CBL Properties Reports Results for Fourth Quarter and Full-Year 2023

February 12, 2024 at 08:00 AM EST

CBL Properties (NYSE: CBL) announced results for the fourth quarter and year ended December 31, 2023. Results of operations as reported in the consolidated financial statements for these periods are prepared in accordance with GAAP. 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 December 31,				Year Ended December 31,
	2023		2022		2023		2022
Net income (loss) attributable to common shareholders	$	0.37	$	0.03	$	0.17	$	(3.20	)
Funds from Operations ("FFO")	$	1.80	$	1.99	$	6.59	$	5.78
FFO, as adjusted ⁽¹⁾	$	1.94	$	2.11	$	6.66	$	7.88

⁽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 income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 8 of this news release.

KEY TAKEAWAYS:

CBL initiates 2024 FFO, as adjusted, per share guidance in the range of $6.19 - $6.63 and 2024 same-center NOI guidance in the range of $428 million - $442 million.
Same-center NOI declined 1.2% during the fourth quarter 2023 as compared with the prior-year quarter and declined 1.5% in 2023 as compared with the prior year, near the high-end of the previously issued guidance range.
FFO, as adjusted, per share was $1.94 for the fourth quarter 2023, and $6.66 for the year ended December 31, 2023. FFO, as adjusted, per share was $2.11 for fourth quarter 2022, and $7.88 for the year ended December 31, 2022.
Portfolio occupancy was 90.9% as of December 31, 2023, approximately flat compared with portfolio occupancy as of December 31, 2022. Same-center occupancy for malls, lifestyle centers and outlet centers was 89.8% as of December 31, 2023, a 20-basis-point increase from 89.6% as of December 31, 2022.
Nearly 4.4 million square feet of leases were executed in 2023, including approximately 1.3 million square feet in the fourth quarter. 2023 leasing results included comparable leases of approximately 2.7 million square feet signed at flat average rents versus the prior leases.
As anticipated, same-center tenant sales per square foot for the fourth quarter 2023 declined 2.6%. Same-center tenant sales per square foot for the 12-months ended December 31, 2023, declined 4.4% to $416, compared with $435 for the prior period.
As of December 31, 2023, the Company had $296 million of unrestricted cash and marketable securities.
CBL's Board of Directors declared a cash dividend of $0.40 per common share for the quarter ending March 31, 2024, a 6.7% increase from the previous quarterly dividend rate of $0.375 per share. The dividend equates to an annual dividend payment of $1.60 per common share.

“2023 was an excellent year for CBL," said CBL's chief executive officer, Stephen D. Lebovitz. "Same-center NOI and FFO, as adjusted, were at the high end of our guidance ranges. This strong performance was driven by a record level of leasing production, which drove occupancy improvements throughout the year. Comparable leasing was stable with flat blended lease spreads. The favorable retail environment produced strong demand for new store openings and limited closings. Although portfolio sales were down for the year, results improved in the fourth quarter with a strong close to the holiday season. NOI was also helped by our ability to limit increases in same-center operating expenses despite inflationary pressures.

"While rising interest rates contributed to a challenging financing environment, we successfully addressed all of our 2023 maturities. The refinancing of the Outlet Shops at Atlanta, closed in October, extended our maturity schedule, locked in a favorable, long-term rate and generated new proceeds. The elimination of the corporate guarantee on our term loan on November 2nd removed nearly all of our corporate recourse obligations. Additionally, we demonstrated our commitment to return capital to shareholders, implementing a stock repurchase program and most recently announcing another increase in the dividend. This commitment will continue to be a priority as we work to maximize shareholder returns in the future.

"Our 2024 guidance reflects the impact of operating momentum carried over from 2023, offset by certain anticipated headwinds this year. Our forecast assumes ongoing healthy tenant demand, improving specialty leasing income and the benefit of successful real estate tax appeals. Contributions from new large space openings, such as Thrill Factory at East Towne Mall and replacements for several Bed, Bath & Beyond spaces, such as Crunch Fitness at Coastal Grand and Schuler's Books at Meridian Mall will also positively impact revenues. Alternatively, the sales declines in 2023 will put pressure on near-term percentage rent and renewal lease spreads. Rising insurance costs will increase operating expenses and overall higher interest rates will continue to impact FFO. As we move forward in 2024, our team is working to offset these challenges and generate positive NOI growth. Our balance sheet is well-positioned with our strong cash balance and limited upcoming loan maturities. We are focused on sustaining strong leasing and operating momentum and generating further growth in free cash flow and shareholder value."

Same-center Net Operating Income (“NOI”) ⁽¹⁾:

	Three Months Ended December 31,
	2023			2022
Total Revenues	$	173,155		$	176,947
Total Expenses	$	(53,689	)	$	(56,046	)
Total portfolio same-center NOI	$	119,466		$	120,901
Total same-center NOI percentage change		(1.2	)%

Estimate for uncollectable revenues (recovery)	$	(219	)	$	(410	)

⁽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 above and below market leases.

Same-center NOI for the fourth quarter 2023 declined $1.4 million. Major variances impacting the quarter included a $4.0 million decline in percentage rents. Expenses declined $2.4 million including a $2.1 million decline in real estate taxes.

	Year Ended December 31,
	2023			2022
Total Revenues	$	654,525		$	664,422
Total Expenses	$	(216,013	)	$	(219,047	)
Total portfolio same-center NOI	$	438,512		$	445,376
Total same-center NOI percentage change		(1.5	)%

Estimate for uncollectable revenues (recovery)	$	1,308		$	(4,334	)

Same-center NOI for the year ended December 31, 2023, declined by $6.9 million or 1.5% from the prior-year period. The decline was driven by a $5.6 million unfavorable variance in the estimate for uncollectable revenues and a $7.0 million decline in percentage rents. Total expenses declined $3.0 million including a $2.5 million decline in real estate taxes.

PORTFOLIO OPERATIONAL RESULTS

Occupancy⁽¹⁾:

	As of December 31,
	2023	2022
Total portfolio	90.9%	91.0%
Malls, Lifestyle Centers and Outlet Centers:
Total malls	89.3%	89.1%
Total lifestyle centers	91.5%	92.7%
Total outlet centers	91.9%	90.8%
Total same-center malls, lifestyle centers and outlet centers	89.8%	89.6%
All Other:
Total open-air centers	95.6%	95.3%
Total other	78.2%	93.0%

⁽¹⁾

Occupancy for malls, lifestyle centers and outlet centers represent percentage of in-line gross leasable area under 20,000 square feet occupied. Occupancy for open-air 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 December 31,	Year Ended December 31,
	2023	2023
All Property Types	(2.6)%	0.0%
Stabilized Malls, Lifestyle Centers and Outlet Centers	(3.4)%	(1.0)%
New leases	30.0%	26.2%
Renewal leases	(4.2)%	(2.6)%

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

	Sales Per Square Foot for the Trailing Twelve Months Ended December 31,
	2023		2022		% Change
Mall, Lifestyle Center and Outlet Center same-center sales per square foot	$	416	$	435	(4.4)%

DIVIDEND

On February 8, 2024, CBL’s Board of Directors approved a 6.7% increase in CBL's regular quarterly cash dividend for the three months ended March 31, 2024, to $0.40 per share. The dividend, which equates to an annual dividend payment of $1.60 per share, is payable on March 29, 2024, to shareholders of record as of March 15, 2024.

FINANCING ACTIVITY

In 2023, CBL completed more than $575.0 million in financing activity, successfully addressing all 2023 final loan maturities.

In October, CBL, along with its 50% joint venture partner, Horizon Group Properties, closed a new $79.3 million loan ($39.7 million at CBL’s 50% share) secured by The Outlet Shoppes of Atlanta, the premier outlet shopping destination located in Woodstock, GA. The new non-recourse ten-year loan bears a fixed interest-only rate of 7.85% and replaces two loans with an aggregate balance of $69.5 million (at 100%) that were set to mature in November 2023.

In October, CBL and its 35% joint venture partner closed on the extension and modification of the loan secured by The Outlet Shoppes at Laredo in Laredo, TX. The loan was modified to reduce the principal balance to $33.98 million and extend the loan through June 2025. The interest rate of SOFR plus 325 basis points remained the same.

In October, CBL exercised its option to extend the $17.6 million recourse loan secured by the Brookfield Square Anchor Redevelopment to December 2024. In connection with the extension, CBL made the optional election to reduce the outstanding principal balance by $2.0 million.

In November, CBL and the lender of the loan secured by Volusia Mall in Daytona Beach, FL, closed on the modification and extension of the loan. The loan was modified to apply escrow balances to reduce the principal balance by $1.7 million to $36.7 million and extend the maturity date two years to May 2026.

CBL is cooperating with the foreclosure or conveyance of WestGate Mall in Spartanburg, SC, ($28.7 million) and Alamance Crossing East in Burlington, NC, ($41.1 million).

In February 2024, CBL retired the $15.3 million recourse loan secured by Brookfield Square Anchor Redevelopment in Brookfield, WI.

STOCK REPURCHASE PROGRAM ACTIVITY

On August 10, 2023, CBL announced that its Board of Directors authorized a stock repurchase program for the Company to buy up to $25.0 million of its common stock. Purchases may be made through the program by August 10, 2024. In 2023, CBL repurchased 51,966 shares at an average price of $21.30 per share under the program.

DISPOSITIONS

During the fourth quarter 2023, CBL completed the sale of one land parcel, generating $0.7 million in gross proceeds at CBL's share. In 2023, CBL grossed more than $9.6 million from dispositions.

DEVELOPMENT AND REDEVELOPMENT ACTIVITY

Detailed project information is available in CBL’s Financial Supplement for Q4 2023, which can be found in the Invest – Financial Reports section of CBL’s website at cblproperties.com.

OUTLOOK AND GUIDANCE

Based on Management's expectations for 2024, CBL is initiating the following guidance for FFO, as adjusted, and same-center NOI for full-year 2024. Guidance excludes the impact of any unannounced transactions.

	Low			High
2024 FFO, as adjusted (in millions)	$	196.0		$	210.0
2024 FFO, as adjusted, per share	$	6.19		$	6.63
Weighted average common shares outstanding (in millions)	31.7			31.7
2024 Same-Center NOI ("SC NOI") (in millions)	$	428.0		$	442.0
2024 change in same-center NOI		(1.9	)%		1.3	%

2023 vs. 2024 Same-Center NOI Guidance Bridge (in millions):

	2024 SC NOI Low End			2024 SC NOI High End			Category Explanation
2023 same-center NOI	$	436.5		$	436.5		Harford Mall removed from same-center NOI pool.
Net impact from new and renewal leasing activity		5.5			9.0		Net impact of new leases, renewal leases and contractual rent bumps.
Percentage rent		(4.0	)		(1.0	)	Lower percentage rent resulting from an anticipated decline in full-year sales.
Operating expense		(2.0	)		-		Low end represents potential increase in operating expenses.
Credit loss		(6.0	)		(1.5	)	Unbudgeted reserve for tenants that may file for bankruptcy/close stores.
Uncollectable revenue variance		(2.0	)		(1.0	)	Represents the estimated impact of an unfavorable variance in the estimate for uncollectable revenues.
2024 SC NOI Guidance	$	428.0		$	442.0
% change		(1.9	)%		1.3	%

Reconciliation of GAAP Earnings Per Share to 2024 FFO, as Adjusted, Per Share:

	Low			High
Expected diluted earnings per common share	$	-		$	0.44
Depreciation and amortization		4.79			4.79
Dividends allocable to unvested restricted stock		0.03			0.03
Debt discount accretion, net of noncontrolling interests' share		1.46			1.46
Adjustment for unconsolidated affiliates with negative investment		(0.09	)		(0.09	)
Expected FFO, as adjusted, per diluted, fully converted common share	$	6.19		$	6.63

2024 Estimate of Capital Items (in millions):

	Low		High
2024 Estimated maintenance capital/tenant allowances	$	40.0	$	55.0
2024 Estimated development/redevelopment expenditures		10.0		15.0
2024 Estimated principal amortization (including est. term loan ECF)		70.0		80.0
Total Estimate	$	120.0	$	150.0

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 owned and managed portfolio is comprised of 94 properties totaling 58.5 million square feet across 22 states, including 56 high-quality enclosed malls, outlet centers and lifestyle retail centers as well as more than 30 open-air centers and other assets. 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. 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 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.

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.

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 (loss) is located at the end of this earnings release.

Pro Rata Share of Debt

The Company presents debt based on the carrying value of its pro rata ownership share (including the carrying value of 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.

Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)

	Three Months Ended December 31,						Year Ended December 31,
	2023			2022			2023			2022
REVENUES:
Rental revenues	$	134,008		$	143,441		$	513,957		$	542,247
Management, development and leasing fees		1,821			1,820			7,917			7,158
Other		3,880			4,350			13,412			13,606
Total revenues		139,709			149,611			535,286			563,011
EXPENSES:
Property operating		(22,254	)		(23,080	)		(90,996	)		(92,126	)
Depreciation and amortization		(42,376	)		(61,841	)		(190,505	)		(256,310	)
Real estate taxes		(11,744	)		(14,550	)		(54,807	)		(57,119	)
Maintenance and repairs		(11,334	)		(11,417	)		(41,336	)		(42,485	)
General and administrative		(14,283	)		(16,066	)		(64,066	)		(67,215	)
Loss on impairment		—			—			—			(252	)
Litigation settlement		132			122			2,310			304
Other		(23	)		—			(221	)		(834	)
Total expenses		(101,882	)		(126,832	)		(439,621	)		(516,037	)
OTHER INCOME (EXPENSES):
Interest and other income		3,939			3,722			13,199			4,938
Interest expense		(42,317	)		(33,914	)		(172,905	)		(217,342	)
Gain on extinguishment of debt		3,270			7,344			3,270			7,344
Gain on deconsolidation		—			—			47,879			36,250
Loss on available-for-sale securities		—			—			—			(39	)
Gain on sales of real estate assets		229			1,798			5,125			5,345
Reorganization items, net		—			36			—			298
Income tax benefit (provision)		487			(328	)		(894	)		(3,079	)
Equity in earnings of unconsolidated affiliates		9,043			3,488			11,865			19,796
Total other expenses		(25,349	)		(17,854	)		(92,461	)		(146,489	)
Net income (loss)		12,478			4,925			3,204			(99,515	)
Net (income) loss attributable to noncontrolling interests in:
Operating Partnership		(8	)		—			(2	)		34
Other consolidated subsidiaries		(657	)		(2,003	)		3,344			5,999
Net income (loss) attributable to the Company		11,813			2,922			6,546			(93,482	)
Earnings allocable to unvested restricted stock		(276	)		(2,111	)		(1,113	)		(2,537	)
Net income (loss) attributable to common shareholders	$	11,537		$	811		$	5,433		$	(96,019	)
Basic and diluted per share data attributable to common shareholders:
Basic earnings per share	$	0.37		$	0.03		$	0.17		$	(3.20	)
Diluted earnings per share		0.37			0.03			0.17			(3.20	)
Weighted-average basic shares		31,291			30,999			31,303			30,046
Weighted-average diluted shares		31,291			30,999			31,303			30,046

The Company's reconciliation of net income (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 December 31,						Year Ended December 31,
	2023			2022			2023			2022
Net income (loss) attributable to common shareholders	$	11,537		$	811		$	5,433		$	(96,019	)
Noncontrolling interest in loss of Operating Partnership		8			—			2			(34	)
Earnings allocable to unvested restricted stock		276			2,111			1,113			2,537
Depreciation and amortization expense of:
Consolidated properties		42,376			61,841			190,505			256,310
Unconsolidated affiliates		4,145			(191	)		17,408			20,813
Non-real estate assets		(232	)		(526	)		(905	)		(1,050	)
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries		(507	)		(832	)		(2,442	)		(3,498	)
Loss on impairment, net of taxes		—			—			—			186
Gain on depreciable property		—			—			—			(629	)
FFO allocable to Operating Partnership common unitholders		57,603			63,214			211,114			178,616
Debt discount accretion, including our share of unconsolidated affiliates and net of noncontrolling interests' share ⁽¹⁾		13,909			22,131			61,788			176,055
Adjustment for unconsolidated affiliates with negative investment ⁽²⁾		(6,062	)		(1,522	)		(7,242	)		(37,645	)
Senior secured notes fair value adjustment ⁽³⁾		—			—			—			(395	)
Litigation settlement ⁽⁴⁾		(132	)		(122	)		(2,310	)		(304	)
Non-cash default interest expense ⁽⁵⁾		—			(9,148	)		972			(28,953	)
Gain on deconsolidation ⁽⁶⁾		—			—			(47,879	)		(36,250	)
Loss on available-for-sale securities		—			—			—			39
Reorganization items, net ⁽⁷⁾		—			(36	)		—			(298	)
Gain on extinguishment of debt ⁽⁸⁾		(3,270	)		(7,344	)		(3,270	)		(7,344	)
FFO allocable to Operating Partnership common unitholders, as adjusted	$	62,048		$	67,173		$	213,173		$	243,521
FFO per diluted share	$	1.80		$	1.99		$	6.59		$	5.78
FFO, as adjusted, per diluted share	$	1.94		$	2.11		$	6.66		$	7.88
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted		32,007			31,840			32,015			30,888

⁽¹⁾		In conjunction with fresh start accounting upon emergence from bankruptcy, the Company recognized debt discounts equal to the difference between the outstanding balance of mortgage notes payable and the estimated fair value of such mortgage notes payable. The debt discounts are accreted as additional interest expense over the terms of the respective mortgage notes payable using the effective interest method.
⁽²⁾		Represents the Company’s share of the earnings (losses) before depreciation and amortization expense of unconsolidated affiliates where the Company is not recognizing equity in earnings (losses) because its investment in the unconsolidated affiliate is below zero.
⁽³⁾		Represents the fair value adjustment recorded on the senior secured notes as interest expense.
⁽⁴⁾		Represents a credit to litigation settlement expense in each respective period related to claim amounts that were released pursuant to the terms of the settlement agreement related to the settlement of a class action lawsuit.
⁽⁵⁾		The year ended December 31, 2023 includes default interest on loans past their maturity dates. The three months and year ended December 31, 2022 includes the reversal of default interest expense when waivers or forbearance agreements were obtained.
⁽⁶⁾		For the year ended December 31, 2023, the Company deconsolidated Alamance Crossing East and WestGate Mall due to a loss of control when the properties were placed into receivership in connection with the foreclosure process. For the year ended December 31, 2022, the Company deconsolidated Greenbrier Mall due to a loss of control when the property was placed into receivership in connection with the foreclosure process.
⁽⁷⁾		Represents costs incurred subsequent to the Company filing the chapter 11 cases associated with the Company's reorganization efforts, which consists of professional fees, legal fees and U.S. Trustee fees.
⁽⁸⁾		The three months and year ended December 31, 2023 includes a gain on extinguishment of debt related to the loan secured by The Outlet Shoppes at Laredo. The three months and year ended December 31, 2022 includes a gain on extinguishment of debt related to the loan secured by The Outlet Shoppes at Gettysburg.

	Three Months Ended December 31,				Year Ended December 31,
	2023		2022		2023		2022
Diluted EPS attributable to common shareholders	$	0.37	$	0.03	$	0.17	$	(3.20	)
Add amounts per share included in FFO:
Unvested restricted stock		0.01		0.08		0.03		0.16
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		1.42		1.88		6.39		8.83
Loss on impairment, net of taxes		—		—		—		0.01
Gain on depreciable property		—		—		—		(0.02	)
FFO per diluted share	$	1.80	$	1.99	$	6.59	$	5.78

	Three Months Ended December 31,						Year Ended December 31,
	2023			2022			2023			2022
SUPPLEMENTAL FFO INFORMATION:
Lease termination fees	$	1,423		$	1,095		$	3,504		$	5,115

Straight-line rental income adjustment	$	1,432		$	3,140		$	6,840		$	12,540

Gain on outparcel sales, net of taxes and noncontrolling interests' share	$	229		$	2,132		$	5,607		$	5,712

Net amortization of acquired above- and below-market leases	$	(5,626	)	$	(4,286	)	$	(20,736	)	$	(20,773	)

Income tax benefit (provision)	$	487		$	(328	)	$	(894	)	$	(3,079	)

Abandoned projects expense	$	(22	)	$	—		$	(39	)	$	(834	)

Interest capitalized	$	111		$	87		$	453		$	618

Estimate of uncollectable revenues	$	1,081		$	866		$	(1,493	)	$	4,920

							As of December 31,
							2023			2022
Straight-line rent receivable							$	22,649		$	15,600

Same-center Net Operating Income
(Dollars in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2023			2022			2023			2022
Net income (loss)	$	12,478		$	4,925		$	3,204		$	(99,515	)
Adjustments:
Depreciation and amortization		42,376			61,841			190,505			256,310
Depreciation and amortization from unconsolidated affiliates		4,145			(191	)		17,408			20,813
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries		(507	)		(832	)		(2,442	)		(3,498	)
Interest expense		42,317			33,914			172,905			217,342
Interest expense from unconsolidated affiliates		17,753			22,877			71,867			88,331
Noncontrolling interests' share of interest expense in other consolidated subsidiaries		(1,089	)		(177	)		(6,156	)		(7,960	)
Abandoned projects expense		22			—			39			834
Gain on sales of real estate assets, net of taxes and noncontrolling interests' share		(229	)		(1,798	)		(4,839	)		(5,345	)
Gain on sales of real estate assets of unconsolidated affiliates		—			(374	)		(768	)		(1,036	)
Adjustment for unconsolidated affiliates with negative investment		(6,062	)		(1,522	)		(7,242	)		(37,645	)
Gain on extinguishment of debt		(3,270	)		(7,344	)		(3,270	)		(7,344	)
Gain on deconsolidation		—			—			(47,879	)		(36,250	)
Loss on available-for-sale securities		—			—			—			39
Loss on impairment		—			—			—			252
Litigation settlement		(132	)		(122	)		(2,310	)		(304	)
Reorganization items, net		—			(36	)		—			(298	)
Income tax (benefit) provision		(487	)		328			894			3,079
Lease termination fees		(1,423	)		(1,095	)		(3,504	)		(5,115	)
Straight-line rent and above- and below-market lease amortization		4,194			1,146			13,896			8,233
Net (income) loss attributable to noncontrolling interests in other consolidated subsidiaries		(657	)		(2,003	)		3,344			5,999
General and administrative expenses		14,283			16,066			64,066			67,215
Management fees and non-property level revenues		(4,360	)		(2,635	)		(19,087	)		(4,433	)
Operating Partnership's share of property NOI		119,352			122,968			440,631			459,704
Non-comparable NOI		114			(2,067	)		(2,119	)		(14,328	)
Total same-center NOI ⁽¹⁾	$	119,466		$	120,901		$	438,512		$	445,376
Total same-center NOI percentage change		(1.2	)%					(1.5	)%

⁽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). 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 December 31, 2023, 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 December 31, 2023. 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.

Same-center Net Operating Income
(Continued)

	Three Months Ended December 31,					Year Ended December 31,
	2023			2022		2023			2022
Malls	$	84,789		$	86,129	$	303,365		$	313,384
Outlet centers		5,505			5,360		21,043			19,845
Lifestyle centers		9,079			9,938		35,662			35,646
Open-air centers		13,946			13,346		55,276			52,847
Outparcels and other		6,147			6,128		23,166			23,654
Total same-center NOI ⁽¹⁾	$	119,466		$	120,901	$	438,512		$	445,376
Percentage Change:
Malls		(1.6	)%				(3.2	)%
Outlet centers		2.7	%				6.0	%
Lifestyle centers		(8.6	)%				0.0	%
Open-air centers		4.5	%				4.6	%
Outparcels and other		0.3	%				(2.1	)%
Total same-center NOI ⁽¹⁾		(1.2	)%				(1.5	)%

⁽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). 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 December 31, 2023, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ended December 31, 2023. 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.

Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)

	As of December 31, 2023
	Fixed Rate			Variable Rate			Total Debt			Unamortized Deferred Financing Costs			Unamortized Debt Discounts ⁽¹⁾			Total, net
Consolidated debt	$	915,753		$	1,028,213		$	1,943,966		$	(13,221	)	$	(41,942	)	$	1,888,803
Noncontrolling interests' share of consolidated debt		(25,021	)		(11,823	)		(36,844	)		249			3,706			(32,889	)
Company's share of unconsolidated affiliates' debt		622,169			57,274			679,443			(3,197	)		—			676,246
Other debt ⁽²⁾		69,783			—			69,783			—			—			69,783
Company's share of consolidated, unconsolidated and other debt	$	1,582,684		$	1,073,664		$	2,656,348		$	(16,169	)	$	(38,236	)	$	2,601,943
Weighted-average interest rate		5.26	%		8.42	%		6.54	%

	As of December 31, 2022
	Fixed Rate			Variable Rate			Total Debt			Unamortized Deferred Financing Costs			Unamortized Debt Discounts ⁽¹⁾			Total, net
Consolidated debt	$	1,023,634		$	1,065,942		$	2,089,576		$	(17,101	)	$	(72,289	)	$	2,000,186
Noncontrolling interests' share of consolidated debt		(25,420	)		(13,387	)		(38,807	)		317			7,448			(31,042	)
Company's share of unconsolidated affiliates' debt		621,642			71,584			693,226			(2,142	)		—			691,084
Company's share of consolidated, unconsolidated and other debt	$	1,619,856		$	1,124,139		$	2,743,995		$	(18,926	)	$	(64,841	)	$	2,660,228
Weighted-average interest rate		4.83	%		7.10	%		5.76	%

⁽¹⁾		In conjunction with fresh start accounting, the Company estimated the fair value of its mortgage notes with the assistance of a third-party valuation advisor. This resulted in recognizing debt discounts upon emergence from bankruptcy. The debt discounts are accreted over the term of the respective debt using the effective interest method.
⁽²⁾		Represents the outstanding loan balance for properties that were deconsolidated due to a loss of control when the properties were placed into receivership in connection with the foreclosure process.

Consolidated Balance Sheets
(Unaudited; in thousands, except share data)

	December 31,
	2023			2022
ASSETS
Real estate assets:
Land	$	585,191		$	596,715
Buildings and improvements		1,216,054			1,198,597
		1,801,245			1,795,312
Accumulated depreciation		(228,034	)		(136,901	)
		1,573,211			1,658,411
Developments in progress		8,900			5,576
Net investment in real estate assets		1,582,111			1,663,987
Cash and cash equivalents		34,188			44,718
Restricted cash		88,888			97,231
Available-for-sale securities - at fair value (amortized cost of $261,869 and $293,476 as of December 31, 2023 and 2022, respectively)		262,142			292,422
Receivables:
Tenant		43,436			40,620
Other		2,752			3,876
Investments in unconsolidated affiliates		76,458			77,295
In-place leases, net		157,639			247,497
Above market leases, net		118,673			171,265
Intangible lease assets and other assets		39,618			39,332
	$	2,405,905		$	2,678,243
LIABILITIES AND EQUITY
Mortgage and other indebtedness, net	$	1,888,803		$	2,000,186
Below market leases, net		80,408			110,616
Accounts payable and accrued liabilities		106,077			200,312
Total liabilities		2,075,288			2,311,114
Shareholders' equity:
Common stock, $.001 par value, 200,000,000 shares authorized, 31,975,645 and 31,780,075 issued and outstanding as of December 31, 2023 and 2022, respectively (in each case, excluding 34 treasury shares)		32			32
Additional paid-in capital		719,125			710,497
Accumulated other comprehensive income (loss)		610			(1,054	)
Accumulated deficit		(380,446	)		(338,934	)
Total shareholders' equity		339,321			370,541
Noncontrolling interests		(8,704	)		(3,412	)
Total equity		330,617			367,129
	$	2,405,905		$	2,678,243

View source version on businesswire.com: https://www.businesswire.com/news/home/20240212237014/en/

Contacts

Katie Reinsmidt, Executive Vice President - Chief Operating Officer, 423.490.8301, katie.reinsmidt@cblproperties.com