CBL Properties Reports Results for Third Quarter 2022

Improved Operating Performance Drives Increase in Full-Year NOI Guidance

CBL Properties (NYSE: CBL) announced results for the third quarter ended September 30, 2022. Financial results for the periods from January 1, 2021, through September 30, 2021, are referred to as those of the “Predecessor” period. Financial results for the period from January 1, 2022, through September 30, 2022, are referred to as those of the “Successor” period. Results of operations as reported in the consolidated financial statements for these periods are prepared in accordance with GAAP. A description of each supplemental non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located at the end of this news release.

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months Ended

September 30,

 

 

 

Three Months Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Net loss attributable to common shareholders

 

$

(14,510

)

 

 

$

(41,720

)

Funds from Operations ("FFO")

 

$

49,494

 

 

 

$

74,491

 

FFO, as adjusted (1)

 

$

59,001

 

 

 

$

95,329

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Nine Months Ended

September 30,

 

 

 

Nine Months Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Net loss attributable to common shareholders

 

$

(96,830

)

 

 

$

(77,365

)

Funds from Operations ("FFO")

 

$

115,402

 

 

 

$

215,526

 

FFO, as adjusted (1)

 

$

176,348

 

 

 

$

243,484

 

(1)

For a reconciliation of FFO to FFO, as adjusted, for the periods presented, please refer to the footnotes to the Company’s reconciliation of net loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 10 of this news release.

KEY TAKEAWAYS:

  • Ongoing increases in occupancy and improvement in lease spreads drive increased full-year expectations for NOI and narrows the range for FFO. 2022 FFO, as adjusted now expected in the range of $7.40 - $7.67 per diluted share vs. prior guidance of $7.18 - $7.67 per diluted share. 2022 same-center NOI guidance increased by $8.0 million to a range of $424.0 - $438.0 million.
  • Portfolio occupancy as of September 30, 2022, was 90.5%. Portfolio occupancy was 88.4% as of September 30, 2021. Portfolio occupancy as of September 30, 2022, increased 210-basis points from the prior-year quarter-end and increased 100-basis points from June 30, 2022. Same-center occupancy for malls, lifestyle centers and outlet centers was 89.1% as of September 30, 2022. Same-center occupancy for malls, lifestyle centers and outlet centers was 86.7% as of September 30, 2021. The quarter-over-quarter improvement in same-center occupancy for malls, lifestyle centers and outlet centers was 240-basis points.
  • Third quarter new and renewal comparable space leases for malls, lifestyle centers and outlet centers were signed at 5.2% higher average rents versus the prior leases, marking a notable reversal in trends.
  • Same-center tenant sales per square foot for the trailing 12-months ended September 30, 2022, was $440. Same-center sales tenant per square foot for the trailing 12-months (excluding 2020) ended September 30, 2021, was $431. The year-over-year improvement in tenant sales per square foot was 2.1%.
  • FFO, as adjusted, allocable to Operating Partnership common unitholders, for the three months ended September 30, 2022, was $59.0 million. FFO, as adjusted, allocable to Operating Partnership common unitholders was $95.3 million in the prior-year period. Interest payments on the senior secured notes and credit facility were not required to be made during the third quarter 2021, due to the Company’s bankruptcy filing on November 1, 2020.
  • Same-center NOI for the three and nine months ended September 30, 2022, was $105.5 million and $322.9 million, respectively. Same-center NOI for the three and nine months ended September 30, 2021, was $113.5 million and $317.4 million, respectively. Same-center NOI declined 7% for the three months and increased 1.8% for the nine months ended September 30, 2022, from the prior year periods. NOI growth in the third quarter was impacted by a lower recovery of uncollectable revenues and increased operating expenses, primarily due to wage inflation.
  • As of September 30, 2022, the Company had $335.7 million of unrestricted cash and marketable securities.
  • CBL’s Board of Directors declared a $0.25 per share cash dividend for the second and third quarters of 2022, providing cash returns to shareholders.

"2022 has been an outstanding year for CBL, demonstrating the strength and resiliency of our portfolio and our company," said Stephen D. Lebovitz, CBL's chief executive officer. "We are pleased with our operating results in the third quarter, including 210-basis-point growth in quarter-over-quarter portfolio occupancy and our first quarter of overall positive lease spreads in several years, driving an increase in our full-year expectations for same-center NOI. Additionally, August and September sales growth was positive, a notable reversal of the year-to-date trend.

"Year-to-date, we completed over $1.1 billion in financing activity, significantly de-risking our balance sheet, reducing interest costs and increasing cash flow as we locked in favorable rates. As a result, we benefit from a simplified capital structure primarily comprised of non-recourse loans, a strong cash position, a pool of unencumbered assets and significant free cash flow. We are focused on maximizing shareholder returns and delivering capital to our shareholders through our dividend program. As announced, we expect to provide at least $1.00 per share of annualized regular cash dividends as well as a special dividend to be declared later this year. We are also committed to a highly disciplined approach to capital allocation as we evaluate opportunities to deploy capital at our properties as well as externally. We are in an ideal position to be selective and opportunistic.

"As we approach the holiday season, we are optimistic for a healthy close to 2022. Retailers are well stocked and aggressively promoting their business. Brick-and-mortar stores are a key ingredient to success in today’s retail world. Just a few weeks ago, we celebrated the grand opening of the new Von Maur premier fashion department store at West Towne Mall in Madison, Wisconsin. The community’s embrace of this opening is further evidence of the attraction of new and exciting stores and their power to drive traffic and sales. We are working on a number of value-enhancing projects across our portfolio, further demonstrating our expertise in delivering financially successful projects that create substantial value at the properties and for our company."

NON-GAAP FINANCIAL RESULTS

Net loss attributable to common shareholders for the three months ended September 30, 2022, was $14.5 million. Net loss for the three months ended September 30, 2021, was $41.7 million,

Net loss attributable to common shareholders for the nine months ended September 30, 2022, was $96.8 million. Net loss for the nine months ended September 30, 2021, was $77.4 million,

FFO, as adjusted, allocable to Operating Partnership common unitholders, for the three months ended September 30, 2022, was $59.0 million. FFO, as adjusted, allocable to Operating Partnership common unitholders was $95.3 million, for the three months ended September 30, 2021.

FFO, as adjusted, allocable to Operating Partnership common unitholders, for the nine months ended September 30, 2022, was $176.3 million. FFO, as adjusted, allocable to Operating Partnership common unitholders was $243.5 million, for the nine months ended September 30, 2021.

Same-center Net Operating Income (“NOI”) (1):

 

 

Successor

 

Predecessor

 

 

 

Three Months

Ended

September 30, 2022

 

Three Months

Ended

September 30, 2021

 

Total Revenues

 

$

161,218

 

 

$

164,895

 

Total Expenses

 

$

55,671

 

$

51,361

 

Total portfolio same-center NOI

 

$

105,547

 

 

 

$

113,534

 

 

 

 

 

 

 

 

 

Estimate for uncollectable revenues (recovery)

 

$

(302

)

 

 

$

(3,670

)

(1)

CBL’s definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items such as straight-line rents and reimbursements, write-offs of landlord inducements and net amortization of acquired above and below market leases.

Same-center NOI for the third quarter declined $8.0 million or 7.0% from the prior-year period. The decline was driven by a $3.7 million decline in total revenues and a $4.3 million increase in operating expenses. Revenues were unfavorably impacted by a $3.4 million variance in the total estimate for uncollectable revenues.

 

 

Successor

 

Predecessor

 

 

 

Nine Months Ended

September 30, 2022

 

Nine Months Ended

September 30, 2021

 

Total Revenues

 

$

484,232

 

 

$

470,131

 

Total Expenses

 

$

161,298

 

$

152,770

 

Total portfolio same-center NOI

 

$

322,933

 

 

 

$

317,361

 

 

 

 

 

 

 

 

 

Estimate for uncollectable revenues (recovery)

 

$

(3,719

)

 

 

$

2,828

 

(1)

CBL’s definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items such as straight-line rents and reimbursements, write-offs of landlord inducements and net amortization of acquired above and below market leases.

Same-center NOI for nine months ended September 30, 2022, increased $5.6 million or 1.8% from the prior-year period. The increase was driven by a $14.1 million increase in total revenues, partially offset by an $8.5 million increase in operating expenses. Revenues were favorably impacted by a $6.5 million variance in the total estimate for uncollectable revenues.

PORTFOLIO OPERATIONAL RESULTS

O
ccupancy(1):

 

 

Successor

 

 

Predecessor

 

 

As of

September 30,

 

 

As of

September 30,

 

 

2022

 

 

2021

Total portfolio

 

90.5%

 

 

88.4%

Malls, Lifestyle Centers and Outlet Centers:

 

 

 

 

 

Total malls

 

88.7%

 

 

85.9%

Total lifestyle centers

 

90.6%

 

 

86.8%

Total outlet centers

 

90.9%

 

 

90.1%

Total same-center malls, lifestyle centers and outlet centers

 

89.1%

 

 

86.7%

All Other:

 

 

 

 

 

Total open-air centers

 

94.7%

 

 

94.7%

Total other

 

93.0%

 

 

98.7%

(1)

Occupancy for malls, lifestyle centers and outlet centers represent percentage of in-line gross leasable area under 20,000 square feet occupied. Occupancy for open-air centers represents percentage of gross leasable area occupied.

New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:

% Change in Average Gross Rent Per Square Foot:

 

 

 

 

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

 

2022

 

2022

Stabilized Malls, Lifestyle Centers and Outlet Centers

 

5.2%

 

(6.3)%

New leases

 

85.3%

 

14.3%

Renewal leases

 

(2.3)%

 

(9.1)%

Same-Center Sales Per Square Foot for In-line Tenants 10,000 Square Feet or Less(1):

 

 

Successor

 

 

Predecessor

 

 

 

Sales Per Square

Foot for the Trailing

Twelve Months

Ended September

30,

 

 

Sales Per Square

Foot for the Trailing

Twelve Months

Ended September

30,

 

 

 

2022

 

 

2021 (1)

 

Mall, Lifestyle Center and Outlet Center same-center sales per square foot

 

$

440

 

 

$

431

 

 
(1)

Due to the temporary property closures that occurred during 2020 related to COVID-19, the majority of our tenants did not report sales for the full reporting period. As a result, we are not able to provide a complete measure of sales per square foot for the periods in the year ended December 31, 2020. Sales per square foot for the trailing twelve months ended September 30, 2021, is comprised of tenant sales reported for the periods October 1 through December 31, 2019, and January 1 through September 30, 2021.

Same-center tenant sales per square foot for the trailing twelve months ended September 30, 2022, increased 2.1% as compared with the trailing twelve months ended September 30, 2021 (excludes 2020). Same-center tenant sales per square foot for the third quarter 2022, was $105.41. Same-center tenant sales per square foot for the third quarter 2021, was $107.32. Same-center tenant sales for the third quarter 2022 declined 1.8% as compared with the prior-year period.

DIVIDEND

On November 10, 2022, CBL’s Board of Directors declared a regular quarterly cash dividend for the three months ended December 31, 2022, of $0.25 per share. The dividend, which equates to an annual dividend payment of $1.00 per share, is payable on December 30, 2022, to shareholders of record as of December 1, 2022.

Additionally on November 10th, CBL announced that based on refined tax projections for the twelve months ending December 31, 2022, CBL expects to distribute a special one-time dividend in the range of $65 to $85 million to meet minimum distribution requirements. The exact amount of the special dividend will be determined by CBL’s Board of Directors before year-end and will be subject to the Board’s ongoing review of the Company’s tax projections over the remainder of the year in relation to current projections. Subject to IRS guidelines, the special dividend may be distributed in all cash or in a combination of cash and common stock, as determined at the time by CBL’s Board of Directors.

FINANCING ACTIVITY

Year-to-date, CBL completed more than $1.1 billion in financing activity. Details of financings completed in the third quarter 2022 and subsequent are outlined below.

During the third quarter, CBL completed the modification and extensions of the loan secured by Parkdale Mall in Beaumont, TX ($64.2 million). The loan was extended to March 2026, at the existing interest rate of 5.85%.

In October, CBL finalized the modification of the loan secured by Southpark Mall in Richmond, VA ($54.4 million). The loan was extended through June 2026 at the existing interest rate of 4.85%.

Additionally in October, the modification of the $35.2 million recourse loan secured by The Outlet Shoppes at Gettysburg in Gettysburg, PA was completed. The loan balance was reduced to $21.0 million ($10.5 million at CBL's share), and the loan was converted to non-recourse.

In August, CBL conveyed Asheville Mall in Asheville, NC, to the lender in exchange for cancelation of the $62.1 million loan secured by the property. In September, the foreclosure of Eastgate Mall in Cincinnati, OH, and in October, the foreclosure of Greenbrier Mall in Chesapeake, VA, were completed in satisfaction of an aggregate $91.6 million of loans. CBL is cooperating with a foreclosure or conveyance of Westgate Mall in Spartanburg, SC, ($29.6 million) and Alamance Crossing East in Burlington, NC, ($41.7 million) and anticipates both properties will be placed into receivership imminently. The foreclosures or conveyances of Westgate Mall, Alamance Crossing East and Greenbrier Mall result in a total of approximately $132.9 million of debt that will be removed from CBL’s pro rata share of total debt. The three loans generate an estimated debt yield of approximately 10%. CBL does not recognize earnings or receive cash flow from the properties in receivership.

In October, CBL completed a short-term extension to January 2023 for the loan secured by Cross Creek Mall in Fayetteville, NC ($98.7 million). CBL is in discussions with the lender for a two-year extension/modification of the loan, which it anticipates closing before year-end. CBL is also in discussions with the lender for a potential extension/modification of the loan secured by West County Center located in St. Louis, MO ($81.5 million at CBL’s share).

DISPOSITIONS

During the third quarter 2022, CBL completed the sale of three land parcels for $6.2 million. Year-to-date, CBL has grossed more than $9.4 million from dispositions.

REDEVELOPMENT ACTIVITY

On Saturday, October 15, CBL celebrated the opening of the Von Maur premier fashion department store at West Towne Mall in Madison, Wisconsin. The more than 82,000-square-foot store opened in the former Boston Store location and is one of only two department store openings in the country this year.

Detailed project information is available in CBL’s Financial Supplement for Q3 2022, which can be found in the Invest – Financial Reports section of CBL’s website at cblproperties.com.

OUTLOOK AND GUIDANCE

After incorporating results for the third quarter 2022, CBL is providing updated guidance for 2022 for FFO, as adjusted, in the range of $229.0 million - $237.0 million or $7.40 - $7.67 per diluted share. The assumption for same-center NOI for the year increased by $8.0 million at both the high and low end, to the range of $424.0 million to $438.0 million. The improved expectations are primarily as a result of better than anticipated leasing results and occupancy growth.

Key Guidance Assumptions:

 

 

Low

 

High

2022 FFO, as adjusted

 

$229 million

 

 

$237 million

 

2022 FFO, as adjusted, per share

 

$

7.40

 

 

$

7.67

 

Weighted Average Common Shares Outstanding

 

30.9 million

 

 

30.9 million

 

2022 Same-Center NOI ("SC NOI")

 

$424 million

 

 

$438 million

 

2022 Change in Same-Center NOI

 

 

(3.4

)%

 

 

(0.2

)%

Reconciliation of GAAP Earnings Per Share to 2022 FFO, as Adjusted, Per Share:

 

 

Low

 

High

Expected diluted earnings per common share

 

$

(4.83

)

 

$

(4.56

)

Depreciation and amortization

 

 

9.57

 

 

 

9.57

 

Debt discount accretion, net of noncontrolling interests' share

 

 

5.68

 

 

 

5.68

 

Loss on Impairment

 

 

0.01

 

 

 

0.01

 

Gain on depreciable property

 

 

(0.02

)

 

 

(0.02

)

Adjustment for unconsolidated affiliates with negative investment

 

 

(1.17

)

 

 

(1.17

)

Non-cash default interest expense

 

 

(0.64

)

 

 

(0.64

)

Gain on deconsolidated

 

 

(1.17

)

 

 

(1.17

)

Adjustment for litigation settlement

 

 

(0.02

)

 

 

(0.02

)

Reorganization item, net

 

 

(0.01

)

 

 

(0.01

)

Expected FFO, as adjusted, per diluted, fully converted common share

 

$

7.40

 

 

$

7.67

 

2022 Estimate of Capital Items:

 

 

Low

High

2022 Estimated Deferred Maintenance/Tenant Allowances

 

$35 million

$45 million

2022 Estimated Development/Redevelopment Expenditures

 

$10 million

$20 million

2022 Estimated Principal Amortization (Including Est. Term Loan ECF)

 

$85 million

$105 million

Total Estimate

 

$130 million

$170 million

ABOUT CBL PROPERTIES

Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBL’s owned and managed portfolio is comprised of 94 properties totaling 58.5 million square feet across 22 states, including 56 high-quality enclosed malls, outlet centers and lifestyle retail centers as well as more than 30 open-air centers and other assets. CBL seeks to continuously strengthen its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. For more information visit cblproperties.com.

NON-GAAP FINANCIAL MEASURES

Funds From Operations

FFO is a widely used non-GAAP measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO as defined above by NAREIT less dividends on preferred stock of the Company or distributions on preferred units of the Operating Partnership, as applicable. The Company’s method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors’ understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company’s properties and interest rates, but also by its capital structure.

The Company presents both FFO allocable to Operating Partnership common unitholders and FFO allocable to common shareholders, as it believes that both are useful performance measures. The Company believes FFO allocable to Operating Partnership common unitholders is a useful performance measure since it conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership. The Company believes FFO allocable to its common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income (loss) attributable to its common shareholders.

In the reconciliation of net income (loss) attributable to the Company’s common shareholders to FFO allocable to Operating Partnership common unitholders, located in this earnings release, the Company makes an adjustment to add back noncontrolling interest in income (loss) of its Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders. The Company then applies a percentage to FFO of the Operating Partnership common unitholders to arrive at FFO allocable to its common shareholders. The percentage is computed by taking the weighted-average number of common shares outstanding for the period and dividing it by the sum of the weighted-average number of common shares and the weighted-average number of Operating Partnership units held by noncontrolling interests during the period.

FFO does not represent cash flows from operations as defined by GAAP, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company’s operating performance or to cash flow as a measure of liquidity.

The Company believes that it is important to identify the impact of certain significant items on its FFO measures for a reader to have a complete understanding of the Company’s results of operations. Therefore, the Company has also presented adjusted FFO measures excluding these items from the applicable periods. Please refer to the reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 10 of this news release for a description of these adjustments.

Same-center Net Operating Income

NOI is a supplemental non-GAAP measure of the operating performance of the Company’s shopping centers and other properties. The Company defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).

The Company computes NOI based on the Operating Partnership’s pro rata share of both consolidated and unconsolidated properties. The Company believes that presenting NOI and same-center NOI (described below) based on its Operating Partnership’s pro rata share of both consolidated and unconsolidated properties is useful since the Company conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's calculation of NOI may not be comparable to that of other companies.

Since NOI includes only those revenues and expenses related to the operations of the Company’s shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at the malls and operating costs and the impact of those trends on the Company’s results of operations. The Company’s calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-off of landlord inducement assets in order to enhance the comparability of results from one period to another. A reconciliation of same-center NOI to net income is located at the end of this earnings release.

Pro Rata Share of Debt

The Company presents debt based on the carrying value of its pro rata ownership share (including the carrying value of the Company’s pro rata share of unconsolidated affiliates and excluding noncontrolling interests’ share of consolidated properties) because it believes this provides investors a clearer understanding of the Company’s total debt obligations which affect the Company’s liquidity. A reconciliation of the Company’s pro rata share of debt to the amount of debt on the Company’s condensed consolidated balance sheet is located at the end of this earnings release.

Information included herein contains “forward-looking statements” within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. The reader is directed to the Company’s various filings with the Securities and Exchange Commission, including without limitation the Company’s Annual Report on Form 10-K, and the “Management's Discussion and Analysis of Financial Condition and Results of Operations” included therein, for a discussion of such risks and uncertainties.

Consolidated Statements of Operations

(Unaudited; in thousands, except per share amounts)

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months

Ended

September 30,

 

 

 

Three Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

REVENUES:

 

 

 

 

 

 

 

Rental revenues

 

$

131,642

 

 

 

$

145,539

 

Management, development and leasing fees

 

 

1,783

 

 

 

 

1,780

 

Other

 

 

2,855

 

 

 

 

3,056

 

Total revenues

 

 

136,280

 

 

 

 

150,375

 

EXPENSES:

 

 

 

 

 

 

 

Property operating

 

 

(24,390

)

 

 

 

(23,818

)

Depreciation and amortization

 

 

(61,050

)

 

 

 

(46,479

)

Real estate taxes

 

 

(13,880

)

 

 

 

(13,957

)

Maintenance and repairs

 

 

(10,272

)

 

 

 

(9,482

)

General and administrative

 

 

(14,625

)

 

 

 

(13,502

)

Loss on impairment

 

 

 

 

 

 

(63,160

)

Litigation settlement

 

 

36

 

 

 

 

89

 

Other

 

 

 

 

 

 

(104

)

Total expenses

 

 

(124,181

)

 

 

 

(170,413

)

OTHER INCOME (EXPENSES):

 

 

 

 

 

 

 

Interest and other income

 

 

152

 

 

 

 

510

 

Interest expense

 

 

(37,652

)

 

 

 

(19,039

)

Loss on available-for-sale securities

 

 

(39

)

 

 

 

 

Gain on sales of real estate assets

 

 

3,528

 

 

 

 

8,684

 

Reorganization items, net

 

 

1,220

 

 

 

 

(12,008

)

Income tax (provision) benefit

 

 

(2,422

)

 

 

 

1,234

 

Equity in earnings (losses) of unconsolidated affiliates

 

 

5,702

 

 

 

 

(2,224

)

Total other expenses

 

 

(29,511

)

 

 

 

(22,843

)

Net loss

 

 

(17,412

)

 

 

 

(42,881

)

Net (income) loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

Operating Partnership

 

 

(25

)

 

 

 

1,085

 

Other consolidated subsidiaries

 

 

3,143

 

 

 

 

76

 

Net loss attributable to the Company

 

 

(14,294

)

 

 

 

(41,720

)

Dividends allocable to unvested restricted stock

 

 

(216

)

 

 

 

 

Net loss attributable to common shareholders

 

$

(14,510

)

 

 

$

(41,720

)

Basic and diluted per share data attributable to common shareholders:

 

 

 

 

 

 

 

Net loss attributable to common shareholders

 

$

(0.47

)

 

 

$

(0.21

)

Weighted-average common and potential dilutive common shares outstanding

 

 

30,973

 

 

 

 

196,454

 

Consolidated Statements of Operations

(Unaudited; in thousands, except per share amounts)

 

 

Successor

 

 

Predecessor

 

 

 

Nine Months

Ended

September 30,

 

 

Nine Months

Ended

September 30,

 

 

 

2022

 

 

2021

 

REVENUES:

 

 

 

 

 

 

Rental revenues

 

$

398,806

 

 

$

405,030

 

Management, development and leasing fees

 

 

5,338

 

 

 

4,888

 

Other

 

 

9,256

 

 

 

10,202

 

Total revenues

 

 

413,400

 

 

 

420,120

 

EXPENSES:

 

 

 

 

 

 

Property operating

 

 

(69,046

)

 

 

(65,243

)

Depreciation and amortization

 

 

(194,469

)

 

 

(142,090

)

Real estate taxes

 

 

(42,569

)

 

 

(45,618

)

Maintenance and repairs

 

 

(31,068

)

 

 

(29,047

)

General and administrative

 

 

(51,149

)

 

 

(37,383

)

Loss on impairment

 

 

(252

)

 

 

(120,342

)

Litigation settlement

 

 

182

 

 

 

890

 

Other

 

 

(834

)

 

 

(391

)

Total expenses

 

 

(389,205

)

 

 

(439,224

)

OTHER INCOME (EXPENSES):

 

 

 

 

 

 

Interest and other income

 

 

1,216

 

 

 

2,038

 

Interest expense

 

 

(183,428

)

 

 

(65,468

)

Gain on deconsolidation

 

 

36,250

 

 

 

55,131

 

Loss on available-for-sale securities

 

 

(39

)

 

 

 

Gain on sales of real estate assets

 

 

3,547

 

 

 

8,492

 

Reorganization items, net

 

 

262

 

 

 

(52,014

)

Income tax provision

 

 

(2,751

)

 

 

(222

)

Equity in earnings (losses) of unconsolidated affiliates

 

 

16,308

 

 

 

(9,575

)

Total other expenses

 

 

(128,635

)

 

 

(61,618

)

Net loss

 

 

(104,440

)

 

 

(80,722

)

Net loss attributable to noncontrolling interests in:

 

 

 

 

 

 

Operating Partnership

 

 

34

 

 

 

2,013

 

Other consolidated subsidiaries

 

 

8,002

 

 

 

1,344

 

Net loss attributable to the Company

 

 

(96,404

)

 

 

(77,365

)

Dividends allocable to unvested restricted stock

 

 

(426

)

 

 

 

Net loss attributable to common shareholders

 

$

(96,830

)

 

$

(77,365

)

Basic and diluted per share data attributable to common shareholders:

 

 

 

 

 

 

Net loss attributable to common shareholders

 

$

(3.26

)

 

$

(0.39

)

Weighted-average common and potential dilutive common shares outstanding

 

 

29,725

 

 

 

196,474

 

The Company's reconciliation of net loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows:

(in thousands, except per share data)

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months

Ended

September 30,

 

 

 

Three Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Net loss attributable to common shareholders

 

$

(14,510

)

 

 

$

(41,720

)

Noncontrolling interest in income (loss) of Operating Partnership

 

 

25

 

 

 

 

(1,085

)

Depreciation and amortization expense of:

 

 

 

 

 

 

 

Consolidated properties

 

 

61,050

 

 

 

 

46,479

 

Unconsolidated affiliates

 

 

3,665

 

 

 

 

13,480

 

Non-real estate assets

 

 

(123

)

 

 

 

(416

)

Dividends allocable to unvested restricted stock

 

 

216

 

 

 

 

 

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries

 

 

(829

)

 

 

 

(571

)

Loss on impairment

 

 

 

 

 

 

63,160

 

Gain on depreciable property

 

 

 

 

 

 

(4,836

)

FFO allocable to Operating Partnership common unitholders

 

 

49,494

 

 

 

 

74,491

 

Debt discount accretion, net of noncontrolling interests' share (1)

 

 

25,425

 

 

 

 

 

Adjustment for unconsolidated affiliates with negative investment (2)

 

 

(13,116

)

 

 

 

 

Litigation settlement (3)

 

 

(36

)

 

 

 

(89

)

Non-cash default interest expense (4)

 

 

(1,585

)

 

 

 

8,919

 

Loss on available-for-sale securities

 

 

39

 

 

 

 

 

Reorganization items, net (5)

 

 

(1,220

)

 

 

 

12,008

 

FFO allocable to Operating Partnership common unitholders, as adjusted

 

$

59,001

 

 

 

$

95,329

 

FFO per diluted share

 

$

1.55

 

 

 

$

0.37

 

FFO, as adjusted, per diluted share

 

$

1.85

 

 

 

$

0.47

 

Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted

 

 

31,831

 

 

 

 

201,559

 

(1)

In conjunction with fresh start accounting upon emergence from bankruptcy, the Company recognized debt discounts equal to the difference between the outstanding balance of mortgage notes payable and the estimated fair value of such mortgage notes payable. The debt discounts are accreted over the terms of the respective mortgage notes payable using the effective interest method.

(2)

Represents the Company’s share of the earnings (losses) before depreciation and amortization expense of unconsolidated affiliates where the Company is not recognizing equity in earnings (losses) because its investment in the unconsolidated affiliate is below zero.

(3)

Represents a credit to litigation settlement expense in each of the three-month periods ended September 30, 2022 and 2021 related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit.

(4)

The three months ended September 30, 2022 includes the reversal of default interest expense when waivers or forbearance agreements were obtained. The three months ended September 30, 2021 includes default interest expense related to loans secured by properties that were in default prior to the Company filing bankruptcy, as well as loans secured by properties that remain in default due to the Company filing bankruptcy.

(5)

Represents costs incurred subsequent to the Company filing bankruptcy associated with the Company’s reorganization efforts, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees expensed in accordance with ASC 852.

The Company's reconciliation of net loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows:

(in thousands, except per share data)

 

 

Successor

 

 

 

Predecessor

 

 

 

Nine Months

Ended

September 30,

 

 

 

Nine Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Net loss attributable to common shareholders

 

$

(96,830

)

 

 

$

(77,365

)

Noncontrolling interest in loss of Operating Partnership

 

 

(34

)

 

 

 

(2,013

)

Depreciation and amortization expense of:

 

 

 

 

 

 

 

Consolidated properties

 

 

194,469

 

 

 

 

142,090

 

Unconsolidated affiliates

 

 

21,004

 

 

 

 

40,466

 

Non-real estate assets

 

 

(524

)

 

 

 

(1,448

)

Dividends allocable to unvested restricted stock

 

 

426

 

 

 

 

 

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries

 

 

(2,666

)

 

 

 

(1,710

)

Loss on impairment, net of taxes

 

 

186

 

 

 

 

120,342

 

Gain on depreciable property

 

 

(629

)

 

 

 

(4,836

)

FFO allocable to Operating Partnership common unitholders

 

 

115,402

 

 

 

 

215,526

 

Debt discount accretion, net of noncontrolling interests' share (1)

 

 

153,924

 

 

 

 

 

Adjustment for unconsolidated affiliates with negative investment (2)

 

 

(36,123

)

 

 

 

 

Senior secured notes fair value adjustment (3)

 

 

(395

)

 

 

 

 

Litigation settlement (4)

 

 

(182

)

 

 

 

(890

)

Non-cash default interest expense (5)

 

 

(19,805

)

 

 

 

31,965

 

Gain on deconsolidation (6)

 

 

(36,250

)

 

 

 

(55,131

)

Loss on available-for-sale securities

 

 

39

 

 

 

 

 

Reorganization items, net (7)

 

 

(262

)

 

 

 

52,014

 

FFO allocable to Operating Partnership common unitholders, as adjusted

 

$

176,348

 

 

 

$

243,484

 

FFO per diluted share

 

$

3.78

 

 

 

$

1.07

 

FFO, as adjusted, per diluted share

 

$

5.77

 

 

 

$

1.21

 

Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted

 

 

30,568

 

 

 

 

201,587

 

(1)

In conjunction with fresh start accounting upon emergence from bankruptcy, the Company recognized debt discounts equal to the difference between the outstanding balance of mortgage notes payable and the estimated fair value of such mortgage notes payable. The debt discounts are accreted over the terms of the respective mortgage notes payable using the effective interest method.

(2)

Represents the Company’s share of the earnings (losses) before depreciation and amortization expense of unconsolidated affiliates where the Company is not recognizing equity in earnings (losses) because its investment in the unconsolidated affiliate is below zero.

(3)

Represents the fair value adjustment recorded on the senior secured notes as interest expense.

(4)

Represents a credit to litigation settlement expense in each of the nine-month periods ended September 30, 2022 and 2021 related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit.

(5)

The nine months ended September 30, 2022 includes the reversal of default interest expense when waivers or forbearance agreements were obtained. The nine months ended September 30, 2021 includes default interest expense related to loans secured by properties that were in default prior to the Company filing bankruptcy, as well as loans secured by properties that remain in default due to the Company filing bankruptcy.

(6)

For the nine months ended September 30, 2022, the Successor Company deconsolidated Greenbrier Mall due to a loss of control when the property was placed into receivership in connection with the foreclosure process. For the nine months ended September 30, 2021, the Predecessor Company deconsolidated Asheville Mall and Park Plaza due to a loss of control when the properties were placed into receivership in connection with the foreclosure process.

(7)

Represents costs incurred subsequent to the Company filing bankruptcy associated with the Company’s reorganization efforts, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees expensed in accordance with ASC 852.

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months

Ended

September 30,

 

 

 

Three Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Diluted EPS attributable to common shareholders

 

$

(0.47

)

 

 

$

(0.21

)

Add amounts per share included in FFO:

 

 

 

 

 

 

 

Unvested restricted stock

 

 

0.02

 

 

 

 

 

Eliminate amounts per share excluded from FFO:

 

 

 

 

 

 

 

Depreciation and amortization expense, including amounts from

consolidated properties, unconsolidated affiliates, non-real estate

assets and excluding amounts allocated to noncontrolling

interests

 

 

2.00

 

 

 

 

0.29

 

Loss on impairment

 

 

 

 

 

 

0.31

 

Gain on depreciable property

 

 

 

 

 

 

(0.02

)

FFO per diluted share

 

$

1.55

 

 

 

$

0.37

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Nine Months

Ended

September 30,

 

 

 

Nine Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Diluted EPS attributable to common shareholders

 

$

(3.26

)

 

 

$

(0.39

)

Add amounts per share included in FFO:

 

 

 

 

 

 

 

Unvested restricted stock

 

 

0.09

 

 

 

 

 

Eliminate amounts per share excluded from FFO:

 

 

 

 

 

 

 

Depreciation and amortization expense, including amounts from

consolidated properties, unconsolidated affiliates, non-real estate

assets and excluding amounts allocated to noncontrolling

interests

 

 

6.96

 

 

 

 

0.89

 

Loss on impairment, net of taxes

 

 

0.01

 

 

 

 

0.59

 

Gain on depreciable property

 

 

(0.02

)

 

 

 

(0.02

)

FFO per diluted share

 

$

3.78

 

 

 

$

1.07

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months

Ended

September 30,

 

 

 

Three Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

SUPPLEMENTAL FFO INFORMATION:

 

 

 

 

 

 

 

Lease termination fees

 

$

1,572

 

 

 

$

2,051

 

 

 

 

 

 

 

 

 

Straight-line rental income adjustment

 

$

2,058

 

 

 

$

2,711

 

 

 

 

 

 

 

 

 

Gain on outparcel sales, net of taxes

 

$

3,561

 

 

 

$

3,864

 

 

 

 

 

 

 

 

 

Net amortization of acquired above- and below-market leases

 

$

(5,438

)

 

 

$

60

 

 

 

 

 

 

 

 

 

Income tax benefit (provision)

 

$

(2,422

)

 

 

$

1,234

 

 

 

 

 

 

 

 

 

Abandoned projects expense

 

$

 

 

 

$

(104

)

 

 

 

 

 

 

 

 

Interest capitalized

 

$

156

 

 

 

$

 

 

 

 

 

 

 

 

 

Estimate of uncollectable revenues

 

$

(368

)

 

 

$

4,348

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Nine Months

Ended

September 30,

 

 

 

Nine Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

SUPPLEMENTAL FFO INFORMATION:

 

 

 

 

 

 

 

Lease termination fees

 

$

4,020

 

 

 

$

3,329

 

 

 

 

 

 

 

 

 

Straight-line rental income adjustment

 

$

9,400

 

 

 

$

(1,146

)

 

 

 

 

 

 

 

 

Gain on outparcel sales, net of taxes

 

$

3,580

 

 

 

$

3,655

 

 

 

 

 

 

 

 

 

Net amortization of acquired above- and below-market leases

 

$

(16,487

)

 

 

$

185

 

 

 

 

 

 

 

 

 

Income tax provision

 

$

(2,751

)

 

 

$

(222

)

 

 

 

 

 

 

 

 

Abandoned projects expense

 

$

(834

)

 

 

$

(391

)

 

 

 

 

 

 

 

 

Interest capitalized

 

$

531

 

 

 

$

32

 

 

 

 

 

 

 

 

 

Estimate of uncollectable revenues

 

$

3,850

 

 

 

$

(6,561

)

 

 

 

 

 

 

 

 

 

 

Successor

 

 

 

Predecessor

 

 

 

As of September

30,

 

 

 

As of September

30,

 

 

 

2022

 

 

 

2021

 

Straight-line rent receivable

 

$

12,343

 

 

 

$

50,609

 

Same-center Net Operating Income

(Dollars in thousands)

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months

Ended

September 30,

 

 

 

Three Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Net loss

 

$

(17,412

)

 

 

$

(42,881

)

Adjustments:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

61,050

 

 

 

 

46,479

 

Depreciation and amortization from unconsolidated affiliates

 

 

3,665

 

 

 

 

13,480

 

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries

 

 

(829

)

 

 

 

(571

)

Interest expense

 

 

37,652

 

 

 

 

19,039

 

Interest expense from unconsolidated affiliates

 

 

25,297

 

 

 

 

10,647

 

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

 

 

(2,688

)

 

 

 

(663

)

Abandoned projects expense

 

 

 

 

 

 

104

 

Gain on sales of real estate assets

 

 

(3,528

)

 

 

 

(8,684

)

Gain on sales of real estate assets of unconsolidated affiliates

 

 

(33

)

 

 

 

(70

)

Adjustment for unconsolidated affiliates with negative investment

 

 

(13,116

)

 

 

 

 

Loss on available-for-sale securities

 

 

39

 

 

 

 

 

Loss on impairment

 

 

 

 

 

 

63,160

 

Litigation settlement

 

 

(36

)

 

 

 

(89

)

Reorganization items, net

 

 

(1,220

)

 

 

 

12,008

 

Income tax provision (benefit)

 

 

2,422

 

 

 

 

(1,234

)

Lease termination fees

 

 

(1,572

)

 

 

 

(2,051

)

Straight-line rent and above- and below-market lease amortization

 

 

3,380

 

 

 

 

(2,771

)

Net loss attributable to noncontrolling interests in other consolidated subsidiaries

 

 

3,143

 

 

 

 

76

 

General and administrative expenses

 

 

14,625

 

 

 

 

13,502

 

Management fees and non-property level revenues

 

 

(683

)

 

 

 

(1,344

)

Operating Partnership's share of property NOI

 

 

110,156

 

 

 

 

118,137

 

Non-comparable NOI

 

 

(4,609

)

 

 

 

(4,603

)

Total same-center NOI (1)(2)

 

$

105,547

 

 

 

$

113,534

 

(1)

CBL defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of September 30, 2022, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ending September 30, 2022. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are properties which are under major redevelopment or being considered for repositioning, where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender.

(2)

Same-center NOI of the successor company was $105,547 for the three months ended September 30, 2022. Same-center NOI of the predecessor company was $113,534 for the three months ended September 30, 2021. Same-center NOI of the successor company was 7.0% lower for the three months ended September 30, 2022.

Same-center Net Operating Income

(Dollars in thousands)

 

 

Successor

 

 

 

Predecessor

 

 

 

Nine Months

Ended

September 30,

 

 

 

Nine Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Net loss

 

$

(104,440

)

 

 

$

(80,722

)

Adjustments:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

194,469

 

 

 

 

142,090

 

Depreciation and amortization from unconsolidated affiliates

 

 

21,004

 

 

 

 

40,466

 

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries

 

 

(2,666

)

 

 

 

(1,710

)

Interest expense

 

 

183,428

 

 

 

 

65,468

 

Interest expense from unconsolidated affiliates

 

 

65,454

 

 

 

 

31,008

 

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

 

 

(7,783

)

 

 

 

(2,508

)

Abandoned projects expense

 

 

834

 

 

 

 

391

 

Gain on sales of real estate assets

 

 

(3,547

)

 

 

 

(8,492

)

Gain on sales of real estate assets of unconsolidated affiliates

 

 

(662

)

 

 

 

(70

)

Adjustment for unconsolidated affiliates with negative investment

 

 

(36,123

)

 

 

 

 

Gain on deconsolidation

 

 

(36,250

)

 

 

 

(55,131

)

Loss on available-for-sale securities

 

 

39

 

 

 

 

 

Loss on impairment

 

 

252

 

 

 

 

120,342

 

Litigation settlement

 

 

(182

)

 

 

 

(890

)

Reorganization items, net

 

 

(262

)

 

 

 

52,014

 

Income tax provision

 

 

2,751

 

 

 

 

222

 

Lease termination fees

 

 

(4,020

)

 

 

 

(3,329

)

Straight-line rent and above- and below-market lease amortization

 

 

7,087

 

 

 

 

961

 

Net loss attributable to noncontrolling interests in other consolidated subsidiaries

 

 

8,002

 

 

 

 

1,344

 

General and administrative expenses

 

 

51,149

 

 

 

 

37,383

 

Management fees and non-property level revenues

 

 

(1,798

)

 

 

 

(7,135

)

Operating Partnership's share of property NOI

 

 

336,736

 

 

 

 

331,702

 

Non-comparable NOI

 

 

(13,803

)

 

 

 

(14,341

)

Total same-center NOI (1)(2)

 

$

322,933

 

 

 

$

317,361

 

(1)

CBL defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of September 30, 2022, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ending September 30, 2022. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are properties which are under major redevelopment or being considered for repositioning, where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender.

(2)

Same-center NOI of the successor company was $322,933 for the nine months ended September 30, 2022. Same-center NOI of the predecessor company was $317,361 for the nine months ended September 30, 2021. Same-center NOI of the successor company was 1.8% higher for the nine months ended September 30, 2022.

Same-center Net Operating Income

(Continued)

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months

Ended

September 30,

 

 

 

Three Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Malls

 

$

73,562

 

 

 

$

81,716

 

Outlet centers

 

 

4,604

 

 

 

 

4,189

 

Lifestyle centers

 

 

8,695

 

 

 

 

8,732

 

Open-air centers

 

 

13,534

 

 

 

 

13,369

 

Outparcels and other

 

 

5,152

 

 

 

 

5,528

 

Total same-center NOI (1)

 

$

105,547

 

 

 

$

113,534

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Nine Months

Ended

September 30,

 

 

 

Nine Months

Ended

September 30,

 

 

 

2022

 

 

 

2021

 

Malls

 

$

226,968

 

 

 

$

225,802

 

Outlet centers

 

 

13,450

 

 

 

 

12,180

 

Lifestyle centers

 

 

26,525

 

 

 

 

25,259

 

Open-air centers

 

 

39,793

 

 

 

 

37,931

 

Outparcels and other

 

 

16,197

 

 

 

 

16,189

 

Total same-center NOI (1)

 

$

322,933

 

 

 

$

317,361

 

(1)

CBL defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of September 30, 2022, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ending September 30, 2022. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are properties which are under major redevelopment or being considered for repositioning, where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender.

Company's Share of Consolidated and Unconsolidated Debt

(Dollars in thousands)

 

 

As of September 30, 2022 (Successor)

 

 

 

Fixed

Rate

 

 

Variable

Rate

 

 

Total per

Debt

Schedule

 

 

Unamortized

Deferred

Financing

Costs

 

 

Unamortized

Debt

Discounts (1)

 

 

Total

 

Consolidated debt

 

$

1,049,307

 

 

$

1,074,839

 

 

$

2,124,146

 

 

$

(16,621

)

 

$

(90,821

)

 

$

2,016,704

 

Noncontrolling interests' share of consolidated debt

 

 

(32,594

)

 

 

(13,493

)

 

 

(46,087

)

 

 

85

 

 

 

13,548

 

 

 

(32,454

)

Company's share of unconsolidated affiliates' debt

 

 

624,670

 

 

 

73,356

 

 

 

698,026

 

 

 

(2,294

)

 

 

 

 

 

695,732

 

Other debt (2)

 

 

61,647

 

 

 

 

 

 

61,647

 

 

 

 

 

 

 

 

 

61,647

 

Company's share of consolidated, unconsolidated and other debt

 

$

1,703,030

 

 

$

1,134,702

 

 

$

2,837,732

 

 

$

(18,830

)

 

$

(77,273

)

 

$

2,741,629

 

Weighted-average interest rate

 

 

4.85

%

 

 

5.53

%

 

 

5.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2021 (Predecessor)

 

 

 

Fixed

Rate

 

 

Variable

Rate

 

 

Total per

Debt

Schedule

 

 

Unamortized

Deferred

Financing

Costs

 

 

Unamortized

Debt

Discounts (1)

 

 

Total

 

Consolidated debt (3)

 

$

2,330,175

 

 

$

1,181,787

 

 

$

3,511,962

 

 

$

(3,202

)

 

$

 

 

$

3,508,760

 

Noncontrolling interests' share of consolidated debt

 

 

(29,563

)

 

 

 

 

 

(29,563

)

 

 

225

 

 

 

 

 

 

(29,338

)

Company's share of unconsolidated affiliates' debt

 

 

615,166

 

 

 

127,337

 

 

 

742,503

 

 

 

(2,404

)

 

 

 

 

 

740,099

 

Other debt (2)

 

 

138,926

 

 

 

 

 

 

138,926

 

 

 

 

 

 

 

 

 

138,926

 

Company's share of consolidated and unconsolidated debt

 

$

3,054,704

 

 

$

1,309,124

 

 

$

4,363,828

 

 

$

(5,381

)

 

$

 

 

$

4,358,447

 

Weighted-average interest rate

 

 

5.04

%

 

 

8.52

%(4)

 

6.09

%

 

 

 

 

 

 

 

 

 

(1)

In conjunction with fresh start accounting, the Company estimated the fair value of its mortgage notes with the assistance of a third-party valuation advisor. This resulted in recognizing a debt discount on the Effective Date. The debt discount is accreted over the term of the respective debt using the effective interest method.

(2)

Represents the outstanding loan balance for properties that were deconsolidated due to a loss of control when the properties were placed into receivership in connection with the foreclosure process.

(3)

Includes $2,489,676 of liabilities subject to compromise.

(4)

The administrative agent informed the Company that interest would accrue on all outstanding obligations at the post-default rate, which was equal to the rate that otherwise would be in effect plus 5.0%. The post-default interest rate on September 30, 2021 was 9.50%.

Consolidated Balance Sheets

(Unaudited; in thousands, except share data)

 

 

September 30,

2022

 

 

December 31,

2021

 

ASSETS

 

 

 

 

 

 

Real estate assets:

 

 

 

 

 

 

Land

 

$

598,201

 

 

$

599,283

 

Buildings and improvements

 

 

1,188,200

 

 

 

1,173,106

 

 

 

 

1,786,401

 

 

 

1,772,389

 

Accumulated depreciation

 

 

(107,462

)

 

 

(19,939

)

 

 

 

1,678,939

 

 

 

1,752,450

 

Developments in progress

 

 

5,343

 

 

 

16,665

 

Net investment in real estate assets

 

 

1,684,282

 

 

 

1,769,115

 

Cash and cash equivalents

 

 

85,754

 

 

 

169,554

 

Available-for-sale securities - at fair value (amortized cost of $249,638 and $149,999 as of September 30, 2022 and December 31, 2021, respectively)

 

 

249,912

 

 

 

149,996

 

Receivables:

 

 

 

 

 

 

Tenant

 

 

32,290

 

 

 

25,190

 

Other

 

 

3,441

 

 

 

4,793

 

Investments in unconsolidated affiliates

 

 

81,805

 

 

 

103,655

 

In-place leases, net

 

 

277,443

 

 

 

384,705

 

Above market leases, net

 

 

186,652

 

 

 

234,286

 

Intangible lease assets and other assets

 

 

125,248

 

 

 

104,685

 

 

 

$

2,726,827

 

 

$

2,945,979

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Mortgage and other indebtedness, net

 

$

2,016,704

 

 

$

1,813,209

 

10% senior secured notes - at fair value (carrying amount of $395,000 as of December 31, 2021)

 

 

 

 

 

395,395

 

Below market leases, net

 

 

121,741

 

 

 

151,871

 

Accounts payable and accrued liabilities

 

 

149,007

 

 

 

184,404

 

Total liabilities

 

 

2,287,452

 

 

 

2,544,879

 

Shareholders' equity:

 

 

 

 

 

 

Common stock, $.001 par value, 200,000,000 shares authorized, 31,834,178 and 20,774,716 issued and outstanding in 2022 and 2021, respectively

 

 

32

 

 

 

21

 

Additional paid-in capital

 

 

708,768

 

 

 

547,726

 

Accumulated other comprehensive income (loss)

 

 

274

 

 

 

(3

)

Accumulated deficit

 

 

(263,862

)

 

 

(151,545

)

Total shareholders' equity

 

 

445,212

 

 

 

396,199

 

Noncontrolling interests

 

 

(5,837

)

 

 

4,901

 

Total equity

 

 

439,375

 

 

 

401,100

 

 

 

$

2,726,827

 

 

$

2,945,979

 

 

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