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TheStreet Open House

CBL & Associates Properties Reports Fourth Quarter 2012 Results

Stocks in this article: CBL

Pro Rata Share of Debt

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

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

 
CBL & Associates Properties, Inc.
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
         
 
Three Months Ended December 31, Year Ended December 31,
2012 2011 2012 2011
REVENUES:
Minimum rents $ 174,236 $ 164,212 $ 663,895 $ 668,628
Percentage rents 9,674 8,364 17,995 17,149
Other rents 8,923 8,743 22,657 22,428
Tenant reimbursements 74,758 72,913 287,954 301,323
Management, development and leasing fees 3,197 2,121 10,772 6,935
Other   7,562     8,490     31,367     34,851  
Total revenues   278,350     264,843     1,034,640     1,051,314  
 
OPERATING EXPENSES:
Property operating 36,268 37,199 145,828 148,961
Depreciation and amortization 69,517 63,491 265,856 271,458
Real estate taxes 21,986 20,259 90,503 91,723
Maintenance and repairs 12,903 12,835 52,577 55,500
General and administrative 15,287 11,618 51,251 44,751
Loss on impairment of real estate 20,467 - 24,379 51,304
Other   5,890     6,103     25,078     28,898  
Total operating expenses   182,318     151,505     655,472     692,595  
Income from operations 96,032 113,338 379,168 358,719
Interest and other income 762 831 3,955 2,583
Interest expense (60,766 ) (60,511 ) (244,432 ) (267,072 )
Gain on extinguishment of debt 87 448 265 1,029
Gain on sales of real estate assets 533 55,794 2,286 59,396
Gain on investment 45,072 - 45,072 -
Equity in earnings of unconsolidated affiliates 2,912 1,916 8,313 6,138
Income tax (provision) benefit   (170 )   (1,501 )   (1,404 )   269  
Income from continuing operations 84,462 110,315 193,223 161,062
Operating income (loss) of discontinued operations 1,665 (319 ) (19,643 ) 23,933
Gain (loss) on discontinued operations   (45 )   (122 )   938     (1 )
Net income 86,082 109,874 174,518 184,994
Net income attributable to noncontrolling interests in:
Operating partnership (11,484 ) (20,398 ) (19,267 ) (25,841 )
Other consolidated subsidiaries   (6,513 )   (6,509 )   (23,652 )   (25,217 )
Net income attributable to the Company 68,085 82,967 131,599 133,936
Preferred dividends   (15,729 )   (10,594 )   (47,511 )   (42,376 )
Net income attributable to common shareholders $ 52,356   $ 72,373   $ 84,088   $ 91,560  
 
 
Basic per share data attributable to common shareholders:
Income from continuing operations, net of preferred dividends $ 0.32 $ 0.49 $ 0.64 $ 0.49
Discontinued operations   0.01     -     (0.10 )   0.13  
Net income attributable to common shareholders $ 0.33   $ 0.49   $ 0.54   $ 0.62  
Weighted average common shares outstanding 160,841 148,364 154,762 148,289
 
Diluted earnings per share data attributable to common shareholders:
Income from continuing operations, net of preferred dividends $ 0.32 $ 0.49 $ 0.64 $ 0.49
Discontinued operations   0.01     -     (0.10 )   0.13  
Net income attributable to common shareholders $ 0.33   $ 0.49   $ 0.54   $ 0.62  

Weighted average common and potential dilutive common shares outstanding

160,881 148,407 154,807 148,334
 
Amounts attributable to common shareholders:
Income from continuing operations, net of preferred dividends $ 50,987 $ 72,716 $ 99,306 $ 72,914
Discontinued operations   1,369     (343 )   (15,218 )   18,646  
Net income attributable to common shareholders $ 52,356   $ 72,373   $ 84,088   $ 91,560  

 

 

 

 

 

 

 

 

 

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

December 31,

  Year Ended

December 31,

2012     2011   2012     2011
 
Net income attributable to common shareholders $ 52,356 $ 72,373 $ 84,088 $ 91,560
Noncontrolling interest in income of operating partnership 11,484 20,398 19,267 25,841
Depreciation and amortization expense of:
Consolidated properties 69,517 63,491 265,856 271,458
Unconsolidated affiliates 11,079 11,406 43,956 32,538
Discontinued operations 418 1,297 2,778 4,912
Non-real estate assets (475 ) (529 ) (1,841 ) (2,488 )
Noncontrolling interests' share of depreciation and amortization (1,534 ) (403 ) (5,071 ) (919 )
Loss on impairment of real estate, net of tax benefit 20,409 452 50,343 56,557
Gain on depreciable property (159 ) (54,357 ) (652 ) (56,763 )
(Gain) loss on discontinued operations, net of taxes 32 122 (566 ) 1
Funds from operations of the operating partnership 163,127 114,250 458,158 422,697
Gain on investment (45,072 ) - (45,072 ) -
Gain on extinguishment of debt   (87 )   (448 )   (265 )   (32,463 )
Funds from operations of the operating partnership, as adjusted $ 117,968   $ 113,802   $ 412,821   $ 390,234  
 
Funds from operations per diluted share $ 0.86 $ 0.60 $ 2.41 $ 2.22
Gain on investment (0.24 ) - (0.24 ) -
Gain on extinguishment of debt   -     -     -     (0.17 )
Funds from operations, as adjusted, per diluted share $ 0.62   $ 0.60   $ 2.17   $ 2.05  
 

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

190,383 190,424 190,268 190,380
 
 

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

Funds from operations of the operating partnership $ 163,127 $ 114,250 $ 458,158 $ 422,697
Percentage allocable to common shareholders (1)   84.50 %   77.93 %   81.36 %   77.91 %
Funds from operations allocable to common shareholders $ 137,842   $ 89,035   $ 372,757   $ 329,323  
 
Funds from operations of the operating partnership, as adjusted $ 117,968 $ 113,802 $ 412,821 $ 390,234
Percentage allocable to common shareholders (1)   84.50 %   77.93 %   81.36 %   77.91 %
Funds from operations allocable to common shareholders, as adjusted $ 99,683   $ 88,686   $ 335,871   $ 304,031  
 
 

(1)

Represents the weighted average number of common shares outstanding for the period divided by the sum of the weighted average number of common shares and the weighted average number of operating partnership units outstanding during the period. See the reconciliation of shares and operating partnership units outstanding on page 9.

 
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees $ 846 $ 570 $ 3,819 $ 3,272
Lease termination fees per share $ - $ - $ 0.02 $ 0.02
 
Straight-line rental income $ 174 $ 1,650 $ 4,577 $ 5,387
Straight-line rental income per share $ - $ 0.01 $ 0.02 $ 0.03
 
Gains on outparcel sales $ (279 ) $ 1,966 $ 4,849 $ 3,989
Gains on outparcel sales per share $ - $ 0.01 $ 0.03 $ 0.02
 
Net amortization of acquired above- and below-market leases $ 984 $ 24 $ 2,559 $ 2,107
Net amortization of acquired above- and below-market leases per share $ 0.01 $ - $ 0.01 $ 0.01
 
Net amortization of debt premiums (discounts) $ 142 $ 871 $ 1,849 $ 2,831
Net amortization of debt premiums (discounts) per share $ - $ - $ 0.01 $ 0.01
 
Income tax (provision) benefit $ (170 ) $ (1,501 ) $ (1,404 ) $ 269
Income tax (provision) benefit per share $ - $ (0.01 ) $ (0.01 ) $ -
 
Loss on impairment of real estate from continuing operations $ (20,467 ) $ - $ (24,379 ) $ (51,304 )
Loss on impairment of real estate from continuing operations per share $ (0.11 ) $ - $ (0.13 ) $ (0.27 )
 
Gain (loss) on impairment of real estate from discontinued operations $ 40 $ (729 ) $ (26,461 ) $ (7,425 )
Loss on impairment of real estate from discontinued operations per share $ - $ - $ (0.14 ) $ (0.04 )
 
Gain on extinguishment of debt from discontinued operations $ - $ - $ - $ 31,434
Gain on extinguishment of debt from discontinued operations per share $ - $ - $ - $ 0.17
 
Gain on investment $ 45,072 $ - $ 45,072 $ -
Gain on investment per share $ 0.24 $ - $ 0.24 $ -
 
Origination cost of series C preferred stock $ (3,778 ) $ - $ (3,778 ) $ -
Origination cost of series C preferred stock per share $ (0.02 ) $ - $ (0.02 ) $ -
               
Same-Center Net Operating Income
(Dollars in thousands)
 
Three Months Ended December 31, Year Ended December 31,
2012 2011 2012 2011
 
Net income attributable to the Company $ 68,085 $ 82,967 $ 131,599 $ 133,936
 
Adjustments:
Depreciation and amortization 69,517 63,491 265,856 271,458
Depreciation and amortization from unconsolidated affiliates 11,079 11,406 43,956 32,538
Depreciation and amortization from discontinued operations 418 1,297 2,778 4,912

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

(1,534 ) (403 ) (5,071 ) (919 )
Interest expense 60,766 60,511 244,432 267,072
Interest expense from unconsolidated affiliates 11,254 11,277 44,543 32,932
Interest expense from discontinued operations - 1,052 229 4,441

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

(959 ) (529 ) (3,435 ) (1,329 )
Abandoned projects expense 76 43 (39 ) 94
Gain on sales of real estate assets (533 ) (55,794 ) (5,282 ) (59,396 )
Gain on sales of real estate assets of unconsolidated affiliates (363 ) (118 ) (1,214 ) (1,445 )
Gain on extinguishment of debt (87 ) (448 ) (265 ) (1,029 )
Gain on extinguishment of debt from discontinued operations - - - (31,434 )
Writedown of mortgage notes receivable - - - 1,900
Loss on impairment of real estate 20,467 - 24,379 51,304
(Gain) loss on impairment of real estate from discontinued operations (40 ) 729 26,461 7,425
Income tax provision (benefit) 170 1,501 1,404 (269 )
Gain on investment (45,072 ) - (45,072 ) -

Net income attributable to noncontrolling interest in earnings of operating partnership

11,484 20,398 19,267 25,841
(Gain) loss on discontinued operations   45     122     (938 )   1  
Operating partnership's share of total NOI 204,773 197,502 743,588 738,033
General and administrative expenses 15,287 11,618 51,251 44,751
Management fees and non-property level revenues   (7,875 )   (5,809 )   (27,728 )   (22,827 )
Operating partnership's share of property NOI 212,185 203,311 767,111 759,957
Non-comparable NOI   (12,196 )   (7,821 )   (36,361 )   (43,981 )
Total same-center NOI $ 199,989   $ 195,490   $ 730,750   $ 715,976  
Total same-center NOI percentage change   2.3 %   2.1 %
 
Total same-center NOI $ 199,989 $ 195,490

 

$ 730,750 $ 715,976
Less lease termination fees   (831 )   (543 )   (3,456 )   (2,945 )
Total same-center NOI, excluding lease termination fees $ 199,158   $ 194,947   $ 727,294   $ 713,031  
 
Malls $ 178,168 $ 176,131 $ 653,328 $ 642,541
Associated centers 8,374 7,889 32,852 31,151
Community centers 4,630 4,129 17,636 16,103
Offices and other   7,986     6,798     23,478     23,236  
Total same-center NOI, excluding lease termination fees $ 199,158   $ 194,947   $ 727,294   $ 713,031  
 
Percentage Change:
Malls 1.2 % 1.7 %
Associated centers 6.1 % 5.5 %
Community centers 12.1 % 9.5 %
Offices and other   17.5 %   1.0 %
Total same-center NOI, excluding lease termination fees   2.2 %   2.0 %
 
Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
      As of December 31, 2012
Fixed Rate   Variable Rate   Total
Consolidated debt $ 3,794,509 $ 951,174 $ 4,745,683
Noncontrolling interests' share of consolidated debt (89,530 ) - (89,530 )
Company's share of unconsolidated affiliates' debt   660,563     128,491     789,054  
Company's share of consolidated and unconsolidated debt $ 4,365,542   $ 1,079,665   $ 5,445,207  
Weighted average interest rate   5.48 %   2.39 %   4.86 %
 
As of December 31, 2011
Fixed Rate Variable Rate Total
Consolidated debt $ 3,733,355 $ 756,000 $ 4,489,355
Noncontrolling interests' share of consolidated debt (30,416 ) (726 ) (31,142 )
Company's share of unconsolidated affiliates' debt   658,470     150,171     808,641  
Company's share of consolidated and unconsolidated debt $ 4,361,409   $ 905,445   $ 5,266,854  
Weighted average interest rate   5.58 %   2.47 %   5.04 %
 
 
Debt-To-Total-Market Capitalization Ratio as of December 31, 2012
(In thousands, except stock price) Shares
Outstanding Stock Price (1) Value
Common stock and operating partnership units 190,855 $ 21.21 $ 4,048,035
7.375% Series D Cumulative Redeemable Preferred Stock 1,815 250.00 453,750
6.625% Series E Cumulative Redeemable Preferred Stock 690 250.00   172,500  
Total market equity 4,501,785
Company's share of total debt   5,445,207  
Total market capitalization $ 9,946,992  
Debt-to-total-market capitalization ratio   54.7 %
 

(1)

Stock price for common stock and operating partnership units equals the closing price of the common stock on December 31, 2012. The stock prices for the preferred stocks represent the liquidation preference of each respective series.

 
Reconciliation of Shares and Operating Partnership Units Outstanding
(In thousands)
Three Months Ended Year Ended
December 31, December 31,
2012: Basic Diluted Basic Diluted
Weighted average shares - EPS 160,841 160,881 154,762 154,807
Weighted average operating partnership units   29,502     29,502     35,461     35,461  
Weighted average shares- FFO   190,343     190,383     190,223     190,268  
 
2011:
Weighted average shares - EPS 148,364 148,407 148,289 148,334
Weighted average operating partnership units   42,017     42,017     42,046     42,046  
Weighted average shares- FFO   190,381     190,424     190,335     190,380  
 
 
Dividend Payout Ratio Three Months Ended Year Ended
December 31, December 31,
  2012     2011     2012     2011  
Weighted average cash dividend per share $ 0.22838 $ 0.21913 $ 0.91526 $ 0.88773
FFO per diluted, fully converted share, as adjusted $ 0.62   $ 0.60   $ 2.17   $ 2.05  
Dividend payout ratio   36.8 %   36.5 %   42.2 %   43.3 %
       
Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
 
 
As of
December 31, 2012 December 31, 2011
ASSETS
Real estate assets:
Land $ 905,339 $ 851,303
Buildings and improvements   7,228,293     6,777,776  
8,133,632 7,629,079
Accumulated depreciation   (1,972,031 )   (1,762,149 )
6,161,601 5,866,930
Held for sale 29,425 14,033
Developments in progress   137,956     124,707  
Net investment in real estate assets 6,328,982 6,005,670
Cash and cash equivalents 78,248 56,092
Receivables:

Tenant, net of allowance for doubtful accounts of $1,977 and $1,760 in 2012 and 2011, respectively

78,963 74,160

Other, net of allowance for doubtful accounts of $1,270 and $1,400 in 2012 and 2011, respectively

8,467 11,592
Mortgage and other notes receivable 25,967 34,239
Investments in unconsolidated affiliates 259,810 304,710
Intangible lease assets and other assets   309,299     232,965  
$ 7,089,736   $ 6,719,428  
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness $ 4,745,683 $ 4,489,355
Accounts payable and accrued liabilities   358,874     303,577  
Total liabilities   5,104,557     4,792,932  
Commitments and contingencies
Redeemable noncontrolling interests:
Redeemable noncontrolling partnership interests 41,762 32,271
Redeemable noncontrolling preferred joint venture interest   423,834     423,834  
Total redeemable noncontrolling interests   465,596     456,105  
Shareholders' equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized:

7.75% Series C Cumulative Redeemable Preferred Stock, 460,000 shares outstanding in 2011

- 5

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

18 18

6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding in 2012

7 -

Common stock, $.01 par value, 350,000,000 shares authorized, 161,309,652 and 148,364,037 issued and outstanding in 2012 and 2011, respectively

1,613 1,484
Additional paid-in capital 1,772,353 1,657,927
Accumulated other comprehensive income 6,986 3,425
Dividends in excess of cumulative earnings   (453,561 )   (399,581 )
Total shareholders' equity 1,327,416 1,263,278
Noncontrolling interests   192,167     207,113  
Total equity   1,519,583     1,470,391  
$ 7,089,736   $ 6,719,428  




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