Prompt:
Human: Melinda will open and close the call, and Bob will speak to segment performance and the financials midway through.
We'll then open the call to questions.
Although we believe these statements to be reasonable, our actual results could differ materially.
The most significant risk factors that could affect our future results are described in our annual report on 10-K -- on Form 10-K.
We encourage you to review those risk factors as well as other key information detailed in our SEC filings.
With that, I'll now turn over the call to Melinda Whittington, La-Z-Boy's President and Chief Executive Officer.
Across the La-Z-Boy enterprise, we delivered all-time record high sales of $525 million, making and selling more furniture in the quarter than we ever have in modern history, even with production running only 12 weeks in the quarter, due to our annual one week maintenance shutdown in July, versus 13 weeks in most quarters.
Demand across all businesses also remained high and backlog remains at record levels.
Written same-store sales for the La-Z-Boy Furniture Galleries network increased 10% versus the prior year quarter, and has grown at a compounded annual growth rate of 13% across the last two years since pre-pandemic, demonstrating the continued strength of demand for our La-Z-Boy branded products.
Written same-store sales for our Company-owned Retail segment increased 22% versus the prior year period, and at a compounded annual growth rate of 16% over the last two years.
And Joybird continued on its strong growth journey writing 31% more business than in last year's first quarter and growing at a compounded annual growth rate of 35% across the last two years.
On the manufacturing front, we continued to increase capability to build and deliver more furniture to better service continued strong demand, and are in the process of increasing our cell count across the La-Z-Boy branded business.
And also during the quarter, we continued to return value to shareholders with a dividend payment and $36 million of share repurchases, and we've recently expanded our repurchase authorization.
At the same time, we are experiencing challenges in our wholesale business.
We continue to have inefficiencies at the plant level, as we open additional upholstery capacity and hire, train and work to retain what is currently about one-third more workers versus pre-pandemic.
And we are continuing to invest to increase flexible capacities due the remainder of this fiscal year in order to work through our backlog.
Also, as expected, we experienced significant short term margin compression on the wholesale business, primarily due to higher raw material and freight costs, which have risen at unprecedented rates and speed over an extended period.
As we've talked previously, we made the decision to not take action on the backlog with our first four rounds of price increases since the pandemic began.
With wait times extending up to seven months for the La-Z-Boy branded business, that has resulted in delayed recognition of those price increases until they work their way through to our delivered sales.
But looking to the future, during the quarter, we also made several strategic decisions to take us through this unprecedented period and ensure we emerge stronger, post pandemic.
Recognizing the commodity prices are expected to remain at the highest levels in recent history, in July, we took our fifth price increase since the pandemic began, but this time also took a surcharge on our backlog.
Given the unparalleled nature of rising material costs, we are asking our business partners to share in the financial impact during a period where we are all experiencing record demand.
Since our first price increase last October, cumulative price increases and surcharges, now add up to the high-teens versus pre-pandemic.
Second, on the practical side, our procurement team has significantly increased inventory for key component parts to minimize future supply disruptions and ensure a steady stream of furniture is manufactured and delivered.
Third, we launched Project Century [Phonetic], our long-term strategic path for strong growth and profitability as we head toward our centennial anniversary in 2027.
At a high level, key components include a focus on growing market share for our strong consumer brands, specifically La-Z-Boy and Joybird.
In an extremely fragmented industry, the iconic La-Z-Boy brand enjoys an unparalleled identity for comforting quality, while being a leader in motion.
We believe we can fully leverage these attributes to grow our business, and will invest to expand our reach to a broad range of consumers including younger consumers through consumer insights, product innovation, new experiences and messaging.
At the same time, we will continue to expand and strengthen our omnichannel presence.
We will offer a state-of-the-art e-commerce experience and a strong brick and mortar footprint to ensure we easily reach consumers wherever they prefer to shop.
And now that we have a sustainably profitable direct to consumer model with Joybird, we'll increase investment to expand consumer awareness and accelerate profitable growth.
At the same time, we'll enhance Joybird's omnichannel offering by opening additional small footprint brick and mortar stores in high traffic urban areas.
Our first three stores in Brooklyn, Chicago and Washington DC have met with great success, and there is exciting potential for additional stores, including one in Los Angeles planned to open in the fall.
As the final pillar of Project Century, we'll enhance our corporate capabilities and leverage the balance of the enterprise portfolio to efficiently support these initiatives and over time enable the potential for tack-on acquisitions that can benefit from our supply chain expertise and accelerate the La-Z-Boy Incorporated growth story.
With these initiatives in place, over time, we envision sales growth outpacing industry averages while delivering industry-leading margins as we complete our first century in 2027.
As a reminder, we present our results on both a GAAP and non-GAAP basis.
On a consolidated basis, fiscal '22 first quarter sales increased 84% to a record $525 million, reflecting strong demand, capacity increases, and a comparison to the fiscal '21 first quarter when we restarted our plants at reduced capacity after a month-long shutdown and most retailers were closed for a portion of the quarter due to COVID-19.
Sequentially, from fiscal '21 Q4, first quarter sales increased even with our annual one week maintenance shutdown in July.
Compared with the pre-pandemic fiscal '20 first quarter, sales increased 27% for a compounded annual growth rate of about 13%.
Consolidated GAAP operating income increased to $34 million and non-GAAP operating income increased to $35 million.
Consolidated GAAP operating margin was 6.5% and non-GAAP operating margin was 6.6% reflecting expected significant short-term pressure on wholesale margins as the realization of previously announced pricing actions trailed escalating input costs, and we continue to invest in capacity expansion.
GAAP diluted earnings per share was $0.54 for the fiscal 2022 first quarter versus $0.10 in the prior quarter.
Non-GAAP diluted earnings per share was $0.55 in the current year quarter versus $0.18 in last year's first quarter.
My comments from here will focus on our non-GAAP reporting unless specifically stated otherwise.
I will now turn to a result -- to a review of our results by segment.
Demand for product across all businesses remains robust.
Starting with our wholesale segment, delivered sales for the quarter grew 76% to $393 million compared with the prior year period, compared with the pre-pandemic fiscal '20 first quarter, sales were 23% higher for a compounded annual growth rate of 11%.
Non-GAAP operating margin for the wholesale segment was 4.7%, reflecting expected gross margin pressure as raw material and freight cost increases outpaced the realization of previously announced pricing actions and we continue to invest in bringing online new capacity.
Now let me turn to the retail segment, which produced excellent results.
For the quarter, delivered sales doubled, increasing 100% to our first quarter record of $182 million and delivered same-store sales increased 92% versus the year ago quarter, which was impacted by COVID.
Compared with the pre-pandemic fiscal '20, first quarter, sales increased 27% for a compounded annual growth rate of 13%, reflecting strong execution at the store level.
Non-GAAP operating margin increased to 11.2%, another first quarter record, driven primarily by fixed cost leverage on the higher delivered sales volume.
Last year's first quarter margin was negative 6.8% with the period marked by a significant reduction in delivered sales due to delays in product deliveries and COVID-related manufacturing shutdowns in April as well as retail closures, with some stores closures extending into June.
As Melinda noted, we are continuing to invest in the La-Z-Boy Furniture Gallery store system with new stores, remodels and relocations.
We have approximately 25 project scheduled this fiscal year for the Company-owned stores, out of a total of approximately 35 projects across the network.
Additionally, we are pleased to announce that earlier this week, we closed on the acquisition of three stores on Long Island, New York and look forward to expanding and strengthening the business there.
Sales for Joybird which was reported in corporate and other, increased 188% to $39 million, almost tripling from the prior year first quarter.
From the pre-pandemic fiscal '20 first quarter, delivered sales increased 125% for a compounded annual growth rate of about 50%, reflecting Joybird's strong positioning in the direct-to-consumer marketplace as well as excellent end-to-end execution by the team.
For the period, Joybird increased its gross margin primarily from higher sales volume, product pricing actions, and increase in average ticket, and synergies due to its integration into our broader supply chain.
It also experienced increased conversion on the website and a significant increase in retail store traffic.
We have achieved sustained, structural profitability at Joybird, and will continue to increase our marketing spend to expand awareness, improve customer acquisition and accelerate growth.
Pulling all this together, consolidated non-GAAP gross margin for the fiscal '22 first quarter decreased 270 basis points versus the prior year quarter, primarily driven by significant increases in commodity and freight costs, in addition to start-up costs associated with the expansion of our manufacturing capacity and labor challenges on our wholesale businesses.
These items were partially offset by changes in our consolidated sales mix driven by the faster growth of retail and Joybird which carry a higher gross margin than our wholesale businesses, and from an improved gross margin performance at Joybird.
Consolidated SG&A as a percentage of sales for the quarter decreased 620 basis points, primarily reflecting fixed cost leverage on the higher sales volume, mainly in our retail segment.
Our effective tax rate on a GAAP basis for the fiscal '22 first quarter was 25.9% versus 19.8% in the first quarter of fiscal 2021.
The increase in our effective tax rate for this year's first quarter versus last year's first quarter was primarily due to additional tax benefits from stock compensation in fiscal 2021 which did not occur in fiscal 2022.
Absent discrete adjustments, our effective tax rate would have been 25.3% and 26.1% in the first quarters of fiscal 2022 and 2021 respectively.
We expect our effective tax rate for the full fiscal 2022 year to be between 25.5% and 26.5%.
Turning to cash, we generated $6 million in cash from operating activities in the quarter.
We invested $39 million in higher inventory levels to protect against supply chain disruptions and support increased production in delivered sales.
Additionally, during the quarter, we made seasonal incentive compensation payments related to the last fiscal year.
We also spent $19 million in capital, primarily related to improvements to our retail stores, upgrades at our manufacturing and distribution facilities, new upholstery manufacturing capacity in Mexico, and technology upgrades.
We ended the period with $336 million in cash and no debt compared with $337 million in cash at the end of fiscal 2021 first quarter, which included $50 million in cash proactively drawn on our credit facility.
In addition, we held $33 million in investments to enhance returns on cash, compared with $16 million last year.
Regarding cash returned to shareholders, during the quarter we continued to aggressively buy back shares, spending $36 million repurchasing more than 900,000 shares of stock in the open market under our existing, authorized share repurchase program.
Over the past two quarters, we have returned $79 million to shareholders via share repurchase.
We also paid $7 million in dividends to shareholders in the last quarter.
Earlier this week, demonstrating its confidence in the Company's ability to grow profitably and continue to generate strong cash flow from operations, the Board of Directors approved an increase of 6.5 million shares to the Company's existing share repurchase authorization, with a 2.5 million shares available for repurchase under the program as of the end of the fiscal 2022 first quarter.
This increase brings the total share repurchase authorization to $9 million, representing approximately -- I'm sorry, 9 million shares, representing approximately 20% of shares outstanding.
This equates to approximately $320 million at Monday's closing stock price.
The Company expects to execute the repurchase program over a three year to four year period, subject to market conditions, operational performance, cash flow from operations, cash balances, potential M&A activity and other business investments.
Additionally, the Board approved a dividend of $0.15 per share to shareholders of record as of September 2nd, 2021.
As we look to the future, from a capital allocation perspective, over the long term, we will target to invest approximately half of operating cash flow back into the business primarily via capex and M&A, and return the remainder to shareholders via dividends and share repurchases.
Before turning the call back to Melinda, let me highlight several important items for the remainder of fiscal 2022.
As noted, demand trends remained strong across the business and remain significantly higher than pre-COVID levels.
With robust written order trends, our backlog remains at a record level setting us up for a strong year of shipments as we continue to increase production capacity sequentially each quarter.
We improved product mix capability and worked through our wholesale and retail backlogs.
While raw material and freight cost prices remain high and global supply chain disruptions continue, pricing actions taken to date including the recent surcharge on our backlog will begin to flow through our numbers in Q2.
As a result, we expect to finish the fiscal year with a consolidated full year non-GAAP operating margin at or near double digits, more consistent with our performance in the fiscal 2021 fourth quarter.
Finally, as we make investments in the business to strengthen the Company for the future, we expect capital expenditures to be in a range of $65 million to $75 million for fiscal 2022.
Spending will support updating our La-Z-Boy Furniture Gallery stores, updates to our plants and distribution facilities in Neosho, Missouri, new upholstery manufacturing in Mexico and investments in technology solutions across the organization.
We continue to operate in a very volatile environment with COVID uncertainties, high input costs, ongoing supply chain disruptions and continued strong demand curves.
Our team is doing an outstanding job of managing the competing priorities of our various stakeholders, including our customers, shareholders and employees.
We expect capacity expansion efforts will enable strong business growth as we move forward, and we are focused both on near-term tactics while designing our future for our 100th year and beyond.
I believe the best is yet to come for La-Z-Boy Incorporated.
We'll will begin the question-and-answer period now.
Terran, please review the instructions for getting into the queue to ask questions.
 Assistant:

Chosen response:
la-z-boy q1 adj earnings per share $0.55.
q1 non-gaap earnings per share $0.55.
qtrly written same-store sales in company-owned retail segment increased 22%.
q1 gaap earnings per share $0.54.
co's board of directors approved an increase of 6.5 million shares to its existing share repurchase authorization.
expects to execute repurchase program over a three-to-four-year period.


Prompt:
Human: regional and global economy, and the financial condition and results of operations of the company and its tenants.
Joining us today are Tom O'Hern, chief executive officer; Scott Kingsmore, senior executive vice president and chief financial officer; and Doug Healey, senior executive vice president, Leasing.
We had releasing spreads of 5% and occupancy at nearly 91%.
At the end of the third quarter, most of our town centers were open with only our three closed centers in Los Angeles remaining closed by government mandate.
Those centers reopened in early October.
So as of today, all of our centers are open and our tenants are eagerly planning for a busy holiday season.
Most of the results were better than the second quarter, but we were obviously adversely impacted in the quarter due to COVID in general and specifically due to the protracted California and New York City closures.
I'm very appreciative of the entire Macerich team that did a tremendous job of getting our centers reopened safely in some cases for a second time.
Some of the self-health and safety measures we took went way beyond CDC recommendations that included significantly upgrading our air filtration systems to include hospital quality air filtration with [Inaudible] filters; engage the clinical head of Infectious Disease at UCLA Medical Center to review and advise us on our protocols and policies.
We hired a nationally renown engineering firm to advise us on advanced HVAC systems and protocols.
We implemented modified hours, increased cleaning and sanitizing protocols, CDC guidelines, and approved products that are baseline for our services.
In terms of rent collections, we are much better off in the third quarter compared to the second quarter.
During the third quarter, our average rent collections were 80%.
October is trending above 80%.
For most of the tenants not paying rent during the closure period, we would generally come to terms with them.
In general, we agreed to rent relief usually in the form of deferred rent for the closure months with repayment in 2021.
In many cases, in exchange for landlord-favorable amendments to leases.
There were some large reserves for uncollectible rents in the quarter, which Scott will comment on.
Cash flow continues to improve by the month as we move into the fourth quarter, and I expect that to continue.
As of today, we have significant liquidity and currently have approximately $675 million of cash on the balance sheet.
The tenant reactions to reopening has been good.
Our tenants, almost without exception, were eager to get reopened.
By October, for centers opened at least eight weeks, sales were up to 90% of pre-COVID levels.
The consumer is shopping with a purpose and there has been pent-up demand.
Our second quarter was more about getting centers opened and getting our tenants open safely and less about leasing.
The focus in the third quarter was collecting past due rents and started to shift back to leasing.
Looking at traffic, in general, it's running about 80% compared to a year ago.
Some of that has to do with capacity limits, particularly for restaurants and also for having no seating in the food court.
Sales, on the other hand, are running on average 90% of a year ago, which means there, I'd say, higher capture rate.
This year will be a different holiday season.
We believe it's going to start earlier.
Operating hours will be shorter.
There will be capacity limits.
With consumers not spending money on vacations and entertainment during COVID, most of our consumers in our markets have money to spend this holiday season.
Top categories are expected to be fitness and wellness, home furnishings, electronics and athletic leisure.
There will be [Inaudible] but with lots of social distancing.
We've got a number of questions about potential for property tax increases in California, although small in the political scheme of things.
There was a proposition in California that would have increased property taxes on commercial property.
It is known as Proposition 15.
That proposition would have removed the protection of Prop 13 from commercial properties in California.
For us, generally, we structure our leases to pass-through taxes to the tenant as a recoverable expense with a significant bottom line impact that the [Inaudible] shows Prop 15 passing.
As of today, it is trailing.
The yes votes stand at 48.7%, the no are at 51.3%.
So hopefully, that means no increase for commercial taxes in California.
Looking at the balance of 2020.
The pandemic has shown that good retail is not going away, especially in A quality centers.
Digitally native brands appreciate, more than ever, the profitability of their physical stores.
Big format retailers got active again in the third quarter, and you'll hear some of the specifics from Doug.
Although we are still in the midst of COVID, our centers are operating at 90% capacity, sales levels of 90% pre-COVID.
And even if you look at one of the more challenging categories, restaurants, in our portfolio, we have 247 restaurants and 94% of those are open today.
The second quarter was an extremely unique quarter and some of the second quarter challenges carried into the third quarter and may even carry partially into the fourth quarter.
But many metrics got better in the third quarter, specifically collections.
And the number of tenants opened and the progress we are making on leasing activity.
The impact on reserves for adoption accounts was less than 20 — second quarter of '20, but still much higher than normal.
We expect to gradually improve to a more normal level in the first quarter of '21.
Although there are still too many uncertainties to give guidance, we expect the fourth quarter of 2020 and the year 2021 to be much better than the second and third quarters of 2020.
Disruption from COVID-19 continued to severely impact 2020 results in the third quarter.
Funds from operations for the third quarter was $0.52 per share, down from the third quarter of 2019 at $0.88 per share.
Same-center net operating income for the quarter was down 29%, and year to date, it was down 17%.
Changes between the third quarter of 2020 versus the third quarter of 2019 were driven primarily by the following factors and the numbers I'm going to cover [Inaudible] for the company: One, $20 million — $21 million in bad debt allowance in the form of the $14 million of increased net debt expense versus the third quarter of 2019, coupled with $7 million of lease revenue reverse for tenants, that are accounted for on a cash basis per GAAP within the third quarter; two, over $20 million of short-term nonrecurring rental assistance; three, a $9 million decline in common area and ancillary revenue as well as percentage rents; four, a $4 million decline in parking income driven by protracted property closures and reduced parking utilization at our urban centers in New York City and Chicago primarily; five, interest expense increased $4 million due to a decline in capitalized interest; six, net operating income declined from the Hyatt Regency Hotel [Inaudible], it was about a $2 million decline; seven, a negative $0.03 per share dilutive impact from shares issued in the second quarter relating to our stock dividend issued in the second quarter.
These factors were all offset by increased lease termination income of $7 million and land sale gains totaling $11 million net impact.
Revenue declines from occupancy loss also contributed to declines in both net operating income and FFO for the third quarter.
As Tom mentioned, we are not providing updated 2020 earnings guidance given continued uncertainties.
We do anticipate continued volatility operating results in the fourth quarter.
While we're not providing guidance for 2021, as we mentioned last quarter, we still believe that 2020 will be a trough in the company's operating results including primarily to the following factors: The pandemic has effectively accelerated the financial troubles with numerous [Inaudible], resulting in a wave of bankruptcy filings that were funneled and due 2020.
We do not anticipate this volume to recur in 2021.
The majority of the filings have resulted in reorgs and not full fleet liquidations.
We do expect approximately a 3% cumulative drop in occupancy from lease rejections, approximately half of which is already embedded within the 90.8% reported occupancy [Inaudible] third quarter, and the balance of these stores will close within the fourth quarter.
Year to date, we have reported $57 million in additional bad debt reserves versus 2019, including $50 million of bad debt expenses and $7 million of lease revenue reversals for tenants accounted for on a cash basis.
Similar levels of reserves are certainly not anticipated going forward.
We've recorded well over $20 million in nonrecurring short-term rental assistance year to date and we expect those to continue into the fourth quarter of 2020.
And then lastly, we anticipate increases to transit revenue line item going forward into 2021, namely the percentage rent, temporary tenant income, parking garage revenue, advertising, sponsorship, vending and other ancillary property driven revenue.
We look forward to providing 2021 guidance on our typical cadence this time next quarter.
Given the continued improvement in rent collections of 80% in the third quarter and over 80% in October, liquidity continues to improve.
Cash on hand has increased from $573 million at June 30 to $630 million at September 30.
And as Tom noted, liquidity continues to improve to this day.
This improved liquidity is solely due to improved operating cash flow and is a testament to the herculean efforts by our people to both secure the right to open all of our properties and to negotiate thousands of agreements with our retailers.
With continued progress in these negotiations, which Doug will soon elaborate upon, we anticipate further improvement to operating cash flow throughout the year.
We are closing on a 10-year $95 million financing on Tysons Vita, the residential tower at Tysons Corner.
The loan will have a fixed rate of 3.3% and will include interest-only payment during the entire loan term.
This will provide approximately $47 million of liquidity to the company, and we expect the loan closing to occur within the next several weeks.
We secured a short-term extension on Danbury Fair through April 1, 2021.
The loan amount and interest rate remain unchanged following that extension.
We have agreed to terms with the loan servicer for a three-year extension on Fashion Outlets of Niagara, which will extend the loan maturity through October of 2023.
We expect the loan amount and interest rate also to be unchanged following that extension.
And then lastly, we continue to work with our lenders to secure loan extensions for the nonrecourse mortgages on each of FlatIron Crossing, Green Acres Mall and the power center adjacent to that Green Acres Commons, and we anticipate securing extended term within the coming weeks.
Like the second quarter, the majority of our efforts in the third quarter involved getting our retail partners open as quickly and as safely as possible once our centers were allowed to reopen.
To date, all of our properties are open, and I'm happy to report that 93% of the square footage that was opened pre-COVID is now open today.
As I discussed on our last call, it has been the case in the third quarter, much of our time and energy was spent working with those retailers that did not have the ability to pay rent while closed.
And we've made great progress.
In fact, as we look at our top 200 rent paying retailers, we've either received full rent payment or secured executed documents with 147 and are in LOI with another 23, all of which totals approximately 93% of the total rent these top 200 pay.
Consequently, collections continue to improve.
Third quarter saw an average collection rate of 80%, that's compared to 61% in the second quarter.
And as of today, as Tom mentioned, our collection rate for October stands at about 81%.
But the third quarter wasn't all about collection.
As our centers continue to open and as our retailers opened and were able to trade with some consistency, the leasing climate began to improve.
Retailers began executing leases that have been out since before COVID.
But most importantly, the retailers began committing to new deals again.
A true sign that for the first time in months, we're now looking forward rather than solely focusing on the past.
I'll expand on this in a moment, but first, let's take a look at some of the third-quarter metrics.
Portfolio-related sales for the third quarter were $718 per square foot, and that's computed to exclude the period of COVID closures for each tenant.
The $718 is down from $800 per square foot at the end of the third-quarter 2019.
For centers opened the entire month, sales in September were actually 92% of what they were a year ago, once we exclude Apple and Tesla.
Occupancy at the end of the third quarter was 90.8%.
That's down 50 basis points from last quarter and down 3% from a year ago.
This is primarily due to store closures for bankruptcies and from our local tenants that couldn't survive the pandemic.
Temporary occupancy was 5.7%, that's down 70 basis points from this time last year.
Trailing 12-month leasing spreads were 4.9%, that's down from 5.1% last quarter and down from 8.3% in Q3 2019.
Average rent for the portfolio was $62.29, down from $62.48 last quarter, but up 1.8% from $61.16 one year ago.
As I mentioned earlier, the leasing environment continues to improve.
In the third quarter, we signed 120 leases to 342,000 square feet.
This is over 3x the number of deals and square footage that was signed in the second quarter, and these stats do not include any COVID workouts.
Some leases signed in the third quarter of note include Gucci, Fashion Outlets of Chicago, Ducati Paris at Scottsdale Fashion Square; Kids Empire and State 48 Brewery at SanTan; Barbarie's Grill at Danbury Fair; Starbucks at Fashion District Philadelphia; Madison Reed at 29th Street; Polestar at The Village at Corte Madera; finally, Lucid Motors at Scottsdale Fashion Square and Tysons Corner.
Both Lucid and Polestar are new additions to the electronic car category and first to the Macerich portfolio.
As we head toward the end of the year, much of our focus is on our 2021 lease expiration and finalizing deals in order to secure as much expiring square footage in 2021 as possible.
At this point in time, by virtue of COVID workouts and through the normal course of leasing, we have commitments on 26% of our 2021 expiring square footage with another 67% in the LOI stage.
This brings our total leasing activity on 2021 expiring square footage to just over 90%.
Turning to openings in the third quarter.
We opened 44 new tenants and 276,000 square feet, resulting in total annual rent of $11.3 million.
This represents 65% of the openings we had at the same quarter last year, but with 15% more square footage and virtually the same total annual rent.
Given the conditions our industry has faced over the last several months, I think this speaks volumes to the strength of the leasing pipeline we had pre-pandemic.
Notable openings include adidas and Tory Burch at Fashion Outlets of Niagara Falls; Aerie at Vintage Faire; West Elm at La Encantada; and Golden Goose, Capital One Cafe and a new Levi's store at Scottsdale Fashion Square.
In the large-spread — in the large-format category, we opened Dick's Sporting Goods at Deptford Mall, in a portion of a former Sears store; Saratoga Hospital at Wilton Mall, also in a former Sears store; a new and spectacular looking restoration hardware gallery at The Village at Corte Madera.
And all of this was in the third quarter.
In October, we finished the repurposing of Sears at Deptford with the opening of Round One.
And also in October, we remained active with Dick's Sporting Goods, opening them at Vintage Faire in a portion of Sears, and at Danbury Fair in the former Forever 21 box.
The digitally made of and emerging brands continue to expand their omnichannel presence by opening stores.
And the third quarter was no exception.
We opened Amazon 4-Star and Indochino at Scottsdale; two Warby Parker stores at Scottsdale and 29th Street, along with Amazon Books and Tempur-Pedic at FlatIron Crossing.
And our pipeline remains strong.
At this point, we have signed leases with 190 retailers scheduled to open throughout the remainder of 2020 and into 2021.
This totals 1.7 million square feet for a total annual rent of $63 million.
And since the pandemic, only nine of these retailers with signed commitments have informed us that they won't be reopening — they won't be opening.
Total impact of this is only 60,000 square feet of the 1.7 million square feet and only $3 million of the $63 million in total rent.
Lastly, I want to address the issue of traffic.
There's been a ton of focus on traffic and the fact traffic is down compared with last year, and it is.
There's no arguing that.
However, I struggle with the notion that traffic seems to be perceived as the sole means to a retailer's success.
Why aren't we talking more about conversion or sales or the combination of both?
Despite less traffic, the Macerich portfolio is seeing tremendous success in the reopening of stores that were forced to close due to COVID, like Primark at Danbury, being the No.
1 store in its region since reopening; or like Bath & Body Works at Freehold, beating last year's sales three months in a row with capacity limited to 50%; or HomeGoods at Atlas Park, outperforming last year by 15% while also at 50% capacity; or Burlington, reopening at Kings Plaza and selling through inventory that took a month to replace; or Sephora at Broadway Plaza, is currently ranked as one of the top stores in the company by virtue of conversion rates that are 20% to 30% higher than last year; or Round One at Deptford and Valley River, operating at full capacity with hour-long waits at night and on weekend; luxury retailers at Scottsdale Fashion Square such as Gucci, Louis Vuitton and Golden Goose, all exceeding planned by 25% to 40%; or North Italia, a restaurant at La Encantada, back to pre-COVID sales even at 50% occupancy; and Tillys at Arrowhead, reported double-digit sales increases since reopening in May and is expecting their best holiday season ever at this location.
And the list goes on and on.
Unfortunately, these success stories are too often overshadowed by the overwhelming focus on the effect this pandemic has had on traffic in the short-term and pre-vaccine.
Make no mistake, traffic is important.
There's no denying that.
However, I do think it's time we stop thinking so one dimensionally and focus on other metrics in addition to simply traffic.
And when we do, I think we'll all find that we are in a much better place than many think.
 Assistant:

Chosen response:
macerich q3 ffo per share $0.52 excluding items.
q3 ffo per share $0.52 excluding items.
mall portfolio occupancy, including closed centers, was 90.8% at september 30, 2020, compared to 91.3% at june 30, 2020.


Prompt:
Human: I will start by going through some of the highlights of the quarter, and Jack will go through the second quarter results and guidance for the third quarter.
I will then share some concluding thoughts before we start our Q&A session.
But before we proceed, Jack will now cover the safe harbor language.
These statements are based on management's current expectations or beliefs.
Halfway through 2021, I am increasingly optimistic about the strength of the global recovery.
As vaccine rollouts gain momentum and lockdown restrictions ease, we're seeing dramatic increases in hiring optimism.
The pace of the recovery is strong, with the hiring intent picking up much faster than after the previous economic downturn.
And although the recent infection increases are concerning, we do not believe they will materially impact the positive recovery trajectory.
I spent a considerable amount of time during the second quarter in Europe with our market leaders, teams and clients.
This included time with our French team at Viva Tech, one of the world's largest technology conferences in Paris, which I will talk about later as part of our innovation update.
And together with other global leaders, I also spent time with President Macron and his government at the Choose France event.
I believe that the future for France looks bright as the government continues on its path to make France more competitive, and our business is very well positioned to benefit as their economy grows.
It is clear from my discussions with clients that demand is coming back very strongly for our services across all of our brands.
This is evidenced in temporary and permanent placement activity as well as demand for workforce solutions.
Companies increasingly need our help in finding and reskilling talent to enable them to leverage the fast-improving economic recovery and accelerate the digital transformation to emerge stronger post-pandemic.
Turning to our financial results.
In the second quarter, revenue was $5.3 billion, up 31% year-over-year in constant currency.
We grew revenue significantly in our key markets, and this resulted in better-than-expected financial performance.
Our operating profit for the quarter was $170 million, Operating profit was up significantly as we anniversary the depth of the pandemic's financial impact.
Operating profit margin was 3.2%.
And after excluding special charges in the prior year, operating profit margin increased 260 basis points.
Earnings per diluted share was $2.02.
Our most recent talent shortage survey of 42,000 employers in 43 countries found that 69% of employers globally, a 15-year high, are reporting difficulties hiring skilled workers across many industries.
Although vaccinations are more widespread, workers are still dealing with issues created by the pandemic, such as healthcare and child care concerns.
Unemployment benefits and related programs are also having a lingering effect on worker supply.
We expect the pandemic-related talent shortages to ease over the coming quarters.
But over the medium- to- long-term, the impact of digitization and other structured labor market changes are here to stay.
This means hiring of skilled talent and supporting people to reskill and upskill for growth roles will be a driver of demand into the foreseeable future.
It is a workers market right now.
And as a result, we're also beginning to see employers respond to what workers want: wage increases in places, more flexibility, skills development and a clear commitment to ESG, especially clarity around an organization, social and climate impact.
Revenues in the second quarter came in at the high end of our constant currency guidance range.
Gross profit margin came in well above our guidance range.
Operating profit was $170 million, representing a significant increase from the prior year period, which was heavily impacted by the pandemic.
Operating profit margin was 3.2%, which was 80 basis points above the midpoint of our guidance.
Breaking our revenue trend down into a bit more detail, after adjusting for the positive impact of currency of about 10%, our constant currency revenue increased 31%.
As the impact of net dispositions and slightly more billing days was very minor, the organic days-adjusted revenue increase was also 31%.
Comparing to pre-pandemic revenues, our second quarter revenues were below 2019 levels by 4% on an organic days-adjusted constant currency basis, representing a 1.5% improvement from the first quarter trend on the same basis.
Turning to earnings per share bridge on Slide 4.
Earnings per share was $2.02, which significantly exceeded our guidance range.
Marking from our guidance midpoint, our results included improved operational performance of $0.55, slightly higher than expected foreign currency exchange rates, which had a positive impact of $0.03, and slightly better than expected effective tax rate that added $0.02, and favorable other expenses which added $0.02.
Looking at our gross profit margin in detail.
Our gross margin came in at 16.3%.
Staffing margin contributed 60 basis point increase, which included 20 basis points related to direct cost accrual adjustments in France, representing a 40 basis points underlying improvement in staffing margin.
Permanent recruitment contributed 50 basis point GP margin improvement as hiring activity was strong across our largest markets.
Our Experis Managed Services business in Europe contributed 10 basis point margin improvement.
These increases were partially offset by other business mix factors, primarily involving a lower mix of Right Management career transition business.
Next, let's review our gross profit by business line.
During the quarter, the Manpower brand comprised 64% of gross profit.
Our Experis Professional business comprised 21% and Talent Solutions comprised 15%.
During the quarter, our Manpower brand reported an organic constant currency gross profit year-over-year growth of 51%.
Our Manpower business experienced the biggest decline a year ago, and as a result, experienced the biggest increase this period in the recovery.
Compared to pre-pandemic levels, this represented a decrease of 4% from the second quarter of 2019 on an organic constant currency basis.
Gross profit in our Experis brand increased 23% year-over-year during the quarter on an organic constant currency basis.
This represented a decrease of 1% from the second quarter of 2019 on an organic constant currency basis.
Talent Solutions includes our global market-leading RPO, MSP and Right Management offerings.
Organic gross profit increased 27% in constant currency year-over-year.
This represented an increase of 12% from the second quarter of 2019 on an organic constant currency basis.
Our RPO business posted double-digit GP growth during the quarter on significant growth and hiring activity.
Our MSP business, which has performed well for several quarters, continued to experience double-digit growth in gross profit in the quarter.
Our Right Management business continues to see a runoff in outplacement activity as the recovery strengthens and experienced a reduction in gross profit of about 9% year-over-year.
Our SG&A expense in the quarter was $690 million and represented a 10% increase on a reported basis from the prior year.
Excluding goodwill and other impairment charges in the prior year, SG&A was 17% higher on a constant currency basis.
This compares to an increase in gross profit of 40% in constant currency and reflects balanced investment, allowing for strong gross profit flow-through during the quarter.
Operational costs increased by $96 million and net dispositions represented $1 million reduction.
Currency changes reflected an increase of $42 million.
SG&A expenses as a percentage of revenue represented 13.1% in the second quarter, representing ongoing improvement in our efficiency as revenue recovers.
The Americas segment comprised 20% of consolidated revenue.
Revenue in the quarter was $1 billion, an increase of 23% in constant currency.
OUP was $56 million.
Excluding impairment costs in the prior year, OUP increased 116% in constant currency and OUP margin increased 230 basis points to 5.4%.
The U.S. is the largest country in the Americas segment, comprising 60% of segment revenues.
Revenue in the U.S. was $629 million, representing 22% increase compared to the prior year.
Adjusting for franchise acquisition in days, this represented a 21% increase.
Excluding impairment charges in the prior year, OUP for our U.S. business increased 149% year-over-year to $38 million in the quarter.
OUP margin was 6%.
Within the U.S., the Manpower brand comprised 35% of gross profit during the quarter.
Revenue for the Manpower brand in the U.S. increased 36% during the quarter.
While the U.S. Manpower business continues to recover, we have noted softness in candidate supply during the second quarter and expect this to continue during the summer months.
The Experis brand in the U.S. comprised 32% of gross profit in the quarter.
Within Experis in the U.S., IT skills comprise approximately 80% of revenues.
Experis U.S. revenues grew 5% during the quarter.
We are encouraged by the current trends in our U.S. Experis business and anticipate continued improvement into the third quarter.
Talent Solutions in the U.S. contributed 33% of gross profit and experienced revenue growth of 14% in the quarter.
This was driven by RPO, which experienced dramatic revenue growth as hiring programs continued to strengthen.
MSP business continued to perform well and experienced double-digit revenue growth in the quarter.
In the third quarter, we expect ongoing underlying improvement in revenue growth for the U.S. in the range of 11% to 15% year-over-year.
Comparing estimated third quarter revenues to precrisis levels in constant currency, this represented a 2% decline compared to 2019 levels in the third quarter using the midpoint of our guidance.
Our Mexico operation experienced revenue growth of 6% in constant currency in the quarter.
On April 23, the Mexican government passed labor legislation that will prohibit certain types of temporary staffing not considered specialized services beginning on July 23.
As such, companies operating in Mexico will be prohibited from using temporary staffing for functions that are already deemed to be in-house core competencies of their workforce.
We have been working with our clients as the market absorbs this legislation and anticipate that we will have a reduction in revenues in our Mexico business beginning in the third quarter as clients navigate through the legislation and shift their workforce strategies accordingly.
Although this will result in revenue reductions over the next few quarters, we believe the mix shift toward more specialized staffing will improve the margin profile of our Mexican business.
We also believe there may be additional revenue opportunities over time as clients adjust their workforce strategies.
Although it is difficult to forecast based on how quickly the legislation is being enacted, we are currently estimating a revenue decrease for the Mexican business in the third quarter in the range of minus 28% to minus 32% in constant currency.
Mexico represented 2.8% of our 2020 revenues.
Revenue in Canada increased 22% in days-adjusted constant currency during the quarter.
Revenue in the other countries within Americas increased 40% in constant currency.
This was driven by significant constant currency revenue growth in Argentina, Colombia, Peru and Chile.
Southern Europe revenue comprised 46% of consolidated revenue in the quarter.
Revenue in Southern Europe came in at $2.4 billion, growing 51% in constant currency.
This reflects ongoing improvement driven by France and Italy.
OUP equaled $115 million and OUP margin was 4.8%.
France revenue comprised 56% of the Southern Europe segment in the quarter and increased 67% in days-adjusted constant currency.
Compared to the same period in 2019, France revenues were down 12%.
Although restrictions had an impact on the rate of revenue improvement during the quarter, the French business continued to perform well in a challenging environment, and we expect ongoing improvement now that the majority of the restrictions have been lifted.
OUP was $66 million in the quarter and OUP margin was 4.9%.
As previously referenced, direct cost accrual adjustments, representing approximately $10 million, benefited France's results.
As we begin the third quarter, we are estimating a year-over-year constant currency increase in revenues for France in the range of 12% to 16%.
Comparing estimated third quarter revenues to precrisis levels in constant currency, this represents a 5% decline compared to 2019 levels in the third quarter using the midpoint of our guidance.
Revenue in Italy equaled $469 million in the quarter, reflecting an increase of 57% in days-adjusted constant currency.
Through the second quarter, revenues in Italy continued to exceed 2019 levels.
OUP equaled $32 million and OUP margin was 6.8%.
We estimate that Italy will continue to perform very well in the third quarter with year-over-year constant currency revenue growth in the range of 20% to 24%.
Revenue in Spain increased 12% in days-adjusted constant currency from the prior year, and revenue in Switzerland increased 33% in days-adjusted constant currency.
Our Northern Europe segment comprised 22% of consolidated revenue in the quarter.
Revenue increased 23% in constant currency to $1.2 billion, driven by all major markets.
OUP represented $18 million and OUP margin was 1.5%.
Our largest market in the Northern Europe segment is the U.K., which represented 37% of segment revenues in the quarter.
During the quarter, U.K. revenues grew 30% in days-adjusted constant currency, which included significant new business.
The U.K. continued to perform above 2019 levels in the second quarter.
We expect continued strong growth in the 34% to 38% constant currency range year-over-year in the third quarter.
In Germany, revenues increased 9% in days-adjusted constant currency in the second quarter.
Although Germany continues to be a difficult market for our industry, we expect to see ongoing revenue improvement in Germany in the third quarter.
In the Nordics, revenues grew 17% in days-adjusted constant currency.
Revenue in the Netherlands increased 9% in days-adjusted constant currency.
Belgium experienced days-adjusted revenue growth of 24% in constant currency during the quarter.
Revenue in other markets in Northern Europe grew 41% in constant currency in the quarter.
This was driven by strong revenue growth in Poland, Russia and Ireland.
The Asia Pacific Middle East segment comprises 12% of total company revenue.
In the quarter, revenue grew 6% in constant currency to $620 million.
OUP was $22 million and OUP margin was 3.6%.
Revenue in Japan grew 10% in days-adjusted constant currency, which represents an improvement from the 6% growth rate in the first quarter.
Our Japan business continues to lead the market in revenue growth, and we expect ongoing mid- to high single-digit revenue growth in the third quarter.
Revenues in Australia were down 11% in days-adjusted constant currency.
Revenue in other markets in Asia Pacific Middle East grew 9% in constant currency.
I'll now turn to cash flow and balance sheet.
During the first six months of the year, free cash flow equaled $171 million compared to $577 million in the prior year quarter, reflecting significant accounts receivable declines in the prior year period.
At quarter-end, days sales outstanding decreased year-over-year by almost two days to 56 days.
Capital expenditures represented $12 million during the quarter.
During the second quarter, we purchased 432,000 shares of stock for $50 million.
Our year-to-date purchases stand at 1.5 million shares of stock for $150 million.
As of June 30, we have 1.9 million shares remaining for repurchase under the 6 million share program approved in August of 2019.
Our balance sheet was strong at quarter-end with cash of $1.46 billion and total debt of $1.09 billion, resulting in a net cash position of $368 million.
Our debt ratios at quarter-end reflect total gross debt to trailing 12 months adjusted EBITDA of 1.79 and total debt to total capitalization at 31%.
Our debt and credit facilities did not change in the quarter.
In addition, our revolving credit facility for $600 million remained unused.
Next, I'll review our outlook for the third quarter of 2021.
Our guidance continues to assume no material additional lockdowns or business restrictions impacting our clients in any of our largest markets beyond those that exist today.
On that basis, we are forecasting earnings per share for the third quarter to be in the range of $1.86 to $1.94, which includes a favorable impact from foreign currency of $0.04 per share.
Our constant currency revenue guidance growth range is between 12% and 16%.
The midpoint of our constant currency guidance is 14%.
A minor decrease in billing days in the third quarter and the slight impact of net dispositions impact the growth rate slightly, resulting in an outlook for organic days adjusted revenue growth of 15% at the midpoint.
Adding the context of comparisons to precrisis activity levels, this would represent a third quarter organic constant currency range of 1% to 3% compared to 2019 revenues.
We expect our operating profit margin during the third quarter to be up 50 basis points at the midpoint compared to the prior year.
This reflects another quarter of continued strong sequential underlying improvement.
We estimate the effective tax rate in the third quarter will be 33%.
Based on our improved earnings mix, we are now estimating the full year effective tax rate will approximate 33%, a 1% improvement from our previous estimate of 34% provided last quarter.
As usual, our guidance does not incorporate restructuring charges or additional share repurchases, and we estimate our weighted average shares will be 55.2 million.
We continued to invest in technology and are making great progress on our acceleration plans to diversify, digitize and innovate.
We've been recognized again for our award-winning RPO business within our Talent Solutions brand, scoring highly for our strong tech ecosystem, our consulting capabilities, data-driven solutions and business intelligence.
This is the 11th year we have been named a global leader in RPO in the Everest Group PEAK Matrix Assessment.
We've also just been named MSP leader for the eighth consecutive year by Everest, recognizing us at the top in market impact.
They also recognized our global leadership and tech as well as our workforce strategies, data-driven approach and scope of solutions, including Right Management and our consulting capabilities.
I congratulate our Talent Solutions colleagues for our leadership in the RPO and MSP space, which is an important component of our diversification strategy to grow higher-margin value business.
We continue to rapidly execute our technology and web transformation.
Our power suite tech stack is helping us to grow our competitive advantage as we shift to cloud platforms, improving our customer experience while streamlining our candidate management.
Our approach ensures we're always current, able to plug in with the best tech and the capability to scale while turning our data into a key asset.
We continue to move at speed.
19 market deployments have been completed and another 16 are in flight.
We look forward to providing a further update on this at year-end.
We're also making great progress in innovation.
In June, we joined the biggest names in tech at the World Famous Viva Technology Conference in Paris.
As the conference is only HR partners since its launch five years ago, this is a great opportunity for us to showcase our newest innovation and work with more than 30 HR start-ups on how we're using AI, machine learning and data-driven predictive performance tools, together with our human expertise to upskill people at speed and scale and match people to jobs with better accuracy and speed than either humans or machines could do on their own, building a better, brighter future of work across bold, disruptive ideas and collaboration across business, government and education.
This is how we will create sustainable skills, resilient communities and greater prosperity for all.
I'd now like to open the call for Q&A.
 Assistant:

Chosen response:
manpowergroup sees q3 total revenue up 14% to 18%.
manpowergroup in - sees q3 total revenue up 14%-18% - presentation.
manpowergroup inc - sees q3 americas revenue up 9%-13% - presentation.
manpowergroup inc - sees q3 northern europe revenue up 28%-32% - presentation.
compname reports q2 earnings per share $2.02.
sees q3 earnings per share $1.86 to $1.94.
q2 earnings per share $2.02.
q2 revenue $5.3 billion versus refinitiv ibes estimate of $5.14 billion.
financial results in quarter were impacted by weaker u.s. dollar relative to foreign currencies compared to prior year period.


Prompt:
Human: After the market closed yesterday, we issued and posted several items on our websites, including our financial results, 10-K, quarterly operating supplements, and statutory financial statements for both MBIA Insurance Corporation and National Public Finance Guarantee Corporation.
We also posted updates to the listings of our insurance portfolios.
Regarding today's call, please note that anything said on the call is qualified by the information provided in the company's 10-K and other SEC filings as our company's definitive disclosures are incorporated in those documents.
We urge investors to read our 10-K as it contains our most current disclosures about the company and its financial and operating results.
The definitions and reconciliations of the non-GAAP terms included in our remarks today are also included in our 10-K as well as our financial results report and our quarterly operating supplements.
Now, I'll read our safe harbor disclosure statement.
Risk factors are detailed in our 10-K, which is available on our website at mbia.com.
For our call today, Bill Fallon and Anthony McKiernan will provide some introductory comments and then a question-and-answer session will follow.
Now, here is Bill Fallon.
Remediating our Puerto Rico credits continues to be our main priority.
During the 2019, we were able to resolve and then fully extinguish our Puerto Rico sales tax bond or COFINA exposure.
Our COFINA exposure accounted for approximately one half of our total insured Puerto Rico debt service.
As a result of the restructuring and the extinguishment of our COFINA exposure, along with claims payments that we have made on our other insured Puerto Rico exposure, our total insured debt service on Puerto Rico bonds has declined from $7.9 billion at year-end 2018 to $3.3 billion at the end of 2019.
Our remaining Puerto Rico exposure is largely comprised of three Puerto Rico credits: the Commonwealth pre-2011 General Obligation PBA bonds; the Puerto Rico Electric Power Authority or PREPA; and the Puerto Rico Highways & Transportation Authority or HTA.
At year-end 2019, our exposure to the General Obligation and PBA bonds was about $655 million of gross par or about $833 million of total debt service.
Our PREPA exposure was just under $1 billion of gross par or $1.3 billion of total debt service.
And our HTA exposure was about $600 million of gross par or $1 billion of total debt service.
At this time, there is a restructuring support agreement for the PREPA bonds that has been approved by the Federal Oversight Management Board in over 90% of the PREPA creditors.
The court hearing for the related 9019 motion is scheduled for June.
Governor Vazquez and the Puerto Rico Legislature have stated publicly that they do not support the agreement.
There is also a planned support agreement between the Oversight Board and a group of Commonwealth bondholders, representing approximately 54% of the par amount.
We and the other monolines do not support the proposed agreement and neither does the Commonwealth government.
As yet, there are no specific agreements related to the HTA debt.
The GO plan of adjustment does include some proposed payments to the credit, such as HTA, that have callback rights against the Commonwealth but we believe that the amount allocated for these rights understates what HTA is entitled to.
We'll pursue these rights through the court process.
The other credit in National's insurance portfolio continue to perform in line with our expectations, and the outstanding par of the insured portfolio continues to reduce each quarter.
National's insured portfolio declined to $49 billion of gross par outstanding, down $9 billion or 15% from year-end 2018.
National's leverage ratio of gross par to statutory capital declined to 21 to one, down from 23 to one at year-end 2018.
During the fourth quarter, National purchased 800,000 shares of MBIA common shares at an average price of $9.25 per share.
common stock at an average price of $9.12 per share.
Subsequent to year-end, through February 20, National purchased an additional 3 million shares at an average price of $9.18 per share.
We continue to believe that repurchasing our shares at attractive prices is an effective way to increase long-term value for our shareholders.
As of February 20, 2020, we had approximately $74 million remaining under our existing share repurchase authorization.
Now, Anthony will cover the financial results.
I will begin with the review of our fourth-quarter 2019 and full-year 2019 GAAP and non-GAAP results, then cover the holding company balance sheet, and lastly walk through our statutory results for National and MBIA Insurance Corp.
The company reported a consolidated GAAP net loss of $243 million or a negative $3.21 per share for the quarter ended December 31, 2019, compared to a consolidated GAAP net loss of $7 million or negative $0.08 per share for the quarter ended December 31, 2018.
The results for the quarter were driven by several factors: increased loss and loss adjustment expense at National related to its remaining Puerto Rico exposures, reflecting both views of the credits and the effect of higher discount rates on the present value of estimated future recoveries; increased loss and loss adjustment expense at MBIA Corp.
, primarily due to a reduction in expected recoveries on claims paid on the Zohar CLOs; net investment losses due to the impairment of a legacy remediation municipal security, which was subsequently sold in January; fair value VIE loss related to the accelerated $66 million payoff of the remaining COFINA trust certificates, which also eliminated our remaining COFINA exposure.
That fair value loss was equity neutral as losses were reclassified from other comprehensive income into earnings, and higher operating expenses due to legal expenses associated with National's litigation filed in 2019 against a number of investment banks that underwrote Puerto Rico debt.
The tax expense for the quarter reflects the early adoption of a new tax accounting guidance, which removed the requirement to allocate taxes between earnings from continuing operations and other comprehensive income and which is equity neutral.
Going forward, GAAP quarterly tax expense should be negligible, reflecting the full valuation allowance against our deferred tax asset.
These negative earnings impacts were somewhat offset by higher gains on financial instruments at fair value due to higher interest rates benefiting the swaps associated with the GIC book of business and VIE gains due to an increase in our estimate for our RMBS putback recoveries from Credit Suisse.
Also, in the fourth quarter of 2018, there were elevated realized losses related to the deconsolidation and termination of five second-lien RMBS VIEs.
For the 12 months ended December 31, 2019, the company reported a consolidated GAAP net loss of $359 million or a negative $4.43 per share, compared to a consolidated GAAP net loss of $296 million or negative $3.33 per share for the year ended December 31, 2018.
The results for the year were also driven by several factors: increased loss and loss adjustment expense at MBIA Corp.
, primarily related to a reduction in expected Zohar recoveries and increased first lien RMBS losses; lower premium earnings due to the continued reduction of the insured portfolio; the previously mentioned muni legacy credit net investment losses and higher operating expenses.
These negative impacts were somewhat offset by higher gains on financial instruments at fair value due to the sales of uninsured PREPA and new COFINA bonds during the year, net mark-to-market gains on insured derivatives, and higher total VIE gains related to the consolidated COFINA trusts, higher estimated Credit Suisse RMBS recoveries and elevated realized losses for 2018 due to the deconsolidation and termination of second lien RMBS VIEs.
The company's adjusted net loss, a non-GAAP measure, was $95 million or negative $1.25 per share for the fourth quarter of 2019, compared with adjusted net income of $106 million or $1.20 per share for the fourth quarter of 2018.
The unfavorable change was primarily due to the loss and loss adjustment expense at National in Q4 2019 compared to a loss and loss adjustment expense benefit in Q4 2018, which were both related primarily to National's insured Puerto Rico exposures.
For the year ended December 31, 2019, the company's adjusted net loss was $17 million or negative $0.21 per share, compared with an adjusted net loss of $38 million or negative $0.42 per share for the year ended December 31, 2018.
The favorable change for the year was primarily due to the lower loss and loss adjustment expense at National in 2019.
Book value per share decreased to $10.40 as of December 31, 2019 versus $12.46 as of December 31, 2018, primarily due to the net loss for the year, partially offset by unrealized gains on investments and 10 million fewer net shares outstanding due to share repurchases.
I will now spend a few minutes on the corporate segment balance sheet and the insurance companies.
The corporate segment, which primarily includes the activity of the holding company, MBIA Inc., had total assets of approximately $1 billion as of December 31, 2019.
Within this total are the following material items: unencumbered cash and liquid assets held by MBIA Inc. totaled $375 million as of year-end 2019 versus $457 million at December 31, 2018.
The decrease year-over-year was primarily due to the voluntary call at par in August of $150 million of MBIA Inc.'s 6.4% notes due in 2022.
In the fourth quarter of 2019, MBIA Inc. received as-of-right dividends from National totaling $134 million, with $110 million paid in October and another $24 million paid in November.
The additional $24 million resulted from excess as-of-right dividend capacity under regulatory guidelines, measuring a three-year look back of dividends paid versus investment income.
Due to the November 5th filing of our Q3 2019 financials versus the three-year look back start date of November 8, 2016, we were able to dividend an additional quarter of investment income.
We do not expect this scenario to recur for the foreseeable future and the 2020 as-of-right dividend will now be paid in November.
There were approximately $490 million of assets at market value pledged to the GICs and the interest rate swaps supporting the GIC book.
And as of December 31, 2019, there were $61 million of cumulative front contributions remaining in the tax escrow account, which represented National's 2018 and year-to-date 2019 tax payments.
In January of 2020, due to a full-year 2019 tax loss at National, MBIA Inc. returned National's 2019 tax deposits of $7 million and $26 million of National's 2018 tax year deposits.
Following the returns, $28 million remained in the tax escrow account.
The holding company is not expected to receive meaningful liquidity from any future distributions.
Turning to the insurance company's statutory results, National reported statutory net income of $4 million for the fourth quarter of 2019, compared to net income of $9 million for the prior year's comparable quarter.
The unfavorable result was primarily due to higher loss in LAE, somewhat offset by a tax benefit generated in December of 2019 when National elected to prepay our remaining insurance obligation with respect to our COFINA exposure in the amount of $66 million, thus reducing the trust obligations to 0.
In fiscal year 2019, in addition to the prepayment of our COFINA exposure, National paid $393 million of Puerto Rico-related insurance claims on a gross basis related to the January and July scheduled debt service payments.
In January of 2020, National paid $59 million in gross Puerto Rico-related claims, which brings inception-to-date gross claims to $1.2 billion.
As of December 31, 2019, National's total fixed income investment portfolio, including cash and cash equivalents, had a book adjusted carrying value of $2.5 billion.
Statutory capital was $2.4 billion and claims paying resources totaled $3.5 billion.
Insured gross par outstanding reduced by $2.3 billion during the quarter, and now stands at $48.9 billion.
Turning to MBIA Insurance Corp.
, the statutory net loss was $73 million for the fourth quarter of 2019, compared to statutory net income of $13 million for the fourth quarter of 2018.
The unfavorable result was primarily due to higher loss in LAE related to the Zohar credits in the current-year quarter.
As of December 31, 2019, the statutory capital of MBIA Insurance Corp.
was $476 million versus $555 million as of December 31, 2018.
Claims paying resources totaled $1.2 billion and cash and liquid assets totaled $124 million.
's insured gross par outstanding was $10 billion at year-end 2019.
 Assistant:

Chosen response:
compname reports qtrly loss per share $3.21.
mbia inc qtrly loss per share $3.21.
mbia inc - book value per share was $10.40 as of december 31, 2019 compared with $12.46 as of december 31, 2018.
mbia inc qtrly adjusted net loss $1.25 per share.
mbia inc - as of december 31, 2019, mbia inc.’s liquidity position totaled $375 million.
mbia inc qtrly premiums earned (net of ceded premiums of $1, $1, $5 and $5) $20 million versus $24 million.