UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 8-K/A

(Amendment No. 1)

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES AND EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported):  October 16, 2007

 

CBL & ASSOCIATES PROPERTIES, INC.

 

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

 

1-12494

 

62-1545718

(State or Other Jurisdiction of

Incorporation)

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

 

 

 

 

2030 Hamilton Place Blvd, Suite 500, Chattanooga, TN 37421-6000

(Address of principal executive office, including zip code)

 

 

 

 

 

423.855.0001

(Registrant’s telephone number, including area code)

 

 

 

 

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[ ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[ ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[ ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[ ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

1

 

ITEM 9.01 Financial Statements and Exhibits

 

On October 22, 2007, CBL & Associates Properties, Inc. (“CBL”) filed a Current Report on Form 8-K pursuant to Items 2.01 and 9.01 that reported the completion of two transactions with the Westfield Group (“Westfield”) involving four malls located in the St. Louis, MO area.

 

On October 16, 2007, Chesterfield Mall was acquired by CBL from Westfield in exchange for cash and the assumption of the property’s debt. The assets and liabilities of this property will be accounted for under the purchase method of accounting in CBL’s consolidated financial statements and will be recorded based on their estimated fair values. On that same date, Westfield contributed West County Mall, South County Mall and Mid Rivers Mall to CW Joint Venture LLC (the “JV”), a CBL-controlled joint venture in exchange for 100% of the preferred equity in the JV. Due to the fact that CBL has a controlling voting interest and receives all of the economics of the three properties contributed to the JV once Westfield has received its preferred distribution, CBL will also consolidate these three properties. Therefore, the assets and liabilities of these properties will be accounted for under the purchase method of accounting in CBL’s consolidated financial statements and will be recorded based on their estimated fair values.

 

This Amendment No. 1 to Current Report on Form 8-K provides the required financial statements and pro forma financial information pursuant to parts (a) and (b), respectively, of Item 9.01.

 

Listed below are the financial statements, pro forma financial information and exhibits filed as part of this report:

 

(a)

Financial Statements of Businesses Acquired

 

The combined statement of certain revenues and certain operating expenses of South County Mall, West County Mall, Mid Rivers Mall and Chesterfield Mall (collectively, the “Westfield Malls”) listed in the accompanying Index to Financial Statements and Pro Forma Financial Information is filed as part of this Current Report on Form 8-K/A.

 

(b)

Pro Forma Financial Information

 

The pro forma financial information of CBL & Associates Properties, Inc. listed in the accompanying Index to Financial Statements and Pro Forma Financial Information is filed as part of this Current Report on Form 8-K/A.

 

(c)

Exhibits

 

 

10.22.1

Contribution Agreement among Westfield America Limited Partnership, as Transferor, and CW Joint Venture, LLC, as Transferee, and CBL & Associates Limited Partnership dated August 9, 2007*

 

 

10.22.2

Contribution Agreement among CBL & Associates Limited Partnership, as Transferor, St. Clair Square, GP, Inc. and CW Joint Venture, LLC, as Transferee, and Westfield America Limited Partnership, dated August 9, 2007*

 

 

10.22.3

Purchase and Sale Agreement between Westfield America Limited Partnership, as Transferor, and CBL & Associates Limited Partnership, as Transferee, dated August 9, 2007*

 

 

 

2

 

 

23.1

Consent of Deloitte & Touche LLP

 

 

99.1

Press Release – CBL Completes $1.03 Billion Transaction to Gain Control of Four Leading St. Louis Area Regional Malls**

 

 

*

Incorporated by reference from the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2007 filed on November 9, 2007.

**

Incorporated by reference from the Current Report on Form 8-K filed on October 22, 2007.

 

3

 

          

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

                 CBL & ASSOCIATES PROPERTIES, INC.

 

                 ___________/s/ John N. Foy_____________

 

                 John N. Foy

                 Vice Chairman of the Board,

                 Chief Financial Officer and Treasurer

 

 

Date: January 2, 2008

 

4

 

INDEX TO FINANCIAL STATEMENTS AND

PRO FORMA FINANCIAL INFORMATION

 

The term “acquisition” shall refer to the purchase of a controlling interest in West County Mall, South County Mall and Mid Rivers Mall and the acquisition of Chesterfield Mall by CBL & Associates Properties, Inc. from the Westfield Group.

 

The following historical financial statements and pro forma financial information are presented in accordance with Rule 3-14 and Article 11, respectively, of Regulation S-X of the Securities and Exchange Commission. The historical financial statements have been audited only for the most recent fiscal year preceding the respective acquisition date as these transactions did not involve a related party and the registrant, after reasonable inquiry, is not aware of any material factors related to South County Mall, West County Mall, Mid Rivers Mall and Chesterfield Mall (the “Westfield Malls”) not otherwise disclosed that would cause the reported financial information to not be necessarily indicative of future operating results. In addition, as the Westfield Malls will be directly or indirectly owned by entities that will elect or have elected to be treated as real estate investment trusts (as specified under sections 856-860 of the Internal Revenue Code of 1986) for Federal income tax purposes, a presentation of estimated taxable operating results is not applicable.

 

Page

Number

South County Mall, West County Mall, Mid Rivers Mall

 

and Chesterfield Mall

 

Independent Auditors’ Report

 6

 

Combined Statement of Certain Revenues and Certain Operating Expenses for the Nine

 

Months Ended September 30, 2007 (Unaudited) and the Year Ended December 31, 2006

7

 

Notes to Combined Statement of Certain Revenues and Certain Operating

 

Expenses for the Year Ended December 31, 2006

8

 

CBL & Associates Properties, Inc.

 

Pro Forma Consolidated Statement of Operations for the Year Ended

 

December 31, 2006 (Unaudited)

11

 

Pro Forma Consolidated Statement of Operations for the Nine Months

 

Ended September 30, 2007 (Unaudited)

12

 

Pro Forma Consolidated Balance Sheet as of September 30, 2007 (Unaudited)

 13

 

.

 

 

5

 

 

INDEPENDENT AUDITORS’ REPORT

 

To the Board of Directors and Stockholders

CBL & Associates Properties, Inc.:

 

We have audited the accompanying combined statement of certain revenues and certain operating expenses of South County Mall, West County Mall, Mid Rivers Mall and Chesterfield Mall (the “Westfield Malls”) for the year ended December 31, 2006. This financial statement is the responsibility of CBL & Associates Properties, Inc.’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

 

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Westfield Malls’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

The accompanying combined statement of certain revenues and certain operating expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the filing of a Form 8-K by CBL & Associates Properties, Inc. as a result of the acquisition of one mall and the purchase of a controlling interest in three malls). Material amounts, described in Note 1 to the combined statement of certain revenues and certain operating expenses that would not be directly attributable to those resulting from future operations of the Westfield Malls are excluded, and the financial statement is not intended to be a complete presentation of the Westfield Malls’ revenues and expenses.

 

In our opinion, such financial statement presents fairly, in all material respects, certain revenues and certain operating expenses of the Westfield Malls for the year ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

 

 

/s/ DELOITTE & TOUCHE LLP

 

Atlanta, Georgia

January 2, 2008

 

6

 

 

South County Mall, West County Mall, Mid Rivers Mall and Chesterfield Mall

Combined Statements of Certain Revenues and Certain Operating

Expenses for the Nine Months Ended September 30, 2007 (Unaudited)

and the Year Ended December 31, 2006

(In thousands)

 

 

 

 

Nine Months Ended

September 30, 2007

 

 

 

Year Ended

December 31, 2006

 

 

 

(Unaudited)

 

 

 

 

 

REVENUES:

 

 

 

 

 

 

 

 

 

Minimum rents

 

$

43,349

 

 

 

$

58,897

 

Percentage rents

 

 

695

 

 

 

 

1,537

 

Other rents

 

 

3,812

 

 

 

 

6,371

 

Tenant reimbursements

 

 

16,926

 

 

 

 

22,775

 

Total revenues

 

 

64,782

 

 

 

 

89,580

 

 

 

 

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Property operating

 

 

8,953

 

 

 

 

11,637

 

Real estate taxes

 

 

6,559

 

 

 

 

7,970

 

Maintenance and repairs

 

 

3,852

 

 

 

 

4,916

 

Total expenses

 

 

19,364

 

 

 

 

24,523

 

 

 

 

 

 

 

 

 

 

 

Excess of certain revenues over certain operating expenses

 

$

45,418

 

 

 

$

65,057

 

 

 

See accompanying notes to financial statements.

 

7

 

SOUTH COUNTY MALL, WEST COUNTY MALL, MID RIVERS MALL

 

AND CHESTERFIELD MALL

NOTES TO COMBINED STATEMENT OF CERTAIN REVENUES AND CERTAIN OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2006

 

NOTE 1. ORGANIZATION AND BASIS FOR PRESENTATION

The accompanying combined statement of certain revenues and certain operating expenses (the “Statement”) relates to South County Mall, West County Mall, Mid Rivers Mall and Chesterfield Mall (the “Westfield Malls”), regional shopping malls in Missouri.

 

The term “acquisition” shall refer to the purchase of a controlling interest in West County Mall, South County Mall and Mid Rivers Mall and the acquisition of Chesterfield Mall by CBL & Associates Properties, Inc. (“CBL”) from the Westfield Group (“Westfield”). See Note 4 for further discussion.

 

The Statement is prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended, as a result of the acquisition of the Westfield Malls by CBL. Accordingly, the Statement is not representative of the actual operations of the Westfield Malls for the periods presented as certain revenues and certain operating expenses have been excluded. Such items include depreciation, amortization, interest expense, management fees, leasing commissions and interest income.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition - Rental income comprises minimum rents, expense reimbursements and percentage rent payments. Minimum rents with fixed increases are recognized on a straight-line basis over the initial terms of the related leases. Tenant reimbursements are recognized in the period that the related costs are incurred. The Westfield Malls account for these leases as operating leases as they have retained substantially all risks and benefits of property ownership. Percentage rent is recognized when the tenant’s reported sales have reached certain levels specified in the respective lease.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reporting period. Actual results could differ from those estimates.

NOTE 3. LEASING ACTIVITIES

The Westfield Malls have non-cancelable operating leases with tenants requiring monthly payments of specified minimum rent. The leases generally provide for minimum rentals, plus percentage rentals based upon the retail stores’ sales volume. A majority of the leases require reimbursement by the tenant of their proportionate share of real estate taxes and common area expenses. Future minimum rental commitments under the non-cancelable operating leases at December 31, 2006 are as follows (in thousands):

 

 

8

 

Year Ending December 31,

 

2007

 

 

 

$

54,558

 

2008

 

 

 

 

52,807

 

2009

 

 

 

 

50,418

 

2010

 

 

 

 

49,172

 

2011

 

 

 

 

47,072

 

Thereafter

 

 

 

 

179,515

 

Total

 

 

 

$

433,542

 

 

NOTE 4. SUBSEQUENT EVENT

On October 16, 2007, Chesterfield Mall was acquired by CBL from Westfield in exchange for cash and the assumption of the property’s debt. On that same date, Westfield contributed West County Mall, South County Mall and Mid Rivers Mall to CW Joint Venture LLC (the “JV”), a CBL-controlled joint venture, in exchange for 100% of the preferred equity in the JV.

 

9

 

Pro Forma Financial Information

 

On October 16, 2007, Chesterfield Mall was acquired by CBL & Associates Properties, Inc. (“CBL”) from the Westfield Group (“Westfield”) in exchange for cash and the assumption of the property’s debt. The assets and liabilities of this property will be accounted for under the purchase method of accounting in CBL’s consolidated financial statements and will be recorded based on their estimated fair values. On that same date, Westfield contributed West County Mall, South County Mall and Mid Rivers Mall to CW Joint Venture LLC (the “JV”), a CBL-controlled joint venture in exchange for 100% of the preferred equity in the JV. Due to the fact that CBL has a controlling voting interest and receives all of the economics of the three properties contributed to the JV once Westfield has received its preferred distribution, CBL will also consolidate these three properties. Therefore, the assets and liabilities of these properties will also be accounted for under the purchase method of accounting in CBL’s consolidated financial statements and will be recorded based on their estimated fair values.

 

The term “acquisition” shall refer to the purchase of a controlling interest in West County Mall, South County Mall and Mid Rivers Mall and the acquisition of Chesterfield Mall by CBL from Westfield.

 

The following unaudited pro forma consolidated financial statements are based on the historical consolidated financial statements of CBL and South County Mall, West County Mall, Mid Rivers Mall and Chesterfield Mall (the “Westfield Malls”), consolidated and adjusted to give effect to the acquisition as described in Item 9.01 of this Current Report on Form 8-K/A. The historical consolidated financial statements of CBL have also been adjusted from the amounts reported in its Annual Report on Form 10-K for the year ended December 31, 2006, to appropriately reflect discontinued operations for one mall that was sold during the nine months ended September 30, 2007. These statements should be read in conjunction with the audited historical financial statements and notes thereto of CBL, which are included in CBL’s Annual Report on Form 10-K for the year ended December 31, 2006. These statements should also be read in conjunction with the combined historical financial statements of the Westfield Malls, included elsewhere in this Form 8-K/A.

 

The unaudited pro forma consolidated statements of operations for the year ended December 31, 2006 and the nine months ended September 30, 2007, present the results for CBL and the Westfield Malls as if the acquisition had occurred on January 1, 2006. The accompanying unaudited pro forma consolidated balance sheet as of September 30, 2007, gives effect to the acquisition that occurred subsequent to that date as if it had occurred on September 30, 2007.

 

CBL’s actual consolidated financial statements will reflect the effect of the acquisition on and after the applicable closing date rather than the dates indicated above. The unaudited pro forma consolidated financial statements neither purport to represent what the consolidated results of operations or financial condition actually would have been had the acquisition in fact occurred on the assumed date, nor do they purport to project the consolidated results of operations and financial position for any future period.

 

 

10

 

CBL & Associates Properties, Inc.

Pro Forma Consolidated Statements of Operations

For The Year Ended December 31, 2006

(Unaudited and in thousands, except per share amounts)

 

 

 

CBL
Historical*

 

 

 

Westfield Malls

 

 

 

Pro Forma
Adjustments

 

 

 

CBL
Pro Forma

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum rents

 

$

616,147

 

 

 

$

58,897

 

 

 

$

866

 (a)

 

 

$

675,910

 

Percentage rents

 

 

23,825

 

 

 

 

1,537

 

 

 

 

 

 

 

 

25,362

 

Other rents

 

 

20,061

 

 

 

 

6,371

 

 

 

 

 

 

 

 

26,432

 

Tenant reimbursements

 

 

307,037

 

 

 

 

22,775

 

 

 

 

 

 

 

 

329,812

 

Management, development and leasing fees

 

 

5,067

 

 

 

 

 

 

 

 

 

 

 

 

5,067

 

Other

 

 

23,365

 

 

 

 

 

 

 

 

 

 

 

 

23,365

 

Total revenues

 

 

995,502

 

 

 

 

89,580

 

 

 

 

866

 

 

 

 

1,085,948

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating

 

 

159,827

 

 

 

 

11,637

 

 

 

 

 

 

 

 

171,464

 

Depreciation and amortization

 

 

228,531

 

 

 

 

 

 

 

 

40,786

 (b)

 

 

 

269,317

 

Real estate taxes

 

 

80,316

 

 

 

 

7,970

 

 

 

 

 

 

 

 

88,286

 

Maintenance and repairs

 

 

54,152

 

 

 

 

4,916

 

 

 

 

 

 

 

 

59,068

 

General and administrative

 

 

39,522

 

 

 

 

 

 

 

 

 

 

 

 

39,522

 

Loss on impairment of real estate assets

 

 

480

 

 

 

 

 

 

 

 

 

 

 

 

480

 

Other

 

 

18,623

 

 

 

 

 

 

 

 

 

 

 

 

18,623

 

Total expenses

 

 

581,451

 

 

 

 

24,523

 

 

 

 

40,786

 

 

 

 

646,760

 

Income from operations

 

 

414,051

 

 

 

 

65,057

 

 

 

 

(39,920

)

 

 

 

439,188

 

Interest and other income

 

 

9,083

 

 

 

 

 

 

 

 

 

 

 

 

9,083

 

Interest expense

 

 

(257,067

)

 

 

 

 

 

 

 

(37,714

) (c)

 

 

 

(294,781

)

Loss on extinguishment of debt

 

 

(935

)

 

 

 

 

 

 

 

 

 

 

 

(935

)

Gain on sales of real estate assets

 

 

14,505

 

 

 

 

 

 

 

 

 

 

 

 

14,505

 

Equity in earnings of unconsolidated affiliates

 

 

5,295

 

 

 

 

 

 

 

 

 

 

 

 

5,295

 

Income tax provision

 

 

(5,902

)

 

 

 

 

 

 

 

 

 

 

 

(5,902

)

Minority interest in earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating partnership

 

 

(70,323

)

 

 

 

 

 

 

 

14,803

 (d)

 

 

 

(55,520

)

Shopping center properties

 

 

(4,136

)

 

 

 

 

 

 

 

(20,406

) (e)

 

 

 

(24,542

)

Income from continuing operations

 

$

104,571

 

 

 

$

65,057

 

 

 

$

(83,237

)

 

 

$

86,391

 

Basic per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of preferred dividends

 

$

1.16

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.88

 

Weighted average common shares outstanding

 

 

63,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

63,885

 

Diluted per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of preferred dividends

 

$

1.13

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.85

 

Weighted average common and potential dilutive common
shares outstanding

 

 

65,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

65,269

 

 

 

(a)

Reflects the amortization of acquired above- and below-market leases.

 

 

(b)

Represents depreciation and amortization expense related to buildings and improvements, tenant improvements and in-place leases of the Westfield Malls.

  

 

(c)

Reflects interest expense on the approximate $454,094 of debt assumed (including debt premiums and discounts resulting from recording the debt at its fair value on the date of acquisition pursuant to Statement of Financial Accounting Standards No. 141) which had a combined weighted average effective interest rate of 5.81% as of the acquisition date. Also reflects interest expense on the cash portion of the purchase price totaling $163,755, which is assumed to have been borrowed at CBL’s effective interest rate of 6.81% as of the acquisition date under its unsecured line of credit.

     

 

(d)

Reflects the allocation of earnings to the minority interest in the Operating Partnership related to the results of operations of the Westfield Malls.

     

 

(e)

Reflects the annual preferred distribution of 5.0% on the perpetual preferred joint venture units of the joint venture, calculated pursuant to the provisions of the agreements governing the transactions.

         

 

*

Adjusted to reflect discontinued operations identified during fiscal year 2007.

 

11

CBL & Associates Properties, Inc.

Pro Forma Consolidated Statements of Operations

For The Nine Months Ended September 30, 2007

(Unaudited and in thousands, except per share amounts)

 

 

 

CBL
Historical

 

 

 

Westfield Malls

 

 

 

Pro Forma
Adjustments

 

 

 

CBL
Pro Forma

 

REVENUES:     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum rents     

 

$

465,223

 

 

 

$

43,349

 

 

 

$

507

(a)

 

 

$

509,079

 

Percentage rents     

 

 

11,840

 

 

 

 

695

 

 

 

 

 

 

 

 

12,535

 

Other rents     

 

 

11,942

 

 

 

 

3,812

 

 

 

 

 

 

 

 

15,754

 

Tenant reimbursements     

 

 

235,810

 

 

 

 

16,926

 

 

 

 

 

 

 

 

252,736

 

Management, development and leasing fees     

 

 

6,565

 

 

 

 

 

 

 

 

 

 

 

 

6,565

 

Other     

 

 

15,507

 

 

 

 

 

 

 

 

 

 

 

 

15,507

 

Total revenues     

 

 

746,887

 

 

 

 

64,782

 

 

 

 

507

 

 

 

 

812,176

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES:     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating     

 

 

123,997

 

 

 

 

8,953

 

 

 

 

 

 

 

 

132,950

 

Depreciation and amortization     

 

 

176,067

 

 

 

 

 

 

 

 

28,329

(b)

 

 

 

204,396

 

Real estate taxes     

 

 

65,039

 

 

 

 

6,559

 

 

 

 

 

 

 

 

71,598

 

Maintenance and repairs     

 

 

41,856

 

 

 

 

3,852

 

 

 

 

 

 

 

 

45,708

 

General and administrative     

 

 

29,072

 

 

 

 

 

 

 

 

 

 

 

 

29,072

 

Other     

 

 

12,088

 

 

 

 

 

 

 

 

 

 

 

 

12,088

 

Total expenses     

 

 

448,119

 

 

 

 

19,364

 

 

 

 

28,329

 

 

 

 

495,812

 

Income from operations     

 

 

298,768

 

 

 

 

45,418

 

 

 

 

(27,822

)

 

 

 

316,364

 

Interest and other income     

 

 

7,618

 

 

 

 

 

 

 

 

 

 

 

 

7,618

 

Interest expense     

 

 

(207,730

)

 

 

 

 

 

 

 

(28,016

)(c)

 

 

 

(235,746

)

Loss on extinguishment of debt     

 

 

(227

)

 

 

 

 

 

 

 

 

 

 

 

(227

)

Gain on sales of real estate assets     

 

 

10,565

 

 

 

 

 

 

 

 

 

 

 

 

10,565

 

Equity in earnings of unconsolidated affiliates     

 

 

2,768

 

 

 

 

 

 

 

 

 

 

 

 

2,768

 

Income tax provision     

 

 

(4,360

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,360

)

Minority interest in earnings:     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating partnership     

 

 

(35,886

)

 

 

 

 

 

 

 

11,482

(d)

 

 

 

(24,404

)

Shopping center properties     

 

 

(6,418

)

 

 

 

 

 

 

 

(15,604

)(e)

 

 

 

(22,022

)

Income from continuing operations     

 

$

65,098

 

 

 

$

45,418

 

 

 

$

(59,960

)

 

 

$

50,556

 

Basic per share data:     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of preferred dividends    

 

$

0.63

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.41

 

Weighted average common shares outstanding     

 

 

65,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

65,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted per share data:     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of preferred dividends    

 

$

0.62

 

 

 

 

 

 

 

 

 

 

 

 

 

$

0.40

 

Weighted average common and potential dilutive common

shares outstanding     

 

 

65,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

65,900

 

 

 

(a)

Reflects the amortization of acquired above- and below-market leases.

 

 

(b)

Represents depreciation and amortization expense related to buildings and improvements, tenant improvements and in-place leases of the acquired properties.

     

 

(c)

Reflects interest expense on the approximate $454,094 of debt assumed (including debt premiums and discounts resulting from recording the debt at its fair value on the date of acquisition pursuant to Statement of Financial Accounting Standards No. 141) which had a combined weighted average effective interest rate of 5.81% as of the acquisition date. Also reflects interest expense on the cash portion of the purchase price totaling $163,755, which is assumed to have been borrowed at CBL’s effective interest rate of 6.81% as of the acquisition date under its unsecured line of credit.

     

 

(d)

Reflects the allocation of earnings to the minority interest in the Operating Partnership related to the results of operations of the Westfield Malls.

   

 

(e)

Reflects the annual preferred distribution of 5.0% on the perpetual preferred joint venture units of the joint venture, calculated pursuant to the provisions of the agreements governing the transactions.

   

12

CBL & Associates Properties, Inc.

Pro Forma Consolidated Balance Sheet

September 30, 2007

(in thousands, except share amounts)

 

 

 

CBL
Historical

 

 

 

Pro-forma Adjustments

 

 

 

CBL
Pro Forma

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Land

 

$

828,905

 

 

 

$

51,831

(a)

 

 

$

880,736

 

Buildings and improvements

 

 

6,239,802

 

 

 

 

954,862

(a)

 

 

 

7,194,664

 

 

 

 

7,068,707

 

 

 

 

1,006,693

 

 

 

 

8,075,400

 

Less: accumulated depreciation

 

 

(1,053,459

)

 

 

 

 

 

 

 

(1,053,459

)

 

 

 

6,015,248

 

 

 

 

1,006,693

 

 

 

 

7,021,941

 

Developments in progress

 

 

271,331

 

 

 

 

12,000

 

 

 

 

283,331

 

Net investment in real estate

 

 

6,286,579

 

 

 

 

1,018,693

 

 

 

 

7,305,272

 

Cash and cash equivalents

 

 

48,880

 

 

 

 

 

 

 

 

48,880

 

Cash held in escrow

 

 

33,202

 

 

 

 

 

 

 

 

33,202

 

Receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tenant, net of allowance

 

 

70,121

 

 

 

 

 

 

 

 

70,121

 

Other

 

 

13,734

 

 

 

 

 

 

 

 

13,734

 

Mortgage and other notes receivable

 

 

34,851

 

 

 

 

 

 

 

 

34,851

 

Investment in unconsolidated affiliates

 

 

99,212

 

 

 

 

 

 

 

 

99,212

 

Intangible lease assets and other assets

 

 

228,417

 

 

 

 

56,093

(a)

 

 

 

284,510

 

TOTAL ASSETS

 

$

6,814,996

 

 

 

$

1,074,786

 

 

 

$

7,889,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage and other notes payable

 

$

5,052,266

 

 

 

$

617,849

(b)

 

 

$

5,670,115

 

Accounts payable and accrued liabilities

 

 

324,711

 

 

 

 

33,144

(a)

 

 

 

357,855

 

Total liabilities

 

 

5,376,977

 

 

 

 

650,993

 

 

 

 

6,027,970

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interests

 

 

505,104

 

 

 

 

423,793

(c)

 

 

 

928,897

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock, $.01 par value, 15,000,000 shares authorized:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7.75% Series C Cumulative Redeemable Preferred Stock,
460,000 shares outstanding

 

 

5

 

 

 

 

 

 

 

 

5

 

7.375% Series D Cumulative Redeemable Preferred Stock,
700,000 shares outstanding

 

 

7

 

 

 

 

 

 

 

 

7

 

Common Stock, $.01 par value, 180,000,000 shares authorized,
65,710,828 issued and outstanding

 

 

657

 

 

 

 

 

 

 

 

657

 

Additional paid-in capital

 

 

984,323

 

 

 

 

 

 

 

 

984,323

 

Accumulated other comprehensive loss

 

 

(4,707

)

 

 

 

 

 

 

 

(4,707

)

Accumulated deficit

 

 

(47,370

)

 

 

 

 

 

 

 

(47,370

)

Total shareholders’ equity

 

 

932,915

 

 

 

 

 

 

 

 

932,915

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

6,814,996

 

 

 

$

1,074,786

 

 

 

$

7,889,782

 

 

 

(a)

Represents the allocation of the purchase price of the Westfield Malls to the assets acquired and liabilities assumed. Tangible and intangible assets/liabilities (and the related weighted average depreciable life) include land, buildings (40 years), site improvements (22 years), tenant improvements (10 years), above and below market leases (8 years), in-place leases (8 years) and above and below market ground leases (23 years).

 

 

 

(b)

Represents debt of $454,094 assumed (including debt premiums and discounts resulting from recording the debt at its fair value on the date of acquisition pursuant to Statement of Financial Accounting Standards No. 141) in connection with the acquisitions of the Westfield Malls, plus cash paid of $163,755 in connection with the acquisitions, which is assumed to have been borrowed under CBL’s unsecured line of credit.

 

 

(c)

Represents the total value of the perpetual preferred joint venture units in the underlying joint venture issued to Westfield to acquire the Westfield Malls. At the time of closing, this amount was reduced by $7,680 for prorations.  The annual preferred distribution included in the accompanying proforma consolidated statements of operations are based on the net value of $416,113 issued to Westfield.

 

13