Securities Exchange Act of 1934 -- Form 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report:
October 30, 2003
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CBL & ASSOCIATES PROPERTIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-12494 62-1545718
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
2030 Hamilton Place Boulevard, Chattanooga, TN 37421
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(Address of principal executive offices)
Registrant's telephone number, including area code:
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(423) 855-0001
1
ITEM 7. Exhibits
Exhibit
Number Description
------- --------------------------
99.1 Earnings Release - Third Quarter Ended September 30, 2003
99.2 Analyst Conference Call Script - Third Quarter Ended September 30, 2003
99.3 Supplemental information - Third Quarter Ended September 30, 2003
ITEM 12. Results of Operations and Financial Condition
On October 29, 2003, CBL & Associates Properties, Inc. (the "Company) reported
its results for the quarter ended September 30, 2003. The Company's earnings
release for the quarter ended September 30, 2003 is attached as Exhibit 99.1. On
October 30, 2003, the Company held a conference call to discuss the third
quarter results. The transcript of the conference call is attached as Exhibit
99.2. The Company is providing certain supplemental financial and operating
information related to the third quarter, which is attached as Exhibit 99.3
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.
Funds from operations ("FFO") is a widely used measure of the operating
performance of real estate companies that supplements net income determined in
accordance with generally accepted accounting principles ("GAAP"). The Company
computes FFO in accordance with the National Association of Real Estate
Investment Trusts' definition of FFO, which is net income (computed in
accordance with GAAP) excluding gains or losses on sales of operating
properties, plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. The Company believes that FFO
provides an additional indicator of the operating performance of the Company's
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 or
fallen with market conditions, the Company believes that FFO provides investors
with a better understanding of the Company's operating performance.
The Company presents its total share of consolidated and unconsolidated debt
because the Company believes that this amount provides investors with a clear
understanding of the Company's debt obligations.
The Company presents same-center net operating income because the Company
believes that it provides investors with useful information regarding the
operating performance of shopping centers that are comparable between periods.
The Company determines net operating income for shopping center properties by
subtracting property operating expenses from rental and tenant reimbursement
revenues.
The Company determines each of the non-GAAP measures above by including its
proportionate share from unconsolidated affiliates and excluding minority
investors' proportionate shares in consolidated properties.
2
SIGNATURE
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 thereunto duly authorized.
CBL & ASSOCIATES PROPERTIES, INC.
/c/ John N. Foy
----------------------------------------------
John N. Foy
Vice Chairman,
Chief Financial Officer and Treasurer
(Authorized Officer of the Registrant,
Principal Financial Officer and
Principal Accounting Officer)
Date: October 30, 2003
3
EXHIBIT INDEX
Exhibit
Number Description
------- -----------------------------
99.4 Earnings Release - Third Quarter Ended September 30, 2003
99.5 Analyst Conference Call Script - Third Quarter Ended September 30, 2003
99.6 Supplemental information - Third Quarter Ended September 30, 2003
4
Exhibit 99.4 Earnings Release - Third Quarter Ended September 30, 2003
[LETTERHEAD OF CBL & ASSSOCIATES PROPERTIES, INC.]
Contact: John N. Foy
Vice Chairman and CFO
(423) 855-0001
CBL REPORTS THIRD QUARTER RESULTS
|X| Increases FFO per Share 12.6 % for the Quarter
|X| Common Stock Dividend Increases 10.7%
|X| Same Store Sales Increase 3.1% for the Quarter
|X| Same Center NOI Increases 4.3% for the Nine Months
CHATTANOOGA, Tenn. (October 29, 2003) CBL & Associates Properties, Inc.
(NYSE:CBL) announced results for the third quarter and the nine months ended
September 30, 2003. Reconciliations of non-GAAP financial measures are included
in the financial tables accompanying this press release. The third quarter
results exclude the impact of SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity," since the
Financial Accounting Standards Board indefinitely deferred SFAS No. 150's
provisions related to noncontrolling interests in limited life subsidiaries on
October 29, 2003.
Net income available to common shareholders increased 15.8% in the third quarter
of 2003 to $20,225,000 from $17,465,000 in the prior-year period. On a diluted
per share basis, net income available to common shareholders for the third
quarter of 2003 increased 14.0% to $0.65 compared with $0.57 in the prior-year
period. Net income available to common shareholders increased 19.1% in the nine
months of 2003 to $64,023,000 from $53,763,000 in the nine months of 2002, or a
12.0% per share increase to $2.06 from $1.84.
Funds from operations (FFO) increased 15.4% to $65,801,000 for the third quarter
2003, from $57,011,000 for the third quarter of 2002. FFO per share on a
diluted, fully converted basis increased 12.6% to $1.16 for the third quarter of
2003 from $1.03 in the prior-year period. FFO increased 16.7% to $200,504,000
for the nine months of 2003 from $171,876,000 in the nine months of 2002. FFO
per share increased 11.3% on a diluted, fully converted basis in the nine months
in 2003 to $3.54 from $3.18 per share in the prior-year period.
The Company began to include gains on sales of outparcels in FFO during the
first quarter of 2003 to comply with the Securities and Exchange Commission's
rules related to disclosure of non-GAAP financial measures since NAREIT's
definition of FFO includes gains on sales of outparcels. FFO for the prior-year
period has been restated to include gains on sales of outparcels. Gains on sales
of outparcels for the third quarter of 2003 were $0.01 per diluted, fully
converted share versus $0.01 for the third quarter one-year ago.
HIGHLIGHTS
[X] Effective with the fourth quarter of 2003 the regular quarterly cash
dividend for the Company's common stock will be increased by 10.7%
from $0.655 to $0.725 per share. This increase is a result of the
Company's compound annual FFO growth of 11.8% per share since the
Company's initial public offering in 1993. The Company currently
expects to maintain an annualized dividend of at least $2.90 per share
throughout 2004.
|X| Income from operations increased 13.2% in the third quarter of 2003 to
$77,800,000 from $68,702,000 in the third quarter of 2002. Income from
operations increased 12.6% in the first nine months of 2003 to
$233,744,000 from $207,609,000 in the nine months of 2002.
5
|X| Revenues increased 13.0% in the third quarter to $165,476,000 from
$146,443,000 in the prior-year period. Revenues increased 13.3% in the
nine months to $496,315,000 from $438,181,000 in the comparable period
a year ago. Revenues for the third quarter of 2003 include $588,000 in
lease termination fees received from tenants compared with $989,000
during the same period one year ago.
|X| Year to date as of September 30, 2003, same center net operating
income for the portfolio improved by 4.3% compared with an 8.1%
increase for the same period one year ago. Same center net operating
income for the portfolio improved in the third quarter by 2.0%
compared with a 1.4% increase for the prior year period.
|X| Same store sales improved 3.1% for the third quarter of 2003.
Same-store sales for mall tenants of 10,000 square feet or less for
stabilized malls increased 0.4% for those tenants who have reported
year to date sales compared with a decrease of 1.5% for the nine
months ended one year ago.
CBL's chairman and chief executive officer, Charles B. Lebovitz, stated, "We are
celebrating our tenth year as a publicly traded company with the announcement
today that our Board has increased our dividend by 10.7% effective with the
fourth quarter this year. During the past decade, our portfolio has grown from
15 million square feet to 63 million square feet and we have posted a compound
annual FFO growth per share of 11.8%. Our annual dividend has increased from
$1.50 ten years ago to $2.90 per share, a compound annual increase of 6.9% . We
have produced a total return to our IPO shareholders in excess of 274%.
"While past results are not indicative of future performance, they do reflect
the success of a focus that has remained consistent. For 25 years, CBL's
strategy has been to develop, acquire and aggressively manage well-located,
dominant regional malls and shopping centers. As we look ahead, we expect that
our strategy combined with new opportunities such as our Australian joint
venture with Galileo America REIT will continue to provide CBL with
opportunities to create additional shareholder value.
"New acquisitions continued during the third quarter as we closed on the first
regional mall of a four-mall portfolio from Faison Enterprises and subsequently
closed on the next two malls on October 1. Our development pipeline remains
active with several projects under construction including one mall, one
associated center and two community centers. We also remain committed to the
redevelopment of our properties with renovations and expansions scheduled for
completion later this year at four malls. We completed renovations at two
regional malls earlier this year. In addition, we held the grand opening for a
new community center, Waterford Commons in Waterford, Connecticut, subsequent to
the end of the quarter."
OPERATIONAL HIGHLIGHTS
September 30,
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2003 2002
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Portfolio occupancy: 92.4% 92.8%
Mall portfolio 91.7% 91.8%
Stabilized malls (54) 92.1% 92.1%
Non-stabilized malls (2) 80.2% 87.0%
Associated centers 90.6% 95.8%
Community centers 94.2% 94.3%
Comparable mall shop sales - year to date 0.4% (1.5)%
PROJECTS UNDER CONSTRUCTION OPENING DATES
|X| The Shoppes at Panama City - Panama City, FL February 2004
|X| Coastal Grand - Myrtle Beach, SC March 2004
|X| Garden City Plaza Expansion - Garden City, KS March 2004
|X| Wilkes-Barre Township MarketPlace - Wilkes-Barre Township, PA May 2004
|X| Charter Oak Marketplace - Hartford, CT November 2004
|X| East Towne Mall Expansion - Madison, WI November 2004
|X| West Towne Mall Expansion - Madison, WI November 2004
6
PROJECTS UNDER RENOVATION COMPLETION DATES
|X| Eastgate Mall - Cincinnati, OH November 2003
|X| East Towne Mall - Madison, WI November 2003
|X| St. Clair Square - Fairview Heights, IL November 2003
|X| West Towne Mall - Madison, WI November 2003
DEBT
The Company's share of consolidated and unconsolidated debt as of September 30,
2003 and 2002, is as follows (in thousands):
September 30, 2003 September 30, 2002
---------------------------- ---------------------------
Weighted Weighted
Avg. Interest Avg. Interest
Amount Rate(1) Amount Rate(1)
----------- ------------- ------------ -------------
Amount Rate(1)
Fixed-rate debt:
Non-recourse loans on operating properties $ 2,251,405 6.78% $ 1,880,597 7.19%
----------- ------------
Variable-rate debt:
Recourse term loans on operating properties 156,869 2.57% 284,262 4.32%
Lines of credit 257,000 2.12% 104,000 2.84%
Construction loans 29,571 2.87% 34,285 3.37%
----------- ------------
Total variable-rate debt 443,440 2.33% 422,547 3.88%
----------- ------------
Total $ 2,694,845 6.05% $2,303,144 6.58%
=========== ============
(1) Weighted average interest rate before amortization of deferred financing
costs.
Debt-to-total-market capitalization ratio as of September 30, 2003, was 46.9%
based on the common stock closing price of $49.90 and a fully converted common
stock share count of 55,433,565 as of the same date. The debt-to-total-market
capitalization ratio as of September 30, 2002, was 50.3%, based on the common
stock closing price of $38.75.
In August the Company sold 4,600,000 depositary shares at $25.00 per depositary
share, raising $115 million in gross offering proceeds. Subsequent to the end of
the quarter, the Company announced the planned redemption of the 9% Series A
Cumulative Redeemable Preferred Stock that was issued in 1998.
In September the Company closed $196 million of long-term, non-recourse,
fixed-rate mortgage loans secured by three of the Company's regional malls and
one associated center. The loans have a blended rate of 4.85% and replaced
short-term, variable rate debt on each property. The weighted average maturity
is 6.5 years, with individual loan terms ranging from five to ten years.
During the third quarter the Company announced that it was forming a joint
venture with Galileo America REIT ("Galileo"), the U.S. affiliate of
Australia-based Galileo America Shopping Trust, to invest in power and community
centers throughout the United States. CBL agreed to contribute to the joint
venture 90% of its ownership interest in 51 power and community centers for
gross consideration of approximately $516 million and to retain a 10% interest
in the joint venture. The joint venture closed on October 23, 2003 with the
first phase generating cash proceeds to the Company of approximately $255
million.
During the third quarter, the Company sold two community centers, Signal Hills
Village and Chester Plaza for a combined gain of $623,000.
DIVIDENDS
CBL's regular quarterly cash dividend of $0.655 per share for the third quarter
was paid on October 17, 2003, to shareholders of record as of September 30,
2003. The third quarter cash dividend of $0.5625 per share for the Company's 9%
Series A Cumulative Redeemable Preferred Stock, the third quarter cash dividend
of $1.0938 per share for the Company's 8.75% Series B Cumulative Redeemable
Preferred Stock and the third quarter cash dividend of $0.215278 per depositary
share for the Company's 7.75% Series C Cumulative Redeemable Preferred Stock
were all paid on September 30, 2003, to shareholders of record as of September
18, 2003.
7
OUTLOOK AND GUIDANCE
Based on today's outlook and the Company's third quarter results, management is
comfortable with the Thomson/First Call consensus estimate for 2003 as of
October 29, 2003. In connection with the recently completed Galileo transaction,
the FFO loss due to the sale of the community centers in Phase I and Phase II is
$0.42 per share based on the results for the nine months of 2003. Considering
the impact of this loss of FFO, the Company expects FFO to be in the range of
$4.85 to $5.00 per share for 2004.
Low High
Expected diluted Earnings per Common Share $ 1.52 $ 1.57
Add: real estate depreciation and amortization 2.04 2.09
Add: joint venture depreciation and amortization 0.08 0.08
Add: minority interest 1.21 1.26
-------- ---------
Expected FFO per diluted Common Share $ 4.85 $ 5.00
======== =========
INVESTOR CONFERENCE CALL AND SIMULCAST
CBL & Associates Properties, Inc. will conduct a conference call at 10:00 am EST
on October 30, 2003, to discuss the third quarter results. The number to call
for this interactive teleconference is 913-981-5509. A five-day replay of the
conference call will be available by dialing 719-457-0820 and entering the
passcode, 601978. A transcript of the Company's prepared remarks will be filed
as a Form 8-K following the conference call on October 30, 2003.
To receive CBL & Associates Properties, Inc. third quarter earnings release and
supplemental information please visit our website at www.cblproperties.com or
contact Investor Relations at 423-490-8301.
The Company will also provide an online Web simulcast and rebroadcast of its
2003 third quarter earnings release conference call. The live broadcast of CBL's
quarterly conference call will be available online at the Company's Web site at
www.cblproperties.com, as well as www.streetevents.com, www.fulldisclosure.com
and www.vcall.com on October 30, 2003, beginning at 10:00 a.m. EST. The online
replay will follow shortly after the call and continue through November 13,
2003.
CBL & Associates Properties, Inc. owns or holds interests in 164 properties,
including 59 enclosed regional malls. The properties are located in 25 states
and total 63.0 million square feet including 2.6 million square feet of
non-owned shopping centers managed for third parties. The Company has seven
projects under construction totaling approximately 1.8 million square feet,
including one mall - Coastal Grand - Myrtle Beach, SC, one associated center,
two community centers, three expansions plus four mall renovations. In addition
to its office in Chattanooga, TN, the Company has a regional office in Boston
(Waltham), MA. Additional information about the Company can be found on its
website at www.cblproperties.com.
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" incorporated by reference therein, for a discussion of such risks
and uncertainties.
8
CBL & ASSOCIATES PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------- ----------------------------
2003 2002 2003 2002
---------- ------------ ------------ ----------
Revenues:
Minimum rents $106,341 $95,012 $313,813 $280,439
Percentage rents 2,228 2,093 9,756 10,608
Other rents 1,624 1,277 5,415 5,033
Tenant reimbursements 50,470 43,172 152,644 125,497
Management, development and leasing fees 1,221 1,754 3,946 5,507
Other 3,592 3,135 10,741 11,097
---------- ----------- ------------ ----------
Total revenues 165,476 146,443 496,315 438,181
---------- ----------- ------------ ----------
Expense
Property operating 26,575 24,664 82,886 74,151
Depreciation and amortization 28,385 24,084 82,362 70,183
Real estate taxes 13,149 11,946 39,947 34,732
Maintenance and repairs 9,636 9,266 29,792 26,711
General and administrative 7,228 5,499 20,225 16,706
Other 2,703 2,282 7,359 8,089
---------- ----------- ------------ ----------
Total expenses 87,676 77,741 262,571 230,572
---------- ----------- ------------ ----------
Income from operations 77,800 68,702 233,744 207,609
Interest Income 639 841 1,804 1,824
Interest expense (38,051) (36,620) (113,369) (107,456)
Loss on extinguishment of debt - (210) (167) (3,399)
Gain on sales of real estate assets 837 497 4,943 2,702
Equity in earnings of unconsolidated affiliates 922 2,353 3,410 6,455
Minority interest in earnings:
Operating partnership (17,235) (14,599) (55,851) (47,131)
Shopping center properties (605) (389) (2,038) (2,522)
---------- ----------- ------------ ----------
Income before discontinued operations 24,307 20,575 72,476 58,082
Operating income of discontinued operations (32) 417 46 1,428
Gain on discontinued operations 633 165 3,568 1,572
---------- ----------- ------------ ----------
Net income 24,908 21,157 76,090 61,082
Preferred dividends (4,683) (3,692) (12,067) (7,319)
---------- ----------- ------------ ----------
Net income available to common shareholders $ 20,225 $ 17,465 $ 64,023 $ 53,763
========== =========== ============ ==========
Basic per share data:
Income before discontinued operations,
net of preferred dividends $ 0.65 $ 0.57 $ 2.02 $ 1.79
Discontinued operations 0.02 0.02 0.12 0.11
---------- ----------- ------------ ----------
Net income available to common shareholders $ 0.67 $ 0.59 $ 2.14 $ 1.90
========== =========== ============ ==========
Weighted average common shares outstanding 30,022 29,616 29,879 28,364
Diluted per share data:
Income before discontinued operations,
net of preferred dividends $ 0.63 $ 0.55 $ 1.94 $ 1.74
Discontinued operations 0.02 0.02 0.12 0.10
---------- ----------- ------------ ----------
Net income available to common shareholders $ 0.65 $ 0.57 $ 2.06 $ 1.84
========== =========== ============ ==========
Weighted average common and potential dilutive
common shares outstanding 31,301 30,476 31,070 29,191
9
SUMMARIZED UNAUDITED BALANCE SHEET INFORMATION (IN THOUSANDS) September 30, December 31,
2003 2002
------------- --------------
Cash, restricted cash and cash equivalents $ 25,188 $ 13,355
Total assets 4,130,530 3,795,114
Mortgage and other notes payable 2,618,216 2,402,079
Minority interest 494,439 500,513
Shareholders' equity 860,037 741,190
FUNDS FROM OPERATIONS CALCULATION
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
-------------- ---------------- ------------- --------------
Net income available to common shareholders $ 20,225 $ 17,465 $ 64,023 $ 53,763
Add: Depreciation and amortization
from consolidated properties 28,385 24,084 82,362 70,183
Depreciation and amortization
from unconsolidated affiliates 982 1,365 3,001 3,137
Depreciation and amortization
from discontinued operations 6 98 41 590
Minority interest in earnings of
operating partnership 17,235 14,599 55,851 47,131
Less: Minority investors' share of
depreciation and amortization
in shopping center properties (282) (307) (823) (1,001)
Gain on disposal of discontinued operations (633) (165) (3,568) (1,572)
Depreciation and amortization of non-
real estate assets (117) (128) (383) (355)
------------- -------------- ------------- --------------
Funds from operations $ 65,801 $ 57,011 $ 200,504 $ 171,876
============= ============== ============= ==============
Funds from operations applicable to
Company shareholders $ 35,527 $ 31,057 $ 107,889 $ 91,661
------------- -------------- ------------- --------------
Basic per share data:
Funds from operations $ 1.18 $ 1.05 $ 3.61 $ 3.23
============= ============== ============= ==============
Weighted average common shares
outstanding with operating partnership
units fully converted 55,605 54,366 55,528 53,186
Diluted per share data:
Funds from operations $ 1.16 $ 1.03 $ 3.54 $ 3.18
============= ============== ============= ==============
Weighted average common and potential
dilutive common shares outstanding with
operating partnership units fully
converted 56,884 55,227 56,719 54,013
SUPPLEMENTAL FFO INFORMATION:
Straight-line rental income $ 991 $ 1,111 $ 3,026 $ 3,014
Straight-line rental income per share $ 0.02 $ 0.02 $ 0.05 $ 0.06
Gain on outparcel sales $ 837 $ 497 $ 4,943 $ 2,702
Gain on outparcel sales per share $ 0.01 $ 0.01 $ 0.09 $ 0.05
10
RECONCILIATION OF COMMON SHARES AND UNITS OUTSTANDING
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
Basic Diluted Basic Diluted
-------------- ------------- ------------ ---------------
2003:
Weighted average shares used to compute earnings per share 30,022 31,301 29,879 31,070
Weighted average operating partnership units 25,583 25,583 25,649 25,649
-------------- ------------- ------------ ---------------
Weighted average shares used to compute FFO per share 55,605 56,884 55,528 56,719
============== ============= ============ ===============
2002:
Weighted average shares used to compute earnings per share 29,616 30,476 28,364 29,191
Weighted average operating partnership units 24,750 24,750 24,822 24,822
-------------- ------------- ------------ ---------------
Weighted average shares used to compute FFO per share 54,366 55,227 53,186 54,013
============== ============= ============ ===============
RECONCILIATION OF COMPANY'S SHARE OF TOTAL DEBT
(Dollars in thousands)
September 30, 2003
-----------------------------------------------------------------
Fixed Variable
Rate Rate Total
------------------ ------------------ ----------------
Consolidated debt $2,233,582 $ 384,634 $ 2,618,216
Minority investors' share of consolidated debt (19,720) -- (19,720)
Company's share of unconsolidated affiliates' debt 37,543 58,806 96,349
------------------ ------------------ ----------------
Company's share of consolidated and unconsolidated debt $2,251,405 $ 443,440 $ 2,694,845
================== ================== ================
Weighted average interest rate 6.78% 2.33% 6.05%
September 30, 2002
-----------------------------------------------------------------
Fixed Variable
Rate Rate Total
------------------ ------------------ ----------------
Consolidated debt $1,813,776 $ 396,550 $ 2,210,326
Minority investors' share of consolidated debt (19,062) -- (19,062)
Company's share of unconsolidated affiliates' debt 85,883 25,997 111,880
------------------ ------------------ ----------------
Company's share of consolidated and unconsolidated debt $1,880,597 $ 422,547 $ 2,303,144
================== ================== ================
Weighted average interest rate 7.19% 3.88% 6.58%
11
RECONCILIATION OF SAME CENTER NET OPERATING INCOME
(In thousands)
Quarter Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2003 2002 2003 2002
--------- --------- --------- --------
Net income $ 24,908 $ 21,157 $ 76,090 $ 61,082
Adjustments:
Depreciation and amortization 28,385 24,084 82,362 70,183
Depreciation and amortization from unconsolidated affiliates 982 1,365 3,001 3,137
Depreciation and amortization from discontinued operations 6 98 41 590
Minority investors' share of depreciation and amortization in
shopping center properties (282) (307) (823) (1,001)
Interest expense 38,051 36,620 113,369 107,456
Interest expense from unconsolidated affiliates 2,082 2,849 6,229 7,647
Interest expense from discontinued operations - 47 - 47
Minority investors' share of interest expense in
shopping center properties (363) (402) (1,253) (1,341)
Loss on extinguishment of debt - 210 167 3,399
Abandoned projects expense 47 1 152 58
Minority interest in earnings - Operating Partnership 17,235 14,599 55,851 47,131
Gain on discontinued operations (633) (165) (3,568) (1,572)
--------- --------- --------- --------
Operating Partnership's share of NOI 110,418 100,156 331,618 296,816
General and administrative expenses 7,228 5,499 20,225 16,706
Management fees and non-property level revenues (5,920) (5,826) (11,140) (8,385)
Gain on sales of real estate assets (837) (497) (4,943) (2,702)
--------- --------- --------- --------
Operating Partnership's share of property NOI 110,889 99,332 335,760 302,435
Non-comparable centers NOI (16,748) (7,076) (44,524) (23,223)
--------- --------- --------- --------
Same center NOI $ 94,141 $ 92,256 $291,236 $279,212
========= ========= ========= ========
Malls NOI $ 77,525 $ 75,612 $243,103 $232,075
Associated centers NOI 3,493 3,589 10,711 10,897
Community centers NOI 11,311 11,648 33,303 32,475
Other NOI 1,812 1,407 4,119 3,765
--------- --------- --------- --------
$ 94,141 $ 92,256 $291,236 $279,212
========= ========= ========= ========
Community Center same center NOI $ 33,303
New and Sold Center NOI 2,212
Retained Community Center NOI (5,837)
---------
NOI of Phase I and Phase II Community Centers 29,678
Interest Expense of Phase I and Phase II Community Centers (5,752)
---------
FFO of Phase I and Phase II Community Centers 23,926
FFO of Phase I and Phase II Community Centers per share $ 0.42
---------
12
Exhibit 99.2 - Conference Call Script - Third Quarter Ended September 30, 2003
CBL & ASSOCIATES PROPERTIES, INC.
Conference Call, Third quarter 2003
October 30, 2003 @ 10:00 EDT
Thank you and good morning. We appreciate your participation in today's
conference call to discuss our results for the third quarter of 2003. With me
today are John Foy, the Company's Vice Chairman and Chief Financial Officer, and
Kelly Sargent, Director of Investor Relations who will first read our Safe
Harbor disclosure.
This conference call 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 results, financial and
otherwise, may differ materially from the events and results discussed in the
forward-looking statements. During our discussion today, references made to per
share are based upon a fully diluted converted share. We direct you 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" incorporated by reference therein, for a discussion of such risks
and uncertainties.
I would like to note that a transcript of today's comments including the
preliminary balance sheet and additional schedules, along with the earnings
release will be furnished to the SEC as a Form 8-K and will be available on our
website. This call is also available for replay on the Internet through a link
on our website at cblproperties.com. This conference call is the property of CBL
& Associates Properties, Inc. Any redistribution, retransmission or rebroadcast
of this call without the express written consent of CBL is strictly prohibited.
During this conference call, the Company may discuss non-GAAP financial measures
as defined by SEC Regulation G. An explanation of each non-GAAP financial
measure discussed and a reconciliation of each non-GAAP financial measure to the
comparable GAAP financial measure will be included in the Form 8-K.
Thank you, Kelly.
The third quarter was another successful one for CBL in many ways. Highlights
include:
1. FFO for the quarter increased 12.6% to $1.16 per share.
2. Same center NOI for the quarter for the portfolio increased 2.0% and
for the nine months of the year increased 4.3%.
3. We acquired one mall from Faison Enterprises and another two on
October 1. We also began managing the fourth mall that will be
acquired in December.
4. On October 23, we closed on Phase I of the sale of the community
centers to the JV formed with Galileo America REIT.
5. In August we issued Series C Preferred shares raising $115 million in
gross offering proceeds.
6. We announced yesterday a 10.7% increase in the dividend on our common
shares to $2.90 per share.
13
DEVELOPMENTS
The construction of Coastal Grand in Myrtle Beach, SC is well underway and
scheduled for its Grand Opening on March 17, 2004. We currently are 78% leased
and committed. Anchors for Coastal Grand are Belk, Dillard's, Sears, Dick's
Sporting Goods, Bed Bath & Beyond and Cinemark theaters. Some of the retailers
new to the market that are opening in March include Abercrombie & Fitch,
Hollister, Ann Taylor Loft, Cache and Charlotte Russe. We are looking forward to
opening this new regional mall next spring with its unique architectural
features and exciting design.
During the third quarter we broke ground on the 312,000 square foot Charter Oak
Market Place in Hartford, CT that will be anchored by a 203,000 square foot
Wal-Mart and a 30,000 square foot Marshalls and will open in November 2004. Also
during the quarter, we began construction of a 26,500 square foot expansion at
Garden City Plaza in Garden City, KS. This community center expansion is more
than 50% pre-leased. Both of these construction projects will be contributed to
the Galileo joint venture in the third phase of the transaction that will close
in January 2005. In addition, we have one community center and one associated
center under construction.
In September we began the demolition of the former Boston stores at East Towne
and West Towne malls in Madison, WI. The redevelopment at East Towne includes a
66,000 square foot Dick's Sporting Goods and 25,500 square feet of small shops.
The West Towne redevelopment and expansion will include a 66,000 square foot
Dick's Sporting Goods and an additional 28,000 square feet of small shops. Both
of these redevelopments and expansions are scheduled to open in November 2004.
In addition to the projects under construction we have several in our
development pipeline. The most recent we have announced is Imperial Valley Mall
in El Centro, California with an opening date planned for the spring of 2005.
The centers currently under construction represent a total investment of $227.2
million, of which $154.7 million is our share. Construction loans or credit
facilities are in place to fund the costs of these projects. Initial unleveraged
yields on these developments are expected to range from 9% to 10%, after
management and development fees, with stabilized yields ranging from 9% to 11%.
We also have other projects in various phases of pre-development.
Expanding and updating anchor stores continues to be a priority for us.
Dillard's at Northwoods Mall in Charleston, SC, started their 30,000 square-foot
expansion this month. The newly expanded and fully remodeled 130,000-square-foot
store will open along with the overall renovation of the mall, scheduled for
completion in late 2004. At Arbor Place Mall in Atlanta, Georgia, JC Penney has
opened in the former Dekor store and we have begun the site work for the
addition of a 140,000 square foot Rich's Macy's scheduled to open in late 2004.
Upgrading and renovating our malls is a key component to their continued
dominance within their markets. Year to date we have completed three renovations
- Jefferson Mall, Parkdale Mall and St. Clair Square. The remaining renovations
underway, East Towne Mall, West Towne Mall and Eastgate Mall, will be completed
within the next thirty days. These six renovations represent a total investment
of approximately $61 million, excluding deferred maintenance costs of $19.8
million.
LEASING & OCCUPANCY
During the quarter, we entered into approximately 620,000 square feet of leases,
including 325,000 square feet of new leases and 295,000 square feet of renewals
14
of existing tenants. Even with the fallout of six cafeteria locations during the
quarter totaling more than 55,000 square feet, occupancy for the stabilized mall
portfolio held steady year over year at 92.1%.
At the end of the third quarter, total portfolio occupancy was 92.4%. In the
former Jacobs malls, occupancy improved by 180 basis points to 91.9% from 90.1%
one year ago.
Occupancy for the associated centers was 90.6% at the end of the third quarter.
This number is negatively impacted by the vacancy of a 68,000 square foot former
Ames store at Westmoreland Crossing and the loss of a 36,000 square foot Just
For Feet store at the Village at Rivergate in Nashville, TN. Excluding
Westmoreland Crossing, which was acquired late in the fourth quarter of 2002,
the associated center occupancy would have been 94.8%.
For the quarter, leasing spreads over rent and percentage rent in our stabilized
mall portfolio increased 16.3% based on initial rents and increased 18.6% based
on average or straight-line rents. [Note This is a correction from the
previously disclosed increases of 9.4% and 12.8% for the initial and average
rent increases, respectively. See the supplemental information exhibit for this
information] In the associated centers, leasing spreads decreased 2.7% on
initial rents and decreased 0.3% on the average. In the community centers, rents
decreased 9.0% on the initial rent and decreased 7.0% on the average rent. For
the nine months average rents increased 12.7% for stabilized malls, decreased
0.4% for associated centers and increased 3.3% for community centers. Leasing
results have always varied from quarter to quarter and we do not feel that
conclusions should be drawn from the results of any single quarter. A detailed
schedule of these rents will be included in the Form 8-K filing later this
afternoon.
RETAIL SALES
Experts anticipate an improved Christmas season, and we are cautiously
optimistic as well. As we enter this holiday season we see a number of
encouraging indicators including an improving economy that should give consumers
increased confidence. For mall stores of 10,000 square feet and less, same store
sales year to date increased 0.4% for those tenants that have reported. We are
very encouraged that sales for the quarter improved 3.1% led by a 6% increase in
September.
Occupancy costs as a percentage of sales at our malls was 13.9% for the nine
months of 2003 compared to 13.8% for the same period one year ago.
I will now turn the call over to John Foy to discuss our financial results.
DISPOSITIONS/ACQUISITIONS
In July we announced plans to acquire four regional malls from partnerships
managed by Faison Enterprises. The total consideration is $340 million,
including cash and the assumption of non-recourse fixed-rate debt of $170
million with an average interest rate of 7.71%. The acquisition of these four
regional malls is expected to generate an initial yield of 8.56% based upon
current income after management fees. We have closed on three of the four malls
and plan to close on the fourth mall, Southpark in Colonial Heights, Virginia
this December. In early December we will hold a property tour of the three malls
located in Virginia and hope that you will join us for this event.
In September we announced the formation of a joint venture with Galileo America
Shopping Trust, wherein CBL would contribute 90% of its ownership interest in 51
power and community centers and retain a 10% interest. Last week we closed on
the joint venture and the first phase of the funding with Galileo. Galileo's and
CBL's objective is to continue to invest in quality power and community centers
in the United States that are competitive and well located in their respective
markets.
15
During the third quarter, we sold two community centers, Signal Hills Village
and Chester Plaza for a combined gain of $623,000. The remaining community
centers properties will be sold if the opportunity to create value occurs.
As we said in yesterday's announcement, with the completion of Phase I of the
Galileo transaction we were able to raise $255 million in cash proceeds and
expect to receive an additional $56 million in January 2004 and $76 million in
January 2005. This gives us the ability to acquire additional assets where we
can add value through management, leasing, redevelopment and expansions. The
acquisitions market today is competitive, but we will continue to apply our
disciplined and conservative approach to opportunities in order to enhance
shareholder value.
FINANCIAL REVIEW
During the third quarter, operating performance improved, resulting in FFO per
share growth of 12.6%. Of this increase, 76.6% was represented by external
growth. The external growth resulted from one new mall opening, the acquisition
of the remaining partnership interests in four properties and the acquisition of
five regional malls. Of the FFO increase, 23.4% was from internal growth
attributable to stable occupancy levels, increases in rental revenue and tenant
reimbursements.
Our cost recovery ratio was 100% for the nine months compared to 92.5% for the
same period a year ago. Our cost recovery ratio improved in the third quarter
partially due to the renovations and remodelings of our malls and maintaining
relatively high occupancy levels. We expect that our cost recovery will be in
the mid 90's for the full year 2003 and in the range of 93% to 96% in 2004.
As we stated in our earnings release, same-center NOI growth was 2.0% for the
total portfolio, driven by maintaining high occupancy levels, tenant
reimbursements and specialty leasing. The breakdown by property type is as
follows:
1. Same-Center mall NOI increased 2.5%.
2. Associated centers experienced a 2.7% decrease, which amounts to only
$96,000 and was attributable to some vacancies and baddebt expense.
3. Community center NOI decreased 2.9%.
Our debt to equity capitalization at the end of the quarter was 46.90% giving us
tremendous flexibility on our balance sheet. In addition our floating rate debt
accounts for only 16.4% of our total debt. The variable rate debt includes
construction loans, lines of credit and short-term loans on operating
properties. The perpetual preferred Series C is trading well at under 7.5%
yield. Yesterday we announced a 10.7% dividend increase - and even with this
increase our dividend payout ratio remains at a conservative 56.7%. These
measures reflect our conservative approach to the business and position us to
take advantage of opportunities that may arise.
CAPITAL EXPENDITURES
During the third quarter, the Company spent $10.5 million for tenant allowances,
which will generate increased rents from tenants over the term of their leases.
Renovation expenditures, which includes some deferred maintenance items, were
$28.8 million for the quarter, a portion of which is recovered from tenants.
Deferred maintenance expenditures, the vast majority of which is recovered over
a five to fifteen-year period, were $6.6 million during the third quarter. This
year we project to spend a total of $30 million on tenant allowances, $25
million in deferred maintenance and $61 million on renovation expenditures.
16
Deferred maintenance capital expenditures are billed to the tenants as common
area maintenance expense. Renovation capital expenditures are for remodeling and
upgrading of our malls of which we estimate approximately 30% is recoverable
from tenants.
CONCLUSION
Also, before we open the call for Q&A, I would like to share our thoughts and
our outlook:
|X| While the Galileo transaction will result in dilution of $0.42 per
share short term, we feel the transaction will position us for even
greater growth over the long term by allowing us to redeploy that
capital.
|X| Our balance sheet has never been stronger in our ten years as a public
company. This is consistent with our conservative philosophy in
managing risk and providing us with the financial flexibility to take
advantage of opportunities that present themselves.
|X| We are extremely proud of our 10 year track record as a public
company. Over the ten years, we have delivered compound annual growth
in FFO per share of 12.4% and a total return to our shareholders of
274%. We look forward to another ten years of such tremendous success.
We appreciate your confidence and support. Thank you again for joining us today
and we welcome the opportunity to show you any of our newly renovated
properties. Stephen and I will now answer your questions.
17
Exhibit 99.3 Supplemental information - Quarter ended September 30, 2003
CBL & Associates Properties, Inc.
Consolidated Balance Sheets
(Preliminary and unaudited, in thousands, except share data)
September 30, December 31
2003 2002
----------- ----------
ASSETS
REAL ESTATE ASSETS:
Land $ 620,818 $ 570,818
----------- ----------
Buildings and improvements 3,683,102 3,394,787
----------- ----------
4,303,920 3,965,605
Less: Accumulated depreciation (510,047) (434,840)
----------- ----------
3,793,873 3,530,765
Developments in progress 102,099 80,720
----------- ----------
Net investment in real estate 3,895,972 3,611,485
CASH, RESTRICTED CASH AND CASH EQUIVALENTS 25,188 13,355
RECEIVABLES:
Tenant, net of allowance 41,947 37,994
Other 5,130 3,692
MORTGAGE NOTES RECEIVABLE 21,900 23,074
INVESTMENT IN UNCONSOLIDATED AFFILIATES 77,152 68,232
OTHER ASSETS 63,240 37,282
----------- ----------
$4,130,529 $3,795,114
LIABILITIES AND SHAREHOLDERS' EQUITY
MORTGAGE AND OTHER NOTES PAYABLE $2,618,216 $2,402,079
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 157,837 151,332
----------- ----------
Total liabilities 2,776,053 2,553,411
COMMITMENTS AND CONTINGENCIES
----------- ----------
MINORITY INTERESTS 494,439 500,513
----------- ----------
SHAREHOLDERS' EQUITY:
Preferred Stock, $.01 par value, 51 47
Common Stock, $.01 par value 302 298
Additional paid-in capital 878,920 765,686
Accumulated other comprehensive loss - (2,397)
Deferred compensation (1,706) -
Accumulated deficit (17,530) (22,444)
----------- ----------
Total shareholders' equity 860,037 741,190
----------- ----------
$ 4,130,529 $3,795,114
=========== ============
The balance sheet above is preliminary as of the date of this report. Please
refer the Company's filing on Form 10-Q when filed for a complete balance sheet
as of Sepetember 30, 2003
18
RECONCILIATION OF COMPANY'S SHARE OF TOTAL DEBT
(Dollars in thousands)
September 30, 2003
-----------------------------------------------------------------
Fixed Variable
Rate Rate Total
------------------ ------------------ ----------------
Consolidated debt $2,233,582 $ 384,634 $ 2,618,216
Minority investors' share of consolidated debt (19,720) -- (19,720)
Company's share of unconsolidated affiliates' debt 37,543 58,806 96,349
------------------ ------------------ ----------------
Company's share of consolidated and unconsolidated debt $2,251,405 $ 443,440 $ 2,694,845
================== ================== ================
Weighted average interest rate 6.78% 2.33% 6.05%
September 30, 2002
-----------------------------------------------------------------
Fixed Variable
Rate Rate Total
------------------ ------------------ ----------------
Consolidated debt $1,813,776 $ 396,550 $ 2,210,326
Minority investors' share of consolidated debt (19,062) -- (19,062)
Company's share of unconsolidated affiliates' debt 85,883 25,997 111,880
------------------ ------------------ ----------------
Company's share of consolidated and unconsolidated debt $1,880,597 $ 422,547 $ 2,303,144
================== ================== ================
Weighted average interest rate 7.19% 3.88% 6.58%
RECONCILIATION OF COMMON SHARES AND UNITS OUTSTANDING
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
Basic Diluted Basic Diluted
-------------- ------------- ------------ ---------------
2003:
Weighted average shares used to compute earnings per share 30,022 31,301 29,879 31,070
Weighted average operating partnership units 25,583 25,583 25,649 25,649
-------------- ------------- ------------ ---------------
Weighted average shares used to compute FFO per share 55,605 56,884 55,528 56,719
============== ============= ============ ===============
2002:
Weighted average shares used to compute earnings per share 29,616 30,476 28,364 29,191
Weighted average operating partnership units 24,750 24,750 24,822 24,822
-------------- ------------- ------------ ---------------
Weighted average shares used to compute FFO per share 54,366 55,227 53,186 54,013
============== ============= ============ ===============
19
Properties Under Renovation as of September 30, 2003
(In millions)
Completion
Property Location Est. Total Cost Cost To Date Date
-------- -------- --------------- ------------ ----------
Eastgate Mall Cincinnati, OH 12.6 9.2 Nov-03
East Towne Mall Madison, WI 7.2 5.4 Nov-03
West Towne Mall Madison, WI 8.0 7.7 Nov-03
Other Centers - -
--------- --------
Total $ 27.8 $ 22.3
========= ========
Detail of Roof and Parking Lot Capital Expenditures Year to Date (1)
(In thousands):
Deferred Renovation
Maintenance Expenditures
--------------- ----------------
Other capital expenditures $ 16,900 $ 45,030
Parking lot and parking lot lighting 1,917 5,817
Roof repairs and replacements 4,069 3,706
--------------- -----------------
Other $ 22,886 $ 54,553
=============== =================
(1) The capital expenditures incurred for maintenance such as parking lot
repairs, parking lot lighting and roofs are classified as deferred
maintenance expenditures. These expenditures are billed to tenants as
common area maintenance expense and the majority is recovered over a
five to fifteen year period. Renovation capital expenditures are for
remodelings and upgrades for enhancing our competitive position in the
market area. A portion of these expenditures covering items such as
new floor coverings, painting, lighting and new seating areas are also
recovered through tenant billings. The costs of other items such as
new entrances, new ceilings and skylights are not recovered from
tenants. We estimate that 30% of our renovation expenditures are
recoverable from our tenants over a ten to fifteen year period. The
third category of capital expenditures is tenant allowances, sometimes
made to third-generation tenants. Tenant allowances are recovered
through minimum rents from the tenants over the term of the lease.
20
Development Schedule for new projects under construction (in millions)
CBL's Cost Cost
or Share of Spent to Opening Initial
Property Location GLA ProForma Cost Date Date Yield
---------------------------------------------------------------------------------------------------------------------------
New Mall Development
--------------------
Coastal Grand* Myrtle Beach, SC 902,000 $66.8* $29.0 Mar-04 9%
(50/50 JV)
Mall Expansions
---------------
Arbor Place Rich's-Macy's Douglasville, GA 140,000 10.0 0.5 Nov-04 0%
East Towne Mall Madison, WS 139,000 20.3 -- Nov-04 7%
West Towne Mall Madison, WS 94,000 16.2 -- Nov-04 9%
Associated Center
-----------------
The Shoppes of Panama City Panama, FL 57,000 9.5 6.4 Feb-04 9%
Community Center
----------------
Charter Oak Marketplace Hartford, CT 312,000 13.2 1.3 Nov-04 10%
Garden City Plaza Garden City KS 26,500 2.4 0.1 Apr-04 11%
Wilkes-Barre Township Marketplace Wilkes-Barre Township, PA 281,000 10.6 3.5 May-04 10%
--------- ------- ------
Total 1,951,500 $ 149.0 $40.8
========= ======= ======
* JV development, initial build out approx. 1 million square feet
21
Comparable New Leasing and Renewal Leasing Activity for the Quarter and Year to
Date Ended September 30, 2003
New PSF New PSF
Square Prior PSF Base Rent % Change Base Rent % Change
Property Type Feet Base Rent Initial Initial Average Average
--------------------- ------------ ------------- ------------ ----------- ----------- ----------
QUARTER
----------
Community centers 259,000 11.63 11.89 2.2% 12.01 3.3%
Stabilized malls $ 305,000 $ 23.66 27.51 16.3% 28.06 18.6%
Associated centers 25,000 11.49 11.19 (2.6)% 11.46 (0.3)%
Community centers 65,000 13.08 11.90 (9.0)% 12.16 (7.0)%
YEAR TO DATE
---------------
Stabilized malls 1,114,000 $ 22.07 $ 24.27 10.0% 24.88 12.7%
Associated centers 61,000 13.59 13.31 (2.1)% 13.54 (0.4)%
Community centers 259,000 11.63 11.89 2.2% 12.01 3.3%
Comparable Stabilized Mall Leasing Activity For the Quarter and Year to Date
Ended September 30, 2003
New PSF New PSF
Square Prior PSF Base Rent % Change Base Rent % Change
Stabilized Malls Feet Base Rent Initial Initial Average Average
--------------------------- ------- ---------- --------- --------- ----------- ---------
QUARTER
------------
New leases 148,000 $ 23.21 $ 29.01 25.0% $ 29.70 28.0%
Renewal leases 157,000 24.09 26.10 8.3% 26.51 10.1%
YEAR TO DATE
------------
New leases 448,000 $ 23.42 $ 28.39 21.2% $ 29.44 25.9%
Renewal leases 666,000 21.16 21.51 1.63% 21.81 3.1%
Total Leasing Activity Compared to Tenants Vacating For the Quarter and Year To
Date Ended September 30, 2003 (Comparable & Non-Comparable)
Vacated
Average Average
Leased Base Rent Vacated Base Rent
Property Type Sq. Ft. PSF Sq. Ft. PSF
------------------------- ------------ ------------ ------------ ------------
QUARTER
---------------
Malls 416,000 $ 25.29 175,000 $ 18.80
Associated centers 43,000 12.23 62,000 8.08
Community centers 160,000 10.14 27,000 12.23
YEAR TO DATE
---------------
Malls 1,411,000 $ 24.14 645,000 $ 21.51
Associated centers 97,000 13.07 86,000 8.65
Community centers 567,000 9.16 107,000 10.94
22
Average Annual Base Rents Per Square Foot for Total Portfolio by Property Type
At September 30,
--------------------------------
2003 2002
---------------- --------------
Stabilized malls $ 24.76 $ 23.08
Non-stabilized malls 26.48 21.39
Associated centers 9.77 9.85
Community centers 9.52 9.66
Deferred Leasing Costs Capitalized
(in thousands)
Q1 Q2 Q3 Q4
------------------- ------------------ ----------------- ---------------
2003 $490 $333 $431 ----
2002 $45 $466 $710 $370
Debt-To-Total-Market Capitalization Ratio
(In thousands)
Shares
Outstanding Stock Price (1) Value
---------------------------------------------
Common stock and Operating Partnership units 55,434 $49.90 $ 2,766,135
9.0 % Series A Cumulative Redeemable Preferred Stock 2,675 $25.00 66,875
8.75% Series B Cumulative Redeemable Preferred Stock 2,000 $50.00 100,000
7.75% Series C Cumulative Redeemable Preferred Stock 460 $250.00 115,000
--------------
Total market equity 3,048,010
Company's share of total debt 2,694,845
--------------
Total market capitalization $ 5,742,855
==============
Debt-to-total-market capitalization ratio 46.9%
(1) Stock price for common stock and operating partnership units equals
the closing price of the common stock on September 30, 2003. The stock
price for the preferred stock represents the liquidation preference of
each respective series of preferred stock.
Dividend Payout Ratio for the Quarter
Ended September 30, 2003
2003 2002
-------------- ----------------
Dividend per share $ 0.655 $ 0.555
FFO per diluted, fully converted share $ 1.160 $ 1.030
-------------- ----------------
Dividend payout ratio 56.5% 53.9%
============== ================
23
Company Cafeteria Exposure
Number of Stores Square Feet Average Base Rent
---------------- ----------- -----------------
Open Cafeterias 8 86,000 $ 19.03
Closed Piccadilly Cafeteria 6 51,943 9.65
Impact on FFO of FASB 141 (Amortization of market value component)
September 30, 2003
----------------------------
Quarter Year to Date
---------- ------------
Addition (reduction) to base rent $ (17,000) $ 82,000
Summary of Outstanding Debt
In thousands
Balance
Maturity Interest Balance -----------------------
Property Location Date Rate 9/30/03 Fixed Floating
-------------------- ---------------------- --------- ---------- ------------ ---------- ----------
Albemarle, NC Northwoods Plaza Jun-12 9.750% 1,002 1,002 -
Asheboro, NC Randolph Mall Jul-12 6.500% 15,396 15,396 -
Asheville, NC Asheville Mall Sep-11 6.980% 69,745 69,745 -
Beaumont, TX Parkdale Mall Oct-10 5.010% 57,000 57,000 -
Beaumont, TX Parkdale Crossing Oct-10 5.010% 9,000 9,000 -
Brookfield, IL Brookfield Square May-05 7.498% 72,198 72,198 -
Brownsville, TX Sunrise Mall May-04 4.900% 40,000 40,000 -
Burnsville, MN Burnsville Center Aug-10 8.000% 71,225 71,225 -
Cary , NC Cary Towne Ctr Mar-09 6.850% 88,564 88,564 -
Charleston, SC Citadel Mall May-07 7.390% 31,968 31,968 -
Chattanooga, TN Hamilton Corner Aug-11 10.125% 2,556 2,556 -
Chattanooga, TN Hamilton Place Mar-07 7.000% 65,888 65,888 -
Chattanooga, TN CBL Center Aug-12 6.250% 14,809 14,809 -
Cincinnati, OH Eastgate Mall Dec-03 2.625% 41,250 - 41,250
Cincinnati, OH Eastgate Crossing Apr-07 6.380% 10,442 10,442 -
Columbia, SC Columbia Mall Oct-13 5.450% 34,000 34,000 -
Cortlandt, NY Cortlandt Towne Center Aug-08 6.900% 49,068 49,068 -
Dalton, GA Walnut Square Feb-08 10.125% 509 509 -
Douglasville, GA Arbor Place Mall Jul-12 6.510% 79,924 79,924 -
Douglasville, GA The Landing At Arbor Jul-12 6.510% 9,022 9,022 -
Fairview Heights, IL St. Claire Square Apr-09 7.000% 69,269 69,269 -
24
Fayetteville, NC Cross Creek Mall Apr-12 5.000% 74,454 74,454 -
Greensburg PA Westmoreland Mall Jan-13 5.050% 84,141 84,141 -
Hattiesburg, MS Turtle Creek Mall Mar-06 7.400% 31,246 31,246 -
Henderson, NC Henderson Square Apr-14 7.500% 5,470 5,470 -
Highpoint, NC Oak Hollow Mall Feb-08 7.310% 46,295 46,295 -
Hudson, NY Greenport Towne Ctr Sep-14 9.000% 3,686 3,686 -
Jackson, TN Old Hickory Mall Jul-12 6.510% 35,304 35,304 -
Janesville WI Janesville Mall Apr-16 8.375% 14,419 14,419 -
Knoxville, TN Cedar Bluff Xing Aug-07 10.625% 781 781 -
Knoxville, TN Suburban Plaza Jan-09 7.875% 7,840 7,840 -
Lansing MI Meridian Mall Oct-08 4.520% 96,000 96,000 -
Lexington KY Fayette Mall Jul-11 7.000% 95,752 95,752 -
Lexington KY Fayette Mall DevelopmenDec-04 2.725% 8,550 - 8,550
Louisville, KY Jefferson Mall Jul-12 6.510% 44,522 44,522 -
Louisville KY Springhurst Towne CenteAug-18 6.650% 20,484 20,484 -
Madison, WI East Towne Mall Jan-07 8.010% 28,019 28,019 -
Madison, WI West Towne Mall Jan-07 8.010% 43,318 43,318 -
Meridian, MS Bonita Lakes Mall Oct-09 6.820% 27,338 27,338 -
Meridian, MS Bonita Lakes Crossing Oct-09 6.820% 8,566 8,566 -
Midland MI Midland Mall Jun-03 2.620% 30,000 - 30,000
Morristown, TN College Square Sep-13 6.750% 12,522 12,522 -
N Charleston SC Northwoods Mall Jul-12 6.510% 63,743 63,743 -
Nashua, NH Willow Springs Plaza Aug-07 9.750% 3,032 3,032 -
Nashville, TN Coolsprings Galleria Sep-10 8.290% 60,729 60,729 -
Nashville, TN Hickory Hollow Mall Aug-08 6.770% 89,895 89,895 -
Nashville, TN Courtyard At Hickory Aug-08 6.770% 4,185 4,185 -
Nashville, TN Rivergate Mall Aug-08 6.770% 72,653 72,653 -
Nashville, TN Village At Rivergate Aug-08 6.770% 3,432 3,432 -
North Haven, CT North Haven Xing Oct-08 9.550% 4,982 4,982 -
Panama City, FL Panama City Mall Aug-12 7.300% 40,245 40,245 -
Portland, ME Bj'S Plaza Dec-11 10.400% 2,629 2,629 -
Racine, WI Regency Mall Jul-12 6.510% 34,912 34,912 -
Rockford, IL Cherryvale Mall Jul-06 7.375% 46,043 46,043 -
Saginaw, MI Fashion Square Jul-12 6.510% 61,193 61,193 -
Spartanburg, SC Westgate Mall Jul-12 6.500% 55,308 55,308 -
Spartanburg, SC Westgate Crossing Jul-10 8.420% 9,680 9,680 -
St Augustine FL Cobblestone Village Jun-05 2.120% 24,894 - 24,894
Stroud, PA Stroud Mall Dec-10 8.420% 31,877 31,877 -
Uvalde, TX Uvalde Plaza Feb-08 10.625% 467 467 -
25
Waterford, CT Waterford Commons Jun-04 2.770% 22,939 - 22,939
Wausau WI Wausau Center Dec-10 6.700% 13,701 13,701 -
Winston-Salem NC Hanes Mall Jul-08 7.310% 112,151 112,151 -
York, PA York Galleria Dec-10 8.340% 50,983 50,983 -
---------- --------- -----------
SUBTOTAL 2,361,215 2,233,582 127,634
Weighted average interest rate 6.53% 6.76% 2.56%
CONSTRUCTION LOANS
N/A Jan-00 0.000% - - -
---------- --------- -----------
SUBTOTAL - - -
LINES OF CREDIT 257,000 - 257,000
Weighted average interest rate 2.1181%
---------- --------- -----------
TOTAL BALANCE SHEET 2,618,215 2,233,582 384,634
Weighted average interest rate 6.10% 6.76% 2.26%
Plus CBL Share Of Unconsolidated Affiliates
Clarksville, TN Governors Square Sep-16 8.230% 15,510 15,510 -
Del Rio, TX Plaza Del Sol Nov-02 9.150% 1,998 1,998 -
Ft Smith AR Massard Crossing Feb-12 7.540% 592 592 -
Houston, TX Willowbrook Plaza Feb-12 7.540% 3,029 3,029 -
Huntsville, AL Parkway Place Dec-03 2.620% 29,235 - 29,235
Myrtle Beach, SC Coastal Grand May-06 2.875% 29,571 - 29,571
Paducah, KY Kentucky Oaks Jun-07 9.000% 16,211 16,211 -
Vicksburg, MS Pemberton Plaza Feb-12 7.540% 202 202 -
---------- --------- -----------
TOTAL 96,349 37,543 58,806
Minority
Less Minority Interest Interest
Chattanooga, TN CBL Center 8.0000% 6.2500% (1,185) (1,185) -
Chattanooga, TN Hamilton Corner 10.0000% 10.1250% (256) (256) -
Chattanooga, TN Hamilton Place 10.0000% 7.0000% (6,589) (6,589) -
Highpoint, NC Oak Hollow Mall 25.0000% 7.3100% (11,574) (11,574) -
Uvalde, TX Uvalde Plaza 25.0000% 10.6250% (117) (117)
---------- --------- -----------
(19,720) (19,720) -
---------- --------- -----------
TOTAL OBLIGATIONS $ 2,694,845 $ 2,251,405 $ 443,440
============ ============ ==========
Weighted average interest rate 6.05% 6.78% 2.33%
26
Total Debt of Unconsolidated Affiliates
---------------------------------------
Clarksville, TN Governors Square Sep-16 8.230% 32,654 32,654 -
Del Rio, TX Plaza Del Sol Aug-10 9.150% 3,996 3,996 -
Ft Smith, AR Massard Crossing Feb-12 7.540% 5,920 5,920 -
Houston, TX Willowbrook Plaza Feb-12 7.540% 30,292 30,292 -
Huntsville, AL Parkway Place Dec-03 2.620% 58,470 - 58,470
Myrtle Beach, SC Coastal Grand May-06 2.875% 29,571 - 29,571
Paducah, KY Kentucky Oaks Jun-07 9.000% 32,422 32,422 -
Vicksburg, MS Pemberton Plaza Feb-12 7.540% 2,023 2,023 -
---------- --------- -----------
TOTAL $ 195,348 $ 107,306 $ 88,041
========== ========== =========
Weighted average interest rate 5.75% 8.25% 2.71%
(1) The Sunrise Mall loan is fixed below a LIBOR rate of 1.9% and floating
between LIBOR rates of 1.90% and 2.5%.
(2) The Cross Creek Mall loan includes a $10,209 loan premium recorded on
acquisition of the loan which when amortized to interest expense will
make the market rate 5.0% . The stated rate on the loan is 7.4%.