Seritage(US:SRG)2022-05-10 21:16Financial Performance - For the three months ended March 31, 2022, rental income decreased by $2.1 million to $29.1 million compared to $31.1 million in the same period of 2021, primarily due to a reduction in Sears/Kmart rental income [180][182]. - The company recorded a net operating cash outflow of $30.0 million for the three months ended March 31, 2022, as property rental income did not fully cover obligations incurred [194]. - For the three months ended March 31, 2022, the Company reported a net loss of $66,987 thousand, compared to a net loss of $10,933 thousand for the same period in 2021 [223]. - The Company's Net Operating Income (NOI) for Q1 2022 was $8,969 thousand, an increase from $7,908 thousand in Q1 2021, representing a growth of approximately 13.4% [223]. - Total NOI for Q1 2022 was $10,493 thousand, up from $9,433 thousand in Q1 2021, indicating an increase of about 11.2% [223]. - The Company incurred interest expense of $22,588 thousand in Q1 2022, down from $26,150 thousand in Q1 2021, reflecting a decrease of approximately 13.5% [223]. - General and administrative expenses decreased to $9,092 thousand in Q1 2022 from $11,232 thousand in Q1 2021, a reduction of about 19.1% [223]. - The Company reported an equity loss of $33,076 thousand from unconsolidated entities in Q1 2022, significantly higher than the $1,162 thousand loss in Q1 2021 [223]. - Depreciation and amortization expenses were $11,934 thousand in Q1 2022, slightly lower than $13,142 thousand in Q1 2021 [223]. - The Company recognized a gain of $1,015 thousand on the sale of real estate in Q1 2022, compared to a loss of $24,208 thousand in Q1 2021 [223]. Asset Management - As of March 31, 2022, the company's portfolio consisted of 161 properties with approximately 19.0 million square feet of gross leasable area (GLA) and 3.8 million square feet held by unconsolidated entities [166]. - The company collected 96% of rental income for the three months ended March 31, 2022, with no additional deferrals agreed upon [176]. - The company's multi-tenant retail portfolio was 82.7% leased as of March 31, 2022, with a pipeline of 0.2 million square feet [176]. - The company recognized $95.8 million of impairment losses during the year ended December 31, 2021, and $1.0 million during the three months ended March 31, 2022 [177]. - The company recognized $1.0 million in impairment on four real estate assets during the same period, reflecting a strategic decision to sell these properties [190]. - The loss from unconsolidated entities increased by $31.9 million, primarily due to a $61.1 million impairment charge in one investment, resulting in the company's share of this impairment being $30.6 million [191]. - The company sold one property for $9.0 million but recorded a loss of $1.0 million on the sale [189]. - As of March 31, 2022, the company had sold 91 consolidated properties since July 2017, generating approximately $995.8 million in gross proceeds [198]. - The company invested $22.5 million in consolidated development and operating properties and $7.6 million in unconsolidated joint ventures during the three months ended March 31, 2022 [208]. - The company had nine assets under contract for sale with anticipated proceeds of $85.0 million as of May 9, 2022 [195]. - The company is currently marketing assets with an estimated fair value of $636.3 million, which could help meet the $640 million principal pay down required for the Term Loan Facility [201]. Corporate Strategy - The company plans to terminate its REIT status and become a taxable C Corporation effective for the year ending December 31, 2022, allowing greater flexibility in using free cash flow [172]. - The company intends to execute a strategic review process to enhance shareholder value, overseen by a special committee of the Board of Trustees [171]. - The company expects ongoing impacts from the COVID-19 pandemic, which may significantly affect future financial results [175]. Debt and Financing - The outstanding balance of the Term Loan Facility as of March 31, 2022, was $1.44 billion, following a repayment of $160.0 million during the year ended December 31, 2021 [200]. - The company did not declare dividends on Class A common shares during the three months ended March 31, 2022, and 2021 [204]. Market Risk - There were no material changes in the quantitative and qualitative disclosures about market risk compared to the previous year [224].