CBL Properties Reports Results for Fourth Quarter and Full-Year 2023
- None.
- Same-center NOI declined in Q4 and for the full year 2023.
- Same-center tenant sales per square foot decreased in Q4 and for the 12-month period.
- Portfolio occupancy remained relatively flat compared to the previous year.
- Operating expenses increased despite efforts to limit them.
- Sales declines in 2023 may impact near-term percentage rent and renewal lease spreads negatively.
- Rising insurance costs and higher interest rates are expected to affect FFO in 2024.
Insights
Analyzing CBL Properties' financial results, several key indicators of financial health and operational efficiency are noteworthy. The reported Net Income attributable to common shareholders showed a significant improvement from a loss in the previous year to a profit, indicating a positive turnaround in profitability. This shift from a net loss to a net gain could reflect effective cost management strategies or an increase in revenue streams, which are critical for investor confidence and stock performance.
However, a closer look at the Funds from Operations (FFO) reveals a slight decline year-over-year. FFO is a critical measure for real estate investment trusts (REITs), as it provides a clearer picture of operating performance by excluding the effects of depreciation and other non-cash charges. The decline in FFO, despite an increase in net income, could suggest that the company's core operations might not be as robust as the net income figure alone might imply.
The announcement of an increased dividend could be seen as a signal of strength and a commitment to returning value to shareholders, which might positively influence investor sentiment. However, the decline in same-center tenant sales per square foot raises concerns about the underlying tenant performance and could be indicative of broader challenges in the retail sector that CBL operates within.
From a market perspective, the stability of CBL's portfolio occupancy around 90% is a positive sign, indicating resilience in their property portfolio amidst a challenging retail environment. However, it's important to note the slight decrease in same-center Net Operating Income (NOI), which is a key metric indicating the profitability of the properties. The decline in NOI could be a result of various factors such as tenant mix, lease renegotiations, or increased operating costs which have not been fully offset by revenue growth.
The leasing activity reported, with a significant amount of leases executed, is a testament to the company's ability to attract and retain tenants. The flat average rents on comparable leases suggest that while CBL is maintaining occupancy, it may not be achieving higher rental rates on new leases, which could limit revenue growth potential.
Looking forward, the guidance for 2024 indicates cautious optimism with expected improvements in NOI, albeit acknowledging potential headwinds such as rising insurance costs and higher interest rates. The detailed guidance also provides transparency into management's expectations and strategic focus areas, which is valuable for stakeholders to assess the company's future performance.
Examining the operational results and strategic initiatives, CBL's efforts in refinancing and addressing loan maturities are commendable, particularly in a rising interest rate environment. This proactive approach to managing debt obligations can mitigate financing risk and improve the company's credit profile. The extension and modification of loans, as well as the elimination of corporate guarantees, are strategic moves that could reduce financial risk and enhance the company's financial flexibility.
The stock repurchase program and the dividend increase suggest that the company is confident in its liquidity position and committed to delivering shareholder value. These actions can also be interpreted as management's belief that the stock is undervalued and thus repurchasing shares is a good use of capital.
It is important to highlight the development and redevelopment activity as an indicator of CBL's growth strategy. Investments in property improvements and enhancements can attract higher-quality tenants and increase foot traffic, potentially leading to increased rental income and property valuations in the long term.
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income (loss) attributable to common shareholders |
|
$ |
0.37 |
|
|
$ |
0.03 |
|
|
$ |
0.17 |
|
|
$ |
(3.20 |
) |
Funds from Operations ("FFO") |
|
$ |
1.80 |
|
|
$ |
1.99 |
|
|
$ |
6.59 |
|
|
$ |
5.78 |
|
FFO, as adjusted (1) |
|
$ |
1.94 |
|
|
$ |
2.11 |
|
|
$ |
6.66 |
|
|
$ |
7.88 |
|
(1) |
For a reconciliation of FFO to FFO, as adjusted, for the periods presented, please refer to the footnotes to the Company’s reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 8 of this news release. |
KEY TAKEAWAYS:
-
CBL initiates 2024 FFO, as adjusted, per share guidance in the range of
$6.19 $6.63 $428 million $442 million -
Same-center NOI declined
1.2% during the fourth quarter 2023 as compared with the prior-year quarter and declined1.5% in 2023 as compared with the prior year, near the high-end of the previously issued guidance range. -
FFO, as adjusted, per share was
$1.94 $6.66 $2.11 $7.88 -
Portfolio occupancy was
90.9% as of December 31, 2023, approximately flat compared with portfolio occupancy as of December 31, 2022. Same-center occupancy for malls, lifestyle centers and outlet centers was89.8% as of December 31, 2023, a 20-basis-point increase from89.6% as of December 31, 2022. - Nearly 4.4 million square feet of leases were executed in 2023, including approximately 1.3 million square feet in the fourth quarter. 2023 leasing results included comparable leases of approximately 2.7 million square feet signed at flat average rents versus the prior leases.
-
As anticipated, same-center tenant sales per square foot for the fourth quarter 2023 declined
2.6% . Same-center tenant sales per square foot for the 12-months ended December 31, 2023, declined4.4% to$416 $435 -
As of December 31, 2023, the Company had
$296 million -
CBL's Board of Directors declared a cash dividend of
$0.40 6.7% increase from the previous quarterly dividend rate of$0.37 5$1.60
“2023 was an excellent year for CBL," said CBL's chief executive officer, Stephen D. Lebovitz. "Same-center NOI and FFO, as adjusted, were at the high end of our guidance ranges. This strong performance was driven by a record level of leasing production, which drove occupancy improvements throughout the year. Comparable leasing was stable with flat blended lease spreads. The favorable retail environment produced strong demand for new store openings and limited closings. Although portfolio sales were down for the year, results improved in the fourth quarter with a strong close to the holiday season. NOI was also helped by our ability to limit increases in same-center operating expenses despite inflationary pressures.
"While rising interest rates contributed to a challenging financing environment, we successfully addressed all of our 2023 maturities. The refinancing of the Outlet Shops at
"Our 2024 guidance reflects the impact of operating momentum carried over from 2023, offset by certain anticipated headwinds this year. Our forecast assumes ongoing healthy tenant demand, improving specialty leasing income and the benefit of successful real estate tax appeals. Contributions from new large space openings, such as Thrill Factory at East Towne Mall and replacements for several Bed, Bath & Beyond spaces, such as Crunch Fitness at Coastal Grand and Schuler's Books at Meridian Mall will also positively impact revenues. Alternatively, the sales declines in 2023 will put pressure on near-term percentage rent and renewal lease spreads. Rising insurance costs will increase operating expenses and overall higher interest rates will continue to impact FFO. As we move forward in 2024, our team is working to offset these challenges and generate positive NOI growth. Our balance sheet is well-positioned with our strong cash balance and limited upcoming loan maturities. We are focused on sustaining strong leasing and operating momentum and generating further growth in free cash flow and shareholder value."
Same-center Net Operating Income (“NOI”) (1):
|
|
Three Months Ended December 31, |
||||||
|
|
2023 |
|
2022 |
||||
Total Revenues |
|
$ |
173,155 |
|
|
$ |
176,947 |
|
Total Expenses |
|
$ |
(53,689 |
) |
|
$ |
(56,046 |
) |
Total portfolio same-center NOI |
|
$ |
119,466 |
|
|
$ |
120,901 |
|
Total same-center NOI percentage change |
|
|
(1.2 |
)% |
|
|
||
|
|
|
|
|
||||
Estimate for uncollectable revenues (recovery) |
|
$ |
(219 |
) |
|
$ |
(410 |
) |
(1) |
CBL’s definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items such as straight-line rents and reimbursements, write-offs of landlord inducements and net amortization of above and below market leases. |
Same-center NOI for the fourth quarter 2023 declined
|
|
Year Ended December 31, |
||||||
|
|
2023 |
|
2022 |
||||
Total Revenues |
|
$ |
654,525 |
|
|
$ |
664,422 |
|
Total Expenses |
|
$ |
(216,013 |
) |
|
$ |
(219,047 |
) |
Total portfolio same-center NOI |
|
$ |
438,512 |
|
|
$ |
445,376 |
|
Total same-center NOI percentage change |
|
|
(1.5 |
)% |
|
|
||
|
|
|
|
|
||||
Estimate for uncollectable revenues (recovery) |
|
$ |
1,308 |
|
|
$ |
(4,334 |
) |
Same-center NOI for the year ended December 31, 2023, declined by
PORTFOLIO OPERATIONAL RESULTS
Occupancy(1):
|
|
As of December 31, |
||
|
|
2023 |
|
2022 |
Total portfolio |
|
|
|
|
Malls, Lifestyle Centers and Outlet Centers: |
|
|
|
|
Total malls |
|
|
|
|
Total lifestyle centers |
|
|
|
|
Total outlet centers |
|
|
|
|
Total same-center malls, lifestyle centers and outlet centers |
|
|
|
|
All Other: |
|
|
|
|
Total open-air centers |
|
|
|
|
Total other |
|
|
|
|
(1) |
Occupancy for malls, lifestyle centers and outlet centers represent percentage of in-line gross leasable area under 20,000 square feet occupied. Occupancy for open-air centers represents percentage of gross leasable area occupied. |
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:
% Change in Average Gross Rent Per Square Foot: |
||||
|
|
Three Months Ended
|
|
Year Ended
|
|
|
2023 |
|
2023 |
All Property Types |
|
(2.6)% |
|
|
Stabilized Malls, Lifestyle Centers and Outlet Centers |
|
(3.4)% |
|
(1.0)% |
New leases |
|
|
|
|
Renewal leases |
|
(4.2)% |
|
(2.6)% |
Same-Center Sales Per Square Foot for In-line Tenants 10,000 Square Feet or Less:
|
|
Sales Per Square Foot for the
|
|
|
||||||
|
|
2023 |
|
2022 |
|
% Change |
||||
Mall, Lifestyle Center and Outlet Center same-center sales per square foot |
|
$ |
416 |
|
|
$ |
435 |
|
|
(4.4)% |
DIVIDEND
On February 8, 2024, CBL’s Board of Directors approved a
FINANCING ACTIVITY
In 2023, CBL completed more than
In October, CBL, along with its
In October, CBL and its
In October, CBL exercised its option to extend the
In November, CBL and the lender of the loan secured by Volusia Mall in
CBL is cooperating with the foreclosure or conveyance of WestGate Mall in
In February 2024, CBL retired the
STOCK REPURCHASE PROGRAM ACTIVITY
On August 10, 2023, CBL announced that its Board of Directors authorized a stock repurchase program for the Company to buy up to
DISPOSITIONS
During the fourth quarter 2023, CBL completed the sale of one land parcel, generating
DEVELOPMENT AND REDEVELOPMENT ACTIVITY
Detailed project information is available in CBL’s Financial Supplement for Q4 2023, which can be found in the Invest – Financial Reports section of CBL’s website at cblproperties.com.
OUTLOOK AND GUIDANCE
Based on Management's expectations for 2024, CBL is initiating the following guidance for FFO, as adjusted, and same-center NOI for full-year 2024. Guidance excludes the impact of any unannounced transactions.
|
|
Low |
|
High |
||||
2024 FFO, as adjusted (in millions) |
|
$ |
196.0 |
|
|
$ |
210.0 |
|
2024 FFO, as adjusted, per share |
|
$ |
6.19 |
|
|
$ |
6.63 |
|
Weighted average common shares outstanding (in millions) |
|
31.7 |
|
|
31.7 |
|
||
2024 Same-Center NOI ("SC NOI") (in millions) |
|
$ |
428.0 |
|
|
$ |
442.0 |
|
2024 change in same-center NOI |
|
|
(1.9 |
)% |
|
|
1.3 |
% |
2023 vs. 2024 Same-Center NOI Guidance Bridge (in millions):
|
2024 SC NOI Low
|
|
2024 SC NOI High
|
|
Category Explanation |
||
2023 same-center NOI |
$ |
436.5 |
|
$ |
436.5 |
|
Harford Mall removed from same-center NOI pool. |
Net impact from new and renewal leasing activity |
|
5.5 |
|
|
9.0 |
|
Net impact of new leases, renewal leases and contractual rent bumps. |
Percentage rent |
|
(4.0 |
) |
|
(1.0 |
) |
Lower percentage rent resulting from an anticipated decline in full-year sales. |
Operating expense |
|
(2.0 |
) |
|
- |
|
Low end represents potential increase in operating expenses. |
Credit loss |
|
(6.0 |
) |
|
(1.5 |
) |
Unbudgeted reserve for tenants that may file for bankruptcy/close stores. |
Uncollectable revenue variance |
|
(2.0 |
) |
|
(1.0 |
) |
Represents the estimated impact of an unfavorable variance in the estimate for uncollectable revenues. |
2024 SC NOI Guidance |
$ |
428.0 |
|
$ |
442.0 |
|
|
% change |
|
(1.9 |
)% |
|
1.3 |
% |
|
Reconciliation of GAAP Earnings Per Share to 2024 FFO, as Adjusted, Per Share:
|
|
Low |
|
High |
||||
Expected diluted earnings per common share |
|
$ |
- |
|
|
$ |
0.44 |
|
Depreciation and amortization |
|
|
4.79 |
|
|
|
4.79 |
|
Dividends allocable to unvested restricted stock |
|
|
0.03 |
|
|
|
0.03 |
|
Debt discount accretion, net of noncontrolling interests' share |
|
|
1.46 |
|
|
|
1.46 |
|
Adjustment for unconsolidated affiliates with negative investment |
|
|
(0.09 |
) |
|
|
(0.09 |
) |
Expected FFO, as adjusted, per diluted, fully converted common share |
|
$ |
6.19 |
|
|
$ |
6.63 |
|
2024 Estimate of Capital Items (in millions):
|
|
Low |
High |
|||||
2024 Estimated maintenance capital/tenant allowances |
|
$ |
40.0 |
|
$ |
55.0 |
|
|
2024 Estimated development/redevelopment expenditures |
|
|
10.0 |
|
|
15.0 |
|
|
2024 Estimated principal amortization (including est. term loan ECF) |
|
|
70.0 |
|
|
80.0 |
|
|
Total Estimate |
|
$ |
120.0 |
|
$ |
150.0 |
|
|
ABOUT CBL PROPERTIES
Headquartered in
NON-GAAP FINANCIAL MEASURES
Funds From Operations
FFO is a widely used non-GAAP measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO as defined above by NAREIT. The Company’s method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors’ understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company’s properties and interest rates, but also by its capital structure.
The Company believes FFO allocable to Operating Partnership common unitholders is a useful performance measure since it conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership.
In the reconciliation of net income (loss) attributable to the Company’s common shareholders to FFO allocable to Operating Partnership common unitholders, located in this earnings release, the Company makes an adjustment to add back noncontrolling interest in income (loss) of its Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders.
FFO does not represent cash flows from operations as defined by GAAP, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company’s operating performance or to cash flow as a measure of liquidity.
The Company believes that it is important to identify the impact of certain significant items on its FFO measures for a reader to have a complete understanding of the Company’s results of operations. Therefore, the Company has also presented adjusted FFO measures excluding these items from the applicable periods. Please refer to the reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 8 of this news release for a description of these adjustments.
Same-center Net Operating Income
NOI is a supplemental non-GAAP measure of the operating performance of the Company’s shopping centers and other properties. The Company defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).
The Company computes NOI based on the Operating Partnership’s pro rata share of both consolidated and unconsolidated properties. The Company believes that presenting NOI and same-center NOI (described below) based on its Operating Partnership’s pro rata share of both consolidated and unconsolidated properties is useful since the Company conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's calculation of NOI may not be comparable to that of other companies.
Since NOI includes only those revenues and expenses related to the operations of the Company’s shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at the malls and operating costs and the impact of those trends on the Company’s results of operations. The Company’s calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-off of landlord inducement assets in order to enhance the comparability of results from one period to another. A reconciliation of same-center NOI to net income (loss) is located at the end of this earnings release.
Pro Rata Share of Debt
The Company presents debt based on the carrying value of its pro rata ownership share (including the carrying value of the Company’s pro rata share of unconsolidated affiliates and excluding noncontrolling interests’ share of consolidated properties) because it believes this provides investors a clearer understanding of the Company’s total debt obligations which affect the Company’s liquidity. A reconciliation of the Company’s pro rata share of debt to the amount of debt on the Company’s condensed consolidated balance sheet is located at the end of this earnings release.
Information included herein contains “forward-looking statements” within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. The reader is directed to the Company’s various filings with the Securities and Exchange Commission, including without limitation the Company’s Annual Report on Form 10-K, and the “Management's Discussion and Analysis of Financial Condition and Results of Operations” included therein, for a discussion of such risks and uncertainties.
Consolidated Statements of Operations |
||||||||||||||||
(Unaudited; in thousands, except per share amounts) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
REVENUES: |
|
|
|
|
|
|
|
|
||||||||
Rental revenues |
|
$ |
134,008 |
|
|
$ |
143,441 |
|
|
$ |
513,957 |
|
|
$ |
542,247 |
|
Management, development and leasing fees |
|
|
1,821 |
|
|
|
1,820 |
|
|
|
7,917 |
|
|
|
7,158 |
|
Other |
|
|
3,880 |
|
|
|
4,350 |
|
|
|
13,412 |
|
|
|
13,606 |
|
Total revenues |
|
|
139,709 |
|
|
|
149,611 |
|
|
|
535,286 |
|
|
|
563,011 |
|
EXPENSES: |
|
|
|
|
|
|
|
|
||||||||
Property operating |
|
|
(22,254 |
) |
|
|
(23,080 |
) |
|
|
(90,996 |
) |
|
|
(92,126 |
) |
Depreciation and amortization |
|
|
(42,376 |
) |
|
|
(61,841 |
) |
|
|
(190,505 |
) |
|
|
(256,310 |
) |
Real estate taxes |
|
|
(11,744 |
) |
|
|
(14,550 |
) |
|
|
(54,807 |
) |
|
|
(57,119 |
) |
Maintenance and repairs |
|
|
(11,334 |
) |
|
|
(11,417 |
) |
|
|
(41,336 |
) |
|
|
(42,485 |
) |
General and administrative |
|
|
(14,283 |
) |
|
|
(16,066 |
) |
|
|
(64,066 |
) |
|
|
(67,215 |
) |
Loss on impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(252 |
) |
Litigation settlement |
|
|
132 |
|
|
|
122 |
|
|
|
2,310 |
|
|
|
304 |
|
Other |
|
|
(23 |
) |
|
|
— |
|
|
|
(221 |
) |
|
|
(834 |
) |
Total expenses |
|
|
(101,882 |
) |
|
|
(126,832 |
) |
|
|
(439,621 |
) |
|
|
(516,037 |
) |
OTHER INCOME (EXPENSES): |
|
|
|
|
|
|
|
|
||||||||
Interest and other income |
|
|
3,939 |
|
|
|
3,722 |
|
|
|
13,199 |
|
|
|
4,938 |
|
Interest expense |
|
|
(42,317 |
) |
|
|
(33,914 |
) |
|
|
(172,905 |
) |
|
|
(217,342 |
) |
Gain on extinguishment of debt |
|
|
3,270 |
|
|
|
7,344 |
|
|
|
3,270 |
|
|
|
7,344 |
|
Gain on deconsolidation |
|
|
— |
|
|
|
— |
|
|
|
47,879 |
|
|
|
36,250 |
|
Loss on available-for-sale securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(39 |
) |
Gain on sales of real estate assets |
|
|
229 |
|
|
|
1,798 |
|
|
|
5,125 |
|
|
|
5,345 |
|
Reorganization items, net |
|
|
— |
|
|
|
36 |
|
|
|
— |
|
|
|
298 |
|
Income tax benefit (provision) |
|
|
487 |
|
|
|
(328 |
) |
|
|
(894 |
) |
|
|
(3,079 |
) |
Equity in earnings of unconsolidated affiliates |
|
|
9,043 |
|
|
|
3,488 |
|
|
|
11,865 |
|
|
|
19,796 |
|
Total other expenses |
|
|
(25,349 |
) |
|
|
(17,854 |
) |
|
|
(92,461 |
) |
|
|
(146,489 |
) |
Net income (loss) |
|
|
12,478 |
|
|
|
4,925 |
|
|
|
3,204 |
|
|
|
(99,515 |
) |
Net (income) loss attributable to noncontrolling interests in: |
|
|
|
|
|
|
|
|
||||||||
Operating Partnership |
|
|
(8 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
34 |
|
Other consolidated subsidiaries |
|
|
(657 |
) |
|
|
(2,003 |
) |
|
|
3,344 |
|
|
|
5,999 |
|
Net income (loss) attributable to the Company |
|
|
11,813 |
|
|
|
2,922 |
|
|
|
6,546 |
|
|
|
(93,482 |
) |
Earnings allocable to unvested restricted stock |
|
|
(276 |
) |
|
|
(2,111 |
) |
|
|
(1,113 |
) |
|
|
(2,537 |
) |
Net income (loss) attributable to common shareholders |
|
$ |
11,537 |
|
|
$ |
811 |
|
|
$ |
5,433 |
|
|
$ |
(96,019 |
) |
Basic and diluted per share data attributable to common shareholders: |
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share |
|
$ |
0.37 |
|
|
$ |
0.03 |
|
|
$ |
0.17 |
|
|
$ |
(3.20 |
) |
Diluted earnings per share |
|
|
0.37 |
|
|
|
0.03 |
|
|
|
0.17 |
|
|
|
(3.20 |
) |
Weighted-average basic shares |
|
|
31,291 |
|
|
|
30,999 |
|
|
|
31,303 |
|
|
|
30,046 |
|
Weighted-average diluted shares |
|
|
31,291 |
|
|
|
30,999 |
|
|
|
31,303 |
|
|
|
30,046 |
|
The Company's reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows: |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income (loss) attributable to common shareholders |
|
$ |
11,537 |
|
|
$ |
811 |
|
|
$ |
5,433 |
|
|
$ |
(96,019 |
) |
Noncontrolling interest in loss of Operating Partnership |
|
|
8 |
|
|
|
— |
|
|
|
2 |
|
|
|
(34 |
) |
Earnings allocable to unvested restricted stock |
|
|
276 |
|
|
|
2,111 |
|
|
|
1,113 |
|
|
|
2,537 |
|
Depreciation and amortization expense of: |
|
|
|
|
|
|
|
|
||||||||
Consolidated properties |
|
|
42,376 |
|
|
|
61,841 |
|
|
|
190,505 |
|
|
|
256,310 |
|
Unconsolidated affiliates |
|
|
4,145 |
|
|
|
(191 |
) |
|
|
17,408 |
|
|
|
20,813 |
|
Non-real estate assets |
|
|
(232 |
) |
|
|
(526 |
) |
|
|
(905 |
) |
|
|
(1,050 |
) |
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries |
|
|
(507 |
) |
|
|
(832 |
) |
|
|
(2,442 |
) |
|
|
(3,498 |
) |
Loss on impairment, net of taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
186 |
|
Gain on depreciable property |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(629 |
) |
FFO allocable to Operating Partnership common unitholders |
|
|
57,603 |
|
|
|
63,214 |
|
|
|
211,114 |
|
|
|
178,616 |
|
Debt discount accretion, including our share of unconsolidated affiliates and net of noncontrolling interests' share (1) |
|
|
13,909 |
|
|
|
22,131 |
|
|
|
61,788 |
|
|
|
176,055 |
|
Adjustment for unconsolidated affiliates with negative investment (2) |
|
|
(6,062 |
) |
|
|
(1,522 |
) |
|
|
(7,242 |
) |
|
|
(37,645 |
) |
Senior secured notes fair value adjustment (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(395 |
) |
Litigation settlement (4) |
|
|
(132 |
) |
|
|
(122 |
) |
|
|
(2,310 |
) |
|
|
(304 |
) |
Non-cash default interest expense (5) |
|
|
— |
|
|
|
(9,148 |
) |
|
|
972 |
|
|
|
(28,953 |
) |
Gain on deconsolidation (6) |
|
|
— |
|
|
|
— |
|
|
|
(47,879 |
) |
|
|
(36,250 |
) |
Loss on available-for-sale securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39 |
|
Reorganization items, net (7) |
|
|
— |
|
|
|
(36 |
) |
|
|
— |
|
|
|
(298 |
) |
Gain on extinguishment of debt (8) |
|
|
(3,270 |
) |
|
|
(7,344 |
) |
|
|
(3,270 |
) |
|
|
(7,344 |
) |
FFO allocable to Operating Partnership common unitholders, as adjusted |
|
$ |
62,048 |
|
|
$ |
67,173 |
|
|
$ |
213,173 |
|
|
$ |
243,521 |
|
FFO per diluted share |
|
$ |
1.80 |
|
|
$ |
1.99 |
|
|
$ |
6.59 |
|
|
$ |
5.78 |
|
FFO, as adjusted, per diluted share |
|
$ |
1.94 |
|
|
$ |
2.11 |
|
|
$ |
6.66 |
|
|
$ |
7.88 |
|
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted |
|
|
32,007 |
|
|
|
31,840 |
|
|
|
32,015 |
|
|
|
30,888 |
|
(1) |
In conjunction with fresh start accounting upon emergence from bankruptcy, the Company recognized debt discounts equal to the difference between the outstanding balance of mortgage notes payable and the estimated fair value of such mortgage notes payable. The debt discounts are accreted as additional interest expense over the terms of the respective mortgage notes payable using the effective interest method. |
|
(2) |
Represents the Company’s share of the earnings (losses) before depreciation and amortization expense of unconsolidated affiliates where the Company is not recognizing equity in earnings (losses) because its investment in the unconsolidated affiliate is below zero. |
|
(3) |
Represents the fair value adjustment recorded on the senior secured notes as interest expense. |
|
(4) |
Represents a credit to litigation settlement expense in each respective period related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit. |
|
(5) |
The year ended December 31, 2023 includes default interest on loans past their maturity dates. The three months and year ended December 31, 2022 includes the reversal of default interest expense when waivers or forbearance agreements were obtained. |
|
(6) |
For the year ended December 31, 2023, the Company deconsolidated Alamance Crossing East and WestGate Mall due to a loss of control when the properties were placed into receivership in connection with the foreclosure process. For the year ended December 31, 2022, the Company deconsolidated Greenbrier Mall due to a loss of control when the property was placed into receivership in connection with the foreclosure process. |
|
(7) |
Represents costs incurred subsequent to the Company filing the chapter 11 cases associated with the Company's reorganization efforts, which consists of professional fees, legal fees and |
|
(8) |
The three months and year ended December 31, 2023 includes a gain on extinguishment of debt related to the loan secured by The Outlet Shoppes at |
|
Three Months Ended
|
|
Year Ended December 31, |
|||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Diluted EPS attributable to common shareholders |
|
$ |
0.37 |
|
|
$ |
0.03 |
|
|
$ |
0.17 |
|
|
$ |
(3.20 |
) |
Add amounts per share included in FFO: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Unvested restricted stock |
|
|
0.01 |
|
|
|
0.08 |
|
|
|
0.03 |
|
|
|
0.16 |
|
Eliminate amounts per share excluded from FFO: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization expense, including amounts from
|
|
|
1.42 |
|
|
|
1.88 |
|
|
|
6.39 |
|
|
|
8.83 |
|
Loss on impairment, net of taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Gain on depreciable property |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
FFO per diluted share |
|
$ |
1.80 |
|
|
$ |
1.99 |
|
|
$ |
6.59 |
|
|
$ |
5.78 |
|
|
|
Three Months Ended
|
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
SUPPLEMENTAL FFO INFORMATION: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Lease termination fees |
|
$ |
1,423 |
|
|
$ |
1,095 |
|
|
$ |
3,504 |
|
|
$ |
5,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Straight-line rental income adjustment |
|
$ |
1,432 |
|
|
$ |
3,140 |
|
|
$ |
6,840 |
|
|
$ |
12,540 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on outparcel sales, net of taxes and noncontrolling interests' share |
|
$ |
229 |
|
|
$ |
2,132 |
|
|
$ |
5,607 |
|
|
$ |
5,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net amortization of acquired above- and below-market leases |
|
$ |
(5,626 |
) |
|
$ |
(4,286 |
) |
|
$ |
(20,736 |
) |
|
$ |
(20,773 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax benefit (provision) |
|
$ |
487 |
|
|
$ |
(328 |
) |
|
$ |
(894 |
) |
|
$ |
(3,079 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Abandoned projects expense |
|
$ |
(22 |
) |
|
$ |
— |
|
|
$ |
(39 |
) |
|
$ |
(834 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest capitalized |
|
$ |
111 |
|
|
$ |
87 |
|
|
$ |
453 |
|
|
$ |
618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Estimate of uncollectable revenues |
|
$ |
1,081 |
|
|
$ |
866 |
|
|
$ |
(1,493 |
) |
|
$ |
4,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
As of December 31, |
||||||||
|
|
|
|
|
|
|
|
2023 |
|
2022 |
||||||
Straight-line rent receivable |
|
|
|
|
|
|
|
$ |
22,649 |
|
|
$ |
15,600 |
|
||
Same-center Net Operating Income |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net income (loss) |
|
$ |
12,478 |
|
|
$ |
4,925 |
|
|
$ |
3,204 |
|
|
$ |
(99,515 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
|
42,376 |
|
|
|
61,841 |
|
|
|
190,505 |
|
|
|
256,310 |
|
Depreciation and amortization from unconsolidated affiliates |
|
|
4,145 |
|
|
|
(191 |
) |
|
|
17,408 |
|
|
|
20,813 |
|
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries |
|
|
(507 |
) |
|
|
(832 |
) |
|
|
(2,442 |
) |
|
|
(3,498 |
) |
Interest expense |
|
|
42,317 |
|
|
|
33,914 |
|
|
|
172,905 |
|
|
|
217,342 |
|
Interest expense from unconsolidated affiliates |
|
|
17,753 |
|
|
|
22,877 |
|
|
|
71,867 |
|
|
|
88,331 |
|
Noncontrolling interests' share of interest expense in other consolidated subsidiaries |
|
|
(1,089 |
) |
|
|
(177 |
) |
|
|
(6,156 |
) |
|
|
(7,960 |
) |
Abandoned projects expense |
|
|
22 |
|
|
|
— |
|
|
|
39 |
|
|
|
834 |
|
Gain on sales of real estate assets, net of taxes and noncontrolling interests' share |
|
|
(229 |
) |
|
|
(1,798 |
) |
|
|
(4,839 |
) |
|
|
(5,345 |
) |
Gain on sales of real estate assets of unconsolidated affiliates |
|
|
— |
|
|
|
(374 |
) |
|
|
(768 |
) |
|
|
(1,036 |
) |
Adjustment for unconsolidated affiliates with negative investment |
|
|
(6,062 |
) |
|
|
(1,522 |
) |
|
|
(7,242 |
) |
|
|
(37,645 |
) |
Gain on extinguishment of debt |
|
|
(3,270 |
) |
|
|
(7,344 |
) |
|
|
(3,270 |
) |
|
|
(7,344 |
) |
Gain on deconsolidation |
|
|
— |
|
|
|
— |
|
|
|
(47,879 |
) |
|
|
(36,250 |
) |
Loss on available-for-sale securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
39 |
|
Loss on impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
252 |
|
Litigation settlement |
|
|
(132 |
) |
|
|
(122 |
) |
|
|
(2,310 |
) |
|
|
(304 |
) |
Reorganization items, net |
|
|
— |
|
|
|
(36 |
) |
|
|
— |
|
|
|
(298 |
) |
Income tax (benefit) provision |
|
|
(487 |
) |
|
|
328 |
|
|
|
894 |
|
|
|
3,079 |
|
Lease termination fees |
|
|
(1,423 |
) |
|
|
(1,095 |
) |
|
|
(3,504 |
) |
|
|
(5,115 |
) |
Straight-line rent and above- and below-market lease amortization |
|
|
4,194 |
|
|
|
1,146 |
|
|
|
13,896 |
|
|
|
8,233 |
|
Net (income) loss attributable to noncontrolling interests in other consolidated subsidiaries |
|
|
(657 |
) |
|
|
(2,003 |
) |
|
|
3,344 |
|
|
|
5,999 |
|
General and administrative expenses |
|
|
14,283 |
|
|
|
16,066 |
|
|
|
64,066 |
|
|
|
67,215 |
|
Management fees and non-property level revenues |
|
|
(4,360 |
) |
|
|
(2,635 |
) |
|
|
(19,087 |
) |
|
|
(4,433 |
) |
Operating Partnership's share of property NOI |
|
|
119,352 |
|
|
|
122,968 |
|
|
|
440,631 |
|
|
|
459,704 |
|
Non-comparable NOI |
|
|
114 |
|
|
|
(2,067 |
) |
|
|
(2,119 |
) |
|
|
(14,328 |
) |
Total same-center NOI (1) |
|
$ |
119,466 |
|
|
$ |
120,901 |
|
|
$ |
438,512 |
|
|
$ |
445,376 |
|
Total same-center NOI percentage change |
|
|
(1.2 |
)% |
|
|
|
|
(1.5 |
)% |
|
|
||||
(1) |
CBL defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of December 31, 2023, 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 December 31, 2023. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are properties which are under major redevelopment or being considered for repositioning, where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender. |
Same-center Net Operating Income |
||||||||||||||||
(Continued) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Malls |
|
$ |
84,789 |
|
|
$ |
86,129 |
|
|
$ |
303,365 |
|
|
$ |
313,384 |
|
Outlet centers |
|
|
5,505 |
|
|
|
5,360 |
|
|
|
21,043 |
|
|
|
19,845 |
|
Lifestyle centers |
|
|
9,079 |
|
|
|
9,938 |
|
|
|
35,662 |
|
|
|
35,646 |
|
Open-air centers |
|
|
13,946 |
|
|
|
13,346 |
|
|
|
55,276 |
|
|
|
52,847 |
|
Outparcels and other |
|
|
6,147 |
|
|
|
6,128 |
|
|
|
23,166 |
|
|
|
23,654 |
|
Total same-center NOI (1) |
|
$ |
119,466 |
|
|
$ |
120,901 |
|
|
$ |
438,512 |
|
|
$ |
445,376 |
|
Percentage Change: |
|
|
|
|
|
|
|
|
|
|
||||||
Malls |
|
|
(1.6 |
)% |
|
|
|
|
|
(3.2 |
)% |
|
|
|
||
Outlet centers |
|
|
2.7 |
% |
|
|
|
|
|
6.0 |
% |
|
|
|
||
Lifestyle centers |
|
|
(8.6 |
)% |
|
|
|
|
|
0.0 |
% |
|
|
|
||
Open-air centers |
|
|
4.5 |
% |
|
|
|
|
|
4.6 |
% |
|
|
|
||
Outparcels and other |
|
|
0.3 |
% |
|
|
|
|
|
(2.1 |
)% |
|
|
|
||
Total same-center NOI (1) |
|
|
(1.2 |
)% |
|
|
|
|
|
(1.5 |
)% |
|
|
|
||
(1) |
CBL defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of December 31, 2023, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ended December 31, 2023. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are properties which are under major redevelopment or being considered for repositioning, where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender. |
Company's Share of Consolidated and Unconsolidated Debt |
||||||||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||
|
|
As of December 31, 2023 |
||||||||||||||||||||||
|
|
Fixed
|
|
Variable
|
|
Total Debt |
|
Unamortized
|
|
Unamortized
|
|
Total, net |
||||||||||||
Consolidated debt |
|
$ |
915,753 |
|
|
$ |
1,028,213 |
|
|
$ |
1,943,966 |
|
|
$ |
(13,221 |
) |
|
$ |
(41,942 |
) |
|
$ |
1,888,803 |
|
Noncontrolling interests' share of consolidated debt |
|
|
(25,021 |
) |
|
|
(11,823 |
) |
|
|
(36,844 |
) |
|
|
249 |
|
|
|
3,706 |
|
|
|
(32,889 |
) |
Company's share of unconsolidated affiliates' debt |
|
|
622,169 |
|
|
|
57,274 |
|
|
|
679,443 |
|
|
|
(3,197 |
) |
|
|
— |
|
|
|
676,246 |
|
Other debt (2) |
|
|
69,783 |
|
|
|
— |
|
|
|
69,783 |
|
|
|
— |
|
|
|
— |
|
|
|
69,783 |
|
Company's share of consolidated, unconsolidated and other debt |
|
$ |
1,582,684 |
|
|
$ |
1,073,664 |
|
|
$ |
2,656,348 |
|
|
$ |
(16,169 |
) |
|
$ |
(38,236 |
) |
|
$ |
2,601,943 |
|
Weighted-average interest rate |
|
|
5.26 |
% |
|
|
8.42 |
% |
|
|
6.54 |
% |
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
As of December 31, 2022 |
||||||||||||||||||||||
|
|
Fixed
|
|
Variable
|
|
Total Debt |
|
Unamortized
|
|
Unamortized
|
|
Total, net |
||||||||||||
Consolidated debt |
|
$ |
1,023,634 |
|
|
$ |
1,065,942 |
|
|
$ |
2,089,576 |
|
|
$ |
(17,101 |
) |
|
$ |
(72,289 |
) |
|
$ |
2,000,186 |
|
Noncontrolling interests' share of consolidated debt |
|
|
(25,420 |
) |
|
|
(13,387 |
) |
|
|
(38,807 |
) |
|
|
317 |
|
|
|
7,448 |
|
|
|
(31,042 |
) |
Company's share of unconsolidated affiliates' debt |
|
|
621,642 |
|
|
|
71,584 |
|
|
|
693,226 |
|
|
|
(2,142 |
) |
|
|
— |
|
|
|
691,084 |
|
Company's share of consolidated, unconsolidated and other debt |
|
$ |
1,619,856 |
|
|
$ |
1,124,139 |
|
|
$ |
2,743,995 |
|
|
$ |
(18,926 |
) |
|
$ |
(64,841 |
) |
|
$ |
2,660,228 |
|
Weighted-average interest rate |
|
|
4.83 |
% |
|
|
7.10 |
% |
|
|
5.76 |
% |
|
|
|
|
|
|
||||||
(1) |
In conjunction with fresh start accounting, the Company estimated the fair value of its mortgage notes with the assistance of a third-party valuation advisor. This resulted in recognizing debt discounts upon emergence from bankruptcy. The debt discounts are accreted over the term of the respective debt using the effective interest method. |
|
(2) |
Represents the outstanding loan balance for properties that were deconsolidated due to a loss of control when the properties were placed into receivership in connection with the foreclosure process. |
Consolidated Balance Sheets |
||||||||
(Unaudited; in thousands, except share data) |
||||||||
|
|
December 31, |
||||||
|
|
2023 |
|
2022 |
||||
ASSETS |
|
|
|
|
||||
Real estate assets: |
|
|
|
|
||||
Land |
|
$ |
585,191 |
|
|
$ |
596,715 |
|
Buildings and improvements |
|
|
1,216,054 |
|
|
|
1,198,597 |
|
|
|
|
1,801,245 |
|
|
|
1,795,312 |
|
Accumulated depreciation |
|
|
(228,034 |
) |
|
|
(136,901 |
) |
|
|
|
1,573,211 |
|
|
|
1,658,411 |
|
Developments in progress |
|
|
8,900 |
|
|
|
5,576 |
|
Net investment in real estate assets |
|
|
1,582,111 |
|
|
|
1,663,987 |
|
Cash and cash equivalents |
|
|
34,188 |
|
|
|
44,718 |
|
Restricted cash |
|
|
88,888 |
|
|
|
97,231 |
|
Available-for-sale securities - at fair value (amortized cost of |
|
|
262,142 |
|
|
|
292,422 |
|
Receivables: |
|
|
|
|
||||
Tenant |
|
|
43,436 |
|
|
|
40,620 |
|
Other |
|
|
2,752 |
|
|
|
3,876 |
|
Investments in unconsolidated affiliates |
|
|
76,458 |
|
|
|
77,295 |
|
In-place leases, net |
|
|
157,639 |
|
|
|
247,497 |
|
Above market leases, net |
|
|
118,673 |
|
|
|
171,265 |
|
Intangible lease assets and other assets |
|
|
39,618 |
|
|
|
39,332 |
|
|
|
$ |
2,405,905 |
|
|
$ |
2,678,243 |
|
LIABILITIES AND EQUITY |
|
|
|
|
||||
Mortgage and other indebtedness, net |
|
$ |
1,888,803 |
|
|
$ |
2,000,186 |
|
Below market leases, net |
|
|
80,408 |
|
|
|
110,616 |
|
Accounts payable and accrued liabilities |
|
|
106,077 |
|
|
|
200,312 |
|
Total liabilities |
|
|
2,075,288 |
|
|
|
2,311,114 |
|
Shareholders' equity: |
|
|
|
|
||||
Common stock, |
|
|
32 |
|
|
|
32 |
|
Additional paid-in capital |
|
|
719,125 |
|
|
|
710,497 |
|
Accumulated other comprehensive income (loss) |
|
|
610 |
|
|
|
(1,054 |
) |
Accumulated deficit |
|
|
(380,446 |
) |
|
|
(338,934 |
) |
Total shareholders' equity |
|
|
339,321 |
|
|
|
370,541 |
|
Noncontrolling interests |
|
|
(8,704 |
) |
|
|
(3,412 |
) |
Total equity |
|
|
330,617 |
|
|
|
367,129 |
|
|
|
$ |
2,405,905 |
|
|
$ |
2,678,243 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240212237014/en/
Katie Reinsmidt, Executive Vice President - Chief Operating Officer, 423.490.8301, katie.reinsmidt@cblproperties.com
Source: CBL Properties
FAQ
What were CBL's FFO, as adjusted, per share for Q4 2023 and full-year 2023?
What was the same-center NOI change for the year ended December 31, 2023?
What was CBL's portfolio occupancy as of December 31, 2023?
What was the change in same-center tenant sales per square foot for the 12-month period ending December 31, 2023?
What was the percentage change in average gross rent per square foot for stabilized malls, lifestyle centers, and outlet centers for Q4 2023?
