Cbl & Associates Properties, Inc. · NYSE:CBL
Cbl & Associates Properties — Investor Presentation (April 2014)
37 slides from Cbl & Associates Properties's investor presentation, Apr 11, 2014
Slide 1: Investor Update April 11, 2014
Investor Update April 11, 2014 EXHIBIT 99.2
Slide 2: Safe Harbor Statement
The information included herein contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or incorporated by reference
Slide 3: Strategy and Portfolio Update Today's Agenda
Strategy and Portfolio Update Today’s Agenda 3 • Provide enhanced visibility into our business model and portfolio • Outline our long-term strategy and near-term focus areas to create shareholder value • Review our balance sheet and capital deployment strategy • Address follow-up questions Key Take
Slide 4: Company Overview
Company Overview Mall del Norte Laredo, TX
Slide 5: Company Snapshot
Founded in 1978 | Chattanooga, TN 150 properties totaling over 86M sq. ft. 30 states 94.7% $0.98 annually, ~5.5% yield Investment Grade: Leading Owner and Operator of Market Dominant Regional Malls Company Snapshot 5 35-year History of Developing, Acquiring and Managing Retail Real Estate Baa3 Moody
Slide 6: Geographic Footprint
Geographic Footprint 6 150 Properties in 30 States Totaling 86M+ Sq. Ft. 80 Malls 13 Office Buildings 11 Community Centers 4 Outlet Centers 13 Properties Managed For 3rd Parties 29 Adjacent Associated Centers Malls Outlet Centers As of 12/31/13
Slide 7: We are the Dominant Mall Owner in our Markets
We are the Dominant Mall Owner in our Markets… Unique Model 7 …and the Industry Leading Operator of Dominant Middle Market Malls • Significant barriers to entry • Underserved markets provide attractive growth opportunity for retailers • Competitive retailer occupancy cost contributes to profitabilit
Slide 8: Strategy and Portfolio
Strategy and Portfolio The Outlet Shoppes at Atlanta Woodstock, GA
Slide 9: Strategic Framework
Goal: Maximize Shareholder Value While Maintaining Prudent Risk Profile Strategic Framework 9 Portfolio Transformation • Increase weighting of higher-growth assets through disposition of lower-growth properties • Aggressively pursue accretive redevelopment and expansion • Selectively develop and acq
Slide 10: Recent Accomplishments
We Have Been Busy Transforming CBL… Recent Accomplishments 10 …And Have Made Significant Progress • Divested $220M of lower-growth assets in 2013 • Deployed over $200M into higher-growth assets including: – Invested $82M in redeveloping/expanding existing portfolio assets in 2013 at weighted average
Slide 11: Where We Are, Where We Are Going
Initiatives Will Produce Improvements Going Forward Where We Are Where We Are Going 11 Today (2014) Future Vision Portfolio Occupancy (YE) 94.7% 96%+ Sales PSF $356 $400+ Leasing Spreads (Initial/Avg.) 8.2% / 11.8% Continued Improvement % Mall NOI Tier I & 2 78% 90%+ Tier 3 & Non-core 22% <10% % M
Slide 12: Portfolio Stratification (2013)
Portfolio Performance Will Benefit From Strategic Dispositions… Portfolio Stratification (2013) 12 …Allowing CBL to Focus Resources on Higher-Growth Assets Tier 1 (Sales PSF >$375) 3.0% 28.0% 31.4% 28.9% 97.7% $454 11.9% Tier 2 (Sales PSF $300 - $375) 0.5% 45.8% 46.4% 42.7% 95.3% $342 9.8% Tier 3 (S
Slide 13: Identified Disposition Portfolio
Sales Foreclosures/Restructurings Dispositions Target More Mature, Lower-Growth Assets… Identified Disposition Portfolio 13 • 21 malls and related associated centers identified as disposition candidates • Represents ~15% of total NOI • Est. Total Portfolio Value: $1.0B – $1.25B • CBL’s Share of Tota
Slide 14: Selective Property Reduction
Goal: Increase % of Mall NOI From Higher Performing Tier 1 and Tier 2 Assets Selective Property Reduction 14 Exposure to NOI From Tier 3/Non-Core Assets Reduced by ~50% Number of Malls 10 (1) Number of malls and % of Mall NOI are as of 12/31/13. Pro forma assumes sales of properties identified and f
Slide 15: Impact of Portfolio Transformation
% of Mall NOI Tier 1 31.4% 38.8% +23.6% Tier 2 46.4% 49.8% +7.3% Tier 3/Non-Core 22.2% 11.4% (48.6)% Total SC NOI Growth 0.9% 1.7% +80 bps Mall Occupancy 94.7% 95.6% +90 bps Sales PSF $356 $375 +$19 Initial Stabilized Mall Lease Spreads 8.3% 10.8% 250 bps Total Debt $5.5B $4.6B ($939)M Portfolio Tod
Slide 16: Tactical Disposition Approach
Goal: Execute a Transformative Disposition Strategy Within 24 – 36 Months… Tactical Disposition Approach 16 …Reinvest Proceeds Into Higher-Growth Opportunities • Currently marketing through traditional broker process: ‒ Lakeshore Mall ‒ York Galleria ‒ Stroud Mall ‒ Randolph Mall • In discussions fo
Slide 17: Redevelopment and Expansion Overview
Top Choice for Capital Allocation with Attractive Risk-Adjusted Returns Redevelopment and Expansion Overview 17 Steady Opportunity Within Existing Portfolio • Leverage anchor store relationships to source new redevelopment opportunities – Avg. Anchor Redevelopment Cost: $3M - 10M – Typical Initial U
Slide 18: Redevelopment: Anchor Opportunities
Redevelopment: Anchor Opportunities (1) Excludes four stores expected to close in 2014. (2) Excludes two Sears stores purchased by CBL in 2013 for redevelopment and one store closed after 12/31/13. (3) % of rent includes total gross rent on all owned and leased locations. 18 • 60 stores | 8.1M Sq. F
Slide 19: Creating Value Through Redevelopment/Expansion
Property Project Overview Sq. Ft. Net Annual Rent (Est.) (1) Incremental Investment PF Return (Est.) (2) 2013 Expansions The District at Cross Creek Mall; The Shoppes at Southaven; Volusia Mall Restaurant District; Dick’s Sporting Goods at South County Center; West Towne Shops Addition 169k $4.2M $4
Slide 20: 2014 Anchor Redevelopment: Fayette Mall
2014 Anchor Redevelopment …To the Next Level of Success Redevelopment of Former Sears Location Takes Fayette Mall… • 115k sq. ft. redevelopment project will deliver new-to-the-market, first class names Fayette Mall | Lexington, KY 2013 Sales PSF: $565 2013 YE Occupancy:100% 20 • Tremendous opportuni
Slide 21: Additional Capital Allocation Opportunities
CBL Core Competency: New Development of Market Dominant Retail; Adding High-Growth, High-Return Assets to Core Additional Capital Allocation Opportunities 21 Also Well-Positioned to Pursue Select New Acquisitions w/ JV Partners • Outlet developments generate 10 - 12% initial unleveraged yield – The
Slide 22: Financial Overview
Acadiana Mall Lafayette, LA Financial Overview
Slide 23: 2014 SC NOI Growth Bridge
NOI: 2014 SC NOI Current SC Portfolio NOI Growth Bridge (1) 23 2013 SC Base ~$707 - 714 2014E Operating Expenses Contractual Rent Bumps $9 - 9.5 New Leases $27 - 28 Net Increase From Renewals $2.5 - 3 $(11) - (9) Lost Income Due To Downtime/ Fallout $(19) - (18) % Rent ~$700 Specialty/ Branding and
Slide 24: Prudent Financial Profile
Committed to Maintaining and Enhancing Investment Grade Credit Metrics Prudent Financial Profile 24 Sensible Financial Framework Provides Strong, Balanced Foundation •Maintain balanced capital structure with broad access to multiple capital sources •Reduce cost of capital •Continue to grow unencumbe
Slide 25: Impact of Transformation on Credit Metrics and Covenants
Favorable Impact on Credit Metrics (1)… Impact of Transformation on Credit Metrics and Covenants 25 …Creating Substantial Coverage and Further Strengthening Balance Sheet 2009 2013 2014 Goals Debt/Total Assets 54.7% 51-53% 50-53% < 60% Secured Debt/ Total Assets 41.2% 28-30% 30-33% < 45% Unencumbe
Slide 26: Unencumbered Assets Progress
CBL is Committed to Growing a High Quality Unencumbered Asset Pool Unencumbered Assets Progress 26 (1) Pro forma for payoff of St. Clair Square in January 2014. $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Wholly-owned Asset Loan Maturities ($MM) Existing Unencumbered Asset Pool (1) Gross Book Value L
Slide 27: Estimated 2014 Sources and Uses
Estimated 2014 Sources and Uses Estimated Sources $MM Net Cash Flow $276 Cash at 12/31/13 65 Coastal Grand Refi Gross Proceeds 65 Construction Loan Draws 95 Credit Line Usage 195 TOTAL ESTIMATED SOURCES $697 Estimated Uses $MM Development $(225) Common Stock Dividends (199) Mortgage Payoffs(1) (272)
Slide 28: Summary
Friendly Center Greensboro, NC Summary
Slide 29: Key Take-Away
CBL Management is Committed to Accelerating the Pace of Change…. Key Take-Away 29 …Using Our Core Competencies to Generate Higher, Long-term Growth Proactively convert under- performing retail locations into higher- quality, higher productivity locations Divest lower growth assets Future CBL SC NOI
Slide 30: Appendix
Appendix CoolSprings Galleria Nashville, TN
Slide 31: Improving Balance Sheet: Substantial Deleveraging Since 2008
Improving Balance Sheet: Substantial Deleveraging Since 2008… Appendix 31 …With Total Debt Reduction of ~$1.1B Including $740M in Secured Debt $5,124 $4,989 $4,715 $4,830 $4,731 $4,383 $1,509 $1,197 $1,036 $437 $714 $679 $445 (2) $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 2008 2009 2010 201
Slide 32: Debt Maturities
Debt Maturities (1) Appendix Well-laddered Maturities with Average of 10% of Total Maturing Annually 104 181 453 197 709 752 668 330 82 191 553 716 123 445(2) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Credit Facilities/Term/Construction Loans Mortgage Loans Senior Unsecured Bonds $197 $709 $
Slide 33: Key Metrics Tracking to Objectives
Key Metrics Tracking to Objectives; Generally Trending Favorably Appendix 33 2.4x 2.5x 2.6x 2.9x 2010 2011 2012 2013 Interest Coverage 7.8x 7.1x 7.3x 7.2x 2010 2011 2012 2013 Total Debt/EBITDA 56.5% 52.9% 52.4% 54.7% 2010 2011 2012 2013 Total Debt/Undepreciated Book Value Of Assets1 43.5% 40.0% 42.2
Slide 34: Achieved Improvements in Operating Metrics
Achieved Improvements in Operating Metrics Appendix 34 2009 2013 2014 Goals Portfolio Occupancy 92.4% 94.7% + 230 bps +0 – 25 bps Sales PSF $322 $356 + 10.6% Maintain Avg. Leasing Spread (7.5%) 11.8% + 1,930 bps Double-digit spreads SC NOI Growth (1.3%) +0.9% + 220 bps +1 – 2% 2010 Goal
Slide 35: 2014 Guidance - Reconciliation of EPS to FFO
2014 Guidance - Reconciliation of EPS to FFO Appendix 35 2014 Adj. FFO Per Share Guidance: $2.22 – 2.26 Low High Expected dilution earnings per common share $0.62 $0.66 Adjusted to fully converted shares from common shares (0.10) (0.10) Expected earnings per diluted, fully converted share 0.52 0.56
Slide 36: Mall Portfolio by Tier
Appendix 36 Tier 1 Acadiana Mall Lafayette, LA Cross Creek Mall Fayetteville, NC Dakota Square Mall (1) Minot, ND Fayette Mall Lexington, KY Friendly Center Greensboro, NC Hamilton Place Chattanooga, TN Imperial Valley Mall El Centro, CA Kirkwood Mall (1) Bismarck, ND Mall del Norte Laredo, TX Oak P
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures Appendix 37 Please refer to the Company’s Form 8-K filed on 02/05/14 for the reconciliations of the historical non-GAAP measures referred to below to the comparable GAAP financial measures. Funds From Operations FFO is a widely used measure of the operating performance of
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