8-K
Cbl & Associates Properties Inc (CBL)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 6, 2020
CBL & ASSOCIATES PROPERTIES INC
CBL & Associates Limited Partnership
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 1-12494 | 62-1545718 |
|---|---|---|
| Delaware | 333-182515-01 | 62-1542285 |
| (State or Other Jurisdiction of<br><br><br>Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
2030 Hamilton Place Blvd., Suite 500, Chattanooga, TN 37421-6000
(Address of principal executive office, including zip code)
423-855-0001
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered under Section 12(b) of the Act:
| Title of each Class | Trading<br><br><br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value | CBL | New York Stock Exchange |
| 7.375% Series D Cumulative Redeemable Preferred Stock, $0.01 par value | CBLprD | New York Stock Exchange |
| 6.625% Series E Cumulative Redeemable Preferred Stock, $0.01 par value | CBLprE | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 Results of Operations and Financial Condition
On February 6, 2020, CBL & Associates Properties, Inc. (the "Company") reported its results for the fourth quarter and year ended December 31, 2019. The Company's earnings release and supplemental financial and operating information for the fourth quarter and year ended December 31, 2019 is attached as Exhibit 99.1. On February 7, 2020, the Company held a conference call to discuss the results for the fourth quarter and year ended December 31, 2019. The conference call script is attached as Exhibit 99.2.
The information in this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01 Financial Statements and Exhibits
| (a) | Financial Statements of Businesses Acquired |
|---|
Not applicable
| (b) | Pro Forma Financial Information |
|---|
Not applicable
| (c) | Shell Company Transactions |
|---|
Not applicable
| (d) | Exhibits |
|---|---|
| Exhibit<br><br><br>Number | Description |
| --- | --- |
| 99.1 | Earnings Release dated February 6, 2020 and Supplemental Financial and Operating Information - For the Three Months and Year Ended December 31, 2019 |
| 99.2 | Investor Conference Call Script - Fourth Quarter and Year Ended December 31, 2019 |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*). (Filed herewith) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CBL & ASSOCIATES PROPERTIES, INC. | |
|---|---|
| /s/ Farzana Khaleel | |
| Farzana Khaleel | |
| Executive Vice President - | |
| Chief Financial Officer and Treasurer | |
| CBL & ASSOCIATES LIMITED PARTNERSHIP | |
| --- | --- |
| By: CBL HOLDINGS I, INC., its general partner | |
| /s/ Farzana Khaleel | |
| Farzana Khaleel | |
| Executive Vice President - | |
| Chief Financial Officer and Treasurer | |
| Date: February 7, 2020 |
cbl-ex991_6.htm
Exhibit 99.1
Earnings Release and
Supplemental Financial and Operating Information
For the Three Months and Year Ended
December 31, 2019
Earnings Release and Supplemental Financial and Operating Information
Table of Contents
| Page | |
|---|---|
| Earnings Release | 1 |
| Consolidated Statements of Operations | 8 |
| Reconciliations of Supplementary Non-GAAP Financial Measures: | |
| Funds from Operations (FFO) | 9 |
| Same-center Net Operating Income (NOI) | 12 |
| Selected Financial and Equity Information | 14 |
| Consolidated Balance Sheets | 15 |
| Condensed Combined Financial Statements - Unconsolidated Affiliates | 16 |
| Ratio of Adjusted EBITDAre to Interest Expense and Reconciliation of Adjusted EBITDAre to Operating Cash Flows | 17 |
| Components of Rental Revenues | 18 |
| Schedule of Mortgage and Other Indebtedness | 19 |
| Schedule of Maturities and Debt Covenant Compliance Ratios | 23 |
| Unencumbered Consolidated Portfolio Statistics | 24 |
| Mall Portfolio Statistics | 25 |
| Leasing Activity and Average Annual Base Rents | 28 |
| Top 25 Tenants Based on Percentage of Total Annualized Revenues | 30 |
| Capital Expenditures | 31 |
| Development Activity | 32 |
| CBL Core Portfolio Exposure to Sears and Closed Bon-Ton Locations and Redevelopment Plans | 34 |
Contact: Katie Reinsmidt, Executive Vice President - Chief Investment Officer, 423.490.8301, katie.reinsmidt@cblproperties.com
CBL PROPERTIES REPORTS RESULTS FOR FOURTH QUARTER AND FULL-YEAR 2019
CHATTANOOGA, Tenn. (February 6, 2020) – CBL Properties (NYSE:CBL) announced results for the fourth quarter and year ended December 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<br><br><br>December 31, | Year Ended<br><br><br>December 31, | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | % | 2019 | 2018 | % | ||||||||||||
| Net income (loss) attributable to common shareholders per diluted share | $ | 0.27 | $ | (0.38 | ) | 170.6 | % | $ | (0.74 | ) | $ | (0.72 | ) | (4.1 | )% | ||
| Funds from Operations (“FFO”) per diluted share | $ | 0.39 | $ | 0.44 | (12.4 | )% | $ | 1.40 | $ | 1.70 | (17.7 | )% | |||||
| FFO, as adjusted, per diluted share ^(1)^ | $ | 0.37 | $ | 0.45 | (17.1 | )% | $ | 1.36 | $ | 1.73 | (21.6 | )% | |||||
| (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 9 of this news release. | ||||||||||||||||
| --- | --- |
KEY TAKEAWAYS:
| • | Same-center sales per square foot for the stabilized mall portfolio for the fourth quarter 2019 improved 3%. For the twelve-months ended December 31, 2019, same-center sales increased 2% to $386 per square foot compared with the prior-year period. |
|---|---|
| • | During 2019, CBL made significant progress on its anchor redevelopment program, completing a dozen redevelopment projects. CBL currently has 27 former anchor spaces committed, under construction or with replacements already open featuring dining, entertainment, fitness and other mixed-use components. |
| --- | --- |
| • | FFO per diluted share, as adjusted, was $0.37 for the fourth quarter 2019, compared with $0.45 per share for the fourth quarter 2018. Fourth quarter 2019 FFO per share was impacted by $0.02 per share of dilution from asset sales completed since the prior-year period and $0.06 per share of lower property NOI. |
| --- | --- |
| • | FFO per diluted share, as adjusted, was $1.36 for 2019, compared with $1.73 for 2018. 2019 FFO per share was impacted by $0.06 per share of dilution from asset sales completed since the prior-year period, $0.04 lower gains on the sale of outparcels and $0.20 per share of lower property NOI. |
| --- | --- |
| • | Total Portfolio Same-center NOI declined 6.5% for 2019, as compared with 2018. |
| --- | --- |
| • | Portfolio occupancy as of December 31, 2019, was 91.2%, representing a 70-basis point improvement sequentially and a 190-basis point decline compared with 93.1% as of December 31, 2018. Same-center mall occupancy was 89.8% as of December 31, 2019, a 110-basis point improvement sequentially and a 210-basis point decline compared with 91.9% as of December 31, 2018. |
| --- | --- |
| • | During 2019, CBL completed gross asset sales totaling $185.7 million (details herein). |
| --- | --- |
-MORE-
“As our results indicate, our properties are facing ongoing challenges as retailers struggle to adapt to today’s consumer preferences. For the year 2019, our financial results were at the high end of our guidance range with same-center NOI of (6.5%) and adjusted FFO of $1.36 per share,” said Stephen D. Lebovitz, Chief Executive Officer. “2019 results, as well as 2020 guidance, reflect the significant impact of retailer bankruptcies and store closings on revenues and occupancy. Our guidance range for 2020 incorporates the carryover from 2019 plus anticipated challenges by retailers in 2020 and a reserve for unbudgeted impacts.
“At the same time, we are working to diversify and stabilize revenues. In recent months, we have opened 15 new tenants in former anchor locations, adding more productive, higher traffic-driving uses. And, we have another dozen committed replacements either under construction or with planning underway. We are proactively reducing our exposure to apparel retailers with more than 76% of 2019 mall leasing completed with non-apparel tenants. As we approach our redevelopments, we are evaluating our capital investments closely and successfully stretching our dollars through ground leases, joint ventures and other creative structures. The steps we took in December 2019 to suspend our common and preferred dividends in 2020 are key elements of our strategy to preserve our significant level of internally generated cash flow, providing us with the capital to execute on our redevelopment and leasing strategies that will lead to stabilized future revenues and growth.”
Net income attributable to common shareholders for the fourth quarter 2019 was $46.5 million, or $0.27 per diluted share, compared with a net loss of $65.5 million, or a loss of $0.38 per diluted share, for the fourth quarter of 2018. Net income for the fourth quarter 2019 was impacted by a $37.4 million loss on impairment of real estate to write down the carrying value of Park Plaza to the property’s estimated fair value.
Net loss attributable to common shareholders for 2019 was $129.2 million, or a loss of $0.74 per diluted share, compared with a net loss of $123.5 million, or a loss of $0.72 per diluted share, for 2018. Net loss for the full-year 2019 included a $26.4 million reduction to the class-action litigation expense recorded in the first quarter 2019. The majority of the reduction relates to past tenants that did not submit a claim pursuant to the terms of the settlement agreement with the remainder relating to tenants that opted out of the lawsuit.
FFO allocable to common shareholders, as adjusted, for the fourth quarter 2019 was $64.7 million, or $0.37 per diluted share, compared with $77.0 million, or $0.45 per diluted share, for the fourth quarter 2018. FFO allocable to the Operating Partnership common unitholders, as adjusted, for the fourth quarter 2019 was $74.6 million compared with $89.0 million for the fourth quarter 2018.
FFO allocable to common shareholders, as adjusted, for 2019 was $235.2 million, or $1.36 per diluted share, compared with $298.2 million, or $1.73 per diluted share, for 2018. FFO allocable to the Operating Partnership common unitholders, as adjusted, for 2019 was $271.5 million compared with $345.1 million for 2018.
Percentage change in same-center Net Operating Income (“NOI”) ^(1)^:
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2019 | 2019 | |||||
| Portfolio same-center NOI | (9.1 | )% | (6.5 | )% | ||
| Mall same-center NOI | (9.8 | )% | (7.3 | )% | ||
| (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 acquired above and below market leases. | |||||
| --- | --- |
Major variances impacting same-center NOI for the year ended December 31, 2019, include:
| • | Same-center NOI declined $38.9 million, due to a $48.8 million decrease in revenues offset by a $9.9 million decline in operating expenses. |
|---|---|
| • | Rental revenues declined $57.9 million, including a $26.5 million decline in tenant reimbursements and a $32.8 million decline in minimum and other rents. Percentage rents improved $1.4 million. |
| --- | --- |
| • | Property operating expenses declined $5.8 million compared with the prior year. Maintenance and repair expenses were flat. Real estate tax expenses declined $4.1 million. |
| --- | --- |
PORTFOLIO OPERATIONAL RESULTS
Occupancy^(1)^:
| As of December 31, | ||||||
|---|---|---|---|---|---|---|
| 2019 | 2018 | |||||
| Total portfolio | 91.2 | % | 93.1 | % | ||
| Malls: | ||||||
| Total Mall portfolio | 89.8 | % | 91.8 | % | ||
| Same-center Malls | 89.8 | % | 91.9 | % | ||
| Stabilized Malls | 90.0 | % | 92.1 | % | ||
| Non-stabilized Malls ^(2)^ | 83.8 | % | 76.7 | % | ||
| Associated centers | 95.6 | % | 97.4 | % | ||
| Community centers | 96.0 | % | 97.2 | % | ||
| (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. | |||||
| --- | --- |
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<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||
| 2019 | 2019 | |||||
| Stabilized Malls | (12.1 | )% | (8.6 | )% | ||
| New leases | 8.8 | % | 9.1 | % | ||
| Renewal leases | (15.7 | )% | (11.5 | )% |
Same-Center Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:
| Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|
| 2019 | 2018 | % Change | |||||
| Stabilized mall same-center sales per square foot | $ | 386 | $ | 379 | 2 | % | |
| Stabilized mall sales per square foot | $ | 386 | $ | 377 | 2 | % |
DISPOSITIONS
Year-to-date, CBL has closed on $185.7 million in asset sales, as detailed below.
In December, CBL closed on the sale of a 15% interest in The Outlet Shoppes at Atlanta to its existing joint venture partner, Horizon Group Properties (“Horizon”), for $20.8 million, including cash of $9.4 million and the assumption of 15% interest in the existing loan (representing $11.4 million at closing). Following the completion of the sale, CBL and Horizon each own a 50% interest, with Horizon continuing to lease and manage the asset.
| Property | Location | Date Closed | Gross Sales Price (M) | |
|---|---|---|---|---|
| Cary Towne Center^(1)^ | Cary, NC | January | $ | 31.5 |
| Honey Creek Mall ^(1)^ | Terre Haute, IN | April | 14.6 | |
| The Shoppes at Hickory Point | Forsyth, IL | April | 2.5 | |
| Courtyard by Marriott at Pearland Town Center | Pearland, TX | June | 15.1 | |
| The Forum at Grandview | Madison, MS | July | 31.8 | |
| 850 Greenbrier Circle | Chesapeake, VA | July | 10.5 | |
| Various parcels | Various | Various | 31.1 | |
| 25% interest in The Outlet Shoppes at El Paso ^(2)^ | El Paso, TX | August | 27.8 | |
| 15% interest in The Outlet Shoppes at Atlanta ^(3)^ | Woodstock, GA | December | 20.8 | |
| Total | $ | 185.7 | ||
| (1) | 100% of sale proceeds utilized to retire existing secured loans. | |||
| --- | --- | |||
| (2) | Gross amount shown above is comprised of $9.3 million in equity and 25% interest in loan balance at closing of $18.5 million. | |||
| --- | --- | |||
| (3) | Gross amount shown above is comprised of $9.4 million in equity and 15% interest in loan balance at closing of $11.4 million. | |||
| --- | --- |
ANCHOR REPLACEMENT PROGRESS AND REDEVELOPMENT
During 2019, CBL completed a dozen redevelopment projects and had five additional projects under construction at year-end. 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) | Construction/Opening Status |
|---|---|---|---|
| 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 | Open |
| Parkdale Mall | Macy’s | Dick’s, Five Below, HomeGoods | Open |
| Brookfield Square | Sears | Marcus Theatres, Whirlyball | Open |
| Laurel Park Place | Carson’s | Dunham’s Sports | Open |
| Meridian Mall | Younkers | High Caliber Karts | Open |
| Stroud Mall | Boston | Shoprite | Open |
| Kentucky Oaks Mall | Elder Beerman | HomeGoods and Five Below | Open |
| Frontier Mall | Sears | Jax Outdoor Gear | Open |
| Stroud Mall | Sears | EFO Furniture Outlet | Open |
| Dakota Square | Herberger’s | Ross Dress for Less | Open |
| Hamilton Place | Sears | Dick’s Sporting Goods, Dave & Busters, Aloft Hotel, Malones | Under construction -<br><br><br>Spring 2020/ 2021 (Aloft) |
| CherryVale Mall | Sears | Tilt | Under construction - Q1/Q2 ‘20 |
| Richland Mall | Sears | Dillard’s | Under construction - 2020 |
| Post Oak Mall | Sears | Conn’s HomePlus | Under construction - 2020 |
| Kirkwood Mall | BonTon | Restaurants | 2020 |
| Imperial Valley | Sears | Hobby Lobby | 2020 |
| Westmoreland Mall | BonTon | Stadium Live! Casino | 2020 |
| York Galleria | Sears | Hollywood Casino | 2020 |
| Cross Creek Mall | Sears | Dave & Busters | Construction start in 2020 |
| South County Center | Sears | Round1 | Opening TBD |
| Hanes Mall | Sears | Novant Health | Opening TBD |
| West Towne Mall | Sears | Von Maur | 2021 |
DIVIDENDS
In December 2019, CBL announced that it is suspending all future dividends on its common stock, 7.375% Series D Cumulative Redeemable Preferred Stock and 6.625% Series E Cumulative Redeemable Preferred Stock. The dividend suspension will be reviewed quarterly by the Board of Directors, but is expected to remain in place until year-end 2020. The Company made this determination following a review of taxable income
projections for 2019 and 2020. The Company will review taxable income on a regular basis and take measures, if necessary, to ensure that it meets the minimum distribution requirements to maintain its status as a Real Estate Investment Trust (REIT).
OUTLOOK AND GUIDANCE
CBL is providing 2020 FFO, as adjusted, guidance in the range of $1.03 - $1.13 per diluted share. Guidance incorporates a reserve in the range of $8.0 - $18.0 million (the “Reserve”) for potential future unbudgeted loss in rent from tenant bankruptcies, store closures or lease modifications that may occur in 2020.
Key assumptions underlying guidance are as follows:
| Low | High | |||
|---|---|---|---|---|
| 2020 FFO, as adjusted, per share (includes the Reserve) | ||||
| 2020 Change in Same-Center NOI (“SC NOI”) (includes the Reserve) | )% | )% | ||
| Reserve for unbudgeted lost rents included in SC NOI and FFO | 18.0 million | 8.0 million | ||
| Updated expectation for gains on outparcel sales | 2.0 million | 5.0 million |
All values are in US Dollars.
Assumptions underlying the change in 2020 SC NOI are as follows:
| Estimated Impact to 2020 SC NOI | Explanation | |||
|---|---|---|---|---|
| New Leasing/Contractual Rent Increases | 2.30 | % | ||
| Specialty Retail/Branding | (0.50 | )% | 2019 actual and 2020 budgeted closures | |
| Store Closures/Non-renewals | (4.00 | )% | 2019 actual and 2020 budgeted store closures at natural lease maturity as well as mid-term store closures primarily due to tenants in bankruptcy | |
| Lease Renewals | (1.50 | )% | Impact of new renewals completed in 2019 and budgeted for 2020, including certain tenants in bankruptcy reorganization | |
| Lease Modifications/Co-tenancy | (2.10 | )% | Mid-term lease modifications and co-tenancy rents triggered in 2019 or budgeted in 2020 | |
| Expenses | (0.65 | )% | Increases in operating expenses | |
| Reserve for lost rents | (2.30 | )% | Mid-point of reserve for unbudgeted lost rents | |
| Total 2020 SC NOI Change at Midpoint | (8.75 | )% |
Reconciliation of GAAP net income (loss) to 2020 FFO, as adjusted, per share guidance:
| Low | High | |||||
|---|---|---|---|---|---|---|
| Expected diluted earnings per common share | $ | (0.26 | ) | $ | (0.16 | ) |
| Adjust to fully converted shares from common shares | 0.02 | 0.02 | ||||
| Expected earnings per diluted, fully converted common share | (0.24 | ) | (0.14 | ) | ||
| Add: depreciation and amortization | 1.28 | 1.28 | ||||
| Add: noncontrolling interest in loss of Operating Partnership | (0.01 | ) | (0.01 | ) | ||
| Expected FFO, as adjusted, per diluted, fully converted common share | $ | 1.03 | $ | 1.13 |
INVESTOR CONFERENCE CALL AND WEBCAST
CBL Properties will host a conference call on Friday, February 7, 2020, at 11:00 a.m. ET. To access this interactive teleconference, dial (888) 317‑6003 or (412) 317-6061 and enter the confirmation number, 1982728. A replay of the conference call will be available through February 14, 2020, by dialing (877) 344-7529 or (412) 317‑0088 and entering the confirmation number, 10136909.
The Company will also provide an online webcast and rebroadcast of its fourth quarter 2019 earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Friday, February 7, 2020, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call.
To receive the CBL Properties fourth 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 108 properties totaling 68.2 million square feet across 26 states, including 68 high-quality enclosed, outlet and open-air retail centers and 9 properties managed for third parties. 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.
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 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 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 9 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.
Supplemental Financial and Operating Information
For the Three Months and Year Ended December 31, 2019
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| REVENUES ^(1)^: | ||||||||||||
| Rental revenues | $ | 180,464 | $ | 201,907 | $ | 737,453 | $ | 829,113 | ||||
| Management, development and leasing fees | 2,025 | 2,520 | 9,350 | 10,542 | ||||||||
| Other | 7,016 | 12,454 | 21,360 | 18,902 | ||||||||
| Total revenues | 189,505 | 216,881 | 768,163 | 858,557 | ||||||||
| OPERATING EXPENSES: | ||||||||||||
| Property operating | (26,049 | ) | (29,660 | ) | (108,905 | ) | (122,017 | ) | ||||
| Depreciation and amortization | (59,308 | ) | (68,140 | ) | (257,746 | ) | (285,401 | ) | ||||
| Real estate taxes | (17,699 | ) | (20,554 | ) | (75,465 | ) | (82,291 | ) | ||||
| Maintenance and repairs | (11,955 | ) | (11,591 | ) | (46,282 | ) | (48,304 | ) | ||||
| General and administrative | (15,280 | ) | (13,661 | ) | (64,181 | ) | (61,506 | ) | ||||
| Loss on impairment | (37,400 | ) | (89,885 | ) | (239,521 | ) | (174,529 | ) | ||||
| Litigation settlement | 3,708 | — | (61,754 | ) | — | |||||||
| Other | (50 | ) | (410 | ) | (91 | ) | (787 | ) | ||||
| Total operating expenses | (164,033 | ) | (233,901 | ) | (853,945 | ) | (774,835 | ) | ||||
| OTHER INCOME (EXPENSES): | ||||||||||||
| Interest and other income | 552 | 1,144 | 2,764 | 1,858 | ||||||||
| Interest expense | (49,266 | ) | (56,874 | ) | (206,261 | ) | (220,038 | ) | ||||
| Gain on extinguishment of debt | — | — | 71,722 | — | ||||||||
| Gain on investments/deconsolidation | 84,356 | — | 95,530 | — | ||||||||
| Gain on sales of real estate assets | 2,463 | 2,616 | 16,274 | 19,001 | ||||||||
| Income tax benefit (provision) | (32 | ) | (295 | ) | (2,654 | ) | 1,551 | |||||
| Equity in earnings of unconsolidated affiliates | 1,519 | 4,808 | 4,940 | 14,677 | ||||||||
| Total other income (expenses) | 39,592 | (48,601 | ) | (17,685 | ) | (182,951 | ) | |||||
| Net income (loss) | 65,064 | (65,621 | ) | (103,467 | ) | (99,229 | ) | |||||
| Net (income) loss attributable to noncontrolling interests in: | ||||||||||||
| Operating Partnership | (7,210 | ) | 10,710 | 19,906 | 19,688 | |||||||
| Other consolidated subsidiaries | (108 | ) | 604 | (739 | ) | 973 | ||||||
| Net income (loss) attributable to the Company | 57,746 | (54,307 | ) | (84,300 | ) | (78,568 | ) | |||||
| Preferred dividends declared | — | (11,223 | ) | (33,669 | ) | (44,892 | ) | |||||
| Preferred dividends undeclared | (11,223 | ) | — | (11,223 | ) | — | ||||||
| Net income (loss) attributable to common shareholders | $ | 46,523 | $ | (65,530 | ) | $ | (129,192 | ) | $ | (123,460 | ) | |
| Basic and diluted per share data attributable to common<br><br><br>shareholders: | ||||||||||||
| Net income (loss) attributable to common shareholders | $ | 0.27 | $ | (0.38 | ) | $ | (0.74 | ) | $ | (0.72 | ) | |
| Weighted-average common and potential dilutive common shares<br><br><br>outstanding | 173,578 | 172,665 | 173,445 | 172,486 | ||||||||
| (1) | See "Adoption of Lease Accounting Standard" on page 6 for further information on the presentation of rental revenues in accordance with the new standard adopted effective January 1, 2019. | |||||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three Months and Year Ended December 31, 2019
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<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Net income (loss) attributable to common shareholders | $ | 46,523 | $ | (65,530 | ) | $ | (129,192 | ) | $ | (123,460 | ) | |
| Noncontrolling interest in income (loss) of Operating Partnership | 7,210 | (10,710 | ) | (19,906 | ) | (19,688 | ) | |||||
| Depreciation and amortization expense of: | ||||||||||||
| Consolidated properties | 59,308 | 68,140 | 257,746 | 285,401 | ||||||||
| Unconsolidated affiliates | 12,835 | 10,681 | 49,434 | 41,858 | ||||||||
| Non-real estate assets | (931 | ) | (913 | ) | (3,650 | ) | (3,661 | ) | ||||
| Noncontrolling interests' share of depreciation and amortization in other<br><br><br>consolidated subsidiaries | (1,355 | ) | (2,177 | ) | (8,191 | ) | (8,601 | ) | ||||
| Loss on impairment, net of taxes | 37,400 | 89,773 | 239,521 | 174,416 | ||||||||
| Loss on impairment of unconsolidated affiliates | — | — | — | 1,022 | ||||||||
| Gain on depreciable property, net of taxes | (83,783 | ) | (1,941 | ) | (105,538 | ) | (7,484 | ) | ||||
| FFO allocable to Operating Partnership common unitholders | 77,207 | 87,323 | 280,224 | 339,803 | ||||||||
| Litigation settlement, net of taxes ^(1)^ | (3,708 | ) | — | 61,271 | — | |||||||
| Non-cash default interest expense ^(2)^ | 1,146 | 1,669 | 1,688 | 5,285 | ||||||||
| Gain on extinguishment of debt ^(3)^ | — | — | (71,722 | ) | — | |||||||
| FFO allocable to Operating Partnership common unitholders, as<br><br><br>adjusted | $ | 74,645 | $ | 88,992 | $ | 271,461 | $ | 345,088 | ||||
| FFO per diluted share | $ | 0.39 | $ | 0.44 | $ | 1.40 | $ | 1.70 | ||||
| FFO, as adjusted, per diluted share | $ | 0.37 | $ | 0.45 | $ | 1.36 | $ | 1.73 | ||||
| Weighted-average common and potential dilutive common shares<br><br><br>outstanding with Operating Partnership units fully converted | 200,201 | 199,430 | 200,169 | 199,580 | ||||||||
| (1) | The three months ended December 31, 2019 represents a reduction of $3,708 to the accrued expense related to the settlement of a class action lawsuit that was recorded in the three months ended March 31, 2019. The year ended December 31, 2019 is comprised of the accrued maximum expense of $88,150 recorded in the three months ended March 31, 2019 less total subsequent reductions of $26,396 pursuant to the terms of the settlement agreement related to past tenants that did not submit a claim pursuant to the terms of the settlement agreement, tenants that opted out of the lawsuit and other permissible reductions. | |||||||||||
| --- | --- | |||||||||||
| (2) | The three months ended December 31, 2019 includes default interest expense related to Greenbrier Mall and Hickory Point Mall. The year ended December 31, 2019 includes default interest expense related to Acadiana Mall, Cary Towne Center, Greenbrier Mall and Hickory Point Mall. The three months and year ended December 31, 2018 include default interest expense related to Acadiana Mall, Cary Towne Center and Triangle Town Center. | |||||||||||
| --- | --- | |||||||||||
| (3) | The year ended December 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. | |||||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three Months and Year Ended December 31, 2019
The reconciliation of diluted EPS to FFO per diluted share is as follows:
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Diluted EPS attributable to common shareholders | $ | 0.27 | $ | (0.38 | ) | $ | (0.74 | ) | $ | (0.72 | ) | |
| Eliminate amounts per share excluded from FFO: | ||||||||||||
| Depreciation and amortization expense, including amounts from<br><br><br>consolidated properties, unconsolidated affiliates, non-real estate<br><br><br>assets and excluding amounts allocated to noncontrolling<br><br><br>interests | 0.35 | 0.38 | 1.48 | 1.58 | ||||||||
| Loss on impairment, net of taxes | 0.19 | 0.45 | 1.19 | 0.88 | ||||||||
| Gain on depreciable property, net of taxes | (0.42 | ) | (0.01 | ) | (0.53 | ) | (0.04 | ) | ||||
| FFO per diluted share | $ | 0.39 | $ | 0.44 | $ | 1.40 | $ | 1.70 |
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 Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| FFO allocable to Operating Partnership common unitholders | $ | 77,207 | $ | 87,323 | $ | 280,224 | $ | 339,803 | ||||
| Percentage allocable to common shareholders ^(1)^ | 86.70 | % | 86.58 | % | 86.65 | % | 86.42 | % | ||||
| FFO allocable to common shareholders | $ | 66,938 | $ | 75,604 | $ | 242,814 | $ | 293,658 | ||||
| FFO allocable to Operating Partnership common unitholders, as<br><br><br>adjusted | $ | 74,645 | $ | 88,992 | $ | 271,461 | $ | 345,088 | ||||
| Percentage allocable to common shareholders ^(1)^ | 86.70 | % | 86.58 | % | 86.65 | % | 86.42 | % | ||||
| FFO allocable to common shareholders, as adjusted | $ | 64,717 | $ | 77,049 | $ | 235,221 | $ | 298,225 | ||||
| (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 14. | |||||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three Months and Year Ended December 31, 2019
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| SUPPLEMENTAL FFO INFORMATION: | ||||||||||||
| Lease termination fees | $ | 856 | $ | 317 | $ | 3,794 | $ | 10,105 | ||||
| Lease termination fees per share | $ | — | $ | — | $ | 0.02 | $ | 0.05 | ||||
| Straight-line rental income | $ | 984 | $ | (1,108 | ) | $ | 3,286 | $ | (5,031 | ) | ||
| Straight-line rental income per share | $ | — | $ | (0.01 | ) | $ | 0.02 | $ | (0.03 | ) | ||
| Gains on outparcel sales, net of taxes | $ | 3,021 | $ | 1,679 | $ | 5,915 | $ | 13,138 | ||||
| Gains on outparcel sales, net of taxes per share | $ | 0.02 | $ | 0.01 | $ | 0.03 | $ | 0.07 | ||||
| Net amortization of acquired above- and below-market leases | $ | 930 | $ | 662 | $ | 2,962 | $ | 1,644 | ||||
| Net amortization of acquired above- and below-market leases per share | $ | — | $ | — | $ | 0.01 | $ | 0.01 | ||||
| Net amortization of debt premiums and discounts | $ | 334 | $ | 316 | $ | 1,316 | $ | 1,043 | ||||
| Net amortization of debt premiums and discounts per share | $ | — | $ | — | $ | 0.01 | $ | 0.01 | ||||
| Income tax benefit (provision) | $ | (32 | ) | $ | (295 | ) | $ | (2,654 | ) | $ | 1,551 | |
| Income tax benefit (provision) per share | $ | — | $ | — | $ | (0.01 | ) | $ | 0.01 | |||
| Gain on extinguishment of debt | $ | — | $ | — | $ | 71,722 | $ | — | ||||
| Gain on extinguishment of debt per share | $ | — | $ | — | $ | 0.36 | $ | — | ||||
| Non-cash default interest expense | $ | (1,146 | ) | $ | (1,669 | ) | $ | (1,688 | ) | $ | (5,285 | ) |
| Non-cash default interest expense per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) |
| Abandoned projects expense | $ | (50 | ) | $ | (410 | ) | $ | (91 | ) | $ | (787 | ) |
| Abandoned projects expense per share | $ | — | $ | — | $ | — | $ | — | ||||
| Interest capitalized | $ | 692 | $ | 919 | $ | 2,661 | $ | 3,655 | ||||
| Interest capitalized per share | $ | — | $ | — | $ | 0.01 | $ | 0.02 | ||||
| Litigation settlement, net of taxes | $ | 3,708 | $ | — | $ | (61,271 | ) | $ | — | |||
| Litigation settlement, net of taxes per share | $ | 0.02 | $ | — | $ | (0.31 | ) | $ | — | |||
| As of December 31, | ||||||||||||
| 2019 | 2018 | |||||||||||
| Straight-line rent receivable | $ | 46,973 | $ | 55,902 |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three Months and Year Ended December 31, 2019
Same-center Net Operating Income
(Dollars in thousands)
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Net income (loss) | $ | 65,064 | $ | (65,621 | ) | $ | (103,467 | ) | $ | (99,229 | ) | |
| Adjustments: | ||||||||||||
| Depreciation and amortization | 59,308 | 68,140 | 257,746 | 285,401 | ||||||||
| Depreciation and amortization from unconsolidated affiliates | 12,835 | 10,681 | 49,434 | 41,858 | ||||||||
| Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries | (1,355 | ) | (2,177 | ) | (8,191 | ) | (8,601 | ) | ||||
| Interest expense | 49,266 | 56,874 | 206,261 | 220,038 | ||||||||
| Interest expense from unconsolidated affiliates | 7,204 | 6,754 | 27,046 | 25,603 | ||||||||
| Noncontrolling interests' share of interest expense in other consolidated subsidiaries | (1,112 | ) | (1,837 | ) | (6,156 | ) | (7,749 | ) | ||||
| Abandoned projects expense | 50 | 410 | 91 | 787 | ||||||||
| Gain on sales of real estate assets | (2,463 | ) | (2,616 | ) | (16,274 | ) | (19,001 | ) | ||||
| Gain on sales of real estate assets of unconsolidated affiliates | — | (1,043 | ) | (627 | ) | (1,607 | ) | |||||
| Gain on investments/deconsolidation | (84,356 | ) | — | (95,530 | ) | — | ||||||
| Gain on extinguishment of debt | — | — | (71,722 | ) | — | |||||||
| Loss on impairment | 37,400 | 89,885 | 239,521 | 174,529 | ||||||||
| Litigation settlement | (3,708 | ) | — | 61,754 | — | |||||||
| Income tax (benefit) provision | 32 | 295 | 2,654 | (1,551 | ) | |||||||
| Lease termination fees | (856 | ) | (317 | ) | (3,794 | ) | (10,105 | ) | ||||
| Straight-line rent and above- and below-market lease amortization | (1,914 | ) | 446 | (6,248 | ) | 3,387 | ||||||
| Net (income) loss attributable to noncontrolling interests in other consolidated subsidiaries | (108 | ) | 604 | (739 | ) | 973 | ||||||
| General and administrative expenses | 15,280 | 13,661 | 64,181 | 61,506 | ||||||||
| Management fees and non-property level revenues | (3,171 | ) | (4,501 | ) | (12,202 | ) | (14,143 | ) | ||||
| Operating Partnership's share of property NOI | 147,396 | 169,638 | 583,738 | 652,096 | ||||||||
| Non-comparable NOI | (3,786 | ) | (11,681 | ) | (21,648 | ) | (51,131 | ) | ||||
| Total same-center NOI ^(1)^ | $ | 143,610 | $ | 157,957 | $ | 562,090 | $ | 600,965 | ||||
| Total same-center NOI percentage change | (9.1 | )% | (6.5 | )% |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three Months and Year Ended December 31, 2019
Same-center Net Operating Income
(Continued)
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||
| Malls | $ | 129,386 | $ | 143,502 | $ | 504,789 | $ | 544,829 | ||
| Associated centers | 8,110 | 8,286 | 32,720 | 32,380 | ||||||
| Community centers | 5,057 | 5,013 | 20,273 | 19,624 | ||||||
| Offices and other | 1,057 | 1,156 | 4,308 | 4,132 | ||||||
| Total same-center NOI ^(1)^ | $ | 143,610 | $ | 157,957 | $ | 562,090 | $ | 600,965 | ||
| Percentage Change: | ||||||||||
| Malls | (9.8 | )% | (7.3 | )% | ||||||
| Associated centers | (2.1 | )% | 1.1 | % | ||||||
| Community centers | 0.9 | % | 3.3 | % | ||||||
| Offices and other | (8.6 | )% | 4.3 | % | ||||||
| Total same-center NOI ^(1)^ | (9.1 | )% | (6.5 | )% | ||||||
| (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 December 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 December 31, 2019. 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. | |||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019 and 2018
Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
| As of December 31, 2019 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed Rate | Variable<br><br><br>Rate | Total per<br><br><br>Debt<br><br><br>Schedule | Unamortized<br><br><br>Deferred<br><br><br>Financing<br><br><br>Costs | Total | |||||||||||||
| Consolidated debt | $ | 2,695,888 | $ | 847,275 | $ | 3,543,163 | $ | (16,148 | ) | $ | 3,527,015 | ||||||
| Noncontrolling interests' share of consolidated debt | (30,658 | ) | — | (30,658 | ) | 318 | (30,340 | ) | |||||||||
| Company's share of unconsolidated affiliates' debt | 633,243 | 104,408 | 737,651 | (2,851 | ) | 734,800 | |||||||||||
| Company's share of consolidated and unconsolidated debt | $ | 3,298,473 | $ | 951,683 | $ | 4,250,156 | $ | (18,681 | ) | $ | 4,231,475 | ||||||
| Weighted-average interest rate | 5.10 | % | 4.00 | % | 4.85 | % | |||||||||||
| As of December 31, 2018 | |||||||||||||||||
| Fixed Rate | Variable<br><br><br>Rate | Total per<br><br><br>Debt<br><br><br>Schedule | Unamortized<br><br><br>Deferred<br><br><br>Financing<br><br><br>Costs | Total | |||||||||||||
| Consolidated debt | $ | 3,147,108 | $ | 955,751 | $ | 4,102,859 | ^(1^ | ^)^ | $ | (15,963 | ) | $ | 4,086,896 | ||||
| Noncontrolling interests' share of consolidated debt | (94,361 | ) | — | (94,361 | ) | 804 | (93,557 | ) | |||||||||
| Company's share of unconsolidated affiliates' debt | 550,673 | 99,904 | 650,577 | (2,687 | ) | 647,890 | |||||||||||
| Company's share of consolidated and unconsolidated debt | $ | 3,603,420 | $ | 1,055,655 | $ | 4,659,075 | $ | (17,846 | ) | $ | 4,641,229 | ||||||
| Weighted-average interest rate | 5.16 | % | 4.28 | % | 4.96 | % |
(1) Includes $43,716 of debt related to Cary Town Center that is classified in liabilities related to assets held for sale in the consolidated balance sheet as of December 31, 2018. The mall was sold in January 2019.
Total Market Capitalization as of December 31, 2019
(In thousands, except stock price)
| Shares<br><br><br>Outstanding | Stock<br><br><br>Price ^(1)^ | |||
|---|---|---|---|---|
| Common stock and operating partnership units | 200,189 | $ | 1.05 | |
| 7.375% Series D Cumulative Redeemable Preferred Stock | 1,815 | 250.00 | ||
| 6.625% Series E Cumulative Redeemable Preferred Stock | 690 | 250.00 | ||
| (1) | Stock price for common stock and Operating Partnership units equals the closing price of the common stock on December 31, 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 Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| Basic | Diluted | Basic | Diluted | |||||
| 2019: | ||||||||
| Weighted-average shares - EPS | 173,578 | 173,578 | 173,445 | 173,445 | ||||
| Weighted-average Operating Partnership units | 26,623 | 26,623 | 26,724 | 26,724 | ||||
| Weighted-average shares - FFO | 200,201 | 200,201 | 200,169 | 200,169 | ||||
| 2018: | ||||||||
| Weighted-average shares - EPS | 172,665 | 172,665 | 172,486 | 172,486 | ||||
| Weighted-average Operating Partnership units | 26,765 | 26,765 | 27,094 | 27,094 | ||||
| Weighted-average shares - FFO | 199,430 | 199,430 | 199,580 | 199,580 |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019 and 2018
Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
| 2018 | |||||
| ASSETS | |||||
| Real estate assets: | |||||
| Land | 730,218 | $ | 793,944 | ||
| Buildings and improvements | 5,630,795 | 6,414,886 | |||
| 6,361,013 | 7,208,830 | ||||
| Accumulated depreciation | (2,349,404 | ) | (2,493,082 | ) | |
| 4,011,609 | 4,715,748 | ||||
| Held for sale | — | 30,971 | |||
| Developments in progress | 49,207 | 38,807 | |||
| Net investment in real estate assets | 4,060,816 | 4,785,526 | |||
| Cash and cash equivalents | 32,816 | 25,138 | |||
| Receivables: | |||||
| Tenant, net of allowance for doubtful accounts of 2,337 in 2018 | 74,718 | 77,788 | |||
| Other, net of allowance for doubtful accounts of 838 in 2018 | 10,793 | 7,511 | |||
| Mortgage and other notes receivable | 4,662 | 7,672 | |||
| Investments in unconsolidated affiliates | 326,526 | 283,553 | |||
| Intangible lease assets and other assets | 129,973 | 153,665 | |||
| 4,640,304 | $ | 5,340,853 | |||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||
| Mortgage and other indebtedness, net | 3,527,015 | $ | 4,043,180 | ||
| Accounts payable and accrued liabilities | 221,010 | 218,217 | |||
| Liabilities related to assets held for sale | — | 43,716 | |||
| Total liabilities | 3,748,025 | 4,305,113 | |||
| Commitments and contingencies | |||||
| Redeemable noncontrolling interests | 2,381 | 3,575 | |||
| Shareholders' equity: | |||||
| Preferred stock, .01 par value, 15,000,000 shares authorized: | |||||
| 7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000 shares<br> outstanding | 18 | 18 | |||
| 6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares<br> outstanding | 7 | 7 | |||
| Common stock, .01 par value, 350,000,000 shares authorized, 174,115,111 and<br> 172,656,458 issued and outstanding in 2019 and 2018, respectively | 1,741 | 1,727 | |||
| Additional paid-in capital | 1,965,897 | 1,968,280 | |||
| Dividends in excess of cumulative earnings | (1,136,874 | ) | (1,005,895 | ) | |
| Total shareholders' equity | 830,789 | 964,137 | |||
| Noncontrolling interests | 59,109 | 68,028 | |||
| Total equity | 889,898 | 1,032,165 | |||
| 4,640,304 | $ | 5,340,853 |
All values are in US Dollars.
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019 and 2018
Condensed Combined Financial Statements - Unconsolidated Affiliates
(Unaudited; in thousands)
| December 31, | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | |||||||||||
| ASSETS: | ||||||||||||
| Investment in real estate assets | $ | 2,293,438 | $ | 2,097,088 | ||||||||
| Accumulated depreciation | (803,909 | ) | (674,275 | ) | ||||||||
| 1,489,529 | 1,422,813 | |||||||||||
| Developments in progress | 46,503 | 12,569 | ||||||||||
| Net investment in real estate assets | 1,536,032 | 1,435,382 | ||||||||||
| Other assets | 154,427 | 188,521 | ||||||||||
| Total assets | $ | 1,690,459 | $ | 1,623,903 | ||||||||
| LIABILITIES: | ||||||||||||
| Mortgage and other indebtedness, net | $ | 1,417,644 | $ | 1,319,949 | ||||||||
| Other liabilities | 41,007 | 39,777 | ||||||||||
| Total liabilities | 1,458,651 | 1,359,726 | ||||||||||
| OWNERS' EQUITY: | ||||||||||||
| The Company | 149,376 | 191,050 | ||||||||||
| Other investors | 82,432 | 73,127 | ||||||||||
| Total owners' equity | 231,808 | 264,177 | ||||||||||
| Total liabilities and owners’ equity | $ | 1,690,459 | $ | 1,623,903 | ||||||||
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Total revenues | $ | 58,548 | $ | 58,230 | $ | 221,512 | $ | 225,073 | ||||
| Depreciation and amortization | (20,795 | ) | (19,256 | ) | (87,193 | ) | (78,174 | ) | ||||
| Operating expenses | (18,351 | ) | (18,030 | ) | (67,784 | ) | (72,056 | ) | ||||
| Interest and other income | 400 | 356 | 1,555 | 1,415 | ||||||||
| Interest expense | (13,477 | ) | (13,958 | ) | (55,727 | ) | (52,803 | ) | ||||
| Loss on impairment | — | — | — | (89,826 | ) | |||||||
| Gain on extinguishment of debt | — | — | 83,635 | — | ||||||||
| Gain on sales of real estate assets | — | 1,928 | 630 | 3,056 | ||||||||
| Net income (loss) | $ | 6,325 | $ | 9,270 | $ | 96,628 | $ | (63,315 | ) | |||
| Company's Share for the | Company's Share for the | |||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Total revenues | $ | 30,806 | $ | 29,653 | $ | 113,500 | $ | 115,851 | ||||
| Depreciation and amortization | (12,835 | ) | (10,681 | ) | (49,434 | ) | (41,858 | ) | ||||
| Operating expenses | (9,545 | ) | (8,699 | ) | (33,780 | ) | (35,274 | ) | ||||
| Interest and other income | 297 | 246 | 1,073 | 976 | ||||||||
| Interest expense | (7,204 | ) | (6,754 | ) | (27,046 | ) | (25,603 | ) | ||||
| Loss on impairment | — | — | — | (1,022 | ) | |||||||
| Gain on sales of real estate assets | — | 1,043 | 627 | 1,607 | ||||||||
| Net income | $ | 1,519 | $ | 4,808 | $ | 4,940 | $ | 14,677 |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three Months and Year Ended December 31, 2019
EBITDA for real estate ("EBITDAre") is a non-GAAP financial measure which NAREIT defines as net income (loss) (computed in accordance with GAAP), plus interest expense, income tax expense, depreciation and amortization, losses (gains) on the dispositions of depreciable property and impairment write-downs of depreciable property, and after adjustments to reflect the Company's share of EBITDAre from unconsolidated affiliates. The Company also calculates Adjusted EBITDAre to exclude the non-controlling interest in EBITDAre of consolidated entities, and the Company's share of abandoned projects expense, gain or loss on extinguishment of debt and litigation settlement, net of taxes.
The Company presents the ratio of Adjusted EBITDAre to interest expense because the Company believes that the Adjusted EBITDAre to interest coverage ratio, along with cash flows from operating activities, investing activities and financing activities, provides investors an additional indicator of the Company's ability to incur and service debt. Adjusted EBITDAre excludes items that are not a normal result of operations which assists the Company and investors in distinguishing changes related to the growth or decline of operations at our properties. EBITDAre and Adjusted EBITDAre, as presented, may not be comparable to similar measures calculated by other companies. This non-GAAP measure should not be considered as an alternative to net income, cash from operating activities or any other measure calculated in accordance with GAAP. Pro rata amounts listed below are calculated using the Company's ownership percentage in the respective joint venture and any other applicable terms.
Ratio of Adjusted EBITDAre to Interest Expense
(Dollars in thousands)
| Three Months Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Net income (loss) | $ | 65,064 | $ | (65,621 | ) | $ | (103,467 | ) | $ | (99,229 | ) | |
| Depreciation and amortization | 59,308 | 68,140 | 257,746 | 285,401 | ||||||||
| Depreciation and amortization from unconsolidated affiliates | 12,835 | 10,681 | 49,434 | 41,858 | ||||||||
| Interest expense | 49,266 | 56,874 | 206,261 | 220,038 | ||||||||
| Interest expense from unconsolidated affiliates | 7,204 | 6,754 | 27,046 | 25,603 | ||||||||
| Income taxes | 164 | 353 | 3,413 | (909 | ) | |||||||
| Loss on impairment | 37,400 | 89,885 | 239,521 | 174,529 | ||||||||
| Loss on impairment of unconsolidated affiliates | — | — | — | 1,022 | ||||||||
| (Gain) loss on depreciable property | 584 | (1,941 | ) | (10,125 | ) | (7,484 | ) | |||||
| Gain on investments/deconsolidation | (84,356 | ) | — | (95,530 | ) | — | ||||||
| EBITDAre ^(1)^ | 147,469 | 165,125 | 574,299 | 640,829 | ||||||||
| Gain on extinguishment of debt | — | — | (71,722 | ) | — | |||||||
| Litigation settlement | (3,708 | ) | — | 61,754 | — | |||||||
| Abandoned projects | 50 | 410 | 91 | 787 | ||||||||
| Net (income) loss attributable to noncontrolling interests in other<br><br><br>consolidated subsidiaries | (108 | ) | 604 | (739 | ) | 973 | ||||||
| Noncontrolling interests' share of depreciation and amortization in<br><br><br>other consolidated subsidiaries | (1,355 | ) | (2,177 | ) | (8,191 | ) | (8,601 | ) | ||||
| Noncontrolling interests' share of interest expense in other<br><br><br>consolidated subsidiaries | (1,112 | ) | (1,837 | ) | (6,156 | ) | (7,749 | ) | ||||
| Company's share of Adjusted EBITDAre | $ | 141,236 | $ | 162,125 | $ | 549,336 | $ | 626,239 | ||||
| (1) | Includes $3,043 and $1,679 for the three months ended December 31, 2019 and 2018, respectively, and $6,565 and $13,138 for the year ended December 31, 2019 and 2018, respectively, related to sales of non-depreciable real estate assets. | |||||||||||
| --- | --- | |||||||||||
| Interest Expense: | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Interest expense | $ | 49,266 | $ | 56,874 | $ | 206,261 | $ | 220,038 | ||||
| Interest expense from unconsolidated affiliates | 7,204 | 6,754 | 27,046 | 25,603 | ||||||||
| Noncontrolling interests' share of interest expense in other<br><br><br>consolidated subsidiaries | (1,112 | ) | (1,837 | ) | (6,156 | ) | (7,749 | ) | ||||
| Company's share of interest expense | $ | 55,358 | $ | 61,791 | $ | 227,151 | $ | 237,892 | ||||
| Ratio of Adjusted EBITDAre to Interest Expense | 2.6 | x | 2.6x | 2.4 | x | 2.6x | ||||||
| Three Months Ended | Year Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| December 31, | December 31, | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Company's share of Adjusted EBITDAre | $ | 141,236 | $ | 162,125 | $ | 549,336 | $ | 626,239 | ||||
| Interest expense | (49,266 | ) | (56,874 | ) | (206,261 | ) | (220,038 | ) | ||||
| Noncontrolling interests' share of interest expense in other<br><br><br>consolidated subsidiaries | 1,112 | 1,837 | 6,156 | 7,749 | ||||||||
| Income taxes | (164 | ) | (353 | ) | (3,413 | ) | 909 | |||||
| Net amortization of deferred financing costs, debt premiums and<br><br><br>discounts | 1,988 | 1,712 | 8,316 | 7,163 | ||||||||
| Net amortization of intangible lease assets and liabilities | (597 | ) | (390 | ) | (1,809 | ) | (192 | ) | ||||
| Depreciation and interest expense from unconsolidated affiliates | (20,039 | ) | (17,435 | ) | (76,480 | ) | (67,461 | ) | ||||
| Loss on impairment of unconsolidated affiliates | — | — | — | (1,022 | ) | |||||||
| Litigation settlement | 3,708 | — | (61,754 | ) | — | |||||||
| Noncontrolling interests' share of depreciation and amortization in<br><br><br>other consolidated subsidiaries | 1,355 | 2,177 | 8,191 | 8,601 | ||||||||
| Net income (loss) attributable to noncontrolling interests in other<br><br><br>consolidated subsidiaries | 108 | (604 | ) | 739 | (973 | ) | ||||||
| Gain on outparcel sales | (3,047 | ) | (675 | ) | (6,149 | ) | (11,517 | ) | ||||
| Gain on insurance proceeds | (41 | ) | (912 | ) | (462 | ) | (912 | ) | ||||
| Equity in earnings of unconsolidated affiliates | (1,519 | ) | (4,808 | ) | (4,940 | ) | (14,677 | ) | ||||
| Distributions of earnings from unconsolidated affiliates | 6,016 | 8,965 | 21,651 | 21,539 | ||||||||
| Share-based compensation expense | 945 | 1,076 | 4,783 | 5,386 | ||||||||
| Change in estimate of uncollectable rental revenues | 1,959 | 1,544 | 3,463 | 4,817 | ||||||||
| Change in deferred tax assets | 1,144 | (199 | ) | 2,170 | (2,905 | ) | ||||||
| Changes in operating assets and liabilities | (36,277 | ) | (351 | ) | 30,327 | 14,536 | ||||||
| Cash flows provided by operating activities | $ | 48,621 | $ | 96,835 | $ | 273,864 | $ | 377,242 |
Components of Consolidated Rental Revenues
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 statement of operations. Upon the adoption of ASC 842, these amounts have been combined into a single line item. As a result of the adoption of ASC 842, the Company believes that the following presentation is useful to users of the Company’s consolidated financial statements as it depicts how amounts reported in the Company’s historical financial statements prior to the adoption of ASC 842 are reflected in the current presentation in accordance with ASC 842.
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||||
| Minimum rents | $ | 129,826 | $ | 146,910 | $ | 529,320 | $ | 588,007 | ||
| Percentage rents | 4,867 | 5,149 | 12,664 | 11,759 | ||||||
| Other rents | 3,892 | 5,136 | 10,560 | 12,034 | ||||||
| Tenant reimbursements | 43,839 | 44,712 | 188,373 | 217,313 | ||||||
| Estimate of uncollectable amounts ^(1)^ | (1,960 | ) | — | (3,464 | ) | — | ||||
| Total rental revenues | $ | 180,464 | $ | 201,907 | $ | 737,453 | $ | 829,113 | ||
| (1) | Prior to the adoption of ASC 842, uncollectable amounts were recorded as bad debt expense, which was included in property operating expense, and was $1,544 and $4,817 for the three months and year ended December 31, 2018, respectively. | |||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
Schedule of Mortgage and Other Indebtedness
(Dollars in thousands)
| Property | Non-<br><br><br>controlling<br><br><br>Interest % | Original<br><br><br>Maturity<br><br><br>Date | Optional<br><br><br>Extended<br><br><br>Maturity<br><br><br>Date | Interest<br><br><br>Rate | Balance | Balance | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed | Variable | ||||||||||||||
| Operating Properties: | |||||||||||||||
| Greenbrier Mall (1) | Dec-19 | 5.41 | % | $ | 64,801 | $ | 64,801 | $ | — | ||||||
| Hickory Point Mall (1) | Dec-19 | 5.85 | % | 27,385 | 27,385 | — | |||||||||
| Burnsville Center | Jul-20 | 6.00 | % | 64,867 | 64,867 | — | |||||||||
| Parkway Place (2) | Jul-20 | 6.50 | % | 33,290 | 33,290 | — | |||||||||
| Valley View Mall (2) | Jul-20 | 6.50 | % | 51,514 | 51,514 | — | |||||||||
| Parkdale Mall & Crossing | Mar-21 | 5.85 | % | 75,826 | 75,826 | — | |||||||||
| EastGate Mall | Apr-21 | 5.83 | % | 32,386 | 32,386 | — | |||||||||
| Hamilton Crossing & Expansion | Apr-21 | 5.99 | % | 8,522 | 8,522 | — | |||||||||
| Park Plaza Mall | Apr-21 | 5.28 | % | 78,339 | 78,339 | — | |||||||||
| Fayette Mall | May-21 | 5.42 | % | 146,857 | 146,857 | — | |||||||||
| The Outlet Shoppes at Laredo | May-21 | 4.34 | % | 41,950 | — | 41,950 | |||||||||
| Alamance Crossing - East | Jul-21 | 5.83 | % | 44,538 | 44,538 | — | |||||||||
| Asheville Mall | Sep-21 | 5.80 | % | 63,949 | 63,949 | — | |||||||||
| Cross Creek Mall | Jan-22 | 4.54 | % | 111,294 | 111,294 | — | |||||||||
| Northwoods Mall | Apr-22 | 5.08 | % | 63,772 | 63,772 | — | |||||||||
| Arbor Place | May-22 | 5.10 | % | 106,851 | 106,851 | — | |||||||||
| CBL Center | Jun-22 | 5.00 | % | 17,001 | 17,001 | — | |||||||||
| Jefferson Mall | Jun-22 | 4.75 | % | 61,943 | 61,943 | — | |||||||||
| Southpark Mall | Jun-22 | 4.85 | % | 58,431 | 58,431 | — | |||||||||
| WestGate Mall | Jul-22 | 4.99 | % | 32,773 | 32,773 | — | |||||||||
| Volusia Mall | May-24 | 4.56 | % | 48,626 | 48,626 | — | |||||||||
| The Outlet Shoppes at Gettysburg | Oct-25 | 4.80 | % | 37,140 | 37,140 | — | |||||||||
| Hamilton Place | Jun-26 | 4.36 | % | 100,456 | 100,456 | — | |||||||||
| Total Loans On Operating<br> Properties | 1,372,511 | 1,330,561 | 41,950 | ||||||||||||
| Weighted-average interest rate | 5.24 | % | 5.27 | % | 4.34 | % | |||||||||
| Construction Loan: | |||||||||||||||
| Brookfield Square Anchor Redevelopment | Oct-21 | Oct-22 | 4.60 | % | 29,400 | — | 29,400 | ||||||||
| Operating Partnership Debt: | |||||||||||||||
| Secured credit facility: | |||||||||||||||
| Secured line of credit (685,000 capacity) | Jul-23 | 3.94 | % | 310,925 | — | 310,925 | |||||||||
| Secured term loan | Jul-23 | 3.94 | % | 465,000 | — | 465,000 |
All values are in US Dollars.
| Senior unsecured notes: | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Senior unsecured 5.25% notes | Dec-23 | 5.25 | % | 450,000 | 450,000 | — | |||||||||||||
| Senior unsecured 5.25% notes (discount) | Dec-23 | 5.25 | % | (2,106 | ) | (2,106 | ) | — | |||||||||||
| Senior unsecured 4.60% notes | Oct-24 | 4.60 | % | 300,000 | 300,000 | — | |||||||||||||
| Senior unsecured 4.60% notes (discount) | Oct-24 | 4.60 | % | (40 | ) | (40 | ) | — | |||||||||||
| Senior unsecured 5.95% notes | Dec-26 | 5.95 | % | 625,000 | 625,000 | — | |||||||||||||
| Senior unsecured 5.95% notes (discount) | Dec-26 | 5.95 | % | (7,527 | ) | (7,527 | ) | — | |||||||||||
| SUBTOTAL | 1,365,327 | 1,365,327 | — | ||||||||||||||||
| Total Consolidated Debt | $ | 3,543,163 | ^(3)^ | ^^ | $ | 2,695,888 | $ | 847,275 | |||||||||||
| Weighted-average interest rate | 5.02 | % | 5.35 | % | 3.98 | % | |||||||||||||
| Plus CBL's Share Of Unconsolidated Affiliates' Debt: | |||||||||||||||||||
| The Outlet Shoppes at Atlanta - Phase II | Woodstock, GA | Feb-20 | 4.26 | % | $ | 4,443 | ^^ | ^^ | ^^ | $ | — | $ | 4,443 | ||||||
| The Outlet Shoppes of the Bluegrass - Phase II | Simpsonville, KY | Jul-20 | 4.19 | % | 9,242 | — | 9,242 | ||||||||||||
| Ambassador Town Center Infrastructure Improvements | Lafayette, LA | Aug-20 | 3.74 | % | 10,050 | ^^ | ^(4^ | ^)^ | 10,050 | — | |||||||||
| Shoppes at Eagle Point Cookeville | Cookeville, TN | Oct-20 | Oct-22 | 4.53 | % | 17,594 | — | 17,594 | |||||||||||
| Hammock Landing - Phase I | West Melbourne, FL | Feb-21 | Feb-23 | 3.94 | % | 19,904 | — | 19,904 | |||||||||||
| Hammock Landing - Phase II | West Melbourne, FL | Feb-21 | Feb-23 | 3.94 | % | 7,824 | — | 7,824 | |||||||||||
| The Pavilion at Port Orange | Port Orange, FL | Feb-21 | Feb-23 | 3.94 | % | 27,035 | — | 27,035 | |||||||||||
| Springs at Port Orange | Port Orange, FL | Dec-21 | 4.04 | % | 9,168 | — | 9,168 | ||||||||||||
| York Town Center | York, PA | Feb-22 | 4.90 | % | 15,334 | 15,334 | — | ||||||||||||
| York Town Center - Pier 1 | York, PA | Feb-22 | 4.45 | % | 598 | — | 598 | ||||||||||||
| Eastgate Mall - Self-Storage Development | Cincinnati, OH | Dec-22 | 4.45 | % | 3,110 | — | 3,110 | ||||||||||||
| West County Center | Des Peres, MO | Dec-22 | 3.40 | % | 87,384 | 87,384 | — | ||||||||||||
| Friendly Shopping Center | Greensboro, NC | Apr-23 | 3.48 | % | 46,299 | 46,299 | — | ||||||||||||
| Mid Rivers Self Storage | St. Peters, MO | Apr-23 | 4.46 | % | 2,802 | — | 2,802 | ||||||||||||
| The Shops at Friendly Center | Greensboro, NC | Apr-23 | 3.34 | % | 30,000 | 30,000 | — | ||||||||||||
| Ambassador Town Center | Lafayette, LA | Jun-23 | 3.22 | % | 28,355 | ^(5)^ | ^^ | 28,355 | — | ||||||||||
| The Outlet Shoppes at Atlanta | Woodstock, GA | Nov-23 | 4.90 | % | 35,846 | ^^ | ^^ | ^^ | 35,846 | — | |||||||||
| Parkdale Self Storage | Beaumont, TX | Jul-24 | 5.25 | % | 2,688 | — | 2,688 | ||||||||||||
| Coastal Grand | Myrtle Beach, SC | Aug-24 | 4.09 | % | 54,014 | 54,014 | — | ||||||||||||
| Coastal Grand Outparcel | Myrtle Beach, SC | Aug-24 | 4.09 | % | 2,606 | 2,606 | — | ||||||||||||
| The Outlet Shoppes of the Bluegrass | Simpsonville, KY | Dec-24 | 4.05 | % | 35,074 | 35,074 | — | ||||||||||||
| Oak Park Mall | Overland Park, KS | Oct-25 | 3.97 | % | 132,582 | 132,582 | — | ||||||||||||
| Fremaux Town Center - Phase I | Slidell, LA | Jun-26 | 3.70 | % | 43,225 | 43,225 | — | ||||||||||||
| CoolSprings Galleria | Nashville, TN | May-28 | 4.84 | % | 75,610 | 75,610 | — | ||||||||||||
| The Outlet Shoppes at El Paso | El Paso, TX | Oct-28 | 5.10 | % | 36,864 | 36,864 | — | ||||||||||||
| SUBTOTAL | 737,651 | ^(3)^ | ^^ | 633,243 | 104,408 | ||||||||||||||
| Less Noncontrolling Interests'<br><br><br>Share Of Consolidated Debt: | |||||||||||||||||||
| Hamilton Crossing & Expansion | Chattanooga, TN | 8 | % | Apr-21 | 5.99 | % | (682 | ) | (682 | ) | — | ||||||||
| CBL Center | Chattanooga, TN | 8 | % | Jun-22 | 5.00 | % | (1,360 | ) | (1,360 | ) | — | ||||||||
| The Outlet Shoppes at Gettysburg | Gettysburg, PA | 50 | % | Oct-25 | 4.80 | % | (18,570 | ) | (18,570 | ) | — | ||||||||
| Hamilton Place | Chattanooga, TN | 10 | % | Jun-26 | 4.36 | % | (10,046 | ) | (10,046 | ) | — | ||||||||
| (30,658 | ) | ^(3)^ | ^^ | (30,658 | ) | — | |||||||||||||
| Company's Share Of Consolidated And Unconsolidated Debt | $ | 4,250,156 | ^(3)^ | ^^ | $ | 3,298,473 | $ | 951,683 | |||||||||||
| Weighted-average interest rate | 4.85 | % | 5.10 | % | 4.00 | % | |||||||||||||
| Total Debt of Unconsolidated Affiliates: | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| The Outlet Shoppes at Atlanta - Phase II | Woodstock, GA | Feb-20 | 4.26 | % | $ | 4,443 | ^^ | ^^ | ^^ | $ | — | $ | 4,443 | ||||||
| The Outlet Shoppes of the Bluegrass - Phase II | Simpsonville, KY | Jul-20 | 4.19 | % | 9,242 | — | 9,242 | ||||||||||||
| Ambassador Town Center Infrastructure Improvements | Lafayette, LA | Aug-20 | 3.74 | % | 10,050 | ^^ | ^(4^ | ^)^ | 10,050 | — | |||||||||
| The Shoppes at Eagle Point | Cookeville, TN | Oct-20 | Oct-22 | 4.53 | % | 35,189 | — | 35,189 | |||||||||||
| Hammock Landing - Phase I | West Melbourne, FL | Feb-21 | Feb-23 | 3.94 | % | 39,807 | — | 39,807 | |||||||||||
| Hammock Landing - Phase II | West Melbourne, FL | Feb-21 | Feb-23 | 3.94 | % | 15,647 | — | 15,647 | |||||||||||
| The Pavilion at Port Orange | Port Orange, FL | Feb-21 | Feb-23 | 3.94 | % | 54,071 | — | 54,071 | |||||||||||
| Springs at Port Orange | Port Orange, FL | Dec-21 | 4.04 | % | 21,077 | — | 21,077 | ||||||||||||
| York Town Center | York, PA | Feb-22 | 4.90 | % | 30,668 | 30,668 | — | ||||||||||||
| York Town Center - Pier 1 | York, PA | Feb-22 | 4.45 | % | 1,196 | — | 1,196 | ||||||||||||
| EastGate Mall Self Storage | Cincinnati, OH | Dec-22 | 4.45 | % | 6,219 | — | 6,219 | ||||||||||||
| West County Center | Des Peres, MO | Dec-22 | 3.40 | % | 174,767 | 174,767 | — | ||||||||||||
| Friendly Shopping Center | Greensboro, NC | Apr-23 | 3.48 | % | 92,599 | 92,599 | — | ||||||||||||
| Mid Rivers Mall Self Storage | St. Peters, MO | Apr-23 | 4.46 | % | 5,604 | — | 5,604 | ||||||||||||
| The Shops at Friendly Center | Greensboro, NC | Apr-23 | 3.34 | % | 60,000 | 60,000 | — | ||||||||||||
| Ambassador Town Center | Lafayette, LA | Jun-23 | 3.22 | % | 43,623 | ^(5)^ | ^^ | 43,623 | — | ||||||||||
| The Outlet Shoppes at Atlanta | Woodstock, GA | Nov-23 | 4.90 | % | 71,692 | ^^ | ^^ | ^^ | 71,692 | — | |||||||||
| Parkdale Self Storage | Beaumont, TX | Jul-24 | 5.25 | % | 2,688 | — | 2,688 | ||||||||||||
| Coastal Grand | Myrtle Beach, SC | Aug-24 | 4.09 | % | 108,028 | 108,028 | — | ||||||||||||
| Coastal Grand Outparcel | Myrtle Beach, SC | Aug-24 | 4.09 | % | 5,213 | 5,213 | — | ||||||||||||
| The Outlet Shoppes of the Bluegrass | Simpsonville, KY | Dec-24 | 4.05 | % | 70,148 | 70,148 | — | ||||||||||||
| Oak Park Mall | Overland Park, KS | Oct-25 | 3.97 | % | 265,164 | 265,164 | — | ||||||||||||
| Fremaux Town Center - Phase I | Slidell, LA | Jun-26 | 3.70 | % | 66,501 | 66,501 | — | ||||||||||||
| CoolSprings Galleria | Nashville, TN | May-28 | 4.84 | % | 151,220 | 151,220 | — | ||||||||||||
| The Outlet Shoppes at El Paso | El Paso, TX | Oct-28 | 5.10 | % | 73,727 | 73,727 | — | ||||||||||||
| $ | 1,418,583 | $ | 1,223,400 | $ | 195,183 | ||||||||||||||
| Weighted-average interest rate | 4.06 | % | 4.05 | % | 4.13 | % | |||||||||||||
| (1) | The loan is in default. The Company is in discussion with the lender. | ||||||||||||||||||
| --- | --- | ||||||||||||||||||
| (2) | Subsequent to December 31, 2019, the Company utilized its secured credit facility to retire this loan. | ||||||||||||||||||
| --- | --- | ||||||||||||||||||
| (3) | See page 14 for unamortized deferred financing costs. | ||||||||||||||||||
| --- | --- | ||||||||||||||||||
| (4) | The joint venture has an interest rate swap on a notional amount of $10,050, amortizing to $9,360 over the term of the swap, related to Ambassador Town Center Infrastructure Improvements to effectively fix the interest rate on that variable-rate loan. Therefore, this amount is currently reflected as having a fixed rate. | ||||||||||||||||||
| --- | --- | ||||||||||||||||||
| (5) | The joint venture has an interest rate swap on a notional amount of $43,623, amortizing to $38,866 over the term of the swap, related to Ambassador Town Center to effectively fix the interest rate on that variable-rate loan. Therefore, this amount is currently reflected as having a fixed rate. | ||||||||||||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
Schedule of Maturities of Mortgage and Other Indebtedness
(Dollars in thousands)
Based on Maturity Dates As Though All Extension Options Available Have Been Exercised:
| Year | Consolidated<br><br><br>Debt | CBL's Share of<br><br><br>Unconsolidated<br><br><br>Affiliates' Debt | Noncontrolling<br><br><br>Interests' Share<br><br><br>of Consolidated<br><br><br>Debt | CBL's Share of<br><br><br>Consolidated and<br><br><br>Unconsolidated<br><br><br>Debt | % of Total | Weighted<br><br><br>Average<br><br><br>Interest<br><br><br>Rate | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2019 ^(1)^ | $ | 92,186 | $ | — | $ | — | $ | 92,186 | 2.17 | % | 5.54 | % | |||||
| 2020 | 149,671 | 23,735 | — | 173,406 | 4.08 | % | 5.97 | % | |||||||||
| 2021 | 492,366 | 9,168 | (682 | ) | 500,852 | 11.78 | % | 5.47 | % | ||||||||
| 2022 | 481,465 | 124,019 | (1,360 | ) | 604,124 | 14.21 | % | 4.63 | % | ||||||||
| 2023 | 1,225,925 | 198,066 | — | 1,423,991 | 33.50 | % | 4.34 | % | |||||||||
| 2024 | 348,626 | 94,382 | — | 443,008 | 10.42 | % | 4.49 | % | |||||||||
| 2025 | 37,140 | 132,582 | (18,570 | ) | 151,152 | 3.56 | % | 4.07 | % | ||||||||
| 2026 | 725,457 | 43,225 | (10,046 | ) | 758,636 | 17.85 | % | 5.63 | % | ||||||||
| 2028 | — | 112,474 | — | 112,474 | 2.65 | % | 4.93 | % | |||||||||
| Face Amount of Debt | 3,552,836 | 737,651 | (30,658 | ) | 4,259,829 | 100.23 | % | 4.85 | % | ||||||||
| Discounts | (9,673 | ) | — | — | (9,673 | ) | (0.23 | )% | — | % | |||||||
| Total | $ | 3,543,163 | $ | 737,651 | $ | (30,658 | ) | $ | 4,250,156 | 100.00 | % | 4.85 | % | ||||
| Based on Original Maturity Dates: | |||||||||||||||||
| Year | Consolidated<br><br><br>Debt | CBL's Share of<br><br><br>Unconsolidated<br><br><br>Affiliates' Debt | Noncontrolling<br><br><br>Interests' Share<br><br><br>of Consolidated<br><br><br>Debt | CBL's Share of<br><br><br>Consolidated and<br><br><br>Unconsolidated<br><br><br>Debt | % of Total | Weighted<br><br><br>Average<br><br><br>Interest<br><br><br>Rate | |||||||||||
| 2019 ^(1)^ | $ | 92,186 | $ | — | $ | — | $ | 92,186 | 2.17 | % | 5.54 | % | |||||
| 2020 | 149,671 | 41,329 | — | 191,000 | 4.49 | % | 5.84 | % | |||||||||
| 2021 | 521,766 | 63,931 | (682 | ) | 585,015 | 13.76 | % | 5.28 | % | ||||||||
| 2022 | 452,065 | 106,425 | (1,360 | ) | 557,130 | 13.11 | % | 4.63 | % | ||||||||
| 2023 | 1,225,925 | 143,303 | — | 1,369,228 | 32.22 | % | 4.35 | % | |||||||||
| 2024 | 348,626 | 94,382 | — | 443,008 | 10.42 | % | 4.49 | % | |||||||||
| 2025 | 37,140 | 132,582 | (18,570 | ) | 151,152 | 3.56 | % | 4.07 | % | ||||||||
| 2026 | 725,457 | 43,225 | (10,046 | ) | 758,636 | 17.85 | % | 5.63 | % | ||||||||
| 2028 | — | 112,474 | — | 112,474 | 2.65 | % | 4.93 | % | |||||||||
| Face Amount of Debt | 3,552,836 | 737,651 | (30,658 | ) | 4,259,829 | 100.23 | % | 4.85 | % | ||||||||
| Discounts | (9,673 | ) | — | — | (9,673 | ) | (0.23 | )% | — | % | |||||||
| Total | $ | 3,543,163 | $ | 737,651 | $ | (30,658 | ) | $ | 4,250,156 | 100.00 | % | 4.85 | % | ||||
| (1) | Represents two non-recourse loans that are in default. | ||||||||||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
| Debt Covenant Compliance Ratios ^(1)^ | Required | Actual | |||
|---|---|---|---|---|---|
| Total debt to total assets | < 60% | ^^ | 51 | % | |
| Secured debt to total assets | < 40% | ^(2)^ | 32 | % | |
| Total unencumbered assets to unsecured debt | > 150% | ^^ | 172 | % | |
| Consolidated income available for debt service to<br><br><br>annual debt service charge | > 1.5x | ^^ | 2.3 | x | |
| (1) | The debt covenant compliance ratios for the secured line of credit, the secured term loan and the senior unsecured notes are defined and computed on the same basis. | ||||
| --- | --- | ||||
| (2) | Secured debt to total assets must be less than 40% for the 2026 Notes. Secured debt to total assets must be less than 45% for the 2023 Notes and the 2024 Notes until January 1, 2020, after which the required ratio will be reduced to 40%. | ||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
Unencumbered Consolidated Portfolio Statistics
| Sales Per Square<br><br><br>Foot for the Year<br><br><br>Ended ^(1) (2)^ | Occupancy ^(2)^ | % of Consolidated<br><br><br>Unencumbered<br><br><br>NOI for<br><br><br>the Year Ended | ^^ | ^^ | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 12/31/19 | 12/31/18 | 12/31/19 | 12/31/18 | 12/31/19 | ^(3^ | ^)^ | |||||||||
| Unencumbered consolidated Properties: | |||||||||||||||
| Tier 1 Malls | $ | 382 | $ | 368 | 88.6 | % | 88.4 | % | 16.3 | % | ^(4^ | ^)^ | |||
| Tier 2 Malls | 330 | 329 | 84.9 | % | 87.5 | % | 32.4 | % | |||||||
| Tier 3 Malls | 278 | 280 | 86.9 | % | 92.2 | % | 30.5 | % | |||||||
| Total Malls | 312 | 311 | 86.4 | % | 90.0 | % | 79.2 | % | |||||||
| Total Associated Centers | N/A | N/A | 96.0 | % | 97.2 | % | 15.6 | % | |||||||
| Total Community Centers | N/A | N/A | 96.8 | % | 99.0 | % | 5.0 | % | |||||||
| Total Office Buildings & Other | N/A | N/A | 100.0 | % | 93.6 | % | 0.2 | % | |||||||
| Total Unencumbered Consolidated Portfolio | $ | 312 | $ | 311 | 90.1 | % | 92.8 | % | 100.0 | % | |||||
| (1) | Represents same-center sales per square foot for mall tenants 10,000 square feet or less for stabilized malls. | ||||||||||||||
| --- | --- | ||||||||||||||
| (2) | Operating metrics are included for unencumbered consolidated operating properties and do not include sales or occupancy of unencumbered parcels. | ||||||||||||||
| --- | --- | ||||||||||||||
| (3) | Our consolidated unencumbered properties generated approximately 27.4% of total consolidated NOI of $501,171,170 (which excludes NOI related to dispositions) for the year ended December 31, 2019. | ||||||||||||||
| --- | --- | ||||||||||||||
| (4) | NOI is derived from unencumbered Tier One Malls as well as unencumbered portions of Tier One Malls that are otherwise secured by a loan. The unencumbered portions include outparcels, anchors and former anchors that have been redeveloped. | ||||||||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
Mall Portfolio Statistics
| TIER 1<br>Sales ≥ 375 per square foot | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property | Total<br><br><br>Center<br><br><br>SF ^(1)^ | Sales Per Square<br><br><br>Foot for the Twelve<br><br><br>Months Ended ^(2)^ | Mall Occupancy | % of Total<br><br><br>Mall NOI<br><br><br>for the<br><br><br>Year Ended | |||||||||||||
| 12/31/19 | 12/31/18 | 12/31/19 | 12/31/18 | 12/31/19 | ^(3^ | ^)^ | |||||||||||
| Coastal Grand | 1,037,498 | ||||||||||||||||
| CoolSprings Galleria | 1,166,203 | ||||||||||||||||
| Cross Creek Mall | 764,239 | ||||||||||||||||
| Fayette Mall | 1,158,534 | ||||||||||||||||
| Friendly Center and The Shops at<br> Friendly | 1,368,167 | ||||||||||||||||
| Hamilton Place | 1,160,596 | ||||||||||||||||
| Hanes Mall | 1,435,209 | ||||||||||||||||
| Imperial Valley | 762,695 | ||||||||||||||||
| Jefferson Mall | 783,639 | ||||||||||||||||
| Mall del Norte | 1,219,236 | ||||||||||||||||
| Northwoods Mall | 748,269 | ||||||||||||||||
| Oak Park Mall | 1,518,266 | ||||||||||||||||
| Old Hickory Mall | 547,099 | ||||||||||||||||
| Parkway Place | 647,804 | ||||||||||||||||
| The Outlet Shoppes at Atlanta | 404,906 | ||||||||||||||||
| The Outlet Shoppes at El Paso | 433,047 | ||||||||||||||||
| The Outlet Shoppes of the Bluegrass | 428,072 | ||||||||||||||||
| Richland Mall | 693,450 | ||||||||||||||||
| Southpark Mall | 675,640 | ||||||||||||||||
| St. Clair Square | 1,067,611 | ||||||||||||||||
| Sunrise Mall | 799,397 | ||||||||||||||||
| West County Center | 1,196,804 | ||||||||||||||||
| Total Tier 1 Malls | 20,016,381 | $ | 463 | $ | 447 | 93.2 | % | 94.8 | % | 44.5 | % |
All values are in US Dollars.
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
Mall Portfolio Statistics (continued)
| TIER 2<br>Sales of ≥ 300 to < 375 per square foot | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property | Total<br><br><br>Center<br><br><br>SF ^(1)^ | Sales Per Square<br><br><br>Foot for the Twelve<br><br><br>Months Ended ^(2)^ | Mall Occupancy | % of Total<br><br><br>Mall NOI<br><br><br>for the<br><br><br>Year Ended | |||||||||||||
| 12/31/19 | 12/31/18 | 12/31/19 | 12/31/18 | 12/31/19 | ^(3^ | ^)^ | |||||||||||
| Arbor Place | 1,162,064 | ||||||||||||||||
| Asheville Mall | 973,367 | ||||||||||||||||
| Dakota Square Mall | 757,509 | ||||||||||||||||
| East Towne Mall | 801,248 | ||||||||||||||||
| EastGate Mall | 837,550 | ||||||||||||||||
| Frontier Mall | 520,276 | ||||||||||||||||
| Governor's Square | 685,549 | ||||||||||||||||
| Harford Mall | 503,774 | ||||||||||||||||
| Kirkwood Mall | 815,445 | ||||||||||||||||
| Layton Hills Mall | 482,116 | ||||||||||||||||
| Mayfaire Town Center | 650,766 | ||||||||||||||||
| Northpark Mall | 896,040 | ||||||||||||||||
| The Outlet Shoppes at Laredo (4) | 358,122 | ||||||||||||||||
| Park Plaza | 543,033 | ||||||||||||||||
| Parkdale Mall | 1,151,375 | ||||||||||||||||
| Pearland Town Center | 711,787 | ||||||||||||||||
| Post Oak Mall | 788,165 | ||||||||||||||||
| South County Center | 1,028,623 | ||||||||||||||||
| Southaven Towne Center | 607,523 | ||||||||||||||||
| Turtle Creek Mall | 844,977 | ||||||||||||||||
| Valley View Mall | 863,443 | ||||||||||||||||
| Volusia Mall | 1,060,279 | ||||||||||||||||
| West Towne Mall | 829,715 | ||||||||||||||||
| WestGate Mall | 950,777 | ||||||||||||||||
| Westmoreland Mall | 976,689 | ||||||||||||||||
| York Galleria | 748,868 | ||||||||||||||||
| Total Tier 2 Malls | 20,549,080 | $ | 342 | $ | 342 | 89.0 | % | 90.3 | % | 39.1 | % |
All values are in US Dollars.
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
Mall Portfolio Statistics (continued)
| TIER 3<br>Sales < 300 per square foot | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property | Total<br><br><br>Center<br><br><br>SF ^(1)^ | Sales Per Square<br><br><br>Foot for the Twelve<br><br><br>Months Ended ^(2)^ | Mall Occupancy | % of Total<br><br><br>Mall NOI<br><br><br>for the<br><br><br>Year Ended | |||||||||||||
| 12/31/19 | 12/31/18 | 12/31/19 | 12/31/18 | 12/31/19 | ^(3^ | ^)^ | |||||||||||
| Alamance Crossing | 904,704 | ||||||||||||||||
| Brookfield Square | 864,317 | ||||||||||||||||
| Burnsville Center | 1,045,053 | ||||||||||||||||
| CherryVale Mall | 862,807 | ||||||||||||||||
| Eastland Mall | 732,647 | ||||||||||||||||
| Kentucky Oaks Mall | 717,203 | ||||||||||||||||
| Laurel Park Place | 491,211 | ||||||||||||||||
| Meridian Mall | 944,172 | ||||||||||||||||
| Mid Rivers Mall | 1,039,834 | ||||||||||||||||
| Monroeville Mall | 985,069 | ||||||||||||||||
| Northgate Mall | 660,786 | ||||||||||||||||
| The Outlet Shoppes at Gettysburg | 249,937 | ||||||||||||||||
| Stroud Mall | 414,441 | ||||||||||||||||
| Total Tier 3 Malls | 9,912,181 | $ | 276 | $ | 277 | 84.5 | % | 88.9 | % | 14.5 | % | ||||||
| Total Mall Portfolio | 50,477,642 | $ | 386 | $ | 379 | 89.8 | % | 91.9 | % | 98.1 | % |
All values are in US Dollars.
| Excluded Malls ^(5)^ | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property | Category | Location | Total<br><br><br>Center<br><br><br>SF ^(1)^ | Sales Per Square<br><br><br>Foot for the Twelve<br><br><br>Months Ended ^(2)^ | Mall Occupancy | % of Total<br><br><br>Mall NOI<br><br><br>for the<br><br><br>Year Ended | |||||||
| 12/31/19 | 12/31/18 | 12/31/19 | 12/31/18 | 12/31/19 | ^(3^ | ^)^ | |||||||
| Lender Malls: | |||||||||||||
| Greenbrier Mall | Lender | Chesapeake, VA | 897,036 | ||||||||||
| Hickory Point Mall | Lender | Forsyth, IL | 727,848 | ||||||||||
| Total Excluded Malls | 1,624,884 | N/A | N/A | N/A | N/A | 1.9 | % | ||||||
| (1) | Total Center Square Footage includes square footage of shops, owned and leased adjacent junior anchors and anchor locations and leased freestanding locations immediately adjacent to the center. | ||||||||||||
| --- | --- | ||||||||||||
| (2) | Represents same-center sales per square foot for mall tenants 10,000 square feet or less for stabilized malls. | ||||||||||||
| --- | --- | ||||||||||||
| (3) | Based on total mall NOI of $520,657,915 for the malls listed in the table above for the twelve months ended December 31, 2019. | ||||||||||||
| --- | --- | ||||||||||||
| (4) | The Outlet Shoppes at Laredo is a non-stabilized mall and is excluded from Sales Per Square Foot. | ||||||||||||
| --- | --- | ||||||||||||
| (5) | Excluded Malls represent Lender Malls, for which operational metrics are excluded, and are malls which we are working or intend to work with the lender on the terms of the loan secured by the related property, or after attempting a restructure, we have determined that the property no longer meets our criteria for long-term investment. | ||||||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet
| Property Type | Square<br><br><br>Feet | Prior Gross<br><br><br>Rent PSF | New Initial<br><br><br>Gross Rent<br><br><br>PSF | % Change<br><br><br>Initial | New Average<br><br><br>Gross Rent<br><br><br>PSF^(2)^ | % Change<br><br><br>Average | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter: | ||||||||||||||
| All Property Types ^(1)^ | 669,068 | $ | 35.64 | $ | 31.32 | (12.1 | )% | $ | 31.69 | (11.1 | )% | |||
| Stabilized Malls | 643,605 | 35.97 | 31.28 | (13.0 | )% | 31.61 | (12.1 | )% | ||||||
| New leases | 137,009 | 24.64 | 25.74 | 4.5 | % | 26.81 | 8.8 | % | ||||||
| Renewal leases | 506,596 | 39.03 | 32.78 | (16.0 | )% | 32.91 | (15.7 | )% | ||||||
| Year-to-Date: | ||||||||||||||
| All Property Types ^(1)^ | 2,075,440 | $ | 36.75 | $ | 33.30 | (9.4 | )% | $ | 33.81 | (8.0 | )% | |||
| Stabilized Malls | 1,922,548 | 37.45 | 33.76 | (9.9 | )% | 34.25 | (8.6 | )% | ||||||
| New leases | 295,391 | 35.02 | 36.28 | 3.6 | % | 38.21 | 9.1 | % | ||||||
| Renewal leases | 1,627,157 | 37.90 | 33.30 | (12.1 | )% | 33.53 | (11.5 | )% | ||||||
| Average Annual Base Rents Per Square Foot ^(3)^ By Property Type For Small Shop Space Less Than 10,000 Square Feet: | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| Total Leasing Activity: | ||||||||||||||
| Square<br><br><br>Feet | As of December 31, | |||||||||||||
| Quarter: | 2019 | 2018 | ||||||||||||
| Operating portfolio: | Same-center stabilized malls | $ | 31.85 | $ | 32.64 | |||||||||
| New leases | 286,230 | Stabilized malls | 31.95 | 32.59 | ||||||||||
| Renewal leases | 875,987 | Non-stabilized malls ^(4)^ | 24.25 | 25.02 | ||||||||||
| Development portfolio: | Associated centers | 13.84 | 13.82 | |||||||||||
| New leases | 101,074 | Community centers | 17.04 | 16.72 | ||||||||||
| Total leased | 1,263,291 | Office buildings | 19.04 | 17.22 | ||||||||||
| Year-to-Date: | ||||||||||||||
| Operating Portfolio: | ||||||||||||||
| New leases | 1,054,336 | |||||||||||||
| Renewal leases | 2,502,001 | |||||||||||||
| Development Portfolio: | ||||||||||||||
| New leases | 306,688 | |||||||||||||
| Total leased | 3,863,025 | |||||||||||||
| (1) | Includes stabilized malls, associated centers, community centers and other. | |||||||||||||
| --- | --- | |||||||||||||
| (2) | Average gross rent does not incorporate allowable future increases for recoverable common area expenses. | |||||||||||||
| --- | --- | |||||||||||||
| (3) | Average annual base rents per square foot are based on contractual rents in effect as of December 31, 2019, including the impact of any rent concessions. Average base rents for associated centers, community centers and office buildings include all leased space, regardless of size. | |||||||||||||
| --- | --- | |||||||||||||
| (4) | Includes The Outlet Shoppes at Laredo as of December 31, 2019 and December 31, 2018. | |||||||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet
For the Year Ended December 31, 2019 Based on Commencement Date
| Number<br><br><br>of<br><br><br>Leases | Square<br><br><br>Feet | Term<br><br><br>(in<br><br><br>years) | Initial<br><br><br>Rent<br><br><br>PSF | Average<br><br><br>Rent<br><br><br>PSF | Expiring<br><br><br>Rent<br><br><br>PSF | Initial Rent<br><br><br>Spread | Average Rent<br><br><br>Spread | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Commencement 2019: | ||||||||||||||||||||||
| New | 106 | 222,063 | 7.22 | $ | 42.86 | $ | 45.21 | $ | 44.07 | $ | (1.21 | ) | (2.7 | )% | $ | 1.14 | 2.6 | % | ||||
| Renewal | 539 | 1,656,150 | 2.72 | 31.43 | 31.65 | 35.98 | (4.55 | ) | (12.6 | )% | (4.33 | ) | (12.0 | )% | ||||||||
| Commencement 2019 Total | 645 | 1,878,213 | 3.46 | 32.78 | 33.26 | 36.94 | (4.16 | ) | (11.3 | )% | (3.68 | ) | (10.0 | )% | ||||||||
| Commencement 2020: | ||||||||||||||||||||||
| New | 48 | 173,023 | 7.55 | 28.88 | 30.41 | 24.92 | 3.96 | 15.9 | % | 5.49 | 22.0 | % | ||||||||||
| Renewal | 217 | 667,644 | 2.73 | 30.06 | 30.37 | 34.50 | (4.44 | ) | (12.9 | )% | (4.13 | ) | (12.0 | )% | ||||||||
| Commencement 2020 Total | 265 | 840,667 | 3.60 | 29.81 | 30.38 | 32.53 | (2.72 | ) | (8.4 | )% | (2.15 | ) | (6.6 | )% | ||||||||
| Total 2019/2020 | 910 | 2,718,880 | 3.50 | $ | 31.86 | $ | 32.37 | $ | 35.57 | $ | (3.71 | ) | (10.4 | )% | $ | (3.20 | ) | (9.0 | )% |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
Top 25 Tenants Based On Percentage Of Total Annualized Revenues
| Tenant | Number of<br><br><br>Stores | Square<br><br><br>Feet | Percentage<br><br><br>of Total<br><br><br>Revenues ^(1)^ | |||||
|---|---|---|---|---|---|---|---|---|
| 1 | L Brands, Inc. ^(2)^ | 128 | 763,091 | 4.25 | % | |||
| 2 | Signet Jewelers Limited ^(3)^ | 156 | 227,731 | 2.87 | % | |||
| 3 | Foot Locker, Inc. | 109 | 510,740 | 2.78 | % | |||
| 4 | AE Outfitters Retail Company | 66 | 414,111 | 2.18 | % | |||
| 5 | Dick's Sporting Goods, Inc. ^(4)^ | 25 | 1,396,850 | 1.68 | % | |||
| 6 | Ascena Retail Group, Inc. ^(5)^ | 114 | 544,193 | 1.52 | % | |||
| 7 | H & M | 45 | 956,736 | 1.50 | % | |||
| 8 | Genesco, Inc. ^(6)^ | 103 | 198,305 | 1.47 | % | |||
| 9 | The Gap, Inc. | 58 | 662,339 | 1.42 | % | |||
| 10 | Luxottica Group, S.P.A. ^(7)^ | 101 | 230,634 | 1.31 | % | |||
| 11 | Finish Line, Inc. | 43 | 224,603 | 1.21 | % | |||
| 12 | Express Fashions | 39 | 321,142 | 1.19 | % | |||
| 13 | The Buckle, Inc. | 43 | 223,308 | 1.12 | % | |||
| 14 | Forever 21 Retail, Inc. | 19 | 353,805 | 1.01 | % | |||
| 15 | Abercrombie & Fitch, Co. | 42 | 276,693 | 1.00 | % | |||
| 16 | JC Penney Company, Inc. ^(8)^ | 47 | 5,695,980 | 0.95 | % | |||
| 17 | Cinemark | 9 | 467,190 | 0.91 | % | |||
| 18 | Barnes & Noble Inc. | 17 | 521,273 | 0.89 | % | |||
| 19 | Shoe Show, Inc. | 40 | 501,248 | 0.87 | % | |||
| 20 | Hot Topic, Inc. | 99 | 229,918 | 0.87 | % | |||
| 21 | The Children's Place Retail Stores, Inc. | 41 | 181,032 | 0.76 | % | |||
| 22 | Claire's Stores, Inc. | 79 | 99,647 | 0.73 | % | |||
| 23 | PSEB Group ^(9)^ | 38 | 182,860 | 0.69 | % | |||
| 24 | Ulta | 26 | 268,697 | 0.69 | % | |||
| 25 | Macy's Inc. ^(10)^ | 31 | 4,536,623 | 0.66 | % | |||
| 1,518 | 19,988,749 | 34.53 | % | |||||
| (1) | Includes the Company's proportionate share of revenues from unconsolidated affiliates based on the Company's ownership percentage in the respective joint venture and any other applicable terms. | |||||||
| --- | --- | |||||||
| (2) | L Brands, Inc. operates Bath & Body Works, PINK, Victoria's Secret and White Barn Candle. | |||||||
| --- | --- | |||||||
| (3) | Signet Jewelers Limited operates Belden Jewelers, Jared Jewelers, JB Robinson, Kay Jewelers, LeRoy's Jewelers, Marks & Morgan, Osterman's Jewelers, Peoples, Piercing Pagoda, Rogers Jewelers, Shaw's Jewelers, Ultra Diamonds and Zales. | |||||||
| --- | --- | |||||||
| (4) | Dick's Sporting Goods, Inc. operates Dick's Sporting Goods, Field & Stream and Golf Galaxy. | |||||||
| --- | --- | |||||||
| (5) | Ascena Retail Group, Inc. operates Ann Taylor, Catherines, Justice, Lane Bryant, LOFT and Lou & Grey. Ascena closed all Dress Barn stores as of December 31, 2019. | |||||||
| --- | --- | |||||||
| (6) | Genesco Inc. operates Clubhouse, Hat Shack, Hat Zone, Johnston & Murphy, Journey's, Shi by Journey's and Underground by Journeys. Genesco sold all Lids, Lids Locker Room and Lids Sports Group stores in February 2019. | |||||||
| --- | --- | |||||||
| (7) | Luxottica Group, S.P.A. operates Lenscrafters, Pearle Vision and Sunglass Hut. | |||||||
| --- | --- | |||||||
| (8) | JC Penney Company, Inc. owns 29 of these stores. | |||||||
| --- | --- | |||||||
| (9) | PSEB Group operates Eddie Bauer and PacSun. | |||||||
| --- | --- | |||||||
| (10) | Macy's, Inc. owns 20 of these stores | |||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three Months and Year Ended December 31, 2019
Capital Expenditures
(In thousands)
| Three Months Ended<br><br><br>December 31, | Year Ended<br><br><br>December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2019 | 2018 | 2019 | 2018 | |||||
| Tenant allowances ^(1)^ | $ | 14,494 | $ | 5,163 | $ | 36,325 | $ | 40,362 |
| Renovations ^(2)^ | — | 400 | — | 963 | ||||
| Deferred maintenance: ^(3)^ | ||||||||
| Parking lot and parking lot lighting | 3,694 | 609 | 4,223 | 1,480 | ||||
| Roof repairs and replacements | 1,030 | 647 | 5,787 | 4,341 | ||||
| Other capital expenditures | 5,628 | 7,722 | 20,722 | 22,757 | ||||
| Total deferred maintenance expenditures | 10,352 | 8,978 | 30,732 | 28,578 | ||||
| Total capital expenditures | $ | 24,846 | $ | 14,541 | $ | 67,057 | $ | 69,903 |
| (1) | Tenant allowances, sometimes made to third-generation tenants, are recovered through minimum rents from the tenants over the term of the lease. | |||||||
| --- | --- | |||||||
| (2) | Renovation capital expenditures for remodelings and upgrades to enhance our competitive position in the market area. A portion of these expenditures covering items such as new floor coverings, painting, lighting and new seating areas are also recovered through tenant billings. The costs of other items such as new entrances, new ceilings and skylights are not recovered from tenants. We estimate that 30% of our renovation expenditures are recoverable from our tenants over a ten to fifteen-year period. | |||||||
| --- | --- | |||||||
| (3) | The capital expenditures incurred for maintenance such as parking lot repairs, parking lot lighting and roofs are classified as deferred maintenance expenditures. These expenditures are billed to tenants as common area maintenance expense and the majority is recovered over a five to fifteen year period. | |||||||
| --- | --- |
Deferred Leasing Costs Capitalized
(In thousands)
| 2019 | 2018 | |||
|---|---|---|---|---|
| Quarter ended: | ||||
| March 31, | $ | 565 | $ | 1,810 |
| June 30, | 444 | 636 | ||
| September 30, | 790 | 689 | ||
| December 31, | 498 | 983 | ||
| $ | 2,297 | $ | 4,118 |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
Properties Opened During the Year Ended December 31, 2019
(Dollars in thousands)
| CBL's Share of | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property | Location | CBL<br><br><br>Ownership<br><br><br>Interest | Total<br><br><br>Project<br><br><br>Square Feet | Total<br><br><br>Cost ^(1)^ | Cost to<br><br><br>Date ^(2)^ | 2019<br><br><br>Cost | Opening<br><br><br>Date | Initial<br><br><br>Unleveraged<br><br><br>Yield | ||||||||
| Outparcel Development: | ||||||||||||||||
| Mid Rivers Mall - CubeSmart Self-storage ^(3)^ | St. Peters, MO | 50 | % | 93,540 | $ | 4,122 | $ | 3,646 | $ | 973 | Jan-19 | 9.0 | % | |||
| (1) | Total Cost is presented net of reimbursements to be received. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Cost to Date does not reflect reimbursements until they are received. | |||||||||||||||
| --- | --- | |||||||||||||||
| (3) | Yield is based on the expected yield upon stabilization. | |||||||||||||||
| --- | --- |
Redevelopments Completed During the Year Ended December 31, 2019
(Dollars in thousands)
| CBL's Share of | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property | Location | CBL<br><br><br>Ownership<br><br><br>Interest | Total<br><br><br>Project<br><br><br>Square Feet | Total<br><br><br>Cost ^(1)^ | Cost to<br><br><br>Date ^(2)^ | 2019<br><br><br>Cost | Opening<br><br><br>Date | Initial<br><br><br>Unleveraged<br><br><br>Yield | ||||||||
| Mall Redevelopments: | ||||||||||||||||
| Brookfield Square Sears Redevelopment - (Whirlyball, Movie Tavern by Marcus Theaters) ^(3)^ | Brookfield, WI | 100 | % | 130,075 | $ | 25,233 | $ | 21,946 | $ | 11,112 | Jul/Oct-19 | 10.1 | % | |||
| Dakota Square Mall - HomeGoods | Minot, ND | 100 | % | 28,406 | 2,478 | 2,293 | 1,315 | Apr-19 | 14.4 | % | ||||||
| East Towne Mall - Portillo's | Madison, WI | 100 | % | 9,000 | 2,956 | 2,487 | 71 | Feb-19 | 8.0 | % | ||||||
| Friendly Center - O2 Fitness | Greensboro, NC | 50 | % | 27,048 | 2,285 | 1,843 | 436 | Apr-19 | 10.3 | % | ||||||
| Hanes Mall - Dave & Buster's | Winston-Salem, NC | 100 | % | 44,922 | 5,932 | 4,559 | 2,413 | May-19 | 11.0 | % | ||||||
| Laurel Park Place Carsons Redevelopment - Dunhams | Livonia, MI | 100 | % | 45,000 | 3,886 | 3,643 | 3,621 | Nov-19 | 5.9 | % | ||||||
| Northgate Mall - Sears Auto Center Redevelopment (Aubrey's/Panda Express) | Chattanooga, TN | 100 | % | 10,000 | 1,797 | 530 | 17 | Feb-19 | 7.6 | % | ||||||
| Parkdale Mall - Macy's Redevelopment (Dick's Sporting Goods/Five Below/HomeGoods) ^(3)^ | Beaumont, TX | 100 | % | 86,136 | 20,899 | 16,819 | 10,815 | May-19 | 6.4 | % | ||||||
| Volusia Mall - Sears Auto Center Redevelopment (Bonefish Grill/Metro Diner) | Daytona Beach, FL | 100 | % | 23,341 | 9,795 | 5,678 | 264 | Apr-19 | 8.0 | % | ||||||
| Total Redevelopment Completed | 403,928 | $ | 75,261 | $ | 59,798 | $ | 30,064 | |||||||||
| (1) | Total Cost is presented net of reimbursements to be received. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Cost to Date does not reflect reimbursements until they are received. | |||||||||||||||
| --- | --- | |||||||||||||||
| (3) | The return reflected represents a pro forma incremental return as Total Cost excludes the cost related to the acquisition of the Sears (Brookfield) and Macy's (Parkdale) buildings in 2017. | |||||||||||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
Properties Under Development at December 31, 2019
(Dollars in thousands)
| CBL's Share of | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Property | Location | CBL<br><br><br>Ownership<br><br><br>Interest | Total<br><br><br>Project<br><br><br>Square Feet | Total<br><br><br>Cost ^(1)^ | Cost to<br><br><br>Date ^(2)^ | 2019<br><br><br>Cost | Expected<br><br><br>Opening<br><br><br>Date | Initial<br><br><br>Unleveraged<br><br><br>Yield | ||||||||
| Outparcel Development: | ||||||||||||||||
| Fremaux Town Center - Old Navy | Slidell, LA | 90 | % | 12,467 | $ | 1,919 | $ | 1,454 | $ | 1,454 | Q2 '20 | 9.2 | % | |||
| Hamilton Place - Self Storage ^(3)^ | Chattanooga, TN | 60 | % | 68,875 | 5,824 | 1,119 | 1,119 | Q2 '20 | 8.7 | % | ||||||
| Mayfaire Town Center - First Watch | Wilmington, NC | 100 | % | 6,300 | 2,267 | 366 | 366 | Q3 '20 | 10.1 | % | ||||||
| Parkdale Mall - Self Storage ^(3)^ | Beaumont, TX | 50 | % | 69,341 | 4,435 | 2,504 | 2,504 | Q1 '20 | 10.2 | % | ||||||
| Pearland Town Center - HCA Offices | Pearland, TX | 100 | % | 48,416 | 14,134 | 857 | 857 | Q1 '21 | 9.5 | % | ||||||
| 205,399 | 28,579 | 6,300 | 6,300 | |||||||||||||
| Mall Redevelopments: | ||||||||||||||||
| CherryVale Mall - Sears Redevelopment (Tilt) | Rockford, IL | 100 | % | 114,118 | 3,508 | 2,902 | 2,902 | Q1 '20 | 8.3 | % | ||||||
| Coastal Grand - DSG/Golf Galaxy & Flip N' Fly | Myrtle Beach, SC | 50 | % | 132,727 | 6,820 | 1,066 | 1,066 | Q3 '20 | 11.6 | % | ||||||
| Dakota Square Mall - Herberger's Redevelopment (Ross/shops) | Minot, ND | 100 | % | 30,096 | 6,410 | 4,349 | 4,206 | Q1 '20 | 7.2 | % | ||||||
| Hamilton Place - Sears Redevelopment (Cheesecake Factory/Dick's Sporting Goods/Dave & Buster's/Hotel/Office) ^(4)^ | Chattanooga, TN | 100 | % | 195,166 | 38,715 | 25,856 | 16,249 | Q2/Q3 '20 | 7.8 | % | ||||||
| Mall del Norte - Forever 21 Redevelopment (Main Event) | Laredo, TX | 100 | % | 81,242 | 10,514 | 5,659 | 5,614 | Q3 '19/Q2 '20 | 9.3 | % | ||||||
| 553,349 | 65,967 | 39,832 | 30,037 | |||||||||||||
| Total Properties Under<br><br><br>Development | 758,748 | $ | 94,546 | $ | 46,132 | $ | 36,337 | |||||||||
| (1) | Total Cost is presented net of reimbursements to be received. | |||||||||||||||
| --- | --- | |||||||||||||||
| (2) | Cost to Date does not reflect reimbursements until they are received. | |||||||||||||||
| --- | --- | |||||||||||||||
| (3) | Yield is based on expected yield upon stabilization. | |||||||||||||||
| --- | --- | |||||||||||||||
| (4) | The return reflected represents a pro forma incremental return as Total Cost excludes the cost related to the acquisition of the Sears (Hamilton Place) building in 2017. | |||||||||||||||
| --- | --- |
Shadow Pipeline of Properties Under Development at December 31, 2019
(Dollars in thousands)
| Property | Location | CBL<br><br><br>Ownership<br><br><br>Interest | Total<br><br><br>Project<br><br><br>Square Feet | CBL's Share of<br><br><br>Estimated<br><br><br>Total<br><br><br>Cost ^(1)^ | Expected<br><br><br>Opening<br><br><br>Date | Initial<br><br><br>Unleveraged<br><br><br>Yield | ||
|---|---|---|---|---|---|---|---|---|
| Mall Development: | ||||||||
| Cross Creek Sears Redevelopment - Dave & Buster's, Restaurants ^(2)(3)^ | Fayetteville, NC | 100 | % | 65,000 - 66,000 | $17,000 - $18,000 | 2021 | 10.0% - 11.0% | |
| (1) | Total Cost is presented net of reimbursements to be received. | |||||||
| --- | --- | |||||||
| (2) | Yield is based on expected yield upon stabilization. | |||||||
| --- | --- | |||||||
| (3) | The return reflected represents a pro forma incremental return as Total Cost excludes the cost related to the acquisition of the Sears (Cross Creek) building in 2017. | |||||||
| --- | --- |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
As of December 31, 2019
CBL Core Portfolio Exposure to Sears and Closed Bon-Ton Locations and Redevelopment Plans
| TIER 1<br>Sales ≥ 375 per square foot | |||
|---|---|---|---|
| Property | Sears Status as of December 31, 2019 ^(1)^ | Sears Redevelopment Plans | BonTon Redevelopment Plans |
| Coastal Grand | Open (O) | Owned by Sears. | |
| CoolSprings Galleria | Redeveloped in 2015. | ||
| Cross Creek Mall | Closed | Executed lease with Dave & Busters. Additional restaurants and users under LOI/OFS. Construction expected to start in 2020. | |
| Fayette Mall | Redeveloped in 2016. | ||
| Friendly Center and The Shops at Friendly | Open (O) | Owned by Sears. Whole Foods sub-leases 1/3 of the box. | |
| Hamilton Place | Under Construction | Cheesecake Factory Open. Under Construction with Aloft hotel (opening '21), Dick's Sporting Goods, Dave & Busters (opening '20) and Malone's. | |
| Hanes Mall | Closed (O) | Owned by 3rd Party. Novant Health, Inc. purchased Sears and Sear TBA for future medical office. | |
| Imperial Valley Mall | Closed (O) | Owned by Seritage. Hobby Lobby executed. | |
| Jefferson Mall | Closed | Purchased in Jan 2017 sale-leaseback for future redevelopment. Under negotiation/LOIs with restaurants/sporting goods/other users. | |
| Mall del Norte | Open (O) | Owned by Sears. | |
| Northwoods Mall | Owned by Seritage. Redeveloped with Burlington. | ||
| Oak Park Mall | |||
| Old Hickory Mall | Closed | Under negotiation with Value Retailer. | |
| Parkway Place | |||
| Richland Mall | Under Construction (O) | Sears sold location to Dillard's in 2018. Dillard's expected to open fall 2020. | |
| Southpark Mall | Closed | Under negotiation with several prospects. | |
| St. Clair Square | Closed (O) | Building Owned by Sears. Under negotiation with entertainment user. | |
| The Outlet Shoppes at Atlanta | |||
| The Outlet Shoppes at El Paso | |||
| The Outlet Shoppes of the Bluegrass |
All values are in US Dollars.
| TIER 1<br>Sales ≥ 375 per square foot | |||
|---|---|---|---|
| Property | Sears Status as of December 31, 2019 ^(1)^ | Sears Redevelopment Plans | BonTon Redevelopment Plans |
| Sunrise Mall | Closed (O) | Sears sold to 3rd Party Developer. Entertainment user/fitness user OFS. | |
| West County Center |
All values are in US Dollars.
| TIER 2<br>Sales ≥ 300 to < 375 per square foot | |||
|---|---|---|---|
| Property | Sears Status as of December 31, 2019 ^(1)^ | Sears Redevelopment Plans | BonTon Redevelopment Plans |
| Arbor Place | Closing (O) | Owned by Sears. | |
| Asheville Mall | Closed (O) | Owned by Seritage. Under negotiation/LOI with entertainment users. | |
| Dakota Square Mall | Closed | Under negotiation with several prospects. | Ross Dress For Less opened. |
| East Towne Mall | Open (O) | Owned by Sears. | Owned by Third Party. Under negotiation with non-retail use. |
| EastGate Mall | Closed | Purchased in January 2017 sale-leaseback for future redevelopment. Under negotiation/LOIs with tenants. | |
| Frontier Mall | Jax Outdoor Gear purchased location (O) and opened November 2019. | ||
| Governor's Square | Closed | 50/50 Joint Venture Property. Under negotiation/LOIs with tenants. | |
| Harford Mall | Closing | Under negotiations with sporting goods and entertainment users. | |
| Kirkwood Mall | Leases executed with restaurants. Construction expected in 2020. | ||
| Layton Hills Mall | |||
| Mayfaire Town Center | |||
| Northpark Mall | Closing (O) | Building owned by Sears. | |
| The Outlet Shoppes at Laredo | |||
| Park Plaza | |||
| Parkdale Mall | Closing (O) | Owned by Sears. | |
| Pearland Town Center | |||
| Post Oak Mall | Closed (O) | Location purchased from Sears by third party. Conn's HomePlus under construction. Fitness under negotiation. | |
| South County Center | Closed | Executed lease with Round1. Construction tbd. Sears still paying rent under ground lease. | |
| Southaven Towne Center | |||
| Turtle Creek Mall | Closed (O) | Owned by Sears. | |
| Valley View Mall | Closed (O) | Owned by Sears. Under negotiation with sporting goods/entertainment. | |
| Volusia Mall | Closed (O) | Sears sold to 3rd Party Developer for redevelopment. |
All values are in US Dollars.
| TIER 2<br>Sales ≥ 300 to < 375 per square foot | |||
|---|---|---|---|
| Property | Sears Status as of December 31, 2019 ^(1)^ | Sears Redevelopment Plans | BonTon Redevelopment Plans |
| West Towne Mall | Owned by Seritage. Redeveloped with Dave & Busters and Total Wine. Under negotiation with retailer for remaining space. | Von Maur opening 2021. | |
| WestGate Mall | Closed (O) | Owned by Sears. Under negotiation for non-retail use. | |
| Westmoreland Mall | Closed (O) | Building owned by Sears. Potential for non-retail. | Stadium Casino under construction. Est. 2020 opening |
| York Galleria | Under Construction | Under Construction with Hollywood Casino. Est. 2020 opening. | Owned by Third Party. Under negotiation with non-retail use. |
All values are in US Dollars.
| TIER 3<br>Sales < 300 per square foot | |||
|---|---|---|---|
| Property | Sears Status as of December 31, 2019 ^(1)^ | Sears Redevelopment Plans | BonTon Redevelopment Plans |
| Alamance Crossing | |||
| Brookfield Square | Grand Opening held 10/19: Movie Tavern, Whirlyball, Outback Steakhouse, Uncle Julio's. Convention center/hotel under construction - est. opening in 2020. | Owned by Third Party. LOI with new use. | |
| Burnsville Center | Closed (O) | Owned by Seritage. | |
| CherryVale Mall | Under Construction | Executed lease with Tilt. Est. opening 2020. | Actively leasing. |
| Eastland Mall | Closed | Actively leasing. | Actively leasing. |
| Kentucky Oaks Mall | Under Construction (O) | Owned by Seritage. Burlington and Ross Dress for Less opened. | 50/50 JV asset. HomeGoods and Five Below opened November 2019. |
| Laurel Park Place | Dunham's Sports opened November 2019. | ||
| Meridian Mall | High Caliber Karts opened fall 2019. Furniture Store under negotiation for Women's store. | ||
| Mid Rivers Mall | Closed (O) | Owned by Sears. | |
| Monroeville Mall | |||
| Northgate Mall | Closed (O) | Owned by Sears. | |
| The Outlet Shoppes at Gettysburg | |||
| Stroud Mall | EFO Furniture Outlet Opened February 2020 | Shoprite opened October 2019. |
All values are in US Dollars.
| (1) | Sears boxes owned by the department store or a third party are noted with the following symbol next to the status (O). |
|---|
36
cbl-ex992_243.htm
Exhibit 99.2
Q4 2019 Conference call – Friday, February 7, 2020
Katie:
Thank you and good morning. Joining me today are Stephen Lebovitz, CEO and Farzana Khaleel, Executive Vice President and CFO.
This conference call contains "forward-looking statements" within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties. Future events and actual results, financial and otherwise, may differ materially. We direct you to the Company’s various filings with the SEC for a detailed discussion of these risks.
A reconciliation of supplemental non-GAAP financial measures to the comparable GAAP financial measures was included in yesterday’s earnings release and supplemental that will be furnished on Form 8-K and is available in the invest section of the website at cblproperties.com.
This call is being limited to one hour. In order to provide time for everyone to ask questions, we ask that each speaker limit their questions to two and then return to the queue to ask additional questions. If you have questions that were not answered during today’s call, please reach out to me following the conclusion.
I will now turn it over to Stephen.
Stephen:
Thank you, Katie and good morning everyone.
The mall business is in transition and we are responding by making the changes necessary to our portfolio. While we wish progress could be reflected more immediately in our results, we are confident in our strategy.
This time last year we had over 40 anchor closures. Today we have more than two-thirds of that space replaced with dynamic new traffic-driving users. Most of these users are not traditional retail names. They include educational uses, fitness
centers, casinos, new-to-market entertainment, fast casual and sit-down restaurants and in-demand value retail. Many of these projects include mixed-uses such as hotels, multi-family, medical, office and storage. The creativity of the CBL team is impressive and while the job is far from done, we have made tremendous progress over the last year. I expect that 2020 will be just as productive and will move us further toward accomplishing our goals.
As our results for 2019 and guidance for 2020 indicate, we are facing ongoing challenges as retailers struggle to succeed in an increasingly competitive and fast-changing industry. Despite these challenges, we ended 2019 with financial results at the high-end of our guidance range including same-center NOI declining 6.5% and adjusted FFO of $1.36 per share. Revenues and occupancy were significantly impacted by retailer bankruptcies and store closings, including the liquidation or reorganization of several major retailers. Our 2020 guidance range incorporates the carryover from 2019 as well as our expectation of additional retailer fall-out in 2020.
In January, Macy’s announced one closure in our portfolio at our property at Hanes Mall in Winston-Salem, NC. We have been working on plans and expect to be able to make an announcement for a replacement in the coming months. Earlier this week, Macy’s announced its new strategic three-year plan, including a targeted store closure program. Our understanding is that the definitive closure list will be finalized over time. Within the CBL portfolio, we expect an additional 6-7 store closures to occur over the next three years. We do not anticipate any of these closures to occur in 2020. While this announcement is certainly a setback, the extended timetable provides us with runway to line-up replacements.
As a result of our redevelopment efforts, we are diversifying our revenue stream and working to stabilize income. Since the BonTon and Sears bankruptcies in 2018, we have opened 15 new tenants in former anchor locations, adding more productive uses. And we have another dozen committed replacements either under construction or with planning underway. We are proactively reducing our exposure to apparel retailers with more than 76% of 2019 new mall leasing completed with non-apparel tenants. We are currently under construction, have agreements executed or are in active negotiation on two multi-family projects, 14
entertainment operations, including two casinos, nine hotels, 28 restaurants, eight fitness centers, nine medical uses, three self-storage facilities and several other non-retail uses.
We are minimizing required capital investment while effecting transformative redevelopments. We’re utilizing ground leases, joint ventures and other creative structures. These structures have allowed us to add mixed-uses like the hotel and convention center at Brookfield Square in Milwaukee, multi-family housing to our open-air center The Pavilion at Port Orange in Daytona Beach; storage facilities at three properties on outparcel land and a hotel at Hamilton Place in Chattanooga. And we have a pipeline of additional projects that are in various stages of commitment and permitting.
We have also taken difficult yet important steps to maintain portfolio cash flow by suspending our common and preferred dividends. Our portfolio provides us with sufficient cash flow to fund capex, principal amortization as well as our redevelopment and leasing programs.
We also supplement our cash flow with select dispositions. In 2019, we completed the sale of a partial interest in two of our outlet centers to our existing partner, with the second closing during the fourth quarter. This transaction generated $18 million in equity and reduced our share of debt by $30 million, all while maintaining a 50% ownership interest in strong assets.
Our next major project opening is the redevelopment of the former Sears at Hamilton Place here in Chattanooga. Dave & Buster’s and Dick’s Sporting Goods, are opening this March, joining Cheesecake Factory, which opened in December 2018. The Aloft hotel and self-storage project are under construction as well. We recently announced that Malone’s Steak & Seafood will join the project on an outparcel pad and additional uses will be announced in the near future.
This project is a prime example of the strategy that we are implementing at our centers. Retail is changing and as a result, our shopping centers are evolving into what we call suburban town centers. Traditional apparel is being rightsized and enhanced by the new users I mentioned earlier. Even with these changes, 85% of retail sales still occur in stores and on-line retailers recognize the value of bricks
and mortar facilities. The strategy we are following at our properties positions them for ongoing success in their markets. We are confident that these steps and others we are taking now will yield positive results in the future.
I will now turn the call over to Katie to discuss our operating results and investment activity.
Katie:
Thank you, Stephen.
During 2019, the CBL leasing team, in spite of the difficult environment, completed nearly 3.9 million-square-feet of total leasing activity, including 1.4 million-square-feet of new leases and 2.5 million-square-feet of renewals. On a comparable same-space basis for the year, we signed approximately 2.1 million-square-feet of new and renewal leases at an average gross rent decline of 8%. Spreads on new leases for stabilized malls increased 9% and renewal leases were signed at an average of 11.5% lower than the expiring rent.
Same-center mall occupancy improved 110-basis points sequentially to 89.8%, however occupancy continues to be impacted by bankruptcy related closures, which is evident in the 210-bps decline compared to the prior-year period. Portfolio occupancy declined 190 basis points year-over-year to 91.2%. Bankruptcy-related store closures reduced year-end mall occupancy by approximately 400 basis points or 700,000-square feet, including closures from Payless, Gymboree, Charming Charlie, Charlotte Russe and Destination Maternity. In January, the majority of Regis and Mastercuts stores that were controlled by The Beautiful Group closed. In the CBL portfolio 25 locations, representing approximately 35,000-square feet and $1.5 million in gross rent, were impacted.
For the fourth quarter mall sales increased 3%, bringing the trailing 12-month sales to $387 per square foot compared with $379 for the prior year. Categories that performed well during the holiday season included fast casual dining, electronics, children’s and family shoes and sporting goods.
Sales growth resulted in several positive shifts for the tiering of the malls in our portfolio. Parkway Place, St. Clair Square, Old Hickory and Imperial Valley all moved
into Tier One due to their strong sales growth. Laurel Park Place and Northgate moved to Tier Three. At Laurel Park, which is a two-anchor mall, we just opened Dunham’s Sports in the former Carson’s box, which will drive new traffic to the center.
We are making great progress with our anchor replacement program. You can find a complete schedule of projects underway in the supplemental, but I’ll touch on a few recent updates.
At Mall del Norte in Laredo, TX, we downsized Forever 21 and are opening entertainment user, Main Event, this month.
Stephen described the status of our largest redevelopment of the year, the Sears redevelopment at Hamilton Place here in Chattanooga. The project includes Dave & Busters, Aloft Hotel and Dick’s Sporting Goods plus the recently announced Malone’s Steak & Seafood.
We are also developing a joint venture self-storage facility on a parcel outside the ring road at Hamilton Place. This project is a similar structure to our previous storage projects in that we contributed the land as our equity. The opening is expected later this year.
Tilt is under construction and will open soon at CherryVale Mall in Rockford, IL in the former Sears location.
We started construction on an office building at our open-air center, Pearland Town Center, in Houston, TX. The 48,000-square-foot building will be fully leased to HCA Healthcare and will provide additional daytime traffic to the center.
At Coastal Grand in Myrtle Beach, a 50/50 joint venture, we started construction on an expanded Dick’s Sporting Goods/Golf Galaxy combo store. Entertainment operator, Flip N’ Fly, will locate in the space that Dick’s currently occupies.
At Cross Creek Mall in Fayetteville, NC, we are under construction on the former Sears location to add Dave & Buster’s. We’ll also announce additional restaurants and other users joining the redevelopment as details are finalized.
We have recently opened several anchor replacements projects.
At our 50/50 joint venture property, Kentucky Oaks in Paducah, KY, Burlington and Ross opened in the Seritage-owned Sears. HomeGoods also opened in mid-October to replace a portion of the Elder-Beerman store. Additional value retailers are under negotiation.
As I mentioned earlier at Laurel Park Place in Livonia, MI, Dunham’s Sports opened in the Carson’s box in November.
Ross Dress for Less replaced Herberger’s at Dakota Square in Minot, ND. We are currently under negotiations with another value retailer to take the remaining space.
At Frontier Mall in Cheyenne, WY, Jax Outdoor Gear purchased and opened in the former Sears location.
At Stroud Mall, the new Shoprite supermarket, which opened in October, replaced the former Bon Ton, is exceeding sales projections. We opened a Furniture Outlet store in the former Sears in January.
We have strong demand for our remaining vacant anchor locations with several others under negotiation, out for signature or with active interest. We will make additional announcements as plans progress.
I will now turn the call over to Farzana to discuss our financial results.
Farzana:
Thank you, Katie.
We are executing on our key financial goals of maximizing free cash flow, supplementing our liquidity with other sources such as dispositions, extending our maturity schedule and reducing leverage.
Our total pro rata share of debt at the end of 2019 was $4.25 billion. We have reduced our debt levels by $40 million sequentially and $409 million from December 2018. The year-over-year reduction was primarily due to dispositions and amortization. At the end of the year, we had $374 million available to draw on our line of credit.
During the fourth quarter we retired a $12 million loan secured by The Terrace, an associated center in Chattanooga. Yesterday, we retired the loans secured by Parkway Place in Huntsville, AL, and by Valley View in Roanoke, VA, which had an aggregate loan balance of $84 million. All three properties have stable income with debt yields above 25% at payoff and were scheduled to mature in 2020. These three properties were added to the unencumbered pool.
Greenbrier Mall and Hickory Point both matured in December 2019 and are currently in default. For Greenbrier, we are pursuing an additional restructure and will announce the terms once complete. We anticipate completing a foreclosure or deed-in-lieu for the loan secured by Hickory Point this year.
We closed on a new $4.7 million, 4- year loan secured by the second phase of our Atlanta outlet center, replacing the $4.5 million maturing loan.
We have three property maturities in 2020 including a $65 million non-recourse loan secured by Burnsville Center. We are in the process of working with the existing lender on a potential extension and restructure. We expect to refinance the remaining two loans aggregating $19.5 million.
We have several secured mortgages that mature in 2021 as well and have already begun working on refinancing opportunities.
We ended the year with financial results at the higher end of our guidance range. Fourth quarter adjusted FFO per share was $0.37, representing a decline of $0.08 per share compared with $0.45 per share for the fourth quarter 2018. Factors that contributed to the variance included lower property level NOI of $0.06 per share and $0.02 per share of dilution from asset sales.
Full year adjusted FFO was $1.36 per share compared with $1.73 for 2018. FFO for the year was impacted by $0.20 per share lower property-level NOI, $0.04 per share lower gain on the sale of outparcels and $0.06 per share in dilution from asset sales.
Fourth quarter same-center NOI decreased 9.1% due to the full impact of bankruptcies and store closures and same center NOI for the year declined 6.5%.
During the quarter we recognized an $37.4 million impairment on Park Plaza Mall in Little Rock, AR. The mall is encumbered by a $78 million loan due in April 2021.
The mall has been impacted by a number of factors including several tenant bankruptcies and as a result the net operating income declined. We have been in discussions with the lender and anticipate restructuring the loan to allow for cash flow to fund future leasing efforts and improve revenue. However, the current NOI decline coupled with the near-term loan maturity resulted in a required impairment.
Based on our expectations for the rest of the year, we are providing adjusted FFO guidance for full-year 2020 in the range of $1.03 – $1.13 per share, which assumes a same-center NOI decline in the range of (9.5)% – (8.0)%. We have incorporated into our budgets all known activity, including the recent Regis and Mastercuts closures. Our guidance range incorporates a reserve to account for unbudgeted revenue decline related to unanticipated additional store closures or retailer bankruptcies. The reserve for 2020 is a range of $8 - $18 million.
I’ll now turn the call over to Stephen for concluding remarks.
Stephen:
Thank you, Farzana.
We are fully focused on our major goals of stabilizing revenue, redeveloping our properties and improving our balance sheet. We are actively transforming our centers, generating new revenue streams and seeking out partnerships that supplement our capital sources and broaden our asset base. We are confident in our strategy and our properties and while we wish results were more immediate, we expect to see our leasing, operational and redevelopment efforts benefit our portfolio in the near-term future.
Thank you for your time today. We will now open the call to questions.
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