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C&

CBL & ASSOCIATES PROPERTIES INC (CBL)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 2024 was mixed: same-center NOI fell 2.0% year over year to $101.7 million, revenue was relatively flat, diluted EPS was $0.52, and FFO, as adjusted, was $1.54 per diluted share .
  • Sequential operational improvement: portfolio occupancy rose 60 bps to 89.3%, with 882k SF leased and a 9.5% comparable rent increase; tenant sales per square foot grew 1.5% in the quarter .
  • Guidance reiterated: 2024 FFO, as adjusted, remains $196–$210 million; per-share guidance ticked up to $6.34–$6.80 due to buybacks; 2024 SC NOI range held at $425–$436 million with change of -1.2% to +1.4% .
  • Balance sheet actions and capital return are catalysts: October block repurchase (500k shares for $12.525 million), completed $25 million program, and $0.40 quarterly dividend; refinancing lowered rate risk and extended maturities .

What Went Well and What Went Wrong

What Went Well

  • Strong leasing and positive spreads: 882,296 SF leased in Q3 with 9.5% average rent increases; new leases +48.4%, renewals +3.3% .
  • Sequential occupancy improvement and tenant sales growth: portfolio occupancy rose to 89.3% and tenant sales per SF grew 1.5% in the quarter; management noted a solid back-to-school season driving traffic and sales .
  • De-risking the balance sheet: completed non-recourse 10-year loans ($45.0 million at 5.86%) for Hammock Landing and a new $66.0 million loan (6.84%, due 2034) for The Outlet Shoppes of the Bluegrass; year-over-year debt reduced by >$188 million, per CEO .

What Went Wrong

  • Year-over-year occupancy headwinds from bankruptcies: same-center malls/lifestyle/outlet occupancy fell 230 bps YoY to 87.4%; bankruptcy-related closures (rue21, Express) accounted for ~163 bps of decline, with ~234k SF closed in Q2 .
  • Same-center NOI pressure: quarterly SC NOI decreased by $2.0 million driven by a $1.1 million drop in percentage rents and $1.6 million higher operating expenses (maintenance timing, utilities, insurance) despite partial recovery in tenant reimbursements .
  • Percentage rents softer on a year-to-date basis: nine-month percentage rents were $1.8 million lower YoY; TTM tenant sales per SF were down 0.7% to $418 vs $421 in the prior period .

Financial Results

MetricQ3 2023Q2 2024Q3 2024
Total Revenues ($USD Thousands)129,351 129,665 125,089
Diluted EPS ($USD)$0.41 $0.14 $0.52
FFO per Diluted Share ($USD)$1.93 $1.51 $1.28
FFO, as adjusted, per Diluted Share ($USD)$1.60 $1.73 $1.54
Same-Center NOI ($USD Thousands)103,769 108,259 101,722
Same-Center NOI YoY Change (%)N/A+1.5% -2.0%
Adjusted EBITDAre – Company Share ($USD Thousands)97,704 98,733 91,239
Interest Coverage (Adjusted EBITDAre / Interest) (x)2.1x 2.2x 2.1x
Portfolio Occupancy (%)90.8% 88.7% 89.3%
Tenant Sales per SF (TTM, $USD)$421 $417 $418
Percentage Rents ($USD Thousands)3,071 2,748 2,215

Segment Same-Center NOI – Property Type

Property TypeQ3 2023 ($000)Q2 2024 ($000)Q3 2024 ($000)
Malls71,069 72,808 68,466
Outlet Centers5,125 5,304 5,351
Lifestyle Centers8,964 9,047 8,613
Open-Air Centers13,562 14,698 13,826
Outparcels & Other5,049 6,402 5,466
Total103,769 108,259 101,722

Key KPIs

KPIQ3 2023Q2 2024Q3 2024
Total SF Leased (Operating Portfolio)N/A1,074,614 882,296
Comparable Rent Change – All Property Types (%)N/A8.8% 9.5%
New Lease Avg. Rent Change (%)N/A30.8% 48.4%
Renewal Lease Avg. Rent Change (%)N/A6.2% 3.3%
Dividend per Share (Quarter) ($USD)N/A$0.40 (declared for Q3) $0.40 (declared for Q4; accelerated)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FFO, as adjusted (in millions)FY 2024$196–$210 (Q2) $196–$210 (Q3) Maintained
FFO, as adjusted, per shareFY 2024$6.28–$6.72 (Q2) $6.34–$6.80 (Q3) Raised vs Q2 (share count)
WA Share CountFY 202431.2 (Q2) 30.9 (Q3) Lower (buybacks)
Same-Center NOI (in millions)FY 2024$425–$436 (Q2) $425–$436 (Q3) Maintained
Same-Center NOI YoY Change (%)FY 2024-1.2% to +1.4% (Q2) -1.2% to +1.4% (Q3) Maintained
Dividend per Share (Quarter)Q4 2024$0.40 (declared Oct 14) $0.40; record/pay dates accelerated Nov 7 Maintained; pay accelerated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Tenant bankruptcies & occupancyQ2 occupancy decline tied to ~234k SF closures (Express, rue21); Q1 modest decline YoY same-center occupancy fell 230 bps; sequential portfolio occupancy +60 bps Sequential improvement; YoY pressure persists
Leasing demand & spreadsQ1 +10.2% comp rents; Q2 +8.8% comp rents; strong volume (>1.0M SF) Q3 +9.5% comp rents; 882k SF leased; new retailers added (Cavender’s, Rowan, Miniso expansion) Robust and consistent
Percentage rents & salesQ1 TTM sales down 3.7%; Q2 May/June sales +2% Q3 tenant sales +1.5% QoQ; TTM sales -0.7% to $418/SF Near-term lift; TTM still modestly lower
Operating expensesQ1 lower maintenance/third-party costs; Q2 insurance +$0.6M Q3 higher maintenance timing, utilities, insurance (+$1.6M) Expense headwinds
Balance sheet & refinancingQ1 retired Brookfield loan; Q2 Aloft loan at 7.2% Q3 non-recourse loans at 5.86% (Hammock Landing) and 6.84% (Bluegrass); >$188M debt reduced YoY De-risking, lower rate exposure
Capital returnQ1/Q2 ongoing buybacks and $0.40 dividend Oct block repurchase (500k shares; $12.525M), $25M program completed; $0.40 Q4 dividend; pay date accelerated Continued returns

Management Commentary

  • “While same-center NOI declined 2% for the third quarter, we have achieved a 1% year-to-date increase…Revenue on a same-center basis was relatively flat…We also experienced increased operating expense related to the timing of maintenance and repair projects and higher net utility and insurance expense.” — Stephen D. Lebovitz, CEO .
  • “We signed over 880,000 square feet of leases during the third quarter with 9.5% increases for comparable new and renewal leases…We added four new leases with Miniso…We have a solid pipeline of new leasing that we expect to offset this decrease over time.” — Stephen D. Lebovitz, CEO .
  • “Including the Layton Hills sales this quarter, we have reduced our debt by more than $188 million from the prior year period…The new 10-year loan is fully non-recourse and bears a fixed interest rate of 5.86%…We also successfully refinanced…with a new $66.0 million loan, extending the maturity through 2034.” — Stephen D. Lebovitz, CEO .

Q&A Highlights

  • A full earnings call transcript was not available in the document catalog; Q&A highlights are therefore not provided.

Estimates Context

  • Wall Street consensus (S&P Global) estimates for EPS/Revenue were unavailable due to access limitations during retrieval; comparisons to consensus are not provided. When estimates are available, we anchor comparisons on S&P Global.

Key Takeaways for Investors

  • Leasing momentum and spreads remain strong (Q3 comp rents +9.5%), supporting medium-term rent growth potential despite near-term bankruptcy-related vacancies .
  • Sequential occupancy improved to 89.3% even as YoY occupancy remained pressured; management expects pipeline to offset bankruptcy closures over time .
  • Same-center NOI declined due to lower percentage rents (-$1.1M) and higher operating costs (+$1.6M), highlighting sensitivity to consumer sales and expense timing; monitor holiday season and utility/insurance trends .
  • Balance sheet actions reduce risk: non-recourse refinancing replaced higher floating-rate debt (5.86% fixed) and extended maturities, while >$188M YoY debt reduction improves flexibility .
  • Capital returns are meaningful: $12.525M block repurchase (500k shares), completed $25M program (1.074M shares), and $0.40 quarterly dividend (accelerated payment) — a supportive near-term trading catalyst .
  • Guidance held steady for FFO, as adjusted ($196–$210M) and SC NOI ($425–$436M), with per-share FFO guidance increased on lower share count from buybacks — watch execution vs expense headwinds .
  • Risk monitor: percentage rent softness and cash-trapped assets (12 assets, $616M debt) can dampen NAV and cash flow velocity; asset-level optionality remains a lever but may take time .