SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 1-12494
CBL & ASSOCIATES PROPERTIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 62-1545718
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
2030 Hamilton Place Blvd., Suite 500
Chattanooga, Tennessee 37421-6000
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (423) 855-0001
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange
Title of Each Class on which Registered
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Common Stock, $.01 par New York Stock Exchange
value per share
9.0% Series A Cumulative
Redeemable Preferred Stock, par New York Stock Exchange
value $.01 per share,
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all Reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ___X___ No ______
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant was approximately $906,954,428 based on the closing price on the
New York Stock Exchange for such stock on March 1, 2002.
As of March 1, 2002, there were outstanding 25,692,760 shares of the
Registrant's Common Stock and 2,875,000 shares of 9.0% Series A Cumulative
Redeemable Preferred Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates certain information by reference to the Registrant's
definitive proxy statement in respect to the Annual Meeting of Stockholders to
be held on May 7, 2002.
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CBL & Associates Properties, Inc - 2001 Form 10K
FORM 10-K
TABLE OF CONTENTS
Item No. Page
PART I
Item 1 Business 3
Item 2 Properties 14
Item 3 Legal Proceedings 36
Item 4 Submission of Matters to a Vote of Security Holders 36
PART II
Item 5 Market for Registrant's Common Equity and Related
Shareholder Matters 36
Item 6 Selected Financial Data 37
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations 38
Item 7A Quantitative and Qualitative Disclosures about Market Risk 50
Item 8 Financial Statements and Supplementary Data 50
Item 9 Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 50
PART III
Item 10 Directors and Executive Officers of the Registrant 50
Item 11 Executive Compensation 50
Item 12 Security Ownership of Certain Beneficial Owners
and Management 50
Item 13 Certain Relationships and Related Transactions 50
PART IV
Item 14 Exhibits, Financial Statement Schedules and
Reports on Form 8-K 50
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CBL & Associates Poperties, Inc. - Form 10K
Cautionary Statement Relevant to Forward-Looking Information for the
Purpose of the "Safe Harbor" Provisions of the Private Securities Litigation
Reform Act of 1995
This Annual Report on Form 10-K contains forward-looking statements, such
as information relating to the Company's growth strategy, projects targeted for
development or under construction, liquidity and capital resources and
compliance with environmental laws and regulations. Such statements are subject
to certain risks and uncertainties which could cause actual results to differ
materially, including, but not limited to, those set forth below. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances occurring after the date hereof or to reflect the occurrence of
unanticipated events.
PART I
ITEM 1. BUSINESS.
Formation of the Company
CBL & Associates Properties, Inc. (the "Company") is a self-managed,
self-administered, fully-integrated real estate company which is engaged in the
ownership, operation, marketing, management, leasing, expansion, development,
redevelopment, acquisition and financing of regional malls and community and
neighborhood centers. The Company was incorporated on July 13, 1993 under the
laws of the State of Delaware to acquire an interest in substantially all of the
real estate properties owned by CBL & Associates, Inc. and its affiliates
("CBL") and to provide a public vehicle for the expansion of CBL's shopping
center business.
The Company conducts substantially all of its business through CBL &
Associates Limited Partnership, a Delaware limited partnership (the "Operating
Partnership"), in which the Company owns an indirect 51.1% interest and of which
the Company's wholly-owned subsidiary is the sole general partner. To comply
with certain technical requirements of the Internal Revenue Code of 1986, as
amended (the "Code") applicable to real estate investment trusts' ("REIT's"),
the Company's property management and development activities, sales of
peripheral land and maintenance and security operations are carried out through
CBL & Associates Management, Inc. (the "Management Company").
On November 3, 1993, the Company completed the initial public offering (the
"Offering") of 15,400,000 shares of its common stock, par value $.01 per share
(the "Common Stock"). Simultaneously with the completion of the Offering, CBL
transferred to the Operating Partnership substantially all of CBL's interests in
its real estate properties and its management and development operations in
exchange for an interest in the Operating Partnership. CBL also acquired an
additional interest in the Operating Partnership for a cash payment. Each of the
partnership interests in the Operating Partnership may, at the election of its
respective holder, be exchanged for shares of Common Stock of the Company,
subject to certain limitations imposed by the Code.
The Offering and the application of proceeds therefrom, including the
Operating Partnership's acquisition of certain property interests, and the
contribution by CBL of property interests to the Operating Partnership, are
referred to herein as the "Formation."
In September 1995, the Company completed a follow-on offering of 4,163,500
shares of its Common Stock at $20.625 per share. CBL purchased 150,000 of these
shares.
In January 1997, the Company completed a follow-on offering of 3,000,000
shares of its Common Stock at $26.125 per share. CBL purchased 55,000 of these
shares.
In June 1998, the Company completed a public offering of 2,875,000 shares
of 9.0% Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred
Stock") at a price to the public of $25.00 per share. The net proceeds of $70
million were used to repay variable rate indebtedness incurred in the Company's
development and acquisition programs.
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CBL & Associates Poperties, Inc. - Form 10K
On January 31, 2001, the Company issued 12,056,692 special common units of
the Operating Partnership with a fair value of $27.25 per unit for the first
stage of the acquisition of The Richard E. Jacobs Group, Inc.'s ("Jacobs")
interests in 21 malls and two associated centers.
On January 31, 2001, the Company issued 603,344 special common units of the
Operating Partnership with a fair value of $27.25 per unit to purchase the 50%
interest in Madison Square Mall in Huntsville, Alabama that it did not already
own. In June 2001 the Company issued 31,008 common units of the Operating
Partnership with a value of $949,000 to purchase the 25% interest in Madison
Plaza in Huntsville, Alabama that it did not already own.
After giving effect to the above transactions, at December 31, 2001 CBL
holds a 17.7% limited partner interest in the Operating Partnership, the Company
indirectly holds a 51.1% general and limited partner interest in the Operating
Partnership, Jacobs holds a 22.8% limited partner interest and third parties
hold a 8.3% limited partner interest. In addition, CBL holds approximately 2.0
million of the outstanding shares of Common Stock for a total ownership share in
the Company of 21.8%.
General
The Company owns interests in a portfolio of properties, which as of
December 31, 2001 consisted of 52 enclosed regional malls (the "Malls"), 18
associated centers (the "Associated Centers"), each of which is part of a
regional shopping mall complex, and 68 independent community and neighborhood
shopping centers (the "Community Centers"). Of these properties nineteen Malls,
thirteen Associated Centers and sixty-four Community Centers were developed by
CBL or the Company.
As of December 31, 2001 the Company owned one regional Mall, and one mall
expansion under construction (the "Construction Properties"). The Company also
owned as of December 31, 2001 options to acquire certain shopping center
development sites (the "Development Properties").
The Company also owned, as of December 31, 2001, mortgages (the
"Mortgages") on eight community and neighborhood shopping centers owned by
non-CBL affiliates. The Mortgages were granted in connection with sales by CBL
of certain properties previously developed by CBL. The Company also owns
interests in two office buildings in Chattanooga, Tennessee ("Office
Buildings"). The Company relocated its headquarters at year end to a new Office
Building owned by the Company and opened in December, 2001. The Malls,
Associated Centers, Community Centers, Construction Properties, Development
Properties, Mortgages and Office Buildings are collectively referred to herein
as the "Properties" and individually as a "Property".
The Company and the Operating Partnership generally own a 100% interest in
the Properties. With three exceptions, where the Company and the Operating
Partnership own less than a 100% interest in a Property, the Operating
Partnership is the sole general partner, managing general partner or managing
member of the partnership or limited liability company which owns such Property
(each a "Property Partnership"). For two Malls and one Associated Center,
affiliates of the Operating Partnership are non-managing general partners in the
three Property Partnerships owning those Properties.
For a full description of the Properties, see Item 2 -- "Properties."
For information about the Company's reportable segments, see Note 17 to the
Consolidated Financial Statements.
The Company's executive offices are currently located at CBL Center, Suite
500, 2030 Hamilton Place Blvd., Chattanooga, Tennessee 37421-6000. The telephone
number at this address is (423) 855-0001.
Management and Operation of Properties
Management Company
The Company is self-managed and self-administered. To comply with certain
technical requirements of the Code, the Company's property management and
development activities and sales of peripheral land are carried out through the
Management Company.
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CBL & Associates Poperties, Inc. - Form 10K
The Operating Partnership holds 100% of the preferred stock and 5% of the
common stock of the Management Company. The remaining 95% of the common stock is
held by Charles Lebovitz, his family and his associates. Substantially all of
CBL's asset management, property management and leasing and development
operations, including CBL's executive, property, financial, legal and
administrative personnel, were transferred to the Management Company as part of
the Formation. The Management Company manages all of the Properties (except for
Governor's Square and Governor's Plaza in Clarksville, Tennessee and Kentucky
Oaks Mall in Paducah, Kentucky -- see below) under a management agreement that
may be terminated at any time by the Operating Partnership upon 30 days written
notice. In addition, the Management Company manages certain properties owned by
CBL that were not transferred to the Company in the Formation as well as certain
shopping centers owned by non-CBL affiliates. Through its ownership of the
Management Company's preferred stock, the Operating Partnership enjoys
substantially all of the economic benefits of the Management Company's business.
The Management Company's Amended and Restated Certificate of Incorporation
requires that a majority of the Management Company's board of directors be
independent of CBL. Since November 1993, the board of directors of the
Management Company has consisted of the same individuals as the Company's board
of directors, including four independent directors until January 31, 2001 when
two directors were added one of which is an independent director.
On-Site Management
The on-site property management functions at the Malls include leasing,
management, data processing, rent collection, project bookkeeping, budgeting,
marketing, and promotions. Each Mall, for itself and its Associated Centers, has
an on-site property manager who oversees the on-site staff and an on-site
marketing director who oversees the marketing program for that Mall. The on-site
Mall managers are experienced managers with training in mall management. Each
Mall manager and marketing director reports to the home office through six
regional Mall managers and six regional marketing directors. These regional
managers' offices are located in the Mall properties. District managers, most of
whom are located at the Company's headquarters, oversee the leasing and
operations at a majority of the Community Centers.
Virtually all operating activities of the Company are supported by a
computer software system which is designed to provide management with operating
data necessary to make informed business decisions on a timely basis. The
Company has a program of on-going upgrades to hardware and software that support
the accounting and management information systems. The Company also maintains a
web site to publish integrated information on the world wide web about the
Company and its properties. These systems were developed to more efficiently
assist management in efforts to market the Properties, maintain management
quality, enhance investor relations and communications and enhance tenant
relations while minimizing operating expenses. Retail sales analysis, leasing
information, budget controls, accounts receivable/payable, operating expense
variance reports and income analysis are continually available to management.
via the accounting and management information systems. Through these systems
management also has available information that facilitates the development and
monitoring of budgets and other relevant information.
Management pursues periodic preventative property maintenance programs,
which encompass paving, roofing, HVAC and general improvements to the
Properties' common areas. The on-site property managers oversee all such work in
accordance with approved budgets with the coordination of, and reporting to,
both regional and home office management.
Governor's Square and Kentucky Oaks
Governor's Square and Governor's Plaza in Clarksville, Tennessee and
Kentucky Oaks in Paducah, Kentucky are the only Properties in the Company's
portfolio in which the Company is not the sole general partner or managing
general partner or managing member. Governor's Square is owned by a Property
Partnership, the managing general partner of which is a non-CBL affiliate and
which owns a 47.5% interest in the Mall. The Company is a non-managing general
partner of Governor's Plaza. The Company owns a 48% interest in Kentucky Oaks
Mall and has an option to acquire an additional 2% interest. The Mall which is
managed by a non-CBL affiliate which owns a 50% interest. Although the managing
general partner of each of these partnerships controls the timing of
distributions of cash flow, the Company's approval is required for certain major
decisions, including permanent financing, refinancing and sale of all or
substantially all of the partnership's assets. Property management services,
including accounting, auditing, maintenance, promotional programs, leasing,
collection and insurance, are performed by a property manager affiliated with
the non-CBL managing general partner for which such property manager receives a
fee.
Employees
The Company, through the Management Company, currently employs
approximately 617 full time and 461 part time persons. None of these employees
is currently represented by any union. The Company does not have any employees
other than its statutory officers.
Environmental Matters
Under various federal, state and local laws, ordinances and regulations, a
current or previous owner or operator of real estate may be liable for the costs
of removal or remediation of petroleum and certain hazardous or toxic substances
on, under or in such real estate. Such laws typically impose such liability
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CBL & Associates Poperties, Inc. - Form 10K
without regard to whether the owner or operator knew of, or was responsible for,
the presence of such substances. The costs of remediation or removal of such
substances may be substantial, and the presence of such substances, or the
failure to promptly remediate such substances, may adversely affect the owner's
or operator's ability to sell such real estate or to borrow using such real
estate as collateral. Persons who arrange for the disposal or treatment of
hazardous or toxic substances may also be liable for the costs of removal or
remediation of such substances at the disposal or treatment facility, regardless
of whether such facility is owned or operated by such person. Certain laws also
impose requirements on conditions and activities that may affect the environment
or the impact of the environment on human health. Failure to comply with such
requirements could result in the imposition of monetary penalties (in addition
to the costs to achieve compliance) and potential liabilities to third parties.
Among other things, certain laws require abatement or removal of friable and
certain non-friable asbestos-containing materials ("ACMs") in the event of
demolition or certain renovations or remodeling. Certain laws regarding ACMs
require building owners and lessees, among other things, to notify and train
certain employees working in areas known or presumed to contain ACMs. Certain
laws also impose liability for release of ACMs into the air and third parties
may seek recovery from owners or operators of real properties for personal
injury or property damage associated with ACMs. In connection with its ownership
and operation of the Properties, the Company, the Operating Partnership or the
relevant Property Partnership, as the case may be, may be potentially liable for
such costs or claims.
All of the Properties (excluding properties upon which the Company holds an
option to purchase but does not yet own) have been subject to Phase I
environmental assessments or updates of existing Phase I environmental
assessments by independent environmental consultants. Such assessments generally
consisted of a visual inspection of the Properties, review of federal and state
environmental databases and certain information regarding historic uses of the
Property and adjacent areas and the preparation and issuance of written reports.
Some of the Properties contain, or contained, underground storage tanks ("UST"s)
used for storing petroleum products or wastes typically associated with
automobile service or other operations conducted at the Properties. Certain
Properties contain, or contained, dry-cleaning establishments utilizing
solvents. Where believed to be warranted, samples of building materials or
subsurface investigations were, or will, be undertaken. At certain Properties,
where warranted by the conditions, the Company has developed and implemented an
operations and maintenance program that establishes operating procedures with
respect to ACMs. The costs associated with the development and implementation
for such programs were not material.
Although there can be no assurances that such environmental liability does
not exist, none of the environmental assessments have identified and the Company
is not aware of any environmental liability with respect to the properties in
which the Company or the Operating Partnership has, or had, an interest (whether
as an owner or operator) that the Company believes would have a material adverse
effect on the Company's financial condition, results of operations or cash
flows. Nevertheless, it is possible that the environmental assessments available
to the Company do not reveal all potential environmental liabilities, that
subsequent investigations will identify material contamination, that adverse
environmental conditions have arisen subsequent to the performance of the
environmental assessments, or that there are material environmental liabilities
of which management is unaware. Moreover, no assurances can be given that (i)
future laws, ordinances or regulations will not impose any material
environmental liability or (ii) the current environmental condition of the
Properties has not been or will not be affected by tenants and occupants of the
Properties, by the condition of properties in the vicinity of the Properties or
by third parties unrelated to the Company, the Operating Partnership or the
relevant Property Partnership. The existence of any such environmental liability
could have an adverse effect on the Company's results of operations, cash flow
and the funds available to the Company to pay dividends.
The Company has not recorded in its financial statements any material
liability in connection with environmental matters.
General Risks of the Company's Business
General Factors Affecting Investments in Shopping Center Properties and
Effect of Economic and Real Estate Conditions
A shopping center's revenues and value may be adversely affected by a
number of factors, including: the national and regional economic climates; local
real estate conditions (such as an oversupply of retail space); perceptions by
retailers or shoppers of the safety, convenience and attractiveness of the
shopping center; and the willingness and ability of the shopping center's owner
to provide capable management and maintenance services. In addition, other
factors may adversely affect a shopping center's value without affecting its
current revenues, including: changes in governmental regulations, zoning or tax
laws; potential environmental or other legal liabilities; availability of
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CBL & Associates Poperties, Inc. - Form 10K
financing; and changes in interest rate levels. There are numerous shopping
facilities that compete with the Properties in attracting retailers to lease
space. In addition, retailers at the Properties face continued competition from
discount shopping centers, outlet malls, wholesale clubs, direct mail,
telemarketing, television shopping networks and shopping via the Internet.
Competition could adversely affect the Operating Partnership's revenues and
funds available for distribution to partners, which in turn will affect the
Company's revenues and funds available for distribution to stockholders.
Geographic Concentration
The Properties are located principally in the southeastern United States
(Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South
Carolina, Tennessee and Virginia). Thirty Malls, fifteen Associated Centers,
fifty Community Centers and the two Office Buildings are located in this region.
The Company's results of operations and funds available for distribution to
stockholders therefore will be subject generally to economic conditions in the
southeastern United States. The Properties located in the southeastern United
States accounted for 58.9% of the Company's total assets, and provided 59.5% of
the Company's total revenues from all properties for the year ended December 31,
2001.
Third Party Interests In Certain Properties
The Operating Partnership owns partial interests in ten Malls, four
Associated Centers, one Community Center, two Office Buildings, one Mall under
development and one Mall under construction. The Operating Partnership or an
affiliate of the Company is the managing general partner of the Property
Partnerships that own such Properties, except for the Governor's Square Mall,
Governor's Plaza and Kentucky Oaks Mall.
Where the Operating Partnership serves as managing general partner of
Property Partnerships, it may have certain fiduciary responsibilities to the
other partners in those partnerships. In certain cases, the approval or consent
of the other partners is required before the Operating Partnership may sell,
finance, expand or make other significant changes in the operations of such
Properties. To the extent such approvals or consents are required, the Operating
Partnership may experience difficulty in, or may be prevented from implementing
its plans with respect to expansion, development, financing or other similar
transactions with respect to such Properties.
With respect to Governor's Square, Governor's Plaza and Kentucky Oaks Mall,
the Operating Partnership does not have day-to-day operational control or
control over certain major decisions, including the timing and amount of
distributions, which could result in decisions by the managing general partner
that do not fully reflect the interests of the Company, including decisions
relating to the standards that the Company is required to satisfy in order to
maintain its status as a real estate investment trust for tax purposes. However,
decisions relating to sales, expansions, dispositions of all or substantially
all of the assets, and financings are subject to approval by the Operating
Partnership.
Dependence on Significant Properties
Eleven months of revenue at Hanes Mall in Winston-Salem, North Carolina and
the full years revenue at Coolsprings Galleria in Nashville, Tennessee and
Hamilton Place Mall in Chattanooga, Tennessee accounted for approximately 3.9%,
3.6% and 3.6%, respectively, of total revenues of the Company for the period
ended December 31, 2001. The Company's financial position and results of
operations will therefore be somewhat affected by the results experienced at
these Properties.
Dependence on Significant Markets
In certain markets the Company may have more than one Mall. The top six
markets with one or more of the Company's Malls and various Associated Centers
and Community Centers are: three Malls, three Associated Centers and one
Community Center in Nashville Tennessee, one Mall, four Associated Centers,
three Community Centers and two Office Buildings in Chattanooga, Tennessee, one
Mall in Winston-Salem, North Carolina, two Malls in Charleston, South Carolina
and one Mall in Minneapolis (Burnsville), Minnesota. The Company's share of
revenues derived from these markets represent 10.1%, 4.6%, 3.9%, 3.5% and 3.4%
of the Company's revenues for the year ended December 31, 2001, respectively.
Total revenue for eleven months of operations at two Malls in Madison, Wisconsin
represent 3.5% of total revenues for all of the Company's properties for the
year ended December 31, 2001. The Company's share of revenues from the two Malls
in Madison, Wisconsin, however represent only 2.0% of the Company's total
revenue for the Year ended December 31, 2001.. The Company's financial position
and results of operations will therefore be affected by the results experienced
at these Properties in these six markets.
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CBL & Associates Poperties, Inc. - Form 10K
Dependence on Key Tenants
As of December 31, 2001, The Limited Inc. Stores (including Intimate
Brands, Inc.) maintained 189 stores in the Company's properties and in the year
ended December 31, 2001 accounted for approximately 6.4% of total revenues of
the Company. As of December 31, 2001, the Gap. Inc.. (The Gap, Old Navy, Banana
Republic and Gap Kids ) had 67 stores and in the year ended December 31, 2001,
accounted for 2.7% of the total revenues of the Company. As of December 31,
2001, the Footlocker, Inc. (Footlocker, Ladies Footlocker, Kids Footlocker and
Champs Sports) had 117 stores and in the year ended December 31, 2001, accounted
for 2.6% of the total revenues of the Company. The loss or bankruptcy of these
or any other key tenants could negatively affect the Company's financial
position and results of operations.
The Company's Strategy for Growth
Management believes that per share growth in the Company's Funds from
Operations, as defined below, is one of the key factors in enhancing shareholder
value. Management also believes that Funds from Operations is a widely used
measure of the operating performance of REITs, and its consistent determination
provides a relevant basis for comparison among REITs. It is the objective of the
Company's management to achieve growth in Funds from Operations through the
aggressive management of the Company's existing Properties, the expansion and
renovation of existing Properties, the development of new properties, and select
acquisitions. Funds from Operations can also be affected by external factors,
such as inflation, fluctuations in interest rates or changes in general economic
conditions, which are beyond the control of the Company's management.
"Funds from Operations" is defined by the Company as net income (loss)
before property depreciation, other non-cash items, gains or losses on sales of
real estate assets and gains or losses on investments in marketable securities.
Effective January 1, 2000, the National Association of Real Estate Investment
Trusts ("NAREIT") clarified FFO to include all operating results - recurring and
non-recurring - except those results defined as "extraordinary items" under
accounting principles generally accepted in the United States. Funds from
Operations does not represent cash flow from operations as defined by accounting
principals generally accepted in the United States ("GAAP") and is not
necessarily indicative of cash available from operations 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 as an alternative
to cash flows as a measure of liquidity.
The Company classifies its regional malls into three categories -
stabilized malls ("Stabilized Malls") which have completed their initial
lease-up, new malls ("New Malls") which are in their initial lease-up phase or
are being redeveloped and newly acquired malls ("Newly Acquired Malls")
representing the 21 mall portfolio acquired on January 31, 2001. At year end the
New Mall category was comprised of Springdale Mall in Mobile, Alabama which was
acquired in September 1997 and which is currently being redeveloped and
retenanted; Parkway Place Mall in Huntsville, Alabama which was acquired in
December, 1998 and which is being redeveloped, Arbor Place in Atlanta
(Douglasville), Georgia, which opened in October 1999 and The Lakes Mall in
Muskegon, Michigan which opened in August 2001.
Specifically, the Company has implemented its objective of growing its
Funds from Operations and will continue to do so by:
- - Acquiring existing retail properties where cash flow can be enhanced by
improved management, leasing, redevelopment and expansion.
Management believes that an opportunity for growth exists
through the acquisition of shopping centers that meet the
Company's investment criteria and targeted returns. In
general, the Company seeks to acquire well-located shopping
centers in middle-market geographic areas consistent with
management's experience where management believes significant
value can be created through its development, leasing and
management expertise.
On January 31, 2001, the Company acquired from The
Richard E. Jacobs Group interests in twenty-one Malls
and two Associated Centers, including the acquisition
of minority interests in certain properties, the
Newly Acquired Malls defined above. The total gross
leasable area of the twenty-three properties is 19.2
million square feet, or an average gross leasable
area of 914,000 square feet per Mall. The gross
leasable area of mall stores is approximately 5.9
million square feet. The Malls are located in middle
markets predominantly in the Southeast and the
Midwest. Certain information on the Properties that
wereacquired is as follows on the next page (as of
the acquisition date of January 31, 2001):
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CBL & Associates Poperties, Inc. - Form 10K
Total Sales
Year of Gross per Occupany
Name of Year of Most Recent Proposed Leasable Mall Square Percen-
Center/Location Opening Expansion Ownership Area Stores Foot(1) tage(2) Anchors
- ----------------------------------------------------------------------------------------------------------------------------------
Brookfield Square 1967 1997 100.0% 1,041,000 317,000 $438 97% Boston Store, Sears,
Brookfield, WI JCPenney
Cary Towne Center 1979 1993 80.0% 953,000 296,000 380 97% Dillard's, Hecht's,
Sears
Cary, NC Hudson-Belk, JCPenney
Cherryvale Mall 1973 1989 100.0% 714,000 305,000 315 86% Bergner's, Marshall
Rockford, IL Field's, Sears
Citadel Mall 1981 2000 100.0% 1,068,000 299,000 259 85% Parisian, Dillard's,
Charleston, SC Belk, JCPenney, Sears
Columbia Mall 1977 1997 48.0% 1,113,000 299,000 257 90% Dillard's, JCPenney,
Columbia, CS Rich's, Sears
Eastgate Mall (2) 1980 1995 100.0% 1,099,000 270,000 269 88% JCPenney, Kohl's,
Cincinnati, OH Dillard's, Sears
East Towne Mall 1971 1997 48.0% 895,000 301,000 301 96% Boston Store,
Younkers,
Madison, WI Sears, JCPenney
Fashion Square 1972 1993 100.0% 786,000 289,000 301 93% Hudson's, JCPenney,
Saginaw, MI Sears
Fayette Mall 1971 1993 100.0% 1,096,000 309,000 495 99% Lazarus, Dillard's,
Lexington, KY JCPenney, Sears
Hanes Mall 1975 1990 100.0% 1,556,000 555,000 329 93% Dillard's, Belk,
Hecht's,
Winston-Salem, NC Sears, JCPenney
Jefferson Mall 1978 1999 100.0% 936,000 276,000 287 96% Lazarus, Dillard's,
Louisville, KY Sears, JCPenney
Kentucky Oaks Mall 1982 1995 48.0% 878,000 278,000 256 84% Dillard's, Elder-
Paducah, KY Beerman, JCPenney,
Midland Mall 1991 - 100.0% 514,000 197,000 245 85% Elder-Beerman,
Midland, MI JCPenney, Sears,
Target
Northwoods Mall 1972 1995 100.0% 833,000 314,000 317 88% Dillard's, Belk,
Charleston, SC JCPenney, Sears
Old Hickory Mall 1967 1994 100.0% 556,000 161,000 304 99% Belk, Goldsmith's,
Jackson, TN Sears, JCPenney
Parkdale Mall 1986 1993 100.0% 1,411,000 475,000 271 82% Dillard's, JCPenney,
Beaumont, TX Montgomery Ward
Randolph Mall 1982 1989 100.0% 376,000 147,000 195 91% Belk, JCPenney,
Asheboro, NC Roses, Sears
Regency Mall 1981 1999 100.0% 918,000 268,000 257 91% Boston Store,
Younkers,
Racine, WI JCPenney, Sears
Towne Mall 1977 - 100.0% 521,000 154,000 269 70% Elder-Beerman,
Franklin, OH Dillard's, Sears
Wausau Center 1983 1999 100.0% 429,000 156,000 258 95% Younkers, JCPenney,
Wausau, WI Sears
West Towne Mall (2) 1970 1990 48.0% 1,468,000 263,000 376 98% Boston Store, Sears,
Madison, WI JCPenney
---------- --------- ----
Total 19,161,000 5,929,000 $313(3)
========== ========= ====
(1) For the year ended December 31, 2001
(2) Includes Associated Center
(3) Weighted Average
In February 2001, the Company exercised its option in a
co-development project Willowbrook Plaza in Houston, Texas.
On January 31, 2001, the Company issued 603,344 special common
units of the Operating Partnership to purchase a 50% interest
in Madison Square Mall in Huntsville, Alabama. In June 2001
the Company issued 31,008 common units of the Operating
Partnership to purchase a 25% interest in Madison Plaza in
Huntsville, Alabama.
9
CBL & Associates Poperties, Inc. - Form 10K
- Maximizing the cash flow from its existing portfolio of Malls,
Associated Centers and Community Centers, and other retail
complexes through aggressive leasing, management, and
marketing, including:
- an active leasing strategy which seeks to increase
occupancy. At December 31, 2001, the occupancy in
the Companies Properties compared with occupancy
at December 31, 2000 was as follows (excluding
Parkway Place which was under redevelopment):
Total Combined Occupancy: 93.8% 95.7%
Core Portfolio:
Total portfolio occupancy 95.0% 95.7%
Stabilized Malls 94.1% 94.5%
New Malls* 89.1% 90.4%
Total Malls * 93.6% 94.1%
Associated Centers 95.6% 94.9%
Community Centers 97.0% 97.8%
Newly-Acquired Malls 90.4% N/A
Newly-Acquired Associated Centers 99.5% - -
* Excludes Parkway Place
- expanded merchandising, marketing and promotional
activities, with the goal of enhancing tenant sales
and thereby increasing percentage rents. Mall store
sales per square foot decreased for the year ended
December 31, 2001 compared with 2000.
Sales per square foot
Percentage
2001 2000 Decrease
------- ------- ----------
Stabilized Malls $284.65 $289.00 (1.5)%
Newwely Acquired Malls 313.15 318.16 (1.6)%
Combined Stabilized Malls 297.70 302.3 (1.5)%
- increased base rents as tenant leases expire,
renegotiation of leases and negotiation of
terminations of leases of under performing retailers.
At December 31, 2001, the Average base rents in the
Combined portfolio increased in certain property
types compared with average base rents at
December 31, 2001 as follows:
At December 31, Percentage
--------------- Increase
2001 2000 (Decrease)
------- ------- ----------
Stabilized and New Malls $22.49 $21.78 3.3%
Newly Acquired Malls 23.49 -- --
All Malls* 22.91 21.57 6.2%
Associated Centers 9.73 9.88 (1.5)%
Community Centers 9.43 8.85 6.6%
* Excludes Parkway Place
- control of operating costs. Occupancy costs as a
percentage of sales at the combined Stabilized Malls
and Newly Acquired Malls decreased to 11.3% for the
year ended December 31, 2001 as compared to 11.9%
for the year ended December 31, 2000.
- Expanding and renovating existing properties to maintain their
competitive position.
Most of the Malls were designed to allow for
expansion and growth through the addition of new
department stores or other large retail stores as
anchors ("Anchors"). Forty-eight existing Anchors at
twenty-three Malls have expansion potential at their
existing stores and five anchors at three malls have
expansion potential subject to certain conditions.
During 2001, the Company completed the renovation and
first phase expansion of Meridian Mall in Lansing
Michigan, completed a food court addition at Georgia
Square Mall in Athens Georgia and completed an
expansion of Springdale Mall in Mobile, Alabama.
During 2001, the Company also renovated Burnsville
Center in Minneapolis (Burnsville), Minnesota and two
Newly Acquired Malls Cary Towne Center in Cary, North
Carolina and Fashion Square in Saginaw, Michigan. In
2002 the Company plans on renovating the following
Newly Acquired Malls: Columbia Mall in Columbia,
10
CBL & Associates Poperties, Inc. - Form 10K
South Carolina, Parkdale Mall in Beaumont, Texas,
Hanes Mall in Winston-Salem, North Carolina and
Kentucky Oaks Mall in Paducah, Kentucky. In 2002
the Company also plans on renovating the following
Stabilized Malls: Hickory Hollow Mall in Nashville,
Tennessee, St Clair Square in Fairview Heights,
Illinois and Stroud Mall in Stroudsburg,
Pennsylvania.
In the Community Center portfolio, the Company
renovated one Community Center, and expanded two
Community Centers in 2001. In 2002 the Company plans
to redevelop a vacant theater location in one
Associated Center and add an Associated Center at one
of the Newly Acquired Malls.
- Developing new retail properties with profitable returns on capital,
leading to growth in the future.
In 2001, the Company opened one Mall, two Mall expansions, one Associated
Center expansion, one Community Center, four Community Center expansions and
one Office Building. Summary information concerning these properties is set
forth below.
Summary Information Concerning Properties
Opened During the Year Ended December 31, 2001
Anchor Non-
Name of Prooperty/ Total GLA Anchor Percentage Opening
Location GLA (1) (2) GLA Leased(3) Date Anchors
- ----------------------------- ------------ ------------ ------------ ------------- ------------ -------------------
MALLS:
The Lakes Mall 553,000 338,000 215,000 83.5% Aug-2001 Sears (4), Yonkers (4)
Muskegon, MI JCPenney (4),
MALL EXPANSIONS:
Meridian Mall 93,000 93,000 0 100% Mar-2001 Border's Books,
Lansing (Okemos), MI Bed Bath & Beyond
Springdale Mall 47,000 47,000 0 89% Sept-2001 Best Buy
Mobile, AL
ASSOCIATED CENTERS
EXPANSIONS:
Gunbarrel Pointe 87,000 87,000 0 100% Mar-2001 Kohl's
Chattanooga, TN
COMMUNITY CENTER:
Creekwood Crossing(5) 404,000 347,000 57,000 100% Apr-2001 Lowe's, Bealls,
Bradenton, FL Kmart
COMMUNITY CENTER
EXPANSIONS:
Coastal Way 25,715 20,515 5,200 100% Nov-2001 Office Max
Springhill, FL
Massard Crossing 10,000 0 10,000 96% Mar-2001 Shops
Ft. Smith, AR
Chesterfield Crossing 15,000 10,000 5,000 100% Dec-2001 Shops
Richmond, VA
Sutton Plaza (5) 5,100 0 5,100 100% Jun-2001 Blockbuster, Subway
Mt. Olive, NJ
Office Building
CBL Center 128,000 72,000 56,000 90% Dec-2001 CBL & Associates
Chattanooga, TN Management, EMJ
--------- --------- ------- Corporation
Total Properties Opened 1,367,815 1,014,515 353,300
========= ========= =======
(1) Gross Leasable Area ("GLA") includes total square footage of
Anchors (whether owned or leased by the Anchor) and Mall
stores or shops.
(2) Includes total square footage of Anchors (whether owned or
leased by the Anchor)
(3) Percentage leased and committed for Malls does not include
Anchor GLA. For the Community Centers, Associated Centers and
power centers, percentage leased and committed includes
non-Anchor GLA and leased Anchor GLA.
11
CBL & Associates Poperties, Inc. - Form 10K
(4) Owned by Anchor.
(5) Sold Center.
The Company had one Mall and one Mall expansion under construction at
December 31, 2001. These properties will add approximately 700,000 square feet
to the Company's portfolio at opening and both all scheduled to open during
2002.
Summary Information Concerning Construction Properties
As of December 31, 2001
Ownership
by Company Percenage
Anchor Non- and Pre-Leased
Name of Center/ Total GLA Anchor Operating and Projected
Location GLA (1) (2) GLA Partnership Committed(3) Opening Anchors
- ------------------------- ----------- ----------- ----------- ------------- -------------- --------------- ---------------
Malls
- -----
Parkway Place 631,000 350,000 281,000 50% 59.2% Oct-2002 Dillard's(4),
Huntsville, AL Parisian(4)
Expansions
- ----------
Meridian Mall 93,000 93,000 -- 100% 100% Fall-2002 Gaylan's
Lansing (Okemos), MI ----------- ----------- ----------
Total Construction
Properties 811,000 509,000 281,000
=========== =========== ==========
( 1)Includes total square footage of Anchors (whether owned or leased by the Anchor).
( 2)Includes total square footage of Anchors (whether owned or leased by the Anchor).
( 3)Percentage pre-leased and committed for Malls does not include Anchor
GLA.
( 4)Owned by Anchor.
In addition to the Construction Properties as of February 28,
2002, the Company was pursuing the development of a number of
sites which the Company believes are viable for future
development as Malls, Associated Centers and Community Centers
Regional Mall development sites were being pursued in Georgia,
Mississippi and South Carolina, an Associated Center site was
being pursued in Texas and Community Center sites were being
pursued in Florida, Connecticut, Massachusetts, Pennsylvania
and Tennessee.
In general, the Company seeks out development opportunities in
middle-market trade areas that it believes are under-serviced
by existing retail facilities, have demonstrated improving
demographic trends or otherwise afford an opportunity for
effective market penetration and competitive presence.
Risks Associated with the Company's Growth Strategy
In connection with the implementation of this growth strategy, the Company
and the Operating Partnership will incur various risks including the risk that
development or expansion opportunities explored by the Company and the Operating
Partnership may be abandoned; the risk that construction costs of a project may
exceed original estimates possibly making the project not profitable; the risk
that the Company and the Operating Partnership may not be able to refinance
construction loans which are generally with full recourse to the Company and the
Operating Partnership; the risk that occupancy rates and rents at a completed
project will not meet projections and will therefore be insufficient to make the
project profitable; and the need for anchor, mortgage lender and property
partner approvals for certain expansion activities. In the event of an
unsuccessful development project, the Company's and the Operating Partnership's
loss could exceed its investment in the project.
The Company has in the past elected not to proceed with certain development
projects and anticipates that it will do so again from time to time in the
future. If the Company elects not to proceed with a development opportunity, the
development costs associated therewith ordinarily will be charged against income
and Funds From Operations for the then-current period. Any such charge could
have a material adverse effect on the Company's results of operations for the
period in which the charge is taken.
12
CBL & Associates Poperties, Inc. - Form 10K
Competition
There are numerous shopping facilities that compete with the Properties in
attracting retailers to lease space. The Malls are generally located in
middle-markets. Management believes that the Malls have strong competitive
positions because they generally are the only or largest enclosed malls within
their respective trade areas. In addition, retailers at the Properties face
continued competition from discount shopping centers, outlet malls, wholesale
clubs, direct mail, telemarketing, television shopping networks and shopping via
the Internet. Competition could adversely affect the Operating Partnership's
revenues and funds available for distributions to partners, which in turn will
affect the Company's revenues and funds available for distribution to
stockholders.
Seasonality
The Company's business is somewhat seasonal in nature with tenant sales
achieving the highest levels during the fourth quarter because of the holiday
season. The Malls earn most of their "temporary" rents (rents from short-term
tenants) during the holiday period. Thus, occupancy levels and revenue
production are generally the highest in the fourth quarter of each year. Results
of operations realized in any one quarter may not be indicative of the results
likely to be experienced over the course of the entire year.
Qualification as a Real Estate Investment Trust
The Company has elected to be taxed as real estate investment trust under
the Code, commencing with its taxable year ended December 31, 1993, and will
seek to maintain such status. As a qualified real estate investment trust, the
Company generally will not be subject to Federal income tax to the extent it
distributes at least 90% of its current year real estate investment trust
taxable income to its shareholders. If the Company fails to qualify as a real
estate investment trust in any taxable year, the Company will be subject to
Federal income tax (including any applicable alternative minimum tax) on its
taxable income at regular corporate rates.
Insurance
The Operating Partnership carries comprehensive liability, fire, extended
coverage (including coverage for acts of terrorism) and rental loss insurance
covering all the Properties, with policy specifications and insured limits
customarily carried for similar properties. Management believes that the
Properties are adequately insured in accordance with industry standards.
ITEM 2. PROPERTIES.
Malls
Each of the Malls is an enclosed regional shopping complex. Each Mall
generally has at least three Anchors which own or lease their stores and
numerous non-anchor stores with GLA less than 30,000 square feet ("Mall
Stores"), most of which are national or regional retailers, located along
enclosed malls connecting the Anchors. At most of the Malls, additional
freestanding restaurants and retail stores are located on the periphery of the
Mall complex. For the purposes of calculating sales per square foot, non-Anchor
stores over 10,000 square feet are excluded but are classified as mall stores
for all other purposes. The freestanding stores are, in most cases, owned by
their occupants. Fifteen of the Mall complexes include one or more Associated
Centers.
The total GLA of the 52 Malls is approximately 41.5 million square feet or
an average GLA of approximately 778,000 square feet per Mall. Mall Store GLA is
14.7 million square feet including leased free-standing buildings at December
31, 2001. The Company wholly owns all but ten of its Malls and manages all but
two of them.
In the years ended December 31, 1999, 2000 and 2001, Mall revenues
represented approximately 76.9%, 77.3% and 84.7%, respectively, of total
revenues from the Company's Properties.
13
CBL & Associates Poperties, Inc. - Form 10K
Occupancy of Mall Stores in the Malls at December 31, 2001, compared with
Occupancy at December 31, 2000 as follows:
2001 2000
---- ----
Stabilized Malls 94.1% 94.5%
New Malls* 89.1% 90.4%
Newly-Acquired Malls 90.4% N/A
* - excluding Parkway Place which is under redevelopment
Mall store sales per square foot decreased for the year ended December 31,
2001 compared with 2000.
Sales per square foot
Percentage
2001 2000 Decrease
------- ------- ----------
Stabilized Malls $284.65 $289.00 (1.5)%
Newely Acquired Malls 313.15 318.16 (1.6)%
Combined Stabilized Malls 297.70 302.3 (1.5)%
Average base rent per square foot at December 31, 2001 and 2000 as follows:
At December 31, Percentage
--------------- Increase
2001 2000 (Decrease)
------- ------- ----------
Stabilized and New Malls $22.49 $21.57 4.3%
Newly Acquired Malls 23.49 -- --
All Malls 22.91 21.57 6.2%
Occupancy costs as a percentage of sales for tenants in the Stabilized
Malls (excluding malls acquired in 1999 from the 1999 calculation) were 11.5%,
11.9% and 11.3% for the years ended December 31, 1999, 2000, and 2001,
respectively.
The Malls are generally located in middle-markets. Management believes that
the Malls have strong competitive positions because they generally are the only,
or the dominant enclosed malls within their respective trade areas. Trade areas
have been identified by management based upon a number of sources of
information, including the location of other malls, publicly available
population information, customer surveys, surveys of customer automobile license
plates, as well as ZIP codes and third-party market studies.
The three largest revenue-producing Malls are Coolsprings Galleria, Hanes
Mall and Hamilton Place Mall. Coolsprings Galleria is located on a 150-acre site
in Nashville, Tennessee and represented, as of December 31, 2001, 2.1% of the
Properties' total GLA, 2.3% of total Mall Store GLA and 3.6% of total revenues
of the Company. Hanes Mall is located on a 112-acre site in Winston-Salem, North
Carolina and represented, as of December 31, 2001, 2.9% of the Properties' total
GLA, 3.4% of total Mall Store GLA and 3.9% of total revenues of the Company.
Hamilton Place Mall is located in on a 187-acre site in Chattanooga, Tennessee
and represented, as of December 31, 2001, 2.2% of the Properties' total GLA,
2.2% of total Mall Store GLA and 3.6% of total revenues of the Company.
Forty-three of the fifty-two Malls have undergone an expansion or
renovation since their opening, and all but six of the existing Stabilized and
New Malls have either been built, renovated or expanded in the last 10 years one
of which, Parkway Place in Huntsville, Alabama has been demolished and is
undergoing redevelopment. During 2001, the Company completed the renovation and
first phase expansion of Meridian Mall in Lansing Michigan, completed a food
court addition at Georgia Square Mall in Athens Georgia and completed an
expansion of Springdale Mall in Mobile, Alabama. During 2001, the Company also
renovated Burnsville Center in Minneapolis (Burnsville), Minnesota and two of
the Newly Acquired Malls; Cary Towne Center in Cary, North Carolina and Fashion
Square in Saginaw, Michigan. In 2002 the Company plans renovations for Columbia
Mall in Columbia, South Carolina; Parkdale Mall in Beaumont, Texas; Hanes Mall
in Winston-Salem, North Carolina; Kentucky Oaks Mall in Paducah, Kentucky; St
Clair Square in Fairview Heights, Illinois; Hickory Hollow Mall in Nashville,
Tennessee; and Stroud Mall in Stroudsburg, Pennsylvania. Four of the Malls have
available Anchor pads providing expansion potential. Forty-eight existing
Anchors at twenty-three Malls have aggregate expansion potential at their
existing stores of approximately 1,532,000 buildable square feet subject in
certain cases to maintaining approved parking ratios and / or approval of
governmental agencies. New department stores opening in 2002 are as follows:
Target at Citadel Mall, Charleston, South Carolina; Belk at College Square,
Morristown, Tennessee; Dillard's at Randolph Mall, Asheboro, North Carolina,
Foley's at Parkdale Mall in Beaumont, Texas and Dillard's at Asheville Mall,
Asheville, North Carolina. All of these new department stores are replacing
previous anchors or anchor vacancies.
The land underlying the Malls is owned in fee simple in all cases, except
for Walnut Square, WestGate Mall, St. Clair Square, Bonita Lakes Mall, Meridian
Mall, Stroud Mall, Wausau Center and Eastgate Mall which are each subject to
long-term ground leases for all or a portion of the land underlying these Malls.
14
CBL & Associates Poperties, Inc. - Form 10K
The following table sets forth certain information for each of the Malls as
of December 31, 2001.
Percen-
Mall tage
Store Mall Fee
Year of Ownership by Total Sales Store Simple
Year of Most Company and Mall per GLA Anchor or
Opening/ Recent Operating Total Store Square Leased Vacan- Ground
Name of Mall/Location Acquisition Expansion Partnership GLA(1) GLA(2) Foot(3) (4) Anchors cies Lease
- ----------------------- ----------- --------- ------------- -------- ---------- ------- ------ ---------------------- ------ ------
NEW MALLS
Arbor Place(5) 1999 N/A 100% 1,035,320 386,380 288 92% Dillard's, Parisian, Yes(14) Fee
Atlanta(Douglasville),GA Sears, Old Navy, Bed
Bath & Beyond,Dekor(14)
Lakes Mall, The(5) 2001 N/A 90% 553,391 214,903 146 84% JCPenney, Sears, None Fee
- Muskegon, MI Younkers, Bed Bath
& Beyond
Parkway City Mall(5) 1957/1998 1974 50% 414,540 187,825 184 N/A Dillard's, Parisian None Fee
- Huntsville, AL
Springdale Mall 1960/1997 2001 100% 970,651 319,936 115 89% Dillard's, McRae's, None Fee
- Mobile, AL Burlington Coat,
Goody's, Staples,
Linens N Things, Best
Buy, Toys "R" Us,
Carmike
---------- --------- ----
Total New Malls 2,973,902 1,109,004 89%
========== ========= ====
STABILIZED MALLS
Asheville Mall 1972/2000 2000 100% 921,430 309,409 299 98% Dillard's, JCPenney, Yes(13) Fee
- Asheville, NC Sears, Belk,
Dillard's (13)
- Asheville, NC
Bonita Lakes Mall(5) 1997 N/A 100% 641,047 184,273 254 99% Goody's, Dillard's, None Ground
- Meridian, MS JCPenney, Sears, Lease
McRae's (6)
Burnsville Center 1977/1998 N/A 100% 1,069,887 398,571 340 95% Mervyn's, Marshall None Fee
- Burnsville, MN Fields, JCPenney,
Sears
College Square(5) 1988 1993 100% 459,473 152,812 212 94% JCPenney, Sears, None Fee
- Morristown, TN Belk(13), Goody's,
Proffitt's
CoolSprings Galleria(5) 1991 1994 100% 1,129,764 372,085 346 100% Hechts, Dillard's, None Fee
- Nashville, TN Sears, JCPenney,
Parisian
Foothills Mall(5) 1983/1996 1997 95% 476,768 180,000 191 82% Sears, JCPenney, None Fee
- Maryville, TN Goody's, Proffitt's
for Women, Proffitt's
for Men/Kids/Home
Frontier Mall(5) 1981 1997 100% 523,004 205,958 215 98% Dillard's I, None Fee
- Cheyenne, WY JCPenney, Dillard's
II, Sears
Georgia Square(5) 1981 N/A 100% 677,906 250,043 241 91% Belk, JCPenney, None Fee
- Athens, GA Macy's, Sears
Governor's Square(5) 1986 1999 48% 690,437 269,436 251 97% JCPenney, Parks-Belk, None Fee
- Clarksville, TN Sears, Dillard's,
Goody's
Hamilton Place(5) 1987 1998 90% 1,166,776 368,399 350 98% Dillard's, Parisian, None Fee
- Chattanooga, TN Proffitt's for Men,
Proffitt's for Ladies,
Sears, JCPenney
Hickory Hollow Mall 1978/1998 1991 100% 1,095,946 416,128 242 92% JCPenney, Sears, None Fee
- Nashville, TN Dillard's, Hechts
15
CBL & Associates Poperties, Inc. - Form 10K
Janesville Mall 1973/1998 1998 100% 609,364 165,886 306 85% JCPenney, Kohl's, None Fee
- Janesville, WI Boston Store, Sears
Lakeshore Mall(5) 1992 1999 100% 501,852 149,114 230 93% Kmart, Belk-Lindsey, None Fee
- Sebring, FL Sears, JCPenney,
Beall's (9)
Madison Square(5) 1984 1985 100% 938,089 299,379 319 97% Dillard's, JCPenney, None Fee
- Huntsville, AL McRae's, Parisian,
Sears
Meridian Mall 1969/1998 1987 100% 919,823 446,858 325 93% JCPenney, Mervyn's, None Fee/
- Lansing, MI Marshall Fields, Ground
Jacobson's Lease
(8)
Oak Hollow Mall(5) 1995 N/A 75% 802,239 249,934 210 90% Goody's, JCPenney, None Fee
- High Point, NC Belk-Beck, Sears,
Dillard's
Pemberton Square(5) 1985 1999 100% 353,514 135,065 161 77% JCPenney, McRae's, None Fee
- Vicksburg, MS Dillard's, Goody's
Plaza del Sol Mall(5) 1979 1996 51% 261,507 105,405 192 99% Beall Bros(9), None Fee
- Del Rio, TX JCPenney, Kmart
Post Oak Mall(5) 1982 1985 100% 776,347 319,454 273 90% Beall Bros.(9), None Fee
- College Station, TX Foley's, Dillard's I,
Dillard's II, Sears,
JCPenney
Rivergate Mall 1971/1998 1998 100% 1,073,970 375,597 300 89% Sears, Dillard's, None Fee
- Nashville, TN JCPenney, Hechts
St. Clair Square 1974/1996 1993 100% 1,049,996 284,234 383 99% Famous Barr, Sears, None Fee/
- Fairview Heights, IL JCPenney, Dillard's Ground
Lease
(10)
Stroud Mall 1977/1998 1994 100% 427,194 150,481 305 99% JCPenney, The Bon-Ton, None Ground
- Stroudsburg, PA Sears Lease
(11)
Turtle Creek Mall(5) 1994 1995 100% 847,535 223,026 309 100% JCPenney, Sears, None Fee
- Hattiesburg, MS Dillard's, McRae's I,
Goody's, McRae's II
Twin Peaks Mall(5) 1985 1997 100% 557,082 242,524 234 92% JCPenney, Dillard's I, None Fee
- Longmont, CO Dillard's II, Sears
Walnut Square(5) 1980 1992 100% 452,407 171,520 224 97% Belk, JCPenney, None Ground
- Dalton, GA Profitt's, Sears, Lease
Goody's (12)
WestGate Mall 1975/1995 1996 100% 1,100,513 267,398 265 95% Belk, JCPenney, None Fee/
- Spartanburg, SC Dillard's, Sears, Bed, Ground
Bath & Beyond, Lease
Proffitt's, Dick's (7)
Sporting Goods
York Galleria 1998/1999 N/A 100% 766,972 229,270 292 93% Boscov's, JCPenney, None Fee
- York, PA Sears, The Bon-Ton
---------- ---------- ------
Total Stabilized Malls 20,290,842 6,922,259 94%
========== ========== ======
NEWLY ACQUIRED MALLS:
Brookfield Square 1967 1997 100% 1,041,327 317,410 438 97% Boston Store, None Fee
- Brookfield, WI Sears, JCPenney
Cary Towne Center 1979 1993 100% 953,214 295,818 380 97% Dillard's, Hecht's, None Fee
- Cary, NC Sears, Belk, JCPenney
16
CBL & Associates Poperties, Inc. - Form 10K
Cherryvale Mall 1973 1989 100% 731,601 297,869 315 86% Bergner's, Marshall None Fee
- Rockford, IL Fields, Sears
Citadel Mall 1981 2000 100% 1,074,823 299,095 259 85% Parisian, Dillard's, Yes(13) Fee
- Charleston, SC Belk, Target(13),
Sears
Columbia Mall 1977 1997 48% 1,113,274 266,271 257 90% Dillard's, JCPenney, None Fee
- Columbia, SC Rich's, Sears
Eastgate Mall 1980 1995 100% 905,372 255,793 269 88% JCPenney, Kohl's, None Ground
- Cincinnati, OH Dillards's, Sears Lease
(15)
East Towne Mall 1971 1997 48% 887,696 292,558 301 96% Boston Store, None Fee
- Madison, WI Younkers, Sears,
JCPenney
Fashion Square 1972 1993 100% 785,645 281,482 301 93% JCPenney, Sears None Fee
- Saginaw, MI
Fayette Mall 1971 1993 100% 1,108,551 307,955 495 99% Lazarus, Dillard's, None Fee
- Lexington, KY JCPenney, Sears
Hanes Mall 1975 1990 100% 1,556,010 547,214 329 93% Dillard's, Belk, None Fee
- Wiston-Salem, NC Hecht's, Sears,
JCPenney
Jefferson Mall 1978 1999 100% 936,285 272,401 287 96% Lazarus, Dillard's, None Fee
- Louisville, KY Sears, JCPenney
Kentucky Oaks Mall 1982 1995 48% 888,845 278,000 256 84% Dillard's, Elder- None Fee
- Paducah, KY Beerman, JCPenney,
Hobby Lobby, Sears,
Service Merchandise
Midland Mall 1991 - 100% 516,127 184,583 245 85% Elder-Beerman, None Fee
- Midland, MI JCPenney, Sears,
Target
Northwoods Mall 1972 1995 100% 832,575 304,536 317 88% Dillard's, Belk, None Fee
- Charleston, SC JCPenney, Sears
Old Hickory Mall 1967 1994 100% 555,281 158,521 304 99% Belk, Rich's, None Fee
- Jackson, TN Sears, JCPenney
Parkdale Mall 1986 1993 100% 1,411,239 460,001 271 82% Dillard's I, Dillard's Yes(13) Fee
- Beaumont, TX II, JCPenney, Foley's
(13), Sears
Randolph Mall 1982 1989 100% 376,214 137,089 195 91% Belk, JCPenney, Yes(13) Fee
- Asheboro, NC Dillard's(13), Sears
Regency Mall 1981 1999 100% 926,257 255,870 257 91% Boston Store, None Fee
- Racine, WI Younkers, JCPenney,
Sears, Target
Towne Mall 1977 - 100% 521,000 153,262 269 70% Elder-Beerman, None Fee
- Franklin, OH Dillard's, Sears
Wausau Center 1983 1999 100% 430,164 154,984 258 95% Younkers, JCPenney, None Ground
- Wausau, WI Sears Lease
(16)
West Towne Mall 1970 1990 48% 1,008,830 259,786 376 98% Boston Store, Sears, None Fee
- Madison, WI JCPenney, Younkers
---------- ---------- ---- ----
Total Newly Acquired Malls 18,560,329 5,780,498 313 90%
========== ========== ==== ====
17
CBL & Associates Poperties, Inc. - Form 10K
( 1) Includes the total square footage of the Anchors (whether owned or leased by the Anchor) and Mall Stores. Does not include
future expansion areas.
( 2) Does not include Anchors.
( 3) Totals represent weighted averages.
( 4) Includes tenants paying rent for executed leases as of December 31, 2001.
( 5) Developed by the Company.
( 6) Company is the lessee under a ground lease for 82 acres which extends through June 30, 2035. The average annual base rent
is $29,239 increasing by 6% per year.
( 7) The Company is the lessee under several ground leases for approximately 53% of the underlying land. The leases extend
through October 31, 2084, including six ten-year renewal options. Rental amount is $130,000 per year. In addition to
base rent, the landlord receives 20% of the percentage rents collected. The Company has a right of first refusal to
purchase the fee.
( 8) The Company is the lessee under several ground leases in effect through March 2067 with extension options. Fixed rent is
$18,700 per year and 3% to 4% of all rents.
( 9) Beall Bros. operating in Texas is unrelated to Beall's operating in Florida.
(10) The Company is the lessee under a ground lease for 20 acres which extends through January 31, 2073, including 14 five-year
renewal options and one four-year renewal option. Rental amount is $40,000 per
year. In addition to base rent, the landlord receives .25% of Dillard's sales in excess of $16,200,000.
(11) The Company is the lessee under a ground lease which extends through July 2089. The current rental amount is $50,000 with
an additional $100,000 paid every 10 years.
(12) The Company is the lessee under several ground leases which extend through March 14, 2078, including six ten-year renewal
options and one eight-year renewal option. Rental amount is $149,450 per year. In addition to base rent, the landlord
receives 20% of the percentage rents collected. The Company has a right of first refusal to purchase the fee.
(13) Replacement Anchor is scheduled to open in 2002.
(14) Vacant but paying rent.
(15) Ground lease is $24,000 per year.
(16) Ground lease is $181,500 per year and 10% of net taxable cash flow.
Anchors. Anchors are a critical factor in a Mall's success because the
public's identification with a property typically focuses on its Anchors. Mall
Anchors generally are department stores whose merchandise appeals to a broad
range of shoppers. Although the Malls derive a smaller percentage of their
operating income from Anchor stores than from Mall Stores, strong Anchors play
an important part in generating customer traffic and making the Malls desirable
locations for Mall Store tenants.
Anchors either own their stores together with the land under them,
sometimes with adjacent parking areas, or enter into long-term leases with
respect to their stores at rental rates that are significantly lower than the
rents charged to tenants of Mall Stores. Anchors account for approximately 6.4%
of the total revenues from the Company's Properties. Each Anchor which owns its
own store has entered into a reciprocal easement agreement with the Company
covering, among other things, operating covenants, reciprocal easements,
property operations, initial construction and future expansions.
The Malls at December 31, 2001 have a total of 226 Anchors and one vacant
Anchor storesat each of the following Malls: Asheville Mall, Citadel Mall,
College Square Mall, Parkdale Mall and Randolph Mall. New department stores are
scheduled to open in 2002 eliminating these vacant anchor stores. One new Anchor
vacancy occurred after December 31, 2001 at Kentucky Oaks Mall. The following
table indicates all Mall Anchors and sets forth the aggregate number of square
feet owned or leased by Anchors in the Malls as of December 31, 2001.
18
CBL & Associates Poperties, Inc. - Form 10K
Mall Anchor Summary Information
As of December 31, 2001
GLA GLA Total
Number Owned Leased Occupied
of Anchor by by by
Name Stores Anchor Anchor Anchor (1)
- ----------------------------------------- ---------------- ---------------- --------------- ------------
JCPenney 46 2,444,137 2,571,789 5,015,926
Sears 47 4,339,235 1,291,550 5,630,785
Dillard's 33 4,214,840 511,759 4,726,599
Sak's
Proffitt's 7 643,082 0 643,082
Boston Store 5 440,249 255,961 696,210
Yonker's 4 400,180 100,564 500,744
McRae's 7 511,359 243,000 754,359
Parisian 7 586,628 209,541 796,169
- --------- ------- ---------
Subtotal 30 2,581,498 809,066 3,390,564
Belk 13 830,089 767,035 1,597,124
The May Company
Foley's 1 103,888 0 103,888
Famous Barr) 1 0 236,489 236,489
Hecht's 5 814,630 0 814,630
- --------- ------- ---------
Subtotal 7 918,518 236,489 1,155,007
Federated Department Stores
Macy's, 1 115,623 0 115,623
Lazarus 2 427,143 0 427,143
Rich's 2 167,174 119,700 286,874
- --------- ------- ---------
Subtotal 5 709,940 119,700 829,640
Goody's 9 0 292,749 292,749
Target, Inc.
Marshall Field's 1 0 147,632 147,632
Target 5 634,554 0 634,554
- --------- ------- ---------
Subtotal 6 634,554 147,632 782,186
The Bon Ton 2 131,915 87,024 218,939
Shopko(2) 1 85,229 0 85,229
Kmart 2 0 173,940 173,940
Mervyn's 2 124,919 74,889 199,808
Boscov's 1 150,000 0 150,000
Burlington Coat 1 0 153,345 153,345
Dekor(3) 1 0 80,000 80,000
Kohl's 2 0 183,591 183,591
Jacobson's 1 0 83,916 83,916
Bed, Bath & Beyond 2 0 73,823 73,823
Old Navy 1 0 37,585 37,585
Bergner's 1 128,330 0 128,330
Elder-Beerman 3 117,888 124,233 242,121
Hobby Lobby 1 0 54,875 54,875
Service Merchandise 2 53,000 63,404 116,404
Beall Bros. (Texas) 2 0 61,916 61,916
Beall's (Florida)
1 0 45,844 45,844
------ ---------- ---------- ----------
Sub-Total 222 17,464,092 8,046,154 25,510,246
Vacant Anchors
Roses 1 0 60,853 60,853
JCPenney (Citadel) 1 121,590 0 121,590
Wal*Mart 1 0 112,541 112,541
Montgomery Ward 2 164,271 92,484 256,755
------ ---------- ---------- ----------
TOTAL 227 17,749,953 8,312,032 26,061,985
====== ========== ========== ==========
(1) Includes all square footage owned by or leased to such Anchor including
tire, battery and automotive facilities and storage square footage.
(2) Anchor vacated after December 31, 2001.
(3) Vacant but paying rent.
Mall Stores. The Malls have approximately 7,706 Mall Stores. National or
regional chains (excluding individually franchised stores) lease approximately
86.7% of the occupied Mall Store GLA. Although Mall Stores occupy only 29.6% of
total Mall GLA, the Malls derived approximately 89.4% of their revenue from Mall
Stores for the year ended December 31, 2001.
Among the companies with the largest representation among Mall Stores are:
The Limited, Inc./Intimate Brands, Inc. stores (The Limited, Limited Too,
Express, Lerner New York, Structure, Victoria's Secret, and Bath and Body
Works); The Gap. Inc. (The Gap, Old Navy, Banana Republic and Gap Kids ) and
Footlocker, Inc. (Footlocker, Lady Footlocker, Kids Footlocker and Champs Sports
Stores). As of December 31, 2001, The Limited, Inc.'s and Intimate Brands,
Inc.'s 189 stores accounted for 6.9% of total mall leased GLA and 6.4% of the
Company's total revenues. As of December 31, 2001, The Gap. Inc.'s 67 stores
accounted for 5.0% of total mall leased GLA and 2.7% of the Company's total
19
CBL & Associates Poperties, Inc. - Form 10K
revenues As of December 31, 2001 Footlocker, Inc. accounted for 3.2% of
total mall leased GLA and 2.6% of the Company's total revenues. Other than The
Limited which accounted for 6.9% of Mall Store GLA and 6.4% of total revenues no
single Mall Store retailer accounted for more than 5.0% of total Mall Store
leased GLA and no single Mall Store retailer accounted for more than 2.7% of
total revenues from the Company's Properties. As of December 31, 2001,
The following table sets forth certain information for executed renewal
leases with current tenants or leases of previously occupied space with new
tenants at the Malls during the year ended December 31, 2001.
Prior Lease New Lease Increase Increase
Total Base and Initial Year per New Lease Per
Number Square Percentage Rent Base Rent Square Average Square
of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
------------ ----------- ---------------- ----------------- ---------- ----------- -----------
539 1,155,000 $24.10 $25.75 $1.65 $26.52 $2.42
The following table sets forth the total Mall Store GLA, the total square
footage of leased Mall Store GLA, the percentage of Mall Store GLA leased, the
average base rent per square foot of Mall Store GLA and average Mall Store sales
per square foot as of the end of each of the past five years.
Mall Store Summary Information
Total Percentage Average Average Mall
Total Mall Store of Mall Store Base Rent Store Sales
At Mall Store Leased GLA per Square per Square
December 31, GLA GLA Leased (1) Foot (2) Foot (3)
- ------------------- -------------- ------------ ---------------- ------------- --------------
1997 3,503,490 3,214,176 91.7 $18.98 $263
1998 7,166,498 6,707,283 93.6 19.82 273
1999 7,429,503 6,956,451 93.6 20.68 285
2000(4) 7,558,160 7,110,705 94.1 21.57 302
2001(4) 13,723,000 12,653,000 92.2 22.91 297
(1) Mall Store occupancy includes tenants with executed leases who are paying
rent.
(2) Average base rent per square foot is based on Mall Store GLA occupied as of
the last day of the indicated period for the preceding twelve-month period.
(3) Calculated for the preceding twelve-month period. The calculation of sales
per square foot for 2000 and 2001 excludes all stores over 10,000 square
feet. Sales per square foot in prior years exclude stores over 20,000
square feet.
(4) Excludes Parkway Place GLA.
Lease Expirations. The following table shows the scheduled lease
expirations for Mall Stores in occupancy at December 31, 2001 in the Malls
(assuming that none of the tenants exercise renewal options) for the next ten
years.
Mall Lease Expiration
Percentage of Total
------------------------------
Represented by
Expiring Leases
Approximate
Annualized Base Mall Store
Number of Rent of GLA of Base Rent
Year Ending Leases Expiring Expiring per Square Annualized Leased Mall
December 31, Expiring Leases (1) Leases Foot Base Rent Store GLA
- ------------------ ------------- ---------------- -------------- ----------- ------------- ---------------
2002 282 $11,428,000 633,000 $18.04 4.7% 4.9%
2003 382 19,662,000 1,129,000 17.41 8.6% 8.8%
2004 392 21,667,000 966,000 19.52 9.5% 7.5%
2005 415 25,134,000 1,130,000 23.16 11.0% 8.8%
2006 390 22,153,000 960,000 20.82 9.7% 7.5%
2007 408 24,857,000 1,532,000 20.02 10.9% 11.9%
2008 307 20,215,000 1,038,000 19.88 8.8% 8.1%
2009 306 20,437,000 886,000 21.42 8.9% 6.9%
2010 294 20,150,000 842,000 24.99 8.8% 6.6%
2011 316 25,249,000 1,032,000 22.84 11.1% 8.0%
(1) Total annualized base rent for all leases executed as of December 31, 2001
includes rent for space that is leased but not yet occupied but excludes (i)
percentage rents, (ii) additional payments by tenants for common area
maintenance, real estate taxes and other expense reimbursements and (iii)
contractual rent escalations and cost of living increases due after December
31, 2001.
20
CBL & Associates Poperties, Inc. - Form 10K
Cost of Occupancy. Management believes that in order to maximize the
Company's Funds from Operations, tenants in Mall Stores must be able to operate
profitably. A major factor contributing to tenant profitability is the tenant's
cost of occupancy.
The following table summarizes for Stabilized Mall and Newly Acquired Mall
Store tenants the occupancy costs under their leases as a percentage of total
Mall Store sales for the last three years.
For the Year Ended
December 31, (1)
-----------------------------------
2001 2000 1999
----------- ---------- ----------
Mall Store sales (in millions)(2) $2,821.4 $1,487.1 $1,426.3
Minimum rents 8.0% 7.9% 7.8%
Percentage rents 0.3 0.5 0.4
Expense recoveries (3) 3.0 3.5 3.3
----------- ---------- ----------
Mall tenant occupancy costs 11.3% 11.9% 11.5%
----------- ---------- ----------
(1) Excludes Malls not owned or open for full reporting period except for
2001 which includes results from the Newly Acquired Malls.
(2) Consistent with industry practice, sales are based on reports by
retailers (excluding theaters) leasing Mall Store GLA of 10,000 square
feet and less and occupying space for the reporting period. Represents
100% of sales for these Malls. In certain cases, the Company and the
Operating Partnership owns less than 100% interest in these Malls.
(3) Represents real estate tax and common area maintenance charges.
At December 31, 2001, the Company had investments in seven malls and two
associated centers in joint ventures with third parties, all of which are
reflected using the equity method of accounting. Condensed combined results of
operations for the seven- unconsolidated affiliates are presented in the
following table (in thousands).
Total for the Year Ended Company's Share for the year
December 31, Ended December 31,
--------------------------------- ---------------------------------
2001 2000 2001 2000
---------------- ---------------- ---------------- ----------------
Revenues $ 55,779 $ 27,294 $ 26,847 $ 13,436
================ ================ ================ ================
Depreciation and Amortization 7,707 3,080 3,709 1,510
Interest Expense 14,619 8,255 7,028 4,134
Other operating expenses 18,325 8,397 8,836 4,203
---------------- ---------------- ---------------- ----------------
Income from operations 15,128 7,562 7,274 3,589
Gain on Sales 213 186 101 95
---------------- ---------------- ---------------- ----------------
Net Income $ 15,341 $ 7,748 $ 7,375 $ 3,684
================ ================ ================ ================
Associated Centers
The eighteen Associated Centers are each part of a Mall complex and
generally have one or two Anchor tenants and various smaller tenants. Anchor
tenants in these centers include such retailers as Books-A-Million, Target, Toys
"R" Us, TJ Maxx, and Goody's, which are category dominant retailers that benefit
from the regional draw of the Malls. The Associated Centers also increase the
draw to the total Mall complex.
Total leasable GLA of the eighteen Associated Centers is approximately 3.2
million square feet, including Anchors, or an average of approximately 178,000
square feet per center. As of December 31, 2001, 95.6% of total leasable GLA at
the Associated Centers was occupied. During 2001 the Company completed the
expansion of one Associated Center in Chattanooga, Tennessee.
In the years ended December 31, 1999, 2000, and 2001, revenues from the
Associated Centers represented approximately 3.7%, 4.1 and 2.6%, respectively,
of total revenues from the Company's Properties.
In the years ended December 31, 1999, 2000 and 2001, average tenant sales
per square foot at the Associated Centers were approximately $184, $185 and
$198, respectively.
Average base rent per square foot at the Associated Centers decreased from
$9.88 at December 31, 2000 to $9.73 at December 31, 2001.
21
CBL & Associates Poperties, Inc. - Form 10K
Each of the Associated Centers was developed by the Company, except for the
following which were acquired: WestGate Crossing (1997); Village at Rivergate
(1998); Courtyard at Hickory Hollow (1998); Eastgate Crossing (2001); and West
Towne Crossing (2001). All of the land underlying the Associated Centers is
owned in fee simple except for Bonita Crossing.
Lease Expirations. The following table shows the scheduled lease
expirations for tenants in occupancy at December 31, 2001 in the Associated
Centers (assuming that none of the tenants exercise renewal options) for the
next ten years.
Associated Center Lease Expiration
Percentage of Total
Represented by
Expiring Leases
-------------------------------
Approximate
Number of Annualized Base GLA of Base Rent
Year Ending Leases Rent of Expiring Expiring Per Annualized Associated
December 31, Expiring Leases (1) Leases Square Foot Base Rent Center GLA
- ----------------- ----------- ----------------- ------------- ------------- --------------- --------------
2002 23 $918,000 64,000 $14.25 7.0% 4.5%
2003 29 1,361,000 135,000 10.06 10.4% 9.5%
2004 24 1,231,000 173,000 7.12 9.4% 12.1%
2005 32 1,873,000 201,000 9.34 14.3% 14.1%
2006 15 789,000 64,000 12.24 6.0% 4.5%
2007 7 285,000 45,000 6.41 2.2% 3.1%
2008 2 227,000 14,000 16.25 1.7% 1.0%
2009 11 1,543,000 114,000 13.54 11.8% 8.0%
2010 3 665,000 55,000 12.12 5.1% 3.8%
2011 2 887,000 113,000 7.83 6.8% 7.9%
(1) Total annualized base rent for all leases executed as of December 31,
2001 includes 12 months of rent for space that is newly leased but not
yet occupied and base rent on ground leases with no square footage but
excludes (i) percentage rents, (ii) additional payments by tenants for
common area maintenance, real estate taxes and other expense
reimbursements and (iii) contractual rent escalations and cost of
living increases due after December 31, 2001.
The following table sets forth certain information for executed renewal
leases with current tenants or leases of previously occupied space with new
tenants at the Associated Centers during the year ended December 31, 2001.
Prior Lease New Lease Decrease Decrease
Total Base and Initial Year Per New Lease Per
Number Square Percentage Rent Base Rent Square Average Square
Of Leases Feet Per Square Foot per Square Foot Foot Base Rent Foot
- --------------- ----------- ---------------- ------------------ ----------- ------------ -----------
25 87,706 $13.44 $10.59 ($2.85) $10.98 ($2.46)
22
CBL & Associates Poperties, Inc. - Form 10K
The following table sets forth certain information for each of the
Associated Centers as of December 31, 2001.
Year of Ownership by Percentage
Opening/Most Company and Total GLA Fee or
Name of Associated Recent Operating Total Leasable Leased Ground
Center/Location Expansion Partnership GLA(1) GLA(2) (3) Anchors Lease
- ------------------------ ------------- -------------- ---------- ----------- ----------- ------------------------ -------
Bonita Crossing(10) 1997/1999 100% 122,150 122,150 89% Books-A-Million, TJ Ground
Meridian, MS Maxx, Office Max, The Lease
Gap
CoolSprings Crossing 1992 100% 371,473 40,630 100% Target(7) Service Fee
Nashville, TN Merchandise(7), Toys "R"
Us(7), Vacant(7),
Lifeway Books
Courtyard at Hickory 1979(9) 100% 77,560 77,560 97% Carmike Cinemas, Just Fee
Hollow Nashville, TN For Feet
Foothills Plaza 1983/1986 100% 191,216(4) 71,216 100% Eckerd(6), Sweetwater Fee
Maryville, TN Salvage Surplus,Carmike
Cinemas
Frontier Square 1985 100% 161,615 16,527 100% Albertson's(7), Fee
Cheyenne, WY Target(7)
Georgia Square Plaza 1984 100% 15,393 15,393 N/A Fee
Athens, GA
Governor's Square Plaza 1985(5) 49% 180,018 57,820 100% Office Max, Premier Fee
Clarksville, TN Medical Group, Target
Gunbarrel Pointe 2000 100% 281,525 155,525 100% Kohl's, Target, Fee
Chattanooga, TN Goody's
Hamilton Corner 1990 90% 88,298 88,298 99% Michael's, Appliance Fee
Chattanooga, TN Factory Warehouse, Fresh
Market
Hamilton Crossing 1987/1994 92% 185,370 92,257 96% Service Merchandise(7) Fee
Chattanooga, TN Toys "R" Us(7), TJ Maxx
The Landing 1999 100% 163,194 85,337 82% Toys "R" Us(7), Circuit Fee
Atlanta City(7), Michael's
(Douglasville),GA
Madison Plaza 1984 100% 153,085 98,690 98% Bruno's, TJ Maxx, Fee
Huntsville, AL Service Merchandise(7)
Pemberton Plaza 1986 100% 77,893 26,947 91% Kroger, Blockbuster Fee
Vicksburg, MS
The Terrace 1997 92% 155,987 116,715 100% Barnes & Noble, Linens Fee
Chattanooga, TN "N Things, Old Navy,
Staples, Circuit City(7)
Village at Rivergate 1981(9) 100% 166,366 66,366 98% Target(7), Just For Fee
Nashville, TN Feet
WestGate Crossing 1985/1999(8) 100% 157,247 157,247 95% Goody's, Toys "R" Us, Fee
Spartanburg, SC Old Navy
---------- ----------- -----------
Total Core Associated Centers 2,548,390 1,288,678 96%
NEWLY ACQUIRED
ASSOCIATED CENTERS:
Eastgate Crossing 1991 100% 195,112 195,112 99% Kroger, Circuit City Fee
Cincinnati, OH (7)
West Towne Crossing 1980 48% 230,993 131,583 100% Barnes & Noble, Best Fee
Madison, WI Buy, Kohls
---------- ----------- -----------
Total Newly Acquired Associated Centers 426,105 326,695 100%
========== =========== ===========
Total All Associated Centers Total 2,974,495 1,615,373 96%
========== =========== ===========
23
CBL & Associates Poperties, Inc. - Form 10K
(1) Includes the total square footage of the Anchors (whether owned or leased by
the Anchor) and shops. Does not include future expansion areas.
(2) Includes leasable Anchors.
(3) Includes tenants with executed leases at December 31, 2001. Calculation
includes leased Anchors.
(4) Total GLA includes, but total leasable GLA and percentage GLA leased exclude
a furniture store of 80,000 square feet owned by others and a Carmike Cinema
which is subject to a ground lease (40,000 square feet of GLA).
(5) Originally opened in 1985, and was acquired by the Company in June 1997.
(6) Eckerd has closed its store but is continuing to meet its financial
obligations under its lease and is subleased to Dollar General.
(7) Owned by tenant.
(8) Originally opened in 1985, and was acquired by the Company in August 1997.
(9) Acquired by the Company in July 1998.
(10)The land is ground leased through June 2015 with options to extend through
June 2035. The annual rent is $14,355 increasing by 6% each year.
Community and Power Centers
In addition to Mall development, the Company's development activities focus
on Community Centers, and power centers. Community Centers pose fewer
development risks than Malls because they have shorter development timetables
and lower up-front costs. Community Centers also afford the Company the
opportunity to meet the needs of retailers for whom a "convenience" type of
location is more appropriate and the needs of customers whose trade areas cannot
support a regional mall. Power centers are larger than other Community Centers,
with several large anchor stores which draw shoppers from a wider geographic
area.
The Company's Community Center developments in the 1980's were generally
anchored by supermarkets, and, in certain cases, by drug stores. Management's
current focus has expanded to include the development of larger centers,
anchored by mass merchandisers and department stores, while continuing the
development of smaller centers anchored by supermarkets and drug stores. During
2001, the Company opened the 404,000 Creekwood Crossing in Bradenton, Florida
and completed expansions at Coastal Way in Springhill, Florida; Massard Crossing
in Ft. Smith, Arkansas; Sutton Plaza in Mt. Olive, New Jersey; and Chesterfield
Crossing in Richmond, Virginia. During 2001, the Company sold six Community
Centers for total proceeds of $78.2 million. The proceeds were used primarily to
retire debt. The Company also sold one Community Center in January 2001.
Community Centers, other than power centers, range in size from 25,000
square feet to in excess of 420,000 square feet. Anchors in Community Centers
generally lease their store space and occupy 60-85% of a center's GLA. The
number of stores in a Community Center ranges from one to seventeen with an
average of nine stores per center.
The Company's two power centers, which were completed and opened in 1997
and 1998, average 786,000 square feet and have an average of nine major anchor
stores and additional small shop space ranging from 38,000 square feet to
136,000 square feet. These power centers are included in the Community Center
classification in this report.
Total GLA of the 68 Community Centers is approximately 8.5 million square
feet, or an average of approximately 125,000 square feet per center. Excluding
power centers the average is 105,000 square feet per center. As of December 31,
2001, 97.0% of total leasable GLA at the Community Centers was leased.
In the years ended December 31, 1999, 2000 and 2001, revenues from the
Community Centers represented approximately 17.8%, 17.5 and 11.7%, respectively,
of total revenues from the Company's Properties.
Occupancy at the Community Centers decreased from 97.8% at December 31,
2000 to 97.0% at December 31, 2001.
Average base rent per square foot at the Community Centers increased from
$8.85 at December 31, 2000, to $9.43 at December 31, 2001.
As of December 31, 2001, Food Lion, a major regional supermarket operator
with headquarters in North Carolina served as an anchor tenant in 25 of the
Company's Community Centers. For the year ended December 31, 2001, Food Lion
accounted for approximately 1.1% of the revenues generated by the Company's
Properties.
With the exception of Suburban Plaza, Lions Head Village, MarketPlace at
Flower Mound and Willowbrook Plaza , which were acquired by the Company in March
1995, July 1998, March 2000 and February 2001, respectively, each of the
Community Centers was developed by the Company.
24
CBL & Associates Poperties, Inc. - Form 10K
The following table summarizes the percentage of GLA leased, average base
rent per square foot (excluding percentage rent) and tenant sales per square
foot at the Community Centers for each of the last five years.
Community Center Summary Information
Average
Percentage Base Rent Tenant
Year Ended GLA Per Square Sales Per
December 31, Leased (1) Foot (2) Square Foot (3)
- ----------------- ------------- ------------ ----------------
1997 97.6% $7.42 $221
1998 97.0% 8.22 220
1999 97.7% 8.32 214
2000 97.8% 8.85 213
2001 97.0% 9.43 190
(1) Percentage leased includes tenants who have executed leases and are
paying rent as of the specified date.
(2) Average base rent per square foot is based on GLA occupied as of the
last day of the indicated period.
(3) Consistent with industry practice, sales are based on reports by
retailers (excluding theaters) leasing GLA and occupying space for
the 12 months ending on the last day of the indicated period.
Lease Expirations. The following table shows the scheduled lease
expirations for tenants in occupancy at December 31, 2001 in the Community
Centers (assuming that none of the tenants exercise renewal options) for the
next ten years. Community Center Lease Expiration
Community Center Lease Expiration
Percentage of Total
Represented by
Expiring Leases
Annualized Base Approximate -------------------------------
Number of Rent of GLA of Base Rent
Year Ending Leases Expiring Expiring Per Annualized Leased
December 31, Expiring Leases (1) Leases Square Foot Base Rent GLA
- ---------------- ----------- --------------- ----------- ------------ -------------- --------------
2002 79 $2,466,000 376,000 $6.56 5.2% 7.4%
2003 123 4,095,000 473,000 8.66 8.7% 9.2%
2004 118 3,364,000 344,000 9.78 7.1% 6.7%
2005 102 4,218,000 394,000 10.70 9.0% 7.7%
2006 62 3,209,000 376,000 8.53 6.8% 7.4%
2007 49 2,094,000 232,000 9.03 4.4% 4.5%
2008 23 2,530,000 239,000 10.60 5.4% 4.7%
2009 22 3,621,000 387,000 9.36 7.7% 7.6%
2010 23 2,101,000 211,000 9.49 4.5% 4.3%
2011 14 1,420,000 149,000 9.53 3.0% 2.9%
(1) Total annualized base rent for all leases executed as of December 31,
2001 includes 12 months of rent for space that is newly leased but not
yet occupied and base rent on ground leases with no square footage but
excludes (i) percentage rents, (ii) additional payments by tenants for
common area maintenance, real estate taxes and other expense
reimbursements and (iii) contractual rent escalations and cost of
living increases for periods after December 31, 2001.
The following table sets forth certain information for executed renewal
leases with current tenants or leases of previously occupied space with new
tenants at the Community Centers during the year ended December 1, 2001.
Prior Lease New Lease
Total Base and Initial Year Increase New Lease Increase
Number Square Percentage Rent Base Rent per Square Average per Square
Of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
- --------------- ----------- ----------------- ----------------- ------------ ----------- ------------
163 360,281 $10.95 $11.59 $0.64 $11.69 $0.74
25
CBL & Associates Poperties, Inc. - Form 10K
The following table sets forth certain information for each of the
Company's Community Centers at December 31, 2001.
Year of Ownership by Square
Opening/ Company and Total Percentage Feet of Fee or
Name of Community Most Recent Operating Total Leasable GLA Anchor Ground
Center/Location Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease
- ------------------------ ----------- ------------- ----------- ----------- ----------- ----------------------- ----------- -------
Anderson Plaza 1983/1994 100% 46,258 46,258 100% Food Lion, Eckerd(7) 8,640 Fee
Greenwood, SC
Bartow Village 1990 100% 40,520 40,520 100% Food Lion(7), Family None Fee
Bartow, FL Dollar
Beach Crossing 1984 100% 45,790 45,790 88% Food Lion(4), CVS None Fee
Myrtle Beach, SC
BJ's Plaza 1991 100% 104,233 104,233 100% BJ's Wholesale Club None Ground
Portland, ME Lease(5)
Briarcliff Square 1989 100% 41,778 41,778 90% Food Lion None Fee
Oak Ridge, TN
Buena Vista Plaza 1989/1997 100% 151,320 17,500 85% Wal*Mart, Winn Dixie None Fee
Columbus, GA
Bulloch Plaza 1986 100% 39,264 39,264 100% Food Lion None Fee
Statesboro, GA
Capital Crossing 1995 100% 81,110 81,110 100% Lowe's Food, Staples None Fee
Raleigh, NC
Cedar Bluff Crossing 1987/1996 100% 53,050 53,050 100% Food Lion None Fee
Knoxville, TN
Cedar Plaza 1988 100% 50,000 50,000 97% Tractor Supply Company None Fee
Cedar Springs, MI
Chester Square 1997 100% 64,844 10,000 60% Kroger None Fee
Richmond, VA
Chesterfield Crossing 2001 100% 420,986 68,894 100% Home Depot, Wal*Mart None Fee
Richmond, VA
Chestnut Hills 1982 100% 68,364 68,364 93% JCPenney None Fee
Murray, KY
Coastal Way 2001 100% 191,230 170,715 100% Belk, Sears None Fee
Spring Hill, FL
Colleton Square 1986 100% 31,000 31,000 90% Food Lion(4) None Fee
Walterboro, SC
Collins Park Commons 1989 100% 37,458 37,458 94% Tractor Supply Co. None Ground
Plant City, FL Lease(6)
Conway Plaza 1985 100% 33,000 33,000 92% Food Lion(7) 21,000 Ground
Conway, SC Lease(8)
Cosby Station 1994/1995 100% 77,811 77,811 89% Publix None Fee
Douglasville, GA
26
CBL & Associates Poperties, Inc. - Form 10K
Cortlandt Towne Center 1997/1998 100% 763,260 628,891 100% Marshalls, Wal*Mart, None Fee
Cortlandt, NY Home Depot, A & P Food
Store, Seaman
Furniture, Barnes &
Noble, Office Max,
PetsMart, Linens 'N
Things
County Park Plaza 1982 100% 60,750 60,750 100% Bi-Lo None Fee
Scottsboro, AL
Devonshire Place 1996 100% 104,414 104,414 100% Lowe's Food, W A Home None Ground
Cary, NC Furnishings, Borders Lease(9)
Books
East Ridge Crossing 1988 100% 58,950 58,950 100% Food Lion None Fee
Chattanooga, TN
East Towne Crossing 1989/1990 100% 175,667 76,197 61% Home Depot, 29,911 Fee
Knoxville, TN Food Lion
58 Crossing 1988 100% 49,984 49,984 100% Food Lion, CVS(7) None Fee
Chattanooga, TN
Garden City Plaza 1984/1991 100% 188,446 76,246 100% Wal*Mart, JCPenney None Fee
Garden City, KS
Girvin Plaza 1990 100% 78,419 31,997 97% Winn Dixie None Fee
Jacksonville, FL
Greenport Towne Centre 1994 100% 191,622 75,525 100% Wal*Mart, None Fee
Hudson, NY Price-Chopper
Hampton Plaza 1990 100% 44,420 44,420 100% Food Lion(4) None Fee
Tampa, FL
Henderson Square 1995 100% 268,327 162,329 99% JCPenney, Belk, None Fee
Henderson, NC Leggett, Goody's,
Wal*Mart
Jasper Square 1986/1990 100% 95,950 50,584 97% Lowe's, Goody's None Fee
Jasper, AL
Keystone Crossing 1989 100% 40,400 40,400 100% Food Lion(7) None Fee
Tampa, FL
Kingston Overlook 1996/1997 100% 119,350 119,350 100% Babies "R" Us, None Fee/
Knoxville, TN Michael's Ground
Lease
(10)
Lady's Island 1983/1993 100% 60,687 60,687 96% Winn Dixie, Eckerd None Fee
Beaufort, SC
LaGrange Commons 1996 100% 59,340 59,340 100% A & P Food Store None Fee
LaGrange, NY
Lions Head Village 1980(18) 100% 99,165 99,165 92% Steinmart, Office Max None Fee
Nashville, TN
Longview Crossing 2000 100% 40,598 40,598 100% Food Lion None Ground
Hickory, NC Lease
(11)
27
CBL & Associates Poperties, Inc. - Form 10K
Lunenburg Crossing 1994 100% 198,115 25,515 100% Wal*Mart, Shop'n Save None Fee
Lunenburg, MA
Marketplace at Flower 1999 100% 113,466 113,466 85% Winn Dixie None Fee
Mound(19)
Flower Mound, TX
Massard Crossing(19) 2001 100% 296,617 98,410 96% Wal*Mart, TJ Maxx, None Fee
Ft. Smith, AR Goody's, Cato
North Creek Plaza 1983 100% 28,500 28,500 100% Food Lion None Fee
Greenwood, SC
North Haven Crossing 1993 100% 104,612 104,612 100% Sports Authority, None Fee
North Haven, CT Office Max, Barnes &
Noble
Northridge Plaza 1984/1988 100% 129,570 79,570 91% Home Goods, Eckerd(4), 35,922 Fee
Hilton Head, SC P.B. Realty
Northwoods Plaza 1983/1992 100% 32,705 32,705 100% Food Lion None Fee
Albemarle, NC
Oaks Crossing 1990/1993 100% 119,674 27,300 100% Wal*Mart, Buck's None Fee
Otsego, MI Variety
Orange Plaza 1983 100% 46,775 46,775 100% Food World (12), None Fee
Roanoke, VA Dollar General
Perimeter Place 1985/1988 100% 156,945 54,525 98% Home Depot, Fred's(7) 22,500 Fee
Chattanooga, TN
Rawlinson Place 1987 100% 35,750 35,750 94% Food Lion(7) 25,000 Fee
Rock Hills, SC
Rhett at Remount 1983/1994 100% 42,628 42,628 100% Food Lion, Eckerd(7) 8,640 Fee
Charleston, SC (19)
Salem Crossing 1997 100% 289,335 92,407 100% Kroger, Wal*Mart None Fee
Virginia Beach, VA
Sattler Square 1989 100% 94,760 94,760 98% Quality Stores, Perry None Fee
Big Rapids, MI Drug
Seacoast Shopping 1991 100% 208,690 91,690 98% Wal*Mart, Shaw's None Fee
Center Seabrook, NH Supermarket
Shenandoah Crossing 1988 100% 28,600 28,600 100% Food Lion(7) 25,000 Fee
Roanoke, VA
Signal Hills Village 1987/1989 100% 24,100 24,100 100% --- None(13) Ground
Statesville, NC Lease
(14)
Southgate Crossing 1985 100% 40,100 40,100 85% Food Lion(7) 25,000 Ground
Bristol, TN Lease
(15)
28
CBL & Associates Poperties, Inc. - Form 10K
Springhurst Towne 1997 100% 812,247 416,497 99% Cinemark, Kohl's, 15,000 Fee
Louisville, KY Books A Million, Party
Source, TJ Maxx,
Meijer, Dress Barn,
Target, Fashion Shop,
Office Max, Dick's
Sporting Goods
Springs Crossing 1987/1996 100% 42,920 42,920 100% Food Lion, Kerr Drugs None Ground
Hickory, NC Lease
(16)
Statesboro Square 1986 100% 41,000 41,000 100% Food Lion(4), Rentown 25,000 Fee
Statesboro, GA
Stone East Plaza 1983 100% 45,259 45,259 96% Food Lion(4) None Fee
Kingsport, TN
Strawbridge Market 1997 100% 43,764 43,764 100% Regal Cinema None Fee
Place
Virginia Beach, VA
Suburban Plaza 1995 100% 128,647 126,047 96% Toys "R" Us, Barnes & None Fee
Knoxville, TN Noble
34th St. Crossing 1989 100% 51,120 51,120 100% Food Lion(7), Family None Fee
St. Petersburg, FL Dollar
Uvalde Plaza 1987/1992 75% 111,160 34,000 100% Wal*Mart, Beall's None Fee
Uvalde, TX
Valley Commons 1988/1994 100% 45,580 45,580 100% Food Lion None Fee
Salem, VA
Valley Crossing 1988/1991 100% 186,077 186,077 100% Goody's, TJ Maxx, None Fee
Hickory, NC Office Depot, Rack Room
Shoes, Circuit City,
Factory Card Outlet
The Village at Wexford 1990 100% 72,450 72,450 100% Tractor Supply None Fee
Cadillac, MI Company(17)
Village Square 1990/1993 100% 122,294 27,050 100% Wal*Mart, Fashion Bug None Fee
Houghton Lake, MI
Willowbrook Plaza 1999 100% 361,072 291,515 90% Home Depot, Linens 'N None Fee
Houston, TX Things, AMC Theatre
Willow Springs Plaza 1991/1994 100% 224,910 130,753 100% Home Depot, Office None Fee
Nashua, NH Max, JCPenney Home
----------- ----------- -----------
Total Community Centers 8,357,207 5,472,017 94%
=========== =========== ===========
29
CBL & Associates Poperties, Inc. - Form 10K
(1) Includes the total square footage of the Anchors (whether owned by others or leased by the Anchor) and shops. Does not
include future expansion areas.
(2) Includes leasable Anchors.
(3) Includes tenants paying rent on executed leases on December 31, 2001. Calculation includes leased Anchors.
(4) Tenant has closed its store but is continuing to meet its financial obligation and is sub-leasing the space.
(5) Ground Lease term extends to 2051 including four 10-year extensions. Lessee has an option to purchase and a right of first
refusal to purchase the fee.
(6) Ground Lease term extends to 2049 including three 10-year extensions. Lessor receives a share of percentage rents during
initial term and extensions. Lessee has an option to purchase and a right of first refusal to purchase the fee.
(7) Represents a tenant which has closed its store but is continuing to meet its financial obligations under its lease.
The vacancy at Keystone Crossing occurred after December 31, 2001.
(8) Ground Lease term extends to 2055 including two 20-year extensions. During extension periods, lessor receives a share of
percentage rents. Lessee has a right of first refusal to purchase the fee. Lessor receives a share of sale proceeds upon sale
of the center to a third party only if sale occurs while fee is subordinated to a mortgage.
(9) Ground lease extends to 2076 including 12 five year options. Lessor receives no additional rent.
(10) Ground lease for an out-parcel extends to 2046 including 4 ten year options. Lessor receives 20% of percentage rentals.
(11) Ground Lease term extends to 2049 including three 10-year extensions. Lessor receives a share of percentage rents during
initial term and extensions. Lessee has a right of first refusal to purchase the fee.
(12) Represents a Food World which has closed its store but is continuing to meet its financial obligations under its lease and
is sub-leasing the space.
(13) Signal Hills Village is part of Signal Hills Crossing, a Property on which the Company holds a Mortgage.
(14) Ground Lease term extends to 2084. Rent for entire term has been prepaid. Lessee has an option to purchase the fee under
certain circumstances.
(15) Ground Lease term extends to 2055 including one 20-year extension. Commencing in 2005, rental will be the greater of base
rent or a share of the revenue from the center. Lessee has a right of first refusal to purchase the fee.
(16) Ground Lease term extends to 2048 including three 10-year extensions. Lessor receives a share of percentage rents during
initial term and extensions. Lessee has a right of first refusal to purchase the fee.
(17) Tractor Supply Company has an option to purchase its 56,850 square foot store commencing in 1996 for a price based upon
capitalizing minimum annual rent being paid at the time of exercise at a rate of 8.33%.
(18) Lionshead opened in 1980 and was acquired by the Company in July 1998 and was expanded in 2000.
(19) Sold in January 2002.
Mortgages
The Company owns six Mortgages which were granted prior to the Offering and
two granted since in connection with sales by CBL of properties which it had
previously developed.
The Company holds fee mortgages on eight community centers, which mortgages
had, as of December 31, 2001, an aggregate outstanding principal balance of $8.1
million. Such mortgages entitle the Company to receive substantially all of such
properties' current cash flow in the form of periodic debt service payments. The
encumbered properties all opened between 1981 and 1990 and have two Anchor
vacancies.
In the years ended December 31, 1999, 2000, and 2001, revenues from the
Mortgages represented less than 0.5% of total revenues from the Company's
Properties.
30
CBL & Associates Poperties, Inc. - Form 10K
The following table sets forth certain additional information regarding the
Mortgages as of December 31, 2001.
Mortgage Information Center Information
----------------------------------------------- --------------------------------------------------------
Annual Principal Annual Total Percentage Number
Name of Center/ Interest Balance as Debt Maturity Total Leasable GLA of
Location Rate of 12/31/01 Service Date GLA(1) GLA Leased(2) Anchors Stores
- --------------------- ---------- ------------- --------- ---------- -------- --------- ----------- --------------- -------
BI-LO South 9.50% $999 $264 Aug-2006 56,557 56,557 100% BI-LO 8
Cleveland, TN
Gaston Square 7.50 2,805 190 Jun-2019 41,640 41,640 100 Food Lion 4
Gastonia, NC Family Dollar
Inlet Crossing 7.50 1,832 287 Jun-2019 55,374 55,374 96 Food Lion, 12
Murrells Inlety, SC Dollar General
Olde Brainerd Centre 9.50 14 35 Dec-2006 57,293 57,293 100 Bi-Lo 9
Chattanooga, TN
Signal Hills Crossing 7.50 642 66 Jun-2019 44,220 44,220 81 Food Lion(3) 6
Statesville, NC
Soddy Daisy Plaza 9.50 56 48 Dec-2006 55,280 55,280 100 Bi-Lo, CVS 5
Soddy Daisy, TN
Park Village 8.25 1,270 849(4) Aug-2010 48,505 48,505 100 Food Lion, 12
Lakeland, FL Family Dollar
University Crossing 8.75 507 79 Feb-2010 101,964 20,053 - -
Pueblo, CO
------------- --------- -------- --------- -------- -------
Total $8,125 $1,818 460,833 378,922 100% 56
============= ========= ======== ========= ======== =======
(1) Includes Anchors.
(2) Includes all leases executed on or before December 31, 2001. Leased GLA includes non-Anchor GLA and leased Anchor GLA.
(3) Tenant has closed but is continuing to meet its financial obligation.
(4) Purchaser paid down $770 in January 2002. The remaining balance will be amortized over 9 years with annual debt service
of $79.
Office Building
The Company owns a 95% interest in a 49,082 square foot office building in
Chattanooga, Tennessee in which the Company's headquarters were located. The
Company during 2001 occupied 34,470 square feet or 70% of the total square
footage of the Office Building. At year end the Company relocated its
headquarters to a new Office Building, CBL Center, that the Company owns 92% of.
CBL Center is a 128,000 square foot building, in which the Company now occupies
75,000 square feet. The Company has listed the former headquarters Office
Building, One Park Place, for sale.
31
CBL & Associates Poperties, Inc. - Form 10K
Top 25 Tenants
The following table sets forth the Company's top 25 tenants based upon a
percentage of total revenues from the Company's Properties in 2001.
% OF NUMBER OF
RANK TENANT REVENUES STORES SQUARE FEET
- ----------- -------------------------------------- ----------- ----------- -------------
1 Limited, Inc., The 4.57% 103 869,399
2 Gap Inc., The 2.66% 67 629,567
3 Footlocker, Inc. 2.61% 117 402,721
4 JCPenney Co. Inc 1.95% 54 5,286,538
5 Intimate Brands 1.83% 86 352,185
6 American Eagle Outfitters 1.22% 39 186,437
7 Charming Shoppes, Inc. 1.22% 41 275,437
8 Abercrombie & Fitch 1.20% 25 191,924
9 Transworld Entertainment 1.20% 42 197,910
10 Sterling 1.10% 48 69,527
11 Food Lion 1.06% 25 915,220
12 Regis Corporation, The 0.95% 106 118,844
13 Sears, Roebuck and Co. 0.95% 53 5,722,840
14 Consolidated Stores Corporation 0.94% 44 167,757
15 Finish Line, Inc., The 0.94% 30 160,953
16 Barnes & Noble 0.92% 37 243,646
17 Zale Corporation 0.89% 46 70,343
18 Shoe Show, The 0.87% 38 185,995
19 Claire's Boutiques, Inc. 0.87% 91 98,816
20 Goody's Family Clothing, Inc. 0.85% 17 590,494
21 Footstar 0.84% 27 136,563
22 Lenscrafters, Inc. 0.80% 29 137,206
23 Tandy Corporation 0.73% 55 142,638
24 The Buckle 0.71% 27 127,899
25 Saks Incorporated 0.71% 30 3,483,694
Mortgage Debt and Ratio to Total Market Capitalization
As of December 31, 2001, the Operating Partnership's proportionate share of
indebtedness of all Properties (whether or not consolidated for financial
statement reporting purposes, including the Construction Properties) was
approximately $2.393 billion. The Company's total market capitalization (the
aggregate market value of the Company's outstanding shares of Common and
Preferred Stock, assuming the full exchange of the limited partnership interests
in the Operating Partnership for Common Stock, plus the $2.393 billion total
debt of the Operating Partnership) as of December 31, 2001 was $4.04 billion.
Accordingly, the Company's debt to total market capitalization ratio as of
December 31, 2001 was 59.2%. The debt to total market capitalization ratio,
which is based upon the Company's proportionate share of consolidated and
unconsolidated indebtedness and market values of equity, differs from
debt-to-book capitalization ratios, which are based upon consolidated
indebtedness and book values.
The following table sets forth certain information regarding the mortgages
and secured lines of credit encumbering the Properties.
32
CBL & Associates Poperties, Inc. - Form 10K
MORTGAGE DEBT
(Dollars in thousands)
Mortgage Loans Outstanding in
Whole or in Part at December 31, 2001
Earliest
Ownership Estimated Date at
Share of Principal Annual, Balloon Which
Company and Annual Balance as all Annual Payment Loans Can
Center Pledged as Operating Interest of Interest Debt Due on Be
Collateral Partnership Rate 12/31/01(1) Payment(2) Service Maturity Date Maturity Prepaid(3)
- --------------------- ------------ ----------- ----------- ----------- ---------- ------------- ---------- ------------
MALLS:
Arbor Place 100% 3.060%(4) $ 99,300 $ 3,039 $ 3,039 Jun-2002 $ 99,300 --
Asheville Mall 100% 6.980% 71,073 4,961 5,677 Sep-2011 61,229 Oct-2004(17)
Bonita Lakes Mall 100% 6.820% 28,374 1,935 2,503 Oct-2009 22,539 Oct-2003(5)
Brookfield Square 100% 7.498% 75,160 5,635 4,855 May-2005 68,259 Jan-2004(6)
Burnsville Center 100% 8.000% 73,182 5,855 6,900 Aug-2010 60,341 Sep-2005(5)
Cary Towne Center 100% 8.640% 62,041 5,360 5,841 Dec-2003 61,042 --
Cherryvale Mall 100% 7.375% 48,093 3,547 4,648 Jul-2006 41,980 --(5)
Citadel Mall 100% 7.390% 33,276 2,459 3,162 May-2007 28,700 --(8)
Citadel Mall 100% 4.040%(4) 8,500 343 689 Jan-2003 8,154 --
College Square 100% 6.750% 13,971 943 1,548 Sep-2013 -- --(9)
Columbia Mall 48.0% 3.230%(4) 36,394 1,176 3,359 Jun-2003 31,355 --
Coolsprings Galleria 100% 8.290% 63,327 5,250 6,636 Oct-2010 47,827 Oct-2010(10)
Eastgate Mall 100% 3.426%(4) 42,000 1,439 1,814 Dec-2003 42,000 --
East Towne Mall 48.0% 8.010% 29,070 2,329 2,920 Jan-2007 41,125 --(11)
Fashion Square 100% 3.540%(4) 59,430 2,104 2,104 Sep-2003 59,430 --
Fayette Mall 100% 7.000% 97,594 6,832 7,824 Jul-2011 84,096 Jul-2006(13)
Governor's Square 47.5% 8.230% 33,880 2,788 3,476 Sep-2016 14,454 Sep-2001(14)
Hamilton Place 90% 7.000% 68,761 4,813 6,361 Mar-2007 59,505 --(5)
Hanes Mall 100% 7.310% 116,291 8,501 10,726 Jul-2008 97,551 --(7)
Hickory Hollow Mall 100% 6.770% 92,447 6,259 7,723 Aug-2008 80,847 --
Janesville Mall 100% 8.375% 15,473 1,296 1,857 Apr-2016 -- --
Jefferson Mall 100% 3.460%(4) 40,000 1,384 1,384 Sep-2003 40,000 --
Kentucky Oaks Mall 48.0% 9.000% 33,434 3,009 3,573 Jun-2007 35,359 --(14)
Madison Square 100% 9.25% 47,099 4,357 4,936 Mar-2002 46,482 Feb-1997(15)
Meridian Mall 100% 3.235%(4) 80,000 2,588 2,588 Aug-2003 80,000 --
Midland Mall 100% 3.620%(4) 35,000 1,267 1,267 Jun-2003 35,000 --
Northwoods Mall 100% 4.080%(4) 56,280 2,296 2,296 Sep-2003 56,280 --
Oak Hollow Mall 75% 7.310% 48,463 3,543 4,709 Feb-2008 39,567 Feb-2002(5)
Old Hickory Mall 100% 8.250% 21,731 1,793 2,290 Jul-2002 21,478 --(17)
Parkdale Mall 100% 3.230%(4) 45,000 1,454 1,454 Jun-2003 45,000 --
Plaza del Sol 50% 9.150% 4,749 435 796 Nov-2010 -- Sep-2001(5)
Rivergate Mall 100% 6.770% 74,715 5,058 6,241 Aug-2008 65,479 --
Springdale Mall 100% 3.081% 24,466 754 1,164 Nov-2002 24,125 --
St. Clair Square 100% 7.000% 71,753 5,023 6,361 Apr-2009 58,975 --(18)
Stroud Mall 100% 8.420% 32,290 2,719 2,977 Dec 2010 29,385 --
The Lakes Mall 90% 3.150%(4) 31,555 994 994 Mar-2002 31,555 --
Turtle Creek Mall 100% 7.400% 32,316 2,391 2,966 Mar-2006 29,522 Mar-1999(5)
Walnut Square 100% 10.125% 656 66 144 Feb-2008 -- --(19)
Wausau Center 100% 6.700% 14,228 953 1,238 Dec-2010 10,725 --(5)
WestGate Mall 100% 6.950% 45,101 3,135 4,819 Feb-2002 45,221 Feb-2002(20)
West Towne Mall 48.0% 8.010% 44,943 3,600 7,434 Jan-2007 39,342 --(11)
York Galleria 100% 8.340% 51,656 4,308 4,727 Dec-2010 46,932 --
---------
Malls Subtotal: 2,003,072
ASSOCIATED CENTERS:
Bonita Lakes 100% 6.820% 8,910 608 784 Oct-2009 7,062 Oct-2003(5)
Crossing
Courtyard At Hickory 100% 6.770% 4,304 291 359 Aug-2008 3,764 --
Hollow
Gunbarrel Pointe 100% 3.438%(4) 11,975 412 412 Apr-2002 11,975 --
Hamilton Corner 90% 10.125% 2,895 293 471 Aug-2011 -- --(21)
33
CBL & Associates Poperties, Inc. - Form 10K
Madison Plaza 100% 10.125% 1,041 105 537 Feb-2004 -- --(22)
The Landing At Arbor 100% 3.060%(4) 11,162 342 342 Jun-2002 11,162 --
The Terrace 92% 7.300% 9,841 718 1,047 Sep-2002 9,596 --(23)
Village at Rivergate 100% 6.770% 3,529 239 295 Aug-2008 3,086 --
Westgate Crossing 100% 8.420% 9,810 826 907 Jul-2010 8,954 Jul-2010
--------
Associated Centers Subtotal: 63,467
COMMUNITY CENTERS:
BJ's Plaza 100% 10.400% 2,952 307 476 Dec-2011 -- --(23)
Briarcliff Square 100% 10.375% 1,489 154 226 Feb-2013 (24) -- Feb-1998(25)
Cedar Bluff Crossing 100% 10.625% 1,014 108 230 Aug-2007 -- Jan-2008(26)
Chesterfield 100% 3.124%(4) 8,212 258 734 Dec-2002 7,735 --
Crossing
Coastal Way 100% 3.394%(4) 9,687 329 329 Dec-2002 9,687 --
Colleton Square (30( 100% 9.375% 848 80 143 Aug-2010 (27) -- Aug-1998(21)
Collins Park Commons 100% 10.250% 678 69 202 Oct-2010 -- Sept-2000(27)
Cortlandt Town 100% 6.900% 50,964 3,517 4,539 Aug-2008 42,342 Aug-2003(5)
Center
Cosby Station 100% 8.500% 3,800 323 490 Sep-2014 -- Sept-2001(28)
Greenport Towne 100% 9.000% 4,004 360 529 Sep-2014 -- --(29)
Center
Henderson Square 100% 7.500% 6,026 452 750 Apr-2014 -- May-2005
Longview Crossing 100% 10.250% 379 39 128 Aug-2010 -- Aug-2000(27)
North Haven Crossing 100% 9.550% 6,132 586 1,225 Oct-2008 202 Oct-1998(31)
Northwoods Plaza 100% 9.750% 1,119 109 171 Jun-2012 -- --(32)
Perimeter Place 100% 10.625% 1,240 132 278 Jan-2008 -- Jan-2008(26)
Seacoast Shopping 100% 9.750% 5,254 512 721 Sep-2002 5,110 Oct-1997(33)
Center
Shenandoah Crossing 100% 10.250% 476 49 83 Aug-2010 -- Aug-2000(27)
Springhurst Towne 100% 6.650% 21,830 1,452 2,179 Aug-2018 19,714 Aug-2004(34)
Center
Suburban Plaza 100% 7.875% 8,342 657 870 Nov-2004 6,042 --(35)
34th St. Crossing(37) 100% 10.625% 1,354 144 234 Dec-2010 -- Dec-2000(36)
Uvalde Plaza 75% 10.625% 595 63 133 Feb-2008 -- Feb-2008(26)
Valley Commons 100% 10.250% 824 84 142 Oct-2010 -- Oct-2000(27)
Willowbrook Plaza 100% 4.080%(4) 33,065 1,349 2,528 Feb-2002 33,063 --
Willow Springs Plaza 100% 9.750% 4,056 395 934 Aug-2007 -- Aug-1997(33)
----------
Community Centers Subtotal: 174,378
CONSTRUCTION PROPERTIES:
CBL Center 100% 3.669%(4) 14,847 545 545 Apr-2004 14,847 --
Parkway Place 50% 3.342%(4) 27,509 1,365 911 Dec-2003 27,509 --
Meridian Mall Exp. 100% 3.025%(4) 25,706 778 778 Aug-2003 25,706 --
----------
Construction Properties Subtotal: 68,062
Other: Park Place 95% 10.000% 571 57 459 Apr-2003 -- --(5)
Other 75% 4.750%(4) 116 6 6 Jun-2004 -- --
Credit Lines 100% 3.2000%(38) 216,265 6,920 6,920 Various 216,265 --
----------
Other Subtotal: 216,952
Total: 2,525,931
==========
Operating Partnership's Share of Total:(39) $2,392,600
==========
34
CBL & Associates Poperties, Inc. - Form 10K
(1) The amount listed includes 100% of the loan amount even though the Company and the Operating Partnership may own less than
100% of the property.
(2) Interest has been computed by multiplying the annual interest rate by the outstanding principal balance as of December 31,
2001.
(3) Unless otherwise noted, loans are prepayable at any time.
(4) The interest rate is floating at various spreads over LIBOR priced at the rates in effect at December 31, 2001.
(5) Prepayment premium is the greater of 1% or yield maintenance.
(6) Prepayment penalty is based on yield maintenance. No prepayment before January 2004 on $30 million of the loan balance.
(7) Prepayment premium is 3%, decreasing to1% per year on December 1, 2002 to May 30, 2003. After 60 days (August 1, 2003)
there is no prepayment penalty. Prepayment penalty is based on yield maintenance.
(8) Prepayment premium is based on yield maintenance; there is no loan prepayment premium during the last 180 days of the loan
term.
(9) Prepayment premium is greater of 1% or modified yield maintenance.
(10) Prepayment premium is the greater of 1% or yield maintenance after October 1, 2000.
(11) Prepayment premium is the greater of 1% or yield maintenance. No prepayment before January 2007.
(12) This loan can be extended for 2 one year periods, the extension fee is 1/2 point for each extension.
(13) Prepayment penalty is based on yield maintenance. No prepayment before July 2006.
(14) Prepayment premium is based on the greater of yield maintenance or 2%.
(15) Prepayment premium is based on yield maintenance; there is no prepayment premium after October 1, 2001.
(16) The loan is secured by a first mortgage lien on the land and improvements comprising the Goody's anchor store and no other
property.
(17) Prepayment premium is the greater of 1% or yield maintenance; there is no loan prepayment premium during the last 180 days
of the term.
(18) Prepayment premium is the greater of 1% or yield maintenance, none last 120 days.
(19) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium after November 1, 2007.
(20) Loan is closed to prepayment for the term. Lender shall adjust the interest rate every 5th year of the loan. If borrower
does not except the new rate loan may be prepaid at that time without prepayment penalty.
(21) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium during the last 120 days of
the loan term.
(22) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium after November 1, 2003.
(23) Prepayment penalty is based on yield maintenance.
(24) Lender has option to accelerate loan between March 1, 2001 and February 28, 2002; March 1, 2006 and February 28, 2007; and
March 1, 2011 and February 28, 2012.
(25) Prepayment premium is 7%, decreasing by 1% per year to a minimum of 3%.
(26) Loan may not be prepaid.
(27) Prepayment premium is 5%, decreasing by 1% per year to a minimum of 2% there is no prepayment premium during the last 120
days of the loan term.
(28) Prepayment premium of 7% decreasing by 1% per year to a minimum of 2%; there is no prepayment premium during the last six
months of the loan term.
(29) Prepayment premium is the greater of 10% or 1/12 of the annual yield difference before October 2014. Thereafter the
prepayment premium is 1%.
(30) Lender may accelerate loan on July 1, 2007 unless Food Lion exercises an extension option.
(31) Prepayment premium is the greater of 2% or yield maintenance before October, 1998, afterwards it is the greater of 1% or
yield maintenance.
(32) Prepayment premium is based on yield maintenance; there is no loan prepayment premium during the last 120 days of the loan
term.
(33) Prepayment premium is the greater of 1% or yield maintenance; there is no loan prepayment premium during the last 90 days
of the term.
(34) The loan has a rate reset option in August of 2004, 2009 and 2014. The loan can be prepaid in these years if the Company
elects not to accept the rate reset. The prepayment premium is the greater of 1% or yield maintenance.
(35) Prepayments penalty is 7.875% until November 2001 then yield maintenance, none last 120 days.
(36) Prepayment premium is 5%, decreasing by 1% per year to a minimum of 2%. There is no loan prepayment premium during the
last 90 days of the loan term.
(37) The note is secured by rent payable by the Food Lion Anchor store.
(38) Interest rates on the credit lines are at various spreads over LIBOR whose weighted average interest rate is 7.69% with
various maturities through 2004.
(39) Represents non-recourse indebtedness on Properties and reflects the less than 100% ownership of the Company and the
Operating Partnership with respect to certain Properties subject to such indebtedness. The reconciliation to the Company's
share is (in thousands): Total debt $2,525,931 less equity properties $209,978, less minority partners share of debt
$24,618, and include the Company's share of equity properties $101,265 yields total obligations.
35
CBL & Associates Poperties, Inc. - Form 10K
ITEM 3. LEGAL PROCEEDINGS.
The Company and the Operating Partnership are not currently involved in any
material litigation nor, to management's knowledge, is any material litigation
currently threatened against the Company, the Operating Partnership, the
Property Partnerships or the Properties, other than litigation arising in the
ordinary course of business, most of which is expected to be covered under
liability insurance policies held by the Company or the Operating Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
----------------------------------------------------
NONE
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS.
(a) Market Information
The principal United States market in which the Common Stock is traded is
the New York Stock Exchange.
The following table sets forth the high and low sales prices for the Common
Stock for each quarter of the Company's two most recent fiscal years.
2001 Quarter Ended High Low
- ------------------------- ----------- ------------
March 31 $27.6200 $25.1250
June 30 31.0100 26.5500
September 30 31.5000 26.0400
December 31 31.8500 26.8500
2000 Quarter Ended High Low
- ------------------------- ----------- ------------
March 31 $22.8750 $20.1250
June 30 25.6875 20.5625
September 30 25.8750 23.8750
December 31 25.3750 22.5000
(b) Holders
The approximate number of shareholders of record of the Common
Stock was 603 as of March 1, 2002.
(c) Dividends
The following table sets forth the frequency and amounts of dividends
declared and paid for each quarter of the Company's two most recent
fiscal years.
Quarter Ended 2001 2000
- ------------------------- ----------- ------------
March 31 $0.5325 $0.5100
June 30 0.5325 0.5100
September 30 0.5325 0.5100
December 31 0.5325 0.5100
Future dividend distributions are subject to the Company's actual results
of operations, economic conditions and such other factors as the Board of
Directors of the Company deems relevant. The Company's actual results of
operations will be affected by a number of factors, including the revenues
received from the Properties, the operating expenses of the Company, the
Operating Partnership and the Property Partnerships, interest expense, the
ability of the anchors and tenants at the Properties to meet their obligations
and unanticipated capital expenditures.
36
ITEM 6. SELECTED FINANCIAL DATA.
CBL & Associates Properties, Inc.
Selected Financial Data
(In thousands, except per share data)
Year Ended December 31,
-------------------------------------------------------------------------
2001 2000 1999 1998 1997
--------- --------- --------- --------- ---------
TOTAL REVENUES $ 544,375 $ 356,488 $ 317,603 $ 254,640 $ 177,604
TOTAL EXPENSES 436,372 280,027 250,139 203,001 135,200
--------- --------- --------- --------- ---------
INCOME FROM OPERATIONS 108,003 76,461 67,464 51,639 42,404
GAIN ON SALES OF REAL ESTATE ASSETS 10,649 15,989 8,357 4,183 6,040
EQUITY IN EARNINGS OF
UNCONSOLIDATED AFFILIATES 7,155 3,684 3,263 2,379 1,916
MINORITY INTEREST IN EARNINGS
Operating Partnership (49,643) (28,507) 23,264) (16,258) (13,819)
Shopping Center Properties (1,698) (1,538) (1,225) (645) (508)
--------- --------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY ITEM 74,466 66,089 54,595 41,298 36,033
EXTRAORDINARY LOSS ON EXTINGUISHMENT OF DEBT (13,558) (367) - (799) (1,092)
--------- --------- --------- --------- ---------
NET INCOME 60,908 65,722 54,595 40,499 34,941
PREFERRED DIVIDENDS (6,468) (6,468) (6,468) (3,234) -
--------- --------- --------- --------- ---------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 54,440 $ 59,254 $ 48,127 $ 37,265 $ 34,941
========== ========= ========== ========= =========
BASIC EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 2.68 $ 2.40 $ 1.95 $ 1.58 $ 1.51
Net income $ 2.15 $ 2.38 $ 1.95 $ 1.55 $ 1.46
========= ======== ========= ======== ========
Weighted average shares outstanding 25,358 24,881 24,647 24,079 23,895
DILUTED EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 2.63 $ 2.38 $ 1.94 $ 1.56 $ 1.49
Net income $ 2.11 $ 2.37 $ 1.94 $ 1.53 $ 1.45
========= ======== ========= ======== ========
Weighted average shares and potential dilutive
common shares outstanding 25,833 25,021 24,834 24,340 24,151
Dividends declared per common share $2.13 $2.04 $1.95 $1.86 $1.77
Year Ended December 31,
-------------------------------------------------------------------------
2001 2000 1999 1998 1997
--------- --------- --------- --------- ---------
BALANCE SHEET DATA:
Net investment in real estate assets $3,201,622 $2,040,614 $1,960,554 $1,805,788 $1,142,324
Total assets 3,372,851 2,115,565 2,018,838 1,855,347 1,245,025
Total debt 2,315,955 1,424,337 1,360,753 1,208,204 741,413
Minority interest 431,101 174,665 170,750 168,040 123,897
Shareholder equity 522,088 434,825 419,887 415,782 330,853
OTHER DATA:
Cash flow provided by (used in):
Operating activities $169,125 $117,814 $114,196 $89,123 $60,852
Investing activities (207,122) (127,073) (212,141) (571,332) (245,884)
Financing activities 42,950 7,369 99,192 484,912 183,858
Funds from operations (FFO) (1)
of the Operating Partnership 194,001 132,034 116,273 93,492 76,184
FFO applicable to the Company 100,773 89,156 78,304 64,941 54,597
(1) Please refer to Management Discussion and Analysis of Financial Condition
and Results of Operations for the definition of FFO. FFO does not represent cash
flow from operations as defined by accounting principals generally accepted in
the United States ("GAAP") and is not necessarily indicative of the cash
available to fund all cash requirements.
37
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion and analysis of the financial condition and
results of operations should be read in conjunction with CBL & Associates
Properties, Inc. Consolidated Financial Statements and Notes thereto.
Information included herein may contain "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 results, financial and otherwise, may differ materially from the events
and results discussed in the forward-looking statements. We direct you to the
Company's other filings with the Securities and Exchange Commission, and
elsewhere in this Annual Report on Form 10-K for a discussion of such risks and
uncertainties.
GENERAL BACKGROUND
On November 3, 1993, CBL & Associates Properties, Inc. (the "Company")
completed an initial public offering of 15,400,000 shares of common stock priced
at $19.50 per share (the "Offerings"). In connection with the Offerings, CBL &
Associates, Inc. and its affiliates contributed their interests in properties to
CBL & Associates Limited Partnership (the "Operating Partnership"). The Company
is the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and
CBL Holdings II, Inc., which are the sole general partner and majority owner,
respectively, of the Operating Partnership. As a result, the CBL & Associates
Properties, Inc. Consolidated Financial Statements and Notes thereto reflect the
consolidated financial results of the Operating Partnership, which includes at
December 31, 2001, the operations of a portfolio of properties consisting of 45
regional malls, 16 associated centers, two power centers, 66 community centers,
two office buildings, joint venture investments in seven regional malls and two
associated centers, and income from eight mortgages (the"Properties"). The
Operating Partnership currently has under construction one mall and one mall
expansion, and owns options to acquire certain shopping center development
sites. The consolidated financial statements also include the results of CBL &
Associates Management, Inc. (the "Management Company").
The Company classifies its regional malls into three categories -
stabilized malls which have completed their initial lease-up; new malls which
are in their initial lease-up phase; and newly acquired malls representing the
21 mall portfolio acquired on January 31, 2001. The new mall category is
presently comprised of Springdale Mall in Mobile, Alabama, which was acquired in
September 1997 and is being redeveloped and retenanted; Parkway Place in
Huntsville, Alabama, which was acquired in December 1998 and is currently being
redeveloped; Arbor Place Mall in Atlanta (Douglasville), Georgia, which opened
in October 1999 and The Lakes Mall in Muskegon, Michigan which opened in August
2001.
On January 31, 2001, the Company completed the first stage of the
acquisition of The Richard E. Jacobs Group's interests in 21 malls and two
associated centers for total consideration of approximately $1.26 billion,
including the acquisition of minority interests in certain properties. The
purchase price is comprised of $124.5 million in cash, including closing costs
of approximately $12 million; the assumption of $745.5 million in primarily
non-recourse mortgage debt; and the issuance of 12,056,692 special common units
of the Operating Partnership a value of $27.25 per unit. The cash portion was
funded from a new $212 million unsecured credit facility provided by a
consortium of banks led by Wells Fargo. The Company will close on the second
stage in 2002, which will consist of cash of $0.3 million, the assumption of
$25.7 million in non-recourse mortgage debt, and the issuance of 499,733 special
common units of the Operating Partnership. In the second stage closing the
Company will acquire additional interests in properties accounted for under the
equity method of accounting. In a separate transaction, the Company issued an
additional 603,344 special common units of the Operating Partnership to purchase
the remaining 50% interest in Madison Square Mall in Huntsville, Alabama that it
did not already own. In June 2001 the Company issued 31,008 common units of the
Operating Partnership to purchase the 25% interest in Madison Plaza in
Huntsville, Alabama that it did not already own.
38
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Sales
Mall shop sales, for those tenants who have reported, in the 48 stabilized
malls in the Company's portfolio, decreased by 1.5% on a comparable per square
foot basis as shown below:
Year Ended December 31,
2001 2000
------------------------------
Sales per square foot $297.70 $302.30
Total sales volume in the mall portfolio, including new malls, decreased
0.5% to $2.901 billion in 2001 from $2.915 billion in 2000.
Occupancy costs as a percentage of sales for the years ended December 31,
2001, 2000 and 1999, for the stabilized malls (excluding the mall acquired in
1999 from that year) were 11.3%, 11.9% and 11.5%, respectively.
Occupancy
Occupancy for the Company's overall portfolio by asset category is as
follows:
December 31,
-----------------------------------
2001 2000
------------- -------------
Total Combined Occupancy: 93.8% 95.7%
Core Portfolio:
Total portfolio occupancy 95.0% 95.7%
Stabilized Malls 94.1% 94.5%
New Malls * 89.1% 90.4%
Total Malls 93.6% 94.1%
Associated Centers 95.6% 94.9%
Community Centers 97.0% 97.8%
Newly-Acquired Portfolio:
Malls (21) 90.4% --
Associated Centers (2) 99.5% --
* Excludes Parkway Place which is under redevelopment.
Average Base Rents
Average base rents for the Company's three portfolio categories was as
follows:
At December 31,
--------------------------------------------------------------
Percentage
2001 2000 (Decrease)Increase
--------------------------------------------------------------
Stabilized and New Malls $22.49 $21.57
Newly Acquired Malls 23.49 --
Malls * 22.91 21.57 6.2%
Associated Centers 9.73 9.88 (1.5)
Community Centers 9.43 8.85 6.6
* Excludes Parkway Place which is under redevelopment.
39
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Lease Rollovers
For spaces previously occupied, the Company achieved the following results
from rollover leasing for the year ended December 31, 2001, over and above the
base and percentage rent paid by the previous tenant:
Per Square Per Square
Foot Rent Foot Rent Percentage
Prior Lease(1) New Lease(2) Increase
---------------------------------------------------------
Malls $24.10 $26.52 10.0%
Associated Centers 13.99 10.98 (18.3)
Community Centers 10.95 11.69 6.8
(1) Rental achieved for spaces previously occupied at the end of the lease including percentage rent.
(2) Average base rent over the term of the lease.
In 2001 and 2000, revenues from the Malls represented 84.7% and 77.3%,
respectively, of total revenues from consolidated and unconsolidated properties;
revenues from Associated Centers represented 2.6% and 4.1%, respectively;
revenues from Community Centers represented 11.7% and 17.5%, respectively; and
revenues from Mortgages and the Office Building represented 1.0% and 1.1%,
respectively. Accordingly, revenues and results of operations are
disproportionately impacted by the malls' achievements.
The shopping center business is somewhat seasonal in nature with tenant
sales achieving the highest levels during the fourth quarter because of the
holiday season. The malls earn most of their "temporary" rents (rents from
short-term tenants) during the holiday period. Thus, occupancy levels and
revenue production are generally the highest in the fourth quarter of each year.
Results of operations realized in any one quarter may not be indicative of the
results likely to be experienced over the course of the entire year.
COMPARISON OF RESULTS OF OPERATIONS FOR 2001 TO THE RESULTS OF OPERATIONS
FOR 2000
Total revenues in 2001 increased by $187.9 million, or 52.7%, to $544.4
million compared with $356.5 million in 2000. Of this increase, minimum rents
increased by $126.8 million, or 56.3%, to $352.3 million compared with $225.5
million in 2000; percentage rents increased by $0.9 million, or 10.4%, to $9.7
million compared with $8.8 million in 2000; other rents increased by $4.4
million, or 69.9%, to $10.6 million compared with $6.2 million in 2000; and
tenant reimbursements increased by $55.1 million, or 51.6%, to $161.8 million
compared with $106.8 million in 2000.
Approximately $161.5 million of the increase in revenues resulted from
operations at the eighteen new centers, which were acquired on January 31, 2001
from The Richard E. Jacobs Group and are included in the consolidated financial
statements. These properties are those properties with a 50% or greater
ownership by the Company described in the Development, Expansions, and
Acquisitions section of this report:
Approximately $25.6 million of the increase in revenues resulted from
operations at the eight new centers opened or acquired during the past
twenty-four months offset by a decrease in revenues of $5.5 million from
nineteen centers sold in the last twenty-four months. The eight new centers
consist of:
Opening/
Project Name Location Total GLA Type of Addition Acquisition Date
- ------------------------------ ---------------------------- -------------- --------------------------- ------------------
Market Place Flower Mound, Texas 119,000 Acquisition March 2000
Coastal Way Spring Hill, Florida 197,000 New Development August 2000
Chesterfield Crossing Richmond, Virginia 421,000 New Development October 2000
Gunbarrel Pointe Chattanooga, Tennessee 282,000 New Development October 2000
Madison Square Mall Huntsville, Alabama 934,000 Acquisition of 50% January 2001
interest
Willowbrook Plaza Houston, Texas 388,000 Acquisition February 2001
Creekwood Crossing Bradenton, Florida 404,000 New Development April 2001
The Lakes Mall Muskegon, Michigan 553,000 New Development August 2001
40
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Improved occupancies, improved operations and increased rents in the
Company's operating portfolio generated approximately $3.0 million of the
increased revenues. Revenues from the early termination of tenant leases
increased by $3.3 million to $4.1 million in 2001 compared with $0.7 million in
2002.
Management, development and leasing fees increased in 2001 by $1.0 million,
or 23.4%, to $5.2 million compared with $4.2 million in 2000. Interest and other
income decreased in 2001 by $0.3 million, or 5.5%, to $4.8 million compared with
$5.1 million in 2000. This decrease resulted primarily from a decrease in
interest income during 2001 from interest income received on proceeds from
community center sales held in escrow in 2000.
Property operating expenses, including real estate taxes and maintenance
and repairs, increased in 2001 by $66.5 million, or 62.2%, to $173.4 million
compared with $106.9 million in 2000. This increase is primarily the result of
the twenty-six new centers opened or acquired over the past twenty-four months.
The Company's cost recovery ratio, not including bad debt expense of $5.9
million was 96.6% in 2001 compared with 99.9% in 2000 due to decreases in
occupancy and the bankruptcy of tenants who have been temporarily replaced with
tenants whose recovery clauses are more restrictive.
Depreciation and amortization increased in 2001 by $27.0 million, or 44.5%,
to $87.6 million compared with $60.6 million in 2000. This increase resulted
primarily from depreciation and amortization on the twenty-six new centers
opened or acquired over the past twenty-four months and the Company's capital
investment in operating properties.
Interest expense increased in 2001 by $59.9 million, or 63.3%, to $154.4
million compared with $94.6 million in 2000. This increase is primarily due to
increased interest expense on the twenty-six new centers opened or acquired over
the past twenty-four months offset by reductions in interest expense on debt
retired with the proceeds from the sales of properties.
General and administrative expenses increased in 2001 by $1.0 million, or
5.9%, to $18.8 million compared with $17.8 million in 2000. This increase was
due to increases in general overhead to manage 21 malls and two associated
centers that were acquired in January 2001. The amount of the increase in
general and administrative expense is offset by a $1.0 million reduction in the
reserve for state taxes.
Gain on sales of real estate assets was $10.6 million in 2001 compared with
$16.0 million in 2000. The majority of the gain on sales in 2001 is from the
$8.4 million gain on six community centers sold in 2001. The centers sold were:
Jean Ribaut Square in Beaufort, South Carolina; Bennington Place in Roanoke,
Virginia; Sand Lake Corners in Orlando, Florida; Park Village in Lakeland,
Florida; Sutton Plaza in Mt. Olive, New Jersey and Creekwood Crossing in
Bradenton, Florida. Additional gains were generated by outparcel sales at The
Lakes Mall in Muskegon, Michigan which opened on August 15, 2001.
Equity in earnings of unconsolidated affiliates increased in 2001 by $3.5
million to $7.2 million compared with $3.7 million in 2000. This increase was
the result of acquiring a non-controlling interest in four malls and one
associated center in three partnerships, all accounted for under the equity
method of accounting. The increase was offset by decreases as the result of the
end of operations at Parkway Place Mall in Huntsville, Alabama, which is being
redeveloped, and by the acquisition of the remaining interest in Madison Square
Mall in Huntsville, Alabama. Since the Company now owns 100% of the interest in
the Madison Square Mall, this property is now accounted for as a consolidated
property rather than under the equity method. The new centers accounted for
under the equity method are: Columbia Mall in Columbia, South Carolina; East
Towne Mall, West Towne Mall and West Towne Crossing in Madison, Wisconsin and
Kentucky Oaks Mall in Paducah, Kentucky.
COMPARISON OF RESULTS OF OPERATIONS FOR 2000 TO THE RESULTS OF OPERATIONS
FOR 1999
Total revenues in 2000 increased by $38.9 million, or 12.2%, to $356.5
million compared with $317.6 million in 1999. Of this increase, minimum rents
increased by $22.4 million, or 11.1%, to $225.5 million compared with $203.0
million in 1999; percentage rents increased by $1.4 million, or 19.1%, to $8.8
million compared with $7.4 million in 1999; other rents increased by $0.8
million, or 14.8%, to $6.2 million compared with $5.4 million in 1999; and
tenant reimbursements increased by $17.0 million, or 18.9%, to $106.8 million
compared with $89.8 million in 1999.
Approximately $22.3 million of the increase in revenues resulted from the
ten new centers opened or acquired during 1999 and 2000. The centers opened or
acquired in 1999 and contributing to 2000 increases are Arbor Place Mall in
Atlanta (Douglasville), Georgia; The Landing at Arbor Place in Atlanta
(Douglasville), Georgia; York Galleria in York, Pennsylvania; Sand Lake Corners
in Orlando, Florida; and Fiddler's Run in Morganton, North Carolina, which was
sold in 2000. The five new centers opened or acquired in 2000 are Marketplace at
Flower Mound in Dallas (Flower Mound), Texas; Coastal Way in Spring Hill,
Florida; Chesterfield Crossing in Richmond, Virginia; Gunbarrel Pointe in
Chattanooga, Tennessee; and Sutton Plaza Expansion in Mt Olive, New Jersey.
41
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Improved occupancies and operations and increased rents in the Company's
operating portfolio generated approximately $21.8 million of the increased
revenues, with the largest increases derived from Rivergate Mall in Nashville,
Tennessee, and Meridian Mall in Lansing, Michigan. These increases were offset
by a decrease in revenues of $2.2 million from 13 community centers sold in 2000
and a decrease of $3.1 million in management and development fees relating to a
one-time fee earned in the Company's co-development program in 1999.
Management, development and leasing fees decreased in 2000 by $3.6 million,
or 46.7%, to $4.2 million compared with $7.8 million in 1999. Most of the
decrease was due to a one-time fee of $3.1 million earned in the co-development
program in 1999. The balance of the decrease was due to the reduction in
continuing co-development fees. Interest and other income increased in 2000 by
$0.9 million, or 21.4%, to $5.1 million compared with $4.2 million in 1999. This
increase resulted primarily from other income at the two malls acquired and
opened over the past twenty-four months and interest income on the proceeds from
community center sales held in escrow during the year.
Property operating expenses, including real estate taxes and maintenance
and repairs, increased in 2000 by $10.7 million, or 11.1%, to $106.9 million
compared with $96.2 million in 1999. This increase is primarily the result of
the ten new centers opened or acquired over the past twenty-four months. The
Company's cost recovery ratio, which includes redistribution of utilities,
increased to 99.9% in 2000 compared with 93.3% in 1999 due to increases in
occupancy which occurred at the end of 1999 and continued through calendar year
2000.
Depreciation and amortization increased in 2000 by $7.1 million, or 13.2%,
to $60.6 million compared with $53.5 million in 1999. This increase resulted
primarily from depreciation and amortization on the ten new centers opened or
acquired over the past twenty-four months and the Company's capital investment
in operating properties.
Interest expense increased in 2000 by $12.1 million, or 14.7%, to $94.6
million compared with $82.5 million in 1999. This increase is primarily due to
increased interest expense on the ten new centers opened or acquired over the
past twenty-four months offset by reductions in interest expense on debt retired
with the proceeds from the sales of properties.
General and administrative expenses increased in 2000 by $1.6 million, or
9.6%, to $17.8 million compared with $16.2 million in 1999. A portion of this
increase was due to increases in general overhead in preparation to assume
management of The Richard E. Jacobs Group's interests in 21 malls and two
associated centers that were subsequently acquired in January 2001.
Gain on sales of real estate assets was $16.0 million in 2000 compared with
$8.4 million in 1999. The majority of the gain in 2000 is from the $10.5 million
gain on 13 community centers sold in 2000. The centers sold were: Centerview
Plaza in China Grove, North Carolina; Clark's Pond in South Portland, Maine;
Dorchester Crossing in Charleston, South Carolina; Fiddler's Run in Morganton,
North Carolina; Genesis Square in Crossville, Tennessee; Hollins Plantation in
Roanoke, Virginia; Karns Korner in Knoxville, Tennessee; Lakeshore Station in
Gainsville, Georgia; Sparta Crossing in Sparta, Tennessee; Sterling Creek
Commons in Portsmouth, Virginia; Tyler Square in Radford, Virginia; University
Crossing in Pueblo, Colorado; and Wildwood Plaza in Salem, Virginia. Additional
gains were generated by outparcel and pad sales at two centers under development
in 2000, Creekwood Crossing in Bradenton, Florida, and The Lakes Mall in
Muskegon, Michigan, as well as outparcel sales at Sand Lake Corners in Orlando,
Florida, which opened in 1999.
LIQUIDITY AND CAPITAL RESOURCES
The principal uses of the Company's liquidity and capital resources have
historically been for property development, acquisitions, expansion and
renovation programs, and debt repayment. To maintain its qualification as a real
estate investment trust under the Internal Revenue Code, the Company currently
is required to distribute to its shareholders at least 90% of its "Real Estate
Investment Trust Taxable Income" as defined in the Internal Revenue Code of
1986, as amended (the "Code").
As of December 31, 2001, the Company had $47.6 million available in
unfunded construction loans to be used for completion of construction projects
and replenishment of working capital previously used for construction.
Additionally, as of December 31, 2001, the Company had obtained revolving credit
lines and term loans totaling $389.4 million, of which $171.8 million was
42
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
available. Also, as a publicly traded company, the Company has access to capital
through both the public equity and debt markets. The Company has filed a shelf
registration statement authorizing shares of the Company's common stock,
preferred stock, and warrants to purchase shares of the Company's common stock
with an aggregate public offering price of up to $350 million, with $278 million
available as of December 31, 2001. The Company anticipates that the combination
of these sources will, for the foreseeable future, provide adequate liquidity to
enable it to continue its capital programs substantially as in the past and make
distributions to its shareholders in accordance with the Code's requirements
applicable to real estate investment trusts.
Management expects to refinance the majority of the mortgage notes payable
maturing over the next five years with replacement loans.
The Company's capital structure at December 31, 2001, includes property
specific mortgages, which are generally non-recourse, revolving lines of credit,
common stock, preferred stock, and a minority interest in the Operating
Partnership. The minority interest in the Operating Partnership represents the
17.7% ownership interest in the Operating Partnership held by certain of the
Company's executive and senior officers which may be exchanged for approximately
8.9 million shares of common stock. Additionally, these executive and senior
officers and the Company's directors own approximately 2.0 million shares of the
outstanding common stock of the Company, for a combined total interest in the
Operating Partnership on December 31, 2001 of approximately 21.8%. Ownership
interests issued to fund acquisitions in January 2001 may be exchanged after
January 2004 for approximately 12.6 million shares of common stock which
represent a 25.3% interest in the Operating Partnership. Ownership interests
issued to fund acquisitions in other years and interests of former executives
may be exchanged for approximately 2.9 million shares of common stock which
represent a 5.9% interest in the Operating Partnership. Assuming the exchange of
all limited partnership interests in the Operating Partnership for common stock,
there would be approximately 50.1 million shares of common stock outstanding
with a market value of approximately $1.579 billion at December 31, 2001 (based
on the closing price of the Company's common stock of $31.50 per share on
December 31, 2001). The Company's total market equity is $1.652 billion at
December 31, 2001, including 2.9 million shares of preferred stock (based on the
closing price of its preferred stock of $25.20 per share on December 31, 2001).
The Company's current executive and senior officers' ownership interests had a
market value of approximately $343.8 million at December 31, 2001.
Mortgage debt consists of debt on certain consolidated properties as well
as debt on eight properties in which the Company owns non-controlling interests,
accounted for under the equity method of accounting. At December 31, 2001, the
Company's share of funded mortgage debt on its consolidated properties (adjusted
for minority investors' interests in eight properties) was $1.439 billion and
its pro rata share of mortgage debt on unconsolidated properties (accounted for
under the equity method) was $70.0 million for total fixed-rate debt obligations
of $1.509 billion with a weighted-average interest rate of 7.5%. Consolidated
and unconsolidated variable-rate debt accounted for $883.9 million with a
weighted-average interest rate of 4.2%. Total debt obligations amounted to
$2.393 billion. Variable-rate debt accounted for approximately 36.9% of the
Company's total debt and 21.9% of its total capitalization. Through the
execution of interest rate swap agreements, the Company has fixed the interest
rates on $220.0 million of variable-rate debt at a weighted-average interest
rate of 6.4%. Of the Company's remaining variable-rate debt of $663.9 million,
$67.0 million of debt is subject to variable rates on construction properties
and $596.6 million of debt is subject to variable rates on operating properties.
There were no fees charged to the Company related to these swap agreements. The
Company's interest rate swap agreements in place at December 31, 2001, are as
follows:
Swap Amount
(in millions) Fixed LIBOR Component Effective Date Expiration Date
- ------------------------------ ---------------------------- --------------------------- ----------------------------
10 5.737% 01/03/2001 06/01/2002
5 5.737% 01/03/2001 06/01/2002
5 5.737% 01/03/2001 06/01/2002
10 5.737% 01/03/2001 06/01/2002
20 5.737% 01/03/2001 06/01/2002
20 4.670% 03/15/2001 09/26/2002
20 4.670% 03/15/2001 09/26/2002
20 4.670% 03/15/2001 09/26/2002
10 4.670% 03/15/2001 09/26/2002
10 4.670% 03/15/2001 09/26/2002
5 4.670% 03/15/2001 09/26/2002
5 4.670% 03/15/2001 09/26/2002
80 5.830% 12/22/2000 08/30/2003
43
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
At January 1, 2001, the Company implemented Statement of Financial
Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments
and Hedging Activities", as amended, ("SFAS No. 133") which establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded in the balance sheet as either an asset or liability measured at its
fair value. At January 1, 2001 the Company determined that with the exception of
two swap agreements that expired during the first quarter of 2001 the Company's
derivative instruments were effective and qualified for hedge accounting. The
Company also determined that new swap agreements obtained in 2001 were effective
and qualified for hedge accounting. The Company measured the effectiveness of
these instruments in place during each quarter in the year ended December 31,
2001 and determined that the swap agreements continued to be highly effective
and continued to qualify for hedge accounting. The effective swap agreements
were recorded on the consolidated balance sheet at their fair values of $6.8
million in accrued liabilities and in accumulated other comprehensive loss. Over
time, the unrealized gains and losses held in accumulated other comprehensive
loss will be reclassified to earnings as interest expense as swap payments are
made to the swap counterparties. This reclassification is consistent with the
timing of when hedged items are recognized in earnings. Within the next twelve
months, the Company expects to reclassify to earnings as interest expense an
estimated $5.2 million of the current balance held in accumulated other
comprehensive loss.
The outstanding balance of $216.3 million on the Company's credit
facilities had a weighted-average interest rate of 3.2% (before applied swap
agreements) at December 31, 2001. Each of the credit facilities includes
covenants that require the Company to maintain minimum net worth levels,
maintain interest and debt coverage ratios, maintain total obligations to
capitalized value ratios, and maintain limitations on variable-rate debt. The
credit facilities also require that the Company's senior management continue to
consist of certain individuals and to maintain certain levels of minority
ownership in the Operating Partnership. The First Tennessee Bank credit facility
provides that if the Company completes an offering of its securities, not less
than 75% of the net proceeds of any such offering will be applied for the
benefit of the Operating Partnership.
The following table sets forth the Company's credit facilities at December
31, 2001 (in millions):
Credit Facility Amount Current Balance Maturity
- ---------------------------------------------------------------------------------
SunTrust $10.0 $10.0 April 2003
SouthTrust 20.0 12.0 March 2004
First Tennessee 80.0 31.7 June 2003
Wells Fargo (secured) 130.0 107.5 September 2003
Wells Fargo (unsecured) 149.4 55.1 January 2003
During 2001 the Company closed fixed rate permanent and variable rate loans
totaling $544.7 million at a weighted-average interest rate of 4.8% as of
December 31, 2001. The details of the fixed rate permanent loans are: Fayette
Mall in Lexington, Kentucky with a $98 million loan at 7.0%, Brookfield Mall in
Milwaukee (Brookfield), Wisconsin with a loan addition of $30 million at 6.87%
and Asheville Mall in Asheville, North Carolina with a loan of $71.2 million at
6.98%. The details of the variable rate loans are: Midland Mall in Midland
Michigan, Parkdale Mall in Beaumont, Texas, Fashion Square Mall in Saginaw,
Michigan, Jefferson Mall in Louisville, Kentucky, Columbia Mall in Columbia,
South Carolina and Northwoods Mall in North Charleston, South Carolina all of
which were refinanced with separate variable rate loans totaling $314.1 million
for terms of up to three years. The Regency Mall in Racine, Wisconsin loan of
$28.6 million was refinanced with proceeds from the Company's credit facilities
The proceeds of these loans were used to prepay and retire fixed rate loans of
$362.7 million, repay variable-rate indebtedness on loans and credit facilities
of $165.5, fund prepayment penalties of $13.0 million and to fund fees and
accrued interest of $4.0 million.
On January 31, 2001, the Company assumed, as part of the acquisition of The
Richard E. Jacobs Group's interests in 21 malls and two associated centers;
total debt obligations of $745.5 million, including permanent debt of $661.5
million (adjusted for a minority interest in one property); variable-rate debt
of $12.5 million; and its pro rata share of mortgage debt on unconsolidated
properties (accounted for under the equity method) of $71.5 million. In
addition, the Company closed a $212 million unsecured credit facility provided
by a consortium of banks led by Wells Fargo. The balance on this credit facility
at December 31, 2001 was $55.1 with $94.3 million available for capital
improvements.
Based on the debt (including construction projects) and the market value of
equity described above, the Company's debt to total market capitalization (debt
plus market value equity) ratio was 59.2% at December 31, 2001, compared with
59.4% at December 31, 2000.
44
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
DEVELOPMENT, EXPANSIONS AND ACQUISITIONS
On January 31, 2001, the Company acquired from The Richard E. Jacobs Group
interests in 21 malls and two associated centers. The total gross leasable area
of the 23 properties is 19.2 million square feet, or an average gross leasable
area of 914,000 square feet per mall. The malls are located in middle markets
predominantly in the Southeast and the Midwest. The properties acquired are as
follows at December 31, 2001:
Second Gross
Stage(3) Leaseable
Center Location Ownership Interest Area Anchor stores
- --------------------------------------------------------------------------------------------------------------------------
Brookfield Square Brookfield, WI 100% -% 1,041,000 Boston Store, Sears,
JCPenney
Cary Towne Center Cary, NC 100% -% 953,000 Dillard's, Hecht's,
Belk, Sears, JC Penney
Cherryvale Mall Rockford, IL 100% -% 714,000 Bergner's, Marshall
Fields, Sears
Citadel Mall Charleston, SC 100% -% 1,074,000 Parisian, Dillard's,
Belk, Target(2), Sears
Columbia Mall Columbia, SC 48% 31% 1,113,000 Dillard's, JCPenney,
Rich's, Sears
Eastgate Mall (1) Cincinnati, OH 100% -% 1,099,000 JCPenney, Kohl's,
Dillard's, Sears
East Towne Mall Madison, WI 48% 17% 887,000 Boston Store, Younkers,
Sears, JCPenney
Fashion Square Saginaw, MI 100% -% 786,000 Marshall Fields, JCPenney,
Sears
Fayette Mall Lexington, KY 100% -% 1,108,000 Lazarus, Dillard's,
JCPenney, Sears
Hanes Mall Winston-Salem, NC 100% -% 1,556,000 Dillard's, Belk, Hecht's,
Sears, JCPenney
Jefferson Mall Louisville, KY 100% -% 936,000 Lazarus, Dillard's,
Sears, JCPenney
Kentucky Oaks Mall Paducah, KY 48% 2% 888,000 Dillard's, Elder-
Beerman, JCPenney,
Midland Mall Midland, MI 100% -% 514,000 Elder-Beerman,
JCPenney, Sears, Target
Northwoods Mall Charleston, SC 100% -% 833,000 Dillard's, Belk,
JCPenney, Sears
Old Hickory Mall Jackson, TN 100% -% 555,000 Belk, Goldsmith's,
Sears, JCPenney
Parkdale Mall Beaumont, TX 100% -% 1,411,000 Dillard's I, Dillard's II,
JCPenney, Foleys(2), Sears
Randolph Mall Asheboro, NC 100% -% 376,000 Belk, JCPenney,
Dillard's(2), Sears
Regency Mall Racine, WI 100% -% 887,000 Boston Store, Yonkers,
JCPenney, Sears
Towne Mall Franklin, OH 100% -% 465,000 Elder-Beerman,
Dillard's, Sears
Wausau Center Wausau, WI 100% -% 429,000 Younkers, JCPenney,
Sears
West Towne Mall (1) Madison, WI 48% 17% 1,462,000 Boston Store, Sears,
JCPenney, Yonkers
(1) Includes associated center.
(2) Opening in 2002.
(3) Second stage interest to be acuired in 2002.
45
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The company also acquired and opened in 2001 the following properties:
Gross
Leaseable
Center Location Ownership Area Anchor stores
- ----------------------------------------------------------------------------------------------------------------
ACQUISITIONS:
Willowbrook Plaza Houston, Texas 100% 119,000 AMC Theater, Home Depot Expo
ACQUIRED INTERESTS:
Madison Square Mall Huntsville, Alabama 100% 934,000 Acquired remaining 50% interest
Madison Plaza Huntsville, Alabama 100% 153,000 Acquired remaining 25% interest
OPENINGS:
Creekwood Crossing Bradenton, Florida 100% 404,000 Kmart, Bealls, Lowes
Parkway Place Huntsville, Alabama 50% 177,000 Parisian, Piccadilly
Meridian Mall Expansion Lansing(Okemos), Michigan 100% 85,000 Jacobson's
The Lakes Mall Muskegon, Michigan 90% 553,000 Yonkers, Sears, JCPenney
Springdale Mall Expansion Mobile, Alabama 100% 45,000 Carmike Cinema
Chesterfield Crossing
Expansion Richmond, Virginia 100% 10,000 Shops
Coastal Way Expansion Spring Hill, Florida 100% 26,000 Office Depot
CBL Center Chattanooga, Tennessee 92% 128,000 Corporate office
Sutton Plaza Mt. Olive, New Jersey 100% 5,000 Blockbuster, Subway
As of December 31, 2001 the Company had in excess of 700,000 square feet
under construction consisting of:
Project Name Location Total GLA Opening Date
- -------------------------------------------------------------------------------------------------------------
Meridian Mall Expansion Lansing (Okemos), Michigan 93,000 November 2002
Parkway Place Huntsville, Alabama 631,000 October 2002
The Company has also entered into a number of option agreements for the
development of future regional malls and community centers. Except for these
projects and as further described below, the Company currently has no other
capital commitments.
It is management's expectation that the Company will continue to have
access to the capital resources necessary to expand and grow its business.
Future development and acquisition activities will be undertaken by the Company
as suitable opportunities arise. Such activities are not expected to be
undertaken unless adequate sources of financing are available and a satisfactory
budget with targeted returns on investment has been internally approved.
The Company will fund its major development, expansion and acquisition
activity with its traditional sources of construction and permanent debt
financing as well as from other debt and equity financings, including public
financings, and its credit facilities.
OTHER CAPITAL EXPENDITURES
Management prepares an annual capital expenditures budget for each property
which is intended to provide for all necessary recurring capital improvements
and maintenance items. Management believes that its annual operating reserve for
maintenance and recurring capital improvements as well as reimbursements from
tenants will provide the necessary funding for such requirements. The Company
intends to distribute approximately 50% to 90% of its funds from operations with
the remaining 10% to 50% to be held as a reserve for capital expenditures and
continued growth opportunities.
46
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Major tenant finish costs for currently vacant space are expected to be
funded with working capital, operating reserves, or revolving lines of credit.
Funds invested for tenant finish costs are expected to earn a return on that
investment. For the year ended December 31, 2001, revenue generating capital
expenditures, or tenant allowances for improvements, were $23.5 million. These
capital expenditures generate a return through increased rents from these
tenants over the term of their leases. Revenue enhancing capital expenditures,
or remodeling and renovation costs, were $26.6 million, the majority of which
was for the renovation of Burnsville Center in Minneapolis (Burnsville),
Minnesota and Meridian Mall in Lansing (Okemos), Michigan in the existing
portfolio and Fashion Square Mall in Saginaw, Michigan and Cary Towne Center in
Cary, North Carolina in the newly acquired portfolio. Certain items of revenue
enhancing capital expenditures such as flooring and parking lot resurfacing are
billed to tenants and a portion is recovered from tenants. Revenue neutral
capital expenditures, such as parking lot and roof repairs, are billed to
tenants and a portion is recovered from tenants. During 2001 Revenue neutral
expenditures were $14.0 million. The billing and recovery of revenue neutral and
certain revenue enhancing expenditures occurs generally over a 10 to 20 year
period.
Environmental Matters
The Company believes that the Properties are in compliance in all material
respects with all federal, state and local ordinances and regulations regarding
the handling, discharge, and emission of hazardous or toxic substances. The
Company has not been notified by any governmental authority and is not otherwise
aware of any material noncompliance, liability, or claim relating to hazardous
or toxic substances in connection with any of its present or former properties.
The Company has not recorded in its financial statements any material liability
in connection with environmental matters.
Cash Flows
Cash flows provided by operating activities for 2001 increased by $51.3
million, or 43.6%, to $169.1 million from $117.8 million in 2000. This increase
was primarily due to increases in cash provided by the operations of thirty-one
new centers opened or acquired in the last twenty-four months offset by
decreases in cash flow from the sales of nineteen properties. Cash flows used in
investing activities for 2001 increased by $80.0 million, or 63.0%, to $207.1
million compared with $127.1 million in 2000. This increase was primarily due to
the acquisition of 21 malls and two associated centers and capital investment in
properties in 2001 compared with the smaller number of acquisitions and capital
investment in 2000. Cash flows provided by financing activities for 2001
increased by $35.6 million, or 482.8%, to $43.0 million from $7.4 million in
2000. This increase is primarily due to increases in the acquisition program.
IMPACT OF INFLATION
In the last three years, inflation has not had a significant impact on the
Company because of the relatively low inflation rate. Substantially all tenant
leases do, however, contain provisions designed to protect the Company from the
impact of inflation. Such provisions include clauses enabling the Company to
receive percentage rentals based on tenants' gross sales, which generally
increase as prices rise, and/or escalation clauses, which generally increase
rental rates during the terms of the leases. In addition, many of the leases are
for terms of less than ten years which may enable the Company to replace
existing leases with new leases at higher base and/or percentage rentals if
rents from the existing leases are below the then-existing market rate. Most of
the leases require the tenants to pay their share of operating expenses,
including common area maintenance, real estate taxes and insurance, thereby
reducing the Company's exposure to increases in costs and operating expenses
resulting from inflation.
CRITICAL ACCOUNTING POLICIES
In December 2001, the Securities and Exchange Commission requested that all
registrants list their most "critical accounting policies" in MD&A. The SEC
indicated that a "critical accounting policy" is one which is both important to
the portrayal of a company's financial condition and results and requires
significant judgement or complex estimation processes. Management believes that
the Company's accounting policies that are the most significant and that require
the most judgement are within its accounting for the development of real estate
projects. Management believes that the following accounting policies within this
process fit the definition described above. The Company capitalizes
predevelopment costs paid to third parties incurred on a project. All previously
47
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
capitalized predevelopment costs are expensed when it is no longer probable that
the project will be completed. Once development of a project commences, the
Company capitalizes all direct costs incurred to construct the project,
including interest and real estate taxes. In addition, certain general and
administrative expenses are allocated to the projects and capitalized based on
the personnel assigned to development and the investment in the project relative
to all development projects. Once a project is completed and placed in service,
it is depreciated over its estimated useful life. Buildings and improvements are
depreciated generally over 40 years and leasehold improvements are amortized
over the lives of the applicable leases or the estimated useful life of the
asset, whichever is shorter.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142 "Goodwill and Other Intangible Assets" (collectively the
"Standards"). The Standards will be effective for fiscal years beginning after
December 15, 2001. Companies with fiscal years beginning after March 15, 2001
may early adopt, but only as of the beginning of that fiscal year and only if
all existing goodwill is evaluated for impairment by the end of that fiscal
year. SFAS No. 141 will require companies to recognize acquired identifiable
assets separately from goodwill if control over the future economic benefits of
the assets results from contractual or other legal rights or the intangible
assets is capable of being separated or divided and sold, transferred, licensed,
rented, or exchanged. The Standards will require the value of separately
identifiable intangible assets meeting any of the criteria to be measured at its
fair value. SFAS No. 142 will require that goodwill not be amortized, and that
amounts recorded as goodwill be tested for impairment. Upon adoption of SFAS No.
142, goodwill will be reduced if it is found to be impaired. Annual impairment
tests will have to be performed at the lowest level of an entity that is a
business and that can be distinguished, physically and operationally and for
internal reporting purposes, from the other activities, operations, and assets
of the entity. The Company believes the impact of the new goodwill impairment
standards will not have a material impact on the Company's financial position or
results of operations.
In August 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment
or Disposal of Long-Lived Assets". SFAS No. 144 addresses financial accounting
and reporting for the impairment of long-lived assets and for long-lived assets
to be disposed of. SFAS No. 144 supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of""
and among other factors, establishes criteria beyond that previously specified
in SFAS No. 121 to be determine when a long-lived asset is to be considered as
held for sale. The Company adopted SFAS No. 144 effective January 1, 2002 and is
currently evaluating its impact.
Funds from Operations
Management believes that Funds from Operations ("FFO") provides an
additional indicator of the financial performance of the Properties. FFO is
defined by the Company as net income (loss) before depreciation of real estate
assets, gains or losses on sales of real estate and gains or losses on
investments in marketable securities. FFO also includes the Company's share of
FFO in unconsolidated properties and excludes minority interests' share of FFO
in consolidated properties. The Company computes FFO in accordance with the
National Association of Real Estate Investment Trusts' ("NAREIT") recommendation
concerning finance costs and non-real estate depreciation. The Company excludes
gains or losses on outparcel sales, even though NAREIT permits their inclusion
when calculating FFO. Gains on outparcel sales would have added $2.2 million to
FFO in 2001 compared with $5.4 million in 2000.
The use of FFO as an indicator of financial performance is influenced not
only by the operations of the Properties, but also by the capital structure of
the Operating Partnership and the Company. Accordingly, management expects that
FFO will be one of the significant factors considered by the Board of Directors
in determining the amount of cash distributions the Operating Partnership will
make to its partners (including the Company). Management also believes that FFO
is a widely used measure of the operating performance of REITs and provides a
relevant basis for comparison among companies. FFO does not represent cash flow
from operations as defined by accounting principles generally accepted in the
United States ("GAAP"), is not necessarily indicative of cash from operations
available to fund all cash flow needs, and should not be considered as an
alternative to net income for purposes of evaluating the Company's operating
performance, for evaluating the impact of capital investments in the Company's
properties or to cash flows as a measure of liquidity.
Effective January 1, 2000, NAREIT clarified FFO to include all operating
results - recurring and non-recurring - except those results defined as
"extraordinary items" under accounting principles generally accepted in the
United States. The Company implemented this clarification in the first quarter
of 2000 and no longer adds back to FFO the write-off of development costs
charged to net income. This amount was $2,032,000 for the year ended December
31, 2001 and $127,000 for the year ended December 31, 2000. The cost of interest
rate caps and finance costs on the Company's lines of credit are amortized and
included in interest expense and, therefore, reduces FFO.
48
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial
Condition and Results of Operations
In 2001, FFO increased by $62.0 million, or 46.9%, to $194.0 million
compared with $132.0 million in 2000. The increase in FFO was primarily
attributable to the income from operations from twenty-three Newly Acquired
Properties and the opening and acquisitions of eight properties in the last
twenty-four months and higher rents in the Company's stabilized portfolio offset
by decreases in FFO from the sales of properties.
The Company's calculation of FFO is as follows (in thousands):
Three Months Year Ended
Ended December 31, December 31,
---------------------------- -----------------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
Income from operations 31,767 20,622 108,003 76,461
ADD:
Depreciation and amortization from
consolidated properties 22,974 15,644 87,624 60,646
Income from operations of
unconsolidated affiliates 2,412 1,099 7,155 3,684
Depreciation and amortization from
unconsolidated affiliates 985 288 3,765 1,511
SUBTRACT:
Minority investors' share of income
from operations (343) (516) (1,698) (1,538)
Minority investors' share of
depreciation and amortization (275) (245) (1,096) (981)
Depreciation and amortization of non-real
estate assets and finance costs (929) (301) (3,284) (1,281)
Preferred dividends (1,617) (1,617) (6,468) (6,468)
----------- ----------- ----------- -----------
TOTAL FUNDS FROM OPERATIONS $ 54,974 $ 34,974 $ 194,001 $ 132,034
=========== =========== =========== ===========
49
CBL & Associates Properties, Inc - 2001 Form 10K
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has managed the market risk for its variable rate debt with
derivative financial instruments. The derivative instruments are described in
the Liquidity and Capital Resources section in Item 7 above and in Note 9 to the
Financial Statements.
The fair value of the Company's long term debt is estimated based on
discounted cash flows at interest rates that management believes reflects the
risks associated with long term debt of similar risk and duration.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Reference is made to the Index to Financial statements contained in Item 14
on page 56.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Incorporated herein by reference from the Company's most recent definitive
proxy statement filed on with the Securities and Exchange Commission (the
"Commission") with respect to its Annual Meeting of Stockholders to be held on
May 7, 2002.
ITEM 11. EXECUTIVE COMPENSATION.
Incorporated herein by reference from the Company's most recent definitive
proxy statement filed with the Commission with respect to its Annual Meeting of
Stockholders to be held on May 7, 2002.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Incorporated herein by reference from the Company's most recent definitive
proxy statement filed with the Commission with respect to its Annual Meeting of
Stockholders to be held on May 7, 2002.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Incorporated herein by reference from the Company's most recent definitive
proxy statement filed with the Commission with respect to its Annual Meeting of
Stockholders to be held on May 7, 2002.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(1) Financial Statements Page Number
Report of Independent Public Accountants 59
CBL & Associates Properties, Inc. Consolidated Balance 60
Sheets as of December 31, 2001 and 2000
50
CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc. Consolidated 61
Statements of Operations for the Years Ended
December 31, 2001, 2000 and 1999
CBL & Associates Properties, Inc. Consolidated 62
Statements of Cash Flows for the Years Ended
December 31, 2001, 2000 and 1999
CBL & Associates Properties, Inc. Consolidated 63
Statements of Shareholders' Equity for the Years
Ended December 31, 2001, 2000 and 1999
Notes to Financial Statements 64
(2) Financial Statement Schedules
Schedule II Allowance For Credit Losses 78
Schedule III Real Estate and Accumulated Depreciation 79
Schedule IV Mortgage Loans on Real Estate 87
Financial Statement Schedules not listed herein are either not required or
are not present in amounts sufficient to require submission of the schedule or
the information required to be included therein is included in the Company's
Consolidated Financial Statements in item 14 or are reported elsewhere.
(3) Exhibits
Exhibit
Number Description
3.1 -- Amended and Restated Certificate of Incorporation of the
Company, dated November 2, 1993(a)
3.2 -- Amended and Restated Bylaws of the Company, dated
October 27, 1993(a)
3.3 -- Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, dated May 2, 1996, see page 94
3.4 -- Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, dated January 31, 2001,
see page 106
4.1 -- See Amended and Restated Certificate of Incorporation of the
Company, relating to the Common Stock(a)
4.2 -- Certificate of Designations, dated June 25, 1998, relating to
the 9% Series A Cumulative Redeemable Preferred Stock, see
page 110
4.3 -- Certificate of Designation, dated April 30, 1999, relating to
the Series 1999 Junior Participating Preferred Stock, see page 117
4.4 -- Terms of Series J Special Common Units of the Operating
Partnership, pursuant to Article 4.4 of the Second Amended and
Restated Partnership Agreement of the Operating Partnership,
see page 123
10.1.1 -- Second Amended and Restated Agreement of the Operating
Partnership dated June 30, 1998(p)
10.1.2 -- First Amendment to Second Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, dated
January 31, 2001, see page 134
10.2.1 -- Rights Agreement by and between the Company and BankBoston,
N.A., dated as of April 30, 1999(q)
51
CBL & Associates Properties, Inc - 2001 Form 10K
10.2.2 -- Amendment No. 1 to Rights Agreement by and between the Company
and SunTrust Bank(successor to BankBoston), dated
January 31, 2001, see page 158
10.3 -- Property Management Agreement between the Operating Partnership
and the Management Company(a)
10.4 -- Property Management Agreement relating to Retained Properties(a)
10.5.1 -- CBL & Associates Properties, Inc. 1993 Stock Incentive Plan(a)+
10.5.2 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Charles B. Lebovitz+
10.5.3 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
James L. Wolford+
10.5.4 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
John N. Foy+
10.5.5 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Jay Wiston+
10.5.6 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Ben S. Landress+
10.5.7 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Stephen D. Lebovitz+
10.5.8 -- Stock Restriction Agreement, dated December 28, 1994, for
Charles B. Lebovitz+
10.5.9 -- Stock Restriction Agreement, dated December 2, 1994, for
John N. Foy+
10.5.10 -- Stock Restriction Agreement, dated December 2, 1994, for
Jay Wiston+
10.5.11 -- Stock Restriction Agreement, dated December 2, 1994, for
Ben S. Landress+
10.5.12 -- Stock Restriction Agreement, dated December 2, 1994, for
Stephen D. Lebovitz+
10.6.1 -- Purchase Agreement relating to Frontier Mall(b)
10.6.2 -- Purchase Agreement relating to Georgia Square (JMB)(b)
10.6.3 -- Purchase Agreement Relating to Georgia Square (JCPenney)(b)
10.6.4 -- Purchase Agreement relating to Post Oak Mall(b)
10.7 -- Indemnification Agreements between the Company and the
Management Company and their officers and directors(a)
10.8.1 -- Employment Agreement for Charles B. Lebovitz(a)+
10.8.2 -- Employment Agreement for James L. Wolford(a)+
10.8.3 -- Employment Agreement for John N. Foy(a)+
10.8.4 -- Employment Agreement for Jay Wiston(a)+
10.8.5 -- Employment Agreement for Ben S. Landress(a)+
10.8.6 -- Employment Agreement for Stephen D. Lebovitz(a)+
10.9 -- Subscription Agreement relating to purchase of the Common
Stock and Preferred Stock of the Management Company(a)
52
CBL & Associates Properties, Inc - 2001 Form 10K
10.10.1 -- Option Agreement relating to certain Retained Properties(a)
10.10.2 -- Option Agreement relating to Outparcels(a)
10.11.1 -- Property Partnership Agreement relating to Hamilton Place(a)
10.11.2 -- Property Partnership Agreement relating to CoolSprings
Galleria(a)
10.12.1 -- Acquisition Option Agreement relating to Hamilton Place(a)
10.12.2 -- Acquisition Option Agreement relating to the Hamilton Place
Centers(a)
10.12.3 -- Acquisition Option Agreement relating to the Office Building(a)
10.13.1 -- Revolving Credit Agreement between the Operating Partnership
and First Tennessee Bank, National Association, dated as of
March 2, 1994(c)
10.13.2 -- Revolving Credit Agreement, between the Operating Partnership and
Wells Fargo Advisors Funding, Inc., NationsBank of Georgia, N.A.
and First Bank National Association, dated July 28, 1994, (d)
10.13.3 -- Revolving Credit Agreement, between the Operating Partnership
and American National Bank and Trust Company of Chattanooga,
dated October 14, 1994, (e)
10.13.4 -- Revolving Credit Agreement, between the Operating Partnership
and First Tennessee Bank National Association, dated
November 2, 1994 (e)
10.14 -- Promissory Note Agreement between the Operating Partnership
and Union Bank of Switzerland, dated May 5, 1995(f)
10.15 -- Amended and Restated Loan Agreement between the Operating
Partnership and First Tennessee Bank National Association, dated
July 12, 1995(g)
10.16 -- Second Amendment to Credit Agreement between the Operating
Partnership and Wells Fargo Realty Advisors Funding, Inc. dated
July 5, 1995(g)
10.17 -- Consolidation, Amendment, Renewal, and Restatement of Notes
between the Galleria Associates, L.P. and The Northwestern
Mutual Life Insurance Company(h)
10.18.1 -- Promissory Note Agreement between High Point Development
Limited Partnership and The Northwestern Mutual Life Insurance
Company, dated January 26, 1996(i)
10.18.2 -- Promissory Note Agreement between Turtle Creek Limited
Partnership and Connecticut General Life Insurance Company,
dated February 14, 1996(i)
10.19 -- Amended and Restated Credit Agreement between the Operating
Partnership and Wells Fargo Bank N.A. etal, dated
September 26, 1996(j)
10.20 -- Promissory Note Agreement between the Operating Partnership
and Compass Bank dated, September 17, 1996. (j)
10.21.1 -- Promissory Note Agreement between St Clair Square Limited
Partnership and Wells Fargo National Bank, dated
December 11, 1996(k)
10.21.2 -- Promissory Note Agreement between Lebcon Associates and
Principal Mutual Life Insurance Company dated,
March 18, 1997(k)
53
CBL & Associates Properties, Inc - 2001 Form 10K
10.21.3 -- Promissory Note Agreement between Westgate Mall Limited
Partnership and Principal Mutual Life Insurance Company
dated, February 16, 1997(k)
10.22.1 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank etal,
dated February 24, 1997(k)
10.22.2 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank etal,
dated July 29, 1997(l)
10.22.3 -- Second Amended and Restated Credit Agreement between the
Operating Partnership and Wells Fargo Bank N.A. etal,
dated June 5, 1997, effective April 1,1997(l)
10.22.4 -- First Amendment to Second Amended and Restated Credit Agreement
between the Operating Partnership and Wells Fargo Bank N.A. etal,
dated November 11, 1997(l)
10.23.1 -- Loan Agreement between Asheville LLC and Wells Fargo Bank
N.A., dated February 17, 1998(l)
10.23.2 -- Loan Agreement between Burnsville Minnesota LLC and U.S.
Bank National Association dated January 30, 1998(l)
10.24 -- Loan agreement with South Trust Bank, dated January 15 , 1998(m)
10.25 -- Loan agreement between Rivergate Mall Limited Partnership, The
Village at Rivergate Limited Partnership, Hickory Hollow Mall
Limited Partnership, and The Courtyard at Hickory Hollow Limited
Partnership and Midland Loan Services, Inc., Dated
July 1, 1998(n)
10.26.1 -- Amended and restated Loan Agreement between the Company and
First Tennessee Bank National Association, Dated June 12, 1998(o)
10.26.2 -- First Amendment To Third Amended And Restated Credit Agreement
and Third Amended And Restated Credit Agreement between the
Company and Wells Fargo Bank, National Association, dated
August 4, 1998(o)
10.27 -- Promissory Note with Teachers Insurance and Annuity Association
of American and St. Clair Square Limited Partnership Bank,
dated March 11, 1999(p)
10.28 -- Promissory Note with Wells Fargo Bank National Associates and
Parham Road Limited Partnership (York Galleria), dated
July 1, 1999(r)
10.29 -- Agreement of Purchase and Sale By and Between YGL Partners and
the Operating Partnership assigned to Parham Road Limited
Partnership (York Galleria), dated February 2, 1999(r)
10.30.1 -- Master Contribution Agreement, dated as of September 25, 2000,
by and among the Company, the Operating Partnership and the
Jacobs entities(s)
10.30.2 -- Amendment to Master Contribution Agreement, dated as of
September 25, 2000, by and among the Company, the Operating
Partnership and the Jacobs entities(t)
10.31 -- Share Ownership Agreement by and among the Company and its
related parties and the Jacobs entities, dated as of
January 31, 2001(t)
10.32.1 -- Registration Rights Agreement by and between the Company and
the Holders of SCU's listed on Schedule 1 thereto, dated as
of January 31, 2001(t)
54
CBL & Associates Properties, Inc - 2001 Form 10K
10.32.2 -- Registration Rights Agreement by and between the Company
and Frankel Midland Limited Partnership, dated as of
January 31, 2001(t)
10.32.3 -- Registration Rights Agreement by and between the Company
and Hess Abroms Properties of Huntsville, dated as of
January 31, 2001(t)
10.33 -- Loan Agreement by and between the Operating Partnership, Wells
Fargo Bank, National Association, Fleet National Bank, U.S.
Bank National Association, Commerzbank AG, New York And Grand
Cayman Branches, and Keybank National Association, together with
certain other lenders parties thereto pursuant to Section 8.6
thereof, dated as of January 31, 2001(t)
21 -- Subsidiaries of the Company, see page 161
23 -- Consent of Arthur Andersen LLP, see page 166
24 -- Power of Attorney, see page 167
(a) Incorporated by reference to Post-Effective Amendment No. 1 to the
Company's Registration Statement on Form S-11 (No. 33-67372), as filed
with the Commission on January 27, 1994.
(b) Incorporated by reference to Amendment No. 2 to the Company's Registration
Statement on Form S-11 (No. 33-67372), as filed with the Commission on
October 26, 1993.
(c) Incorporated herein by reference to the Company's Annual Report in Form
10-K for the fiscal year ended December 31, 1993.
(d) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1994.
(e) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1994.
(f) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995.
(g) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995.
(h) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995.
(i) Incorporated by reference to the Company's Annual Report in Form 10-K for
the fiscal year ended December 31, 1995.
(j) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1996.
(k) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996.
(l) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997.
(m) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1998.
(n) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998.
(o) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998.
(p) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999.
55
CBL & Associates Properties, Inc - 2001 Form 10K
(q) Incorporated by reference to the Company's Current Report on Form 8-K,
filed on May 4, 1999.
(r) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999.
(s) Incorporated by reference from the Company's Current Report on Form 8-K,
filed on October 27, 2000.
(t) Incorporated by reference from the Company's Current Report on Form 8-K,
filed on February 6, 2001.
+ A management contract or compensatory plan or arrangement required to be
filed pursuant to Item 14(c) of this report.
(b) Reports on Form 8-K
The outline from the Company's October 31, 2001 conference call with analysts
regarding earnings (item 5) was filed on October 31, 2001.
The outline from the Company's February 7, 2002 conference call with analysts
regarding earnings (Item 5) was filed on February 7, 2002.
56
CBL & Associates Properties, Inc - 2001 Form 10K
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CBL & ASSOCIATES PROPERTIES, INC.
(Registrant)
By: /s/ Charles B. Lebovitz
------------------------------------------
Charles B. Lebovitz
Chairman of the Board,
and Chief Executive Officer
Dated: March 8, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Charles B. Lebovitz Chairman of the Board March 8, 2002
- ------------------------ and Chief
Charles B. Lebovitz Executive Officer
(Principal Executive Officer)
/s/ John N. Foy Vice Chairman of the Board, March 8, 2002
- ------------------------ Chief Financial Officer and
John N. Foy Treasurer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ Stephen D. Lebovitz Director, President March 8, 2002
- ------------------------ and Secretary
Stephen D. Lebovitz
/s/ Claude M.Ballard Director March 8, 2002
- ------------------------
Claude M. Ballard
/s/ Leo Fields Director March 8, 2002
- ------------------------
Leo Fields
/s/ William J.Poorvu Director March 8, 2002
- ------------------------
William J. Poorvu
/s/ Winston W. Walker Director March 8, 2002
- ------------------------
Winston W. Walker
/s/ Gary L. Bryenton Director March 8, 2002
- ------------------------
Gary L. Bryenton
/s/ Martin J. Cleary Director March 8, 2002
- ------------------------
Martin J. Cleary
*By: /s/ Charles B. Lebovitz
------------------------
Charles B. Lebovitz Attorney-in-Fact March 8, 2002
57
CBL & Associates Properties, Inc - 2001 Form 10K
INDEX TO FINANCIAL STATEMENTS
Report of Independent Public Accountants 59
CBL & Associates Properties, Inc. Consolidated Balance Sheets as of 60
December 31, 2001 and 2000
CBL & Associates Properties, Inc. Consolidated Statements of 61
Operations for the Years Ended December 31, 2001, 2000
and 1999
CBL & Associates Properties, Inc. Consolidated Statements of 62
Cash Flows for the Years Ended December 31, 2001, 2000
CBL & Associates Properties, Inc. Consolidated Statements of 63
Shareholders' Equity for the Years Ended December 31,
2001, 2000 and 1999
Notes to Financial Statements 64
Schedule II Allowance For Credit Losses 78
Schedule III Real Estate and Accumulated Depreciation 79
Schedule IV Mortgage Loans on Real Estate 87
58
CBL & Associates Properties, Inc - 2001 Form 10K
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To CBL & Associates Properties, Inc.:
We have audited the accompanying consolidated balance sheets of CBL &
ASSOCIATES PROPERTIES, INC. (a Delaware corporation) and subsidiaries as of
December 31, 2001 and 2000, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three years in
the period ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of CBL & Associates Properties,
Inc. and subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the index to
financial statements are presented for the purpose of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Chattanooga, Tennessee
February 6, 2002
59
CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
Year Ended December 31,
-------------------------------
2001 2000
------------- -------------
ASSETS
REAL ESTATE ASSETS:
Land $ 520,334 $ 290,366
Buildings and improvements 2,961,185 1,919,619
------------- -------------
3,481,519 2,209,985
Less: Accumulated depreciation (346,940) (271,046)
------------- -------------
3,134,579 1,938,939
Developments in progress 67,043 101,675
------------- -------------
Net investment in real estate 3,201,622 2,040,614
CASH AND CASH EQUIVALENTS 10,137 5,184
RECEIVABLES:
Tenant, net of allowance for doubtful accounts of $2,865 38,353 29,641
In 2001 and $1,854 in 2000
Other 2,833 3,472
MORTGAGE NOTES RECEIVABLE 10,634 8,756
INVESTMENT IN UNCONSOLIDATED AFFILIATES 77,673 -
OTHER ASSETS 31,599 27,898
------------- -------------
$ 3,372,851 $ 2,115,565
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
MORTGAGE AND OTHER NOTES PAYABLE $ 2,315,955 $ 1,424,337
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 103,707 78,228
------------- -------------
Total liabilities 2,419,662 1,502,565
COMMITMENTS AND CONTINGENCIES (Notes 3, 5 and 14)
DISTRIBUTIONS AND LOSSES IN EXCESS OF INVESTMENT - 3,510
IN UNCONSOLIDATED AFFILIATES
------------- -------------
MINORITY INTERESTS 431,101 174,665
------------- -------------
SHAREHOLDERS' EQUITY:
Preferred Stock, $.01 per value, 5,000,000 shares authorized, 29 29
2,875,000 shares issued and outstanding in 2001 and 2000
Common Stock, $.01 par value, 95,000,000 shares authorized, 256 251
25,616,917 and 25,067,287 shares issued and outstanding in
2001 and 2000, respectively
Additional paid-in capital 556,383 462,480
Other comprehensive loss (6,784) -
Accumulated deficit (27,796) (27,935)
------------- -------------
Total shareholders' equity 522,088 434,825
------------- -------------
$ 3,372,851 $ 2,115,565
============= =============
The accompanying notes are an integral part of these balance sheets
60
CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Year Ended December 31,
-------------------------------------------
2001 2000 1999
---------- --------- --------
REVENUES
Rentals:
Minimum $ 352,305 $225,460 $203,022
Percentage 9,670 8,760 7,356
Other 10,613 6,246 5,442
Tenant reimbursements 161,834 106,764 89,774
Management, development and leasing fees 5,147 4,170 7,818
Interest and other 4,806 5,088 4,191
---------- --------- --------
Total revenues 544,375 356,488 317,603
---------- --------- --------
EXPENSES:
Property operating 97,173 57,301 50,832
Depreciation and amortization 87,624 60,646 53,551
Real estate taxes 44,455 30,398 27,580
Maintenance & repair 31,804 19,192 17,783
General & administrative 18,807 17,766 16,214
Interest expense 154,477 94,597 82,505
Other 2,032 127 1,674
---------- --------- --------
Total expenses 436,372 280,027 250,139
---------- --------- --------
INCOME FROM OPERATIONS 108,003 76,461 67,464
GAIN ON SALES OF REAL ESTATE ASSETS 10,649 15,989 8,357
EQUITY IN EARNINGS OF UNCONSOLIDATED 7,155 3,684 3,263
AFFILIATES
MINORITY INTEREST IN EARNINGS:
Operating Partnership (49,643) (28,507) 23,264)
Shopping center properties (1,698) (1,538) (1,225)
---------- --------- --------
INCOME BEFORE EXTRAORDINARY ITEM 74,466 66,089 54,595
EXTRAORDINARY LOSS ON EXTINGUISHMENT OF DEBT (13,558) (367) -
---------- --------- --------
NET INCOME 60,908 65,722 54,595
PREFERRED DIVIDENDS (6,468) (6,468) (6,468)
---------- --------- --------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 54,440 $ 59,254 $ 48,127
========== ========= ========
BASIC EARNINGS PER SHARE:
Income before extraordinary item $ 2.68 $ 2.40 $ 1.95
Extraordinary loss on extinguishment of debt (0.53) (0.01) -
---------- --------- --------
Net income $ 2.15 $ 2.38 $ 1.95
========== ========= ========
Weighted average common shares outstanding 25,358 24,881 24,647
DILUTED EARNINGS PER SHARE:
Income before extraordinary item $ 2.63 $ 2.38 $ 1.94
Extraordinary loss on extinguishment of debt (0.52) (0.01) -
---------- --------- --------
Net income $ 2.11 $ 2.37 $ 1.94
========== ========= ========
Weighted average common shares and potential dilutive
common shares outstanding 25,833 25,021 24,834
The accompanying notes are an integral part of these statements.
61
CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc.
Consolidated Statements of Cash Flows
(In thousands)
Year Ended December 31,
--------------------------------------
2001 2000 1999
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income
Adjustments to reconcile net income to net cash $60,908 $65,722 $54,595
provided by operating activities
Minority interest in earnings 51,341 30,045 24,489
Depreciation 75,905 47,329 44,245
Amortization 13,539 14,581 10,485
Extraordinary loss on extinguishment of debt 13,558 367 -
Gain on sales of real estate assets (10,649) (15,989) (8,357)
Equity in earnings of unconsolidated affiliates (7,155) (3,684) (3,263)
Issuance of stock under incentive plan 1,926 1,634 914
Amortization of deferred compensation - - 510
Write-of of development projects 2,032 127 1,674
Distributions from unconsolidated affiliates 13,010 9,256 10,547
Distributions to minority interests (49,805) (25,327) (23,645)
Changes in assets and liabilities:
Tenant and other receivable (8,586) (10,020) (3,680)
Other Assets (5,107) (2,156) (1,211)
Accounts payable and accrued liabilities 18,208 5,929 6,893
-------- -------- --------
Net cash provided by operating activities 169,125 117,814 114,196
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate assets (74,890) (139,884) (147,894)
Acquisitions of real estate assets (114,703) (11,089) (69,027)
Capitalized interest (5,860) (6,288) (6,749)
Other capital expenditures (63,115) (24,654) (29,830)
Proceeds from sales of real estate assets 79,572 67,865 50,373
Additions to mortgage notes receivable (1,604) (825) (1,690)
Payments received on mortgage notes receivable 996 1,454 1,423
Additional investments in and advances to (23,506) (5,247) (4,927)
unconsolidated affiliates
Additions to other assets (4,012) (8,405) (3,820)
-------- -------- --------
Net cash used in investing activities (207,122) (127,073) (212,141)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage and other notes payable 763,235 256,220 237,716
Principal payments on mortgage and other notes (650,584) (192,636) (85,167)
payable
Additions to deferred financing costs (7,904) (3,568) (2,075)
Proceeds from issuance of common stock 2,832 1,711 1,241
Purchase of minority interest - (761) -
Proceeds from exercise of stock options 8,323 3,263 1,470
Prepayment penalties on extinguishment of debt (13,038) (184) -
Dividends paid (59,914) (56,676) 53,993)
-------- -------- --------
Net cash provided by financing activities 42,950 7,369 99,192
-------- -------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS 4,953 (1,890) 1,247
CASH AND CASH EQUIVALENTS, beginning of period 5,184 7,074 5,827
-------- -------- --------
CASH AND CASH EQUIVALENTS, end of period 10,137 $5,184 7,074
======== ======== ========
SUPPLEMENTAL INFORMATION
Cash paid during the period for interest, net of $151,397 $94,405 $81,181
amounts capitalized
======== ======== ========
Debt assumed in acquisition of property interests $778,967 $ - $ -
======== ======== ========
Issuance of minority interests in acquisition of $345,925 $ 27 $ 1,928
property interests
======== ======== ========
The accompanying notes are an integral part of these statements.
62
CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc.
Consolidated Statements Of Shareholders' Equity
(In thousands, except per share data)
Additional Other
Preferred Paid-in Comprehensive Accumulated Deferred
Stock Common Stock Capital Loss Deficit Compensation Total
--------- ------------ ---------- ------------- ----------- ------------ ---------
Balance December 31, 1998 $ 29 $ 246 $ 452,252 $ - $ (36,235) $ (510) $ 415,782
Net income - - - - 54,595 - 54,595
Dividends, $1.95 per common share - - - - (48,157) - (48,157)
Dividends, $2.25 per preferred share - - - - (6,468) - (6,468)
Issuance of 93,661 shares of common stock - 1 2,154 - - - 2,155
Exercise of stock options - 1 1,469 - - - 1,470
Amortization of deferred compensation - - - - - 510 510
--------- ------------ ---------- ------------- ----------- ------------ ----------
Balance December 31, 1999 29 248 455,875 - (36,265) - 419,887
Net income - - - - 65,722 - 65,722
Dividends, $2.04 per common share - - - - (50,924) - (50,924)
Dividends, $2.25 per preferred share - - - - (6,468) - ( 6,468)
Issuance of 152,311 shares of common stock - 2 3,343 - - - 3,345
Exercise of stock options - 1 3,262 - - - 3,263
--------- ------------ ---------- ------------- ----------- ------------ ----------
Balance December 31, 2000 29 251 462,480 - (27,935) - 434,825
Net income - - - - 60,908 - 60,908
Dividends, $2.13 per common share - - - - (54,301) - (54,301)
Dividends, $2.25 per preferred share - - - - (6,468) - (6,468)
Loss on current period cash flow hedges - - - (6,784) - - (6,784)
Issuance of 174,280 shares of common stock - 2 4,756 - - - 4,758
Issuance of minority interest in Operating - - 80,827 - - - 80,827
Partnership
Exercise of stock options - 3 8,320 - - - 8,323
--------- ------------ ---------- ------------- ----------- ------------ ----------
Balance December 31, 2001 $ 29 $ 256 $ 556,383 $ (6,784) (27,796) $ - $ 522,088
========= ============ ========== ============= =========== ============ ==========
63
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
CBL & Associates Properties, Inc. (the "Company"), a Delaware corporation,
is engaged in the development, acquisition, and operation of regional shopping
malls and community centers, primarily in the Southeast and select markets in
the Northeast and Midwest regions of the United States. The Company is the 100%
owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings
II, Inc., which are the sole general partner and majority owner, respectively,
of CBL & Associates Limited Partnership (the "Operating Partnership"). As a
result, the Company conducts its business through the Operating Partnership,
which at December 31, 2001, owns controlling interests in a portfolio of
properties consisting of 45 regional malls; 16 associated centers, each of which
is part of a regional shopping mall complex; two power centers; 68 community
centers; and two office buildings. Additionally, the Operating Partnership owns
non-controlling interests in seven regional malls and two associated centers.
The Operating Partnership has one mall and one mall expansion currently under
construction and has options to acquire certain development properties owned by
third parties. At December 31, 2001, CBL Holdings I, Inc. owned a 1.9% general
partnership interest and CBL Holdings II, Inc. owned a 49.2% limited partnership
interest in the Operating Partnership for a combined interest held by the
Company of 51.1%.
The minority interest in the Operating Partnership is held primarily by CBL
& Associates, Inc. and its affiliates (collectively "CBL") and by affiliates of
the Richard E Jacobs Group, Inc. ("Jacobs"). CBL contributed their interests in
certain real estate properties and joint ventures to the Operating Partnership
in exchange for a limited partnership interest in connection with the formation
of the Operating Partnership in November 1993. Jacobs contributed their
interests in certain real estate properties and joint ventures to the Operating
Partnership in exchange for a limited partnership interest in connection with
the acquisition by the Operating Partnership of 23 properties discussed in Note
3. At December 31, 2001, CBL and Jacobs owned a 17.7% and 22.8% limited
partnership interest in the Operating Partnership, respectively (Note 11).
To comply with certain technical requirements of the Internal Revenue Code
of 1986, as amended (the "Code"), the Operating Partnership carries out the
Company's property management and development activities through CBL &
Associates Management, Inc. (the "Management Company"). The Operating
Partnership holds 100% of the preferred stock and 5% of the common stock of the
Management Company, with CBL holding the remaining 95% of the common stock.
Through the ownership of the preferred stock, the Operating Partnership receives
substantially all of the cash flow and, therefore, enjoys substantially all of
the economic benefits of the Management Company's operations. Due to the
Company's ability, as sole general partner, to control the Operating Partnership
and the Operating Partnership's rights to substantially all of the economic
benefits of the Management Company, the accounts of each entity are included in
the accompanying consolidated financial statements. The Company, the Operating
Partnership, and the Management Company are referred to collectively as the
"Company".
All significant intercompany balances and transactions have been eliminated
in the consolidated presentation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Real Estate Assets
Costs directly related to the development of real estate assets, including
overhead costs directly attributable to property development, are capitalized.
Interest costs incurred during the development and construction period are
capitalized.
Ordinary repairs and maintenance are expensed as incurred. Major
replacements and improvements are capitalized and depreciated over their
estimated useful lives. Depreciation is computed on a straight-line basis
generally over 40 years for buildings, 10 to 20 years for certain improvements
and seven to ten years for equipment and fixtures. Tenant improvements are
capitalized and depreciated on a straight-line basis over the life of the
related lease.
64
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
Long-Lived Assets
The Company periodically evaluates the carrying value of long-lived assets
to be held and used when events or changes in circumstances warrant such a
review. The carrying value of a long-lived asset is considered impaired when the
projected undiscounted future cash flow of such asset is less than its carrying
value. Management believes that no material impairment existed at December 31,
2001, and accordingly, no loss was recognized.
Cash and Cash Equivalents
Cash and cash equivalents include all cash and cash equivalent investments
with original maturities of three months or less, primarily consisting of demand
deposits in banks.
Deferred Financing Costs
Deferred financing costs are included in other assets in the accompanying
consolidated balance sheets, include fees and costs incurred to obtain long-term
financing, and are being amortized and charged to interest expense over the
terms of the respective notes payable. Amortization expense was $4,766,000,
$2,072,000 and $1,506,000 in 2001, 2000, and 1999, respectively. Accumulated
amortization was $13,096,000 and $9,872,000 as of December 2001 and 2000,
respectively. Unamortized deferred financing costs are written off when notes
payable are retired before the maturity date.
Revenue Recognition
Rental revenue attributable to operating leases is recognized on a
straight-line basis over the initial term of the related leases. Certain tenants
are required to pay additional rent if sales volume exceeds specified amounts.
The Company recognizes this additional rent as revenue when such amounts become
determinable. A substantial portion of the Company's rental income is derived
from various national and regional retail companies.
Tenant Reimbursements
The Company receives reimbursements from tenants for certain costs as
provided in the lease agreements. These costs consist of real estate taxes,
common area maintenance, and other recoverable costs. Tenant reimbursements are
recognized as revenue in the period the costs are incurred.
Management, Development and Leasing Fees
The Company's derives its management fees and development fees from third
parties and unconsolidated affiliates. Management fees are charged as a
percentage of rentals and are recognized as revenue as they are earned. Leasing
fees are charged for newly executed leases. These fees are recognized as
revenues as they are earned. Development fees are recognized as revenue on a pro
rata basis over the development period.
Gain on Sales of Real Estate Assets
Gain on sales of real estate assets is recognized at the time title to the
asset is transferred to the buyer, subject to the adequacy of the buyer's
initial and continuing investment and the assumption by the buyer of all future
ownership risks of the asset.
Income Taxes
The Company is qualified as a real estate investment trust under Sections
856 through 860 of the Code and applicable treasury regulations. In order to
maintain qualification as a real estate investment trust, the Company is
currently required to distribute at least 90% of its taxable income to
shareholders and meet certain other asset and income tests as well as other
requirements. As a real estate investment trust, the Company will generally not
be liable for federal corporate income taxes. Thus, no provision for federal
income taxes has been included in the accompanying consolidated financial
statements. If the Company fails to qualify as a real estate investment trust in
any taxable year, the Company will be subject to federal income tax on its
taxable income at regular corporate tax rates. Even if the Company maintains its
qualification for taxation as a real estate investment trust, the Company may be
subject to certain state and local taxes on its income and property, and to
federal income and excise taxes on its undistributed income. State income taxes
were not significant in 2001, 2000 and 1999.
65
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
Derivative Financial Instruments
Interest rate cap and swap agreements, which are principally used by the
Company in the management of interest rate exposure, are accounted for on an
accrual basis. At January 1, 2001, the Company implemented Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities", as amended, ("SFAS No. 133") which
establishes accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded in the balance sheet as either an asset or liability
measured at its fair value. Amounts to be paid or received under interest rate
cap and swap agreements are recorded in interest expense in the period in which
they accrue. See Note 9 for additional information.
Concentration of Credit Risk
The Company's tenants consist of national, regional and local retailers.
Financial instruments which subject the Company to concentrations of credit risk
consist primarily of tenant receivables. The Company does not obtain collateral
or other security to support financial instruments subject to credit risk but
monitors the credit standing of tenants.
Earnings Per Share
Basic earnings per share ("EPS") is computed by dividing earnings available
to common shareholders by the weighted-average number of unrestricted common
shares outstanding for the period. Diluted EPS assumes the issuance of common
stock for all potential dilutive common shares outstanding. The limited
partners' rights to convert their minority interest in the Operating Partnership
into shares of common stock are not dilutive (Note 11). The difference in basic
and diluted EPS is due to the assumed exercise of outstanding stock options and
restricted stock resulting in 475,000, 140,000, and 187,000 potential dilutive
common shares in 2001, 2000 and 1999, respectively.
Stock-Based Compensation
The Company accounts for its stock-based compensation plans under
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB No. 25). Effective in 1996, the Company adopted the disclosure
option of SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123
requires companies that do not choose to account for stock-based compensation as
prescribed by the statement to disclose the pro forma effects on net income and
earnings per share as if SFAS No. 123 had been adopted. See Note 13 for the
required disclosures.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those estimates.
3. ACQUISITIONS
On January 31, 2001, the Company completed the first stage of the
acquisition of Jacobs interests in 21 malls and two associated centers for total
consideration of approximately $1.26 billion, including the acquisition of
minority interests in certain properties. The purchase price was comprised of
$124.5 million in cash, including closing costs of approximately $12 million;
the assumption of $745.5 million in non-recourse mortgage debt; and the issuance
of 12,056,692 special common units of the Operating Partnership with a value of
$27.25 per unit. The cash portion was funded from a new $212 million unsecured
credit facility provided by a consortium of banks led by Wells Fargo. The
Company will close on the second stage in 2002, which will consist of cash of
$0.3 million, the assumption of $25.7 million in non-recourse mortgage debt, and
the issuance of 499,733 special common units of the Operating Partnership. The
results of operations attributable to the properties acquired from Jacobs have
been included in the consolidated statements of operations from the date of
acquisition.
The following unaudited pro forma financial information for the year ended
December 31, 2001 and 2000 present results for the Company as if the acquisition
of the interests acquired on January 31, 2001 had occurred at January 1, 2000.
The unaudited pro forma financial information neither purports to represent what
the consolidated results of operations or financial condition actually would
66
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
have been had the acquisition and related transactions in fact occurred on the
assumed date, nor purport to project the consolidated results of operations for
any future period. Pro forma adjustments include depreciation of $1,871,000 and
$22,455,000, interest expense of $835,000 and $10,516,000, management fees on
properties accounted for under the equity method of accounting of $129,000 and
$1,483,000 and minority interest in earnings in the Operating Partnership of
$1,965,000 and $22,242,000 for the years ended December 31, 2001 and 2000,
respectively. The proforma results are as follows (in thousands, except per
share data):
For the Year December 31,
---------------------------
2001 2000
----------- -----------
Total revenues $ 560,101 $ 525,053
Total expenses 451,693 439,075
----------- -----------
Income from operations 108,408 85,978
Net income before extraordinary item 73,491 61,741
Net income available to common shareholders $ 53,465 $ 54,906
=========== ===========
Basic per share data
Net income before extraordinary item $ 2.64 $ 2.22
=========== ===========
Net income available to common shareholders $ 2.11 $ 2.21
=========== ===========
Diluted per share data:
Net income before extraordinary item $ 2.59 $ 2.21
=========== ===========
Net income available to common shareholders $ 2.07 $ 2.19
=========== ===========
In separate transactions the Company issued an additional 603,344 special
common units valued at $16,441,000 and 31,008 common units of the Operating
Partnership valued at $949,000 to purchase 50% and 25% interests in Madison
Square Mall and Madison Plaza in Huntsville, Alabama, respectively. Prior to the
acquisitions, the Company owned 50% and 75% interests in Madison Square and
Madison Plaza, respectively.
4. UNCONSOLIDATED AFFILIATES
The Company has investments in seven partnerships and joint ventures, all
of which are reflected on the equity method of accounting in the accompanying
consolidated financial statements and consist of the following at December 31,
2001:
Company's
Partnership Property Name Interest
- ----------------------------- -------------------------------- ----------
Columbia Joint Venture Columbia Mall 48.0%(1)
Governor's Square IB Governor's Plaza 50.0%
Governor's Square Company Governor's Square 47.5%
Kentucky Oaks Mall Company Kentucky Oaks Mall 48.0%(1)
Mall Shopping Center Company Plaza del Sol 50.6%
Madison Joint Venture East Towne Mall, West Towne Mall 48.0%(1)
and West Towne Crossing
Parkway Place L.P. Parkway Place 50.0%
(1) Interests acquired in 2001
67
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
In January 2001 the Company acquired interests in three partnerships
representing four malls and one associated center and discontinued the equity
method of accounting for one partnership that owns Madison Square Mall in
Huntsville, Alabama after acquiring a controlling interest in it. Condensed
combined financial statement information of the partnerships and joint ventures
is presented as follows (in thousands):
Year Ended December 31,
---------------------------
2001 2000
---------- ----------
ASSETS:
Net investment in real estate assets $ 359,361 $ 85,135
Other assets 11,077 4,445
---------- ----------
Total assets $ 370,438 $ 89,580
========== ==========
LIABILITIES :
Mortgage notes payable $ 229,687 $ 108,582
Other liabilities 11,264 2,317
---------- ----------
Total liabilities $ 240,951 $ 110,899
========== ==========
OWNER'S EQUITY (DEFICIT):
Company $ 77,673 $ (3,510)
Other investors 51,814 (17,809)
---------- ----------
Total owner's equity (deficit) 129,487 (21,319)
========== ==========
Total liabilities and owner's equity (deficit) $ 370,438 $ 89,580
========== ==========
Year Ended December 31,
----------------------------------------------
2001 2000 1999
----------- ----------- ----------
Revenues $ 55,779 $ 27,284 $ 26,859
Depreciation and amortization expense 7,707 3,080 3,253
Other operating expenses 18,326 8,255 8,398
Interest expense 14,619 8,397 8,757
----------- ----------- ----------
Operating income 15,127 7,562 6,451
Gain on sales of real estate assets 213 186 -
----------- ----------- ----------
Net income $ 15,340 $ 7,738 $ 6,451
=========== =========== ==========
Company's share of net income $ 7,155 $ 3,684 $ 3,263
=========== =========== ==========
In general, contributions and distributions of capital or cash flows and
allocations of income and expense are made on a pro rata basis in proportion to
the equity interest held by each general or limited partner. All debt on these
properties is non-recourse.
5. MORTGAGE AND OTHER NOTES PAYABLE
Mortgage and other notes payable consist of the following at December 31,
2001 and 2000 (in thousands):
2001 2000
------------ -----------
Permanent loans $ 2,059,136 $1,193,685
Construction loans 40,553 84,652
Lines of credit 216,266 146,000
------------ -----------
Total $ 2,315,955 $1,424,337
============ ===========
68
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
Permanent Loans
Permanent loans consist of loans secured by properties held by the Company
at December 31, 2001, with an asset carrying amount of $3,114,023,000. At
December 31, 2001, permanent loans totaling $1,463,351,000 bear interest at
fixed rates ranging from 6.65% to 10.625% weighted average interest rate of
7.5%0. Permanent loans totaling $595,785,000 bear interest at variable interest
rates indexed to the prime lending rate or London Interbank Offered Rate
("LIBOR"). At December 31, 2001, interest rates applicable to variable rate debt
varied from 3.03% to 4.75%, with a weighted average interest rate of 3.38%.
Permanent loans mature at various dates from 2002 through 2016.
Construction Loans
At December 31, 2001, the Company had construction loans on two properties.
The total commitment under the construction loans is $54,000,000 of which
$40,553,000 is outstanding at December 31, 2001. The construction loans mature
in 2003 and 2004, and bear interest at variable interest rates indexed to the
prime lending rate or LIBOR. Interest rates on the construction loans ranged
from 3.02% to 3.67%, with a weighted average interest rate of 3.26% at December
31, 2001.
Lines of Credit
The Company maintains line of credit agreements with banks for
construction, acquisition, and working capital purposes. At December 31, 2001,
the Company had $379,769,000 available under its line of credit agreements, of
which $216,266,000 was outstanding. The lines expire at various dates from 2003
through 2004 and bear interest at variable rates indexed to the prime lending
rate or LIBOR. Borrowings under the lines of credit had a weighted average
interest rate of 3.20% at December 31, 2001. At December 31, 2001, additional
lines of credit for the issuance of letters of credit only had $14,585,000
available with outstanding letters of credit totaling approximately $5,074,000.
The line of credit agreements contain, among other restrictions, certain
restrictive covenants including the maintenance of certain coverage ratios and
minimum net worth and limitations on distributions. The Company was in
compliance with all debt covenants on its lines of credit at December 31, 2001.
Debt Maturities
As of December 31, 2001, the scheduled principal payments on all mortgage
and other notes payable, including construction loans and lines of credit, are
as follows (in thousands):
2002 $ 385,791
2003 579,494
2004 118,959
2005 108,389
2005 157,479
Thereafter 965,843
-----------
Total $ 2,315,955
===========
6. MORTGAGE NOTES RECEIVABLE
Substantially all mortgage notes receivable are collateralized by
wrap-around mortgages most of which are currently first mortgages on the
underlying real estate and related improvements. Interest rates on notes
receivable range from 7.5% to 8.75% at December 31, 2001. Maturities of notes
receivable range from 2002 to 2019.
69
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
7. MINIMUM RENTS
Tenant leases are usually for 5 to 20 year periods and generally provide
for renewals and annual rentals which are subject to upward adjustments based on
tenant sales volume. Future minimum rents are scheduled to be received under
noncancellable tenant leases at December 31, 2001, as follows (in thousands):
2002 $ 332,504
2003 299,113
2004 266,192
2005 230,228
2006 199,418
Thereafter 831,581
No single tenant collectively accounts for more than 10% of the Company's
total revenues.
8. PREFERRED STOCK
The Company has authorized 5,000,000 shares of preferred stock of which
2,875,000 shares of 9% Series A Cumulative Redeemable Preferred Stock (the
"Series A Preferred Stock") with a face value of $25.00 per share have been
issued. The dividends on the Series A Preferred Stock are cumulative and accrue
from the date of issue and are payable quarterly in arrears at a rate of $2.25
per share per annum. The Series A Preferred Stock has no stated maturity, is not
subject to any sinking fund or mandatory redemption and is not redeemable prior
to July 1, 2003. On or after July 1, 2003, the Company may redeem the Series A
Preferred Stock, in whole or in part, at any time for a cash redemption price of
$25.00 per share, plus dividends accrued and unpaid.
9. DERIVATIVE FINANCIAL INSTRUMENTS
The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. They are used to manage
well defined interest rate risks.
Under interest rate swap agreements, the Company agrees with other parties
to exchange, at specified intervals, the difference between fixed rate and
variable rate interest amounts calculated by reference to an agreed-upon
notional amount. Under these agreements, the Company receives interest payments
at a rate equal to LIBOR (5.33% at December 31, 2001) and pays interest at fixed
rates shown below.
The Company has the following interest rate swaps in place at December 31,
2001, totaling $220 million:
Swap Amount Fixed LIBOR
(in millions) Component Effective Date Expiration Date
- ------------- ------------ -------------- ---------------
10 5.737% 01/03/2001 06/01/2002
5 5.737% 01/03/2001 06/01/2002
5 5.737% 01/03/2001 06/01/2002
10 5.737% 01/03/2001 06/01/2002
20 5.737% 01/03/2001 06/01/2002
20 4.670% 03/15/2001 09/26/2002
20 4.670% 03/15/2001 09/26/2002
20 4.670% 03/15/2001 09/26/2002
10 4.670% 03/15/2001 09/26/2002
10 4.670% 03/15/2001 09/26/2002
5 4.670% 03/15/2001 09/26/2002
5 4.670% 03/15/2001 09/26/2002
80 5.830% 12/22/2000 08/30/2003
70
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
The Company is exposed to credit losses in the event of nonperformance by
the counterparties to its interest rate swap agreements. The Company
anticipates, however, that counterparties will be able to fully satisfy their
obligations under the contracts. The Company does not obtain collateral or other
security to support financial instruments subject to credit risk but monitors
the credit standing of counterparties.
Effective January 1, 2001 the Company determined that with the exception of
two swaps that expired during the first quarter of 2001 the Company's derivative
instruments were effective and qualified for hedge accounting in accordance with
SFAS No. 133. The Company also determined that new swap agreements obtained in
2001 were effective and qualified for hedge accounting. The Company measured the
effectiveness of these instruments in place during each quarter in the year
ended December 31, 2001 and determined that the swap agreements continued to be
highly effective and continued to qualify for hedge accounting. At December 31,
2001 the effective swap agreements were recorded on the consolidated balance
sheet at their fair values of $6.8 million in accrued liabilities and
accumulated other comprehensive loss. Over time, the unrealized gains and losses
held in accumulated other comprehensive loss will be reclassified to earnings as
interest expense as swap payments are made to the swap counterparties. This
reclassification is consistent with the timing of when hedged items are
recognized in earnings. Within the next twelve months, the Company expects to
reclassify to earnings as interest expense an estimated $5.2 million of the
current balance held in accumulated other comprehensive loss.
10. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of cash and cash equivalents, receivables, accounts
payable, and accrued liabilities are reasonable estimates of their fair values
because of the short maturity of these financial instruments. Based on the
interest rates for similar financial instruments, the carrying value of mortgage
notes receivable is a reasonable estimation of fair value. The carrying value of
mortgage and other notes payable, based on borrowing rates currently available
to the Company, is a reasonable estimation of fair value at December 31, 2001
and 2000.
11. CONVERSION RIGHTS
Pursuant to the Operating Partnership agreement, the limited partners have
the right to convert their partnership interests in the Operating Partnership
into shares of common stock, subject to certain limits, and to sell to the
Company part or all of their partnership interest in the Operating Partnership
in exchange for shares of common stock or their cash equivalent at the Company's
election, as defined.
In connection with the acquisitions discussed in Note 3, the Operating
Partnership issued 12,659,677 special common units in the Operating Partnership.
After January 31, 2004 the special common units may be exchanged for shares of
common stock or cash at the Company's election. The distribution rate for the
special common units is $2.9025 per unit. The special common units receive a
minimum distribution of $2.9025 per unit. When the distribution on the common
units exceeds $2.9025 per unit, the special limited partnership units will
receive a distribution equal to that paid on the common units.
The Operating Partnership acquired properties from CBL in exchange for
1,336 common units in the Operating Partnership valued at $27,000 during 2000.
In October 1999 the Company issued 79,715 common units valued at $1,928,000 to a
third party in exchange for land.
At December 31, 2001 and 2000, there remained outstanding rights to convert
CBL's minority interest in the Operating Partnership to 8,884,728 and 8,884,728
shares of common stock, respectively. At December 31, 2001 and 2000, there
remained outstanding rights to convert third parties' minority interests in the
Operating Partnership to 2,972,486 and 2,941,360 shares of common stock,
respectively. The total number of shares of Common Stock and Operating
Partnership units was 350,134,000 and 36,893,000 at December 31, 2002 and 2000,
respectivley.
12. 401(K) PROFIT SHARING PLAN
The Management Company maintains a 401(k) profit sharing plan, which is
qualified under Section 401(a) and Section 401(k) of the Code to cover employees
of the Management Company. All employees who have attained the age of 21 and
have completed at least one year of service are eligible to participate in the
plan. The plan provides for employer matching contributions on behalf of each
participant equal to 50% of the portion of such participant's contribution which
71
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
does not exceed 2.5% of such participant's compensation for the plan year.
Additionally, the Management Company has the discretion to make additional
profit-sharing-type contributions not related to participant elective
contributions. Total contributions by the Management Company were not
significant for 2001, 2000, and 1999.
13. STOCK INCENTIVE PLAN
The Company maintains the CBL & Associates Properties, Inc. 1993 Stock
Incentive Plan, as amended (the "Plan") which permits the issuance of stock
options and common stock to selected officers, employees and directors of the
Company. The shares available under the plan were increased from 2,800,000 to
4,000,000 during 2001. The Plan is administered by the Compensation Committee of
the Board of Directors (the "Committee").
Stock options issued under the Plan allow for the purchase of common stock
at the fair market value of the stock at the date of grant. Stock options
granted to officers and employees under the Plan vest and become exercisable in
installments on each of the first five anniversaries of the date of grant and
expire ten years after the date of grant. Stock options granted to independent
directors are fully vested upon grant, but may not be sold, pledged or otherwise
transferred in any manner during the director's term or for one year thereafter.
The Company accounts for its stock-based compensation plans under APB No.
25, under which no compensation expense has been recognized for stock options
granted as all employee options have been granted with an exercise price equal
to the fair value of the Company's common stock on the date of grant. For SFAS
No. 123 purposes, the fair value of each employee option grant has been
estimated as of the date of grant using the Black-Sholes option pricing model
and the following weighted average assumptions for 2001, 2000 and 1999.
2001 2000 1999
----------- ----------- ----------
Risk free interest rate 5.07% 6.65% 5.25%
Dividend yield 8.34% 8.98% 8.33%
Expected volatility 18.00% 17.00% 16.00%
Expected life 5.9 years 6.0 years 7.2 years
Using these assumptions, the fair value of the employee stock options
granted in 2001, 2000 and 1999 is $568,000, $500,000 and $468,000, respectively,
which would be amortized as compensation expense over the vesting period of the
options. Had compensation cost for the Plan been determined in accordance with
SFAS No. 123, utilizing the assumptions detailed above, the Company's pro forma
net income and net income per share would have been as follows for the years
ended December 31, 2001, 2000, and 1999, respectively (in thousands, except per
share data):
2001 2000 1999
--------- --------- --------
Net income available to common shareholders:
As reported $ 54,440 $ 59,254 $ 48,127
Pro forma 53,825 58,585 47,458
Net income per share:
Basic as reported $ 2.15 $ 2.38 $ 1.95
Pro forma basic 2.12 2.35 1.93
Diluted as reported $ 2.11 $ 2.37 $ 1.94
Pro forma diluted 2.08 2.34 1.91
The pro forma effect on net income in this disclosure is not representative
of the pro forma effect on net income in future years because it does not take
into consideration pro forma compensation expense related to grants made prior
to 1995.
72
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
A summary of the Company's stock option activity for 2001, 2000 and 1999 is
as follows:
Weighted-Average
Shares Option Price Exercise Price
----------- ------------------- ----------------
Outstanding at December 31, 1998 1,923,250 $19.5625 - $25.6250 $21.64
Granted 382,500 $20.7200 - $24.5625 24.49
Exercised (71,200) $19.5625 - $23.6250 20.63
Lapsed (27,500) $19.6250 - $24.0940 22.40
-----------
Outstanding at December 31, 1999 2,207,050 $19.5625 - $25.6250 22.15
Granted 377,000 $23.7190 - $25.5625 23.73
Exercised (159,183) $19.5625 - $23.6250 20.50
Lapsed (60,050) $19.5625 - $23.7190 22.25
-----------
Outstanding at December 31, 2000 2,364,817 $19.5625 - $25.5625 22.51
Granted 378,500 $27.6750 - $31.3100 27.70
Exercised (375,350) $19.5625 - $24.5000 22.18
Lapsed (16,000) $23.7190 - $27.6750 24.57
-----------
Outstanding at December 31, 2001 2,351,967 $19.5625 - $31.3100 22.51
===========
The weighted-average fair value of options granted during 2001, 2000, and
1999 was $1.75, $1.54 and $1.22, respectively.
Shares subject to options outstanding at December 31, 2001, have a
weighted-average remaining contractual life of 6.2 years. Of the options
outstanding at December 31, 2001, 1,284,917 are currently exercisable with a
weighted-average exercise price of $21.82 per share.
Under the Plan, common stock may be awarded either alone, in addition to,
or in tandem with other stock awards granted under the Plan. The Committee has
the authority to determine eligible persons to whom common stock will be
awarded, the number of shares to be awarded, and the duration of the vesting
period, as defined.
During 2001, the Company issued 69,735 shares of common stock under the
Plan with a weighted-average grant-date fair value of $27.62 per share, of which
44,537 shares of common stock were immediately vested. The remaining 25,198
shares of common stock vest at various dates from 2002 to 2006.
During 2000, the Company issued 72,329 shares of common stock under the
Plan with a weighted-average grant-date fair value of $22.59 per share, of which
36,606 shares of common stock were immediately vested. The remaining 35,723
shares of common stock vest at various dates from 2001 to 2005.
During 1999, the Company issued 38,989 shares of common stock under the
Plan with a weighted-average grant-date fair value of $23.44 per share, of which
6,533 shares of common stock were immediately vested. The remaining 32,456
shares of common stock vest at various dates from 2000 to 2006.
14. RELATED PARTY TRANSACTIONS
CBL and certain officers of the Company have a significant minority
interest in the construction company that has been engaged by the Company in the
building of substantially all of the Company's properties. The Company paid
approximately $94,300,000, $123,000,000 and $95,000,000 to the construction
company in 2001, 2000, and 1999, respectively. Construction accounts payable to
the construction company included in the accompanying consolidated balance
sheets were $3,109,000 and $12,962,000 at December 31, 2001 and 2000,
respectively.
The Management Company provides management and leasing services to
affiliated partnerships and joint ventures not controlled by the Company.
Revenue recognized for these services amounted to $1,450,000, $1,166,000 and
$1,086,000 in 2001, 2000 and 1999, respectively.
73
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
15. CONTINGENCIES
The Company is currently involved in certain litigation arising in the
ordinary course of business. In the opinion of management, the pending
litigation will not materially affect the financial position or results of
operations of the Company. Additionally, based on environmental studies
completed to date on the real estate properties, management believes exposure
related to environmental cleanup will not be material to the financial position
and results of operations of the Company.
16. DIVIDENDS
The allocations of dividends declared and paid for income tax purposes are
as follows:
Year Ended December 31,
---------------------------------------
2001 2000 1999
--------- --------- ---------
Dividends per common share $ 2.13 $ 2.04 $ 1.95
Allocations:
Ordinary income 95.63% 92.16% 88.00%
Capital gains 20% rate 0.13% 3.80% 0.00%
Capital gains 25% rate 4.24% 4.04% 0.00%
Return of capital 0.00% 0.00% 12.00%
--------- --------- ---------
Total 100.00% 100.00% 100.00%
========= ========= =========
74
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
17. SEGMENT INFORMATION
Management of the Company measures performance and allocates resources
according to property type, which are determined based on differences such as
nature of tenants, capital requirements, economic risks, and leasing terms.
Rental income and tenant reimbursements from tenant leases provide the majority
of revenues from all segments. Information on management's reportable segments
is presented as follows (in thousands):
Associated Community
Year Ended December 31, 2001 Malls Centers Centers All Other Total
- --------------------------------------------- -------------- ----------- ----------- ----------- -----------
Revenues $ 450,103 $ 16,548 $ 68,847 $ 8,877 $ 544,375
Property operating expenses (1) (154,265) (3,813) (15,857) 503 (173,432)
Interest expense (123,986) (4,555) (14,131) (11,805) (154,477)
Gain on sales of real estate assets 132 - 8,381 2,136 10,649
-------------- ----------- ----------- ----------- -----------
Segment profit and loss $ 171,984 $ 8,180 $ 47,240 $ (289) 227,115
============== =========== =========== ===========
Depreciation and amortization (87,624)
General, administrative and other (20,839)
Equity in earnings and minority interest (44,186)
-----------
Income before extraordinary item $ 74,466
===========
Total assets (2) $2,731,310 $ 124,897 $ 445,335 $ 71,309 $3,372,851
Capital expenditures (2) $ 83,411 $ 13,053 $ 64,223 $ 13,240 $ 173,927
Associated Community
Year Ended December 31, 2000 Malls Centers Centers All Other Total
- --------------------------------------------- -------------- ----------- ----------- ----------- -----------
Revenues $ 267,150 $ 14,831 $ 66,649 $ 7,858 $ 356,488
Property operating expenses (1) (90,889) (2,675) (14,451) 1,124 (106,891)
Interest expense (74,105) (3,804) (13,240) (3,448) (94,597)
Gain on sales of real estate assets (400) - 10,617 5,772 15,989
-------------- ----------- ----------- ----------- -----------
Segement profit and loss $ 101,756 $ 8,352 $ 49,575 $ 11,306 170,989
============== =========== =========== ===========
Depreciation and amortization (60,646)
General, administrative and other (17,893)
Equity in earnings and minority interest (26,361)
-----------
Income before extraordinary item $ 66,089
===========
Total assets (2) $1,450,948 $ 120,178 $ 453,749 $ 90,690 $2,115,565
Capital expenditures (2) $ 83,411 $ 13,053 $ 64,223 $ 13,240 $ 173,927
Associated Community
Year Ended December 31, 1999 Malls Centers Centers All Other Total
- --------------------------------------------- -------------- ----------- ----------- ----------- -----------
Revenues $ 234,207 $ 12,288 $ 60,223 $ 10,885 $ 317,603
Property operating expenses (1) (83,672) (2,404) (11,311) 1,192 (96,195)
Interest expense (62,678) (2,693) (12,540) (4,594) (82,505)
Gain on sales of real estate assets (1,273) - 1,208 8,422 8,357
-------------- ----------- ----------- ----------- -----------
Segement profit and loss $ 86,584 $ 7,191 $ 37,580 $ 15,905 147,260
============== =========== =========== ===========
Depreciation and amortization (53,551)
General, administrative and other (17,888)
Equity in earnings and minority interest (21,226)
-----------
Income before extraordinary item $ 54,595
===========
Total assets (2) $ 1,400,793 $ 103,424 $ 451,165 $ 63,456 $2,018,838
Capital expenditures (2) $ 142,789 $ 7,426 $ 25,003 $ 26,040 $ 201,258
(1) Property operating expenses include property operating, real estate taxes
and maintenance and repairs.
(2) Developments in progress are included in the All Other category.
75
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
18. COMPREHENSIVE INCOME
Comprehensive income consisted of the following components for the years
ended December 31, 2001, 2000 and 1999, respectively (in thousands):
Year Ended December 31,
------------------------------------------
2001 2000 1999
-------- -------- --------
Net Income $ 60,908 $ 65,722 $ 54,595
Loss on current period cash flow hedges (6,178) - -
-------- -------- --------
Total $54,124 $ 65,722 $ 54,595
======== ======== ========
19. OPERATING PARTNERSHIP
Condensed consolidated financial statement information for the Operating
Partnership is presented as follows (in thousands):
Year Ended December 31,
-------------------------------
2001 2000
------------- ------------
ASSETS:
Net investment in real estate $ 3,201,622 $ 2,040,614
Investment in unconsolidated affiliates 78,211 -
Other Assets 80,700 74,485
------------- ------------
Total assets $ 3,360,533 $ 2,115,099
============= ============
LIABILITIES:
Mortgage notes payable $ 2,315,955 $ 1,424,338
Other liabilities 90,066 65,443
------------- ------------
Total liabilities 2,406,021 1,489,781
Distributions and losses in excess - 2,972
of investment in unconsolidated affiliates
Minority Interest 2,213 1,301
OWNERS' EQUITY:
Other investors 952,299 621,045
------------- ------------
Total liabilities and owner's equity $ 3,360,533 $ 2,115,099
============= ============
Year Ended December 31,
-------------------------------------------------
2001 2000 1999
----------- ----------- ----------
Revenues $ 544,371 $ 356,488 $ 317,603
Depreciation and amortization expense 87,624 60,646 53,551
Other operating expenses 348,319 218,545 195,882
----------- ----------- ----------
Operating income 108,428 77,297 68,170
Gain on sales of real estate assets 10,649 15,989 8,357
Equity in earnings of unconsolidated 7,155 3,684 3,263
affiliates
Minority investors' interest (1,698) (1,538) (1,225)
----------- ----------- ----------
Income before extraordinary item 124,534 95,432 78,565
Extraordinary loss on extinguishment of (13,558) (367) -
debt
----------- ----------- ----------
Net income $ 110,976 $ 95,065 $ 78,565
=========== =========== ==========
76
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
20. QUARTERLY INFORMATION (UNAUDITED) (in thousands, except per
share amounts)
First Second Third Fourth
2001 Quarter Quarter Quarter Quarter Total(1)
---------- ---------- ----------- ----------- ----------
Total revenues $ 121,155 $ 134,822 $ 138,514 $ 149,884 $ 544,375
Income from operations 23,739 25,644 26,853 31,767 108,003
Income before extraordinary item 16,797 15,445 21,479 20,745 74,466
Net income available to common 15,180 12,126 8,241 18,893 54,440
shareholders
Basic per share data:
Income before extraordinary item $ 0.60 $ 0.55 $ 0.78 $ 0.75 $ 2.68
Net income $ 0.60 $ 0.48 $ 0.32 $ 0.74 $ 2.15
Diluted per share data:
Income before extraordinary item $ 0.60 $ 0.54 $ 0.76 $ 0.73 $ 2.63
Net income $ 0.60 $ 0.47 $ 0.32 $ 0.72 $ 2.11
2000
Total revenue $ 88,009 $ 86,857 $ 88,621 $ 93,001 $ 356,488
Income from operations 18,967 18,215 18,657 20,622 76,461
Income before extraordinary item 15,967 17,112 16,252 16,758 66,089
Net income available to common 14,350 15,358 14,551 14,995 59,254
shareholders
Basic per share data:
Income before extraordinary item $ 0.58 $ 0.62 $ 0.59 $ 0.61 $ 2.40
Net income $ 0.58 $ 0.62 $ 0.58 $ 0.60 $ 2.38
Diluted per share data:
Income before extraordinary item $ 0.58 $ 0.62 $ 0.58 $ 0.60 $ 2.38
Net income $ 0.58 $ 0.62 $ 0.58 $ 0.60 $ 2.37
(1) The sum of quarterly earnings per share amounts may differ from annual earnings per share due to rounding.
77
CBL & Associates Properties, Inc. - 2001 Form 10K
CBL & Associates Properties, Inc.
Schedule II Allowance for Credit Losses (in thousands)
Year Ended December 31,
------------------------------------
2001 2000 1999
--------- --------- ---------
Balance Of Allowance At Beginning Of Year $ 1,854 $ 1,854 $ 1,950
Provision For Credit Losses 5,947 1,380 341
Bad Debt Charged Against Allowance (4,936) (1,380) (437)
--------- --------- ---------
Balance Allowance At End Of Year $ 2,865 $ 1,854 $ 1,854
========= ========= =========
78
CBL & Associates Properties, Inc. - 2001 Form 10K
SCHEDULE III
CBL & ASSOCIATES PROPERTIES, INC.
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
December 31, 2001
(Dollars in Thousands)
Gross Amounts at Which
Carried at Close of Period
Initial Cost(A) --------------------------
--------------------
Costs (D)
Buildings Capitalized Buildings Accumu- Date of
(B) and Subsequent to Sales of and lated Const-
Encumbr- Improv- Acquisition Outparcel Improve- Depre- ruction/
Description /Location ances Land ments Improvements Land Land ments Total(C) ciation Purchase
- --------------------- -------- -------- ---------- -------------- ---------- ------- --------- -------- -------- ---------
MALLS
Arbor Place $99,300 $7,637 $95,330 $10,802 ---- $7,637 $106,132 $113,769 $9,725 1998-1999
Douglasville, GA
Asheville Mall 71,073 7,139 58,747 31,826 464 6,675 90,573 97,248 6,856 1998
Asheville, NC
Bonita Lakes Mall 28,374 4,924 31,933 4,627 ---- 4,924 36,560 41,484 6,149 1997
Meridian, MS
Brookfield Square 75,160 8,646 78,703 ---- ---- 8,646 78,703 87,349 1,862 2001
Brookfield, WI
Burnsville Center 73,182 12,804 69,167 6,588 ---- 12,804 75,755 88,559 7,742 1998
Burnsville, MN
Cary Towne Center 62,041 23,688 74,432 ---- ---- 23,688 74,432 98,120 1,761 2001
Cary, NC
Cherryvale Mall 48,093 11,892 63,973 ---- ---- 11,892 63,973 75,865 1,496 2001
Rockford, IL
Citadel Mall 41,776 11,443 44,008 ---- ---- 11,443 44,008 55,451 1,034 2001
Charleston, SC
College Square 13,971 2,954 17,787 9,237 27 2,927 27,024 29,951 7,816 1987-1988
Morristown, TN
Coolsprings Gallera 63,327 13,527 86,755 23,538 ---- 13,527 110,293 123,820 27,673 1989-1991
Nashville, TN
Eastgate Mall 42,000 13,046 44,949 ---- ---- 13,046 44,949 57,995 1,053 2001
Cincinnati, OH
Fashion Square 59,430 15,218 64,971 ---- ---- 15,218 64,971 80,189 1,438 2001
Saginaw, MI
Fayette Mall 97,594 20,707 84,267 ---- ---- 20,707 84,267 104,974 1,969 2001
Lexington, KY
Frontier Mall ---- 2,681 15,858 8,675 ---- 2,681 24,533 27,214 8,889 1984-1985
Cheyenne, WY
Foothills Mall 26,219 4,537 15,226 5,906 ---- 4,537 21,132 25,669 5,438 1996
Maryville, TN
Georgia Square (E) ---- 2,982 31,071 9,661 23 2,959 40,732 43,691 12,852 1982
Athens, GA
Hamilton Place 68,761 2,880 42,211 14,207 441 2,439 56,418 58,857 16,679 1986-1987
Chattanooga, TN
Hanes Mall 116,291 17,176 133,376 ---- ---- 17,176 133,376 150,552 3,103 2001
Winston-Salem, NC
Hickory Hollow Mall 92,447 13,813 111,431 3,342 ---- 13,813 114,773 128,586 10,212 1998
Nashville, TN
JCPenney(E) ---- ---- 2,650 ---- ---- 0 2,650 2,650 1,148 1983
Maryville, TN
Janesville Mall 15,473 8,074 26,009 34 ---- 8,074 26,043 34,117 2,426 1998
Janesville, WI
Jefferson Mall 40,000 13,125 40,234 ---- ---- 13,125 40,234 53,359 947 2001
Louisville, KY
The Lakes Mall 31,555 3,328 42,366 ---- ---- 3,328 42,366 45,694 734 2000-2001
Muskegon, MI
Lakeshore Mall (E) ---- 1,443 28,819 3,817 169 1,274 32,636 33,910 7,614 1991-1992
Sebring, FL
79
CBL & Associates Properties, Inc. - 2001 Form 10K
Madison Square 47,099 17,596 39,186 ---- ---- 17,596 39,186 56,782 904 1984
Hunstville, AL
Meridian Mall 105,706 529 103,678 42,659 ---- 529 146,337 146,866 9,757 1998
Lansing, MI
Midland Mall 35,000 10,321 29,429 ---- ---- 10,321 29,429 39,750 678 2001
Midland, MI
Northwoods Mall 56,280 14,867 49,647 ---- ---- 14,867 49,647 64,514 1,151 2001
Charleston, SC
Oak Hollow Mall 48,463 4,344 52,904 2,504 ---- 4,344 55,408 59,752 10,706 1994-1995
High Point, NC
Old Hickory Mall 21,731 15,527 29,413 ---- ---- 15,527 29,413 44,940 662 2001
Jackson, TN
Parkdale Mall 45,000 20,723 47,390 ---- ---- 20,723 47,390 68,113 1,107 2001
Beaumont, TX
Pemberton Square (E) ---- 1,191 14,305 1,599 947 244 15,904 16,148 6,009 1986
Vicksburg, MS
Post Oak Mall (E) ---- 3,936 48,948 (8,712) 327 3,609 40,236 43,845 9,361 1984-1985
College Station, TX
Randolph Mall ---- 4,547 13,927 ---- ---- 4,547 13,927 18,474 321 2001
Asheboro, NC
Regency Mall ---- 3,384 36,839 ---- ---- 3,384 36,839 40,223 859 2001
Racine, WI
Rivergate Mall 74,715 17,896 86,767 12,718 ---- 17,896 99,485 117,381 8,847 1998
Nashville, TN
Springdale Mall 24,466 19,538 6,676 23,394 ---- 19,538 30,070 49,608 1,448 1997
Mobile, AL
Stroud Mall 32,290 14,711 23,936 1,597 ---- 14,711 25,533 40,244 2,435 1998
Stroudsburg, PA
St. Clair Square 71,753 11,028 75,581 5,802 ---- 11,028 81,383 92,411 10,331 1996
Fairview Heights, IL
Towne Mall ---- 3,101 17,033 ---- ---- 3,101 17,033 20,134 394 2001
Franklin, OH
Turtle Creek Mall 32,316 2,345 26,418 5,926 ---- 3,535 32,344 35,879 8,761 1993-1995
Hattiesburg, MS
Twin Peaks (E) ---- 1,873 22,022 16,867 46 1,827 38,889 40,716 13,843 1984
Longmont,CO
Walnut Square (E) 656 50 15,138 5,238 ---- 50 20,376 20,426 8,621 1984-1985
Dalton,GA
Wausau Center 14,228 5,231 24,705 ---- ---- 5,231 24,705 29,936 572 2001
Wausau, WI
Westgate Mall 45,101 2,150 23,257 40,174 407 1,743 63,431 65,174 11,090 1995
Spartanburg, SC
York Galleria 51,656 5,757 63,316 1,550 ---- 5,757 64,866 70,623 4,045 1995
York, PA
ASSOCIATED CENTERS
Bonita Crossing 8,910 794 4,786 7,088 ---- 794 11,874 12,668 1,156 1997
Meridian, MS
Coolsprings Xing (E) ---- 2,803 14,985 1,035 ---- 3,554 16,020 19,574 4,080 1991-1993
Nashville, TN
80
CBL & Associates Properties, Inc. - 2001 Form 10K
Courtyard at Hickory 4,304 3,314 2,771 114 ---- 3,314 2,885 6,199 247 1998
Hollow
Nashville, TN
Eastgate Crossing ---- 707 2,424 ---- ---- 707 2,424 3,131 55 2001
Cincinnati, OH
Foothills Plaza (E) ---- 132 2,123 511 ---- 148 2,634 2,782 1,138 1984-1988
Maryville, TN
Foothills Plaza ---- 137 1,960 226 ---- 141 2,186 2,327 675 1984-1988
Expansion
Maryville, TN
Frontier Square ---- 346 684 178 86 260 862 1,122 301 1985
Cheyenne, WY
General Cinema ---- 100 1,082 14 ---- 100 1,096 1,196 603 1984
Athens, GA
Hamilton Corner 2,895 960 3,670 541 226 734 4,211 4,945 1,316 1986-1987
Chattanooga, TN
Hamilton Crossing ---- 4,014 5,906 496 1,370 2,644 6,402 9,046 2,040 1987
Chattanooga, TN
Hamilton Place ---- 322 408 57 ---- 322 465 787 42 1998
Outparcel
Chattanooga, TN
The Landing at Arbor 11,162 4,993 14,330 582 ---- 4,993 14,912 19,905 1,227 1998-1999
Place
Douglasville, GA
Madison Plaza 1,041 473 2,888 1,023 ---- 473 3,911 4,384 1,250 1984
Hunstville, AL
Pemberton Plaza ---- ---- 662 892 ---- 0 1,554 1,554 425 1986
Vicksburg, MS
The Terrace 9,841 4,166 9,729 4 ---- 4,166 9,733 13,899 1,169 1997
Chattanooga, TN
Village at Rivergate 3,529 2,641 2,808 598 ---- 2,641 3,406 6,047 309 1998
Nashville, TN
Westgate Crossing 9,810 1,082 3,422 6,365 ---- 1,082 9,787 10,869 1,372 1997
Spartanburg, SC
COMMUNITY CENTERS
Anderson Plaza ---- 198 1,316 1,558 ---- 198 2,874 3,072 806 1983
Greenwood, SC
Bartow Plaza ---- 224 2,010 225 ---- 224 2,235 2,459 679 1989
Bartow, FL
Beach Xing ---- 725 1,749 135 102 623 1,884 2,507 655 1984
Myrtle Beach, SC
BJ's Wholesale 2,952 170 4,735 13 ---- 170 4,748 4,918 1,224 1991
Portland, ME
Briarcliff Sq 1,489 299 1,936 64 32 267 2,000 2,267 619 1989
Oak Ridge, TN
Buena Vista Plaza ---- 980 1,943 (578) 376 754 1,365 2,119 297 1988-1989
Columbus, GA
Bullock Plaza ---- 98 1,493 101 ---- 98 1,594 1,692 585 1986
Statesboro, GA
81
CBL & Associates Properties, Inc. - 2001 Form 10K
Capital Crossing ---- 1,908 756 1,628 ---- 2,544 2,384 4,928 352 1995
Raleigh, NC
Cedar Bluff 1,014 412 2,128 906 ---- 412 3,034 3,446 1,064 1987
Knoxville, TN
Cedar Springs Crossing ---- 206 1,845 142 ---- 206 1,987 2,193 636 1988
Cedar Springs, MI
Chesterfield Crossing 8,250 1,580 11,243 927 ---- 1,580 12,170 13,750 370 2000
Richmond, VA
Chester Plaza ---- 165 720 2 ---- 165 722 887 78 1997
Chester, VA
Chestnut Hills (E) ---- 600 1,775 344 ---- 600 2,119 2,719 493 1992
Murray, KY
Coastal Way 9,687 3,356 9,335 16 ---- 3,356 9,351 12,707 333 ????
Spring Hill, FL
Colleton Square 848 190 1,349 43 34 156 1,392 1,548 518 1986
Walterboro, SC
Collins Park Commons 678 25 1,858 19 ---- 25 1,877 1,902 587 1989
Plant City, FL
Conway Plaza ---- 110 1,071 926 110 0 1,997 1,997 720 1984
Conway, SC
Cortlandt Towne Center 50,964 17,010 80,809 2,664 1,898 15,112 83,473 98,585 8,505 1996
Cortlandt, NY
Cosby Station 3,800 999 4,516 612 ---- 999 5,128 6,127 988 1993-1994
Douglasville, GA
County Park Plaza ---- 196 1,500 435 56 140 1,935 2,075 615 1980
Scottsboro, AL
Devonshire Place ---- 371 3,449 2,357 ---- 520 5,806 6,326 835 1995-1996
Cary, NC
E Ridge Xing (E) ---- 832 2,494 1,606 101 731 4,100 4,831 1,060 1988
East Ridge, TN
Eastowne Xing (E) ---- 867 2,765 1,933 81 786 4,698 5,484 1,311 1989
Knoxville, TN
Fifty Eight Xing (E) ---- 839 2,360 53 96 743 2,413 3,156 806 1988
Chattanooga, TN
Garden City Plaza (E) ---- 1,056 2,569 1,080 476 580 3,649 4,229 1,425 1984
Garden City, KS
Girvin Plaza ---- 898 1,998 1,266 196 702 3,264 3,966 615 1989-1990
Jacksonville, FL
Greenport Towne Ctr 4,004 659 6,161 (217) ---- 659 5,944 6,603 1,150 1993-1994
Hudson, NY
Gunbarrel Pointe 11,975 4,170 10,874 229 ---- 4,170 11,103 15,273 361 2000
Chattanooga, TN
Hampton Plaza ---- 973 2,689 58 8 965 2,747 3,712 772 1989-1990
Tampa, FL
Henderson Square 6,026 428 8,074 364 188 240 8,438 8,678 1,446 1994-1995
Henderson, NC
Jasper Square (E) ---- 235 1,423 1,727 ---- 235 3,150 3,385 954 1986
Jasper, AL
82
CBL & Associates Properties, Inc. - 2001 Form 10K
Keystone Xing ---- 938 2,216 97 113 825 2,313 3,138 829 1989
Tampa, FL
Kingston Overlook ---- 1,693 5,664 1,576 ---- 2,105 7,240 9,345 909 1996
Knoxville, TN
Lady's Island (E) ---- 300 2,323 329 8 292 2,652 2,944 612 1992
Beaufort, SC
LaGrange Commons ---- 835 5,765 635 ---- 835 6,400 7,235 840 1995-1996
LaGrange, NY
Lionshead Village ---- 3,674 4,153 3,065 ---- 3,674 7,218 10,892 511 1998
Nashville, TN
Longview Xing 379 ---- 1,308 446 ---- 0 1,754 1,754 451 1988
Longview, NC
Lunenburg Crossing ---- 1,020 2,308 (9) ---- 1,020 2,299 3,319 413 1993-1994
Lunenburg, MA
Marketplace at Flower ---- 2,269 8,820 111 ---- 2,269 8,931 11,200 403 2000
Mound
Flowermound, TX
Massard Crossing ---- 843 5,726 784 ---- 843 6,510 7,353 734 1997
Fort Smith, AR
North Haven Xing 6,132 3,229 8,061 63 ---- 3,229 8,124 11,353 1,733 1992-1993
North Haven, CT
Northcreek Plaza ---- 98 1,201 51 ---- 98 1,252 1,350 303 1983
Greenwood, SC
Northridge Plza (E) ---- 1,087 2,970 1,876 ---- 1,244 4,846 6,090 1,907 1984
Hilton Head, SC
Northwoods Plaza 1,119 496 1,403 106 ---- 496 1,509 2,005 368 1995
Albemarle, NC
Oaks Crossing ---- 571 2,885 (1,492) ---- 655 1,393 2,048 448 1988
Otsego, MI
Orange Plaza ---- 395 2,111 126 ---- 395 2,237 2,632 535 1992
Roanoke, VA
Park Place 571 ---- 3,590 604 ---- 230 4,194 4,424 1,735 1984
Chattanooga, TN
Perimeter Place 1,240 764 2,049 279 ---- 770 2,328 3,098 933 1985
Chattanooga, TN
Rawlinson Place ---- 279 1,573 76 ---- 292 1,649 1,941 590 1987
Rock Hill, SC
Rhett @ Remount ---- 67 1,877 883 ---- 67 2,760 2,827 1,112 1992
Charleston, SC
Salem Crossing ---- 2,385 7,094 (299) ---- 2,385 6,795 9,180 831 1997
Virginia Beach, VA
Sattler Square (E) ---- 792 4,155 389 87 705 4,544 5,249 1,383 1988-1989
Big Rapids, MI
Seacoast Shopping 5,254 1,374 4,164 2,730 179 1,195 6,894 8,089 1,711 1991
Center
Seabrook, NH
Shenandoah Crossing 476 122 1,382 76 7 115 1,458 1,573 474 1988
Roanoke, VA
Signal Hills Vill ---- ---- 579 488 ---- 0 1,067 1,067 355 1983-1984
Statesville, NC
83
CBL & Associates Properties, Inc. - 2001 Form 10K
Southgate Xing ---- ---- 1,002 25 ---- 0 1,027 1,027 387 1984-1985
Bristol, TN
Springhurst Towne 21,830 7,424 30,672 6,796 ---- 7,463 37,429 44,892 3,824 1997
Center
Louisville, KY
Springs Crossing ---- ---- 1,422 932 ---- 0 2,354 2,354 734 1987
Hickory, NC
Statesboro Square ---- 237 1,643 169 10 227 1,812 2,039 700 1986
Statesboro, GA
Stone East Plz (E) ---- 266 1,635 305 49 217 1,940 2,157 786 1987
Kingsport, TN
Strawbridge MK Place ---- 1,969 2,492 ---- ---- 1,969 2,492 4,461 312 1997
Strawbridge, VA
Suburban Plaza 8,342 3,223 3,796 3,271 ---- 3,223 7,067 10,290 1,444 1995
Knoxville, TN
Uvalde Plaza 595 574 1,506 26 255 319 1,532 1,851 554 1987
Uvalde, TX
Valley Commons 824 342 1,819 639 ---- 342 2,458 2,800 827 1988
Salem, VA
Valley Xing (E) ---- 2,390 6,471 5,188 37 3,034 11,659 14,693 3,011 1988
Hickory, NC
Village at Wexford ---- 555 3,009 197 ---- 501 3,206 3,707 950 1989-1990
Cadillac, MI
Village Square ---- 750 3,591 (233) ---- 142 3,358 3,500 1,069 1989-1990
Houghton Lake, MI
Willow Springs 4,056 2,917 6,107 5,017 ---- 2,917 11,124 14,041 2,255 1991
Nashua, NH
Willowbrook Plaza 33,065 4,543 40,356 ---- ---- 4,542 40,356 44,898 988 2001
Houston, TX
34th St Xing 1,354 1,102 2,743 164 79 1,023 2,907 3,930 907 1989
St. Petersburg, FL
DISPOSALS
Bennington Place ---- 256 1,754 (2,010) ---- ---- ---- ---- ---- 1988
Roanoke, VA
Creekwood Crossing ---- 1,994 18,226 (20,220) ---- ---- ---- ---- ---- 2000
Bradenton, FL
Jean Ribaut Kmart ---- 317 2,065 (2,382) ---- ---- ---- ---- ---- 1983-1984
Beaufort, SC
Jean Ribaut Square ---- 505 4,007 (4,512) ---- ---- ---- ---- ---- 1983
Beaufort, SC
Park Village ---- 586 2,874 (3,460) ---- ---- ---- ---- ---- 1990
Lakeland, FL
Sand Lake Corners ---- 3,182 15,952 (19,134) ---- ---- ---- ---- ---- 1998-1999
Orlando, FL
Sutton Plaza ---- 1,042 4,671 (5,713) ---- ---- ---- ---- ---- 1997
Mt. Olive, NJ
84
CBL & Associates Properties, Inc. - 2001 Form 10K
OTHER
High Point, NC - Land ---- ---- ---- 2,764 ---- 498 1,871 2,369 518 ----
Shops at Soncey ---- 3,270 ---- ---- ---- 3,270 ---- 3,270
Temple, TX
Developments in
Progress Consisting
of Construction
and Development
Properties (F) 205,012 2,955 ---- (2,297) ---- 227 (80) 147 772 ----
---------- -------- ---------- -------------- -------- -------- --------- ---------- ---------
TOTALS $2,315,955 $535,702 $2,649,559 $291,618 $9,111 $520,334 $2,961,185 $3,481,519 $346,940
========== ======== ========== ============== ======== ======== ========== ========== =========
(A) Initial cost represents the total cost capitalized including carrying cost at the end of the first fiscal year in which the
property opened or was acquired.
(B) Encumbrances represent the mortgage notes payable balance at December 31, 2001.
(C) The aggregate cost of land and buildings and improvements for federal income tax purposes is approximately $3.0346 billion.
(D) Depreciation for all properties is computed over the useful life which is generally forty years.
(E) Property is pledged as collateral on the secured lines of credit used for development properties.
(F) Includes non-property mortgages and credit line mortgages.
85
CBL & Associates Properties, Inc. - 2001 Form 10K
CBL & ASSOCIATES PROPERTIES, INC.
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
The changes in real estate assets and accumulated depreciation for the
years ending December 31, 2001, 2000, and 1999 is set forth below: (in
thousands).
2001 2000 1999
---------- ---------- ----------
REAL ESTATE ASSETS:
Balance at beginning of period $2,311,660 $2,184,102 $1,982,843
Additions during the period:
Additions and improvements 137,949 173,916 180,094
Acquisitions of real estate assets 890,385 11,089 69,027
Acquisitions of real estate assets with 289,373 -- --
limited partnership interest
Deductions during the period:
Cost of sales (78,774) (57,320) (46,188)
Write-off of development projects (2,031) (127) (1,674)
---------- ---------- ----------
Balance at end of period $3,548,562 $2,311,660 $2,184,102
========== ========== ==========
ACCUMULATED DEPRECIATION:
Balance at beginning of period $271,046 $223,548 $177,055
Accumulated depreciation on properties sold (9,248) (6,193) (6,640)
Depreciation expense 85,142 53,691 53,133
---------- ---------- ----------
Balance at end of period $346,940 $271,046 $223,548
========== ========== ==========
86
CBL & Associates Properties, Inc. - 2001 Form 10K
Schedule IV
CBL & ASSOCIATES PROPERTIES, INC.
MORTGAGE LOANS ON REAL ESTATE
AT DECEMBER 31, 2001
(Dollars in thousands)
Principal
Amount of
Carrying Mortgages
Monthly Balloon Face Amount Subject to
Final Payment Payment Amount Of Delinquent
Interest Maturity Amount at Prior of Mortgage Principal
Name of Center/Location Rate Date (1) Maturity Liens Mortgage (2) or Interest
- ------------------------------ ---------- --------- --------- ---------- -------- --------- ---------- ------------
Bi-Lo South 9.50% 08/06 $22 $0 None $1,206 $ 999 $0
Cleveland, TN
Gaston Square 7.50% 06/19 16 0 None 1,870 1,832 0
Gastonia, NC
Inlet Crossing 7.50% 06/19 24 0 None 2,830 2,805 0
Myrtle Beach, SC
Olde Brainerd Centre 9.50% 12/06 4 0 None 14 14 0
Chattanooga, TN
Signal Hills Plaza 7.50% 06/19 5 0 None 650 642 0
Statesville, NC
Soddy Daisy Plaza 9.50% 12/06 4 0 None 172 56 0
Soddy Daisy, TN
Park Village 8.25% 08/10 7 0 None 1,270 1,270 0
Lakeland, FL
University Crossing 8.75% 02/10 7 0 None 512 507 0
Pubelo, CO
Other 10.00% 02/01- 0 2,509 2,509 2,509 0
09/07
--------- ---------- --------- ---------- ------------
$102 $2,509 $11,033 10,634 $0
========= ========== ========= ========== ============
(1) Equal monthly installments comprised of principal and interest unless otherwise noted.
(2) The aggregate carrying value for federal income tax purposes is approximately $10,634 at December 31, 2001.
The changes in mortgage notes receivable for the years ending December 31,
2001, 2000, and 1999 is set forth below: (in thousands).
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2001 2000 1999
------------ ------------ ------------
Beginning Balance $8,756 $9,385 $9,118
Additions 2,874 825 1,690
Payments (996) (1,454) (1,423)
------------ ------------ ------------
Ending Balance $10,634 $8,756 $9,385
============ ============ ============
87
(3) Exhibits
Exhibit
Number Description
3.1 -- Amended and Restated Certificate of Incorporation of the
Company, dated November 2, 1993(a)
3.2 -- Amended and Restated Bylaws of the Company, dated
October 27, 1993(a)
3.3 -- Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, dated May 2, 1996, see page 94
3.4 -- Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, dated January 31, 2001,
see page 106
4.1 -- See Amended and Restated Certificate of Incorporation of the
Company, relating to the Common Stock(a)
4.2 -- Certificate of Designations, dated June 25, 1998, relating to
the 9% Series A Cumulative Redeemable Preferred Stock, see
page 110
4.3 -- Certificate of Designation, dated April 30, 1999, relating to
the Series 1999 Junior Participating Preferred Stock, see page 117
4.4 -- Terms of Series J Special Common Units of the Operating
Partnership, pursuant to Article 4.4 of the Second Amended and
Restated Partnership Agreement of the Operating Partnership,
see page 123
10.1.1 -- Second Amended and Restated Agreement of the Operating
Partnership dated June 30, 1998(p)
10.1.2 -- First Amendment to Second Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, dated
January 31, 2001, see page 134
10.2.1 -- Rights Agreement by and between the Company and BankBoston,
N.A., dated as of April 30, 1999(q)
10.2.2 -- Amendment No. 1 to Rights Agreement by and between the Company
and SunTrust Bank(successor to BankBoston), dated
January 31, 2001, see page 158
10.3 -- Property Management Agreement between the Operating Partnership
and the Management Company(a)
10.4 -- Property Management Agreement relating to Retained Properties(a)
10.5.1 -- CBL & Associates Properties, Inc. 1993 Stock Incentive Plan(a)+
10.5.2 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Charles B. Lebovitz+
10.5.3 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
James L. Wolford+
10.5.4 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
John N. Foy+
10.5.5 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Jay Wiston+
10.5.6 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Ben S. Landress+
10.5.7 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Stephen D. Lebovitz+
88
CBL & Associates Properties, Inc. - 2001 Form 10K
10.5.8 -- Stock Restriction Agreement, dated December 28, 1994, for
Charles B. Lebovitz+
10.5.9 -- Stock Restriction Agreement, dated December 2, 1994, for
John N. Foy+
10.5.10 -- Stock Restriction Agreement, dated December 2, 1994, for
Jay Wiston+
10.5.11 -- Stock Restriction Agreement, dated December 2, 1994, for
Ben S. Landress+
10.5.12 -- Stock Restriction Agreement, dated December 2, 1994, for
Stephen D. Lebovitz+
10.6.1 -- Purchase Agreement relating to Frontier Mall(b)
10.6.2 -- Purchase Agreement relating to Georgia Square (JMB)(b)
10.6.3 -- Purchase Agreement Relating to Georgia Square (JCPenney)(b)
10.6.4 -- Purchase Agreement relating to Post Oak Mall(b)
10.7 -- Indemnification Agreements between the Company and the
Management Company and their officers and directors(a)
10.8.1 -- Employment Agreement for Charles B. Lebovitz(a)+
10.8.2 -- Employment Agreement for James L. Wolford(a)+
10.8.3 -- Employment Agreement for John N. Foy(a)+
10.8.4 -- Employment Agreement for Jay Wiston(a)+
10.8.5 -- Employment Agreement for Ben S. Landress(a)+
10.8.6 -- Employment Agreement for Stephen D. Lebovitz(a)+
10.9 -- Subscription Agreement relating to purchase of the Common
Stock and Preferred Stock of the Management Company(a)
10.10.1 -- Option Agreement relating to certain Retained Properties(a)
10.10.2 -- Option Agreement relating to Outparcels(a)
10.11.1 -- Property Partnership Agreement relating to Hamilton Place(a)
10.11.2 -- Property Partnership Agreement relating to CoolSprings
Galleria(a)
10.12.1 -- Acquisition Option Agreement relating to Hamilton Place(a)
10.12.2 -- Acquisition Option Agreement relating to the Hamilton Place
Centers(a)
10.12.3 -- Acquisition Option Agreement relating to the Office Building(a)
10.13.1 -- Revolving Credit Agreement between the Operating Partnership
and First Tennessee Bank, National Association, dated as of
March 2, 1994(c)
10.13.2 -- Revolving Credit Agreement, between the Operating Partnership and
Wells Fargo Advisors Funding, Inc., NationsBank of Georgia, N.A.
and First Bank National Association, dated July 28, 1994, (d)
89
CBL & Associates Properties, Inc. - 2001 Form 10K
10.13.3 -- Revolving Credit Agreement, between the Operating Partnership
and American National Bank and Trust Company of Chattanooga,
dated October 14, 1994, (e)
10.13.4 -- Revolving Credit Agreement, between the Operating Partnership
and First Tennessee Bank National Association, dated
November 2, 1994 (e)
10.14 -- Promissory Note Agreement between the Operating Partnership
and Union Bank of Switzerland, dated May 5, 1995(f)
10.15 -- Amended and Restated Loan Agreement between the Operating
Partnership and First Tennessee Bank National Association, dated
July 12, 1995(g)
10.16 -- Second Amendment to Credit Agreement between the Operating
Partnership and Wells Fargo Realty Advisors Funding, Inc. dated
July 5, 1995(g)
10.17 -- Consolidation, Amendment, Renewal, and Restatement of Notes
between the Galleria Associates, L.P. and The Northwestern
Mutual Life Insurance Company(h)
10.18.1 -- Promissory Note Agreement between High Point Development
Limited Partnership and The Northwestern Mutual Life Insurance
Company, dated January 26, 1996(i)
10.18.2 -- Promissory Note Agreement between Turtle Creek Limited
Partnership and Connecticut General Life Insurance Company,
dated February 14, 1996(i)
10.19 -- Amended and Restated Credit Agreement between the Operating
Partnership and Wells Fargo Bank N.A. etal, dated
September 26, 1996(j)
10.20 -- Promissory Note Agreement between the Operating Partnership
and Compass Bank dated, September 17, 1996. (j)
10.21.1 -- Promissory Note Agreement between St Clair Square Limited
Partnership and Wells Fargo National Bank, dated
December 11, 1996(k)
10.21.2 -- Promissory Note Agreement between Lebcon Associates and
Principal Mutual Life Insurance Company dated,
March 18, 1997(k)
10.21.3 -- Promissory Note Agreement between Westgate Mall Limited
Partnership and Principal Mutual Life Insurance Company
dated, February 16, 1997(k)
10.22.1 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank etal,
dated February 24, 1997(k)
10.22.2 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank etal,
dated July 29, 1997(l)
10.22.3 -- Second Amended and Restated Credit Agreement between the
Operating Partnership and Wells Fargo Bank N.A. etal,
dated June 5, 1997, effective April 1,1997(l)
10.22.4 -- First Amendment to Second Amended and Restated Credit Agreement
between the Operating Partnership and Wells Fargo Bank N.A. etal,
dated November 11, 1997(l)
10.23.1 -- Loan Agreement between Asheville LLC and Wells Fargo Bank
N.A., dated February 17, 1998(l)
10.23.2 -- Loan Agreement between Burnsville Minnesota LLC and U.S.
Bank National Association dated January 30, 1998(l)
10.24 -- Loan agreement with South Trust Bank, dated January 15 , 1998(m)
90
CBL & Associates Properties, Inc. - 2001 Form 10K
10.25 -- Loan agreement between Rivergate Mall Limited Partnership, The
Village at Rivergate Limited Partnership, Hickory Hollow Mall
Limited Partnership, and The Courtyard at Hickory Hollow Limited
Partnership and Midland Loan Services, Inc., Dated
July 1, 1998(n)
10.26.1 -- Amended and restated Loan Agreement between the Company and
First Tennessee Bank National Association, Dated June 12, 1998(o)
10.26.2 -- First Amendment To Third Amended And Restated Credit Agreement
and Third Amended And Restated Credit Agreement between the
Company and Wells Fargo Bank, National Association, dated
August 4, 1998(o)
10.27 -- Promissory Note with Teachers Insurance and Annuity Association
of American and St. Clair Square Limited Partnership Bank,
dated March 11, 1999(p)
10.28 -- Promissory Note with Wells Fargo Bank National Associates and
Parham Road Limited Partnership (York Galleria), dated
July 1, 1999(r)
10.29 -- Agreement of Purchase and Sale By and Between YGL Partners and
the Operating Partnership assigned to Parham Road Limited
Partnership (York Galleria), dated February 2, 1999(r)
10.30.1 -- Master Contribution Agreement, dated as of September 25, 2000,
by and among the Company, the Operating Partnership and the
Jacobs entities(s)
10.30.2 -- Amendment to Master Contribution Agreement, dated as of
September 25, 2000, by and among the Company, the Operating
Partnership and the Jacobs entities(t)
10.31 -- Share Ownership Agreement by and among the Company and its
related parties and the Jacobs entities, dated as of
January 31, 2001(t)
10.32.1 -- Registration Rights Agreement by and between the Company and
the Holders of SCU's listed on Schedule 1 thereto, dated as
of January 31, 2001(t)
10.32.2 -- Registration Rights Agreement by and between the Company
and Frankel Midland Limited Partnership, dated as of
January 31, 2001(t)
10.32.3 -- Registration Rights Agreement by and between the Company
and Hess Abroms Properties of Huntsville, dated as of
January 31, 2001(t)
10.33 -- Loan Agreement by and between the Operating Partnership, Wells
Fargo Bank, National Association, Fleet National Bank, U.S.
Bank National Association, Commerzbank AG, New York And Grand
Cayman Branches, and Keybank National Association, together with
certain other lenders parties thereto pursuant to Section 8.6
thereof, dated as of January 31, 2001(t)
21 -- Subsidiaries of the Company, see page 161
23 -- Consent of Arthur Andersen LLP, see page 166
24 -- Power of Attorney, see page 167
- --------------------
(a) Incorporated by reference to Post-Effective Amendment No. 1 to the
Company's Registration Statement on Form S-11 (No. 33-67372), as filed
with the Commission on January 27, 1994.
(b) Incorporated by reference to Amendment No. 2 to the Company's Registration
Statement on Form S-11 (No. 33-67372), as filed with the Commission on
October 26, 1993.
(c) Incorporated herein by reference to the Company's Annual Report in Form
10-K for the fiscal year ended December 31, 1993.
91
CBL & Associates Properties, Inc. - 2001 Form 10K
(d) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1994.
(e) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1994.
(f) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995.
(g) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995.
(h) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995.
(i) Incorporated by reference to the Company's Annual Report in Form 10-K for
the fiscal year ended December 31, 1995.
(j) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1996.
(k) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996.
(l) Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997.
(m) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1998.
(n) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998.
(o) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998.
(p) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999.
(q) Incorporated by reference to the Company's Current Report on Form 8-K,
filed on May 4, 1999.
(r) Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1999.
(s) Incorporated by reference from the Company's Current Report on Form 8-K,
filed on October 27, 2000.
(t) Incorporated by reference from the Company's Current Report on Form 8-K,
filed on February 6, 2001.
+ A management contract or compensatory plan or arrangement required to be
filed pursuant to Item 14(c) of this report.
92
CBL & Associates Properties, Inc. - 2001 Form 10K
(b) Reports on Form 8-K
The outline from the Company's October 31, 2001 conference call with analysts
regarding earnings (item 5) was filed on October 31, 2001.
The outline from the Company's February 7, 2002 conference call with analysts
regarding earnings (Item 5) was filed on February 7, 2002.
93
CBL & Associates Properties, Inc. - 2001 Form 10K
SUBSIDIARIES OF THE COMPANY
STATE OF
INCORPORATION OR
SUBSIDIARY FORMATION
- ----------------------------------------------------- ------------------
Albemarle Partners Limited Partnership North Carolina
APWM, LLC Georgia
Arbor Place GP, Inc. Georgia
Arbor Place Limited Partnership Georgia
Asheville, LLC North Carolina
BJ/Portland Limited Partnership Maine
Bonita Lakes Mall Limited Partnership Mississippi
Brookfield Square Joint Venture Ohio
Bursnville Minnesota, LLC Minnesota
Cadillac Associates Limited Partnership Tennessee
Capital Crossing Limited Partnership North Carolina
Cary Limited Partnership North Carolina
Cary Venture Limited Partnership Delaware
CBL & Associates Limited Partnership Delaware
CBL & Associates Management, Inc. Delaware
CBL Holdings I, Inc. Delaware
CBL Holdings II, Inc. Delaware
CBL Morristown, LTD. Tennessee
CBL Terrace Limited Partnership Tennessee
CBL/34th Street St. Petersburg Limited Partnership Florida
CBL/Bartow Limited Partnership Florida
CBL/BFW Kiosks, LLC Delaware
CBL/Brookfield I, LLC Delaware
CBL/Brookfield II, LLC Delaware
CBL/Brushy Creek Limited Partnership Florida
CBL/Buena Vista Limited Partnership Georgia
CBL/Cary I, LLC Delaware
CBL/Cary II, LLC Delaware
CBL/Cedar Bluff Crossing Limited Partnership Tennessee
CBL/Cherryvale I, LLC Delaware
CBL/Citadel I, LLC Delaware
CBL/Citadel II, LLC Delaware
CBL/Columbia I, LLC Delaware
CBL/Columbia II, LLC Delaware
CBL/Eastgate I, LLC Delaware
CBL/Eastgate II, LLC Delaware
CBL/Fayette I, LLC Delaware
CBL/Fayette II, LLC Delaware
CBL/Foothills Plaza Partnership Tennessee
CBL/GP Cary, Inc. North Carolina
CBL/GP I, Inc. Tennessee
CBL/GP II, Inc. Wyoming
161
CBL & Associates Properties, Inc. - 2001 Form 10K
CBL/GP III, Inc. Mississippi
CBL/GP V, Inc. Tennessee
CBL/GP VI, Inc. Tennessee
CBL/GP, Inc. Wyoming
CBL/Huntsville, LLC Delaware
CBL/J I, LLC Delaware
CBL/J II, LLC Delaware
CBL/Jefferson I, LLC Delaware
CBL/Jefferson II, LLC Delaware
CBL/Karnes Corner Limited Partnership Tennessee
CBL/Kentucky Oaks, LLC Delaware
CBL/Low Limited Partnership Wyoming
CBL/Madison I, LLC Delaware
CBL/Midland I, LLC Delaware
CBL/Midland II, LLC Delaware
CBL/Nashua Limited Partnership New Hampshire
CBL/North Haven, Inc. Connecticut
CBL/Northwoods I, LLC Delaware
CBL/Northwoods II, LLC Delaware
CBL/Old Hickory I, LLC Delaware
CBL/Old Hickory II, LLC Delaware
CBL/Parkdale, LLC Texas
CBL/Perimeter Place Limited Partnership Tennessee
CBL/Plant City Limited Partnership Florida
CBL/Plantation Plaza, L.P. Virginia
CBL/Rawlinson Place Limited Partnership Tennessee
CBL/Regency I, LLC Delaware
CBL/Regency II, LLC Delaware
CBL/Springs Crossing Limited Partnership Tennessee
CBL/Stroud, Inc. Pennsylvania
CBL/Suburban, Inc. Tennessee
CBL/Tampa Keystone Limited Partnership Florida
CBL/Towne Mall I, LLC Delaware
CBL/Towne Mall II, LLC Delaware
CBL/Uvalde, Ltd. Texas
CBL/Wausau I, LLC Delaware
CBL/Wausau II, LLC Delaware
CBL/Wausau III, LLC Delaware
CBL/Wausau IV, LLC Delaware
CBL/Weston I, LLC Delaware
CBL/Weston II, LLC Delaware
CBL/York, Inc. Pennsylvania
Charleston Joint Venture Ohio
Chester Square Limited Partnership Virginia
162
CBL & Associates Properties, Inc. - 2001 Form 10K
Chesterfield Crossing, LLC Virginia
Coastal Way, L.C. Florida
Cobblestone Village at St. Augustine, LLC Florida
College Station Partners, Ltd. Texas
Columbia Joint Venture Ohio
Coolsprings Crossing Limited Partnership Tennessee
Cortlandt Town Center Limited Partnership New York
Cortlandt Town Center, Inc. New York
Cosby Station Limited Partnership Georgia
Courtyard at Hickory Hollow Limited Partnership Delaware
Creekwood Gateway, LLC Florida
Crossville Associates Limited Partnership Tennessee
CV at North Columbus, LLC Georgia
Development Options, Inc. Wyoming
Development Options/Cobblestone, LLC Florida
East Ridge Partners, L.P. Tennessee
East Towne Crossing Limited Partnership Tennessee
Eastgate Company Ohio
Eastridge, LLC North Carolina
ERMC II, L.P. Tennessee
ERMC III, L.P. Tennessee
ERMC IV, LP Tennessee
ERMC V, L.P. Tennessee
Fifty-Eight Partners, L.P. Tennessee
Foothills Mall Associates, LP Tennessee
Foothills Mall, Inc. Tennessee
Frontier Mall Associates Limited Partnership Wyoming
Georgia Square Associates, Ltd. Georgia
Georgia Square Partnership Georgia
Governor's Square Company IB Ohio
Governor's Square Company Ohio
Gunbarrel Commons, LLC Tennessee
Henderson Square Limited Partnership North Carolina
Hickory Hollow Courtyard, Inc. Delaware
Hickory Hollow Mall Limited Partnership Delaware
Hickory Hollow Mall, Inc. Delaware
High Point Development Limited Partnership North Carolina
High Point Development Limited Partnership II North Carolina
Houston Willowbrook LLC Texas
Hudson Plaza Limited Partnership New York
Janesville Mall Limited Partnership Wisconsin
Janesville Wisconsin, Inc. Wisconsin
Jarnigan Road Limited Partnership Tennessee
JC Randolph, LLC Ohio
163
CBL & Associates Properties, Inc. - 2001 Form 10K
Jefferson Mall Company Ohio
JG Saginaw, LLC Ohio
JG Winston-Salem, LLC Ohio
Kentucky Oaks Mall Company Ohio
Kingston Overlook Limited Partnership Tennessee
LaGrange Commons Limited Partnership New York
Lakeshore Gainesville Limited Partnership Georgia
Lakeshore/Sebring Limited Partnership Florida
Leaseco, Inc. New York
Lebcon Associates Tennessee
Lebcon I, Ltd. Tennessee
Lee Partners Tennessee
Lexington Joint Venture Ohio
Lion's Head Limited Partnership Tennessee
Longview Associates Limited Partnership North Carolina
Lunenburg Crossing Limited Partnership Massachusetts
Madison Joint Venture Ohio
Madison Plaza Associates, Ltd. Alabama
Madison Square Associates, Ltd. Alabama
Mall Shopping Center Company, L.P. Texas
Maryville Department Stores Associates Tennessee
Maryville Partners, L.P. Tennessee
Massard Crossing Limited Partnership Arkansas
Meridian Mall Company, Inc. Michigan
Meridian Mall Limited Partnership Michigan
Midland Joint Venture Michigan
Montgomery Partners, L.P. Tennessee
Mortgage Holdings, LLC Delaware
NewLease Corp. Tennessee
North Charleston Joint Venture Ohio
North Haven Crossing Limited Partnership Connecticut
Oak Ridge Associates Limited Partnership Tennessee
Old Hickory Mall Venture Tennessee
Park Village Limited Partnership Florida
Parkdale Mall Associates Texas
Parkway Place Limited Parntership Alabama
Parkway Place, Inc. Alabama
Post Oak Mall Associates Limited Partnership Texas
Property Taxperts, LLC Nevada
Racine Joint Venture Ohio
RC Jacksonville, LC Florida
RC Strawbridge Limited Partnership Virginia
Rivergate Mall Limited Partnership Delaware
Rivergate Mall, Inc. Delaware
164
CBL & Associates Properties, Inc. - 2001 Form 10K
Salem Crossing Limited Partnership Virginia
Sand Lake Corners Limited Partnership Florida
Sand Lake Corners, LC Florida
Scottsboro Associates, Ltd. Alabama
Seacoast Shopping Center Limited Partnership New Hampshire
Shopping Center Finance Corp. Wyoming
Springdale/Mobile GP II, Inc. Alabama
Springdale/Mobile GP, Inc. Alabama
Springdale/Mobile Limited Partnership Alabama
Springdale/Mobile Limited Partnership II Alabama
Springhurst Limited Partnership Kentucky
St. Clair Square GP, Inc. Illinois
St. Clair Square Limited Partnership Illinois
Sterling Creek Commons Limited Partnership Virginia
Stone East Partners, Ltd. Tennessee
Stoney Brook Landing LLC Kentucky
Stroud Mall LLC Pennsylvania
Suburban Plaza Limited Partnership Tennessee
Sutton Plaza GP, Inc. New Jersey
Sutton Plaza Limited Partnership New Jersey
The Galleria Associates, L.P. Tennessee
The Lakes Mall, LLC Michigan
The Landing at Arbor Place Limited Partnership Missouri
The Marketplace at Mill Creek, LLC Georgia
Towne Mall Ohio
Turtle Creek Limited Partnership Mississippi
Twin Peaks Mall Associates, Ltd. Colorado
Valley Crossing Associates Limited Partnership North Carolina
Vicksburg Mall Associates, Ltd. Mississippi
Village at Rivergate Limited Partnership Delaware
Village at Rivergate, Inc. Delaware
Walnut Square Associates Limited Partnership Wyoming
Wausau Joint Venture Ohio
Westgate Crossing Limited Partnership North Carolina
Westgate Mall Limited Partnership South Carolina
Willowbrook Plaza Limited Partnership Maine
(f/k/a Portland/HQ Limited Partnership)
York Galleria Limited Partnership Virginia
165
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 10-K, into CBL & Associates Properties,
Inc.'s previously filed Registration Statements on Forms S-3 (File Nos.
33-62830, 333-90395 and 333-47041) and Forms S-8 (File Nos. 33-73376, 333-04295
and 333-41768).
ARTHUR ANDERSEN LLP
Chattanooga, Tennessee
March 6, 2002
166
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Charles B. Lebovitz, John N. Foy and Stephen D.
Lebovitz and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report of CBL & Associates Properties, Inc. on
Form 10-K for the fiscal year ended December 31, 2001, including one or more
amendments to such Form 10-K, which amendments may make such changes as such
person deems appropriate, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary fully to all intents and purposes as he might or could
do in person thereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power-of-Attorney on
the date set opposite his respective name.
Signature Title Date
/s/ Charles B. Lebovitz Chairman of the Board March 6, 2002
- ------------------------ and Chief
Charles B. Lebovitz Executive Officer
(Principal Executive Officer)
/s/ John N. Foy Vice Chairman of the Board, March 6, 2002
- ------------------------ Chief Financial Officer and
John N. Foy Treasurer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ Stephen D. Lebovitz Director, President March 6, 2002
- ------------------------ and Secretary
Stephen D. Lebovitz
/s/ Claude M.Ballard Director March 6, 2002
- ------------------------
Claude M. Ballard
/s/ Leo Fields Director March 6, 2002
- ------------------------
Leo Fields
/s/ William J.Poorvu Director March 6, 2002
- ------------------------
William J. Poorvu
/s/ Winston W. Walker Director March 6, 2002
- ------------------------
Winston W. Walker
/s/ Gary L. Bryenton Director March 6, 2002
- ------------------------
Gary L. Bryenton
/s/ Martin J. Cleary Director March 6, 2002
- ------------------------
Martin J. Cleary
*By: /s/ Charles B. Lebovitz
------------------------
Charles B. Lebovitz Attorney-in-Fact March 6, 2002
167