Exhibit 99.1
Earnings Release and
Supplemental Financial and Operating Information
For the Three and Nine Months Ended
September 30, 2018
Earnings Release and Supplemental Financial and Operating Information
Table of Contents
Page | ||
Reconciliations of Supplementary Non-GAAP Financial Measures: | ||
Contact: Katie Reinsmidt, EVP - Chief Investment Officer, 423.490.8301, katie.reinsmidt@cblproperties.com
CBL PROPERTIES REPORTS RESULTS FOR THIRD QUARTER 2018 AND DECLARES COMMON AND PREFERRED STOCK DIVIDENDS
Results in-line; Full-Year Guidance Range Maintained
CHATTANOOGA, Tenn. (October 29, 2018) – CBL Properties (NYSE:CBL) announced results for the third quarter ended September 30, 2018. A description of each supplemental non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located at the end of this news release.
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Net income (loss) attributable to common shareholders per diluted share | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.34 | ) | $ | 0.30 | ||||||
Funds from Operations ("FFO") per diluted share | $ | 0.39 | $ | 0.52 | $ | 1.26 | $ | 1.63 | |||||||||
FFO, as adjusted, per diluted share (1) | $ | 0.40 | $ | 0.50 | $ | 1.28 | $ | 1.51 | |||||||||
(1) For a reconciliation of FFO to FFO, as adjusted, for the periods presented, please refer to the footnotes to the Company's reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 10 of this news release. |
KEY TAKEAWAYS:
• | FFO per diluted share, as adjusted, was $0.40 for the third quarter 2018, compared with $0.50 per share for the third quarter 2017. Third quarter 2018 FFO per share was impacted by approximately $0.01 per share of higher G&A expense primarily due to severance expense, $0.01 per share of dilution from asset sales completed in 2017 and year-to-date, $0.05 per share of lower property NOI, $0.01 per share higher interest expense and $0.02 per share lower income tax benefit. |
• | Total Portfolio Same-center NOI declined 6.1% for the third quarter 2018 and 6.6% for the nine months ended September 30, 2018. |
• | Portfolio occupancy increased 90 basis points to 92.0% as of September 30, 2018, compared with 91.1% as of June 30, 2018, and declined 110 basis points compared with 93.1% as of September 30, 2017. Same-center mall occupancy was 90.8% as of September 30, 2018, a 120 basis point increase compared with 89.6% as of June 30, 2018, and a 90 basis point decline compared with 91.7% as of September 30, 2017. |
• | Year-to-date, CBL has completed gross asset sales totaling more than $89 million. |
• | Same-center sales per square foot for the stabilized mall portfolio for the twelve-months ended September 30, 2018, increased to $378 per square foot compared with $376 per square foot for the prior-year period. |
• | Construction is underway on nine redevelopment projects with three redevelopment projects opened year-to-date. |
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"Operational results for the quarter and year-to-date were delivered in-line with our expectations and previously issued guidance range," commented Stephen Lebovitz, chief executive officer. "Despite significant additional rent losses from unanticipated store closings, we are on-track to end the year at the mid-to-high point of our adjusted FFO per share guidance range and the mid-to-low point of the same-center NOI range. While our leasing spreads continue to be pressured, the positive sales in our portfolio year-to-date are a healthy leading indicator for an improved leasing backdrop in 2019.
"We are also making strong progress on our redevelopment program. Of the ten leased Bon Ton stores that closed in August, we have leases executed or out-for-signature for replacement users at six locations and three others in advanced negotiations. We are utilizing our capital-lite redevelopment strategy for a number of these projects and today have nine anchor replacements across our portfolio that require little to no investment by CBL and several more underway. This under-appreciated strategy allows us to replace closed anchor locations with exciting uses while preserving capital. At the same time, we are having excellent results in diversifying our offerings, with executed or pending deals for 50 restaurants, 14 entertainment operators, nine hotels, two supermarkets, five fitness operators, four self-storage locations and four multi-family projects.
"Now that the much-anticipated Sears bankruptcy is behind us, we have the opportunity to accelerate additional redevelopments to further transform our malls into suburban town centers. We anticipate minimal impact to our financial results for 2018 as a result of the six additional Sears closures announced as part of the filing. Three were stores that we had purchased in our 2017 sale-leaseback transaction with redevelopment plans already well underway.
"We also are strengthening our balance sheet by extending our maturity schedule. We closed on a 10-year, fixed loan at a rate of 5.103% secured by The Outlet Shoppes at El Paso this quarter. Our share of nearly $95 million in net proceeds from this financing and the CoolSprings Galleria refinancing completed during the second quarter, coupled with disposition proceeds of nearly $90 million year-to-date funded the majority of the $190 million term loan paydown completed in July. We have also made significant progress with our bank group towards finalizing the recast of our lines of credit and term loans. With their strong support we remain on-track to close in or before January 2019 and will be excited to share details at that time."
Net loss attributable to common shareholders for the third quarter 2018 was $12.6 million, or a loss of $0.07 per diluted share, compared with a net loss of $2.3 million, or a loss of $0.01 per diluted share, for the third quarter 2017.
FFO allocable to common shareholders, as adjusted, for the third quarter 2018 was $68.6 million, or $0.40 per diluted share, compared with $84.7 million, or $0.50 per diluted share, for the third quarter 2017. FFO allocable to the Operating Partnership common unitholders, as adjusted, for the third quarter 2018 was $79.2 million compared with $98.7 million for the third quarter 2017.
Percentage change in same-center Net Operating Income ("NOI")(1):
Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | |||
Portfolio same-center NOI | (6.1)% | (6.6)% | ||
Mall same-center NOI | (6.4)% | (6.8)% |
(1) | CBL's definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items of straight-line rents, write-offs of landlord inducements and net amortization of acquired above and below market leases. |
Major variances impacting same-center NOI for the quarter ended September 30, 2018, include:
• | Same-center NOI declined $10.0 million, due to a $12.3 million decrease in revenues offset by a $2.3 million decline in operating expenses. |
• | Minimum rents and tenant reimbursements declined $11.4 million during the quarter, including a $3.0 million decline in real estate tax reimbursements. |
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• | Percentage rents declined $0.5 million compared with the prior year quarter. |
• | Property operating expenses were relatively flat compared with the prior year. Maintenance and repair expenses increased $0.5 million. Real estate tax expenses declined $2.8 million. |
PORTFOLIO OPERATIONAL RESULTS
Occupancy(1):
As of June 30, | As of September 30, | ||||
2018 | 2018 | 2017 | |||
Portfolio occupancy | 91.1% | 92.0% | 93.1% | ||
Mall portfolio | 89.2% | 90.5% | 91.6% | ||
Same-center malls | 89.6% | 90.8% | 91.7% | ||
Stabilized malls | 89.5% | 90.8% | 91.7% | ||
Non-stabilized malls (2) | 71.9% | 73.6% | 87.9% | ||
Associated centers | 97.9% | 97.2% | 98.2% | ||
Community centers | 96.9% | 96.8% | 98.2% |
(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 as of September 30, 2018. Represents occupancy for The Outlet Shoppes of the Bluegrass and The Outlet Shoppes at Laredo as of September 30, 2017. |
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:
% Change in Average Gross Rent Per Square Foot: | |||||
Three Months Ended September 30, 2018 | Nine Months Ended September 30, 2018 | ||||
Stabilized Malls | (13.1 | )% | (11.3 | )% | |
New leases (1) | (9.5 | )% | (3.1 | )% | |
Renewal leases | (13.8 | )% | (12.9 | )% |
(1) | Excluding three leases executed during Q3 2018, average new lease spreads would have been 0.6% and (0.2)% for the three and nine months ended September 30, 2018, respectively. |
Same-Center Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:
Twelve Months Ended September 30, | |||||||||
2018 | 2017 | % Change | |||||||
Stabilized mall same-center sales per square foot | $ | 378 | $ | 376 | 0.5% | ||||
Stabilized mall sales per square foot | $ | 378 | $ | 373 | 1.3% |
DIVIDEND
“A major financial priority for CBL is to preserve liquidity and the flexibility of our balance sheet," commented Lebovitz. "As we discussed on our second quarter earnings call, we have been evaluating an adjustment to our dividend to a level that maximizes available cash flow for investing in our properties and debt reduction. In order to accomplish this goal, we are reducing the common dividend for 2019 to an annualized rate of $0.30 per share from $0.80 per share. The reduction will preserve an estimated $100 million of cash on an annual basis. This significantly enhanced liquidity will help to fund value-adding redevelopment activity and debt reduction and ultimately enhance
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long-term shareholder value. In addition to the funds retained through the dividend reduction, we will continue to enhance financial flexibility through a number of avenues, including efficiencies in operations, reductions to overhead and opportunistic dispositions to generate equity proceeds as well as proactively extending our debt maturity schedule to limit financing risk."
CBL’s Board of Directors has declared a quarterly cash dividend for the Company’s Common Stock of $0.075 per share for the quarter ending December 31, 2018. The dividend is payable on January 16, 2019, to shareholders of record as of December 31, 2018. The dividend represents an annualized rate of $0.30 per share.
The Board also declared a quarterly cash dividend of $0.4609375 per depositary share for the quarter ending December 31, 2018, for the Company’s 7.375% Series D Cumulative Redeemable Preferred Stock. The dividend, which equates to an annual dividend payment of $1.84375 per depositary share, is payable on December 31, 2018, to shareholders of record as of December 14, 2018.
The Board also declared a quarterly cash dividend of $0.4140625 per depositary share for the quarter ending December 31, 2018, for the Company’s 6.625% Series E Cumulative Redeemable Preferred Stock. The dividend, which equates to an annual dividend payment of $1.65625 per depositary share, is payable on December 31, 2018, to shareholders of record as of December 14, 2018.
DISPOSITIONS
Year-to-date, CBL has raised more than $89 million in gross proceeds through asset sales.
Property | Location | Date Closed | Gross Sales Price (M) | ||
Various Outparcels | Various | Various | $ | 24.3 | |
Phase III Gulf Coast Town Center | Ft. Myers, FL | March | $ | 9.0 | |
Janesville Mall | Janesville, WI | July | $ | 18.0 | |
Statesboro Crossing | Statesboro, GA | August | $ | 21.5 | |
Parkway Plaza | Ft. Oglethorpe, GA | October | $ | 16.5 | |
Total | $ | 89.3 |
FINANCING ACTIVITY
In September, CBL closed on a $75.0 million non-recourse loan secured by The Outlet Shoppes at El Paso in El Paso, TX. The 10-year loan bears interest at a fixed rate of 5.103%.
Proceeds from the loan were used to retire a $6.5 million loan secured by the second phase of the property, which was scheduled to mature in December. CBL’s share of net proceeds of $65.0 million was utilized to reduce outstanding balances on the lines of credit.
In April, CBL, along with its 50% joint venture partner, closed on a $155.0 million ($77.5 million at CBL’s share) non-recourse loan secured by CoolSprings Galleria in Nashville, TN. The 10-year loan bears interest at a fixed rate of 4.839%.
Proceeds from the loan were used to retire the existing $97.7 million loan, which bore interest at a fixed rate of 6.98% and was scheduled to mature in June. CBL’s share of nearly $29.0 million in excess proceeds was utilized to reduce outstanding balances on its lines of credit.
In May, CBL completed the extension of the $56.7 million ($28.4 million at CBL’s share) loan secured by The Pavilion at Port Orange in Port Orange, FL, and the $58.2 million ($29.1 million at CBL’s share) loan secured by Hammock Landing in West Melbourne, FL. The loans were extended for an initial term of three years, with two one-year extensions available at the Company’s option, for a final maturity in February 2023. The new loans bear interest at 225 basis points over LIBOR, an increase of 25 bps over the prior rate.
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In July, CBL repaid $190.0 million of its $490.0 million unsecured term loan using availability on its lines of credit, reducing the outstanding balance to $300 million. This loan matures in July 2021.
In October, CBL exercised its option to extend the maturity date of its $350.0 million unsecured term loan to October 2019. It also extended the $27.4 million loan secured by Hickory Point Mall to December 2019.
DEVELOPMENT
Major redevelopments completed and underway in 2018 include (complete project list can be found in the financial supplement):
Property | Prior Tenant | New Tenant(s) | |
Brookfield Square | Sears | Marcus Theaters, Whirlyball | |
Eastland Mall | JCPenney | H&M, Outback, Planet Fitness | |
Frontier Mall | Sports Authority | Planet Fitness | |
Jefferson Mall | Macy's | Round 1 | |
York Galleria | JCPenney | Marshalls | |
Hanes Mall | Shops | Dave & Busters | |
Parkdale Mall | Macy's | Dick's, Five Below, HomeGoods |
Additional Replacement Activity Completed or Underway with Minimal or No Investment by CBL:
Property | Prior Tenant | New Tenant(s) | |
Layton Hills Mall | Macy's | Dillard's (Opened Q4 '17) | |
Stroud Mall | BonTon | Shoprite ('19 Opening) | |
Westmoreland Mall | BonTon | Casino ('19 Construction) | |
Kentucky Oaks | Sears (Seritage) | Burlington (Opened fall '18) | |
West Towne Mall | Sears (Seritage) | Dave & Buster's/Total Wine (Opened summer '18) | |
Northwood Mall | Sears (Seritage) | Burlington (Opened spring '18) | |
Honey Creek Mall | Carson's | Vendor Village (Est. Open Q4 '18) | |
Hanes Mall | Sears | Novant Health (Opening TBD) | |
CherryVale Mall | Bergner's | ChoiceHome (Est. Open Q4 '18) |
OUTLOOK AND GUIDANCE
Based on year-to-date results and expectations for the fourth quarter 2018, CBL anticipates achieving 2018 FFO, as adjusted, at the mid-to-high end of its guidance range of $1.70 - $1.80 per diluted share. Guidance incorporates a reserve in the range of $10.0 - $20.0 million (the "Reserve") for potential future unbudgeted loss in rent from tenant bankruptcies, store closures or lease modifications that may occur in 2018. Based on bankruptcy and leasing activity year-to-date, including the impact of any co-tenancy, CBL currently expects to utilize approximately $16 - $18 million of the Reserve. Key assumptions underlying guidance are as follows:
Low | High | ||
2018 FFO, as adjusted, per share (Includes the Reserve) | $1.70 | $1.80 | |
2018 Change in Same-Center NOI ("SC NOI") (Includes the Reserve) | (6.75)% | (5.25)% | |
Reserve for unbudgeted lost rents included in SC NOI and FFO | $20.0 million | $10.0 million | |
Gains on outparcel sales | $12.0 million | $14.0 million |
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Reconciliation of GAAP net income (loss) to 2018 FFO, as adjusted, per share guidance:
Low | High | ||||||
Expected diluted earnings per common share | $ | (0.32 | ) | $ | (0.23 | ) | |
Adjust to fully converted shares from common shares | 0.04 | 0.04 | |||||
Expected earnings per diluted, fully converted common share | (0.28 | ) | (0.19 | ) | |||
Add: depreciation and amortization | 1.61 | 1.61 | |||||
Less: gain on depreciable property | (0.03 | ) | (0.03 | ) | |||
Add: loss on impairment | 0.42 | 0.42 | |||||
Add: noncontrolling interest in loss of Operating Partnership | (0.04 | ) | (0.03 | ) | |||
Expected FFO, as adjusted, per diluted, fully converted common share | $ | 1.68 | $ | 1.78 | |||
Adjustment for certain significant items | 0.02 | 0.02 | |||||
Expected adjusted FFO per diluted, fully converted common share | $ | 1.70 | $ | 1.80 |
INVESTOR CONFERENCE CALL AND WEBCAST
CBL Properties will host a conference call on Tuesday, October 30, 2018, at 11:00 a.m. ET. To access this interactive teleconference, dial (888) 317‑6003 or (412) 317-6061 and enter the confirmation number, 4666560. A replay of the conference call will be available through November 6, 2018, by dialing (877) 344-7529 or (412) 317‑0088 and entering the confirmation number, 10123148.
The Company will also provide an online webcast and rebroadcast of its third quarter 2018 earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Tuesday, October 30, 2018, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call.
To receive the CBL Properties third quarter earnings release and supplemental information, please visit the Invest section of our website at cblproperties.com or contact Investor Relations at (423) 490-8312.
ABOUT CBL PROPERTIES
Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBL’s portfolio is comprised of 114 properties totaling 71.9 million square feet across 26 states, including 73 high-quality enclosed, outlet and open-air retail centers and 12 properties managed for third parties. CBL continuously strengthens its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. For more information visit cblproperties.com.
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
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assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors’ understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company’s properties and interest rates, but also by its capital structure.
The Company presents both FFO allocable to Operating Partnership common unitholders and FFO allocable to common shareholders, as it believes that both are useful performance measures. The Company believes FFO allocable to Operating Partnership common unitholders is a useful performance measure since it conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership. The Company believes FFO allocable to its common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income (loss) attributable to its common shareholders.
In the reconciliation of net income (loss) attributable to the Company's common shareholders to FFO allocable to Operating Partnership common unitholders, located in this earnings release, the Company makes an adjustment to add back noncontrolling interest in income (loss) of its Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders. The Company then applies a percentage to FFO of the Operating Partnership common unitholders to arrive at FFO allocable to its common shareholders. The percentage is computed by taking the weighted-average number of common shares outstanding for the period and dividing it by the sum of the weighted-average number of common shares and the weighted-average number of Operating Partnership units held by noncontrolling interests during the period.
FFO does not represent cash flows from operations as defined by GAAP, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company’s operating performance or to cash flow as a measure of liquidity.
The Company believes that it is important to identify the impact of certain significant items on its FFO measures for a reader to have a complete understanding of the Company's results of operations. Therefore, the Company has also presented adjusted FFO measures excluding these items from the applicable periods. Please refer to the reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 10 of this news release for a description of these adjustments.
Same-center Net Operating Income
NOI is a supplemental non-GAAP measure of the operating performance of the Company's shopping centers and other properties. The Company defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).
The Company computes NOI based on the Operating Partnership's pro rata share of both consolidated and unconsolidated properties. The Company believes that presenting NOI and same-center NOI (described below) based on its Operating Partnership’s pro rata share of both consolidated and unconsolidated properties is useful since the Company conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company's common shareholders and the noncontrolling interest in the Operating Partnership. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's calculation of NOI may not be comparable to that of other companies.
Since NOI includes only those revenues and expenses related to the operations of the Company's shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at the malls and operating costs and the impact of those trends on the Company's results of operations. The Company’s calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-off of landlord inducement assets in order to enhance the comparability of results from one period to another. A reconciliation of same-center NOI to net income is located at the end of this earnings release.
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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.
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CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three and Nine Months Ended September 30, 2018
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
REVENUES: | |||||||||||||||
Minimum rents | $ | 142,248 | $ | 150,836 | $ | 441,097 | $ | 468,195 | |||||||
Percentage rents | 2,429 | 3,000 | 6,610 | 7,127 | |||||||||||
Other rents | 2,347 | 3,790 | 6,898 | 11,171 | |||||||||||
Tenant reimbursements | 55,374 | 63,055 | 172,601 | 192,577 | |||||||||||
Management, development and leasing fees | 2,658 | 2,718 | 8,022 | 8,747 | |||||||||||
Other | 1,822 | 1,251 | 6,448 | 4,079 | |||||||||||
Total revenues | 206,878 | 224,650 | 641,676 | 691,896 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Property operating | 30,004 | 31,295 | 92,357 | 96,250 | |||||||||||
Depreciation and amortization | 71,945 | 71,732 | 217,261 | 225,461 | |||||||||||
Real estate taxes | 19,433 | 21,573 | 61,737 | 62,343 | |||||||||||
Maintenance and repairs | 11,475 | 11,254 | 36,713 | 36,322 | |||||||||||
General and administrative | 16,051 | 13,568 | 47,845 | 45,402 | |||||||||||
Loss on impairment | 14,600 | 24,935 | 84,644 | 71,401 | |||||||||||
Other | 38 | 132 | 377 | 5,151 | |||||||||||
Total operating expenses | 163,546 | 174,489 | 540,934 | 542,330 | |||||||||||
Income from operations | 43,332 | 50,161 | 100,742 | 149,566 | |||||||||||
Interest and other income (loss) | 283 | (200 | ) | 714 | 1,235 | ||||||||||
Interest expense | (55,194 | ) | (53,913 | ) | (163,164 | ) | (165,179 | ) | |||||||
Gain on extinguishment of debt | — | 6,452 | — | 30,927 | |||||||||||
Gain (loss) on investments | — | (354 | ) | 387 | (6,197 | ) | |||||||||
Income tax benefit (provision) | (1,034 | ) | 1,064 | 1,846 | 4,784 | ||||||||||
Equity in earnings of unconsolidated affiliates | 1,762 | 4,706 | 9,869 | 16,404 | |||||||||||
Income (loss) from continuing operations before gain on sales of real estate assets | (10,851 | ) | 7,916 | (49,606 | ) | 31,540 | |||||||||
Gain on sales of real estate assets | 7,880 | 1,383 | 15,998 | 86,904 | |||||||||||
Net income (loss) | (2,971 | ) | 9,299 | (33,608 | ) | 118,444 | |||||||||
Net (income) loss attributable to noncontrolling interests in: | |||||||||||||||
Operating Partnership | 1,628 | 81 | 8,978 | (8,702 | ) | ||||||||||
Other consolidated subsidiaries | (24 | ) | (415 | ) | 369 | (25,266 | ) | ||||||||
Net income (loss) attributable to the Company | (1,367 | ) | 8,965 | (24,261 | ) | 84,476 | |||||||||
Preferred dividends | (11,223 | ) | (11,223 | ) | (33,669 | ) | (33,669 | ) | |||||||
Net income (loss) attributable to common shareholders | $ | (12,590 | ) | $ | (2,258 | ) | $ | (57,930 | ) | $ | 50,807 | ||||
Basic and diluted per share data attributable to common shareholders: | |||||||||||||||
Net income (loss) attributable to common shareholders | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.34 | ) | $ | 0.30 | ||||
Weighted-average common and potential dilutive common shares outstanding | 172,665 | 171,096 | 172,426 | 171,060 | |||||||||||
Dividends declared per common share | $ | 0.200 | $ | 0.265 | $ | 0.600 | $ | 0.795 |
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CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Nine Months Ended September 30, 2018
The Company's reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows:
(in thousands, except per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) attributable to common shareholders | $ | (12,590 | ) | $ | (2,258 | ) | $ | (57,930 | ) | $ | 50,807 | ||||
Noncontrolling interest in income (loss) of Operating Partnership | (1,628 | ) | (81 | ) | (8,978 | ) | 8,702 | ||||||||
Depreciation and amortization expense of: | |||||||||||||||
Consolidated properties | 71,945 | 71,732 | 217,261 | 225,461 | |||||||||||
Unconsolidated affiliates | 10,438 | 9,633 | 31,177 | 28,533 | |||||||||||
Non-real estate assets | (910 | ) | (934 | ) | (2,748 | ) | (2,590 | ) | |||||||
Noncontrolling interests' share of depreciation and amortization | (2,136 | ) | (2,170 | ) | (6,424 | ) | (6,791 | ) | |||||||
Loss on impairment, net of taxes | 14,600 | 24,935 | 84,644 | 70,185 | |||||||||||
Loss on impairment of unconsolidated affiliates | 1,022 | — | 1,022 | — | |||||||||||
Gain on depreciable property, net of taxes and noncontrolling interests' share | (3,307 | ) | 1,995 | (5,543 | ) | (48,761 | ) | ||||||||
FFO allocable to Operating Partnership common unitholders | 77,434 | 102,852 | 252,481 | 325,546 | |||||||||||
Litigation expenses (1) | — | 17 | — | 69 | |||||||||||
Nonrecurring professional fees reimbursement (1) | — | — | — | (919 | ) | ||||||||||
(Gain) loss on investments, net of taxes (2) | — | 354 | (287 | ) | 6,197 | ||||||||||
Non-cash default interest expense (3) | 1,784 | 1,904 | 3,616 | 4,398 | |||||||||||
Gain on extinguishment of debt, net of noncontrolling interests' share (4) | — | (6,452 | ) | — | (33,902 | ) | |||||||||
FFO allocable to Operating Partnership common unitholders, as adjusted | $ | 79,218 | $ | 98,675 | $ | 255,810 | $ | 301,389 | |||||||
FFO per diluted share | $ | 0.39 | $ | 0.52 | $ | 1.26 | $ | 1.63 | |||||||
FFO, as adjusted, per diluted share | $ | 0.40 | $ | 0.50 | $ | 1.28 | $ | 1.51 | |||||||
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted | 199,432 | 199,321 | 199,630 | 199,325 | |||||||||||
(1) Litigation expense is included in general and administrative expense in the consolidated statements of operations. Nonrecurring professional fees reimbursement is included in interest and other income in the consolidated statements of operations. | |||||||||||||||
(2) The nine months ended September 30, 2018 includes a gain on investment related to the land contributed by the Company to the Self Storage at Mid Rivers 50/50 joint venture. The three months and nine months ended September 30, 2017 represents a loss on investment related to the write down of the Company's 25% interest in River Ridge Mall based on the contract price to sell such interest to its joint venture partner. The sale closed in August 2017. | |||||||||||||||
(3) The three months and nine months ended September 30, 2018 includes default interest expense related to Acadiana Mall and Cary Town Center. The three months and nine months ended September 30, 2017 includes default interest expense related to Acadiana Mall and Wausau Center. The nine months ended September 30, 2017 also includes default interest expense related to Chesterfield Mall and Midland Mall. | |||||||||||||||
(4) The three months ended September 30, 2017 primarily represents a $6,851 gain on extinguishment of debt related to the non-recourse loan secured by Wausau Center, which was conveyed to the lender in the third quarter of 2017, which was partially offset by a loss on extinguishment of debt related to a prepayment fee of $371 related to the early retirement of a mortgage loan. Additionally, the nine months ended September 30, 2017 also includes a gain on extinguishment of debt related to the non-recourse loan secured by Chesterfield Mall, which was conveyed to the lender in the second quarter of 2017, a loss on extinguishment of debt related to a prepayment fee on the early retirement of the loans secured by The Outlet Shoppes at Oklahoma City, which was sold in the second quarter of 2017, and a gain on extinguishment of debt related to the non-recourse loan secured by Midland Mall, which was conveyed to the lender in the first quarter of 2017. |
10
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Nine Months Ended September 30, 2018
The reconciliation of diluted EPS to FFO per diluted share is as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Diluted EPS attributable to common shareholders | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.34 | ) | $ | 0.30 | ||||
Eliminate amounts per share excluded from FFO: | |||||||||||||||
Depreciation and amortization expense, including amounts from consolidated properties, unconsolidated affiliates, non-real estate assets and excluding amounts allocated to noncontrolling interests | 0.40 | 0.40 | 1.20 | 1.23 | |||||||||||
Loss on impairment, net of taxes | 0.08 | 0.13 | 0.43 | 0.35 | |||||||||||
Gain on depreciable property, net of taxes and noncontrolling interests' share | (0.02 | ) | — | (0.03 | ) | (0.25 | ) | ||||||||
FFO per diluted share | $ | 0.39 | $ | 0.52 | $ | 1.26 | $ | 1.63 |
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 September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
FFO allocable to Operating Partnership common unitholders | $ | 77,434 | $ | 102,852 | $ | 252,481 | $ | 325,546 | |||||||
Percentage allocable to common shareholders (1) | 86.58 | % | 85.84 | % | 86.37 | % | 85.82 | % | |||||||
FFO allocable to common shareholders | $ | 67,042 | $ | 88,288 | $ | 218,068 | $ | 279,384 | |||||||
FFO allocable to Operating Partnership common unitholders, as adjusted | $ | 79,218 | $ | 98,675 | $ | 255,810 | $ | 301,389 | |||||||
Percentage allocable to common shareholders (1) | 86.58 | % | 85.84 | % | 86.37 | % | 85.82 | % | |||||||
FFO allocable to common shareholders, as adjusted | $ | 68,587 | $ | 84,703 | $ | 220,943 | $ | 258,652 | |||||||
(1) Represents the weighted-average number of common shares outstanding for the period divided by the sum of the weighted-average number of common shares and the weighted-average number of Operating Partnership units outstanding during the period. See the reconciliation of shares and Operating Partnership units outstanding on page 16. |
11
SUPPLEMENTAL FFO INFORMATION: | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Lease termination fees | $ | 783 | $ | 879 | $ | 9,788 | $ | 1,990 | |||||||
Lease termination fees per share | $ | — | $ | — | $ | 0.05 | $ | 0.01 | |||||||
Straight-line rental income | $ | 388 | $ | (409 | ) | $ | (3,923 | ) | $ | 223 | |||||
Straight-line rental income per share | $ | — | $ | — | $ | (0.02 | ) | $ | — | ||||||
Gains on outparcel sales | $ | 4,548 | $ | 3,605 | $ | 11,033 | $ | 11,696 | |||||||
Gains on outparcel sales per share | $ | 0.02 | $ | 0.02 | $ | 0.06 | $ | 0.06 | |||||||
Net amortization of acquired above- and below-market leases | $ | (1,210 | ) | $ | 1,046 | $ | 982 | $ | 3,462 | ||||||
Net amortization of acquired above- and below-market leases per share | $ | (0.01 | ) | $ | 0.01 | $ | — | $ | 0.02 | ||||||
Net amortization of debt premiums and discounts | $ | 314 | $ | (369 | ) | $ | 727 | $ | (772 | ) | |||||
Net amortization of debt premiums and discounts per share | $ | — | $ | — | $ | — | $ | — | |||||||
Income tax benefit (provision) | $ | (1,034 | ) | $ | 1,064 | $ | 1,846 | $ | 4,784 | ||||||
Income tax benefit (provision) per share | $ | (0.01 | ) | $ | 0.01 | $ | 0.01 | $ | 0.02 | ||||||
Gain on extinguishment of debt, net of noncontrolling interests' share | $ | — | $ | 6,452 | $ | — | $ | 33,902 | |||||||
Gain on extinguishment of debt, net of noncontrolling interests' share per share | $ | — | $ | 0.03 | $ | — | $ | 0.17 | |||||||
Gain (loss) on investments, net of taxes | $ | — | $ | (354 | ) | $ | 287 | $ | (6,197 | ) | |||||
Gain (loss) on investments, net of taxes per share | $ | — | $ | — | $ | — | $ | (0.03 | ) | ||||||
Non-cash default interest expense | $ | (1,784 | ) | $ | (1,904 | ) | $ | (3,616 | ) | $ | (4,398 | ) | |||
Non-cash default interest expense per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | |||
Abandoned projects expense | $ | (38 | ) | $ | (132 | ) | $ | (377 | ) | $ | (5,151 | ) | |||
Abandoned projects expense per share | $ | — | $ | — | $ | — | $ | (0.03 | ) | ||||||
Interest capitalized | $ | 1,198 | $ | 452 | $ | 2,736 | $ | 1,676 | |||||||
Interest capitalized per share | $ | 0.01 | $ | — | $ | 0.01 | $ | 0.01 | |||||||
Litigation expenses | $ | — | $ | (17 | ) | $ | — | $ | (69 | ) | |||||
Litigation expenses per share | $ | — | $ | — | $ | — | $ | — | |||||||
Nonrecurring professional fees reimbursement | $ | — | $ | — | $ | — | $ | 919 | |||||||
Nonrecurring professional fees reimbursement per share | $ | — | $ | — | $ | — | $ | — |
As of September 30, | |||||||
2018 | 2017 | ||||||
Straight-line rent receivable | $ | 57,284 | $ | 62,681 |
12
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Nine Months Ended September 30, 2018
Same-center Net Operating Income
(Dollars in thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) | $ | (2,971 | ) | $ | 9,299 | $ | (33,608 | ) | $ | 118,444 | |||||
Adjustments: | |||||||||||||||
Depreciation and amortization | 71,945 | 71,732 | 217,261 | 225,461 | |||||||||||
Depreciation and amortization from unconsolidated affiliates | 10,438 | 9,633 | 31,177 | 28,533 | |||||||||||
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries | (2,136 | ) | (2,170 | ) | (6,424 | ) | (6,791 | ) | |||||||
Interest expense | 55,194 | 53,913 | 163,164 | 165,179 | |||||||||||
Interest expense from unconsolidated affiliates | 6,551 | 6,244 | 18,849 | 18,815 | |||||||||||
Noncontrolling interests' share of interest expense in other consolidated subsidiaries | (1,875 | ) | (1,584 | ) | (5,912 | ) | (5,160 | ) | |||||||
Abandoned projects expense | 38 | 132 | 377 | 5,151 | |||||||||||
Gain on sales of real estate assets | (7,880 | ) | (1,383 | ) | (15,998 | ) | (86,904 | ) | |||||||
(Gain) loss on sales of real estate assets of unconsolidated affiliates | 28 | (227 | ) | (564 | ) | (189 | ) | ||||||||
Noncontrolling interests' share of gain on sales of real estate assets in other consolidated affiliates | — | — | — | 26,639 | |||||||||||
(Gain) loss on investment | — | 354 | (387 | ) | 6,197 | ||||||||||
Gain on extinguishment of debt | — | (6,452 | ) | — | (30,927 | ) | |||||||||
Noncontrolling interests' share of loss on extinguishment of debt in other consolidated subsidiaries | — | — | — | (2,975 | ) | ||||||||||
Loss on impairment | 14,600 | 24,935 | 84,644 | 71,401 | |||||||||||
Income tax (benefit) provision | 1,034 | (1,064 | ) | (1,846 | ) | (4,784 | ) | ||||||||
Lease termination fees | (783 | ) | (879 | ) | (9,788 | ) | (1,990 | ) | |||||||
Straight-line rent and above- and below-market lease amortization | 822 | (637 | ) | 2,941 | (3,685 | ) | |||||||||
Net (income) loss attributable to noncontrolling interests in other consolidated subsidiaries | (24 | ) | (415 | ) | 369 | (25,266 | ) | ||||||||
General and administrative expenses | 16,051 | 13,568 | 47,845 | 45,402 | |||||||||||
Management fees and non-property level revenues | (2,293 | ) | (2,762 | ) | (9,642 | ) | (10,312 | ) | |||||||
Operating Partnership's share of property NOI | 158,739 | 172,237 | 482,458 | 532,239 | |||||||||||
Non-comparable NOI | (5,623 | ) | (9,145 | ) | (20,112 | ) | (37,291 | ) | |||||||
Total same-center NOI (1) | $ | 153,116 | $ | 163,092 | $ | 462,346 | $ | 494,948 | |||||||
Total same-center NOI percentage change | (6.1 | )% | (6.6 | )% |
13
Same-center Net Operating Income
(Continued)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Malls | $ | 137,973 | $ | 147,449 | $ | 416,452 | $ | 446,926 | |||||||
Associated centers | 8,016 | 7,899 | 23,788 | 24,390 | |||||||||||
Community centers | 5,784 | 5,994 | 17,387 | 18,148 | |||||||||||
Offices and other | 1,343 | 1,750 | 4,719 | 5,484 | |||||||||||
Total same-center NOI (1) | $ | 153,116 | $ | 163,092 | $ | 462,346 | $ | 494,948 | |||||||
Percentage Change: | |||||||||||||||
Malls | (6.4 | )% | (6.8 | )% | |||||||||||
Associated centers | 1.5 | % | (2.5 | )% | |||||||||||
Community centers | (3.5 | )% | (4.2 | )% | |||||||||||
Offices and other | (23.3 | )% | (13.9 | )% | |||||||||||
Total same-center NOI (1) | (6.1 | )% | (6.6 | )% |
(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 September 30, 2018, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ending September 30, 2018. New properties are excluded from same-center NOI, until they meet this criteria. Properties excluded from the same-center pool that would otherwise meet this criteria are properties which are 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, or minority interest properties in which we own an interest of 25% or less. |
14
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of September 30, 2018 and 2017
Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
As of September 30, 2018 | |||||||||||||||||||
Fixed Rate | Variable Rate | Total per Debt Schedule | Unamortized Deferred Financing Costs | Total | |||||||||||||||
Consolidated debt | $ | 3,160,776 | $ | 970,508 | $ | 4,131,284 | $ | (15,476 | ) | $ | 4,115,808 | ||||||||
Noncontrolling interests' share of consolidated debt | (94,787 | ) | — | (94,787 | ) | 611 | (94,176 | ) | |||||||||||
Company's share of unconsolidated affiliates' debt | 553,339 | 96,598 | 649,937 | (2,826 | ) | 647,111 | |||||||||||||
Company's share of consolidated and unconsolidated debt | $ | 3,619,328 | $ | 1,067,106 | $ | 4,686,434 | $ | (17,691 | ) | $ | 4,668,743 | ||||||||
Weighted-average interest rate | 5.16 | % | 4.01 | % | 4.90 | % | |||||||||||||
As of September 30, 2017 | |||||||||||||||||||
Fixed Rate | Variable Rate | Total per Debt Schedule | Unamortized Deferred Financing Costs | Total | |||||||||||||||
Consolidated debt | $ | 3,170,000 | $ | 1,065,450 | $ | 4,235,450 | $ | (19,272 | ) | $ | 4,216,178 | ||||||||
Noncontrolling interests' share of consolidated debt | (77,494 | ) | (5,434 | ) | (82,928 | ) | 719 | (82,209 | ) | ||||||||||
Company's share of unconsolidated affiliates' debt | 535,134 | 58,692 | 593,826 | (2,357 | ) | 591,469 | |||||||||||||
Company's share of consolidated and unconsolidated debt | $ | 3,627,640 | $ | 1,118,708 | $ | 4,746,348 | $ | (20,910 | ) | $ | 4,725,438 | ||||||||
Weighted-average interest rate | 5.19 | % | 2.79 | % | 4.63 | % |
Debt-To-Total-Market Capitalization Ratio as of September 30, 2018
(In thousands, except stock price)
Shares Outstanding | Stock Price (1) | Value | ||||||||
Common stock and Operating Partnership units | 199,430 | $ | 3.99 | $ | 795,726 | |||||
7.375% Series D Cumulative Redeemable Preferred Stock | 1,815 | 250.00 | 453,750 | |||||||
6.625% Series E Cumulative Redeemable Preferred Stock | 690 | 250.00 | 172,500 | |||||||
Total market equity | 1,421,976 | |||||||||
Company's share of total debt, excluding unamortized deferred financing costs | 4,686,434 | |||||||||
Total market capitalization | $ | 6,108,410 | ||||||||
Debt-to-total-market capitalization ratio | 76.7 | % |
(1) | Stock price for common stock and Operating Partnership units equals the closing price of the common stock on September 28, 2018. The stock prices for the preferred stocks represent the liquidation preference of each respective series. |
15
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of September 30, 2018 and 2017
Reconciliation of Shares and Operating Partnership Units Outstanding
(In thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
Basic | Diluted | Basic | Diluted | ||||||||
2018: | |||||||||||
Weighted-average shares - EPS | 172,665 | 172,665 | 172,426 | 172,426 | |||||||
Weighted-average Operating Partnership units | 26,767 | 26,767 | 27,204 | 27,204 | |||||||
Weighted-average shares - FFO | 199,432 | 199,432 | 199,630 | 199,630 | |||||||
2017: | |||||||||||
Weighted-average shares - EPS | 171,096 | 171,096 | 171,060 | 171,060 | |||||||
Weighted-average Operating Partnership units | 28,225 | 28,225 | 28,265 | 28,265 | |||||||
Weighted-average shares - FFO | 199,321 | 199,321 | 199,325 | 199,325 |
Dividend Payout Ratio
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Weighted-average cash dividend per share | $ | 0.20888 | $ | 0.27281 | $ | 0.62661 | $ | 0.81843 | |||||||
FFO, as adjusted, per diluted fully converted share | $ | 0.40 | $ | 0.50 | $ | 1.28 | $ | 1.51 | |||||||
Dividend payout ratio | 52.2 | % | 54.6 | % | 49.0 | % | 54.2 | % |
16
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of September 30, 2018
Consolidated Balance Sheets (Unaudited; in thousands, except share data) | |||||||
As of | |||||||
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Real estate assets: | |||||||
Land | $ | 818,436 | $ | 813,390 | |||
Buildings and improvements | 6,543,965 | 6,723,194 | |||||
7,362,401 | 7,536,584 | ||||||
Accumulated depreciation | (2,514,904 | ) | (2,465,095 | ) | |||
4,847,497 | 5,071,489 | ||||||
Held for sale | 14,807 | — | |||||
Developments in progress | 71,319 | 85,346 | |||||
Net investment in real estate assets | 4,933,623 | 5,156,835 | |||||
Cash and cash equivalents | 20,695 | 32,627 | |||||
Receivables: | |||||||
Tenant, net of allowance for doubtful accounts of $2,214 and $2,011 in 2018 and 2017, respectively | 77,095 | 83,552 | |||||
Other, net of allowance for doubtful accounts of $838 in 2017 | 7,109 | 7,570 | |||||
Mortgage and other notes receivable | 8,171 | 8,945 | |||||
Investments in unconsolidated affiliates | 275,884 | 249,192 | |||||
Intangible lease assets and other assets | 170,184 | 166,087 | |||||
$ | 5,492,761 | $ | 5,704,808 | ||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||
Mortgage and other indebtedness, net | $ | 4,115,808 | $ | 4,230,845 | |||
Accounts payable and accrued liabilities | 249,232 | 228,650 | |||||
Total liabilities | 4,365,040 | 4,459,495 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling interests | 6,228 | 8,835 | |||||
Shareholders' equity: | |||||||
Preferred stock, $.01 par value, 15,000,000 shares authorized: | |||||||
7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000 shares outstanding | 18 | 18 | |||||
6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding | 7 | 7 | |||||
Common stock, $.01 par value, 350,000,000 shares authorized, 172,663,873 and 171,088,778 issued and outstanding in 2018 and 2017, respectively | 1,727 | 1,711 | |||||
Additional paid-in capital | 1,967,882 | 1,974,537 | |||||
Dividends in excess of cumulative earnings | (927,416 | ) | (836,269 | ) | |||
Total shareholders' equity | 1,042,218 | 1,140,004 | |||||
Noncontrolling interests | 79,275 | 96,474 | |||||
Total equity | 1,121,493 | 1,236,478 | |||||
$ | 5,492,761 | $ | 5,704,808 |
17
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of September 30, 2018
Condensed Combined Financial Statements - Unconsolidated Affiliates
(Unaudited; in thousands)
As of | |||||||
September 30, 2018 | December 31, 2017 | ||||||
ASSETS: | |||||||
Investment in real estate assets | $ | 2,025,289 | $ | 2,089,262 | |||
Accumulated depreciation | (658,163 | ) | (618,922 | ) | |||
1,367,126 | 1,470,340 | ||||||
Developments in progress | 68,768 | 36,765 | |||||
Net investment in real estate assets | 1,435,894 | 1,507,105 | |||||
Other assets | 186,912 | 201,114 | |||||
Total assets | $ | 1,622,806 | $ | 1,708,219 | |||
LIABILITIES: | |||||||
Mortgage and other indebtedness, net | $ | 1,322,144 | $ | 1,248,817 | |||
Other liabilities | 42,986 | 41,291 | |||||
Total liabilities | 1,365,130 | 1,290,108 | |||||
OWNERS' EQUITY: | |||||||
The Company | 183,392 | 216,292 | |||||
Other investors | 74,284 | 201,819 | |||||
Total owners' equity | 257,676 | 418,111 | |||||
Total liabilities and owners’ equity | $ | 1,622,806 | $ | 1,708,219 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total revenues | $ | 54,579 | $ | 57,395 | $ | 166,843 | $ | 175,250 | |||||||
Depreciation and amortization | (19,606 | ) | (20,151 | ) | (58,918 | ) | (60,276 | ) | |||||||
Operating expenses | (17,215 | ) | (17,431 | ) | (54,026 | ) | (52,818 | ) | |||||||
Income from operations | 17,758 | 19,813 | 53,899 | 62,156 | |||||||||||
Interest and other income | 355 | 356 | 1,059 | 1,186 | |||||||||||
Interest expense | (13,368 | ) | (12,907 | ) | (38,845 | ) | (38,891 | ) | |||||||
Loss on impairment | (89,826 | ) | — | (89,826 | ) | — | |||||||||
Gain (loss) on sales of real estate assets | (55 | ) | 606 | 1,128 | 529 | ||||||||||
Net income (loss) | $ | (85,136 | ) | $ | 7,868 | $ | (72,585 | ) | $ | 24,980 |
Company's Share for the Three Months Ended September 30, | Company's Share for the Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total revenues | $ | 28,057 | $ | 28,448 | $ | 86,198 | $ | 87,916 | |||||||
Depreciation and amortization | (10,438 | ) | (9,633 | ) | (31,177 | ) | (28,533 | ) | |||||||
Operating expenses | (8,503 | ) | (8,338 | ) | (26,575 | ) | (25,150 | ) | |||||||
Income from operations | 9,116 | 10,477 | 28,446 | 34,233 | |||||||||||
Interest and other income | 247 | 246 | 730 | 797 | |||||||||||
Interest expense | (6,551 | ) | (6,244 | ) | (18,849 | ) | (18,815 | ) | |||||||
Loss on impairment | (1,022 | ) | — | (1,022 | ) | — | |||||||||
Gain (loss) on sales of real estate assets | (28 | ) | 227 | 564 | 189 | ||||||||||
Net income | $ | 1,762 | $ | 4,706 | $ | 9,869 | $ | 16,404 |
18
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Nine Months Ended September 30, 2018
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 and gain or loss on extinguishment of debt.
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 September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) | $ | (2,971 | ) | $ | 9,299 | $ | (33,608 | ) | $ | 118,444 | |||||
Depreciation and amortization | 71,945 | 71,732 | 217,261 | 225,461 | |||||||||||
Depreciation and amortization from unconsolidated affiliates | 10,438 | 9,633 | 31,177 | 28,533 | |||||||||||
Interest expense | 55,194 | 53,913 | 163,164 | 165,179 | |||||||||||
Interest expense from unconsolidated affiliates | 6,551 | 6,244 | 18,849 | 18,815 | |||||||||||
Income taxes | 1,193 | (117 | ) | (1,262 | ) | (2,292 | ) | ||||||||
Loss on impairment | 14,600 | 24,935 | 84,644 | 71,401 | |||||||||||
Loss on impairment of unconsolidated affiliates | 1,022 | — | 1,022 | — | |||||||||||
(Gain) loss on depreciable property | (3,307 | ) | 2,001 | (5,543 | ) | (75,429 | ) | ||||||||
(Gain) loss on investments | — | 354 | (387 | ) | 6,197 | ||||||||||
EBITDAre (1) | 154,665 | 177,994 | 475,317 | 556,309 | |||||||||||
Gain on extinguishment of debt, net of noncontrolling interests' share | — | (6,452 | ) | — | (33,902 | ) | |||||||||
Abandoned projects | 38 | 132 | 377 | 5,151 | |||||||||||
Net (income) loss attributable to noncontrolling interests in other consolidated subsidiaries | (24 | ) | (415 | ) | 369 | (25,266 | ) | ||||||||
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries | (2,136 | ) | (2,170 | ) | (6,424 | ) | (6,791 | ) | |||||||
Noncontrolling interests' share of interest expense in other consolidated subsidiaries | (1,875 | ) | (1,584 | ) | (5,912 | ) | (5,160 | ) | |||||||
Noncontrolling interests' share of gain on depreciable property | — | — | — | 26,639 | |||||||||||
Company's share of Adjusted EBITDAre | $ | 150,668 | $ | 167,505 | $ | 463,727 | $ | 516,980 | |||||||
(1) Includes $4,597 and $3,611 for the three months ended September 30, 2018 and 2017, respectively, and $11,071 and $11,696 for the nine months ended September 30, 2018 and 2017, respectively, related to sales of non-depreciable real estate assets. | |||||||||||||||
Interest Expense: | |||||||||||||||
Interest expense | $ | 55,194 | $ | 53,913 | $ | 163,164 | $ | 165,179 | |||||||
Interest expense from unconsolidated affiliates | 6,551 | 6,244 | 18,849 | 18,815 | |||||||||||
Noncontrolling interests' share of interest expense in other consolidated subsidiaries | (1,875 | ) | (1,584 | ) | (5,912 | ) | (5,160 | ) | |||||||
Company's share of interest expense | $ | 59,870 | $ | 58,573 | $ | 176,101 | $ | 178,834 | |||||||
19
Reconciliation of Adjusted EBITDAre to Cash Flows Provided By Operating Activities (In thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Ratio of Adjusted EBITDAre to Interest Expense | 2.5 | x | 2.9 | x | 2.6 | x | 2.9 | x | |||||||
Company's share of Adjusted EBITDAre | $ | 150,668 | $ | 167,505 | $ | 463,727 | $ | 516,980 | |||||||
Interest expense | (55,194 | ) | (53,913 | ) | (163,164 | ) | (165,179 | ) | |||||||
Noncontrolling interests' share of interest expense in other consolidated subsidiaries | 1,875 | 1,584 | 5,912 | 5,160 | |||||||||||
Income taxes | (1,193 | ) | 117 | 1,262 | 2,292 | ||||||||||
Net amortization of deferred financing costs, debt premiums and discounts | 1,858 | 778 | 5,451 | 2,904 | |||||||||||
Net amortization of intangible lease assets and liabilities | 1,634 | (352 | ) | 198 | (1,235 | ) | |||||||||
Depreciation and interest expense from unconsolidated affiliates | (16,989 | ) | (15,877 | ) | (50,026 | ) | (47,348 | ) | |||||||
Loss on impairment of unconsolidated affiliates | (1,022 | ) | — | (1,022 | ) | — | |||||||||
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries | 2,136 | 2,170 | 6,424 | 6,791 | |||||||||||
Net income (loss) attributable to noncontrolling interests in other consolidated subsidiaries | 24 | 415 | (369 | ) | 25,266 | ||||||||||
Gains on outparcel sales | (4,573 | ) | (3,384 | ) | (10,455 | ) | (11,475 | ) | |||||||
Noncontrolling interests' share of loss on extinguishment of debt | — | — | — | 2,975 | |||||||||||
Noncontrolling interests' share of gain on depreciable property | — | — | — | (26,639 | ) | ||||||||||
Equity in earnings of unconsolidated affiliates | (1,762 | ) | (4,706 | ) | (9,869 | ) | (16,404 | ) | |||||||
Distributions of earnings from unconsolidated affiliates | 2,905 | 6,721 | 12,574 | 16,361 | |||||||||||
Share-based compensation expense | 912 | 1,245 | 4,310 | 4,569 | |||||||||||
Provision for doubtful accounts | 487 | 979 | 3,273 | 3,353 | |||||||||||
Change in deferred tax assets | (713 | ) | (839 | ) | (2,706 | ) | 2,911 | ||||||||
Changes in operating assets and liabilities | 23,479 | 29,180 | 18,894 | 15,668 | |||||||||||
Cash flows provided by operating activities | $ | 104,532 | $ | 131,623 | $ | 284,414 | $ | 336,950 |
20
Supplemental Financial And Operating Information
As of September 30, 2018
Schedule of Mortgage and Other Indebtedness
(Dollars in thousands )
Property | Location | Non- controlling Interest % | Original Maturity Date | Optional Extended Maturity Date | Interest Rate | Balance | Balance | |||||||||
Fixed | Variable | |||||||||||||||
Operating Properties: | ||||||||||||||||
Acadiana Mall | Lafayette, LA | Apr-17 | 5.67% | $ | 122,143 | (1) | $ | 122,143 | $ | — | ||||||
Cary Towne Center | Cary, NC | Jun-18 | 4.00% | 43,716 | (2) | 43,716 | — | |||||||||
The Outlet Shoppes at Laredo | Laredo, TX | May-19 | May-21 | 4.75% | 60,000 | — | 60,000 | |||||||||
Honey Creek Mall | Terre Haute, IN | Jul-19 | 8.00% | 24,385 | 24,385 | — | ||||||||||
Volusia Mall | Daytona Beach, FL | Jul-19 | 8.00% | 41,948 | 41,948 | — | ||||||||||
Greenbrier Mall | Chesapeake, VA | Dec-19 | Dec-20 | 5.41% | 68,776 | 68,776 | — | |||||||||
Hickory Point Mall | Forsyth, IL | Dec-19 | 5.85% | 27,446 | 27,446 | — | ||||||||||
The Outlet Shoppes at Atlanta - Phase II | Woodstock, GA | Dec-19 | 4.60% | 4,608 | — | 4,608 | ||||||||||
The Terrace | Chattanooga, TN | Jun-20 | 7.25% | 12,430 | 12,430 | — | ||||||||||
Burnsville Center | Burnsville, MN | Jul-20 | 6.00% | 67,900 | 67,900 | — | ||||||||||
The Outlet Shoppes of the Bluegrass - Phase II | Simpsonville, KY | Jul-20 | 4.60% | 9,542 | — | 9,542 | ||||||||||
Parkway Place | Huntsville, AL | Jul-20 | 6.50% | 34,774 | 34,774 | — | ||||||||||
Valley View Mall | Roanoke, VA | Jul-20 | 6.50% | 53,816 | 53,816 | — | ||||||||||
Parkdale Mall & Crossing | Beaumont, TX | Mar-21 | 5.85% | 79,199 | 79,199 | — | ||||||||||
EastGate Mall | Cincinnati, OH | Apr-21 | 5.83% | 34,460 | 34,460 | — | ||||||||||
Hamilton Crossing & Expansion | Chattanooga, TN | Apr-21 | 5.99% | 8,893 | 8,893 | — | ||||||||||
Park Plaza Mall | Little Rock, AR | Apr-21 | 5.28% | 82,000 | 82,000 | — | ||||||||||
Fayette Mall | Lexington, KY | May-21 | 5.42% | 153,571 | 153,571 | — | ||||||||||
Alamance Crossing - East | Burlington, NC | Jul-21 | 5.83% | 45,689 | 45,689 | — | ||||||||||
Asheville Mall | Asheville, NC | Sep-21 | 5.80% | 66,544 | 66,544 | — | ||||||||||
Cross Creek Mall | Fayetteville, NC | Jan-22 | 4.54% | 116,538 | 116,538 | — | ||||||||||
Northwoods Mall | North Charleston, SC | Apr-22 | 5.08% | 65,540 | 65,540 | — | ||||||||||
Arbor Place | Atlanta (Douglasville), GA | May-22 | 5.10% | 109,783 | 109,783 | — | ||||||||||
CBL Center | Chattanooga, TN | Jun-22 | 5.00% | 17,969 | 17,969 | — | ||||||||||
Jefferson Mall | Louisville, KY | Jun-22 | 4.75% | 63,729 | 63,729 | — | ||||||||||
Southpark Mall | Colonial Heights, VA | Jun-22 | 4.85% | 60,091 | 60,091 | — | ||||||||||
WestGate Mall | Spartanburg, SC | Jul-22 | 4.99% | 34,185 | 34,185 | — | ||||||||||
The Outlet Shoppes at Atlanta | Woodstock, GA | Nov-23 | 4.90% | 73,607 | 73,607 | — | ||||||||||
The Outlet Shoppes of the Bluegrass | Simpsonville, KY | Dec-24 | 4.05% | 72,127 | 72,127 | — | ||||||||||
The Outlet Shoppes at Gettysburg | Gettysburg, PA | Oct-25 | 4.80% | 37,912 | 37,912 | — | ||||||||||
Hamilton Place | Chattanooga, TN | Jun-26 | 4.36% | 102,909 | 102,909 | — | ||||||||||
The Outlet Shoppes at El Paso | El Paso, TX | Oct-28 | 5.10% | 75,000 | 75,000 | — | ||||||||||
Total Loans On Operating Properties | 1,871,230 | 1,797,080 | 74,150 | |||||||||||||
Weighted-average interest rate | 5.31 | % | 5.33 | % | 4.73 | % | ||||||||||
Operating Partnership Debt: | ||||||||||||||||
Unsecured credit facilities: | ||||||||||||||||
$500,000 capacity | Oct-19 | Oct-20 | 3.65% | — | — | — | ||||||||||
$100,000 capacity | Oct-19 | Oct-20 | 3.65% | 47,695 | — | 47,695 | ||||||||||
$500,000 capacity | Oct-20 | 3.65% | 153,663 | — | 153,663 | |||||||||||
SUBTOTAL | 201,358 | — | 201,358 | |||||||||||||
21
Property | Location | Non- controlling Interest % | Original Maturity Date | Optional Extended Maturity Date | Interest Rate | Balance | Balance | |||||||||
Fixed | Variable | |||||||||||||||
Unsecured term loans: | ||||||||||||||||
$350,000 term loan | Oct-18 | Oct-19 | 3.85% | 350,000 | — | 350,000 | ||||||||||
$300,000 term loan | Jul-20 | Jul-21 | 4.10% | 300,000 | — | 300,000 | ||||||||||
$45,000 term loan | Jun-21 | Jun-22 | 3.75% | 45,000 | — | 45,000 | ||||||||||
SUBTOTAL | 695,000 | — | 695,000 | |||||||||||||
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% | (2,691 | ) | (2,691 | ) | — | |||||||||
Senior unsecured 4.60% notes | Oct-24 | 4.60% | 300,000 | 300,000 | — | |||||||||||
Senior unsecured 4.60% notes (discount) | Oct-24 | 4.60% | (49 | ) | (49 | ) | — | |||||||||
Senior unsecured 5.95% notes | Dec-26 | 5.95% | 625,000 | 625,000 | — | |||||||||||
Senior unsecured 5.95% notes (discount) | Dec-26 | 5.95% | (8,564 | ) | (8,564 | ) | — | |||||||||
SUBTOTAL | 1,363,696 | 1,363,696 | — | |||||||||||||
Total Consolidated Debt | $ | 4,131,284 | (3) | $ | 3,160,776 | $ | 970,508 | |||||||||
Weighted-average interest rate | 5.04 | % | 5.37 | % | 3.95 | % | ||||||||||
Plus CBL's Share Of Unconsolidated Affiliates' Debt: | ||||||||||||||||
Triangle Town Center | Raleigh, NC | Dec-18 | Dec-20 | 4.00% | $ | 13,900 | $ | 13,900 | $ | — | ||||||
Ambassador Town Center Infrastructure Improvements | Lafayette, LA | Aug-20 | 3.74% | 10,605 | (4) | 10,605 | — | |||||||||
Hammock Landing - Phase I | West Melbourne, FL | Feb-21 | Feb-23 | 4.35% | 20,868 | — | 20,868 | |||||||||
Hammock Landing - Phase II | West Melbourne, FL | Feb-21 | Feb-23 | 4.35% | 8,049 | — | 8,049 | |||||||||
The Pavilion at Port Orange | Port Orange, FL | Feb-21 | Feb-23 | 4.35% | 28,183 | — | 28,183 | |||||||||
York Town Center | York, PA | Feb-22 | 4.90% | 16,059 | 16,059 | — | ||||||||||
York Town Center - Pier 1 | York, PA | Feb-22 | 4.86% | 636 | — | 636 | ||||||||||
EastGate Mall - Self-Storage Development | Cincinnati, OH | Dec-22 | 4.85% | 4,162 | — | 4,162 | ||||||||||
West County Center | St. Louis, MO | Dec-22 | 3.40% | 89,882 | 89,882 | — | ||||||||||
Friendly Shopping Center | Greensboro, NC | Apr-23 | 3.48% | 47,615 | 47,615 | — | ||||||||||
The Shops at Friendly Center | Greensboro, NC | Apr-23 | 3.34% | 30,000 | 30,000 | — | ||||||||||
Ambassador Town Center | Lafayette, LA | Jun-23 | 3.22% | 29,357 | (5) | 29,357 | — | |||||||||
Coastal Grand | Myrtle Beach, SC | Aug-24 | 4.09% | 55,562 | 55,562 | — | ||||||||||
Coastal Grand Outparcel | Myrtle Beach, SC | Aug-24 | 4.09% | 2,681 | 2,681 | — | ||||||||||
Oak Park Mall | Overland Park, KS | Oct-25 | 3.97% | 135,764 | 135,764 | — | ||||||||||
Fremaux Town Center - Phase I | Slidell, LA | Jun-26 | 3.70% | 44,800 | 44,800 | — | ||||||||||
CoolSprings Galleria | Nashville, TN | May-28 | 4.84% | 77,114 | 77,114 | — | ||||||||||
SUBTOTAL | 615,237 | (3) | 553,339 | 61,898 | ||||||||||||
Plus CBL's Share of Unconsolidated Affiliates' Construction Loans: | ||||||||||||||||
The Shoppes at Eagle Point | Cookeville, TN | Oct-20 | Oct-22 | 4.96% | 32,679 | — | 32,679 | |||||||||
Mid Rivers Mall - Self-Storage Development | St. Peters, MO | Apr-23 | 4.85% | 2,021 | — | 2,021 | ||||||||||
SUBTOTAL | 34,700 | — | 34,700 | |||||||||||||
CBL's Share of Unconsolidated Affiliates' Debt | 649,937 | 553,339 | 96,598 | |||||||||||||
22
Property | Location | Non- controlling Interest % | Original Maturity Date | Optional Extended Maturity Date | Interest Rate | Balance | Balance | |||||||||
Fixed | Variable | |||||||||||||||
Less Noncontrolling Interests' Share Of Consolidated Debt: | ||||||||||||||||
The Terrace | Chattanooga, TN | 8% | Jun-20 | 7.25% | (994 | ) | (994 | ) | — | |||||||
Hamilton Crossing & Expansion | Chattanooga, TN | 8% | Apr-21 | 5.99% | (711 | ) | (711 | ) | — | |||||||
CBL Center | Chattanooga, TN | 8% | Jun-22 | 5.00% | (1,438 | ) | (1,438 | ) | — | |||||||
The Outlet Shoppes at Atlanta | Woodstock, GA | 25% | Nov-23 | 4.90% | (18,402 | ) | (18,402 | ) | — | |||||||
The Outlet Shoppes of the Bluegrass | Simpsonville, KY | 35% | Dec-24 | 4.05% | (25,245 | ) | (25,245 | ) | — | |||||||
The Outlet Shoppes at Gettysburg | Gettysburg, PA | 50% | Oct-25 | 4.80% | (18,956 | ) | (18,956 | ) | — | |||||||
Hamilton Place | Chattanooga, TN | 10% | Jun-26 | 4.36% | (10,291 | ) | (10,291 | ) | — | |||||||
The Outlet Shoppes at El Paso | El Paso, TX | 25% | Oct-28 | 5.10% | (18,750 | ) | (18,750 | ) | — | |||||||
(94,787 | ) | (94,787 | ) | — | ||||||||||||
Company's Share Of Consolidated And Unconsolidated Debt | $ | 4,686,434 | (3) | $ | 3,619,328 | $ | 1,067,106 | |||||||||
Weighted-average interest rate | 4.90 | % | 5.16 | % | 4.01 | % | ||||||||||
Total Debt of Unconsolidated Affiliates: | ||||||||||||||||
Triangle Town Center | Raleigh, NC | Dec-18 | Dec-20 | 4.00% | $ | 139,000 | $ | 139,000 | $ | — | ||||||
Ambassador Town Center Infrastructure Improvements | Lafayette, LA | Aug-20 | 3.74% | 10,605 | (4) | 10,605 | — | |||||||||
Hammock Landing - Phase I | West Melbourne, FL | Feb-21 | Feb-23 | 4.35% | 41,737 | — | 41,737 | |||||||||
Hammock Landing - Phase II | West Melbourne, FL | Feb-21 | Feb-23 | 4.35% | 16,097 | — | 16,097 | |||||||||
The Pavilion at Port Orange | Port Orange, FL | Feb-21 | Feb-23 | 4.35% | 56,366 | — | 56,366 | |||||||||
York Town Center | York, PA | Feb-22 | 4.90% | 32,118 | 32,118 | — | ||||||||||
York Town Center - Pier 1 | York, PA | Feb-22 | 4.86% | 1,271 | — | 1,271 | ||||||||||
EastGate Mall - Self-Storage Development | Cincinnati, OH | Dec-22 | 4.85% | 4,162 | — | 4,162 | ||||||||||
West County Center | St. Louis, MO | Dec-22 | 3.40% | 179,765 | 179,765 | — | ||||||||||
Friendly Shopping Center | Greensboro, NC | Apr-23 | 3.48% | 95,229 | 95,229 | — | ||||||||||
The Shops at Friendly Center | Greensboro, NC | Apr-23 | 3.34% | 60,000 | 60,000 | — | ||||||||||
Ambassador Town Center | Lafayette, LA | Jun-23 | 3.22% | 45,165 | (5) | 45,165 | — | |||||||||
Coastal Grand | Myrtle Beach, SC | Aug-24 | 4.09% | 111,123 | 111,123 | — | ||||||||||
Coastal Grand Outparcel | Myrtle Beach, SC | Aug-24 | 4.09% | 5,362 | 5,362 | — | ||||||||||
Oak Park Mall | Overland Park, KS | Oct-25 | 3.97% | 271,529 | 271,529 | — | ||||||||||
Fremaux Town Center - Phase I | Slidell, LA | Jun-26 | 3.70% | 68,923 | 68,923 | — | ||||||||||
CoolSprings Galleria | Nashville, TN | May-28 | 4.84% | 154,228 | 154,228 | — | ||||||||||
SUBTOTAL | 1,292,680 | 1,173,047 | 119,633 | |||||||||||||
Total Construction Loans of Unconsolidated Affiliates | ||||||||||||||||
The Shoppes at Eagle Point | Cookeville, TN | Oct-20 | Oct-22 | 4.96% | 32,679 | — | 32,679 | |||||||||
Mid Rivers Mall - Self-Storage Development | St. Peters, MO | Apr-23 | 4.85% | 2,021 | — | 2,021 | ||||||||||
SUBTOTAL | 34,700 | — | 34,700 | |||||||||||||
$ | 1,327,380 | $ | 1,173,047 | $ | 154,333 | |||||||||||
Weighted-average interest rate | 3.99 | % | 3.92 | % | 4.51 | % |
(1) | The non-recourse loan matured in 2017 and is in default and receivership. The lender has initiated foreclosure proceedings. |
(2) | The non-recourse loan is in default as the maturity date was accelerated due to a change in redevelopment plans. The Company and the lender executed a forbearance agreement in August 2018. |
(3) | See page 15 for unamortized deferred financing costs. |
(4) | The joint venture has an interest rate swap on a notional amount of $10,605, 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 $45,165, 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. |
23
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of September 30, 2018
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 Debt | CBL's Share of Unconsolidated Affiliates' Debt | Noncontrolling Interests' Share of Consolidated Debt | CBL's Share of Consolidated and Unconsolidated Debt | % of Total | Weighted Average Interest Rate | ||||||||||||||||
2017 | $ | 122,143 | (1) | $ | — | $ | — | $ | 122,143 | 2.61 | % | 5.67 | % | |||||||||
2018 | 43,716 | (1) | — | — | 43,716 | 0.93 | % | 4.00 | % | |||||||||||||
2019 | 448,387 | — | — | 448,387 | 9.57 | % | 4.60 | % | ||||||||||||||
2020 | 448,596 | 24,505 | (994 | ) | 472,107 | 10.07 | % | 4.90 | % | |||||||||||||
2021 | 830,356 | — | (711 | ) | 829,645 | 17.71 | % | 5.00 | % | |||||||||||||
2022 | 512,835 | 143,418 | (1,438 | ) | 654,815 | 13.97 | % | 4.59 | % | |||||||||||||
2023 | 523,607 | 166,093 | (18,402 | ) | 671,298 | 14.32 | % | 4.84 | % | |||||||||||||
2024 | 372,127 | 58,243 | (25,245 | ) | 405,125 | 8.64 | % | 4.46 | % | |||||||||||||
2025 | 37,912 | 135,764 | (18,956 | ) | 154,720 | 3.30 | % | 4.07 | % | |||||||||||||
2026 | 727,909 | 44,800 | (10,291 | ) | 762,418 | 16.27 | % | 5.62 | % | |||||||||||||
2028 | 75,000 | 77,114 | (18,750 | ) | 133,364 | 2.85 | % | 4.95 | % | |||||||||||||
Face Amount of Debt | 4,142,588 | 649,937 | (94,787 | ) | 4,697,738 | 100.24 | % | 4.90 | % | |||||||||||||
Discounts | (11,304 | ) | — | — | (11,304 | ) | (0.24 | )% | — | % | ||||||||||||
Total | $ | 4,131,284 | $ | 649,937 | $ | (94,787 | ) | $ | 4,686,434 | 100.00 | % | 4.90 | % |
Based on Original Maturity Dates:
Year | Consolidated Debt | CBL's Share of Unconsolidated Affiliates' Debt | Noncontrolling Interests' Share of Consolidated Debt | CBL's Share of Consolidated and Unconsolidated Debt | % of Total | Weighted Average Interest Rate | ||||||||||||||||
2017 | $ | 122,143 | (1) | $ | — | $ | — | $ | 122,143 | 2.61 | % | 5.67 | % | |||||||||
2018 | 393,716 | 13,900 | — | 407,616 | 8.70 | % | 3.87 | % | ||||||||||||||
2019 | 274,858 | — | — | 274,858 | 5.86 | % | 5.62 | % | ||||||||||||||
2020 | 632,125 | 43,284 | (994 | ) | 674,415 | 14.39 | % | 4.60 | % | |||||||||||||
2021 | 515,356 | 57,100 | (711 | ) | 571,745 | 12.19 | % | 5.33 | % | |||||||||||||
2022 | 467,835 | 110,739 | (1,438 | ) | 577,136 | 12.32 | % | 4.64 | % | |||||||||||||
2023 | 523,607 | 108,993 | (18,402 | ) | 614,198 | 13.11 | % | 4.89 | % | |||||||||||||
2024 | 372,127 | 58,243 | (25,245 | ) | 405,125 | 8.64 | % | 4.46 | % | |||||||||||||
2025 | 37,912 | 135,764 | (18,956 | ) | 154,720 | 3.30 | % | 4.07 | % | |||||||||||||
2026 | 727,909 | 44,800 | (10,291 | ) | 762,418 | 16.27 | % | 5.62 | % | |||||||||||||
2028 | 75,000 | 77,114 | (18,750 | ) | 133,364 | 2.85 | % | 4.95 | % | |||||||||||||
Face Amount of Debt | 4,142,588 | 649,937 | (94,787 | ) | 4,697,738 | 100.24 | % | 4.90 | % | |||||||||||||
Discounts | (11,304 | ) | — | — | (11,304 | ) | (0.24 | )% | — | % | ||||||||||||
Total | $ | 4,131,284 | $ | 649,937 | $ | (94,787 | ) | $ | 4,686,434 | 100.00 | % | 4.90 | % |
(1) | Represents a non-recourse loan that is in default. |
24
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of September 30, 2018
Unsecured Debt Covenant Compliance Ratios | Required | Actual | |||||
Debt to total asset value | < 60% | 53 | % | ||||
Unsecured indebtedness to unencumbered asset value | < 60% | 49 | % | (1) | |||
Unencumbered NOI to unsecured interest expense | > 1.75x | 2.6 | x | ||||
EBITDA to fixed charges (debt service) | > 1.5x | 2.3 | x |
(1) | The debt covenant limits the total amount of unsecured indebtedness the Company may have outstanding, which varies over time based on the ratio. Based on the Company’s outstanding unsecured indebtedness as of September 30, 2018, the total amount available to the Company to borrow on its lines of credit was $697,627. Therefore, the Company had additional availability of $491,436 based on the outstanding balances of the lines of credit as of September 30, 2018. |
Senior Unsecured Notes Compliance Ratios | Required | Actual | |||||
Total debt to total assets | < 60% | 52 | % | ||||
Secured debt to total assets | < 40% | (1) | 24 | % | |||
Total unencumbered assets to unsecured debt | > 150% | 215 | % | ||||
Consolidated income available for debt service to annual debt service charge | > 1.5x | 2.7 | x |
(1) | Secured debt to total assets must be less than 45% for the 2023 Notes and the 2024 Notes until January 1, 2020. |
25
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Nine Months Ended September 30, 2018
Unencumbered Consolidated Portfolio Statistics
Sales Per Square Foot for the Twelve Months Ended (1) (2) | Occupancy (2) | % of Consolidated Unencumbered NOI for the Nine Months Ended 9/30/18 (3) | ||||||||||||||||
9/30/18 | 9/30/17 | 9/30/18 | 9/30/17 | |||||||||||||||
Unencumbered consolidated properties: | ||||||||||||||||||
Tier 1 Malls | $ | 402 | $ | 430 | 94.2 | % | 95.8 | % | 21.0 | % | ||||||||
Tier 2 Malls | 338 | 338 | 90.4 | % | 91.4 | % | 54.5 | % | ||||||||||
Tier 3 Malls | 280 | 286 | 88.2 | % | 89.5 | % | 12.6 | % | ||||||||||
Total Malls | $ | 339 | $ | 345 | 90.5 | % | 91.7 | % | 88.1 | % | ||||||||
Total Associated Centers | N/A | N/A | 96.8 | % | 97.7 | % | 7.5 | % | ||||||||||
Total Community Centers | N/A | N/A | 99.0 | % | 98.9 | % | 3.3 | % | ||||||||||
Total Office Buildings and Other | N/A | N/A | 90.0 | % | 94.2 | % | 1.1 | % | ||||||||||
Total Unencumbered Consolidated Portfolio | $ | 339 | $ | 345 | 92.2 | % | 93.3 | % | 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 58.4% of total consolidated NOI of $418,506,986 (which excludes NOI related to dispositions) for the nine months ended September 30, 2018. |
26
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Nine Months Ended September 30, 2018
Mall Portfolio Statistics
TIER 1 Sales ≥ $375 per square foot | |||||||||||||||||||||
Property | Location | Total Center SF (1) | Sales Per Square Foot for the Twelve Months Ended (2) | Mall Occupancy | % of Total Mall NOI for the Nine Months Ended 9/30/18 (3) | ||||||||||||||||
9/30/18 | 9/30/17 | 9/30/18 | 9/30/17 | ||||||||||||||||||
Coastal Grand | Myrtle Beach, SC | 1,036,848 | |||||||||||||||||||
CoolSprings Galleria | Nashville, TN | 1,165,785 | |||||||||||||||||||
Cross Creek Mall | Fayetteville, NC | 1,022,560 | |||||||||||||||||||
Fayette Mall | Lexington, KY | 1,158,185 | |||||||||||||||||||
Friendly Center and The Shops at Friendly | Greensboro, NC | 1,340,403 | |||||||||||||||||||
Hamilton Place | Chattanooga, TN | 1,153,284 | |||||||||||||||||||
Jefferson Mall | Louisville, KY | 885,782 | |||||||||||||||||||
Mall del Norte | Laredo, TX | 1,199,539 | |||||||||||||||||||
Northwoods Mall | North Charleston, SC | 748,212 | |||||||||||||||||||
Oak Park Mall | Overland Park, KS | 1,599,247 | |||||||||||||||||||
The Outlet Shoppes at Atlanta | Woodstock, GA | 404,906 | |||||||||||||||||||
The Outlet Shoppes at El Paso | El Paso, TX | 433,046 | |||||||||||||||||||
The Outlet Shoppes of the Bluegrass | Simpsonville, KY | 428,072 | |||||||||||||||||||
St. Clair Square | Fairview Heights, IL | 1,077,004 | |||||||||||||||||||
Sunrise Mall | Brownsville, TX | 802,906 | |||||||||||||||||||
West County Center | Des Peres, MO | 1,197,362 | |||||||||||||||||||
West Towne Mall | Madison, WI | 858,148 | |||||||||||||||||||
Total Tier 1 Malls | 16,511,289 | $ | 456 | $ | 447 | 94.1 | % | 94.6 | % | 36.2 | % |
TIER 2 Sales of ≥ $300 to < $375 per square foot | ||||||||||||||
Property | Location | Total Center SF (1) | Sales Per Square Foot for the Twelve Months Ended (2) | Mall Occupancy | % of Total Mall NOI for the Nine Months Ended 9/30/18 (3) | |||||||||
9/30/18 | 9/30/17 | 9/30/18 | 9/30/17 | |||||||||||
Arbor Place | Atlanta (Douglasville), GA | 1,161,931 | ||||||||||||
Asheville Mall | Asheville, NC | 973,344 | ||||||||||||
Burnsville Center | Burnsville, MN | 1,045,836 | ||||||||||||
CherryVale Mall | Rockford, IL | 844,383 | ||||||||||||
Dakota Square Mall | Minot, ND | 812,734 | ||||||||||||
East Towne Mall | Madison, WI | 801,248 | ||||||||||||
EastGate Mall | Cincinnati, OH | 847,550 | ||||||||||||
Frontier Mall | Cheyenne, WY | 519,271 | ||||||||||||
Governor's Square | Clarksville, TN | 685,118 | ||||||||||||
Greenbrier Mall | Chesapeake, VA | 897,037 | ||||||||||||
Hanes Mall | Winston-Salem, NC | 1,501,259 | ||||||||||||
Harford Mall | Bel Air, MD | 505,559 | ||||||||||||
Honey Creek Mall | Terre Haute, IN | 676,870 | ||||||||||||
Imperial Valley Mall | El Centro, CA | 826,623 | ||||||||||||
Kirkwood Mall | Bismarck, ND | 860,914 | ||||||||||||
Laurel Park Place | Livonia, MI | 496,877 | ||||||||||||
Layton Hills Mall | Layton, UT | 482,156 | ||||||||||||
Mayfaire Town Center | Wilmington, NC | 645,989 | ||||||||||||
Meridian Mall | Lansing, MI | 943,686 | ||||||||||||
Northgate Mall | Chattanooga, TN | 796,254 |
27
Mall Portfolio Statistics (continued)
TIER 2 Sales of ≥ $300 to < $375 per square foot | |||||||||||||||||||||
Property | Location | Total Center SF (1) | Sales Per Square Foot for the Twelve Months Ended (2) | Mall Occupancy | % of Total Mall NOI for the Nine Months Ended 9/30/18 (3) | ||||||||||||||||
9/30/18 | 9/30/17 | 9/30/18 | 9/30/17 | ||||||||||||||||||
Northpark Mall | Joplin, MO | 877,834 | |||||||||||||||||||
Old Hickory Mall | Jackson, TN | 539,005 | |||||||||||||||||||
The Outlet Shoppes at Laredo (4) | Laredo, TX | 358,122 | |||||||||||||||||||
Park Plaza | Little Rock, AR | 561,551 | |||||||||||||||||||
Parkdale Mall | Beaumont, TX | 1,290,481 | |||||||||||||||||||
Parkway Place | Huntsville, AL | 647,802 | |||||||||||||||||||
Pearland Town Center | Pearland, TX | 686,222 | |||||||||||||||||||
Post Oak Mall | College Station, TX | 772,805 | |||||||||||||||||||
Richland Mall | Waco, TX | 693,450 | |||||||||||||||||||
South County Center | St. Louis, MO | 1,028,473 | |||||||||||||||||||
Southpark Mall | Colonial Heights, VA | 672,941 | |||||||||||||||||||
Turtle Creek Mall | Hattiesburg, MS | 845,571 | |||||||||||||||||||
Valley View Mall | Roanoke, VA | 863,443 | |||||||||||||||||||
Volusia Mall | Daytona Beach, FL | 1,046,931 | |||||||||||||||||||
WestGate Mall | Spartanburg, SC | 954,743 | |||||||||||||||||||
Westmoreland Mall | Greensburg, PA | 978,609 | |||||||||||||||||||
York Galleria | York, PA | 748,868 | |||||||||||||||||||
Total Tier 2 Malls | 29,891,490 | $ | 342 | $ | 343 | 90.0 | % | 91.1 | % | 51.3 | % |
TIER 3 Sales < $300 per square foot | |||||||||||||||||||||
Property | Location | Total Center SF (1) | Sales Per Square Foot for the Twelve Months Ended (2) | Mall Occupancy | % of Total Mall NOI for the Nine Months Ended 9/30/18 (3) | ||||||||||||||||
9/30/18 | 9/30/17 | 9/30/18 | 9/30/17 | ||||||||||||||||||
Alamance Crossing | Burlington, NC | 904,704 | |||||||||||||||||||
Brookfield Square | Brookfield, WI | 997,556 | |||||||||||||||||||
Eastland Mall | Bloomington, IL | 726,122 | |||||||||||||||||||
Kentucky Oaks Mall | Paducah, KY | 897,977 | |||||||||||||||||||
Mid Rivers Mall | St. Peters, MO | 1,034,302 | |||||||||||||||||||
Monroeville Mall | Pittsburgh, PA | 983,997 | |||||||||||||||||||
The Outlet Shoppes at Gettysburg | Gettysburg, PA | 249,937 | |||||||||||||||||||
Southaven Towne Center | Southaven, MS | 559,379 | |||||||||||||||||||
Stroud Mall | Stroudsburg, PA | 414,565 | |||||||||||||||||||
Total Tier 3 Malls | 6,768,539 | $ | 270 | $ | 278 | 85.3 | % | 86.7 | % | 9.2 | % | ||||||||||
Total Mall Portfolio | 53,171,318 | $ | 378 | $ | 376 | 90.8 | % | 91.7 | % | 96.7 | % |
28
Mall Portfolio Statistics (continued)
Excluded Malls (5) | ||||||||||||||||
Property | Category | Location | Total Center SF (1) | Sales Per Square Foot for the Twelve Months Ended (2) | Mall Occupancy | % of Total Mall NOI for the Nine Months Ended 9/30/18 (3) | ||||||||||
9/30/18 | 9/30/17 | 9/30/18 | 9/30/17 | |||||||||||||
Lender Malls: | ||||||||||||||||
Acadiana Mall | Lender | Lafayette, LA | 991,613 | |||||||||||||
Cary Towne Center | Lender | Cary, NC | 896,130 | |||||||||||||
1,887,743 | ||||||||||||||||
Other Excluded Malls: | ||||||||||||||||
Hickory Point Mall | Repositioning | Forsyth, IL | 741,648 | |||||||||||||
Triangle Town Center | Minority Interest | Raleigh, NC | 1,253,423 | |||||||||||||
1,995,071 | ||||||||||||||||
Total Excluded Malls | 3,882,814 | N/A | N/A | N/A | N/A | 3.3 | % |
(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 $433,379,139 for the malls listed in the table above for the nine months ended September 30, 2018. |
(4) | The Outlet Shoppes at Laredo is a non-stabilized mall and is excluded from Sales Per Square Foot. |
(5) | Excluded Malls represent malls that fall in the following categories, for which operational metrics are excluded: |
• | Lender Malls - Malls for 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. |
• | Repositioning Malls - Malls where we have determined that the current format of the property no longer represents the best use of the property and we are in the process of evaluating alternative strategies for the property, which may include major redevelopment or an alternative retail or non-retail format, or after evaluating alternative strategies for the property, we have determined that the property no longer meets our criteria for long-term investment. |
• | Minority Interest Malls - Malls in which we own an interest of 25% or less. |
29
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Nine Months Ended September 30, 2018
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet
Property Type | Square Feet | Prior Gross Rent PSF | New Initial Gross Rent PSF | % Change Initial | New Average Gross Rent PSF (2) | % Change Average | ||||||||||||||||
Quarter: | ||||||||||||||||||||||
All Property Types (1) | $ | 492,802 | $ | 39.43 | $ | 34.21 | (13.2 | )% | $ | 34.51 | (12.5 | )% | ||||||||||
Stabilized malls | 448,387 | 40.81 | 35.16 | (13.8 | )% | 35.47 | (13.1 | )% | ||||||||||||||
New leases * | 59,188 | 51.77 | 44.45 | (14.1 | )% | 46.83 | (9.5 | )% | ||||||||||||||
Renewal leases | 389,199 | 39.14 | 33.75 | (13.8 | )% | 33.74 | (13.8 | )% | ||||||||||||||
Year-to-Date: | ||||||||||||||||||||||
All Property Types (1) | 1,648,184 | $ | 41.51 | $ | 36.45 | (12.2 | )% | $ | 36.94 | (11.0 | )% | |||||||||||
Stabilized malls | 1,570,492 | 42.26 | 36.98 | (12.5 | )% | 37.48 | (11.3 | )% | ||||||||||||||
New leases * | 237,018 | 44.94 | 41.46 | (7.7 | )% | 43.55 | (3.1 | )% | ||||||||||||||
Renewal leases | 1,333,474 | 41.78 | 36.19 | (13.4 | )% | 36.40 | (12.9 | )% |
* | Excluding three leases executed during Q3 2018, average new lease spreads would have been 0.6% and (0.2)% for the three and nine months ended September 30, 2018, respectively. |
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 Feet | As of September 30, | |||||||||||
Quarter: | 2018 | 2017 | ||||||||||
Operating portfolio: | Same-center stabilized malls | $ | 32.77 | $ | 32.64 | |||||||
New leases | 154,968 | Stabilized malls | 32.77 | 32.83 | ||||||||
Renewal leases | 590,923 | Non-stabilized malls (4) | 25.48 | 26.25 | ||||||||
Development portfolio: | Associated centers | 13.68 | 13.85 | |||||||||
New leases | 87,293 | Community centers | 16.44 | 15.65 | ||||||||
Total leased | 833,184 | Office buildings | 18.01 | 19.12 | ||||||||
Year-to-Date: | ||||||||||||
Operating Portfolio: | ||||||||||||
New leases | 763,104 | |||||||||||
Renewal leases | 1,907,874 | |||||||||||
Development Portfolio: | ||||||||||||
New leases | 190,951 | |||||||||||
Total leased | 2,861,929 | |||||||||||
(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 September 30, 2018, 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 September 30, 2018 and The Outlet Shoppes of the Bluegrass and The Outlet Shoppes at Laredo as of September 30, 2017. |
30
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Nine Months Ended September 30, 2018
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet
For the Nine Months Ended September 30, 2018 Based on Commencement Date
Number of Leases | Square Feet | Term (in years) | Initial Rent PSF | Average Rent PSF | Expiring Rent PSF | Initial Rent Spread | Average Rent Spread | ||||||||||||||||||||||||||||
Commencement 2018: | |||||||||||||||||||||||||||||||||||
New | 118 | 287,933 | 7.30 | $ | 42.43 | $ | 44.39 | $ | 43.65 | $ | (1.22 | ) | (2.8 | )% | $ | 0.74 | 1.7 | % | |||||||||||||||||
Renewal | 486 | 1,499,531 | 2.83 | 33.92 | 34.40 | 40.23 | (6.31 | ) | (15.7 | )% | (5.83 | ) | (14.5 | )% | |||||||||||||||||||||
Commencement 2018 Total | 604 | 1,787,464 | 3.71 | 35.29 | 36.01 | 40.78 | (5.49 | ) | (13.5 | )% | (4.77 | ) | (11.7 | )% | |||||||||||||||||||||
Commencement 2019: | |||||||||||||||||||||||||||||||||||
New | 7 | 25,307 | 8.29 | 34.12 | 35.92 | 32.06 | 2.06 | 6.4 | % | 3.86 | 12.0 | % | |||||||||||||||||||||||
Renewal | 106 | 399,843 | 3.38 | 31.25 | 31.57 | 34.34 | (3.09 | ) | (9.0 | )% | (2.77 | ) | (8.1 | )% | |||||||||||||||||||||
Commencement 2019 Total | 113 | 425,150 | 3.69 | 31.42 | 31.83 | 34.20 | (2.78 | ) | (8.1 | )% | (2.37 | ) | (6.9 | )% | |||||||||||||||||||||
Total 2018/2019 | 717 | 2,212,614 | 3.70 | $ | 34.55 | $ | 35.20 | $ | 39.52 | $ | (4.97 | ) | (12.6 | )% | $ | (4.32 | ) | (10.9 | )% | ||||||||||||||||
31
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of September 30, 2018
Top 25 Tenants Based On Percentage Of Total Annualized Revenues
Tenant | Number of Stores | Square Feet | Percentage of Total Annualized Revenues (1) | ||||||||
1 | L Brands, Inc. (2) | 134 | 804,050 | 4.18% | |||||||
2 | Signet Jewelers Limited (3) | 171 | 252,147 | 2.83% | |||||||
3 | Foot Locker, Inc. | 113 | 525,466 | 2.65% | |||||||
4 | Ascena Retail Group, Inc. (4) | 165 | 844,994 | 2.16% | |||||||
5 | AE Outfitters Retail Company | 64 | 402,917 | 1.99% | |||||||
6 | Dick's Sporting Goods, Inc. (5) | 26 | 1,467,844 | 1.86% | |||||||
7 | Genesco Inc. (6) | 162 | 267,231 | 1.84% | |||||||
8 | The Gap, Inc. | 55 | 655,708 | 1.46% | |||||||
9 | Express Fashions | 40 | 331,347 | 1.39% | |||||||
10 | Luxottica Group, S.P.A. (7) | 111 | 245,530 | 1.35% | |||||||
11 | H&M | 41 | 859,413 | 1.30% | |||||||
12 | Finish Line, Inc. | 47 | 245,046 | 1.21% | |||||||
13 | Forever 21 Retail, Inc. | 20 | 410,070 | 1.19% | |||||||
14 | The Buckle, Inc. | 45 | 233,639 | 1.12% | |||||||
15 | JC Penney Company, Inc. (8) | 49 | 5,881,853 | 1.02% | |||||||
16 | Charlotte Russe Holding, Inc. | 44 | 280,834 | 1.01% | |||||||
17 | Abercrombie & Fitch, Co. | 45 | 299,937 | 0.97% | |||||||
18 | Shoe Show, Inc. | 42 | 534,162 | 0.89% | |||||||
19 | Barnes & Noble Inc. | 19 | 579,660 | 0.87% | |||||||
20 | Cinemark | 9 | 467,190 | 0.84% | |||||||
21 | Sears, Roebuck and Co. (9) | 36 | 4,918,225 | 0.82% | |||||||
22 | Hot Topic, Inc. | 94 | 215,002 | 0.80% | |||||||
23 | Claire's Stores, Inc. | 84 | 106,510 | 0.78% | |||||||
24 | The Children's Place Retail Stores, Inc. | 47 | 205,959 | 0.76% | |||||||
25 | Ulta | 27 | 278,370 | 0.68% | |||||||
1,690 | 21,313,104 | 35.97% | |||||||||
(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, Gordon's Jewelers, Jared Jewelers, JB Robinson, Kay Jewelers, LeRoy's Jewelers, Marks & Morgan, Osterman's Jewelers, Piercing Pagoda, Rogers Jewelers, Shaw's Jewelers, Silver & Gold Connection, Ultra Diamonds and Zales. | ||||||||||
(4) | Ascena Retail Group, Inc. operates Ann Taylor, Catherines, Dressbarn, Justice, Lane Bryant, LOFT, Lou & Grey and Maurices. | ||||||||||
(5) | Dick's Sporting Goods, Inc. operates Dick's Sporting Goods, Field & Stream and Golf Galaxy. | ||||||||||
(6) | Genesco Inc. operates Clubhouse, Hat Shack, Hat Zone, Johnston & Murphy, Journey's, Journey's Kidz, Lids, Lids Locker Room, Shi by Journey's and Underground by Journeys. | ||||||||||
(7) | Luxottica Group, S.P.A. operates Lenscrafters, Pearle Vision and Sunglass Hut. | ||||||||||
(8) | JC Penney Co., Inc. owns 29 of these stores. | ||||||||||
(9) | In October 2018, Sears Holding Corp. and affiliated entities filed for Chapter 11 bankruptcy protection. The above count includes six stores that are expected to close by year-end as part of closures announced through bankruptcy, including three stores that CBL purchased in January of 2017 in a sale-leaseback transaction for future redevelopment. Also included in the count are four stores that are closed as of September 30, 2018 but continued to pay rent. |
32
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Nine Months Ended September 30, 2018
Capital Expenditures
(In thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Tenant allowances (1) | $ | 6,978 | $ | 9,658 | $ | 35,199 | $ | 29,774 | |||||||
Renovations (2) | — | 5,190 | 563 | 9,255 | |||||||||||
Deferred maintenance: (3) | |||||||||||||||
Parking lot and parking lot lighting | 206 | 4,060 | 871 | 8,321 | |||||||||||
Roof repairs and replacements | 270 | 1,544 | 3,694 | 4,607 | |||||||||||
Other capital expenditures | 5,255 | 5,616 | 15,035 | 15,833 | |||||||||||
Total deferred maintenance expenditures | 5,731 | 11,220 | 19,600 | 28,761 | |||||||||||
Total capital expenditures | $ | 12,709 | $ | 26,068 | $ | 55,362 | $ | 67,790 |
(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)
2018 | 2017 | ||||||
Quarter ended: | |||||||
March 31, | $ | 1,810 | $ | 492 | |||
June 30, | 636 | 794 | |||||
September 30, | 689 | 544 | |||||
December 31, | 565 | ||||||
$ | 3,135 | $ | 2,395 |
33
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of September 30, 2018
Properties Opened During the Nine Months Ended September 30, 2018
(Dollars in thousands)
CBL's Share of | |||||||||||||||||||||||
Property | Location | CBL Ownership Interest | Total Project Square Feet | Total Cost (1) | Cost to Date (2) | 2018 Cost | Opening Date | Initial Unleveraged Yield | |||||||||||||||
Mall Expansion: | |||||||||||||||||||||||
Parkdale Mall - Restaurant Addition | Beaumont, TX | 100% | 4,700 | $ | 1,315 | $ | 1,409 | $ | 266 | Feb-18/ Mar-18 | 10.4% | ||||||||||||
Other - Outparcel Development: | |||||||||||||||||||||||
EastGate Mall - CubeSmart Self-storage (3) (4) | Cincinnati, OH | 50% | 93,501 | 4,514 | 3,234 | 2,380 | Sep-18 | 9.9% | |||||||||||||||
Laurel Park Place - Panera Bread (3) | Livonia, MI | 100% | 4,500 | 1,772 | 1,592 | 351 | May-18 | 9.7% | |||||||||||||||
98,001 | 6,286 | 4,826 | 2,731 | ||||||||||||||||||||
Total Properties Opened | 102,701 | $ | 7,601 | $ | 6,235 | $ | 2,997 | ||||||||||||||||
(1) Total Cost is presented net of reimbursements to be received. | |||||||||||||||||||||||
(2) Cost to Date does not reflect reimbursements until they are received. | |||||||||||||||||||||||
(3) Outparcel development adjacent to the mall. | |||||||||||||||||||||||
(4) Yield is based on the expected yield of the stabilized project. |
Redevelopments Completed During the Nine Months Ended September 30, 2018
(Dollars in thousands)
CBL's Share of | |||||||||||||||||||||||
Property | Location | CBL Ownership Interest | Total Project Square Feet | Total Cost (1) | Cost to Date (2) | 2018 Cost | Opening Date | Initial Unleveraged Yield | |||||||||||||||
Mall Redevelopments: | |||||||||||||||||||||||
East Towne Mall - Flix Brewhouse | Madison, WI | 100% | 40,795 | $ | 9,966 | $ | 9,742 | $ | 3,869 | Jul-18 | 8.4% | ||||||||||||
Frontier Mall - Sports Authority Redevelopment (Planet Fitness) | Cheyenne, WY | 100% | 24,750 | 1,385 | 901 | 679 | Feb-18 | 29.8% | |||||||||||||||
York Galleria - Partial JC Penney Redevelopment (Marshalls) | York, PA | 100% | 21,026 | 2,870 | 2,408 | 1,930 | Apr-18 | 11.0% | |||||||||||||||
Total Redevelopments Completed | 86,571 | $ | 14,221 | $ | 13,051 | $ | 6,478 | ||||||||||||||||
(1) Total Cost is presented net of reimbursements to be received. | |||||||||||||||||||||||
(2) Cost to Date does not reflect reimbursements until they are received. |
Properties Under Development at September 30, 2018
(Dollars in thousands)
CBL's Share of | |||||||||||||||||||||||
Property | Location | CBL Ownership Interest | Total Project Square Feet | Total Cost (1) | Cost to Date (2) | 2018 Cost | Expected Opening Date | Initial Unleveraged Yield | |||||||||||||||
Other Developments: | |||||||||||||||||||||||
Mid Rivers Mall - CubeSmart Self-storage (3) (4) | St. Peters, MO | 50% | 93,540 | $ | 4,122 | $ | 1,632 | $ | 1,632 | Dec-18 | 9.0% | ||||||||||||
The Shoppes at Eagle Point (5) | Cookeville, TN | 50% | 233,696 | 45,541 | 44,484 | 24,151 | Aug/Nov-18 | 8.1% | |||||||||||||||
327,236 | 49,663 | 46,116 | 25,783 | ||||||||||||||||||||
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CBL's Share of | |||||||||||||||||||||||
Property | Location | CBL Ownership Interest | Total Project Square Feet | Total Cost (1) | Cost to Date (2) | 2018 Cost | Expected Opening Date | Initial Unleveraged Yield | |||||||||||||||
Mall Redevelopments: | |||||||||||||||||||||||
Brookfield Square - Sears Redevelopment (Whirlyball/ Marcus Theaters) (6) | Brookfield, WI | 100% | 126,710 | 26,717 | 10,372 | 9,786 | Summer-19 | 10.7% | |||||||||||||||
Eastland Mall - JC Penney Redevelopment (H&M/Outback/Planet Fitness) | Bloomington, IL | 100% | 52,827 | 10,999 | 6,831 | 6,339 | Fall-18 | 6.3% | |||||||||||||||
East Towne Mall - Portillo's | Madison, WI | 100% | 9,000 | 2,956 | 2,405 | 1,884 | Winter-18 | 8.0% | |||||||||||||||
Friendly Center - O2 Fitness | Greensboro, NC | 50% | 27,048 | 2,285 | 1,397 | 1,281 | Winter-18 | 10.3% | |||||||||||||||
Hanes Mall - Dave & Buster's | Winston-Salem, NC | 100% | 44,922 | 5,963 | 1,854 | 1,657 | Spring-19 | 11.0% | |||||||||||||||
Jefferson Mall - Macy's Redevelopment (Round 1) | Louisville, KY | 100% | 50,070 | 9,392 | 5,270 | 4,192 | Nov-18 | 6.9% | |||||||||||||||
Northgate Mall - Sears Auto Center Redevelopment (Aubrey's/Panda Express) | Chattanooga, TN | 100% | 10,000 | 1,797 | 427 | 247 | Winter-18 | 7.6% | |||||||||||||||
Parkdale Mall - Macy's Redevelopment (Dick's Sporting Goods/Five Below/HomeGoods) (6) | Beaumont, TX | 100% | 86,136 | 20,899 | 1,742 | 1,220 | Spring-19 | 6.4% | |||||||||||||||
Volusia Mall - Sears Auto Center Redevelopment (Bonefish Grill/Metro Diner) | Daytona Beach, FL | 100% | 23,341 | 9,635 | 5,090 | 3,963 | Winter-18 | 8.0% | |||||||||||||||
430,054 | 90,643 | 35,388 | 30,569 | ||||||||||||||||||||
Total Properties Under Development | 757,290 | $ | 140,306 | $ | 81,504 | $ | 56,352 | ||||||||||||||||
(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 of the stabilized project. | |||||||||||||||||||||||
(4) Outparcel development adjacent to the mall. | |||||||||||||||||||||||
(5) The Company will fund 100% of the required equity contribution so costs in the above table are shown at 100%. A portion of the community center project will be funded through a construction loan with a total borrowing capacity of $36,400. | |||||||||||||||||||||||
(6) 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. |
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CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of September 30, 2018
CBL Core Portfolio Exposure to Sears and Closed Bon-Ton Locations and Redevelopment Plans
TIER 1 Sales ≥ $375 per square foot | |||||
Property | Location | Sears Status as of September 30, 2018 (1) | Sears Redevelopment Plans | Bon-Ton Redevelopment Plans | |
Coastal Grand | Myrtle Beach, SC | Open (O) | Owned by Sears | ||
CoolSprings Galleria | Nashville, TN | Redeveloped in 2015 | |||
Cross Creek Mall | Fayetteville, NC | Expected to Close | Executed leases for new Entertainment/Restaurants. Construction expected to start in 2019. | ||
Fayette Mall | Lexington, KY | Redeveloped in 2016 | |||
Friendly Center and The Shops at Friendly | Greensboro, NC | Open (O) | Owned by Sears. Whole Foods sub-leases 1/3 of the box. | ||
Hamilton Place | Chattanooga, TN | Expected to Close/CBL Terminated Lease to start redevelopment | Cheesecake Factory under construction. Executed leases for restaurants, sporting goods and entertainment. Will also include non-retail. Construction expected to start in 2019. | ||
Jefferson Mall | Louisville, KY | Expected to Close | Purchased in Jan 2017 sale-leaseback for future redevelopment. Under negotiation/LOIs with tenants. | ||
Mall del Norte | Laredo, TX | Open (O) | Owned by Sears | ||
Northwoods Mall | North Charleston, SC | Redeveloped (O) | Owned by Seritage. Redeveloped with Burlington. | ||
Oak Park Mall | Overland Park, KS | ||||
The Outlet Shoppes at Atlanta | Woodstock, GA | ||||
The Outlet Shoppes at El Paso | El Paso, TX | ||||
The Outlet Shoppes of the Bluegrass | Simpsonville, KY | ||||
St. Clair Square | Fairview Heights, IL | Open (O) | Building Owned by Sears | ||
Sunrise Mall | Brownsville, TX | Open (O) | Owned by Sears | ||
West County Center | Des Peres, MO | ||||
West Towne Mall | Madison, WI | Redeveloped (O) | Owned by Seritage. Redeveloped with Dave & Busters and Total Wine. | Owned by Third Party |
TIER 2 Sales ≥ $300 to < $375 per square foot | |||||
Property | Location | Sears Status as of September 30, 2018 (1) | Sears Redevelopment Plans | Bon-Ton Redevelopment Plans | |
Arbor Place | Atlanta (Douglasville), GA | Open (O) | Owned by Sears | ||
Asheville Mall | Asheville, NC | Closed (O) | Owned by Seritage | ||
Burnsville Center | Burnsville, MN | Closed (O) | Owned by Seritage | ||
CherryVale Mall | Rockford, IL | Open | Potential Non-retail | Choice Home Center (Executed). Projected opening November 2018. | |
Dakota Square Mall | Minot, ND | Closed | Under negotiation/LOIs with tenants. | Lease out for signature with value retailer. | |
East Towne Mall | Madison, WI | Open (O) | Owned by Sears | Owned by Third Party | |
EastGate Mall | Cincinnati, OH | Open | Purchased in January 2017 sale-leaseback for future redevelopment. Under negotiation/LOIs with tenants. | ||
Frontier Mall | Cheyenne, WY | Closed (O) | Owned by 3rd Party. | ||
Governor's Square | Clarksville, TN | Expected to Close | 50/50 Joint Venture Property. Under negotiation/LOIs with tenants. |
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CBL Core Portfolio Exposure to Sears and Closed Bon-Ton Locations and Redevelopment Plans (continued)
TIER 2 Sales ≥ $300 to < $375 per square foot | |||||
Property | Location | Sears Status as of September 30, 2018 (1) | Sears Redevelopment Plans | Bon-Ton Redevelopment Plans | |
Greenbrier Mall | Chesapeake, VA | Expected to Close (O) | Owned by Seritage | ||
Hanes Mall | Winston-Salem, NC | Open (O) | Owned by 3rd Party. Novant Health, Inc. purchased Sears and Sear TBA for future medical office | ||
Harford Mall | Bel Air, MD | Open | Potential entertainment/restaurants | ||
Honey Creek Mall | Terre Haute, IN | Expected to Close | Under negotiation/LOIs with tenants. | Vendors Village (Executed). Expected to open in Q4 '18. | |
Imperial Valley Mall | El Centro, CA | Expected to Close (O) | Owned by Seritage | ||
Kirkwood Mall | Bismarck, ND | Under negotiation/LOIs with tenants. | |||
Laurel Park Place | Livonia, MI | Under negotiation/LOIs with tenants. | |||
Layton Hills Mall | Layton, UT | ||||
Mayfaire Town Center | Wilmington, NC | ||||
Meridian Mall | Lansing, MI | Under negotiation/LOIs with tenants. | |||
Northgate Mall | Chattanooga, TN | Open (O) | Owned by Sears | ||
Northpark Mall | Joplin, MO | Open (O) | Building owned by Sears | ||
Old Hickory Mall | Jackson, TN | Open | Potential box user | ||
The Outlet Shoppes at Laredo (4) | Laredo, TX | ||||
Park Plaza | Little Rock, AR | ||||
Parkdale Mall | Beaumont, TX | Open (O) | Owned by Sears | ||
Parkway Place | Huntsville, AL | ||||
Pearland Town Center | Pearland, TX | ||||
Post Oak Mall | College Station, TX | Expected to Close (O) | Owned by Sears | ||
Richland Mall | Waco, TX | Open (O) | Owned by Third Party | ||
South County Center | St. Louis, MO | Closed | Executed lease with entertainment user. | ||
Southpark Mall | Colonial Heights, VA | Closed | Under negotiation/LOIs with tenants. | ||
Turtle Creek Mall | Hattiesburg, MS | Closed (O) | Owned by Sears | ||
Valley View Mall | Roanoke, VA | Open (O) | Owned by Sears | ||
Volusia Mall | Daytona Beach, FL | Open (O) | Owned by Sears | ||
WestGate Mall | Spartanburg, SC | Closed (O) | Owned by Sears | ||
Westmoreland Mall | Greensburg, PA | Open (O) | Owned by Sears | Executed lease with casino. Est. 2019 open. | |
York Galleria | York, PA | Closed | Lease out for signature with tenant. | Owned by Third Party |
TIER 3 Sales < $300 per square foot | |||||
Property | Location | Sears Status as of September 30, 2018 (1) | Sears Redevelopment Plans | Bon-Ton Redevelopment Plans | |
Alamance Crossing | Burlington, NC | ||||
Brookfield Square | Brookfield, WI | Under Construction | Purchased in Jan 2017 sale-leaseback for future redevelopment. Under construction to add Marcus, Whirlyball, restaurants, Conference Center and hotel. | Owned by Third Party | |
Eastland Mall | Bloomington, IL | Expected to Close | Under negotiation/LOIs with tenants. | Under negotiation/LOIs with tenants. | |
Kentucky Oaks Mall | Paducah, KY | Under Construction (O) | Owned by Seritage. Burlington is under construction. | 50/50 JV asset. Leases out for signature with value retailer and national home furniture store. | |
Mid Rivers Mall | St. Peters, MO | Open (O) | Owned by Sears | ||
Monroeville Mall | Pittsburgh, PA | ||||
The Outlet Shoppes at Gettysburg | Gettysburg, PA |
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CBL Core Portfolio Exposure to Sears and Closed Bon-Ton Locations and Redevelopment Plans (continued)
TIER 3 Sales < $300 per square foot | |||||
Property | Location | Sears Status as of September 30, 2018 (1) | Sears Redevelopment Plans | Bon-Ton Redevelopment Plans | |
Southaven Towne Center | Southaven, MS | ||||
Stroud Mall | Stroudsburg, PA | Open | Potential Non-retail. | Shoprite under construction. Est. 2019 open. |
(1) | Sears boxes owned by the department store or a third party are noted with the following symbol next to the status (O). |
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