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 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


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