CBL & Associates Properties(US:CBL)2025-11-07 20:07Financial Performance - Net income for the three months ended September 30, 2025, was $75.060 million, compared to $15.753 million for the same period in 2024, representing a significant increase [158]. - Net income attributable to common shareholders for the nine months ended September 30, 2025, was $85.631 million, up from $20.140 million in 2024, indicating strong growth [158]. - Total revenues for the three months ended September 30, 2025, were $139.280 million, an increase of $14.191 million compared to $125.089 million in 2024 [166]. - Total revenues for the nine months ended September 30, 2025, increased by $38.1 million to $421.9 million, driven by rental revenue growth from the consolidation of three malls and acquisition of four malls [174]. - A total gain of $74.1 million was recognized on sales of real estate assets during the nine months ended September 30, 2025, compared to a $16.5 million gain in the prior-year period [183]. Revenue and Rental Growth - Rental revenues increased by $14.8 million for the three months ended September 30, 2025, primarily due to the consolidation of three malls and the acquisition of four malls [166]. - Rental revenues increased by $68.0 million during the current-year period, offset by $25.5 million from properties sold since the prior-year period [174]. - Rental revenues for the three months ended September 30, 2025, were $0.3 million higher, primarily due to increased minimum rents and percentage rents [189]. - The majority of revenues for the nine months ended September 30, 2025, were derived from malls (71.4%), followed by open-air centers (10.5%) and lifestyle centers (7.8%) [193]. Operating Expenses - Total operating expenses increased by $16.188 million for the three months ended September 30, 2025, primarily due to the consolidation and acquisition of malls [167]. - Total operating expenses increased by $44.1 million for the nine months ended September 30, 2025, primarily due to the consolidation of three malls and acquisition of four malls [175]. - General and administrative expenses rose by $2.4 million primarily due to fees related to the modification of a non-recourse bank loan [169]. - Depreciation and amortization expense increased by $7.574 million for the three months ended September 30, 2025, due to the addition of tangible and intangible assets from recent acquisitions [168]. - Depreciation and amortization expense rose by $45.7 million, mainly due to the addition of tangible and intangible assets from the consolidation and acquisition of malls [176]. Impairment and Losses - The company reported a loss on impairment of $1.736 million related to a land parcel sold below its carrying value during the three months ended September 30, 2025 [169]. - A loss on impairment of $3.2 million was recorded related to the sales of 840 Greenbrier Circle and a land parcel, sold for less than their carrying values [178]. Debt and Financing - As of September 30, 2025, the total outstanding debt was $2,679.4 million, with $2,676.6 million classified as non-recourse debt obligations [212]. - The weighted-average interest rate for total fixed-rate and variable-rate debt was 5.99% [216]. - A 0.5% increase in interest rates on variable-rate debt would increase annual interest expense by approximately $3.8 million [245]. - A 0.5% increase in interest rates would decrease the fair value of total debt by approximately $22.9 million, while a 0.5% decrease would increase the fair value by approximately $23.8 million [246]. - The company modified loans secured by various properties, increasing the principal balance on the 2032 non-recourse bank loan by $110.0 million to fund acquisitions [205]. Cash Flow and Dividends - Cash provided by operating activities increased to $169.5 million for the nine months ended September 30, 2025, up from $156.0 million in the prior year [208]. - Cash used in investing activities was $(73.8) million for the nine months ended September 30, 2025, primarily due to the acquisition of four malls [210]. - The company paid common stock dividends of $0.40 per share in Q1 and Q2 2025, and $0.45 per share in Q3 2025, along with a special dividend of $0.80 per share in Q1 2025 [206]. Occupancy and Leasing Activity - Portfolio occupancy as of September 30, 2025, was 90.2%, up from 89.3% in 2024, with total malls occupancy increasing to 87.6% from 86.4% [195]. - New leases signed in the three months ended September 30, 2025, totaled 203,948 square feet, compared to 143,207 square feet in the same period in 2024 [196]. - Total new and renewal leasing activity for 2025/2026 amounted to 807 leases covering 2,543,377 square feet, with an average initial rent of $38.70 PSF [200]. - The average rent spread for new leases commencing in 2025 was 31.8%, while renewal leases experienced a decline of 3.5% [200]. Joint Ventures and Affiliates - The company may enter into joint ventures to capitalize on land and development opportunities, earning development fees and management fees [227]. - The company guarantees joint venture debt to secure lower funding costs, resulting in higher returns for both the joint venture and the company [228]. - The company has ownership interests in 24 unconsolidated affiliates as of September 30, 2025 [226]. Accounting and Estimates - FFO is defined as net income excluding gains or losses on sales of depreciable properties, plus depreciation and amortization, providing a clearer picture of operating performance [232]. - The company evaluates its accounting estimates and assumptions regularly, which may impact the carrying values of assets and liabilities [230]. - There have been no material changes to the company's critical accounting policies during the nine months ended September 30, 2025 [231].