CBL & Associates Properties Reports Fourth Quarter and 1998 Results.CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Feb. 3, 1999-- -- 1998 FFO FFO See: Funds from operations per share increases 17.5% to $2.68 -- Total portfolio occupancy increases to 94.8% -- Proposes 4.8% increase in quarterly dividend CBL Cbl cobalamin. & Associates Properties, Inc. (NYSE NYSE See: New York Stock Exchange :CBL) today announced results for the fourth quarter and year ended December 31, 1998. FUNDS FROM OPERATIONS Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. Total funds from operations (FFO) increased 22.9% to $26,504,000 for the fourth quarter of 1998 from $21,562,000 in the fourth quarter of 1997. FFO per share increased 12.5% on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , fully converted basis in the fourth quarter to $0.72 from $0.64 per share in the prior-year period. Total funds from operations increased 22.3% to $93,614,000 in 1998 from $76,514,000 in 1997. FFO per share increased 17.5% on a diluted, fully converted basis in 1998 to $2.68 from $2.28 per share in 1997. Commencing with the first quarter of 1998, to be consistent with industry practice, the Company included straight-line rents in its FFO calculation. Previous periods have been restated for comparison purposes. The impact on FFO from straight-line rents amounted to increases of $1,286,000, or $0.03 per diluted, fully converted share in the fourth quarter of 1998, and $917,000, or $0.03 per diluted, fully converted share, in the prior-year period. The impact on FFO amounted to increases of $4,226,000, or $0.12 per diluted, fully converted share in 1998, and $2,446,000, or $0.07 per diluted, fully converted share, in 1997. The Company's FFO calculation does not include gains on sales of outparcels, which is allowed by the National Association of Real Estate Investment Trusts' definition of FFO. Had outparcel sales been included, FFO would have been $0.75 per diluted, fully converted share for the fourth quarter of 1998 and $2.80 per diluted, fully converted share for 1998, as compared with $0.72 and $2.68 as reported, respectively. FINANCIAL HIGHLIGHTS Income before extraordinary item increased 10.4% in the fourth quarter of 1998 to $11,555,000 from $10,462,000 in the fourth quarter of 1997. Revenues increased 47.0% in the fourth quarter of 1998 to $74,472,000 from $50,661,000 in the fourth quarter of 1997. Income before extraordinary item increased 14.6% in 1998 to $41,298,000 from $36,033,000 in the prior year. Revenues increased 43.4% in 1998 to $254,640,000 from $177,604,000 in the prior year. CBL's chairman and chief executive officer, Charles B. Lebovitz, said, "We set some very ambitious goals and expectations as a company in 1998. I am proud to report that we exceeded every one of these goals. We achieved 17.5% growth in FFO per share; increased our franchise positions in existing markets through expansions, renovations, releasing, new developments and acquisitions; and expanded our geographic focus by acquiring shopping centers shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into in several new markets. This performance translated into a 12.1% total return to our shareholders. "Significant occupancy improvement at our malls and associated centers as well as the positive impact from the 7.5 million square feet of centers developed and acquired in 1998 helped to produce our fifth consecutive quarter of double-digit growth in FFO per share. The strong 1998 results validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data our growth strategy, and we will continue to implement this strategy of maximizing returns from new and existing properties and expanding our portfolio through development and acquisitions to facilitate our growth in 1999 and beyond." CBL acquired a total of 6.6 million square feet in 1998, including eight regional malls, two associated centers and one community center for a total investment of $574 million. These properties were acquired at an average NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics yield of 9.0%, excluding management fees and structural reserves. The shopping centers and their dates of acquisition are: -- Asheville Mall - Asheville, NC January 1998 -- Burnsville Center Burnsville Center is located in Burnsville, Minnesota. It is one of the larger enclosed malls in Minnesota with over 150 stores and approximately 1.1 million square feet. The mall opened in 1977 after Joe Rimnac sold purchased farmland to Homart Development; however, the mall is - Minneapolis (Burnsville), MN January 1998 -- Stroud stroud n. A coarse woolen cloth or blanket. [After Stroud, an urban district of southwest-central England.] Mall - Stroudsburg, PA April 1998 -- Hickory Hollow Mall Hickory Hollow Mall is a regional indoor shopping mall in Antioch, Tennessee a suburb of Nashville, Tennessee Opened: 1978 Renovated: 2002 GLA: 1,088,280 sq. ft. Total Stores: 150+ Total Acreage: 72 +/- AC Total Parking: 5,795 Trade Area Population: 768,390 (2006 est. - Nashville, TN July 1998 -- Rivergate Mall Rivergate Mall is a shopping mall located in Goodlettsville, Tennessee. The mall has four anchor stores, Sears, Dillards, JC Penney, and Macy's. The mall property is owned and managed by CBL & Associates Properties. - Nashville, TN July 1998 -- The Village at Rivergate - Nashville, TN July 1998 -- The Courtyard For alternative meanings of the word "court", see: Court (disambiguation). A court or courtyard is an enclosed area, often a space enclosed by a building that is open to the sky. at Hickory Hickory, city, United States Hickory, city (1990 pop. 28,301), Burke and Catawba counties, W N.C., at the foot of the Blue Ridge Mts.; inc. 1870. It is a processing and trade center for an abundant agricultural region (grain, soybeans, poultry, hogs, Hollow hollow 1. a depression. 2. contains a cavity. hollow back backbone has a downward curvature in the center. hollow horn a mythical disease of cattle in primitive communities; treated by removal of the horns. - Nashville, TN July 1998 -- Lions Head Village - Nashville, TN July 1998 -- Meridian Mall There are several malls called Meridian Mall. These include:
The City Mall include:
CBL opened over 871,000 square feet of new developments during 1998, including Phase II expansions at Cortlandt Town Center in Cortlandt, New York Cortlandt Manor is a town in Westchester County, New York, United States. The population was 38,467 at the 2000 census. The Town of Cortlandt is in the northwest part of the county. The town includes the villages of Buchanan and Croton-on-Hudson. and Springhurst Towne Center in Louisville, Kentucky  “Louisville” redirects here. For other uses, see Louisville (disambiguation). . Phase II of Cortlandt Town Center totaled approximately 297,000 square feet and included the addition of Wal-Mart, United Artists Theater and PetsMart. Phase II of Springhurst Towne Center totaled approximately 303,000 square feet and included the addition of Meijer's and OfficeMax. In addition, the company opened Sterling Creek Commons in Portsmouth, Virginia Portsmouth is an independent city located in the U.S. Commonwealth of Virginia. As of the 2000 census, the city had a total population of 100,565, but a 2006 Census estimate showed the city's population had increased to 101,377. , a 65,000-square-foot community center anchored by Hannaford Bros BROS Brothers BROS Benefits and Retirement Operations Section (King County, Washington) BROS Barnes and Richmond Operatic Society (London, UK) . Phase I of Sand Lake Corners, a 165,000-square-foot Lowe's home improvement store, opened in Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. . Phase II of Sand Lake Corners is scheduled to open Spring 1999. CBL also added Goody's Family Clothing Goody's Family Clothing is a chain of clothing retailers based in Knoxville, Tennessee. It operates approximately 383 stores in the U.S South and Midwest, including Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Stores to Springdale Mall  should be added to this article, to conform with Wikipedia's Manual of Style.Please discuss this issue on the talk page. in Mobile, Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). and WestGate Crossing in Spartanburg, South Carolina Spartanburg is the largest city and the county seat of Spartanburg CountyGR6 in South Carolina, and is the second-largest city of the three primary cities in the Upstate region of South Carolina. . CBL currently has six new projects under construction totaling 2.0 million square feet: -- Fiddler's Run - Morganton, NC March 1999 -- Sand Lake Corners Phase II - Orlando, FL April 1999 -- Sears addition to Lakeshore Mall Lakeshore Mall is a regional mall located in Sebring, Florida, occupying a 100 acre (40 ha) parcel across US 27 from Lake Jackson. - Sebring, FL July 1999 -- The Landing at Arbor arbor Garden shelter providing privacy and partial protection from the weather, most commonly a lightweight, latticed framework (trellis) of wood or metal with interlaced branches of vines or climbing shrubs trained over it. Place - Atlanta, GA July 1999 -- Arbor Place - Atlanta (Douglasville), GA October 1999 -- Regal Cinemas - Jacksonville, FL October 1999 The Company has previously announced development plans for two new regional malls in Myrtle Beach, South Carolina Myrtle Beach is a city and in Horry County, South Carolina, United States. It is part of the Grand Strand, a stretch of beaches along the South Carolina coastline, and the combined Myrtle Beach-Conway-North Myrtle Beach MSA. and Huntsville, Alabama Huntsville is the county seat of Madison County, Alabama. Huntsville is the largest city in northern Alabama in a region of a half-million people, with the city proper having 168,132 residents (2006 estimate). and a power center in Richmond, Virginia Richmond IPA: [ɹɯʒmɐnɖ] is the capital of the Commonwealth of Virginia, in the United States. . -0-
OPERATIONAL HIGHLIGHTS December 31,
------------
1998 1997
----- -----
Total portfolio occupancy 94.8% 93.7%
Stabilized and acquired malls 93.6% 91.7%
New malls 93.6% 89.2%
Total malls 93.6% 91.1%
Associated centers 90.5% 83.3%
Community centers 97.0% 97.6%
Comparable mall shop sales increase 3.8% 4.7%
Average sales per square foot,
stabilized malls $273 $263
Average base rents per square foot at December 31, 1998 were $19.90 for stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. and acquired malls; $19.42 for new malls; $9.68 for associated centers; and $8.22 for community centers. As of December 31, 1998, the Company's total consolidated and unconsolidated debt was $1.2 billion, with a weighted average interest rate of 7.08% compared with 7.59% as of December 31, 1997, and the debt to total market capitalization Total Market Capitalization The total market value of all of a firm's outstanding securities. ratio was 54.7%. The EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become to interest coverage ratio for the fourth quarter of 1998 was 2.46 compared with 2.96 for the prior-year period and 2.43 for 1998 compared with 2.97 in 1997. Conventional fixed rate debt as of December 31, 1998 was $719.2 million, with a weighted average interest rate of 7.45%. Through the execution of swap agreements, the Company has fixed the interest rates on $314 million of variable rate debt on operating properties at a weighted average interest rate of 6.60%. Of the remaining variable rate debt of $166.8 million, which includes construction loans, the Company has eliminated any variable rate debt exposure on operating properties through the use of interest rate caps of $100 million and a conventional permanent loan commitment of $75 million. DIVIDENDS The Company also announced that it expects to increase the regular quarterly cash dividend for the Company's Common Stock to $0.4875 per share from $0.465 per share, effective for the first quarter of 1999. This 4.8% increase would raise the annual dividend to $1.95 per share from $1.86 per share and represents the fifth consecutive annual increase in the Company's dividend. In a previous announcement, CBL's board of directors declared a regular quarterly cash dividend of $0.465 per share for the Company's Common Stock and a quarterly cash dividend of $0.5625 per share for the Company's 9% Series A Cumulative Redeemable Redeemable Eligible for redemption under the terms of an indenture. Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. for the fourth quarter. The Common Stock dividend, which equates to an annual dividend of $1.86 per share, was payable on January 15, 1999, to shareholders of record on December 31, 1998. The Preferred Stock dividend, which equates to an annual dividend of $2.25 per share, was payable on December 30, 1998 to shareholders of record on December 15, 1998. EXECUTIVE PROMOTIONS The Company announced on February 1, 1999, that John N. Foy had been promoted to Vice Chairman of the Board and Treasurer and Stephen D. Lebovitz had been promoted to President. Mr. Foy was previously Executive Vice President-Finance. He will retain his position as Director and Chief Financial Officer and will continue to lead the Company's capital markets and investor relations Investor relations The process by which the corporation communicates with its investors. efforts. Mr. Lebovitz was previously Executive Vice President-Development and Acquisitions. He will continue to lead the Company's active development and acquisition programs and will retain his position as Director. Mr. Lebovitz will also play a significant role in the Company's investor relations and capital markets activities as well as assume a broader corporate role in the leasing and management areas of the company. CBL & Associates Properties, Inc. is a real estate investment trust which owns regional malls and community shopping centers, primarily in the Southeast and select markets in the Northeast and Midwest. The Company has a portfolio of 139 properties in 25 states totaling 33.3 million square feet, including 1.8 million square feet of non-owned shopping centers managed for third parties. Information included herein contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and the "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" incorporated by reference therein, for a discussion of such risks and uncertainties. -0-
CBL & ASSOCIATES PROPERTIES, INC.
(In thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Year Ended
December 31, December 31,
------------------ --------------
1998 1997 1998 1997
---- ---- ---- ----
Funds from operations -
operating partnership units
fully converted $ 26,504 $ 21,562 $ 93,614 $ 76,514
Funds from operations
applicable to REIT
shareholders $ 17,571 $ 15,468 $ 65,026 $ 54,833
Funds from operations per
share - diluted $ 0.72 $ 0.64 $ 2.68 $ 2.28
Dividend declared per share $ 0.465 $ 0.4425 $ 1.86 $ 1.77
Revenues:
Minimum rents $ 48,085 $ 32,374 $166,630 $115,639
Percentage rents 776 983 4,751 3,660
Other rents 2,725 1,334 4,007 1,949
Tenant reimbursements 21,596 14,680 73,837 51,302
Management, development and
leasing fees 653 613 2,711 2,378
Interest and other 637 677 2,704 2,676
-------- -------- -------- --------
Total revenues 74,472 50,661 254,640 177,604
-------- -------- ------- --------
Expenses:
Property operating 12,431 8,547 41,942 30,585
Depreciation and amortization 13,013 8,669 43,547 32,308
Real estate taxes 6,753 4,409 23,360 14,859
Maintenance and repairs 4,637 2,969 14,860 10,239
General and administrative 3,335 2,697 11,841 9,049
Interest 19,493 10,749 67,329 37,830
Other 0 285 122 330
-------- -------- -------- --------
Total expenses 59,662 38,325 203,001 135,200
-------- -------- -------- --------
Income from operations 14,810 12,336 51,639 42,404
Gain on sales of real estate
assets 1,273 1,884 4,183 6,040
Equity in earnings of
unconsolidated affiliates 690 402 2,379 1,916
Minority interest in earnings:
Operating partnership (4,982) (4,057) (16,258) (13,819)
Shopping center properties (236) (103) (645) (508)
------- -------- -------- --------
Income before extraordinary
item 11,555 10,462 41,298 36,033
Extraordinary loss on
extinguishment of debt (123) (164) (799) (1,092)
------- -------- -------- --------
Net income 11,432 10,298 40,499 34,941
Preferred dividend (1,617) 0 (3,234) 0
-------- -------- -------- --------
Net income available
to common shareholders $ 9,815 $ 10,298 $ 37,265 $ 34,941
======== ======== ======== ========
Basic per share data:
Income before
extraordinary item $ 0.41 $ 0.43 $ 1.58 $ 1.51
======== ======== ======== ========
Net income $ 0.41 $ 0.43 $ 1.55 $ 1.46
======== ======== ======== ========
Weighted average common
shares outstanding 24,153 24,054 24,079 23,895
Diluted per share data:
Income before
extraordinary item $ 0.41 $ 0.43 $ 1.56 $ 1.49
======== ======== ======== ========
Net income $ 0.40 $ 0.42 $ 1.53 $ 1.45
======== ======== ======== ========
Weighted average shares
and potential dilutive
common shares outstanding 24,456 24,291 24,340 24,151
CBL & ASSOCIATES PROPERTIES, INC.
(In thousands, except per share amounts)
SUMMARIZED BALANCE SHEET INFORMATION
(UNAUDITED) December 31, December 31,
1998 1997
------------ ------------
Cash, cash equivalents and cash in escrow $ 5,827 $ 69,232
Total assets 1,855,347 1,245,025
Mortgage and other notes payable 1,208,204 741,413
Minority interest 168,040 123,897
Shareholders' equity 415,782 330,853
FUNDS FROM OPERATIONS CALCULATION
Three Months Ended Year Ended
December 31, December 31,
------------------ --------------
1998 1997 1998 1997
---- ---- ---- ----
Income from operations $ 14,810 $ 12,336 $ 51,639 $ 42,404
Add: Depreciation and
amortization from
consolidated properties 13,013 8,669 43,547 32,308
Income from operations of
unconsolidated affiliates 690 402 2,379 1,916
Depreciation and amortization
from unconsolidated affiliates 370 341 1,427 1,334
Write-off of development costs
charged to net income 0 285 122 330
Less: Minority investors' share
of income from operations
in ten properties (236) (103) (645) (508)
Minority investors' share
of depreciation and
amortization in ten
properties (226) (252) (875) (834)
Depreciation and amortization
of non-real estate assets
and finance costs (300) (116) (746) (436)
Preferred dividend (1,617) 0 (3,234) 0
-------- -------- -------- --------
Total funds from operations $ 26,504 $ 21,562 $ 93,614 $ 76,514
======== ======== ======== ========
Basic per share data:
Funds from operations $ 0.73 $ 0.64 $ 2.70 $ 2.29
======== ======== ======== ========
Weighted average shares
with operating partnership
units fully converted 36,433 33,530 34,637 33,343
======== ======== ======== ========
Diluted per share data:
Funds from operations $ 0.72 $ 0.64 $ 2.68 $ 2.28
======== ======== ======== ========
Weighted average shares
and potential dilutive
common shares with
operating partnership
units fully converted 36,735 33,767 34,898 33,599
======== ======== ======== ========
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