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New words:
accurate, accurately, acute, adaptive, administered, admission, advantage, affirmative, agent, Aid, al, albeit, allege, alleging, alleviate, Anytime, arose, Ashland, assign, assignment, assumption, attention, attrition, back, backstop, backstopped, Beall, begun, belonging, Benchmark, bidder, block, box, Burke, caption, captioned, caution, certainty, certification, challenging, claim, climate, compensatory, composition, compromise, confirm, confirmation, confirmed, conform, conformity, contemplated, counsel, Cousinou, critical, debtor, decision, defendant, deficit, degree, delist, delisted, delisting, description, detrimentally, DIP, discharged, discourage, dismissed, disorderly, distraction, District, diversion, Division, Eastern, efficacy, employee, encouraging, entry, equitization, erosion, establish, established, exact, executory, explained, false, force, harm, heightened, holder, HomeCentric, iii, imposition, impossible, inconsistent, incorrect, interfere, intermittently, iv, jointly, Kentucky, knowledge, lawsuit, length, lose, MI, milestone, monetary, morale, motivate, multiple, multiplying, NOL, objection, official, opt, outlined, overriding, past, pendency, pending, perception, Petition, plaintiff, posed, postpetition, precedent, prepetition, presence, priority, pro, procedural, proceed, prosecute, protract, protracted, prove, pursuit, put, putative, quantification, Randy, rata, recapitalization, reconcile, Reconciliation, recover, refund, reinstated, reinstituting, reject, rejected, rejection, relationship, respond, reuse, RSA, safely, segregated, short, Similarly, size, Slipher, smaller, speculative, sponsor, strength, suit, SUPPLEMENTAL, supplemented, tied, toggle, treatment, trustee, unclear, undeclared, undergo, undergoing, unexpired, unimpaired, urge, valuable, voluntarily, voluntary, waived, workplace, written
Removed:
bank, breached, continuously, create, driven, exceeded, implemented, leveraged, reader, routinely, separately, vary
Financial report summary
?Risks
- The RSA is subject to significant conditions and milestones that may be beyond our control and may be difficult for us to satisfy. If the RSA is terminated, our ability to confirm and consummate the Plan could be materially and adversely affected.
- We will be subject to the risks and uncertainties associated with chapter 11 proceedings.
- Operating under the Bankruptcy Court’s protection for a long period of time may harm our business.
- Any plan of reorganization that we may implement will be based in large part upon assumptions and analyses developed by us. If these assumptions and analyses prove to be incorrect, our plan may be unsuccessful in its execution.
- We may not be able to obtain confirmation of the Plan as outlined in the RSA.
- Even if a chapter 11 plan of reorganization is consummated, we may not be able to achieve our stated goals.
- Upon emergence from bankruptcy, our historical financial information may not be indicative of our future financial performance.
- The pursuit of the RSA has consumed, and the chapter 11 proceedings will continue to consume, a substantial portion of the time and attention of our management, which may have an adverse effect on our business and results of operations, and we may face increased levels of employee attrition.
- We depend on the continued presence of key personnel for critical management decisions.
- Upon our emergence from bankruptcy, the composition of our Board may change significantly.
- In certain instances, a chapter 11 case may be converted to a case under chapter 7 of the Bankruptcy Code.
- We may be subject to claims that will not be discharged in the Chapter 11 Cases, which could have a material adverse effect on our financial condition and results of operations.
- Trading in our securities during the pendency of our Chapter 11 Cases poses substantial risks and is highly speculative. It is possible that our equity securities may be canceled, or that holders of such equity will not receive any distribution with respect to, or be able to recover any portion of, their investments. It is also impossible to predict at this time whether any of our other securities will be canceled or if holders of such securities will be able to realize any portion of their investment.
- Our ability to use our net operating loss carryforwards (“NOLs”) may become subject to limitation, or may be reduced or eliminated, in connection with the implementation of a plan of reorganization. The Bankruptcy Court has entered an order that is designed to protect our NOLs until a plan of reorganization is consummated.
- The COVID-19 global pandemic has caused a significant disruption in non-essential retail commerce and may continue to have a material adverse impact upon the Company’s financial condition and results of operations.
Management Discussion
- Rental income increased $37.4 million due to the improving operating conditions as the 2020 period was significantly impacted by rental abatements and rent deferrals instituted in response to the COVID-19 pandemic as well as tenant specific bankruptcy activity throughout 2020. Other income increased $2.3 million which was primarily due to a $1.3 million increase related to fee income recognized in the current period and a $1.0 million increase in property ancillary income.
- Property operating expenses increased $8.5 million, which was directly attributable to increased operating expenses as the properties were operating at full capacity during the 2021 period, whereas the 2020 period was impacted by mandatory closures and capacity limitations in response to the COVID-19 pandemic. General and administrative expenses increased $1.6 million, which was primarily attributable to a change in executive equity incentive and bonus compensation as a result of the Company's restructuring efforts. The $38.1 million of prepetition charges recognized in the 2021 period primarily relate to legal and professional fees incurred prior to the commencement of the Chapter 11 Cases, whereas the 2020 period had no such costs. The $23.8 million impairment charge recorded in the 2020 period related to the write down of the two Tier 2 enclosed retail properties. There was no impairment charge recognized in the 2021 period.
- Interest expense, net, increased $15.1 million, which was primarily attributed to $9.2 million of default interest charges related to our corporate debt and certain mortgage notes payable, a $4.7 million increase due to the draw on the DIP Facility and a change in interest rates on our Revolver and Term Loans (see "Financing & Debt" for capitalized terms) and a $1.2 million increase due to higher amortization of capitalized debt issuance costs related to costs incurred during our third quarter 2020 credit facility modifications which were subsequently written off in connection with the Chapter 11 Cases, as noted below. The $11.2 million impairment on note receivable recorded in the 2020 period was attributed to the discounted payoff of the seller financing provided in conjunction with our other indebtedness (see "Financing and Debt" for further details). The $24.4 million of reorganization items incurred in the 2021 period primarily relate to the write off of debt issuance costs and debt discounts related to our debt obligations that are subject to compromise. No such costs were incurred in the 2020 period.