Second Quarter Operating Metrics Demonstrate
Portfolio Strength;
Low-End of Full-Year Guidance Range Raised
CBL Properties (NYSE: CBL) announced results for the second
quarter ended June 30, 2023. Results of operations as reported in
the consolidated financial statements for these periods are
prepared in accordance with GAAP. A description of each
supplemental non-GAAP financial measure and the related
reconciliation to the comparable GAAP financial measure is located
at the end of this news release.
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net loss attributable to common
shareholders
$
(0.67
)
$
(1.34
)
$
(0.61
)
$
(2.83
)
Funds from Operations ("FFO")
$
1.01
$
0.97
$
2.87
$
2.20
FFO, as adjusted (1)
$
1.56
$
1.88
$
3.12
$
3.92
(1)
For a reconciliation of FFO to FFO, as
adjusted, for the periods presented, please refer to the footnotes
to the Company’s reconciliation of net loss attributable to common
shareholders to FFO allocable to Operating Partnership common
unitholders on page 8 of this news release.
KEY TAKEAWAYS:
- Over 875,000 square feet of leases were executed in the second
quarter, including comparable leases of approximately 411,000
square feet signed at 9.1% higher average rents versus the prior
leases.
- Portfolio occupancy increased 20 basis points to 89.7% as of
June 30, 2023, compared with portfolio occupancy of 89.5% as of
June 30, 2022. Same-center occupancy for malls, lifestyle centers
and outlet centers was 88.5% as of June 30, 2023, a 50-basis-point
increase from 88.0% as of June 30, 2022.
- Same-center NOI declined 0.8% during the second quarter 2023 as
compared with the prior-year quarter near the high end of the
full-year guidance range. As anticipated due to the moderation in
tenant sales, percentage rent declined $0.9 million. For the six
months ended June 30, 2023, same-center NOI declined 2.7%, near the
mid-point of the previously issued guidance range.
- FFO, as adjusted, per share for the second quarter 2023, was
$1.56, in-line with expectations. FFO, as adjusted, per share was
$1.88 for the second quarter 2022.
- CBL increased the low end of its 2023 FFO, as adjusted, per
share, guidance to a range of $6.00 - $6.47 and 2023 same-center
NOI guidance to the range of $423 million - $440 million.
- Same-center tenant sales per square foot for the second quarter
2023 declined 7.1%. Same-center tenant sales per square foot for
the 12-months ended June 30, 2023, declined 3.8% to $425, compared
with $442 for the prior period.
- As of June 30, 2023, the Company had $279.8 million of
unrestricted cash and marketable securities.
- CBL's Board of Directors declared a regular cash dividend for
the second quarter 2023 of $0.375 per share, representing an
annualized dividend of $1.50 per share.
"Strong leasing was the highlight of our second quarter results
as the CBL team successfully leveraged healthy tenant demand for
our portfolio," said Stephen D. Lebovitz, CBL's chief executive
officer. "Leasing metrics were the strongest in several years, with
healthy positive new and renewal lease spreads and year-over-year
occupancy growth, providing solid evidence of the constructive
environment. We intend to take advantage of the more favorable
supply/demand dynamic in our leasing negotiations going
forward.
"Second quarter same-center NOI was near the high-end of our
full-year guidance range. As a result of the year-to-date
performance and our expectations for the remainder of the year, we
raised the low-end of our FFO, as adjusted and same-center NOI
guidance ranges. Leasing-led revenue gains were offset by an
expected reduction in percentage rent. We successfully managed
inflationary pressure on costs, generating a modest reduction in
operating expense for the quarter on a same-center basis.
"We are also making progress addressing our loan maturities and
de-risking our balance sheet. During the quarter, we closed a
two-year extension on the loan secured by Cross Creek Mall and are
currently in process on the refinancing of the loan secured by The
Outlet Shoppes at Atlanta. While the financing markets remain
challenging, we are encouraged by the reception we are seeing in
the market. As we move into the second half of 2023, we remain
focused on achieving further operational improvement, generating
greater free cash flow and maintaining a disciplined approach to
capital allocation."
Same-center Net Operating Income
(“NOI”) (1):
Three Months Ended June
30,
2023
2022
Total Revenues
$
159,872
$
161,006
Total Expenses
$
(52,798
)
$
(53,054
)
Total portfolio same-center NOI
$
107,074
$
107,952
Total same-center NOI percentage
change
(0.8
)%
Estimate for uncollectable revenues
(recovery)
$
2,134
$
(841
)
(1)
CBL’s definition of same-center NOI
excludes the impact of lease termination fees and certain non-cash
items such as straight-line rents and reimbursements, write-offs of
landlord inducements and net amortization of above and below market
leases.
Same-center NOI for the second quarter 2023 declined by $0.9
million. Major variances impacting the quarter included a $3.0
million favorable variance from a year-end utility reimbursement
accrual adjustment, offset by a $3.0 million unfavorable variance
in the estimate for uncollectable revenues and a $0.9 million
decline in percentage rents.
Six Months Ended June
30,
2023
2022
Total Revenues
$
323,549
$
325,667
Total Expenses
$
(110,952
)
$
(107,265
)
Total portfolio same-center NOI
$
212,597
$
218,402
Total same-center NOI percentage
change
(2.7
)%
Estimate for uncollectable revenues
(recovery)
$
968
$
(2,985
)
Same-center NOI for six months ended June 30, 2023, declined by
$5.8 million or 2.7% from the prior-year period. The decline was
driven by a $3.9 million unfavorable variance in the estimate for
uncollectable revenues, a $2.8 million decline in percentage rents
and a $3.7 million increase in operating expense, partially offset
by a favorable variance from a year-end utility reimbursement
accrual adjustment.
PORTFOLIO OPERATIONAL RESULTS
Occupancy(1):
As of June 30,
2023
2022
Total portfolio
89.7%
89.5%
Malls, Lifestyle Centers and Outlet
Centers:
Total malls
88.0%
87.9%
Total lifestyle centers
92.7%
89.4%
Total outlet centers
88.4%
87.5%
Total same-center malls, lifestyle centers
and outlet centers
88.5%
88.0%
All Other:
Total open-air centers
94.7%
94.4%
Total other
74.2%
91.7%
(1)
Occupancy for malls, lifestyle centers and
outlet centers represent percentage of in-line gross leasable area
under 20,000 square feet occupied. Occupancy for open-air centers
represents percentage of gross leasable area occupied. The decline
in total other occupancy was related to approximately
52,000-square-feet of vacancy at an office building.
New and Renewal Leasing Activity of
Same Small Shop Space Less Than 10,000 Square Feet:
% Change in Average Gross Rent Per
Square Foot:
Three Months Ended June
30,
Six Months Ended June
30,
2023
2023
All Property Types
9.1%
5.1%
Stabilized Malls, Lifestyle Centers and
Outlet Centers
7.2%
3.5%
New leases
29.6%
24.9%
Renewal leases
4.8%
1.7%
Same-Center Sales Per Square Foot for
In-line Tenants 10,000 Square Feet or Less:
Sales Per Square Foot for the
Trailing Twelve Months Ended June 30,
2023
2022
% Change
Mall, Lifestyle Center and Outlet Center
same-center sales per square foot
$
425
$
442
(3.8)%
DIVIDEND
On August 9, 2023, CBL’s Board of Directors declared a regular
quarterly cash dividend for the three months ended September 30,
2023, of $0.375 per share. The dividend, which equates to an annual
dividend payment of $1.50 per share, is payable on September 29,
2023, to shareholders of record as of September 15, 2023.
FINANCING ACTIVITY
Year-to-date, CBL has completed more than $406.0 in financing
activity.
On June 9, 2023, CBL closed on the extension and modification of
the $94.8 million loan secured by Cross Creek Mall in Fayetteville,
NC. The newly modified loan has a maturity date of June 9, 2025,
and carries a fixed interest rate of 8.19%.
On March 16, 2023, CBL and its 50% joint venture partner closed
on the extension and modification of the $161.9 million loan ($80.9
million at CBL’s 50% share) secured by West County Center, a
high-performing enclosed mall in St. Louis, MO. At closing, the
newly modified non-recourse loan had a principal balance of $156.9
million ($78.5 million at CBL’s share) and was extended for an
initial term of two years to December 2024, with one two-year
conditional extension available upon meeting certain requirements.
The loan maintained the existing fixed interest rate of 3.4%.
On April 4, 2023, CBL and its 50% joint venture partner closed a
new $148.0 million loan ($74.0 million at CBL’s 50% share) secured
by Friendly Center and The Shops at Friendly Center, the premier
lifestyle center located in Greensboro, NC. The new non-recourse
five-year loan bears a fixed interest rate of 6.44% and replaces
two loans with an aggregate balance of $145.2 million ($72.6
million at CBL’s share) that were set to mature in April 2023.
On April 28, 2023, CBL and its joint venture partner retired the
$7.2 million (at 100%) recourse loan secured by Phase II of The
Outlet Shoppes of the Bluegrass in Louisville, KY. The venture
anticipates securing new financing for the entire project to
coincide with the December 2024 maturity of the $64.5 million (at
100%) loan secured by Phase I.
On May 4, 2023, CBL entered into a $32.0 million swap to fix the
interest rate on a portion of its $360.0 million loan secured by
open-air centers and outparcels. The swap fixed the rate to 7.3975%
through the initial maturity in June 2027. Collectively, $212.0
million of the $360.0 million loan has been fixed at a weighted
average interest rate of 7.02%.
CBL is cooperating with the foreclosure or conveyance of
Westgate Mall in Spartanburg, SC, ($28.7 million) and Alamance
Crossing East in Burlington, NC, ($41.1 million). In March,
Alamance Crossing East was placed into receivership and
deconsolidated.
DISPOSITIONS
During the second quarter 2023, CBL completed the sale of one
land parcel generating $0.4 million in gross proceeds at CBL's
share. Year-to-date through the second quarter end, CBL has grossed
more than $5.3 million from dispositions.
DEVELOPMENT AND REDEVELOPMENT ACTIVITY
Detailed project information is available in CBL’s Financial
Supplement for Q2 2023, which can be found in the Invest –
Financial Reports section of CBL’s website at
cblproperties.com.
OUTLOOK AND GUIDANCE
Based on second quarter 2023 results and Management's
expectations for the second half of 2023, CBL is providing the
following guidance for FFO, as adjusted, and same-center NOI for
full-year 2023. Guidance excludes the impact of any unannounced
transactions.
Reconciliation of GAAP Earnings Per
Share to 2023 FFO, as Adjusted, Per Share:
Low
High
2023 FFO, as adjusted
$
193 million
$
208 million
2023 FFO, as adjusted, per share
$
6.00
$
6.47
Weighted Average Common Shares
Outstanding
32.1 million
32.1 million
2023 Same-Center NOI ("SC NOI")
$
423 million
$
440 million
2023 Change in Same-Center NOI
(4.5
)%
(0.7
)%
Low
High
Expected diluted earnings per common
share
$
(1.95
)
$
(1.48
)
Depreciation and amortization
6.76
6.76
Dividends allocable to unvested restricted
stock
0.04
0.04
Debt discount accretion, net of
noncontrolling interests' share
1.93
1.93
Adjustment for unconsolidated affiliates
with negative investment
0.08
0.08
Non-cash default interest expense
0.02
0.02
Gain on deconsolidation
(0.88
)
(0.88
)
Expected FFO, as adjusted, per diluted,
fully converted common share
$
6.00
$
6.47
2023 Estimate of Capital Items:
Low
High
2023 Estimated maintenance capital/tenant
allowances
$40 million
$55 million
2023 Estimated development/redevelopment
expenditures
$15 million
$22 million
2023 Estimated principal amortization
(including est. term loan ECF)
$75 million
$85 million
Total Estimate
$130 million
$162 million
ABOUT CBL PROPERTIES
Headquartered in Chattanooga, TN, CBL Properties owns and
manages a national portfolio of market-dominant properties located
in dynamic and growing communities. CBL’s owned and managed
portfolio is comprised of 94 properties totaling 58.5 million
square feet across 22 states, including 56 high-quality enclosed
malls, outlet centers and lifestyle retail centers as well as more
than 30 open-air centers and other assets. CBL seeks to
continuously strengthen its company and portfolio through active
management, aggressive leasing and profitable reinvestment in its
properties. For more information visit cblproperties.com.
NON-GAAP FINANCIAL MEASURES
Funds From Operations
FFO is a widely used non-GAAP measure of the operating
performance of real estate companies that supplements net income
(loss) determined in accordance with GAAP. The National Association
of Real Estate Investment Trusts ("NAREIT") defines FFO as net
income (loss) (computed in accordance with GAAP) excluding gains or
losses on sales of depreciable operating properties and impairment
losses of depreciable properties, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships
and joint ventures and noncontrolling interests. Adjustments for
unconsolidated partnerships and joint ventures and noncontrolling
interests are calculated on the same basis. We define FFO as
defined above by NAREIT. The Company’s method of calculating FFO
may be different from methods used by other REITs and, accordingly,
may not be comparable to such other REITs.
The Company believes that FFO provides an additional indicator
of the operating performance of its properties without giving
effect to real estate depreciation and amortization, which assumes
the value of real estate assets declines predictably over time.
Since values of well-maintained real estate assets have
historically risen with market conditions, the Company believes
that FFO enhances investors’ understanding of its operating
performance. The use of FFO as an indicator of financial
performance is influenced not only by the operations of the
Company’s properties and interest rates, but also by its capital
structure.
The Company believes FFO allocable to Operating Partnership
common unitholders is a useful performance measure since it
conducts substantially all of its business through its Operating
Partnership and, therefore, it reflects the performance of the
properties in absolute terms regardless of the ratio of ownership
interests of the Company’s common shareholders and the
noncontrolling interest in the Operating Partnership.
In the reconciliation of net income (loss) attributable to the
Company’s common shareholders to FFO allocable to Operating
Partnership common unitholders, located in this earnings release,
the Company makes an adjustment to add back noncontrolling interest
in income (loss) of its Operating Partnership in order to arrive at
FFO of the Operating Partnership common unitholders.
FFO does not represent cash flows from operations as defined by
GAAP, is not necessarily indicative of cash available to fund all
cash flow needs and should not be considered as an alternative to
net income (loss) for purposes of evaluating the Company’s
operating performance or to cash flow as a measure of
liquidity.
The Company believes that it is important to identify the impact
of certain significant items on its FFO measures for a reader to
have a complete understanding of the Company’s results of
operations. Therefore, the Company has also presented adjusted FFO
measures excluding these items from the applicable periods. Please
refer to the reconciliation of net income (loss) attributable to
common shareholders to FFO allocable to Operating Partnership
common unitholders on page 8 of this news release for a description
of these adjustments.
Same-center Net Operating Income
NOI is a supplemental non-GAAP measure of the operating
performance of the Company’s shopping centers and other properties.
The Company defines NOI as property operating revenues (rental
revenues, tenant reimbursements and other income) less property
operating expenses (property operating, real estate taxes and
maintenance and repairs).
The Company computes NOI based on the Operating Partnership’s
pro rata share of both consolidated and unconsolidated properties.
The Company believes that presenting NOI and same-center NOI
(described below) based on its Operating Partnership’s pro rata
share of both consolidated and unconsolidated properties is useful
since the Company conducts substantially all of its business
through its Operating Partnership and, therefore, it reflects the
performance of the properties in absolute terms regardless of the
ratio of ownership interests of the Company’s common shareholders
and the noncontrolling interest in the Operating Partnership. The
Company's definition of NOI may be different than that used by
other companies and, accordingly, the Company's calculation of NOI
may not be comparable to that of other companies.
Since NOI includes only those revenues and expenses related to
the operations of the Company’s shopping center properties, the
Company believes that same-center NOI provides a measure that
reflects trends in occupancy rates, rental rates, sales at the
malls and operating costs and the impact of those trends on the
Company’s results of operations. The Company’s calculation of
same-center NOI excludes lease termination income, straight-line
rent adjustments, amortization of above and below market lease
intangibles and write-off of landlord inducement assets in order to
enhance the comparability of results from one period to another. A
reconciliation of same-center NOI to net income (loss) is located
at the end of this earnings release.
Pro Rata Share of Debt
The Company presents debt based on the carrying value of its pro
rata ownership share (including the carrying value of the Company’s
pro rata share of unconsolidated affiliates and excluding
noncontrolling interests’ share of consolidated properties) because
it believes this provides investors a clearer understanding of the
Company’s total debt obligations which affect the Company’s
liquidity. A reconciliation of the Company’s pro rata share of debt
to the amount of debt on the Company’s condensed consolidated
balance sheet is located at the end of this earnings release.
Information included herein contains “forward-looking
statements” within the meaning of the federal securities laws. Such
statements are inherently subject to risks and uncertainties, many
of which cannot be predicted with accuracy and some of which might
not even be anticipated. Future events and actual events, financial
and otherwise, may differ materially from the events and results
discussed in the forward-looking statements. The reader is directed
to the Company’s various filings with the Securities and Exchange
Commission, including without limitation the Company’s Annual
Report on Form 10-K, and the “Management's Discussion and Analysis
of Financial Condition and Results of Operations” included therein,
for a discussion of such risks and uncertainties.
Consolidated Statements of
Operations
(Unaudited; in thousands, except per share
amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
REVENUES:
Rental revenues
$
124,842
$
131,832
$
255,166
$
267,164
Management, development and leasing
fees
1,822
1,786
4,256
3,555
Other
3,203
3,400
6,804
6,401
Total revenues
129,867
137,018
266,226
277,120
EXPENSES:
Property operating
(21,507
)
(21,312
)
(46,121
)
(44,656
)
Depreciation and amortization
(49,742
)
(64,476
)
(103,011
)
(133,419
)
Real estate taxes
(14,481
)
(14,254
)
(29,269
)
(28,689
)
Maintenance and repairs
(9,991
)
(10,230
)
(21,515
)
(20,796
)
General and administrative
(16,156
)
(18,450
)
(35,385
)
(36,524
)
Loss on impairment
—
(252
)
—
(252
)
Litigation settlement
74
65
118
146
Other
—
(834
)
(198
)
(834
)
Total expenses
(111,803
)
(129,743
)
(235,381
)
(265,024
)
OTHER INCOME (EXPENSES):
Interest and other income
2,967
910
5,632
1,064
Interest expense
(44,173
)
(55,117
)
(87,697
)
(145,776
)
Gain on deconsolidation
—
—
28,151
36,250
(Loss) gain on sales of real estate
assets
(114
)
3
1,482
19
Reorganization items, net
—
613
—
(958
)
Income tax (provision) benefit
(219
)
472
(118
)
(329
)
Equity in earnings (losses) of
unconsolidated affiliates
812
2,039
(444
)
10,606
Total other expenses
(40,727
)
(51,080
)
(52,994
)
(99,124
)
Net loss
(22,663
)
(43,805
)
(22,149
)
(87,028
)
Net loss attributable to noncontrolling
interests in:
Operating Partnership
—
44
—
59
Other consolidated subsidiaries
1,875
2,373
3,620
4,859
Net loss attributable to the
Company
(20,788
)
(41,388
)
(18,529
)
(82,110
)
Dividends allocable to unvested restricted
stock
(281
)
(210
)
(561
)
(210
)
Net loss attributable to common
shareholders
$
(21,069
)
$
(41,598
)
$
(19,090
)
$
(82,320
)
Basic and diluted per share data
attributable to common shareholders:
Basic earnings per share
$
(0.67
)
$
(1.34
)
$
(0.61
)
$
(2.83
)
Diluted earnings per share
(0.67
)
(1.34
)
(0.61
)
(2.83
)
Weighted-average basic shares
31,313
30,973
31,309
29,091
Weighted-average diluted shares
31,313
30,973
31,309
29,091
The Company's reconciliation of net
loss attributable to common shareholders to FFO allocable to
Operating Partnership common unitholders is as follows:
(in thousands, except per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net loss attributable to common
shareholders
$
(21,069
)
$
(41,598
)
$
(19,090
)
$
(82,320
)
Noncontrolling interest in loss of
Operating Partnership
—
(44
)
—
(59
)
Dividends allocable to unvested restricted
stock
281
210
561
210
Depreciation and amortization expense
of:
Consolidated properties
49,742
64,476
103,011
133,419
Unconsolidated affiliates
4,433
8,819
9,071
17,339
Non-real estate assets
(304
)
(203
)
(452
)
(401
)
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(708
)
(938
)
(1,373
)
(1,837
)
Loss on impairment, net of taxes
—
186
—
186
Gain on depreciable property
—
—
—
(629
)
FFO allocable to Operating Partnership
common unitholders
32,375
30,908
91,728
65,908
Debt discount accretion, including our
share of unconsolidated affiliates and net of noncontrolling
interests' share (1)
16,574
50,036
33,190
128,499
Adjustment for unconsolidated affiliates
with negative investment (2)
888
(10,460
)
2,479
(23,007
)
Senior secured notes fair value adjustment
(3)
—
(593
)
—
(395
)
Litigation settlement (4)
(74
)
(65
)
(118
)
(146
)
Non-cash default interest expense (5)
287
(9,344
)
781
(18,220
)
Gain on deconsolidation (6)
—
—
(28,151
)
(36,250
)
Reorganization items, net (7)
—
(613
)
—
958
FFO allocable to Operating Partnership
common unitholders, as adjusted
$
50,050
$
59,869
$
99,909
$
117,347
FFO per diluted share
$
1.01
$
0.97
$
2.87
$
2.20
FFO, as adjusted, per diluted
share
$
1.56
$
1.88
$
3.12
$
3.92
Weighted-average common and potential
dilutive common shares outstanding with Operating Partnership units
fully converted
32,071
31,822
32,000
29,926
(1)
In conjunction with fresh start
accounting upon emergence from bankruptcy, the Company recognized
debt discounts equal to the difference between the outstanding
balance of mortgage notes payable and the estimated fair value of
such mortgage notes payable. The debt discounts are accreted as
additional interest expense over the terms of the respective
mortgage notes payable using the effective interest method.
(2)
Represents the Company’s share of
the earnings (losses) before depreciation and amortization expense
of unconsolidated affiliates where the Company is not recognizing
equity in earnings (losses) because its investment in the
unconsolidated affiliate is below zero.
(3)
Represents the fair value
adjustment recorded on the senior secured notes as interest
expense.
(4)
Represents a credit to litigation
settlement expense in each of the three- and six-month periods
ended June 30, 2023 and 2022 related to claim amounts that were
released pursuant to the terms of the settlement agreement related
to the settlement of a class action lawsuit.
(5)
The three and six months ended
June 30, 2023 includes default interest on loans past their
maturity dates. The three and six months ended June 30, 2022
includes the reversal of default interest expense when waivers or
forbearance agreements were obtained.
(6)
For the six months ended June 30,
2023, the Company deconsolidated Alamance Crossing East due to a
loss of control when the property was placed into receivership in
connection with the foreclosure process. For the six months ended
June 30, 2022, the Company deconsolidated Greenbrier Mall due to a
loss of control when the property was placed into receivership in
connection with the foreclosure process.
(7)
Represents costs incurred
subsequent to the Company filing the chapter 11 cases associated
with the Company's reorganization efforts, which consists of
professional fees, legal fees and U.S. Trustee fees.
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Diluted EPS attributable to common
shareholders
$
(0.67
)
$
(1.34
)
$
(0.61
)
$
(2.83
)
Add amounts per share included in FFO:
Unvested restricted stock
0.02
0.04
0.03
0.08
Eliminate amounts per share excluded from
FFO:
Depreciation and amortization expense,
including amounts from consolidated properties, unconsolidated
affiliates, non-real estate assets and excluding amounts allocated
to noncontrolling interests
1.66
2.26
3.45
4.96
Loss on impairment, net of taxes
—
0.01
—
0.01
Gain on depreciable property
—
—
—
(0.02
)
FFO per diluted share
$
1.01
$
0.97
$
2.87
$
2.20
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees
$
793
$
1,052
$
1,954
$
2,448
Straight-line rental income adjustment
$
1,722
$
4,425
$
3,355
$
7,342
Gain on outparcel sales, net of taxes and
noncontrolling interests' share
$
725
$
3
$
2,305
$
19
Net amortization of acquired above- and
below-market leases
$
(5,123
)
$
(4,892
)
$
(10,445
)
$
(11,049
)
Income tax (provision) benefit
$
(219
)
$
472
$
(118
)
$
(329
)
Abandoned projects expense
$
—
$
(834
)
$
(17
)
$
(834
)
Interest capitalized
$
111
$
147
$
217
$
375
Estimate of uncollectable revenues
$
(2,375
)
$
940
$
(1,616
)
$
3,301
As of June 30,
2023
2022
Straight-line rent receivable
$
18,902
$
9,440
Same-center Net Operating
Income
(Dollars in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net loss
$
(22,663
)
$
(43,805
)
$
(22,149
)
$
(87,028
)
Adjustments:
Depreciation and amortization
49,742
64,476
103,011
133,419
Depreciation and amortization from
unconsolidated affiliates
4,433
8,819
9,071
17,339
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(708
)
(938
)
(1,373
)
(1,837
)
Interest expense
44,173
55,117
87,697
145,776
Interest expense from unconsolidated
affiliates
18,531
21,660
36,056
40,157
Noncontrolling interests' share of
interest expense in other consolidated subsidiaries
(1,918
)
(2,525
)
(3,961
)
(5,095
)
Abandoned projects expense
—
834
17
834
Loss (gain) on sales of real estate
assets, net of taxes and noncontrolling interests' share
59
(3
)
(1,537
)
(19
)
Gain on sales of real estate assets of
unconsolidated affiliates
(784
)
—
(768
)
(629
)
Adjustment for unconsolidated affiliates
with negative investment
888
(10,460
)
2,479
(23,007
)
Gain on deconsolidation
—
—
(28,151
)
(36,250
)
Loss on impairment, net of taxes
—
186
—
186
Litigation settlement
(74
)
(65
)
(118
)
(146
)
Reorganization items, net
—
(613
)
—
958
Income tax provision (benefit)
219
(472
)
118
329
Lease termination fees
(793
)
(1,052
)
(1,954
)
(2,448
)
Straight-line rent and above- and
below-market lease amortization
3,401
467
7,090
3,707
Net loss attributable to noncontrolling
interests in other consolidated subsidiaries
1,875
2,373
3,620
4,859
General and administrative expenses
16,156
18,450
35,385
36,524
Management fees and non-property level
revenues
(5,038
)
(525
)
(10,018
)
(1,049
)
Operating Partnership's share of
property NOI
107,499
111,924
214,515
226,580
Non-comparable NOI
(425
)
(3,972
)
(1,918
)
(8,178
)
Total same-center NOI (1)
$
107,074
$
107,952
$
212,597
$
218,402
Total same-center NOI percentage
change
(0.8
)%
(2.7
)%
(1)
CBL defines NOI as property operating
revenues (rental revenues, tenant reimbursements and other income),
less property operating expenses (property operating, real estate
taxes and maintenance and repairs). NOI excludes lease termination
income, straight-line rent adjustments, amortization of above and
below market lease intangibles and write-offs of landlord
inducement assets. We include a property in our same-center pool
when we own all or a portion of the property as of June 30, 2023,
and we owned it and it was in operation for both the entire
preceding calendar year and the current year-to-date reporting
period ending June 30, 2023. New properties are excluded from
same-center NOI, until they meet these criteria. Properties
excluded from the same-center pool that would otherwise meet these
criteria are properties which are under major redevelopment or
being considered for repositioning, where we intend to renegotiate
the terms of the debt secured by the related property or return the
property to the lender.
Same-center Net Operating
Income
(Continued)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Malls
$
73,660
$
75,491
$
145,697
$
153,693
Outlet centers
5,301
4,894
10,415
9,529
Lifestyle centers
8,898
8,727
18,099
17,830
Open-air centers
13,580
13,177
27,562
26,259
Outparcels and other
5,635
5,663
10,824
11,091
Total same-center NOI (1)
$
107,074
$
107,952
$
212,597
$
218,402
Percentage Change:
Malls
(2.4
)%
(5.2
)%
Outlet centers
8.3
%
9.3
%
Lifestyle centers
2.0
%
1.5
%
Open-air centers
3.1
%
5.0
%
Outparcels and other
(0.5
)%
(2.4
)%
Total same-center NOI (1)
(0.8
)%
(2.7
)%
(1)
CBL defines NOI as property operating
revenues (rental revenues, tenant reimbursements and other income),
less property operating expenses (property operating, real estate
taxes and maintenance and repairs). NOI excludes lease termination
income, straight-line rent adjustments, amortization of above and
below market lease intangibles and write-offs of landlord
inducement assets. We include a property in our same-center pool
when we own all or a portion of the property as of June 30, 2023,
and we owned it and it was in operation for both the entire
preceding calendar year and the current year-to-date reporting
period ended June 30, 2023. New properties are excluded from
same-center NOI, until they meet these criteria. Properties
excluded from the same-center pool that would otherwise meet these
criteria are properties which are under major redevelopment or
being considered for repositioning, where we intend to renegotiate
the terms of the debt secured by the related property or return the
property to the lender.
Company's Share of Consolidated and
Unconsolidated Debt
(Dollars in thousands)
As of June 30, 2023
Fixed Rate
Variable Rate
Total per Debt
Schedule
Unamortized Deferred Financing
Costs
Unamortized Debt Discounts
(1)
Total
Consolidated debt
$
963,501
$
1,048,478
$
2,011,979
$
(15,407
)
$
(54,523
)
$
1,942,049
Noncontrolling interests' share of
consolidated debt
(25,222
)
(13,177
)
(38,399
)
298
4,680
(33,421
)
Company's share of unconsolidated
affiliates' debt
622,022
62,919
684,941
(3,397
)
—
681,544
Other debt (2)
41,122
—
41,122
—
—
41,122
Company's share of consolidated,
unconsolidated and other debt
$
1,601,423
$
1,098,220
$
2,699,643
$
(18,506
)
$
(49,843
)
$
2,631,294
Weighted-average interest rate
5.18
%
8.15
%
6.39
%
As of June 30, 2022
Fixed Rate
Variable Rate
Total per Debt
Schedule
Unamortized Deferred Financing
Costs
Unamortized Debt Discounts
(1)
Total
Consolidated debt
$
881,513
$
1,270,871
$
2,152,384
$
(16,028
)
$
(100,967
)
$
2,035,389
Noncontrolling interests' share of
consolidated debt
(32,771
)
(13,597
)
(46,368
)
92
15,424
(30,852
)
Company's share of unconsolidated
affiliates' debt
627,434
71,786
699,220
(2,490
)
—
696,730
Other debt (2)
153,719
—
153,719
—
—
153,719
Company's share of consolidated,
unconsolidated and other debt
$
1,629,895
$
1,329,060
$
2,958,955
$
(18,426
)
$
(85,543
)
$
2,854,986
Weighted-average interest rate
4.67
%
4.44
%
4.57
%
(1)
In conjunction with fresh start
accounting, the Company estimated the fair value of its mortgage
notes with the assistance of a third-party valuation advisor. This
resulted in recognizing debt discounts upon emergence from
bankruptcy. The debt discounts are accreted over the term of the
respective debt using the effective interest method.
(2)
Represents the outstanding loan
balance for properties that were deconsolidated due to a loss of
control when the properties were placed into receivership in
connection with the foreclosure process.
Consolidated Balance Sheets
(Unaudited; in thousands, except share
data)
June 30,
December 31,
2023
2022
ASSETS
Real estate assets:
Land
$
589,557
$
596,715
Buildings and improvements
1,200,096
1,198,597
1,789,653
1,795,312
Accumulated depreciation
(183,529
)
(136,901
)
1,606,124
1,658,411
Developments in progress
6,431
5,576
Net investment in real estate assets
1,612,555
1,663,987
Cash and cash equivalents
24,919
44,718
Restricted cash
88,674
97,231
Available-for-sale securities - at fair
value (amortized cost of $255,412 and $293,476 as of June 30, 2023
and December 31, 2022, respectively)
254,872
292,422
Receivables:
Tenant
34,764
40,620
Other
3,318
3,876
Investments in unconsolidated
affiliates
74,138
77,295
In-place leases, net
197,245
247,497
Above market leases, net
143,453
171,265
Intangible lease assets and other
assets
41,474
39,332
$
2,475,412
$
2,678,243
LIABILITIES AND EQUITY
Mortgage and other indebtedness, net
$
1,942,049
$
2,000,186
Below market leases, net
94,180
110,616
Accounts payable and accrued
liabilities
114,082
200,312
Total liabilities
2,150,311
2,311,114
Shareholders' equity:
Common stock, $.001 par value, 200,000,000
shares authorized, 32,054,421 and 31,780,075 issued and outstanding
as of June 30, 2023, and December 31, 2022, respectively (in each
case, excluding 34 treasury shares)
32
32
Additional paid-in capital
715,163
710,497
Accumulated other comprehensive income
(loss)
339
(1,054
)
Accumulated deficit
(381,509
)
(338,934
)
Total shareholders' equity
334,025
370,541
Noncontrolling interests
(8,924
)
(3,412
)
Total equity
325,101
367,129
$
2,475,412
$
2,678,243
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809471891/en/
Katie Reinsmidt, Executive Vice President - Chief Operating
Officer, 423.490.8301, katie.reinsmidt@cblproperties.com
CBL and Associates Prope... (NYSE:CBL)
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