SITE Centers Reports Fourth Quarter and Year-End 2020 Operating Results

SITE Centers Corp. SITC today announced operating results for the quarter and year ended December 31, 2020.

"Leasing activity and collections momentum continued to build through year-end and we are encouraged by the pace of recovery in our operations," commented David R. Lukes, President and Chief Executive Officer. "This level of activity, coupled with our financial position, with no material near-term maturities or capital commitments, and our focused portfolio targeting the highest household income communities in the United States gives me confidence in our Company's outlook for sustainable growth."

Results for the Quarter

• Fourth quarter net loss attributable to common shareholders was $6.4 million, or $0.03 per diluted share, as compared to net income of $9.7 million, or $0.05 per diluted share, in the year-ago period. The year-over-year decrease in net income was primarily attributable to the impact of the COVID-19 pandemic and lower joint venture fees related to the sale of the Company's stake in the DDRTC joint venture.
• Fourth quarter operating funds from operations attributable to common shareholders ("Operating FFO" or "OFFO") was $48.3 million, or $0.25 per diluted share, compared to $62.3 million, or $0.33 per diluted share, in the year-ago period. The year-over-year decrease was primarily attributable to the impact of the COVID-19 pandemic and lower joint venture fees related to the sale of the Company's stake in the DDRTC joint venture.

Results for the Year

• Net income attributable to common shareholders for the year ended December 31, 2020, was $15.2 million, or $0.08 per diluted share, which compares to net income of $61.3 million, or $0.33 per diluted share for the prior year.
• Operating FFO was $0.99 per diluted share for the full year 2020, which compares to $1.27 per diluted share for 2019.

Significant Fourth Quarter and Recent Activity

• Fourth quarter of 2020 total leasing volume was the highest produced since the third quarter of 2018 and represented a year-over-year increase of 51% as compared to the fourth quarter of 2019.
• On October 15, 2020, an affiliate of Blackstone transferred its common equity interest in BRE DDR IV to the Company for consideration of $1.00 and the Company's preferred investment in the BRE DDR IV joint venture was redeemed, thereby leaving the Company as the sole owner of (i) the seven properties owned by the BRE DDR IV joint venture, including Echelon Village Plaza and Larkin's Corner, in which the Company did not previously have a material economic interest, and (ii) $5.4 million in cash. These seven properties are subject to existing mortgage loans which had an aggregate outstanding principal balance of $146.6 million as of October 15, 2020.
• On November 20, 2020, the Company transferred its common and preferred equity interest in the BRE DDR III joint venture to an affiliate of Blackstone in exchange for White Oak Village and Midtowne Park and $4.9 million in cash. These two properties are subject to existing mortgage loans, which had an aggregate outstanding principal balance of $50.0 million as of November 20, 2020.
• On February 2, 2021, the Company, along with its partners, sold a parcel of undeveloped land in Richmond Hill, Ontario. SITE Centers' share of net proceeds totaled approximately $22 million after accounting for customary closing costs and foreign currency translation. As of December 31, 2020, the Company's net investment had a book value of $3.3 million. Subsequent to the transaction, the Company has no other investments outside the continental United States.
• On February 18, 2021 the Company declared its first quarter 2021 common stock dividend of $0.11 per share. The common stock dividend is payable on April 6, 2021 to shareholders of record at the close of business on March 18, 2021. The Board of Directors has not made any decisions with respect to the dividend policy beyond the first quarter of 2021.

Significant Full-Year Activity

• Sold two unconsolidated shopping centers and land parcels for an aggregate sales price of $36.2 million, or $14.1 million at SITE Centers' share, including $7.5 million from the repayment of a mezzanine loan.
• Completed the sale of SITE Centers' 15% stake in the DDRTC Joint Venture to its partner, TIAA-CREF, which resulted in net proceeds to the Company of $140.4 million.
• Repaid $200 million aggregate principal amount of 4.625% senior unsecured notes due 2022. The Company recorded a charge in connection with the notes' prepayment of $17.2 million primarily related to prepayment penalties.
• Repurchased 0.8 million of its common shares for $7.5 million. The shares were repurchased at a weighted-average price of $9.18 per share.
• Issued the Company's sixth Corporate Responsibility and Sustainability Report (www.sitecenters.com/2019CSR). This report was completed in alignment with the Global Reporting Initiative (GRI) and with the Sustainability Accounting Standards Board (SASB) metrics and frameworks and provides updates on the annual results of the Company's corporate responsibility and sustainability programs.
• Included in Newsweek's annual list of America's Most Responsible Companies for the second consecutive year.
• Included in Bloomberg Gender Equality Index which tracks performance of companies committed to gender equality for the second consecutive year.

Key Quarterly Operating Results

• Reported a decrease of 11.8% and 10.9% in SSNOI on a pro rata basis for the fourth quarter of 2020 and for the year ended December 31, 2020, respectively, excluding redevelopment, primarily due to the impact of the COVID-19 pandemic. Including redevelopment, SSNOI decreased by 12.0% and 11.1% on a pro rata basis for the quarter and year ended December 31, 2020, respectively.
• Generated new leasing spreads of 8.0% and renewal leasing spreads of 2.7%, both on a pro rata basis, for the trailing twelve-month period and new leasing spreads of -3.8% and renewal leasing spreads of -1.9%, both on a pro rata basis, for the fourth quarter of 2020. Fourth quarter renewal spreads were impacted by the Company's decision to execute a short-term renewal with one anchor in order to maintain occupancy.
• Reported a leased rate of 91.6% at December 31, 2020, compared to 91.9% at September 30, 2020 and 93.8% at December 31, 2019, in each case on a pro rata basis. The sequential decline was primarily related to the bankruptcy of Steinmart and related store closures.
• As of December 31, 2020, the signed but not opened spread was 290 basis points representing $12.8 million of annualized base rent on a pro rata basis.
• Annualized base rent per occupied square foot on a pro rata basis was $18.50 at December 31, 2020, compared to $18.25 at December 31, 2019.

COVID-19 Update

• SITE Centers continues to work with tenants to maximize their ability to provide goods and services to customers in accordance with phased openings in the municipalities where the Company operates as well as other public health measures and practices. Efforts include facilitating curbside and online purchase pick-up, utilization of social media platforms, and on site promotional programs and marketing. Our property operations team continues to monitor CDC and local governmental health agencies to ensure property level practices are in line with best practices and engage with property level vendors in accordance with its Vendor COVID Operating Protocol.
• As of February 12, 2021, all of the Company's properties remain open and operational with 98% of tenants, at the Company's share and based on average base rents, open for business. This compares to an open rate low of 45% as of April 5, 2020 and 98% as of October 23, 2020.
• As of February 12, 2021, the Company's tenants had paid approximately 94% of fourth quarter 2020 and 94% of January 2021 rent. The payment rates for the Company's tenants, at the Company's share and based on average base rents are reflected as follows:

• As of February 12, 2021, agreed upon rent deferral arrangements with tenants that remain unpaid represented 11% of second quarter 2020 rents, 8% of third quarter 2020 rents and 2% of fourth quarter rents. Deferral arrangements represent 1% of January 2021 rents.

Guidance
The Company estimates net income attributable to common shareholders for 2021 to be from $(0.06) to $0.05 per diluted share and Operating FFO to be $0.90 to $1.00 per diluted share. RVI disposition and refinancing fees, debt extinguishment and mark-to-market adjustments of equity awards are excluded from guidance.

Reconciliation of Net Income Attributable to Common Shareholders to FFO and Operating FFO estimates:

Other key assumptions for 2021 guidance include:

About SITE Centers Corp.
SITE Centers is an owner and manager of open-air shopping centers located in suburban, high household income communities. The Company is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol SITC. Additional information about the Company is available at https://www.sitecenters.com. To be included in the Company's e-mail distributions for press releases and other investor news, please click here.

Conference Call and Supplemental Information
The Company will hold its quarterly conference call today at 8:00 a.m. Eastern Time. To participate with access to the slide presentation, please visit the Investor Relations portion of SITE's website, ir.sitecenters.com, or for audio only, dial 888-317-6003 (U.S.), 866-284-3684 (Canada) or 412-317-6061 (international) using pass code 4946984 at least ten minutes prior to the scheduled start of the call. The call will also be webcast and available in a listen-only mode on SITE Centers' web site at ir.sitecenters.com. If you are unable to participate during the live call, a replay of the conference call will also be available at ir.sitecenters.com for further review. You may also access the telephone replay by dialing 877-344-7529 (U.S.), 855-669-9658 (Canada) or 412-317-0088 (international) using passcode 10150669 through March 18, 2021. Copies of the Company's Supplemental package and earnings slide presentation are available on the Company's website.

Non-GAAP Measures
Funds from Operations ("FFO") is a supplemental non-GAAP financial measure used as a standard in the real estate industry and is a widely accepted measure of real estate investment trust ("REIT") performance. Management believes that both FFO and Operating FFO provide additional indicators of the financial performance of a REIT. 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 is generally defined and calculated by the Company as net income (loss) (computed in accordance with generally accepted accounting principles in the United States ("GAAP")), adjusted to exclude (i) preferred share dividends, (ii) gains and losses from disposition of real estate property and related investments, which are presented net of taxes, (iii) impairment charges on real estate property and related investments, including reserve adjustments of preferred equity interests, (iv) gains and 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 NAREIT. The Company calculates Operating FFO as FFO excluding certain non-operating charges, income and gains. 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. Other real estate companies may calculate FFO and Operating FFO in a different manner.

In calculating the expected range for or amount of net (loss) income attributable to common shareholders to estimate projected FFO and Operating FFO for future periods, the Company does not include a projection of gain and losses from the disposition of real estate property, potential impairments and reserves of real estate property and related investments, debt extinguishment costs, certain transaction costs or certain fee income. Other real estate companies may calculate expected FFO and Operating FFO in a different manner.

The Company also uses net operating income ("NOI"), 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 presents NOI information herein on a same store basis or "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. 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.

FFO, Operating FFO, NOI and SSNOI do not represent cash generated from operating activities in accordance with GAAP, are not necessarily indicative of cash available to fund cash needs and should not be considered as alternatives to net income computed in accordance with GAAP, as indicators of the Company's operating performance or as alternatives to cash flow as a measure of liquidity. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures have been provided herein.

Safe Harbor
SITE Centers Corp. considers portions of the information in this press release 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 expectation for future periods. Although the Company believes that the expectations reflected in such 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 historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, the impact of the COVID-19 pandemic on the Company's ability to manage its properties and finance its operations and on tenants' ability to operate their businesses, generate sales and meet their financial obligations, including the obligation to pay ongoing and deferred rents; the Company's ability to pay dividends; local conditions such as the supply of, and demand for, retail real estate space in the area; the impact of e-commerce; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant and the impact of any such event on rental income from other tenants and our properties; redevelopment and construction activities may not achieve a desired return on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; impairment charges; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements and the Company's ability to satisfy conditions to the completion of these arrangements; valuation and risks relating to our joint venture and preferred equity investments; the termination of any joint venture arrangements or arrangements to manage real property; property damage, expenses related thereto and other business and economic consequences (including the potential loss of rental revenues) resulting from extreme weather conditions or natural disasters in locations where we own properties, and the ability to estimate accurately the amounts thereof; sufficiency and timing of any insurance recovery payments related to damages from extreme weather conditions or natural disasters; any change in strategy; our ability to maintain REIT status; and the finalization of the financial statements for the period ended December 31, 2020. 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 the Company's most recent reports on Form 10-K and Form 10-Q. The impacts of the COVID-19 pandemic may also exacerbate the risks described therein, any of which could have a material effect on the Company. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

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