Federal Realty Investment Trust
Annual Report 2021

Plain-text annual report

F E D E R A L R E A L T Y I N V E S T M E N T T R U S T 2021 Annual Report Form 10-K & Proxy Statement Dear Shareholders, As I write this letter in early 2022 with the Company’s strong 2021 comeback year under our belt, I find myself thankful, energized and even more optimistic our business prospects than I was before the pandemic. about for Thankful the dedicated team of real estate professionals that make up Federal’s workforce. Thankful for their tenacious and tireless pursuit of working with and rebuilding our tenant base after the most disruptive social and economic upheaval in most of our lifetimes. Thankful their predecessors for the past 60 years, carefully who, over amassed and curated what I believe to be the highest quality portfolio of shopping centers and mixed-use communities and one of the strongest balance sheets in the industry. Real estate that was ripe for recovery and a balance sheet that allowed for the time and flexibility to work through it. Energized by the sheer levels of demand that resulted in 573 commercial leases executed for 2.9 million square feet of space in 2021 raising our portfolio’s leased percentage to than 12 93.6%; 140 basis points higher months earlier. Energized by the $440 million worth of new properties we were able to acquire and control in 2021 before prices shot up dramatically later in the year and into 2022. Energized by the tough and pragmatic approach to our property redevelopment and expansion continued uninterrupted throughout the pandemic. And mostly, energized by the fact that all of this was done without laying off or furloughing one employee while also maintaining our incredible increasing dividends per share to our shareholders throughout the pandemic. program 54-year record that of the need for undeniable Optimistic because of the renewed validation of consumer socialization best seen through recovering traffic counts and tenant sales at retailers and restaurants. As important as online ordering is as a convenient channel to the lifestyle of the consumer, it is equally evident that it doesn’t replace the in-person shopping or eating experience consumers crave but rather lives side by side to the benefit of everyone. Optimistic because our properties have always focused heavily on placemaking and tenant merchandising with just the right tenant doing business in an environment heavy on comfortable and expansive outdoor seating areas and landscaping; two attributes that feel even more important after two years of restrictions. Optimistic about the surge in popularity of the first ring suburbs of major metropolitan markets where the vast majority of our portfolio lies. Yup, even more optimistic about our business prospects than I was before the pandemic. The right product, in the right locations, run by the right team, is how I see Federal Realty in a post pandemic world. Is it any wonder that I’m feeling thankful, energized, and optimistic? F E D E R A L R E A L T Y | A N N U A L R E P O R T 2021 on social (ESG), which And as we look to the future, what’s further encouraging to me is the way that our team, top to bottom, has embraced our role as good corporate societal citizens and defenders of the planet and its natural resources. Our latest and report environmental, governance principles sits prominently available on our website, does a wonderful job of articulating not only what we stand for, but what we’re doing about it. From designing and building the most efficient and sustainable mixed-use environments in the country, to continuous investment and improvement in the long-term efficient operation of those properties, to the tolerance and understanding, exercise of diversity and fairness with respect to our fellow human beings with whom we both work and serve to the forthright way we deal with inequities head on, ESG isn’t just a catchphrase at Federal, but a way of life. customers, retail and as A d d i n g t o t h e P o r t f o l i o t h r o u g h A c q u i s i t i o n s of and covid economic There was a brief period of time between the advent of the pandemic in March 2020 through the beginning of 2021, when the level health uncertainty was so high that it significantly depressed commercial real estate values. We had a decision to make with respect to acquisitions that we were pursuing prior to the pandemic. Either table those negotiations until a later time when the world was more certain and risk losing them altogether or press forward to close those deals at a particularly vulnerable time for all. We decided to persevere and to close and were successful on all fronts. Grossmont Center near San Diego, Camelback Colonnade and Hilton Scottsdale, Village in and respectively, Twinbrooke in Fairfax Shopping Centers County, Virginia have added nearly 1.9 million square feet and nearly 140 acres to Federal’s high-quality portfolio at favorable prices that couldn’t possibly be duplicated today. That initial investment, when coupled with the rent growth and expansion opportunities that these properties bring, afford us a unique growth driver that we’re particularly excited about. Phoenix and Chesterbrook and Commercial real estate values have recovered mightily since the middle of 2021 and in many instances have surpassed pre-covid values. In hindsight, moving forward seems like the obvious choice. It was anything but in the depths of the global shutdown in 2020. The confidence to take that risk was only made possible due to the flexibility afforded by the strength of our balance sheet and the confidence we had, even in the most uncertain of times, in the recovery of our very high-quality shopping center portfolio located in the first ring suburbs of our country’s largest coastal cities. A d d i n g t o t h e P o r t f o l i o t h r o u g h R e d e v e l o p m e n t a n d E x p a n s i o n to the decisions needed important be made Similar concerning development initiative that is a core part of our multi- faceted as with plan acquisitions, we chose to persevere and stay on course. We’re very glad we did. business and, our completed We’ve mixed-use redevelopment of CocoWalk, our $200 million acquisition and complete renovation of one of Miami’s most iconic retail properties. We’re now fully leased and are already receiving rave reviews from consumers and investors alike. Just outside of Boston, our $475 million Phase III mixed-use expansion at Assembly Row is particularly encouraging, with its residential lease up occurring at a pace and at rents well in excess of our expectations and even ahead of what we saw on its sister building for Stay expansion here. Right behind additional Assembly Phase III on the construction timetable is the $270 million Santana Row expansion; this phase is a 376,000 square foot office building across the street at Santana West. The lease up of that building will be another significant source of growth in the years to come. And later in 2022, we’re excited to introduce our residential over retail reimagining of Darien Commons, adjacent to the in Darien, Connecticut. pre-pandemic. commuter station tuned rail F E D E R A L R E A L T Y | A N N U A L R E P O R T 2021 and than dozen are more a expansion other There redevelopment projects underway throughout the portfolio that, while smaller in size and capital commitment, are equally critical to the post pandemic appeal and value creation of our community and regional shopping destinations. H e a d w i n d s a n d T a i l w i n d s annual inflation increases The specter of inflation and rising interest rates haven’t been a major factor in our business for nearly 20 years. All indications suggest that is about to change and while clearly runaway inflation and sky-high interest rates are problematic to commercial real estate values and operating cash flows, are often a positive. modest Reasonable 3-4% annually) and predictable modest increases in market interest rates are often a good thing for our business, particularly in the strong coastal markets where we operate. Just as reasonable increases in costs are often passed on to consumers by retailers and restaurants in the affluent suburbs where we operate, so can rental rate increases and annual rent bumps which are often easier to negotiate during inflationary periods. It’s the rate and duration of this inflationary period that is uncertain at this point. (say Similarly, labor shortages and supply chain disruptions coming out of the pandemic have been stubbornly persistent and widespread. Hardly any industry is unaffected. As the economy is weaned off the multi-trillion-dollar government stimulus of the past two years, and the new definition of back to work takes shape, labor force changes and supply chain disruptions are bound to continue. We continue to anticipate and proactively look and act in ways to minimize disruption, but the sooner some level of balance is restored, the better. We’re looking to 2023 for improvement. At the same time, the tailwinds helping our business are undeniable. For a portfolio like ours that reaches over 95% leased at the top of cycles, we were as low as 91.5% in September 2020. And while we’ve made great progress in 2021, we’re still only 93.6% leased at year end. Lots of room to grow and our demand is stronger than ever. And let’s not forget all that redevelopment and expansion capital that has been spent both immediately before and throughout the pandemic that is not yet income producing. Simply leasing up that highly desirable, brand-new space from capital that has already been spent will serve as a growth catalyst for years to come. A clear tailwind. I n C l o s i n g If you’re sensing a common theme to the decision making of the past two years, you’re right. A strong desire to “stay the course” through adversity always weighs heavily on the calculations. Fundamental to our business plan and mission is our understanding that one of the very important reasons long-term investors choose Federal Realty is their belief that the highest quality real estate serves as a sort of buffer from the natural cyclicality that economic swings cause – even a once in a lifetime global pandemic. our dividend common the past So yes, we have maintained and even increased to shareholders over the past two years when we didn’t have to, thereby extending our REIT leading record to 54 years. And yes, we full workforce and team maintained our members over two years when furloughs and layoffs would have been easily justifiable –and shortsighted. And yes, we plowed forward in completing acquisitions and developments that were underway when most others closed up shop. We worked with tenants, particularly smaller retailers and restaurants, by abating and deferring rent so that our centers would be stronger and better In short, we merchandised post pandemic. long-term take our shareholders very seriously by doing all we can to offer a steady stream of growing cash flows over time. We do that by owning, operating, and building what we believe to be the best collection of retail centric shopping centers and mixed-use communities in the country. Our strong recovery in 2021 is testament to that quality and sets us up beautifully for continued growth in 2022 and beyond. commitment to our F E D E R A L R E A L T Y | A N N U A L R E P O R T 2021 54 consecutive years of increased dividends. $0.12* 1967 *Annualized dividends per share couldn’t be more proud of I Federal’s performance throughout this unprecedented time and it could not have been possible without two final pieces. A strong balance sheet with one of the lowest costs of debt and equity capital in the business that allows the Trust to navigate difficult times with a level of flexibility unavailable to most real estate firms. And finally, a Board of Trustees that is importantly, seasoned and dedicated and, $4.28* 2021 of but sight loses never shares our enthusiasm for what we do for a living, the shareholders that they represent or the clarity and transparency that they deserve. On behalf of the Board of Trustees and our entire team, I thank you for your support of Federal to date and look forward to being an important part of your investment portfolio for many years to thankful, come. energized, and optimistic about our future. be more couldn’t I Respectfully, Donald C. Wood Chief Executive Officer F E D E R A L R E A L T Y | A N N U A L R E P O R T 2021 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ☐ ANNUAL REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 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: 1-07533 (Federal Realty Investment Trust) Commission file number: 333-262016-01 (Federal Realty OP LP) FEDERAL REALTY INVESTMENT TRUST FEDERAL REALTY OP LP (Exact Name of Registrant as Specified in its charter) Maryland (Federal Realty Investment Trust) Delaware (Federal Realty OP LP) (State of Organization) 87-3916363 52-0782497 (IRS Employer Identification No.) 909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852 (Address of Principal Executive Offices) (Zip Code) (301) 998-8100 (Registrant’s Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: Federal Realty Investment Trust Title of Each Class Common Shares of Beneficial Interest $.01 par value per share, with associated Common Share Purchase Rights Depositary Shares, each representing 1/1000 of a share of 5.00% Series C Cumulative Redeemable Preferred Stock, $.01 par value per share Trading Symbol FRT Name of Each Exchange On Which Registered New York Stock Exchange FRT-C New York Stock Exchange Title of Each Class None Trading Symbol N/A Name of Each Exchange On Which Registered N/A Federal Realty OP LP Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Federal Realty Investment Trust Federal Realty OP LP Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☒ Yes ☐ No ☒ Yes ☐ No Federal Realty Investment Trust Federal Realty OP LP 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 ☐ Yes ☒ No Federal Realty Investment Trust Federal Realty OP LP ☒ Yes ☐ No ☒ 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). Federal Realty Investment Trust Federal Realty OP LP 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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act: ☒ Yes ☐ No ☒ Yes ☐ No Federal Realty Investment Trust Large accelerated filer Non-accelerated filer Federal Realty OP LP Large accelerated filer Non-accelerated filer ☒ ☐ ☒ ☐ Accelerated filer Smaller reporting company Emerging growth company Accelerated filer Smaller reporting company Emerging growth company If an emerging growth company, indicate by checkmark if the registrant has elected not 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Federal Realty Investment Trust ☒ Federal Realty OP LP ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Federal Realty Investment Trust Federal Realty OP LP ☐ Yes ☒ No ☐ Yes ☒ No ☐ ☐ ☐ ☐ ☐ ☐ ☐ The aggregate market value of the registrant's common shares held by non-affiliates of the registrant, based upon the closing sales price of the registrant's common shares on June 30, 2021: Federal Realty Investment Trust: $9.1 billion Federal Realty OP LP: N/A The number of Federal Realty Investment Trust's common shares outstanding on February 7, 2022 was 78,616,815. FEDERAL REALTY INVESTMENT TRUST FEDERAL REALTY OP LP ANNUAL REPORT ON FORM 10-K FISCAL YEAR ENDED DECEMBER 31, 2021 DOCUMENTS INCORPORATED BY REFERENCE Portions of Federal Realty Investment Trust’s Proxy Statement to be filed with the Securities and Exchange Commission (the "SEC") for its annual meeting of shareholders to be held in May 2022 will be incorporated by reference into Part III hereof. EXPLANATORY NOTE Through the fiscal year ended December 31, 2021, the business of the registrant was conducted by an entity known as Federal Realty Investment Trust, a Maryland real estate investment trust (the “Predecessor”). On December 2, 2021, the Predecessor’s Board of Trustees approved the reorganization of the Predecessor’s business into an umbrella partnership real estate investment trust, or “UPREIT.” To effect the UPREIT reorganization, the Predecessor formed a wholly-owned subsidiary real estate investment trust known as FRT Holdco REIT (“Holdco”), and Holdco formed its own wholly-owned subsidiary real estate investment trust known as FRT Merger Sub REIT (“Merger Sub”). Holdco also formed a wholly-owned subsidiary limited liability company known as Federal Realty GP LLC (the “General Partner”). Effective as of January 1, 2022, Merger Sub merged with and into the Predecessor, with the Predecessor being the surviving entity and becoming a wholly-owned subsidiary of Holdco (the “Merger”). At the effective time of the Merger, each outstanding capital share of the Predecessor was converted into one equivalent capital share of Holdco. Effective as of January 5, 2022, the Predecessor converted into a Delaware limited partnership known as Federal Realty OP LP, the entity we refer to herein as the “Partnership.” In connection with the UPREIT reorganization, Holdco changed its name to Federal Realty Investment Trust, the entity we refer to herein as the “Parent Company.” The Parent Company had the same consolidated assets and liabilities immediately following the Merger as the Predecessor immediately before the Merger. The General Partner is the sole general partner of the Partnership, and the Parent Company owns 100% of the limited liability company interests of, is the sole member of and exercises exclusive control over the General Partner. Following the UPREIT reorganization described above, the Parent Company expects to conduct its business through the Partnership and does not expect to have substantial assets or liabilities other than through its investment in the Partnership. As a result of the UPREIT reorganization, the Parent Company became the successor issuer to the Predecessor pursuant to Rule 12g-3(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and as a result, the Parent Company's common shares and Series C depositary shares were deemed registered under Section 12(b) of the Exchange Act. This Annual Report on Form 10-K pertains to the business and results of operations of the Predecessor for its fiscal year ended December 31, 2021. The Company and the Partnership have elected to co-file such Annual Report of the Predecessor to ensure continuity of information to investors. For additional information on our UPREIT reorganization, please see our Current Reports on Form 8-K filed with the SEC on January 3, 2022 and January 5, 2022. Throughout this Annual Report, unless the context requires otherwise: • • • • “Parent Company” refers to Federal Realty Investment Trust following the Merger; “Partnership” refers to Federal Realty OP LP; “we,” “us,” “our” or the “Trust” refer to the Parent Company and its business and operations conducted through its directly or indirectly owned subsidiaries, including Federal Realty OP LP; and References to “shares” and “shareholders” refer to the shares and shareholders of the Parent Company and not the limited partnership interests or limited partners of the Partnership. 1 TABLE OF CONTENTS Business ........................................................................................................................................................... 3 Risk Factors ..................................................................................................................................................... 7 Unresolved Staff Comments............................................................................................................................ 18 Properties ......................................................................................................................................................... 19 Legal Proceedings............................................................................................................................................ 27 Mine Safety Disclosures .................................................................................................................................. 28 Market for Our Common Equity and Related Shareholder Matters and Issuer Purchases of Equity Securities.......................................................................................................................................................... 29 Selected Financial Data ................................................................................................................................... 31 Management’s Discussion and Analysis of Financial Condition and Results of Operations.......................... 31 Quantitative and Qualitative Disclosures About Market Risk......................................................................... 51 Financial Statements and Supplementary Data ............................................................................................... 51 Changes In and Disagreements with Accountants on Accounting and Financial Disclosure ......................... 51 Controls and Procedures .................................................................................................................................. 52 Other Information ............................................................................................................................................ 52 Trustees, Executive Officers and Corporate Governance................................................................................ 53 Executive Compensation ................................................................................................................................. 53 Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters ....... 53 Certain Relationships and Related Transactions, and Trustee Independence ................................................. 53 Principal Accountant Fees and Services.......................................................................................................... 53 Exhibits and Financial Statement Schedules ................................................................................................... 53 Form 10-K Summary 57 PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. PART III Item 10. Item 11. Item 12. Item 13. Item 14. PART IV Item 15. Item 16. SIGNATURES ......................................................................................................................................................................... 58 2 PART I Forward-Looking Statements Certain statements included in this Annual Report on Form 10-K are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Federal Realty Investment Trust and Federal Realty OP LP (together, “we” “our” or “us”) and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements: • • • • • • • • risks that our tenants will not pay rent, may vacate early or may file for bankruptcy or that we may be unable to renew leases or re-let space at favorable rents as leases expire or to fill existing vacancy; risks that we may not be able to proceed with or obtain necessary approvals for any development, redevelopment or renovation project, and that completion of anticipated or ongoing property development, redevelopment, or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected; risks normally associated with the real estate industry, including risks that occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, that new acquisitions may fail to perform as expected, that competition for acquisitions could result in increased prices for acquisitions, that costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, that environmental issues may develop at our properties and result in unanticipated costs, and, because real estate is illiquid, that we may not be able to sell properties when appropriate; risks that our growth will be limited if we cannot obtain additional capital; risks associated with general economic conditions, including local economic conditions in our geographic markets; risks of financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense; risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT; and risks related to natural disasters, climate change and public health crises (such as the outbreak and worldwide spread of COVID-19), and the measures that international, federal, state and local governments, agencies, law enforcement and/ or health authorities implement to address them, may precipitate or materially exacerbate one or more of the above- mentioned risks, and may significantly disrupt or prevent us from operating our business in the ordinary course for an extended period. In addition, we describe risks and uncertainties that could cause actual results and events to differ materially in “Risk Factors” (Part I, Item 1A of this Annual Report on Form 10-K), “Quantitative and Qualitative Disclosures about Market Risk” (Part II, Item 7A), and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” (Part II, Item 7). ITEM 1. BUSINESS General We are an equity real estate investment trust (“REIT”) specializing in the ownership, management, and redevelopment of high quality retail and mixed-use properties located primarily in communities where we believe retail demand exceeds supply, in strategically selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, California, and South Florida. As of December 31, 2021, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects comprising approximately 3 25.1 million square feet. In total, the real estate projects were 93.6% leased and 91.1% occupied at December 31, 2021. Our revenue is primarily generated from lease agreements with tenants. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for 54 consecutive years. We were founded in 1962 as a REIT under the laws of the District of Columbia and re-formed as a REIT in the state of Maryland in 1999. In January of 2022, we consummated the UPREIT reorganization described in the Explanatory Note at the beginning of this Annual Report. We operate in a manner intended to qualify as a REIT for tax purposes pursuant to provisions of the Internal Revenue Code of 1986, as amended (the “Code”). Our principal executive offices are located at 909 Rose Avenue, North Bethesda, Maryland 20852. Our telephone number is (301) 998-8100. Our website address is www.federalrealty.com. The information contained on our website is not a part of this report and is not incorporated herein by reference. Business Objectives and Strategies While the ongoing COVID-19 pandemic is impacting us in the short-term, our long-term focus has not changed. Our primary business objective is to own, manage, acquire and redevelop a portfolio of high quality retail focused properties that will: • • • • provide increasing cash flow for distribution to shareholders; generate higher internal growth than the shopping center industry over the long term; provide potential for capital appreciation; and protect investor capital. Our portfolio includes, and we continue to acquire and redevelop, high quality retail in many formats ranging from regional, community and neighborhood shopping centers that often are anchored by grocery stores to mixed-use properties that are typically centered around a retail component but also include office, residential and/or hotel components. Operating Strategies While managing through the ongoing COVID-19 pandemic has resulted in short-term deviations, our long-term core operating strategy has not changed. We continuously evaluate and assess our operating strategies to ensure they are effective and put us in the best position to address changes in the market. We actively manage our properties to maximize rents and maintain occupancy levels by attracting and retaining a strong and diverse base of tenants and replacing less relevant, weaker, underperforming tenants with stronger ones. Our properties are generally located in some of the most densely populated and affluent areas of the country. These strong demographics help our tenants generate higher sales, which has generally enabled us to maintain higher occupancy rates, charge higher rental rates, and maintain steady rent growth, all of which increase the value of our portfolio. Our operating strategies also include: • increasing rental rates through the renewal of expiring leases or the leasing of space to new tenants at higher rental rates while limiting vacancy and down-time; • maintaining a diversified tenant base, thereby limiting exposure to any one tenant’s financial or operating difficulties; • monitoring the merchandising mix of our tenant base to achieve a balance of strong national and regional tenants with local specialty tenants; • minimizing overhead and operating costs; • monitoring the physical appearance of our properties and the construction quality, condition and design of the buildings and other improvements located on our properties to maximize our ability to attract customers and thereby generate higher rents and occupancy rates; • managing our properties to take into account their impact on climate change and their resilience in the face of climate • • • • change; developing local and regional market expertise in order to capitalize on market and retailing trends; leveraging the contacts and experience of our management team to build and maintain long-term relationships with tenants; providing exceptional customer service; and creating an experience at many of our properties that is identifiable, unique and serves the surrounding communities to help insulate these properties and the tenants at these properties from the impact of on-line retailing. Investing Strategies Our investment strategy is to deploy capital at risk-adjusted rates of return that exceed our long-term weighted average cost of capital in projects that have potential for future income growth and increased value. Our investments primarily fall into one of the following four categories: 4 • • • • renovating, expanding, reconfiguring and/or retenanting our existing properties to take advantage of under-utilized land or existing square footage to increase revenue; renovating or expanding tenant spaces for tenants capable of producing higher sales, and therefore, paying higher rents; acquiring quality retail and mixed-use properties located in densely populated and/or affluent areas where barriers to entry for further development are high, and that have possibilities for enhancing operating performance and creating value through renovation, expansion, reconfiguration and/or retenanting; and developing the retail portions of mixed-use properties and developing or otherwise investing in non-retail portions of mixed-use properties we already own in order to capitalize on the overall value created in these properties. Investment Criteria When we evaluate potential redevelopment, retenanting, expansion, acquisition and development opportunities, we consider such factors as: • • • • • • • • • • the expected returns in relation to our short and long-term cost of capital as well as the anticipated risk we will face in achieving the expected returns; the anticipated growth rate of operating income generated by the property; the ability to increase the long-term value of the property through redevelopment and retenanting; the tenant mix at the property, tenant sales performance and the creditworthiness of those tenants; the geographic area in which the property is located, including the population density, household incomes, education levels, as well as the population and income trends in that geographic area. This may from time to time include the evaluation of new markets; competitive conditions in the vicinity of the property, including gross leasable area (GLA) per capita, competition for tenants and the ability of others to create competing properties through redevelopment, new construction or renovation; access to and visibility of the property from existing roadways and the potential for new, widened or realigned, roadways within the property’s trade area, which may affect access and commuting and shopping patterns; the level and success of our existing investments in the market area; the current market value of the land, buildings and other improvements and the potential for increasing those market values; and the physical condition of the land, buildings and other improvements, including the structural and environmental condition. Financing Strategies Our financing strategies are designed to enable us to maintain an investment grade balance sheet while retaining sufficient flexibility to fund our operating and investing activities in the most cost-efficient way possible. As a result of the ongoing COVID-19 pandemic and its impact on our cash flows, we have been maintaining levels of cash significantly in excess of the cash balances we have historically maintained. Our financing strategies include: • maintaining a prudent level of overall leverage and an appropriate pool of unencumbered properties that is sufficient to support our unsecured borrowings; • managing our exposure to variable-rate debt; • maintaining sufficient levels of cash and available line of credit to fund operating and investing needs on a short-term • • • basis; taking advantage of market opportunities to refinance existing debt, reduce interest costs and manage our debt maturity schedule so that a significant portion of our debt relative to our size does not mature in any one year; selling properties that have limited growth potential or are not a strategic fit within our overall portfolio and redeploying the proceeds to redevelop, renovate, retenant and/or expand our existing properties, acquire new properties or reduce debt; and utilizing the most advantageous long-term source of capital available to us to finance redevelopment and acquisition opportunities, which may include: ◦ ◦ ◦ ◦ the sale of our equity or debt securities through public offerings, including our at-the-market ("ATM") equity program in which we may from time to time offer and sell common shares including through forward sales contracts, or private placements, the incurrence of indebtedness through unsecured or secured borrowings, the issuance of units in our operating partnership (generally issued in exchange for a tax deferred contribution of property); these units typically receive the same distributions as our common shares and the holders of these units have the right to exchange their units for cash or common shares at our option, or the use of joint venture arrangements. 5 Human Capital At February 7, 2022, we had 310 full-time employees and 5 part-time employees. None of our employees are represented by a collective bargaining unit. We believe that our relationship with our employees is good. Diversity and Inclusion We are an Equal Opportunity/Affirmative action employer, and strive to maintain a workplace that is free from discrimination on the basis of race, color, religion, sex, sexual orientation, nationality, disability, or protected Veteran status. Health, Safety, and Wellness We are committed to the health, safety, and wellness of our employees, and foster an environment that allows our people to succeed while balancing work and life. We provide our employees with access to health and wellness programs, which includes benefits that support both physical and mental health. In response to the COVID-19 pandemic, we implemented significant changes that were in the best interest of our employees and to comply with government regulations. This includes implementing additional safety measures for our employees as we have transitioned to a hybrid work model. Compensation and Benefits We provide competitive pay and benefits including health, dental, vision, short and long-term disability, life insurance and a 401(k) retirement program, as well as a generous paid time off program that includes vacation, sick, and personal leave. In addition to our equity awards program, we also offer a quarterly recognition program, as well as rewarding employees with spot bonuses for stellar performance or going above and beyond the base requirements of their job description. Talent Development Employees have access to a variety of different training courses, books, book summaries and audio books, and an array of source materials covering a myriad of different business and soft skills training subjects. Additionally, we provide reimbursement for tuition and professional licensures. Community Involvement Giving back to the community is an integral part of who we are and what we do. We provide ample ways to give back through programs at our properties or charitable endeavors and volunteer opportunities that also serve as team building exercises for our employees. Tax Status We elected to be taxed as a REIT under the federal income tax laws when we filed our 1962 tax return. As a REIT, we are generally not subject to federal income tax on taxable income that we distribute to our shareholders. Under the Code, REITs are subject to numerous organizational and operational requirements, including the requirement to generally distribute at least 90% of taxable income each year. We will be subject to federal income tax on our taxable income (including, for our taxable years ending on or prior to December 31, 2017, any applicable alternative minimum tax) at regular corporate rates if we fail to qualify as a REIT for tax purposes in any taxable year, or to the extent we distribute less than 100% of our taxable income. We will also generally not qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost. Even if we qualify as a REIT for federal income tax purposes, we may be subject to certain state and local income and franchise taxes and to federal income and excise taxes on our undistributed taxable income. We have elected to treat certain of our subsidiaries as taxable REIT subsidiaries, which we refer to as a TRS. In general, a TRS may engage in any real estate business and certain non-real estate businesses, subject to certain limitations under the Code. A TRS is subject to federal and state income taxes. Our TRS activities have not been material. Impacts of COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of novel coronavirus disease ("COVID-19") as a pandemic. While we currently expect the impact to our properties is temporary in nature, the extent of the future effects of COVID-19 on our business, operating strategies, results of operations, cash flows, and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty. Refer to Item 7 for further discussion of the impacts of COVID-19 on our business. Governmental Regulations Affecting Our Properties We and our properties are subject to a variety of federal, state and local environmental, health, safety and similar laws. Please see Item 1A. "Risk Factors - Risk Factors Related to our REIT Status and Other Laws and Regulations" for further discussion of potential material effects of our compliance with government regulation, including environmental regulations and the rules governing REITs. 6 The application of these laws to a specific property that we own depends on a variety of property-specific circumstances, including the current and former uses of the property, the building materials used at the property and the physical layout of the property. Under certain environmental laws, we, as the owner or operator of properties currently or previously owned, may be required to investigate and clean up certain hazardous or toxic substances, asbestos-containing materials, or petroleum product releases at the property. We may also be held liable to a governmental entity or third parties for property damage and for investigation and clean up costs incurred in connection with the contamination, whether or not we knew of, or were responsible for, such contamination. In addition, some environmental laws create a lien on the contaminated site in favor of the government for damages and costs it incurs in connection with the contamination. As the owner or operator of real estate, we also may be liable under common law to third parties for damages and injuries resulting from environmental contamination emanating from the real estate. Such costs or liabilities could exceed the value of the affected real estate. The presence of contamination or the failure to remediate contamination may adversely affect our ability to sell or lease real estate or to borrow using the real estate as collateral. Neither existing environmental, health, safety and similar laws nor the costs of our compliance with these laws has had a material adverse effect on our financial condition or results of operations, and management does not believe they will in the future. In addition, we have not incurred, and do not expect to incur, any material costs or liabilities due to environmental contamination at properties we currently own or have owned in the past. However, we cannot predict the impact of new or changed laws or regulations on properties we currently own or may acquire in the future. We have no current plans for substantial capital expenditures with respect to compliance with environmental, health, safety and similar laws and we carry environmental insurance which covers a number of environmental risks for most of our properties. Competition Numerous commercial developers and real estate companies compete with us with respect to the leasing and the acquisition of properties. Some of these competitors may possess greater capital resources than we do, although we do not believe that any single competitor or group of competitors in any of the primary markets where our properties are located are dominant in that market. This competition may: • • • • reduce the number of properties available for acquisition; increase the cost of properties available for acquisition; interfere with our ability to attract and retain tenants, leading to increased vacancy rates and/or reduced rents; and adversely affect our ability to minimize expenses of operation. Retailers at our properties also face increasing competition from online retailers, outlet stores, discount shopping clubs, superstores, and other forms of sales and marketing of goods and services, such as direct mail. This competition could contribute to lease defaults and insolvency of tenants. Available Information Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) are available free of charge through the Investors section of our website at www.federalrealty.com as soon as reasonably practicable after we electronically file the material with, or furnish the material to, the Securities and Exchange Commission, or the SEC. Our Corporate Governance Guidelines, Code of Business Conduct, Code of Ethics applicable to our Chief Executive Officer and senior financial officers, Whistleblower Policy, organizational documents and the charters of our audit committee, compensation and human capital committee and nominating and corporate governance committee are all available in the Corporate Governance section of the Investors section of our website. Amendments to the Code of Ethics or Code of Business Conduct or waivers that apply to any of our executive officers or our senior financial officers will be disclosed in the Corporate Governance section of our website as well. ITEM 1A. RISK FACTORS This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Also, documents that we “incorporate by reference” into this Annual Report on Form 10-K, including documents that we subsequently file with the SEC will contain forward-looking statements. When we refer to forward-looking statements or information, sometimes we use words such as “may,” “will,” “could,” “should,” “plans,” “intends,” “expects,” “believes,” “estimates,” “anticipates” and “continues.” In particular, the below risk factors describe forward-looking information. The risk factors describe risks that may 7 affect these statements but are not all-inclusive, particularly with respect to possible future events. Many things can happen that can cause actual results to be different from those we describe. These factors include, but are not limited to the following: Risk Factors Related to our Real Estate Investments and Operations Revenue from our properties may be reduced or limited if the retail operations of our tenants are not successful. Revenue from our properties depends primarily on the ability of our tenants to pay the full amount of rent and other charges due under their leases on a timely basis. Some of our leases provide for the payment, in addition to base rent, of additional rent above the base amount according to a specified percentage of the gross sales generated by the tenants and generally provide for reimbursement of real estate taxes and expenses of operating the property. Economic, legal, and/or competitive conditions, as well as COVID-19, may impact the success of our tenants’ retail operations and therefore the amount of rent and expense reimbursements we receive from our tenants. Any reduction in our tenants' abilities to pay base rent, percentage rent, or other charges on a timely basis, including the closing of stores prior to the end of the lease term or the filing by any of our tenants for bankruptcy protection, will adversely affect our financial condition and results of operations. In the event of default by a tenant, we may experience delays and unexpected costs in enforcing our rights as landlord under lease terms, which may also adversely affect our financial condition and results of operations. Our net income depends on the success and continued presence of our “anchor” tenants. Our net income could be adversely affected in the event of a downturn in the business, or the bankruptcy or insolvency, of any anchor store or anchor tenant. Anchor tenants generally occupy large amounts of square footage, pay a significant portion of the total rents at a property and contribute to the success of other tenants by drawing significant numbers of customers to a property. The closing of one or more anchor stores at a property could adversely affect that property and result in lease terminations by, or reductions in rent from, other tenants whose leases may permit termination or rent reduction in those circumstances or whose own operations may suffer as a result. Over the past several years, we have seen higher levels of anchor turnover and closings in some markets, which has caused an oversupply of larger retail spaces. Therefore, tenant demand for certain of our anchor spaces may decrease and as a result, we may see an increase in vacancy and/or a decrease in rents for those spaces that could have a negative impact to our net income. As of December 31, 2021, our anchor tenant space is 96.8% leased and 94.4% occupied. A shift in retail shopping from brick and mortar stores to online shopping may have an adverse impact on our cash flow, financial condition and results of operations. Many retailers operating brick and mortar stores have made online sales a vital piece of their business. The shift to online shopping may cause declines in brick and mortar sales generated by certain of our tenants and may cause certain of our tenants to reduce the size or number of their retail locations in the future. This risk is partially mitigated by our strategy of maintaining a diverse portfolio of retail properties. The trend of retailers utilizing brick and mortar locations for ‘showroom’ and on-line sales distribution purposes (particularly at shopping centers in densely populated areas like ours) may further mitigate this risk. However, there can be no assurance that our shopping centers will not be further impacted by the shift to online shopping. As a result, our cash flow, financial condition, and results of operations could be adversely affected. We have properties that are geographically concentrated, and adverse economic or real estate market declines in these areas could have a material adverse effect on us. As of December 31, 2021, our tenants operated in 12 states and the District of Columbia. Any adverse situation that disproportionately affects the the markets where our properties are concentrated may have a magnified adverse effect on our portfolio. Refer to “Properties” (Item 2 of this Annual Report on Form 10-K) for additional discussion of the geographic concentration. Real estate markets are subject to economic downturns, as they have been in the past, and we cannot predict how economic conditions will impact this market in both the short and long term. Declines in the economy or a decline in the real estate market in these states could hurt our financial performance and the value of our properties. Factors that may negatively affect economic conditions in these states include: • • • • • • • business layoffs or downsizing; industry slowdowns; increased business restrictions due to health crises; relocations of businesses; changing demographics; increased telecommuting and use of alternative work places; infrastructure quality; 8 • • • any oversupply of, or reduced demand for, real estate; concessions or reduced rental rates under new leases for properties where tenants defaulted; and increased operating costs including insurance premiums and real estate taxes. We may be unable to collect balances due from tenants that file for bankruptcy protection. If a tenant or lease guarantor files for bankruptcy, we may not be able to collect all pre-petition amounts owed by that party. In addition, a tenant that files for bankruptcy protection may terminate our lease in which event we would have a general unsecured claim that would likely be for less than the full amount owed to us for the remainder of the lease term, which could adversely affect our financial condition and results of operations. We may experience difficulty or delay in renewing leases or re-leasing space. We derive most of our revenue directly or indirectly from rent received from our tenants. We are subject to the risks that, upon expiration or termination of leases, whether by their terms, as a result of a tenant bankruptcy, general economic conditions or otherwise, leases for space in our properties may not be renewed, space may not be re-leased, or the terms of renewal or re- lease, including the cost of required renovations or concessions to tenants, may be less favorable than current lease terms and may include decreases in rental rates. As a result, our net income could be reduced. Our development activities have inherent risks. The ground-up development of improvements on real property, as opposed to the renovation and redevelopment of existing improvements, presents substantial risks. We generally do not look to acquire raw land for future development; however, we do intend to complete the development and construction of future phases of projects we already own. We may undertake development of these and other projects on our own or bring in third parties if it is justifiable on a risk-adjusted return basis. We may also choose to delay completion of a project if market conditions do not allow an appropriate return. If conditions arise and we are not able or decide not to complete a project or if the expected cash flows of our project do not exceed the book value, an impairment of the project may be required. If additional phases of any of our existing projects or if any new projects are not successful, it may adversely affect our financial condition and results of operations. In addition to the risks associated with real estate investment in general, as described elsewhere and the specific risks above, the risks associated with our remaining development activities include: • • • • • • • • • • contractor changes may delay the completion of development projects and increase overall costs; significant time lag between commencement and stabilization subjects us to greater risks due to fluctuations in the general economy; delivery of residential product into uncertain residential environments may result in lower rents or longer time periods to reach economic stabilization; substantial amount of our investment is related to infrastructure and the overall value of the project may be negatively impacted if we do not complete subsequent phases; failure or inability to obtain construction or permanent financing on favorable terms; expenditure of money and time on projects that may never be completed; difficulty securing key anchor or other tenants may impact occupancy rates and projected revenue; inability to achieve projected rental rates or anticipated pace of lease-up; higher than estimated construction or operating costs, including labor and material costs; and possible delay in completion of a project because of a number of factors, including COVID-19, supply chain disruptions and shortages, weather, labor disruptions, construction delays or delays in receipt of zoning or other regulatory approvals, acts of terror or other acts of violence, or acts of God (such as fires, earthquakes or floods). Redevelopments and acquisitions may fail to perform as expected. Our investment strategy includes the redevelopment and acquisition of high quality, retail focused properties in densely populated areas with high average household incomes and significant barriers to adding competitive retail supply. The redevelopment and acquisition of properties entail risks that include the following, any of which could adversely affect our results of operations and our ability to meet our obligations: • • • our estimate of the costs to improve, reposition or redevelop a property may prove to be too low, or the time we estimate to complete the improvement, repositioning or redevelopment may be too short. As a result, the property may fail to achieve the returns we have projected, either temporarily or for a longer period; we may not be able to identify suitable properties to acquire or may be unable to complete the acquisition of the properties we identify; we may not be able to integrate an acquisition into our existing operations successfully; 9 • • • properties we redevelop or acquire may fail to achieve the occupancy or rental rates we project, within the time frames we project, at the time we make the decision to invest, which may result in the properties’ failure to achieve the returns we projected; our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs until after the property is acquired, which could significantly increase our total acquisition costs or decrease cash flow from the property; and our investigation of a property or building prior to our acquisition, and any representations we may receive from the seller of such building or property, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition cost. Our performance and value are subject to general risks associated with the real estate industry. Our economic performance and the value of our real estate assets, and consequently, the value of our investments, are subject to the risk that if our properties do not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay distributions to our shareholders will be adversely affected. As a real estate company, we are susceptible to the following real estate industry risks: • • • • • • • • economic downturns in general, or in the areas where our properties are located; adverse changes in local real estate market conditions, such as an oversupply or reduction in demand; changes in tenant preferences that reduce the attractiveness of our properties to tenants; zoning or regulatory restrictions; decreases in market rental rates; weather conditions that may increase or decrease energy costs and other weather-related expenses; costs associated with the need to periodically repair, renovate and re-lease space; and increases in the cost of adequate maintenance, insurance and other operating costs, including real estate taxes, associated with one or more properties, which may occur even when circumstances such as market factors and competition cause a reduction in revenues from one or more properties, although real estate taxes typically do not increase upon a reduction in such revenues. Each of these risks could result in decreases in market rental rates and increases in vacancy rates, which could adversely affect our financial condition and results of operation. Many real estate costs are fixed, even if income from our properties decreases. Our financial results depend primarily on leasing space in our properties to tenants on terms favorable to us. Costs associated with real estate investment, such as real estate taxes, insurance and maintenance costs, generally are not reduced even when a property is not fully occupied, rental rates decrease, or other circumstances cause a reduction in income from the property. As a result, cash flow from the operations of our properties may be reduced if a tenant does not pay its rent or we are unable to rent our properties on favorable terms. Under those circumstances, we might not be able to enforce our rights as landlord without delays and may incur substantial legal costs. Additionally, new properties that we may acquire or redevelop may not produce any significant revenue immediately, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with such new properties until they are fully occupied. Competition may limit our ability to purchase new properties and generate sufficient income from tenants. Numerous commercial developers and real estate companies compete with us in seeking tenants for our existing properties and properties for acquisition. This competition may: • • • • • • reduce properties available for acquisition; increase the cost of properties available for acquisition; reduce rents payable to us; interfere with our ability to attract and retain tenants; lead to increased vacancy rates at our properties; and adversely affect our ability to minimize expenses of operation. Retailers at our properties also face increasing competition from online retailers, outlet stores, discount shopping clubs and other forms of sales and marketing of goods, such as direct mail. This competition could contribute to lease defaults and insolvency of tenants. If we are unable to continue to attract appropriate retail tenants to our properties, or to purchase new properties in our geographic markets, it could materially affect our ability to generate net income, service our debt and make distributions to our shareholders. 10 We may be unable to sell properties when appropriate because real estate investments are illiquid. Real estate investments generally cannot be sold quickly. In addition, there are some limitations under federal income tax laws applicable to real estate and to REITs in particular that may limit our ability to sell our assets. We may not be able to alter our portfolio promptly in response to changes in economic or other conditions including being unable to sell a property at a return we believe is appropriate due to the economic environment. Our inability to respond quickly to adverse changes in the performance of our investments could have an adverse effect on our ability to meet our obligations and make distributions to our shareholders. We may have limited flexibility in dealing with our jointly owned investments. Our organizational documents do not limit the amount of funds that we may invest in properties and assets owned jointly with other persons or entities. As of December 31, 2021, we held 19 predominantly retail real estate projects jointly with other persons in addition to properties owned in a “downREIT” structure. Additionally, as of December 31, 2021, we owned an interest in the hotel component of Assembly Row. We may make additional joint investments in the future. Our existing and future joint investments may subject us to special risks, including the possibility that our partners or co-investors might become bankrupt, that those partners or co-investors might have economic or other business interests or goals which are unlike or incompatible with our business interests or goals, that those partners or co-investors might be in a position to take action contrary to our suggestions or instructions, or in opposition to our policies or objectives, and that disputes may develop with our joint venture partners over decisions affecting the property or the joint venture, which may result in litigation or arbitration or some other form of dispute resolution. Although as of December 31, 2021, we held the controlling interests in all of our existing co-investments (except the hotel investment discussed above and the investment in the La Alameda shopping center acquired in 2017), we generally must obtain the consent of the co-investor or meet defined criteria to sell or to finance these properties. Joint ownership gives a third party the opportunity to influence the return we can achieve on some of our investments and may adversely affect our ability to make distributions to our shareholders. We may also be liable for the actions of our co-investors. Our insurance coverage on our properties may be inadequate. We currently carry comprehensive insurance on all of our properties, including insurance for liability, fire, flood, earthquake, environmental matters, rental loss and acts of terrorism. All of these policies contain coverage limitations. We believe these coverages are of the types and amounts customarily obtained for or by an owner of similar types of real property assets located in the areas where our properties are located. We intend to obtain similar insurance coverage on subsequently acquired properties. The availability of insurance coverage may decrease and the prices for insurance may increase as a consequence of significant losses incurred by the insurance industry and other factors outside our control. As a result, we may be unable to renew or duplicate our current insurance coverage in adequate amounts or at reasonable prices. In addition, insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts, pandemics, and toxic mold, or, if offered, the expense of obtaining these types of insurance may not be justified. We therefore may cease to have insurance coverage against certain types of losses and/or there may be decreases in the limits of insurance available. If an uninsured loss or a loss in excess of our insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property, but still remain obligated for any mortgage debt or other financial obligations related to the property. We cannot guarantee that material losses in excess of insurance proceeds will not occur in the future. If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Also, due to inflation, changes in codes and ordinances, environmental considerations and other factors, it may not be feasible to use insurance proceeds to replace a building after it has been damaged or destroyed. Further, we may be unable to collect insurance proceeds if our insurers are unable to pay or contest a claim. Events such as these could adversely affect our results of operations and our ability to meet our obligations, including distributions to our shareholders. Natural disasters, climate change and health crises, including the COVID-19 pandemic, could have an adverse impact on our cash flow and operating results. Climate change may add to the unpredictability and frequency of natural disasters and severe weather conditions and create additional uncertainty as to future trends and exposures. Certain of our operations are located in areas that are subject to natural disasters and severe weather conditions such as hurricanes, earthquakes, droughts, snow storms, floods and fires. The impact of climate change or the occurrence of natural disasters can delay new development projects, increase investment costs to repair or replace damaged properties, increase operating costs, create additional investment costs to make improvements to existing properties to comply with climate change regulations, increase future property insurance costs, and negatively impact the tenant demand for space. If insurance is unavailable to us or is unavailable on acceptable terms, or if our insurance is not adequate to cover business interruption or losses from these events, our earnings, liquidity or capital resources could be adversely affected. 11 In addition, our business is subject to risks related to the effects of public health crises, epidemics and pandemics, including the COVID-19 pandemic. Such events could: • • • • • • • • • • • • inhibit global, national and local economic activity; drive inflation, adversely affect trading activity in securities markets, which could negatively impact the trading prices of our common shares and debt securities and our ability to access the securities markets as a source of liquidity; adversely affect our tenants’ financial condition by limiting foot traffic and staffing at their businesses, which could affect their ability to pay rent and willingness to make new leasing commitments; reduce our cash flow, which could impact our ability to pay dividends at the current rate and in the current format or at all or to service our debt; temporarily or permanently reduce the demand for retail or office space; interfere with our business operations by requiring our personnel to work remotely; increase the frequency of cyber-attacks; disrupt supply chains that could be important in our development and redevelopment activities; result in labor shortages; interfere with potential purchases and sales of properties; impact our ability to pay dividends at the current rate and in the current format or at all; and have other direct and indirect effects that are difficult to predict. Such risks depend upon the nature and severity of the public health concern, as well as the extent and duration of government- mandated orders and personal decisions to limit travel, economic activity and personal interaction, none of which can be predicted with confidence. In particular, we cannot predict the impact of stay-at-home and other government orders instituted in response to the COVID-19 pandemic, which vary by jurisdiction, or the pandemics' short and long term economic effects, each of which could have a material adverse effect on our business. An increased focus on metrics and reporting related to corporate responsibility, specifically related to environmental, social and governance ("ESG") factors, may impose additional costs and expose us to new risks. Investors and other stakeholders have become more focused on understanding how companies address a variety of ESG factors. Many of those investors and shareholders look to ESG rating systems that have been developed by third party groups to allow comparisons between companies on ESG factors as they evaluate investment decisions as well as to company disclosures. Although we participate in many of these ratings systems and generally score relatively well in those in which we do participate, we do not participate in, and would not necessarily score well in, all of the available ratings systems. Further, the criteria used in these ratings systems change frequently, and we cannot guaranty that we will be able to score well as criteria change. We supplement our participation in ratings systems with corporate disclosures of our ESG activities but many investors and stakeholders may look for specific disclosures that we do not provide. Failure to participate in certain of the third party ratings systems, failure to score well in those ratings systems or failure to provide certain ESG disclosures could result in reputational harm when investors or others compare us against similar companies in our industry and could cause certain investors to be unwilling to invest in our stock which could adversely impact our ability to raise capital. For more information about the Trust's Corporate Responsibility initiatives, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Corporate Responsibility." Risk Factors Related to our Funding Strategies and Capital Structure The amount of debt we have and the restrictions imposed by that debt could adversely affect our business and financial condition. As of December 31, 2021, we had approximately $4.1 billion of debt outstanding. Of that outstanding debt, approximately $341.6 million was secured by all or a portion of 7 of our real estate projects. As of December 31, 2021, approximately 92.6% of our debt is fixed rate or is fixed via interest rate swap agreements, which includes all of our property secured debt and our unsecured senior notes. Our organizational documents do not limit the level or amount of debt that we may incur. The amount of our debt outstanding from time to time could have important consequences to our shareholders. For example, it could: • require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, property acquisitions, redevelopments and other appropriate business opportunities that may arise in the future; limit our ability to make distributions on our outstanding common shares and preferred shares; • • make it difficult to satisfy our debt service requirements; • require us to dedicate increased amounts of our cash flow from operations to payments on debt upon refinancing or on our variable rate, unhedged debt, if interest rates rise; 12 • • • limit our flexibility in planning for, or reacting to, changes in our business and the factors that affect the profitability of our business; limit our ability to obtain any additional debt or equity financing we may need in the future for working capital, debt refinancing, capital expenditures, acquisitions, redevelopments or other general corporate purposes or to obtain such financing on favorable terms; and/or limit our flexibility in conducting our business, which may place us at a disadvantage compared to competitors with less debt or debt with less restrictive terms. Our ability to make scheduled principal payments of, to pay interest on, or to refinance our indebtedness will depend primarily on our future performance, which to a certain extent is subject to economic, financial, competitive and other factors beyond our control. There can be no assurance that our business will continue to generate sufficient cash flow from operations in the future to service our debt or meet our other cash needs. If we are unable to generate this cash flow from our business, we may be required to refinance all or a portion of our existing debt, sell assets or obtain additional financing to meet our debt obligations and other cash needs, including the payment of dividends required to maintain our status as a real estate investment trust. We cannot assure you that any such refinancing, sale of assets or additional financing would be possible on terms that we would find acceptable. We are obligated to comply with financial and other covenants pursuant to our debt obligations that could restrict our operating activities, and the failure to comply with such covenants could result in defaults that accelerate payment under our debt agreements. Our revolving credit facility, unsecured term loan, and certain series of notes include financial covenants that may limit our operating activities in the future. We are also required to comply with additional covenants that include, among other things, provisions: • • • • • • relating to the maintenance of property securing a mortgage; restricting our ability to pledge assets or create liens; restricting our ability to incur additional debt; restricting our ability to amend or modify existing leases at properties securing a mortgage; restricting our ability to enter into transactions with affiliates; and restricting our ability to consolidate, merge or sell all or substantially all of our assets. As of December 31, 2021, we were in compliance with all of our default related financial covenants. If we were to breach any of our default related debt covenants, including the covenants listed above, and did not cure the breach within any applicable cure period, our lenders could require us to repay the debt immediately, and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Many of our debt arrangements, including our public notes and our revolving credit facility, are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a default under certain of our other debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares. Adverse changes in our credit rating could affect our borrowing capacity and borrowing terms. Our credit worthiness is rated by nationally recognized credit rating agencies. The credit ratings assigned are based on our operating performance, liquidity and leverage ratios, financial condition and prospects, and other factors viewed by the credit rating agencies as relevant to our industry and the economic outlook in general. Our credit rating can affect the amount of capital we access, as well as the terms of certain existing and future financing we obtain. Since we depend on debt financing to fund the growth of our business, an adverse change in our credit rating, including actual changes in outlook, or even the initiation of review of our credit rating that could result in an adverse change, could have a material adverse effect on us. Our ability to grow will be limited if we cannot obtain additional capital. Our growth strategy is focused on the development and redevelopment of properties we already own and the acquisition of additional properties. We believe that it will be difficult to fund our expected growth with cash from operating activities because, in addition to other requirements, we are generally required to distribute to our shareholders at least 90% of our taxable income each year to continue to qualify as a REIT for federal income tax purposes. As a result, we must rely primarily upon the availability of debt or equity capital, which may or may not be available on favorable terms or at all. Debt could include the sale of debt securities and mortgage loans from third parties. If economic conditions and conditions in the capital markets are not favorable at the time we need to raise capital, we may need to obtain capital on less favorable terms. Additionally, we cannot guarantee that additional financing, refinancing or other capital will be available in the amounts we desire or on favorable terms. Our access to debt or equity capital depends on a number of factors, including the market’s 13 perception of our growth potential and risk profile, our ability to pay dividends, and our current and potential future earnings. Depending on the outcome of these factors as well as the impact of the economic environment, we could experience delay or difficulty in implementing our growth strategy on satisfactory terms, or be unable to implement this strategy. Rising interest rates could adversely affect our cash flow and the market price of our outstanding debt and preferred shares. Of our $4.1 billion of debt outstanding as of December 31, 2021, approximately $356.5 million bears interest at a variable rate, of which, $300.0 million is our unsecured term loan that bears interest at a variable rate of LIBOR plus 80 basis points and $56.5 million in mortgages payable that bear interest at a variable rate of LIBOR plus 195 basis points and are effectively fixed through two interest rate swap agreements. We also have a $1.0 billion revolving credit facility, on which no balance was outstanding at December 31, 2021, that bears interest at LIBOR plus 77.5 basis points. We may borrow additional funds at variable interest rates in the future. Increases in interest rates would increase the interest expense on our variable rate debt and reduce our cash flow, which could adversely affect our ability to service our debt and meet our other obligations and also could reduce the amount we are able to distribute to our shareholders. We may enter into additional hedging arrangements or other transactions for all or a portion of our variable rate debt to limit our exposure to rising interest rates. However, the amounts we are required to pay under variable rate debt to which hedging or similar arrangements relate may increase in the event of non- performance by the counterparties to any such hedging arrangements. In addition, an increase in market interest rates may lead purchasers of our debt securities and preferred shares to demand a higher annual yield, which could adversely affect the market price of our outstanding debt securities and preferred shares and the cost and/or timing of refinancing or issuing additional debt securities or preferred shares. The phase-out of LIBOR could affect interest rates under our variable rate debt and interest rate swap arrangements. LIBOR is used as a reference rate for our revolving credit facility, certain mortgage payables, and in our interest rate swap arrangements. On July 27, 2017, the United Kingdom's Financial Conduct Authority announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. On November 30, 2020, the ICE Benchmark Administration Limited announced its plan to extend the date that most U.S. LIBOR values would cease being computed and published from December 31, 2021 to June 30, 2023. The Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative to U.S. dollar LIBOR in derivatives and other financial contracts. At this time, we can not predict the effect of any discontinuance, modification or other reforms to LIBOR, or if SOFR, or another alternative rate reference rate, attains market traction as a LIBOR replacement. As LIBOR phases out and ceases to exist, we will need to agree upon a benchmark replacement index with the bank, and as such the interest rate on our revolving credit facility and certain mortgage payables may change. The new rate may not be as favorable as those in effect prior to any LIBOR phase-out. Furthermore, the transition process may result in delays in funding, higher interest expense, additional expenses, and increased volatility in markets for instruments that currently rely on LIBOR, all of which could negatively impact our cash flow. Risk Factors Related to our REIT Status and Other Laws and Regulations Environmental laws and regulations could reduce the value or profitability of our properties. All real property and the operations conducted on real property are subject to federal, state and local laws, ordinances and regulations relating to hazardous materials, environmental protection and human health and safety. Under various federal, state and local laws, ordinances and regulations, we and our tenants may be responsible for the disposal or treatment of hazardous or toxic substances released on or in properties we own or operate, as well as certain other potential costs relating to hazardous or toxic substances (including governmental fines and injuries to persons and property). This liability may be imposed whether or not we knew about, or were responsible for, the presence of hazardous or toxic substances. Further, the presence of contamination on our properties or the failure to properly remediate contamination at any of our properties may adversely affect our ability to sell or lease those properties or to borrow funds by using those properties as collateral. The costs or liabilities could exceed the value of the affected real estate. We are not aware of any environmental condition with respect to any of our properties that management believes would have a material adverse effect on our business, assets or results of operations taken as a whole. In addition, changes in government legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties and could also require us to spend more on our development or redevelopment projects without a corresponding increase in revenues, which may adversely affect our financial condition, results of operations and cash flows. 14 The Americans with Disabilities Act of 1990 could require us to take remedial steps with respect to existing or newly acquired properties. Our existing properties, as well as properties we may acquire, as commercial facilities, are required to comply with Title III of the Americans with Disabilities Act of 1990. Investigation of a property may reveal non-compliance with this Act. The requirements of this Act, or of other federal, state or local laws or regulations, also may change in the future and restrict further renovations of our properties with respect to access for disabled persons. Future compliance with this Act may require expensive changes to the properties. The revenues generated by our tenants could be negatively affected by various federal, state and local laws to which they are subject. We and our tenants are subject to a wide range of federal, state and local laws and regulations, such as local licensing requirements, consumer protection laws and state and local fire, life-safety and similar requirements that affect the use of the properties. The leases typically require that each tenant comply with all laws and regulations. Failure to comply could result in fines by governmental authorities, awards of damages to private litigants, or restrictions on the ability to conduct business on such properties. Non-compliance of this sort could reduce our revenues from a tenant, could require us to pay penalties or fines relating to any non-compliance, and could adversely affect our ability to sell or lease a property. Failure to qualify as a REIT for federal income tax purposes would cause the Parent Company to be taxed as a corporation, which would substantially reduce funds available for payment of distributions. We believe that we are organized and qualified as a REIT for federal income tax purposes and currently intend to operate in a manner that will allow us to continue to qualify as a REIT under the Code. However, we cannot assure you that we will remain qualified as such in the future. Qualification as a REIT involves the application of highly technical and complex Code provisions and applicable income tax regulations that have been issued under the Code. Certain facts and circumstances not entirely within our control may affect our ability to qualify as a REIT. For example, in order to qualify as a REIT, at least 95% of our gross income in any year must be derived from qualifying rents and certain other income. Satisfying this requirement could be difficult, for example, if defaults by tenants were to reduce the amount of income from qualifying rents. As a REIT, we must generally make annual distributions to shareholders of at least 90% of our taxable income. In addition, new legislation, new regulations, new administrative interpretations or new court decisions may significantly change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification. Any modification in the tax treatment of REITs could have a significant adverse impact to our net income. If we fail to qualify as a REIT: • • • • • we would not be allowed a deduction for distributions to shareholders in computing taxable income; we would be subject to federal income tax at regular corporate rates; unless we are entitled to relief under specific statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified; we could be required to pay significant income taxes, which would substantially reduce the funds available for investment or for distribution to our shareholders for each year in which we failed or were not permitted to qualify; and we would no longer be required by law to make any distributions to our shareholders. To maintain our status as a REIT, we limit the amount of shares any one shareholder of the Parent Company can own. The Code imposes certain limitations on the ownership of the stock of a REIT. For example, not more than 50% in value of our outstanding shares of capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code) during the last half of any taxable year. To protect our REIT status, the Parent Company's declaration of trust prohibits any one shareholder from owning (actually or constructively) more than 9.8% in value of the outstanding common shares or of any class or series of outstanding preferred shares. The constructive ownership rules are complex. Shares of the Parent Company's capital stock owned, actually or constructively, by a group of related individuals and/or entities may be treated as constructively owned by one of those individuals or entities. As a result, the acquisition of less than 9.8% in value of the outstanding common shares and/or a class or series of preferred shares (or the acquisition of an interest in an entity that owns common shares or preferred shares) by an individual or entity could cause that individual or entity (or another) to own constructively more than 9.8% in value of the outstanding capital stock. If that happened, either the transfer of ownership would be void or the shares would be transferred to a charitable trust and then sold to someone who can own those shares without violating the 9.8% ownership limit. The Board of Trustees may waive these restrictions on a case-by-case basis. In addition, the Board of Trustees and two-thirds of our shareholders eligible to vote at a shareholder meeting may remove these restrictions if they determine it is no longer in our 15 best interests for the Parent Company to attempt to qualify, or to continue to qualify, as a REIT. The 9.8% ownership restrictions may delay, defer or prevent a transaction or a change of our control that might involve a premium price for the common shares or otherwise be in the shareholders’ best interest. Legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the IRS, could have a material adverse effect on us and our investors. The rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process, and by the Internal Revenue Service (“IRS”) and the U.S. Department of the Treasury (“Treasury”). Changes to the tax laws or interpretations thereof by the IRS and the Treasury, with or without retroactive application, could materially and adversely affect us and our investors. In particular, additional technical corrections legislation and implementing regulations may be enacted or promulgated in response to the Tax Cuts and Job Acts of 2017 (the "Act"), and substantive legislative changes to the Act are also possible. In response to the COVID-19 pandemic, multiple pieces of legislation have already been enacted, including the 2020 CARES Act, and there have also been significant issuances of regulatory and other guidance, and further legislative enactments and other IRS or Treasury action is possible. No prediction can be made as to the likelihood of passage of new tax legislation or other provisions, or the direct or indirect effect on us and our shareholders. Accordingly, such new legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify to be taxed as a REIT and/or the U.S. federal income tax consequences to us and our investors of such qualification. Certain tax and anti-takeover provisions of the Parent Company's declaration of trust and bylaws, and certain restrictions in the Partnership's limited partnership agreement, may inhibit a change of our control. Certain provisions contained in the Parent Company's declaration of trust and bylaws and the Maryland General Corporation Law, as applicable to Maryland REITs, may discourage a third party from making a tender offer or acquisition proposal to us. If this were to happen, it could delay, deter or prevent a change in control or the removal of existing management. These provisions also may delay or prevent the shareholders from receiving a premium for their common shares over then-prevailing market prices. These provisions include: • • • • • • the REIT ownership limit described above; authorization of the issuance of our preferred shares with powers, preferences or rights to be determined by the Board of Trustees; special meetings of our shareholders may be called only by the chairman of the board, the chief executive officer, the president, by one-third of the trustees or by shareholders possessing no less than 25% of all the votes entitled to be cast at the meeting; the Board of Trustees, without a shareholder vote, can classify or reclassify unissued shares of beneficial interest, including the reclassification of common shares into preferred shares and vice-versa; a two-thirds shareholder vote is required to approve some amendments to the declaration of trust; and advance-notice requirements for proposals to be presented at shareholder meetings. In addition, if we elect to be governed by it in the future, the Maryland Control Share Acquisition Law could delay or prevent a change in control. Under Maryland law, unless a REIT elects not to be subject to this law, “control shares” acquired in a “control share acquisition” have no voting rights except to the extent approved by shareholders by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares owned by the acquirer and by officers or trustees who are employees of the REIT. “Control shares” are voting shares that would entitle the acquirer to exercise voting power in electing trustees within specified ranges of voting power. A “control share acquisition” means the acquisition of control shares, with some exceptions. The Parent Company's bylaws state that the Maryland control share acquisition law will not apply to any acquisition by any person of our common shares. This bylaw provision may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares, by a vote of a majority of the shareholders entitled to vote, and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition. In addition, certain provisions in the Partnership’s limited partnership agreement (the “Partnership Agreement”) may delay or make more difficult unsolicited acquisitions of us or changes in our control. These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some shareholders might consider such proposals, if made, desirable. These provisions also make it more difficult for third parties to alter the management structure of the Partnership without the concurrence of our Board of Trustees. These provisions include, among others: • • • redemption rights of limited partners and certain assignees of units of limited partnership interest ("OP Units"); transfer restrictions on OP Units and restrictions on admissions of partners; a requirement that the General Partner may not be removed as the general partner of the Partnership without its consent; 16 • • the ability of the General Partner to issue preferred partnership interests in the Partnership with terms that it may determine, without the approval or consent of any Limited Partner; and restrictions on the ability of the General Partner, the Partnership or the Parent Company to transfer its interests in the Partnership or otherwise engage in certain extraordinary transactions, including, among others, certain mergers, business combinations, sales of all or substantially all of their assets and recapitalizations. We may be required to incur additional debt to qualify as a REIT. As a REIT, we must generally make annual distributions to shareholders of at least 90% of our taxable income. We are subject to income tax on amounts of undistributed taxable income and net capital gain. In addition, we would be subject to a 4% excise tax if we fail to distribute sufficient income to meet a minimum distribution test based on our ordinary income, capital gain and aggregate undistributed income from prior years. We intend to make distributions to shareholders to comply with the Code’s distribution provisions and to avoid federal income and excise tax. We may need to borrow funds to meet our distribution requirements because: • • our income may not be matched by our related expenses at the time the income is considered received for purposes of determining taxable income; and non-deductible capital expenditures, creation of reserves, or debt service requirements may reduce available cash but not taxable income. In these circumstances, we might have to borrow funds on terms we might otherwise find unfavorable and we may have to borrow funds even if our management believes the market conditions make borrowing financially unattractive. Current tax law also allows us to pay a portion of our distributions in shares instead of cash. General Risk Factors The market value of our debt and equity securities is subject to various factors that may cause significant fluctuations or volatility. As with other publicly traded securities, the market price of our debt and equity securities depends on various factors, which may change from time to time and/or may be unrelated to our financial condition, operating performance or prospects that may cause significant fluctuations or volatility in such prices. These factors include, among others: general economic and financial market conditions; level and trend of interest rates; our ability to access the capital markets to raise additional capital; the issuance of additional equity or debt securities; changes in our funds from operations (“FFO”) or earnings estimates; changes in our credit or analyst ratings; our financial condition and performance; • • • • • • • • market perception of our business compared to other REITs; and • market perception of REITs, in general, compared to other investment alternatives. We cannot assure you we will continue to pay dividends in the current composition or at historical rates. Our ability to continue to pay dividends on our common shares at historical rates or to increase our common share dividend rate, and our ability to pay preferred share dividends and service our debt securities, will depend on a number of factors, including, among others, the following: • • • • our financial condition and results of future operations; the performance by our tenants under their contractual lease agreements; the terms of our loan covenants; and our ability to acquire, finance, develop or redevelop and lease additional properties at attractive rates. If we do not maintain or increase, or if we change the composition of the dividend on our common shares, it could have an adverse effect on the market price of our common shares and other securities. Any preferred shares we may offer in the future may have a fixed dividend rate that would not increase with any increases in the dividend rate of our common shares. Conversely, payment of dividends on our common shares may be subject to payment in full of the dividends on any preferred shares and payment of interest on any debt securities we may offer. 17 The Parent Company is a holding company with no direct operations, and it will rely on funds received from the Partnership to pay its obligations and make distributions to its shareholders. The Parent Company is a holding company and expects to conduct substantially all of its operations through the Partnership. The Parent Company will not have, apart from an interest in the Partnership, any independent operations. As a result, the Parent Company will rely on distributions from the Partnership to make any distributions we declare on our common shares. The Parent Company will also rely on distributions from the Partnership to meet its obligations, including any tax liability on taxable income allocated to the Parent Company from the Partnership. Through its ownership and control of the General Partner, the Parent Company exercises exclusive control over the Partnership, including the authority to cause the Partnership to make distributions, subject to certain limited approval and voting rights of the Partnership’s Limited Partners as described in the Partnership Agreement. In addition, because the Parent Company is a holding company, your claims as shareholders are structurally subordinated to all existing and future liabilities and obligations to preferred equity holders of the Partnership and its subsidiaries. Therefore, in the event of a bankruptcy, insolvency, liquidation or reorganization of the Partnership or its subsidiaries, assets of the Partnership or the applicable subsidiary will be available to satisfy any claims of our shareholders only after such liabilities and obligations have been satisfied in full. We currently own 100% of the OP Units issued by the Partnership and are its sole Limited Partner. However, in connection with our future acquisition activities or otherwise, we may issue additional OP Units to third parties and admit additional Limited Partners. Such issuances would reduce the Parent Company’s percentage ownership in the Partnership. Loss of our key management could adversely affect performance and the value of our common shares. We are dependent on the efforts of our key management. Although we believe qualified replacements could be found for any departures of key executives, the loss of their services could adversely affect our performance and the value of our common shares. We may adjust our business policies without shareholder approval. We may modify our approach to investment, financing, borrowing, and other operating strategies without shareholder approval. A change in the approach to any of these items could adversely affect our financial condition and results of operations, and the market price of our securities. Our current business plan focuses on our investment in high quality retail based properties that are typically neighborhood and community shopping centers or mixed-use properties, principally through redevelopments and acquisitions. If this business plan is not successful, it could have a material adverse effect on our financial condition and results of operations. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this Annual Report on Form 10-K. Except as may be required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events or otherwise. You should carefully review the above risks and the risk factors. We face risks relating to cyber attacks that could cause loss of confidential information and other business disruptions. We rely extensively on information technology systems to process transactions and manage our business, and our business is at risk from and may be impacted by cyber attacks. These could include attempts to gain unauthorized access to our data and computer systems as well as attacks on third party's information technology systems that we rely on to provide important information technology services relating to key business functions, such as payroll. Attacks can be both individual and/or highly organized attempts by very sophisticated hacking organizations. We employ a number of measures to prevent, detect and mitigate these threats, which include password encryption, multi-factor authentication, frequent password change events, firewall detection systems, anti-virus software in-place, frequent backups, a redundant data system for core applications and penetration testing; however, there is no guarantee such efforts will be successful in preventing a cyber attack. A cyber attack could compromise the confidential information of our employees, tenants and vendors. A successful attack could disrupt and otherwise adversely affect our business operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 18 ITEM 2. PROPERTIES General As of December 31, 2021, we owned or had a majority ownership interest in community and neighborhood shopping centers and mixed-used properties which are operated as 104 predominantly retail real estate projects comprising approximately 25.1 million square feet. These properties are located primarily in densely populated and affluent communities in strategic metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, California, and South Florida. No single commercial or residential property accounted for over 10% of our 2021 total revenue. We believe that our properties are adequately covered by commercial general liability, fire, flood, earthquake, terrorism and business interruption insurance provided by reputable companies, with commercially reasonable exclusions, deductibles and limits. Tenant Diversification As of December 31, 2021, we had approximately 3,100 commercial leases and 3,000 residential leases, with tenants ranging from sole proprietors to major national and international retailers. No one tenant or affiliated group of tenants accounted for more than 2.7% of our annualized base rent as of December 31, 2021. As a result of our tenant diversification, we believe our exposure to any one bankruptcy filing has not been and will not be significant, however, multiple filings by a number of tenants could have a significant impact. Geographic Diversification Our 104 real estate projects are located in 12 states and the District of Columbia. The following table shows the number of projects, the gross leasable area (“GLA”) of commercial space and the percentage of total portfolio gross leasable area of commercial space in each state as of December 31, 2021. State California Maryland Virginia Pennsylvania Massachusetts New Jersey New York Florida Illinois Arizona Connecticut Michigan District of Columbia Total Number of Projects 21 20 18 10 7 7 7 3 4 2 3 1 1 104 Gross Leasable Area (In square feet) 6,452,000 4,488,000 3,693,000 2,090,000 2,067,000 1,892,000 1,331,000 862,000 799,000 736,000 358,000 215,000 119,000 25,102,000 Percentage of Gross Leasable Area 25.7 % 17.9 % 14.7 % 8.3 % 8.3 % 7.5 % 5.3 % 3.4 % 3.2 % 2.9 % 1.4 % 0.9 % 0.5 % 100.0 % Leases, Lease Terms and Lease Expirations Our leases are classified as operating leases and typically are structured to require the monthly payment of minimum rents in advance, subject to periodic increases during the term of the lease, percentage rents based on the level of sales achieved by tenants, and reimbursement of a majority of on-site operating expenses and real estate taxes. These features in our leases generally reduce our exposure to higher costs and allow us to participate in improved tenant sales. Commercial property leases generally range from three to ten years; however, certain leases, primarily with anchor tenants, may be longer. Many of our leases contain tenant options that enable the tenant to extend the term of the lease at expiration at pre- established rental rates that often include fixed rent increases, consumer price index adjustments or other market rate adjustments from the prior base rent. Leases on residential units are generally for a period of one year or less and, in 2021, represented approximately 9.1% of total rental income. 19 The following table sets forth the schedule of lease expirations for our commercial leases in place as of December 31, 2021 for each of the 10 years beginning with 2022 and after 2031 in the aggregate assuming that none of the tenants exercise future renewal options. Annualized base rents reflect in-place contractual rents as of December 31, 2021. Year of Lease Expiration 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Thereafter Total Leased Square Footage Expiring 1,807,000 2,492,000 3,441,000 3,121,000 2,045,000 2,258,000 1,526,000 1,483,000 1,097,000 768,000 2,819,000 22,857,000 Percentage of Leased Square Footage Expiring Annualized Base Rent Represented by Expiring Leases 50,983,000 8 % $ 74,952,000 11 % 90,401,000 15 % 81,484,000 14 % 67,047,000 9 % 75,497,000 10 % 45,807,000 7 % 49,632,000 6 % 28,530,000 5 % 28,704,000 3 % 12 % 85,630,000 100 % $ 678,667,000 Percentage of Annualized Base Rent Represented by Expiring Leases 8 % 11 % 13 % 12 % 10 % 11 % 7 % 7 % 4 % 4 % 13 % 100 % During 2021, we signed leases for a total of 2,193,000 square feet of retail space including 2,093,000 square feet of comparable space leases (leases for which there was a prior tenant) at an average rental increase of 7% on a cash basis. New leases for comparable spaces were signed for 1,144,000 square feet at an average rental increase of 10% on a cash basis. Renewals for comparable spaces were signed for 949,000 square feet at an average rental increase of 3% on a cash basis. Tenant improvements and incentives for comparable spaces were $37.57 per square foot, of which, $65.92 per square foot was for new leases and $3.41 per square foot was for renewals in 2021. During 2020, we signed leases for a total of 1,756,000 square feet of retail space including 1,666,000 square feet of comparable space leases (leases for which there was a prior tenant) at an average rental increase of 3% on a cash basis. New leases for comparable spaces were signed for 595,000 square feet at an average rental increase of 4% on a cash basis. Renewals for comparable spaces were signed for 1,071,000 square feet at an average rental increase of 2% on a cash basis. Tenant improvements and incentives for comparable spaces were $31.49 per square foot, of which, $84.12 per square foot was for new leases and $2.25 per square foot was for renewals in 2020. The rental increases associated with comparable spaces generally include all leases signed for retail space in arms-length transactions reflecting market leverage between landlords and tenants during the period. The comparison between the rent for expiring leases and new leases is determined by including contractual rent on the expiring lease, including percentage rent, and the comparable annual rent and in some instances, projections of percentage rent, to be paid on the new lease. In atypical circumstances, management may exercise judgment as to how to most effectively reflect the comparability of rents reported in this calculation. As a result of accommodations made to certain tenants to help them to stay open during and after the COVID-19 pandemic, we have found it necessary to exercise more judgement in 2020 and 2021 than in prior years in order to appropriately reflect the comparability of rents in the calculation. The change in rental income on comparable space leases is impacted by numerous factors including current market rates, location, individual tenant creditworthiness, use of space, market conditions when the expiring lease was signed, capital investment made in the space and the specific lease structure. Rent abatement and short term rent restructuring agreements that are a result of COVID-19 impacts are not included in this calculation. Tenant improvements and incentives include the total dollars committed for the improvement (fit out) of a space as it relates to a specific lease. Incentives include amounts paid to tenants as an inducement to sign a lease that do not represent building improvements. Costs related to tenant improvements require judgement by management in determining what are costs specific to the tenant and not deferred maintenance on the space. Historically, we have executed comparable space leases for 1.4 to 1.9 million square feet of retail space each year. We expect some rental rates to be negatively impacted by the COVID-19 pandemic, which we started experiencing in the second quarter of 2020. We expect the volume for 2022 will be in line with, or potentially exceed, our historical averages given a larger amount of vacancy as a result of COVID-19. Although we expect overall positive increases in annual rent for comparable spaces, changes in annual rent for any individual lease or combinations of individual leases reported in any particular period may be positive or negative and we can provide no assurance that the annual rents on comparable space leases will continue to increase at historical levels, if at all. 20 The leases signed in 2021 generally become effective over the following two years though some may not become effective until 2024 and beyond. Further, there is risk that some new tenants will not ultimately take possession of their space and that tenants for both new and renewal leases may not pay all of their contractual rent due to operating, financing or other matters. However, our historical increases in rental rates do provide information about the tenant/landlord relationship and the potential increase we may achieve in rental income over time. 21 Retail and Residential Properties The following table sets forth information concerning all real estate projects in which we owned an equity interest, had a leasehold interest, or otherwise controlled and are consolidated as of December 31, 2021. Except as otherwise noted, we are the sole owner of our real estate projects. Principal tenants are the largest tenants in the project based on square feet leased or are tenants important to a project’s success due to their ability to attract retail customers. Year Completed Year Acquired Square Feet(1) / Apartment Units Average Base Rent Per Square Foot(2) Percentage Leased(3) Principal Tenant(s) Property, City, State, Zip Code Arizona Camelback Colonnade Phoenix, AZ 85016(5) Hilton Village Scottsdale, AZ 85250(4)(5) California Azalea South Gate, CA 90280(5)(8) 1977, 2019 2021 643,000 17.52 90% 1982, 1989 2021 93,000 36.25 93% 2014 2017 223,000 $30.30 99% Bell Gardens Bell Gardens, CA 90201(4)(5)(8) 1990, 2003, 2006 2017/2018 330,000 $23.28 98% Colorado Blvd Pasadena, CA 91103(4) Crow Canyon Commons San Ramon, CA 94583 East Bay Bridge Emeryville & Oakland, CA 94608 Escondido Promenade Escondido, CA 92029(5) Fourth Street Berkeley, CA 94710(5) Freedom Plaza Los Angeles, CA 90002(4)(5) Grossmont Center La Mesa, CA 91942(5) Hastings Ranch Plaza Pasadena, CA 91107(4) Hollywood Blvd Hollywood, CA 90028 Kings Court Los Gatos, CA 95032(4)(6) La Alameda Walnut Park, CA 90255(4)(7)(8) Old Town Center Los Gatos, CA 95030 Olivo at Mission Hills Mission Hills, CA 91345(5) Plaza Del Sol South El Monte, CA 91733(5) Plaza El Segundo / The Point El Segundo, CA 90245(5)(8) 1905-1988 1998 42,000 $59.69 2005/2007 243,000 $28.28 88% 93% 2012 440,000 $19.43 99% 1980, 1998, 2006 1994-2001, 2011, 2012 1987 1996/2010 298,000 $28.79 96% 1948, 1975 2017 71,000 $32.66 78% 2020 2018 114,000 $30.17 93% 1961, 1963, 1982-1983, 2002 1958, 1984, 2006, 2007 2021 933,000 $14.19 99% 2017 273,000 $8.47 100% 1929, 1991 1999 181,000 $36.54 86% 1960 2008 1998 2017 81,000 245,000 $41.56 $26.84 100% 92% 1962, 1998 1997 97,000 $43.95 90% 2018 2017 155,000 $32.21 100% 2009 2017 48,000 2006-2007, 2016 2011/2013 500,000 $24.91 $45.15 96% 92% 22 Fry's Food & Drug Floor & Décor Marshalls Nordstrom Last Chance Best Buy CVS Houston's Marshalls Ross Dress for Less Ulta Michaels Food4Less Marshalls Ross Dress for Less Bob's Discount Furniture Banana Republic True Food Kitchen Sprouts Total Wine & More Rite Aid Pak-N-Save Home Depot Target Nordstrom Rack TJ Maxx Dick's Sporting Goods Ross Dress For Less Bob's Discount Furniture CB2 Ingram Book Group Bellwether Coffee Smart & Final Nike Blink Fitness Ross Dress For Less Target Walmart Macy's CVS Marshalls HomeGoods CVS Sears Target Marshalls L.A. Fitness Lunardi's CVS Marshalls Ross Dress For Less CVS Petco Anthropologie Sephora Teleferic Barcelona Target 24 Hour Fitness Ross Dress for Less Marshalls Whole Foods Nordstrom Rack HomeGoods Dick's Sporting Goods Multiple Restaurants Property, City, State, Zip Code San Antonio Center Mountain View, CA 94040(4)(6) Santana Row San Jose, CA 95128(4)(10) Santana Row Residential San Jose, CA 95128 Sylmar Towne Center Sylmar, CA 91342(5) Third Street Promenade Santa Monica, CA 90401 Westgate Center San Jose, CA 95129 Connecticut Bristol Plaza Bristol, CT 06010 Greenwich Avenue Greenwich Avenue, CT 06830 Darien Commons Darien, CT 06820 District of Columbia Friendship Center Washington, DC 20015 Florida CocoWalk Coconut Grove, FL 33133(5)(11) Del Mar Village Boca Raton, FL 33433 Tower Shops Davie, FL 33324 Illinois Crossroads Highland Park, IL 60035 Finley Square Downers Grove, IL 60515 Garden Market Western Springs, IL 60558 Riverpoint Center Chicago, IL 60614 Maryland Bethesda Row Bethesda, MD 20814(4) Bethesda Row Residential Bethesda, MD 20814 Year Acquired 2015/2019 Square Feet(1) / Apartment Units 212,000 Average Base Rent Per Square Foot(2) $16.52 Percentage Leased(3) 98% 1997 1,208,000 $55.20 95% Year Completed 1958, 1964-1965, 1974-1975, 1995-1997 2002, 2009, 2016, 2020 2003-2006, 2011, 2014 1973 1997/2012 662 units N/A 2017 148,000 $17.39 1888-2000 1996-2000 207,000 $83.92 95% 93% 81% 1960-1966 2004 648,000 $20.19 97% 1959 1995 264,000 $14.21 83% 1968 1995 1920-2009 2013/2018 35,000 59,000 2 units $96.19 $42.92 N/A 100% 89% 100% 1998 2001 119,000 $33.73 66% 1990/1994, 1922-1973, 2018-2021 1982, 1994 & 2007 2015-2017 245,000 $43.92 99% 2008/2014 187,000 $20.92 95% 1989, 2017 2011/2014 430,000 $26.03 97% 1959 1993 168,000 $23.54 92% 1974 1995 281,000 $16.45 90% 1958 1994 139,000 $14.76 100% 1989, 2012 2017 211,000 $21.23 93% 1945-1991 2001, 2008 1993-2006/ 2008/2010 529,000 $55.51 95% 2008 1993 180 units N/A 96% 23 Principal Tenant(s) Trader Joe's Walmart 24 Hour Fitness Crate & Barrel H&M Best Buy Splunk Net App Multiple Restaurants Food4Less CVS adidas Madewell Patagonia Multiple Restaurants Target Nordstrom Rack Nike Factory TJ Maxx Stop & Shop TJ Maxx Burlington Saks Fifth Avenue Equinox Walgreens Marshalls DSW Maggiano's Cinepolis Theaters Youfit Health Club Multiple Restaurants Winn Dixie CVS L.A. Fitness Trader Joe's TJ Maxx Ross Dress for Less Best Buy Ulta L.A. Fitness Ulta Binny's Ferguson's Bath, Kitchen, & Lighting Gallery Bed, Bath & Beyond Buy Buy Baby Michaels Portillo's Mariano's Fresh Market Walgreens Jewel Osco Marshalls Old Navy Giant Food Apple Equinox Anthropologie Multiple Restaurants Property, City, State, Zip Code Congressional Plaza Rockville, MD 20852(5) Congressional Plaza Residential Rockville, MD 20852(5) Courthouse Center Rockville, MD 20852 Federal Plaza Rockville, MD 20852 Gaithersburg Square Gaithersburg, MD 20878 Governor Plaza Glen Burnie, MD 21961 Laurel Laurel, MD 20707 Year Completed 1965 Year Acquired 1965 Square Feet(1) / Apartment Units 324,000 Average Base Rent Per Square Foot(2) $42.22 Percentage Leased(3) 91% 2003, 2016 1965 194 units N/A 1975 1970 1997 1989 38,000 $22.81 249,000 $37.11 98% 76% 93% 1966 1993 208,000 $31.41 96% 1963 1956 1985 1986 243,000 $20.92 364,000 $22.98 88% 94% Montrose Crossing Rockville, MD 20852 1960-1979, 1996, 2011 2011/2013 368,000 $34.34 100% Perring Plaza Baltimore, MD 21134 1963 1985 397,000 $15.76 88% Pike & Rose North Bethesda, MD 20852(10) 1963, 2014, 2018, 2020 1982/2007/ 2012 622,000 $40.17 99% Pike & Rose Residential North Bethesda, MD 20852 Plaza Del Mercado Silver Spring, MD 20906 Quince Orchard Gaithersburg, MD 20877(4) Rockville Town Square Rockville, MD 20852(4) Rollingwood Apartments Silver Spring, MD 20910 THE AVENUE at White Marsh Baltimore, MD 21236(6) 2014, 2016, 2018 1982/2007 765 units N/A 1969 2004 116,000 $32.16 97% 95% 1975 1993 268,000 $25.48 92% 2006-2007 2006/2007 187,000 $28.87 79% 1960 1997 1971 2007 282 units N/A 315,000 $27.13 The Shoppes at Nottingham Square 2005-2006 2007 32,000 Baltimore, MD 21236 Towson Residential (Flats @703) Baltimore, MD 21236 White Marsh Other Baltimore, MD 21236 White Marsh Plaza Baltimore, MD 21236 Wildwood Bethesda, MD 20814 2017 1985 1987 1958 2007 2007 2007 1969 4,000 105 units 56,000 $49.73 $82.83 N/A $32.79 99% 88% 96% 100% 100% 100% Principal Tenant(s) The Fresh Market Buy Buy Baby Ulta Barnes & Noble Container Store Trader Joe's TJ Maxx Micro Center Ross Dress for Less Marshalls Ross Dress For Less Ashley Furniture HomeStore CVS Aldi Dick's Sporting Goods Giant Food Marshalls L.A. Fitness HomeGoods Giant Food Marshalls Home Depot Design Center Old Navy Bob's Discount Furniture Shoppers Food Warehouse Home Depot Micro Center Burlington Porsche Uniqlo REI H&M L.L. Bean Multiple Restaurants Aldi CVS L.A. Fitness Aldi HomeGoods L.A. Fitness Staples Dawson's Market CVS Gold's Gym Multiple Restaurants AMC Ulta Old Navy Barnes & Noble 80,000 $23.61 100% Giant Food 88,000 $102.87 96% Balducci's CVS Multiple Restaurants 24 Property, City, State, Zip Code Massachusetts Assembly Row/ Assembly Square Marketplace Somerville, MA 02145(10) Assembly Row Residential Somerville, MA 02145(10)(13) Campus Plaza Bridgewater, MA 02324 Chelsea Commons Chelsea, MA 02150(8) Dedham Plaza Dedham, MA 02026 Linden Square Wellesley, MA 02481 North Dartmouth North Dartmouth, MA 02747 Queen Anne Plaza Norwell, MA 02061 Michigan Gratiot Plaza Roseville, MI 48066 New Jersey Brick Plaza Brick Township, NJ 08723(4) Brook 35 Sea Grit, NJ 08750(5)(6)(8) Ellisburg Cherry Hill, NJ 08034 Hoboken Hoboken, NJ 07030(5)(8)(12) Mercer Mall Lawrenceville, NJ 08648(4) Year Completed Year Acquired 2005, 2014, 2018, 2021 2005-2011/ 2013 Square Feet(1) / Apartment Units Average Base Rent Per Square Foot(2) Percentage Leased(3) 1,069,000 $35.11 97% 2018 2005-2011 947 units N/A 1970 2004 114,000 $17.35 1962,1969, 2008 1959 2006-2008 222,000 $12.81 1993/2016/ 2019 245,000 $16.75 1960, 2008 2006 2004 1967 2006 1994 220,000 7 units 48,000 $49.75 N/A $17.22 149,000 $20.39 99% 76% 96% 93% 88% 94% 100% 100% 1964 1973 215,000 $12.81 100% 1958 1989 408,000 $21.96 93% 1986, 2004 2014 99,000 $40.24 92% 1959 1992 260,000 $18.38 1887-2006 2019/2020 171,000 129 units 1975 2003/2017 551,000 $55.87 N/A $26.54 97% 98% 99% 89% The Grove at Shrewsbury Shrewsbury, NJ 07702(5)(6)(8) 1988, 1993 & 2007 2014 192,000 $48.68 99% Troy Hills Parsippany-Troy, NJ 07054 New York Fresh Meadows Queens, NY 11365 1966 1980 211,000 $23.14 100% 1949 1997 409,000 $37.29 95% Georgetowne Shopping Center Brooklyn, NY 11234 1969, 2006, 2015 2019 147,000 $39.50 88% Greenlawn Plaza Greenlawn, NY 11743 Hauppauge Hauppauge, NY 11788 1975, 2004 2006 103,000 $18.39 89% 1963 1998 133,000 $34.99 71% 25 Principal Tenant(s) Trader Joe's TJ Maxx AMC LEGOLAND Discovery Center PUMA Multiple Restaurants Roche Bros. Burlington Home Depot Planet Fitness Star Market Planet Fitness Roche Bros. CVS Stop & Shop Big Y Foods TJ Maxx HomeGoods Kroger Bed, Bath & Beyond Best Buy DSW Trader Joe's AMC HomeGoods Ulta Burlington Banana Republic Gap Williams-Sonoma Whole Foods Buy Buy Baby CVS New York Sports Club Sephora Multiple Restaurants Shop Rite Ferguson Bath, Kitchen, & Lighting Ross Dress for Less Nordstrom Rack REI Tesla Lululemon Anthropologie Pottery Barn Williams-Sonoma Target L.A. Fitness Michaels Island of Gold AMC Kohl's Michaels Foodway Five Below IHOP Greenlawn Farms Tuesday Morning Planet Fitness Shop Rite Property, City, State, Zip Code Huntington Huntington, NY 11746 Huntington Square East Northport, NY 11731(4) Melville Mall Huntington, NY 11747(4) Pennsylvania Andorra Philadelphia, PA 19128 Bala Cynwyd Bala Cynwyd, PA 19004 Bala Cynwyd Residential Bala Cynwyd, PA 19004 Flourtown Flourtown, PA 19031 Lancaster Lancaster, PA 17601(4) Langhorne Square Levittown, PA 19056 Lawrence Park Broomall, PA 19008 Northeast Philadelphia, PA 19114 Town Center of New Britain New Britain, PA 18901 Willow Grove Willow Grove, PA 19090 Wynnewood Wynnewood, PA 19096 Virginia 29th Place Charlottesville, VA 22091(8) Barcoft Plaza Falls Church, VA 22041 Barracks Road Charlottesville, VA 22905 Birch & Broad (formerly known as Falls Plaza) Falls Church, VA 22046 Chesterbrook McLean, VA 22101(5) Fairfax Junction Fairfax, VA 22030(6) Graham Park Plaza Falls Church, VA 22042 Principal Tenant(s) Petsmart Michaels Ulta Barnes & Noble Uncle Giuseppe's Marketplace Marshalls Dick's Sporting Goods Field & Stream Macy's Backstage Acme Markets TJ Maxx Kohl's L.A. Fitness Five Below Acme Markets Michaels L.A. Fitness Giant Food Movie Tavern Redner's Warehouse Markets Marshalls Planet Fitness Acme Markets TJ Maxx HomeGoods Barnes & Noble Lankenau Medical Center Marshalls Ulta Skechers Crunch Fitness Year Completed 1962 Year Acquired 1988/2007/ 2015 Square Feet(1) / Apartment Units 212,000 Average Base Rent Per Square Foot(2) $17.12 Percentage Leased(3) 84% 1980, 2007 2010 74,000 $30.05 81% 1974 2006 253,000 $28.70 100% 1953 1988 270,000 $15.01 87% 1955 1993 174,000 $36.79 87 units N/A 156,000 $23.45 95% 97% 98% 2020 1957 1958 1966 1993 1980 1980 1985 126,000 $20.08 96% Giant Food 223,000 $18.45 99% 1972 1980/2017 358,000 $22.88 96% 1959 1983 227,000 $19.76 82% 1969 2006 124,000 $10.04 1953 1948 1984 1996 183,000 249,000 9 units $22.06 $29.12 N/A 89% 58% 96% 78% Giant Food Rite Aid Dollar Tree Marshalls Five Below Giant Food Bed, Bath & Beyond Old Navy DSW 1975-2001 2007 168,000 $19.38 99% Lidl HomeGoods DSW Staples 1963, 1972, 1990, & 2000 2006/2007/ 2016 113,000 $27.93 94% Harris Teeter 1958 1985 498,000 $27.61 97% 1960/1962 1967/1972 144,000 $36.07 96% 1967 2021 90,000 $26.79 85% 1981, 1986, 2000 2019/2020 124,000 $25.50 97% Harris Teeter Kroger Anthropologie Nike Bed, Bath & Beyond Old Navy Giant Food CVS Staples Safeway Walgreens Starbucks Aldi CVS Planet Fitness 1971 1983 132,000 $39.71 87% Giant Food 26 Property, City, State, Zip Code Idylwood Plaza Falls Church, VA 22030 Mount Vernon/South Valley/ 7770 Richmond Hwy Alexandria, VA 22306(6) Old Keene Mill Springfield, VA 22152 Pan Am Fairfax, VA 22031 Pentagon Row Arlington, VA 22202 Pike 7 Plaza Vienna, VA 22180 Tower Shopping Center Springfield, VA 22150 Twinbrooke Shopping Centre Fairfax, VA 22032 Tyson's Station Falls Church, VA 22043 Village at Shirlington Arlington, VA 22206(4) Willow Lawn Richmond, VA 23230 Total — Commercial (9) Total —Residential (13) _____________________ Year Completed 1991 Year Acquired 1994 Square Feet(1) / Apartment Units 73,000 Average Base Rent Per Square Foot(2) $52.50 Percentage Leased(3) 100% Principal Tenant(s) Whole Foods 2003/2006 565,000 $19.37 97% 1966, 1972,1987 & 2001 1968 1976 91,000 $35.05 1979 1993 228,000 $26.18 95% 94% 2001-2002 1998/2010 297,000 $35.63 99% 1968 1997/2015 172,000 $48.37 97% 1960 1998 111,000 $27.20 87% 1977 1954 1940, 2006-2009 2021 1978 1995 106,000 $24.26 89% 50,000 $47.70 88% Trader Joe's 267,000 $40.62 83% 1957 1983 464,000 $21.11 96% 25,102,000 2,869 units $29.69 94% 97% Shoppers Food Warehouse TJ Maxx Home Depot Bed, Bath & Beyond Results Fitness Whole Foods Walgreens Planet Fitness Safeway Micro Center CVS Michaels Harris Teeter TJ Maxx DSW Ulta TJ Maxx DSW Crunch Fitness Staples L.A. Mart Talbots Total Wine & More Safeway Walgreens Harris Teeter CVS AMC Carlyle Grand Café Kroger Old Navy Ross Dress For Less Gold's Gym Dick's Sporting Goods (1) Represents the GLA of the commercial portion of the property. Some of our properties include office space which is included in this square footage. (2) Average base rent per square foot is calculated as the aggregate, annualized in-place contractual (defined as cash basis excluding rent abatements) minimum rent for all occupied spaces divided by the aggregate GLA of all occupied spaces. Average base rent is for commercial spaces only. (3) Percentage leased is expressed as a percentage of rentable commercial square feet occupied or subject to a lease. Residential percentage leased is expressed as a percentage of units occupied or subject to a lease. (4) All or a portion of this property is owned pursuant to a ground lease. (5) We own the controlling interest in this property. (6) We own all or a portion of this property in a “downREIT” partnership, of which a wholly owned subsidiary of the Trust is the sole general partner, with third party partners holding operating partnership units. (7) We own a noncontrolling interest in this property. (8) All or a portion of this property is encumbered by a mortgage loan. (9) Aggregate information is calculated on a GLA weighted-average basis, excluding our La Alameda property, which is unconsolidated. (10) Portion of property is currently under development. See further discussion in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. (11) This property includes interests in four buildings in addition to our initial acquisition. (12) This property includes 39 buildings primarily along Washington Street and 14th Street in Hoboken, New Jersey. (13) The new 500 unit residential building at Assembly Row was delivered in the second half of 2021 and is currently in the process of being leased-up for the first time. Consequently, these units are excluded from our total residential units and percentage leased statistics. If these units were included, our total residential units would be 3,369 and our percentage leased would be 91%. ITEM 3. LEGAL PROCEEDINGS We are involved from time-to-time in various legal and regulatory proceedings that arise in the ordinary course of our business, including, but not limited to, commercial disputes, environmental matters, and litigation in connection with transactions such as acquisitions and divestitures. We believe that our current proceedings will not have a material adverse effect on our financial condition, liquidity or results of operations. See Note 7 to the Consolidated Financial Statements for further discussions. 27 ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 28 PART II ITEM 5. MARKET FOR OUR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common shares trade on the New York Stock Exchange under the symbol “FRT.” Listed below are the high and low sales prices of our common shares as reported on the New York Stock Exchange and the dividends declared for each of the periods indicated. 2021 ....................................................................................................................... Fourth quarter................................................................................................. $ Third quarter................................................................................................... $ Second quarter................................................................................................ $ First quarter .................................................................................................... $ 2020 ....................................................................................................................... Fourth quarter................................................................................................. $ Third quarter................................................................................................... $ Second quarter................................................................................................ $ First quarter .................................................................................................... $ On February 7, 2022, there were 2,271 holders of record of our common shares. Price Per Share High Low Dividends Declared Per Share 138.40 123.43 125.00 110.66 97.00 90.09 105.49 131.56 $ $ $ $ $ $ $ $ 117.48 111.21 101.45 81.85 67.01 70.69 64.11 65.55 $ $ $ $ $ $ $ $ 1.070 1.070 1.060 1.060 1.060 1.060 1.050 1.050 Our ongoing operations generally will not be subject to federal income taxes as long as we maintain our REIT status and distribute to shareholders at least 100% of our taxable income. Under the Code, REITs are subject to numerous organizational and operational requirements, including the requirement to generally distribute at least 90% of taxable income. Future distributions will be at the discretion of our Board of Trustees and will depend on our actual net income available for common shareholders, financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Trustees deems relevant. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our regular annual dividend rate for 54 consecutive years. The impact of COVID-19 on our cash flow may impact our ability to pay dividends at the current rate, at an increased rate, and in the current format or at all. Our total annual dividends paid per common share for 2021 and 2020 were $4.25 per share and $4.21 per share, respectively. The annual dividend amounts are different from dividends as calculated for federal income tax purposes. Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a shareholder as ordinary dividend income. Distributions in excess of current and accumulated earnings and profits will be treated as a nontaxable reduction of the shareholder’s basis in such shareholder’s shares, to the extent thereof, and thereafter as taxable capital gain. Distributions that are treated as a reduction of the shareholder’s basis in its shares will have the effect of increasing the amount of gain, or reducing the amount of loss, recognized upon the sale of the shareholder’s shares. No assurances can be given regarding what portion, if any, of distributions in 2022 or subsequent years will constitute a return of capital for federal income tax purposes. During a year in which a REIT earns a net long-term capital gain, the REIT can elect under Section 857(b)(3) of the Code to designate a portion of dividends paid to shareholders as capital gain dividends. If this election is made, then the capital gain dividends are generally taxable to the shareholder as long-term capital gains. The following table reflects the income tax status of distributions per share paid to common shareholders: Ordinary dividend ........................................................................................................................... $ Capital gain ..................................................................................................................................... Return of capital.............................................................................................................................. $ Year Ended December 31, 2021 2020 3.358 0.680 0.212 4.250 $ $ 3.452 — 0.758 4.210 29 Distributions on our 5.417% Series 1 Cumulative Convertible Preferred Shares were paid at the rate of $1.354 per share per annum commencing on the issuance date of March 8, 2007. Distributions on our 5.0% Series C Cumulative Redeemable Preferred Shares were paid at the rate of $1.250 per depositary share per annum, commencing on the issuance date of September 29, 2017. We do not believe that the preferential rights available to the holders of interest in our preferred shares or the financial covenants contained in our debt agreements had or will have an adverse effect on our ability to pay dividends in the normal course of business to our common shareholders or to distribute amounts necessary to maintain our qualification as a REIT. Total Stockholder Return Performance The following performance graph compares the cumulative total shareholder return on Federal Realty's common shares with the S&P 500 Index and the index of equity real estate investment trusts prepared by the National Association of Real Estate Investment Trusts ("NAREIT") for the five fiscal years commencing December 31, 2016, and ending December 31, 2021, assuming an investment of $100 and the reinvestment of all dividends into additional common shares during the holding period. Equity real estate investment trusts are defined as those that derive more than 75% of their income from equity investments in real estate assets. The FTSE NAREIT Equity REIT Total Return Index includes all tax qualified real estate investment trusts listed on the NYSE, NYSE MKT, or the NASDAQ National Market. Stock performance for the past five years is not necessarily indicative of future results. COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN $250 $225 $200 $175 $150 $125 $100 $75 $50 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 Federal Realty Investment Trust S&P 500 FTSE NAREIT Equity Total REIT Index Recent Sales of Unregistered Shares Under the terms of various operating partnership agreements of certain of our affiliated limited partnerships, the interest of limited partners in those limited partnerships may be redeemed, subject to certain conditions, for cash or an equivalent number of our common shares, at our option. During the three months ended December 31, 2021, we issued 27,302 common shares in connection with the redemption of operating partnership units. Any equity securities sold by us during 2021 that were not registered have been previously reported in a Quarterly Report on Form 10-Q. Purchases of Equity Securities by the Issuer and Affiliated Purchasers During 2021, 2,193 restricted common shares were forfeited by former employees. 30 From time to time, we could be deemed to have repurchased shares as a result of shares withheld for tax purposes upon a stock compensation related vesting event. ITEM 6. SELECTED FINANCIAL DATA None. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission on February 11, 2021. Forward-Looking Statements Certain statements in this section or elsewhere in this report may be deemed “forward-looking statements”. See “Item 1A. Risk Factors” in this report for important information regarding these forward-looking statements and certain risk and uncertainties that may affect us. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing in “Item 8. Financial Statements and Supplementary Data” of this report. Overview We are an equity real estate investment trust ("REIT") specializing in the ownership, management, and redevelopment of high quality retail and mixed-use properties located primarily in densely populated and affluent communities in strategically selected metropolitan markets in the Northeast and Mid-Atlantic regions of the United States, California, and South Florida. As of December 31, 2021, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects comprising approximately 25.1 million square feet. In total, the real estate projects were 93.6% leased and 91.1% occupied at December 31, 2021. We have paid quarterly dividends to our shareholders continuously since our founding in 1962 and have increased our dividends per common share for 54 consecutive years. Summary Financial Information The following table includes select financial information that is helpful in understanding the trends in financial condition and the results of operations discussed throughout this Item 7. and “Item 8. Financial Statements and Supplementary Data.” 31 Operating Data: Rental income Property operating income (1) Gain on sale of real estate and change in control of interest, net of tax Operating income Net income available for common shareholders Net cash provided by operating activities Net cash used in investing activities Net cash (used in) provided by financing activities Earnings per common share, diluted: Net income available to common shareholders Dividends declared per common share Other Data: Funds from operations available to common shareholders (2) Funds from operations available for common shareholders, per diluted share (2) EBITDAre (3) Ratio of EBITDAre to combined fixed charges and preferred share dividends (3)(4) Balance Sheet Data: Real estate, at cost Total assets Total debt Total shareholders’ equity Number of common shares outstanding Year Ended December 31, 2021 2020 2019 (In thousands, except per share data and ratios) $ $ $ $ $ $ 948,842 $ 832,171 $ 932,738 634,607 $ 545,332 $ 637,030 89,950 $ 98,117 $ 116,393 394,725 $ 289,524 $ 470,911 253,456 $ 123,664 $ 345,824 471,352 $ 369,929 $ 461,919 $ (660,118) $ (368,383) $ (316,532) $ (452,967) $ 661,736 $ (100,105) $ $ $ $ $ 3.26 $ 4.26 $ 1.62 $ 4.22 $ 4.61 4.14 434,743 $ 5.57 $ 333,849 $ 4.38 $ 465,819 6.17 589,792 $ 501,813 $ 599,567 3.6x 2.7x 4.2x As of December 31, 2021 2020 2019 (In thousands) $ 9,422,062 $ 7,622,320 $ 4,047,547 $ 2,663,148 78,603 $ 8,582,870 $ 7,607,624 $ 4,291,375 $ 2,548,747 76,727 $ 8,298,132 $ 6,794,992 $ 3,356,594 $ 2,636,132 75,541 (1) Property operating income is a non-GAAP measure that consists of rental income and mortgage interest income, less rental expenses and real estate taxes. This measure is used internally to evaluate the performance of property operations and we consider it to be a significant measure. Property operating income should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of operating income to property operating income for 2021, 2020, and 2019 is as follows: Operating income General and administrative Depreciation and amortization Impairment charge 2021 2020 (in thousands) 2019 $ 394,725 $ 289,524 $ 470,911 49,856 279,976 — 41,680 255,027 57,218 42,754 239,758 — Gain on sale of real estate and change in control of interest, net of tax (89,950) (98,117) (116,393) Property operating income $ 634,607 $ 545,332 $ 637,030 (2) Funds from operations "FFO" is a supplemental non-GAAP measure. See "Liquidity and Capital Resources" in this Item 7. for further discussion. (3) EBITDA for Real Estate ("EBITDAre") is a non-GAAP measure that NAREIT defines as: net income computed in accordance with GAAP plus net interest expense, income tax expense, depreciation and amortization, gain or loss on sale of real estate, impairments of real estate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated 32 affiliates. We calculate EBITDAre consistent with the NAREIT definition. As EBITDA is a widely known and understood measure of performance, management believes EBITDAre represents an additional non-GAAP performance measure, independent of a company's capital structure that will provide investors with a uniform basis to measure the enterprise value of a company. EBITDAre also approximates a key performance measure in our debt covenants, but it should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. The reconciliation of net income to EBITDAre for the periods presented is as follows: Net income Interest expense Other interest income Early extinguishment of debt Provision (benefit) for income tax Depreciation and amortization Gain on sale of real estate and change in control of interest Impairment charge Adjustments of EBITDAre of unconsolidated affiliates EBITDAre 2021 2020 2019 269,081 127,698 (809) — 118 279,976 (89,950) — 3,678 589,792 (In thousands) 135,888 $ 136,289 (1,894) 11,179 (194) 255,027 (98,117) 57,218 6,417 501,813 $ $ $ 360,542 109,623 (1,266) — 772 239,758 (116,779) — 6,917 599,567 $ $ (4) Fixed charges consist of interest on borrowed funds (including capitalized interest), amortization of debt discount/ premiums and debt costs, costs related to the early extinguishment of debt, and the portion of rent expense representing an interest factor. Excluding the $11.2 million early extinguishment of debt charge from fixed charges in 2020, the ratio of EBITDAre to combined fixed charges and preferred share dividends is 2.9x. Excluding the $11.9 million charge related to the buyout of the Kmart lease at Assembly Square Marketplace in 2019, our ratio of EBITDAre to combined fixed charges and preferred share dividends remained 4.2x. Impacts of COVID-19 Pandemic We continue to monitor and address risks related to the COVID-19 pandemic. Since March 2020 when the World Health Organization characterized COVID-19 as a global pandemic, we have been and continue to be impacted by COVID-19 and the actions taken by federal, state, and local government to prevent its spread. These actions included the closure of nonessential businesses and ordering residents to generally stay at home at the onset of the pandemic, phased reopenings and capacity limitations, and now generally lifted restrictions. While the overall economy is showing signs of recovery from the initial impacts of COVID-19, workforce shortages, global supply chain bottlenecks and shortages, inflation, as well as COVID-19 variants are impacting the pace of recovery. Closures and restrictions, along with general concern over the spread of COVID-19, required a significant number of tenants to close their operations or to significantly limit the amount of business they are able to conduct, which impacted their ability to timely pay rent as required under our leases and also caused many tenants to close their business permanently. While improving, our cash flow and results of operations in the year ended December 31, 2021 continued to be materially adversely impacted, with vacancy levels remaining above historical levels. Although virtually all of our leases required the tenants to pay rent even while they were not operating, we entered into numerous agreements to abate, defer, and/or restructure tenant rent payments for varying periods of time, all with the objective of collecting as much cash as reasonably possible and maintaining occupancy to the maximum extent. We believe those actions will position many of our tenants to be able to return to payment of contractual rent as soon as possible after the impacts from the pandemic have subsided. We believe that the actions we have taken to improve our financial position and maximize our liquidity, as described further in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2020 Annual Report on Form 10-K, will continue to mitigate the impact to our cash flow caused by tenants not timely paying contractual rent. Throughout 2021, we continued to maintain levels of cash significantly in excess of the cash balances we have historically maintained which has adversely impacted our financial results; however, we believe that such action was prudent to position us with what we expect to be sufficient liquidity to allow us to continue fully operating as our operating revenues begin to return to more typical levels. As of December 31, 2021, there is no outstanding balance on our $1.0 billion revolving credit facility, and we have cash and cash equivalents of $162.1 million. 33 Additional discussion of the impact of COVID-19 on our results and long-term operations can be found throughout Item 7 and Item 1A. Risk Factors. Corporate Responsibility We actively endeavor to operate and develop our properties in a sustainable, responsible, and effective manner with the objective being to drive long-term growth and aid in value creation for our shareholders, tenants, employees, and local communities. We have aligned our program and efforts with the United Nations Sustainable Development Goals, as described in our ESG Policy and our 2020 Corporate Responsibility Report, which are provided only for informational purposes on our website and not incorporated herein. Our development activities have been heavily focused on owning, developing and operating properties that are certified under the U.S. Green Building Council’s® (“USGBC”) Leadership in Energy and Environmental Design™ (LEED®) rating system which serves as a third-party verification that a building or community was designed and built to mitigate its environmental footprint. We currently have 18 LEED certified buildings and our Pike & Rose project has achieved LEED for Neighborhood Development Stage 3 Gold certification. The COVID-19 pandemic has also increased our focus on owning, developing and operating healthier buildings. To that end, our new corporate headquarters space at our 909 Rose Avenue building has earned a Fitwel certification developed by the U.S. Centers for Disease Control and Prevention (CDC) together with the General Services Administration (GSA). This certification assesses a building’s impact on seven distinct categories related to overall health and well-being. We are also committed to implementing sustainable business practices at our operating properties that focus on energy efficiency, water conservation and waste minimization and have established energy and greenhouse gas (GHG) emissions reduction targets. To achieve these targets, we are actively addressing energy efficiency projects on site such as upgrading to LED lighting; and to address emissions we are procuring green energy, reducing electric consumption, and increasing our onsite solar generation capacity. We have installed on-site solar systems at 25 of our properties with a capacity of over 13 MW with more projects actively in progress. Our current capacity placed us in the top 5 among real estate companies for onsite capacity in the most recent Solar Energy Industry Association’s annual Solar Means Business Report. We are also actively installing electric vehicle car charging stations in numerous properties throughout our portfolio. We currently have over 300 charging stations in operation with more under construction. We also understand that we face risks presented by climate change and are working to evaluate our risk exposure. In our 2020 Corporate Responsibility Report, we provided a disclosure pursuant to the Task Force on Climate Related Financial Disclosure and we intend to provide that disclosure annually. We are also highly committed to our employees and fostering a work environment that promotes growth, development and personal well-being. Our four core values are accountability, excellence, innovation and integrity and we seek to attract and retain talented professionals who embrace those values. All of our efforts with respect to corporate responsibility are overseen by our Board of Trustees. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP”, requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past and current events and economic conditions. In addition, information relied upon by management in preparing such estimates includes internally generated financial and operating information, external market information, when available, and when necessary, information obtained from consultations with third party experts. Actual results could differ from these estimates. A discussion of possible risks which may affect these estimates is included in “Item 1A. Risk Factors” of this report. Management considers an accounting estimate to be critical if changes in the estimate could have a material impact on our consolidated results of operations or financial condition. Our significant accounting policies are more fully described in Note 2 to the consolidated financial statements; however, the most critical accounting policies, which are most important to the portrayal of our financial condition and results of operations, and involve the use of complex estimates and significant assumptions as to future uncertainties and, therefore, may result in actual amounts that differ from estimates, are as follows: 34 Collectibility of Lease Income Our leases with our tenants are classified as operating leases. When collection of substantially all lease payments during the lease term is considered probable, the lease qualifies for accrual accounting. When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received. Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment. This determination is impacted by numerous factors including our assessment of the tenant’s credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term. If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income. For example, in the event that our collectibility determinations were not accurate and we were required to write off additional receivables equaling 1% of rental income, our rental income and net income would decrease by $9.5 million. If leases currently classified as not probable are subsequently changed to probable, any lease receivables (including straight-line rent receivables) are re-instated with a corresponding increase to rental income. Since March 2020, federal, state, and local governments have taken various actions to mitigate the spread of COVID-19. These actions included the closure of nonessential businesses and ordering residents to generally stay at home at the onset of the pandemic, phased re-openings and capacity limitations, and now generally lifted restrictions. While the overall economy is showing signs of recovery from the initial impacts of COVID-19, workforce shortages, global supply chain bottlenecks and shortages, inflation, as well as COVID-19 variants are impacting the recovery. Closures and restrictions, along with the general concern over the spread of COVID-19, required a significant number of tenants to close their operations or to significantly limit the amount of business they were able to conduct, which impacted their ability to timely pay rent as required under our leases and also caused many tenants to close their business permanently. As a result, we revised our collectibility assumptions for many of our tenants most significantly impacted by COVID-19. Accordingly, during the years ended December 31, 2021 and 2020, we recognized collectibility related adjustments of $24.0 million and $106.6 million, respectively. This includes changes in our collectibility assessments from probable to not probable, disputed rents, and any rent abatements directly related to COVID-19, as well as the write-off of $0.7 million and $12.7 million, respectively of straight-line rent receivables related to tenants changed to a cash basis of revenue recognition during the years ended December 31, 2021 and 2020. As of December 31, 2021 and 2020, the revenue from approximately 34% and 35% of our tenants (based on total commercial leases), respectively, is being recognized on a cash basis. As of December 31, 2021 and 2020, our straight-line rent receivables balance was $110.7 million and $103.3 million, respectively, and is included in "accounts and notes receivable, net" on our consolidated balance sheet. Other revenue recognition policies When we enter into a transaction to sell a property or a portion of a property, we evaluate the recognition of the sale under ASC 610-20, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets." In accordance with ASC 610-20, we apply the guidance in ASC 606, "Revenue from Contracts with Customers," to determine whether and when control transfers and how to measure the associated gain or loss. We determine the transaction price based on the consideration we expect to receive. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of a gain recognized will not occur. We analyze the risk of a significant gain reversal and if necessary limit the amount of variable consideration recognized in order to mitigate this risk. The estimation of variable consideration requires us to make assumptions and apply significant judgment. The existence and amount of variable consideration can vary significantly among transactions. Historically, our property sales have had variable consideration of less than 1% of total expected consideration; however, we had one transaction in 2019 where the variable consideration was approximately $45.5 million. Real Estate Acquisitions Upon acquisition of operating real estate properties, we estimate the fair value of assets and liabilities acquired including land, building, improvements, leasing costs, intangibles such as acquired leases, assumed debt, and current assets and liabilities, if any. Based on these estimates, we allocate the purchase price to the applicable assets and liabilities. We utilize methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The value allocated to acquired leases is amortized over the related lease term and reflected as rental income in the statement of operations. We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and include such renewal options in the calculation of in-place lease value when we consider these to be bargain renewal options. If the value of below market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized. If a tenant vacates its space prior to contractual termination of its lease, the unamortized balance of any acquired lease value is written off to rental income. 35 During 2021, we acquired properties with a total purchase price of $440.9 million. $4.6 million, or 1% of the total purchase price was allocated to above market lease assets and $57.3 million, or 13% was allocated to below market lease liabilities. If the amounts allocated in 2021 to below market lease liabilities and building assets were each reduced by 5% of the total purchase price, annual below market lease liability amortization increasing rental income would decrease by approximately $2.5 million (using the weighted average life of below market liabilities at each respective acquired property) and annual depreciation expense would decrease by approximately $0.6 million (using a depreciable life of 35 years). Long-Lived Assets and Impairment There are estimates and assumptions made by management in preparing the consolidated financial statements for which the actual results will be determined over long periods of time. This includes the recoverability of long-lived assets, including our properties that have been acquired or redeveloped and our investment in certain joint ventures. Management’s evaluation of impairment includes review for possible indicators of impairment as well as, in certain circumstances, undiscounted and discounted cash flow analysis. Since most of our investments in real estate are wholly-owned or controlled assets which are held for use, a property with impairment indicators is first tested for impairment by comparing the undiscounted cash flows, taking into account the anticipated hold period, including residual value, to the current net book value of the property. If the undiscounted cash flows are less than the net book value, the property is written down to expected fair value. The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows including revenues, operating expenses, required maintenance and development expenditures, market conditions, demand for space by tenants and rental rates over long periods. Because our properties typically have a long life, the assumptions used to estimate the future recoverability of book value requires significant management judgment. We are also required to estimate the anticipated hold period. A change in the expected holding period from a long term hold to a short term would cause a significant change in the undiscounted cash flows and could result in an impairment charge. Actual results could be significantly different from the estimates. These estimates have a direct impact on net income, because recording an impairment charge results in a negative adjustment to net income. Recently Adopted and Recently Issued Accounting Pronouncements See Note 2 to the consolidated financial statements. 2021 Acquisitions and Dispositions On January 4, 2021, we acquired our partner's 20% interest in our joint venture arrangement related to the Pike & Rose hotel for $2.3 million, and repaid the $31.5 million mortgage loan encumbering the hotel. As a result of the transaction, we gained control of the hotel, and effective January 4, 2021, we have consolidated this asset. We also recognized a gain on acquisition of the controlling interest of $2.1 million related to the difference between the carrying value and fair value of the previously held equity interest. On February 22, 2021, we acquired the fee interest at our Mount Vernon Plaza property in Alexandria, Virginia for $5.6 million. As a result of this transaction, the "operating lease right of use assets" and "operating lease liabilities" on our consolidated balance sheet decreased by $9.8 million. We now own the entire fee interest on this property. During the year ended December 31, 2021, we acquired the following properties: Date Acquired Property City/State April 30, 2021 Chesterbrook (1) McLean, Virginia June 1, 2021 June 14, 2021 June 14, 2021 Grossmont Center (1) La Mesa, California Camelback Colonnade (1) Phoenix, Arizona Hilton Village (1) Scottsdale, Arizona September 2, 2021 Twinbrooke Shopping Centre Fairfax, Virginia Gross Leasable Area (GLA) (in square feet) 90,000 933,000 642,000 93,000 106,000 Ownership % Gross Value (in millions) 80 % $ 60 % $ 98 % $ 98 % $ 100 % $ 32.1 (2) 175.0 (3) 162.5 (4) 37.5 (5) 33.8 (6) (1) These acquisitions were completed through newly formed joint ventures, for which we own the controlling interest listed above, and therefore, these properties are consolidated in our financial statements. (2) Approximately $1.9 million and $0.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $8.0 million of net assets acquired were allocated to other liabilities for "below market leases." 36 (3) Approximately $12.3 million and $2.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $14.7 million of net assets acquired were allocated to other liabilities for "below market leases." (4) Approximately $11.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and $28.3 million were allocated to other liabilities for "below market leases." (5) The land is controlled under a long-term ground lease that expires on December 31, 2076, for which we have recorded a $10.4 million "operating lease right of use asset" (net of a $1.3 million above market liability) and an $11.6 million "operating lease liability." Approximately $2.7 million and $1.1 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $3.6 million were allocated to other liabilities for "below market leases." (6) Approximately $1.2 million and $0.3 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $2.7 million of net assets acquired were allocated to other liabilities for "below market leases." During the year ended December 31, 2021, we sold two properties and a portion of three properties for a total sales price of $141.6 million, which resulted in a net gain of $88.3 million. 2021 Significant Debt and Equity Transactions On February 24, 2021, we replaced our existing at-the-market (“ATM”) equity program with a new ATM equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $500.0 million. On May 7, 2021, we amended this ATM equity program, which reset the limit to $500.0 million. The new ATM equity program also allows shares to be sold through forward sales contracts. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes. For the year ended December 31, 2021, we issued 847,471 common shares at a weighted average price per share of $104.19 for net cash proceeds of $87.0 million including paying $0.9 million in commissions and $0.4 million in additional offering expenses related to the sales of these common shares. We also entered into forward sales contracts for the year ended December 31, 2021 for 2,999,955 common shares under our ATM equity program at a weighted average offering price of $120.22. During 2021, we settled a portion of the forward sales agreements entered into during the year by issuing 796,300 common shares for net proceeds of $85.7 million. The forward price that we will receive upon physical settlement of the remaining forward sale agreements is subject to the adjustment for (i) commissions, (ii) a floating interest rate factor equal to a specified daily rate less a spread, (iii) the forward purchasers' stock borrowing costs and (iv) scheduled dividends during the term of the forward sale agreements. The remaining open forward shares may be settled at any time on or before multiple required settlement dates ranging from June 2022 to December 2022. As of December 31, 2021, we had the capacity to issue up to $175.0 million in common shares under our ATM equity program. On April 16, 2021, we repaid $100.0 million of our existing $400.0 million term loan, amended the agreement on the remaining $300.0 million to lower the current spread over LIBOR from 135 basis points to 80 basis points based on our current credit rating, and extended the initial maturity date to April 16, 2024, along with two one-year extensions, at our option. In 2021, we repaid the following mortgage loans, at par, prior to their original maturity date: Property Sylmar Towne Center Plaza Del Sol Montrose Crossing The AVENUE at White Marsh Capitalized Costs Repayment Date Principal (in millions) February 5, 2021 $ September 1, 2021 $ October 12, 2021 $ November 2, 2021 $ 16.2 7.9 64.1 52.7 Certain external and internal costs directly related to the development, redevelopment and leasing of real estate, including pre- construction costs, real estate taxes, insurance, and construction costs and salaries and related costs of personnel directly involved, are capitalized. We capitalized external and internal costs related to both development and redevelopment activities of $356 million and $10 million, respectively, for 2021 and $404 million and $9 million, respectively, for 2020. We capitalized external and internal costs related to other property improvements of $64 million and $4 million, respectively, for 2021 and $64 million and $3 million, respectively, for 2020. We capitalized external and internal costs related to leasing activities of $19 million and $3 million, respectively, for 2021 and $11 million and $2 million, respectively, for 2020. The amount of capitalized 37 internal costs for salaries and related benefits for development and redevelopment activities, other property improvements, and leasing activities were $10 million, $3 million, and $3 million, respectively, for 2021 and $9 million, $3 million, and $2 million, respectively, for 2020. Total capitalized costs were $456 million for 2021 and $494 million for 2020, respectively. Corporate Reorganization In January of 2022, we completed the UPREIT reorganization described in the Explanatory Note at the beginning of this Annual Report. Prior to the UPREIT Reorganization, our business was conducted through the Predecessor. This Annual Report pertains to the business and results of operations of the Predecessor for its fiscal year ended December 31, 2021. As a result of the UPREIT reorganization, the Parent Company became the successor issuer to the Predecessor under the Exchange Act. The Parent Company and the Partnership have elected to co-file this Annual Report of the Predecessor to ensure continuity of information to investors. For additional information on our UPREIT reorganization, please see our Current Reports on Form 8- K filed with the SEC on January 3, 2022 and January 5, 2022. Outlook Our long-term growth strategy is focused on growth in earnings, funds from operations, and cash flows primarily through a combination of the following: • • • growth in our comparable property portfolio, growth in our portfolio from property development and redevelopments, and expansion of our portfolio through property acquisitions. While the ongoing COVID-19 pandemic is impacting us in the short-term, our long-term focus has not changed. Our comparable property growth is primarily driven by increases in rental rates on new leases and lease renewals, changes in portfolio occupancy, and the redevelopment of those assets. Over the long-term, the infill nature and strong demographics of our properties provide a strategic advantage allowing us to maintain relatively high occupancy and generally increase rental rates. However, our occupancy levels and ability to increase rental rates will be adversely impacted in the short-term as a result of COVID-19. We believe the locations and nature of our centers and diverse tenant base partially mitigates any potential negative changes in the economic environment. However, any significant reduction in our tenants' abilities to pay base rent, percentage rent or other charges, will adversely affect our financial condition and results of operations. We seek to maintain a mix of strong national, regional, and local retailers. At December 31, 2021, no single tenant accounted for more than 2.7% of annualized base rent. Federal, state, and local governments have taken various actions to mitigate the spread of COVID-19, including initially ordering closures of non-essential businesses and ordering residents to generally stay at home. While many of these restrictions have since been lifted, they required a significant number of tenants to close their operations or to significantly limit the amount of business they were able to conduct in their stores. These closures and restrictions, along with general concerns over the spread of COVID-19 have impacted the tenants' ability to timely pay rent as required under our leases and also caused many tenants to close their business permanently. While we are seeing signs of considerable improvement, these economic hardships have adversely impacted our business, and continue to have a negative effect on our financial results during 2021. With very few exceptions, our leases require tenants to continue to pay rent even while closed as a result of the pandemic, and while many tenants did not pay rents and other charges during a portion of 2020, the majority of our tenants have resumed paying all or a portion of their rent and/or other charges as their businesses were able to reopen. Our percentage of contractual rent actually collected has continued to increase since the low point in April 2020, including some tenants paying past due amounts. As of December 31, 2021, we have entered into agreements with approximately 32% of our tenants (based on total commercial leases) to defer rent payments to later periods, largely through 2022, although some extend beyond. While increasing monthly cash collection rates is a positive trend driven by government mandated restrictions gradually being lifted and improved outlook by some tenants, we expect that our rent collections will continue to be below our tenants' contractual rent obligations and historical levels into 2022, which will continue to adversely impact our results of operations. We are also experiencing a lower level of occupancy than in our past, largely due to the pandemic, which will adversely impact our results until we can release the space and the tenant commences paying rent as well as limit future vacancies caused by the pandemic. We are, however, experiencing strong demand for our commercial space as evidenced by the 2.1 million square feet of comparable space retail leasing we've completed in 2021, as well as our overall leased percentage at 93.6%, compared to our occupied percentage of only 91.1%. We have begun to see impacts of overall supply chain disruptions affecting the broader economy, including significantly longer lead times, limited availability, and increased costs for certain construction and other materials that support our leasing, development, and redevelopment activities. If disruptions continue to worsen, they could result in extended timeframes and/or increased costs for completion of our projects and tenant build-outs, which could delay the commencement of rent payments under new leases. Similarly, if our tenants experience significant disruptions in supply chains supporting their own products, or staffing issues due to labor shortages, their ability to pay rent may be adversely affected. We continue to 38 monitor these macroeconomic developments and are working with our tenants and our vendors to limit the overall impact to our business. The extent of such impact from COVID-19 will depend on future developments, which are highly uncertain and cannot be predicted. Depending upon the duration of tenant closures, future operating restrictions, and the overall economic downturn resulting from COVID-19, we may find that even deferred rents are difficult to collect, and we may experience higher vacancy levels. While the duration and severity of the economic impact resulting from COVID-19 is unknown, we seek to position the Trust to continue to participate in the resulting economic recovery. We continue to have several development projects in process being delivered as follows: • • • • • Phase III of Assembly Row includes 277,000 square feet of office space, 56,000 square feet of retail space, and 500 residential units. The expected costs for Phase III are between $465 million and $485 million with spaces being delivered beginning in the second quarter of 2021. At December 31, 2021, 162,000 square feet of office space has been delivered, all of the units in the residential building have been delivered, and 23,000 square feet of retail space has opened. Phase III at Pike & Rose includes a 212,000 square foot office building (which includes 7,000 square feet of ground floor retail space). The building is expected to cost between $128 million and $135 million. At December 31, 2021, approximately 162,000 square feet of office and retail space has been delivered, of which approximately 45,000 square feet is our new corporate headquarters. Phase IV at Pike & Rose is a 276,000 square foot office building (which includes 10,000 square feet of ground floor retail space). Approximately 105,000 square feet of the office space is pre-leased to a single tenant. The building is expected to cost between $185 million and $200 million, and begin delivering in late 2023. The first phase of construction on Santana West includes an eight story 376,000 square foot office building, which is expected to cost between $250 million and $270 million. Throughout the portfolio, we currently have redevelopment projects underway with a projected total cost of approximately $313 million that we expect to stabilize over the next several years. The above includes our best estimates based on information currently known, however, the completion of construction, final costs, and the timing of leasing and openings may be further impacted by the current environment including the duration and severity of the economic impacts of COVID-19 and supply chain disruptions affecting the broader economy. The development of future phases of Assembly Row, Pike & Rose and Santana Row will be pursued opportunistically based on, among other things, market conditions, tenant demand, and our evaluation of whether those phases will generate an appropriate financial return. We continue to review acquisition opportunities that complement our portfolio and provide long-term growth opportunities. Initially, some of our acquisitions do not contribute significantly to earnings growth; however, we believe they provide long- term re-leasing growth, redevelopment opportunities, and other strategic opportunities. Any growth from acquisitions is contingent on our ability to find properties that meet our qualitative standards at prices that meet our financial hurdles. Changes in interest rates may affect our success in achieving earnings growth through acquisitions by affecting both the price that must be paid to acquire a property, as well as our ability to economically finance the property acquisition. Generally, our acquisitions are initially financed by available cash and/or borrowings under our revolving credit facility which may be repaid later with funds raised through the issuance of new equity or new long-term debt. We may also finance our acquisitions through the issuance of common shares, preferred shares, or units in our operating partnership (see "Corporate Reorganization" discussion in this Item 7), as well as through assumed mortgages and property sales. At December 31, 2021, the leasable square feet in our properties was 93.6% leased and 91.1% occupied. The leased rate is higher than the occupied rate due to leased spaces that are being redeveloped or improved or that are awaiting permits and, therefore, are not yet ready to be occupied. Our occupancy and leased rates are subject to variability over time due to factors including acquisitions, the timing of the start and stabilization of our redevelopment projects, lease expirations and tenant closings and bankruptcies. Comparable Properties Throughout this section, we have provided certain information on a “comparable property” basis. Information provided on a comparable property basis includes the results of properties that we owned and operated for the entirety of both periods being compared except for properties that are currently under development or are being repositioned for significant redevelopment and investment. For the year ended December 31, 2021 and the comparison of 2021 and 2020, all or a portion of 95 properties were considered comparable properties and seven were considered non-comparable properties. For the year ended December 31, 2021, two portions of properties were moved from non-comparable properties to comparable properties, one 39 property and two portions of properties were moved from acquisitions to comparable properties, one property was moved from comparable properties to non-comparable properties, two properties and one portion of a property were removed from comparable properties as they were sold, and two portions of properties were removed from non-comparable properties, as they were sold, compared to the designations as of December 31, 2020. While there is judgment surrounding changes in designations, we typically move non-comparable properties to comparable properties once they have stabilized, which is typically considered 90% physical occupancy or when the growth expected from the redevelopment has been included in the comparable periods. We typically remove properties from comparable properties when the repositioning of the asset has commenced and has or is expected to have a significant impact to property operating income within the calendar year. Acquisitions are moved to comparable properties once we have owned the property for the entirety of comparable periods and the property is not under development or being repositioned for significant redevelopment and investment. Comparable property information replaces our previous same center designations. 40 YEAR ENDED DECEMBER 31, 2021 COMPARED TO YEAR ENDED DECEMBER 31, 2020 Rental income Mortgage interest income Total property revenue Rental expenses Real estate taxes Total property expenses Property operating income (1) General and administrative expense Depreciation and amortization Impairment charge Gain on sale of real estate and change in control of interest Operating income Other interest income Interest expense Early extinguishment of debt Income (loss) from partnerships Total other, net Net income Net income attributable to noncontrolling interests Net income attributable to the Trust 2021 2020 Dollars % (Dollar amounts in thousands) $ 948,842 $ 832,171 $ 116,671 14.0 % Change 2,382 951,224 198,121 118,496 316,617 634,607 (49,856) (279,976) — 89,950 394,725 809 3,323 835,494 170,920 119,242 290,162 545,332 (41,680) (255,027) (57,218) 98,117 289,524 1,894 (941) (28.3)% 115,730 27,201 (746) 26,455 89,275 (8,176) (24,949) 13.9 % 15.9 % (0.6)% 9.1 % 16.4 % 19.6 % 9.8 % 57,218 100.0 % (8,167) 105,201 (8.3)% 36.3 % (1,085) (57.3)% (127,698) (136,289) — 1,245 (11,179) (8,062) (125,644) (153,636) 269,081 (7,583) 135,888 (4,182) 8,591 11,179 9,307 27,992 133,193 (3,401) $ 261,498 $ 131,706 $ 129,792 (6.3)% 100.0 % 115.4 % (18.2)% 98.0 % 81.3 % 98.5 % (1) Property operating income is a non-GAAP measure. See "Summary Financial Information" in this Item 7 for further discussion. Property Revenues Total property revenue increased $115.7 million, or 13.9%, to $951.2 million in 2021 compared to $835.5 million in 2020. The percentage occupied at our shopping centers was 91.1% at December 31, 2021 compared to 90.2% at December 31, 2020. The most significant driver of the increase in property revenues is the generally lifted COVID-19 restrictions during 2021, as compared to 2020 when COVID-19 government imposed closures and restrictions were generally still in effect. Changes in the components of property revenue are discussed below. Rental Income Rental income consists primarily of minimum rent, cost reimbursements from tenants and percentage rent, and is net of collectibility related adjustments. Rental income increased $116.7 million, or 14.0%, to $948.8 million in 2021 compared to $832.2 million in 2020 due primarily to the following: • • • an $82.6 million decrease in collectibility related impacts including rent abatements across all properties, primarily due to higher collection rates in 2021 as tenants begin to recover from the initial impacts of COVID-19, and moving a large number of tenants from accrual basis to cash basis in 2020, an increase of $32.2 million primarily from 2021 acquisitions (see Note 3 to the consolidated financial statements for additional information), and an increase of $25.4 million from non-comparable properties driven by the opening of Phase III at Assembly Row in 2021 and our Phase III office building at Pike & Rose in 2020, redevelopment related occupancy increases at CocoWalk, the opening of our new office building at Santana Row in early 2020, higher net termination fees, and the opening of Freedom Plaza in 2020, partially offset by 41 • • a decrease of $17.1 million from property sales, and a decrease of $6.1 million at comparable properties due primarily to lower average occupancy of approximately $14.1 million, lower net termination fees and legal fee income of $5.1 million, and a $2.1 million decrease in recoveries primarily related to real estate tax recoveries, partially offset by higher percentage rent, specialty leasing, and parking income of $7.2 million, primarily due to the impact of COVID-19 related closures and restrictions in 2020, and higher rental rates of $6.7 million. Mortgage Interest Income Mortgage interest income decreased $0.9 million, or 28.3%, to $2.4 million in 2021 compared to $3.3 million in 2020 primarily due to the payoff of two mortgage notes receivable in May 2021 (see Note 2 to the consolidated financial statements for additional information). Property Expenses Total property expenses increased $26.5 million, or 9.1%, to $316.6 million in 2021 compared to $290.2 million in 2020. Changes in the components of property expenses are discussed below. Rental Expenses Rental expenses increased $27.2 million, or 15.9%, to $198.1 million in 2021 compared to $170.9 million in 2020. This increase is primarily due to the following: • • • an increase of $19.3 million from comparable properties due to higher repairs and maintenance costs, demolition costs, and utilities, as 2020 had lower costs as a result of COVID-19 impacts, higher snow removal costs, and higher insurance costs, an increase of $8.8 million primarily from 2021 acquisitions, and an increase of $6.1 million from non-comparable properties driven by the opening of Phase III at Assembly Row in 2021, the Phase III office building at Pike & Rose in 2020, the CocoWalk redevelopment in late 2020, and the opening of our new office building at Santana Row in early 2020, partially offset by • a decrease of $5.0 million from our property sales. As a result of the changes in rental income and rental expenses as discussed above, rental expenses as a percentage of rental income increased to 20.9% for the year ended December 31, 2021 from 20.5% for the year ended December 31, 2020. Real Estate Taxes Real estate tax expense decreased $0.7 million, or 0.6% to $118.5 million in 2021 compared to $119.2 million in 2020 due primarily to the following: • • a decrease of $3.5 million from our property sales, and a decrease of $3.3 million from comparable properties primarily due to a true-up of supplemental taxes at several of our California properties billed in 2020 and prior year tax refunds recorded in 2021, partially offset by • • an increase of $3.1 million from 2021 acquisitions, and an increase of $2.9 million from non-comparable properties due primarily to the opening of Phase III at Assembly Row in 2021, the opening of our new office building at Santana Row in early 2020, increases in assessments as a result of our redevelopment activities, and the Phase III office building at Pike & Rose in 2020. Property Operating Income Property operating income increased $89.3 million, or 16.4%, to $634.6 million in 2021 compared to $545.3 million in 2020. This increase is primarily due to the lifting of COVID-19 restrictions during 2021, which resulted in lower collectibility related adjustments and higher specialty leasing, percentage rent, and parking income. Also contributing to the increases were property acquisitions, placing redevelopment properties into service, the opening of Phase III at Assembly Row in 2021, and the opening of our new office building at Santana Row in early 2020, partially offset by lower average occupancy, property dispositions, higher repairs and maintenance and utilities expense, and higher snow removal expense. 42 Other Operating General and Administrative Expense General and administrative expense increased $8.2 million, or 19.6%, to $49.9 million in 2021 from $41.7 million in 2020. This increase is due primarily to higher personnel related costs. Depreciation and Amortization Depreciation and amortization expense increased $24.9 million, or 9.8%, to $280.0 million in 2021 from $255.0 million in 2020. This increase is due primarily to 2021 property acquisitions, accelerated depreciation related to the demolition of one of our buildings in the early stages of redevelopment, the opening of Phase III of Assembly Row and the Pike & Rose, placing redevelopment properties into service, and the acquisition of the previously unconsolidated Pike & Rose hotel joint venture in January 2021, partially offset by 2020 property sales and the lower write-off of lease related assets for vacating tenants. Impairment Charge The $57.2 million impairment charge for the year ended December 31, 2020 relates to The Shops at Sunset Place. See Note 3 to the consolidated financial statements for further discussion. Gain on Sale of Real Estate and Change in Control of Interest The $90.0 million gain on sale of real estate for the year ended December 31, 2021 is due to the sale of two properties and portions of three properties, as well as the $2.1 million gain relating to the acquisition of the previously unconsolidated Pike & Rose hotel join venture (see Note 3 to the consolidated financial statements for additional information). The $98.1 million gain on sale of real estate, net of tax for the year ended December 31, 2020 is due to the sale of three properties and one building. Operating Income Operating income increased $105.2 million, or 36.3%, to $394.7 million in 2021 compared to $289.5 million in 2020. This increase is primarily due to the lifting of COVID-19 restrictions, which resulted in lower collectibility related adjustments and higher specialty leasing, percentage rent, and parking income compared to 2020. Also contributing to the increases were the prior year impairment charge related to The Shops at Sunset Place, property acquisitions, placing redevelopment properties into service, the opening of Phase III at Assembly Row in 2021, and the opening of our new office building at Santana Row in early 2020, partially offset by lower average occupancy, higher personnel related costs, property dispositions, higher repairs and maintenance and utilities expense, a lower gain on sales of real estate, and higher snow removal expense. Other Interest Expense Interest expense decreased $8.6 million, or 6.3%, to $127.7 million in 2021 compared to $136.3 million in 2020. This decrease is due primarily to the following: • • a decrease of $6.2 million due to a lower overall weighted average borrowing rate, and a decrease of $3.2 million due to lower weighted average borrowings, partially offset by • a decrease of $0.8 million in capitalized interest. Gross interest costs were $150.3 million and $159.7 million in 2021 and 2020, respectively. Capitalized interest was $22.6 million and $23.4 million in 2021 and 2020, respectively. Early Extinguishment of Debt The $11.2 million early extinguishment of debt charge for the year ended December 31, 2020 relates to the make-whole premium paid as part of the early redemption of our $250 million 3.00% senior notes on December 31, 2020 and the related write-off of the unamortized discount and debt fees. 43 Income (loss) from Partnerships Income (loss) from partnerships increased $9.3 million or 115.4% to $1.2 million of income in 2021 compared to a loss of $8.1 million in 2020. This increase is due primarily to the acquisition of the previously unconsolidated Pike & Rose hotel joint venture in January 2021 and improved operating results at our restaurant joint ventures and at our Assembly Row hotel joint venture, largely the result of the easing of COVID-19 closures and restrictions. Net income attributable to noncontrolling interests Net income attributable to noncontrolling interests increased $3.4 million, or 81.3%, to $7.6 million in 2021 compared to $4.2 million in 2020. The increase is primarily due to The Shops at Sunset Place prior year impairment charge and 2021 acquisitions. Discussions of year-to-year comparisons between 2020 and 2019 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission on February 11, 2021. Liquidity and Capital Resources Due to the nature of our business and strategy, we typically generate significant amounts of cash from operations which is largely paid to our common and preferred shareholders in the form of dividends because as a REIT, we are generally required to make annual distributions to shareholders of at least 90% of our taxable income (cash dividends paid in 2021 were approximately $337.4 million). Remaining cash flow from operations after dividend payments is used to fund recurring and non-recurring capital projects (such as tenant improvements and redevelopments), and regular debt service requirements (including debt service relating to additional or replacement debt, as well as scheduled debt maturities). We maintain a $1.0 billion revolving credit facility to fund short term cash flow needs and also look to the public and private debt and equity markets, joint venture relationships, and property dispositions to fund capital expenditures on a long-term basis. During 2021, we have continued to see improvements in overall cash collections from tenants as compared to 2020, although not yet at pre-COVID-19 levels (see further discussion under the "Outlook" section of this Item 2). While the overall economic impacts of the pandemic are unknown, we have taken multiple steps to strengthen our financial position, maximize liquidity, and to provide maximum flexibility during these uncertain times, including maintaining levels of cash in excess of the cash balances we have historically maintained. As of December 31, 2021, there is no balance outstanding on our $1.0 billion unsecured revolving credit facility and we had cash and cash equivalents of $162.1 million. We also had outstanding forward sales agreements for net proceeds of $264.0 million as of December 31, 2021, and the capacity to issue up to $175.0 million in common shares under the ATM program. We have no debt maturing until June 2023. For the year ended 2021, the weighted average amount of borrowings outstanding on our revolving credit facility was $19.6 million, and the weighted average interest rate, before amortization of debt fees, was 0.9%. Our overall capital requirements during 2022 will be impacted by the extent and duration of COVID-19 related closures and restrictions, impacts on our cash collections, and overall economic impacts that might occur including supply chain issues. Cash requirements will also be impacted by acquisition opportunities and the level and general timing of our redevelopment and development activities. While the amount of future expenditures will depend on numerous factors, we expect to continue to see elevated levels of investment as we continue to invest in our overall portfolio to better position our properties for a post-COVID environment, costs to prepare vacant space for new tenants, and investments to complete the current phase and start on the next phase of our larger mixed-use development projects although at a slightly reduced level from 2021, largely due to deliveries in 2021 of our third phase of Assembly Row. We believe that the cash on our balance sheet together with rents we collect, as well as our $1.0 billion revolving credit facility will allow us to continue to operate our business through the remainder of the COVID-19 pandemic. Given our ability to access the capital markets, we also expect debt or equity to be available to us. We also have the ability to delay the timing of certain development and redevelopment projects as well as limit future acquisitions, reduce our operating expenditures, or re-evaluate our dividend policy. While we have seen improvements from the initial negative impacts of the COVID-19 pandemic, it has continued to affect our overall business during the year ended December 31, 2021, and we expect it will continue to negatively impact our business in the short term, we intend to operate with and to maintain our long term commitment to a conservative capital structure that will 44 allow us to maintain strong debt service coverage and fixed-charge coverage ratios as part of our commitment to investment- grade debt ratings. Summary of Cash Flows Net cash provided by operating activities ...................................................................................... $ Net cash used in investing activities............................................................................................... Net cash (used in) provided by financing activities ....................................................................... (Decrease) increase in cash and cash equivalents .......................................................................... Cash, cash equivalents, and restricted cash, beginning of year...................................................... Cash, cash equivalents, and restricted cash, end of year................................................................ $ Year Ended December 31, 2021 2020 (In thousands) 471,352 $ 369,929 (660,118) (452,967) (641,733) 816,896 (368,383) 661,736 663,282 153,614 175,163 $ 816,896 Net cash provided by operating activities increased $101.4 million to $471.4 million during 2021 from $369.9 million during 2020. The increase was primarily attributable to higher net income before non-cash items and the timing of cash receipts including higher accounts receivable and lower prepaid rent balances in 2020 as a result of the COVID-19 pandemic. Net cash used in investing activities increased $291.7 million to $660.1 million during 2021 from $368.4 million during 2020. The increase was primarily attributable to: • • a $356.9 million increase in acquisition of real estate primarily due to 2021 property acquisitions (see Note 3 to the consolidated financial statements for additional information), and a $45.6 million decrease in proceeds from sales of real estate, resulting from the sale of two properties and a portion of three properties in 2021, as compared to the sale of three properties, one building, and the two remaining condominium units at our Pike & Rose property in 2020, partially offset by • • • a $54.5 million decrease in net capital expenditures and leasing costs, a $41.4 million increase in net repayments and acquisitions of mortgages and other notes receivable primarily due to the $31.1 million payoff of two mortgage notes receivable in May 2021, as compared to the $9.6 million acquisition of two mortgage notes receivable in September 2020, and $12.9 million paid in 2020 relating to the partial sale under threat of condemnation at San Antonio Center in 2019. Net cash provided by financing activities decreased $1.1 billion to $453.0 million used during 2021 from $661.7 million provided during 2020. The decrease was primarily attributable to: • a $1.1 billion decrease due to net proceeds of $700.1 million from the issuance of $400.0 million of 3.50% unsecured senior notes and the $300.0 million reopening of our 3.95% unsecured senior notes in May 2020, and $394.2 million in net proceeds from our $400.0 million of 1.25% unsecured senior notes in October 2020, • $398.7 million in net proceeds from our unsecured term loan in May 2020, • a $207.4 million increase in repayment of mortgages, finance leases, and notes payable primarily due to the $140.9 million net repayments of four mortgage loans in 2021 (see Note 5 to the consolidated financial statements for more information), the $100.0 million repayment of our $400.0 million term loan which was amended in April 2021, and the $31.5 million repayment of the mortgage loan encumbering the Pike & Rose hotel in January 2021, partially offset by the $60.6 million payoff of the mortgage loan on The Shops at Sunset Place in December 2020 and the $3.6 million payoff of the mortgage loan on 29th Place, both in December 2020, and • an $11.1 million increase in dividends paid to shareholders due to an increase in the common share dividend rate and an increase in the number of common shares outstanding, partially offset by, • $510.4 million from the December 2020 redemptions of our $250.0 million 2.55% unsecured senior notes and our $250.0 million 3.00% unsecured senior notes, with a make-whole premium of $10.4 million, 45 • • $73.8 million increase in net proceeds from the issuance of 1.6 million common shares under our ATM program for net proceeds of $172.7 million (see Note 8 to our consolidated financial statements for additional details on these transactions), as compared to 1.1 million common shares for net proceeds of $98.8 million in 2020, and a $10.8 million decrease in distributions to and redemptions of noncontrolling interests primarily due to the 2020 acquisition of one of our partner's interests in the partnership that owns our Plaza El Segundo property for $7.3 million. Cash Requirements The following table provides a summary of material cash requirements comprising our fixed, noncancelable obligations as of December 31, 2021: Fixed and variable rate debt (principal only) (1)........................................ $ Fixed and variable rate debt - our share of unconsolidated real estate partnerships (principal only)(2).................................................................. Lease obligations (minimum rental payments) (3).................................... Redevelopments/capital expenditure contracts .......................................... Real estate commitments (4) Total estimated cash requirements ............................................................. $ _____________________ Cash Requirements by Period Total Next Twelve Months (In thousands) Greater than Twelve Months 4,063,414 $ 4,095 4,059,319 28,560 352,162 319,171 98,691 4,861,998 $ 418 11,001 267,490 — 283,004 $ 28,142 341,161 51,681 98,691 4,578,994 (1) The weighted average interest rate on our fixed and variable rate debt is 3.3% as of December 31, 2021. (2) The weighted average interest rate on the fixed and variable rate debt related to our unconsolidated real estate partnerships is 4.24% as of December 31, 2021. (3) This includes minimum rental payments related to both finance and operating leases. (4) This includes the liability related to the sale under threat of condemnation at San Antonio Center as further discussed in Note 7 to the consolidated financial statements. In addition to the amounts set forth in the table above and other liquidity requirements previously discussed, the following potential commitments exist: (a) Under the terms of the Congressional Plaza partnership agreement, a minority partner has the right to require us and the other minority partner to purchase its 26.63% interest in Congressional Plaza at the interest’s then-current fair market value. If the other minority partner defaults in their obligation, we must purchase the full interest. Based on management’s current estimate of fair market value as of December 31, 2021, our estimated liability upon exercise of the put option would range from approximately $67 million to $71 million. (b) Under the terms of various other partnership agreements, the partners have the right to exchange their operating partnership units for cash or the same number of our common shares, at our option. As of December 31, 2021, a total of 666,831 downREIT operating partnership units are outstanding. (c) Two of the members in Plaza El Segundo have the right to require us to purchase their 10.0% and 11.8% ownership interests at the interests' then-current fair market value. If the members fail to exercise their put options, we have the right to purchase each of their interests on or after December 30, 2026 at fair market value. Based on management’s current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from approximately $25 million to $28 million. (d) The other member in The Grove at Shrewsbury and Brook 35 has the right to require us to purchase all of its approximately 4.1% interest in The Grove at Shrewsbury and approximately 6.5% interest in Brook 35 at the interests' then- current fair market value. Based on management's current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $6 million to $7 million. (e) Effective September 18, 2023, the other member in Hoboken has the right to require us to purchase all of its 10% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $9 million to $10 million. 46 (f) Effective June 14, 2026, the other member in Cambelback Colonnade and Hilton Village has the right to require us to purchase all of its 2.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $4 million to $5 million. (g) Effective June 1, 2029, the other member in Grossmont Center has the right to require us to purchase all of its 40.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $68 million to $73 million. (h) At December 31, 2021, we had letters of credit outstanding of approximately $4.8 million. Off-Balance Sheet Arrangements At December 31, 2021, we have two real estate related equity method investments with total debt outstanding of $79.8 million, of which our share is $28.6 million. Our investment in these ventures at December 31, 2021 was $8.9 million. Other than the items disclosed in the Cash Requirements table, we have no off-balance sheet arrangements as of December 31, 2021 that are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements, or capital resources. 47 Debt Financing Arrangements The following is a summary of our total debt outstanding as of December 31, 2021: Description of Debt Mortgages payable Secured fixed rate Original Debt Issued Principal Balance as of December 31, 2021 (Dollars in thousands) Stated Interest Rate as of December 31, 2021 Maturity Date Azalea ...................................................................... Bell Gardens ............................................................ Plaza El Segundo ..................................................... The Grove at Shrewsbury (East) ............................. Brook 35 .................................................................. Hoboken (24 Buildings) (1)..................................... Various Hoboken (14 Buildings)............................. Chelsea..................................................................... Hoboken (1 Building) (3) ........................................ Subtotal............................................................ Net unamortized debt issuance costs and premium...................................................... Total mortgages payable, net........................... Acquired $ Acquired 125,000 43,600 11,500 56,450 Acquired Acquired Acquired 40,000 12,127 125,000 43,600 11,500 56,450 31,817 4,851 16,234 341,579 (1,586) 339,993 3.73 % 4.06 % 3.83 % 3.77 % 4.65 % LIBOR + 1.95% November 1, 2025 August 1, 2026 June 5, 2027 September 1, 2027 July 1, 2029 December 15, 2029 Various (2) Various through 2029 January 15, 2031 July 1, 2042 5.36 % 3.75 % Notes payable Revolving credit facility (4) .................................... Term Loan ............................................................... Various..................................................................... Subtotal............................................................ Net unamortized debt issuance costs .......... Total notes payable, net ................................... 1,000,000 400,000 7,239 Senior notes and debentures Unsecured fixed rate 2.75% notes ............................................................. 3.95% notes ............................................................. 1.25% notes ............................................................. 7.48% debentures..................................................... 3.25% notes ............................................................. 6.82% medium term notes ....................................... 3.20% notes ............................................................. 3.50% notes ............................................................. 4.50% notes ............................................................. 3.625% notes ........................................................... Subtotal............................................................ Net unamortized debt issuance costs and premium...................................................... Total senior notes and debentures, net............. 275,000 600,000 400,000 50,000 475,000 40,000 400,000 400,000 550,000 250,000 — LIBOR + 0.775% LIBOR + 0.80% January 19, 2024 April 16, 2024 11.31 % Various through 2028 300,000 2,635 302,635 (1,169) 301,466 2.75 % 3.95 % 1.25 % 7.48 % 3.25 % 6.82 % 3.20 % 3.50 % 4.50 % 3.625 % June 1, 2023 January 15, 2024 February 15, 2026 August 15, 2026 July 15, 2027 August 1, 2027 June 15, 2029 June 1, 2030 December 1, 2044 August 1, 2046 275,000 600,000 400,000 29,200 475,000 40,000 400,000 400,000 550,000 250,000 3,419,200 (13,112) 3,406,088 Total debt, net _____________________ $ 4,047,547 1) 2) 3) 4) On November 26, 2019, we entered into two interest rate swap agreements that fix the interest rate on the mortgage loan at 3.67%. The interest rates on these mortgages range from 3.91% to 5.00%. This mortgage loan has a fixed interest rate, however, the rate resets every five years until maturity. The current interest rate is fixed until July 1, 2022, and the loan is prepayable at par anytime after this date. The maximum amount drawn under our revolving credit facility during 2021 was $150.0 million and the weighted average effective interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 0.9%. Our revolving credit facility, unsecured term loan, and other debt agreements include financial and other covenants that may limit our operating activities in the future. As of December 31, 2021, we were in compliance with all of the financial and other covenants related to our revolving credit facility, term loan, and senior notes. Additionally, we were in compliance with all of the financial and other covenants that could trigger a loan default on our mortgage loans. If we were to breach any of these financial and other covenants and did not cure the breach within an applicable cure period, our lenders could require us to repay 48 the debt immediately and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Many of our debt arrangements, including our public notes and our revolving credit facility, are cross- defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a default under certain of our other debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares. Our organizational documents do not limit the level or amount of debt that we may incur. The following is a summary of our scheduled principal repayments as of December 31, 2021: 2022 2023 2024 2025 2026 Thereafter Unsecured Secured (In thousands) $ 744 $ 275,758 900,659 (1) (2) 383 429,254 2,115,037 3,351 3,549 3,688 48,033 26,657 256,301 Total $ 4,095 279,307 904,347 48,416 455,911 2,371,338 $ 3,721,835 $ 341,579 $ 4,063,414 (3) _____________________ 1) 2) 3) Our $300.0 million term loan matures on April 16, 2024, plus two one-year extensions, at our option. Our $1.0 billion revolving credit facility matures on January 19, 2024, plus two six-month extensions at our option. As of December 31, 2021, there was no outstanding balance under this credit facility. The total debt maturities differ from the total reported on the consolidated balance sheet due to the unamortized net debt issuance costs and premium/discount on mortgage loans, notes payable, and senior notes as of December 31, 2021. Interest Rate Hedging We may use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. We enter into derivative instruments that qualify as cash flow hedges and do not enter into derivative instruments for speculative purposes. Interest rate swaps associated with cash flow hedges are recorded at fair value on a recurring basis. Effectiveness of cash flow hedges is assessed both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income (loss) which is included in "accumulated other comprehensive loss" on the balance sheet and statement of shareholders' equity. Cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate. In addition, the default risk of the counterparty is evaluated by monitoring the credit worthiness of the counterparty which includes reviewing debt ratings and financial performance. If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected. As of December 31, 2021, we have two interest rate swap agreements that effectively fix the interest rate on a mortgage payable associated with our Hoboken portfolio at 3.67%. Our Assembly Row hotel joint venture is also a party to two interest rate swap agreements that effectively fix their debt at 5.206%. All swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted our earnings in 2021, 2020 and 2019. REIT Qualification We intend to maintain our qualification as a REIT under Section 856(c) of the Code. As a REIT, we generally will not be subject to corporate federal income taxes on income we distribute to our shareholders as long as we satisfy certain technical requirements of the Code, including the requirement to distribute at least 90% of our taxable income to our shareholders. 49 Funds From Operations Funds from operations (“FFO”) is a supplemental non-GAAP financial measure of real estate companies’ operating performance. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as follows: net income, computed in accordance with U.S. GAAP, plus real estate related depreciation and amortization, and excluding gains and losses on the sale of real estate or changes in control, net of tax, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute FFO in accordance with the NAREIT definition, and we have historically reported our FFO available for common shareholders in addition to our net income and net cash provided by operating activities. It should be noted that FFO: • • • does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); should not be considered an alternative to net income as an indication of our performance; and is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends. We consider FFO available for common shareholders a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of the real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation. We use FFO primarily as one of several means of assessing our operating performance in comparison with other REITs. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs. An increase or decrease in FFO available for common shareholders does not necessarily result in an increase or decrease in aggregate distributions because our Board of Trustees is not required to increase distributions on a quarterly basis. However, we must distribute at least 90% of our annual taxable income to remain qualified as a REIT. Therefore, a significant increase in FFO will generally require an increase in distributions to shareholders although not necessarily on a proportionate basis. The reconciliation of net income to FFO available for common shareholders is as follows: Net income.................................................................................................................... $ 269,081 Net income attributable to noncontrolling interests...................................................... (7,583) $ 135,888 $ 360,542 (4,182) (6,676) Gain on sale of real estate and change in control of interests, net................................ (89,892) (91,922) (116,393) Year Ended December 31, 2021 2020 2019 (In thousands, except per share data) Impairment charge, net ................................................................................................ Depreciation and amortization of real estate assets...................................................... Amortization of initial direct costs of leases ................................................................ Funds from operations........................................................................................... Dividends on preferred shares (1) ................................................................................ Income attributable to operating partnership units ....................................................... — 243,711 26,051 441,368 (8,042) 2,998 Income attributable to unvested shares......................................................................... (1,581) Funds from operations available for common shareholders (2)............................ $ 434,743 78,072 Weighted average number of common shares, diluted (1)(2)(3).................................. 50,728 228,850 20,415 339,777 (8,042) 3,151 (1,037) — 215,139 19,359 471,971 (7,500) 2,703 (1,355) $ 333,849 $ 465,819 76,261 75,514 Funds from operations available for common shareholders, per diluted share (2) ...... $ _____________________ 5.57 $ 4.38 $ 6.17 (1) (2) For the year ended December 31, 2019, dividends on our Series 1 preferred stock were not deducted in the calculation of FFO available to common shareholders, as the related shares were dilutive and included in "weighted average common shares, diluted." For the year ended December 31, 2020, FFO available for common shareholders includes a $11.2 million charge related to early extinguishment of debt. If this charge was excluded, our FFO available for common shareholders for 2020 would have been $345.0 million, and FFO available for common shareholders, per diluted share would have been $4.52. For the year ended December 31, 2019, FFO available for common shareholders includes an $11.9 million charge relating to the buyout of a lease at Assembly Square Marketplace. If this charge was excluded, our FFO 50 available for common shareholders for 2019 would have been $477.7 million, and FFO available for common shareholders, per diluted share would have been $6.33. (3) The weighted average common shares used to compute FFO per diluted common share includes operating partnership units that were excluded from the computation of diluted EPS. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted common share but is anti-dilutive for the computation of diluted EPS for the periods presented. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our use of financial instruments, such as debt instruments, subjects us to market risk which may affect our future earnings and cash flows, as well as the fair value of our assets. Market risk generally refers to the risk of loss from changes in interest rates and market prices. We manage our market risk by attempting to match anticipated inflow of cash from our operating, investing and financing activities with anticipated outflow of cash to fund debt payments, dividends to common and preferred shareholders, investments, capital expenditures and other cash requirements. We may enter into certain types of derivative financial instruments to further reduce interest rate risk. We use interest rate protection and swap agreements, for example, to convert some of our variable rate debt to a fixed-rate basis or to hedge anticipated financing transactions. We use derivatives for hedging purposes rather than speculation and do not enter into financial instruments for trading purposes. Interest Rate Risk The following discusses the effect of hypothetical changes in market rates of interest on interest expense for our variable rate debt and on the fair value of our total outstanding debt, including our fixed-rate debt. Interest rate risk amounts were determined by considering the impact of hypothetical interest rates on our debt. Quoted market prices were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. This analysis does not purport to take into account all of the factors that may affect our debt, such as the effect that a changing interest rate environment could have on the overall level of economic activity or the action that our management might take to reduce our exposure to the change. This analysis assumes no change in our financial structure. Fixed Interest Rate Debt The majority of our outstanding debt obligations (maturing at various times through 2046) have fixed interest rates which limit the risk of fluctuating interest rates. However, interest rate fluctuations may affect the fair value of our fixed rate debt instruments. At December 31, 2021, we had $3.7 billion of fixed-rate debt outstanding, including $56.5 million in mortgage payables that are effectively fixed by two interest rate swap agreements. If market interest rates used to calculate the fair value on our fixed-rate debt instruments at December 31, 2021 had been 1.0% higher, the fair value of those debt instruments on that date would have decreased by approximately $256.6 million. If market interest rates used to calculate the fair value on our fixed-rate debt instruments at December 31, 2021 had been 1.0% lower, the fair value of those debt instruments on that date would have increased by approximately $291.7 million. Variable Interest Rate Debt Generally, we believe that our primary interest rate risk is due to fluctuations in interest rates on our outstanding variable rate debt. At December 31, 2021, we had $300.0 million of variable rate debt outstanding (the principal balance on our unsecured term loan). Based upon this amount of variable rate debt and the specific terms, if market interest rates increased 1.0%, our annual interest expense would increase approximately $3.0 million with a corresponding decrease in our net income and cash flows for the year. Conversely, if market interest rates decreased 1.0%, our annual interest expense would decrease by approximately $3.0 million with a corresponding increase in our net income and cash flows for the year. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Our consolidated financial statements and supplementary data are included as a separate section of this Annual Report on Form 10-K commencing on page F-1 and are incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 51 ITEM 9A. CONTROLS AND PROCEDURES Management's Evaluation of Disclosure Controls and Procedures The Trust maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Trust’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of disclosure controls and procedures are met. Our management, with the participation of the Trust’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Trust’s disclosure controls and procedures as of December 31, 2021. Based on that evaluation, the Trust’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, the Trust’s disclosure controls and procedures were effective at a reasonable assurance level. Management's Evaluation of Internal Control over Financial Reporting The Trust’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the Trust’s principal executive and principal financial officers and effected by our Board of Trustees, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America (GAAP) and includes those policies and procedures that: • • • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and disposition of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of management and our Trustees; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of any of our assets in circumstances that could have a material adverse effect on our financial statements. internal control over financial reporting may not prevent or detect misstatements. Because of its inherent Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. limitations, We assessed the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2021. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on that assessment and criteria, management concluded that the Trust's internal control over financial reporting was effective as of December 31, 2021. Grant Thornton LLP, the independent registered public accounting firm that audited the Trust's consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the Trust's internal control over financial reporting, which appears on page F-2 of this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting There was no change in our internal control over financial reporting during our fourth fiscal quarter of 2021 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION None. 52 PART III Certain information required in Part III is omitted from this Report but is incorporated herein by reference from our Proxy Statement for the 2022 Annual Meeting of Shareholders (as amended or supplemented, the “Proxy Statement”). ITEM 10. TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The tables and narrative in the Proxy Statement identifying our Trustees and Board committees under the caption “Election of Trustees” and “Corporate Governance”, the sections of the Proxy Statement entitled “Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” and other information included in the Proxy Statement required by this Item 10 are incorporated herein by reference. We have adopted a Code of Ethics, which is applicable to our Chief Executive Officer and senior financial officers. The Code of Ethics is available in the Corporate Governance section of the Investors section of our website at www.federalrealty.com. ITEM 11. EXECUTIVE COMPENSATION The sections of the Proxy Statement entitled “Summary Compensation Table,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report,” “Trustee Compensation” and “Compensation Discussion and Analysis” and other information included in the Proxy Statement required by this Item 11 are incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The sections of the Proxy Statement entitled “Share Ownership” and “Equity Compensation Plan Information” and other information included in the Proxy Statement required by this Item 12 are incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND TRUSTEE INDEPENDENCE The sections of the Proxy Statement entitled “Certain Relationship and Related Transactions” and “Independence of Trustees” and other information included in the Proxy Statement required by this Item 13 are incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The sections of the Proxy Statement entitled “Ratification of Independent Registered Public Accounting Firm” and “Relationship with Independent Registered Public Accounting Firm” and other information included in the Proxy Statement required by this Item 14 are incorporated herein by reference. ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES PART IV (a)(1) Financial Statements Our consolidated financial statements and notes thereto, together with Reports of Independent Registered Public Accounting Firm are included as a separate section of this Annual Report on Form 10-K commencing on page F-1. (2) Financial Statement Schedules Our financial statement schedules are included in a separate section of this Annual Report on Form 10-K commencing on page F-32. (3) Exhibits (b) The following documents are filed as exhibits are filed as part of, or incorporated by reference info, this report: 53 Exhibit No. Description EXHIBIT INDEX 2.1 3.1 3.2 3.3 3.4 3.5 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 10.1 10.2 10.3 Merger Agreement and Plan of Reorganization, dated December 2, 2021, by and among the Predecessor, the Parent Company, and Merger Sub (previously filed as Exhibit 2.1 to the Predecessor's Current Report on Form 8-K filed on December 2, 2021 and incorporated herein by reference) Amended and Restated Declaration of Trust of the Parent Company dated January 1, 2022, as amended by the Articles of Amendment of Amended and Restated Declaration of Trust dated January 1, 2022 (filed herewith) Amended and Restated Bylaws of the Parent Company dated January 1, 2022 (previously filed as Exhibit 3.3 to our Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference) Articles of Merger, dated December 8, 2021, by and among Merger Sub and the Predecessor (previously filed as Exhibit 3.4 to the Parent Company's Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference) Certificate of Limited Partnership of Federal Realty OP LP (previously filed as Exhibit 3.1 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference) Agreement of Limited Partnership of Federal Realty OP LP, dated as of January 5, 2022, by and between Federal Realty GP LLC and the Parent Company (Previously filed as Exhibit 3.2 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference) Specimen Common Share certificate (previously filed as Exhibit 4(i) to the Predecessor’s Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference) ** Indenture dated December 1, 1993 related to the Partnership’s 7.48% Debentures due August 15, 2026; and 6.82% Medium Term Notes due August 1, 2027; (previously filed as Exhibit 4(a) to the Predecessor’s Registration Statement on Form S-3, and amended on Form S-3, filed on December 13, 1993 and incorporated herein by reference)*** ** Indenture dated September 1, 1998 related to the Partnership’s 2.75% Notes due 2023; 3.95% Notes due 2024; 4.50% Notes due 2044; 2.55% Notes due 2021; 3.625% Notes due 2046; 3.25% Notes due 2027; 3.20% Notes due 2029; 3.50% Notes due 2030; 1.25% Notes due 2026 (previously filed as Exhibit 4(a) to the Predecessor’s Registration Statement on Form S-3 filed on September 17, 1998 and incorporated herein by reference)*** **First Supplemental Indenture, dated as of January 5, 2022, by and between Federal Realty OP LP and U.S. Bank National Association, with respect to the Partnership's Indenture dated December 1, 1993 related to the Partnership's 7.48% Debentures due August 15, 2026 and 6.82% Medium Term Notes due August 1, 2027 (previously filed as Exhibit 4.1 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference) **First Supplemental Indenture, dated as of January 5, 2022, by and between Federal Realty OP LP and U.S. Bank National Association, with respect to the Partnership's Indenture dated September 1, 1998 related to the Partnership's 2.75% Notes due 2023; 3.95% Notes due 2024; 4.50% Notes due 2044; 2.55% Notes due 2021; 3.625% Notes due 2046; 3.25% Notes due 2027; 3.20% Notes due 2029; 3.50% Notes due 2030; 1.25% Notes due 2026 (previously filed as Exhibit 4.2 to our Current Report on Form 8-K filed on January 5, 2022 and incorporated herein by reference) Deposit Agreement, dated as of September 29, 2017, by and among Federal Realty Investment Trust, American Stock Transfer and Trust Company, LLC, as Depositary, and all holders from time to time of Receipt (previously filed as Exhibit 4.1 to the Predecessor's Registration Statement on Form 8-A, filed on September 29, 2017 and incorporated herein by reference) Specimen certificate relating to the 5.000% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest (previously filed as Exhibit 4.3 to the Predecessor's Registration Statement on Form 8-A, filed on September 29, 2017 and incorporated herein by reference) Description of Securities (previously filed as Exhibit 4.8 to the Predecessor's Annual Report on Form 10-K for the year ended December 31, 2019 and incorporated here by reference) * Severance Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the Predecessor's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (the "1999 1Q Form 10-Q") and incorporated herein by reference) * Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 22, 1999 (previously filed as a portion of Exhibit 10 to the Predecessor's 1999 1Q Form 10-Q and incorporated herein by reference) * Amendment to Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.12 to the Predecessor’s Annual Report on Form 10-K for the year ended December 31, 2004 (the “2004 Form 10-K”) and incorporated herein by reference) 54 Exhibit No. 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.20 10.21 Description * Health Coverage Continuation Agreement between Federal Realty Investment Trust and Donald C. Wood dated February 16, 2005 (previously filed as Exhibit 10.26 to the Predecessor's 2004 Form 10-K and incorporated herein by reference) * Severance Agreement between Federal Realty Investment Trust and Dawn M. Becker dated April 19, 2000 (previously filed as Exhibit 10.26 to the Predecessor’s 2005 2Q Form 10-Q and incorporated herein by reference) * Amendment to Severance Agreement between Federal Realty Investment Trust and Dawn M. Becker dated February 16, 2005 (previously filed as Exhibit 10.27 to the Predecessor's 2004 Form 10-K and incorporated herein by reference) Form of Restricted Share Award Agreement for long term vesting and retention awards for shares issued out of the 2010 Plan (previously filed as Exhibit 10.35 to the Predecessor's Annual Report on Form 10-K for the year ended December 31, 2010 (the "2010 Form 10-K") and incorporated herein by reference) * Amendment to Severance Agreement between Federal Realty Investment Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.26 to the Predecessor’s Annual Report on Form 10-K for the year ended December 31, 2008 (“the 2008 Form 10-K”) and incorporated herein by reference) * Second Amendment to Executive Agreement between Federal Realty Investment Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.27 to the Predecessor’s 2008 Form 10-K and incorporated herein by reference) * Amendment to Health Coverage Continuation Agreement between Federal Realty Investment Trust and Donald C. Wood dated January 1, 2009 (previously filed as Exhibit 10.28 to the Predecessor’s 2008 Form 10-K and incorporated herein by reference) * Second Amendment to Severance Agreement between Federal Realty Investment Trust and Dawn M. Becker dated January 1, 2009 (previously filed as Exhibit 10.30 to the Predecessor’s 2008 Form 10-K and incorporated herein by reference) 2010 Performance Incentive Plan (previously filed as Appendix A to the Predecessor’s Definitive Proxy Statement for the 2010 Annual Meeting of Shareholders and incorporated herein by reference) Amendment to 2010 Performance Incentive Plan (“the 2010 Plan”) (previously filed as Appendix A to the Predecessor’s Proxy Statement for the 2010 Annual Meeting of Shareholders and incorporated herein by reference) Form of Restricted Share Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2010 Plan (previously filed as Exhibit 10.34 to the Predecessor’s 2010 Form 10-K and incorporated herein by reference) Form of Option Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.38 to the Predecessor’s 2010 Form 10-K and incorporated herein by reference) Form of Option Award Agreement for front loaded awards made under Federal Realty Investment Trust’s Long- Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.39 to the Predecessor’s 2010 Form 10-K and incorporated herein by reference) Form of Option Award Agreement for basic options awarded out of the 2010 Plan (previously filed as Exhibit 10.40 to the Predecessor’s 2010 Form 10-K and incorporated herein by reference) Credit Agreement dated as of July 7, 2011, by and among the Predecessor, as Borrower, the financial institutions party thereto and their permitted assignees under Section 12.6., as Lenders, Wells Fargo Bank, National Association, as Administrative Agent, PNC Bank, National Association, as Syndication Agent, Wells Fargo Securities, LLC, as a Lead Arranger and Book Manager, and PNC Capital Markets LLC, as a Lead Arranger and Book Manager (previously filed as Exhibit 10.1 to the Trust’s Current Report on Form 8-K, filed on July 11, 2011 and incorporated herein by reference)*** Revised Form of Restricted Share Award Agreement for front loaded awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.35 to the Predecessor's Annual Report on Form 10-K for the year ended December 31, 2012 (the "2012 Form 10-K") and incorporated herein by reference) Revised Form of Restricted Share Award Agreement for long-term vesting and retention awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2010 Plan (previously filed as Exhibit 10.36 to the Predecessor's 2012 Form 10-K and incorporated herein by reference) Revised Form of Performance Share Award Agreement for shares awarded out of the 2010 Plan (previously filed as Exhibit 10.37 to the Predecessor's 2012 Form 10-K and incorporated herein by reference) 55 Exhibit No. 10.22 10.23 10.24 10.25 10.26 10.27 10.28 10.29 10.30 10.31 10.32 10.33 10.34 10.35 10.36 10.37 Description Revised Form of Restricted Share Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2010 Plan (previously filed as Exhibit 10.38 to the Predecessor's 2012 Form 10-K and incorporated herein by reference) First Amendment to the Credit Agreement, dated as of April 22, 2013, by and among the Predecessor, each of the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Predecessor's Current Report on Form 8-K, filed on April 26, 2013 and incorporated herein by reference)*** First Amendment to the Credit Agreement, dated as of April 22, 2013, by and among the Predecessor, each of the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Predecessor's Current Report on Form 8-K, filed on April 26, 2013 and incorporated herein by reference)*** Second Amendment to Credit Agreement, dated as of April 20, 2016, by and among the Predecessor, each of the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Predecessor's Current Report on Form 8-K, filed on April 26, 2016 and incorporated herein by reference)*** Severance Agreement between Federal Realty Investment Trust and Daniel Guglielmone dated August 15, 2016 (previously filed as Exhibit 10.36 to the Predecessor's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 and incorporated herein by reference) Amended and Restated Credit Agreement, dated as of July 25, 2019, by and among the Predecessor, each of the Lenders party thereto, and PNC Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Predecessor's Current Report on Form 8-K, filed on July 29, 2019 and incorporated herein by reference)*** 2020 Performance Incentive Plan (previously filed as Appendix B to the Predecessor’s Definitive Proxy Statement for the 2020 Annual Meeting of Shareholders and incorporated herein by reference) Term Loan Agreement dated as of May 6, 2020, by and among the Predecessor, as Borrower, the financial institutions party thereto and their permitted assignees under Section 12.6., as Lenders, PNC Bank, National Association, as Administrative Agent, Regions Bank, Truist Bank, and U.S. Bank National Bank Association as Co-Syndication Agents, PNC Capital Markets, LLC, Regions Capital Markets, Suntrust Robinson Humphrey, Inc., and U.S. Bank National Association, as Joint Lead Arrangers and Book Managers (previously filed as Exhibit 10.1 to the Predecessor's Current Report on Form 8-K, filed on May 6, 2020 and incorporated herein by reference)*** First Amendment to the Credit Agreement, dated as of May 6, 2020, by and among the Predecessor, each of the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.2 to the Predecessor's Current Report on Form 8-K, filed on May 6, 2020, and incorporated herein by reference)*** Form of Restricted Share Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program and the Trust’s Annual Incentive Bonus Program and basic awards with annual vesting for shares issued out of the 2020 Plan (previously filed as Exhibit 10.32 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference) Form of Option Award Agreement for awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2020 Plan (previously filed as Exhibit 10.33 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference) Form of Restricted Share Award Agreement for long-term vesting and retention awards made under Federal Realty Investment Trust’s Long-Term Incentive Award Program for shares issued out of the 2020 Plan (previously filed as Exhibit 10.34 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference) Form of Performance Share Award Agreement for shares awarded out of the 2020 Plan (previously filed as Exhibit 10.35 to the Predecessor's Annual Report on From 10-K, filed on February 11, 2021, and incorporated herein by reference) Form of Option Award Agreement for basic options awarded out of the 2020 Plan (previously filed as Exhibit 10.36 to the Predecessor's Annual Report on Form 10-K, filed on February 11, 2021, and incorporated herein by reference) Form of Performance Award Agreement for Jeffrey S. Berkes, dated February 10, 2021 (previously filed as Exhibit 10.1 to the Predecessor’s Current Report on Form 8-K, filed on February 12, 2021, and incorporated herein by reference) Amended and Restated Severance Agreement between Federal Realty Investment Trust and Jeffery S. Berkes, dated February 10, 2021 (previously filed as Exhibit 10.2 to the Predecessor's Current Report on Form 8-K, filed on February 12, 2021 and incorporated herein by reference) 56 Exhibit No. 10.38 10.39 10.40 10.41 21.1 23.1 31.1 31.2 31.3 31.4 32.1 32.2 32.3 32.4 101 Description First Amendment to Term Loan Agreement, dated as of April 16, 2021, by and among the Predecessor, as borrower, the Lenders, New Lenders, Departing Lenders (as each such term is defined therein) and PNC Bank, National Association, as Administrative Agent (previously filed as Exhibit 10.1 to the Predecessor's Current Report on From 8-K, filed on April 19, 2021, and incorporated herein by reference)*** Omnibus Assignment, Assumption and Amendment entered into between the Predecessor and the Parent Company (previously filed as Exhibit 10.1 to our Current Report on Form 8-K, filed on January 3, 2022 and incorporated herein by reference) Second Amendment to Amended and Restated Credit Agreement and Consent, dated as of January 1, 2022, by and among the Predecessor, as borrower, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (previously filed as Exhibit 10.2 to the Trust’s Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference)*** Second Amendment to Term Loan Agreement and Consent, dated as of January 1, 2022, by and among the Predecessor, as borrower, each of the lenders party thereto and PNC Bank, National Association, as administrative agent (previously filed as Exhibit 10.3 to the Trust’s Current Report on Form 8-K filed on January 3, 2022 and incorporated herein by reference)*** Subsidiaries of Federal Realty Investment Trust and Federal Realty OP LP (filed herewith) Consent of Grant Thornton LLP (filed herewith) Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith) Rule 13a-14(a) Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith) Rule 13a-14(a) Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith) Rule 13a-14(a) Certification of Chief Financial Officer - Federal Realty OP LP (filed herewith) Section 1350 Certification of Chief Executive Officer - Federal Realty Investment Trust (filed herewith) Section 1350 Certification of Chief Financial Officer - Federal Realty Investment Trust (filed herewith) Section 1350 Certification of Chief Executive Officer - Federal Realty OP LP (filed herewith) Section 1350 Certification of Chief Financial Officer - Federal Realty OP LP (filed herewith) The following materials from this Annual Report on Form 10-K for the year ended December 31, 2021, formatted in XBRL (Extensible Business Reporting Language): (1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Comprehensive Income, (3) the Consolidated Statement of Shareholders’ Equity, (4) the Consolidated Statements of Cash Flows, and (5) Notes to Consolidated Financial Statements that have been detail tagged. Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) 104 _____________________ * Management contract or compensatory plan required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K. ** Pursuant to Regulation S-K Item 601(b)(4)(iii), the Trust and the Partnership by this filing agrees, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the rights of holders of long-term debt of the Trust and the Partnership. ***Upon completion of the UPREIT reorganization described in the Explanatory Note at the beginning of this Annual Report, the Partnership became the successor to Federal Realty Investment Trust's rights and obligations under this instrument. ITEM 16. FORM 10-K SUMMARY None. 57 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized this February 10, 2022. Federal Realty Investment Trust Federal Realty OP LP By: /S/ DONALD C. WOOD Donald C. Wood Chief Executive Officer and Trustee Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated. Each person whose signature appears below hereby constitutes and appoints each of Donald C. Wood and Dawn M. Becker as his or her attorney-in-fact and agent, with full power of substitution and resubstitution for him or her in any and all capacities, to sign any or all amendments to this Report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney- in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his or her substitutes may do or cause to be done by virtue hereof. Signature Title Date /S/ DONALD C. WOOD Donald C. Wood Chief Executive Officer and Trustee (Principal Executive Officer) February 10, 2022 /S/ DANIEL GUGLIELMONE Daniel Guglielmone /S/ DAVID W. FAEDER David W. Faeder /S/ ELIZABETH I. HOLLAND Elizabeth I. Holland /S/ NICOLE Y. LAMB-HALE Nicole Y. Lamb-Hale /S/ ANTHONY P. NADER, III Anthony P. Nader, III /S/ MARK S. ORDAN Mark S. Ordan /S/ GAIL P. STEINEL Gail P. Steinel Executive Vice President - Chief Financial February 10, 2022 Officer and Treasurer (Principal Financial and Accounting Officer) Non -Executive Chairman February 10, 2022 February 10, 2022 February 10, 2022 February 10, 2022 February 10, 2022 February 10, 2022 Trustee Trustee Trustee Trustee Trustee 58 Item 8 and Item 15(a)(1) and (2) Index to Consolidated Financial Statements and Schedules Consolidated Financial Statements Report of Independent Registered Public Accounting Firm ( PCAOB ID Number 248) ............................................ Report of Independent Registered Public Accounting Firm ( PCAOB ID Number 248) ............................................ Consolidated Balance Sheets........................................................................................................................................ Consolidated Statements of Comprehensive Income ................................................................................................... Consolidated Statement of Shareholders’ Equity......................................................................................................... Consolidated Statements of Cash Flows ...................................................................................................................... Notes to Consolidated Financial Statements ................................................................................................................ Financial Statement Schedules Schedule III—Summary of Real Estate and Accumulated Depreciation..................................................................... Schedule IV—Mortgage Loans on Real Estate............................................................................................................ Page No. F-2 F-3 F-5 F-6 F-7 F-8 F-9 F-32 F-40 All other schedules have been omitted either because the information is not applicable, not material, or is disclosed in our consolidated financial statements and related notes. F-1 Report of Independent Registered Public Accounting Firm Trustees and Shareholders Federal Realty Investment Trust Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Federal Realty Investment Trust (a Maryland real estate investment trust) and subsidiaries (collectively, the "Trust") as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control-Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Trust as of and for the year ended December 31, 2021, and our report dated February 10, 2022 expressed an unqualified opinion on those financial statements. Basis for opinion The Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Evaluation of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP New York, New York February 10, 2022 F-2 Report of Independent Registered Public Accounting Firm Trustees and Shareholders Federal Realty Investment Trust Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Federal Realty Investment Trust (a Maryland real estate investment trust) and subsidiaries (collectively, the "Trust") as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedules included under Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Trust’s internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 10, 2022 expressed an unqualified opinion. Basis for opinion These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Trust’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. Lease Collectibility Assessment In order to recognize rental revenue on an accrual basis, the Trust must determine whether substantially all the rents due under a lease arrangement are collectible. If the Trust reaches the conclusion that substantially all of the rents are not collectible for a specific lease, then rental revenue under that arrangement can only be recognized when cash payment from the tenant is received. Significant judgment is exercised by the Trust when making a collectibility assessment and includes the following considerations which require challenging and subjective auditor judgment in the execution of our audit procedures: • • • Creditworthiness of the tenant Current economic conditions Historical experience with the tenant and other tenants operating in the same industry Our audit procedures related to the collectibility assessment included the following: • We assessed the design and tested the operating effectiveness of internal controls relating to the collectibility assessment process. F-3 • We evaluated management’s accounting policies related to this assessment. • We verified the completeness of the population of tenants that management evaluated. • We researched recent publicly available information such as bankruptcy filings, industry journals, and periodicals, and for any of the Trust’s tenants identified in our research, we evaluated whether such information was considered in management’s collectibility assessment. For a selection of tenant receivables where collectibility was deemed as probable, we inspected and evaluated management’s documentation supporting the collectibility assessment. • • We recalculated the aging for a selection of tenant receivable balances using supporting documentation. • For a selection of leases, we evaluated the collectibility assessment conclusion reached by management and performed the following procedures for each selection: ◦ ◦ ◦ Verified that management’s accounting policies related to the collectibility assessment were followed. Obtained from management documentation such as tenant collection history and any direct correspondence and evaluated management’s considerations supporting the collectibility assessment conclusion reached. Researched publicly available information to independently verify the completeness and accuracy of management’s information used to make the collectibility assessment. /s/ GRANT THORNTON LLP We have served as the Trust’s auditor since 2002. New York, New York February 10, 2022 F-4 Federal Realty Investment Trust Consolidated Balance Sheets ASSETS Real estate, at cost Operating (including $2,207,648 and $1,703,202 of consolidated variable interest entities, respectively) Construction-in-progress (including $18,752 and $44,896 of consolidated variable interest entities, respectively) Less accumulated depreciation and amortization (including $389,950 and $335,735 of consolidated variable interest entities, respectively) Net real estate Cash and cash equivalents Accounts and notes receivable Mortgage notes receivable, net Investment in partnerships Operating lease right of use assets Finance lease right of use assets Prepaid expenses and other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Mortgages payable, net (including $335,301 and $413,681 of consolidated variable interest entities, respectively) Notes payable, net Senior notes and debentures, net Accounts payable and accrued expenses Dividends payable Security deposits payable Operating lease liabilities Finance lease liabilities Other liabilities and deferred credits Total liabilities Commitments and contingencies (Note 7) Redeemable noncontrolling interests Shareholders’ equity Preferred shares, authorized 15,000,000 shares, $.01 par: 5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 shares issued and outstanding 5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 shares issued and outstanding Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 78,603,305 and 76,727,394 shares issued and outstanding, respectively Additional paid-in capital Accumulated dividends in excess of net income Accumulated other comprehensive loss Total shareholders’ equity of the Trust Noncontrolling interests Total shareholders’ equity TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY December 31, 2021 2020 (In thousands, except share and per share data) $ 8,814,791 $ 7,771,981 607,271 9,422,062 810,889 8,582,870 (2,531,095) 6,890,967 162,132 169,007 9,543 13,027 90,743 49,832 237,069 $ 7,622,320 (2,357,692) 6,225,178 798,329 159,780 39,892 22,128 92,248 51,116 218,953 $ 7,607,624 $ 339,993 301,466 3,406,088 235,168 86,538 25,331 72,661 72,032 206,187 4,745,464 $ 484,111 402,776 3,404,488 228,641 83,839 20,388 72,441 72,049 152,424 4,921,157 213,708 137,720 150,000 150,000 9,997 9,997 790 3,488,794 (1,066,932) (2,047) 2,580,602 82,546 2,663,148 $ 7,622,320 771 3,297,305 (988,272) (5,644) 2,464,157 84,590 2,548,747 $ 7,607,624 The accompanying notes are an integral part of these consolidated statements. F-5 Federal Realty Investment Trust Consolidated Statements of Comprehensive Income REVENUE Rental income Mortgage interest income Total revenue EXPENSES Rental expenses Real estate taxes General and administrative Depreciation and amortization Total operating expenses Impairment charge Gain on sale of real estate and change in control of interest, net of tax Year Ended December 31, 2021 2020 2019 (In thousands, except per share data) $ $ 948,842 2,382 951,224 $ 832,171 3,323 835,494 932,738 3,050 935,788 198,121 118,496 49,856 279,976 646,449 — 89,950 170,920 119,242 41,680 255,027 586,869 (57,218) 98,117 187,831 110,927 42,754 239,758 581,270 — 116,393 OPERATING INCOME 394,725 289,524 470,911 OTHER INCOME/(EXPENSE) Other interest income Interest expense Early extinguishment of debt Income (loss) from partnerships NET INCOME Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO THE TRUST Dividends on preferred shares NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS EARNINGS PER COMMON SHARE, BASIC Net income available for common shareholders Weighted average number of common shares EARNINGS PER COMMON SHARE, DILUTED Net income available for common shareholders Weighted average number of common shares NET INCOME Other comprehensive income (loss) - change in value of interest rate swaps COMPREHENSIVE INCOME Comprehensive income attributable to noncontrolling interests COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST 809 (127,698) — 1,245 269,081 (7,583) 261,498 (8,042) 253,456 3.26 77,336 3.26 77,368 269,081 3,917 272,998 (7,903) 265,095 $ $ $ $ $ 1,894 (136,289) (11,179) (8,062) 135,888 (4,182) 131,706 (8,042) 123,664 1.62 75,515 1.62 75,515 135,888 (5,302) 130,586 (3,711) 126,875 $ $ $ $ $ 1,266 (109,623) — (2,012) 360,542 (6,676) 353,866 (8,042) 345,824 4.61 74,766 4.61 74,766 360,542 (397) 360,145 (6,676) 353,469 $ $ $ $ $ The accompanying notes are an integral part of these consolidated statements. 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s s o l e v i s n e h e r p m o c r e h t O ) e r a h s r e p 4 1 . 4 $ ( s r e d l o h e r a h s n o m m o c s r e d l o h e r a h s d e r r e f e r p o t o t d e r a l c e d s d n e d i v i D d e r a l c e d s d n e d i v i D d r a d n a t s g n i t n u o c c a w e n f o n o i t p o d a 9 1 0 2 , 1 y r a u n a J 8 1 0 2 , 1 3 R E B M E C E D T A E C N A L A B s e r u t i e f r o f f o t e n , e s n e p x e n o i t a s n e p m o c d e s a b - e r a h S n a l p t n e m t s e v n i e r d n e d i v i d r e d n u d e u s s i s e r a h S s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t t e n , d e u s s i s e r a h s n o m m o C s t i n u P O f o n o i t p m e d e r d n a n o i s r e v n o C s e x a t e e y o l p m e r o f d l e h h t i w s e r a h S s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t e l b a t u b i r t t a 8 2 2 2 $ , g n i d u l c x e , e m o c n i t e N g n i d u l c x e , s p a w s e t a r t s e r e t n i f o e u l a v n i e g n a h c - s s o l e v i s n e h e r p m o c r e h t O t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t e l b a t u b i r t t a 1 7 4 $ 2 e t o N e e S - d r a d n a t s g n i t n u o c c a w e n f o n o i t p o d a 0 2 0 2 , 1 y r a u n a J o t e l b a t u b i r t t a 1 6 9 , 9 $ g n i d u l c x e , s t s e r e t n i g n i l l o r t n o c n o n m o r f s n o i t u b i r t n o C s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t t n e m t s u j d A 9 1 0 2 , 1 3 R E B M E C E D T A E C N A L A B s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r e l b a t u b i r t t a 7 9 1 , 1 $ g n i d u l c x e , s t s e r e t n i g n i l l o r t n o c n o n o t d e r a l c e d s n o i t u b i r t s i D ) e r a h s r e p 2 2 . 4 $ ( s r e d l o h e r a h s n o m m o c s r e d l o h e r a h s d e r r e f e r p o t o t d e r a l c e d s d n e d i v i D d e r a l c e d s d n e d i v i D F-7 o t e l b a t u b i r t t a 5 3 3 , 9 1 $ g n i d u l c x e , s t s e r e t n i g n i l l o r t n o c n o n m o r f s n o i t u b i r t n o C s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t t n e m t s u j d A 0 2 0 2 , 1 3 R E B M E C E D T A E C N A L A B s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r s t s e r e t n i g n i l l o r t n o c n o n f o e s a h c r u P s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t e l b a t u b i r t t a 6 9 2 4 $ , g n i d u l c x e , e m o c n i t e N g n i d u l c x e , s p a w s e t a r t s e r e t n i f o e u l a v n i e g n a h c - e m o c n i e v i s n e h e r p m o c r e h t O t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t e l b a t u b i r t t a 0 2 3 $ e l b a t u b i r t t a 8 6 2 , 5 $ g n i d u l c x e , s t s e r e t n i g n i l l o r t n o c n o n o t d e r a l c e d s n o i t u b i r t s i D ) e r a h s r e p 6 2 . 4 $ ( s r e d l o h e r a h s n o m m o c s r e d l o h e r a h s d e r r e f e r p o t o t d e r a l c e d s d n e d i v i D d e r a l c e d s d n e d i v i D o t e l b a t u b i r t t a 0 3 5 , 4 7 $ g n i d u l c x e , s t s e r e t n i g n i l l o r t n o c n o n m o r f s n o i t u b i r t n o C s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t t n e m t s u j d A 1 2 0 2 , 1 3 R E B M E C E D T A E C N A L A B s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r s e r u t i e f r o f f o t e n , e s n e p x e n o i t a s n e p m o c d e s a b - e r a h S n a l p t n e m t s e v n i e r d n e d i v i d r e d n u d e u s s i s e r a h S s t i n u P O f o n o i t p m e d e r d n a n o i s r e v n o C s e x a t e e y o l p m e r o f d l e h h t i w s e r a h S s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t t e n , d e u s s i s e r a h s n o m m o C s e r u t i e f r o f f o t e n , e s n e p x e n o i t a s n e p m o c d e s a b - e r a h S n a l p t n e m t s e v n i e r d n e d i v i d r e d n u d e u s s i s e r a h S s t s e r e t n i g n i l l o r t n o c n o n e l b a m e e d e r o t t e n , d e u s s i s e r a h s n o m m o C s t i n u P O f o n o i t p m e d e r d n a n o i s r e v n o C s e x a t e e y o l p m e r o f d l e h h t i w s e r a h S . s t n e m e t a t s d e t a d i l o s n o c e s e h t f o t r a p l a r g e t n i n a e r a s e t o n g n i y n a p m o c c a e h T Federal Realty Investment Trust Consolidated Statements of Cash Flows Year Ended December 31, 2021 2020 2019 (In thousands) OPERATING ACTIVITIES Net income ................................................................................................................. $ 269,081 Adjustments to reconcile net income to net cash provided by operating activities: $ 135,888 $ 360,542 Depreciation and amortization ............................................................................ Impairment charge .............................................................................................. Gain on sale of real estate and change in control of interest, net of tax.............. Early extinguishment of debt .............................................................................. (Income) loss from partnerships ......................................................................... Other, net............................................................................................................. Changes in assets and liabilities, net of effects of acquisitions and dispositions: Decrease (increase) in accounts receivable, net.................................................. Increase in prepaid expenses and other assets .................................................... Increase in accounts payable and accrued expenses ........................................... Increase (decrease) in security deposits and other liabilities .............................. Net cash provided by operating activities .................................................................. INVESTING ACTIVITIES Acquisition of real estate............................................................................................ Capital expenditures - development and redevelopment ........................................... Capital expenditures - other ....................................................................................... Costs associated with property sold under threat of condemnation, net .................... Proceeds from sale of real estate ................................................................................ Investment in partnerships ......................................................................................... Distribution from partnerships in excess of earnings................................................. Leasing costs .............................................................................................................. Repayment (issuance) of mortgage and other notes receivable, net .......................... Net cash used in investing activities .......................................................................... 279,976 — (89,950) — (1,245) 389 1,214 (5,607) 6,782 10,712 471,352 (366,466) (368,786) (71,728) — 137,868 (3,115) 2,970 (21,990) 31,129 (660,118) 255,027 57,218 (98,117) 11,179 8,062 6,142 (6,032) (3,260) 5,621 (1,799) 369,929 (9,589) (433,872) (68,064) (12,924) 183,461 (3,348) 1,301 (15,080) (10,268) (368,383) 239,758 — (116,393) — 2,012 169 (16,128) (10,253) 2,327 (115) 461,919 (204,516) (327,074) (82,836) — 321,997 (1,052) 2,765 (25,459) (357) (316,532) FINANCING ACTIVITIES Costs to amend revolving credit facility .................................................................... — (638) Issuance of senior notes, net of costs ......................................................................... — 1,094,283 Redemption and retirement of senior notes................................................................ — (510,360) Issuance of notes payable, net of costs....................................................................... 398,722 — Repayment of mortgages, finance leases, and notes payable..................................... (70,237) (277,643) Issuance of common shares, net of costs.................................................................... 99,177 172,981 Dividends paid to common and preferred shareholders............................................. (324,596) (335,656) Shares withheld for employee taxes........................................................................... (4,052) (2,998) Contributions from noncontrolling interests .............................................................. — 133 Distributions to and redemptions of noncontrolling interests .................................... (20,563) (9,784) 661,736 (452,967) Net cash (used in) provided by financing activities ................................................... (Decrease) increase in cash, cash equivalents, and restricted cash ................................... 663,282 (641,733) 153,614 816,896 Cash, cash equivalents, and restricted cash at beginning of year...................................... $ 816,896 Cash, cash equivalents, and restricted cash at end of year ................................................ $ 175,163 (4,012) 399,913 — — (301,029) 143,027 (313,649) (4,626) 404 (20,133) (100,105) 45,282 108,332 $ 153,614 The accompanying notes are an integral part of these consolidated statements. F-8 Federal Realty Investment Trust Notes to Consolidated Financial Statements December 31, 2021, 2020 and 2019 NOTE 1—BUSINESS AND ORGANIZATION Federal Realty Investment Trust (the “Trust”) is an equity real estate investment trust (“REIT”) specializing in the ownership, management, and redevelopment of retail and mixed-use properties. Our properties are located primarily in communities where we believe retail demand exceeds supply, in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida. As of December 31, 2021, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects. We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. See Note 15 for a discussion of the UPREIT reorganization we completed in January of 2022. Impacts of COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease ("COVID-19") as a pandemic. While we continue to expect the impact to our properties will be temporary in nature, the extent of the future effects of COVID-19 on our business, results of operations, cash flows, and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty. NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control, using the equity method of accounting. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates. Revenue Recognition and Accounts Receivable Our leases with our tenants are classified as operating leases. When collection of substantially all lease payments during the lease term is considered probable, the lease qualifies for accrual accounting. Lease payments are recognized on a straight-line basis from the point in time when the tenant controls the space through the term of the related lease. Variable lease payments relating to percentage rent are recognized at the end of the lease year or earlier if we have determined the required sales level is achieved. Real estate tax and other cost reimbursements are recognized on an accrual basis over the periods in which the related expenditures are incurred. Many of our leases contain tenant options that enable the tenant to extend the term of the lease at expiration at pre-established rental rates that often include fixed rent increases, consumer price index adjustments or other market rate adjustments from the prior base rent. For a tenant to terminate its lease agreement prior to the end of the agreed term, we may require that they pay a fee to cancel the lease agreement. Lease termination fees are generally recognized on the termination date if the tenant has relinquished control of the space. When a lease is terminated early but the tenant continues to control the space under a modified lease agreement, the lease termination fee is generally recognized evenly over the remaining term of the modified lease agreement. Lease concessions (unrelated to the COVID-19 pandemic) are evaluated to determine whether the concession represents a modification of the original lease contract. Modifications generally result in a reassessment of the lease term and lease classification, and remeasurement of lease payments received. Remeasured lease payments are recognized on a straight-line basis over the remaining term of the modified lease contract. F-9 In April 2020, the Financial Accounting Standards Board ("FASB") issued interpretive guidance relating to the accounting for lease concessions provided as a result of the COVID-19 pandemic that allows entities to treat the concession as if it was a part of the existing contract instead of applying lease modification accounting. This guidance is only applicable to the COVID-19 pandemic related lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We have elected this option relating to qualifying rent deferral and rent abatement agreements. For qualifying lease modifications with rent deferrals, this results in no change to our revenue recognition but an increase in the lease receivable balance until the deferred rent has been repaid. For qualifying lease modifications that include rent abatement concessions, this results in a direct reduction of rental income in the current period. As of December 31, 2021, we executed rent deferral agreements related to the COVID-19 pandemic representing approximately $46 million of rent. We have subsequently collected approximately $27 million of those amounts previously deferred. As of December 31, 2021, we have entered into rent abatement agreements related to the COVID-19 pandemic totaling $26 million and $48 million of rents due in 2021 and 2020, respectively. When collection of substantially all lease payments during the lease term is not considered probable, total lease revenue is limited to the lesser of revenue recognized under accrual accounting or cash received. Determining the probability of collection of substantially all lease payments during a lease term requires significant judgment. This determination is impacted by numerous factors including our assessment of the tenant’s credit worthiness, economic conditions, tenant sales productivity in that location, historical experience with the tenant and tenants operating in the same industry, future prospects for the tenant and the industry in which it operates, and the length of the lease term. If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income. If leases currently classified as not probable are subsequently changed to probable, any lease receivables (including straight-line rent receivables) are re-instated with a corresponding increase to rental income. Since March 2020, federal, state, and local governments have taken various actions to mitigate the spread of COVID-19. These actions included the closure of nonessential businesses and ordering residents to generally stay at home at the onset of the pandemic, phased re-openings and capacity limitations, and now generally lifted restrictions. While the overall economy is showing signs of recovery from the initial impacts of COVID-19, workforce shortages, global supply chain bottlenecks and shortages, inflation, as well as COVID-19 variants are impacting the recovery. Closures and restrictions, along with the general concern over the spread of COVID-19, required a significant number of tenants to close their operations or to significantly limit the amount of business they were able to conduct, which impacted their ability to timely pay rent as required under our leases and also caused many tenants to close their business permanently. As a result, we revised our collectibility assumptions for many of our tenants most significantly impacted by COVID-19. Accordingly, during the years ended December 31, 2021 and 2020, we recognized collectibility related adjustments of $24.0 million and $106.6 million, respectively. This includes changes in our collectibility assessments from probable to not probable, disputed rents, and any rent abatements directly related to COVID-19, as well as the write-off of $0.7 million and $12.7 million, respectively of straight-line rent receivables related to tenants changed to a cash basis of revenue recognition during the years ended December 31, 2021 and 2020. As of December 31, 2021 and 2020, the revenue from approximately 34% and 35% of our tenants (based on total commercial leases), respectively, is being recognized on a cash basis. As of December 31, 2021 and 2020, our straight-line rent receivables balance was $110.7 million and $103.3 million, respectively, and is included in "accounts and notes receivable, net" on our consolidated balance sheet. Other revenue recognition policies Sales of real estate are recognized generally upon the transfer of control, which usually occurs when the real estate is legally sold. When we enter into a transaction to sell a property or a portion of a property, we evaluate the recognition of the sale under ASC 610-20, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets." In accordance with ASC 610-20, we apply the guidance in ASC 606, "Revenue from Contracts with Customers," to determine whether and when control transfers and how to measure the associated gain or loss. We determine the transaction price based on the consideration we expect to receive. Variable consideration is included in the transaction price to the extent it is probable that a significant reversal of a gain recognized will not occur. We analyze the risk of a significant gain reversal and if necessary limit the amount of variable consideration recognized in order to mitigate this risk. The estimation of variable consideration requires us to make assumptions and apply significant judgment. Real Estate Land, buildings and improvements are recorded at cost. Depreciation is computed using the straight-line method. Estimated useful lives range generally from 35 years to a maximum of 50 years on buildings and major improvements. Minor improvements, furniture and equipment are capitalized and depreciated over useful lives ranging from 2 to 20 years. Maintenance and repairs that do not improve or extend the useful lives of the related assets are charged to operations as F-10 incurred. Tenant improvements are capitalized and depreciated over the life of the related lease or their estimated useful life, whichever is shorter. If a tenant vacates its space prior to contractual termination of its lease, the undepreciated balance of any tenant improvements are written off if they are replaced or have no future value. In 2021, 2020 and 2019, real estate depreciation expense was $245.1 million, $227.9 million and $215.4 million, respectively, including amounts from real estate sold. Our methodology of allocating the cost of acquisitions to assets acquired and liabilities assumed is based on estimated fair values, replacement cost and/or appraised values. When we acquire operating real estate properties, the purchase price is allocated to land, building, improvements, leasing costs, intangibles such as acquired leases, assumed debt, if any, and to current assets and liabilities acquired, if any. The value allocated to acquired leases is amortized over the related lease term and reflected as rental income in the consolidated statements of comprehensive income. We consider qualitative and quantitative factors in evaluating the likelihood of a tenant exercising a below market renewal option and include such renewal options in the calculation of acquired lease value when we consider these to be bargain renewal options. If the value of below market lease intangibles includes renewal option periods, we include such renewal periods in the amortization period utilized. If a tenant vacates its space prior to contractual termination of its lease, the unamortized balance of any acquired lease value is written off to rental income. Transaction costs related to asset acquisitions, such as broker fees, transfer taxes, legal, accounting, valuation, and other professional and consulting fees, are capitalized as part of the acquisition cost. The acquisition of an operating shopping center typically qualifies as an asset acquisition. Prior to the adoption of ASU 2016-02, "Leases," when applicable, as lessee, we classified our leases of land and building as operating or capital leases. We were required to use judgment and make estimates in determining the lease term, the estimated economic life of the property and the interest rate to be used in determining whether or not the lease meets the qualification of a capital lease. Subsequently, capital leases are now considered "finance leases." We capitalize certain costs related to the development and redevelopment of real estate including pre-construction costs, real estate taxes, insurance, construction costs and salaries and related costs of personnel directly involved, are capitalized. Additionally, we capitalize interest costs related to development and redevelopment activities. Capitalization of these costs begin when the activities and related expenditures commence and cease when the project is substantially complete and ready for its intended use at which time the project is placed in service and depreciation commences. Additionally, we make estimates as to the probability of certain development and redevelopment projects being completed. If we determine the development or redevelopment is no longer probable of completion, we expense all capitalized costs which are not recoverable. Long-Lived Assets and Impairment There are estimates and assumptions made by management in preparing the consolidated financial statements for which the actual results will be determined over long periods of time. This includes the recoverability of long-lived assets, including our properties that have been acquired or redeveloped and our investment in certain joint ventures. Management’s evaluation of impairment includes review for possible indicators of impairment as well as, in certain circumstances, undiscounted and discounted cash flow analysis. Since most of our investments in real estate are wholly-owned or controlled assets which are held for use, a property with impairment indicators is first tested for impairment by comparing the undiscounted cash flows, including residual value, to the current net book value of the property. If the undiscounted cash flows are less than the net book value, the property is written down to expected fair value. The calculation of both discounted and undiscounted cash flows requires management to make estimates of future cash flows including revenues, operating expenses, required maintenance and development expenditures, market conditions, demand for space by tenants and rental rates over long periods. Because our properties typically have a long life, the assumptions used to estimate the future recoverability of book value requires significant management judgment. Actual results could be significantly different from the estimates. These estimates have a direct impact on net income, because recording an impairment charge results in a negative adjustment to net income. Cash and Cash Equivalents We define cash and cash equivalents as cash on hand, demand deposits with financial institutions and short term liquid investments with an initial maturity, when purchased, under three months. Cash balances in individual banks may exceed the federally insured limit by the Federal Deposit Insurance Corporation (the “FDIC”). At December 31, 2021, we had $167.3 million in excess of the FDIC insured limit. F-11 Prepaid Expenses and Other Assets Prepaid expenses and other assets consist primarily of lease costs, prepaid property taxes and acquired above market leases. Capitalized lease costs are incremental direct costs incurred which were essential to originate a successful leasing arrangement and would not have been incurred had the leasing transaction not taken place. These costs include third party commissions related to obtaining a lease. Capitalized lease costs are amortized over the initial life of the related lease which generally ranges from three to ten years. We view these lease costs as part of the up-front initial investment we made in order to generate a long- term cash inflow and therefore, we classify cash outflows related to leasing costs as an investing activity in our consolidated statements of cash flows. If a tenant vacates its space prior to the contractual termination of its lease, the unamortized balance of any previously capitalized lease costs are written off. See the "Leases" section in this note for further discussion regarding the change in accounting for lease costs. Debt Issuance Costs Costs related to the issuance of debt instruments are deferred and are amortized as interest expense over the estimated life of the related issue using the straight-line method which approximates the effective interest method. If a debt instrument is paid off prior to its original maturity date, the unamortized balance of debt issuance costs are written off to interest expense or, if significant, included in “early extinguishment of debt.” Debt issuance costs related to our revolving credit facility are classified as an asset and are included in "prepaid expenses and other assets" in our consolidated balance sheets. All other debt issuance costs are presented as a direct deduction from the carrying amount of the debt liability. Derivative Instruments We may use derivative instruments to manage exposure to variable interest rate risk. We generally enter into interest rate swaps to manage our exposure to variable interest rate risk and treasury locks to manage the risk of interest rates rising prior to the issuance of debt. We enter into derivative instruments that qualify as cash flow hedges and do not enter into derivative instruments for speculative purposes. Interest rate swaps associated with cash flow hedges are recorded at fair value on a recurring basis. Effectiveness of cash flow hedges is assessed both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recorded in other comprehensive income (loss) which is included in accumulated other comprehensive income (loss) on the balance sheet and statement of shareholders' equity. Cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate. In addition, the default risk of the counterparty is evaluated by monitoring the credit worthiness of the counterparty which includes reviewing debt ratings and financial performance. If a cash flow hedge is deemed ineffective, the ineffective portion of changes in fair value of the interest rate swaps associated with cash flow hedges is recognized in earnings in the period affected. At December 31, 2021, we have two interest rate swap agreements that effectively fix the interest rate on a mortgage payable associated with our Hoboken property at 3.67%. Both swaps were designated and qualify for cash flow hedge accounting. As of December 31, 2021, our Assembly Row hotel joint venture is a party to two interest rate swap agreements that effectively fix the interest rate on the joint venture's mortgage debt at 5.206%. Both swaps were designated and qualify as cash flow hedges. Hedge ineffectiveness has not impacted earnings in 2021, 2020 and 2019. Mortgage Notes Receivable We have invested in certain mortgage loans that, because of their nature, qualify as loan receivables. At the time of investment, we did not intend for the arrangement to be anything other than a financing and did not contemplate a real estate investment. We evaluate each investment to determine whether the loan arrangement qualifies as a loan, joint venture or real estate investment and the appropriate accounting thereon. Such determination affects our balance sheet classification of these investments and the recognition of interest income derived therefrom. Mortgage notes receivable are recorded at cost, net of any valuation adjustments. Effective January 1, 2020, (upon the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," as amended and interpreted), we account for mortgage notes receivable using the "expected credit loss" model, and accordingly impairment losses are estimated and recorded for the entire life of the loan. Prior to the implementation of ASC 326, we recognized impairment losses as incurred. Interest income is accrued as earned. Mortgage notes receivable are considered past due based on the contractual terms of the note agreement. On a quarterly basis, we evaluate the collectability of each mortgage note receivable and update our expected credit loss model based on various factors which may include payment history, expected fair value of the collateral securing the loan, internal and external credit information and/or economic trends. A loan is considered impaired when it is probable that we will be unable to collect all amounts due under the existing contractual terms. When a loan is considered impaired, the amount of the loss accrual F-12 is calculated by comparing the carrying amount of the mortgage note receivable to the present value of expected future cash flows. As our loans are collateralized by mortgages, these loans have risk characteristics similar to the risks in owning commercial real estate. On May 11, 2021, two of our outstanding mortgage notes receivable were repaid. Including interest, the net proceeds were $33.8 million. As a result of the transaction, our mortgage notes receivable, net of valuation allowance, decreased $30.3 million. At December 31, 2021, we had three mortgage notes receivable with an aggregate carrying amount, net of valuation adjustments of $9.5 million, and a weighted average interest rate of 10.9%. Share Based Compensation We grant share based compensation awards to employees and trustees typically in the form of restricted common shares, common shares, and options. We measure share based compensation expense based on the grant date fair value of the award and recognize the expense ratably over the requisite service period, which is typically the vesting period. See Note 12 for further discussion regarding our share based compensation plans and policies. Variable Interest Entities Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest qualify as VIEs. VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE has both the power to direct the activities that most significantly impact economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. On January 4, 2021, we acquired our partner's interest in the Pike & Rose hotel joint venture, which was previously considered a variable interest in a VIE. See Note 3 for additional details of this transaction. Our equity method investments in the Assembly Row hotel joint venture and the La Alameda shopping center and our mortgage notes receivable are considered variable interests in a VIE. As we do not control the activities that most significantly impact the economic performance of the joint ventures related to the Assembly Row hotel, the La Alameda shopping center, or the borrower entities related to our mortgage notes receivable, we are not the primary beneficiary and do not consolidate. As of December 31, 2021 and 2020, our investment in the Assembly Row hotel and La Alameda shopping center joint ventures and maximum exposure to loss was $8.9 million and $9.9 million, respectively, and $8.8 million for our Pike & Rose hotel joint venture as of December 31, 2020. As of December 31, 2021 and 2020, our investment in mortgage notes receivable and maximum exposure to loss was $9.5 million and $39.9 million, respectively. In addition, we have 21 entities that meet the criteria of a VIE in which we hold a variable interest. For each of these entities, we control the significant operating decisions and consequently have the power to direct the activities that most significantly impact the economic performance of the entities. As we also have the obligation to absorb the majority of the losses and/or the right to receive a majority of the benefits for each of these entities, all are consolidated in our financial statements. Net real estate assets related to VIEs included in our consolidated balance sheets were approximately $1.8 billion and $1.4 billion as of December 31, 2021 and 2020, respectively, and mortgages related to VIEs included in our consolidated balance sheets were approximately $335.3 million and $413.7 million, as of December 31, 2021 and 2020, respectively. Redeemable Noncontrolling Interests We have certain noncontrolling interests that are redeemable for cash upon the occurrence of an event that is not solely in our control and therefore are classified outside of permanent equity. We adjust the carrying amounts of these noncontrolling interests that are currently redeemable to redemption value at the balance sheet date. Adjustments to the carrying amount to reflect changes in redemption value are recorded as adjustments to additional paid-in capital in shareholders' equity. These amounts are classified within the mezzanine section of the consolidated balance sheets. F-13 The following table provides a rollforward of the redeemable noncontrolling interests: Year Ended December 31, 2021 2020 (In thousands) Beginning balance.............................................................................................................................. $ 137,720 $ 139,758 Contributions ................................................................................................................................. Net income..................................................................................................................................... Other comprehensive income (loss) - change in value of interest rate swaps ............................... Distributions & redemptions.......................................................................................................... Change in redemption value .......................................................................................................... 74,530 4,296 320 (5,268) 2,110 19,335 2,228 (471) (1,197) (21,933) Ending balance ................................................................................................................................... $ 213,708 $ 137,720 Leases We adopted ASC 842 effective January 1, 2019 under the modified retrospective approach and elected the optional transition method to apply the provisions of ASC 842 as of the adoption date, rather than the earliest period presented. We elected to apply certain adoption related practical expedients for all leases that commenced prior to the election date. These practical expedients included not reassessing whether any expired or existing contracts were or contained leases; not reassessing the lease classification for any expired or existing leases; and not reassessing initial direct costs for any existing leases. We also elected the practical expedient for lessors to combine our lease and non-lease components (primarily impacts common area maintenance recoveries). Lessor We recorded a charge to the opening accumulated dividends in excess of net income of $7.1 million in 2019 as a result of the adoption of ASC 842. This charge was attributable to the write off certain direct leasing costs recorded under the previous lease accounting rules for leases which had not commenced as well as the write off of unreserved receivables (including straight-line receivables) for leases where we had determined the collection of substantially all the lease payments required for the term is not probable. Lessee We have ground leases at 12 properties which are accounted for as operating leases. The operating lease right of use ("ROU") assets and related liabilities are shown separately on the face of our consolidated balance sheet and reflect the present value of the minimum lease payments. A key input in the calculation is the discount rate. As the rate implied in the lease agreements is not readily determinable, we utilize our incremental borrowing rate that correspond to the remaining term of the lease, our credit spread, and and adjustment to reflect the collateralized payment terms present in the lease. Our operating lease agreements may include options to extend the lease term or terminate it early. We include options to extend or terminate leases in the ROU operating lease asset and liability when it is reasonably certain we will exercise these options. Operating lease expense is recognized on a straight-line basis over the non-cancellable lease term and is included in rental expenses in our consolidated statements of operations. We elected to apply the short-term lease exemption within ASC 842, and as such we have not recorded an ROU asset or lease liability for leases with terms of less than 12 months. Income Taxes We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our taxable income have been and are generally expected to be immaterial. We are obligated to pay state taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material. We have elected to treat certain of our subsidiaries as taxable REIT subsidiaries, which we refer to as a TRS. In general, a TRS may engage in any real estate business and certain non-real estate businesses, subject to certain limitations under the Internal Revenue Code of 1986, as amended (the “Code”). A TRS is subject to federal and state income taxes. Our TRS activities have not been material. F-14 With few exceptions, we are no longer subject to U.S. federal, state, and local tax examinations by tax authorities for years before 2017. As of December 31, 2021 and 2020, we had no material unrecognized tax benefits. While we currently have no material unrecognized tax benefits, as a policy, we recognize penalties and interest accrued related to unrecognized tax benefits as income tax expense. Segment Information Our primary business is the ownership, management, and redevelopment of retail and mixed-use properties. We review operating and financial information for each property on an individual basis and therefore, each property represents an individual operating segment. We evaluate financial performance using property operating income, which consists of rental income, and mortgage interest income, less rental expenses and real estate taxes. No individual commercial or residential property constitutes more than 10% of our revenues or property operating income and we have no operations outside of the United States of America. Therefore, we have aggregated our properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in major metropolitan areas, and have similar tenant mixes. Forward Equity Sales On February 24, 2021, we replaced our existing at-the-market (“ATM”) equity program with a new ATM equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $500.0 million. The new ATM equity program also allows shares to be sold through forward sales contracts. Our forward sales contracts currently meet all the conditions for equity classification; and therefore, we record common stock on the settlement date at the purchase price contemplated by the contract. Furthermore, we consider the potential dilution resulting from forward sales contracts in our earnings per share calculations. We use the treasury method to determine the dilution, if any, from the forward sales contracts during the period of time prior to settlement. See Note 8 to the consolidated financial statements for details of our 2021 forward sales transactions. F-15 Recent Accounting Pronouncements Issued in 2021: ASU 2021-05, July 2021, Lessors - Certain Leases with Variable Lease Payments (Topic 842) Issued in 2020: ASU 2020-04, March 2020, Reference Rate Reform (Topic 848) ASU 2020-06, August 2020, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity This ASU amends the lessor lease classification in ASC 842 for leases that include variable lease payments that are not based on an index or rate. Under the amended guidance, lessors will classify a lease with variable payments that do not depend on an index or rate as an operating lease if the lease would have been classified as a sales-type lease or a direct financing lease under the previous ASU 842 classification criteria, and sales-type or direct financing lease classification would result in a Day 1 loss. This guidance is effective for annual periods beginning after December 15, 2021, and interim periods therein. This ASU provides companies with optional practical expedients to ease the accounting burden for contract modifications associated with transitioning away from LIBOR and other interbank offered rates that are expected to be discontinued as part of reference rate reform. For hedges, the guidance generally allows changes to the reference rate and other critical terms without having to de-designate the hedging relationship, as well as allows the shortcut method to continue to be applied. For contract modifications, changes in the reference rate or other critical terms will be treated as a continuation of the prior contract. This guidance can be applied immediately, however, is generally only available through December 31, 2022. This ASU simplifies the accounting for convertible instruments by removing the requirements to separately present certain conversion features in equity, simplifying the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification, and generally requiring the use of the if-converted method for all convertible instruments in the diluted EPS calculation and include the effect of potential share settlement (if the effect is more dilutive). The guidance is effective for annual period beginning after December 15, 2021, and interim periods therein. The adoption of this standard does not have an impact to our consolidated financial statements. We are still evaluating the impact of reference rate reform and whether we will apply any of these practical expedients. The adoption of this standard does not have an impact to our consolidated financial statements. Consolidated Statements of Cash Flows—Supplemental Disclosures The following table provides supplemental disclosures related to the Consolidated Statements of Cash Flows: F-16 SUPPLEMENTAL DISCLOSURES: Total interest costs incurred Interest capitalized Interest expense Cash paid for interest, net of amounts capitalized Cash paid for income taxes NON-CASH INVESTING AND FINANCING TRANSACTIONS: DownREIT operating partnership units issued with acquisition Mortgage loans assumed with acquisition (1) DownREIT operating partnership units redeemed for common shares Settlement of partner loan receivable via dilution of partner interests Shares issued under dividend reinvestment plan Year Ended December 31, 2021 2020 2019 (In thousands) $ $ $ $ $ $ $ $ $ 150,324 (22,626) 127,698 123,585 386 $ $ $ $ — $ — $ 7,545 $ — $ 159,718 (23,429) 136,289 130,248 580 18,920 8,903 $ $ $ $ $ $ — $ — $ 1,727 $ 1,734 $ 130,110 (20,487) 109,623 106,180 483 — 98,041 14,105 5,379 1,784 (1) See our Annual Report on Form 10-K for the year ended December 31, 2020 for additional disclosures relating to the mortgages entered into and assumed as a result of the Hoboken acquisition. RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: Cash and cash equivalents ....................................................................................................... $ Restricted cash (1) ................................................................................................................... Total cash, cash equivalents, and restricted cash..................................................................... $ 162,132 13,031 175,163 $ $ 798,329 18,567 816,896 (1) Restricted cash balances are included in "prepaid expenses and other assets" on our consolidated balance sheets. December 31, 2021 2020 (In thousands) NOTE 3—REAL ESTATE 2021 Property Acquisitions On January 4, 2021, we acquired our partner's 20% interest in our joint venture arrangement related to the Pike & Rose hotel for $2.3 million, and repaid the $31.5 million mortgage loan encumbering the hotel. As a result of the transaction, we gained control of the hotel, and effective January 4, 2021, we have consolidated this asset. We also recognized a gain on acquisition of the controlling interest of $2.1 million related to the difference between the carrying value and fair value of the previously held equity interest. On February 22, 2021, we acquired the fee interest at our Mount Vernon Plaza property in Alexandria, Virginia for $5.6 million. As a result of this transaction, the "operating lease right of use assets" and "operating lease liabilities" on our consolidated balance sheet decreased by $9.8 million. We now own the entire fee interest on this property. During the year ended December 31, 2021, we acquired the following properties: Date Acquired Property City/State April 30, 2021 Chesterbrook (1) McLean, Virginia June 1, 2021 June 14, 2021 June 14, 2021 Grossmont Center (1) La Mesa, California Camelback Colonnade (1) Phoenix, Arizona Hilton Village (1) Scottsdale, Arizona September 2, 2021 Twinbrooke Shopping Centre Fairfax, Virginia Gross Leasable Area (GLA) (in square feet) 90,000 933,000 642,000 93,000 106,000 Ownership % Gross Value (in millions) 80 % $ 60 % $ 98 % $ 98 % $ 100 % $ 32.1 (2) 175.0 (3) 162.5 (4) 37.5 (5) 33.8 (6) (1) These acquisitions were completed through newly formed joint ventures, for which we own the controlling interest listed above, and therefore, these properties are consolidated in our financial statements. F-17 (2) Approximately $1.9 million and $0.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $8.0 million of net assets acquired were allocated to other liabilities for "below market leases." (3) Approximately $12.3 million and $2.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $14.7 million of net assets acquired were allocated to other liabilities for "below market leases." (4) Approximately $11.6 million of net assets acquired were allocated to other assets for "acquired lease costs" and $28.3 million were allocated to other liabilities for "below market leases." (5) The land is controlled under a long-term ground lease that expires on December 31, 2076, for which we have recorded a $10.4 million "operating lease right of use asset" (net of a $1.3 million above market liability) and an $11.6 million "operating lease liability." Approximately $2.7 million and $1.1 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $3.6 million were allocated to other liabilities for "below market leases." (6) Approximately $1.2 million and $0.3 million of net assets acquired were allocated to other assets for "acquired lease costs" and "above market leases," respectively, and $2.7 million of net assets acquired were allocated to other liabilities for "below market leases." 2021 Property Dispositions During the year ended December 31, 2021, we sold two properties and a portion of three properties for a total sales price of $141.6 million, which resulted in a net gain of $88.3 million. 2020 Property Acquisitions Date Acquired Property City/State January 10, 2020 February 12, 2020 Fairfax Junction Hoboken (2 mixed-use buildings) Fairfax, Virginia Hoboken, New Jersey Gross Leasable Area (GLA) (in square feet) 49,000 12,000 Purchase Price (in millions) $ $ 22.3 (1) 14.3 (2) (1) This property is adjacent to, and is operated as part of the property acquired in 2019. The purchase price was paid with a combination of cash and the issuance of 163,322 downREIT operating partnership units. Approximately $0.5 million and $0.4 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. (2) The purchase price includes the assumption of $8.9 million of mortgage debt, and is in addition to the 37 buildings previously acquired in 2019, and was completed through the same joint venture. Less than $0.1 million and approximately $3.3 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. 2020 Impairment On September 1, 2020, the $60.6 million non-recourse mortgage loan on The Shops at Sunset Place matured. The mortgage was not repaid, and thus the lender declared the loan in default. We evaluated our long-term plans for the property, taking into account current market conditions and prospective development and redevelopment returns, as well as the impact of COVID-19 on the revenue prospects for the property, and concluded we did not expect to move forward with the planned redevelopment or repay the mortgage balance, and thus, did not expect to be long term holders of the asset. Given these expectations, we recorded an impairment charge of $57.2 million during the third quarter of 2020. The fair value estimate used to determine the impairment charge was determined by market comparable data and discounted cash flow analyses. The cash flows utilized in such analyses are comprised of unobservable inputs which include forecasted rental revenue and expenses based upon market conditions and future expectations. The capitalization rates and discount rates utilized in such analyses are based upon unobservable rates that we believe to be within a reasonable range of current market rates for the property. Based on these inputs, we have determined that the $57 million estimated valuation of the property is classified within Level 3 of the fair value hierarchy. On December 31, 2020, we sold The Shops at Sunset Place for $65.5 million and repaid the mortgage loan. The resulting gain of $9.2 million is included in the cumulative 2020 gain of $98.1 million noted in the 2020 Property Dispositions section below. F-18 2020 Property Dispositions During the year ended December 31, 2020, we sold three properties (including The Shops at Sunset Place discussed above) and one building for a total sales price of $186.1 million, which resulted in a net gain of $98.1 million. During the year ended December 31, 2020, we closed on the sale of the remaining two condominium units at our Pike & Rose property, receiving proceeds net of closing costs of $2.1 million. NOTE 4—ACQUIRED LEASES Acquired lease assets comprise of above market leases where we are the lessor and below market leases where we are the lessee. Acquired lease liabilities comprise of below market leases where we are the lessor and above market leases where we are the lessee. As a lessor, acquired above market leases are included in prepaid expenses and other assets, and acquired below market leases are included in other liabilities and deferred credits. In accordance with our adoption of ASC Topic 842, acquired below market leases and acquired above market leases where we are the lessee are included in right of use assets. The following is a summary of our acquired lease assets and liabilities: Above market leases, lessor Below market leases, lessee Total Below market leases, lessor Above market leases, lessee Total December 31, 2021 December 31, 2020 Cost Accumulated Amortization Cost Accumulated Amortization $ $ $ $ 46,951 34,604 81,555 $ $ (230,059) $ (10,347) (240,406) $ (in thousands) (33,617) $ (5,019) (38,636) $ 78,327 2,654 80,981 $ $ 43,560 34,604 78,164 $ $ (174,582) $ (9,084) (183,666) $ (31,661) (4,190) (35,851) 68,286 2,116 70,402 The value allocated to acquired leases where we are the lessor is amortized over the related lease term and reflected as additional rental income for below market leases or a reduction of rental income for above market leases in the consolidated statements of comprehensive income. The related amortization of acquired leases where we are the lessee is reflected as additional rental expense for below market leases or a reduction of rental expenses for above market leases in the consolidated statements of comprehensive income. The following is a summary of acquired lease amortization: Amortization of above market leases, lessor Amortization of below market leases, lessor Net increase in rental income Amortization of below market leases, lessee Amortization of above market leases, lessee Net increase in rental expense Year Ended December 31, 2021 2020 (in thousands) 2019 $ $ $ $ (3,150) $ 11,897 8,747 $ 828 (538) 290 $ $ (4,060) $ 8,406 4,346 $ 828 (525) 303 $ $ (3,239) 9,623 6,384 828 (525) 303 The following is a summary of the remaining weighted average amortization period for our acquired lease assets and acquired lease liabilities: Above market leases, lessor Below market leases, lessee Below market leases, lessor Above market leases, lessee December 31, 2021 3.2 years 37.6 years 18.1 years 17.6 years The amortization for acquired leases during the next five years and thereafter, assuming no early lease terminations, is as follows: F-19 Year ending December 31, 2022 2023 2024 2025 2026 Thereafter Acquired Lease Assets Acquired Lease Liabilities (In thousands) $ $ 3,674 3,446 3,139 2,126 1,931 28,603 42,919 $ $ 13,541 12,962 12,450 8,984 8,622 102,866 159,425 F-20 NOTE 5—DEBT The following is a summary of our total debt outstanding as of December 31, 2021 and 2020: Description of Debt Mortgages payable Sylmar Towne Center Plaza Del Sol THE AVENUE at White Marsh Montrose Crossing Azalea Bell Gardens Plaza El Segundo The Grove at Shrewsbury (East) Brook 35 Hoboken (24 Buildings) (1) Various Hoboken (14 Buildings) Chelsea Hoboken (1 Building) (3) Subtotal Net unamortized debt issuance costs and premium Total mortgages payable, net Notes payable Revolving credit facility Term loan Various Subtotal Net unamortized debt issuance costs Total notes payable, net Senior notes and debentures 2.75% notes 3.95% notes 1.25% notes 7.48% debentures 3.25% notes 6.82% medium term notes 3.20% notes 3.50% notes 4.50% notes 3.625% notes Subtotal Principal Balance as of December 31, 2021 2020 Stated Interest Rate as of December 31, 2021 Stated Maturity Date as of December 31, 2021 $ (Dollars in thousands) — $ — — — 40,000 12,127 125,000 43,600 11,500 56,450 31,817 4,851 16,234 341,579 16,236 8,041 52,705 65,596 40,000 12,408 125,000 43,600 11,500 56,450 32,705 5,234 16,560 486,035 (1,586) 339,993 (1,924) 484,111 5.39 % 5.23 % 3.35 % 4.20 % 3.73 % 4.06 % 3.83 % 3.77 % 4.65 % LIBOR + 1.95% June 6, 2021 December 1, 2021 January 1, 2022 January 10, 2022 November 1, 2025 August 1, 2026 June 5, 2027 September 1, 2027 July 1, 2029 December 15, 2029 Various (2) Various through 2029 January 15, 2031 July 1, 2042 5.36 % 3.75 % — 300,000 2,635 302,635 (1,169) 301,466 275,000 600,000 400,000 29,200 475,000 40,000 400,000 400,000 550,000 250,000 3,419,200 — LIBOR + 0.775% LIBOR + 0.80% January 19, 2024 April 16, 2024 11.31 % Various through 2028 400,000 3,270 403,270 (494) 402,776 275,000 600,000 400,000 29,200 475,000 40,000 400,000 400,000 550,000 250,000 3,419,200 2.75 % 3.95 % 1.25 % 7.48 % 3.25 % 6.82 % 3.20 % 3.50 % 4.50 % 3.625 % June 1, 2023 January 15, 2024 February 15, 2026 August 15, 2026 July 15, 2027 August 1, 2027 June 15, 2029 June 1, 2030 December 1, 2044 August 1, 2046 Net unamortized debt issuance costs and premium Total senior notes and debentures Total debt _____________________ (13,112) 3,406,088 (14,712) 3,404,488 $ 4,047,547 $ 4,291,375 1) 2) 3) On November 26, 2019, we entered into two interest rate swap agreements that fix the interest rate on the mortgage loan at 3.67%. The interest rates on these mortgages range from 3.91% to 5.00%. This mortgage loan has a fixed interest rate, however, the rate resets every five years until maturity. The current interest rate is fixed until July 1, 2022, and the loan is prepayable at par anytime after this date. On April 16, 2021, we repaid $100.0 million of our existing $400.0 million term loan, amended the agreement on the remaining $300.0 million to lower the current spread over LIBOR from 135 basis points to 80 basis points based on our current credit rating, and extended the initial maturity date to April 16, 2024, along with two one-year extensions, at our option. F-21 In 2021, we repaid the following mortgage loans, at par, prior to their original maturity date: Property Sylmar Towne Center Plaza Del Sol Montrose Crossing The AVENUE at White Marsh Repayment Date Principal (in millions) February 5, 2021 $ September 1, 2021 $ October 12, 2021 $ November 2, 2021 $ 16.2 7.9 64.1 52.7 During 2021, 2020 and 2019, the maximum amount of borrowings outstanding under our revolving credit facility was $150.0 million, $990.0 million and $116.5 million, respectively. The weighted average amount of borrowings outstanding was $19.6 million, $138.5 million and $26.8 million, respectively, and the weighted average interest rate, before amortization of debt fees, was 0.9%, 1.5% and 3.2%, respectively. The revolving credit facility requires an annual facility fee of $1.0 million. At December 31, 2021 and December 31, 2020, our revolving credit facility had no balance outstanding. Our revolving credit facility, term loan, and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders’ equity and debt coverage ratios and a maximum ratio of debt to net worth. As of December 31, 2021, we were in compliance with all default related debt covenants. Scheduled principal payments on mortgages payable, notes payable, senior notes and debentures as of December 31, 2021 are as follows: Year ending December 31, 2022 2023 2024 2025 2026 Thereafter Mortgages Payable Notes Payable Senior Notes and Debentures Total Principal $ $ 3,351 3,549 3,688 48,033 26,657 256,301 341,579 (In thousands) $ 744 758 300,659 (1)(2) 383 54 37 $ — $ 275,000 600,000 — 429,200 2,115,000 4,095 279,307 904,347 48,416 455,911 2,371,338 $ 302,635 $ 3,419,200 $ 4,063,414 (3) _____________________ (1) Our $300.0 million term loan matures on April 16, 2024 plus two one-year extensions, at our option. (2) Our $1.0 billion revolving credit facility matures on January 19, 2024, plus two six-month extensions at our option. As of December 31, 2021, there was no balance outstanding under this credit facility. (3) The total debt maturities differ from the total reported on the consolidated balance sheet due to the unamortized net debt issuance costs and premium/discount on mortgage loans, notes payable, and senior notes as of December 31, 2021. NOTE 6—FAIR VALUE OF FINANCIAL INSTRUMENTS A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value are as follows: 1. 2. 3. Level 1 Inputs—quoted prices in active markets for identical assets or liabilities Level 2 Inputs—observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3 Inputs—prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Except as disclosed below, the carrying amount of our financial instruments approximates their fair value. The fair value of our mortgages payable, notes payable and senior notes and debentures is sensitive to fluctuations in interest rates. Quoted market F-22 prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows: December 31, 2021 December 31, 2020 Carrying Value Fair Value Carrying Value Fair Value (In thousands) Mortgages and notes payable....................................................... $ 641,459 Senior notes and debentures......................................................... $ 3,406,088 $ 655,864 $ 886,887 $ 879,390 $ 3,649,776 $ 3,404,488 $ 3,761,465 As of December 31, 2021, we have two interest rate swap agreements with notional amounts of $56.5 million that are measured at fair value on a recurring basis. The interest rate swap agreements fix the interest rate on $56.5 million of mortgage payables at 3.67% through December 15, 2029. The fair values of the interest rate swap agreements are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. The fair value of our swaps at December 31, 2021 was a liability of $1.5 million and is included in "other liabilities and deferred credits" on our consolidated balance sheet. During 2021, the value of our interest rate swaps increased $3.2 million (including $0.9 million reclassified from other comprehensive income to interest expense). A summary of our financial liabilities that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows: December 31, 2021 December 31, 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (In thousands) Interest rate swaps .................... $ — $ (1,511) $ — $ (1,511) $ — $ (4,711) $ — $ (4,711) One of our equity method investees has two interest rate swaps which qualify as cash flow hedges. At December 31, 2021 and December 31, 2020, our share of the change in fair value of the related swaps included in "accumulated other comprehensive loss" was an increase of $0.7 million and a decrease of $0.5 million, respectively. NOTE 7—COMMITMENTS AND CONTINGENCIES We are sometimes involved in lawsuits, warranty claims, and environmental matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters. We are currently a party to various legal proceedings. We accrue a liability for litigation if an unfavorable outcome is probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range; however, if no amount within the range is a better estimate than any other amount, the minimum within the range is accrued. Legal fees related to litigation are expensed as incurred. We do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in results of operations; however, litigation is subject to inherent uncertainties. Also under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us (1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by us. We are self-insured for general liability costs up to predetermined retained amounts per claim, and we believe that we maintain adequate accruals to cover our retained liability. We currently do not maintain third party stop-loss insurance policies to cover liability costs in excess of predetermined retained amounts. Our accrual for self-insurance liability is determined by management and is based on claims filed and an estimate of claims incurred but not yet reported. Management considers a number of factors, including third-party actuarial analysis, previous experience in our portfolio, and future increases in costs of claims, when making these determinations. If our liability costs exceed these accruals, it will reduce our net income. We reserve for estimated losses, if any, associated with warranties given to a buyer at the time real estate is sold or other potential liabilities relating to that sale, taking any insurance policies into account. These warranties may extend up to ten years and require significant judgment. If changes in facts and circumstances indicate that warranty reserves are understated, we will F-23 accrue additional reserves at such time a liability has been incurred and the costs can be reasonably estimated. Warranty reserves are released once the legal liability period has expired or all related work has been substantially completed. On December 11, 2019, we received proceeds related to the sale under the threat of condemnation at San Antonio Center as discussed in our Annual Report on Form 10-K for the year ended December 31, 2019. We have indemnified the condemning authority for all costs incurred related to the condemnation proceedings including any payments required to tenants at the property and expect the process will take several years to complete. During 2021, we did not incur any payments, and consequently, at December 31, 2021, our liability remains $32.6 million to reflect our estimate of the remaining consideration. At December 31, 2021 and 2020, our reserves for general liability costs were $5.2 million and $4.6 million, respectively, and are included in “accounts payable and accrued expenses” in our consolidated balance sheets. Any potential losses which exceed our estimates would result in a decrease in our net income. During 2021 and 2020, we made payments from these reserves of $1.5 million and $0.8 million, respectively. Although we consider the reserve to be adequate, there can be no assurance that the reserve will prove to be adequate over-time to cover losses due to the difference between the assumptions used to estimate the reserve and actual losses. At December 31, 2021, we had letters of credit outstanding of approximately $4.8 million. As of December 31, 2021 in connection with capital improvement, development, and redevelopment projects, the Trust has contractual obligations of approximately $319.2 million. We are obligated under operating lease agreements on several shopping centers and one office lease requiring minimum annual payments as follows, as of December 31, 2021: Year ending December 31, 2022 2023 2024 2025 2026 Thereafter Total future minimum operating lease payments Less amount representing interest Operating lease liabilities (In thousands) $ $ 5,191 5,278 5,455 5,326 4,831 177,395 203,476 (130,815) 72,661 Future minimum lease payments and their present value for properties under finance leases as of December 31, 2021, are as follows: Year ending December 31, 2022 2023 2024 2025 2026 Thereafter Total future minimum finance lease payments Less amount representing interest Finance lease liabilities F-24 (In thousands) $ $ 5,810 60,013 1,013 1,013 1,013 79,824 148,686 (76,654) 72,032 A master lease for Mercer Mall includes a fixed purchase price option for $55 million in 2023. If we fail to exercise our purchase option, the owner of Mercer Mall has a put option which would require us to purchase Mercer Mall for $60 million in 2025. Under the terms of the Congressional Plaza partnership agreement, a minority partner has the right to require us and the other minority partner to purchase its 26.63% interest in Congressional Plaza at the interest’s then-current fair market value. If the other minority partner defaults in their obligation, we must purchase the full interest. Based on management’s current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from approximately $67 million to $71 million. A master lease for Melville Mall, as amended on October 14, 2021, includes a fixed price put option at any time prior to June 30, 2025, requiring us to purchase Melville Mall for approximately $3.6 million. Additionally, we have the right to purchase Melville Mall in 2026 for approximately $3.6 million. The consideration is net of a contract amendment fee to be paid by the landlord. Two of the members in Plaza El Segundo have the right to require us to purchase their 10.0% and 11.8% ownership interests at the interests' then-current fair market value. If the members fail to exercise their put options, we have the right to purchase each of their interests on or after December 30, 2026 at fair market value. Based on management’s current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from approximately $25 million to $28 million. The other member in The Grove at Shrewsbury and Brook 35 has the right to require us to purchase all of its approximately 4.1% interest in The Grove at Shrewsbury and approximately 6.5% interest in Brook 35 at the interests' then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $6 million to $7 million. Effective September 18, 2023, the other member in Hoboken has the right to require us to purchase all of its 10.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair market value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $9 million to $10 million. Effective June 14, 2026, the other member in Cambelback Colonnade and Hilton Village has the right to require us to purchase all of its 2.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $4 million to $5 million. Effective June 1, 2029, the other member in Grossmont Center has the right to require us to purchase all of its 40.0% ownership interest at the interest's then-current fair market value. Based on management's current estimate of fair value as of December 31, 2021, our estimated maximum liability upon exercise of the put option would range from $68 million to $73 million. Under the terms of certain partnership agreements, the partners have the right to exchange their operating partnership units for cash or the same number of our common shares, at our option. A total of 666,831 downREIT operating partnership units are outstanding which have a total fair value of $90.9 million, based on our closing stock price on December 31, 2021. NOTE 8—SHAREHOLDERS’ EQUITY We have a Dividend Reinvestment Plan (the “Plan”), whereby shareholders may use their dividends and optional cash payments to purchase shares. In 2021, 2020 and 2019, 19,758 shares, 24,491 shares, and 15,909 shares, respectively, were issued under the Plan. As of December 31, 2021, 2020, and 2019, we had 6,000,000 Depositary Shares outstanding, each representing 1/1000th interest of 5.0% Series C Cumulative Redeemable Preferred Share, par value $0.01 per share ("Series C Preferred Shares"), at the liquidation preference of $25.00 per depositary share (or $25,000 per Series C Preferred share). The Series C Preferred Shares accrue dividends at a rate of 5.0% of the $25,000 liquidation preference per year and are redeemable at our option on or after September 29, 2022. Additionally, they are not convertible and holders of these shares generally have no voting rights, unless we fail to pay dividends for six or more quarters. As of December 31, 2021, 2020, and 2019, we had 399,896 shares of 5.417% Series 1 Cumulative Convertible Preferred Shares (“Series 1 Preferred Shares”) outstanding that have a liquidation preference of $25 per share and par value $0.01 per share. The Series 1 Preferred Shares accrue dividends at a rate of 5.417% per year and are convertible at any time by the holders to our common shares at a conversion rate of $104.69 per share. The Series 1 Preferred Shares are also convertible under certain circumstances at our election. The holders of the Series 1 Preferred Shares have no voting rights. On February 24, 2021, we replaced our existing at-the-market (“ATM”) equity program with a new ATM equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $500.0 million. On F-25 May 7, 2021, we amended this ATM equity program, which resets the limit to $500.0 million. The new ATM equity program also allows shares to be sold through forward sales contracts. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay indebtedness and/or for general corporate purposes. For the year ended December 31, 2021, we issued 847,471 common shares at a weighted average price per share of $104.19 for net cash proceeds of $87.0 million including paying $0.9 million in commissions and $0.4 million in additional offering expenses related to the sales of these common shares. For the year ended December 31, 2020, we issued 1,080,804 common shares at a weighted average price per share of $92.51 for net cash proceeds of $98.8 million and paid $1.0 million in commissions and $0.1 million in additional offering expenses related to the sales of these common shares. We also entered into forward sales contracts for the year ended December 31, 2021 for 2,999,955 common shares under our ATM equity program at a weighted average offering price of $120.22. During 2021, we settled a portion of the forward sales agreements entered into during the year by issuing 796,300 common shares for net proceeds of $85.7 million. The forward price that we will receive upon physical settlement of the remaining forward sale agreements is subject to the adjustment for (i) commissions, (ii) a floating interest rate factor equal to a specified daily rate less a spread, (iii) the forward purchasers' stock borrowing costs and (iv) scheduled dividends during the term of the forward sale agreements. The remaining open forward shares may be settled at any time on or before multiple required settlement dates ranging from June 2022 to December 2022. As of December 31, 2021, we had the capacity to issue up to $175.0 million in common shares under our ATM equity program. NOTE 9—DIVIDENDS The following table provides a summary of dividends declared and paid per share: Year Ended December 31, 2021 2020 2019 Declared Common shares...................................................................... $ 4.260 5.417% Series 1 Cumulative Convertible Preferred shares ... $ 1.354 5.0% Series C Cumulative Redeemable Preferred shares (1) $ 1.250 Paid Declared Paid Declared Paid $ 4.250 $ 4.220 $ 4.210 $ 4.140 $ 4.110 $ 1.354 $ 1.354 $ 1.354 $ 1.354 $ 1.354 $ 1.250 $ 1.250 $ 1.250 $ 1.250 $ 1.250 (1) Amount represents dividends per depositary share, each representing 1/1000th of a share. A summary of the income tax status of dividends per share paid is as follows: Common shares Ordinary dividend Capital gain Return of capital 5.417% Series 1 Cumulative Convertible Preferred shares Ordinary dividend Capital gain 5.0% Series C Cumulative Redeemable Preferred shares Ordinary dividend Capital gain Year Ended December 31, 2021 2020 2019 $ $ $ $ $ $ 3.358 0.680 0.212 4.250 1.124 0.230 1.354 1.038 0.212 1.250 $ $ $ $ $ $ 3.452 — 0.758 4.210 1.354 — 1.354 1.250 — 1.250 $ $ $ $ $ 4.110 — — 4.110 1.354 — 1.354 1.250 — 1.250 On November 4, 2021, the Trustees declared a quarterly cash dividend of $1.07 per common share, payable January 18, 2022 to common shareholders of record on January 3, 2022. F-26 NOTE 10— LEASES At December 31, 2021, our 104 predominantly retail shopping center and mixed-use properties are located in 12 states and the District of Columbia. There are approximately 3,100 commercial leases and 3,000 residential leases. Our commercial tenants range from sole proprietorships to national retailers and corporations. At December 31, 2021, no one tenant or corporate group of tenants accounted for more than 2.7% of annualized base rent. Our leases with commercial property and residential tenants are classified as operating leases. Commercial property leases generally range from three to ten years (certain leases with anchor tenants may be longer), and in addition to minimum rents, may provide for percentage rents based on the tenant’s level of sales achieved and cost recoveries for the tenant’s share of certain operating costs. Leases on apartments are generally for a period of 1 year or less. As of December 31, 2021, future minimum rentals from noncancelable commercial operating leases (excluding both tenant reimbursements of operating expenses and percentage rent based on tenants' sales) are as follows: Year ending December 31, 2022 2023 2024 2025 2026 Thereafter (In thousands) $ 634,134 596,004 531,652 447,549 376,692 1,675,278 $ 4,261,309 The following table provides additional information on our operating and finance leases where we are the lessee: LEASE COST: Finance lease cost: Amortization of right-of-use assets Interest on lease liabilities Operating lease cost Variable lease cost Total lease cost OTHER INFORMATION: Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for finance leases Operating cash flows for operating leases Financing cash flows for finance leases Weighted-average remaining term - finance leases Weighted-average remaining term - operating leases Weighted-average discount rate - finance leases Weighted-average discount rate - operating leases ROU assets obtained in exchange for operating lease liabilities 2021 Year Ended December 31, 2020 (In thousands) 2019 $ $ $ $ $ 1,284 $ 5,828 5,687 246 13,045 $ 1,284 5,826 5,946 353 13,409 5,723 $ 5,288 $ 51 $ 5,736 5,498 46 $ $ $ $ $ 1,284 5,824 6,063 487 13,658 5,759 5,561 47 December 31, 2021 16.3 years 52.8 years 8.0 % 4.5 % $ 10,341 $ 2020 17.3 years 53.4 years 8.0 % 4.4 % 855 F-27 NOTE 11—COMPONENTS OF RENTAL EXPENSES The principal components of rental expenses are as follows: Repairs and maintenance Utilities Management fees and costs Payroll Insurance Marketing Ground rent Other operating (1) Total rental expenses _____________________ Year Ended December 31, 2021 2020 2019 $ $ 78,028 27,808 24,919 18,341 14,406 7,481 4,571 22,567 198,121 (In thousands) 66,845 $ 25,065 23,752 16,691 12,439 6,432 4,595 15,101 170,920 $ $ $ 73,179 27,729 24,930 16,485 9,036 7,427 4,803 24,242 187,831 (1) Other operating for the year ended December 31, 2019 includes an $11.9 million charge relating to the buyout of a lease at Assembly Square Marketplace. NOTE 12—SHARE-BASED COMPENSATION PLANS A summary of share-based compensation expense included in net income is as follows: Grants of common shares and options Capitalized share-based compensation Share-based compensation expense Year Ended December 31, 2021 2020 2019 (In thousands) $ $ 14,434 (1,425) 13,009 $ $ 13,243 (1,319) 11,924 $ $ 13,330 (1,054) 12,276 As of December 31, 2021, we have grants outstanding under two share-based compensation plans. In May 2020, our shareholders approved the 2020 Performance Incentive Plan ("the 2020 Plan"), which authorized the grant of share options, common shares, and other share-based awards for up to 1,750,000 common shares of beneficial interest. Our 2010 Long Term Incentive Plan, as amended (the "2010 Plan”), which expired in May 2020, authorized the grant of share options, common shares and other share-based awards for up to 2,450,000 common shares of beneficial interest. Option awards under the plans are required to have an exercise price at least equal to the closing trading price of our common shares on the date of grant. Options and restricted share awards under the plan generally vest over three to seven years and option awards typically have a ten-year contractual term. We pay dividends on unvested shares. Certain options and share awards provide for accelerated vesting if there is a change in control. Additionally, the vesting on certain option and share awards can accelerate in part or in full upon termination without cause. The fair value of each option award is estimated on the date of grant using the Black-Scholes model. Expected volatilities, term, dividend yields, employee exercises and estimated forfeitures are primarily based on historical data. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of each share award is determined based on the closing trading price of our common shares on the grant date. No options were granted in 2020 and 2019. F-28 The following table provides a summary of the assumptions used to value options granted in 2021: Volatility Expected dividend yield Expected term (in years) Risk free interest rate Year Ended December 31, 2021 29.3 % 4.1 % 7.5 0.9 % The weighted-average grant-date fair value of options granted in 2021 was $16.40 per share. The following table provides a summary of option activity for 2021: Shares Under Option Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at December 31, 2020 Granted Exercised Forfeited or expired Outstanding at December 31, 2021 Exercisable at December 31, 2021 $ 682 3,658 — (682) 3,658 $ — $ The following table provides a summary of restricted share activity for 2021: Unvested at December 31, 2020 Granted Vested Forfeited Unvested at December 31, 2021 152.34 95.77 — 152.34 95.77 — 9.1 $ — $ 148 — Shares Weighted-Average Grant-Date Fair Value 233,178 166,746 (108,735) (2,193) 288,996 $ $ 127.32 97.46 121.77 112.05 112.29 The weighted-average grant-date fair value of stock awarded in 2021, 2020 and 2019 was $97.46, $124.55 and $133.30, respectively. The total vesting-date fair value of shares vested during the year ended December 31, 2021, 2020 and 2019, was $11.0 million, $12.4 million and $13.0 million, respectively. On February 10, 2021, 10,441 restricted stock units were awarded to an officer that vest at the end of four years. The final awards earned are based on meeting certain market based performance criteria, and may vary from 0% to 200% of the original award. The weighted-average grant-date fair value of stock awarded in 2021 was $97.01. The following table provides a summary of restricted stock unit activity for 2021: Unvested at December 31, 2020 Granted Vested Forfeited Unvested at December 31, 2021 Shares Weighted-Average Grant-Date Fair Value — $ 10,441 — — 10,441 $ — 97.01 — — 97.01 As of December 31, 2021, there was $20.0 million of total unrecognized compensation cost related to unvested share-based compensation arrangements (i.e. options and unvested shares) granted under our plans. This cost is expected to be recognized over the next 4.6 years with a weighted-average period of 2.3 years. Subsequent to December 31, 2021, common shares were awarded under various compensation plans as follows: F-29 Date January 3, 2022 February 9, 2022 Award 5,135 Shares 103,463 Restricted Shares Vesting Term Beneficiary Immediate 3-5 years Trustees Officers and key employees NOTE 13—SAVINGS AND RETIREMENT PLANS We have a savings and retirement plan in accordance with the provisions of Section 401(k) of the Code. Generally, employees can elect, at their discretion, to contribute a portion of their compensation up to a maximum of $19,500 for 2021 and 2020, and 19,000 for 2019. Under the plan, we contribute 50% of each employee’s elective deferrals up to 5% of eligible earnings. In addition, we may make discretionary contributions within the limits of deductibility set forth by the Code. Our full-time employees are immediately eligible to become plan participants. Employees are eligible to receive matching contributions immediately on their participation; however, these matching payments will not vest until their third anniversary of employment. Our expense for the years ended December 31, 2021, 2020 and 2019 was approximately $816,000, $813,000 and $764,000, respectively. A non-qualified deferred compensation plan for our officers and certain other employees was established in 1994 that allows the participants to defer a portion of their income. As of December 31, 2021 and 2020, we are liable to participants for approximately $21.0 million and $18.0 million, respectively, under this plan. Although this is an unfunded plan, we have purchased certain investments to match this obligation. Our obligation under this plan and the related investments are both included in the accompanying consolidated financial statements. F-30 NOTE 14—EARNINGS PER SHARE We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of common stock and participating securities is calculated according to dividends declared and participation rights in undistributed earnings. For 2021 we had 0.3 million, and for 2020 and 2019 we had 0.2 million weighted average unvested shares outstanding, respectively, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS between common shares and unvested shares; the portion of earnings allocated to the unvested shares is reflected as “earnings allocated to unvested shares” in the reconciliation below. The following potentially issuable shares were excluded from the diluted EPS calculation because their impact is anti-dilutive: • • • exercise of 682 stock options in 2020 and 2019, respectively, conversions of downREIT operating partnership units and 5.417% Series 1 Cumulative Convertible Preferred Shares for 2021, 2020, and 2019, respectively, and the issuance of 1.8 million shares issuable under forward sales agreements in 2021. Additionally, 10,441 unvested restricted stock units are excluded from the diluted EPS calculation as the market based performance criteria in the award has not yet been achieved. NUMERATOR Net income Less: Preferred share dividends Less: Income from operations attributable to noncontrolling interests Less: Earnings allocated to unvested shares Net income available for common shareholders, basic and diluted DENOMINATOR Weighted average common shares outstanding—basic Effect of dilutive securities: Open forward contracts for share issuances Weighted average common shares outstanding—diluted EARNINGS PER COMMON SHARE, BASIC Net income available for common shareholders EARNINGS PER COMMON SHARE, DILUTED Net income available for common shareholders NOTE 15—SUBSEQUENT EVENTS Year Ended December 31, 2021 2020 2019 (In thousands, except per share data) $ 269,081 $ 135,888 $ 360,542 (8,042) (7,583) (1,211) (8,042) (4,182) (992) (8,042) (6,676) (1,007) $ 252,245 $ 122,672 $ 344,817 77,336 75,515 74,766 32 — — 77,368 75,515 74,766 $ $ 3.26 3.26 $ $ 1.62 1.62 $ $ 4.61 4.61 In January of 2022, we completed the UPREIT reorganization described in the Explanatory Note at the beginning of this Annual Report. Prior to the UPREIT Reorganization, our business was conducted through the Predecessor. This Annual Report pertains to the business and results of operations of the Predecessor for its fiscal year ended December 31, 2021. As a result of the UPREIT reorganization, the Parent Company became the successor issuer to the Predecessor under the Exchange Act. The Parent Company and the Partnership have elected to co-file this Annual Report of the Predecessor to ensure continuity of information to investors. For additional information on our UPREIT reorganization, please see our Current Reports on Form 8- K filed with the SEC on January 3, 2022 and January 5, 2022. F-31 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s d n a s u o h t n i s r a l l o D ( I N M U L O C H N M U L O C G N M U L O C F N M U L O C E N M U L O C D N M U L O C C N M U L O C B N M U L O C A N M U L O C h c i h w n o e f i L n o i t a i c e r p e d t s e t a l n i e m o c n i s i s t n e m e t a t s d e t u p m o c e t a D d e r i u q c A t a d e i r r a c h c i h w t a t n u o m a s s o r G d o i r e p f o e s o l c e t a D f o d e t a l u m u c c A n o i t a i c e r p e D d n a n o i t c u r t s n o C n o i t a z i t r o m A l a t o T d n a L n o i t i s i u q c A d n a g n i d l i u B s t n e m e v o r p m I t s o C d e z i l a t i p a C t n e u q e s b u S o t y n a p m o c o t t s o c l a i t i n I d n a g n i d l i u B s t n e m e v o r p m I d n a L e c n a r b m u c n E s n o i t p i r c s e D , 5 0 0 2 3 1 0 2 - 5 0 0 2 1 2 0 2 - 2 1 0 2 1 3 9 , 7 0 1 7 1 6 , 8 7 0 , 1 6 9 1 , 9 0 0 , 1 6 3 0 , 1 1 7 0 4 , 9 2 0 2 3 , 7 2 5 8 , 0 5 4 6 9 , 7 0 1 2 0 5 , 6 6 8 8 1 , 0 5 4 7 1 , 0 7 5 4 7 , 7 6 9 1 8 , 3 6 1 7 5 , 7 3 1 1 8 , 5 6 1 2 4 , 9 6 9 1 2 , 0 4 3 8 6 , 2 7 1 6 , 2 1 3 6 3 , 4 9 6 1 , 1 5 9 8 2 6 1 7 4 , 8 4 8 6 9 , 7 2 5 3 , 9 4 6 9 1 , 4 3 7 1 1 , 7 6 6 6 4 , 4 1 3 0 6 , 9 2 9 5 4 , 6 1 2 5 2 , 3 9 9 1 2 , 0 4 5 6 5 , 3 7 1 6 , 2 1 3 6 3 , 4 8 8 9 1 / 2 1 / 1 3 5 9 1 7 0 0 2 / 0 3 / 5 1 0 0 2 - 5 7 9 1 2 1 3 , 5 1 3 5 0 , 2 2 6 3 2 , 3 3 4 0 8 , 0 3 2 3 4 , 2 8 5 4 , 8 1 6 4 3 , 2 1 2 3 4 , 2 $ 9 0 1 , 0 4 $ 4 1 9 , 9 2 $ 5 9 1 , 0 1 $ 5 3 0 , 1 1 $ 3 6 8 , 8 1 $ 1 1 2 , 0 1 $ 0 0 8 , 9 3 ) a i n r o f i l a C ( A E L A Z A ) a i n a v l y s n n e P ( D Y W N Y C A L A B / Y L B M E S S A W O R Y L B M E S S A E C A L P T E K R A M E R A U Q S ) s t t e s u h c a s s a M ( ) a i n a v l y s n n e P ( A R R O D N A ) a i n i g r i V ( E C A L P H T 9 2 ) a i n i g r i V ( D A O R S K C A R R A B ) a i n i g r i V ( A Z A L P T F O R C R A B F-32 9 1 6 , 8 1 2 8 2 , 2 1 1 6 7 8 , 7 8 6 0 4 , 4 2 9 2 9 , 1 7 4 9 , 5 8 6 0 4 , 4 2 1 6 8 , 1 1 ) a i n r o f i l a C ( S N E D R A G L L E B 9 8 9 1 / 8 2 / 2 1 5 9 9 1 / 2 2 / 9 8 5 9 1 9 5 9 1 4 1 0 2 / 1 / 1 4 0 0 2 / 6 8 9 1 6 1 0 2 / 3 1 / 1 0 7 9 1 1 2 0 2 / 4 1 / 6 9 1 0 2 / 7 7 9 1 5 7 0 , 0 6 2 5 6 , 0 2 6 9 2 , 1 1 5 5 6 , 2 1 8 3 , 3 1 2 / 0 3 / 4 8 0 / 6 1 / 7 , 6 0 / 5 2 / 8 & , 7 0 / 0 3 / 1 8 0 0 2 / 9 6 9 1 / 2 6 9 1 1 9 9 1 / 7 6 9 1 4 9 5 6 9 5 , 9 2 6 9 1 / 0 6 9 1 1 4 7 , 9 4 4 9 , 3 2 7 4 3 , 4 0 1 3 1 2 , 5 3 5 0 2 , 0 5 3 5 3 , 9 7 1 5 5 5 , 0 3 5 2 1 , 2 2 3 5 2 , 0 0 1 7 5 3 , 1 3 7 7 0 , 3 4 5 9 6 , 6 2 1 5 4 8 , 3 1 4 9 5 , 0 3 6 7 2 , 8 3 5 2 9 , 1 2 4 3 2 , 5 2 9 1 8 , 1 4 9 0 , 4 6 5 8 , 3 8 2 1 , 7 8 5 6 , 2 5 0 1 7 , 6 1 9 6 6 , 8 2 4 0 , 3 1 6 7 8 , 0 2 2 3 6 , 9 7 8 9 3 , 5 1 2 2 7 , 4 9 4 3 3 4 9 0 5 9 3 4 , 2 0 7 2 , 1 5 1 7 , 4 2 9 5 9 , 5 1 5 5 3 , 8 3 6 4 6 , 6 2 1 2 1 4 , 3 1 6 6 4 , 9 1 5 2 7 , 4 2 — 8 9 7 , 1 6 5 8 , 3 8 2 1 , 7 8 5 6 , 2 5 0 1 7 , 6 1 9 8 6 , 8 2 4 0 , 3 1 8 0 0 2 - 5 4 9 1 2 0 2 , 9 9 6 0 4 , 0 5 2 2 0 5 , 6 0 2 4 0 9 , 3 4 1 2 4 , 8 6 1 6 0 4 , 5 3 9 7 5 , 6 4 5 4 3 , 1 1 ) y e s r e J w e N ( 5 3 K O O R B E D A N N O L O C K C A B L E M A C n w o n k y l r e m r o f ( D A O R B & H C R B I ) a i n i g r i V ( ) a z a l P s l l a F s a ) d n a l y r a M ( W O R A D S E H T E B ) t u c i t c e n n o C ( A Z A L P L O T S I R B ) y e s r e J w e N ( A Z A L P K C R B I ) s t t e s u h c a s s a M ( A Z A L P S U P M A C ) a n o z i r A ( 2 9 6 , 4 S N O M M O C A E S L E H C ) s t t e s u h c a s s a M ( ) a i n i g r i V ( K O O R B R E T S E H C T S U R T T N E M T S E V N I Y T L A E R L A R E D E F I I I E L U D E H C S N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R F O Y R A M M U S 1 2 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s r a l l o D ( I N M U L O C H N M U L O C G N M U L O C F N M U L O C E N M U L O C D N M U L O C C N M U L O C B N M U L O C A N M U L O C h c i h w n o e f i L n o i t a i c e r p e d t s e t a l n i e m o c n i s i s t n e m e t a t s d e t u p m o c ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( e t a D d e r i u q c A , 5 1 / 4 / 5 , 5 1 / 1 / 7 7 1 / 0 1 / 8 , 6 1 / 6 2 / 7 , 5 1 / 6 1 / 2 1 & , 7 1 / 0 3 / 6 3 9 9 1 / 9 1 / 7 7 9 9 1 / 7 1 / 2 1 7 0 / 8 2 / 2 & 5 0 / 9 2 / 2 1 8 1 / 0 2 / 7 & 3 1 / 3 / 4 9 1 / 2 1 / 3 , 3 9 / 1 3 / 2 1 , 6 1 / 4 1 / 2 1 & , 9 1 / 9 2 / 1 , 8 0 / 0 3 / 5 4 1 / 4 1 / 0 1 & , 8 0 / 1 1 / 7 2 1 0 2 / 1 2 / 2 1 t a d e i r r a c h c i h w t a t n u o m a s s o r G d o i r e p f o e s o l c e t a D f o d e t a l u m u c c A n o i t a i c e r p e D d n a n o i t c u r t s n o C n o i t a z i t r o m A l a t o T d n a L n o i t i s i u q c A d n a g n i d l i u B s t n e m e v o r p m I t s o C d e z i l a t i p a C t n e u q e s b u S o t y n a p m o c o t t s o c l a i t i n I d n a g n i d l i u B s t n e m e v o r p m I d n a L e c n a r b m u c n E s n o i t p i r c s e D , 4 9 9 1 / 0 9 9 1 , 3 7 9 1 - 2 2 9 1 1 2 0 2 - 8 1 0 2 5 8 4 , 6 1 7 3 2 , 1 9 1 3 9 2 , 2 4 1 4 4 9 , 8 4 8 8 1 , 7 8 6 3 5 , 1 7 3 1 5 , 2 3 ) a d i r o l F ( K L A W O C O C 2 9 9 1 / 6 1 / 0 1 9 5 9 1 0 1 / 0 1 / 1 1 0 2 / 0 1 / 1 & 9 1 / 8 / 2 & 6 9 / 1 3 / 2 1 9 8 9 1 / 9 2 / 6 5 9 9 1 / 7 2 / 4 0 8 9 1 / 5 2 / 4 0 0 0 2 0 7 9 1 4 7 9 1 7 5 9 1 7 8 9 1 / 6 8 9 1 / 1 8 9 1 7 1 0 2 / 9 1 / 5 5 7 9 1 , 8 4 9 1 8 1 0 2 / 5 1 / 6 0 2 0 2 - 8 1 0 2 7 0 0 2 / 4 9 9 1 / 2 8 9 1 , 1 0 0 2 - 4 9 9 1 2 1 0 2 / 1 1 0 2 0 5 1 , 8 2 2 2 2 , 4 7 5 3 6 , 8 5 7 8 5 , 5 1 6 8 8 , 6 1 2 1 7 , 1 4 4 2 6 , 5 1 ) a d i r o l F ( E G A L L I V R A M L E D 2 1 6 , 6 4 4 8 6 , 2 2 2 9 0 , 2 2 4 2 7 , 2 3 7 4 , 0 5 6 8 3 , 4 2 1 5 8 , 7 7 2 6 , 2 0 2 8 , 1 8 5 4 , 9 7 1 4 7 0 , 6 3 9 8 3 , 0 5 1 1 6 0 , 2 3 9 6 0 , 9 2 3 1 0 , 4 4 5 3 , 2 1 7 3 7 , 0 2 5 3 0 , 8 3 1 9 0 3 , 1 1 9 6 7 , 4 5 2 5 6 , 5 3 7 1 1 , 9 1 3 2 8 , 9 1 9 2 8 , 5 1 9 0 8 , 1 4 9 9 8 , 1 7 9 4 7 , 1 4 8 9 1 , 7 1 2 3 2 , 7 2 5 7 8 , 3 4 1 4 0 , 5 2 3 8 6 , 1 6 7 9 4 , 2 3 1 9 6 , 5 1 4 5 2 , 3 1 5 7 8 , 3 4 8 6 7 , 6 1 6 1 2 , 0 1 2 5 2 , 9 7 0 5 , 1 8 7 9 , 3 1 — 6 1 2 , 1 8 8 7 , 3 4 3 5 9 , 2 2 0 1 9 , 1 1 5 4 3 , 3 0 2 6 , 0 4 5 2 8 , 3 2 5 9 8 , 7 1 4 4 5 , 9 3 4 9 , 3 9 0 9 , 9 5 5 2 , 3 9 6 0 , 9 2 8 2 0 , 4 7 1 1 , 9 1 8 6 7 , 6 1 6 1 2 , 0 1 2 5 2 , 9 5 4 3 , 1 8 7 9 , 3 1 — ) a i n r o f i l a C I ( E G D R B Y A B T S A E E D A N E M O R P O D D N O C S E I ) a i n r o f i l a C ( ) y e s r e J w e N ( G R U B S I L L E ) a n i g r i V ( N O I T C N U J X A F R A F I ) d n a l y r a M ( A Z A L P L A R E D E F ) a i n a v l y s n n e P ( N W O T R U O L F ) a i n r o f i l a C ( T E E R T S H T R U O F ) a i n r o f i l a C ( A Z A L P M O D E E R F ) s i o n i l l I ( E R A U Q S Y E L N I F 9 0 0 2 - 0 2 9 1 1 6 5 , 3 2 9 4 , 8 9 4 2 1 , 8 6 8 6 3 , 0 3 1 0 6 , 8 4 3 2 5 , 9 1 8 6 3 , 0 3 ) t u c i t c e n n o C ( S N O M M O C N E I R A D 9 5 9 1 8 5 3 , 9 1 4 7 7 , 7 4 6 1 1 , 1 3 8 5 6 , 6 1 2 5 1 , 7 1 4 6 9 , 3 1 8 5 6 , 6 1 ) s t t e s u h c a s s a M ( A Z A L P M A H D E D 8 9 / 4 1 / 8 8 8 9 1 - 5 0 9 1 5 1 7 , 9 8 8 4 , 3 1 3 7 0 , 1 1 5 1 4 , 2 9 0 1 , 7 4 6 9 , 3 2 / 3 0 0 2 / 5 6 9 1 5 6 9 1 / 1 / 4 6 1 0 9 3 5 , 3 6 3 7 7 , 7 0 1 0 8 9 , 4 0 1 3 9 7 , 2 6 5 5 , 7 9 4 2 4 , 7 5 7 9 1 9 5 9 1 6 0 0 2 / 8 9 9 1 ' / s 0 7 9 1 e t a L 1 4 1 , 3 9 6 6 , 1 2 6 1 1 , 7 5 1 0 , 6 3 6 6 3 , 5 0 8 3 , 1 3 0 5 7 , 1 5 3 6 , 4 7 9 4 , 3 9 6 7 , 9 1 9 6 8 , 1 1 1 6 , 1 1 7 3 3 , 0 3 4 7 6 , 0 9 9 2 4 , 3 6 5 4 2 , 7 2 4 5 8 , 8 5 7 5 , 4 5 5 4 2 , 7 2 5 1 4 , 2 3 9 7 , 2 0 5 7 , 1 5 3 6 , 4 ) a i n r o f i l a C ( D V L B O D A R O L O C A Z A L P L A N O I S S E R G N O C ) d n a l y r a M ( R E T N E C E S U O H T R U O C ) d n a l y r a M ( ) s i o n i l l I ( S D A O R S S O R C S N O M M O C N O Y N A C W O R C ) a i n r o f i l a C ( F-33 T S U R T T N E M T S E V N I Y T L A E R L A R E D E F I I I E L U D E H C S N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R F O Y R A M M U S 1 2 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s r a l l o D ( I N M U L O C H N M U L O C G N M U L O C F N M U L O C E N M U L O C D N M U L O C C N M U L O C B N M U L O C A N M U L O C h c i h w n o e f i L n o i t a i c e r p e d t s e t a l n i e m o c n i s i s t n e m e t a t s d e t u p m o c e t a D d e r i u q c A t a d e i r r a c h c i h w t a t n u o m a s s o r G d o i r e p f o e s o l c e t a D f o d e t a l u m u c c A n o i t a i c e r p e D d n a n o i t c u r t s n o C n o i t a z i t r o m A l a t o T d n a L n o i t i s i u q c A d n a g n i d l i u B s t n e m e v o r p m I t s o C d e z i l a t i p a C t n e u q e s b u S o t y n a p m o c o t t s o c l a i t i n I d n a g n i d l i u B s t n e m e v o r p m I d n a L e c n a r b m u c n E s n o i t p i r c s e D ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( 7 1 0 2 / 1 / 2 8 9 9 1 / 6 / 8 1 2 / 4 1 / 6 , 9 1 / 8 1 / 9 , 9 1 / 6 2 / 1 1 0 2 / 2 1 / 2 & , 9 1 / 9 1 / 2 1 9 9 / 8 1 / 6 & 9 9 / 2 2 / 3 5 1 / 4 2 / 1 1 , 8 8 / 2 1 / 2 1 & , 7 0 / 6 2 / 0 1 , 3 6 9 1 , 1 6 9 1 , 3 8 9 1 - 2 8 9 1 7 9 9 1 / 5 / 2 1 9 4 9 1 - 6 4 9 1 3 9 7 , 8 4 1 8 0 , 4 9 8 4 4 , 9 6 3 3 6 , 4 2 1 0 2 , 4 4 5 5 2 , 5 2 5 2 6 , 4 2 1 0 0 2 / 1 2 / 9 8 9 9 1 8 5 1 , 4 1 5 6 4 , 6 3 9 6 7 , 3 2 6 9 6 , 2 1 6 6 9 , 2 3 0 8 , 0 2 6 9 6 , 2 1 9 1 / 5 1 / 1 1 5 8 9 1 / 1 / 0 1 3 8 9 1 / 1 2 / 7 3 7 9 1 / 9 2 / 3 5 1 0 2 3 6 9 1 1 7 9 1 4 6 9 1 3 9 9 1 / 2 2 / 4 4 9 9 1 / 8 2 / 7 6 6 9 1 8 5 9 1 / 6 0 0 2 / 9 6 9 1 7 9 3 , 9 1 6 3 6 , 9 1 4 8 , 3 7 7 8 , 1 2 7 6 2 , 8 1 2 3 2 , 8 1 6 1 0 2 / 3 1 / 1 4 0 0 2 / 5 7 9 1 9 8 0 , 5 1 7 9 , 6 3 1 1 8 , 4 1 6 1 5 , 4 8 2 9 5 , 6 2 6 2 4 , 3 2 4 9 2 , 0 2 7 3 7 , 2 3 8 9 9 , 0 3 4 3 1 , 2 1 4 1 3 , 2 5 4 2 5 , 4 2 3 7 7 , 2 2 9 6 7 , 9 1 7 0 0 , 2 2 3 7 9 , 5 7 7 6 , 2 2 0 2 , 2 3 8 6 0 , 2 3 5 6 5 2 5 0 3 7 , 0 1 9 9 9 , 3 2 5 0 3 , 7 8 2 7 , 2 9 1 6 , 9 1 5 5 1 , 5 1 8 6 1 , 8 1 8 7 2 , 1 1 7 2 , 5 9 2 8 , 4 6 8 5 , 9 4 5 0 9 , 4 9 2 6 , 7 1 0 6 , 1 9 6 8 , 0 2 1 0 7 , 7 7 7 6 , 2 2 0 2 , 2 3 8 6 0 , 2 2 4 6 5 2 5 0 9 5 , 0 1 5 9 9 1 / 2 1 / 4 8 6 9 1 0 2 1 , 6 8 4 7 , 3 2 4 6 2 , 6 1 4 8 4 , 7 9 1 8 , 0 1 5 4 4 , 5 4 8 4 , 7 f o t c i r t s i D ( R E T N E C P I H S D N E I R F ) k r o Y w e N ( S W O D A E M H S E R F ) a i b m u l o C E R A U Q S G R U B S R E H T I A G ) d n a l y r a M ( ) s i o n i l l I ( T E K R A M N E D R A G G N I P P O H S E N W O T E G R O E G ) k r o Y w e N ( R E T N E C ) d n a l y r a M ( A Z A L P R O N R E V O G ) a i n i g r i V ( A Z A L P K R A P M A H A R G ) k r o Y w e N ( A Z A L P N W A L N E E R G E U N E V A H C W N E E R G I ) t u c i t c e n n o C ( ) n a g i h c i M ( A Z A L P T O I T A R G F-34 1 2 0 2 / 1 / 6 2 0 0 2 3 9 0 , 2 8 1 9 , 5 7 1 4 8 4 , 0 5 4 3 4 , 5 2 1 3 7 1 1 1 3 , 0 5 4 3 4 , 5 2 1 ) a i n r o f i l a C ( R E T N E C T N O M S S O R G 3 6 9 1 , 4 8 9 1 7 0 0 2 , 6 0 0 2 , 8 5 9 1 2 1 8 , 3 2 5 4 , 4 1 9 8 9 1 / 2 8 9 1 2 7 7 5 0 7 , 5 2 2 4 8 , 3 3 7 0 1 , 0 4 8 4 4 , 3 2 2 2 4 , 5 2 7 0 1 , 0 4 — 7 5 2 , 2 0 2 4 , 8 8 2 5 5 0 , 1 9 8 7 , 9 3 9 3 , 2 2 2 6 2 , 5 1 9 7 0 , 0 4 — 7 5 2 , 2 1 9 7 , 8 A Z A L P H C N A R S G N I T S A H ) a i n r o f i l a C ( ) k r o Y w e N ( E G U A P P U A H ) a n o z i r A ( E G A L L I V N O T L I H 6 0 0 2 - 7 8 8 1 9 8 3 , 1 1 0 7 3 , 6 1 2 8 0 9 , 8 6 1 2 6 4 , 7 4 5 7 0 , 1 5 3 8 , 7 6 1 0 6 4 , 7 4 4 0 7 , 4 0 1 ) y e s r e J w e N ( N E K O B O H 1 9 9 1 / 9 2 9 1 3 1 8 , 0 2 5 5 8 , 1 6 5 8 4 , 3 5 0 7 3 , 8 5 3 6 , 6 3 0 2 9 , 6 1 0 0 3 , 8 ) a i n r o f i l a C ( D V L B D O O W Y L L O H 0 1 0 2 / 6 1 / 8 7 0 0 4 9 9 1 / 5 1 / 4 8 9 9 1 / 4 2 / 8 0 8 9 1 / 4 2 / 4 1 9 9 1 0 6 9 1 8 5 9 1 2 - 4 0 0 2 / 0 8 9 1 1 8 2 , 5 6 2 5 , 0 1 0 1 4 , 0 1 0 3 2 , 6 6 9 6 , 3 1 6 4 5 , 7 1 0 1 6 , 1 1 4 9 3 , 8 0 9 1 , 3 1 8 3 2 , 3 1 0 1 6 , 1 1 2 6 9 , 7 6 0 5 8 0 3 , 4 — 2 3 4 1 2 6 , 3 2 1 2 , 3 6 9 8 1 9 2 , 6 5 7 0 , 0 1 6 2 0 , 0 1 4 1 7 , 0 1 3 0 1 , 2 — — — 8 0 3 , 4 2 6 9 1 4 6 5 , 7 1 7 8 7 , 1 5 3 9 4 , 9 3 4 9 2 , 2 1 5 8 5 , 3 2 8 0 0 , 6 1 4 9 1 , 2 1 w e N ( E R A U Q S N O T G N I T N U H ) k r o Y w e N ( N O T G N I T N U H ) k r o Y ) a i n i g r i V ( A Z A L P D O O W L Y D I ) a i n r o f i l a C ( T R U O C S G N K I ) a i n a v l y s n n e P ( R E T S A C N A L h c i h w n o e f i L n o i t a i c e r p e d t s e t a l n i e m o c n i s i s t n e m e t a t s d e t u p m o c ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( e t a D d e r i u q c A 5 8 9 1 / 1 3 / 1 6 8 9 1 / 5 1 / 8 7 1 / 3 / 4 & 0 8 9 1 / 3 2 / 7 7 1 / 1 3 / 1 & 3 0 / 4 1 / 0 1 3 1 / 9 1 / 2 1 & 1 1 / 7 2 / 2 1 6 0 / 7 2 / 1 , 3 0 / 1 3 / 3 & , 3 0 / 1 2 / 3 6 0 0 2 / 4 2 / 8 3 8 9 1 / 0 3 / 8 6 7 9 1 / 5 1 / 6 6 6 9 1 6 5 9 1 2 7 9 1 , s 0 6 9 1 1 1 0 2 & 6 9 9 1 , s 0 7 9 1 / 2 7 9 1 / 6 6 9 1 1 0 0 2 / 7 8 9 1 4 0 0 2 9 5 9 1 8 6 9 1 , 2 6 9 1 6 0 0 2 / 6 1 / 0 1 4 7 9 1 6 0 0 2 / 4 2 / 8 8 0 0 2 - 0 6 9 1 T S U R T T N E M T S E V N I Y T L A E R L A R E D E F I I I E L U D E H C S N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R F O Y R A M M U S 1 2 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s r a l l o D ( I N M U L O C H N M U L O C G N M U L O C F N M U L O C E N M U L O C D N M U L O C C N M U L O C B N M U L O C A N M U L O C t a d e i r r a c h c i h w t a t n u o m a s s o r G d o i r e p f o e s o l c e t a D f o d e t a l u m u c c A n o i t a i c e r p e D d n a n o i t c u r t s n o C n o i t a z i t r o m A l a t o T d n a L n o i t i s i u q c A d n a g n i d l i u B s t n e m e v o r p m I t s o C d e z i l a t i p a C t n e u q e s b u S o t y n a p m o c o t t s o c l a i t i n I d n a g n i d l i u B s t n e m e v o r p m I d n a L e c n a r b m u c n E s n o i t p i r c s e D 5 5 8 , 7 1 8 9 9 , 2 4 4 2 7 , 4 2 3 8 6 , 1 3 5 6 3 , 2 2 4 9 7 , 3 2 2 6 3 , 0 6 5 2 7 , 0 5 1 9 3 , 1 5 1 9 9 7 , 4 0 1 4 7 0 , 3 2 9 5 8 , 2 5 4 6 5 , 4 4 5 4 0 , 2 7 7 7 1 , 9 6 0 2 7 3 0 5 , 7 1 6 1 , 6 6 4 3 , 9 7 2 2 6 , 5 3 0 0 1 , 0 2 9 7 3 , 0 3 4 8 0 , 6 3 2 6 7 , 2 5 5 9 2 , 6 3 4 7 9 , 2 5 2 5 , 2 2 1 9 4 , 8 7 4 2 , 9 1 2 8 8 , 2 3 0 2 7 8 5 4 , 7 0 5 1 , 6 2 8 3 , 9 7 2 2 6 , 5 3 ) a i n a v l y s n n e P ( K R A P E C N E R W A L ) s t t e s u h c a s s a M ( E R A U Q S N E D N I L ) k r o Y w e N ( L L A M E L L I V L E M E R A U Q S E N R O H G N A L ) a i n a v l y s n n e P ( ) d n a l y r a M ( L E R U A L 5 7 9 1 5 5 8 , 7 3 0 5 4 , 3 7 1 8 5 , 7 6 9 6 8 , 5 5 7 1 , 9 4 8 5 3 , 8 1 7 1 9 , 5 ) y e s r e J w e N ( L L A M R E C R E M 7 9 9 1 / 2 2 / 0 1 8 9 9 1 - 7 9 9 1 3 2 7 , 4 2 4 9 0 , 9 3 4 7 6 , 5 3 5 8 9 1 / 1 / 0 1 3 6 9 1 , 2 8 / 8 1 / 5 & , 7 0 / 6 2 / 0 1 , 3 6 9 1 7 1 0 2 / 2 / 8 3 9 9 1 / 5 / 2 & 8 9 9 1 0 1 / 2 2 / 1 1 8 1 0 2 - 7 1 0 2 4 1 6 , 6 9 7 9 1 2 0 0 2 - 9 9 9 1 6 1 5 , 7 1 6 5 1 , 6 5 6 5 3 , 5 2 1 2 2 , 2 8 6 9 4 , 0 3 7 4 6 , 6 0 1 7 8 8 , 5 3 3 7 1 , 7 6 1 0 8 , 1 2 7 4 6 , 6 0 1 7 8 0 , 3 3 2 3 6 2 , 1 2 2 0 0 , 7 9 6 3 , 9 6 3 4 , 4 3 6 8 1 , 3 1 3 7 9 4 , 3 3 8 4 5 , 2 1 9 3 9 8 3 6 6 6 3 , 9 0 2 4 , 3 8 4 0 , 5 1 5 9 6 , 8 — 0 0 8 , 2 3 9 1 7 , 4 2 0 5 5 , 1 1 — 8 9 9 9 7 7 , 8 9 0 9 , 2 3 5 6 7 , 2 1 4 4 , 0 2 3 7 8 , 8 2 9 6 , 3 0 1 6 2 6 , 6 2 2 3 7 , 6 4 9 2 9 , 2 1 5 5 9 , 2 1 6 4 , 6 8 3 9 8 3 6 6 6 3 , 9 0 2 4 , 3 8 4 0 , 5 1 4 9 6 , 8 — 0 0 8 , 2 6 0 7 , 9 3 4 6 9 , 7 6 1 0 4 3 , 9 1 1 4 2 6 , 8 4 1 2 5 , 7 2 9 1 8 , 1 9 4 2 6 , 8 4 8 6 6 , 4 4 3 6 2 , 3 9 2 1 4 , 7 7 1 5 8 , 5 1 3 9 9 , 3 4 1 0 5 , 3 3 9 6 7 , 5 1 . I Y W H D N O M H C R 0 7 7 7 / Y E L L A V ) a i n a v l y s n n e P ( T S A E H T R O N H T U O M T R A D H T R O N ) s t t e s u h c a s s a M ( ) a i n i g r i V ( H T U O S / N O N R E V T N U O M G N I S S O R C E S O R T N O M ) d n a l y r a M ( F-35 ) a i n i g r i V ( L L I M E N E E K D L O ) a i n r o f i l a C ( R E T N E C N W O T D L O S L L I H N O I S S I M T A O V I L O ) a i n r o f i l a C ( ) a i n i g r i V ( M A N A P ) a i n i g r i V ( W O R N O G A T N E P ) d n a l y r a M ( A Z A L P G N R R E P I 2 1 / 1 3 / 7 1 2 0 2 - 2 1 0 2 6 4 7 , 3 8 8 6 7 , 4 2 7 2 5 0 , 1 9 6 6 1 7 , 3 3 2 6 9 , 2 8 6 5 3 3 , 0 1 1 7 4 , 1 3 ) d n a l y r a M ( E S O R & E K I P 5 1 / 8 / 7 & 7 9 / 1 3 / 3 6 1 0 2 / 3 1 / 1 7 1 0 2 / 2 / 8 8 6 9 1 9 6 9 1 9 0 0 2 0 4 7 , 0 2 1 1 9 , 0 5 7 9 9 , 5 3 4 1 9 , 4 1 2 4 1 , 3 1 9 9 7 , 2 2 0 7 9 , 4 1 3 6 7 , 8 2 8 8 , 1 2 7 9 , 6 4 1 8 8 , 7 1 7 6 6 , 6 3 6 7 2 , 2 1 5 0 3 , 0 1 5 0 6 , 5 ) 5 5 ( 4 1 1 , 5 1 3 5 5 , 1 2 1 3 3 , 2 1 5 0 3 , 0 1 5 0 6 , 5 ) a i n r o f i l a C ( L O S L E D A Z A L P ) a i n i g r i V ( A Z A L P 7 E K I P O D A C R E M L E D A Z A L P ) d n a l y r a M ( h c i h w n o e f i L n o i t a i c e r p e d t s e t a l n i e m o c n i s i s t n e m e t a t s d e t u p m o c ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( , 3 1 / 4 1 / 6 , 1 1 / 0 3 / 2 1 3 1 / 7 2 / 2 1 & , 3 1 / 6 2 / 7 e t a D d e r i u q c A 4 9 9 1 / 3 2 / 2 1 3 9 9 1 / 2 2 / 4 7 6 9 1 5 7 9 1 7 1 0 2 / 1 3 / 3 2 1 0 2 , 9 8 9 1 7 0 0 2 - 6 0 0 2 7 0 0 2 - 5 0 0 2 1 7 9 1 / 5 1 / 1 9 1 / 3 1 / 9 , 5 1 0 2 / 9 / 1 , 7 9 / 5 / 3 , 2 1 / 3 1 / 7 , 2 1 / 6 / 9 3 1 / 3 2 / 9 & 3 1 / 0 3 / 4 0 6 9 1 , 8 5 9 1 , 5 6 9 1 - 4 6 9 1 , 5 7 9 1 - 4 7 9 1 7 9 9 1 - 5 9 9 1 , 6 0 0 2 - 9 9 9 1 , 1 1 0 2 , 4 1 0 2 , 9 0 0 2 T S U R T T N E M T S E V N I Y T L A E R L A R E D E F I I I E L U D E H C S N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R F O Y R A M M U S 1 2 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s r a l l o D ( I N M U L O C H N M U L O C G N M U L O C F N M U L O C E N M U L O C D N M U L O C C N M U L O C B N M U L O C A N M U L O C t a d e i r r a c h c i h w t a t n u o m a s s o r G d o i r e p f o e s o l c e t a D f o d e t a l u m u c c A n o i t a i c e r p e D d n a n o i t c u r t s n o C n o i t a z i t r o m A l a t o T d n a L n o i t i s i u q c A d n a g n i d l i u B s t n e m e v o r p m I t s o C d e z i l a t i p a C t n e u q e s b u S o t y n a p m o c o t t s o c l a i t i n I d n a g n i d l i u B s t n e m e v o r p m I d n a L e c n a r b m u c n E s n o i t p i r c s e D 6 1 0 2 / 7 0 0 2 / 6 0 0 2 7 2 6 , 8 6 0 7 9 , 9 9 2 2 8 1 , 5 3 2 8 8 7 , 4 6 7 8 2 , 4 8 6 5 5 , 3 5 1 7 2 1 , 2 6 1 2 5 , 4 2 1 7 2 4 , 1 1 4 8 9 , 5 2 7 9 1 , 6 1 5 6 1 , 0 2 9 2 5 , 0 1 3 0 6 , 8 1 1 4 1 , 1 4 4 8 2 , 5 1 3 1 2 , 8 3 3 0 6 , 1 2 1 1 8 1 , 6 0 1 9 1 0 , 5 4 3 9 4 , 3 1 9 1 0 , 5 4 9 1 7 , 2 1 9 1 3 , 3 8 2 9 , 2 2 2 4 , 5 1 — 4 7 7 7 2 8 , 6 5 9 9 , 9 2 9 0 6 , 1 7 2 9 , 6 3 5 9 6 , 0 1 7 5 4 , 8 9 4 9 , 7 2 7 5 , 4 0 1 2 9 0 , 8 6 4 2 , 2 9 1 3 , 3 7 9 1 , 3 2 2 4 , 5 1 — 2 5 5 / I T N O P E H T O D N U G E S L E A Z A L P ) d n a l y r a M ( D R A H C R O E C N U Q I A Z A L P E N N A N E E U Q ) s t t e s u h c a s s a M ( ) a i n r o f i l a C ( ) s i o n i l l I ( R E T N E C T N O P R E V R I I E R A U Q S N W O T E L L I V K C O R ) d n a l y r a M ( ) d n a l y r a M ( . S T P A D O O W G N I L L O R F-36 8 0 4 , 5 0 3 1 , 8 4 0 3 7 , 1 2 0 0 4 , 6 2 8 6 2 , 3 2 6 4 , 8 1 0 0 4 , 6 2 I R E T N E C O N O T N A N A S ) a i n r o f i l a C ( 1 2 0 2 - 6 1 0 2 4 0 8 , 8 6 2 6 9 5 , 6 4 2 , 1 4 0 0 , 9 8 1 , 1 2 9 5 , 7 5 2 1 4 , 2 7 1 , 1 2 0 5 , 7 2 8 6 , 6 6 7 0 0 2 / 8 / 3 6 0 0 2 - 5 0 0 2 1 6 9 , 6 6 3 7 , 8 1 5 9 2 , 4 1 1 4 4 , 4 6 4 4 , 1 9 4 8 , 2 1 1 4 4 , 4 0 0 0 2 - 6 9 9 1 0 0 0 2 - 8 8 8 1 5 6 2 , 6 3 3 7 7 , 7 8 8 4 6 , 2 6 5 2 1 , 5 2 9 1 4 , 2 5 9 0 7 , 2 1 5 4 6 , 2 2 8 9 9 1 / 4 2 / 8 4 1 / 3 1 / 6 & 1 1 / 9 1 / 1 0 6 9 1 - 3 5 9 1 9 0 0 , 1 1 8 9 8 , 2 2 8 1 6 , 5 1 0 8 2 , 7 0 1 2 , 5 8 1 5 , 0 1 0 7 1 , 7 7 1 0 2 , 9 8 9 1 7 3 2 , 6 2 4 2 1 , 1 0 1 2 6 1 , 1 7 2 6 9 , 9 2 4 9 7 , 7 2 0 9 3 , 3 4 0 4 9 , 9 2 6 0 0 2 / 9 2 / 6 9 6 9 1 7 4 0 , 7 5 2 9 , 6 1 2 3 2 , 5 1 7 0 0 2 / 8 / 3 7 1 0 2 - 6 1 0 2 3 0 7 , 2 0 2 4 , 2 2 2 9 0 , 0 2 3 9 6 , 1 8 2 3 , 2 2 9 0 , 0 2 — 8 5 3 , 3 5 8 2 , 2 1 2 8 2 , 1 8 2 3 , 2 7 1 0 2 / 2 / 8 3 7 9 1 6 3 9 , 3 3 2 1 , 6 4 1 0 6 , 7 2 2 2 5 , 8 1 4 6 9 , 2 7 3 6 , 4 2 2 2 5 , 8 1 7 0 0 2 / 8 / 3 7 9 9 1 9 5 7 , 5 4 9 4 7 , 3 2 1 4 6 0 , 3 0 1 5 8 6 , 0 2 5 3 6 , 0 3 2 3 4 , 2 7 2 8 6 , 0 2 4 1 / 6 / 0 1 7 0 0 2 & 4 1 0 2 / 1 / 1 / 3 9 9 1 / 8 8 9 1 5 2 2 , 8 2 0 9 8 , 8 2 1 9 6 8 , 0 1 1 1 2 0 , 8 1 9 5 7 , 7 5 1 1 , 3 0 1 6 1 0 , 8 1 0 7 0 , 3 4 H S R A M E T I H W T A E U N E V A E H T ) d n a l y r a M ( Y R U B S W E R H S T A E V O R G E H T ) y e s r e J w e N ( M A H G N I T T O N T A S E P P O H S E H T ) d n a l y r a M ( E R A U Q S E D A N E M O R P T E E R T S D R H T I ) a i n r o f i l a C ( R E T N E C G N P P O H S R E W O T ) a i n i g r i V ( ) a i n r o f i l a C ( W O R A N A T N A S R E T N E C E N W O T R A M L Y S ) a i n r o f i l a C ( S T A L F ( L A I T N E D I S E R N O S W O T ) d n a l y r a M ( ) 3 0 7 @ ) a d i r o l F ( S P O H S R E W O T W E N F O R E T N E C N W O T ) a i n a v l y s n n e P ( I N A T I R B T S U R T T N E M T S E V N I Y T L A E R L A R E D E F I I I E L U D E H C S N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R F O Y R A M M U S 1 2 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s r a l l o D ( I N M U L O C H N M U L O C G N M U L O C F N M U L O C E N M U L O C D N M U L O C C N M U L O C B N M U L O C A N M U L O C h c i h w n o e f i L n o i t a i c e r p e d t s e t a l n i e m o c n i s i s t n e m e t a t s d e t u p m o c e t a D d e r i u q c A t a d e i r r a c h c i h w t a t n u o m a s s o r G d o i r e p f o e s o l c e t a D f o d e t a l u m u c c A n o i t a i c e r p e D d n a n o i t c u r t s n o C n o i t a z i t r o m A l a t o T d n a L n o i t i s i u q c A d n a g n i d l i u B s t n e m e v o r p m I t s o C d e z i l a t i p a C t n e u q e s b u S o t y n a p m o c o t t s o c l a i t i n I d n a g n i d l i u B s t n e m e v o r p m I d n a L e c n a r b m u c n E s n o i t p i r c s e D ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( ) 1 ( 0 8 9 1 / 3 2 / 7 6 6 9 1 1 1 1 , 5 2 6 6 1 , 1 4 1 0 3 , 5 3 5 6 8 , 5 7 4 8 , 2 3 3 9 1 , 5 6 2 1 , 3 1 2 0 2 / 2 / 9 8 7 9 1 / 7 1 / 1 7 7 9 1 4 5 9 1 , 0 4 9 1 7 0 0 2 / 8 / 3 7 8 9 1 5 9 9 1 / 1 2 / 2 1 9 0 0 2 - 6 0 0 2 4 0 0 2 / 1 3 / 3 6 6 9 1 - 0 6 9 1 7 0 0 2 / 8 / 3 9 6 9 1 / 5 / 5 4 8 9 1 / 0 2 / 1 1 3 8 9 1 / 5 / 2 1 6 9 9 1 / 9 2 / 0 1 5 8 9 1 8 5 9 1 3 5 9 1 7 5 9 1 8 4 9 1 3 6 2 8 3 2 , 4 7 7 2 , 3 3 3 9 5 , 2 7 4 9 0 , 1 1 — 8 9 2 , 0 1 3 5 6 , 2 2 5 8 6 , 7 6 5 8 2 , 7 2 9 3 4 , 5 3 2 8 0 , 6 5 9 0 , 4 6 2 5 1 , 8 5 1 5 6 5 , 6 2 6 8 8 , 8 2 1 9 3 , 7 2 5 8 0 , 2 3 3 3 2 , 5 0 1 9 6 8 , 2 4 5 5 9 , 8 1 9 8 5 , 5 1 6 8 , 9 5 3 3 8 , 1 5 1 1 5 0 , 3 2 7 4 0 8 2 , 8 1 6 8 5 , 0 3 3 4 4 , 7 9 4 1 8 , 4 3 3 9 4 4 8 4 , 6 1 4 3 2 , 4 9 1 3 , 6 4 1 5 , 3 9 3 8 , 8 2 1 1 1 , 9 9 9 4 , 1 0 9 7 , 7 5 5 0 , 8 7 5 1 4 2 , 5 6 2 5 , 9 3 9 4 5 , 4 4 4 7 6 , 1 7 7 9 1 2 , 7 1 3 4 9 , 3 2 8 1 3 , 4 9 5 5 0 , 1 2 3 5 4 8 9 8 , 8 1 8 0 8 , 4 1 4 8 2 , 7 0 1 3 1 4 , 1 2 — 1 6 0 , 1 3 4 6 , 6 3 2 7 , 7 9 5 7 , 3 1 8 8 3 4 8 4 , 6 1 1 6 7 , 9 9 1 3 , 6 8 7 4 , 3 9 0 8 , 8 2 1 1 1 , 9 9 9 4 , 1 2 9 1 , 3 5 5 0 , 8 ) y e s r e J w e N ( S L L I H Y O R T G N I P P O H S E K O O R B N W T I ) a i n i g r i V ( E R T N E C ) a i n i g r i V ( N O I T A T S S N O S Y T ' ) d n a l y r a M ( A Z A L P H S R A M E T I H W ) a i n r o f i l a C ( R E T N E C E T A G T S E W I N O T G N I L R H S T A E G A L L I V ) a i n i g r i V ( ) a i n a v l y s n n e P ( E V O R G W O L L I W ) a i n a v l y s n n e P ( D O O W E N N Y W ) a i n i g r i V ( N W A L W O L L I W R E H T O H S R A M E T I H W ) d n a l y r a M ( ) d n a l y r a M ( D O O W D L I W F-37 5 9 0 , 1 3 5 , 2 $ 2 6 0 , 2 2 4 , 9 $ 2 8 7 , 3 4 8 , 7 $ 0 8 2 , 8 7 5 , 1 $ 3 3 9 , 1 1 1 , 5 $ 2 3 0 , 5 2 7 , 2 $ 7 9 0 , 5 8 5 , 1 $ 3 9 9 , 9 3 3 $ S L A T O T . s r a e y 0 5 o t e s a e l e h t f o e f i l e h t m o r f g n i g n a r s e v i l l u f e s u n o d e s a b d e t a l u c l a c s i s t n e m e v o r p m i d n a g n i d l i u b f o n o i t a i c e r p e D ) 1 ( FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED Three Years Ended December 31, 2021 Reconciliation of Total Cost (in thousands) Balance, December 31, 2018 .................................................................................................................................... $ 7,819,472 (71,859) January 1, 2019 adoption of new accounting standard - See Note 2 ................................................................... Additions during period Acquisitions .................................................................................................................................................... Improvements ................................................................................................................................................. Deduction during period—dispositions and retirements of property................................................................... Balance, December 31, 2019 .................................................................................................................................... 309,921 441,703 (201,105) 8,298,132 Additions during period Acquisitions .................................................................................................................................................... Improvements ................................................................................................................................................. Deductions during period..................................................................................................................................... Impairment of property................................................................................................................................... Dispositions and retirements of property........................................................................................................ Balance, December 31, 2020 .................................................................................................................................... 39,440 473,679 (68,484) (159,897) 8,582,870 Additions during period Acquisitions .................................................................................................................................................... Improvements ................................................................................................................................................. Deduction during period—dispositions and retirements of property................................................................... 519,350 424,521 (104,679) Balance, December 31, 2021 (1) .............................................................................................................................. $ 9,422,062 _____________________ (1) For Federal tax purposes, the aggregate cost basis is approximately $8.4 billion as of December 31, 2021. F-38 FEDERAL REALTY INVESTMENT TRUST SCHEDULE III SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED Three Years Ended December 31, 2021 Reconciliation of Accumulated Depreciation and Amortization (In thousands) Balance, December 31, 2018 .................................................................................................................................... $ 2,059,143 (18,173) 215,382 (40,939) 2,215,413 229,199 January 1, 2019 adoption of new accounting standard - See Note 2 ................................................................... Additions during period—depreciation and amortization expense Deductions during period—dispositions and retirements of property ................................................................. Balance, December 31, 2019 .................................................................................................................................... Additions during period—depreciation and amortization expense...................................................................... Deductions during period..................................................................................................................................... Impairment of property................................................................................................................................... Dispositions and retirements of property........................................................................................................ (11,631) (75,289) 2,357,692 246,338 (72,935) Balance, December 31, 2021 .................................................................................................................................... $ 2,531,095 Additions during period—depreciation and amortization expense...................................................................... Deductions during period -dispositions and retirements of property................................................................... Balance, December 31, 2020 F-39 FEDERAL REALTY INVESTMENT TRUST SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE Year Ended December 31, 2021 (Dollars in thousands) Column A Column B Column C Column D Column E Column F Column G Column H Interest Rate Maturity Date 11.5% February 2026 10.75% February 2026 7.0% October 2031 Description of Lien Second mortgage on a retail shopping center in Rockville, MD Second mortgage on a retail shopping center in Rockville, MD Second mortgage on a retail shopping center in Baltimore, MD Periodic Payment Terms Interest only monthly; balloon payment due at maturity Interest only monthly; balloon payment due at maturity Principal and interest monthly; balloon payment due at maturity Prior Liens $58,750 Face Amount of Mortgages (2) $ 5,075 Carrying Amount of Mortgages(1) $ 5,075 58,750 (2) 4,500 4,433 4,990 (3) 600 35 Principal Amount of Loans Subject to delinquent Principal or Interest — $ — — $63,740 $ 10,175 $ 9,543 $ — _____________________ (1) The amounts are net of any expected losses in accordance with ASU 2016-13. See note 2 to the consolidated financial statements. For Federal tax purposes, the aggregate tax basis is approximately $10.2 million as of December 31, 2021. (2) These mortgages are both subordinate to a first mortgage of $58.8 million in total. We do not hold the first mortgage loan on this property. Accordingly, the amount of the prior lien at December 31, 2021 is estimated. (3) This mortgage is subordinate to a first mortgage of $5.0 million. We do not hold the first mortgage loan on this property. Accordingly, the amount of the prior lien at December 31, 2021 is estimated. F-40 FEDERAL REALTY INVESTMENT TRUST SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE - CONTINUED Three Years Ended December 31, 2021 Reconciliation of Carrying Amount (In thousands) Balance, December 31, 2018 and 2019 .................................................................................................................... $ January 1, 2020 adoption of new accounting standard - See Note 2 Additions during period: Acquisition of loans, net of valuation adjustments......................................................................................... Issuance of loans............................................................................................................................................. Balance, December 31, 2020 .................................................................................................................................... Additions during period: 30,429 (790) 9,560 693 39,892 Issuance of loans............................................................................................................................................. 600 Deductions during period: Collection and satisfaction of loans ................................................................................................................ Valuation adjustments..................................................................................................................................... Balance, December 31, 2021 .................................................................................................................................... $ (30,339) (610) 9,543 F-41 Letter from our Chairman and our CEO March 25, 2022 Dear Shareholders: On behalf of the Board of Trustees and the entire Federal team, we’d like you to join us at our 2022 Annual Meeting of Shareholders. We will hold our meeting virtually so that more shareholders are able to participate. This proxy statement includes important information for how you can join and ask questions at the meeting and about the matters that will be voted on at the meeting. In looking back on 2021, we began the year with the hope that the most challenging year in our nearly 60-year history was behind us but with little clarity on how quickly our business would rebound from the COVID-inflicted challenges of 2020. We were pleased as industry conditions improved faster than we had anticipated and we were able to end the year collecting about 97% of our contractual rents for the fourth quarter, up significantly from what we were collecting as the governmental lockdowns designed to stop the spread of the virus were felt by many of our retail tenants early in 2020. There were challenges we worked through in 2021 and continue to work through today as our business and the broader economy continue to recover from the pandemic but one thing that remained consistent through these difficult years has been our focus on long-term growth and positioning the company for future success. Our prudent balance sheet management allowed us to take advantage of the economic disruption in the economy and acquire 5 new properties having a gross value of $440 million. Each of these properties has future growth opportunities and was priced more attractively than if we were to acquire them today. We also continued to deliver on our development pipeline in 2021, placing more than $486 million of investment into service that will generate additional revenue and create additional long-term value over the next several years. These accomplishments were only possible through the considerable efforts of our Board and each and every one of our employees. Their ability to address the continuing challenges of the pandemic while also delivering results to position the company for future growth has been extraordinary. We are extremely proud of the work this team has accomplished. We look forward to your participation in the meeting and want to thank you for your continued support of Federal. Sincerely, David W. Faeder Non-Executive Chairman of the Board Donald C. Wood Chief Executive Officer Notice of Annual Meeting of Shareholders ANNUAL MEETING PROPOSALS Board Recommends LOGISTICS Proposal 1 Election of our seven nominees to serve as trustees for a term of one year Proposal 2 Approval on an advisory basis of our 2021 executive compensation Proposal 3 Ratification of the appointment of Grant Thornton, LLP as our registered public accountants for fiscal year 2022 FOR (see p. 11) FOR (see p. 19) FOR (see p. 39) Other business will be transacted as may properly come before the 2022 annual meeting of shareholders (“Annual Meeting”). Beneficial Owners If you own shares registered in the name of a broker, bank or other nominee, please follow the instructions they provide on how to vote your shares. Proxy Voting Please submit your proxy or voting instructions as soon as possible to instruct how your shares are to be voted at the Annual Meeting, even if you plan to attend the meeting. If you later vote at the Annual Meeting, your previously submitted proxy or voting instructions will not be used. On behalf of the Board of Trustees Dawn M. Becker Executive Vice President-General Counsel And Secretary Date and Time Wednesday, May 4, 2022 9:00 a.m. Eastern Time Record Date Monday, March 14, 2022 Our Annual Meeting will be virtual. To participate, vote or submit questions during the meeting via live webcast, please visit: https://web.lumiagm.com/202329683 See page 43 for additional information on how to attend the virtual Annual Meeting. Mailing Date This proxy statement was first mailed to shareholders on or about March 25, 2022. HOW TO VOTE Shareholders of Record By Internet www.voteproxy.com By Telephone 1-800-776-9437 By Mail Complete your proxy card and cast your vote by pre-paid mail Important Notice Regarding Internet Availability of Proxy Materials The proxy statement and annual report to shareholders, including our annual report on Form 10-K for the year ended December 31, 2021, are available at www.federalrealty.com. References in this proxy statement to our website are provided for your convenience only and the content on our website does not constitute part of this proxy statement. Table of Contents WHO WE ARE Company Reorganization Operating Performance Highlights Environmental and Social Responsibility Highlights and Commitment GOVERNING THE COMPANY Corporate Governance Policies and Procedures Board Leadership Trustee Independence Board Meetings Overseeing Risk Management Board Committees Board and Committee Assessments Compensation Committee Interlocks and Insider Participation Communications with the Board Related Party Transactions PROPOSAL 1: ELECTION OF OUR TRUSTEES Trustee Characteristics and Selection Board Diversity and Tenure Qualifications and Experience of Nominees Additional Board Service Our Nominees Trustee Compensation PROPOSAL 2: APPROVING OUR EXECUTIVE COMPENSATION Compensation Discussion and Analysis 2021 Summary Information Compensation Plan Overview 2021 Compensation Decisions Compensation Policies and Procedures Compensation Committee Report 1 1 2 3 5 5 6 7 7 8 9 10 10 11 11 11 12 12 13 14 14 18 19 19 20 20 22 30 32 EXECUTIVE COMPENSATION Summary Compensation Table Grants of Plan-Based Awards Table Outstanding Equity Awards at Fiscal Year-End Table Options Exercised and Stock Vested in 2021 Non-Qualified Deferred Compensation Potential Payments on Termination of Employment and Change-in-Control CEO Pay Ratio Equity Compensation Plan Information PROPOSAL 3: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Audit Committee Report BENEFICIAL OWNERSHIP Ownership of Principal Shareholders Ownership of Trustees and Executive Officers INFORMATION ABOUT THE ANNUAL MEETING Notice of Electronic Availability of Proxy Materials Why You Are Receiving These Materials Accessing Materials How to Vote How to Participate in the Annual Meeting Eliminating Duplicative Proxy Materials Solicitation of Proxies Shareholder Proposals for the 2023 Annual Meeting APPENDIX Appendix A – Reconciliation of Non-GAAP Financial Measures 33 33 34 35 36 36 36 38 39 39 40 41 41 42 43 43 43 43 43 44 45 45 45 A-1 A-1 Who We Are Federal Realty Investment Trust is an S&P 500 company that owns, operates and redevelops high-quality retail based real estate located primarily in major coastal markets and headquartered in North Bethesda, Maryland. Company Information Established in 1962 Member of the S&P 500 [1] As of 12/31/2021 Company Reorganization Our Properties[1] 104 properties 25 million SF of commercial space 3,369 residential units Our Employees[1] 310 employees 6 primary offices Average tenure of 8.7 years Through the end of 2021, we conducted our business through Federal Realty Investment Trust, a Maryland real estate investment trust (“Old FRT”). Effective as of January 1, 2022, Old FRT completed a holding company merger for the purpose of converting Old FRT into an umbrella partnership real estate investment trust or “UPREIT”. On January 5, 2022, Old FRT converted to a Delaware limited partnership and changed its name to Federal Realty OP LP to complete that conversion. The holding company created for the merger, FRT Holdco REIT, is now the parent company of Old FRT and pursuant to a name change effectuated immediately following the merger, is now known as Federal Realty Investment Trust (“New FRT”). The business, management and trustees of New FRT, and the rights and limitations of the holders of New FRT’s shares of beneficial interest, immediately following the merger were identical to the business, management and trustees of Old FRT, and the rights and limitations of holders of Old FRT’s shares of beneficial interest, immediately prior to the merger. The consolidated assets and liabilities of New FRT immediately following the merger and partnership conversion were the same as the consolidated assets and liabilities of Old FRT immediately prior to the merger and partnership conversion. New FRT, as the successor to Old FRT, is filing this proxy statement on behalf of itself and Old FRT for 2021 and on behalf of itself for 2022. All references in this proxy statement to “we”, “our”, the “Company”, “Federal” or “Federal Realty” refer to New FRT for itself and as successor to Old FRT, as applicable. More detailed information regarding the holding company merger and partnership conversion of Old FRT can be found in our Form 8-K12B filed with the Securities and Exchange Commission (“SEC”) on January 3, 2022 and our Form 8-K filed with the SEC on January 5, 2022. 1 Operating Performance Highlights 2021 was characterized by improved operating performance and continued focus and investment on avenues for future growth. COVID-driven governmental shutdowns in 2020 had a significant adverse impact on our ability to collect full rents from our tenants given their inability to operate their businesses and generate revenue. Although 2021 was still impacted by governmental restrictions and the emergence of new strains of COVID, the vast majority of our tenants experienced significant rebounds in their businesses which in turn drove our improved operating performance. Tenant optimism in a post-COVID recovery was also evident in the record volume of leases we signed during the year. We also continued to focus on making smart investments that are expected to lead to future growth. We acquired 5 new properties during 2021, each with potential for significant future value creation, placed significant portions of our development pipeline into service and began our next phase of development at Pike & Rose with a lease in hand for approximately 40% of the building. Following are a few of our 2021 operating performance highlights. Strong Earnings Growth Record Leasing Activity Value-Add Acquisitions >25% 573 deals/2.9M square feet $440 million Growth of both net income available for common shareholders and FFO per share* compared to 2020 New and renewal leases signed in 2021 Acquired 5 new assets with significant value add potential through re-leasing, renovation and redevelopment Execution on Development Pipeline Common Share Dividend $486 million $193 million 300,000 square feet 54 years Active major development projects placed into service New major development starts Executed leases for major development projects Consecutive years of common share dividend increases, the longest record in the REIT industry * FFO per share is a non-GAAP financial measure that we consider significant in our business. See Appendix A for a reconciliation of FFO per share to net income. 2 Environmental and Social Responsibility Highlights and Commitment the “About Us-Sustainability” in our 2020 Corporate Responsibility Report which is Our corporate responsibility initiatives are set forth in detail available under tab on our website which can be accessed by using this link https://issuu.com/federalrealty/docs/2020_corporate_responsibility_brochure. This report provides information in alignment with the frameworks established by the Global Reporting Initiative, Task Force for Climate-Related Financial Disclosures and Sustainability Accounting Standards Board as well as detailed information on the demographic make-up of our workforce by classification level. We are planning to provide later this year a new sustainability report for 2021 covering substantially the same topics and providing substantially the same information as is included in the 2020 report. Some of the highlights of our commitment to and progress on environmental and social responsibility topics include the following. Diversity and Inclusion (as of 12/31/2021) Women 64% 65% 55% Ethnic/Racial Minorities 47% 30% Women in Leadership 20% 43% 33% Overall 2021 New Hires 2021 Promotions Overall 2021 New Hires 2021 Promotions Signatory for CEO Action for Diversity and Inclusion Board Executive Leadership CEO Participating in NAREIT Dividends Through Diversity, Equity & Inclusion CEO Council Employees (as of 12/31/2021) 96% Employees proud to work at Federal – 2021 engagement survey 15% Of all employees were promoted in 2021 Pay Equity Philanthropic Support Third party study found equal pay for equal work throughout the Company Environment (as of 12/31/2021) Scope 1 and 2 GHG Emissions 30% Reduction Target Electric Consumption Landlord Controlled 15% Reduction Target Decrease landlord controlled emissions between 2019 and 2025 Decrease landlord controlled electric consumption between 2019 and 2025 $1.2 billion Invested in LEED certified buildings currently in service 13.1MW Solar power generating capacity in solar arrays at 25% of our properties 274 EV charging stations installed avoiding more than 3,000 metric tons of GHG emissions 3 Corporate responsibility is an area of focus for our Board of Trustees (“Board”), our management team and the entirety of our Company. It starts with our Board who is fully responsible for overseeing the Company’s approach to matters of environmental and social responsibility. To ensure that all of these matters get the level of attention necessary, the Board has delegated certain responsibilities to its standing committees. The specific responsibilities of each committee for environmental and social matters are described in more detail in the “Overall Risk Management” and “Board Committees” sections below. For management, primary responsibility for overseeing and driving our environmental and social initiatives has been assigned to our Executive Vice President, General Counsel who is one of our named executive officers. She is supported in those efforts by our Head of Sustainability and a cross-functional ESG council made up of senior members of various functional areas throughout the Company including asset management, development, tenant coordination, transactions, human resources, legal, accounting, marketing and investor relations. This group meets on a regular basis to guide and report on our Company’s ESG initiatives. We have two primary areas of focus throughout our Company – people, including our employees, vendors, suppliers, contractors, consultants and the communities in which we own our properties and do business, and planet which considers the impact our business and our properties have on the environment. We have aligned all of our efforts with respect to both people and planet with the ten United Nations Sustainable Development Goals that we believe are most relevant to our business. Our focus on people starts with our employees and our core values of Excellence, Integrity, Accountability and Innovation. At the end of 2021, we had 310 employees who had been with the Company nearly 9 years, on average, and who reflected the diversity of the communities where we do business. We use our annual engagement surveys to gather feedback from our employees to help us ensure that we are creating an environment where our employees can grow and thrive personally and professionally. Our 2021 efforts were primarily focused on advancement opportunities for our current team and diversification of our candidate pool for hiring new positions throughout the Company. These efforts resulted in nearly 15% of our total workforce being promoted in 2021 into a job with increased responsibilities and compensation. Our use of anonymized resumes, focus on non-traditional sources to identify job candidates and a requirement to consider one or more diverse candidates for all positions of director and above resulted in one of the most diverse groups of new hires in our history with 64% of our total hires during 2021 being women and 47% of those new hires being members of ethnic or racial minority groups. We have a long-standing commitment to being good environmental stewards as it relates to our properties. As long-term owners of real estate, ensuring properties are resilient in all senses of the word is critical. For more than a decade, we have focused our ground-up development efforts on investing in buildings that achieve a level of certification under the Leadership in Energy and Environmental Design (LEED) guidelines demonstrating our commitment to making investment decisions that take into account our building’s long-term environmental impact. That investment has totaled approximately $1.2 billion in LEED certified buildings already placed in service with another $1 billion invested and estimated to be invested over the next few years in buildings targeted to achieve LEED Gold certification or better. We have also made a commitment to renewable energy with our investment in on-site solar photovoltaic systems at nearly 25% of our properties. Our focus on decreasing energy usage and using renewable energy are the foundation for our goal to reduce our landlord controlled electric consumption and our Scope 1 and Scope 2 greenhouse gas emissions by 15% and 30%, respectively by 2025. Our properties also serve as the intersection between people and planet as we design and operate our properties to serve the needs of the local community and reflect the values of that community. Providing places for the community to gather and socialize helps add to the positive impacts our properties have on the local communities. 4 Governing the Company The Board is responsible for providing governance and oversight of the strategy, operations and management of the Company with its primary objective being to represent the interests of our shareholders. The Board oversees our senior management to whom it has delegated the authority to manage the day-to-day operations of the Company. The Board has adopted Corporate Governance Guidelines, committee charters, a Code of Business Conduct and a Code of Ethics for our Senior Financial Officers that, together with our Declaration of Trust and Bylaws, form the governance framework for the Board and its committees. The Board regularly reviews the Corporate Governance Guidelines and other corporate governance documents and from time to time revises them when it believes it the Company and our shareholders to do so given changing regulatory and governmental requirements and best practices. The following sections provide an overview of our corporate governance structure. is in the best interests of Complete copies of our Corporate Governance Guidelines, committee charters, Code of Business Conduct, Code of Ethics for Senior Financial Officers and other governance documents are available in the Investor/Corporate Governance section of our website at www.federalrealty.com. Printed copies of these documents are available upon written request to our Investor Relations department at 909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852. Corporate Governance Policies and Procedures Some of the key governance policies and practices that govern the Company include the following: Policy Annual election of all trustees Explanation All of our trustees are elected annually. No shareholder rights plan The Company does not have a “poison pill”. Proxy access right Independent Board Shareholders satisfying the requirements can include their own qualified trustee nominee in our proxy materials. All of our trustees are independent other than our chief executive officer. 100% independent Board committees Each of the Board’s committees is comprised entirely of trustees who are independent. Active Board oversight of strategy, risk management and environmental, social and governance (“ESG”) initiatives Independent Non-Executive Chairman Annual Board, committee and individual trustee assessment process Our Board provides robust oversight of our strategy, enterprise risk management and ESG initiatives, among other topics. Since 2003, we have had an independent Non-Executive Chairman leading the Board. Each of our Board committees and the Board as a whole conduct an annual assessment of its performance. In addition, the chair of the Nominating and Corporate Governance Committee (“Nominating Committee”) conducts a confidential assessment of each individual trustee intended to ensure that each trustee is performing to an acceptable level and to inform decisions on who to nominate for election at the next annual meeting. A similar assessment is performed by our Non-Executive Chairman on the performance of the chair of our Nominating Committee. 5 Active oversight of other board service by Trustees and management Commitment to Board refreshment Active shareholder engagement Robust Code of Business Conduct Clawback policy Equity ownership requirements Our Corporate Governance Guidelines require each Trustee and member of management to obtain approval from the Nominating Committee before accepting a position on any other public, private or non-profit board. Before approving any such additional board service, the Nominating Committee holistically evaluates the impact such additional board service would have on the individual’s ability to carry out his or her fiduciary and other obligations to the Company and advises the rest of the Board on the request and ultimate decision. The Board continually evaluates the skill sets and perspectives needed to effectively carry out its oversight function. Four of our current six non-management trustees have served on the Board for 5 years or less. We actively engage with our shareholders to understand their perspectives with our Non-Executive Chairman and other members of the Board participating if requested. Our Code of Business Conduct applies to all trustees and employees and reinforces our culture of compliance, ethical conduct and accountability. We also have in place an additional code of ethics for our senior officers who most directly impact our financial reporting. We have adopted a policy applicable to our named executive officers that provides for recovery of certain cash bonuses and equity compensation in the event of a financial restatement under certain circumstances. Our chief executive officer is required to hold shares with a value equal to at least 7 times his base salary and each of our other named executive officers is required to hold shares with a value equal to at least 2 1⁄ 2 times his or her base salary and annual bonus. Each trustee is required to hold shares having a value at least equal to 5 times the cash portion of the annual retainer. Named executive officers and trustees have a period of 5 years to meet these requirements. Prohibition on hedging and pledging Shares Our trustees and all employees are prohibited from entering into hedging transactions or pledging any of their shares. Board Leadership Our Board has been led by an independent Non-Executive Chairman since 2003. Mr. Faeder assumed that role after the 2021 annual shareholder meeting when our prior non-executive chairman retired from the Board. With this structure, our chief executive officer is able to develop and oversee the implementation of our business strategy and to lead and manage the day-to-day operations of the Company while Mr. Faeder focuses on Board oversight and governance and acts as a liaison with management. In addition, Mr. Faeder provides input on issues for Board consideration by helping to set and approve agendas for meetings and ensures that sufficient time is allotted for robust discussion of all issues. The Board believes that this structure provides the optimal leadership model to most effectively oversee and manage the Company in execution of its business strategy and objectives. 6 Trustee Independence The Board has adopted a standard designed to assist the Board in assessing trustee independence. This standard, included in our Corporate Governance Guidelines, states that a Trustee’s position as a director, officer or owner of a company with which we do business does not constitute a material relationship impacting independence so long as payments made by that company do not account for more than five percent (5%) of our gross revenues or more than ten percent (10%) of the gross revenues of that company. The Board performs an annual review of independence of all trustees and nominees. In order to make a determination that an individual is independent, the Board has to affirmatively conclude that the individual does not have any direct or indirect material relationship with the Company. This independence determination takes into account the requirements of our Corporate Governance Guidelines and any additional requirements imposed by law, regulation or the New York Stock Exchange (“NYSE”) listing standards and is only made after a thorough review of all relationships that exist between the Company and a trustee. Based on this review process, the Nominating Committee recommended, and the Board concluded, that all of our Trustees, other than Mr. Wood, our chief executive officer, are independent under all applicable standards for service on the Board and each of its committees. In making this determination, the Board considered certain indirect passive investments Mr. Nader has in two of the Company’s tenants and Mr. Wood’s previous service on the board of a company of which Mr. Ordan served as chief executive officer. The Board determined that neither of these situations constituted a material relationship with the Company that would interfere with either Mr. Nader’s or Mr. Ordan’s ability to exercise independent judgment. Board Meetings The Board met 5 times in 2021. In addition, our practice is for all trustees to attend all meetings of each of the Board’s standing committees. This practice ensures that each Trustee is fully informed on all issues facing the Company and has the opportunity to participate in discussions surrounding those issues. Only trustees who are members of the specific committee are entitled to vote on matters presented to that committee. In addition, at each quarterly meeting, the Trustees meet in executive session with all Trustees and then with just independent Trustees. All Trustees are also expected to attend our annual shareholder meeting. 100% Trustee Attendance • • • All 2021 Board meetings All 2021 Board Committee meetings 2021 Annual Shareholder Meeting 7 Overseeing Risk Management The full Board oversees the Company’s corporate-level risk management and management is responsible for the day-to-day management of risk. To assist in its oversight role, the Board’s committees are primarily responsible for certain matters relating to the risks inherent in the committees’ respective areas of oversight, with each committee regularly reporting and making recommendations to the full Board. Risk oversight responsibilities for our Board and its committees are delegated as set forth below. BOARD OF TRUSTEES Audit Committee Review with management the identification and management of overall Company risk Review with management Company financial risks and steps to monitor and mitigate those risks Review with management cyber security protections and risks around data protection Compensation and Human Capital Management Committee Nominating and Corporate Governance Committee Review compensation programs to ensure they do not incentivize excessive risk taking Review policies and succession planning to ensure appropriate tools in place to recruit and retain talent needed to achieve business objectives Develop governance principles and code of conduct to set expectations for ethical behavior Review relationships between trustees and the Company to ensure independence Review all ESG trends, risks and issues that could affect the Company's performance or reputation Day-to-day management of risk overseen primarily through the offices of the General Counsel and Chief Financial Officer COMPANY MANAGEMENT Our Board receives regular updates and recommendations from the committees about these activities, and reviews additional risks not specifically within the purview of any committee and risks of a more strategic nature, including operational risks, industry related risks and risks related to the environment, health, safety and security. The Board believes that this structure and division of responsibility is the most effective way to monitor and manage the Company’s risk. 8 Board Committees The Board has three standing committees – the Audit Committee, the Compensation and Human Capital Management Committee (“Compensation Committee”) and the Nominating Committee. Each committee operates is available in the Investors/Corporate Governance section of our website at under a written charter that www.federalrealty.com. Each committee consists entirely of independent, non-employee trustees. Audit Committee Membership Number of Meetings in 2021: 5 Gail P. Steinel, Chair (Financial Expert) David W. Faeder (Financial Expert) Elizabeth I. Holland (effective August 3, 2021) Anthony P. Nader, III (Financial Expert) Primary Responsibilities • Selects and oversees our independent auditor • Oversees our financial reporting, including reviewing results with management and our independent auditor • Oversees internal audit function • Oversees adequacy and integrity of our financial statements and our financial reporting and disclosure • Oversees financial risks and risks relating to cybersecurity, data security and information protection Reviews and approves any related party transactions requiring disclosure • More information on the Audit Committee is included in the Audit Committee Report and “Proposal 3: Ratification of Independent Registered Public Accounting Firm” beginning on page 39. Compensation and Human Capital Management Committee Number of Meetings in 2021: 4 Membership Elizabeth I. Holland, Chair (effective August 3, 2021) Nicole Y. Lamb-Hale Mark S. Ordan (effective August 3, 2021) Gail P. Steinel Primary Responsibilities • • • Evaluates performance of our CEO and recommends annual salary, bonus, equity-based incentives and other benefits for our CEO Reviews and approves annual salary, bonus, equity-based incentives and other benefits for our other senior officers Administers certain other benefit plans of the Company • • Reviews and approves all severance and other agreements with our CEO and other senior officers Administers and makes equity awards under our long-term incentive plan • Oversees our key strategies and human resources policies and practices for all employees The Compensation Committee Report is included at page 32 of this proxy statement and more detail on the work of the Compensation Committee is included in the “Compensation Discussion and Analysis” beginning on page 19. 9 Nominating and Corporate Governance Committee Number of Meetings in 2021: 3 Membership Mark S. Ordan, Chair (effective August 3, 2021) David W. Faeder (effective August 3, 2021) Nicole Y. Lamb-Hale Anthony P. Nader, III Primary Responsibilities • • Identifies and recommends individuals to stand for election to the Board Develops and oversees all corporate governance policies and procedures • Oversees annual trustee evaluation process • Recommends members of the Board to serve on its committees • Oversees corporate responsibility and ESG efforts and monitors priorities and progress on goals Board and Committee Assessments Board Assessment The Board annually assesses its overall performance through the specific, in-depth annual committee and trustee evaluations. Committee Assessments Each committee conducts an annual assessment of its performance and the performance of its members in accordance with its committee charter. The review process is led by the chair of the committee. Individual Trustee Assessments Each trustee completes a confidential assessment of each other trustee and has a one-on-one interview with the chair of the Nominating Committee to review those individual assessments and receive feedback on his or her assessment by other trustees. The Non-Executive Chairman completes the same process with respect to the chair of the Nominating Committee. Results are communicated to all trustees. The results of the individual trustee assessments are taken into account in determining which trustees should stand for election at the next annual shareholder meeting and in determining committee assignments and leadership roles. Compensation Committee Interlocks and Insider Participation The Compensation Committee currently consists of Ms. Holland, Ms. Lamb-Hale, Mr. Ordan and Ms. Steinel. Prior to August 3, 2021, Mr. Faeder also served on the Compensation Committee. There are no Compensation Committee interlocks and no member of the Compensation Committee serves, or has in the past served, as an employee or officer of the Company. 10 Communications with the Board Any shareholder or other interested party may communicate with the Board or any Trustee by sending the communication to our corporate offices at 909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852 in care of our Secretary. All communications should identify the party to whom it is being sent. Any communication which indicates it is for the Board of Trustees or fails to identify a particular Trustee will be deemed to be a communication intended for our Non-Executive Chairman of the Board. Our Secretary will promptly forward to the appropriate Trustee all communications received for the Board or any individual Trustee which relate to our business, operations, financial condition, management, employees or similar matters. Our Secretary will not forward to any Trustee any advertising, solicitation or similar materials. Related Party Transactions Our Code of Business Conduct requires that our Trustees and all of our employees deal with the Company on an arms-length basis in any related party transaction. All transactions between us and any of our Trustees, our named executive officers or other vice presidents, or entity in which any of them has an ownership interest, must be approved in advance by the Audit Committee pursuant to our written Code of Business Conduct and Audit Committee charter. Audit Committee approval is not required for us to enter into a lease with an entity in which any of our Trustees is a director, employee or owner so long as the lease is entered into in the ordinary course of business and is negotiated at arms-length and on market terms. We have no related party transactions with any of our Trustees that are required to be disclosed. None of our named executive officers has any indebtedness to the Company or any relationship with the Company other than as an employee and shareholder. Employment and change-in-control arrangements between the Company and the named executive officers are described in the “Potential Payments on Termination of Employment and Change-in-Control” section below. Proposal 1: Election of our Trustees Our Board has seven trustees, all of whom have been nominated to stand for election at the 2022 annual shareholder meeting. All nominees are currently trustees of the Company having previously been elected by our shareholders in May 2021. Our Board has determined that each nominee for election as a trustee at the annual meeting is an independent trustee, except for Mr. Wood who serves as our Chief Executive Officer. Each trustee is elected to hold office until our next annual meeting and until his or her successor is elected and qualified. You are entitled to cast one vote per share for each of the seven nominees. Proxies may not be voted for more than seven individuals. An “abstention” or “broker non-vote” will have no effect on the outcome of the vote for this proposal. Our Bylaws require that a nominee receive a majority of votes cast in order to be elected. Any nominee who does not receive a majority of votes cast will be required to submit a resignation to the Nominating Committee which would then make a recommendation to the Board as to whether to accept the resignation. The decision by the Board on any resignation would be publicly disclosed, along with the rationale for the decision, within 90 days after the election. We believe this process is a best practice and provides accountability to our shareholders. Over the past 5 years, each of these nominees has received, more than 93% of the votes cast at each shareholder meeting at which he or she stood for election. Our Board recommends a vote FOR each of the seven nominees 11 Trustee Characteristics and Selection integrity, demonstrated exceptional The Nominating Committee has primary responsibility for identifying and recommending individuals to be added to the Board and stand for election by shareholders. Individuals identified should have the highest personal and professional intelligence and judgment, have proven leadership skills, be committed to our success, have the requisite skills necessary to advance our long-term strategy, and have the ability to work effectively with our Chief Executive Officer and other members of the Board. In addition, the committee assesses the contribution that a particular candidate’s skills and expertise will make with respect to guiding our strategy and management when considered as a whole with the skills and expertise of other trustees. To identify, recruit and evaluate qualified candidates for the Board, the Board first looks to individuals known to current Board members through business and other relationships. If the Board is not able to identify qualified candidates in that way, the services of a professional search firm would be used. In addition, any shareholder, or a group of up to 20 shareholders, that has continuously owned for 3 years at least 3% of the Company’s outstanding common shares of beneficial interest can nominate and include in the Company’s annual meeting proxy materials up to the greater of two trustees or 20% of the number of trustees serving on the Board, provided forth in our Bylaws. For further that information regarding submission of a trustee nominee using the Company’s proxy access Bylaw provision or otherwise, see the “Shareholder Proposals for the 2023 Annual Meeting” section starting at page 45. the shareholder(s) and the nominee(s) satisfy the requirements set Board Diversity and Tenure A critical consideration for the Board is ensuring that there is diversity on the Board that can bring different viewpoints to discussions that reflect their diverse backgrounds and experiences. Although the Board does not have a formal diversity policy, the Board believes that having representation of a diversity of skills, ages, tenure, gender and ethnicity are all factors that have to be considered, consistent with the goal of creating a Board that best serves the needs of the Company and our shareholders. Gender Race and Ethnicity Women Committee Chairs Board Refreshment 43% Women Board Tenure 14% Racially Diverse 67% Committees Chaired by Women 2/3rd Non-management trustees joined Board in last 5 years Average Tenure Non-Management 7.8 years 2 2 2 years or less 3-5 years 3 > 5 years (includes our chief executive officer) 12 Qualifications and Experience of Nominees In considering each trustee nominee, the Board evaluated such person’s background, qualifications, attributes and skills to serve as a trustee. The Board considered the nomination criteria discussed above, as well as the years of experience many trustees have had working together on the Board and the deep knowledge of the Company they have developed as a result of such service, all of which are critically important in our business given the long-term nature of many of our decisions. The Board also evaluated each of the director’s contributions to the Board and his or her role in the operation of the Board as a whole using, among other things, the results of the annual assessments. We believe our trustee nominees bring a well-rounded variety of experiences, qualifications, attributes and skills, and represent a mix of deep knowledge of the Company and fresh perspectives. The table below summarizes some of the experience, qualifications, attributes and skills of our trustee nominees. l i e n e S t d o o W r e d e a F d n a l l o H l e a H - b m a L r e d a N n a d r O Skill Public Company Board Service Experience with operation of corporate boards REIT/Public Company Executive Leadership experience on wide range of relevant topics Financial Expertise/Literacy Expertise to oversee financial performance and reporting and internal controls Real Estate Investing/Finance Expertise to oversee capital investment Retail Industry Understanding issues facing primary revenue stream Human Capital Management Experience for overseeing compensation, succession and recruitment and retention of employees Corporate Responsibility Oversight Provides accountability and value creation through ESG efforts and otherwise Risk Management Oversight Identification and management of risk that could adversely impact the Company Board Diversity Women Race/Ethnicity This high-level summary is not intended to be an exhaustive list of each of our trustee’s skills or contributions to the Board but we do expect each trustee nominee to be knowledgeable in these areas. Further information on each trustee, including some of their specific experiences, qualifications, attributes and skills, is set forth in the biographies on pages 14 to 17 below. 13 Additional Board Service Over the past year, requests were approved for Ms. Lamb-Hale to serve on the board of Kroll Midco Corporation and for Mr. Ordan to serve on the board of The Carlyle Group, Inc. The primary factors considered by the Nominating Committee with respect to Ms. Lamb-Hale’s request included her familiarity with Kroll given her prior employment with that company, her current role as general counsel of Cummins, Inc. and the experience and insights she could gain from serving on the board of another company. After weighing those factors, the Nominating Committee concluded that Ms. Lamb-Hale’s service on the Kroll board would not adversely impact her service on our Board and approved her request. The year-end evaluation of Ms. Lamb-Hale confirmed that her service on the Kroll board had not impacted her performance as a trustee on our Board. With respect to Mr. Ordan’s request to serve on the board of The Carlyle Group effective as of April 1, 2022, the request was handled by our Non-Executive Chairman of the Board and presented to the entire Board to avoid any conflict with Mr. Ordan in his role as chair of the Nominating Committee. In considering the request, the Board took into account the considerable broad perspective he would bring to our Board as a Carlyle board member given that company’s strong reputation and breadth of investing expertise, his unique background as both a former REIT CEO and a retailer CEO, as well as his invaluable past performance on our Board. After carefully considering these items, the Board unanimously approved Mr. Ordan’s request to serve on the board of The Carlyle Group, concluding that such service would not adversely impact his service on our Board, and acknowledging that the Board would have the opportunity to reevaluate that conclusion as part of the end-of-year 2022 trustee evaluations which would form the basis for nomination to our Board in 2023. Our Nominees Provided below is information about our Board’s nominees, including their age, the year in which each trustee first became a trustee of our Company, their business experience for at least the past five years, the names of publicly-held companies (other than our Company) where they currently serve as a director, and additional information about the specific experience, qualifications, skills, or attributes that led to our Board’s conclusion that each nominee should serve as a trustee of our Company. DAVID W. FAEDER Managing Partner, Fountain Square Properties Managing Member, Kensington Senior Living Committees: Audit • Nominating • Age: 65 Trustee Since: 2003 Independent; Non-Executive Chairman Other Public Company Boards: • Arlington Asset Investment Corp. Background Mr. Faeder has been the managing partner of Fountain Square Properties since 2003 and of Kensington Senior Living since 2011, both of which are focused on the ownership, operation and development of senior housing. Prior to that, he held various positions at Sunrise Senior Living from 1993 to 2003. Those positions included Vice Chairman, President and Executive Vice President-Chief Financial Officer. Mr. Faeder began his career in public accounting before moving into investment banking immediately prior to joining Sunrise. Mr. Faeder received a BS in Business Administration from Old Dominion University and an MBA from the Colgate Darden Graduate School of Business at the University of Virginia. Mr. Faeder has been designated by the Board as an audit committee financial expert in accordance with the SEC definition. Skills and Qualifications Mr. Faeder has deep levels of experience in leadership, real estate investment and development as well as finance and accounting acquired from his time as a private investor and as a public company CFO coupled with his public company and accounting background. This experience provides valuable perspective on our investment decisions, alignment of our capital structure to support those investments and on our financial reporting. His experience in senior living also provides valuable insights for a growing area that could be a source of additional value creation at a number of our properties. 14 ELIZABETH I. HOLLAND Chief Executive Officer, Abbell Credit Corporation and Abbell Associates, LLC Age: 56 Trustee Since: 2017 Independent Committees: • • Compensation (Chair) Audit Other Public Company Boards: VICI Properties, Inc. • Background Ms. Holland is the Chief Executive Officer of Abbell Credit Corporation and Abbell Associates, LLC, a private real estate company. She has held that position since 1997. Prior to that, she served as a senior staff attorney on the Congressional Bankruptcy Review Commission (1996-1997), as a business reorganization attorney at Skadden, Arps, Slate, Meagher & Flom (1993-1996) and as a fixed income portfolio manager at Brown Brothers Harriman & Company from (1989-1990). From 2016-2017, Ms. Holland served as the Chairman of the Board of Trustees for ICSC (f/k/a International Council of Shopping Centers) and has served as a trustee for that organization since 2004. Ms. Holland earned a BA from Hamilton College and a JD from Brooklyn Law School. In addition to her public board service, Ms. Holland serves on the boards of 1000 Friends of Iowa, a non-profit organization focused on responsible land use, and Primo Center for Women & Children whose mission is to provide family shelter and permanent supportive housing and other supportive services to homeless families in Chicago. Skills and Qualifications Ms. Holland brings valuable insights into retailers and the retail industry in general from her time in leadership positions with ICSC and her own investing experience in retail real estate as well as a wealth of business and leadership experience from running a private real estate company. Those perspectives are invaluable for a retail based real estate company. NICOLE Y. LAMB-HALE Vice President and General Counsel, Cummins, Inc. Committees: • • Compensation Nominating Age: 55 Trustee Since: 2020 Independent Background Ms. Lamb-Hale is the Vice President and General Counsel of Cummins, Inc., a position she has held since 2021. Prior to that, she was a Managing Director at Kroll, a division of Duff & Phelps (2016-2021), a Senior Vice President at Albright Stonebridge Group (2013-2016), a global strategy consultancy, and served as the Assistant Secretary of Commerce for Manufacturing and Services in the International Trade Administration of the U.S. Department of Commerce (2010-2013) and as the Deputy General Counsel for the U.S. Department of Commerce (2009-2010). Ms. Lamb-Hale is a licensed attorney who began her career at law firms (1991-2009) where she practiced in the areas of business restructuring and public finance. Ms. Lamb-Hale earned an AB in Political Science from the University of Michigan and a JD from Harvard Law School. In addition to her service on Federal’s Board, Ms. Lamb-Hale serves on the board of Kroll Midco Corporation as well as the boards of various non-profit groups including the American Leadership Initiative, The Holton Arms School, Shiloh Baptist Church of Washington, D.C. and the Center for International Private Enterprise. Skills and Qualifications Ms. Lamb-Hale’s 30 years of experience, spanning the private and public sectors, in law, risk mitigation and restructuring, coupled with her leadership skills gained from her varied executive roles, provides the company with diverse and valuable insights as it develops and implements its current and long-term business strategies. 15 ANTHONY P. NADER, III Managing Director of SWaN & Legend Venture Partners Committees: Audit • Nominating • Age: 58 Trustee Since: 2020 Independent Other Public Company Boards: • Arlington Asset Investment Corp. Background Mr. Nader is a Managing Director of SWaN & Legend Venture Partners, an investment firm that Mr. Nader co-founded in 2006, with investments in growth-oriented companies. Mr. Nader also serves as Vice Chairman of Asurion, a privately held company with over 19,000 employees that provides technology protection to approximately 300 million customers worldwide. In 2008, Mr. Nader successfully merged his prior company, National Electronics Warranty (“NEW”) with Asurion. Mr. Nader joined NEW in 1990 as Chief Operating Officer, was named President in 1999 and Chief Executive Officer in 2006, a position he held until 2013. Under his leadership, NEW grew to be the largest global provider of extended service plans for the consumer electronics and appliance industry. Mr. Nader earned a BSBA in Finance from John Carroll University and an MBA from Weatherhead School of Management at Case Western Reserve University. Mr. Nader also serves as the Chairman of the Inova Health System Board of Trustees. Mr. Nader has been designated by the Board as an audit committee financial expert in accordance with the SEC definition. Skills and Qualifications Mr. Nader provides our Board with more than 30 years of business and leadership experience as well as a deep investment background in both real estate and growth-oriented companies including retailers. This background complements others on our Board and adds to our depth of financial and investing expertise that is so critical to the success of the Company. MARK S. ORDAN Chief Executive Officer, Mednax, Inc. Committees: • • Nominating (Chair) Compensation Age: 63 Trustee Since: 2019 Independent Other Public Company Boards: • Mednax, Inc. • The Carlyle Group, Inc. (as of 4/1/2022) Background Mr. Ordan currently serves as Chief Executive Officer of Mednax, Inc., a position he has held since 2020. Mednax is a physician-led health care organization that partners with hospitals, health systems and health care facilities to offer clinical services spanning the women’s and children’s continuum of care. Prior to joining Mednax, Mr. Ordan held chairman and Chief Executive Officer roles with Quality Care Properties, Inc. (2016-2018), Washington Prime Group (2015-2016), Sunrise Senior Living (2008-2013), The Mills Corporation (2006-2007), Balducci’s (2003-2006), High Noon Always (1999-2003), Chartwell Health Management (1996-1999) and Fresh Fields Market (1989-1996). He began his career in investment banking at Goldman Sachs in 1983. Mr. Ordan earned a BA from Vassar College and an MBA from Harvard Business School. Mr. Ordan currently serves on the board of the United States Chamber of Commerce (since 2012) and previously, Mr. Ordan served on the public company boards of VEREIT, Inc. (2015-2020), Forest City Realty Trust (2018), Quality Care Properties (2016-2018) and Washington Prime Group (2014-2017). Skills and Qualifications Mr. Ordan provides our Board with many years of leadership and governance experience from his years of serving as CEO of multiple companies and as CEO and a director of other publicly traded REITs, including retail REITs. His role on the Board is critical because it provides the unique combination of the perspectives of a public company retail landlord with the perspectives of retail tenants, given his experience of having founded and operated multiple retail concepts. In addition, Mr. Ordan is physically located in the Washington, DC area where our corporate headquarters is located which gives him unique knowledge of many of our properties and the markets in which they are located and makes him proximate to us in order to fulfill his obligations as a trustee. 16 GAIL P. STEINEL Owner of Executive Advisors Age: 65 Trustee Since: 2006 Independent Committees: • • Audit (Chair) Compensation Background Ms. Steinel is the owner of Executive Advisors (2007-present), a business that provides consulting services to chief executives and senior officers and leadership seminars/speeches to various organizations. Prior to creating her own consulting firm, Ms. Steinel was the Executive Vice President of Global Commercial Services of Bearing Point (2002-2007) and a global managing partner for Arthur Andersen’s Business Consulting Practice (1984-2002) after beginning her career as an auditor at Arthur Andersen (1977-1984). Ms. Steinel received a BA in Accounting from Rutgers University. Ms. Steinel’s public company board service experience includes MTS Systems Corporation (2009-2020). In addition, Ms. Steinel serves on the boards of Invesque, Inc., a Toronto stock exchange company that invests in a highly diversified portfolio of properties across the health care spectrum throughout the US and Canada, DAI, an international development company that tackles fundamental social and economic development problems caused by inefficient markets, ineffective governance, and instability, and the Center for Hope & Safety, a nonprofit that assists women and children suffering from domestic violence. Ms. Steinel has been designated by the Board as an audit committee financial expert in accordance with the SEC definition. Skills and Qualifications Ms. Steinel has over 35 years of experience in auditing, leadership, leadership development and financial systems that provides us with valuable insights on leadership, leadership development, risk management and systems operations. DONALD C. WOOD Chief Executive Officer, Federal Realty Investment Trust Age: 61 Trustee Since: 2003 Background Mr. Wood currently serves as our Chief Executive Officer, a role he has held since 2003. Before assuming that role, he served as our President (2001-2003) and held the titles of Chief Operating Officer and Chief Financial Officer at various points from 1998-2003. Prior to joining Federal, Mr. Wood served as the Chief Financial Officer for Caesers World, Inc. (1996-1998), the Assistant/Deputy Controller of ITT Corporation (1990-1996), the VP of Finance for Trump Taj Mahal Associates (1989-1990) and as an audit manager with Arthur Andersen (1982-1989). Mr. Wood received a BS in Business Administration from Montclair State College. Mr. Wood previously served as a director of public companies Quality Care Properties (2016-2018) and Post Properties (2011-2016). In addition to his public company board service, Mr. Wood served as Chairman of the Board of Trustees of the National Association of Real Estate Investment Trusts (2011-2012) and previously served on the Board of Governors of ICSC (f/k/a International Council of Shopping Centers). Skills and Qualifications Mr. Wood’s 24 years of experience with Federal and his responsibilities as chief executive officer provide the Board with familiarity and details on all aspects of operating the company. 17 Trustee Compensation As of December 31, 2021, our standard arrangement included the following: for compensation for our non-management trustees Trustee Compensation Element Amount Payment Form Board Service Annual Retainer Annual Retainer for Non-Executive Chairman Committee Chairs Audit Committee Compensation Committee Nominating Committee $ $ $ $ $ 200,000 40% cash; 60% equity 225,000 60% cash; 40% equity 25,000 Cash 15,000 Cash 15,000 Cash In 2021, the annual retainer for the Non-Executive Chairman was decreased from $275,000 to $225,000 and payment of the retainer for the Non-Executive Chairman was adjusted to 60% cash and 40% equity. No other changes were made to non-management Trustee compensation in 2021 and no further changes have been made for 2022. All amounts are prorated for any partial years of service and shares issued are fully vested on the grant date. Our non-management Trustees are required to maintain ownership of our shares having a value equal to at least 5 times the amount of their annual cash retainer. This requirement must be met within 5 years after joining the Board. As of December 31, 2021, all of our Trustees who have been on the Board for 5 or more years were in full compliance with this ownership requirement. We expect our newest Trustees who joined the Board in 2019 and 2020 to be in compliance with this equity ownership requirement within the 5-year time frame. The actual compensation awarded to our Trustees for service in 2021 was as follows: Name Jon E. Bortz(3) David W. Faeder(4) Elizabeth I. Holland Nicole Y. Lamb-Hale Anthony P. Nader, III Mark S. Ordan Gail P. Steinel Joseph S. Vassalluzzo(3) Total Annual Retainer Paid in Cash Paid in Shares(1) Committee Chair Fees(2) 68,493 $ 116,315 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ 94,178 $ - $ 100,192 $ 120,000 $ 120,000 $ 120,000 $ 120,000 $ 120,000 $ - $ - $ 8,836 $ 15,000 $ - $ - $ 6,164 $ 25,000 $ - $ Total 68,493 225,343 215,000 200,000 200,000 206,164 225,000 94,178 678,986 $ 700,192 $ 55,000 $ 1,434,178 $ $ $ $ $ $ $ $ $ (1) Shares were issued on January 3, 2022 with the number of shares received by each Trustee determined by dividing the amount to be paid in shares by $136.32, the closing price of our shares on the NYSE on December 31, 2021. (2) Prorated for partial year of service. Mr. Faeder served as Compensation Committee Chair until Ms. Holland became Chair on August 3, 2021. Ms. Holland served as the Nominating and Corporate Governance Chair until Mr. Ordan became Chair on August 3, 2021. (3) Pro-rated for partial year of service ending May 4, 2021. (4) Prorated for partial year of service as a trustee and as the non-executive chairman effective May 5, 2021. 18 Proposal 2: Approving our Executive Compensation We are seeking an advisory vote to approve our executive compensation for 2021. At our 2017 annual meeting of shareholders, a majority of shareholders voted to have a “Say on Pay” vote each year. As a result, we will conduct an advisory vote on executive compensation annually at least until the next shareholder advisory vote on the frequency of such votes. Although the “Say on Pay” vote is advisory and is not binding on our Board, our Compensation Committee will take into consideration the outcome of the vote when making future executive compensation decisions. Our Board has designed our current executive compensation program to appropriately link compensation realized by our named executive officers to our performance and properly align the interests of our named executive officers with those of our shareholders. The details of this compensation for 2021, and the reasons we awarded it, are described in the “Compensation Discussion and Analysis,” starting below. Our Board recommends a vote FOR the compensation of our NEOs The text of the resolution if Proposal 2 is passed is: RESOLVED, that the shareholders of the Company hereby approve, on an advisory basis, the compensation of our NEOs as described in the CD&A and the Executive Compensation section that follows as required by Item 402 of Regulation S-K. The affirmative vote of a majority of votes cast at the Annual Meeting, in person or by proxy, is required to approve this proposal. An “abstention” or “broker non-vote” will have no effect on the outcome of the vote for this proposal. COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis (CD&A) discusses the compensation objectives and principles the following named executive officers underlying our executive compensation decisions for 2021 for (collectively, our “named executive officers” or “NEOs”). Donald C. Wood Chief Executive Officer Jeffrey S. Berkes President and Chief Operating Officer Daniel Guglielmone Executive Vice President-Chief Financial Officer and Treasurer Dawn M. Becker Executive Vice President- General Counsel and Secretary 19 2021 SUMMARY INFORMATION Business Highlights All executive compensation decisions are considered in the context of our financial and operational performance for the year. Performance in 2021 was marked primarily by a quicker than anticipated recovery by retail and other tenants from the impacts of COVID, continued focus on smart capital allocation with investments that position the Company for long-term growth and sound execution of our basic business fundamentals of leasing and property operations. Following are some of our performance highlights for 2021 that were considered in determining compensation for our NEOs for 2021. FFO per Share of $5.57* $440M New Acquisitions $486M Projects Placed in Service Significantly exceeded expectations with faster than expected retailer recovery from COVID and collection of larger amount of past due rents than anticipated Acquired 5 new assets, 2 in a new market. Each asset has significant long-term value creation opportunities and was acquired at favorable, COVID impacted pricing. Major projects, primarily Cocowalk and new buildings at Assembly Row placed into service and delivering additional revenue to drive growth over the next several years * FFO per share is a non-GAAP financial measure. See Appendix A for a reconciliation of FFO per share to net income. Record Leasing Activity Signed 593 new and renewal leases for nearly 2.9 million square feet of space Increased Dividend for 54th Year Increased dividend rate on our common shares for the 54th consecutive year, the longest such record in the REIT industry Executive Leadership In February 2021, Jeffrey S. Berkes was promoted to the position of President and Chief Operating Officer. The Committee approved a new compensation package for Mr. Berkes commensurate with his new responsibilities. A more detailed discussion of that compensation package can be found on page 28. Pay Decision Summary The Committee did not change the targeted level of compensation for any of our NEOs for 2021 with the exception of Mr. Berkes whose compensation was changed in connection his promotion. In addition, a share grant was made to Mr. Guglielmone as described in more detail below. Based on our 2021 performance, our annual bonus plan paid out at 125% of target and our long-term incentive plan paid out at 99% of target. COMPENSATION PLAN OVERVIEW Compensation Objectives Our executive compensation program is structured with 3 primary objectives: Align with Shareholders Incentivize Performance Provide Competitive Pay Align executive compensation with the interests of our shareholders Link executive compensation to achieving short- and long-term business objectives Establish competitive market compensation to compete and retain top level talent critical to our business 20 Primary Compensation Elements The following diagram outlines the key elements of our compensation program and the objective of each element. Pay Element Salary (Fixed) Annual Bonus (At Risk) Long- Term Incentive (At Risk) TOTAL PAY Pay Objective and Description Salary: Provide Competitive Pay Paid in cash; amount set based on experience, responsibilities, skill, performance and market conditions Annual Bonus: Align with Shareholders, Incentivize Performance, Provide Competitive Pay Incentivizes annual performance goal that supports long- term value Paid in cash; executive can elect to take up to 25% in shares that vest over 3 years FFO per Share is a meaningful annual earnings metric for REITs Long-Term Incentive: Align with Shareholders, Incentivize Performance, Provide Competitive Pay Paid in shares that vest over 3 years; ability for executive to take up to 50% in options that vest over 5 years Measured over 3-year performance period Relative Total TSR: Comparative returns for shopping center REITs generated over performance period FFO Multiple Premium: Reflects investor sentiment for ability to deliver future value Return on Invested Capital: Reflects effectiveness of capital allocation decisions FFO per Share Relative TSR (34%) FFO Multiple Premium (33%) Return on Invested Capital (33%) Pay for Performance Our executive compensation program rewards successful annual performance and encourages long-term value creation for our shareholders with the heaviest weighting towards performance based compensation. Both short- and long-term incentive compensation is subject to achieving objective, at-risk performance hurdles across multiple metrics with short-term performance measured over a 1-year period and long-term performance measured over a 3-year period. The charts below show the mix of 2021 fixed pay (base salary) and at-risk pay incentives (annual bonus and long-term incentive) at target levels of compensation for our CEO and the average of the target level compensation for our three other NEOs. Our CEO 13% Base Salary Average of Other NEOs 19% Annual Cash Bonus 29% Base Salary 68% Long-Term Equity Award 87% At-Risk Performance Based Pay 47% Long-Term Equity Award 71% At-Risk Performance Based Pay 21 24% Annual Cash Bonus Setting Compensation Annual compensation for our NEOs is paid in both cash and restricted shares with a significant portion at risk and contingent on achieving either annual or long-term performance goals. The total potential compensation for our NEOs is established based on the scope of his/her individual responsibilities and contributions to our performance taking into account competitive market compensation paid for similar positions. Our Compensation Committee determines appropriate levels of total compensation for each NEO by applying their individual understanding, experiences and judgments in the national marketplace of senior level real estate positions and related industry pay in both public and private companies that may compete for our executives while also considering the relative importance of various positions at the Company given our business plan and organization compared with the business plans of our major competitors. The Compensation Committee also consults compensation surveys prepared for the National Association of Real Estate Investment Trusts (“NAREIT Survey”) to confirm its assessment of appropriate market compensation for our NEOs, reviewing the information reported for each position by the 112 real estate investment trusts (“REITs”) that participated in the latest survey as well as by the approximately 24 retail focused REITs that participated in that survey. In addition, in finalizing decisions for 2021 with respect the Compensation Committee discussed market compensation and various matters with our independent compensation consultant, Semler Brossy Consulting Group (“SBCG”). SBCG provides services solely to the Compensation Committee, does not provide any services directly to management and was determined by the Compensation Committee to be independent with no conflicts of interest. to annual bonus payouts and payouts under our long-term incentive plan, Using the three components of compensation, their knowledge and experience in the marketplace, the NAREIT Survey information and the discussions with SBCG, the Compensation Committee establishes an individual compensation package for each NEO setting the target level of potential compensation for each NEO. Say on Pay Vote At the 2021 annual meeting of shareholders, 90% of the votes cast favored our “Say on Pay” proposal. The together with recommendations of SBCG, and elected to keep in place Committee considered this result unchanged the basic structure and elements of our executive compensation program. 2021 COMPENSATION DECISIONS Below is a description of the individual elements of pay and the design used to determine compensation for 2021, followed by a more detailed review of performance and pay decisions for each of our NEOs. Base Pay No changes were made in 2021 to base pays for either Mr. Wood, Mr. Guglielmone or Ms. Becker. Mr. Berkes’ base pay was increased to $575,000, an increase of approximately 9.5%, in connection with his promotion to President and Chief Operating Officer. 22 Annual Bonus Program Our bonus plan is an annual cash incentive program designed to reward achievement for the current year measured against a pre-determined hurdle. The process to determine the annual bonus that actually gets paid to each of our NEOs consists of three steps: STEP 1 What We Do How We Do It 2021 Decision Establish bonus potential for each NEO Determine target bonus for each NEO as a percentage of base pay with target percentage determined as part of NEO’s total compensation package The Committee did not make any changes to the target bonus percentage for any of our NEOs for 2021, leaving the bonus potential for each NEO unchanged from the prior year The Compensation Committee determines for each NEO an appropriate annual bonus target set as a percentage of base pay. The total potential bonus for each NEO is considered in the context of ensuring that each NEO’s overall compensation potential is within market for the position, has a significant component based on company performance and provides appropriate incentive for the NEO to drive Company performance. The Committee did not adjust the target bonus percentage for any of our NEOs in 2021. The following table sets forth the bonus potential for each NEO and the original date on which his or her bonus target was established. 2021 Target Bonus Payout Potential Base Pay Percentage Threshold (75%) Target (100%) Stretch (125%) Target% $ $ $ $ 950,000 575,000 500,000 475,000 150% $ 1,068,750 100% $ 75% $ 75% $ 431,250 281,250 267,188 $ $ $ $ 1,425,000 575,000 375,000 356,250 $ $ $ $ 1,781,250 No change since 2010 718,750 468,750 445,313 No change since 2019 No change since 2016 No change since 2003 NEO Mr. Wood Mr. Berkes Mr. Guglielmone Ms. Becker STEP 2 What We Do How We Do It 2021 Decision Determine level of available funding for bonus payouts Based on FFO per diluted share achieved by the Company for the year measured against previously established hurdles. See additional discussion below Bonus pool funding established at 125% of target based on achieving FFO per diluted share for 2021 of $5.57. See additional discussion below The Compensation Committee has determined that FFO per diluted share is the appropriate measure to use for our annual bonus program. It is a key annual metric used by investors, the Board and management use it to evaluate the Company’s performance for the year and it reflects the full range of decision making and execution for the Company for the year. The Committee sets the required performance level for FFO per diluted share at the beginning of each year with levels reflecting performance that ranges from acceptable at the threshold level to exceptional at the stretch level. The FFO per diluted share achievement levels for our 2021 annual bonus program were established by the Compensation Committee early in the year based on our budget for the year which was heavily impacted by our 23 view of the continuing impact of COVID-19 on our tenants’ ability to pay rent due under their leases. To try to capture this higher than normal level of uncertainty around expected performance for 2021, the Committee set our target bonus payout slightly higher than our initial budget for the year and established a range of $0.25 per share from threshold payout to stretch payout, a range that was nearly 45% wider than either our 5 or 10-year historical average. Following are the achievement levels set by the Compensation Committee and our actual level of FFO per share achieved. Threshold FFO per Share Payout as % of Target $ $ 4.55 75% Target 4.68 100% $ Stretch $ 4.80 125% Actual 5.57 125% See Appendix A for a reconciliation of FFO per share to net income. Our actual FFO per share exceeded our bonus target by approximately 19% driven primarily by the businesses of our retail tenants rebounding more quickly and with more strength than we contemplated in our budget. We were able to collect significantly more rent tenants owed for the prior year of 2020 than we had anticipated, fewer tenants closed their doors than expected which led to increased revenue and we experienced significantly lower levels of credit the time our bonus target was established. Significant outperformance during 2021 as compared to initial expectations for the year was a consistent theme amongst other public company retail landlords with 7 similarly situated retail landlords having also exceeded their initial expectations provided to investors by 19% on average. loss than we had planned for at STEP 3 What We Do How We Do It 2021 Decision Determine final bonus payment to each NEO based on available funding determined by Company performance 25% of total potential earned based on company performance; remaining 75% earned based on Committee evaluation of NEO performance Based on the individual achievements of each NEO in 2021 outlined in more detail below, the Committee awarded each NEO 100% of his or her bonus potential for the year With the bonus pool having been funded based on Company performance, the final step is to determine how much of that potential bonus each of our NEOs will actually be paid. Each NEO is entitled to 25% of his or her bonus potential based on Company performance. The remaining 75% of the bonus potential is earned based on the Committee’s assessment of each individual’s performance and whether that NEO achieved the objectives set out by the Company within that NEO’s area of responsibility. The Committee elected to award each of our NEOs 100% of the individual performance portion of their bonus potential. The detailed considerations supporting that decision are set forth on pages 27-30. The table below summarizes the final bonus payouts to each of our NEOs. Earned Based on NEO Mr. Wood Mr. Berkes Mr. Guglielmone Ms. Becker Bonus Potential Company Performance (25%) Individual Performance (75%) Total Earned $ 1,781,250 $ $ $ 718,750 468,750 445,313 $ $ $ $ 445,313 179,688 117,188 111,328 $ $ $ $ 1,335,938 $ 1,781,250 539,063 351,563 333,984 $ $ $ 718,750 468,750 445,313 24 Our NEOs have the option to receive up to 25% of the final bonus payout in the form of shares that vest equally over three years with accelerated vesting on death, disability, change in control and termination without cause. In consideration of the extended payment period for this portion of the bonus already earned, the employee receives shares valued at 120% of the portion of the annual bonus he/she elects to receive in shares. This option is made available to all participants in our annual bonus plan at the level of Director and above. The cash portion of the 2021 annual bonus is reflected in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table in this proxy statement. The portion of the annual bonus paid in shares will be included in the “Stock Awards” column in the Summary Compensation Table and the Grants of Plan-Based Awards Table in next year’s proxy statement. Long-Term Incentive Program The largest portion of compensation for each of our NEOs comes from our equity based long-term incentive program that aligns the interests of our NEOs with shareholders by incentivizing our NEOs to identify and accomplish longer-term business objectives that generate value through share price appreciation and dividend growth. Our program measures performance over the prior 3-year period with shares awarded at the end of the 3-year performance period based on actual results. Performance for purposes of our long-term incentive program is measured against the following preset metrics. Plan Metric Weighting Description Relative Total Shareholder Return 34% FFO Multiple Premium 33% Return on Invested Capital 33% • • • • • • • • • • Compares our total shareholder return, taking into account share price appreciation and assuming reinvestment of dividends, against the total return achieved by the Bloomberg REIT Shopping Center index (“BBRESHOP”) BBRESHOP is comprised of publicly traded companies that own and operate open air shopping centers BBRESHOP provides an appropriate basis to compare our performance against similarly situated companies Compares FFO multiple at which the Company is trading at the end of the performance period against the average FFO multiple at which all other public shopping center companies (other than the Company) are trading at that time FFO multiples are provided by a third party investment bank Serves as a measure of investor expectations of our long- term growth potential and confidence in our management team versus other publicly traded open air shopping center companies Reflects how effectively we have allocated our shareholders’ capital during the 3-year performance period Incentivizes sound, long-term investment decisions focused on generating strong future shareholder returns Encompasses the revenue and investment impact from all capital decisions Required performance levels established in advance to reflect changing market expectations as we acquire, sell and develop assets 25 The required performance levels for each of these metrics and the actual performance achieved for the 3-year performance period from 2019 through 2021 is set forth below. Performance Level Payout as Percent of Target Weighting Relative Total Return FFO Multiple Premium Return on Invested Capital 34% 33% 33% Treshold 50% Index - 5% Target 100% Index Stretch 150% Actual Payout Index + 5% -5.83% At least +5% At least +15% At least +20% 47.10% 6.25% 6.50% 6.75% 6.76% 0% 150% 150% Based on these levels of performance, each of our NEOs is eligible for total payout under the plan at 99% of his/ her target long-term incentive award. The Committee has the right to increase or decrease each NEO’s award under our long-term incentive program by up to 20% to reflect individual performance. The Committee elected to exercise that right with respect to the award for Mr. Wood as discussed in more detail on page 27. The amount each NEO is eligible to receive under our long-term incentive program and the amount actually awarded are set forth below. NEO Mr. Wood Mr. Berkes Mr. Guglielmone Ms. Becker Long-Term Equity Potential Amount Amount Threshold Target Stretch Earned Awarded $ 2,500,000 $ 5,000,000 $ 7,500,000 $ 4,950,000 $ 5,940,000 $ $ $ 500,000 $ 1,000,000 $ 1,500,000 450,000 300,000 $ $ 900,000 $ 1,350,000 600,000 $ 900,000 $ $ $ 990,000 891,000 594,000 $ $ $ 990,000 891,000 594,000 See the discussions on pages 27-30 for the factors considered by the Compensation Committee in determining the final long-term incentive awards payable to our NEOs for the 2019 through 2021 performance period. The equity awards under our long-term incentive program are paid in the form of restricted shares that are issued upon completion of a 3-year performance period and then vest over an additional period of 3 years from the date they are issued. The actual number of shares awarded to each of our NEOs is determined by dividing the amount of the award by the closing price of our stock on the NYSE on the date the awards are made. All participants in our long-term incentive program, including our NEOs, have the ability to take up to half of his/her award in the form of options that vest over 5 years. For 2021, all of our NEOs elected to take the entirety of his/her award in the form of restricted shares. There is no amount included in the Summary Compensation Table or Grants of Plan-Based Awards Table in this proxy statement for long-term incentive awards earned for the 2019-2021 performance period. Those amounts will be included in next year’s proxy statement. The long-term incentive awards included in the Summary Compensation Table and the Grants of Plan-Based Awards Table for our NEOs in this proxy statement relate to awards made in February 2021 for the 3-year performance period ending December 31, 2020. 26 2021 Compensation Decisions Below is a summary of the 2021 earned and awarded compensation for our NEOs and the accomplishments considered by the Committee when determining 2021 compensation. Donald C. Wood Chief Executive Officer Age: 61 Joined: 1998 Responsibilities Mr. Wood has overall responsibility for the development and execution of our long-term strategic priorities to generate value for our shareholders 2021 Compensation (in 000s) Base Pay: Annual Bonus: Long-Term Equity: Total: $ 950 $1,781 $5,940 $8,671 2021 Compensation Decisions and Rationale The Committee’s practice for the last decade has been to consider and implement any necessary market adjustments to Mr. Wood’s target compensation package every 5 years. With the last adjustment having occurred in 2016, a market adjustment was scheduled to be considered for 2021 compensation. The Committee decided, however, that it would not be appropriate to make any market compensation adjustments in 2021 given the continuing COVID-related business uncertainties and elected to defer consideration of market pay adjustments until 2022. As a result, Mr. Wood’s target compensation was not changed for 2021, remaining at the level established in 2016. Based on the performance of the Company and Mr. Wood’s performance in 2021, and after considering market data provided by SBCG, the Committee elected to award Mr. Wood his full annual bonus opportunity and to increase Mr. Wood’s long-term incentive award by 20% for individual performance as permitted under the provisions of the long-term incentive program. The Committee believed the adjustment was warranted given Mr. Wood’s leadership of the Company, the fact that no market adjustments had been made to his compensation since 2016 and that our compensation consultant indicated that the total award was still well within market for a person with Mr. Wood’s experience and in light of Company performance. Given that 87% of Mr. Wood’s target compensation is tied to our performance over a 1 and 3-year period, Mr. Wood’s pay remains highly correlated to our performance. 2021 Key Achievements ✓ Led the Company’s efforts to execute on our long-term strategy and objectives ✓ Led succession planning with the promotion of Mr. Berkes to President and Chief Operating Officer ✓ Led our overall efforts to maximize our post-COVID rent collections ✓ Led our record level of leasing activity to drive portfolio occupancy ✓ Led our diversity, equity and inclusion initiatives, including by taking a leadership role in the Diversity Council of the National Association of Real Estate Investment Trusts ✓ Led continued advancement of overall strategy and objectives on environmental, social and governance initiatives ✓ Led capital allocation decisions in acquisitions and developments intended to create significant future value for our shareholders 27 Jeffrey S. Berkes President and Chief Operating Officer Age: 58 Joined: 2000 Responsibilities Mr. Berkes has overall responsibility for the operation of the Company’s operating assets and development projects as well as overall responsibility for new property acquisitions 2021 Compensation (in 000s) Base Pay: Annual Bonus: Long-Term Equity: Total: $ 575 $ 719 $ 990 $2,284 Other: $1M restricted share award $1M performance share award $75,000 cash bonus 2021 Compensation Decisions and Rationale The Committee retained SBCG to assist with developing Mr. Berkes’ 2021 target compensation package to reflect his new position and increased responsibilities as President and Chief Operating Officer. The new compensation package included an increase in base pay from $525,000 to $575,000 as well as two new equity awards described below. No change was made to Mr. Berkes’ target bonus percentage or to his long-term equity target. Included in the new package was a restricted share award of $1 million that will vest equally over 5 years provided Mr. Berkes remains employed by the Company and a performance award with the opportunity to earn 10,441 restricted share units at target level performance (valued at the time of award at $1 million) in the event the Company’s relative total shareholder return for the period from January 1, 2021 through December 31, 2024 is at least equal to the total shareholder return for the BBRESHOP. Mr. Berkes could earn as few as 5,221 share units if our total shareholder return is more than 5% below the BBRESHOP during the performance period or as many as 20,882 share units if our total shareholder return exceeds the BBRESHOP by at least 10%. Final results will be interpolated between the performance levels. At the end of the performance period, Mr. Berkes will also be entitled to receive dividend equivalent units on each restricted share unit that is earned. The Committee, in consultation with SBCG, determined that these awards, combined with the basic compensation package, were within appropriate market ranges of compensation for a company president with Mr. Berkes’ years of experience and expertise in the real estate industry and with the Company and created an appropriate balance between time-based vesting and performance based awards to provide additional retention value. As part of the final 2021 compensation decisions, based on Mr. Berkes’ performance, the Committee awarded Mr. Berkes his full bonus and full long-term equity award and, as part of a special bonus allocation that the Company awarded to every employee in the Company other than Mr. Wood, the Committee awarded Mr. Berkes a one-time cash bonus of $75,000 in recognition of the extraordinary efforts to manage the Company through the worst of the financial impacts from COVID. 2021 Key Achievements ✓ Led the Company’s investment efforts that resulted in acquisition of 5 new properties with a total value of $440 million ✓ Oversaw development efforts that resulted in delivery of more than $486 million of major development projects placed into service and commencement of one new ground-up development project and numerous smaller projects ✓ Oversaw redevelopment efforts to improve operating properties to better position them for long- term growth ✓ Oversaw record level of portfolio leasing ✓ Oversaw efforts that resulted in significantly higher portfolio occupancy at the end of 2021 versus 2020 ✓ Oversaw significantly improved rent collections ending 2021 at nearly 97% 28 Daniel Guglielmone Executive Vice President- Chief Financial Officer and Treasurer Age: 54 Joined: 2016 Responsibilities Mr. Guglielmone has overall responsibility for all Company related financial activity including forecasting, reporting and capital allocation, in addition to investor relations and East Coast acquisitions 2021 Compensation (in 000s) Base Pay: Annual Bonus: Long-Term Equity: Total: $ 500 $ 469 $ 891 $1,860 Other: $1M restricted share award $75,000 cash bonus 2021 Compensation Decisions and Rationale 2021 marked completion of 5 full years of service by Mr. Guglielmone as the Company’s Chief Financial Officer. The Committee anticipated reviewing Mr. Guglielmone’s target compensation in 2021; however, given the continuing COVID-related business uncertainties, the Committee determined that consideration of market pay adjustments would be delayed until at least 2022. In August 2021, the Committee did award to Mr. Guglielmone a restricted share award having a value of $1 million that will vest equally over five years subject to his continued service at the Company. The Committee has not previously made off-cycle awards to its executive officers; however, after reviewing market compensation information for other chief financial officers provided by SBCG which showed that Mr. Guglielmone’s compensation at the target level and even at a maximum performance level was significantly below market compensation for chief financial officers at other retail REITs and other similarly sized REITs, the Committee believed it was important to start the process of bringing Mr. Guglielmone’s compensation closer to market levels. Few changes had been made to Mr. Guglielmone’s compensation package since he joined the Company in 2016 resulting in his target compensation growing less than 1% per year on average and his maximum compensation potential growing at approximately 2% per year on average as compared to inflation over that same 5-year period growing at approximately 2.5% per year and other similarly situated chief financial officers having annual compensation grow at more than 3% on average. Given the gap between Mr. Guglielmone’s compensation and market compensation levels, the Committee used this award as a first step to bridging the gap and the value of this award will be taken into account as part of the changes expected to be made to Mr. Guglielmone’s compensation package in 2022. Based on the Committee’s evaluation of Mr. Guglielmone’s performance in 2021, the Committee awarded Mr. Guglielmone his full bonus and full long-term equity award and, as part of a special bonus allocation that the Company awarded to every employee in the Company other than Mr. Wood, the Committee awarded Mr. Guglielmone a one-time cash bonus of $75,000 in recognition of the extraordinary efforts to manage the Company through the worst of the financial impacts from COVID. 2021 Key Achievements ✓ Co-Led the Company’s investment efforts that resulted in acquisition of 5 new properties with a total value of $440 million ✓ Led efforts to proactively manage our balance sheet resulting in improved year over year credit metrics and attractive overall cost of capital ✓ Oversaw execution of strategically selected property sales to raise approximately $140 million of attractively priced capital ✓ Led opportunistic equity raises through use of forward contracts under our at-the-market equity program ✓ Led investor outreach and communications ✓ Led financial efforts enabling the Company to increase our annual dividend rate to common shareholders for the 54th consecutive year, a record in the REIT industry 29 Dawn M. Becker Executive Vice President- General Counsel and Secretary Age: 58 Joined: 1997 Responsibilities Ms. Becker has overall responsibility for all legal functions within the Company and heads all of our ESG efforts in addition to overseeing our Human Resources, Information Technology and other administrative functions 2021 Compensation (in 000s) Base Pay: Annual Bonus: Long-Term Equity: Total: $ 475 $ 445 $ 594 $1,514 Other: $75,000 cash bonus 2021 Compensation Decisions and Rationale No changes were made to Ms. Becker’s target compensation for 2021 given the continuing COVID-related business uncertainties. As part of the Committee’s final 2021 compensation decisions, the Committee awarded Ms. Becker her full bonus and full long-term equity award and, as part of a special bonus allocation that the Company awarded to every employee in the Company other than Mr. Wood, the Committee awarded Ms. Becker a one-time cash bonus of $75,000 in recognition of the extraordinary efforts to manage the Company through the worst of the financial impacts from COVID. 2021 Key Achievements ✓ Led the Company’s environmental, social and governance efforts that included establishing energy and greenhouse gas reduction targets ✓ Led the Company’s corporate sustainability reporting in line with the Global Reporting Initiative (GRI), Task Force on Climate-Related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board (SASB) frameworks ✓ Led the restructuring of the Company that resulted in us converting to an umbrella limited partnership structure to further enhance future acquisition opportunities ✓ Oversaw our diversity, equity and inclusion initiatives that led to 64% of all new hires in 2021 being female and 47% being ethnic or racial minorities ✓ Oversaw continued technology system improvements to drive Company-wide efficiency improvements and enhance overall cyber security COMPENSATION POLICIES AND PRACTICES Compensation Risk Assessment Based on its review completed in February 2022, the Committee does not believe that our compensation programs encourage unnecessary or excessive risk taking that is reasonably likely to have a material adverse effect on the Company. Incentive compensation for 94% of our employees is provided under our annual bonus plan and/or long-term equity program. The performance metrics under those programs have been established by the Committee and reflect important short-term and longer-term corporate objectives and the Board has in place sufficient controls to ensure that decisions which could have a material adverse impact on the Company cannot be made without Board approval. Our remaining employees earn some or all of their compensation determined by completing leasing transactions or closing acquisitions. Because these employees cannot complete any of those leasing or acquisition deals without first obtaining approvals from either the Board and/or one or more members of senior management whose incentive compensation is tied to corporate performance, this transactionally based compensation does not expose the Company to unnecessary or excessive risk taking. We also have in place the clawback policy described below that allows us to recoup compensation paid to our NEOs on the basis of inaccurate financial statements where that NEO engaged in fraud or grossly negligent misconduct. 30 Equity Ownership Requirements The Committee believes that ownership in the Company aligns our executives with our shareholders and keeps their focus on achieving the long-term objectives of the Company. To facilitate that objective, we have adopted equity ownership guidelines that require all of our executive vice presidents and above to maintain a specified minimum level of common share ownership in the Company. Each individual has five years to achieve the required level of ownership after becoming subject to the ownership requirement. The minimum ownership requirements currently in place are 7 times base salary for our CEO, 2.5 times base salary plus annual bonus for each of our other NEOs and 2.0 times base salary plus annual bonus for our other executive vice presidents. Each of our NEOS and all of our other executive vice presidents were in compliance with our equity ownership requirements as of December 31, 2021. Anti-Hedging/Pledging Policy All officers and non-employee Trustees are prohibited from engaging in short sales of our securities, establishing margin accounts, pledging our securities as collateral for a loan, buying or selling puts or calls on our securities or otherwise engaging in hedging transactions (such as zero-cost dollars, exchange funds, and forward sale contracts) involving our securities. Termination and Change-in-Control Arrangements We do not have employment agreements in place with a any of our NEOs or any other employee which provides the Committee with maximum flexibility to modify compensation as warranted based on market conditions and Company considerations. We do, however, have in place with each of our NEOs a severance agreement that provides for certain payments and benefits to be provided to the NEO if he/she is terminated from employment under the conditions set forth in those agreements. The circumstances in which payments may be made and the potential amounts of those payments are described in more detail in the “Potential Payments on Termination of the payments provided for in these Employment and Change-in-Control” section below. We believe that agreements are reasonable and appropriate as part of the total compensation packages available for our NEOs. Other Benefits We provide other health and welfare benefits to our NEOs on the same basis as we provide those benefits to all employees. These benefits are competitive with those offered by companies with whom we compete for talent and provide another tool that allows us to attract and retain talented executives. In addition to those benefits, we provide to Mr. Wood, his spouse and one of his dependents continuation of health coverage after Mr. Wood’s termination upon death, disability, retirement, change in control or otherwise (other than a termination with cause or resignation). This coverage will continue as to Mr. Wood and his spouse until their death, or with respect to his spouse until divorce, if earlier, and coverage continues for one of Mr. Wood’s dependents until death. We are required to provide coverage of at least the same level as provided to Mr. Wood and his family at the time of his termination and such coverage will be secondary to certain other coverages that may be available to Mr. Wood and his family. This agreement has been in place since 2005. Timing of Equity Grants Equity awards to our employees under our annual bonus plan and long-term incentive plan described above are made at the Compensation Committee’s meeting that occurs in February of each calendar year. Based on our meeting schedule the past several years, these awards are made before we release financial results for the prior fiscal year. We have no policy that times the granting of equity awards relative to the release of material non-public information. Equity awards to new hires are generally made on the first day on which the employee 31 starts work and equity awards to employees who are promoted generally are made on the day on which the promotion has been fully approved. All of our options are awarded at the closing price of our shares on the NYSE on the date the award is made. The Compensation Committee has never re-priced options, granted options with an exercise price that is less than the closing price on the NYSE on the date of the grant, or granted options which are priced on a date other than the grant date. Equity awards for Vice Presidents and above for the 3-year performance period ending on December 31, 2021 were made at the Compensation Committee’s meeting on February 9, 2022 based on the closing price of our shares on the NYSE on that date. Tax Deductibility of Executive Compensation Section 162(m) of the Internal Revenue Code generally limits deductibility of compensation paid to our NEOs to $1 million. An exception was previously made for qualified performance-based compensation, among other things. The Tax Cuts and Jobs Act of 2017 modified Section 162(m) to, among other things, modify who is subject to the $1 million deduction limit and to eliminate the exception for performance based pay from the $1 million deduction limit starting with tax years ending after December 31, 2017. The Compensation Committee considered the impact of Section 162(m) in structuring compensation programs; however, the primary focus has always been on creating programs that addressed the needs and objectives of the Company regardless of the impact of Section 162(m). As a result, the Compensation Committee made awards and structured programs that were non-deductible under Section 162(m). Because our awards and the changes to compensation programs were not necessarily designed to comply with Section 162(m), Section 162(m) have not had a material impact on us. Clawback Policy Our Board has adopted a policy that allows us to recover from our NEOs performance based compensation paid to that NEO, including compensation paid under our annual bonus plan and our long-term equity program, in the event that: Š the Company issues a restatement of financial results to correct material non-compliance with reporting requirements; the NEO engaged in fraud or grossly negligent misconduct that contributed to the need for the financial restatement; and some or all of the performance based compensation received prior to the restatement would not have been paid based on the restated financial result Š Š COMPENSATION COMMITTEE REPORT The Compensation Committee of the Board has reviewed and discussed the CD&A required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, the Compensation Committee recommended to the Board that the CD&A be included in this Proxy Statement. Submitted by: Elizabeth I. Holland, Chairperson Nicole Y. Lamb-Hale Mark S. Ordan Gail P. Steinel 32 Executive Compensation Summary Compensation Table The table below summarizes the total compensation earned by or paid to the individuals who were NEOs for the fiscal years ended December 31, 2021, 2020 and 2019. All amounts are calculated in accordance with current SEC rules. Name and Principal Position Year Salary(1) Bonus(2) Stock Awards(3) Plan Compensation(4) Compensation(5) Total Non-Equity Incentive All Other Donald C. Wood, Chief Executive Officer (PEO) 2021 $ 950,000 $ 2020 $ 950,000 $ 2019 $ 950,000 $ - $ - $ - $ 5,213,719 $ 1,335,938 $ 21,260 $ 7,520,917 5,830,493 $ 534,375 $ 166,928 $ 7,481,796 5,534,437 $ 1,128,125 $ 18,296 $ 7,630,858 Jeffrey S. Berkes, President and Chief Operating Officer 2021 $ 575,000 $ 75,000 $ 3,131,027 $ 539,063 $ 14,486 $ 4,334,576 Daniel Guglielmone, Executive Vice President-Chief Financial Officer and Treasurer (PFO) Dawn M. Becker, Executive Vice President-General Counsel and Secretary 2021 $ 500,000 $ 75,000 $ 1,900,046 $ 468,750 $ 11,427 $ 2,955,223 2020 $ 500,000 $ 2019 $ 500,000 $ - $ - $ 968,270 $ 900,012 $ 281,250 $ 236,818 $ 1,986,338 395,833 $ 9,728 $ 1,805,573 2021 $ 475,000 $ 75,000 $ 680,159 $ 333,984 $ 13,638 $ 1,577,781 2020 $ 475,000 $ 2019 $ 475,000 $ - $ - $ 758,275 $ 726,587 $ 200,391 $ 86,359 $ 1,520,025 282,031 $ 13,265 $ 1,496,883 (1) Amounts shown in the Salary column include all amounts deferred at the election of the NEOs into our non-qualified deferred compensation plan. (2) Amounts represent a one-time cash bonus described for each of these NEOs in more detail in the Compensation Discussion and Analysis. (3) Amounts shown in this column reflect the aggregate grant date fair value of the awards calculated in accordance with FASB ASC Topic 718 that were issued in the year shown. With the exception of the performance based restricted share units issued to Mr. Berkes in 2021, all other awards in this column were valued based on the closing price of our shares on the grant date. The performance-based restricted share units issued to Mr. Berkes in February 2021 are tied to our total shareholder return versus the total shareholder return for the Bloomberg REIT Shopping Center Index over the performance period. These restricted share units were valued based on our data and that of the index using a Monte Carlo simulation method. The key assumptions used in the valuation were: (a) stock price volatility of 38.0% for the Company and 38.8% for the index; (b) risk-free interest rate of 0.31%; and (c) no dividend yield assumption given that the award includes dividend equivalent rights that are earned only if the underlying shares are earned. Based on the performance goals and these assumptions, the award was valued at $97.01 per share. (4) Amounts shown in this column represent the cash amount paid under our annual bonus plan and include amounts deferred by our NEOs into our non-qualified deferred compensation plan. (5) The amounts shown in this column for the most recent fiscal year include: (a) contributions to our 401(k) plan of $7,250 for each of our NEOs; (b) a 5-year cash service award of $300 for Mr. Guglielmone; and (c) payments for group term life insurance, long-term disability insurance and supplemental life insurance of $14,010 for Mr. Wood, $7,236 for Mr. Berkes, $3,877 for Mr. Guglielmone and $6,388 for Ms. Becker. 33 Grants of Plan Based Awards Table The following equity awards were made in 2021 to our NEOs. Name Donald C. Wood Jeffrey S. Berkes Daniel Guglielmone Dawn M. Becker Estimated Future Payouts Under Equity Incentive Plan Awards Threshold (#) Target (#) Maximum (#) All Other Stock Awards: Number of Shares of Stock or Units Grant Date Fair Value Grant Date 2/10/2021 (1)(6)(7) 2/10/2021 (2)(6)(7) 2/10/2021 (1)(6)(7) 2/10/2021 (2)(6)(7) 2/10/2021 (3)(6)(7) 2/10/2021 (4)(7)(8) 5,220 10,441 20,882 2/10/2021 (2)(6)(7) 8/3/2021 (5)(6)(7) 2/10/2021 (1)(6)(7) 2/10/2021 (2)(6)(7) 2,232 52,208 1,233 10,442 10,442 9,398 8,569 837 6,265 $ 213,759 $ 4,999,960 $ 118,084 $ 1,000,030 $ 1,000,030 $ 1,012,881 $ 900,046 $ 1,000,000 $ $ 80,159 599,999 (1) (2) (3) Issued under our annual bonus plan for the 1-year performance period ending December 31, 2020. These shares vest equally over 3 years. Issued under our long-term incentive program for the 3-year performance period ending December 31, 2020. These shares vest equally over 3 years. Issued in connection with Mr. Berkes’ promotion to President and Chief Operating Officer. The shares vest equally over 5 years. (4) The amounts shown represent the range of shares that may be earned under this award for the time period from 2021 through 2024 for performance based on the relative total shareholder return of the Company compared to the relative total shareholder return of the BBRESHOP. The number of units shown were calculated based the grant date closing price of our shares of $95.77. The actual number of units earned will be determined at the end of the performance period subject to linear interpolation if performance falls between the specified levels of performance. Any earned award, together with dividend equivalents on the earned awards, will vest after December 31, 2024 with any earned award being paid in shares and any earned dividend equivalents on the earned awards being paid in cash. (5) These shares will vest equally over 5 years. (6) Dividends are paid on these shares issued at the same rate and time as paid to all other holders of our shares as declared by our Board from time to time. (7) Represents the grant date fair value of share awards as computed in accordance with FASB ASC Topic 718. (8) These restricted stock units were valued based on our data and that of the index using a Monte Carlo simulation method. The key assumptions used in the valuation were: (a) stock price volatility of 38.0% for the Company and 38.8% for the index; (b) risk-free interest rate of 0.31%; and (c) no dividend yield assumption given that the award includes dividend equivalent rights that are earned only if the underlying shares are earned. Based on the performance goals and these assumptions, the award was valued at $97.01 The fair value reflected is based on a target level payout. 34 Outstanding Equity Awards at Fiscal Year-End Table The following table sets forth information about outstanding equity awards held by our NEOs as of December 31, 2021: Name Donald C. Wood Jeffrey S. Berkes Daniel Guglielmone Dawn M. Becker Stock Awards Number of Shares or Units of Stock That Have Not Vested Market Value of Shares or Units of Stock That Have Not Vested(9) Equity incentive plan awards: number of unearned shares, units or other rights that have not vested Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested(9) 2,232 (1) $ 52,208 (1) $ 2,364 (2) $ 28,177 (2) $ 1,327 (3) $ 12,417 (3) $ 1,233 (1) $ 10,442 (1) $ 871 (2) $ 5,635 (2) $ 332 (3) $ 1,987 (3) $ 11,175 (4) $ 10,442 (5) $ 9,398 (1) $ 5,072 (2) $ 2,235 (3) $ 1,790 (7) $ 8,569 (8) $ 837 (1) $ 6,265 (1) $ 591 (2) $ 3,381 (2) $ 314 (3) $ 1,490 (3) $ 304,266 7,116,995 322,260 3,841,089 180,897 1,692,685 168,083 1,423,453 118,735 768,163 45,258 270,868 1,523,376 1,423,453 1,281,135 691,415 304,675 244,013 1,168,126 114,100 854,045 80,565 460,898 42,804 203,117 5,221 (6) $ 711,727 (1) One-third of these shares vested on February 12, 2022 and the remaining shares will vest equally on February 12 of each of 2023 and 2024. (2) One-half of these shares vested on February 12, 2022 and the remaining shares will vest on February 12, 2023. (3) These shares vested on February 12, 2022. (4) One-third of these shares vested on February 12, 2022. The remaining shares will vest equally on February 12 of each of 2023 and 2024. (5) One-fifth of these shares vested on February 12, 2022. The remaining shares will vest equally on February 12 of each of 2023 through 2026. (6) The number of shares represent the threshold payout level. The final number of shares earned cannot be determined until after December 31, 2024, the end of the performance period. (7) These shares will vest equally on August 15 of each of 2022 and 2023. (8) These shares will vest equally on August 3 of each of 2022 through 2026. (9) The value of shares is calculated based on $136.32, the closing price of our shares on the NYSE on December 31, 2021. 35 Options Exercised and Stock Vested in 2021 The following table includes information with respect to shares held by our NEOs that vested in 2021. Name Donald C. Wood Jeffrey S. Berkes Daniel Guglielmone Dawn M. Becker Stock Awards Number of Shares Value Realized Acquired on Vesting on Vesting(1) 44,465 11,670 8,024 5,475 $4,550,103.45 1,194,191 $ 836,911 $ 560,257 $ (1) The amounts in this column have been calculated using the closing price of a share on the date the shares vested. Non-Qualified Deferred Compensation We maintain a non-qualified deferred compensation plan that is open to participation by 44 members of our management team, including our NEOs. Each participant can elect to defer up to 100% of his or her base salary and cash payment under our annual bonus plan with deferral elections made in December of each year for amounts to be earned in the following year. A number of widely available investment options are made available to each plan participant who then decides how to allocate amounts deferred among those investment options. The amount earned by plan participants on their deferrals is calculated by our third party plan administrator as if the amounts deferred had actually been invested in the investment options selected by each participant. We do not make any contributions to the deferred compensation plan for any individual nor do we guaranty any rate of return on amounts deferred. Amounts deferred into the plan, including amounts earned on the deferrals, are generally payable to the participant shortly after he or she retires or is otherwise no longer employed by us; however, there are a few other alternatives where amounts may be paid to a participant sooner. All of our NEOs other than Mr. Guglielmone participate in our deferred compensation plan. 2021 activity for the participants in our plan is described below. Name Donald C. Wood Jeffrey S. Berkes Dawn M. Becker Executive Contributions in Last Fiscal Year(1) Registrant Contributions in Last Fiscal Year Aggregate Earnings in Last Fiscal Year Aggregate Withdrawals/ Distributions Aggregate Balance at Last Fiscal Year-End $ $ $ 250,000 $ 147,656 $ 47,500 $ - $ - $ - $ 1,446,933 $ 17,537 $ 233,206 $ - $ - $ - $ 10,826,150 165,193 2,459,569 (1) All amounts in this column are included in either the “Salary” or “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for 2021. Potential Payments on Termination of Employment and Change-in-Control We have entered into severance agreements with each of our NEOs that require us to make certain payments and provide certain benefits to them in the event of a termination of employment or change in control of the Company. Regardless of the reason for an NEO’s termination of employment, he or she will be entitled to receive upon termination a distribution of any amounts in our non-qualified deferred compensation plan as described in the “Non-Qualified Deferred Compensation” section above. No NEO is entitled to receive a new award under the annual bonus plan or our long-term incentive plan for the year in which the termination occurs. The agreements with each of our NEOs contain provisions restricting the executive from engaging in competing behavior and soliciting and/or hiring our employees for a period of time after termination. The payments that will be made to an NEO on termination vary depending on the reason for termination and may be conditioned on the signing of a release in favor of the Company. 36 The amount of compensation payable to each of our NEOs under various termination scenarios is reflected below assuming that the separation of service was effective on December 31, 2021. Salary and Cash Bonus (Multiple) Cash Medical Payment(1) Benefits(2) Acclerated Equity(3) Other Excise Tax Benefits(4) Gross-Up Total Termination without Cause or For Good Reason Donald C. Wood Jeffrey S. Berkes Daniel Guglielmone Dawn M. Becker Change in Control(5) Donald C. Wood Jeffrey S. Berkes Daniel Guglielmone Dawn M. Becker Termination for Cause Donald C. Wood Jeffrey S. Berkes Daniel Guglielmone Dawn M. Becker Death Donald C. Wood Jeffrey S. Berkes Daniel Guglielmone Dawn M. Becker Disability Donald C. Wood Jeffrey S. Berkes Daniel Guglielmone Dawn M. Becker 1.5x $ 4,096,875 $ 2,385,861 $ 13,458,192 $ 60,250 1.0x $ 1,129,167 $ N/A $ $ 1.0x $ 896,875 $ 23,957 $ 6,192,983 $ $ 3,689,364 $ 11,386 $ 1,755,529 $ 60,250 - - - - N/A $ 20,001,178 N/A $ 7,346,107 N/A $ 3,689,364 N/A $ 2,724,040 3.0x $ 8,193,750 $ 2,457,446 $ 13,458,192 $ 167,165 $ $ 2.0x $ 2,258,333 $ 47,914 $ 6,192,983 $ 71,146 $ 3,689,364 $ 90,375 $ 2.0x $ 1,890,625 $ 30,361 $ 1,755,529 $ 90,375 $ 2.0x $ 1,793,750 $ - - - - - $ 24,276,553 $ 8,499,230 $ 5,741,510 $ 3,670,015 N/A $ 475,000 $ $ N/A $ N/A $ $ N/A $ 237,500 $ - - 15,908 $ $ - $ - 7,590 $ - - - - $ $ $ $ - N/A $ N/A $ 718,750 $ $ N/A $ $ N/A $ $ 2,028,000 $ 13,458,192 $ $ 6,192,983 $ $ 3,689,364 $ $ 1,755,529 $ - - - - - N/A $ 1,286,525 $ 2,371,815 $ 13,458,192 $ 23,957 $ 6,192,983 $ N/A $ 718,750 $ 35,573 $ 3,689,364 $ N/A $ 430,080 $ 15,181 $ 1,755,529 $ N/A $ 361,777 $ - - - - - - - - - - - - N/A $ N/A $ N/A $ N/A $ 490,908 - - 245,090 N/A $ 15,486,192 N/A $ 6,911,733 N/A $ 3,689,364 N/A $ 1,755,529 N/A $ 17,116,532 N/A $ 6,935,690 N/A $ 4,155,017 N/A $ 2,132,487 (1) Bonus years used in the calculation for termination without cause and change-in-control are 2020, 2019 and 2018, the last three completed fiscal years. The cash payments on termination with cause are 6 months of base pay only. The cash payment on death and disability for Mr. Berkes is a pro-rated bonus for the year in which the event occurs. The cash payments on disability for Mr. Wood, Mr. Guglielmone and Ms. Becker represent 1 year of base salary less amounts received from disability insurance maintained by the Company, grossed up for taxes on non-tax exempt payments. (2) Amounts in this column represent our estimate of the COBRA equivalent rates for health care benefits and current life and long-term disability premiums for Mr. Wood, Mr. Guglielmone and Ms. Becker. The period of time for which these benefits are provided varies as follows: (a) termination without cause – 9 months for Mr. Wood and Ms. Becker; 1 year for Mr. Berkes; (b) change-in-control – 3 years for Mr. Wood and 2 years for each other NEO; (c) termination for cause – 6 months; and (d) disability – 1 year. The amounts paid to Mr. Berkes are reduced by the amounts he pays for these benefits at the time of the event. All amounts shown in this column for Mr. Wood also include the estimated costs (calculated in accordance with GAAP) of satisfying the obligations under his Health Continuation Coverage Agreement. (3) All unvested shares held by our NEOs will vest in the event of termination without cause, change-in-control, death or disability. Values were calculated by multiplying the number of unvested shares that vest under each termination event using the closing price of the Company’s shares on December 31, 2021. For Mr. Berkes, the amount includes the value of 37 the number of shares that would have been earned based on performance through the date of termination, prorated for the portion of the performance period that had lapsed, plus dividend equivalent rights on those shares. (4) Amounts in this column are estimated costs for an administrative assistant and outplacement assistance for a period of 6 months in the event of a termination without cause and for a period of 12 months for Mr. Wood and 9 months for Mr. Guglielmone and Ms. Becker in the event of a change-in-control. The amount also includes the cost of providing a company vehicle to Mr. Wood for three years in the event of a change-in-control should he choose to use that benefit. (5) Change-in-control is deemed to have occurred when a person acquires a 20% interest in us, or our current Trustees, or those subsequently approved by our current Trustees, constitute less than 50% of our Board. Upon a change-in-control, each NEO is entitled to receive payments and benefits in the following circumstance: (a) the NEO is terminated from employment by the Company (other than for cause) or leaves for good reason within 2 years after the change-in-control; (b) Mr. Wood or Ms. Becker voluntarily leaves employment within the 30-day window following the 1-year anniversary of the change-in-control; or (c) Mr. Berkes is terminated from employment by the Company (other than for cause) or he leaves the Company as a result of a constructive termination within the 6-month period prior to or within 2 years after the change-in-control. CEO Pay Ratio Our compensation and benefit programs are substantially similar throughout the Company and are designed to reward all employees who contribute to our success with a total compensation package that is competitive in the marketplace for each employee’s position and performance. We are required to calculate and disclose the compensation of our median paid employee as well as the ratio of the total annual compensation paid to our CEO to the annual compensation of our median paid employee. The determination of our median paid employee was used taking our total employee population as of December 31, 2021, excluding our CEO, which included 309 full- time and part-time employees ranging from executive vice presidents to maintenance technicians. For the determination, we used annual base pay plus annual bonus at target levels plus overtime actually paid, the combination of which we believe most closely approximates the total annual direct compensation of our employees. For purposes of the calculation, base pay was annualized for the 45 employees who started with us in 2021. No other adjustments were made. The actual total annual compensation of our Chief Executive Officer and median paid employee for 2021 was calculated in accordance with the requirements of the Summary Compensation Table included in this proxy statement. Based on this methodology, we have determined that the total annual compensation paid to our Chief Executive Officer in 2021 was $7,520,917 and the total annual compensation paid to our median paid employee in 2021 was $125,770 resulting in a ratio of 60:1. We calculated our pay ratio in accordance with SEC rules; however, those rules allow companies discretion in methodologies used to identify the median paid employee and the compensation used to determine the median paid employee. As a result, this ratio is unique to our Company. Other companies may make their determinations differently so that the ratio may not be comparable across companies. We believe our ratio is a reasonable estimate. Our ratio is very heavily influenced by what employees/services we choose to provide through employees as opposed to through third parties who are not taken into account in the calculation of the pay ratio. 38 Equity Compensation Plan Information The following table sets forth certain information on our only active equity compensation plan as of December 31, 2021. Number of securities to be issued upon exercise of Weighted average exercise Number of securities remaining available for future issuance outstanding options, warrants price of outstanding options, (excluding securities reflected in Plan Category and rights (Column A) warrants and rights Column A) Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total 3,658 - 3,658 $95.77 - $95.77 1,571,295 - 1,571,295 Proposal 3: Ratification of Independent Registered Public Accounting Firm registered public accounting firm for Shareholders are being asked to ratify in a non-binding vote the selection of Grant Thornton, LLP (“GT”) as our independent the fiscal year ending December 31, 2022. Although shareholder ratification of GT is not required by our governance documents, the Board is submitting the selection of GT to shareholders to solicit shareholder views on our selection of GT as our independent registered public accounting firm. GT has served in this role since 2002 and the Board believes it is in the best interests of the Company and our shareholders for GT to continue in this role. If the selection of GT is not ratified, the Audit Committee may (but will not be required to) reconsider whether to retain GT. Even if the selection of GT is ratified, the Audit Committee may change the appointment of GT at any time if it determines such a change would be in the best interests of the Company and our shareholders. A representative of GT will be present at the Annual Meeting and will have the opportunity to make a statement if they so desire and answer appropriate questions from shareholders. The Audit Committee reviews and approves in advance all audit and permissible non-audit services provided by GT to the Company as required by and in accordance with the rules and regulations of the SEC and the Sarbanes-Oxley Act of 2002. The following table sets forth the fees for services rendered by GT for the years ended December 31, 2021 and 2020: Audit Fees(1) Audit-Related Fees(2) Tax Fees(3) All Other Fees Total Fees 2021 974,141 $ 64,050 $ 248,005 $ 2020 821,862 48,825 300,120 - $ - $ $ $ $ $ 1,286,196 $ 1,170,807 (1) Audit fees include all fees and expenses for services in connection with: (a) the audit of our financial statements included in our annual reports on Form 10-K; (b) Sarbanes-Oxley Section 404 relating to our annual audit; (c) the review of the financial statements included in our quarterly reports on Form 10-Q; and (d) consents and comfort letters issued in connection with debt offerings and common share offerings. 39 (2) Audit-related fees primarily include the audit of our employee benefit plan, which are paid by the plan and not the Company, and certain property level audits. (3) All of the amount shown for 2021 and $264,600 of the amount shown for 2020 relate solely to tax compliance and preparation, including the preparation of original and amended tax returns and refund claims and tax payment planning. The affirmative vote of a majority of votes cast at the Annual Meeting, in person or by proxy, is required to approve this proposal. An “abstention” or “broker non-vote” will have no effect on the outcome of the vote for this proposal. Our Board recommends a vote FOR the ratification of the appointment of GT as our independent registered public accounting firm for fiscal year 2022 Audit Committee Report The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein. The Audit Committee is made up entirely of trustees who meet all independence requirements under the SEC and NYSE and have the requisite financial competence to serve on the Audit Committee. The Audit Committee meets at least quarterly and operates pursuant to a written charter that is reviewed at least every three years. That charter can be accessed under the Investors/Corporate Governance section of our website at www.federalrealty.com. In 2021, the Audit Committee met five times and each of the four quarterly meetings included an executive session with our independent registered public accounting firm and no members of management present. firm, in performance of The Audit Committee is directly responsible for the appointment, retention and oversight of GT, the independent registered public accounting firm retained to audit our financial statements, and also oversees management, including the internal audit is responsible for the financial reporting process, including the system of internal controls, for the preparation of consolidated financial statements in accordance with generally accepted accounting principles in the United States and for reporting on internal control over financial reporting. Management uses Pricewaterhouse Coopers, LLC (“PwC”) to provide its internal audit function, including oversight of the ongoing testing of the effectiveness of our internal controls. The Audit Committee met regularly with PwC and one meeting included an executive session with PwC with no members of GT or management present. GT is responsible for auditing the consolidated financial statements of the Company and expressing an opinion on the financial statements and the effectiveness of internal control over financial reporting. functions. Specifically, management financial their During 2021, as part of its oversight function, the Audit Committee: • Met with management and GT and discussed the Company’s December 31, 2021 audited financial statements; • • • • Discussed with GT the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC; Reviewed and discussed with management and GT, individually and collectively, all annual and quarterly financial statements and operating results prior to their issuance; Received the written disclosures and the letter from GT required by applicable requirements of the PCAOB regarding GT’s communications with the audit committee concerning independence, and has discussed with GT regarding its independence; Discussed with GT matters required to be discussed pursuant to applicable audit standards, including the reasonableness of judgments and the clarity and completeness of financial disclosures; • Monitored the non-audit services provided by GT to ensure that performance of such services did not adversely impact GT’s independence; and 40 • the Committee’s quarterly review of As part of the Committee discussed with management cybersecurity threats, cybersecurity training and ongoing areas of focus of management in protecting against cyber breaches. During those quarterly reviews in 2021, the Committee was advised that there were no breaches and that cybersecurity insurance had been procured. internal controls, Based on the Audit Committee’s reviews and discussions with GT, PwC and management, the Audit Committee recommended to the Board of Trustees that the Board approve the inclusion of our audited financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for filing with the SEC. Submitted by the Audit Committee: Gail P. Steinel, Chairperson David W. Faeder Elizabeth I. Holland (joined August 3, 2021) Anthony P. Nader, III Beneficial Ownership Ownership of Principal Shareholders Based on our records and the information reported in filings with the SEC, the following were beneficial owners of more than 5% of our common shares of beneficial interest as of March 14, 2022: Name and Address of Beneficial Owner The Vanguard Group, Inc.(2) 100 Vanguard Blvd. Malvern, PA 19355 BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 State Street Corporation(4) State Street Financial Center, One Lincoln Street Boston, MA 02111 Norges Bank (The Central Bank of Norway)(5) Bankplassen 2, PO Box 1179 Sentrum NO 0107 Oslo Norway JPMorgan Chase & Co.(6) 383 Madison Avenue New York, NY 10179 Capital Research Global Investors(7) 333 South Hope Street, 55th Floor Los Angeles, CA 90071 Amount and Nature of Beneficial Ownership Outstanding Shares(1) Percentage of Our 11,900,087 15.1% 7,559,988 7,465,999 7,212,626 4,203,063 4,039,858 9.6% 9.5% 9.2% 5.3% 5.1% (1) The percentage of outstanding shares is calculated by taking the number of shares stated in the Schedule 13G or 13G/A, as applicable, filed with the SEC divided by 78,687,588, the total number of shares outstanding on March 14, 2022. 41 (2) (3) (4) (5) (6) (7) Information based on a Schedule 13G/A filed with the SEC on February 10, 2022 by The Vanguard Group which states that The Vanguard Group, an investment advisor, has shared voting power over 174,149 shares, sole dispositive power over 11,533,371 shares and shared dispositive power over 366,716 shares. Information based on a Schedule 13G/A filed with the SEC on February 1, 2022 by BlackRock, Inc., which states that BlackRock, Inc., a parent holding company, has sole voting power over 6,582,275 shares and sole dispositive power over 7,559,988 shares. Information based on a Schedule 13G/A filed with the SEC on February 11, 2022 by State Street Corporation, which states that State Street Corporation, a parent holding company, has shared voting power over 6,679,706 shares and shared dispositive power over 7,465,605 shares. Information based on a Schedule 13G/A filed with the SEC on February 8, 2022 by Norges Bank (The Central Bank of Norway) which states that Norges Bank (The Central Bank of Norway) has sole voting power and sole dispositive power over 7,212,626 shares. Information based on a Schedule 13G filed with the SEC on January 21, 2022 by JPMorgan Chase & Co. which states that JPMorgan Chase & Co., a parent holding company, has sole voting power over 3,219,988 shares, sole dispositive power over 4,201,194 shares and shared dispositive power over 714 shares. Information based on a Schedule 13G/A filed with the SEC on February 11, 2022 by Capital Research Global Investors which states that Capital Research Global Investors, an investment advisor, has sole voting and sole dispositive power over 4,039,858 shares. Ownership of Trustees and Executive Officers The table below reflects beneficial ownership of our Trustees and NEOs as of March 14, 2022 determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended. Unless noted in the footnotes following the table, each Trustee and NEO has sole voting and investment power as to all shares listed. Name and Address of Beneficial Owner(1) Dawn M. Becker Jeffrey S. Berkes David W. Faeder Daniel Guglielmone Elizabeth I. Holland Nicole Y. Lamb-Hale Anthony P. Nader, III Mark S. Ordan Gail P. Steinel Donald C. Wood(3) Percentage of Unvested Total Shares Outstanding Restricted Beneficially Owned Shares Owned(2) Shares Common 136,511 29,479 13,313 22,864 4,964 1,350 1,350 3,102 13,254 12,473 36,372 0 26,204 0 0 0 0 0 391,089 102,749 148,984 65,851 13,313 49,068 4,964 1,350 1,350 3,102 13,254 493,838 * * * * * * * * * * Trustees, trustee nominees and executive officers as a group (10 individuals) 617,276 177,798 795,074 1% * (1) (2) (3) Less than 1% The address for each of the named individuals is 909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852. The percentage of outstanding shares owned is calculated by taking the number of shares reflected in the column titled “Total Shares Beneficially Owned” divided by 78,687,588, the total number of shares outstanding on March 14, 2022. Includes 53,879 shares owned by Stacey Wood Revocable Trust, 183,568 shares owned by Donald C. Wood Revocable Trust, 20,000 shares owned by Great Falls Trust, 46,500 shares owned by Wood Descendants Trust and 60,000 shares owned by IJKR II, LLC. 42 Information about the Annual Meeting Notice of Electronic Availability of Proxy Materials We are furnishing proxy materials including this proxy statement and our 2021 Annual Report to Shareholders, including our Annual Report on Form 10-K for the year ended December 31, 2021 (“Annual Report”), to each shareholder by providing access to such documents on the Internet. On or about March 25, 2022, we mailed to our shareholders a “Notice of Internet Availability of Proxy Materials” (“Notice”) containing instructions on how to access and review this proxy statement and our Annual Report and how to submit your vote on the Internet or by telephone. You cannot vote by marking the Notice and returning it. If you received the Notice, you will not automatically receive a printed copy of our proxy materials or Annual Report unless you follow the instructions for requesting these materials included in the Notice. This section does not apply if you previously requested to receive these materials by mail. Questions regarding the Notice or voting should be directed to our Investor Relations Department at (800) 937-5449 or by email at IR@federalrealty.com. Why You are Receiving These Materials You are receiving these materials because you owned our shares as of March 14, 2022, the record date established by our Board of Trustees for our Annual Meeting. Everyone who owned our shares as of this date, whether directly as a registered shareholder or indirectly through a bank, broker or other nominee, is entitled to vote at the Annual Meeting. We had 78,687,588 shares outstanding on March 14, 2022. Each share outstanding on the record date is entitled to one vote. A majority of the shares entitled to vote at the Annual Meeting must be present in person or by proxy for us to proceed with the Annual Meeting. Accessing Materials Shareholders can access this Proxy Statement, our Annual Report and our other filings with the SEC on the Investors page of our website at www.federalrealty.com. A copy of our Annual Report, including the financial statements and financial statement schedules (“Form 10-K”) is being provided to shareholders along with this Proxy Statement. The Form 10-K includes certain exhibits, which we will provide to you only upon request addressed to Investor Relations at 909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852. The request must be accompanied by payment of a fee to cover our reasonable expenses for copying and mailing the Form 10-K. In the future, if you wish to receive paper copies of our proxy materials, without charge, and are a registered shareholder, you may do so by written request addressed to American Stock Transfer and Trust, LLC. For those of you holding shares indirectly in “street name”, you must write your bank, brokerage firm, broker-dealer or nominee, to obtain paper copies. Any election you make on how to receive your proxy materials will remain in effect for all future annual meetings until you revoke it. How to Vote If you own your shares directly with our transfer agent, American Stock Transfer and Trust, LLC, you are a registered shareholder and can vote either in person at the Annual Meeting or by proxy without attending the Annual Meeting through one of the following methods: By Internet www.voteproxy.com, available 24/7 By Telephone Call 1-800-776-9437, available 24/7 By Mail Mark, sign and date your proxy card 43 If you vote by internet or telephone, you will need the control number on your Notice, proxy card or voting instruction form. Votes must be submitted by the conclusion of the Annual Meeting to be counted for the meeting. You may revoke your proxy at any time before it is voted at the Annual Meeting by notifying the secretary in writing, submitting a proxy dated later than your original proxy, or attending and voting at the Annual Meeting. If you hold your shares indirectly in an account at a bank, brokerage firm, broker-dealer or nominee, you are a beneficial owner of shares held in “street name”. You will receive all proxy materials directly from your bank, brokerage firm, broker-dealer or nominee and you must either direct them as to how to vote your shares or obtain from them a proxy to vote at the Annual Meeting. Please refer to the notice of internet availability of proxy materials or the voter instruction form used by your bank, brokerage firm, broker-dealer or nominee for specific instructions on methods of voting. If you fail to give your bank, brokerage firm, broker-dealer or nominee specific instructions on how to vote your shares with respect to Proposals 1 or 2, your vote will NOT be counted for those matters. It is important for every shareholder’s vote to be counted on these matters so we encourage you to provide your bank, brokerage firm, broker-dealer or nominee with voting instructions. If you fail to give your bank, brokerage firm, broker-dealer or nominee specific instructions on how to vote your shares on Proposal 3, your bank, brokerage firm, broker-dealer or nominee will generally be able to vote on Proposal 3 as he, she or it determines. You are urged to vote either by telephone (1-800-PROXIES or 1-800-776-9437) or on the Internet (www.voteproxy.com) by following the instructions on your Notice. For those of you who have elected email delivery, please follow the instructions for voting provided in the email. If you elect to receive your proxy materials by mail, please make sure to complete, sign, date and return your proxy card promptly to make certain your shares will be voted at the Annual Meeting. If you do not vote your shares, your shares will not be counted and we may not be able to hold the Annual Meeting. We encourage you to vote by proxy using one of the methods described above even if you plan to attend the Annual Meeting so that we will know as soon as possible whether enough votes will be present. How to Participate in the Annual Meeting You will be able to join our Annual Meeting as either a shareholder or a guest. All registered shareholders and shareholders that own in “street name” will be able to ask questions and vote their shares at the meeting by following the instructions below. Guests will be permitted to join the meeting but will not be permitted to ask questions. You can access the Annual Meeting by joining through this link: https://web.lumiagm.com/202329683. If you are a registered shareholder owning shares directly in your name and you would like to be able to ask a question or vote at the Annual Meeting, you should click on “I have a control number”, enter the control number found on your proxy card or Notice you previously received, and enter the password “federal2022” to enter the meeting. The password is case sensitive. If you hold your shares in “street name” through a bank, brokerage firm, broker-dealer or nominee and you would like to be able to ask a question or vote at the Annual Meeting, you must first obtain a legal proxy from your bank, brokerage firm, broker-dealer or nominee and then submit a request for registration to American Stock Transfer & Trust Company, LLC: (1) by email to proxy@astfinancial.com; (2) by facsimile to 718-765-8730; or (3) by mail to American Stock Transfer & Trust Company, LLC, Attn: Proxy Tabulation Department, 6201 15th Avenue, Brooklyn, NY 11219. Requests for registration must be labeled as “Legal Proxy” and must be received by American Stock Transfer & Trust Company, LLC no later than 5:00 p.m. local time on April 29, 2022. You will receive a confirmation of your registration by email from American Stock Transfer and & Trust Company, LLC after they receive your registration materials. The email will also include a control number so that you can ask a question or vote at the Annual Meeting by clicking on “I have a control number”. Shareholders who hold shares in “street name” will not be able to vote your shares or ask questions without first completing this registration process. Once you are in the meeting, you can vote your shares by clicking on the Shareholder Central link on the screen to submit your ballot. You may also continue to vote using the instructions provided in the Proxy Materials until the Annual Meeting concludes. 44 If you do not want to vote your shares during the meeting or ask a question, you can join the meeting as a guest using the same link above. You will not need to have your control number or to complete a registration in order to participate as a guest. We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting webcast. Electronic check in begins at 8:30 a.m. local time on May 4, 2022, the day of the Annual Meeting, so that we may address any technical difficulties before the Annual Meeting webcast begins. If you encounter any difficulties accessing the Annual Meeting webcast during the check-in or meeting time, please go to https://go.lumiglobal.com/faq or call 718-931-8300, ext. 6449. Eliminating Duplicative Proxy Materials We have adopted a procedure approved by the SEC called “householding” under which multiple shareholders who share an address and do not participate in electronic delivery will receive only one copy of the annual proxy materials or Notice unless we receive contrary instructions from one or more of the shareholders. If you would like to opt out of householding and continue to receive multiple copies of the proxy materials or Notice at the same address, or if you have previously opted out of householding and would now like to participate, you can do so by notifying us in writing, by telephone or by email at: Investor Relations, 909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852, (800) 937-5449, IR@federalrealty.com. Solicitation of Proxies We will bear the cost of soliciting proxies from beneficial owners of our shares. Our trustees, officers and employees, acting without special compensation, and other agents may solicit proxies by telephone, internet, or otherwise. Copies of solicitation materials will be furnished to brokerage firms, fiduciaries, and other custodians who hold our shares of record for beneficial owners for forwarding to such beneficial owners. We may also reimburse persons representing beneficial owners of our shares for their reasonable expenses incurred in forwarding such materials. Beneficial owners of our shares who authorize their proxies through the internet should be aware that they may incur costs to access the internet, such as usage charges from telephone companies or internet service providers and these costs must be borne by the shareholder. Shareholder Proposals for the 2023 Annual Meeting This solicitation is made by the Company on behalf of the Board. Proposals of shareholders intended to be presented at the 2023 Annual Meeting of Shareholders, including nominations for persons for election to the Board of Trustees, must be delivered to us at 909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852, Attention: Corporate Secretary and received by us no later than November 25, 2022 to be considered for inclusion in our proxy statement and form of proxy relating to such meeting. All proposals must comply with the requirements set forth in our Bylaws and the federal securities laws, including Rule 14a-8, in order to be included in the Company’s proxy statement and proxy card for the 2023 Annual Meeting of Shareholders. Pursuant to our proxy access Bylaw provision, a shareholder, or a group of up to 20 shareholders, that has continuously owned for three years at least 3% of the Company’s outstanding common shares, may nominate and include in the Company’s annual meeting proxy materials up to the greater of two trustees or 20% of the number of trustees serving on the Board, if the shareholder(s) and the nominee(s) meet the requirements specified in Article II, Section 13 of our Bylaws. Our Bylaws are available by written request made to the General Counsel & Secretary, 909 Rose Avenue, Suite 200, North Bethesda, Maryland 20852. 45 If you want to present a proposal for the 2023 Annual Meeting but do not wish to have it included in the proxy statement and proxy card, you must provide written notice to us no later than November 25, 2022 at the same address as set forth above. For the Trustees, Dawn M. Becker Executive Vice President—General Counsel and Secretary Federal Realty Investment Trust 909 Rose Avenue, Suite 200 North Bethesda, Maryland 20852 YOUR PROXY IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE SUBMIT IT TODAY. 46 Appendix A Reconciliation of Non-GAAP Financial Measures Funds from Operations: Funds from operations (“FFO”) is a supplemental non-GAAP financial measure of real estate companies’ operating performance. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as follows: net income, computed in accordance with U.S. GAAP, plus real estate related depreciation and amortization, and excluding gains and losses on the sale of real estate or changes in control, net of tax, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. We compute FFO in accordance with the NAREIT definition, and we have historically reported our FFO available for common shareholders in addition to our net income and net cash provided by operating activities. We consider FFO available for common shareholders a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of the real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation. It should be noted that FFO does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income), should not be considered an alternative to net income as an indication of our performance, and is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends. We use FFO primarily as one of several means of assessing our operating performance in comparison with other REITs. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs. An increase or decrease in FFO available for common shareholders does not necessarily result in an increase or decrease in aggregate distributions because our Board of Trustees is not required to increase distributions on a quarterly basis. However, we must distribute at least 90% of our annual taxable income to remain qualified as a REIT. Therefore, a significant increase in FFO will generally require an increase in distributions to shareholders although not necessarily on a proportionate basis. The reconciliation of net income to FFO available for common shareholders for the years ended December 31, 2021 and 2020 is as follows: Net income Net income attributable to noncontrolling interests Gain on sale of real estate and change in control of interests, net Impairment charge, net Depreciation and amortization of real estate assets Amortization of initial direct costs of leases Funds from operations Dividends on preferred shares Income attributable to operating partnership units Income attributable to unvested shares 2021 2020 (in thousands, except per share data) $ 269,081 $ $ (7,583) $ $ (89,892) $ $ - $ $ 243,711 $ 26,051 $ $ $ 441,368 $ (8,042) $ $ 2,998 $ $ (1,581) $ $ 135,888 (4,182) (91,922) 50,728 228,850 20,415 339,777 (8,042) 3,151 (1,037) Funds from operations available for common shareholders(1) $ 434,743 $ 333,849 Weighted average number of common shares, diluted(1)(2) 78,072 76,261 Funds from operations available for common shareholders, per diluted share(1) $ 5.57 $ 4.38 (1) For the year ended December 31, 2020, FFO available for common shareholders includes a $11.2 million charge related to early extinguishment of debt. If this charge was excluded, our FFO available for common shareholders for 2020 would have been $345.0 million, and FFO available for common shareholders, per diluted share would have been $4.52. The weighted average common shares used to compute FFO per diluted common share includes operating partnership units that were excluded from the computation of diluted EPS. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted common share but is anti-dilutive for the computation of diluted EPS for the periods presented. (2) A-1 Corporate Information C O R P O R A T E O F F I C E A N N U A L M E E T I N G 909 Rose Avenue, Suite 200 North Bethesda, MD 20852 301.998.8100 Federal Realty Investment Trust will hold its Annual Shareholder Meeting virtually at 9:00 a.m. on May 4, 2022. C O R P O R A T E C O U N S E L C O R P O R A T E G O V E R N A N C E Pillsbury Winthrop Shaw Pittman LLP Washington, DC I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M Grant Thornton LLP New York, NY T R A N S F E R A G E N T A N D R E G I S T R A R American Stock Transfer & Trust Company 6201 15th Avenue Brooklyn, NY 11219 718.921.8124 800.937.5449 www.astfinancial.com C O M M O N S T O C K L I S T I N G New York Stock Exchange Symbol: FRT M E M B E R S H I P S International Council of Shopping Centers National Association of Real Estate Investment Trusts Urban Land Institute The Trust’s Corporate Governance Guidelines and the charters for the Audit Committee, the Compensation and Human Capital Management Committee and the Nominating and Corporate Governance Committee are available in the Investors section of our website at www.federalrealty.com. A U T O M A T I C C A S H I N V E S T M E N T A N D D I R E C T D E P O S I T Federal Realty offers automatic cash investment, the option to automatically withdraw funds from a checking/savings or other bank account to purchase additional shares of FRT on the 1st and 15th of each month. Federal Realty also offers shareholders the option to directly deposit their dividends. To sign up for automatic cash investment or direct deposit, please call 800.937.5449 or visit www.astfinancial.com. I N T E R N E T | W W W . F E D E R A L R E A L T Y . C O M Visitors to the site can search for and download Securities and Exchange Commission filings, review Federal Realty’s Dividend Reinvestment Plan, obtain current stock quotes, read recent press releases, and see a listing of our properties and the properties’ respective websites. Printed materials and email news alerts can also be requested. I N V E S T O R R E L A T I O N S C O N T A C T You may communicate directly with Federal Realty’s Investor Relations department via telephone at 800.658.8980 or by email at IR@federalrealty.com. F E D E R A L R E A L T Y | A N N U A L R E P O R T 2021 Corporate Headquarters 909 Rose Avenue Suite 200 North Bethesda, MD 20852 Regional Offices B O S T O N 450 Artisan Way Suite 320 Somerville, MA 02145 617.684.1500 L O S A N G E L E S 830 Pacific Coast Highway Suite 204 El Segundo, CA 90245 310.414.5280 P H I L A D E L P H I A 50 E Wynnewood Road Suite 200 Wynnewood, PA 19096 610.896.5870 S A N J O S E 356 Santana Row Suite 1005 San Jose, CA 95128 408.551.4600 T Y S O N S 7930 Jones Branch Drive Suite 350 McLean, VA 22102 

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