InvenTrust Properties Corp. Reports 2023 Second Quarter Results

InvenTrust Properties Corp. (“InvenTrust” or the “Company”) (NYSE: IVT) today reported financial and operating results for the period ended June 30, 2023. For the three months ended June 30, 2023 and 2022, Net Income was $2.1 million, or $0.03 per diluted share, compared to Net Income of $41.9 million, or $0.62 per diluted share, respectively.

Second Quarter 2023 Highlights:

• NAREIT FFO of $0.43 per diluted share
• Core FFO of $0.43 per diluted share
• Same Property Net Operating Income (“NOI”) growth of 3.7%
• Leased Occupancy as of June 30, 2023 of 96.2%
• Executed 77 leases totaling approximately 347,000 square feet of GLA, of which 244,000 square feet was executed at a blended comparable lease spread of 5.8%
• Acquired The Shoppes at Davis Lake, a 91,000 square foot neighborhood center anchored by Harris Teeter in Charlotte, North Carolina for a gross acquisition price of $22.4 million.
• Published the Company’s annual 2022 Environmental, Social & Governance report.

“Our results this quarter highlight the robust tenant demand at our centers and the outstanding execution of the InvenTrust team, positioning our platform for continued outperformance,” Daniel (DJ) Busch, President and CEO of InvenTrust stated. “Our investment grade balance sheet provides us the flexibility to be both patient and opportunistic when looking to grow our asset base without the immediate need to access the capital markets.”

NET INCOME

• Net Income for the three months ended June 30 2023 was $2.1 million, or $0.03 per diluted share, compared to Net Income of $41.9 million, or $0.62 per diluted share, for the same period in 2022.
• Net Income for the six months ended June 30, 2023 was $3.2 million, or $0.05 per diluted share, compared to Net Income of $51.4 million, or $0.76 per diluted share, for the same period in 2022.

NAREIT FFO

• NAREIT FFO for the three months ended June 30, 2023 was $29.2 million, or $0.43 per diluted share, compared to $30.4 million, or $0.45 per diluted share, for the same period in 2022.
• NAREIT FFO for the six months ended June 30, 2023 was $57.2 million, or $0.84 per diluted share, compared to $62.1 million, or $0.92 per diluted share, for the same period in 2022.

CORE FFO

• Core FFO for the three months ended June 30, 2023 was $29.1 million, or $0.43 per diluted share, compared to $28.6 million, or $0.42 per diluted share, for the same period in 2022.
• Core FFO for the six months ended June 30, 2023 was $56.4 million, or $0.83 per diluted share, compared to $57.7 million, or $0.85 per diluted share, for the same period in 2022.

SAME PROPERTY NOI

• Same Property NOI for the three months ended June 30, 2023 was $38.0 million, a 3.7% increase, compared to the same period in 2022.
• Same Property NOI for the six months ended June 30, 2023 was $71.8 million, a 3.5% increase, compared to the same period in 2022.

DIVIDEND

• For the quarter ending June 30, 2023, the Board of Directors declared a quarterly cash distribution of $0.2155 per share, paid on July 14, 2023.

PORTFOLIO PERFORMANCE & INVESTMENT ACTIVITY

• As of June 30, 2023, the Company’s Leased Occupancy was 96.2%.
  • Total Anchor Leased Occupancy, which includes spaces greater than or equal to 10,000 square feet, was 98.6% and Small Shop Leased Occupancy was 92.0%. Anchor Leased Occupancy decreased 20 basis points and Small Shop Leased Occupancy increased 60 basis points on a sequential basis compared to the previous quarter.
  • Leased to Economic Occupancy spread of 230 basis points, which equates to approximately $4.9 million of base rent on an annualized basis.
• Blended re-leasing spreads for comparable new and renewal leases signed in the second quarter were 5.8%.
• Annualized Base Rent PSF (“ABR”) as of June 30, 2023 was $19.18, an increase of 2.0% compared to the same period in 2022. Anchor Tenant ABR PSF was $12.40 and Small Shop ABR PSF was $32.32 for the second quarter.
• Acquired The Shoppes at Davis Lake, a 91,000 square foot neighborhood center anchored by Harris Teeter in Charlotte, North Carolina for a gross acquisition price of $22.4 million.

LIQUIDITY AND CAPITAL STRUCTURE

• InvenTrust had $434.0 million of total liquidity, as of June 30, 2023, comprised of $84.0 million of Pro Rata Cash and $350.0 million of availability under its Revolving Credit Facility. As of June 30, 2023, net assets of IAGM were $6.9 million, inclusive of cash and cash equivalents of $10.4 million.
• InvenTrust has $92.5 million of debt maturing in 2023 and $15.7 million of debt maturing in 2024, as of June 30, 2023.
• As of June 30, 2023, the Company's weighted average interest rate on its debt was 3.88% and the weighted average remaining term was 4.3 years.
• Effective April 3, 2023, the Company’s variable rate on $100.0 million of term loans was swapped to a fixed rate of 3.69%, achieving an all-in interest rate of 4.99%. In tandem with other interest rate swaps, the entirety of the Company's variable rate term loans were swapped to fixed rates through the respective maturity dates.

2023 GUIDANCE

InvenTrust has updated its 2023 guidance, as summarized in the table below.

The following table provides a reconciliation of the range of the Company's 2023 estimated net income per diluted share to estimated NAREIT FFO and Core FFO per diluted share:

The Company does not provide a reconciliation of forward-looking SPNOI to forward-looking GAAP Net Income within this press release because the Company is unable, without making unreasonable efforts, to provide a meaningful or reasonably accurate calculation or estimation of certain reconciling items which could be significant to our results.

NON-GAAP FINANCIAL MEASURES

This Earnings Release includes certain non-GAAP financial measures and other terms that management believes are helpful in understanding our business. These measures should not be considered as alternatives to, or more meaningful than, net income (calculated in accordance with GAAP) or other GAAP financial measures, as an indicator of financial performance and are not alternatives to, or more meaningful than, cash flow from operating activities (calculated in accordance with GAAP) as a measure of liquidity. Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results to those calculated in accordance with GAAP. The Company's computation of these non-GAAP performance measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from these non-GAAP performance measures are relevant to understanding and addressing financial performance. A reconciliation of our non-GAAP measures to the most directly comparable GAAP financials measures are included herein.

SAME PROPERTY NOI or SPNOI

Information provided on a same property basis includes the results of properties that were owned and operated for the entirety of both periods presented. NOI excludes general and administrative expenses, depreciation and amortization, provision for asset impairment, other income and expense, net, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, equity in earnings (losses) from unconsolidated entities, lease termination income and expense, and GAAP rent adjustments such as straight-line rent adjustments, amortization of market lease intangibles, and amortization of lease incentives ("GAAP Rent Adjustments").

NAREIT FUNDS FROM OPERATIONS (NAREIT FFO) and CORE FFO

Our non-GAAP measure of NAREIT Funds from Operations ("NAREIT FFO"), based on the National Association of Real Estate Investment Trusts ("NAREIT") definition, is net income (or loss) in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable real property. Adjustments for our unconsolidated joint venture is calculated to reflect our proportionate share of the joint venture's NAREIT FFO on the same basis. Core Funds From Operations (“Core FFO”) is an additional supplemental non-GAAP financial measure of our operating performance. In particular, Core FFO provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within NAREIT FFO and other unique revenue and expense items which some may consider not pertinent to measuring a particular company’s on-going operating performance.

ADJUSTED EBITDA

Our non-GAAP measure of Adjusted EBITDA excludes gains (or losses) resulting from debt extinguishments, straight-line rent adjustments, amortization of above and below market leases and lease inducements, and other unique revenue and expense items which some may consider not pertinent to measuring a particular company’s on-going operating performance. Adjustments for our unconsolidated joint venture is calculated to reflect our proportionate share of the joint venture's Adjusted EBITDA on the same basis.

NET DEBT-TO-ADJUSTED EBITDA

Net Debt-to-Adjusted EBITDA is Net Debt divided by Adjusted EBITDA on a trailing twelve month basis.

PRO RATA

Where appropriate, the Company has included the results from its ownership share of its joint venture properties when combined with the Company's wholly owned properties, defined as "Pro Rata," with the exception of property and lease count, for the three and six months ended June 30, 2022 and as of December 31, 2022. As of June 30, 2023, as a result of the Company’s acquisition of the remaining IAGM properties, net assets of IAGM were $6.9 million, inclusive of cash and cash equivalents of $10.4 million, which has been included as part of Pro Rata Cash.