CBL Properties (NYSE:CBL) announced results for the first
quarter ended March 31, 2020, and provided a further update on the
impact of the COVID-19 pandemic on its financial and operational
performance. 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,
2020
2019
%
Net loss attributable to common
shareholders per diluted share
$
(0.75
)
$
(0.29
)
(158.6
)%
Funds from Operations ("FFO") per diluted
share
$
0.25
$
0.22
13.6
%
FFO, as adjusted, per diluted share
(1)
$
0.26
$
0.30
(13.3
)%
(1)
For a reconciliation of FFO to
FFO, as adjusted, for the periods presented, please refer to the
footnotes to the Company’s reconciliation of net loss attributable
to common shareholders to FFO allocable to Operating Partnership
common unitholders on page 8 of this news release
KEY TAKEAWAYS:
- FFO per diluted share, as adjusted, was $0.26 for the first
quarter 2020, compared with $0.30 per share for the first quarter
2019. First quarter 2020 FFO per share was impacted by $0.02 per
share of dilution from asset sales completed since the prior-year
period and $0.07 per share of lower property NOI offset by $0.02
per share lower interest expense and $0.02 per share lower net
G&A expense.
- Same-center sales per square foot for the twelve-months ended
February 29, 2020, increased 3% to $392 per square foot compared
with the prior-year period ended February 28, 2019. The majority of
stores in the CBL portfolio closed during the month of March 2020,
which resulted in a decline in reported same-center sales per
square foot for the month of 45% compared with the prior year
month.
- Total Portfolio same-center NOI declined 8.7% for the three
months ended March 31, 2020, as compared with the prior-year
period.
- Portfolio occupancy as of March 31, 2020, was 89.5%,
representing a 180-basis point decline compared with 91.3% as of
March 31, 2019. Same-center mall occupancy was 87.8% as of March
31, 2020, a 200-basis point decline compared with 89.8% as of March
31, 2019.
- CBL established a comprehensive COVID-19 operational response
plan, including enacting a work from home protocol for employees,
following CDC and governmental recommended guidelines across the
portfolio for operating, closing and re-opening plans and providing
assistance to its local and regional tenants in various ways,
including launching a dynamic informational website to help access
local, state and federal resources.
- The Company also took significant actions to improve liquidity
and reduce costs in response to the COVID-19 pandemic. These steps
included drawing $280 million on its line of credit, eliminating
all non-essential expenditures, implementing a company-wide
furlough and salary reduction program and delaying and suspending
capital expenditures, including redevelopment investments (more
details herein).
“While first quarter results were largely as anticipated, the
COVID-19 pandemic significantly shifted our expectations for the
remainder of the year,” said Stephen D. Lebovitz, Chief Executive
Officer. “The majority of the properties in our portfolio closed
during March due to government mandates. As of May 25th, 66 of 68
CBL owned or managed malls have re-opened, subject to certain
health and safety restrictions, including a dozen properties that
are offering curbside or exterior-only service. As properties
re-open, we have worked in cooperation with our tenants to
institute strict guidelines, following CDC and health department
recommendations, to help ensure the safety of our employees,
tenants and customers.
“For the month of April, we received approximately 27% of billed
cash rents. We estimate a collection rate for the month of May in
the range of 25-30% based on preliminary cash receipts and
conversations with retailers. The majority of our tenants requested
rent relief, either in the form of rent deferrals or abatements. We
have placed a number of tenants in default for non-payment of rent.
We anticipate a significant portion of April and May rents will be
collected later in 2020 and into 2021 under agreed upon deferral
plans. However, negotiations are ongoing, and it is premature to
estimate a recovery rate at this time.
“Our priority during this time of uncertainty has been to
preserve cash. We announced significant steps to improve our
liquidity position, including drawing down the available amount on
our line of credit. In addition, we instituted a significant cost
reduction program. We have been successful in deferring or halting
approximately $60 - $80 million in planned capital expenditures,
including redevelopment investments, for 2020. While we have paused
several major projects, we are pursuing capital lite solutions for
backfilling our remaining available anchors, including joint
venture partnerships, favorable lease structures and third-party
arrangements – all of which benefit our portfolio while preserving
capital. Additionally, we were able to achieve debt service payment
deferrals for a portion of our secured loans. Securitized lenders
in general have shown minimal flexibility in amending loan
payments.
“We have addressed nearly all of our major debt maturities for
2020 and are in discussions with existing lenders for certain 2021
secured loan maturities. As a reminder, we have no significant
unsecured debt maturities until December 2023, and have time to
evaluate the optimal financial roadmap for CBL. We are being
proactive to determine the best strategies for addressing these
future maturities and significantly reducing leverage.”
FINANCIAL RESULTS
Net loss attributable to common shareholders for the first
quarter 2020 was $133.9 million, or $0.75 per diluted share,
compared with a net loss of $50.2 million, or a loss of $0.29 per
diluted share, for the first quarter 2019. Net loss for the first
quarter 2020 was impacted by a $133.6 million loss on impairment of
real estate to write down the carrying values of Monroeville Mall
in Monroeville, PA, and Burnsville Center in Minneapolis, MN, to
the properties’ estimated fair values.
FFO allocable to common shareholders, as adjusted, for the first
quarter 2020 was $45.9 million, or $0.26 per diluted share,
compared with $52.4 million, or $0.30 per diluted share, for the
first quarter 2019. FFO allocable to the Operating Partnership
common unitholders, as adjusted, for the first quarter 2020 was
$51.6 million compared with $60.5 million for the first quarter
2019.
Percentage change in same-center Net Operating Income (“NOI”)
(1):
Three Months Ended
March 31,
2020
Portfolio same-center NOI
(8.7
)%
Mall same-center NOI
(9.6
)%
(1)
CBL’s definition of same-center
NOI excludes the impact of lease termination fees and certain
non-cash items such as straight-line rents and reimbursements,
write-offs of landlord inducements and net amortization of acquired
above and below market leases.
Major variances impacting same-center NOI for the three months
ended March 31, 2020, include:
- Same-center NOI declined $11.8 million, due to a $12.1 million
decrease in revenues offset by a $0.3 million decline in operating
expenses.
- Rental revenues declined $13.6 million, including a $6.4
million decline in tenant reimbursements and a $7.0 million decline
in minimum and other rents. Percentage rents declined $0.2
million.
- Property operating expenses increased $0.1 million compared
with the prior year. Maintenance and repair expenses improved $0.5
million. Real estate tax expenses increased $0.1 million.
COVID-19 UPDATE
On March 11, 2020, the World Health Organization classified
COVID-19 as a pandemic. As a result of extraordinary governmental
actions taken to contain COVID-19, the Company is unable to predict
the full extent of the pandemic’s impact to the Company’s results
of operations for the remainder of 2020. As a result, on March 25,
2020, CBL withdrew its full-year 2020 FFO per share, as adjusted,
guidance and underlying assumptions and does not plan to reinstate
full-year 2020 guidance until there is further clarity on the
financial impact of the pandemic.
In response to local and state mandated closures, the majority
of the properties in the CBL portfolio closed during the month of
March 2020. Beginning in late April, government agencies began
allowing the re-opening of certain properties with various health
and safety restrictions or solely for curbside service. As of May
25th, 66 of 68 owned or managed mall properties have re-opened
including twelve for curbside or exterior-only service. The safety
and health of our customers, employees and tenants remains a top
priority. With each re-opening, CBL has instituted a comprehensive
re-opening plan that includes strict procedures and guidelines for
our employees, tenants and property visitors based on CDC and other
health agency recommendations.
During the month of April, CBL collected approximately 27% of
billed cash-based rents and estimates May rent collections will be
in the range of 25-30%. Many tenants have requested deferral of
rent or in certain instances, abatement of rents due. While, in
general, under the leases, CBL believes that the tenants have a
clear contractual obligation to pay rent, CBL is working with
tenants that may require rent deferral or relief. These tenant
discussions are ongoing and at this time, CBL is unable to estimate
the outcome of these discussions, the impact of these relief
packages or the ultimate recoverability of any amounts
deferred.
EXPENSE REDUCTION AND LIQUIDITY
As previously announced, CBL has implemented comprehensive
programs to halt all non-essential expenditures, to reduce
operating and overhead expenses and to reduce, defer or suspend
capital expenditures, including redevelopment investments. These
programs include:
- reductions to executive compensation, including a 50% reduction
for CBL’s Chairman, CEO and President, a 50% reduction to
independent director fees and a 20% reduction for other
officers;
- a broad-based temporary furlough program impacting
approximately 300 employees, or 60% of CBL’s workforce;
- salary reductions for the remaining staff;
- capital expenditure reductions or deferrals, including
redevelopment expenditures, estimated in the range of $60 million -
$80 million;
- suspension or delay of all other non-essential
expenditures.
CBL has also taken actions to improve its liquidity position to
help offset the impact to near-term cash flows. In March, CBL
completed a $280 million aggregate draw on its line of credit,
which represented substantially all of the remaining available
balance. CBL has also been able to achieve debt service payment
deferrals for certain secured loans.
PORTFOLIO OPERATIONAL RESULTS
Occupancy(1):
As of March 31,
2020
2019
Total portfolio
89.5
%
91.3
%
Malls:
Total Mall portfolio
87.8
%
89.4
%
Same-center Malls
87.8
%
89.8
%
Stabilized Malls
88.0
%
89.7
%
Non-stabilized Malls (2)
80.0
%
76.4
%
Associated centers
93.2
%
96.9
%
Community centers
95.8
%
97.6
%
(1)
Occupancy for malls represents
percentage of mall store gross leasable area under 20,000 square
feet occupied. Occupancy for associated and community centers
represents percentage of gross leasable area occupied.
(2)
Represents occupancy for The
Outlet Shoppes at Laredo.
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, 2020
Stabilized Malls
(7.4
)%
New leases
31.5
%
Renewal leases
(11.2
)%
Same-Center Sales Per Square Foot for
Mall Tenants 10,000 Square Feet or Less:
Twelve Months Ended
February 29, 2020
Twelve Months Ended
February 28, 2019
% Change
Stabilized mall same-center sales per
square foot
$
392
$
380
3
%
FINANCING ACTIVITY
During the quarter, CBL retired two loans aggregating $84.7
million secured separately by Valley View Mall in Roanoke, VA and
Parkway Place in Huntsville, AL.
CBL also closed on a new $4.68 million loan in first quarter
2020 secured by The Outlet Shoppes at Atlanta – Phase II with a new
lender. The new loan will mature in November 2023, bears interest
at 4.1% and replaced the existing loan, which matured in February
2020.
CBL has discontinued discussions with lenders for a potential
modification and extension of the loans secured by Park Plaza in
Little Rock, AR ($77.6 million) and Hickory Point in Forsyth, IL
($27.5 million). CBL anticipates cooperating with the lenders in
foreclosure proceedings. CBL is also working with the servicer for
the loan secured by EastGate Mall in Cincinnati, OH ($31.9 million)
to return the property to the lender.
CBL is currently in discussions with the lenders to modify and
extend the loans secured by Burnsville Center in Minneapolis, MN
($64.2 million) and Greenbrier Mall in Chesapeake, VA ($64.5
million). These discussions are ongoing and CBL is not able to
predict the outcome at this time.
DISPOSITIONS
CBL did not complete any major dispositions during the
quarter.
ANCHOR REPLACEMENT PROGRESS AND REDEVELOPMENT
As part of overall cost reduction and cash preservation actions,
CBL has suspended or delayed certain redevelopment projects, where
possible. Detailed project information is available in CBL’s
Financial Supplement for Q1 2020.
ABOUT CBL PROPERTIES
Headquartered in Chattanooga, TN, CBL Properties owns and
manages a national portfolio of market-dominant properties located
in dynamic and growing communities. CBL’s portfolio is comprised of
108 properties totaling 68.2 million square feet across 26 states,
including 68 high-quality enclosed, outlet and open-air retail
centers and 9 properties managed for third parties. CBL seeks to
continuously strengthen its company and portfolio through active
management, aggressive leasing and profitable reinvestment in its
properties. For more information visit cblproperties.com.
NON-GAAP FINANCIAL MEASURES
Funds From Operations
FFO is a widely used non-GAAP measure of the operating
performance of real estate companies that supplements net income
(loss) determined in accordance with GAAP. The National Association
of Real Estate Investment Trusts ("NAREIT") defines FFO as net
income (loss) (computed in accordance with GAAP) excluding gains or
losses on sales of depreciable operating properties and impairment
losses of depreciable properties, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships
and joint ventures and noncontrolling interests. Adjustments for
unconsolidated partnerships and joint ventures and noncontrolling
interests are calculated on the same basis. We define FFO as
defined above by NAREIT 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 8 of this news release for a description
of these adjustments.
Same-center Net Operating Income
NOI is a supplemental non-GAAP measure of the operating
performance of the Company’s shopping centers and other properties.
The Company defines NOI as property operating revenues (rental
revenues, tenant reimbursements and other income) less property
operating expenses (property operating, real estate taxes and
maintenance and repairs).
The Company computes NOI based on the Operating Partnership’s
pro rata share of both consolidated and unconsolidated properties.
The Company believes that presenting NOI and same-center NOI
(described below) based on its Operating Partnership’s pro rata
share of both consolidated and unconsolidated properties is useful
since the Company conducts substantially all of its business
through its Operating Partnership and, therefore, it reflects the
performance of the properties in absolute terms regardless of the
ratio of ownership interests of the Company’s common shareholders
and the noncontrolling interest in the Operating Partnership. The
Company's definition of NOI may be different than that used by
other companies and, accordingly, the Company's calculation of NOI
may not be comparable to that of other companies.
Since NOI includes only those revenues and expenses related to
the operations of the Company’s shopping center properties, the
Company believes that same-center NOI provides a measure that
reflects trends in occupancy rates, rental rates, sales at the
malls and operating costs and the impact of those trends on the
Company’s results of operations. The Company’s calculation of
same-center NOI excludes lease termination income, straight-line
rent adjustments, amortization of above and below market lease
intangibles and write-off of landlord inducement assets in order to
enhance the comparability of results from one period to another. A
reconciliation of same-center NOI to net income is located at the
end of this earnings release.
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.
Consolidated Statements of
Operations
(Unaudited; in thousands, except per share
amounts)
Three Months Ended
March 31,
2020
2019
REVENUES:
Rental revenues
$
161,173
$
190,980
Management, development and leasing
fees
2,092
2,523
Other
4,309
4,527
Total revenues
167,574
198,030
OPERATING EXPENSES:
Property operating
(25,709
)
(28,980
)
Depreciation and amortization
(55,902
)
(69,792
)
Real estate taxes
(18,448
)
(19,919
)
Maintenance and repairs
(11,208
)
(12,776
)
General and administrative
(17,836
)
(22,007
)
Loss on impairment
(133,644
)
(24,825
)
Litigation settlement
—
(88,150
)
Other
(158
)
—
Total operating expenses
(262,905
)
(266,449
)
OTHER INCOME (EXPENSES):
Interest and other income
2,397
489
Interest expense
(46,992
)
(53,998
)
Gain on extinguishment of debt
—
71,722
Gain on sales of real estate assets
140
228
Income tax provision
(526
)
(139
)
Equity in earnings of unconsolidated
affiliates
1,018
3,308
Total other income (expenses)
(43,963
)
21,610
Net loss
(139,294
)
(46,809
)
Net loss attributable to noncontrolling
interests in:
Operating Partnership
16,414
7,758
Other consolidated subsidiaries
207
75
Net loss attributable to the
Company
(122,673
)
(38,976
)
Preferred dividends declared
—
(11,223
)
Preferred dividends undeclared
(11,223
)
—
Net loss attributable to common
shareholders
$
(133,896
)
$
(50,199
)
Basic and diluted per share data
attributable to common shareholders:
Net loss attributable to common
shareholders
$
(0.75
)
$
(0.29
)
Weighted-average common and potential
dilutive common shares outstanding
179,133
173,252
The Company's reconciliation of net
loss attributable to common shareholders to FFO allocable to
Operating Partnership common unitholders is as follows:
(in thousands, except per share data)
Three Months Ended
March 31,
2020
2019
Net loss attributable to common
shareholders
$
(133,896
)
$
(50,199
)
Noncontrolling interest in loss of
Operating Partnership
(16,414
)
(7,758
)
Depreciation and amortization expense
of:
Consolidated properties
55,902
69,792
Unconsolidated affiliates
13,510
10,666
Non-real estate assets
(917
)
(897
)
Noncontrolling interests' share of
depreciation and amortization in other
consolidated subsidiaries
(923
)
(2,157
)
Loss on impairment
133,644
24,825
(Gain) loss on depreciable property
25
(242
)
FFO allocable to Operating Partnership
common unitholders
50,931
44,030
Litigation settlement, net of taxes
(1)
—
87,667
Non-cash default interest expense (2)
690
542
Gain on extinguishment of debt (3)
—
(71,722
)
FFO allocable to Operating Partnership
common unitholders, as adjusted
$
51,621
$
60,517
FFO per diluted share
$
0.25
$
0.22
FFO, as adjusted, per diluted
share
$
0.26
$
0.30
Weighted-average common and potential
dilutive common shares
outstanding with Operating Partnership
units fully converted
201,258
200,010
(1)
The three months ended March 31,
2019 is comprised of the accrued maximum expense of $88.2 million
related to the proposed settlement of a class action lawsuit.
(2)
The three months ended March 31,
2020 includes default interest expense related to Greenbrier Mall
and Hickory Point Mall. The three months ended March 31, 2019
includes default interest expense related to Acadiana Mall and Cary
Towne Center.
(3)
The three months ended March 31,
2019 includes a gain on extinguishment of debt related to the
non-recourse loan secured by Acadiana Mall, which was conveyed to
the lender in the first quarter of 2019, and a gain on
extinguishment of debt related to the non-recourse loan secured by
Cary Towne Center, which was sold in the first quarter of 2019.
The reconciliation of diluted EPS to FFO
per diluted share is as follows:
Three Months Ended
March 31,
2020
2019
Diluted EPS attributable to common
shareholders
$
(0.75
)
$
(0.29
)
Eliminate amounts per share excluded from
FFO:
Depreciation and amortization expense,
including amounts from
consolidated properties, unconsolidated
affiliates, non-real estate
assets and excluding amounts allocated to
noncontrolling
interests
0.34
0.39
Loss on impairment
0.66
0.12
FFO per diluted share
$
0.25
$
0.22
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,
2020
2019
FFO allocable to Operating Partnership
common unitholders
$
50,931
$
44,030
Percentage allocable to common
shareholders (1)
89.01
%
86.62
%
FFO allocable to common
shareholders
$
45,334
$
38,139
FFO allocable to Operating Partnership
common unitholders, as adjusted
$
51,621
$
60,517
Percentage allocable to common
shareholders (1)
89.01
%
86.62
%
FFO allocable to common shareholders,
as adjusted
$
45,948
$
52,420
(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 13.
Three Months Ended
March 31,
2020
2019
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees
$
220
$
1,017
Lease termination fees per share
$
—
$
0.01
Straight-line rental income
$
892
$
237
Straight-line rental income per share
$
—
$
—
Gains on outparcel sales
$
165
$
618
Gains on outparcel sales per share
$
—
$
—
Net amortization of acquired above- and
below-market leases
$
903
$
808
Net amortization of acquired above- and
below-market leases per share
$
—
$
—
Net amortization of debt premiums and
discounts
$
343
$
324
Net amortization of debt premiums and
discounts per share
$
—
$
—
Income tax provision
$
(526
)
$
(139
)
Income tax provision per share
$
—
$
—
Gain on extinguishment of debt
$
—
$
71,722
Gain on extinguishment of debt per
share
$
—
$
0.36
Non-cash default interest expense
$
(690
)
$
(542
)
Non-cash default interest expense per
share
$
—
$
—
Abandoned projects expense
$
(158
)
$
—
Abandoned projects expense per share
$
—
$
—
Interest capitalized
$
726
$
563
Interest capitalized per share
$
—
$
—
Litigation settlement, net of taxes
$
—
$
87,667
Litigation settlement, net of taxes per
share
$
—
$
0.44
As of March 31,
2020
2019
Straight-line rent receivable
$
55,845
$
53,870
Same-center Net Operating
Income
(Dollars in thousands)
Three Months Ended
March 31,
2020
2019
Net loss
$
(139,294
)
$
(46,809
)
Adjustments:
Depreciation and amortization
55,902
69,792
Depreciation and amortization from
unconsolidated affiliates
13,510
10,666
Noncontrolling interests' share of
depreciation and amortization in other
consolidated subsidiaries
(923
)
(2,157
)
Interest expense
46,992
53,998
Interest expense from unconsolidated
affiliates
7,676
6,570
Noncontrolling interests' share of
interest expense in other consolidated subsidiaries
(582
)
(1,766
)
Abandoned projects expense
158
—
Gain on sales of real estate assets
(140
)
(228
)
Gain on sales of real estate assets of
unconsolidated affiliates
—
(630
)
Gain on extinguishment of debt
—
(71,722
)
Loss on impairment
133,644
24,825
Litigation settlement
—
88,150
Income tax provision
526
139
Lease termination fees
(220
)
(1,017
)
Straight-line rent and above- and
below-market lease amortization
(1,795
)
(1,045
)
Net loss attributable to noncontrolling
interests in other consolidated subsidiaries
207
75
General and administrative expenses
17,836
22,007
Management fees and non-property level
revenues
(4,177
)
(2,666
)
Operating Partnership's share of
property NOI
129,320
148,182
Non-comparable NOI
(5,665
)
(12,720
)
Total same-center NOI (1)
$
123,655
$
135,462
Total same-center NOI percentage
change
(8.7
)%
Same-center Net Operating
Income
(Continued)
Three Months Ended
March 31,
2020
2019
Malls
$
109,388
$
120,967
Associated centers
7,460
8,127
Community centers
5,597
5,167
Offices and other
1,210
1,201
Total same-center NOI (1)
$
123,655
$
135,462
Percentage Change:
Malls
(9.6
)%
Associated centers
(8.2
)%
Community centers
8.3
%
Offices and other
0.7
%
Total same-center NOI (1)
(8.7
)%
(1)
CBL defines NOI as property
operating revenues (rental revenues, tenant reimbursements and
other income), less property operating expenses (property
operating, real estate taxes and maintenance and repairs).
Same-center NOI excludes lease termination income, straight-line
rent adjustments, amortization of above and below market lease
intangibles and write-offs of landlord inducement assets. We
include a property in our same-center pool when we own all or a
portion of the property as of March 31, 2020, 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, 2020.
New properties are excluded from same-center NOI, until they meet
these criteria. Properties excluded from the same-center pool that
would otherwise meet these criteria are properties which are under
major redevelopment or being considered for repositioning, where we
intend to renegotiate the terms of the debt secured by the related
property or return the property to the lender.
Company's Share of Consolidated and
Unconsolidated Debt
(Dollars in thousands)
As of March 31, 2020
Fixed Rate
Variable
Rate
Total per
Debt
Schedule
Unamortized
Deferred
Financing
Costs
Total
Consolidated debt
$
2,601,849
$
1,203,075
$
3,804,924
$
(15,232
)
$
3,789,692
Noncontrolling interests' share of
consolidated debt
(30,505
)
—
(30,505
)
304
(30,201
)
Company's share of unconsolidated
affiliates' debt
629,306
111,936
741,242
(2,774
)
738,468
Company's share of consolidated and
unconsolidated debt
$
3,200,650
$
1,315,011
$
4,515,661
$
(17,702
)
$
4,497,959
Weighted-average interest rate
5.06
%
3.87
%
4.72
%
As of March 31, 2019
Fixed Rate
Variable
Rate
Total per
Debt
Schedule
Unamortized
Deferred
Financing
Costs
Total
Consolidated debt
$
2,971,830
$
970,453
$
3,942,283
$
(20,083
)
$
3,922,200
Noncontrolling interests' share of
consolidated debt
(93,909
)
—
(93,909
)
775
(93,134
)
Company's share of unconsolidated
affiliates' debt
547,494
84,404
631,898
(2,529
)
629,369
Company's share of consolidated and
unconsolidated debt
$
3,425,415
$
1,054,857
$
4,480,272
$
(21,837
)
$
4,458,435
Weighted-average interest rate
5.16
%
4.78
%
5.07
%
Total Market Capitalization as of
March 31, 2020
(In thousands, except stock price)
Shares
Outstanding
Stock
Price (1)
Common stock and operating partnership
units
201,706
$
0.20
7.375% Series D Cumulative Redeemable
Preferred Stock
1,815
250.00
6.625% Series E Cumulative Redeemable
Preferred Stock
690
250.00
(1)
Stock price for common stock and
Operating Partnership units equals the closing price of the common
stock on March 31, 2020. 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,
Basic
Diluted
2020:
Weighted-average shares - EPS
179,133
179,133
Weighted-average Operating Partnership
units
22,125
22,125
Weighted-average shares - FFO
201,258
201,258
2019:
Weighted-average shares - EPS
173,252
173,252
Weighted-average Operating Partnership
units
26,758
26,758
Weighted-average shares - FFO
200,010
200,010
Consolidated Balance Sheets
(Unaudited; in thousands, except share
data)
As of
March 31, 2020
December 31, 2019
ASSETS
Real estate assets:
Land
$
718,547
$
730,218
Buildings and improvements
5,360,133
5,631,831
6,078,680
6,362,049
Accumulated depreciation
(2,218,254
)
(2,349,404
)
3,860,426
4,012,645
Developments in progress
31,009
49,351
Net investment in real estate assets
3,891,435
4,061,996
Cash and cash equivalents
159,117
32,816
Available-for-sale securities - at
amortized cost (fair value of $153,172 in 2020)
153,150
—
Receivables:
Tenant
72,157
75,252
Other
10,152
10,792
Mortgage and other notes receivable
3,523
4,662
Investments in unconsolidated
affiliates
299,797
307,354
Intangible lease assets and other
assets
131,984
129,474
$
4,721,315
$
4,622,346
LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS AND EQUITY
Mortgage and other indebtedness, net
$
3,789,692
$
3,527,015
Accounts payable and accrued
liabilities
205,470
231,306
Total liabilities
3,995,162
3,758,321
Commitments and contingencies
Redeemable noncontrolling interests
1,062
2,160
Shareholders' equity:
Preferred stock, $.01 par value,
15,000,000 shares authorized:
7.375% Series D Cumulative Redeemable
Preferred Stock, 1,815,000 shares
outstanding
18
18
6.625% Series E Cumulative Redeemable
Preferred Stock, 690,000 shares
outstanding
7
7
Common stock, $.01 par value, 350,000,000
shares authorized, 191,965,622 and
174,115,111 issued and outstanding in 2020
and 2019, respectively
1,920
1,741
Additional paid-in capital
1,977,891
1,965,897
Accumulated other comprehensive income
22
—
Dividends in excess of cumulative
earnings
(1,284,024
)
(1,161,351
)
Total shareholders' equity
695,834
806,312
Noncontrolling interests
29,257
55,553
Total equity
725,091
861,865
$
4,721,315
$
4,622,346
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200526005774/en/
Katie Reinsmidt, Executive Vice President - Chief Investment
Officer, 423.490.8301, katie.reinsmidt@cblproperties.com
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