-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BN19R+3lyyoR1cvtg0SKo/vnl4N8+yJa6NHKmVUrfu2MmnWDsQp/IeO8RXwbtnmh shJgtjuz72hE9ag2ZPAB7g== 0000910612-04-000110.txt : 20040902 0000910612-04-000110.hdr.sgml : 20040902 20040902160701 ACCESSION NUMBER: 0000910612-04-000110 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040312 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20040902 DATE AS OF CHANGE: 20040902 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CBL & ASSOCIATES PROPERTIES INC CENTRAL INDEX KEY: 0000910612 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 621545718 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12494 FILM NUMBER: 041014016 BUSINESS ADDRESS: STREET 1: 2030 HAMILTON PLACE BVLD, SUITE 500 STREET 2: CBL CENTER CITY: CHATTANOOGA STATE: TN ZIP: 37421 BUSINESS PHONE: 4238550001 MAIL ADDRESS: STREET 1: 2030 HAMILTON PLACE BVLD, SUITE 500 STREET 2: CBL CENTER CITY: CHATTANOOGA STATE: TN ZIP: 37421 8-K 1 form8k2004acquisitions.txt ACQUISITION SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): March 12, 2004 CBL & ASSOCIATES PROPERTIES, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 1-12494 62-154718 (State or Other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) Suite 500, 2030 Hamilton Place Blvd, Chattanooga, TN 37421 (Address of principal executive office, including zip code) (423) 855-0001 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) 1 ITEM 2.01 Completion of Acquisition or Disposition of Assets CBL & Associates Properties, Inc. (the "Company') acquired six malls, two associated centers and one community center during the seven months ended July 31, 2004. Although none of the properties acquired are individually significant according to the provisions of Rule 3-14 of Regulation S-X of the Securities and Exchange Commission, they are significant in the aggregate. This Current Report on Form 8-K is being filed to provide certain historical and pro forma financial information related to these acquisitions, which are described below. In this Current Report on Form 8-K, dollars are in thousands, except for per share amounts. On March 12, 2004, the Company acquired Honey Creek Mall in Terre Haute, IN for a purchase price, including transaction costs, of $83,114, which consisted of $50,114 in cash and the assumption of $33,000 of non-recourse debt that bears interest at a stated rate of 6.95% and matures in May 2009. The Company recorded a debt premium of $3,146, computed using an estimated market interest rate of 4.75%, since the debt assumed was at an above-market interest rate compared to similar debt instruments at the date of acquisition. On March 12, 2004, the Company acquired Volusia Mall in Daytona Beach, FL for a purchase price, including transaction costs, of $118,493, which consisted of $63,686 in cash and the assumption of $54,807 of non-recourse debt that bears interest at a stated rate of 6.70% and matures in March 2009. The Company recorded a debt premium of $4,615, computed using an estimated market interest rate of 4.75%, since the debt assumed was at an above-market interest rate compared to similar debt instruments at the date of acquisition. On April 8, 2004, the Company acquired Greenbrier Mall in Chesapeake, VA for a cash purchase price, including transaction costs, of $107,450. The purchase price was partially financed with a new recourse term loan of $92,650 that bears interest at LIBOR plus 100 basis points and matures in April 2006. On April 21, 2004, the Company acquired Fashion Square, a community center in Orange Park, FL for a cash purchase price, including transaction costs, of $3,961. On May 20, 2004, the Company acquired Chapel Hill Mall and its associated center, Chapel Hill Suburban, in Akron, OH for a cash purchase price of $78,252, including transaction costs. The purchase price was partially financed with a new recourse term loan of $66,500 that bears interest at LIBOR plus 100 basis points and matures in May 2006. On June 22, 2004, the Company acquired Park Plaza Mall in Little Rock, AR for a purchase price, including transaction costs, of $77,526, which consisted of $36,213 in cash and the assumption of $41,313 of non-recourse debt that bears interest at a stated rate of 8.69% and matures in May 2010. The Company recorded a debt premium of $7,737, computed using an estimated market interest rate of 4.90%, since the debt assumed was at an above-market interest rate compared to similar debt instruments at the date of acquisition. On July 28, 2004, the Company acquired Monroeville Mall, and its associated center, the Annex, in the eastern Pittsburgh suburb of Monroeville, PA, for a purchase price, including transaction costs, of $232,191, which consisted of $40,018 in cash, the assumption of $134,004 of non-recourse debt that bears interest at a stated rate of 5.73% and matures in January 2013, an obligation of $11,950 to purchase the fee interest in the land underlying the mall and associated center on or before July 28, 2007, and the issuance of 780,470 special common units in the Operating Partnership valued at $46,219 (fair value of $59.21 per special common unit). The Company recorded a debt premium of $3,270, computed using an estimated market interest rate of 5.30%, 2 since the debt assumed was at an above-market interest rate compared to similar debt instruments at the date of acquisition. The results of operations of Monroeville Mall will be included in the consolidated financial statements beginning July 28, 2004. The Company previously announced that the purchase price of the Monroeville properties was $231,234. That purchase price included a value of $60,955 assigned to the special common units based on their face value of $78.10 per special common unit. The difference between the previously reported purchase price and the purchase price allocated to the net assets acquired includes a revised value of $46,219 for the special common units based on their estimated fair value of $59.21 per special common unit plus additional transaction costs of $3,743 and the obligation of $11,950 to acquire the land in the future. ITEM 9.01 Financial Statements and Exhibits Listed below are the financial statements, pro forma financial information and exhibits filed as part of this report: (a) Financial Statements of Businesses Acquired The statements of certain revenues and certain operating expenses of Greenbrier Mall (described under Item 2.01) as listed in the accompanying Index to Financial Statements and Pro Forma Financial Information are filed as part of this Current Report on Form 8-K. The statements of certain revenues and certain operating expenses of Monroeville Mall (described under Item 2.01) as listed in the accompanying Index to Financial Statements and Pro Forma Financial Information are filed as part of this Current Report on Form 8-K. (b) Pro Forma Financial Information The pro forma financial information of CBL & Associates Properties, Inc. listed in the accompanying Index to Financial Statements and Pro Forma Financial Information are filed as part of this Current Report on Form 8-K. (c) Exhibits 23 Consent of Deloitte & Touche LLP 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CBL & ASSOCIATES PROPERTIES, INC. /s/ John N. Foy --------------------------------------- John N. Foy Vice Chairman, Chief Financial Officer and Treasurer (Authorized Officer of the Registrant, Principal Financial Officer and Principal Accounting Officer) Date: September 2, 2004 4 INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION The following historical financial statements and pro forma financial information are presented in accordance with Rule 3-14 and Article 11, respectively, of Regulation S-X of the Securities and Exchange Commission. The historical financial statements have been audited only for certain properties acquired. With respect to Greenbrier Mall and Monroeville Mall, the historical combined financial statement has been audited only for the most recent fiscal year as these transactions did not involve a related party and the registrant, after reasonable inquiry, is not aware of any material factors related to the acquired properties not otherwise disclosed that would cause the reported financial information to not be necessarily indicative of future operating results. In accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission, certain unaudited financial information for properties acquired during the seven months ended July 31, 2004 that are not individually significant has also been presented. In addition, as the properties will be directly or indirectly owned by entities that will elect or have elected to be treated as real estate investment trusts (as specified under sections 856-860 of the Internal Revenue Code of 1986) for Federal income tax purposes, a presentation of estimated taxable operating results is not applicable. Page Number GREENBRIER MALL Report of Independent Registered Public Accounting Firm 6 Statement of Certain Revenues and Certain Operating Expenses of Greenbrier Mall for the Year Ended December 31, 2003 7 Notes to the Statement of Certain Revenues and Certain Operating Expenses of Greenbrier Mall 8 MONROEVILLE MALL Report of Independent Registered Public Accounting Firm 10 Statement of Certain Revenues and Certain Operating Expenses of Monroeville Mall for the Year Ended December 31, 2003 11 Notes to the Statement of Certain Revenues and Certain Operating Expenses of Monroeville Mall 12 CBL & ASSOCIATES PROPERTIES, INC. Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2003 14 Unaudited Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2004 15 Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2004 16 Consent of Independent Registered Public Accounting Firm 17 5 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders CBL & Associates Properties, Inc.: We have audited the accompanying statement of certain revenues and certain expenses of Greenbrier Mall (the "Property") for the year ended December 31, 2003. This financial statement is the responsibility of the Property's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of certain revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the filing of a Form 8-K by CBL & Associates Properties, Inc. as a result of the acquisition of the Property). Material amounts, described in Note 1 to the statement of certain revenues and certain expenses that would not be directly attributable to those resulting from future operations of the Property are excluded, and the financial statement is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, such financial statement presents fairly, in all material respects, certain revenues and certain expenses of the Property for the year ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP July 9, 2004 Atlanta, Georgia 6 GREENBRIER MALL STATEMENTS OF CERTAIN REVENUES AND CERTAIN OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 AND THE THREE MONTHS ENDED MARCH 31, 2004 (UNAUDITED) - -------------------------------------------------------------------------------
Three Months Ended March 31, 2004 Year Ended (unaudited) December 31, 2003 REVENUES: Rentals: Minimum $ 1,987,976 $ 7,473,070 Percentage 91,018 351,707 Tenant reimbursements 1,022,372 4,109,034 Other income 3,599 1,427,496 --------------------------------------------------------- Total revenues 3,104,965 13,361,307 --------------------------------------------------------- EXPENSES: Property operating 650,320 2,231,557 Real estate taxes 263,466 1,159,674 Maintenance and repairs 267,002 901,659 --------------------------------------------------------- Total expenses 1,180,788 4,292,890 --------------------------------------------------------- Excess of certain revenues over certain operating expenses $1,924,177 $9,068,417 ========================================================= See accompanying notes to financial statements.
7 GREENBRIER MALL NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2003 AND THE THREE MONTHS ENDED MARCH 31, 2004 (UNAUDITED) NOTE 1. ORGANIZATION AND BASIS FOR PRESENTATION The accompanying statements of certain revenues and certain operating expenses (the "Statements") relate to Greenbrier Mall, an approximately 890,000-square-foot, two-level regional mall in Chesapeake, Virginia. The Statement is prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended, as a result of the acquisition of Greenbrier Mall by CBL & Associates Properties, Inc. Accordingly, the Statements are not representative of the actual operations of the Greenbrier Mall for the periods presented as certain revenues and certain operating expenses have been excluded. Such items include depreciation, amortization, interest expense, management fees and interest income. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition - Rental income comprises minimum rents, expense reimbursements and percentage rent payments. Minimum rents with fixed increases are recognized on a straight-line basis over the initial terms of the related leases. Tenant reimbursements are recognized in the period that the related costs are incurred. Greenbrier Mall accounts for these leases as operating leases as it has retained substantially all risks and benefits of property ownership. Percentage rent is recognized when the tenant's reported sales have reached certain levels specified in the respective lease. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying financial statements for the three months ended March 31, 2004 are unaudited; however, they have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in conjunction with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management of the Property, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation for the interim period have been included. The results for the interim period ended March 31, 2004, are not necessarily indicative of the results that may be expected for the full year. 8 NOTE 3. LEASING ACTIVITIES Greenbrier Mall has non-cancelable operating leases with tenants requiring monthly payments of specified minimum rent. The leases generally provide for minimum rentals, plus percentage rentals based upon the retail stores' sales volume. A majority of the leases require reimbursement by the tenant of their proportionate share of real estate taxes and common area expenses. Future minimum rental commitments under the non-cancelable operating leases at December 31, 2003 are as follows: Year Ending December 31: 2004 $ 6,776,850 2005 6,122,449 2006 5,657,785 2007 4,676,855 2008 3,232,839 Thereafter 8,380,224 --------------------------- Total $34,847,002 =========================== 9 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders CBL & Associates Properties, Inc.: We have audited the accompanying statement of certain revenues and certain expenses of Monroeville Mall (the "Property") for the year ended December 31, 2003. This financial statement is the responsibility of the Property's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of certain revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the filing of a Form 8-K by CBL & Associates Properties, Inc. as a result of the acquisition of the Property). Material amounts, described in Note 1 to the statement of certain revenues and certain expenses that would not be directly attributable to those resulting from future operations of the Property are excluded, and the financial statement is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, such financial statement presents fairly, in all material respects, certain revenues and certain expenses of the Property for the year ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP July 30, 2004 Atlanta, Georgia 10 MONROEVILLE MALL STATEMENTS OF CERTAIN REVENUES AND CERTAIN OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2003 AND THE SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED) - --------------------------------------------------------------------------------
Six Months Ended June 30, 2004 Year Ended (unaudited) December 31, 2003 REVENUES: Rentals: Minimum $ 7,030,623 $14,645,709 Percentage 168,972 559,199 Tenant reimbursements 5,993,637 11,028,316 Other income 9,458 104,375 --------------------------------------------------------- Total revenues 13,202,690 26,337,599 --------------------------------------------------------- EXPENSES: Property operating 2,541,885 5,032,109 Real estate taxes 1,551,722 3,010,734 Maintenance and repairs 978,132 2,145,099 --------------------------------------------------------- Total expenses 5,071,739 10,187,942 --------------------------------------------------------- Excess of certain revenues over certain operating expenses $ 8,130,951 $16,149,657 ========================================================= See accompanying notes to financial statements.
11 MONROEVILLE MALL NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2003 AND THE SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED) NOTE 1. ORGANIZATION AND BASIS FOR PRESENTATION The accompanying statements of certain revenues and certain operating expenses (the "Statements") relate to Monroeville Mall, an approximately 1,129,000-square-foot regional mall in the eastern Pittsburgh suburb of Monroeville, PA. The Statement is prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended, as a result of the acquisition of Monroeville Mall by CBL & Associates Properties, Inc. Accordingly, the Statements are not representative of the actual operations of the Monroeville Mall for the periods presented as certain revenues and certain operating expenses have been excluded. Such items include depreciation, amortization, interest expense, management fees and interest income. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition - Rental income comprises minimum rents, expense reimbursements and percentage rent payments. Minimum rents with fixed increases are recognized on a straight-line basis over the initial terms of the related leases. Expense reimbursements are recognized in the period that the applicable costs are incurred. Monroeville Mall accounts for these leases as operating leases as the Properties have retained substantially all risks and benefits of property ownership. Percentage rent is recognized when the tenant's reported sales have reached certain levels specified in the respective lease. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of certain revenues and certain expenses during the reporting period. Actual results could differ from those estimates. The accompanying financial statements for the six months ended June 30, 2004 are unaudited; however, they have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in conjunction with the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management of Monroeville Mall, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation for the interim period have been included. The results for the interim period ended June 30, 2004, are not necessarily indicative of the results that may be expected for the full year. 12 NOTE 3. LEASING ACTIVITIES Monroeville Mall has non-cancelable operating leases with tenants requiring monthly payments of specified minimum rent. The leases generally provide for minimum rentals, plus percentage rentals based upon the retail stores' sales volume. A majority of the leases require reimbursement by the tenant of their proportionate share of real estate taxes and common area expenses. Future minimum rental commitments under the non-cancelable operating leases at December 31, 2003 are as follows: Years Ending December 31: 2004 $ 13,192,000 2005 12,917,000 2006 12,029,000 2007 10,806,000 2008 9,992,000 Thereafter 38,219,000 --------------------------- Total $97,155,000 =========================== 13 CBL & Associates Properties, Inc. Pro Forma Consolidated Statements of Operations For the Six Months Ended June 30, 2004 (Unaudited and in thousands, except per share amounts)
CBL Greenbrier and Other Pro Forma CBL Historical Monroeville Acquisitions Adjustments Pro Forma ------------- -------------- ------------- ------------ ----------- REVENUES: Minimum rents $ 223,031 $ 9,155 $ 8,676 $ 635(a) $ 241,497 Percentage rents 8,168 267 726 - 9,161 Other rents 5,242 18 6 - 5,266 Tenant reimbursements 98,839 7,096 4,804 - 110,739 Management, development and leasing fees 3,511 - - - 3,511 Other 10,296 13 353 - 10,662 ------------- -------------- ------------- ------------ ----------- Total revenues 349,087 16,549 14,565 635 380,836 ------------- -------------- ------------- ------------ ----------- EXPENSES: Property operating 54,137 3,243 2,012 - 59,392 Depreciation and amortization 65,759 - - 7,669(b) 73,428 Real estate taxes 27,326 1,836 1,694 - 30,856 Maintenance and repairs 20,503 1,266 1,579 - 23,348 General and administrative 16,225 - - - 16,225 Other 7,955 - - - 7,955 ------------- -------------- ------------- ------------ ----------- Total expenses 191,905 6,345 5,285 7,669 211,204 ------------- -------------- ------------- ------------ ----------- Income from operations 157,182 10,204 9,280 (7,034) 169,632 Interest income 1,586 - - - 1,586 Interest expense (83,232) - - (8,059)(c) (91,291) Gain on sales of real estate assets 24,780 - - - 24,780 Equity in earnings of unconsolidated affiliates 5,546 - - - 5,546 Minority interest in earnings: Operating partnership (42,874) - - (2,714)(d) (45,588) Shopping center properties (3,058) - - - (3,058) ------------- -------------- ------------- ------------ ----------- Income before discontinued operations 59,930 10,204 9,280 (17,807) 61,607 Operating income of discontinued operations 279 - - - 279 Gain on discontinued operations 520 - - - 520 ------------- -------------- ------------- ------------ ----------- Net income 60,729 10,204 9,280 (17,807) 62,406 Preferred dividends (8,832) - - - (8,832) ------------- -------------- ------------- ------------ ----------- Net income available to common shareholders $ 51,897 $ 10,204 $ 9,280 $(17,807) $ 53,574 ============= ============== ============= ============ =========== Basic per share data: Income before discontinued operations, net of preferred dividends $ 1.68 $ 1.73 Discontinued operations 0.02 0.03 ------------- ----------- Net income available to common shareholders $ 1.70 $ 1.76 ============= =========== Weighted average common shares outstanding 30,464 30,464 Diluted per share data: Income before discontinued operations, net of preferred dividends $ 1.61 $ 1.67 Discontinued operations 0.03 0.02 ------------- ----------- Net income available to common shareholders $ 1.64 $ 1.69 ============= =========== Weighted average common and potential dilutive common shares outstanding 31,686 31,686 (a) Reflects the amortization of acquired above- and below-market leases. (b) Represents depreciation and amortization expense related to buildings and improvements, tenant improvements and in-place leases of the acquired properties. (c) Reflects interest expense on the $660,946 of debt assumed or borrowed (including debt premiums) in connection with the properties acquired during 2004, which had a weighted average effective interest rate of 3.37%. This amount includes the cash portion of the purchase price of each property acquired totaling $219,904, which is assumed to have been borrowed at the Company's borrowing rate under its lines of credit. (d) Reflects the allocation of earnings to the minority interest in the Operating Partnership as a result of the acquired properties.
14 CBL & Associates Properties, Inc. Pro Forma Consolidated Statements of Operations For the Year Ended December 31, 2003 (Unaudited and in thousands, except per share amounts)
Greenbrier CBL and Other Pro Forma CBL Historical Monroeville Acquisitions Adjustments Pro Forma ------------- -------------- ------------- ------------ ----------- REVENUES: Minimum rents $ 428,412 $ 22,119 $ 29,199 $ 1,714(a) $ 481,444 Percentage rents 12,907 911 2,029 - 15,847 Other rents 12,635 - 29 - 12,664 Tenant reimbursements 193,538 15,137 15,269 - 223,944 Management, development and leasing fees 5,525 - - - 5,525 Other 14,176 1,532 1,215 - 16,923 ------------- -------------- ------------- ------------ ----------- Total revenues 667,193 39,699 47,741 1,714 756,347 ------------- -------------- ------------- ------------ ----------- EXPENSES: Property operating 103,522 7,264 8,319 - 119,105 Depreciation and amortization 113,437 - - 20,875(b) 134,312 Real estate taxes 51,679 4,170 3,412 - 59,261 Maintenance and repairs 39,815 3,047 4,697 - 47,559 General and administrative 30,395 - - - 30,395 Other 11,489 - - - 11,489 ------------- -------------- ------------- ------------ ----------- Total expenses 350,337 14,481 16,428 20,875 402,121 ------------- -------------- ------------- ------------ ----------- Income from operations 316,856 25,218 31,313 (19,161) 354,226 Interest income 2,485 - - - 2,485 Interest expense (153,322) - - (22,877)(c) (176,199) Loss on extinguishment of debt (167) - - - (167) Gain on sales of real estate assets 77,765 - - - 77,765 Equity in earnings of unconsolidated affiliates 4,941 - - - 4,941 Minority interest in earnings: Operating partnership (106,532) - - (8,345)(d) (114,877) Shopping center properties (2,758) - - - (2,758) ------------- -------------- ------------- ------------ ----------- Income before discontinued operations 139,268 25,218 31,313 (50,383) 145,416 Operating income of discontinued operations 829 - - - 829 Gain on discontinued operations 4,042 - - - 4,042 ------------- -------------- ------------- ------------ ----------- Net income 144,139 25,218 31,313 (50,383) 150,287 Preferred dividends (19,633) - - - (19,633) ------------- -------------- ------------- ------------ ----------- Net income available to common shareholders $ 124,506 $ 25,218 $ 31,313 $ (50,383) $ 130,654 ============= ============== ============= ============ =========== Basic per share data: Income before discontinued operations, net of preferred dividends $ 4.00 $ 4.20 Discontinued operations 0.16 0.16 ------------- ----------- Net income available to common shareholders $ 4.16 $ 4.36 ============= =========== Weighted average common shares outstanding 29,936 29,936 Diluted per share data: Income before discontinued operations, net of preferred dividends $ 3.84 $ 4.03 Discontinued operations 0.15 0.16 ------------- ----------- Net income available to common shareholders $ 3.99 $ 4.19 ============= =========== Weighted average common and potential dilutive common shares outstanding 31,193 31,193 (a) Reflects the amortization of acquired above- and below-market leases. epresents depreciation and amortization expense related to buildings and improvements, tenant improvements and in-place (b) Represents depreciation and amortization expense related to buildings and improvements, tenant improvements and in-place leases of the acquired properties. (c) Reflects interest expense on the $660,946 of debt assumed or borrowed (including debt premiums) in connection with the properties acquired during 2004, which had a weighted average effective interest rate of 3.41%. This amount includes the cash portion of the purchase price of each property acquired totaling $219,904, which is assumed to have been borrowed at the Company's borrowing rate under its lines of credit. (d) Reflects the allocation of earnings to the minority interest in the Operating Partnership as a result of the acquired properties.
15 CBL & Associates Properties, Inc. Pro Forma Consolidated Balance Sheet June 30, 2004 (Unaudited and in thousands, except share and per share amounts)
CBL Pro-forma CBL Historical Adjustments(a) Pro Forma ------------ ---------------- ------------- ASSETS Real estate assets: Land $ 604,904 $ 22,828 $ 627,732 Buildings and improvements 4,155,864 205,692 4,361,556 ------------ ---------------- ------------- 4,760,768 228,520 4,989,288 Less: accumulated depreciation (519,045) - (519,045) ------------ ---------------- ------------- 4,241,723 228,520 4,470,243 Real estate assets held for sale 67,811 - 67,811 Developments in progress 76,616 1,893 78,509 ------------ ---------------- ------------- Net investment in real estate 4,386,150 230,413 4,616,563 Cash and cash equivalents 30,042 - 30,042 Receivables: Tenant, net of allowance 35,800 - 35,800 Other 14,832 - 14,832 Mortgage notes receivable 27,555 - 27,555 Investment in unconsolidated affiliates 88,638 - 88,638 Other assets 85,030 8,476 93,506 ------------ ---------------- ------------- $ 4,668,047 $ 238,889 $ 4,906,936 ============ ================ ============= LIABILITIES AND SHAREHOLDERS' EQUITY Mortgage and other notes payable $ 3,092,963 $ 179,668 $ 3,272,631 Mortgage notes payable on real estate assets held for sale 2,472 - 2,472 Accounts payable and accrued liabilities 177,674 13,001 190,675 ------------ ---------------- ------------- Total liabilities 3,273,109 192,669 3,465,778 ------------ ---------------- ------------- Commitments and contingencies Minority interests 540,894 28,986 569,880 ------------ ---------------- ------------- Shareholders' equity: Preferred Stock, $.01 par value, 15,000,000 shares authorized: 8.75% Series B Cumulative Redeemable Preferred Stock, 2,000,000 shares outstanding 20 - 20 7.75% Series C Cumulative Redeemable Preferred Stock, 460,000 shares outstanding 5 - 5 Common Stock, $.01 par value, 95,000,000 shares authorized, 30,837,720 issued and outstanding 308 - 308 Additional paid-in capital 828,984 17,234 846,218 Deferred compensation (3,549) - (3,549) Retained earnings 28,276 - 28,276 ------------ ---------------- ------------- Total shareholders' equity 854,044 17,234 871,278 ------------ ---------------- ------------- $ 4,668,047 $ 238,889 $ 4,906,936 ============ ================ ============= (a) Represents the acquisition of Monroeville Mall and the allocation of the purchase price of Monroeville Mall to the assets acquired and liabilities assumed. The acquisition of the other properties acquired during the seven months ended July 31, 2004 and the allocation of the related purchase prices to the assets acquire and liabilities assumed is reflected in the CBL historical consolidated balance sheet since those acquisitions were completed prior to June 30, 2004.
16 Exhibit 23 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statements Nos. 33-73376, 333-04295, 333-41768, and 333-88914 on Form S-8 and Registration Statements Nos. 33-92218, 333-62830, 333-90395, 333-47041, 333-97831, 333-104882 and 333-108947 on Form S-3 of CBL & Associates Properties, Inc. of our reports dated July 9, 2004 and July 30, 2004 (which reports include explanatory paragraphs relating to the purpose of such financial statements) on the Statements of Certain Revenues and Certain Operating Expenses of Greenbrier Mall and Monroeville Mall, respectively, for the year ended December 31, 2003, appearing in this Current Report on Form 8-K of CBL & Associates Properties, Inc. dated September 2, 2004. /s/ DELOITTE & TOUCHE LLP Atlanta, Georgia September 2, 2004 -----END PRIVACY-ENHANCED MESSAGE-----