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CBL & Associates Properties Reports Second Quarter 2015 Results

July 29, 2015 4:05 PM

CHATTANOOGA, Tenn.--(BUSINESS WIRE)-- CBL & Associates Properties, Inc. (NYSE: CBL):

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 EndedJune 30, Six Months EndedJune 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."

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 EndedJune 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

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.

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 EndedJune 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:

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 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.

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.

CBL & Associates Properties, Inc.
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
Three Months EndedJune 30, Six Months EndedJune 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

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 EndedJune 30, Six Months EndedJune 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.
Three Months EndedJune 30, Six Months EndedJune 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
Same-center Net Operating Income

(Dollars in thousands)

Three Months EndedJune 30, Six Months EndedJune 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.

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)

SharesOutstanding 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.

Reconciliation of Shares and Operating Partnership Units Outstanding

(In thousands)

Three Months EndedJune 30, Six Months EndedJune 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 EndedJune 30, Six Months EndedJune 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 %
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

CBL & Associates Properties, Inc.

Katie Reinsmidt, 423-490-8301

Senior Vice President - Investor Relations/Corporate Investments

[email protected]

Source: CBL & Associates Properties, Inc.

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