10-Q 1 sitc-20230930.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-11690

SITE Centers Corp.

(Exact name of registrant as specified in its charter)

Ohio

34-1723097

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

3300 Enterprise Parkway

Beachwood, OH

44122

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (216) 755-5500

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of October 27, 2023 the registrant had 209,317,553 shares of common stock, $0.10 par value per share, outstanding.

 

 


 

SITE Centers Corp.

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED September 30, 2023

 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements – Unaudited

 

 

Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022

3

 

Consolidated Statements of Operations for the Three Months Ended September 30, 2023 and 2022

4

 

Consolidated Statements of Operations for the Nine Months Ended September 30, 2023 and 2022

5

 

Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022

6

 

Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2023 and 2022

7

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022

8

 

Notes to Condensed Consolidated Financial Statements

9

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

16

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

34

Item 4.

Controls and Procedures

35

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

36

Item 1A.

Risk Factors

36

Item 2.

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

37

Item 3.

Defaults Upon Senior Securities

37

Item 4.

Mine Safety Disclosures

37

Item 5.

Other Information

37

Item 6.

Exhibits

38

SIGNATURES

39

 

 

2


 

SITE Centers Corp.

CONSOLIDATED BALANCE SHEETS

(unaudited; in thousands, except share amounts)

 

September 30, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

Land

$

1,082,330

 

 

$

1,066,852

 

Buildings

 

3,717,850

 

 

 

3,733,805

 

Fixtures and tenant improvements

 

597,874

 

 

 

576,036

 

 

 

5,398,054

 

 

 

5,376,693

 

Less: Accumulated depreciation

 

(1,730,179

)

 

 

(1,652,899

)

 

 

3,667,875

 

 

 

3,723,794

 

Construction in progress and land

 

62,809

 

 

 

56,466

 

Total real estate assets, net

 

3,730,684

 

 

 

3,780,260

 

Investments in and advances to joint ventures, net

 

40,830

 

 

 

44,608

 

Cash and cash equivalents

 

26,560

 

 

 

20,254

 

Restricted cash

 

36,701

 

 

 

960

 

Accounts receivable

 

65,192

 

 

 

63,926

 

Other assets, net

 

125,155

 

 

 

135,009

 

 

$

4,025,122

 

 

$

4,045,017

 

Liabilities and Equity

 

 

 

 

 

Unsecured indebtedness:

 

 

 

 

 

Senior notes, net

$

1,368,282

 

 

$

1,453,923

 

Term loan, net

 

198,772

 

 

 

198,521

 

Revolving credit facility

 

135,000

 

 

 

 

 

 

1,702,054

 

 

 

1,652,444

 

Mortgage indebtedness, net

 

38,100

 

 

 

54,577

 

Total indebtedness

 

1,740,154

 

 

 

1,707,021

 

Accounts payable and other liabilities

 

208,151

 

 

 

214,985

 

Dividends payable

 

30,100

 

 

 

30,389

 

Total liabilities

 

1,978,405

 

 

 

1,952,395

 

Commitments and contingencies

 

 

 

 

 

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, 2023 and
   December 31, 2022

 

175,000

 

 

 

175,000

 

Common shares, with par value, $0.10 stated value; 300,000,000 shares authorized; 214,373,180 and
   
214,371,498 shares issued at September 30, 2023 and December 31, 2022, respectively

 

21,437

 

 

 

21,437

 

Additional paid-in capital

 

5,972,902

 

 

 

5,974,216

 

Accumulated distributions in excess of net income

 

(4,067,355

)

 

 

(4,046,370

)

Deferred compensation obligation

 

5,053

 

 

 

5,025

 

Accumulated other comprehensive income

 

12,055

 

 

 

9,038

 

Less: Common shares in treasury at cost: 5,341,958 and 3,787,279 shares at September 30, 2023 and
   December 31, 2022, respectively

 

(72,375

)

 

 

(51,518

)

Total SITE Centers shareholders' equity

 

2,046,717

 

 

 

2,086,828

 

Non-controlling interests

 

 

 

 

5,794

 

Total equity

 

2,046,717

 

 

 

2,092,622

 

 

$

4,025,122

 

 

$

4,045,017

 

 

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

 

 

 

3


 

 

SITE Centers Corp.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share amounts)

 

 

Three Months

 

 

Ended September 30,

 

 

2023

 

 

2022

 

Revenues from operations:

 

 

 

 

 

Rental income

$

142,498

 

 

$

135,123

 

Fee and other income

 

2,261

 

 

 

3,720

 

 

144,759

 

 

 

138,843

 

Rental operation expenses:

 

 

 

 

 

Operating and maintenance

 

20,986

 

 

 

22,314

 

Real estate taxes

 

20,543

 

 

 

20,423

 

General and administrative

 

11,259

 

 

 

10,799

 

Depreciation and amortization

 

52,821

 

 

 

51,179

 

 

105,609

 

 

 

104,715

 

Other income (expense):

 

 

 

 

 

Interest expense

 

(21,147

)

 

 

(20,139

)

Other income (expense), net

 

(690

)

 

 

(501

)

 

(21,837

)

 

 

(20,640

)

Income before earnings from equity method investments and other items

 

17,313

 

 

 

13,488

 

Equity in net income of joint ventures

 

518

 

 

 

25,918

 

Gain on sale and change in control of interests

 

 

 

 

228

 

Gain on disposition of real estate, net

 

31,047

 

 

 

26,837

 

Income before tax expense

 

48,878

 

 

 

66,471

 

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

 

(236

)

 

 

(258

)

Net income

$

48,642

 

 

$

66,213

 

Income attributable to non-controlling interests, net

 

 

 

 

(18

)

Net income attributable to SITE Centers

$

48,642

 

 

$

66,195

 

Preferred dividends

 

(2,789

)

 

 

(2,789

)

Net income attributable to common shareholders

$

45,853

 

 

$

63,406

 

 

 

 

 

 

Per share data:

 

 

 

 

 

Basic

$

0.22

 

 

$

0.30

 

Diluted

$

0.22

 

 

$

0.30

 

 

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

4


 

SITE Centers Corp.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in thousands, except per share amounts)

 

 

Nine Months

 

 

Ended September 30,

 

 

2023

 

 

2022

 

Revenues from operations:

 

 

 

 

 

Rental income

$

414,324

 

 

$

401,210

 

Fee and other income

 

7,285

 

 

 

12,635

 

 

 

421,609

 

 

 

413,845

 

Rental operation expenses:

 

 

 

 

 

Operating and maintenance

 

66,628

 

 

 

66,528

 

Real estate taxes

 

60,875

 

 

 

61,230

 

Impairment charges

 

 

 

 

2,536

 

General and administrative

 

35,935

 

 

 

34,403

 

Depreciation and amortization

 

165,535

 

 

 

152,564

 

 

 

328,973

 

 

 

317,261

 

Other income (expense):

 

 

 

 

 

Interest expense

 

(61,991

)

 

 

(57,306

)

Other income (expense), net

 

(2,011

)

 

 

(2,152

)

 

 

(64,002

)

 

 

(59,458

)

Income before earnings from equity method investments and other items

 

28,634

 

 

 

37,126

 

Equity in net income of joint ventures

 

6,495

 

 

 

27,468

 

Gain on sale and change in control of interests

 

3,749

 

 

 

45,554

 

Gain on disposition of real estate, net

 

31,230

 

 

 

31,292

 

Income before tax expense

 

70,108

 

 

 

141,440

 

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

 

(811

)

 

 

(863

)

Net income

$

69,297

 

 

$

140,577

 

Income attributable to non-controlling interests, net

 

(18

)

 

 

(55

)

Net income attributable to SITE Centers

$

69,279

 

 

$

140,522

 

Preferred dividends

 

(8,367

)

 

 

(8,367

)

Net income attributable to common shareholders

$

60,912

 

 

$

132,155

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

Basic

$

0.29

 

 

$

0.62

 

Diluted

$

0.29

 

 

$

0.62

 

 

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

5


 

SITE Centers Corp.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited; in thousands)

 

 

Three Months

 

 

Nine Months

 

 

Ended September 30,

 

 

Ended September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income

$

48,642

 

 

$

66,213

 

 

$

69,297

 

 

$

140,577

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

Change in cash flow hedges, net of amount reclassed to earnings

 

1,930

 

 

 

9,782

 

 

 

3,017

 

 

 

9,782

 

Total other comprehensive income

 

1,930

 

 

 

9,782

 

 

 

3,017

 

 

 

9,782

 

Comprehensive income

$

50,572

 

 

$

75,995

 

 

$

72,314

 

 

$

150,359

 

Comprehensive income attributable to non-controlling interests

 

 

 

 

(18

)

 

 

(18

)

 

 

(55

)

Total comprehensive income attributable to SITE Centers

$

50,572

 

 

$

75,977

 

 

$

72,296

 

 

$

150,304

 

 

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

 

6


 

SITE Centers Corp.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in thousands)

 

 

SITE Centers Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Shares

 

 

Common
Shares

 

 

Additional
Paid-in
Capital

 

 

Accumulated Distributions
in Excess of
Net Income

 

 

Deferred
Compensation
Obligation

 

 

Accumulated Other Comprehensive Income

 

 

Treasury
Stock at
Cost

 

 

Non-
Controlling
Interests

 

 

Total

 

Balance, December 31, 2022

$

175,000

 

 

$

21,437

 

 

$

5,974,216

 

 

$

(4,046,370

)

 

$

5,025

 

 

$

9,038

 

 

$

(51,518

)

 

$

5,794

 

 

$

2,092,622

 

Issuance of common shares
   related to stock plans

 

 

 

 

 

 

 

13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

Repurchase of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,611

)

 

 

 

 

 

(26,611

)

Stock-based compensation, net

 

 

 

 

 

 

 

(6,370

)

 

 

 

 

 

(84

)

 

 

 

 

 

5,303

 

 

 

 

 

 

(1,151

)

Repurchase of OP units

 

 

 

 

 

 

 

4,059

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,794

)

 

 

(1,735

)

Distributions to non-controlling
   interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18

)

 

 

(18

)

Dividends declared-common shares

 

 

 

 

 

 

 

 

 

 

(54,586

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(54,586

)

Dividends declared-preferred shares

 

 

 

 

 

 

 

 

 

 

(5,578

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,578

)

Comprehensive income

 

 

 

 

 

 

 

 

 

 

20,637

 

 

 

 

 

 

1,087

 

 

 

 

 

 

18

 

 

 

21,742

 

Balance, June 30, 2023

 

175,000

 

 

 

21,437

 

 

 

5,971,918

 

 

 

(4,085,897

)

 

 

4,941

 

 

 

10,125

 

 

 

(72,826

)

 

 

-

 

 

 

2,024,698

 

Issuance of common shares
   related to stock plans

 

 

 

 

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Stock-based compensation, net

 

 

 

 

 

 

 

977

 

 

 

 

 

 

112

 

 

 

 

 

 

451

 

 

 

 

 

 

1,540

 

Dividends declared-common shares

 

 

 

 

 

 

 

 

 

 

(27,311

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,311

)

Dividends declared-preferred shares

 

 

 

 

 

 

 

 

 

 

(2,789

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,789

)

Comprehensive income

 

 

 

 

 

 

 

 

 

 

48,642

 

 

 

 

 

 

1,930

 

 

 

 

 

 

 

 

 

50,572

 

Balance, September 30, 2023

$

175,000

 

 

$

21,437

 

 

$

5,972,902

 

 

$

(4,067,355

)

 

$

5,053

 

 

$

12,055

 

 

$

(72,375

)

 

$

 

 

$

2,046,717

 

 

 

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) Income

 

 

Treasury
Stock at
Cost

 

 

Non-
Controlling
Interests

 

 

Total

 

Balance, December 31, 2021

$

175,000

 

 

$

21,129

 

 

$

5,934,166

 

 

$

(4,092,783

)

 

$

4,695

 

 

$

 

 

$

(5,349

)

 

$

5,794

 

 

$

2,042,652

 

Issuance of common shares
   related to stock plans

 

 

 

 

65

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

71

 

Issuance of common shares for
   cash offering

 

 

 

 

243

 

 

 

36,614

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

36,857

 

Stock-based compensation, net

 

 

 

 

 

 

 

2,649

 

 

 

 

 

 

8

 

 

 

 

 

 

(4,498

)

 

 

 

 

 

(1,841

)

Distributions to non-controlling
   interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(37

)

 

 

(37

)

Dividends declared-common shares

 

 

 

 

 

 

 

 

 

 

(55,810

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(55,810

)

Dividends declared-preferred shares

 

 

 

 

 

 

 

 

 

 

(5,578

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,578

)

Comprehensive income

 

 

 

 

 

 

 

 

 

 

74,327