CBL & Associates Properties Reports Results for Fourth Quarter and Full Year 2013

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

  • 2013 FFO per diluted share, as adjusted, grew 2.3% to $2.22 compared with $2.17 for 2012.
  • Average gross rent per square foot for stabilized mall leases signed in 2013 increased 11.8% over the prior gross rent per square foot.
  • Same-center stabilized mall portfolio occupancy increased 10 basis points to 94.9% compared with 94.8% at the prior year-end.
  • Same-center NOI increased 0.9% for the year ended December 31, 2013 over the prior-year period.
  • In the fourth quarter 2013, CBL’s Board of Directors declared a 6.5% increase in the quarterly cash dividend for the Company’s Common Stock to $0.245 per share.
  • CBL completed disposition activity generating aggregate net proceeds of over $235.4 million.
  • CBL completed more than $1.3 billion of financing activity during the year including its debut $450 million offering of senior unsecured notes.

CBL & Associates Properties, Inc. (NYSE:CBL) announced results for the fourth quarter and year ended December 31, 2013. 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.

“Two of our major priorities for 2013 were improving the performance of our portfolio and strengthening our balance sheet,” said Stephen Lebovitz, president and CEO of CBL & Associates Properties, Inc. “In the fourth quarter, we saw progress in both of these areas with over 2.1 million square feet of leases signed - including double-digit new lease spreads and solid renewal increases, the opening of our lifestyle shops expansion at Cross Creek Mall (Fayetteville, NC), successful execution of our $450 million debut unsecured notes offering, and FFO growth in line with expectations. While remaining at historically high levels, occupancy did not increase incrementally as much as we had hoped and NOI growth was below what we had anticipated for the quarter. This near-term disappointment aside, the underlying strength of our portfolio and our demonstrated ability to source attractive growth opportunities provided the foundation for a 6.5% increase in our common dividend.

“The multi-year plan to transition CBL’s portfolio to a higher growth profile is our top priority in 2014. Redevelopments at our more productive assets and new outlet center developments will once again be a major focus for us after an active year in 2013. Our leasing efforts are concentrated on upgrading our tenant mix as we build on 650,000 square feet of big box and junior anchor space opened during the past year and the 450,000 square feet already executed for 2014. The pruning of our portfolio, which began in earnest last September with the sale of three malls and their associated centers, will continue this year, which will enable our higher performing malls to have a greater impact on overall results. Our investment grade balance sheet also gives us the flexibility to execute these strategies with significant availability on our unsecured lines of credit, a growing unencumbered asset pool and access to attractive sources of capital.”

  Three Months
Ended December 31,
  Year Ended
December 31,
2013   2012 2013   2012
Funds from Operations ("FFO") per diluted share $ 0.63   $ 0.86 $ 2.23   $ 2.41
Gain on investment (0.24 ) (0.01 ) (0.24 )
Litigation settlement (0.04 )
Loss on extinguishment of debt       0.04      
FFO, as adjusted, per diluted share (1) $ 0.63     $ 0.62   $ 2.22     $ 2.17  

(1) FFO, as adjusted, for the year ended December 31, 2013 excludes a partial litigation settlement of $8.2 million, loss on extinguishment of debt of $9.1 million and a $2.4 million gain on investment resulting from payment of a note receivable. FFO, as adjusted, for the three months and year ended December 31, 2012, excludes the $0.24 per share gain on investment related to the acquisition of the remaining 40% interest in Imperial Valley Mall and Imperial Valley Commons.

 

Net loss attributable to common shareholders for the fourth quarter of 2013 was $2.4 million, or a loss of $0.01 per diluted share, compared with net income of $52.4 million, or $0.33 per diluted share for the fourth quarter of 2012.

Net income attributable to common shareholders for 2013 was $40.3 million, or $0.24 per diluted share, compared with net income of $84.1 million, or $0.54 per diluted share for 2012. During the fourth quarter 2013, the Company recorded an impairment charge of $47.2 million related to Madison Square in Huntsville, AL, to write the depreciated book value of the asset down to current fair value. The impairment charge impacted net income in the fourth quarter and year ended December 31, 2013.

Percentage change in same-center Net Operating Income (“NOI”)(1):

  Three Months
Ended December 31,
  Year Ended
December 31,
2013   2013
Portfolio same-center NOI (0.1 )%   0.9 %
Mall same-center NOI (0.2 )% 0.5 %

(1) CBL has modified its definition of NOI to exclude the impact of lease termination fees and certain non-cash items of straight line rents and net amortization of acquired above and below market leases. NOI is for real estate properties and excludes income of the Company's subsidiary that provides maintenance, janitorial and security services.

 

MAJOR ITEMS IMPACTING SAME-CENTER NOI RESULTS FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2013

  • Percentage rents declined $1.1 million during the fourth quarter 2013 compared with the prior year period. Percentage rents declined $0.1 million in 2013.
  • Snow removal expenditures were $0.6 million higher in the fourth quarter 2013 compared with the prior-year period. Snow removal expense was $1.7 million higher in 2013.
  • Operating expenses including security and marketing were $0.8 million higher in the fourth quarter 2013 compared with the prior year period. Operating expenses including security and marketing were $3.6 million higher in 2013.

PORTFOLIO OPERATIONAL RESULTS

Occupancy:

  December 31,
2013   2012
Portfolio occupancy 94.7 % 94.7 %
Mall portfolio 94.8 % 94.7 %
Same-center stabilized malls 94.9 % 94.8 %
Stabilized malls 94.7 % 94.7 %
Non-stabilized malls (1) 98.0 % 100.0 %
Associated centers 94.5 % 94.8 %
Community centers 96.7 % 95.9 %

(1) Includes The Outlet Shoppes at Oklahoma City and The Outlet Shoppes at Atlanta as of December 31, 2013. Includes The Outlet Shoppes at Oklahoma City as of December 31, 2012.

 
 

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 December 31,
  Year Ended
December 31,
2013 2013
Stabilized Malls 11.8 % 11.8 %
New leases 40.2 % 31.6 %
Renewal leases 6.0 % 5.9 %
 

Same-Store Sales per Square Foot for Mall Tenants 10,000 Square Feet or Less:

  Year Ended December 31,  
2013   2012 % Change
Stabilized mall same-store sales per square foot $ 356 $ 360 (1.1 )%
 

DIVIDEND

In November 2013, CBL’s Board of Directors declared a 6.5% increase in the quarterly cash dividend for the Company’s Common Stock to $0.245 per share for the quarter ending December 31, 2013. The increased quarterly dividend represents an annualized dividend rate of $0.98 per share compared with the previous annualized dividend rate of $0.92 per share. The dividend was payable on January 15, 2014, to shareholders of record as of December 30, 2013.

DISPOSITION ACTIVITY

In 2013, CBL completed the sale of three mature enclosed regional malls and their related associated centers, five office buildings and land subject to a ground lease for aggregate net proceeds of over $235.4 million.

FINANCING ACTIVITY

Subsequent to the end of the quarter, CBL retired the $122 million loan secured by St. Clair Square in Fairview Heights, IL, adding the property to its pool of unencumbered assets. CBL will record a prepayment fee of $1.2 million in the first quarter 2014 related to the early payoff. The loan was scheduled to mature in December 2016.

During 2013, CBL completed more than $1.3 billion of financing activity including the following achievements:

  • Retired more than $282.8 million of consolidated property specific loans, adding more than $650 million of undepreciated book value to its unencumbered pool. Currently 30% of CBL’s consolidated NOI is generated by unencumbered assets.
  • Refinanced $113.4 million of maturing non-recourse mortgage loans secured by joint venture properties with $130.4 million of new loans, generating excess proceeds to CBL of $16.8 million. CBL also paid off an additional $24.5 million of maturing loans secured by joint venture properties.
  • Entered into a new $400 million, five-year unsecured term loan and a $50 million five-year unsecured term loan. Based on the Company’s current credit ratings, the $400 million term loan has a floating interest rate of 150 basis points over LIBOR and the $50 million term loan has a floating interest rate of 190 basis points over LIBOR.
  • In November 2013, CBL’s majority-owned operating partnership subsidiary, CBL & Associates Limited Partnership (the “Operating Partnership”), completed a $450 million offering of 5.250% Senior Notes Due 2023 under its existing shelf registration statement. The Operating Partnership used net proceeds from the offering of approximately $441.9 million, after deducting the underwriting discount and other offering expenses payable by the Operating Partnership, to reduce amounts outstanding under its unsecured revolving credit facilities and for general business purposes.
  • In September 2013, CBL redeemed all outstanding perpetual preferred joint venture units of its joint venture, CW Joint Venture, LLC, (“CWJV”) with Westfield America Limited Partnership (“Westfield”). The units were redeemed for approximately $408.6 million, plus $4.4 million of accrued and unpaid preferred return. The preferred units were originally issued in 2007 as part of the acquisition of four malls in St. Louis, MO, by CWJV.

In 2013, CBL sold 8.4 million shares through its At-The-Market (“ATM”) program generating net proceeds of $209.6 million at a weighted average price of $25.12 per share. CBL has approximately $88.5 million available for issuance under the ATM program. CBL did not complete any sales under its ATM equity offering program during the fourth quarter.

OUTLOOK AND GUIDANCE

The Company is providing 2014 FFO guidance in the range of $2.22 - $2.26 per share. CBL is assuming same-center NOI growth of 1.0-2.0% in 2014.

The guidance also assumes the following:

  • Flat interest expense;
  • $0.06 per share of dilution from asset sales completed in 2013;
  • $2.0 million to $4.0 million of outparcel sales;
  • 0-25 basis point increase in total portfolio occupancy as well as stabilized mall occupancy throughout 2014;
  • No unannounced acquisition or disposition activity;
  • No unannounced capital markets activity - equity or debt
  Low   High
Expected diluted earnings per common share $ 0.38 $ 0.42
Adjust to fully converted shares from common shares (0.06 ) (0.06 )
Expected earnings per diluted, fully converted common share 0.32 0.36
Add: depreciation and amortization 1.84 1.84
Add: noncontrolling interest in earnings of Operating Partnership 0.06   0.06  
Expected FFO per diluted, fully converted common share $ 2.22   $ 2.26  
 

INVESTOR CONFERENCE CALL AND WEBCAST

CBL & Associates Properties, Inc. will conduct a conference call at 11:00 a.m. ET on Wednesday, February 5, 2014, to discuss its fourth quarter and full year results. The number to call for this interactive teleconference is (800) 736-4594 or (212) 231-2901. A replay of the conference call will be available through February 12, 2014, by dialing (800) 633-8284 or (402) 977-9140 and entering the confirmation number 21646866. 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., fourth quarter and full year 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 webcast and rebroadcast of its 2013 fourth quarter and full year earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Wednesday, February 5, 2014 beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for one year.

ABOUT CBL & ASSOCIATES PROPERTIES, INC.

CBL is one of the largest and most active owners and developers of malls and shopping centers in the United States. CBL owns, holds interests in or manages 152 properties, including 91 regional malls/open-air centers. The properties are located in 29 states and total 86.1 million square feet including 5.6 million square feet of non-owned shopping centers managed for third parties. Headquartered in Chattanooga, TN, CBL has regional offices in Boston (Waltham), MA, Dallas (Irving), TX, and St. Louis, MO. Additional information can be found at cblproperties.com.

NON-GAAP FINANCIAL MEASURES

Funds From Operations

FFO is a widely used measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO allocable to common shareholders as defined above by NAREIT less dividends on preferred stock. The Company’s method of calculating FFO allocable to its common shareholders may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors’ understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company’s properties and interest rates, but also by its capital structure. The Company presents both FFO of its operating partnership and FFO allocable to its common shareholders, as it believes that both are useful performance measures. The Company believes FFO of its operating partnership is a useful performance measure since it conducts substantially all of its business through its operating partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the operating partnership. The Company believes FFO allocable to its common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income (loss) attributable to its common shareholders.

In the reconciliation of net income attributable to the Company’s common shareholders to FFO allocable to its common shareholders, located in this earnings release, the Company makes an adjustment to add back noncontrolling interest in income (loss) of its operating partnership in order to arrive at FFO of its operating partnership. The Company then applies a percentage to FFO of its operating partnership to arrive at FFO allocable to its common shareholders. The percentage is computed by taking the weighted average number of common shares outstanding for the period and dividing it by the sum of the weighted average number of common shares and the weighted average number of operating partnership units outstanding during the period.

FFO does not represent cash flows from operations as defined by accounting principles generally accepted in the United States, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company’s operating performance or to cash flow as a measure of liquidity.

As described above, during 2013, the Company received income of $8.2 million as a partial settlement of ongoing litigation. Additionally, during 2013, the Company recorded $2.4 million of gain on investment and $9.1 million of loss on extinguishment of debt. During the quarter and year ended December 31, 2012, the Company recorded a gain on investment related to the acquisition of the remaining 40% interest in Imperial Valley Mall. Considering the significance and nature of these items, the Company believes that it is important to identify their impact 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.

Same-Center Net Operating Income

NOI is a supplemental measure of the operating performance of the Company’s shopping centers and other properties. The Company defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs)

Similar to FFO, the Company computes NOI based on its pro rata share of both consolidated and unconsolidated properties. The Company’s definition of NOI may be different than that used by other companies and, accordingly, the Company’s NOI may not be comparable to that of other companies.

Since NOI includes only those revenues and expenses related to the operations of its shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates and operating costs and the impact of those trends on the Company’s results of operations. The Company’s calculation of same-center NOI also excludes lease termination income, straight-line rent adjustments, and amortization of above and below market lease intangibles in order to enhance the comparability of results from one period to another, as these items can be impacted by one-time events that may distort same-center NOI trends and may result in same-center NOI that is not indicative of the ongoing operations of the Company’s shopping center and other properties. A reconciliation of same-center NOI to net income is located at the end of this earnings release.

Pro Rata Share of Debt

The Company presents debt based on its pro rata ownership share (including the Company’s pro rata share of unconsolidated affiliates and excluding noncontrolling interests’ share of consolidated properties) because it believes this provides investors a clearer understanding of the Company’s total debt obligations which affect the Company’s liquidity. A reconciliation of the Company’s pro rata share of debt to the amount of debt on the Company’s consolidated balance sheet is located at the end of this earnings release.

Information included herein contains “forward-looking statements” within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. The reader is directed to the Company’s various filings with the Securities and Exchange Commission, including without limitation the Company’s Annual Report on Form 10-K, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included therein, for a discussion of such risks and uncertainties.

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

December 31,

Year Ended

December 31,

2013 2012 2013 2012
REVENUES:
Minimum rents $ 177,237 $ 168,811 $ 675,870 $ 641,821
Percentage rents 8,724 9,545 18,572 17,728
Other rents 8,472 8,673 21,974 21,914
Tenant reimbursements 76,573 72,466 290,097 279,280
Management, development and leasing fees 3,396 3,197 12,439 10,772
Other   7,607     7,556     34,673     31,328  
Total revenues   282,009     270,248     1,053,625     1,002,843  
 
OPERATING EXPENSES:
Property operating 39,956 34,203 151,127 138,533
Depreciation and amortization 72,797 66,854 278,911 255,460
Real estate taxes 22,289 21,245 88,701 87,871
Maintenance and repairs 15,573 12,293 56,379 50,350
General and administrative 12,407 15,287 48,867 51,251
Loss on impairment 49,011 20,467 70,049 24,379
Other   7,608     5,890     28,826     25,078  
Total operating expenses   219,641     176,239     722,860     632,922  
Income from operations 62,368 94,009 330,765 369,921
Interest and other income 628 763 10,825 3,953
Interest expense (58,482 ) (60,765 ) (231,856 ) (242,357 )
Gain (loss) on extinguishment of debt - 87 (9,108 ) 265
Gain on sales of real estate assets 922 533 1,980 2,286
Gain on investments - 45,072 2,400 45,072
Equity in earnings of unconsolidated affiliates 3,998 2,912 11,616 8,313
Income tax provision   (451 )   (170 )   (1,305 )   (1,404 )
Income from continuing operations 8,983 82,441 115,317 186,049
Operating income (loss) of discontinued operations (896 ) 3,687 (6,091 ) (12,468 )
Gain (loss) on discontinued operations   (18 )   (45 )   1,144     938  
Net income 8,069 86,083 110,370 174,519
Net (income) loss attributable to noncontrolling interests in:
Operating partnership 477 (11,484 ) (7,125 ) (19,267 )
Other consolidated subsidiaries   297     (6,513 )   (18,041 )   (23,652 )
Net income attributable to the Company 8,843 68,086 85,204 131,600
Preferred dividends   (11,223 )   (15,729 )   (44,892 )   (47,511 )
Net income (loss) attributable to common shareholders $ (2,380 ) $ 52,357   $ 40,312   $ 84,089  
 
 
Basic per share data attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends $ (0.01 ) $ 0.31 $ 0.27 $ 0.60
Discontinued operations   -     0.02     (0.03 )   (0.06 )
Net income (loss) attributable to common shareholders $ (0.01 ) $ 0.33   $ 0.24   $ 0.54  
Weighted average common shares outstanding 169,930 160,841 167,027 154,762
 
Diluted earnings per share data attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends $ (0.01 ) $ 0.31 $ 0.27 $ 0.60
Discontinued operations   -     0.02     (0.03 )   (0.06 )
Net income (loss) attributable to common shareholders $ (0.01 ) $ 0.33   $ 0.24   $ 0.54  

Weighted average common and potential dilutive common shares outstanding

169,930 160,881 167,027 154,807
 
Amounts attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends $ (1,602 ) $ 49,279 $ 44,515 $ 93,469
Discontinued operations   (778 )   3,078     (4,203 )   (9,380 )
Net income (loss) attributable to common shareholders $ (2,380 ) $ 52,357   $ 40,312   $ 84,089  
 
 
 
 
 
 
The Company's calculation of FFO allocable to its shareholders is as follows:
(in thousands, except per share data)
  Three Months Ended

December 31,

  Year Ended

December 31,

2013   2012   2013   2012
 
Net income (loss) attributable to common shareholders $ (2,380 ) $ 52,357 $ 40,312 $ 84,089
Noncontrolling interest in income (loss) of operating partnership (477 ) 11,484 7,125 19,267
Depreciation and amortization expense of:
Consolidated properties 72,797 66,854 278,911 255,460
Unconsolidated affiliates 9,844 11,079 39,592 43,956
Discontinued operations - 3,081 6,638 13,174
Non-real estate assets (547 ) (475 ) (2,077 ) (1,841 )
Noncontrolling interests' share of depreciation and amortization (1,589 ) (1,534 ) (5,881 ) (5,071 )
Loss on impairment, net of tax benefit 47,213 20,409 73,485 50,343
(Gain) loss on depreciable property 3 (159 ) (7 ) (652 )
(Gain) loss on discontinued operations, net of taxes   67     32     (647 )   (566 )
Funds from operations of the operating partnership 124,931 163,128 437,451 458,159
Litigation settlement - - (8,240 ) -
Gain on investments - (45,072 ) (2,400 ) (45,072 )
(Gain) loss on extinguishment of debt   -     (87 )   9,108     (265 )
Funds from operations of the operating partnership, as adjusted $ 124,931   $ 117,969   $ 435,919   $ 412,822  
 
Funds from operations per diluted share $ 0.63 $ 0.86 $ 2.23 $ 2.41
Litigation settlement - - (0.04 ) -
Gain on investments - (0.24 ) (0.01 ) (0.24 )
Loss on extinguishment of debt   -     -     0.04     -  
Funds from operations, as adjusted, per diluted share $ 0.63   $ 0.62   $ 2.22   $ 2.17  

Weighted average common and potential dilutive common shares outstanding with operating partnership units fully converted

199,476 190,383 196,572 190,268
 
 

Reconciliation of FFO of the operating partnership to FFO allocable to common shareholders:

Funds from operations of the operating partnership $ 124,931 $ 163,128 $ 437,451 $ 458,159
Percentage allocable to common shareholders (1)   85.19 %   84.50 %   84.97 %   81.36 %
Funds from operations allocable to common shareholders $ 106,429   $ 137,843   $ 371,702   $ 372,758  
 
Funds from operations of the operating partnership, as adjusted $ 124,931 $ 117,969 $ 435,919 $ 412,822
Percentage allocable to common shareholders (1)   85.19 %   84.50 %   84.97 %   81.36 %
Funds from operations allocable to common shareholders, as adjusted $ 106,429   $ 99,684   $ 370,400   $ 335,872  

 

(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 12.

 
 
 
 
 
 
  Three Months Ended

December 31,

Year Ended

December 31,

2013   2012 2013   2012
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees $ 792 $ 846 $ 4,217 $ 3,819
Lease termination fees per share $ - $ - $ 0.02 $ 0.02
 
Straight-line rental income $ 1,110 $ 174 $ 1,191 $ 4,577
Straight-line rental income per share $ 0.01 $ - $ 0.01 $ 0.02
 
Gains (losses) on outparcel sales $ 923 $ (279 ) $ 1,958 $ 4,849
Gains on outparcel sales per share $ - $ - $ 0.01 $ 0.03
 
Net amortization of acquired above- and below-market leases $ 295 $ 984 $ 1,566 $ 2,559
Net amortization of acquired above- and below-market leases per share $ - $ 0.01 $ 0.01 $ 0.01
 
Net amortization of debt premiums (discounts) $ (1,162 ) $ 142 $ 553 $ 1,849
Net amortization of debt premiums (discounts) per share $ (0.01 ) $ - $ - $ 0.01
 
Income tax provision $ (451 ) $ (170 ) $ (1,305 ) $ (1,404 )
Income tax provision per share $ - $ - $ (0.01 ) $ (0.01 )
 
Abandoned projects expense $ 193 $ 76 $ 334 $ (39 )
Abandoned project expense per share $ - $ - $ - $ -
 
Loss on impairment from continuing operations $ (47,213 ) $ (20,467 ) $ (68,251 ) $ (24,379 )
Loss on impairment from continuing operations per share $ (0.24 ) $ (0.11 ) $ (0.35 ) $ (0.13 )
 
Loss on impairment from discontinued operations $ - $ 40 $ (5,234 ) $ (26,461 )
Loss on impairment from discontinued operations per share $ - $ - $ (0.03 ) $ (0.14 )
 
Gain (loss) on extinguishment of debt from continuing operations $ - $ 87 $ (9,108 ) $ 265
Gain (loss) on extinguishment of debt from continuing operations per share $ - $ - $ (0.05 ) $ -
 
 
Gain on investments $ - $ 45,072 $ 2,400 $ 45,072
Gain on investments per share $ - $ 0.24 $ 0.01 $ 0.24
 
Litigation settlement $ - $ - $ 8,240 $ -
Litigation settlement per share $ - $ - $ 0.04 $ -
 
Interest capitalized $ 1,205 $ 742 $ 4,411 $ 2,671
Interest capitalized per share $ 0.01 $ - $ 0.02 $ 0.01
 
Origination cost of series C preferred stock $ - $ (3,778 ) $ - $ (3,778 )
Origination cost of series C preferred stock per share $ - $ (0.02 ) $ - $ (0.02 )
 
 
 
As of December 31,
2013 2012
Straight-line rent receivable $ 62,611 $ 61,727
 
 
 
 
 
 
Same-Center Net Operating Income
(Dollars in thousands)
       
Three Months Ended

December 31,

Year Ended

December 31,

2013 2012 2013 2012
 
Net income attributable to the Company $ 8,843 $ 68,086 $ 85,204 $ 131,600
 
Adjustments:
Depreciation and amortization 72,797 66,854 278,911 255,460
Depreciation and amortization from unconsolidated affiliates 9,844 11,079 39,592 43,956
Depreciation and amortization from discontinued operations - 3,081 6,638 13,174

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries

(1,589 ) (1,534 ) (5,881 ) (5,071 )
Interest expense 58,482 60,765 231,856 242,357
Interest expense from unconsolidated affiliates 9,723 11,254 39,399 44,543
Interest expense from discontinued operations - - 1 2,304

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

(1,384 ) (959 ) (4,413 ) (3,435 )
Abandoned projects expense 193 76 334 (39 )
Gain on sales of real estate assets (922 ) (533 ) (1,980 ) (5,282 )
Gain on sales of real estate assets of unconsolidated affiliates (11 ) (363 ) (22 ) (1,214 )
Gain on investments - (45,072 ) (2,400 ) (45,072 )
(Gain) loss on extinguishment of debt - (87 ) 9,108 (265 )
Loss on impairment 49,011 20,467 70,049 24,379
Loss on impairment from discontinued operations - (40 ) 5,234 26,461
Income tax provision 451 170 1,305 1,404
Lease termination fees (792 ) (846 ) (4,217 ) (3,819 )
Straight line rent and above and below market rent (83 ) (739 ) (1,502 ) (3,375 )

Net income (loss) attributable to noncontrolling interest in earnings of operating partnership

(477 ) 11,484 7,125 19,267
(Gain) loss on discontinued operations 18 45 (1,144 ) (938 )
General and administrative expenses 12,407 15,287 48,867 51,251
Management fees and non-property level revenues   (9,852 )   (12,691 )   (45,988 )   (38,948 )
Company's share of property NOI 206,659 205,784 756,076 748,698
Non-comparable NOI   (18,264 )   (17,138 )   (58,186 )   (56,741 )
Total same-center NOI(1) $ 188,395   $ 188,646   $ 697,890   $ 691,957  
Total same-center NOI percentage change   -0.1 %   0.9 %
 
 
Malls $ 173,838 $ 174,142 $ 639,825 $ 636,642
Associated centers 8,434 8,410 33,172 33,188
Community centers 4,349 4,250 17,688 15,650
Offices and other   1,774     1,844     7,205     6,477  
Total same-center NOI(1) $ 188,395   $ 188,646   $ 697,890   $ 691,957  
 
Percentage Change:
Malls -0.2 % 0.5 %
Associated centers 0.3 % 0.0 %
Community centers 2.3 % 13.0 %
Offices and other   -3.8 %   11.2 %
Total same-center NOI(1)   -0.1 %   0.9 %
 
(1) CBL defines same-center NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). Same-center NOI excludes lease termination income, straight-line rent adjustments, and amortization of above and below market lease intangibles. Same-center NOI is for real estate properties and does not include the results of operations of the Company's subsidiary that provides janitorial, security and maintenance services.
 
 
 
 
 
 
Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
 
    As of December 31, 2013
Fixed Rate   Variable Rate   Total
Consolidated debt $ 3,990,774 $ 866,749 $ 4,857,523
Noncontrolling interests' share of consolidated debt (87,406 ) (5,669 ) (93,075 )
Company's share of unconsolidated affiliates' debt   653,429     89,111     742,540  
Company's share of consolidated and unconsolidated debt $ 4,556,797   $ 950,191   $ 5,506,988  
Weighted average interest rate   5.48 %   1.94 %   4.87 %
 
As of December 31, 2012
Fixed Rate Variable Rate Total
Consolidated debt $ 3,794,509 $ 951,174 $ 4,745,683
Noncontrolling interests' share of consolidated debt (89,530 ) - (89,530 )
Company's share of unconsolidated affiliates' debt   660,563     128,491     789,054  
Company's share of consolidated and unconsolidated debt $ 4,365,542   $ 1,079,665   $ 5,445,207  
Weighted average interest rate   5.48 %   2.39 %   4.86 %
 
 
Debt-To-Total-Market Capitalization Ratio as of December 31, 2013
(In thousands, except stock price) Shares
Outstanding Stock Price (1) Value
Common stock and operating partnership units 199,594 $ 17.96 $ 3,584,708
7.375% Series D Cumulative Redeemable Preferred Stock 1,815 250.00 453,750
6.625% Series E Cumulative Redeemable Preferred Stock 690 250.00   172,500  
Total market equity 4,210,958
Company's share of total debt   5,506,988  
Total market capitalization $ 9,717,946  
Debt-to-total-market capitalization ratio   56.7 %
 

(1) Stock price for common stock and operating partnership units equals the closing price of the common stock on December 31, 2013. The stock prices for the preferred stocks represent the liquidation preference of each respective series.

 
Reconciliation of Shares and Operating Partnership Units Outstanding
(In thousands)
Three Months Ended Year Ended
December 31, December 31,
2013: Basic Diluted Basic Diluted
Weighted average shares - EPS 169,930 169,930 167,027 167,027
Weighted average operating partnership units   29,546     29,546     29,545     29,545  
Weighted average shares- FFO   199,476     199,476     196,572     196,572  
 
2012:
Weighted average shares - EPS 160,841 160,881 154,762 154,807
Weighted average operating partnership units   29,502     29,502     35,461     35,461  
Weighted average shares- FFO   190,343     190,383     190,223     190,268  
 
 
Dividend Payout Ratio Three Months Ended Year Ended
December 31, December 31,
2013 2012 2013 2012
Weighted average cash dividend per share $ 0.25313 $ 0.22838 $ 0.96853 $ 0.91526
FFO as adjusted, per diluted fully converted share $ 0.63   $ 0.62   $ 2.22   $ 2.17  
Dividend payout ratio   40.2 %   36.8 %   43.6 %   42.2 %
 
 
 
 
 
 
Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
   
 
As of December 31,
2013 2012
ASSETS
Real estate assets:
Land $ 858,619 $ 905,339
Buildings and improvements   7,125,512     7,228,293  
7,984,131 8,133,632
Accumulated depreciation   (2,056,357 )   (1,972,031 )
5,927,774 6,161,601
Held for sale - 29,425
Developments in progress   139,383     137,956  
Net investment in real estate assets 6,067,157 6,328,982
Cash and cash equivalents 65,450 78,248
Receivables:

Tenant, net of allowance for doubtful accounts of $2,379 and $1,977 in 2013 and 2012, respectively

79,899 78,963

Other, net of allowance for doubtful accounts of $1,241 and $1,270 in 2013 and 2012, respectively

23,343 8,467
Mortgage and other notes receivable 30,424 25,967
Investments in unconsolidated affiliates 277,146 259,810
Intangible lease assets and other assets   242,502     309,299  
$ 6,785,921   $ 7,089,736  
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness $ 4,857,523 $ 4,745,683
Accounts payable and accrued liabilities   333,882     358,874  
Total liabilities   5,191,405     5,104,557  
Commitments and contingencies
Redeemable noncontrolling interests:
Redeemable noncontrolling partnership interests 34,639 40,248
Redeemable noncontrolling preferred joint venture interest   -     423,834  
Total redeemable noncontrolling interests   34,639     464,082  
Shareholders' equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized:

7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000 shares outstanding

18 18

6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding

7 7

Common stock, $.01 par value, 350,000,000 shares authorized, 170,048,144 and 161,309,652 issued and outstanding in 2013 and 2012, respectively

1,700 1,613
Additional paid-in capital 1,967,644 1,773,630
Accumulated other comprehensive income 6,325 6,986
Dividends in excess of cumulative earnings   (570,838 )   (453,561 )
Total shareholders' equity 1,404,856 1,328,693
Noncontrolling interests   155,021     192,404  
Total equity   1,559,877     1,521,097  
$ 6,785,921   $ 7,089,736  
 
 
 

Contacts

CBL & Associates Properties, Inc.
Katie Reinsmidt, 423-490-8301
Senior Vice President - Investor Relations/Corporate Investments katie_reinsmidt@cblproperties.com

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Contacts

CBL & Associates Properties, Inc.
Katie Reinsmidt, 423-490-8301
Senior Vice President - Investor Relations/Corporate Investments katie_reinsmidt@cblproperties.com