CBL & Associates Properties(US:CBL)2019-11-01 18:52Financial Data and Key Metrics Changes - Adjusted FFO per share for the quarter was $0.34, a decline of $0.06 compared to $0.40 per share for Q3 2018 [36] - Portfolio same-center NOI decreased by 5.9% for the quarter and 5.5% for the year [13][36] - Sales for the third quarter increased by 3.2%, reaching $383 per square foot [14][25] - Portfolio occupancy increased by 30 basis points sequentially but declined by 150 basis points year-over-year to 90.5% [14][22] Business Line Data and Key Metrics Changes - The company successfully sourced replacements for 27 anchor spaces, with 74% of new mall leasing and 60% of total mall leasing being nonapparel [6][11] - New leasing spreads increased by 18%, while renewal leases were signed at an average of 11% lower than expiring rent [22] - Same-center mall occupancy declined by 200 basis points to 88.7% compared to the prior year [22] Market Data and Key Metrics Changes - Bankruptcy-related store closures reduced third-quarter mall occupancy by approximately 400 basis points or 720,000 square feet [23] - Categories performing well included fast casual dining, electronics, children's and family shoes, and sporting goods [25] Company Strategy and Development Direction - The primary strategic goals are transforming properties for long-term success and strengthening the balance sheet [6] - The company is focusing on joint ventures and third-party partnerships to further its redevelopment program [10] - The anchor replacement program has made significant progress, with 27 locations committed, including a dozen already open [25] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the progress of the redevelopment program despite challenges from retailer bankruptcies and store closings [13][40] - The company anticipates reaching the mid- to high end of its FFO guidance range for 2019, assuming no additional major bankruptcy activity [38] - Management emphasized the importance of preserving cash flow to invest in properties and reduce debt [21] Other Important Information - The company announced an agreement with Exeter Capital, with Michael Ashner joining the Board of Directors [16][17] - A new capital-allocation committee will be established, chaired by Michael Ashner, to review financial plans and strategies [19] Q&A Session Summary Question: Relevance of forming a capital-allocation committee - The capital-allocation committee is an advisory group to focus on financial strategies and will not have control over day-to-day decisions [42] Question: Dividend policy for 2020 - The company is still reviewing projections for taxable income and may pay the minimum required common dividend, if any [43][44] Question: Plans for upcoming loan maturities - Discussions with lenders are ongoing regarding the refinancing or restructuring of loans maturing in December [46][59] Question: Outlook for leasing and tenant watch list - The leasing environment is expected to be challenging, with ongoing monitoring of tenants and potential impacts from bankruptcies [47][49] Question: Impact of lease restructuring on renewal spreads - The negative renewal spread is largely due to lease modifications aimed at retaining tenants [51] Question: Changes in debt renegotiation strategy - While Michael Ashner's involvement may provide additional insights, the overall strategy for managing debt remains consistent [55] Question: Bankruptcy reserve for 2020 - The company is still assessing the reserve for the upcoming year, considering the impact of bankruptcies and restructuring [68][69]