-----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, RDqBgecgb2ZX274SQN3nqs+r5WtawlRReooZ/7OUB+F7cNPNJII7rtlOtXLaTIk7 bGTx9U4BmmNgJdT98ZSajw== 0000910612-04-000140.txt : 20041105 0000910612-04-000140.hdr.sgml : 20041105 20041105154231 ACCESSION NUMBER: 0000910612-04-000140 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041104 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041105 DATE AS OF CHANGE: 20041105 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: 041122765 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 form8k.txt 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): November 4, 2004 CBL & ASSOCIATES PROPERTIES, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 1-12494 62-154718 (State or Other Jurisdiction of (Commission File (I.R.S. Employer Incorporation) Number) 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 Results of Operations and Financial Condition On November 4, 2004, CBL & Associates Properties, Inc. (the "Company") reported its results for the third quarter ended September 30, 2004. The Company's earnings release for the third quarter ended September 30, 2004 is attached as Exhibit 99.1. On November 5, 2004, the Company held a conference call to discuss the third quarter results. The transcript of the conference call is attached as Exhibit 99.2. The Company has posted to its website certain supplemental financial and operating information for the three months and nine months ended September 30, 2004, which is attached as Exhibit 99.3. Subsequent to the issuance of the earnings release on November 4, 2004, a reclassification was made to the consolidated balance sheet as of September 30, 2004. The consolidated balance sheet included in the supplemental financial and operating information attached as Exhibit 99.3 and posted on the Company's web site reflects this reclassification. The information in this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act 1933, except as shall be expressly set forth by specific reference in such filing. Item 9.01 Financial Statements and Exhibits (a) Financial Statements of Businesses Acquired Not applicable (b) Pro Forma Financial Information Not applicable (c) Exhibits Exhibit Number Description 99.1 Earnings Release - Third Quarter Ended September 30, 2004 99.2 Investor Conference Call Script - Third Quarter Ended September 30, 2004 99.3 Supplemental Financial and Operating Information - For The Three Months and Nine Months Ended September 30, 2004 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: November 5, 2004 EX-99 3 pressrelease.txt EXHIBIT 99.1 EARNINGS REALESE Exhibit 99.1 [CBL LETTERHEAD] Contact: Katie Knight Director, Investor Relations (423) 855-0001 CBL & ASSOCIATES PROPERTIES REPORTS THIRD QUARTER RESULTS o Increases 2004 FFO guidance to a range of $5.14 to $5.19 per share o Declares 12.1% increase in common dividend - third consecutive double-digit annual increase o Same center NOI improves by 4.1 % in the third quarter o Same store sales increase 4.0% year-to-date o FFO per share up 12.1% for the third quarter 2004 CHATTANOOGA, Tenn. (November 4, 2004) CBL & Associates Properties, Inc. (NYSE:CBL) announced results for the third quarter and nine months ended September 30, 2004. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure is located at the end of this release. Net income available to common shareholders was $19,764,000 in the third quarter 2004 compared with $20,225,000 in the third quarter 2003, representing a decline of 2.3%. Net income available to common shareholders per diluted share was $0.62 in the third quarter 2004 compared with $0.65 in the third quarter 2003, representing a decline of 4.6%. This decline is primarily attributable to an increase in depreciation expense in the third quarter of 2004, resulting from the acquisition of ten malls since September 30, 2003. Net income available to common shareholders increased 11.9% to $71,661,000 for the nine months ended September 30, 2004, from $64,023,000 for the nine months ended September 30, 2003. On a diluted per share basis, net income available to common shareholders for the nine months ended September 30, 2004, increased 9.7% to $2.26 compared with $2.06 in the prior-year period. Funds from operations (FFO) increased 14.3% to $75,235,000 for the third quarter of 2004 from $65,801,000 for the third quarter of 2003. FFO per share on a diluted, fully converted basis increased 12.1% to $1.30 for the third quarter of 2004 from $1.16 in the prior-year period. Gains on sales of outparcels on a per diluted, fully converted share basis were negligible in the third quarter 2004, compared with $0.01 for the third quarter 2003. Gains on sales of non-operating real estate for the third quarter of 2004 were $0.02 per diluted, fully converted share compared with none for the prior-year period. FFO increased 6.5% to $213,633,000 for the nine months ended September 30, 2004, from $200,504,000 for the nine months ended September 30, 2003. FFO per share increased 5.6% on a diluted, fully converted basis in the nine months ended September 30, 2004, to $3.74 from $3.54 per share in the prior-year period. Gains on sales of outparcels for the nine months ended September 30, 2004, were $0.04 per diluted, fully converted share compared with $0.08 for the prior-year period. Gains on sales of non-operating real estate for the nine months ended September 30, 2004, were $0.02 per diluted, fully converted share compared with none for the prior-year period. HIGHLIGHTS |X| Effective with the fourth quarter of 2004, the regular quarterly cash dividend for the Company's common stock will be increased 12.1% to $0.8125 per share from $0.725 per share. The increase represents an annualized dividend distribution of $3.25 per share and marks our third consecutive double-digit annual common dividend increase. |X| Total revenues increased 19.3% in the third quarter 2004 to $194,227,000 from $162,859,000 in the prior-year period. Revenues increased 11.2% in the nine months ended September 30, 2004, to $543,127,000 from $488,585,000 in the comparable period a year ago. Third quarter 2004 revenues include $701,000 in lease termination fees received from tenants compared with $528,000 in the -MORE- CBL Reports Third Quarter Results Page 2 November 4, 2004 prior-year period. Revenues for the nine months ended September 30, 2004, include $3,300,000 in lease termination fees compared with $2,094,000 in the prior-year period. |X| Same center net operating income for the portfolio improved in the third quarter of 2004 by 4.1% compared with a 1.1% increase for the prior-year period. Same center net operating income for the nine-month period ended September 30, 2004, increased by 1.9% compared with an increase of 2.0% for the prior year period. |X| Same-store sales for mall tenants of 10,000 square feet or less for stabilized malls as of September 30, 2004, increased 4.0% for those tenants who have reported year-to-date sales compared with 0.4% for the prior-year period. |X| The debt-to-total-market capitalization ratio as of September 30, 2004, was 48.2% based on the common stock closing price of $60.95 and a fully converted common stock share count of 56,850,502 as of the same date. The debt-to-total-market capitalization ratio as of September 30, 2003, was 46.9% based on the common stock closing price of $49.90 and a fully converted common stock share count of 55,433,565 as of the same date. |X| Variable rate debt of $862,830,016 represents 12.2% of the total market capitalization for the Company and 25.2% of the Company's total consolidated and unconsolidated debt. CBL's chairman and chief executive officer, Charles B. Lebovitz, said, "We noted earlier in the year that our active acquisition and development programs should position us for strong financial performance in the second half of this year. Despite the loss of revenue due to tenant bankruptcies, we have achieved better-than-expected NOI growth at our properties. Our disciplined acquisition strategy is yielding immediate accretion with additional upside potential going forward. Our development strategy has produced new projects and expansions of 2.1 million square feet currently under construction. The renovation of more than 15 malls since 2001 has enhanced our ability to attract more productive tenants. "We are pleased that our strong performance to date in 2004 and an optimistic outlook for 2005 have positioned us to declare a double-digit increase in our common dividend for the third consecutive year. We believe we have the right strategy to continue to create unique and accretive growth opportunities through our current development program, a growing pipeline of new developments and additional acquisition opportunities. We will continue to put these strategies to work for our shareholders in 2005 and beyond." PORTFOLIO OCCUPANCY*
September 30, ---------------------------------- 2004 2003 ------------- ------------- Portfolio occupancy: 92.4% 91.4% Mall portfolio 92.7% 91.7% Stabilized malls (64) 92.7% 92.1% Non-stabilized malls (3) 91.3% 80.2% Associated centers (26) 90.4% 91.8% Community centers (13) 93.2% 88.6% * Figures exclude the community centers that were contributed in Phases I & II of the Galileo joint venture transaction.
ACQUISITIONS On July 28, 2004, the Company acquired the 1,128,747-square-foot Monroeville Mall in the eastern Pittsburgh suburb of Monroeville, PA, from Turnberry Associates for total consideration of $231.6 million. The acquisition included the mall, a 229,588-square-foot associated center known as the Annex, and a 75,832-square-foot open-air expansion wing known as the Village. For the nine months ended September 30, 2004, we have acquired a total of eight properties for an aggregate purchase price of $700.4 million. -MORE- CBL Reports Third Quarter Results Page 3 November 4, 2004 PROPERTY SALES In September 2004, the Company contributed Coastal Way - Phase III, the 22,200 square foot phase of the Coastal Way community center located in Spring Hill, FL, to its joint venture with Galileo America and recognized a gain of $1.3 million, which is included in third quarter 2004 FFO. In addition, Keystone Crossing, located in Tampa, FL, was sold for a gain of $325,000, which is reflected as a gain in discontinued operations. OUTLOOK AND GUIDANCE Based on today's outlook and the Company's third quarter results, management has increased its projection for 2004 net operating income to a range of 2.0% to 2.5%. The Company now expects FFO for 2004 to be in the range of $5.14 to $5.19 per diluted, fully converted common share for the year compared with its previous projection in the range of $4.98 to $5.03 per diluted, fully converted common share. Our guidance does not include future expectations of gains to FFO resulting from outparcel sales, lease termination fees or acquisitions. The Company expects to issue its guidance for 2005 when it reports results for the fourth quarter in early February 2005.
Low High ----- ----- 2004 FFO guidance previously provided - July 29, 2004 $4.98 $5.03 Third quarter 2004 lease termination fees 0.01 0.01 Third quarter gain on sales of non-operating real estate 0.02 0.02 Contribution from increased NOI projection 0.05 0.05 Additional accretion from acquisitions and developments to date 0.08 0.08 ----- ----- Revised FFO guidance for 2004 $5.14 $5.19 ===== =====
Low High ----- ----- Expected diluted earnings per common share $3.03 $3.08 Adjust to fully converted shares from common shares (1.34) (1.37) ----- ----- Expected earnings per diluted, fully converted common share 1.69 1.71 Add: depreciation and amortization 2.54 2.54 Less: gains on sales of operating properties (0.43) (0.43) Add: minority interest in earnings of Operating Partnership 1.34 1.37 ----- ----- Expected FFO per diluted, fully converted common share $5.14 $5.19 ===== =====
INVESTOR CONFERENCE CALL AND SIMULCAST CBL & Associates Properties, Inc. will conduct a conference call at 10:00 am EST on November 5, 2004, to discuss the third quarter results. The number to call for this interactive teleconference is 913-981-5507. A seven-day replay of the conference call will be available by dialing 719-457-0820 and entering the passcode 593421. A transcript of the Company's prepared remarks will be furnished on a Form 8-K following the conference call. To receive the CBL & Associates Properties, Inc., third quarter earnings release and supplemental information please visit our website at www.cblproperties.com or contact Investor Relations at 423-490-8292. The Company will also provide an online Web simulcast and rebroadcast of its 2004 third quarter earnings release conference call. The live broadcast of CBL's quarterly conference call will be available online at the Company's Web site at www.cblproperties.com, as well as www.streetevents.com, www.fulldisclosure.com and www.vcall.com on November 5, 2004, beginning at 10:00 a.m. EST. The online replay will follow shortly after the call and continue through November 19, 2004. NON-GAAP FINANCIAL MEASURES Funds From Operations FFO is a widely used measure of the operating performance of real estate companies that supplements net income determined in accordance with generally accepted accounting principles ("GAAP"). The National Association of Real Estate Investment Trusts defines FFO as net income (computed in accordance with GAAP) excluding gains or losses on sales of operating properties, plus depreciation -MORE- CBL Reports Third Quarter Results Page 4 November 4, 2004 and amortization, and after adjustments for unconsolidated partnerships and joint ventures. The Company believes that FFO provides an additional indicator of the operating performance of the Company's properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets decline predictably over time. Since values of well-maintained real estate assets have historically risen or fallen with market conditions, the Company believes that FFO enhances investors' understanding of the Company's operating performance. FFO does not represent cash flow from operations as defined by accounting principles generally accepted in the United States, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income for purposes of evaluating the Company's operating performance or to cash flow as a measure of liquidity. Same-Center Net Operating Income Net operating income ("NOI") is a supplemental measure of the operating performance of the Company's shopping centers. The Company defines NOI as operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs). Similar to FFO, the Company computes NOI based on its pro rata share of both consolidated and unconsolidated properties. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's NOI may not be comparable to that of other companies. A reconciliation of same-center NOI to net income is located at the end of this earnings release. Since NOI includes only those revenues and expenses related to the continuing operations of its shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates and operating costs and the impact of those trends on the Company's results of operations. Pro Rata Share of Debt The Company presents debt based on its pro rata ownership share (including the Company's pro rata share of unconsolidated affiliates and excluding minority investors' share of consolidated properties) because it believes this provides investors a clearer understanding of the Company's total debt obligations which affect the Company's liquidity. A reconciliation of the Company's pro rata share of debt to the amount of debt on the Company's consolidated balance sheet is located at the end of this earnings release. CBL & Associates Properties, Inc. is one of the top five owners of shopping centers in North America and the largest owner of malls and shopping centers in the Southeast, ranked by GLA owned. CBL owns, holds interests in or manages 164 properties, including 67 enclosed regional malls. The properties are located in 27 states and total 69.4 million square feet including 2.0 million square feet of non-owned shopping centers managed for third parties. CBL has eight projects under construction totaling approximately 2.1 million square feet including one regional mall - Imperial Valley Mall in the Imperial Valley region of California, an open-air shopping center in Southaven (Memphis, TN), MS, three community centers and three expansions. In addition to its office in Chattanooga, TN, CBL has a regional office in Boston (Waltham), MA. Additional information can be found at www.cblproperties.com. 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" incorporated by reference therein, for a discussion of such risks and uncertainties. -MORE- CBL Reports Third Quarter Results Page 5 November 4, 2004 CBL & Associates Properties, Inc. Consolidated Statements of Operations (Unaudited; in thousands, except per share amounts)
Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ---------------------- 2004 2003 2004 2003 ----------- ---------- ---------- --------- REVENUES: Minimum rents $ 121,300 $ 105,987 $ 344,177 $ 312,757 Percentage rents 2,289 2,228 10,457 9,749 Other rents 2,084 1,623 7,326 5,413 Tenant reimbursements 60,183 48,208 158,989 145,980 Management, development and leasing fees 2,868 1,221 6,379 3,946 Other 5,503 3,592 15,799 10,740 ----------- ---------- ---------- --------- Total revenues 194,227 162,859 543,127 488,585 ----------- ---------- ---------- --------- EXPENSES: Property operating 31,702 24,361 85,813 76,347 Depreciation and amortization 38,023 28,286 103,754 82,065 Real estate taxes 15,486 13,087 42,787 39,762 Maintenance and repairs 11,337 9,606 31,825 29,708 General and administrative 8,280 7,228 24,505 20,225 Other 5,681 2,703 13,636 7,359 ----------- ---------- ---------- --------- Total expenses 110,509 85,271 302,320 255,466 ----------- ---------- ---------- --------- Income from operations 83,718 77,588 240,807 233,119 Interest income 836 639 2,422 1,805 Interest expense (46,042) (38,038) (129,274) (113,330) Loss on extinguishment of debt - - - (167) Gain on sales of real estate assets 1,522 837 26,302 4,933 Equity in earnings of unconsolidated affiliates 1,407 922 6,953 3,410 Minority interest in earnings: Operating partnership (16,624) (17,235) (59,498) (55,851) Shopping center properties (974) (597) (4,033) (2,011) ----------- ---------- ---------- --------- Income before discontinued operations 23,843 24,116 83,679 71,908 Operating income of discontinued operations 12 159 385 614 Gain on discontinued operations 325 633 845 3,568 ----------- ---------- ---------- --------- Net income 24,180 24,908 84,909 76,090 Preferred dividends (4,416) (4,683) (13,248) (12,067) ----------- ---------- ---------- --------- Net income available to common shareholders $ 19,764 $ 20,225 $ 71,661 $ 64,023 =========== ========== ========== ========= Basic per share data: Net income before discontinued operations, net of preferred divends $ 0.63 $ 0.65 $ 2.30 $ 2.00 Discontinued operations 0.01 0.02 0.04 0.14 ----------- ---------- ---------- --------- Net income available to common shareholders $ 0.64 $ 0.67 $ 2.34 $ 2.14 =========== ========== ========== ========= Weighted average common shares outstanding 30,770 30,022 30,565 29,879 Diluted per share data: Net income before discontinued operations, net of preferred divends $ 0.61 $ 0.62 $ 2.22 $ 1.93 Discontinued operations 0.01 0.03 0.04 0.13 ----------- ---------- ---------- --------- Net income available to common shareholders $ 0.62 $ 0.65 $ 2.26 $ 2.06 =========== ========== ========== ========= Weighted average common and potential dilutive common shares outstanding 31,983 31,301 31,777 31,070
-MORE- CBL Reports Third Quarter Results Page 6 November 4, 2004 The Company's calculation of FFO is as follows (in thousands, except per share data):
Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ------------------------ 2004 2003 2004 2003 --------- ---------- ----------- ---------- Net income available to common shareholders $ 19,764 $ 20,225 $ 71,661 $ 64,023 Add: Depreciation and amortization from consolidated properties 38,023 28,286 103,754 82,065 Depreciation and amortization from unconsolidated affiliates 1,862 982 4,605 3,001 Depreciation and amortization from discontinued operations 3 105 51 338 Minority interest in earnings of operating partnership 16,624 17,235 59,498 55,851 Less: Gain on disposal of operating real estate assets (200) - (23,765) - Minority investors' share of depreciation and amortization (302) (282) (899) (823) Gain on disposal of discontinued operations (325) (633) (845) (3,568) Depreciation and amortization of non-real estate assets (214) (117) (427) (383) --------- ---------- ----------- ---------- Funds from operations $ 75,235 $ 65,801 $ 213,633 $ 200,504 ========= ========== =========== ========== Funds from operations applicable to Company shareholders $ 40,876 $ 35,527 $ 75,735 $ 107,889 ========= ========== =========== ========== Basic per share data: Funds from operations $ 1.33 $ 1.18 $ 3.82 $ 3.61 ========= ========== =========== ========== Weighted average common shares outstanding with operating partnership units fully converted 56,624 55,605 55,949 55,528 Diluted per share data: Funds from operations $ 1.30 $ 1.16 $ 3.74 $ 3.54 ========= ========== =========== ========== Weighted average common and potential dilutive common shares outstanding with operating partnership units fully converted 57,837 56,884 57,161 56,719 SUPPLEMENTAL FFO INFORMATION: Lease termination fees $ 736 $ 528 $ 3,336 $ 2,101 Lease termination fees per share $ 0.01 $ 0.01 $ 0.06 $ 0.04 Straight-line rental income $ 965 $ 1,077 $ 2,207 $ 3,300 Straight-line rental income per share $ 0.02 $ 0.02 $ 0.04 $ 0.06 Gains on outparcel sales $ 42 $ 837 $ 2,078 $ 4,814 Gains on outparcel sales per share $ - $ 0.01 $ 0.04 $ 0.08 Amortization of above- and below-market leases $ 1,139 $ 17 $ 2,381 $ 82 Amortization of above- and below-market leases per share $ 0.02 $ - $ 0.04 $ - Amortization of debt premiums $ 1,584 $ - $ 3,720 $ - Amortization of debt premiums per share $ 0.03 $ - $ 0.07 $ - Gain on sales of non operating properties $ 1,313 $ - $ 1,313 $ - Gain on sales of non operating properties per share $ 0.02 $ - $ 0.02 $ -
-MORE- CBL Reports Third Quarter Results Page 7 November 4, 2004 Same-Center Net Operating Income (Dollars in thousands)
Three Months Ended Nine Months Ended September 30, September 30, --------------------- -------------------- 2004 2003 2004 2003 ---------- ---------- --------- ---------- Net income $ 24,180 $ 24,908 $ 84,909 $ 76,090 Adjustments: Depreciation and amortization 38,023 28,286 103,754 82,065 Depreciation and amortization from unconsolidated affiliates 1,862 982 4,605 3,001 Depreciation and amortization from discontinued operations 3 105 51 338 Minority investors' share of depreciation and amortization in shopping center properties (302) (282) (899) (823) Interest expense 46,042 38,038 129,274 113,330 Interest expense from unconsolidated affiliates 1,658 2,083 4,734 6,230 Interest expense from discontinued operations - 13 20 39 Minority investors' share of interest expense in shopping center properties (348) (363) (1,049) (1,088) Loss on extinguishment of debt - - - 167 Loss on extinguishment of debt in discontinued operations - - 53 - Abandoned projects expense 1,629 46 3,314 153 Gain on sales of real estate assets (1,522) (837) (26,302) (4,933) Gain on sales of real estate assets of unconsolidated affiliates - - (592) - Minority interest in earnings of Operating Partnership 16,624 17,235 59,498 55,851 Gain on discontinued operations (325) (633) (845) (3,568) ---------- ---------- --------- ---------- Operating Partnership's share of total NOI 127,524 109,581 360,525 326,852 General and administrative expenses 8,280 7,228 24,505 20,225 Management fees and non-property level revenues (3,567) (4,676) (11,067) (7,320) ---------- ---------- --------- ---------- Operating Partnership's share of property NOI 132,237 112,133 373,963 339,757 NOI of non-comparable centers (30,144) (14,083) (65,137) (36,666) ---------- ---------- --------- ---------- Total same center NOI $ 102,093 $ 98,050 $ 308,826 $303,091 ========== ========== ========= ========== Malls $ 92,061 $ 89,082 $ 278,139 $276,813 Associated centers 4,554 4,576 14,767 13,486 Community centers 3,321 2,539 7,807 7,222 Other 2,157 1,853 8,113 5,570 ---------- ---------- --------- ---------- Total same center NOI $ 102,093 $ 98,050 $ 308,826 $303,091 ========== ========== ========= ========== Percentage Change: Malls 3.3% 0.5% Associated centers -0.5% 9.5% Community centers 30.8% 8.1% Other 16.4% 45.7% ----------- ---------- Total same center NOI 4.1% 1.9% =========== ==========
-MORE- CBL Reports Third Quarter Results Page 8 November 4, 2004 Company's Share of Consolidated and Unconsolidated Debt (Dollars in thousands)
September 30, 2004 ----------------------------------------------------- Fixed Rate Variable Rate Total ------------------ --------------------------------- Consolidated debt $ 2,489,892 $ 804,656 $ 3,294,548 Minority investors' share of consolidated debt (53,144) - (53,144) Company's share of unconsolidated affiliates' debt 118,588 58,174 176,762 ------------------ ------------- ------------------ Company's share of consolidated and unconsolidated debt $ 2,555,336 $ 862,830 $ 3,418,166 ================== ============= ================== Weighted average interest rate 6.46% 2.83% 5.54% ================== ============= ==================
September 30, 2003 ----------------------------------------------------- Fixed Rate Variable Rate Total ------------------ ------------- ------------------ Consolidated debt $ 2,233,582 $ 384,634 $ 2,618,216 Minority investors' share of consolidated debt (19,720) - (19,720) Company's share of unconsolidated affiliates' debt 37,543 58,806 96,349 ------------------ ------------- ------------------ Company's share of consolidated and unconsolidated debt $ 2,251,405 $ 443,440 $ 2,694,845 ================== ============= ================== Weighted average interest rate 6.78% 2.33% 6.05% ================== ============= ==================
Debt-To-Total-Market Capitalization Ratio as of September 30, 2004 (In thousands, except stock price)
Shares Outstanding Stock Price (1) Value ------------------ ------------- ------------------ Common stock and operating partnership units 56,851 $ 60.95 $ 3,465,068 8.75% Series B Cumulative Redeemable Preferred Stock 2,000 $ 50.00 100,000 7.75% Series C Cumulative Redeemable Preferred Stock 460 $ 250.00 115,000 ------------------ Total market equity 3,680,068 Company's share of total debt 3,418,166 ------------------ Total market capitalization $ 7,098,234 ================== Debt-to-total-market capitalization ratio 48.2% ================== (1) Stock price for common stock and operating partnership units equals the closing price of the common stock on September 30, 2004. The stock price for the preferred stock represents the face value of each respective series of preferred stock.
Reconciliation of Shares and Operating Partnership Units Outstanding (In thousands)
Three Months Ended Nine Months Ended September 30, September 30, --------------------------------- --------------------------------- 2004: Basic Diluted Basic Diluted ------------- ------------------ ------------- ------------------ Weighted average shares - EPS 30,770 31,983 30,565 31,777 Weighted average operating partnership units 25,854 25,854 25,384 25,384 ------------- ------------------ ------------- ------------------ Weighted average shares- FFO 56,624 57,837 55,949 57,161 ============= ================== ============= ================== 2003: Weighted average shares - EPS 30,022 31,301 29,879 31,070 Weighted average operating partnership units 25,583 25,583 25,649 25,649 ------------- ------------------ ------------- ------------------ Weighted average shares- FFO 55,605 56,884 55,528 56,719 ============= ================== ============= ==================
Dividend Payout Ratio Three Months Ended Nine Months Ended September 30, September 30, --------------------------------- --------------------------------- 2004 2003 2004 2003 ------------- ------------------ ------------- ------------------ Dividend per share $ 0.725 $ 0.655 $ 2.175 $ 1.965 FFO per diluted, fully converted share $ 1.30 $ 1.16 $ 3.74 $ 3.54 ------------- ------------------ ------------- ------------------ Dividend payout ratio 55.8% 56.5% 58.2% 55.5% ============= ================== ============= ==================
-MORE- CBL Reports Third Quarter Results Page 9 November 4, 2004 Consolidated Balance Sheets (Preliminary and unaudited, in thousands)
September 30, December 31, 2004 2003 ------------- ------------- ASSETS Real estate assets: Land $ 626,550 $ 578,310 Buildings and improvements 4,389,275 3,678,074 ----------- ----------- 5,015,825 4,256,384 Less: accumulated depreciation (549,099) (467,614) ----------- ----------- 4,466,726 3,788,770 Real estate assets held for sale 67,610 64,354 Developments in progress 102,176 59,096 ----------- ----------- Net investment in real estate 4,636,512 3,912,220 Cash, restricted cash and cash equivalents 27,238 20,332 Cash in escrow - 78,476 Receivables: Tenant, net of allowance 37,232 42,165 Other 11,009 3,033 Mortgage notes receivable 35,116 36,169 Investment in unconsolidated affiliates 76,046 96,450 Other assets 94,783 75,465 ----------- ----------- $ 4,917,936 $ 4,264,310 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Mortgage and other notes payable $ 3,292,186 $ 2,709,348 Mortgage notes payable on real estate assets held for sale 2,362 28,754 Accounts payable and accrued liabilities 185,593 161,477 ----------- ----------- Total liabilities 3,480,141 2,899,579 ----------- ----------- Commitments and contingencies Minority interests 605,164 527,431 ----------- ----------- Shareholders' equity: Preferred stock, $.01 par value 25 25 Common stock, $.01 par value 312 303 Additional paid-in capital 810,171 817,613 Deferred compensation (3,295) (1,607) Retained earnings 25,418 20,966 ----------- ----------- Total shareholders' equity 832,631 837,300 ----------- ----------- $ 4,917,936 $ 4,264,310 =========== =========== The balance sheet above is preliminary as of the date of this report. Please refer to the Company's Quarterly Report on Form 10-Q when filed for a complete balance sheet as of September 30, 2004.
EX-99 4 conferencecall.txt EXHIBIT 99.2 CONFERENCE CALL Exhibit 99.2 Investor Conference Call Script - Third Quarter Ended September 30, 2004 CBL& ASSOCIATES PROPERTIES, INC. Conference Call, Third Quarter 2004 November 5, 2004 @ 10:00 AM EST Thank you and good morning. We appreciate your participation in today's conference call to discuss CBL's 2004 third quarter operating results. Joining me today is Stephen Lebovitz, the Company's President and Katie Knight, Director of Investor Relations who will begin by reading our Safe Harbor disclosure. Katie: This conference call 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 results, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. During our discussion today, references made to per share are based upon a fully diluted converted share. Also, references made to community centers are only those that are wholly owned by CBL & Associates Properties, Inc. We direct you 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 "Management's Discussion and Analysis of Financial Condition and Results of Operations" included therein for a discussion of such risks and uncertainties. A transcript of today's comments including the earnings release and additional supplemental schedules will be furnished to the SEC on Form 8-K and will be available on our website. Last night we posted the supplemental schedules on our website which can be found in the investor relations section, under financial reports. This call will also be available for replay on the Internet through a link on our website at cblproperties.com. This conference call is the property of CBL & Associates Properties, Inc. Any redistribution, retransmission or rebroadcast of this call without the express written consent of CBL is strictly prohibited. During this conference call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. A description of each non-GAAP measure and a reconciliation of each non-GAAP financial measure to the comparable GAAP financial measure will be included in the earnings release on the Form 8-K. Stephen's Comments: Thank you, Katie. This past quarter has been a strong one for CBL. We are pleased with the results of the quarter, particularly in light of our concerns earlier this year regarding the impact of retailer bankruptcies on our performance. Business results have been successful across the board including acquisition, development, leasing and operating performance. LEASING On the leasing front, the past three months have been spent aggressively addressing expiring leases, leasing up developments, and re-leasing the vacant space that occurred as a result of bankruptcies and store closings. We have made significant progress, as I will describe. During the quarter we entered into approximately 626,000 square feet of new and renewal leases, including approximately 192,000 square feet of new leases and 434,000 square feet of renewal leases. This compares with a total of 480,000 square feet of new and renewal leases completed in the third quarter of 2003. Leasing for both periods excludes results achieved in the community center portfolio contributed to the Galileo joint venture. For the 451,900 square feet of vacant space resulting from bankruptcies and store closures from June 30, 2003 through September 30, 2004, which accounted for $8.0 million in minimum annual rents, we have re-leased approximately 46% of the space and with increases in annual rent per square foot of over 5.6%. Occupancy for the portfolio, excluding properties contributed to the Galileo joint venture, was 92.4% at quarter-end, a 130 basis point increase from the previous quarter and 100 basis points above the prior year period. Notable lease-up in our three non-stabilized malls was a major contributor to our overall leasing success this quarter. Based on the leasing success achieved in the third quarter, we anticipate 2004 year-end occupancy will wind up near year-end 2003 with occupancy in the range of 94% to 95%. For the entire portfolio, leases in the third quarter were signed at 20.1% higher average base rent per square foot than average base rent per square foot on vacated space. For the quarter, leasing spreads for comparable space in the total portfolio were 1.9%, based on initial rents and 3.8% higher based on average rents. DEVELOPMENTS On the development side, we have commenced construction on several new developments, redevelopments and anchor and big box additions. Since the beginning of 2003, we have added or are in the process of adding over 25 big box and anchor retailers to more than one third of our existing mall portfolio. Our deal flow remains strong and we believe you will continue to see promising developments, expansions, redevelopments and renovations throughout our portfolio. During the quarter we announced plans for the expansion and renovation of Fayette Mall in Lexington, KY. Fayette is one of our premier super-regional malls with sales of approximately $500 per square foot. We are extremely excited about this development. Approximately 148,000 square feet will be added to Fayette Mall including the construction of a two-level 80,000 square foot Dick's Sporting Goods and the addition of approximately 53,000 square feet of mall shop space and two restaurants covering 15,500 square feet. The expansion is currently 83% pre-leased or committed. Construction has commenced on the expansion and the renovation is scheduled to begin in January with an anticipated completion date of October 2005. Renovation of Panama City Mall was completed this quarter. The multi-million dollar renovation included updates to lighting, flooring, signage and the food court, as well as other improvements. Two other malls are currently under renovation; Cherryvale Mall in Rockford, IL and Northwoods Mall in North Charleston, SC and both will be completed by the end of this month. Total renovation expenditures for all three malls, excluding deferred maintenance expense, will be approximately $23.0 million. We believe the periodic updating and renovation of our properties is an essential element in enhancing each mall's dominant position in the community and the consumer's shopping experience. We find considerable value in performing these renovations on a timely basis, and we believe that there is a noticeable difference in our portfolio compared with others that may not take such a proactive approach to maintaining and updating their malls. Newly constructed anchors were opened at two malls this quarter: a Rich's- Macy's at Arbor Place in Douglasville, GA and JCPenney at CherryVale Mall in Rockford, IL. In October we announced the opening of Dick's Sporting Goods at both East Towne Mall and West Towne Mall in Madison, WI and this month we opened a Dick's at The Lakes Mall in Muskegon, MI. We have begun construction on a Dick's at the associated center located adjacent to Westmoreland Mall in Greensburg, PA and anticipate opening this store in Spring 2005. These additions are just one more way in which CBL is able to enhance the portfolio. Providing an appealing retailer mix and expanded selection keeps consumers coming back to CBL malls. Construction of Southaven Towne Center, our 407,000 square foot open-air development in Southaven, MS is underway. The project is currently 94% leased or committed. We have announced a number of attractive retailers joining the development at Southaven, including Kirkland's, Lane Bryant, Pier One, Rack Room Shoes, Yankee Candle and others. These retailers will compliment the anchor stores, which include Dillard's JCPenney, Circuit City and Linens N Things. We believe this development will be extremely successful and will provide a shopping experience that is currently lacking in the South Memphis area. Another project we began in the third quarter is the redevelopment of Hamilton Corner, here in our hometown of Chattanooga, TN. Hamilton Corner is being redeveloped into a 68,000 square foot upscale, lifestyle shopping center to include such tenants as Ann Taylor Loft, Chico's, Coldwater Creek, J. Jill, Bombay Company and a Bonefish Grill Restaurant. We are pleased to bring these quality retailers to The Hamilton Place Mall area here in Chattanooga and believe the unique streetscape format will offer an alluring experience for local-area shoppers. In October we purchased land and commenced construction on a 156,000 square foot open-air shopping center in Chicopee, MA. Chicopee Marketplace is currently over 70% pre-leased or committed with the grand opening slated for August 2005. New additions to Chicopee's retail line-up include iParty, Sleepy's, Marshall's and Staples. These stores will join Wal-Mart and Home Depot. We also recently announced a new development in Royal Palm Beach, FL. The 225,000 square foot Cobblestone Village at Royal Palm Beach is anchored by a 185,000 square foot SuperTARGET and will feature an additional 40,000 square feet of small shop space. Target opened on October 14th and we plan to open the small shop space in early summer 2005. The small shop space is more than 70% leased or committed. Construction is progressing on the Village Shops, the 75,000 square foot open-air expansion at Monroeville Mall in Monroeville, PA. Tenants will include: Barnes & Noble, Ulta Cosmetics, National City Bank, and two restaurants, Wolfgang Puck's and Johnny Carino's. At Imperial Valley Mall, our 752,000 square foot 60/40 joint venture with MGHerring Group in Imperial Valley, CA, we added several new retailers to the line-up during the quarter, including: Anchor Blue, Baker's Shoes, Pacific Sunwear and Verizon Wireless. These new additions will join previously announced stores as well as our anchors, which include Dillard's, Sears, JCPenney and Robinsons-May. The development is currently over 74% leased or committed. We are on track for the March 9, 2005 grand opening and invite each of you to join us at the Grand Opening Celebration and Gala. Currently, we have approximately 2.1 million square feet under construction, excluding renovations. This represents a net total investment of approximately $161.4 million. We are enthusiastic about our development pipeline and the opportunities we are pursuing and look forward to bringing these and other projects on-line. RETAIL SALES Updating the status of our outlook on the current retail environment, we continue to see steady improvement in the market as well as in our own portfolio. Leasing has been strong and retailers are continuing to expand existing formats as well as develop new concepts. We are in discussion with retailers about adding their new stores and are eager for the possibility of locating some of these emerging concepts at our malls. We are constantly working with fresh new retailers that we believe will blend well with the already strong retail base of our malls. Although reports indicated a weaker than anticipated "back to school" season and sales were impacted from the hurricanes along the Florida and Gulf coasts, our stabilized mall portfolio showed strong sales growth. Sales per square foot for the nine-months ended September 30, 2004 in stores of 10,000 square feet and less that have reported increased 4.0% over the prior year period. Based on current reports from our malls, we anticipate a good holiday sales season. ACQUISITIONS This has been an extremely busy year for our acquisition team as they have reviewed a number of acquisition opportunities. Year-to-date, we have closed on over $700 million in accretive transactions at a favorable weighted average cap rate of 7.83%. These acquisitions represent six malls totaling 5.3 million square feet with average sales of $360 per square foot for 2003. Over the past 12-months, we have acquired ten malls totaling approximately 8.0 million square feet for a total investment of nearly $1 billion. Please note that our cap rates are based on income in-place. We do not, nor have we ever based our cap rates on forward 12-month or projected income. We continue to review a significant number of acquisition opportunities that fit within our investment criteria and anticipate making more announcements before year-end. I will now turn the call over to John Foy to discuss our financial results. John's Comments: FINANCIAL REVIEW Thank you, Stephen and good morning everyone. I will begin with a review of the financial highlights that occurred in the third quarter: On a diluted, fully converted basis, Funds From Operations per share for the third quarter was up 12.1% to $1.30 per share, compared with $1.16 per share for the third quarter of 2003. Approximately 88% of the growth in FFO this quarter was attributable to external sources resulting from the acquisition of eleven malls and three associated centers since the second quarter 2003, as well as contributions from Coastal Grand, our new mall in Myrtle Beach and other new developments. The remaining growth was attributable to increases in same center NOI. For the portfolio, same center NOI growth for the third quarter was 4.1% or $4.0 million. Major contributors to the growth in NOI this quarter were the occupancy gains over third quarter 2003 and contributions from specialty leasing, branding and sponsorship income and tenant reimbursements. Same center NOI in the mall portfolio grew 3.3% or $3.0 million, associated center NOI declined 0.5% or a loss of $22,000, community center NOI rose 30.8% or $800,000 and other NOI grew 16.4% or $304,000. The cost recovery ratio was 102.8% for the third quarter and we would anticipate the year to wind up in the high 90s. The following are some specifics of our financial results: 1. We received $0.01 per share of FFO from lease termination fees, flat from the prior year period. We do not include lease termination fees in our guidance. 2. Gains from the sale of non-operating real estate contributed $0.02 in the third quarter 2004 compared with none in the comparable period in 2003. 3. Outparcel sales contributed $42,000 to the quarter or less than a tenth of a penny. Outparcel sales contributed approximately $837,000 or $0.01 to the prior year period. We do not include outparcel sales in our guidance. 4. SFAS 141 and 142 - Amortization of debt premiums and above and below market leases, combined, added $0.05 per share to the third quarter 2004, compared with a negligible amount in the prior year period. 5. Management, development and leasing fees were up 135% in the third quarter 2004, primarily due to fees from Galileo, the American Express gift card program and guarantee fee income triggered by the refinancing of the Coastal Grand - Myrtle Beach construction loan with a long-term, fixed rate financing. 6. Other income increased by 53% or $1.9 million in the third quarter 2004, primarily due to increased income from our taxable REIT subsidiary. This was offset by an increase in the Other Expenses line item of $3.0 million in the third quarter 2004, primarily due to a $1.6 million write off for abandoned projects and increased expense from our taxable REIT subsidiary. 7. General and administrative expenses were up 14.6% or $1.0 million in the third quarter 2004, primarily due to increases in personnel expense. We have added 16 new employees in the past 12-months. As a percentage of revenue, G&A represented 4.3% of the total revenues in the quarter, compared with 4.4% and 4.5% for the prior period and second quarter, respectively. We believe that third quarter G&A approximates a good run rate for fourth quarter. DIVIDEND ANNOUNCEMENT Yesterday, we were pleased to announce a 12.1% increase in our quarterly common dividend beginning in the fourth quarter 2004 and representing an annual dividend of $3.25 per share. This increase marks our third consecutive year of a double-digit dividend increase. We are delighted to continue to extend our many years of dividend growth and look forward to a long future of increasing shareholder returns. Based on FFO per diluted, fully converted share and our common dividend distributions per share, our payout ratio was 55.8% for the quarter and 58.2% for the nine-months ended September 30, 2004. Our total debt-to-market capitalization as of September 30, 2004 was 48.2% compared with 49.4% as of June 30, 2004 and 46.9% as of September 30, 2003. Our floating rate debt accounted for 25% of the total consolidated and unconsolidated debt outstanding at September 30, 2004 and 12% of our total market capitalization at the close of the quarter. We work hard to maintain a conservative balance sheet, as we believe it is our job to maximize return on capital but not take a disproportionate amount of risk. We will continue with our strategy of always seeking out opportunities to replace short term, variable rate financing with longer-term, non-recourse, fixed rate financing. This quarter, we took the opportunity to replace a construction loan at Coastal Grand with 10-year fixed rate financing at a very favorable rate of 5.09% for the $100 million securitized portion of this loan. The interest coverage ratio as of September 30, 2004 was 2.73 times compared with 2.79 times as of September 30, 2003. The change in coverage was primarily the result of an increase in the debt level due to the acquisition of ten malls. CONCLUSION We view our impressive results, including the 12.0% FFO growth, 100 basis point increase in occupancy, 4.1% increase in same center NOI as well as other improving metrics, as a testament to the success of the quarter. We believe we are well positioned within an improving retail market to continue to achieve record results and we look forward to returning that success to our shareholders in the form of dividend increases. We continue to see acquisition opportunities available and anticipate adding to our portfolio in the coming years with properties that offer ample opportunity to increase value. Based on third quarter operating results and our expectations going forward, we have adjusted our 2004 FFO per share guidance to a range of $5.14 to $5.19 from a range of $4.98 to $5.03. Included in the guidance is our increased NOI expectation. We now anticipate NOI growth for the year will be within a range of 2.0% - 2.5%. This increased expectation contributes approximately $0.05 to the low and high end of our increased guidance. In addition, we have added approximately $0.08 to the low and high end of our guidance to account for additional accretion from completed acquisitions and developments, higher than expected tenant reimbursements and lower cost of capital. We intend to provide 2005 guidance in the fourth quarter earnings release. Please note, that we have added a section to page ten of our supplemental and will be posting the updated version to our website following the call. OUTLOOK 1. We are encouraged by the strong retail sales reports for October, particularly the gains posted by mall-based specialty apparel retailers such as The Limited, American Eagle and Abercrombie & Fitch. We expect to see retailers continue to look to broaden their sales by adding new stores and rolling out the new concepts they have announced. 2. Our development program is very active with 2.1 million square feet of projects under construction today and several future projects in the pipeline. We continue to follow our disciplined approach to new development by requiring that pre-leasing and investment return hurdles be met. 3. Our joint venture with Galileo continues to perform well and our partners in Australia are enjoying excellent success. 4. This month we completed our eleventh year as a public company. As indicated by our 12.1% dividend increase, we have a confident outlook for the coming year and look forward to continuing to grow FFO and our dividend and to generating superior results for our shareholders. We appreciate your continued support. Stephen and I would now be glad to answer any questions you may have. EX-99 5 supplemental.txt EXHIBIT 99.3 Exhibit 99.3 CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 Consolidated Statements of Operations (Unaudited; in thousands, except per share amounts)
Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ---------------------- 2004 2003 2004 2003 ----------- ---------- ---------- --------- REVENUES: Minimum rents $ 121,300 $ 105,987 $ 344,177 $ 312,757 Percentage rents 2,289 2,228 10,457 9,749 Other rents 2,084 1,623 7,326 5,413 Tenant reimbursements 60,183 48,208 158,989 145,980 Management, development and leasing fees 2,868 1,221 6,379 3,946 Other 5,503 3,592 15,799 10,740 ----------- ---------- ---------- --------- Total revenues 194,227 162,859 543,127 488,585 ----------- ---------- ---------- --------- EXPENSES: Property operating 31,702 24,361 85,813 76,347 Depreciation and amortization 38,023 28,286 103,754 82,065 Real estate taxes 15,486 13,087 42,787 39,762 Maintenance and repairs 11,337 9,606 31,825 29,708 General and administrative 8,280 7,228 24,505 20,225 Other 5,681 2,703 13,636 7,359 ----------- ---------- ---------- --------- Total expenses 110,509 85,271 302,320 255,466 ----------- ---------- ---------- --------- Income from operations 83,718 77,588 240,807 233,119 Interest income 836 639 2,422 1,805 Interest expense (46,042) (38,038) (129,274) (113,330) Loss on extinguishment of debt - - - (167) Gain on sales of real estate assets 1,522 837 26,302 4,933 Equity in earnings of unconsolidated affiliates 1,407 922 6,953 3,410 Minority interest in earnings: Operating partnership (16,624) (17,235) (59,498) (55,851) Shopping center properties (974) (597) (4,033) (2,011) ----------- ---------- ---------- --------- Income before discontinued operations 23,843 24,116 83,679 71,908 Operating income of discontinued operations 12 159 385 614 Gain on discontinued operations 325 633 845 3,568 ----------- ---------- ---------- --------- Net income 24,180 24,908 84,909 76,090 Preferred dividends (4,416) (4,683) (13,248) (12,067) ----------- ---------- ---------- --------- Net income available to common shareholders $ 19,764 $ 20,225 $ 71,661 $ 64,023 =========== ========== ========== ========= Basic per share data: Net income before discontinued operations, net of preferred divends $ 0.63 $ 0.65 $ 2.30 $ 2.00 Discontinued operations 0.01 0.02 0.04 0.14 ----------- ---------- ---------- --------- Net income available to common shareholders $ 0.64 $ 0.67 $ 2.34 $ 2.14 =========== ========== ========== ========= Weighted average common shares outstanding 30,770 30,022 30,565 29,879 Diluted per share data: Net income before discontinued operations, net of preferred divends $ 0.61 $ 0.62 $ 2.22 $ 1.93 Discontinued operations 0.01 0.03 0.04 0.13 ----------- ---------- ---------- --------- Net income available to common shareholders $ 0.62 $ 0.65 $ 2.26 $ 2.06 =========== ========== ========== ========= Weighted average common and potential dilutive common shares outstanding 31,983 31,301 31,777 31,070
CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 The Company's calculation of FFO is as follows (in thousands, except per share data):
Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ------------------------ 2004 2003 2004 2003 --------- ---------- ----------- ---------- Net income available to common shareholders $ 19,764 $ 20,225 $ 71,661 $ 64,023 Add: Depreciation and amortization from consolidated properties 38,023 28,286 103,754 82,065 Depreciation and amortization from unconsolidated affiliates 1,862 982 4,605 3,001 Depreciation and amortization from discontinued operations 3 105 51 338 Minority interest in earnings of operating partnership 16,624 17,235 59,498 55,851 Less: Gain on disposal of operating real estate assets (200) - (23,765) - Minority investors' share of depreciation and amortization (302) (282) (899) (823) Gain on disposal of discontinued operations (325) (633) (845) (3,568) Depreciation and amortization of non-real estate assets (214) (117) (427) (383) --------- ---------- ----------- ---------- Funds from operations $ 75,235 $ 65,801 $ 213,633 $ 200,504 ========= ========== =========== ========== Funds from operations applicable to Company shareholders $ 40,876 $ 35,527 $ 75,735 $ 107,889 ========= ========== =========== ========== Basic per share data: Funds from operations $ 1.33 $ 1.18 $ 3.82 $ 3.61 ========= ========== =========== ========== Weighted average common shares outstanding with operating partnership units fully converted 56,624 55,605 55,949 55,528 Diluted per share data: Funds from operations $ 1.30 $ 1.16 $ 3.74 $ 3.54 ========= ========== =========== ========== Weighted average common and potential dilutive common shares outstanding with operating partnership units fully converted 57,837 56,884 57,161 56,719 SUPPLEMENTAL FFO INFORMATION: Lease termination fees $ 736 $ 528 $ 3,336 $ 2,101 Lease termination fees per share $ 0.01 $ 0.01 $ 0.06 $ 0.04 Straight-line rental income $ 965 $ 1,077 $ 2,207 $ 3,300 Straight-line rental income per share $ 0.02 $ 0.02 $ 0.04 $ 0.06 Gains on outparcel sales $ 42 $ 837 $ 2,078 $ 4,814 Gains on outparcel sales per share $ - $ 0.01 $ 0.04 $ 0.08 Amortization of above- and below-market leases $ 1,139 $ 17 $ 2,381 $ 82 Amortization of above- and below-market leases per share $ 0.02 $ - $ 0.04 $ - Amortization of debt premiums $ 1,584 $ - $ 3,720 $ - Amortization of debt premiums per share $ 0.03 $ - $ 0.07 $ - Gain on sales of non operating properties $ 1,313 $ - $ 1,313 $ - Gain on sales of non operating properties per share $ 0.02 $ - $ 0.02 $ -
-MORE- CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 Same-Center Net Operating Income (Dollars in thousands)
Three Months Ended Nine Months Ended September 30, September 30, --------------------- -------------------- 2004 2003 2004 2003 ---------- ---------- --------- ---------- Net income $ 24,180 $ 24,908 $ 84,909 $ 76,090 Adjustments: Depreciation and amortization 38,023 28,286 103,754 82,065 Depreciation and amortization from unconsolidated affiliates 1,862 982 4,605 3,001 Depreciation and amortization from discontinued operations 3 105 51 338 Minority investors' share of depreciation and amortization in shopping center properties (302) (282) (899) (823) Interest expense 46,042 38,038 129,274 113,330 Interest expense from unconsolidated affiliates 1,658 2,083 4,734 6,230 Interest expense from discontinued operations - 13 20 39 Minority investors' share of interest expense in shopping center properties (348) (363) (1,049) (1,088) Loss on extinguishment of debt - - - 167 Loss on extinguishment of debt in discontinued operations - - 53 - Abandoned projects expense 1,629 46 3,314 153 Gain on sales of real estate assets (1,522) (837) (26,302) (4,933) Gain on sales of real estate assets of unconsolidated affiliates - - (592) - Minority interest in earnings of Operating Partnership 16,624 17,235 59,498 55,851 Gain on discontinued operations (325) (633) (845) (3,568) ---------- ---------- --------- ---------- Operating Partnership's share of total NOI 127,524 109,581 360,525 326,852 General and administrative expenses 8,280 7,228 24,505 20,225 Management fees and non-property level revenues (3,567) (4,676) (11,067) (7,320) ---------- ---------- --------- ---------- Operating Partnership's share of property NOI 132,237 112,133 373,963 339,757 NOI of non-comparable centers (30,144) (14,083) (65,137) (36,666) ---------- ---------- --------- ---------- Total same center NOI $ 102,093 $ 98,050 $ 308,826 $303,091 ========== ========== ========= ========== Malls $ 92,061 $ 89,082 $ 278,139 $276,813 Associated centers 4,554 4,576 14,767 13,486 Community centers 3,321 2,539 7,807 7,222 Other 2,157 1,853 8,113 5,570 ---------- ---------- --------- ---------- Total same center NOI $ 102,093 $ 98,050 $ 308,826 $303,091 ========== ========== ========= ========== Percentage Change: Malls 3.3% 0.5% Associated centers -0.5% 9.5% Community centers 30.8% 8.1% Other 16.4% 45.7% ----------- ---------- Total same center NOI 4.1% 1.9% =========== ==========
CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 Company's Share of Consolidated and Unconsolidated Debt (Dollars in thousands)
September 30, 2004 ----------------------------------------------------- Fixed Rate Variable Rate Total ------------------ --------------------------------- Consolidated debt $ 2,489,892 $ 804,656 $ 3,294,548 Minority investors' share of consolidated debt (53,144) - (53,144) Company's share of unconsolidated affiliates' debt 118,588 58,174 176,762 ------------------ ------------- ------------------ Company's share of consolidated and unconsolidated debt $ 2,555,336 $ 862,830 $ 3,418,166 ================== ============= ================== Weighted average interest rate 6.46% 2.83% 5.54% ================== ============= ==================
September 30, 2003 ----------------------------------------------------- Fixed Rate Variable Rate Total ------------------ ------------- ------------------ Consolidated debt $ 2,233,582 $ 384,634 $ 2,618,216 Minority investors' share of consolidated debt (19,720) - (19,720) Company's share of unconsolidated affiliates' debt 37,543 58,806 96,349 ------------------ ------------- ------------------ Company's share of consolidated and unconsolidated debt $ 2,251,405 $ 443,440 $ 2,694,845 ================== ============= ================== Weighted average interest rate 6.78% 2.33% 6.05% ================== ============= ==================
Debt-To-Total-Market Capitalization Ratio as of September 30, 2004 (In thousands, except stock price) Shares Outstanding Stock Price (1) Value ------------------ ------------- ------------------ Common stock and operating partnership units 56,851 $ 60.95 $ 3,465,068 8.75% Series B Cumulative Redeemable Preferred Stock 2,000 $ 50.00 100,000 7.75% Series C Cumulative Redeemable Preferred Stock 460 $ 250.00 115,000 ------------------ Total market equity 3,680,068 Company's share of total debt 3,418,166 ------------------ Total market capitalization $ 7,098,234 ================== Debt-to-total-market capitalization ratio 48.2% ================== (1) Stock price for common stock and operating partnership units equals the closing price of the common stock on September 30, 2004. The stock price for the preferred stock represents the face value of each respective series of preferred stock.
Reconciliation of Shares and Operating Partnership Units Outstanding (In thousands)
Three Months Ended Nine Months Ended September 30, September 30, --------------------------------- --------------------------------- 2004: Basic Diluted Basic Diluted ------------- ------------------ ------------- ------------------ Weighted average shares - EPS 30,770 31,983 30,565 31,777 Weighted average operating partnership units 25,854 25,854 25,384 25,384 ------------- ------------------ ------------- ------------------ Weighted average shares- FFO 56,624 57,837 55,949 57,161 ============= ================== ============= ================== 2003: Weighted average shares - EPS 30,022 31,301 29,879 31,070 Weighted average operating partnership units 25,583 25,583 25,649 25,649 ------------- ------------------ ------------- ------------------ Weighted average shares- FFO 55,605 56,884 55,528 56,719 ============= ================== ============= ==================
Dividend Payout Ratio Three Months Ended Nine Months Ended September 30, September 30, --------------------------------- --------------------------------- 2004 2003 2004 2003 ------------- ------------------ ------------- ------------------ Dividend per share $ 0.725 $ 0.655 $ 2.175 $ 1.965 FFO per diluted, fully converted share $ 1.30 $ 1.16 $ 3.74 $ 3.54 ------------- ------------------ ------------- ------------------ Dividend payout ratio 55.8% 56.5% 58.2% 55.5% ============= ================== ============= ==================
CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 Consolidated Balance Sheets (Preliminary and unaudited, in thousands)
September 30, December 31, 2004 2003 ------------- ------------- ASSETS Real estate assets: Land $ 626,550 $ 578,310 Buildings and improvements 4,389,275 3,678,074 ----------- ----------- 5,015,825 4,256,384 Less: accumulated depreciation (549,099) (467,614) ----------- ----------- 4,466,726 3,788,770 Real estate assets held for sale 67,610 64,354 Developments in progress 102,176 59,096 ----------- ----------- Net investment in real estate 4,636,512 3,912,220 Cash, restricted cash and cash equivalents 27,238 20,332 Cash in escrow - 78,476 Receivables: Tenant, net of allowance 37,232 42,165 Other 11,009 3,033 Mortgage notes receivable 35,116 36,169 Investment in unconsolidated affiliates 76,046 96,450 Other assets 94,783 75,465 ----------- ----------- $ 4,917,936 $ 4,264,310 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Mortgage and other notes payable $ 3,292,186 $ 2,709,348 Mortgage notes payable on real estate assets held for sale 2,362 28,754 Accounts payable and accrued liabilities 185,593 161,477 ----------- ----------- Total liabilities 3,480,141 2,899,579 ----------- ----------- Commitments and contingencies Minority interests 561,513 527,431 ----------- ----------- Shareholders' equity: Preferred stock, $.01 par value 25 25 Common stock, $.01 par value 312 303 Additional paid-in capital 853,822 817,613 Deferred compensation (3,295) (1,607) Retained earnings 25,418 20,966 ----------- ----------- Total shareholders' equity 876,282 837,300 ----------- ----------- $ 4,917,936 $ 4,264,310 =========== =========== The balance sheet above is preliminary as of the date of this report. Please refer to the Company's Quarterly Report on Form 10-Q when filed for a complete balance sheet as of September 30, 2004.
CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 Ratio of EBITDA to Interest Expense (Dollars in thousands)
Three Months Ended Nine Months Ended September 30, September 30, ------------------- ----------------- 2004 2003 2004 2003 -------- --------- -------- --------- EBITDA: Net Income $ 24,180 $ 24,908 $ 84,909 $ 76,090 Adjustments: Depreciation and amortization 38,023 28,286 103,754 82,065 Depreciation and amortization from unconsolidated affiliates 1,862 982 4,605 3,001 Depreciation and amortization from discontinued operations 3 105 51 338 Minority investors' share of depreciation and amortization in shopping center properties (302) (282) (899) (823) Interest expense 46,042 38,038 129,274 113,330 Interest expense from unconsolidated affiliates 1,658 2,083 4,734 6,230 Interest expense from discontinued operations - 13 20 39 Minority investors' share of interest expense in shopping center properties (348) (363) (1,049) (1,088) Income taxes 307 375 1,573 1,914 Loss on extinguishment of debt - - - 167 Abandoned projects expense 1,629 46 3,314 153 Gain on sales of operating real estate assets (200) - (23,765) - Minority interest in earnings of Operating Partnership 16,624 17,235 59,498 55,851 Gain on discontinued operations (325) (633) (845) (3,568) -------- --------- -------- --------- Company's share of total EBITDA $129,153 $110,793 $365,17 $333,699 ======== ========= ======== ========= Interest Expense: Interest expense $ 46,042 $ 38,038 $ 129,27 $113,330 Interest expense from discontinued operations - 13 20 39 Interest expense from unconsolidated affiliates 1,658 2,083 4,734 6,230 Minority investors' share of interest expense in shopping center properties (348) (363) (1,049) (1,088) -------- --------- -------- --------- Company's share of total interest expense $ 47,352 $ 39,771 $132,97 $118,511 ======== ========= ======== ========= Ratio of EBITDA to Interest Expense 2.73 2.79 2.75 2.82 ======== ========= ======== =========
Reconciliation of EBITDA to Cash Flows Provided By Operating Activities (In thousands)
Three Months Ended Nine Months Ended September 30, September 30, ------------------- ----------------- 2004 2003 2004 2003 -------- --------- -------- --------- Company's share of total EBITDA $129,153 $110,793 $365,17 $333,699 Interest expense (46,042) (38,038) (129,274) (113,330) Minority interest's share of interest expense 348 363 1,049 1,088 Income taxes (307) (375) (1,573) (1,914) Amortization of deferred financing costs and non real estate depreciation included in operating expense 1,855 1,125 5,273 3,480 Amortization of debt premiums (1,544) - (3,601) - Amortization of above and below market leases (1,104) 17 (2,275) (82) Depreciation and interest expense from unconsolidated affiliates (3,520) (3,065) (9,339) (9,231) Minority investors' share of depreciation and amortiztion in shopping center properties 302 282 899 823 Minority interest in earnings - shopping center properties 974 597 4,033 2,011 Gains on outparcel sales (1,322) (837) (2,848) (4,943) Issuances of stock under incentive plan 154 414 1,422 1,617 Amortization of deferred compensation 197 93 456 155 Accrual of deferred compensation 112 92 342 269 Changes in operating assets and liabilities 13,715 (1,228) 13,136 (18,421) -------- --------- -------- --------- Cash flows provided by operating activities $ 92,971 $ 70,233 $242,87 $195,221 ======== ========= ======== =========
CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 Schedule of Mortgage and Other Notes Payable as of September 30, 2004 (Dollars In thousands )
Maturity Interest Balance Balance ---------------------------- Property Location Date Rate 9/30/2004 Fixed Variable - ------------------------------------------------------------------------------------------------------------------------ Cincinnati, OH Eastgate Mall Dec-04 2.750% $ 41,125 $ - $ 41,125 Lexington KY Fayette Mall Development Dec-04 3.440% 8,550 - 8,550 Brookfield, IL Brookfield Square May-05 7.498% 70,317 70,317 - Midland MI Midland Mall Jun-05 2.813% 30,000 - 30,000 Hattiesburg, MS Turtle Creek Mall Mar-06 7.400% 30,571 30,571 - Chesapeake, VA Greenbrier Mall Apr-06 2.750% 92,650 - 92,650 Akron, OH Chapel Hill Mall May-06 2.840% 64,000 - 64,000 Akron, OH Chapel Hill Surburban May-06 2.670% 2,500 - 2,500 Rockford, IL Cherryvale Mall Jul-06 7.375% 44,858 44,858 - Lynchburg, VA River Ridge Mall Jan-07 4.000% 21,957 21,957 - Madison, WI East Towne Mall Jan-07 8.010% 27,318 27,318 - Madison, WI West Towne Mall Jan-07 8.010% 42,234 42,234 - Chattanooga, TN Hamilton Place Mar-07 7.000% 64,082 64,082 - Cincinnati, OH Eastgate Crossing Apr-07 6.380% 10,245 10,245 - Charleston, SC Citadel Mall May-07 7.390% 31,141 31,141 - Dalton, GA Walnut Square Feb-08 10.125% 405 405 - Highpoint, NC Oak Hollow Mall Feb-08 7.310% 44,933 44,933 - Winston-Salem NC Hanes Mall Jul-08 7.310% 109,537 109,537 - Nashville, TN Hickory Hollow Mall Aug-08 6.770% 88,307 88,307 - Nashville, TN Courtyard At Hickory Hollow Aug-08 6.770% 4,111 4,111 - Nashville, TN Rivergate Mall Aug-08 6.770% 71,369 71,369 - Nashville, TN Village At Rivergate Aug-08 6.770% 3,371 3,371 - Lansing MI Meridian Mall Oct-08 4.520% 93,879 93,879 - Cary , NC Cary Towne Center Mar-09 6.850% 87,522 87,522 - Fairview Heights, IL St. Claire Square Apr-09 7.000% 67,708 67,708 - Daytona Beach, FL Volusia Mall Apr-09 4.750% 54,510 54,510 - Terre Haute, IN Honey Creek Mall Apr-09 4.750% 32,834 32,834 - Meridian, MS Bonita Lakes Mall Oct-09 6.820% 26,679 26,679 - Meridian, MS Bonita Lakes Crossing Oct-09 6.820% 8,359 8,359 - Little Rock, AR Park Plaza Mall May-10 4.900% 41,232 41,232 - Spartanburg, SC Westgate Crossing Jul-10 8.420% 9,599 9,599 - Burnsville, MN Burnsville Center Aug-10 8.000% 69,978 69,978 - Roanoke, VA Valley View Mall Sep-10 5.100% 44,532 44,532 - Nashville, TN Coolsprings Galleria Sep-10 8.290% 59,069 59,069 - Beaumont, TX Parkdale Mall Oct-10 5.010% 55,826 55,826 - Beaumont, TX Parkdale Crossing Oct-10 5.010% 8,815 8,815 - Stroud, PA Stroud Mall Dec-10 8.420% 31,619 31,619 - Wausau WI Wausau Center Dec-10 6.700% 13,371 13,371 - York, PA York Galleria Dec-10 8.340% 50,562 50,562 - Lexington KY Fayette Mall Jul-11 7.000% 94,594 94,594 - Chattanooga, TN Hamilton Corner Aug-11 10.125% 2,334 2,334 - Asheville, NC Asheville Mall Sep-11 6.980% 68,909 68,909 - Portland, ME BJ'S Plaza Dec-11 10.400% 2,417 2,417 - Ft Smith, AR Massard Crossing Feb-12 7.540% 5,867 5,867 - Houston, TX Willowbrook Plaza Feb-12 7.540% 30,018 30,018 - Vicksburg, MS Pemberton Plaza Feb-12 7.540% 2,004 2,004 - Fayetteville, NC Cross Creek Mall Apr-12 5.000% 63,567 63,567 - Colonial Heights, VA Southpark Mall May-12 5.100% 37,540 37,540 - Asheboro, NC Randolph Mall Jul-12 6.500% 15,116 15,116 - Douglasville, GA Arbor Place Mall Jul-12 6.510% 78,475 78,475 - Douglasville, GA The Landing At Arbor Place Jul-12 6.510% 8,858 8,858 - Jackson, TN Old Hickory Mall Jul-12 6.510% 34,664 34,664 - Louisville, KY Jefferson Mall Jul-12 6.510% 43,715 43,715 - N Charleston SC Northwoods Mall Jul-12 6.510% 62,587 62,587 - Racine, WI Regency Mall Jul-12 6.510% 34,278 34,278 - Saginaw, MI Fashion Square Jul-12 6.510% 60,084 60,084 - Spartanburg, SC Westgate Mall Jul-12 6.500% 54,303 54,303 - Chattanooga, TN CBL Center Aug-12 6.250% 14,621 14,621 - Panama City, FL Panama City Mall Aug-12 7.300% 39,845 39,845 - Monroeville, PA Monroeville Mall Jan-13 5.300% 133,373 133,373 - Greensburg PA Westmoreland Mall Jan-13 5.050% 82,357 82,357 - Morristown, TN College Square Sep-13 6.750% 11,615 11,615 - Columbia, SC Columbia Mall Oct-13 5.450% 33,347 33,347 - Janesville WI Janesville Mall Apr-16 8.375% 13,743 13,743 - ----------- ---------- ---------- 2,687,906 2,449,081 238,825 ----------- ---------- ---------- Weighted average interest rate 6.19% 6.52% 2.81% Debt Premiums Lynchburg, VA River Ridge Mall Jan-07 4.000% 1,916 1,916 - Daytona Beach, FL Volusia Mall Apr-09 4.750% 4,187 4,187 - Terre Haute, IN Honey Creek Mall Apr-09 4.750% 2,904 2,904 - Little Rock, AR Park Plaza Mall May-10 4.900% 7,505 7,505 - Roanoke, VA Valley View Mall Sep-10 5.100% 7,763 7,763 - Fayetteville, NC Cross Creek Mall Apr-12 5.000% 9,161 9,161 - Colonial Heights, VA Southpark Mall May-12 5.100% 4,172 4,172 - Monroeville, PA Monroeville Mall Jan-13 5.300% 3,203 3,203 - ----------- ----------- ---------- 40,811 40,811 - ----------- ----------- ---------- Weighted average interest rate 4.95% 4.95% - SUBTOTAL 2,728,717 2,489,892 238,825 ----------- ----------- ---------- Weighted average interest rate 6.17% 6.49% 2.81% CONSTRUCTION LOAN Southaven MS Southaven Towne Center Jun-07 3.270% 11,031 - 11,031 ----------- ----------- ---------- SUBTOTAL 11,031 - 11,031 LINES OF CREDIT 2.767% 554,800 - 554,800 ----------- ----------- ---------- TOTAL BALANCE SHEET $ 3,294,548 $ 2,489,892 $ 804,656 Weighted average interest rate 5.59% 6.49% 2.79% Plus CBL Share Of Unconsolidated Affiliates Huntsville, AL Parkway Place Dec-04 3.125% 28,778 - 28,778 Myrtle Beach, SC Coastal Grand - Myrtle Beach May-06 5.090% 59,000 59,000 - El Centro, CA Imperial Valley Mall Dec-06 3.496% 24,396 - 24,396 Paducah, KY Kentucky Oaks Jun-07 9.000% 15,874 15,874 - Del Rio, TX Plaza Del Sol Aug-10 9.150% 1,834 1,834 - Clarksville, TN Governors Square Sep-16 8.230% 16,146 16,146 - Galileo America LLC Portfolio various 5.077% 30,734 25,734 5,000 ----------- ----------- ---------- 176,762 118,588 58,174 ----------- ----------- ---------- Less Minority Interests' Share Minority Interest Chattanooga, TN CBL Center 8.0000% 6.2500% (1,170) (1,170) - Chattanooga, TN Hamilton Corner 10.0000% 10.1250% (233) (233) - Chattanooga, TN Hamilton Place 10.0000% 7.0000% (6,408) (6,408) - Ft Smith AR Massard Crossing 10.0000% 7.5400% (5,280) (5,280) - Highpoint, NC Oak Hollow Mall 25.0000% 7.3100% (11,233) (11,233) - Houston, TX Willowbrook Plaza 25.0000% 7.5400% (27,016) (27,016) - Vicksburg, MS Pemberton Plaza 25.0000% 7.5400% (1,804) (1,804) - ------------ ------------ --------- (53,144) (53,144) - ------------ ------------ --------- TOTAL OBLIGATIONS $ 3,418,166 $ 2,555,336 $ 862,830 ============ ============ ========= Weighted average interest rate 5.54% 6.46% 2.83% Total Debt of Unconsolidated Affiliates Huntsville, AL Parkway Place Dec-04 2.780% 57,556 - 57,556 Myrtle Beach, SC Coastal Grand - Myrtle Beach May-06 5.090% 118,000 118,000 - El Centro, CA Imperial Valley Mall Dec-06 2.840% 24,396 - 24,396 Paducah, KY Kentucky Oaks Jun-07 9.000% 31,748 31,748 - Del Rio, TX Plaza Del Sol Aug-10 9.150% 3,624 3,624 - Clarksville, TN Governors Square Sep-16 8.230% 33,992 33,992 - Galileo America LLC Portfolio various 5.074% 307,341 257,341 50,000 ----------- ---------- ---------- $ 576,659 $ 444,706 $ 131,952 =========== ========== ========== Weighted average interest rate 5.18% 5.63% 3.66%
CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 Comparable New and Renewal Leasing Activity as of September 30, 2004
New New Square Prior PSF PSF Base % Change PSF Base % Change Property Type Feet Base Rent Rent - Initial Initial Rent - Average Average - ------------------- ------------ ------------- ------------- ------------- ------------- ---------- Quarter: Stabilized malls 515,982 $ 25.22 $ 25.70 1.9% $ 26.19 3.8% Associated centers 17,336 12.20 12.07 -1.1% 12.17 -0.2% Community centers 9,600 9.80 10.83 10.5% 10.83 10.5% TOTAL 542,918 $ 24.53 $ 25.00 1.9% $ 25.47 3.8% Year To Date: Stabilized malls 1,514,477 $ 24.98 $ 25.51 2.1% $ 26.03 4.2% Associated centers 27,816 13.08 13.10 0.2% 13.18 0.8% Community centers 23,200 9.67 11.18 15.6% 11.28 16.6% TOTAL 1,565,493 $ 24.54 $ 25.08 2.2% $ 25.58 4.2%
Comparable Stabilized Mall Leasing Activity as of September 30, 2004
New New Square Prior PSF PSF Base % Change PSF Base % Change Stabilized Malls Feet Base Rent Rent - Initial Initial Rent - Average Average - ------------------- ------------ ------------- ------------- ------------- ------------- ---------- Quarter: New leases 136,120 $ 27.98 $ 29.05 3.8% $ 30.12 7.6% Renewal leases 379,862 24.24 24.50 1.1% 24.78 2.2% TOTAL 515,982 $ 25.22 $ 25.70 1.9% $ 26.19 3.8% Year To Date: New leases 521,319 $ 26.07 $ 28.68 10.0% $ 29.74 14.1% Renewal leases 993,158 24.40 23.84 -2.3% 24.09 -1.3% TOTAL 1,514,477 $ 24.98 $ 25.51 2.1% $ 26.03 4.2%
Total Leasing Activity for Comparable and Noncomparable space Compared to Tenants Vacating as of September 30, 2004
Leased Vacated % Change Leased Average Base Vacated Average Base Average Base Property Type Sq. Ft. Rent PSF Sq. Ft. Rent PSF Rent PSF - ------------------- ------------ ------------- ------------- ------------- ------------- Quarter: Malls 557,806 $ 27.01 184,601 $ 21.47 25.77% Associated centers 42,336 11.43 8,695 21.48 -46.76% Community centers 26,050 8.87 8,610 10.12 -12.39% TOTAL 626,192 $ 25.20 201,906 $ 20.99 20.05% Year To Date: Malls 1,708,041 $ 26.50 904,118 $ 21.65 22.43% Associated centers 89,800 13.09 37,194 17.00 -23.04% Community centers 44,891 9.13 17,160 9.26 -1.42% TOTAL 1,842,732 $ 25.42 958,472 $ 21.24 19.68%
Average Annual Base Rents Per Square Foot By Property Type
September 30, ------------------------------ 2004 2003 --------------- ------------- Stabalized malls $ 25.19 $ 24.76 non-stabalized malls 26.62 26.48 Associated centers 9.56 9.77 Community centers (1) 7.98 8.19 (1) Excludes community centers that were sold in Phases 1 & 2 of the Galileo transaction
CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 Capital Expenditures for Three Months and Nine Months Ended September 30, 2004 (In thousands)
Three Months Nine Months ---------------------------- Tenant allowances $ 13,387 $ 26,933 ------------- ------------ Renovations 6,507 19,697 ------------- ------------ Deferred maintenance: * Parking lot and parking lot lighting 2,401 4,005 Roof repairs and replacements 950 2,440 Other capital expenditures 1,049 5,339 ------------- ------------ Total deferred maintenancee expenditures 4,400 11,784 ------------- ------------ Total capital expenditures $ 24,294 $ 58,414 ============= ============ *The capital expenditures incurred for maintenance such as parking lot repairs, parking lot lighting and roofs are classified as deferred maintenance expenditures. These expenditures are billed to tenants as common area maintenance expense and the majority is recovered over a five to fifteen year period. Renovation capital expenditures are for remodelings and upgrades for enhancing our competitive position in the market area. A portion of these expenditures covering items such as new floor coverings, painting, lighting and new seating areas are also recovered through tenant billings. The costs of other items such as new entrances, new ceilings and skylights are not recovered from tenants. We estimate that 30% of our renovation expenditures are recoverable from our tenants over a ten to fifteen year period. The third category of capital expenditures is tenant allowances, sometimes made to third-generation tenants. Tenant allowances are recovered through minimum rents from the tenants over the term of the lease.
Deferred Leasing Costs Capitalized (In thousands)
2004 2003 ------------- ------------ Quarter ended: March 31, $ 492 $ 490 June 30, 242 333 September 30, 524 431 ------------- ------------ $ 1,258 $ 1,254 ============= ============
CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three Months and Nine Months Ended September 30, 2004 Properties Under Development at September 30, 2004 (Dollars in thousands)
Project CBL's Cost Cost Square or Share of Spent Opening Initial Property Location Feet Cost To Date Date Yield - --------------------------------- ---------------------- ------------ ------------ ---------- -------------- ------ New Mall Developments: Imperial Valley Mall El Centro, CA 752,000 $ 45,745 $ 29,795 March-05 10% (60/40 joint venture) Mall Expansions: The Lakes Mall Muskegon, MI 45,000 4,771 3,905 November-04 10% Fayette Mall Lexington, KY 148,000 23,738 1,120 October-05 11% West Towne Mall Madison, WI 138,000 21,100 11,446 October-04 8% East Towne Mall Madison, WI 115,000 20,473 15,850 October-04 7% Open Air Centers: Southaven Towne Center Southaven, MS 407,000 22,856 14,813 October-05 10% Associated Centers: CoolSprings Crossing - Tweeter's Nashville, TN 10,000 1,415 31 March-05 14% Monroeville Village Monroeville, PA 75,000 20,686 5,698 Nov-04/May-05 9% Hamilton Corner Chattanooga, TN 68,000 5,500 702 March-05 9% Community Centers: Charter Oak Marketplace Hartford, CT 334,000 12,819 10,781 November-04 10% Cobblestone Village at Royal Palm Royal Palm, FL 225,000 9,091 1,156 June-05 10% Chicopee Marketplace Chicopee, MA 156,000 19,551 612 August-05 10% ------------ ------------ ---------- 2,473,000 $ 207,745 $ 95,909 ============ ============ ==========
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