Same-center NOI for the nine months ended
September 30, 2024, increased 1% over the prior-year period
CBL Properties (NYSE: CBL) announced results for the third
quarter ended September 30, 2024. Results of operations as reported
in the consolidated financial statements for these periods are
prepared in accordance with GAAP. 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,
2024
2023
2024
2023
Net income (loss) attributable to common
shareholders
$
0.52
$
0.41
$
0.65
$
(0.19
)
Funds from Operations ("FFO")
$
1.28
$
1.93
$
4.00
$
4.79
FFO, as adjusted (1)
$
1.54
$
1.60
$
4.77
$
4.72
(1)
For a reconciliation of FFO to FFO, as
adjusted, for the periods presented, please refer to the footnotes
to the Company’s reconciliation of net income (loss) attributable
to common shareholders to FFO allocable to Operating Partnership
common unitholders on page 9 of this news release.
KEY TAKEAWAYS:
- Same center NOI for the nine months ended September 30, 2024
increased 1% compared with the prior-year period, and FFO, as
adjusted, per share increased to $4.77, compared with $4.72 for the
prior-year period. CBL reported a decline in same-center NOI of
2.0% for third quarter 2024 compared with the prior-year period,
and FFO, as adjusted, per share of $1.54, compared with $1.60 for
third quarter 2023. Results were in-line with the previously issued
guidance range for 2024 same-center NOI and FFO, as adjusted.
- Over 880,000 square feet of leases were executed in third
quarter 2024. Third quarter 2024 leasing results included
comparable leases of approximately 362,000 square feet signed at a
9.5% increase in average rents versus the prior leases including a
3.3% increase in renewal leases signed for malls, lifestyle centers
and outlet centers.
- Portfolio occupancy was 89.3% as of September 30, 2024, a 60
basis-point-increase sequentially from June 30, 2024, and a 150 bps
decline compared with portfolio occupancy of 90.8% as of September
30, 2023. Same-center occupancy for malls, lifestyle centers and
outlet centers was 87.4% as of September 30, 2024, a
230-basis-point decline from 89.7% as of September 30, 2023.
Anticipated bankruptcy related store closures representing nearly
300,000-square-feet comprised 163 basis points of the decline in
mall occupancy compared with the prior-year quarter including
approximately 234,000 square feet of closures in the second quarter
2024 related to rue21 and Express. CBL has executed agreements to
reopen 14 stores representing approximately 94,400 square feet of
rue21 stores under its new ownership by first quarter 2025, with
the majority opening in 2024.
- Same-center tenant sales per square foot for the third quarter
2024 increased 1.5% as compared with the prior-year period.
Same-center tenant sales per square foot for the 12-months ended
September 30, 2024, declined 0.7% to $418, compared with $421 for
the prior period.
- As of September 30, 2024, the Company had $307.0 million of
unrestricted cash and marketable securities.
- In October, CBL announced that it completed the repurchase of
500,000 shares of CBL stock for $12.525 million, in a privately
negotiated block trade from a single shareholder. In addition, CBL
completed the previously announced $25 million share repurchase
program in September 2024. Through the program, 1,074,826 shares
were repurchased in total at a weighted average share price of
$23.539 per share.
- CBL's Board of Directors declared a cash dividend of $0.40 per
common share for the quarter ending December 31, 2024. The dividend
equates to an annual dividend payment of $1.60 per common
share.
"The overall environment for the shopping center industry
remains positive," said CBL's chief executive officer, Stephen D.
Lebovitz. "While same-center NOI declined 2% for the third quarter,
we have achieved a 1% year-to-date increase, tracking near the
high-end of our full-year guidance. Revenue on a same-center basis
was relatively flat for the quarter with new tenant openings
partially offsetting the impact of recent bankruptcy-related
closures as well as a $1.1 million decline in percentage rents. We
also experienced increased operating expense related to the timing
of maintenance and repair projects and higher net utility and
insurance expense.
"Leasing results remained strong in our portfolio. We signed
over 880,000 square feet of leases during the third quarter with
9.5% increases for comparable new and renewal leases. We also added
two new retailers to our portfolio, signing our first lease with
popular western wear retailer Cavender's during the third quarter
as well as our first two leases with Rowan, a fashionable jewelry
and piercing store. We added four new leases with Miniso, which
will bring them into a total of 24 CBL properties. During the
quarter, portfolio occupancy decreased 150 basis points primarily
from the 234,000-square-feet of store closures in the previous
quarter related to the bankruptcies of Express and rue21 as well as
additional closures of underperforming tenants. We have a solid
pipeline of new leasing that we expect to offset this decrease over
time.
"Tenant sales per square foot showed positive growth of 1.5%
across the portfolio in the third quarter. The back-to-school
season started earlier this year with promotions and high inventory
levels driving traffic and sales beginning in July. Our teams are
gearing up for an active holiday sales season with forecasts
calling for sales growth despite the short timeframe between
Thanksgiving and Christmas.
"In October, we further demonstrated our commitment to returning
significant capital to shareholders with the repurchase of 500,000
CBL shares. We also completed our previously announced $25 million
repurchase program, acquiring more than one million shares through
the program. This is in addition to our fourth quarter dividend of
$0.40 per share which we declared on October 14th. These meaningful
investments underscore our confidence in CBL's value and its
future.
"We also made progress strengthening our balance sheet.
Including the Layton Hills sales this quarter, we have reduced our
debt by more than $188 million from the prior year period. We
proactively refinanced two partial recourse loans that were secured
by one of our open-air centers in Florida. The new 10-year loan is
fully non-recourse and bears a fixed interest rate of 5.86%, over
200 basis points in savings compared with the prior floating rate.
We also successfully refinanced the maturing loan secured by The
Outlet Shoppes of the Bluegrass with a new $66.0 million loan,
extending the maturity through 2034. We are actively pursuing
additional opportunities to further improve and de-risk our balance
sheet and strengthen our overall financial position."
Same-center Net Operating Income (“NOI”) (1):
Three Months Ended September
30,
2024
2023
Total Revenues
$
155,185
$
155,611
Total Expenses
$
(53,464
)
$
(51,842
)
Total portfolio same-center NOI
$
101,722
$
103,769
Total same-center NOI percentage
change
(2.0
)%
Estimate for uncollectable revenues
(recovery)
$
1,603
$
2,342
(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 above and below market
leases.
Same-center NOI for the third quarter 2024 declined $2.0
million. Third quarter 2024 results were impacted by a $1.1 million
decline in percentage rents. Operating expense was $1.6 million
higher, primarily driven by the timing of maintenance and repair
projects and higher utility and insurance expense, partially offset
by increases in tenant recoveries. The estimate for uncollectible
revenues positively impacted the quarter by approximately $0.7
million.
Nine Months Ended September
30,
2024
2023
Total Revenues
$
468,362
$
471,993
Total Expenses
$
(153,506
)
$
(160,264
)
Total portfolio same-center NOI
$
314,856
$
311,729
Total same-center NOI percentage
change
1.0
%
Estimate for uncollectable revenues
(recovery)
$
2,941
$
3,046
Same-center NOI for the nine months ended September 30, 2024
increased $3.1 million. Results included real estate and other tax
expense savings and improved operating expenses from lower
third-party contract expense. Percentage rents for the nine months
ended September 30, 2024, were $1.8 million lower. The estimate for
uncollectible revenues favorably impacted the current nine-month
period by $0.1 million.
PORTFOLIO OPERATIONAL RESULTS Occupancy(1):
As of September 30,
2024
2023
Total portfolio
89.3%
90.8%
Malls, lifestyle centers and outlet
centers:
Total malls
86.4%
89.2%
Total lifestyle centers
91.2%
92.6%
Total outlet centers
91.6%
90.3%
Total same-center malls, lifestyle centers
and outlet centers
87.4%
89.7%
All Other Properties:
Total open-air centers
95.4%
94.9%
Total other
88.0%
82.5%
(1)
Occupancy for malls, lifestyle centers and
outlet centers represent percentage of in-line gross leasable area
under 20,000 square feet occupied. Occupancy for open-air 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,
2024
2024
All Property Types
9.5%
9.6%
Stabilized Malls, Lifestyle Centers and
Outlet Centers
8.9%
9.3%
New leases
48.4%
60.5%
Renewal leases
3.3%
3.4%
Same-Center Sales Per Square Foot for In-line Tenants 10,000
Square Feet or Less:
Sales Per Square Foot for the
Trailing Twelve Months Ended September 30,
2024
2023
% Change
Malls, lifestyle centers and outlet
centers same-center sales per square foot
$
418
$
421
(0.7)%
DIVIDEND
On November 7, 2024, CBL announced that its Board of Directors
had approved an accelerated record and payment date for the cash
dividend of $0.40 per common share for the quarter ending December
31, 2024, previously declared on October 14, 2024. The dividend,
which equates to an annual dividend payment of $1.60 per share, is
payable on December 11, 2024, to shareholders of record as of
November 25, 2024.
FINANCING ACTIVITY
In November, CBL and its 50% joint venture partner took
advantage of improved financing terms and closed on new
non-recourse ten-year loans totaling $45.0 million, secured by
Hammock Landing in West Melbourne, FL. The loans bear a fixed
interest rate of 5.86% and replace two existing partially
guaranteed loans totaling $44.5 million, which bore a floating
interest rate (8.2% as of September 30, 2024). The loans had a
maturity of February 2025, with one additional one-year extension
option to February 2026.
In October, CBL and its joint venture partner closed on a new
$66 million loan secured by The Outlet Shoppes of the Bluegrass.
The new non-recourse loan bears a fixed interest rate of 6.84% and
matures in October 2034. Proceeds were used to retire the $61.6
million existing loan that was set to mature in December 2024.
In August 2024, CBL and its 50% joint venture partner began
discussion with the lender regarding a loan modification/extension
of the $91.2 million in loans secured by Coastal Grand Mall and
Coastal Grand Crossing in Myrtle Beach, NC.
In July 2024, CBL and its 50% joint venture partner closed on a
new $14.5 million five-year loan secured by the Aloft Hotel at
Hamilton Place in Chattanooga, TN. The loan bears a fixed interest
rate of 7.2% and is non-recourse to CBL and replaced the existing
$16.0 million loan that was set to mature in November 2024.
In May 2024, CBL transferred the title of Westgate Mall in
Spartanburg, SC, to the mortgage holder in satisfaction of the
$28.7 million non-recourse loan secured by the property.
In February 2024, CBL retired the $15.3 million recourse loan
secured by Brookfield Square Anchor Redevelopment in Brookfield,
WI.
CBL is cooperating with the foreclosure or conveyance of
Alamance Crossing East in Burlington, NC, ($41.1 million).
STOCK REPURCHASE PROGRAM ACTIVITY
On October 10, 2024, CBL announced that it completed the
repurchase of 500,000 shares of CBL stock for $12.525 million, in a
privately negotiated block trade from a single shareholder. The
block repurchase was completed separately from CBL’s existing stock
repurchase program described below.
On August 10, 2023, CBL announced that its Board of Directors
authorized a stock repurchase program for the Company to buy up to
$25.0 million of its common stock. As of September 20, 2024, CBL
had completed all repurchase activity under this program. A total
of 1,074,826 shares were repurchased under the program at a
weighted average share price of $23.259 per share.
DISPOSITIONS
On August 6, 2024, CBL closed on the sale of Layton Hills Mall
in Layton, UT, for $37.125 million. The property served as
collateral under CBL's non-recourse term loan. Net proceeds from
the sale were used to reduce the term loan balance.
In September, CBL closed on the sale of Layton Hills Convenience
Center, Layton Hills Plaza and nine related outparcels in Layton
(Salt Lake City), UT, to an unaffiliated third party for $28.5
million, all cash. Layton Hills Convenience Center and Plaza served
as collateral under CBL’s non-recourse term loan. The nine improved
outparcels served as collateral under CBL’s non-recourse open-air
and outparcel loan. Net proceeds from the sale were applied to the
term loan principal balance and open-air and outparcel loan, as
applicable.
In addition to the sale of Layton Hills Mall and adjacent
properties, CBL completed the sale of two outparcels for $1.2
million during the third quarter. Year-to-date, CBL's disposition
activity has generated approximately $74.2 million in gross
proceeds at CBL's share.
DEVELOPMENT AND REDEVELOPMENT ACTIVITY
Detailed project information is available in CBL’s Financial
Supplement for Q3 2024, which can be found in the Invest –
Financial Reports section of CBL’s website at cblproperties.com
OUTLOOK AND GUIDANCE
Based on year-to-date results and Management's expectations, CBL
is reiterating its full-year 2024 FFO, as adjusted, guidance. Per
share amounts have been adjusted to reflect the impact of
year-to-date share repurchase activity. Management anticipates
same-center NOI for full-year 2024 in the range of (1.2)% to 1.4%.
Guidance excludes the impact of any unannounced transactions.
Low
High
2024 FFO, as adjusted (in millions)
$
196.0
$
210.0
2024 WA Share Count
30.9
30.9
2024 FFO, as adjusted, per share
$
6.34
$
6.80
2024 Same-Center NOI ("SC NOI") (in
millions)
$
425.0
$
436.0
2024 change in same-center NOI
(1.2
)%
1.4
%
Reconciliation of GAAP Earnings Per Share to 2024 FFO, as
Adjusted, Per Share:
Low
High
Expected diluted earnings per common
share
$
0.59
$
1.05
Depreciation and amortization
4.87
4.87
Dividends allocable to unvested restricted
stock
0.03
0.03
Gain on depreciable property
(0.51
)
(0.51
)
Loss on impairment
0.02
0.02
Expected FFO, per diluted, fully converted
common share
$
5.00
$
5.46
Debt discount accretion, net of
noncontrolling interests' share
1.45
1.45
Loss on extinguishment of debt
0.03
0.03
Adjustment for unconsolidated affiliates
with negative investment
(0.16
)
(0.16
)
Adjustment for litigation settlement
0.01
0.01
Non-cash default interest expense
0.01
0.01
Expected FFO, as adjusted, per diluted,
fully converted common share
$
6.34
$
6.80
2024 Estimate of Capital Items (in millions):
Low
High
2024 Estimated maintenance capital/tenant
allowances
$
40.0
$
45.0
2024 Estimated development/redevelopment
expenditures
10.0
15.0
2024 Estimated principal amortization
(including est. term loan ECF)
75.0
85.0
Total Estimate
$
125.0
$
145.0
ABOUT CBL PROPERTIES
Headquartered in Chattanooga, TN, CBL Properties owns and
manages a national portfolio of properties located in dynamic and
growing communities. CBL’s owned and managed portfolio is comprised
of 91 properties totaling more than 57.7 million square feet across
21 states, including 55 high-quality enclosed malls, outlet centers
and lifestyle retail centers as well as more than 30 open-air
centers and other assets. 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. 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 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.
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.
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 (loss) is located
at the end of this earnings release.
Pro Rata Share of Debt
The Company presents debt based on the carrying value of its pro
rata ownership share (including the carrying value of 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 September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
REVENUES:
Rental revenues
$
119,992
$
124,783
$
368,090
$
379,949
Management, development and leasing
fees
1,990
1,840
5,712
6,096
Other
3,107
2,728
10,069
9,532
Total revenues
125,089
129,351
383,871
395,577
EXPENSES:
Property operating
(23,336
)
(22,621
)
(67,903
)
(68,742
)
Depreciation and amortization
(32,326
)
(45,118
)
(109,030
)
(148,129
)
Real estate taxes
(13,271
)
(13,794
)
(35,568
)
(43,063
)
Maintenance and repairs
(8,890
)
(8,487
)
(28,007
)
(30,002
)
General and administrative
(15,402
)
(14,398
)
(50,647
)
(49,783
)
Loss on impairment
—
—
(836
)
—
Litigation settlement
13
2,060
153
2,178
Other
(15
)
—
(142
)
(198
)
Total expenses
(93,227
)
(102,358
)
(291,980
)
(337,739
)
OTHER INCOME (EXPENSES):
Interest and other income
4,023
3,628
12,109
9,260
Interest expense
(38,849
)
(42,891
)
(118,068
)
(130,588
)
Loss on extinguishment of debt
(819
)
—
(819
)
—
Gain on deconsolidation
—
19,728
—
47,879
Gain on sales of real estate assets
12,816
3,414
16,487
4,896
Income tax provision
(364
)
(1,263
)
(856
)
(1,381
)
Equity in earnings of unconsolidated
affiliates
7,084
3,266
18,826
2,822
Total other expenses
(16,109
)
(14,118
)
(72,321
)
(67,112
)
Net income (loss)
15,753
12,875
19,570
(9,274
)
Net (income) loss attributable to
noncontrolling interests in:
Operating Partnership
(1
)
6
(1
)
6
Other consolidated subsidiaries
446
381
1,423
4,001
Net income (loss) attributable to the
Company
16,198
13,262
20,992
(5,267
)
Earnings allocable to unvested restricted
stock
(333
)
(305
)
(852
)
(837
)
Net income (loss) attributable to
common shareholders
$
15,865
$
12,957
$
20,140
$
(6,104
)
Basic and diluted per share data
attributable to common shareholders:
Basic earnings per share
$
0.52
$
0.41
$
0.65
$
(0.19
)
Diluted earnings per share
0.52
0.41
0.65
(0.19
)
Weighted-average basic shares
30,756
31,305
31,149
31,307
Weighted-average diluted shares
30,756
31,305
31,151
31,307
The Company's reconciliation of net
income (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,
2024
2023
2024
2023
Net income (loss) attributable to common
shareholders
$
15,865
$
12,957
$
20,140
$
(6,104
)
Noncontrolling interest in income (loss)
of Operating Partnership
1
(6
)
1
(6
)
Earnings allocable to unvested restricted
stock
333
305
852
837
Depreciation and amortization expense
of:
Consolidated properties
32,326
45,118
109,030
148,129
Unconsolidated affiliates
3,534
4,192
11,996
13,263
Non-real estate assets
(256
)
(221
)
(769
)
(673
)
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(438
)
(562
)
(1,470
)
(1,935
)
Loss on impairment, net of taxes
—
—
619
—
Gain on depreciable property
(11,930
)
—
(15,651
)
—
FFO allocable to Operating Partnership
common unitholders
39,435
61,783
124,748
153,511
Debt discount accretion, including our
share of unconsolidated affiliates and net of noncontrolling
interests' share (1)
11,085
14,689
34,602
47,879
Adjustment for unconsolidated affiliates
with negative investment (2)
(4,099
)
(3,659
)
(11,468
)
(1,180
)
Litigation settlement (3)
(13
)
(2,060
)
(153
)
(2,178
)
Non-cash default interest expense (4)
232
191
232
972
Gain on deconsolidation (5)
—
(19,728
)
—
(47,879
)
Loss on extinguishment of debt (6)
819
—
819
—
FFO allocable to Operating Partnership
common unitholders, as adjusted
$
47,459
$
51,216
$
148,780
$
151,125
FFO per diluted share
$
1.28
$
1.93
$
4.00
$
4.79
FFO, as adjusted, per diluted
share
$
1.54
$
1.60
$
4.78
$
4.72
Weighted-average common and potential
dilutive common units outstanding
30,761
32,054
31,154
32,018
(1)
In conjunction with fresh start
accounting upon emergence from bankruptcy, the Company recognized
debt discounts equal to the difference between the outstanding
balance of mortgage notes payable and the estimated fair value of
such mortgage notes payable. The debt discounts are accreted as
additional interest expense over the terms of the respective
mortgage notes payable using the effective interest method.
(2)
Represents the Company’s share of
the earnings (losses) before depreciation and amortization expense
of unconsolidated affiliates where the Company is not recognizing
equity in earnings (losses) because its investment in the
unconsolidated affiliate is below zero.
(3)
Represents a credit to litigation
settlement expense, in each respective period, related to claim
amounts that were released pursuant to the terms of the settlement
agreement related to the settlement of a class action lawsuit.
(4)
The three and nine months ended
September 30, 2024 and 2023 includes default interest on loans past
their maturity dates.
(5)
For the three and nine months
ended September 30, 2023, the Company deconsolidated WestGate Mall
due to a loss of control when the property was placed into
receivership in connection with the foreclosure process. For the
nine months ended September 30, 2023, the Company deconsolidated
Alamance Crossing East due to a loss of control when the property
was placed into receivership in connection with the foreclosure
process.
(6)
During the three months ended
September 30, 2024, the Company made a partial paydown on the
open-air centers and outparcels loan and recognized loss on
extinguishment of debt related to a prepayment fee.
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Diluted EPS attributable to common
shareholders
$
0.52
$
0.41
$
0.65
$
(0.19
)
Add amounts per share included in FFO:
Unvested restricted stock
0.01
0.02
0.02
0.02
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
1.14
1.50
3.81
4.96
Loss on impairment, net of taxes
—
—
0.02
—
Gain on depreciable property
(0.39
)
—
(0.50
)
—
FFO per diluted share
$
1.28
$
1.93
$
4.00
$
4.79
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees
$
524
$
127
$
2,213
$
2,081
Straight-line rental income adjustment
$
475
$
2,053
$
170
$
5,408
Gain on outparcel sales, net of taxes
$
744
$
3,073
$
694
$
5,378
Net amortization of acquired above- and
below-market leases
$
(4,306
)
$
(4,665
)
$
(10,482
)
$
(15,110
)
Income tax provision
$
(364
)
$
(1,263
)
$
(856
)
$
(1,381
)
Abandoned projects expense
$
(15
)
$
—
$
(142
)
$
(17
)
Interest capitalized
$
155
$
125
$
428
$
342
Estimate of uncollectable revenues
$
(2,035
)
$
(2,692
)
$
(4,826
)
$
(4,194
)
As of September 30,
2024
2023
Straight-line rent receivable
$
23,549
$
21,205
Same-center Net Operating
Income
(Dollars in thousands)
Three Months Ended September
30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net income (loss)
$
15,753
$
12,875
$
19,570
$
(9,274
)
Adjustments:
Depreciation and amortization
32,326
45,118
109,030
148,129
Depreciation and amortization from
unconsolidated affiliates
3,534
4,192
11,996
13,263
Noncontrolling interests' share of
depreciation and amortization in other consolidated
subsidiaries
(438
)
(562
)
(1,470
)
(1,935
)
Interest expense
38,849
42,891
118,068
130,588
Interest expense from unconsolidated
affiliates
16,683
18,058
51,038
54,114
Noncontrolling interests' share of
interest expense in other consolidated subsidiaries
(1,070
)
(1,106
)
(3,196
)
(5,067
)
Abandoned projects expense
15
—
142
17
Gain on sales of real estate assets, net
of taxes and noncontrolling interests' share
(12,816
)
(3,073
)
(16,487
)
(4,610
)
Gain on sales of real estate assets of
unconsolidated affiliates
—
—
—
(768
)
Adjustment for unconsolidated affiliates
with negative investment
(4,099
)
(3,659
)
(11,468
)
(1,180
)
Loss on extinguishment of debt
819
—
819
—
Gain on deconsolidation
—
(19,728
)
—
(47,879
)
Loss on impairment
—
—
836
—
Litigation settlement
(13
)
(2,060
)
(153
)
(2,178
)
Income tax provision
364
1,263
856
1,381
Lease termination fees
(524
)
(127
)
(2,213
)
(2,081
)
Straight-line rent and above- and
below-market lease amortization
3,831
2,612
10,312
9,702
Net loss attributable to noncontrolling
interests in other consolidated subsidiaries
446
381
1,423
4,001
General and administrative expenses
15,402
14,398
50,647
49,783
Management fees and non-property level
revenues
(6,080
)
(4,709
)
(19,070
)
(14,727
)
Operating Partnership's share of
property NOI
102,982
106,764
320,680
321,279
Non-comparable NOI
(1,260
)
(2,995
)
(5,824
)
(9,550
)
Total same-center NOI (1)
$
101,722
$
103,769
$
314,856
$
311,729
Total same-center NOI percentage
change
(2.0
)%
1.0
%
(1)
CBL defines NOI as property operating
revenues (rental revenues, tenant reimbursements and other income),
less property operating expenses (property operating, real estate
taxes and maintenance and repairs). 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,
2024, 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, 2024. 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.
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Malls
$
68,466
$
71,069
$
212,659
$
213,860
Outlet centers
5,351
5,125
16,275
15,539
Lifestyle centers
8,613
8,964
26,900
26,723
Open-air centers
13,826
13,562
42,635
40,367
Outparcels and other
5,466
5,049
16,387
15,240
Total same-center NOI
$
101,722
$
103,769
$
314,856
$
311,729
Percentage Change:
Malls
(3.7
)%
(0.6
)%
Outlet centers
4.4
%
4.7
%
Lifestyle centers
(3.9
)%
0.7
%
Open-air centers
1.9
%
5.6
%
Outparcels and other
8.3
%
7.5
%
Total same-center NOI
(2.0
)%
1.0
%
Company's Share of Consolidated and
Unconsolidated Debt
(Dollars in thousands)
As of September 30,
2024
Fixed Rate
Variable Rate
Total Debt
Unamortized Deferred Financing
Costs
Unamortized Debt Discounts
(1)
Total, net
Consolidated debt
$
879,488
$
933,374
$
1,812,862
$
(9,644
)
$
(28,099
)
$
1,775,119
Noncontrolling interests' share of
consolidated debt
(24,513
)
(11,508
)
(36,021
)
201
2,278
(33,542
)
Company's share of unconsolidated
affiliates' debt
619,112
49,437
668,549
(2,277
)
—
666,272
Other debt (2)
41,122
—
41,122
—
—
41,122
Company's share of consolidated,
unconsolidated and other debt
$
1,515,209
$
971,303
$
2,486,512
$
(11,720
)
$
(25,821
)
$
2,448,971
Weighted-average interest rate
5.27
%
8.30
%
6.45
%
As of September 30,
2023
Fixed Rate
Variable Rate
Total Debt
Unamortized Deferred Financing
Costs
Unamortized Debt Discounts
(1)
Total, net
Consolidated debt
$
925,963
$
1,036,975
$
1,962,938
$
(14,264
)
$
(48,201
)
$
1,900,473
Noncontrolling interests' share of
consolidated debt
(25,122
)
(13,072
)
(38,194
)
274
4,192
(33,728
)
Company's share of unconsolidated
affiliates' debt
618,477
62,256
680,733
(3,185
)
—
677,548
Other debt (2)
69,783
—
69,783
—
—
69,783
Company's share of consolidated,
unconsolidated and other debt
$
1,589,101
$
1,086,159
$
2,675,260
$
(17,175
)
$
(44,009
)
$
2,614,076
Weighted-average interest rate
5.18
%
8.40
%
6.49
%
(1)
In conjunction with fresh start accounting
upon emergence from bankruptcy, the Company recognized debt
discounts equal to the difference between the outstanding balance
of mortgage notes payable and the estimated fair value of such
mortgage notes payable. The debt discounts are accreted as
additional interest expense over the terms of the respective
mortgage notes payable using the effective interest method.
(2)
Represents the outstanding loan balance
for Alamance Crossing East, which was deconsolidated due to a loss
of control when the property was placed into receivership in
connection with the foreclosure process. Additionally, WestGate
Mall was deconsolidated in September 2023 when the property was
placed into receivership in connection with the foreclosure
process, which was completed in May 2024.
Consolidated Balance Sheets
(Unaudited; in thousands, except share
data)
September 30,
December 31,
2024
2023
ASSETS
Real estate assets:
Land
$
563,426
$
585,191
Buildings and improvements
1,195,757
1,216,054
1,759,183
1,801,245
Accumulated depreciation
(277,484
)
(228,034
)
1,481,699
1,573,211
Developments in progress
8,816
8,900
Net investment in real estate assets
1,490,515
1,582,111
Cash and cash equivalents
65,113
34,188
Restricted cash
76,355
88,888
Available-for-sale securities - at fair
value (amortized cost of $241,289 and $261,869 as of September 30,
2024 and December 31, 2023, respectively)
241,930
262,142
Receivables:
Tenant
39,846
43,436
Other
2,231
2,752
Investments in unconsolidated
affiliates
83,701
76,458
In-place leases, net
114,099
157,639
Intangible lease assets and other
assets
133,826
158,291
$
2,247,616
$
2,405,905
LIABILITIES AND EQUITY
Mortgage and other indebtedness, net
$
1,775,119
$
1,888,803
Accounts payable and accrued
liabilities
174,402
186,485
Total liabilities
1,949,521
2,075,288
Shareholders' equity:
Common stock, $.001 par value, 200,000,000
shares authorized, 31,249,272 and 31,975,645 issued and outstanding
as of September 30, 2024 and December 31, 2023, respectively (in
each case, excluding 34 treasury shares)
31
32
Additional paid-in capital
705,181
719,125
Accumulated other comprehensive income
645
610
Accumulated deficit
(397,511
)
(380,446
)
Total shareholders' equity
308,346
339,321
Noncontrolling interests
(10,251
)
(8,704
)
Total equity
298,095
330,617
$
2,247,616
$
2,405,905
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241111014591/en/
Katie Reinsmidt, Executive Vice President - Chief Operating
Officer, 423.490.8301, katie.reinsmidt@cblproperties.com
CBL and Associates Prope... (NYSE:CBL)
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