10-Q 1 cbl-10q_20220331.htm 10-Q cbl-10q_20220331.htm
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Table of Contents

UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ____________ TO _______________

COMMISSION FILE NO. 1-12494 (CBL & ASSOCIATES PROPERTIES, INC.) 

 

CBL & ASSOCIATES PROPERTIES, INC. 

(Exact Name of registrant as specified in its charter)

 

 

Delaware (CBL & ASSOCIATES PROPERTIES, INC.)

 

62-1545718

 

 

 

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)

 

2030 Hamilton Place Blvd., Suite 500, ChattanoogaTN  37421-6000

(Address of principal executive office, including zip code)

423-855-0001

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered under Section 12(b) of the Act:

 

Title of each Class

 

Trading

Symbol(s)

 

Name of each exchange on

which registered

Common Stock, $0.001 par value

 

CBL

 

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

 

 

 

Yes

No

 

 

 

 

 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

 

 

Yes

No

 

 

 

 

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. 

 

Large accelerated filer

 

Accelerated filer 

Non-accelerated filer

 

Smaller reporting company 

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

 

 

  Yes     

No 

 

 

 

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

 

 

  Yes     

No 

As of May 10, 2022, 31,814,178 shares of common stock were outstanding.


Table of Contents

 

 

CBL & Associates Properties, Inc.

Table of Contents

 

 

 

 

 

 

PART I

FINANCIAL INFORMATION

1

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

1

 

 

 

CBL & Associates Properties, Inc.

 

Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021

1

 

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021

2

 

Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2022 and 2021

3

 

Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2022 and 2021

4

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021

5

 

 

 

CBL & Associates Properties, Inc.

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

 

 

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36

Item 4.

Controls and Procedures

36

 

 

 

PART II

OTHER INFORMATION

38

 

 

 

Item 1.

Legal Proceedings

38

Item1A.

Risk Factors

38

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

38

Item 3.

Defaults Upon Senior Securities

38

Item 4.

Mine Safety Disclosures

38

Item 5.

Other Information

38

Item 6.

Exhibits

39

 

 

 

 

SIGNATURES

40

 

 

 


Table of Contents

 

PART I – FINANCIAL INFORMATION

ITEM 1: Financial Statements

CBL & Associates Properties, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

 

ASSETS (1)

 

March 31,

2022

 

 

December 31,

2021

 

Real estate assets:

 

 

 

 

 

 

 

 

Land

 

$

594,355

 

 

$

599,283

 

Buildings and improvements

 

 

1,161,414

 

 

 

1,173,106

 

 

 

 

1,755,769

 

 

 

1,772,389

 

Accumulated depreciation

 

 

(49,188

)

 

 

(19,939

)

 

 

 

1,706,581

 

 

 

1,752,450

 

Developments in progress

 

 

18,493

 

 

 

16,665

 

Net investment in real estate assets

 

 

1,725,074

 

 

 

1,769,115

 

Cash and cash equivalents

 

 

185,744

 

 

 

169,554

 

Available-for-sale securities - at fair value (amortized cost of $149,936 and $149,999 as of March 31, 2022 and December 31, 2021, respectively)

 

 

149,975

 

 

 

149,996

 

Receivables:

 

 

 

 

 

 

 

 

Tenant

 

 

21,818

 

 

 

25,190

 

Other

 

 

5,356

 

 

 

4,793

 

Investments in unconsolidated affiliates

 

 

100,685

 

 

 

103,655

 

In-place leases, net

 

 

341,152

 

 

 

384,705

 

Above market leases, net

 

 

216,648

 

 

 

234,286

 

Intangible lease assets and other assets

 

 

102,872

 

 

 

104,685

 

 

 

$

2,849,324

 

 

$

2,945,979

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

 

 

 

 

 

 

 

Mortgage and other indebtedness, net

 

$

1,639,469

 

 

$

1,813,209

 

10% senior secured notes - at fair value (carrying amount of $395,000 as of March 31, 2022 and December 31, 2021, respectively)

 

 

395,593

 

 

 

395,395

 

Below market leases, net

 

 

141,388

 

 

 

151,871

 

Accounts payable and accrued liabilities

 

 

159,531

 

 

 

184,404

 

Total liabilities

 

 

2,335,981

 

 

 

2,544,879

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common stock, $.001 par value, 200,000,000 shares authorized, 31,807,511 and 20,774,716 issued and outstanding in 2022 and 2021, respectively

 

32

 

 

 

21

 

Additional paid-in capital

 

 

702,996

 

 

 

547,726

 

Accumulated other comprehensive income (loss)

 

 

39

 

 

 

(3

)

Accumulated deficit

 

 

(192,267

)

 

 

(151,545

)

Total shareholders' equity

 

 

510,800

 

 

 

396,199

 

Noncontrolling interests

 

 

2,543

 

 

 

4,901

 

Total equity

 

 

513,343

 

 

 

401,100

 

 

 

$

2,849,324

 

 

$

2,945,979

 

(1)

As of March 31, 2022, includes $254,237 of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and $142,132 of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. See Note 7.

The accompanying notes are an integral part of these condensed consolidated statements.

1


Table of Contents

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

For the Three Months Ended March 31,

 

 

 

For the Three Months Ended March 31,

 

 

 

2022

 

 

 

2021

 

REVENUES:

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

135,332

 

 

 

$

128,175

 

Management, development and leasing fees

 

 

1,769

 

 

 

 

1,659

 

Other

 

 

3,001

 

 

 

 

3,350

 

Total revenues

 

 

140,102

 

 

 

 

133,184

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Property operating

 

 

(23,344

)

 

 

 

(21,802

)

Depreciation and amortization

 

 

(68,943

)

 

 

 

(48,112

)

Real estate taxes

 

 

(14,435

)

 

 

 

(16,551

)

Maintenance and repairs

 

 

(10,566

)

 

 

 

(10,781

)

General and administrative

 

 

(18,074

)

 

 

 

(12,612

)

Loss on impairment

 

 

 

 

 

 

(57,182

)

Litigation settlement

 

 

81

 

 

 

 

858

 

Total expenses

 

 

(135,281

)

 

 

 

(166,182

)

OTHER INCOME (EXPENSES):

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

155

 

 

 

 

776

 

Interest expense

 

 

(90,659

)

 

 

 

(24,130

)

Gain on deconsolidation

 

 

36,250

 

 

 

 

55,131

 

Gain (loss) on sales of real estate assets

 

 

16

 

 

 

 

(299

)

Reorganization items, net

 

 

(1,571

)

 

 

 

(22,933

)

Income tax provision

 

 

(801

)

 

 

 

(751

)

Equity in earnings (losses) of unconsolidated affiliates

 

 

8,566

 

 

 

 

(3,076

)

Total other income (expenses)

 

 

(48,044

)

 

 

 

4,718

 

Net loss

 

 

(43,223

)

 

 

 

(28,280

)

Net loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

15

 

 

 

 

698

 

Other consolidated subsidiaries

 

 

2,486

 

 

 

 

819

 

Net loss attributable to common shareholders

 

$

(40,722

)

 

 

$

(26,763

)

Basic and diluted per share data attributable to common shareholders:

 

 

 

 

 

 

 

 

 

Net loss attributable to common shareholders

 

$

(1.45

)

 

 

$

(0.14

)

Weighted-average common and potential dilutive common shares outstanding

 

 

27,998

 

 

 

 

196,509

 

 

The accompanying notes are an integral part of these condensed consolidated statements.

2


Table of Contents

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(In thousands, except share data)

(Unaudited)

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months Ended March 31,

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

 

2021

 

Net loss

 

$

(43,223

)

 

 

$

(28,280

)

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

Unrealized gain on available-for-sale securities

 

 

42

 

 

 

 

21

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

 

(43,181

)

 

 

 

(28,259

)

Comprehensive loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

    Operating Partnership

 

 

15

 

 

 

 

698

 

    Other consolidated subsidiaries

 

 

2,486

 

 

 

 

819

 

Comprehensive loss attributable to the Company:

 

$

(40,680

)

 

 

$

(26,742

)

 

The accompanying notes are an integral part of these condensed consolidated statements.

3


Table of Contents

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Equity

(In thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Redeemable

Noncontrolling

Interests

 

 

Preferred

Stock

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Accumulated

Other

Comprehensive

Income

 

 

Dividends

in

Excess of

Cumulative

Earnings

 

 

Total

Shareholders'

Equity

 

 

Noncontrolling

Interests

 

 

Total

Equity

 

Balance, December 31, 2020 (Predecessor)

 

$

(265

)

 

$

25

 

 

$

1,966

 

 

$

1,986,269

 

 

$

18

 

 

$

(1,456,435

)

 

$

531,843

 

 

$

2,454

 

 

$

534,297

 

Net loss

 

 

(213

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,763

)

 

 

(26,763

)

 

 

(1,304

)

 

 

(28,067

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Cancellation of 111,139 shares of restricted common stock

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

Amortization of deferred compensation

 

 

 

 

 

 

 

 

 

 

 

304

 

 

 

 

 

 

 

 

 

304

 

 

 

 

 

 

304

 

Performance stock units

 

 

 

 

 

 

 

 

 

 

 

93

 

 

 

 

 

 

 

 

 

93

 

 

 

 

 

 

93

 

Distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11

)

 

 

(11

)

Balance, March 31, 2021 (Predecessor)

 

$

(478

)

 

$

25

 

 

$

1,965

 

 

$

1,986,666

 

 

$

21

 

 

$

(1,483,198

)

 

$

505,479

 

 

$

1,139

 

 

$

506,618

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Accumulated

Other

Comprehensive

Income (Loss)

 

 

Dividends

in

Excess of

Cumulative

Earnings

 

 

Total

Shareholders'

Equity

 

 

Noncontrolling

Interests

 

 

Total

Equity

 

Balance, December 31, 2021 (Successor)

 

$

21

 

 

$

547,726

 

 

$

(3

)

 

$

(151,545

)

 

$

396,199

 

 

$

4,901

 

 

$

401,100

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(40,722

)

 

 

(40,722

)

 

 

(2,501

)

 

 

(43,223

)

Other comprehensive income

 

 

 

 

 

 

 

 

42

 

 

 

 

 

 

42

 

 

 

 

 

 

42

 

Shared-based compensation expense

 

 

 

 

 

2,743

 

 

 

 

 

 

 

 

 

2,743

 

 

 

 

 

 

2,743

 

Conversion of exchangeable notes into 10,982,795 shares of common stock

 

 

11

 

 

 

152,527

 

 

 

 

 

 

 

 

 

152,538

 

 

 

 

 

 

152,538

 

Contributions from noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

143

 

 

 

143

 

Balance, March 31, 2022 (Successor)

 

$

32

 

 

$

702,996

 

 

$

39

 

 

$

(192,267

)

 

$

510,800

 

 

$

2,543

 

 

$

513,343

 

 

The accompanying notes are an integral part of these condensed consolidated statements.

 

 

4


Table of Contents

 

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Successor

 

 

 

Predecessor

 

 

 

Three Months Ended March 31,

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Net loss

 

$

(43,223

)

 

 

$

(28,280

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

68,943

 

 

 

 

48,112

 

Net amortization of deferred financing costs and debt discounts

 

 

63,655

 

 

 

 

923

 

Net amortization of intangible lease assets and liabilities

 

 

6,323

 

 

 

 

58

 

(Gain) loss on sales of real estate assets

 

 

(16

)

 

 

 

299

 

Gain on deconsolidation

 

 

(36,250

)

 

 

 

(55,131

)

Share-based compensation expense

 

 

2,743

 

 

 

 

395

 

Loss on impairment

 

 

 

 

 

 

57,182

 

Equity in (earnings) losses of unconsolidated affiliates

 

 

(8,566

)

 

 

 

3,076

 

Distributions of earnings from unconsolidated affiliates

 

 

7,840

 

 

 

 

2,566

 

Change in estimate of uncollectable revenues

 

 

(737

)

 

 

 

6,486

 

Change in deferred tax accounts

 

 

(67

)

 

 

 

 

Changes in:

 

 

 

 

 

 

 

 

 

Tenant and other receivables

 

 

3,305

 

 

 

 

11,017

 

Other assets

 

 

(5,114

)

 

 

 

(8,115

)

Accounts payable and accrued liabilities

 

 

(16,407

)

 

 

 

24,181

 

Net cash provided by operating activities

 

 

42,429

 

 

 

 

62,769

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Additions to real estate assets

 

 

(5,762

)

 

 

 

(6,865

)

Proceeds from sales of real estate assets

 

 

16

 

 

 

 

2,510

 

Purchases of available-for-sale securities

 

 

(149,936

)

 

 

 

(136,392

)

Redemptions of available-for-sale securities

 

 

149,998

 

 

 

 

135,987

 

Payments received on mortgage and other notes receivable

 

 

13

 

 

 

 

224

 

Additional investments in and advances to unconsolidated affiliates

 

 

(997

)

 

 

 

57

 

Distributions in excess of equity in earnings of unconsolidated affiliates

 

 

4,697

 

 

 

 

2,279

 

Changes in other assets

 

 

(471

)

 

 

 

(364

)

Net cash used in investing activities

 

 

(2,442

)

 

 

 

(2,564

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Principal payments on mortgage and other indebtedness

 

 

(29,500

)

 

 

 

(13,732

)

Additions to deferred financing costs

 

 

(1,668

)

 

 

 

(16

)

Contributions from noncontrolling interests

 

 

143

 

 

 

 

 

Payment of tax withholdings for restricted stock awards

 

 

 

 

 

 

(1

)

Distributions to noncontrolling interests

 

 

 

 

 

 

(11

)

Net cash used in financing activities

 

 

(31,025

)

 

 

 

(13,760

)

NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

8,962

 

 

 

 

46,445

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

 

 

236,198

 

 

 

 

121,713

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

 

$

245,160

 

 

 

$

168,158

 

Reconciliation from condensed consolidated statements of cash flows to condensed consolidated balance sheets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

185,744

 

 

 

$

84,646

 

Restricted cash (1):

 

 

 

 

 

 

 

 

 

Restricted cash

 

 

28,678

 

 

 

 

61,146

 

Mortgage escrows

 

 

30,738

 

 

 

 

22,366

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

 

$

245,160

 

 

 

$