Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C.  20549
 

FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported):  August 1, 2018
 

CBL & ASSOCIATES PROPERTIES, INC.

CBL & ASSOCIATES LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in its Charter)
 
 
 
 
 
 
 
Delaware
 
1-12494
 
62-1545718
Delaware
 
333-182515-01
 
62-1542285
(State or Other Jurisdiction of
Incorporation or Organization)
 
(Commission File
 Number)
 
(I.R.S. Employer Identification No.)
 
 
 
 
 
2030 Hamilton Place Blvd., Suite 500, 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):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).
Emerging growth company o    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o






ITEM 2.02 Results of Operations and Financial Condition

On August 1, 2018, CBL & Associates Properties, Inc. (the "Company") reported its results for the second quarter ended June 30, 2018. The Company's earnings release and supplemental financial and operating information for the second quarter ended June 30, 2018 is attached as Exhibit 99.1. On August 2, 2018, the Company held a conference call to discuss the results for the second quarter ended June 30, 2018. The conference call script is attached as Exhibit 99.2.

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 of 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)
Shell Company Transactions
Not applicable

(d)
Exhibits
 
 
 
 
Exhibit
Number
 
Description
 
 










SIGNATURES
 

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 hereunto duly authorized.


CBL & ASSOCIATES PROPERTIES, INC.


/s/ Farzana Khaleel
___________________________________
Farzana Khaleel
Executive Vice President -
Chief Financial Officer and Treasurer


CBL & ASSOCIATES LIMITED PARTNERSHIP

By: CBL HOLDINGS I, INC., its general partner


/s/ Farzana Khaleel
___________________________________
Farzana Khaleel
Executive Vice President -
Chief Financial Officer and Treasurer
                             


Date: August 2, 2018
 



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1















394493339_cblmark.jpg



Earnings Release and
Supplemental Financial and Operating Information

For the Three and Six Months Ended
June 30, 2018





394493339_cblmarka01.jpg
Earnings Release and Supplemental Financial and Operating Information
Table of Contents

 
 
Page
 
 
 
 
 
 
 
 
Reconciliations of Supplementary Non-GAAP Financial Measures:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



394493339_pressreleaseheadercopya01.jpg


Contact: Katie Reinsmidt, EVP - Chief Investment Officer, 423.490.8301, katie.reinsmidt@cblproperties.com


CBL PROPERTIES REPORTS RESULTS FOR SECOND QUARTER 2018
Results in-line; Full-Year Guidance Range Maintained

CHATTANOOGA, Tenn. (August 1, 2018) – CBL Properties (NYSE:CBL) announced results for the second quarter ended June 30, 2018. A description of each supplemental non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located at the end of this news release.
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
%
 
2018
 
2017
 
%
Net income (loss) attributable to common shareholders per diluted share
$
(0.20
)
 
$
0.18

 
(211.1
)%
 
$
(0.26
)
 
$
0.31

 
(183.9
)%
Funds from Operations ("FFO") per diluted share
$
0.46

 
$
0.58

 
(20.7
)%
 
$
0.88

 
$
1.12

 
(21.4
)%
FFO, as adjusted, per diluted share (1)
$
0.46

 
$
0.50

 
(8.0
)%
 
$
0.88

 
$
1.02

 
(13.7
)%
(1) For a reconciliation of FFO to FFO, as adjusted, for the periods presented, please refer to the footnotes to the Company's reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 10 of this news release.
 
KEY TAKEAWAYS:

FFO per diluted share, as adjusted, was $0.46 for the second quarter 2018, compared with $0.50 per share for the second quarter 2017. Second quarter 2018 FFO per share was impacted by approximately $0.01 per share of dilution from asset sales completed in 2017 and year-to-date, $0.07 per share of lower property NOI, $0.02 per share higher corporate interest expense, $0.03 per share lower property level interest expense, $0.01 lower G&A expense and $0.02 per share lower abandoned project expense.
Total Portfolio Same-center NOI declined 6.9% for the second quarter 2018 and 6.8% for the six-months ended June 30, 2018.
Portfolio occupancy was 91.1% as of June 30, 2018, compared with 91.6% as of June 30, 2017. Same-center mall occupancy was 89.5% as of June 30, 2018 compared with 90.4% as of June 30, 2017.
Year-to-date, CBL has completed gross asset sales of $38.3 million including the sale of a Tier 3 mall for a gross sales price of $18.0 million in July.
Same-center sales per square foot for the stabilized mall portfolio for the twelve-months ended June 30, 2018, were $376 per square foot compared with $375 per square foot for the prior-year period.
Redevelopment activity is underway at eight properties with two redevelopment projects opened during the quarter and two new projects added to the pipeline.







 
1
 
394493339_pressreleasefootera02.jpg




    
"Our results for this quarter were in-line with our guidance and we are making solid progress on our strategic initiatives," commented Stephen Lebovitz, chief executive officer.  "We are diversifying our tenant mix with more than 60% of new leases executed year-to-date representing non-apparel uses.  In addition, we are replacing former anchors with dynamic, new uses which will generate higher levels of traffic and sales.  Just last week, we signed a new lease for a 100,000-square-foot casino, entertainment and dining complex to replace a former Bon-Ton location at Westmoreland Mall in Greensburg, PA.  We also started construction on the addition of Cheesecake Factory to Hamilton Place in Chattanooga as the first step of the redevelopment of the Sears store there. These additions demonstrate the tremendous opportunity to create value throughout the CBL portfolio.
            "Strengthening our balance sheet is another strategic priority.  We closed last week on the sale of Janesville Mall, a Tier 3 mall with sales of $243 per square foot.  Year-to-date, we have generated more than $38 million from this and other dispositions.  These funds supplement our significant cash flow, which we utilize to fund portfolio improvements and debt reduction.  We closed during the quarter on a 10-year, fixed-rate $155 million non-recourse loan secured by CoolSprings Galleria at very favorable terms and completed the extension of two additional secured loans for new five-year terms.  We also repaid $190 million of our $490 million unsecured term loan in July. We are having constructive discussions with our bank group to complete a recast of our $350 million unsecured term loan (due Oct. 2019) and lines of credit (due Oct. 2020) prior to year-end.  Completing the recast well ahead of maturity will provide further financial flexibility to execute on the redevelopments and other growth initiatives across our portfolio."
Net loss attributable to common shareholders for the second quarter 2018 was $35.0 million, or a loss of $0.20 per diluted share, compared with net income of $30.2 million, or $0.18 per diluted share, for the second quarter 2017. Net loss attributable to common shareholders for the second quarter 2018 included a $52.0 million loss on impairment of Cary Towne Center, primarily related to the accelerated maturity of the non-recourse loan secured by the property.
FFO allocable to common shareholders, as adjusted, for the second quarter 2018 was $80.2 million, or $0.46 per diluted share, compared with $85.6 million, or $0.50 per diluted share, for the second quarter 2017. FFO allocable to the Operating Partnership common unitholders, as adjusted, for the second quarter 2018 was $92.8 million compared with $99.7 million for the second quarter 2017.

Percentage change in same-center Net Operating Income ("NOI")(1):
 
 
Three Months Ended
June 30, 2018
 
Six Months Ended
June 30, 2018
Portfolio same-center NOI
 
(6.9)%
 
(6.8)%
Mall same-center NOI
 
(6.9)%
 
(7.0)%
(1)
CBL's definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items of straight-line rents, write-offs of landlord inducements and net amortization of acquired above and below market leases.

    

2






Major variances impacting same-center NOI for the quarter ended June 30, 2018, include:

Same-center NOI declined $11.5 million, due to an $8.3 million decrease in revenue and a $3.1 million increase in operating expenses.
Minimum rents and tenant reimbursements declined $8.7 million during the quarter, primarily related to store closures and rent concessions for tenants in bankruptcy.
Percentage rents increased $0.5 million compared with the prior year quarter due to portfolio sales growth.
Property operating expenses increased $0.8 million, including a $0.5 million increase in bad debt expense. Maintenance and repair expense increased $1.1 million, including a $0.5 million increase in snow removal, and real estate tax expenses increased $1.2 million. The variance in real estate tax expense was primarily due to a favorable tax assessment that was received in the prior-year period.
 

PORTFOLIO OPERATIONAL RESULTS

Occupancy(1):
 
As of June 30,
 
2018
 
2017
Portfolio occupancy
91.1%
 
91.6%
Mall portfolio
89.2%
 
90.2%
Same-center malls
89.5%
 
90.4%
Stabilized malls 
89.5%
 
90.5%
Non-stabilized malls (2)
71.9%
 
81.8%
Associated centers
97.9%
 
95.5%
Community centers
96.9%
 
97.0%
(1)
Occupancy for malls represents percentage of mall store gross leasable area 20,000 square feet and under occupied. Occupancy for associated and community centers represents percentage of gross leasable area occupied.
(2)
Represents occupancy for The Outlet Shoppes at Laredo as of June 30, 2018. Represents occupancy for The Outlet Shoppes of the Bluegrass and The Outlet Shoppes at Laredo as of June 30, 2017.

    
New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:
% Change in Average Gross Rent Per Square Foot:
 
 
 
Three Months
Ended
June 30, 2018
 
Six Months
Ended
June 30, 2018
Stabilized Malls
(8.2
)%
 
(10.6
)%
New leases
(1.4
)%
 
(0.5
)%
Renewal leases
(9.9
)%
 
(12.6
)%

3






Same-Center Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:
 
Twelve Months Ended June 30,
 
 
 
2018
 
2017
 
% Change
Stabilized mall same-center sales per square foot
$
376

 
$
375

 
0.3%
Stabilized mall sales per square foot
$
376

 
$
373

 
0.8%

DISPOSITIONS
Year-to-date CBL has raised $38.3 million in gross proceeds through asset sales, which includes $8.0 million of aggregate gross proceeds from the sale of various outparcel locations during the second quarter and the July sale of Janesville Mall in Janesville, WI, for $18.0 million to RockStep Capital.
    
FINANCING ACTIVITY
In April, CBL, along with its 50% joint venture partner, closed on a $155.0 million ($77.5 million at CBL’s share) non-recourse loan secured by CoolSprings Galleria in Nashville, TN. The 10-year loan bears interest at a fixed rate of 4.839%.

Proceeds from the loan were used to retire the existing $97.7 million loan, which bore interest at a fixed rate of 6.98% and was scheduled to mature in June. CBL’s share of nearly $29.0 million in excess proceeds was utilized to reduce outstanding balances on its unsecured lines of credit.

In May, CBL completed the extension of the $56.7 million ($28.4 million at CBL’s share) loan secured by The Pavilion at Port Orange in Port Orange, FL, and the $58.2 million ($29.1 million at CBL’s share) loan secured by Hammock Landing in West Melbourne, FL. Both loans were originally scheduled to mature in February 2019. The loans were extended for an initial term of three years, with two one-year extensions available at the Company’s option, for a final maturity in February 2023. The new loans bear interest at 225 basis points over LIBOR, an increase of 25 bps over the prior rate.

In July, CBL repaid $190.0 million of its $490.0 million unsecured term loan using availability on its line of credit.

DEVELOPMENT
Major redevelopments completed and underway in 2018 include (complete project list can be found in the financial supplement):
 
Prior Tenant
 
New Tenant(s)
Brookfield Square
Sears
 
Marcus Theaters, Whirlyball
Eastland Mall
JCPenney
 
H&M, Outback, Planet Fitness
Frontier Mall
Sports Authority
 
Planet Fitness
Jefferson Mall
Macy's
 
Round 1
York Galleria
JCPenney
 
Marshalls
Hanes Mall
Shops
 
Dave & Busters


4






OUTLOOK AND GUIDANCE
CBL is maintaining 2018 FFO, as adjusted, guidance in the range of $1.70 - $1.80 per diluted share. Guidance incorporates a full-year budgeted impact of loss in rent related to 2017 tenant bankruptcies, store closures and rent adjustments net of expected new leasing as well as a reserve in the range of $10.0 - $20.0 million (the "Reserve") for potential future unbudgeted loss in rent from tenant bankruptcies, store closures or lease modifications that may occur in 2018. Based on bankruptcy and leasing activity year-to-date, including the impact of any co-tenancy, CBL currently expects to utilize approximately $13 - $15 million of the Reserve. Detail of assumptions underlying guidance follows:
 
Low
 
High
2018 FFO, as adjusted, per share (Includes the Reserve)
$1.70
 
$1.80
2018 Change in Same-Center NOI ("SC NOI") (Includes the Reserve)
(6.75)%
 
(5.25)%
Reserve for unbudgeted lost rents included in SC NOI and FFO
$20.0 million
 
$10.0 million
Gain on outparcel sales
$7.0 million
 
$10.0 million
Estimated 2018 Dividend Per Common Share (1)
$0.80
 
$0.80
(1) Subject to Board approval

Reconciliation of GAAP net income to 2018 FFO, as adjusted, per share guidance:
 
Low
 
High
Expected diluted earnings per common share
$
(0.25
)
 
$
(0.15
)
Adjust to fully converted shares from common shares
0.03

 
0.02

Expected earnings per diluted, fully converted common share
(0.22
)
 
(0.13
)
Add: depreciation and amortization
1.60

 
1.60

Less: gain on depreciable property
(0.01
)
 
(0.01
)
Add: loss on impairment
0.35

 
0.35

Add: noncontrolling interest in loss of Operating Partnership
(0.03
)
 
(0.02
)
Expected FFO, as adjusted, per diluted, fully converted common share
$
1.69

 
$
1.79

Adjustment for certain significant items
0.01

 
0.01

Expected adjusted FFO per diluted, fully converted common share
$
1.70

 
$
1.80


INVESTOR CONFERENCE CALL AND WEBCAST
CBL Properties will host a conference call on Thursday, August 2, 2018, at 11:00 a.m. ET. To access this interactive teleconference, dial (888) 317‑6003 or (412) 317-6061 and enter the confirmation number, 5568536.  A replay of the conference call will be available through August 9, 2018, by dialing (877) 344-7529 or (412) 317‑0088 and entering the confirmation number, 10120294.
The Company will also provide an online webcast and rebroadcast of its second quarter 2018 earnings release conference call.  The live broadcast of the quarterly conference call will be available online at cblproperties.com on Thursday, August 2, 2018, beginning at 11:00 a.m. ET.  The online replay will follow shortly after the call.

5





To receive the CBL Properties second quarter earnings release and supplemental information, please visit the Invest section of our website at cblproperties.com or contact Investor Relations at (423) 490-8312.

ABOUT CBL PROPERTIES
Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBL’s portfolio is comprised of 117 properties totaling 72.8 million square feet across 26 states, including 74 high-quality enclosed, outlet and open-air retail centers and 13 properties managed for third parties. CBL continuously strengthens its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties.  For more information visit cblproperties.com.


NON-GAAP FINANCIAL MEASURES
Funds From Operations
FFO is a widely used non-GAAP measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO as defined above by NAREIT less dividends on preferred stock of the Company or distributions on preferred units of the Operating Partnership, as applicable. The Company’s method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors’ understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company’s properties and interest rates, but also by its capital structure.
The Company presents both FFO allocable to Operating Partnership common unitholders and FFO allocable to common shareholders, as it believes that both are useful performance measures. The Company believes FFO allocable to Operating Partnership common unitholders is a useful performance measure since it conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership. The Company believes FFO allocable to its common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income (loss) attributable to its common shareholders.

6





In the reconciliation of net income (loss) attributable to the Company's common shareholders to FFO allocable to Operating Partnership common unitholders, located in this earnings release, the Company makes an adjustment to add back noncontrolling interest in income (loss) of its Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders. The Company then applies a percentage to FFO of the Operating Partnership common unitholders to arrive at FFO allocable to its common shareholders. The percentage is computed by taking the weighted-average number of common shares outstanding for the period and dividing it by the sum of the weighted-average number of common shares and the weighted-average number of Operating Partnership units held by noncontrolling interests during the period.
FFO does not represent cash flows from operations as defined by GAAP, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company’s operating performance or to cash flow as a measure of liquidity.
The Company believes that it is important to identify the impact of certain significant items on its FFO measures for a reader to have a complete understanding of the Company's results of operations. Therefore, the Company has also presented adjusted FFO measures excluding these items from the applicable periods. Please refer to the reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 10 of this news release for a description of these adjustments.
Same-center Net Operating Income
NOI is a supplemental non-GAAP measure of the operating performance of the Company's shopping centers and other properties. The Company defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).
The Company computes NOI based on the Operating Partnership's pro rata share of both consolidated and unconsolidated properties. The Company believes that presenting NOI and same-center NOI (described below) based on its Operating Partnership’s pro rata share of both consolidated and unconsolidated properties is useful since the Company conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company's common shareholders and the noncontrolling interest in the Operating Partnership. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's calculation of NOI may not be comparable to that of other companies.
Since NOI includes only those revenues and expenses related to the operations of the Company's shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at the malls and operating costs and the impact of those trends on the Company's results of operations. The Company’s calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-off of landlord inducement assets in order to enhance the comparability of results from one period to another. A reconciliation of same-center NOI to net income is located at the end of this earnings release.

7






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





8


CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three and Six Months Ended June 30, 2018
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
148,488

 
$
157,609

 
$
298,849

 
$
317,359

Percentage rents
2,138

 
1,738

 
4,181

 
4,127

Other rents
2,496

 
3,729

 
4,551

 
7,381

Tenant reimbursements
56,614

 
62,231

 
117,227

 
129,522

Management, development and leasing fees
2,643

 
2,577

 
5,364

 
6,029

Other
2,219

 
1,349

 
4,626

 
2,828

Total revenues
214,598

 
229,233

 
434,798

 
467,246

OPERATING EXPENSES:
 
 
 
 
 
 
 
Property operating
29,527

 
30,041

 
62,353

 
64,955

Depreciation and amortization
73,566

 
82,509

 
145,316

 
153,729

Real estate taxes
20,456

 
18,687

 
42,304

 
40,770

Maintenance and repairs
12,059

 
11,716

 
25,238

 
25,068

General and administrative
13,490

 
15,752

 
31,794

 
31,834

Loss on impairment
51,983

 
43,203

 
70,044

 
46,466

Other
245

 
5,019

 
339

 
5,019

Total operating expenses
201,326

 
206,927

 
377,388

 
367,841

Income from operations
13,272

 
22,306

 
57,410

 
99,405

Interest and other income
218

 
31

 
431

 
1,435

Interest expense
(54,203
)
 
(55,065
)
 
(107,970
)
 
(111,266
)
Gain on extinguishment of debt

 
20,420

 

 
24,475

Gain (loss) on investments
387

 
(5,843
)
 
387

 
(5,843
)
Income tax benefit
2,235

 
2,920

 
2,880

 
3,720

Equity in earnings of unconsolidated affiliates
4,368

 
6,325

 
8,107

 
11,698

Income (loss) from continuing operations before gain on sales of real estate assets
(33,723
)
 
(8,906
)
 
(38,755
)
 
23,624

Gain on sales of real estate assets
3,747

 
79,533

 
8,118

 
85,521

Net income (loss)
(29,976
)
 
70,627

 
(30,637
)
 
109,145

Net (income) loss attributable to noncontrolling interests in:
 
 
 
 
 
 
 
Operating Partnership
5,685

 
(5,093
)
 
7,350

 
(8,783
)
Other consolidated subsidiaries
494

 
(24,138
)
 
393

 
(24,851
)
Net income (loss) attributable to the Company
(23,797
)
 
41,396

 
(22,894
)
 
75,511

Preferred dividends
(11,223
)
 
(11,223
)
 
(22,446
)
 
(22,446
)
Net income (loss) attributable to common shareholders
$
(35,020
)
 
$
30,173

 
$
(45,340
)
 
$
53,065

 
 
 
 
 
 
 
 
Basic and diluted per share data attributable to common shareholders:
 
 
 
 
 
 
 
Net income (loss) attributable to common shareholders
$
(0.20
)
 
$
0.18

 
$
(0.26
)
 
$
0.31

Weighted-average common and potential dilutive common
shares outstanding
172,662

 
171,095

 
172,304

 
171,042

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.200

 
$
0.265

 
$
0.400

 
$
0.530


9


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2018


The Company's reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows:
(in thousands, except per share data)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Net income (loss) attributable to common shareholders
$
(35,020
)
 
$
30,173

 
$
(45,340
)
 
$
53,065

Noncontrolling interest in income (loss) of Operating Partnership
(5,685
)
 
5,093

 
(7,350
)
 
8,783

Depreciation and amortization expense of:
 
 
 
 

 
 
 Consolidated properties
73,566

 
82,509

 
145,316

 
153,729

 Unconsolidated affiliates
10,338

 
9,357

 
20,739

 
18,900

 Non-real estate assets
(917
)
 
(792
)
 
(1,838
)
 
(1,656
)
Noncontrolling interests' share of depreciation and amortization
(2,122
)
 
(2,642
)
 
(4,288
)
 
(4,621
)
Loss on impairment, net of taxes
51,983

 
43,183

 
70,044

 
45,250

Gain on depreciable property, net of taxes and noncontrolling interests' share

 
(50,797
)
 
(2,236
)
 
(50,756
)
FFO allocable to Operating Partnership common unitholders
92,143

 
116,084

 
175,047

 
222,694

Litigation expenses (1)

 
9

 

 
52

Nonrecurring professional fees expense (reimbursement) (1)

 
6

 

 
(919
)
(Gain) loss on investments, net of taxes (2)
(287
)
 
5,843

 
(287
)
 
5,843

Non-cash default interest expense (3)
916

 
1,187

 
1,832

 
2,494

Gain on extinguishment of debt, net of noncontrolling interests' share (4)

 
(23,395
)
 

 
(27,450
)
FFO allocable to Operating Partnership common unitholders, as adjusted
$
92,772

 
$
99,734

 
$
176,592

 
$
202,714

 
 
 
 
 
 
 
 
FFO per diluted share
$
0.46

 
$
0.58

 
$
0.88

 
$
1.12

 
 
 
 
 
 
 
 
FFO, as adjusted, per diluted share
$
0.46

 
$
0.50

 
$
0.88

 
$
1.02

 
 
 
 
 
 
 
 
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted
199,767

 
199,371

 
199,731

 
199,326

 
 
 
 
 
 
 
 
(1) Litigation expense and nonrecurring professional fees expense are included in general and administrative expense in the consolidated statements of operations. Nonrecurring professional fees reimbursement is included in interest and other income in the consolidated statements of operations.
(2) The three months and six months ended June 30, 2018 includes a gain on investment related to the land contributed by the Company to the Self Storage at Mid Rivers 50/50 joint venture. The three months and six months ended June 30, 2017 includes a loss on investment related to the write down of the Company's 25% interest in River Ridge Mall based on the contract price to sell such interest to its joint venture partner. The sale closed in August 2017.
(3) The three months and six months ended June 30, 2018 includes default interest expense related to Acadiana Mall. The three months and six months ended June 30, 2017 includes default interest expense related to Wausau Center and Chesterfield Mall. The six months ended June 30, 2017 also includes default interest expense related to Midland Mall.
(4) The three months and six months ended June 30, 2017 primarily represents gain on extinguishment of debt related to the non-recourse loan secured by Chesterfield Mall, which was conveyed to the lender in the second quarter of 2017. The three months and six months ended June 30, 2017 also includes loss on extinguishment of debt related to a prepayment fee on the early retirement of the loans secured by The Outlet Shoppes at Oklahoma City, which was sold in April 2017. The six months ended June 30, 2017 also includes gain on extinguishment of debt related to the non-recourse loan secured by Midland Mall, which was conveyed to the lender in the first quarter of 2017.

    

10


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2018



The reconciliation of diluted EPS to FFO per diluted share is as follows:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Diluted EPS attributable to common shareholders
$
(0.20
)
 
$
0.18

 
$
(0.26
)
 
$
0.31

Eliminate amounts per share excluded from FFO:
 
 
 
 
 
 
 
Depreciation and amortization expense, including amounts from consolidated properties, unconsolidated affiliates, non-real estate assets and excluding amounts allocated to noncontrolling interests
0.40

 
0.44

 
0.80

 
0.83

Loss on impairment, net of taxes
0.26

 
0.22

 
0.35

 
0.23

Gain on depreciable property, net of taxes and noncontrolling interests' share

 
(0.26
)
 
(0.01
)
 
(0.25
)
FFO per diluted share
$
0.46

 
$
0.58

 
$
0.88

 
$
1.12


    
The reconciliations of FFO allocable to Operating Partnership common unitholders to FFO allocable to common shareholders, including and excluding the adjustments noted above, are as follows:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
FFO allocable to Operating Partnership common unitholders
$
92,143

 
$
116,084

 
$
175,047

 
$
222,694

Percentage allocable to common shareholders (1)
86.43
%
 
85.82
%
 
86.27
%
 
85.81
%
FFO allocable to common shareholders
$
79,639

 
$
99,623

 
$
151,013

 
$
191,094

 
 
 
 
 
 
 
 
FFO allocable to Operating Partnership common unitholders, as adjusted
$
92,772

 
$
99,734

 
$
176,592

 
$
202,714

Percentage allocable to common shareholders (1)
86.43
%
 
85.82
%
 
86.27
%
 
85.81
%
FFO allocable to common shareholders, as adjusted
$
80,183

 
$
85,592

 
$
152,346

 
$
173,949

 
 
 
 
 
 
 
 
(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 16.


11


SUPPLEMENTAL FFO INFORMATION:
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Lease termination fees
$
2,744

 
$
864

 
$
9,005

 
$
1,111

    Lease termination fees per share
$
0.01

 
$

 
$
0.05

 
$
0.01

 
 
 
 
 
 
 
 
Straight-line rental income
$
(725
)
 
$
559

 
$
(4,358
)
 
$
632

    Straight-line rental income per share
$

 
$

 
$
(0.02
)
 
$

 
 
 
 
 
 
 
 
Gains on outparcel sales
$
4,338

 
$
2,094

 
$
6,485

 
$
8,091

    Gains on outparcel sales per share
$
0.02

 
$
0.01

 
$
0.03

 
$
0.04

 
 
 
 
 
 
 
 
Net amortization of acquired above- and below-market leases
$
1,387

 
$
1,198

 
$
2,192

 
$
2,416

Net amortization of acquired above- and below-market leases per share
$
0.01

 
$
0.01

 
$
0.01

 
$
0.01

 
 
 
 
 
 
 
 
Net amortization of debt premiums and discounts
$
306

 
$
(206
)
 
$
413

 
$
(403
)
Net amortization of debt premiums and discounts per share
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
Income tax benefit
$
2,235

 
$
2,920

 
$
2,880

 
$
3,720

    Income tax benefit per share
$
0.01

 
$
0.01

 
$
0.01

 
$
0.02

 
 
 
 
 
 
 
 
Gain on extinguishment of debt, net of noncontrolling interests' share
$

 
$
23,395

 
$

 
$
27,450

Gain on extinguishment of debt, net of noncontrolling interests' share per share
$

 
$
0.12

 
$

 
$
0.14

 
 
 
 
 
 
 
 
 Gain (loss) on investments, net of taxes
$
287

 
$
(5,843
)
 
$
287

 
$
(5,843
)
     Gain (loss) on investments, net of taxes per share
$

 
$
(0.03
)
 
$

 
$
(0.03
)
 
 
 
 
 
 
 
 
Non-cash default interest expense
$
(916
)
 
$
(1,187
)
 
$
(1,832
)
 
$
(2,494
)
     Non-cash default interest expense per share
$

 
$
(0.01
)
 
$
(0.01
)
 
$
(0.01
)
 
 
 
 
 
 
 
 
Abandoned projects expense
$
(245
)
 
$
(5,019
)
 
$
(339
)
 
$
(5,019
)
    Abandoned projects expense per share
$

 
$
(0.03
)
 
$

 
$
(0.03
)
 
 
 
 
 
 
 
 
Interest capitalized
$
951

 
$
385

 
$
1,538

 
$
1,224

     Interest capitalized per share
$

 
$

 
$
0.01

 
$
0.01

 
 
 
 
 
 
 
 
Litigation expenses
$

 
$
(9
)
 
$

 
$
(52
)
     Litigation expenses per share
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
Nonrecurring professional fees (expense) reimbursement
$

 
$
(6
)
 
$

 
$
919

Nonrecurring professional fees (expense) reimbursement per share
$

 
$

 
$

 
$


 
As of June 30,
 
2018
 
2017
Straight-line rent receivable
$
57,402

 
$
62,989


12


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2018


Same-center Net Operating Income
(Dollars in thousands)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Net income (loss)
$
(29,976
)
 
$
70,627

 
$
(30,637
)
 
$
109,145

 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
Depreciation and amortization
73,566

 
82,509

 
145,316

 
153,729

Depreciation and amortization from unconsolidated affiliates
10,338

 
9,357

 
20,739

 
18,900

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries
(2,122
)
 
(2,642
)
 
(4,288
)
 
(4,621
)
Interest expense
54,203

 
55,065

 
107,970

 
111,266

Interest expense from unconsolidated affiliates
6,344

 
6,410

 
12,298

 
12,571

Noncontrolling interests' share of interest expense in other consolidated subsidiaries
(2,186
)
 
(1,870
)
 
(4,037
)
 
(3,576
)
Abandoned projects expense
245

 
5,019

 
339

 
5,019

Gain on sales of real estate assets
(3,747
)
 
(79,533
)
 
(8,118
)
 
(85,521
)
(Gain) loss on sales of real estate assets of unconsolidated affiliates
(592
)
 
3

 
(592
)
 
38

Noncontrolling interests' share of gain on sales of real estate assets in other consolidated affiliates

 
26,639

 

 
26,639

(Gain) loss on investment
(387
)
 
5,843

 
(387
)
 
5,843

Gain on extinguishment of debt

 
(20,420
)
 

 
(24,475
)
Noncontrolling interests' share of loss on extinguishment of debt in other consolidated subsidiaries

 
(2,975
)
 

 
(2,975
)
Loss on impairment
51,983

 
43,203

 
70,044

 
46,466

Income tax benefit
(2,235
)
 
(2,920
)
 
(2,880
)
 
(3,720
)
Lease termination fees
(2,744
)
 
(864
)
 
(9,005
)
 
(1,111
)
Straight-line rent and above- and below-market lease amortization
(662
)
 
(1,757
)
 
2,166

 
(3,048
)
Net (income) loss attributable to noncontrolling interests in other consolidated subsidiaries
494

 
(24,138
)
 
393

 
(24,851
)
General and administrative expenses
13,490

 
15,752

 
31,794

 
31,834

Management fees and non-property level revenues
(3,509
)
 
(2,293
)
 
(7,396
)
 
(7,550
)
Operating Partnership's share of property NOI
162,503

 
181,015

 
323,719

 
360,002

Non-comparable NOI
(5,486
)
 
(12,440
)
 
(12,020
)
 
(25,530
)
Total same-center NOI (1)
$
157,017

 
$
168,575

 
$
311,699

 
$
334,472

Total same-center NOI percentage change
(6.9
)%
 
 
 
(6.8
)%
 
 















13




Same-center Net Operating Income
(Continued)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Malls
$
141,694

 
$
152,119

 
$
280,510

 
$
301,686

Associated centers
7,846

 
8,185

 
15,772

 
16,491

Community centers
6,035

 
6,373

 
12,041

 
12,561

Offices and other
1,442

 
1,898

 
3,376

 
3,734

Total same-center NOI (1)
$
157,017

 
$
168,575

 
$
311,699

 
$
334,472

 
 
 
 
 
 
 
 
Percentage Change:
 
 
 
 
 
 
 
Malls
(6.9
)%
 
 
 
(7.0
)%
 
 
Associated centers
(4.1
)%
 
 
 
(4.4
)%
 
 
Community centers
(5.3
)%
 
 
 
(4.1
)%
 
 
Offices and other
(24.0
)%
 
 
 
(9.6
)%
 
 
Total same-center NOI (1)
(6.9
)%
 
 
 
(6.8
)%
 
 

(1)
CBL defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). Same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of June 30, 2018, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ending June 30, 2018. New properties are excluded from same-center NOI, until they meet this criteria. Properties excluded from the same-center pool that would otherwise meet this criteria are properties which are under major redevelopment or being considered for repositioning, where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender, or minority interest properties in which we own an interest of 25% or less.

14


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2018 and 2017

Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
 
As of June 30, 2018
 
Fixed Rate
 
Variable
Rate
 
Total per
Debt
Schedule
 
Unamortized
Deferred
Financing
Costs
 
Total
Consolidated debt
$
3,099,680

 
$
1,089,189

 
$
4,188,869

 
$
(16,516
)
 
$
4,172,353

Noncontrolling interests' share of consolidated debt
(76,413
)
 
(5,387
)
 
(81,800
)
 
642

 
(81,158
)
Company's share of unconsolidated affiliates' debt
555,880

 
82,180

 
638,060

 
(2,177
)
 
635,883

Company's share of consolidated and unconsolidated debt
$
3,579,147

 
$
1,165,982

 
$
4,745,129

 
$
(18,051
)
 
$
4,727,078

Weighted-average interest rate
5.16
%
 
3.57
%
 
4.77
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2017
 
Fixed Rate
 
Variable
Rate
 
Total per
Debt
Schedule
 
Unamortized
Deferred
Financing
Costs
 
Total
Consolidated debt
$
3,184,580

 
$
1,081,266

 
$
4,265,846

 
$
(16,406
)
 
$
4,249,440

Noncontrolling interests' share of consolidated debt
(93,377
)
 
(5,449
)
 
(98,826
)
 
765

 
(98,061
)
Company's share of unconsolidated affiliates' debt
526,136

 
72,002

 
598,138

 
(2,506
)
 
595,632

Company's share of consolidated and unconsolidated debt
$
3,617,339

 
$
1,147,819

 
$
4,765,158

 
$
(18,147
)
 
$
4,747,011

Weighted-average interest rate
5.25
%
 
2.58
%
 
4.61
%
 
 
 
 



Debt-To-Total-Market Capitalization Ratio as of June 30, 2018
(In thousands, except stock price)
 
Shares
Outstanding
 
Stock
Price (1)
 
Value
Common stock and Operating Partnership units
199,428

 
$
5.57

 
$
1,110,814

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
 
 
 
 
1,737,064

Company's share of total debt, excluding unamortized deferred financing costs
 
 
 
 
4,745,129

Total market capitalization
 
 
 
 
$
6,482,193

Debt-to-total-market capitalization ratio
 
 
 
 
73.2
%

(1)
Stock price for common stock and Operating Partnership units equals the closing price of the common stock on June 29, 2018. The stock prices for the preferred stocks represent the liquidation preference of each respective series.





15


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2018 and 2017



Reconciliation of Shares and Operating Partnership Units Outstanding
(In thousands)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
Basic
 
Diluted
 
Basic
 
Diluted
2018:
 
 
 
 
 
 
 
Weighted-average shares - EPS
172,662

 
172,662

 
172,304

 
172,304

Weighted-average Operating Partnership units
27,105

 
27,105

 
27,427

 
27,427

Weighted-average shares - FFO
199,767

 
199,767

 
199,731

 
199,731

 
 
 
 
 
 
 
 
2017:
 
 
 
 
 
 
 
Weighted-average shares - EPS
171,095

 
171,095

 
171,042

 
171,042

Weighted-average Operating Partnership units
28,276

 
28,276

 
28,284

 
28,284

Weighted-average shares - FFO
199,371

 
199,371

 
199,326

 
199,326



Dividend Payout Ratio
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Weighted-average cash dividend per share
$
0.20888

 
$
0.27281

 
$
0.41773

 
$
0.54562

FFO, as adjusted, per diluted fully converted share
$
0.46

 
$
0.50

 
$
0.88

 
$
1.02

Dividend payout ratio
45.4
%
 
54.6
%
 
47.5
%
 
53.5
%

16


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2018
Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
 
 As of
 
June 30,
2018
 
December 31,
2017
ASSETS
 
 
 
Real estate assets:
 
 
 
Land
$
797,045

 
$
813,390

Buildings and improvements
6,591,966

 
6,723,194

 
7,389,011

 
7,536,584

Accumulated depreciation
(2,501,864
)
 
(2,465,095
)

4,887,147

 
5,071,489

Held for sale
17,412

 

Developments in progress
109,562

 
85,346

Net investment in real estate assets
5,014,121

 
5,156,835

Cash and cash equivalents
23,428

 
32,627

Receivables:
 
 
 
Tenant, net of allowance for doubtful accounts of $2,097
      and $2,011 in 2018 and 2017, respectively
76,367

 
83,552

Other, net of allowance for doubtful accounts of $838 in 2018 and 2017
6,056

 
7,570

Mortgage and other notes receivable
8,429

 
8,945

Investments in unconsolidated affiliates
278,168

 
249,192

Intangible lease assets and other assets
172,438

 
166,087

 
$
5,579,007

 
$
5,704,808

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
 
 
 
Mortgage and other indebtedness, net
$
4,172,353

 
$
4,230,845

Accounts payable and accrued liabilities
221,507

 
228,650

Total liabilities
4,393,860

 
4,459,495

Commitments and contingencies
 
 
 
Redeemable noncontrolling interests  
8,694

 
8,835

Shareholders' equity:
 
 
 
Preferred stock, $.01 par value, 15,000,000 shares authorized:
 
 
 
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
7

 
7

Common stock, $.01 par value, 350,000,000 shares
authorized, 172,661,708 and 171,088,778 issued and
outstanding in 2018 and 2017, respectively
1,727

 
1,711

Additional paid-in capital
1,966,491

 
1,974,537

Dividends in excess of cumulative earnings
(880,292
)
 
(836,269
)
Total shareholders' equity
1,087,951

 
1,140,004

Noncontrolling interests
88,502

 
96,474

Total equity
1,176,453

 
1,236,478

 
$
5,579,007

 
$
5,704,808


17


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2018

Condensed Combined Financial Statements - Unconsolidated Affiliates
(Unaudited; in thousands)
 
 As of
 
June 30,
2018
 
December 31,
2017
ASSETS:
 
 
 
Investment in real estate assets
$
2,096,677

 
$
2,089,262

Accumulated depreciation
(650,239
)
 
(618,922
)
 
1,446,438

 
1,470,340

Developments in progress
62,711

 
36,765

Net investment in real estate assets
1,509,149

 
1,507,105

Other assets
195,749

 
201,114

Total assets
$
1,704,898

 
$
1,708,219

 
 
 
 
LIABILITIES:
 
 
 
Mortgage and other indebtedness, net
$
1,312,520

 
$
1,248,817

Other liabilities
41,488

 
41,291

Total liabilities
1,354,008

 
1,290,108

 
 
 
 
OWNERS' EQUITY:
 
 
 
The Company
185,687

 
216,292

Other investors
165,203

 
201,819

Total owners' equity
350,890

 
418,111

Total liabilities and owners’ equity
$
1,704,898

 
$
1,708,219

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 Total revenues
$
55,083

 
$
58,156

 
$
112,264

 
$
117,855

 Depreciation and amortization
(19,525
)
 
(19,496
)
 
(39,312
)
 
(40,125
)
 Operating expenses
(16,831
)
 
(16,639
)
 
(36,811
)
 
(35,387
)
 Income from operations
18,727

 
22,021

 
36,141

 
42,343

 Interest and other income
351

 
430

 
704

 
830

 Interest expense
(13,019
)
 
(13,146
)
 
(25,477
)
 
(25,984
)
 Gain (loss) on sales of real estate assets
1,183

 
(6
)
 
1,183

 
(77
)
 Net income
$
7,242

 
$
9,299

 
$
12,551

 
$
17,112

 
Company's Share for the
Three Months Ended June 30,
 
Company's Share for the
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 Total revenues
$
28,520

 
$
29,663

 
$
58,141

 
$
59,468

 Depreciation and amortization
(10,338
)
 
(9,357
)
 
(20,739
)
 
(18,900
)
 Operating expenses
(8,302
)
 
(7,843
)
 
(18,072
)
 
(16,812
)
 Income from operations
9,880

 
12,463

 
19,330

 
23,756

 Interest and other income
240

 
275

 
483

 
551

 Interest expense
(6,344
)
 
(6,410
)
 
(12,298
)
 
(12,571
)
 Gain (loss) on sales of real estate assets
592

 
(3
)
 
592

 
(38
)
 Net income
$
4,368

 
$
6,325

 
$
8,107

 
$
11,698


18


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2018

EBITDA for real estate ("EBITDAre") is a non-GAAP financial measure which NAREIT defines as net income (loss) (computed in accordance with GAAP), plus interest expense, income tax expense, depreciation and amortization, losses (gains) on the dispositions of depreciable property and impairment write-downs of depreciable property, and after adjustments to reflect the Company's share of EBITDAre from unconsolidated affiliates.  The Company also calculates Adjusted EBITDAre to exclude the non-controlling interest in EBITDAre of consolidated entities, and the Company's share of abandoned projects expense and gain or loss on extinguishment of debt. 

The Company presents the ratio of Adjusted EBITDAre to interest expense because the Company believes that the Adjusted EBITDAre to interest coverage ratio, along with cash flows from operating activities, investing activities and financing activities, provides investors an additional indicator of the Company's ability to incur and service debt.  Adjusted EBITDAre excludes items that are not a normal result of operations which assists the Company and investors in distinguishing changes related to the growth or decline of operations at our properties.  EBITDAre and Adjusted EBITDAre, as presented, may not be comparable to similar measures calculated by other companies.  This non-GAAP measure should not be considered as an alternative to net income, cash from operating activities or any other measure calculated in accordance with GAAP.  Pro rata amounts listed below are calculated using the Company's ownership percentage in the respective joint venture and any other applicable terms.

Ratio of Adjusted EBITDAre to Interest Expense
(Dollars in thousands)

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Net income (loss)
$
(29,976
)
 
$
70,627

 
$
(30,637
)
 
$
109,145

Depreciation and amortization
73,566

 
82,509

 
145,316

 
153,729

Depreciation and amortization from unconsolidated affiliates
10,338

 
9,357

 
20,739

 
18,900

Interest expense
54,203

 
55,065

 
107,970

 
111,266

Interest expense from unconsolidated affiliates
6,344

 
6,410

 
12,298

 
12,571

Income taxes
(1,885
)
 
(2,507
)
 
(2,455
)
 
(3,122
)
Loss on impairment
51,983

 
43,203

 
70,044

 
46,466

Gain on depreciable property

 
(77,469
)
 
(2,236
)
 
(77,430
)
(Gain) loss on investments
(387
)
 
5,843

 
(387
)
 
5,843

EBITDAre (1)
164,186

 
193,038

 
320,652

 
377,368

Gain on extinguishment of debt, net of noncontrolling interests' share

 
(23,395
)
 

 
(27,450
)