Form 8-K CBL & ASSOCIATES PROPERT For: Jul 29
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 29, 2015
CBL & ASSOCIATES PROPERTIES, INC.
CBL & ASSOCIATES LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in its Charter)
Delaware | 1-12494 | 62-1545718 | ||
Delaware | 333-182515-01 | 62-1542285 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
2030 Hamilton Place Blvd., Suite 500, Chattanooga, TN 37421 | ||||
(Address of principal executive office, including zip code) | ||||
423.855.0001 | ||||
(Registrant's telephone number, including area code) | ||||
N/A | ||||
(Former name, former address and former fiscal year, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 Results of Operations and Financial Condition
On July 29, 2015, CBL & Associates Properties, Inc. (the "Company") reported its results for the second quarter ended June 30, 2015. The Company's earnings release and supplemental financial and operating information for the second quarter ended June 30, 2015 is attached as Exhibit 99.1. On July 30, 2015, the Company held a conference call to discuss the results for the second quarter ended June 30, 2015. The conference call script is attached as Exhibit 99.2.
The information in this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
ITEM 9.01 Financial Statements and Exhibits
(a) | Financial Statements of Businesses Acquired |
Not applicable
(b) | Pro Forma Financial Information |
Not applicable
(c) | Shell Company Transactions |
Not applicable
(d) | Exhibits |
Exhibit Number | Description | |
99.1 | Earnings Release dated July 29, 2015 and Supplemental Financial and Operating Information - For the Three Months and Six Months Ended June 30, 2015 | |
99.2 | Investor Conference Call Script - Second Quarter Ended June 30, 2015 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CBL & ASSOCIATES PROPERTIES, INC.
/s/ Farzana K. Mitchell
___________________________________
Farzana K. Mitchell
Executive Vice President -
Chief Financial Officer and Treasurer
CBL & ASSOCIATES LIMITED PARTNERSHIP
By: CBL HOLDINGS I, INC., its general partner
/s/ Farzana K. Mitchell
___________________________________
Farzana K. Mitchell
Executive Vice President -
Chief Financial Officer and Treasurer
Date: July 30, 2015
Exhibit 99.1
Earnings Release and
Supplemental Financial and Operating Information
For the Three and Six Months Ended
June 30, 2015
Earnings Release and Supplemental Financial and Operating Information
Table of Contents
Page | ||
Reconciliations of Non-GAAP Financial Measures: | ||
Contact: Katie Reinsmidt, Senior Vice President - Investor Relations/Corporate Investments, 423.490.8301, [email protected]
CBL & ASSOCIATES PROPERTIES REPORTS
SECOND QUARTER 2015 RESULTS
• | Same-center sales per square foot increased 4.1% during the second quarter 2015 over the prior-year period. |
• | Average gross rent per square foot for stabilized mall leases signed in the second quarter 2015 increased 8.7% over the prior gross rent per square foot. |
• | FFO per diluted share, as adjusted, was $0.54 for the second quarter 2015, compared with $0.55 in the prior-year period. |
• | Same-center NOI for the second quarter increased 0.3% in the Total Portfolio and was flat in the Mall Portfolio compared with the prior-year period. |
• | Total portfolio occupancy was 91.0% as of June 30, 2015 compared with 93.5% as of June 30, 2014. |
CHATTANOOGA, Tenn. (July 29, 2015) – CBL & Associates Properties, Inc. (NYSE: CBL) announced results for the second quarter ended June 30, 2015. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure is located at the end of this news release.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Funds from Operations ("FFO") per diluted share | $ | 0.53 | $ | 0.55 | $ | 1.15 | $ | 1.28 | ||||||||
FFO, as adjusted, per diluted share (1) | $ | 0.54 | $ | 0.55 | $ | 1.05 | $ | 1.06 | ||||||||
(1) FFO, as adjusted, for the three months ended June 30, 2015 excludes $3.0 million of expense related to a litigation settlement and a $0.3 million gain on extinguishment of debt. FFO, as adjusted, for the six months ended June 30, 2015 excludes a partial litigation settlement, net of related expenses, of $1.7 million and a $16.6 million gain on investment related to the sale of marketable securities. FFO, as adjusted, for the six months ended June 30, 2014 excludes a partial litigation settlement of $0.8 million and a net gain on extinguishment of debt of $42.7 million primarily related to the foreclosure of the mortgage loan secured by Citadel Mall. |
CBL's President and Chief Executive Officer Stephen Lebovitz commented, "Overall fundamentals in the CBL portfolio remain healthy. Same-center sales increased 4.1% during the second quarter, marking another quarter of impressive growth. Leasing spreads remained strong at 8.7%. Our leasing team has quickly addressed the recent bankruptcy-related store closures, with more than 65% of the space committed or under negotiation. These future store openings will benefit our portfolio in late 2015 and throughout 2016.
"Our portfolio transformation is progressing with the completed sale of two non-core assets as well as the addition of Mayfaire Town Center, a high-quality, high-growth Tier One property. Additionally, we are capitalizing on value-creation opportunities in our existing portfolio with the recent start of anchor redevelopment projects at two centers. The conversion of underperforming anchors into new stores and restaurants will be a significant source of ongoing growth over the next several years, strengthening the individual centers as well as the portfolio overall."
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FFO allocable to common shareholders, as adjusted, for the second quarter 2015 was $91.9 million, or $0.54 per diluted share, compared with $93.0 million, or $0.55 per diluted share, for the second quarter 2014. FFO allocable to the Operating Partnership common unitholders, as adjusted, for the second quarter 2015 was $107.7 million compared with $109.1 million for the second quarter of 2014.
Net income attributable to common shareholders for the second quarter of 2015 was $30.7 million, or $0.18 per diluted share, compared with net income of $26.7 million, or $0.16 per diluted share, for the second quarter of 2014.
Percentage change in same-center Net Operating Income ("NOI")(1):
Three Months Ended June 30, 2015 | |
Portfolio same-center NOI | 0.3% |
Mall same-center NOI | 0.0% |
(1) CBL's definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items of straight line rents and net amortization of acquired above and below market leases. NOI is for real estate properties and excludes the Company's subsidiary that provides maintenance, janitorial and security services. |
MAJOR VARIANCES IMPACTING SAME-CENTER NOI RESULTS FOR THE QUARTER ENDED JUNE 30, 2015
• | Lost income from bankruptcy related store closures resulted in a $0.9 million decline in same-center minimum rents during the quarter. |
• | Percentage rents increased by $0.5 million due to positive sales growth. |
• | Tenant reimbursement increased by $1.5 million, substantially offset by a $1.2 million increase in real estate tax expense. |
• | Property operating expense declined by $0.9 million, primarily as a result of a $0.4 million decline in bad debt expense as well as moderate declines in insurance, payroll and energy expense. |
• | Maintenance and repairs increased by $0.3 million. |
PORTFOLIO OPERATIONAL RESULTS
Occupancy:
As of June 30, | ||||
2015 | 2014 | |||
Portfolio occupancy | 91.0% | 93.5% | ||
Mall portfolio | 90.0% | 93.1% | ||
Same-center stabilized malls | 89.9% | 93.2% | ||
Stabilized malls | 89.9% | 92.9% | ||
Non-stabilized malls (1) | 95.5% | 97.6% | ||
Associated centers | 94.1% | 95.0% | ||
Community centers | 96.8% | 97.0% | ||
(1) Represents occupancy for Fremaux Town Center, The Outlet Shoppes at Atlanta and The Outlet Shoppes of the Bluegrass as of June 30, 2015. Represents The Outlet Shoppes at Oklahoma City and The Outlet Shoppes at Atlanta as of June 30, 2014. |
2 |
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, 2015 | ||
Stabilized Malls | 8.7% | |
New leases | 29.0% | |
Renewal leases | 3.9% |
Same-Center Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:
Twelve Months Ended June 30, | |||||||||
2015 | 2014 | % Change | |||||||
Stabilized mall same-center sales per square foot | $ | 368 | $ | 355 | 3.7% |
TRANSACTIONS
During the second quarter, CBL completed the acquisition of Mayfaire Town Center and Community Center, the premier open-air center located in the affluent coastal market of Wilmington, NC. The property was acquired for a total cash purchase price of $192 million.
During the second quarter, CBL completed the sale of Eastgate Crossing, a 175,000-square-foot community center located in Cincinnati, OH. The gross sales price of $22.8 million included the assumption of a $14.6 million loan secured by the property.
Additionally during the second quarter, CBL completed the sale of Madison Square, a mall in Huntsville, AL, for $5.0 million. The related associated center, Madison Plaza, was sold in July 2015 for $5.7 million.
CBL has additional transactions in various stages. Further updates on the disposition program will be provided on its conference call.
FINANCINGS
During the second quarter, CBL retired the $49.5 million loan secured by Imperial Valley Mall in El Centro, CA, adding the property to its unencumbered pool. The loan bore an interest rate of 4.99%.
Subsequent to the end of the second quarter, CBL retired four loans totaling $322.7 million using availability under its lines of credit. The weighted average interest rate for the four loans was 5.0%. The loans were secured individually by high-quality properties including CherryVale Mall in Rockford, IL, East Towne Mall in Madison, WI, West Towne Mall in Madison, WI, and Brookfield Square in Milwaukee, WI.
OUTLOOK AND GUIDANCE
Based on its current outlook, the Company is increasing guidance for FFO, as adjusted, to the range of $2.25 - $2.32 per diluted share. The guidance increase includes contributions from the acquisition of Mayfaire Town Center and Community Center, partially offset by an increased G&A expense assumption for the remainder of 2015 due to consulting and personnel expense related to technology and process improvements. CBL's guidance also assumes a same-center NOI growth range of 0% - 2.0% in 2015.
The guidance also assumes the following:
• | $2.0 million to $4.0 million of outparcel sales; |
• | No additional unannounced acquisition or disposition activity; |
• | No unannounced capital markets activity; |
• | Year-end occupancy 150-200 bps lower than the prior year-end. |
3 |
Low | High | ||||||
Expected diluted earnings per common share | $ | 0.81 | $ | 0.88 | |||
Adjust to fully converted shares from common shares | (0.12 | ) | (0.13 | ) | |||
Expected earnings per diluted, fully converted common share | 0.69 | 0.75 | |||||
Add: depreciation and amortization | 1.58 | 1.58 | |||||
Less: Gain on operating properties, net of taxes | (0.06 | ) | (0.06 | ) | |||
Add: Loss on impairment | 0.01 | 0.01 | |||||
Add: noncontrolling interest in earnings of Operating Partnership | 0.12 | 0.13 | |||||
Expected FFO per diluted, fully converted common share | 2.34 | 2.41 | |||||
Adjustment for gain on investment | (0.08 | ) | (0.08 | ) | |||
Adjustment for litigation settlement, net of related expenses | (0.01 | ) | (0.01 | ) | |||
Expected adjusted FFO per diluted, fully converted common share | $ | 2.25 | $ | 2.32 |
INVESTOR CONFERENCE CALL AND WEBCAST
CBL & Associates Properties, Inc. will conduct a conference call at 11:00 a.m. ET on Thursday, July 30, 2015, to discuss its second quarter results. The number to call for this interactive teleconference is (888) 317-6003 or (412) 317-6061 and entering the confirmation number, 9411478. A replay of the conference call will be available through August 6, 2015, by dialing (877) 344-7529 or (412) 317-0088 and entering the confirmation number, 10065318. A transcript of the Company's prepared remarks will be furnished on a Form 8-K following the conference call.
To receive the CBL & Associates Properties, Inc., second quarter earnings release and supplemental information please visit the Investing section of our website at cblproperties.com or contact Investor Relations at 423-490-8312.
The Company will also provide an online webcast and rebroadcast of its 2015 second quarter earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Thursday, July 30, 2015 beginning at 11:00 a.m. ET. The online replay will follow shortly after the call.
ABOUT CBL & ASSOCIATES PROPERTIES, INC.
CBL is one of the largest and most active owners and developers of malls and shopping centers in the United States. CBL owns, holds interests in or manages 147 properties, including 90 regional malls/open-air centers. The properties are located in 30 states and total 84.0 million square feet including 6.5 million square feet of non-owned shopping centers managed for third parties. Headquartered in Chattanooga, TN, CBL has regional offices in Boston (Waltham), MA, Dallas (Irving), TX, and St. Louis, MO. Additional information can be found at cblproperties.com.
NON-GAAP FINANCIAL MEASURES
Funds From Operations
FFO is a widely used measure of the operating performance of real estate companies that supplements net income (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
4 |
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 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 outstanding during the period.
FFO does not represent cash flows from operations as defined by accounting principles generally accepted in the United States, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company’s operating performance or to cash flow as a measure of liquidity.
As described above, during the second quarter of 2015, the Company recognized $3.0 million of expense related to a litigation settlement and a $0.3 million gain on extinguishment of debt. Additionally, during the six months ended June 30, 2015, the Company recognized a $16.6 million gain on investment related to the sale of marketable securities and received income of $1.7 million, net of related expense, as a partial settlement of ongoing litigation. During the six months ended June 30, 2014, the Company recognized a $42.7 million net gain on the extinguishment of debt primarily related to the foreclosure of the mortgage loan encumbering Citadel Mall and received income of $0.8 million as a partial settlement of ongoing litigation. Considering the significance and nature of these items, the Company believes it is important to identify their impact on its FFO measures for readers 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.
Same-center Net Operating Income
NOI is a supplemental 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. We believe that presenting NOI and same-center NOI (described below) based on our Operating Partnership’s pro rata share of both consolidated and unconsolidated Properties is useful since we conduct substantially all of our business through our Operating Partnership and, therefore, it reflects the performance of the Properties in absolute terms regardless of the ratio of ownership interests of our 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 NOI may not be comparable to that of other companies.
Since NOI includes only those revenues and expenses related to the operations of its shopping center and other properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates and operating costs and the impact of those trends on the Company's results of operations. The Company’s calculation of same-center NOI also excludes lease termination income, straight-line rent adjustments, and amortization of above and below market lease intangibles in order to enhance the comparability of results from one period to another, as these items can be impacted by one-time events that may distort same-center NOI trends and may result in same-center NOI that is not indicative of the ongoing operations of the Company’s shopping center and other properties. A reconciliation of same-center NOI to net income is located at the end of this earnings release.
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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 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.
6 |
CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three Months and Six Months Ended June 30, 2015
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
REVENUES: | |||||||||||||||
Minimum rents | $ | 166,428 | $ | 167,631 | $ | 335,509 | $ | 336,908 | |||||||
Percentage rents | 2,412 | 1,824 | 6,549 | 5,430 | |||||||||||
Other rents | 4,421 | 4,613 | 9,592 | 9,895 | |||||||||||
Tenant reimbursements | 70,224 | 70,774 | 142,357 | 142,992 | |||||||||||
Management, development and leasing fees | 2,663 | 2,813 | 5,441 | 5,948 | |||||||||||
Other | 7,695 | 9,278 | 15,304 | 17,003 | |||||||||||
Total revenues | 253,843 | 256,933 | 514,752 | 518,176 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Property operating | 32,866 | 35,527 | 71,770 | 75,538 | |||||||||||
Depreciation and amortization | 71,239 | 70,609 | 147,505 | 139,692 | |||||||||||
Real estate taxes | 22,549 | 22,089 | 45,334 | 43,436 | |||||||||||
Maintenance and repairs | 12,407 | 12,623 | 26,623 | 28,788 | |||||||||||
General and administrative | 16,215 | 11,336 | 33,445 | 26,109 | |||||||||||
Loss on impairment | 2,781 | 106 | 2,781 | 17,256 | |||||||||||
Other | 5,928 | 7,390 | 12,404 | 13,935 | |||||||||||
Total operating expenses | 163,985 | 159,680 | 339,862 | 344,754 | |||||||||||
Income from operations | 89,858 | 97,253 | 174,890 | 173,422 | |||||||||||
Interest and other income | 389 | 1,544 | 5,663 | 3,072 | |||||||||||
Interest expense | (58,754 | ) | (59,277 | ) | (117,911 | ) | (119,783 | ) | |||||||
Gain on extinguishment of debt | 256 | — | 256 | 42,660 | |||||||||||
Gain on investment | — | — | 16,560 | — | |||||||||||
Equity in earnings of unconsolidated affiliates | 4,881 | 3,418 | 8,704 | 7,102 | |||||||||||
Income tax provision | (2,472 | ) | (786 | ) | (1,556 | ) | (1,183 | ) | |||||||
Income from continuing operations before gain on sales of real estate assets | 34,158 | 42,152 | 86,606 | 105,290 | |||||||||||
Gain on sales of real estate assets | 14,173 | 1,925 | 14,930 | 3,079 | |||||||||||
Income from continuing operations | 48,331 | 44,077 | 101,536 | 108,369 | |||||||||||
Operating loss of discontinued operations | — | (59 | ) | — | (558 | ) | |||||||||
Gain on discontinued operations | — | 107 | — | 90 | |||||||||||
Net income | 48,331 | 44,125 | 101,536 | 107,901 | |||||||||||
Net income attributable to noncontrolling interests in: | |||||||||||||||
Operating Partnership | (4,946 | ) | (4,620 | ) | (11,118 | ) | (12,271 | ) | |||||||
Other consolidated subsidiaries | (1,490 | ) | (1,547 | ) | (2,359 | ) | (2,378 | ) | |||||||
Net income attributable to the Company | 41,895 | 37,958 | 88,059 | 93,252 | |||||||||||
Preferred dividends | (11,223 | ) | (11,223 | ) | (22,446 | ) | (22,446 | ) | |||||||
Net income attributable to common shareholders | $ | 30,672 | $ | 26,735 | $ | 65,613 | $ | 70,806 | |||||||
Basic per share data attributable to common shareholders: | |||||||||||||||
Income from continuing operations, net of preferred dividends | $ | 0.18 | $ | 0.16 | $ | 0.38 | $ | 0.42 | |||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net income attributable to common shareholders | $ | 0.18 | $ | 0.16 | $ | 0.38 | $ | 0.42 | |||||||
Weighted-average common shares outstanding | 170,494 | 170,267 | 170,457 | 170,232 | |||||||||||
Diluted per share data attributable to common shareholders: | |||||||||||||||
Income from continuing operations, net of preferred dividends | $ | 0.18 | $ | 0.16 | $ | 0.38 | $ | 0.42 | |||||||
Discontinued operations | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
Net income attributable to common shareholders | $ | 0.18 | $ | 0.16 | $ | 0.38 | $ | 0.42 | |||||||
Weighted-average common and potential dilutive common shares outstanding | 170,494 | 170,267 | 170,457 | 170,232 | |||||||||||
Amounts attributable to common shareholders: | |||||||||||||||
Income from continuing operations, net of preferred dividends | $ | 30,672 | $ | 26,694 | $ | 65,613 | $ | 71,205 | |||||||
Discontinued operations | — | 41 | — | (399 | ) | ||||||||||
Net income attributable to common shareholders | $ | 30,672 | $ | 26,735 | $ | 65,613 | $ | 70,806 |
7
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three Months and Six Months Ended June 30, 2015
The Company's reconciliation of net income 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, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income attributable to common shareholders | $ | 30,672 | $ | 26,735 | $ | 65,613 | $ | 70,806 | |||||||
Noncontrolling interest in income of Operating Partnership | 4,946 | 4,620 | 11,118 | 12,271 | |||||||||||
Depreciation and amortization expense of: | |||||||||||||||
Consolidated properties | 71,239 | 70,609 | 147,505 | 139,692 | |||||||||||
Unconsolidated affiliates | 10,303 | 10,256 | 20,620 | 20,117 | |||||||||||
Non-real estate assets | (731 | ) | (603 | ) | (1,573 | ) | (1,197 | ) | |||||||
Noncontrolling interests' share of depreciation and amortization | (2,151 | ) | (1,569 | ) | (4,782 | ) | (3,102 | ) | |||||||
Loss on impairment | 2,781 | 106 | 2,781 | 17,937 | |||||||||||
Gain on depreciable property, net of taxes | (12,129 | ) | (952 | ) | (12,196 | ) | (934 | ) | |||||||
Gain on discontinued operations, net of taxes | — | (87 | ) | — | (87 | ) | |||||||||
FFO allocable to Operating Partnership common unitholders | 104,930 | 109,115 | 229,086 | 255,503 | |||||||||||
Litigation settlements, net of related expenses (1) | 3,004 | — | (1,654 | ) | (800 | ) | |||||||||
Gain on investment | — | — | (16,560 | ) | — | ||||||||||
Gain on extinguishment of debt | (256 | ) | — | (256 | ) | (42,660 | ) | ||||||||
FFO allocable to Operating Partnership common unitholders, as adjusted | $ | 107,678 | $ | 109,115 | $ | 210,616 | $ | 212,043 | |||||||
FFO per diluted share | $ | 0.53 | $ | 0.55 | $ | 1.15 | $ | 1.28 | |||||||
FFO, as adjusted, per diluted share | $ | 0.54 | $ | 0.55 | $ | 1.05 | $ | 1.06 | |||||||
Weighted average common and potential dilutive common shares outstanding with Operating Partnership units fully converted | 199,751 | 199,726 | 199,716 | 199,734 | |||||||||||
Reconciliation of FFO allocable to Operating Partnership common unitholders to FFO allocable to common shareholders: | |||||||||||||||
FFO allocable to Operating Partnership common unitholders | $ | 104,930 | $ | 109,115 | $ | 229,086 | $ | 255,503 | |||||||
Percentage allocable to common shareholders (2) | 85.35 | % | 85.25 | % | 85.35 | % | 85.23 | % | |||||||
FFO allocable to common shareholders | $ | 89,558 | $ | 93,021 | $ | 195,525 | $ | 217,765 | |||||||
FFO allocable to Operating Partnership common unitholders, as adjusted | $ | 107,678 | $ | 109,115 | $ | 210,616 | $ | 212,043 | |||||||
Percentage allocable to common shareholders (2) | 85.35 | % | 85.25 | % | 85.35 | % | 85.23 | % | |||||||
FFO allocable to common shareholders, as adjusted | $ | 91,903 | $ | 93,021 | $ | 179,761 | $ | 180,724 | |||||||
(1) Litigation settlement is included in Interest and Other Income in the Consolidated Statements of Operations. Litigation expense, including settlements paid, is included in General and Administrative expense in the Consolidated Statements of Operations. | |||||||||||||||
(2) 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 12. | |||||||||||||||
8
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
SUPPLEMENTAL FFO INFORMATION: | |||||||||||||||
Lease termination fees | $ | 1,731 | $ | 419 | $ | 3,037 | $ | 1,351 | |||||||
Lease termination fees per share | $ | 0.01 | $ | — | $ | 0.02 | $ | 0.01 | |||||||
Straight-line rental income | $ | 879 | $ | 801 | $ | 1,563 | $ | 1,283 | |||||||
Straight-line rental income per share | $ | — | $ | — | $ | 0.01 | $ | 0.01 | |||||||
Gains on outparcel sales | $ | 1,416 | $ | 1,000 | $ | 2,523 | $ | 2,145 | |||||||
Gains on outparcel sales per share | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||
Net amortization of acquired above- and below-market leases | $ | 192 | $ | 188 | $ | 838 | $ | 405 | |||||||
Net amortization of acquired above- and below-market leases per share | $ | — | $ | — | $ | — | $ | — | |||||||
Net amortization of debt premiums and discounts | $ | 450 | $ | 539 | $ | 1,033 | $ | 1,080 | |||||||
Net amortization of debt premiums and discounts per share | $ | — | $ | — | $ | 0.01 | $ | 0.01 | |||||||
Income tax provision | $ | (2,472 | ) | $ | (786 | ) | $ | (1,556 | ) | $ | (1,183 | ) | |||
Income tax provision per share | $ | (0.01 | ) | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | ||||
Gain on extinguishment of debt | $ | 256 | $ | — | $ | 256 | $ | 42,660 | |||||||
Gain on extinguishment of debt per share | $ | — | $ | — | $ | — | $ | 0.21 | |||||||
Gain on investment | $ | — | $ | — | $ | 16,560 | $ | — | |||||||
Gain on investment per share | $ | — | $ | — | $ | 0.08 | $ | — | |||||||
Interest capitalized | $ | 1,024 | $ | 1,457 | $ | 2,232 | $ | 2,866 | |||||||
Interest capitalized per share | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||
Litigation settlements, net of related expenses | $ | (3,004 | ) | $ | — | $ | 1,654 | $ | 800 | ||||||
Litigation settlements, net of related expenses, per share | $ | (0.02 | ) | $ | — | $ | 0.01 | $ | — |
As of June 30, | |||||||
2015 | 2014 | ||||||
Straight-line rent receivable | $ | 65,210 | $ | 63,411 |
9
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three Months and Six Months Ended June 30, 2015
Same-center Net Operating Income
(Dollars in thousands)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 48,331 | $ | 44,125 | $ | 101,536 | $ | 107,901 | |||||||
Adjustments: | |||||||||||||||
Depreciation and amortization | 71,239 | 70,609 | 147,505 | 139,692 | |||||||||||
Depreciation and amortization from unconsolidated affiliates | 10,303 | 10,256 | 20,620 | 20,117 | |||||||||||
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries | (2,151 | ) | (1,569 | ) | (4,782 | ) | (3,102 | ) | |||||||
Interest expense | 58,754 | 59,277 | 117,911 | 119,783 | |||||||||||
Interest expense from unconsolidated affiliates | 9,587 | 9,662 | 19,272 | 19,153 | |||||||||||
Noncontrolling interests' share of interest expense in other consolidated subsidiaries | (1,702 | ) | (1,307 | ) | (3,397 | ) | (2,618 | ) | |||||||
Abandoned projects expense | — | 33 | 125 | 34 | |||||||||||
Gain on sales of real estate assets | (14,173 | ) | (1,925 | ) | (14,930 | ) | (3,079 | ) | |||||||
Gain on sales of real estate assets of unconsolidated affiliates | (601 | ) | — | (1,164 | ) | — | |||||||||
Gain on investment | — | — | (16,560 | ) | — | ||||||||||
Gain on extinguishment of debt | (256 | ) | — | (256 | ) | (42,660 | ) | ||||||||
Loss on impairment | 2,781 | 106 | 2,781 | 17,256 | |||||||||||
Loss on impairment from discontinued operations | — | — | — | 681 | |||||||||||
Income tax provision | 2,472 | 786 | 1,556 | 1,183 | |||||||||||
Lease termination fees | (1,731 | ) | (419 | ) | (3,037 | ) | (1,351 | ) | |||||||
Straight-line rent and above- and below-market lease amortization | (1,071 | ) | (989 | ) | (2,401 | ) | (1,688 | ) | |||||||
Net income attributable to noncontrolling interest in other consolidated subsidiaries | (1,490 | ) | (1,547 | ) | (2,359 | ) | (2,378 | ) | |||||||
Gain on discontinued operations | — | (107 | ) | — | (90 | ) | |||||||||
General and administrative expenses | 16,215 | 11,336 | 33,445 | 26,109 | |||||||||||
Management fees and non-property level revenues | (5,580 | ) | (7,216 | ) | (17,038 | ) | (14,921 | ) | |||||||
Operating Partnership's share of property NOI | 190,927 | 191,111 | 378,827 | 380,022 | |||||||||||
Non-comparable NOI | (11,413 | ) | (12,081 | ) | (23,125 | ) | (25,749 | ) | |||||||
Total same-center NOI (1) | $ | 179,514 | $ | 179,030 | $ | 355,702 | $ | 354,273 | |||||||
Total same-center NOI percentage change | 0.3 | % | 0.4 | % | |||||||||||
Malls | $ | 163,752 | $ | 163,826 | $ | 324,394 | $ | 324,478 | |||||||
Associated centers | 8,079 | 7,650 | 15,911 | 15,198 | |||||||||||
Community centers | 5,597 | 5,400 | 11,141 | 10,515 | |||||||||||
Offices and other | 2,086 | 2,154 | 4,256 | 4,082 | |||||||||||
Total same-center NOI (1) | $ | 179,514 | $ | 179,030 | $ | 355,702 | $ | 354,273 | |||||||
Percentage Change: | |||||||||||||||
Malls | 0.0 | % | 0.0 | % | |||||||||||
Associated centers | 5.6 | % | 4.7 | % | |||||||||||
Community centers | 3.6 | % | 6.0 | % | |||||||||||
Offices and other | (3.2 | )% | 4.3 | % | |||||||||||
Total same-center NOI (1) | 0.3 | % | 0.4 | % | |||||||||||
(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, and amortization of above and below market lease intangibles. Same-center NOI is for real estate properties and does not include the results of operations of the Company's subsidiary that provides janitorial, security and maintenance services. We include a property in our same-center pool when we own all or a portion of the property as of June 30, 2015, 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, 2015. New properties are excluded from same-center NOI, until they meet this criteria. The only properties excluded from the same-center pool that would otherwise meet this criteria are properties which are under major redevelopment, being considered for repositioning or where we intend to renegotiate the terms of the debt secured by the related property. |
10
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2015 and 2014
Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
As of June 30, 2015 | ||||||||||||
Fixed Rate | Variable Rate | Total | ||||||||||
Consolidated debt | $ | 3,901,335 | $ | 932,870 | $ | 4,834,205 | ||||||
Noncontrolling interests' share of consolidated debt | (113,536 | ) | (7,033 | ) | (120,569 | ) | ||||||
Company's share of unconsolidated affiliates' debt | 667,815 | 104,618 | 772,433 | |||||||||
Company's share of consolidated and unconsolidated debt | $ | 4,455,614 | $ | 1,030,455 | $ | 5,486,069 | ||||||
Weighted average interest rate | 5.45 | % | 1.72 | % | 4.75 | % | ||||||
As of June 30, 2014 | ||||||||||||
Fixed Rate | Variable Rate | Total | ||||||||||
Consolidated debt | $ | 3,876,236 | $ | 934,575 | $ | 4,810,811 | ||||||
Noncontrolling interests' share of consolidated debt | (89,872 | ) | (8,535 | ) | (98,407 | ) | ||||||
Company's share of unconsolidated affiliates' debt | 649,646 | 105,706 | 755,352 | |||||||||
Company's share of consolidated and unconsolidated debt | $ | 4,436,010 | $ | 1,031,746 | $ | 5,467,756 | ||||||
Weighted average interest rate | 5.47 | % | 1.73 | % | 4.76 | % |
Debt-To-Total-Market Capitalization Ratio as of June 30, 2015
(In thousands, except stock price)
Shares Outstanding | Stock Price (1) | Value | |||||||||
Common stock and operating partnership units | 199,750 | $ | 16.20 | $ | 3,235,950 | ||||||
7.375% Series D Cumulative Redeemable Preferred Stock | 1,815 | 250.00 | 453,750 | ||||||||
6.625% Series E Cumulative Redeemable Preferred Stock | 690 | 250.00 | 172,500 | ||||||||
Total market equity | 3,862,200 | ||||||||||
Company's share of total debt | 5,486,069 | ||||||||||
Total market capitalization | $ | 9,348,269 | |||||||||
Debt-to-total-market capitalization ratio | 58.7 | % | |||||||||
(1) Stock price for common stock and Operating Partnership units equals the closing price of the common stock on June 30, 2015. The stock prices for the preferred stocks represent the liquidation preference of each respective series. |
11
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2015 and 2014
Reconciliation of Shares and Operating Partnership Units Outstanding
(In thousands)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2015: | Basic | Diluted | Basic | Diluted | ||||||||
Weighted average shares - EPS | 170,494 | 170,494 | 170,457 | 170,457 | ||||||||
Weighted average Operating Partnership units | 29,257 | 29,257 | 29,259 | 29,259 | ||||||||
Weighted average shares- FFO | 199,751 | 199,751 | 199,716 | 199,716 | ||||||||
2014: | ||||||||||||
Weighted average shares - EPS | 170,267 | 170,267 | 170,232 | 170,232 | ||||||||
Weighted average Operating Partnership units | 29,459 | 29,459 | 29,502 | 29,502 | ||||||||
Weighted average shares- FFO | 199,726 | 199,726 | 199,734 | 199,734 |
Dividend Payout Ratio
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Weighted average cash dividend per share | $ | 0.27279 | $ | 0.25313 | $ | 0.54558 | $ | 0.50625 | ||||||||
FFO as adjusted, per diluted fully converted share | $ | 0.54 | $ | 0.55 | $ | 1.05 | $ | 1.06 | ||||||||
Dividend payout ratio | 50.5 | % | 46.0 | % | 52.0 | % | 47.8 | % |
12
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2015
Consolidated Balance Sheets (Unaudited; in thousands, except share data) | |||||||
As of | |||||||
June 30, 2015 | December 31, 2014 | ||||||
ASSETS | |||||||
Real estate assets: | |||||||
Land | $ | 893,149 | $ | 847,829 | |||
Buildings and improvements | 7,363,728 | 7,221,387 | |||||
8,256,877 | 8,069,216 | ||||||
Accumulated depreciation | (2,335,522 | ) | (2,240,007 | ) | |||
5,921,355 | 5,829,209 | ||||||
Held for sale | 2,718 | — | |||||
Developments in progress | 128,381 | 117,966 | |||||
Net investment in real estate assets | 6,052,454 | 5,947,175 | |||||
Cash and cash equivalents | 30,601 | 37,938 | |||||
Receivables: | |||||||
Tenant, net of allowance for doubtful accounts of $1,837 and $2,368 in 2015 and 2014, respectively | 83,296 | 81,338 | |||||
Other, net of allowance for doubtful accounts of $1,245 and $1,285 in 2015 and 2014, respectively | 21,641 | 22,577 | |||||
Mortgage and other notes receivable | 19,546 | 19,811 | |||||
Investments in unconsolidated affiliates | 280,460 | 281,449 | |||||
Intangible lease assets and other assets | 214,205 | 226,011 | |||||
$ | 6,702,203 | $ | 6,616,299 | ||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |||||||
Mortgage and other indebtedness | $ | 4,834,205 | $ | 4,700,460 | |||
Accounts payable and accrued liabilities | 327,240 | 328,352 | |||||
Total liabilities | 5,161,445 | 5,028,812 | |||||
Commitments and contingencies | |||||||
Redeemable noncontrolling partnership interests | 42,944 | 37,559 | |||||
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, 170,492,533 and 170,260,273 issued and outstanding in 2015 and 2014, respectively | 1,705 | 1,703 | |||||
Additional paid-in capital | 1,957,228 | 1,958,198 | |||||
Accumulated other comprehensive income | 1,109 | 13,411 | |||||
Dividends in excess of cumulative earnings | (591,534 | ) | (566,785 | ) | |||
Total shareholders' equity | 1,368,533 | 1,406,552 | |||||
Noncontrolling interests | 129,281 | 143,376 | |||||
Total equity | 1,497,814 | 1,549,928 | |||||
$ | 6,702,203 | $ | 6,616,299 |
13
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2015
Condensed Combined Financial Statements - Unconsolidated Affiliates
(Unaudited; in thousands)
As of | |||||||
June 30, 2015 | December 31, 2014 | ||||||
ASSETS: | |||||||
Investment in real estate assets | $ | 2,303,724 | $ | 2,266,252 | |||
Accumulated depreciation | (648,705 | ) | (619,558 | ) | |||
1,655,019 | 1,646,694 | ||||||
Developments in progress | 68,749 | 75,877 | |||||
Net investment in real estate assets | 1,723,768 | 1,722,571 | |||||
Other assets | 169,288 | 170,554 | |||||
Total assets | $ | 1,893,056 | $ | 1,893,125 | |||
LIABILITIES: | |||||||
Mortgage and other indebtedness | $ | 1,517,877 | $ | 1,512,826 | |||
Other liabilities | 42,211 | 42,517 | |||||
Total liabilities | 1,560,088 | 1,555,343 | |||||
OWNERS' EQUITY: | |||||||
The Company | 194,296 | 198,261 | |||||
Other investors | 138,672 | 139,521 | |||||
Total owners' equity | 332,968 | 337,782 | |||||
Total liabilities and owners’ equity | $ | 1,893,056 | $ | 1,893,125 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Total revenues | $ | 63,111 | $ | 61,400 | $ | 125,583 | $ | 123,221 | |||||||
Depreciation and amortization | (19,641 | ) | (19,230 | ) | (39,122 | ) | (38,017 | ) | |||||||
Operating expenses | (17,468 | ) | (17,488 | ) | (36,774 | ) | (35,669 | ) | |||||||
Income from operations | 26,002 | 24,682 | 49,687 | 49,535 | |||||||||||
Interest income | 335 | 339 | 667 | 679 | |||||||||||
Interest expense | (18,589 | ) | (18,746 | ) | (37,383 | ) | (37,304 | ) | |||||||
Gain on sales of real estate assets | 619 | — | 1,434 | — | |||||||||||
Net income | $ | 8,367 | $ | 6,275 | $ | 14,405 | $ | 12,910 |
Company's Share for the Three Months Ended June 30, | Company's Share for the Six Months Ended June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Total revenues | $ | 32,958 | $ | 32,066 | $ | 65,793 | $ | 64,018 | |||||||
Depreciation and amortization | (10,303 | ) | (10,256 | ) | (20,620 | ) | (20,117 | ) | |||||||
Operating expenses | (9,045 | ) | (8,989 | ) | (18,873 | ) | (18,164 | ) | |||||||
Income from operations | 13,610 | 12,821 | 26,300 | 25,737 | |||||||||||
Interest income | 257 | 259 | 512 | 518 | |||||||||||
Interest expense | (9,587 | ) | (9,662 | ) | (19,272 | ) | (19,153 | ) | |||||||
Gain on sales of real estate assets | 601 | — | 1,164 | — | |||||||||||
Net income | $ | 4,881 | $ | 3,418 | $ | 8,704 | $ | 7,102 |
14
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three Months and Six Months Ended June 30, 2015
The Company presents the ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to interest because the Company believes that the EBITDA to interest coverage ratio, along with cash flows from operating activities, investing activities and financing activities, provides investors an additional indicator of the Company's ability to incur and service debt.
Ratio of EBITDA to Interest Expense
(Dollars in thousands)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
EBITDA: | |||||||||||||||
Net income | $ | 48,331 | $ | 44,125 | $ | 101,536 | $ | 107,901 | |||||||
Adjustments: | |||||||||||||||
Depreciation and amortization | 71,239 | 70,609 | 147,505 | 139,692 | |||||||||||
Depreciation and amortization from unconsolidated affiliates | 10,303 | 10,256 | 20,620 | 20,117 | |||||||||||
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries | (2,151 | ) | (1,569 | ) | (4,782 | ) | (3,102 | ) | |||||||
Interest expense | 58,754 | 59,277 | 117,911 | 119,783 | |||||||||||
Interest expense from unconsolidated affiliates | 9,587 | 9,662 | 19,272 | 19,153 | |||||||||||
Noncontrolling interests' share of interest expense in other consolidated subsidiaries | (1,702 | ) | (1,307 | ) | (3,397 | ) | (2,618 | ) | |||||||
Income and other taxes | 3,267 | 1,452 | 2,550 | 2,503 | |||||||||||
Gain on investment | — | — | (16,560 | ) | — | ||||||||||
Gain on extinguishment of debt | (256 | ) | — | (256 | ) | (42,660 | ) | ||||||||
Loss on impairment | 2,781 | 106 | 2,781 | 17,256 | |||||||||||
Loss on impairment from discontinued operations | — | — | — | 681 | |||||||||||
Abandoned projects | — | 33 | 125 | 34 | |||||||||||
Net income attributable to noncontrolling interest in earnings of other consolidated subsidiaries | (1,490 | ) | (1,547 | ) | (2,359 | ) | (2,378 | ) | |||||||
Gain on depreciable property | (13,403 | ) | (952 | ) | (13,470 | ) | (934 | ) | |||||||
Gain on discontinued operations | — | (89 | ) | — | (90 | ) | |||||||||
Company's share of total EBITDA | $ | 185,260 | $ | 190,056 | $ | 371,476 | $ | 375,338 | |||||||
Interest Expense: | |||||||||||||||
Interest expense | $ | 58,754 | $ | 59,277 | $ | 117,911 | $ | 119,783 | |||||||
Interest expense from unconsolidated affiliates | 9,587 | 9,662 | 19,272 | 19,153 | |||||||||||
Noncontrolling interests' share of interest expense in other consolidated subsidiaries | (1,702 | ) | (1,307 | ) | (3,397 | ) | (2,618 | ) | |||||||
Company's share of total interest expense | $ | 66,639 | $ | 67,632 | $ | 133,786 | $ | 136,318 | |||||||
Ratio of EBITDA to Interest Expense | 2.78 | 2.81 | 2.78 | 2.75 | |||||||||||
15
Reconciliation of EBITDA to Cash Flows Provided By Operating Activities (In thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Company's share of total EBITDA | $ | 185,260 | $ | 190,056 | $ | 371,476 | $ | 375,338 | |||||||
Interest expense | (58,754 | ) | (59,277 | ) | (117,911 | ) | (119,783 | ) | |||||||
Noncontrolling interests' share of interest expense in other consolidated subsidiaries | 1,702 | 1,307 | 3,397 | 2,618 | |||||||||||
Income and other taxes | (3,267 | ) | (1,452 | ) | (2,550 | ) | (2,503 | ) | |||||||
Net amortization of deferred financing costs and debt premiums and discounts | 1,048 | 1,123 | 2,625 | 3,357 | |||||||||||
Net amortization of intangible lease assets and liabilities | 208 | 138 | 33 | 267 | |||||||||||
Depreciation and interest expense from unconsolidated affiliates | (19,890 | ) | (19,918 | ) | (39,892 | ) | (39,270 | ) | |||||||
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries | 2,151 | 1,569 | 4,782 | 3,102 | |||||||||||
Noncontrolling interests in earnings of other consolidated subsidiaries | 1,490 | 1,546 | 2,359 | 2,378 | |||||||||||
Gains on outparcel sales | (770 | ) | (990 | ) | (1,460 | ) | (2,145 | ) | |||||||
Equity in earnings of unconsolidated affiliates | (4,881 | ) | (3,418 | ) | (8,704 | ) | (7,102 | ) | |||||||
Distributions of earnings from unconsolidated affiliates | 5,242 | 5,930 | 9,780 | 8,965 | |||||||||||
Share-based compensation expense | 918 | 631 | 3,406 | 2,605 | |||||||||||
Provision for doubtful accounts | 566 | 706 | 1,938 | 1,912 | |||||||||||
Change in deferred tax assets | (354 | ) | (133 | ) | 153 | 316 | |||||||||
Changes in operating assets and liabilities | 2,990 | 1,352 | (10,039 | ) | (23,939 | ) | |||||||||
Cash flows provided by operating activities | $ | 113,659 | $ | 119,170 | $ | 219,393 | $ | 206,116 |
16
Supplemental Financial And Operating Information
As of June 30, 2015
Schedule of Mortgage and Other Indebtedness
(Dollars in thousands )
Property | Location | Original Maturity Date | Optional Extended Maturity Date | Interest Rate | Balance | Balance | ||||||||||
Fixed | Variable | |||||||||||||||
Operating Properties: | ||||||||||||||||
CherryVale Mall | Rockford, IL | Oct-15 | 5.00% | $ | 77,198 | $ | 77,198 | $ | — | |||||||
Brookfield Square | Brookfield, WI | Nov-15 | 5.08% | 86,621 | 86,621 | — | ||||||||||
East Towne Mall | Madison, WI | Nov-15 | 5.00% | 65,856 | 65,856 | — | ||||||||||
West Towne Mall | Madison, WI | Nov-15 | 5.00% | 93,021 | 93,021 | — | ||||||||||
Eastland Mall | Bloomington, IL | Dec-15 | 5.85% | 59,400 | 59,400 | — | ||||||||||
Hickory Point Mall | Decatur, IL | Dec-15 | 5.85% | 27,989 | 27,989 | — | ||||||||||
The Outlet Shoppes at Gettysburg | Gettysburg, PA | Feb-16 | 5.87% | 38,249 | 38,249 | — | ||||||||||
CoolSprings Crossing | Nashville, TN | Apr-16 | 4.54% | 11,696 | (1 | ) | 11,696 | — | ||||||||
Gunbarrel Pointe | Chattanooga, TN | Apr-16 | 4.64% | 10,421 | (2 | ) | 10,421 | — | ||||||||
Stroud Mall | Stroud, PA | Apr-16 | 4.59% | 31,297 | (3 | ) | 31,297 | — | ||||||||
York Galleria | York, PA | Apr-16 | 4.55% | 49,973 | (4 | ) | 49,973 | — | ||||||||
Statesboro Crossing | Statesboro, GA | Jun-16 | Jun-18 | 1.99% | 11,149 | — | 11,149 | |||||||||
Greenbrier Mall | Chesapeake, VA | Aug-16 | 5.91% | 73,052 | 73,052 | — | ||||||||||
Hamilton Place | Chattanooga, TN | Aug-16 | 5.86% | 100,441 | 100,441 | — | ||||||||||
Midland Mall | Midland, MI | Aug-16 | 6.10% | 32,804 | 32,804 | — | ||||||||||
Chesterfield Mall | St. Louis, MO | Sep-16 | 5.74% | 140,000 | 140,000 | — | ||||||||||
Dakota Square Mall | Minot, ND | Nov-16 | 6.23% | 56,211 | 56,211 | — | ||||||||||
Southaven Towne Center | Southaven, MS | Jan-17 | 5.50% | 39,551 | 39,551 | — | ||||||||||
Cary Towne Center | Cary, NC | Mar-17 | 8.50% | 49,956 | 49,956 | — | ||||||||||
Acadiana Mall | Lafayette, LA | Apr-17 | 5.67% | 130,574 | 130,574 | — | ||||||||||
Hamilton Corner | Chattanooga, TN | Apr-17 | 5.67% | 14,795 | 14,795 | — | ||||||||||
Layton Hills Mall | Layton, UT | Apr-17 | 5.66% | 93,314 | 93,314 | — | ||||||||||
The Plaza at Fayette Mall | Lexington, KY | Apr-17 | 5.67% | 38,547 | 38,547 | — | ||||||||||
The Shoppes at St. Clair Square | Fairview Heights, IL | Apr-17 | 5.67% | 19,536 | 19,536 | — | ||||||||||
The Outlet Shoppes at El Paso | El Paso, TX | Dec-17 | 7.06% | 63,981 | 63,981 | — | ||||||||||
Kirkwood Mall | Bismarck, ND | Apr-18 | 5.75% | 38,937 | 38,937 | — | ||||||||||
The Outlet Shoppes at El Paso Phase II | El Paso, TX | Apr-18 | 2.94% | 6,760 | — | 6,760 | ||||||||||
Hanes Mall | Winston-Salem, NC | Oct-18 | 6.99% | 150,324 | 150,324 | — | ||||||||||
The Outlet Shoppes at Oklahoma City Phase II | Oklahoma City, OK | Apr-19 | Apr-21 | 2.93% | 5,831 | — | 5,831 | |||||||||
The Outlet Shoppes at Oklahoma City Phase III | Oklahoma City, OK | Apr-19 | Apr-21 | 2.93% | 2,894 | — | 2,894 | |||||||||
Honey Creek Mall | Terre Haute, IN | Jul-19 | 8.00% | 28,442 | 28,442 | — | ||||||||||
Volusia Mall | Daytona Beach, FL | Jul-19 | 8.00% | 48,927 | 48,927 | — | ||||||||||
The Outlet Shoppes at Atlanta - Parcel Development | Woodstock, GA | Dec-19 | 2.68% | 1,450 | — | 1,450 | ||||||||||
The Terrace | Chattanooga, TN | Jun-20 | 7.25% | 13,535 | 13,535 | — | ||||||||||
Burnsville Center | Burnsville, MN | Jul-20 | 6.00% | 74,804 | 74,804 | — | ||||||||||
Parkway Place | Huntsville, AL | Jul-20 | 6.50% | 38,113 | 38,113 | — | ||||||||||
Valley View Mall | Roanoke, VA | Jul-20 | 6.50% | 58,985 | 58,985 | — | ||||||||||
Parkdale Mall & Crossing | Beaumont, TX | Mar-21 | 5.85% | 86,900 | 86,900 | — | ||||||||||
EastGate Mall | Cincinnati, OH | Apr-21 | 5.83% | 39,199 | 39,199 | — | ||||||||||
Hamilton Crossing & Expansion | Chattanooga, TN | Apr-21 | 5.99% | 9,737 | 9,737 | — | ||||||||||
Park Plaza Mall | Little Rock, AR | Apr-21 | 5.28% | 90,465 | 90,465 | — | ||||||||||
Wausau Center | Wausau, WI | Apr-21 | 5.85% | 18,149 | 18,149 | — | ||||||||||
Fayette Mall | Lexington, KY | May-21 | 5.42% | 169,044 | 169,044 | — | ||||||||||
Alamance Crossing - East | Burlington, NC | Jul-21 | 5.83% | 48,296 | 48,296 | — | ||||||||||
Asheville Mall | Asheville, NC | Sep-21 | 5.80% | 72,440 | 72,440 | — |
17
Property | Location | Original Maturity Date | Optional Extended Maturity Date | Interest Rate | Balance | Balance | ||||||||||
Fixed | Variable | |||||||||||||||
Cross Creek Mall | Fayetteville, NC | Jan-22 | 4.54% | 128,860 | 128,860 | — | ||||||||||
The Outlet Shoppes at Oklahoma City | Oklahoma City, OK | Jan-22 | 5.73% | 55,924 | 55,924 | — | ||||||||||
Northwoods Mall | North Charleston, SC | Apr-22 | 5.08% | 69,617 | 69,617 | — | ||||||||||
Arbor Place | Douglasville, GA | May-22 | 5.10% | 116,541 | 116,541 | — | ||||||||||
CBL Center | Chattanooga, TN | Jun-22 | 5.00% | 20,221 | 20,221 | — | ||||||||||
Fashion Square | Saginaw, MI | Jun-22 | 4.95% | 39,248 | 39,248 | — | ||||||||||
Jefferson Mall | Louisville, KY | Jun-22 | 4.75% | 67,880 | 67,880 | — | ||||||||||
Southpark Mall | Colonial Heights, VA | Jun-22 | 4.85% | 63,940 | 63,940 | — | ||||||||||
WestGate Mall | Spartanburg, SC | Jul-22 | 4.99% | 37,471 | 37,471 | — | ||||||||||
The Outlet Shoppes at Atlanta | Woodstock, GA | Nov-23 | 4.90% | 78,070 | 78,070 | — | ||||||||||
The Outlet Shoppes of the Bluegrass | Simpsonville, KY | Dec-24 | 4.05% | 76,758 | 76,758 | — | ||||||||||
SUBTOTAL | 3,173,394 | 3,145,310 | 28,084 | |||||||||||||
Weighted-average interest rate | 5.60 | % | 5.63 | % | 2.55 | % | ||||||||||
Debt Premiums (Discounts): (5) | ||||||||||||||||
Chesterfield Mall | St. Louis, MO | Sep-16 | 5.96% | (346 | ) | (346 | ) | — | ||||||||
Dakota Square Mall | Minot, ND | Nov-16 | 5.03% | 1,011 | 1,011 | — | ||||||||||
The Outlet Shoppes at El Paso | El Paso, TX | Dec-17 | 4.75% | 3,446 | 3,446 | — | ||||||||||
Kirkwood Mall | Bismarck, ND | Apr-18 | 4.25% | 1,651 | 1,651 | — | ||||||||||
SUBTOTAL | 5,762 | 5,762 | — | |||||||||||||
Weighted-average interest rate | 4.58 | % | 4.58 | % | ||||||||||||
Total Loans On Operating Properties And Debt Premiums (Discounts) | 3,179,156 | 3,151,072 | 28,084 | |||||||||||||
Weighted-average interest rate | 5.60 | % | 5.63 | % | 2.55 | % | ||||||||||
Construction Loan: | ||||||||||||||||
The Outlet Shoppes at Atlanta - Phase II | Woodstock, GA | Dec-19 | 2.68% | 1,273 | — | 1,273 | ||||||||||
Operating Partnership Debt: | ||||||||||||||||
Unsecured credit facilities: | ||||||||||||||||
$600,000 capacity | Nov-15 | Nov-16 | 1.58% | 32,041 | — | 32,041 | ||||||||||
$100,000 capacity | Feb-16 | 1.58% | 17,200 | — | 17,200 | |||||||||||
$600,000 capacity | Nov-16 | Nov-17 | 1.58% | 404,272 | — | 404,272 | ||||||||||
SUBTOTAL | 453,513 | — | 453,513 | |||||||||||||
Unsecured term loans: | ||||||||||||||||
$50,000 Term Loan | Feb-18 | 1.73% | 50,000 | — | 50,000 | |||||||||||
$400,000 Term Loan | Jul-18 | 1.69% | 400,000 | — | 400,000 | |||||||||||
SUBTOTAL | 450,000 | — | 450,000 | |||||||||||||
Senior unsecured notes: | ||||||||||||||||
Senior unsecured 5.25% notes | Dec-23 | 5.25% | 450,000 | 450,000 | — | |||||||||||
Senior unsecured 5.25% notes (discount) | Dec-23 | 5.25% | (4,042 | ) | (4,042 | ) | — | |||||||||
Senior unsecured 4.60% notes | Oct-24 | 4.60% | 300,000 | 300,000 | — | |||||||||||
Senior unsecured 4.60% notes (discount) | Oct-24 | 4.60% | (70 | ) | (70 | ) | — | |||||||||
SUBTOTAL | 745,888 | 745,888 | — | |||||||||||||
Other: | ||||||||||||||||
Other subsidiary term loan | May-17 | 3.50% | 4,375 | 4,375 | — | |||||||||||
Total Consolidated Debt | $ | 4,834,205 | $ | 3,901,335 | $ | 932,870 | ||||||||||
Weighted-average interest rate | 4.76 | % | 5.50 | % | 1.67 | % | ||||||||||
Plus CBL's Share Of Unconsolidated Affiliates' Debt: | ||||||||||||||||
Gulf Coast Town Center Phase III | Ft. Myers, FL | Jul-15 | 2.75% | $ | 5,401 | $ | — | $ | 5,401 | |||||||
Hammock Landing Phase I | West Melbourne, FL | Nov-15 | Nov-17 | 2.18% | 19,929 | — | 19,929 |
18
Property | Location | Original Maturity Date | Optional Extended Maturity Date | Interest Rate | Balance | Balance | ||||||||||
Fixed | Variable | |||||||||||||||
Hammock Landing Phase II | West Melbourne, FL | Nov-15 | Nov-17 | 2.43% | 8,700 | — | 8,700 | |||||||||
The Pavilion at Port Orange | Port Orange, FL | Nov-15 | Nov-17 | 2.18% | 29,698 | — | 29,698 | |||||||||
Oak Park Mall | Overland Park, KS | Dec-15 | 5.85% | 137,850 | 137,850 | — | ||||||||||
Triangle Town Center | Raleigh, NC | Dec-15 | 5.74% | 86,481 | 86,481 | — | ||||||||||
Renaissance Center Phase I | Durham, NC | Jul-16 | 5.61% | 16,029 | 16,029 | — | ||||||||||
Fremaux Town Center Phase I | Slidell, LA | Aug-16 | Aug-18 | 2.19% | 26,779 | — | 26,779 | |||||||||
Fremaux Town Center Phase II | Slidell, LA | Aug-16 | Aug-18 | 2.19% | 8,459 | — | 8,459 | |||||||||
Governor's Square Mall | Clarksville, TN | Sep-16 | 8.23% | 7,911 | 7,911 | — | ||||||||||
Kentucky Oaks Mall | Paducah, KY | Jan-17 | 5.27% | 10,618 | 10,618 | — | ||||||||||
The Shops at Friendly Center | Greensboro, NC | Jan-17 | 5.90% | 19,523 | 19,523 | — | ||||||||||
High Pointe Commons | Harrisburg, PA | May-17 | 5.74% | 6,456 | 6,456 | — | ||||||||||
Gulf Coast Town Center Phase I | Ft. Myers, FL | Jul-17 | 5.60% | 95,400 | 95,400 | — | ||||||||||
High Pointe Commons Phase II | Harrisburg, PA | Jul-17 | 6.10% | 2,577 | 2,577 | — | ||||||||||
Ambassador Town Center | Lafayette, LA | Dec-17 | Dec-19 | 1.98% | 2,524 | — | 2,524 | |||||||||
Ambassador Town Center Infrastructure Improvements | Lafayette, LA | Dec-17 | Dec-19 | 2.18% | 2,423 | — | 2,423 | |||||||||
CoolSprings Galleria | Nashville, TN | Jun-18 | 6.98% | 52,229 | 52,229 | — | ||||||||||
York Town Center | York, PA | Feb-22 | 4.90% | 17,649 | 17,649 | — | ||||||||||
York Town Center - Pier 1 | York, PA | Feb-22 | 2.94% | 705 | — | 705 | ||||||||||
West County Center | St. Louis, MO | Dec-22 | 3.40% | 95,000 | 95,000 | — | ||||||||||
Friendly Shopping Center | Greensboro, NC | Apr-23 | 3.48% | 50,000 | 50,000 | — | ||||||||||
Renaissance Center Phase II | Durham, NC | Apr-23 | 3.49% | 8,000 | 8,000 | — | ||||||||||
Coastal Grand Outparcel | Myrtle Beach, SC | Aug-24 | 4.09% | 2,858 | 2,858 | — | ||||||||||
Coastal Grand | Myrtle Beach, SC | Aug-24 | 4.09% | 59,234 | 59,234 | — | ||||||||||
SUBTOTAL | 772,433 | 667,815 | 104,618 | |||||||||||||
Less Noncontrolling Interests' Share Of Consolidated Debt: | Noncontrolling Interest % | |||||||||||||||
The Outlet Shoppes at Gettysburg | Gettysburg, PA | 50% | 5.87% | (19,125 | ) | (19,125 | ) | — | ||||||||
Statesboro Crossing | Statesboro, GA | 50% | 1.99% | (5,575 | ) | — | (5,575 | ) | ||||||||
Hamilton Place | Chattanooga, TN | 10% | 5.86% | (10,044 | ) | (10,044 | ) | — | ||||||||
Hamilton Corner | Chattanooga, TN | 10% | 5.67% | (1,480 | ) | (1,480 | ) | — | ||||||||
Other subsidiary term loan | Chattanooga, TN | 50% | 3.50% | (2,188 | ) | (2,188 | ) | — | ||||||||
The Outlet Shoppes at El Paso | El Paso, TX | 25% | 7.06% | (15,995 | ) | (15,995 | ) | — | ||||||||
The Outlet Shoppes at Oklahoma City Phase II | Oklahoma City, OK | 25% | 2.93% | (1,458 | ) | — | (1,458 | ) | ||||||||
The Terrace | Chattanooga, TN | 8% | 7.25% | (1,083 | ) | (1,083 | ) | — | ||||||||
Hamilton Crossing & Expansion | Chattanooga, TN | 8% | 5.99% | (779 | ) | (779 | ) | — | ||||||||
The Outlet Shoppes at Oklahoma City | Oklahoma City, OK | 25% | 5.73% | (13,981 | ) | (13,981 | ) | — | ||||||||
CBL Center | Chattanooga, TN | 8% | 5.00% | (1,618 | ) | (1,618 | ) | — | ||||||||
The Outlet Shoppes at Atlanta | Woodstock, GA | 25% | 4.90% | (19,517 | ) | (19,517 | ) | — | ||||||||
The Outlet Shoppes of the Bluegrass | Simpsonville, KY | 35% | 4.05% | (26,865 | ) | (26,865 | ) | — | ||||||||
(119,708 | ) | (112,675 | ) | (7,033 | ) | |||||||||||
Less Noncontrolling Interests' Share Of Debt Premiums: (5) | ||||||||||||||||
The Outlet Shoppes at El Paso | El Paso, TX | 25% | 4.75% | (861 | ) | (861 | ) | — | ||||||||
Company's Share Of Consolidated And Unconsolidated Debt | $ | 5,486,069 | $ | 4,455,614 | $ | 1,030,455 | ||||||||||
Weighted-average interest rate | 4.75 | % | 5.45 | % | 1.72 | % | ||||||||||
Total Debt of Unconsolidated Affiliates: | ||||||||||||||||
Gulf Coast Town Center Phase III | Ft. Myers, FL | Jul-15 | 2.75% | $ | 5,401 | $ | — | $ | 5,401 | |||||||
Hammock Landing Phase I | West Melbourne, FL | Nov-15 | 2.18% | 39,859 | — | 39,859 | ||||||||||
Hammock Landing Phase II | West Melbourne, FL | Nov-15 | 2.43% | 15,556 | — | 15,556 | ||||||||||
The Pavilion at Port Orange | Port Orange, FL | Nov-15 | 2.18% | 59,396 | — | 59,396 | ||||||||||
Oak Park Mall | Overland Park, KS | Dec-15 | 5.85% | 275,700 | 275,700 | — | ||||||||||
Triangle Town Center | Raleigh, NC | Dec-15 | 5.74% | 172,962 | 172,962 | — | ||||||||||
Renaissance Center Phase I | Durham, NC | Jul-16 | 5.61% | 32,057 | 32,057 | — |
19
Property | Location | Original Maturity Date | Optional Extended Maturity Date | Interest Rate | Balance | Balance | ||||||||||
Fixed | Variable | |||||||||||||||
Fremaux Town Center | Slidell, LA | Aug-16 | 2.19% | 41,199 | — | 41,199 | ||||||||||
Fremaux Town Center Phase II | Slidell, LA | Aug-16 | 2.19% | 13,013 | — | 13,013 | ||||||||||
Governor's Square Mall | Clarksville, TN | Sep-16 | 8.23% | 16,656 | 16,656 | — | ||||||||||
Kentucky Oaks Mall | Paducah, KY | Jan-17 | 5.27% | 21,237 | 21,237 | — | ||||||||||
The Shops at Friendly Center | Greensboro, NC | Jan-17 | 5.90% | 39,046 | 39,046 | — | ||||||||||
High Pointe Commons | Harrisburg, PA | May-17 | 5.74% | 12,912 | 12,912 | — | ||||||||||
Gulf Coast Town Center Phase I | Ft. Myers, FL | Jul-17 | 5.60% | 190,800 | 190,800 | — | ||||||||||
High Pointe Commons Phase II | Harrisburg, PA | Jul-17 | 6.10% | 5,154 | 5,154 | — | ||||||||||
Ambassador Town Center | Lafayette, LA | Dec-17 | 1.98% | 2,524 | — | 2,524 | ||||||||||
Ambassador Town Center Infrastructure Improvements | Lafayette, LA | Dec-17 | 2.18% | 2,423 | — | 2,423 | ||||||||||
CoolSprings Galleria | Nashville, TN | Jun-18 | 6.98% | 104,458 | 104,458 | — | ||||||||||
York Town Center | York, PA | Feb-22 | 4.90% | 35,297 | 35,297 | — | ||||||||||
York Town Center - Pier 1 | York, PA | Feb-22 | 2.94% | 1,410 | — | 1,410 | ||||||||||
West County Center | St. Louis, MO | Dec-22 | 3.40% | 190,000 | 190,000 | — | ||||||||||
Friendly Shopping Center | Greensboro, NC | Apr-23 | 3.48% | 100,000 | 100,000 | — | ||||||||||
Renaissance Center Phase II | Durham, NC | Apr-23 | 3.49% | 16,000 | 16,000 | — | ||||||||||
Coastal Grand Outparcel | Myrtle Beach, SC | Aug-24 | 4.09% | 5,716 | 5,716 | — | ||||||||||
Coastal Grand | Myrtle Beach, SC | Aug-24 | 4.09% | 118,468 | 118,468 | — | ||||||||||
$ | 1,517,244 | $ | 1,336,463 | $ | 180,781 | |||||||||||
Weighted-average interest rate | 4.81 | % | 5.16 | % | 2.23 | % | ||||||||||
(1) | The Company has an interest rate swap on a notional amount of $11,696, amortizing to $11,313 over the term of the swap, related to CoolSprings Crossing to effectively fix the interest rate on that variable-rate loan. Therefore, this amount is currently reflected as having a fixed rate. The swap terminates in April 2016. |
(2) | The Company has an interest rate swap on a notional amount of $10,421, amortizing to $10,083 over the term of the swap, related to Gunbarrel Pointe to effectively fix the interest rate on that variable-rate loan. Therefore, this amount is currently reflected as having a fixed rate. The swap terminates in April 2016. |
(3) | The Company has an interest rate swap on a notional amount of $31,297, amortizing to $30,276 over the term of the swap, related to Stroud Mall to effectively fix the interest rate on that variable-rate loan. Therefore, this amount is currently reflected as having a fixed rate. The swap terminates in April 2016. |
(4) | The Company has an interest rate swap on a notional amount of $49,973, amortizing to $48,337 over the term of the swap, related to York Galleria to effectively fix the interest rate on that variable-rate loan. Therefore, this amount is currently reflected as having a fixed rate. The swap terminates in April 2016. |
(5) | The weighted average interest rates used for debt premiums (discounts) reflect the market interest rate in effect as of the assumption of the related debt. |
20
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2015
Schedule of Maturities of Mortgage and Other Indebtedness
(Dollars in thousands)
Based on Maturity Dates As Though All Extension Options Available Have Been Exercised:
Year | Consolidated Debt | CBL's Share of Unconsolidated Affiliates' Debt | Noncontrolling Interests' Share of Consolidated Debt | CBL's Share of Consolidated and Unconsolidated Debt | % of Total | Weighted Average Interest Rate | ||||||||||||||||
2015 | $ | 410,085 | $ | 229,732 | $ | — | $ | 639,817 | 11.67 | % | 5.39 | % | ||||||||||
2016 | 593,385 | 23,940 | (29,169 | ) | 588,156 | 10.72 | % | 5.33 | % | |||||||||||||
2017 | 858,901 | 192,901 | (19,663 | ) | 1,032,139 | 18.81 | % | 4.06 | % | |||||||||||||
2018 | 657,170 | 87,467 | (5,575 | ) | 739,062 | 13.47 | % | 3.40 | % | |||||||||||||
2019 | 80,092 | 4,947 | — | 85,039 | 1.55 | % | 7.49 | % | ||||||||||||||
2020 | 185,437 | — | (1,083 | ) | 184,354 | 3.36 | % | 6.35 | % | |||||||||||||
2021 | 542,955 | — | (2,237 | ) | 540,718 | 9.87 | % | 5.57 | % | |||||||||||||
2022 | 599,702 | 113,354 | (15,599 | ) | 697,457 | 12.71 | % | 4.72 | % | |||||||||||||
2023 | 528,070 | 58,000 | (19,517 | ) | 566,553 | 10.33 | % | 5.03 | % | |||||||||||||
2024 | 376,758 | 62,092 | (26,865 | ) | 411,985 | 7.51 | % | 4.46 | % | |||||||||||||
Face Amount of Debt | 4,832,555 | 772,433 | (119,708 | ) | 5,485,280 | 100.00 | % | 4.75 | % | |||||||||||||
Net Premiums on Debt | 1,650 | — | (861 | ) | 789 | — | % | — | % | |||||||||||||
Total | $ | 4,834,205 | $ | 772,433 | $ | (120,569 | ) | $ | 5,486,069 | 100.00 | % | 4.75 | % |
Based on Original Maturity Dates:
Year | Consolidated Debt | CBL's Share of Unconsolidated Affiliates' Debt | Noncontrolling Interests' Share of Consolidated Debt | CBL's Share of Consolidated and Unconsolidated Debt | % of Total | Weighted Average Interest Rate | ||||||||||||||||
2015 | $ | 442,126 | $ | 288,059 | $ | — | $ | 730,185 | 13.31 | % | 4.97 | % | ||||||||||
2016 | 976,765 | 59,178 | (34,744 | ) | 1,001,199 | 18.25 | % | 3.81 | % | |||||||||||||
2017 | 454,629 | 139,521 | (19,663 | ) | 574,487 | 10.47 | % | 5.96 | % | |||||||||||||
2018 | 646,021 | 52,229 | — | 698,250 | 12.73 | % | 3.47 | % | ||||||||||||||
2019 | 88,817 | — | (1,458 | ) | 87,359 | 1.59 | % | 7.41 | % | |||||||||||||
2020 | 185,437 | — | (1,083 | ) | 184,354 | 3.36 | % | 6.35 | % | |||||||||||||
2021 | 534,230 | — | (779 | ) | 533,451 | 9.73 | % | 5.61 | % | |||||||||||||
2022 | 599,702 | 113,354 | (15,599 | ) | 697,457 | 12.72 | % | 4.72 | % | |||||||||||||
2023 | 528,070 | 58,000 | (19,517 | ) | 566,553 | 10.33 | % | 5.03 | % | |||||||||||||
2024 | 376,758 | 62,092 | (26,865 | ) | 411,985 | 7.51 | % | 4.46 | % | |||||||||||||
Face Amount of Debt | 4,832,555 | 772,433 | (119,708 | ) | 5,485,280 | 100.00 | % | 4.75 | % | |||||||||||||
Net Premiums on Debt | 1,650 | — | (861 | ) | 789 | — | — | % | ||||||||||||||
Total | $ | 4,834,205 | $ | 772,433 | $ | (120,569 | ) | $ | 5,486,069 | 100.00 | % | 4.75 | % |
Unsecured Debt Covenant Compliance Ratios | Required | Actual | ||
Debt to total asset value | < 60% | 50.2% | ||
Unencumbered asset value to unsecured indebtedness | >1.60x | 2.3x | ||
Unencumbered NOI to unsecured interest expense | >1.75x | 4.3x | ||
EBITDA to fixed charges (debt service) | >1.5x | 2.2x |
Senior Unsecured Notes Compliance Ratios | Required | Actual | ||
Total debt to total assets | < 60% | 54.3% | ||
Secured debt to total assets | < 45% | 35.2% | ||
Total unencumbered assets to unsecured debt | > 150% | 222.8% | ||
Consolidated income available for debt service to annual debt service charge | > 1.5x | 3.2x |
21
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three Months and Six Months Ended June 30, 2015
Mall Portfolio Statistics
TIER 1 Sales > $375 per square foot | |||||||||||||||||||||
Property | Location | Total GLA | Sales Per Square Foot for the Twelve Months Ended (1) | Mall Occupancy | % of Total Mall NOI for the Six Months Ended 6/30/15 | ||||||||||||||||
6/30/15 | 6/30/14 | 6/30/15 | 6/30/14 | ||||||||||||||||||
Acadiana Mall | Lafayette, LA | 992,532 | |||||||||||||||||||
Asheville Mall | Asheville, NC | 974,464 | |||||||||||||||||||
CoolSprings Galleria (2) | Nashville, TN | 1,108,963 | |||||||||||||||||||
Cross Creek Mall | Fayetteville, NC | 1,036,114 | |||||||||||||||||||
Dakota Square Mall | Minot, ND | 813,732 | |||||||||||||||||||
Fayette Mall | Lexington, KY | 1,191,136 | |||||||||||||||||||
Friendly Center and The Shops at Friendly | Greensboro, NC | 1,137,662 | |||||||||||||||||||
Governor's Square | Clarksville, TN | 735,565 | |||||||||||||||||||
Hamilton Place | Chattanooga, TN | 1,159,553 | |||||||||||||||||||
Jefferson Mall | Louisville, KY | 885,373 | |||||||||||||||||||
Kirkwood Mall | Bismarck, ND | 848,082 | |||||||||||||||||||
Mall del Norte | Laredo, TX | 1,167,329 | |||||||||||||||||||
Mayfaire Town Center | Wilmington, NC | 784,403 | |||||||||||||||||||
Oak Park Mall | Overland Park, KS | 1,609,877 | |||||||||||||||||||
The Outlet Shoppes at El Paso | El Paso, TX | 433,043 | |||||||||||||||||||
St. Clair Square | Fairview Heights, IL | 1,077,807 | |||||||||||||||||||
Sunrise Mall | Brownsville, TX | 752,513 | |||||||||||||||||||
Volusia Mall | Daytona Beach, FL | 1,083,768 | |||||||||||||||||||
West County Center | Des Peres, MO | 1,205,735 | |||||||||||||||||||
West Towne Mall | Madison, WI | 829,546 | |||||||||||||||||||
Total Tier 1 Malls | 19,827,197 | $ | 453 | $ | 439 | 92.9 | % | 95.9 | % | 34.4 | % |
TIER 2 Sales of $300 to $375 per square foot | ||||||||||||||
Property | Location | Total GLA | Sales Per Square Foot for the Twelve Months Ended (1) | Mall Occupancy | % of Total Mall NOI for the Six Months Ended 6/30/15 | |||||||||
06/30/15 | 06/30/14 | 6/30/15 | 6/30/14 | |||||||||||
Arbor Place | Atlanta (Douglasville), GA | 1,163,326 | ||||||||||||
Brookfield Square | Brookfield, WI | 1,008,297 | ||||||||||||
Burnsville Center | Burnsville, MN | 1,046,207 | ||||||||||||
CherryVale Mall | Rockford, IL | 845,231 | ||||||||||||
Coastal Grand | Myrtle Beach, SC | 1,038,654 | ||||||||||||
East Towne Mall | Madison, WI | 788,089 | ||||||||||||
EastGate Mall | Cincinnati, OH | 858,504 | ||||||||||||
Fremaux Town Center (3) | Slidell, LA | 274,459 | ||||||||||||
Frontier Mall | Cheyenne, WY | 525,176 | ||||||||||||
Greenbrier Mall | Chesapeake, VA | 896,832 | ||||||||||||
Hanes Mall | Winston-Salem, NC | 1,504,146 | ||||||||||||
Harford Mall | Bel Air, MD | 505,477 | ||||||||||||
Honey Creek Mall | Terre Haute, IN | 677,322 | ||||||||||||
Imperial Valley Mall | El Centro, CA | 825,827 | ||||||||||||
Laurel Park Place | Livonia, MI | 490,246 | ||||||||||||
Layton Hills Mall | Layton, UT | 642,886 | ||||||||||||
Meridian Mall | Lansing, MI | 968,288 | ||||||||||||
Northpark Mall | Joplin, MO | 952,849 | ||||||||||||
Northwoods Mall | Charleston, SC | 772,726 |
22
Mall Portfolio Statistics (continued)
TIER 2 Sales of $300 to $375 per square foot | |||||||||||||||||||||
Property | Location | Total GLA | Sales Per Square Foot for the Twelve Months Ended (1) | Mall Occupancy | % of Total Mall NOI for the Six Months Ended 6/30/15 | ||||||||||||||||
06/30/15 | 06/30/14 | 6/30/15 | 6/30/14 | ||||||||||||||||||
Old Hickory Mall | Jackson, TN | 538,991 | |||||||||||||||||||
The Outlet Shoppes at Atlanta (3) | Woodstock, GA | 371,376 | |||||||||||||||||||
The Outlet Shoppes at Oklahoma City | Oklahoma City, OK | 394,661 | |||||||||||||||||||
The Outlet Shoppes of the Bluegrass (3) | Simpsonville, KY | 374,683 | |||||||||||||||||||
Park Plaza | Little Rock, AR | 540,166 | |||||||||||||||||||
Parkdale Mall | Beaumont, TX | 1,245,510 | |||||||||||||||||||
Parkway Place | Huntsville, AL | 648,260 | |||||||||||||||||||
Pearland Town Center | Pearland, TX | 645,835 | |||||||||||||||||||
Post Oak Mall | College Station, TX | 774,932 | |||||||||||||||||||
Richland Mall | Waco, TX | 686,504 | |||||||||||||||||||
South County Center | St. Louis, MO | 1,042,477 | |||||||||||||||||||
Southpark Mall | Colonial Heights, VA | 672,900 | |||||||||||||||||||
Turtle Creek Mall | Hattiesburg, MS | 845,954 | |||||||||||||||||||
Valley View Mall | Roanoke, VA | 844,427 | |||||||||||||||||||
Westmoreland Mall | Greensburg, PA | 999,971 | |||||||||||||||||||
York Galleria | York, PA | 764,789 | |||||||||||||||||||
Total Tier 2 Malls | 27,175,978 | $ | 348 | $ | 336 | 90.0 | % | 93.2 | % | 45.2 | % |
TIER 3 Sales < $300 per square foot | ||||||||||||||
Property | Location | Total GLA | Sales Per Square Foot for the Twelve Months Ended (1) | Mall Occupancy | % of Total Mall NOI for the Six Months Ended 6/30/15 | |||||||||
06/30/15 | 06/30/14 | 6/30/15 | 6/30/14 | |||||||||||
Alamance Crossing | Burlington, NC | 885,084 | ||||||||||||
Bonita Lakes Mall | Meridian, MS | 631,920 | ||||||||||||
Cary Towne Center | Cary, NC | 909,116 | ||||||||||||
Chesterfield Mall (2) | Chesterfield, MO | 1,294,083 | ||||||||||||
College Square | Morristown, TN | 450,398 | ||||||||||||
Eastland Mall | Bloomington, IL | 760,815 | ||||||||||||
Fashion Square | Saginaw, MI | 748,337 | ||||||||||||
Foothills Mall | Maryville, TN | 463,591 | ||||||||||||
Hickory Point Mall | Forsyth, IL | 813,593 | ||||||||||||
Janesville Mall | Janesville, WI | 606,903 | ||||||||||||
Kentucky Oaks Mall | Paducah, KY | 1,064,136 | ||||||||||||
The Lakes Mall | Muskegon, MI | 587,973 | ||||||||||||
Mid Rivers Mall | St. Peters, MO | 1,089,416 | ||||||||||||
Midland Mall | Midland, MI | 470,974 | ||||||||||||
Monroeville Mall | Pittsburgh, PA | 1,083,855 | ||||||||||||
Northgate Mall | Chattanooga, TN | 790,305 | ||||||||||||
The Outlet Shoppes at Gettysburg | Gettysburg, PA | 249,937 | ||||||||||||
Randolph Mall | Asheboro, NC | 380,559 |
23
Mall Portfolio Statistics (continued)
TIER 3 Sales < $300 per square foot | |||||||||||||||||||||
Property | Location | Total GLA | Sales Per Square Foot for the Twelve Months Ended (1) | Mall Occupancy | % of Total Mall NOI for the Six Months Ended 6/30/15 | ||||||||||||||||
06/30/15 | 06/30/14 | 6/30/15 | 6/30/14 | ||||||||||||||||||
Regency Mall | Racine, WI | 789,371 | |||||||||||||||||||
River Ridge Mall | Lynchburg, VA | 764,361 | |||||||||||||||||||
Southaven Towne Center | Southaven, MS | 567,640 | |||||||||||||||||||
Stroud Mall | Stroudsburg, PA | 398,251 | |||||||||||||||||||
Walnut Square | Dalton, GA | 495,970 | |||||||||||||||||||
Wausau Center (2) | Wausau, WI | 423,774 | |||||||||||||||||||
WestGate Mall | Spartanburg, SC | 954,086 | |||||||||||||||||||
Total Tier 3 Malls | 17,674,448 | $ | 276 | $ | 266 | 86.1 | % | 89.7 | % | 18.7 | % | ||||||||||
Total Mall Portfolio | 64,677,623 | $ | 368 | $ | 355 | 90.0 | % | 93.1 | % | 98.3 | % |
Lender Malls | |||||||||||||||
Property | Location | Total GLA | Sales Per Square Foot for the Twelve Months Ended (1) | Mall Occupancy | % of Total Mall NOI for the Six Months Ended 6/30/15 | ||||||||||
06/30/15 | 06/30/14 | 6/30/15 | 6/30/14 | ||||||||||||
Gulf Coast Town Center | Ft. Myers, FL | 1,233,436 | |||||||||||||
Triangle Town Center | Raleigh, NC | 1,254,815 | |||||||||||||
Total Lender Malls | 2,488,251 | N/A | N/A | N/A | N/A | 1.7 | % |
(1) | Represents same-store sales per square foot for mall tenants 10,000 square feet or less for stabilized malls. |
(2) | Property is under redevelopment in 2015. Operational metrics have been excluded for Chesterfield Mall and Wausau Center, due to proposed significant repositioning. |
(3) | Fremaux Town Center, The Outlet Shoppes at Atlanta and The Outlet Shoppes of the Bluegrass are non-stabilized malls and are excluded from Sales Per Square Foot. |
24
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three Months and Six Months Ended June 30, 2015
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet
Property Type | Square Feet | Prior Gross Rent PSF | New Initial Gross Rent PSF | % Change Initial | New Average Gross Rent PSF (2) | % Change Average | |||||||||||||||
Quarter: | |||||||||||||||||||||
All Property Types (1) | 434,156 | $ | 45.01 | $ | 47.40 | 5.3 | % | $ | 48.98 | 8.8 | % | ||||||||||
Stabilized malls | 370,871 | 48.37 | 50.83 | 5.1 | % | 52.59 | 8.7 | % | |||||||||||||
New leases | 89,641 | 38.58 | 46.83 | 21.4 | % | 49.78 | 29.0 | % | |||||||||||||
Renewal leases | 281,230 | 51.49 | 52.10 | 1.2 | % | 53.49 | 3.9 | % | |||||||||||||
Year-to-Date: | |||||||||||||||||||||
All Property Types (1) | 1,042,288 | $ | 42.48 | $ | 45.18 | 6.4 | % | $ | 46.71 | 10.0 | % | ||||||||||
Stabilized malls | 952,284 | 44.15 | 46.86 | 6.1 | % | 48.48 | 9.8 | % | |||||||||||||
New leases | 211,187 | 42.30 | 52.97 | 25.2 | % | 56.16 | 32.8 | % | |||||||||||||
Renewal leases | 741,097 | 44.67 | 45.12 | 1.0 | % | 46.29 | 3.6 | % |
Average Annual Base Rents Per Square Foot (3) By Property Type For Small Shop Space Less Than 10,000 Square Feet: | |||||||||||||
Total Leasing Activity: | |||||||||||||
Square Feet | As of June 30, | ||||||||||||
Quarter: | 2015 | 2014 | |||||||||||
Operating portfolio: | Same-center stabilized malls | $ | 31.26 | $ | 30.54 | ||||||||
New leases | 344,889 | Stabilized malls | 31.26 | 30.46 | |||||||||
Renewal leases | 473,721 | Non-stabilized malls (4) | 25.19 | 24.80 | |||||||||
Development portfolio: | Associated centers | 13.23 | 12.43 | ||||||||||
New leases | 105,582 | Community centers | 15.74 | 15.93 | |||||||||
Total leased | 924,192 | Office buildings | 19.50 | 19.56 | |||||||||
Year-to-Date: | |||||||||||||
Operating Portfolio: | |||||||||||||
New leases | 705,684 | ||||||||||||
Renewal leases | 1,224,792 | ||||||||||||
Development Portfolio: | |||||||||||||
New leases | 278,618 | ||||||||||||
Total leased | 2,209,094 |
(1) | Includes stabilized malls, associated centers, community centers and other. |
(2) | Average gross rent does not incorporate allowable future increases for recoverable common area expenses. |
(3) | Average annual base rents per square foot are based on contractual rents in effect as of June 30, 2015, including the impact of any rent concessions. |
(4) | Includes Fremaux Town Center, The Outlet Shoppes of the Bluegrass and The Outlet Shoppes at Atlanta as of June 30, 2015 and The Outlet Shoppes at Atlanta and The Outlet Shoppes at Oklahoma City as of June 30, 2014. |
25
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three Months and Six Months Ended June 30, 2015
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet
For the Six Months Ended June 30, 2015 Based on Commencement Date
Number of Leases | Square Feet | Term (in years) | Initial Rent PSF | Average Rent PSF | Expiring Rent PSF | Initial Rent Spread | Average Rent Spread | ||||||||||||||||||||||||||||
Commencement 2015: | |||||||||||||||||||||||||||||||||||
New | 172 | 444,680 | 8.57 | $ | 48.37 | $ | 51.28 | $ | 38.38 | $ | 9.99 | 26.0 | % | $ | 12.90 | 33.6 | % | ||||||||||||||||||
Renewal | 482 | 1,341,514 | 3.99 | 40.81 | 41.85 | 39.54 | 1.27 | 3.2 | % | 2.31 | 5.8 | % | |||||||||||||||||||||||
Commencement 2015 Total | 654 | 1,786,194 | 5.19 | $ | 42.69 | $ | 44.20 | $ | 39.25 | $ | 3.44 | 8.8 | % | $ | 4.95 | 12.6 | % | ||||||||||||||||||
Commencement 2016: | |||||||||||||||||||||||||||||||||||
New | 12 | 24,141 | 8.47 | $ | 62.17 | $ | 64.82 | $ | 51.72 | $ | 10.45 | 20.2 | % | $ | 13.10 | 25.3 | % | ||||||||||||||||||
Renewal | 99 | 281,898 | 3.83 | 46.70 | 47.67 | 44.51 | 2.19 | 4.9 | % | 3.16 | 7.1 | % | |||||||||||||||||||||||
Commencement 2016 Total | 111 | 306,039 | 4.33 | $ | 47.92 | $ | 49.03 | $ | 45.08 | $ | 2.84 | 6.3 | % | $ | 3.95 | 8.8 | % | ||||||||||||||||||
Total 2015/2016 | 765 | 2,092,233 | 5.07 | $ | 43.45 | $ | 44.90 | $ | 40.10 | $ | 3.35 | 8.4 | % | $ | 4.80 | 12.0 | % | ||||||||||||||||||
26
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2015
Top 25 Tenants Based On Percentage Of Total Annual Revenues
Tenant | Number of Stores | Square Feet | Percentage of Total Annualized Revenues | |||||||
1 | Limited Brands, LLC (1) | 164 | 852,563 | 3.29% | ||||||
2 | Signet Jewelers Limited (2) | 215 | 319,899 | 2.83% | ||||||
3 | Foot Locker, Inc. | 135 | 579,535 | 2.28% | ||||||
4 | Ascena Retail Group, Inc. (3) | 182 | 908,618 | 2.19% | ||||||
5 | AE Outfitters Retail Company | 80 | 493,051 | 1.99% | ||||||
6 | Dick's Sporting Goods, Inc. (4) | 27 | 1,479,353 | 1.70% | ||||||
7 | The Gap, Inc. | 67 | 749,382 | 1.68% | ||||||
8 | Genesco Inc. (5) | 190 | 303,110 | 1.65% | ||||||
9 | Luxottica Group, S.P.A. (6) | 121 | 270,035 | 1.23% | ||||||
10 | JC Penney Company, Inc. (7) | 62 | 7,017,124 | 1.20% | ||||||
11 | Express Fashions | 43 | 352,510 | 1.18% | ||||||
12 | Abercrombie & Fitch, Co. | 53 | 358,613 | 1.15% | ||||||
13 | Forever 21 Retail, Inc. | 24 | 449,486 | 1.13% | ||||||
14 | Finish Line, Inc. | 60 | 310,831 | 1.11% | ||||||
15 | Aeropostale, Inc. | 69 | 262,303 | 1.09% | ||||||
16 | Charlotte Russe Holding, Inc. | 52 | 337,597 | 1.07% | ||||||
17 | The Buckle, Inc. | 51 | 261,935 | 1.03% | ||||||
18 | Best Buy Co., Inc. (8) | 63 | 548,312 | 1.00% | ||||||
19 | New York & Company, Inc. | 42 | 281,919 | 0.83% | ||||||
20 | Claire's Stores, Inc. | 111 | 138,847 | 0.81% | ||||||
21 | Barnes & Noble Inc. | 20 | 605,028 | 0.79% | ||||||
22 | The Children's Place Retail Stores, Inc. | 61 | 265,624 | 0.79% | ||||||
23 | Shoe Show, Inc. | 50 | 603,309 | 0.76% | ||||||
24 | The Gymboree Corporation | 89 | 191,582 | 0.68% | ||||||
25 | Bon-Ton | 21 | 2,263,002 | 0.67% | ||||||
2,052 | 20,203,568 | 34.13% | ||||||||
(1) | Limited Brands, LLC operates Victoria's Secret, PINK and Bath & Body Works. | |||||||||
(2) | Signet Jewelers Limited operates Kay Jewelers, Marks & Morgan, JB Robinson, Shaw's Jewelers, Osterman's Jewelers, LeRoy's Jewelers, Jared Jewelers, Belden Jewelers, Ultra Diamonds and Rogers Jewelers. In 2014, Signet Jewelers acquired Zale Corporation which operates Zale, Peoples and Piercing Pagoda. | |||||||||
(3) | Ascena Retail Group, Inc. operates Justice, dressbarn, maurices, Lane Bryant and Catherines. | |||||||||
(4) | Dick's Sporting Goods, Inc. operates Dick's Sporting Goods and Golf Galaxy stores. | |||||||||
(5) | Genesco Inc. operates Journey's, Underground by Journeys, Hat World, Lids, Hat Zone, and Cap Factory stores. | |||||||||
(6) | Luxottica Group, S.P.A. operates Lenscrafters, Sunglass Hut, and Pearle Vision. | |||||||||
(7) | JC Penney Co., Inc. owns 32 of these stores. JC Penney closed one store in the second quarter of 2015 and plans to close two additional leased stores over the remainder of 2015. The two stores are included in the above chart as the stores were in operation as of June 30, 2015. JC Penney remains obligated for rent under the terms of the respective leases. | |||||||||
(8) | Best Buy Co., Inc. operates Best Buy and Best Buy Mobile. |
27
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three Months and Six Months Ended June 30, 2015
Capital Expenditures
(In thousands)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Tenant allowances (1) | $ | 19,344 | $ | 12,367 | $ | 32,040 | $ | 23,779 | ||||||||
Renovations (2) | 12,342 | 7,506 | 14,505 | 9,311 | ||||||||||||
Deferred maintenance: (3) | ||||||||||||||||
Parking lot and parking lot lighting | 5,543 | 4,644 | 7,455 | 5,938 | ||||||||||||
Roof repairs and replacements | 1,178 | 950 | 2,109 | 1,182 | ||||||||||||
Other capital expenditures | (1,374 | ) | (462 | ) | (308 | ) | 1,887 | |||||||||
Total deferred maintenance expenditures | 5,347 | 5,132 | 9,256 | 9,007 | ||||||||||||
Total capital expenditures | $ | 37,033 | $ | 25,005 | $ | 55,801 | $ | 42,097 |
(1) | Tenant allowances, sometimes made to third-generation tenants, are recovered through minimum rents from the tenants over the term of the lease. |
(2) | Renovation capital expenditures for remodelings and upgrades to enhance our competitive position in the market area. A portion of these expenditures covering items such as new floor coverings, painting, lighting and new seating areas are also recovered through tenant billings. The costs of other items such as new entrances, new ceilings and skylights are not recovered from tenants. We estimate that 30% of our renovation expenditures are recoverable from our tenants over a ten to fifteen year period. |
(3) | The capital expenditures incurred for maintenance such as parking lot repairs, parking lot lighting and roofs are classified as deferred maintenance expenditures. These expenditures are billed to tenants as common area maintenance expense and the majority is recovered over a five to fifteen year period. |
Deferred Leasing Costs Capitalized
(In thousands)
2015 | 2014 | |||||||
Quarter ended: | ||||||||
March 31, | $ | 695 | $ | 773 | ||||
June 30, | 284 | 807 | ||||||
September 30, | 770 | |||||||
December 31, | 913 | |||||||
$ | 979 | $ | 3,263 |
28
CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2015
Properties Opened During the Six Months Ended June 30, 2015
(Dollars in thousands)
CBL's Share of | |||||||||||||||||||
Property | Location | CBL Ownership Interest | Total Project Square Feet | Total Cost (1) | Cost to Date (2) | Opening Date | Initial Unleveraged Yield | ||||||||||||
Community Center: | |||||||||||||||||||
Parkway Plaza | Fort Oglethorpe, GA | 100% | 134,050 | $ | 17,325 | $ | 15,979 | March-15 | 9.0% | ||||||||||
Mall/Outlet Center Expansions: | |||||||||||||||||||
Mid Rivers Mall - Planet Fitness | St Peters, MO | 100% | 13,068 | 2,576 | 2,315 | May-15 | 13.8% | ||||||||||||
The Outlet Shoppes at Atlanta - Parcel Development | Woodstock, GA | 75% | 9,600 | 2,657 | 2,583 | May-15 | 9.3% | ||||||||||||
22,668 | 5,233 | 4,898 | |||||||||||||||||
Community Center Expansion: | |||||||||||||||||||
Hammock Landing - Academy Sports | West Melbourne, FL | 50% | 63,092 | 4,952 | 3,033 | March-15 | 8.6% | ||||||||||||
Total Properties Opened | 219,810 | $ | 27,510 | $ | 23,910 |
Properties Under Development at June 30, 2015
(Dollars in thousands)
CBL's Share of | |||||||||||||||||||
Property | Location | CBL Ownership Interest | Total Project Square Feet | Total Cost (1) | Cost to Date (2) | Expected Opening Date | Initial Unleveraged Yield | ||||||||||||
Community Center: | |||||||||||||||||||
Ambassador Town Center | Lafayette, LA | 65% | 438,230 | $ | 39,847 | $ | 11,873 | Spring-16 | 8.8% | ||||||||||
Community Center Expansion: | |||||||||||||||||||
Statesboro Crossing - Phase II (ULTA) | Statesboro, GA | 50% | 10,000 | 2,491 | 1,405 | Fall-15 | 8.1% | ||||||||||||
Mall/Outlet Center Expansions: | |||||||||||||||||||
Fremaux Town Center - Phase II | Slidell, LA | 65% | 281,032 | 24,684 | 13,317 | Fall-15 | 9.7% | ||||||||||||
Kirkwood Mall - Self Development (Panera Bread, Verizon, Caribou Coffee) | Bismarck, ND | 100% | 12,500 | 3,820 | 1,231 | Fall-15 | 10.5% | ||||||||||||
The Outlet Shoppes at Atlanta - Phase II | Woodstock, GA | 75% | 32,944 | 4,174 | 1,216 | Fall-15 | 13.9% | ||||||||||||
The Outlet Shoppes of the Bluegrass - Phase II | Simpsonville, KY | 65% | 53,378 | 7,671 | 2,673 | Fall-15 | 11.0% | ||||||||||||
Sunrise Mall - Dick's Sporting Goods | Brownsville, TX | 100% | 50,000 | 8,278 | 2,043 | Fall-15 | 8.8% | ||||||||||||
429,854 | 48,627 | 20,480 | |||||||||||||||||
Mall Redevelopment: | |||||||||||||||||||
Brookfield Square - Sears Redevelopment (Blackfin Ameripub, Jason's Deli) | Brookfield, WI | 100% | 21,814 | 7,700 | 3,526 | Fall-15 | 8.0% | ||||||||||||
Coolsprings Galleria - Sears Redevelopment (American Girl, Cheesecake Factory) | Nashville, TN | 50% | 182,163 | 35,612 | 20,011 | Spring-15 / Summer-16 | 7.0% | ||||||||||||
Hickory Point Mall - JCP Redevelopment (Hobby Lobby) | Forsyth, IL | 100% | 60,000 | 2,764 | 2,032 | Fall-15 | 10.7% | ||||||||||||
Janesville Mall - JCP Redevelopment (Dick's Sporting Goods / ULTA) | Janesville, WI | 100% | 149,522 | 11,051 | 4,919 | Fall-15 | 8.4% | ||||||||||||
Meridian Mall - Gordmans | Lansing, MI | 100% | 50,000 | 7,193 | 5,361 | Summer-15 | 10.3% | ||||||||||||
Northgate Mall - Streetscape/ULTA | Chattanooga, TN | 100% | 50,852 | 8,989 | 5,999 | Fall-14 / Summer-15 | 10.5% | ||||||||||||
Randolph Mall - JCP Redevelopment (Ross/ULTA) | Asheboro, NC | 100% | 33,796 | 4,372 | 92 | Summer-16 | 7.8% | ||||||||||||
Regency Square-Sears (Dunham's Sports) | Racine, WI | 100% | 89,119 | 3,404 | 86 | Fall-15 | 9.0% | ||||||||||||
637,266 | 81,085 | 42,026 | |||||||||||||||||
Total Properties Under Development | 1,515,350 | $ | 172,050 | $ | 75,784 |
(1) | Total Cost is presented net of reimbursements to be received. |
(2) | Cost to Date does not reflect reimbursements until they are received. |
29
Exhibit 99.2
7/30/2015
CBL & ASSOCIATES PROPERTIES, INC.
CONFERENCE CALL, SECOND QUARTER
July 30, 2015 @ 11:00 AM ET
Katie:
Thank you and good morning. We appreciate your participation in the CBL & Associates Properties, Inc. conference call to discuss second quarter results. Joining me today are Stephen Lebovitz, President and CEO and Farzana Mitchell, Executive Vice President and CFO. I’ll begin by reading our safe harbor disclosure and then will turn it over to Stephen for his remarks.
This conference call contains "forward-looking statements" within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties. Future events and actual results, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. We direct you to the Company’s various filings with the Securities and Exchange Commission including, without limitation, the Company’s most recent Annual Report on Form 10-K. During our discussion today, references made to per share amounts are based upon a fully diluted converted share basis.
During this call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each non-GAAP financial measure to the comparable GAAP financial measure will be included in today’s earnings release that is furnished on Form 8-K along with a transcript of today’s comments and additional supplemental schedules. This call will also be available for replay on the Internet through a link on our website at cblproperties.com.
Stephen:
Thank you, Katie and good morning everyone.
Yesterday we announced that our Board has authorized a $200 million stock repurchase program, demonstrating the confidence that management and the Board have in the underlying value of the CBL portfolio. The discount to NAV that our stock is trading at is more than compelling in our view. This authorization provides us with the flexibility to utilize future disposition proceeds to take advantage of this discount and invest in what we view as a tremendous acquisition opportunity - our own high quality properties. We will fund repurchases by utilizing a portion of asset sale proceeds from our mall disposition program as well as sales of other properties. To be clear, we do not intend to borrow to fund share repurchases and continue to prioritize maintaining and improving our credit metrics to support our investment grade rating.
The transformation of the CBL portfolio is our top priority. I will discuss disposition activity shortly but wanted to first talk about the acquisition of Mayfaire Town Center and Mayfaire Community Center in Wilmington, NC, which we closed this quarter. Mayfaire holds the dominant position in its market with no comparable competition, making it a perfect fit for the CBL portfolio and furthering the goal of improving our asset-quality and growth rate. With sales of $390 per square foot, we have added a strong tier one asset with significant growth opportunities including the following:
1
• | As leases mature, the low 8% in-place occupancy cost offers tremendous upside. |
• | There are several available parcels with strong interest expressed from national restaurants that will upgrade the mix at the property and generate near term income growth. |
• | The center has roughly 20,000 square feet of vacancy that we anticipate leasing with high quality retailers. |
• | Additionally, we are in the pre-development phase to add 75,000 - 100,000 square feet of retail on developable land that was acquired with the project. |
We believe that Mayfaire will provide exactly the type of near and long-term growth that our portfolio strategy is designed to unlock, progressing CBL towards our goal of a higher growth-rate portfolio.
During the second quarter, we made progress on certain dispositions, closing on the sale of Eastgate Crossing in Cincinnati, OH for a gross sales price of $22.8 million, including the assumption of the related loan. We also closed on the sale of Madison Square Mall in Huntsville, AL for a cash sales price of $5.0 million. Subsequent to the quarter-end, we completed the sale of its associated center, Madison Plaza for $5.7 million. Including these sales, year-to-date we have raised approximately $52 million of equity. We anticipate closing in the third quarter on the new 15/85 joint venture of Triangle Towne Center and its associated center in Raleigh, NC. We are also working with the special servicer on Gulf Coast Town Center and anticipate a resolution by year-end.
Including the pending transactions, we have disposed of six of the 25 targeted mall assets. We have held back six malls from the market that have anchor redevelopments in process. The other properties are in various stages of marketing or negotiation. In addition, we have targeted certain power and community centers for disposition to provide an additional source to reduce leverage and fund our stock buyback program. At current valuations, these assets provide an attractive capital source. The depth of the market for institutional quality community and power centers leads us to be optimistic that these sales will be completed later this year or in early 2016.
While the market for lower tier malls is challenging due to buyers’ concerns over the combination of tenant bankruptcies and anchor uncertainty, we are aggressively pursuing various avenues to execute sales on an expedited basis. These include a traditional on and off-market process, larger portfolio dispositions and joint ventures. In recent months CMBS financing for lower productivity malls has become more difficult to obtain. Banks and unregulated lenders provide an alternative source, but these institutions are also underwriting conservatively. Given the current market, we realistically expect our process to take at least the full three years that we outlined at the start of the program.
It is important to note that the assets targeted for sale represent less than 10% of our Company’s total enterprise value and 14% of our mall NOI. These properties are not distressed. They are generating significant and stable cash flow that we are redeploying into attractive redevelopment and expansion projects in our core portfolio.
As a reminder, over the past three years we have made significant progress in disposing of lower productivity and non-core assets. Since 2012, we have disposed or conveyed more than 25 non-core assets including a dozen malls as well as community centers, office buildings and other assets totaling over $700 million. This includes 12 assets totaling approximately $330 million that we have completed dispositions of, or have pending, since announcing our program a little more than a year ago. Throughout this process we have been able to manage dilution, maintaining and growing our EBITDA and FFO.
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Now, I’ll spend a few minutes discussing our operational performance.
Results for the quarter were in-line with expectations with flat same-center NOI and FFO in-line with consensus at $0.54 per share, on an adjusted basis. We have made solid progress in re-leasing spaces that were vacated earlier this year due to bankruptcy activity. To-date, of the 175 stores closed, we have 62 leases executed or out for signature and an additional 53 leases in active negotiations. Most of these leases will take occupancy late this year or in 2016.
We mentioned last quarter that due to timing, second quarter would bear the full impact of the bankruptcy related store closures. As anticipated, same-center stabilized mall occupancy ended the quarter down 330 basis points. Overall portfolio occupancy ended the quarter down 250 basis points at 91%. We anticipate this spread to diminish as we head into the third and fourth quarters, ending the year down 150-200 basis points from 2014.
Looking past the bankruptcies, retail demand, leasing activity and lease spreads remain strong. We executed more than 370,000 square feet of leases in the malls during the quarter. The average increase in gross rents for new and renewal leases was 8.7%. Spreads on renewal leases were 4% and new lease spreads remain high at 29%.
Retail sales for the quarter in our portfolio were excellent, with continued healthy growth. Sales during the second quarter grew 4.1%, bringing our rolling 12-month same-center sales up 3.7% to $368 per square foot. Back-to-school will be an important indicator of what to expect for the holiday sales season and we are optimistic that positive trends will continue. Cosmetics, athletic shoes, home and eyewear sustained strong increases into the quarter with mixed results across apparel retailers.
I will now turn the call back over to Katie to provide an overview of our redevelopment and development pipeline.
Katie:
Thank you, Stephen.
As we have discussed, one of our priorities is to invest in our existing centers to redevelop underperforming locations and expand and upgrade high performing centers. We are making significant progress in meeting this goal. Construction is nearing completion on the new ULTA and Dick’s Sporting Goods in the former JCPenney store at Janesville Mall in Janesville, WI. Both new stores have openings planned for this fall. We are redeveloping a portion of the Sears store at Brookfield Square in Brookfield, WI into a new restaurant district that will open later this year. A new 50,000-square-foot Dick’s Sporting Goods will open at Sunrise Mall in Brownsville, TX, in time for the holiday sales season.
In May we celebrated the grand opening of the Sears redevelopment at CoolSprings Galleria. Hundreds of little girls and their families lined up to enjoy Nashville’s first American Girl, which joined great retail and restaurants names such as H&M, Cheesecake Factory and Belk Home. Earlier this month we opened a 50,000-square-foot Gordman’s at Meridian Mall in Lansing, MI. Hobby Lobby also opened this month in a new 60,000-square-foot store in the former JCPenney space at Hickory Point in Forsyth, IL.
In addition to this activity, we are adding more than 20 new boxes and junior anchors across our portfolio this year. In August, ULTA will open at our Northgate Mall in Chattanooga. Three additional ULTA stores will open in our centers this fall including the new store at Janesville Mall as well as openings at Statesboro Crossing in Statesboro, GA and CoolSprings Galleria in Nashville. Ten new H&M stores will celebrate grand openings across the CBL portfolio in 2015 including a new store at CoolSprings Galleria which opened
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earlier this year. The remaining nine stores will open in the fall. At Mid Rivers Mall in St. Peters, MO, we opened a new Planet Fitness in May.
At Regency Square in Racine, WI we have started construction on a new Dunham’s Sporting Goods in the former Sear’s location. The 88,000-square foot store will open in November. Additionally, the third-party owner of the former JCPenney store at the center recently announced that they will redevelop the space to bring in Ross, JoAnn Fabric and PetSmart. These new retailers will be outstanding additions for Regency Square.
At Randolph Mall in Asheboro, NC, construction is commencing on a new Ross and ULTA in the former JCPenney location. Openings are scheduled for summer 2016. At Kirkwood Mall in Bismarck, ND, we are opening several new retailers this fall in a 13,000-square-foot freestanding addition. New stores include Panera Bread, Verizon and Caribou Coffee.
Our outlet center portfolio continues to show strong results which is supporting several expansions. Construction is progressing on the second phase of The Outlet Shoppes of the Bluegrass. The 53,000-square-foot expansion will include H&M, The Limited Outlet and several other brands. In Atlanta, construction is underway on the 33,000-square foot phase II expansion that includes Gap and banana republic. Both expansions are expected to open before year-end.
Moving to new developments, Phase II of Fremaux Town Center in Slidell, LA is under construction and will open this October. The 280,000-square-foot project will be anchored by Dillard’s and will include additional fashion oriented shops such as Ann Taylor LOFT, Chico’s, Aveda and Francesca’s. The 340,000-square-foot Phase I of Fremaux Town Center opened last year and is currently 100% occupied. This project is being developed in a joint venture with Stirling Properties.
Construction is also well underway on Ambassador Town Center in Lafayette, LA, our second joint venture project with Stirling. The 438,000-square-foot center will be anchored by Costco, Dick’s Sporting Goods, Field & Stream, Marshalls, Home Goods, and Nordstrom Rack. The grand opening is anticipated in March 2016.
I will now turn the call over to Farzana to provide an update on financing as well as a review of our financial performance.
Farzana:
Thank you, Katie. Adjusted FFO for the quarter was $0.54 per share, compared with $0.55 per share for the prior-year. FFO, as adjusted, in the current quarter excluded a $3.0 million litigation settlement and related expense recorded in G&A. This amount was offset by settlement proceeds received in previous quarters.
FFO for the second quarter reflects results from new properties such as, Parkway Plaza, The Outlet Shoppes of the Bluegrass, Fremaux Town Center as well as several expansions and redevelopments. This growth in FFO was offset by dilution from the disposition of several malls and community centers as well as lost income from store closures. Continued sales growth resulted in percentage rents increasing $0.6 million. Property operating and maintenance and repair expense declined from the prior year period offset by an increase in real estate tax expense. The increase in real estate tax expense was partially recovered from tenants. Bad debt expense was $0.6 million versus $0.7 million in the prior year period. Interest expense declined as a result of interest rate savings achieved as we retired higher rate secured loans.
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G&A as a percentage of total revenues excluding litigation expense was 5.2% for the quarter compared with 4.4% in the prior-year. G&A in the current quarter, excluding litigation expense, was $1.9 million higher due to additions to personnel and consulting expense related to technology and process improvements.
Our cost recovery ratio for the second quarter was 103.5% compared with 100.8% in the prior-year period, due to lower operating and maintenance and repair expenses.
Same-center NOI in the quarter increased 30 basis points for the total portfolio and was flat in the mall portfolio. Year-to-date same-center NOI growth is 40 basis points. Same-center NOI growth continues to be moderated by the impact of bankruptcy-related store closures. As we communicated during the first quarter call, our results in the second quarter were more severely impacted by the closures resulting in top-line revenue growth of only $1.1 million for the same-center pool. This included a $0.9 million decline in base and short-term rents, a $0.5 million increase in percentage rents and a $1.5 million increase in tenant reimbursements. Property operating expense declined $0.9 million, primarily as a result of a $0.4 million decline in bad debt expense. Real estate tax expense increased $1.2 million, largely due to a tax refund received for one of the properties in the prior-year period.
Based on year-to-date performance, the acquisition of Mayfaire and our expectations for the remainder of 2015, we are increasing our adjusted FFO guidance to a range of $2.25 to $2.32 per share. The addition of Mayfaire is approximately $0.02 accretive to FFO based on the June acquisition date. This increase is partially offset by a slightly higher G&A assumption of $57 - $59 million for the year due to new personnel and consulting expense related to technology and process improvements. These improvements will streamline our systems and create efficiencies.
We are maintaining our same-center NOI growth assumption of 0% - 2%. In order to reach the higher-end of our NOI guidance range, we would need healthy improvements in percentage rent and additional temporary income as well as further savings in operating expenses. As compared with the prior-year end, we expect occupancy to end the year 150-200 basis point lower, in the range of 92.5% to 93.5%. Consistent with our practice, guidance does not include any future unannounced asset sales, acquisitions or capital markets transactions.
We continue to make solid progress in the transformation of our balance sheet. Since our last call we have retired five secured loans totaling over $370 million using availability under our lines of credit. These pay offs allowed us to add five high quality properties to our unencumbered pool with rolling 12-month sales averaging approximately $385 per square foot. We have two wholly-owned secured loans remaining, that will mature this year totaling $87 million. Given our conservative approach to utilizing floating rate debt, we anticipate issuing unsecured bonds later this year to reduce our line balance, subject to market conditions. We are also in the process of refinancing a number of our maturing joint venture loans. Our share of these loans in 2015 totals $202 million. Based on the current indication of spreads and benchmark rates, we anticipate achieving interest rate savings over the prior rates.
At quarter-end our total debt balance of $5.49 billion represents a $140 million increase from year-end 2014 and a $169.0 million increase from first quarter. Over the past year we have made significant investments in our portfolio, generating new sources of EBITDA with the acquisition of Mayfaire Towne Center as well as funding our new development and redevelopment pipeline substantially with free cash flow and asset sale proceeds. At quarter-end our lines of credit were 35% drawn, providing us with more than $846 million of availability. Since quarter-end, we have utilized $323 million of additional funds to repay secured debt, reducing our available balance to approximately $520 million. Our financial covenants are healthy with our fixed charge coverage ratio of 2.2 times and an interest coverage ratio of 2.8 times, both flat with the prior year. Secured debt to gross book value declined to 35% at quarter-end from 40% in the prior-year period.
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Including the pay-offs that were completed subsequent to the quarter-end, secured debt to gross book value declined to 32% and consolidated unencumbered NOI represented 44% of total consolidated NOI.
I’ll now turn the call over to Stephen for concluding remarks.
Stephen:
Thank you, Farzana.
Thank you again for joining us this morning. We are pleased with the progress we have made in leasing through the quarter and encouraged by the ongoing strength in retail demand and sales. We hope that many of you will be able to join us for our Kentucky property tour on September 10th, where we will show off our three great centers in the Louisville and Lexington markets. Please reach out to Katie for further details. We are now happy to answer any questions you may have.
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