The Company also maintains a $20 million unsecured revolving credit facility with PNC Bank, National Association (“PNC,” the “PNC Facility” and,together with the Unsecured Credit Facility, the “Revolving Credit Facilities”). The PNC Facility terms are substantially consistent with those contained in the Unsecured Credit Facility. Additionally, the Company has provided an unconditional guaranty to PNC with respect to any obligations of RVI outstanding from time to time under a $30 million revolving credit agreement entered into by RVI with PNC. RVI has agreed to reimburse the Company for any amounts paid to PNC pursuant to the guaranty plus interest at a contracted rate and to pay an annual commitment fee to the Company on account of the guaranty.

The Company’s borrowings under the Revolving Credit Facilities bear interest at variable rates at the Company’s election, based on either LIBOR plus a specified spread (0.90% at September 30, 2020) or the Alternative Base Rate, as defined in the respective facility, plus a specified spread (0% at September 30, 2020). The specified spreads vary depending on the Company’s long-term senior unsecured debt rating from Moody’s Investors Service, Inc., S&P Global Ratings, Fitch Investor Services, Inc. and their successors. The Company is required to comply with certain covenants under the Revolving Credit Facilities relating to total outstanding indebtedness, secured indebtedness, value of unencumbered real estate assets and fixed charge coverage. The Company was in compliance with these financial covenants at September 30, 2020.

In March 2020, the Company redeemed the entire $200.0 million outstanding aggregate principal amount of its 4.625% Senior Notes due 2022 (the “Senior Notes due 2022”). In connection with the redemption of the Senior Notes due 2022, the Company paid a make-whole amount of $16.6 million. This make-whole amount is included in Other (expense) income, net, in the Company’s consolidated statements of operations.

8.	Fair Value Measurements

The Company utilized the methods and assumptions described below in estimating fair value disclosures of debt. The fair market value of senior notes is determined using a pricing model to approximate the trading price of the Company’s public debt. The fair market value for all other debt is estimated using a discounted cash flow technique that incorporates future contractual interest and principal payments and a market interest yield curve with adjustments for duration, optionality and risk profile, including the Company’s non-performance risk and loan to value. The Company’s senior notes and all other debt are classified as Level 2 and Level 3, respectively, in the fair value hierarchy.

Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments.

Carrying values that are different from estimated fair values are summarized as follows (in thousands):

9.	Other Comprehensive Loss

The changes in Accumulated Other Comprehensive Loss by component are as follows (in thousands):

(A)	Included in this amount, $0.1 million is classified as interest expense and $1.1 million is classified as other expense in the Company’s consolidated statement of operations for the nine months ended September 30, 2020.

10.	Impairment Charges and Reserves

The Company recorded impairment charges and reserves based on the difference between the carrying value of the assets or investments and the estimated fair market value as follows (in millions):

(A)	As a result of an aggregate valuation allowance on its preferred equity interests in the BRE DDR Joint Ventures (Note 3).

The Company is required to assess the fair value of certain impaired consolidated and unconsolidated joint venture investments. The valuation of impaired real estate assets and investments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each asset, as well as the income capitalization approach considering prevailing market capitalization rates, analysis of recent comparable sales transactions, actual sales negotiations and bona fide purchase offers received from third parties and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence. In general, the Company considers multiple valuation techniques when measuring fair value of an investment. However, in certain circumstances, a single valuation technique may be appropriate.

For operational real estate assets, the significant valuation assumptions included the capitalization rate used in the income capitalization valuation, as well as the projected property net operating income and expected hold period. For projects under development or not at stabilization, the significant assumptions included the discount rate, the timing and the estimated costs for the construction completion and project stabilization, projected net operating income and the exit capitalization rate. For the valuation of the preferred equity interests, the significant assumptions used in the discounted cash flow analysis included the discount rate, projected net operating income, the timing of the expected redemption and the exit capitalization rates. The preferred equity interest valuation as of September 30, 2020 considered the projected cash flows expected to be received by the Company as additional transaction consideration in connection with the agreements to terminate the BRE DDR Joint Ventures as discussed in Note 3. For investments in unconsolidated joint ventures, the Company also considered the valuation of any underlying joint venture debt and terms of the joint venture agreement. These valuations were calculated based on market conditions and assumptions made by management at the time the valuation adjustments and impairments were recorded, which may differ materially from actual results if market conditions or the underlying assumptions change.

The following table presents information about the Company’s reserves on financial assets that were measured on a fair value basis for the nine months ended September 30, 2020. The table also indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions):

The following table presents quantitative information about the significant unobservable inputs used by the Company to determine the fair value (in millions):

11.	Earnings Per Share

The following table provides a reconciliation of net income and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares (in thousands, except per share amounts).

For the three and nine months ended September 30, 2020, Performance Restricted Stock Units (“PRSUs”) issued to certain executives in March 2020, March 2019 and March 2017 (not outstanding for the three months ended September 30, 2020) were anti-dilutive and not considered in the computation of EPS, as no share units would have been issued under the plan if the performance period would have ended on September 30, 2020. The PRSUs issued in March 2018 were considered in the computation of EPS for the three months ended September 30, 2020, but were anti-dilutive and not included in the computation of EPS for the nine months ended September 30, 2020. For the three and nine months ended September 30, 2019, the PRSUs issued in March 2019 and March 2018 were dilutive and considered in the computation of EPS and the PRSUs issued in March 2017 were anti-dilutive and not considered in the computation of diluted EPS. For the three and nine months ended September 30, 2020, the Company recorded a mark-to-market adjustment of $0.3 million as expense and $1.6 million as income, respectively, and for the three and nine months ended September 30, 2019, the Company recorded a mark-to-market adjustment of $1.4 million and $2.8 million, respectively, as expense in each case, primarily in connection with the PRSUs issued in March 2018.

For the three months ended September 30, 2020, Operating Partnership Units (“OPs”) outstanding were dilutive and considered in the computation of EPS. OPs were anti-dilutive for the nine months ended September 30, 2020 and for the three and nine months ended September 30, 2019 and not considered in the computation of EPS.

In 2018, the Company’s Board of Directors authorized a common share repurchase program. In the first nine months of 2020, the Company repurchased 0.8 million shares at a cost of $7.5 million. These shares are recorded as Treasury Shares on the Company’s consolidated balance sheet.

12.	Segment Information

The tables below present information about the Company’s reportable operating segments (in thousands):

(A)	Unallocated expenses consist of General and Administrative Expenses and Interest Expense as listed in the Company’s consolidated statements of operations.

(B)

Amount includes BRE DDR Joint Venture preferred investment interests (Note 3) classified in Investments in and Advances to Joint Ventures on the Company’s consolidated balance sheets. Blackstone has the right to defer up to 23.5% of the preferred fixed distributions as a payment in kind distribution or “PIK.” The preferred investments have an annual distribution rate of 8.5% including any deferred and unpaid preferred distributions. Blackstone has made this PIK deferral election since the formation of both joint ventures. The cash portion of the preferred fixed distributions is generally payable first out of operating cash flows and is current for both BRE DDR Joint Ventures. The Company has no expectation that the cash portion of the preferred fixed distribution will become impaired.

~~The unpaid preferred~~ investment (and any accrued distributions) is payable (1) at Blackstone’s option, in whole or in part, subject to early redemption premiums in certain circumstances during the first three years of the joint ventures; (2) at varying equity sharing levels with the common members under certain circumstances including specified financial covenants, upon a sale of properties over a certain threshold; (3) at DDR’s option after seven years (2021 for BRE DDR III and 2022 for BRE DDR IV); and (4) upon the incurrence of additional indebtedness by the joint ventures in excess of a certain threshold. Specifically, for BRE DDR III as of September 30, 2017, based upon the cumulative asset sales, net asset sale proceeds will be allocated at 51.9% to the preferred member. For BRE DDR IV, the preferred investment is collateralized by assets in which DDR has a 5% common equity interest for 95% of the value and by an additional three assets in which DDR has a nominal interest. The repayment of the BRE DDR IV preferred investment prior to 2022 is first subject to a remaining minimum net asset sales threshold of $4.9 million, of which $1.1 million is allocated to the preferred member. The net asset sale proceeds generated thereafter are expected to be available to repay the preferred member.

In the first quarter of 2017, the Company recorded a valuation allowance on each of the BRE DDR III and BRE DDR IV preferred investment interests of $70.0 million and $6.0 million, respectively, or $76.0 million in the aggregate. The valuation allowances were triggered late in the first quarter by an increase in the estimated market capitalization rates for the underlying real estate collateral of the investments. The values of open air shopping centers anchored by big box national retailers, particularly in secondary markets, have been under increasing pressure and most recently decreased due to the continued perceived threat of internet retail competition and recent tenant bankruptcies. Several large national retailers filed for bankruptcy in March and April 2017. A majority of the shopping centers collateralizing the preferred investments are those which have been most impacted by the rising capitalization rates. These factors have also reduced the number of potential investors and well-capitalized buyers for these types of assets. The managing member of the two joint ventures exercises significant influence over the timing of asset sales. Due to the Company’s expectation regarding the likely timing of asset sales, the valuation of the Company’s investments considers how management believes a third-party market participant would value the securities in the current higher capitalization rate environment. As a result, the investments were impaired to reflect the risk that the securities are not repaid in full in advance of the Company’s redemption rights in 2021 and 2022. The Company reassessed the aggregate valuation allowance at September 30, 2017, and based upon actual timing and values of recent property sales as well as current market assumptions, the Company adjusted the allowance on each of the BRE DDR III and BRE DDR IV preferred investment interests by a reduction of $18.1 million and an increase of $2.7 million, respectively, or $15.4 million in the aggregate, resulting in a net valuation allowance of $60.6 million. The valuation allowance is recorded as Reserve/Adjustment of Preferred Equity Interests on the Company’s consolidated statements of operations. The Company will continue to monitor the investments and related valuation allowance which could be increased or decreased in future periods, as appropriate.

As discussed above, the preferred 8.5% distribution rate has two components, a cash interest rate of 6.5% and an accrued PIK of 2.0%. As a result of the valuation allowances recorded, effective in March 2017, the Company no longer recognizes as interest income the 2.0% PIK (aggregating $4.5 million at September 30, 2017). Although Blackstone has the right to change its payment election, the Company expects future preferred distributions to continue to include the PIK component. The recognition of the PIK interest income will be reevaluated based upon any future adjustments to the aggregate valuation allowance, as appropriate.

~~DDRM Properties (formerly DDR Domestic Retail Fund I)~~

In June 2017, the Company and an affiliate of Madison International Realty (“Madison”) recapitalized a joint venture with 52 shopping centers previously owned by the Company and various partners through the DDR Domestic Retail Fund I, totaling $1.05 billion. Madison International Real Estate Liquidity Fund VI, an investment fund managed by Madison, acquired 80% of the common equity and an affiliate of the Company retained its 20% interest. This ownership structure is consistent with the structure of the joint venture prior to the recapitalization. In addition, the Company will continue to provide leasing and management services. The recapitalization included the repayment of all outstanding mortgage debt previously held by the joint venture, a majority of which was scheduled to mature in July 2017. The joint venture obtained new mortgage loan financing aggregating $706.7 million (of which the Company’s pro rata share is $141.3 million) collateralized by the 52 assets with a maturity date of July 2022, including extensions. The Company contributed $46.9 million in cash to fund its pro rata share of the recapitalization and related debt refinancing.

The remaining three assets not involved in the recapitalization were distributed to the existing partners of DDR Domestic Retail Fund I at the aggregate book value of $74.0 million (of which the Company’s pro rata share was $14.8 million) and contributed to a new joint venture with the same ownership structure, DDR Manatee Liquidating Holdco I. The Company retained a 20% interest in the joint venture and will continue to provide leasing and management services. The assets in the joint venture are unencumbered.

~~Disposition of Shopping Centers~~

From January 1, 2017 to September 30, 2017, the BRE DDR Retail Holdings III joint venture sold eight assets for an aggregate sales price of $164.3 million and recorded a gain on sale of $30.9 million. The DDRTC Core Retail Fund joint venture sold one asset for $17.7 million. The Company’s prorate share of the aggregate gain form these sales was $2.0 million.

3.	~~Acquisitions~~

In January 2017, the Company acquired one shopping center in Chicago, Illinois, for $81.0 million. This acquisition was accounted for as an asset acquisition and the fair value was allocated as follows (in thousands):

Weighted-Average
Amortization Period
(in Years)

Land
$
23,588

N/A

Buildings

35,659

(A)

Tenant improvements

8,565

(A)

In-place leases (including lease origination costs and fair market value of leases)

7,051

16.0

Tenant relations

6,934

16.3

Other assets

419

N/A

82,216

Less: Below-market leases

(1,872
)

20.0

Less: Other liabilities assumed

(581
)

N/A

Net assets acquired
$
79,763

~~(A)~~

~~Depreciated in accordance with the Company’s policy.~~

Total consideration for the acquisition was paid in cash. The costs related to the acquisition of this asset were capitalized to real estate assets (Note 1). Included in the Company’s consolidated statements of operations are $5.1 million in total revenues from the date of acquisition through September 30, 2017, for the acquired property.

4.	~~Notes Receivable~~

The Company has notes receivable, including accrued interest, that are collateralized by certain rights in development projects, partnership interests, sponsor guaranties and/or real estate assets, some of which are subordinate to other financings. At September 30, 2017, the Company’s loans outstanding had maturity dates ranging from June 2019 to June 2023 at an interest rate of 9.0%. At September 30, 2017, the Company did not have any loans outstanding that were past due. The following table reconciles the loans receivable on real estate (in thousands):

2017

2016

Balance at January 1
$
49,488

$
41,988

Additions:

New mortgage loans

—

6,802

Interest

1,826

2,306

Accretion of discount

269

773

Deductions:

Collections of principal and interest^(A)

(32,004
)

(7,090
)
Balance at September 30
$
19,579

$
44,779

~~(A)~~

~~In April 2017, a loan receivable of $30.6 million with a maturity date of September 2017 was repaid in full.~~

5.	~~Other Assets, Net~~

~~Other assets consist of the following (in thousands):~~

September 30, 2017

December 31, 2016

Intangible assets:

In-place leases, net
$
79,257

$
99,600

Above-market leases, net

16,100

20,405

Lease origination costs

10,976

12,931

Tenant relations, net

93,153

108,662

Total intangible assets, net^(A)

199,486

241,598

Other assets:

Prepaid expenses^(B)

18,870

26,842

Other assets

1,992

6,274

Deposits

5,766

5,965

Deferred charges, net

8,359

4,731

Total other assets, net
$
234,473

$
285,410

~~(A)~~

The Company recorded amortization expense related to its intangibles, excluding above- and below-market leases, of $14.4 million and $13.9 million for the three months ended September 30, 2017 and 2016, respectively, and $47.0 million and $54.6 million for the nine months ended September 30, 2017 and 2016, respectively.

~~(B)~~

In the third quarter of 2017, the Company recorded a valuation allowance aggregating $8.8 million on its aggregate $14.8 million prepaid tax related to the estimated built-in gains associated with the real estate assets in Puerto Rico. The prepaid tax triggered an impairment based upon the results of the Company’s probability-weighted undiscounted cash flow impairment test.

6.	~~Revolving Credit Facilities~~

~~The following table discloses certain information regarding the Company’s Revolving Credit Facilities (as defined below) (in millions):~~

Carrying Value at
September 30, 2017

Weighted-Average
Interest Rate (A) at
September 30, 2017

Maturity Date
Unsecured Credit Facility

$
60.0

2.2%

September 2021
PNC Facility

—

N/A

September 2021

~~(A)~~

~~Interest rate on variable-rate debt was calculated using the base rate and spreads in effect at September 30, 2017.~~

In September 2017, the Company amended and restated its unsecured revolving credit facility with a syndicate of financial institutions, arranged by J.P. Morgan Chase Bank, N.A., Wells Fargo Securities, LLC, Citizens Bank, N.A., RBC Capital Markets and U.S. Bank National Association (the “Unsecured Credit Facility”). The Unsecured Credit Facility was amended to increase borrowings of up to $950 million from $750 million and to extend the maturity date to September 2021, if certain financial covenants are maintained. The amendment also provided for two six-month options to extend the maturity to September 2022 upon the Company’s request and increased the accordion feature for expansion of availability up to $1.45 billion from $1.25 billion, provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level. The Unsecured Credit Facility includes a competitive bid option on periodic interest rates for up to 50% of the facility. The Unsecured Credit Facility also provides for an annual facility fee, which was 20 basis points on the entire facility at September 30, 2017.

The Company also maintains a $50 million unsecured revolving credit facility with PNC Bank, National Association (the “PNC Facility” and, together with the Unsecured Credit Facility, the “Revolving Credit Facilities”). The PNC Facility was also amended in September 2017 to reflect substantially the same terms as amended in the Unsecured Credit Facility.

The Company’s borrowings under the Revolving Credit Facilities bear interest at variable rates at the Company’s election, based on either LIBOR, plus a specified spread (1.0% at September 30, 2017) or the Prime Rate, as defined in the respective facility. The specified spreads vary depending on the Company’s long-term senior unsecured debt rating from Moody’s Investors Service, Inc. and S&P Global Ratings and their successors. The Company is required to comply with certain covenants under the Revolving Credit Facilities relating to total outstanding indebtedness, secured indebtedness, value of unencumbered real estate assets and fixed charge coverage. The Company was in compliance with these financial covenants at September 30, 2017.

7.	~~Unsecured Indebtedness~~

~~Senior Notes~~

In August 2017, the Company issued $350.0 million aggregate principal amount of 3.900% senior unsecured notes due August 2024. An effective discount of $1.0 million was recorded. Total fees, including underwriting discounts, incurred by the Company were $2.9 million. In May 2017, the Company issued $450.0 million aggregate principal amount of 4.700% senior unsecured notes due June 2027. An effective discount of $0.8 million was recorded. Total fees, including underwriting discounts, incurred by the Company were $4.0 million. In September 2017, the Company repaid all of its 7.875% senior unsecured notes due September 2020 with an aggregate principal amount outstanding of $300.0 million. In connection with the redemption of the senior unsecured notes due September 2020, the Company paid a make-whole amount of $51.2 million. In July 2017, the Company repaid all of its 4.75% senior unsecured notes due April 2018 with an aggregate principal amount outstanding of $300.0 million. In connection with the redemption of the senior unsecured notes due April 2018, the Company paid a make-whole amount of $7.3 million. These make-whole amounts are included in Other income (expense), net, in the Company’s consolidated statements of operations.

~~Unsecured Term Loan~~

In September 2017, the Company amended its $400 million unsecured term loan with Wells Fargo Bank, National Association, as administrative agent, and PNC Bank, National Association and KeyBank National Association, as syndication agents (the “Unsecured Term Loan”). As a result, the maturity date of $200 million of Tranche A loans under the Unsecured Term Loan was extended to January 2018, with two one-year extension options upon the Company’s request, provided certain conditions are satisfied and the maturity date for the remaining $200 million of Tranche B loans under the facility was extended to January 2023. The Company may increase the amount of the facility provided that lenders agree to certain terms. The interest rate remains unchanged at variable rates based on LIBOR as defined in the loan agreements, plus a specified spread based on the Company’s long-term senior unsecured debt rating (1.1% at September 30, 2017).

~~Scheduled Principal Repayments~~

The Company’s scheduled principal repayments, after reflecting the 2017 refinancings and repayments, are presented in Liquidity, Capital Resources and Financing Activities section of Management’s Discussion and Analysis included herein.

8.	~~Financial Instruments and Fair Value Measurements~~

~~The following methods and assumptions were used by the Company in estimating fair value disclosures of financial instruments:~~

~~Notes Receivable and Advances to Affiliates~~

The fair value is estimated using a discounted cash flow analysis in which the Company uses unobservable inputs such as market interest rates determined by the loan to value and market capitalization rates related to the underlying collateral at which management believes similar loans would be made and classified as Level 3 in the fair value hierarchy. The fair value of these notes was approximately $348.7 million and $445.2 million at September 30, 2017 and December 31, 2016, respectively, as compared to the carrying amounts of $347.3 million and $443.3 million, respectively.

~~Debt~~

The fair market value of senior notes is determined using the trading price of the Company’s public debt. The fair market value for all other debt is estimated using a discounted cash flow technique that incorporates future contractual interest and principal payments and a market interest yield curve with adjustments for duration, optionality and risk profile, including the Company’s non-performance risk and loan to value. The Company’s senior notes and all other debt are classified as Level 2 and Level 3, respectively, in the fair value hierarchy.

~~Debt instruments with carrying values that are different than estimated fair values are summarized as follows (in thousands):~~

September 30, 2017

December 31, 2016

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

Senior Notes
$
2,809,404

$
2,896,258

$
2,913,217

$
3,056,896

Revolving Credit Facilities and term loans

457,858

460,782

598,242

601,131

Mortgage Indebtedness

750,269

771,052

982,509

1,012,869

$
4,017,531

$
4,128,092

$
4,493,968

$
4,670,896

9.	~~Commitments and Contingencies~~

~~Hurricane Casualty and Impairment Loss~~

At September 30, 2017, the Company owned 12 assets in Puerto Rico, aggregating 4.4 million square feet of Company-owned GLA. One of the 12 assets (Plaza Palma Real, consisting of approximately 0.4 million of Company-owned GLA) was severely damaged; it is currently not operational, except for one tenant, and is not expected to open for the foreseeable future. The other 11 assets incurred varying degrees of damage, including some tenant spaces currently untenantable. The damage consisted primarily of roof and HVAC system damage and water intrusion. As of October 31, 2017, nine of these assets had partial to full utility power and were available for occupancy by some tenants, although due to the damage, portions of these properties remain unavailable for occupancy. With respect to the Company’s anchor spaces comprising greater than 25,000 square feet of GLA in Puerto Rico, 24, or 73% of such tenants, had utility or generator power and were open as of October 31, 2017, including six of seven Walmart stores, a Sam's Club, both Home Depot stores, all three Sears/Kmart and all five grocery stores (including Pueblo, Econo and Selectos Supermarket).

The Company has completed debris removal, roof repairs, interior building mitigation, repairs to building exteriors and repairs to mechanical systems to prevent further water intrusion and related damages at its Puerto Rico shopping centers and continues to assess the scope of necessary repairs. The schedule of additional repair work, as well as the ability to turn over space to tenants, is highly dependent on the full restoration of utilities at all of its shopping centers in Puerto Rico, and the availability of building materials, supplies and skilled labor. The Company does not currently know when full utility service will be restored at the shopping centers with partial or no service, or the extent of the services that will be provided in the interim, if any. As such, the Company is unable to estimate when repair work will be completed or when the remaining tenants will reopen for business.

The Company maintains insurance on its assets in Puerto Rico with policy limits of approximately $330 million for both property damage and business interruption. The Company's insurance policies are subject to various terms and conditions, including a combined property damage and business interruption deductible of approximately $6.0 million. The Company expects that its casualty insurance and business interruption claims to include the costs to clean up, repair and rebuild, as well as lost revenue. The Company also expects to receive casualty insurance proceeds from certain U.S.-based anchor tenants that maintain property insurance of their Company-owned premises. The Company is unable to estimate the impact of potential increased costs associated with resource constraints in Puerto Rico relating to building materials, supplies and labor. The Company believes it maintains adequate insurance coverage on each of its properties and is working closely with the insurance carriers to obtain the maximum amount of insurance recovery provided under the policies. However, the Company can give no assurances as to the amounts of such claims, timing of payments and resolution of the claims.

As of September 30, 2017, the estimated net book value of the property damage written off for damage to the Company’s Puerto Rico assets was $64.8 million. However, the Company is still assessing the impact of the hurricane on its properties, and the final net book value write-offs could vary significantly from this estimate. Any changes to this estimate will be recorded in the periods in which they are determined.

The Company recorded a corresponding receivable of $59.7 million for estimated insurance recoveries related to the net book value of the property damage written off, as the Company believes it is probable that the insurance recovery, net of the deductible, will exceed the net book value of the damaged property. The receivable is recorded within Accounts Receivable on the Company’s consolidated balance sheet as of September 30, 2017. The net impact of $5.1 million representing the property damage insurance

deductible is reflected as a hurricane casualty and impairment loss in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2017. Based on current replacement cost estimates, insurance proceeds are expected to equal or exceed the net book value of the impacted assets; therefore, the Company does not expect to record a loss after insurance proceeds, excluding the impact of the deductible.

The Company’s business interruption insurance covers lost revenue through the period of property restoration and for up to 365 days following completion of restoration. The Company recorded a reduction in rental revenues of $2.6 million for Hurricanes Irma and Maria for the three and nine months ended September 30, 2017, related to lost tenant revenue that is expected to be partially defrayed by insurance proceeds. The Company estimates the waiting period deductible for the business interruption claim to be $0.9 million for the period ended September 30, 2017. The Company will record revenue for covered business interruption in the period it determines that it is probable it will be compensated. This income recognition criteria will likely result in business interruption insurance recoveries being recorded in a period subsequent to the period that the Company experiences lost revenue from the damaged properties. In October 2017, the Company received an advance of approximately $2 million of insurance proceeds related to business interruption insurance claims. This advance has not been reflected in the third-quarter financial statements because it was received after the end of the period.

At September 30, 2017, six of the Puerto Rico assets were encumbered by mortgage notes aggregating $264.8 million at a weighted-average interest rate of 4.9%. The Company has contacted the mortgage holders and is complying with all lender requirements and mortgage covenants.

~~Accrued Expense~~

The Company recorded separation charges aggregating $16.6 million for the nine months ended September 30, 2017. The aggregate charge included $9.4 million related to the March 2, 2017, executive management transition, which was the result of the termination without cause of several of the Company’s executives under the terms of their respective employment agreements. The remaining $7.2 million related to the elimination of 65 positions, including nine officer level roles, in April 2017 as part of organization changes to further centralize key operational decision-making. The total nine-month charge included stock-based compensation expense of approximately $4.5 million related to the acceleration of expense associated with the grant date fair value of the unvested stock-based awards. At September 30, 2017, approximately $1.4 million was included in accounts payable and accrued expenses related to the aggregate charges in the Company’s consolidated balance sheet.

~~10.~~

~~Equity~~

In June 2017, the Company issued $175.0 million aggregate liquidation preference of its newly designated 6.375% Class A cumulative redeemable preferred shares at a price of $500.00 per share (or $25.00 per depositary share) and incurred $6.1 million in issuance costs reflected in paid-in capital.

~~11.~~

~~Other Comprehensive Loss~~

~~The changes in accumulated other comprehensive loss by component are as follows (in thousands):~~

Gains on
Cash Flow
Hedges

Foreign
Currency
Items

Total

Balance, December 31, 2016
$
(3,930
)

$
(262
)

$
(4,192
)
Other comprehensive income before reclassifications

995

1,014

2,009

Change in cash flow hedges reclassed to earnings^(A)

712

—

712

Net current-period other comprehensive income

1,707

1,014

2,721

Balance, September 30, 2017
$
(2,223
)

$
752

$
(1,471
)

~~(A)~~

Includes amortization classified in Interest Expense of $0.7 million in the Company’s consolidated statement of operations for the nine months ended September 30, 2017, which was previously recognized in accumulated other comprehensive loss.

~~12.~~

~~Impairment Charges and Reserves~~

In 2017, the Company recorded impairment charges and reserves based on the difference between the carrying value of the assets or investments and the estimated fair market value as follows (in millions):

Three Months

Nine Months

Ended September 30,

Ended September 30,

2017

2016

2017

2016

Assets marketed for sale^(A)
$
8.5

$
104.9

$
49.5

$
104.9

Undeveloped land previously held for development^(A)

1.8

—

10.9

—

Total continuing operations
$
10.3

$
104.9

$
60.4

$
104.9

(Adjustment) reserve of preferred equity interests^(B)

(15.4
)

—

60.6

—

Total impairment charges
$
(5.1
)

$
104.9

$
121.0

$
104.9

~~(A)~~

~~Triggered by changes in asset hold-period assumptions and/or expected future cash flows.~~

~~(B)~~

~~As a result of an aggregate valuation allowance on its preferred equity interests in the BRE DDR Joint Ventures (Note 2).~~

~~Items Measured at Fair Value on a Non-Recurring Basis~~

For operational real estate assets, the significant valuation assumptions included the capitalization rate used in the income capitalization valuation as well as the projected property net operating income. For projects under development or not at stabilization, the significant valuation assumptions included the discount rate, the timing and the estimated costs for the construction completion and project stabilization, projected net operating income and the exit capitalization rate. For the valuation of the preferred equity interests, the significant assumptions used in the discounted cash flow analysis included the discount rate, projected net operating income, the timing of the expected redemption and the exit capitalization rates. These valuations were calculated based on market conditions and assumptions made by management at the time the valuation adjustments and impairments were recorded, which may differ materially from actual results if market conditions or the underlying assumptions change.

The following table presents information about the Company’s impairment charges on both financial and nonfinancial assets that were measured on a fair value basis for the nine months ended September 30, 2017. The table also indicates the fair value hierarchy of the valuation techniques used by the Company to determine such fair value (in millions).

Fair Value Measurements

Level 1

Level 2

Level 3

Total

Total
Losses

September 30, 2017

Long-lived assets held and used

$
—

$
—

$
141.0

$
141.0

$
60.4

Preferred equity interests

—

—

327.3

327.3

60.6

The following table presents quantitative information about the significant unobservable inputs used by the Company to determine the fair value of non-recurring items (in millions, except price per acre (in thousands)):

Quantitative Information about Level 3 Fair Value Measurements

Fair Value at

Range

Description

September 30, 2017

Valuation Technique

Unobservable Inputs

2017

Impairment of consolidated assets

$
44.1

Indicative Bid^(A)/
Contracted Price

Indicative Bid^(A)/
Contracted Price

N/A

74.7

Income Capitalization Approach/
Sales Comparison Approach

Market Capitalization
Rate

9.75%–10%

14.8

Discounted Cash Flow

Discount Rate

9%

Terminal Capitalization Rate

10%

7.4

Sales Comparison Approach

Price per Acre

$50–$218

Reserve of preferred equity interests

327.3

Discounted Cash Flow

Discount Rate

8.2%–8.8%

Terminal Capitalization
Rate

4.6%–11.2%

NOI Growth Rate

1%

~~(A)~~

Fair value measurements based upon indicative bids were developed by third-party sources (including offers and comparable sales values), subject to the Company’s corroboration for reasonableness. The Company does not have access to certain unobservable inputs used by these third parties to determine these estimated fair values.

~~13.~~

~~Earnings Per Share~~

The following table provides a reconciliation of net (loss) income from continuing operations and the number of common shares used in the computations of “basic” earnings per share (“EPS”), which utilizes the weighted-average number of common shares outstanding without regard to dilutive potential common shares, and “diluted” EPS, which includes all such shares (in thousands, except per share amounts):

Three Months

Nine Months

Ended September 30,

Ended September 30,

2017

2016

2017

2016

Numerators – Basic and Diluted

Loss from continuing operations
$
(43,060
)

$
(81,444
)

$
(149,936
)

$
(20,305
)
Plus: Gain on disposition of real estate

44,291

21,368

127,017

47,470

Plus: Income attributable to non-controlling interests

(248
)

(284
)

(728
)

(894
)
Less: Preferred dividends

(8,383
)

(5,594
)

(20,376
)

(16,781
)
Less: Earnings attributable to unvested shares and operating
partnership units

(241
)

(167
)

(743
)

(581
)
Net (loss) income attributable to common shareholders after
allocation to participating securities
$
(7,641
)

$
(66,121
)

$
(44,766
)

$
8,909

Denominators – Number of Shares

Basic—Average shares outstanding

367,686

365,508

367,039

365,062

Effect of dilutive securities—Stock options

—

—

—

320

Diluted—Average shares outstanding

367,686

365,508

367,039

365,382

(Loss) Earnings Per Share:

Basic
$
(0.02
)

$
(0.18
)

$
(0.12
)

$
0.02

Diluted
$
(0.02
)

$
(0.18
)

$
(0.12
)

$
0.02

Shares subject to issuance under the Company’s 2016 VSEP were not considered in the computation of diluted EPS for the three and nine months ended September 30, 2017 and 2016, as the calculation was anti-dilutive.

~~14.~~

~~Segment Information~~

~~The tables below present information about the Company’s reportable operating segments (in thousands):~~

Three Months Ended September 30, 2017

Shopping
Centers

Loan
Investments

Other

Total

Total revenues
$
227,409

$
15

$
227,424

Rental operation expenses

(59,571
)

3

(59,568
)
Net operating income

167,838

18

167,856

Impairment charges

(10,284
)

(10,284
)
Depreciation and amortization

(85,210
)

(85,210
)
Interest income

6,807

6,807

Other income (expense), net

$
(64,340
)

(64,340
)
Unallocated expenses^(A)

(71,988
)

(71,988
)
Hurricane casualty and impairment loss

(6,089
)

(6,089
)
Equity in net income of joint ventures

4,811

4,811

Adjustment of preferred equity interests

15,377

15,377

Loss from continuing operations

$
(43,060
)

Three Months Ended September 30, 2016

Shopping
Centers

Loan
Investments

Other

Total

Total revenues
$
253,787

$
13

$
253,800

Rental operation expenses

(68,107
)

(62
)

(68,169
)
Net operating income (loss)

185,680

(49
)

185,631

Impairment charges

(104,877
)

(104,877
)
Depreciation and amortization

(95,451
)

(95,451
)
Interest income

9,304

9,304

Other income (expense), net

$
(384
)

(384
)
Unallocated expenses^(A)

(73,123
)

(73,123
)
Equity in net loss of joint ventures

(1,457
)

(1,457
)
Loss on sale and change in control of interests, net

(1,087
)

(1,087
)
Loss from continuing operations

$
(81,444
)

Nine Months Ended September 30, 2017

Shopping
Centers

Loan
Investments

Other

Total

Total revenues
$
703,989

$
43

$
704,032

Rental operation expenses

(192,772
)

(10
)

(192,782
)
Net operating income

511,217

33

511,250

Impairment charges

(60,353
)

(60,353
)
Depreciation and amortization

(266,370
)

(266,370
)
Interest income

22,365

22,365

Other income (expense), net

$
(65,298
)

(65,298
)
Unallocated expenses^(A)

(227,247
)

(227,247
)
Hurricane casualty and impairment loss

(6,089
)

(6,089
)
Equity in net income of joint ventures

2,429

2,429

Reserve of preferred equity interests

(60,623
)

(60,623
)
Loss from continuing operations

$
(149,936
)
As of September 30, 2017:

Total gross real estate assets
$
8,697,077

$
8,697,077

Notes receivable, net^(B)

$
346,888

$
(327,297
)

$
19,591

13.

Nine Months Ended September 30, 2016

Shopping
Centers

Loan
Investments

Other

Total

Total revenues
$
765,514

$
30

$
765,544

Rental operation expenses

(212,857
)

(218
)

(213,075
)
Net operating income (loss)

552,657

(188
)

552,469

Impairment charges

(104,877
)

(104,877
)
Depreciation and amortization

(290,051
)

(290,051
)
Interest income

27,800

27,800

Other income (expense), net

$
3,470

3,470

Unallocated expenses^(A)

(222,110
)

(222,110
)
Equity in net income of joint ventures

14,081

14,081

Loss on sale and change in control of interests, net

(1,087
)

(1,087
)
Loss from continuing operations

$
(20,305
)
As of September 30, 2016:

Total gross real estate assets
$
9,911,432

$
9,911,432

Notes receivable, net^(B)

$
447,070

$
(402,247
)

$
44,823

~~(A)~~

~~Unallocated expenses consist of General and Administrative Expenses, Interest Expense and Tax Expense as listed in the Company’s consolidated statements of operations.~~

~~(B)~~

~~Amount includes loans to affiliates classified in Investments in and Advances to Joint Ventures on the Company’s consolidated balance sheets.~~

~~ITEM 2.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Subsequent Events

The transaction terminating the BRE DDR IV joint venture closed on October 15, 2020 (Note 3).

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides readers with a perspective from management on the Company’s financial condition, results of operations, liquidity and other factors that may affect the Company’s future results. The Company believes it is important to read the MD&A in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2016, as well as other publicly available information.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) provides readers with a perspective from management on the financial condition, results of operations and liquidity of SITE Centers Corp. and its related consolidated real estate subsidiaries (collectively, the “Company” or “SITE Centers”) and other factors that may affect the Company’s future results. The Company believes it is important to read the MD&A in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2019, as well as other publicly available information.

EXECUTIVE SUMMARY

The Company is a self-administered and self-managed Real Estate Investment Trust (“REIT”) in the business of acquiring, owning, developing, redeveloping, leasing, financing and managing shopping centers. As of September 30, 2020, the Company’s portfolio consisted of 147 shopping centers (including 78 shopping centers owned through joint ventures). At September 30, 2020, the Company owned approximately 47.2 million total square feet of gross leasable area (“GLA”) through all its properties (wholly-owned and joint venture) and managed approximately 10.1 million total square feet of GLA owned by Retail Value Inc. (“RVI”). At September 30, 2020, the aggregate occupancy of the Company’s shopping center portfolio was 89.7%, and the average annualized base rent per occupied square foot was $18.53, both on a pro rata basis.

The following provides an overview of the Company’s key financial metrics (see Non-GAAP Financial Measures described later in this section) (in thousands, except per share amounts):

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2020		2019		2020		2019
Net income attributable to common shareholders	$	2,154	$	15,248	$	21,608	$	51,549
FFO attributable to common shareholders	$	42,262	$	55,117	$	128,911	$	173,669
Operating FFO attributable to common shareholders	$	43,531	$	55,374	$	144,571	$	171,079
Earnings per share – Diluted	$	0.01	$	0.08	$	0.11	$	0.28

For the nine months ended September 30, 2020, net income attributable to common shareholders decreased compared to the same period in the prior year, primarily due to the impact of the COVID-19 pandemic, the valuation allowance related to the Company’s preferred investments in the joint ventures with Blackstone, debt extinguishment costs related to the redemption of the Senior Notes due 2022 and reduced gain on sale of assets partially offset by gain on sale of the Company’s interest in the DDRTC joint venture.

In March 2020, the World Health Organization categorized COVID-19 as a pandemic, and it continues to spread throughout the United States and other countries across the world. Beginning in mid-March, federal, state and local governments took various actions to limit the spread of COVID-19, including ordering the temporary closure of non-essential businesses (which included many of the Company’s tenants) and imposing significant social distancing guidelines and restrictions on the continued operations of essential businesses and the subsequent reopening of non-essential businesses. In addition, in order to safeguard the health of its employees and their families, the Company closed all of its offices in March 2020 and successfully transitioned to working remotely. In October 2020, the Company reopened its largest office in Cleveland, Ohio and select regional offices on a voluntary basis, though the majority of the Company’s employees continued to work remotely. The Company has not established a date for employees to return to the office on a full-time basis. To date, the Company’s leasing and administrative operations have not been significantly impacted by the pandemic as the Company had made significant investments in its IT infrastructure and systems in prior years which facilitated the transition to a remote working environment.

As of October 23, 2020, approximately 98% of the Company’s tenants (at the Company’s share and based on average base rents) were open for business, up from a low of approximately 45% in early April 2020 and 92% as of July 24, 2020. The COVID-19 pandemic had a relatively minimal impact on the Company’s collection of rents for the first quarter of 2020, but it had a significant impact on collection of second and third quarter rents. Although rent collection levels improved in the third quarter of 2020 relative to the second quarter, third quarter rent collection levels remain below historical averages and future rent collections may be negatively impacted by new surges in COVID-19 contagion and any implementation of additional restrictions on tenant businesses as a result thereof. The ultimate impact of the pandemic and secondary social and economic effects on the Company's results of operations, financial position, liquidity and capital resources remains unclear and cannot be reasonably forecasted at this time. For a further discussion of the impact of the COVID-19 pandemic on the Company’s business, see “Liquidity, Capital Resources and Financing Activities” and “Economic Conditions” included in this section and Item 1A. Risk Factors in Part II of this Quarterly Report.

Company Activity

The growth opportunities within the Company’s core property operations include rental rate increases, continued lease-up of the portfolio, and the adaptation of existing square footage to generate higher blended rental rates and operating cash flows. Additional growth opportunities include opportunistic investments and tactical redevelopment. Management intends to use retained cash flow and proceeds from the sale of lower growth assets and other investments to fund opportunistic investing and tactical redevelopment activity.

In February 2020, the Company sold its interest in the DDRTC joint venture to its partner, an affiliate of TIAA-CREF, which resulted in net proceeds to the Company of $140.4 million.

During the first nine months of 2020, the Company’s unconsolidated joint ventures sold two shopping centers and the Company sold land parcels for an aggregate of $28.7 million or $6.6 million at the Company’s share. In addition, the Company received $7.5 million related to the repayment of a loan investment.

In March 2020, the Company redeemed all $200.0 million aggregate principal amount outstanding of Senior Notes due 2022.

In addition, in the first nine months of 2020, the Company repurchased 0.8 million common shares for $7.5 million under the Company’s share repurchase program.

Company Operational Highlights

Leasing activity in January and February was relatively consistent with recent historical levels. However, the COVID-19 pandemic caused a slow-down in leasing activity in March which continued throughout the first half of the second quarter of 2020, though the Company witnessed a relative increase in new lease discussions and renewal negotiations with tenants in late May and June and continuing into the third quarter. However, the leasing volumes for the nine months ended September 30, 2020 were below average historic levels.

During the nine months ended September 30, 2020, the Company completed the following operational activities:

~~Executive Summary~~

The Company is a self-administered and self-managed Real Estate Investment Trust (“REIT”) in the business of acquiring, owning, developing, redeveloping, expanding, leasing, financing and managing shopping centers. As of September 30, 2017, the Company’s portfolio consisted of 286 shopping centers (including 143 shopping centers owned through joint ventures) aggregating•

Leased approximately 973.1 million ~~total~~ square feet of gross leasable area (“GLA”). These properties consist of 274 shopping centers owned in the United States and 12 in Puerto Rico. At September 30, 2017, the aggregate occupancy of the Company’s operating shopping center portfolio was 91.5% and the average annualized base rent per occupied square foot was $15.53.

For the nine months ended September 30, 2017, net income attributable to common shareholders decreased compared to the prior year, primarily due to a $60.6 million valuation allowance recorded on the Company’s preferred investments in two joint ventures, a $66.4 million loss on debt retirement, a $16.6 million aggregate charge associated with the executive management transition and staff restructuring and a $6.1 million hurricane casualty and impairment loss, which were partially offset by an increase in gain on sale of real estate assets and lower impairment charges.

~~The following provides an overview of the Company’s key financial metrics (see Non-GAAP Financial Measures, described later in this section) (in thousands, except per share amounts):~~

Three Months

Nine Months

Ended September 30,

Ended September 30,

2017

2016

2017

2016

Net (loss) income attributable to common shareholders
$
(7,400
)

$
(65,954
)

$
(44,023
)

$
9,490

FFO attributable to common shareholders
$
46,340

$
120,137

$
161,677

$
355,000

Operating FFO attributable to common shareholders
$
111,236

$
120,636

$
328,538

$
357,306

(Loss) earnings per share – Diluted
$
(0.02
)

$
(0.18
)

$
(0.12
)

$
0.02

~~In March 2017, the Company named a new executive team,~~GLA including ~~David Lukes as president and chief executive officer, Michael Makinen as chief operating officer and Matthew Ostrower as chief financial officer. The management team, led by~~ Mr. Lukes, completed several key strategic objectives in 2017, which included the streamlining of the Company’s organizational structure, executing several balance sheet improvements, and completing a portfolio review process. The Company made several organizational changes in an effort to centralize decision-making and lower operating costs, which resulted in the elimination of 65 positions, including nine officer roles, and are expected to generate an annualized stabilized reduction to general and administrative expenses of approximately $6 million. As outlined below, the Company also took several steps to strengthen its balance sheet, extend its debt maturity profile and reduce its overall risk profile. Furthermore, the Company made progress toward, and remains committed to lowering leverage and improving overall liquidity. One of the keys to achieving this objective is to recycle asset disposition proceeds toward its deleveraging effort. The Company completed a portfolio review process to not only identify asset disposition targets but also support its capital allocation strategy. Looking forward, the Company seeks to create shareholder value through disciplined capital allocation and best-in-class operations that it believes should ~~translate into net asset value growth over time. The following is a summary of the Company’s significant transactional and operational activity execution in the first nine months of 2017:~~

In an effort to repay debt and extend maturity, the Company raised $975.0 million in the public debt and preferred equity markets and repaid $900 million of its outstanding unsecured notes. The weighted average interest of the unsecured debt issued was 4.35% as compared to 6.71% for the unsecured debt repaid. The Company also repaid an aggregate of $322.4 million of secured mortgage debt from January 1, 2017 through November 1, 2017. In addition, the Company extended the maturity of the revolving credit facilities and increased the borrowing capacity to $1.0 billion. As a result of these transactions, the Company increased its weighted average consolidated debt maturity from 3.7 years at March 31, 2017, to 5.5 years at September 30, 2017.

•

The Company completed the disposition of $651.1 million of assets during the nine months ended September 30, 2017, of which DDR’s pro rata share was $480.0 million. Included in these sales are two assets in Puerto Rico for a gross sales

~~price of $57.3 million. The Company also acquired a grocery-anchored shopping center at 3030 North Broadway in Chicago, Illinois, for $81.0 million in January 2017.~~

The DDR Domestic Retail Fund I joint venture (now DDRM Properties) was recapitalized, which included $706.7 million of new mortgage financings on 52 assets, which were used to repay of all of the joint venture’s outstanding mortgage debt.

The Company continued its trend of consistent strong operating performance in the first nine months of 2017, as evidenced by the number of leases executed, the upward trend in the average annualized base rental rates and an overall strong occupancy rate.

~~The Company leased approximately 5.5 million square feet in the first nine months of 2017, including 227~~81 new leases and ~~631~~230 renewals for a total of ~~858~~311 leases. The ~~Company has addressed substantially all~~remaining 2020 lease expirations as of ~~its 2017 lease expirations.~~ September 30, 2020, aggregated approximately 0.2 million square feet of GLA, (representing approximately 10% of total annualized base rent of 2020 expiring leases as of December 31, 2019), as compared to 1.9 million square feet of GLA as of December 31, 2019;

•

The Company continued to execute both new leases and renewals at positive rental ~~spreads, which contributed to the increase in the average annualized base rent per square foot.~~spreads. At December 31, ~~2016,~~2019, the Company had ~~814~~324 leases expiring in ~~2017,~~2020, with an average base rent per square foot of ~~$14.68.~~$19.41, on a pro rata basis, as adjusted for the Company’s sale of its interest in the DDRTC joint venture. For the comparable leases executed in the ~~first~~ nine months ~~of 2017,~~ended September 30, 2020, the Company generated positive leasing spreads on a pro rata basis of ~~5.6%~~19.6% for new leases and ~~6.0%~~4.9% for renewals. ~~Although these~~Leasing spreads are ~~positive,~~a key metric in real estate, representing the percentage increase over rental rates on existing leases versus rental rates on new ~~lease spread of 5.6% is significantly below the full-year 2016 spread of 20.6% on a pro rata basis. One~~and renewal leases, though leasing spreads exclude consideration of the ~~drivers behind the lower~~amount of capital expended in connection with new lease spread in 2017 was an anchor tenant lease executed at a Puerto Rico property to replace a dark but rent paying tenant. Excluding the impact of this lease, the first nine months new lease spreads were 12.0% on a pro rata basis, which is more in line with the historical average.leasing activity. The Company’s leasing spread calculation includes only ~~includes~~those deals that were executed within one year of the date the prior tenant ~~vacated. As~~vacated, and as a result, ~~the Company believes its calculation~~ is a good benchmark to compare the average annualized base rent of expiring leases with the comparable executed market rental ~~rates.~~rates;

•

The Company’s total portfolio average annualized base rent per square foot increased to ~~$15.53~~$18.53 at September 30, ~~2017,~~2020, on a pro rata basis, as compared to ~~$15.00~~$18.25 at December 31, ~~2016,~~2019 (or $18.43 at December 31, 2019, excluding the DDRTC joint venture), and ~~$14.72~~$18.04 at September 30, ~~2016.~~2019;

•

The aggregate occupancy of the Company’s operating shopping center portfolio ~~remained strong at 91.5%~~was 89.7% at September 30, ~~2017,~~2020, on a pro rata basis, as compared to ~~93.3%~~90.8% at December 31, ~~2016~~2019 (or 90.7% at December 31, 2019, excluding the DDRTC joint venture), and ~~93.0%~~91.0% at September 30, ~~2016. The net decrease in occupancy in the first nine months of 2017 primarily was attributed to tenant bankruptcies~~2019 and the impact of asset sales with rates that were slightly above the portfolio average occupancy. The 2017 occupancy rate reflects the unabsorbed vacancy related to The Sports Authority and Golfsmith bankruptcies in 2016 and the hhgregg bankruptcy in 2017.

•

For new leases executed during the ~~first~~ nine months ~~of 2017,~~ended September 30, 2020, at the Company’s interest, the Company expended a weighted-average cost of ~~$4.88~~$7.46 per rentable square foot for tenant improvements and lease commissions over the lease term as compared to ~~$4.73~~$6.56 per rentable square foot for new leases executed ~~in the first nine months of 2016.~~during 2019. The Company generally does not expend a significant amount of capital on lease renewals.

2020 RESULTS OF OPERATIONS

Consolidated shopping center properties owned as of January 1, 2019, but excluding properties under development or redevelopment and those sold by the Company, are referred to herein as the “Comparable Portfolio Properties.”

Revenues from Operations (in thousands)

	Three Months
	Ended September 30,
	2020		2019		$ Change
Rental income^(A)	$	95,874	$	108,060	$	(12,186	)
Fee and other income		9,680		13,580		(3,900	)
Business interruption income		—		885		(885	)
Total revenues	$	105,554	$	122,525	$	(16,971	)

	Nine Months
	Ended September 30,
	2020		2019		$ Change
Rental income^(A)	$	306,482	$	332,555	$	(26,073	)
Fee and other income^(B)		35,953		48,764		(12,811	)
Business interruption income		—		885		(885	)
Total revenues	$	342,435	$	382,204	$	(39,769	)

~~Third Quarter 2017 - Hurricane Casualty Loss~~(A)

InThe following table summarizes the key components of the 2020 rental income as compared to 2019:

	Three Months
	Ended September 30,
Contractual Lease Payments	2020			2019			$ Change
Base and percentage rental income	$	82,959		$	80,864		$	2,095
Recoveries from tenants		25,833			26,018			(185	)
Uncollectible revenue		(14,188	)		(505	)		(13,683	)
Lease termination fees, ancillary and other rental income		1,270			1,683			(413	)
Total contractual lease payments	$	95,874		$	108,060		$	(12,186	)

	Nine Months
	Ended September 30,
Contractual Lease Payments	2020			2019			$ Change
Base and percentage rental income⁽¹⁾	$	246,505		$	243,029		$	3,476
Recoveries from tenants⁽²⁾		80,371			81,466			(1,095	)
Uncollectible revenue⁽³⁾		(27,918	)		(178	)		(27,740	)
Lease termination fees, ancillary and other rental income		7,524			8,238			(714	)
Total contractual lease payments	$	306,482		$	332,555		$	(26,073	)

(1)

The changes were due to the following (in millions):

	Increase (Decrease)
Comparable Portfolio Properties	$	3.2
Acquisition of shopping centers		4.0
Redevelopment properties		0.9
Disposition of shopping centers		(3.2	)
Straight-line rents		(1.4	)
Total	$	3.5

The Company recorded a charge of $7.6 million to straight-line revenue related to additional reserves associated with credit risk tenants primarily triggered by the impacts of the COVID-19 pandemic. This amount was partly offset by the recognition of additional straight-line rent due to the impact of lease modification accounting.

The following tables present the statistics for the Company’s assets affecting base and percentage rental income summarized by the following portfolios: pro rata combined shopping center portfolio, wholly-owned shopping center portfolio and joint venture shopping center portfolio.

	Pro Rata Combined Shopping Center Portfolio September 30,
	2020			2019
Centers owned		147			169
Aggregate occupancy rate		89.7	%		91.0	%
Average annualized base rent per occupied square foot	$	18.53		$	18.04

	Wholly-Owned Shopping Centers September 30,
	2020			2019
Centers owned		69			66
Aggregate occupancy rate		89.7	%		91.0	%
Average annualized base rent per occupied square foot	$	18.89		$	18.59

	Joint Venture Shopping Centers September 30,
	2020			2019
Centers owned		78			103
Aggregate occupancy rate		88.4	%		90.8	%
Average annualized base rent per occupied square foot	$	15.14		$	14.90

At September 30, 2020 and 2019, the wholly-owned Comparable Portfolio Properties’ aggregate occupancy rate was 91.5% and 92.8%, respectively, and the average annualized base rent per occupied square foot was $18.56 and $18.52, respectively.

(2)

Recoveries from tenants for the Comparable Portfolio Properties were approximately 82.9% and 80.9% of reimbursable operating expenses and real estate taxes for the nine months ended September ~~2017, Hurricane Irma made landfall~~30, 2020 and 2019, respectively. The increase in ~~both Puerto Rico~~the recovery percentage is primarily due to the effects of decreased operating and ~~Florida, and Hurricane Maria made landfall in Puerto Rico. The Company’s Florida assets were minimally impacted by Hurricane Irma. However,~~maintenance expenses due to the ~~Company’s 12 shopping centers in Puerto Rico and 36 employees based~~COVID-19 pandemic.

(3)

Primarily relates to the impact of the COVID-19 pandemic on rent collections including the impact of lease modification accounting. Represents the elimination of contractual lease payments for tenants that are now on the ~~island were significantly impacted by Hurricane Maria. Management’s first priority has been~~cash basis of accounting due to ~~account for~~collectability concerns.

(B)

Decreased primarily due to a refinancing fee earned from RVI of $1.8 million during the nine months ended September 30, 2019, lower management fees from RVI due to asset sales and ~~provide necessary resources~~lower fee income received from joint ventures primarily due to ~~our Puerto Rico-based team. Second,~~ the Company has been working diligently to make all properties physically safe and protected from further water intrusion. Third, the Company has worked to remove debris and provide generator power where possible so that tenants can open as soon as possible. Finally, the Company has been working with its insurance company to assess damage, arrange for advances on business interruption insurance, and begin to make permanent repairs to assets wherever possible. Onesale of the Company’s ~~12 shopping centers was severely damaged; except for one tenant, it is currently not operational and is not expected to open for~~interest in the ~~foreseeable future.~~ DDRTC joint venture.

In July 2020, the Company entered into agreements with affiliates of Blackstone to terminate the BRE DDR III and BRE DDR IV joint ventures. The BRE DDR IV transaction closed in October 2020 and the BRE DDR III is expected to close as soon as all applicable conditions have been satisfied including receipt of required lender consents in in the fourth quarter of 2020. The termination of these joint ventures will reduce the amount of fee income recorded by the Company. Fee income from the two joint ventures was approximately $3.5 million in the aggregate for the year ended December 31, 2019. See Note 3, “Investments in and Advances to Joint Ventures,” in the Company’s consolidated financial statements included herein.

The components of Fee and Other Income are presented in Note 2, “Revenue Recognition,” to the Company’s consolidated financial statements included herein. Changes in the number of assets under management, including the number of assets owned by RVI, or the fee structures applicable to such arrangements will impact the amount of revenue recorded in future periods. Such changes could occur because the Company’s property management agreements contain termination provisions, and RVI and the Company’s joint venture partners could dispose of shopping centers under the Company’s management. The Company’s joint venture partners may also elect to terminate their joint venture arrangements with the Company in connection with a change in investment strategy or otherwise.

Expenses from Operations (in thousands)

	Three Months
	Ended September 30,
	2020		2019		$ Change
Operating and maintenance	$	15,775	$	16,738	$	(963	)
Real estate taxes		16,542		16,721		(179	)
Impairment charges		—		2,750		(2,750	)
General and administrative		13,664		15,304		(1,640	)
Depreciation and amortization		41,148		40,732		416
	$	87,129	$	92,245	$	(5,116	)

	Nine Months
	Ended September 30,
	2020		2019		$ Change
Operating and maintenance^(A)	$	50,774	$	54,322	$	(3,548	)
Real estate taxes^(A)		51,547		52,262		(715	)
Impairment charges^(B)		—		3,370		(3,370	)
General and administrative^(C)		38,542		44,348		(5,806	)
Depreciation and amortization^(A)		125,014		123,400		1,614
	$	265,877	$	277,702	$	(11,825	)

(A)

The ~~other 11 assets incurred varying degrees of damage, including some tenant spaces currently untenantable. As of November 1, 2017, nine of the assets had partial to full utility power and~~changes were ~~available for occupancy by some tenants, although,~~ due to the ~~damage, portions~~following (in millions):

	Operating and Maintenance			Real Estate Taxes			Depreciation and Amortization
Comparable Portfolio Properties	$	(3.5	)	$	(2.0	)	$	(0.6	)
Acquisition of shopping centers		0.7			0.8			3.0
Redevelopment properties		—			1.0			0.7
Disposition of shopping centers		(0.7	)		(0.5	)		(1.5	)
	$	(3.5	)	$	(0.7	)	$	1.6

(B)

Changes in (i) an asset’s expected future undiscounted cash flows due to changes in market or leasing conditions, (ii) various courses of ~~these properties remain unavailable for occupancy. The Company estimates its aggregate casualty insurance claim to be~~action that may occur or (iii) holding periods could result in the ~~range~~recognition of ~~$125 – $150 million, which includes the costs to clean up, repair~~additional impairment charges. Impairment charges are presented in Note 10, “Impairment Charges and rebuild as well as lost revenue estimated through December 31, 2017. The Company maintains insurance on its assets in Puerto Rico with policy limits of approximately $330 million for both property damage and business interruption. See further discussion in both “Contractual Obligations and Other Commitments” and Note 9, “Commitments and Contingencies,Reserves,” to the Company’s consolidated financial statements included herein.

~~RESULTS OF OPERATIONS~~

Shopping center properties owned as of January 1, 2016, but excluding properties under development or redevelopment and those sold by the Company, are referred to herein as the “Comparable Portfolio Properties.”

~~Revenues from Operations (in thousands)~~

Three Months

Ended September 30,

2017

2016

$ Change

Base and percentage rental revenues
$
154,941

$
179,037

$
(24,096
)
Recoveries from tenants

51,368

59,743

(8,375
)
Fee and other income

21,115

15,020

6,095

Total revenues
$
227,424

$
253,800

$
(26,376
)

Nine Months

Ended September 30,

2017

2016

$ Change

Base and percentage rental revenues^(A)
$
490,315

$
538,058

$
(47,743
)
Recoveries from tenants^(B)

164,477

182,718

(18,241
)
Fee and other income^(C)

49,240

44,768

4,472

Total revenues
$
704,032

$
765,544

$
(61,512
)

~~(A)~~

~~The changes were due to the following (in millions):~~

Increase (Decrease)

Comparable Portfolio Properties⁽¹⁾

$
5.6

Acquisition of shopping centers

8.1

Development or redevelopment properties

0.7

Disposition of shopping centers

(58.1
)
Straight-line rents

(4.0
)
Total

$
(47.7
)

~~(1)~~

Includes a reduction in rental revenues and recoveries from tenants of $2.6 million associated with both Hurricane Irma and Maria in September 2017 that is expected to be partially defrayed by insurance proceeds. See further discussion in Note 9, “Commitments and Contingencies,” to the Company’s consolidated financial statements included herein.

The following tables present the statistics for the Company’s portfolio affecting base and percentage rental revenues summarized by the following portfolios: combined shopping center portfolio, wholly-owned shopping center portfolio and joint venture shopping center portfolio.

Combined Shopping
Center Portfolio
September 30,

Wholly-Owned
Shopping Centers
September 30,

Joint Venture
Shopping Centers
September 30,

2017

2016

2017

2016

2017

2016

Centers owned

286

343

143

187

143

156

Aggregate occupancy rate

91.5
%

93.0
%

91.1
%

92.8
%

92.1
%

93.4
%
Average annualized base rent per
occupied square foot⁽²⁾
$
15.53

$
14.72

$
16.30

$
15.08

$
14.42

$
14.10

~~(2)~~

The Comparable Portfolio Properties’ aggregate occupancy rate was 91.3% and 94.0%, respectively, and the average annualized base rent per occupied square foot was $16.33 and $15.21, respectively. The 2017 occupancy rates above reflect the unabsorbed vacancy related to The Sports Authority and Golfsmith bankruptcies that occurred in 2016 and the hhgregg bankruptcy in 2017.

~~(B)~~

The decrease primarily was driven by the net impact of disposition activity. Recoveries from tenants for the Comparable Portfolio Properties were approximately 93.4% and 96.2% of reimbursable operating expenses and real estate taxes for the comparable periods. The overall decreased percentage of recoveries from tenants primarily was attributable to the impact of the major tenant bankruptcies and related occupancy loss discussed above.

~~(C)~~

~~Includes a decrease in Management and other fee income of $2.7~~
(C)
General and administrative expenses for the nine months ended September 30, 2020 and 2019 were approximately 5.3% and 5.0% of total revenues (excluding uncollectible revenue), respectively, including total revenues of unconsolidated joint ventures and managed properties for the comparable periods. In the third quarter of 2020, the Company recorded a separation charge of $1.7 million primarily from a reduction of asset management fees from one of the Company’s joint ventures. In addition, in the third quarter of 2017, the Company recorded a lease termination fee of $8.2 million related to the receipt of a 132,700 square foot building triggered by an anchor tenant not exercising its option of a ground lease at the Riverdale Village shopping center in Coon Rapids, Minnesota. The components of Fee and Other Income are presented in Note 1, “Nature of Business and Financial Statement Presentation,” of the Company’s consolidated financial statements included herein. Changes in the number of assets under management or the joint venture fee structure could impact the amount of revenue recorded in future periods. Such changes could occur because the Company’s property management agreements contain cancellation provisions and the Company’s joint venture partners could dispose of shopping centers under DDR’s management.

~~Expenses from Operations (in thousands)~~

Three Months

Ended September 30,

2017

2016

$ Change

Operating and maintenance
$
28,950

$
32,012

$
(3,062
)
Real estate taxes

30,618

36,157

(5,539
)
Impairment charges

10,284

104,877

(94,593
)
Hurricane casualty and impairment loss

6,089

—

6,089

General and administrative

16,425

18,785

(2,360
)
Depreciation and amortization

85,210

95,451

(10,241
)

$
177,576

$
287,282

$
(109,706
)

Nine Months

Ended September 30,

2017

2016

$ Change

Operating and maintenance^(A)
$
94,091

$
104,600

$
(10,509
)
Real estate taxes^(A)

98,691

108,475

(9,784
)
Impairment charges^(B)

60,353

104,877

(44,524
)
Hurricane casualty and impairment loss^(C)

6,089

—

6,089

General and administrative^(D)

70,253

55,160

15,093

Depreciation and amortization^(A)

266,370

290,051

(23,681
)

$
595,847

$
663,163

$
(67,316
)

~~(A)~~

~~The changes were due to the following (in millions):~~

Operating
and
Maintenance

Real Estate
Taxes

Depreciation
and
Amortization

Comparable Portfolio Properties

$
0.3

$
0.5

$
(8.6
)
Acquisition of shopping centers

1.5

1.8

6.0

Development or redevelopment properties

(0.2
)

0.1

0.3

Disposition of shopping centers

(12.1
)

(12.3
)

(21.4
)

$
(10.5
)

$
(9.8
)

$
(23.7
)

~~Depreciation expense for Comparable Portfolio Properties was lower in 2017, primarily as a result of accelerated depreciation charges in 2016~~ related to ~~changes in~~ the ~~useful lives~~elimination of ~~certain assets.~~

~~(B)~~

The Company recorded impairment charges in 2017, related to five operating shopping centers and three parcels of land. Changes in (1) an asset’s expected future undiscounted cash flows due to changes in market conditions, (2) various courses of action that may occur or (3) holding periods each could result in the recognition of additional impairment charges. Impairment

~~charges are presented in Note 12, “Impairment Charges and Reserves,” to the Company’s consolidated financial statements included herein.~~

~~(C)~~

The Hurricane Casualty and Impairment Loss is more fully described in “Sources and Uses of Capital” later in this section and Note 9, “Commitments and Contingencies,” to the Company’s consolidated financial statements included herein.

~~(D)~~

General and administrative expenses were approximately 6.4% and 4.8% of total revenues, respectively, including total revenues of unconsolidated joint ventures and managed properties for the comparable periods. In 2017, the Company recorded separation charges aggregating $16.6 million, which are comprised of $9.4 million related to the March 2, 2017, management transition and $7.2 million related to other staffing reductions associated with the restructuring announced on April 3, 2017, which eliminated a total of 65 positions. General and administrative expenses of $70.3 million less the separation charges of $16.6 million were approximately 5% of total revenues described above.

the Chief Operating Officer executive position. The Company continues to expense certain internal leasing salaries, legal salaries and related expenses associated with leasing and re-leasing of existing space. ~~However, the Company expects that upon adoption of the leasing standard in 2019, certain general and administrative expenses that are currently capitalized may be required to be expensed.~~

~~Other Income and Expenses (in thousands)~~

Three Months

Ended September 30,

2017

2016

$ Change

Interest income
$
6,807

$
9,304

$
(2,497
)
Interest expense

(46,296
)

(53,940
)

7,644

Other income (expense), net

(64,340
)

(384
)

(63,956
)

$
(103,829
)

$
(45,020
)

$
(58,809
)

Nine Months

Ended September 30,

2017

2016

$ Change

Interest income^(A)
$
22,365

$
27,800

$
(5,435
)
Interest expense^(B)

(147,031
)

(165,849
)

18,818

Other income (expense), net^(C)

(65,298
)

3,470

(68,768
)

$
(189,964
)

$
(134,579
)

$
(55,385
)

Other Income and Expenses (in thousands)

	Three Months
	Ended September 30,
	2020			2019			$ Change
Interest income	$	3,445		$	4,616		$	(1,171	)
Interest expense		(18,089	)		(21,160	)		3,071
Other expense, net		(186	)		(322	)		136
	$	(14,830	)	$	(16,866	)	$	2,036

	Nine Months
	Ended September 30,
	2020			2019			$ Change
Interest income^(A)	$	10,480		$	13,658		$	(3,178	)
Interest expense^(B)		(58,487	)		(63,973	)		5,486
Other expense, net^(C)		(18,207	)		(254	)		(17,953	)
	$	(66,214	)	$	(50,569	)	$	(15,645	)

(A)

At September 30, 2017, the Company had a gross preferred investment of $381.6 million plus $6.3 million of accrued interest, which excludes a $60.6 million valuation allowance, with an annual stated interest rate of 8.5% due from its two joint ventures with affiliates of The Blackstone Group L.P. (“Blackstone”). As a result of the valuation allowances recorded, effective in March 2017, the Company no longer recognizes as interest income the 2.0% non-cash or PIK component of the 8.5% fixed distribution. The Company’s recognition of the cash distributions from the securities remains unchanged and earns interest at 6.5%. The amount of interest income recorded in 2017 was further reduced due to the repayment of a $30.6 million note receivable in April 2017 that was scheduled to mature in September 2017.

~~The weighted-average loan receivable outstanding and weighted-average interest rate, including loans to affiliates, are as follows:~~

Nine Months

Ended September 30,

2017

2016

Weighted-average loan receivable outstanding (in millions)

$
418.5

$
438.6

Weighted-average interest rate

7.2
%

8.5
%

~~(B)~~

~~The weighted-average debt outstanding and related weighted-average interest rate are as follows:~~

Nine Months

Ended September 30,

2017

2016

Weighted-average debt outstanding (in billions)

$
4.4

$
5.0

Weighted-average interest rate

4.4
%

4.4
%

The reduction in the weighted average debt outstanding from the comparable prior-year period is a result of the Company’s overall strategy to reduce leverage. The weighted-average interest rate (based on contractual rates and excluding fair market value of adjustments and debt issuance costs) was 4.0% and 4.3% for the comparable periods.

Interest costs capitalized in conjunction with development and redevelopment projects and unconsolidated development and redevelopment joint venture interests were $0.5 million and $1.4 million for the three and nine months ended September 30, 2017, respectively, compared to $0.7 million and $2.6 million, respectively, for the comparable periods in 2016. The decrease in the amount of interest ~~costs capitalized is~~income recognized primarily was due to the decrease in the face amount of the preferred equity investments in the unconsolidated joint ventures with Blackstone as a result of repayments by the joint ventures from asset sale proceeds (see “Sources and Uses of Capital” included elsewhere herein). The Company had a ~~change~~gross preferred investment (including accrued interest in the ~~mix~~Blackstone joint ventures) of ~~active development projects year over year.~~

~~(C)~~

In connection with the redemption of senior unsecured notes in the third quarter of 2017, the Company recorded a loss on extinguishment of debt representing make-whole amounts and other costs incurred aggregating $65.8 million.$203.5 million and $247.3 million at September 30, 2020 and 2019, respectively. Interest income from this equity investment is no longer expected to be recorded following the termination of the joint ventures. See Note 3, “Investments in and Advances to Joint Ventures,” in the Company’s consolidated financial statements included herein. Decrease in interest income was also related to the repayment of mezzanine loan investments.

~~Other Items (in thousands)~~

Three Months

Ended September 30,

2017

2016

$ Change

Equity in net income (loss) of joint ventures
$
4,811

$
(1,457
)

$
6,268

Adjustment of preferred equity interests

15,377

—

15,377

Loss on sale and change in control of interests, net

—

(1,087
)

1,087

Tax expense of taxable REIT subsidiaries and state franchise and
income taxes

(9,267
)

(398
)

(8,869
)

Nine Months

Ended September 30,

2017

2016

$ Change

Equity in net income of joint ventures^(A)
$
2,429

$
14,081

$
(11,652
)
Reserve of preferred equity interests^(B)

(60,623
)

—

(60,623
)
Loss on sale and change in control of interests, net

—

(1,087
)

1,087

Tax expense of taxable REIT subsidiaries and state franchise and
income taxes

(9,963
)

(1,101
)

(8,862
)

~~(A)~~

The decrease primarily was the result of impairment charges recorded in 2017 aggregating $82.7 million on seven assets, of which the Company’s share was $4.8 million. In 2016, one unconsolidated joint venture sold 11 assets of which the Company’s share of the gain was $13.5 million. Joint venture property sales could significantly impact the amount of income or loss recognized in future periods. In the second quarter of 2017, the Company’s joint venture DDR Domestic Retail Fund I (now DDRM Properties) was recapitalized (See Sources and Uses of Capital).
(B)
The weighted-average debt outstanding and related weighted-average interest rate are as follows:

~~(B)~~

In the first quarter of 2017, the Company recorded a valuation allowance on its preferred equity investments, which was adjusted in the third quarter of 2017 as a result of updated market conditions and hold period assumptions on the assets in the portfolio. ~~The valuation allowance is more fully described in Note 2,~~

Nine Months

Ended September 30,

2020

2019

Weighted-average debt outstanding (in billions)

$
2.0

$
1.9

Weighted-average interest rate

3.8
%

4.4
%

The increase in the weighted-average debt outstanding was primarily due to precautionary borrowings under the Company’s line of credit in March 2020 in response to the COVID-19 pandemic. The Company’s overall balance sheet strategy is to continue to maintain liquidity and low leverage. The weighted-average interest rate (based on contractual rates and excluding fair market value of adjustments and debt issuance costs) was 3.7% and 4.2% at September 30, 2020 and 2019, respectively. Interest costs capitalized in conjunction with redevelopment projects were $0.2 million and $0.8 million for the three and nine months ended September 30, 2020, respectively, and $0.4 million and $1.0 million for the three and nine months ended September 30, 2019, respectively.

(C)	Debt extinguishment costs related to the redemption of the Senior Notes due 2022 in March 2020.

Other Items (in thousands)

	Three Months
	Ended September 30,
	2020			2019			$ Change
Equity in net income of joint ventures	$	250		$	2,612		$	(2,362	)
Adjustment (reserve) of preferred equity interests, net		3,542			(6,373	)		9,915
Gain on sale of joint venture interest		82			—			82
Gain on disposition of real estate, net		218			14,497			(14,279	)
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(284	)		(249	)		(35	)
Income attributable to non-controlling interests, net		(116	)		(271	)		155

	Nine Months
	Ended September 30,
	2020			2019			$ Change
Equity in net income of joint ventures^(A)	$	908		$	5,446		$	(4,538	)
Reserve of preferred equity interests, net^(B)		(19,393	)		(12,106	)		(7,287	)
Gain on sale of joint venture interest^(C)		45,635			—			45,635
Gain on disposition of real estate, net^(D)		993			31,087			(30,094	)
Tax expense of taxable REIT subsidiaries and state franchise and income taxes		(859	)		(827	)		(32	)
Income attributable to non-controlling interests, net		(621	)		(836	)		215

(A)

The decrease primarily was the result of the sale of the Company’s 15% interest in the DDRTC joint venture, the impact of the COVID-19 pandemic and higher impairment charges. Joint venture property sales could significantly impact the amount of income or loss recognized in future periods. See Note 3, “Investments in and Advances to Joint Ventures,” in the Company’s consolidated financial statements included herein.

(B)	The valuation allowance is more fully described in Note 3, “Investments in and Advances to Joint Ventures,” to ~~Joint Ventures,” of~~ the Company’s consolidated financial statements included herein.

~~Disposition~~(C)

In February 2020, the Company sold its 15% interest in the DDRTC joint venture to its partner TIAA-CREF, which resulted in net proceeds to the Company of ~~Real Estate, Non-Controlling Interests and Net (Loss) Income (in thousands)~~

Three Months

Ended September 30,

2017

2016

$ Change

Gain on disposition of real estate, net
$
44,291

$
21,368

$
22,923

Income attributable to non-controlling interests, net

(248
)

(284
)

36

Net income (loss) attributable to DDR

983

(60,360
)

61,343

Nine Months

Ended September 30,

2017

2016

$ Change

Gain on disposition of real estate, net^(A)
$
127,017

$
47,470

$
79,547

Income attributable to non-controlling interests, net

(728
)

(894
)

166

Net (loss) income attributable to DDR^(B)

(23,647
)

26,271

(49,918
)

~~(A)~~

~~The Company sold 25 shopping centers and land for a gross sales price of $469.1~~$140.4 million.

~~(B)~~

The decrease primarily was due to the following items in 2017: (1) a $60.6 million valuation allowance recorded on the Company’s preferred investments in its two joint ventures with Blackstone, (2) a $66.4 million loss on debt extinguishment and (3) an aggregate separation charge of $16.6 million associated with executive management transition and a staff restructuring, partially offset by (4) an increase in gain on sale of real estate assets.

(D)	Related to the sale of land parcels during the nine months ended September 30, 2020.

Net Income (in thousands)

	Three Months
	Ended September 30,
	2020		2019		$ Change
Net income attributable to SITE Centers	$	7,287	$	23,630	$	(16,343	)

	Nine Months
	Ended September 30,
	2020		2019		$ Change
Net income attributable to SITE Centers	$	37,007	$	76,697	$	(39,690	)

The decrease in net income attributable to SITE Centers as compared to the prior-year period primarily was attributable to the impact of the COVID-19 pandemic, an increase in the valuation allowance related to the Company’s preferred investments in the joint ventures with Blackstone and debt extinguishment costs related to the redemption of the Senior Notes due 2022, partly offset by the gain on sale of the DDRTC joint venture investment in February 2020 and lower preferred dividends.

NON-GAAP FINANCIAL MEASURES

Funds from Operations and Operating Funds from Operations

Definition and Basis of Presentation

The Company believes that Funds from Operations (“FFO”) and Operating FFO, both non-GAAP financial measures, provide additional and useful means to assess the financial performance of REITs. FFO and Operating FFO are frequently used by the real estate industry, as well as securities analysts, investors and other interested parties, to evaluate the performance of REITs. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group.

FFO excludes GAAP historical cost depreciation and amortization of real estate and real estate investments, which assume that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions, and many companies use different depreciable lives and methods. Because FFO excludes depreciation and amortization unique to real estate and gains and losses from ~~depreciable~~ property dispositions, it can provide a performance measure that, when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, interest costs and acquisition, disposition and development activities. This provides a perspective of the Company’s financial performance not immediately apparent from net income determined in accordance with GAAP.

FFO is generally defined and calculated by the Company as net income (loss) (computed in accordance with GAAP), adjusted to exclude (i) preferred share dividends, (ii) gains and losses from disposition of ~~depreciable~~ real estate property and related investments, which are presented net of taxes, (iii) impairment charges on ~~depreciable~~ real estate property and related investments, including reserve adjustments of preferred equity interest, (iv) gains and ~~(iv)~~losses from changes in control and (v) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income (loss) from joint ventures and equity income (loss) from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company’s calculation of FFO is consistent with the definition of FFO provided by ~~the National Association of Real Estate Investment Trusts (“NAREIT”).~~ NAREIT.

The Company believes that certain ~~gains~~charges, income and ~~charges~~gains recorded in its operating results are not comparable or reflective of its core operating performance. Operating FFO is useful to investors as the Company removes non-comparable charges, income and gains to analyze the results of its operations and assess performance of the core operating real estate portfolio. As a result, the Company also computes Operating FFO and discusses it with the users of its financial statements, in addition to other measures such as net income (loss) determined in accordance with GAAP and FFO. Operating FFO is generally defined and calculated by the Company as FFO excluding certain charges, income and gains that management believes are not comparable and indicative of the results of the Company’s operating real estate portfolio. Such adjustments include ~~gains on the sale of and/or change in control of interests, gains/losses on the sale of non-depreciable real estate, impairments of non-depreciable real estate,~~ gains/losses on the early extinguishment of debt, hurricane-related activity, certain transaction fee income, transaction costs and other restructuring type costs. The disclosure of these ~~charges and gains~~adjustments is regularly requested by users of the Company’s financial statements.

The adjustment for these charges, income and gains may not be comparable to how other REITs or real estate companies calculate their results of operations, and the Company’s calculation of Operating FFO differs from NAREIT’s definition of FFO. Additionally, the Company provides no assurances that these charges, income and gains are non-recurring. These charges, income and gains could be reasonably expected to recur in future results of operations.

These measures of performance are used by the Company for several business purposes and by other REITs. The Company uses FFO and/or Operating FFO in part (i) as a disclosure to improve the understanding of the Company’s operating results among the investing public, (ii) as a measure of a real estate ~~asset’s~~asset company’s performance, (iii) to influence acquisition, disposition and capital investment strategies and (iv) to compare the Company’s performance to that of other publicly traded shopping center REITs.

For the reasons described above, management believes that FFO and Operating FFO provide the Company and investors with an important indicator of the Company’s operating performance. They provide recognized measures of performance other than GAAP net income, which may include non-cash items (often significant). Other real estate companies may calculate FFO and Operating FFO in a different manner.

Management recognizes the limitations of FFO and Operating FFO when compared to GAAP’s net income. FFO and Operating FFO do not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use FFO or Operating FFO as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. Neither FFO nor Operating FFO represents cash generated from operating activities in accordance with GAAP, and neither is necessarily indicative of cash available to fund cash needs. Neither FFO nor Operating FFO should be considered an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. FFO and Operating FFO are simply used as additional indicators of the Company’s operating performance. The Company believes that to further understand its performance, FFO and Operating FFO should be compared with the Company’s reported net income (loss) and considered in addition to cash flows determined in accordance with GAAP, as presented in its consolidated financial statements. Reconciliations of these measures to their most directly comparable GAAP measure of net income (loss) have been provided below.

Reconciliation Presentation

FFO and Operating FFO attributable to common shareholders were as follows (in thousands):

Three Months

Ended September 30,

2017

2016

$ Change

FFO attributable to common shareholders
$
46,340

$
120,137

$
(73,797
)
Operating FFO attributable to common shareholders

111,236

120,636

(9,400
)

Nine Months

Ended September 30,

2017

2016

$ Change

FFO attributable to common shareholders^(A)
$
161,677

$
355,000

$
(193,323
)
Operating FFO attributable to common shareholders^(B)

328,538

357,306

(28,768
)

~~(A)~~

The decrease primarily was a result of a $60.6 million valuation allowance recorded on the Company’s preferred investment in two joint ventures, $66.4 million loss on debt extinguishment and an aggregate charge of $16.6 million associated with the executive management transition and a staff restructuring.

~~(B)~~

~~The decrease primarily was attributable to the dilutive impact of using proceeds from asset sales to repay debt.~~

	Three Months
	Ended September 30,
	2020		2019		$ Change
FFO attributable to common shareholders	$	42,262	$	55,117	$	(12,855	)
Operating FFO attributable to common shareholders		43,531		55,374		(11,843	)

	Nine Months
	Ended September 30,
	2020		2019		$ Change
FFO attributable to common shareholders	$	128,911	$	173,669	$	(44,758	)
Operating FFO attributable to common shareholders		144,571		171,079		(26,508	)

The decrease in FFO for the nine months ended September 30, 2020, primarily was attributable to the impact of the COVID-19 pandemic (including the impact on the unconsolidated joint ventures) and higher debt extinguishment costs partially offset by lower general and administrative expenses and lower preferred dividends on account of the redemption of the Company’s Series J Preferred Shares in late 2019. The decrease in OFFO for the nine months ended September 30, 2020, primarily was attributable to the impact of the COVID-19 pandemic.

The Company’s reconciliation of net ~~(loss)~~ income attributable to common shareholders computed in accordance with GAAP to FFO attributable to common shareholders and Operating FFO attributable to common shareholders is as follows (in thousands). The Company provides no assurances that these charges and gains are non-recurring. These charges and gains could reasonably be expected to recur in future results of operations.

Three Months

Nine Months

Ended September 30,

Ended September 30,

2017

2016

2017

2016

Net (loss) income attributable to common shareholders
$
(7,400
)

$
(65,954
)

$
(44,023
)

$
9,490

Depreciation and amortization of real estate investments

81,064

93,334

258,137

283,814

Equity in net (income) loss of joint ventures

(4,811
)

1,457

(2,429
)

(14,081
)
Joint ventures' FFO^(A)

8,268

6,581

21,062

19,157

Non-controlling interests (OP Units)

76

76

227

227

Impairment of depreciable real estate assets

13,620

104,877

54,603

104,877

Gain on disposition of depreciable real estate

(44,477
)

(20,234
)

(125,900
)

(48,484
)
FFO attributable to common shareholders

46,340

120,137

161,677

355,000

(Adjustment) reserve of preferred equity interests

(15,377
)

—

60,623

—

Hurricane casualty^(B)

3,616

—

3,616

—

Impairment charges – non-depreciable assets

1,764

—

10,850

—

Separation charges

—

—

16,552

—

Debt extinguishment and other, net

65,835

540

66,782

179

Joint ventures – debt extinguishment and other

95

6

778

26

Valuation allowance of Puerto Rico prepaid tax asset

8,777

—

8,777

—

Loss (gain) on disposition of non-depreciable real estate, net

186

(47
)

(1,117
)

2,101

Non-operating items, net

64,896

499

166,861

2,306

Operating FFO attributable to common shareholders
$
111,236

$
120,636

$
328,538

$
357,306

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2020			2019			2020			2019
Net income attributable to common shareholders	$	2,154		$	15,248		$	21,608		$	51,549
Depreciation and amortization of real estate investments		39,812			39,329			120,889			118,924
Equity in net income of joint ventures		(250	)		(2,612	)		(908	)		(5,446	)
Joint ventures' FFO^(A)		4,388			8,498			14,529			24,169
Non-controlling interests (OP Units)		—			28			28			84
Impairment of real estate		—			2,750			—			3,370
(Adjustment) reserve of preferred equity interests		(3,542	)		6,373			19,393			12,106
Gain on sale of joint venture interest		(82	)		—			(45,635	)		—
Gain on disposition of real estate, net		(218	)		(14,497	)		(993	)		(31,087	)
FFO attributable to common shareholders		42,262			55,117			128,911			173,669
RVI disposition and refinancing fees		(856	)		(546	)		(2,622	)		(4,960	)
Mark-to-market adjustment (PRSUs)		289			1,418			(1,617	)		2,818
Hurricane property income, net		—			(885	)		—			(885	)
Executive separation charge		1,650			—			1,650			—
Debt extinguishment, transaction, other, net^(B)		186			322			18,207			443
Joint ventures – debt extinguishment and other, net		—			(52	)		42			(6	)
Non-operating items, net		1,269			257			15,660			(2,590	)
Operating FFO attributable to common shareholders	$	43,531		$	55,374		$	144,571		$	171,079

(A)

At September 30, ~~2017~~2020 and ~~2016,~~2019, the Company had an economic investment in unconsolidated joint venture interests related to ~~142~~77 and ~~155~~102 shopping center properties, respectively. These joint ventures represent the investments in which the Company recorded its share of equity in net income or loss and, accordingly, FFO and Operating FFO.

~~FFO at DDR ownership interests considers the impact of basis differentials.~~ Joint ventures’ FFO and Operating FFO are summarized as follows (in thousands):

Three Months

Nine Months

Ended September 30,

Ended September 30,

2017

2016

2017

2016

Net income (loss) attributable to unconsolidated joint
ventures
$
36,080

$
(16,600
)

$
(49,999
)

$
25,772

Depreciation and amortization of real estate investments

45,291

47,955

137,976

146,011

Impairment of depreciable real estate assets

2,160

13,598

82,667

13,598

Gain on disposition of depreciable real estate, net

(31,740
)

(658
)

(30,764
)

(54,255
)
FFO
$
51,791

$
44,295

$
139,880

$
131,126

FFO at DDR's ownership interests
$
8,268

$
6,581

$
21,062

$
19,157

Operating FFO at DDR's ownership interests
$
8,363

$
6,587

$
21,840

$
19,183

	Three Months					Nine Months
	Ended September 30,					Ended September 30,
	2020			2019		2020			2019
Net (loss) income attributable to unconsolidated joint ventures	$	(4,748	)	$	6,027	$	(36,455	)	$	13,846
Depreciation and amortization of real estate investments		23,901			36,867		77,580			113,340
Impairment of real estate		—			—		33,240			12,267
(Gain) loss on disposition of real estate, net		(319	)		440		(9,229	)		(15,205	)
FFO	$	18,834		$	43,334	$	65,136		$	124,248
FFO at SITE Centers' ownership interests	$	4,388		$	8,498	$	14,529		$	24,169
Operating FFO at SITE Centers' ownership interests	$	4,388		$	8,446	$	14,571		$	24,163

(B)

~~The hurricane casualty loss is summarized~~Amounts included in this line item are as follows (in thousands):

Three and Nine Months

Ended September 30,

2017

Lost tenant revenue
$
2,571

Clean up costs and other uninsured expenses

1,045

$
3,616

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2020		2019		2020		2019
Debt extinguishment costs, net	$	—	$	322	$	17,186	$	418
Transaction and other expense, net		186		—		1,021		25
	$	186	$	322	$	18,207	$	443

Net Operating Income and Same Store Net Operating Income

Definition and Basis of Presentation

The Company uses Net Operating Income (“NOI”), which is a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses. The Company believes NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.

The Company also presents NOI information on a same store basis, or Same Store Net Operating Income (“SSNOI”). The Company defines SSNOI as property revenues less property-related expenses, which exclude straight-line rental income (including reimbursements) and expenses, lease termination income, management fee expense, fair market value of leases and expense recovery adjustments. SSNOI includes assets owned in comparable periods (15 months for quarter comparisons). In addition, SSNOI is presented both including and excluding activity associated with development and major redevelopment. In addition, SSNOI excludes all non-property and corporate level revenue and expenses. Other real estate companies may calculate NOI and SSNOI in a different manner. The Company believes SSNOI at its effective ownership interest provides investors with additional information regarding the operating performances of comparable assets because it excludes certain non-cash and non-comparable items as noted above. SSNOI is frequently used by the real estate industry, as well as securities analysts, investors and other interested parties, to evaluate the performance of REITs.

SSNOI is not, and is not intended to be, a presentation in accordance with GAAP. SSNOI information has its limitations as it excludes any capital expenditures associated with the re-leasing of tenant space or as needed to operate the assets. SSNOI does not represent amounts available for dividends, capital replacement or expansion, debt service obligations or other commitments and uncertainties. Management does not use SSNOI as an indicator of the Company’s cash obligations and funding requirements for future commitments, acquisitions or development activities. SSNOI does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs. SSNOI should not be considered as an alternative to net income (computed in accordance with GAAP) or as an alternative to cash flow as a measure of liquidity. A reconciliation of NOI and SSNOI to their most directly comparable GAAP measure of net income (loss) is provided below.

Reconciliation Presentation

The Company’s reconciliation of net income computed in accordance with GAAP to NOI and SSNOI for the Company at 100% and at its effective ownership interest of the assets is as follows (in thousands):

	For the Nine Months Ended September 30,
	2020			2019			2020			2019
	At 100%						At the Company's Interest
Net income attributable to SITE Centers	$	37,007		$	76,697		$	37,007		$	76,697
Fee income		(34,149	)		(45,360	)		(34,149	)		(45,360	)
Interest income		(10,480	)		(13,658	)		(10,480	)		(13,658	)
Interest expense		58,487			63,973			58,487			63,973
Depreciation and amortization		125,014			123,400			125,014			123,400
General and administrative		38,542			44,348			38,542			44,348
Other expense, net		18,207			254			18,207			254
Impairment charges		—			3,370			—			3,370
Equity in net income of joint ventures		(908	)		(5,446	)		(908	)		(5,446	)
Reserve of preferred equity interests		19,393			12,106			19,393			12,106
Tax expense		859			827			859			827
Gain on sale of joint venture interest		(45,635	)		—			(45,635	)		—
Gain on disposition of real estate, net		(993	)		(31,087	)		(993	)		(31,087	)
Income from non-controlling interests		621			836			621			836
Consolidated NOI	$	205,965		$	230,260		$	205,965		$	230,260
SITE Centers' consolidated joint venture		—			—			(1,200	)		(1,314	)
Consolidated NOI, net of non-controlling interests	$	205,965		$	230,260		$	204,765		$	228,946

Net (loss) income from unconsolidated joint ventures	$	(36,455	)	$	13,846		$	366		$	4,676
Interest expense		47,555			73,472			9,251			12,742
Depreciation and amortization		77,580			113,340			13,665			18,195
Impairment charges		33,240			12,267			1,890			2,453
Preferred share expense		13,710			16,487			685			824
Other expense, net		10,844			16,358			2,250			2,988
Gain on disposition of real estate, net		(9,229	)		(15,205	)		(1,778	)		1,515
Unconsolidated NOI	$	137,245		$	230,565		$	26,329		$	43,393

Total Consolidated + Unconsolidated NOI							$	231,094		$	272,339
Less: Non-Same Store NOI adjustments								(7,098	)		(21,620	)
Total SSNOI including redevelopment							$	223,996		$	250,719
Less: Redevelopment Same Store NOI adjustments								(15,791	)		(16,157	)
Total SSNOI excluding redevelopment							$	208,205		$	234,562

SSNOI % Change including redevelopment								(10.7	%)
SSNOI % Change excluding redevelopment								(11.2	%)

The decrease in SSNOI at the Company’s effective ownership interest for the nine months ended September 30, 2020 as compared to 2019 primarily was due to the impact of the COVID-19 pandemic on rent collections (including non-recognition of uncollected contractual lease payments owed by tenants on the cash basis of accounting, other reserves and the impact of lease modification accounting, where applicable) partly offset by increases in the base rent per occupied square foot resulting from a combination of new leases and renewals.

LIQUIDITY, CAPITAL RESOURCES AND FINANCING ACTIVITIES

The Company periodically evaluates opportunities to issue and sell additional debt or equity securities, obtain credit facilities from lenders or repurchase or refinance long-term debt ~~for strategic reasons or~~as part of its overall strategy to further strengthen ~~the~~its financial ~~position of the Company. In the first nine months of 2017, the~~position. The Company ~~completed two public debt offerings~~remains committed to monitoring liquidity and maintaining low leverage in an ~~issuance of preferred shares in order~~effort to ~~refinance maturing debt and improve duration.~~lower its overall risk profile.

The Company’s consolidated and unconsolidated debt obligations generally require monthly or semi-annual payments of principal and/or interest over the term of the obligation. While the Company currently believes it has several viable sources to obtain capital and fund its business, including capacity under its credit facilities described below, no assurance can be provided that these obligations will be refinanced or repaid as currently anticipated.

The Company has historically accessed capital sources through both the public and private markets. Acquisitions ~~developments~~ and redevelopments are generally financed through cash provided from operating activities, Revolving Credit Facilities (as defined below), mortgages assumed, secured debt, unsecured debt, common and preferred equity offerings, joint venture capital and asset sales. Total consolidated debt outstanding was ~~$4.0~~$1.8 billion at both September 30, 2020, and ~~$4.5 billion~~December 31, 2019.

As a result of the uncertain impact that the COVID-19 pandemic might have on the Company’s business and the duration thereof, the Company took proactive measures to further improve its financial position and liquidity. In March 2020, as a precautionary measure, the Company drew $500.0 million on its Revolving Credit Facilities. Proceeds from the sale of its interest in the DDRTC joint venture, along with an additional $145.0 million from borrowings under the Revolving Credit Facilities, were used in March 2020 to redeem all $200.0 million aggregate principal amount of the Senior Notes due 2022. In the second and third quarters of 2020, the Company repaid $470.0 million under the Revolving Credit Facilities in light of the health and relative stability in the capital markets and improving operating cash flow. As a result, the Company had an unrestricted cash balance of $57.2 million at September 30, ~~2017~~2020 and ~~December 31, 2016,~~remaining availability under the Revolving Credit Facilities of $795.0 million (subject to satisfaction of applicable borrowing conditions). The Company has no consolidated mortgage debt maturing during the remainder of 2020, $15.6 million of consolidated mortgage debt maturing in 2021 and no unsecured debt maturities prior to 2023. The Company’s unconsolidated joint ventures have $3.4 million and $102.8 million of mortgage debt at the Company’s share maturing in the remainder of 2020 and in 2021, respectively. Included in the 2021 maturities is $4.6 million (or $91.1 million at 100%) of mortgage indebtedness that was assumed by the Company as part of the transaction involving BRE DDR IV that closed in October 2020. Also included in the 2021 maturities is $11.5 million that will be assumed by Blackstone as part of the transaction involving BRE DDR III that is expected to close in the fourth quarter of 2020. As a result of the impacts of the COVID-19 pandemic, the Company has also taken steps to substantially reduce capital spending and anticipates that it has approximately $31 million to fund on its redevelopment pipeline as of September 30, 2020. The Company also elected not to pay a dividend on its common shares for the second and third quarters of 2020. The Company believes that these collective actions will provide sufficient liquidity to operate its business.

Revolving Credit Facilities

~~In September 2017, the~~The Company ~~amended and restated its~~maintains an unsecured revolving credit facility with a syndicate of financial institutions, arranged by Wells Fargo Securities, LLC, J.P. Morgan Chase Bank, N.A., ~~Wells Fargo Securities, LLC,~~ Citizens Bank, N.A., RBC Capital Markets and U.S. Bank National Association (the “Unsecured Credit ~~Facility”~~Facility.”). The Unsecured Credit Facility ~~was amended to increase the maximum amount available to be drawn under the facility from $750 million~~provides for borrowings of up to $950 million ~~extend~~(which may be increased to $1.45 billion provided that the new or existing lenders agree to provide the incremental commitments) and a maturity date of January 2024, subject to ~~September 2021, add~~ two six-month options to extend the maturity to ~~September 2022~~January 2025 upon the Company’s request ~~and increase the accordion feature for expansion~~(subject to satisfaction of availability up to $1.45 billion from $1.25 billion upon the Company’s request, provided that new or existing lenders agree to the existing terms of the facility and increase their commitment level.certain conditions). The Company also ~~amended its~~maintains an unsecured revolving credit facility with PNC Bank, National Association, which provides for ~~maximum borrowing availability~~borrowings of ~~$50~~up to $20 million ~~(together~~(the “PNC Facility,” and together with the Unsecured Credit Facility, the “Revolving Credit Facilities”), ~~to reflect~~and has terms substantially the same ~~terms~~ as those contained in the Unsecured Credit Facility. The Company’s borrowings under the Revolving Credit Facilities bear interest at variable rates at the Company’s election, based on either LIBOR plus a specified spread ~~(1.0%~~(0.90% at September 30, ~~2017)~~2020), or the ~~Prime~~Alternate Base Rate, as defined in the respective ~~facility.~~facility, plus a specified spread (0% at September 30, 2020). The Company also pays an annual facility fee of 20 basis points on the aggregate commitments applicable to each Revolving Credit Facility. The specified spreads and commitment fees vary depending on the Company’s long-term senior unsecured debt ratings from Moody’s Investors Service, Inc. (“Moody’s”) ~~and~~, S&P Global Ratings (“S&P”), Fitch Investor Services Inc. (“Fitch”) and their ~~successors (“S&P”).~~successors.

The Revolving Credit Facilities and the indentures under which the Company’s senior and subordinated unsecured indebtedness are, or may be, issued contain certain financial and operating covenants including, among other things, leverage ratios and debt service coverage and fixed charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets and engage in mergers and certain acquisitions. These credit facilities and indentures also contain customary default provisions including the failure to make timely payments of principal and interest payable thereunder, the failure to comply with the Company’s financial and operating covenants ~~the occurrence of a material adverse effect on the Company~~ and the failure of the Company or its majority-owned subsidiaries (i.e., entities in which the Company has a greater than 50% interest) to pay, when due, certain indebtedness in excess of certain thresholds beyond applicable grace and cure periods. In the event the Company’s lenders or note holders declare a default, as defined in the applicable agreements governing the debt, the Company may be unable to obtain

further funding and/or an acceleration of any outstanding borrowings may occur. As of September 30, ~~2017,~~2020, the Company was in compliance with all of its financial covenants in the agreements governing its debt. Although the Company intends to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities. ~~The~~Though the Company is closely monitoring the impact of the COVID-19 pandemic on its business, the Company believes it will continue to operate in compliance with these ~~covenants in 2018 and beyond.~~

Certain of the Company’s credit facilities and indentures permit the acceleration of the maturity of the underlying debt in the event certain other debt of the Company has been accelerated. Furthermore, a default under a loan by the Company or its affiliates, a foreclosure on a mortgaged property owned by the Company or its affiliates or the inability to refinance existing indebtedness may have a negative impact on the Company’s financial condition, cash flows and results of operations. These facts, and an inability to predict future economic conditions, have led the Company to continue to increase financial flexibility.

~~Senior Notes~~

In August 2017, the Company issued $350.0 million aggregate principal amount of 3.900% senior unsecured notes due August 2024. Net proceeds from the issuance were used to repay all of the Company’s $300.0 million aggregate principal amount of 7.875% senior unsecured notes due September 2020. In connection with this repayment, the Company paid $51.2 million in make-whole premiums.

In May 2017, the Company issued $450.0 million aggregate principal amount of 4.700% senior unsecured notes due June 2027. Net proceeds from the issuance were used to repay amounts outstanding under the Revolving Credit Facilities and for general corporate purposes. In July 2017, the Company repaid all of its $300.0 million aggregate principal amount of 4.75% senior unsecured notes due April 2018 in part with a portion of the net proceeds of the 4.700% senior unsecured notes due June 2027 and the net proceeds from its $175.0 million aggregate liquidation preference of 6.375% Class A cumulative redeemable preferred shares as described below. In connection with this repayment, the Company paid $7.3 million in make-whole premiums.

~~Equity~~

~~Preferred Shares~~

In June 2017, the Company issued $175.0 million aggregate liquidation preference, of its newly designated 6.375% Class A cumulative redeemable preferred shares at a price of $500.00 per share (or $25.00 per depositary share).

~~Common Shares~~

~~The Company has a $250 million continuous equity program. At November 1, 2017, the Company had $250.0 million available for the future issuance of common shares under that program.~~covenants.

Consolidated Indebtedness – as of September 30, ~~2017~~2020

~~The Company expects to fund its obligations from available cash, current operations and utilization of its Revolving Credit Facilities; however,~~As discussed above, the Company is committed to maintaining low leverage and may issue long-term debt and/or equity securities in lieu of, or in addition to, borrowing under its Revolving Credit Facilities. The Company intends to continue to maintain a long-term financing strategy with limited reliance on short-term debt. The Company believes its Revolving Credit Facilities are sufficient for its liquidity strategyutilize proceeds from asset sales and ~~longer-term capital structure needs. Part of the Company’s overall strategy includes scheduling future debt maturities in a balanced manner over the long-term.~~

The following depicts the Company’s consolidated debt maturities at September 30, 2017, and forecasted thirteen months (October 2018), after deducting debt that has refinancing options, and compares that amount to the cash and restricted cash available to fund debt repayments and availability of the Revolving Credit Facilities (in millions):

July 2018 Senior Note maturity
$
82.2

April 2018 Unsecured Term Loan maturity^(A)

200.0

January–October 2018 mortgage debt maturities

104.2

386.4

Less Mortgage Indebtedness repaid through November 1, 2017

(104.2
)
Less Unsecured Term Loan extension option^(A)

(200.0
)
Pro forma debt maturities at November 1, 2017
$
82.2

Cash and cash equivalents at September 30, 2017
$
18.3

Borrowing capacity available on Revolving Credit Facilities at September 30, 2017

1,000.0

Pro forma cash and Revolving Credit Facilities available at October 1, 2017
$
1,018.3

~~(A)~~

~~Debt maturity is expected to be extended at the Company’s option in accordance with the loan agreement.~~

As a result of the refinancings and repayments through November 1, 2017, the scheduled principal payments of the Revolving Credit Facilities and unsecured and secured indebtedness, excluding extension options, are as follows (in thousands):

Year

Amount

2017

$
2.2

2018

298.8

2019

182.5

2020

347.6

2021

452.9

Thereafter

2,645.7

Total debt outstanding face value

$
3,929.7

~~At November 1, 2017, the Company’s borrowing capacity on the Revolving Credit Facilities and cash on hand were sufficient~~other investments to repay ~~debt maturities through 2018. The Company is looking to strengthen its balance sheet and reduce leverage and, as a result, may utilize net asset sale proceeds to repay~~additional debt. No assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. These sources of funds could be affected by various risks and ~~uncertainties (see~~uncertainties. See Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016).~~2019 and this Quarterly Report on Form 10-Q.

As of November 1, 2017, the Company has addressed all of its 2017 consolidated debt maturities, as well as all of its 2018 consolidated mortgage debt maturities. Management believes the scheduled debt maturities in future years are manageable. The Company continually evaluates its debt maturities and, based on management’s assessment, believes it has viable financing and refinancing alternatives. The Company ~~seeks~~has sought to manage its debt maturities through executing a strategy to extend debt duration, increase liquidity, ~~lower~~maintain low leverage and improve the Company’s credit profile with ~~the~~a focus of lowering the Company's balance sheet risk and cost of capital. ~~The result of the unsecured debt and preferred share offerings in the second and third quarters of 2017 and the application of the proceeds therefrom was to extend the Company’s debt duration.~~

Unconsolidated Joint Ventures Mortgage Indebtedness – as of September 30, ~~2017~~2020

The ~~debt maturities~~outstanding indebtedness of the Company’s unconsolidated joint ventures at September 30, ~~2017, and forecasted thirteen months (October 2018)~~2020, which matures in the subsequent 13-month period (i.e. through October 31, 2021), ~~are~~is as follows (in millions):

Outstanding
at September 30, 2017

At DDR Share

DDR – SAU Retail Fund, LLC^(A)

59.5

11.9

BRE DDR Retail Holdings IV^(A)

34.0

1.7

DDRTC Core Retail Fund, LLC^(B)

185.6

27.8

BRE DDR Retail Holdings III^(B)

606.2

30.3

Total debt maturities through October 2018
$
885.3

$
71.7

	Outstanding at September 30, 2020		At SITE Centers' Share
DDR Domestic Retail Fund I^(A)	$	274.2	$	54.8
BRE DDR Retail Holdings III^(B)		230.0		11.5
BRE DDR Retail Holdings IV^(C)		91.1		4.6
RVIP IIIB^(D)		64.2		16.5
Sun Center Limited^(D)		19.3		15.4
DDR SAU Retail Fund LLC^(E)		17.1		3.4
Total debt maturities through October 2021	$	695.9	$	106.2

(A)

~~Expected to be refinanced.~~

~~(B)~~

Expected to be extended at the joint venture’s option in accordance with the loan agreement.

(B)

Expected to be assumed by the joint venture partner in connection with the termination of the BRE DDR III joint venture in the fourth quarter of 2020. See Note 3, “Investments in and Advances to Joint Ventures,” in the Company’s consolidated financial statements included herein.

(C)

Assumed by the Company in October 2020 in connection with the termination of the BRE DDR IV joint venture. The Company expects the loan to be extended at the Company’s option in accordance with the loan agreement. See Note 3, “Investments in and Advances to Joint Ventures,” in the Company’s consolidated financial statements included herein.

(D)

Expected to be refinanced.

(E)

Expected to enter into an extension agreement with the lender.

ItSubject to the uncertain impact of the COVID-19 pandemic on capital and transactions markets, it is expected that the joint ventures will fund these obligations from refinancing opportunities, including extension options or possible asset sales. No assurance can be provided that these obligations will be refinanced or repaid as currently anticipated. Similar to SITE Centers, the Company’s joint ventures have experienced a reduction in second and third quarter’s rent collections as a result of the impact of the COVID-19 pandemic. Depending on the duration of the impact of the COVID-19 pandemic, and subject to discussions with applicable lenders, reduced rent collections may cause one or more of these joint ventures to be unable to satisfy applicable covenants, financial tests, or debt service requirements in the future, thereby allowing the mortgage lender to assume control of property cash flows, limit distributions of cash to joint venture members, declare a default, increase the interest rate or accelerate the loan’s maturity.

Cash Flow Activity

The Company’s core business of leasing space to well-capitalized retailers continues to generate consistent and predictable cash flow after expenses, interest payments and preferred share dividends. This capital is available for use at the Company’s discretion for investment, debt repayment and the payment of dividends on common and preferred shares.

The Company’s cash flow activities are summarized as follows (in thousands):

	Nine Months						Nine Months
	Ended September 30,						Ended September 30,
	2017			2016			2020			2019
Cash flow provided by operating activities	$	302,233		$	351,022		$	125,934		$	189,420
Cash flow provided by investing activities		270,059			34,427			102,370			29,631
Cash flow used for financing activities		(591,424	)		(384,617	)		(189,941	)		(206,676	)

Changes in cash flow for the nine months ended September 30, ~~2017,~~2020, compared to the prior ~~year~~ comparable period are ~~described~~ as follows:

Operating Activities: Cash provided by operating activities decreased ~~$48.8~~$63.5 million primarily due to the following:

•

Impact of the COVID-19 pandemic on collection of contractual obligations from tenants and

~~Impact of asset sales, partially offset by a decrease in interest expense.~~

•

Reduction in income due to properties sold and reduction in RVI and DDRTC joint venture fee income.

Investing Activities: Cash provided by investing activities increased ~~$235.6~~$72.7 million primarily due to the following:

~~Higher proceeds of $158.5 million from disposition of real estate,~~

•

Increase in proceeds of $34.6 million from disposition of real estate and the DDRTC joint venture interest;

~~Repayment of $31.1 million of notes receivable in 2017,~~

•

Increase in repayment of notes receivable of $7.5 million;

~~Reduction in real estate assets acquired and developed of $105.0 million and~~

•

Decrease in real estate improvements of $29.2;

•

Decrease in net cash contributed to joint ventures of $18.4 million and

~~Additional equity contributions to joint ventures of $67.7 million.~~

•

Decrease in net transactions with RVI of $17.0 million.

Financing Activities: Cash used for financing activities ~~increased $206.8~~decreased $16.7 million primarily due to the following:

•

Decrease in dividends paid of $41.3 million;

•

Decrease in common share repurchases of $6.6 million and

•

Increase in debt net of issuance and repayment costs of $31.1 million.

~~Increase~~RVI Preferred Shares

In 2018, RVI issued to the Company 1,000 shares of ~~$1.2 billion~~its series A preferred stock (the “RVI Preferred Shares”), which are noncumulative and have no mandatory dividend rate or maturity date. The RVI Preferred Shares rank, with respect to dividend rights and rights upon liquidation, dissolution or winding up of RVI, senior in ~~debt repayments~~preference and

~~Issuance~~ priority to RVI’s common shares and any other class or series of ~~unsecured senior notes~~RVI capital stock. Subject to the requirement that RVI distribute to its common shareholders the minimum amount required to be distributed with respect to any taxable year in order for RVI to maintain its status as a REIT and ~~preferred shares~~to avoid U.S. federal income taxes, the RVI Preferred Shares will be entitled to a dividend preference for all dividends declared on RVI’s capital stock at any time up to a “preference amount” equal to $190 million in ~~2017 aggregating $960.1 million.~~the aggregate, which amount may increase by up to an additional $10 million if the aggregate gross proceeds of RVI asset sales subsequent to July 1, 2018, exceeds $2.0 billion. Notwithstanding the foregoing, the RVI Preferred Shares are entitled to receive dividends only when, as and if declared by the Board of Directors of RVI, and RVI’s ability to pay dividends is subject to any restrictions set forth in the terms of its indebtedness.

Dividend Distribution

The Company ~~satisfied its REIT requirement of distributing at least 90% of ordinary taxable income with~~ declared common and preferred ~~share~~ cash dividends of ~~$230.6~~$54.3 million and ~~$225.3~~$133.9 million for the nine months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively. ~~Because actual distributions were greater than~~The Company intends to distribute at least 100% of ordinary taxable income in the form of common and preferred dividends with respect to the year ending December 31, 2020 in order to maintain compliance with REIT requirements and in order to not incur federal income taxes ~~were~~(excluding federal income taxes applicable to its taxable REIT subsidiary activities).

The Company paid a quarterly cash dividend of $0.20 per common share in the first quarter of 2020. In order to maintain maximum flexibility given the uncertain impact of the COVID-19 pandemic on its business, the Company’s Board of Directors elected not ~~incurred by~~to declare a dividend on its common shares for the second and third quarters of 2020. The Board of Directors has not made any decisions with respect to its dividend policy beyond the third quarter of 2020 and will continue to evaluate its dividend policy on a quarterly basis based on operating cash flows. The Company intends to maintain compliance with REIT taxable income distribution requirements.

Common Shares and Common Share Repurchase Program

The Company has a $250.0 million continuous equity program. At October 26, 2020, the Company inhad all $250.0 million available for the future issuance of common shares under that program.

In November 2018, the Company’s Board of Directors authorized a common share repurchase program. Under the terms of the program, the Company may purchase up to a maximum value of $100 million of its common shares. In the first nine months of ~~2017.~~

~~The Company declared a quarterly dividend of $0.19 per common share for each of the first three quarters of 2017. The Board of Directors of~~2020, the Company ~~expects to continue to monitor the 2017 dividend policy and provide for adjustments as determined to be in the best interests~~repurchased 0.8 million shares at a cost of $7.5 million. Through October 26, 2020, the Company ~~and~~had repurchased 5.1 million of its ~~shareholders to maximize the Company’s free cash flow while still adhering to REIT payout requirements.~~

common shares under this program in open market transactions at an aggregate cost of approximately $57.9 million.

SOURCES AND USES OF CAPITAL

Strategic Transaction Activity

The Company remains committed to ~~strengthening the balance sheet, improving~~monitoring liquidity and ~~lowering~~maintaining low leverage ~~as well as lowering~~in an effort to lower its overall risk profile. Asset sales and proceeds from the repayment of other investments continue to represent a potential source of proceeds to be used to achieve these objectives.

~~Dispositions~~Proceeds from Transactional Activity

In February 2020, the Company sold its 15% interest in the DDRTC joint venture to its partner, an affiliate of TIAA-CREF, based on a gross fund value of $1.14 billion, which included $184.9 million of mortgage debt at December 31, 2019. As ~~part~~of December 31, 2019, the DDRTC joint venture was composed of 21 assets, totaling 7.1 million square feet. The Company received net proceeds of $140.4 million in the nine months ended September 30, 2020.

During the nine months ended September 30, 2020, the Company’s unconsolidated joint ventures sold two shopping centers, aggregating 0.2 million square feet, together with wholly owned land sales, generating proceeds totaling $28.7 million, of which the Company’s proportionate share of the proceeds was $6.6 million. The Company’s ~~overall deleveraging strategy,~~pro rata share of proceeds is before giving effect to the repayment of indebtedness and transaction costs. In March 2020, the Company ~~had been marketing less strategic assets for sale. The new executive management team has evaluated~~also received $7.5 million related to the ~~portfolio on an asset-by-asset basis to determine the most prudent investment decisions.~~ repayment of a loan investment.

Changes in investment strategies for assets may impact the Company’s ~~impairment~~hold-period assumptions for those properties. The disposition of certain assets could result in a loss or impairment recorded in future periods. The Company evaluates all potential sale opportunities taking into account the long-term growth prospects of the assets, the use of proceeds and the impact to the Company’s balance sheet, in addition to the impact on operating results.

~~During the nine months ended September 30, 2017,~~BRE DDR Joint Ventures

On July 14, 2020, the Company ~~sold 25 shopping center properties, aggregating 4.1 million square feet, which, together~~entered into agreements with ~~land sales~~affiliates of Blackstone to terminate the BRE DDR III and ~~loan repayments, generated proceeds totaling $506.3 million.~~BRE DDR IV joint ventures. The ~~shopping center sales include two assets~~BRE DDR IV transaction closed on October 15, 2020 and the BRE DDR III transaction is expected to close in ~~Puerto Rico~~the fourth quarter of 2020, as soon as all applicable conditions have been satisfied, including receipt of required lender consents. See Note 3, “Investments in ~~June 2017, aggregating 0.4 million square feet, for an aggregate sales price of $57.3 million. The Company recorded a net gain of $127.0 million. In addition, two~~and Advances to Joint Ventures,” in the Company’s consolidated financial statements included herein.

Redevelopment Opportunities

One key component of the Company’s unconsolidated joint ventures sold nine shopping center assets for a gross sales price of $182.0 million. In October 2017, one asset was sold by the Company and one by the Company’s unconsolidated joint venture for an aggregate price of $190.0 million. In addition, the Company received $48.6 million in preferred equity repayments from the unconsolidated joint venture asset sale.

~~DDRM Properties (Recapitalization of DDR Domestic Retail Fund I)~~

DRF I, including the Company. In addition, the Company will continue to provide leasing and management services. The recapitalization included the repayment of all outstanding mortgage debt previously held by the joint venture, a majority of which was scheduled to mature in July 2017. The joint venture obtained new mortgage loan financing collateralized by the 52 assets aggregating $706.7 million (of which the Company’s pro rata share was $141.3 million) that with extension options matures in July 2022. DDR contributed $46.9 million in cash to fund its pro rata share of the recapitalization and related debt refinancing.

~~Acquisition~~

In January 2017, the Company acquired 3030 North Broadway in Chicago, Illinois, a 131,748 square foot Company-owned GLA grocery-anchored shopping center, for $81.0 million. The contract for this acquisition was initially executed in mid-2016, but closing was delayed due to the completion of construction.

~~Development and Redevelopment Opportunities~~

One of the important benefits of the Company’s asset class is the ability to phase development and redevelopment projects over time until appropriate leasing levels can be achieved. To maximize the return on capital spending, the Company has generally adhered to strict investment criteria thresholds. A key component to the Company’slong-term strategic plan will be the evaluation of additional redevelopment potential within the portfolio, particularly as it relates to the efficient use of the underlying real ~~estate and the Company’s ratio of big box tenants versus small shop tenant space.~~

estate. The Company will generally commence construction on various ~~developments and~~ redevelopments only after substantial tenant leasing has occurred. ~~The~~However, in light of the COVID-19 pandemic, the Company will ~~continue to~~ closely monitor its expected spending ~~in 2017~~during the remainder of 2020 for ~~redevelopments,~~redevelopment, as the Company considers this funding to be discretionary spending. The Company recently has taken steps to substantially reduce capital spending and anticipates that it has approximately $31 million remaining to fund on its redevelopment pipeline as of September 30, 2020. The Company does not anticipate expending significant funds on joint venture redevelopment projects ~~in 2017.~~for the remainder of 2020.

The Company’s consolidated land holdings are classified in two separate line items on the Company’s consolidated balance sheets included ~~herein:~~herein, (i) Land and (ii) Construction in Progress and Land. At September 30, ~~2017,~~2020, the ~~$1.9 billion~~$881.5 million of Land primarily consisted of land that is part of the Company’s shopping center portfolio. However, this amount also includes a small portion of vacant land composed primarily of outlots or expansion pads adjacent to the shopping center properties. Approximately ~~135~~130 acres of this land, which has a recorded cost basis of approximately ~~$17~~$15 million, is available for future ~~development.~~development or sale.

Included in Construction in Progress and Land at September 30, ~~2017,~~2020 was ~~$25~~approximately $8 million of recorded costs related to undeveloped land being marketed for sale for which active construction never commenced or ~~was~~ previously ceased. The Company evaluates these assets each reporting period and records an impairment charge equal to the difference between the current carrying value and fair value when the expected undiscounted cash flows are less than the asset’s carrying value.

~~Development and~~ 34

Redevelopment Projects

As part of its strategy to ~~develop,~~ expand, improve and re-tenant various properties, at September 30, ~~2017,~~2020, the Company has invested approximately ~~$152~~$88 million in various consolidated active redevelopment ~~projects~~ and ~~expects to bring at least $80 million of development into service in 2017 on a net basis, after deducting sales proceeds from outlot sales.~~

~~At September 30, 2017, the Company had no significant consolidated development~~other projects.

The Company’s major redevelopment projects are typically substantially complete within ~~a year~~two years of the construction commencement date. At September 30, ~~2017,~~2020, the Company’s significant consolidated redevelopment projects were as follows (in thousands):

Location

Estimated
Stabilized
Quarter

Estimated
Gross Cost

Cost Incurred at
September 30, 2017

Belgate Shopping Center (expansion) (Charlotte, North Carolina)

4Q17

$
25,788

$
20,682

Kenwood Square (Cincinnati, Ohio)

2Q18

31,171

23,575

Plaza del Sol (expansion) (San Juan, Puerto Rico)

1Q18

11,818

9,105

Lee Vista Promenade (Orlando, Florida)

1Q19

39,342

28,521

West Bay Plaza (Cleveland, Ohio)

3Q19

27,792

2,208

Total

$
135,911

$
84,091

Location	Estimated Stabilized Quarter	Estimated Gross Cost		Cost Incurred at September 30, 2020
The Collection at Brandon Boulevard (Tampa, Florida)	3Q20	$	27,732	$	22,921
1000 Van Ness (San Francisco, California)	4Q21		4,810		—
Woodfield Village Green (Chicago, Illinois)	TBD		—		254
Sandy Plains Village (Atlanta, Georgia)	TBD		—		1,334
Perimeter Pointe (Atlanta, Georgia)	TBD		—		1,149
Total		$	32,542	$	25,658

For redevelopment assets completed in ~~2017,~~2020, the assets placed in service were completed at a cost of approximately ~~$114~~$164 per square foot.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has a number of off-balance sheet joint ventures with varying economic structures. Through these interests, the Company has investments in operating properties and one development project. Such arrangements are generally with institutional ~~investors located throughout the United States.~~investors.

The Company’s unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of ~~$2.7~~$1.4 billion and ~~$3.1~~$1.8 billion at September 30, ~~2017~~2020 and ~~2016,~~2019, respectively (see Item 3. Quantitative and Qualitative Disclosures About Market Risk). Of the outstanding indebtedness at September 30, 2020, $0.4 million is outstanding from the BRE DDR Joint Ventures. See Note 3, “Investments in and Advances to Joint Ventures,” in the Company’s consolidated financial statements included herein. Such mortgages are generally non-recourse to the Company and its partners; however, certain mortgages may have recourse to the Company and its partners in certain limited situations, such as ~~misuse~~misappropriation of funds, impermissible transfer, environmental contamination and material misrepresentations.

CAPITALIZATION

At September 30, ~~2017,~~2020, the Company’s capitalization consisted of ~~$4.0~~$1.8 billion of debt, ~~$525.0~~$325.0 million of preferred shares and ~~$3.4~~$1.4 billion of market equity (market equity is defined as common shares and OP Units outstanding multiplied by ~~$9.16,~~$7.20, the closing price of the Company’s common shares on the New York Stock Exchange aton September 30, ~~2017)~~2020), resulting in a debt to total market capitalization ratio of 0.51 to 1.0, as compared to the ratio of ~~0.43~~0.36 to 1.0 at September 30, ~~2016.~~2019. The closing price of the Company’s common shares on the New York Stock Exchange was ~~$17.43~~$15.11 at September 30, ~~2016. The~~2019. At September 30, 2020 and 2019, the Company’s total debt consisted of ~~the following (in billions):~~$1.5 billion and $1.7 billion of fixed-rate debt, respectively, and $0.3 billion and $0.1 billion of variable-rate debt, respectively.

September 30,

2017

2016

Fixed-rate debt^(A)
$
3.5

$
4.0

Variable-rate debt

0.5

1.0

$
4.0

$
5.0

~~(A)~~

~~Includes $77.3 million of variable-rate debt that had been effectively swapped to a fixed rate through the use of interest rate derivative contracts at September 30, 2016.~~

It is management’s strategy to have access to the capital resources necessary to manage the Company’s balance sheet and to repay upcoming maturities. Accordingly, the Company may seek to obtain funds through additional debt or equity financings and/or joint venture capital in a manner consistent with its intention to operate with a conservative debt capitalization policy and to reduce the Company’s cost of capital by maintaining an investment grade rating with Moody’s, S&P and ~~Fitch Ratings, Inc. The~~Fitch. A security rating is not a recommendation to buy, sell or hold securities, as it may be subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating. The Company may not be able to obtain financing on favorable terms, or at all, which may negatively affect future ratings.

The Company’s credit facilities and the indentures under which the Company’s senior and subordinated unsecured indebtedness ~~is,~~are, or may be, issued contain certain financial and operating covenants, including, among other things, debt service coverage and fixed charge coverage ratios, as well as limitations on the Company’s ability to incur secured and unsecured indebtedness, sell all or substantially all of the Company’s assets, ~~and~~ engage in mergers and certain ~~acquisitions.~~acquisitions and make distribution to its shareholders. Although the Company intends to operate in compliance with these covenants, if the Company were to violate these covenants, the Company may be subject to higher finance costs and fees or accelerated maturities. In addition, certain of the Company’s credit facilities and indentures ~~may~~ permit the acceleration of maturity in the event certain other debt of the Company is in default or has been accelerated. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would have a negative impact on the Company’s financial condition and results of operations.

CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS

~~As of November 1, 2017, the~~The Company ~~had addressed all of its 2017 and 2018~~has no consolidated ~~mortgage~~ debt ~~maturities.~~ ~~As the Company’s strategy is to repay debt and extend maturity, the Company’ s scheduled principal payments as of~~ ~~November 1, 2017, is presented herein in “Liquidity, Capital Markets and Financing Activities.”~~ maturing until June 2021. The Company expects to fund future maturities ~~through the~~from utilization of its Revolving Credit Facilities, proceeds from asset sales and other investments, cash flow from operations and/or additional debt or equity financings. No assurance can be provided that these obligations will be repaid as currently anticipated or refinanced.

RVI Guaranty

In 2018, the Company provided an unconditional guaranty to PNC Bank with respect to any obligations of RVI outstanding from time to time under a $30 million revolving credit agreement entered into by RVI with PNC Bank. RVI has agreed to reimburse the Company for any amounts paid by it to PNC Bank pursuant to the guaranty plus interest at a contracted rate and to pay an annual commitment fee to the Company on account of the guaranty.

Other Guaranties

In conjunction with the ~~development and~~ redevelopment of shopping centers, the Company had entered into commitments with general contractors aggregating approximately ~~$19.0~~$8.3 million for its consolidated properties at September 30, ~~2017.~~2020. These obligations, composed principally of construction contracts, are generally due within 12 to 24 months, as the related construction costs are incurred, and are expected to be financed through operating cash flow, ~~new or existing construction loans,~~ asset sales or borrowings under the Revolving Credit Facilities. These contracts typically can be changed or terminated without penalty.

The Company routinely enters into contracts for the maintenance of its properties. These contracts typically can be canceled upon 30 to 60 days’ notice without penalty. ~~The Company’s~~At September 30, 2020, the Company had purchase order obligations, typically payable within one year, aggregating approximately $1.2 million related to the maintenance of its properties and general and administrative ~~expenses are typically payable within one year and are not a material amount.~~expenses.

~~Hurricane Casualty Loss~~

In September 2017, Hurricane Irma made landfall in both Puerto Rico and Florida, and Hurricane Maria made landfall in Puerto Rico. The Company’s Florida assets were minimally impacted by Hurricane Irma, with the majority of repair costs related to debris removal. However, the Company’s 12 assets in Puerto Rico, aggregating 4.4 million square feet of Company-owned GLA, were significantly impacted. One of the 12 assets (Plaza Palma Real, consisting of approximately 0.4 million of Company-owned GLA) was severely damaged; it is currently not operational, except for one tenant, and is not expected to open for the foreseeable future. The other 11 assets incurred varying degrees of damage, including some tenant spaces currently untenantable. Such damage consisted primarily of roof, HVAC system and water intrusion.

As of November 1, 2017, nine of the assets had partial to full utility power and were available for occupancy by some tenants, although due to the damage, portions of these properties remain unavailable for occupancy. ~~Three of the assets (Plaza Escorial, Plaza Palma Real and Plaza Walmart) are without power.~~ The Company has completed debris removal, roof repairs, interior building mitigation, repairs to building exteriors and repairs to mechanical systems to prevent further water intrusion and related damages at its Puerto Rico shopping centers and continues to assess the scope of necessary repairs. The schedule of additional repair work, as well as the ability to turn over space to tenants, is highly dependent on the full restoration of utilities at all of its shopping centers in Puerto Rico, and the availability of building materials, supplies and skilled labor. The Company does not currently know when full utility service will be restored at the shopping centers with partial or no service, or the extent of the services that will be provided in the interim, if any. As such, the Company is unable to estimate when repair work will be completed or when the remaining tenants will reopen for business.

The Company maintains insurance on its assets in Puerto Rico with policy limits of approximately $330 million for both property damage and business interruption. The Company's insurance policies are subject to various terms and conditions, including a combined property damage and business interruption deductible of approximately $6.0 million. The Company estimates its aggregate casualty insurance claim to be in the range of $125 – $150 million, which includes the costs to clean up, repair and rebuild as well as lost revenue estimated through December 31, 2017. The amount also includes casualty insurance proceeds due from certain U.S.-based anchor tenants that maintain property insurance of their Company-owned premises. This estimate does not take into account the increased costs associated with resource constraints in Puerto Rico relating to building materials, supplies and labor. The Company’s ability to repair its properties, and the cost of such repairs, could be negatively impacted by circumstances and events beyond the Company’s control, such as access to building materials and the restoration of utility service. Therefore, there can be no assurance that the Company’s ability to prepare estimates of property damage and lost rental revenue are accurate. The Company believes it maintains adequate insurance coverage on each of its properties and is working closely with the insurance carriers to obtain the maximum amount of insurance recovery provided under the policies. However, the Company can give no assurances as to the amounts of such claims, timing of payments and resolution of the claims.

The Company’s business interruption insurance covers lost revenue through the period of property restoration and for up to 365 days following completion of restoration. For the three and nine months ended September 30, 2017, rental revenues of $2.6 million for Hurricanes Irma and Maria were not recorded related to lost tenant revenue that is expected to be partially defrayed by insurance proceeds. The Company will record revenue for covered business interruption claims in the period it determines that it is probable it will be compensated. As such, there could be a delay between the rental period and the recording of revenue. The amount of any future lost revenue depends on when properties are reopened for tenants, which, in turn, is highly dependent upon the timing and progress of repairs. The Company expects to make a claim under its business interruption insurance for this lost revenue. However, there can be no assurance that insurance claims will be resolved favorably to the Company or in a timely manner.

~~See further discussion in Note 9, “Commitments and Contingencies,” of the Company’s consolidated financial statements included herein.~~

INFLATION

Most of the Company’s long-term leases contain provisions designed to mitigate the adverse impact of inflation. Such provisions include clauses enabling the Company to receive additional rental income from escalation clauses that generally increase rental rates during the terms of the leases and/or percentage rentals based on tenants’ gross sales. Such escalations are determined by negotiation, increases in the consumer price index or similar inflation indices. In addition, many of the Company’s leases are for terms of less than 10 years, permitting the Company to seek increased rents at market rates upon renewal. Most of the Company’s leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes, insurance and utilities, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation.

ECONOMIC CONDITIONS

~~The retail shopping sector continues to be affected by the competitive nature of the retail business including the impact of internet shopping~~Despite recent bankruptcies and the ~~competition for market share, as well as general economic conditions, where stronger retailers have out-positioned some~~increase of the weaker retailers. These shifts can force some market share away from weaker retailers, which could require them to downsize and close stores and/or declare bankruptcy. In many cases, the loss of a weaker tenant or downsizing of space creates a value-add opportunity to re-lease space at higher rents to a stronger retailer. Overall,e-commerce distribution, the Company believes its portfolio remained stable at September 30, 2017, as evidenced by the consistency in the occupancy rate as further described below. However, there can be no assurance that the loss of a tenant or downsizing of space will not adversely affect the Company in the future (see Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016).

~~Despite the recent tenant bankruptcies, the Company continues to believe there is retailer demand for quality locations within well-positioned shopping centers.~~ ~~Further, the Company continues~~ ~~to see strong~~saw continued demand from a broad range of ~~retailers~~tenants for its space in early 2020, particularly in the off-price sector, which the Company believes isreflects an increasingly value-oriented consumer. This demand was evidenced by leasing activity in January and February that was relatively consistent with recent historical levels. The COVID-19 pandemic caused a ~~reflection~~slow-down in lease activity in March which continued through the first half of the ~~general outlook~~second quarter of ~~consumers who are demanding more value for their dollars. Many of these retailers have store opening~~ ~~plans for 2017~~2020, though the Company witnessed a relative increase in new lease discussions and ~~2018.~~ ~~This is evidenced by~~renewal negotiations with tenants late in the ~~continued stable volume of leasing activity, which was 5.5~~second quarter and into the third quarter. Ultimately, the Company executed new leases and renewals aggregating approximately 1.9 million square feet of space for ~~new leases and renewals for~~ the ~~first~~ nine months ~~of 2017, as well as approximately nine million square feet of space for new leases and renewals for the year~~ ended ~~December 31, 2016.~~ September 30, 2020, on a pro rata basis, which is below historical levels.

The Company ~~also~~ benefits from a diversified tenant base, with only two tenants whose annualized rental revenue equals or exceeds 3% of the Company’s annualized consolidated revenues plus the Company’s proportionate share of unconsolidated joint venture revenues (TJX Companies at ~~4.0%~~6.2% and Bed Bath & Beyond at ~~3.5%~~3.3%). Other significant tenants include ~~Walmart, Target, PetSmart,~~ Dick’s Sporting Goods, Ulta, Best Buy, Nordstrom Rack, Five Below, Ross Stores, ~~AMC Theatres, Lowe’s, Ulta~~Kroger, Whole Foods and ~~Publix,~~Home Depot, all of which have relatively strong ~~credit ratings, remain well-capitalized and~~financial positions, have outperformed other retail categories ~~on a relative basis~~ over ~~time. In addition, several of~~time and the Company’s big box tenants (Walmart, Dick’s Sporting Goods, TJX Companies and Target) have been adapting to an omni-channel retail environment, creating positive overall sales growth over the prior few years. The Company believes remain well-capitalized. Historically these tenants ~~will continue providing it with~~have provided a stable revenue base, ~~for~~and the ~~foreseeable future,~~Company believes that they will continue to provide a stable revenue base going forward, given the long-term nature of these leases. ~~Moreover, the~~The majority of the tenants in the Company’s shopping centers provide day-to-day consumer necessities with a focus ~~toward~~on value and convenience, versus ~~high-priced~~ discretionary ~~luxury~~ items, which the Company believes will enable many of its tenants to outperform ~~even in~~under a variety of economic conditions. The Company recognizes the risks posed by current economic conditions but believes that the position of its transformed portfolio and the general diversity and credit quality of its tenant base should enable it to successfully navigate through a potentially challenging economic environment. The Company has relatively little reliance on overage or percentage rents generated by tenant sales performance.

The Company believes that ~~the quality of~~ its shopping center portfolio is ~~strong,~~well positioned, as evidenced by ~~the high~~its historical ~~occupancy rates~~property income growth and consistent growth in ~~the~~ average annualized base rent per occupied square foot. ~~Historical occupancy has generally ranged from 92% to 96% since~~At September 30, 2020 and December 31, 2019, the ~~Company’s initial public offering in 1993. The~~ shopping center portfolio occupancy was ~~91.5% at September 30, 2017, 93.3% at December 31, 2016~~89.7% and ~~93.0% at September 30, 2016. The net decrease in occupancy in the first nine months of 2017 primarily was attributed to expiring anchor leases that were not renewed~~90.8%, respectively, and ~~tenant bankruptcies, as well as the impact of asset sales with rates that were slightly above the portfolio average occupancy. The~~ total portfolio average annualized base rent per occupied square foot was ~~$15.53 at September 30, 2017, as compared to $15.00 at December 31, 2016,~~$18.53 and ~~$14.72 at September 30, 2016.~~$18.25, respectively, on a pro rata basis. The ~~increase primarily was due to~~Company’s portfolio has been impacted by tenant bankruptcies and lease expirations (which have increased in number and pace following the ~~sale of lower quality assets and the acquisition of shopping centers with higher growth potential, as well as continued lease up and renewal~~onset of the ~~existing portfolio at positive rental spreads. Moreover,~~COVID-19 pandemic) and the Company has had to invest capital to re-lease anchor units; however, the per square foot cost to do so has been ~~able to achieve these results without significant capital investment in tenant improvements or leasing commissions.~~predominantly consistent with the Company’s historical trends. The weighted-average cost of tenant improvements and lease commissions estimated to be incurred over the expected lease term for new and renewal leases executed during the ~~first~~ nine months ~~of 2017~~ended September 30, 2020 and 2019, on a pro rata basis, was ~~only $4.88~~$2.01 and $2.43 per rentable square ~~foot.~~foot, respectively. The Company generally does not expend a significant amount of capital on lease renewals. ~~The quality~~

Beginning in March 2020, the retail sector has been significantly impacted by the COVID-19 pandemic. Though the impact of the ~~property revenue stream is high and consistent, as it is generally derived from retailers with good credit profiles under long-term leases, with very little reliance~~COVID-19 pandemic on ~~overage rents generated~~tenant operations has varied by tenant ~~sales performance. The Company understands the risks posed by the economy, but believes that the position of its portfolio~~category, local conditions and ~~the general diversity and credit quality of its tenant base should enable it to successfully navigate through potentially challenging economic times.~~

As disclosed above in “Contractual Obligations and Commitments,” at September 30, 2017, the Company owned 12 assets on the island of Puerto Rico aggregating 4.4 million square feet of Company-owned GLA. The Company sold two assets in Puerto Rico in June 2017 forapplicable government mandates, a ~~gross sales price aggregating $57.3 million. The 12 owned assets represent 11.4%~~significant number of the Company’s ~~total consolidated revenue~~tenants have experienced a reduction in sales and ~~11.3%~~foot traffic, and many tenants were forced to limit their operations or close their businesses for a period of time. As of October 23, 2020, approximately 98% of the Company’s ~~consolidated revenue less operating expenses (i.e., net operating income)~~tenants (at the Company’s share and based on average base rents) were open for business, up from a low of 45% in early April 2020 and 92% as of July 24, 2020. The COVID-19 pandemic had a relatively minimal impact on the Company’s collection of rents for the ~~nine months ended September 30, 2017. These~~first quarter of 2020, but it had a significant impact on collection of second and third quarter rents. As of October 23, 2020, the Company’s tenants had paid approximately 70% of aggregate base rents for the second quarter (at the Company’s share and BRE DDR IV assets ~~account~~at 100% ownership) and approximately 84% of aggregate base rents for ~~6.2%~~the third quarter (at the Company’s share and BRE DDR IV assets at 100% ownership). In addition, as of ~~Company-owned GLA, including~~October 23, 2020, the ~~unconsolidated joint ventures~~Company’s tenants had paid approximately 90% of aggregate base rents for the month of October (at the Company’s share and BRE DDR IV assets at ~~September 30, 2017. There is continued concern about~~100% ownership). The Company calculates the ~~status~~aggregate percentage of rents paid by comparing the amount of tenant payments received as of the ~~Puerto Rican economy,~~date presented to the ~~ability of~~amount billed to tenants during the ~~government of Puerto Rico~~period, which billed amount includes abated rents, rents subject to ~~meet its financial obligations~~deferral arrangements and the impact of any government default on the economy of Puerto Rico. The impact of Hurricane Maria has further exacerbated these concerns. The Company’s assets experienced varying degrees of damage duerents owing from bankrupt tenants with respect to ~~Hurricane Maria.~~leases which have not yet been rejected. The Company has ~~been actively working~~engaged in discussions with the majority of its ~~insurer relating~~tenants that failed to both the property damage and business interruption claims. See Note 9, “Commitments and Contingencies,” to the Company’s consolidated financial statements included herein. The Company believes that the tenants in these assets (many of which are Continental U.S. retailers such as Walmart and TJX Companies) typically cater to the local consumer’s desire for value and convenience and often provide consumers with day-

to-day necessities and should withstand redevelopment pressures and reopen their locations in Puerto Rico. The Company further believes that these tenants represent a source of stable, high-quality cash flow for the Company’s assets. Nonetheless, the Company’s Board of Directors and management continue to evaluate its investment in the 12 assets and may determine to dispose ofsatisfy all or a portion of ~~these assets. There can be no assurance that~~their rent obligations during the ~~hurricane relief efforts will be completed~~second and third quarters of 2020 and has agreed to terms on rent-deferral arrangements (and, in a ~~timely manner, or at all, or~~smaller number of cases, rent abatements) with a number of such tenants. As of October 23, 2020, agreed upon rent-deferral arrangements that ~~the economic conditions in Puerto Rico will not deteriorate further, which could materially and negatively impact consumer spending and ultimately adversely affect~~remain unpaid represented approximately 16% of second quarter aggregate base rent (at the Company’s share and BRE DDR IV assets at 100% ownership) and approximately 8% of third quarter aggregate base rent (at the Company’s share and BRE DDR IV assets at 100% ownership). The majority of such deferred rents are expected to be repaid by year-end 2021. For purposes of reporting the percentage of aggregate base rents collected for a given period, when rents subject to deferral arrangements are later paid, those payments are allocated to the period in ~~Puerto Rico~~which the rent was originally owed. The Company continues to evaluate its options with respect to tenants with which the Company has not reached satisfactory resolution of unpaid rents and has commenced collections actions against several tenants.

While the Company is unable to forecast the resolution of unpaid second and third quarter rents, outstanding tenant relief requests, the level of rent collections for subsequent periods or ~~its ability to dispose~~the duration of the ~~properties~~disruption to tenant and Company operations caused by the COVID-19 pandemic, the Company expects that its results of operations will continue to be adversely impacted by the pandemic and its impact on ~~commercially reasonable terms, or at~~the economy. Additionally, new surges in contagion may lead to new restrictions on tenant operations, nonpayment of contractual and previously deferred rents, additional tenant requests for rent relief and additional tenant closures and bankruptcies, all ~~(see~~of which may further adversely impact the Company’s results of operations in the future. Certain tenant categories may be especially vulnerable, including movie theaters, restaurants, fitness and entertainment. For additional risks relating to the COVID-19 pandemic, see Item 1A. Risk Factors in ~~the Company’s Annual~~Part II of this Quarterly Report on Form ~~10-K for the year ended December 31, 2016).~~10-Q.

NEW ACCOUNTING STANDARDS

New Accounting Standards are more fully described in Note 1, “Nature of Business and Financial Statement Presentation,” ofto the Company’s consolidated financial statements included herein.

FORWARD-LOOKING STATEMENTS

~~Management’s discussion and analysis~~MD&A should be read in conjunction with the Company’s consolidated financial statements and the notes thereto appearing elsewhere in this report. Historical results and percentage relationships set forth in the Company’s consolidated financial statements, including trends that might appear, should not be taken as indicative of future operations. The Company considers portions of this information to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectations for future periods. Forward-looking statements include, without limitation, statements related to acquisitions (including any related pro forma financial information) and other business development activities, future capital expenditures, financing sources and availability and the effects of environmental and other regulations. Although the Company believes that the expectations reflected in these forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not statements of historical fact should be deemed to be forward-looking statements. Without

limiting the foregoing, the words “will,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates” and similar expressions are intended to identify forward-looking statements. Readers should exercise caution in interpreting and relying on forward-looking statements because such statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and that could cause actual results to differ materially from those expressed or implied in the forward-looking statements and that could materially affect the Company’s actual results, performance or achievements. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements ~~please refer to~~see Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019 and of this Quarterly Report on Form 10-Q. The impact of the COVID-19 pandemic may also exacerbate the risks discussed therein and herein, any of which could have a material effect on the Company.

Factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following:

The Company is subject to general risks affecting the real estate industry, including the need to enter into new leases or renew leases on favorable terms to generate rental revenues, and any economic downturn may adversely affect the ability of the Company’s tenants, or new tenants, to enter into new leases or the ability of the Company’s existing tenants to renew their leases at rates at least as favorable as their current rates;

~~The Company could be adversely affected by changes in the local markets where its properties are located, as well as by adverse changes in national economic and market conditions;~~

The Company may fail to anticipate the effects on its properties of changes in consumer buying practices, including sales over the Internet and the resulting retailing practices and space needs of its tenants, or a general downturn in its tenants’ businesses, which may cause tenants to close stores or default in payment of rent;

The Company is subject to competition for tenants from other owners of retail properties, and its tenants are subject to competition from other retailers and methods of distribution. The Company is dependent upon the successful operations and financial condition of its tenants, in particular its major tenants, and could be adversely affected by the bankruptcy of those tenants;

~~The Company relies on major tenants, which makes it vulnerable to changes in the business and financial condition of, or demand for its space by, such tenants;~~

•

The Company could be adversely affected by changes in the local markets where its properties are located, as well as by adverse changes in national economic and market conditions;

•

The Company may fail to anticipate the effects on its properties of changes in consumer buying practices, including sales over the internet and the resulting retailing practices and space needs of its tenants, or a general downturn in its tenants’ businesses, which may cause tenants to close stores or default in payment of rent;

•

The Company relies on major tenants, which makes it vulnerable to changes in the business and financial condition of, or demand for its space by, such tenants;

•

The Company may not realize the intended benefits of acquisition or merger transactions. The acquired assets may not perform as well as the Company anticipated, or the Company may not successfully integrate the assets and realize

improvements in occupancy and operating results. The acquisition of certain assets may subject the Company to liabilities, including environmental liabilities;

The Company may fail to identify, acquire, construct or develop additional properties that produce a desired yield on invested capital, or may fail to effectively integrate acquisitions of properties or portfolios of properties. In addition, the Company may be limited in its acquisition opportunities due to competition, the inability to obtain financing on reasonable terms or any financing at all and other factors;

The Company may fail to dispose of properties on favorable terms, especially in regions experiencing deteriorating economic conditions. In addition, real estate investments can be illiquid, particularly as prospective buyers may experience increased costs of financing or difficulties obtaining financing due to local or global conditions, and could limit the Company’s ability to promptly make changes to its portfolio to respond to economic and other conditions;

The Company may abandon a development opportunity after expending resources if it determines that the development opportunity is not feasible due to a variety of factors, including a lack of availability of construction financing on reasonable terms, the impact of the economic environment on prospective tenants’ ability to enter into new leases or pay contractual rent, or the inability of the Company to obtain all necessary zoning and other required governmental permits and authorizations;

The Company may not complete development projects on schedule as a result of various factors, many of which are beyond the Company’s control, such as weather, labor conditions, governmental approvals, material shortages or general economic downturn, resulting in limited availability of capital, increased debt service expense and construction costs and decreases in revenue;

The Company’s financial condition may be affected by required debt service payments, the risk of default and restrictions on its ability to incur additional debt or to enter into certain transactions under its credit facilities and other documents governing its debt obligations. In addition, the Company may encounter difficulties in obtaining permanent financing or refinancing existing debt. Borrowings under the Company’s Revolving Credit Facilities are subject to certain representations and warranties and customary events of default, including any event that has had or could reasonably be expected to have a material adverse effect on the Company’s business or financial condition;

~~Changes in interest rates could adversely affect the market price of the Company’s common shares, as well as its performance and cash flow;~~

~~Debt and/or equity financing necessary for the Company to continue to grow and operate its business may not be available or may not be available on favorable terms;~~

Disruptions in the financial markets could affect the Company’s ability to obtain financing on reasonable terms and have other adverse effects on the Company and the market price of the Company’s common shares;

~~The Company is subject to complex regulations related to its status as a REIT and would be adversely affected if it failed to qualify as a REIT;~~

The Company must make distributions to shareholders to continue to qualify as a REIT, and if the Company must borrow funds to make distributions, those borrowings may not be available on favorable terms or at all;

Joint venture investments may involve risks not otherwise present for investments made solely by the Company, including the possibility that a partner or co-venturer may become bankrupt, may at any time have interests or goals different from those of the Company and may take action contrary to the Company’s instructions, requests, policies or objectives, including the Company’s policy with respect to maintaining its qualification as a REIT. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture. The partner could cause a default under the joint venture loan for reasons outside the Company’s control. Furthermore, the Company could be required to reduce the carrying value of its equity investments if a loss in the carrying value of the investment is realized;

The Company’s decision to dispose of real estate assets, including undeveloped land and construction in progress, would change the holding period assumption in the undiscounted cash flow impairment analyses, which could result in material impairment losses and adversely affect the Company’s financial results;

~~The outcome of pending or future litigation, including litigation with tenants or joint venture partners, may adversely affect the Company’s results of operations and financial condition;~~

•

The Company may abandon a development or redevelopment opportunity after expending resources if it determines that the opportunity is not feasible due to a variety of factors, including a lack of availability of construction financing on reasonable terms, the impact of the economic environment on prospective tenants’ ability to enter into new leases or pay contractual rent, or the inability of the Company to obtain all necessary zoning and other required governmental permits and authorizations;

•

The Company may not ~~realize anticipated returns~~complete development or redevelopment projects on schedule as a result of various factors, many of which are beyond the Company’s control, such as weather, labor conditions, governmental approvals, material shortages or general economic downturn, resulting in limited availability of capital, increased debt service expense and construction costs and decreases in revenue;

•

The Company’s financial condition may be affected by required debt service payments, the risk of default, restrictions on its ability to incur additional debt or to enter into certain transactions under its credit facilities and other documents

governing its debt obligations and the risk of downgrades from debt rating services. In addition, the Company may encounter difficulties in obtaining permanent financing or refinancing existing debt. Borrowings under the Company’s Revolving Credit Facilities are subject to certain representations and warranties and customary events of default, including any event that has had or could reasonably be expected to have a material adverse effect on the Company’s business or financial condition;

•

Changes in interest rates could adversely affect the market price of the Company’s common shares, as well as its performance and cash flow;

•

Debt and/or equity financing necessary for the Company to continue to grow and operate its business may not be available or may not be available on favorable terms;

•

The Company is subject to complex regulations related to its status as a REIT and would be adversely affected if it failed to qualify as a REIT;

•

Joint venture investments may involve risks not otherwise present for investments made solely by the Company, including the possibility that a partner or co-venturer may become bankrupt, may at any time have interests or goals different from those of the Company and may take action contrary to the Company’s instructions, requests, policies or objectives, including the Company’s policy with respect to maintaining its qualification as a REIT. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture or may seek to terminate the joint venture, resulting in a loss to the Company of property revenues and management fees. The partner could cause a default under the joint venture loan for reasons outside the Company’s control. Furthermore, the Company could be required to reduce the carrying value of its equity investments, including preferred investments, if a loss in the carrying value of the investment is realized;

•

The Company’s decision to dispose of real estate assets, ~~outside~~including undeveloped land and construction in progress, would change the Continental United States (the Company owns 12 assets in Puerto Rico), which may carry risks in addition to those the Company faces with its Continental U.S. properties and operations. To the extent the Company pursues opportunities that may subject the Company to different or greater risks than those associated with its operationsholding period assumption in the ~~Continental U.S., including cultural and consumer differences and differences~~undiscounted cash flow impairment analyses, which could result in ~~applicable laws and political and economic environments, these risks could significantly increase~~material impairment losses and adversely affect ~~its~~the Company’s financial results;

•

The outcome of pending or future litigation, including litigation with tenants or joint venture partners, may adversely affect the Company’s results of operations and financial condition;

~~Sufficiency and timing of any insurance recovery payments related to damages from extreme weather conditions;~~

~~The Company is subject to potential environmental liabilities;~~

~~The Company may incur losses that are uninsured or exceed policy coverage due to its liability for certain injuries to persons, property or the environment occurring on its properties;~~

The Company could incur additional expenses to comply with or respond to claims under the Americans with Disabilities Act or otherwise be adversely affected by changes in government regulations, including changes in environmental, zoning, tax and other regulations and

The Company’s Board of Directors, which regularly reviews the Company’s business strategy and objectives, may change the Company’s strategic plan based on a variety of factors and conditions, including the recent management transition and in response to changing market conditions.

•

Property damage, expenses related thereto, and other business and economic consequences (including the potential loss of revenue) resulting from extreme weather conditions or natural disasters in locations where the Company owns properties may adversely affect the Company’s results of operations and financial condition;

•

Sufficiency and timing of any insurance recovery payments related to damages and lost revenues from extreme weather conditions or natural disasters may adversely affect the Company’s results of operations and financial condition;

•

The Company and its tenants could be negatively affected by the impacts of pandemics and other public health crises, including the COVID-19 pandemic;

•

The Company is subject to potential environmental liabilities;

•

The Company may incur losses that are uninsured or exceed policy coverage due to its liability for certain injuries to persons, property or the environment occurring on its properties;

•

Changes in accounting standards or other standards may adversely affect the Company’s business;

•

The Company and its vendors could sustain a disruption, failure or breach of their respective networks and systems, including as a result of cyber-attacks, which could disrupt the Company’s business operations, compromise the confidentiality of sensitive information and result in fines or penalties.

I~~TEM~~Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s primary market risk exposure is interest rate risk. The Company’s debt, excluding unconsolidated joint venture debt, ~~(adjusted to reflect the $76.9 million of variable-rate debt that LIBOR was swapped to at a fixed rate of 2.8% at December 31, 2016),~~ is summarized as follows:

	September 30, 2017										December 31, 2016										September 30, 2020										December 31, 2019
	Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total			Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total			Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total			Amount (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Percentage of Total
Fixed-Rate Debt	$	3,481.9		5.8		4.3	%		86.7	%	$	3,869.5		4.5		4.9	%		86.1	%	$	1,502.4		5.1		4.1	%		84.6	%	$	1,742.8		5.3		4.3	%		94.3	%
Variable-Rate Debt	$	535.6		2.6		2.4	%		13.3	%	$	624.5		0.3		1.9	%		13.9	%	$	274.6		3.0		1.1	%		15.4	%	$	104.5		3.1		2.8	%		5.7	%

The Company’s unconsolidated joint ventures’ indebtedness at its carrying value adjusted to reflect the $42.0 million of variable-rate debt ($2.1 million at the Company’s proportionate share) that LIBOR was swapped to at a fixed rate of 1.9% at September 30, 2017 and December 31, 2016, is summarized as follows:

	September 30, 2017									December 31, 2016									September 30, 2020									December 31, 2019
	Joint Venture Debt (Millions)		Company's Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Joint Venture Debt (Millions)		Company's Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Joint Venture Debt (Millions)		Company's Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate			Joint Venture Debt (Millions)		Company's Proportionate Share (Millions)		Weighted- Average Maturity (Years)		Weighted- Average Interest Rate
Fixed-Rate Debt	$	1,048.1	$	159.5		5.0		4.2	%	$	1,808.1	$	298.3		1.6		5.4	%	$	843.2	$	182.7		3.1		4.4	%	$	1,032.8	$	211.6		4.2		4.3	%
Variable-Rate Debt	$	1,650.0	$	206.4		1.4		3.0	%	$	1,226.3	$	114.6		1.9		2.6	%	$	590.0	$	70.3		0.7		2.6	%	$	607.3	$	73.9		0.8		3.5	%

The Company intends to use retained cash flow, proceeds from asset sales, equity and debt financing and variable-rate indebtedness available under its Revolving Credit Facilities to repay indebtedness and fund capital expenditures ofat the Company’s shopping centers. Thus, to the extent the Company incurs additional variable-rate indebtedness, its exposure to increases in interest rates in an inflationary period could increase. The Company does not believe, however, that increases in interest expense as a result of inflation will significantly impact the Company’s distributable cash flow. The interest rate risk on variable-rate debt described above has been mitigated through the use of interest rate swap agreements (the “Swaps”) with major financial institutions. The Company is exposed to credit risk in the event of nonperformance by the counterparties to the Swaps. The Company believes it mitigates its credit risk by entering into Swaps with major financial institutions.

The carrying value and the fair value of the Company’s fixed-rate debt isare adjusted to ~~(i) include the Swaps reflected in the carrying value and (ii)~~ include the Company’s proportionate share of the joint venture fixed-rate debt. An estimate of the effect of a 100 basis-point increase at September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, is summarized as follows (in millions):

	September 30, 2020						December 31, 2019
	Carrying Value		Fair Value		100 Basis-Point Increase in Market Interest Rate		Carrying Value		Fair Value		100 Basis-Point Increase in Market Interest Rate
Company's fixed-rate debt	$	1,502.4	$	1,571.6	$	1,488.1	$	1,742.8	$	1,840.9	$	1,756.9
Company's proportionate share of joint venture fixed-rate debt	$	182.7	$	185.3	$	180.6	$	211.6	$	213.3	$	205.9

September 30, 2017

December 31, 2016

Carrying
Value

Fair
Value

100 Basis-Point
Increase in
Market Interest
Rate

Carrying
Value

Fair
Value

100 Basis-Point
Increase in
Market Interest
Rate

Company's fixed-rate debt
$
3,481.9

$
3,589.2

$
3,418.9

$
3,869.5

$
4,044.2

$
3,895.0

Company's proportionate share of
joint venture fixed-rate debt
$
159.5

$
156.9

$
150.1

$
298.3

$
305.1

$
300.8

The sensitivity to changes in interest rates of the Company’s fixed-rate debt was determined using a valuation model based upon factors that measure the net present value of such obligations that arise from the hypothetical estimate as discussed above.

~~Further, a~~A 100 basis-point increase in short-term market interest rates on variable-rate debt at September 30, ~~2017,~~2020, would result in an increase in interest expense of approximately ~~$4.0~~$2.1 million for the Company and ~~$1.6~~$0.5 million representing the Company’s proportionate share of the joint ventures’ interest expense relating to variable-rate debt outstanding for the nine months ended September 30, ~~2017.~~2020. The estimated increase in interest expense for the year does not give effect to possible changes in the daily balance of the Company’s or joint ventures’ outstanding variable-rate debt.

The Company and its joint ventures intend to continually monitor and actively manage interest costs on their variable-rate debt portfolio and may enter into swap positions based on market fluctuations. In addition, the Company believes it has the ability to obtain funds through additional equity and/or debt offerings and joint venture capital. Accordingly, the cost of obtaining such

protection agreements ~~in relation to~~versus the Company’s access to capital markets will continue to be evaluated. The Company has not entered, and does not plan to enter, into any derivative financial instruments for trading or speculative purposes. As of September 30, ~~2017,~~2020, the Company had no other material exposure to market risk.

~~ITEM~~Item 4.

CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), conducted an evaluation, pursuant to Securities Exchange Act of 1934 Rules 13a-15(b) and 15d-15(b), of the effectiveness of our disclosure controls and procedures. Based on their evaluation as required, the CEO and CFO have concluded that the Company’s disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and were effective as of the end of such period to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

During the three months ended September 30, ~~2017,~~2020, there were no changes in the Company’s internal control over financial reporting that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II

~~PART~~ II

OTHER INFORMATION

~~ITEM~~Item 1.

LEGAL PROCEEDINGS

The Company and its subsidiaries are subject to various legal proceedings, which, taken together, are not expected to have a material adverse effect on the Company. The Company is also subject to a variety of legal actions for personal injury or property damage arising in the ordinary course of its business, most of which are covered by insurance. While the resolution of all matters cannot be predicted with certainty, management believes that the final outcome of such legal proceedings and claims will not have a material adverse effect on the Company’s liquidity, financial position or results of operations.

~~ITEM~~Item 1A.

RISK FACTORS

Reference is made to Part 1, Item 1A. “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The risk factor set forth below updates, and should be read together with, such risk factors. Furthermore, the impact of the COVID-19 Pandemic may also exacerbate the risks discussed therein, any of which could have a material effect on the Company.

The COVID-19 Pandemic Has Had, and Will Likely Continue to Have, a Significant Impact on the Company and its Tenants’ Businesses

The Company’s business and the businesses of its tenants have been, and are likely to continue to be, significantly impacted by the COVID-19 pandemic and the public perception of and reaction to the related risks. Beginning in March 2020, the COVID-19 pandemic resulted in the closure of many tenant businesses and substantially reduced foot traffic at open tenant businesses as a result of social distancing restrictions. Beginning in April 2020, a significant number of tenants failed to pay some or all of their monthly rent obligations and the Company and its joint ventures received a substantial number of tenant requests for rent relief and claims for abatement. In many cases, the Company has agreed to defer unpaid tenant rent obligations, although it remains uncertain whether these rents will ultimately be paid in accordance with the terms of the deferral arrangements. Social distancing measures, local regulations and the public’s concern regarding health risks posed by the pandemic continue to adversely impact many tenants’ sales and operations and their ability to finance their businesses and satisfy their obligations, including rent owed to the Company and its joint ventures. Third quarter rent collection levels remain well below historical averages and future collections may be negatively impacted by new surges in COVID-19 contagion and any implementation of additional restrictions on tenant businesses as a result thereof. The resumption of normalized business activity levels remains uncertain and may be adversely impacted by state and local government restrictions, disruptions in inventory supply chains from local and international suppliers, staffing challenges and the public’s perception of continued health risks relating to COVID-19 and related treatments and vaccines. Furthermore, in certain instances, the COVID-19 pandemic and local resurgences in contagion have caused prospective tenants to abandon or delay new store growth plans or choose to lease fewer spaces, which has led to a decline in leasing volumes relative to historical levels and may ultimately result in diminished demand for space and lower rents for the Company’s properties. Such events may also increase the risk of delays in completing tenant build-outs, delivering space to new tenants and achieving rent commencement dates with respect to recently executed leases. Additionally, the impacts of the COVID-19 pandemic have contributed to an increase in retail businesses filing for bankruptcy protection and may accelerate consumers’ adoption of e-commerce within certain retail categories as an alternative to shopping at physical store locations. The Company ~~will continue~~may not be able to ~~experience business disruptions at its properties~~recover any amounts from insurance carriers in ~~Puerto Rico until it makes necessary repairs~~order to mitigate the impact of lost tenant revenues.

In addition to the impacts and ~~reopens such properties.~~

~~Recent severe weather conditions, including Hurricane Maria, caused substantial damage to property and infrastructure in Puerto Rico, including many~~uncertainties listed above, the COVID-19 pandemic has significantly limited the ability of the Company’s ~~shopping centers located there. The~~employees to access the Company’s offices and properties, which could adversely impact the Company’s ability to manage its properties and complete other operating and administrative functions that are important to its business. Efforts by the Company’s employees to work remotely could also expose the Company ~~has made preliminary assessments~~to additional risks, such as increased cybersecurity risk. Furthermore, the impact of the ~~scope~~COVID-19 pandemic could continue to negatively affect global capital markets, which, in turn, could negatively affect the Company’s ability to obtain necessary financing, including refinancing for its joint ventures, on favorable terms, or at all. Reduced rent collections from tenants may also impact the ability of ~~damages to its properties, but the costs ultimately associated with such damages may exceed initial estimates. Furthermore,~~ the Company ~~will continue~~and its joint ventures to ~~experience business disruptions at its properties until it makes necessary repairs~~satisfy covenants and ~~reopens such properties. The timing~~debt service obligations applicable to their financing arrangements, particularly with respect to mortgage loan indebtedness, and result in the recognition of ~~such repairs will be highly dependent upon factors beyond~~impairment charges with respect to certain of the Company’s control, such as access to utilities and the availability of building materials, supplies and labor, all of which have been seriously diminished in the wake of Hurricane Maria. Additionally, any failure of civil authorities to ensure public safety and maintain orderproperties. Reduced rent collections from tenants may also ~~interfere with~~have the effect of decreasing management fees collected from the Company’s ~~efforts to reopen properties. Such delays could increase the duration of business disruptions, as well as the related costs, beyond~~joint ventures which are often based on property receipts and may also impact decisions by the Company’s ~~expectations.~~ Board of Directors with respect to future dividend policy. The Company’s periodic assessment of tenants’ ability to pay outstanding obligations, including rent obligations deferred because of the COVID-19 pandemic, may also result in reductions to rental revenue on account of previously accrued rents.

Any ~~insurance coverage for losses~~of the foregoing risks, or related risks that the Company is unable to predict due to ~~damage or~~changing circumstances relating to the impacts of the COVID-19 pandemic, could have a material adverse effect on the Company’s business, ~~disruption may prove to be inadequate or unavailable.~~

results of operations and financial condition.

~~ITEM~~Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES

(a)

(b)

(c)

(d)

Total
Number of
Shares
Purchased⁽¹⁾

Average
Price Paid
per Share

Total Number
of Shares Purchased
as Part of
Publicly Announced
Plans or Programs

Maximum Number
(or Approximate
Dollar Value) of
Shares that May Yet
Be Purchased Under
the Plans or Programs

July 1–31, 2017

5,849

$
9.01

—

—

August 1–31, 2017

213

9.89

—

—

September 1–30, 2017

59

9.68

—

—

Total

6,121

$
9.05

—

—

	(a)		(b)		(c)		(d)
	Total Number of Shares Purchased⁽¹⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
July 1–31, 2020		158	$	8.10		—	$	—
August 1–31, 2020		20		7.33		—		—
September 1–30, 2020		20		7.51		—		—
Total		198	$	7.96		—	$	42.1

(1)	~~Consists of common~~Common shares surrendered or deemed surrendered to the Company to satisfy statutory minimum tax withholding obligations in connection with the vesting and/or exercise of awards under the Company’s equity-based compensation plans.

On November 29, 2018, the Company announced that its Board of Directors authorized a common share repurchase program. Under the terms of the program authorized by the Board, the Company may purchase up to a maximum value of $100 million of its common shares and the program has no expiration date. As of October 26, 2020, the Company had repurchased 5.1 million of its common shares in the aggregate at a cost of $57.9 million and a weighted-average cost of $11.33 per share under the program.

~~ITEM~~Item 3.

DEFAULTS UPON SENIOR SECURITIES

None.

~~ITEM~~Item 4.

MINE SAFETY DISCLOSURES

Not applicable.

~~ITEM~~Item 5.

OTHER INFORMATION

None.

~~ITEM~~Item 6.

E~~XHIBITS~~EXHIBITS

10.1
~~4.1~~		~~Twenty-first Supplemental Indenture,~~Employment Agreement, dated as of ~~August 16, 2017,~~September 11, 2020, by and between the Company and ~~U.S. Bank National Association (as successor to U.S. Bank Trust National Association (as successor to National City Bank))~~David R. Lukes¹

~~4.2~~10.2		~~Second Amended and Restated Credit~~Form of 2019 Plan Restricted Share Award Unit Memorandum – CEO²

10.3		Separation Agreement, dated as of September ~~13, 2017, among DDR Corp., DDR PR Ventures LLC, S.E.,~~23, 2020, by and between the ~~lenders party thereto~~Company and ~~JPMorgan Chase Bank, N.A., as administrative agent~~Michael A. Makinen²

31.1		Certification of principal executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934²

31.2		Certification of principal financial officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934²

32.1		Certification of chief executive officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002^12,3

32.2		Certification of chief financial officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002^12,3

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document²

101.SCH		Inline XBRL Taxonomy Extension Schema Document²

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document²

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document²

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document²

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document²

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 has been formatted in Inline XBRL and included in Exhibit 101.

1	Incorporated by reference to Exhibit 10.1 from the Company’s Current Report on Form 8-K filed with the SEC on September 15, 2020.

2	Submitted electronically herewith.

3	Pursuant to SEC Release No. 34-4751, these exhibits are deemed to accompany this report and are not “filed” as part of this ~~report.~~

2	~~Submitted electronically herewith.~~report

Attached as Exhibit 101 to this report are the following formatted in ~~XBRL (Extensible~~iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, (ii) Consolidated Statements of Operations for the Three and Nine Months Ended September 30, ~~2017~~2020 and ~~2016,~~2019, (iii) Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the Three and Nine Months Ended September 30, ~~2017~~2020 and ~~2016,~~2019, (iv) Consolidated ~~Statement~~Statements of Equity for the Three and Nine Months Ended September 30, ~~2017,~~2020 and 2019, (v) Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019 and (vi) Notes to Condensed Consolidated Financial Statements.

~~EXHIBIT INDEX~~

Exhibit No.
Under Reg. S-K
Item 601

Form 10-Q
Exhibit No.

Description

Filed or Furnished Herewith or
Incorporated Herein by
Reference

4

4.1

Twenty-first Supplemental Indenture, dated as of August 16, 2017, by and between the Company and U.S. Bank National Association (as successor to U.S. Bank Trust National Association (as successor to National City Bank))

Current Report on Form 8-K (Filed with the SEC on August 16, 2017; File No. 001-11690)

4

4.2

Second Amended and Restated Credit Agreement, dated as of September 13, 2017, among DDR Corp., DDR PR Ventures LLC, S.E., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent

Current Report on Form 8-K (Filed with the SEC on September 14, 2017; File No. 001-11690)

31

31.1

Certification of principal executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

Submitted electronically herewith

31

31.2

Certification of principal financial officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

Submitted electronically herewith

32

32.1

Certification of chief executive officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002

Submitted electronically herewith

32

32.2

Certification of chief financial officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of this report pursuant to the Sarbanes-Oxley Act of 2002

Submitted electronically herewith

101

101.INS

XBRL Instance Document

Submitted electronically herewith

101

101.SCH

XBRL Taxonomy Extension Schema Document

Submitted electronically herewith

101

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

Submitted electronically herewith

101

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

Submitted electronically herewith

101

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

Submitted electronically herewith

101

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

Submitted electronically herewith

~~SIGNATURES~~SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

4745

Ohio		34-1723097
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, Par Value $0.10 Per Share	SITC	New York Stock Exchange

Depositary Shares, each representing 1/20 of a share of 6.375% Class A Cumulative Redeemable Preferred Shares without Par Value	SITC PRA	New York Stock Exchange

Depositary Shares, each representing 1/20 of a share of 6.25% Class K Cumulative Redeemable Preferred Shares without Par Value	SITC PRK	New York Stock Exchange

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements -– Unaudited
	Consolidated Balance Sheets as of September 30, ~~2017~~2020 and December 31, ~~2016~~2019	2
	Consolidated Statements of Operations for the Three Months Ended September 30, ~~2017~~2020 and ~~2016~~2019	3
	Consolidated Statements of Operations for the Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019	4
	Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the Three and Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019	5
	Consolidated ~~Statement~~Statements of Equity for the Three and Nine Months Ended September 30, ~~2017~~2020 and 2019	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2320
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4240
Item 4.	Controls and Procedures	4341

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	4442
Item 1A.	Risk Factors	4442
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4443
Item 3.	Defaults Upon Senior Securities	4443
Item 4.	Mine Safety Disclosures	4443
Item 5.	Other Information	4443
Item 6.	Exhibits	4544

SIGNATURES		4745

	September 30, 2017			December 31, 2016			September 30, 2020			December 31, 2019
Assets
Land	$	1,903,805		$	1,990,406		$	881,543		$	881,397
Buildings		6,002,788			6,412,532			3,312,645			3,277,440
Fixtures and tenant improvements		673,738			735,685			501,431			491,312
		8,580,331			9,138,623			4,695,619			4,650,149
Less: Accumulated depreciation		(1,942,051	)		(1,996,176	)		(1,393,578	)		(1,289,148	)
		6,638,280			7,142,447			3,302,041			3,361,001
Construction in progress and land		116,746			105,435			52,042			59,663
Total real estate assets, net		6,755,026			7,247,882			3,354,083			3,420,664
Investments in and advances to joint ventures, net		434,952			454,131			175,247			294,495
Investment in and advances to affiliate								190,770			190,105
Cash and cash equivalents		18,268			30,430			57,224			16,080
Restricted cash		1,826			8,795			289			3,053
Accounts receivable, net		176,561			121,367
Notes receivable, net		19,591			49,503
Accounts receivable								79,208			60,594
Other assets, net		234,473			285,410			88,041			108,631
	$	7,640,697		$	8,197,518		$	3,944,862		$	4,093,622
Liabilities and Equity
Unsecured indebtedness:
Senior notes	$	2,809,404		$	2,913,217
Unsecured term loan		397,858			398,399
Senior notes, net							$	1,449,075		$	1,647,963
Term loan, net								99,591			99,460
Revolving credit facilities		60,000			—			175,000			5,000
		3,267,262			3,311,616			1,723,666			1,752,423
Secured indebtedness:
Secured term loan		—			199,843
Mortgage indebtedness		750,269			982,509
		750,269			1,182,352
Mortgage indebtedness, net								53,316			94,874
Total indebtedness		4,017,531			4,493,968			1,776,982			1,847,297
Accounts payable and other liabilities		355,731			382,293			203,035			220,811
Dividends payable		78,419			75,245			5,133			44,036
Total liabilities		4,451,681			4,951,506			1,985,150			2,112,144
Commitments and contingencies
DDR Equity
Class A—6.375% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 350,000 shares issued and outstanding at September 30, 2017		175,000			—
Class J—6.5% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 400,000 shares issued and outstanding at September 30, 2017 and December 31, 2016		200,000			200,000
Class K—6.25% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 300,000 shares issued and outstanding at September 30, 2017 and December 31, 2016		150,000			150,000
Common shares, with par value, $0.10 stated value; 600,000,000 shares authorized; 367,823,362 and 366,298,335 shares issued at September 30, 2017 and December 31, 2016, respectively		36,782			36,630
SITE Centers Equity
Class A—6.375% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 350,000 shares issued and outstanding at September 30, 2020 and December 31, 2019								175,000			175,000
Class K—6.25% cumulative redeemable preferred shares, without par value, $500 liquidation value; 750,000 shares authorized; 300,000 shares issued and outstanding at September 30, 2020 and December 31, 2019								150,000			150,000
Common shares, with par value, $0.10 stated value; 300,000,000 shares authorized; 193,995,499 and 193,823,409 shares issued at September 30, 2020 and December 31, 2019, respectively								19,400			19,382
Additional paid-in capital		5,505,855			5,487,212			5,706,225			5,700,400
Accumulated distributions in excess of net income		(2,886,547	)		(2,632,327	)		(4,083,405	)		(4,066,099	)
Deferred compensation obligation		10,381			15,149			5,442			7,929
Accumulated other comprehensive loss		(1,471	)		(4,192	)		(3,728	)		(491	)
Less: Common shares in treasury at cost: 676,419 and 947,893 shares at September 30, 2017 and December 31, 2016, respectively		(9,907	)		(14,957	)
Total DDR shareholders' equity		3,180,093			3,237,515
Less: Common shares in treasury at cost: 1,041,169 and 325,318 shares at September 30, 2020 and December 31, 2019, respectively								(12,463	)		(7,707	)
Total SITE Centers shareholders' equity								1,956,471			1,978,414
Non-controlling interests		8,923			8,497			3,241			3,064
Total equity		3,189,016			3,246,012			1,959,712			1,981,478
	$	7,640,697		$	8,197,518		$	3,944,862		$	4,093,622

	DDR Equity

	Preferred Shares		Common Shares		Additional Paid-in Capital			Accumulated Distributions in Excess of Net Income		��	Deferred Compensation Obligation			Accumulated Other Comprehensive Loss			Treasury Stock at Cost			Non- Controlling Interests			Total
Balance, December 31, 2016	$	350,000	$	36,630	$	5,487,212		$	(2,632,327	)	$	15,149		$	(4,192	)	$	(14,957	)	$	8,497		$	3,246,012
Issuance of common shares related to stock plans		—		152		17,529			—			—			—			—			—			17,681
Issuance of preferred shares		175,000		—		(6,118	)		—			—			—			—			—			168,882
Stock-based compensation, net		—		—		7,232			—			(4,768	)		—			5,050			—			7,514
Distributions to non-controlling interests		—		—		—			—			—			—			—			(627	)		(627	)
Dividends declared-common shares		—		—		—			(209,763	)		—			—			—			—			(209,763	)
Dividends declared-preferred shares		—		—		—			(20,810	)		—			—			—			—			(20,810	)
Comprehensive (loss) income		—		—		—			(23,647	)		—			2,721			—			1,053			(19,873	)
Balance, September 30, 2017	$	525,000	$	36,782	$	5,505,855		$	(2,886,547	)	$	10,381		$	(1,471	)	$	(9,907	)	$	8,923		$	3,189,016

	SITE Centers Equity

	Preferred Shares		Common Shares		Additional Paid-in Capital			Accumulated Distributions in Excess of Net Income			Deferred Compensation Obligation			Accumulated Other Comprehensive Loss			Treasury Stock at Cost			Non- Controlling Interests			Total
Balance, December 31, 2019	$	325,000	$	19,382	$	5,700,400		$	(4,066,099	)	$	7,929		$	(491	)	$	(7,707	)	$	3,064		$	1,981,478
Issuance of common shares related to stock plans		0		18		(78	)		0			0			0			0			0			(60	)
Repurchase of common shares		0		0		0			0			0			0			(7,500	)		0			(7,500	)
Stock-based compensation, net		0		0		4,397			0			(2,495	)		0			2,538			0			4,440
Distributions to non-controlling interests		0		0		0			0			0			0			0			(278	)		(278	)
Dividends declared-common shares		0		0		0			(38,914	)		0			0			0			0			(38,914	)
Dividends declared-preferred shares		0		0		0			(10,266	)		0			0			0			0			(10,266	)
Comprehensive income		0		0		0			29,720			0			679			0			505			30,904
Balance, June 30, 2020		325,000		19,400		5,704,719			(4,085,559	)		5,434			188			(12,669	)		3,291			1,959,804
Stock-based compensation, net		0		0		1,506			0			8			0			206			0			1,720
Distributions to non-controlling interests		0		0		0			0			0			0			0			(166	)		(166	)
Dividends declared-preferred shares		0		0		0			(5,133	)		0			0			0			0			(5,133	)
Comprehensive income (loss)		0		0		0			7,287			0			(3,916	)		0			116			3,487
Balance, September 30, 2020	$	325,000	$	19,400	$	5,706,225		$	(4,083,405	)	$	5,442		$	(3,728	)	$	(12,463	)	$	3,241		$	1,959,712

	September 30, 2020			December 31, 2019
Condensed Combined Balance Sheets
Land	$	555,215		$	895,427
Buildings		1,684,807			2,583,053
Fixtures and tenant improvements		160,175			233,303
		2,400,197			3,711,783
Less: Accumulated depreciation		(580,360	)		(949,879	)
		1,819,837			2,761,904
Construction in progress and land		56,392			58,855
Real estate, net		1,876,229			2,820,759
Cash and restricted cash		71,807			109,260
Receivables, net		32,720			37,191
Other assets, net		92,085			147,129
	$	2,072,841		$	3,114,339

Mortgage debt	$	1,433,168		$	1,640,146
Notes and accrued interest payable to the Company		4,863			4,975
Other liabilities		100,254			142,754
		1,538,285			1,787,875
Redeemable preferred equity – SITECenters^(A)		224,029			217,871
Accumulated equity		310,527			1,108,593
	$	2,072,841		$	3,114,339

Company's share of accumulated equity	$	71,304		$	186,247
Redeemable preferred equity, net ^(B)		96,128			112,589
Basis differentials		4,349			(6,864	)
Deferred development fees, net of portion related to the Company's interest		(1,397	)		(2,452	)
Amounts payable to the Company		4,863			4,975
Investments in and Advances to Joint Ventures, net	$	175,247		$	294,495

		Common Equity		Preferred Investment (Principal)						Properties Owned
	Formation	Initial		Initial		September 30, 2017		Net of Reserve		Inception		September 30, 2017
BRE DDR III	Oct 2014	$	19.6	$	300.0	$	314.5	$	262.7		70		42
BRE DDR IV	Dec 2015		12.9		82.6		67.1		58.3		6		6
				$	382.6	$	381.6	$	321.0

		Preferred Investment (Principal)
	Redemption Date	Initial		September 30, 2020		Valuation Allowance			Net of Reserve		Properties Owned at September 30, 2020
BRE DDR III	October 2021	$	300.0	$	132.4	$	(95.8	)	$	36.6		13
BRE DDR IV	December 2022		82.6		64.1		(11.6	)		52.5		5
		$	382.6	$	196.5	$	(107.4	)	$	89.1

	September 30, 2020		December 31, 2019
Intangible assets:
In-place leases, net	$	19,784	$	25,114
Above-market leases, net		2,495		3,193
Lease origination costs		2,857		3,720
Tenant relationships, net		21,606		25,994
Total intangible assets, net^(A)		46,742		58,021
Operating lease ROU assets		21,024		21,792
Notes receivable^(B)		0		7,541
Other assets:
Prepaid expenses		7,414		6,104
Other assets		2,372		2,959
Deposits		3,855		4,087
Deferred charges, net		6,634		8,127
Total other assets, net	$	88,041	$	108,631

Below-market leases, net (other liabilities)	$	43,205	$	46,961

	September 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	1,449,075	$	1,517,924	$	1,647,963	$	1,744,581
Revolving Credit Facilities and term loan		274,591		275,000		104,460		105,084
Mortgage Indebtedness		53,316		53,689		94,874		96,276
	$	1,776,982	$	1,846,613	$	1,847,297	$	1,945,941

	Gains and Losses on Cash Flow Hedges			Foreign Currency Items			Total
Balance, December 31, 2019	$	(1,172	)	$	681		$	(491	)
Other comprehensive loss before reclassifications		0			(4,409	)		(4,409	)
Change in cash flow hedges reclassed to earnings^(A)		1,172			0			1,172
Net current-period other comprehensive income (loss)		1,172			(4,409	)		(3,237	)
Balance, September 30, 2020	$	0		$	(3,728	)	$	(3,728	)

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total		Total Impairment Charges
September 30, 2020
Preferred equity interests	$	0	$	0	$	94.2	$	94.2	$	19.4

	Three Months Ended September 30, 2020
	Shopping Centers			Loan Investments		Other			Total
Rental income	$	95,874		$	0				$	95,874
Other income		9,680			0					9,680
Total revenues		105,554			0					105,554
Rental operation expenses		(32,317	)		0					(32,317	)
Net operating income		73,237			0					73,237
Depreciation and amortization		(41,148	)							(41,148	)
Interest income					3,445					3,445
Other expense, net						$	(186	)		(186	)
Unallocated expenses^(A)							(31,753	)		(31,753	)
Equity in net income of joint ventures		250								250
Adjustment of preferred equity interests, net					3,542					3,542
Gain on sale of joint venture interest		82								82
Gain on disposition of real estate, net		218								218
Income before tax expense									$	7,687

	Three Months Ended September 30, 2019
	Shopping Centers			Loan Investments			Other			Total
Rental income	$	108,060		$	0		$	0		$	108,060
Other income		13,567			13			0			13,580
Business interruption income		0			0			885			885
Total revenues		121,627			13			885			122,525
Rental operation expenses		(33,456	)		(3	)		0			(33,459	)
Net operating income		88,171			10			885			89,066
Impairment charges		(2,750	)								(2,750	)
Depreciation and amortization		(40,732	)								(40,732	)
Interest income					4,616						4,616
Other expense, net								(322	)		(322	)
Unallocated expenses^(A)								(36,464	)		(36,464	)
Equity in net income of joint ventures		2,612									2,612
Reserve of preferred equity interests, net					(6,373	)					(6,373	)
Gain on disposition of real estate, net		14,497									14,497
Income before tax expense										$	24,150

	Nine Months Ended September 30, 2020
	Shopping Centers			Loan Investments			Other			Total
Rental income	$	306,482		$	0					$	306,482
Other income		35,940			13						35,953
Total revenues		342,422			13						342,435
Rental operation expenses		(102,321	)		0						(102,321	)
Net operating income		240,101			13						240,114
Depreciation and amortization		(125,014	)								(125,014	)
Interest income					10,480						10,480
Other expense, net							$	(18,207	)		(18,207	)
Unallocated expenses^(A)								(97,029	)		(97,029	)
Equity in net income of joint ventures		908									908
Reserve of preferred equity interests, net					(19,393	)					(19,393	)
Gain on sale of joint venture interest		45,635									45,635
Gain on disposition of real estate, net		993									993
Income before tax expense										$	38,487

As of September 30, 2020:
Total gross real estate assets	$	4,747,661								$	4,747,661
Notes receivable, net^(B)				$	94,228		$	(94,228	)	$	0

	Nine Months Ended September 30, 2019
	Shopping Centers			Loan Investments			Other			Total
Rental income	$	332,555		$	0		$	0		$	332,555
Other income		48,722			42			0			48,764
Business interruption income		0			0			885			885
Total revenues		381,277			42			885			382,204
Rental operation expenses		(106,574	)		(10	)		0			(106,584	)
Net operating income		274,703			32			885			275,620
Impairment charges		(3,370	)								(3,370	)
Depreciation and amortization		(123,400	)								(123,400	)
Interest income					13,658						13,658
Other expense, net								(254	)		(254	)
Unallocated expenses^(A)								(108,321	)		(108,321	)
Equity in net income of joint ventures		5,446									5,446
Reserve of preferred equity interests, net					(12,106	)					(12,106	)
Gain on disposition of real estate, net		31,087									31,087
Income before tax expense										$	78,360

As of September 30, 2019:
Total gross real estate assets	$	4,609,930								$	4,609,930
Notes receivable, net^(B)				$	182,400		$	(162,730	)	$	19,670

~~DDR~~SITE CENTERS CORP.

/s/ Christa A. Vesy

Christa A. Vesy

Executive Vice President
and Chief Accounting Officer
(Authorized Officer)

Date: ~~November 3, 2017~~October 30, 2020