CBL Properties Reports Strong Results for Second Quarter 2024

Rhea-AI Summary

CBL Properties reported strong results for Q2 2024, with same-center NOI increasing 1.5% over the prior-year period. Key highlights include:

- FFO, as adjusted, per share of $1.73, up from $1.56 in Q2 2023

- Over 1.0 million square feet of leases executed in Q2 2024

- Portfolio occupancy at 88.7% as of June 30, 2024

- $295.8 million in unrestricted cash and marketable securities

- Sale of Layton Hill Malls for $37.125 million

- $19.4 million in share repurchases completed

CBL reaffirmed its full-year 2024 FFO guidance, expecting same-center NOI in the range of (1.2)% to 1.4%. The company continues to focus on strengthening its balance sheet and improving leasing performance.

Positive

• Same-center NOI increased 1.5% over the prior-year period
• FFO, as adjusted, per share increased to $1.73 from $1.56 in Q2 2023
• Over 1.0 million square feet of leases executed in Q2 2024
• $295.8 million in unrestricted cash and marketable securities
• Sale of Layton Hill Malls for $37.125 million, reducing term loan balance
• $19.4 million in share repurchases completed
• 8.8% increase in average rents for comparable leases signed

Negative

• Portfolio occupancy declined to 88.7% from 89.8% in the prior year
• Same-center tenant sales per square foot declined 2.1% for the 12-months ended June 30, 2024
• Anticipated bankruptcy related store closures impacting nearly 300,000-square-feet
• Percentage rents declined $0.3 million due to lower tenant sales

Insights

Financial Analyst

CBL Properties' Q2 2024 results show positive momentum in key areas. The 1.5% increase in same-center NOI and 8.8% rise in average rents for new and renewal leases are encouraging signs. The company's FFO, as adjusted, per share improved to $1.73 from $1.56 year-over-year, indicating better operational efficiency.

However, there are some concerns. The 110 basis point decline in portfolio occupancy, largely due to bankruptcy-related store closures, could pressure future NOI growth. The 2.1% decline in same-center tenant sales per square foot over the trailing 12 months also warrants attention, as it may impact percentage rents and tenant health.

The sale of Layton Hills Mall for $37.125 million and the reduction of the term loan balance to $749.8 million demonstrate CBL's commitment to strengthening its balance sheet. The $0.40 quarterly dividend ($1.60 annualized) suggests confidence in sustained cash flow generation.

Real Estate Market Analyst

CBL's Q2 results reflect the resilience of the retail real estate sector. The 8.8% increase in average rents for comparable leases, including a 30.8% jump for new leases, indicates strong demand for quality retail spaces. This trend aligns with the broader market's post-pandemic recovery.

The execution of over 1 million square feet of leases in Q2, a 23% increase year-over-year, is particularly impressive. Notable leases with brands like lululemon and Tilt showcase CBL's ability to attract diverse, high-quality tenants. However, the decline in occupancy due to bankruptcies (e.g., Express and rue21) highlights the ongoing challenges in the retail landscape.

The sale of Layton Hills Mall at $37.125 million is a strategic move, aligning with the industry trend of portfolio optimization. CBL's focus on reducing debt and improving its balance sheet positions it well for future market opportunities and potential interest rate fluctuations.

Same-center NOI increased 1.5% over the prior-year period

CHATTANOOGA, Tenn.--(BUSINESS WIRE)-- CBL Properties (NYSE: CBL) announced results for the second quarter ended June 30, 2024. Results of operations as reported in the consolidated financial statements for these periods are prepared in accordance with GAAP. A description of each supplemental non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located at the end of this news release.

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net income (loss) attributable to common shareholders		$	0.14			$	(0.67	)		$	0.14			$	(0.61	)
Funds from Operations ("FFO")		$	1.51			$	1.01			$	2.72			$	2.87
FFO, as adjusted (1)		$	1.73			$	1.56			$	3.23			$	3.12

(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 reported an increase in same-center NOI of 1.5% for second quarter 2024 compared with the prior-year period, and FFO, as adjusted, per share of $1.73, compared with $1.56 for second quarter 2023. Same center NOI for the six months ended June 30, 2024 increased 2.6% compared with the prior-year period, and FFO, as adjusted, per share increased to $3.23, compared with $3.12 for prior-year period. Results were in-line with the previously issued guidance range for 2024 same-center NOI and FFO, as adjusted.
• Over 1.0 million square feet of leases were executed in second quarter 2024. Second quarter 2024 leasing results included comparable leases of approximately 694,000 square feet signed at an 8.8% increase in average rents versus the prior leases including a 6.2% increase in renewal leases signed for malls, lifestyle centers and outlet centers.
• Portfolio occupancy was 88.7% as of June 30, 2024, a 110 basis-point-decline compared with portfolio occupancy of 89.8% as of June 30, 2023. Same-center occupancy for malls, lifestyle centers and outlet centers was 86.8% as of June 30, 2024, a 180-basis-point decline from 88.6% as of June 30, 2023. Anticipated bankruptcy related store closures representing nearly 300,000-square-feet comprised 188 basis points of the decline in mall occupancy compared with the prior-year quarter including approximately 234,000 square feet in the second quarter 2024 related to rue21 and Express. CBL has executed agreements to reopen 14 stores representing approximately 94,400 square feet of rue21 stores under its new ownership by first quarter 2025, with the majority opening in 2024.
• Same-center tenant sales per square foot for the second quarter 2024 were essentially flat as compared with the prior-year period. Same-center tenant sales per square foot for the 12-months ended June 30, 2024, declined 2.1% to $417, compared with $426 for the prior period.
• As of June 30, 2024, the Company had $295.8 million of unrestricted cash and marketable securities.
• CBL closed on the sale of Layton Hill Malls in Layton, UT, for $37.125 million. The property served as collateral under CBL's non-recourse term loan. Net proceeds from the sale were used to reduce the term loan balance to $749.8 million.
• More than $19.4 million in share repurchases completed under the program, continuing CBL's commitment to return capital to shareholders.
• CBL's Board of Directors declared a cash dividend of $0.40 per common share for the quarter ending September 30, 2024. The dividend equates to an annual dividend payment of $1.60 per common share.

“CBL’s second quarter financial and operational results reflected the growing strength of the retail real estate sector," said CBL's chief executive officer, Stephen D. Lebovitz. "Same-center NOI grew 1.5% for the quarter, generated through contributions from new leasing, operating expense savings, and a positive variance from uncollectible revenues, partially offset by a decline in percentage rents and lost rent from recent tenant bankruptcy activity.

"Leasing volume was strong with healthy demand from tenants for space across our portfolio. We executed more than one million square feet of leases in the second quarter, a 23% increase from the prior-year period, including over 360,000 square feet of new leases. Notable leases signed in the quarter include three lululemon locations including two new stores, as well as the planned expansion of their high-performing store at our West County Center in St. Louis. We opened a Tilt family entertainment venue at Jefferson Mall in Louisville and inked a deal for Shoe Station to open this year in the former Bed, Bath, and Beyond location at our open-air center in Chattanooga. Despite high leasing volumes, occupancy levels declined in the quarter, primarily due to anticipated bankruptcy-related store closures including approximately 234,000-square-feet related to the bankruptcies of Express and rue21. However, we signed several leases with the new owners of rue21 and anticipate an initial 14 locations will reopen by first quarter 2025, with the potential for additional locations to be added in subsequent months.

“Positive spreads on both new and renewal leasing showcased our focus on replacing underperforming tenants and locking in better performing tenants at improving rents. With the exception of April, which was down due to the Easter holiday, sales were another bright spot in the quarter. May and June posted solid 2% sales increases. Back to school shopping is underway now with tax free weekend promotions driving traffic across the CBL portfolio.

"As we make progress strengthening our balance sheet, debt levels declined with the quarter end's balance representing a more than $126 million reduction in CBL's pro rata share from the prior-year period. We were pleased to recently close on the sale of Layton Hills Mall in Layton, UT, which served as collateral for our non-recourse term loan. Proceeds from this sale were used to reduce the principal balance and progressed our goal of meeting our term loan extension test in 2025 while minimizing use of our corporate cash reserves."

Same-center Net Operating Income (“NOI”) ⁽¹⁾:

		Three Months Ended June 30,
		2024				2023
Total Revenues		$	158,970			$	158,943
Total Expenses		$	(50,711	)		$	(52,332	)
Total portfolio same-center NOI		$	108,259			$	106,611
Total same-center NOI percentage change			1.5	%
Estimate for uncollectable revenues (recovery)		$	779			$	2,066

(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 second quarter 2024 increased $1.6 million. Second quarter 2024 results included a $1.6 million improvement in operating expense, primarily driven by lower third-party contract expense, net benefit of real estate and other tax expense savings. Expenses also benefited from lower third-party contract expense. Expense savings were partially offset by $0.6 million higher insurance expense in the quarter. The estimate for uncollectible revenues positively impacted the quarter by approximately $1.3 million. Percentage rents declined $0.3 million due to lower tenant sales.

		Six Months Ended June 30,
		2024				2023
Total Revenues		$	318,491			$	321,590
Total Expenses		$	(101,420	)		$	(109,969	)
Total portfolio same-center NOI		$	217,071			$	211,621
Total same-center NOI percentage change			2.6	%
Estimate for uncollectable revenues (recovery)		$	1,915			$	983

Same-center NOI for the six months ended June 30, 2024 increased $5.5 million. Results included a $3.9 million net real estate tax benefit received in the first quarter 2024, improved operating expenses from lower third-party contract expense and a franchise tax rebate received in the second quarter 2024. Percentage rents for the six months ended June 30, 2024, were $0.6 million lower. The estimate for uncollectible revenues negatively impacted the current six month period by $0.9 million.

PORTFOLIO OPERATIONAL RESULTS

Occupancy⁽¹⁾:

		As of June 30,
		2024		2023
Total portfolio		88.7%		89.8%
Malls, lifestyle centers and outlet centers:
Total malls		85.9%		88.2%
Total lifestyle centers		90.6%		92.4%
Total outlet centers		89.9%		88.4%
Total same-center malls, lifestyle centers and outlet centers		86.8%		88.6%
All Other Properties:
Total open-air centers		94.9%		94.7%
Total other		87.9%		74.2%

(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 June 30,		Six Months Ended June 30,
		2024		2024
All Property Types		8.8%		9.6%
Stabilized Malls, Lifestyle Centers and Outlet Centers		9.0%		9.4%
New leases		30.8%		65.3%
Renewal leases		6.2%		3.4%

Same-Center Sales Per Square Foot for In-line Tenants 10,000 Square Feet or Less:

		Sales Per Square Foot for the Trailing Twelve Months Ended June 30,
		2024				2023				% Change
Malls, lifestyle centers and outlet centers same-center sales per square foot		$	417			$	426			(2.1)%

DIVIDEND

On August 7, 2024, CBL’s Board of Directors declared the regular quarterly cash dividend for the three months ended September 30, 2024, of $0.40 per share. The dividend, which equates to an annual dividend payment of $1.60 per share, is payable on September 30, 2024, to shareholders of record as of September 13, 2024.

FINANCING ACTIVITY

In July 2024, CBL and its 50% joint venture partner closed on a new $14.5 million five-year loan secured by the Aloft Hotel at Hamilton Place in Chattanooga, TN. The loan bears a fixed interest rate of 7.2% and is non-recourse to CBL and replaced the existing $16.0 million loan that was set to mature in November 2024.

In February 2024, CBL retired the $15.3 million recourse loan secured by Brookfield Square Anchor Redevelopment in Brookfield, WI.

In May 2024, CBL transferred the title of Westgate Mall in Spartanburg, SC, to the mortgage holder in satisfaction of the $28.7 million non-recourse loan secured by the property.

CBL is cooperating with the foreclosure or conveyance of Alamance Crossing East in Burlington, NC, ($41.1 million).

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 $25.0 million of its common stock. Since commencement, CBL has repurchased 858,510 shares at an average price of $22.55 per share under the program. On August 7, 2024, CBL's Board of Directors approved an extension of the program through December 31, 2024.

DISPOSITIONS

On August 6, 2024, CBL closed on the sale of Layton Hills Mall in Layton, UT, for $37.125 million. The property served as collateral under CBL's non-recourse term loan. Net proceeds from the sale were used to reduce the term loan balance to $749.8 million.

CBL did not complete any dispositions during the second quarter. Year-to-date, in addition to the sale of Layton Hills Mall, CBL has completed the sale of two land parcels, generating more than $7.7 million in gross proceeds at CBL's share.

DEVELOPMENT AND REDEVELOPMENT ACTIVITY

Detailed project information is available in CBL’s Financial Supplement for Q2 2024, which can be found in the Invest – Financial Reports section of CBL’s website at cblproperties.com.

OUTLOOK AND GUIDANCE

Based on year-to-date results, Management's expectations and after incorporating the impact of the sale of Layton Hills Mall, CBL is reiterating its full-year 2024 FFO, as adjusted, guidance. Per share amounts have also been adjusted to reflect the impact of year-to-date share repurchase activity. Management anticipates same-center NOI for full-year 2024 in the range of (1.2)% to 1.4%. Guidance excludes the impact of any unannounced transactions.

		Low				High
2024 FFO, as adjusted (in millions)		$	196.0			$	210.0
2024 WA Share Count			31.2				31.2
2024 FFO, as adjusted, per share		$	6.28			$	6.72
2024 Same-Center NOI ("SC NOI") (in millions)		$	425.0			$	436.0
2024 change in same-center NOI			(1.2	)%			1.4	%

Reconciliation of GAAP Earnings Per Share to 2024 FFO, as Adjusted, Per Share:

		Low				High
Expected diluted earnings per common share		$	0.08			$	0.52
Depreciation and amortization			4.86				4.86
Dividends allocable to unvested restricted stock			0.03				0.03
Gain on depreciable property			(0.12	)			(0.12	)
Loss on impairment			0.02				0.02
Debt discount accretion, net of noncontrolling interests' share			1.44				1.44
Adjustment for unconsolidated affiliates with negative investment			(0.02	)			(0.02	)
Adjustment for litigation settlement			(0.01	)			(0.01	)
Expected FFO, as adjusted, per diluted, fully converted common share		$	6.28			$	6.72

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)			75.0				85.0
Total Estimate		$	125.0			$	155.0

ABOUT CBL PROPERTIES

Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of properties located in dynamic and growing communities. CBL’s owned and managed portfolio is comprised of 93 properties totaling more than 57.8 million square feet across 22 states, including 55 high-quality enclosed malls, outlet centers and lifestyle retail centers as well as more than 30 open-air centers and other assets. CBL seeks to continuously strengthen its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. For more information visit cblproperties.com.

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 June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
REVENUES:
Rental revenues		$	124,071			$	124,842			$	248,098			$	255,166
Management, development and leasing fees			1,817				1,822				3,722				4,256
Other			3,777				3,203				6,962				6,804
Total revenues			129,665				129,867				258,782				266,226
EXPENSES:
Property operating			(20,740	)			(21,507	)			(44,567	)			(46,121	)
Depreciation and amortization			(38,664	)			(49,742	)			(76,704	)			(103,011	)
Real estate taxes			(13,028	)			(14,481	)			(22,297	)			(29,269	)
Maintenance and repairs			(9,179	)			(9,991	)			(19,117	)			(21,515	)
General and administrative			(14,831	)			(16,156	)			(35,245	)			(35,385	)
Loss on impairment			—				—				(836	)			—
Litigation settlement			72				74				140				118
Other			(127	)			—				(127	)			(198	)
Total expenses			(96,497	)			(111,803	)			(198,753	)			(235,381	)
OTHER INCOME (EXPENSES):
Interest and other income			4,082				2,967				8,086				5,632
Interest expense			(39,407	)			(44,173	)			(79,219	)			(87,697	)
Gain on deconsolidation			—				—				—				28,151
(Loss) gain on sales of real estate assets			(50	)			(114	)			3,671				1,482
Income tax provision			(650	)			(219	)			(492	)			(118	)
Equity in earnings (losses) of unconsolidated affiliates			7,148				812				11,742				(444	)
Total other expenses			(28,877	)			(40,727	)			(56,212	)			(52,994	)
Net income (loss)			4,291				(22,663	)			3,817				(22,149	)
Net (income) loss attributable to noncontrolling interests in:
Operating Partnership			—				—				—				—
Other consolidated subsidiaries			453				1,875				977				3,620
Net income (loss) attributable to the Company			4,744				(20,788	)			4,794				(18,529	)
Earnings allocable to unvested restricted stock			(260	)			(281	)			(519	)			(561	)
Net income (loss) attributable to common shareholders		$	4,484			$	(21,069	)		$	4,275			$	(19,090	)
Basic and diluted per share data attributable to common shareholders:
Basic earnings per share		$	0.14			$	(0.67	)		$	0.14			$	(0.61	)
Diluted earnings per share			0.14				(0.67	)			0.14				(0.61	)
Weighted-average basic shares			31,150				31,313				31,348				31,309
Weighted-average diluted shares			31,156				31,313				31,351				31,309

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 June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net income (loss) attributable to common shareholders		$	4,484			$	(21,069	)		$	4,275			$	(19,090	)
Noncontrolling interest in income (loss) of Operating Partnership			—				—				—				—
Earnings allocable to unvested restricted stock			260				281				519				561
Depreciation and amortization expense of:
Consolidated properties			38,664				49,742				76,704				103,011
Unconsolidated affiliates			4,473				4,433				8,462				9,071
Non-real estate assets			(254	)			(304	)			(513	)			(452	)
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries			(472	)			(708	)			(1,032	)			(1,373	)
Loss on impairment, net of taxes			—				—				619				—
Gain on depreciable property			—				—				(3,721	)			—
FFO allocable to Operating Partnership common unitholders			47,155				32,375				85,313				91,728
Debt discount accretion, including our share of unconsolidated affiliates and net of noncontrolling interests' share (1)			11,722				16,574				23,517				33,190
Adjustment for unconsolidated affiliates with negative investment (2)			(4,801	)			888				(7,369	)			2,479
Litigation settlement (3)			(72	)			(74	)			(140	)			(118	)
Non-cash default interest expense (4)			—				287				—				781
Gain on deconsolidation (5)			—				—				—				(28,151	)
FFO allocable to Operating Partnership common unitholders, as adjusted		$	54,004			$	50,050			$	101,321			$	99,909
FFO per diluted share		$	1.51			$	1.01			$	2.72			$	2.87
FFO, as adjusted, per diluted share		$	1.73			$	1.56			$	3.23			$	3.12
Weighted-average common and potential dilutive common shares outstanding			31,156				32,071				31,351				32,000

(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 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.
(4)	The three and six months ended June 30, 2023 includes default interest on loans past their maturity dates.
(5)	For the six months ended June 30, 2023, the Company deconsolidated Alamance Crossing East due to a loss of control when the property was placed into receivership in connection with the foreclosure process.

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Diluted EPS attributable to common shareholders		$	0.14			$	(0.67	)		$	0.14			$	(0.61	)
Add amounts per share included in FFO:
Unvested restricted stock			0.01				0.02				0.01				0.03
Eliminate amounts per share excluded from FFO:
Depreciation and amortization expense, including amounts from consolidated properties, unconsolidated affiliates, non-real estate assets and excluding amounts allocated to noncontrolling interests			1.36				1.66				2.67				3.45
Loss on impairment, net of taxes			—				—				0.02				—
Gain on depreciable property			—				—				(0.12	)			—
FFO per diluted share		$	1.51			$	1.01			$	2.72			$	2.87

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees		$	706			$	793			$	1,689			$	1,954
Straight-line rental income adjustment		$	210			$	1,722			$	(305	)		$	3,355
Gain on outparcel sales, net of taxes		$	(50	)		$	725			$	(50	)		$	2,305
Net amortization of acquired above- and below-market leases		$	(2,684	)		$	(5,123	)		$	(6,176	)		$	(10,445	)
Income tax provision		$	(650	)		$	(219	)		$	(492	)		$	(118	)
Abandoned projects expense		$	(127	)		$	—			$	(127	)		$	(17	)
Interest capitalized		$	139			$	111			$	273			$	217
Estimate of uncollectable revenues		$	(1,962	)		$	(2,375	)		$	(7,792	)		$	(1,616	)
										As of June 30,
										2024				2023
Straight-line rent receivable										$	22,948			$	18,902

Same-center Net Operating Income (Dollars in thousands)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net income (loss)		$	4,291			$	(22,663	)		$	3,817			$	(22,149	)
Adjustments:
Depreciation and amortization			38,664				49,742				76,704				103,011
Depreciation and amortization from unconsolidated affiliates			4,473				4,433				8,462				9,071
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries			(472	)			(708	)			(1,032	)			(1,373	)
Interest expense			39,407				44,173				79,219				87,697
Interest expense from unconsolidated affiliates			17,074				18,531				34,355				36,056
Noncontrolling interests' share of interest expense in other consolidated subsidiaries			(1,061	)			(1,918	)			(2,126	)			(3,961	)
Abandoned projects expense			127				—				127				17
Loss (gain) on sales of real estate assets, net of taxes and noncontrolling interests' share			50				59				(3,671	)			(1,537	)
Gain on sales of real estate assets of unconsolidated affiliates			—				(784	)			—				(768	)
Adjustment for unconsolidated affiliates with negative investment			(4,801	)			888				(7,369	)			2,479
Gain on deconsolidation			—				—				—				(28,151	)
Loss on impairment			—				—				836				—
Litigation settlement			(72	)			(74	)			(140	)			(118	)
Income tax provision			650				219				492				118
Lease termination fees			(706	)			(793	)			(1,689	)			(1,954	)
Straight-line rent and above- and below-market lease amortization			2,474				3,401				6,481				7,090
Net loss attributable to noncontrolling interests in other consolidated subsidiaries			453				1,875				977				3,620
General and administrative expenses			14,831				16,156				35,245				35,385
Management fees and non-property level revenues			(6,543	)			(5,038	)			(12,990	)			(10,018	)
Operating Partnership's share of property NOI			108,839				107,499				217,698				214,515
Non-comparable NOI			(580	)			(888	)			(627	)			(2,894	)
Total same-center NOI (1)		$	108,259			$	106,611			$	217,071			$	211,621
Total same-center NOI percentage change			1.5	%							2.6	%

(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 June 30, 2024, 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, 2024. 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.

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Malls		$	72,808			$	73,446			$	146,899			$	145,271
Outlet centers			5,304				5,301				10,924				10,414
Lifestyle centers			9,047				8,742				18,286				17,758
Open-air centers			14,698				13,307				29,264				27,101
Outparcels and other			6,402				5,815				11,698				11,077
Total same-center NOI		$	108,259			$	106,611			$	217,071			$	211,621
Percentage Change:
Malls			(0.9	)%							1.1	%
Outlet centers			0.1	%							4.9	%
Lifestyle centers			3.5	%							3.0	%
Open-air centers			10.5	%							8.0	%
Outparcels and other			10.1	%							5.6	%
Total same-center NOI			1.5	%							2.6	%

Company's Share of Consolidated and Unconsolidated Debt (Dollars in thousands)
		As of June 30, 2024
		Fixed Rate				Variable Rate				Total Debt				Unamortized Deferred Financing Costs				Unamortized Debt Discounts (1)				Total, net
Consolidated debt		$	897,058			$	999,950			$	1,897,008			$	(10,952	)		$	(32,715	)		$	1,853,341
Noncontrolling interests' share of consolidated debt			(24,711	)			(11,613	)			(36,324	)			200				2,755				(33,369	)
Company's share of unconsolidated affiliates' debt			615,961				55,149				671,110				(2,573	)			—				668,537
Other debt (2)			41,122				—				41,122				—				—				41,122
Company's share of consolidated, unconsolidated and other debt		$	1,529,430			$	1,043,486			$	2,572,916			$	(13,325	)		$	(29,960	)		$	2,529,631
Weighted-average interest rate			5.27	%			8.42	%			6.55	%
		As of June 30, 2023
		Fixed Rate				Variable Rate				Total Debt				Unamortized Deferred Financing Costs				Unamortized Debt Discounts (1)				Total, net
Consolidated debt		$	963,501			$	1,048,478			$	2,011,979			$	(15,407	)		$	(54,523	)		$	1,942,049
Noncontrolling interests' share of consolidated debt			(25,222	)			(13,177	)			(38,399	)			298				4,680				(33,421	)
Company's share of unconsolidated affiliates' debt			622,022				62,919				684,941				(3,397	)			—				681,544
Other debt (2)			41,122				—				41,122				—				—				41,122
Company's share of consolidated, unconsolidated and other debt		$	1,601,423			$	1,098,220			$	2,699,643			$	(18,506	)		$	(49,843	)		$	2,631,294
Weighted-average interest rate			5.18	%			8.15	%			6.39	%

(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 outstanding loan balance for Alamance Crossing East, which was deconsolidated due to a loss of control when the property was placed into receivership in connection with the foreclosure process. Additionally, WestGate Mall was deconsolidated in September 2023 when the property was placed into receivership in connection with the foreclosure process, which was completed in May 2024.

Consolidated Balance Sheets

(Unaudited; in thousands, except share data)

		June 30,				December 31,
		2024				2023
ASSETS
Real estate assets:
Land		$	582,949			$	585,191
Buildings and improvements			1,219,644				1,216,054
			1,802,593				1,801,245
Accumulated depreciation			(263,950	)			(228,034	)
			1,538,643				1,573,211
Developments in progress			8,905				8,900
Net investment in real estate assets			1,547,548				1,582,111
Cash and cash equivalents			57,679				34,188
Restricted cash			83,559				88,888
Available-for-sale securities - at fair value (amortized cost of $238,300 and $261,869 as of June 30, 2024 and December 31, 2023, respectively)			238,108				262,142
Receivables:
Tenant			38,213				43,436
Other			2,795				2,752
Investments in unconsolidated affiliates			82,553				76,458
In-place leases, net			127,818				157,639
Intangible lease assets and other assets			143,428				158,291
		$	2,321,701			$	2,405,905
LIABILITIES AND EQUITY
Mortgage and other indebtedness, net		$	1,853,341			$	1,888,803
Accounts payable and accrued liabilities			169,374				186,485
Total liabilities			2,022,715				2,075,288
Shareholders' equity:
Common stock, $.001 par value, 200,000,000 shares authorized, 31,551,142 and 31,975,645 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively (excluding 12,534 treasury shares as of June 30, 2024 and excluding 34 treasury shares as of December 31, 2023)			32				32
Additional paid-in capital			709,307				719,125
Accumulated other comprehensive income			643				610
Accumulated deficit			(401,193	)			(380,446	)
Total shareholders' equity			308,789				339,321
Noncontrolling interests			(9,803	)			(8,704	)
Total equity			298,986				330,617
		$	2,321,701			$	2,405,905

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240809604736/en/

Katie Reinsmidt, Executive Vice President - Chief Operating Officer, 423.490.8301, katie.reinsmidt@cblproperties.com

Source: CBL Properties

FAQ

What was CBL Properties' same-center NOI growth in Q2 2024?

CBL Properties reported a 1.5% increase in same-center NOI for Q2 2024 compared to the prior-year period.

How much was CBL's FFO, as adjusted, per share for Q2 2024?

CBL's FFO, as adjusted, per share for Q2 2024 was $1.73, compared to $1.56 for Q2 2023.

What was CBL's portfolio occupancy as of June 30, 2024?

CBL's portfolio occupancy was 88.7% as of June 30, 2024, a 110 basis-point decline compared to 89.8% as of June 30, 2023.

How much cash and marketable securities did CBL have as of June 30, 2024?

As of June 30, 2024, CBL had $295.8 million of unrestricted cash and marketable securities.

What is CBL's guidance for same-center NOI growth in 2024?

CBL anticipates same-center NOI for full-year 2024 in the range of (1.2)% to 1.4%.