CHATTANOOGA, Tenn.--(BUSINESS WIRE)--
CBL & Associates Properties, Inc. (NYSE:CBL) announced results for the
first quarter ended March 31, 2009. 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. All share and per
share information for the periods presented have been adjusted to
reflect the issuance of common stock and common units, as applicable, in
connection with the Company's April 15, 2009, dividend payment.
Funds from Operations ("FFO") allocable to common shareholders for the
first quarter ended March 31, 2009, was $51,124,000, or $0.72 per
diluted share, compared with $53,605,000, or $0.75 per diluted share for
the first quarter ended March 31, 2008. FFO allocable to common
shareholders for the first quarter ended March 31, 2009, was impacted by
a non-cash impairment charge of $7,706,000 related to the Company's
investment in subsidiaries of Jinsheng Group ("Jinsheng"), an
established mall operating and real estate development company located
in Nanjing, China. Excluding the non-cash impairment charge, FFO would
have increased 4.0% to $0.78 per diluted share from the prior-year
period.
FFO of the operating partnership for the first quarter ended March 31,
2009, was $88,450,000, compared with $92,855,000 for the first quarter
ended March 31, 2008. FFO of the operating partnership for the first
quarter ended March 31, 2009, was impacted by the non-cash impairment
charge of $7,706,000 related to the Company's investment in Jinsheng
referred to above.
Net income available to common shareholders for the first quarter ended
March 31, 2009, was $1,712,000, or $0.02 per diluted share, compared
with net income of $6,171,000, or $0.09 per diluted share for the
prior-year period. Net income available to common shareholders for the
first quarter ended March 31, 2009, was impacted by the non-cash
impairment charge of $4,373,000 (adjusted for noncontrolling interest)
related to the Company's investment in Jinsheng referred to above.
HIGHLIGHTS
-
Total revenues declined 3.5% during the first quarter ended March 31,
2009, to $271,060,000 from $280,931,000 in the prior-year period.
-
Same-center net operating income for the portfolio ("NOI"), for the
first quarter ended March 31, 2009, declined by 1.2% compared with a
decline of 0.6% for the prior-year period.
-
Same-store sales for mall tenants of 10,000 square feet or less for
stabilized malls as of March 31, 2009, declined 4.4% to $326 per
square foot compared with $341 per square foot in the prior-year
period.
-
The debt-to-total-market capitalization ratio as of March 31, 2009,
was 92.1% based on the common stock closing price of $2.36 and a fully
converted common stock share count of 117,064,000 shares as of
the same date. The debt-to-total-market capitalization ratio as of
March 31, 2008, was 67.6% based on the common stock closing price of
$23.53 and a fully converted common stock share count of 116,941,000
shares as of the same date.
-
Consolidated and unconsolidated variable rate debt of $1,679,902,000
represents 23.3% of the total market capitalization for the Company
and 25.3% of the Company's share of total consolidated and
unconsolidated debt.
CBL's Chairman and Chief Executive Officer, Charles B. Lebovitz, said,
"We are continuing to meet the challenges of the current economic and
retail environments head-on. The significant progress on our cost
reduction initiatives in corporate overhead and property-level expenses
as well as better operating efficiencies had a measurable benefit in the
first quarter, helping to mitigate anticipated pressure on NOI. The
dominant locations our regional malls enjoy have helped us hold the line
in a tumultuous operating environment, which should better enable us to
benefit from an economic recovery."
During the quarter, we continued to focus our financing efforts toward
eliminating our near-term debt maturities with the refinancing of Cary
Towne Center and the extension of the loan on St. Clair Square. We are
making significant progress towards finalizing the remaining 2009
maturities. While the operating and financing environment continues to
present major demands, the entire CBL organization is focused on working
through these current challenges and positioning ourselves for long-term
opportunities."
PORTFOLIO OCCUPANCY March 31,
2009 2008
Portfolio occupancy 88.6 % 91.6 %
Mall portfolio 88.9 % 91.3 %
Stabilized malls 89.1 % 91.4 %
Non-stabilized malls 80.3 % 89.2 %
Associated centers 89.0 % 94.9 %
Community centers 86.5 % 90.0 %
FINANCING
During the first quarter the Company announced the closing of a $74.1
million eight-year, non-recourse loan secured by Cary Towne Center in
Cary, NC, with a fixed interest rate of 8.50%. This loan replaced an
$82.1 million loan, which had a fixed interest rate of 6.85% and was
scheduled to mature in March 2009. The loan was refinanced with the
existing lender.
Subsequent to the quarter end, CBL entered into a one-year extension on
the $59.0 million loan secured by St. Clair Square in Fairview Heights,
IL with the existing lender at a fixed interest rate of 7.50%.
DIVIDEND
During the quarter, CBL's Board of Directors declared a quarterly
dividend for the Company's common stock of $0.37 per share for the
quarter ended March 31, 2009. As part of the Company's continuing focus
on maximizing liquidity, the Board determined to pay this dividend in a
combination of cash and shares of the Company's common stock.
The quarterly dividend on the Company's common stock was paid on
66,407,096 shares of common stock outstanding on the record date. The
Company issued 4,754,355 shares of its common stock in connection with
the dividend, which resulted in an increase of 7.2% in the number of
shares outstanding. The Company's operating partnership issued 1,338,079
additional common units in connection with the quarterly distribution to
unitholders, which resulted in an increase of 2.6% to the 50,610,613
units and special common units that were outstanding. The Company has
elected to treat the issuance of its common stock and common units in
its operating partnership as a stock dividend for per share purposes.
Therefore, all share and per share information related to earnings per
share and FFO for the periods presented have been increased
proportionately to reflect the additional common stock and common units
issued.
OUTLOOK AND GUIDANCE
Based on today's outlook and the Company's first quarter results, the
Company is maintaining 2009 FFO guidance of $2.95 to $3.09 per share,
adjusted to reflect the additional common stock and common units issued
in connection with the Company's first quarter dividend paid on April
15, 2009. The full year guidance assumes $6.0 million to $9.0 million of
outparcel sales and same-center NOI growth in the range of (1.5%) to
(3.5%), excluding the impact of lease termination fees from both
applicable periods. The guidance excludes the impact of any future
unannounced acquisitions or dispositions. The Company expects to update
its annual guidance after each quarter's results.
Low High
Expected diluted earnings per common share $ 0.46 $ 0.60
Adjust to fully converted shares from common shares (0.19 ) (0.25 )
Expected earnings per diluted, fully converted common 0.27 0.35
share
Add: depreciation and amortization 2.47 2.47
Add: noncontrolling interest in earnings of Operating 0.21 0.27
Partnership
Expected FFO per diluted, fully converted common share $ 2.95 $ 3.09
INVESTOR CONFERENCE CALL AND SIMULCAST
CBL & Associates Properties, Inc. will conduct a conference call at
11:00 a.m. ET on Thursday, April 30, 2009, to discuss the first quarter
results. The number to call for this interactive teleconference is
(303) 262-2130. A seven-day replay of the conference call will be
available by dialing (303) 590-3000 and entering the passcode 11123992#.
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. first quarter earnings
release and supplemental information, please visit our website at cblproperties.com
or contact Investor Relations at 423-490-8312.
The Company will also provide an online Web simulcast and rebroadcast of
its 2009 first quarter earnings release conference call. The live
broadcast of CBL's quarterly conference call will be available online at
the Company's Web site at cblproperties.com,
as well as http://www.talkpoint.com/viewer/starthere.asp?Pres=125652
on Thursday, April 30, 2009, beginning at 11:00 a.m. ET. The online
replay will follow shortly after the call and continue through May 9,
2009.
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 159 properties, including 88 regional malls/open-air centers.
The properties are located in 27 states and total 86.0 million square
feet including 2.2 million square feet of non-owned shopping centers
managed for third parties. CBL currently has six projects under
construction totaling 2.5 million square feet including Settlers Ridge
in Pittsburgh, PA; The Pavilion at Port Orange in Port Orange, FL; The
Promenade in D'Iberville, MS; two lifestyle/associated centers, and one
expansion. Headquartered in Chattanooga, TN, CBL has regional offices in
Boston (Waltham), MA, Dallas, 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 determined in accordance with
GAAP. The National Association of Real Estate Investment Trusts
("NAREIT") defines FFO as net income (computed in accordance with GAAP)
excluding gains or losses on sales of operating 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. The Company
defines FFO allocable to its 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
available to its common shareholders.
In the reconciliation of net income available to the Company's common
shareholders to FFO allocable to its common shareholders, the Company
makes an adjustment to add back noncontrolling interest in earnings 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 for purposes of
evaluating the Company's operating performance or to cash flow as a
measure of liquidity.
Same-Center Net Operating Income
NOI is a supplemental measure of the operating performance of the
Company's shopping centers. The Company defines NOI as 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. A reconciliation of same-center NOI to net income is
located at the end of this earnings release.
Since NOI includes only those revenues and expenses related to the
operations of its shopping center 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. Additionally, there are
instances when tenants terminate their leases prior to the scheduled
expiration date and pay the Company one-time, lump-sum termination fees.
These one-time lease termination fees 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 properties. Therefore, the
Company believes that presenting same-center NOI, excluding lease
termination fees, is useful to investors.
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" incorporated by reference 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
March 31,
2009 2008
REVENUES:
Minimum rents $ 171,937 $ 174,531
Percentage rents 4,804 4,996
Other rents 4,280 5,014
Tenant reimbursements 81,484 86,423
Management, development and leasing fees 2,465 2,938
Other 6,090 7,029
Total revenues 271,060 280,931
EXPENSES:
Property operating 44,017 48,292
Depreciation and amortization 78,311 75,081
Real estate taxes 24,154 24,179
Maintenance and repairs 15,994 17,916
General and administrative 11,479 12,531
Other 5,157 6,999
Total expenses 179,112 184,998
Income from operations 91,948 95,933
Interest and other income 1,581 2,727
Interest expense (71,885 ) (80,224 )
Impairment of investment (7,706 ) -
Gain (loss) on sales of real estate assets (139 ) 3,076
Equity in earnings of unconsolidated affiliates 1,534 979
Income tax provision (603 ) (357 )
Income from continuing operations 14,730 22,134
Operating income (loss) of discontinued operations (66 ) 283
Loss on discontinued operations (60 ) -
Net income 14,604 22,417
Net income attributable to noncontrolling interests
in:
Operating partnership (1,306 ) (4,742 )
Other consolidated subsidiaries (6,131 ) (6,049 )
Net income attributable to the Company 7,167 11,626
Preferred dividends (5,455 ) (5,455 )
Net income available to common shareholders $ 1,712 $ 6,171
Basic per share data attributable to common
shareholders:
Income from continuing operations, net of preferred $ 0.03 $ 0.08
dividends
Discontinued operations (0.01 ) 0.01
Net income available to common shareholders $ 0.02 $ 0.09
Weighted average common shares outstanding 71,161 70,994
Diluted per share data attributable to common
shareholders:
Income from continuing operations, net of preferred $ 0.03 $ 0.08
dividends
Discontinued operations (0.01 ) 0.01
Net income available to common shareholders $ 0.02 $ 0.09
Weighted average common and potential dilutive 71,196 71,027
common shares outstanding
Amounts attributable to common shareholders:
Income from continuing operations, net of preferred $ 1,784 $ 6,011
dividends
Discontinued operations (72 ) 160
Net income available to common shareholders $ 1,712 $ 6,171
The Company's calculation of FFO allocable to its shareholders is as follows:
(in thousands, except per share data)
Three Months Ended
March 31,
2009 2008
Net income available to common shareholders $ 1,712 $ 6,171
Noncontrolling interest in earnings of operating 1,306 4,742
partnership
Depreciation and amortization expense of:
Consolidated properties 78,311 75,081
Unconsolidated affiliates 7,509 6,677
Discontinued operations - 775
Non-real estate assets (247 ) (243 )
Noncontrolling interests' share of depreciation and (201 ) (348 )
amortization
Loss on discontinued operations 60 -
Funds from operations of the operating partnership $ 88,450 $ 92,855
Funds from operations per diluted share $ 0.72 $ 0.75
Weighted average common and potential dilutive
common shares outstanding with operating partnership 123,145 123,001
units fully converted
Reconciliation of FFO of the operating partnership
to FFO allocable to common shareholders:
Funds from operations of the operating partnership $ 88,450 $ 92,855
Percentage allocable to common shareholders (1) 57.80 % 57.73 %
Funds from operations allocable to common $ 51,124 $ 53,605
shareholders
(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 9.
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees $ 2,543 $ 1,460
Lease termination fees per share $ 0.02 $ 0.01
Straight-line rental income $ 1,731 $ 1,501
Straight-line rental income per share $ 0.01 $ 0.01
Gains on outparcel sales $ 425 $ 3,360
Gains on outparcel sales per share $ - $ 0.03
Amortization of acquired above- and below-market $ 1,548 $ 2,597
leases
Amortization of acquired above- and below-market $ 0.01 $ 0.02
leases per share
Amortization of debt premiums $ 2,035 $ 2,076
Amortization of debt premiums per share $ 0.02 $ 0.02
Income tax provision $ (603 ) $ (357 )
Income tax provision per share $ - $ -
Abandoned projects $ (76 ) $ (1,713 )
Abandoned projects per share $ - $ (0.01 )
Impairment of investment $ (7,706 ) $ -
Impairment of investment per share $ (0.06 ) $ -
Same-Center Net Operating Income
(Dollars in thousands)
Three Months Ended
March 31,
2009 2008
Net income attributable to the Company $ 7,167 $ 11,626
Adjustments:
Depreciation and amortization 78,311 75,081
Depreciation and amortization from unconsolidated 7,509 6,677
affiliates
Depreciation and amortization from discontinued - 775
operations
Noncontrolling interests' share of depreciation and (201 ) (348 )
amortization in other consolidated subsidiaries
Interest expense 71,885 80,224
Interest expense from unconsolidated affiliates 7,865 6,626
Noncontrolling interests' share of interest expense (273 ) (448 )
in other consolidated subsidiaries
Abandoned projects expense 76 1,713
(Gain) loss on sales of real estate assets 139 (3,076 )
Gain on sales of real estate assets of (564 ) (284 )
unconsolidated affiliates
Impairment of investment 7,706 -
Income tax provision 603 357
Net income attributable to noncontrolling interest 1,306 4,742
in earnings of operating partnership
Loss on discontinued operations 60 -
Operating partnership's share of total NOI 181,589 183,665
General and administrative expenses 11,479 12,531
Management fees and non-property level revenues (5,932 ) (8,092 )
Operating partnership's share of property NOI 187,136 188,104
NOI of non-comparable centers (3,781 ) (2,541 )
Total same-center NOI $ 183,355 $ 185,563
Malls $ 166,875 $ 168,258
Associated centers 7,822 8,607
Community centers 3,370 3,401
Other 5,288 5,297
Total same-center NOI 183,355 185,563
Less lease termination fees (2,549 ) (1,352 )
Total same-center NOI, excluding lease termination $ 180,806 $ 184,211
fees
Percentage Change:
Malls -0.8 %
Associated centers -9.1 %
Community centers -0.9 %
Other -0.2 %
Total same-center NOI -1.2 %
Total same-center NOI, excluding lease termination -1.8 %
fees
Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
March 31, 2009
Fixed Rate Variable Rate Total
Consolidated debt $ 4,580,821 $ 1,514,076 $ 6,094,897
Noncontrolling interests' (23,477 ) (928 ) (24,405 )
share of consolidated debt
Company's share of
unconsolidated affiliates' 408,342 166,754 575,096
debt
Company's share of
consolidated and $ 4,965,686 $ 1,679,902 $ 6,645,588
unconsolidated debt
Weighted average interest rate 5.95 % 1.70 % 4.88 %
March 31, 2008
Fixed Rate Variable Rate Total
Consolidated debt $ 4,673,477 $ 1,216,143 $ 5,889,620
Noncontrolling interests' (24,073 ) (3,043 ) (27,116 )
share of consolidated debt
Company's share of
unconsolidated affiliates' 410,759 65,873 476,632
debt
Company's share of
consolidated and $ 5,060,163 $ 1,278,973 $ 6,339,136
unconsolidated debt
Weighted average interest rate 5.79 % 3.75 % 5.38 %
Debt-To-Total-Market Capitalization Ratio as of March 31, 2009
(In thousands, except stock price)
Shares
Outstanding Stock Price (1) Value
Common stock and operating 117,064 $ 2.36 $ 276,271
partnership units
7.75% Series C Cumulative 460 250.00 115,000
Redeemable Preferred Stock
7.375% Series D Cumulative 700 250.00 175,000
Redeemable Preferred Stock
Total market equity 566,271
Company's share of total debt 6,645,588
Total market capitalization $ 7,211,859
Debt-to-total-market 92.1 %
capitalization ratio
(1) Stock price for common stock and operating partnership units equals the
closing price of the common stock on March 31, 2009. The stock price for the
preferred stock represents the liquidation preference of each respective series
of preferred stock.
Reconciliation of Shares and Operating Partnership Units Outstanding (2)
(In thousands)
Three Months Ended
March 31,
2009: Basic Diluted
Weighted average 71,161 71,196
shares - EPS
Weighted average
operating 51,949 51,949
partnership
units
Weighted average 123,110 123,145
shares- FFO
2008:
Weighted average 70,994 71,027
shares - EPS
Weighted average
operating 51,974 51,974
partnership
units
Weighted average 122,968 123,001
shares- FFO
Dividend Payout Three Months Ended
Ratio
March 31,
2009 2008
Weighted average
cash dividend $ 0.21763 $ 0.55047
per share
FFO per diluted,
fully converted $ 0.72 $ 0.75
share
Dividend payout 30.2 % 73.4 %
ratio
(2) As adjusted for the common stock and common units issued in connection with
the Company's dividend payment on April 15, 2009.
Consolidated Balance Sheets
(Unaudited, in thousands except share data)
March 31, December 31,
2009 2008
ASSETS
Real estate assets:
Land $ 926,663 $ 902,504
Buildings and improvements 7,553,549 7,503,334
8,480,212 8,405,838
Less accumulated depreciation (1,371,814 ) (1,310,173 )
7,108,398 7,095,665
Developments in progress 189,679 225,815
Net investment in real estate assets 7,298,077 7,321,480
Cash and cash equivalents 44,073 51,227
Cash in escrow 2,490 2,700
Receivables:
Tenant, net of allowance 70,314 74,402
Other 11,104 12,145
Mortgage notes receivable 55,867 58,961
Investments in unconsolidated affiliates 197,498 207,618
Intangible lease assets and other assets 293,447 305,802
$ 7,972,870 $ 8,034,335
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other notes payable $ 6,094,897 $ 6,095,676
Accounts payable and accrued liabilities 308,468 329,991
Total liabilities 6,403,365 6,425,667
Commitments and contingencies
Redeemable noncontrolling interests 439,016 439,675
Shareholders' equity:
Preferred Stock, $.01 par value, 15,000,000
shares authorized:
7.75% Series C Cumulative Redeemable Preferred 5 5
Stock, 460,000 shares outstanding
7.375% Series D Cumulative Redeemable 7 7
Preferred Stock, 700,000 shares outstanding
Common Stock, $.01 par value, 180,000,000
shares authorized, 66,453,651 and 66,394,844 664 664
issued and outstanding in 2009 and 2008,
respectively
Additional paid-in capital 1,007,345 1,003,746
Accumulated other comprehensive loss (21,971 ) (22,594 )
Accumulated deficit (216,171 ) (193,307 )
Total shareholders' equity 769,879 788,521
Noncontrolling interests 360,610 380,472
Total equity 1,130,489 1,168,993
$ 7,972,870 $ 8,034,335
Source: CBL & Associates Properties, Inc.
Contact: CBL & Associates Properties, Inc.
Investor Contact:
Katie Reinsmidt, 423-490-8301
Vice President - Corporate Communications and Investor Relations
katie_reinsmidt@cblproperties.com