Third Quarter Results Demonstrate Significant
Improvement in Operations
CBL Properties (NYSE: CBL) announced results for the third
quarter ended September 30, 2021. 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 September
30,
Nine Months Ended September
30,
2021
2020
%
2021
2020
%
Net loss attributable to common
shareholders per diluted share
$
(0.21
)
$
(0.28
)
25.0
%
$
(0.39
)
$
(1.43
)
72.7
%
Funds from Operations ("FFO") per diluted
share
$
0.37
$
0.06
516.7
%
$
1.07
$
0.28
282.1
%
FFO, as adjusted, per diluted share
(1)
$
0.47
$
0.04
1,075.0
%
$
1.21
$
0.32
278.1
%
(1)
For a reconciliation of FFO to FFO, as
adjusted, for the periods presented, please refer to the footnotes
to the Company’s reconciliation of net loss attributable to common
shareholders to FFO allocable to Operating Partnership common
unitholders on page 8 of this news release.
KEY TAKEAWAYS:
- On November 1, CBL successfully completed its Chapter 11
reorganization. CBL emerged with a significantly improved capital
structure, greater financial flexibility and a lowered cost of
capital, positioning the company to pursue future growth
opportunities.
- Following emergence from Bankruptcy on November 1, 2021, and
$60 million redemption of 10% Notes, on a consolidated basis, the
company had approximately $260 million available in unrestricted
cash and marketable securities.
- Total portfolio same-center Net Operating Income (“NOI”)
increased 26.5% for the three months ended September 30, 2021.
Total portfolio same-center NOI for the nine months ended September
30, 2021, increased 6.7%.
- Sales for the third quarter and the nine-months ended September
30, 2021, increased 17% as compared with the third quarter and
nine-months ended September 30, 2019.
- Portfolio occupancy as of September 30, 2021, was 88.4%,
representing a 140-basis point improvement from the sequential
quarter and a 180-basis point improvement compared with 86.6% as of
September 30, 2020. Same-center mall occupancy was 86.3% as of
September 30, 2021, representing a 110-basis point increase
sequentially and an 80-basis point improvement compared with 85.5%
as of September 30, 2020.
- FFO, as adjusted, per diluted share, was $0.47 for the third
quarter 2021, compared with $0.04 per share for the third quarter
2020. The increase in FFO, as adjusted, per diluted share, as
compared with the prior year period is principally a result of
$0.21 per diluted share lower net interest expense and an $0.18 per
diluted share positive variance in the estimate for uncollectable
revenues, rent abatements and write-offs for past due rents. The
positive variance in the estimate for uncollectable revenues,
abatements and write-offs for past due rents was primarily a result
of the tenant accommodations that were made in the prior-year
period due to the impact of the pandemic. The third quarter 2021
also benefited from a $0.06 per diluted share positive variance
from undeclared preferred dividends accrued in the prior year
period.
“We are at an exciting time for CBL. Fresh from our successful
emergence from bankruptcy, the entire CBL organization is energized
to execute on our strategy and take advantage of our significantly
enhanced balance sheet and free cash flow,” said Stephen Lebovitz,
Chief Executive Officer. “We have seen an improving operating
environment in 2021 and it is the ideal time to focus on new
opportunities, including refinancing our high-interest rate secured
notes and property-level loans, creating value across our portfolio
from available land and new partnerships, and other growth
strategies. We are primed and ready to bring to life the vision we
have for the new CBL.
“Our portfolio performance in the third quarter was above
expectations, as healthy traffic and sales growth fueled a strong
rebound. Improvements in the leasing environment, including
increasing tenant demand and lower bankruptcy-related store
closures, drove healthy occupancy growth as new leases signed
year-to-date took occupancy. It is worth noting that we achieved
our first quarter of year-over-year occupancy growth since the
first quarter of 2019. Lease spreads also improved from prior
quarters. Robust sales by retailers are leading to higher levels of
percentage rent, one driver of better NOI results. We have
successfully held expenses in check despite inflation
pressures.
“As we say on the home page of our new website, which we debuted
last week in conjunction with our emergence, we are redefining what
the mall means to our communities by combining retail, dining,
entertainment, and other mixed uses. We made progress this quarter
in bringing this vision to life through anchor redevelopments,
adding new uses that drive increased traffic and new customers.
Highly productive Scheel’s All Sports commenced construction on
their newly expanded store at Dakota Square, following their
acquisition of the former Sears last month. Entertainment user,
Main Event, is under construction in a portion of the former Sears
at Sunrise Mall. We completed the sale of a former Sears at Harford
Mall, which will be redeveloped into a future grocery store, and we
sold a parcel of excess parking at Monroeville Mall for development
into a future VA Center. At York Galleria, we recently opened
Hollywood Casino and Life Storage is developing a new facility in a
former anchor space. As outlined in our department store update in
the supplemental, we are actively in negotiation or finalizing
deals that will continue this significant progress.
“Take a fresh look at CBL. Our new capital structure allows us
to pursue opportunities both within our portfolio and externally to
create value for stakeholders. We have a new, highly engaged Board
that brings fresh perspective. And the CBL management team is more
committed than ever to the success and growth of the company.”
FINANCIAL RESULTS
Net loss attributable to common shareholders for the three
months ended September 30, 2021 was $41.7 million, or a loss of
$0.21 per diluted share, compared with net loss of $54.1 million,
or a loss of $0.28 per diluted share, for the three months ended
September 30, 2020. Net loss for the third quarter 2021 was also
impacted by a $63.2 million loss on impairment of real estate to
write down the carrying value of Parkdale Mall and Crossing, Laurel
Park and a land parcel to their estimated fair values.
Net loss attributable to common shareholders for the nine months
ended September 30, 2021 was $77.4 million, or a loss of $0.39 per
diluted share, compared with net loss of $269.4 million, or a loss
of $1.43 per diluted share, for the nine months ended September 30,
2020.
FFO, as adjusted, allocable to common shareholders, for the
three months ended September 30, 2021 was $92.9 million, or $0.47
per diluted share, compared with $8.6 million, or $0.04 per diluted
share, for the three months ended September 30, 2020. FFO, as
adjusted, allocable to the Operating Partnership common
unitholders, for the three months ended September 30, 2021 was
$95.3 million compared with $9.0 million for the three months ended
September 30, 2020.
FFO, as adjusted, allocable to common shareholders, for the nine
months ended September 30, 2021 was $237.3 million, or $1.21 per
diluted share, compared with $61.1 million, or $0.32 per diluted
share, for the nine months ended September 30, 2020. FFO, as
adjusted, allocable to the Operating Partnership common
unitholders, for the nine months ended September 30, 2021 was
$243.5 million compared with $65.5 million for the nine months
ended September 30, 2020.
Percentage change in same-center Net Operating Income
(“NOI”) (1):
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2021
Portfolio same-center NOI
26.5%
6.7%
Mall same-center NOI
29.9%
7.2%
(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 September 30, 2021, include:
- Same-center NOI increased $23.5 million, due to a $27.4 million
increase in total revenues partially offset by a $3.9 million
increase in operating expenses.
- Rental revenues increased $26.8 million, including a $25.0
million increase in minimum and other rents, a $3.1 million
increase in percentage rents and a $1.3 million decline in tenant
reimbursements. The increase in rental revenues for the quarter was
primarily due to the $26.4 million positive variance from
uncollectable revenues and abatements. The total estimate for
uncollectable revenues and abatements for the third quarter 2021
was a net reversal of $0.3 million compared with a total write-off
of $26.1 million in the prior year period.
- Property operating expenses increased $4.9 million compared
with the prior year, primarily due to the return to full operations
following the reopening of CBL’s portfolio. Maintenance and repair
expenses increased $1.6 million. Real estate tax expenses declined
by $2.2 million, partially offsetting the above increases.
COVID-19 RENT COLLECTION UPDATE
The Company has collected 93% of related gross rents for the
period April 2020 through September 2021. As of October 2021, CBL
had deferred approximately $45.8 million in rents. Of the
approximately 72% of the deferred amounts billed to-date, CBL has
collected nearly 97%.
LIQUIDITY
Following emergence from Bankruptcy on November 1, 2021, and $60
million redemption of 10% Notes, on a consolidated basis, the
company had approximately $260 million available in unrestricted
cash and marketable securities.
PORTFOLIO OPERATIONAL RESULTS Occupancy(1):
As of September 30,
2021
2020
Total portfolio
88.4%
86.6%
Malls:
Total Mall portfolio
86.3%
85.0%
Same-center Malls
86.3%
85.5%
Stabilized Malls
86.3%
85.4%
Associated centers
94.8%
89.1%
Community centers
94.5%
94.4%
(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.
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
September 30,
Nine Months Ended
September 30,
2021
2021
Stabilized Malls
(12.2)%
(17.5)%
New leases
(20.3)%
(18.4)%
Renewal leases
(10.4)%
(17.3)%
Same-Center Sales Per Square Foot for Mall Tenants 10,000
Square Feet or Less:
Sales for the third quarter 2021 increased 17% as compared with
the third quarter 2019, with all but two of CBL’s 54 reporting
malls demonstrating an increase over the comparable period. For the
nine months ended September 30, 2021, sales increased 17% as
compared with the nine months ended September 30, 2019. Due to the
temporary mall and store closures that occurred in 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 for the trailing twelve-month period.
FINANCING ACTIVITY AND LENDER DISCUSSIONS
On November 1, 2021, pursuant to the Chapter 11 Plan of
Reorganization, the Company issued $455 million of 10% senior
secured notes (the “10% Notes”) and $150 million of 7% convertible
senior secured notes (the “7% Notes”), including $50 million in
notes issued in exchange for new money. CBL also entered into a new
$883.7 million term loan on November 1, 2021, which replaced the
Company’s previous credit facility.
On November 8, 2021, the Company completed the redemption of $60
million of 10% Notes. Following the redemption, the Company has
$395 million in 10% Notes outstanding.
CBL anticipates cooperating with conveyance or foreclosure
proceedings for EastGate Mall in Cincinnati, OH ($30.1 million),
Asheville Mall in Asheville, NC ($62.1 million) and Parkdale Mall
in Beaumont, TX ($70.5 million). Asheville Mall was deconsolidated
during the first quarter 2021. CBL no longer controls the property
following its transfer to receivership. EastGate Mall and Parkdale
Mall are expected to be transferred into receivership in the near
future. In October, the foreclosure of Park Plaza in Little Rock,
AR ($76.8 million) was completed.
Subsequent to September 30, 2021, Brookfield Square Anchor S,
LLC filed for bankruptcy, which is the borrower under the $27.5
million recourse term loan. The Company has entered in a
confidential mediation under bankruptcy court order with the
lender.
CBL is also in discussions with the lender on modification of
the $36.0 million recourse loan secured by The Outlet Shoppes at
Gettysburg in Gettysburg, PA, which is in default.
CBL is in the process of negotiating extensions and
modifications of the remaining property level mortgage loans with
maturities in 2021 and 2022.
RESTRUCTURING UPDATE
On November 1, 2021, CBL emerged from bankruptcy and entered a
notice of Effective Date for the Company’s Plan of Reorganization.
The notice and other documents related to the proceedings, can be
found at https://dm.epiq11.com/case/cblproperties/info.
DISPOSITIONS
In July 2021, CBL completed the sale of the former Sears
location at Dakota Square Mall in Minot, ND to Scheel’s for $4.0
million. Scheel’s plans to expand the former Sears building to
approximately 100,000-square-feet to accommodate their new
prototype and relocate from their existing location in the mall to
the new store. Additionally, in July, CBL sold a former department
store in Cincinnati, Ohio for $5.5 million, for redevelopment into
a future grocer.
In September, CBL completed the sale of a parcel of excess
parking at Monroeville Mall in Monroeville, PA, to a developer for
the construction of a future VA center. The gross sales price was
$3.5 million.
In October 2021, CBL completed the sale of a former Sears store
at Harford Mall in Bel Air, MD, for $5.0 million and the sale of 62
residential units at Pearland Town Center in Houston, TX, for $8.75
million.
Year-to-date, CBL has generated $35.3 million in gross proceeds
from asset sales.
DEVELOPMENT AND LEASING PROGRESS
During the third quarter, Hollywood Casino at York Galleria in
York, PA held its grand opening. Hobby Lobby at West Towne Mall in
Madison, WI, celebrated its grand opening recently and Rooms to Go
at Cross Creek in Fayetteville, NC will open later this year.
Construction recently commenced on a new LifeStorage facility at
York Galleria in York, PA in a former anchor location.
Entertainment user, Main Event, is under construction in a portion
of the former Sears at Sunrise Mall in Brownsville, TX. Scheel’s
All Sports commenced construction on an expanded store at Dakota
Square in Minot, ND, following their acquisition of the former
Sears last month.
Additional offerings, including new restaurants, fitness, hotel
and other uses are planned or under negotiation and will be
announced as details are finalized.
Detailed project information is available in CBL’s Financial
Supplement for Q3 2021, 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
104 properties totaling 63.9 million square feet across 24 states,
including 62 high-quality enclosed, outlet and open-air retail
centers and five 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.
CBL & Associates
Properties, Inc.
Supplemental Financial and
Operating Information
For the Three and Nine Months
Ended September 30, 2021 and 2020
Consolidated Statements of Operations (Unaudited; in
thousands, except per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
REVENUES:
Rental revenues
$
145,539
$
124,081
$
405,030
$
405,476
Management, development and leasing
fees
1,780
2,104
4,888
5,251
Other
3,056
3,712
10,202
10,955
Total revenues
150,375
129,897
420,120
421,682
EXPENSES:
Property operating
(23,818
)
(20,396
)
(65,243
)
(63,011
)
Depreciation and amortization
(46,479
)
(53,477
)
(142,090
)
(162,042
)
Real estate taxes
(13,957
)
(17,215
)
(45,618
)
(53,500
)
Maintenance and repairs
(9,482
)
(8,425
)
(29,047
)
(25,675
)
General and administrative
(13,502
)
(25,497
)
(37,383
)
(62,060
)
Loss on impairment
(63,160
)
(46
)
(120,342
)
(146,964
)
Litigation settlement
89
2,480
890
2,480
Other
(104
)
—
(391
)
(400
)
Total expenses
(170,413
)
(122,576
)
(439,224
)
(511,172
)
OTHER INCOME (EXPENSES):
Interest and other income
510
1,975
2,038
5,263
Interest expense (unrecognized contractual
interest expense was $45,344 and $135,162 for the three and nine
months ended September 30, 2021, respectively)
(19,039
)
(61,137
)
(65,468
)
(160,760
)
Gain on extinguishment of debt
—
15,407
—
15,407
Gain on deconsolidation
—
—
55,131
—
Gain (loss) on sales of real estate
assets
8,684
(55
)
8,492
2,708
Reorganization items
(12,008
)
—
(52,014
)
—
Income tax benefit (provision)
1,234
(546
)
(222
)
(17,189
)
Equity in losses of unconsolidated
affiliates
(2,224
)
(7,389
)
(9,575
)
(12,450
)
Total other expenses
(22,843
)
(51,745
)
(61,618
)
(167,021
)
Net loss
(42,881
)
(44,424
)
(80,722
)
(256,511
)
Net loss attributable to noncontrolling
interests in:
Operating Partnership
1,085
609
2,013
19,100
Other consolidated subsidiaries
76
937
1,344
1,631
Net loss attributable to the
Company
(41,720
)
(42,878
)
(77,365
)
(235,780
)
Preferred dividends undeclared
—
(11,223
)
—
(33,669
)
Net loss attributable to common
shareholders
$
(41,720
)
$
(54,101
)
$
(77,365
)
$
(269,449
)
Basic and diluted per share data
attributable to common
shareholders:
Net loss attributable to common
shareholders
$
(0.21
)
$
(0.28
)
$
(0.39
)
$
(1.43
)
Weighted-average common and potential
dilutive common shares
outstanding
196,454
193,481
196,474
188,211
CBL & Associates
Properties, Inc.
Supplemental Financial and
Operating Information
For the Three and Nine Months
Ended September 30, 2021 and 2020
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
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
Net loss attributable to common
shareholders
$
(41,720
)
$
(54,101
)
$
(77,365
)
$
(269,449
)
Noncontrolling interest in loss of
Operating Partnership
(1,085
)
(609
)
(2,013
)
(19,100
)
Depreciation and amortization expense
of:
Consolidated properties
46,479
53,477
142,090
162,042
Unconsolidated affiliates
13,480
14,437
40,466
41,967
Non-real estate assets
(416
)
(702
)
(1,448
)
(2,431
)
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(571
)
(1,118
)
(1,710
)
(2,829
)
Loss on impairment
63,160
46
120,342
146,964
(Gain) loss on depreciable property
(4,836
)
—
(4,836
)
25
FFO allocable to Operating Partnership
common unitholders
74,491
11,430
215,526
57,189
Litigation settlement (1)
(89
)
(2,480
)
(890
)
(2,480
)
Non-cash default interest expense (2)
8,919
2,519
31,965
5,412
Gain on deconsolidation (3)
—
—
(55,131
)
—
Reorganization items (4)
12,008
—
52,014
—
Prepetition charges (5)
—
12,913
—
20,770
Gain on extinguishment of debt (6)
—
(15,407
)
—
(15,407
)
FFO allocable to Operating Partnership
common unitholders, as
adjusted
$
95,329
$
8,975
$
243,484
$
65,484
FFO per diluted share
$
0.37
$
0.06
$
1.07
$
0.28
FFO, as adjusted, per diluted
share
$
0.47
$
0.04
$
1.21
$
0.32
Weighted-average common and potential
dilutive common shares
outstanding with Operating Partnership
units fully converted
201,559
201,690
201,587
201,551
(1)
For the three and nine months ended
September 30, 2021 and 2020, represents a credit to litigation
settlement expense related to claim amounts that were released
pursuant to the terms of the settlement agreement related to the
settlement of a class action lawsuit.
(2)
The three and nine months ended September
30, 2021 includes default interest expense related to loans secured
by properties that were in default prior to the Company filing
voluntary petitions under chapter 11 of title 11 of the United
States Code in the United States Bankruptcy Court for the Southern
District of Texas, as well as loans secured by properties that are
in default due to the Company filing voluntary petitions under
chapter 11 of title 11 of the United States Code. The three and
nine months ended September 30, 2020 includes default interest
expense related to Greenbrier Mall, Hickory Point Mall, EastGate
Mall, Asheville Mall, Burnsville Center and Park Plaza.
(3)
During the nine months ended September 30,
2021, the Company deconsolidated Asheville Mall and Park Plaza due
to a loss of control when the properties were placed into
receivership in connection with the foreclosure process.
(4)
For the three and nine months ended
September 30, 2021, reorganization items represent costs incurred
subsequent to the Company filing voluntary petitions under chapter
11 of title 11 of the United States Code in the United States
Bankruptcy Court for the Southern District of Texas associated with
the Company’s reorganization efforts, which consists of
professional fees, legal fees, retention bonuses and U.S. Trustee
fees.
(5)
For the three and nine months ended
September 30, 2020, 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 prior to the filing of voluntary petitions under
chapter 11 of title 11 of the United States Code in the United
States Bankruptcy Court for the Southern District of Texas
beginning on November 1, 2020.
(6)
The three and nine months ended September
30, 2020 includes a gain on extinguishment of debt related to the
non-recourse loan secured by Hickory Point Mall, which was conveyed
to the lender in the third quarter of 2020.
CBL & Associates
Properties, Inc.
Supplemental Financial and
Operating Information
For the Three and Nine Months
Ended September 30, 2021 and 2020
The reconciliation of diluted EPS to FFO per diluted share
is as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
Diluted EPS attributable to common
shareholders
$
(0.21
)
$
(0.28
)
$
(0.39
)
$
(1.43
)
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
0.29
0.34
0.89
0.99
Loss on impairment
0.31
—
0.59
0.72
Gain on depreciable property
(0.02
)
—
(0.02
)
—
FFO per diluted share
$
0.37
$
0.06
$
1.07
$
0.28
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
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
FFO allocable to Operating Partnership
common unitholders
$
74,491
$
11,430
$
215,526
$
57,189
Percentage allocable to common
shareholders (1)
97.47
%
95.93
%
97.46
%
93.38
%
FFO allocable to common
shareholders
$
72,606
$
10,965
$
210,052
$
53,403
FFO allocable to Operating Partnership
common unitholders, as adjusted
$
95,329
$
8,975
$
243,484
$
65,484
Percentage allocable to common
shareholders (1)
97.47
%
95.93
%
97.46
%
93.38
%
FFO allocable to common shareholders,
as adjusted
$
92,917
$
8,610
$
237,300
$
61,149
(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 14.
CBL & Associates
Properties, Inc.
Supplemental Financial and
Operating Information
For the Three and Nine Months
Ended September 30, 2021 and 2020
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees
$
2,051
$
1,722
$
3,329
$
3,375
Per share
$
0.01
$
0.01
$
0.02
$
0.02
Straight-line rental income adjustment
$
2,711
$
(2,891
)
$
(1,146
)
$
(1,972
)
Per share
$
0.01
$
(0.01
)
$
(0.01
)
$
(0.01
)
Gain (loss) on outparcel sales, net of
taxes
$
3,864
$
(55
)
$
3,655
$
2,733
Per share
$
0.02
$
—
$
0.02
$
0.01
Net amortization of acquired above- and
below-market leases
$
60
$
229
$
185
$
1,341
Per share
$
—
$
—
$
—
$
0.01
Net amortization of debt premiums and
discounts
$
—
$
353
$
—
$
1,040
Per share
$
—
$
—
$
—
$
0.01
Income tax benefit (provision)
$
1,234
$
(546
)
$
(222
)
$
(17,189
)
Per share
$
0.01
$
—
$
—
$
(0.09
)
Gain on extinguishment of debt
$
—
$
15,407
$
—
$
15,407
Per share
$
—
$
0.08
$
—
$
0.08
Non-cash default interest expense
(property-level loans)
$
(8,919
)
$
(2,519
)
$
(31,965
)
$
(5,412
)
Per share
$
(0.04
)
$
(0.01
)
$
(0.16
)
$
(0.03
)
Abandoned projects expense
$
(104
)
$
—
$
(391
)
$
(400
)
Per share
$
—
$
—
$
—
$
—
Interest capitalized
$
—
$
438
$
32
$
1,530
Per share
$
—
$
—
$
—
$
0.01
Litigation settlement
$
89
$
2,480
$
890
$
2,480
Per share
$
—
$
0.01
$
—
$
0.01
Incremental credit facility interest
expense related to imposition of default rate
$
—
$
(14,499
)
$
—
$
(19,311
)
Per share
$
—
$
(0.07
)
$
—
$
(0.10
)
Prepetition charges
$
—
$
(12,913
)
$
—
$
(20,770
)
Per share
$
—
$
(0.06
)
$
—
$
(0.10
)
Estimate of uncollectable revenues
$
4,444
$
(13,132
)
$
(6,068
)
$
(59,009
)
Per share
$
0.02
$
(0.07
)
$
(0.03
)
$
(0.29
)
As of September 30,
2021
2020
Straight-line rent receivable
$
50,609
$
53,421
CBL & Associates
Properties, Inc.
Supplemental Financial and
Operating Information
For the Three and Nine Months
Ended September 30, 2021 and 2020
Same-center Net Operating Income
(Dollars in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
Net loss
$
(42,881
)
$
(44,424
)
$
(80,722
)
$
(256,511
)
Adjustments:
Depreciation and amortization
46,479
53,477
142,090
162,042
Depreciation and amortization from
unconsolidated affiliates
13,480
14,437
40,466
41,967
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(571
)
(1,118
)
(1,710
)
(2,829
)
Interest expense
19,039
61,137
65,468
160,760
Interest expense from unconsolidated
affiliates
10,647
8,646
31,008
24,001
Noncontrolling interests' share of
interest expense in other consolidated subsidiaries
(663
)
(570
)
(2,508
)
(1,726
)
Abandoned projects expense
104
—
391
400
(Gain) loss on sales of real estate
assets
(8,684
)
55
(8,492
)
(2,708
)
Gain on sales of real estate assets of
unconsolidated affiliates
(70
)
—
(70
)
—
Gain on extinguishment of debt
—
(15,407
)
—
(15,407
)
Gain on deconsolidation
—
—
(55,131
)
—
Loss on impairment
63,160
46
120,342
146,964
Litigation settlement
(89
)
(2,480
)
(890
)
(2,480
)
Reorganization items
12,008
—
52,014
—
Income tax (benefit) provision
(1,234
)
546
222
17,189
Lease termination fees
(2,051
)
(1,722
)
(3,329
)
(3,375
)
Straight-line rent and above- and
below-market lease amortization
(2,771
)
2,662
961
631
Net loss attributable to noncontrolling
interests in other consolidated subsidiaries
76
937
1,344
1,631
General and administrative expenses
13,502
25,497
37,383
62,060
Management fees and non-property level
revenues
(1,344
)
(4,415
)
(7,135
)
(9,746
)
Operating Partnership's share of
property NOI
118,137
97,304
331,702
322,863
Non-comparable NOI
(5,843
)
(8,517
)
(17,037
)
(28,088
)
Total same-center NOI (1)
$
112,294
$
88,787
$
314,665
$
294,775
Total same-center NOI percentage
change
26.5
%
6.7
%
CBL & Associates
Properties, Inc.
Supplemental Financial and
Operating Information
For the Three and Nine Months
Ended September 30, 2021 and 2020
Same-center Net Operating Income
(Continued)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
Malls
$
98,202
$
75,577
$
274,254
$
255,863
Associated centers
7,189
7,184
20,614
20,475
Community centers
5,667
4,982
16,146
15,086
Offices and other
1,236
1,044
3,651
3,351
Total same-center NOI (1)
$
112,294
$
88,787
$
314,665
$
294,775
Percentage Change:
Malls
29.9
%
7.2
%
Associated centers
0.1
%
0.7
%
Community centers
13.7
%
7.0
%
Offices and other
18.4
%
9.0
%
Total same-center NOI (1)
26.5
%
6.7
%
(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 September 30,
2021, 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 September 30, 2021. 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.
CBL & Associates
Properties, Inc.
Supplemental Financial and
Operating Information
As of September 30, 2021 and
2020
Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
As of September 30,
2021
Fixed Rate
Variable Rate
Total per Debt
Schedule
Unamortized
Deferred Financing Costs (1)
Total
Consolidated debt (2)
$
2,330,175
$
1,181,787
$
3,511,962
$
(3,202
)
$
3,508,760
Noncontrolling interests' share of
consolidated debt
(29,563
)
—
(29,563
)
225
(29,338
)
Company's share of unconsolidated
affiliates' debt
615,166
127,337
742,503
(2,404
)
740,099
Other debt (3)
138,926
—
138,926
—
138,926
Company's share of consolidated,
unconsolidated and other debt
$
3,054,704
$
1,309,124
$
4,363,828
$
(5,381
)
$
4,358,447
Weighted-average interest rate
5.04
%
8.52
%
(4)
6.09
%
As of September 30,
2020
Fixed Rate
Variable Rate
Total per Debt
Schedule
Unamortized
Deferred Financing Costs
Total
Consolidated debt
$
2,560,364
$
1,183,186
$
3,743,550
$
(13,864
)
$
3,729,686
Noncontrolling interests' share of
consolidated debt
(30,275
)
—
(30,275
)
288
(29,987
)
Company's share of unconsolidated
affiliates' debt
625,806
122,486
748,292
(2,594
)
745,698
Company's share of consolidated and
unconsolidated debt
$
3,155,895
$
1,305,672
$
4,461,567
$
(16,170
)
$
4,445,397
Weighted-average interest rate
5.06
%
8.52
%
6.07
%
(1)
Unamortized deferred financing costs of
$2,310 and $1,256 for certain consolidated and the Company’s share
of unconsolidated property-level, non-recourse mortgage loans,
respectively, may be required to be written off in the event that a
waiver or restructuring of terms cannot be negotiated and the debt
is either redeemed or otherwise extinguished.
(2)
Includes $2,489,676 included in
liabilities subject to compromise in the accompanying consolidated
balance sheets as of September 30, 2021.
(3)
During the nine months ended September 30,
2021, the Company deconsolidated Asheville Mall and Park Plaza due
to a loss of control when the properties were placed into
receivership in connection with the foreclosure process.
(4)
The administrative agent informed the
Company that interest will accrue on all outstanding obligations at
the post-default rate, which is equal to the rate that otherwise
would be in effect plus 5.0%. The post-default interest rate at
September 30, 2021 was 9.50%. In accordance with ASC 852,
Reorganizations, which limits the recognition of interest expense
during a bankruptcy proceeding to only amounts that will be paid
during the bankruptcy proceeding or that are probable of becoming
allowed claims, interest has not been accrued on the secured credit
facility subsequent to the filing of voluntary petitions under
chapter 11 of title 11 of the United States Code in the United
States Bankruptcy Court for the Southern District of Texas
beginning on November 1, 2020. On November 1, 2021, an affiliate of
the Company entered into an amended and restated credit agreement,
which amended the pre-emergence secured credit facility.
CBL & Associates
Properties, Inc.
Supplemental Financial and
Operating Information
As of September 30, 2021 and
2020
Total Market Capitalization as of September 30, 2021
(In thousands, except stock price)
Shares Outstanding
(1)
Stock Price (2)
Common stock and Operating Partnership
units
201,555
$
0.18
7.375% Series D Cumulative Redeemable
Preferred Stock
1,815
250.00
6.625% Series E Cumulative Redeemable
Preferred Stock
690
250.00
(1)
On the November 1, 2021, by operation of
the Third Amended Joint Chapter 11 Plan of CBL & Associates
Properties, Inc. and its Affiliated Debtors (With Technical
Modifications) (as modified at Docket No. 1521), all agreements,
instruments, and other documents evidencing, relating to or
connected with any equity interests of the Company, including the
REIT’s common stock, and the REIT’s preferred stock and related
depositary shares, issued and outstanding immediately prior to
November 1, 2021, and any rights of any holder in respect thereof,
were deemed cancelled, discharged and of no force or effect. On
November 2, 2021, the newly issued common stock of the Company
commenced trading on the NYSE under the symbol CBL.
(2)
Stock price for common stock and Operating
Partnership units equals the closing price of CBL's common stock on
September 30, 2021 on the OTC Markets, operated by the OTC Markets
Group, Inc. The stock prices for the preferred stock represent the
liquidation preference of each respective series of preferred
stock.
Reconciliation of Shares and Operating Partnership Units
Outstanding
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
Basic
Diluted
Basic
Diluted
2021:
Weighted-average shares - EPS
196,454
196,454
196,474
196,474
Weighted-average Operating Partnership
units
5,105
5,105
5,113
5,113
Weighted-average shares - FFO
201,559
201,559
201,587
201,587
2020:
Weighted-average shares - EPS
193,481
193,481
188,211
188,211
Weighted-average Operating Partnership
units
8,209
8,209
13,340
13,340
Weighted-average shares - FFO
201,690
201,690
201,551
201,551
CBL & Associates
Properties, Inc.
Supplemental Financial and
Operating Information
As of September 30, 2021 and
December 31, 2020
Consolidated Balance Sheets (Unaudited; in thousands, except
share data)
As of
September 30,
2021
December 31,
2020
ASSETS
Real estate assets:
Land
$
643,331
$
695,711
Buildings and improvements
4,867,017
5,135,074
5,510,348
5,830,785
Accumulated depreciation
(2,251,613
)
(2,241,421
)
3,258,735
3,589,364
Developments in progress
15,065
28,327
Held for sale
6,239
—
Net investment in real estate assets
3,280,039
3,617,691
Cash and cash equivalents
267,982
61,781
Available-for-sale securities - at fair
value (amortized cost of $99,991 and $233,053 as of
September 30, 2021 and December 31, 2020,
respectively)
99,998
233,071
Receivables:
Tenant
72,574
103,655
Other
4,050
5,958
Mortgage and other notes receivable
1,696
2,337
Investments in unconsolidated
affiliates
249,313
279,355
Intangible lease assets and other
assets
252,495
139,892
$
4,228,147
$
4,443,740
LIABILITIES, REDEEMABLE NONCONTROLLING
INTERESTS AND EQUITY
Mortgage and other indebtedness, net
$
1,019,084
$
1,184,831
Accounts payable and accrued
liabilities
203,069
173,387
Total liabilities not subject to
compromise
1,222,153
1,358,218
Liabilities subject to compromise
2,551,686
2,551,490
Commitments and contingencies
Redeemable noncontrolling interests
(871
)
(265
)
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, 197,630,693 and
196,569,917 issued and outstanding in 2021
and 2020, respectively
1,976
1,966
Additional paid-in capital
1,986,911
1,986,269
Accumulated other comprehensive income
7
18
Dividends in excess of cumulative
earnings
(1,533,800
)
(1,456,435
)
Total shareholders' equity
455,119
531,843
Noncontrolling interests
60
2,454
Total equity
455,179
534,297
$
4,228,147
$
4,443,740
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211116005434/en/
Katie Reinsmidt, Executive Vice President - Chief Investment
Officer, 423.490.8301, katie.reinsmidt@cblproperties.com
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