CBL & ASSOCIATES PROPERTIES INC 10-Q

ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and accompanying notes that are included in this Form 10-Q. Capitalized terms used, but not defined, in this Management’s Discussion and Analysis of Financial Condition and Results of Operations have the same meanings as defined in the notes to the condensed consolidated financial statements. In this discussion, the terms “we,” ”us” and “our” refer to the Company or the Company and the Operating Partnership collectively, as the text requires. Certain statements made in this section or elsewhere in this report may be deemed “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements of historical fact should be considered to be forward-looking statements. In many cases, these forward-looking statements may be identified by the use of words such as “will,” “may,” “should,” “could,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “projects,” “goals,” “objectives,” “targets,” “predicts,” “plans,” “seeks,” and variations of these words and similar expressions. Any forward-looking statement speaks only as of the date on which it is made and is qualified in its entirety by reference to the factors discussed throughout this report. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance or results and we can give no assurance that these expectations will be attained. It is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of known and unknown risks and uncertainties. Currently, a significant factor that could cause actual outcomes to differ materially from our forward-looking statements is the impact of the risks and uncertainties associated with the Chapter 11 process on our operations and ability to develop and execute our business plans, and to satisfy the conditions and milestones applicable under the third amended Chapter 11 plan of reorganization (with technical modifications) (the “Plan”) that was confirmed by the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) on August 11, 2021. Another significant factor that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effect of the COVID-19 pandemic, and state and/or local regulatory responses to control it, on our financial condition, operating results and cash flows, our tenants and their customers, the real estate market in which we operate, the global economy and the financial markets. The extent to which the COVID-19 pandemic impacts us and our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the direct and indirect economic effects of the pandemic and containment measures, and potential changes in consumer behavior, among others. In addition to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020, such known risks and uncertainties, many of which may be influenced by the COVID-19 pandemic, include, without limitation: • general industry, economic and business conditions; • the impact of the risks and uncertainties associated with the Chapter 11 process on our operations and ability to develop and execute our business plans, and to satisfy the conditions and milestones applicable under the Plan, for the duration of the Chapter 11 Cases; • interest rate fluctuations; • costs and availability of capital, including debt, and capital requirements; • the ongoing suspension of trading, and potential delisting, of our common stock and depositary shares representing interests in our Series D Preferred Stock and Series E Preferred Stock, from the NYSE, which has resulted in our common stock and the depositary shares representing interests in our Series D Preferred Stock and Series E Preferred Stock currently trading on the OTC Markets, operated by the OTC Markets Group, Inc.; • costs and availability of real estate; • inability to consummate acquisition opportunities and other risks associated with acquisitions; • competition from other companies and retail formats; • changes in retail demand and rental rates in our markets; • shifts in customer demands including the impact of online shopping; • tenant bankruptcies or store closings; • changes in vacancy rates at our Properties; • changes in operating expenses; 39 Table of Contents • changes in applicable laws, rules and regulations; • disposition of real property; • uncertainty and economic impact of pandemics, epidemics or other public health emergencies or fear of such events, such as the recent COVID-19 pandemic; • cyber-attacks or acts of cyber-terrorism; • the withdrawal that occurred during 2020 of the credit ratings of the Operating Partnership's senior unsecured long-term indebtedness; • the ability to obtain suitable equity and/or debt financing and the continued availability of financing, in the amounts and on the terms necessary to support our future refinancing requirements and business; and • other risks referenced from time to time in filings with the SEC and those factors listed or incorporated by reference into this report. This list of risks and uncertainties is only a summary and is not intended to be exhaustive. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information. Executive Overview We are a self-managed, self-administered, fully integrated REIT that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers, office and other properties. See Note 1 to the condensed consolidated financial statements for information on our property interests as of June 30, 2021. We have elected to be taxed as a REIT for federal income tax purposes. On March 11, 2020, the World Health Organization classified COVID-19 as a pandemic. Due to the extraordinary governmental actions taken to contain COVID-19, we are unable to predict the full extent of the pandemic’s impact on our results of operations for 2021. As a result, we did not issue full-year 2021 guidance. In response to COVID-19, we have implemented strict procedures and guidelines for our employees, tenants and property visitors based on CDC and other health agency recommendations. Our properties continue to update these policies and procedures, following any new mandates and regulations, as required. The safety and health of our customers, employees and tenants remains a top priority. Our financial and operating results for the second quarter reflect the ongoing impact of COVID-19. While all properties are open, many state and local markets continue to impose occupancy and other restrictions, as well as imposing new restrictions as the spread of COVID-19 variants increases. These additional restrictions may have the effect of restricting traffic and sales for our tenants and may put additional pressure on our tenants’ financial health. We have worked with our tenants to enhance customer reach despite the restrictions, including offering curbside, delivery and opening buy-online-pick-up-instore locations. We have experienced encouraging improvements in sales and traffic at our centers as vaccination rates increased and government restrictions were lessened, but uncertainty remains as variants of the virus cause further outbreaks. For the six months ended June 30, 2021, same-center sales increased more than 17% as compared with the six months ended June 30, 2019, which, if sustained, bodes well for future leasing efforts. Percentage rents and short-term rents increased significantly during the quarter as a result of the sales rebound. However, revenues for the quarter continue to be impacted by declines in occupancy and rental rates from tenants that filed for bankruptcy or are struggling financially. The pandemic accelerated a number of tenant bankruptcies, resulting in a heightened level of store closures and lost rent in 2020, the impact of which has carried forward into 2021. The mandated property closures in 2020 resulted in nearly all our tenants closing for a period of time and/or shortening operating hours. As a result, we experienced an increased level of requests for rent deferrals and abatements, as well as defaults on rent obligations. While, in general, we believe that tenants have a clear contractual obligation to pay rent, we have been working with our tenants to address rent deferral and abatement requests. We have granted rent deferrals of $40.5 million since the COVID-19 pandemic began. We also granted rent abatements of approximately $4.7 million and $10.7 million during the three and six months ended June 30, 2021, respectively. As discussed under Voluntary Reorganization under Chapter 11 below, the Debtors commenced the filing of the Chapter 11 Cases. The filing of the Chapter 11 Cases constituted an event of default that resulted in certain monetary obligations becoming immediately due and payable with respect to the secured credit facility and the senior unsecured notes. The filing of the Chapter 11 Cases also constituted an event of default with respect to certain property-level debt of the Operating Partnership’s subsidiaries, which may result in acceleration of the outstanding principal and other sums due. See Note 2 and Liquidity and Capital Resources for additional information. 40 Table of Contents We had a net loss for the three and six months ended June 30, 2021 of $9.6 million and $37.8 million, respectively, as compared to a net loss for the three and six months ended June 30, 2020 of $72.8 million and $212.1 million, respectively. We recorded a net loss attributable to common shareholders for the three and six months ended June 30, 2021 of $8.9 million and $35.6 million, respectively, as compared to a net loss attributable to common shareholders for the three and six months ended June 30, 2020 of $81.5 million and $215.3 million, respectively. In addition to the ongoing impact of the COVID-19 pandemic, significant items that affected the comparability between the three and six-month periods include: • Loss on impairment for the three and six months ended June 30, 2021 that is $13.3 million and $89.7 million lower, respectively; • Gain on deconsolidation of $55.1 million for the six months ended June 30, 2021; • Interest expense for the three and six months ended June 30, 2021 that is $30.3 million and $53.2 million lower, respectively; • Reorganization items for the three and six months ended June 30, 2021 of $17.1 million and $40.0 million, respectively; • Income tax provision for the three and six months ended June 30, 2021 that is $15.4 million and $15.2 million lower, respectively. Our focus is on continuing to execute our strategy to transform our properties into suburban town centers, primarily through the re-tenanting of former anchor locations as well as diversification of in-line tenancy. This operational strategy is also supported by our balance sheet strategy focused on reducing overall debt, extending our debt maturity schedule and lowering our overall cost of borrowings to limit maturity risk, improve net cash flow and enhance enterprise value. As discussed further below under Voluntary Reorganization under Chapter 11 , we are pursuing a plan to recapitalize the Company, including restructuring portions of its debt, through the Chapter 11 Cases. While the industry and our Company continue to face challenges, some of which may not be within our control, we believe that the strategies in place to redevelop our Properties and diversify our tenant mix will contribute to stabilization of our portfolio and revenues in future years. Same-center NOI and FFO are non-GAAP measures. For a description of same-center NOI, a reconciliation from net income (loss) to same-center NOI, and an explanation of why we believe this is a useful performance measure, see Non-GAAP Measure - Same-center Net Operating Income in Results of Operations . For a description of FFO, a reconciliation from net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders, and an explanation of why we believe this is a useful performance measure, see Non-GAAP Measure - Funds from Operations . Voluntary Reorganization under Chapter 11 Beginning on November 1, 2020 (the “Commencement Date”), CBL & Associates Properties, Inc. together with its majority owned subsidiary, CBL & Associates Limited Partnership, together with certain of its direct and indirect subsidiaries (collectively, the “Debtors”) , commenced voluntary chapter 11 cases (the “Chapter 11 Cases”) by filing voluntary petitions for reorganization under chapter 11 of title 11 (“Chapter 11”) of the United States Code (the “Bankruptcy Code”) with the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Debtors are authorized to continue to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. Pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, the Debtors’ Chapter 11 Cases are being jointly administered for procedural purposes only under the caption In re CBL & Associates Properties, Inc., et al. , Case No. 20-35226 . Documents filed on the docket of and other information related to the Chapter 11 Cases are available free of charge online at https://dm.epiq11.com/case/cblproperties/dockets . The filing of the Chapter 11 Cases constituted an event of default that results in the automatic acceleration of certain monetary obligations to be immediately due and payable with respect to the secured credit facility and the senior unsecured notes. On November 2, 2020, we filed an adversary proceeding in the Bankruptcy Court seeking among other things, a temporary restraining order (the “Order”) and for a preliminary injunction to enjoin, pending a determination of the parties’ rights, the administrative agent or any of its officers, agents, servants, attorneys and successors from taking any action to exercise any and all remedies under the terms of the secured credit facility or other agreements as a result of the events of default asserted by the administrative agent, or any other right or remedy that would otherwise accompany the occurrence of an event of default, including without limitation, any rights of acceleration under the terms of the secured credit facility, rights flowing from the notice of acceleration, rights exercised pursuant to the Notice of Exercise or any other rights or remedies properly exercisable solely upon an actual or determined event of default. On November 2, 2020, the Bankruptcy Court granted the Order, and the Bankruptcy Court took up the other pending claims during the adversarial proceeding, which has now been stayed pending the confirmation our plan, discussed below. Following the Commencement Date, the Bankruptcy Court entered certain interim and final orders facilitating the Debtors’ operational transition into Chapter 11. These orders authorized the Debtors to, among other things, pay certain prepetition employee expenses and benefits, use their existing cash management system, maintain and administer 41 Table of Contents customer programs, pay certain critical service providers, honor insurance-related obligations, and pay certain prepetition taxes and related fees on a final basis. After engaging in negotiations in a Bankruptcy Court-ordered mediation, on March 21, 2021 (the “Agreement Effective Date”), we entered into the First Amended and Restated Restructuring Support Agreement (the “Amended RSA”), with the Consenting Noteholders in excess of 69% (including joinders) of the aggregate principal amount of the Notes and certain lenders party to our secured credit facility who hold in the aggregate in excess of 96% (including joinders) of the aggregate outstanding principal amount of debt under the secured credit facility (the “Consenting Bank Lenders” and together with the Consenting Noteholders, the “Consenting Stakeholders”). The Amended RSA amends and restates the Original RSA and sets forth, subject to certain conditions, the commitments to and obligations of, on the one hand, the Company, and on the other hand, the Consenting Noteholders and Consenting Bank Lenders, in connection with the restructuring transactions (the “Restructuring Transactions”) set forth in the Amended RSA and the plan term sheet attached as Exhibit B to the Amended RSA (the “Plan Term Sheet”). The Amended RSA contemplates that the restructuring and recapitalization of the Debtors will occur through a joint plan of reorganization in the Chapter 11 Cases. As required by the Amended RSA, (i) on April 15, 2021, we filed an amended Chapter 11 plan of reorganization and accompanying disclosure statement with the Bankruptcy Court; (ii) on May 18, 2021, we filed the second amended Chapter 11 plan of reorganization and accompanying disclosure statement, as further amended on May 19, 2021; and (iii) on May 25, 2021, the Company filed the Plan and accompanying disclosure statement (the “Disclosure Statement”), to implement the restructuring transactions. In addition, on May 26, 2021, the Bankruptcy Court entered an order that among other things, approved our Disclosure Statement and established dates and deadlines related to solicitation of, voting on, and confirmation of the Plan. We filed technical modifications to the Plan on August 9, 2021. The Amended RSA provides that the ongoing litigation between us and the lenders of our secured credit facility (the “Bank Lenders”) arising from the prepetition enforcement actions taken by the Bank Lenders is stayed and is to be dismissed upon the order confirming the Plan becoming a “Final Order” (as defined in the Plan). On August 11, 2021, following the confirmation hearing, the Bankruptcy Court entered an order confirming the Plan. Pursuant to the Amended RSA, we are required to have the Plan become effective no later than November 1, 2021. We cannot predict the ultimate outcome of the Chapter 11 Cases at this time. For the duration of our Chapter 11 proceedings, our operations and ability to develop and execute our business plan is subject to the risks and uncertainties associated with the Chapter 11 process. As a result of these risks and uncertainties, the amount and composition of our assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 proceedings, and the description of our operations, properties and liquidity and capital resources included in this quarterly report may not accurately reflect our operations, properties and liquidity and capital resources following the Chapter 11 process. Once effective, the Plan provides for the elimination of more than $1,681,900 of debt and preferred obligations, including an aggregate cash payment of $195,000 as noted below, as well as a significant reduction in interest expense. In exchange for their approximately $1,375,000 in principal amount of senior unsecured notes and $133,000 in principal amount of the secured credit facility, Consenting Noteholders, other noteholders, and certain holders of unsecured claims against the Company will receive, in the aggregate, $95,000 in cash, $555,000 of new senior secured notes, of which up to $100,000, upon election by the Consenting Noteholders, may be received in the form of new convertible secured notes and 89% in common equity of the newly reorganized company (subject to dilution, as set forth in the Plan). Certain Consenting Noteholders will also provide up to $50,000 of new money in exchange for additional convertible secured notes. The transactions outlined in the Plan will be implemented in the Chapter 11 Cases. The Plan provides that the remaining Bank Lenders, holding $983,700 in principal amount under the secured credit facility, will receive $100,000 in cash and a new $883,700 secured term loan. Existing common and preferred shareholders are expected to receive up to 11% of common equity in the newly reorganized company. In particular, subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, assume and assign or reject executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a prepetition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors of performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a prepetition general unsecured claim for damages caused by such deemed breach subject, in the case of the rejection of unexpired leases of real property, to certain caps on damages. Counterparties to such rejected contracts or leases may assert unsecured claims in the Bankruptcy Court against the applicable Debtor’s estate for such damages. Generally, the assumption or assumption and assignment of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance thereunder. Accordingly, any description of an executory contract or unexpired lease with the Debtors in this quarterly report, including where applicable a quantification of our obligations under any such executory contract or unexpired lease with the Debtors is qualified by any overriding rights we have under the Bankruptcy Code. Further, nothing herein is or shall be deemed an admission with respect to any claim amounts or calculations arising from the assumption, assumption and assignment or rejection of any executory contract or unexpired lease and the Debtors expressly preserve all of their rights with respect thereto. 42 Table of Contents Given the acceleration of the secured credit facility, the senior unsecured notes and certain property-level debt, as well as the inherent risks, unknown results and inherent uncertainties associated with the bankruptcy process and the direct correlation between these matters and our ability to satisfy our financial obligations that may arise , we believe that there is substantial doubt that we will continue to operate as a going concern within one year after the date our condensed consolidated financial statements are issued. Our ability to continue as a going concern is contingent upon our ability to successfully implement the Plan. See Note 2 to the condensed consolidated financial statements for additional information . Results of Operations Properties that were in operation for the entire year during 2020 and the six months ended June 30, 2021 are referred to as the “Comparable Properties.” Since January 1, 2020, we have opened two self-storage facilities, deconsolidated two properties and disposed of two properties: Properties Opened Property Location Date Opened Parkdale Mall – Self Storage (1) Beaumont, TX April 2020 Hamilton Place – Self Storage (1) Chattanooga, TN July 2020 (1) The property is owned by a 50/50 joint venture that is accounted for using the equity method of accounting and is included in equity in earnings of unconsolidated affiliates in the accompanying condensed consolidated statements of operations. Deconsolidations Property Location Date of Deconsolidation Asheville Mall (1) Asheville, NC January 2021 Park Plaza (1) Little Rock, AR March 2021 (1) We deconsolidated the property due to a loss of control when the property was placed into receivership in connection with the foreclosure process. Dispositions Property Location Sales Date Hickory Point Mall (1) Forsyth, IL August 2020 Burnsville Center (1) Burnsville, MN December 2020 (1) Title to the property was transferred to the mortgage holder in satisfaction of the non-recourse debt secured by the property. Comparison of the Three Months Ended June 30, 2021 to the Three Months Ended June 30, 2020 Revenues Total for the Three Months Ended June 30, Comparable Properties 2021 2020 Change Core Non-core Deconsolidation Dispositions Total Change Rental revenues $ 131,316 $ 120,222 $ 11,094 $ 17,227 $ 476 $ (3,765 ) $ (2,844 ) $ 11,094 Management, development and leasing fees 1,449 1,055 394 394 — — — 394 Other 3,796 2,934 862 773 329 (85 ) (155 ) 862 Total revenues $ 136,561 $ 124,211 $ 12,350 $ 18,394 $ 805 $ (3,850 ) $ (2,999 ) $ 12,350 Rental revenues from the Comparable Properties increased primarily due to prior year rent concessions to tenants that are in bankruptcy or are struggling financially due to the impacts of the COVID-19 pandemic. Percentage rent increased due to higher sales in the current period, as the COVID-19 pandemic had a significant impact on sales and traffic in the prior-year period. 43 Table of Contents Operating Expenses Total for the Three Months Ended June 30, Comparable Properties 2021 2020 Change Core Non-core Deconsolidation Dispositions Total Change Property operating $ (19,623 ) $ (16,906 ) $ (2,717 ) $ (3,656 ) $ (364 ) $ 653 $ 650 $ (2,717 ) Real estate taxes (15,110 ) (17,837 ) 2,727 1,552 (36 ) 434 777 2,727 Maintenance and repairs (8,784 ) (6,042 ) (2,742 ) (3,031 ) (119 ) 254 154 (2,742 ) Property operating expenses (43,517 ) (40,785 ) (2,732 ) (5,135 ) (519 ) 1,341 1,581 (2,732 ) Depreciation and amortization (47,499 ) (52,663 ) 5,164 1,658 890 1,799 817 5,164 General and administrative (11,269 ) (18,727 ) 7,458 7,458 — — — 7,458 Loss on impairment — (13,274 ) 13,274 — — 13,274 — 13,274 Litigation settlement (57 ) — (57 ) (57 ) — — — (57 ) Other (287 ) (242 ) (45 ) (45 ) — — — (45 ) Total operating expenses $ (102,629 ) $ (125,691 ) $ 23,062 $ 3,879 $ 371 $ 16,414 $ 2,398 $ 23,062 Property operating expenses at the Comparable Properties increased primarily due to lessening restrictions that allowed for the reopening of properties related to the COVID-19 pandemic and the actions taken in the prior year period to reduce operating expenses to mitigate the impact of mandated property closures and the effects of the COVID-19 pandemic, including a reduction-in-force and other operating expense initiatives. The decrease in depreciation and amortization expense related to the Comparable Properties primarily relates to a lower basis in depreciable assets resulting from impairments recorded since the prior-year period. General and administrative expenses decreased primarily due to prepetition professional and legal fees incurred in the prior-year period related to our restructuring efforts. In the second quarter of 2020, we recognized $13.3 million of loss on impairment of real estate to write down the book value of one mall. See Note 6 to the condensed consolidated financial statements for more information. Other Income and Expenses Interest expense decreased $30.3 million primarily due to not recognizing interest expense on the senior unsecured notes and the secured credit facility subsequent to the filing of the Chapter 11 Cases. The decrease was partially offset by an increase of default interest expense related to property-level non-recourse loans that are in default, which may not be payable depending on the outcome of negotiations with the lenders. In accordance with ASC 852, which limits the recognition of interest expense during a bankruptcy proceeding to only amounts that will be paid during the bankruptcy proceeding or that are probable of becoming allowed claims, interest has not been accrued on the secured credit facility or the senior unsecured notes subsequent to the filing of the Chapter 11 Cases. The income tax provision decreased $15.4 million as compared to the prior-year period due to a full valuation allowance of $16.8 million that was recorded on our deferred tax assets in the prior-year period. For the three months ended June 30, 2021 we recorded $17.1 million of reorganization items, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees directly related to the Chapter 11 Cases. Comparison of the Six Months Ended June 30, 2021 to the Six Months Ended June 30, 2020 Revenues Total for the Six Months Ended June 30, Comparable Properties 2021 2020 Change Core Non-core Deconsolidation Dispositions Total Change Rental revenues $ 259,491 $ 281,395 $ (21,904 ) $ (7,985 ) $ (247 ) $ (6,949 ) $ (6,723 ) $ (21,904 ) Management, development and leasing fees 3,108 3,147 (39 ) (39 ) — — — (39 ) Other 7,146 7,243 (97 ) 199 194 (175 ) (315 ) (97 ) Total revenues $ 269,745 $ 291,785 $ (22,040 ) $ (7,825 ) $ (53 ) $ (7,124 ) $ (7,038 ) $ (22,040 ) Rental revenues from the Comparable Properties declined primarily due to store closures and rent concessions to tenants that are in bankruptcy or are struggling financially as a result of the COVID-19 pandemic. 44 Table of Contents Operating Expenses Total for the Six Months Ended June 30, Comparable Properties 2021 2020 Change Core Non-core Deconsolidation Dispositions Total Change Property operating $ (41,425 ) $ (42,615 ) $ 1,190 $ (1,316 ) $ (413 ) $ 1,290 $ 1,629 $ 1,190 Real estate taxes (31,661 ) (36,285 ) 4,624 2,203 120 678 1,623 4,624 Maintenance and repairs (19,565 ) (17,250 ) (2,315 ) (3,328 ) (146 ) 394 765 (2,315 ) Property operating expenses (92,651 ) (96,150 ) 3,499 (2,441 ) (439 ) 2,362 4,017 3,499 Depreciation and amortization (95,611 ) (108,565 ) 12,954 5,282 2,173 3,188 2,311 12,954 General and administrative (23,881 ) (36,563 ) 12,682 12,682 — — — 12,682 Loss on impairment (57,182 ) (146,918 ) 89,736 49,070 831 13,273 26,562 89,736 Litigation settlement 801 — 801 801 — — — 801 Other (287 ) (400 ) 113 113 — — — 113 Total operating expenses $ (268,811 ) $ (388,596 ) $ 119,785 $ 65,507 $ 2,565 $ 18,823 $ 32,890 $ 119,785 Property operating expenses at the Comparable Properties increased primarily because of increased operating hours due to lessening restrictions at each property related to the COVID-19 pandemic and the actions taken in the prior year period to reduce operating expenses to mitigate the impact of mandated property closures and the effects of the COVID-19 pandemic, including a reduction-in-force and other operating expense initiatives. The decrease in depreciation and amortization expense related to the Comparable Properties primarily relates to a lower basis in depreciable assets resulting from impairments recorded since the prior-year period. General and administrative expenses decreased primarily due to prepetition professional and legal fees incurred in the prior-year period related to our restructuring efforts. For the six months ended June 30, 2021, we recognized $57.2 million of loss on impairment of real estate to write down the book value of three malls. For the six months ended June 30, 2020, we recognized $146.9 million of loss on impairment of real estate to write down the book value of three malls. See Note 6 to the condensed consolidated financial statements for more information. Other Income and Expenses Interest expense decreased $53.2 million primarily due to not recognizing interest expense on the senior unsecured notes and the secured credit facility subsequent to the filing of the Chapter 11 Cases. The decrease was partially offset by an increase of default interest expense related to property-level non-recourse loans that are in default, which may not be payable depending on the outcome of negotiations with the lenders. In accordance with ASC 852, which limits the recognition of interest expense during a bankruptcy proceeding to only amounts that will be paid during the bankruptcy proceeding or that are probable of becoming allowed claims, interest has not been accrued on the secured credit facility or the senior unsecured notes subsequent to the filing of the Chapter 11 Cases. For the six months ended June 30, 2021, we recorded $55.1 million of gain on deconsolidation related to Asheville Mall and Park Plaza. See Note 8 for more information. The income tax provision decreased $15.2 million as compared to the prior-year period due to a full valuation allowance of $16.8 million that was recorded on our deferred tax assets in the prior-year period. For the six months ended June 30, 2021, we recorded $40.0 million of reorganization items, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees directly related to the Chapter 11 Cases. Non-GAAP Measure Same-center Net Operating Income NOI is a supplemental non-GAAP measure of the operating performance of our shopping centers and other properties. We define NOI as property operating revenues (rental revenues and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs). 45 Table of Contents We compute NOI based on the Operating Partnership's pro rata share of both consolidated and unconsolidated P roperties. We believe that presenting NOI and same-center NOI (described below) based on our Operating Partnership’s pro rata share of both consolidated and unconsolidated P roperties is useful since we conduct substantially all our business through our Operating Partnership and, therefore, it reflects the performance of the P roperties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in the Operating Partnership. Our definition of NOI may be different than that used by other companies, and accordingly, our 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 our shopping center Properties, we believe 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 our results of operations. Our calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets in order to enhance the comparability of results from one period to another. We include a Property in our same-center pool when we have owned all or a portion of the Property since January 1 of the preceding calendar year and it has been in operation for both the entire preceding calendar year and current year-to-date period. 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 categorized as Lender Malls, as defined below under Operational Review. Due to the exclusions noted above, same-center NOI should only be used as a supplemental measure of our performance and not as an alternative to GAAP operating income (loss) or net income (loss). A reconciliation of our same-center NOI to net loss for the three- and six-month periods ended June 30, 2021 and 2020 is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net loss $ (9,561 ) $ (72,793 ) $ (37,841 ) $ (212,087 ) Adjustments: (1) Depreciation and amortization 60,397 65,895 121,458 134,384 Interest expense 31,933 59,736 64,945 113,822 Abandoned projects expense 287 242 287 400 (Gain) loss on sales of real estate assets (107 ) (2,623 ) 192 (2,763 ) Gain on deconsolidation — — (55,131 ) — Loss on impairment — 13,274 57,182 146,918 Litigation settlement 57 — (801 ) — Reorganization items 17,073 — 40,006 — Income tax provision 705 16,117 1,456 16,643 Lease termination fees (167 ) (1,433 ) (1,278 ) (1,653 ) Straight-line rent and above- and below-market lease amortization 2,476 (236 ) 5,320 (2,031 ) Net loss attributable to noncontrolling interests in other consolidated subsidiaries 449 487 1,268 694 General and administrative expenses 11,269 18,727 23,881 36,563 Management fees and non-property level revenues (5,166 ) (1,142 ) (7,379 ) (5,320 ) Operating Partnership's share of property NOI 109,645 96,251 213,565 225,570 Non-comparable NOI (2,779 ) (6,071 ) (6,674 ) (14,612 ) Total same-center NOI $ 106,866 $ 90,180 $ 206,891 $ 210,958 (1) Adjustments are based on our Operating Partnership's pro rata ownership share, including our share of unconsolidated affiliates and excluding noncontrolling interests' share of consolidated properties. Same-center NOI increased 18.5% for the three months ended June 30, 2021 as compared to the prior-year period. The $16.7 million increase for the three months ended June 30, 2021 compared to the same period in 2020 primarily consisted of a $23.5 million increase in revenues offset by a $6.8 million increase in operating expenses. Rental revenues increased $22.9 million during the quarter primarily due to prior year rent concessions to tenants that are in bankruptcy or are struggling financially due to the impacts of the COVID-19 pandemic, as well as a decrease in uncollectable revenues in the current period as compared to the prior year period. Percentage rent increased due to higher sales in the current period, as the COVID-19 pandemic had a significant impact on sales and traffic in the prior-year period. 46 Table of Contents Same-center NOI de creased 1 .9 % for the six months ended June 30 , 2021 as compared to the prior-year period. The $ 4. 0 million de crease for the six months ended June 30 , 2021 compared to the same period in 2020 primarily consist ed of a $ 0.6 million de crease in revenues and a $3. 4 million increase in operating expenses. Rental revenues de creased $ 0.7 million during the six months ended June 30, 2021, primarily due to rent concessions to tenants that are in bankruptcy or are struggling financially as a result of the COVID-19 pandemic . Our consolidated unencumbered properties generated approximately 35.5% of total consolidated NOI of $166.2 million (which is at our share and excludes NOI related to dispositions) for the six months ended June 30, 2021. Operational Review The shopping center business is, to some extent, seasonal in nature with tenants typically achieving the highest levels of sales during the fourth quarter due to the holiday season, which generally results in higher percentage rents in the fourth quarter. Additionally, the malls earn most of their rents from short-term tenants during the holiday period. Thus, occupancy levels and revenue production are generally the highest in the fourth quarter of each year. Results of operations realized in any one quarter may not be indicative of the results likely to be experienced over the course of the fiscal year. We classify our regional malls into three categories: (1) Stabilized Malls – Malls that have completed their initial lease-up and have been open for more than three complete calendar years. (2) Non-stabilized Malls - Malls that are in their initial lease-up phase. After three complete calendar years of operation, they are reclassified on January 1 of the fourth calendar year to the stabilized mall category. The Outlet Shoppes at Laredo was classified as a non-stabilized mall as of June 30, 2020. (3) Excluded Malls - We exclude malls from our core portfolio if they are categorized as a Lender Mall, for which operational metrics are excluded: • Lender Malls - Malls for which we are working or intend to work with the lender on a restructure of the terms of the loan secured by the property or convey the secured property to the lender. Asheville Mall, EastGate Mall, Greenbrier Mall, The Outlet Shoppes of Laredo and Park Plaza were classified as Lender Malls as of June 30, 2021. Asheville Mall, Burnsville Center, EastGate Mall, Hickory Point Mall, Greenbrier Mall and Park Plaza were classified as Lender Malls as of June 30, 2020. Lender Malls are excluded from our same-center pool as decisions made while in discussions with the lender may lead to metrics that do not provide relevant information related to the condition of these properties. We derive the majority of our total revenues from the mall properties. The sources of our total revenues by property type were as follows: As of June 30, 2021 2020 Malls 91.9 % 90.9 % Other Properties 8.1 % 9.1 % Mall Store Sales Mall store sales include reporting mall tenants of 10,000 square feet or less for stabilized malls and exclude license agreements, which are retail contracts that are temporary or short-term in nature and generally last more than three months but less than twelve months. Due to temporary mall and store closures that occurred in 2020 because of the COVID-19 pandemic, the majority of CBL’s tenants did not report sales for the full reporting period. As a result, the following is a comparison of the change in our same-center sales per square foot for the six months ended June 30, 2021 compared to the six months ended June 30, 2019: % Change Stabilized mall same-center sales per square foot 17.2% 47 Table of Contents Occupancy Our portfolio occupancy is summarized in the following table (1) : As of June 30, 2021 2020 Total portfolio 87.0 % 88.1 % Malls: Total Mall portfolio 85.2 % 86.6 % Same-center Malls 85.2 % 86.8 % Stabilized Malls 85.2 % 86.8 % Other Properties: Associated centers 91.3 % 90.5 % Community centers 93.5 % 95.2 % (1) As noted above, excluded properties are not included in occupancy metrics. Occupancy for malls represents percentage of mall store gross leasable area occupied under 20,000 square feet. Occupancy for other properties represents percentage of gross leasable area occupied. Bankruptcy-related store closures impacted 2021 occupancy by approximately 379 basis points or 624,000 square feet. Leasing The following is a summary of the total square feet of leases signed in the three- and six-month periods ended June 30, 2021 and 2020: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating portfolio: New leases 210,225 141,751 354,422 420,117 Renewal leases 693,787 133,671 1,292,105 766,431 Development portfolio: New leases 56,759 — 60,059 7,929 Total leased 960,771 275,422 1,706,586 1,194,477 Average annual base rents per square foot are based on contractual rents in effect as of June 30, 2021 and 2020, including the impact of any rent concessions. Average annual base rents per square foot for comparable small shop space of less than 10,000 square feet were as follows for each property type: June 30, 2021 2020 Malls (1) : Same-center Stabilized Malls $ 30.21 $ 32.24 Stabilized Malls 30.21 32.24 Other Properties (2) : 15.42 15.72 Associated centers 13.74 14.32 Community centers 16.89 16.87 Office buildings 19.26 19.16 (1) Excluded properties are not included. ( 2 ) Average base rents for associated centers, community centers and office buildings include all leased space, regardless of size. Results from new and renewal leasing of comparable small shop space of less than 10,000 square feet during the three- and six-month periods ended June 30, 2021 for spaces that were previously occupied, based on the contractual terms of the related leases inclusive of the impact of any rent concessions, are as follows: 48 Table of Contents Property Type Square Feet Prior Gross Rent PSF New Initial Gross Rent PSF % Change Initial New Average Gross Rent PSF (1) % Change Average Quarter: All Property Types (2) 503,927 $ 37.85 $ 32.40 (14.4 )% $ 32.80 (13.3 )% Stabilized Malls 440,701 40.72 34.40 (15.5 )% 34.77 (14.6 )% New leases 67,997 38.63 32.70 (15.3 )% 34.60 (10.4 )% Renewal leases 372,704 41.11 34.70 (15.6 )% 34.80 (15.3 )% Year-to-Date: All Property Types (2) 1,113,692 $ 34.07 $ 27.88 (18.2 )% $ 28.35 (16.8 )% Stabilized Malls 986,142 36.04 28.74 (20.3 )% 29.18 (19.1 )% New leases 135,501 35.27 27.69 (21.5 )% 29.23 (17.1 )% Renewal leases 850,641 36.17 28.91 (20.1 )% 29.17 (19.4 )% (1) Average gross rent does not incorporate allowable future increases for recoverable common area expenses. (2) Includes stabilized malls, associated centers, community centers and office buildings. New and renewal leasing activity of comparable small shop space of less than 10,000 square feet based on the lease commencement date is as follows: Number of Leases Square Feet Term (in years) Initial Rent PSF Average Rent PSF Expiring Rent PSF Initial Rent Spread Average Rent Spread Commencement 2021: New 66 199,355 6.73 $ 28.69 $ 30.58 $ 31.67 $ (2.98 ) (9.4 )% $ (1.09 ) (3.4 )% Renewal 350 1,167,087 2.15 26.23 26.40 32.03 (5.80 ) (18.1 )% (5.63 ) (17.6 )% Commencement 2021 Total 416 1,366,442 2.88 26.59 27.01 31.98 (5.39 ) (16.9 )% (4.97 ) (15.5 )% Commencement 2022: New 4 7,138 7.08 39.20 40.95 29.56 9.64 32.6 % 11.39 38.5 % Renewal 81 231,942 2.69 37.95 38.27 41.88 (3.93 ) (9.4 )% (3.61 ) (8.6 )% Commencement 2022 Total 85 239,080 2.90 37.99 38.35 41.52 (3.53 ) (8.5 )% (3.17 ) (7.6 )% Total 2021/2022 501 1,605,522 2.88 $ 28.28 $ 28.70 $ 33.40 $ (5.12 ) (15.3 )% $ (4.70 ) (14.1 )% Liquidity and Capital Resources As of June 30, 2021, we had $143.9 million available in unrestricted cash and $183.5 million in U.S. Treasury securities. Our total pro rata share of debt at June 30, 2021 was $4,365.7 million. The $128.3 million in restricted cash at June 30, 2021 related to cash held in escrow accounts for insurance, real estate taxes, capital expenditures and tenant allowances as required by the terms of certain mortgage notes payable, as well as amounts related to properties that secure the credit facility and cash management agreements with lenders of certain property-level mortgage indebtedness, which are designated for debt service and operating expense obligations. During the three and six months ended June 30, 2021, we have continued to reinvest in U.S. Treasury securities using the cash that was drawn on the secured line of credit to preserve liquidity at the beginning of the COVID-19 pandemic. We designated our U.S. Treasury securities as available-for-sale. As of June 30, 2021, our U.S. Treasury securities have maturities ranging from July 2021 through September 2021. Subsequent to June 30, 2021, we reinvested proceeds from matured U.S. Treasury securities into new U.S. Treasury securities. See Note 15 for more information. In March 2021, we reached agreements with the lenders to modify the loans secured by Hammock Landing Phases I & II and The Pavilion at Port Orange. Each agreement provides an additional four-year term, with a one-year extension option, for a fully extended maturity date of February 2026. These loans had a combined outstanding loan balance of $106.3 million at June 30, 2021. Additionally, each such agreement provides forbearance related to the default triggered as a result of the Chapter 11 Cases. Also, in March 2021, we reached an agreement with the lender to modify the loan secured by Ambassador Infrastructure. The agreement provides an additional four-year term with a fixed interest rate of 3.0%. The extended loan, maturing in March 2025, has an outstanding balance of $8.3 million, as $1.1 million was paid down in conjunction with the modification. The agreement provides a waiver related to the default triggered as a result of the Chapter 11 Cases. On May 26, 2021, the subsidiary that owns The Outlet Shoppes at Laredo filed for bankruptcy. Subsequent to June 30, 2021, we entered into a forbearance agreement with the lender regarding the loan secured by Fayette Mall related to the default triggered as a result of the Chapter 11 Cases. See Note 15 for more information. 49 Table of Contents The filing of the Chapter 11 Cases constituted an event of default that resulted in certain monetary obligations becoming immediately due and payable with respect to the secured credit facility and the senior unsecured notes. The Plan provides for a restructuring of the secured credit facility and the senior unsecured notes. Our total share of consolidated, unconsolidated and other outstanding debt maturing during 2021, assuming all extension options are elected, is $520.6 million, and we are in discussions with the existing lenders to modify and extend or otherwise refinance the loans. The filing of the Chapter 11 Cases also constituted an event of default with respect to certain property-level debt of the Operating Partnership’s subsidiaries, which may have resulted in the automatic acceleration of certain monetary obligations or may give the applicable lender the right to accelerate such amounts. See Note 8 and Note 9 for more information. We derive the majority of our revenues from leases with retail tenants, which have historically been the primary source for funding short-term liquidity and capital needs such as operating expenses, debt service, tenant construction allowances, recurring capital expenditures, dividends and distributions. We believe that the combination of cash flows generated from our operations, combined with cash on hand and our investment in U.S. Treasury securities will, for the foreseeable future, provide adequate liquidity to meet our cash needs assuming we continue to operate as a going concern within twelve months of the date our condensed consolidated financial statements are issued. In addition to these factors, we have options available to us to generate additional liquidity, including but not limited to, joint venture investments and decreasing expenditures related to tenant construction allowances and other capital expenditures. We also generate revenues from sales of peripheral land at our properties and from sales of real estate assets when it is determined that we can realize an optimal value for the assets. Cash Flows - Operating, Investing and Financing Activities There was $272.2 million of cash, cash equivalents and restricted cash as of June 30, 2021, an increase of $150.5 million from December 31, 2020. Of this amount, $143.9 million was unrestricted cash and cash equivalents as of June 30, 2021. Also, at June 30, 2021, we had $183.5 million in U.S. Treasuries with maturities through September 2021. Our net cash flows are summarized as follows (in thousands): Six Months Ended June 30, 2021 2020 Change Net cash provided by operating activities $ 130,497 $ 38,370 $ 92,127 Net cash provided by (used in) investing activities 44,188 (191,379 ) 235,567 Net cash provided by (used in) financing activities (24,220 ) 244,079 (268,299 ) Net cash flows $ 150,465 $ 91,070 $ 59,395 Cash Provided by Operating Activities Cash provided by operating activities increased $92.1 million primarily due to not paying interest on the secured credit facility and senior unsecured notes as a result of the filing of the Chapter 11 Cases. Also, operating cash flows in the prior-year period were significantly impacted by rent deferrals and abatements that we granted to tenants experiencing financial difficulties due to the COVID-19 pandemic. Cash Provided by (Used in) Investing Activities During the six months ended June 30, 2020, net cash used in investing activities was primarily related to the purchase of U.S. Treasury securities for $153.2 million using a portion of the $280.0 million that we drew on our secured line of credit. Whereas, during the six months ended June 30, 2021, we had U.S. Treasury securities mature that we immediately reinvested in new U.S. Treasury securities. We also had a decrease in additions to real estate assets in the current-year period as compared to the prior-year period as a result of programs put in place to reduce capital expenditures and preserve liquidity. Cash Provided by (Used in) Financing Activities During the six months ended June 30, 2020, the net cash inflow is primarily due to the $280.0 million draw on our secured credit facility in order to increase liquidity and preserve financial flexibility in light of the uncertainty surrounding the impact of the COVID-19 pandemic. During the six months ended June 30, 2021, cash used in financing activities primarily relates to principal payments on mortgages . Debt of the Company CBL has no indebtedness. Either the Operating Partnership or one of its consolidated subsidiaries, that it has a direct or indirect ownership interest in, is the borrower on all our debt. CBL is a limited guarantor of the Notes, as described in Note 9 to the condensed consolidated financial statements, for losses suffered solely by reason of fraud or willful misrepresentation by the Operating Partnership or its affiliates. We also provide a similar limited guarantee of the Operating Partnership's obligations with respect to our secured credit facility as of June 30, 2021. 50 Table of Contents Debt of the Operating Partnership The following tables summarize debt based on our pro rata ownership share, including our pro rata share of unconsolidated affiliates and excluding noncontrolling investors’ share of consolidated properties, because we believe this provides investors and lenders a clearer understanding of our total debt obligations and liquidity (in thousands): Mortgage and other indebtedness, net, consisted of the following: June 30, 2021: Consolidated Noncontrolling Interests Other Debt (1) Unconsolidated Affiliates Total Weighted- Average Interest Rate (2) Fixed-rate debt: Non-recourse loans on operating Properties (3) $ 963,118 $ (29,744 ) $ 138,926 $ 606,364 $ 1,678,664 4.74 % Recourse loan on operating Property (4) — — — 8,250 8,250 3.00 % Construction loan — — — 3,478 3,478 5.05 % Total fixed-rate debt 963,118 (29,744 ) 138,926 618,092 1,690,392 4.73 % Variable-rate debt: Recourse loans on operating Properties 27,461 — — 87,251 114,712 2.83 % Construction loans — — — 36,890 36,890 3.08 % Total variable-rate debt 27,461 — — 124,141 151,602 2.89 % Total fixed-rate and variable-rate debt 990,579 (29,744 ) 138,926 742,233 1,841,994 4.58 % Unamortized deferred financing costs (5) (2,987 ) 238 — (2,648 ) (5,397 ) Total mortgage and other indebtedness, net $ 987,592 $ (29,506 ) $ 138,926 $ 739,585 $ 1,836,597 Mortgage and other indebtedness included in liabilities subject to compromise consisted of the following: June 30, 2021: Consolidated Noncontrolling Interests Other Debt (1) Unconsolidated Affiliates Total Weighted- Average Interest Rate (2) Fixed-rate debt: Senior unsecured notes due 2023 (6) $ 450,000 $ — $ — $ — $ 450,000 5.25 % Senior unsecured notes due 2024 (6) 300,000 — — — 300,000 4.60 % Senior unsecured notes due 2026 (6) 625,000 — — — 625,000 5.95 % Total fixed-rate debt 1,375,000 — — — 1,375,000 5.43 % Variable-rate debt: Recourse loan on operating Property (7) 39,462 39,462 5.76 % Secured line of credit (8) 675,926 — — — 675,926 9.50 % Secured term loan (8) 438,750 — — — 438,750 9.50 % Total variable-rate debt 1,154,138 — — — 1,154,138 9.37 % Total fixed-rate and variable-rate debt 2,529,138 — — — 2,529,138 7.23 % Unpaid accrued interest (9) 58,370 — — — 58,370 Prepetition unsecured or under secured liabilities 4,198 — — — 4,198 Total liabilities subject to compromise $ 2,591,706 $ — $ — $ — $ 2,591,706 51 Table of Contents Mortgage and other indebtedness, net, consisted of the following: December 31, 2020: Consolidated Noncontrolling Interests Unconsolidated Affiliates Total Weighted- Average Interest Rate (2) Fixed-rate debt: Non-recourse loans on operating Properties (3) $ 1,120,203 $ (30,177 ) $ 612,458 $ 1,702,484 4.74 % Recourse loan on operating Property (4) — — 9,360 9,360 3.74 % Construction loan — — 3,406 3,406 5.05 % Total fixed-rate debt 1,120,203 (30,177 ) 625,224 1,715,250 4.74 % Variable-rate debt: Recourse loans on operating Properties 68,061 — 88,511 156,572 4.59 % Construction loans — — 33,222 33,222 3.11 % Total variable-rate debt 68,061 — 121,733 189,794 4.33 % Total fixed-rate and variable-rate debt 1,188,264 (30,177 ) 746,957 1,905,044 4.70 % Unamortized deferred financing costs (3,433 ) 265 (2,844 ) (6,012 ) Total mortgage and other indebtedness, net $ 1,184,831 $ (29,912 ) $ 744,113 $ 1,899,032 Mortgage and other indebtedness included in liabilities subject to compromise consisted of the following: December 31, 2020: Consolidated Noncontrolling Interests Unconsolidated Affiliates Total Weighted- Average Interest Rate (2) Fixed-rate debt: Senior unsecured notes due 2023 (6) $ 450,000 $ — $ — $ 450,000 5.25 % Senior unsecured notes due 2024 (6) 300,000 — — 300,000 4.60 % Senior unsecured notes due 2026 (6) 625,000 — — 625,000 5.95 % Total fixed-rate debt 1,375,000 — — 1,375,000 5.43 % Variable-rate debt: Secured line of credit (8) 675,926 — — 675,926 9.50 % Secured term loan (8) 438,750 — — 438,750 9.50 % Total variable-rate debt 1,114,676 — — 1,114,676 9.50 % Total fixed-rate and variable-rate debt 2,489,676 — — 2,489,676 7.25 % Unpaid accrued interest (9) 57,644 — — 57,644 Prepetition unsecured or under secured liabilities 4,170 — — 4,170 Total liabilities subject to compromise $ 2,551,490 $ — $ — $ 2,551,490 (1) During the six months ended June 30, 2021, we 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. ( 2 ) Weighted-average interest rate excludes amortization of deferred financing costs. ( 3 ) An unconsolidated affiliate has an interest rate swap on a notional amount outstanding of $41,989 as of June 30, 2021 and $42,654 as of December 31, 2020 related to a variable-rate loan on Ambassador Town Center to effectively fix the interest rate on this loan to a fixed-rate of 3.22%. ( 4 ) The unconsolidated affiliate had an interest rate swap on a notional amount outstanding of $9,360 as of December 31, 2020 related to a variable-rate loan on Ambassador Town Center - Infrastructure Improvements to effectively fix the interest rate on this loan to a fixed-rate of 3.74%. In March 2021, the loan was modified and provides an additional four-year term with a fixed interest rate of 3.0%. In conjunction with the modification, we paid additional principal of $1,110. ( 5 ) U namortized deferred financing costs amounting to $2,624 and $1,879 for our share of certain consolidated and unconsolidated property-level, non-recourse mortgage loans, respectively, may be required to be written off in the event that a waiver or restructuring of terms cannot be negotiated and the debt is either redeemed or otherwise extinguished . ( 6 ) In accordance with ASC 852, which limits the recognition of interest expense during a bankruptcy proceeding to only amounts that will be paid during the bankruptcy proceeding or that are probable of becoming allowed claims, interest has not been accrued on the senior unsecured notes subsequent to the filing of the Chapter 11 Cases. The outstanding amount of the senior unsecured notes is included in liabilities subject to compromise in the accompanying condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020. ( 7 ) On May 26, 2021, the subsidiary that owns The Outlet Shoppes at Laredo filed for bankruptcy. ( 8 ) The administrative agent informed the Company that interest will accrue on all outstanding obligations at the post-default rate, which is equal to the rate that otherwise would be in effect plus 5.0%. The post-default interest rate at June 30, 2021 and December 31, 2020 was 9.50%. In accordance with ASC 852, which limits the recognition of interest expense during a bankruptcy proceeding to only amounts that will be paid during the bankruptcy proceeding or that are probable of becoming allowed claims, interest has not been accrued on the secured credit facility subsequent to the filing of the Chapter 11 Cases. The outstanding amount of the secured credit facility is included in liabilities subject to compromise in the accompanying condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020. ( 9 ) As of June 30, 2021, represents interest accrued on the loan secured by The Outlet Shoppes at Laredo prior to May 26, 2021, and the secured credit facility and senior unsecured notes prior to the filing of the Chapter 11 Cases. As of December 31, 2020, represents interest accrued on the secured credit facility and senior unsecured notes prior to the filing of the Chapter 11 Cases. The weighted-average remaining term of our total share of consolidated, unconsolidated and other debt was 2.6 years and 3.1 years at June 30, 2021 and December 31, 2020, respectively. The weighted-average remaining term of our pro rata share of fixed-rate debt was 2.9 years and 3.4 years at June 30, 2021 and December 31, 2020, respectively. 52 Table of Contents As of June 30 , 2021 and December 31, 20 20 , our pro rata share of consolidated and unconsolidated variable-rate debt represented 29. 9 % and 2 9.7 %, respectively, of our total pro rata share of debt. See Note 8 to the condensed consolidated financial statements for information concerning activity related to unconsolidated affiliates. Issuer and Guarantor Subsidiaries of Guaranteed Securities In March 2020, the SEC issued Rule Release No. 33-10762, Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities ("Release 33-10762”). Release 33-10762 simplifies the disclosure requirements related to certain registered securities under Rules 3-10 and 3-16 of SEC Regulation S-X, permitting registrants to provide certain alternative financial disclosures and non-financial disclosures in lieu of separate consolidating financial statements for subsidiary issuers and guarantors of registered debt securities if certain conditions are met. The amendments in Release 33-10762 are generally effective for filings on or after January 4, 2021, with early application permitted. We adopted the new disclosure requirements permitted under Release 33-10762 effective for the period as of and for the nine months ended September 30, 2020. The Operating Partnership’s senior secured credit facility is secured by 17 malls and 3 associated centers that are directly or indirectly owned by 36 wholly owned subsidiaries of the Operating Partnership (the “Guarantor Subsidiaries”). The Guarantor Subsidiaries own an additional four malls, two associated centers and four mortgage notes receivable that are not collateral for the secured credit facility. The Guarantor Subsidiaries also entered into agreements to guarantee the Operating Partnership’s obligations under the senior secured credit facility. Based on the terms of the Notes, to the extent that any subsidiary of the Operating Partnership executes and delivers a guarantee to another debt facility, the Operating Partnership shall also cause the subsidiary to guarantee the Operating Partnership’s obligations under the Notes on a senior basis. In connection with entering the guarantee agreements related to the senior secured credit facility, the Guarantor Subsidiaries entered a guarantee agreement with the issuer of the Notes to satisfy the guaranty requirement. The guarantees of the Guarantor Subsidiaries are joint and several and full and unconditional. The guarantees are unsecured and effectively subordinated to any existing and future secured debt that a Guarantor Subsidiary may have to the extent of the value of the assets securing such debt. Each Guarantor Property’s obligation will remain until the earlier of such time as (i) all guaranteed obligations have been paid in full in cash and each guaranteed obligation has been terminated or cancelled in accordance with its terms or (ii) any such Guarantor Subsidiary ceases to be a guarantor under the senior secured credit facility. The Guarantor Subsidiaries’ maximum guarantee related to the secured credit facility is $1,114.7 million as of June 30, 2021, and the maximum guarantee related to the Notes is $1,375.0 million as of June 30, 2021. The following tables present summarized financial information for the Operating Partnership and the Guarantor Subsidiaries on a combined basis. The summarized financial information does not include the Operating Partnership’s investments in non-guarantor subsidiaries nor the earnings from non-guarantor subsidiaries. Intercompany transactions between the Operating Partnership and the Guarantor Subsidiaries have been eliminated. The summarized balance sheet information is as of June 30, 2021 and December 31, 2020 and the summarized statement of operations information is for the three and six-month periods ended June 30, 2021 and 2020 (amounts are presented in thousands). 53 Table of Contents June 30, 2021 December 31, 2020 Net investment in real estate assets $ 1,361,257 $ 1,428,482 Total assets (1) 1,687,492 1,673,179 Total liabilities (2) 2,810,480 2,884,808 Three Months Ended June 30, 2021 2020 Total revenues (3) $ 54,598 $ 47,983 Total expenses (4) (67,836 ) (37,194 ) Net income (loss) (13,001 ) 8,057 Six Months Ended June 30, 2021 2020 Total revenues (3) $ 109,370 $ 113,410 Total expenses (4) (144,791 ) (81,054 ) Net income 7,805 26,892 (1) Total assets include an intercompany note receivable with a non-guarantor subsidiary of $1,721 and $4,698 as of June 30, 2021 and December 31, 2020, respectively. (2) Total liabilities include intercompany liabilities of $4,189 as of June 30, 2021. (3) Total revenues include revenues derived from non-guarantor subsidiaries of $31 and $97 for the three months ended June 30, 2021 and 2020, respectively. Total revenues include revenues derived from non-guarantor subsidiaries of $55 and $97 for the six months ended June 30, 2021 and 2020, respectively. (4) Total expenses include expenses incurred with non-guarantor subsidiaries of $8,813 and $9,422 for the three months ended June 30, 2021 and 2020, respectively. Total expenses include expenses incurred with non-guarantor subsidiaries of $17,144 and $20,312 for the six months ended June 30, 2021 and 2020, respectively. Financial Covenants and Restrictions As discussed in Note 2 to the condensed consolidated financial statements, the filing of the Chapter 11 Cases constituted an event of default that resulted in certain monetary obligations becoming immediately due and payable with respect to the secured credit facility and the senior unsecured notes. The filing of the Chapter 11 Cases also constituted an event of default with respect to certain property-level debt of the Operating Partnership’s subsidiaries, which may have resulted in the automatic acceleration of certain monetary obligations or may give the applicable lender the right to accelerate such amounts. Equity In 2019, we suspended all future dividends on our common stock and preferred stock, as well as distributions to all noncontrolling interest investors in our Operating Partnership. The dividend arrearage created by our board of directors’ decision to suspend the dividends that continue to accrue on our outstanding preferred stock currently makes us ineligible to use the abbreviated, and less costly, SEC Form S-3 registration statement to register our securities for sale. This means we will be required to use a registration statement on Form S-11 to register additional securities for sale with the SEC, which we expect to hinder our ability to act quickly in relation to, and raise our costs incurred in, future capital raising activities. This preferred dividend arrearage (and the Operating Partnership’s related arrearage in distributions to its preferred units of limited partnership underlying our outstanding preferred shares), under the terms of our preferred stock, also require that we not resume any payment of dividends on our common stock unless full cumulative dividends accrued with respect to our preferred stock (and such underlying preferred units) for all past quarters and the then-current quarter are first declared and paid in cash, or declared with a sum sufficient for the payment thereof having been set apart for such payment in cash. In addition, for so long as this distribution suspension results in the existence of a distribution shortfall (as described in the Partnership Agreement of the Operating Partnership) with respect to any of the S-SCUs, the L-SCUs or the K-SCUs (an “SCU Distribution Shortfall”), the terms of the Operating Partnership Agreement state that we (i) may not cause the Operating Partnership to resume distributions to holders of its outstanding common units of limited partnership interest until all holders of SCUs have received distributions sufficient to satisfy the SCU Distribution Shortfall for all prior quarters and the then-current quarter (which effectively would also prevent the resumption of common stock dividends, since our common stock dividends are funded by distributions the Company receives on the underlying common units it holds in the Operating Partnership) and (ii) may not elect to settle any exchange requested by a holder of common units of the Operating Partnership in cash, and may only settle any such exchange through the issuance of shares of common stock or other units of the Operating Partnership ranking junior to any such units as to which a distribution shortfall exists. Our board of directors prospectively approved that, to the extent any partners exercise any or all of their exchange rights while the existence of the SCU Distribution Shortfall requires an exchange to be settled through the issuance of shares of common stock or other units of the Operating Partnership, the consideration paid shall be in the form of shares of common 54 Table of Contents stock. We do not expect to pay any further dividends with respect to the Company’s outstanding common stock and preferred stock, or any distributions with respect to the Operating Partnership’s outstanding units of partnership interest, prior to the conclusion of our reorganization pursuant to the pending Chapter 11 Cases, which reorganization we also expect will extinguish all claims related to the accrued and unpaid preferred stock dividends and the Operating Partnership unit SCU Distribution Shortfall discussed above. If we successfully complete such reorganization, in connection with future dividend distributions with respect to new equity securities issued pursuant to the Chapter 11 Cases, we will review taxable income on a regular basis and take measures, if necessary, to ensure that we meet the minimum distribution requirements to maintain our status as a REIT. See Delisting of Common Stock and Depositary Shares in Note 2 to the condensed consolidated financial statements for additional information regarding the suspension of NYSE trading in our common stock and the depositary shares representing our Series D Preferred Stock and Series E Preferred Stock pursuant to a notice we received from the NYSE regarding our non-compliance with the NYSE Listing Standards and the current status of our related appeal to the NYSE. Market Capitalization Our total-market capitalization as of June 30, 2021 was as follows (in thousands, except stock prices): Shares Outstanding Stock Price (1) Common stock and operating partnership units 201,562 $ 0.12 7.375% Series D Cumulative Redeemable Preferred Stock 1,815 250.00 6.625% Series E Cumulative Redeemable Preferred Stock 690 250.00 (1) Stock price for common stock and Operating Partnership units equals the closing price of CBL's common stock on June 30, 2021 on the OTC Markets, operated by the OTC Markets Group, Inc. The stock prices for the preferred stock represent the liquidation preference of each respective series of preferred stock. Capital Expenditures Deferred maintenance and capital expenditures are generally included in the determination of common area maintenance (“CAM”) expense that is billed to tenants in accordance with their lease agreements. The following table, which excludes expenditures for developments, redevelopments and expansions, summarizes these capital expenditures, including our share of unconsolidated affiliates' capital expenditures, for the three and six months ended June 30, 2021 compared to the same periods in 2020 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Tenant allowances (1) $ 3,375 $ 1,360 $ 4,252 $ 8,578 Deferred maintenance: Parking area and parking area lighting 57 15 57 270 Roof repairs and replacements 308 1,748 308 1,899 Other capital expenditures 1,782 645 2,241 3,841 Total deferred maintenance 2,147 2,408 2,606 6,010 Capitalized overhead 209 100 467 731 Capitalized interest 13 366 32 1,092 Total capital expenditures $ 5,744 $ 4,234 $ 7,357 $ 16,411 (1) Tenant allowances primarily relate to new leases. Tenant allowances related to renewal leases were not material for the periods presented. Annual capital expenditures budgets are prepared for each of our properties that are intended to provide for all necessary recurring and non-recurring capital expenditures. We believe that property operating cash flows, which include reimbursements from tenants for certain expenses, and readily available cash on hand will provide the necessary funding for these expenditures. 55 Table of Contents Developments and Redevelopments Properties Opened During the Six Months Ended June 30, 2021 (Dollars in thousands) CBL's Share of Property Location CBL Ownership Interest Total Project Square Feet Total Cost (1) Cost to Date (2) 2021 Cost Opening Date Initial Unleveraged Yield Outparcel Developments: Hamilton Place - Aloft Hotel (3)(4) Chattanooga, TN 50% 89,674 $ 12,000 $ 11,455 $ 2,628 Jun-21 9.2% Pearland Town Center - HCA Offices Pearland, TX 100% 48,416 14,186 12,237 4,815 Jun-21 11.8% 138,090 $ 26,186 $ 23,692 $ 7,443 Properties Under Development at June 30, 2021 (Dollars in thousands) CBL's Share of Property Location CBL Ownership Interest Total Project Square Feet Total Cost (1) Cost to Date (2) 2021 Cost Expected Opening Date Initial Unleveraged Yield Outparcel Developments: Kirkwood Mall - Five Guys, Blaze Pizza, Thrifty White, Pancheros, Chick-fil-A Bismarck, ND 100% 15,275 $ 7,176 $ 311 $ 107 Q2 '22 8.9% Redevelopments: Cross Creek Sears Redevelopment - Longhorn's, Rooms To Go (5) Fayetteville, NC 100% 13,494 5,252 4,009 2,785 Q3 '21 5.3% Total Properties Under Development 28,769 $ 12,428 $ 4,320 $ 2,892 (1) Total Cost is presented net of reimbursements to be received. (2) Cost to Date does not reflect reimbursements until they are received. ( 3 ) Yield is based on expected yield upon stabilization. ( 4 ) Total cost includes a construction loan of $8,400 (at our share), a non-cash allocated value for our land contribution of $2,200 and cash contributions of $1,400. ( 5 ) The return reflected represents a pro forma incremental return as Total Cost excludes the cost related to the acquisition of the Sears (Cross Creek Mall) building. Off-Balance Sheet Arrangements Unconsolidated Affiliates We have ownership interests in 31 unconsolidated affiliates as of June 30, 2021 that are described in Note 8 to the condensed consolidated financial statements. The unconsolidated affiliates are accounted for using the equity method of accounting and are reflected in the condensed consolidated balance sheets as investments in unconsolidated affiliates. The following are circumstances when we may consider entering into a joint venture with a third party: • Third parties may approach us with opportunities in which they have obtained land and performed some pre-development activities, but they may not have sufficient access to the capital resources or the development and leasing expertise to bring the project to fruition. We enter into such arrangements when we determine such a project is viable and we can achieve a satisfactory return on our investment. We typically earn development fees from the joint venture and provide management and leasing services to the property for a fee once the property is placed in operation. • We determine that we may have the opportunity to capitalize on the value we have created in a property by selling an interest in the property to a third party. This provides us with an additional source of capital that can be used to develop or acquire additional real estate assets that we believe will provide greater potential for growth. When we retain an interest in an asset rather than selling a 100% interest, it is typically because this allows us to continue to manage the property, which provides us the ability to earn fees for management, leasing, development and financing services provided to the joint venture. • We also have the ability to contribute land into a joint venture partnership with diverse uses, such as hotels, self-storage and multifamily. We typically partner with developers who have expertise in the diverse property types. 56 Table of Contents Guarantees We may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on our investment in the joint venture. We may receive a fee from the joint venture for providing the guaranty. Additionally, when we issue a guaranty, the terms of the joint venture agreement typically provide that we may receive indemnification from the joint venture or have the ability to increase our ownership interest. See Note 12 to the condensed consolidated financial statements for information related to our guarantees of unconsolidated affiliates' debt as of June 30, 2021 and December 31, 2020. Critical Accounting Policies Our discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgment about the effect of matters that are inherently uncertain and that may change in subsequent periods. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our Annual Report on Form 10-K for the year ended December 31, 2020 contains a discussion of our critical accounting policies and estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes to these policies and estimates during the six months ended June 30, 2021. Our significant accounting policies are disclosed in Note 3 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. Recent Accounting Pronouncements See Note 3 to the condensed consolidated financial statements for information on recently issued accounting pronouncements. Non-GAAP Measure 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. 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, 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. Our method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. We believe that FFO provides an additional indicator of the operating performance of our 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 real estate assets have historically risen or fallen with market conditions, we believe that FFO, which excludes historical cost depreciation and amortization, enhances investors’ understanding of our operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of our properties and interest rates, but also by our capital structure. We present both FFO allocable to Operating Partnership common unitholders and FFO allocable to common shareholders, as we believe that both are useful performance measures. We believe FFO allocable to Operating Partnership common unitholders is a useful performance measure since we conduct substantially all our business through our Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in our Operating Partnership. We believe FFO allocable to common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income (loss) attributable to common shareholders. 57 Table of Contents In our reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders that is presented below, we make an adjustment to add back noncontrolling interest in income (loss) of our Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders. We then apply a percentage to FFO of the Operating Partnership common unitholders to arrive at FFO allocable to 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 our operating performance or to cash flow as a measure of liquidity. We believe that it is important to identify the impact of certain significant items on our FFO measures for a reader to have a complete understanding of our results of operations. Therefore, we have also presented adjusted FFO measures excluding these significant 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 below for a description of these adjustments. FFO of the Operating Partnership increased to $50.8 million for the three months ended June 30, 2021 from $(5.2) million for the prior-year period; and increased to $141.0 million for the six months ended June 30, 2021 from $45.8 million for the prior-year period. Excluding the adjustments noted below, FFO of the Operating Partnership, as adjusted, increased to $79.5 million for the three months ended June 30, 2021 from $4.9 million for the same period in 2020; and increased to $148.2 million for the six months ended June 30, 2021 from $56.5 million from the same period in 2020. The increase in FFO, as adjusted, was primarily driven by the reduction in interest expense due to not recognizing post-petition interest expense on the senior unsecured notes and the secured credit facility subsequent to the filing of the Chapter 11 Cases, the cumulation of undeclared dividends ceasing to cumulate on the Series D Preferred Stock and the Series E Preferred Stock subsequent to the filing of the Chapter 11 Cases, a lower income tax provision in the current-year period, and costs incurred in the prior year period related to our restructuring efforts . The 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): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net loss attributable to common shareholders $ (8,882 ) $ (81,452 ) $ (35,645 ) $ (215,348 ) Noncontrolling interest in loss of Operating Partnership (230 ) (2,077 ) (928 ) (18,491 ) Depreciation and amortization expense of: Consolidated properties 47,499 52,663 95,611 108,565 Unconsolidated affiliates 13,456 14,020 26,986 27,530 Non-real estate assets (492 ) (812 ) (1,032 ) (1,729 ) Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries (558 ) (788 ) (1,139 ) (1,711 ) Loss on impairment — 13,274 57,182 146,918 Loss on depreciable property — — — 25 FFO allocable to Operating Partnership common unitholders 50,793 (5,172 ) 141,035 45,759 Litigation settlement (1) 57 — (801 ) — Non-cash default interest expense (2) 11,576 2,203 23,046 2,893 Gain on deconsolidation (3) — — (55,131 ) — Reorganization items (4) 17,073 7,857 40,006 7,857 FFO allocable to Operating Partnership common unitholders, as adjusted $ 79,499 $ 4,888 $ 148,155 $ 56,509 FFO per diluted share $ 0.25 $ (0.03 ) $ 0.70 $ 0.23 FFO, as adjusted, per diluted share $ 0.39 $ 0.02 $ 0.73 $ 0.28 (1) For the three and six months ended June 30, 2021, represents the accrued expense related to the settlement of a class action lawsuit. Also, for the six months ended June 30, 2021, represents a credit to litigation settlement expense related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit. (2) The three and six months ended June 30, 2021 includes default interest expense related to loans secured by properties that were in default prior to our filing of the Chapter 11 Cases, as well as loans secured by properties that are in default due to our filing of the Chapter 11 Cases. The six months ended June 30, 2020 includes default interest expense related to Greenbrier Mall, Hickory Point Mall, Eastgate Mall, Asheville Mall, Burnsville Center and Park Plaza Mall. (3) During the six months ended June 30, 2021, we 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. ( 4 ) Represents costs incurred subsequent to our filing of the Chapter 11 Cases associated with our reorganization efforts, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees. 58 Table of Contents The reconciliation of diluted EPS to FFO per diluted share is as follows: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Diluted EPS attributable to common shareholders $ (0.05 ) $ (0.42 ) $ (0.18 ) $ (1.16 ) 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 0.30 0.32 0.59 0.66 Loss on impairment — 0.07 0.29 0.73 FFO per diluted share $ 0.25 $ (0.03 ) $ 0.70 $ 0.23 The reconciliations of FFO allocable to Operating Partnership common unitholders to FFO allocable to common shareholders, including and excluding the adjustments noted above, are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 FFO allocable to Operating Partnership common unitholders $ 50,793 $ (5,172 ) $ 141,035 $ 45,759 Percentage allocable to common shareholders (1) 97.46 % 95.17 % 97.46 % 92.09 % FFO allocable to common shareholders $ 49,503 $ (4,922 ) $ 137,453 $ 42,139 FFO allocable to Operating Partnership common unitholders, as adjusted $ 79,499 $ 4,888 $ 148,155 $ 56,509 Percentage allocable to common shareholders (1) 97.46 % 95.17 % 97.46 % 92.09 % FFO allocable to common shareholders, as adjusted $ 77,480 $ 4,652 $ 144,392 $ 52,039 (1) Represents the weighted-average number of common shares outstanding for the period divided by the sum of the weighted-average number of common shares and the weighted-average number of Operating Partnership units outstanding during the period.