CBL CBL and Associates Properties Inc

CBL & Associates Properties, Inc. (NYSE:CBL): FFO per share increased 7.9% to $0.82 in the third quarter. Total revenues increased 12.5% during the third quarter. Portfolio occupancy unchanged from the prior year at 92.4% as of September 30, 2008, excluding centers acquired in 2007. Board declares quarterly cash dividend of $0.37 per share for the quarter ended December 31, 2008. CBL & Associates Properties, Inc. (NYSE:CBL) announced results for the third quarter ended September 30, 2008. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure is located at the end of this news release. Net income available to common shareholders for the third quarter ended September 30, 2008, was $3,985,000, or $0.06 per diluted share, compared with $17,088,000, or $0.26 per diluted share�for the prior-year period. Net income available to common shareholders for the nine months ended September 30, 2008, was $19,823,000, or $0.30 per diluted share, compared with $45,954,000, or $0.70 per diluted share, for the nine months ended September 30, 2007. Net income available to common shareholders for the third quarter ended September 30, 2008, declined by $13,103,000, primarily due to higher depreciation and interest expense, a higher income tax provision, and a non-cash write-down of marketable securities, collectively comprising $22,073,000, after adjustment for minority interest. This was partially offset by fee income of $5,726,000, after adjustment for minority interest, collected from affiliates of Centro, related to the Galileo transaction in 2005. Funds from Operations (�FFO�) allocable to common shareholders for the third quarter ended September 30, 2008, was $54,209,000, or $0.82 per diluted share, compared with $49,697,000, or $0.76 per diluted share, for the prior-year period, representing an increase of 7.9% on a per share basis. FFO allocable to common shareholders was $160,159,000, or $2.42 per diluted share, for the nine months ended September 30, 2008, compared with $149,094,000, or $2.27 per diluted share, for the nine months ended September 30, 2007. FFO per share for the third quarter and nine months ended September 30, 2008, included FFO from properties acquired in the fourth quarter 2007, fee income of $8,000,000 collected from affiliates of Centro, offset by a $5,778,000 write-down of marketable securities and a higher income tax provision. FFO of the operating partnership for the third quarter ended September 30, 2008, was $95,775,000, compared with $88,209,000 for the third quarter ended September 30, 2007, representing an increase of 8.6%. FFO of the operating partnership for the nine months ended September 30, 2008, was $283,066,000, compared with $264,914,000 for the nine months ended September 30, 2007. HIGHLIGHTS Total revenues increased 12.5% during the third quarter ended September 30, 2008, to $282,480,000 from $250,999,000 in the prior-year period. Total revenues increased 11.2% in the nine months ended September 30, 2008 to $830,104,000 from $746,306,000 in the comparable period a year ago. Same-center net operating income (�NOI�) for the portfolio for the quarter and nine months ended September 30, 2008, declined 1.6% and 1.0% respectively, compared with increases of 0.9% and a 0.4%, respectively, for the prior-year periods. Same-store sales for mall tenants of 10,000 square feet or less for stabilized malls as of September 30, 2008, declined 3.0% to $339 per square foot compared with $350 per square foot in the prior year period. The debt-to-total-market capitalization ratio as of September 30, 2008, was 71.2% based on the common stock closing price of $20.08 and a fully converted common stock share count of 116,972,000 shares as of the same date. The debt-to-total-market capitalization ratio as of September 30, 2007, was 54.3% based on the common stock closing price of $35.05 and a fully converted common stock share count of 116,348,000 shares as of the same date. Consolidated and unconsolidated variable rate debt of $1,645,225,000 represents 17.9% of the total market capitalization for the Company and 25.2% of the Company's share of total consolidated and unconsolidated debt. CBL�s Chairman and Chief Executive Officer, Charles B. Lebovitz, said, �Throughout CBL�s 30 years, we have consistently executed a strategy based on financial discipline, proactive management and leasing at our properties and excellent relationships with retailers and financial partners alike. These same disciplines apply even more today in light of the market�s emphasis on liquidity, the challenges in the real estate capital markets and worries about a consumer-led recession. We have faced these challenges before and are confident that we have the expertise and resources to successfully overcome them. �We always treat our capital as a precious commodity, and will be pursuing every means at our disposal to ensure that we protect our shareholders� long-term investment with us. As announced earlier today, the Board of Directors has approved a reduction in our current dividend rate. We believe this is a prudent and appropriate step given the continued volatility in the marketplace and the increased focus on access to capital. The excess free cash flow this reduction creates will serve to further bolster the strength of our balance sheet and enhance our financial flexibility.� PORTFOLIO OCCUPANCY � � September 30, 2008 2007 Portfolio occupancy 92.2 %(a) 92.4 % Mall portfolio 91.8 % 92.8 % Stabilized malls 92.1 % 93.2 % Non-stabilized malls 87.2 % 85.5 % Associated centers 95.1 % 92.0 % Community centers 92.1 % 85.5 % � (a)Portfolio occupancy excluding centers acquired in 2007 was 92.4% as of September 30, 2008 compared with 92.4% as of September 30, 2007. DIVIDEND Today CBL announced a revision to its common dividend rate. The continuing volatility in the financial markets and the challenges in the general economy have further increased the Company�s focus on further maximizing financial flexibility. As a result, the Company�s Board of Directors has declared a quarterly cash dividend for the Company's Common Stock of $0.37 per share for the quarter ending December 31, 2008. The dividend is payable on January 14, 2009, to shareholders of record as of December 30, 2008. The quarterly cash dividend equates to an annual dividend of $1.48 per share compared with the previous annual dividend of $2.18 per share. The reduction in the dividend rate should generate additional free cash flow of approximately $80.0 million on an annual basis. DISPOSITIONS In August 2008, CBL completed the sale of New Garden Crossing, a community center in Greensboro, NC, for $19.5 million. Year-to-date, CBL has sold seven community centers and one office building for $52.5 million. FINANCING During the third quarter, CBL announced $288.1 million of new financings. CBL used a portion of the proceeds from the financings to pay off the existing $84.6 million loan secured by Meridian Mall in Okemos, MI. These financings address all of CBL�s remaining maturities for 2008. CBL also announced a commitment for a new $85.0 million term loan secured by Meridian Mall in Lansing, MI. Subsequent to the quarter end, CBL entered into a revised $82.9 million commitment for the term loan secured by Meridian Mall. CBL anticipates closing an initial $40.0 million loan within the next 30 days. As additional participants are secured, the loan balance will increase up to $82.9 million. CBL primarily utilizes non-recourse, property specific debt. Excluding maturities with available extension options, CBL has $309.6 million of non-recourse, property specific debt maturing throughout 2009 as well as an $18.8 million term loan. CBL has no other maturities in 2009. OUTLOOK AND GUIDANCE Based on today's outlook and the Company's third quarter results the Company is maintaining guidance for 2008 FFO at the lower end of the $3.46 to $3.56 per share range. The full year guidance assumes $0.12 to $0.16 of outparcel sales and same-center NOI growth in the range of (2.0%) to (1.0%), excluding the impact of lease termination fees from both applicable periods. The guidance excludes the impact of any future unannounced acquisitions or dispositions. The Company expects to update its annual guidance after each quarter's results. � � Low � �High Expected diluted earnings per common share $ 0.61 $ 0.70 Adjust to fully converted shares from common shares (0.26 ) (0.30 ) Expected earnings per diluted, fully converted common share 0.35 0.40 Add: depreciation and amortization 2.89 2.89 Less: gain on disposal of discontinued operations (0.03 ) (0.03 ) Add: minority interest in earnings of Operating Partnership 0.25 � 0.30 � � Expected FFO per diluted, fully converted common share $ 3.46 � $ 3.56 � INVESTOR CONFERENCE CALL AND SIMULCAST CBL & Associates Properties, Inc. will conduct a conference call at 10:00 a.m. ET on Wednesday, November 5, 2008, to discuss the third quarter results. The number to call for this interactive teleconference is (303)�262-2130. A seven-day replay of the conference call will be available by dialing (303)�590-3000 and entering the passcode 11111001#. 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., third quarter earnings release and supplemental information please visit our website at http://cblproperties.com or contact Investor Relations at 423-490-8312. The Company will also provide an online Web simulcast and rebroadcast of its 2008 third quarter earnings release conference call. The live broadcast of CBL's quarterly conference call will be available online at the Company's Web site athttp://cblproperties.com, as well as www.streetevents.com and www.earnings.com, on November 5, 2008, beginning at 10:00 a.m. ET. The online replay will follow shortly after the call and continue through November 12, 2008. 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 159 properties, including 87 regional malls/open-air centers. The properties are located in 27 states and total 84.7 million square feet including 2.2 million square feet of non-owned shopping centers managed for third parties. CBL currently has ten projects under construction totaling 3.6 million square feet including Settlers Ridge in Pittsburgh, PA; The Pavilion at Port Orange in Port Orange, FL; Hammock Landing in West Melbourne, FL; The Promenade in D�Iberville, MS; two lifestyle/associated centers, and four expansions/redevelopments. Headquartered in Chattanooga, TN, CBL has regional offices in Boston (Waltham), MA, Dallas, TX, and St. Louis, MO. Additional information can be found at cblproperties.com. NON-GAAP FINANCIAL MEASURES Funds From Operations FFO is a widely used measure of the operating performance of real estate companies that supplements net income determined in accordance with GAAP. The National Association of Real Estate Investment Trusts (�NAREIT�) defines FFO as net income (computed in accordance with GAAP) excluding gains or losses on sales of operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and minority interests. Adjustments for unconsolidated partnerships and joint ventures and minority interests are calculated on the same basis. The Company defines FFO allocable to common shareholders as defined above by NAREIT less dividends on preferred stock. The Company�s method of calculating FFO allocable to common shareholders 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 of its operating partnership and FFO allocable to common shareholders, as it believes that both are useful performance measures. The Company believes FFO of its operating partnership 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 minority interest in the operating partnership. The Company believes FFO allocable to common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income available to common shareholders. In the reconciliation of net income available to common shareholders to FFO allocable to common shareholders, the Company makes an adjustment to add back minority interest in earnings of its operating partnership in order to arrive at FFO of its operating partnership. The Company then applies a percentage to FFO of its operating partnership to arrive at FFO allocable to 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 outstanding during the period. FFO does not represent cash flows from operations as defined by accounting principles generally accepted in the United States, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income for purposes of evaluating the Company�s operating performance or to cash flow as a measure of liquidity. Same-Center Net Operating Income NOI is a supplemental measure of the operating performance of the Company's shopping centers. The Company defines NOI as operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs). Similar to FFO, the Company computes NOI based on its pro rata share of both consolidated and unconsolidated properties. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's NOI may not be comparable to that of other companies. A reconciliation of same-center NOI to net income is located at the end of this earnings release. Since NOI includes only those revenues and expenses related to the operations of its shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates and operating costs and the impact of those trends on the Company's results of operations. Additionally, there are instances when tenants terminate their leases prior to the scheduled expiration date and pay the Company one-time, lump-sum termination fees. These one-time lease termination fees may distort same-center NOI trends and may result in same-center NOI that is not indicative of the ongoing operations of the Company's shopping center properties. Therefore, the Company believes that presenting same-center NOI, excluding lease termination fees, is useful to investors. 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 minority investors' 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 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" incorporated by reference 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 September 30, Nine Months Ended September 30, � 2008 � � 2007 � � 2008 � � 2007 � REVENUES: Minimum rents $ 173,231 $ 155,633 $ 520,499 $ 464,753 Percentage rents 3,226 3,506 9,823 11,840 Other rents 4,294 3,580 13,509 11,942 Tenant reimbursements 84,293 83,053 250,111 235,699 Management, development and leasing fees 11,511 1,390 16,933 6,565 Other � 5,925 � � 3,837 � � 19,229 � � 15,507 � Total revenues � 282,480 � � 250,999 � � 830,104 � � 746,306 � � EXPENSES: Property operating 48,101 42,014 139,916 123,843 Depreciation and amortization 81,961 58,847 228,641 175,946 Real estate taxes 23,390 24,526 70,994 65,034 Maintenance and repairs 15,215 12,532 47,702 41,826 General and administrative 9,623 8,305 33,268 29,072 Other � 5,150 � � 3,647 � � 18,690 � � 12,088 � Total expenses � 183,440 � � 149,871 � � 539,211 � � 447,809 � Income from operations 99,040 101,128 290,893 298,497 Interest and other income 2,225 1,990 7,134 7,618 Interest expense (77,057 ) (72,789 ) (233,736 ) (207,730 ) Loss on extinguishment of debt - - - (227 ) Impairment of marketable securities (5,778 ) - (5,778 ) - Gain on sales of real estate assets 4,773 4,337 12,122 10,565 Equity in earnings of unconsolidated affiliates 515 1,086 1,308 2,768 Income tax provision (8,562 ) (2,609 ) (12,757 ) (4,360 ) Minority interest in earnings: Operating partnership (3,068 ) (13,288 ) (15,195 ) (35,886 ) Shopping center properties � (5,498 ) � (2,121 ) � (17,949 ) � (6,418 ) Income from continuing operations 6,590 17,734 26,042 64,827 Operating income of discontinued operations 2,174 852 6,357 1,545 Gain on discontinued operations � 676 � � 3,957 � � 3,788 � � 3,902 � Net income 9,440 22,543 36,187 70,274 Preferred dividends � (5,455 ) � (5,455 ) � (16,364 ) � (24,320 ) Net income available to common shareholders $ 3,985 � $ 17,088 � $ 19,823 � $ 45,954 � Basic per share data: Income from continuing operations, net of preferred dividends $ 0.02 $ 0.19 $ 0.15 $ 0.62 Discontinued operations � 0.04 � � 0.07 � � 0.15 � � 0.08 � Net income available to common shareholders $ 0.06 � $ 0.26 � $ 0.30 � $ 0.70 � � Weighted average common shares outstanding 66,047 65,343 65,978 65,233 � Diluted per share data: Income from continuing operations, net of preferred dividends $ 0.02 $ 0.19 $ 0.15 $ 0.61 Discontinued operations � 0.04 � � 0.07 � � 0.15 � � 0.09 � Net income available to common shareholders $ 0.06 � $ 0.26 � $ 0.30 � $ 0.70 � � Weighted average common and potential dilutive common shares outstanding 66,209 65,876 66,172 65,900 � � � � � The Company's calculation of FFO allocable to Company shareholders is as follows: (in thousands, except per share data) � Three Months Ended September 30, Nine Months Ended September 30, � 2008 � � 2007 � � 2008 � � 2007 � � Net income available to common shareholders $ 3,985 $ 17,088 $ 19,823 $ 45,954 Minority interest in earnings of operating partnership 3,068 13,288 15,195 35,886 Depreciation and amortization expense of: Consolidated properties 81,961 58,847 228,641 175,946 Unconsolidated affiliates 7,741 3,425 21,112 10,550 Discontinued operations - 46 2,357 980 Non-real estate assets (268 ) (228 ) (770 ) (690 ) Minority investors' share of depreciation and amortization (292 ) (300 ) (943 ) 190 Gain on discontinued operations (676 ) (3,957 ) (3,788 ) (3,902 ) Income tax provision on disposal of discontinued operations � 256 � � - � � 1,439 � � - � Funds from operations of the operating partnership $ 95,775 � $ 88,209 � $ 283,066 � $ 264,914 � � Funds from operations per diluted share $ 0.82 � $ 0.76 � $ 2.42 � $ 2.27 � Weighted average common and potential dilutive common shares outstanding with operating partnership units fully converted 116,844 116,513 116,807 116,583 � Reconciliation of FFO of the operating partnership to FFO allocable to Company shareholders: � Funds from operations of the operating partnership $ 95,775 $ 88,209 $ 283,066 $ 264,914 Percentage allocable to Company shareholders (1) � 56.60 % � 56.34 % � 56.58 % � 56.28 % Funds from operations allocable to Company shareholders $ 54,209 � $ 49,697 � $ 160,159 � $ 149,094 � � (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 on page 9. � � SUPPLEMENTAL FFO INFORMATION: � Lease termination fees $ 3,338 $ 156 $ 9,256 $ 5,795 Lease termination fees per share $ 0.03 $ - $ 0.08 $ 0.05 � Straight-line rental income $ 899 $ 1,349 $ 4,050 $ 3,733 Straight-line rental income per share $ 0.01 $ 0.01 $ 0.03 $ 0.03 � Gains on outparcel sales $ 6,695 $ 3,913 $ 14,243 $ 11,051 Gains on outparcel sales per share $ 0.06 $ 0.03 $ 0.12 $ 0.09 � Amortization of acquired above- and below-market leases $ 1,677 $ 2,588 $ 6,785 $ 8,280 Amortization of acquired above- and below-market leases per share $ 0.01 $ 0.02 $ 0.06 $ 0.07 � Amortization of debt premiums $ 1,982 $ 1,949 $ 5,918 $ 5,779 Amortization of debt premiums per share $ 0.02 $ 0.02 $ 0.05 $ 0.05 � Income tax provision $ (8,306 ) $ (2,609 ) $ (11,318 ) $ (4,360 ) Income tax provision per share $ (0.07 ) $ (0.02 ) $ (0.10 ) $ (0.04 ) � Impairment of marketable securities $ (5,778 ) $ - $ (5,778 ) $ - Impairment of marketable securities per share $ (0.05 ) $ - $ (0.05 ) $ - Same-Center Net Operating Income (Dollars in thousands) � � � Three Months Ended September 30, Nine Months Ended September 30, � 2008 � � 2007 � � 2008 � � 2007 � � Net income $ 9,440 $ 22,543 $ 36,187 $ 70,274 � Adjustments: Depreciation and amortization 81,961 58,847 228,641 175,946 Depreciation and amortization from unconsolidated affiliates 7,741 3,425 21,112 10,550 Depreciation and amortization from discontinued operations - 46 2,357 980 Minority investors' share of depreciation and amortization in shopping center properties (292 ) (300 ) (943 ) 190 Interest expense 77,057 72,789 233,736 207,730 Interest expense from unconsolidated affiliates 7,038 4,178 20,872 12,576 Minority investors' share of interest expense in shopping center properties (454 ) (472 ) (1,357 ) (365 ) Loss on extinguishment of debt - - - 227 Abandoned projects expense 33 355 2,944 955 Gain on sales of real estate assets (4,773 ) (4,337 ) (12,122 ) (10,565 ) Gain on sales of real estate assets of unconsolidated affiliates (2,287 ) (295 ) (2,716 ) (1,218 ) Impairment of marketable securities 5,778 - 5,778 - Minority investors' share of gain on sales of shopping center real estate assets 365 621 595 621 Income tax provision 8,562 2,609 12,757 4,360 Minority interest in earnings of operating partnership 3,068 13,288 15,195 35,886 Gain on discontinued operations � (676 ) � (3,957 ) � (3,788 ) � (3,902 ) Operating partnership's share of total NOI 192,561 169,340 559,248 504,245 General and administrative expenses 9,623 8,305 33,268 29,072 Management fees and non-property level revenues � (16,328 ) � (6,707 ) � (30,869 ) � (25,751 ) Operating partnership's share of property NOI 185,856 170,938 561,647 507,566 NOI of non-comparable centers � (20,179 ) � (2,587 ) � (64,830 ) � (5,683 ) Total same-center NOI $ 165,677 � $ 168,351 � $ 496,817 � $ 501,883 � � Malls $ 152,498 $ 152,867 $ 456,857 $ 460,437 Associated centers 8,038 8,276 23,896 24,524 Community centers 1,719 1,827 5,036 4,915 Other � 3,422 � � 5,381 � � 11,028 � � 12,007 � Total same-center NOI 165,677 168,351 496,817 501,883 Less lease termination fees � (3,255 ) � (157 ) � (7,824 ) � (5,795 ) Total same-center NOI, excluding lease termination fees $ 162,422 � $ 168,194 � $ 488,993 � $ 496,088 � � Percentage Change: Malls -0.2 % -0.8 % Associated centers -2.9 % -2.6 % Community centers -5.9 % 2.5 % Other � -36.4 % � -8.2 % Total same-center NOI � -1.6 % � -1.0 % Total same-center NOI, excluding lease termination fees � -3.4 % � -1.4 % � � � � Company's Share of Consolidated and Unconsolidated Debt (Dollars in thousands) September 30, 2008 Fixed Rate Variable Rate Total Consolidated debt $ 4,499,557 $ 1,524,192 $ 6,023,749 Minority investors' share of consolidated debt (23,743 ) (919 ) (24,662 ) Company's share of unconsolidated affiliates' debt � 408,719 � � 121,952 � � 530,671 � Company's share of consolidated and unconsolidated debt $ 4,884,533 � $ 1,645,225 � $ 6,529,758 � Weighted average interest rate � 5.79 % � 4.32 % � 5.42 % � September 30, 2007 Fixed Rate Variable Rate Total Consolidated debt $ 4,049,524 $ 1,002,742 $ 5,052,266 Minority investors' share of consolidated debt (119,797 ) (288 ) (120,085 ) Company's share of unconsolidated affiliates' debt � 219,032 � � 42,074 � � 261,106 � Company's share of consolidated and unconsolidated debt $ 4,148,759 � $ 1,044,528 � $ 5,193,287 � Weighted average interest rate � 5.92 % � 6.33 % � 6.00 % � � Debt-To-Total-Market Capitalization Ratio as of September 30, 2008 (In thousands, except stock price) Shares Outstanding Stock Price (1) Value Common stock and operating partnership units 116,972 $ 20.08 $ 2,348,798 7.75% Series C Cumulative Redeemable Preferred Stock 460 250.00 115,000 7.375% Series D Cumulative Redeemable Preferred Stock 700 250.00 � 175,000 � Total market equity 2,638,798 Company's share of total debt � 6,529,758 � Total market capitalization $ 9,168,556 � Debt-to-total-market capitalization ratio � 71.2 % � (1) Stock price for common stock and operating partnership units equals the closing price of the common stock on September 30, 2008. The stock price for the preferred stock represents the liquidation preference of each respective series of preferred stock. � � � Reconciliation of Shares and Operating Partnership Units Outstanding (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2008: Basic Diluted Basic Diluted Weighted average shares - EPS 66,047 66,209 65,978 66,172 Weighted average operating partnership units � 50,635 � � 50,635 � � 50,635 � � 50,635 � Weighted average shares- FFO � 116,682 � � 116,844 � � 116,613 � � 116,807 � � 2007: Weighted average shares - EPS 65,343 65,876 65,233 65,900 Weighted average operating partnership units � 50,637 � � 50,637 � � 50,683 � � 50,683 � Weighted average shares- FFO � 115,980 � � 116,513 � � 115,916 � � 116,583 � � � Dividend Payout Ratio Three Months Ended Nine Months Ended September 30, September 30, � 2008 � � 2007 � � � 2008 � � 2007 � Weighted average dividend per share $ 0.55047 $ 0.51031 $ 1.65141 $ 1.53225 FFO per diluted, fully converted share $ 0.82 � $ 0.76 � $ 2.42 � $ 2.27 � Dividend payout ratio � 67.1 % � 67.1 % � 68.2 % � 67.5 % Consolidated Balance Sheets (Unaudited, in thousands except share data) � � � September 30, 2008 December 31, 2007 ASSETS Real estate assets: Land $ 881,218 $ 917,578 Buildings and improvements � 7,400,040 � � 7,263,907 � 8,281,258 8,181,485 Accumulated depreciation � (1,269,260 ) � (1,102,767 ) 7,011,998 7,078,718 Held for Sale 120,000 - Developments in progress � 280,953 � � 323,560 � Net investment in real estate assets 7,412,951 7,402,278 Cash and cash equivalents 67,485 65,826 Cash in escrow 2,700 - Receivables: Tenant, net of allowance 72,766 72,570 Other 12,350 10,257 Mortgage and other notes receivable 49,326 135,137 Investments in unconsolidated affiliates 212,460 142,550 Intangible lease assets and other assets � 248,876 � � 276,429 � $ 8,078,914 � $ 8,105,047 � LIABILITIES AND SHAREHOLDERS' EQUITY Mortgage and other notes payable $ 6,023,749 $ 5,869,318 Accounts payable and accrued liabilities � 366,839 � � 394,884 � Total liabilities � 6,390,588 � � 6,264,202 � Commitments and contingencies Minority interests � 851,341 � � 920,297 � Shareholders' equity: Preferred Stock, $.01 par value, 15,000,000 shares authorized: 7.75% Series C Cumulative Redeemable Preferred Stock, 460,000 shares outstanding 5 5 7.375% Series D Cumulative Redeemable Preferred Stock, 700,000 shares outstanding 7 7 Common Stock, $.01 par value, 180,000,000 shares authorized, 66,336,663 and 66,179,747 issued and outstanding in 2008 and 2007, respectively � 663 662 Additional paid-in capital 1,000,849 990,048 Accumulated other comprehensive loss (5,855 ) (20 ) Accumulated deficit � (158,684 ) � (70,154 ) Total shareholders' equity � 836,985 � � 920,548 � $ 8,078,914 � $ 8,105,047 �