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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):  July 31, 2019

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))
Securities registered under Section 12(b) of the Act:
Title of each Class
 
Trading
Symbol(s)
 
Name of each exchange on
which registered
Common Stock, $0.01 par value
 
CBL
 
New York Stock Exchange
7.375% Series D Cumulative Redeemable Preferred Stock, $0.01 par value
 
CBLprD
 
New York Stock Exchange
6.625% Series E Cumulative Redeemable Preferred Stock, $0.01 par value
 
CBLprE
 
New York Stock Exchange
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 July 31, 2019, CBL & Associates Properties, Inc. (the "Company") reported its results for the second quarter ended June 30, 2019. The Company's earnings release and supplemental financial and operating information for the second quarter ended June 30, 2019 is attached as Exhibit 99.1. On August 1, 2019, the Company held a conference call to discuss the results for the second quarter ended June 30, 2019. 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 1, 2019
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit



Exhibit 99.1















399013777_cblmark.jpg



Earnings Release and
Supplemental Financial and Operating Information

For the Three and Six Months Ended
June 30, 2019





399013777_cblmarka01.jpg
Earnings Release and Supplemental Financial and Operating Information
Table of Contents

 
 
Page
 
 
 
 
 
 
 
 
Reconciliations of Supplementary Non-GAAP Financial Measures:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



399013777_pressreleaseheadercopya01.jpg


Contact: Katie Reinsmidt, EVP - Chief Investment Officer, 423.490.8301, [email protected]

CBL PROPERTIES REPORTS RESULTS FOR SECOND QUARTER 2019
Improved Operating Metrics; Full-Year Same-Center NOI Guidance Range Maintained

CHATTANOOGA, Tenn. (July 31, 2019) – CBL Properties (NYSE:CBL) announced results for the second quarter ended June 30, 2019. 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,
 
2019
 
2018
 
%
 
2019
 
2018
 
%
Net loss attributable to common shareholders per diluted share
$
(0.20
)
 
$
(0.20
)
 
 %
 
$
(0.49
)
 
$
(0.26
)
 
(88.5
)%
Funds from Operations ("FFO") per diluted share
$
0.34

 
$
0.46

 
(26.1
)%
 
$
0.56

 
$
0.88

 
(36.4
)%
FFO, as adjusted, per diluted share (1)
$
0.34

 
$
0.46

 
(26.1
)%
 
$
0.64

 
$
0.88

 
(27.3
)%
(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 loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 9 of this news release.
 
KEY TAKEAWAYS:
Same-center sales per square foot for the stabilized mall portfolio for the second quarter improved 4.1%. For the twelve-months ended June 30, 2019, same-center sales increased 0.8% to $381 per square foot compared with the prior-year period.
FFO per diluted share, as adjusted, was $0.34 for the second quarter 2019, compared with $0.46 per share for the second quarter 2018. Second quarter 2019 FFO per share was impacted by higher general and administrative expense due to $0.01 per share related to litigation, $0.02 per share of lower outparcel sales, $0.02 per share of dilution from asset sales completed since the prior-year period and $0.05 per share of lower property NOI.
Total Portfolio Same-center NOI declined 5.7% for the three months and declined 5.3% for the six months ended June 30, 2019, as compared with the prior-year periods.
Portfolio occupancy declined 90 basis points to 90.2% as of June 30, 2019, compared with 91.1% as of June 30, 2018. Same-center mall occupancy was 88.1% as of June 30, 2019, a 130 basis point decline compared with 89.4% as of June 30, 2018.
Year-to-date, CBL has completed or announced gross asset sales totaling $147.9 million (details herein).
Significant progress on its anchor redevelopment program, including two dozen former anchor spaces committed, under construction or with replacements already open.




 
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399013777_pressreleasefootera02.jpg




"We are pleased to see improved performance this quarter in several key areas across our portfolio. Our second quarter results were in-line with expectations with adjusted FFO per share of $0.34 and same-center NOI declining 5.7%," commented Stephen Lebovitz, chief executive officer.  "Lease spreads showed a nice improvement and same-center sales increased over 4% during the second quarter.  With our operating metrics on-track, we are reiterating our annual guidance for same-center NOI. At the same time, we are updating FFO per share guidance for the year primarily to incorporate dilution from recent sales transactions, which we exclude from guidance until announced, as well as lower projected gains on outparcel sales. 
            "The progress we have made on our redevelopment program is energizing our market-dominant properties and our company. As we have said, we have over 20 replacements committed, under construction or open for the 40 closed anchors in our portfolio and are making additional progress every day. The new tenants we are adding, including restaurants, entertainment, service, value and non-retail uses such as medical, office, hotels and residential, drives additional traffic, sales and NOI.
"Our free cash flow of over $200 million is the primary source for funding these redevelopments. Disciplined capital allocation remains a priority, and we are stretching our dollars through joint ventures and ground leases. We have also had strong results year-to-date from our disposition program, with over $145 million of transactions announced or closed year-to-date. We have no major unsecured maturities until December 2023, and the refinancings closed earlier this year have extended our debt maturity profile, providing significant runway to execute our strategy to stabilize and transform our properties.”
       Net loss attributable to common shareholders for the second quarter 2019 was $35.4 million, or a loss of $0.20 per diluted share, compared with a net loss of $35.0 million, or a loss of $0.20 per diluted share, for the second quarter 2018. Net loss for the second quarter 2019 was impacted by a $33.3 million loss on impairment of real estate to write down the carrying value of Eastgate Mall to the property's estimated fair value. The impairment was primarily a result of declines in projected future cash flows.
FFO allocable to common shareholders, as adjusted, for the second quarter 2019 was $59.4 million, or $0.34 per diluted share, compared with $80.2 million, or $0.46 per diluted share, for the second quarter 2018. FFO allocable to the Operating Partnership common unitholders, as adjusted, for the second quarter 2019 was $68.5 million compared with $92.8 million for the second quarter 2018.
Percentage change in same-center Net Operating Income ("NOI")(1):
 
 
Three Months Ended
June 30, 2019
 
Six Months Ended
June 30, 2019
Portfolio same-center NOI
 
(5.7)%
 
(5.3)%
Mall same-center NOI
 
(6.9)%
 
(6.1)%
(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.

Major variances impacting same-center NOI for the quarter ended June 30, 2019, include:
Same-center NOI declined $8.7 million, due to an $11.5 million decrease in revenues offset by a $2.8 million decline in operating expenses.
Rental revenues declined $15.4 million, including a $7.9 million decline in tenant reimbursements and real estate tax reimbursements and an $8.3 million decline in minimum and other rents. Percentage rents increased $0.8 million.
Property operating expenses declined $1.8 million compared with the prior year. Maintenance and repair expenses increased $0.1 million. Real estate tax expenses declined $1.1 million.
 

2




PORTFOLIO OPERATIONAL RESULTS

Occupancy(1):
 
 
As of June 30,
 
 
2019
 
2018
Portfolio occupancy
 
90.2%
 
91.1%
Mall portfolio
 
88.1%
 
89.2%
Same-center malls
 
88.1%
 
89.4%
Stabilized malls 
 
88.3%
 
89.5%
Non-stabilized malls (2)
 
78.0%
 
71.9%
Associated centers
 
96.3%
 
97.9%
Community centers
 
97.6%
 
96.9%
(1)
Occupancy for malls represents percentage of mall store gross leasable area under 20,000 square feet occupied. Occupancy for associated and community centers represents percentage of gross leasable area occupied.
(2)
Represents occupancy for The Outlet Shoppes at Laredo.

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, 2019
 
Six Months Ended
June 30, 2019
Stabilized Malls
 
(3.8)%
 
(7.1)%
New leases
 
(1.4)%
 
4.6%
Renewal leases
 
(4.2)%
 
(9.0)%

Same-Center Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:
 
Twelve Months Ended June 30,
 
 
 
2019
 
2018
 
% Change
Stabilized mall same-center sales per square foot
$
381

 
$
378

 
0.8%
Stabilized mall sales per square foot
$
381

 
$
376

 
1.3%

DISPOSITIONS
Year-to-date, CBL has closed on $120.2 million in asset sales, including the sale of a community center, an office building and a hotel.
In June, CBL completed the sale of the Courtyard by Marriott at Pearland Town Center in Pearland, TX, for $15.1 million, cash.
In July, CBL sold an office building in Chesapeake, VA, for $10.5 million. CBL also completed the sale in July of The Forum at Grandview, a 215,000-square-foot community center located in Madison, MS, for $31.75 million, cash.
CBL has entered into an agreement with its existing joint venture partner, Horizon Group Properties ("Horizon"), whereby Horizon will purchase a 25% interest in The Outlet Shoppes at El Paso for cash of $9.2 million and the assumption of 25% interest in the existing loan (representing approximately $18.5 million as of August 2019). Following the completion of the sale, CBL and Horizon will each own a 50% interest, and Horizon will continue to lease and manage the asset. CBL anticipates closing on the transaction in August.


3




Property
 
Location
 
Date Closed
 
Gross Sales
Price (M)
Cary Towne Center(1)
 
Cary, NC
 
January
 
$
31.5

Honey Creek Mall (1)
 
Terre Haute, IN
 
April
 
$
14.6

The Shoppes at Hickory Point
 
Forsyth, IL
 
April
 
$
2.5

Courtyard by Marriott at Pearland Town Center
 
Pearland, TX
 
June
 
$
15.1

The Forum at Grandview
 
Madison, MS
 
July
 
$
31.8

850 Greenbrier Circle
 
Chesapeake, VA
 
July
 
$
10.5

Various parcels
 
Various
 
Various
 
$
14.2

Total Closed Year-to-Date
 
 
 
 
 
$
120.2

25% interest in The Outlet Shoppes at El Paso (2)
 
El Paso, TX
 
Pending
 
$
27.7

Total
 
 
 
 
 
$
147.9

(1)
100% of sale proceeds utilized to retire existing secured loans.
(2)
Gross amount shown above is comprised of $9.2 million in equity and 25% interest in loan balance at closing of $18.5 million assuming closing occurs in August. Actual gross proceeds may vary with the timing of the close.


FINANCING ACTIVITY    
In April, CBL closed a new $50 million non-recourse loan secured by Volusia Mall for a term of five years at a fixed interest rate of 4.56%. CBL concurrently retired the existing cross-collateralized loans secured by Honey Creek Mall in Terre Haute, IN, and Volusia Mall in Daytona Beach, FL, which aggregated to $64.0 million and bore an interest rate of 8%. CBL used proceeds from the new loan as well as the sale of Honey Creek Mall to retire the maturing loans.

In July, the foreclosure of Triangle Town Center was completed and the related debt was extinguished.

ANCHOR REPLACEMENT PROGRESS
Anchor replacements recently opened or pending include (complete list and additional information can be found in the financial supplement):
Property
Prior Tenant
 
New Tenant(s)
Status
Cherryvale Mall
Bergner's
 
Choice Home Center
Open
Eastland Mall
JCPenney
 
H&M, Planet Fitness
Open
Jefferson Mall
Macy's
 
Round1
Open
Northwoods Mall
Sears
 
Burlington
Open
Kentucky Oaks Mall
Sears
 
Burlington, Ross Dress for Less
Open
West Towne
Sears
 
Dave & Busters, Total Wine
Open
Hanes Mall
Shops
 
Dave & Busters
Open
Parkdale Mall
Macy's
 
Dick's, Five Below, HomeGoods
Open
Brookfield Square
Sears
 
Marcus Theaters, Whirlyball
Opening fall 2019
Laurel Park Place
Carson's
 
Dunham's Sports
Under construction - Opening Q4 '19
Meridian Mall
Younkers
 
High Caliber Karts
Under construction - Opening Q4 '19
Dakota Square
Herberger's
 
Ross Dress for Less
Under construction - Opening Q4 '19
Stroud Mall
Boston
 
Shoprite
Under construction - Opening Q4 '19
Kentucky Oaks Mall
Elder Beerman
 
HomeGoods
Under construction - Opening Q4 '19
Hamilton Place
Sears
 
Dick's Sporting Goods, Dave & Busters, ALoft Hotel, office
Under Construction - Opening 2020
Cherryvale Mall
Sears
 
Tilt
Under construction - Opening Q1/Q2 '20
Imperial Valley
Sears
 
Hobby Lobby
Construction in 2019
Westmoreland Mall
BonTon
 
Stadium Live! Casino
Construction in 2019

4




Property
Prior Tenant
 
New Tenant(s)
Status
Stroud Mall
Sears
 
To be Announced Furniture Store
Construction in 2019
York Galleria
Sears
 
Penn National Casino
Construction in 2019
Richland Mall
Sears
 
Dillard's
Opening Est. 2020
South County Center
Sears
 
Round1
Opening TBD
Hanes Mall
Sears
 
Novant Health
Opening TBD
West Towne Mall
Sears
 
To be Announced Retailer
Opening TBD

OUTLOOK AND GUIDANCE
CBL is updating FFO, as adjusted, per share guidance to incorporate $0.04 per share dilution from dispositions completed and announced, $0.06 per share lower anticipated gains on outparcel sales and $0.01 per share of higher anticipated general and administrative expense related to ongoing litigation. CBL has reduced its projection for outparcel sales gains in part due to a shift in expectation to more ground leased outparcels versus sales as well as the shift in timing of certain sales to 2020. CBL now anticipates achieving 2019 FFO, as adjusted, in the range of $1.30 - $1.35 per diluted share. Guidance incorporates a reserve in the range of $5.0 - $15.0 million (the "Reserve") for potential future unbudgeted loss in rent from tenant bankruptcies, store closures or lease modifications that may occur in 2019. Based on bankruptcy and leasing activity year-to-date, including the impact of any co-tenancy, CBL currently expects to utilize approximately $8 - $10 million of the Reserve.

Key assumptions underlying guidance are as follows:
 
Low
 
High
2019 FFO, as adjusted, per share (includes the Reserve)
1.30
 
1.35
2019 Change in Same-Center NOI ("SC NOI") (Includes the Reserve)
(7.75)%
 
(6.25)%
Reserve for unbudgeted lost rents included in SC NOI and FFO
$15.0 million
 
$5.0 million
Updated expectation for gains on outparcel sales
$2.0 million
 
$4.0 million

Reconciliation of GAAP net income (loss) to 2019 FFO, as adjusted, per share guidance:
 
Low
 
High
Expected diluted earnings per common share
$
(0.60
)
 
$
(0.55
)
Adjust to fully converted shares from common shares
0.08

 
0.08

Expected earnings per diluted, fully converted common share
(0.52
)
 
(0.47
)
Add: depreciation and amortization
1.51

 
1.51

Less: gain on depreciable property
(0.02
)
 
(0.02
)
Add: loss on impairment
0.33

 
0.33

Add: noncontrolling interest in loss of Operating Partnership
(0.08
)
 
(0.08
)
Expected FFO, as adjusted, per diluted, fully converted common share
$
1.22

 
$
1.27

Add: Litigation settlement
0.44

 
0.44

Adjustment for certain significant items
(0.36
)
 
(0.36
)
Expected adjusted FFO per diluted, fully converted common share
$
1.30

 
$
1.35


INVESTOR CONFERENCE CALL AND WEBCAST
CBL Properties will host a conference call on Thursday, August 1, 2019, at 11:00 a.m. ET. To access this interactive teleconference, dial (888) 317‑6003 or (412) 317-6061 and enter the confirmation number, 9046905.  A replay of the conference call will be available through August 8, 2019, by dialing (877) 344-7529 or (412) 317‑0088 and entering the confirmation number, 10131564.

5





The Company will also provide an online webcast and rebroadcast of its second quarter 2019 earnings release conference call.  The live broadcast of the quarterly conference call will be available online at cblproperties.com on Thursday, August 1, 2019, beginning at 11:00 a.m. ET.  The online replay will follow shortly after the call.
To receive the CBL Properties second quarter earnings release and supplemental information, please visit the Invest section of our website at cblproperties.com.
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 108 properties totaling 68.2 million square feet across 26 states, including 68 high-quality enclosed, outlet and open-air retail centers and 9 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.
ADOPTION OF NEW LEASE ACCOUNTING STANDARD
The Company adopted Accounting Standards Codification ("ASC") 842, Leases, effective January 1, 2019, which resulted in the Company revising the presentation of rental revenues in its consolidated statements of operations. In the past, certain components of rental revenues were shown separately in the consolidated statements of operations. Upon the adoption of ASC 842, these amounts have been combined into a single line item. Please see the Company’s Supplemental Financial and Operating Information located in the Invest section of the Company’s website for more information regarding the components of rental revenues.
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.
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

6




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 9 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.
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.

7


CBL & Associates Properties, Inc.
Supplemental Financial and Operating Information
For the Three and Six Months Ended June 30, 2019
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
REVENUES (1):
 
 
 
 
 
 
 
Rental revenues
$
185,393

 
$
207,568

 
$
376,373

 
$
420,297

Management, development and leasing fees
2,586

 
2,643

 
5,109

 
5,364

Other
5,398

 
4,387

 
9,925

 
9,137

Total revenues
193,377

 
214,598

 
391,407

 
434,798

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 
 
 
 
 
 
 
Property operating
(26,532
)
 
(29,527
)
 
(55,512
)
 
(62,353
)
Depreciation and amortization
(64,478
)
 
(73,566
)
 
(134,270
)
 
(145,316
)
Real estate taxes
(19,148
)
 
(20,456
)
 
(39,067
)
 
(42,304
)
Maintenance and repairs
(11,298
)
 
(12,059
)
 
(24,074
)
 
(25,238
)
General and administrative
(14,427
)
 
(13,490
)
 
(36,434
)
 
(31,794
)
Loss on impairment
(41,608
)
 
(51,983
)
 
(66,433
)
 
(70,044
)
Litigation settlement

 

 
(88,150
)
 

Other
(34
)
 
(245
)
 
(34
)
 
(339
)
Total operating expenses
(177,525
)
 
(201,326
)
 
(443,974
)
 
(377,388
)
 
 
 
 
 
 
 
 
OTHER INCOME (EXPENSES):
 
 
 
 
 
 
 
Interest and other income
356

 
218

 
845

 
431

Interest expense
(52,482
)
 
(54,203
)
 
(106,480
)
 
(107,970
)
Gain on extinguishment of debt

 

 
71,722

 

Gain on investments

 
387

 

 
387

Gain on sales of real estate assets
5,527

 
3,747

 
5,755

 
8,118

Income tax benefit (provision)
(813
)
 
2,235

 
(952
)
 
2,880

Equity in earnings of unconsolidated affiliates
1,872

 
4,368

 
5,180

 
8,107

Total other expenses
(45,540
)
 
(43,248
)
 
(23,930
)
 
(88,047
)
Net loss
(29,688
)
 
(29,976
)
 
(76,497
)
 
(30,637
)
Net loss attributable to noncontrolling interests in:
 
 
 
 
 
 
 
Operating Partnership
5,454

 
5,685

 
13,212

 
7,350

Other consolidated subsidiaries
57

 
494

 
132

 
393

Net loss attributable to the Company
(24,177
)
 
(23,797
)
 
(63,153
)
 
(22,894
)
Preferred dividends
(11,223
)
 
(11,223
)
 
(22,446
)
 
(22,446
)
Net loss attributable to common shareholders
$
(35,400
)
 
$
(35,020
)
 
$
(85,599
)
 
$
(45,340
)
 
 
 
 
 
 
 
 
Basic and diluted per share data attributable to common shareholders:
 
 
 
 
 
 
 
Net loss attributable to common shareholders
$
(0.20
)
 
$
(0.20
)
 
$
(0.49
)
 
$
(0.26
)
Weighted-average common and potential dilutive common
shares outstanding
173,473

 
172,662

 
173,363

 
172,304

 
 
 
 
 
 
 
 
(1) See "Adoption of Lease Accounting Standard" on page 6 for further information on the presentation of rental revenues in accordance with the new standard adopted effective January 1, 2019.

8


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2019


The Company's reconciliation of net 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,
 
2019
 
2018
 
2019
 
2018
Net loss attributable to common shareholders
$
(35,400
)
 
$
(35,020
)
 
$
(85,599
)
 
$
(45,340
)
Noncontrolling interest in loss of Operating Partnership
(5,454
)
 
(5,685
)
 
(13,212
)
 
(7,350
)
Depreciation and amortization expense of:
 
 
 
 

 
 
 Consolidated properties
64,478

 
73,566

 
134,270

 
145,316

 Unconsolidated affiliates
11,462

 
10,338

 
22,128

 
20,739

 Non-real estate assets
(902
)
 
(917
)
 
(1,799
)
 
(1,838
)
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries
(2,648
)
 
(2,122
)
 
(4,805
)
 
(4,288
)
Loss on impairment
41,608

 
51,983

 
66,433

 
70,044

Gain on depreciable property, net of taxes
(4,599
)
 

 
(4,841
)
 
(2,236
)
FFO allocable to Operating Partnership common unitholders
68,545

 
92,143

 
112,575

 
175,047

Litigation settlement, net of taxes (1)

 

 
87,667

 

Gain on investments, net of taxes (2)

 
(287
)
 

 
(287
)
Non-cash default interest expense (3)

 
916

 
542

 
1,832

Gain on extinguishment of debt (4)

 

 
(71,722
)
 

FFO allocable to Operating Partnership common unitholders, as adjusted
$
68,545

 
$
92,772

 
$
129,062

 
$
176,592

 
 
 
 
 
 
 
 
FFO per diluted share
$
0.34

 
$
0.46

 
$
0.56

 
$
0.88

 
 
 
 
 
 
 
 
FFO, as adjusted, per diluted share
$
0.34

 
$
0.46

 
$
0.64

 
$
0.88

 
 
 
 
 
 
 
 
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted
200,231

 
199,767

 
200,122

 
199,731

 
 
 
 
 
 
 
 
(1) The six months ended June 30, 2019 is comprised of the accrued maximum expense related to the proposed settlement of a class action lawsuit.
(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.
(3) The six months ended June 30, 2019 includes default interest expense related to Acadiana Mall and Cary Towne Center. The three months and six months ended June 30, 2018 includes default interest expense related to Acadiana Mall.
(4) The six months ended June 30, 2019 includes a gain on extinguishment of debt related to the non-recourse loan secured by Acadiana Mall, which was conveyed to the lender in the first quarter of 2019, and a gain on extinguishment of debt related to the non-recourse loan secured by Cary Towne Center, which was sold in the first quarter of 2019.

    

9


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2019



The reconciliation of diluted EPS to FFO per diluted share is as follows:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Diluted EPS attributable to common shareholders
$
(0.20
)
 
$
(0.20
)
 
$
(0.49
)
 
$
(0.26
)
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
0.36

 
0.40

 
0.75

 
0.80

Loss on impairment
0.20

 
0.26

 
0.32

 
0.35

Gain on depreciable property, net of taxes
(0.02
)
 

 
(0.02
)
 
(0.01
)
FFO per diluted share
$
0.34

 
$
0.46

 
$
0.56

 
$
0.88


    
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,
 
2019
 
2018
 
2019
 
2018
FFO allocable to Operating Partnership common unitholders
$
68,545

 
$
92,143

 
$
112,575

 
$
175,047

Percentage allocable to common shareholders (1)
86.64
%
 
86.43
%
 
86.63
%
 
86.27
%
FFO allocable to common shareholders
$
59,387

 
$
79,639

 
$
97,524

 
$
151,013

 
 
 
 
 
 
 
 
FFO allocable to Operating Partnership common unitholders, as adjusted
$
68,545

 
$
92,772

 
$
129,062

 
$
176,592

Percentage allocable to common shareholders (1)
86.64
%
 
86.43
%
 
86.63
%
 
86.27
%
FFO allocable to common shareholders, as adjusted
$
59,387

 
$
80,183

 
$
111,806

 
$
152,346

 
 
 
 
 
 
 
 
(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 14.



10


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2019

SUPPLEMENTAL FFO INFORMATION:
 
 
 
 
 
 
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Lease termination fees
$
1,073

 
$
2,744

 
$
2,090

 
$
9,005

    Lease termination fees per share
$
0.01

 
$
0.01

 
$
0.01

 
$
0.05

 
 
 
 
 
 
 
 
Straight-line rental income
$
717

 
$
(725
)
 
$
954

 
$
(4,358
)
    Straight-line rental income per share
$

 
$

 
$

 
$
(0.02
)
 
 
 
 
 
 
 
 
Gains on outparcel sales, net of taxes
$
315

 
$
4,338

 
$
933

 
$
6,485

    Gains on outparcel sales per share, net of taxes per share
$

 
$
0.02

 
$

 
$
0.03

 
 
 
 
 
 
 
 
Net amortization of acquired above- and below-market leases
$
691

 
$
1,387

 
$
1,499

 
$
2,192

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

 
$
0.01

 
$
0.01

 
$
0.01

 
 
 
 
 
 
 
 
Net amortization of debt premiums and discounts
$
325

 
$
306

 
$
649

 
$
413

Net amortization of debt premiums and discounts per share
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
Income tax benefit (provision)
$
(813
)
 
$
2,235

 
$
(952
)
 
$
2,880

    Income tax benefit (provision) per share
$

 
$
0.01

 
$

 
$
0.01

 
 
 
 
 
 
 
 
Gain on extinguishment of debt
$

 
$

 
$
71,722

 
$

Gain on extinguishment of debt per share
$

 
$

 
$
0.36

 
$

 
 
 
 
 
 
 
 
 Gain on investments, net of taxes
$

 
$
287

 
$

 
$
287

     Gain on investments, net of taxes per share
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
Non-cash default interest expense
$

 
$
(916
)
 
$
(542
)
 
$
(1,832
)
     Non-cash default interest expense per share
$

 
$

 
$

 
$
(0.01
)
 
 
 
 
 
 
 
 
Abandoned projects expense
$
(34
)
 
$
(245
)
 
$
(34
)
 
$
(339
)
    Abandoned projects expense per share
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
Interest capitalized
$
619

 
$
951

 
$
1,182

 
$
1,538

     Interest capitalized per share
$

 
$

 
$
0.01

 
$
0.01

 
 
 
 
 
 
 
 
Litigation settlement, net of taxes
$

 
$

 
$
(87,667
)
 
$

     Litigation settlement, net of taxes per share
$

 
$

 
$
(0.44
)
 
$


 
As of June 30,
 
2019
 
2018
Straight-line rent receivable
$
54,494

 
$
57,402


11


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2019


Same-center Net Operating Income
(Dollars in thousands)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Net loss
$
(29,688
)
 
$
(29,976
)
 
$
(76,497
)
 
$
(30,637
)
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
Depreciation and amortization
64,478

 
73,566

 
134,270

 
145,316

Depreciation and amortization from unconsolidated affiliates
11,462

 
10,338

 
22,128

 
20,739

Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries
(2,648
)
 
(2,122
)
 
(4,805
)
 
(4,288
)
Interest expense
52,482

 
54,203

 
106,480

 
107,970

Interest expense from unconsolidated affiliates
6,586

 
6,344

 
13,156

 
12,298

Noncontrolling interests' share of interest expense in other consolidated subsidiaries
(1,717
)
 
(2,186
)
 
(3,483
)
 
(4,037
)
Abandoned projects expense
34

 
245

 
34

 
339

Gain on sales of real estate assets
(5,527
)
 
(3,747
)
 
(5,755
)
 
(8,118
)
(Gain) loss on sales of real estate assets of unconsolidated affiliates
3

 
(592
)
 
(627
)
 
(592
)
Gain on investment

 
(387
)
 

 
(387
)
Gain on extinguishment of debt

 

 
(71,722
)
 

Loss on impairment
41,608

 
51,983

 
66,433

 
70,044

Litigation settlement

 

 
88,150

 

Income tax (benefit) provision
813

 
(2,235
)
 
952

 
(2,880
)
Lease termination fees
(1,073
)
 
(2,744
)
 
(2,090
)
 
(9,005
)
Straight-line rent and above- and below-market lease amortization
(1,408
)
 
(662
)
 
(2,453
)
 
2,166

Net loss attributable to noncontrolling interests in other consolidated subsidiaries
57

 
494

 
132

 
393

General and administrative expenses
14,427

 
13,490

 
36,434

 
31,794

Management fees and non-property level revenues
(4,118
)
 
(3,632
)
 
(6,784
)
 
(7,481
)
Operating Partnership's share of property NOI
145,771

 
162,380

 
293,953

 
323,634

Non-comparable NOI
(2,799
)
 
(10,714
)
 
(8,583
)
 
(22,205
)
Total same-center NOI (1)
$
142,972

 
$
151,666

 
$
285,370

 
$
301,429

Total same-center NOI percentage change
(5.7
)%
 
 
 
(5.3
)%
 
 


















12


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2019



Same-center Net Operating Income
(Continued)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
Malls
$
127,790

 
$
137,263

 
$
255,364

 
$
272,058

Associated centers
8,166

 
7,959

 
16,293

 
15,962

Community centers
5,778

 
5,409

 
11,261

 
10,804

Offices and other
1,238

 
1,035

 
2,452

 
2,605

Total same-center NOI (1)
$
142,972

 
$
151,666

 
$
285,370

 
$
301,429

 
 
 
 
 
 
 
 
Percentage Change:
 
 
 
 
 
 
 
Malls
(6.9
)%
 
 
 
(6.1
)%
 
 
Associated centers
2.6
 %
 
 
 
2.1
 %
 
 
Community centers
6.8
 %
 
 
 
4.2
 %
 
 
Offices and other
19.6
 %
 
 
 
(5.9
)%
 
 
Total same-center NOI (1)
(5.7
)%
 
 
 
(5.3
)%
 
 

(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, 2019, 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, 2019. 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.

13


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2019 and 2018

Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
 
As of June 30, 2019
 
Fixed Rate
 
Variable
Rate
 
Total per
Debt
Schedule
 
Unamortized
Deferred
Financing
Costs
 
Total
Consolidated debt
$
2,946,440

 
$
938,989

 
$
3,885,429

 
$
(19,490
)
 
$
3,865,939

Noncontrolling interests' share of consolidated debt
(93,451
)
 

 
(93,451
)
 
747

 
(92,704
)
Company's share of unconsolidated affiliates' debt
544,829

 
79,251

 
624,080

 
(2,360
)
 
621,720

Company's share of consolidated and unconsolidated debt
$
3,397,818

 
$
1,018,240

 
$
4,416,058

 
$
(21,103
)
 
$
4,394,955

Weighted-average interest rate
5.10
%
 
4.73
%
 
5.01
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
%
 
 
 
 

Total Market Capitalization as of June 30, 2019
(In thousands, except stock price)
 
Shares
Outstanding
 
Stock
Price (1)
 
Value
Common stock and Operating Partnership units
200,230

 
$
1.04

 
$
208,239

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
 
 
 
 
834,489

Company's share of total debt, excluding unamortized deferred financing costs
 
 
 
 
4,416,058

Total market capitalization
 
 
 
 
$
5,250,547


(1)
Stock price for common stock and Operating Partnership units equals the closing price of the common stock on June 28, 2019. 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
June 30,
 
Six Months Ended
June 30,
 
Basic
 
Diluted
 
Basic
 
Diluted
2019:
 
 
 
 
 
 
 
Weighted-average shares - EPS
173,473

 
173,473

 
173,363

 
173,363

Weighted-average Operating Partnership units
26,758

 
26,758

 
26,759

 
26,759

Weighted-average shares - FFO
200,231

 
200,231

 
200,122

 
200,122

 
 
 
 
 
 
 
 
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



14


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2019
Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
 
 As of
 
June 30,
2019
 
December 31,
2018
ASSETS
 
 
 
Real estate assets:
 
 
 
Land
$
756,946

 
$
793,944

Buildings and improvements
6,153,444

 
6,414,886

 
6,910,390

 
7,208,830

Accumulated depreciation
(2,477,552
)
 
(2,493,082
)

4,432,838

 
4,715,748

Held for sale
44,574

 
30,971

Developments in progress
47,666

 
38,807

Net investment in real estate assets
4,525,078

 
4,785,526

Cash and cash equivalents
20,483

 
25,138

Receivables:
 
 
 
Tenant, net of allowance for doubtful accounts of $2,337 in 2018
72,485

 
77,788

Other, net of allowance for doubtful accounts of $838 in 2018
8,450

 
7,511

Mortgage and other notes receivable
6,326

 
7,672

Investments in unconsolidated affiliates
270,860

 
283,553

Intangible lease assets and other assets
144,458

 
153,665

 
$
5,048,140

 
$
5,340,853

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
 
 
 
Mortgage and other indebtedness, net
$
3,865,939

 
$
4,043,180

Accounts payable and accrued liabilities
260,265

 
218,217

Liabilities related to assets held for sale
663

 
43,716

Total liabilities
4,126,867

 
4,305,113

Commitments and contingencies
 
 
 
Redeemable noncontrolling interests  
2,687

 
3,575

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,
173,471,893 and 172,656,458 issued and
outstanding in 2019 and 2018, respectively
1,735

 
1,727

Additional paid-in capital
1,966,549

 
1,968,280

Dividends in excess of cumulative earnings
(1,104,504
)
 
(1,005,895
)
Total shareholders' equity
863,805

 
964,137

Noncontrolling interests
54,781

 
68,028

Total equity
918,586

 
1,032,165

 
$
5,048,140

 
$
5,340,853


15


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
As of June 30, 2019
Condensed Combined Financial Statements - Unconsolidated Affiliates
(Unaudited; in thousands)
 
 As of
 
June 30,
2019
 
December 31,
2018
ASSETS:
 
 
 
Investment in real estate assets
$
2,103,300

 
$
2,097,088

Accumulated depreciation
(701,616
)
 
(674,275
)
 
1,401,684

 
1,422,813

Developments in progress
23,431

 
12,569

Net investment in real estate assets
1,425,115

 
1,435,382

Other assets
172,545

 
188,521

Total assets
$
1,597,660

 
$
1,623,903

 
 
 
 
LIABILITIES:
 
 
 
Mortgage and other indebtedness, net
$
1,315,885

 
$
1,319,949

Other liabilities
37,152

 
39,777

Total liabilities
1,353,037

 
1,359,726

 
 
 
 
OWNERS' EQUITY:
 
 
 
The Company
179,120

 
191,050

Other investors
65,503

 
73,127

Total owners' equity
244,623

 
264,177

Total liabilities and owners’ equity
$
1,597,660

 
$
1,623,903

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2019
 
2018
 
2019
 
2018
 Total revenues
$
54,230

 
$
55,083

 
$
110,097

 
$
112,264

 Depreciation and amortization
(20,869
)
 
(19,525
)
 
(40,226
)
 
(39,312
)
 Operating expenses
(16,118
)
 
(16,831
)
 
(33,039
)
 
(36,811
)
 Income from operations
17,243

 
18,727

 
36,832

 
36,141

 Interest and other income
348

 
351

 
699

 
704

 Interest expense
(14,594
)
 
(13,019
)
 
(29,158
)
 
(25,477
)
 Gain (loss) on sales of real estate assets
(4
)
 
1,183

 
630

 
1,183

 Net income
$
2,993

 
$
7,242

 
$
9,003

 
$
12,551

 
Company's Share for the
Three Months Ended June 30,
 
Company's Share for the
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
 Total revenues
$
27,335

 
$
28,520

 
$
55,208

 
$
58,141

 Depreciation and amortization
(11,462
)
 
(10,338
)
 
(22,128
)
 
(20,739
)
 Operating expenses
(7,653
)
 
(8,302
)
 
(15,854
)
 
(18,072
)
 Income from operations
8,220

 
9,880

 
17,226

 
19,330

 Interest and other income
241

 
240

 
483

 
483

 Interest expense
(6,586
)
 
(6,344
)
 
(13,156
)
 
(12,298
)
 Gain (loss) on sales of real estate assets
(3
)
 
592

 
627

 
592

 Net income
$
1,872

 
$
4,368

 
$
5,180

 
$
8,107


16


CBL & Associates Properties, Inc.
Supplemental Financial And Operating Information
For the Three and Six Months Ended June 30, 2019

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, gain or loss on extinguishment of debt and litigation settlement, net of taxes. 

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,
 
2019
 
2018
 
2019
 
2018
Net loss
$
(29,688
)
 
$
(29,976
)
 
$
(76,497
)
 
$
(30,637
)
Depreciation and amortization
64,478

 
73,566