0.4 % 90

Schnuck's 3,025 0.8 % 329 1.1 % 5

Anytime Fitness, Inc.

2,694 0.7 % 179 0.6 % 38

Southeastern Grocers 2,626 0.7 % 291 0.9 % 8

Save Mart 2,619 0.7 % 309 1.0 % 6

Lowe's 2,407 0.6 % 371 1.2 % 4

Kohl's Corporation 2,255 0.6 % 365 1.2 % 4

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Petco Animal Supplies, Inc.

2,104 0.4 % 127 0.3 % 11

$ 144,703 37.0 % 15,195 49.5 % 450

(1) Neighbors are grouped by parent company and may represent multiple subsidiaries and banners.

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Results of Operations

Impact of the COVID-19 Pandemic

The COVID-19 pandemic did not significantly impact our results of operations for the first quarter of 2020.

In the second quarter, we noted significant impacts to rental income, including our collectability reserves.

While our overall collections in the second quarter were lower than previous periods, we have seen steady improvement in each month since April, which corresponds with the number of neighbors who have reopened their business.

At the same time, the COVID-19 pandemic has increased the uncertainty of collecting rents from a number of our neighbors.

For neighbors with a higher degree of uncertainty, we may not record revenue for amounts billed until the cash is received.

Based on our analysis, no individual neighbor category was deemed to be entirely non-creditworthy.

We continue to perform our analysis by examining each individual neighbor.

For the three and six months ended June 30, 2020 , we had $12.0 million and $14.8 million , respectively, in revenue that will not be recognized until cash is collected or the neighbor resumes payment and is considered creditworthy.

As of June 30, 2020, this represented approximately 8% of out of nearly 5,100 total neighbors.

This has resulted in reduced revenues for the quarter, and our estimates around collectability will likely continue to create volatility in our earnings at least in the short term.

A portion of these neighbors may eventually vacate their space, and we may see a decline in occupancy in future quarters.

The duration of any decline will depend on many factors and cannot be estimated at this time.

In our efforts to maximize collections in the near term while also supporting our neighbors as they operate through this pandemic, we have begun negotiating rent relief primarily in the form of payment plans and deferrals on rent and recovery charges, which allow for changes in the timing of payments, but not the total amount of consideration due to us under the lease.

In a limited number of instances, we may also agree to waive certain charges due to us under the lease.

During the three months ended June 30, 2020 , our negotiated rent relief was minimal.

As more neighbors resume paying their full monthly charges, we will enter into additional discussions on how to recover outstanding amounts.

The ultimate impact on revenue in the future cannot be determined at this time, but may ultimately be the result of negotiated rental revenue reductions and changes in the timing of cash payments, which may or may not be material.

The negative economic impact of the COVID-19 pandemic has placed significant financial strain on certain businesses, leading to uncertainty in their ability to continue operations.

As such, we have received notification of entry into bankruptcy proceedings from several of our neighbors, representing an exposure of only 1.1% of our total ABR.

However, some of these neighbors may assume their leases during the course of the bankruptcy proceedings, which would further lower our exposure.

We have included our assessment of the impact of these bankruptcies in our estimate of rent collectability, which impacted recorded revenue, as noted previously.

Known Trends and Uncertainties of the COVID-19 Pandemic

The COVID-19 pandemic has resulted in reduced revenues for the second and third quarters, and our estimates around collectability will likely continue to create volatility in our earnings.

The total impact on revenue in the future cannot be determined at this time.

The duration of the pandemic and mitigating measures, and the resulting economic impact, has caused some of our neighbors to permanently vacate their spaces and/or not renew their leases, and we may have difficulty leasing these spaces on the same or better terms or at all, and/or incur additional costs to lease vacant spaces, which may reduce our occupancy rates in the future and ultimately reduce our revenue.

Extended periods of vacancy or reduced revenues may trigger impairments of our real estate assets.

Additionally, these factors may impact disposition activity by decreasing demand and negatively impacting capitalization rates.

Our disposition and acquisition activity has been reduced as a result of the pandemic during 2020.

The ongoing impact of the COVID-19 pandemic and the resulting economic downturn will likely continue to be significant to our results of operations for the remainder of 2020 and potentially beyond as a result of a number of factors outside of our control.

These factors include, but are not limited to, overall economic conditions on both a macro and micro level, including consumer demand as well as retailer demand for space within our shopping centers;

These factors include, but are not limited to:

overall economic conditions on both a macro and micro level, including consumer demand as well as retailer demand for space within our shopping centers;

the impact of social distancing guidelines, recommendations from governmental authorities, and consumer shopping preferences;

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The impact of these factors, some of which have already been realized, could include reduced revenue from neighbor concessions, increased collectability reserves, decreased recovery rates on expenses, and other unforeseen impacts that may arise in the course of operating during these circumstances.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview for our observation of neighbor impacts through August 10, 2020 .

The duration of the pandemic and mitigating measures, and their economic impact, has caused some of our current neighbors to permanently vacate their spaces and/or not renew their leases, and we may have difficulty leasing these spaces on the same or better terms or at all, and/or incur additional costs to lease vacant spaces.

Extended periods of vacancy or reduced revenues may trigger impairments of our real estate assets.

Additionally, these factors may impact disposition activity by decreasing demand and negatively impacting capitalization rates.

Our disposition and acquisition activity was reduced as a result of the pandemic during the second quarter.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview for our observation of neighbor impacts through November 4, 2020.

We believe that our investment focus on grocery-anchored shopping centers that provide daily necessities will help lessen the negative effect of the pandemic on our business compared to non-grocery anchored shopping centers.

We are closely monitoring the occupancy, operating performance, and neighbor sales results at our centers, including those neighbors operating with reduced hours or under government-imposed restrictions.

We took action to maximize our financial flexibility by implementing expense reductions at the property and corporate level;

We are closely monitoring the occupancy, operating performance, and neighbor sales results at our centers, including those neighbors

operating with reduced hours or under government-imposed restrictions.

Further, we have taken action to maximize our financial flexibility by implementing expense reductions at the property and corporate level;

prioritizing capital projects to support the reopening of our neighbors and new leasing activity, or deferring if possible;

and suspending monthly distributions and share repurchases.

Summary of Operating Activities for the Three Months Ended June 30, 2020 and 2019

Summary of Operating Activities for the Three Months Ended September 30, 2020 and 2019

Three Months Ended

Favorable (Unfavorable)

September 30, Favorable (Unfavorable)

(Dollars in thousands) 2020 2019 $ %

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Other property income 816 528 288 54.5 %

Total revenues 126,695 136,009 (9,314) (6.8) %

Operating Expenses:

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Depreciation and amortization (56,095) (58,477) 2,382 4.1 %

Impairment of real estate assets

Impairment of real estate assets — (35,710) 35,710 NM

Total operating expenses (103,807) (147,036) 43,229 29.4 %

Interest expense, net (20,388) (25,309) 4,921 19.4 %

Loss on disposal of property, net

Other expense, net

Net loss attributable to noncontrolling interests

Net loss attributable to stockholders

Gain on disposal of property, net 10,734 5,048 5,686 112.6 %

Other income, net 196 1,561 (1,365) (87.4) %

Net income (loss) 13,430 (29,727) 43,157 145.2 %

Net (income) loss attributable to noncontrolling interests (1,646) 3,850 (5,496) (142.8) %

Net income (loss) attributable to stockholders $ 11,784 $ (25,877) $ 37,661 145.5 %

Our basis for analyzing significant fluctuations in our results of operations generally includes review of the results of our same-center portfolio, non-same-center portfolio, and revenues and expenses from our management activities.

We define our same-center portfolio as the 276 properties that were owned and operational prior to January 1, 2019.

We define our non-same-center portfolio as those properties that were not fully owned and operational in both periods owing to real estate asset activity occurring after December 31, 2018 , which includes 25 properties disposed of and five properties acquired.

Below are explanations of the significant fluctuations in the results of operations for the three months ended June 30, 2020 and 2019 :

We define our non-same-center portfolio as those properties that were not fully owned and operational in both periods owing to real estate asset activity occurring after December 31, 2018, which includes 27 properties disposed of and six properties acquired.

Below are explanations of the significant fluctuations in the results of operations for the three months ended September 30, 2020 and 2019:

Rental Income decreased $9.4 million as follows:

$8.5 million decrease related to our same-center portfolio.

We have identified an increased number of neighbors as a credit risk, largely due to the COVID-19 pandemic and its economic impact.

As a result, we saw a decrease to rental income of $12.1 million related to revenue that will not be recognized until cash is collected or the neighbor resumes payment and is considered creditworthy, including $3.1 million in straight-line rent reversals for the related leases.

This impact offsets an improvement of $1.9 million primarily due to an increase in average minimum rent per square foot and average occupancy, as well as a $2.8 million increase in recovery income;

• $4.9 million decrease related to our same-center portfolio as follows:

▪ $3.2 million decrease in minimum rent largely due to the COVID-19 pandemic and its economic impact.

This includes an increased number of neighbors we have identified as a credit risk, which resulted in a decrease of $2.1 million related to revenue that will not be recognized until cash is collected or the neighbor resumes payment and is considered creditworthy, including a $0.7 million increase in revenues due to reserves on straight-line rent adjustments for the related leases.

Additionally, we saw a $1.1 million decrease in rental revenues as a result of rent abatement;

▪ $1.8 million decrease primarily due to non-cash straight-line rent amortization;

▪ $1.4 million decrease in recovery income largely due to the increased number of neighbors we have identified as a credit risk in connection with the COVID-19 pandemic, which resulted in a decrease of $0.9 million;

▪ $1.5 million increase primarily due to improvements in average minimum rent per square foot and average occupancy;

• $4.5 million decrease primarily related to our net disposition of 21 properties.

Property Operating Expenses decreased $1.3 million as follows:

$0.8 million decrease related to our net disposition of 20 properties;

$0.5 million decrease related to our same-center portfolio and corporate operating activities, including $1.6 million of reduced compensation in connection with our expense reduction initiatives and performance compensation, partially offset by higher insurance costs.

Real Estate Tax Expenses decreased $1.5 million primarily as follows:

$0.9 million decrease related to our same-center portfolio, primarily as a result of successful real estate tax appeals;

Property Operating Expenses decreased $2.5 million primarily as follows:

• $1.6 million decrease related to our same-center portfolio and corporate operating activities, including $1.7 million of decreases to compensation in connection with our expense reduction initiatives and performance compensation;

• $0.8 million decrease related to our net disposition of 21 properties.

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• The $1.9 million decrease in general and administrative expenses was primarily related to expense reductions taken to reduce the impact of the COVID-19 pandemic, with the majority of these decreases related to compensation.

Depreciation and Amortization decreased $3.2 million primarily as follows:

Depreciation and Amortization decreased $2.4 million as follows:

• $1.8 million decrease related to our net disposition of 21 properties;

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Impairment of Real Estate Assets:

Our decrease in impairment of real estate assets of $25.2 million was primarily due to reduced disposition activity.

Our impairments during the three months ended June 30, 2019 were related to assets under contract or actively marketed for sale at a disposition price that was less than the carrying value, the proceeds from which were used to fund tax-efficient acquisitions, to fund redevelopment opportunities in owned centers, and for general corporate purposes.

• Our decrease in impairment of real estate assets of $35.7 million was related to assets under contract or actively marketed for sale at a disposition price that was less than the carrying value in 2019, the proceeds from which were used to fund tax-efficient acquisitions, to fund redevelopment opportunities in owned centers, and for general corporate purposes.

We continue to sell non-core assets and may potentially recognize impairments in future quarters, but our anticipated disposition activity will likely be delayed or reduced due to current market conditions as a result of the COVID-19 pandemic.

Interest Expense, Net:

The $3.6 million decrease was largely due to repricing activities in 2019 as well as the decrease in LIBOR during the three months ended June 30, 2020 as compared to the same period in 2019 .

• The $4.9 million decrease during the three months ended September 30, 2020 as compared to the same period in 2019 was largely due to the decrease in LIBOR and expiring interest rate swaps in 2020 as well as repricing activities that occurred in 2019.

Interest Expense, Net was comprised of the following (dollars in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Interest on revolving credit facility, net $ 260 $ 227

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Weighted-average term (in years) as of end of period 4.3 4.3

Other Expense, Net :

The $10.1 million decrease was largely due to other impairment charges of $9.7 million in connection with the REIT III public offering recognized during the three months ended June 30, 2019 , which included a $7.8 million impairment of a corporate intangible asset and a $1.9 million impairment of organization and offering costs.

Other Expense, Net was comprised of the following (dollars in thousands):

Three Months Ended June 30,

Equity in loss of unconsolidated joint ventures

Gain on Disposal of Property, Net:

• The $5.7 million increase was primarily related to the sale of two properties with a net gain of $10.7 million during the three months ended September 30, 2020, as compared to the sale of four properties with a net gain of $5.0 million during the three months ended September 30, 2019 (see Note 4).

Other Income, Net:

• The $1.4 million decrease was largely due to a decrease in income from our unconsolidated joint ventures primarily due to lower gains on the disposition of properties in NRP as compared to the three months ended September 30, 2019.

Other Income, Net was comprised of the following (dollars in thousands):

Three Months Ended September 30,

Equity in net income of unconsolidated joint ventures

$ 133 $ 1,550

Transaction and acquisition expenses (152) (120)

Federal, state, and local income tax expense (173) (176)

Other impairment charges

Other expense, net

Summary of Operating Activities for the Six Months Ended June 30, 2020 and 2019

Six Months Ended

Favorable (Unfavorable)

Other 388 307

Other income, net $ 196 $ 1,561

Summary of Operating Activities for the Nine Months Ended September 30, 2020 and 2019

Nine Months Ended

September 30, Favorable (Unfavorable)

(Dollars in thousands) 2020 2019 $ %

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Other property income 2,334 1,676 658 39.3 %

Total revenues 377,258 401,359 (24,101) (6.0) %

Operating Expenses:

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Depreciation and amortization (168,692) (179,020) 10,328 5.8 %

Impairment of real estate assets

Impairment of real estate assets — (74,626) 74,626 NM

Total operating expenses (311,906) (412,322) 100,416 24.4 %

Interest expense, net (65,317) (76,151) 10,834 14.2 %

(Loss) gain on disposal of property, net

Other income (expense), net

Gain on disposal of property, net 8,616 10,903 (2,287) (21.0) %

Other income (expense), net 9,565 (1,476) 11,041 NM

Net income (loss) 18,216 (77,687) 95,903 123.4 %

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Net income (loss) attributable to stockholders $ 15,965 $ (67,642) $ 83,607 123.6 %

For details surrounding our basis for analyzing significant fluctuations in our results of operations as well as definitions related to our portfolio of real estate assets, please see the Summary of Operating Activities for the Three Months Ended June 30, 2020 and 2019 section above.

Below are explanations of the significant fluctuations in the results of operations for the six months ended June 30, 2020 and 2019 :

Below are explanations of the significant fluctuations in the results of operations for the nine months ended September 30, 2020 and 2019:

Rental Income decreased $23.2 million as follows:

$5.4 million decrease related to our same-center portfolio.

We have identified an increased number of neighbors as a credit risk, largely due to the COVID-19 pandemic and its economic impact.

As a result, we saw a decrease to rental income of $14.3 million related to revenue that will not be recognized until cash is collected or the neighbor resumes payment and is considered creditworthy, including $3.1 million in straight-line rent reversals for the related leases.

This offsets an improvement of $4.2 million primarily related to increases in average minimum rent per square foot and average occupancy, as well as a $5.2 million increase in recovery income;

• $10.3 million decrease related to our same-center portfolio as follows:

▪ $15.3 million decrease in minimum rent largely due to the COVID-19 pandemic and its economic impact.

This includes an increased number of neighbors we have identified as a credit risk which resulted in a decrease of $13.6 million, including a $2.4 million reduction in revenues due to reserves on straight-line rent adjustments for the related leases.

Additionally, we saw a $1.7 million decrease due to rent abatement;

▪ $2.2 million decrease primarily due to non-cash straight-line rent amortization;

▪ $6.2 million increase primarily due to a $0.24 increase in average minimum rent per square foot and a 1.1% improvement in average occupancy;

▪ $1.0 million increase in recovery income primarily due to improved recoverability of expenses and higher occupancy at our centers, partially offset by the increased number of neighbors we have identified as a credit risk in connection with the COVID-19 pandemic, which resulted in a decrease of $3.7 million;

• $12.9 million decrease primarily related to our net disposition of 21 properties.

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• The $1.6 million decrease in fee and management income is primarily due to fees no longer received from REIT III following its acquisition by us in October 2019 and a decrease in fees received from NRP, primarily due to property dispositions.

This offsets improvements in fees received from GRP I and GRP II.

Property Operating Expenses decreased $4.9 million as follows:

$1.6 million decrease related to our net disposition of 20 properties;

• $2.5 million decrease related to our same-center portfolio and corporate operating activities, including $3.8 million of reduced compensation in connection with our expense reduction initiatives and performance compensation, partially offset by higher insurance costs;

• $2.4 million decrease related to our net disposition of 21 properties.

Real Estate Tax Expenses decreased $2.4 million as follows:

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• The $8.1 million decrease in general and administrative expenses was primarily related to expense reductions taken to reduce the impact of the COVID-19 pandemic, with the majority of these decreases related to compensation.

Depreciation and Amortization decreased $7.9 million primarily as follows:

Depreciation and Amortization decreased $10.3 million as follows:

• $6.3 million decrease related to our net disposition of 21 properties;

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Impairment of Real Estate Assets:

The decrease in impairment of real estate assets of $38.9 million was primarily due to reduced disposition activity.

Our impairments during the six months ended June 30, 2019 were related to assets under contract or actively marketed for sale at a disposition price that was less than the carrying value, the proceeds from which were used to fund tax-efficient acquisitions, to fund redevelopment opportunities in owned centers, and for general corporate purposes.

• The decrease in impairment of real estate assets of $74.6 million was related to assets under contract or actively marketed for sale at a disposition price that was less than the carrying value in 2019, the proceeds from which were used to fund tax-efficient acquisitions, to fund redevelopment opportunities in owned centers, and for general corporate purposes.

Interest Expense, Net:

The $5.9 million decrease was largely due to repricing activities in 2019 as well as the decrease in LIBOR during the six months ended June 30, 2020 as compared to the same period in 2019 .

• The $10.8 million decrease during the nine months ended September 30, 2020 as compared to the same period in 2019 was largely due to the decrease in LIBOR and expiring interest rate swaps in 2020 as well as repricing activities that occurred in 2019.

Interest Expense, Net was comprised of the following (dollars in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Interest on revolving credit facility, net $ 1,455 $ 1,648

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Weighted-average term (in years) as of end of period 4.3 4.3

(Loss) Gain on the Disposal of Property, Net :

The $8.0 million change was primarily related to the sale of four properties with a net loss and associated write-offs of $2.1 million during the six months ended June 30, 2020 , as compared to the sale of six properties with a net gain of $5.9 million during the six months ended June 30, 2019 (see Note 4 ).

Gain on Disposal of Property, Net:

• The $2.3 million change was primarily related to the sale of six properties with a net gain of $8.6 million during the nine months ended September 30, 2020, as compared to the sale of ten properties and one outparcel with a net gain of $10.9 million during the nine months ended September 30, 2019 (see Note 4).

Other Income (Expense), Net:

The $12.4 million change was largely due to other impairment charges of $9.7 million in connection with the REIT III public offering during the three months ended June 30, 2019 , which included a $7.8 million impairment of a corporate intangible asset and a $1.9 million impairment of organization and offering costs, and the change in the fair value of our earn-out liability.

• The $11.0 million change was largely due to other impairment charges of $9.7 million in connection with the REIT III public offering during the three months ended September 30, 2019, which included $7.8 million of impairment charges related to our corporate intangible asset and $1.9 million of impairment charges related to organization and offering costs, as well as the change in the fair value of our earn-out liability.

Other Income (Expense), Net was comprised of the following (dollars in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Change in fair value of earn-out liability $ 10,000 $ 7,500

Equity in loss of unconsolidated joint ventures

Equity in (loss) income of unconsolidated joint ventures

Transaction and acquisition expenses (211) (396)

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Other impairment charges — (9,661)

Other 664 1,024

Other income (expense), net $ 9,565 $ (1,476)

Leasing Activity —The volume of our leasing activity slowed as a result of the COVID-19 pandemic during the second quarter.

The average rent per square foot and cost of executing leases fluctuates based on the neighbor mix, size of the leased space, and lease term.

Leasing Activity —The average rent per square foot and cost of executing leases fluctuates based on the neighbor mix, size of the leased space, and lease term.

Leases with national and regional neighbors generally require a higher cost per square foot to execute than those with local neighbors.

However, generally such national and regional neighbors will also pay higher rates for a longer term.

Below is a summary of leasing activity for our wholly-owned properties for the three months ended June 30, 2020 and 2019 :

Below is a summary of leasing activity for our wholly-owned properties for the three months ended September 30, 2020 and 2019:

Total Deals (1)

Inline Deals (1)(2)

2020 2019 2020 2019

Number of leases 111 98 110 95

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Cost per square foot of executing new leases (3)

$ 27.25 $ 18.08 $ 26.01 $ 20.40

Number of comparable leases (4)

Comparable rent spread (5)

8.2 % 12.6 % 8.2 % 7.6 %

Weighted-average lease term (in years) 6.6 7.6 6.3 6.6

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Cost per square foot of executing renewals and options (3)

$ 2.42 $ 2.28 $ 4.60 $ 4.32

Number of comparable leases (4)

87 110 82 101

Comparable rent spread (5)

4.1 % 2.7 % 6.4 % 11.0 %

Weighted-average lease term (in years) 4.8 4.5 4.2 4.0

Portfolio retention rate (6)

90.4 % 88.7 % 74.9 % 74.8 %

(1) Per square foot amounts may not recalculate exactly based on other amounts presented within the table due to rounding.

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(6) The portfolio retention rate is calculated by dividing (a) total square feet of retained neighbors with current period lease expirations by (b) the square feet of leases expiring during the period.

Below is a summary of leasing activity for our wholly-owned properties for the six months ended June 30, 2020 and 2019 (1) :

Below is a summary of leasing activity for our wholly-owned properties for the nine months ended September 30, 2020 and 2019 (1) :

Total Deals Inline Deals

2020 2019 2020 2019

Number of leases 259 305 245 294

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Portfolio retention rate 82.7 % 86.6 % 70.5 % 77.3 %

See the footnotes to the summary of leasing activity table for the three months ended June 30, 2020 and 2019 for more detail regarding certain items throughout this table.

Additionally, subsequent to June 30, 2020, through July 31, we executed a total of 44 new leases.

(1) See the footnotes to the summary of leasing activity table for the three months ended September 30, 2020 and 2019 for more detail regarding certain items throughout this table.

Non-GAAP Measures

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We define NOI as total operating revenues, adjusted to exclude non-cash revenue items, less property operating expenses and real estate taxes.

For the three and six months ended June 30, 2020 and 2019 , Same-Center NOI represents the NOI for the 278 properties that were wholly-owned and operational for the entire portion of both comparable reporting periods.

For the three and nine months ended September 30, 2020 and 2019, Same-Center NOI represents the NOI for the 276 properties that were wholly-owned and operational for the entire portion of both comparable reporting periods.

We believe Same-Center NOI provides useful information to our investors about our financial and operating performance because it provides a performance measure of the revenues and expenses directly involved in owning and operating real estate assets and provides a perspective not immediately apparent from net income (loss).

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Three Months Ended

(Unfavorable)

Six Months Ended June 30,

Favorable (Unfavorable)

September 30, Favorable

(Unfavorable) Nine Months Ended

September 30, Favorable (Unfavorable)

Change 2020 2019 $

Rental income (1)

$ 86,574 $ 89,281 $ (2,707) $ 261,061 $ 268,046 $ (6,985)

Tenant recovery income 29,964 31,425 (1,461) 88,283 87,369 914

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Property operating expenses

16,865 16,940 75 51,681 50,979 (702)

Real estate taxes

16,975 17,167 192 50,161 50,417 256

Total operating expenses 33,840 34,107 267 0.8 % 101,842 101,396 (446) (0.4) %

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(1) Excludes straight-line rental income, net amortization of above- and below-market leases, and lease buyout income.

Same-Center NOI Reconciliation —Below is a reconciliation of Net (Loss) Income to NOI for our real estate investments and Same-Center NOI (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Net (loss) income

Same-Center NOI Reconciliation —Below is a reconciliation of Net Income (Loss) to NOI for our real estate investments and Same-Center NOI (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 (1)

Net income (loss) $ 13,430 $ (29,727) $ 18,216 $ (77,687)

Adjusted to exclude:

Fees and management income

Straight-line rental expense (income) (2)

(2,581) (2,766) (7,506) (9,078)

Straight-line rental income (2)

(1,800) (2,573) (3,164) (7,105)

Net amortization of above- and below-market leases

(811) (1,042) (2,394) (3,266)

Lease buyout income

(664) (632) (972) (1,088)

General and administrative expenses

9,595 11,537 30,141 38,287

Depreciation and amortization

56,095 58,477 168,692 179,020

Impairment of real estate assets

— 35,710 — 74,626

Interest expense, net

Loss (gain) on disposal of property, net

Other expense (income), net

20,388 25,309 65,317 76,151

Gain on disposal of property, net

(10,734) (5,048) (8,616) (10,903)

Other (income) expense, net

(196) (1,561) (9,565) 1,476

Property operating expenses related to fees and

management income

1,058 2,328 2,586 5,154

NOI for real estate investments 83,780 90,012 252,735 265,587

Non-same-center NOI (3)

(296) (2,920) (2,990) (10,019)

Total Same-Center NOI $ 83,484 $ 87,092 $ 249,745 $ 255,568

(1) Certain prior period amounts have been reclassified to conform with current year presentation.

Excludes straight-line rent adjustments for neighbors deemed to be non-creditworthy.

(2) Includes straight-line rent adjustments for neighbors deemed to be non-creditworthy.

(3) Includes operating revenues and expenses from non-same-center properties which includes properties acquired or sold and corporate activities.

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We believe that Core FFO is helpful in assisting management and investors with the assessment of the sustainability of operating performance in future periods.

We believe it is more reflective of our core operating performance and provides an additional measure to compare our performance across reporting periods on a consistent basis by excluding items that may cause short-term fluctuations in net income (loss).

To arrive at Core FFO, we adjust FFO attributable to stockholders and convertible noncontrolling interests to exclude certain recurring and non-recurring items

including, but not limited to, depreciation and amortization of corporate assets, changes in the fair value of the earn-out liability, amortization of unconsolidated joint venture basis differences, gains or losses on the extinguishment or modification of debt, other impairment charges, and transaction and acquisition expenses.

FFO, FFO Attributable to Stockholders and Convertible Noncontrolling Interests, and Core FFO should not be considered alternatives to net income (loss) or income (loss) from continuing operations under GAAP, as an indication of our liquidity, nor as an indication of funds available to cover our cash needs, including our ability to fund distributions.

We believe it is more reflective of our core operating performance and provides an additional measure to compare our performance across reporting periods on a consistent basis

by excluding items that may cause short-term fluctuations in net income (loss).

To arrive at Core FFO, we adjust FFO attributable to stockholders and convertible noncontrolling interests to exclude certain recurring and non-recurring items including, but not limited to, depreciation and amortization of corporate assets, changes in the fair value of the earn-out liability, amortization of unconsolidated joint venture basis differences, gains or losses on the extinguishment or modification of debt, other impairment charges, and transaction and acquisition expenses.

FFO, FFO Attributable to Stockholders and Convertible Noncontrolling Interests, and Core FFO should not be considered alternatives to net income (loss) under GAAP, as an indication of our liquidity, nor as an indication of funds available to cover our cash needs, including our ability to fund distributions.

Core FFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate our business plan in the manner currently contemplated.

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The following table presents our calculation of FFO, FFO Attributable to Stockholders and Convertible Noncontrolling Interests, and Core FFO and provides additional information related to our operations (in thousands, except per share amounts):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 (1)

Calculation of FFO Attributable to Stockholders and

Convertible Noncontrolling Interests

Net (loss) income

Net income (loss) $ 13,430 $ (29,727) $ 18,216 $ (77,687)

Depreciation and amortization of real estate assets 54,579 57,331 164,288 174,501

Impairment of real estate assets — 35,710 — 74,626

Loss (gain) on disposal of property, net

Gain on disposal of property, net (10,734) (5,048) (8,616) (10,903)

Adjustments related to unconsolidated joint ventures 166 (1,814) 1,760 292

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basis differences 546 1,181 1,267 1,878

Loss on extinguishment or modification of debt, net

Other impairment charges — — — 9,661

Transaction and acquisition expenses 152 120 211 396

Other — 157 73 157

Core FFO $ 59,655 $ 59,013 $ 171,603 $ 169,666

FFO Attributable to Stockholders and Convertible

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Weighted-average common shares outstanding - diluted (2)

333,563 326,983 333,480 326,429

FFO attributable to stockholders and convertible

noncontrolling interests per share - diluted

$ 0.17 $ 0.17 $ 0.53 $ 0.49

Core FFO per share - diluted $ 0.18 $ 0.18 $ 0.51 $ 0.52

(1) Certain prior period amounts have been reclassified to conform with current year presentation.

Restricted stock awards were dilutive to FFO Attributable to Stockholders and Convertible Noncontrolling Interests per share and Core FFO per share for the three and six months ended June 30, 2020 and 2019 , and, accordingly, their impact was included in the weighted-average common shares used in their respective per share calculations.

For the three months ended June 30, 2020 and for the three and six months ended June 30, 2019 , restricted stock awards had an anti-dilutive effect upon the calculation of earnings per share and thus were excluded.

(2) Restricted stock units were dilutive to FFO Attributable to Stockholders and Convertible Noncontrolling Interests per share and Core FFO per share for the three and nine months ended September 30, 2020 and 2019, and, accordingly, their impact was included in the weighted-average common shares used in their respective per share calculations.

For the three and nine months ended September 30, 2019, restricted stock units had an anti-dilutive effect upon the calculation of earnings per share and thus were excluded.

For details related to the calculation of earnings per share, see Note 10.

Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (“EBITDAre”) and Adjusted EBITDAre —We have included the calculation of EBITDA re to better align with publicly traded REITs.

Additionally, we believe that, as another important earnings metric, it is a useful indicator of our ability to support our debt obligations.

Nareit defines EBITDA re as net income (loss) computed in accordance with GAAP before (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) gains or losses from disposition of depreciable property, and (v) impairment write-downs

of depreciable property.

Additionally, we believe

that, as another important earnings metric, it is a useful indicator of our ability to support our debt obligations.

Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect EBITDA re on the same basis.

Adjusted EBITDA re is an additional performance measure used by us as EBITDA re includes certain non-comparable items that affect our performance over time.

To arrive at Adjusted EBITDA re, we exclude certain recurring and non-recurring items from EBITDAre, including, but not limited to:

To arrive at Adjusted EBITDA re, we exclude certain recurring and non-recurring items from EBITDA re , including, but not limited to:

(i) changes in the fair value of the earn-out liability;

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Our EBITDA re and Adjusted EBITDA re , as presented, may not be comparable to amounts calculated by other REITs.

The following table presents our calculation of EBITDA re and Adjusted EBITDA re and provides additional information related to our operations (in thousands, except per share amounts):

Three Months Ended June 30,

Six Months Ended June 30,

The following table presents our calculation of EBITDA re and Adjusted EBITDA re (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30, Year Ended

2020 2019 2020 2019 2019

Calculation of EBITDA re

Net (loss) income

Net income (loss) $ 13,430 $ (29,727) $ 18,216 $ (77,687) $ (72,826)

Depreciation and amortization 56,095 58,477 168,692 179,020 236,870

Interest expense, net 20,388 25,309 65,317 76,151 103,174

Loss (gain) on disposal of property, net

Gain on disposal of property, net (10,734) (5,048) (8,616) (10,903) (28,170)

Impairment of real estate assets — 35,710 — 74,626 87,393

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joint ventures 594 (1,131) 3,162 2,398 2,571

$ 79,946 $ 83,766 $ 247,153 $ 244,122 $ 329,797

Calculation of Adjusted EBITDA re

$ 79,946 $ 83,766 $ 247,153 $ 244,122 $ 329,797

Change in fair value of earn-out liability — — (10,000) (7,500) (7,500)

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Adjusted EBITDA re

$ 80,644 $ 85,067 $ 238,631 $ 248,557 $ 335,410

Liquidity and Capital Resources

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• principal and interest payments on our outstanding indebtedness;

cash distributions to stockholders to comply with REIT requirements;

• cash distributions to stockholders;

• repurchases of common stock for DDI and the Tender Offer;

• capital expenditures and leasing costs;

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• available, unrestricted cash and cash equivalents;

reinvested distributions once distributions to stockholders resume and thus the DRIP is reactivated/reinstated.

• reinvested distributions.

Our cash from operations has been reduced, and we anticipate that it may continue to be be negatively impacted, at least in the near term, as a result of the immediate impact of the COVID-19 pandemic as we temporarily experience reduced or delayed cash payments and/or revenue from neighbors.

Additionally, our cash from financing activities has been and will continue to be impacted by actions taken to preserve liquidity, as we have suspended our distributions, the DRIP, and the SRP.

Additionally, our cash from financing activities has been impacted by actions taken to preserve liquidity such as the suspension of our distributions, the DRIP, and the SRP, and will continue to be impacted by any distributions declared as well as the Tender Offer.

We are monitoring events closely and managing our cash usage, which also includes prioritizing our capital spending and redevelopment to support the reopening of our neighbors and new leasing activity, or deferring if possible, as well as reducing other property and corporate expenses.

At this time, we believe our current sources of liquidity, most significantly our operating cash flows and borrowing availability on our revolving credit facility, are sufficient to meet our short- and long-term cash demands.

Debt —The following table summarizes information about our debt as of June 30, 2020 and December 31, 2019 (dollars in thousands):

June 30, 2020

December 31, 2019

Debt —The following table summarizes information about our debt as of September 30, 2020 and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

Total debt obligations, gross $ 2,334,888 $ 2,372,521

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Revolving credit facility availability (1)

490,404 489,805

Revolving credit facility maturity (2)

October 2021 October 2021

(1) Net of any outstanding balance and letters of credit.

The revolving credit facility has an additional option to extend the maturity to October 2022, with its execution being subject to compliance with certain terms included in the loan agreement, including the absence of any defaults and the payment of relevant fees.

(2) The revolving credit facility matures in October 2021 and includes an option to extend the maturity to October 2022, with its execution being subject to compliance with certain terms included in the loan agreement, including the absence of any defaults and the payment of relevant fees.

We intend to either exercise our option to extend the maturity or to negotiate under new terms.

As our debt obligations mature, we intend to refinance or pay off the balances at maturity using proceeds from operations and/or corporate-level debt.

In January 2020, we paid down $30.0 million of term loan debt maturing in 2021 using proceeds from property dispositions in 2019.

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In April 2020, we borrowed $200 million on our revolving credit facility to meet our operating needs for a sustained period due to the COVID-19 pandemic.

Our debt is subject to certain covenants, and as of June 30, 2020 , we were in compliance with the restrictive covenants of our outstanding debt obligations.

Our rent and recovery collections during the second quarter, combined with our COVID-19 expense reduction initiatives, sufficiently funded our operating needs and provided enough stability to allow us to repay in full the outstanding balance on our revolving credit facility in June 2020.

In October 2020, we executed early repayments of $20.4 million in mortgage debt utilizing cash on hand.

Our debt is subject to certain covenants, and as of September 30, 2020, we were in compliance with the restrictive covenants of our outstanding debt obligations.

We expect to continue to meet the requirements of our debt covenants over the next twelve months.

Financial Leverage Ratios — We believe our debt to Adjusted EBITDA re , debt to total enterprise value, and debt covenant compliance as of June 30, 2020 allow us access to future borrowings as needed in the near term.

The following table presents our calculation of net debt and total enterprise value, inclusive of our prorated portion of net debt and cash and cash equivalents owned through our joint ventures, as of June 30, 2020 and December 31, 2019 (dollars in thousands):

June 30, 2020

December 31, 2019

Financial Leverage Ratios —We believe our debt to Adjusted EBITDA re , debt to total enterprise value, and debt covenant compliance as of September 30, 2020 allow us access to future borrowings as needed in the near term.

The following table presents our calculation of net debt and total enterprise value, inclusive of our prorated portion of net debt and cash and cash equivalents owned through our joint ventures, as of September 30, 2020 and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

Total debt, excluding market adjustments and deferred financing expenses $ 2,379,355 $ 2,421,520

Cash and cash equivalents 105,270 18,376

Net debt $ 2,274,085 $ 2,403,144

Enterprise value:

Net debt $ 2,274,085 $ 2,403,144

Total equity value (1)

2,914,940 3,682,161

Total enterprise value $ 5,189,025 $ 6,085,305

Total equity value is calculated as the number of common shares and OP units outstanding multiplied by the EVPS as of June 30, 2020 and December 31, 2019, respectively.

There were 333.1 million diluted shares outstanding with an EVPS of $8.75 and 331.7 million diluted shares outstanding with an EVPS of $11.10 as of June 30, 2020 and December 31, 2019 , respectively.

The following table presents our calculation of net debt to Adjusted EBITDA re and net debt to total enterprise value as of June 30, 2020 and December 31, 2019 (dollars in thousands):

June 30, 2020

December 31, 2019

(1) Total equity value is calculated as the number of common shares and OP units outstanding multiplied by the EVPS as of September 30, 2020 and December 31, 2019, respectively.

There were 333.1 million diluted shares outstanding with an EVPS of $8.75 as of September 30, 2020 and 331.7 million diluted shares outstanding with an EVPS of $11.10 as of December 31, 2019.

The following table presents our calculation of net debt to Adjusted EBITDA re and net debt to total enterprise value as of September 30, 2020 and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

Net debt to Adjusted EBITDA re - annualized :

Net debt $ 2,274,085 $ 2,403,144

Adjusted EBITDA re - annualized (1)

325,484 335,410

Net debt to Adjusted EBITDA re - annualized

Net debt to total enterprise value

Net debt $ 2,274,085 $ 2,403,144

Total enterprise value 5,189,025 6,085,305

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(1) Adjusted EBITDA re is annualized based on trailing twelve months.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - EBITDA re and Adjusted EBITDA re for a reconciliation to Net (Loss) Income .

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - EBITDA re and Adjusted EBITDA re for a reconciliation to Net Income (Loss).

Capital Expenditures and Redevelopment Activity —We make capital expenditures during the course of normal operations, which include maintenance capital expenditures and tenant improvements as well as value-enhancing anchor space repositioning and redevelopment, ground-up outparcel development, and other accretive projects.

Our capital investments are being prioritized to support the reopening of our neighbors and new leasing activity, or deferred if possible, in order to maximize our available capital in response to the uncertainty around the duration and negative impact of the COVID-19 pandemic.

During the six months ended June 30, 2020 and 2019 , we had capital spend of $28.5 million and $27.2 million , respectively.

Our capital spend during the six months ended June 30, 2020 included $16.1 million related to development and redevelopment projects.

Our capital investments have been prioritized to support the reopening of our neighbors and new leasing activity, or deferred if possible.

During the nine months ended September 30, 2020 and 2019, we had capital spend of $40.8 million and $48.1 million, respectively.

Our capital spend during the nine months ended September 30, 2020 included $20.7 million related to development and redevelopment projects.

We anticipate that obligations related to capital improvements as well as redevelopment and development can be met with cash flows from operations, cash flows from dispositions, or borrowings on our unsecured revolving line of credit.

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Given the uncertainty around the COVID-19 pandemic as well as the resulting market conditions, we expect acquisition activity to remain low for the remainder of 2020.

During the six months ended June 30, 2020 , we acquired two parcels of land, as described in Note 4 to the consolidated financial statements, for a total cash outlay of $4.3 million .

During the six months ended June 30, 2019 , we acquired one property and one parcel of land for a total cash outlay of $49.9 million .

During the nine months ended September 30, 2020, we acquired one property and two parcels of land, as described in Note 4 to the consolidated financial statements, for a total cash outlay of $23.0 million.

During the nine months ended September 30, 2019, we acquired one property and one parcel of land for a total cash outlay of $49.9 million.

Disposition and Contribution Activity —We are actively evaluating our portfolio of assets for opportunities to make strategic dispositions of assets that no longer meet our growth and investment objectives or assets that have stabilized in order to capture their value.

We expect to continue to make strategic dispositions during 2020, though the volume will likely be less than anticipated due to the impact of the COVID-19 pandemic and the resulting economic downturn.

The following table highlights our property dispositions for the six months ended June 30, 2020 and 2019 (dollars and square feet in thousands):

Six Months Ended June 30,

The following

table highlights our property dispositions for the nine months ended September 30, 2020 and 2019 (dollars and square feet in thousands):

Nine Months Ended September 30,

Number of properties sold 6 10

Number of outparcels sold — 1

GLA 525 1,178

Proceeds from the sale of real estate $ 48,276 $ 86,159

(Loss) gain on sale of properties, net (1)

The (loss) gain on sale of properties, net does not include miscellaneous write-off activity, which is also recorded in (Loss) Gain on Disposal of Property, Net on the consolidated statements of operations.

Distributions —Distributions to our common stockholders and OP unit holders, including key financial metrics for comparison purposes, for the six months ended June 30, 2020 and 2019 , are as follows (in thousands):

Cash distributions to OP unit holders

Net cash provided by operating activities

Cash distributions to common stockholders

Gain on sale of property, net (1)

(1) Gain on sale of property, net does not include miscellaneous write-off activity, which is also recorded in Gain on Disposal of Property, Net on the consolidated statements of operations.

Distributions —Distributions to our common stockholders and OP unit holders, including key financial metrics for comparison purposes, for the nine months ended September 30, 2020 and 2019, are as follows (in thousands):

Cash distributions to OP unit holders Net cash provided by operating activities

Cash distributions to common stockholders Core FFO (1)

Distributions reinvested through the DRIP

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - Funds from Operations and Core Funds from Operations for the definition of Core FFO, for information regarding why we present Core FFO, and for a reconciliation of this non-GAAP financial measure to Net Income (Loss).

During 2020, we paid distributions monthly of $0.05583344 per share for the months of December 2019 and January, February, and March 2020 on a cash basis.

(1) See Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Measures - Funds from Operations and Core Funds from Operations for the definition of Core FFO, or information regarding why we present Core FFO, and for a reconciliaiton of this non-GAAP financial measure to Net Income (Loss).

During 2020, we paid monthly distributions of $0.05583344 per share for the months of December 2019 and January, February, and March 2020 on a cash basis, until the suspension of stockholder distributions by the Board.

The timing and amount of distributions is determined by our Board and is influenced in part by our intention to comply with REIT requirements of the Internal Revenue Code, as well as our results of operations, our general financial condition, general economic conditions, and other factors.

On March 27, 2020, as a result of the uncertainty surrounding the COVID-19 pandemic, our Board suspended stockholder distributions, effective after the payment of the March 2020 distribution on April 1, 2020.

The DRIP was also suspended, and the March 2020 distribution was paid in all cash on April 1, 2020.

On November 4, 2020, our Board reinstated monthly stockholder distributions beginning December 2020 equal to $0.02833333 per share of common stock, or $0.34 annualized.

Additionally, the DRIP will also be reinstated with this distribution.

OP unit holders will receive distributions at the same rate as common stockholders.

The distribution and DRIP for December 2020 will be effective for stockholders of record at the close of business on December 28, 2020.

We expect to pay this distribution on January 7, 2021.

Our Board intends to evaluate distributions on a monthly basis throughout 2021.

To maintain our qualification as a REIT, we must make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain, and which does not necessarily equal net income (loss) as calculated in accordance with GAAP).

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However, we may be subject to certain state and local taxes on our income, property, or net worth and to federal income and excise taxes on our undistributed income.

We intend to maintain compliance with these requirements and keep our qualification as a REIT.

We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders.

On March 27, 2020, our Board temporarily suspended stockholder distributions, which became effective after the payment of the March 2020 distribution on April 1, 2020.

The DRIP was also temporarily suspended, and the March 2020 distribution paid on April 1, 2020 was paid all in cash.

In August 2019, our Board suspended the SRP with respect to standard repurchases.

On March 27, 2020, our Board suspended the SRP for death, qualifying disability, or determination of incompetence.

In determining to suspend the payment of distributions and the operation of the DRIP and the SRP, the Board considered various factors, including the impact that the COVID-19 pandemic and the measures taken by governmental agencies and our neighbors in response to the COVID-19 pandemic are expected to continue to have on our shopping centers and our financial

condition, liquidity sources, and capital needs.

The suspension of distributions and share repurchases is expected to be re-evaluated at the November Board meeting.

Cash Flow Activities —As of June 30, 2020 , we had cash and cash equivalents and restricted cash of $79.3 million , a net cash decrease of $15.8 million during the six months ended June 30, 2020 .

Below is a summary of our cash flow activity for the six months ended June 30, 2020 and 2019 (dollars in thousands):

Six Months Ended June 30,

Tender Offer— On November 4, 2020, our Board approved a voluntary tender offer commencing on November 10, 2020 for up to 4.5 million shares of our outstanding common stock at a price of $5.75 per share, for a total value of approximately $26 million.

Share Repurchase Program— On August 7, 2019, the Board suspended the SRP with respect to standard repurchases.

The SRP for DDI was suspended effective March 27, 2020, in response to the uncertainty of COVID-19.

We expect to restart share repurchases for DDI at $5.75 per share, but no shares will be repurchased until at least 10 business days after completion of the Tender Offer.

The SRP with respect to standard repurchases will remain suspended.

Cash Flow Activities —As of September 30, 2020, we had cash and cash equivalents and restricted cash of $136.8 million, a net cash increase of $41.7 million during the nine months ended September 30, 2020.

Below is a summary of our cash flow activity for the nine months ended September 30, 2020 and 2019 (dollars in thousands):

Nine Months Ended September 30,

2020 2019 $ Change % Change

Net cash provided by operating activities $ 157,245 $ 175,882 $ (18,637) (10.6) %

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Operating Activities —Our net cash provided by operating activities was primarily impacted by the following:

Property operations and working capita l—Most of our operating cash comes from rental and tenant recovery income and is offset by property operating expenses, real estate taxes, and general and administrative costs.

• Property operations and working capital —Most of our operating cash comes from rental and tenant recovery income and is offset by property operating expenses, real estate taxes, and general and administrative costs.

Our change in cash flows from property operations is primarily due to reduced revenue and collections as a result of the COVID-19 pandemic, partially mitigated by expense reduction measures at the property and corporate levels.

• Fee and management income —We also generate operating cash from our third-party investment management business, pursuant to various management and advisory agreements between us and the Managed Funds.

Our fee and management income was $4.9 million for the six months ended June 30, 2020 , a decrease of $1.4 million as compared to the same period in 2019 , primarily due to fee and management income no longer received from REIT III following its acquisition by us in October 2019 and a decrease in fees received from NRP largely due to property dispositions.

Cash paid for interest —During the six months ended June 30, 2020 , we paid $41.0 million for interest, a decrease of $3.2 million over the same period in 2019 largely due to lower debt and a decrease in LIBOR as compared to the same period in 2019 .

Our fee and management income was $7.5 million for the nine months ended September 30, 2020, a decrease of $1.6 million as compared to the same period in 2019, primarily due to fee and management income no longer received from REIT III following its acquisition by us in October 2019 and a decrease in fees received from NRP largely due to property dispositions.

• Cash paid for interest —During the nine months ended September 30, 2020, we paid $59.9 million for interest, a decrease of $6.9 million over the same period in 2019, largely due to a decrease in LIBOR and expiring interest rate swaps in 2020, as well as repricing activities occurring in 2019.

Investing Activities —Our net cash used in investing activities was primarily impacted by the following:

Real estate acquisitions —During the six months ended June 30, 2020 , we acquired two parcels of land, for a total cash outlay of $4.3 million .

During the six months ended June 30, 2019 , we acquired one property and one parcel of land for a total cash outlay of $49.9 million .

Real estate dispositions —During the six months ended June 30, 2020 , we disposed of four properties for a net cash inflow of $25.8 million , as compared to the disposal of six properties and one outparcel for a net cash inflow of $47.9 million during the same period in 2019 .

• Real estate acquisitions —During the nine months ended September 30, 2020, we acquired one property and two parcels of land, for a total cash outlay of $23.0 million.

During the nine months ended September 30, 2019, we acquired one property and one parcel of land for a total cash outlay of $49.9 million.

• Real estate dispositions —During the nine months ended September 30, 2020, we disposed of six properties for a net cash inflow of $48.3 million, as compared to the disposal of ten properties and one outparcel for a net cash inflow of $86.2 million during the same period in 2019.

• Capital expenditures —We invest capital into leasing our properties and maintaining or improving the condition of our properties.

During the six months ended June 30, 2020 , we paid $28.5 million for capital expenditures, an increase of $1.3 million over the same period in 2019 , primarily driven by our investment in value-added redevelopment and new development in our existing centers during the first quarter of 2020 .

Our capital expenditures were reduced during the second quarter of 2020 as our capital investments have been prioritized to support the reopening of our neighbors and new leasing activity, or deferred if possible, in response to the uncertainty around the duration and negative impact of the COVID-19 pandemic.

During the nine months ended September 30, 2020, we paid $40.8 million for capital expenditures, a decrease of $7.3 million over the same period in 2019.

This decrease was primarily driven by reduced capital expenditures since the first quarter of 2020, as our capital investments have been prioritized to support the reopening of our neighbors and new leasing activity, or deferred if possible, as well as a lower volume of other building improvements at our centers.

Financing Activities —Our net cash used in financing activities was primarily impacted by the following:

• Debt borrowings and payments —Cash from financing activities is primarily affected by inflows from borrowings and outflows from payments on debt.

As our debt obligations mature, we intend to refinance the remaining balance, if possible, or pay off the balances at maturity using proceeds from operations and/or corporate-level debt.

During the six months ended June 30, 2020 , we had $35.2 million in net repayment of debt primarily as a result of a pay down in January 2020 of $30.0 million on term loan debt maturing in 2021.

During the six months ended June 30, 2019 we had $18.2 million in net repayment of debt primarily as a result of payments on our revolving credit facility, funded primarily by cash inflows from a 1031 exchange escrow release.

Distributions to stockholders and OP unit holders —Cash used for distributions to common stockholders and OP unit holders decreased $16.1 million for the six months ended June 30, 2020 as compared to the same period in 2019 , primarily due to the temporary suspension of stockholder distributions which became effective after the payment of the March 2020 dividend on April 1, 2020.

Share repurchases —Cash outflows for share repurchases decreased by $6.6 million for the six months ended June 30, 2020 as compared to the same period in 2019 due to the suspension of the SRP for death, qualifying disability, or determination of incompetence which became effective March 27, 2020, and the suspension of the SRP with respect to standard repurchases in August 2019.

During the nine months ended September 30, 2020, we had $37.8 million in net repayment of debt primarily as a result of a pay down in January 2020 of $30.0 million on term loan debt maturing in 2021.

During the nine months ended September 30, 2019 we had $21.3 million in net repayment of debt, net of cash from the disposition of properties.

• Distributions to stockholders and OP unit holders —Cash used for distributions to common stockholders and OP unit holders decreased $54.6 million for the nine months ended September 30, 2020 as compared to the same period in 2019, primarily due to the temporary suspension of stockholder distributions which became effective after the payment of the March 2020 dividend on April 1, 2020.

• Share repurchases —Cash outflows for share repurchases decreased by $25.0 million for the nine months ended September 30, 2020 as compared to the same period in 2019.

On August 7, 2019, the Board suspended the SRP with respect to standard repurchases.

The SRP for DDI was suspended effective March 27, 2020, in response to the uncertainty of COVID-19.

Critical Accounting Policies and Estimates

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis