Please replace the release with the revised version to correct
certain Q2 2020 financial information issued on August 6, 2020, at
4:15 p.m. ET. Please refer to Form 8-K/A furnished on August 18,
2020, for additional information.
The corrected release reads:
CBL PROPERTIES REPORTS RESULTS FOR SECOND
QUARTER 2020
CBL Properties (NYSE:CBL) announced results for the second
quarter ended June 30, 2020. 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 June
30,
Six Months Ended June
30,
2020
2019
%
2020
2019
%
Net loss attributable to common
shareholders per diluted share
$
(0.42
)
$
(0.20
)
(110.0
)%
$
(1.16
)
$
(0.49
)
(136.7
)%
Funds from Operations ("FFO") per diluted
share
$
(0.03
)
$
0.34
(108.8
)%
$
0.23
$
0.56
(58.9
)%
FFO, as adjusted, per diluted share
(1)
$
0.02
$
0.34
(94.1
)%
$
0.28
$
0.64
(56.3
)%
(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 9 of this news release.
KEY TAKEAWAYS:
- FFO per diluted share, as adjusted, was $0.02 for the second
quarter 2020, compared with $0.34 per share for the second quarter
2019. FFO per diluted share, as adjusted, was $0.28 for the six
months ended June 30, 2020, compared with $0.64 per share for the
prior year period.
- Major variances in second quarter 2020 FFO per share compared
with the prior year period included $0.24 per share of lower
property NOI, which includes an estimate for uncollectable revenues
and rent abatements; $0.02 per share higher net G&A expense
primarily related to $7.9 million ($0.04 per share) of debt
restructuring expense, partially offset by Company furloughs,
reductions in force and company-wide temporary salary reductions.
FFO per share for the second quarter included $2.5 million ($0.01
per share) related to rent abatements on past due rents and $41.5
million ($0.21 per share) in the estimate for uncollectable
revenues for past due rents related to tenants that are in
bankruptcy or struggling financially, primarily as a result of
mandated property closures. FFO was also impacted by a $0.08 full
valuation allowance established on the deferred tax asset during
the quarter.
- Total Portfolio same-center NOI declined 32.0% for the three
months ended June 30, 2020, and 20.4% for the six months ended June
30, 2020, as compared with the prior-year periods.
- Portfolio occupancy as of June 30, 2020, was 88.1%,
representing a 210-basis point decline compared with 90.2% as of
June 30, 2019. Same-center mall occupancy was 86.6% as of June 30,
2020, a 170-basis point decline compared with 88.3% as of June 30,
2019. An estimated 370-basis points of the decline in total mall
portfolio occupancy was due to store closures related to tenants in
bankruptcy.
- CBL’s portfolio is now fully operational with all properties,
except one, open for business. CBL continues to prioritize the
safety of its employees, retailers and shoppers by maintaining
strict safety protocols across its portfolio. Protocols are updated
as new guidance is issued by the CDC and local or state sources.
“With all but one of our properties and the vast majority of
retailers now open, we are seeing improved traffic levels,” said
Stephen Lebovitz, Chief Executive Officer. “While our properties
and our tenants have extensive safety protocols in place, shoppers
appear to be more deliberate in their visits, resulting in lower
traffic numbers compared to last year. However, retailers are
reporting higher conversion rates with many equaling or exceeding
pre-pandemic levels. In addition to traditional in-store shopping,
retailers have innovated by adding curbside pick-up, order-online
and pick-up in-store and other programs designed to ease the
shopping experience. These conveniences are an increasingly
important part of successful retailing.
“Our financial and operating results for the second quarter
reflect the temporary closure of the CBL portfolio for a
significant period due to government mandates. Revenues for the
quarter were impacted by a major increase in the estimate for
uncollectible revenues related to rents due from tenants that
recently filed for bankruptcy or are struggling financially, as
well as amounts that were abated as part of negotiations. Store
closures and rent loss from prior tenant bankruptcies and lower
percentage rent related to lower retail sales also impacted
revenues. We offset a portion of this decline through aggressive
actions to reduce costs both at the property and corporate levels,
including company-wide salary reductions, furloughs,
reductions-in-force and other expense reduction initiatives.
However, the pandemic has accelerated a number of tenant
bankruptcies, resulting in an expectation of additional store
closures and lost rent through the remainder of the year. As a
result of the difficulty in accurately predicting the impact to our
business, we expect our visibility over the next few quarters to
remain limited. Accordingly, we are continuing the suspension of
full-year guidance until there are signs of more stability in our
operating environment.
“Leasing activity for the quarter was muted as we shifted our
focus to negotiating with existing tenants. To date, we have
completed or are finalizing negotiations with retailers
representing the majority of second quarter rent. These agreements
generally include flexible terms on second quarter rent to certain
retailers that require assistance, such as rent deferrals, while at
the same time preserving current and future income to CBL. As we
complete these negotiations, rent collections have improved with
retailers paying all or a portion of past-due amounts as well as
paying current rents.
“While the events to date in 2020 have dramatically impacted our
business in the near-term, these events also underscore the
importance of our portfolio transformation and tenant
diversification strategy as well as the prudent actions we’ve taken
to preserve and strengthen our cash position. Most traditional
retailers have paused on new store plans until they can stabilize
their existing store base and have better clarity on the outlook.
However, a number of local and other users, primarily non-apparel,
are viewing this as an opportunity to identify attractive new
growth opportunities. Our leasing team is more creative than ever
in pursuing these leads to continue the all-important
diversification to our tenants and properties, and we are confident
that, over time, our revenues will stabilize due to these
efforts.
“Finally, while our corporate policy is to not comment on the
unfortunate rumors and speculation reported by the media, we want
to confirm that over the past few months we have been holding
constructive discussions with our lenders. In June, we deliberately
elected to withhold the interest payments on two issuances of
senior unsecured notes that were due as part of our discussions
with certain holders of our bonds as well as the lenders under our
credit facility. We first entered the 30-day grace periods provided
for in the indenture and subsequently entered into forbearance
agreements with certain holders of our notes and lenders under our
credit facility. On August 5th, we elected to make these payments,
which total $30.4 million and accordingly are current on all
unsecured debt service. Discussions are ongoing, and we are hopeful
that a positive and mutually beneficial outcome will be
reached.”
FINANCIAL RESULTS
Net loss attributable to common shareholders for the second
quarter 2020 was $81.5 million, or $0.42 per diluted share,
compared with a net loss of $35.4 million, or a loss of $0.20 per
diluted share, for the second quarter 2019. Net loss for the second
quarter 2020 was impacted by a $13.3 million loss on impairment of
real estate to write down the carrying value of Asheville Mall in
Asheville, NC, to the property’s estimated fair value. Net loss for
the second quarter 2020 also included establishing a full valuation
allowance of $15.8 million on the deferred tax asset.
Net loss attributable to common shareholders for the six months
ended June 30, 2020, was $215.3 million, or $1.16 per diluted
share, compared with a net loss of $85.6 million, or a loss of
$0.49 per diluted share, for the six months ended 2019.
FFO allocable to common shareholders, as adjusted, for the
second quarter 2020 was $4.7 million, or $0.02 per diluted share,
compared with $59.4 million, or $0.34 per diluted share, for the
second quarter 2019. FFO allocable to the Operating Partnership
common unitholders, as adjusted, for the second quarter 2020 was
$4.9 million compared with $68.5 million for the second quarter
2019.
FFO allocable to common shareholders, as adjusted, for the six
months ended June 30, 2020 was $52.0 million or $0.28 per diluted
share, compared with $111.8 million or $0.64 per diluted share, for
the six months ended June 30, 2019. FFO allocable to the Operating
Partnership common unitholders, as adjusted, for the six months
ended June 30, 2020, was $56.5 million compared with $129.1 million
for the six months ended June 30, 2019.
Percentage change in same-center Net
Operating Income (“NOI”) (1):
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
Portfolio same-center NOI
(32.0
)%
(20.4
)%
Mall same-center NOI
(33.7
)%
(21.6
)%
(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 June 30, 2020, include:
- Same-center NOI declined $42.7 million, due to a $53.4 million
decrease in revenues offset by a $10.7 million decline in operating
expenses.
- Rental revenues declined $50.5 million, including a $46.9
million decline in minimum and other rents. The decline in minimum
and other rents was substantially related to $37.8 million in
estimated uncollectible revenues related to tenants in bankruptcy
or struggling financially, and $2.4 million related to rent
abatements. Rental revenues also include a $1.2 million decline in
tenant reimbursements and a $2.2 million decline in percentage
rents.
- Property operating expenses declined $6.5 million compared with
the prior year. Maintenance and repair expenses improved $4.5
million. Real estate tax expenses increased $0.1 million.
COVID-19 UPDATE/RENT COLLECTION UPDATE
The COVID-19 pandemic resulted in closure of the majority of
CBL’s owned and managed portfolio in response to government
mandates beginning in March. To date, all but one of CBL’s owned
and managed mall properties have re-opened and CBL has implemented
strict procedures and guidelines for our employees, tenants and
property visitors based on CDC and other health agency
recommendations. Our properties continue to update these policies
and procedures, following any new mandates and regulations, as
required.
The mandated closures resulted in nearly all our tenants closing
for a period of time and/or shortening operating hours. As a
result, the Company has experienced an increased level of requests
for rent deferrals and abatements as well as defaults on rent
obligations. While, in general, CBL believes that tenants have a
clear contractual obligation to pay rent, CBL has been working with
its tenants to address rent deferral requests. Based on executed or
in process agreements with our top 20 tenants as a percentage of
total revenues, excluding tenants in bankruptcy, CBL anticipates
collecting over 61% of related rent for the second quarter, with
the remainder expected to be deferred or abated. CBL remains in
negotiations with tenants and is unable to predict the outcome of
those discussions.
As the Company finalizes negotiations, rent collections as a
percentage of billed cash-based rents have increased with certain
past-due amounts being paid, resulting in an overall collection
rate for April through July of over 54%. July rent collections are
currently estimated at 49% of billed rents; however, the Company
anticipates an improvement in the collection rate as it finalizes
negotiations with retailers and additional past-due amounts are
paid.
EXPENSE REDUCTION AND LIQUIDITY
As previously announced, CBL has implemented comprehensive
programs to halt all non-essential expenditures, reduce operating
and overhead expenses and to reduce, defer or suspend capital
expenditures, including redevelopment investments. In March, CBL
completed a $280 million aggregate draw on its line of credit,
which represented substantially all of the remaining available
balance. As of June 30, 2020, the company had $275.8 million
available in cash and marketable securities.
PORTFOLIO OPERATIONAL RESULTS
Occupancy(1):
As of June 30,
2020
2019
Total portfolio
88.1
%
90.2
%
Malls:
Total Mall portfolio
86.6
%
88.1
%
Same-center Malls
86.6
%
88.3
%
Stabilized Malls
86.8
%
88.3
%
Non-stabilized Malls (2)
79.2
%
78.0
%
Associated centers
90.5
%
96.3
%
Community centers
95.2
%
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 June
30,
Six Months Ended June
30,
2020
2019
Stabilized Malls
0.8
%
(6.4
)%
New leases
20.9
%
30.5
%
Renewal leases
(0.7
)%
(10.0
)%
Same-Center Sales Per Square Foot for Mall Tenants 10,000
Square Feet or Less:
Due to the temporary mall and store closures that occurred
during the second quarter 2020, the majority of CBL’s tenants did
not report sales for the full reporting period. As a result, CBL is
not able to provide a complete measure of sales per square foot for
the second quarter 2020 or trailing twelve-month period.
FINANCING ACTIVITY AND LENDER DISCUSSIONS
After discussions with each respective lender for the loans
separately secured by Park Plaza in Little Rock, AR ($77.6
million), Hickory Point in Forsyth, IL ($27.4 million), EastGate
Mall in Cincinnati, OH ($31.9 million) and Burnsville Center in
Minneapolis, MN ($64.5 million), the Company anticipates
cooperating with foreclosure or conveyance proceedings.
The Company remains in discussions with the lender for a
potential modification and extension of the loan secured by
Greenbrier Mall in Chesapeake, VA ($64.5 million) and recently
entered into discussions with the lenders for the loans secured by
Asheville Mall in Ashville, NC ($63.0 million) and Oak Park Mall in
Overland Park, KS ($131.5 million at CBL’s share). These
discussions are ongoing and CBL is not able to predict the outcome
at this time.
As previously announced, CBL elected to not pay the interest
payments due on June 1, 2020 and June 15, 2020, for the 5.25%
senior unsecured notes due 2023 and the 5.95% senior unsecured
notes due 2026, respectively (together, “the Notes”). CBL entered
into forbearance agreements with certain beneficial holders in
excess of 50% of the aggregate principal amount of the Notes as
well as a forbearance agreement with lenders under the Company’s
credit facility in order to continue discussions with both parties.
On August 5, 2020, CBL elected to make the $30.4 million in
interest payments and is now current on all unsecured debt
service.
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 Q2 2020, which can be found in the Invest
– Financial Reports section of CBL’s website at
cblproperties.com.
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 9 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 June
30,
Six Months Ended June
30,
2020
2019
2020
2019
REVENUES:
Rental revenues
$
120,222
$
185,393
$
281,395
$
376,373
Management, development and leasing
fees
1,055
2,586
3,147
5,109
Other
2,934
5,398
7,243
9,925
Total revenues
124,211
193,377
291,785
391,407
OPERATING EXPENSES:
Property operating
(16,906
)
(26,532
)
(42,615
)
(55,512
)
Depreciation and amortization
(52,663
)
(64,478
)
(108,565
)
(134,270
)
Real estate taxes
(17,837
)
(19,148
)
(36,285
)
(39,067
)
Maintenance and repairs
(6,042
)
(11,298
)
(17,250
)
(24,074
)
General and administrative
(18,727
)
(14,427
)
(36,563
)
(36,434
)
Loss on impairment
(13,274
)
(41,608
)
(146,918
)
(66,433
)
Litigation settlement
—
—
—
(88,150
)
Other
(242
)
(34
)
(400
)
(34
)
Total operating expenses
(125,691
)
(177,525
)
(388,596
)
(443,974
)
OTHER INCOME (EXPENSES):
Interest and other income
891
356
3,288
845
Interest expense
(52,631
)
(52,482
)
(99,623
)
(106,480
)
Gain on extinguishment of debt
—
—
—
71,722
Gain on sales of real estate assets
2,623
5,527
2,763
5,755
Income tax provision
(16,117
)
(813
)
(16,643
)
(952
)
Equity in earnings (losses) of
unconsolidated affiliates
(6,079
)
1,872
(5,061
)
5,180
Total other expenses
(71,313
)
(45,540
)
(115,276
)
(23,930
)
Net loss
(72,793
)
(29,688
)
(212,087
)
(76,497
)
Net loss attributable to noncontrolling
interests in:
Operating Partnership
2,077
5,454
18,491
13,212
Other consolidated subsidiaries
487
57
694
132
Net loss attributable to the
Company
(70,229
)
(24,177
)
(192,902
)
(63,153
)
Preferred dividends declared
—
(11,223
)
—
(22,446
)
Preferred dividends undeclared
(11,223
)
—
(22,446
)
—
Net loss attributable to common
shareholders
$
(81,452
)
$
(35,400
)
$
(215,348
)
$
(85,599
)
Basic and diluted per share data
attributable to common
shareholders:
Net loss attributable to common
shareholders
$
(0.42
)
$
(0.20
)
$
(1.16
)
$
(0.49
)
Weighted-average common and potential
dilutive common shares
outstanding
191,962
173,473
185,547
173,363
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 June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Net loss attributable to common
shareholders
$
(81,452
)
$
(35,400
)
$
(215,348
)
$
(85,599
)
Noncontrolling interest in loss of
Operating Partnership
(2,077
)
(5,454
)
(18,491
)
(13,212
)
Depreciation and amortization expense
of:
Consolidated properties
52,663
64,478
108,565
134,270
Unconsolidated affiliates
14,020
11,462
27,530
22,128
Non-real estate assets
(812
)
(902
)
(1,729
)
(1,799
)
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(788
)
(2,648
)
(1,711
)
(4,805
)
Loss on impairment
13,274
41,608
146,918
66,433
(Gain) Loss on depreciable property
—
(4,599
)
25
(4,841
)
FFO allocable to Operating Partnership
common unitholders
(5,172
)
68,545
45,759
112,575
Debt restructuring expenses (1)
7,857
—
7,857
—
Litigation settlement, net of taxes
(2)
—
—
—
87,667
Non-cash default interest expense (3)
2,203
—
2,893
542
Gain on extinguishment of debt (4)
—
—
—
(71,722
)
FFO allocable to Operating Partnership
common unitholders,
as adjusted
$
4,888
$
68,545
$
56,509
$
129,062
FFO per diluted share
$
(0.03
)
$
0.34
$
0.23
$
0.56
FFO, as adjusted, per diluted
share
$
0.02
$
0.34
$
0.28
$
0.64
Weighted-average common and potential
dilutive common shares
outstanding with Operating Partnership
units fully converted
201,702
200,231
201,480
200,122
(1)
Represents professional fees related to
the Company's negotiations with the administrative agent and
lenders under the secured credit facility and certain holders of
the Company's senior unsecured notes regarding a restructure of
such indebtedness.
(2)
The six months ended June 30, 2019 is
comprised of the accrued maximum expense related to the proposed
settlement of a class action lawsuit.
(3)
The six months ended June 30, 2020
includes default interest expense related to Greenbrier Mall,
Hickory Point Mall, Eastgate Mall, Asheville Mall, Burnsville
Center and Park Plaza Mall. The six months ended June 30, 2019
includes default interest expense related to Acadiana Mall and Cary
Towne Center.
(4)
The six months ended June 30, 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 June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Diluted EPS attributable to common
shareholders
$
(0.42
)
$
(0.20
)
$
(1.16
)
$
(0.49
)
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
0.32
0.36
0.66
0.75
Loss on impairment
0.07
0.20
0.73
0.32
Gain on depreciable property
—
(0.02
)
—
(0.02
)
FFO per diluted share
$
(0.03
)
$
0.34
$
0.23
$
0.56
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 June
30,
Six Months Ended June
30,
2020
2019
2020
2019
FFO allocable to Operating Partnership
common unitholders
$
(5,172
)
$
68,545
$
45,759
$
112,575
Percentage allocable to common
shareholders (1)
95.17
%
86.64
%
92.09
%
86.63
%
FFO allocable to common
shareholders
$
(4,922
)
$
59,387
$
42,139
$
97,524
FFO allocable to Operating Partnership
common unitholders, as
adjusted
$
4,888
$
68,545
$
56,509
$
129,062
Percentage allocable to common
shareholders (1)
95.17
%
86.64
%
92.09
%
86.63
%
FFO allocable to common shareholders,
as adjusted
$
4,652
$
59,387
$
52,039
$
111,806
(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 June
30,
Six Months Ended June
30,
2020
2019
2020
2019
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees
$
1,433
$
1,073
$
1,653
$
2,090
Lease termination fees per share
$
0.01
$
0.01
$
0.01
$
0.01
Straight-line rental income
$
27
$
717
$
919
$
954
Straight-line rental income per share
$
—
$
—
$
—
$
—
Gains on outparcel sales
$
2,623
$
315
$
2,788
$
933
Gains on outparcel sales per share
$
0.01
$
—
$
0.01
$
—
Net amortization of acquired above- and
below-market leases
$
209
$
691
$
1,112
$
1,499
Net amortization of acquired above- and
below-market leases per share
$
—
$
—
$
0.01
$
0.01
Net amortization of debt premiums and
discounts
$
344
$
325
$
687
$
649
Net amortization of debt premiums and
discounts per share
$
—
$
—
$
—
$
—
Income tax provision
$
(16,117
)
$
(813
)
$
(16,643
)
$
(952
)
Income tax provision per share
$
(0.08
)
$
—
$
(0.08
)
$
—
Gain on extinguishment of debt
$
—
$
—
$
—
$
71,722
Gain on extinguishment of debt per
share
$
—
$
—
$
—
$
0.36
Non-cash default interest expense
$
(2,203
)
$
—
$
(2,893
)
$
(542
)
Non-cash default interest expense per
share
$
(0.01
)
$
—
$
(0.01
)
$
—
Abandoned projects expense
$
(242
)
$
(34
)
$
(400
)
$
(34
)
Abandoned projects expense per share
$
—
$
—
$
—
$
—
Interest capitalized
$
366
$
619
$
1,092
$
1,182
Interest capitalized per share
$
—
$
—
$
0.01
$
0.01
Litigation settlement, net of taxes
$
—
$
—
$
—
$
(87,667
)
Litigation settlement, net of taxes per
share
$
—
$
—
$
—
$
(0.44
)
Estimate of uncollectible revenues
$
(41,484
)
$
(103
)
$
(44,623
)
$
(1,783
)
Estimate of uncollectible revenues, per
share
$
(0.21
)
$
—
$
(0.22
)
$
(0.01
)
As of June 30,
2020
2019
Straight-line rent receivable
$
55,930
$
54,494
Same-center Net Operating
Income
(Dollars in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Net loss
$
(72,793
)
$
(29,688
)
$
(212,087
)
$
(76,497
)
Adjustments:
Depreciation and amortization
52,663
64,478
108,565
134,270
Depreciation and amortization from
unconsolidated affiliates
14,020
11,462
27,530
22,128
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(788
)
(2,648
)
(1,711
)
(4,805
)
Interest expense
52,631
52,482
99,623
106,480
Interest expense from unconsolidated
affiliates
7,679
6,586
15,355
13,156
Noncontrolling interests' share of
interest expense in other consolidated subsidiaries
(574
)
(1,717
)
(1,156
)
(3,483
)
Abandoned projects expense
242
34
400
34
Gain on sales of real estate assets
(2,623
)
(5,527
)
(2,763
)
(5,755
)
Gain on sales of real estate assets of
unconsolidated affiliates
—
3
—
(627
)
Gain on extinguishment of debt
—
—
—
(71,722
)
Loss on impairment
13,274
41,608
146,918
66,433
Litigation settlement
—
—
—
88,150
Income tax provision
16,117
813
16,643
952
Lease termination fees
(1,433
)
(1,073
)
(1,653
)
(2,090
)
Straight-line rent and above- and
below-market lease amortization
(236
)
(1,408
)
(2,031
)
(2,453
)
Net loss attributable to noncontrolling
interests in other consolidated subsidiaries
487
57
694
132
General and administrative expenses
18,727
14,427
36,563
36,434
Management fees and non-property level
revenues
(1,142
)
(4,118
)
(5,320
)
(6,784
)
Operating Partnership's share of
property NOI
96,251
145,771
225,570
293,953
Non-comparable NOI
(5,523
)
(12,336
)
(13,222
)
(27,338
)
Total same-center NOI (1)
$
90,728
$
133,435
$
212,348
$
266,615
Total same-center NOI percentage
change
(32.0
)%
(20.4
)%
Same-center Net Operating
Income
(Continued)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Malls
$
78,660
$
118,657
$
186,013
$
237,342
Associated centers
6,316
8,166
13,776
16,293
Community centers
4,508
5,595
10,105
10,762
Offices and other
1,244
1,017
2,454
2,218
Total same-center NOI (1)
$
90,728
$
133,435
$
212,348
$
266,615
Percentage Change:
Malls
(33.7
)%
(21.6
)%
Associated centers
(22.7
)%
(15.4
)%
Community centers
(19.4
)%
(6.1
)%
Offices and other
22.3
%
10.6
%
Total same-center NOI (1)
(32.0
)%
(20.4
)%
(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 June 30,
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 June 30, 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 June 30, 2020
Fixed Rate
Variable Rate
Total per Debt
Schedule
Unamortized Deferred Financing
Costs
Total
Consolidated debt
$
2,596,241
$
1,192,140
$
3,788,381
$
(14,347
)
$
3,774,034
Noncontrolling interests' share of
consolidated debt
(30,377
)
—
(30,377
)
291
(30,086
)
Company's share of unconsolidated
affiliates' debt
628,262
117,715
745,977
(2,769
)
743,208
Company's share of consolidated and
unconsolidated debt
$
3,194,126
$
1,309,855
$
4,503,981
$
(16,825
)
$
4,487,156
Weighted-average interest rate
5.07
%
2.49
%
4.32
%
As of June 30, 2019
Fixed Rate
Variable Rate
Total per Debt
Schedule
Unamortized Deferred Financing
Costs
Total
Consolidated debt
$
2,946,440
$
938,989
$
3,885,429
$
(19,490
)
$
3,865,939
Noncontrolling interests' share of
consolidated debt
(93,451
)
—
(93,451
)
747
(92,704
)
Company's share of unconsolidated
affiliates' debt
544,829
79,251
624,080
(2,360
)
621,720
Company's share of consolidated and
unconsolidated debt
$
3,397,818
$
1,018,240
$
4,416,058
$
(21,103
)
$
4,394,955
Weighted-average interest rate
5.10
%
4.73
%
5.01
%
Total Market Capitalization as of
June 30, 2020
(In thousands, except stock price)
Shares Outstanding
Stock Price (1)
Common stock and operating partnership
units
201,691
$
0.27
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
June 30, 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 June
30,
Six Months Ended June
30,
Basic
Diluted
Basic
Diluted
2020:
Weighted-average shares - EPS
191,962
191,962
185,547
185,547
Weighted-average Operating Partnership
units
9,740
9,740
15,933
15,933
Weighted-average shares - FFO
201,702
201,702
201,480
201,480
2019:
Weighted-average shares - EPS
173,473
173,473
173,363
173,363
Weighted-average Operating Partnership
units
26,758
26,758
26,759
26,759
Weighted-average shares - FFO
200,231
200,231
200,122
200,122
Consolidated Balance Sheets
(Unaudited; in thousands, except share
data)
As of
June 30, 2020
December 31, 2019
ASSETS
Real estate assets:
Land
$
719,497
$
730,218
Buildings and improvements
5,285,259
5,631,831
6,004,756
6,362,049
Accumulated depreciation
(2,199,622
)
(2,349,404
)
3,805,134
4,012,645
Developments in progress
30,600
49,351
Net investment in real estate assets
3,835,734
4,061,996
Cash and cash equivalents
123,388
32,816
Available-for-sale securities - at fair
value (amortized cost of $152,460 in 2020)
152,418
—
Receivables:
Tenant
125,930
75,252
Other
5,457
10,792
Mortgage and other notes receivable
2,729
4,662
Investments in unconsolidated
affiliates
301,148
307,354
Intangible lease assets and other
assets
108,355
129,474
$
4,655,159
$
4,622,346
LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS AND EQUITY
Mortgage and other indebtedness, net
$
3,774,034
$
3,527,015
Accounts payable and accrued
liabilities
227,147
231,306
Total liabilities
4,001,181
3,758,321
Commitments and contingencies
Redeemable noncontrolling interests
525
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, 191,951,454 and
174,115,111 issued and outstanding in 2020
and 2019, respectively
1,920
1,741
Additional paid-in capital
1,982,454
1,965,897
Accumulated other comprehensive loss
(42
)
—
Dividends in excess of cumulative
earnings
(1,354,253
)
(1,161,351
)
Total shareholders' equity
630,104
806,312
Noncontrolling interests
23,349
55,553
Total equity
653,453
861,865
$
4,655,159
$
4,622,346
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005928/en/
Katie Reinsmidt, Executive Vice President - Chief
Investment Officer, 423.490.8301,
katie.reinsmidt@cblproperties.com
CBL and Associates Prope... (NYSE:CBL)
Historical Stock Chart
From Aug 2024 to Sep 2024
CBL and Associates Prope... (NYSE:CBL)
Historical Stock Chart
From Sep 2023 to Sep 2024