CHATTANOOGA, Tenn.--(BUSINESS WIRE)--CBL Properties (NYSE: CBL) announced results for the third quarter ended September 30, 2022. Financial results for the periods from January 1, 2021, through September 30, 2021, are referred to as those of the “Predecessor” period. Financial results for the period from January 1, 2022, through September 30, 2022, are referred to as those of the “Successor” period. Results of operations as reported in the consolidated financial statements for these periods are prepared in accordance with GAAP. 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.
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Net loss attributable to common shareholders |
|
$ |
(14,510 |
) |
|
|
$ |
(41,720 |
) |
Funds from Operations ("FFO") |
|
$ |
49,494 |
|
|
|
$ |
74,491 |
|
FFO, as adjusted (1) |
|
$ |
59,001 |
|
|
|
$ |
95,329 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Nine Months Ended
|
|
|
|
Nine Months Ended
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Net loss attributable to common shareholders |
|
$ |
(96,830 |
) |
|
|
$ |
(77,365 |
) |
Funds from Operations ("FFO") |
|
$ |
115,402 |
|
|
|
$ |
215,526 |
|
FFO, as adjusted (1) |
|
$ |
176,348 |
|
|
|
$ |
243,484 |
|
(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 10 of this news release. |
KEY TAKEAWAYS:
- Ongoing increases in occupancy and improvement in lease spreads drive increased full-year expectations for NOI and narrows the range for FFO. 2022 FFO, as adjusted now expected in the range of $7.40 - $7.67 per diluted share vs. prior guidance of $7.18 - $7.67 per diluted share. 2022 same-center NOI guidance increased by $8.0 million to a range of $424.0 - $438.0 million.
- Portfolio occupancy as of September 30, 2022, was 90.5%. Portfolio occupancy was 88.4% as of September 30, 2021. Portfolio occupancy as of September 30, 2022, increased 210-basis points from the prior-year quarter-end and increased 100-basis points from June 30, 2022. Same-center occupancy for malls, lifestyle centers and outlet centers was 89.1% as of September 30, 2022. Same-center occupancy for malls, lifestyle centers and outlet centers was 86.7% as of September 30, 2021. The quarter-over-quarter improvement in same-center occupancy for malls, lifestyle centers and outlet centers was 240-basis points.
- Third quarter new and renewal comparable space leases for malls, lifestyle centers and outlet centers were signed at 5.2% higher average rents versus the prior leases, marking a notable reversal in trends.
- Same-center tenant sales per square foot for the trailing 12-months ended September 30, 2022, was $440. Same-center sales tenant per square foot for the trailing 12-months (excluding 2020) ended September 30, 2021, was $431. The year-over-year improvement in tenant sales per square foot was 2.1%.
- FFO, as adjusted, allocable to Operating Partnership common unitholders, for the three months ended September 30, 2022, was $59.0 million. FFO, as adjusted, allocable to Operating Partnership common unitholders was $95.3 million in the prior-year period. Interest payments on the senior secured notes and credit facility were not required to be made during the third quarter 2021, due to the Company’s bankruptcy filing on November 1, 2020.
- Same-center NOI for the three and nine months ended September 30, 2022, was $105.5 million and $322.9 million, respectively. Same-center NOI for the three and nine months ended September 30, 2021, was $113.5 million and $317.4 million, respectively. Same-center NOI declined 7% for the three months and increased 1.8% for the nine months ended September 30, 2022, from the prior year periods. NOI growth in the third quarter was impacted by a lower recovery of uncollectable revenues and increased operating expenses, primarily due to wage inflation.
- As of September 30, 2022, the Company had $335.7 million of unrestricted cash and marketable securities.
- CBL’s Board of Directors declared a $0.25 per share cash dividend for the second and third quarters of 2022, providing cash returns to shareholders.
"2022 has been an outstanding year for CBL, demonstrating the strength and resiliency of our portfolio and our company," said Stephen D. Lebovitz, CBL's chief executive officer. "We are pleased with our operating results in the third quarter, including 210-basis-point growth in quarter-over-quarter portfolio occupancy and our first quarter of overall positive lease spreads in several years, driving an increase in our full-year expectations for same-center NOI. Additionally, August and September sales growth was positive, a notable reversal of the year-to-date trend.
"Year-to-date, we completed over $1.1 billion in financing activity, significantly de-risking our balance sheet, reducing interest costs and increasing cash flow as we locked in favorable rates. As a result, we benefit from a simplified capital structure primarily comprised of non-recourse loans, a strong cash position, a pool of unencumbered assets and significant free cash flow. We are focused on maximizing shareholder returns and delivering capital to our shareholders through our dividend program. As announced, we expect to provide at least $1.00 per share of annualized regular cash dividends as well as a special dividend to be declared later this year. We are also committed to a highly disciplined approach to capital allocation as we evaluate opportunities to deploy capital at our properties as well as externally. We are in an ideal position to be selective and opportunistic.
"As we approach the holiday season, we are optimistic for a healthy close to 2022. Retailers are well stocked and aggressively promoting their business. Brick-and-mortar stores are a key ingredient to success in today’s retail world. Just a few weeks ago, we celebrated the grand opening of the new Von Maur premier fashion department store at West Towne Mall in Madison, Wisconsin. The community’s embrace of this opening is further evidence of the attraction of new and exciting stores and their power to drive traffic and sales. We are working on a number of value-enhancing projects across our portfolio, further demonstrating our expertise in delivering financially successful projects that create substantial value at the properties and for our company."
NON-GAAP FINANCIAL RESULTS
Net loss attributable to common shareholders for the three months ended September 30, 2022, was $14.5 million. Net loss for the three months ended September 30, 2021, was $41.7 million,
Net loss attributable to common shareholders for the nine months ended September 30, 2022, was $96.8 million. Net loss for the nine months ended September 30, 2021, was $77.4 million,
FFO, as adjusted, allocable to Operating Partnership common unitholders, for the three months ended September 30, 2022, was $59.0 million. FFO, as adjusted, allocable to Operating Partnership common unitholders was $95.3 million, for the three months ended September 30, 2021.
FFO, as adjusted, allocable to Operating Partnership common unitholders, for the nine months ended September 30, 2022, was $176.3 million. FFO, as adjusted, allocable to Operating Partnership common unitholders was $243.5 million, for the nine months ended September 30, 2021.
Same-center Net Operating Income (“NOI”) (1):
|
|
Successor |
|
Predecessor |
|
||||
|
|
Three Months
|
|
Three Months
|
|
||||
Total Revenues |
|
$ |
161,218 |
|
|
$ |
164,895 |
|
|
Total Expenses |
|
$ |
55,671 |
|
$ |
51,361 |
|
||
Total portfolio same-center NOI |
|
$ |
105,547 |
|
|
|
$ |
113,534 |
|
|
|
|
|
|
|
|
|
||
Estimate for uncollectable revenues (recovery) |
|
$ |
(302 |
) |
|
|
$ |
(3,670 |
) |
(1) | CBL’s definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items such as straight-line rents and reimbursements, write-offs of landlord inducements and net amortization of acquired above and below market leases. |
Same-center NOI for the third quarter declined $8.0 million or 7.0% from the prior-year period. The decline was driven by a $3.7 million decline in total revenues and a $4.3 million increase in operating expenses. Revenues were unfavorably impacted by a $3.4 million variance in the total estimate for uncollectable revenues.
|
|
Successor |
|
Predecessor |
|
||||
|
|
Nine Months Ended
|
|
Nine Months Ended
|
|
||||
Total Revenues |
|
$ |
484,232 |
|
|
$ |
470,131 |
|
|
Total Expenses |
|
$ |
161,298 |
|
$ |
152,770 |
|
||
Total portfolio same-center NOI |
|
$ |
322,933 |
|
|
|
$ |
317,361 |
|
|
|
|
|
|
|
|
|
||
Estimate for uncollectable revenues (recovery) |
|
$ |
(3,719 |
) |
|
|
$ |
2,828 |
|
(1) | CBL’s definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items such as straight-line rents and reimbursements, write-offs of landlord inducements and net amortization of acquired above and below market leases. |
Same-center NOI for nine months ended September 30, 2022, increased $5.6 million or 1.8% from the prior-year period. The increase was driven by a $14.1 million increase in total revenues, partially offset by an $8.5 million increase in operating expenses. Revenues were favorably impacted by a $6.5 million variance in the total estimate for uncollectable revenues.
PORTFOLIO OPERATIONAL RESULTS
Occupancy(1):
|
|
Successor |
|
|
Predecessor |
|
|
As of
|
|
|
As of
|
|
|
2022 |
|
|
2021 |
Total portfolio |
|
90.5% |
|
|
88.4% |
Malls, Lifestyle Centers and Outlet Centers: |
|
|
|
|
|
Total malls |
|
88.7% |
|
|
85.9% |
Total lifestyle centers |
|
90.6% |
|
|
86.8% |
Total outlet centers |
|
90.9% |
|
|
90.1% |
Total same-center malls, lifestyle centers and outlet centers |
|
89.1% |
|
|
86.7% |
All Other: |
|
|
|
|
|
Total open-air centers |
|
94.7% |
|
|
94.7% |
Total other |
|
93.0% |
|
|
98.7% |
(1) | Occupancy for malls, lifestyle centers and outlet centers represent percentage of in-line gross leasable area under 20,000 square feet occupied. Occupancy for open-air centers represents percentage of gross leasable area occupied. |
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
|
|
Nine Months Ended
|
|
|
2022 |
|
2022 |
Stabilized Malls, Lifestyle Centers and Outlet Centers |
|
5.2% |
|
(6.3)% |
New leases |
|
85.3% |
|
14.3% |
Renewal leases |
|
(2.3)% |
|
(9.1)% |
Same-Center Sales Per Square Foot for In-line Tenants 10,000 Square Feet or Less(1):
|
|
Successor |
|
|
Predecessor |
|
|||
|
|
Sales Per Square
|
|
|
Sales Per Square
|
|
|||
|
|
2022 |
|
|
2021 (1) |
|
|||
Mall, Lifestyle Center and Outlet Center same-center sales per square foot |
|
$ |
440 |
|
|
$ |
431 |
|
|
(1) | Due to the temporary property closures that occurred during 2020 related to COVID-19, the majority of our tenants did not report sales for the full reporting period. As a result, we are not able to provide a complete measure of sales per square foot for the periods in the year ended December 31, 2020. Sales per square foot for the trailing twelve months ended September 30, 2021, is comprised of tenant sales reported for the periods October 1 through December 31, 2019, and January 1 through September 30, 2021. |
Same-center tenant sales per square foot for the trailing twelve months ended September 30, 2022, increased 2.1% as compared with the trailing twelve months ended September 30, 2021 (excludes 2020). Same-center tenant sales per square foot for the third quarter 2022, was $105.41. Same-center tenant sales per square foot for the third quarter 2021, was $107.32. Same-center tenant sales for the third quarter 2022 declined 1.8% as compared with the prior-year period.
DIVIDEND
On November 10, 2022, CBL’s Board of Directors declared a regular quarterly cash dividend for the three months ended December 31, 2022, of $0.25 per share. The dividend, which equates to an annual dividend payment of $1.00 per share, is payable on December 30, 2022, to shareholders of record as of December 1, 2022.
Additionally on November 10th, CBL announced that based on refined tax projections for the twelve months ending December 31, 2022, CBL expects to distribute a special one-time dividend in the range of $65 to $85 million to meet minimum distribution requirements. The exact amount of the special dividend will be determined by CBL’s Board of Directors before year-end and will be subject to the Board’s ongoing review of the Company’s tax projections over the remainder of the year in relation to current projections. Subject to IRS guidelines, the special dividend may be distributed in all cash or in a combination of cash and common stock, as determined at the time by CBL’s Board of Directors.
FINANCING ACTIVITY
Year-to-date, CBL completed more than $1.1 billion in financing activity. Details of financings completed in the third quarter 2022 and subsequent are outlined below.
During the third quarter, CBL completed the modification and extensions of the loan secured by Parkdale Mall in Beaumont, TX ($64.2 million). The loan was extended to March 2026, at the existing interest rate of 5.85%.
In October, CBL finalized the modification of the loan secured by Southpark Mall in Richmond, VA ($54.4 million). The loan was extended through June 2026 at the existing interest rate of 4.85%.
Additionally in October, the modification of the $35.2 million recourse loan secured by The Outlet Shoppes at Gettysburg in Gettysburg, PA was completed. The loan balance was reduced to $21.0 million ($10.5 million at CBL's share), and the loan was converted to non-recourse.
In August, CBL conveyed Asheville Mall in Asheville, NC, to the lender in exchange for cancelation of the $62.1 million loan secured by the property. In September, the foreclosure of Eastgate Mall in Cincinnati, OH, and in October, the foreclosure of Greenbrier Mall in Chesapeake, VA, were completed in satisfaction of an aggregate $91.6 million of loans. CBL is cooperating with a foreclosure or conveyance of Westgate Mall in Spartanburg, SC, ($29.6 million) and Alamance Crossing East in Burlington, NC, ($41.7 million) and anticipates both properties will be placed into receivership imminently. The foreclosures or conveyances of Westgate Mall, Alamance Crossing East and Greenbrier Mall result in a total of approximately $132.9 million of debt that will be removed from CBL’s pro rata share of total debt. The three loans generate an estimated debt yield of approximately 10%. CBL does not recognize earnings or receive cash flow from the properties in receivership.
In October, CBL completed a short-term extension to January 2023 for the loan secured by Cross Creek Mall in Fayetteville, NC ($98.7 million). CBL is in discussions with the lender for a two-year extension/modification of the loan, which it anticipates closing before year-end. CBL is also in discussions with the lender for a potential extension/modification of the loan secured by West County Center located in St. Louis, MO ($81.5 million at CBL’s share).
DISPOSITIONS
During the third quarter 2022, CBL completed the sale of three land parcels for $6.2 million. Year-to-date, CBL has grossed more than $9.4 million from dispositions.
REDEVELOPMENT ACTIVITY
On Saturday, October 15, CBL celebrated the opening of the Von Maur premier fashion department store at West Towne Mall in Madison, Wisconsin. The more than 82,000-square-foot store opened in the former Boston Store location and is one of only two department store openings in the country this year.
Detailed project information is available in CBL’s Financial Supplement for Q3 2022, which can be found in the Invest – Financial Reports section of CBL’s website at cblproperties.com.
OUTLOOK AND GUIDANCE
After incorporating results for the third quarter 2022, CBL is providing updated guidance for 2022 for FFO, as adjusted, in the range of $229.0 million - $237.0 million or $7.40 - $7.67 per diluted share. The assumption for same-center NOI for the year increased by $8.0 million at both the high and low end, to the range of $424.0 million to $438.0 million. The improved expectations are primarily as a result of better than anticipated leasing results and occupancy growth.
Key Guidance Assumptions:
|
|
Low |
|
High |
||||
2022 FFO, as adjusted |
|
$229 million |
|
|
$237 million |
|
||
2022 FFO, as adjusted, per share |
|
$ |
7.40 |
|
|
$ |
7.67 |
|
Weighted Average Common Shares Outstanding |
|
30.9 million |
|
|
30.9 million |
|
||
2022 Same-Center NOI ("SC NOI") |
|
$424 million |
|
|
$438 million |
|
||
2022 Change in Same-Center NOI |
|
|
(3.4 |
)% |
|
|
(0.2 |
)% |
Reconciliation of GAAP Earnings Per Share to 2022 FFO, as Adjusted, Per Share:
|
|
Low |
|
High |
||||
Expected diluted earnings per common share |
|
$ |
(4.83 |
) |
|
$ |
(4.56 |
) |
Depreciation and amortization |
|
|
9.57 |
|
|
|
9.57 |
|
Debt discount accretion, net of noncontrolling interests' share |
|
|
5.68 |
|
|
|
5.68 |
|
Loss on Impairment |
|
|
0.01 |
|
|
|
0.01 |
|
Gain on depreciable property |
|
|
(0.02 |
) |
|
|
(0.02 |
) |
Adjustment for unconsolidated affiliates with negative investment |
|
|
(1.17 |
) |
|
|
(1.17 |
) |
Non-cash default interest expense |
|
|
(0.64 |
) |
|
|
(0.64 |
) |
Gain on deconsolidated |
|
|
(1.17 |
) |
|
|
(1.17 |
) |
Adjustment for litigation settlement |
|
|
(0.02 |
) |
|
|
(0.02 |
) |
Reorganization item, net |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
Expected FFO, as adjusted, per diluted, fully converted common share |
|
$ |
7.40 |
|
|
$ |
7.67 |
|
2022 Estimate of Capital Items:
|
|
Low |
High |
2022 Estimated Deferred Maintenance/Tenant Allowances |
|
$35 million |
$45 million |
2022 Estimated Development/Redevelopment Expenditures |
|
$10 million |
$20 million |
2022 Estimated Principal Amortization (Including Est. Term Loan ECF) |
|
$85 million |
$105 million |
Total Estimate |
|
$130 million |
$170 million |
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 owned and managed portfolio is comprised of 94 properties totaling 58.5 million square feet across 22 states, including 56 high-quality enclosed malls, outlet centers and lifestyle retail centers as well as more than 30 open-air centers and other assets. CBL seeks to continuously strengthen 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.
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.
Pro Rata Share of Debt
The Company presents debt based on the carrying value of its pro rata ownership share (including the carrying value of 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.
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Three Months
|
|
|
|
Three Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
REVENUES: |
|
|
|
|
|
|
|
||
Rental revenues |
|
$ |
131,642 |
|
|
|
$ |
145,539 |
|
Management, development and leasing fees |
|
|
1,783 |
|
|
|
|
1,780 |
|
Other |
|
|
2,855 |
|
|
|
|
3,056 |
|
Total revenues |
|
|
136,280 |
|
|
|
|
150,375 |
|
EXPENSES: |
|
|
|
|
|
|
|
||
Property operating |
|
|
(24,390 |
) |
|
|
|
(23,818 |
) |
Depreciation and amortization |
|
|
(61,050 |
) |
|
|
|
(46,479 |
) |
Real estate taxes |
|
|
(13,880 |
) |
|
|
|
(13,957 |
) |
Maintenance and repairs |
|
|
(10,272 |
) |
|
|
|
(9,482 |
) |
General and administrative |
|
|
(14,625 |
) |
|
|
|
(13,502 |
) |
Loss on impairment |
|
|
— |
|
|
|
|
(63,160 |
) |
Litigation settlement |
|
|
36 |
|
|
|
|
89 |
|
Other |
|
|
— |
|
|
|
|
(104 |
) |
Total expenses |
|
|
(124,181 |
) |
|
|
|
(170,413 |
) |
OTHER INCOME (EXPENSES): |
|
|
|
|
|
|
|
||
Interest and other income |
|
|
152 |
|
|
|
|
510 |
|
Interest expense |
|
|
(37,652 |
) |
|
|
|
(19,039 |
) |
Loss on available-for-sale securities |
|
|
(39 |
) |
|
|
|
— |
|
Gain on sales of real estate assets |
|
|
3,528 |
|
|
|
|
8,684 |
|
Reorganization items, net |
|
|
1,220 |
|
|
|
|
(12,008 |
) |
Income tax (provision) benefit |
|
|
(2,422 |
) |
|
|
|
1,234 |
|
Equity in earnings (losses) of unconsolidated affiliates |
|
|
5,702 |
|
|
|
|
(2,224 |
) |
Total other expenses |
|
|
(29,511 |
) |
|
|
|
(22,843 |
) |
Net loss |
|
|
(17,412 |
) |
|
|
|
(42,881 |
) |
Net (income) loss attributable to noncontrolling interests in: |
|
|
|
|
|
|
|
||
Operating Partnership |
|
|
(25 |
) |
|
|
|
1,085 |
|
Other consolidated subsidiaries |
|
|
3,143 |
|
|
|
|
76 |
|
Net loss attributable to the Company |
|
|
(14,294 |
) |
|
|
|
(41,720 |
) |
Dividends allocable to unvested restricted stock |
|
|
(216 |
) |
|
|
|
— |
|
Net loss attributable to common shareholders |
|
$ |
(14,510 |
) |
|
|
$ |
(41,720 |
) |
Basic and diluted per share data attributable to common shareholders: |
|
|
|
|
|
|
|
||
Net loss attributable to common shareholders |
|
$ |
(0.47 |
) |
|
|
$ |
(0.21 |
) |
Weighted-average common and potential dilutive common shares outstanding |
|
|
30,973 |
|
|
|
|
196,454 |
|
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
|
|
Successor |
|
|
Predecessor |
|
|||
|
|
Nine Months
|
|
|
Nine Months
|
|
|||
|
|
2022 |
|
|
2021 |
|
|||
REVENUES: |
|
|
|
|
|
|
|||
Rental revenues |
|
$ |
398,806 |
|
|
$ |
405,030 |
|
|
Management, development and leasing fees |
|
|
5,338 |
|
|
|
4,888 |
|
|
Other |
|
|
9,256 |
|
|
|
10,202 |
|
|
Total revenues |
|
|
413,400 |
|
|
|
420,120 |
|
|
EXPENSES: |
|
|
|
|
|
|
|||
Property operating |
|
|
(69,046 |
) |
|
|
(65,243 |
) |
|
Depreciation and amortization |
|
|
(194,469 |
) |
|
|
(142,090 |
) |
|
Real estate taxes |
|
|
(42,569 |
) |
|
|
(45,618 |
) |
|
Maintenance and repairs |
|
|
(31,068 |
) |
|
|
(29,047 |
) |
|
General and administrative |
|
|
(51,149 |
) |
|
|
(37,383 |
) |
|
Loss on impairment |
|
|
(252 |
) |
|
|
(120,342 |
) |
|
Litigation settlement |
|
|
182 |
|
|
|
890 |
|
|
Other |
|
|
(834 |
) |
|
|
(391 |
) |
|
Total expenses |
|
|
(389,205 |
) |
|
|
(439,224 |
) |
|
OTHER INCOME (EXPENSES): |
|
|
|
|
|
|
|||
Interest and other income |
|
|
1,216 |
|
|
|
2,038 |
|
|
Interest expense |
|
|
(183,428 |
) |
|
|
(65,468 |
) |
|
Gain on deconsolidation |
|
|
36,250 |
|
|
|
55,131 |
|
|
Loss on available-for-sale securities |
|
|
(39 |
) |
|
|
— |
|
|
Gain on sales of real estate assets |
|
|
3,547 |
|
|
|
8,492 |
|
|
Reorganization items, net |
|
|
262 |
|
|
|
(52,014 |
) |
|
Income tax provision |
|
|
(2,751 |
) |
|
|
(222 |
) |
|
Equity in earnings (losses) of unconsolidated affiliates |
|
|
16,308 |
|
|
|
(9,575 |
) |
|
Total other expenses |
|
|
(128,635 |
) |
|
|
(61,618 |
) |
|
Net loss |
|
|
(104,440 |
) |
|
|
(80,722 |
) |
|
Net loss attributable to noncontrolling interests in: |
|
|
|
|
|
|
|||
Operating Partnership |
|
|
34 |
|
|
|
2,013 |
|
|
Other consolidated subsidiaries |
|
|
8,002 |
|
|
|
1,344 |
|
|
Net loss attributable to the Company |
|
|
(96,404 |
) |
|
|
(77,365 |
) |
|
Dividends allocable to unvested restricted stock |
|
|
(426 |
) |
|
|
— |
|
|
Net loss attributable to common shareholders |
|
$ |
(96,830 |
) |
|
$ |
(77,365 |
) |
|
Basic and diluted per share data attributable to common shareholders: |
|
|
|
|
|
|
|||
Net loss attributable to common shareholders |
|
$ |
(3.26 |
) |
|
$ |
(0.39 |
) |
|
Weighted-average common and potential dilutive common shares outstanding |
|
|
29,725 |
|
|
|
196,474 |
|
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)
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Three Months
|
|
|
|
Three Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Net loss attributable to common shareholders |
|
$ |
(14,510 |
) |
|
|
$ |
(41,720 |
) |
Noncontrolling interest in income (loss) of Operating Partnership |
|
|
25 |
|
|
|
|
(1,085 |
) |
Depreciation and amortization expense of: |
|
|
|
|
|
|
|
||
Consolidated properties |
|
|
61,050 |
|
|
|
|
46,479 |
|
Unconsolidated affiliates |
|
|
3,665 |
|
|
|
|
13,480 |
|
Non-real estate assets |
|
|
(123 |
) |
|
|
|
(416 |
) |
Dividends allocable to unvested restricted stock |
|
|
216 |
|
|
|
|
— |
|
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries |
|
|
(829 |
) |
|
|
|
(571 |
) |
Loss on impairment |
|
|
— |
|
|
|
|
63,160 |
|
Gain on depreciable property |
|
|
— |
|
|
|
|
(4,836 |
) |
FFO allocable to Operating Partnership common unitholders |
|
|
49,494 |
|
|
|
|
74,491 |
|
Debt discount accretion, net of noncontrolling interests' share (1) |
|
|
25,425 |
|
|
|
|
— |
|
Adjustment for unconsolidated affiliates with negative investment (2) |
|
|
(13,116 |
) |
|
|
|
— |
|
Litigation settlement (3) |
|
|
(36 |
) |
|
|
|
(89 |
) |
Non-cash default interest expense (4) |
|
|
(1,585 |
) |
|
|
|
8,919 |
|
Loss on available-for-sale securities |
|
|
39 |
|
|
|
|
— |
|
Reorganization items, net (5) |
|
|
(1,220 |
) |
|
|
|
12,008 |
|
FFO allocable to Operating Partnership common unitholders, as adjusted |
|
$ |
59,001 |
|
|
|
$ |
95,329 |
|
FFO per diluted share |
|
$ |
1.55 |
|
|
|
$ |
0.37 |
|
FFO, as adjusted, per diluted share |
|
$ |
1.85 |
|
|
|
$ |
0.47 |
|
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted |
|
|
31,831 |
|
|
|
|
201,559 |
|
(1) | In conjunction with fresh start accounting upon emergence from bankruptcy, the Company recognized debt discounts equal to the difference between the outstanding balance of mortgage notes payable and the estimated fair value of such mortgage notes payable. The debt discounts are accreted over the terms of the respective mortgage notes payable using the effective interest method. |
(2) | Represents the Company’s share of the earnings (losses) before depreciation and amortization expense of unconsolidated affiliates where the Company is not recognizing equity in earnings (losses) because its investment in the unconsolidated affiliate is below zero. |
(3) | Represents a credit to litigation settlement expense in each of the three-month periods ended September 30, 2022 and 2021 related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit. |
(4) | The three months ended September 30, 2022 includes the reversal of default interest expense when waivers or forbearance agreements were obtained. The three months ended September 30, 2021 includes default interest expense related to loans secured by properties that were in default prior to the Company filing bankruptcy, as well as loans secured by properties that remain in default due to the Company filing bankruptcy. |
(5) | Represents costs incurred subsequent to the Company filing bankruptcy associated with the Company’s reorganization efforts, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees expensed in accordance with ASC 852. |
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)
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Nine Months
|
|
|
|
Nine Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Net loss attributable to common shareholders |
|
$ |
(96,830 |
) |
|
|
$ |
(77,365 |
) |
Noncontrolling interest in loss of Operating Partnership |
|
|
(34 |
) |
|
|
|
(2,013 |
) |
Depreciation and amortization expense of: |
|
|
|
|
|
|
|
||
Consolidated properties |
|
|
194,469 |
|
|
|
|
142,090 |
|
Unconsolidated affiliates |
|
|
21,004 |
|
|
|
|
40,466 |
|
Non-real estate assets |
|
|
(524 |
) |
|
|
|
(1,448 |
) |
Dividends allocable to unvested restricted stock |
|
|
426 |
|
|
|
|
— |
|
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries |
|
|
(2,666 |
) |
|
|
|
(1,710 |
) |
Loss on impairment, net of taxes |
|
|
186 |
|
|
|
|
120,342 |
|
Gain on depreciable property |
|
|
(629 |
) |
|
|
|
(4,836 |
) |
FFO allocable to Operating Partnership common unitholders |
|
|
115,402 |
|
|
|
|
215,526 |
|
Debt discount accretion, net of noncontrolling interests' share (1) |
|
|
153,924 |
|
|
|
|
— |
|
Adjustment for unconsolidated affiliates with negative investment (2) |
|
|
(36,123 |
) |
|
|
|
— |
|
Senior secured notes fair value adjustment (3) |
|
|
(395 |
) |
|
|
|
— |
|
Litigation settlement (4) |
|
|
(182 |
) |
|
|
|
(890 |
) |
Non-cash default interest expense (5) |
|
|
(19,805 |
) |
|
|
|
31,965 |
|
Gain on deconsolidation (6) |
|
|
(36,250 |
) |
|
|
|
(55,131 |
) |
Loss on available-for-sale securities |
|
|
39 |
|
|
|
|
— |
|
Reorganization items, net (7) |
|
|
(262 |
) |
|
|
|
52,014 |
|
FFO allocable to Operating Partnership common unitholders, as adjusted |
|
$ |
176,348 |
|
|
|
$ |
243,484 |
|
FFO per diluted share |
|
$ |
3.78 |
|
|
|
$ |
1.07 |
|
FFO, as adjusted, per diluted share |
|
$ |
5.77 |
|
|
|
$ |
1.21 |
|
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted |
|
|
30,568 |
|
|
|
|
201,587 |
|
(1) | In conjunction with fresh start accounting upon emergence from bankruptcy, the Company recognized debt discounts equal to the difference between the outstanding balance of mortgage notes payable and the estimated fair value of such mortgage notes payable. The debt discounts are accreted over the terms of the respective mortgage notes payable using the effective interest method. |
(2) | Represents the Company’s share of the earnings (losses) before depreciation and amortization expense of unconsolidated affiliates where the Company is not recognizing equity in earnings (losses) because its investment in the unconsolidated affiliate is below zero. |
(3) | Represents the fair value adjustment recorded on the senior secured notes as interest expense. |
(4) | Represents a credit to litigation settlement expense in each of the nine-month periods ended September 30, 2022 and 2021 related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit. |
(5) | The nine months ended September 30, 2022 includes the reversal of default interest expense when waivers or forbearance agreements were obtained. The nine months ended September 30, 2021 includes default interest expense related to loans secured by properties that were in default prior to the Company filing bankruptcy, as well as loans secured by properties that remain in default due to the Company filing bankruptcy. |
(6) | For the nine months ended September 30, 2022, the Successor Company deconsolidated Greenbrier Mall due to a loss of control when the property was placed into receivership in connection with the foreclosure process. For the nine months ended September 30, 2021, the Predecessor Company deconsolidated Asheville Mall and Park Plaza due to a loss of control when the properties were placed into receivership in connection with the foreclosure process. |
(7) | Represents costs incurred subsequent to the Company filing bankruptcy associated with the Company’s reorganization efforts, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees expensed in accordance with ASC 852. |
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Three Months
|
|
|
|
Three Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Diluted EPS attributable to common shareholders |
|
$ |
(0.47 |
) |
|
|
$ |
(0.21 |
) |
Add amounts per share included in FFO: |
|
|
|
|
|
|
|
||
Unvested restricted stock |
|
|
0.02 |
|
|
|
|
— |
|
Eliminate amounts per share excluded from FFO: |
|
|
|
|
|
|
|
||
Depreciation and amortization expense, including amounts from
|
|
|
2.00 |
|
|
|
|
0.29 |
|
Loss on impairment |
|
|
— |
|
|
|
|
0.31 |
|
Gain on depreciable property |
|
|
— |
|
|
|
|
(0.02 |
) |
FFO per diluted share |
|
$ |
1.55 |
|
|
|
$ |
0.37 |
|
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Nine Months
|
|
|
|
Nine Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Diluted EPS attributable to common shareholders |
|
$ |
(3.26 |
) |
|
|
$ |
(0.39 |
) |
Add amounts per share included in FFO: |
|
|
|
|
|
|
|
||
Unvested restricted stock |
|
|
0.09 |
|
|
|
|
— |
|
Eliminate amounts per share excluded from FFO: |
|
|
|
|
|
|
|
||
Depreciation and amortization expense, including amounts from
|
|
|
6.96 |
|
|
|
|
0.89 |
|
Loss on impairment, net of taxes |
|
|
0.01 |
|
|
|
|
0.59 |
|
Gain on depreciable property |
|
|
(0.02 |
) |
|
|
|
(0.02 |
) |
FFO per diluted share |
|
$ |
3.78 |
|
|
|
$ |
1.07 |
|
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Three Months
|
|
|
|
Three Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
SUPPLEMENTAL FFO INFORMATION: |
|
|
|
|
|
|
|
||
Lease termination fees |
|
$ |
1,572 |
|
|
|
$ |
2,051 |
|
|
|
|
|
|
|
|
|
||
Straight-line rental income adjustment |
|
$ |
2,058 |
|
|
|
$ |
2,711 |
|
|
|
|
|
|
|
|
|
||
Gain on outparcel sales, net of taxes |
|
$ |
3,561 |
|
|
|
$ |
3,864 |
|
|
|
|
|
|
|
|
|
||
Net amortization of acquired above- and below-market leases |
|
$ |
(5,438 |
) |
|
|
$ |
60 |
|
|
|
|
|
|
|
|
|
||
Income tax benefit (provision) |
|
$ |
(2,422 |
) |
|
|
$ |
1,234 |
|
|
|
|
|
|
|
|
|
||
Abandoned projects expense |
|
$ |
— |
|
|
|
$ |
(104 |
) |
|
|
|
|
|
|
|
|
||
Interest capitalized |
|
$ |
156 |
|
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
||
Estimate of uncollectable revenues |
|
$ |
(368 |
) |
|
|
$ |
4,348 |
|
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Nine Months
|
|
|
|
Nine Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
SUPPLEMENTAL FFO INFORMATION: |
|
|
|
|
|
|
|
||
Lease termination fees |
|
$ |
4,020 |
|
|
|
$ |
3,329 |
|
|
|
|
|
|
|
|
|
||
Straight-line rental income adjustment |
|
$ |
9,400 |
|
|
|
$ |
(1,146 |
) |
|
|
|
|
|
|
|
|
||
Gain on outparcel sales, net of taxes |
|
$ |
3,580 |
|
|
|
$ |
3,655 |
|
|
|
|
|
|
|
|
|
||
Net amortization of acquired above- and below-market leases |
|
$ |
(16,487 |
) |
|
|
$ |
185 |
|
|
|
|
|
|
|
|
|
||
Income tax provision |
|
$ |
(2,751 |
) |
|
|
$ |
(222 |
) |
|
|
|
|
|
|
|
|
||
Abandoned projects expense |
|
$ |
(834 |
) |
|
|
$ |
(391 |
) |
|
|
|
|
|
|
|
|
||
Interest capitalized |
|
$ |
531 |
|
|
|
$ |
32 |
|
|
|
|
|
|
|
|
|
||
Estimate of uncollectable revenues |
|
$ |
3,850 |
|
|
|
$ |
(6,561 |
) |
|
|
|
|
|
|
|
|
||
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
As of September
|
|
|
|
As of September
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Straight-line rent receivable |
|
$ |
12,343 |
|
|
|
$ |
50,609 |
|
Same-center Net Operating Income
(Dollars in thousands)
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Three Months
|
|
|
|
Three Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Net loss |
|
$ |
(17,412 |
) |
|
|
$ |
(42,881 |
) |
Adjustments: |
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
61,050 |
|
|
|
|
46,479 |
|
Depreciation and amortization from unconsolidated affiliates |
|
|
3,665 |
|
|
|
|
13,480 |
|
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries |
|
|
(829 |
) |
|
|
|
(571 |
) |
Interest expense |
|
|
37,652 |
|
|
|
|
19,039 |
|
Interest expense from unconsolidated affiliates |
|
|
25,297 |
|
|
|
|
10,647 |
|
Noncontrolling interests' share of interest expense in other consolidated subsidiaries |
|
|
(2,688 |
) |
|
|
|
(663 |
) |
Abandoned projects expense |
|
|
— |
|
|
|
|
104 |
|
Gain on sales of real estate assets |
|
|
(3,528 |
) |
|
|
|
(8,684 |
) |
Gain on sales of real estate assets of unconsolidated affiliates |
|
|
(33 |
) |
|
|
|
(70 |
) |
Adjustment for unconsolidated affiliates with negative investment |
|
|
(13,116 |
) |
|
|
|
— |
|
Loss on available-for-sale securities |
|
|
39 |
|
|
|
|
— |
|
Loss on impairment |
|
|
— |
|
|
|
|
63,160 |
|
Litigation settlement |
|
|
(36 |
) |
|
|
|
(89 |
) |
Reorganization items, net |
|
|
(1,220 |
) |
|
|
|
12,008 |
|
Income tax provision (benefit) |
|
|
2,422 |
|
|
|
|
(1,234 |
) |
Lease termination fees |
|
|
(1,572 |
) |
|
|
|
(2,051 |
) |
Straight-line rent and above- and below-market lease amortization |
|
|
3,380 |
|
|
|
|
(2,771 |
) |
Net loss attributable to noncontrolling interests in other consolidated subsidiaries |
|
|
3,143 |
|
|
|
|
76 |
|
General and administrative expenses |
|
|
14,625 |
|
|
|
|
13,502 |
|
Management fees and non-property level revenues |
|
|
(683 |
) |
|
|
|
(1,344 |
) |
Operating Partnership's share of property NOI |
|
|
110,156 |
|
|
|
|
118,137 |
|
Non-comparable NOI |
|
|
(4,609 |
) |
|
|
|
(4,603 |
) |
Total same-center NOI (1)(2) |
|
$ |
105,547 |
|
|
|
$ |
113,534 |
|
(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). 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 September 30, 2022, 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 September 30, 2022. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these 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. |
(2) | Same-center NOI of the successor company was $105,547 for the three months ended September 30, 2022. Same-center NOI of the predecessor company was $113,534 for the three months ended September 30, 2021. Same-center NOI of the successor company was 7.0% lower for the three months ended September 30, 2022. |
Same-center Net Operating Income
(Dollars in thousands)
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Nine Months
|
|
|
|
Nine Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Net loss |
|
$ |
(104,440 |
) |
|
|
$ |
(80,722 |
) |
Adjustments: |
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
194,469 |
|
|
|
|
142,090 |
|
Depreciation and amortization from unconsolidated affiliates |
|
|
21,004 |
|
|
|
|
40,466 |
|
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries |
|
|
(2,666 |
) |
|
|
|
(1,710 |
) |
Interest expense |
|
|
183,428 |
|
|
|
|
65,468 |
|
Interest expense from unconsolidated affiliates |
|
|
65,454 |
|
|
|
|
31,008 |
|
Noncontrolling interests' share of interest expense in other consolidated subsidiaries |
|
|
(7,783 |
) |
|
|
|
(2,508 |
) |
Abandoned projects expense |
|
|
834 |
|
|
|
|
391 |
|
Gain on sales of real estate assets |
|
|
(3,547 |
) |
|
|
|
(8,492 |
) |
Gain on sales of real estate assets of unconsolidated affiliates |
|
|
(662 |
) |
|
|
|
(70 |
) |
Adjustment for unconsolidated affiliates with negative investment |
|
|
(36,123 |
) |
|
|
|
— |
|
Gain on deconsolidation |
|
|
(36,250 |
) |
|
|
|
(55,131 |
) |
Loss on available-for-sale securities |
|
|
39 |
|
|
|
|
— |
|
Loss on impairment |
|
|
252 |
|
|
|
|
120,342 |
|
Litigation settlement |
|
|
(182 |
) |
|
|
|
(890 |
) |
Reorganization items, net |
|
|
(262 |
) |
|
|
|
52,014 |
|
Income tax provision |
|
|
2,751 |
|
|
|
|
222 |
|
Lease termination fees |
|
|
(4,020 |
) |
|
|
|
(3,329 |
) |
Straight-line rent and above- and below-market lease amortization |
|
|
7,087 |
|
|
|
|
961 |
|
Net loss attributable to noncontrolling interests in other consolidated subsidiaries |
|
|
8,002 |
|
|
|
|
1,344 |
|
General and administrative expenses |
|
|
51,149 |
|
|
|
|
37,383 |
|
Management fees and non-property level revenues |
|
|
(1,798 |
) |
|
|
|
(7,135 |
) |
Operating Partnership's share of property NOI |
|
|
336,736 |
|
|
|
|
331,702 |
|
Non-comparable NOI |
|
|
(13,803 |
) |
|
|
|
(14,341 |
) |
Total same-center NOI (1)(2) |
|
$ |
322,933 |
|
|
|
$ |
317,361 |
|
(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). 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 September 30, 2022, 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 September 30, 2022. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these 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. |
(2) | Same-center NOI of the successor company was $322,933 for the nine months ended September 30, 2022. Same-center NOI of the predecessor company was $317,361 for the nine months ended September 30, 2021. Same-center NOI of the successor company was 1.8% higher for the nine months ended September 30, 2022. |
Same-center Net Operating Income
(Continued)
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Three Months
|
|
|
|
Three Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Malls |
|
$ |
73,562 |
|
|
|
$ |
81,716 |
|
Outlet centers |
|
|
4,604 |
|
|
|
|
4,189 |
|
Lifestyle centers |
|
|
8,695 |
|
|
|
|
8,732 |
|
Open-air centers |
|
|
13,534 |
|
|
|
|
13,369 |
|
Outparcels and other |
|
|
5,152 |
|
|
|
|
5,528 |
|
Total same-center NOI (1) |
|
$ |
105,547 |
|
|
|
$ |
113,534 |
|
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Nine Months
|
|
|
|
Nine Months
|
|
||
|
|
2022 |
|
|
|
2021 |
|
||
Malls |
|
$ |
226,968 |
|
|
|
$ |
225,802 |
|
Outlet centers |
|
|
13,450 |
|
|
|
|
12,180 |
|
Lifestyle centers |
|
|
26,525 |
|
|
|
|
25,259 |
|
Open-air centers |
|
|
39,793 |
|
|
|
|
37,931 |
|
Outparcels and other |
|
|
16,197 |
|
|
|
|
16,189 |
|
Total same-center NOI (1) |
|
$ |
322,933 |
|
|
|
$ |
317,361 |
|
(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). 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 September 30, 2022, 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 September 30, 2022. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these 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. |
Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)
|
|
As of September 30, 2022 (Successor) |
|
|||||||||||||||||||||
|
|
Fixed
|
|
|
Variable
|
|
|
Total per
|
|
|
Unamortized
|
|
|
Unamortized
|
|
|
Total |
|
||||||
Consolidated debt |
|
$ |
1,049,307 |
|
|
$ |
1,074,839 |
|
|
$ |
2,124,146 |
|
|
$ |
(16,621 |
) |
|
$ |
(90,821 |
) |
|
$ |
2,016,704 |
|
Noncontrolling interests' share of consolidated debt |
|
|
(32,594 |
) |
|
|
(13,493 |
) |
|
|
(46,087 |
) |
|
|
85 |
|
|
|
13,548 |
|
|
|
(32,454 |
) |
Company's share of unconsolidated affiliates' debt |
|
|
624,670 |
|
|
|
73,356 |
|
|
|
698,026 |
|
|
|
(2,294 |
) |
|
|
— |
|
|
|
695,732 |
|
Other debt (2) |
|
|
61,647 |
|
|
|
— |
|
|
|
61,647 |
|
|
|
— |
|
|
|
— |
|
|
|
61,647 |
|
Company's share of consolidated, unconsolidated and other debt |
|
$ |
1,703,030 |
|
|
$ |
1,134,702 |
|
|
$ |
2,837,732 |
|
|
$ |
(18,830 |
) |
|
$ |
(77,273 |
) |
|
$ |
2,741,629 |
|
Weighted-average interest rate |
|
|
4.85 |
% |
|
|
5.53 |
% |
|
|
5.12 |
% |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
As of September 30, 2021 (Predecessor) |
|
|||||||||||||||||||||
|
|
Fixed
|
|
|
Variable
|
|
|
Total per
|
|
|
Unamortized
|
|
|
Unamortized
|
|
|
Total |
|
||||||
Consolidated debt (3) |
|
$ |
2,330,175 |
|
|
$ |
1,181,787 |
|
|
$ |
3,511,962 |
|
|
$ |
(3,202 |
) |
|
$ |
— |
|
|
$ |
3,508,760 |
|
Noncontrolling interests' share of consolidated debt |
|
|
(29,563 |
) |
|
|
— |
|
|
|
(29,563 |
) |
|
|
225 |
|
|
|
— |
|
|
|
(29,338 |
) |
Company's share of unconsolidated affiliates' debt |
|
|
615,166 |
|
|
|
127,337 |
|
|
|
742,503 |
|
|
|
(2,404 |
) |
|
|
— |
|
|
|
740,099 |
|
Other debt (2) |
|
|
138,926 |
|
|
|
— |
|
|
|
138,926 |
|
|
|
— |
|
|
|
— |
|
|
|
138,926 |
|
Company's share of consolidated and unconsolidated debt |
|
$ |
3,054,704 |
|
|
$ |
1,309,124 |
|
|
$ |
4,363,828 |
|
|
$ |
(5,381 |
) |
|
$ |
— |
|
|
$ |
4,358,447 |
|
Weighted-average interest rate |
|
|
5.04 |
% |
|
|
8.52 |
%(4) |
|
6.09 |
% |
|
|
|
|
|
|
|
|
|
(1) | In conjunction with fresh start accounting, the Company estimated the fair value of its mortgage notes with the assistance of a third-party valuation advisor. This resulted in recognizing a debt discount on the Effective Date. The debt discount is accreted over the term of the respective debt using the effective interest method. |
(2) | Represents the outstanding loan balance for properties that were deconsolidated due to a loss of control when the properties were placed into receivership in connection with the foreclosure process. |
(3) | Includes $2,489,676 of liabilities subject to compromise. |
(4) | The administrative agent informed the Company that interest would accrue on all outstanding obligations at the post-default rate, which was equal to the rate that otherwise would be in effect plus 5.0%. The post-default interest rate on September 30, 2021 was 9.50%. |
Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
|
|
September 30,
|
|
|
December 31,
|
|
||
ASSETS |
|
|
|
|
|
|
||
Real estate assets: |
|
|
|
|
|
|
||
Land |
|
$ |
598,201 |
|
|
$ |
599,283 |
|
Buildings and improvements |
|
|
1,188,200 |
|
|
|
1,173,106 |
|
|
|
|
1,786,401 |
|
|
|
1,772,389 |
|
Accumulated depreciation |
|
|
(107,462 |
) |
|
|
(19,939 |
) |
|
|
|
1,678,939 |
|
|
|
1,752,450 |
|
Developments in progress |
|
|
5,343 |
|
|
|
16,665 |
|
Net investment in real estate assets |
|
|
1,684,282 |
|
|
|
1,769,115 |
|
Cash and cash equivalents |
|
|
85,754 |
|
|
|
169,554 |
|
Available-for-sale securities - at fair value (amortized cost of $249,638 and $149,999 as of September 30, 2022 and December 31, 2021, respectively) |
|
|
249,912 |
|
|
|
149,996 |
|
Receivables: |
|
|
|
|
|
|
||
Tenant |
|
|
32,290 |
|
|
|
25,190 |
|
Other |
|
|
3,441 |
|
|
|
4,793 |
|
Investments in unconsolidated affiliates |
|
|
81,805 |
|
|
|
103,655 |
|
In-place leases, net |
|
|
277,443 |
|
|
|
384,705 |
|
Above market leases, net |
|
|
186,652 |
|
|
|
234,286 |
|
Intangible lease assets and other assets |
|
|
125,248 |
|
|
|
104,685 |
|
|
|
$ |
2,726,827 |
|
|
$ |
2,945,979 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
||
Mortgage and other indebtedness, net |
|
$ |
2,016,704 |
|
|
$ |
1,813,209 |
|
10% senior secured notes - at fair value (carrying amount of $395,000 as of December 31, 2021) |
|
|
— |
|
|
|
395,395 |
|
Below market leases, net |
|
|
121,741 |
|
|
|
151,871 |
|
Accounts payable and accrued liabilities |
|
|
149,007 |
|
|
|
184,404 |
|
Total liabilities |
|
|
2,287,452 |
|
|
|
2,544,879 |
|
Shareholders' equity: |
|
|
|
|
|
|
||
Common stock, $.001 par value, 200,000,000 shares authorized, 31,834,178 and 20,774,716 issued and outstanding in 2022 and 2021, respectively |
|
|
32 |
|
|
|
21 |
|
Additional paid-in capital |
|
|
708,768 |
|
|
|
547,726 |
|
Accumulated other comprehensive income (loss) |
|
|
274 |
|
|
|
(3 |
) |
Accumulated deficit |
|
|
(263,862 |
) |
|
|
(151,545 |
) |
Total shareholders' equity |
|
|
445,212 |
|
|
|
396,199 |
|
Noncontrolling interests |
|
|
(5,837 |
) |
|
|
4,901 |
|
Total equity |
|
|
439,375 |
|
|
|
401,100 |
|
|
|
$ |
2,726,827 |
|
|
$ |
2,945,979 |
|