CHATTANOOGA, Tenn.--(BUSINESS WIRE)-- CBL & Associates Properties, Inc. (NYSE:CBL):
- FFO per diluted share, as adjusted, was $0.55 for the second quarter of 2014 compared with $0.55 for the prior-year period.
- Average gross rent per square foot for stabilized mall leases signed in the second quarter of 2014 increased 11.7% over the prior gross rent per square foot.
- Total portfolio occupancy increased 50 basis points to 93.5% in the second quarter of 2014 over the prior-year period.
- Same-store sales per square foot increased 1.1% for reporting stabilized mall tenants 10,000-square-feet or less during the second quarter 2014 compared with the prior-year period.
CBL & Associates Properties, Inc. (NYSE:CBL) announced results for the second quarter ended June 30, 2014. 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, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Funds from Operations ("FFO") per diluted share | $ | 0.55 | $ | 0.51 | $ | 1.28 | $ | 1.04 | |||||||||
| FFO, as adjusted, per diluted share (1) | $ | 0.55 | $ | 0.55 | $ | 1.06 | $ | 1.08 | |||||||||
(1) FFO, as adjusted, for the six months ended June 30, 2014, excludes a partial legal settlement of $0.8 million and gain on extinguishment of debt of $42.7 million primarily related to the January 2014 foreclosure of the mortgage loan secured by Citadel Mall. FFO, as adjusted, for the three and six months ended June 30, 2013, excludes a loss on extinguishment of debt of $9.1 million, primarily related to the prepayment of a secured loan and a gain on investment of $2.4 million related to collection of a note receivable.
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CBL's President and Chief Executive Officer Stephen Lebovitz commented, "With our strong second quarter results, we remain on track to meet our outlined goals for the year for same-center NOI growth and other key operating metrics. We are also making progress on our asset disposition program with one additional mall under contract and several others under active negotiations. We are committed to the successful execution of our strategy to dispose of non-core properties and reinvest into higher growth assets.
"We are also excited about this week's opening of The Outlet Shoppes of the Bluegrass between Louisville and Lexington, Kentucky, which is 100% leased with an incredible line-up of more than 80 premium brands. This property is a terrific addition to the CBL portfolio. "
FFO allocable to common shareholders, as adjusted, for the second quarter of 2014 was $93.0 million, or $0.55 per diluted share, compared with $90.8 million, or $0.55 per diluted share, for the second quarter of 2013. FFO of the operating partnership, as adjusted, for the second quarter of 2014 was $109.1 million compared with $106.9 million, for the second quarter of 2013. FFO per share was flat from the prior-year period primarily as a result of dilution from the equity raised through the Company's At-The-Market program during the second quarter 2013 and the sale of assets in the third quarter 2013.
Net income attributable to common shareholders for the second quarter of 2014 was $26.7 million, or $0.16 per diluted share, compared with net income of $0.5 million, or $0.00 per diluted share, for the second quarter of 2013.
Percentage change in same-center Net Operating Income ("NOI")(1):
| Three Months Ended June 30, 2014 | ||
| Portfolio same-center NOI | 1.9% | |
| Mall same-center NOI | 1.4% | |
| (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 income of the Company's subsidiary that provides maintenance, janitorial and security services. | ||
MAJOR VARIANCES IMPACTING SAME-CENTER NOI RESULTS FOR THE QUARTER ENDED JUNE 30, 2014
- Contributions from new and renewal lease spreads resulted in $3.5 million of growth in minimum rent compared with the prior-year period, partially offset by a $0.7 million decline in percentage rents due to lower sales year-to-date.
- Operating expenses improved by $0.4 million and maintenance and repairs improved by $0.8 million, primarily as a result of expense controls and cost saving measures.
- Real estate taxes increased by $0.5 million.
PORTFOLIO OPERATIONAL RESULTS
Occupancy:
| As of June 30, | ||||
| 2014 | 2013 | |||
| Portfolio occupancy | 93.5% | 93.0% | ||
| Mall portfolio | 93.1% | 92.7% | ||
| Same-center stabilized malls | 92.9% | 93.0% | ||
| Stabilized malls | 92.9% | 92.6% | ||
| Non-stabilized malls (1) | 97.6% | 100.0% | ||
| Associated centers | 95.0% | 93.6% | ||
| Community centers | 97.0% | 96.4% | ||
| (1) Includes The Outlet Shoppes at Oklahoma City and The Outlet Shoppes at Atlanta as of June 30, 2014. Includes The Outlet Shoppes at Oklahoma City as of June 30, 2013. | ||||
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:
| % Change in Average Gross Rent Per Square Foot | ||
| Six Months Ended June 30, 2014 | ||
| Stabilized Malls | 11.7% | |
| New leases | 27.8% | |
| Renewal leases | 4.2% | |
Same-Store Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:
| Twelve Months Ended June 30, | ||||||||||
| 2014 | 2013 | % Change | ||||||||
| Stabilized mall same-store sales per square foot | $ | 354 | $ | 364 | (2.7)% | |||||
DEVELOPMENT
On July 31st, the Company will celebrate the Grand Opening of The Outlet Shoppes of the Bluegrass in Simpsonville (Louisville), KY. The 375,000-square-foot outlet center will open 100% leased or committed with more than 80 stores, including Michael Kors, Nike, Saks Fifth Avenue off 5th and The North Face.
TRANSACTIONS
In May 2014, the Company completed the sale of Lakeshore Mall in Sebring, FL, for $14.0 million. In June 2014, the Company completed the sale of an expansion to the Foothills Plaza associated center in Maryville, TN, for $2.6 million.
Subsequent to the quarter-end, CBL entered into non-binding contracts for the sale of one mall and its associated center and a community center. Subject to the completion of normal due diligence and closing conditions, the sales are expected to close in the fourth quarter 2014. The aggregate scale of the transactions is less than $25.0 million. Additional details will be announced following the expiration of due diligence.
FINANCING ACTIVITY
In July, CBL closed on a $126.0 million non-recourse loan secured by Coastal Grand in Myrtle Beach, SC. The mall is owned in a 50/50 joint venture. The new ten-year loan bears interest at a fixed rate of 4.0865% and matures in August 2024. Proceeds from the loan were used to retire the existing $75.2 million loan. Excess proceeds were distributed 50/50 to the Company and its partner. The Company used its share of net proceeds to pay down outstanding balances on the Company's lines of credit.
OUTLOOK AND GUIDANCE
The Company is affirming 2014 Adjusted FFO guidance in the range of $2.22 - $2.26 per diluted share. CBL is assuming same-center NOI growth of 1.0-2.0% in 2014.
The guidance also assumes the following:
- Flat interest expense
- $2.0 million to $4.0 million of outparcel sales
- 0-25 basis point increase in total portfolio occupancy as well as stabilized mall occupancy throughout 2014
- No additional unannounced acquisition or disposition activity
- No unannounced capital markets activity - equity or debt
| Low | High | |||||||||
| Expected diluted earnings per common share | $ | 0.56 | $ | 0.60 | ||||||
| Adjust to fully converted shares from common shares | (0.09 | ) | (0.10 | ) | ||||||
| Expected earnings per diluted, fully converted common share | 0.47 | 0.50 | ||||||||
| Depreciation and amortization | 1.79 | 1.79 | ||||||||
| Noncontrolling interest in earnings of Operating Partnership | 0.08 | 0.09 | ||||||||
| Impairment of real estate | 0.09 | 0.09 | ||||||||
| Expected FFO per diluted, fully converted common share | $ | 2.43 | $ | 2.47 | ||||||
| Net gain on debt extinguishment and litigation settlement | (0.21 | ) | (0.21 | ) | ||||||
| Expected adjusted FFO per diluted, fully converted common share | $ | 2.22 | $ | 2.26 | ||||||
INVESTOR CONFERENCE CALL AND WEBCAST
CBL & Associates Properties, Inc. will conduct a conference call at 11:00 a.m. ET on Wednesday, July 30, 2014, to discuss its second quarter results. The number to call for this interactive teleconference is (800) 736-4594 or (212) 231-2902. A replay of the conference call will be available through August 6, 2014, by dialing (800) 633-8284 or (402) 977-9140 and entering the confirmation number, 21706209. 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 our website atcblproperties.com or contact Investor Relations at 423-490-8312.
The Company will also provide an online webcast and rebroadcast of its 2014 second quarter earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Wednesday, July 30, 2014 beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for one year.
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 152 properties, including 92 regional malls/open-air centers. The properties are located in 30 states and total 86.7 million square feet including 7.3 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 allocable to common shareholders as defined above by NAREIT less dividends on preferred stock. The Company’s method of calculating FFO allocable to its common shareholders 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 of its operating partnership and FFO allocable to its common shareholders, as it believes that both are useful performance measures. The Company believes FFO of its operating partnership 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 its common shareholders, 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 its operating partnership. The Company then applies a percentage to FFO of its operating partnership 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 first quarter of 2014, the Company recognized a $42.7 million net gain on the extinguishment of debt in connection with the foreclosure of the mortgage loan encumbering Citadel Mall and the early retirement of the mortgage loan encumbering St. Clair Square. Additionally, the Company received income of $0.8 million as a partial settlement of ongoing litigation. During the three and six month periods ended June 30, 2013, the Company recorded $2.4 million of gain on investment and $9.1 million of loss on extinguishment of debt. Considering the significance and nature of these items, the Company believes it is important to identify their impact on 2014 FFO measures for readers to have a complete understanding on the Company's results of operations. Therefore, the Company has also presented adjusted FFO measures for 2014, excluding these items.
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).
Similar to FFO, the Company computes NOI based on its pro rata share of both consolidated and unconsolidated properties. 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 Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| REVENUES: | ||||||||||||||||||||
| Minimum rents | $ | 167,631 | $ | 165,512 | $ | 336,908 | $ | 330,930 | ||||||||||||
| Percentage rents | 1,824 | 2,335 | 5,430 | 7,051 | ||||||||||||||||
| Other rents | 4,613 | 4,521 | 9,895 | 9,665 | ||||||||||||||||
| Tenant reimbursements | 70,774 | 70,666 | 142,992 | 142,948 | ||||||||||||||||
| Management, development and leasing fees | 2,813 | 2,850 | 5,948 | 5,925 | ||||||||||||||||
| Other | 9,278 | 9,701 | 17,003 | 17,548 | ||||||||||||||||
| Total revenues | 256,933 | 255,585 | 518,176 | 514,067 | ||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||
| Property operating | 35,527 | 33,663 | 75,538 | 72,796 | ||||||||||||||||
| Depreciation and amortization | 70,609 | 68,117 | 139,692 | 137,173 | ||||||||||||||||
| Real estate taxes | 22,089 | 21,389 | 43,436 | 43,805 | ||||||||||||||||
| Maintenance and repairs | 12,623 | 13,229 | 28,788 | 27,419 | ||||||||||||||||
| General and administrative | 11,336 | 12,876 | 26,109 | 26,300 | ||||||||||||||||
| Loss on impairment | 106 | 21,038 | 17,256 | 21,038 | ||||||||||||||||
| Other | 7,390 | 8,191 | 13,935 | 14,847 | ||||||||||||||||
| Total operating expenses | 159,680 | 178,503 | 344,754 | 343,378 | ||||||||||||||||
| Income from operations | 97,253 | 77,082 | 173,422 | 170,689 | ||||||||||||||||
| Interest and other income | 1,544 | 661 | 3,072 | 1,388 | ||||||||||||||||
| Interest expense | (59,277 | ) | (57,209 | ) | (119,783 | ) | (117,033 | ) | ||||||||||||
| Gain (loss) on extinguishment of debt | — | (9,108 | ) | 42,660 | (9,108 | ) | ||||||||||||||
| Gain on sales of real estate assets | 1,925 | 457 | 3,079 | 1,000 | ||||||||||||||||
| Gain on investment | — | 2,400 | — | 2,400 | ||||||||||||||||
| Equity in earnings of unconsolidated affiliates | 3,418 | 2,729 | 7,102 | 5,348 | ||||||||||||||||
| Income tax provision | (786 | ) | (757 | ) | (1,183 | ) | (583 | ) | ||||||||||||
| Income from continuing operations | 44,077 | 16,255 | 108,369 | 54,101 | ||||||||||||||||
| Operating income (loss) of discontinued operations | (59 | ) | 1,893 | (558 | ) | 3,151 | ||||||||||||||
| Gain on discontinued operations | 107 | 91 | 90 | 872 | ||||||||||||||||
| Net income | 44,125 | 18,239 | 107,901 | 58,124 | ||||||||||||||||
| Net income attributable to noncontrolling interests in: | ||||||||||||||||||||
| Operating Partnership | (4,620 | ) | (36 | ) | (12,271 | ) | (3,527 | ) | ||||||||||||
| Other consolidated subsidiaries | (1,547 | ) | (6,479 | ) | (2,378 | ) | (12,560 | ) | ||||||||||||
| Net income attributable to the Company | 37,958 | 11,724 | 93,252 | 42,037 | ||||||||||||||||
| Preferred dividends | (11,223 | ) | (11,223 | ) | (22,446 | ) | (22,446 | ) | ||||||||||||
| Net income attributable to common shareholders | $ | 26,735 | $ | 501 | $ | 70,806 | $ | 19,591 | ||||||||||||
| Basic and diluted per share data attributable to common shareholders: | ||||||||||||||||||||
| Income (loss) from continuing operations, net of preferred dividends | $ | 0.16 | $ | (0.01 | ) | $ | 0.42 | $ | 0.10 | |||||||||||
| Discontinued operations | 0.00 | 0.01 | 0.00 | 0.02 | ||||||||||||||||
| Net income attributable to common shareholders | $ | 0.16 | $ | 0.00 | $ | 0.42 | $ | 0.12 | ||||||||||||
| Weighted-average common and potential dilutive common shares outstanding | 170,267 | 166,607 | 170,232 | 164,088 | ||||||||||||||||
| Amounts attributable to common shareholders: | ||||||||||||||||||||
| Income (loss) from continuing operations, net of preferred dividends | $ | 26,694 | $ | (1,184 | ) | $ | 71,205 | $ | 16,181 | |||||||||||
| Discontinued operations | 41 | 1,685 | (399 | ) | 3,410 | |||||||||||||||
| Net income attributable to common shareholders | $ | 26,735 | $ | 501 | $ | 70,806 | $ | 19,591 | ||||||||||||
The Company's calculation of FFO allocable to Company shareholders is as follows:
(in thousands, except per share data) | |||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
| Net income attributable to common shareholders | $ | 26,735 | $ | 501 | $ | 70,806 | $ | 19,591 | |||||||||||||
| Noncontrolling interest in income of Operating Partnership | 4,620 | 36 | 12,271 | 3,527 | |||||||||||||||||
| Depreciation and amortization expense of: | |||||||||||||||||||||
| Consolidated properties | 70,609 | 68,117 | 139,692 | 137,173 | |||||||||||||||||
| Unconsolidated affiliates | 10,256 | 9,923 | 20,117 | 19,871 | |||||||||||||||||
| Discontinued operations | — | 2,398 | — | 5,004 | |||||||||||||||||
| Non-real estate assets | (603 | ) | (484 | ) | (1,197 | ) | (958 | ) | |||||||||||||
| Noncontrolling interests' share of depreciation and amortization | (1,569 | ) | (1,282 | ) | (3,102 | ) | (2,889 | ) | |||||||||||||
| Loss on impairment | 106 | 21,038 | 17,937 | 21,038 | |||||||||||||||||
| Gain on depreciable property | (952 | ) | — | (934 | ) | (2 | ) | ||||||||||||||
| Gain on discontinued operations, net of taxes | (87 | ) | (55 | ) | (87 | ) | (540 | ) | |||||||||||||
| Funds from operations of the Operating Partnership | 109,115 | 100,192 | 255,503 | 201,815 | |||||||||||||||||
| Litigation settlement | — | — | (800 | ) | — | ||||||||||||||||
| Gain on investment | — | (2,400 | ) | — | (2,400 | ) | |||||||||||||||
| (Gain) loss on extinguishment of debt | — | 9,108 | (42,660 | ) | 9,108 | ||||||||||||||||
| Funds from operations of the Operating Partnership, as adjusted | $ | 109,115 | $ | 106,900 | $ | 212,043 | $ | 208,523 | |||||||||||||
| Funds from operations per diluted share | $ | 0.55 | $ | 0.51 | $ | 1.28 | $ | 1.04 | |||||||||||||
| Funds from operations, as adjusted, per diluted share | $ | 0.55 | $ | 0.55 | $ | 1.06 | $ | 1.08 | |||||||||||||
Weighted average common and potential dilutive common shares outstanding with Operating Partnership units fully converted
| 199,726 | 196,153 | 199,734 | 193,633 | |||||||||||||||||
Reconciliation of FFO of the Operating Partnership to FFO allocable to common shareholders:
| |||||||||||||||||||||
| Funds from operations of the Operating Partnership | $ | 109,115 | $ | 100,192 | $ | 255,503 | $ | 201,815 | |||||||||||||
| Percentage allocable to common shareholders (1) | 85.25 | % | 84.94 | % | 85.23 | % | 84.74 | % | |||||||||||||
| Funds from operations allocable to common shareholders | $ | 93,021 | $ | 85,103 | $ | 217,765 | $ | 171,018 | |||||||||||||
| Funds from operations of the Operating Partnership, as adjusted | $ | 109,115 | $ | 106,900 | $ | 212,043 | $ | 208,523 | |||||||||||||
| Percentage allocable to common shareholders (1) | 85.25 | % | 84.94 | % | 85.23 | % | 84.74 | % | |||||||||||||
Funds from operations allocable to common shareholders, as adjusted
| $ | 93,021 | $ | 90,801 | $ | 180,724 | $ | 176,702 | |||||||||||||
| (1) Represents the weighted average number of common shares outstanding for the period divided by the sum of the weighted average number of common shares and the weighted average number of Operating Partnership units outstanding during the period. See the reconciliation of shares and Operating Partnership units outstanding on page 11. | |||||||||||||||||||||
| SUPPLEMENTAL FFO INFORMATION: | |||||||||||||||||||||
| Lease termination fees | $ | 419 | $ | 1,725 | $ | 1,351 | $ | 2,538 | |||||||||||||
| Lease termination fees per share | $ | — | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||||||
| Straight-line rental income | $ | 801 | $ | 1,746 | $ | 1,283 | $ | 2,836 | |||||||||||||
| Straight-line rental income per share | $ | — | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||||||
| Gains on outparcel sales | $ | 1,000 | $ | 457 | $ | 2,145 | $ | 1,000 | |||||||||||||
| Gains on outparcel sales per share | $ | 0.01 | $ | — | $ | 0.01 | $ | 0.01 | |||||||||||||
| Net amortization of acquired above- and below-market leases | $ | 188 | $ | 43 | $ | 405 | $ | 629 | |||||||||||||
| Net amortization of acquired above- and below-market leases per share | $ | — | $ | — | $ | — | $ | — | |||||||||||||
| Net amortization of debt premiums and discounts | $ | 539 | $ | 700 | $ | 1,080 | $ | 1,076 | |||||||||||||
| Net amortization of debt premiums and discounts per share | $ | — | $ | — | $ | 0.01 | $ | 0.01 | |||||||||||||
| Income tax provision | $ | (786 | ) | $ | (757 | ) | $ | (1,183 | ) | $ | (583 | ) | |||||||||
| Income tax provision per share | $ | — | $ | — | $ | (0.01 | ) | $ | — | ||||||||||||
| Loss on impairment from continuing operations | $ | (106 | ) | $ | (21,038 | ) | $ | (17,256 | ) | $ | (21,038 | ) | |||||||||
| Loss on impairment from continuing operations per share | $ | — | $ | (0.11 | ) | $ | (0.09 | ) | $ | (0.11 | ) | ||||||||||
| Loss on impairment from discontinued operations | $ | — | $ | — | $ | (681 | ) | $ | — | ||||||||||||
| Loss on impairment from discontinued operations per share | $ | — | $ | — | $ | — | $ | — | |||||||||||||
| Gain (loss) on extinguishment of debt | $ | — | $ | (9,108 | ) | $ | 42,660 | $ | (9,108 | ) | |||||||||||
| Gain (loss) on extinguishment of debt per share | $ | — | $ | (0.05 | ) | $ | 0.21 | $ | (0.05 | ) | |||||||||||
| Gain on investment | $ | — | $ | 2,400 | $ | — | $ | 2,400 | |||||||||||||
| Gain on investment per share | $ | — | $ | 0.01 | $ | — | $ | 0.01 | |||||||||||||
| Interest capitalized | $ | 1,457 | $ | 1,207 | $ | 2,866 | $ | 1,929 | |||||||||||||
| Interest capitalized per share | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | |||||||||||||
| Litigation settlement | $ | — | $ | — | $ | 800 | $ | — | |||||||||||||
| Litigation settlement per share | $ | — | $ | — | $ | — | $ | — | |||||||||||||
| As of June 30, | |||||||||||||||||||||
| 2014 | 2013 | ||||||||||||||||||||
| Straight-line rent receivable |
$
|
63,411
| $ | 63,797 | |||||||||||||||||
Same-Center Net Operating Income
(Dollars in thousands) | |||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
| Net income attributable to the Company | $ | 37,958 | $ | 11,724 | $ | 93,252 | $ | 42,037 | |||||||||||||
| Adjustments: | |||||||||||||||||||||
| Depreciation and amortization | 70,609 | 68,117 | 139,692 | 137,173 | |||||||||||||||||
| Depreciation and amortization from unconsolidated affiliates | 10,256 | 9,923 | 20,117 | 19,871 | |||||||||||||||||
| Depreciation and amortization from discontinued operations | — | 2,398 | — | 5,004 | |||||||||||||||||
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries
| (1,569 | ) | (1,282 | ) | (3,102 | ) | (2,889 | ) | |||||||||||||
| Interest expense | 59,277 | 57,209 | 119,783 | 117,033 | |||||||||||||||||
| Interest expense from unconsolidated affiliates | 9,662 | 9,764 | 19,153 | 19,836 | |||||||||||||||||
Noncontrolling interests' share of interest expense in other consolidated subsidiaries
| (1,307 | ) | (977 | ) | (2,618 | ) | (1,953 | ) | |||||||||||||
| Abandoned projects expense | 33 | (1 | ) | 34 | 1 | ||||||||||||||||
| Gain on sales of real estate assets | (1,925 | ) | (457 | ) | (3,079 | ) | (1,000 | ) | |||||||||||||
| Gain on investment | — | (2,400 | ) | — | (2,400 | ) | |||||||||||||||
| (Gain) loss on extinguishment of debt | — | 9,108 | (42,660 | ) | 9,108 | ||||||||||||||||
| Loss on impairment | 106 | 21,038 | 17,256 | 21,038 | |||||||||||||||||
| Loss on impairment from discontinued operations | — | — | 681 | — | |||||||||||||||||
| Income tax provision | 786 | 757 | 1,183 | 583 | |||||||||||||||||
| Lease termination fees | (419 | ) | (1,725 | ) | (1,351 | ) | (2,538 | ) | |||||||||||||
| Straight-line rent and above- and below-market lease amortization | (989 | ) | (1,790 | ) | (1,688 | ) | (3,466 | ) | |||||||||||||
Net income attributable to noncontrolling interest in earnings of Operating Partnership
| 4,620 | 36 | 12,271 | 3,527 | |||||||||||||||||
| Gain on discontinued operations | (107 | ) | (91 | ) | (90 | ) | (872 | ) | |||||||||||||
| General and administrative expenses | 11,336 | 12,876 | 26,109 | 26,300 | |||||||||||||||||
| Management fees and non-property level revenues | (6,159 | ) | (1,071 | ) | (13,130 | ) | (2,607 | ) | |||||||||||||
| Company's share of property NOI | 192,168 | 193,156 | 381,813 | 383,786 | |||||||||||||||||
| Non-comparable NOI | (15,129 | ) | (19,441 | ) | (31,401 | ) | (39,791 | ) | |||||||||||||
| Total same-center NOI (1) | $ | 177,039 | $ | 173,715 | $ | 350,412 | $ | 343,995 | |||||||||||||
| Total same-center NOI percentage change | 1.9 | % | 1.9 | % | |||||||||||||||||
| Malls | $ | 161,480 | $ | 159,256 | $ | 319,968 | $ | 314,826 | |||||||||||||
| Associated centers | 8,450 | 8,064 | 16,613 | 16,275 | |||||||||||||||||
| Community centers | 4,969 | 4,504 | 9,774 | 9,140 | |||||||||||||||||
| Offices and other | 2,140 | 1,891 | 4,057 | 3,754 | |||||||||||||||||
| Total same-center NOI (1) | $ | 177,039 | $ | 173,715 | $ | 350,412 | $ | 343,995 | |||||||||||||
| Percentage Change: | |||||||||||||||||||||
| Malls | 1.4 | % | 1.6 | % | |||||||||||||||||
| Associated centers | 4.8 | % | 2.1 | % | |||||||||||||||||
| Community centers | 10.3 | % | 6.9 | % | |||||||||||||||||
| Offices and other | 13.2 | % | 8.1 | % | |||||||||||||||||
| Total same-center NOI (1) | 1.9 | % | 1.9 | % | |||||||||||||||||
(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, 2014, 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, 2014. 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 non-core properties, properties under major redevelopment, properties where we intend to renegotiate the terms of the debt secured by the related property and properties included in discontinued operations.
| ||||||||||||||||||||
Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands) | |||||||||||||||
| 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 | % | |||||||||
| As of June 30, 2013 | |||||||||||||||
| Fixed Rate | Variable Rate | Total | |||||||||||||
| Consolidated debt | $ | 3,534,693 | $ | 1,087,702 | $ | 4,622,395 | |||||||||
| Noncontrolling interests' share of consolidated debt | (68,211 | ) | (5,700 | ) | (73,911 | ) | |||||||||
| Company's share of unconsolidated affiliates' debt | 657,160 | 132,824 | 789,984 | ||||||||||||
| Company's share of consolidated and unconsolidated debt | $ | 4,123,642 | $ | 1,214,826 | $ | 5,338,468 | |||||||||
| Weighted average interest rate | 5.51 | % | 2.11 | % | 4.74 | % | |||||||||
Debt-To-Total-Market Capitalization Ratio as of June 30, 2014
(In thousands, except stock price)
| |||||||||||||||
| Shares Outstanding | Stock
Price (1)
| Value | |||||||||||||
| Common stock and operating partnership units | 199,636 | $ | 19.00 | $ | 3,793,084 | ||||||||||
| 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 | 4,419,334 | ||||||||||||||
| Company's share of total debt | 5,467,756 | ||||||||||||||
| Total market capitalization | $ | 9,887,090 | |||||||||||||
| Debt-to-total-market capitalization ratio | 55.3 | % | |||||||||||||
(1)
|
Stock price for common stock and operating partnership units equals the closing price of the common stock on June 30, 2014. The stock prices for the preferred stocks represent the liquidation preference of each respective series.
| ||||||||||||||
Reconciliation of Shares and Operating Partnership Units Outstanding
(In thousands) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2014: | Basic | Diluted | Basic | Diluted | |||||||||||
| 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 | |||||||||||
| 2013: | |||||||||||||||
| Weighted average shares - EPS | 166,607 | 166,607 | 164,088 | 164,088 | |||||||||||
| Weighted average Operating Partnership units | 29,546 | 29,546 | 29,545 | 29,545 | |||||||||||
| Weighted average shares- FFO | 196,153 | 196,153 | 193,633 | 193,633 | |||||||||||
Dividend Payout Ratio
| ||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
| Weighted average cash dividend per share | $ | 0.25313 | $ | 0.23838 | $ | 0.50625 | $ | 0.47702 | ||||||||||||
| FFO as adjusted, per diluted fully converted share | $ | 0.55 | $ | 0.55 | $ | 1.06 | $ | 1.08 | ||||||||||||
| Dividend payout ratio | 46.0 | % | 43.3 | % | 47.8 | % | 44.2 | % | ||||||||||||
| Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
| ||||||||||
| As of | ||||||||||
| June 30, 2014 | December 31, 2013 | |||||||||
| ASSETS | ||||||||||
| Real estate assets: | ||||||||||
| Land | $ | 852,963 | $ | 858,619 | ||||||
| Buildings and improvements | 7,085,523 | 7,125,512 | ||||||||
| 7,938,486 | 7,984,131 | |||||||||
| Accumulated depreciation | (2,126,434 | ) | (2,056,357 | ) | ||||||
| 5,812,052 | 5,927,774 | |||||||||
| Developments in progress | 185,906 | 139,383 | ||||||||
| Net investment in real estate assets | 5,997,958 | 6,067,157 | ||||||||
| Cash and cash equivalents | 63,482 | 65,500 | ||||||||
| Receivables: | ||||||||||
Tenant, net of allowance for doubtful accounts of $2,380 and $2,379 in 2014 and 2013, respectively
| 76,468 | 79,899 | ||||||||
Other, net of allowance for doubtful accounts of $1,120 and $1,241 in 2014 and 2013, respectively
| 22,108 | 23,343 | ||||||||
| Mortgage and other notes receivable | 40,137 | 30,424 | ||||||||
| Investments in unconsolidated affiliates | 271,868 | 277,146 | ||||||||
| Intangible lease assets and other assets | 229,493 | 242,502 | ||||||||
| $ | 6,701,514 | $ | 6,785,971 | |||||||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | ||||||||||
| Mortgage and other indebtedness | $ | 4,810,811 | $ | 4,857,523 | ||||||
| Accounts payable and accrued liabilities | 315,298 | 333,875 | ||||||||
| Total liabilities | 5,126,109 | 5,191,398 | ||||||||
| Commitments and contingencies | ||||||||||
| Redeemable noncontrolling partnership interests | 36,540 | 34,639 | ||||||||
| 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, 170,260,769 and 170,048,144 issued and outstanding in 2014 and 2013, respectively
| 1,703 | 1,700 | ||||||||
| Additional paid-in capital | 1,962,103 | 1,967,644 | ||||||||
| Accumulated other comprehensive income | 9,659 | 6,325 | ||||||||
| Dividends in excess of cumulative earnings | (583,405 | ) | (570,781 | ) | ||||||
| Total shareholders' equity | 1,390,085 | 1,404,913 | ||||||||
| Noncontrolling interests | 148,780 | 155,021 | ||||||||
| Total equity | 1,538,865 | 1,559,934 | ||||||||
| $ | 6,701,514 | $ | 6,785,971 | |||||||
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