Company Announcements

CBL Properties Reports Strong Results for Second Quarter 2022

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Aug. 15, 2022-- CBL Properties (NYSE: CBL) announced results for the second quarter ended June 30, 2022. Financial results for the periods from January 1, 2021, through June 30, 2021, are referred to as those of the “Predecessor” period. Financial results for the period from January 1, 2022, through June 30, 2022, are referred to as those of the “Successor” period. 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.

 

 

Successor

 

 

 

Predecessor

 

 

 

 

 

 

 

Three Months
Ended June 30,

 

 

 

Three Months
Ended June 30,

 

 

 

 

 

 

 

2022

 

 

 

2021

 

 

%

 

Net loss attributable to common shareholders

 

$

(41,598

)

 

 

$

(8,882

)

 

 

(368.3

)%

Funds from Operations ("FFO")

 

$

30,908

 

 

 

$

50,793

 

 

 

(39.1

)%

FFO, as adjusted (1)

 

$

59,869

 

 

 

$

79,499

 

 

 

(24.7

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

 

Predecessor

 

 

 

 

 

 

 

Six Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

 

 

 

 

2022

 

 

 

2021

 

 

%

 

Net loss attributable to common shareholders

 

$

(82,320

)

 

 

$

(35,645

)

 

 

(130.9

)%

Funds from Operations ("FFO")

 

$

65,908

 

 

 

$

141,035

 

 

 

(53.3

)%

FFO, as adjusted (1)

 

$

117,347

 

 

 

$

148,155

 

 

 

(20.8

)%

(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 loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 10 of this news release.

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

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2022

 

Portfolio same-center NOI

 

1.6%

 

 

6.7%

 

Mall, Lifestyle Center and Outlet Center same-center NOI

 

1.6%

 

 

6.8%

 

(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 acquired above and below market leases.

KEY TAKEAWAYS:

  • Increases in occupancy across the portfolio contributed to an increase in total portfolio same-center NOI of 1.6% and 6.7% for the three and six months ended June 30, 2022, respectively, compared with the prior-year periods.
  • In-line year-to-date same-center NOI of $217.4 million and FFO, as adjusted, of $3.92 per share, contributes to maintained full-year 2022 same-center NOI guidance in the range of $416.0 - $430.0 million, and FFO, as adjusted, per share guidance in the range of $7.18 - $7.67 per diluted share.
  • Portfolio occupancy as of June 30, 2022, was 89.5%, representing 120-basis point sequential improvement from March 31, 2022, and a 250-basis point improvement compared with 87.0% as of June 30, 2021. Same-center occupancy for malls, lifestyle centers and outlet centers was 88.0% as of June 30, 2022, representing a 250-basis point improvement compared with 85.5% as of June 30, 2021.
  • Same-center sales per square foot for the trailing 12-months ended June 30, 2022, increased 6.2% to $443 as compared with $417 for the trailing 12-months (excluding 2020) ended June 30, 2021. Same-center sales per square foot for the second quarter 2022 declined 3.9% as compared with the second quarter 2021.
  • FFO, as adjusted, allocable to Operating Partnership common unitholders, for the three months ended June 30, 2022, was $59.9 million, compared with $79.5 million in the prior year period. The variance in FFO, as adjusted, as compared with the prior year period reflects an increase in NOI driven by occupancy improvements and a positive variance in uncollectible revenues, offset by an increase in interest expense attributable to the senior unsecured notes and secured credit facility. Interest payments on the notes and credit facility were not required to be made during the second quarter 2021 as a result of the Company’s bankruptcy filing on November 1, 2020.
  • As of June 30, 2022, the Company had $327.1 million of unrestricted cash and marketable securities.
  • CBL’s Board of Directors declared a $0.25 per share cash dividend for the second and third quarters of 2022, providing cash returns to shareholders.

“CBL delivered another set of impressive operating results in the second quarter,” said Stephen D. Lebovitz, CBL's chief executive officer. “Our resilient portfolio generated improved lease spreads and significant sequential and year-over-year occupancy growth, contributing to the stability of our NOI. We are enhancing our strong free cash flow through the recent completion of redevelopment projects at Kirkwood Mall in Bismarck, North Dakota, Sunrise Mall in Brownsville, Texas, and Cross Creek Mall in Fayetteville, North Carolina, with more planned completions and new project starts anticipated in the coming months. We are seeing ongoing interest across our portfolio from hotels, multi-family, medical, entertainment, restaurants, and other new uses, which will further enhance our properties and diversify our revenue stream.

“A major highlight of the quarter was our financing accomplishments. Despite increased volatility in interest rates and other macroeconomic factors, we successfully closed more than $663.0 million in financings during the quarter, including two new multi-property loans that funded the full redemption of all $395.0 million outstanding 10% Senior Secured Notes. The two new non-recourse financings provided third-party validation of the tremendous value in CBL’s open-air and outparcel portfolios. These financings also resulted in improved cash flow through lower interest expense and enhanced our future financial flexibility by creating an unencumbered NOI pool of approximately $75.0 million.

“We were thrilled to share these financial and operational successes with shareholders through the re-start of our regular quarterly cash dividend program. We are focused on executing at a high level to further financial and operational improvements, create value across our portfolio and generate ongoing returns for our shareholders.”

NON-GAAP FINANCIAL RESULTS

Net loss attributable to common shareholders for the three months ended June 30, 2022, was $41.6 million, compared with a net loss of $8.9 million, for the three months ended June 30, 2021.

FFO, as adjusted, allocable to Operating Partnership common unitholders, for the three months ended June 30, 2022, was $59.9 million, compared with $79.5 million, for the three months ended June 30, 2021.

Same-center NOI for the three months ended June 30, 2022, increased 1.6%, or $1.7 million, to $107.4 million as compared with $105.7 million in the prior-year period. The variance was due to a $5.2 million increase in total revenues partially offset by a $3.5 million increase in operating expenses.

Other major variances in same-center NOI for the quarter ended June 30, 2022, include:

  • Minimum rents and other rents increased $6.6 million. Percentage rents increased $0.7 million and tenant reimbursements and other revenues declined $2.0 million. The total estimate for uncollectible revenues and abatements for the second quarter 2022 was $0.4 million, due to collections of amounts that were previously reserved compared with an estimate for uncollectible revenues and abatement of $2.5 million for the prior year period.
  • Property operating expenses increased $1.8 million compared with the prior year. Maintenance and repair and other expenses increased $2.1 million. Real estate tax expenses declined by $0.4 million, partially offsetting the above increases.

PORTFOLIO OPERATIONAL RESULTS
Occupancy(1):

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months Ended
June 30,

 

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

 

2021

 

Total portfolio

 

89.5%

 

 

 

87.0%

 

Malls, Lifestyle Centers and Outlet Centers:

 

 

 

 

 

 

 

Total malls

 

87.9%

 

 

 

85.2%

 

Total lifestyle centers

 

89.4%

 

 

 

83.9%

 

Total outlet centers

 

87.5%

 

 

 

86.2%

 

Total same-center malls, lifestyle centers and outlet centers

 

88.0%

 

 

 

85.5%

 

All Other:

 

 

 

 

 

 

 

Total open-air centers

 

94.4%

 

 

 

92.2%

 

Total other

 

91.7%

 

 

 

98.7%

 

(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,

 

 

 

2022

 

 

2022

 

Stabilized Malls, Lifestyle Centers and Outlet Centers

 

(8.7)%

 

 

(10.1)%

 

New leases

 

14.2%

 

 

(1.2)%

 

Renewal leases

 

(11.2)%

 

 

(11.5)%

 

Same-Center Sales Per Square Foot for In-line Tenants 10,000 Square Feet or Less(1):

 

 

Successor

 

 

 

Predecessor

 

 

 

 

 

 

 

Sales Per Square
Foot for the
Trailing Twelve
Months Ended
June 30,

 

 

 

Sales Per Square
Foot for the
Trailing Twelve
Months Ended
June 30,

 

 

 

 

 

 

 

2022

 

 

 

2021 (1)

 

 

% Change

 

Mall, Lifestyle Center and Outlet Center same-center sales per square foot

 

$

443

 

 

 

$

417

 

 

6.2%

 

 

(1)

Due to the temporary property closures that occurred during 2020 related to COVID-19, the majority of our tenants did not report sales for the full reporting period. As a result, we are not able to provide a complete measure of sales per square foot for the periods in the year ended December 31, 2020. Sales per square foot for the trailing twelve months ended June 30, 2021, is comprised of sales reported for the periods July 1 through December 31, 2019, and January 1 through June 30, 2021.

Same-center sales per square foot for the trailing twelve months ended June 30, 2022, increased 6.2% as compared with the trailing twelve months ended June 30, 2021 (excludes 2020). Same-center sales per square foot for the second quarter 2022 declined 3.9% as compared with the second quarter 2021.

DIVIDEND

On August 10, 2022, CBL’s Board of Directors declared a regular quarterly cash dividend for the three months ended September 30, 2022, of $0.25 per share. The dividend, which equates to an annual dividend payment of $1.00 per share, is payable on September 30, 2022, to shareholders of record as of September 15, 2022.

FINANCING ACTIVITY

During the quarter, CBL completed more than $663.0 million in financing activity, including funding the full redemption of all outstanding 10% Senior Secured Notes due 2029 (the “10% Notes”) utilizing net proceeds from two new non-recourse loans totaling $425.0 million, generating favorable interest expense savings. More details are outlined below.

On April 28, 2022, CBL and its 50% joint venture partner, closed on a $40.0 million non-recourse loan ($20.0 million at CBL’s share) secured by The Shoppes at Eagle Pointe, an open-air center in Cookeville, TN. The new ten-year CMBS loan bears a fixed interest rate of 5.4%. The loan replaces the maturing $33.6 million existing partially guaranteed term loan. Net proceeds to CBL after repayment of the existing loan were $6.7 million.

In May 2022, CBL completed the extension and modification of the non-recourse loan secured by Arbor Place Mall in Douglasville, GA ($100.4 million). The loan’s maturity was extended to May 2026 and maintained the existing fixed interest rate of 5.1%. CBL also completed the extension and modification of the non-recourse loan secured by Northwoods Mall in Charleston, SC ($59.9 million). The loan maturity was extended to April 2026 at the existing interest rate of 5.08%.

CBL also announced in May that it had closed on a new $65.0 million non-recourse loan secured by a pool of four open-air centers owned in a joint venture, located in Chattanooga, TN. The open-air centers include Hamilton Crossing, Hamilton Corner, The Terrace and The Shoppes at Hamilton Place/ Hamilton Place - Regal. The loan has a ten-year term with a fixed interest rate of 5.85%, interest only for three years and principal amortization based on a 30-year schedule thereafter. Net proceeds from the new loan were used to complete a partial redemption of CBL’s outstanding 10% Senior Secured Notes.

In June, CBL completed the redemption of all outstanding 10% Notes. The redemption was funded utilizing proceeds from a new $360.0 million non-recourse loan secured by a pool of high-quality outparcels and open-air centers. The new loan has an initial five-year term with one two-year extension option available to the Company, subject to certain conditions. The loan bears a floating interest rate based on 30-day SOFR plus 4.10%. $180 million principal amount of the $360 million loan has been fixed at a rate of 6.95% for a term of three years. The balance remains at a floating rate, which will allow for selective hedging at CBL’s option.

Additionally in June, CBL and its 65% joint venture partner closed on a new $42.5 million loan ($27.6 million at CBL’s share) secured by Ambassador Town Center. The new loan has a term of 7-years and a fixed interest rate of 4.35%. Proceeds were used to retire the existing $40.9 million loan, which was scheduled to mature in June 2023.

In June, CBL also repaid a $14.9 million loan (CBL’s share $13.9 million) secured by CBL Center, that was scheduled to mature.

Subsequent to second quarter end, CBL completed the modification and extensions of the loan secured by Parkdale Mall in Beaumont, TX ($68.1 million). The loan was extended to March 2026, at the existing interest rate of 5.85%.

CBL is also in the process of finalizing a modification of the loan secured by Southpark Mall in Richmond, VA ($54.8 million). The loan is expected to be extended through June 2026 at the existing interest rate of 4.85%.

As previously announced, the modification of the $35.5 million recourse loan secured by The Outlet Shoppes at Gettysburg in Gettysburg, PA is in process and is expected to be completed within the next 30 to 45 days.

In July, CBL conveyed Asheville Mall in Asheville, NC, to the lender in exchange for forgiveness of the $62.1 million loan secured by the property. The loans secured by EastGate Mall in Cincinnati, OH ($30.0 million) and Greenbrier Mall Chesapeake, VA ($61.6 million), remain in receivership and were deconsolidated based on each respective transfer date. CBL recently advised the servicer for the loan secured by Westgate Mall in Spartanburg, SC ($29.7 million) that it would cooperate with a foreclosure or conveyance of the property. CBL is in discussions with the servicer for the loan secured by Alamance Crossing East in Burlington, NC, ($42.0 million) to modify and/or extend the existing loan. If it is unable to reach a favorable agreement, CBL plans to cooperate with a foreclosure or conveyance of the property. Assuming the foreclosures or conveyances are completed for each of the four properties listed above and including the foreclosure of the $62.1 loan secured by Asheville Mall, a total of $225.4 million of debt will be removed from CBL’s pro rata share of total debt with an estimated debt yield of approximately 8.1%. CBL does not recognize earnings or receive cash flow from the properties in receivership.

CBL is in discussions with the lender to extend and/or modify the loan secured by Cross Creek Mall in Fayetteville, NC ($99.9 million) as well as West County Center located in St. Louis, MO ($82.1 million at CBL’s share). Both loans are currently scheduled to mature in 2022.

DISPOSITIONS

CBL did not complete any significant dispositions in the second quarter 2022.

REDEVELOPMENT ACTIVITY

Detailed project information is available in CBL’s Financial Supplement for Q2 2022, which can be found in the Invest – Financial Reports section of CBL’s website at cblproperties.com.

OUTLOOK AND GUIDANCE

After incorporating results for the second quarter 2022, CBL is maintaining guidance for 2022 FFO, as adjusted, in the range of $222.0 million - $237.0 million or $7.18 - $7.67 per diluted share. Same-center NOI guidance for the year was adjusted to exclude approximately $4.0 million of NOI related to Alamance Crossing East. This adjustment was fully offset by improved portfolio leasing expectations, resulting in same-center NOI guidance remaining in the range of $416.0 million to $430.0 million.

Key Guidance Assumptions:

 

 

Low

 

 

High

 

2022 FFO, as adjusted

 

$222 million

 

 

$237 million

 

2022 FFO, as adjusted, per share

 

$

7.18

 

 

$

7.67

 

Weighted Average Common Shares Outstanding

 

30.9 million

 

 

30.9 million

 

2022 Same-Center NOI ("SC NOI")

 

$416 million

 

 

$430 million

 

2022 Change in Same-Center NOI

 

 

(5.2

)%

 

 

(1.2

)%

Reconciliation of GAAP Earnings Per Share to 2022 FFO, as Adjusted, Per Share:

 

 

Low

 

 

High

 

Expected diluted earnings per common share

 

$

(6.02

)

 

$

(5.53

)

Depreciation and amortization

 

 

10.53

 

 

 

10.53

 

Debt discount accretion, net of noncontrolling interests' share

 

 

5.17

 

 

 

5.17

 

Loss on Impairment

 

 

0.01

 

 

 

0.01

 

Gain on depreciable property

 

 

(0.02

)

 

 

(0.02

)

Adjustment for unconsolidated affiliates with negative investment

 

 

(0.74

)

 

 

(0.74

)

Non-cash default interest expense

 

 

(0.59

)

 

 

(0.59

)

Gain on deconsolidated

 

 

(1.17

)

 

 

(1.17

)

Adjustement for litigation settlement

 

 

(0.02

)

 

 

(0.02

)

Reorganization item, net

 

 

0.03

 

 

 

0.03

 

Expected FFO, as adjusted, per diluted, fully converted common share

 

$

7.18

 

 

$

7.67

 

2022 Estimate of Capital Items:

 

 

Low

High

2022 Estimated Deferred Maintenance/Tenant Allowances

 

$35 million

$45 million

2022 Estimated Development/Redevelopment Expenditures

 

$20 million

$30 million

2022 Estimated Principal Amortization (Including Est. Term Loan ECF)

 

$105 million

$120 million

Total Estimate

 

$160 million

$195 million

ABOUT CBL PROPERTIES

Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBL’s owned and managed portfolio is comprised of 95 properties totaling 59.6 million square feet across 24 states, including 57 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 less dividends on preferred stock of the Company or distributions on preferred units of the Operating Partnership, as applicable. 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 presents both FFO allocable to Operating Partnership common unitholders and FFO allocable to common shareholders, as it believes that both are useful performance measures. 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. 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 (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. The Company then applies a percentage to FFO of the Operating Partnership common unitholders 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 held by noncontrolling interests during the period.

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 loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 10 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 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)

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months
Ended June 30,

 

 

 

Three Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

REVENUES:

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

131,832

 

 

 

$

131,316

 

Management, development and leasing fees

 

 

1,786

 

 

 

 

1,449

 

Other

 

 

3,400

 

 

 

 

3,796

 

Total revenues

 

 

137,018

 

 

 

 

136,561

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Property operating

 

 

(21,312

)

 

 

 

(19,623

)

Depreciation and amortization

 

 

(64,476

)

 

 

 

(47,499

)

Real estate taxes

 

 

(14,254

)

 

 

 

(15,110

)

Maintenance and repairs

 

 

(10,230

)

 

 

 

(8,784

)

General and administrative

 

 

(18,450

)

 

 

 

(11,269

)

Loss on impairment

 

 

(252

)

 

 

 

 

Litigation settlement

 

 

65

 

 

 

 

(57

)

Other

 

 

(834

)

 

 

 

(287

)

Total expenses

 

 

(129,743

)

 

 

 

(102,629

)

OTHER INCOME (EXPENSES):

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

910

 

 

 

 

752

 

Interest expense

 

 

(55,117

)

 

 

 

(22,299

)

Gain on sales of real estate assets

 

 

3

 

 

 

 

107

 

Reorganization items, net

 

 

613

 

 

 

 

(17,073

)

Income tax benefit (provision)

 

 

472

 

 

 

 

(705

)

Equity in earnings (losses) of unconsolidated affiliates

 

 

2,039

 

 

 

 

(4,275

)

Total other income (expenses)

 

 

(51,080

)

 

 

 

(43,493

)

Net loss

 

 

(43,805

)

 

 

 

(9,561

)

Net loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

44

 

 

 

 

230

 

Other consolidated subsidiaries

 

 

2,373

 

 

 

 

449

 

Net loss attributable to the Company

 

 

(41,388

)

 

 

 

(8,882

)

Dividends allocable to unvested restricted stock

 

 

(210

)

 

 

 

 

Net loss attributable to common shareholders

 

$

(41,598

)

 

 

$

(8,882

)

Basic and diluted per share data attributable to common shareholders:

 

 

 

 

 

 

 

 

 

Net loss attributable to common shareholders

 

$

(1.34

)

 

 

$

(0.05

)

Weighted-average common and potential dilutive common shares outstanding

 

 

30,973

 

 

 

 

196,458

 

Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

REVENUES:

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

267,164

 

 

 

$

259,491

 

Management, development and leasing fees

 

 

3,555

 

 

 

 

3,108

 

Other

 

 

6,401

 

 

 

 

7,146

 

Total revenues

 

 

277,120

 

 

 

 

269,745

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Property operating

 

 

(44,656

)

 

 

 

(41,425

)

Depreciation and amortization

 

 

(133,419

)

 

 

 

(95,611

)

Real estate taxes

 

 

(28,689

)

 

 

 

(31,661

)

Maintenance and repairs

 

 

(20,796

)

 

 

 

(19,565

)

General and administrative

 

 

(36,524

)

 

 

 

(23,881

)

Loss on impairment

 

 

(252

)

 

 

 

(57,182

)

Litigation settlement

 

 

146

 

 

 

 

801

 

Other

 

 

(834

)

 

 

 

(287

)

Total expenses

 

 

(265,024

)

 

 

 

(268,811

)

OTHER INCOME (EXPENSES):

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

1,064

 

 

 

 

1,528

 

Interest expense

 

 

(145,776

)

 

 

 

(46,429

)

Gain on deconsolidation

 

 

36,250

 

 

 

 

55,131

 

Gain (loss) on sales of real estate assets

 

 

19

 

 

 

 

(192

)

Reorganization items, net

 

 

(958

)

 

 

 

(40,006

)

Income tax provision

 

 

(329

)

 

 

 

(1,456

)

Equity in earnings (losses) of unconsolidated affiliates

 

 

10,606

 

 

 

 

(7,351

)

Total other income (expenses)

 

 

(99,124

)

 

 

 

(38,775

)

Net loss

 

 

(87,028

)

 

 

 

(37,841

)

Net loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

59

 

 

 

 

928

 

Other consolidated subsidiaries

 

 

4,859

 

 

 

 

1,268

 

Net loss attributable to the Company

 

 

(82,110

)

 

 

 

(35,645

)

Dividends allocable to unvested restricted stock

 

 

(210

)

 

 

 

 

Net loss attributable to common shareholders

 

$

(82,320

)

 

 

$

(35,645

)

Basic and diluted per share data attributable to common shareholders:

 

 

 

 

 

 

 

 

 

Net loss attributable to common shareholders

 

$

(2.83

)

 

 

$

(0.18

)

Weighted-average common and potential dilutive common shares outstanding

 

 

29,091

 

 

 

 

196,484

 

The Company's reconciliation of net loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows:
(in thousands, except per share data)

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months
Ended June 30,

 

 

 

Three Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

Net loss attributable to common shareholders

 

$

(41,598

)

 

 

$

(8,882

)

Noncontrolling interest in loss of Operating Partnership

 

 

(44

)

 

 

 

(230

)

Depreciation and amortization expense of:

 

 

 

 

 

 

 

 

 

Consolidated properties

 

 

64,476

 

 

 

 

47,499

 

Unconsolidated affiliates

 

 

8,819

 

 

 

 

13,456

 

Non-real estate assets

 

 

(203

)

 

 

 

(492

)

Dividends allocable to unvested restricted stock

 

 

210

 

 

 

 

 

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

 

 

(938

)

 

 

 

(558

)

Loss on impairment, net of taxes

 

 

186

 

 

 

 

 

FFO allocable to Operating Partnership common unitholders

 

 

30,908

 

 

 

 

50,793

 

Debt discount accretion, net of noncontrolling interests' share (1)

 

 

50,036

 

 

 

 

 

Adjustment for unconsolidated affiliates with negative investment (2)

 

 

(10,460

)

 

 

 

 

Senior secured notes fair value adjustment (3)

 

 

(593

)

 

 

 

 

Litigation settlement (4)

 

 

(65

)

 

 

 

57

 

Non-cash default interest expense (5)

 

 

(9,344

)

 

 

 

11,576

 

Reorganization items, net (6)

 

 

(613

)

 

 

 

17,073

 

FFO allocable to Operating Partnership common unitholders, as adjusted

 

$

59,869

 

 

 

$

79,499

 

FFO per diluted share

 

$

0.97

 

 

 

$

0.25

 

FFO, as adjusted, per diluted share

 

$

1.88

 

 

 

$

0.39

 

Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted

 

 

31,822

 

 

 

 

201,576

 

(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 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 Company’s 10% senior secured notes (the “Secured Notes”) as interest expense.

(4)

Represents a credit to litigation settlement expense for the three-month period ended June 30, 2022 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 three months ended June 30, 2022 includes the reversal of default interest expense when waivers or forbearance agreements were obtained. The three months ended June 30, 2021 includes default interest expense related to loans secured by properties that were in default prior to the Company filing bankruptcy, as well as loans secured by properties that remain in default due to the Company filing bankruptcy.

(6)

Represents costs incurred subsequent to the Company filing bankruptcy associated with the Company’s reorganization efforts, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees expensed in accordance with ASC 852.

The Company's reconciliation of net loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows:
(in thousands, except per share data)

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

Net loss attributable to common shareholders

 

$

(82,320

)

 

 

$

(35,645

)

Noncontrolling interest in loss of Operating Partnership

 

 

(59

)

 

 

 

(928

)

Depreciation and amortization expense of:

 

 

 

 

 

 

 

 

 

Consolidated properties

 

 

133,419

 

 

 

 

95,611

 

Unconsolidated affiliates

 

 

17,339

 

 

 

 

26,986

 

Non-real estate assets

 

 

(401

)

 

 

 

(1,032

)

Dividends allocable to unvested restricted stock

 

 

210

 

 

 

 

 

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

 

 

(1,837

)

 

 

 

(1,139

)

Loss on impairment, net of taxes

 

 

186

 

 

 

 

57,182

 

Gain on depreciable property

 

 

(629

)

 

 

 

 

FFO allocable to Operating Partnership common unitholders

 

 

65,908

 

 

 

 

141,035

 

Debt discount accretion, net of noncontrolling interests' share (1)

 

 

128,499

 

 

 

 

 

Adjustment for unconsolidated affiliates with negative investment (2)

 

 

(23,007

)

 

 

 

 

Senior secured notes fair value adjustment (3)

 

 

(395

)

 

 

 

 

Litigation settlement (4)

 

 

(146

)

 

 

 

(801

)

Non-cash default interest expense (5)

 

 

(18,220

)

 

 

 

23,046

 

Gain on deconsolidation (6)

 

 

(36,250

)

 

 

 

(55,131

)

Reorganization items, net (7)

 

 

958

 

 

 

 

40,006

 

FFO allocable to Operating Partnership common unitholders, as adjusted

 

$

117,347

 

 

 

$

148,155

 

FFO per diluted share

 

$

2.20

 

 

 

$

0.70

 

FFO, as adjusted, per diluted share

 

$

3.92

 

 

 

$

0.73

 

Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted

 

 

29,926

 

 

 

 

201,601

 

(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 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 Secured Notes as interest expense.

(4)

Represents a credit to litigation settlement expense in each of the six-month periods ended June 30, 2022 and 2021 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 six months ended June 30, 2022 includes the reversal of default interest expense when waivers or forbearance agreements were obtained. The six months ended June 30, 2021 includes default interest expense related to loans secured by properties that were in default prior to the Company filing bankruptcy, as well as loans secured by properties that remain in default due to the Company filing bankruptcy.

(6)

For the six months ended June 30, 2022, the Successor Company deconsolidated Greenbrier Mall due to a loss of control when the property was placed into receivership in connection with the foreclosure process. For the six months ended June 30, 2021, the Predecessor Company deconsolidated Asheville Mall and Park Plaza due to a loss of control when the properties were placed into receivership in connection with the foreclosure process.

(7)

Represents costs incurred subsequent to the Company filing bankruptcy associated with the Company’s reorganization efforts, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees expensed in accordance with ASC 852.

The reconciliation of diluted EPS to FFO per diluted share for the three and six months ended June 30, 2022 and 2021 is as follows:

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months
Ended June 30,

 

 

 

Three Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

Diluted EPS attributable to common shareholders

 

$

(1.34

)

 

 

$

(0.05

)

Add amounts per share included in FFO:

 

 

 

 

 

 

 

 

 

Unvested restricted stock

 

 

0.04

 

 

 

 

 

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

 

 

2.23

 

 

 

 

0.30

 

Loss on impairment, net of taxes

 

 

0.01

 

 

 

 

 

FFO per diluted share

 

$

0.94

 

 

 

$

0.25

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

Diluted EPS attributable to common shareholders

 

$

(2.83

)

 

 

$

(0.18

)

Add amounts per share included in FFO:

 

 

 

 

 

 

 

 

 

Unvested restricted stock

 

 

0.08

 

 

 

 

 

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

 

 

4.96

 

 

 

 

0.59

 

Loss on impairment, net of taxes

 

 

0.01

 

 

 

 

0.29

 

Gain on depreciable property

 

 

(0.02

)

 

 

 

 

FFO per diluted share

 

$

2.20

 

 

 

$

0.70

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months
Ended June 30,

 

 

 

Three Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

SUPPLEMENTAL FFO INFORMATION:

 

 

 

 

 

 

 

 

 

Lease termination fees

 

$

1,052

 

 

 

$

167

 

 

 

 

 

 

 

 

 

 

 

Straight-line rental income adjustment

 

$

4,425

 

 

 

$

(2,549

)

 

 

 

 

 

 

 

 

 

 

Gain on outparcel sales

 

$

3

 

 

 

$

90

 

 

 

 

 

 

 

 

 

 

 

Net amortization of acquired above- and below-market leases

 

$

(4,892

)

 

 

$

73

 

 

 

 

 

 

 

 

 

 

 

Income tax benefit (provision)

 

$

472

 

 

 

$

(705

)

 

 

 

 

 

 

 

 

 

 

Abandoned projects expense

 

$

(834

)

 

 

$

(287

)

 

 

 

 

 

 

 

 

 

 

Interest capitalized

 

$

147

 

 

 

$

13

 

 

 

 

 

 

 

 

 

 

 

Estimate of uncollectable revenues

 

$

940

 

 

 

$

(7,253

)

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

SUPPLEMENTAL FFO INFORMATION:

 

 

 

 

 

 

 

 

 

Lease termination fees

 

$

2,448

 

 

 

$

1,278

 

 

 

 

 

 

 

 

 

 

 

Straight-line rental income adjustment

 

$

7,342

 

 

 

$

(5,445

)

 

 

 

 

 

 

 

 

 

 

Gain (loss) on outparcel sales, net of taxes

 

$

19

 

 

 

$

(209

)

 

 

 

 

 

 

 

 

 

 

Net amortization of acquired above- and below-market leases

 

$

(11,049

)

 

 

$

125

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

$

(329

)

 

 

$

(1,456

)

 

 

 

 

 

 

 

 

 

 

Abandoned projects expense

 

$

(834

)

 

 

$

(287

)

 

 

 

 

 

 

 

 

 

 

Interest capitalized

 

$

375

 

 

 

$

32

 

 

 

 

 

 

 

 

 

 

 

Estimate of uncollectable revenues

 

$

3,301

 

 

 

$

(16,370

)

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

 

Predecessor

 

 

 

As of June 30,

 

 

 

As of June 30,

 

 

 

2022

 

 

 

2021

 

Straight-line rent receivable

 

$

9,440

 

 

 

$

48,341

 

Same-center Net Operating Income
(Dollars in thousands)

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months
Ended June 30,

 

 

 

Three Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

Net loss

 

$

(43,805

)

 

 

$

(9,561

)

Adjustments:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

64,476

 

 

 

 

47,499

 

Depreciation and amortization from unconsolidated affiliates

 

 

8,819

 

 

 

 

13,456

 

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

 

 

(938

)

 

 

 

(558

)

Interest expense

 

 

55,117

 

 

 

 

22,299

 

Interest expense from unconsolidated affiliates

 

 

21,660

 

 

 

 

10,512

 

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

 

 

(2,525

)

 

 

 

(878

)

Abandoned projects expense

 

 

834

 

 

 

 

287

 

Gain on sales of real estate assets

 

 

(3

)

 

 

 

(107

)

Adjustment for unconsolidated affiliates with negative investment

 

 

(10,460

)

 

 

 

 

Loss on impairment, net of taxes

 

 

186

 

 

 

 

 

Litigation settlement

 

 

(65

)

 

 

 

57

 

Reorganization items, net

 

 

(613

)

 

 

 

17,073

 

Income tax (benefit) provision

 

 

(472

)

 

 

 

705

 

Lease termination fees

 

 

(1,052

)

 

 

 

(167

)

Straight-line rent and above- and below-market lease amortization

 

 

467

 

 

 

 

2,476

 

Net loss attributable to noncontrolling interests in other consolidated subsidiaries

 

 

2,373

 

 

 

 

449

 

General and administrative expenses

 

 

18,450

 

 

 

 

11,269

 

Management fees and non-property level revenues

 

 

(525

)

 

 

 

(5,166

)

Operating Partnership's share of property NOI

 

 

111,924

 

 

 

 

109,645

 

Non-comparable NOI

 

 

(4,566

)

 

 

 

(3,962

)

Total same-center NOI (1)

 

$

107,358

 

 

 

$

105,683

 

Total same-center NOI percentage change

 

 

1.6

%

 

 

 

 

 

(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, 2022, 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, 2022. 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
(Dollars in thousands)

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

Net loss

 

$

(87,028

)

 

 

$

(37,841

)

Adjustments:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

133,419

 

 

 

 

95,611

 

Depreciation and amortization from unconsolidated affiliates

 

 

17,339

 

 

 

 

26,986

 

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

 

 

(1,837

)

 

 

 

(1,139

)

Interest expense

 

 

145,776

 

 

 

 

46,429

 

Interest expense from unconsolidated affiliates

 

 

40,157

 

 

 

 

20,361

 

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

 

 

(5,095

)

 

 

 

(1,845

)

Abandoned projects expense

 

 

834

 

 

 

 

287

 

(Gain) loss on sales of real estate assets

 

 

(19

)

 

 

 

192

 

Gain on sales of real estate assets of unconsolidated affiliates

 

 

(629

)

 

 

 

 

Adjustment for unconsolidated affiliates with negative investment

 

 

(23,007

)

 

 

 

 

Gain on deconsolidation

 

 

(36,250

)

 

 

 

(55,131

)

Loss on impairment, net of taxes

 

 

186

 

 

 

 

57,182

 

Litigation settlement

 

 

(146

)

 

 

 

(801

)

Reorganization items, net

 

 

958

 

 

 

 

40,006

 

Income tax provision

 

 

329

 

 

 

 

1,456

 

Lease termination fees

 

 

(2,448

)

 

 

 

(1,278

)

Straight-line rent and above- and below-market lease amortization

 

 

3,707

 

 

 

 

5,320

 

Net loss attributable to noncontrolling interests in other consolidated subsidiaries

 

 

4,859

 

 

 

 

1,268

 

General and administrative expenses

 

 

36,524

 

 

 

 

23,881

 

Management fees and non-property level revenues

 

 

(1,049

)

 

 

 

(7,379

)

Operating Partnership's share of property NOI

 

 

226,580

 

 

 

 

213,565

 

Non-comparable NOI

 

 

(9,194

)

 

 

 

(9,738

)

Total same-center NOI (1)

 

$

217,386

 

 

 

$

203,827

 

Total same-center NOI percentage change

 

 

6.7

%

 

 

 

 

 

(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, 2022, 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, 2022. 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)

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months
Ended June 30,

 

 

 

Three Months

Ended June 30,

 

 

 

2022

 

 

 

2021

 

Malls

 

$

75,369

 

 

 

$

74,157

 

Outlet centers

 

 

4,520

 

 

 

 

4,246

 

Lifestyle centers

 

 

8,727

 

 

 

 

8,854

 

Open-air centers

 

 

13,178

 

 

 

 

12,696

 

Outparcels and other

 

 

5,564

 

 

 

 

5,730

 

Total same-center NOI (1)

 

$

107,358

 

 

 

$

105,683

 

Percentage Change:

 

 

 

 

 

 

 

 

 

Malls

 

 

1.6

%

 

 

 

 

 

Outlet centers

 

 

6.5

%

 

 

 

 

 

Lifestyle centers

 

 

(1.4

)%

 

 

 

 

 

Open-air centers

 

 

3.8

%

 

 

 

 

 

Outparcels and other

 

 

(2.9

)%

 

 

 

 

 

Total same-center NOI (1)

 

 

1.6

%

 

 

 

 

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

2022

 

 

 

2021

 

Malls

 

$

153,124

 

 

 

$

143,851

 

Outlet centers

 

 

8,847

 

 

 

 

7,991

 

Lifestyle centers

 

 

17,830

 

 

 

 

16,527

 

Open-air centers

 

 

26,258

 

 

 

 

24,562

 

Outparcels and other

 

 

11,327

 

 

 

 

10,896

 

Total same-center NOI (1)

 

$

217,386

 

 

 

$

203,827

 

Percentage Change:

 

 

 

 

 

 

 

 

 

Malls

 

 

6.4

%

 

 

 

 

 

Lifestyle centers

 

 

10.7

%

 

 

 

 

 

Open-air centers

 

 

7.9

%

 

 

 

 

 

Outlet centers

 

 

6.9

%

 

 

 

 

 

Outparcels and other

 

 

4.0

%

 

 

 

 

 

Total same-center NOI (1)

 

 

6.7

%

 

 

 

 

 

(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, 2022, 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, 2022. 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 June 30, 2022 (Successor)

 

 

 

Fixed
Rate

 

 

Variable
Rate

 

 

Total per
Debt
Schedule

 

 

Unamortized
Deferred
Financing
Costs

 

 

Unamortized
Debt
Discounts (1)

 

 

Total

 

Consolidated debt

 

$

881,513

 

 

$

1,270,871

 

 

$

2,152,384

 

 

$

(16,028

)

 

$

(100,967

)

 

$

2,035,389

 

Noncontrolling interests' share of consolidated debt

 

 

(32,771

)

 

 

(13,597

)

 

 

(46,368

)

 

 

92

 

 

 

15,424

 

 

 

(30,852

)

Company's share of unconsolidated affiliates' debt

 

 

627,434

 

 

 

71,786

 

 

 

699,220

 

 

 

(2,490

)

 

 

 

 

 

696,730

 

Other debt (2)

 

 

153,719

 

 

 

 

 

 

153,719

 

 

 

 

 

 

 

 

 

153,719

 

Company's share of consolidated, unconsolidated and other debt

 

$

1,629,895

 

 

$

1,329,060

 

 

$

2,958,955

 

 

$

(18,426

)

 

$

(85,543

)

 

$

2,854,986

 

Weighted-average interest rate

 

 

4.67

%

 

 

4.44

%

 

 

4.57

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2021 (Predecessor)

 

 

 

Fixed
Rate

 

 

Variable
Rate

 

 

Total per
Debt
Schedule

 

 

Unamortized
Deferred
Financing
Costs

 

 

Unamortized
Deferred
Financing
Costs

 

 

Total

 

Consolidated debt (3)

 

$

2,338,118

 

 

$

1,181,599

 

 

$

3,519,717

 

 

$

(2,987

)

 

$

 

 

$

3,516,730

 

Noncontrolling interests' share of consolidated debt

 

 

(29,744

)

 

 

 

 

 

(29,744

)

 

 

238

 

 

 

 

 

 

(29,506

)

Company's share of unconsolidated affiliates' debt

 

 

618,092

 

 

 

124,141

 

 

 

742,233

 

 

 

(2,648

)

 

 

 

 

 

739,585

 

Other debt (2)

 

 

138,926

 

 

 

 

 

 

138,926

 

 

 

 

 

 

 

 

 

138,926

 

Company's share of consolidated and unconsolidated debt

 

$

3,065,392

 

 

$

1,305,740

 

 

$

4,371,132

 

 

$

(5,397

)

 

$

 

 

$

4,365,735

 

Weighted-average interest rate

 

 

5.04

%

 

 

8.62

%

(4)

 

6.11

%

 

 

 

 

 

 

 

 

 

 

 

 

(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 a debt discount on the Effective Date. The debt discount is 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.

(3)

Includes $2,529,138 of liabilities subject to compromise.

(4)

The administrative agent informed the Company that interest would accrue on all outstanding obligations at the post-default rate, which was equal to the rate that otherwise would be in effect plus 5.0%. The post-default interest rate on June 30, 2021 was 9.50%.

Consolidated Balance Sheets
(Unaudited; in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

June 30,
2022

 

 

December 31,
2021

 

ASSETS

 

 

 

 

 

 

 

 

Real estate assets:

 

 

 

 

 

 

 

 

Land

 

$

592,553

 

 

$

599,283

 

Buildings and improvements

 

 

1,171,468

 

 

 

1,173,106

 

 

 

 

1,764,021

 

 

 

1,772,389

 

Accumulated depreciation

 

 

(77,968

)

 

 

(19,939

)

 

 

 

1,686,053

 

 

 

1,752,450

 

Developments in progress

 

 

13,201

 

 

 

16,665

 

Net investment in real estate assets

 

 

1,699,254

 

 

 

1,769,115

 

Cash and cash equivalents

 

 

177,065

 

 

 

169,554

 

Available-for-sale securities - at fair value (amortized cost of $150,057 and $149,999 as of June 30, 2022 and December 31, 2021, respectively)

 

 

150,063

 

 

 

149,996

 

Receivables:

 

 

 

 

 

 

 

 

Tenant

 

 

27,256

 

 

 

25,190

 

Other

 

 

4,084

 

 

 

4,793

 

Investments in unconsolidated affiliates

 

 

85,685

 

 

 

103,655

 

In-place leases, net

 

 

307,887

 

 

 

384,705

 

Above market leases, net

 

 

201,499

 

 

 

234,286

 

Intangible lease assets and other assets

 

 

121,749

 

 

 

104,685

 

 

 

$

2,774,542

 

 

$

2,945,979

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Mortgage and other indebtedness, net

 

$

2,035,389

 

 

$

1,813,209

 

10% senior secured notes - at fair value (carrying amount of $395,000 as of December 31, 2021)

 

 

 

 

 

395,395

 

Below market leases, net

 

 

131,135

 

 

 

151,871

 

Accounts payable and accrued liabilities

 

 

146,393

 

 

 

184,404

 

Total liabilities

 

 

2,312,917

 

 

 

2,544,879

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common stock, $.001 par value, 200,000,000 shares authorized, 31,814,178 and 20,774,716 issued and outstanding in 2022 and 2021, respectively

 

 

32

 

 

 

21

 

Additional paid-in capital

 

 

705,884

 

 

 

547,726

 

Accumulated other comprehensive income (loss)

 

 

6

 

 

 

(3

)

Accumulated deficit

 

 

(241,609

)

 

 

(151,545

)

Total shareholders' equity

 

 

464,313

 

 

 

396,199

 

Noncontrolling interests

 

 

(2,688

)

 

 

4,901

 

Total equity

 

 

461,625

 

 

 

401,100

 

 

 

$

2,774,542

 

 

$

2,945,979

 

 

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

Source: CBL Properties