Business Wire | Nov 5, 2020 04:15PM EST

Urban Edge Properties Reports Third Quarter 2020 Results

Nov. 05, 2020

NEW YORK--(BUSINESS WIRE)--Nov. 05, 2020--Urban Edge Properties (NYSE: UE) (the "Company") today announced its results for the quarter ended September 30, 2020.

Financial Results(1)(2)

* Reported a net loss of $5.8 million, or $(0.05) per diluted share, for the third quarter of 2020 compared to net income of $56.7 million, or $0.45 per diluted share, for the third quarter of 2019 and generated net income of $78.0 million, or $0.63 per diluted share, for the nine months ended September 30, 2020 compared to $112.7 million, or $0.89 per diluted share, for the nine months ended September 30, 2019. * Generated Funds from Operations applicable to diluted common shareholders ("FFO") of $16.9 million, or $0.14 per share, for the quarter compared to $38.2 million, or $0.30 per share, for the third quarter of 2019 and $107.3 million, or $0.87 per share, for the nine months ended September 30, 2020 compared to $132.4 million, or $1.05 per share, for the nine months ended September 30, 2019. * Generated FFO as Adjusted of $22.8 million, or $0.19 per share, for the quarter compared to $36.5 million, or $0.29 per share, for the third quarter of 2019 and $79.5 million, or $0.65 per share, for the nine months ended September 30, 2020 compared to $111.1 million, or $0.88 per share, for the nine months ended September 30, 2019.

Operating Results(1)(3)

* Reported a decline of 19.8% in same-property Net Operating Income ("NOI"), including properties in redevelopment, compared to the third quarter of 2019 and a decline of 13.5% compared to the nine months ended September 30, 2019. Results for the third quarter and nine months ended September 30, 2020 were negatively impacted by rental revenue deemed uncollectible of $11.5 million and $25.1 million, respectively, primarily due to the COVID-19 pandemic. * Reported a decline of 20.1% in same-property NOI, excluding properties in redevelopment, compared to the third quarter of 2019 and a decline of 13.8% compared to the nine months ended September 30, 2019. Results for the third quarter and nine months ended September 30, 2020 were negatively impacted by rental revenue deemed uncollectible of $11.5 million and $25.0 million, respectively, primarily due to the COVID-19 pandemic. * Increased same-property occupancy to 93.0%, up 40 basis points compared to June 30, 2020 and up 30 basis points compared to September 30, 2019. * Increased consolidated occupancy to 92.9%, up 50 basis points compared to June 30, 2020 and up 30 basis points compared to September 30, 2019. * Executed 16 new leases, renewals and options totaling 311,000 square feet ("sf") during the quarter. Generated average rent spreads of 20.4% on a GAAP basis and 16.1% on a cash basis on same-space leases totaling 163,000 sf. * The Company has approximately $9.0 million of future annual gross rent from leases executed but not rent commenced, which represent an increase of approximately 2% in annual gross rent.

Balance Sheet and Liquidity(1)(4)

The Company continues to maintain one of the strongest and most liquid balance sheets in the sector.

Balance sheet highlights as of September 30, 2020, include:

* Total liquidity of approximately $1 billion, comprising $671 million of cash on hand and $350 million available under our revolving credit agreement. * $250 million drawn on $600 million revolving credit facility, which does not mature until 2024. This balance was fully repaid on November 4, 2020. * Total market capitalization of approximately $3.0 billion, comprised of 121.4 million fully-diluted common shares valued at $1.2 billion and $1.9 billion of debt. * Net debt to total market capitalization of 39%.

Development and Redevelopment

The Company executed a lease with AAA Wholesale Group at its property in Lodi, NJ and commenced a $15.4 million redevelopment project to convert the building into a 130,000 sf high-bay warehouse. The building will serve as a wholesale membership club supplying smaller grocery stores, delis, and convenience stores with grocery products, deli supplies, beverages, cleaning supplies and other household items. In addition, approximately 30,000 sf of the space will be allocated to a retail store for walk-in customers.

The Company also commenced a $17.5 million redevelopment project in connection with executing a lease at Broomall Commons in Broomall, PA to retenant the former Giant Food space with national retailers.

Subsequent to quarter-end, the Company executed leases with Walgreens and Global Mattress to occupy a new pad aggregating 14,000 sf that will be constructed adjacent to The Outlets at Montehiedra, with an expected opening in the fourth quarter of 2021.

The Company has $132.4 million of active redevelopment projects under way, of which $91.3 million remains to be funded. These projects are expected to generate an approximate 8% unleveraged yield.

Financing and Investing Activities

On August 6, 2020, the Company obtained a $7.3 million,10-year non-recourse mortgage loan at a rate of 3.15% on its property in Montclair, NJ.

Dividend Policy

As a result of COVID-19 and the ongoing uncertainties it has generated regarding tenant reopening dates, rent collections and the long-term impact on free cash-flow, the Company has temporarily suspended quarterly dividends. The Company's Board of Trustees will continue to monitor the Company's financial performance and economic outlook and intends to reinstate a regular quarterly dividend of at least the amount required to continue qualifying as a REIT for US federal income tax purposes. The Company's Board of Trustees is expected to announce the new dividend policy prior to year-end.

COVID-19 Business Update

The Company's collection rate has continued to improve since April. As of November 3, 2020, the Company collected 86% of gross rent for October, 83% for the third quarter and 77% for the second quarter. Approximately 97% of the portfolio, as measured by annualized base rent ("ABR"), is open for business as of November 3, 2020. Additional information related to the COVID-19 pandemic is included in the quarterly supplemental disclosure package which can be found on the Company's website (www.uedge.com).

Refer to "Non-GAAP Financial Measures" and "Operating Metrics" for(1) definitions and additional detail.

Refer to page 8 for a reconciliation of net income (loss) to FFO and FFO as(2) Adjusted for the quarter ended September 30, 2020.

Refer to page 9 for a reconciliation of net income (loss) to NOI and(3) Same-Property NOI for the quarter ended September 30, 2020.

Net debt as of September 30, 2020 is calculated as total consolidated debt(4) of $1.9 billion less total cash and cash equivalents, including restricted cash, of $671 million.

Non-GAAP Financial Measures

The Company uses certain non-GAAP performance measures, in addition to the primary GAAP presentations, as we believe these measures improve the understanding of the Company's operational results. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the investing public, and thus such reported measures are subject to change. The Company's non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results. Additionally, the Company's computation of non-GAAP metrics may not be comparable to similarly titled non-GAAP metrics reported by other REITs or real estate companies that define these metrics differently and, as a result, it is important to understand the manner in which the Company defines and calculates each of its non-GAAP metrics. The following non-GAAP measures are commonly used by the Company and investing public to understand and evaluate our operating results and performance:

* FFO: The Company believes FFO is a useful, supplemental measure of its operating performance that is a recognized metric used extensively by the real estate industry and, in particular real estate investment trusts ("REITs"). FFO, as defined by the National Association of Real Estate Investment Trusts ("Nareit") and the Company, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and land when connected to the main business of a REIT, impairments on depreciable real estate or land related to a REIT's main business and rental property depreciation and amortization expense. The Company believes that financial analysts, investors and shareholders are better served by the presentation of comparable period operating results generated from FFO primarily because it excludes the assumption that the value of real estate assets diminishes predictably. FFO does not represent cash flows from operating activities in accordance with GAAP, should not be considered an alternative to net income as an indication of our performance, and is not indicative of cash flow as a measure of liquidity or our ability to make cash distributions. * FFO as Adjusted: The Company provides disclosure of FFO as Adjusted because it believes it is a useful supplemental measure of its core operating performance that facilitates comparability of historical financial periods. FFO as Adjusted is calculated by making certain adjustments to FFO to account for items the Company does not believe are representative of ongoing core operating results, including non-comparable revenues and expenses. The Company's method of calculating FFO as Adjusted may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. * NOI: The Company uses NOI internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. The Company believes NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis, providing perspective not immediately apparent from net income. The Company calculates NOI using net income as defined by GAAP reflecting only those income and expense items that are incurred at the property level, adjusted for non-cash rental income and expense, and income or expenses that we do not believe are representative of ongoing operating results, if any. In addition, the Company uses NOI margin, calculated as NOI divided by total revenue, which the Company believes is useful to investors for similar reasons. The Company has historically defined this metric as "Cash NOI." There have been no changes to the calculation of this metric. However, the Company has decided to refer to this metric as "NOI" instead of "Cash NOI" to further clarify that, consistent with the definition of this metric, the revenue and expenses reflected in this metric include some accrued amounts and are not limited to amounts for which the Company actually received or made cash payment during the applicable period. * Same-property NOI: The Company provides disclosure of NOI on a same-property basis, which includes the results of properties that were owned and operated for the entirety of the reporting periods being compared, which total 74 properties for the three months ended September 30, 2020 and 2019 and 73 properties for the nine months ended September 30, 2020 and 2019. Information provided on a same-property basis excludes properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area ("GLA") is taken out of service and also excludes properties acquired or sold during the periods being compared. As such, same-property NOI assists in eliminating disparities in net income due to the development, redevelopment, acquisition or disposition of properties during the periods presented, and thus provides a more consistent performance measure for the comparison of the operating performance of the Company's properties. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when it is designated as a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan that is expected to have a significant impact on its operating income. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the NOI growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally one year after at least 80% of the expected NOI from the project is realized on a cash basis. Acquisitions are moved into the same-property pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment. The Company has also provided disclosure of NOI on a same-property basis adjusted to include redevelopment properties. Same-property NOI may include other adjustments as detailed in the Reconciliation of Net Income (Loss) to NOI and same-property NOI included in the tables accompanying this press release. The Company has historically defined this metric as "same-property Cash NOI." There have been no changes to the calculation of this metric. The Company has decided to refer to this metric as "same-property NOI" for the same reasons discussed above under "NOI," which we had historically defined as "Cash NOI." * EBITDAre and Adjusted EBITDAre: EBITDAre and Adjusted EBITDAre are supplemental, non-GAAP measures utilized by us in various financial ratios. The White Paper on EBITDAre, approved by Nareit's Board of Governors in September 2017, defines EBITDAre as net income (computed in accordance with GAAP), adjusted for interest expense, income tax expense, depreciation and amortization, losses and gains on the disposition of depreciated property, impairment write-downs of depreciated property and investments in unconsolidated joint ventures, and adjustments to reflect the entity's share of EBITDAre of unconsolidated joint ventures. EBITDAre and Adjusted EBITDAre are presented to assist investors in the evaluation of REITs, as a measure of the Company's operational performance as they exclude various items that do not relate to or are not indicative of our operating performance and because they approximate key performance measures in our debt covenants. Accordingly, the Company believes that the use of EBITDAre and Adjusted EBITDAre, as opposed to income before income taxes, in various ratios provides meaningful performance measures related to the Company's ability to meet various coverage tests for the stated periods. Adjusted EBITDAre may include other adjustments not indicative of operating results as detailed in the Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre included in the tables accompanying this press release. The Company also presents the ratio of net debt (net of cash) to annualized Adjusted EBITDAre as of September 30, 2020, and net debt (net of cash) to total market capitalization, which it believes is useful to investors as a supplemental measure in evaluating the Company's balance sheet leverage. The presentation of EBITDAre and Adjusted EBITDAre is consistent with EBITDA and Adjusted EBITDA as presented in prior periods.

The Company believes net income is the most directly comparable GAAP financial measure to the non-GAAP performance measures outlined above. Reconciliations of these measures to net income have been provided in the tables accompanying this press release.

Operating Metrics

The Company presents certain operating metrics related to our properties, including occupancy, leasing activity and rental rates. Operating metrics are used by the Company and are useful to investors in facilitating an understanding of the operational performance for our properties.

Occupancy metrics represent the percentage of occupied gross leasable area based on executed leases (including properties in development and redevelopment) and include leases signed, but for which rent has not yet commenced. Same-property portfolio occupancy includes properties that have been owned and operated for the entirety of the reporting periods being compared, which total 74 properties for the three months ended September 30, 2020 and 2019 and 73 properties for the nine months ended September 30, 2020 and 2019. Occupancy metrics presented for the Company's same-property portfolio excludes properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired within the past 12 months or properties sold during the periods being compared.

Executed new leases, renewals and exercised options are presented on a same-space basis. Same-space leases represent those leases signed on spaces for which there was a previous lease.

ADDITIONAL INFORMATION

For a copy of the Company's supplemental disclosure package, please access the "Investors" section of our website at www.uedge.com. Our website also includes other financial information, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports.

ABOUT URBAN EDGE

Urban Edge Properties is a NYSE listed real estate investment trust focused on managing, acquiring, developing, and redeveloping retail real estate in urban communities, primarily in the New York metropolitan region. Urban Edge owns 78 properties totaling 15.1 million square feet of gross leasable area.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Press Release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our actual future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this Press Release. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic, including (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance to large and small businesses, particularly our retail tenants, that have suffered significant declines in revenues as a result of mandatory business shut-downs, "shelter-in-place" or "stay-at-home" orders and social distancing practices, as well as to individuals adversely impacted by the COVID-19 pandemic, (b) the duration of any such orders or other formal recommendations for social distancing and the speed and extent to which revenues of our retail tenants recover following the lifting of any such orders or recommendations, (c) the potential impact of any such events on the obligations of the Company's tenants to make rent and other payments or honor other commitments under existing leases, (d) the potential adverse impact on returns from redevelopment projects, and (e) the broader impact of the severe economic contraction and increase in unemployment that has occurred in the short term and negative consequences that will occur if these trends are not quickly reversed; (ii) the loss or bankruptcy of major tenants, particularly in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic; (iii) the ability and willingness of the Company's tenants to renew their leases with the Company upon expiration, the Company's ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant, particularly, in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic and the significant uncertainty as to when and the conditions under which potential tenants will be able to operate physical retail locations in future; (iv) the impact of e-commerce on our tenants' business; (v) macroeconomic conditions, such as a disruption of, or lack of access to the capital markets, as well as the recent significant decline in the Company's share price from prices prior to the spread of the COVID-19 pandemic; (vi) the Company's success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company's revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company's borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of LIBOR after 2021; (ix) the Company's ability to pay down, refinance, restructure or extend its indebtedness as it becomes due and potential limitations on the Company's ability to borrow funds under its existing credit facility as a result of covenants relating to the Company's financial results; (x) potentially higher costs associated with the Company's development, redevelopment and anchor repositioning projects, and the Company's ability to lease the properties at projected rates; (xi) the Company's liability for environmental matters; (xii) damage to the Company's properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) the Company's ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches; and (xv) the loss of key executives. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Risk Factors" in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2019 and the other documents filed by the Company with the Securities and Exchange Commission.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Press Release. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Press Release.

URBAN EDGE PROPERTIESCONSOLIDATED BALANCE SHEETS(In thousands, except share and per share amounts)

September 30, December 31,

2020 2019

ASSETS

Real estate, at cost:

Land $ 527,749 $ 515,621

Buildings and improvements 2,332,337 2,197,076

Construction in progress 42,779 28,522

Furniture, fixtures and equipment 7,199 7,566

Total 2,910,064 2,748,785

Accumulated depreciation and amortization (719,755) (671,946)

Real estate, net 2,190,309 2,076,839

Right-of-use assets 77,183 81,768

Cash and cash equivalents 646,432 432,954

Restricted cash 24,564 52,182

Tenant and other receivables 24,376 21,565

Receivable arising from the straight-lining of 64,171 73,878 rents

Identified intangible assets, net of accumulated 54,870 48,121 amortization of $35,057 and $30,942, respectively

Deferred leasing costs, net of accumulated 19,618 21,474 amortization of $17,054 and $16,560, respectively

Deferred financing costs, net of accumulated 3,625 3,877 amortization of $4,540 and $3,765, respectively

Prepaid expenses and other assets 29,167 33,700

Total assets $ 3,134,315 $ 2,846,358



LIABILITIES AND EQUITY

Liabilities:

Mortgages payable, net $ 1,590,304 $ 1,546,195

Unsecured credit facility borrowings 250,000 -

Lease liabilities 75,965 79,913

Accounts payable, accrued expenses and other 68,396 76,644 liabilities

Identified intangible liabilities, net ofaccumulated amortization of $69,368 and $62,610, 125,766 128,830 respectively

Total liabilities 2,110,431 1,831,582

Commitments and contingencies

Shareholders' equity:

Common shares: $0.01 par value; 500,000,000shares authorized and 116,701,311 and 121,370,125 1,166 1,213 shares issued and outstanding, respectively

Additional paid-in capital 987,436 1,019,149

Accumulated deficit (4,593) (52,546)

Noncontrolling interests:

Operating partnership 39,451 46,536

Consolidated subsidiaries 424 424

Total equity 1,023,884 1,014,776

Total liabilities and equity $ 3,134,315 $ 2,846,358

URBAN EDGE PROPERTIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share amounts)

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2020

2019

2020

2019

REVENUE

Rental revenue

$

75,359

$

90,769

$

241,624

$

289,565

Management and development fees

404

280

1,003

940

Other income

75

194

190

1,217

Total revenue

75,838

91,243

242,817

291,722

EXPENSES

Depreciation and amortization

22,888

21,496

69,658

65,893

Real estate taxes

14,916

14,490

44,778

45,188

Property operating

13,436

14,075

39,867

45,552

General and administrative

8,700

8,353

36,600

28,943

Casualty and impairment loss, net

-

-

-

9,070

Lease expense

3,415

3,486

10,200

11,037

Total expenses

63,355

61,900

201,103

205,683

Gain on sale of real estate

-

39,716

39,775

68,219

Gain on sale of lease

-

1,849

-

1,849

Interest income

282

2,706

2,387

7,670

Interest and debt expense

(18,136)

(16,861)

(53,884)

(49,869)

Gain on extinguishment of debt

-

-

34,908

-

Income (loss) before income taxes

(5,371)

56,753

64,900

113,908

Income tax (expense) benefit

(459)

(53)

13,103

(1,249)

Net income (loss)

(5,830)

56,700

78,003

112,659

Less net (income) loss attributable to noncontrolling interests in:

Operating partnership

225

(2,662)

(3,373)

(6,535)

Consolidated subsidiaries

-

2

-

24

Net income (loss) attributable to common shareholders

$

(5,605)

$

54,040

$

74,630

$

106,148

Earnings (loss) per common share - Basic:

$

(0.05)

$

0.45

$

0.63

$

0.89

Earnings (loss) per common share - Diluted:

$

(0.05)

$

0.45

$

0.63

$

0.89

Weighted average shares outstanding - Basic

116,625

121,087

118,033

119,259

Weighted average shares outstanding - Diluted

116,625

121,183

118,111

126,489

Reconciliation of Net Income (Loss) to FFO and FFO as Adjusted

The following table reflects the reconciliation of net income (loss) to FFO and FFO as Adjusted for the three and nine months ended September 30, 2020 and 2019, respectively. Net income (loss) is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a description of FFO and FFO as Adjusted.

URBAN EDGE PROPERTIESCONSOLIDATED STATEMENTS OF INCOME(In thousands, except share and per share amounts)

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

2020 2019 2020 2019

REVENUE

Rental revenue $ 75,359 $ 90,769 $ 241,624 $ 289,565

Management and development 404 280 1,003 940 fees

Other income 75 194 190 1,217

Total revenue 75,838 91,243 242,817 291,722

EXPENSES

Depreciation and 22,888 21,496 69,658 65,893 amortization

Real estate taxes 14,916 14,490 44,778 45,188

Property operating 13,436 14,075 39,867 45,552

General and administrative 8,700 8,353 36,600 28,943

Casualty and impairment - - - 9,070 loss, net

Lease expense 3,415 3,486 10,200 11,037

Total expenses 63,355 61,900 201,103 205,683

Gain on sale of real - 39,716 39,775 68,219 estate

Gain on sale of lease - 1,849 - 1,849

Interest income 282 2,706 2,387 7,670

Interest and debt expense (18,136) (16,861) (53,884) (49,869)

Gain on extinguishment of - - 34,908 - debt

Income (loss) before (5,371) 56,753 64,900 113,908 income taxes

Income tax (expense) (459) (53) 13,103 (1,249) benefit

Net income (loss) (5,830) 56,700 78,003 112,659

Less net (income) lossattributable to noncontrolling interestsin:

Operating partnership 225 (2,662) (3,373) (6,535)

Consolidated subsidiaries - 2 - 24

Net income (loss)attributable to common $ (5,605) $ 54,040 $ 74,630 $ 106,148 shareholders



Earnings (loss) per common $ (0.05) $ 0.45 $ 0.63 $ 0.89 share - Basic:

Earnings (loss) per common $ (0.05) $ 0.45 $ 0.63 $ 0.89 share - Diluted:

Weighted average shares 116,625 121,087 118,033 119,259 outstanding - Basic

Weighted average shares 116,625 121,183 118,111 126,489 outstanding - Diluted



Reconciliation of Net Income (Loss) to FFO and FFO as Adjusted

The following table reflects the reconciliation of net income (loss) to FFO and FFO as Adjusted for the three and nine months ended September 30, 2020 and 2019, respectively. Net income (loss) is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a description of FFO and FFO as Adjusted.

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

2020 2019 2020 2019

Net income (loss) $ (5,830) $ 56,700 $ 78,003 $ 112,659

Less net (income) lossattributable to noncontrolling interestsin:

Operating partnership 225 (2,662) (3,373) (6,535)

Consolidated subsidiaries - 2 - 24

Net income (loss)attributable to common (5,605) 54,040 74,630 106,148 shareholders

Adjustments:

Rental propertydepreciation and 22,710 21,262 69,102 65,233 amortization

Gain on sale of real estate - (39,716) (39,775) (68,219)

Real estate impairment loss - - - 22,653

Limited partnershipinterests in operating (225) 2,662 3,373 6,535 partnership

FFO Applicable to diluted 16,880 38,248 107,330 132,350 common shareholders

FFO per diluted common 0.14 0.30 0.87 1.05 share^(1)

Adjustments to FFO:

Write-off of receivablesarising from the 4,656 - 10,704 - straight-lining of rents

Tax impact of Puerto Rico 1,205 - (12,161) - transactions^(2)

Transaction, severance and 77 167 1,368 951 other expenses

Gain on extinguishment of - - (34,908) - debt

Executive transition costs^ - - 7,152 375 (3)

Casualty gain, net - - - (13,583)

Gain on sale of lease - (1,849) - (1,849)

Impact from tenant - - - (7,366) bankruptcies^(4)

Tax impact from Hurricane - - - 1,111 Maria

Tenant bankruptcy - (63) - (925) settlement income

FFO as Adjusted applicableto diluted common $ 22,818 $ 36,503 $ 79,485 $ 111,064 shareholders

FFO as Adjusted per diluted $ 0.19 $ 0.29 $ 0.65 $ 0.88 common share^(1)



Weighted Average diluted 121,378 126,374 123,174 126,490 common shares^(1)

(1)Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the three and nine months ended September 30, 2020 and September 30, 2019, respectively are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of LTIP and OP units which may be redeemed for our common shares.

(2)Amount for the three months ended September 30, 2020 reflects $1.7 million of income tax expense as a result of the gain on extinguishment of debt associated with the refinancing transaction that occurred at the Company's mall in Puerto Rico, The Outlets at Montehiedra, offset by $0.5 million of income tax benefit attributable to the write-off of receivables arising from the straight-lining of rents. The amount for the nine months ended September 30, 2020 includes these amounts and reflects the income tax benefit associated with the refinancing transaction that occurred at the Company's mall in Puerto Rico in June 2020.

(3)Amount for the nine months ended September 30, 2020 reflects costs associated with the termination of the Company's former President of Development. Amount for the nine months ended September 30, 2019 reflects costs associated with the retirement of the Company's former Chief Operating Officer.

(4)Amount for the nine months ended September 30, 2019 reflects a write-off of the below-market intangible liability connected with the rejection of our Kmart lease in Huntington, NY.

Reconciliation of Net Income (Loss) to NOI and Same-Property NOI

The following table reflects the reconciliation of net income (loss) to NOI, same-property NOI and same-property NOI including properties in redevelopment for the three and nine months ended September 30, 2020 and 2019, respectively. Net income (loss) is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a description of NOI and same-property NOI.

Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the three and nine months ended September 30, 2020(1) and September 30, 2019, respectively are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of LTIP and OP units which may be redeemed for our common shares.

Amount for the three months ended September 30, 2020 reflects $1.7 million of income tax expense as a result of the gain on extinguishment of debt associated with the refinancing transaction that occurred at the Company's mall in Puerto Rico, The Outlets at Montehiedra, offset by $0.5 million of(2) income tax benefit attributable to the write-off of receivables arising from the straight-lining of rents. The amount for the nine months ended September 30, 2020 includes these amounts and reflects the income tax benefit associated with the refinancing transaction that occurred at the Company's mall in Puerto Rico in June 2020.

Amount for the nine months ended September 30, 2020 reflects costs associated with the termination of the Company's former President of(3) Development. Amount for the nine months ended September 30, 2019 reflects costs associated with the retirement of the Company's former Chief Operating Officer.

Amount for the nine months ended September 30, 2019 reflects a write-off of(4) the below-market intangible liability connected with the rejection of our Kmart lease in Huntington, NY.

Reconciliation of Net Income (Loss) to NOI and Same-Property NOI

The following table reflects the reconciliation of net income (loss) to NOI, same-property NOI and same-property NOI including properties in redevelopment for the three and nine months ended September 30, 2020 and 2019, respectively. Net income (loss) is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a description of NOI and same-property NOI.

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

(Amounts in thousands) 2020 2019 2020 2019

Net income (loss) $ (5,830) $ 56,700 $ 78,003 $ 112,659

Management and developmentfee income from non-owned (404) (280) (1,003) (940) properties

Other expense 257 251 713 799

Depreciation and 22,888 21,496 69,658 65,893 amortization

General and administrative 8,700 8,353 36,600 28,943 expense

Casualty and impairment - - - 9,070 loss, net^(1)

Gain on sale of real - (39,716) (39,775) (68,219) estate

Gain on sale of lease - (1,849) - (1,849)

Interest income (282) (2,706) (2,387) (7,670)

Interest and debt expense 18,136 16,861 53,884 49,869

Gain on extinguishment of - - (34,908) - debt

Income tax expense 459 53 (13,103) 1,249 (benefit)

Non-cash revenue and 2,095 (1,790) 3,338 (12,953) expenses

NOI^(2) 46,019 57,373 151,020 176,851

Adjustments:

Non-same property NOI^(3) (2,285) (2,559) (8,561) (10,981)

Tenant bankruptcysettlement income and (251) (374) (758) (1,553) lease termination income

Same-property NOI $ 43,483 $ 54,440 $ 141,701 $ 164,317

NOI related to properties 702 658 2,055 1,793 being redeveloped

Same-property NOIincluding properties in $ 44,185 $ 55,098 $ 143,756 $ 166,110 redevelopment

(1)The nine months ended September 30, 2019 reflect real estate impairment losses, offset by insurance proceeds for Hurricane Maria at our two malls in Puerto Rico and for tornado damage at our shopping center in Wilkes-Barre, PA.

(2)The Company has historically defined this metric as "Cash NOI." There have been no changes to the calculation.

(3)Non-same property NOI includes NOI related to properties being redeveloped and properties acquired or disposed in the period.

Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre

The following table reflects the reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2020 and 2019, respectively. Net income (loss) is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a description of EBITDAre and Adjusted EBITDAre.

The nine months ended September 30, 2019 reflect real estate impairment losses, offset by insurance proceeds for Hurricane Maria at our two malls(1) in Puerto Rico and for tornado damage at our shopping center in Wilkes-Barre, PA.

The Company has historically defined this metric as "Cash NOI." There have(2) been no changes to the calculation.

Non-same property NOI includes NOI related to properties being redeveloped(3) and properties acquired or disposed in the period.

Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre

The following table reflects the reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2020 and 2019, respectively. Net income (loss) is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a description of EBITDAre and Adjusted EBITDAre.

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

(Amounts in thousands) 2020 2019 2020 2019

Net income (loss) $ (5,830) $ 56,700 $ 78,003 $ 112,659

Depreciation and 22,888 21,496 69,658 65,893 amortization

Interest and debt expense 18,136 16,861 53,884 49,869

Income tax expense 459 53 (13,103) 1,249 (benefit)

Gain on sale of real - (39,716) (39,775) (68,219) estate

Real estate impairment - - - 22,653 loss

EBITDAre 35,653 55,394 148,667 184,104

Adjustments for Adjusted EBITDAre:

Write-off of receivablearising from the 4,656 - 10,704 - straight-lining of rents

Transaction, severance and 77 167 1,368 951 other expenses

Gain on extinguishment of - - (34,908) - debt

Executive transition costs - - 7,152 375 ^(1)

Casualty gain, net - - - (13,583)

Impact from tenant - - - (7,366) bankruptcies^(1)

Gain on sale of lease - (1,849) - (1,849)

Tenant bankruptcy - (63) - (925) settlement income

Adjusted EBITDAre $ 40,386 $ 53,649 $ 132,983 $ 161,707



(1)Refer to footnotes on page 8, Reconciliation of Net Income (Loss) to FFO and FFO as Adjusted, for the adjustments included in these line items.

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CONTACT: Mark Langer, EVP and Chief Financial Officer 212-956-2556