10-Q 1 cbl-20240930.htm 10-Q 10-Q
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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 SEPTEMBER 30, 2024

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

62-1545718

 

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

 

2030 Hamilton Place Blvd., Suite 500, Chattanooga, TN 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 November 7, 2024, 30,749,272 shares of common stock were outstanding, excluding 34 treasury shares.


 

CBL & Associates Properties, Inc.

Table of Contents

 

 

 

 

 

 

PART I

FINANCIAL INFORMATION

1

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

1

 

 

 

 

Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023

1

 

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

2

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023

3

 

Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2024 and 2023

4

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023

6

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

7

 

 

 

Item 2.

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

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4.

Controls and Procedures

38

 

 

 

PART II

OTHER INFORMATION

39

 

 

 

Item 1.

Legal Proceedings

39

Item1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

39

Item 3.

Defaults Upon Senior Securities

39

Item 4.

Mine Safety Disclosures

39

Item 5.

Other Information

39

Item 6.

Exhibits

40

 

 

 

 

SIGNATURES

41

 

 

 


 

PART I – FINANCIAL INFORMATION

ITEM 1: Condensed Consolidated Financial Statements (Unaudited)

 

CBL & Associates Properties, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

ASSETS (1)

 

2024

 

 

2023

 

Real estate assets:

 

 

 

 

 

 

Land

 

$

563,426

 

 

$

585,191

 

Buildings and improvements

 

 

1,195,757

 

 

 

1,216,054

 

 

 

1,759,183

 

 

 

1,801,245

 

Accumulated depreciation

 

 

(277,484

)

 

 

(228,034

)

 

 

1,481,699

 

 

 

1,573,211

 

Developments in progress

 

 

8,816

 

 

 

8,900

 

Net investment in real estate assets

 

 

1,490,515

 

 

 

1,582,111

 

Cash and cash equivalents

 

 

65,113

 

 

 

34,188

 

Restricted cash

 

 

76,355

 

 

 

88,888

 

Available-for-sale securities - at fair value (amortized cost of $241,289 and $261,869 as of September 30, 2024 and December 31, 2023, respectively)

 

 

241,930

 

 

 

262,142

 

Receivables:

 

 

 

 

 

 

Tenant

 

 

39,846

 

 

 

43,436

 

Other

 

 

2,231

 

 

 

2,752

 

Investments in unconsolidated affiliates

 

 

83,701

 

 

 

76,458

 

In-place leases, net

 

 

114,099

 

 

 

157,639

 

Intangible lease assets and other assets

 

 

133,826

 

 

 

158,291

 

 

$

2,247,616

 

 

$

2,405,905

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Mortgage and other indebtedness, net

 

$

1,775,119

 

 

$

1,888,803

 

Accounts payable and accrued liabilities

 

 

174,402

 

 

 

186,485

 

Total liabilities (1)

 

 

1,949,521

 

 

 

2,075,288

 

Shareholders' equity:

 

 

 

 

 

 

Common stock, $.001 par value, 200,000,000 shares authorized, 31,249,272 and 31,975,645 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively (in each case, excluding 34 treasury shares)

 

31

 

 

 

32

 

Additional paid-in capital

 

 

705,181

 

 

 

719,125

 

Accumulated other comprehensive income

 

 

645

 

 

 

610

 

Accumulated deficit

 

 

(397,511

)

 

 

(380,446

)

Total shareholders' equity

 

 

308,346

 

 

 

339,321

 

Noncontrolling interests

 

 

(10,251

)

 

 

(8,704

)

Total equity

 

 

298,095

 

 

 

330,617

 

 

$

2,247,616

 

 

$

2,405,905

 

(1)
As of September 30, 2024, includes $175,142 of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and $209,814 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


 

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

119,992

 

 

$

124,783

 

 

$

368,090

 

 

$

379,949

 

Management, development and leasing fees

 

 

1,990

 

 

 

1,840

 

 

 

5,712

 

 

 

6,096

 

Other

 

 

3,107

 

 

 

2,728

 

 

 

10,069

 

 

 

9,532

 

Total revenues

 

 

125,089

 

 

 

129,351

 

 

 

383,871

 

 

 

395,577

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

(23,336

)

 

 

(22,621

)

 

 

(67,903

)

 

 

(68,742

)

Depreciation and amortization

 

 

(32,326

)

 

 

(45,118

)

 

 

(109,030

)

 

 

(148,129

)

Real estate taxes

 

 

(13,271

)

 

 

(13,794

)

 

 

(35,568

)

 

 

(43,063

)

Maintenance and repairs

 

 

(8,890

)

 

 

(8,487

)

 

 

(28,007

)

 

 

(30,002

)

General and administrative

 

 

(15,402

)

 

 

(14,398

)

 

 

(50,647

)

 

 

(49,783

)

Loss on impairment

 

 

 

 

 

 

 

 

(836

)

 

 

 

Litigation settlement

 

 

13

 

 

 

2,060

 

 

 

153

 

 

 

2,178

 

Other

 

 

(15

)

 

 

 

 

 

(142

)

 

 

(198

)

Total expenses

 

 

(93,227

)

 

 

(102,358

)

 

 

(291,980

)

 

 

(337,739

)

OTHER INCOME (EXPENSES):

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

4,023

 

 

 

3,628

 

 

 

12,109

 

 

 

9,260

 

Interest expense

 

 

(38,849

)

 

 

(42,891

)

 

 

(118,068

)

 

 

(130,588

)

Loss on extinguishment of debt

 

 

(819

)

 

 

 

 

 

(819

)

 

 

 

Gain on deconsolidation

 

 

 

 

 

19,728

 

 

 

 

 

 

47,879

 

Gain on sales of real estate assets

 

 

12,816

 

 

 

3,414

 

 

 

16,487

 

 

 

4,896

 

Income tax provision

 

 

(364

)

 

 

(1,263

)

 

 

(856

)

 

 

(1,381

)

Equity in earnings of unconsolidated affiliates

 

 

7,084

 

 

 

3,266

 

 

 

18,826

 

 

 

2,822

 

Total other expenses

 

 

(16,109

)

 

 

(14,118

)

 

 

(72,321

)

 

 

(67,112

)

Net income (loss)

 

 

15,753

 

 

 

12,875

 

 

 

19,570

 

 

 

(9,274

)

Net (income) loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(1

)

 

 

6

 

 

 

(1

)

 

 

6

 

Other consolidated subsidiaries

 

 

446

 

 

 

381

 

 

 

1,423

 

 

 

4,001

 

Net income (loss) attributable to the Company

 

 

16,198

 

 

 

13,262

 

 

 

20,992

 

 

 

(5,267

)

Earnings allocable to unvested restricted stock

 

 

(333

)

 

 

(305

)

 

 

(852

)

 

 

(837

)

Net income (loss) attributable to common shareholders

 

$

15,865

 

 

$

12,957

 

 

$

20,140

 

 

$

(6,104

)

Basic and diluted per share data attributable to common shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.52

 

 

$

0.41

 

 

$

0.65

 

 

$

(0.19

)

Diluted earnings per share

 

 

0.52

 

 

 

0.41

 

 

 

0.65

 

 

 

(0.19

)

Weighted-average basic shares

 

 

30,756

 

 

 

31,305

 

 

 

31,149

 

 

 

31,307

 

Weighted-average diluted shares

 

 

30,756

 

 

 

31,305

 

 

 

31,151

 

 

 

31,307

 

 

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

 

2


 

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands, except share data)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net income (loss)

 

$

15,753

 

 

$

12,875

 

 

$

19,570

 

 

$

(9,274

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on interest rate swap

 

 

(831

)

 

 

330

 

 

 

(334

)

 

 

1,210

 

Unrealized gain on available-for-sale securities

 

 

833

 

 

 

288

 

 

 

369

 

 

 

801

 

Total other comprehensive income

 

 

2

 

 

 

618

 

 

 

35

 

 

 

2,011

 

Comprehensive income (loss)

 

 

15,755

 

 

 

13,493

 

 

 

19,605

 

 

 

(7,263

)

Comprehensive (income) loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

 

 

 

    Operating Partnership

 

 

(1

)

 

 

6

 

 

 

(1

)

 

 

6

 

    Other consolidated subsidiaries

 

 

446

 

 

 

381

 

 

 

1,423

 

 

 

4,001

 

Comprehensive income (loss) attributable to the Company

 

 

16,200

 

 

 

13,880

 

 

 

21,027

 

 

 

(3,256

)

Earnings allocable to unvested restricted stock

 

 

(333

)

 

 

(305

)

 

 

(852

)

 

 

(837

)

Comprehensive income (loss) attributable to common shareholders

 

$

15,867

 

 

$

13,575

 

 

$

20,175

 

 

$

(4,093

)

 

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

3


 

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Equity

(In thousands, except share data)

(Unaudited)

 

 

Equity

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

 

 

Common
Stock

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Accumulated Deficit

 

 

Total
Shareholders'
Equity

 

 

Noncontrolling
Interests

 

 

Total
Equity

 

Balance, December 31, 2022

 

$

32

 

 

$

710,497

 

 

$

(1,054

)

 

$

(338,934

)

 

$

370,541

 

 

$

(3,412

)

 

$

367,129

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

2,259

 

 

 

2,259

 

 

 

(1,745

)

 

 

514

 

Other comprehensive income

 

 

 

 

 

 

 

 

530

 

 

 

 

 

 

530

 

 

 

 

 

 

530

 

Dividends declared - common stock

 

 

 

 

 

 

 

 

 

 

 

(12,024

)

 

 

(12,024

)

 

 

 

 

 

(12,024

)

Issuance of 152,905 shares of restricted common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 133,221 shares of common stock associated with performance stock units, net of shares withheld for tax

 

 

 

 

 

(1,793

)

 

 

 

 

 

 

 

 

(1,793

)

 

 

 

 

 

(1,793

)

Amortization of deferred compensation

 

 

 

 

 

1,843

 

 

 

 

 

 

 

 

 

1,843

 

 

 

 

 

 

1,843

 

Compensation expense related to performance stock units

 

 

 

 

 

1,409

 

 

 

 

 

 

 

 

 

1,409

 

 

 

 

 

 

1,409

 

Distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

(3

)

Balance, March 31, 2023

 

 

32

 

 

 

711,956

 

 

 

(524

)

 

 

(348,699

)

 

 

362,765

 

 

 

(5,160

)

 

 

357,605

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(20,788

)

 

 

(20,788

)

 

 

(1,875

)

 

 

(22,663

)

Other comprehensive income

 

 

 

 

 

 

 

 

863

 

 

 

 

 

 

863

 

 

 

 

 

 

863

 

Dividends declared - common stock

 

 

 

 

 

 

 

 

 

 

 

(12,022

)

 

 

(12,022

)

 

 

 

 

 

(12,022

)

Distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,889

)

 

 

(1,889

)

Amortization of deferred compensation

 

 

 

 

 

1,797

 

 

 

 

 

 

 

 

 

1,797

 

 

 

 

 

 

1,797

 

Compensation expense related to performance stock units

 

 

 

 

 

1,410

 

 

 

 

 

 

 

 

 

1,410

 

 

 

 

 

 

1,410

 

Balance, June 30, 2023

 

 

32

 

 

 

715,163

 

 

 

339

 

 

 

(381,509

)

 

 

334,025

 

 

 

(8,924

)

 

 

325,101

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

13,262

 

 

 

13,262

 

 

 

(387

)

 

 

12,875

 

Other comprehensive income

 

 

 

 

 

 

 

 

618

 

 

 

 

 

 

618

 

 

 

 

 

 

618

 

Dividends declared - common stock

 

 

 

 

 

 

 

 

 

 

 

(12,011

)

 

 

(12,011

)

 

 

 

 

 

(12,011

)

Cancellation of 1,218 shares of restricted common stock

 

 

 

 

 

(27

)

 

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

Repurchase of 38,572 shares of common stock

 

 

 

 

 

(826

)

 

 

 

 

 

 

 

 

(826

)

 

 

 

 

 

(826

)

Adjustment for noncontrolling interests

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

4

 

 

 

(4

)

 

 

 

Contributions from noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

117

 

 

 

117

 

Distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(122

)

 

 

(122

)

Amortization of deferred compensation

 

 

 

 

 

1,835

 

 

 

 

 

 

 

 

 

1,835

 

 

 

 

 

 

1,835

 

Compensation expense related to performance stock units

 

 

 

 

 

1,410

 

 

 

 

 

 

 

 

 

1,410

 

 

 

 

 

 

1,410

 

Balance, September 30, 2023

 

$

32

 

 

$

717,559

 

 

$

957

 

 

$

(380,258

)

 

$

338,290

 

 

$

(9,320

)

 

$

328,970

 

 

4


 

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Equity

(Continued)

(In thousands, except share data)

(Unaudited)

 

 

Equity

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

 

 

Common
Stock

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Accumulated
Deficit

 

 

Total
Shareholders'
Equity

 

 

Noncontrolling
Interests

 

 

Total
Equity

 

Balance, December 31, 2023

 

$

32

 

 

$

719,125

 

 

$

610

 

 

$

(380,446

)

 

$

339,321

 

 

$

(8,704

)

 

$

330,617

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

50

 

 

 

50

 

 

 

(524

)

 

 

(474

)

Other comprehensive income

 

 

 

 

 

 

 

 

116

 

 

 

 

 

 

116

 

 

 

 

 

 

116

 

Dividends declared - common stock

 

 

 

 

 

 

 

 

 

 

 

(12,870

)

 

 

(12,870

)

 

 

 

 

 

(12,870

)

Issuance of 145,352 shares of restricted common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of 164,837 shares of common stock associated with performance stock units, net of shares withheld for tax

 

 

 

 

 

(769

)

 

 

 

 

 

 

 

 

(769

)

 

 

 

 

 

(769

)

Distributions to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(133

)

 

 

(133

)

Amortization of deferred compensation

 

 

 

 

 

2,012

 

 

 

 

 

 

 

 

 

2,012

 

 

 

 

 

 

2,012

 

Compensation expense related to performance stock units

 

 

 

 

 

1,667

 

 

 

 

 

 

 

 

 

1,667

 

 

 

 

 

 

1,667

 

Cancellation of 12,484 shares of restricted common stock

 

 

 

 

 

(292

)

 

 

 

 

 

 

 

 

(292

)

 

 

 

 

 

(292

)

Repurchases of 239,411 shares of common stock

 

 

 

 

 

(5,037

)

 

 

 

 

 

 

 

 

(5,037

)

 

 

 

 

 

(5,037

)

Contributions from noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

13

 

Balance, March 31, 2024

 

 

32

 

 

 

716,706

 

 

 

726

 

 

 

(393,266

)

 

 

324,198

 

 

 

(9,348

)

 

 

314,850

 

Net income (loss)