InvenTrust Properties Corp. - Quarter Report: 2018 September (Form 10-Q)

Recently Issued Accounting Pronouncements Adopted, continued

Description

Date of adoption

Effect on the financial statements or other significant matters

ASU No. 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)

ASU No. 2017-05, which adds guidance for partial sales of nonfinancial assets and clarifies the scope of Subtopic 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets, applies to the derecognition of all nonfinancial assets (including real estate) for which the counterparty is not a customer. The new guidance requires an entity to derecognize a nonfinancial asset in a partial sale transaction when it ceases to have a controlling financial interest in the asset and has transferred control of the asset and generally requires the full gain be recognized.

January 2018

For property sales where the Company has no continuing involvement, there should be no change to the Company's timing of gain or loss recognition. The Company adopted ASU No. 2017-05 in conjunction with the new revenue standard on January 1, 2018, resulting in deferred gains of $12,756 recognized through beginning distributions in excess of accumulated net income, as discussed in "Note 6. Investment in Consolidated and Unconsolidated Entities".

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


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

FOR THE QUARTERLY PERIOD ENDED September 30, 2018


¨	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: 000-51609

INVENTRUST PROPERTIES CORP.

(Exact name of registrant as specified in its charter)



Maryland		34-2019608
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3025 Highland Parkway, Suite 350, Downers Grove, Illinois		60515
(Address of principal executive offices)		(Zip Code)

855-377-0510

(Registrant’s telephone number, including area code)

_______________________________________________________________

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 the filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ¨

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



Large accelerated filer ¨		Accelerated filer ¨

Non-accelerated filer x		Smaller reporting company ¨

		Emerging growth company ¨

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

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

As of November 1, 2018, there were 727,895,082 shares of the registrant’s common stock outstanding.

InvenTrust Properties Corp.

Quarterly Report on Form 10-Q

For the quarterly period ended September 30, 2018

Table of Contents



	Part I - Financial Information	Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	1
	Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2018 and 2017	2
	Condensed Consolidated Statements of Equity for the nine months ended September 30, 2018 and 2017	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017	4
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	40
	Part II - Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42

	Signatures	43

- i-

INVENTRUST PROPERTIES CORP.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)



	As of
	September 30, 2018			December 31, 2017
	(unaudited)
Assets
Investment properties
Land	$	586,710		$	628,487
Building and other improvements	1,744,864			1,887,598
Construction in progress	7,543			4,975
Total	2,339,117			2,521,060
Less accumulated depreciation	(306,123		)	(348,337		)
Net investment properties	2,032,994			2,172,723
Cash and cash equivalents	157,351			162,747
Restricted cash	28,035			9,131
Investment in marketable securities	1,385			4,758
Investment in unconsolidated entities	188,135			180,764
Intangible assets, net	106,862			115,411
Accounts and rents receivable (net of allowance of $1,743 and $1,266)	28,064			30,522
Deferred costs and other assets, net	21,010			22,548
Total assets	$	2,563,836		$	2,698,604

Liabilities
Debt, net	$	589,994		$	667,861
Accounts payable and accrued expenses	45,809			37,798
Distributions payable	13,030			13,441
Intangible liabilities, net	48,952			53,532
Other liabilities	18,778			20,250
Total liabilities	716,563			792,882
Commitments and contingencies

Stockholders' Equity
Preferred stock, $.001 par value, 40,000,000 shares authorized, none outstanding	—			—
Common stock, $.001 par value, 1,460,000,000 shares authorized, 727,949,198 shares issued and outstanding as of September 30, 2018 and 774,293,197 shares issued and outstanding as of December 31, 2017, respectively	728			773
Additional paid-in capital	5,584,538			5,681,912
Distributions in excess of accumulated net income	(3,740,288		)	(3,778,908		)
Accumulated comprehensive income	2,295			1,945
Total stockholders' equity	1,847,273			1,905,722
Total liabilities and stockholders' equity	$	2,563,836		$	2,698,604

See accompanying notes to condensed consolidated financial statements.

INVENTRUST PROPERTIES CORP.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(in thousands, except share and per share amounts)



	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Income
Rental income	$	44,297		$	46,808		$	135,893		$	140,146
Tenant recovery income	13,614			14,704			44,390			42,523
Other property income	1,617			321			2,935			1,409
Other fee income	965			1,018			2,965			3,212
Total income	60,493			62,851			186,183			187,290

Expenses
General and administrative expenses	9,628			11,051			26,617			33,484
Property operating expenses	8,615			9,200			26,629			25,654
Real estate taxes	8,712			9,874			27,742			27,041
Depreciation and amortization	29,684			23,941			77,768			69,815
Provision for asset impairment	2,713			—			3,510			16,440
Total expenses	59,352			54,066			162,266			172,434
Operating income	1,141			8,785			23,917			14,856
Interest and dividend income	340			938			1,489			3,853
Gain on sale of investment properties, net	13,476			7,253			51,741			21,634
(Loss) gain on extinguishment of debt, net	(4		)	(42		)	10,693			840
Other income (expense)	21			2,611			515			(671		)
Interest expense	(5,954		)	(7,588		)	(19,047		)	(22,795		)
Equity in (losses) earnings of unconsolidated entities	(43		)	648			(2,795		)	1,895
Realized and unrealized investment gains, net	13			71			236			30,940
Income from continuing operations before income taxes	8,990			12,676			66,749			50,552
Income tax expense	(43		)	(432		)	(407		)	(943		)
Net income from continuing operations	8,947			12,244			66,342			49,609
Net income from discontinued operations	—			9,721			—			8,372
Net income	$	8,947		$	21,965		$	66,342		$	57,981

Weighted average number of common shares outstanding, basic and diluted	768,385,770			773,517,492			772,341,263			773,405,710
Net income per common share, from continuing operations, basic and diluted	$	0.01		$	0.02		$	0.09		$	0.06
Net income per common share, from discontinued operations, basic and diluted	$	—		$	0.01		$	—		$	0.01
Net income per common share, basic and diluted	$	0.01		$	0.03		$	0.09		$	0.07

Distributions declared per common share outstanding	$	0.01		$	0.02		$	0.05		$	0.05
Distributions paid per common share outstanding	$	0.01		$	0.02		$	0.05		$	0.05
Comprehensive income
Net income	$	8,947		$	21,965		$	66,342		$	57,981
Unrealized gain (loss) on investment securities	—			4,257			—			(13,407		)
Unrealized gain on derivatives	142			111			1,218			426
Reclassification for amounts recognized in net income	(284		)	(71		)	(593		)	(30,940		)
Comprehensive income	$	8,805		$	26,262		$	66,967		$	14,060

See accompanying notes to condensed consolidated financial statements.

INVENTRUST PROPERTIES CORP.

Condensed Consolidated Statements of Equity

(Unaudited)

(in thousands, except share amounts)



	Number of Shares	Common Stock		Additional Paid-in Capital		Distributions in excess of accumulated net income			Accumulated Comprehensive Income			Total

Beginning balance, January 1, 2017	773,304,997	$	773	$	5,676,639	$	(3,786,943	)	$	59,059		$	1,949,528
Net income	—	—		—		57,981			—			57,981
Unrealized gain on investment securities	—	—		—		—			(13,407		)	(13,407		)
Unrealized loss on derivatives	—	—		—		—			426			426
Reclassification for amounts recognized in net income	—	—		—		—			(30,940		)	(30,940		)
Distributions declared	—	—		—		(40,316		)	—			(40,316		)
Stock-based compensation, net	215,544	—		2,686		—			—			2,686
Refund of excess funds associated with 2016 tender offer	—	—		1,929		—			—			1,929
Ending balance, September 30, 2017	773,520,541	$	773	$	5,681,254	$	(3,769,278	)	$	15,138		$	1,927,887



	Number of Shares		Common Stock			Additional Paid-in Capital			Distributions in excess of accumulated net income			Accumulated Comprehensive Income			Total

Beginning balance, January 1, 2018	774,293,197		$	773		$	5,681,912		$	(3,778,908	)	$	1,945		$	1,905,722
Impact of Accounting Standards Update ("ASU") No. 2016-01 (a)	—		—			—			275			(275		)	—
Impact of ASU No. 2017-05 (a)	—		—			—			12,756			—			12,756
Adjusted balance at January 1, 2018	774,293,197		773			5,681,912			(3,765,877		)	1,670			1,918,478
Net income	—		—			—			66,342			—			66,342
Unrealized gain on derivatives	—		—			—			—			1,218			1,218
Reclassification for amounts recognized in net income	—		—			—			—			(593		)	(593		)
Distributions declared	—		—			—			(40,753		)	—			(40,753		)
Stock-based compensation, net	159,540		—			1,812			—			—			1,812
Repurchase of common stock	(46,503,539	)	(45		)	(99,186		)	—			—			(99,231		)
Ending balance, September 30, 2018	727,949,198		$	728		$	5,584,538		$	(3,740,288	)	$	2,295		$	1,847,273


(a)	See Note 2. Recently Issued Accounting Pronouncements Adopted.

See accompanying notes to condensed consolidated financial statements.

INVENTRUST PROPERTIES CORP.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)



	Nine months ended September 30,
	2018			2017
Cash flows from operating activities:
Net income	$	66,342		$	57,981
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	77,906			71,096
Amortization of above and below-market leases, net	(3,990		)	(4,638		)
Amortization of debt premiums, discounts and financing costs	797			947
Straight-line rental income	(3,237		)	(1,418		)
Provision for asset impairment	3,510			16,440
Gain on sale of investment properties, net	(51,741		)	(31,749		)
Gain on extinguishment of debt, net	(10,693		)	(838		)
Equity in losses (earnings) of unconsolidated entities	2,795			(1,895		)
Distributions from unconsolidated entities	5,069			351
Realized and unrealized investment gains, net	(236		)	(30,940		)
Non-cash stock-based compensation, net	3,187			4,007
Changes in assets and liabilities:
Accounts and rents receivable, net	400			1,682
Deferred costs and other assets	3,742			6,326
Accounts payable and accrued expenses	7,862			3,988
Other liabilities	(22		)	3,546
Net cash provided by operating activities	101,691			94,886
Cash flows from investing activities:
Purchase of investment properties	(149,781		)	(517,061		)
Acquired in-place and market lease intangibles, net	(8,935		)	(50,207		)
Capital expenditures and tenant improvements	(17,636		)	(20,278		)
Investment in development projects	(2,028		)	—
Proceeds from sale and transfer of investment properties, net	254,424			197,843
Proceeds from sale of marketable securities, net	3,609			140,171
Contributions to unconsolidated entities	(2,761		)	(6,109		)
Distributions from unconsolidated entities	282			1,285
Lease commissions and other leasing costs	(5,353		)	(2,201		)
Other assets	(89		)	998
Other liabilities	(330		)	(1,124		)
Net cash provided by (used in) investing activities	71,402			(256,683		)
Cash flows from financing activities:
Shares repurchased	(98,666		)	—
Distributions	(41,164		)	(39,917		)
Refund received of excess funds associated with 2016 tender offer	—			1,929
Proceeds from debt	52,000			—
Pay-offs of debt	(68,096		)	(104,032		)
Debt prepayment penalties	(1,617		)	—
Principal payments of mortgage debt	(1,423		)	(1,022		)
Payment of loan fees and deposits	(619		)	(343		)
Net cash used in financing activities	(159,585		)	(143,385		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	13,508			(305,182		)
Cash, cash equivalents, and restricted cash at beginning of period	171,878			417,325
Cash, cash equivalents, and restricted cash at end of period	$	185,386		$	112,143

INVENTRUST PROPERTIES CORP.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)



	Nine months ended September 30,
	2018			2017
Reconciliation of cash, cash equivalents, and restricted cash to condensed consolidated balance sheets:
Cash and cash equivalents	$	157,351		$	102,810
Restricted cash	28,035			9,333
Cash, cash equivalents, and restricted cash at end of period	$	185,386		$	112,143

Supplemental disclosure and schedules:
Cash flow disclosure, including non-cash activities:
Cash paid for interest	$	18,504		$	23,973
Cash paid for income taxes, net of refunds of $138 and $509	$	1,040		$	684
Distributions payable	$	13,030		$	13,440
Recognition of partially deferred gains on property sales	$	12,756		$	—
Accrued capital expenditures and tenant improvements	$	5,207		$	1,706
Accrued investment in re-development projects	$	362		$	—
Accrued lease commissions and other leasing costs	$	410		$	218
Accrued common stock repurchase costs	$	565		$	—

Purchase of investment properties:
Net investment properties	$	150,477		$	570,403
Accounts receivable, lease intangibles, and deferred costs and other assets	14,121			69,214
Accounts payable, accrued expenses, lease intangibles, and other liabilities	(5,882		)	(30,632		)
Assumption of mortgage debt	—			(41,717		)
Cash outflow for purchase of investment properties	158,716			567,268
Assumption of mortgage principal	—			41,000
Capitalized acquisition costs	(260		)	(1,692		)
Construction escrow accounts	467			14,568
Credits and other changes in cash outflow, net	877			2,567
Accrued contingent consideration	—			9,714
Gross acquisition price of investment properties	$	159,800		$	633,425

Sale and transfer of investment properties:
Net investment properties	$	251,383		$	166,724
Accounts receivable, lease intangibles, and deferred costs and other assets	10,077			5,597
Accounts payable, accrued expenses, lease intangibles, and other liabilities	(10,289		)	(3,682		)
Debt extinguished through transfer of properties	(44,331		)	(3,383		)
Debt extinguished through disposition of properties	(14,854		)	—
Gain on sale and transfer of investment properties, net	51,741			31,749
Gain on extinguishment of debt, net	10,697			838
Cash inflow from sale and transfer of investment properties, net	254,424			197,843
Transfer of mortgage principal to buyer	16,600			—
Surrender of mortgage escrows for transferred properties	2,160			8,071
Credits and other changes in cash inflow, net	9,766			216
Gross disposition price of investment properties	$	282,950		$	206,130

See accompanying notes to condensed consolidated financial statements.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Readers of these interim condensed consolidated financial statements (the "Quarterly Report") should refer to the audited consolidated financial statements of InvenTrust Properties Corp. (the "Company") as of and for the year ended December 31, 2017, which are included in the Company's Annual Report on Form 10-K (the "Annual Report"), as certain note disclosures contained in such audited consolidated financial statements have been omitted from this Quarterly Report. In the opinion of management, all adjustments necessary (consisting of normal recurring accruals, except as otherwise noted) for a fair presentation have been included in these condensed consolidated financial statements.

1. Organization

The Company was incorporated as Inland American Real Estate Trust, Inc. in October of 2004 as a Maryland corporation and has elected to be taxed, and currently qualifies, as a real estate investment trust ("REIT") for federal tax purposes. The Company is taxed and operates in a manner that will allow the Company to continue to qualify as a REIT for U.S. federal income tax purposes. So long as it maintains its qualification as a REIT, the Company generally will not be subject to U.S. federal income tax on taxable income that is distributed to stockholders. If the Company fails to continue to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and would not be able to re-elect REIT status during the four years following the year of the failure.

The Company changed its name to InvenTrust Properties Corp. in April of 2015. The Company was formed to own, manage, acquire, and develop a diversified portfolio of commercial real estate located throughout the United States and to own properties in development, to partially own properties through joint ventures, and to own investments in marketable securities and other assets. The Company is now solely focused on owning, managing, acquiring, and developing a multi-tenant retail platform. As used throughout this Quarterly Report, the terms "Company," "InvenTrust," "we," "us," or "our" mean InvenTrust Properties Corp. and its wholly owned and unconsolidated joint venture investments.

Unless otherwise noted, all amounts are stated in thousands, except share, per share, and per square foot data. Any reference to number of properties, square feet, tenant and occupancy data are unaudited.

The accompanying condensed consolidated financial statements include the accounts of the Company, and all wholly owned subsidiaries and any consolidated variable interest entities (VIEs). Subsidiaries generally consist of limited liability companies (LLCs) and limited partnerships (LPs). All significant intercompany balances and transactions have been eliminated.

Each retail property is owned by a separate legal entity that maintains its own books and financial records, and each separate legal entity's assets are not available to satisfy the liabilities of other affiliated entities, except as otherwise disclosed in "Note 7. Debt."

As of September 30, 2018, the Company's assets consisted of 63 retail properties, including two retail properties classified as consolidated VIEs. As of September 30, 2017, the Company's assets consisted of 70 retail properties. In addition, as of September 30, 2018 and 2017, the Company had significant investments in two operating real estate joint ventures, one of which owns an interest in 14 and 15 retail properties, respectively, managed by the Company. The other joint venture owns land to be developed in Sacramento, California.

2. Basis of Presentation and Recently Issued Accounting Pronouncements

The accompanying condensed consolidated financial statements have been prepared in accordance with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, judgments and assumptions are required in a number of areas, including, but not limited to, evaluating the impairment of long-lived assets, allocating the purchase price of acquired assets, determining the fair value of debt and evaluating the collectability of accounts receivable. The Company bases these estimates, judgments and assumptions on historical experience and various other factors that the Company believes to be reasonable under the circumstances. Actual results may differ from these estimates.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Reclassifications

The Company has made certain reclassifications to the condensed consolidated statement of operations and comprehensive income for the three and nine months ended September 30, 2017 to conform to the 2018 presentation, including a $1,019 and $2,846 reclassification, respectively, of certain payroll costs from general and administrative expenses to property operating expenses based on the determination by the Company that certain functions' activities were more directly associated with the operations of the retail properties than corporate-level activities.

In addition, upon the adoption of ASU No. 2016-18, Statement of Cash Flows, the Company has made certain reclassifications to the condensed consolidated statement of cash flows for the nine months ended September 30, 2017 to conform to the 2018 presentation. For the nine months ended September 30, 2017, the adoption resulted in a net $4,092 increase in cash used in investing activities. The Company determined that the presentation of funds held in escrow for potential future property acquisitions as restricted cash most appropriately reflects the nature of the restrictions on the balances and underlying transactions; historically, the funds were recorded as deferred costs and other assets, net. This reclassification increased restricted cash on the condensed consolidated balance sheets by $6,650 as of December 31, 2016. As a result, the Company made additional reclassifications to the condensed consolidated statement of cash flows for the nine months ended September 30, 2017 to conform to the 2018 presentation, including a $6,650 increase in net cash used in investing activities resulting from the reclassification of funds held in escrow for potential future property acquisitions.

Recently Issued Accounting Pronouncements Adopted



Standard	Description	Date of adoption	Effect on the financial statements or other significant matters
ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and related updates	Under ASU No. 2014-09, an entity is required to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those promised goods or services. The standard allows either a full or modified retrospective method of adoption.	January 2018	The Company adopted ASU No. 2014-09 and the related subsequent updates on a modified retrospective basis. The Company has included "Note 3. Revenue Recognition" to address the incremental disclosures pertaining to the new standard which enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities	Under ASU No. 2016-01, equity investments are generally required to be measured at fair value with changes in fair value recognized in net income. Historically, changes in fair value were reported as a separate component of comprehensive income (loss) until realized.	January 2018	The Company adopted ASU No. 2016-01 on a modified retrospective basis. The Company determined that this standard did not have a significant impact on the condensed consolidated financial statements.

ASU No. 2016-15, Statement of Cash Flows	ASU No. 2016-15 reduces existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including payment of debt extinguishment costs, settlement of zero-coupon bonds, insurance claim proceeds, and distributions from equity method investees.	January 2018	The Company adopted ASU No. 2016-15 on a retrospective basis. The Company determined that this standard did not have a significant impact on the condensed consolidated financial statements.

ASU No. 2016-18, Statement of Cash Flows	ASU No. 2016-18 requires an entity to explain the changes in the combined total of restricted and unrestricted cash in the statement of cash flows.	January 2018	Upon the Company’s retrospective method adoption, the Company includes amounts generally described as restricted cash with cash and cash equivalents. For the nine months ended September 30, 2017, the adoption resulted in a net $4,092 increase in net cash used in investing activities.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)



Recently Issued Accounting Pronouncements Not Yet Adopted

Standard	Description	Date of adoption	Effect on the financial statements or other significant matters
ASU No. 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities	ASU No. 2017-12 is intended to better align the results of cash flow and fair value hedge accounting with risk-management activities through changes to both the designation and measurement guidance for qualifying hedging relationships in the financial statements. The transition guidance provides the option of early adoption of the new standard using a modified retrospective transition method in any interim period, or alternatively requires adoption for fiscal years beginning after December 15, 2018.	January 2019	The Company is continuing to evaluate this guidance but does not expect its adoption will have a significant impact on the condensed consolidated financial statements.

ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement	ASU No. 2018-13 is intended to improve the effectiveness of the disclosures required by Topic 820, Fair Value Measurement by eliminating, amending, or adding certain disclosures. The amendments in this ASU are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework for Financial Reporting — Chapter 8: Notes to Financial Statements, which was finalized on August 28, 2018. Certain amendments require a prospective transition method, while others require a retrospective transition method. The guidance is effective for all entities for fiscal years beginning after December 15, 2019, and early adoption is permitted.	January 2020	The Company is continuing to evaluate this guidance but does not expect its adoption will have a significant impact on the condensed consolidated financial statements.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Recently Issued Accounting Pronouncements Not Yet Adopted, continued

Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they are either not relevant to the Company, or are not expected to have a material effect on the condensed consolidated financial statements of the Company.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

3. Revenue Recognition

As a result of the adoption of Topic 606, Revenue from Contracts with Customers ("Topic 606"), the Company has changed its accounting policy from Topic 605, Revenue Recognition ("Topic 605"), for revenue recognized through other fee income on the condensed consolidated statement of operations and comprehensive income. The comparative period information has not been adjusted and continues to be reported under Topic 605. For the comparative period information reported under Topic 605, the Company recognized the fees as revenue when the related services were performed. The implementation of Topic 606 generally did not change the timing or pattern of revenue recognition for other fee income. As a result, there was no cumulative effect recognized. The Company has elected to apply Topic 606 to new and existing contracts that are not completed contracts as of January 1, 2018.

The Company has changed its accounting policy regarding the sales of investment property in accordance with Subtopic 610-20. When a sale contract exists and the Company has transferred control of the investment property, the Company derecognizes the investment property and recognizes a gain or loss equal to the difference between the amount of consideration transferred and the carrying amount of the investment property. Historically, the Company recognized gains and losses from the sale of investment property at the time of sale using the full accrual method based on the criteria in Topic 360-20, Property, Plant and Equipment - Real Estate Sales.

The following table reflects the disaggregation of other fee income:



	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Property management fees	$	631	$	671	$	1,996	$	2,126
Asset management fees	269		303		831		910
Leasing commissions and other fees	65		44		138		176
Other fee income	$	965	$	1,018	$	2,965	$	3,212

Contract Balances

The Company recognizes revenue when it satisfies a performance obligation. These rights to consideration most often result in receivables that are settled through recurring monthly customer payments for services provided over the term of the contract, which has a remaining original duration through 2023. The Company generally does not receive prepayments for services or recognize revenue prior to being legally entitled to payment from the customer. As a result, the Company generally does not record material contract assets or contract liabilities. The Company has receivables of $683 and $515 as of September 30, 2018 and December 31, 2017, respectively, which are included in deferred costs and other assets, net, on the condensed consolidated balance sheets.

Property Management and Asset Management Fees

The Company earns property management and asset management fees from services provided to our joint venture partnerships. Property management and asset management fees are recognized over time as services are rendered. The bundled services of the property management performance obligation and asset management performance obligation each qualify as a series of distinct services satisfied over time. The variable consideration related to each of the performance obligations is recognized in each of the periods that directly relate to the Company's efforts to provide those services. Accordingly, the Company has elected the optional exemption provided by Topic 606 and does not disclose information about remaining wholly unsatisfied performance obligations. The uncertainty of the property management and asset management fees, which generally relate to the fluctuation in cash receipts from tenants and potential changes in equity capitalization, are resolved on a monthly basis. For certain services, the Company acts as an agent on behalf of the customer to arrange for performance by a third-party. Based on the Company's judgment, both the underlying asset management service activities and the underlying property management service activities are not distinct but are inputs (or fulfillment activities) to provide the combined output (either the overall asset management service or the overall property management service).

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Leasing Commissions and Other Fees

The Company earns leasing commissions and other fees from services provided to our joint venture partnerships. Leasing commissions and other fees are recognized at a point in time consistent with the underlying service. The leasing performance obligation and other performance obligations are satisfied at the point in time which the customer is transferred control over and consumes the benefit of the service. The variable consideration related to each of the performance obligations is recognized in each of the periods that directly relate to the Company's efforts to provide those services. The uncertainty of the leasing commissions and other fees are resolved upon delivery of the underlying service.

4. Acquired Properties

The following table reflects the retail properties acquired, accounted for as asset acquisitions, during the nine months ended September 30, 2018:



Property	Metropolitan Statistical Area (MSA)(a)	Acquisition Date	Gross Acquisition Price		Square Feet
PGA Plaza (b)	Miami-Fort Lauderdale-West Palm Beach, FL	May 16, 2018	$	88,000	120,000
Kennesaw Marketplace (b)	Atlanta-Sandy Springs-Roswell, GA	May 30, 2018	64,300		117,000
Kennesaw Marketplace, Phase 3 (c)	Atlanta-Sandy Springs-Roswell, GA	September 13, 2018	7,500		13,000
			$	159,800	250,000


(a)	As defined by the United States Office of Management and Budget.


(b)	These acquisitions were made through two consolidated VIEs and used to facilitate an Internal Revenue Code Section 1031 tax-deferred exchange ("Reverse 1031 Exchange").


(c)	The assets, liabilities, and operations of Kennesaw Marketplace, Phase 3, are accounted for as part of the larger Kennesaw Marketplace retail property.

The following table summarizes the retail properties acquired, accounted for as asset acquisitions, during the nine months ended September 30, 2017:



Property	MSA	Acquisition Date	Gross Acquisition Price		Square Feet
Campus Marketplace (a)	San Diego-Carlsbad, CA	January 6, 2017	$	73,350	144,000
Paraiso Parc and Westfork Plaza	Miami-Fort Lauderdale-West Palm Beach, FL	February 1, 2017	163,000		393,000
The Shops at Town Center	Washington-Arlington-Alexandria, DC-VA-MD-WV	February 21, 2017	53,550		125,000
Cary Park Town Center	Raleigh-Cary, NC	August 14, 2017	25,000		93,000
The Parke	Austin-Round Rock, TX	August 18, 2017	112,250		364,000
The Plaza Midtown	Atlanta-Sandy Springs-Roswell, GA	August 18, 2017	31,800		70,000
River Oaks (b)	San Jose-Sunnyvale-Santa Clara, CA	September 14, 2017	115,000		275,000
Kyle Marketplace (b)	Austin-Round Rock, TX	September 21, 2017	59,475		226,000
			$	633,425	1,690,000


(a)	As part of this acquisition, the Company assumed mortgage debt of $41,717, as reported within non-cash financing activities on the condensed consolidated statement of cash flows for the nine months ended September 30, 2017.


(b)	These asset acquisitions were structured as Reverse 1031 Exchanges. During the first quarter of 2018, the title of Kyle Marketplace and River Oaks transferred to the Company through the completions of an exchange and expiration of the 180-day waiting period, respectively.

The Company incurred transaction costs of $60 and $260 during the three and nine months ended September 30, 2018, respectively, and $524 and $1,692 during the three and nine months ended September 30, 2017, respectively, which were capitalized and included in building and other improvements on the Company's condensed consolidated balance sheets.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following table summarizes the estimated fair value of the retail properties' assets acquired and liabilities assumed for the nine months ended September 30, 2018 and September 30, 2017:



	2018 Acquisitions			2017 Acquisitions
Land	$	23,001		$	125,990
Building and other improvements	127,216			440,204
Total investment properties	150,217			566,194
Intangible assets (a)	14,054			69,306
Intangible liabilities (b)	(5,119		)	(19,099		)
Net other assets and liabilities	648			17,024
Total fair value of assets acquired and liabilities assumed	$	159,800		$	633,425


(a)	Intangible assets include in-place leases and above-market leases.


(b)	Intangible liabilities include below-market leases.

5. Disposed Properties

Continuing operations

The following retail properties were disposed of during the nine months ended September 30, 2018:



Date	Property	Square Feet	Gross Disposition Price		Gain (Loss) on Sale of Investment Properties, net			Gain (Loss) on Extinguishment of Debt (d)
January 9, 2018	Sherman Town Center I & II	485,000	$	63,000	$	12,382		$	—
January 25, 2018	Grafton Commons	239,000	33,500		6,564			—
March 8, 2018	Lakeport Commons	283,000	31,000		(666		)	—
March 21, 2018	Stonecrest Marketplace (a)	265,000	—		1,777			10,752
March 31, 2018	Northwest Marketplace (b)	—	—		248			—
April 17, 2018	Market at Morse/Hamilton	45,000	10,000		1,592			—
May 24, 2018	Siegen Plaza	156,000	29,000		3,849			(54		)
June 20, 2018	Tomball Town Center	67,000	22,750		7,184			—
June 26, 2018	Bellerive Plaza (c)	76,000	—		(22		)	1,694
June 28, 2018	Parkway Centre North	143,000	23,700		5,357			(1,695		)
September 14, 2018	Tulsa Hills	473,000	70,000		13,476			—
		2,232,000	$	282,950	$	51,741		$	10,697


(a)	On March 21, 2018, the Company surrendered Stonecrest Marketplace, with a carrying value of $23,932, to the lender in satisfaction of non-recourse debt with an initial maturity date of March 1, 2017 and recognized a gain on transfer of assets, net, of $1,777. The Company is not aware of any material outstanding commitments and contingencies related to Stonecrest Marketplace.


(b)	The Company recognized a gain on sale of $248 related to the completion of a partial condemnation at this retail property.


(c)	On June 26, 2018, the Company surrendered Bellerive Plaza, with a carrying value of $4,771, to the lender in satisfaction of non-recourse debt with an initial maturity date of June 1, 2017. The Company recognized a loss on transfer of assets, net, of $22. The Company is not aware of any material outstanding commitments and contingencies related to Bellerive Plaza.


(d)	In addition to the gain or loss recognized as a result of the disposition of retail properties, the Company extinguished an additional loan on a retail property resulting in a loss on debt extinguishment of $4.

In aggregate, the Company recognized net proceeds of $254,424 from the sales, surrender, and condemnation of these properties on the condensed consolidated statement of cash flows during the nine months ended September 30, 2018.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The following retail properties were disposed of during the nine months ended September 30, 2017:



Date	Property	Square Feet	Gross Disposition Price		Gain (Loss) on Sale of Investment Properties, net			Gain (Loss) on Extinguishment of Debt
January 10, 2017	Penn Park	242,000	$	29,050	$	1,021		$	—
May 17, 2017	Intech Retail (a)	19,000	—		(53		)	882
May 19, 2017	Sparks Crossing	336,000	40,280		10,584			—
June 23, 2017	Lincoln Village	164,000	30,000		2,355			—
June 30, 2017	Market at Westlake (b)	—	—		474			—
July 31, 2017	Pavilions at Hartman Heritage	223,000	21,700		(1,708		)	—
July 31, 2017	Legacy Crossing	134,000	10,250		(211		)	(1		)
September 28, 2017	Heritage Plaza	132,000	21,350		9,172			(41		)
		1,250,000	$	152,630	$	21,634		$	840


(a)	On May 17, 2017, the Company surrendered Intech Retail, with a carrying value of $2,338, to the lender in satisfaction of non-recourse debt with an initial maturity date of November 1, 2016 and recognized a loss on transfer of assets, net, of $53. The Company is not aware of any material outstanding commitments and contingencies related to Intech Retail.


(b)	The Company recognized a gain on sale of $474 related to the completion of a partial condemnation at this retail property.

In aggregate, the Company recognized net proceeds of $197,843 from the sales, surrender, and condemnation of these properties on the condensed consolidated statement of cash flows during the nine months ended September 30, 2017.

Discontinued operations

On August 30, 2017, the Company sold its remaining non-core office property, Worldgate Plaza, for a gross disposition price of $53,500. This disposition represented the conclusion of the Company's strategic shift away from a diversified portfolio of commercial real estate assets not classified as multi-tenant retail. Certain reclassifications were made to discontinued operations on the condensed consolidated statement of operations and comprehensive income for the three and nine months ended September 30, 2017 to reflect the operations of Worldgate Plaza.



	Three months ended September 30, 2017			Nine months ended September 30, 2017
Total income	$	844		$	3,855
Less:
Depreciation and amortization expense	301			1,205
General and administrative, property operating, and real estate tax expenses	492			2,398
Operating income from discontinued operations	51			252
Interest expense, income taxes, and other miscellaneous expenses	(443		)	(1,993		)
Gain on sale of properties, net	10,115			10,115
Loss on extinguishment of debt	(2		)	(2		)
Net income from discontinued operations	$	9,721		$	8,372

Net income per common share, from discontinued operations, basic and diluted	$	0.01		$	0.01
Weighted average number of common shares outstanding, basic and diluted	773,517,492			773,405,710

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

6. Investment in Consolidated and Unconsolidated Entities

Consolidated Entities

During the second quarter of 2018, the Company entered into purchase agreements structured as Reverse 1031 Exchanges and loaned $152,300 to the VIEs to acquire PGA Plaza and Kennesaw Marketplace, which were the Company's only active Reverse 1031 Exchanges. As of September 30, 2018, the Company was deemed to be the primary beneficiary as it has the ability to direct the activities of the entities that most significantly impact economic performance and has all of the risks and rewards of ownership. Accordingly, the Company consolidated each active Reverse 1031 Exchange at September 30, 2018. The liabilities of the VIEs are non-recourse to the Company, and the assets must first be used to settle obligations of the VIEs. The following table presents the net assets of the VIEs as of September 30, 2018.



	September 30, 2018
Net investment properties	$	142,329
Other assets	14,225
Total assets	156,554
Other liabilities	(6,614		)
Net assets	$	149,940

Unconsolidated Entities

The entities listed below are owned by the Company and other unaffiliated parties in joint ventures. Net income, distributions and capital transactions for these entities are allocated to the Company and its joint venture partners in accordance with the respective partnership agreements.



			Carrying Value of Investment as of
Entity	Description	Ownership %	September 30, 2018			December 31, 2017
IAGM Retail Fund I, LLC	Multi-tenant retail shopping centers	55%	$	128,286		$	123,693
Downtown Railyard Venture, LLC	Land development	90%	59,961			57,183
Other unconsolidated entities	Various real estate investments	Various	(112		)	(112		)
			$	188,135		$	180,764

On April 17, 2013, the Company entered into a joint venture, IAGM Retail Fund I, LLC ("IAGM"), with PGGM Private Real Estate Fund, for the purpose of acquiring, owning, managing, supervising, and disposing of retail properties and sharing in the profits and losses from those retail properties and their activities. The Company contributed 14 properties to IAGM during the year ended December 31, 2013, and treated the contribution as a partial sale under Topic 360-20, "Property, Plant and Equipment - Real Estate Sales," and deferred an aggregate gain of $15,625 as a result of the property sales into the joint venture. Through December 31, 2017, the Company was amortizing the basis adjustment over 30 years, consistent with the depreciation period of the investee's underlying assets.

In accordance with the provisions of ASU No. 2017-05, full gain recognition may be required for property sales in which the Company has continuing involvement, where those gains may have been deferred under prior GAAP. As of January 1, 2018, with the adoption of ASU No. 2017-05, the Company's remaining $12,756 of the aforementioned deferred gain has been recognized through beginning distributions in excess of accumulated net income.

During the three months ended September 30, 2018, IAGM recognized a provision for asset impairment of $1,405 on one retail property. During the nine months ended September 30, 2018, IAGM recognized a provision for asset impairment of $3,673 on three retail properties. During the nine months ended September 30, 2018, IAGM disposed of one retail property and recognized a loss on sale of $3,905. For the three and nine months ended September 30, 2018, the Company's share of IAGM's provision for asset impairment was $773 and $2,020, respectively, and its share of the loss on sale for the nine months ended September 30, 2018, was $2,148.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Combined Financial Information

The following tables present the combined condensed financial information for the Company's unconsolidated entities.



	As of
	September 30, 2018		December 31, 2017
Assets:
Real estate assets, net of accumulated depreciation	$	545,014	$	586,671
Other assets	99,630		73,423
Total assets	$	644,644	$	660,094
Liabilities and equity:
Debt, net	311,699		311,574
Other liabilities	45,858		49,032
Equity	287,087		299,488
Total liabilities and equity	$	644,644	$	660,094

Company's share of equity	$	187,905	$	193,572
Cost of investments in excess of the Company's share of underlying net book value, net of accumulated amortization of $0 and $2,647, respectively.	230		(12,808		)
Carrying value of investments in unconsolidated entities	$	188,135	$	180,764



	Three months ended September 30,					Nine months ended September 30,
	2018			2017		2018			2017
Revenues	$	15,087		$	15,543	$	44,951		$	49,307
Expenses:
Interest expense and loan cost amortization	3,434			3,505		10,240			10,032
Depreciation and amortization	5,124			6,234		16,401			18,848
Operating expenses, ground rent and general and administrative expenses	4,766			5,193		15,774			17,463
Provision for asset impairment	1,405			—		3,673			—
Total expenses	14,729			14,932		46,088			46,343
Net income (loss) before gain (loss) on sale of real estate	358			611		(1,137		)	2,964
Gain (loss) on sale of real estate	13			—		(3,892		)	—
Net income (loss)	$	371		$	611	$	(5,029	)	$	2,964

Company's share of net income (loss), net of excess basis depreciation of $0, $130, $0 and $390, respectively	$	(93	)	$	648	$	(3,069	)	$	1,895
Distributions from unconsolidated entities in excess of the investments' carrying value	50			—		274			—
Equity in (losses) earnings of unconsolidated entities	$	(43	)	$	648	$	(2,795	)	$	1,895

The following table shows the scheduled maturities of IAGM's mortgages payable as of September 30, 2018 for the remainder of 2018, each of the next four years, and thereafter.



	Maturities during the year ending December 31,
	2018		2019	2020	2021	2022	Thereafter	Total
Mortgages payable	$	188,925	31,353	—	23,150	—	68,805	$	312,233

On June 30, 2018, IAGM entered into a one-year extension on a non-recourse mortgage loan with a balance of $15,103 related to one retail property. The original maturity date of June 30, 2018 has been extended to June 30, 2019.

On October 5, 2018, IAGM used proceeds from the sale of Victory Lakes to extinguish $38,300 of mortgages payable at two retail properties maturing in 2018 and on November 2, 2018, IAGM entered into a non-revolving, senior secured term loan

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

facility of $152,000 to refinance its remaining mortgages payable maturing in 2018, as disclosed in "Note 12. Subsequent Events."

As of September 30, 2018, $23,000 of mortgages payable by the joint venture are recourse to the Company. Subsequent to the execution of the November 2, 2018 non-revolving, senior secured term loan facility, these mortgages payable are no longer recourse of the Company.

7. Debt

As of September 30, 2018, the Company's total debt, net, was $589,994, which consists of mortgages payable, net, of $239,264 and credit agreements, net, of $350,730. The Company believes that it has the ability to repay, refinance or extend any of its debt, and that it has adequate sources of funds to meet short-term cash needs related to mortgages payable. It is anticipated that the Company will use proceeds from property sales, cash on hand, available capacity on term loan and line of credit, if any, to repay, refinance or extend the mortgages payable maturing in the near term.

Mortgages payable

As of September 30, 2018 and December 31, 2017, the Company had the following mortgages payable outstanding:



	September 30, 2018			December 31, 2017
Mortgages payable (a)	$	240,351		$	370,804
Premium, net of accumulated amortization	299			478
Discount, net of accumulated amortization	(167		)	(195		)
Debt issuance costs, net of accumulated amortization	(1,219		)	(1,611		)
Total mortgages payable, net	$	239,264		$	369,476


(a)	Mortgages payable had fixed interest rates (for both conforming loans and loans in default) ranging from 3.49% to 5.49%, with a weighted average interest rate of 4.37% as of September 30, 2018, and 3.49% to 10.45% with a weighted average interest rate of 5.13%, as of December 31, 2017.

Some of the mortgage loans require compliance with certain covenants, such as debt service coverage ratios, investment restrictions and distribution limitations. As of September 30, 2018, the Company was in compliance with all mortgage loan requirements. Of the total outstanding mortgages payable, $3,000 is recourse to the Company as of September 30, 2018.

The following table shows the scheduled maturities of the Company's mortgages payable as of September 30, 2018 for the remainder of 2018, each of the next four years, and thereafter.



	Maturities during the year ending December 31,
	2018		2019		2020		2021		2022		Thereafter		Total
Mortgages payable	$	7,575	$	—	$	41,000	$	12,627	$	50,982	$	128,167	$	240,351

On November 5, 2018, the Company used cash on hand to extinguish a mortgage payable maturing in 2018 of $7,575. Subsequent to this extinguishment, there were no outstanding mortgages payable recourse to the Company.

Credit agreements

On November 5, 2015, the Company entered into a term loan credit agreement for a $300,000 unsecured credit facility with an accordion feature that allows the Company to increase the size of the unsecured term loan credit facility to $600,000, subject to certain conditions. The term loan credit facility is subject to the maintenance of certain financial covenants. As of September 30, 2018 and December 31, 2017, the Company was in compliance with all of the covenants and default provisions under the term loan credit agreement.

On February 3, 2015, the Company entered into an amended and restated credit agreement for a $300,000 unsecured revolving line of credit with an accordion feature that allows the Company to increase the size of its unsecured line of credit up to $600,000, subject to certain conditions. The unsecured revolving line of credit matures on February 2, 2019 and contains one twelve-month extension option that the Company may exercise upon payment of an extension fee equal to 0.15% of the commitment amount on the maturity date and subject to certain other conditions. The unsecured revolving line of credit bears

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

interest at a rate equal to 1-Month LIBOR plus 1.40% and requires the maintenance of certain financial covenants. On July 12, 2018, the Company drew $52,000 on the unsecured revolving line of credit to repay some of the Company's mortgages payable that are maturing in 2018. The Company had $248,000 available under the unsecured revolving line of credit as of September 30, 2018.

As of September 30, 2018 and December 31, 2017, the Company had the following borrowings outstanding under its term loan credit facility and line of credit:



	September 30, 2018				December 31, 2017
	Aggregate Principal Balance			Interest Rate	Aggregate Principal Balance			Interest Rate	Maturity Date
5 year - swapped to fixed rate (a)	$	90,000		2.6510%	$	90,000		2.6510%	January 15, 2021
5 year - swapped to fixed rate (b)	60,000			2.6525%	60,000			2.6525%	January 15, 2021
5 year - variable rate (c)	50,000			3.4038%	50,000			2.6607%	January 15, 2021
7 year - variable rate (d)	100,000			3.7038%	100,000			2.9607%	November 5, 2022
Total unsecured term loans	300,000				300,000
Issuance costs, net of accumulated amortization	(1,270		)		(1,615		)
Total unsecured term loans, net of amortized issuance costs	$	298,730			$	298,385
Unsecured revolving line of credit - variable rate (e)	52,000			3.5211%	—			n/a	February 2, 2019
Total outstanding credit agreements, net	$	350,730


(a)	The Company swapped $90,000 of variable rate debt at an interest rate of 1-Month LIBOR plus 1.3% to a fixed rate of 2.6510%. The swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $90,000.


(b)	The Company swapped $60,000 of variable rate debt at an interest rate of 1-Month LIBOR plus 1.3% to a fixed rate of 2.6525%. The swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $60,000.


(c)	Interest rate reflects 1-Month LIBOR plus 1.3% as of September 30, 2018 and December 31, 2017.


(d)	Interest rate reflects 1-Month LIBOR plus 1.6% as of September 30, 2018 and December 31, 2017.


(e)	Interest rate reflects 1-Month LIBOR plus 1.4% as of September 30, 2018.

8. Fair Value Measurements

Recurring Measurements

For assets and liabilities measured at fair value on a recurring basis, quantitative disclosure of the fair value for each major category of assets and liabilities is presented below:



	Fair Value Measurements at September 30, 2018
Assets	Level 1		Level 2		Level 3
Marketable equity securities	$	1,078	$	—	$	—
Real estate related bonds	—		307		—
Derivative interest rate swaps	—		2,295		—
Total assets	$	1,078	$	2,602	$	—



	Fair Value Measurements at December 31, 2017
Assets	Level 1		Level 2		Level 3
Available-for-sale marketable securities	$	4,431	$	—	$	—
Real estate related bonds	—		327		—
Derivative interest rate swaps	—		1,670		—
Total assets	$	4,431	$	1,997	$	—

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Level 1

At September 30, 2018 and December 31, 2017, the fair value of the marketable equity securities has been determined based upon quoted market prices.

Level 2

To calculate the fair value of the real estate related bonds and the derivative interest rate instruments, the Company primarily uses quoted prices for similar securities and contracts. For the real estate related bonds, the Company reviews price histories for similar market transactions. For the derivative interest rate instruments, the Company uses inputs based on data that is observed in the forward yield curve that is widely observable in the marketplace. The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements which utilizes Level 3 inputs, such as estimates of current credit spreads.

As of September 30, 2018 and December 31, 2017, the Company determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company's derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. As of September 30, 2018 and December 31, 2017, the Company had outstanding interest rate swap agreements with an aggregate notional value of $150,000.

Level 3

At September 30, 2018 and December 31, 2017, the Company had no Level 3 recurring fair value measurements.

Nonrecurring Measurements

During the nine months ended September 30, 2018, the Company identified three retail properties that had reductions in the expected holding periods. The Company's estimated fair value was based on executed purchase contracts. The Company recorded a provision for asset impairment of $3,510 on these three retail properties. During the three months ended September 30, 2018, the Company identified two retail properties that had reductions in the expected holding periods. The Company's estimated fair value was based on executed purchase contracts. The Company recorded a provision for asset impairment of $2,713 on these two retail properties.

During the nine months ended September 30, 2017, the Company identified three retail properties that had reductions in the expected holding periods and reviewed the probability of these retail properties' dispositions. The Company's estimated fair values were based on broker opinions of value and letters of intent. The Company recorded a provision for asset impairment of $16,440 on these three retail properties. There was no provision for asset impairment recorded for the three months ended September 30, 2017.

The following table summarizes activity for the Company’s assets measured at fair value on a nonrecurring basis and the related impairment charges for the three and nine months ended September 30, 2018 and 2017:



	For the three months ended September 30,								For the nine months ended September 30,
	2018				2017				2018				2017
	Level 3		Impairment Losses		Level 3		Impairment Losses		Level 3		Impairment Losses		Level 3		Impairment Losses
Investment properties	$	33,075	$	2,713	$	—	$	—	$	64,075	$	3,510	$	36,676	$	16,440

Financial Instruments Not Measured at Fair Value

The table below represents the fair value of financial instruments presented at carrying values in the Company's condensed consolidated financial statements as of September 30, 2018 and December 31, 2017.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)



	September 30, 2018				December 31, 2017
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Mortgages payable	$	240,351	$	236,433	$	370,804	$	372,962
Unsecured term loans and revolving line of credit	$	352,000	$	352,276	$	300,000	$	299,770

The Company estimated the fair value of its mortgages payable using a weighted average effective market interest rate of 4.71% and 4.20% as of September 30, 2018 and December 31, 2017, respectively. The fair value estimate of the line of credit and term loan approximates the carrying value due to limited market volatility in pricing. The assumptions reflect the terms currently available on similar borrowing terms to borrowers with credit profiles similar to the Company's. As a result, the Company used a weighted average interest rate of 4.08% and 3.48% as of September 30, 2018 and December 31, 2017, respectively, to estimate the fair value of its line of credit and term loan. The Company has determined that its debt instrument valuations are classified in Level 2 of the fair value hierarchy.

9. Earnings per Share and Equity Transactions

The following summarizes the calculation of basic and diluted earnings per share:



	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Numerator:
Net income from continuing operations	$	8,947	$	12,244	$	66,342	$	49,609
Net income from discontinued operations	—		9,721		—		8,372
Net income	$	8,947	$	21,965	$	66,342	$	57,981

Denominator:
Weighted average shares outstanding, basic and diluted	768,385,770		773,517,492		772,341,263		773,405,710

Net income from continuing operations allocated to common stockholders per share	$	0.01	$	0.02	$	0.09	$	0.06
Net income from discontinued operations allocated to common stockholders per share	$	—	$	0.01	$	—	$	0.01
Net income per common share, basic and diluted	$	0.01	$	0.03	$	0.09	$	0.07

On August 15, 2018, the Company announced and commenced a modified "Dutch Auction" tender offer (the "Offer") to purchase for cash up to $75.0 million in value of shares of the Company's common stock, par value $0.001 per share (the "Shares"), subject to the Company's ability to increase the number of Shares accepted for payment in the Offer by up to 2% of the Company's outstanding Shares, without amending or extending the Offer in accordance with the rules promulgated by the SEC. The Company exercised that option and increased the Offer by 10,706,774 shares, or $22.5 million, to avoid any proration for the stockholders tendering shares. The Offer expired on September 13, 2018.

As a result of the Offer, the Company has accepted for purchase 46,503,539 shares of its common stock at a purchase price of $2.10 per share, for an aggregate cost of approximately $99.2 million, including fees and expenses, relating to the Offer as of September 30, 2018. Aggregate costs of $99.2 million have been classified as reductions to common stock and additional paid-in capital on the condensed consolidated statement of equity for the nine months ended September 30, 2018. The 46,503,539 shares accepted for purchase in the Offer represented approximately 6.0% of the shares of common stock outstanding at the time of the Offer.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

10. Stock-Based Compensation

Incentive Award Plan

Effective as of June 19, 2015, the Company's board of directors adopted and approved the InvenTrust Properties Corp. 2015 Incentive Award Plan (as amended, the "Incentive Award Plan"), under which the Company may grant cash and equity incentive awards to eligible employees, directors, and consultants. The restricted share units granted under the Incentive Award Plan to employees vest equally on each of three anniversaries subsequent to the grant date, and annually for those shares granted to directors, subject to the recipients' continued service to the Company. Under the Incentive Award Plan, the Company is authorized to grant up to 30,000,000 shares of the Company's common stock pursuant to awards under the plan. At September 30, 2018, 23,523,614 shares were available for future issuance under the Incentive Award Plan.

A summary of the Company's restricted stock unit activity for the nine months ended September 30, 2018 is as follows:



	Unvested Restricted Stock Units		Weighted Average Grant Date Price Per Share (a)
Outstanding as of January 1, 2018	1,535,505		$3.19
Shares granted	1,892,903		$3.14
Shares vested	(190,117	)	$3.28
Shares forfeited	(427,970	)	$3.20
Outstanding at September 30, 2018	2,810,321		$3.16


(a)	On an annual basis, the Company engages an independent third-party valuation advisory consulting firm to estimate the per share value of the Company's common stock on a fully diluted basis.

On September 30, 2018, there was $5,753 of total unrecognized compensation expense related to unvested stock-based compensation arrangements which vest through December 2018, 2019 and 2020, as applicable. The Company recognized stock-based compensation expense of $1,103 and $3,187 for the three and nine months ended September 30, 2018, respectively, and $1,616 and $4,325 for the three and nine months ended September 30, 2017, respectively. Stock-based compensation expense is recognized on a straight-line basis over the vesting period and forfeitures of stock-based awards are recognized as they occur.

11. Commitments and Contingencies

The Company is subject, from time to time, to various types of third-party legal claims or litigation that arise in the ordinary course of business, including, but not limited to, property loss claims, personal injury or other damages resulting from contact with the Company’s properties. These claims and lawsuits and any resulting damages are generally covered by the Company's insurance policies. The Company accrues for legal costs associated with loss contingencies when these costs are probable and reasonably estimable. While the resolution of these matters cannot be predicted with certainty, management does not expect, based on currently available information, that the final outcome of any pending claims or legal proceedings will have a material adverse effect on the financial condition, results of operations or cash flows of the Company.

University House Communities Group, Inc., Indemnity Claims

The Company received an indemnity notice from UHC Acquisition Sub LLC ("UHC") regarding certain matters under the Stock Purchase Agreement, dated January 3, 2016, for University House Communities Group, Inc., which was sold in June 2016. The notice sets forth various items for which UHC believes they are entitled to indemnification from the Company. In the normal course of property dispositions, pursuant to the purchase and sale agreements, certain indemnification claims can be made against the Company by the purchaser, in which the Company will continue to adjust the financial statements, as necessary, based on these claims. Based on the facts and circumstances of the indemnification claims made, guidance provided by third-party specialists and counsel, and management’s initial and ongoing assessment of the UHC claims, the Company accrued a potential loss contingency on the condensed consolidated financial statements as of and for the year ended December 31, 2017; the impact of the accrual was not material to the overall condensed consolidated financial statements. Management has accrued their best estimate of the potential loss related to these claims, but, due to the preliminary nature of this matter, the ultimate resolution could result in a loss of up to $5,000 in excess of the amount accrued. As of September 30, 2018, no material additional information has come to the attention of management that would change their estimate of the potential loss related to these claims.

INVENTRUST PROPERTIES CORP.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

12. Subsequent Events

In preparing its condensed consolidated financial statements, the Company has evaluated events and transactions occurring after September 30, 2018 through the date the financial statements were issued for recognition and disclosure purposes.

The Company has disposed of the following power center retail properties subsequent to September 30, 2018:



Date	Property	MSA	Square Feet	Gross Disposition Price
October 5, 2018	McKinney Town Center	Dallas-Fort Worth-Arlington, TX	243,000	$	51,000
October 5, 2018	Riverstone	Houston-The Woodlands-Sugar Land, TX	273,000	27,750
October 23, 2018	Hiram Pavilion	Atlanta–Sandy Springs–Roswell, GA	363,000	44,350
			879,000	$	123,100

On October 5, 2018, IAGM disposed of Victory Lakes Shopping Center, a 370,000 square foot power center located in the Houston-The Woodlands-Sugar Land, TX MSA for a gross disposition price of $53,000. IAGM used proceeds from the sale of Victory Lakes to extinguish $38,300 of mortgages payable at two retail properties maturing in 2018.

On November 2, 2018, IAGM entered into a non-revolving, senior secured term loan facility of $152,000 to refinance its mortgages payable maturing in 2018. The senior secured term loan facility matures in November 2023 and contains two twelve-month extension options that IAGM may exercise upon payment of an extension fee equal to 0.10% of the commitment amount on the first day of the extension term and subject to certain other conditions. The senior secured term loan facility bears interest at a rate equal to LIBOR daily floating rate plus 1.55% and requires the maintenance of certain financial covenants. Subsequent to this refinance, there were no outstanding IAGM mortgages payable recourse to the Company.

On November 5, 2018, the Company used cash on hand to extinguish a mortgage payable at Woodlake Crossing of $7,575. Subsequent to this refinance, there were no outstanding mortgages payable recourse to the Company.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Quarterly Report, other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements about the Company's plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "illustrative," "should" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us based on our knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report. Such risks, uncertainties and other important factors, include, among others, the risks, uncertainties and factors set forth in our filings with the U.S. SEC, including our Annual Report for the year ended December 31, 2017, as may be updated in this Quarterly Report and other quarterly and current reports, which are on file with the SEC and available at the SEC’s website (www.sec.gov). Such risks and uncertainties, among others, include:


•	market, political and economic volatility experienced by the U.S. economy or real estate industry as a whole, and the regional and local political and economic conditions in the markets in which our retail properties are located;


•	our ability to execute on potential strategic transactions aimed to enhance stockholder value and provide investment liquidity to stockholders;


•	our ability to identify, execute and complete disposition opportunities and at expected valuations;


•	our ability to identify, execute and complete acquisition opportunities and to integrate and successfully operate any retail properties acquired in the future and manage the risks associated with such retail properties;


•	our ability to manage the risks of expanding, developing or re-developing some of our current and prospective retail properties;


•	our transition to an integrated operating platform may not prove successful over the long-term;


•	loss of members of our senior management team or other key personnel;


•	changes in governmental regulations and U.S. GAAP or interpretations thereof;


•	our ability to access capital for renovations and acquisitions on terms and at times that are acceptable to us;


•	changes in the competitive environment in the leasing market and any other market in which we operate;


•	shifts in consumer retail shopping from brick and mortar stores to e-commerce;


•	declaration of bankruptcy by our retail tenants;


•	forthcoming expirations of certain of our leases and our ability to re-lease such retail properties;


•	our ability to collect rent from tenants or to rent space on favorable terms or at all;


•	the impact of leasing and capital expenditures to improve our retail properties to retain and attract tenants;


•	events beyond our control, such as war, terrorist attacks, including acts of domestic terrorism, natural disasters and severe weather incidents, and any uninsured or under-insured loss resulting therefrom;


•	actions or failures by our joint venture partners, including development partners;


•	the cost of compliance with and liabilities under environmental, health and safety laws;


•	changes in real estate and zoning laws and increases in real property tax rates;


•	the economic success and viability of our anchor retail tenants;


•	our debt financing, including risk of default, loss and other restrictions placed on us;


•	our ability to refinance maturing debt or to obtain new financing on attractive terms;


•	future increases in interest rates;


•	the availability of cash flow from operating activities to fund distributions;


•	our investment in equity and debt securities in companies we do not control;


•	our status as a REIT for federal tax purposes;


•	changes in federal, state or local tax law, including legislative, administrative, regulatory or other actions affecting REITs; and


•	the impact of changes in the tax code as a result of recent U.S. federal income tax reform and uncertainty as to how some of those changes may be applied.

These factors are not necessarily all of the important factors that could cause our actual results, performance or achievements to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our business, financial condition, results of operations or cash flows. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made; we do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

The following discussion and analysis relates to the three and nine months ended September 30, 2018 and 2017 and as of September 30, 2018 and December 31, 2017. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included in this Quarterly Report.

Executive Summary

InvenTrust Properties Corp. is a premier, pure-play retail REIT that owns, leases, redevelops, acquires and manages open-air centers in key growth markets with favorable demographics. We continue to execute our strategy to enhance our multi-tenant retail platform by acquiring the right centers in the right markets, driven by focused and disciplined capital allocation.

During the nine months ended September 30, 2018, we continued to execute on our strategy by opportunistically disposing of properties not located in our core markets or where we believe the properties' values have been maximized. Our strategy is to redeploy the proceeds from these sales with a disciplined approach into strategic retail properties in our target markets. However, we face significant competition for attractive investment opportunities. As a result of this competition, the purchase prices for attractive and suitable assets may be significantly elevated and may adversely impact our ability to acquire assets at all. Dispositions of real estate assets can be particularly difficult in a challenging economic environment when uncertainties exist about the impact of e-commerce on retailers and when financing alternatives are limited for potential buyers. Our inability to sell assets, or to sell assets at attractive prices, could have an adverse impact on our ability to realize proceeds for reinvestment. In addition, our disposition activity could continue to cause us to experience dilution in financial operating performance during the period in which we dispose of properties.

In evaluating our financial condition and operating performance, management focuses on the following financial and non-financial indicators, discussed in further detail herein:

•

Property net operating income ("NOI"), which excludes general and administrative expenses, depreciation and amortization, provision for asset impairment, interest and dividends from corporate investments, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, other income (expenses), interest expense, equity in earnings (losses) from unconsolidated entities, and realized and unrealized investment gains, net;


•	Modified NOI, which reflects property NOI exclusive of lease termination income and GAAP rent adjustments (such as straight-line rent and above/below market lease amortization);


•	Funds From Operations ("FFO") Applicable to Common Shares, a supplemental non-GAAP measure;


•	Cash flow from operations as determined in accordance with GAAP;


•	Economic and physical occupancy and rental rates;


•	Leasing activity and lease rollover;


•	Management of operating expenses;


•	Management of general and administrative expenses;


•	Debt maturities and leverage ratios; and


•	Liquidity levels.

Multi-tenant retail platform

Our wholly owned, consolidated, and managed retail properties include grocery-anchored neighborhood and community centers and necessity-based power centers. As of September 30, 2018, we manage 77 retail properties, with a gross leasable area ("GLA") of approximately 13.5 million square feet, which includes two retail properties classified as consolidated VIEs, with a GLA of approximately 0.3 million square feet, and 14 retail properties with a GLA of approximately 3.0 million square feet owned through an interest in IAGM. The following table summarizes our multi-tenant retail platform as of September 30, 2018 and 2017.



	Total Multi-tenant Retail Platform		Wholly owned and Consolidated Retail Properties		IAGM Retail Properties
	2018	2017	2018	2017	2018	2017
No. of properties	77	87	63	72	14	15
GLA (square feet)	13,463,452	15,732,401	10,488,389	12,755,098	2,975,063	2,977,303
Economic occupancy (a)	94.0%	93.7%	94.0%	94.4%	92.0%	90.8%
ABR per square foot (b)	$17.19	$16.14	$17.20	$16.00	$17.15	$16.77


(a)	Economic occupancy is defined as the percentage of total GLA for which a tenant is obligated to pay rent under the terms of its lease agreement, regardless of the actual use or occupancy by that tenant of the area being leased. Actual use may be less than economic occupancy.

(b)

Annualized Base Rent ("ABR") is computed as revenue for the last month of the period multiplied by 12 months. ABR includes the effect of rent abatements, lease inducements, straight-line rent GAAP adjustments and ground rent income. ABR per square foot is computed as ABR divided by the total leased square footage at the end of the period. Specialty leasing represents leases of less than one year in duration for inline space and includes any term length for a common area space, and is excluded from the ABR and leased square footage figures when computing the ABR per square foot.

Multi-tenant retail platform summary by center type

Our retail properties consist of community and neighborhood centers and power centers.

•

Community and neighborhood centers, which are generally open-air and designed for tenants that offer a wide array of merchandise including groceries, apparel, other soft goods and convenience-oriented offerings. Our community centers contain large anchor stores and a significant presence of national retail tenants. Our neighborhood shopping centers are generally smaller open-air centers with a grocery store anchor and/or drugstore, and other small service type retailers.


•	Power centers are generally larger and consist of several anchors, such as discount department stores, off-price stores, specialty grocers, and warehouse clubs or stores that offer a large selection of merchandise. Typically, the number of specialty tenants is limited and most are national or regional in scope.

The following tables summarize our multi-tenant retail platform, by center type, as of September 30, 2018 and 2017.



Community and neighborhood centers	Total Multi-tenant Retail Platform		Wholly owned and Consolidated Retail Properties		IAGM Retail Properties
Community and neighborhood centers	2018	2017	2018	2017	2018	2017
No. of properties	46	48	39	41	7	7
GLA (square feet)	5,435,120	5,439,219	4,169,462	4,171,623	1,265,658	1,267,596
Economic occupancy	94.0%	93.8%	94.0%	94.5%	94.0%	91.5%
ABR per square foot	$19.15	$17.52	$19.30	$17.20	$18.65	$18.62



Power centers	Total Multi-tenant Retail Platform		Wholly owned and Consolidated Retail Properties		IAGM Retail Properties
Power centers	2018	2017	2018	2017	2018	2017
No. of properties	31	39	24	31	7	8
GLA (square feet)	8,028,332	10,293,182	6,318,927	8,583,475	1,709,405	1,709,707
Economic occupancy	94.0%	93.6%	94.0%	94.4%	91.0%	90.2%
ABR per square foot	$15.82	$15.39	$15.79	$15.41	$15.92	$15.29

Market summary

The following table represents the geographical diversity of our multi-tenant retail platform as of September 30, 2018.



Region	No. of Properties	GLA (square feet)	% of Total GLA
East
Maryland	1	125,018	0.9%
Northeast
Pennsylvania	1	107,500	0.8%
South Atlantic
North Carolina	8	1,716,511	12.7%
Florida	9	1,675,007	12.4%
Georgia	9	1,227,626	9.1%
Virginia	2	375,677	2.8%
Alabama	1	207,568	1.5%
Kentucky	1	100,926	0.7%
	30	5,303,315	39.4%
Southwest
Texas	33	5,960,383	44.3%
Oklahoma	1	255,214	1.9%
	34	6,215,597	46.2%
West
California	7	1,046,634	7.8%
Colorado	4	665,388	4.9%
	11	1,712,022	12.7%
Total	77	13,463,452	100%

Multi-tenant retail platform by same-property

The following table summarizes the GLA, economic occupancy and ABR per square foot of the properties included in our multi-tenant retail platform classified as same-property for the three and nine months ended September 30, 2018 and 2017.



	Same-property results for the three months ended September 30, 2018 and 2017
	Total Multi-tenant Retail Platform		Wholly owned and Consolidated Retail Properties		IAGM Retail Properties
	2018	2017	2018	2017	2018	2017
No. of properties	70	70	56	56	14	14
GLA (square feet)	12,143,883	12,150,686	9,168,821	9,174,284	2,975,062	2,976,402
Economic occupancy	94.0%	92.9%	94.0%	93.6%	92.0%	91.0%
ABR per square foot	$16.78	$16.39	$16.67	$16.32	$17.15	$16.61



	Same-property results for the nine months ended September 30, 2018 and 2017
	Total Multi-tenant Retail Platform		Wholly owned and Consolidated Retail Properties		IAGM Retail Properties
	2018	2017	2018	2017	2018	2017
No. of properties	67	67	53	53	14	14
GLA (square feet)	11,481,218	11,487,983	8,506,156	8,511,581	2,975,062	2,976,402
Economic occupancy	93.0%	93.0%	94.0%	93.7%	92.0%	91.0%
ABR per square foot	$16.24	$15.87	$15.94	$15.63	$17.15	$16.61

Leasing Activity

The following table represents occupied lease expirations of our multi-tenant retail platform as of September 30, 2018.



Lease Expiration Year	No. of Expiring Leases	GLA of Expiring Leases	ABR of Expiring Leases		Percent of Total GLA	Percent of Total ABR	Expiring ABR per sq. ft.
2018	29	56,417	$	1,592	0.4%	0.7%	$	28.22
2019	216	978,637	16,988		7.7%	7.9%	17.36
2020	254	1,161,281	22,156		9.2%	10.4%	19.08
2021	271	1,575,237	27,370		12.5%	12.8%	17.38
2022	296	1,917,929	34,220		15.2%	16.0%	17.84
2023	229	1,467,661	26,110		11.6%	12.2%	17.79
2024	112	1,407,822	20,841		11.1%	9.7%	14.80
2025	69	777,022	11,232		6.1%	5.2%	14.46
2026	76	404,115	7,821		3.2%	3.7%	19.35
2027	102	786,596	16,984		6.2%	7.9%	21.59
Thereafter	147	1,854,637	28,226		14.7%	13.2%	15.22
Other (a)	239	269,223	668		2.1%	0.3%	2.48
	2,040	12,656,577	$	214,208	100.0%	100.0%	$	16.92

(a)

Other lease expirations include month-to-month and specialty leases. Specialty leasing represents leases of less than one year in duration for inline space and includes any term length for a common area space. Examples include retail holiday stores, storage, and short-term clothing and furniture consignment stores. Specialty leasing includes, but is not limited to, any term length for a common area space, including but not limited to: tent sales, automated teller machines, cell towers, billboards, and vending.

We believe the percentage of leases expiring annually over the next five years may allow us to capture an appropriate portion of potential market rent increases while allowing us to manage any potential re-leasing risk. For purposes of preparing the table, we have not assumed that un-exercised contractual lease renewal or extension options contained in our leases will in fact be exercised.

We have not experienced any tenant bankruptcies or receivable write-offs that have materially impacted our results of operations. Our retail business is neither highly dependent on specific retailers nor is it subject to significant lease roll-over concentration. We believe this minimizes risk to the platform from significant revenue variances over time.

The following table summarizes the leasing activity for leases that were executed during the nine months ended September 30, 2018 compared to expiring or expired leases for the same or previous tenant for renewals and the same unit for new leases at the 77 retail properties in our multi-tenant retail platform. We had GLA totaling 1,442,240 square feet expiring during the nine months ended September 30, 2018, of which 1,051,122 square feet was rolled over. This achieved a retention rate of approximately 72.9%.



	No. of Leases Executed as of September 30, 2018	GLA SF	New Contractual Rent ($PSF) (b)	Prior Contractual Rent ($PSF) (b)	% Change over Prior Contract Rent (b)	Weighted Average Lease Term (Years)	Tenant Improve-ment Allowance ($PSF)	Lease Commissions ($PSF)
All tenants
Comparable Renewal Leases (a)	156	912,702	$17.82	$17.12	4.1%	5.1	$0.69	$0.13
Comparable New Leases (a)	26	134,528	$19.35	$19.68	(1.7)%	10.1	$15.25	$7.16
Non-Comparable Renewal and New Leases	111	574,586	$18.47	N/A	N/A	8.3	$15.42	$5.32
Total	293	1,621,816	$18.02	$17.43	3.4%	6.6	$7.12	$2.55

Anchor tenants (leases over 10,000 square feet)
Comparable Renewal Leases (a)	22	583,907	$12.74	$12.34	3.2%	5.1	$0.71	$0.16
Comparable New Leases (a)	4	80,796	$11.09	$13.26	(16.4)%	10.4	$15.75	$5.09
Non-Comparable Renewal and New Leases	12	296,760	$13.16	N/A	N/A	9.0	$9.81	2.69
Total	38	961,463	$12.54	$12.45	0.7%	6.8	$4.78	$1.36

Non-anchor tenants (leases under 10,000 square feet)
Comparable Renewal Leases (a)	134	328,795	$26.85	$25.60	4.9%	5.0	$0.66	$0.09
Comparable New Leases (a)	22	53,732	$31.77	$28.55	11.3%	9.7	$14.51	$10.27
Non-Comparable Renewal and New Leases	99	277,826	$24.27	N/A	N/A	7.6	$21.41	$8.13
Total	255	660,353	$27.54	$26.01	5.9%	6.5	$10.52	$4.30


(a)	Comparable leases are leases that meet all of the following criteria: terms greater than one year, unit was vacant one year or less prior to occupancy, square footage of unit remains unchanged or within 10% of prior unit square footage, and has a rent structure consistent with the previous tenant.


(b)	Non-comparable leases are not included in totals.

Highlights for the three months ended September 30, 2018

Retail property acquisition

During the three months ended September 30, 2018, we acquired Phase 3 of Kennesaw Marketplace, with 13,000 square feet of GLA, for a gross acquisition price of $7.5 million. The assets, liabilities, and operations of Kennesaw Marketplace, Phase 3, are accounted for as part of the larger Kennesaw Marketplace retail property, which was acquired on May 30, 2018.

Retail property disposals

During the three months ended September 30, 2018, we continued to execute on our strategy to opportunistically dispose of properties not located in our core markets or where we believe the properties' values have been maximized. On September 14, 2018, we disposed of Tulsa Hills Shopping Center, a 473,000 square foot power center located in Tulsa, OK, for a gross disposition price of $70.0 million.

Joint venture activity

During the three months ended September 30, 2018, IAGM recorded an additional provision for asset impairment of $1.4 million on one retail property based on a purchase contract.

Tender Offer

On August 15, 2018, the Company announced and commenced the Offer. As a result of the Offer, the Company has accepted for purchase 46,503,539 shares of its common stock at a purchase price of $2.10 per share, for an aggregate cost of approximately $99.2 million, including fees and expenses relating to the Offer as of September 30, 2018.

Current strategy and outlook

For InvenTrust, the right properties mean open-air grocery anchored and certain necessity-based power centers, and the right markets mean those with above average growth in population, employment and wages. We believe these conditions create markets that are poised to experience increasing tenant demand for grocery anchored and necessity-based retail centers, which will then position us to capitalize on potential future rent increases while enjoying sustained occupancy at our centers. Using this criteria, we have identified 10 to 15 core markets within the metropolitan areas of Atlanta, Austin, Charlotte, Dallas-Fort Worth-Arlington, Denver, Houston, the greater Los Angeles and San Diego areas, suburban Washington D.C., Miami, Orlando, Raleigh-Durham, San Antonio and Tampa.

We have a coordinated program designed to increase rental income by maximizing re-development opportunities and identifying locations in our current multi-tenant retail platform where we can develop pad sites. We are continuing to work with our tenants to expand rentable square footage at select retail properties where demand warrants. In addition, due to our properties being both retail centers and community focal points, we are able to identify short-term and specialty leasing opportunities that generate revenue from areas of the properties that are typically vacant.

Our grocery-anchored community and neighborhood centers attract consumers to our well-located properties, while our larger-format necessity-based power center retailers continue to adapt their business models to embrace omni-channel retail and appeal to consumers' continuing focus on value. Our property management team is focused on enhancing the consumer shopping experience at our centers by maintaining strong tenant relationships, controlling expenses, and investing in sustainability programs at a number of our retail properties with initiatives such as LED lighting, trash recycling, water conservation and other programs to reduce energy consumption and expenses.

In addition, our leasing staff continues to focus on leasing space at our retail properties at favorable rental rates while establishing a more favorable tenant mix and identifying complementary uses to maximize tenant performance. To date, our Company has not been materially affected by retailers and tenants unable to adapt their businesses to today's current trends, in particular the impact of e-commerce. We believe our strong locations have allowed and will continue to allow us to backfill the vacancies created by such tenants.

We believe that the continuing refinement of our multi-tenant retail platform will position us for future success, maximize value for stockholders over time, and put us in a position to evaluate and ultimately execute on potential strategic transactions aimed at achieving liquidity for our stockholders. While we believe in our ability to execute on our plan, the speed of its completion is uncertain and may be shortened or extended by external and macroeconomic factors including, among others, interest rate movements, local, regional, national and global economic performance, competitive factors, the impact of e-commerce on the retail industry, future retailer store closings, retailer bankruptcies, and government policy changes.

Results of Operations

The following section describes and compares our results of operations for the three and nine months ended September 30, 2018 and 2017 and reflects the results of our 63 wholly owned and consolidated retail properties. We generate substantially all of our net income from property operations. All dollar amounts shown in tables are stated in thousands unless otherwise noted.

Comparison of Results for the three and nine months ended September 30, 2018 and 2017



	Three months ended September 30,									Nine months ended September 30,
	2018			2017			Change			2018			2017			Change
Income
Rental income	$	44,297		$	46,808		$	(2,511	)	$	135,893		$	140,146		$	(4,253	)
Tenant recovery income	13,614			14,704			(1,090		)	44,390			42,523			1,867
Other property income	1,617			321			1,296			2,935			1,409			1,526
Other fee income	965			1,018			(53		)	2,965			3,212			(247		)
Total income	60,493			62,851			(2,358		)	186,183			187,290			(1,107		)

Expenses
General and administrative expenses	9,628			11,051			(1,423		)	26,617			33,484			(6,867		)
Property operating expenses	8,615			9,200			(585		)	26,629			25,654			975
Real estate taxes	8,712			9,874			(1,162		)	27,742			27,041			701
Depreciation and amortization	29,684			23,941			5,743			77,768			69,815			7,953
Provision for asset impairment	2,713			—			2,713			3,510			16,440			(12,930		)
Total expenses	59,352			54,066			5,286			162,266			172,434			(10,168		)
Operating income	1,141			8,785			(7,644		)	23,917			14,856			9,061
Interest and dividend income	340			938			(598		)	1,489			3,853			(2,364		)
Gain on sale of investment properties, net	13,476			7,253			6,223			51,741			21,634			30,107
(Loss) gain on extinguishment of debt, net	(4		)	(42		)	38			10,693			840			9,853
Other income (expense)	21			2,611			(2,590		)	515			(671		)	1,186
Interest expense	(5,954		)	(7,588		)	(1,634		)	(19,047		)	(22,795		)	(3,748		)
Equity in (losses) earnings of unconsolidated entities	(43		)	648			(691		)	(2,795		)	1,895			(4,690		)
Realized and unrealized investment gains, net	13			71			(58		)	236			30,940			(30,704		)
Income from continuing operations before income taxes	8,990			12,676			(3,686		)	66,749			50,552			16,197
Income tax expense	(43		)	(432		)	389			(407		)	(943		)	536
Net income from continuing operations	8,947			12,244			(3,297		)	66,342			49,609			16,733
Net income from discontinued operations	—			9,721			(9,721		)	—			8,372			(8,372		)
Net income	$	8,947		$	21,965		$	(13,018	)	$	66,342		$	57,981		$	8,361

Rental, Tenant Recovery, and Other Property Income

Rental income consists of basic monthly rent, straight-line rent adjustments, amortization of acquired above and below market leases and percentage of sales rental income recorded pursuant to tenant leases. Tenant recovery income consists of contractual reimbursements for real estate taxes, common area maintenance costs, management fees, and insurance costs. Other property income consists of lease termination fees and other miscellaneous property income.

•

Rental, tenant recovery, and other property income decreased $2.3 million when comparing the three months ended September 30, 2018 to the same period in 2017, primarily as a result of a decrease in rental, tenant recovery, and other property income of $10.2 million related to 14 retail properties disposed of since July 1, 2017, and was offset by increases in rental, tenant recovery, and other property income of $7.4 million related to seven retail properties acquired since July 1, 2017, and $0.4 million related to 56 retail properties classified as same-property.


•	Rental, tenant recovery, and other property income decreased $0.9 million when comparing the nine months ended September 30, 2018 to the same period in 2017, primarily as a result of decreases in rental, tenant recovery, and other

property income of $27.8 million related to 18 retail properties disposed of since January 1, 2017, and was offset by increases in rental, tenant recovery, and other property income of $25.7 million related to 10 retail properties acquired since January 1, 2017, and $1.2 million related to 53 retail properties classified as same-property.

Property Operating Expenses and Depreciation and Amortization

Property operating expenses consist of recurring repair and maintenance, utilities, and insurance (most of which are recoverable from the tenant).

•

Combined property operating expenses and depreciation and amortization increased $5.2 million when comparing the three months ended September 30, 2018 to the same period in 2017, primarily as a result of increases in expenses of $5.7 million related to seven retail properties acquired since July 1, 2017 and an increase in expenses of $4.3 million related to 56 retail properties classified as same-property. These increases were offset by a decrease in expense of $4.8 million related to 14 retail properties disposed of since July 1, 2017.

•

Combined property operating expenses and depreciation and amortization increased $8.9 million when comparing the nine months ended September 30, 2018 to the same period in 2017, primarily as a result of increases in expenses of $17.7 million related to 10 retail properties acquired since January 1, 2017 and an increase in expenses of $3.9 million related to 53 retail properties classified as same-property. These increases were offset by a decrease in expenses of $12.7 million related to 18 retail properties disposed of since January 1, 2017.

Real estate taxes

•

Real estate taxes decreased $1.2 million when comparing the three months ended September 30, 2018 to the same period in 2017, primarily as a result of decreases in real estate tax expense of $1.5 million related to 14 retail properties disposed of since July 1, 2017, and a decrease of $0.9 million related to 56 properties classified as same property. These decreases were offset by an increase in real estate tax expense of $1.2 million related to seven retail properties acquired since July 1, 2017.

•

Real estate taxes increased $0.7 million when comparing the nine months ended September 30, 2018 to the same period in 2017, primarily as a result of increases in real estate tax expense of $4.4 million related to 10 retail properties acquired since January 1, 2017, and $1.5 million related to 53 retail properties classified as same-property, and was offset by a decrease in real estate tax expense of $5.2 million related to 18 retail properties disposed of since January 1, 2017.

General and administrative expenses


•	General and administrative expenses for the three and nine months ended September 30, 2018 decreased by $1.4 million and $6.9 million, respectively, when compared to the same periods in 2017, primarily as a result of being a more focused company with a smaller operating platform and a continued focus on managing general and administrative expenses.

Provision for asset impairment

•

During the three months ended September 30, 2018, the Company identified two retail properties that may have reductions in their expected holding periods. As a result, the Company recorded a provision for asset impairment of $2.7 million on two retail properties as a result of the fair value (based on the agreed upon price) in the purchase contracts being lower than the properties' carrying values during the three months ended September 30, 2018.

•

During the nine months ended September 30, 2018, the Company identified three retail properties that may have reductions in their expected holding periods. As a result, the Company recorded an additional provision for asset impairment of $0.8 million on the disposal of one retail property and recorded a provision for asset impairment of $2.7 million on two retail properties as a result of the fair value (based on the agreed upon price) in the purchase contracts being lower than the properties' carrying values during the nine months ended September 30, 2018. During the nine months ended September 30, 2017, the Company identified three retail properties that may have reductions in their expected holding periods and as a result recorded a provision for asset impairment of $16.4 million.

Interest and dividend income


•	Interest and dividend income for the three and nine months ended September 30, 2018 decreased by $0.6 million and $2.4 million, respectively, when compared to the same periods in 2017, primarily as a result of increased sales of the

Company's marketable securities portfolio in 2017. The Company's investment in marketable securities has decreased by approximately $34.1 million, from $35.5 million as of September 30, 2017 to $1.4 million as of September 30, 2018.

Gain on sale of investment properties, net

•

During the three months ended September 30, 2018, the Company recognized a gain of $13.5 million related to the sale of one retail property. During the nine months ended September 30, 2018, the Company recognized a gain of $49.7 million related to the sale of eight retail properties, a gain on transfer of assets, net, of $1.8 million related to the surrender of Stonecrest Marketplace and Bellerive Plaza to the lender in satisfaction of non-recourse debt, and a gain on sale of $0.2 million related to the completion of a partial condemnation at one retail property.

•

During the three months ended September 30, 2017, the Company recognized a gain of $7.3 million on the sale of four retail properties. During the nine months ended September 30, 2017, the Company recognized a gain of $21.2 million on the sale of six retail properties, a loss on transfer of asset of $0.1 million related to the surrender of Intech Retail, and a gain on sale of $0.5 million related to the completion of a partial condemnation at one retail property.

Other income (expense)


•	Other income (expense) for the three and nine months ended September 30, 2017 of $2.6 million and $(0.7) million, respectively, is primarily attributed to a loss contingency reserve of $3.0 million related to punitive damages levied against the Company during the period. The matter was resolved during the year ended December 31, 2017.

(Loss) gain on extinguishment of debt, net

•

During the nine months ended September 30, 2018, the Company recognized gains on extinguishment of debt of $1.7 million related to the surrender of Bellerive Plaza and $10.8 million related to the surrender of Stonecrest Marketplace. In addition, the Company recognized a loss on extinguishment of debt of $1.8 million related to the loan payoffs on three retail properties primarily as a result of $1.6 million in prepayment penalties.


•	During the nine months ended September 30, 2017, the Company recognized a gain on extinguishment of debt of $0.8 million related to the surrender of Intech Retail.

Interest expense

•

Interest expense for the three and nine months ended September 30, 2018 decreased by $1.6 million and $3.7 million, respectively, when compared to the same periods in 2017, primarily as a result of decreases in interest expense of $1.1 million and $2.3 million, respectively, related to three properties surrendered to the lender (in satisfaction of non-recourse debt) since January 1, 2017, decreases of $0.7 million and $2.1 million, respectively, related to the pay-offs and deed in lieu of mortgage debt from the disposal of five retail properties since January 1, 2017, and a decrease of $0.5 million and $0.5 million, respectively, related to the payoff of one mortgage during the quarter ended September 30, 2018. These decreases were offset by increases to interest expense when comparing the three and nine months ended September 30, 2018 to the same periods in 2017 of $0.7 million and $1.2 million, respectively, as a result of increasing LIBOR rates since January 1, 2017 on the Company's variable rate unsecured term loans.

Equity in (losses) earnings of unconsolidated entities

•

Equity in (losses) earnings of unconsolidated entities for the three and nine months ended September 30, 2018 decreased by $0.7 million and $4.7 million, respectively, when compared to the same periods in 2017. These decreases were primarily a result of lower net income recognized from IAGM during the three and nine months ended September 30, 2018 of $0.4 million and $4.2 million, respectively, compared to the same periods in 2017. IAGM's decrease in net income for the three months ended September 30, 2018 was primarily a result of the recognition of an additional provision for asset impairment of $1.4 million on one retail property. IAGM's decrease in net income for the nine months ended September 30, 2018 was primarily the result of a loss on sale of $3.9 million and the recognition of a provision for asset impairment of $3.7 million on three retail properties during the nine months ended September 30, 2018.

Realized and unrealized investment gains, net


•	Our investment in marketable securities has decreased from $183.9 million as of December 31, 2016 to $1.4 million as of September 30, 2018. As a result of a decreasing balance in investment in marketable securities since December 31,

2016, realized and unrealized investment gains, net, during the three and nine months ended September 30, 2018 decreased by $0.1 million and $30.7 million, respectively, when compared to the same periods in 2017.

Net operating income

We evaluate the performance of our wholly owned retail properties based on NOI and modified NOI. Modified NOI reflects the income from operations excluding lease termination income and GAAP rent adjustments (such as straight-line rent and above/below market lease amortization). We believe NOI, modified NOI, same-property modified NOI, and modified NOI from other investment properties, which are supplemental non-GAAP financial measures, provide added comparability across periods when evaluating the financial condition and operating performance that is not readily apparent from "Operating income" or "Net income" in accordance with GAAP.

Comparison of same-property results for the three and nine months ended September 30, 2018 and 2017

A total of 56 and 53 of our wholly owned retail properties met our same-property criteria for the three and nine months ended September 30, 2018 and 2017, respectively. Modified NOI from other investment properties in the table below for the three and nine months ended September 30, 2018 and 2017 includes retail properties that did not meet our same-property criteria, including retail properties sold and/or acquired in 2018 and 2017. The following table represents the reconciliation of net income, the most directly comparable GAAP measure, to same-property modified NOI for the three and nine months ended September 30, 2018 and 2017.



	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Net income	$	8,947		$	21,965		$	66,342		$	57,981
Adjustments to reconcile to same-property modified NOI
Net income from discontinued operations	—			(9,721		)	—			(8,372		)
Income tax expense	43			432			407			943
Realized and unrealized investment gains, net	(13		)	(71		)	(236		)	(30,940		)
Equity in losses (earnings) of unconsolidated entities	43			(648		)	2,795			(1,895		)
Interest expense	5,954			7,588			19,047			22,795
Other (income) expense	(21		)	(2,611		)	(515		)	671
Loss (gain) on extinguishment of debt, net	4			42			(10,693		)	(840		)
Gain on sale and transfer of investment properties, net	(13,476		)	(7,253		)	(51,741		)	(21,634		)
Interest and dividend income	(340		)	(938		)	(1,489		)	(3,853		)
Provision for asset impairment	2,713			—			3,510			16,440
Depreciation and amortization	29,684			23,941			77,768			69,815
General and administrative expenses	9,628			11,051			26,617			33,484
Other fee income	(965		)	(1,018		)	(2,965		)	(3,212		)
Adjustments to modified NOI (a)	(3,032		)	(1,966		)	(8,083		)	(6,103		)
Total modified NOI	39,169			40,793			120,764			125,280
Modified NOI from other investment properties	6,830			9,331			35,814			38,530
Same-property modified NOI	$	32,339		$	31,462		$	84,950		$	86,750


(a)	Adjustments to modified NOI include termination fee income and GAAP rent adjustments (such as straight-line rent and above/below-market lease amortization).

Comparison of the components of same-property modified NOI for the three and nine months ended September 30, 2018 and 2017.



	Three months ended September 30,									Nine months ended September 30,
	2018		2017		Change			Var.		2018		2017		Change			Var.
Rental income	$	34,505	$	34,079	$	426		1.3	%	$	91,767	$	92,080	$	(313	)	(0.3	)%
Tenant recovery income	11,266		11,993		(727		)	(6.1	)%	30,064		29,393		671			2.3	%
Other property income	693		575		118			20.5	%	1,726		1,461		265			18.1	%
	46,464		46,647		(183		)	(0.4	)%	123,557		122,934		623			0.5	%
Property operating expenses	6,875		7,048		(173		)	(2.5	)%	19,075		18,181		894			4.9	%
Real estate taxes	7,250		8,137		(887		)	(10.9	)%	19,532		18,003		1,529			8.5	%
	14,125		15,185		(1,060		)	(7.0	)%	38,607		36,184		2,423			6.7	%
Same-property modified NOI	$	32,339	$	31,462	$	877		2.8	%	$	84,950	$	86,750	$	(1,800	)	(2.1	)%

Same-property modified NOI increased $0.9 million, or 2.8%, when comparing the three months ended September 30, 2018 to the same period in 2017 primarily as a result of increased leasing velocity at certain properties resulting in an increase of $0.4 million to rental income, as well as a decrease in property operating expenses for bad debt reserves at certain properties of $0.4 million.

Same-property modified NOI decreased $1.8 million, or 2.1%, when comparing the nine months ended September 30, 2018 to the same period in 2017 primarily as a result of lower leasing velocity at certain properties resulting in a decrease of $0.3 million to rental income, an increase of $0.8 million in non-recoverable property operating expenses, and an increase in real estate taxes of $1.5 million, which was offset by $1.3 million in higher tenant recovery income attributed to real estate tax recoveries.

Liquidity and Capital Resources

Capital expenditures and re-development activity

The following table summarizes capital resources used through development, re-development and leasing activities at the Company’s retail properties owned during the three and nine months ended September 30, 2018. These costs are classified as cash used in capital expenditures and tenant improvements on the condensed consolidated statements of cash flows for the nine months ended September 30, 2018.



	Development			Re-development			Leasing			Total
Direct costs	$	1,938	(a)	$	11,496	(a)	$	5,065	(c)	$	18,499
Indirect costs	90		(b)	1,075		(b)	—			1,165
Total	$	2,028		$	12,571		$	5,065		$	19,664


(a)	Direct development and re-development costs relate to construction of buildings at our retail properties.


(b)	Indirect development and re-development costs relate to the capitalized payroll attributed to improvements at our retail properties.


(c)	Direct leasing costs relate to improvements to a tenant space that are either paid directly or reimbursed to the tenants.

Short-term liquidity and capital resources

On a short-term basis, our principal demands for capital resources are to pay our operating, corporate, and transaction readiness expenses, as well as property capital expenditures, make distributions to our stockholders, and pay interest and principal payments on our current indebtedness. We expect to meet our short-term liquidity requirements from cash flows from operations, distributions from our joint venture investments, sales of our retail properties and available capacity on our revolving term loan.

IAGM plans to address its upcoming 2018 debt maturities by refinancing its existing debt and paying down a portion of the debt using cash on hand. However, there is no assurance that IAGM will be able to refinance the existing debt to address the upcoming maturities. As of September 30, 2018, $23.0 million of mortgages payable by the joint venture are recourse to the Company.

On August 15, 2018, the Company announced and commenced the Offer. As a result of the Offer, the Company has accepted for purchase 46,503,539 shares of its common stock at a purchase price of $2.10 per share, for an aggregate cost of approximately $99.2 million, excluding fees and expenses relating to the Offer as of September 30, 2018.

Long-Term Liquidity and Capital Resources

Our objectives are to maximize revenue generated by our multi-tenant retail platform, to further enhance the value of our retail properties to produce attractive current yield and long-term risk-adjusted returns for our stockholders and to generate sustainable and predictable cash flow from our operations to distribute to our stockholders. We are seeking to increase our operating cash flows over time through the execution of our strategy.

Our board of directors approved an increase to our annual distribution rate effective for the quarterly distribution paid in April 2018. As we execute on our retail strategy, our board has been and will continue to evaluate our distribution rate and, if the board deems appropriate, adjust the rate to take into account our progress in refining and balancing our multi-tenant retail platform.

Our primary sources and uses of capital resources are as follows:

Sources


•	Operating cash flows from our real estate investments, which consists of our retail properties;


•	Distributions from our joint venture investments;


•	Proceeds from sales of properties;


•	Proceeds from borrowings on properties;


•	Proceeds from corporate borrowings; and


•	Cash and cash equivalents.

Uses


•	To pay our operating expenses;


•	To make distributions to our stockholders;


•	To service or pay down our debt;


•	To fund capital expenditures and leasing related costs;


•	To invest in properties and portfolios of properties;


•	To fund development or re-development investments; and


•	Repurchases of our common stock.

We may, from time to time, seek to retire or purchase additional amounts of our outstanding equity and/or debt securities through cash purchases or exchanges for other securities. Such purchases or exchanges, if any, will depend on our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material.

Distributions

We declared cash distributions to our stockholders during the period from January 1, 2018 to September 30, 2018 totaling $40.8 million. During the nine months ended September 30, 2018, we paid cash distributions of $41.2 million. As we execute on our retail strategy, our board has been and expects to continue evaluating our distribution rate on a periodic basis. See "Current Strategy and Outlook" for more information regarding our retail strategy.

Borrowings

Mortgages payable, maturities

As of September 30, 2018, scheduled maturities for the Company's outstanding mortgage indebtedness will occur through September 2025, as follows (the table excludes recorded third-party debt associated with our unconsolidated entities):



	Maturities during the year ending December 31,
	2018		2019		2020		2021		2022		Thereafter		Total
Mortgages payable	$	7,575	$	—	$	41,000	$	12,627	$	50,982	$	128,167	$	240,351

Credit agreements, maturities

As of September 30, 2018, the Company had the following borrowings outstanding under its credit agreements:



	Aggregate Principal Balance		Interest Rate	Maturity Date
Unsecured term loan credit facility, 5 year - swapped to fixed rate (a)	$	90,000	2.6510%	January 15, 2021
Unsecured term loan credit facility, 5 year - swapped to fixed rate (b)	60,000		2.6525%	January 15, 2021
Unsecured term loan credit facility, 5 year - variable rate (c)	50,000		3.4038%	January 15, 2021
Unsecured term loan credit facility, 7 year - variable rate (d)	100,000		3.7038%	November 5, 2022
Unsecured revolving line of credit - variable rate (e)	52,000		3.5211%	February 2, 2019
Total credit agreements	$	352,000


(a)	The Company swapped $90.0 million of variable rate debt at an interest rate of 1-Month LIBOR plus 1.3% to a fixed rate of 2.6510%. The swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $90.0 million.


(b)	The Company swapped $60.0 million of variable rate debt at an interest rate of 1-Month LIBOR plus 1.3% to a fixed rate of 2.6525%. The swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $60.0 million.


(c)	Interest rate reflects 1-Month LIBOR plus 1.3% as of September 30, 2018 and December 31, 2017.


(d)	Interest rate reflects 1-Month LIBOR plus 1.6% as of September 30, 2018 and December 31, 2017.


(e)	Interest rate reflects 1-Month LIBOR plus 1.4% as of September 30, 2018.

Summary of Cash Flows



	Nine months ended September 30,						Change
	2018			2017			Change
Cash provided by operating activities	$	101,691		$	94,886		$	6,805
Cash provided by (used in) investing activities	71,402			(256,683		)	328,085
Cash used in financing activities	(159,585		)	(143,385		)	(16,200		)
Increase in cash and cash equivalents	13,508			(305,182		)	318,690
Cash and cash equivalents, at beginning of period	171,878			417,325			(245,447		)
Cash and cash equivalents, at end of period	$	185,386		$	112,143		$	73,243

Operating activities

Cash provided by operating activities of $101.7 million and $94.9 million for the nine months ended September 30, 2018 and 2017, respectively, was generated primarily from operating income from property operations and operating distributions from unconsolidated entities. Cash provided by operating activities increased $6.8 million when comparing the nine months ended September 30, 2018 to the same period in 2017 as a result of the acquisition of 10 properties since January 1, 2017 and was offset by the disposal of 18 properties since January 1, 2017.

Investing activities

Cash provided by investing activities of $71.4 million for the nine months ended September 30, 2018 was primarily generated by proceeds from sale of investment properties of $254.4 million related to the disposal of eight retail properties. These proceeds were offset by cash used for acquisitions of investment properties of $158.7 million, capital expenditures and tenant improvements of $17.6 million and lease commissions and other leasing costs of $5.4 million.

Cash used in investing activities of $256.7 million for the nine months ended September 30, 2017 was primarily attributed to cash used in the acquisition of eight retail properties of $567.3 million and cash used for capital expenditures and tenant improvements of $20.3 million. These decreases were offset by cash proceeds from the sale of marketable securities of $140.2 million and cash proceeds from the sale of six retail properties and Worldgate Plaza of $197.8 million during the nine months ended September 30, 2017.

Financing activities

Cash used in financing activities of $159.6 million for the nine months ended September 30, 2018 was primarily attributed to costs incurred related to the Offer of $98.7 million, a total of $71.8 million of cash used for pay-offs of debt, debt prepayment

penalties, principal payments of mortgage debt, and payment of loan fees and other deposits, and distributions paid of $41.2 million. These decreases were offset by a $52.0 million draw on the unsecured revolving line of credit.

Cash used in financing activities of $143.4 million for the nine months ended September 30, 2017 was primarily attributed to cash used to pay distributions of $39.9 million, cash used to payoff the loan of Worldgate Plaza of $60.0 million, and cash used to payoff loans of three retail properties upon disposition of $44.0 million. These decreases were offset by the return of $1.9 million in cash used to fund our 2016 tender offer as described in our Annual Report.

We consider all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents. We maintain our cash and cash equivalents at financial institutions. The combined account balances at one or more institutions generally exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage. As a result, there is what we believe to be insignificant credit risk related to amounts on deposit in excess of FDIC insurance coverage.

Contractual Obligations

We have debt obligations related to our mortgage loans, credit facility, term loan, and interest rate swaps as described in "Note 7. Debt" in the condensed consolidated financial statements. In addition, we have one retail property subject to a long-term ground lease where a third-party owns the underlying land and has leased it to us for our use. The unconsolidated entities in which we have an investment have third-party mortgage debt of $312.2 million as of September 30, 2018, of which approximately $23.0 million is recourse to the Company, as described in "Note 6. Investment in Consolidated and Unconsolidated Entities" in the Condensed Consolidated Financial Statements. It is anticipated that our unconsolidated entities will be able to repay or refinance all of their debt on a timely basis.

The following table presents, on a consolidated basis, obligations and commitments to make future payments under debt obligations and lease agreements. It excludes third-party debt associated with our unconsolidated entities and debt premiums and discounts that are not obligations as of September 30, 2018.



	Payments due by year ending December 31,
	2018		2019		2020		2021		2022		Thereafter		Total
Long-term debt:
Fixed rate (a)	$	7,575	$	—	$	41,000	$	162,627	$	50,982	$	128,167	$	390,351
Variable rate	—		—		—		50,000		100,000		52,000		202,000
Interest	5,811		23,080		21,914		13,619		10,229		7,067		81,720
Total long-term debt	13,386		23,080		62,914		226,246		161,211		187,234		674,071
Operating lease obligations (b)	184		670		575		502		468		1,539		3,938
Grand total	$	13,570	$	23,750	$	63,489	$	226,748	$	161,679	$	188,773	$	678,009


(a)	Includes $150.0 million of variable rate unsecured term loan credit facility debt that has been swapped to a fixed rate as of September 30, 2018.


(b)	Includes leases on corporate office spaces and a long-term ground lease on one underlying retail property.

Off-Balance Sheet Arrangements

We do not have material off-balance sheet arrangements.

Selected Financial Data

The following table shows selected financial data relating to our condensed consolidated financial condition and results of operations required by Item 301 of Regulation S-K. Such selected data should be read in conjunction with "Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations" and the condensed consolidated financial statements and related notes appearing elsewhere in this report (dollar amounts are stated in thousands, except share per share amounts).



	As of
	September 30, 2018		December 31, 2017
Balance Sheet Data:
Total assets	$	2,563,836	$	2,698,604
Debt, net	$	589,994	$	667,861



	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Operating Data:
Total income	$	60,493		$	62,851		$	186,183		$	187,290
Total interest and dividend income	$	340		$	938		$	1,489		$	3,853
Net income	$	8,947		$	21,965		$	66,342		$	57,981
Net income per common share, basic and diluted	$	0.01		$	0.03		$	0.09		$	0.07
Common Stock Distributions:
Distributions declared on common stock	$	13,030		$	13,440		$	40,753		$	40,316
Distributions paid to common stockholders	$	13,863		$	13,440		$	41,164		$	39,917
Distributions declared per weighted average common share	$	0.01		$	0.02		$	0.05		$	0.05
Distributions paid per weighted average common share	$	0.01		$	0.02		$	0.05		$	0.05
Supplemental Non-GAAP Measures:
Funds from operations (a)	$	30,674		$	31,524		$	106,007		$	122,075
Total modified NOI (b)	$	39,169		$	40,793		$	120,764		$	125,280
Cash Flow Data:
Net cash provided by operating activities	$	36,419		$	68,395		$	101,691		$	94,886
Net cash (used in) provided by investing activities	$	48,623		$	(237,825	)	$	71,402		$	(256,683	)
Net cash provided by (used in) financing activities	$	(113,199	)	$	(117,921	)	$	(159,585	)	$	(143,385	)
Other Information:
Weighted average number of common shares outstanding, basic and diluted	768,385,770			773,517,492			772,341,263			773,405,710

(a)

The National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a standard known as FFO, or Funds from Operations. Our FFO, which is based on the NAREIT definition, is net income (loss) in accordance with GAAP excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable property, after adjustments for unconsolidated partnerships and joint ventures in which we hold an interest. We have adopted the NAREIT definition in our calculation of NAREIT FFO Applicable to Common Shares as management considers FFO a widely accepted and appropriate non-GAAP measure of performance for REITs.

In calculating FFO, impairment charges of depreciable real estate assets are added back even though the impairment charge may represent a permanent decline in value due to decreased operating performance of the applicable property. Further, because gains and losses from sales of property are excluded from FFO, it is consistent and appropriate that impairments, which are often early recognition of losses on prospective sales of property, also be excluded. If evidence exists that a loss reflected in the investment of an unconsolidated entity is due to the write-down of depreciable real estate assets, our share of these impairment charges is added back to FFO. The methodology is consistent with the concept of excluding impairment charges of depreciable assets or early recognition of losses on sale of depreciable real estate assets held by the Company.

The Company believes that FFO is a useful measure of properties' operating performance because FFO excludes non-cash items from GAAP net income. FFO is neither intended to be a substitute to "net income" nor a substitute for "cash flows from operating activities", both as determined by GAAP. Other REITs may use alternative methodologies for calculating similarly titled measures, which may not be comparable to the Company's calculation of NAREIT FFO Applicable to Common Shares. FFO is calculated as follows (dollar amounts are stated in thousands):



	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
Net income	$	8,947	$	21,965	$	66,342	$	57,981
Add:
Depreciation and amortization related to investment properties	28,899		23,499		74,707		69,037
Our share of depreciation and amortization related to investment in unconsolidated entities	2,818		3,428		9,021		10,366
Provision for asset impairment, continuing operations	2,713		—		3,510		16,440
Provision for asset impairment recognized in equity in earnings of unconsolidated entities	773		—		2,020		—
Our share of losses from sales reflected in equity in earnings of unconsolidated entities	—		—		2,148		—
Less:
Gains from property sales and transfer of assets, net	13,476		17,368		51,741		31,749
NAREIT FFO Applicable to Common Shares	$	30,674	$	31,524	$	106,007	$	122,075

The table below reflects additional information related to certain items that significantly impact the comparability of our FFO and net income. We believe this table provides useful supplemental information that may facilitate comparisons of our ongoing operating performance between periods, as well as between us and REITs that include similar disclosure. We believe this information will help our investors assess the sustainability of our operating performance exclusive of non-cash revenues or expenses, or the impacts of certain transactions that are not related to the ongoing profitability of our portfolio of properties. Dollar amounts are stated in thousands.



	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Amortization of above and below market leases, net	$	1,160		$	1,674		$	3,990		$	4,638
Amortization of mark to market debt, (premium) and discount, net	(50		)	(51		)	(151		)	(67		)
(Loss) gain on extinguishment of debt, continuing operations	(4		)	(42		)	10,693			840
Loss on extinguishment of debt, discontinued operations	—			2			—			2
Straight-line rental income adjustment	994			293			3,237			(1,418		)
Stock-based compensation expense	1,103			1,616			3,187			4,325

(b)

The Company believes modified NOI provides comparability across periods when evaluating operating performance. Modified NOI reflects the income from operations excluding lease termination income and GAAP rent adjustments (such as straight line rent and above/below market lease amortization). NOI excludes interest expense, depreciation and amortization, general and administrative expenses, and other investment income from corporate investments.

The following table reflects a reconciliation of total modified NOI to the net income attributable to the Company on the condensed consolidated statements of operations and comprehensive income, the most comparable GAAP measure, for the three and nine months ended September 30, 2018 and 2017 (dollar amounts are stated in thousands).



	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Net income	$	8,947		$	21,965		$	66,342		$	57,981
Adjustments to reconcile to same-property modified NOI
Net income from discontinued operations	—			(9,721		)	—			(8,372		)
Income tax expense	43			432			407			943
Realized and unrealized investment gains, net	(13		)	(71		)	(236		)	(30,940		)
Equity in losses (earnings) of unconsolidated entities	43			(648		)	2,795			(1,895		)
Interest expense	5,954			7,588			19,047			22,795
Other (income) expense	(21		)	(2,611		)	(515		)	671
Loss (gain) on extinguishment of debt, net	4			42			(10,693		)	(840		)
Gain on sale and transfer of investment properties, net	(13,476		)	(7,253		)	(51,741		)	(21,634		)
Interest and dividend income	(340		)	(938		)	(1,489		)	(3,853		)
Provision for asset impairment	2,713			—			3,510			16,440
Depreciation and amortization	29,684			23,941			77,768			69,815
General and administrative expenses	9,628			11,051			26,617			33,484
Other fee income	(965		)	(1,018		)	(2,965		)	(3,212		)
Adjustments to modified NOI (1)	(3,032		)	(1,966		)	(8,083		)	(6,103		)
Total modified NOI	$	39,169		$	40,793		$	120,764		$	125,280


(1)	Includes adjustments for termination fee income and GAAP rent adjustments (such as straight-line rent and above/below-market lease amortization).

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt and for acquisitions. We are also subject to market risk associated with our marketable securities investments.

Interest Rate Risk

Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. As of September 30, 2018, our debt included an outstanding variable rate term loan of $150.0 million, which has been swapped to a fixed rate, and a $52.0 million balance outstanding on the revolving line of credit. If market rates of interest on all variable rate debt as of September 30, 2018 permanently increased and decreased by 1%, the annual increase and decrease in interest expense on the floating rate debt and future earnings and cash flows would be $2.0 million.

With regard to our variable rate financing, we assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both outstanding or forecasted debt obligations as well as our potential offsetting hedge positions. The risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on our future cash flows. We continue to assess retaining cash flows that may assist us in maintaining a flexible low debt balance sheet and diminishing the impact of upcoming debt maturities.

We monitor interest rate risk using a variety of techniques, including periodically evaluating fixed interest rate quotes on all variable rate debt and the costs associated with converting the debt to fixed rate debt. In addition, existing fixed and variable rate loans that are scheduled to mature within the next two years are evaluated for possible early refinancing and/or extension due to consideration given to current interest rates. Refer to our Borrowings table in Item 2 of this Quarterly Report for mortgage debt principal amounts, weighted average interest rates and expected maturities by year to evaluate the expected cash flows and sensitivity to interest rate changes.

We may use financial instruments to hedge exposures to changes in interest rates on loans. To the extent we do, we are exposed to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not pose credit risk. We seek to minimize the credit risk in derivative instruments by entering into transactions with what we believe are high-quality counterparties. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates.

As of September 30, 2018, we had $150.0 million of variable rate debt on the 5-year tranche of our unsecured term loan credit facility with interest based on LIBOR that has been swapped to fixed rate debt through two interest rate swaps. The following table summarizes those interest rate swap contracts:



Variable Rate Debt Swapped to Fixed Rate	Effective Date	Termination Date	Bank Pays Variable Rate of	InvenTrust Pays Fixed Rate of	Notional Amount as of September 30, 2018		Fair Value as of
Variable Rate Debt Swapped to Fixed Rate	Effective Date	Termination Date	Bank Pays Variable Rate of	InvenTrust Pays Fixed Rate of	Notional Amount as of September 30, 2018		September 30, 2018		December 31, 2017
5 year - fixed portion	12/10/2015	12/1/2019	1-Month LIBOR + 1.3%	2.6510%	$	90,000	$	1,378	$	1,003
5 year - fixed portion	12/10/2015	12/1/2019	1-Month LIBOR + 1.3%	2.6525%	60,000		917		667
Total 5 year, fixed portion					$	150,000	$	2,295	$	1,670

The gains or losses resulting from marking-to-market our derivatives at the end of each reporting period are recognized as an increase or decrease in interest expense on our condensed consolidated statements of operations and comprehensive income.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), our management, including our principal executive officer and our principal financial officer, evaluated, as of September 30, 2018, the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and Rule 15d-15(e) of the Exchange Act. Based on that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures, as of September 30, 2018, were effective at a reasonable assurance level for the purpose of ensuring that information required to be disclosed by us in this Quarterly Report is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including our principal executive officer and our principal financial officer as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There has been no change in the Company's internal control over financial reporting during the quarter ended September 30, 2018 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

We are subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, we believe, based on currently available information, that the final outcome of such matters will not have a material adverse effect on our financial condition, results of operations, or liquidity.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in response to Item 1A. to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits



EXHIBIT NO.	DESCRIPTION

2.1	Master Modification Agreement, dated as of March 12, 2014, by and among Inland American Real Estate Trust, Inc., Inland American Business Manager & Advisor, Inc., Inland American Lodging Corporation, Inland American Holdco Management LLC, Inland American Retail Management LLC, Inland American Office Management LLC, Inland American Industrial Management LLC and Eagle I Financial Corp. (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on March 13, 2014)
2.2	Asset Acquisition Agreement, dated as of March 12, 2014, by and among Inland American Real Estate Trust, Inc., Inland American Holdco Management LLC, Inland American Retail Management LLC, Inland American Office Management LLC, Inland American Industrial Management LLC and Eagle I Financial Corp. (incorporated by reference to Exhibit 2.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on March 13, 2014)
2.3	Separation and Distribution Agreement by and between Inland American Real Estate Trust, Inc. and Xenia Hotels & Resorts, Inc., dated as of January 20, 2015 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on January 23, 2015)
2.4	Separation and Distribution Agreement by and between InvenTrust Properties Corp. and Highlands REIT, Inc., dated as of April 14, 2016 (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on April 14, 2016)
2.5	Stock Purchase Agreement by and among InvenTrust Properties Corp., University House Communities Group, Inc. and UHC Acquisition Sub LLC, dated as of January 3, 2016 (incorporated by reference to Exhibit 2.1 to the Registrant's Form 10-Q, as filed by the Registrant on May 10, 2016)
2.6	Amendment No. 1 to Stock Purchase Agreement, dated as of May 30, 2016, by and among InvenTrust Properties Corp., University House Communities Group, Inc. and UHC Acquisition Sub LLC (incorporated by reference to Exhibit 2.2 to the Registrant's Form 8-K, as filed by the Registrant on June 27, 2016)
2.7	Amendment No. 2 to Stock Purchase Agreement, dated as of June 20, 2016, by and among InvenTrust Properties Corp., University House Communities Group, Inc. and UHC Acquisition Sub LLC (incorporated by reference to Exhibit 2.3 to the Registrant's Form 8-K, as filed by the Registrant on June 27, 2016)
3.1	Seventh Articles of Amendment and Restatement of InvenTrust Properties Corp., as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on May 14, 2015)
3.2	Amended and Restated Bylaws of InvenTrust Properties Corp., as amended by Amendment No. 1 (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 10-Q, as filed by the Registrant with the SEC on November 12, 2015)
10.1	Employment Offer Letter, dated as of May 10, 2018, by and between InvenTrust Properties Corp. and Ivy Greaner
10.2*	Severance Agreement and General Release, dated as of August 27, 2018, by and between Michael E. Podboy and InvenTrust Properties Corp. (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on August 27, 2018)
31.1*	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from our Quarterly Report on Form 10-Q for the period ended September 30, 2018, filed with the SEC on November 6, 2018, is formatted in Extensible Business Reporting Language ("XBRL"): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income, (iii) Condensed Consolidated Statements of Equity, (iv) Condensed Consolidated Statements of Cash Flows (v) Notes to Condensed Consolidated Financial Statements (tagged as blocks of text).

	* Filed as part of this Quarterly Report on Form 10-Q

SIGNATURES

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

InvenTrust Properties Corp.



Date:	November 6, 2018
By:	/s/ Thomas P. McGuinness

Name:	Thomas P. McGuinness
Title:	President and Chief Executive Officer (Principal Executive Officer)


Date:	November 6, 2018
By:	/s/ Adam M. Jaworski

Name:	Adam M. Jaworski
Title:	Senior Vice President, Chief Accounting Officer and Interim Treasurer (Interim Principal Financial Officer)