EX-99.1 2 cbl-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

 

img7069528_0.jpg 

 

 

 

Earnings Release and

Supplemental Financial and Operating Information

 

For the Three Months Ended

March 31, 2024


 

 

img7069528_1.jpg 

Earnings Release and Supplemental Financial and Operating Information

Table of Contents

 

 

Page

 

 

 

Earnings Release

 

1

 

 

 

Consolidated Statements of Operations

 

6

 

 

 

Reconciliations of Supplementary Non-GAAP Financial Measures:

 

 

 

 

 

Funds from Operations (FFO)

 

7

 

 

 

Same-center Net Operating Income (NOI)

 

9

 

 

 

Share of Consolidated and Unconsolidated Debt

 

10

 

 

 

Consolidated Balance Sheets

 

11

 

 

 

Condensed Combined Financial Statements - Unconsolidated Affiliates

 

12

 

 

 

Ratio of Adjusted EBITDAre to Interest Expense and Reconciliation of Adjusted EBITDAre to Operating Cash Flows

 

13

 

 

 

Components of Rental Revenues

 

14

 

 

 

Schedule of Mortgage and Other Indebtedness

 

15

 

 

 

Schedule of Maturities

 

17

 

 

 

Property List

 

19

 

 

 

Operating Metrics by Collateral Pool

 

22

 

 

 

CBL & Associates HoldCo I, LLC Financial Statements

 

24

 

 

 

Leasing Activity and Average Annual Base Rents

 

25

 

 

 

Top 25 Tenants Based on Percentage of Total Annualized Revenues

 

26

 

 

 

Capital Expenditures

 

26

 

 

 

Development Activity

 

27


 


 

 

img7069528_2.jpg 

 

News Release

 

Contact: Katie Reinsmidt, Executive Vice President - Chief Operating Officer, 423.490.8301, Katie.Reinsmidt@cblproperties.com

 

CBL PROPERTIES REPORTS STRONG RESULTS FOR FIRST QUARTER 2024

Same-center NOI increased 3.6% over the prior-year period

CHATTANOOGA, Tenn. (May 10, 2024) – CBL Properties (NYSE: CBL) announced results for the first quarter ended March 31, 2024. Results of operations as reported in the consolidated financial statements for these periods are prepared in accordance with GAAP. A description of each supplemental non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located at the end of this news release.

Three Months Ended March 31,

2024

2023

Net (loss) income attributable to common shareholders

$

(0.01

)

$

0.06

Funds from Operations ("FFO")

$

1.21

$

1.86

FFO, as adjusted (1)

$

1.50

$

1.56

(1)
For a reconciliation of FFO to FFO, as adjusted, for the periods presented, please refer to the footnotes to the Company’s reconciliation of net (loss) income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 7 of this news release.

KEY TAKEAWAYS:

CBL reported an increase in same-center NOI of 3.6% for first quarter 2024 compared with the prior-year period, and FFO, as adjusted, per share of $1.50, compared with $1.56 for first quarter 2023. Results were in-line with the previously issued guidance range for 2024 same-center NOI in the range of $428 million - $442 million and after adjusting for year-to-date share repurchase activity, 2024 FFO, as adjusted, per share guidance in the range of $6.24 - $6.69.
Over 1.1 million square feet of leases were executed in first quarter 2024. First quarter 2024 leasing results included comparable leases of approximately 775,000 square feet signed at a 10.2% increase in average rents versus the prior leases.
Portfolio occupancy was 89.4% as of March 31, 2024, a 50 basis point decline compared with portfolio occupancy of 89.9% as of March 31, 2023. Same-center occupancy for malls, lifestyle centers and outlet centers was 87.7% as of March 31, 2024, a 50-basis-point decline from 88.2% as of March 31, 2023.
Same-center tenant sales per square foot for the first quarter 2024 increased 0.2%, a reversal of previous sales trends. Same-center tenant sales per square foot for the 12-months ended March 31, 2024, declined 3.7% to $417, compared with $433 for the prior period.
As of March 31, 2024, the Company had $295.3 million of unrestricted cash and marketable securities.
More than $9.1 million in share repurchases completed year-to-date, continuing CBL's commitment to return capital to shareholders.
CBL's Board of Directors declared a cash dividend of $0.40 per common share for the quarter ending June 30, 2024. The dividend equates to an annual dividend payment of $1.60 per common share.

“As demonstrated by first quarter results, CBL is off to a solid start in 2024," said CBL's chief executive officer, Stephen D. Lebovitz. "We are pleased with the strong 3.6% growth in same-center NOI for the quarter. This growth reflects the improving fundamentals and overall quality of the CBL portfolio. NOI results also include the realization of a multi-year effort to reduce real estate taxes in certain markets, which was anticipated in our original guidance provided last quarter. In addition, results benefited from lower third-party contract expense related to the new contracts signed in third quarter 2023. Maintenance and repair expense was also lower in the quarter, primarily due to timing of projects which are expected to occur later in the year.

“Leasing volumes remained strong this quarter as we signed more than 220,000-square-feet of new leases, highlighted by new locations for Barnes & Noble's in-line mall concept, fast-growing global lifestyle retailer MINISO, Five Below, and food court stores for Popeye's. Comparable leasing spreads were notably up more than 10% as we replaced several spaces with below market prior rents. While we are pleased with this quarter’s leasing spreads, we anticipate experiencing some pressure going forward due to certain national tenants with higher occupancy costs. We were encouraged to see portfolio tenant sales improve modestly during the quarter. Although occupancy declined modestly in the quarter, the overall tenant environment is healthy, and we remain focused on capitalizing on tenant demand for new locations across the portfolio to generate occupancy growth.

1


 

"Interest rate volatility and its impact on the overall financing market remains a concern; however, we are benefiting from our well-laddered maturity schedule with only three major loan maturities in 2024. Financing plans for all three are actively in process. We are also exploring various avenues, including potential sales of term loan properties, to meet our term loan extension test in 2025 while minimizing use of our corporate cash reserve.

"Our focus through the remainder of the year is to build on the strong momentum generated in the first quarter while working to improve our debt maturity profile and grow our strong cash position."


Same-center Net Operating Income (“NOI”)(1):

Three Months Ended March 31,

2024

2023

Total Revenues

$

159,521

$

162,648

Total Expenses

$

(50,709

)

$

(57,637

)

Total portfolio same-center NOI

$

108,812

$

105,011

Total same-center NOI percentage change

3.6

%

Estimate for uncollectable revenues (recovery)

$

1,498

$

(749

)

(1)
CBL’s definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items such as straight-line rents and reimbursements, write-offs of landlord inducements and net amortization of above and below market leases.

Same-center NOI for the first quarter 2024 increased $3.8 million. First quarter 2024 results included a $3.9 million benefit to real estate tax expense related to reduced assessments and refunds received from successful appeals, net of related reimbursement amounts due to tenants. Operating and maintenance and repair expenses were approximately $2.2 million lower related to timing of maintenance and repair projects as well as lower third-party contract expense. Insurance expense rose $0.3 million in the quarter. The estimate for uncollectible revenues negatively impacted the quarter by approximately $2.2 million. Percentage rents declined $0.3 million due to lower tenant sales.

PORTFOLIO OPERATIONAL RESULTS

Occupancy(1):

As of March 31,

2024

2023

Total portfolio

89.4%

89.9%

Malls, lifestyle centers and outlet centers:

Total malls

87.0%

88.0%

Total lifestyle centers

90.5%

90.9%

Total outlet centers

90.5%

87.3%

Total same-center malls, lifestyle centers and outlet centers

87.7%

88.2%

All Other Properties:

Total open-air centers

95.1%

96.0%

Total other

84.5%

79.9%

 

(1)
Occupancy for malls, lifestyle centers and outlet centers represent percentage of in-line gross leasable area under 20,000 square feet occupied. Occupancy for open-air centers represents percentage of gross leasable area occupied.

New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:

% Change in Average Gross Rent Per Square Foot:

Three Months Ended
March 31,

2024

All Property Types

10.2%

Stabilized Malls, Lifestyle Centers and Outlet Centers

9.8%

New leases

109.3%

Renewal leases

1.0%

Same-Center Sales Per Square Foot for In-line Tenants 10,000 Square Feet or Less:

Sales Per Square Foot for the Trailing Twelve Months Ended March 31,

2024

2023

% Change

Malls, lifestyle centers and outlet centers same-center sales per square foot

$

417

$

433

(3.7)%

 

2


 

DIVIDEND

On May 8, 2024, CBL’s Board of Directors declared CBL's regular quarterly cash dividend for the three months ended June 30, 2024, of $0.40 per share. The dividend, which equates to an annual dividend payment of $1.60 per share, is payable on June 28, 2024, to shareholders of record as of June 13, 2024.

FINANCING ACTIVITY

In February 2024, CBL retired the $15.3 million recourse loan secured by Brookfield Square Anchor Redevelopment in Brookfield, WI.

CBL is cooperating with the foreclosure or conveyance of WestGate Mall in Spartanburg, SC, ($28.7 million) and Alamance Crossing East in Burlington, NC, ($41.1 million).

STOCK REPURCHASE PROGRAM ACTIVITY

On August 10, 2023, CBL announced that its Board of Directors authorized a stock repurchase program for the Company to buy up to $25.0 million of its common stock. Purchases may be made through the program by August 10, 2024. Since commencement, CBL has repurchased 452,910 shares at an average price of $22.54 per share under the program including 400,944 shares repurchased year-to-date at an average price of $22.70 per share.

DISPOSITIONS

During the first quarter, CBL completed the sale of two land parcels, generating more than $7.7 million in gross proceeds at CBL's share.

DEVELOPMENT AND REDEVELOPMENT ACTIVITY

Detailed project information is available in CBL’s Financial Supplement for Q1 2024, which can be found in the Invest – Financial Reports section of CBL’s website at cblproperties.com.

OUTLOOK AND GUIDANCE

Based on first quarter 2024 results, including any anticipated impact from the bankruptcy filings of Express and rue21, and Management's expectations for the remainder of 2024, CBL is reiterating the following guidance for FFO, as adjusted, and same-center NOI for full-year 2024. Per share amounts have been adjusted to reflect the impact of year-to-date share repurchase activity. Guidance excludes the impact of any unannounced transactions.

Low

High

2024 FFO, as adjusted (in millions)

$

196.0

$

210.0

2024 WA Share Count

31.4

31.4

2024 FFO, as adjusted, per share

$

6.24

$

6.69

2024 Same-Center NOI ("SC NOI") (in millions)

$

428.0

$

442.0

2024 change in same-center NOI

(1.9

)%

1.3

%

Reconciliation of GAAP Earnings Per Share to 2024 FFO, as Adjusted, Per Share:

Low

High

Expected diluted earnings per common share

$

0.18

$

0.63

Depreciation and amortization

4.78

4.78

Dividends allocable to unvested restricted stock

0.03

0.03

Less: Gain on depreciable property

(0.12

)

(0.12

)

Add: Loss on impairment

0.02

0.02

Debt discount accretion, net of noncontrolling interests' share

1.44

1.44

Adjustment for unconsolidated affiliates with negative investment

(0.09

)

(0.09

)

Expected FFO, as adjusted, per diluted, fully converted common share

$

6.24

$

6.69

2024 Estimate of Capital Items (in millions):

Low

High

2024 Estimated maintenance capital/tenant allowances

$

40.0

$

55.0

2024 Estimated development/redevelopment expenditures

10.0

15.0

2024 Estimated principal amortization (including est. term loan ECF)

70.0

80.0

Total Estimate

$

120.0

$

150.0

3


 

ABOUT CBL PROPERTIES

Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBL’s owned and managed portfolio is comprised of 94 properties totaling more than 58.5 million square feet across 22 states, including 56 high-quality enclosed malls, outlet centers and lifestyle retail centers as well as more than 30 open-air centers and other assets. CBL seeks to continuously strengthen its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. For more information visit cblproperties.com.

NON-GAAP FINANCIAL MEASURES

Funds From Operations

FFO is a widely used non-GAAP measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO as defined above by NAREIT. The Company’s method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors’ understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company’s properties and interest rates, but also by its capital structure.

The Company believes FFO allocable to Operating Partnership common unitholders is a useful performance measure since it conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership.

In the reconciliation of net income (loss) attributable to the Company’s common shareholders to FFO allocable to Operating Partnership common unitholders, located in this earnings release, the Company makes an adjustment to add back noncontrolling interest in income (loss) of its Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders.

FFO does not represent cash flows from operations as defined by GAAP, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company’s operating performance or to cash flow as a measure of liquidity.

The Company believes that it is important to identify the impact of certain significant items on its FFO measures for a reader to have a complete understanding of the Company’s results of operations. Therefore, the Company has also presented adjusted FFO measures excluding these items from the applicable periods. Please refer to the reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 7 of this news release for a description of these adjustments.

Same-center Net Operating Income

NOI is a supplemental non-GAAP measure of the operating performance of the Company’s shopping centers and other properties. The Company defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).

The Company computes NOI based on the Operating Partnership’s pro rata share of both consolidated and unconsolidated properties. The Company believes that presenting NOI and same-center NOI (described below) based on its Operating Partnership’s pro rata share of both consolidated and unconsolidated properties is useful since the Company conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's calculation of NOI may not be comparable to that of other companies.

Since NOI includes only those revenues and expenses related to the operations of the Company’s shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at the malls and operating costs and the impact of those trends on the Company’s results of operations. The Company’s calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-off of landlord inducement assets in order to enhance the comparability of results from one period to another. A reconciliation of same-center NOI to net income (loss) is located at the end of this earnings release.

4


 

Pro Rata Share of Debt

The Company presents debt based on the carrying value of its pro rata ownership share (including the carrying value of the Company’s pro rata share of unconsolidated affiliates and excluding noncontrolling interests’ share of consolidated properties) because it believes this provides investors a clearer understanding of the Company’s total debt obligations which affect the Company’s liquidity. A reconciliation of the Company’s pro rata share of debt to the amount of debt on the Company’s condensed consolidated balance sheet is located at the end of this earnings release.

Information included herein contains “forward-looking statements” within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. The reader is directed to the Company’s various filings with the Securities and Exchange Commission, including without limitation the Company’s Annual Report on Form 10-K, and the “Management's Discussion and Analysis of Financial Condition and Results of Operations” included therein, for a discussion of such risks and uncertainties.

5


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

Consolidated Statements of Operations

(Unaudited; in thousands, except per share amounts)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

REVENUES:

 

 

 

 

 

 

Rental revenues

 

$

124,027

 

 

$

130,324

 

Management, development and leasing fees

 

 

1,905

 

 

 

2,434

 

Other

 

 

3,185

 

 

 

3,601

 

Total revenues

 

 

129,117

 

 

 

136,359

 

EXPENSES:

 

 

 

 

 

 

Property operating

 

 

(23,827

)

 

 

(24,614

)

Depreciation and amortization

 

 

(38,040

)

 

 

(53,269

)

Real estate taxes

 

 

(9,269

)

 

 

(14,788

)

Maintenance and repairs

 

 

(9,938

)

 

 

(11,524

)

General and administrative

 

 

(20,414

)

 

 

(19,229

)

Loss on impairment

 

 

(836

)

 

 

 

Litigation settlement

 

 

68

 

 

 

44

 

Other

 

 

 

 

 

(198

)

Total expenses

 

 

(102,256

)

 

 

(123,578

)

OTHER INCOME (EXPENSES):

 

 

 

 

 

 

Interest and other income

 

 

4,004

 

 

 

2,665

 

Interest expense

 

 

(39,812

)

 

 

(43,524

)

Gain on deconsolidation

 

 

 

 

 

28,151

 

Gain on sales of real estate assets

 

 

3,721

 

 

 

1,596

 

Income tax benefit

 

 

158

 

 

 

101

 

Equity in earnings (losses) of unconsolidated affiliates

 

 

4,594

 

 

 

(1,256

)

Total other expenses

 

 

(27,335

)

 

 

(12,267

)

Net (loss) income

 

 

(474

)

 

 

514

 

Net loss (income) attributable to noncontrolling interests in:

 

 

 

 

 

 

Operating Partnership

 

 

 

 

 

 

Other consolidated subsidiaries

 

 

524

 

 

 

1,745

 

Net income attributable to the Company

 

 

50

 

 

 

2,259

 

Earnings allocable to unvested restricted stock

 

 

(259

)

 

 

(280

)

Net (loss) income attributable to common shareholders

 

$

(209

)

 

$

1,979

 

Basic and diluted per share data attributable to common shareholders:

 

 

 

 

 

 

Basic earnings per share

 

$

(0.01

)

 

$

0.06

 

Diluted earnings per share

 

 

(0.01

)

 

 

0.06

 

Weighted-average basic shares

 

 

31,546

 

 

 

31,304

 

Weighted-average diluted shares

 

 

31,546

 

 

 

31,369

 

 

6


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

The Company's reconciliation of net (loss) income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows:

(in thousands, except per share data)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Net (loss) income attributable to common shareholders

 

$

(209

)

 

$

1,979

 

Earnings allocable to unvested restricted stock

 

 

259

 

 

 

280

 

Depreciation and amortization expense of:

 

 

 

 

 

 

Consolidated properties

 

 

38,040

 

 

 

53,269

 

Unconsolidated affiliates

 

 

3,989

 

 

 

4,638

 

Non-real estate assets

 

 

(259

)

 

 

(148

)

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries

 

 

(560

)

 

 

(665

)

Loss on impairment, net of taxes

 

 

619

 

 

 

 

Gain on depreciable property

 

 

(3,721

)

 

 

 

FFO allocable to Operating Partnership common unitholders

 

 

38,158

 

 

 

59,353

 

Debt discount accretion, including our share of unconsolidated affiliates and net of noncontrolling interests' share (1)

 

 

11,795

 

 

 

16,616

 

Adjustment for unconsolidated affiliates with negative investment (2)

 

 

(2,568

)

 

 

1,591

 

Litigation settlement (3)

 

 

(68

)

 

 

(44

)

Non-cash default interest expense (4)

 

 

 

 

 

494

 

Gain on deconsolidation (5)

 

 

 

 

 

(28,151

)

FFO allocable to Operating Partnership common unitholders, as adjusted

 

$

47,317

 

 

$

49,859

 

FFO per diluted share

 

$

1.21

 

 

$

1.86

 

FFO, as adjusted, per diluted share

 

$

1.50

 

 

$

1.56

 

Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted

 

 

31,546

 

 

 

31,927

 

(1)
In conjunction with fresh start accounting upon emergence from bankruptcy, the Company recognized debt discounts equal to the difference between the outstanding balance of mortgage notes payable and the estimated fair value of such mortgage notes payable. The debt discounts are accreted as additional interest expense over the terms of the respective mortgage notes payable using the effective interest method.
(2)
Represents the Company’s share of the earnings (losses) before depreciation and amortization expense of unconsolidated affiliates where the Company is not recognizing equity in earnings (losses) because its investment in the unconsolidated affiliate is below zero.
(3)
Represents a credit to litigation settlement expense, in each respective period, related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit.
(4)
The three months ended March 31, 2023 includes default interest on loans past their maturity dates.
(5)
For the three months ended March 31, 2023, the Company deconsolidated Alamance Crossing East due to a loss of control when the property was placed into receivership in connection with the foreclosure process.

 

7


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Diluted EPS attributable to common shareholders

 

$

(0.01

)

 

$

0.06

 

Add amounts per share included in FFO:

 

 

 

 

 

 

Unvested restricted stock

 

 

0.01

 

 

 

0.01

 

Eliminate amounts per share excluded from FFO:

 

 

 

 

 

 

Depreciation and amortization expense, including amounts from
   consolidated properties, unconsolidated affiliates, non-real estate
   assets and excluding amounts allocated to noncontrolling
   interests

 

 

1.31

 

 

 

1.79

 

Loss on impairment, net of taxes

 

 

0.02

 

 

 

 

Gain on depreciable property

 

 

(0.12

)

 

 

 

FFO per diluted share

 

$

1.21

 

 

$

1.86

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

SUPPLEMENTAL FFO INFORMATION:

 

 

 

 

 

 

Lease termination fees

 

$

983

 

 

$

1,161

 

 

 

 

 

 

 

 

Straight-line rental income adjustment

 

$

(515

)

 

$

1,633

 

 

 

 

 

 

 

 

Gain on outparcel sales

 

$

 

 

$

1,580

 

 

 

 

 

 

 

 

Net amortization of acquired above- and below-market leases

 

$

(3,492

)

 

$

(5,322

)

 

 

 

 

 

 

 

Income tax benefit

 

$

158

 

 

$

101

 

 

 

 

 

 

 

 

Abandoned projects expense

 

$

 

 

$

(17

)

 

 

 

 

 

 

 

Interest capitalized

 

$

134

 

 

$

106

 

 

 

 

 

 

 

 

Estimate of uncollectable revenues

 

$

(6,192

)

 

$

363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31,

 

 

 

2024

 

 

2023

 

Straight-line rent receivable

 

$

22,537

 

 

$

17,095

 

 

 

 

8


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

Same-center Net Operating Income

(Dollars in thousands)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Net (loss) income

 

$

(474

)

 

$

514

 

Adjustments:

 

 

 

 

 

 

Depreciation and amortization

 

 

38,040

 

 

 

53,269

 

Depreciation and amortization from unconsolidated affiliates

 

 

3,989

 

 

 

4,638

 

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries

 

 

(560

)

 

 

(665

)

Interest expense

 

 

39,812

 

 

 

43,524

 

Interest expense from unconsolidated affiliates

 

 

17,281

 

 

 

17,525

 

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

 

 

(1,065

)

 

 

(2,043

)

Abandoned projects expense

 

 

 

 

 

17

 

Gain on sales of real estate assets

 

 

(3,721

)

 

 

(1,596

)

Loss on sales of real estate assets of unconsolidated affiliates

 

 

 

 

 

16

 

Adjustment for unconsolidated affiliates with negative investment

 

 

(2,568

)

 

 

1,591

 

Gain on deconsolidation

 

 

 

 

 

(28,151

)

Loss on impairment

 

 

836

 

 

 

 

Litigation settlement

 

 

(68

)

 

 

(44

)

Income tax benefit

 

 

(158

)

 

 

(101

)

Lease termination fees

 

 

(983

)

 

 

(1,161

)

Straight-line rent and above- and below-market lease amortization

 

 

4,007

 

 

 

3,689

 

Net loss attributable to noncontrolling interests in other consolidated subsidiaries

 

 

524

 

 

 

1,745

 

General and administrative expenses

 

 

20,414

 

 

 

19,229

 

Management fees and non-property level revenues

 

 

(6,447

)

 

 

(4,980

)

Operating Partnership's share of property NOI

 

 

108,859

 

 

 

107,016

 

Non-comparable NOI

 

 

(47

)

 

 

(2,005

)

Total same-center NOI (1)

 

$

108,812

 

 

$

105,011

 

Total same-center NOI percentage change

 

 

3.6

%

 

 

 

(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). NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of March 31, 2024, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ending March 31, 2024. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are properties which are under major redevelopment or being considered for repositioning, where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender.

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Malls

 

$

74,187

 

 

$

71,810

 

Outlet centers

 

 

5,620

 

 

 

5,114

 

Lifestyle centers

 

 

9,184

 

 

 

8,967

 

Open-air centers

 

 

14,694

 

 

 

13,918

 

Outparcels and other

 

 

5,127

 

 

 

5,202

 

Total same-center NOI

 

$

108,812

 

 

$

105,011

 

Percentage Change:

 

 

 

 

 

 

Malls

 

 

3.3

%

 

 

 

Outlet centers

 

 

9.9

%

 

 

 

Lifestyle centers

 

 

2.4

%

 

 

 

Open-air centers

 

 

5.6

%

 

 

 

Outparcels and other

 

 

(1.4

)%

 

 

 

Total same-center NOI

 

 

3.6

%

 

 

 

 

9


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

Company's Share of Consolidated and Unconsolidated Debt

(Dollars in thousands)

 

 

As of March 31, 2024

 

 

 

Fixed Rate

 

 

Variable
Rate

 

 

Total Debt

 

 

Unamortized
Deferred
Financing
Costs

 

 

Unamortized
Debt
Discounts
(1)

 

 

Total, net

 

Consolidated debt

 

$

906,438

 

 

$

1,003,255

 

 

$

1,909,693

 

 

$

(12,086

)

 

$

(37,313

)

 

$

1,860,294

 

Noncontrolling interests' share of consolidated debt

 

 

(24,919

)

 

 

(11,718

)

 

 

(36,637

)

 

 

224

 

 

 

3,229

 

 

 

(33,184

)

Company's share of unconsolidated affiliates' debt

 

 

618,640

 

 

 

56,619

 

 

 

675,259

 

 

 

(2,890

)

 

 

 

 

 

672,369

 

Other debt (2)

 

 

69,783

 

 

 

 

 

 

69,783

 

 

 

 

 

 

 

 

 

69,783

 

Company's share of consolidated, unconsolidated and other debt

 

$

1,569,942

 

 

$

1,048,156

 

 

$

2,618,098

 

 

$

(14,752

)

 

$

(34,084

)

 

$

2,569,262

 

Weighted-average interest rate

 

 

5.26

%

 

 

8.42

%

 

 

6.53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2023

 

 

 

Fixed Rate

 

 

Variable
Rate

 

 

Total Debt

 

 

Unamortized
Deferred
Financing
Costs

 

 

Unamortized
Debt
Discounts
(1)

 

 

Total, net

 

Consolidated debt

 

$

972,999

 

 

$

1,052,704

 

 

$

2,025,703

 

 

$

(15,903

)

 

$

(63,371

)

 

$

1,946,429

 

Noncontrolling interests' share of consolidated debt

 

 

(25,320

)

 

 

(13,282

)

 

 

(38,602

)

 

 

294

 

 

 

6,051

 

 

 

(32,257

)

Company's share of unconsolidated affiliates' debt

 

 

614,947

 

 

 

70,847

 

 

 

685,794

 

 

 

(2,916

)

 

 

 

 

 

682,878

 

Other debt (2)

 

 

41,122

 

 

 

 

 

 

41,122

 

 

 

 

 

 

 

 

 

41,122

 

Company's share of consolidated, unconsolidated and other debt

 

$

1,603,748

 

 

$

1,110,269

 

 

$

2,714,017

 

 

$

(18,525

)

 

$

(57,320

)

 

$

2,638,172

 

Weighted-average interest rate

 

 

4.83

%

 

 

7.66

%

 

 

5.99

%

 

 

 

 

 

 

 

 

 

(1)
In conjunction with fresh start accounting upon emergence from bankruptcy, the Company recognized debt discounts equal to the difference between the outstanding balance of mortgage notes payable and the estimated fair value of such mortgage notes payable. The debt discounts are accreted as additional interest expense over the terms of the respective mortgage notes payable using the effective interest method.
(2)
Represents the outstanding loan balance for properties that were deconsolidated due to a loss of control when the properties were placed into receivership in connection with the foreclosure process.

10


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

Consolidated Balance Sheets

(Unaudited; in thousands, except share data)

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

ASSETS

 

 

 

 

 

 

Real estate assets:

 

 

 

 

 

 

Land

 

$

582,949

 

 

$

585,191

 

Buildings and improvements

 

 

1,218,746

 

 

 

1,216,054

 

 

 

1,801,695

 

 

 

1,801,245

 

Accumulated depreciation

 

 

(247,387

)

 

 

(228,034

)

 

 

1,554,308

 

 

 

1,573,211

 

Developments in progress

 

 

7,479

 

 

 

8,900

 

Net investment in real estate assets

 

 

1,561,787

 

 

 

1,582,111

 

Cash and cash equivalents

 

 

60,311

 

 

 

34,188

 

Restricted cash

 

 

66,946

 

 

 

88,888

 

Available-for-sale securities - at fair value (amortized cost of $235,072 and $261,869 as of March 31, 2024 and December 31, 2023, respectively)

 

 

234,998

 

 

 

262,142

 

Receivables:

 

 

 

 

 

 

Tenant

 

 

37,588

 

 

 

43,436

 

Other

 

 

7,246

 

 

 

2,752

 

Investments in unconsolidated affiliates

 

 

77,818

 

 

 

76,458

 

In-place leases, net

 

 

142,683

 

 

 

157,639

 

Intangible lease assets and other assets

 

 

154,439

 

 

 

158,291

 

 

$

2,343,816

 

 

$

2,405,905

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Mortgage and other indebtedness, net

 

$

1,860,294

 

 

$

1,888,803

 

Accounts payable and accrued liabilities

 

 

168,672

 

 

 

186,485

 

Total liabilities

 

 

2,028,966

 

 

 

2,075,288

 

Shareholders' equity:

 

 

 

 

 

 

Common stock, $.001 par value, 200,000,000 shares authorized, 32,033,939 and 31,975,645 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively (excluding 140,034 treasury shares as of March 31, 2024 and excluding 34 treasury shares as of December 31, 2023)

 

 

32

 

 

 

32

 

Additional paid-in capital

 

 

716,706

 

 

 

719,125

 

Accumulated other comprehensive income

 

 

726

 

 

 

610

 

Accumulated deficit

 

 

(393,266

)

 

 

(380,446

)

Total shareholders' equity

 

 

324,198

 

 

 

339,321

 

Noncontrolling interests

 

 

(9,348

)

 

 

(8,704

)

Total equity

 

 

314,850

 

 

 

330,617

 

 

 

$

2,343,816

 

 

$

2,405,905

 

 

11


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

Condensed Combined Financial Statements - Unconsolidated Affiliates

(Unaudited; in thousands)

 

 

March 31,
2024

 

 

December 31,
2023

 

ASSETS:

 

 

 

 

 

 

Investment in real estate assets

 

$

2,013,008

 

 

$

2,010,269

 

Accumulated depreciation

 

 

(901,569

)

 

 

(886,712

)

 

 

 

1,111,439

 

 

 

1,123,557

 

Developments in progress

 

 

19,305

 

 

 

17,261

 

Net investment in real estate assets

 

 

1,130,744

 

 

 

1,140,818

 

Other assets

 

 

198,788

 

 

 

200,289

 

Total assets

 

$

1,329,532

 

 

$

1,341,107

 

LIABILITIES:

 

 

 

 

 

 

Mortgage and other indebtedness, net

 

$

1,359,302

 

 

$

1,368,031

 

Other liabilities

 

 

42,477

 

 

 

45,577

 

Total liabilities

 

 

1,401,779

 

 

 

1,413,608

 

OWNERS' EQUITY (DEFICIT):

 

 

 

 

 

 

The Company

 

 

12,083

 

 

 

12,290

 

Other investors

 

 

(84,330

)

 

 

(84,791

)

Total owners' deficit

 

 

(72,247

)

 

 

(72,501

)

Total liabilities and owners’ deficit

 

$

1,329,532

 

 

$

1,341,107

 

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Total revenues

 

$

63,997

 

 

$

60,533

 

Depreciation and amortization

 

 

(18,399

)

 

 

(16,863

)

Operating expenses

 

 

(21,488

)

 

 

(19,729

)

Interest and other income

 

 

612

 

 

 

544

 

Interest expense

 

 

(18,458

)

 

 

(15,272

)

Loss on sales of real estate assets

 

 

 

 

 

(32

)

Net income

 

$

6,264

 

 

$

9,181

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company's Share for the Period

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Total revenues

 

$

33,708

 

 

$

32,571

 

Depreciation and amortization

 

 

(10,802

)

 

 

(12,100

)

Operating expenses

 

 

(10,774

)

 

 

(10,447

)

Interest and other income

 

 

361

 

 

 

390

 

Interest expense

 

 

(17,281

)

 

 

(17,525

)

Negative investment adjustment

 

 

9,382

 

 

 

5,871

 

Loss on sales of real estate assets

 

 

 

 

 

(16

)

Net income (loss)

 

$

4,594

 

 

$

(1,256

)

 

12


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

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, abandoned projects expense, adjustments related to unconsolidated affiliates and litigation settlement.

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 (loss), 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 March 31,

 

 

 

2024

 

 

2023

 

Net (loss) income

 

$

(474

)

 

$

514

 

Depreciation and amortization

 

 

38,040

 

 

 

53,269

 

Depreciation and amortization from unconsolidated affiliates

 

 

3,989

 

 

 

4,638

 

Interest expense

 

 

39,812

 

 

 

43,524

 

Interest expense from unconsolidated affiliates

 

 

17,281

 

 

 

17,525

 

Income taxes

 

 

(158

)

 

 

(55

)

Loss on impairment

 

 

836

 

 

 

 

Gain on depreciable property

 

 

(3,721

)

 

 

 

Gain on deconsolidation

 

 

 

 

 

(28,151

)

EBITDAre (1)

 

 

95,605

 

 

 

91,264

 

Litigation settlement

 

 

(68

)

 

 

(44

)

Abandoned projects expense

 

 

 

 

 

17

 

Adjustment for unconsolidated affiliates with negative investment

 

 

(2,568

)

 

 

1,591

 

Net loss attributable to noncontrolling interests in other consolidated subsidiaries

 

 

524

 

 

 

1,745

 

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries

 

 

(560

)

 

 

(665

)

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

 

 

(1,065

)

 

 

(2,043

)

Company's share of Adjusted EBITDAre

 

$

91,868

 

 

$

91,865

 

(1)
Includes $1,580 for the three months ended March 31, 2023 related to sales of non-depreciable real estate assets.

13


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Interest Expense:

 

 

 

 

 

 

Interest expense

 

$

39,812

 

 

$

43,524

 

Interest expense from unconsolidated affiliates

 

 

17,281

 

 

 

17,525

 

Debt discount accretion, net of noncontrolling interests' share

 

 

(11,795

)

 

 

(16,616

)

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

 

 

(588

)

 

 

(647

)

Company's share of interest expense

 

$

44,710

 

 

$

43,786

 

Ratio of Adjusted EBITDAre to Interest Expense

 

 

2.1

x

 

 

2.1

x

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Company's share of Adjusted EBITDAre

 

$

91,868

 

 

$

91,865

 

Interest expense

 

 

(39,812

)

 

 

(43,524

)

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

 

 

1,065

 

 

 

2,043

 

Income taxes

 

 

158

 

 

 

55

 

Net amortization of deferred financing costs, discounts on available-for-sale securities and debt discounts

 

 

2,459

 

 

 

7,852

 

Net amortization of intangible lease assets and liabilities

 

 

3,449

 

 

 

5,337

 

Depreciation and interest expense from unconsolidated affiliates

 

 

(21,270

)

 

 

(22,163

)

Adjustment for unconsolidated affiliates with negative investment

 

 

2,568

 

 

 

(1,591

)

Litigation settlement

 

 

68

 

 

 

44

 

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries

 

 

560

 

 

 

665

 

Net loss attributable to noncontrolling interests in other consolidated subsidiaries

 

 

(524

)

 

 

(1,745

)

Gain on outparcel sales

 

 

 

 

 

(1,596

)

Equity in (earnings) losses of unconsolidated affiliates

 

 

(4,594

)

 

 

1,256

 

Distributions of earnings from unconsolidated affiliates

 

 

3,692

 

 

 

3,335

 

Share-based compensation expense

 

 

3,679

 

 

 

3,252

 

Change in estimate of uncollectable revenues

 

 

1,522

 

 

 

(138

)

Change in deferred tax assets

 

 

1,331

 

 

 

225

 

Changes in operating assets and liabilities

 

 

(15,481

)

 

 

(11,997

)

Cash flows provided by operating activities

 

$

30,738

 

 

$

33,175

 

Components of Consolidated Rental Revenues

The Company believes the following summary is useful to users of its consolidated financial statements because it provides more detail regarding the components of rental revenues in the consolidated financial statements and trends in these components for the periods shown.

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Minimum rents

 

$

93,908

 

 

$

95,463

 

Percentage rents

 

 

2,790

 

 

 

3,164

 

Other rents

 

 

1,832

 

 

 

1,696

 

Tenant reimbursements

 

 

26,879

 

 

 

29,518

 

Estimate of uncollectable amounts

 

 

(1,382

)

 

 

483

 

Total rental revenues

 

$

124,027

 

 

$

130,324

 

 

14


 

CBL & Associates Properties, Inc.

Supplemental Financial and Operating Information

Schedule of Mortgage and Other Indebtedness

(Dollars in thousands)

Property

 

Location

 

Original
Maturity
Date

 

Optional
Extended
Maturity
Date

 

Interest
Rate

 

 

Balance as of March 31, 2024 (1)

 

 

Balance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed

 

 

Variable

 

Operating Properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fayette Mall (2)

 

Lexington, KY

 

May-24

 

May-26

 

 

4.25

%

 

$

117,181

 

 

$

117,181

 

 

$

 

Cross Creek Mall

 

Fayetteville, NC

 

Jun-25

 

 

 

 

8.19

%

 

 

90,732

 

 

 

90,732

 

 

 

 

The Outlet Shoppes at Laredo

 

Laredo, TX

 

Jun-25

 

 

 

 

8.83

%

 

 

33,480

 

 

 

 

 

 

33,480

 

The Outlet Shoppes at Gettysburg

 

Gettysburg, PA

 

Oct-25

 

 

 

 

4.80

%

 

 

20,563

 

 

 

20,563

 

 

 

 

Parkdale Mall & Crossing

 

Beaumont, TX

 

Mar-26

 

 

 

 

5.85

%

 

 

56,978

 

 

 

56,978

 

 

 

 

Northwoods Mall

 

North Charleston, SC

 

Apr-26

 

 

 

 

5.08

%

 

 

53,223

 

 

 

53,223

 

 

 

 

Arbor Place

 

Atlanta (Douglasville), GA

 

May-26

 

 

 

 

5.10

%

 

 

92,462

 

 

 

92,462

 

 

 

 

Volusia Mall

 

Daytona Beach, FL

 

May-26

 

 

 

 

4.56

%

 

 

35,957

 

 

 

35,957

 

 

 

 

Hamilton Place

 

Chattanooga, TN

 

Jun-26

 

 

 

 

4.36

%

 

 

91,046

 

 

 

91,046

 

 

 

 

Jefferson Mall

 

Louisville, KY

 

Jun-26

 

 

 

 

4.75

%

 

 

52,965

 

 

 

52,965

 

 

 

 

Southpark Mall

 

Colonial Heights, VA

 

Jun-26

 

 

 

 

4.85

%

 

 

51,151

 

 

 

51,151

 

 

 

 

Open-air centers and outparcels loan (3)