CBL & Associates Properties Inc. (CBL, Financial) filed Quarterly Report for the period ended 2009-09-30.
CBL & ASSOCIATES PROPERTIES is a self-managed and self-administered REIT that engages in the ownership, operation, marketing, management, leasing, expansion, development, redevelopment, acquisition and financing of regional malls and community neighborhood centers. Cbl & Associates Properties Inc. has a market cap of $1.23 billion; its shares were traded at around $8.9 with a P/E ratio of 2.8 and P/S ratio of 1.1. The dividend yield of Cbl & Associates Properties Inc. stocks is 2.2%. Cbl & Associates Properties Inc. had an annual average earning growth of 15.1% over the past 10 years. GuruFocus rated Cbl & Associates Properties Inc. the business predictability rank of 3.5-star.
The $14.4 million decrease in rental revenues and tenant reimbursements was attributable to a decrease of $16.5 million from the Comparable Properties, partially offset by an increase of $2.1 million from the New Properties. The decrease in revenues of the Comparable Properties was driven by reductions of $8.3 million in base rents, $6.6 million in tenant reimbursements and $2.4 million in lease termination fees. Base rents declined due to decreased occupancy in the current quarter compared to the prior year period, as well as continued pressure on new and renewal leases. Tenant reimbursements decreased primarily due to lower occupancy levels. Lease termination fees have declined due to the decrease in store closure activity over the prior year quarter. Our cost recovery ratio improved to 99.0% for the quarter ended September 30, 2009 from 96.7% for the prior-year period as a result of lower property operating expenses, including lower bad debt expense.
Property operating expenses, including real estate taxes and maintenance and repairs, decreased $8.2 million due to a decrease of $9.5 million related to the Comparable Properties, partially offset by an increase of $1.3 million of expenses attributable to the New Properties. The decrease in property operating expenses of the Comparable Properties is primarily attributable to reductions of $2.8 million in payroll and related expenses, $1.8 million in promotion costs, $2.5 million in contracted maintenance services, $1.2 million in utilities expenses and $1.0 million of bad debt expense. Payroll expenses have declined due to our cost containment initiatives that were implemented during the latter half of the prior year which included staff reductions from the centralization of certain administrative and operating functions and eliminations of certain pay increases and reductions of bonuses. Bad debt expense decreased as a result of less store closure and bankruptcy activity compared to the prior year quarter.
The income tax benefit of $1.4 million for the three months ended September 30, 2009 relates to our taxable REIT subsidiary and consists of a current and deferred tax benefit of $0.3 and $1.1 million, respectively. During the three months ended September 30, 2008, we recorded an income tax provision of $8.6 million, consisting of a provision for current and deferred income taxes of $5.5 million and $3.1 million, respectively. The higher income tax provision for the third quarter of 2008 resulted from the recognition of the aforementioned $8.0 million fee income in addition to a significantly larger amount of gains in the prior year period related to sales of outparcels and from discontinued operations attributable to the taxable REIT subsidiary.
Property operating expenses, including real estate taxes and maintenance and repairs, decreased $20.2 million due to a decrease of $26.0 million related to the Comparable Properties, partially offset by an increase of $5.8 million of expenses attributable to the New Properties. The decrease in property operating expenses of the Comparable Properties is primarily attributable to reductions of $9.6 million in payroll and related expenses, $5.6 million in contracted maintenance services, $5.3 million in promotion costs, $1.3 million of bad debt expense, $0.8 million of utilities expense and $0.6 million in snow removal costs. Payroll expenses have declined due to our cost containment initiatives that were implemented during the latter half of the prior year which included staff reductions from centralization of certain administrative and operating functions and eliminations of certain pay increases and reductions of bonuses. Bad debt expense decreased as a result of less store closure and bankruptcy activity compared to the prior year period.
The income tax benefit of $0.6 million for the nine months ended September 30, 2009 relates to the results of our taxable REIT subsidiary and consists of a deferred tax benefit of $1.4 million, partially offset by a provision for current income taxes of $0.8 million. During the nine months ended September 30, 2008, we recorded an income tax provision of $12.8 million, consisting of a provision for current and deferred income taxes of $9.2 million and $3.6 million, respectively. The higher income tax provision for 2008 resulted from the recognition of the aforementioned $8.0 million fee income in addition to a significant amount of gains related to sales of outparcels and discontinued operations attributable to the taxable REIT subsidiary.
Read the The complete ReportCBL is in the portfolios of Chris Davis of Davis Selected Advisers, Ken Heebner of CAPITAL GROWTH MANAGEMENT LP.
CBL & ASSOCIATES PROPERTIES is a self-managed and self-administered REIT that engages in the ownership, operation, marketing, management, leasing, expansion, development, redevelopment, acquisition and financing of regional malls and community neighborhood centers. Cbl & Associates Properties Inc. has a market cap of $1.23 billion; its shares were traded at around $8.9 with a P/E ratio of 2.8 and P/S ratio of 1.1. The dividend yield of Cbl & Associates Properties Inc. stocks is 2.2%. Cbl & Associates Properties Inc. had an annual average earning growth of 15.1% over the past 10 years. GuruFocus rated Cbl & Associates Properties Inc. the business predictability rank of 3.5-star.
Highlight of Business Operations:
Given the challenging capital markets and economy in general over the past year, we have placed greater emphasis on the need to preserve liquidity and maintain our earnings. We have made significant progress in addressing our loan maturities for the remainder of 2009 and for 2010. In September 2009, we closed on the extension and modification of our largest secured line of credit, maintaining its full capacity of $525.0 million. In addition, subsequent to September 30, 2009, we closed on the extension and modification of our largest unsecured line of credit, also maintaining its full capacity of $560.0 million. As part of the modification of the unsecured line of credit, the facility will be converted over an 18-month period to a new secured facility (the “$560.0 million new secured facility”). During 2009, we also closed on two 10-year, non-recourse loans totaling $91.4 million. In June 2009, we completed an equity offering of 66,630,000 shares of our common stock at $6.00 per share. The net proceeds, after underwriting costs and related expenses, of approximately $381.6 million were used to repay outstanding borrowings under our credit facilities. Closing on the extension and modification of our two largest lines of credit and the two non-recourse property loans combined with the net proceeds from the equity offering will allow us to execute a plan that addresses the majority of our debt maturities through 2011. Please see Liquidity and Capital Resources on page 42 for further information related to our financing activity.The $14.4 million decrease in rental revenues and tenant reimbursements was attributable to a decrease of $16.5 million from the Comparable Properties, partially offset by an increase of $2.1 million from the New Properties. The decrease in revenues of the Comparable Properties was driven by reductions of $8.3 million in base rents, $6.6 million in tenant reimbursements and $2.4 million in lease termination fees. Base rents declined due to decreased occupancy in the current quarter compared to the prior year period, as well as continued pressure on new and renewal leases. Tenant reimbursements decreased primarily due to lower occupancy levels. Lease termination fees have declined due to the decrease in store closure activity over the prior year quarter. Our cost recovery ratio improved to 99.0% for the quarter ended September 30, 2009 from 96.7% for the prior-year period as a result of lower property operating expenses, including lower bad debt expense.
Property operating expenses, including real estate taxes and maintenance and repairs, decreased $8.2 million due to a decrease of $9.5 million related to the Comparable Properties, partially offset by an increase of $1.3 million of expenses attributable to the New Properties. The decrease in property operating expenses of the Comparable Properties is primarily attributable to reductions of $2.8 million in payroll and related expenses, $1.8 million in promotion costs, $2.5 million in contracted maintenance services, $1.2 million in utilities expenses and $1.0 million of bad debt expense. Payroll expenses have declined due to our cost containment initiatives that were implemented during the latter half of the prior year which included staff reductions from the centralization of certain administrative and operating functions and eliminations of certain pay increases and reductions of bonuses. Bad debt expense decreased as a result of less store closure and bankruptcy activity compared to the prior year quarter.
The income tax benefit of $1.4 million for the three months ended September 30, 2009 relates to our taxable REIT subsidiary and consists of a current and deferred tax benefit of $0.3 and $1.1 million, respectively. During the three months ended September 30, 2008, we recorded an income tax provision of $8.6 million, consisting of a provision for current and deferred income taxes of $5.5 million and $3.1 million, respectively. The higher income tax provision for the third quarter of 2008 resulted from the recognition of the aforementioned $8.0 million fee income in addition to a significantly larger amount of gains in the prior year period related to sales of outparcels and from discontinued operations attributable to the taxable REIT subsidiary.
Property operating expenses, including real estate taxes and maintenance and repairs, decreased $20.2 million due to a decrease of $26.0 million related to the Comparable Properties, partially offset by an increase of $5.8 million of expenses attributable to the New Properties. The decrease in property operating expenses of the Comparable Properties is primarily attributable to reductions of $9.6 million in payroll and related expenses, $5.6 million in contracted maintenance services, $5.3 million in promotion costs, $1.3 million of bad debt expense, $0.8 million of utilities expense and $0.6 million in snow removal costs. Payroll expenses have declined due to our cost containment initiatives that were implemented during the latter half of the prior year which included staff reductions from centralization of certain administrative and operating functions and eliminations of certain pay increases and reductions of bonuses. Bad debt expense decreased as a result of less store closure and bankruptcy activity compared to the prior year period.
The income tax benefit of $0.6 million for the nine months ended September 30, 2009 relates to the results of our taxable REIT subsidiary and consists of a deferred tax benefit of $1.4 million, partially offset by a provision for current income taxes of $0.8 million. During the nine months ended September 30, 2008, we recorded an income tax provision of $12.8 million, consisting of a provision for current and deferred income taxes of $9.2 million and $3.6 million, respectively. The higher income tax provision for 2008 resulted from the recognition of the aforementioned $8.0 million fee income in addition to a significant amount of gains related to sales of outparcels and discontinued operations attributable to the taxable REIT subsidiary.
Read the The complete ReportCBL is in the portfolios of Chris Davis of Davis Selected Advisers, Ken Heebner of CAPITAL GROWTH MANAGEMENT LP.
