Exhibit 99.1 | ||
Monthly/Quarterly Reporting Package | ||
December 2021 |
Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Table of Contents
SECTION I- Monthly Reporting Schedules | |||||
N/A | |||||
Master Lease Retail Tenant Operating Performance for Retail Portfolio as of Determination Date | N/A | ||||
Master Lease Subtenants as of Fiscal Quarter Ended [] | N/A | ||||
SECTION IV – Provided Quarterly – Penney Intermediate Holdings LLC Financial Statements | |||||
Consolidated Statement of Operations | N/A | ||||
Consolidated Balance Sheet | N/A | ||||
Consolidated Statement of Member’s Equity | N/A | ||||
Consolidated Statement of Cash Flows | N/A | ||||
Notes to the Consolidated Financial Statements | N/A | ||||
Narrative Report | N/A | ||||
Statement of Consolidated Adjusted EBITDA | N/A | ||||
SECTION V – Definitions and Disclaimers | |||||
Definitions | |||||
Disclaimer |
Trustee | Manager | |||||||||||||
GLAS Trust Company, LLC | Hilco JCP, LLC | |||||||||||||
3 Second Street, Suite 206 | 5 Revere Drive, Suite 410 | |||||||||||||
Jersey City, NJ 07311 | Northbrook, IL | |||||||||||||
Contact: Yana Kislenko | Contact: Larry Finger | |||||||||||||
Phone: 201-839-2183 | Phone: 703-244-4588 | |||||||||||||
Email: yana.kislenko@glas.agency | Email: lfinger@ctltrust.net |
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Forward-Looking Statements & Non-GAAP Presentation
This distribution statement contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and developments and other matters that are not historical facts. The forward-looking statements are based on our beliefs as well as on a number of assumptions concerning future events. Readers of these materials are cautioned not to put undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements.
Certain of the financial measures presented in this distribution statement are non-GAAP financial measures, other metrics and other information. We believe that non-GAAP financial measures, other metrics and other information provide useful information to investors regarding our financial condition, result of operations and other matters. The non-GAAP financial measures, other metrics and information as presented in this distribution statement may be adjusted in management’s reasonable judgment as appropriate, taking into account a variety of circumstances, facts and conditions. These adjustments may be material and may or may not be specifically identified in footnotes or otherwise. Our measures, metrics and other information (and the methodologies used to derive them) may not be comparable to those used by other companies.
Please refer to Section III of this distribution statement, titled “Disclaimer”, for additional information.
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
SECTION I
Monthly Reporting Schedules
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Monthly Certificate Distribution Detail
CUSIP | Aggregate Certificates Outstanding | Aggregate Net Sales Proceeds Distribution | Aggregate Net Operations Distribution | Aggregate Total Distribution | ||||||||||||||||
217519107 | 75,000,000 | $595,294,173.94 | $5,557,146.98 | $600,851,320.92 |
Per Certificate | ||||||||||||||||||||
CUSIP | Aggregate Certificates Outstanding | Aggregate Net Sales Proceeds Distribution | Aggregate Net Operations Distribution | Aggregate Total Distribution | ||||||||||||||||
217519107 | 75,000,000 | $7.937256 | $0.074095 | $8.011351 |
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Monthly Cash Sources and Uses
Sources of Cash from Operations | Uses of Cash from Operations | |||||||||||||
Distribution Center Master Lease Rent | $ | (1,426,612.88) | Accounting and Financial Reporting | $ | 205,256.33 | |||||||||
Retail Master Lease Rent | 9,303,398.23 | Investor Relations | 8,500.00 | |||||||||||
Total Rent | $ | 7,876,785.35 | Legal | 39,261.25 | ||||||||||
Insurance | — | |||||||||||||
Management Fees -Operations and Other Professional Fees | 630,459.00 | |||||||||||||
Sales & Use Tax Recovery | $ | 31,509.86 | BOV’s and Other | 155,000.00 | ||||||||||
Total Other Sources of Cash | $ | 31,509.86 | Total Operating Expenses | $ | 1,038,476.58 | |||||||||
Taxes to be Recovered from Tenant | $ | 1,312,671.65 | ||||||||||||
Formation, Closing & Related Costs | — | |||||||||||||
Total Other Uses of Cash | $ | 1,312,671.65 | ||||||||||||
Total Sources of Cash from Operations | $ | 7,908,295.21 | Total Uses of Cash from Operations | $ | 2,351,148.23 |
Sources of Cash from Sales / Capital Activity | Uses of Cash from Sales / Capital Activity | |||||||||||||
Distribution Center Gross Sales Proceeds | $ | 557,165,354.00 | Management Fees -Sales | $ | 3,375,242.00 | |||||||||
Retail Master Lease Gross Sales Proceeds | 46,250,000.00 | Third Party Expenses: Distribution Center Sales | 4,101,619.85 | |||||||||||
Total Gross Sales Proceeds | $ | 603,415,354.00 | Third Party Expenses: Retail Sales | 571,300.71 | ||||||||||
Prepaid Sales Expenses | 73,017.50 | |||||||||||||
Other Financing / Capital Activity | $ | — | Other | — | ||||||||||
Other | — | Total Expenses of Sales | $ | 8,121,180.06 | ||||||||||
Total Other | $ | — | Cash Provided (Used) Sales / Capital Activity | — | ||||||||||
Total Sources of Cash from Sales / Capital Activity | $ | 603,415,354.00 | Total Uses of Cash from Sales / Capital Activity | $ | 8,121,180.06 |
Net Cash Available for Distribution | |||||
Total Sources of Cash from Operations | $ | 7,908,295.21 | |||
Total Uses of Cash from Operations | (2,351,148.23) | ||||
Net Cash Provided by Operations | $ | 5,557,146.98 | |||
Total Sources of Cash from Sales / Capital Activity | $ | 603,415,354.00 | |||
Total Uses of Cash from Sales / Capital Activity | (8,121,180.06) | ||||
Net Cash Provided by Sales / Capital Activity | $ | 595,294,173.94 | |||
Net Cash Available for Distribution | $ | 600,851,320.92 |
* Tenant pays the following months rent on the 25th of every month. Therefore, December rent was paid in November and distributed in the November monthly report.
** Management Fees: Operations: Primarily Hilco's Asset Mgmt Fees
*** Accounting, Financial Reporting & Tax: Includes all third party professional fees
**** Trustee & Other: BOV and Investment Banker Fees, if applicable
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Monthly Cash Distributions
Distribution Date | Net Rental Income Distribution | Sales and Capital Activity Distribution | Total Distributions | ||||||||
10-Jan-22 | $5,557,146.98 | $595,294,173.94 | $600,851,320.92 | ||||||||
10-Dec-21 | 6,532,239.75 | 50,434,348.59 | $56,966,588.34 | ||||||||
10-Nov-21 | 6,187,382.35 | — | 6,187,382.35 | ||||||||
12-Oct-21 | 6,484,666.36 | 118,150,023.75 | 124,634,690.11 | ||||||||
10-Sept-21 | 6,642,375.46 | — | 6,642,375.46 | ||||||||
10-Aug-21 | 6,837,204.31 | 31,544,164.52 | 38,381,368.83 | ||||||||
12-July-21 | 6,822,411.96 | — | 6,822,411.96 | ||||||||
10-June-21 | 6,449,331.63 | — | 6,449,331.63 | ||||||||
10-May-21 | 6,915,430.00 | — | 6,915,430.00 | ||||||||
12-Apr-21 | 6,900,130.88 | — | 6,900,130.88 | ||||||||
10-Mar-21 | 1,565,979.82 | — | 1,565,979.82 | ||||||||
Trailing 12 mos. | $66,894,299.50 | $795,422,710.80 | $862,317,010.30 | ||||||||
Inception to Date | $66,894,299.50 | $795,422,710.80 | $862,317,010.30 |
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Property Sales This Month
Sale Date | Property ID | Property Name | Square Feet | Rent for Lease Year at Closing Date 1 | Gross GAAP Basis 2 | Gross Sales Price | Net Sales Price3 | Net Sales Price Per Square Foot | Implied Cap. Rate/ Rent Yield at Closing 4 | Selling Cost | Selling Costs as Percentage of Gross Sales Price5 | Selling Broker | ||||||||||||||||||||||||||
Retail Property Sales This Month | ||||||||||||||||||||||||||||||||||||||
23-Dec-21 | 2814 | Queens Center | 204,340 | $1,226,040 | $39,000,000 | $40,500,000 | $40,500,000 | $198.20 | 3.03% | $754,340 | 1.86% | Newmark | ||||||||||||||||||||||||||
29-Dec-21 | 2865 | Tamarack Village | 81,973 | 491,838 | 5,300,000 | 5,750,000 | 5,750,000 | 70.15 | 8.55% | 115,018 | 2.00% | Newmark | ||||||||||||||||||||||||||
Total Retail Properties this Month | 286,313 | $1,717,878 | $44,300,000 | $46,250,000 | $46,250,000 | $161.54 | 3.71% | $869,358 | 1.88% | |||||||||||||||||||||||||||||
Distribution Center Property Sales This Month | ||||||||||||||||||||||||||||||||||||||
17-Dec-21 | 9005 | Warehouse - Statesville, NC | 595,209 | $1,785,627 | $25,000,000 | $28,610,000 | $28,610,000 | $48.07 | 6.24% | 452,410 | 1.58% | Eastdil | ||||||||||||||||||||||||||
17-Dec-21 | 9130 | Warehouse - Columbus, OH | 2,000,000 | 6,500,000 | 88,100,000 | 93,250,000 | 93,250,000 | 46.63 | 6.97% | 1,309,406 | 1.40% | Eastdil | ||||||||||||||||||||||||||
17-Dec-21 | 9132 | Warehouse - Lenexa, KS | 2,308,100 | 6,294,059 | 79,200,000 | 88,130,000 | 88,130,000 | 38.18 | 7.14% | 1,241,525 | 1.41% | Eastdil | ||||||||||||||||||||||||||
17-Dec-21 | 9316 | Warehouse - Reno, NV | 1,838,800 | 8,734,300 | 128,900,000 | 150,950,354 | 150,950,354 | 82.09 | 5.79% | 2,074,396 | 1.37% | Eastdil | ||||||||||||||||||||||||||
17-Dec-21 | 9435 | Warehouse - Haslet, TX | 1,133,027 | 4,248,851 | 62,300,000 | 68,000,000 | 68,000,000 | 60.02 | 6.25% | 974,642 | 1.43% | Eastdil | ||||||||||||||||||||||||||
17-Dec-21 | 9486 | Warehouse - Forest Park (Atlanta), GA | 2,233,475 | 7,817,163 | 114,400,000 | 128,225,000 | 128,225,000 | 57.41 | 6.10% | 1,773,604 | 1.38% | Eastdil | ||||||||||||||||||||||||||
Total Distribution Center Properties this Month | 10,108,611 | $35,380,000 | $497,900,000 | $557,165,354 | $557,165,354 | $55.12 | 6.35% | $7,825,983 | 1.40% | |||||||||||||||||||||||||||||
Total Property Sales this Month | 10,394,924 | $37,097,878 | $542,200,000 | $603,415,354 | $603,415,354 | $58.05 | 6.15% | $8,695,341 | 1.44% | |||||||||||||||||||||||||||||
Property Sales this Month Average | 1,299,366 | $4,637,235 | $67,775,000 | $75,426,919 | $75,426,919 | $58.05 | 6.15% | $1,086,918 | 1.44% | |||||||||||||||||||||||||||||
Retail Properties | 1,736,346 | $7,666,953 | $149,500,000 | $208,600,000 | $208,600,000 | $120.14 | 3.68% | $8,373,002 | 4.01% | |||||||||||||||||||||||||||||
Distribution Centers | ||||||||||||||||||||||||||||||||||||||
Previous Distribution Period Total: | 1,736,346 | 7,666,953 | 149,500,000 | 208,600,000 | 208,600,000 | 120.14 | 3.68% | 8,373,002 | 4.01% | |||||||||||||||||||||||||||||
Previous Distribution Periods Average: | 157,850 | $696,996 | $13,590,909 | $18,963,636 | $18,963,636 | $120.14 | 3.68% | $761,182 | 4.01% | |||||||||||||||||||||||||||||
Retail Properties | 2,022,659 | 9,384,831 | 193,800,000 | 254,850,000 | 254,850,000 | $126.00 | 3.68% | $9,242,360 | 3.63% | |||||||||||||||||||||||||||||
Distribution Centers | 10,108,611 | 35,380,000 | 497,900,000 | 557,165,354 | 557,165,354 | $55.12 | 6.35% | 7,825,983 | 1.40% | |||||||||||||||||||||||||||||
Cumulative Distribution to Date Total: | 12,131,270 | 44,764,831 | 691,700,000 | 812,015,354 | 812,015,354 | $66.94 | 5.51% | 17,068,343 | 2.10% | |||||||||||||||||||||||||||||
Cumulative Distribution to Date Average: | 638,488 | $2,356,044 | $36,405,263 | $42,737,650 | $42,737,650 | $66.94 | 5.51% | $898,334 | 2.10% |
1 Annualized Monthly Rent (e.g. Monthly Rent due for in Sale Period X 12). Rental Abatement shall be disregarded.
2 GAAP Basis before depreciation and amortization. The Trust determined that fresh start accounting fair value (not cost) of the investment properties based upon the fair value of the individual assets and liabilities assumed as of the Effective Date (1/31/21).The total fair Value of the properties acquired was $1.935 Billion.
3 Net of credits provided to Buyer other than pro-rations. Selling costs are not netted in Net Sales Price
4 Gross Sales Price divided by the Annual Rent as defined above
5 Selling Costs as percentage of Gross Sales Price. Selling costs may not tie into the Total Expenses of Sale as reported on the Monthly Sources and Uses Report.
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Retail Portfolio as of Determination Date
By Current Lease Year Rent Per Square Foot Tier: | By Property Ownership Type: | |||||||||||||||||||||||||
Tier | Properties | Square Feet | Current Lease Year Rent 1 | Ownership Type | Properties | Square Feet | Current Lease Year Rent 1 | |||||||||||||||||||
Tier 1 -$9.00 | 32 | 3,987,421 | $35,886,789.00 | Owned | 125 | 16,572,035 | $94,062,171.00 | |||||||||||||||||||
Tier 2 -$6.00 | 77 | 10,123,178 | 60,739,068.00 | Ground Lease | 22 | 3,117,253 | 17,780,380.00 | |||||||||||||||||||
Tier 3 -$3.50 | 18 | 2,706,208 | 9,471,732.00 | |||||||||||||||||||||||
Tier 4 -$2.00 | 20 | 2,872,481 | 5,744,962.00 | |||||||||||||||||||||||
Total: | 147 | 19,689,288 | $111,842,551.00 | Total: | 147 | 19,689,288 | $111,842,551.00 |
By Current Lease Year Rent Per Property: | By Property Type: | |||||||||||||||||||||||||
Tier | Properties | Square Feet | Current Lease Year Rent 1 | Property Type | Properties | Square Feet | Current Lease Year Rent 1 | |||||||||||||||||||
>=$950,000 | 36 | 6,169,649 | $44,512,578.00 | Shopping Center | 32 | 3,226,528 | $20,536,440.00 | |||||||||||||||||||
>=$700,000 & <$950,000 | 39 | 5,090,261 | 33,408,901.00 | Freestanding | 4 | 372,420 | 2,533,116.00 | |||||||||||||||||||
>=$500,000 & <$700,000 | 39 | 4,349,021 | 22,894,280.00 | Mall | 111 | 16,090,340 | 88,772,995.00 | |||||||||||||||||||
<=$500,000 | 33 | 4,080,357 | 11,026,792.00 | |||||||||||||||||||||||
Total: | 147 | 19,689,288 | $111,842,551.00 | Total: | 147 | 19,689,288 | $111,842,551.00 |
1Current Lease Year Rent = Monthly Rent X 12, excluding rental abatement.
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Retail Portfolio as of Determination Date (Cont’d)
By Geography: | ||||||||||||||||||||||||||
State | Properties | Square Feet | Current Lease Year Rent 1 | |||||||||||||||||||||||
AR | 2 | 186,745 | $1,120,470.00 | MO | 2 | 229,828 | 1,378,968.00 | |||||||||||||||||||
AZ | 4 | 492,446 | 3,530,733.00 | MS | 1 | 99,396 | 894,564.00 | |||||||||||||||||||
CA | 25 | 3,740,792 | 21,710,731.00 | NC | 1 | 104,198 | 208,396.00 | |||||||||||||||||||
CO | 3 | 361,775 | 1,376,834.00 | NH | 2 | 230,842 | 1,122,962.00 | |||||||||||||||||||
CT | 3 | 464,682 | 929,364.00 | NJ | 5 | 882,946 | 3,510,571.00 | |||||||||||||||||||
DE | 1 | 159,878 | 959,268.00 | NM | 2 | 265,910 | 2,014,848.00 | |||||||||||||||||||
FL | 9 | 1,292,316 | 9,874,971.00 | NV | 3 | 437,937 | 3,941,433.00 | |||||||||||||||||||
GA | 2 | 204,634 | 1,143,372.00 | NY | 3 | 469,462 | 1,604,204.00 | |||||||||||||||||||
IA | 1 | 85,278 | 298,473.00 | OH | 5 | 645,447 | 3,504,477.00 | |||||||||||||||||||
ID | 1 | 151,985 | 1,367,865.00 | OK | 3 | 332,223 | 1,494,714.00 | |||||||||||||||||||
IL | 5 | 845,224 | 4,414,248.00 | OR | 1 | 157,928 | 947,568.00 | |||||||||||||||||||
IN | 1 | 99,317 | 893,853.00 | PA | 4 | 555,087 | 2,984,042.00 | |||||||||||||||||||
KS | 2 | 316,856 | 1,471,852.00 | PR | 2 | 185,946 | 1,115,676.00 | |||||||||||||||||||
KY | 2 | 251,289 | 1,821,111.00 | TN | 3 | 347,331 | 1,241,828.00 | |||||||||||||||||||
LA | 2 | 229,181 | 1,749,054.00 | TX | 24 | 2,536,198 | 16,841,806.00 | |||||||||||||||||||
MA | 1 | 141,692 | 495,922.00 | UT | 1 | 99,411 | 347,939.00 | |||||||||||||||||||
MD | 4 | 559,312 | 2,424,176.00 | VA | 5 | 736,563 | 3,330,898.00 | |||||||||||||||||||
MI | 6 | 863,012 | 3,699,718.00 | WA | 4 | 666,272 | 4,515,948.00 | |||||||||||||||||||
MN | 1 | 173,968 | 1,043,808.00 | WI | 1 | 85,981 | 515,886.00 | |||||||||||||||||||
Total: | 147 | 19,689,288 | $111,842,551.00 |
1Current Lease Year Rent = Monthly Rent X 12, excluding rental abatement.
www.ctltrust.net | 10 |
Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Distribution Center Portfolio as of Determination Date
(All Distribution Centers sold in December 2021)
Property ID | 9005 | 9130 | 9132 | 9316 | 9435 | 9486 | |||||||||||||||||
Location | Statesville, NC | Columbus, OH | Lenexa, KS | Reno, NV | Haslet, TX | Forest Park, GA | |||||||||||||||||
Square Feet | New JCP | — | — | — | — | — | — | ||||||||||||||||
Other Tenants | — | — | — | — | — | — | |||||||||||||||||
Vacant | — | — | — | — | — | — | |||||||||||||||||
Total | — | — | — | — | — | — | |||||||||||||||||
Current Lease Year Rent 1 | New JCP | — | — | — | — | — | — | ||||||||||||||||
Other Tenants | — | — | — | — | — | — | |||||||||||||||||
Total | — | — | — | — | — | — | |||||||||||||||||
Current Lease Year Rent - PSF 2 | New JCP | — | — | — | — | — | — | ||||||||||||||||
Other Tenants | — | — | — | — | — | — | |||||||||||||||||
Total | — | — | — | — | — | — |
1Current Lease Year Rent = Monthly Rent X 12
2Current Lease Year Rent PSF = (Monthly Rent X 12) / Square Feet
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Landlord and Tenant Option Properties as of Determination Date
Property ID | Option Type | Property Name | Location | Square Feet | Current Lease Year Rent 1 | Option Notice (Y/N) | Option Exercise / Closing Date | ||||||||||||||||
246 | Landlord | SouthBay Pavilion at Carson | 20700 Avalon Boulevard, Carson, CA | N/A | N/A | N | Property Sold 09-30-21 | ||||||||||||||||
389 | Landlord | Stoneridge S/C | 1500 Stoneridge Mall Road, Pleasanton, CA | 155,919 | 311,838.00 | N | |||||||||||||||||
1229 | Landlord | The Oaks | 280 Hillcrest Drive W, Thousand Oaks, CA | 144,959 | 289,918.00 | N | |||||||||||||||||
1572 | Landlord | Westfield Culver City | 6000 S Hannum Avenue, Culver City, CA | 203,832 | 1,222,992.00 | N | |||||||||||||||||
1959 | Landlord | The Shops at Tanforan | 1122 El Camino Real, San Bruno, CA | N/A | N/A | N | Property Sold 09-14-21 | ||||||||||||||||
1417 | Landlord | Westfield Santa Anita | 400 S Baldwin Avenue, Arcadia, CA | 204,563 | 715,971.00 | N | |||||||||||||||||
1950 | Landlord | Fashion Valley | 6987 Friars Road, San Diego, CA | N/A | N/A | N | Property Sold 07-09-21 | ||||||||||||||||
2649 | Landlord | Westminster Mall | 400 Westminster Mall, Westminster, CA | 152,567 | 533,985.00 | N | |||||||||||||||||
2757 | Landlord | Park Meadows | 8417 S Park Meadows Center Drive, Loan Tree CO | N/A | N/A | N | Property Sold 07-29-21 | ||||||||||||||||
2256 | Landlord | Danbury Fair | 7 Backus Avenue, Danbury, CT | 136,375 | 272,750.00 | N | |||||||||||||||||
2102 | Landlord | Westfield Annapolis | 1695 Annapolis Mall, Annapolis, MD | 126,732 | 760,392.00 | N | |||||||||||||||||
1623 | Landlord | Twelve Oaks Mall | 27150 Novi Road, Novi, MI | 155,807 | 545,325.00 | N | |||||||||||||||||
2247 | Landlord | Pheasant Lane Mall | 310 Daniel Webster Highway, Suite 103, Nashua, NH | 104,836 | 366,926.00 | N | |||||||||||||||||
2297 | Landlord | Newport Centre | 10 Mall Drive W, Jersey City, NJ | 185,330 | 648,655.00 | N | |||||||||||||||||
2477 | Landlord | Freehold Raceway Mall | 3710 Highway 9, Freehold, NJ | 149,608 | 299,216.00 | N | |||||||||||||||||
2814 | Landlord | Queens Center | 92-59 59th Avenue. Elmhurst, NY | N/A | N/A | N | Property Sold 12-23-21 | ||||||||||||||||
197 | Landlord | Gateway Shopping Center I & | II360 Gateway Drive, Brooklyn, NY | 123,942 | 247,884.00 | N | |||||||||||||||||
2040 | Landlord | Barton Creek Square | 2901 S Capitol of Texas Highway, Austin, TX | 144,129 | 864,774.00 | N | |||||||||||||||||
2763 | Landlord | The Woodlands Mall | 1201 Lake Woodlands Drive, Suite 500, Woodlands, TX | 146,000 | 511,000.00 | N | |||||||||||||||||
2795 | Landlord | Stonebriar Centre | 2607 Preston Road, Frisco, TX | N/A | N/A | N | Property Sold 07-29-21 | ||||||||||||||||
2881 | Landlord | Memorial City S/C | 300 Memorial City Way, Houston, TX | N/A | N/A | N | Property Sold 11-03-21 | ||||||||||||||||
192 | Landlord | Fair Oaks Mall | 11801 Fair Oaks Mall, Fairfax, VA | 193,422 | 386,844.00 | N | |||||||||||||||||
1462 | Landlord | Springfield Town Center | 6699 Springfield Mall, Springfield, VA | 205,772 | 1,234,632.00 | N | |||||||||||||||||
2865 | Tenant | Tamarack Village | 8348 Tamarack Village, Woodbury, MN | N/A | N/A | N | Property Sold 12-29-21 | ||||||||||||||||
2801 | Tenant | Polaris Fashion Place | 1450 Polaris Parkway, Columbus, OH | 146,990 | 881,940.00 | N | |||||||||||||||||
2921 | Tenant | Robertson’s Creek | 5751 Long Prairie Road, Flower Mound, TX | N/A | N/A | N | Property Sold 11-19-21 | ||||||||||||||||
2934 | Tenant | University Oaks S/C | 151 University Oaks, Round Rock, TX | N/A | N/A | N | Property Sold 11-19-21 | ||||||||||||||||
2982 | Tenant | Village at Fairview | 301 Stacy Road, Fairview, TX | N/A | N/A | N | Property Sold 11-19-21 | ||||||||||||||||
2749 | Tenant | Dulles Town Centre | 21030 Dulles Town Circle, Sterling, VA | 125,917 | 440,710.00 | N | |||||||||||||||||
Total: | 2,806,700 | $10,535,752.00 |
1Current Lease Year Rent = Monthly Rent X 12, excluding rental abatement.
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Substitution Properties as of Determination Date
(No Substitution Properties December, 2021)
Property ID | Property Name | Property Location | Substitution Type (Outgoing / Incoming) | Square Feet | Current Lease Year Rent 1 | Notice Date | Exercise Date | ||||||||||||||||
— | $ | — | |||||||||||||||||||||
Total: |
1Current Lease Year Rent = Monthly Rent X 12
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Monthly Leasing Activity Distribution Centers
(No Leasing Activity December, 2021)
Property ID | Lease Start Date | Tenant Name | Square Feet | Current Lease Year Rent - PSF 1 | Current Lease Year Rent 2 | Real Estate Operating Expenses | Initial Term (Months) | Extension Options (Years) | Tenant Business Description | Manager Commentary | ||||||||||||||||||||||
— | — | $ | — | |||||||||||||||||||||||||||||
Total: | — | — | $ | — |
1Current Lease Year Rent PSF = (Monthly Rent X 12) / Square Feet.
2Current Lease Year Rent = Monthly Rent X 12.
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Monthly Leasing Activity Retail Properties
(No Leasing Activity December, 2021)
Property ID | Lease Start Date | Tenant Name | Square Feet | Current Lease Year Rent - PSF 1 | Current Lease Year Rent 2 | Real Estate Operating Expenses | Initial Term (Months) | Extension Options (Years) | Tenant Business Description | Manager Commentary | ||||||||||||||||||||||
— | — | $ | — | |||||||||||||||||||||||||||||
Total: | — | — | $ | — |
1Current Lease Year Rent PSF = (Monthly Rent X 12) / Square Feet, excluding rental abatement.
2Current Lease Year Rent = Monthly Rent X 12, excluding rental abatement.
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Summary Select Financial Information
For copies of our most recent financial statements, including management’s discussion and analysis of financial condition and results of operations, sales and capital activity, you can access our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act at www.ctltrust.net as soon as reasonably practicable after they are filed with, or furnished to, the SEC. You can also review these SEC filings and other information by accessing the SEC’s website at http://www.sec.gov.
The SEC file number is 000-56236.
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SECTION II
(Provided Quarterly)
The following financial information was prepared by Penney Tenant I LLC and Penney Tenant II LLC.
As such, the Trust has not independently verified this Financial Information.
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Master Lease Guarantor Operating Performance
Key Financial and Performance Metrics | Fiscal Quarter Ended October 30, 2021* | Trailing 12 Months | |||||||||
Comparable store sales percent increase / (decrease) for Master Lease Properties ** | 31.5% | N/A | |||||||||
Liquid assets covenant compliance (as defined in the Master Leases) | Yes | N/A | |||||||||
Tangible net worth (as defined in the Master Leases - in millions)*** | $1,542 | N/A | |||||||||
Key Portfolio Metrics | Fiscal Quarter Ended October 30, 2021* | Trailing 12 Months | |||||||||
End of period number of stores - fee owned and ground leased | 206 | N/A | |||||||||
End of period number of stores - space leased | 465 | N/A | |||||||||
Gross Square Footage of stores (in millions) | 81.8 | N/A |
* Reflects financial activity from August 01, 2021 through October 30, 2021 (Fiscal Q3 2021).
** Comparable sales against LY base having COVID closures.
*** Per unaudited interim Consolidated Financial Statements of Penney Intermediate Holdings LLC as of October 30, 2021.
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Master Lease Retail Tenant Operating Performance for Retail Portfolio as of Determination Date
Fiscal Quarter Ended October 30, 2021 * | |||||||||||||||||||||||
Property Ownership | # of Properties | Square Feet | Tenant’s Sales Per Square Foot | Tenant’s Four-Wall EBITDAR | Rent | Tenant’s Four-Wall EBITDA | Tenant’s Four-Wall EBITDAR / Rent | ||||||||||||||||
Fee | 133 | 17,586,813 | $20 | 2.1 | |||||||||||||||||||
Ground Lease | 22 | 3,117,253 | $24 | 2.2 | |||||||||||||||||||
Total | 155 | 20,704,066 | $20 | $88,129,621 | $41,145,505 | $46,984,116 | 2.1 |
Fiscal Quarter Ended October 30, 2021 * | ||||||||
Rent Tier ** | # of Properties | Square Feet | ||||||
1 > $2.4 | 39 | 4,927,109 | ||||||
2 > $1.9 | 39 | 5,209,052 | ||||||
3 > $1.7 | 38 | 5,071,301 | ||||||
4 < $1.7 | 39 | 5,496,604 | ||||||
Total | 155 | 20,704,066 |
* Reflects financial activity from August 01, 2021 through October 30, 2021 (Fiscal Q3 2021)
** Rent tier determined based on book Occupancy Expense per square foot.
Rent: includes book Rent, Ground Leases, Contingent Rent, CAM & accrued Real Estate Taxes.
EBITDA: Tenant's Unallocated Store Contribution Profit, uses book rent.
EBITDAR: excludes Occupancy included in calculation of EBITDA.
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Master Lease Retail Tenant Operating Performance for Retail Portfolio as of Determination Date
Fiscal Quarter Ended October 30, 2021 * | |||||||||||||||||||||||
Tenant's Sales per Square Foot Tier | # of Properties | Square Feet | Tenant’s Sales Per Square Foot | Tenant’s Four-Wall EBITDAR | Tenant’s Four-Wall EBITDAR to Sales | Tenant’s Four-Wall EBITDA | Tenant’s Four-Wall EBITDAR / Rent | ||||||||||||||||
> $23.8 | 39 | 4,621,317 | $31 | 24.2% | 2.6 | ||||||||||||||||||
> $20 | 39 | 4,777,504 | $22 | 21.7% | 2.3 | ||||||||||||||||||
> $15.6 | 38 | 5,652,931 | $18 | 19.9% | 1.9 | ||||||||||||||||||
< $15.6 | 39 | 5,652,314 | $13 | 15.3% | 1.4 | ||||||||||||||||||
Total | 155 | 20,704,066 | $20 | $88,129,621 | 21.0% | $46,984,116 | 2.1 |
Fiscal Quarter Ended October 30, 2021 * | |||||||||||||||||||||||
EBITDAR / Rent Tier ** | # of Properties | Square Feet | Tenant’s Sales Per Square Foot | Tenant’s Four-Wall EBITDAR | Tenant’s Four-Wall EBITDAR to Sales | Tenant’s Four-Wall EBITDA | Tenant’s Four-Wall EBITDAR / Rent | ||||||||||||||||
> {$3.0}x ** | 15 | 1,636,687 | $26 | 26.3% | 3.4 | ||||||||||||||||||
> {$2.0}x ** | 77 | 10,009,011 | $23 | 22.5% | 2.4 | ||||||||||||||||||
< {$2.0}x ** | 63 | 9,058,368 | $16 | 17.2% | 1.5 | ||||||||||||||||||
Total | 155 | 20,704,066 | $20 | $88,129,621 | 21.0% | $46,984,116 | 2.1 |
* Reflects financial activity from August 01, 2021 through October 30, 2021 (Fiscal Q3 2021).
** Stratifications consolidated due to insufficient store count.
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Master Lease Subtenants
Fiscal Quarter Ended October 30, 2021 | ||||||||||||||||||||||||||
Subtenant Name | Subleased Property | Square Feet | Lease Commence Date | Lease Expiration Date *** | Rent / Month | Rent Per Square Foot / Month | Percent of Total Rent ** | Expense Provisions | ||||||||||||||||||
Donald Bruce Drummond (Optometrist) | 334 | 226 | 6/1/2017 | 5/31/2022 | 100 | 0.4 | 0.2% | JCP retains 2% of sublessee's sales run through JCP credit card machines to cover interchange fees | ||||||||||||||||||
Dr. Norman Ratner (Optometrist) | 634 | 202 | 9/1/2016 | 8/31/2021 | 100 | 0.5 | 0.1% | JCP retains 2% of sublessee's sales run through JCP credit card machines to cover interchange fees | ||||||||||||||||||
Dr. Xiao Meng Lu (Optometrist) | 1572 | 339 | 6/10/2016 | 6/30/2022 | 100 | 0.3 | 0.1% | JCP retains 2% of sublessee's sales run through JCP credit card machines to cover interchange fees | ||||||||||||||||||
Dr. Susan Shahriari (Optometrist) | 2096 | 154 | 10/1/2015 | 9/30/2022 | 100 | 0.6 | 0.2% | JCP retains 2% of sublessee's sales run through JCP credit card machines to cover interchange fees | ||||||||||||||||||
Dr. Brian W. Park, O.D. (Optometrist) | 2467 | 120 | 10/1/2014 | 9/30/2022 | 100 | 0.8 | 0.1% | JCP retains 2% of sublessee's sales run through JCP credit card machines to cover interchange fees | ||||||||||||||||||
Dr. Jeff Overbey (Optometrist) | 2649 | 178 | 3/25/2018 | 3/31/2022 | 100 | 0.6 | 0.2% | JCP retains 2% of sublessee's sales run through JCP credit card machines to cover interchange fees | ||||||||||||||||||
Dr. Laurence Rubin (Optometrist) | 2677 | 126 | 9/1/2014 | 8/31/2022 | 100 | 0.8 | 0.1% | JCP retains 2% of sublessee's sales run through JCP credit card machines to cover interchange fees | ||||||||||||||||||
Aspen Square, Inc. | 2990 | 18,058 | 10/8/2008 | 10/7/2083 | 1 | 0 | —% | |||||||||||||||||||
Total Subtenants * | 19,403 | 701 | - |
* Excludes TBA leases consistent with Section 9.2(a) of the Master Lease Agreement.
** 9 months of sublease income divided by book rent for same period.
*** Subleases for Optometrist offices auto-renew for 12 months w/ 30-day right to terminate by either party.
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SECTION III
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Management’s Comments
(Management Commentary will be provided in our 10Q’s and 10K’s)
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SECTION IV
(Provided Quarterly)
The following financial statements were prepared by Penney Intermediate Holdings LLC.
As such, the Trust has not independently verified these Financial Statements.
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SECTION V
Definitions and Disclaimers
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Penney Intermediate Holdings LLC
Consolidated Statement of Operations
(Unaudited)
($ in millions) | Three Months Ended October 30, 2021 | Nine Months Ended October 30, 2021 | ||||||||||||
Total net sales | $ | 1,804 | $ | 5,292 | ||||||||||
Credit income and other | 109 | 283 | ||||||||||||
Total revenues | 1,913 | 5,575 | ||||||||||||
Costs and expenses (income): | ||||||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 1,126 | 3,267 | ||||||||||||
Selling, general and administrative | 596 | 1,732 | ||||||||||||
Depreciation and amortization | 51 | 153 | ||||||||||||
Real estate and other, net | (8) | (14) | ||||||||||||
Restructuring, impairment, store closing and other costs | 10 | 33 | ||||||||||||
Total costs and expenses | 1,775 | 5,171 | ||||||||||||
Operating income | 138 | 404 | ||||||||||||
Interest expense, net | (28) | (78) | ||||||||||||
Income before income taxes | 110 | 326 | ||||||||||||
Income tax expense | (4) | (12) | ||||||||||||
Net income | $ | 106 | $ | 314 |
See the accompanying notes to the Unaudited Interim Consolidated Financial Statements.
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Penney Intermediate Holdings LLC
Consolidated Balance Sheet
(Unaudited)
($ in millions) | As of October 30, 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 354 | |||||||||
Merchandise inventory | 2,077 | ||||||||||
Prepaid expenses and other assets | 418 | ||||||||||
Total current assets | 2,849 | ||||||||||
Property and equipment, net | 868 | ||||||||||
Operating lease assets | 1,586 | ||||||||||
Financing lease assets | 92 | ||||||||||
Other assets | 334 | ||||||||||
Total assets | $ | 5,729 | |||||||||
Liabilities and member’s equity | |||||||||||
Current liabilities: | |||||||||||
Merchandise accounts payable | 441 | ||||||||||
Other accounts payable and accrued expenses | 738 | ||||||||||
Current operating lease liabilities | 50 | ||||||||||
Current financing lease liabilities | 2 | ||||||||||
Current portion of long-term debt, net | 20 | ||||||||||
Total current liabilities | 1,251 | ||||||||||
Noncurrent operating lease liabilities | 1,765 | ||||||||||
Noncurrent financing lease liabilities | 93 | ||||||||||
Long-term debt | 765 | ||||||||||
Deferred taxes | 6 | ||||||||||
Other liabilities | 194 | ||||||||||
Total liabilities | 4,074 | ||||||||||
Member’s equity | |||||||||||
Member’s contributions | 300 | ||||||||||
Accumulated other comprehensive income | (1) | ||||||||||
Reinvested earnings | 1,356 | ||||||||||
Total member’s equity | 1,655 | ||||||||||
Total liabilities and member’s equity | $ | 5,729 |
See the accompanying notes to the Unaudited Interim Consolidated Financial Statements.
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Penney Intermediate Holdings LLC
Consolidated Statement of Member’s Equity
(Unaudited)
($ in millions) | Member’s Contributions/(Distributions) | Accumulated Other Comprehensive Income/(Loss) | Reinvested Earnings | Total Member’s Equity | ||||||||||||||||||||||
January 30, 2021 | $ | 300 | — | 1,299 | $ | 1,599 | ||||||||||||||||||||
Member tax distributions | — | — | — | — | ||||||||||||||||||||||
Net income | — | — | 44 | 44 | ||||||||||||||||||||||
May 1, 2021 | $ | 300 | 1,343 | $ | 1,643 | |||||||||||||||||||||
Member tax distributions | — | — | (123) | (123) | ||||||||||||||||||||||
Net income | — | — | 164 | 164 | ||||||||||||||||||||||
Other comprehensive income/(loss) | — | (2) | — | (2) | ||||||||||||||||||||||
Purchase price adjustments | — | — | (56) | (56) | ||||||||||||||||||||||
July 31, 2021 | $ | 300 | $ | (2) | $ | 1,328 | $ | 1,626 | ||||||||||||||||||
Member tax distributions | — | — | (44) | (44) | ||||||||||||||||||||||
Net income | — | — | 106 | 106 | ||||||||||||||||||||||
Other comprehensive income/(loss) | — | 1 | — | 1 | ||||||||||||||||||||||
Purchase price adjustments | — | — | (34) | (34) | ||||||||||||||||||||||
October 30, 2021 | $ | 300 | $ | (1) | $ | 1,356 | $ | 1,655 |
See the accompanying notes to the Unaudited Interim Consolidated Financial Statements.
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Penney Intermediate Holdings LLC
Consolidated Statement of Cash Flows
(Unaudited)
($ in millions) | Nine Months Ended October 30, 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 314 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
Net (gain) on sale of real estate assets | (13) | ||||||||||
Net (gain) on insurance proceeds received for damage to property | (1) | ||||||||||
Depreciation and amortization | 153 | ||||||||||
Change in cash from operating assets and liabilities: | |||||||||||
Merchandise inventory | (557) | ||||||||||
Prepaid expenses and other assets | (47) | ||||||||||
Merchandise accounts payable | 290 | ||||||||||
Accrued expenses and other liabilities | 155 | ||||||||||
Net cash provided by operating activities | $ | 294 | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (41) | ||||||||||
Proceeds from sale of real estate assets | 10 | ||||||||||
Insurance proceeds received for damage to property and equipment | 4 | ||||||||||
Net cash used by investing activities | $ | (27) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowings under the revolving credit facility | — | ||||||||||
Proceeds from issuance of long-term debt | — | ||||||||||
Debt issuance costs | — | ||||||||||
Payments of long-term debt | (21) | ||||||||||
Proceeds from equity contributions | — | ||||||||||
Repayments of principal portion of finance leases | (1) | ||||||||||
Tax distributions to members | (166) | ||||||||||
Net cash used by financing activities | (188) | ||||||||||
Net increase in cash and cash equivalents | 79 | ||||||||||
Cash and cash equivalents at beginning of period | 275 | ||||||||||
Cash and cash equivalents at end of period | $ | 354 |
See the accompanying notes to the Unaudited Interim Consolidated Financial Statements.
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Penney Intermediate Holdings LLC
Notes to Unaudited Interim Consolidated Financial Statements
1. Basis of Presentation and Consolidation
Basis of Presentation
Penney Intermediate Holdings LLC (the Company), formed on October 22, 2020, is the direct subsidiary of Penney Holdings LLC (“Holdings”), a direct subsidiary of Copper Retail JV LLC (“Copper”), a Delaware limited liability company. The assets of Copper and Holdings consist solely of the 100% ownership in each direct subsidiary. Copper and its related legal entity structure were formed to acquire certain operating assets and related liabilities of J.C. Penney Company, Inc. (JCPenney) on December 7, 2020 (the acquisition date). All acquired assets and liabilities of JCPenney are owned and operated by the Company and its subsidiaries.
The JCPenney brand was founded by James Cash Penney in 1902. We operate the JCPenney brand through the operation of 671 department stores in 49 states and Puerto Rico, as well as through our eCommerce website at jcp.com and our mobile application. We sell family apparel and footwear, accessories, fine and fashion jewelry, beauty products and home furnishings. In addition, our department stores provide services, such as styling salon, optical, and portrait photography.
These Unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally
accepted in the United States. The accompanying Unaudited Consolidated Financial Statements, in our opinion, include all material adjustments necessary for a fair presentation and should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto for the fiscal year (FY) ended January 30, 2021. We follow the same accounting policies to prepare quarterly financial statements as are followed in preparing annual financial statements. A description of such significant accounting policies is included in the notes to the Audited Financial Statements for the fiscal year ended January 30,2021. Because of the seasonal nature of the retail business, operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.
Fiscal Year
The Company’s fiscal year consists of the 52-week period ending on the Saturday closest to January 31. As used herein, “three months ended October 30, 2021” refers to the 13-week period ended October 30, 2021 and “nine months ended October 30, 2021” refers to the 39-week period ended October 30, 2021. Fiscal 2021 will consist of the 52-week period ending on January 29, 2022.
Basis of Consolidation
All significant inter-company transactions and balances have been eliminated in consolidation.
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Penney Intermediate Holdings LLC
Notes to Unaudited Interim Consolidated Financial Statements
2. Global COVID-19 Pandemic
On March 11, 2020, the World Health Organization declared a global pandemic related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). Subsequently, the COVID-19 pandemic has significantly impacted the economic conditions in the U.S. and globally. While all of our stores have been open from January 31, 2021 to October 30, 2021, the COVID-19 pandemic has, and continues to have, an impact on the Company’s business operations, financial position, liquidity,capital resources and results of operations. The full impact of COVID-19 will continue to depend on future developments,including the continued spread and duration of the pandemic, variant strains of COVID-19, the availability and distribution of effective medical treatments or vaccines as well as any related federal, state or local governmental orders or restrictions. In addition, numerous uncertainties continue to surround the pandemic and its ultimate impact on the Company, including the timing and extent of any recovery in consumer traffic and spending, and potential delays, interruptions and disruptions in the Company’s supply chain, all of which are highly uncertain and cannot be predicted. Current financial information may not be indicative of future operating results.
3. Acquisition
On October 28, 2020, Copper entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with JCPenney and certain of its subsidiaries to acquire substantially all of JCPenney’s retail and operating assets, and assume certain of JCPenney’s obligations associated with such purchased assets, pursuant to Section 363 of the U.S. Bankruptcy Code in connection with JCPenney’s voluntary chapter 11 cases pending in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"). The Asset Purchase Agreement and the transactions contemplated thereby were approved by the Bankruptcy Court on November 9, 2020. Copper subsequently designated the Company and its subsidiaries as purchasers under the Asset Purchase Agreement. The acquisition of substantially all of the retail and operating assets of JCPenney by the Company and its subsidiaries was completed on December 7, 2020. Pursuant to the Asset Purchase Agreement, the Company and its subsidiaries also assumed certain liabilities related to such assets.
The company accounted for the acquisition as a business combination in accordance with ASC 805. The consideration transferred for the acquisition was as follows:
($ in millions) | December 7, 2020 | |||||||
Cash paid, net of cash acquired of $266 | $ | 634 | ||||||
Term loan | 520 | |||||||
Estimated contingent consideration | 105 | |||||||
Total consideration transferred, net of cash acquired | $ | 1,259 |
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Penney Intermediate Holdings LLC
Notes to the Unaudited Interim Consolidated Financial Statements
The estimated contingent consideration consisted of both (i) an earn-out liability with fair value of $74.1 million and (ii) a liability related to any future receipts of credit card company holdback deposits with a fair value of $31.2 million as of the acquisition date.The value of the earn-out liability depends on the twelve-month average of the net merchandise accounts payable applicable for FY 2021 and FY 2022 and was estimated using a Monte Carlo simulation approach. The credit card holdback liability is equal to 50% of any cash proceeds received in connection with the release of the bankruptcy related credit card company holdbacks.
In accordance with GAAP, the carrying value of the contingent consideration must be remeasured at the end of each reporting period. As of October 30, 2021, the fair value of the estimated earn-out liability increased by $9 million to $83 million. The increase in fair value was recorded as a period expense in Restructuring, impairment, store closing and other costs in our Consolidated Statement of Operations.
As noted in the Audited Consolidated Financial Statements for the fiscal year ended January 30, 2021, the assets acquired and liabilities assumed in connection with the acquisition were recorded at fair value. Copper has a measurement period of up to a year after the acquisition date to adjust any provisional asset and liability amounts acquired. The Company recorded purchase price adjustments for provisional assets and liabilities acquired on December 7, 2020 totaling ($90) million in the nine months ended October 30, 2021. These purchase price adjustments are noted below and reduced the bargain purchase gain to $1,204 million,which represents the excess of the fair value of net assets acquired over the consideration transferred.
($ in millions) | October 30, 2021 | |||||||
Reserve for acquired assets | $ | (62) | ||||||
Puerto Rico entity deferred tax liabilities | (7) | |||||||
Other adjustments | (21) | |||||||
Total purchase price adjustments | $ | (90) | ||||||
Bargain purchase gain (original) | 1,294 | |||||||
Adjusted bargain purchase gain | $ | $1,205 | ||||||
4. Revenue
Our contracts with customers primarily consist of sales of merchandise and services at the point of sale, sales of gift cards to a customer for a future purchase, customer loyalty rewards that provide discount rewards to customers based on purchase activity, and certain licensing and profit sharing arrangements involving the use of our intellectual property by others. Revenue includes Total net sales and Credit income and other. Net sales are categorized by merchandise and service sale groupings as we believe it best depicts the nature, amount, timing and uncertainty of revenue and cash flow.
Credit income and other encompasses the revenue earned from the agreement with Synchrony associated with our private label credit card and co-branded MasterCard programs.
The Company has contract liabilities including consideration received for gift card and loyalty related performance obligations which have not been satisfied as of the balance sheet date. The liability for unredeemed gift cards and customer loyalty programs is included in Other accounts payable and accrued expenses in the Consolidated Balance Sheet and was $130 million as of October 30, 2021 and $143 million as of January 30, 2021. Revenue of $36 million was recognized during the current year from the January 30, 2021 ending balance.
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Penney Intermediate Holdings LLC
Notes to the Unaudited Interim Consolidated Financial Statements
5. Long-Term Debt
($ in millions) | October 30, 2021 | |||||||
Issue: | ||||||||
2020 Term Loan Facility (Matures in 2026) | $ | 506 | ||||||
FILO Loan Due 2025 | 292 | |||||||
Total debt | 798 | |||||||
Unamortized debt issuance costs | (13) | |||||||
Less: current maturities | (20) | |||||||
Total long-term debt | $ | 765 | ||||||
As of October 30, 2021, there were no outstanding borrowings under our $2.0 billion senior secured asset-based revolving credit facility (Revolving Credit Facility). Pricing under the Revolving Credit Facility is tiered based on our utilization under the line of credit. As of October 30, 2021, the applicable interest rates were LIBOR (subject to a 0.75% floor) plus 2.75% or Prime Rate plus 1.75%. The applicable rate for standby letters of credit was 2.75%, while the required unused commitment fee was 0.375% for the unused portion of the Revolving Credit Facility.
On December 1, 2021, the Company paid the full balance of the 2020 Term Loan of $506 million.
6. Litigation and Other Contingencies
We are subject to various legal and governmental proceedings involving routine litigation incidental to our business. While no assurance can be given as to the ultimate outcome of these matters, we currently believe that the final resolution of these actions, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources.
7. Subsequent Events
The Company has evaluated subsequent events from the balance sheet date through December 14, 2021, the date at which the financial statements were available to be issued.
As of November 1, 2021, the Company hired a new CEO and the interim CEO was appointed as the executive chairman of the Board of Directors.
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Penney Intermediate Holdings LLC
Narrative Report
Three Months Ended October 30, 2021 | Nine Months Ended October 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | Actual | Plan | B/(W) | Actual | Plan | B/(W) | |||||||||||||||||||||||||||||||||||||||||||||||
Total net sales | $ | 1804 | $ | 1931 | $ | (127) | $ | 5,292 | $ | 5,287 | $ | 5 | |||||||||||||||||||||||||||||||||||||||||
Credit income and other | 109 | 87 | 22 | 283 | 246 | 37 | |||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | 1,913 | 2,018 | (105) | 5,575 | 5,533 | 42 | |||||||||||||||||||||||||||||||||||||||||||||||
Cost and expenses/(income): | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of goods sold | 1,126 | 1,271 | 145 | 3,267 | 3,506 | 239 | |||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 596 | 641 | 45 | 1,732 | 1,894 | 162 | |||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 51 | 81 | 30 | 153 | 257 | 104 | |||||||||||||||||||||||||||||||||||||||||||||||
Real estate and other, net | (8) | (2) | 6 | (14) | 19 | 33 | |||||||||||||||||||||||||||||||||||||||||||||||
Restructuring, impairment, store closing and other costs | 10 | — | (10) | 33 | 36 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||
Total costs and expenses | 1,775 | 1,991 | 216 | 5,171 | 5,712 | 541 | |||||||||||||||||||||||||||||||||||||||||||||||
Operating income | 138 | 27 | 111 | 404 | (179) | 583 | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 28 | 26 | (2) | 78 | 76 | (2) | |||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 110 | 1 | 109 | 326 | (255) | 581 | |||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | 4 | – | (4) | 12 | 0 | (12) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 106 | $ | 1 | $ | 105 | $ | 314 | $ | (255) | $ | 569 |
See accompanying Notes to Consolidated Financial Statements (Unaudited).
Summary Results of Operations
Total net sales were $1.80 billion or $0.13 billion unfavorable for the three months ended October 30, 2021 and were $5.3 billion or $0.05 billion favorable for the nine months ended October 30, 2021 when compared to Plan.
Cost of goods sold as a percent of total net sales were 62.4% and 61.7% for the three months and nine months ended October 30, 2021, respectively outperforming Plan by $0.15 billion and $0.24 billion, respectively. Selling, general and administrative expenses were $0.60 billion or 33.0% of total net sales compared to Plan of 33.2% for the three months ended October 30, 2021 and $1.73 billion or 32.7% of total net sales compared to Plan of 35.8% for the nine months ended October 30, 2021 due to lower store expenses and continued tight expense control. Depreciation and amortization were lower than Plan due to
impact of purchase price accounting vs historical net book values.
Financial Condition and Liquidity
As of October 30, 2021, the borrowing base under the ABL was $1.66 billion with $1.41 billion excess availability after deducting $0.25 billion in letters of credit. There were no outstanding borrowings. Including cash and cash equivalents of $0.35 billion, the Company had $1.76 billion in total liquidity.
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Penney Intermediate Holdings LLC
Statement of Consolidated Adjusted EBITDA
For the Nine Months Ended October 30, 2021
($ in millions) | Nine Months Ended October 30, 2021 | |||||||
Net Income | $ | 314 | ||||||
Plus: | ||||||||
Interest expense | 78 | |||||||
Income tax expense | 12 | |||||||
Depreciation and amortization | 153 | |||||||
Restructuring, impairment, store closing and other costs | 33 | |||||||
Minus: | ||||||||
Real estate and other, net | (14) | |||||||
Consolidated adjusted EBITDA | $ | 576 |
Prepared in accordance with the definition of Consolidated Adjusted EBITDA per Section 1.1 of the Credit and Guaranty
Agreement dated December 7, 2020.
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
SECTION V
Definitions and Disclaimers
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Monthly Distribution Date Statement
Definitions
The following metrics apply to Quarterly Reporting only:
(A) “Tenant’s Sales per Square Foot” is not a measure of the Trust’s financial performance and is provided solely for investors’ informational purposes based on the information that the Trust receives from the Tenant. This measure of operations is derived from sales information reported to the Trust by the Tenant in accordance with the retail master lease and/or distribution center master lease (each, a “Master Lease”), as applicable. The Trust and the Manager do not have the ability to verify the calculation of this information. The calculation of this information by the tenant may be different than how similar measures of operations might be calculated by others. Finally, the Trust is unable to reconcile “Tenant’s Sales per Square Foot” to a comparable GAAP financial measure because no reconciliation is provided for in the applicable Master Lease. Therefore, investors should be cautious about relying upon “Tenant’s Sales per Square Foot.”
(B) “Tenant’s Four-Wall EBITDAR” is not a measure of the Trust’s financial performance and is provided solely for investors’ informational purposes based on the information that the Trust receives from the Tenant. This measure of operations is calculated in accordance with the [Master Lease] and is reported to the Trust by the tenant in accordance therewith. The Trust and the Manager do not have the ability to verify the calculation of this measure of operations. In addition, the calculation of “Tenant’s Four-Wall EBITDAR” in accordance with the applicable Master Lease may be different than how similar measures of operating statistic might be calculated by others. Finally, the Trust is unable to reconcile “Tenant’s Four-Wall EBITDAR” to a comparable GAAP financial measure because no reconciliation is provided for in the applicable Master Lease. Therefore, investors should be cautious about relying upon “Tenant’s Four-Wall EBITDAR.”
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Contact Us For additional information, please contact: Investor Relations at (310) 526-1707 | Distribution Date: 01/10/2022 Record Date: 01/07/2022 Determination Date: 12/31/2021 |
Monthly Distribution Date Statement
Disclaimer
Forward-Looking Statements: This distribution statement contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and developments and other matters that are not historical facts. The forward-looking statements are based on our beliefs as well as on a number of assumptions concerning future events. Readers of these materials are cautioned not to put undue reliance on these forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. We do not undertake a duty to update these forward- looking statements, which speak only as of the date on which they are made. The most important factors that could prevent us from achieving the stated goals include, but are not limited to: (a) the severity, duration and geographical scope of the COVID-19 pandemic and the effects of the pandemic and measures intended to prevent its spread on our business, results of operations, cash flows and financial condition, including declines in rental revenues and increases in operating costs in the portfolio, deterioration in the financial conditions of the tenants and their ability to satisfy their payment obligations, increased risk of claims, litigation and regulatory proceedings and the ability of federal, state and local governments to respond to and manage the pandemic effectively; (b) the ability and willingness of the tenants, operators, managers and other third parties to satisfy their obligations under their respective contractual arrangements, including, in some cases, their obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (c) the ability of the tenants, operators, borrowers and managers to maintain the financial strength and liquidity necessary to satisfy their respective obligations and liabilities to third parties; (d) macroeconomic conditions such as a disruption of or a lack of access to the capital markets, changes in the debt rating on U.S. government securities, default or delay in payment by the United States of its obligations; (e) the nature and extent of future competition, including new construction in the markets in which the our properties are located; (f) the ability of the tenants, operators and managers, as applicable, to comply with laws, rules and regulations in the operation of the properties; (g) the ability and willingness of the tenants to renew their leases upon expiration of the leases, the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event the we exercises our right to replace an existing tenant or manager; and (h) the other factors set forth in the our periodic filings with the Securities and Exchange Commission.
Non-GAAP Presentation: Certain of the financial measures presented in this distribution statement are non-GAAP financial measures, other metrics and other information. We believe that non-GAAP financial measures, other metrics and other information provide useful information to investors regarding our financial condition, result of operations and other matters. The non-GAAP financial measures, other metrics and information as presented in this distribution statement may be adjusted in management’s reasonable judgment as appropriate, taking into account a variety of circumstances, facts and conditions. These adjustments may be material and may or may not be specifically identified in footnotes or otherwise.
Our measures, metrics and other information (and the methodologies used to derive them) may not be comparable to those used by other companies. The foregoing language applies to (and supersedes if different from) the specific definitions contained herein. Readers are cautioned to refer to our periodic filings furnished to or filed with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which are prepared in accordance with GAAP. This distribution statement and the information contained herein should be reviewed in conjunction with such filings.
SEC Reporting: The information in this distribution statement should be read in conjunction with our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our earnings press release and other information filed with, or furnished to, the SEC. You can access our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act at www.ctltrust.net as soon as reasonably practicable after they are filed with, or furnished to, the SEC. You can also review these SEC filings and other information by accessing the SEC’s website at http://www.sec.gov. We routinely post important information on our website at www.ctltrust.net in the “Investors” section, including financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading “Investors.” Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls and filings with the SEC. The information on or connected to our website is not, and shall not be deemed to be, a part of, or incorporated into this distribution statement.
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