Same-Center NOI Increase and Occupancy Gains
Lead Strong Results in Third Quarter
CBL Properties (NYSE: CBL) announced results for the third
quarter ended September 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net income (loss) attributable to common
shareholders
$
0.41
$
(0.47
)
$
(0.19
)
$
(3.26
)
Funds from Operations ("FFO")
$
1.93
$
1.55
$
4.79
$
3.78
FFO, as adjusted (1)
$
1.60
$
1.85
$
4.72
$
5.77
(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 income (loss) attributable
to common shareholders to FFO allocable to Operating Partnership
common unitholders on page 8 of this news release.
KEY TAKEAWAYS:
- As of November 2, 2023, the limited guaranty provided by the
Operating Partnership on the Secured Term Loan had been eliminated
and the loan became fully non-recourse. With the elimination of the
guaranty, CBL's borrowings are almost fully comprised of
non-recourse loans.
- Same-center NOI increased 0.4% during the third quarter 2023 as
compared with the prior-year quarter. For the nine months ended
September 30, 2023, same-center NOI declined 1.7%.
- FFO, as adjusted, per share was $1.60 for the third quarter
2023, and $4.72 for the nine-months ended September 30, 2023,
in-line with expectations. FFO, as adjusted, per share was $1.85
for the third quarter 2022 and $5.77 for the nine-months ended
September 30, 2022.
- CBL now anticipates achieving full-year results near the
mid-point of its 2023 FFO, as adjusted, per share, guidance range
of $6.00 - $6.47 and 2023 same-center NOI guidance to the range of
$423 million - $440 million.
- Portfolio occupancy increased 30 basis points to 90.8% as of
September 30, 2023, compared with portfolio occupancy of 90.5% as
of September 30, 2022. Same-center occupancy for malls, lifestyle
centers and outlet centers was 89.7% as of September 30, 2023, a
60-basis-point increase from 89.1% as of September 30, 2022.
- Over 969,000 square feet of leases were executed in the third
quarter, including comparable leases of approximately 691,000
square feet signed at 4.0% lower average rents versus the prior
leases driven by a 6.5% decline in renewal lease spreads. The
decline in renewal lease spreads was primarily the result of the
execution of several portfolio-wide lease deals with
underperforming tenants.
- As anticipated, same-center tenant sales per square foot for
the third quarter 2023 declined 4.8%. Same-center tenant sales per
square foot for the 12-months ended September 30, 2023, declined
4.5% to $420, compared with $440 for the prior period.
- As of September 30, 2023, the Company had $292.8 million of
unrestricted cash and marketable securities.
- CBL's Board of Directors declared a regular cash dividend for
the fourth quarter 2023 of $0.375 per share, representing an
annualized dividend of $1.50 per share.
“CBL posted solid results in the third quarter highlighted by
same-center NOI growth of 40 basis points," said Stephen D.
Lebovitz, CBL's chief executive officer. "The increase was
primarily the result of contributions from occupancy improvements
as well as expense savings. Operating expense is benefiting from a
new lower third-party contract rate, as well as the timing of
certain maintenance and repair items, several of which should
impact the fourth quarter. As a result of the year-to-date
performance and our expectations for the remainder of the year, we
anticipate achieving full-year results near the mid-point of the
FFO, as adjusted and same-center NOI guidance ranges.
"We maintained a high volume of leasing in the third quarter and
new lease spreads were well into positive territory, increasing
more than 25%. While renewal spreads were negative for the quarter,
this was driven by a subset of portfolio renewal packages with
certain underperforming tenants. The combination of rising
occupancy and strong leasing demand positions us to more readily
replace underperforming tenants going forward.
"Despite the challenging capital markets, we were pleased to
close a new 10-year non-recourse loan secured by The Outlet Shoppes
at Atlanta. This loan generated approximately $10 million in net
new proceeds for our joint venture. With this loan closing and the
exercise of available options for extendable loans, we have fully
addressed all 2023 loan maturities successfully extending our debt
maturity schedule. With the elimination of the limited corporate
guaranty on our term loan on November 2nd, we also have made
significant progress de-risking our balance sheet. During the third
quarter, we began a disciplined execution of our stock repurchase
program, taking advantage of the discount to our view of the value
of CBL's stock. As we approach the end of 2023 and look forward to
2024, we are focused on achieving further operational improvements,
generating greater free cash flow and maintaining a disciplined
approach to capital allocation."
Same-center Net Operating Income (“NOI”) (1):
Three Months Ended September
30,
2023
2022
Total Revenues
$
159,404
$
162,577
Total Expenses
$
(52,955
)
$
(56,504
)
Total portfolio same-center NOI
$
106,449
$
106,073
Total same-center NOI percentage
change
0.4
%
Estimate for uncollectable revenues
(recovery)
$
2,293
$
(301
)
(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 third quarter 2023 increased $0.4
million. Major variances impacting the quarter included a $2.6
million unfavorable variance in the estimate for uncollectable
revenues and a $0.3 million decline in percentage rents. Operating
expenses declined $3.6 million driven by $1.8 million lower
maintenance and repair and $1.7 million lower property operating
expense. The declines were primarily due to lower third-party
contract expense and the timing of certain maintenance
projects.
Nine Months Ended September
30,
2023
2022
Total Revenues
$
482,953
$
488,244
Total Expenses
$
(163,908
)
$
(163,769
)
Total portfolio same-center NOI
$
319,046
$
324,475
Total same-center NOI percentage
change
(1.7
)%
Estimate for uncollectable revenues
(recovery)
$
3,147
$
(3,719
)
Same-center NOI for nine months ended September 30, 2023,
declined by $5.4 million or 1.7% from the prior-year period. The
decline was driven by a $6.9 million unfavorable variance in the
estimate for uncollectable revenues and a $3.1 million decline in
percentage rents. Operating expenses were generally flat.
PORTFOLIO OPERATIONAL RESULTS Occupancy(1):
As of September 30,
2023
2022
Total portfolio
90.8%
90.5%
Malls, Lifestyle Centers and Outlet
Centers:
Total malls
89.2%
88.7%
Total lifestyle centers
92.6%
90.6%
Total outlet centers
90.3%
90.9%
Total same-center malls, lifestyle centers
and outlet centers
89.7%
89.1%
All Other:
Total open-air centers
95.0%
94.7%
Total other
82.5%
93.0%
(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.
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
September 30,
Nine Months Ended
September 30,
2023
2023
All Property Types
(4.0)%
1.2%
Stabilized Malls, Lifestyle Centers and
Outlet Centers
(4.6)%
(0.0)%
New leases
26.9%
25.6%
Renewal leases
(6.5)%
(1.9)%
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
September 30,
2023
2022
% Change
Mall, Lifestyle Center and Outlet Center
same-center sales per square foot
$
420
$
440
(4.5)%
DIVIDEND On November 8, 2023, CBL’s Board of Directors
declared a regular quarterly cash dividend for the three months
ended December 31, 2023, of $0.375 per share. The dividend, which
equates to an annual dividend payment of $1.50 per share, is
payable on December 29, 2023, to shareholders of record as of
December 12, 2023.
FINANCING ACTIVITY Year-to-date, CBL has completed more
than $575.0 million in financing activity, successfully addressing
all 2023 final loan maturities. Additionally, as of November 2,
2023, the limited guaranty provided by the Operating Partnership on
the Secured Term Loan was eliminated and the loan became fully
non-recourse.
In October, CBL along with its 50% joint venture partner,
Horizon Group Properties, closed a new $79.3 million loan ($39.7
million at CBL’s 50% share) secured by The Outlet Shoppes of
Atlanta, the premier outlet shopping destination located in
Woodstock, GA. The new non-recourse ten-year loan bears a fixed
interest-only rate of 7.85% and replaces two loans with an
aggregate balance of $69.5 million (at 100%) that were set to
mature in November 2023.
In October, CBL and it's 35% joint venture partner closed on the
extension and modification of the loan secured by The Outlet
Shoppes at Laredo in Laredo, TX. The loan was modified to reduce
the principal balance to $33.98 million and add an additional
one-year extension option through June 2025. The interest rate of
SOFR plus 325 basis points remained the same.
In October, CBL exercised its option to extend the $17.6 million
recourse loan secured by the Brookfield Square Anchor Redevelopment
to December 2024. In connection with the extension, CBL made the
optional election to reduce the outstanding principal balance by
$2.0 million.
In November, CBL and the lender of the loan secured by Volusia
Mall in Daytona Beach, FL, closed on the modification and extension
of the loan. The loan was modified to apply escrow balances to
reduce the principal balance by $1.7 million to $36.7 million and
extend the maturity date two years to May 2026.
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 September,
WestGate Mall was placed into receivership and deconsolidated.
STOCK REPURCHASE PROGRAM ACTIVITY On August 10, 2023, CBL
announced that its Board of Directors authorized a stock repurchase
program for the Company to buy up to $25.0 million of its common
stock. Purchases may be made through the program by August 10,
2024. Year-to-date, CBL had repurchased 51,966 shares at an average
price of $21.30 per share under the program.
DISPOSITIONS During the third quarter 2023, CBL completed
the sale of two land parcels generating $3.6 million in gross
proceeds at CBL's share. Year-to-date through the second quarter
end, CBL has grossed more than $8.9 million from dispositions.
DEVELOPMENT AND REDEVELOPMENT ACTIVITY Detailed project
information is available in CBL’s Financial Supplement for Q3 2023,
which can be found in the Invest – Financial Reports section of
CBL’s website at cblproperties.com.
OUTLOOK AND GUIDANCE Based on third quarter 2023 results
and Management's expectations for the remainder 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
(0.79
)
(0.33
)
Depreciation and amortization
6.43
6.43
Dividends allocable to unvested restricted
stock
0.03
0.03
Noncontrolling interest in earnings of
Operating Partnership
(0.02
)
(0.01
)
Debt discount accretion, net of
noncontrolling interests' share
1.93
1.93
Adjustment for unconsolidated affiliates
with negative investment
(0.04
)
(0.04
)
Adjustment for litigation settlement
(0.07
)
(0.07
)
Non-cash default interest expense
0.03
0.03
Gain on deconsolidation
(1.50
)
(1.50
)
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
$45 million
2023 Estimated development/redevelopment
expenditures
$15 million
$18 million
2023 Estimated principal amortization
(including est. term loan ECF)
$75 million
$85 million
Total Estimate
$130 million
$148 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
REVENUES:
Rental revenues
$
124,783
$
131,642
$
379,949
$
398,806
Management, development and leasing
fees
1,840
1,783
6,096
5,338
Other
2,728
2,855
9,532
9,256
Total revenues
129,351
136,280
395,577
413,400
EXPENSES:
Property operating
(22,621
)
(24,390
)
(68,742
)
(69,046
)
Depreciation and amortization
(45,118
)
(61,050
)
(148,129
)
(194,469
)
Real estate taxes
(13,794
)
(13,880
)
(43,063
)
(42,569
)
Maintenance and repairs
(8,487
)
(10,272
)
(30,002
)
(31,068
)
General and administrative
(14,398
)
(14,625
)
(49,783
)
(51,149
)
Loss on impairment
—
—
—
(252
)
Litigation settlement
2,060
36
2,178
182
Other
—
—
(198
)
(834
)
Total expenses
(102,358
)
(124,181
)
(337,739
)
(389,205
)
OTHER INCOME (EXPENSES):
Interest and other income
3,628
152
9,260
1,216
Interest expense
(42,891
)
(37,652
)
(130,588
)
(183,428
)
Gain on deconsolidation
19,728
—
47,879
36,250
Loss on available-for-sale securities
—
(39
)
—
(39
)
Gain on sales of real estate assets
3,414
3,528
4,896
3,547
Reorganization items, net
—
1,220
—
262
Income tax provision
(1,263
)
(2,422
)
(1,381
)
(2,751
)
Equity in earnings of unconsolidated
affiliates
3,266
5,702
2,822
16,308
Total other expenses
(14,118
)
(29,511
)
(67,112
)
(128,635
)
Net income (loss)
12,875
(17,412
)
(9,274
)
(104,440
)
Net (income) loss attributable to
noncontrolling interests in:
Operating Partnership
6
(25
)
6
34
Other consolidated subsidiaries
381
3,143
4,001
8,002
Net income (loss) attributable to the
Company
13,262
(14,294
)
(5,267
)
(96,404
)
Earnings allocable to unvested restricted
stock
(305
)
(216
)
(837
)
(426
)
Net income (loss) attributable to
common shareholders
$
12,957
$
(14,510
)
$
(6,104
)
$
(96,830
)
Basic and diluted per share data
attributable to common shareholders:
Basic earnings per share
$
0.41
$
(0.47
)
$
(0.19
)
$
(3.26
)
Diluted earnings per share
0.41
(0.47
)
(0.19
)
(3.26
)
Weighted-average basic shares
31,305
30,973
31,307
29,725
Weighted-average diluted shares
31,305
30,973
31,307
29,725
The Company's reconciliation of net
income (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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net income (loss) attributable to common
shareholders
$
12,957
$
(14,510
)
$
(6,104
)
$
(96,830
)
Noncontrolling interest in loss of
Operating Partnership
(6
)
25
(6
)
(34
)
Earnings allocable to unvested restricted
stock
305
216
837
426
Depreciation and amortization expense
of:
Consolidated properties
45,118
61,050
148,129
194,469
Unconsolidated affiliates
4,192
3,665
13,263
21,004
Non-real estate assets
(221
)
(123
)
(673
)
(524
)
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(562
)
(829
)
(1,935
)
(2,666
)
Loss on impairment, net of taxes
—
—
—
186
Gain on depreciable property
—
—
—
(629
)
FFO allocable to Operating Partnership
common unitholders
61,783
49,494
153,511
115,402
Debt discount accretion, including our
share of unconsolidated affiliates and net of noncontrolling
interests' share (1)
14,689
25,425
47,879
153,924
Adjustment for unconsolidated affiliates
with negative investment (2)
(3,659
)
(13,116
)
(1,180
)
(36,123
)
Senior secured notes fair value adjustment
(3)
—
—
—
(395
)
Litigation settlement (4)
(2,060
)
(36
)
(2,178
)
(182
)
Non-cash default interest expense (5)
191
(1,585
)
972
(19,805
)
Gain on deconsolidation (6)
(19,728
)
—
(47,879
)
(36,250
)
Loss on available-for-sale securities
—
39
—
39
Reorganization items, net (7)
—
(1,220
)
—
(262
)
FFO allocable to Operating Partnership
common unitholders, as adjusted
$
51,216
$
59,001
$
151,125
$
176,348
FFO per diluted share
$
1.93
$
1.55
$
4.79
$
3.78
FFO, as adjusted, per diluted
share
$
1.60
$
1.85
$
4.72
$
5.77
Weighted-average common and potential
dilutive common shares outstanding with Operating Partnership units
fully converted
32,054
31,831
32,018
30,568
(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 nine-month periods
ended September 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 nine months ended September
30, 2023 includes default interest on loans past their maturity
dates. The three and nine months ended September 30, 2022 includes
the reversal of default interest expense when waivers or
forbearance agreements were obtained.
(6)
For the three and nine months ended
September 30, 2023, the Company deconsolidated WestGate Mall due to
a loss of control when the property was placed into receivership in
connection with the foreclosure process. For the nine months ended
September 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
nine months ended September 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Diluted EPS attributable to common
shareholders
$
0.41
$
(0.47
)
$
(0.19
)
$
(3.26
)
Add amounts per share included in FFO:
Unvested restricted stock
0.02
0.02
0.02
0.09
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
1.50
2.00
4.96
6.96
Loss on impairment, net of taxes
—
—
—
0.01
Gain on depreciable property
—
—
—
(0.02
)
FFO per diluted share
$
1.93
$
1.55
$
4.79
$
3.78
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees
$
127
$
1,572
$
2,081
$
4,020
Straight-line rental income adjustment
$
2,053
$
2,058
$
5,408
$
9,400
Gain on outparcel sales, net of taxes and
noncontrolling interests' share
$
3,073
$
3,561
$
5,378
$
3,580
Net amortization of acquired above- and
below-market leases
$
(4,665
)
$
(5,438
)
$
(15,110
)
$
(16,487
)
Income tax provision
$
(1,263
)
$
(2,422
)
$
(1,381
)
$
(2,751
)
Abandoned projects expense
$
—
$
—
$
(17
)
$
(834
)
Interest capitalized
$
125
$
156
$
342
$
531
Estimate of uncollectable revenues
$
(2,692
)
$
(368
)
$
(4,194
)
$
3,850
As of September 30,
2023
2022
Straight-line rent receivable
$
21,205
$
12,343
Same-center Net Operating Income
(Dollars in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net income (loss)
$
12,875
$
(17,412
)
$
(9,274
)
$
(104,440
)
Adjustments:
Depreciation and amortization
45,118
61,050
148,129
194,469
Depreciation and amortization from
unconsolidated affiliates
4,192
3,665
13,263
21,004
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(562
)
(829
)
(1,935
)
(2,666
)
Interest expense
42,891
37,652
130,588
183,428
Interest expense from unconsolidated
affiliates
18,058
25,297
54,114
65,454
Noncontrolling interests' share of
interest expense in other consolidated subsidiaries
(1,106
)
(2,688
)
(5,067
)
(7,783
)
Abandoned projects expense
—
—
17
834
Gain on sales of real estate assets, net
of taxes and noncontrolling interests' share
(3,073
)
(3,528
)
(4,610
)
(3,547
)
Gain on sales of real estate assets of
unconsolidated affiliates
—
(33
)
(768
)
(662
)
Adjustment for unconsolidated affiliates
with negative investment
(3,659
)
(13,116
)
(1,180
)
(36,123
)
Gain on deconsolidation
(19,728
)
—
(47,879
)
(36,250
)
Loss on available-for-sale securities
—
39
—
39
Loss on impairment, net of taxes
—
—
—
186
Litigation settlement
(2,060
)
(36
)
(2,178
)
(182
)
Reorganization items, net
—
(1,220
)
—
(262
)
Income tax provision
1,263
2,422
1,381
2,751
Lease termination fees
(127
)
(1,572
)
(2,081
)
(4,020
)
Straight-line rent and above- and
below-market lease amortization
2,612
3,380
9,702
7,087
Net loss attributable to noncontrolling
interests in other consolidated subsidiaries
381
3,143
4,001
8,002
General and administrative expenses
14,398
14,625
49,783
51,149
Management fees and non-property level
revenues
(4,709
)
(683
)
(14,727
)
(1,732
)
Operating Partnership's share of
property NOI
106,764
110,156
321,279
336,736
Non-comparable NOI
(315
)
(4,083
)
(2,233
)
(12,261
)
Total same-center NOI (1)
$
106,449
$
106,073
$
319,046
$
324,475
Total same-center NOI percentage
change
0.4
%
(1.7
)%
(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 September 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 September 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Malls
$
72,878
$
73,562
$
218,575
$
227,255
Outlet centers
5,125
4,956
15,539
14,486
Lifestyle centers
8,913
8,415
26,586
25,685
Open-air centers
14,034
13,534
41,596
39,793
Outparcels and other
5,499
5,606
16,750
17,256
Total same-center NOI (1)
$
106,449
$
106,073
$
319,046
$
324,475
Percentage Change:
Malls
(0.9
)%
(3.8
)%
Outlet centers
3.4
%
7.3
%
Lifestyle centers
5.9
%
3.5
%
Open-air centers
3.7
%
4.5
%
Outparcels and other
(1.9
)%
(2.9
)%
Total same-center NOI (1)
0.4
%
(1.7
)%
(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 September 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 September 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 September 30,
2023
Fixed Rate
Variable
Rate
Total per
Debt
Schedule
Unamortized
Deferred
Financing
Costs
Unamortized
Debt
Discounts (1)
Total
Consolidated debt
$
925,963
$
1,036,975
$
1,962,938
$
(14,264
)
$
(48,201
)
$
81,900,473
Noncontrolling interests' share of
consolidated debt
(25,122
)
(13,072
)
(38,194
)
274
4,192
(33,728
)
Company's share of unconsolidated
affiliates' debt
618,477
62,256
680,733
(3,185
)
—
677,548
Other debt (2)
69,783
—
69,783
—
—
69,783
Company's share of consolidated,
unconsolidated and other debt
$
1,589,101
$
1,086,159
$
2,675,260
$
(17,175
)
$
(44,009
)
$
2,614,076
Weighted-average interest rate
5.18
%
8.40
%
6.49
%
As of September 30,
2022
Fixed Rate
Variable
Rate
Total per
Debt
Schedule
Unamortized
Deferred
Financing
Costs
Unamortized
Debt
Discounts (1)
Total
Consolidated debt
$
1,049,307
$
1,074,839
$
2,124,146
$
(16,621
)
$
(90,821
)
$
2,016,704
Noncontrolling interests' share of
consolidated debt
(32,594
)
(13,493
)
(46,087
)
85
13,548
(32,454
)
Company's share of unconsolidated
affiliates' debt
624,670
73,356
698,026
(2,294
)
—
695,732
Other debt (2)
61,647
—
61,647
—
—
61,647
Company's share of consolidated,
unconsolidated and other debt
$
1,703,030
$
1,134,702
$
2,837,732
$
(18,830
)
$
(77,273
)
$
2,741,629
Weighted-average interest rate
4.85
%
5.53
%
5.12
%
(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)
September 30,
December 31,
2023
2022
ASSETS
Real estate assets:
Land
$
585,476
$
596,715
Buildings and improvements
1,208,266
1,198,597
1,793,742
1,795,312
Accumulated depreciation
(205,547
)
(136,901
)
1,588,195
1,658,411
Developments in progress
6,555
5,576
Net investment in real estate assets
1,594,750
1,663,987
Cash and cash equivalents
34,509
44,718
Restricted cash
85,167
97,231
Available-for-sale securities - at fair
value (amortized cost of $258,507 and $293,476 as of September 30,
2023 and December 31, 2022, respectively)
258,254
292,422
Receivables:
Tenant
36,927
40,620
Other
3,786
3,876
Investments in unconsolidated
affiliates
73,434
77,295
In-place leases, net
175,579
247,497
Above market leases, net
130,047
171,265
Intangible lease assets and other
assets
43,898
39,332
$
2,436,351
$
2,678,243
LIABILITIES AND EQUITY
Mortgage and other indebtedness, net
$
1,900,473
$
2,000,186
Below market leases, net
86,167
110,616
Accounts payable and accrued
liabilities
120,741
200,312
Total liabilities
2,107,381
2,311,114
Shareholders' equity:
Common stock, $.001 par value, 200,000,000
shares authorized, 32,014,631 and 31,780,075 issued and outstanding
as of September 30, 2023 and December 31, 2022, respectively (in
each case, excluding 34 treasury shares)
32
32
Additional paid-in capital
717,559
710,497
Accumulated other comprehensive income
(loss)
957
(1,054
)
Accumulated deficit
(380,258
)
(338,934
)
Total shareholders' equity
338,290
370,541
Noncontrolling interests
(9,320
)
(3,412
)
Total equity
328,970
367,129
$
2,436,351
$
2,678,243
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109025799/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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