CBL & Associates Properties Reports Results for First Quarter 2017
Wednesday, May 03, 2017 4:15:40 PM ET CBL & Associates Properties, Inc. (CBL ) announced results for the
first quarter ended March 31, 2017. 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,
----------------------------------------------------------------------
2017 2016 %
------------ ------------ ------------
Net income attributable to common shareholders per diluted share $ 0.13 $ 0.17 (23.5 )%
===== ===== ===== ===== ===== =====
Funds from Operations ("FFO") per diluted share $ 0.53 $ 0.68 (22.1 )%
===== ===== ===== ===== ===== =====
FFO, as adjusted, per diluted share (1) $ 0.52 $ 0.56 (7.1 )%
===== ===== ===== ===== ===== =====
(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 attributable to common
shareholders to FFO allocable to Operating Partnership common
unitholders on page 12 of this earnings release.
HIGHLIGHTS:
--
Entered into binding contract for the sale of two malls and completed
the sale of an outlet center and two office buildings year-to-date.
The transactions are expected to generate aggregate equity proceeds of
nearly $100 million, at CBL’s share.
--
FFO per diluted share, as adjusted, was $0.52 for the first quarter
2017, compared with FFO, as adjusted, of $0.56 per share for the first
quarter 2016. First quarter 2017 was impacted by approximately $0.05
per share of dilution from asset sales.
--
Total Portfolio Same-center NOI for the first quarter 2017 declined
1.0%.
--
Portfolio occupancy increased 50 bps to 92.1% and same-center mall
occupancy declined 100 basis points to 90.5% as of March 31, 2017
compared with 91.5% as of March 31, 2016.
--
Stabilized Mall leases were signed at an average increase of 2% over
the expiring gross rent per square foot, including a 18% increase in
average gross rents for more than 130,000 square feet of new leases
executed in the quarter.
CBL’s President and Chief Executive Officer Stephen Lebovitz commented,
"Our malls are evolving into suburban town centers as we add more
dining, entertainment, value and off-price, health and wellness, service
and non-retail uses to adapt to the changing retail landscape. We faced
a challenging retail environment in the first quarter, which impacted
our NOI results. However, leasing demand remains strong, and we are
making major progress on our anchor redevelopment program.
"We are improving our balance sheet through additional dispositions
including the sale of The Outlet Shoppes at Oklahoma City and two office
buildings as well as a binding contract for the sale of two malls. These
transactions will generate equity proceeds of nearly $100 million,
contributing to further reductions in debt. Coupled with our significant
free cash flow, this will create additional liquidity to fund
redevelopment activity."
Net income attributable to common shareholders for the first quarter
2017 was $22.9 million, or $0.13 per diluted share, compared with net
income of $28.9 million, or $0.17 per diluted share, for the first
quarter 2016.
FFO allocable to common shareholders, as adjusted, for the first quarter
2017 was $88.4 million, or $0.52 per diluted share, compared with $95.0
million, or $0.56 per diluted share, for the first quarter 2016. FFO
allocable to the Operating Partnership common unitholders, as adjusted,
for the first quarter 2017 was $103.0 million compared with $111.2
million for the first quarter 2016.
Percentage change in same-center Net Operating Income ("NOI")(1):
Three Months
Ended
March 31, 2017
--------------
Portfolio same-center NOI (1.0 )%
Mall same-center NOI (1.6 )%
(1) CBL’s definition of same-center NOI excludes the
impact of lease termination fees and certain non-cash items of
straight-line rents, write-offs of landlord inducements and net
amortization of acquired above and below market leases.
Major variances impacting same-center NOI for the quarter ended
March 31, 2017 include:
--
NOI declined $1.8 million, due to a $2.6 million decrease in revenue,
partially offset by a $0.8 million decrease in operating expense.
--
Minimum rents increased $1.4 million during the quarter as a result of
rent growth over the prior year.
--
Percentage rents decreased $2.0 million as sales declined in the first
quarter.
--
Tenant reimbursements and other rents declined $2.0 million.
--
Property operating expense declined $0.5 million, maintenance and
repair expense declined $1.7 million, and real estate tax expense
increased $1.4 million.
PORTFOLIO OPERATIONAL RESULTS
Occupancy:
As of March 31,
---------------------------------------------------
2017 2016
--------------- ---------------
Portfolio occupancy 92.1 % 91.6 %
Mall portfolio 90.5 % 90.9 %
Same-center malls 90.5 % 91.5 %
Stabilized malls 90.5 % 90.9 %
Non-stabilized malls (1) 92.7 % 91.4 %
Associated centers 97.7 % 91.5 %
Community centers 98.2 % 96.0 %
(1) Represents occupancy for The Outlet Shoppes of the
Bluegrass as of March 31, 2017 and The Outlet Shoppes of Atlanta
and The Outlet Shoppes of the Bluegrass as of March 31, 2016.
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, 2017
------------------
Stabilized Malls 1.8%
New leases 17.9%
Renewal leases (3.4)%
Same-Center Sales Per Square Foot for Mall Tenants 10,000 Square
Feet or Less:
Twelve Months Ended March 31,
-----------------------------------------------
2017 2016 % Change
------------- ------------- --------------------
Stabilized mall same-center sales per square foot $ 372 $ 382 (2.6)%
Stabilized mall sales per square foot $ 372 $ 378 (1.6)%
DISPOSITIONS
CBL has entered into a binding contract for the sale of two malls,
College Square in Morristown, TN (2016 sales psf $265) and Foothills
Mall in Maryville, TN (2016 sales psf $283), for a total gross sales
price of $53.5 million. The buyer has posted a significant nonrefundable
deposit. The transaction is expected to close in May.
During the first quarter 2017, CBL closed on the sale of two office
buildings located in Newport News, VA, generating gross proceeds of
$6.25 million.
On April 28, 2017, CBL closed on the sale of The Outlet Shoppes at
Oklahoma City in Oklahoma City, OK for a gross sales price of $130.0
million. Approximately $70.1 million, including defeasance costs, in
loans secured by the property were retired concurrent with the closing.
CBL’s share of net equity proceeds, after retirement of secured loans
and closing costs, was $38.0 million. Net proceeds were used to reduce
outstanding balances on the Company’s lines of credit. CBL anticipates
recording a gain on sale of approximately $44.0 million in second
quarter 2017 results related to the sale.
FINANCING ACTIVITY
During the quarter, CBL retired four loans totaling $158.3 million (at
CBL’s share) and added the properties to its unencumbered pool of
assets. The loans were secured by Layton Hills Mall in Layton, UT, The
Plaza at Fayette in Lexington, KY, The Shoppes at St. Clair Square in
Fairview Heights, IL and Hamilton Corner in Chattanooga, TN.
During the quarter the foreclosure of Midland Mall in Midland, MI, was
completed. CBL recorded a gain on extinguishment of debt of $4.1 million
related to the foreclosure.
In April, the $125 million loan secured by Acadiana Mall in Lafayette,
LA, matured. CBL is currently in discussions with the lender to
restructure and extend the loan maturity.
OUTLOOK AND GUIDANCE
CBL is updating its 2017 FFO, as adjusted, guidance to reflect first
quarter results, dilution from announced disposition activity
(approximately $0.04 per share) and its current outlook. CBL anticipates
FFO, as adjusted, in the range of $2.18 - $2.24 per diluted share. This
FFO assumes same-center NOI growth in the range of (2.0)% - 0% in 2017,
which includes an additional estimated income loss of $10.0 - 14.0
million from store closure and bankruptcy activity for the remainder of
2017.
The guidance also assumes the following:
--
$10.0 million to $12.0 million in gains on outparcel sales;
--
75 to 125 basis points lower total portfolio occupancy as well as
stabilized mall occupancy at year-end;
--
G&A expense of $62 million to $64 million for the full year; and
--
No unannounced capital markets activity.
Low High
----------------------------- -----------------------------
Expected diluted earnings per common share $ 0.62 $ 0.68
Adjust to fully converted shares from common shares (0.08 ) (0.09 )
---------------------------- ----------------------------
Expected earnings per diluted, fully converted common share 0.54 0.59
Add: depreciation and amortization 1.56 1.56
Add: Loss on impairment 0.01 0.01
Add: noncontrolling interest in earnings of Operating Partnership 0.09 0.10
---------------------------- ----------------------------
Expected FFO per diluted, fully converted common share 2.20 2.26
Adjustment for certain significant items (0.02 ) (0.02 )
------ -------------------- ------ --------------------
Expected adjusted FFO per diluted, fully converted common share $ 2.18 $ 2.24
== ==== ==================== == ==== ====================
INVESTOR CONFERENCE CALL AND WEBCAST
CBL & Associates Properties, Inc. will conduct a conference call on
Thursday, May 4, 2017, at 11:00 a.m. ET. To access this interactive
teleconference, dial (888) 317-6003 or (412) 317-6061 and enter the
confirmation number, 2235998. A replay of the conference call will be
available through May 11, 2017, by dialing (877) 344-7529 or
(412) 317-0088 and entering the confirmation number, 10102428. A
transcript of the Company’s prepared remarks will be furnished on a Form
8-K following the conference call.
To receive the CBL & Associates Properties, Inc. first quarter earnings
release and supplemental information, please visit the Investing section
of our website at cblproperties.com
or contact Investor Relations at (423) 490-8312.
The Company will also provide an online webcast and rebroadcast of its
2017 first quarter earnings release conference call. The live broadcast
of the quarterly conference call will be available online at cblproperties.com
on Thursday, May 4, 2017 beginning at 11:00 a.m. ET. The online replay
will follow shortly after the call.
ABOUT CBL & ASSOCIATES PROPERTIES, INC.
Headquartered in Chattanooga, TN, CBL is one of the largest and most
active owners and developers of malls and shopping centers in the United
States. CBL owns, holds interests in or manages 125 properties,
including 82 regional malls/open-air centers. The properties are located
in 27 states and total 77.4 million square feet including 5.9 million
square feet of non-owned shopping centers managed for third parties.
Additional information can be found at 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 assets declines predictably over time. Since values of
well-maintained real estate assets have historically risen with market
conditions, the Company believes that FFO enhances investors’
understanding of its operating performance. The use of FFO as an
indicator of financial performance is influenced not only by the
operations of the Company’s properties and interest rates, but also by
its capital structure.
The Company presents both FFO allocable to Operating Partnership common
unitholders and FFO allocable to common shareholders, as it believes
that both are useful performance measures. The Company believes FFO
allocable to Operating Partnership common unitholders is a useful
performance measure since it conducts substantially all of its business
through its Operating Partnership and, therefore, it reflects the
performance of the properties in absolute terms regardless of the ratio
of ownership interests of the Company’s common shareholders and the
noncontrolling interest in the Operating Partnership. The Company
believes FFO allocable to its common shareholders is a useful
performance measure because it is the performance measure that is most
directly comparable to net income (loss) attributable to its common
shareholders.
In the reconciliation of net income (loss) attributable to the Company’s
common shareholders to FFO allocable to Operating Partnership common
unitholders, located in this earnings release, the Company makes an
adjustment to add back noncontrolling interest in income (loss) of its
Operating Partnership in order to arrive at FFO of the Operating
Partnership common unitholders. The Company then applies a percentage to
FFO of the Operating Partnership common unitholders to arrive at FFO
allocable to its common shareholders. The percentage is computed by
taking the weighted-average number of common shares outstanding for the
period and dividing it by the sum of the weighted-average number of
common shares and the weighted-average number of Operating Partnership
units held by noncontrolling interests during the period.
FFO does not represent cash flows from operations as defined by GAAP, is
not necessarily indicative of cash available to fund all cash flow needs
and should not be considered as an alternative to net income (loss) for
purposes of evaluating the Company’s operating performance or to cash
flow as a measure of liquidity.
The Company believes that it is important to identify the impact of
certain significant items on its FFO measures for a reader to have a
complete understanding of the Company’s results of operations.
Therefore, the Company has also presented adjusted FFO measures
excluding these items from the applicable periods. Please refer to the
reconciliation of net income (loss) attributable to common shareholders
to FFO allocable to Operating Partnership common unitholders on page 9
of this earnings release for a description of these adjustments.
Same-center Net Operating Income
NOI is a supplemental non-GAAP measure of the operating performance of
the Company’s shopping centers and other properties. The Company defines
NOI as property operating revenues (rental revenues, tenant
reimbursements and other income) less property operating expenses
(property operating, real estate taxes and maintenance and repairs).
The Company computes NOI based on the Operating Partnership’s pro rata
share of both consolidated and unconsolidated properties. The Company
believes that presenting NOI and same-center NOI (described below) based
on its Operating Partnership’s pro rata share of both consolidated and
unconsolidated properties is useful since the Company conducts
substantially all of its business through its Operating Partnership and,
therefore, it reflects the performance of the properties in absolute
terms regardless of the ratio of ownership interests of the Company’s
common shareholders and the noncontrolling interest in the Operating
Partnership. The Company’s definition of NOI may be different than that
used by other companies and, accordingly, the Company’s calculation of
NOI may not be comparable to that of other companies.
Since NOI includes only those revenues and expenses related to the
operations of the Company’s shopping center properties, the Company
believes that same-center NOI provides a measure that reflects trends in
occupancy rates, rental rates, sales at the malls and operating costs
and the impact of those trends on the Company’s results of operations.
The Company’s calculation of same-center NOI excludes lease termination
income, straight-line rent adjustments, amortization of above and below
market lease intangibles and write-off of landlord inducement assets in
order to enhance the comparability of results from one period to
another. A reconciliation of same-center NOI to net income is located at
the end of this earnings release.
Pro Rata Share of Debt
The Company presents debt based on its pro rata ownership share
(including the Company’s pro rata share of unconsolidated affiliates and
excluding noncontrolling interests’ share of consolidated properties)
because it believes this provides investors a clearer understanding of
the Company’s total debt obligations which affect the Company’s
liquidity. A reconciliation of the Company’s pro rata share of debt to
the amount of debt on the Company’s condensed consolidated balance sheet
is located at the end of this earnings release.
Information included herein contains "forward-looking statements"
within the meaning of the federal securities laws. Such
statements are inherently subject to risks and uncertainties, many of
which cannot be predicted with accuracy and some of which might not even
be anticipated. Future events and actual events, financial and
otherwise, may differ materially from the events and results discussed
in the forward-looking statements. The reader is directed to the
Company’s various filings with the Securities and Exchange Commission,
including without limitation the Company’s Annual Report on Form 10-K,
and the "Management’s Discussion and Analysis of Financial Condition and
Results of Operations" included therein, for a discussion of such risks
and uncertainties.
CBL & Associates Properties, Inc.
Consolidated
Statements of Operations
(Unaudited; in thousands, except
per share amounts)
Three Months Ended
March 31,
------------------------------------------------------------------------------------------------------------
2017 2016
------------------------------------- -------------------------------------
REVENUES:
Minimum rents $ 159,750 $ 170,629
Percentage rents 2,389 4,673
Other rents 3,652 5,062
Tenant reimbursements 67,291 73,366
Management, development and leasing fees 3,452 2,581
Other 1,479 6,767
------------------------------------ ------------------------------------
Total revenues 238,013 263,078
------------------------------------ ------------------------------------
OPERATING EXPENSES:
Property operating 34,914 38,628
Depreciation and amortization 71,220 76,506
Real estate taxes 22,083 23,028
Maintenance and repairs 13,352 14,548
General and administrative 16,082 17,168
Loss on impairment 3,263 19,685
Other -- 9,685
------------------------------------ ------------------------------------
Total operating expenses 160,914 199,248
------------------------------------ ------------------------------------
Income from operations 77,099 63,830
Interest and other income 1,404 360
Interest expense (56,201 ) (55,231 )
Gain on extinguishment of debt 4,055 6
Equity in earnings of unconsolidated affiliates 5,373 32,390
Income tax benefit 800 537
------------------------------------ ------------------------------------
Income from continuing operations before gain on sales of real 32,530 41,892
estate assets
Gain on sales of real estate assets 5,988 --
------------------------------------ ------------------------------------
Net income 38,518 41,892
Net (income) loss attributable to noncontrolling interests in:
Operating Partnership (3,690 ) (4,945 )
Other consolidated subsidiaries (713 ) 3,127
------------------------------------ ------------------------------------
Net income attributable to the Company 34,115 40,074
Preferred dividends (11,223 ) (11,223 )
------------------------------------ ------------------------------------
Net income attributable to common shareholders $ 22,892 $ 28,851
======= ======= ==================== ======= ======= ====================
Basic and diluted per share data attributable to common
shareholders:
Net income attributable to common shareholders $ 0.13 $ 0.17
Weighted-average common and potential dilutive common shares 170,989 170,669
outstanding
Dividends declared per common share $ 0.265 $ 0.265
The Company’s reconciliation of net 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,
--------------------------------------------------------------------------------------------
2017 2016
--------------------------------------- ---------------------------------------
Net income attributable to common shareholders $ 22,892 $ 28,851
Noncontrolling interest in income of Operating Partnership 3,690 4,945
Depreciation and amortization expense of:
Consolidated properties 71,220 76,506
Unconsolidated affiliates 9,543 9,178
Non-real estate assets (864 ) (837 )
Noncontrolling interests’ share of depreciation and amortization (1,979 ) (2,393 )
Loss on impairment, net of tax 2,067 19,685
Loss on depreciable property 41 --
-------------------------------------- --------------------------------------
FFO allocable to Operating Partnership common unitholders 106,610 135,935
Litigation expenses (1) 43 1,707
Nonrecurring professional feesreimbursement (1) (925 ) --
Equity in earnings from disposals of unconsolidated affiliates (2) -- (26,395 )
Non-cash default interest expense 1,307 --
Gain on extinguishment of debt (3) (4,055 ) --
-------------------------------------- --------------------------------------
FFO allocable to Operating Partnership common unitholders, as $ 102,980 $ 111,247
adjusted
======== ======== ==================== ======== ======== ====================
FFO per diluted share $ 0.53 $ 0.68
======== ======== ==================== ======== ======== ====================
FFO, as adjusted, per diluted share $ 0.52 $ 0.56
======== ======== ==================== ======== ======== ====================
Weighted average common and potential dilutive common shares 199,281 199,926
outstanding with Operating Partnership units fully converted
(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) For the three months ended March 31, 2016, includes
$26,373 related to the sale of a 50% interest in an unconsolidated
affiliate. This amount is included in Equity in earnings of
unconsolidated affiliates in the Consolidated Statements of
Operations.
(3) For the three months ended March 31, 2017,
represents gain on extinguishment of debt related to the
non-recourse loan secured by Midland Mall, which was conveyed to
the lender in January 2017.
The reconciliation of diluted EPS to FFO per diluted share is as
follows:
Three Months Ended
March 31,
------------------------------------------------------------------------------------------------------------------
2017 2016
-------------------------------------------------- --------------------------------------------------
Diluted EPS attributable to common shareholders $ 0.13 $ 0.17
Eliminate amounts per share excluded from FFO:
Depreciation and amortization expense, including amounts from 0.39 0.42
consolidated properties, unconsolidated affiliates, non-real estate
assets and excluding amounts allocated to noncontrolling interests
Loss on impairment, net of tax 0.01 0.09
-------------------- ------- -------------------- -------------------- ------- --------------------
FFO per diluted share $ 0.53 $ 0.68
==================== ======= ==================== ==================== ======= ====================
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
March 31,
------------------------------------------------------------------------------------------------------------------
2017 2016
-------------------------------------------------- --------------------------------------------------
FFO allocable to Operating Partnership common unitholders $ 106,610 $ 135,935
Percentage allocable to common shareholders (1) 85.80 % 85.37 %
-------------------- ------- -------------------- -------------------- ------- --------------------
FFO allocable to common shareholders $ 91,471 $ 116,048
==================== ======= ==================== ==================== ======= ====================
FFO allocable to Operating Partnership common unitholders, as $ 102,980 $ 111,247
adjusted
Percentage allocable to common shareholders (1) 85.80 % 85.37 %
-------------------- ------- -------------------- -------------------- ------- --------------------
FFO allocable to common shareholders, as adjusted $ 88,357 $ 94,972
==================== ======= ==================== ==================== ======= ====================
(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 12.
SUPPLEMENTAL FFO INFORMATION:
Three Months Ended
March 31,
-------------------------------------------------------------------------------
2017 2016
--------------------- ------------------------
Lease termination fees $ 247 $ 951
Lease termination fees per share $ -- $ --
Straight-line rental income $ 73 $ 149
Straight-line rental income per share $ -- $ --
Gains on outparcel sales $ 5,997 $ --
Gains on outparcel sales per share $ 0.03 $ --
Net amortization of acquired above- and below-market leases $ 1,218 $ 1,076
Net amortization of acquired above- and below-market leases per share $ 0.01 $ 0.01
Net amortization of debt premiums and discounts $ 623 $ 627
Net amortization of debt premiums and discounts per share $ -- $ --
Income tax benefit $ 800 $ 537
Income tax benefit per share $ -- $ --
Gain on extinguishment of debt $ 4,055 $ 6
Gain on extinguishment of debt per share $ 0.02 $ --
Equity in earnings from disposals of unconsolidated affiliates $ -- $ 26,395
Equity in earnings from disposals of unconsolidated affiliates per $ -- $ 0.13
share
Non-cash default interest expense $ (1,307 ) $ --
Non-cash default interest expense per share $ (0.01 ) $ --
Abandoned projects expense $ -- $ (1 )
Abandoned projects expense per share $ -- $ --
Interest capitalized $ 839 $ 548
Interest capitalized per share $ -- $ --
Litigation expenses $ (43 ) $ (1,707 )
Litigation expenses per share $ -- $ (0.01 )
Nonrecurring professional fees reimbursement $ 925 $ --
Nonrecurring professional fees reimbursement per share $ -- $ --
As of March 31,
---------------------------------------------------------------------------------------
2017 2016
------------------ -------------------- -------------------- ---------------------
Straight-line rent receivable $ 67,029 67,498
Same-center Net Operating Income
(Dollars in thousands)
Three Months Ended
March 31,
--------------------------------------------------------------------------------------------
2017 2016
--------------------------------------- ---------------------------------------
Net income $ 38,518 $ 41,892
Adjustments:
Depreciation and amortization 71,220 76,506
Depreciation and amortization from unconsolidated affiliates 9,543 9,178
Noncontrolling interests’ share of depreciation and amortization in (1,979 ) (2,393 )
other consolidated subsidiaries
Interest expense 56,201 55,231
Interest expense from unconsolidated affiliates 6,161 6,585
Noncontrolling interests’ share of interest expense in other (1,706 ) (1,679 )
consolidated subsidiaries
Abandoned projects expense -- 1
Gain on sales of real estate assets (5,988 ) --
(Gain) loss on sales of real estate assets of unconsolidated 35 (26,395 )
affiliates
Gain on extinguishment of debt (4,055 ) (6 )
Loss on impairment 3,263 19,685
Income tax benefit (800 ) (537 )
Lease termination fees (247 ) (951 )
Straight-line rent and above- and below-market lease amortization (1,291 ) (1,225 )
Net (income) loss attributable to noncontrolling interests in other (713 ) 3,127
consolidated subsidiaries
General and administrative expenses 16,082 17,168
Management fees and non-property level revenues (5,257 ) (4,776 )
-------------------------------------- --------------------------------------
Operating Partnership’s share of property NOI 178,987 191,411
Non-comparable NOI (5,951 ) (16,564 )
-------------------------------------- --------------------------------------
Total same-center NOI (1) $ 173,036 $ 174,847
======== ======== ==================== ======== ======== ====================
Total same-center NOI percentage change (1.0 )%
======================================
=======================================
Malls $ 157,390 $ 160,006
Associated centers 8,352 8,012
Community centers 5,484 5,157
Offices and other 1,810 1,672
-------------------------------------- --------------------------------------
Total same-center NOI (1) $ 173,036 $ 174,847
======== ======== ==================== ======== ======== ====================
Percentage Change:
Malls (1.6 )%
Associated centers 4.2 %
Community centers 6.3 %
Offices and other 8.3 %
--------------------------------------
Total same-center NOI (1) (1.0 )%
======================================
(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. Same-center NOI is for real estate
properties and does not include the results of operations of the
Company’s subsidiary that provides janitorial, security and
maintenance services. We include a property in our same-center
pool when we own all or a portion of the property as of March 31,
2017, 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, 2017. New properties are excluded from
same-center NOI, until they meet this criteria. The only
properties excluded from the same-center pool that would otherwise
meet this criteria are properties which are either under major
redevelopment, being considered for repositioning, minority
interest properties in which we own an interest of 25% or less, or
where we intend to renegotiate the terms of the debt secured by
the related property.
Company’s Share of Consolidated and Unconsolidated Debt
(Dollars
in thousands)
As of March 31, 2017
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fixed Rate Variable Total per Unamortized Total
Rate Debt Deferred
Schedule Financing
Costs
--------------------------------- -------------------------------- -------------------- -------------------- --------------------------------- -------------------- -------------------- ------------- -----------------------------------
Consolidated debt $ 3,389,900 $ 1,149,563 $ 4,539,463 $ (16,983 ) $ 4,522,480
Noncontrolling interests’ share of consolidated debt (107,197 ) (6,855 ) (114,052 ) 903 (113,149 )
Company’s share of unconsolidated affiliates’ debt 528,040 72,299 600,339 (2,651 ) 597,688
----------------------------------- ---------------------------------- ----------------------------------- --------------- -------------------------------------
Company’s share of consolidated and unconsolidated debt $ 3,810,743 $ 1,215,007 $ 5,025,750 $ (18,731 ) $ 5,007,019
==== ========= ==================== === ========= ==================== ==== ========= ==================== === ======= === ====== ========= ====================
Weighted average interest rate 5.28 % 2.31 % 4.56 %
=================================== ================================== ===================================
As of March 31, 2016
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fixed Rate Variable Total per Unamortized Total
Rate Debt Deferred
Schedule Financing
Costs
--------------------------------- -------------------------------- -------------------- -------------------- --------------------------------- -------------------- -------------------- ------------- -----------------------------------
Consolidated debt $ 3,466,259 $ 1,232,515 $ 4,698,774 $ (15,287 ) $ 4,683,487
Noncontrolling interests’ share of consolidated debt (109,906 ) (7,602 ) (117,508 ) 757 (116,751 )
Company’s share of unconsolidated affiliates’ debt 594,028 152,968 746,996 (1,798 ) 745,198
----------------------------------- ---------------------------------- ----------------------------------- --------------- -------------------------------------
Company’s share of consolidated and unconsolidated debt $ 3,950,381 $ 1,377,881 $ 5,328,262 $ (16,328 ) $ 5,311,934
==== ========= ==================== === ========= ==================== ==== ========= ==================== === ======= === ====== ========= ====================
Weighted average interest rate 5.40 % 1.90 % 4.49 %
=================================== ================================== ===================================
Debt-To-Total-Market Capitalization Ratio as of March 31, 2017
(In
thousands, except stock price)
Shares Stock Value
Outstanding Price (1)
----------- -------------- ------------------------------------
Common stock and Operating Partnership units 199,386 $ 9.54 $ 1,902,142
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 2,528,392
Company’s share of total debt, excluding unamortized deferred 5,025,750
financing costs
---------------- --------------------
Total market capitalization $ 7,554,142
======= ========= ====================
Debt-to-total-market capitalization ratio 66.5 %
(1) Stock price for common stock and Operating
Partnership units equals the closing price of the common stock on
March 31, 2017. The stock prices for the preferred stocks
represent the liquidation preference of each respective series.
Reconciliation of Shares and Operating Partnership Units
Outstanding
(In thousands)
Three Months Ended
March 31,
--------------------------------------------------------------------------------------------------------------------------------------
2017: Basic Diluted
-------------------------------------------------- --------------------------------------------------
Weighted average shares - EPS 170,989 170,989
Weighted average Operating Partnership units 28,292 28,292
-------------------- ------- -------------------- -------------------- ------- --------------------
Weighted average shares- FFO 199,281 199,281
==================== ======= ==================== ==================== ======= ====================
2016:
Weighted average shares - EPS 170,669 170,669
Weighted average Operating Partnership units 29,257 29,257
-------------------- ------- -------------------- -------------------- ------- --------------------
Weighted average shares- FFO 199,926 199,926
==================== ======= ==================== ==================== ======= ====================
Dividend Payout Ratio
Three Months Ended
March 31,
--------------------------------------------------------------------------------------------------------------------------------------
2017 2016
-------------------------------------------------- --------------------------------------------------
Weighted average cash dividend per share $ 0.27281 $ 0.27278
FFO, as adjusted, per diluted fully converted share $ 0.52 $ 0.56
-------------------- ------- -------------------- -------------------- ------- --------------------
Dividend payout ratio 52.5 % 48.7 %
==================== ======= ==================== ==================== ======= ====================
Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
As of
--------------------------------------------------------------------------------------------------------------------------------------------------------
ASSETS March 31, December 31,
2017 2016
------------------------------------------------------ --------------------------------------------------
Real estate assets:
Land $ 852,707 $ 820,979
Buildings and improvements 6,964,854 6,942,452
-------------------- -------------- -------------------- -------------------- ---------- --------------------
7,817,561 7,763,431
Accumulated depreciation (2,477,356 ) (2,427,108 )
-------------------- -------------- -------------------- -------------------- ---------- --------------------
5,340,205 5,336,323
Held for sale -- 5,861
Developments in progress 185,228 178,355
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Net investment in real estate assets 5,525,433 5,520,539
Cash and cash equivalents 27,553 18,951
Receivables:
90,485 94,676
Tenant, net of allowance for doubtful accounts of $1,875 and
$1,910 in 2017 and 2016, respectively
11,519 6,227
Other, net of allowance for doubtful accounts of $838 in 2017 and
2016
Mortgage and other notes receivable 16,347 16,803
Investments in unconsolidated affiliates 262,216 266,872
Intangible lease assets and other assets 196,419 180,572
-------------------- -------------- -------------------- -------------------- ---------- --------------------
$ 6,129,972 $ 6,104,640
==================== ============== ==================== ==================== ========== ====================
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness, net $ 4,522,480 $ 4,465,294
Accounts payable and accrued liabilities 277,568 280,498
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Total liabilities 4,800,048 4,745,792
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Commitments and contingencies
Redeemable noncontrolling partnership interests 15,472 17,996
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Shareholders’ equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized:
18 18
7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000
shares outstanding
7 7
6.625% Series E Cumulative Redeemable Preferred Stock, 690,000
shares outstanding
1,711 1,708
Common stock, $.01 par value, 350,000,000 shares authorized,
171,093,900 and 170,792,645 issued and outstanding in 2017 and
2016, respectively
Additional paid-in capital 1,971,155 1,969,059
Dividends in excess of cumulative earnings (764,524 ) (742,078 )
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Total shareholders’ equity 1,208,367 1,228,714
Noncontrolling interests 106,085 112,138
-------------------- -------------- -------------------- -------------------- ---------- --------------------
Total equity 1,314,452 1,340,852
-------------------- -------------- -------------------- -------------------- ---------- --------------------
$ 6,129,972 $ 6,104,640
==================== ============== ==================== ==================== ========== ====================
http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170503006604r1&sid=cmtx6&distro=nx&lang=en
View source version on businesswire.com: http://www.businesswire.com/news/home/20170503006604/en/
SOURCE: CBL & Associates Properties, Inc.
CBL & Associates Properties, Inc.
Katie Reinsmidt, 423-490-8301
Executive Vice President - Chief Investment Officer
katie.reinsmidt@cblproperties.com
