CBL & Associates Properties, Inc. (NYSE:CBL):

  • FFO per diluted share, as adjusted, was $0.55 for the second quarter of 2014 compared with $0.55 for the prior-year period.
  • Average gross rent per square foot for stabilized mall leases signed in the second quarter of 2014 increased 11.7% over the prior gross rent per square foot.
  • Total portfolio occupancy increased 50 basis points to 93.5% in the second quarter of 2014 over the prior-year period.
  • Same-store sales per square foot increased 1.1% for reporting stabilized mall tenants 10,000-square-feet or less during the second quarter 2014 compared with the prior-year period.

CBL & Associates Properties, Inc. (NYSE:CBL) announced results for the second quarter ended June 30, 2014. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure is located at the end of this news release.

   
Three Months Ended
June 30,		 Six Months Ended
June 30,
2014     2013 2014     2013
Funds from Operations ("FFO") per diluted share $ 0.55   $ 0.51   $ 1.28   $ 1.04
FFO, as adjusted, per diluted share (1) $ 0.55   $ 0.55   $ 1.06   $ 1.08
 

(1) FFO, as adjusted, for the six months ended June 30, 2014, excludes a partial legal settlement of $0.8 million and gain on extinguishment of debt of $42.7 million primarily related to the January 2014 foreclosure of the mortgage loan secured by Citadel Mall.  FFO, as adjusted, for the three and six months ended June 30, 2013, excludes a loss on extinguishment of debt of $9.1 million, primarily related to the prepayment of a secured loan and a gain on investment of $2.4 million related to collection of a note receivable.

 

CBL's President and Chief Executive Officer Stephen Lebovitz commented, "With our strong second quarter results, we remain on track to meet our outlined goals for the year for same-center NOI growth and other key operating metrics. We are also making progress on our asset disposition program with one additional mall under contract and several others under active negotiations. We are committed to the successful execution of our strategy to dispose of non-core properties and reinvest into higher growth assets.

"We are also excited about this week's opening of The Outlet Shoppes of the Bluegrass between Louisville and Lexington, Kentucky, which is 100% leased with an incredible line-up of more than 80 premium brands. This property is a terrific addition to the CBL portfolio. "

FFO allocable to common shareholders, as adjusted, for the second quarter of 2014 was $93.0 million, or $0.55 per diluted share, compared with $90.8 million, or $0.55 per diluted share, for the second quarter of 2013. FFO of the operating partnership, as adjusted, for the second quarter of 2014 was $109.1 million compared with $106.9 million, for the second quarter of 2013. FFO per share was flat from the prior-year period primarily as a result of dilution from the equity raised through the Company's At-The-Market program during the second quarter 2013 and the sale of assets in the third quarter 2013.

Net income attributable to common shareholders for the second quarter of 2014 was $26.7 million, or $0.16 per diluted share, compared with net income of $0.5 million, or $0.00 per diluted share, for the second quarter of 2013.

Percentage change in same-center Net Operating Income ("NOI")(1):

 
Three Months Ended
June 30, 2014
Portfolio same-center NOI 1.9%
Mall same-center NOI 1.4%
 
(1) CBL's definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items of straight line rents and net amortization of acquired above and below market leases. NOI is for real estate properties and excludes income of the Company's subsidiary that provides maintenance, janitorial and security services.
 

MAJOR VARIANCES IMPACTING SAME-CENTER NOI RESULTS FOR THE QUARTER ENDED JUNE 30, 2014

  • Contributions from new and renewal lease spreads resulted in $3.5 million of growth in minimum rent compared with the prior-year period, partially offset by a $0.7 million decline in percentage rents due to lower sales year-to-date.
  • Operating expenses improved by $0.4 million and maintenance and repairs improved by $0.8 million, primarily as a result of expense controls and cost saving measures.
  • Real estate taxes increased by $0.5 million.

PORTFOLIO OPERATIONAL RESULTS

Occupancy:

 
As of June 30,
2014   2013
Portfolio occupancy 93.5% 93.0%
Mall portfolio 93.1% 92.7%
Same-center stabilized malls 92.9% 93.0%
Stabilized malls 92.9% 92.6%
Non-stabilized malls (1) 97.6% 100.0%
Associated centers 95.0% 93.6%
Community centers 97.0% 96.4%
 
(1) Includes The Outlet Shoppes at Oklahoma City and The Outlet Shoppes at Atlanta as of June 30, 2014. Includes The Outlet Shoppes at Oklahoma City as of June 30, 2013.
 

New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:

% Change in Average Gross Rent Per Square Foot
 
  Six Months Ended
June 30, 2014
Stabilized Malls 11.7%
New leases 27.8%
Renewal leases 4.2%
 

Same-Store Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:

  Twelve Months Ended June 30,  
2014   2013 % Change
Stabilized mall same-store sales per square foot $ 354 $ 364 (2.7)%
 

DEVELOPMENT

On July 31st, the Company will celebrate the Grand Opening of The Outlet Shoppes of the Bluegrass in Simpsonville (Louisville), KY. The 375,000-square-foot outlet center will open 100% leased or committed with more than 80 stores, including Michael Kors, Nike, Saks Fifth Avenue off 5th and The North Face.

TRANSACTIONS

In May 2014, the Company completed the sale of Lakeshore Mall in Sebring, FL, for $14.0 million. In June 2014, the Company completed the sale of an expansion to the Foothills Plaza associated center in Maryville, TN, for $2.6 million.

Subsequent to the quarter-end, CBL entered into non-binding contracts for the sale of one mall and its associated center and a community center. Subject to the completion of normal due diligence and closing conditions, the sales are expected to close in the fourth quarter 2014. The aggregate scale of the transactions is less than $25.0 million. Additional details will be announced following the expiration of due diligence.

FINANCING ACTIVITY

In July, CBL closed on a $126.0 million non-recourse loan secured by Coastal Grand in Myrtle Beach, SC. The mall is owned in a 50/50 joint venture. The new ten-year loan bears interest at a fixed rate of 4.0865% and matures in August 2024. Proceeds from the loan were used to retire the existing $75.2 million loan. Excess proceeds were distributed 50/50 to the Company and its partner. The Company used its share of net proceeds to pay down outstanding balances on the Company's lines of credit.

OUTLOOK AND GUIDANCE

The Company is affirming 2014 Adjusted FFO guidance in the range of $2.22 - $2.26 per diluted share. CBL is assuming same-center NOI growth of 1.0-2.0% in 2014.

The guidance also assumes the following:

  • Flat interest expense
  • $2.0 million to $4.0 million of outparcel sales
  • 0-25 basis point increase in total portfolio occupancy as well as stabilized mall occupancy throughout 2014
  • No additional unannounced acquisition or disposition activity
  • No unannounced capital markets activity - equity or debt
       
Low High
Expected diluted earnings per common share $ 0.56 $ 0.60
Adjust to fully converted shares from common shares (0.09 ) (0.10 )
Expected earnings per diluted, fully converted common share 0.47 0.50
Depreciation and amortization 1.79 1.79
Noncontrolling interest in earnings of Operating Partnership 0.08 0.09
Impairment of real estate 0.09   0.09  
Expected FFO per diluted, fully converted common share $ 2.43 $ 2.47
Net gain on debt extinguishment and litigation settlement (0.21 ) (0.21 )
Expected adjusted FFO per diluted, fully converted common share $ 2.22   $ 2.26  
 

INVESTOR CONFERENCE CALL AND WEBCAST

CBL & Associates Properties, Inc. will conduct a conference call at 11:00 a.m. ET on Wednesday, July 30, 2014, to discuss its second quarter results. The number to call for this interactive teleconference is (800) 736-4594 or (212) 231-2902. A replay of the conference call will be available through August 6, 2014, by dialing (800) 633-8284 or (402) 977-9140 and entering the confirmation number, 21706209. A transcript of the Company's prepared remarks will be furnished on a Form 8-K following the conference call.

To receive the CBL & Associates Properties, Inc., second quarter earnings release and supplemental information please visit our website at cblproperties.com or contact Investor Relations at 423-490-8312.

The Company will also provide an online webcast and rebroadcast of its 2014 second quarter earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Wednesday, July 30, 2014 beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for one year.

ABOUT CBL & ASSOCIATES PROPERTIES, INC.

CBL is one of the largest and most active owners and developers of malls and shopping centers in the United States. CBL owns, holds interests in or manages 152 properties, including 92 regional malls/open-air centers. The properties are located in 30 states and total 86.7 million square feet including 7.3 million square feet of non-owned shopping centers managed for third parties. Headquartered in Chattanooga, TN, CBL has regional offices in Boston (Waltham), MA, Dallas (Irving), TX, and St. Louis, MO. Additional information can be found at cblproperties.com.

NON-GAAP FINANCIAL MEASURES

Funds From Operations

FFO is a widely used measure of the operating performance of real estate companies that supplements net income (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 allocable to common shareholders as defined above by NAREIT less dividends on preferred stock. The Company’s method of calculating FFO allocable to its common shareholders may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors’ understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company’s properties and interest rates, but also by its capital structure. The Company presents both FFO of its operating partnership and FFO allocable to its common shareholders, as it believes that both are useful performance measures. The Company believes FFO of its operating partnership is a useful performance measure since it conducts substantially all of its business through its operating partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the 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 attributable to the Company's common shareholders to FFO allocable to its common shareholders, 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 its operating partnership. The Company then applies a percentage to FFO of its operating partnership 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 outstanding during the period.

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

As described above, during the first quarter of 2014, the Company recognized a $42.7 million net gain on the extinguishment of debt in connection with the foreclosure of the mortgage loan encumbering Citadel Mall and the early retirement of the mortgage loan encumbering St. Clair Square. Additionally, the Company received income of $0.8 million as a partial settlement of ongoing litigation. During the three and six month periods ended June 30, 2013, the Company recorded $2.4 million of gain on investment and $9.1 million of loss on extinguishment of debt. Considering the significance and nature of these items, the Company believes it is important to identify their impact on 2014 FFO measures for readers to have a complete understanding on the Company's results of operations. Therefore, the Company has also presented adjusted FFO measures for 2014, excluding these items.

Same-Center Net Operating Income

NOI is a supplemental 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).

Similar to FFO, the Company computes NOI based on its pro rata share of both consolidated and unconsolidated properties. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's NOI may not be comparable to that of other companies.

Since NOI includes only those revenues and expenses related to the operations of its shopping center and other properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates and operating costs and the impact of those trends on the Company's results of operations. The Company’s calculation of same-center NOI also excludes lease termination income, straight-line rent adjustments, and amortization of above and below market lease intangibles in order to enhance the comparability of results from one period to another, as these items can be impacted by one-time events that may distort same-center NOI trends and may result in same-center NOI that is not indicative of the ongoing operations of the Company’s shopping center and other properties. 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 consolidated balance sheet is located at the end of this earnings release.

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

 
CBL & Associates Properties, Inc.
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)
 
    Three Months Ended
June 30,		     Six Months Ended
June 30,
2014     2013 2014     2013
REVENUES:
Minimum rents $ 167,631 $ 165,512 $ 336,908 $ 330,930
Percentage rents 1,824 2,335 5,430 7,051
Other rents 4,613 4,521 9,895 9,665
Tenant reimbursements 70,774 70,666 142,992 142,948
Management, development and leasing fees 2,813 2,850 5,948 5,925
Other 9,278   9,701   17,003   17,548  
Total revenues 256,933   255,585   518,176   514,067  
OPERATING EXPENSES:
Property operating 35,527 33,663 75,538 72,796
Depreciation and amortization 70,609 68,117 139,692 137,173
Real estate taxes 22,089 21,389 43,436 43,805
Maintenance and repairs 12,623 13,229 28,788 27,419
General and administrative 11,336 12,876 26,109 26,300
Loss on impairment 106 21,038 17,256 21,038
Other 7,390   8,191   13,935   14,847  
Total operating expenses 159,680   178,503   344,754   343,378  
Income from operations 97,253 77,082 173,422 170,689
Interest and other income 1,544 661 3,072 1,388
Interest expense (59,277 ) (57,209 ) (119,783 ) (117,033 )
Gain (loss) on extinguishment of debt — (9,108 ) 42,660 (9,108 )
Gain on sales of real estate assets 1,925 457 3,079 1,000
Gain on investment — 2,400 — 2,400
Equity in earnings of unconsolidated affiliates 3,418 2,729 7,102 5,348
Income tax provision (786 ) (757 ) (1,183 ) (583 )
Income from continuing operations 44,077 16,255 108,369 54,101
Operating income (loss) of discontinued operations (59 ) 1,893 (558 ) 3,151
Gain on discontinued operations 107   91   90   872  
Net income 44,125 18,239 107,901 58,124
Net income attributable to noncontrolling interests in:
Operating Partnership (4,620 ) (36 ) (12,271 ) (3,527 )
Other consolidated subsidiaries (1,547 ) (6,479 ) (2,378 ) (12,560 )
Net income attributable to the Company 37,958 11,724 93,252 42,037
Preferred dividends (11,223 ) (11,223 ) (22,446 ) (22,446 )
Net income attributable to common shareholders $ 26,735   $ 501   $ 70,806   $ 19,591  
 
Basic and diluted per share data attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends $ 0.16 $ (0.01 ) $ 0.42 $ 0.10
Discontinued operations 0.00   0.01   0.00   0.02  
Net income attributable to common shareholders $ 0.16   $ 0.00   $ 0.42   $ 0.12  
Weighted-average common and potential dilutive common shares outstanding 170,267 166,607 170,232 164,088
 
Amounts attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends $ 26,694 $ (1,184 ) $ 71,205 $ 16,181
Discontinued operations 41   1,685   (399 ) 3,410  
Net income attributable to common shareholders $ 26,735   $ 501   $ 70,806   $ 19,591  
 
 

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

 
    Three Months Ended
June 30,		   Six Months Ended
June 30,
2014     2013 2014     2013
Net income attributable to common shareholders $ 26,735 $ 501 $ 70,806 $ 19,591
Noncontrolling interest in income of Operating Partnership 4,620 36 12,271 3,527
Depreciation and amortization expense of:
Consolidated properties 70,609 68,117 139,692 137,173
Unconsolidated affiliates 10,256 9,923 20,117 19,871
Discontinued operations — 2,398 — 5,004
Non-real estate assets (603 ) (484 ) (1,197 ) (958 )
Noncontrolling interests' share of depreciation and amortization (1,569 ) (1,282 ) (3,102 ) (2,889 )
Loss on impairment 106 21,038 17,937 21,038
Gain on depreciable property (952 ) — (934 ) (2 )
Gain on discontinued operations, net of taxes (87 ) (55 ) (87 ) (540 )
Funds from operations of the Operating Partnership 109,115 100,192 255,503 201,815
Litigation settlement — — (800 ) —
Gain on investment — (2,400 ) — (2,400 )
(Gain) loss on extinguishment of debt —   9,108   (42,660 ) 9,108  
Funds from operations of the Operating Partnership, as adjusted $ 109,115   $ 106,900   $ 212,043   $ 208,523  
 
Funds from operations per diluted share $ 0.55   $ 0.51   $ 1.28   $ 1.04  
 
Funds from operations, as adjusted, per diluted share $ 0.55   $ 0.55   $ 1.06   $ 1.08  
 

Weighted average common and potential dilutive common shares outstanding with Operating Partnership units fully converted

199,726 196,153 199,734 193,633
 

Reconciliation of FFO of the Operating Partnership to FFO allocable to common shareholders:

Funds from operations of the Operating Partnership $ 109,115 $ 100,192 $ 255,503 $ 201,815
Percentage allocable to common shareholders (1) 85.25 % 84.94 % 85.23 % 84.74 %
Funds from operations allocable to common shareholders $ 93,021   $ 85,103   $ 217,765   $ 171,018  
 
Funds from operations of the Operating Partnership, as adjusted $ 109,115 $ 106,900 $ 212,043 $ 208,523
Percentage allocable to common shareholders (1) 85.25 % 84.94 % 85.23 % 84.74 %

Funds from operations allocable to common shareholders, as adjusted

$ 93,021   $ 90,801   $ 180,724   $ 176,702  
 
(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 11.
 
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees $ 419 $ 1,725 $ 1,351 $ 2,538
Lease termination fees per share $ — $ 0.01 $ 0.01 $ 0.01
 
Straight-line rental income $ 801 $ 1,746 $ 1,283 $ 2,836
Straight-line rental income per share $ — $ 0.01 $ 0.01 $ 0.01
 
Gains on outparcel sales $ 1,000 $ 457 $ 2,145 $ 1,000
Gains on outparcel sales per share $ 0.01 $ — $ 0.01 $ 0.01
 
Net amortization of acquired above- and below-market leases $ 188 $ 43 $ 405 $ 629
Net amortization of acquired above- and below-market leases per share $ — $ — $ — $ —
 
Net amortization of debt premiums and discounts $ 539 $ 700 $ 1,080 $ 1,076
Net amortization of debt premiums and discounts per share $ — $ — $ 0.01 $ 0.01
 
Income tax provision $ (786 ) $ (757 ) $ (1,183 ) $ (583 )
Income tax provision per share $ — $ — $ (0.01 ) $ —
 
Loss on impairment from continuing operations $ (106 ) $ (21,038 ) $ (17,256 ) $ (21,038 )
Loss on impairment from continuing operations per share $ — $ (0.11 ) $ (0.09 ) $ (0.11 )
 
Loss on impairment from discontinued operations $ — $ — $ (681 ) $ —
Loss on impairment from discontinued operations per share $ — $ — $ — $ —
 
Gain (loss) on extinguishment of debt $ — $ (9,108 ) $ 42,660 $ (9,108 )
Gain (loss) on extinguishment of debt per share $ — $ (0.05 ) $ 0.21 $ (0.05 )
 
Gain on investment $ — $ 2,400 $ — $ 2,400
Gain on investment per share $ — $ 0.01 $ — $ 0.01
 
Interest capitalized $ 1,457 $ 1,207 $ 2,866 $ 1,929
Interest capitalized per share $ 0.01 $ 0.01 $ 0.01 $ 0.01
 
Litigation settlement $ — $ — $ 800 $ —
Litigation settlement per share $ — $ — $ — $ —
 
 
As of June 30,
2014 2013
Straight-line rent receivable

$

63,411

 $ 63,797
 
 

Same-Center Net Operating Income
(Dollars in thousands)

 
    Three Months Ended
June 30,		     Six Months Ended
June 30,
2014     2013 2014     2013
 
Net income attributable to the Company $ 37,958 $ 11,724 $ 93,252 $ 42,037
 
Adjustments:
Depreciation and amortization 70,609 68,117 139,692 137,173
Depreciation and amortization from unconsolidated affiliates 10,256 9,923 20,117 19,871
Depreciation and amortization from discontinued operations — 2,398 — 5,004

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

(1,569 ) (1,282 ) (3,102 ) (2,889 )
Interest expense 59,277 57,209 119,783 117,033
Interest expense from unconsolidated affiliates 9,662 9,764 19,153 19,836

Noncontrolling interests' share of interest expense in other consolidated subsidiaries

(1,307 ) (977 ) (2,618 ) (1,953 )
Abandoned projects expense 33 (1 ) 34 1
Gain on sales of real estate assets (1,925 ) (457 ) (3,079 ) (1,000 )
Gain on investment — (2,400 ) — (2,400 )
(Gain) loss on extinguishment of debt — 9,108 (42,660 ) 9,108
Loss on impairment 106 21,038 17,256 21,038
Loss on impairment from discontinued operations — — 681 —
Income tax provision 786 757 1,183 583
Lease termination fees (419 ) (1,725 ) (1,351 ) (2,538 )
Straight-line rent and above- and below-market lease amortization (989 ) (1,790 ) (1,688 ) (3,466 )

Net income attributable to noncontrolling interest in earnings of Operating Partnership

4,620 36 12,271 3,527
Gain on discontinued operations (107 ) (91 ) (90 ) (872 )
General and administrative expenses 11,336 12,876 26,109 26,300
Management fees and non-property level revenues (6,159 ) (1,071 ) (13,130 ) (2,607 )
Company's share of property NOI 192,168 193,156 381,813 383,786
Non-comparable NOI (15,129 ) (19,441 ) (31,401 ) (39,791 )
Total same-center NOI (1) $ 177,039   $ 173,715   $ 350,412   $ 343,995  
Total same-center NOI percentage change 1.9 % 1.9 %
 
Malls $ 161,480 $ 159,256 $ 319,968 $ 314,826
Associated centers 8,450 8,064 16,613 16,275
Community centers 4,969 4,504 9,774 9,140
Offices and other 2,140   1,891   4,057   3,754  
Total same-center NOI (1) $ 177,039   $ 173,715   $ 350,412   $ 343,995  
 
Percentage Change:
Malls 1.4 % 1.6 %
Associated centers 4.8 % 2.1 %
Community centers 10.3 % 6.9 %
Offices and other 13.2 % 8.1 %
Total same-center NOI (1) 1.9 % 1.9 %
 

(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, and amortization of above and below market lease intangibles. Same-center NOI is for real estate properties and does not include the results of operations of the Company's subsidiary that provides janitorial, security and maintenance services. We include a property in our same-center pool when we own all or a portion of the property as of June 30, 2014, 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, 2014. New properties are excluded from same-center NOI, until they meet this criteria. The only properties excluded from the same-center pool that would otherwise meet this criteria are non-core properties, properties under major redevelopment, properties where we intend to renegotiate the terms of the debt secured by the related property and properties included in discontinued operations.

   

Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)

 
As of June 30, 2014
Fixed Rate     Variable Rate     Total
Consolidated debt $ 3,876,236 $ 934,575 $ 4,810,811
Noncontrolling interests' share of consolidated debt (89,872 ) (8,535 ) (98,407 )
Company's share of unconsolidated affiliates' debt 649,646   105,706   755,352  
Company's share of consolidated and unconsolidated debt $ 4,436,010   $ 1,031,746   $ 5,467,756  
Weighted average interest rate 5.47 % 1.73 % 4.76 %
 
As of June 30, 2013
Fixed Rate Variable Rate Total
Consolidated debt $ 3,534,693 $ 1,087,702 $ 4,622,395
Noncontrolling interests' share of consolidated debt (68,211 ) (5,700 ) (73,911 )
Company's share of unconsolidated affiliates' debt 657,160   132,824   789,984  
Company's share of consolidated and unconsolidated debt $ 4,123,642   $ 1,214,826   $ 5,338,468  
Weighted average interest rate 5.51 % 2.11 % 4.74 %
 
           

Debt-To-Total-Market Capitalization Ratio as of June 30, 2014

(In thousands, except stock price)

 
Shares
Outstanding		 Stock

Price (1)

Value
Common stock and operating partnership units 199,636 $ 19.00 $ 3,793,084
7.375% Series D Cumulative Redeemable Preferred Stock 1,815 250.00 453,750
6.625% Series E Cumulative Redeemable Preferred Stock 690 250.00 172,500  
Total market equity 4,419,334
Company's share of total debt 5,467,756  
Total market capitalization $ 9,887,090  
Debt-to-total-market capitalization ratio 55.3 %
 

(1)

Stock price for common stock and operating partnership units equals the closing price of the common stock on June 30, 2014. 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,
2014: Basic     Diluted Basic     Diluted
Weighted average shares - EPS 170,267 170,267 170,232 170,232
Weighted average Operating Partnership units 29,459   29,459   29,502   29,502
Weighted average shares- FFO 199,726   199,726   199,734   199,734
 
2013:
Weighted average shares - EPS 166,607 166,607 164,088 164,088
Weighted average Operating Partnership units 29,546   29,546   29,545   29,545
Weighted average shares- FFO 196,153   196,153   193,633   193,633
 
       

Dividend Payout Ratio

 
Three Months Ended
June 30,		 Six Months Ended
June 30,
2014     2013 2014     2013
Weighted average cash dividend per share $ 0.25313 $ 0.23838 $ 0.50625 $ 0.47702
FFO as adjusted, per diluted fully converted share $ 0.55   $ 0.55   $ 1.06   $ 1.08  
Dividend payout ratio 46.0 % 43.3 % 47.8 % 44.2 %
 
 
Consolidated Balance Sheets

(Unaudited; in thousands, except share data)

    As of
June 30, 2014       December 31, 2013
ASSETS
Real estate assets:
Land $ 852,963 $ 858,619
Buildings and improvements 7,085,523   7,125,512  
7,938,486 7,984,131
Accumulated depreciation (2,126,434 ) (2,056,357 )
5,812,052 5,927,774
Developments in progress 185,906   139,383  
Net investment in real estate assets 5,997,958 6,067,157
Cash and cash equivalents 63,482 65,500
Receivables:

Tenant, net of allowance for doubtful accounts of $2,380 and $2,379 in 2014 and 2013, respectively

76,468 79,899

Other, net of allowance for doubtful accounts of $1,120 and $1,241 in 2014 and 2013, respectively

22,108 23,343
Mortgage and other notes receivable 40,137 30,424
Investments in unconsolidated affiliates 271,868 277,146
Intangible lease assets and other assets 229,493   242,502  
$ 6,701,514   $ 6,785,971  
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness $ 4,810,811 $ 4,857,523
Accounts payable and accrued liabilities 315,298   333,875  
Total liabilities 5,126,109   5,191,398  
Commitments and contingencies
Redeemable noncontrolling partnership interests 36,540   34,639  
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, 170,260,769 and 170,048,144 issued and outstanding in 2014 and 2013, respectively

1,703 1,700
Additional paid-in capital 1,962,103 1,967,644
Accumulated other comprehensive income 9,659 6,325
Dividends in excess of cumulative earnings (583,405 ) (570,781 )
Total shareholders' equity 1,390,085 1,404,913
Noncontrolling interests 148,780   155,021  
Total equity 1,538,865   1,559,934  
$ 6,701,514   $ 6,785,971