Good morning, and welcome to the CBL Properties First Quarter Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Scott Brittain with Corporate Communications. Please go ahead, sir.

Thank you, and good morning. We appreciate your participation in the CBL Properties conference call to discuss first quarter results. Presenting on today's call are Stephen Lebovitz, President and CEO; Farzana Khaleel, Executive Vice President and CFO; and Katie Reinsmidt, Executive Vice President and CIO. This conference call contains forward-looking statements within the meaning of the federal securities laws. Such statements are inherently subject to risk and uncertainties. Future events and actual results, financial and otherwise, may differ materially. We direct you to the company's various filings with the SEC for a detailed discussion of these risks. A reconciliation of non-GAAP financial measures to the comparable GAAP financial measure was included in yesterday's earnings release and supplemental that will be furnished on Form 8-K and that are available in the Invest section of the website at cblproperties.com. We will be limiting this call to one hour. [Operator Instructions]. I will now turn the call over to Mr. Lebovitz for his remarks. Please go ahead, sir.

Thank you, Scott, and good morning, everyone. As we said in our call last quarter, 2018 will be a difficult year for CBL. While our results for the first quarter were in line with our expectations and Street estimates, I can assure you that we are not satisfied and are working diligently to improve our results. First quarter was most significantly impacted by bankruptcies and store closures in late 2017, and additional bankruptcies in the first quarter. Despite these challenges, we are encouraged by signs of a recovery in the general retail landscape and our portfolio. Sales for the first quarter were strong and many of our top retailers reported improved earnings. This bodes well for occupancy costs and future leasing negotiations and should lead to improved leasing metrics later in the year. One of our major goals for the year is to stabilize our operations and cash flow, and these improvements are critical to this effort. In addition, we are extremely focused on enhancing liquidity and financial flexibility, which Farzana will discuss in more detail. We are in preliminary discussions to refinance our unsecured term loan that matures late next year as well as our lines of credit which mature in 2020. Our proactive approach will ensure we are in a strong financial position with a lengthened maturity schedule and access to capital. This quarter, we made solid progress toward diversifying our tenant base, with more non-apparel users as well as renewing and expanding with successful retail concepts. In the first quarter, approximately 70% of our new leasing was executed with non-apparel tenants. These included entertainment and dining users such as Round1, Dave & Buster's and Prime 22 Steakhouse. We're also having active discussions to add new uses to our properties, including hotels, multifamily, medical office and co-working locations.…

Thank you, Stephen. As Stephen said, our top priority from an operational point of view is to stabilize our results. We expect to begin -- or we expect to make progress on this goal in the back half of the year, as we begin to benefit from the impact of leasing and redevelopment activities. For the first quarter, portfolio occupancy ended at 91.1%, down 100 basis points compared with the prior-year quarter. Same-center mall occupancy declined 90 basis points from the prior year. Bankruptcy-related store closures impacted mall occupancy by approximately 95 basis points or 175,000 square feet for the first quarter. In addition, occupancy was impacted by the closure of 15 Teavana locations, totaling 17,000 square feet. We do expect additional occupancy pressure in the second quarter due to the closure of the Best Buy Mobile stores. We have 36 locations representing 50,000 square feet, which are all expected to close by the end of May. As a result of these closures and the new leasing coming online, primarily in the back half of the year, we expect second quarter to be our weakest from an occupancy standpoint. During the quarter, we executed over 1.1 million square feet of leases in total. On a comparable same-space basis, we signed roughly 707,000 square feet of new and renewal mall shop leases at an average gross rent decline of 13.6%. Rents on new leases for stabilized malls were relatively flat and renewal leases were signed at an average of 15% lower than the expiring rent. Renewal leasing activity during the quarter was negatively impacted by 5 renewal leases signed with Express, 7 with Motherhood Maternity and 11 Hollister/Abercrombie renewals. These 23 leases represented 450 basis points of the decline in renewals and 420 basis points of the overall decline. As we…

Thank you, Katie. First quarter adjusted FFO per share was in line with Street estimates at $0.42, representing a decline of $0.10 per share compared with $0.52 per share for the first quarter 2017. The majority of the variance was a result of $0.05 per share from lower property NOI and $0.02 per share lower gains on our parcel sales. First quarter same-center NOI declined 6.8% or $11.2 million, with the revenues down $10.5 million and expenses increasing $0.7 million. The decline in revenues was primarily due to lower occupancy and rent reductions related to tenants and bankruptcy. Property operating expense improved by $1.3 million. However, maintenance and repair expense increased $1.7 million, which included a $1 million increase in snow removal expense. Real estate tax expense also increased by $0.3 million. We are maintaining our 2018 guidance for adjusted FFO in the range of $1.70 to $1.80 per share, which assumes a same-center NOI decline of negative 6.75% to negative 5.25%. Guidance continues to include a top line reserve to take into consideration the impact of unbudgeted bankruptcies, store closures and rent reductions. In addition to the impact of the liquidation of Bon-Ton, year-to-date, there have been a handful of bankruptcies announced, most notably Claire's and Walking Company. Based on our Q1 results and current expectation of rent loss from rent reductions, closures and co-tenancy from activity year-to-date, we expect to utilize approximately $10 million to $13 million of the reserve. We will continue to update this number as the year progresses, as well as other assumptions that underlay our guidance. We have continued to enhance our balance sheet by reducing total pro rata debt. As previously announced, in January, we utilized $37 million of availability to retire the loan secured by Kirkwood Mall in Bismarck, North Dakota, adding…

Thank you, Farzana. There is no doubt that we faced many challenges in 2018, but we are taking a proactive approach to leasing operations and also in managing our liquidity position and balance sheet. The progress on our balance sheet over the past year has been notable. We've reduced leverage, reduced borrowing cost and lengthened our maturity schedule. We are continuing these efforts by addressing our upcoming maturities well ahead of schedule. We are also focused on managing our capital spend and funding redevelopments, primarily from our significant free cash flow. These investments will generate future growth in NOI and FFO, diversifying our income streams and reinventing our properties. We are also supplementing free cash flow with asset sales, such as the ones announced this quarter. We are confident that these strategies will put CBL in a stronger position, both as this year progresses, and the years to come. Thank you, and we will now take your questions.

[Operator Instructions]. Our first question will come from Christy McElroy with Citi.

It seems like the quarterly re-leasing spread numbers have been getting more negative each quarter. Katie, I know you talked about negotiating occupancy cost reductions instead of allowing those stores to close. If we look at the 2018 commencements, with rents down 14.5% on average, how much space do you have left to lease for 2018 commencement, and is it tougher space? So I'm just trying to get a sense for if that number could change more meaningfully and just sort of get a handle on if you expect a stabilization in those re-leasing spread trends?

Yes, Christy, we are hopeful that there will be stabilization and improvement in the leasing spread trends throughout the year. I think one supporting factor is the sales growth that we've seen in the first quarter, which was great and we hope that continues throughout the year. So those positive indicators are definitely contributing to our goal of having better leasing spreads as we continue throughout the year. We also had a lot of work to do to get through the bankruptcies, so we had the Claire's and the -- and the Payless that we had last year and some of those, that we're running through our lease spread numbers, so I think that weighs it down. We do still have some Ascena leases and some struggling retailers that we'll work through. So we don't expect to have positive spreads next quarter, but we're hopeful that as the year progresses, we'll see those trends improve.

Okay. And then just on Janesville, sorry if I missed this. Did you say what the cap rate was on that? And then just more broadly, in the context of using disposition proceeds to help pay down the $190 million term loan in the summer, Stephen, you mentioned you're marketing other assets. Are these Tier 3 as well? Or maybe you can just provide some color on what you're having conversations on right now.

Well, we didn't provide the cap rate and so you didn't miss it. And we haven't provided cap rates for some time. And I think as you know, the cap rate is really a function of the NOI, which is a moving target, so that's why we don't do it. And then as far as other properties, they are a combination of committee centers that we feel like have a real good market today and that we have a good probability of executing on -- executing successfully. A couple of the office buildings that, where we just signed leases that put them in a really good position to sell. And then beyond that, like I said, we're being opportunistic. And Janesville is a Tier 3 property, we sold a lot of Tier 3 properties the last few years. We sold the outlet center in Oklahoma City last year. So we're looking at just where the best opportunities are, but as I think everyone knows, the market's not an easy market for dispositions by any means. We're really proud of Janesville because it has one of the Bon-Ton stores that's closing, but the buyer is a really strong group that we've worked with and established relationship over time, and we have a lot of confidence in them and it helps having those relationships. So we're going to continue to be opportunistic and look for the best opportunities to raise capital.

The next question comes from Todd Thomas of KeyBanc Capital Markets.

This is Drew on for Todd today. Steve, you mentioned in your prepared remarks that of the 14 Bon-Tons you have remaining, 8 are leased. I was just wondering if you could share some details on who those leases are with. And maybe if you could talk about the $60 million to $90 million of capital required and what your returns are that you're projecting for that?

Yes, just to clarify, we haven't leased them to someone else. They were leased by Bon-Ton from us. So we had 14; 4 of those are owned by other companies, but they're in our properties; two are ground leases; four were Bon-Ton leases. So those are going away. And then the $60 million to $90 million is the spend that we estimate to replace those properties. And some of the ones where they're owned by others, we'll work with them, either subleasing or purchasing their positions, or to be determined how that plays out, depending on who the user ends up being. And then the ones that we own, we'll be replacing. And we feel like it's a very manageable number. It's going to happen over a period of years, it's not going to happen initially. And we have the one that we announced, where we already have a supermarket signed that will start construction later this year, and we'll be announcing details on that in the not-too-distant future. We have another one, where we're very close to a lease, to replace one of the ones that's in our portfolio. And then like I said, we expected this to happen. So we've been preparing, we've been working with a number of prospects. Not the ideal to have it, but we were prepared and we'll work through it.

Got it. I think I was a little confused there. And then just regarding the 36 Best Buy Mobile stores, could you talk about your plans for backfilling those? And I'm assuming that's factored into the reserve. Is that accurate?

Yes, Drew, so the Best Buy Mobile stores are all really well located. They're mostly center court, so those should be readily re-leasable. It usually takes 12 to 18 months to kind of backfill a slug of closures like that. So our leasing guys have been working on it for some time, so we expect those to be backfilled pretty quickly. And then what was the second part of your question?

Just that if that's factored into the reserve.

It was in the reserve. Yes, it was in the reserve. So that was baked into what we expected for this year, the part that we're going to use.

Got it, okay. And then just last one for me. On the occupancy loss at The Outlet Shoppes at Laredo and Bluegrass in the non-stabilized bucket, could you kind of just describe to us what's happening there and what your outlook is for those centers and for the non-stabilized bucket in general?

Yes, so that actually, just to clarify, that's not same center. So the prior year included Bluegrass and Laredo. Bluegrass became a stabilized mall this year, so that's in the stabilized mall pool, and this year just includes Laredo. So there really wasn't that large decline that you're talking about, it's just 2 centers were in the prior year and one center was in this year.

And Laredo opened last year, and we've had really strong sales growth with all our border properties, including that. So the leasing opened at a pretty normal amount for a new center, and we're looking for increases and progress on that as the year goes on.

Next question is from Rich Hill of Morgan Stanley.

Just two quick questions from me. First of all, I was wondering if you could maybe just update on -- and your views of buying back additional Sears stores. Some of your peers have talked about maybe being a little bit more active there and I think Sears is out in the market. So I was wondering how you were thinking about that right now?

Sure, Rich. So we, at this point, are, I guess, taking a little bit of a pause on the Sears store acquisition. We bought the five last year that were in the process of working through the redevelopment. One of them we announced this quarter, Brookfield Square in Milwaukee, so we have the other four that we're making good progress on. And we're in communication with groups that are looking at some of the Sears stores, that would work with us on their redevelopment plans. But for now, we really think that the right thing to do, just given kind of overall capital and just watching what's going on with Sears, is to just kind of see where it plays out over the next few months of this year.

Got it, helpful. And then just one follow-up question regarding your prepared remarks. I'm sorry if I didn't hear this correctly, but I thought you said an extra week in January helped year-over-year sales growth? Does that mean you're going off the retail calendar and actually including the extra week? Or how should we think about that?

That's just the retail calendar, the way it played out this year. And January had that extra week that went into their results, so that helped January sales compared with '17. But we see, over the course of the year, it tends to even out. And the sales trends overall are positive, like we've said, and that's a good sign as we move into the year.

The next question comes from Craig Schmidt with Bank of America.

I was just wondering, are you still amending leases to the same pace that you were in 2017? Or has the good holiday and the sales lift in the first quarter sort of slowed that activity?

Craig, well, I mean, it's not nearly the pace of '17. The bankruptcies in first quarter '18 were half on a dollar amount for us, and 90% of that was Bon-Ton. The biggest one is Claire's, and Claire's is a, more of a restructuring, they're not looking to close stores, and that's the one we are primarily talking about lease adjustments. And then beyond that, there is continued pressure on lease spreads for certain retailers whose sales have been down, but the sales improvements at other retailers are going to help out, and that's why we feel like as the year goes on, the leasing metrics will improve.

Okay. And is The Walking Company intending to close stores or are they still in the negotiation phase?

Yes, they are -- that's another one that I didn't mention that filed, where we are -- they're keeping their stores open, but we're working with them on rent. And they're just not the magnitude of Claire's, so I didn't mention that, but that is another bankruptcy that we had over the quarter.

The next question is from Nick Yulico with UBS.

This is Greg McGinniss on with Nick. I'm curious about occupant -- how occupancy is trending in the centers. And maybe excluding the impact of Best Buy Mobile next quarter, but any insight you can provide on percentage of centers losing versus maintaining or growing occupancy, will be appreciated.

Yes, I mean, occupancy is stable. We did roughly 200,000 square feet more leasing in the first quarter this year compared to last year. So we are making headway. We've got a lot of new leasing activity with different kind of retailers throughout the portfolio. Like I talked about, 70% is non-apparel, and we are seeing real traction in our efforts to diversify away from apparel and bring in new uses. We did, I've mentioned Altar'd State in the past, we've continued to do activity with them. Other retailers -- La Senza, which is L Brands, is starting to open stores in the U.S. and that's a positive; Carter's, who is children's and children's in general and family uses are doing well. And then beyond that, we've continued to do more business with the value retailers, some of the boxes like TJX and HomeGoods and ULTA; and then smaller stores like Five Below. So there's a lot going on in leasing, both specialty and box, that is going to help us as this year goes on.

Okay. And then, tenant allowances were up a decent amount versus last year. Is this just due to the more leasing that you said you're doing, or are you actually giving more money on the leases?

It's really just mostly timing, and over the course of the year, we expect tenant allowances to be roughly flat from what they were last year.

And that's not different from long-term trends?

Excuse me? From long term?

So 2017 was obviously a difficult year as well. So I'm trying to understand if 2017 and 2018 are related or...?

No, I mean, I think it's going to be consistent year-over-year. And I mean, 2017 was difficult with all the bankruptcies and the fallout. But one thing, we have been doing a lot of H&Ms the last few years. We've slowed down because we've worked through a number of those. So that had pushed up tenant allowances in '15, '16, even '17. We still have 2 this year that are opening that will contribute to that, but it's fewer than we were doing. So it tends to even out. Some of the entertainment uses are --- have higher tenant allowances. But the way we've been doing restaurants with ground leases, then we limit the allowance on those deals.

The next question comes from Jeff Donnelly with Wells Fargo.

Farzana, thanks for the commentary on the maturities of the term loan facility. I know you can't get into specifics about size or pricing on your negotiations, but are you able to give us some color on maybe what the preference are of the debt community? Is there a, for example, a preference for collateralizing the facility or maybe higher cost, smarter commitment? I'm just kind of curious where their preferences might fall in the current environment.

Sure, Jeff. Obviously, there's a balance, there's a preference from the lender and there's a preference from the borrower. So we have to meet happily in between. So the negotiations, it's very preliminary and I think it's important for us to be flexible and have our options open, where we can access the capital, access the debt, from the lender community -- the bank community, and then also have the capacity that we can use to run our business. And our lender group is been -- they have been with us for a long period of time, and they understand our needs and our capacity to continue to work through our business challenges that we are facing. And they have really strong confidence in our management team, and that's key to executing our results and our operations. So I'll say that while I don't want to give you any specifics, we can expect cost to be up slightly, that just seems that it's logical. And then the flexibility that we are working with, whether it's secured or unsecured, our preference is, of course, unsecured. So we are continuing to work with them. So we'll give you more color, without getting into more specifics here.

That's helpful. Maybe just switch gears, this one maybe is for Stephen. Your renewal spreads have been down since maybe the third quarter, but it's been a relatively consistent level, the magnitude of the decline. I guess, I'm just curious, is there maybe a conscious plan to provide rent relief to maintain occupancy levels and maybe expedite rightsizing of rents to a particular occupancy cost level, like you're trying to sort of do a reset, if you will, and sort of retain tenants and build from there? I'm just curious. And maybe as a, just a quick follow-up, late last year, you felt store closings in 2018 could be lower than '17. I'm just curious if that's panning out, in your mind?

Sure, Jeff. So I guess the first question is, I don't think we have a negative re-leasing spread target that we've set that we are trying to maintain this quarter. So it's -- it really is a function of, like I talked about, some of the larger group transactions that we've done. There was -- the package that we did with Express; there was some Abercrombie deals that we did that bought us down disproportionately; Destination Maternity. So those really hit us harder this quarter. And we've worked through a number of these in the past year to 18 months. And so there has been a reset, that's a good way to put it, with a number of retailers that were either in bankruptcy or distressed. Charlotte Russe never went through bankruptcy, but they were able to avoid it because us and other landlords worked with them on rent. So I think that has brought our spreads -- through the spreads, have brought our rents to a level that's sustainable going forward. And like we've said, we've done shorter term in some cases because we're looking to replace. And that's a big part of our strategy, too, and we've been able to reduce our exposure to a number of the retailers that are having challenges and diversify the use. So I mean, there's not a number target, but we expect to see better results as the year goes on. It's not going to be second quarter, but we do expect some progress, because of what we've worked through over the past 3 or 4 quarters, like you talked about.

Our next question is from Carol Kemple with Hilliard Lyons.

Given the additional costs from the Bon-Ton stores that you are getting back, has that changed your thoughts on the dividend at this point?

Well, Carol, the dividend is really a separate consideration that the board will continue to take up and that we will evaluate. And last year, the action that we took on the dividend was driven by what we saw happening in terms of NOI and FFO. This year, given all the bankruptcies, the Bon-Ton is more a capital investment. The Bon-Ton's definitely one of the short-term pain, long-term gain scenarios. And it will allow us to bring in other types of uses. A big part of our strategy is to replace some of the department stores that aren't performing well and bring in other boxes or fitness, or large users that are hard to accommodate in a mall. So it does give us that opportunity. So it doesn't -- and then also, the $60 million, $90 million is going to occur over a number of years. It's not a short-term immediate cost that we have.

Okay. And then on your tenant reimbursements, they look like they were down a little relative to last year. Was there extra snow removal in first quarter? Should we expect the rest of the year to be similar to 2017 levels? Or where should we look at that number?

Yes, Carol. It was down and part of it is also we sold properties. That's part of the reason the reimbursements were down. So comparatively for same-center, they are down, but it is because of all the rent concessions and the -- both rent, combination of rent concessions and giving up on some of the reimbursements. That's the really the difference. But overall, it should trend back, the second quarter is going to be similar, but as the year goes on, the reimbursements should get in line with what we used to have.

The next question comes from Jim Sullivan from BTIG.

Quick question on the, on how broad-based the productivity increase was. There was a comment made about border locations as well as the energy markets being especially positive. But I'm just curious, Stephen, if you can talk about how broad-based it was across the portfolio. Did you -- did most of the centers see a productivity increase? Or was it very much limited to the 2 examples that you cited in the prepared comments?

Yes, no, I mean, most of the centers were up, they weren't up to the same degree that the borders and energy markets, so that's why we singled those out. And we also saw improvement with a lot of categories that hadn't been doing as well in the last year or so. Retailers like Abercrombie have really turned it around and so that helps; Foot Locker and Finish Line had good results; and Bath & Body. So it's a combination of properties -- our Tier 1 was stronger than Tier 2 and 3, so that's another trend I would point to. But yes, I mean, it was broad-based, not every mall, but the majority of the malls did well, and that's why we're encouraged by it.

Okay. And then you had cited in the text of the release that your focus, strategic focus, is stabilizing revenues, and then diversifying the tenant mix as well, at the same time. Having said that, the sales strength you've seen this quarter, I guess, really began at some point in the fourth quarter, we had a really strong holiday season. And I wondered if you could share with us whether your traditional core tenant base is reacting positively to the sales strength, which has now been running for the better part of 2 quarters? And whether that's actually resulting in any increased appetite for space in the portfolio?

No, I mean, the core tenants primarily are what are driving our sales. The diversification is going to -- is taking time, and a lot of that is larger users, so they're not part of the sales that we report, but we're definitely seeing it. I mentioned La Senza, which is an L Brands concept, and then Bath & Body is doing well. Gap announced their Old Navy expansion this week, and Athleta is a division that they are doing sell, so they're investing in that. We've got a couple of new American Eagles that we're working with. So it's good to see that. So it's a combination of just less of a store closing mentality. And we talked about how first quarter 2017, you had Macy's and Penny and Sears closing a lot of stores, and we're not seeing that type of mentality this year. And there's still some headwinds that we are getting from a Teavana or a Best Buy Mobile announcement. But like Katie said, those are really well-located spaces, they're smaller, they are pretty good from a re-leasing point of view.

Okay. And then finally from me, if I can ask this question. The -- you've been working on reconfiguring space, big boxes, for a couple of years now. And I just wonder, in this period, are there any centers where you've done that and where you could conclude that there's real tangible evidence of improving productivity in the center, for the smaller shops, as a result of doing that?

I mean, we've seen that across the board. I mean, the best example is at CoolSprings, which is a couple of years ago, but we saw double-digit sales increases across the rest of the center. And it really does, whether it's a couple of them that we did, that allowed us to sell centers that we had on our disposition list, by filling bankruptcies. And that's the case with Janesville, where we placed JCPenney with Dick's and ULTA. So that got the buyer interested in the property and made them confident, even with the Bon-Ton closing, to proceed. So there's a lot of strategic reasons, in addition to the sales lift, the new types of uses, the diversification, that are behind these replacements.

Up next is Michael Mueller with JPMorgan.

Yes, I guess, Farzana, you talked about the reserve being in at maybe $10 million to $13 million based on what you see right now. Is that your best expectation as you look forward and think about everything that's playing out down the road? Do you think there's a high probability that you end up in that, that sort of lower end of that $10 million to $20 million range? Or do you think there's a decent chance that it just ratchets up as we kind of move from quarter-to-quarter?

Mike, yes, we make our best estimates at each quarter and give you what we feel we believe that the next few quarters will look like. So at this time, the $10 million to $13 million is a comfortable number that we believe that's how it will play out. But then it's a little bit early. Who knows of what else might pop up. So our expectation is that hopefully it will not, but we've given ourselves the room in order to withstand any other pressure that might come through for additional bankruptcies or additional co-tenancy-related issues that may come up.

Got it, okay. And then just a quick question on renewal spreads. I mean, can you generalize and say if we're looking at the renewals that were done in the quarter, what portion of them were positive, what portion of them were negative? I remember hearing something about, I think it was 25 leases -- or 28 leases accounted for something like 450 basis points of the negative spread. But just bigger picture, what's the positive-negative split?

I mean, we really can't provide that kind of granularity. I mean, it's -- so I can't even give you an estimate for that.

The next question will be from Linda Tsai with Barclays.

Maybe just a little more clarification from Jim Sullivan's earlier question. I realize the sales improvement was broad-based, but are you seeing more strength in Tier 1 malls because of retail -- broad-based retailer improvements? And then in Tier 2 and Tier 3, is that more from replacing underperforming retailers, since that's presumably where more tenants left?

I mean, it's really a combination. It's hard to isolate one factor. And some of them are market-specific; some of them are located in these areas, which have seen good growth. We've invested, CoolSprings and Fayette, we did the Sears redevelopment, so we're continuing to get a boost from them. Others are just markets that didn't have a great year in '17 that are seeing a nice rebound. So -- and it's -- yes, it's Tier 1, but I don't want to overplay that, because we are seeing good progress in Tier 2 as well. Tier 3 is the toughest category, but again, that was 10% of our NOI. And so the majority is Tier 2 and 1, and we're seeing good results there.

And then on average, what's the delta of sales productivity between the new tenants signing on versus the overall portfolio average?

It really depends on the use, Linda, whether it's a jewelry or accessory or service. So that's really a hard question to answer. And I will say one other thing, that the retailers have really gotten more focused on profitability, too. So sales is an important metric, but another encouraging sign is that the retailer profits have strengthened. It goes back to what Jim was saying, how it came out of a strong holiday in the fourth quarter and it's continued into this year. The tax cut has helped with that for sure. And so we're seeing more of a broad-based recovery in retail. And we're also seeing a lot of new types of uses. We're seeing retailers, e-tailers, online-only, that are looking at opening up physical locations, and we're talking to a number of them, and I know our peers are as well. And that's a real opportunity for us. And for those users, sales are really not even their primary metric. I mean, they're looking at number of email addresses and text -- phone numbers, and ways to communicate with their customers and the combination of online and physical. So sales are important, but it's not at all the only metric that is worth focusing on.

The next question is from Tayo Okusanya with Jefferies.

Yes, I just have 1 or 2 quick ones. Similar to CoolSprings Galleria, I mean, are there opportunities to kind of put mortgages on some of your other larger Tier 1, unencumbered Tier 1 assets, to kind of pay off mortgages of some of your upcoming mortgages? Or are you somewhat limited by maybe some of the covenants you have at this point?

Tayo, sure, to answer your question, the first question is, yes, we can put mortgages on our top-tier properties that we currently have them in an unencumbered pool. But it really benefits us to have a quality unencumbered pool, to continue to be supportive from the unsecured point of view on the debt side. Whether it's a bank group, whether it is our -- the bonds that's out there. So we think that having the flexibility for these assets to be in the unencumbered pool, particularly when it comes to redevelopment, it's extremely valuable to us. So the answer -- first answer is, yes, we can do it. But the second answer is, we are preserving the unencumbered pool to continue to work through our liquidity. And I think that as time goes on, it will play out once we have our bank recast done and our term loans done, and continue to use that unencumbered pool to benefit our long-term debt strategy.

Okay. So just, what's the best way to kind of think about, again, some of your mortgage debt coming due in 2019? Is the goal there really you're just going to try to refi it? Is that kind of the ideal solution to that?

Yes, I would agree that, that is the ideal solution. And we are working through ahead '19, '20, any of the refinancings coming up. We have several different ways to deal with it, and we are planning it and working through the strategy and as we get near it, we'll hopefully share it with you and announce it.

Okay. That's helpful. And again, kind of ex Bon-Ton, ex Claire's, ex The Walking Company, just to get an idea, kind of look out, any other tenants that are kind of on your watch list when you kind of think about someone who will potentially have to restructure and how you kind of think about that relative to the provisioning that you've already put aside for troubled tenants?

Yes, I mean, Tayo, I would say that it's definitely a shorter list. I don't want to call out specifics, but it's pretty well documented from the different publications that track that type of thing, which retailers are on the watch list. But it is shorter. We cleared out a lot last year from the watch list. And also given the time of year we're in, we feel like we've gotten through the worst. We don't think this is going to be another '17, where we're going to see kind of an ongoing stream of Chapter 11s throughout the year. And so we're definitely feeling better at this point this year.

And for the last question today, we'll go to George Rieger with Greenwich Investment Management.

Farzana, I think you mentioned that you're all-in debt currently is $4.7 billion, is that correct?

Yes, our pro rata share of our debt is $4.7 billion.

And what is the equity, the dollar value of the equity, however you define it, that supports that $4.7 billion?

Well, it depends what you want that to be, whether it's the stock price or the book value. Certainly, book value is a lot greater than the stock price.

Yes, so I want to know what you carry on your balance sheet. The stock price is like dew in the morning sun, rapidly disappearing.

Excuse me, if you have questions, George, on the earnings or the announcement, we're happy to answer them. If you want to have a conversation with Farzana offline about some of this stuff, then that's fine as well. But I'd appreciate it if you could limit your questions to one on the earnings statement.

Yes, well, Stephen, what I'm asking is, what is the book value of the equity that is currently supporting the $4.7 billion figure that Farzana gave us?

George, I think I'll be able to answer your question on a book value basis. If you look at our balance sheet, our -- you have to add back the depreciation in order to come up with the true book value of our company. And let me see, I'll get to the balance sheet in just a second and I'll give you the number. So if you look at our balance sheet, it's -- we have $5.7 billion of assets. So you should add back the depreciation, which is another $2.5 billion, in order to get your gross assets, because actually, what it is, depreciation is obviously more for GAAP purposes. And on the other side of the equation, it could be for the tax purposes. So that's the book value.

Okay. So anyway, that concludes our call today, and we appreciate everyone's time and questions, and as always, we're available at any time with follow-up questions. And we're looking forward to seeing how this year plays out and showing you continued progress here at CBL. Thank you.

And thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.