Securities Exchange Act of 1934 -- Form 10-Q =================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999 ----------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended to ------------- ------------- Commission File Number 1-12494 ------------------------------------- CBL & Associates Properties, Inc. ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 62-1545718 ------------------------------- ------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Park Place, 6148 Lee Highway, Chattanooga, TN 37421 -------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code)(423) 855-0001 -------------- ----------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 ----- ----- The number of shares outstanding of each of the registrants classes of common stock, as of August 6, 1999 : Common Stock, par value $.01 per share, 24,710,702 Shares. -1-
CBL & Associates Properties, Inc. INDEX PART I FINANCIAL INFORMATION PAGE NUMBER ----------- ITEM 1: FINANCIAL INFORMATION 3 CONSOLIDATED BALANCE SHEETS - AS OF JUNE 30, 4 1999 AND DECEMBER 31, 1998 CONSOLIDATED STATEMENTS OF OPERATIONS - FOR 5 THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998 AND FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR 6 THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7 ITEM 2: MANAGEMENT'S DISCUSSION AND 10 ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PART II OTHER INFORMATION ITEM 1: LEGAL PROCEEDINGS 22 ITEM 2: CHANGES IN SECURITIES 22 ITEM 3: DEFAULTS UPON SENIOR SECURITIES 22 ITEM 4: SUBMISSION OF MATTERS TO HAVE A 22 VOTE OF SECURITY HOLDERS ITEM 5: OTHER INFORMATION 22 ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 22 SIGNATURE 23 -2-
CBL & Associates Properties, Inc. ITEM 1 - FINANCIAL INFORMATION The accompanying financial statements are unaudited; however, they have been prepared in accordance with generally accepted accounting principles for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. The results for the interim period ended June 30, 1999 are not necessarily indicative of the results to be obtained for the full fiscal year. These financial statements should be read in conjunction with the CBL & Associates Properties, Inc. (the "Company") December 31, 1998 audited financial statements and notes thereto included in the CBL & Associates Properties, Inc. Form 10-K for the year ended December 31, 1998. -3-
CBL & Associates Properties, Inc. Consolidated Balance Sheets (Dollars in thousands) (UNAUDITED) <TABLE> <CAPTION> June 30, December 31, 1999 1998 ---- ---- <S> <C> <C> ASSETS Real estate assets: Land $ 266,693 $265,521 Buildings and improvements 1,632,677 1,609,831 --------- --------- 1,899,370 1,875,352 Less: Accumulated depreciation (201,786) (177,055) --------- --------- 1,697,584 1,698,297 Developments in progress 165,743 107,491 --------- --------- Net investment in real estate assets 1,863,327 1,805,788 Cash and cash equivalents 8,211 5,827 Receivables: Tenant 16,100 17,337 Other 1,774 2,076 Mortgage notes receivable 9,644 9,118 Other assets 17,012 15,201 --------- --------- $1,916,068 $1,855,347 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Mortgage and other notes payable $1,260,600 $1,208,204 Accounts payable and accrued liabilities 62,022 62,466 --------- --------- Total liabilities 1,322,622 1,270,670 --------- --------- Distributions and losses in excess of investment in unconsolidated affiliates 4,806 855 --------- --------- Minority interest 169,330 168,040 --------- --------- Commitments and contingencies (Note 2) Shareholders' Equity: Preferred stock, $.01 par value, 5,000,000 shares authorized, 2,875,000 outstanding in 1999 and 1998 29 29 Common stock, $.01 par value, 95,000,000 shares authorized, 24,700,480 and 24,590,936 shares issued and outstanding in 1999 and 1998, respectively 247 246 Additional paid - in capital 454,605 452,252 Accumulated deficit (35,207) (36,235) Deferred compensation (364) (510) --------- --------- Total shareholders' equity 419,310 415,782 --------- --------- $1,916,068 $1,855,347 ========= ========= <FN> The accompanying notes are an integral part of these balance sheets. </FN> </TABLE> -4-
CBL & Associates Properties, Inc. Consolidated Statements Of Operations (In thousands, except per share data) (Unaudited) <TABLE> <CAPTION> Three Months Ended Six Months Ended June 30, June 30, ------------------------ ----------------------- 1999 1998 1999 1998 -------- -------- -------- -------- <S> <C> <C> <C> <C> REVENUES: Rentals: Minimum $ 48,690 $ 37,967 $ 96,552 $ 74,020 Percentage 1,670 1,154 4,902 2,829 Other 594 387 1,408 820 Tenant reimbursements 20,981 16,552 41,655 32,003 Management, development and leasing fees 969 723 2,009 1,419 Interest and other 1,287 616 2,213 1,364 -------- -------- -------- -------- Total revenues 74,191 57,399 148,739 112,455 -------- -------- -------- -------- EXPENSES: Property operating 11,682 9,480 23,165 18,324 Depreciation and amortization 12,890 9,720 25,566 18,875 Real estate taxes 6,332 5,290 13,287 10,252 Maintenance and repairs 4,208 3,295 8,270 6,295 General and administrative 3,531 2,730 7,357 5,731 Interest 19,665 15,042 39,436 28,817 Other 146 3 888 9 -------- -------- -------- -------- Total expenses 58,454 45,560 117,969 88,303 -------- -------- -------- -------- Income from operations 15,737 11,839 30,770 24,152 Gain on sales of real estate assets 3,767 581 8,568 2,512 Equity in earnings of unconsolidated affiliates 806 431 1,741 1,168 Minority interest in earnings: Operating partnership (5,457) (3,604) (12,115) (7,777) Shopping center properties (297) (99) (662) (308) -------- -------- -------- -------- Net income 14,556 9,148 28,302 19,747 Preferred dividends (1,617) -- (3,234) -- -------- -------- -------- -------- Net income available to common shareholders $ 12,939 $ 9,148 $ 25,068 19,747 ======== ======== ======== ======== Basic per share data: NET INCOME $ 0.53 $ 0.38 $ 1.02 $ 0.82 ======== ======== ======== ======== Weighted average common shares 24,629 24,079 24,602 24,075 outstanding ======== ======== ======== ======== Diluted per share data: NET INCOME $ 0.52 $ 0.38 $ 1.01 $ 0.81 ======== ======== ======== ======== Weighted average common shares and 24,871 24,311 24,835 24,308 potential dilutive common shares ======== ======== ======== ======== outstanding <FN> The accompanying notes are an integral part of these statements. </FN> </TABLE> -5-
CBL & Associates Properties, Inc. Consolidated Statements of Cash Flows (Dollars in thousands) (UNAUDITED) <TABLE> <CAPTION> Six Months Ended June 30, ----------------------- 1999 1998 -------- -------- <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Net income $28,302 $19,747 Adjustments to reconcile net income to net cash provided by operating activities: Minority interest in earnings 12,777 8,085 Depreciation 21,203 15,985 Amortization 4,997 3,452 Gain on sales of real estate assets (8,568) (2,512) Equity in earnings of unconsolidated affiliates (1,741) (1,168) Distributions from unconsolidated affiliates 8,595 2,182 Issuance of stock under incentive plan 36 265 Amortization of deferred compensation 249 222 Write-off of development projects 888 9 Distributions to minority investors (11,276) (8,754) Changes in assets and liabilities - Tenant and other receivables 1,539 (1,900) Other assets (2,641) (2,127) Accounts payable and accrued liabilities (1,606) 624 -------- -------- Net cash provided by operating activities 52,754 34,110 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Construction of real estate assets and land acquisition (76,717) (55,044) Acquisition of real estate assets -- (184,661) Capitalized interest (3,083) (2,467) Other capital expenditures (8,610) (8,485) Deposits in escrow -- 66,108 Proceeds from sales of real estate assets 14,249 6,316 Additions to mortgage notes receivable (1,360) (1,478) Payments received on mortgage notes receivable 834 1,234 Advances and investments in unconsolidated affiliates (2,846) (643) -------- -------- Net cash used in investing activities (77,533) (179,120) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from mortgage and other notes payable 126,463 189,663 Principal payments on mortgage and other notes payable (74,067) (89,147) Additions to deferred financing costs (779) (700) Proceeds from issuance of preferred stock -- 70,175 Proceeds from issuance of common stock 769 155 Proceeds from exercise of stock options 1,446 -- Dividends paid (26,669) (21,843) -------- -------- Net cash provided by financing activities 27,163 148,303 -------- -------- NET CHANGE IN CASH AND CASH EQUIVALENTS 2,384 3,293 CASH AND CASH EQUIVALENTS, beginning of period 5,827 3,124 -------- -------- CASH AND CASH EQUIVALENTS, end of period $8,211 $6,417 ======== ======== Cash paid for interest, net of amounts capitalized $39,117 $27,751 ======== ======== <FN> The accompanying notes are an integral part of these statements. </FN> </TABLE> -6-
CBL & Associates Properties, Inc. Notes to Consolidated Financial Statements Note 1 - Unconsolidated Affiliates At June 30, 1999, the Company had investments in five partnerships all of which are reflected using the equity method of accounting. Condensed combined results of operations for the unconsolidated affiliates are presented as follows (dollars in thousands): <TABLE> <CAPTION> Company's Share Total For The For The Six Months Ended Six Months Ended June 30, June 30, ------------------ ------------------- 1999 1998 1999 1998 ------- ------- ------ ------- <S> <C> <C> <C> <C> Revenues $13,638 $11,251 $6,718 $5,526 ------- ------- ------ ------ Depreciation and amortization 1,587 674 779 332 Interest expense 4,213 4,041 2,074 1,984 Other operating expenses 4,293 4,145 2,124 2,042 ----- ----- ----- ----- Net income $3,545 $2,391 $1,741 $1,168 ====== ====== ====== ====== </TABLE> Note 2 - 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 statements of the Company. Additionally, based on environmental studies completed to date on the real estate properties, management believes any exposure related to environmental cleanup will not be significant to the financial position and results of operations of the Company. -7-
Note 3 - Credit Agreements The Company has credit facilities of $230 million of which $68.7 million is available at June 30, 1999. Outstanding amounts under the credit facilities bear interest at a weighted average interest rate of 6.25% at June 30, 1999. The Company's variable rate debt as of June 30, 1999 was $499 million with a weighted average interest rate of 6.40% as compared to 6.73% as of June 30, 1998. Through the execution of interest rate swap agreements, the Company has fixed the interest rates on $314 million of variable rate debt on operating properties at a weighted average interest rate of 6.55%. There were no fees charged to the Company related to these swap agreements. Of the Company's remaining variable rate debt of $185 million, interest rate caps are in place on $100 million leaving $85 million of debt subject to variable rates. The Company's variable rate debt is limited to construction properties with no debt subject to variable rates on operating properties. The Company's swap agreements in place at June 30, 1999 are as follows: <TABLE> <CAPTION> Swap Amount (in millions) Fixed LIBOR Component Effective Date Expiration Date ------------- --------------------- -------------- --------------- <S> <C> <C> <C> $65 5.72% 01/07/98 01/07/2000 81 5.54% 02/04/98 02/04/2000 50 5.70% 06/15/98 06/15/2001 38 5.73% 06/26/98 06/30/2001 80 5.49% 09/01/98 09/01/2001 </TABLE> At June 30, 1999, the Company had an interest rate cap of 7.5% on $100 million of LIBOR-based variable rate debt. Note 4 - 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): <TABLE> <CAPTION> Associated Community Three Months Ended June 30, 1999 Malls Centers Centers All Other Total - ------------------------------------- ----- ------- ------- --------- ----- <S> <C> <C> <C> <C> <C> Revenues $ 54,403 $3,009 $14,594 $ 2,185 $ 74,191 Property operating expenses (1) (19,305) (484) (2,558) 125 (22,222) Interest expense (14,970) (647) (3,032) (1,016) (19,665) Gain on sales of real estate assets - - - 3,767 3,767 -------- ------- ------- ------- -------- Segment profit and loss 20,128 1,878 9,004 5,061 36,071 ======== ======= ======= ======= Depreciation and amortization (12,890) General and administrative and other (3,677) Equity in earnings and minority interest adjustment (4,948) -------- Net income $14,556 ======== Capital expenditures (2) $ 7,875 $ 535 $6,568 $34,541 $49,519 </TABLE> -8-
<TABLE> <CAPTION> Associated Community Three Months Ended June 30, 1998 Malls Centers Centers All Other Total - ------------------------------------- ----- ------- ------- --------- ----- <S> <C> <C> <C> <C> <C> Revenues $ 40,596 $2,215 $13,096 $ 1,492 $ 57,399 Property operating expenses (1) (15,015) (804) (5,230) 2,984 (18,065) Interest expense (10,539) (330) (3,054) (1,119) (15,042) Gain on sales of real estate assets 216 - - 365 581 -------- ------- ------- ------- -------- Segment profit and loss 15,258 1,081 4,812 3,722 24,873 ======== ======= ======= ======= Depreciation and amortization (9,720) General and administrative and other (2,733) Equity in earnings and minority interest adjustment (3,272) -------- Net income $ 9,148 ======== Capital expenditures (2) $49,358 $3,948 $10,173 $13,870 $77,349 </TABLE> <TABLE> <CAPTION> Associated Community Six Months Ended June 30, 1999 Malls Centers Centers All Other Total - ------------------------------------- ----- ------- ------- --------- ----- <S> <C> <C> <C> <C> <C> Revenues $110,015 $5,914 $28,631 $4,179 $148,739 Property operating expenses (1) (38,587) (963) (3,046) (2,126) (44,722) Interest expense (29,548) (1,274) (5,813) (2,801) (39,436) Gain on sales of real estate assets 381 - 404 7,783 8,568 -------- ------- ------- ------- -------- Segment profit and loss 42,261 3,677 20,176 7,035 73,149 ======== ======= ======= ======= Depreciation and amortization (25,566) General and administrative and other (8,245) Equity in earnings and minority interest adjustment (11,036) -------- Net income $28,302 ======== Total assets (2) $1,241,259 $82,462 $427,554 $164,793 $1,916,068 Capital expenditures (2) $11,357 $2,209 $8,753 $59,951 $82,270 </TABLE> <TABLE> <CAPTION> Associated Community Six Months Ended June 30, 1998 Malls Centers Centers All Other Total - ------------------------------------- ----- ------- ------- --------- ----- <S> <C> <C> <C> <C> <C> Revenues $79,174 $4,391 $26,192 $2,698 $112,455 Property operating expenses (1) (28,131) (804) (5,230) (706) (34,871) Interest expense (20,238) (689) (5,990) (1,900) (28,817) Gain on sales of real estate assets 216 - - 2,296 2,512 -------- ------- ------- ------- -------- Segment profit and loss 31,021 2,898 14,972 2,388 51,279 ======== ======= ======= ======= Depreciation and amortization (18,875) General and administrative and other (5,740) Equity in earnings and minority interest adjustment (6,917) -------- Net income $19,747 ======== Total assets (2) $871,671 $66,627 $397,429 $77,332 $1,413,059 Capital expenditures (2) $201,725 $6,045 $15,358 $21,706 $244,834 <FN> (1) Property operating expenses includes property operating expenses, real estate taxes, and maintenance and repairs. (2) Developments in progress are included in the "All Other" category. </FN> </TABLE> -9-
CBL & Associates Properties, Inc. Item 2: 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 contains "forward-looking statements" within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual 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, including without limitation the Company's Annual Report on Form 10-K and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" incorporated by reference therein, for a discussion of such risks and uncertainties. GENERAL BACKGROUND CBL & Associates Properties, Inc. (the "Company") Consolidated Financial Statements and Notes thereto reflect the consolidated financial results of CBL & Associates Limited Partnership (the "Operating Partnership") which includes at June 30, 1999, the operations of a portfolio of properties consisting of twenty-four regional malls, thirteen associated centers, eighty-two community centers, an office building, joint venture investments in four regional malls and one associated center, and income from six mortgages (the "Properties"). The Operating Partnership also has one mall, one associated center, three community centers and two expansions currently under construction and options to acquire certain shopping center development sites. The consolidated financial statements also include the accounts of CBL & Associates Management, Inc. (the "Management Company"). The Company classifies its regional malls into two categories - malls which have completed their initial lease-up ("Stabilized Malls") and malls which are in their initial lease-up phase ("New Malls"). The New Mall category is presently comprised of a redevelopment project Springdale Mall in Mobile, Alabama, the recently opened Bonita Lakes Mall in Meridian, Mississippi and Parkway Place Mall in Huntsville, Alabama which was acquired in December 1998 and is being redeveloped in a joint venture with a third party. In July 1999, the Company acquired York Galleria in York, Pennsylvania. The purchase price of $68.5 million was funded from a mortgage loan in the amount of $51.1 million and $30 million in proceeds from the Company's disposition of two department stores, and two free-standing community centers. The balance of the proceeds from the dispositions of $12.6 million were used to pay down the Company's credit lines. The State of Tennessee has recently enacted legislation that would extend franchise and excise taxes to limited partnerships for tax years ending in 2000. The Company's has not determined the impact of the new legislation on its operations in Tennessee. -10-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations RESULTS OF OPERATIONS Operational highlights for the three monthsand six months ended June 30, 1999 as compared to June 30, 1998 are as follows: SALES Mall shop sales, for those tenants who have reported, in the twenty-five Stabilized Malls in the Company's portfolio increased by 5.0% on a comparable per square foot basis. <TABLE> <CAPTION> Six Months Ended June 30, ------------------------- 1999 1998 ---- ---- <S> <C> <C> Sales per square foot $120.91 $115.15 </TABLE> Total sales volume in the mall portfolio, including New Malls, increased 6.2% to $670.7 million for the six months ended June 30, 1999 from $631.6 million for the six months ended June 30, 1998. Occupancy costs as a percentage of sales for the six months ended June 30, 1999 and 1998 for the Stabilized Malls were 13.2% and 12.9%, respectively. Occupancy costs were 11.2%, 11.2% and 11.5% for the years ended December 31, 1998, 1997, and 1996, respectively. Occupancy costs as a percentage of sales are generally higher in the first three quarters of the year as compared to the fourth quarter due to the seasonality of retail sales. OCCUPANCY Occupancy for the Company's overall portfolio was as follows: <TABLE> <CAPTION> At June 30, ----------------------- 1999 1998 ---- ---- <S> <C> <C> Stabilized malls 92.0% 91.9% New malls 82.8 90.5 Associated centers 91.7 88.8 Community centers 96.6 97.6 ----- ----- Total Portfolio 93.5% 94.2% ----- ----- </TABLE> Occupancy in the new mall category has been affected by the inclusion of two properties that are being redeveloped Parkway Place in Huntsville, Alabama and Springdale Mall in Mobile, Alabama. Excluding Parkway Place and Springdale, new mall occupancy at the end of the quarter would have been 98.8% and total portfolio occupancy would have been 94.1%. -11-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations AVERAGE BASE RENT Average base rents for the Company's three portfolio categories were as follows: <TABLE> <CAPTION> At June 30, ----------------------- 1999 1998 ---- ---- <S> <C> <C> Malls $19.95 $19.01 Associated centers 9.61 9.62 Community centers 8.10 8.00 </TABLE> LEASE ROLLOVERS On spaces previously occupied, the Company achieved the following results from rollover leasing for the six months ended June 30, 1999 compared to the base and percentage rent previously paid: <TABLE> <CAPTION> Per Square Per Square Foot Rent Foot Rent Percentage Prior Lease (1) New Lease (2) Increase --------------- ------------- ---------- <S> <C> <C> <C> Malls $22.51 $26.25 16.6% Associated centers 7.75 8.76 13.0% Community centers 7.87 8.15 3.6% <FN> (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. </FN> </TABLE> For the six months ended June 30, 1999, malls represented 76.1% of total revenues from all properties; revenues from associated centers represented 3.9%; revenues from community centers represented 17.9%; and revenues from mortgages and the office building represented 2.1%. 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 fiscal year. COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1999 TO THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1998 Total revenues for the three months ended June 30, 1999 increased by $16.8 million, or 29.3%, to $74.2 million as compared to $57.4 million in 1998. Minimum rents increased by $10.7 million, or 28.2%, to $48.7 million as compared to $38.0 million in 1998, and tenant reimbursements increased by $4.4 million, or 26.8%, to $21.0 million in 1999 as compared to $16.6 million in 1998. Percentage rents increased by $0.5 million, or 44.7%, to $1.7 million as compared to $1.2 million in 1998. -12-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations Management, leasing and development fees increased by $0.2 million, or 34.0%, to $1.0 million as compared to $0.7 million in 1998. This increase is primarily due to increases in fees earned in the co-development program and increases in management fees. Approximately $13.8 million of the increase in revenues resulted from operations at the eleven new centers opened or acquired during the past eighteen months. These centers consist of: <TABLE> <CAPTION> Opening/ Project Name Location Total GLA Type of Addition Acquisition Date - ------------ -------- --------- ---------------- ---------------- <S> <C> <C> <C> <C> Sterling Creek Commons Portsmouth, Virginia 65,000 New Development June 1998 Stroud Mall Stroudsburg, Pennsylvania 427,000 Acquisition April 1998 Hickory Hollow Mall Nashville, Tennessee 1,096,000 Acquisition July 1998 Courtyard at Hickory Hollow Nashville, Tennessee 77,000 Acquisition July 1998 Rivergate Mall Nashville, Tennessee 1,074,000 Acquisition July 1998 Village at Rivergate Nashville, Tennessee 166,000 Acquisition July 1998 Lions Head Village Nashville, Tennessee 93,000 Acquisition July 1998 Janesville Mall Janesville, Wisconsin 609,000 Acquisition August 1998 Meridian Mall Lansing, Michigan 767,000 Acquisition August 1998 Fiddler's Run Morganton, North Carolina 203,000 New Development March 1999 Sand Lake Corners Orlando, Florida 559,000 New Development June/July 1999 </TABLE> Approximately $3.0 million of the increase in revenues resulted from improved operations and occupancies in the existing centers. The majority of these increases were generated at Cortlandt Towne Center in Cortlandt, New York and St. Clair Square in Fairview Heights, Illinois. Property operating expenses, including real estate taxes and maintenance and repairs increased in the second quarter of 1999 by $4.2 million or 23.0% to $22.2 million as compared to $18.1 million in the second quarter of 1998. This increase is primarily the result of the addition of the eleven new centers referred to above. Depreciation and amortization increased in the second quarter of 1999 by $3.2 million or 32.6% to $12.9 million as compared to $9.7 million in the second quarter of 1998. This increase is primarily due to the addition of the eleven new centers referred to above. Interest expense increased in the second quarter of 1999 by $4.6 million, or 30.7% to $19.7 million as compared to $15.0 million in 1998. This increase is primarily due to the additional interest on the eleven centers added during the last eighteen months referred to above. The gain on sales of real estate assets increased in the second quarter of 1999 by $3.2 million, to $3.8 million as compared to $0.5 million in 1998. The majority of gain on sales in the second quarter of 1999 were from anchor pad sales at the development project Chesterfield Crossing in Richmond, Virginia and outparcel sales at The Landing at Arbor Place in Douglasville, Georgia. Equity in earnings of unconsolidated affiliates increased in the second quarter of 1999 by $0.4 million to $0.8 million from $0.4 million in the second quarter of 1998 primarily due to the acquisition of a 50% interest in Parkway Place in Huntsville, Alabama. -13-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations COMPARISON OF RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999 TO THE RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 Total revenues for the six months ended June 30, 1999 increased by $36.3 million, or 32.3%, to $148.7 million as compared to $112.5 million in 1998. Of this increase, minimum rents increased by $22.5 million, or 30.4%, to $96.6 million as compared to $74.0 million in 1998, and tenant reimbursements increased by $9.7 million, or 30.2%, to $41.7 million in 1999 as compared to $32.0 million in 1998. Improved occupancies and operations and increased rents in the Company's operating portfolio generated $6.5 million of increased revenues. The majority of these increases were generated at Cortlandt Towne Center in Cortlandt, New York and St. Clair Square in Fairview Heights, Illinois. New revenues of $29.8 resulted from operations at the twelve new centers opened or acquired during the past eighteen months. These centers are as follows: <TABLE> <CAPTION> Opening/ Project Name Location Total GLA Type of Addition Acquisition Date - ------------ -------- --------- ---------------- ---------------- <S> <C> <C> <C> <C> Sterling Creek Commons Portsmouth, Virginia 65,000 New Development June 1998 Burnsville Center Minneapolis (Burnsville), 1,070,000 Acquisition February 1998 Minnesota Stroud Mall Stroudsburg, Pennsylvania 427,000 Acquisition April 1998 Hickory Hollow Mall Nashville, Tennessee 1,096,000 Acquisition July 1998 Courtyard at Hickory Hollow Nashville, Tennessee 77,000 Acquisition July 1998 Rivergate Mall Nashville, Tennessee 1,074,000 Acquisition July 1998 Village at Rivergate Nashville, Tennessee 166,000 Acquisition July 1998 Lions Head Village Nashville, Tennessee 93,000 Acquisition July 1998 Janesville Mall Janesville, Wisconsin 609,000 Acquisition August 1998 Meridian Mall Lansing, Michigan 767,000 Acquisition August 1998 Fiddler's Run Morganton, North Carolina 203,000 New Development March 1999 Sand Lake Corners Orlando, Florida 559,000 New Development June/July 1999 </TABLE> Management, leasing and development fees increased by $0.6 million to $2.0 million in the first six months of 1999 as compared to $1.4 million in 1998. This increase was primarily due to fees earned in the Company's co-development program and increases in management fees on managed properties. Property operating expenses, including real estate taxes and maintenance and repairs, increased in the first six months of 1999 by $9.9 million, or 28.2%, to $44.7 million as compared to $34.9 million in 1998. This increase is primarily the result of the addition of the twelve new centers referred to above. Depreciation and amortization increased in the first six months of 1999 by $6.7 million, or 35.4%, to $25.6 million as compared to $18.9 million in 1998. This increase is primarily the result of the addition of the twelve new centers referred to above. -14-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations Interest expense increased in the first six months of 1999 by $10.6 million, or 36.8%, to $39.4 million as compared to $28.8 million in 1998. This increase is primarily the result of interest on debt related to the addition of the twelve new centers referred to above. The gain on sales of real estate assets increased for the six months ended June 30, 1999 by $6.1 million to $8.6 million as compared to $2.5 million in 1998. Gain on sales in the first six months of 1999 was in connection with outparcel sales at the Company's development in Sand Lake Corners in Orlando, Florida and The Landing at Arbor Place in Douglasville, Georgia and anchor pad sales at Chesterfield Crossing in Richmond, Virginia which is now under construction. The gain on sales in the first six months of 1998 were for outparcel sales at the Company's developments in Springhurst Towne Center in Louisville, Kentucky and Sterling Creek Commons in Portsmouth, Virginia. Equity in earnings of unconsolidated affiliates increased in the first six months of 1999 by $0.6 million to $1.7 million from $1.2 million in the first six months of 1998 primarily due to the acquisition of a 50% interest in Parkway Place in Huntsville, Alabama and improved operations at existing equity centers. LIQUIDITY AND CAPITAL RESOURCES The principal uses of the Company's liquidity and capital resources have historically been for property development, expansion and renovation programs, acquisitions and debt repayment. To maintain its qualification as a real estate investment trust under the Internal Revenue Code, the Company is required to distribute to its shareholders at least 95% of its "Real Estate Investment Trust Taxable Income" as defined in the Internal Revenue Code of 1986, as amended (the "Code"). As of August 1, 1999, the Company had $55.0 million available in unfunded construction and redevelopment loans to be used for completion of the construction and redevelopment projects and replenishment of working capital previously used for construction. Additionally, as of August 1, 1999, the Company had obtained revolving credit lines and term loans totaling $230.0 million of which $51.2 million was available. 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 authorizing shares of the Company's preferred stock and common 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 remaining after the Company's preferred stock offering on June 30, 1998. 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. -15-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations The Company's policy is to maintain a conservative debt to total market capitalization ratio in order to enhance its access to the broadest range of capital markets, both public and private. The Company's current capital structure 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 25.7% ownership interest in the Operating Partnership held by the Company's executive and senior officers which may be exchanged for approximately 9.4 million shares of common stock. Additionally, Company executive officers and directors own approximately 1.7 million shares of the outstanding common stock of the Company, for a combined total interest in the Operating Partnership of approximately 30.4%. Ownership interests issued to fund acquisitions in 1998 may be exchanged for approximately 2.4 million shares of common stock which represents a 6.5% interest in the Operating Partnership. Assuming the exchange of all limited partnership interests in the Operating Partnership for common stock, there would be outstanding approximately 36.6 million shares of common stock with a market value of approximately $965.4 million at June 30, 1999 (based on the closing price of $26.375 per share on June 30, 1999). The Company's total market equity is $1.036 billion which includes 2.9 million shares of preferred stock at the closing price of $24.625 per share on June 30, 1999. Company executive and senior officers' ownership interests had a market value of approximately $258.6 million at June 30, 1999. Mortgage debt consists of debt on certain consolidated properties as well as on three properties in which the Company owns a non-controlling interest and is accounted for under the equity method of accounting. At June 30, 1999, the Company's share of funded mortgage debt on its consolidated properties adjusted for minority investors' interests in nine properties was $1.239 billion and its pro rata share of mortgage debt on unconsolidated properties (accounted for under the equity method) was $45.9 million for total debt obligations of $1.285 billion with a weighted average interest rate of 7.02%. The Company's total conventional fixed rate debt as of June 30, 1999 was $785.5 million with a weighted average interest rate of 7.41% as compared to 8.07% as of June 30, 1998. The Company's variable rate debt as of June 30, 1999 was $499.0 million with a weighted average interest rate of 6.39% as compared to 6.73% as of June 30, 1998. Through the execution of swap agreements, the Company has fixed the interest rates on $314 million of debt on operating properties at a weighted average interest rate of 6.55%. Of the Company's remaining variable rate debt of $185.0 million, an interest rate cap in place of $100.0 million leaves only $85.0 million of debt subject to variable rates. Interest on this $85.0 million of variable rate debt is capitalized to projects currently under construction leaving no variable rate debt exposure on operating properties as of June 30, 1999. There were no fees charged to the Company related to its swap agreements. The Company's swap and cap agreements in place at June 30, 1999 are as follows: <TABLE> <CAPTION> Swap /Cap Amount (in millions) Fixed LIBOR Component Effective Date Expiration Date ------------- --------------------- -------------- --------------- <S> <C> <C> <C> $65 5.72% 01/07/98 01/07/2000 81 5.54% 02/04/98 02/04/2000 50 5.70% 06/15/98 06/15/2001 38 5.73% 06/26/98 06/26/2001 80 5.49% 09/01/98 09/01/2001 100 7.50% 01/01/99 01/05/2000 </TABLE> 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 55.4% at June 30, 1999. -16-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations DEVELOPMENT, EXPANSIONS AND ACQUISITIONS Development projects under construction and scheduled to open during 1999 are: Arbor Place Mall in Douglasville, Georgia, a suburb of Atlanta, is scheduled to open in October 1999. This 1,035,000-square-foot regional mall includes Dillard's, Parisian and Sears and big-box retailers such as Border's Books, Bed Bath & Beyond and Old Navy. The Company developed and has sold a Regal Cinema in Jacksonville, Florida, a 83,000-square-foot free-standing building, which will open in November 1999. The Company also has under construction Chesterfield Crossing in Richmond, Virginia, a 441,000-square-foot community center, Coastal Way in Spring Hill, Florida a 233,000-square-foot community center and a 28,000-square-foot expansion of Sutton Plaza in Mt. Olive, New Jersey. The Company currently has under development The Mall of South Carolina in Myrtle Beach, South Carolina, a 1,095,000-square-foot regional mall and Parkway Place in Huntsville, Alabama, a 822,000-square-foot redevelopment that was acquired in December 1998. Both of these mall projects depend on the Company's ability to obtain tax increment financing and other governmental approvals. In March 1999, the Company opened Fiddler's Run in Morganton, North Carolina, a 203,000-square-foot community center. The center opened 100% leased and committed. In July 1999, the Company opened a new Sears department store addition at Lakeshore Mall in Sebring, Florida and in August 1999 the balance of phase I of Sand Lake Corners in Orlando, Florida, a 594,000-square-foot community center. A 38,000-square-foot second phase of Sand Lake Corners will open in February 2000. In August 1999 the Company opened The Landing at Arbor Place in Douglasville, Georgia a 165,000-square-foot associated center adjacent to Arbor Place Mall. The Company has entered into standby purchase agreements with third-party developers (the "Developers") for the construction, development and potential ownership of community centers in Georgia and Texas (the "Co-Development Projects"). The Developers have utilized these standby purchase agreements to assist in obtaining financing to fund the construction of the Co-Development Projects. The standby purchase agreements, which expire in 1999 and 2000, provide for certain requirements or contingencies to occur before the Company becomes obligated to fund its equity contribution or purchase the Co-Development Project. These requirements or contingencies include certain completion requirements, rental levels, the inability of the Developers to obtain adequate permanent financing and the inability to sell the Co-Development Project. In return for its commitment to purchase a Co-Development Project pursuant to a standby purchase agreement, the Company receives a fee as well as a participation interest in either the cash flow or gains from sale on each Co-Development Project. The outstanding amount on standby purchase agreements was $116.4 million at June 30, 1999. Subsequent to the end of the quarter in August 1999 the Company was released from a commitment of $43.1 million. The Company received a fee for this release. The Company has 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 material capital commitments. It is management's expectation that the Company will continue to have access to the capital resources necessary to expand and develop 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 activities 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 in a manner consistent with its intention to operate with a conservative debt to total market capitalization ratio. -17-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations OTHER CAPITAL EXPENDITURES Management prepares an annual capital expenditure budget for each property which is intended to provide for all necessary recurring and non-recurring capital improvements. Management believes that its annual operating reserve for maintenance and recurring capital improvements and reimbursements from tenants will provide the necessary funding for such requirements. The Company intends to distribute approximately 60% - 90% of its funds from operations with the remaining 10% - 40% to be held as a reserve for capital expenditures and continued growth opportunities. The Company believes that this reserve will be sufficient to cover (I) tenant finish costs associated with the renewal or replacement of current tenant leases as their leases expire and (II) capital expenditures which will not be reimbursed by tenants. Major tenant finish costs for currently vacant space are expected to be funded with working capital, operating reserves, or the revolving lines of credit, and a return on the funds so invested is expected to be earned. For the first six months of 1999, revenue generating capital expenditures or tenant allowances for improvements were $5.9 million. These capital expenditures generate increased rents from these tenants over the term of their leases. Revenue neutral capital expenditures, which are recovered from the tenants, were $2.5 million for the first six months of 1999. Revenue enhancing capital expenditures, or remodeling and renovation costs, were $4.6 million for the six months ended June 30, 1999. 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. However, certain environmental conditions are being evaluated at Parkway Place in Huntsville, Alabama. There appears to be a high potential for adverse environmental conditions, specifically Total Petroleum Hydrocarbons, in the vicinity of an auto service center which had underground storage tanks. The Company ordered additional engineering studies and as part of the redevelopment will correct the environmental conditions at the site. 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 the first six months of 1999, increased by $18.0 million, or 52.7%, to $52.1 million from $34.1 million in 1998. This increase was primarily due to the twelve centers opened or acquired over the last eighteen months and improved operations in the existing centers. Cash flows used in investing activities for the first six months of -18-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations 1999 decreased by $102.3 million, to $76.9 million compared to $179.1 million in 1998. This decrease was due primarily to a decrease in acquisitions as compared to the $184.7 million of acquisitions in 1998. Cash flows provided by financing activities for the first six months of 1999 decreased by $121.1 million, to $27.2 million compared to $148.3 million in 1998 primarily due to decreased borrowings related to the development and 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 tenant's 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 of 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. YEAR 2000 The Year 2000 problem results from the use of a two digit year date instead of a four digit date in the programs that operate computers, information processing technology and systems and other devices (i.e. non-information processing systems such as elevators, utility monitoring systems and time clocks that use computer chips). Systems with a Year 2000 problem have programs that were written to assume that the first two digits for any date used in the program would always be "19". Unless corrected, this assumption may result in computer programs misinterpreting the date January 1, 2000 as January 1, 1900. This could cause systems to incorrectly process critical financial and operational information, generate erroneous information or fail altogether. THE COMPANY'S STATE OF READINESS FOR YEAR 2000 - The Company has completed a program to identify both its information and non-information processing applications that are not year 2000 compliant. As a result of this identification program, the Company believes that its core accounting applications and the majority of non-information processing applications are Year 2000 compliant. Certain of its other information and non-information processing applications were not yet Year 2000 compliant. The Company corrected or replaced all non-compliant systems and applications including embedded systems, by the end of 1998. The Company has completed communications with its significant suppliers and tenants to determine the extent to which the Company is vulnerable to the failure of such parties to correct their Year 2000 compliance issues. In addition, the Company has formed a Year 2000 Compliance Team that includes senior personnel from the financial, leasing, accounting, management information systems and operations management divisions of the Company. These individuals are charged with the duty of determining the extent of the Company's ongoing exposure and taking the appropriate action to minimize any impact of the Year 2000 problem on the Company's operations. COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUE - The Company does not expect to incur any significant costs to ensure the Year 2000 compliance of all information processing systems and non-information processing systems including embedded systems. -19-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations RISKS RELATING TO THE YEAR 2000 ISSUE AND CONTINGENCY PLANS - Although the Company is not currently aware of any specific significant Year 2000 problems involving third party vendors or suppliers, the Company believes that its most significant potential risk relating to the Year 2000 issue is in regard to such third parties. For example, the Company believes there could be failure in the information systems of certain service providers that the Company relies upon for electrical, telephone and data transmission and banking services. The Company believes that any service disruption with respect to these providers due to a Year 2000 issue would be of a short-term nature. The Company has existing back-up systems and procedures, developed primarily for natural disasters, that could be utilized on a short-term basis to address any service interruptions. In addition, with respect to tenants, a failure of their information systems could delay the payment of rents or even impair their ability to operate. These tenant problems are likely to be isolated and would likely not impact the operations of any particular shopping center or the Company as a whole. While it is not possible at this time to determine the likely impact of any of these potential problems, the Company will continue to evaluate these areas and develop additional contingency plans, as appropriate. Therefore, although the Company believes that its Year 2000 issues have been addressed and that suitable remediation and/or contingency procedures will be in place by December 31, 1999, there can be no assurance that Year 2000 issues will not have a material adverse effect on the Company's results of operations or financial condition. 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, other non-cash items (including the write-off of development projects not being pursued) 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 Investments Trusts ("NAREIT") recommendation concerning finance costs and non-real estate depreciation. Beginning with the first quarter of 1998 the Company included straight line rent in its FFO calculation. The Company excludes gains or losses on outparcel sales, even though NAREIT permits their inclusion when calculating FFO. Gains or losses on outparcel sales would have added $3.8 million in the second quarter of 1999 as compared to $0.6 million in 1998 and in the six months ended June 30, 1999 would have added $8.6 million compared to $2.5 million in 1998. 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 REIT). FFO does not represent cash flow from operations as defined by GAAP and is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income(loss) for purposes of evaluating the Company's operating performance or to cash flow as a measure of liquidity. -20-
CBL & Associates Properties, Inc. Item 2: Management's Discussion And Analysis Of Financial Condition And Results Of Operations For the three months ended June 30, 1999, FFO increased by $5.7 million, or 26.2%, to $27.6 million as compared to $21.9 million for the same period in 1998. For the six months ended June 30, 1999, FFO increased by $11.0 million, or 25.1%, to $54.9 million as compared to $43.9 million for the same period in 1998. The increases in FFO for both periods was primarily attributable to the new developments opened during 1998 and in the first six months of 1999, the acquisitions during 1998 and improved operations in the existing portfolio. The Company's calculation of FFO is as follows: (in thousands) <TABLE> <CAPTION> Three Months Ended Six Months Ended June 30, June 30, ------------------- -------------------- 1999 1998 1999 1998 ---- ---- ---- ---- <S> <C> <C> <C> <C> Income from operations $15,737 $11,839 $30,770 $24,152 ADD: Depreciation & amortization from consolidated properties 12,890 9,720 25,566 18,875 Income from operations of unconsolidated affiliates 806 431 1,741 1,168 Depreciation & amortization from unconsolidated affiliates 430 354 820 700 Write-off of development costs charged to net income 146 3 888 9 SUBTRACT: Preferred dividend (1,617) -- (3,234) -- Minority investors' share of income from operations in nine properties (297) (99) (662) (308) Minority investors share of depreciation and amortization in nine properties (226) (227) (458) (433) Depreciation and amortization of non-real estate assets and finance costs (265) (149) (517) (278) ---- ---- ---- ---- TOTAL FUNDS FROM OPERATIONS $27,604 $21,872 $54,914 $43,885 ======= ======= ======= ======= </TABLE> -21-
PART II - OTHER INFORMATION ITEM 1: Legal Proceedings None ITEM 2: Changes in Securities None ITEM 3: Defaults Upon Senior Securities None ITEM 4: Submission of Matter to a Vote of Security Holders None ITEM 5: Other Information None ITEM 6: Exhibits and Reports on Form 8-K A. Exhibits 25.2 Promissory Note with Wells Fargo Bank National Associates and Parham Road Limited Partnership (York Galleria) Dated July 1, 1999 25.3 Agreement of Purchase and Sale By and Beween YGL Partners and CBL & Associates Limited Partnership assigned to Parham Road Limited Partnership (York Galleria) Dated February 2, 1999 . 27 Financial Data Schedule B. Reports on Form 8-K The following items were reported: The outline from the Company's July 29, 1999 conference call with analysts and investors regarding earnings (Item 5) was filed on July 29, 1999. -22-
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 thereunto duly authorized. CBL & ASSOCIATES PROPERTIES, INC. /s/ John N. Foy --------------------------- John N. Foy Vice Chairman of the Board, Chief Financial Officer and Treasurer (Authorized Officer of the Registrant, Principal Financial Officer and Principal Accounting Officer) Date: August 13, 1999
EXHIBIT INDEX Exhibit No. ------- 25.2 Promissory Note with Wells Fargo Bank National Associates and Parham Road Limited Partnership (York Galleria) Dated July 1, 1999 25.3 Agreement of Purchase and Sale By and Between YGL Partners and CBL & Associates Limited Partnership assigned to Parham Road Limited Partnership (York Galleria) Dated February 2, 1999 27 Financial Data Schedule