Results in-line; Full-Year Guidance Range
Maintained
CBL Properties (NYSE:CBL) announced results for the first
quarter ended March 31, 2019. 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 March 31, 2019
2018 % Net loss attributable to common
shareholders per diluted share
$ (0.29 ) $
(0.06 ) (383.3 )% Funds from Operations ("FFO") per diluted share
$ 0.22 $ 0.42 (47.6 )% FFO, as
adjusted, per diluted share (1)
$ 0.30 $ 0.42
(28.6 )% (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 10 of this news release.
KEY TAKEAWAYS:
- CBL has made tremendous progress on its
anchor replacement program, with nearly two dozen anchor
replacements recently opened or pending (complete list
follows).
- In January 2019, CBL announced a new
$1.185 billion secured credit facility maturing in July 2023.
- FFO per diluted share, as adjusted, was
$0.30 for the first quarter 2019, compared with $0.42 per share for
the first quarter 2018. First quarter 2019 FFO per share was
impacted by approximately $0.02 per share higher G&A expense,
primarily related to legal and third party fees incurred for the
$500 million term loan that closed in January and litigation
expense, $0.01 per share of lower outparcel sales, $0.02 per share
of dilution from asset sales completed in 2018 and year-to-date and
$0.05 per share of lower property NOI.
- Total Portfolio Same-center NOI
declined 5.3% for the three months ended
March 31, 2019.
- Portfolio occupancy increased 20 basis
points to 91.3% as of March 31, 2019, compared with 91.1% as
of March 31, 2018. Same-center mall occupancy was 89.7% as of
March 31, 2019, a 20 basis point improvement compared with
89.5% as of March 31, 2018.
- Same-center sales per square foot for
the stabilized mall portfolio for the twelve-months ended
March 31, 2019, of $377 per square foot were flat compared
with the prior-year period.
- Year-to-date, CBL has completed gross
asset sales totaling $51 million.
"First quarter places CBL on-track to achieve results within our
full-year guidance range," commented Stephen Lebovitz, chief
executive officer. "We signed new leases at an average increase of
9.3% over the previous lease, and portfolio occupancy increased 20
basis points year-over-year. Our leasing efforts are successfully
diversifying our tenant mix with nearly 80% of total new leases
signed in the first quarter with non-apparel tenants. We have 22
anchor replacements committed, with six already open and many more
under negotiation, demonstrating tremendous progress on our anchor
replacement program. This program will help stabilize our income as
we replace lost revenues, mitigate co-tenancy exposure and deliver
new uses that drive traffic and strengthen the entire property.
Anchor replacements such as the Stadium Live! Casino at
Westmoreland Mall and Shoprite Supermarket at Stroud Mall are
tangible examples of how we are transforming our centers with
minimal cash investment by CBL.
“We expect ongoing pressure from retail bankruptcies and certain
underperforming retailers in 2019. However, the market is severely
discounting the underlying strength and potential of our
properties, the progress we are making on our strategy and the
determination of our team. We are pushing every day to achieve our
top priority of stabilizing future revenues. We have addressed our
significant maturities for 2019, including the extension of our
credit facility in January, which provides us with both time and
flexibility to execute our plan. Given the overall environment, we
have a heightened sense of urgency across our company as we work
together to execute on our strategic objectives and our goal of
ultimately returning CBL to its proper valuation."
Net loss attributable to common shareholders for the first
quarter 2019 was $50.2 million, or a loss of $0.29 per diluted
share, compared with a net loss of $10.3 million, or a loss of
$0.06 per diluted share, for the first quarter 2018. Net loss for
the first quarter 2019 was impacted by $88.15 million of litigation
settlement expense.
FFO allocable to common shareholders, as adjusted, for the first
quarter 2019 was $52.4 million, or $0.30 per diluted share,
compared with $72.2 million, or $0.42 per diluted share, for the
first quarter 2018. FFO allocable to the Operating Partnership
common unitholders, as adjusted, for the first quarter 2019 was
$60.6 million compared with $83.8 million for the first quarter
2018.
Percentage change in same-center Net Operating Income
("NOI")(1):
Three Months Ended March 31,
2019 Portfolio same-center NOI
(5.3)% Mall same-center
NOI
(5.8)% (1) CBL's definition of same-center NOI excludes
the impact of lease termination fees and certain non-cash items of
straight-line rents, write-offs of landlord inducements and net
amortization of acquired above and below market leases.
Major variances impacting same-center NOI for the quarter ended
March 31, 2019, include:
- Same-center NOI declined $8.0 million,
due to a $13.4 million decrease in revenues offset by a
$5.4 million decline in operating expenses.
- Rental revenues declined $13.4 million,
driven by a $0.2 million decline in percentage rents, a $5.9
million decline in tenant reimbursements and real estate tax
reimbursements and a $7.3 million decline in minimum and other
rents, including $1.6 million in uncollectable revenue.
Uncollectable revenue represents amounts formerly described as bad
debt expense, which were included in property operating expense in
prior periods.
- Property operating expenses declined
$3.0 million compared with the prior year, substantially related to
$2.1 million in bad debt expense included in the prior year period.
These amounts for the current period are included in rental
revenues as uncollectable revenue. Maintenance and repair expenses
increased $0.7 million. Real estate tax expenses declined $1.7
million.
PORTFOLIO OPERATIONAL RESULTS
Occupancy(1):
As of March 31, 2019
2018 Portfolio occupancy
91.3% 91.1% Mall portfolio
89.4% 89.3% Same-center malls
89.7% 89.5% Stabilized
malls
89.7% 89.5% Non-stabilized malls (2)
76.4%
77.0% Associated centers
96.9% 97.8% Community centers
97.6% 97.4%
(1)
Occupancy for malls represents percentage
of mall store gross leasable area under 20,000 square feet
occupied. Occupancy for associated and community centers represents
percentage of gross leasable area occupied.
(2)
Represents occupancy for The Outlet
Shoppes at Laredo as of March 31, 2019 and March 31, 2018.
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 EndedMarch 31, 2019
Stabilized Malls (9.4 )% New leases 9.3 % Renewal leases (12.3 )%
Same-Center Sales Per Square Foot for Mall Tenants 10,000
Square Feet or Less:
Twelve Months Ended March 31,
2019 2018 % Change Stabilized
mall same-center sales per square foot
$ 377 $ 377 —%
Stabilized mall sales per square foot
$ 377 $ 373
1.1%
DISPOSITIONS
Year-to-date, CBL has closed on $51.0 million in asset sales
including the sale of Cary Towne Center in Cary, NC, for $31.5
million. Proceeds from the sale were used to satisfy a portion of
the $43.7 million outstanding non-recourse loan secured by the
property. The remaining principal balance was forgiven.
Additionally, in April, CBL completed the sale of Honey Creek Mall
in Terre Haute, IN, for $14.6 million to Out of the Box Ventures, a
subsidiary of Lionheart Capital. CBL will provide third party
leasing and management services for Cary Towne Center and Honey
Creek Mall.
Property
Location Date Closed Gross Sales Price (M)
Various parcels/land Various Various $ 4.9 Cary Towne Center Cary,
NC January $ 31.5 Honey Creek Mall Terre Haute, IN April $ 14.6
Total $ 51.0
FINANCING ACTIVITY
In January 2019, CBL closed on a new $1.185 billion senior
secured facility (the “Facility”), which includes a fully-funded
$500 million term loan (the “Term Loan”) and a revolving line of
credit (the ”Line of Credit”) with total borrowing capacity of $685
million. The Facility matures in July 2023 and bears a floating
interest rate of 225 basis points over LIBOR. The Term Loan will be
reduced by $35 million per year, paid in quarterly installments.
The Facility replaces all of the Company’s prior unsecured bank
facilities, which totaled $1.795 billion.
In January, CBL completed the transfer of Acadiana Mall in
Lafayette, LA, to the holder of the note in exchange for
extinguishment of the $119.8 million loan.
In April, CBL closed a new $50 million non-recourse loan secured
by Volusia Mall in Daytona, FL, for a term of five years at a fixed
interest rate of 4.56%. CBL concurrently retired the existing
cross-collateralized loans secured by Honey Creek Mall in Terre
Haute, IN, and Volusia Mall in Daytona, FL, which aggregated to
$64.0 million and bore an interest rate of 8%. CBL used proceeds
from the new loan as well as the sale of Honey Creek Mall to retire
the maturing loans.
CBL has entered into discussion with the lender for the $67.2
million loan secured by Greenbrier Mall, which matures in December
2019. CBL's results for the first quarter 2019 included a $22.8
million loss on impairment of real estate related to the write down
of the carrying value of Greenbrier Mall to the property's
estimated fair value. The impairment was primarily the result of a
change in the anticipated hold period as well as declines in the
property's cash flow.
ANCHOR REPLACEMENT PROGRESS
Anchor replacements recently opened or pending include (complete
list and additional information can be found in the financial
supplement):
Property Prior Tenant
New Tenant(s) Status Cherryvale Mall
Bergner's Choice Home Center Open Eastland Mall JCPenney H&M,
Planet Fitness Open Jefferson Mall Macy's Round1 Open Northwoods
Mall Sears Burlington Open Kentucky Oaks Mall Sears Burlington,
Ross Dress for Less Open West Towne Sears Dave & Busters, Total
Wine Open Hanes Mall Shops Dave & Busters Opening May 2019
Parkdale Mall Macy's Dick's, Five Below, HomeGoods Opening May 2019
Brookfield Square Sears Marcus Theaters, Whirlyball Opening fall
2019 South County Center Sears Round1 Construction in 2019 Dakota
Square Herberger's Ross Dress for Less Construction in 2019
Imperial Valley Sears Hobby Lobby Construction in 2019 Laurel Park
Place Carson's Dunham's Sports Construction in 2019 Kentucky Oaks
Mall Elder Beerman HomeGoods Construction in 2019 Westmoreland Mall
BonTon Stadium Live! Casino Construction in 2019 Meridian Mall
Younkers High Kaliber Karts Construction in 2019 Stroud Mall Boston
Shoprite Construction in 2019 Cherryvale Mall Sears Tilt
Construction in 2019 York Galleria Sears Penn National Casino
Construction in 2020 Hamilton Place Sears
Dick's Sporting Goods, Dave &
Busters,ALoft Hotel, office
Opening 2020 Richland Mall Sears Dillard's Opening 2020 Hanes Mall
Sears Novant Health Opening TBD
LITIGATION SETTLEMENT
In April, CBL entered into a settlement agreement, which
replaced and superseded the term sheet entered into in March 2019,
in the class action lawsuit filed on March 16, 2016, in the United
States District Court for the Middle District of Florida (the
"Court"). The settlement agreement was preliminarily approved by
the Court on April 24, 2019, but remains subject to the final
approval order. CBL accrued in its financial statements for the
first quarter of 2019, an amount equal to the maximum expected
settlement of approximately $88.15 million. This amount will be
reduced in subsequent periods to reflect amounts actually paid
through the claims process and credits actually made or as CBL is
relieved of liability pursuant to the terms of the settlement
agreement.
OUTLOOK AND GUIDANCE
Based on year-to-date results and expectations for the first
quarter 2019, CBL anticipates achieving 2019 FFO, as adjusted,
within its previously issued guidance range of $1.41 - $1.46 per
diluted share. Guidance incorporates a reserve in the range of $5.0
- $15.0 million (the "Reserve") for potential future unbudgeted
loss in rent from tenant bankruptcies, store closures or lease
modifications that may occur in 2019. Based on bankruptcy and
leasing activity year-to-date, including the impact of any
co-tenancy, CBL currently expects to utilize approximately $6 - $8
million of the Reserve. Key assumptions underlying guidance are as
follows:
Low High 2019 FFO, as
adjusted, per share (includes the Reserve) 1.41 1.46 2019 Change in
Same-Center NOI ("SC NOI") (Includes the Reserve) (7.75)% (6.25)%
Reserve for unbudgeted lost rents included in SC NOI and FFO $15.0
million $5.0 million Gains on outparcel sales $10.0 million $15.0
million
Reconciliation of GAAP net income (loss) to 2019 FFO, as
adjusted, per share guidance:
Low High Expected diluted
earnings per common share $ (0.18 ) $ (0.12 ) Adjust to fully
converted shares from common shares 0.03 0.02
Expected earnings per diluted, fully converted common share (0.15 )
(0.10 ) Add: depreciation and amortization 1.38 1.38 Add: loss on
impairment 0.12 0.12 Add: noncontrolling interest in loss of
Operating Partnership (0.02 ) (0.02 ) Expected FFO, as adjusted,
per diluted, fully converted common share $ 1.33 $ 1.38 Add:
Litigation Settlement 0.44 0.44 Adjustment for certain significant
items (0.36 ) (0.36 ) Expected adjusted FFO per diluted, fully
converted common share $ 1.41 $ 1.46
INVESTOR CONFERENCE CALL AND WEBCAST
CBL Properties will host a conference call on Wednesday, May 1,
2019, at 11:00 a.m. ET. To access this interactive
teleconference, dial (888) 317-6003 or (412) 317-6061 and
enter the confirmation number, 9433932. A replay of the conference
call will be available through May 8, 2019, by dialing
(877) 344-7529 or (412) 317-0088 and entering the
confirmation number, 10128914.
The Company will also provide an online webcast and rebroadcast
of its first quarter 2019 earnings release conference call. The
live broadcast of the quarterly conference call will be available
online at cblproperties.com on Wednesday, May 1, 2019, beginning at
11:00 a.m. ET. The online replay will follow shortly after the
call.
To receive the CBL Properties first quarter earnings release and
supplemental information, please visit the Invest section of our
website at cblproperties.com.
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 portfolio is comprised of
114 properties totaling 71.1 million square feet across 26 states,
including 71 high-quality enclosed, outlet and open-air retail
centers and 11 properties managed for third parties. CBL
continuously strengthens its company and portfolio through active
management, aggressive leasing and profitable reinvestment in its
properties. For more information visit cblproperties.com.
ADOPTION OF NEW LEASE ACCOUNTING STANDARD
The Company adopted Accounting Standards Codification ("ASC")
842, Leases, effective January 1, 2019, which resulted in the
Company revising the presentation of rental revenues in its
consolidated statements of operations. In the past, certain
components of rental revenues were shown separately in the
consolidated statements of operations. Upon the adoption of ASC
842, these amounts have been combined into a single line item.
Please see the Company’s Supplemental Financial and Operating
Information located in the Invest section of the Company’s website
for more information regarding the components of rental
revenues.
NON-GAAP FINANCIAL MEASURESFunds 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 less dividends on preferred stock of the
Company or distributions on preferred units of the Operating
Partnership, as applicable. 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 presents both FFO allocable to Operating Partnership
common unitholders and FFO allocable to common shareholders, as it
believes that both are useful performance measures. 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. The Company believes FFO allocable to its
common shareholders is a useful performance measure because it is
the performance measure that is most directly comparable to net
income (loss) attributable to its common shareholders.
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. The Company
then applies a percentage to FFO of the Operating Partnership
common unitholders to arrive at FFO allocable to its common
shareholders. The percentage is computed by taking the
weighted-average number of common shares outstanding for the period
and dividing it by the sum of the weighted-average number of common
shares and the weighted-average number of Operating Partnership
units held by noncontrolling interests during the period.
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 10 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 is located at the
end of this earnings release.
Pro Rata Share of Debt
The Company presents debt based on its pro rata ownership share
(including 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.
CBL & Associates Properties, Inc. Consolidated
Statements of Operations (Unaudited; in thousands, except per
share amounts)
Three Months
EndedMarch 31, 2019 2018
REVENUES (1): Rental revenues
$
190,980 $ 212,729 Management, development and leasing fees
2,523 2,721 Other
4,527 4,750 Total
revenues
198,030 220,200
OPERATING
EXPENSES: Property operating
(28,980 ) (32,826 )
Depreciation and amortization
(69,792 ) (71,750 )
Real estate taxes
(19,919 ) (21,848 ) Maintenance and
repairs
(12,776 ) (13,179 ) General and
administrative
(22,007 ) (18,304 ) Loss on impairment
(24,825 ) (18,061 ) Litigation settlement
(88,150 ) — Other
— (94 ) Total
operating expenses
(266,449 ) (176,062 )
OTHER INCOME (EXPENSES): Interest and other income
489 213 Interest expense
(53,998 ) (53,767 )
Gain on extinguishment of debt
71,722 — Gain on sales of
real estate assets
228 4,371 Income tax benefit (provision)
(139 ) 645 Equity in earnings of unconsolidated
affiliates
3,308 3,739 Total other income
(expenses)
21,610 (44,799 )
Net loss
(46,809 ) (661 ) Net (income) loss attributable to
noncontrolling interests in: Operating Partnership
7,758
1,665 Other consolidated subsidiaries
75 (101 )
Net income (loss) attributable to the Company (38,976
) 903 Preferred dividends
(11,223 ) (11,223 )
Net loss attributable to common shareholders $
(50,199 ) $ (10,320 )
Basic and diluted per
share data attributable to common shareholders: Net loss
attributable to common shareholders
$ (0.29 )
$ (0.06 )
Weighted-average common and potential
dilutive common shares outstanding
173,252 171,943
(1)
See "Implementation of Lease Accounting
Standard" on page 7 for further information on the presentation of
rental revenues in accordance with the new standard adopted
effective January 1, 2019.
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 EndedMarch 31,
2019 2018 Net loss attributable to
common shareholders
$ (50,199 ) $ (10,320 )
Noncontrolling interest in loss of Operating Partnership
(7,758 ) (1,665 ) Depreciation and amortization
expense of: Consolidated properties
69,792 71,750
Unconsolidated affiliates
10,666 10,401 Non-real estate
assets
(897 ) (921 ) Noncontrolling interests' share
of depreciation and amortization
(2,157 ) (2,166 )
Loss on impairment
24,825 18,061
Gain on depreciable
property (242 ) (2,236 )
FFO allocable to
Operating Partnership common unitholders 44,030 82,904
Litigation settlement, net of taxes (1)
87,667 — Non-cash
default interest expense (2)
542 916 Gain on extinguishment
of debt (3)
(71,722 ) —
FFO allocable to
Operating Partnership common unitholders, as adjusted $
60,517 $ 83,820
FFO per diluted
share $ 0.22 $ 0.42
FFO,
as adjusted, per diluted share $ 0.30 $
0.42 Weighted-average common and potential dilutive
common shares outstanding with Operating Partnership units fully
converted
200,010 199,694
(1)
The three months ended March 31, 2019 is
comprised of the accrued maximum expense related to the proposed
settlement of a class action lawsuit.
(2)
The three months ended March 31, 2019
includes default interest expense related to Acadiana Mall and Cary
Towne Center. The three months ended March 31, 2018 includes
default interest expense related to Acadiana Mall.
(3)
The three months ended March 31, 2019
includes a gain on extinguishment of debt related to the
non-recourse loan secured by Acadiana Mall, which was conveyed to
the lender in the first quarter of 2019, and a gain on
extinguishment of debt related to the non-recourse loan secured by
Cary Towne Center, which was sold in the first quarter of 2019.
The reconciliation of diluted EPS to FFO per diluted share is as
follows:
Three Months EndedMarch 31, 2019
2018 Diluted EPS attributable to common
shareholders $ (0.29 ) $ (0.06 ) 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
0.39 0.40 Loss
on impairment
0.12 0.09 Gain on depreciable property
— (0.01 )
FFO per diluted share $
0.22 $ 0.42
The reconciliations of FFO allocable to Operating Partnership
common unitholders to FFO allocable to common shareholders,
including and excluding the adjustments noted above, are as
follows:
Three Months EndedMarch 31, 2019
2018 FFO allocable to Operating Partnership
common unitholders $ 44,030 $ 82,904 Percentage
allocable to common shareholders (1)
86.62 % 86.10 %
FFO allocable to common shareholders $ 38,139
$ 71,380
FFO allocable to Operating
Partnership common unitholders, as adjusted $
60,517 $ 83,820 Percentage allocable to common shareholders
(1)
86.62 % 86.10 %
FFO allocable to common
shareholders, as adjusted $ 52,420 $
72,169
(1)
Represents the weighted average number of
common shares outstanding for the period divided by the sum of the
weighted average number of common shares and the weighted average
number of Operating Partnership units outstanding during the
period. See the reconciliation of shares and Operating Partnership
units outstanding on page 16.
SUPPLEMENTAL FFO INFORMATION:
Three Months EndedMarch 31, 2019
2018 Lease termination fees
$ 1,017 $ 6,261
Lease termination fees per share
$ 0.01 $ 0.03
Straight-line rental income
$ 237 $ (3,633 )
Straight-line rental income per share
$ — $ (0.02 )
Gains on outparcel sales
$ 618 $ 2,147 Gains
on outparcel sales per share
$ — $ 0.01 Net
amortization of acquired above- and below-market leases
$
808 $ 805 Net amortization of acquired above- and
below-market leases per share
$ — $ — Net
amortization of debt premiums and discounts
$ 324 $
107 Net amortization of debt premiums and discounts per share
$ — $ — Income tax benefit (provision)
$ (139 ) $ 645 Income tax benefit (provision)
per share
$ — $ — Gain on extinguishment of
debt
$ 71,722 $ — Gain on extinguishment of debt per
share
$ 0.36 $ — Non-cash default interest
expense
$ (542 ) $ (916 ) Non-cash default
interest expense per share
$ — $ — Abandoned
projects expense
$ — $ (94 ) Abandoned projects
expense per share
$ — $ — Interest capitalized
$ 563 $ 587 Interest capitalized per share
$
— $ — Litigation settlement, net of taxes
$
(87,667 ) $ — Litigation settlement, net of taxes per
share
$ (0.44 ) $ —
As of March
31, 2019 2018 Straight-line rent receivable
$ 53,870 $ 58,244
Same-center Net Operating
Income
(Dollars in thousands)
Three Months EndedMarch 31,
2019 2018 Net loss $
(46,809 ) $ (661 )
Adjustments:
Depreciation and amortization
69,792 71,750 Depreciation and
amortization from unconsolidated affiliates
10,666 10,401
Noncontrolling interests' share of depreciation and amortization in
other consolidated subsidiaries
(2,157 ) (2,166 )
Interest expense
53,998 53,767 Interest expense from
unconsolidated affiliates
6,570 5,954 Noncontrolling
interests' share of interest expense in other consolidated
subsidiaries
(1,766 ) (1,851 ) Abandoned projects
expense
— 94 Gain on sales of real estate assets
(228
) (4,371 ) Gain on sales of real estate assets of
unconsolidated affiliates
(630 ) — Gain on
extinguishment of debt
(71,722 ) — Loss on impairment
24,825 18,061 Litigation settlement
88,150 — Income
tax (benefit) provision
139 (645 ) Lease termination fees
(1,017 ) (6,261 ) Straight-line rent and above- and
below-market lease amortization
(1,045 ) 2,828 Net
(income) loss attributable to noncontrolling interests in other
consolidated subsidiaries
75 (101 ) General and
administrative expenses
22,007 18,304 Management fees and
non-property level revenues
(2,666 ) (3,818 )
Operating Partnership's share of property NOI 148,182
161,285 Non-comparable NOI
(5,041 ) (10,105 )
Total same-center NOI (1) $ 143,141
$ 151,180
Total same-center NOI percentage
change (5.3 )%
Same-center Net Operating
Income
(Continued)
Three Months EndedMarch 31, 2019
2018 Malls
$ 127,920 $ 135,848
Associated centers
8,127 8,003 Community centers
5,483 5,395 Offices and other
1,611 1,934
Total same-center NOI (1) $ 143,141
$ 151,180
Percentage Change: Malls
(5.8
)% Associated centers
1.5 % Community centers
1.6 % Offices and other
(16.7 )%
Total same-center NOI (1) (5.3 )%
(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). Same-center 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 March 31, 2019,
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 March 31, 2019. New properties are excluded from
same-center NOI, until they meet this criteria. Properties excluded
from the same-center pool that would otherwise meet this criteria
are properties which are either 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 March 31, 2019 Fixed Rate
VariableRate
Total per DebtSchedule
UnamortizedDeferredFinancing Costs
Total Consolidated debt
$
2,971,830 $ 970,453 $
3,942,283 $ (20,083 ) $
3,922,200 Noncontrolling interests' share of consolidated
debt
(93,909 ) — (93,909 )
775 (93,134 ) Company's share of
unconsolidated affiliates' debt
547,494 84,404
631,898 (2,529 ) 629,369
Company's share of consolidated and unconsolidated debt
$ 3,425,415 $ 1,054,857
$ 4,480,272 $ (21,837 )
$ 4,458,435 Weighted-average interest rate
5.16 % 4.78 % 5.07 %
As of March 31, 2018 Fixed Rate
VariableRate
Total per DebtSchedule
UnamortizedDeferredFinancing Costs
Total Consolidated debt $ 3,110,446 $ 1,114,969 $ 4,225,415
$ (17,730 ) $ 4,207,685 Noncontrolling interests' share of
consolidated debt (76,785 ) (5,403 ) (82,188 ) 670 (81,518 )
Company's share of unconsolidated affiliates' debt 529,722
67,754 597,476 (2,319 ) 595,157
Company's share of consolidated and unconsolidated debt $ 3,563,383
$ 1,177,320 $ 4,740,703 $ (19,379 ) $
4,721,324 Weighted-average interest rate 5.19 % 3.23 % 4.70
%
Total Market Capitalization as of
March 31, 2019
(In thousands, except stock price)
SharesOutstanding Stock
Price (1)
Value Common stock and Operating Partnership units 200,220 $
1.55 $ 310,341 7.375% Series D Cumulative Redeemable Preferred
Stock 1,815 250.00 453,750 6.625% Series E Cumulative Redeemable
Preferred Stock 690 250.00 172,500 Total market equity 936,591
Company's share of total debt, excluding unamortized deferred
financing costs 4,480,272 Total market capitalization $ 5,416,863
(1)
Stock price for common stock and Operating
Partnership units equals the closing price of the common stock on
March 29, 2019. The stock prices for the preferred stocks represent
the liquidation preference of each respective series.
Reconciliation of Shares and Operating
Partnership Units Outstanding
(In thousands)
Three Months EndedMarch 31, Basic
Diluted 2019: Weighted-average shares -
EPS
173,252 173,252 Weighted-average Operating
Partnership units
26,758 26,758
Weighted-average shares - FFO
200,010 200,010
2018: Weighted-average shares - EPS 171,943 171,943
Weighted-average Operating Partnership units 27,751 27,751
Weighted-average shares - FFO 199,694 199,694
Dividend Payout Ratio
Three Months EndedMarch 31, 2019
2018 Weighted-average cash dividend per share
$ 0.08586 $ 0.20885 FFO, as adjusted, per diluted
fully converted share
$ 0.30 $ 0.42
Dividend payout ratio
28.6 % 49.7 %
Consolidated Balance Sheets
(Unaudited; in thousands, except share
data)
As of March 31, 2019
December 31, 2018 ASSETS Real estate
assets: Land
$ 786,011 $ 793,944 Buildings and
improvements
6,259,125 6,414,886
7,045,136 7,208,830 Accumulated depreciation
(2,478,821 ) (2,493,082 )
4,566,315 4,715,748
Held for sale
— 30,971 Developments in progress
56,273 38,807 Net investment in real estate
assets
4,622,588 4,785,526 Cash and cash equivalents
21,055 25,138 Receivables: Tenant, net of allowance for
doubtful accounts of $2,337 in 2018
71,662 77,788 Other, net
of allowance for doubtful accounts of $838 in 2018
9,858
7,511 Mortgage and other notes receivable
7,406 7,672
Investments in unconsolidated affiliates
277,357 283,553
Intangible lease assets and other assets
152,022
153,665
$ 5,161,948 $ 5,340,853
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND
EQUITY Mortgage and other indebtedness, net
$
3,922,199 $ 4,043,180 Accounts payable and accrued
liabilities
278,260 218,217 Liabilities related to assets
held for sale
— 43,716 Total liabilities
4,200,459 4,305,113 Commitments and
contingencies Redeemable noncontrolling interests
3,017
3,575 Shareholders' equity: Preferred stock, $.01 par
value, 15,000,000 shares authorized: 7.375% Series D Cumulative
Redeemable PreferredStock, 1,815,000 shares outstanding
18
18 6.625% Series E Cumulative Redeemable PreferredStock, 690,000
shares outstanding
7 7 Common stock, $.01 par value,
350,000,000 sharesauthorized, 173,461,916 and 172,656,458 issued
andoutstanding in 2019 and 2018, respectively
1,735 1,727
Additional paid-in capital
1,967,845 1,968,280 Dividends in
excess of cumulative earnings
(1,069,104 ) (1,005,895
) Total shareholders' equity
900,501 964,137 Noncontrolling
interests
57,971 68,028 Total equity
958,472 1,032,165
$ 5,161,948
$ 5,340,853
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190430006125/en/
Katie Reinsmidt, Executive Vice President - Chief Investment
Officer, 423.490.8301, katie.reinsmidt@cblproperties.com
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