What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-25 compared with 2021-02-24 · 260 added, 271 removed, 278 unchanged (66% of the section changed)

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The Company is the sole general partner of, and owns a majority of the ownership interests in, the Operating Partnership.

As of December 31, 2020, the Operating Partnership owned or had an ownership interest in 47 regional shopping centers and five community/power shopping centers.

These 52 regional and community/power shopping centers (which include any related office space) consist of approximately 50 million square feet of gross leasable area (“GLA”) and are referred to herein as the “Centers”.

As of December 31, 2021, the Operating Partnership owned or had an ownership interest in 44 regional town centers and five community/power shopping centers.

These 49 regional town centers and community/power shopping centers (which include any adjoining mixed-use improvements) consist of approximately 48 million square feet of gross leasable area (“GLA”) and are referred to herein as the “Centers”.

The Centers consist of consolidated Centers (“Consolidated Centers”) and unconsolidated joint venture Centers (“Unconsolidated Joint Venture Centers”) as set forth in “Item 2.

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This information should be read in conjunction with the accompanying consolidated financial statements and notes thereto.

Acquisitions and Dispositions:

The financial statements reflect the following acquisitions, dispositions and changes in ownership subsequent to the occurrence of each transaction.

On February 16, 2018, the Company's joint venture in Fashion District Philadelphia sold its ownership share of an office building for $41.8 million, resulting in a gain on sale of assets of $5.5 million.

The Company's pro rata share of the gain on the sale of assets of $2.8 million was included in equity in income from unconsolidated joint ventures.

The Company used its portion of the proceeds to pay down its line of credit and for general corporate purposes.

On March 1, 2018, the Company formed a 25/75 joint venture with Hudson Pacific Properties, whereby the Company agreed to contribute Westside Pavilion (referred to hereafter as One Westside), a 680,000 square foot regional shopping center in Los Angeles, California in exchange for $142.5 million.

The Company completed the sale of the 75% ownership interest in the property to Hudson Pacific Properties on August 31, 2018, resulting in a gain on sale of assets of $46.2 million.

The sales price was funded by a cash payment of $36.9 million and the assumption of a pro rata share of the mortgage note payable on the property of $105.6 million.

The Company used the proceeds to fund its share of the cost to defease the mortgage note payable on the property (See "Financing Activity").

From March 1, 2018 to the completion of the sale, the Company accounted for its interest in the property as a collaborative arrangement (See Note 15—Collaborative Arrangement of the Company's consolidated financial statements).

Upon completion of the sale, the Company has accounted for its ownership interest in the property under the equity method of accounting.

On May 17, 2018, the Company sold Promenade at Casa Grande, a 761,000 square foot community center in Casa Grande, Arizona for $26.0 million, resulting in a loss on sale of assets of $0.3 million.

The Company used the proceeds from the sale to pay down its line of credit and for other general corporate purposes.

On July 6, 2018, the Company’s joint venture in The Market at Estrella Falls, a 298,000 square foot community center in Goodyear, Arizona, sold the property for $49.1 million, resulting in a gain on sale of assets of $12.6 million.

The Company's share of the gain of $3.0 million was included in equity in income from unconsolidated joint ventures.

The proceeds were used to pay off the $24.1 million mortgage loan payable on the property, settle development obligations and for distributions to the partners.

The Company used its share of the net proceeds for general corporate purposes.

Financing Activity:

On January 22, 2018, the Company's joint venture in Fashion District Philadelphia obtained a $250.0 million term loan that bears interest at LIBOR plus 2.0% and matures on January 22, 2023.

Concurrent with the loan closing, the joint venture borrowed $150.0 million on the term loan and borrowed the remaining $100.0 million on March 26, 2018.

The Company used its share of the proceeds to pay down its line of credit and for general corporate purposes.

On March 29, 2018, the Company's joint venture in Broadway Plaza placed a $450.0 million loan on the property that bears interest at an effective rate of 4.19% and matures on April 1, 2030.

The Company used its share of the proceeds to pay down its line of credit and for general corporate purposes.

On August 31, 2018, concurrent with the sale of the ownership interest in One Westside (See "Acquisitions and Dispositions"), the Company's joint venture defeased the $140.8 million mortgage note payable on the property by providing a $149.2 million portfolio of marketable securities as replacement collateral in lieu of the property.

The Company funded its $37.3 million share of the purchase price of the marketable securities portfolio with the proceeds from the sale of the ownership interest in the property.

On September 14, 2018, the Company entered into four interest rate swap agreements that effectively convert a total of $400.0 million of the outstanding balance of the Company’s line of credit from floating rate debt of LIBOR plus 1.45% to fixed rate debt of 4.30% until September 30, 2021.

On November 7, 2018, the Company's joint venture in Boulevard Shops replaced the existing loan on the property with a new $18.8 million loan that bears interest at LIBOR plus 1.85% and matures on December 5, 2023.

The loan can be expanded, depending on certain conditions, up to $23.0 million.

The Company used its share of the proceeds to pay down its line of credit and for general corporate purposes.

Dispositions:

The financial statements reflect the following dispositions and changes in ownership subsequent to the occurrence of each transaction.

On March 29, 2021, the Company sold Paradise Valley Mall in Phoenix, Arizona to a newly formed joint venture for $100.0 million, resulting in a gain on sale of assets of approximately $5.6 million.

Concurrent with the sale, the Company elected to reinvest into the new joint venture at a 5% ownership interest.

The Company used the $95.3 million of net proceeds from the sale to pay down its line of credit (See "Liquidity and Capital Resources").

On September 17, 2021, the Company sold Tucson La Encantada in Tucson, Arizona for $165.3 million, resulting in a gain on sale of assets of approximately $117.2 million.

The Company used the net cash proceeds of approximately $100.1 million to pay down debt (See "Liquidity and Capital Resources").

On December 31, 2021, the Company assigned its joint venture interest in The Shops at North Bridge in Chicago, Illinois to its partner in the joint venture.

The assignment included the assumption by the joint venture partner of the Company’s share of the debt owed by the joint venture and no cash consideration was received by the Company.

The Company recognized a loss of approximately $28.3 million in connection with the assignment.

On December 31, 2021, the Company sold its joint venture interest in the undeveloped property at 443 North Wabash Avenue in Chicago, Illinois to its partner in the joint venture for $21.0 million.

The Company recognized an immaterial gain in connection with the sale.

For the twelve months ended December 31, 2021, the Company and certain joint venture partners sold various land parcels in separate transactions, resulting in the Company’s share of the gain on sale of land of $19.6 million.

The Company used its share of the proceeds from these sales of $46.5 million to pay down debt and for other general corporate purposes.

Financing Activities:

On January 10, 2019, the Company replaced the existing loan on Fashion Outlets of Chicago with a new $300.0 million loan that bears interest at an effective rate of 4.61% and matures on February 1, 2031.

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Concurrent with the loan modification, the joint venture borrowed an additional $18.4 million.

The Company used its $9.2 million share of the additional proceeds to pay down its line of credit and for general corporate purposes.

The Company used its $9.2 million share of the additional proceeds to pay down its line of credit and

for general corporate purposes.

As discussed below, the Company's joint venture replaced this loan with a new loan prior to its maturity date in October 2021.

On June 3, 2019, the Company’s joint venture in SanTan Village Regional Center replaced the existing loan on the property with a new $220.0 million loan that bears interest at an effective rate of 4.34% and matures on July 1, 2029.

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The Company used its share of the additional proceeds to pay down its line of credit and for general corporate purposes.

On July 25, 2019, the Company's joint venture in Fashion District Philadelphia amended the existing term loan on the joint venture to allow for additional borrowings up to $100.0 million at LIBOR plus 2.00%.

On July 25, 2019, the Company's previously unconsolidated joint venture in Fashion District Philadelphia amended the existing term loan on the joint venture to allow for additional borrowings up to $100.0 million at LIBOR plus 2.00%.

Concurrent with the amendment, the joint venture borrowed an additional $26.0 million.

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The Company used its share of the additional proceeds to pay down its line of credit and for general corporate purposes.

On September 12, 2019, the Company’s joint venture in Tysons Tower placed a new $190.0 million loan on the property that bears interest at an effective rate of 3.38% and matures on November 11, 2029.

On September 12, 2019, the Company’s joint venture in Tysons Tower placed a new $190.0 million loan on the property that bears interest at an effective rate of 3.38% and matures on October 11, 2029.

The Company used its share of the proceeds to pay down its line of credit and for general corporate purposes.

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On September 15, 2020, the Company closed on a loan extension agreement for the $191.0 million loan on Danbury Fair Mall.

Under the extension agreement, the original loan maturity date of October 1, 2020 was extended to April 1, 2021.

loan may be further extended to July 1, 2021, subject to certain conditions.

The loan amount and interest rate are unchanged following the extension.

On November 17, 2020, the Company’s joint venture in Tysons VITA, the residential tower at Tysons Corner Center, placed a new $95.0 million loan on the property that bears interest at an effective rate of 3.43% and matures on January 1, 2030.

Under the extension agreement, the original loan maturity date of October 1, 2020 was extended to April 1, 2021 and subsequently to October 1, 2021.

The loan amount and interest rate were unchanged following these extensions.

On September 15, 2021, the Company further extended the loan maturity to July 1, 2022.

The interest rate remained unchanged, and the Company repaid $10.0 million of the outstanding loan balance at closing.

Initial loan funding for the Company’s joint venture was $90.0 million with future advance potential of up to $5.0 million.

The Company used its share of the initial proceeds of $45.0 million for general corporate purposes.

On December 10, 2020, the Company made the Partnership Loan to the Company’s joint venture in Fashion District Philadelphia to fund the entirety of a $100.0 million repayment to reduce the mortgage loan on Fashion District Philadelphia from $301.0 million to $201.0 million.

On December 10, 2020, the Company made a loan (the "Partnership Loan") to the Company’s previously unconsolidated joint venture in Fashion District Philadelphia to fund the entirety of a $100.0 million repayment to reduce the mortgage loan on Fashion District Philadelphia from $301.0 million to $201.0 million.

This mortgage loan now matures on January 22, 2024, assuming exercise of a one-year extension option, and bears interest at LIBOR plus 3.5%, with a LIBOR floor of 0.50%.

The partnership agreement for the joint venture was amended in connection with the Partnership Loan, and pursuant to the amended agreement, the Partnership Loan plus 15% accrued interest must be repaid prior to the resumption of 50/50 cash distributions to the Company and its joint venture partner (See Note 15–Consolidated Joint Venture and Acquisitions of the Company’s Consolidated Financial Statements).

On December 15, 2020, the Company closed on a loan extension agreement for the Fashion Outlets of Niagara $101.5 million loan.

On December 15, 2020, the Company closed on a loan extension agreement for the $101.5 million loan on Fashion Outlets of Niagara.

Under the extension agreement the original loan maturity date of October 6, 2020 was extended to October 6, 2023.

The loan amount and interest rate are unchanged following the extension.

The loan amount and interest rate were unchanged following the extension.

On December 29, 2020, the Company’s joint venture closed on a one-year maturity date extension for the FlatIron Crossing loan to January 5, 2022.

The interest rate increased from 3.85% to 4.10%, and the Company’s joint venture repaid $15.0 million, $7.6 million at the Company's pro rata share, of the outstanding loan balance at closing.

At December 31, 2020, the Company’s pro rata share of the loan is $102.6 million.

On January 22, 2021, the Company closed on a one-year extension for Green Acres Mall $270.6 million loan to February 3, 2022, which also includes a one-year extension to February 3, 2023.

As discussed below, the Company's joint venture replaced this loan with a new loan prior to its maturity date that was further extended to February 2022.

On January 22, 2021, the Company closed on a one-year extension for the Green Acres Mall $258.2 million loan to February 3, 2022, which also included a one-year extension option to February 3, 2023 which has been exercised.

The interest rate remained unchanged, and the Company repaid $9 million of the outstanding loan balance at closing.

On March 25, 2021, the Company closed on a two-year extension for the Green Acres Commons $124.6 million loan to March 29, 2023.

The interest rate is LIBOR plus 2.75% and the Company repaid $4.7 million of the outstanding loan balance at closing.

On April 14, 2021, the Company terminated its existing credit facility and entered into a new credit agreement, which provides for an aggregate $700 million facility, including a $525 million revolving loan facility that matures on April 14, 2023, with a one-year extension option, and a $175 million term loan facility that matures on April 14, 2024 (See "—Liquidity and Capital Resources").

On October 26, 2021, the Company's joint venture in The Shops at Atlas Park replaced the existing loan on the property with a new $65 million loan that bears interest at a floating rate of LIBOR plus 4.15% and matures on November 9, 2026, including extension options.

The loan is covered by an interest rate cap agreement that effectively prevents LIBOR from exceeding 3.0% through November 7, 2023.

On February 2, 2022, the Company’s joint venture in FlatIron Crossing replaced the existing $197 million loan on the property with a new $175 million loan that bears interest at SOFR plus 3.45% and matures on February 9, 2027, including extension options.

The loan is covered by an interest rate cap agreement that effectively prevents SOFR from exceeding 4.0% through February 15, 2024.

During the second quarter of 2020 and in July 2020, the Company secured agreements with its mortgage lenders on 19 mortgage loans to defer approximately $47.2 million of both second and third quarter of 2020 debt service payments at the Company’s pro rata share during the COVID-19 pandemic.

Of the deferred payments, $28.1 million and $36.9 million was repaid in the three months and twelve months ended December 31, 2020, respectively;

and the remaining balance has now been fully repaid during the first quarter of 2021.

Redevelopment and Development Activity:

and the remaining balance was fully repaid during the first quarter of 2021.

Redevelopment and Development Activities:

The Company's joint venture with Hudson Pacific Properties is redeveloping One Westside into 584,000 square feet of creative office space and 96,000 square feet of dining and entertainment space.

The entire creative office space has been leased to Google and is expected to be completed in 2022.

During the fourth quarter of 2021, the joint venture delivered the office space to Google for tenant improvement work, which Google has commenced.

The total cost of the project is estimated to be between $500.0 million and $550.0 million, with $125.0 million to $137.5 million estimated to be the Company's pro rata share.

The Company has funded $77.7 million of the total $310.9 million incurred by the joint venture as of December 31, 2020.

The Company has incurred $106.9 million of the total $427.7 million incurred by the joint venture as of December 31, 2021.

The joint venture expects to fund the remaining costs of the development with its new $414.6 million construction loan (See "—Financing Activities").

The Company has a 50/50 joint venture with Simon Property Group to develop Los Angeles Premium Outlets, a premium outlet center in Carson, California that is planned to open with approximately 400,000 square feet, followed by an additional 165,000 square feet in the second phase.

The Company has a 50/50 joint venture with Simon Property Group, which was initially formed to develop Los Angeles Premium Outlets, a premium outlet center in Carson, California.

The Company has funded $41.4 million of the total $82.8 million incurred by the joint venture as of December 31, 2021.

In connection with the closures and lease rejections of several Sears stores owned or partially owned by the Company, the Company anticipates spending between $130.0 million to $160.0 million at the Company’s pro rata sha re to redevelop the Sears stores.

The anticipated openings of such redevelopments are expected to occur over several years.

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Other Transactions and Events:

On January 1, 2018, upon adoption of ASU 2014-09, "Revenue From Contracts With Customers, (ASC 606)", the Company changed its accounting for Chandler Freehold from a co-venture arrangement to a financing arrangement ("Financing Arrangement").

As a result, the Company no longer records co-venture expense for its partner's share of the income of Chandler Freehold.

Under the Financing Arrangement, the Company recognizes interest expense on (i) the changes in fair value of the

Financing Arrangement obligation, (ii) any payments to the joint venture partner equal to their pro rata share of net income and (iii) any payments to the joint venture partner less than or in excess of their pro rata share of net income.

On February 1 and 2, 2018, the Company reduced its workforce by approximately 10 percent.

The Company incurred a one-time charge of $12.7 million in connection with the workforce reduction during the year ended December 31, 2018.

As a result of the workforce reduction, the Company, exclusive of the one-time charge, reduced expenses by approximately $10.0 million during the year ending December 31, 2018.

During the year ended December 31, 2018, the Company incurred $19.4 million in costs associated with activities related to shareholder activism.

These costs were primarily for legal and advisory services.

On January 1, 2019, the Company adopted Accounting Standards Codification ("ASC") 842 "Leases", under the modified retrospective method.

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Upon adoption of the new standard, the Company has presented all revenues associated with leases as leasing revenue on its consolidated statements of operations.

For comparison purposes, the Company has reclassified minimum rents, percentage rents, tenant recoveries and other leasing income to leasing revenue for the year ended December 31, 2018 to conform to the presentation for the years ended December 31, 2020 and 2019.

The new standard requires the Company to reduce leasing revenue for credit losses associated with lease receivables.

For the year ended December 31, 2018, the provision for bad debts is included in shopping center and operating expenses.

The new standard requires the Company to reduce leasing revenue for credit losses

associated with lease receivables.

In addition, straight-line rent receivables are written off when the Company believes there is reasonable uncertainty regarding a tenant's ability to complete the term of the lease.

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Prior to January 1, 2019, these costs were capitalizable and therefore the new lease standard resulted in certain of these costs being expensed as incurred.

For comparison purposes, the Company has reclassified leasing costs that were included in management companies' operating expenses to leasing expenses for the year ended December 31, 2018 to conform to the presentation for the years ended December 31, 2020 and 2019.

In March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization.

As a result, all of the markets that the Company operates in were subject to stay-at-home orders, and the majority of its properties were temporarily closed in part or completely.

As of October 7, 2020, all of the Company’s properties resumed operations and have remained open since that time, including Queens Center and Kings Plaza in New York City, which re-opened in early September 2020 after being closed since March 2020, and nine indoor California malls that had previously re-opened in May and early June 2020, but were closed for a second time in July 2020 pursuant to a statewide mandate.

Those nine indoor California malls include Fresno Fashion Fair, Inland Center, Pacific View, The Mall at Victor Valley, The Oaks and Vintage Faire Mall, each of which re-opened in late August 2020, and Lakewood Center, Los Cerritos Center and Stonewood Center, each of which re-opened on October 7, 2020.

All Centers have been open and operating since October 7, 2020, and government mandated restrictions have generally been eased during 2021.

Following staggered re-openings during 2020, all Centers have been open and operating since October 7, 2020.

As of the date of this Annual Report on Form 10-K, government-imposed capacity restrictions resulting from COVID-19 have been essentially eliminated across the Company’s markets.

Although overall fundamentals at the Centers continued to improve during 2021, the Company expects that the COVID-19 pandemic, including the emergence of new variants, will continue to negatively impact its results for 2022 due, in part, to reduced occupancy relative to pre-COVID levels and additional Anchor closures, among other factors.

The Company continues to work with all of its stakeholders to mitigate the impact of COVID-19.

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The Company provides round-the-clock security to enforce policies and regulations, to discourage congregation and to encourage proper distancing.

Each property deploys robust messaging to inform all of the Company’s stakeholders of its

operating standards and requirements within a multi-media platform that includes abundant on premise signage, digital and social messaging, and information within its property and corporate websites.

Each property deploys robust messaging to inform all of the Company’s stakeholders of its operating standards and requirements within a multi-media platform that includes abundant on premise signage, digital and social messaging, and information within its property and corporate websites.

The Company believes that, due to the quality of design and construction of its malls, it will be able to continue to provide a safe indoor environment for its employees, tenants, service providers and shoppers.

Although the Company has incurred, and will continue to incur, some incremental costs associated with COVID-19 operating protocols and programs, these costs have not been, and are not anticipated to be, significant.

While the ultimate adverse impact of this outbreak is unknown at this time, the Company’s financial condition and the results of its operations have been negatively impacted, as certain tenants delayed rent payments during the fourth quarter of 2020 and some tenants have continued to request delayed or reduced rent payments for January and beyond.

See “Outlook” in Results of Operations for a further discussion of the forward-looking impact of COVID-19 and the Company’s strategic plan to mitigate the anticipated negative impact on its financial condition and results of operations.

In March 2020, the Company declared a reduced second quarter dividend of $0.50 per share of its common stock, which was paid on June 3, 2020 in a combination of cash and shares of common stock, at the election of the stockholder, subject to a limitation that the aggregate amount of cash payable to holders of the Company’s common stock would not exceed 20% of the aggregate amount of the dividend, or $0.10 per share, for all stockholders of record on April 22, 2020.

The amount of the dividend represents a reduction from the Company’s first quarter dividend, and was paid in a combination of cash and shares of common stock to preserve liquidity in light of the impact and uncertainty arising out of the COVID-19 outbreak.

On July 24, 2020, the Company declared a further reduced third quarter cash dividend of $0.15 per share of its common stock, which was paid in cash on September 8, 2020 to stockholders of record on August 19, 2020.

The amount of the dividend represented a reduction from the Company’s first quarter 2020 dividend, and was paid in a combination of cash and shares of common stock to preserve liquidity in light of the impact and uncertainty arising out of the COVID-19 pandemic.

The Company declared a further reduced cash dividend of $0.15 per share of its common stock for the third and fourth quarters of 2020 and for the first, second and third quarters of 2021.

On October 28, 2021, the Company declared a fourth quarter cash dividend of $0.15 per share of its common stock, which was paid on December 3, 2021 to stockholders of record on November 9, 2021.

On January 28, 2021, the Company declared a first quarter cash dividend of $0.15 per share of its common stock, which will be paid on March 3, 2021 to stockholders of record on February 19, 2021.

On January 27, 2022, the Company declared a fourth quarter cash dividend of $0.15 per share of its common stock, which will be paid on March 3, 2022 to stockholders of record on February 18, 2022.

The dividend amount will be reviewed by the Board on a quarterly basis.

See “—Liquidity and Capital Resources” for a further discussion of the Company’s anticipated liquidity needs, and the measures taken by the Company to meet those needs.

On December 31, 2020, the Company and its joint venture partner, Seritage, entered into a distribution agreement.

On December 31, 2020, the Company and its joint venture partner, Seritage Growth Properties (“Seritage”), entered into a distribution agreement.

The joint venture owned nine properties, including the former Sears parcels at the South Plains Mall and the Arrowhead Towne Center.

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The Company now owns 100% of the former Sears parcel at South Plains Mall.

Effective December 31, 2020, the Company consolidates its 100% interest in the Sears parcel at South Plains Mall in the Company’s consolidated financial statements (See Note 16–Consolidated Joint Venture and Acquisitions of the Company’s consolidated financial statements).

In the last five years, inflation has not had a significant impact on the Company because of a relatively low inflation rate.

December 31, 2020, the Company consolidates its 100% interest in the Sears parcel at South Plains Mall in the Company’s consolidated financial statements (See Note 15-Consolidated Joint Venture and Acquisitions of the Company’s Consolidated Financial Statements).

In connection with the commencement of separate "at the market" offering programs, on each of February 1, 2021 and March 26, 2021, which are referred to as the "February 2021 ATM Program" and the "March 2021 ATM Program," respectively, and collectively as the "ATM Programs," the Company entered into separate equity distribution agreements with certain sales agents pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500 million under each of the February 2021 ATM Program and the March 2021 ATM Program, or a total of $1 billion under the ATM Programs.

As of December 31, 2021, the Company had approximately $151.7 million of gross sales of its common stock available under the March 2021 ATM Program.

The February 2021 ATM Program was fully utilized as of June 30, 2021 and is no longer active.

See “—Liquidity and Capital Resources” for a further discussion of the Company’s anticipated liquidity needs, and the measures taken by the Company to meet those needs.

In the last five years, inflation has not had a significant impact on the Company.

Most of the leases at the Centers have rent adjustments periodically throughout the lease term.

These rent increases are either in fixed increments or based on using an annual multiple of increases in the Consumer Price Index ("CPI").

In addition, approximately 3% to 18% of the leases for spaces 10,000 square feet and under expire each year, which enables the Company to replace existing leases with new leases at higher base rents if the rents of the existing leases are below the then existing market rate.

These rent increases are either in fixed increments or based on using an annual multiple of increases in the Consumer Price Index.

In addition, the routine expiration of leases for spaces 10,000 square feet and under each year (See "Item I.

Business of the Company—Lease Expirations"), enables the Company to replace existing leases with new leases at higher base rents if the rents of the existing leases are below the then existing market rate.

The Company has generally entered into leases that require tenants to pay a stated amount for operating expenses, generally excluding property taxes, regardless of the expenses actually incurred at any Center, which places the burden of cost control on the Company.

Additionally, certain leases require the tenants to pay their pro rata share of operating expenses.

Critical Accounting Policies

Additionally, most leases require the tenants to pay their pro rata share of property taxes and utilities.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

The Company’s significant accounting policies and estimates are described in more detail in Note 2-Summary of Significant Accounting Policies in the Company’s Notes to the Consolidated Financial Statements.

Some of these estimates and assumptions include judgments on revenue recognition, estimates for common area maintenance and real estate tax accruals, provisions for uncollectible accounts, impairment of long-lived assets, the allocation of purchase price between tangible and intangible assets, capitalization of costs and fair value measurements.

The Company's significant accounting policies are described in more detail in Note 2—Summary of Significant Accounting Policies in the Company's Notes to the Consolidated Financial Statements.

However, the following policies are deemed to be critical.

The Company believes the following are its critical accounting estimates:

Acquisitions:

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Leasing commissions and legal costs are recorded in deferred charges and other assets and are amortized over the remaining lease terms.

The value of in-place leases is recorded in deferred charges and other assets and amortized over the remaining lease terms plus any below-market fixed rate renewal options.

The value of in-place leases is recorded in deferred charges and other assets and amortized over the remaining lease terms plus

any below-market fixed rate renewal options.

Above or below-market leases are classified in deferred charges and other assets or in other accrued liabilities, depending on whether the contractual terms are above or below-market, and the asset or liability is amortized to minimum rents over the remaining terms of the leases.

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Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as

inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals.

Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity's own assumptions, as there is little, if any, related market activity.

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For the comparison of the year ended December 31, 2021 to the year ended December 31, 2020 and the comparison of the year ended December 31, 2020 to the year ended December 31, 2019, the Redevelopment Properties are Paradise Valley Mall and certain ground up developments.

For the comparison of the year ended December 31, 2020 to the year ended December 31, 2019, the JV Transition Centers are Fashion District Philadelphia and Sears South Plains.

For the comparison of the year ended December 31, 2019 to the year ended December 31, 2018, the JV Transition Centers is One Westside.

For the comparison of the year ended December 31, 2021 to the year ended December 31, 2020 and the comparison of the year ended December 31, 2020 to the year ended December 31, 2019, the JV Transition Centers are Fashion District Philadelphia and Sears South Plains.

The change in revenues and expenses at the JV Transition Centers is primarily due to the conversion of Fashion District Philadelphia from an Unconsolidated Joint Venture Center to a Consolidated Center (See Note 15–Consolidated Joint Venture and Acquisitions in the Company's Notes to the Consolidated Financial Statements).

For comparison of the year ended December 31, 2020 to the year ended December 31, 2019 and the comparison of the year ended December 31, 2019 to the year ended December 31, 2018, the Disposition Property is Promenade at Casa Grande .

For comparison of the year ended December 31, 2021 to the year ended December 31, 2020, the Disposition Properties are Paradise Valley Mall and Tucson La Encantada.

For comparison of the year ended December 31, 2020 to the year ended December 31, 2019, the Disposition Property is Promenade at Casa Grande .

Unconsolidated joint ventures are reflected using the equity method of accounting.

The Company's pro rata share of the results from these Centers is reflected in the consolidated statements of operations as equity in (loss) income of unconsolidated joint ventures.

The Company's pro rata share of the results from these Centers is reflected in the consolidated statements of operations as equity in income (loss) of unconsolidated joint ventures.

The Company considers tenant annual sales per square foot (for tenants in place for a minimum of twelve months or longer and 10,000 square feet and under), occupancy rates (excluding large retail stores or "Anchors") and releasing spreads (i.e.

a comparison of initial average base rent per square foot on leases executed during the trailing twelve months to average base rent per square foot at expiration for the leases expiring during the trailing twelve months based on the spaces 10,000 square feet and under) to be key performance indicators of the Company's internal growth.

Tenant sales per square foot were $801 for the twelve months ended December 31, 2019.

Given the widespread closure of the majority of the Company's tenants during April and portions of May through October 2020 as a result of COVID-19 (See "Other Transactions and Events" in Management's Overview and Summary), the tenant sales per square foot metric is not available for the twelve months ended December 31, 2020.

However, given the majority of the Company’s Centers were open

during the fourth quarter of 2020, the Company is able to provide a comparable tenant sales measurement for the fourth quarter.

Comparable tenant sales declined approximately 16% during the three months ended December 31, 2020 compared to the same period during 2019.

The leased occupancy rate decreased from 94.0% at December 31, 2019 to 89.7% at December 31, 2020.

Releasing spreads declined as the Company executed leases at an average rent of $50.69 for new and renewal leases executed compared to $52.60 on leases expiring, resulting in a releasing spread of $1.91 per square foot representing a 3.6% decrease for the trailing twelve months ended December 31, 2020.

The Company continues to renew or replace leases that are scheduled to expire in 2021, however, the Company cannot be certain of the impact that COVID-19 will have on its ability to sign, renew or replace leases expiring in 2021 or beyond.

These leases that are scheduled to expire represent approximately 1.0 million square feet of the Centers, accounting for 16.3% of the GLA of mall stores and freestanding stores, for spaces 10,000 square feet and under, as of December 31, 2020.

These calculations exclude Centers under development or redevelopment and property dispositions (See "Acquisitions and Dispositions" and "Redevelopment and Development Activities" in Management's Overview and Summary), and include square footage of Centers owned by joint ventures at the Company’s share.

During the fourth quarter of 2021, comparable tenant sales for spaces less than 10,000 square feet across the portfolio increased by 12% relative to pre-COVID sales during the fourth quarter of 2019.

The leased occupancy rate increased to 91.5%, a 1.80% increase from 89.7% at December 31, 2020 and a 3.0% increase from 88.5% at March 31, 2021, which was the Company’s lowest occupancy level since the start of the COVID-19 pandemic.

Releasing spreads increased as the Company executed leases at an average rent of $60.02 for new and renewal leases executed compared to $57.23 on leasing expiring, resulting in a releasing spread increase of $2.79 per square foot, or 5%, for the twelve months ended December 31, 2021.

The Company continues to renew or replace leases that are scheduled to expire in 2022, however, for a variety of factors, the Company cannot be certain of its ability to sign, renew or replace leases expiring in 2022 or beyond.

These leases that are scheduled to expire in 2022 represent approximately 1.0 million square feet of the Centers, accounting for 16.93% of the GLA of mall stores and freestanding stores, for spaces 10,000 square feet and under, as of December 31, 2021.

These calculations exclude Centers under development or redevelopment and property dispositions (See "Dispositions" and "Redevelopment and Development Activities" in Management's Overview and Summary), and include square footage of Centers owned by joint ventures at the Company’s share.

2022 lease expirations continue to be an important focal point for the Company.

The Company now has commitments on 60% of the remaining 2021 expiring square footage with another 40% in the letter of intent stage, disregarding leases for stores that have closed or for stores that tenants have indicated they intend to close.

The Company has entered into 80 leases for new stores totaling approximately 494,000 square feet that have opened or are planned for opening in 2021.

While there may be additional new store openings in 2021, any such leases are not yet executed.

The Company now has commitments on approximately 39% of the remaining 2022 expiring square footage with another approximately 55% in the letter of intent stage, disregarding leases for stores that have closed or for stores that tenants have indicated they intend to close.

The Company has entered into 118 leases for new spaces totaling approximately 1.2 million square feet that have opened or are planned for opening in 2022, and another 15 leases for new spaces totaling approximately 840,000 square feet opening after 2022.

While there may be additional new space openings in 2022, any such leases are not yet executed.

During the trailing twelve months ended December 31, 2021, the Company signed 308 new leases and 525 renewal leases comprising approximately 3.5 million square feet of GLA, of which 2.2 million square feet is related to the consolidated Centers.

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The majority of the Company's COVID-19 related lease amendments are excluded from these numbers.

The Company has a long-term four-pronged business strategy that focuses on the acquisition, leasing and management, redevelopment and development of Regional Shopping Centers.

Although the Company believes that overall regional shopping center fundamentals in its markets appear to be improving, the Company expects that its results for 2021 will be negatively impacted by the COVID-19 pandemic, Anchor closures and tenant bankruptcies, among other factors.

All Centers have been open and operating since October 7, 2020, and government mandated restrictions have generally been eased during 2021.

As a result of COVID-19 (See "Other Transactions and Events" in Management's Overview and Summary) and subsequent government mandates, all but a few of the Company’s Centers closed in March 2020, except for the continued operation of essential retail and services.

In total, approximately 74% of the gross leasable area, which was previously occupied prior to the COVID-19 closures, was closed during this time.

Those nine indoor California malls include Fresno Fashion Fair, Inland Center, Pacific View, The Mall at Victor Valley, The Oaks and Vintage Faire Mall, each of which re-opened in late August 2020, and Lakewood Mall, Los Cerritos Center and Stonewood Mall, each of which re-opened on October 7, 2020.

The Company’s rent collections were initially negatively impacted in the second and third quarters of 2020 but have significantly improved as the year progressed.

The Company collected approximately 89% of rents billed for the three months ended September 30, 2020, and 93% of rents billed for the three months ended December 31, 2020.

The Company has collected approximately 89% of rents billed for January 2021.

The Company continues to make significant progress in its negotiations with national and local tenants to secure rental payments, despite a significant portion of the Company’s tenants requesting rental assistance, whether in the form of deferral or rent reduction.

For example (in each case, based on gross rent), of the nearly 200 national tenants in the Company’s portfolio, the Company has agreed to repayment terms with and/or received payments from approximately 93%, the Company is negotiating terms with another 1%, approximately 2% have filed bankruptcy and have either liquidated or plan to liquidate their entire store fleet and the balance are unresolved at this time.

The lease amendments negotiated by the Company have resulted in a combination of rent payment deferrals extending into 2021 and rent abatements.

The majority of the Company’s leases require continued payment of rent by the Company’s tenants during the period of government mandated closures caused by COVID-19.

Many of the Company’s leases contain co-tenancy clauses, which provide for reduced rent and/or termination rights if Anchors close and/or occupancy falls below threshold levels.

Company does not believe that the temporary closures of Anchors or other tenants during the COVID-19 stay-at-home mandates have triggered co-tenancy clauses within its leases.

However, certain Anchor or small tenant closures have become permanent following the re-opening of the Company's properties, and co-tenancy clauses within certain leases may be triggered as a result.

The Company does not anticipate the negative impact of such clauses on lease revenue will be significant.

The Company has a long-term four-pronged business strategy that focuses on the acquisition, leasing and management, redevelopment and development of Regional Town Centers.

Although fundamentals at the Centers continued to improve during 2021, the Company expects that the COVID-19 pandemic, including the emergence of new variants, will continue to negatively impact its results for 2022 due, in part, to reduced occupancy relative to pre-COVID levels and additional Anchor closures, among other factors.

All Centers have been open and operating since October 7, 2020.

As of the date of this Annual Report on Form 10-K, government-imposed capacity restrictions resulting from COVID-19 have been essentially eliminated across the Company’s markets.

The Company experienced a positive impact to its leasing revenue during the three and twelve months ended December 31, 2021.

Leasing revenue increased by approximately 12.4% and 3.9%, including joint ventures at the Company’s share, compared to the three and twelve months ending December 31, 2020, respectively.

This increase was primarily due to (i) increases in percentage rent, which was primarily driven by accelerating tenant sales and all of the Company’s Centers being fully open and operating in 2021 as compared to 2020;

and (ii) decreases in bad debt reserves and decreases in retroactive rent abatements incurred in 2021 compared to 2020.

During the twelve months ended December 31, 2021, certain of the Company’s previously reserved accounts receivable were collected resulting in a reduction of bad debt expense.

These collections were a result of improving economic conditions that have become evident as the impact of the pandemic has eased as well as collection efforts by the Company.

As a result of government-imposed capacity restrictions resulting from COVID-19 essentially being eliminated across the Company’s markets, combined with pent up demand, the positive economic impacts of consumer savings, fiscal stimulus and other factors, sales and traffic at the Company’s Centers continued to greatly improve during the fourth quarter of 2021 with extremely high customer conversion rates.

Traffic levels continue to range in the mid 90%’s relative to 2019.

Comparable tenant sales from spaces less than 10,000 square feet across the portfolio increased by 12% relative to pre-COVID sales during the fourth quarter of 2019.

For the twelve months ended December 31, 2021, comparable tenant sales from spaces less than 10,000 square feet across the portfolio increased by 10% relative to sales during the same pre-COVID twelve-month period of 2019.

For the three months ended December 31, 2021, the Company signed 146 leases for approximately 0.5 million square feet.

For the twelve months ended December 31, 2021, the Company signed 833 leases for approximately 3.5 million square feet, which represents a 2% increase on a same center basis in the amount of leased square feet relative to what was leased over the same pre-COVID twelve-month period ended December 31, 2019.

2021 was the highest volume leasing year for the Company since 2015, when viewed on a same center basis.

The Company believes that diversity of use within its tenant base will be a prominent internal growth catalyst at its Centers going forward, as new uses enhance the productivity and diversity of the tenant mix and have the potential to significantly increase customer traffic at the applicable Centers.

During the year ended December 31, 2021, the Company signed deals for new stores with approximately 100 new-to-Macerich portfolio uses for over 840,000 square feet, with another nearly 300,000 square feet of such new-to-Macerich portfolio uses currently in negotiation as of the date of this Annual Report on Form 10-K.

As of December 31, 2021, the leased occupancy rate increased to 91.5% compared to the leased occupancy rate of 90.3% at September 30, 2021 and 89.7% at December 31, 2020.

The leased occupancy rate has improved by 3.0% from the lowest occupancy level since the start of the COVID-19 pandemic, which was 88.5% as of March 31, 2021.

The Company’s rent collections have continued to significantly improve and are now comparable to pre-COVID levels.

The Company has made significant progress in its negotiations with national and local tenants to secure rental payments, despite a significant portion of the Company’s tenants having requested rental assistance, whether in the form of deferral or rent reduction.

This effort of negotiating COVID-19 rental assistance agreements is essentially now completed.

The lease amendments negotiated by the Company related to COVID-19 have resulted in a combination of rent payment deferrals and rent abatements.

The majority of the Company’s leases required continued payment of rent by the Company’s tenants during the period of government mandated closures caused by COVID-19.

Additionally, many of the Company’s leases contain co-tenancy clauses.

Certain Anchor or small tenant closures have become permanent following the re-opening of the Company’s Centers, and co-tenancy clauses within certain leases may be triggered as a result.

The Company does not anticipate that the negative impact of such clauses on lease revenue will be significant.

During the years ended December 31, 2021 and 2020, the Company incurred $47.6 million and $56.4 million, respectively, of rent abatements at the Company’s share, relating primarily to 2020 rents as a result of COVID-19 and negotiated $4.6 million and $32.9 million of rent deferrals during the years ended December 31, 2021 and 2020, respectively, at the Company’s share.

During the three months ended December 31, 2021 and 2020, the Company incurred $1.3 million and $37.9 million, respectively, of rent abatements at the Company’s share relating primarily to 2020 rents as a result of COVID-19.

The Company negotiated $0.3 million of rent deferrals during the three months ended December 31, 2021.

As of December 31, 2021, $4.0 million of the rent deferrals remain outstanding, with $2.6 million scheduled to be repaid during the remainder of 2022 and the balance scheduled for repayment in 2023 and thereafter.

During 2020, there were 42 bankruptcy filings involving the Company’s tenants, totaling 322 leases and involving approximately 6.0 million square feet and $85.4 million of annual leasing revenue at the Company’s share.

The Company anticipates that there may likely be further bankruptcy filings by tenants at the Company’s properties, which are accelerated as a result of general conditions caused by COVID-19.

As previously disclosed by the Company in its prior filings with the SEC, the Company has submitted recovery claims under its insurance coverage due to business interruption from COVID-19.

As of December 31, 2020, the Company does not believe it is likely that it will be able to collect on these claims given the facts and circumstances regarding the COVID-19 pandemic.

The Company has experienced, and expects to continue to experience, a negative impact to its leasing revenue and the occupancy rates at its Centers due to COVID-19.

For the twelve months ended December 31, 2020, leasing revenue decreased by approximately 13%, including joint ventures at the Company’s share, compared to the twelve months ended December 31, 2019.

As of December 31, 2020, the leased occupancy rate decreased to 89.7% from 94.0% at December 31, 2019.

The Company anticipates a further decline to occupancy rates from tenant bankruptcies and pre-lease termination abandonments by certain tenants.

In addition, the volume of leasing transactions declined significantly in the second and third quarters of 2020, however the Company saw significant improvement during the fourth quarter in tenant openings and leasing activity.

During the fourth quarter of 2020, the Company entered into 217 leases for approximately 900,000 square feet, which was only approximately 10% less square footage than was signed pre-COVID-19 within the fourth quarter of 2019.

During this period of disrupted rent collections due to COVID-19, the Company has taken numerous measures to preserve its liquidity, including among others:

• The Company has drawn the majority of the remaining capacity on its $1.5 billion revolving line of credit.

As of December 31, 2020, the Company had approximately $555 million of cash, including its pro rata share from its unconsolidated joint ventures.

The Company will incur additional interest expense during the period that it continues to carry higher than normal cash balances on its consolidated balance sheet.

The period of continued cash retention is uncertain at this time.

• The Company paid a reduced quarterly dividend of $0.50 per share of its common stock on June 3, 2020, in a combination of 20% cash and 80% of shares of the Company’s common stock.

On October 29, 2020, the Company declared a fourth quarter cash dividend of $0.15 per share of its common stock, which was paid on December 3, 2020 to stockholders of record on November 9, 2020.

On January 28, 2021, the Company declared a first quarter dividend of $0.15 per share of its common stock, which will be paid on March 3, 2021 to stockholders of record on February 19, 2021.

When annualizing the current dividend rate of $0.15 per share for four quarters, the Company would retain over $350 million of cash relative to the 2019 dividend level of $3.00 per share of common stock.

• The Company spent approximately $100 million less in 2020 on redevelopment relative to its original pre-COVID-19 plans, and anticipates spending less than $100 million in 2021 on redevelopment, excluding One Westside which is fully funded by a construction loan facility.

• The Company reduced its planned 2020 capital expenditures at its properties by approximately 64% down to approximately $16 million at the Company’s share.

• The Company reduced its controllable shopping center expenses by approximately $19 million in 2020 at the Company’s share.

• During the second quarter of 2020 and in July 2020, the Company secured agreements with its mortgage lenders on 19 mortgage loans to defer approximately $47.2 million of both second and third quarter of 2020 debt service payments at the Company’s pro rata share during the COVID-19 pandemic.

Of the deferred payments, $28.1 million and $36.9 million was repaid in the three months and twelve months ended December 31, 2020, respectively;

and the remaining balance has now been fully repaid during the first quarter of 2021.

During 2021, the Company expects to generate significant cash flow from operations after recurring operating capital expenditures, leasing capital expenditures and after dividend.

This assumption does not include any potential capital generated

from dispositions, refinancings or issuances of common equity.

This surplus will be used to de-lever as well as to fund our development pipeline.

Given the continued disruption and uncertainties from COVID-19 and the impact on the capital markets, the Company does not anticipate it will be able to refinance its near-term maturing mortgages.

As a result, the Company has secured short-term extensions of its near-term maturing non-recourse mortgage loans on Danbury Fair Mall, Fashion Outlets of Niagara, FlatIron Crossing and Green Acres Mall, and the Company is in the process of securing a two-year extension on Green Acres Commons (See "Financing Activities" in Management's Overview and Summary).

The Company is currently in negotiations with lenders for a new credit facility to replace its existing credit facility that expires on July 6, 2021.

While the Company cannot predict what the terms of any new facility will be, it may include a lower lending commitment and require security.

Any final terms of a new credit facility are subject to ongoing negotiations and may change.

During 2021, the pace of such filings has decreased substantially, as there were ten bankruptcy filings involving the Company’s tenants, totaling 62 leases and involving approximately 369,000 square feet and $11.9 million of annual leasing revenue at the Company’s share.

This included two leases totaling 139,000 square feet with a single department store retailer that quickly emerged from bankruptcy and assumed both of its leases with the Company.

Excluding this department store retailer, bankruptcy filings during 2021 only involved approximately 230,000 square feet.

The Company anticipates that the pace of bankruptcy filings in 2022 will similarly be lower than years prior to 2020.

During 2022, the Company expects to generate positive cash flow from operations after recurring operating capital expenditures, leasing capital expenditures and payment of dividends.

This assumption does not include any potential capital generated from dispositions, refinancings or issuances of common equity.

This expected surplus will be used to de-lever the Company’s balance sheet as well as to fund the Company’s development and redevelopment pipeline (See "—Redevelopment and Development Activities" in Management's Overview and Summary).

Given the prior disruption from COVID-19 and the related impacts on the capital markets, the Company has secured extensions of term from one to three years of its near-term maturing non-recourse mortgage loans totaling an aggregate of approximately $950 million on Danbury Fair Mall, The Shops at Atlas Park, Fashion Outlets of Niagara, FlatIron Crossing, Green Acres Mall and Green Acres Commons.

On October 26, 2021, the Company’s joint venture closed a $65 million, five-year loan, including extension options, that bears interest at LIBOR plus 4.15% to refinance The Shops at Atlas Park, which replaced a $67.5 million loan on the property.

Additionally, on February 2, 2022, the Company’s joint venture in FlatIron Crossing replaced the existing $197 million loan on the property with a new $175 million loan that bears interest at SOFR plus 3.45% and matures on February 9, 2027, including extension options.

(See “—Financing Activities” in Management’s Overview and Summary).

During the second quarter of 2021, the Company repaid and terminated its existing credit facility and entered into a new credit agreement, which provides for an aggregate $700 million facility, including a $525 million revolving loan facility that matures on April 14, 2023, with a one-year extension option, and a $175 million term loan facility that matures on April 14, 2024.

Concurrent with the closing of this credit facility, the Company repaid $985.0 million of debt (See “—Liquidity and Capital Resources”).

As of December 31, 2021, the outstanding balance on the revolving loan facility was $119 million, less the amount of unamortized deferred financing costs of $14.2 million.

On September 20, 2021, the Company paid off the remaining balance outstanding on the term loan facility with proceeds from the sale of Tucson La Encantada (See “Dispositions” in Management’s Overview and Summary).

Rising interest rates could increase the cost of the Company’s borrowings due to its outstanding floating-rate debt and lead to higher interest rates on new fixed-rate debt.

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Such agreements, subject to current market conditions, allow the Company to replace floating-rate debt with fixed-rate debt in order to achieve its desired ratio of floating-rate to fixed-rate debt.

In today’s decreasing interest rate environment, the swap agreements that the Company has entered into have resulted in increases in interest expense.

Those swap agreements expire in September 2021.

However, any interest rate cap or swap agreements that the Company enters into may not be effective in reducing its exposure to interest rate changes.

For example, the Company’s prior swap agreements, which expired on September 30, 2021, resulted in increases in interest expense in 2021.

The Company did not have any swap agreements in place as of December 31, 2021.

Comparison of Years Ended December 31, 2021 and 2020

Leasing revenue increased by $47.2 million, or 6.4%, from 2020 to 2021.

The increase in leasing revenue is attributed to increases of $23.2 million from the Same Centers and $31.8 million from the JV Transition Centers offset in part by $7.8 million from the Disposition Properties.

Leasing revenue includes the amortization of above and below-market leases, the amortization of straight-line rents, lease termination income and the provision for bad debts.

The amortization of above and below-market leases decreased from $2.1 million in 2020 to $1.9 million in 2021.

The amortization of straight-line rents

decreased from $24.8 million in 2020 to $5.9 million in 2021.

Lease termination income increased from $8.3 million in 2020 to $19.1 million in 2021.

Percentage rent increased from $15.5 million in 2020 to $58.8 million in 2021.

Provision for bad debts decreased from $44.3 million in 2020 to a recovery of $(6.4) million in 2021.

The increase in leasing revenue and decrease in bad debt at the Same Centers is primarily the result of all Centers being open in 2021 compared to the majority of Centers being closed for portions of 2020 and an increase in tenant sales to pre-COVID 2019 levels (See "Other Transactions and Events" in Management's Overview and Summary).

Other income increased from $22.2 million in 2020 to $33.9 million in 2021.

This is primarily due to increased parking garage income resulting from increased traffic at the Centers (See "Other Transactions and Events" in Management's Overview and Summary).

Management Companies' revenue increased from $23.5 million in 2020 to $26.0 million in 2021.

The increase is primarily the result of increased management fees in 2021 due to all Centers being open in 2021 compared to Centers being closed for portions of 2020.

Shopping Center and Operating Expenses:

Shopping center and operating expenses increased $37.8 million, or 14.7%, from 2020 to 2021.

The increase in shopping center and operating expenses is attributed to increases of $21.4 million from the Same Centers, $19.6 million from the JV Transition Centers and $0.2 million from the Redevelopment Properties offset in part by $3.4 million from the Disposition Properties.

The increase in shopping center and operating expenses at the Same Centers is primarily the result of all Centers being opened in 2021 compared to the majority of Centers being closed for portions of 2020 (See "Other Transactions and Events" in Management's Overview and Summary).

Management Companies' Operating Expenses:

Management Companies' operating expenses decreased $4.5 million from 2020 to 2021 due to a decrease in compensation expense.

Depreciation and Amortization:

Depreciation and amortization decreased $8.5 million from 2020 to 2021.

The decrease in depreciation and amortization is primarily attributed to a decrease of $18.0 million from the Same Centers and $4.7 million from the Disposition Properties offset in part by increases of $13.7 million from the JV Transition Centers and $0.5 million from the Redevelopment Properties.

Interest (Income) Expense:

Interest (income) expense increased $117.1 million from 2020 to 2021.

The increase in interest (income) expense is attributed to an increase of $131.6 million from the Financing Arrangement (See Note 12–Financing Arrangement in the Company's Notes to the Consolidated Financial Statements) and $5.9 million from the JV Transition Centers offset in part by decreases of $7.9 million from the Same Centers, $11.7 million from borrowings under the line of credit and $0.8 million from the Disposition Properties.

The increase in interest expense from the Financing Arrangement is primarily due to the change in fair value of the underlying properties and the mortgage notes payable on the underlying properties.

The above interest expense items are net of capitalized interest, which increased from $5.2 million in 2020 to $9.5 million in 2021.

Equity in Income (Loss) of Unconsolidated Joint Ventures:

Equity in income (loss) of unconsolidated joint ventures increased $42.7 million from 2020 to 2021.

The increase in equity in income (loss) of unconsolidated joint ventures is primarily due to a decrease in the provision for bad debts and an increase in percentage rent in 2021 compared to 2020.

Loss on Remeasurement of Assets

Loss on remeasurement of assets of $163.3 million in 2020 relates to Fashion District Philadelphia (See Note 15 –Consolidated Joint Venture and Acquisitions in the Company's Notes to the Consolidated Financial Statements).

Gain (Loss) on Sale or Write Down of Assets, net:

Gain (loss) on sale or write down of assets, net increased from a loss of $68.1 million in 2020 to a gain of $75.7 million in 2021.

The increase is primarily due to the $36.7 million of impairment losses on Wilton Mall and Paradise Valley Mall, $4.2 million write-down of non-real estate assets and $36.7 million write-down of development costs in 2020 and $117.2 million gain on the sale of Tucson La Encantada and $29.4 million gain on land sales in 2021 offset in part by the sale and impairment

loss of $41.6 million on Estrella Falls and $28.3 million loss related to North Bridge in 2021 (See "Dispositions" in Management's Overview and Summary).

The impairment losses were due to the reduction in the estimated holding periods of the properties.

Net Income (Loss):

Net income increased $261.6 million from 2020 to 2021.

The increase in net income is primarily due to the variances noted above.

Funds From Operations ("FFO"):

Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt increased 24.7% from $339.5 million in 2020 to $423.2 million in 2021.

For a reconciliation of net income (loss) attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt and FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt , see "Funds From Operations ("FFO")" below.

Operating Activities:

Cash provided by operating activities increased $161.5 million from 2020 to 2021.

The increase is primarily due to the changes in assets and liabilities and the results, as discussed above.

Investing Activities:

Cash provided by investing activities increased $437.8 million from 2020 to 2021.

The increase in cash provided by investing activities is primarily attributed to an increase in proceeds from the sale of assets of $320.6 million, proceeds from notes receivable of $1.3 million, a decrease in contributions to unconsolidated joint ventures of $45.6 million and an increase of $15.5 million in distributions from unconsolidated joint ventures.

Financing Activities:

Cash provided by financing activities decreased $1.3 billion from 2020 to 2021.

The decrease in cash provided by financing activities is primarily due to decreases in proceeds from mortgages, bank and other notes payable of $140.0 million and an increase in payments on mortgages, bank and other notes payable of $2.0 billion offset in part by net proceeds from sales of common shares under the ATM Programs of $830.2 million and a decrease in dividends and distributions of $36.4 million.

Comparison of Years Ended December 31, 2020 and 2019

Leasing revenue decreased by $118.6 million, or 13.8%, from 2019 to 2020.

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Leasing expenses decreased from $29.6 million in 2019 to $25.2 million in 2020 due to less leasing activity in 2020.

Management Companies' Operating Expenses:

Management Companies' operating expenses decreased $1.2 million from 2019 to 2020.

REIT General and Administrative Expenses:

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Funds From Operations ("FFO"):

Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold decreased 36.8% from $537.0 million in 2019 to $339.5 million in 2020.

For a reconciliation of net (loss) income attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold and FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold , see "Funds From Operations ("FFO")" below.

Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt decreased 36.8% from $537.3 million in 2019 to $339.5 million in 2020.

For a reconciliation of net (loss) income attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt and FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt, see "Funds From Operations ("FFO")" below.

Operating Activities:

Cash provided by operating activities decreased $230.3 million from 2019 to 2020.

The decrease is primarily due to a $96.0 million increase in tenant and other receivables, a $47.9 million decrease in other accrued liabilities and to the other

changes in assets and liabilities and the results, as discussed above.

The decrease is primarily due to a $96.0 million increase in tenant and other receivables, a $47.9 million decrease in other accrued liabilities and to the other changes in assets and liabilities and the results, as discussed above.

The increase in tenant and other receivables and the decrease in other accrued liabilities is primarily attributed to a decrease in rents collected and a decrease in prepaid rent as a result of COVID-19 (See "Other Transactions and Events" in Management's Overview and Summary).

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The decreases in payments on mortgages, bank and other notes payable, dividends and distributions and the proceeds from mortgages, bank and other notes payable are attributed to the Company's plan to increase liquidity in connection with COVID-19 (See "Other Transactions and Events" in Management's Overview and Summary).

Comparison of Years Ended December 31, 2019 and 2018

Leasing revenue decreased by $25.1 million, or 2.8%, from 2018 to 2019.

The decrease in rental revenue is attributed to a decrease of $18.5 million from the Same Centers, $3.0 million from the JV Transition Center, $2.3 million from the Disposition Property and $1.3 million from the Redevelopment Properties.

Leasing revenue includes the amortization of above and below-market leases, the amortization of straight-line rents and lease termination income.

The amortization of above and below-market leases increased from $1.9 million in 2018 to $5.2 million in 2019.

The amortization of straight-line rents decreased from $11.8 million in 2018 to $10.5 million in 2019.

Lease termination income decreased from $9.9 million in 2018 to $4.6 million in 2019.

Leasing revenue also includes a provision for bad debts of $7.7 million in 2019 (See "Other Transactions and Events" in Management's Overview and Summary).

The decrease in leasing revenue at the Same Centers is primarily due to the inclusion of the provision for bad debts in 2019 and a decrease in lease termination income.

Management Companies' revenue decreased from $43.5 million in 2018 to $40.7 million in 2019.

Shopping Center and Operating Expenses:

Shopping center and operating expenses decreased $5.9 million, or 2.1%, from 2018 to 2019.

The decrease in shopping center and operating expenses is attributed to a decrease of $2.0 million from the Same Centers, $1.9 million from the JV Transition Center, $1.2 million from the Disposition Property and $0.8 million from the Redevelopment Properties.

The decrease in shopping center and operating expenses at the Same Centers is primarily due to the exclusion of bad debt expense in 2019 (See "Other Transactions and Events" in Management's Overview and Summary) offset in part by an increase in property tax expense.

Leasing Expenses:

Leasing expenses increased from $11.6 million in 2018 to $29.6 million in 2019.

The increase in leasing expenses is due to the Company's adoption of ASC 842 in 2019 (See "Other Transactions and Events" in Management's Overview and Summary).

Management Companies' Operating Expenses:

Management Companies' operating expenses decreased $25.1 million from 2018 to 2019.

The decrease is attributed to a one-time charge of $12.7 million in connection with the Company's reduction in work force in 2018 (See "Other Transactions and Events" in Management's Overview and Summary) and the subsequent reduction in payroll and share and unit-based compensation costs.

REIT General and Administrative Expenses:

REIT general and administrative expenses decreased $1.5 million from 2018 to 2019 due to a reduction in compensation costs.

Costs Related to Shareholder Activism:

The Company incurred $19.4 million in costs related to shareholder activism in 2018 (See "Other Transactions and Events" in Management's Overview and Summary) and none in 2019.

Depreciation and Amortization:

Depreciation and amortization increased $3.3 million from 2018 to 2019.

The increase in depreciation and amortization is primarily attributed to an increase of $5.3 million from the Same Centers offset in part by decreases of $1.3 million from the JV Transition Center and $0.7 million from the Disposition Property.

Interest Expense:

Interest expense decreased $44.7 million from 2018 to 2019.

The decrease in interest expense is primarily attributed to decreases of $62.7 million from the Financing Arrangement (See "Other Transactions and Events" in Management's Overview and Summary) and $1.1 million from the JV Transition Center offset in part by increases of $12.9 million from the Same Centers, $4.4 million from borrowings under the line of credit and $1.8 million from the Redevelopment Properties.

The decrease in interest expense from the Financing Arrangement is primarily due to the change in fair value of the underlying properties and the mortgage notes payable on the underlying properties.

The increase in interest expense at the Same Centers is primarily due to the new loans on Fashion Outlets of Chicago, Chandler Fashion Center, SanTan Village Regional Center and Kings Plaza Shopping Center (See "Financing Activities" in Management's Overview and Summary).

The above interest expense items are net of capitalized interest, which decreased from $15.4 million in 2018 to $9.6 million in 2019.

Equity in Income of Unconsolidated Joint Ventures:

Equity in income of unconsolidated joint ventures decreased $23.3 million from 2018 to 2019.

The decrease in equity in income of unconsolidated joint ventures is primarily due to the write-down of intangible assets as a result of lease terminations at the Company's joint venture with Seritage in 2019, the gain on the sale of The Market at Estrella Falls in 2018 (See "Acquisitions and Dispositions" in Management's Overview and Summary), the gain on the sale of an ownership interest in an office building at Fashion District Philadelphia in 2018 (See "Acquisitions and Dispositions" in Management's Overview and Summary) and interest expense from the loan placed on Broadway Plaza in 2018 (See "Financing Activities" in Management's Overview and Summary).

Loss on Sale or Write Down of Assets, net:

Loss on sale or write down of assets, net decreased $19.9 million from $31.8 million in 2018 to $11.9 million in 2019.

The decrease in loss on sale or write down of assets, net is primarily due to the $54.5 million in impairment losses in 2018 and a $12.0 million decrease in the write down of development costs in 2019 offset in part by the $46.2 million gain on the sale of a 75% ownership interest in One Westside in 2018 (See "Acquisitions and Dispositions" in Management's Overview and Summary) and a $0.6 million decrease in gain on land sales in 2019.

The impairment losses were due to the reduction in the estimated holding periods of SouthPark Mall, Promenade at Casa Grande, Southridge Center and two freestanding stores.

Net income increased $33.6 million from 2018 to 2019.

The increase in net income is primarily attributed to the decreases of $44.7 million in interest expense and $19.4 million in costs related to shareholder activism offset in part by the decrease of $19.9 million in loss on sale or write down of assets, net, as described above.

Funds From Operations ("FFO"):

Primarily as a result of the factors mentioned above, FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold decreased 4.9% from $564.4 million in 2018 to $537.0 million in 2019.

For a reconciliation of net income attributable to the Company, the most directly comparable GAAP financial measure, to FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold and FFO attributable to common stockholders and unit holders—diluted, excluding financing expense in connection with Chandler Freehold, see "Funds From Operations ("FFO")" below.

Operating Activities:

Cash provided by operating activities increased $10.8 million from 2018 to 2019.

The increase is primarily due to the $19.4 million in costs related to shareholder activism in 2018 (See "Other Transactions and Events" in Management's Overview and Summary) and changes in assets and liabilities and the results as discussed above.

Investing Activities:

Cash used in investing activities increased by $288.3 million from 2018 to 2019.

The increase in cash used in investing activities is primarily attributed to a decrease in distributions from unconsolidated joint ventures of $270.3 million, a decrease in proceeds from the sale of assets of $80.4 million and an increase in contributions to unconsolidated joint ventures of $71.7 million offset in part by an increase in proceeds from notes receivable of $67.8 million and decreases in development, redevelopment, expansion and renovations of properties of $14.3 million and property improvements of $35.0 million.

The decrease in distributions from unconsolidated joint ventures is primarily due to the distribution of the Company's share of proceeds from the loans placed on Broadway Plaza and Fashion District Philadelphia (See "Financing Activities" in Management's Overview and Summary) in 2018 and the sale of an ownership interest in an office building at Fashion District Philadelphia (See "Acquisitions and Dispositions" in Management's Overview and Summary) in 2018, offset in part by the Company's share of loan proceeds from the new loan on Tysons Tower (See "Financing Activities" in Management's Overview and Summary) in 2019.

The increase in proceeds from notes receivable is due to the repayment of the note receivable from the Lennar Corporation in 2019 (See Note 19—Related Party Transactions in the Company's Notes to the Consolidated Financial Statements).

Financing Activities:

Cash used in financing activities decreased $236.2 million from 2018 to 2019.

The decrease in cash used in financing activities is primarily due to an increase in proceeds from mortgages, bank and other notes payable of $1.4 billion, offset in part by an increase in payments on mortgages, bank and other notes payable of $1.1 billion, the payment on the Financing Arrangement of $27.9 million in 2019 and an increase in dividends and distributions of $20.9 million.

Liquidity and Capital Resources

The Company has historically met its liquidity needs for its operating expenses, debt service and dividend requirements for the next twelve months through cash generated from operations, distributions from unconsolidated joint ventures, working capital reserves and/or borrowings under its line of credit.

As a result of the uncertain environment resulting from the COVID-19 pandemic (See "Other Transactions and Events" in Management's Overview and Summary), the Company took a number of measures to enhance liquidity (See “Outlook” in Results of Operations).

These actions helped ensured that funds are available to meet the Company's obligations for a sustained period of time as the extent and duration of the pandemic's impact becomes clearer.

These measures included (i) reduction of the cash component of its dividend in the second quarter and its third and fourth quarter dividends, (ii) reduction of planned capital and development expenditures, (iii) negotiated deferrals of debt service payments on nineteen mortgage loans totaling $47.2 million, (iv) reduction of the Company's controllable operating expenses, and (v) deferral of real estate taxes to the extent such relief was available.

In addition, during the first quarter of 2020, the Company borrowed $660 million on its line of credit.

As of December 31, 2020, the Company had approximately $555 million of cash, including the joint ventures at the Company's pro rata share.

The Company anticipates meeting its liquidity needs for its operating expenses, debt service and dividend requirements for the next twelve months and beyond through cash generated from operations, distributions from unconsolidated joint ventures, working capital reserves and/or borrowings under its line of credit.

Following the uncertain environment brought about by COVID-19, the Company took a number of previously disclosed measures in the year ended December 31, 2020 to enhance its liquidity position over the short-term, some of which continued into the year ended December 31, 2021.

However, the Company currently anticipates meeting its liquidity needs for the next twelve months as it has done historically.

Uses of Capital

The following tables summarize capital expenditures and lease acquisition costs incurred at the Centers (at the Company's pro rata share) for the years ended December 31:

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$ 89,742 $ 63,432 $ 169,089

Joint Venture Centers (at Company's pro rata share):

Joint Venture Centers (at the Company's pro rata share):

Acquisitions of property, building improvement and equipment $ 18,803 $ 6,497 $ 12,321

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The Company expects amounts to be incurred during the next twelve months for tenant allowances and deferred leasing charges to be less than or comparable to 2021.

The Company expects to incur less than $100.0 million during 2021 for development, redevelopment, expansion and renovations.

This excludes the Company's share of the remaining development costs of One Westside, which is fully funded by a non-recourse construction facility.

The Company expects to incur approximately $150 million during 2022 for development, redevelopment, expansion and renovations.

This includes the Company's share of the remaining development costs of One Westside of approximately $30.0 million, which is fully funded by a non-recourse construction facility.

Capital for these expenditures, developments and/or redevelopments has been, and is expected to continue to be, obtained from a combination of cash on hand, debt or equity financings, which are expected to include borrowings under the Company's line of credit, from property financings and construction loans, each to the extent available.

Sources of Capital

The Company has also generated liquidity in the past, and may continue to do so in the future, through equity offerings and issuances, property refinancings, joint venture transactions and the sale of non-core assets.

For example, the Company sold Paradise Valley Mall in Phoenix, Arizona and Tucson La Encantada in Tucson, Arizona during the year ended December 31, 2021.

The Company used the proceeds from these sales to pay down its line of credit and other debt obligations.

Furthermore, the Company has filed a shelf registration statement, which registered an unspecified amount of common stock, preferred stock, depositary shares, debt securities, warrants, rights, stock purchase contracts and units that may be sold from time to time by the Company.

On February 1, 2021, the Company registered an "at the market" offering program, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500 million in amounts and at times to be determined by the Company.

The Company paid a reduced quarterly dividend of $0.50 per share of its common stock on June 3, 2020, in a combination of 20% cash and 80% of shares of the Company’s common stock.

On October 29, 2020, the Company declared a fourth quarter cash dividend of $0.15 per share of its common stock, which was paid on December 3, 2020 to stockholders of record on November 9, 2020.

On January 28, 2021, the Company declared a first quarter dividend of $0.15 per share of its common stock, which will be paid on March 3, 2021 to stockholders of record on February 19, 2021.

On each of February 1, 2021 and March 26, 2021, the Company registered a separate "at the market" offering program, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $500 million under each ATM Program, or a total of $1.0 billion under the ATM Programs, in amounts and at times to be determined by the Company.

The following table sets forth certain information with respect to issuances made under each of the ATM Programs as of December 31, 2021.

(Dollars and shares in thousands) February 2021 ATM Program March 2021 ATM Program

For the Three Months Ended:

Number of Shares Issued Net Proceeds Sales Commissions Number of Shares Issued Net Proceeds Sales Commissions

March 31, 2021 36,001 $ 477,283 $ 9,746 9,991 $ 119,724 $ 2,448

June 30, 2021 686 12,269 254 13,229 182,149 3,720

September 30, 2021 — — — 2,122 38,449 787

December 31, 2021 — — — 19 367 9

Total 36,687 $ 489,552 $ 10,000 25,361 $ 340,689 $ 6,964

As of December 31, 2021, the Company had approximately $151.7 million of gross sales of its common stock available under the March 2021 ATM Program.

The February 2021 ATM Program was fully utilized as of June 30, 2021 and is no longer active.

The Company paid a cash dividend of $0.15 per share of its common stock, for each quarter in the year ended December 31, 2021.

This quarterly dividend level was lower than the quarterly dividend paid prior to the onset of COVID-19, which was $0.75 per share.

The capital and credit markets can fluctuate and, at times, limit access to debt and equity financing for companies.

The Company has been able to access capital;

however, there is no assurance the Company will be able to do so in future periods or on similar terms and conditions as a result of COVID-19.

Many factors impact the Company's ability to access capital, such as its overall debt level, interest rates, interest coverage ratios and prevailing market conditions.

however, there is no assurance the Company will be able to do so in future periods or on similar terms and conditions.

Many factors impact the Company's ability to access capital, such as its overall debt level, interest rates, interest coverage ratios, prevailing market conditions and the impact of COVID-19.

Increases in the Company's proportion of floating rate debt will cause it to be subject to interest rate fluctuations in the future.

The Company's total outstanding loan indebtedness, which includes mortgages and other notes payable, at December 31, 2020 was $8.7 billion (consisting of $6.0 billion of consolidated debt, less $459.8 million of noncontrolling interests, plus $3.1 billion of its pro rata share of unconsolidated joint venture debt).

The Company's total outstanding loan indebtedness, which includes mortgages and other notes payable, at December 31, 2021 was $6.98 billion (consisting of $4.53 billion of consolidated debt, less $0.46 billion of noncontrolling interests, plus $2.91 billion of its pro rata share of unconsolidated joint venture debt).

The majority of the Company's debt consists of fixed-rate conventional mortgage notes collateralized by individual properties.

The Company expects that all of the maturities during the next twelve months will be refinanced, restructured, extended and/or paid off from the Company's line of credit or cash on hand.

Given the continued disruption and uncertainties from COVID-19 and the impact on the capital markets, the Company does not anticipate it will be able to refinance its near-term maturing mortgages.

As a result, the Company has secured short-term extensions of its near-term maturing non-recourse mortgage loans on Danbury Fair Mall, Fashion Outlets of Niagara, FlatIron Crossing and Green Acres Mall and the Company is in the process of securing a two-year extension on Green Acres Commons (See "Financing Activities" in Management's Overview and Summary).

The Company believes that the pro rata debt provides useful information to investors regarding its financial condition because it includes the Company’s share of debt from unconsolidated joint ventures and, for consolidated debt, excludes the Company’s partners’ share from consolidated joint ventures, in each case presented on the same basis.

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The Company’s pro rata share of debt should not be considered as a substitute for the Company’s total consolidated debt determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

The Company has a $1.5 billion revolving line of credit facility that bears interest at LIBOR plus a spread of 1.30% to 1.90%, depending on the Company's overall leverage level, and was to mature on July 6, 2020.

On April 8, 2020, the Company exercised its option to extend the maturity of the facility to July 6, 2021.

The line of credit can be expanded, depending on certain conditions, up to a total facility of $2.0 billion.

All obligations under the facility are unconditionally guaranteed only by the Company.

Based on the Company's leverage level as of December 31, 2020, the borrowing rate on the facility was LIBOR plus 1.65%.

The Company has four interest rate swap agreements that effectively convert a total of $400.0 million of the outstanding balance from floating rate debt of LIBOR plus 1.65% to fixed rate debt of 4.30% until September 30, 2021.

At December 31, 2020, total borrowings under the line of credit were $1.5 billion less unamortized deferred finance costs of $2.5 million with a total interest rate of 2.73%.

The Company's availability under the line of credit was $19.7 million at December 31, 2020.

The Company anticipates refinancing its revolving line of credit in advance of its maturity date.

While the Company cannot predict what the terms of any new facility will be, it may include a lower lending commitment and require security.

Any final terms of a new credit facility are subject to ongoing negotiations and may change.

Cash dividends and distributions for the twelve months ended December 31, 2020 were $179.9 million.

A total of $124.8 million was funded by operations and the remaining $55.0 million was funded from cash on hand.

At December 31, 2020, the Company was in compliance with all applicable loan covenants under its agreements.

At December 31, 2020, the Company had cash and cash equivalents of $465.3 million.

Off-Balance Sheet Arrangements:

The Company accounts for its investments in joint ventures that it does not have a controlling interest or is not the primary beneficiary using the equity method of accounting and those investments are reflected on the consolidated balance sheets of the Company as investments in unconsolidated joint ventures.

The Company accounts for its investments in joint ventures that it does not have a controlling interest or is not the primary beneficiary of using the equity method of accounting and those investments are reflected on the consolidated balance sheets of the Company as investments in unconsolidated joint ventures.

As of December 31, 2021, one of the Company’s joint ventures had $50.0 million of debt that could become recourse to the Company, should the joint venture be unable to discharge the obligation of the related debt.

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The Company does not believe that these letters of credit will result in a liability to the Company.

Contractual Obligations:

The following is a schedule of contractual obligations as of December 31, 2020 for the consolidated Centers over the periods in which they are expected to be paid (in thousands):

On March 29, 2021, the Company sold Paradise Valley Mall to a newly formed joint venture for $100 million.

Concurrent with the sale, the Company elected to reinvest into the joint venture at a 5% ownership interest.

The Company received $95.3 million of net proceeds.

On September 17, 2021, the Company sold Tucson La Encantada in Tucson, Arizona for $165.3 million.

The Company received $100.1 million of net cash proceeds which was used to repay debt (See “—Dispositions” in Management’s Overview and Summary).

The revolving loan facility can be expanded up to $800 million, subject to receipt of lender commitments and other conditions.

All obligations under the facility are guaranteed unconditionally by the Company and are secured in the form of mortgages on certain wholly-owned assets and pledges of equity interests held by certain of the Company’s subsidiaries.

The new credit facility bears interest at LIBOR plus a spread of 2.25% to 3.25% depending on Company’s overall leverage level.

As of December 31, 2021, the borrowing rate was LIBOR plus 2.25%.

As of December 31, 2021, borrowings under the facility were $119.0 million less unamortized deferred finance costs of $14.2 million for the revolving loan facility at a total interest rate of 3.86%.

As of December 31, 2021, the Company’s availability under the revolving loan facility for additional borrowings was $405.7 million.

The Company drew the $175 million term loan facility in its entirety simultaneously with entering into the new credit agreement and subsequently paid off the remaining balance outstanding on the term loan facility with proceeds from the sale of Tucson La Encantada.

Concurrently with entering into the new credit agreement, the Company repaid $985 million of debt, which included terminating and repaying all amounts outstanding under its prior revolving line of credit facility.

The Company had four interest rate swap agreements that effectively converted a total of $400 million of the outstanding balance under the prior credit agreement from floating rate debt of LIBOR plus 1.65% to fixed rate debt of 4.50% until September 30, 2021.

These swaps were hedged against the Santa Monica Place floating rate loan and a portion of the Green Acres Commons floating rate loan and effectively converted the Santa Monica Place loan and a majority of the Green Acres Commons loan to fixed rate debt through September 30, 2021.

The Company did not renew the swaps that expired on September 30, 2021 and, as a result, on October 1, 2021, the Santa Monica Place and Green Acres Commons loans reverted back to floating rate loans (See Note 5 – Derivative Instruments and Hedging Activities in the Company’s Notes to the Consolidated Financial Statements).

During the year ended December 31, 2021, the Company repaid $1.7 billion of debt then outstanding, including the $985 million repaid in connection with the new credit agreement.

These repaid amounts represented an approximately 20% reduction in the debt outstanding, at the Company's share, since December 31, 2020.

Cash dividends and distributions for the twelve months ended December 31, 2021 were $143.4 million which were funded by operations.

At December 31, 2021, the Company was in compliance with all applicable loan covenants under its agreements.

At December 31, 2021, the Company had cash and cash equivalents of $112.5 million.

Material Cash Commitments:

The following is a schedule of material cash commitments as of December 31, 2021 for the consolidated Centers over the periods in which they are expected to be paid (in thousands):

Payment Due by Period

Contractual Obligations Total Less than

Cash Commitments Total Less than

1 year 1 - 3 years 3 - 5 years More than

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Lease obligations(2) 167,142 18,763 26,038 12,983 109,358

Purchase obligations(3) 3,861 3,861 — — —

Other liabilities 225,322 153,330 28,199 13,744 30,049

$ 5,465,444 $ 973,883 $ 1,425,028 $ 1,309,345 $ 1,757,188

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(2) See Note 8—Leases in the Company's Notes to the Consolidated Financial Statements.

(3) See Note 18—Commitments and Contingencies in the Company's Notes to the Consolidated Financial Statements.

(4) On January 22, 2021, the Company closed a two-year extension of the $270.6 million loan on Green Acres Mall, which now matures on February 3, 2023 (See "Financing Activity" in Management's Overview and Summary).

Funds From Operations ("FFO")

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The Company accounts for its joint venture in Chandler Freehold as a financing arrangement.

In connection with this treatment, the Company recognizes financing expense on (i) the changes in fair value of the financing arrangement obligation, (ii) any payments to the joint venture partner equal to their pro rata share of net income and (iii) any payments to the joint venture partner less than or in excess of their pro rata share of net income.

Only the noted expenses related to the changes in fair value and for the payments to the joint venture partner less than or in excess of their pro rata share of net income are excluded from the measure - FFO excluding financing expense in connection with Chandler Freehold.

The Company also presents FFO excluding financing expense in connection with Chandler Freehold, gain or loss on extinguishment of debt, net and costs related to shareholder activism.

The Company also presents FFO excluding financing expense in connection with Chandler Freehold and loss on extinguishment of debt.

FFO and FFO on a diluted basis are useful to investors in comparing operating and financial results between periods.

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The Company believes that such a presentation also provides investors with a meaningful measure of its operating results in comparison to the operating results of other REITs.

In addition, the Company believes that FFO excluding financing expense in connection with Chandler Freehold, non-routine costs associated with extinguishment of debt and costs related to shareholder activism provide useful supplemental information regarding the Company’s performance as they show a more meaningful and consistent comparison of the Company’s operating performance and allows investors to more easily compare the Company’s results.

In addition, the Company believes that FFO excluding financing expense in connection with Chandler Freehold and non-routine costs associated with extinguishment of debt and costs related to shareholder activism provide useful supplemental information regarding the Company’s performance as they show a more meaningful and consistent comparison of the Company’s operating performance and allows investors to more easily compare the Company’s results.

The Company further believes that FFO on a diluted basis is a measure investors find most useful in measuring the dilutive impact of outstanding convertible securities.

The Company believes that FFO does not represent cash flow from operations as defined by GAAP, should not be considered as an alternative to net income as defined by GAAP, and is not indicative of cash available to fund all cash flow

Funds From Operations ("FFO") (Continued)

The Company also cautions that FFO, as presented, may not be comparable to similarly titled measures reported by other real estate investment trusts.

Funds From Operations ("FFO") (Continued)

Management compensates for the limitations of FFO by providing investors with financial statements prepared according to GAAP, along with this detailed discussion of FFO and a reconciliation of net income to FFO and FFO-diluted.

Management believes that to further understand the Company's performance, FFO should be compared with the Company's reported net income and considered in addition to cash flows in accordance with GAAP, as presented in the Company's consolidated financial statements.

The following reconciles net (loss) income attributable to the Company to FFO and FFO-basic and diluted, excluding financing expense in connection with Chandler Freehold, loss (gain) on extinguishment of debt, net and costs related to shareholder activism for the years ended December 31, 2020, 2019, 2018, 2017 and 2016 (dollars and shares in thousands):

The following reconciles net (loss) income attributable to the Company to FFO and FFO-basic and diluted, excluding financing expense in connection with Chandler Freehold, loss on extinguishment of debt, net and costs related to shareholder activism for the years ended December 31, 2021, 2020, 2019, 2018 and 2017 (dollars and shares in thousands):

2021 2020 2019 2018 2017

Net (loss) income attributable to the Company $ (230,203) $ 96,820 $ 60,020 $ 146,130 $ 516,995

Adjustments to reconcile net (loss) income attributable to the Company to FFO attributable to common stockholders and unit holders—basic and diluted:

Net income (loss) attributable to the Company $ 14,263 $ (230,203) $ 96,820 $ 60,020 $ 146,130

Adjustments to reconcile net income (loss) attributable to the Company to FFO attributable to common stockholders and unit holders—basic and diluted:

Noncontrolling interests in the Operating Partnership 714 (16,822) 7,131 4,407 10,729

Loss (gain) on sale or write down of consolidated assets, net 68,112 11,909 31,825 (42,446) (415,348)

(Gain) loss on sale or write down of consolidated assets, net (75,740) 68,112 11,909 31,825 (42,446)

Loss on remeasurement of consolidated assets — 163,298 — — —

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loss on write-down of non-real estate sales or write-down of assets—consolidated assets (2,200) (4,154) — — (10,138)

noncontrolling interests share of (loss) gain on sale or write-down of assets—consolidated assets (120) (2,822) 580 1,209 (1,662)

noncontrolling interests share of gain (loss) on sale or write-down of assets—consolidated assets 9,732 (120) (2,822) 580 1,209

Loss (gain) on sale or write down of assets—unconsolidated joint ventures(1) 4,931 (6) 462 (2,993) (14,783)

gain (loss) on sale of undepreciated assets—unconsolidated joint ventures(1) — — 666 6,644 (2)

gain on sale of undepreciated assets—unconsolidated joint ventures(1) 93 — — 666 6,644

Depreciation and amortization on consolidated assets 311,129 319,619 330,726 327,436 335,431

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FFO attributable to common stockholders and unit holders, excluding financing expense in connection with Chandler Freehold—basic and diluted 422,190 339,505 536,961 564,436 582,878

Loss (gain) on extinguishment of debt, net—consolidated assets — 351 — — (1,709)

Loss on extinguishment of debt, net—consolidated assets 1,007 — 351 — —

Costs related to shareholder activism — — — 19,369 —

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis