CBL Properties Reports Results for Second Quarter 2021

CBL Properties (OTCMKTS: CBLAQ) announced results for the second quarter ended June 30, 2021. A description of each supplemental non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located at the end of this news release.

		Three Months Ended June 30,												Six Months Ended June 30,
		2021				2020				%				2021				2020				%
Net loss attributable to common shareholders per diluted share		$	(0.05	)		$	(0.42	)			88.1	%		$	(0.18	)		$	(1.16	)			84.5	%
Funds from Operations ("FFO") per diluted share		$	0.25			$	(0.03	)			933.3	%		$	0.70			$	0.23				204.3	%
FFO, as adjusted, per diluted share (1)		$	0.39			$	0.02				1,850.0	%		$	0.73			$	0.28				160.7	%

(1)	For a reconciliation of FFO to FFO, as adjusted, for the periods presented, please refer to the footnotes to the Company’s reconciliation of net loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 8 of this news release.

KEY TAKEAWAYS:

• FFO, as adjusted, per diluted share, was $0.39 for the second quarter 2021, compared with $0.02 per share for the second quarter 2020. The increase in FFO, as adjusted, per diluted share, as compared with the prior year period is principally a result of $0.15 per diluted share lower net interest expense and a $0.17 per diluted share positive variance in the estimate for uncollectable revenues, rent abatements and write-offs for past due rents. The decline in net interest expense was primarily due to the post-petition interest expense payments that are not required to be made on the senior unsecured notes and secured credit facility subsequent to the Company’s bankruptcy filing on November 1, 2020. The positive variance in the estimate for uncollectable revenues, abatements and write-offs for past due rents was primarily a result of the tenant accommodations that were made in the prior-year period due to the impact of the pandemic.
• Other major variances in the second quarter 2021 FFO, as adjusted, per diluted share, compared with the prior year period included $0.07 per diluted share of higher property NOI, including the estimate for uncollectable revenues, rent abatements and write-offs for past due rents. The second quarter 2021 also benefited from a $0.06 per diluted share positive variance from undeclared preferred dividends accrued in the prior year period. G&A expense during the second quarter 2021 was approximately $0.04 per diluted share lower, due to cost saving initiatives.
• Sales for the second quarter 2021 increased 22.3% as compared with the second quarter 2019. Sales for the six months ended June 30, 2021, increased 17.2% over the six months ended June 30, 2019.
• Total portfolio same-center NOI increased 18.5% for the three months ended June 30, 2021. Total portfolio same-center NOI for the six months ended June 30, 2021, declined 1.9%.
• Portfolio occupancy as of June 30, 2021, was 87.0%, representing a 160-basis point improvement from the sequential quarter and a 110-basis point decline compared with 88.1% as of June 30, 2020. Same-center mall occupancy was 85.2% as of June 30, 2021, representing a 200-basis point increase sequentially and a 160-basis point decline compared with 86.8% as of June 30, 2020. An estimated 379-basis points of the decline in total mall portfolio occupancy was due to store closures related to tenants in bankruptcy.

“Shopping at the mall is back! The combination of pent-up demand, stimulus checks, positive consumer sentiment and cabin fever led to a rebound in sales across our portfolio over the last few months,” said Stephen Lebovitz, Chief Executive Officer. “Sales at nearly all our malls are exceeding 2019 levels, with many categories showing double-digit increases. Traffic has picked up as well and is approaching pre-pandemic levels. This recovery benefited second quarter results, with percentage rents and short-term income trending above expectations. Preliminary reports on back-to-school are positive, which bodes well for the holiday sales season. Same-center NOI increased more than 18%, much of which was driven by the $33 million positive variance in the estimate for uncollectable revenues and abatements. Even with inflation pressures, we kept expenses, as well as capital expenditures, in check.

“We are maintaining the positive momentum of redevelopments across our portfolio and are strengthening our properties by converting vacant parcels and former anchor stores into more productive uses. In June, we opened the HCA office building at Pearland Town Center, which will generate steady traffic for our stores and restaurants. Just a few days ago, we celebrated the grand opening of Hollywood Casino at York Galleria in York, PA, marking the second casino in our portfolio. In July, we sold a former anchor location at Eastgate Mall in Cincinnati that will be developed into a national grocer and another former anchor location at Dakota Square in Minot, ND, was sold to Scheel’s sporting goods to bring their latest prototype to the property. We are under negotiation on several other locations across our portfolio to a wide range of tenants including grocery, value retail, entertainment and e-sports, hotel, multi-family and others that represent a diversity of uses as we reinvent our malls. We are also adding exciting, new local and regional specialty stores that are broadening our tenant mix and revenues.

“We are pleased with the overwhelming support received for our Chapter 11 Plan of Reorganization from all constituencies, with over 95% of votes cast voting in favor of the plan. Following the confirmation hearing on August 11^th, the court entered the confirmation order, providing a clear path to emergence. Between now and our planned emergence date of November 1, we will be working diligently to close and effect the approved restructuring plan. The entire CBL organization is excited about our future. The balance sheet and cash flow flexibility CBL will enjoy positions us to implement our redevelopment strategy, as well as pursue new growth opportunities. We are energized by these opportunities and CBL’s future prospects.”

FINANCIAL RESULTS

Net loss attributable to common shareholders for the three months ended June 30, 2021 was $8.9 million, or a loss of $0.05 per diluted share, compared with net loss of $81.5 million, or a loss of $0.42 per diluted share, for the three months ended June 30, 2020.

Net loss attributable to common shareholders for the six months ended June 30, 2021 was $35.6 million, or a loss of $0.18 per diluted share, compared with net loss of $215.3 million, or a loss of $1.16 per diluted share, for the six months ended June 30, 2020.

FFO, as adjusted, allocable to common shareholders, for the three months ended June 30, 2021 was $77.5 million, or $0.39 per diluted share, compared with $4.7 million, or $0.02 per diluted share, for the three months ended June 30, 2020. FFO, as adjusted, allocable to the Operating Partnership common unitholders, for the three months ended June 30, 2021 was $79.5 million compared with $4.9 million for the three months ended June 30, 2020.

FFO, as adjusted, allocable to common shareholders, for the six months ended June 30, 2021 was $144.4 million, or $0.73 per diluted share, compared with $52.0 million, or $0.28 per diluted share, for the six months ended June 30, 2020. FFO, as adjusted, allocable to the Operating Partnership common unitholders, for the six months ended June 30, 2021 was $148.2 million compared with $56.5 million for the six months ended June 30, 2020.

Percentage change in same-center Net Operating Income (“NOI”) ⁽¹⁾:

		Three Months Ended June 30,			Six Months Ended June 30,
		2021			2021
Portfolio same-center NOI		18.5%			(1.9)%
Mall same-center NOI		19.0%			(2.6)%

(1)	CBL’s definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items such as straight-line rents and reimbursements, write-offs of landlord inducements and net amortization of acquired above and below market leases.

Major variances impacting same-center NOI for the three months ended June 30, 2021, include:

• Same-center NOI increased $16.7 million, due to a $23.5 million increase in revenues partially offset by a $6.8 million increase in operating expenses.
• Rental revenues increased $22.9 million, including a $29.6 million increase in minimum and other rents and a $3.6 million increase in percentage rents. Rental revenues also include a $10.3 million decline in tenant reimbursements (net of any abatements). The increase in rental revenues for the quarter was primarily due to the $31.2 million positive variance from uncollectable revenues. The total estimate for uncollectable revenues and abatements for the second quarter 2021 was $8.6 million compared with a total of $39.9 million in the prior year period.
• Property operating expenses increased $5.0 million compared with the prior year, primarily due to the reopening of CBL’s portfolio. Maintenance and repair expenses increased $3.6 million. Real estate tax expenses declined by $1.5 million.

COVID-19 RENT COLLECTION UPDATE

The Company has collected approximately 90% of related gross rents for the period April 2020 through June 2021. As of July 2021, CBL had deferred approximately $40.5 million in rents. Of the approximately 73% of the deferred amounts billed to-date, CBL has collected approximately 93%.

LIQUIDITY

As of June 30, 2021, on a consolidated basis, the company had $329.5 million available in unrestricted cash and marketable securities.

PORTFOLIO OPERATIONAL RESULTS Occupancy(1):
		As of June 30,
		2021				2020
Total portfolio		87.0%				88.1%
Malls:
Total Mall portfolio		85.2%				86.6%
Same-center Malls		85.2%				86.8%
Stabilized Malls		85.2%				86.8%
Associated centers		91.3%				90.5%
Community centers		93.5%				95.2%

(1)	Occupancy for malls represents percentage of mall store gross leasable area under 20,000 square feet occupied. Occupancy for associated and community centers represents percentage of gross leasable area occupied.

New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:
% Change in Average Gross Rent Per Square Foot:
		Three Months Ended June 30,				Six Months Ended June 30,
		2021				2021
Stabilized Malls		(14.6)%				(19.1)%
New leases		(10.4)%				(17.1)%
Renewal leases		(15.3)%				(19.4)%

Same-Center Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:

Sales for the second quarter 2021 increased 22.3% as compared with the second quarter 2019, with 52 of CBL’s 56 reporting malls demonstrating an increase over the comparable period. For the six months ended June 30, 2021, sales increased 17.2% as compared with the six months ended June 30, 2019. Due to the temporary mall and store closures that occurred in 2020, the majority of CBL’s tenants did not report sales for the full reporting period. As a result, CBL is not able to provide a complete measure of sales for the trailing twelve-month period.

FINANCING ACTIVITY AND LENDER DISCUSSIONS

In July 2021, the Company reached a comprehensive settlement agreement with the existing lender to modify the loan secured by The Outlet Shoppes at Laredo, subject to court approval and documentation. The modified loan has a principal balance of $39.95 million, bears interest at LIBOR plus 3.25% and has a maturity date of July 2023, with a one-year extension option available at the Company’s election. As part of the settlement, the parties have agreed to a $5.0 million maximum unsecured deficiency claim, certain agreed-upon covenants and defaults, and mutual releases. The settlement is expected to be implemented through a stipulated dismissal of the Laredo Outlet Shoppes chapter 11 case.

In July 2021, the Company reached an agreement with the lender to amend the loan secured by Springs at Port Orange, which extends the term of the note to December 31, 2021 and increases the principal amount of the loan to $44.4 million ($19.3 million at CBL’s share). The interest rate was reduced from LIBOR plus 235 basis points to LIBOR plus 200 basis points.

In August 2021, CBL entered into a forbearance agreement with the lender for the $137.6 million non-recourse loan secured by Fayette Mall in Lexington, KY, that provides that, subject to certain conditions, the lender would forbear from exercising any rights with respect to the loan maturity default until December 1, 2021. CBL has reached an agreement, in principle, on the modification and extension of the loan secured by Fayette Mall in Lexington, KY. The agreement is subject to additional lender approvals and due diligence. The loan is expected to be extended for two years, with three additional one-year extension options, subject to certain requirements. The fixed interest rate was reduced from 5.42% to 4.25%.

CBL anticipates cooperating with conveyance or foreclosure proceedings for Park Plaza in Little Rock, AR ($76.8 million), EastGate Mall in Cincinnati, OH ($30.3 million) and Asheville Mall in Asheville, NC ($62.1 million). Park Plaza and Asheville Mall were deconsolidated during the first quarter 2021. CBL no longer controls either property following their transfer to receivership. EastGate Mall is expected to be transferred into receivership imminently.

The $71.3 million loan secured by Parkdale Mall and Crossing matured in March 2021 and is currently in default. The $8.0 million loan secured by Hamilton Crossing matured in April 2021 and is currently in default. Additionally, the $43.0 million loan secured by Alamance Crossing matured in July 2021 and is currently in default. CBL is in discussion with each respective existing lender regarding loan modifications and extensions.

Additionally, CBL is in the process of negotiating extensions and modifications of the remaining property level mortgage loans with maturities in 2021 and 2022.

RESTRUCTURING UPDATE

Following the confirmation hearing held on August 11, 2021, the United States Bankruptcy Court for the Southern District of Texas entered an order approving the Company’s Plan of Reorganization. The latest information on CBL’s restructuring, including news and frequently asked questions, can be found at cblproperties.com/restructuring or https://dm.epiq11.com/case/cblproperties/info.

DISPOSITIONS

In July 2021, CBL completed the sale of the former Sears location at Dakota Square Mall in Minot, ND to Scheel’s for $4.0 million. Scheel’s plans to expand the former Sears building to approximately 100,000-square-feet to accommodate their new prototype and relocate from their existing location to the new store. Additionally, in July, CBL sold a former department store in Cincinnati, Ohio for $5.2 million, for redevelopment into a future grocer.

In July 2021, CBL entered into a contract for the sale of 62 residential units at Pearland Town Center in Houston, TX, for $8.75 million. The disposition is subject to due diligence, customary closing conditions and approval by the Bankruptcy Court and is expected to close in late ’21.

Year-to-date, CBL has generated $15.7 million in gross proceeds from asset sales.

DEVELOPMENT AND LEASING PROGRESS

During the second quarter, CBL celebrated the opening of a new 135-key Aloft hotel at Hamilton Place in Chattanooga, TN, and the HCA medical office building at Pearland Town Center in Houston, TX.

On August 12^th, 2021, Hollywood Casino at York Galleria in York, PA held its grand opening. Hobby Lobby at West Towne Mall in Madison, WI, celebrated its grand opening recently and Rooms to Go at Cross Creek in Fayetteville, NC will open later this year.

During the second quarter, CBL commenced construction on the redevelopment of the former Herberger’s location at Kirkwood Mall in Bismarck, ND. Kirkwood Mall will welcome fast casual restaurant, Pancheros Mexican Grill, Thrifty White Pharmacy in addition to Chick-fil-A, Five Guys, and Blaze Pizza.

Additional offerings, including new restaurants, fitness, hotel and other uses are planned or under negotiation and will be announced as details are finalized.

Detailed project information is available in CBL’s Financial Supplement for Q2 2021, which can be found in the Invest – Financial Reports section of CBL’s website at cblproperties.com.

ABOUT CBL PROPERTIES

Headquartered in Chattanooga, TN, CBL Properties owns and manages a national portfolio of market-dominant properties located in dynamic and growing communities. CBL’s portfolio is comprised of 105 properties totaling 63.9 million square feet across 24 states, including 63 high-quality enclosed, outlet and open-air retail centers and six properties managed for third parties. CBL seeks to continuously strengthen its company and portfolio through active management, aggressive leasing and profitable reinvestment in its properties. For more information visit cblproperties.com.

NON-GAAP FINANCIAL MEASURES

Funds From Operations

FFO is a widely used non-GAAP measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO as defined above by NAREIT less dividends on preferred stock of the Company or distributions on preferred units of the Operating Partnership, as applicable. The Company’s method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors’ understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company’s properties and interest rates, but also by its capital structure.

The Company presents both FFO allocable to Operating Partnership common unitholders and FFO allocable to common shareholders, as it believes that both are useful performance measures. The Company believes FFO allocable to Operating Partnership common unitholders is a useful performance measure since it conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership. The Company believes FFO allocable to its common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income (loss) attributable to its common shareholders.

In the reconciliation of net income (loss) attributable to the Company’s common shareholders to FFO allocable to Operating Partnership common unitholders, located in this earnings release, the Company makes an adjustment to add back noncontrolling interest in income (loss) of its Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders. The Company then applies a percentage to FFO of the Operating Partnership common unitholders to arrive at FFO allocable to its common shareholders. The percentage is computed by taking the weighted-average number of common shares outstanding for the period and dividing it by the sum of the weighted-average number of common shares and the weighted-average number of Operating Partnership units held by noncontrolling interests during the period.

FFO does not represent cash flows from operations as defined by GAAP, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company’s operating performance or to cash flow as a measure of liquidity.

The Company believes that it is important to identify the impact of certain significant items on its FFO measures for a reader to have a complete understanding of the Company’s results of operations. Therefore, the Company has also presented adjusted FFO measures excluding these items from the applicable periods. Please refer to the reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 8 of this news release for a description of these adjustments.

Same-center Net Operating Income

NOI is a supplemental non-GAAP measure of the operating performance of the Company’s shopping centers and other properties. The Company defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).

The Company computes NOI based on the Operating Partnership’s pro rata share of both consolidated and unconsolidated properties. The Company believes that presenting NOI and same-center NOI (described below) based on its Operating Partnership’s pro rata share of both consolidated and unconsolidated properties is useful since the Company conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company’s common shareholders and the noncontrolling interest in the Operating Partnership. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's calculation of NOI may not be comparable to that of other companies.

Since NOI includes only those revenues and expenses related to the operations of the Company’s shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at the malls and operating costs and the impact of those trends on the Company’s results of operations. The Company’s calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-off of landlord inducement assets in order to enhance the comparability of results from one period to another. A reconciliation of same-center NOI to net income is located at the end of this earnings release.

Pro Rata Share of Debt

The Company presents debt based on its pro rata ownership share (including the Company’s pro rata share of unconsolidated affiliates and excluding noncontrolling interests’ share of consolidated properties) because it believes this provides investors a clearer understanding of the Company’s total debt obligations which affect the Company’s liquidity. A reconciliation of the Company’s pro rata share of debt to the amount of debt on the Company’s condensed consolidated balance sheet is located at the end of this earnings release.

Information included herein contains “forward-looking statements” 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, and the “Management's Discussion and Analysis of Financial Condition and Results of Operations” included therein, for a discussion of such risks and uncertainties.

CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three and Six Months Ended June 30, 2021 and 2020   Consolidated Statements of Operations (Unaudited; in thousands, except per share amounts)
		Three Months Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020
REVENUES:
Rental revenues		$	131,316			$	120,222			$	259,491			$	281,395
Management, development and leasing fees			1,449				1,055				3,108				3,147
Other			3,796				2,934				7,146				7,243
Total revenues			136,561				124,211				269,745				291,785
EXPENSES:
Property operating			(19,623	)			(16,906	)			(41,425	)			(42,615	)
Depreciation and amortization			(47,499	)			(52,663	)			(95,611	)			(108,565	)
Real estate taxes			(15,110	)			(17,837	)			(31,661	)			(36,285	)
Maintenance and repairs			(8,784	)			(6,042	)			(19,565	)			(17,250	)
General and administrative			(11,269	)			(18,727	)			(23,881	)			(36,563	)
Loss on impairment			—				(13,274	)			(57,182	)			(146,918	)
Litigation settlement			(57	)			—				801				—
Other			(287	)			(242	)			(287	)			(400	)
Total expenses			(102,629	)			(125,691	)			(268,811	)			(388,596	)
OTHER INCOME (EXPENSES):
Interest and other income			752				891				1,528				3,288
Interest expense (unrecognized contractual interest expense was $45,279 and $90,043 for the three and six months ended June 30, 2021, respectively)			(22,299	)			(52,631	)			(46,429	)			(99,623	)
Gain on deconsolidation			—				—				55,131				—
Gain (loss) on sales of real estate assets			107				2,623				(192	)			2,763
Reorganization items			(17,073	)			—				(40,006	)			—
Income tax provision			(705	)			(16,117	)			(1,456	)			(16,643	)
Equity in losses of unconsolidated affiliates			(4,275	)			(6,079	)			(7,351	)			(5,061	)
Total other expenses			(43,493	)			(71,313	)			(38,775	)			(115,276	)
Net loss			(9,561	)			(72,793	)			(37,841	)			(212,087	)
Net loss attributable to noncontrolling interests in:
Operating Partnership			230				2,077				928				18,491
Other consolidated subsidiaries			449				487				1,268				694
Net loss attributable to the Company			(8,882	)			(70,229	)			(35,645	)			(192,902	)
Preferred dividends undeclared			—				(11,223	)			—				(22,446	)
Net loss attributable to common shareholders		$	(8,882	)		$	(81,452	)		$	(35,645	)		$	(215,348	)
Basic and diluted per share data attributable to common shareholders:
Net loss attributable to common shareholders		$	(0.05	)		$	(0.42	)		$	(0.18	)		$	(1.16	)
Weighted-average common and potential dilutive common shares outstanding			196,458				191,962				196,484				185,547

CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three and Six Months Ended June 30, 2021 and 2020   The Company's reconciliation of net loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows: (in thousands, except per share data)
		Three Months Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020
Net loss attributable to common shareholders		$	(8,882	)		$	(81,452	)		$	(35,645	)		$	(215,348	)
Noncontrolling interest in loss of Operating Partnership			(230	)			(2,077	)			(928	)			(18,491	)
Depreciation and amortization expense of:
Consolidated properties			47,499				52,663				95,611				108,565
Unconsolidated affiliates			13,456				14,020				26,986				27,530
Non-real estate assets			(492	)			(812	)			(1,032	)			(1,729	)
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries			(558	)			(788	)			(1,139	)			(1,711	)
Loss on impairment			—				13,274				57,182				146,918
Loss on depreciable property			—				—				—				25
FFO allocable to Operating Partnership common unitholders			50,793				(5,172	)			141,035				45,759
Litigation settlement (1)			57				—				(801	)			—
Non-cash default interest expense (2)			11,576				2,203				23,046				2,893
Gain on deconsolidation (3)			—				—				(55,131	)			—
Reorganization items (4)			17,073				7,857				40,006				7,857
FFO allocable to Operating Partnership common unitholders, as adjusted		$	79,499			$	4,888			$	148,155			$	56,509
FFO per diluted share		$	0.25			$	(0.03	)		$	0.70			$	0.23
FFO, as adjusted, per diluted share		$	0.39			$	0.02			$	0.73			$	0.28
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted			201,576				201,702				201,601				201,480

(1)	For the three and six months ended June 30, 2021, represents the accrued expense related to the settlement of a class action lawsuit. Also, for the six months ended June 30, 2021, represents a credit to litigation settlement expense related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit.
(2)	The three and six months ended June 30, 2021 includes default interest expense related to loans secured by properties that were in default prior to the Company filing voluntary petitions under Chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Texas, as well as loans secured by properties that are in default due to the Company filing voluntary petitions under Chapter 11 of title 11 of the United States Code. The six months ended June 30, 2020 includes default interest expense related to Greenbrier Mall, Hickory Point Mall, Eastgate Mall, Asheville Mall, Burnsville Center and Park Plaza Mall.
(3)	During the six months ended June 30, 2021, the Company deconsolidated Asheville Mall and Park Plaza due to a loss of control when the properties were placed into receivership in connection with the foreclosure process.
(4)	Represents costs incurred subsequent to the Company filing voluntary petitions under Chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Texas associated with the Company’s reorganization efforts, which consists of professional fees, legal fees, retention bonuses and U.S. Trustee fees.

CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three and Six Months Ended June 30, 2021 and 2020   The reconciliation of diluted EPS to FFO per diluted share is as follows:
		Three Months Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020
Diluted EPS attributable to common shareholders		$	(0.05	)		$	(0.42	)		$	(0.18	)		$	(1.16	)
Eliminate amounts per share excluded from FFO:
Depreciation and amortization expense, including amounts from consolidated properties, unconsolidated affiliates, non-real estate assets and excluding amounts allocated to noncontrolling interests			0.30				0.32				0.59				0.66
Loss on impairment			—				0.07				0.29				0.73
FFO per diluted share		$	0.25			$	(0.03	)		$	0.70			$	0.23

The reconciliations of FFO allocable to Operating Partnership common unitholders to FFO allocable to common shareholders, including and excluding the adjustments noted above, are as follows:
		Three Months Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020
FFO allocable to Operating Partnership common unitholders		$	50,793			$	(5,172	)		$	141,035			$	45,759
Percentage allocable to common shareholders (1)			97.46	%			95.17	%			97.46	%			92.09	%
FFO allocable to common shareholders		$	49,503			$	(4,922	)		$	137,453			$	42,139
FFO allocable to Operating Partnership common unitholders, as adjusted		$	79,499			$	4,888			$	148,155			$	56,509
Percentage allocable to common shareholders (1)			97.46	%			95.17	%			97.46	%			92.09	%
FFO allocable to common shareholders, as adjusted		$	77,480			$	4,652			$	144,392			$	52,039

(1)

Represents the weighted-average number of common shares outstanding for the period divided by the sum of the weighted-average number of common shares and the weighted-average number of Operating Partnership units outstanding during the period. See the reconciliation of shares and Operating Partnership units outstanding on page 14.

CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three and Six Months Ended June 30, 2021 and 2020
		Three Months Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees		$	167			$	1,433			$	1,278			$	1,653
Per share		$	—			$	0.01			$	0.01			$	0.01
Straight-line rental income adjustment		$	(2,549	)		$	27			$	(5,445	)		$	919
Per share		$	(0.01	)		$	—			$	(0.03	)		$	—
Gain (loss) on outparcel sales, net of taxes		$	90			$	2,623			$	(209	)		$	2,788
Per share		$	—			$	0.01			$	—			$	0.01
Net amortization of acquired above- and below-market leases		$	73			$	209			$	125			$	1,112
Per share		$	—			$	—			$	—			$	0.01
Net amortization of debt premiums and discounts		$	—			$	344			$	—			$	687
Per share		$	—			$	—			$	—			$	—
Income tax provision		$	(705	)		$	(16,117	)		$	(1,456	)		$	(16,643	)
Per share		$	—			$	(0.08	)		$	(0.01	)		$	(0.08	)
Non-cash default interest expense (property-level loans)		$	(11,576	)		$	(2,203	)		$	(23,046	)		$	(2,893	)
Per share		$	(0.06	)		$	(0.01	)		$	(0.11	)		$	(0.01	)
Abandoned projects expense		$	(287	)		$	(242	)		$	(287	)		$	(400	)
Per share		$	—			$	—			$	—			$	—
Interest capitalized		$	13			$	366			$	32			$	1,092
Per share		$	—			$	—			$	—			$	0.01
Litigation settlement		$	(57	)		$	—			$	801			$	—
Per share		$	—			$	—			$	—			$	—
Estimate of uncollectable revenues		$	(7,253	)		$	(41,484	)		$	(16,370	)		$	(44,623	)
Per share		$	(0.04	)		$	(0.21	)		$	(0.08	)		$	(0.22	)
										As of June 30,
										2021				2020
Straight-line rent receivable										$	48,341			$	55,930

CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three and Six Months Ended June 30, 2021 and 2020   Same-center Net Operating Income (Dollars in thousands)
		Three Months Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020
Net loss		$	(9,561	)		$	(72,793	)		$	(37,841	)		$	(212,087	)
Adjustments:
Depreciation and amortization			47,499				52,663				95,611				108,565
Depreciation and amortization from unconsolidated affiliates			13,456				14,020				26,986				27,530
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries			(558	)			(788	)			(1,139	)			(1,711	)
Interest expense			22,299				52,631				46,429				99,623
Interest expense from unconsolidated affiliates			10,512				7,679				20,361				15,355
Noncontrolling interests' share of interest expense in other consolidated subsidiaries			(878	)			(574	)			(1,845	)			(1,156	)
Abandoned projects expense			287				242				287				400
(Gain) loss on sales of real estate assets			(107	)			(2,623	)			192				(2,763	)
Gain on deconsolidation			—				—				(55,131	)			—
Loss on impairment			—				13,274				57,182				146,918
Litigation settlement			57				—				(801	)			—
Reorganization items			17,073				—				40,006				—
Income tax provision			705				16,117				1,456				16,643
Lease termination fees			(167	)			(1,433	)			(1,278	)			(1,653	)
Straight-line rent and above- and below-market lease amortization			2,476				(236	)			5,320				(2,031	)
Net loss attributable to noncontrolling interests in other consolidated subsidiaries			449				487				1,268				694
General and administrative expenses			11,269				18,727				23,881				36,563
Management fees and non-property level revenues			(5,166	)			(1,142	)			(7,379	)			(5,320	)
Operating Partnership's share of property NOI			109,645				96,251				213,565				225,570
Non-comparable NOI			(2,779	)			(6,071	)			(6,674	)			(14,612	)
Total same-center NOI (1)		$	106,866			$	90,180			$	206,891			$	210,958
Total same-center NOI percentage change			18.5	%							(1.9	)%

CBL & Associates Properties, Inc. Supplemental Financial and Operating Information For the Three and Six Months Ended June 30, 2021 and 2020   Same-center Net Operating Income (Continued)
		Three Months Ended June 30,								Six Months Ended June 30,
		2021				2020				2021				2020
Malls		$	92,986			$	78,171			$	180,025			$	184,771
Associated centers			7,449				6,316				13,972				13,776
Community centers			5,167				4,508				10,479				10,104
Offices and other			1,264				1,185				2,415				2,307
Total same-center NOI (1)		$	106,866			$	90,180			$	206,891			$	210,958
Percentage Change:
Malls			19.0	%							(2.6	)%
Associated centers			17.9	%							1.4	%
Community centers			14.6	%							3.7	%
Offices and other			6.7	%							4.7	%
Total same-center NOI (1)			18.5	%							(1.9	)%

(1)

CBL defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). Same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of June 30, 2021, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ending June 30, 2021. New properties are excluded from same-center NOI, until they meet these criteria. Properties excluded from the same-center pool that would otherwise meet these criteria are properties which are under major redevelopment or being considered for repositioning, where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender.

CBL & Associates Properties, Inc. Supplemental Financial and Operating Information As of June 30, 2021 and 2020   Company's Share of Consolidated and Unconsolidated Debt (Dollars in thousands)
		As of June 30, 2021
		Fixed Rate				Variable Rate				Total per Debt Schedule				Unamortized Deferred Financing Costs (1)				Total
Consolidated debt (2)		$	2,338,118			$	1,181,599			$	3,519,717			$	(2,987	)		$	3,516,730
Noncontrolling interests' share of consolidated debt			(29,744	)			—				(29,744	)			238				(29,506	)
Company's share of unconsolidated affiliates' debt			618,092				124,141				742,233				(2,648	)			739,585
Other debt (3)			138,926				—				138,926				—				138,926
Company's share of consolidated, unconsolidated and other debt		$	3,065,392			$	1,305,740			$	4,371,132			$	(5,397	)		$	4,365,735
Weighted-average interest rate			5.04	%			8.62	%	(4)		6.11	%
		As of June 30, 2020
		Fixed Rate				Variable Rate				Total per Debt Schedule				Unamortized Deferred Financing Costs				Total
Consolidated debt		$	2,596,241			$	1,192,140			$	3,788,381			$	(14,347	)		$	3,774,034
Noncontrolling interests' share of consolidated debt			(30,377	)			—				(30,377	)			291				(30,086	)
Company's share of unconsolidated affiliates' debt			628,262				117,715				745,977				(2,769	)			743,208
Company's share of consolidated and unconsolidated debt		$	3,194,126			$	1,309,855			$	4,503,981			$	(16,825	)		$	4,487,156
Weighted-average interest rate			5.07	%			2.49	%			4.32	%

(1)	Unamortized deferred financing costs of $2,624 and $1,879 for certain consolidated and the Company’s share of unconsolidated property-level, non-recourse mortgage loans, respectively, may be required to be written off in the event that a waiver or restructuring of terms cannot be negotiated and the debt is either redeemed or otherwise extinguished.
(2)	Includes $2,529,138 included in liabilities subject to compromise in the accompanying consolidated balance sheets as of June 30, 2021.
(3)	During the six months ended June 30, 2021, the Company deconsolidated Asheville Mall and Park Plaza due to a loss of control when the properties were placed into receivership in connection with the foreclosure process.
(4)	The administrative agent informed the Company that interest will accrue on all outstanding obligations at the post-default rate, which is equal to the rate that otherwise would be in effect plus 5.0%. The post-default interest rate at June 30, 2021 was 9.50%. In accordance with ASC 852, Reorganizations, which limits the recognition of interest expense during a bankruptcy proceeding to only amounts that will be paid during the bankruptcy proceeding or that are probable of becoming allowed claims, interest has not been accrued on the secured credit facility subsequent to the filing of voluntary petitions under Chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Texas beginning on November 1, 2020.

CBL & Associates Properties, Inc. Supplemental Financial and Operating Information As of June 30, 2021 and 2020   Total Market Capitalization as of June 30, 2021 (In thousands, except stock price)
		Shares Outstanding				Stock Price (1)
Common stock and operating partnership units			201,562			$	0.12
7.375% Series D Cumulative Redeemable Preferred Stock			1,815				250.00
6.625% Series E Cumulative Redeemable Preferred Stock			690				250.00

(1)	Stock price for common stock and Operating Partnership units equals the closing price of the common stock on June 30, 2021. The stock prices for the preferred stocks represent the liquidation preference of each respective series.

Reconciliation of Shares and Operating Partnership Units Outstanding (In thousands)
		Three Months Ended June 30,								Six Months Ended June 30,
		Basic				Diluted				Basic				Diluted
2021:
Weighted-average shares - EPS			196,458				196,458				196,484				196,484
Weighted-average Operating Partnership units			5,118				5,118				5,117				5,117
Weighted-average shares - FFO			201,576				201,576				201,601				201,601
2020:
Weighted-average shares - EPS			191,962				191,962				185,547				185,547
Weighted-average Operating Partnership units			9,740				9,740				15,933				15,933
Weighted-average shares - FFO			201,702				201,702				201,480				201,480

CBL & Associates Properties, Inc. Supplemental Financial and Operating Information As of June 30, 2021 and December 31, 2020   Consolidated Balance Sheets (Unaudited; in thousands, except share data)
		As of
		June 30, 2021				December 31, 2020
ASSETS
Real estate assets:
Land		$	662,045			$	695,711
Buildings and improvements			4,978,546				5,135,074
			5,640,591				5,830,785
Accumulated depreciation			(2,270,736	)			(2,241,421	)
			3,369,855				3,589,364
Developments in progress			15,150				28,327
Net investment in real estate assets			3,385,005				3,617,691
Cash and cash equivalents			143,874				61,781
Available-for-sale securities - at fair value (amortized cost of $183,496 and $233,053 as of June 30, 2021 and December 31, 2020, respectively)			183,490				233,071
Receivables:
Tenant			68,514				103,655
Other			2,727				5,958
Mortgage and other notes receivable			1,912				2,337
Investments in unconsolidated affiliates			261,082				279,355
Intangible lease assets and other assets			217,603				139,892
		$	4,264,207			$	4,443,740
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness, net		$	987,592			$	1,184,831
Accounts payable and accrued liabilities			188,368				173,387
Total liabilities not subject to compromise			1,175,960				1,358,218
Liabilities subject to compromise			2,591,706				2,551,490
Commitments and contingencies
Redeemable noncontrolling interests			(543	)			(265	)
Shareholders' equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized:
7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000 shares outstanding			18				18
6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding			7				7
Common stock, $.01 par value, 350,000,000 shares authorized, 196,444,452 and 196,569,917 issued and outstanding in 2021 and 2020, respectively			1,964				1,966
Additional paid-in capital			1,986,982				1,986,269
Accumulated other comprehensive income (loss)			(6	)			18
Dividends in excess of cumulative earnings			(1,492,080	)			(1,456,435	)
Total shareholders' equity			496,885				531,843
Noncontrolling interests			199				2,454
Total equity			497,084				534,297
		$	4,264,207			$	4,443,740

 

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