EX-99 3 exhibit991.htm EXHIBIT 99.1 - PRESS RELEASE

Exhibit 99.1

 

[CBL LETTERHEAD]

 

PRESS RELEASE

 

Investor Contact: Katie Reinsmidt, Director of Investor Relations, 423.490.8301, katie_reinsmidt@cblproperties.com

 

CBL & ASSOCIATES PROPERTIES REPORTS

SECOND QUARTER RESULTS

 

 

•

Same-center mall NOI increased 2.6% during the second quarter

 

•

FFO per share was $0.77 in the second quarter, excluding the preferred redemption charge

 

•

Same-store sales improved by 2.0% as of June 30, 2007

 

•

Total revenues increased 4.7% in the second quarter

 

•

Stabilized mall occupancy increased 80 basis points to 92.2% as of June 30, 2007

 

CHATTANOOGA, Tenn. (August 2, 2007) – CBL & Associates Properties, Inc. (NYSE:CBL) announced results for the second quarter ended June 30, 2007. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure is located at the end of this news release.

 

Net income available to common shareholders for the second quarter ended June 30, 2007, was $11,465,000, or $0.17 per diluted share, compared with $20,928,000, or $0.32 per diluted share, for the prior-year period. Net income available to common shareholders for the six months ended June 30, 2007, was $28,866,000, or $0.44 per diluted share, compared with $41,541,000, or $0.64 per diluted share, for the prior-year period.

 

The decline in net income available to common shareholders for the second quarter and six months ended June 30, 2007, was largely attributable to certain one-time and non-cash items totaling $6,611,000 and $7,026,000, respectively, after adjustment for minority interest. Additionally, net income available to common shareholders for the second quarter and six months ended June 30, 2007, was impacted by higher interest and depreciation expense partially offset by improvements in income from operations and gain on sale of real estate assets. An analysis of items having an impact on net income after adjustment for minority interest of the operating partnership is provided below.

 

 

•

Net income for the second quarter and six months ended June 30, 2006, included gains on sale from properties sold in second quarter 2006 of $4,061,000 and $4,027,000, respectively. There was a negligible gain related to the sold properties included in the current comparable periods.

 

 

•

Net income for the second quarter and six months ended June 30, 2007, was reduced by $2,016,000 for the write-off of direct issuance costs related to the redemption of the Company’s 8.75% Series B Perpetual Preferred Stock on June 28, 2007 (“preferred redemption charge”). There was no comparable charge in the prior-year periods.

 

 

•

Net income for the second quarter and six months ended June 30, 2007, was reduced by $534,000 and $985,000, respectively, for a non-cash income tax provision. There was not a comparable charge in the prior-year periods.

 

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CBL Reports Second Quarter Results

Page 2

August 2, 2007

 

Funds from operations (“FFO”) per share on a diluted, fully converted basis for the second quarter ended June 30, 2007, was $0.77, excluding the gross preferred redemption charge of $0.03 per diluted, fully converted share. FFO allocable to common shareholders including the preferred redemption charge was $48,380,000, or $0.74 per diluted, fully converted share, for the second quarter ended June 30, 2007, compared with $49,093,000, or $0.76 per diluted, fully converted share, for the prior-year period.

 

FFO per share on a diluted, fully converted basis for the six months ended June 30, 2007, was $1.55, excluding the gross preferred redemption charge of $0.03 per diluted, fully converted share. FFO allocable to common shareholders including the preferred redemption charge was $99,379,000, or $1.52 per diluted, fully converted share, for the six months ended June 30, 2007, compared with $101,677,000, or $1.58 per diluted, fully converted share, for the prior-year period.

 

FFO of the operating partnership for the second quarter 2007 was $85,948,000, compared with $88,535,000 for the prior-year period. FFO of the operating partnership for the six months ended June 30, 2007 was $176,705,000, compared with $185,102,000 for the prior-year period.

 

FFO for the second quarter and six months ended June 30, 2007, was also reduced by $948,000 and $1,751,000, respectively, for a non-cash income tax provision. There was not a comparable charge in the prior-year periods.

 

HIGHLIGHTS

 

 

•

Total revenues increased 4.7% in the second quarter of 2007 to $246,480,000 from $235,326,000 in the prior-year period. Total revenues increased 3.4% in the six months ended June 30, 2007 to $495,665,000 from $479,186,000 in the prior-year period.

 

 

•

Same-center net operating income (“NOI”) for the portfolio for the quarter and six months ended June 30, 2007, increased by 2.4% and declined 0.4%, respectively, compared with a 4.0% and 3.6% increase, respectively, for the prior-year periods. Excluding lease termination fees, same-center NOI for the portfolio for the quarter and six months ended June 30, 2007, increased 2.6% and 0.4%, respectively.

 

 

•

Same-store sales for mall tenants of 10,000 square feet or less for stabilized malls as of June 30, 2007, increased 2.0% compared with a 3.8% increase for the prior-year period. Sales for the rolling twelve months ended June 30, 2007, were $344 per square foot.

 

 

•

The debt-to-total-market capitalization ratio as of June 30, 2007, was 53.2% based on the common stock closing price of $36.05 and a fully converted common stock share count of 116,285,000 shares as of the same date. The debt-to-total-market capitalization ratio as of June 30, 2006, was 48.2% based on the common stock closing price of $38.93 and a fully converted common stock share count of 115,989,000 shares as of the same date.

 

 

•

Consolidated and unconsolidated variable rate debt of $921,604,000 represents 9.6% of the total market capitalization for the Company and 18.1% of the Company’s share of total consolidated and unconsolidated debt.

 

CBL’s Chairman and Chief Executive Officer, Charles B. Lebovitz, said, “An improving leasing effort and continued high demand for new space by retailers led to year-to-date double-digit growth in rental spreads and an 80 basis point increase in stabilized mall occupancy. The mood among retailers coming off the first half of the year – and confirmed by recent meetings at the ICSC Convention and CBL’s Connection Event – is very positive with expectations for a strong back-to-school season and growth plans that include new concepts and new locations. These

 

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CBL Reports Second Quarter Results

Page 3

August 2, 2007

 

trends, combined with ongoing investments in our properties, should provide a solid base for CBL to continue to build momentum in same-center NOI growth.

 

“As expected, our development and redevelopment program is enhancing and adding to the value of our existing portfolio. With two new open-air developments announced recently and a number of projects expected to open throughout the remainder of the year, we are as active as we have ever been on new developments. We continue to pursue additional development/redevelopment opportunities to complement the internal growth in our portfolio. We are optimistic that these endeavors will generate accelerated growth for our Company going forward.”

 

PORTFOLIO OCCUPANCY

 

 

 

June 30,

 

 

 

2007

 

2006

 

Portfolio occupancy

 

91.6

%

91.4

%

Mall portfolio

 

91.7

%

91.4

%

Stabilized malls

 

92.2

%

91.4

%

Non-stabilized malls

 

82.1

%

89.3

%

Associated centers

 

92.3

%

91.8

%

Community centers

 

82.7

%

88.5

%

 

OTHER SIGNIFICANT EVENTS

Today, the Company announced that its Board of Directors has authorized a common stock repurchase plan for the purchase of up to $100 million of common stock effective over the next twelve months. Any stock repurchases will be made from time to time through open market purchases.

 

During the second quarter, CBL exercised its option to redeem all 2,000,000 outstanding shares of its 8.75% Series B Cumulative Redeemable Preferred Stock at the par value of $50.00 per share plus accrued and unpaid dividends of $1.069444 per share. The redemption resulted in a gross charge to FFO and net income of approximately $3.6 million in the second quarter 2007 related to the write-off of direct issuance costs for the 8.75% Series B Cumulative Redeemable Preferred Stock.

 

DISPOSITIONS

During the second quarter, CBL entered into an agreement to sell Twin Peaks Mall in Longmont, CO. The 556,000 square foot regional mall will be sold for $33.6 million to Panattoni Development Company, LLC. Proceeds from the sale will be used to reduce outstanding borrowings on the Company’s lines of credit. The sale is expected to generate a gain of approximately $3.9 million that will be recognized in the third quarter 2007.

 

OUTLOOK AND GUIDANCE

Based on today’s outlook, the Company’s second quarter results, the preferred redemption charge, and the expected disposition of Twin Peaks Mall, the Company is revising guidance for 2007 FFO to the range of $3.37 to $3.47 per share. The full year guidance continues to assume same-center NOI growth in the range of 1.5% to 2.5% and excludes the impact of any future acquisitions. Specific factors impacting the guidance will be outlined in the Company’s conference call. The Company expects to update its annual guidance after each quarter’s results.

 

 

 

Low

 

High

 

Expected diluted earnings per common share

 

$

1.24

 

$

1.34

 

Adjust to fully converted shares from common shares

 

 

(0.54

)

 

(0.58

)

Expected earnings per diluted, fully converted common share

 

 

0.70

 

 

0.76

 

Add: depreciation and amortization

 

 

2.15

 

 

2.15

 

Less: gain on disposal of discontinued operations

 

 

(0.03

)

 

(0.03

)

Add: minority interest in earnings of Operating Partnership

 

 

0.55

 

 

0.59

 

Expected FFO per diluted, fully converted common share

 

$

3.37

 

$

3.47

 

 

-MORE-

CBL Reports Second Quarter Results

Page 4

August 2, 2007

 

INVESTOR CONFERENCE CALL AND SIMULCAST

CBL & Associates Properties, Inc. will conduct a conference call at 10:00 a.m. EDT on Friday, August 3, 2007, to discuss the second quarter results. The number to call for this interactive teleconference is 913-981-5546. A seven-day replay of the conference call will be available by dialing 719-457-0820 and entering the passcode 6017254. 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., second quarter earnings release and supplemental information please visit our website at cblproperties.com or contact Investor Relations at 423-490-8292.

 

The Company will also provide an online Web simulcast and rebroadcast of its 2007 second 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 cblproperties.com, as well as www.streetevents.com and www.earnings.com, on August 3, 2007, beginning at 10:00 a.m. EDT. The online replay will follow shortly after the call and continue through August 10, 2007.

 

CBL is one of the largest and most active owners and developers of malls and shopping centers in the country. CBL owns, holds interests in or manages 132 properties, including 80 regional malls/open-air centers. The properties are located in 27 states and total 75.2 million square feet including 2.2 million square feet of non-owned shopping centers managed for third parties. CBL currently has thirteen projects under construction totaling 1.8 million square feet including Pearland Town Center in Houston (Pearland), TX; CBL Center II in Chattanooga, TN; two lifestyle/associated centers, eight mall expansions/redevelopments, and one community center. Headquartered in Chattanooga, TN, CBL has regional offices in Boston (Waltham), MA, and Dallas, TX. Additional information can be found at cblproperties.com.

 

NON-GAAP FINANCIAL MEASURES

 

Funds From Operations

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

 

The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors’ understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company’s properties and interest rates, but also by its capital structure.

 

The Company presents both FFO of its operating partnership and FFO allocable to common shareholders, as it believes that both are useful performance measures. The Company believes FFO of its operating partnership is a useful performance measure since it conducts substantially all of its business through its operating partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the minority interest in the operating partnership. The Company believes FFO allocable to common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income available to common shareholders.

 

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CBL Reports Second Quarter Results

Page 5

August 2, 2007

 

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

 

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

 

Same-Center 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.

 

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 Second Quarter Results

Page 6

August 2, 2007

 

CBL & Associates Properties, Inc.

Consolidated Statements of Operations

(Unaudited; in thousands, except per share amounts)

 

 

 

Three Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

2007

 

2006

 

 

 

2007

 

2006

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum rents

 

$

155,046

 

$

148,447

 

 

 

$

309,409

 

$

299,566

 

Percentage rents

 

 

1,851

 

 

1,793

 

 

 

 

8,334

 

 

8,107

 

Other rents

 

 

3,947

 

 

3,544

 

 

 

 

8,362

 

 

7,397

 

Tenant reimbursements

 

 

74,992

 

 

74,292

 

 

 

 

152,715

 

 

149,934

 

Management, development and leasing fees

 

 

3,954

 

 

1,687

 

 

 

 

5,175

 

 

2,764

 

Other

 

 

6,690

 

 

5,563

 

 

 

 

11,670

 

 

11,418

 

Total revenues

 

 

246,480

 

 

235,326

 

 

 

 

495,665

 

 

479,186

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

38,850

 

 

36,607

 

 

 

 

81,917

 

 

76,949

 

Depreciation and amortization

 

 

60,530

 

 

54,241

 

 

 

 

117,174

 

 

108,404

 

Real estate taxes

 

 

19,864

 

 

20,364

 

 

 

 

40,512

 

 

39,450

 

Maintenance and repairs

 

 

14,011

 

 

13,436

 

 

 

 

29,312

 

 

26,001

 

General and administrative

 

 

10,570

 

 

9,062

 

 

 

 

20,767

 

 

18,649

 

Loss on impairment of real estate assets

 

 

—

 

 

274

 

 

 

 

—

 

 

274

 

Other

 

 

4,802

 

 

4,520

 

 

 

 

8,441

 

 

8,688

 

Total expenses

 

 

148,627

 

 

138,504

 

 

 

 

298,123

 

 

278,415

 

Income from operations

 

 

97,853

 

 

96,822

 

 

 

 

197,542

 

 

200,771

 

Interest and other income

 

 

2,883

 

 

1,946

 

 

 

 

5,628

 

 

3,678

 

Interest expense

 

 

(68,814

)

 

(63,661

)

 

 

 

(134,941

)

 

(127,590

)

Loss on extinguishment of debt

 

 

—

 

 

—

 

 

 

 

(227

)

 

—

 

Gain on sales of real estate assets

 

 

2,698

 

 

2,030

 

 

 

 

6,228

 

 

2,930

 

Equity in earnings of unconsolidated affiliates

 

 

1,084

 

 

1,118

 

 

 

 

1,682

 

 

3,186

 

Income tax provision

 

 

(948

)

 

—

 

 

 

 

(1,751

)

 

—

 

Minority interest in earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating partnership

 

 

(9,035

)

 

(17,726

)

 

 

 

(22,598

)

 

(35,855

)

Shopping center properties

 

 

(3,567

)

 

(673

)

 

 

 

(4,297

)

 

(1,261

)

Income before discontinued operations

 

 

22,154

 

 

19,856

 

 

 

 

47,266

 

 

45,859

 

Operating income from discontinued operations

 

 

534

 

 

1,499

 

 

 

 

520

 

 

3,751

 

Gain (loss) on disposal of discontinued operations

 

 

—

 

 

7,215

 

 

 

 

(55

)

 

7,215

 

Net income

 

 

22,688

 

 

28,570

 

 

 

 

47,731

 

 

56,825

 

Preferred dividends

 

 

(11,223

)

 

(7,642

)

 

 

 

(18,865

)

 

(15,284

)

Net income available to common shareholders

 

$

11,465

 

$

20,928

 

 

 

$

28,866

 

$

41,541

 

Basic per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before discontinued operations, net of preferred dividends

 

$

0.17

 

$

0.19

 

 

 

$

0.44

 

$

0.48

 

Discontinued operations

 

 

0.01

 

 

0.14

 

 

 

 

—

 

 

0.18

 

Net income available to common shareholders

 

$

0.18

 

$

0.33

 

 

 

$

0.44

 

$

0.66

 

Weighted average common shares outstanding

 

 

65,246

 

 

64,003

 

 

 

 

65,178

 

 

63,333

 

Diluted per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before discontinued operations, net of preferred dividends

 

$

0.17

 

$

0.19

 

 

 

$

0.43

 

$

0.47

 

Discontinued operations

 

 

—

 

 

0.13

 

 

 

 

0.01

 

 

0.17

 

Net income available to common shareholders

 

$

0.17

 

$

0.32

 

 

 

$

0.44

 

$

0.64

 

Weighted average common and potential dilutive common shares outstanding

 

 

65,922

 

 

65,385

 

 

 

 

65,905

 

 

64,857

 

 

 

-MORE-

CBL Reports Second Quarter Results

Page 7

August 2, 2007

 

The Company's calculation of FFO allocable to Company shareholders is as follows (in thousands, except per share data):

 

 

 

Three Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

2007

 

2006

 

 

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to common shareholders

 

$

11,465

 

$

20,928

 

 

 

$

28,866

 

$

41,541

 

Minority interest in earnings of operating partnership

 

 

9,035

 

 

17,726

 

 

 

 

22,598

 

 

35,855

 

Depreciation and amortization expense of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated properties

 

 

60,530

 

 

54,241

 

 

 

 

117,174

 

 

108,404

 

Unconsolidated affiliates

 

 

3,621

 

 

3,365

 

 

 

 

7,125

 

 

6,643

 

Discontinued operations

 

 

435

 

 

230

 

 

 

 

859

 

 

1,348

 

Non-real estate assets

 

 

(234

)

 

(210

)

 

 

 

(462

)

 

(405

)

Minority investors' share of depreciation and amortization

 

 

1,096

 

 

(568

)

 

 

 

490

 

 

(1,107

)

(Gain) loss on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of operating real estate assets

 

 

—

 

 

38

 

 

 

 

—

 

 

38

 

Disposal of discontinued operations

 

 

—

 

 

(7,215

)

 

 

 

55

 

 

(7,215

)

Funds from operations of the operating partnership

 

$

85,948

 

$

88,535

 

 

 

$

176,705

 

$

185,102

 

Funds from operations per diluted share

 

$

0.74

 

$

0.76

 

 

 

$

1.52

 

$

1.58

 

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

 

 

116,583

 

 

116,808

 

 

 

 

116,611

 

 

116,811

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds from operations of the operating partnership

 

$

85,948

 

$

88,535

 

 

 

$

176,705

 

$

185,102

 

Percentage allocable to Company shareholders (1)

 

 

56.29

%

 

55.45

%

 

 

 

56.24

%

 

54.93

%

Funds from operations allocable to Company shareholders

 

$

48,380

 

$

49,093

 

 

 

$

99,379

 

$

101,677

 

 

(1) Represents the weighted average number of common shares outstanding for the period divided by the sum of the weighted average number of common shares and the weighted average number of operating partnership units outstanding during the period.

 

SUPPLEMENTAL FFO INFORMATION:

 

Lease termination fees

 

$

2,082

 

$

2,426

 

 

 

$

5,639

 

$

8,294

 

Lease termination fees per share

 

$

0.02

 

$

0.02

 

 

 

$

0.05

 

$

0.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line rental income

 

$

1,254

 

$

1,336

 

 

 

$

2,394

 

$

2,226

 

Straight-line rental income per share

 

$

0.01

 

$

0.01

 

 

 

$

0.02

 

$

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains on outparcel sales

 

$

3,352

 

$

2,873

 

 

 

$

7,138

 

$

4,508

 

Gains on outparcel sales per share

 

$

0.03

 

$

0.02

 

 

 

$

0.06

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquired above- and below-market leases

 

$

2,762

 

$

2,322

 

 

 

$

5,692

 

$

4,915

 

Amortization of acquired above- and below-market leases per share

 

$

0.02

 

$

0.02

 

 

 

$

0.05

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of debt premiums

 

$

1,928

 

$

1,868

 

 

 

$

3,830

 

$

3,710

 

Amortization of debt premiums per share

 

$

0.02

 

$

0.02

 

 

 

$

0.03

 

$

0.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on impairment of real estate assets

 

$

—

 

$

(274

)

 

 

$

—

 

$

(274

)

Loss on impairment of real estate assets per share

 

$

—

 

$

—

 

 

 

$

—

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

$

(948

)

$

—

 

 

 

$

(1,751

)

$

—

 

Income tax provision per share

 

$

(0.01

)

$

—

 

 

 

$

(0.02

)

$

—

 

 

 

-MORE-

CBL Reports Second Quarter Results

Page 8

August 2, 2007

 

Same-Center Net Operating Income

(Dollars in thousands)

 

 

 

Three Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

2007

 

2006

 

 

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

22,688

 

$

28,570

 

 

 

$

47,731

 

$

56,825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

60,530

 

 

54,241

 

 

 

 

117,174

 

 

108,404

 

Depreciation and amortization from unconsolidated affiliates

 

 

3,621

 

 

3,365

 

 

 

 

7,125

 

 

6,643

 

Depreciation and amortization from discontinued operations

 

 

435

 

 

230

 

 

 

 

859

 

 

1,348

 

Minority investors' share of depreciation and amortization in shopping center properties

 

 

1,096

 

 

(568

)

 

 

 

490

 

 

(1,107

)

Interest expense

 

 

68,814

 

 

63,661

 

 

 

 

134,941

 

 

127,590

 

Interest expense from unconsolidated affiliates

 

 

4,206

 

 

4,275

 

 

 

 

8,398

 

 

8,669

 

Minority investors' share of interest expense in shopping center properties

 

 

1,294

 

 

(1,189

)

 

 

 

107

 

 

(2,351

)

Loss on extinguishment of debt

 

 

—

 

 

—

 

 

 

 

227

 

 

—

 

Abandoned projects expense

 

 

551

 

 

(60

)

 

 

 

600

 

 

(65

)

Gain on sales of real estate assets

 

 

(2,698

)

 

(2,030

)

 

 

 

(6,228

)

 

(2,930

)

Loss on impairment of real estate assets

 

 

—

 

 

274

 

 

 

 

—

 

 

274

 

Gain on sales of real estate assets of unconsolidated affiliates

 

 

(654

)

 

(804

)

 

 

 

(910

)

 

(1,537

)

Income tax provision

 

 

948

 

 

—

 

 

 

 

1,751

 

 

—

 

Minority interest in earnings of operating partnership

 

 

9,035

 

 

17,726

 

 

 

 

22,598

 

 

35,855

 

(Gain) loss on disposal of discontinued operations

 

 

—

 

 

(7,215

)

 

 

 

55

 

 

(7,215

)

Operating partnership's share of total NOI

 

 

169,866

 

 

160,476

 

 

 

 

334,918

 

 

330,403

 

General and administrative expenses

 

 

10,570

 

 

9,062

 

 

 

 

20,767

 

 

18,649

 

Management fees and non-property level revenues

 

 

(12,454

)

 

(6,204

)

 

 

 

(19,239

)

 

(10,865

)

Operating partnership's share of property NOI

 

 

167,982

 

 

163,334

 

 

 

 

336,446

 

 

338,187

 

NOI of non-comparable centers

 

 

(3,056

)

 

(2,259

)

 

 

 

(5,418

)

 

(5,929

)

Total same-center NOI

 

$

164,926

 

$

161,075

 

 

 

$

331,028

 

$

332,258

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Malls

 

$

153,059

 

$

149,195

 

 

 

$

307,720

 

$

308,535

 

Associated centers

 

 

7,265

 

 

7,364

 

 

 

 

14,516

 

 

14,527

 

Community centers

 

 

1,215

 

 

1,096

 

 

 

 

2,050

 

 

2,122

 

Other

 

 

3,387

 

 

3,420

 

 

 

 

6,742

 

 

7,074

 

Total same-center NOI

 

$

164,926

 

$

161,075

 

 

 

$

331,028

 

$

332,258

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage Change:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Malls

 

 

2.6

%

 

 

 

 

 

 

-0.3

%

 

 

 

Associated centers

 

 

-1.3

%

 

 

 

 

 

 

-0.1

%

 

 

 

Community centers

 

 

10.9

%

 

 

 

 

 

 

-3.4

%

 

 

 

Other

 

 

-1.0

%

 

 

 

 

 

 

-4.7

%

 

 

 

Total same-center NOI

 

 

2.4

%

 

 

 

 

 

 

-0.4

%

 

 

 

 

 

-MORE-

CBL Reports Second Quarter Results

Page 9

August 2, 2007

 

Company's Share of Consolidated and Unconsolidated Debt

(Dollars in thousands)

 

 

 

 

June 30, 2007

 

 

 

 

 

Fixed Rate

 

 

 

Variable Rate

 

 

 

Total

 

Consolidated debt

 

 

 

$

4,066,960

 

 

 

$

884,746

 

 

 

$

4,951,706

 

Minority investors' share of consolidated debt

 

 

 

 

(119,955

)

 

 

 

—

 

 

 

 

(119,955

)

Company's share of unconsolidated affiliates' debt

 

 

 

 

217,532

 

 

 

 

36,858

 

 

 

 

254,390

 

Company's share of consolidated and unconsolidated debt

 

 

 

$

4,164,537

 

 

 

$

921,604

 

 

 

$

5,086,141

 

Weighted average interest rate

 

 

 

 

5.91

%

 

 

 

6.20

%

 

 

 

5.96

%

 

 

 

 

June 30, 2006

 

 

 

 

 

Fixed Rate

 

 

 

Variable Rate

 

 

 

Total

 

Consolidated debt

 

 

 

$

3,247,156

 

 

 

$

1,119,463

 

 

 

$

4,366,619

 

Minority investors' share of consolidated debt

 

 

 

 

(51,436

)

 

 

 

—

 

 

 

 

(51,436

)

Company's share of unconsolidated affiliates' debt

 

 

 

 

225,447

 

 

 

 

26,600

 

 

 

 

252,047

 

Company's share of consolidated and unconsolidated debt

 

 

 

$

3,421,167

 

 

 

$

1,146,063

 

 

 

$

4,567,230

 

Weighted average interest rate

 

 

 

 

5.99

%

 

 

 

6.21

%

 

 

 

6.04

%

 

Debt-To-Total-Market Capitalization Ratio as of June 30, 2007

(In thousands, except stock price)

 

 

 

 

Shares

Outstanding

 

 

 

Stock

Price (1)

 

 

 

Value

 

Common stock and operating partnership units

 

 

 

116,285

 

 

 

$

36.05

 

 

 

$

4,192,074

 

7.75% Series C Cumulative Redeemable Preferred Stock

 

 

 

460

 

 

 

 

250.00

 

 

 

 

115,000

 

7.375% Series D Cumulative Redeemable Preferred Stock

 

 

 

700

 

 

 

 

250.00

 

 

 

 

175,000

 

Total market equity

 

 

 

 

 

 

 

 

 

 

 

 

 

4,482,074

 

Company's share of total debt

 

 

 

 

 

 

 

 

 

 

 

 

 

5,086,141

 

Total market capitalization

 

 

 

 

 

 

 

 

 

 

 

 

$

9,568,215

 

Debt-to-total-market capitalization ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

53.2

%

(1) Stock price for common stock and operating partnership units equals the closing price of the common stock on June 29, 2007. The stock price for the preferred stock represents the liquidation preference of each respective series of preferred stock.

 

Reconciliation of Shares and Operating Partnership Units Outstanding

(In thousands)

 

 

 

 

Three Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

2007:

 

 

 

Basic

 

 

 

Diluted

 

 

 

Basic

 

 

 

Diluted

 

Weighted average shares - EPS

 

 

 

65,246

 

 

 

65,922

 

 

 

65,178

 

 

 

65,905

 

Weighted average operating partnership units

 

 

 

50,661

 

 

 

50,661

 

 

 

50,705

 

 

 

50,706

 

Weighted average shares- FFO

 

 

 

115,907

 

 

 

116,583

 

 

 

115,883

 

 

 

116,611

 

2006:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares - EPS

 

 

 

64,003

 

 

 

65,385

 

 

 

63,333

 

 

 

64,857

 

Weighted average operating partnership units

 

 

 

51,423

 

 

 

51,423

 

 

 

51,955

 

 

 

51,954

 

Weighted average shares- FFO

 

 

 

115,426

 

 

 

116,808

 

 

 

115,288

 

 

 

116,811

 

 

 

 

 

 

Three Months
Ended June 30,

 

 

 

Six Months
Ended June 30,

 

 

 

 

 

2007

 

 

 

2006

 

 

 

2007

 

 

 

2006

 

Weighted average dividend per share

 

 

 

$

0.51031

 

 

 

$

0.46388

 

 

 

$

1.02630

 

 

 

$

0.92777

 

FFO per diluted, fully converted share

 

 

 

$

0.74

 

 

 

$

0.76

 

 

 

$

1.52

 

 

 

$

1.58

 

Dividend payout ratio

 

 

 

 

69.0

%

 

 

 

61.0

%

 

 

 

67.5

%

 

 

 

58.7

%

 

-MORE-

CBL Reports Second Quarter Results

Page 10

August 2, 2007

 

Consolidated Balance Sheets

(Unaudited, in thousands except share data)

 

 

 

June 30,
2007

 

December 31,
2006

 

ASSETS

 

 

 

 

 

 

 

Real estate assets:

 

 

 

 

 

 

 

Land

 

$

808,304

 

$

779,727

 

Buildings and improvements

 

 

6,086,572

 

 

5,944,476

 

 

 

 

6,894,876

 

 

6,724,203

 

Less: accumulated depreciation

 

 

(999,471

)

 

(924,297

)

 

 

 

5,895,405

 

 

5,799,906

 

Held for Sale

 

 

28,992

 

 

—

 

Developments in progress

 

 

306,470

 

 

294,345

 

Net investment in real estate assets

 

 

6,230,867

 

 

6,094,251

 

Cash and cash equivalents

 

 

58,245

 

 

28,700

 

Receivables:

 

 

 

 

 

 

 

Tenant, net of allowance

 

 

61,415

 

 

71,573

 

Other

 

 

16,132

 

 

9,656

 

Mortgage notes receivable

 

 

32,872

 

 

21,559

 

Investments in unconsolidated affiliates

 

 

98,000

 

 

78,826

 

Other assets

 

 

230,212

 

 

214,245

 

 

 

$

6,727,743

 

$

6,518,810

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

Mortgage and other notes payable

 

$

4,951,706

 

$

4,564,535

 

Accounts payable and accrued liabilities

 

 

309,195

 

 

309,969

 

Total liabilities

 

 

5,260,901

 

 

4,874,504

 

Commitments and contingencies

 

 

 

 

 

 

 

Minority interests

 

 

516,732

 

 

559,450

 

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

 

7.75% Series C Cumulative Redeemable Preferred Stock, 460,000 shares outstanding

 

 

5

 

 

5

 

7.375% Series D Cumulative Redeemable Preferred Stock, 700,000 shares outstanding

 

 

7

 

 

7

 

Common Stock, $.01 par value, 180,000,000 shares authorized, 65,645,516 and 65,421,311 issued and outstanding in 2007 and 2006, respectively

 

 

656

 

 

654

 

Additional paid-in capital

 

 

979,611

 

 

1,074,450

 

Accumulated other comprehensive (loss) income

 

 

(2,453

)

 

19

 

(Accumulated deficit) retained earnings

 

 

(27,716

)

 

9,701

 

Total shareholders' equity

 

 

950,110

 

 

1,084,856

 

 

 

$

6,727,743

 

$

6,518,810

 

 

 

 

 

-END-