CBL & Associates Properties, Inc.

CBL reported fourth-quarter adjusted FFO of $0.37 per share, down from $0.45 a year ago. Full-year adjusted FFO was $1.36 per share versus $1.73 in 2018. Same-center NOI declined 9.1% in the quarter and 6.5% for the year, while portfolio occupancy was 91.2% and same-center mall occupancy was 89.8% at year-end. Management guided 2020 adjusted FFO to $1.03 to $1.13 per share and expects same-center NOI to decline 8% to 9.5%; the guidance includes an $8 million to $18 million reserve for additional closures or bankruptcies.

Stephen Lebovitz framed the business as being in transition and said CBL is intentionally reshaping malls into “suburban town centers” with non-traditional traffic drivers like entertainment, fitness, medical, hotels, storage, and mixed-use developments. He emphasized that the company has already replaced more than two-thirds of the former anchor space from a year ago and expects 2020 to be another productive year for redevelopment. His tone was confident but realistic, repeatedly noting that results lag the strategic progress.

Farzana Khaleel said the company is focused on maximizing free cash flow, supplementing liquidity through dispositions, extending maturities, and reducing leverage. Pro rata debt ended 2019 at $4.25 billion, down $40 million sequentially and $409 million year over year, with $374 million available on credit lines; she also noted the company retired a $12 million loan on The Terrace and, after quarter-end, paid off $84 million of loans secured by Parkway Place and Valley View Mall. She highlighted the $37.4 million impairment on Park Plaza Mall and said 2020 guidance incorporates known activity, recent closings, and a reserve for unbudgeted revenue decline.

Analysts pressed management on whether replacing apparel with entertainment and other uses can offset lost traffic and whether leasing conditions are improving in 2020. Stephen said the new uses can drive materially more traffic and sales, citing Brookfield Square and Chattanooga as examples, but acknowledged there is a lag between anchor closure and new tenant openings. Questions also focused on capital allocation and debt restructuring; management said it is prioritizing secured maturities, sees room on debt-service coverage, and does not have minimum net worth covenants tied to the stock price.