SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2001
OR
Commission File No. 1-12494
Delaware 62-1545718
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
2030 Hamilton Place Blvd., Suite 500
Chattanooga, Tennessee 37421-6000
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (423) 855-0001
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange
Title of Each Class on which Registered
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Common Stock, $.01 par New York Stock Exchange
value per share
9.0% Series A Cumulative
Redeemable Preferred Stock, par New York Stock Exchange
value $.01 per share,
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Securities registered pursuant to Section 12(g) of the Act: None
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 ______
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the Registrant was approximately $906,954,428 based on the closing price on the New York Stock Exchange for such stock on March 1, 2002.
As of March 1, 2002, there were outstanding 25,692,760 shares of the Registrant's Common Stock and 2,875,000 shares of 9.0% Series A Cumulative Redeemable Preferred Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates certain information by reference to the Registrant's definitive proxy statement in respect to the Annual Meeting of Stockholders to be held on May 7, 2002.
CBL & Associates Properties, Inc - 2001 Form 10K
FORM 10-K
TABLE OF CONTENTS
Item No. Page
PART I
Item 1 Business 3
Item 2 Properties 14
Item 3 Legal Proceedings 36
Item 4 Submission of Matters to a Vote of Security Holders 36
PART II
Item 5 Market for Registrant's Common Equity and Related
Shareholder Matters 36
Item 6 Selected Financial Data 37
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations 38
Item 7A Quantitative and Qualitative Disclosures about Market Risk 50
Item 8 Financial Statements and Supplementary Data 50
Item 9 Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 50
PART III
Item 10 Directors and Executive Officers of the Registrant 50
Item 11 Executive Compensation 50
Item 12 Security Ownership of Certain Beneficial Owners
and Management 50
Item 13 Certain Relationships and Related Transactions 50
PART IV
Item 14 Exhibits, Financial Statement Schedules and
Reports on Form 8-K 50
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CBL & Associates Poperties, Inc. - Form 10K
Cautionary Statement Relevant to Forward-Looking Information for the Purpose of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995
This Annual Report on Form 10-K contains forward-looking statements, such as information relating to the Company's growth strategy, projects targeted for development or under construction, liquidity and capital resources and compliance with environmental laws and regulations. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially, including, but not limited to, those set forth below. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
PART I
ITEM 1. BUSINESS.
Formation of the Company
CBL & Associates Properties, Inc. (the "Company") is a self-managed, self-administered, fully-integrated real estate company which is engaged in the ownership, operation, marketing, management, leasing, expansion, development, redevelopment, acquisition and financing of regional malls and community and neighborhood centers. The Company was incorporated on July 13, 1993 under the laws of the State of Delaware to acquire an interest in substantially all of the real estate properties owned by CBL & Associates, Inc. and its affiliates ("CBL") and to provide a public vehicle for the expansion of CBL's shopping center business.
The Company conducts substantially all of its business through CBL & Associates Limited Partnership, a Delaware limited partnership (the "Operating Partnership"), in which the Company owns an indirect 51.1% interest and of which the Company's wholly-owned subsidiary is the sole general partner. To comply with certain technical requirements of the Internal Revenue Code of 1986, as amended (the "Code") applicable to real estate investment trusts' ("REIT's"), the Company's property management and development activities, sales of peripheral land and maintenance and security operations are carried out through CBL & Associates Management, Inc. (the "Management Company").
On November 3, 1993, the Company completed the initial public offering (the "Offering") of 15,400,000 shares of its common stock, par value $.01 per share (the "Common Stock"). Simultaneously with the completion of the Offering, CBL transferred to the Operating Partnership substantially all of CBL's interests in its real estate properties and its management and development operations in exchange for an interest in the Operating Partnership. CBL also acquired an additional interest in the Operating Partnership for a cash payment. Each of the partnership interests in the Operating Partnership may, at the election of its respective holder, be exchanged for shares of Common Stock of the Company, subject to certain limitations imposed by the Code.
The Offering and the application of proceeds therefrom, including the Operating Partnership's acquisition of certain property interests, and the contribution by CBL of property interests to the Operating Partnership, are referred to herein as the "Formation."
In September 1995, the Company completed a follow-on offering of 4,163,500 shares of its Common Stock at $20.625 per share. CBL purchased 150,000 of these shares.
In January 1997, the Company completed a follow-on offering of 3,000,000 shares of its Common Stock at $26.125 per share. CBL purchased 55,000 of these shares.
In June 1998, the Company completed a public offering of 2,875,000 shares of 9.0% Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock") at a price to the public of $25.00 per share. The net proceeds of $70 million were used to repay variable rate indebtedness incurred in the Company's development and acquisition programs.
CBL & Associates Poperties, Inc. - Form 10K
On January 31, 2001, the Company issued 12,056,692 special common units of the Operating Partnership with a fair value of $27.25 per unit for the first stage of the acquisition of The Richard E. Jacobs Group, Inc.'s ("Jacobs") interests in 21 malls and two associated centers.
On January 31, 2001, the Company issued 603,344 special common units of the Operating Partnership with a fair value of $27.25 per unit to purchase the 50% interest in Madison Square Mall in Huntsville, Alabama that it did not already own. In June 2001 the Company issued 31,008 common units of the Operating Partnership with a value of $949,000 to purchase the 25% interest in Madison Plaza in Huntsville, Alabama that it did not already own.
After giving effect to the above transactions, at December 31, 2001 CBL holds a 17.7% limited partner interest in the Operating Partnership, the Company indirectly holds a 51.1% general and limited partner interest in the Operating Partnership, Jacobs holds a 22.8% limited partner interest and third parties hold a 8.3% limited partner interest. In addition, CBL holds approximately 2.0 million of the outstanding shares of Common Stock for a total ownership share in the Company of 21.8%.
General
The Company owns interests in a portfolio of properties, which as of December 31, 2001 consisted of 52 enclosed regional malls (the "Malls"), 18 associated centers (the "Associated Centers"), each of which is part of a regional shopping mall complex, and 68 independent community and neighborhood shopping centers (the "Community Centers"). Of these properties nineteen Malls, thirteen Associated Centers and sixty-four Community Centers were developed by CBL or the Company.
As of December 31, 2001 the Company owned one regional Mall, and one mall expansion under construction (the "Construction Properties"). The Company also owned as of December 31, 2001 options to acquire certain shopping center development sites (the "Development Properties").
The Company also owned, as of December 31, 2001, mortgages (the "Mortgages") on eight community and neighborhood shopping centers owned by non-CBL affiliates. The Mortgages were granted in connection with sales by CBL of certain properties previously developed by CBL. The Company also owns interests in two office buildings in Chattanooga, Tennessee ("Office Buildings"). The Company relocated its headquarters at year end to a new Office Building owned by the Company and opened in December, 2001. The Malls, Associated Centers, Community Centers, Construction Properties, Development Properties, Mortgages and Office Buildings are collectively referred to herein as the "Properties" and individually as a "Property".
The Company and the Operating Partnership generally own a 100% interest in the Properties. With three exceptions, where the Company and the Operating Partnership own less than a 100% interest in a Property, the Operating Partnership is the sole general partner, managing general partner or managing member of the partnership or limited liability company which owns such Property (each a "Property Partnership"). For two Malls and one Associated Center, affiliates of the Operating Partnership are non-managing general partners in the three Property Partnerships owning those Properties.
For a full description of the Properties, see Item 2 -- "Properties."
For information about the Company's reportable segments, see Note 17 to the Consolidated Financial Statements.
The Company's executive offices are currently located at CBL Center, Suite 500, 2030 Hamilton Place Blvd., Chattanooga, Tennessee 37421-6000. The telephone number at this address is (423) 855-0001.
Management and Operation of Properties
Management Company
The Company is self-managed and self-administered. To comply with certain technical requirements of the Code, the Company's property management and development activities and sales of peripheral land are carried out through the Management Company.
CBL & Associates Poperties, Inc. - Form 10K
The Operating Partnership holds 100% of the preferred stock and 5% of the common stock of the Management Company. The remaining 95% of the common stock is held by Charles Lebovitz, his family and his associates. Substantially all of CBL's asset management, property management and leasing and development operations, including CBL's executive, property, financial, legal and administrative personnel, were transferred to the Management Company as part of the Formation. The Management Company manages all of the Properties (except for Governor's Square and Governor's Plaza in Clarksville, Tennessee and Kentucky Oaks Mall in Paducah, Kentucky -- see below) under a management agreement that may be terminated at any time by the Operating Partnership upon 30 days written notice. In addition, the Management Company manages certain properties owned by CBL that were not transferred to the Company in the Formation as well as certain shopping centers owned by non-CBL affiliates. Through its ownership of the Management Company's preferred stock, the Operating Partnership enjoys substantially all of the economic benefits of the Management Company's business. The Management Company's Amended and Restated Certificate of Incorporation requires that a majority of the Management Company's board of directors be independent of CBL. Since November 1993, the board of directors of the Management Company has consisted of the same individuals as the Company's board of directors, including four independent directors until January 31, 2001 when two directors were added one of which is an independent director.
On-Site Management
The on-site property management functions at the Malls include leasing, management, data processing, rent collection, project bookkeeping, budgeting, marketing, and promotions. Each Mall, for itself and its Associated Centers, has an on-site property manager who oversees the on-site staff and an on-site marketing director who oversees the marketing program for that Mall. The on-site Mall managers are experienced managers with training in mall management. Each Mall manager and marketing director reports to the home office through six regional Mall managers and six regional marketing directors. These regional managers' offices are located in the Mall properties. District managers, most of whom are located at the Company's headquarters, oversee the leasing and operations at a majority of the Community Centers.
Virtually all operating activities of the Company are supported by a computer software system which is designed to provide management with operating data necessary to make informed business decisions on a timely basis. The Company has a program of on-going upgrades to hardware and software that support the accounting and management information systems. The Company also maintains a web site to publish integrated information on the world wide web about the Company and its properties. These systems were developed to more efficiently assist management in efforts to market the Properties, maintain management quality, enhance investor relations and communications and enhance tenant relations while minimizing operating expenses. Retail sales analysis, leasing information, budget controls, accounts receivable/payable, operating expense variance reports and income analysis are continually available to management. via the accounting and management information systems. Through these systems management also has available information that facilitates the development and monitoring of budgets and other relevant information.
Management pursues periodic preventative property maintenance programs, which encompass paving, roofing, HVAC and general improvements to the Properties' common areas. The on-site property managers oversee all such work in accordance with approved budgets with the coordination of, and reporting to, both regional and home office management.
Governor's Square and Kentucky Oaks
Governor's Square and Governor's Plaza in Clarksville, Tennessee and Kentucky Oaks in Paducah, Kentucky are the only Properties in the Company's portfolio in which the Company is not the sole general partner or managing general partner or managing member. Governor's Square is owned by a Property Partnership, the managing general partner of which is a non-CBL affiliate and which owns a 47.5% interest in the Mall. The Company is a non-managing general partner of Governor's Plaza. The Company owns a 48% interest in Kentucky Oaks Mall and has an option to acquire an additional 2% interest. The Mall which is managed by a non-CBL affiliate which owns a 50% interest. Although the managing general partner of each of these partnerships controls the timing of distributions of cash flow, the Company's approval is required for certain major decisions, including permanent financing, refinancing and sale of all or substantially all of the partnership's assets. Property management services, including accounting, auditing, maintenance, promotional programs, leasing, collection and insurance, are performed by a property manager affiliated with the non-CBL managing general partner for which such property manager receives a fee.
Employees
The Company, through the Management Company, currently employs approximately 617 full time and 461 part time persons. None of these employees is currently represented by any union. The Company does not have any employees other than its statutory officers.
Environmental Matters
Under various federal, state and local laws, ordinances and regulations, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of petroleum and certain hazardous or toxic substances on, under or in such real estate. Such laws typically impose such liability
CBL & Associates Poperties, Inc. - Form 10K
without regard to whether the owner or operator knew of, or was responsible for, the presence of such substances. The costs of remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner's or operator's ability to sell such real estate or to borrow using such real estate as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the costs of removal or remediation of such substances at the disposal or treatment facility, regardless of whether such facility is owned or operated by such person. Certain laws also impose requirements on conditions and activities that may affect the environment or the impact of the environment on human health. Failure to comply with such requirements could result in the imposition of monetary penalties (in addition to the costs to achieve compliance) and potential liabilities to third parties. Among other things, certain laws require abatement or removal of friable and certain non-friable asbestos-containing materials ("ACMs") in the event of demolition or certain renovations or remodeling. Certain laws regarding ACMs require building owners and lessees, among other things, to notify and train certain employees working in areas known or presumed to contain ACMs. Certain laws also impose liability for release of ACMs into the air and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with ACMs. In connection with its ownership and operation of the Properties, the Company, the Operating Partnership or the relevant Property Partnership, as the case may be, may be potentially liable for such costs or claims.
All of the Properties (excluding properties upon which the Company holds an option to purchase but does not yet own) have been subject to Phase I environmental assessments or updates of existing Phase I environmental assessments by independent environmental consultants. Such assessments generally consisted of a visual inspection of the Properties, review of federal and state environmental databases and certain information regarding historic uses of the Property and adjacent areas and the preparation and issuance of written reports. Some of the Properties contain, or contained, underground storage tanks ("UST"s) used for storing petroleum products or wastes typically associated with automobile service or other operations conducted at the Properties. Certain Properties contain, or contained, dry-cleaning establishments utilizing solvents. Where believed to be warranted, samples of building materials or subsurface investigations were, or will, be undertaken. At certain Properties, where warranted by the conditions, the Company has developed and implemented an operations and maintenance program that establishes operating procedures with respect to ACMs. The costs associated with the development and implementation for such programs were not material.
Although there can be no assurances that such environmental liability does not exist, none of the environmental assessments have identified and the Company is not aware of any environmental liability with respect to the properties in which the Company or the Operating Partnership has, or had, an interest (whether as an owner or operator) that the Company believes would have a material adverse effect on the Company's financial condition, results of operations or cash flows. Nevertheless, it is possible that the environmental assessments available to the Company do not reveal all potential environmental liabilities, that subsequent investigations will identify material contamination, that adverse environmental conditions have arisen subsequent to the performance of the environmental assessments, or that there are material environmental liabilities of which management is unaware. Moreover, no assurances can be given that (i) future laws, ordinances or regulations will not impose any material environmental liability or (ii) the current environmental condition of the Properties has not been or will not be affected by tenants and occupants of the Properties, by the condition of properties in the vicinity of the Properties or by third parties unrelated to the Company, the Operating Partnership or the relevant Property Partnership. The existence of any such environmental liability could have an adverse effect on the Company's results of operations, cash flow and the funds available to the Company to pay dividends.
The Company has not recorded in its financial statements any material liability in connection with environmental matters.
General Risks of the Company's Business
General Factors Affecting Investments in Shopping Center Properties and Effect of Economic and Real Estate Conditions
A shopping center's revenues and value may be adversely affected by a number of factors, including: the national and regional economic climates; local real estate conditions (such as an oversupply of retail space); perceptions by retailers or shoppers of the safety, convenience and attractiveness of the shopping center; and the willingness and ability of the shopping center's owner to provide capable management and maintenance services. In addition, other factors may adversely affect a shopping center's value without affecting its current revenues, including: changes in governmental regulations, zoning or tax laws; potential environmental or other legal liabilities; availability of
CBL & Associates Poperties, Inc. - Form 10K
financing; and changes in interest rate levels. There are numerous shopping facilities that compete with the Properties in attracting retailers to lease space. In addition, retailers at the Properties face continued competition from discount shopping centers, outlet malls, wholesale clubs, direct mail, telemarketing, television shopping networks and shopping via the Internet. Competition could adversely affect the Operating Partnership's revenues and funds available for distribution to partners, which in turn will affect the Company's revenues and funds available for distribution to stockholders.
Geographic Concentration
The Properties are located principally in the southeastern United States (Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee and Virginia). Thirty Malls, fifteen Associated Centers, fifty Community Centers and the two Office Buildings are located in this region. The Company's results of operations and funds available for distribution to stockholders therefore will be subject generally to economic conditions in the southeastern United States. The Properties located in the southeastern United States accounted for 58.9% of the Company's total assets, and provided 59.5% of the Company's total revenues from all properties for the year ended December 31, 2001.
Third Party Interests In Certain Properties
The Operating Partnership owns partial interests in ten Malls, four Associated Centers, one Community Center, two Office Buildings, one Mall under development and one Mall under construction. The Operating Partnership or an affiliate of the Company is the managing general partner of the Property Partnerships that own such Properties, except for the Governor's Square Mall, Governor's Plaza and Kentucky Oaks Mall.
Where the Operating Partnership serves as managing general partner of Property Partnerships, it may have certain fiduciary responsibilities to the other partners in those partnerships. In certain cases, the approval or consent of the other partners is required before the Operating Partnership may sell, finance, expand or make other significant changes in the operations of such Properties. To the extent such approvals or consents are required, the Operating Partnership may experience difficulty in, or may be prevented from implementing its plans with respect to expansion, development, financing or other similar transactions with respect to such Properties.
With respect to Governor's Square, Governor's Plaza and Kentucky Oaks Mall, the Operating Partnership does not have day-to-day operational control or control over certain major decisions, including the timing and amount of distributions, which could result in decisions by the managing general partner that do not fully reflect the interests of the Company, including decisions relating to the standards that the Company is required to satisfy in order to maintain its status as a real estate investment trust for tax purposes. However, decisions relating to sales, expansions, dispositions of all or substantially all of the assets, and financings are subject to approval by the Operating Partnership.
Dependence on Significant Properties
Eleven months of revenue at Hanes Mall in Winston-Salem, North Carolina and the full years revenue at Coolsprings Galleria in Nashville, Tennessee and Hamilton Place Mall in Chattanooga, Tennessee accounted for approximately 3.9%, 3.6% and 3.6%, respectively, of total revenues of the Company for the period ended December 31, 2001. The Company's financial position and results of operations will therefore be somewhat affected by the results experienced at these Properties.
Dependence on Significant Markets
In certain markets the Company may have more than one Mall. The top six markets with one or more of the Company's Malls and various Associated Centers and Community Centers are: three Malls, three Associated Centers and one Community Center in Nashville Tennessee, one Mall, four Associated Centers, three Community Centers and two Office Buildings in Chattanooga, Tennessee, one Mall in Winston-Salem, North Carolina, two Malls in Charleston, South Carolina and one Mall in Minneapolis (Burnsville), Minnesota. The Company's share of revenues derived from these markets represent 10.1%, 4.6%, 3.9%, 3.5% and 3.4% of the Company's revenues for the year ended December 31, 2001, respectively. Total revenue for eleven months of operations at two Malls in Madison, Wisconsin represent 3.5% of total revenues for all of the Company's properties for the year ended December 31, 2001. The Company's share of revenues from the two Malls in Madison, Wisconsin, however represent only 2.0% of the Company's total revenue for the Year ended December 31, 2001.. The Company's financial position and results of operations will therefore be affected by the results experienced at these Properties in these six markets.
CBL & Associates Poperties, Inc. - Form 10K
Dependence on Key Tenants
As of December 31, 2001, The Limited Inc. Stores (including Intimate Brands, Inc.) maintained 189 stores in the Company's properties and in the year ended December 31, 2001 accounted for approximately 6.4% of total revenues of the Company. As of December 31, 2001, the Gap. Inc.. (The Gap, Old Navy, Banana Republic and Gap Kids ) had 67 stores and in the year ended December 31, 2001, accounted for 2.7% of the total revenues of the Company. As of December 31, 2001, the Footlocker, Inc. (Footlocker, Ladies Footlocker, Kids Footlocker and Champs Sports) had 117 stores and in the year ended December 31, 2001, accounted for 2.6% of the total revenues of the Company. The loss or bankruptcy of these or any other key tenants could negatively affect the Company's financial position and results of operations.
The Company's Strategy for Growth
Management believes that per share growth in the Company's Funds from Operations, as defined below, is one of the key factors in enhancing shareholder value. Management also believes that Funds from Operations is a widely used measure of the operating performance of REITs, and its consistent determination provides a relevant basis for comparison among REITs. It is the objective of the Company's management to achieve growth in Funds from Operations through the aggressive management of the Company's existing Properties, the expansion and renovation of existing Properties, the development of new properties, and select acquisitions. Funds from Operations can also be affected by external factors, such as inflation, fluctuations in interest rates or changes in general economic conditions, which are beyond the control of the Company's management.
"Funds from Operations" is defined by the Company as net income (loss) before property depreciation, other non-cash items, gains or losses on sales of real estate assets and gains or losses on investments in marketable securities. Effective January 1, 2000, the National Association of Real Estate Investment Trusts ("NAREIT") clarified FFO to include all operating results - recurring and non-recurring - except those results defined as "extraordinary items" under accounting principles generally accepted in the United States. Funds from Operations does not represent cash flow from operations as defined by accounting principals generally accepted in the United States ("GAAP") and is not necessarily indicative of cash available from operations 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 as an alternative to cash flows as a measure of liquidity.
The Company classifies its regional malls into three categories - stabilized malls ("Stabilized Malls") which have completed their initial lease-up, new malls ("New Malls") which are in their initial lease-up phase or are being redeveloped and newly acquired malls ("Newly Acquired Malls") representing the 21 mall portfolio acquired on January 31, 2001. At year end the New Mall category was comprised of Springdale Mall in Mobile, Alabama which was acquired in September 1997 and which is currently being redeveloped and retenanted; Parkway Place Mall in Huntsville, Alabama which was acquired in December, 1998 and which is being redeveloped, Arbor Place in Atlanta (Douglasville), Georgia, which opened in October 1999 and The Lakes Mall in Muskegon, Michigan which opened in August 2001.
Specifically, the Company has implemented its objective of growing its Funds from Operations and will continue to do so by:
- Acquiring existing retail properties where cash flow can be enhanced by improved management, leasing, redevelopment and expansion.
Management believes that an opportunity for growth exists through the acquisition of shopping centers that meet the Company's investment criteria and targeted returns. In general, the Company seeks to acquire well-located shopping centers in middle-market geographic areas consistent with management's experience where management believes significant value can be created through its development, leasing and management expertise.
On January 31, 2001, the Company acquired from The Richard E. Jacobs Group interests in twenty-one Malls and two Associated Centers, including the acquisition of minority interests in certain properties, the Newly Acquired Malls defined above. The total gross leasable area of the twenty-three properties is 19.2 million square feet, or an average gross leasable area of 914,000 square feet per Mall. The gross leasable area of mall stores is approximately 5.9 million square feet. The Malls are located in middle markets predominantly in the Southeast and the Midwest. Certain information on the Properties that wereacquired is as follows on the next page (as of the acquisition date of January 31, 2001):
CBL & Associates Poperties, Inc. - Form 10K
Total Sales
Year of Gross per Occupany
Name of Year of Most Recent Proposed Leasable Mall Square Percen-
Center/Location Opening Expansion Ownership Area Stores Foot(1) tage(2) Anchors
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Brookfield Square 1967 1997 100.0% 1,041,000 317,000 $438 97% Boston Store, Sears,
Brookfield, WI JCPenney
Cary Towne Center 1979 1993 80.0% 953,000 296,000 380 97% Dillard's, Hecht's,
Sears
Cary, NC Hudson-Belk, JCPenney
Cherryvale Mall 1973 1989 100.0% 714,000 305,000 315 86% Bergner's, Marshall
Rockford, IL Field's, Sears
Citadel Mall 1981 2000 100.0% 1,068,000 299,000 259 85% Parisian, Dillard's,
Charleston, SC Belk, JCPenney, Sears
Columbia Mall 1977 1997 48.0% 1,113,000 299,000 257 90% Dillard's, JCPenney,
Columbia, CS Rich's, Sears
Eastgate Mall (2) 1980 1995 100.0% 1,099,000 270,000 269 88% JCPenney, Kohl's,
Cincinnati, OH Dillard's, Sears
East Towne Mall 1971 1997 48.0% 895,000 301,000 301 96% Boston Store,
Younkers,
Madison, WI Sears, JCPenney
Fashion Square 1972 1993 100.0% 786,000 289,000 301 93% Hudson's, JCPenney,
Saginaw, MI Sears
Fayette Mall 1971 1993 100.0% 1,096,000 309,000 495 99% Lazarus, Dillard's,
Lexington, KY JCPenney, Sears
Hanes Mall 1975 1990 100.0% 1,556,000 555,000 329 93% Dillard's, Belk,
Hecht's,
Winston-Salem, NC Sears, JCPenney
Jefferson Mall 1978 1999 100.0% 936,000 276,000 287 96% Lazarus, Dillard's,
Louisville, KY Sears, JCPenney
Kentucky Oaks Mall 1982 1995 48.0% 878,000 278,000 256 84% Dillard's, Elder-
Paducah, KY Beerman, JCPenney,
Midland Mall 1991 - 100.0% 514,000 197,000 245 85% Elder-Beerman,
Midland, MI JCPenney, Sears,
Target
Northwoods Mall 1972 1995 100.0% 833,000 314,000 317 88% Dillard's, Belk,
Charleston, SC JCPenney, Sears
Old Hickory Mall 1967 1994 100.0% 556,000 161,000 304 99% Belk, Goldsmith's,
Jackson, TN Sears, JCPenney
Parkdale Mall 1986 1993 100.0% 1,411,000 475,000 271 82% Dillard's, JCPenney,
Beaumont, TX Montgomery Ward
Randolph Mall 1982 1989 100.0% 376,000 147,000 195 91% Belk, JCPenney,
Asheboro, NC Roses, Sears
Regency Mall 1981 1999 100.0% 918,000 268,000 257 91% Boston Store,
Younkers,
Racine, WI JCPenney, Sears
Towne Mall 1977 - 100.0% 521,000 154,000 269 70% Elder-Beerman,
Franklin, OH Dillard's, Sears
Wausau Center 1983 1999 100.0% 429,000 156,000 258 95% Younkers, JCPenney,
Wausau, WI Sears
West Towne Mall (2) 1970 1990 48.0% 1,468,000 263,000 376 98% Boston Store, Sears,
Madison, WI JCPenney
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Total 19,161,000 5,929,000 $313(3)
========== ========= ====
(1) For the year ended December 31, 2001
(2) Includes Associated Center
(3) Weighted Average
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In February 2001, the Company exercised its option in a co-development project Willowbrook Plaza in Houston, Texas.
On January 31, 2001, the Company issued 603,344 special common units of the Operating Partnership to purchase a 50% interest in Madison Square Mall in Huntsville, Alabama. In June 2001 the Company issued 31,008 common units of the Operating Partnership to purchase a 25% interest in Madison Plaza in Huntsville, Alabama.
CBL & Associates Poperties, Inc. - Form 10K
- Maximizing the cash flow from its existing portfolio of Malls, Associated Centers and Community Centers, and other retail complexes through aggressive leasing, management, and marketing, including:
- an active leasing strategy which seeks to increase occupancy. At December 31, 2001, the occupancy in the Companies Properties compared with occupancy at December 31, 2000 was as follows (excluding Parkway Place which was under redevelopment):
Total Combined Occupancy: 93.8% 95.7%
Core Portfolio:
Total portfolio occupancy 95.0% 95.7%
Stabilized Malls 94.1% 94.5%
New Malls* 89.1% 90.4%
Total Malls * 93.6% 94.1%
Associated Centers 95.6% 94.9%
Community Centers 97.0% 97.8%
Newly-Acquired Malls 90.4% N/A
Newly-Acquired Associated Centers 99.5% - -
* Excludes Parkway Place
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- expanded merchandising, marketing and promotional activities, with the goal of enhancing tenant sales and thereby increasing percentage rents. Mall store sales per square foot decreased for the year ended December 31, 2001 compared with 2000.
Sales per square foot
Percentage
2001 2000 Decrease
------- ------- ----------
Stabilized Malls $284.65 $289.00 (1.5)%
Newwely Acquired Malls 313.15 318.16 (1.6)%
Combined Stabilized Malls 297.70 302.3 (1.5)%
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- increased base rents as tenant leases expire, renegotiation of leases and negotiation of terminations of leases of under performing retailers. At December 31, 2001, the Average base rents in the Combined portfolio increased in certain property types compared with average base rents at December 31, 2001 as follows:
At December 31, Percentage
--------------- Increase
2001 2000 (Decrease)
------- ------- ----------
Stabilized and New Malls $22.49 $21.78 3.3%
Newly Acquired Malls 23.49 -- --
All Malls* 22.91 21.57 6.2%
Associated Centers 9.73 9.88 (1.5)%
Community Centers 9.43 8.85 6.6%
* Excludes Parkway Place
|
- control of operating costs. Occupancy costs as a percentage of sales at the combined Stabilized Malls and Newly Acquired Malls decreased to 11.3% for the year ended December 31, 2001 as compared to 11.9% for the year ended December 31, 2000.
- Expanding and renovating existing properties to maintain their competitive position.
Most of the Malls were designed to allow for expansion and growth through the addition of new department stores or other large retail stores as anchors ("Anchors"). Forty-eight existing Anchors at twenty-three Malls have expansion potential at their existing stores and five anchors at three malls have expansion potential subject to certain conditions. During 2001, the Company completed the renovation and first phase expansion of Meridian Mall in Lansing Michigan, completed a food court addition at Georgia Square Mall in Athens Georgia and completed an expansion of Springdale Mall in Mobile, Alabama. During 2001, the Company also renovated Burnsville Center in Minneapolis (Burnsville), Minnesota and two Newly Acquired Malls Cary Towne Center in Cary, North Carolina and Fashion Square in Saginaw, Michigan. In 2002 the Company plans on renovating the following Newly Acquired Malls: Columbia Mall in Columbia,
CBL & Associates Poperties, Inc. - Form 10K
South Carolina, Parkdale Mall in Beaumont, Texas, Hanes Mall in Winston-Salem, North Carolina and Kentucky Oaks Mall in Paducah, Kentucky. In 2002 the Company also plans on renovating the following Stabilized Malls: Hickory Hollow Mall in Nashville, Tennessee, St Clair Square in Fairview Heights, Illinois and Stroud Mall in Stroudsburg, Pennsylvania.
In the Community Center portfolio, the Company renovated one Community Center, and expanded two Community Centers in 2001. In 2002 the Company plans to redevelop a vacant theater location in one Associated Center and add an Associated Center at one of the Newly Acquired Malls.
- Developing new retail properties with profitable returns on capital, leading to growth in the future.
In 2001, the Company opened one Mall, two Mall expansions, one Associated Center expansion, one Community Center, four Community Center expansions and one Office Building. Summary information concerning these properties is set forth below.
Summary Information Concerning Properties Opened During the Year Ended December 31, 2001
Anchor Non-
Name of Prooperty/ Total GLA Anchor Percentage Opening
Location GLA (1) (2) GLA Leased(3) Date Anchors
----------------------------- ------------ ------------ ------------ ------------- ------------ -------------------
MALLS:
The Lakes Mall 553,000 338,000 215,000 83.5% Aug-2001 Sears (4), Yonkers (4)
Muskegon, MI JCPenney (4),
MALL EXPANSIONS:
Meridian Mall 93,000 93,000 0 100% Mar-2001 Border's Books,
Lansing (Okemos), MI Bed Bath & Beyond
Springdale Mall 47,000 47,000 0 89% Sept-2001 Best Buy
Mobile, AL
ASSOCIATED CENTERS
EXPANSIONS:
Gunbarrel Pointe 87,000 87,000 0 100% Mar-2001 Kohl's
Chattanooga, TN
COMMUNITY CENTER:
Creekwood Crossing(5) 404,000 347,000 57,000 100% Apr-2001 Lowe's, Bealls,
Bradenton, FL Kmart
COMMUNITY CENTER
EXPANSIONS:
Coastal Way 25,715 20,515 5,200 100% Nov-2001 Office Max
Springhill, FL
Massard Crossing 10,000 0 10,000 96% Mar-2001 Shops
Ft. Smith, AR
Chesterfield Crossing 15,000 10,000 5,000 100% Dec-2001 Shops
Richmond, VA
Sutton Plaza (5) 5,100 0 5,100 100% Jun-2001 Blockbuster, Subway
Mt. Olive, NJ
Office Building
CBL Center 128,000 72,000 56,000 90% Dec-2001 CBL & Associates
Chattanooga, TN Management, EMJ
--------- --------- ------- Corporation
Total Properties Opened 1,367,815 1,014,515 353,300
========= ========= =======
(1) Gross Leasable Area ("GLA") includes total square footage of
Anchors (whether owned or leased by the Anchor) and Mall
stores or shops.
(2) Includes total square footage of Anchors (whether owned or
leased by the Anchor)
(3) Percentage leased and committed for Malls does not include
Anchor GLA. For the Community Centers, Associated Centers and
power centers, percentage leased and committed includes
non-Anchor GLA and leased Anchor GLA.
11
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CBL & Associates Poperties, Inc. - Form 10K
(4) Owned by Anchor.
(5) Sold Center.
|
The Company had one Mall and one Mall expansion under construction at December 31, 2001. These properties will add approximately 700,000 square feet to the Company's portfolio at opening and both all scheduled to open during 2002.
Summary Information Concerning Construction Properties As of December 31, 2001
Ownership
by Company Percenage
Anchor Non- and Pre-Leased
Name of Center/ Total GLA Anchor Operating and Projected
Location GLA (1) (2) GLA Partnership Committed(3) Opening Anchors
------------------------- ----------- ----------- ----------- ------------- -------------- --------------- ---------------
Malls
-----
Parkway Place 631,000 350,000 281,000 50% 59.2% Oct-2002 Dillard's(4),
Huntsville, AL Parisian(4)
Expansions
----------
Meridian Mall 93,000 93,000 -- 100% 100% Fall-2002 Gaylan's
Lansing (Okemos), MI ----------- ----------- ----------
Total Construction
Properties 811,000 509,000 281,000
=========== =========== ==========
( 1)Includes total square footage of Anchors (whether owned or leased by the Anchor).
( 2)Includes total square footage of Anchors (whether owned or leased by the Anchor).
( 3)Percentage pre-leased and committed for Malls does not include Anchor
GLA.
( 4)Owned by Anchor.
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In addition to the Construction Properties as of February 28, 2002, the Company was pursuing the development of a number of sites which the Company believes are viable for future development as Malls, Associated Centers and Community Centers Regional Mall development sites were being pursued in Georgia, Mississippi and South Carolina, an Associated Center site was being pursued in Texas and Community Center sites were being pursued in Florida, Connecticut, Massachusetts, Pennsylvania and Tennessee.
In general, the Company seeks out development opportunities in middle-market trade areas that it believes are under-serviced by existing retail facilities, have demonstrated improving demographic trends or otherwise afford an opportunity for effective market penetration and competitive presence.
Risks Associated with the Company's Growth Strategy
In connection with the implementation of this growth strategy, the Company and the Operating Partnership will incur various risks including the risk that development or expansion opportunities explored by the Company and the Operating Partnership may be abandoned; the risk that construction costs of a project may exceed original estimates possibly making the project not profitable; the risk that the Company and the Operating Partnership may not be able to refinance construction loans which are generally with full recourse to the Company and the Operating Partnership; the risk that occupancy rates and rents at a completed project will not meet projections and will therefore be insufficient to make the project profitable; and the need for anchor, mortgage lender and property partner approvals for certain expansion activities. In the event of an unsuccessful development project, the Company's and the Operating Partnership's loss could exceed its investment in the project.
The Company has in the past elected not to proceed with certain development projects and anticipates that it will do so again from time to time in the future. If the Company elects not to proceed with a development opportunity, the development costs associated therewith ordinarily will be charged against income and Funds From Operations for the then-current period. Any such charge could have a material adverse effect on the Company's results of operations for the period in which the charge is taken.
CBL & Associates Poperties, Inc. - Form 10K Competition
There are numerous shopping facilities that compete with the Properties in attracting retailers to lease space. The Malls are generally located in middle-markets. Management believes that the Malls have strong competitive positions because they generally are the only or largest enclosed malls within their respective trade areas. In addition, retailers at the Properties face continued competition from discount shopping centers, outlet malls, wholesale clubs, direct mail, telemarketing, television shopping networks and shopping via the Internet. Competition could adversely affect the Operating Partnership's revenues and funds available for distributions to partners, which in turn will affect the Company's revenues and funds available for distribution to stockholders.
Seasonality
The Company's 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 entire year.
Qualification as a Real Estate Investment Trust
The Company has elected to be taxed as real estate investment trust under the Code, commencing with its taxable year ended December 31, 1993, and will seek to maintain such status. As a qualified real estate investment trust, the Company generally will not be subject to Federal income tax to the extent it distributes at least 90% of its current year real estate investment trust taxable income to its shareholders. If the Company fails to qualify as a real estate investment trust in any taxable year, the Company will be subject to Federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates.
Insurance
The Operating Partnership carries comprehensive liability, fire, extended coverage (including coverage for acts of terrorism) and rental loss insurance covering all the Properties, with policy specifications and insured limits customarily carried for similar properties. Management believes that the Properties are adequately insured in accordance with industry standards.
ITEM 2. PROPERTIES.
Malls
Each of the Malls is an enclosed regional shopping complex. Each Mall generally has at least three Anchors which own or lease their stores and numerous non-anchor stores with GLA less than 30,000 square feet ("Mall Stores"), most of which are national or regional retailers, located along enclosed malls connecting the Anchors. At most of the Malls, additional freestanding restaurants and retail stores are located on the periphery of the Mall complex. For the purposes of calculating sales per square foot, non-Anchor stores over 10,000 square feet are excluded but are classified as mall stores for all other purposes. The freestanding stores are, in most cases, owned by their occupants. Fifteen of the Mall complexes include one or more Associated Centers.
The total GLA of the 52 Malls is approximately 41.5 million square feet or an average GLA of approximately 778,000 square feet per Mall. Mall Store GLA is 14.7 million square feet including leased free-standing buildings at December 31, 2001. The Company wholly owns all but ten of its Malls and manages all but two of them.
In the years ended December 31, 1999, 2000 and 2001, Mall revenues represented approximately 76.9%, 77.3% and 84.7%, respectively, of total revenues from the Company's Properties.
CBL & Associates Poperties, Inc. - Form 10K
Occupancy of Mall Stores in the Malls at December 31, 2001, compared with Occupancy at December 31, 2000 as follows:
2001 2000
---- ----
Stabilized Malls 94.1% 94.5%
New Malls* 89.1% 90.4%
Newly-Acquired Malls 90.4% N/A
* - excluding Parkway Place which is under redevelopment
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Mall store sales per square foot decreased for the year ended December 31, 2001 compared with 2000.
Sales per square foot
Percentage
2001 2000 Decrease
------- ------- ----------
Stabilized Malls $284.65 $289.00 (1.5)%
Newely Acquired Malls 313.15 318.16 (1.6)%
Combined Stabilized Malls 297.70 302.3 (1.5)%
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Average base rent per square foot at December 31, 2001 and 2000 as follows:
At December 31, Percentage
--------------- Increase
2001 2000 (Decrease)
------- ------- ----------
Stabilized and New Malls $22.49 $21.57 4.3%
Newly Acquired Malls 23.49 -- --
All Malls 22.91 21.57 6.2%
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Occupancy costs as a percentage of sales for tenants in the Stabilized Malls (excluding malls acquired in 1999 from the 1999 calculation) were 11.5%, 11.9% and 11.3% for the years ended December 31, 1999, 2000, and 2001, respectively.
The Malls are generally located in middle-markets. Management believes that the Malls have strong competitive positions because they generally are the only, or the dominant enclosed malls within their respective trade areas. Trade areas have been identified by management based upon a number of sources of information, including the location of other malls, publicly available population information, customer surveys, surveys of customer automobile license plates, as well as ZIP codes and third-party market studies.
The three largest revenue-producing Malls are Coolsprings Galleria, Hanes Mall and Hamilton Place Mall. Coolsprings Galleria is located on a 150-acre site in Nashville, Tennessee and represented, as of December 31, 2001, 2.1% of the Properties' total GLA, 2.3% of total Mall Store GLA and 3.6% of total revenues of the Company. Hanes Mall is located on a 112-acre site in Winston-Salem, North Carolina and represented, as of December 31, 2001, 2.9% of the Properties' total GLA, 3.4% of total Mall Store GLA and 3.9% of total revenues of the Company. Hamilton Place Mall is located in on a 187-acre site in Chattanooga, Tennessee and represented, as of December 31, 2001, 2.2% of the Properties' total GLA, 2.2% of total Mall Store GLA and 3.6% of total revenues of the Company.
Forty-three of the fifty-two Malls have undergone an expansion or
renovation since their opening, and all but six of the existing Stabilized and
New Malls have either been built, renovated or expanded in the last 10 years one
of which, Parkway Place in Huntsville, Alabama has been demolished and is
undergoing redevelopment. During 2001, the Company completed the renovation and
first phase expansion of Meridian Mall in Lansing Michigan, completed a food
court addition at Georgia Square Mall in Athens Georgia and completed an
expansion of Springdale Mall in Mobile, Alabama. During 2001, the Company also
renovated Burnsville Center in Minneapolis (Burnsville), Minnesota and two of
the Newly Acquired Malls; Cary Towne Center in Cary, North Carolina and Fashion
Square in Saginaw, Michigan. In 2002 the Company plans renovations for Columbia
Mall in Columbia, South Carolina; Parkdale Mall in Beaumont, Texas; Hanes Mall
in Winston-Salem, North Carolina; Kentucky Oaks Mall in Paducah, Kentucky; St
Clair Square in Fairview Heights, Illinois; Hickory Hollow Mall in Nashville,
Tennessee; and Stroud Mall in Stroudsburg, Pennsylvania. Four of the Malls have
available Anchor pads providing expansion potential. Forty-eight existing
Anchors at twenty-three Malls have aggregate expansion potential at their
existing stores of approximately 1,532,000 buildable square feet subject in
certain cases to maintaining approved parking ratios and / or approval of
governmental agencies. New department stores opening in 2002 are as follows:
Target at Citadel Mall, Charleston, South Carolina; Belk at College Square,
Morristown, Tennessee; Dillard's at Randolph Mall, Asheboro, North Carolina,
Foley's at Parkdale Mall in Beaumont, Texas and Dillard's at Asheville Mall,
Asheville, North Carolina. All of these new department stores are replacing
previous anchors or anchor vacancies.
The land underlying the Malls is owned in fee simple in all cases, except for Walnut Square, WestGate Mall, St. Clair Square, Bonita Lakes Mall, Meridian Mall, Stroud Mall, Wausau Center and Eastgate Mall which are each subject to long-term ground leases for all or a portion of the land underlying these Malls.
CBL & Associates Poperties, Inc. - Form 10K
The following table sets forth certain information for each of the Malls as
of December 31, 2001.
Percen-
Mall tage
Store Mall Fee
Year of Ownership by Total Sales Store Simple
Year of Most Company and Mall per GLA Anchor or
Opening/ Recent Operating Total Store Square Leased Vacan- Ground
Name of Mall/Location Acquisition Expansion Partnership GLA(1) GLA(2) Foot(3) (4) Anchors cies Lease
----------------------- ----------- --------- ------------- -------- ---------- ------- ------ ---------------------- ------ ------
NEW MALLS
Arbor Place(5) 1999 N/A 100% 1,035,320 386,380 288 92% Dillard's, Parisian, Yes(14) Fee
Atlanta(Douglasville),GA Sears, Old Navy, Bed
Bath & Beyond,Dekor(14)
Lakes Mall, The(5) 2001 N/A 90% 553,391 214,903 146 84% JCPenney, Sears, None Fee
- Muskegon, MI Younkers, Bed Bath
& Beyond
Parkway City Mall(5) 1957/1998 1974 50% 414,540 187,825 184 N/A Dillard's, Parisian None Fee
- Huntsville, AL
Springdale Mall 1960/1997 2001 100% 970,651 319,936 115 89% Dillard's, McRae's, None Fee
- Mobile, AL Burlington Coat,
Goody's, Staples,
Linens N Things, Best
Buy, Toys "R" Us,
Carmike
---------- --------- ----
Total New Malls 2,973,902 1,109,004 89%
========== ========= ====
STABILIZED MALLS
Asheville Mall 1972/2000 2000 100% 921,430 309,409 299 98% Dillard's, JCPenney, Yes(13) Fee
- Asheville, NC Sears, Belk,
Dillard's (13)
- Asheville, NC
Bonita Lakes Mall(5) 1997 N/A 100% 641,047 184,273 254 99% Goody's, Dillard's, None Ground
- Meridian, MS JCPenney, Sears, Lease
McRae's (6)
Burnsville Center 1977/1998 N/A 100% 1,069,887 398,571 340 95% Mervyn's, Marshall None Fee
- Burnsville, MN Fields, JCPenney,
Sears
College Square(5) 1988 1993 100% 459,473 152,812 212 94% JCPenney, Sears, None Fee
- Morristown, TN Belk(13), Goody's,
Proffitt's
CoolSprings Galleria(5) 1991 1994 100% 1,129,764 372,085 346 100% Hechts, Dillard's, None Fee
- Nashville, TN Sears, JCPenney,
Parisian
Foothills Mall(5) 1983/1996 1997 95% 476,768 180,000 191 82% Sears, JCPenney, None Fee
- Maryville, TN Goody's, Proffitt's
for Women, Proffitt's
for Men/Kids/Home
Frontier Mall(5) 1981 1997 100% 523,004 205,958 215 98% Dillard's I, None Fee
- Cheyenne, WY JCPenney, Dillard's
II, Sears
Georgia Square(5) 1981 N/A 100% 677,906 250,043 241 91% Belk, JCPenney, None Fee
- Athens, GA Macy's, Sears
Governor's Square(5) 1986 1999 48% 690,437 269,436 251 97% JCPenney, Parks-Belk, None Fee
- Clarksville, TN Sears, Dillard's,
Goody's
Hamilton Place(5) 1987 1998 90% 1,166,776 368,399 350 98% Dillard's, Parisian, None Fee
- Chattanooga, TN Proffitt's for Men,
Proffitt's for Ladies,
Sears, JCPenney
Hickory Hollow Mall 1978/1998 1991 100% 1,095,946 416,128 242 92% JCPenney, Sears, None Fee
- Nashville, TN Dillard's, Hechts
15
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CBL & Associates Poperties, Inc. - Form 10K
Janesville Mall 1973/1998 1998 100% 609,364 165,886 306 85% JCPenney, Kohl's, None Fee
- Janesville, WI Boston Store, Sears
Lakeshore Mall(5) 1992 1999 100% 501,852 149,114 230 93% Kmart, Belk-Lindsey, None Fee
- Sebring, FL Sears, JCPenney,
Beall's (9)
Madison Square(5) 1984 1985 100% 938,089 299,379 319 97% Dillard's, JCPenney, None Fee
- Huntsville, AL McRae's, Parisian,
Sears
Meridian Mall 1969/1998 1987 100% 919,823 446,858 325 93% JCPenney, Mervyn's, None Fee/
- Lansing, MI Marshall Fields, Ground
Jacobson's Lease
(8)
Oak Hollow Mall(5) 1995 N/A 75% 802,239 249,934 210 90% Goody's, JCPenney, None Fee
- High Point, NC Belk-Beck, Sears,
Dillard's
Pemberton Square(5) 1985 1999 100% 353,514 135,065 161 77% JCPenney, McRae's, None Fee
- Vicksburg, MS Dillard's, Goody's
Plaza del Sol Mall(5) 1979 1996 51% 261,507 105,405 192 99% Beall Bros(9), None Fee
- Del Rio, TX JCPenney, Kmart
Post Oak Mall(5) 1982 1985 100% 776,347 319,454 273 90% Beall Bros.(9), None Fee
- College Station, TX Foley's, Dillard's I,
Dillard's II, Sears,
JCPenney
Rivergate Mall 1971/1998 1998 100% 1,073,970 375,597 300 89% Sears, Dillard's, None Fee
- Nashville, TN JCPenney, Hechts
St. Clair Square 1974/1996 1993 100% 1,049,996 284,234 383 99% Famous Barr, Sears, None Fee/
- Fairview Heights, IL JCPenney, Dillard's Ground
Lease
(10)
Stroud Mall 1977/1998 1994 100% 427,194 150,481 305 99% JCPenney, The Bon-Ton, None Ground
- Stroudsburg, PA Sears Lease
(11)
Turtle Creek Mall(5) 1994 1995 100% 847,535 223,026 309 100% JCPenney, Sears, None Fee
- Hattiesburg, MS Dillard's, McRae's I,
Goody's, McRae's II
Twin Peaks Mall(5) 1985 1997 100% 557,082 242,524 234 92% JCPenney, Dillard's I, None Fee
- Longmont, CO Dillard's II, Sears
Walnut Square(5) 1980 1992 100% 452,407 171,520 224 97% Belk, JCPenney, None Ground
- Dalton, GA Profitt's, Sears, Lease
Goody's (12)
WestGate Mall 1975/1995 1996 100% 1,100,513 267,398 265 95% Belk, JCPenney, None Fee/
- Spartanburg, SC Dillard's, Sears, Bed, Ground
Bath & Beyond, Lease
Proffitt's, Dick's (7)
Sporting Goods
York Galleria 1998/1999 N/A 100% 766,972 229,270 292 93% Boscov's, JCPenney, None Fee
- York, PA Sears, The Bon-Ton
---------- ---------- ------
Total Stabilized Malls 20,290,842 6,922,259 94%
========== ========== ======
NEWLY ACQUIRED MALLS:
Brookfield Square 1967 1997 100% 1,041,327 317,410 438 97% Boston Store, None Fee
- Brookfield, WI Sears, JCPenney
Cary Towne Center 1979 1993 100% 953,214 295,818 380 97% Dillard's, Hecht's, None Fee
- Cary, NC Sears, Belk, JCPenney
16
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CBL & Associates Poperties, Inc. - Form 10K
Cherryvale Mall 1973 1989 100% 731,601 297,869 315 86% Bergner's, Marshall None Fee
- Rockford, IL Fields, Sears
Citadel Mall 1981 2000 100% 1,074,823 299,095 259 85% Parisian, Dillard's, Yes(13) Fee
- Charleston, SC Belk, Target(13),
Sears
Columbia Mall 1977 1997 48% 1,113,274 266,271 257 90% Dillard's, JCPenney, None Fee
- Columbia, SC Rich's, Sears
Eastgate Mall 1980 1995 100% 905,372 255,793 269 88% JCPenney, Kohl's, None Ground
- Cincinnati, OH Dillards's, Sears Lease
(15)
East Towne Mall 1971 1997 48% 887,696 292,558 301 96% Boston Store, None Fee
- Madison, WI Younkers, Sears,
JCPenney
Fashion Square 1972 1993 100% 785,645 281,482 301 93% JCPenney, Sears None Fee
- Saginaw, MI
Fayette Mall 1971 1993 100% 1,108,551 307,955 495 99% Lazarus, Dillard's, None Fee
- Lexington, KY JCPenney, Sears
Hanes Mall 1975 1990 100% 1,556,010 547,214 329 93% Dillard's, Belk, None Fee
- Wiston-Salem, NC Hecht's, Sears,
JCPenney
Jefferson Mall 1978 1999 100% 936,285 272,401 287 96% Lazarus, Dillard's, None Fee
- Louisville, KY Sears, JCPenney
Kentucky Oaks Mall 1982 1995 48% 888,845 278,000 256 84% Dillard's, Elder- None Fee
- Paducah, KY Beerman, JCPenney,
Hobby Lobby, Sears,
Service Merchandise
Midland Mall 1991 - 100% 516,127 184,583 245 85% Elder-Beerman, None Fee
- Midland, MI JCPenney, Sears,
Target
Northwoods Mall 1972 1995 100% 832,575 304,536 317 88% Dillard's, Belk, None Fee
- Charleston, SC JCPenney, Sears
Old Hickory Mall 1967 1994 100% 555,281 158,521 304 99% Belk, Rich's, None Fee
- Jackson, TN Sears, JCPenney
Parkdale Mall 1986 1993 100% 1,411,239 460,001 271 82% Dillard's I, Dillard's Yes(13) Fee
- Beaumont, TX II, JCPenney, Foley's
(13), Sears
Randolph Mall 1982 1989 100% 376,214 137,089 195 91% Belk, JCPenney, Yes(13) Fee
- Asheboro, NC Dillard's(13), Sears
Regency Mall 1981 1999 100% 926,257 255,870 257 91% Boston Store, None Fee
- Racine, WI Younkers, JCPenney,
Sears, Target
Towne Mall 1977 - 100% 521,000 153,262 269 70% Elder-Beerman, None Fee
- Franklin, OH Dillard's, Sears
Wausau Center 1983 1999 100% 430,164 154,984 258 95% Younkers, JCPenney, None Ground
- Wausau, WI Sears Lease
(16)
West Towne Mall 1970 1990 48% 1,008,830 259,786 376 98% Boston Store, Sears, None Fee
- Madison, WI JCPenney, Younkers
---------- ---------- ---- ----
Total Newly Acquired Malls 18,560,329 5,780,498 313 90%
========== ========== ==== ====
17
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CBL & Associates Poperties, Inc. - Form 10K
( 1) Includes the total square footage of the Anchors (whether owned or leased by the Anchor) and Mall Stores. Does not include
future expansion areas.
( 2) Does not include Anchors.
( 3) Totals represent weighted averages.
( 4) Includes tenants paying rent for executed leases as of December 31, 2001.
( 5) Developed by the Company.
( 6) Company is the lessee under a ground lease for 82 acres which extends through June 30, 2035. The average annual base rent
is $29,239 increasing by 6% per year.
( 7) The Company is the lessee under several ground leases for approximately 53% of the underlying land. The leases extend
through October 31, 2084, including six ten-year renewal options. Rental amount is $130,000 per year. In addition to
base rent, the landlord receives 20% of the percentage rents collected. The Company has a right of first refusal to
purchase the fee.
( 8) The Company is the lessee under several ground leases in effect through March 2067 with extension options. Fixed rent is
$18,700 per year and 3% to 4% of all rents.
( 9) Beall Bros. operating in Texas is unrelated to Beall's operating in Florida.
(10) The Company is the lessee under a ground lease for 20 acres which extends through January 31, 2073, including 14 five-year
renewal options and one four-year renewal option. Rental amount is $40,000 per
year. In addition to base rent, the landlord receives .25% of Dillard's sales in excess of $16,200,000.
(11) The Company is the lessee under a ground lease which extends through July 2089. The current rental amount is $50,000 with
an additional $100,000 paid every 10 years.
(12) The Company is the lessee under several ground leases which extend through March 14, 2078, including six ten-year renewal
options and one eight-year renewal option. Rental amount is $149,450 per year. In addition to base rent, the landlord
receives 20% of the percentage rents collected. The Company has a right of first refusal to purchase the fee.
(13) Replacement Anchor is scheduled to open in 2002.
(14) Vacant but paying rent.
(15) Ground lease is $24,000 per year.
(16) Ground lease is $181,500 per year and 10% of net taxable cash flow.
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Anchors. Anchors are a critical factor in a Mall's success because the public's identification with a property typically focuses on its Anchors. Mall Anchors generally are department stores whose merchandise appeals to a broad range of shoppers. Although the Malls derive a smaller percentage of their operating income from Anchor stores than from Mall Stores, strong Anchors play an important part in generating customer traffic and making the Malls desirable locations for Mall Store tenants.
Anchors either own their stores together with the land under them, sometimes with adjacent parking areas, or enter into long-term leases with respect to their stores at rental rates that are significantly lower than the rents charged to tenants of Mall Stores. Anchors account for approximately 6.4% of the total revenues from the Company's Properties. Each Anchor which owns its own store has entered into a reciprocal easement agreement with the Company covering, among other things, operating covenants, reciprocal easements, property operations, initial construction and future expansions.
The Malls at December 31, 2001 have a total of 226 Anchors and one vacant Anchor storesat each of the following Malls: Asheville Mall, Citadel Mall, College Square Mall, Parkdale Mall and Randolph Mall. New department stores are scheduled to open in 2002 eliminating these vacant anchor stores. One new Anchor vacancy occurred after December 31, 2001 at Kentucky Oaks Mall. The following table indicates all Mall Anchors and sets forth the aggregate number of square feet owned or leased by Anchors in the Malls as of December 31, 2001.
CBL & Associates Poperties, Inc. - Form 10K
Mall Anchor Summary Information
As of December 31, 2001
GLA GLA Total
Number Owned Leased Occupied
of Anchor by by by
Name Stores Anchor Anchor Anchor (1)
----------------------------------------- ---------------- ---------------- --------------- ------------
JCPenney 46 2,444,137 2,571,789 5,015,926
Sears 47 4,339,235 1,291,550 5,630,785
Dillard's 33 4,214,840 511,759 4,726,599
Sak's
Proffitt's 7 643,082 0 643,082
Boston Store 5 440,249 255,961 696,210
Yonker's 4 400,180 100,564 500,744
McRae's 7 511,359 243,000 754,359
Parisian 7 586,628 209,541 796,169
- --------- ------- ---------
Subtotal 30 2,581,498 809,066 3,390,564
Belk 13 830,089 767,035 1,597,124
The May Company
Foley's 1 103,888 0 103,888
Famous Barr) 1 0 236,489 236,489
Hecht's 5 814,630 0 814,630
- --------- ------- ---------
Subtotal 7 918,518 236,489 1,155,007
Federated Department Stores
Macy's, 1 115,623 0 115,623
Lazarus 2 427,143 0 427,143
Rich's 2 167,174 119,700 286,874
- --------- ------- ---------
Subtotal 5 709,940 119,700 829,640
Goody's 9 0 292,749 292,749
Target, Inc.
Marshall Field's 1 0 147,632 147,632
Target 5 634,554 0 634,554
- --------- ------- ---------
Subtotal 6 634,554 147,632 782,186
The Bon Ton 2 131,915 87,024 218,939
Shopko(2) 1 85,229 0 85,229
Kmart 2 0 173,940 173,940
Mervyn's 2 124,919 74,889 199,808
Boscov's 1 150,000 0 150,000
Burlington Coat 1 0 153,345 153,345
Dekor(3) 1 0 80,000 80,000
Kohl's 2 0 183,591 183,591
Jacobson's 1 0 83,916 83,916
Bed, Bath & Beyond 2 0 73,823 73,823
Old Navy 1 0 37,585 37,585
Bergner's 1 128,330 0 128,330
Elder-Beerman 3 117,888 124,233 242,121
Hobby Lobby 1 0 54,875 54,875
Service Merchandise 2 53,000 63,404 116,404
Beall Bros. (Texas) 2 0 61,916 61,916
Beall's (Florida)
1 0 45,844 45,844
------ ---------- ---------- ----------
Sub-Total 222 17,464,092 8,046,154 25,510,246
Vacant Anchors
Roses 1 0 60,853 60,853
JCPenney (Citadel) 1 121,590 0 121,590
Wal*Mart 1 0 112,541 112,541
Montgomery Ward 2 164,271 92,484 256,755
------ ---------- ---------- ----------
TOTAL 227 17,749,953 8,312,032 26,061,985
====== ========== ========== ==========
(1) Includes all square footage owned by or leased to such Anchor including
tire, battery and automotive facilities and storage square footage.
(2) Anchor vacated after December 31, 2001.
(3) Vacant but paying rent.
|
Mall Stores. The Malls have approximately 7,706 Mall Stores. National or regional chains (excluding individually franchised stores) lease approximately 86.7% of the occupied Mall Store GLA. Although Mall Stores occupy only 29.6% of total Mall GLA, the Malls derived approximately 89.4% of their revenue from Mall Stores for the year ended December 31, 2001.
Among the companies with the largest representation among Mall Stores are:
The Limited, Inc./Intimate Brands, Inc. stores (The Limited, Limited Too,
Express, Lerner New York, Structure, Victoria's Secret, and Bath and Body
Works); The Gap. Inc. (The Gap, Old Navy, Banana Republic and Gap Kids ) and
Footlocker, Inc. (Footlocker, Lady Footlocker, Kids Footlocker and Champs Sports
Stores). As of December 31, 2001, The Limited, Inc.'s and Intimate Brands,
Inc.'s 189 stores accounted for 6.9% of total mall leased GLA and 6.4% of the
Company's total revenues. As of December 31, 2001, The Gap. Inc.'s 67 stores
accounted for 5.0% of total mall leased GLA and 2.7% of the Company's total
CBL & Associates Poperties, Inc. - Form 10K
revenues As of December 31, 2001 Footlocker, Inc. accounted for 3.2% of total mall leased GLA and 2.6% of the Company's total revenues. Other than The Limited which accounted for 6.9% of Mall Store GLA and 6.4% of total revenues no single Mall Store retailer accounted for more than 5.0% of total Mall Store leased GLA and no single Mall Store retailer accounted for more than 2.7% of total revenues from the Company's Properties. As of December 31, 2001,
The following table sets forth certain information for executed renewal leases with current tenants or leases of previously occupied space with new tenants at the Malls during the year ended December 31, 2001.
Prior Lease New Lease Increase Increase
Total Base and Initial Year per New Lease Per
Number Square Percentage Rent Base Rent Square Average Square
of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
------------ ----------- ---------------- ----------------- ---------- ----------- -----------
539 1,155,000 $24.10 $25.75 $1.65 $26.52 $2.42
|
The following table sets forth the total Mall Store GLA, the total square footage of leased Mall Store GLA, the percentage of Mall Store GLA leased, the average base rent per square foot of Mall Store GLA and average Mall Store sales per square foot as of the end of each of the past five years.
Mall Store Summary Information
Total Percentage Average Average Mall
Total Mall Store of Mall Store Base Rent Store Sales
At Mall Store Leased GLA per Square per Square
December 31, GLA GLA Leased (1) Foot (2) Foot (3)
------------------- -------------- ------------ ---------------- ------------- --------------
1997 3,503,490 3,214,176 91.7 $18.98 $263
1998 7,166,498 6,707,283 93.6 19.82 273
1999 7,429,503 6,956,451 93.6 20.68 285
2000(4) 7,558,160 7,110,705 94.1 21.57 302
2001(4) 13,723,000 12,653,000 92.2 22.91 297
(1) Mall Store occupancy includes tenants with executed leases who are paying
rent.
(2) Average base rent per square foot is based on Mall Store GLA occupied as of
the last day of the indicated period for the preceding twelve-month period.
(3) Calculated for the preceding twelve-month period. The calculation of sales
per square foot for 2000 and 2001 excludes all stores over 10,000 square
feet. Sales per square foot in prior years exclude stores over 20,000
square feet.
(4) Excludes Parkway Place GLA.
|
Lease Expirations. The following table shows the scheduled lease
expirations for Mall Stores in occupancy at December 31, 2001 in the Malls
(assuming that none of the tenants exercise renewal options) for the next ten
years.
Mall Lease Expiration
Percentage of Total
------------------------------
Represented by
Expiring Leases
Approximate
Annualized Base Mall Store
Number of Rent of GLA of Base Rent
Year Ending Leases Expiring Expiring per Square Annualized Leased Mall
December 31, Expiring Leases (1) Leases Foot Base Rent Store GLA
------------------ ------------- ---------------- -------------- ----------- ------------- ---------------
2002 282 $11,428,000 633,000 $18.04 4.7% 4.9%
2003 382 19,662,000 1,129,000 17.41 8.6% 8.8%
2004 392 21,667,000 966,000 19.52 9.5% 7.5%
2005 415 25,134,000 1,130,000 23.16 11.0% 8.8%
2006 390 22,153,000 960,000 20.82 9.7% 7.5%
2007 408 24,857,000 1,532,000 20.02 10.9% 11.9%
2008 307 20,215,000 1,038,000 19.88 8.8% 8.1%
2009 306 20,437,000 886,000 21.42 8.9% 6.9%
2010 294 20,150,000 842,000 24.99 8.8% 6.6%
2011 316 25,249,000 1,032,000 22.84 11.1% 8.0%
(1) Total annualized base rent for all leases executed as of December 31, 2001
includes rent for space that is leased but not yet occupied but excludes (i)
percentage rents, (ii) additional payments by tenants for common area
maintenance, real estate taxes and other expense reimbursements and (iii)
contractual rent escalations and cost of living increases due after December
31, 2001.
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CBL & Associates Poperties, Inc. - Form 10K
Cost of Occupancy. Management believes that in order to maximize the Company's Funds from Operations, tenants in Mall Stores must be able to operate profitably. A major factor contributing to tenant profitability is the tenant's cost of occupancy.
The following table summarizes for Stabilized Mall and Newly Acquired Mall Store tenants the occupancy costs under their leases as a percentage of total Mall Store sales for the last three years.
For the Year Ended
December 31, (1)
-----------------------------------
2001 2000 1999
----------- ---------- ----------
Mall Store sales (in millions)(2) $2,821.4 $1,487.1 $1,426.3
Minimum rents 8.0% 7.9% 7.8%
Percentage rents 0.3 0.5 0.4
Expense recoveries (3) 3.0 3.5 3.3
----------- ---------- ----------
Mall tenant occupancy costs 11.3% 11.9% 11.5%
----------- ---------- ----------
(1) Excludes Malls not owned or open for full reporting period except for
2001 which includes results from the Newly Acquired Malls.
(2) Consistent with industry practice, sales are based on reports by
retailers (excluding theaters) leasing Mall Store GLA of 10,000 square
feet and less and occupying space for the reporting period. Represents
100% of sales for these Malls. In certain cases, the Company and the
Operating Partnership owns less than 100% interest in these Malls.
(3) Represents real estate tax and common area maintenance charges.
|
At December 31, 2001, the Company had investments in seven malls and two associated centers in joint ventures with third parties, all of which are reflected using the equity method of accounting. Condensed combined results of operations for the seven- unconsolidated affiliates are presented in the following table (in thousands).
Total for the Year Ended Company's Share for the year
December 31, Ended December 31,
--------------------------------- ---------------------------------
2001 2000 2001 2000
---------------- ---------------- ---------------- ----------------
Revenues $ 55,779 $ 27,294 $ 26,847 $ 13,436
================ ================ ================ ================
Depreciation and Amortization 7,707 3,080 3,709 1,510
Interest Expense 14,619 8,255 7,028 4,134
Other operating expenses 18,325 8,397 8,836 4,203
---------------- ---------------- ---------------- ----------------
Income from operations 15,128 7,562 7,274 3,589
Gain on Sales 213 186 101 95
---------------- ---------------- ---------------- ----------------
Net Income $ 15,341 $ 7,748 $ 7,375 $ 3,684
================ ================ ================ ================
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Associated Centers
The eighteen Associated Centers are each part of a Mall complex and generally have one or two Anchor tenants and various smaller tenants. Anchor tenants in these centers include such retailers as Books-A-Million, Target, Toys "R" Us, TJ Maxx, and Goody's, which are category dominant retailers that benefit from the regional draw of the Malls. The Associated Centers also increase the draw to the total Mall complex.
Total leasable GLA of the eighteen Associated Centers is approximately 3.2 million square feet, including Anchors, or an average of approximately 178,000 square feet per center. As of December 31, 2001, 95.6% of total leasable GLA at the Associated Centers was occupied. During 2001 the Company completed the expansion of one Associated Center in Chattanooga, Tennessee.
In the years ended December 31, 1999, 2000, and 2001, revenues from the Associated Centers represented approximately 3.7%, 4.1 and 2.6%, respectively, of total revenues from the Company's Properties.
In the years ended December 31, 1999, 2000 and 2001, average tenant sales per square foot at the Associated Centers were approximately $184, $185 and $198, respectively.
Average base rent per square foot at the Associated Centers decreased from $9.88 at December 31, 2000 to $9.73 at December 31, 2001.
CBL & Associates Poperties, Inc. - Form 10K
Each of the Associated Centers was developed by the Company, except for the
following which were acquired: WestGate Crossing (1997); Village at Rivergate
(1998); Courtyard at Hickory Hollow (1998); Eastgate Crossing (2001); and West
Towne Crossing (2001). All of the land underlying the Associated Centers is
owned in fee simple except for Bonita Crossing.
Lease Expirations. The following table shows the scheduled lease expirations for tenants in occupancy at December 31, 2001 in the Associated Centers (assuming that none of the tenants exercise renewal options) for the next ten years.
Associated Center Lease Expiration
Percentage of Total
Represented by
Expiring Leases
-------------------------------
Approximate
Number of Annualized Base GLA of Base Rent
Year Ending Leases Rent of Expiring Expiring Per Annualized Associated
December 31, Expiring Leases (1) Leases Square Foot Base Rent Center GLA
----------------- ----------- ----------------- ------------- ------------- --------------- --------------
2002 23 $918,000 64,000 $14.25 7.0% 4.5%
2003 29 1,361,000 135,000 10.06 10.4% 9.5%
2004 24 1,231,000 173,000 7.12 9.4% 12.1%
2005 32 1,873,000 201,000 9.34 14.3% 14.1%
2006 15 789,000 64,000 12.24 6.0% 4.5%
2007 7 285,000 45,000 6.41 2.2% 3.1%
2008 2 227,000 14,000 16.25 1.7% 1.0%
2009 11 1,543,000 114,000 13.54 11.8% 8.0%
2010 3 665,000 55,000 12.12 5.1% 3.8%
2011 2 887,000 113,000 7.83 6.8% 7.9%
(1) Total annualized base rent for all leases executed as of December 31,
2001 includes 12 months of rent for space that is newly leased but not
yet occupied and base rent on ground leases with no square footage but
excludes (i) percentage rents, (ii) additional payments by tenants for
common area maintenance, real estate taxes and other expense
reimbursements and (iii) contractual rent escalations and cost of
living increases due after December 31, 2001.
|
The following table sets forth certain information for executed renewal leases with current tenants or leases of previously occupied space with new tenants at the Associated Centers during the year ended December 31, 2001.
Prior Lease New Lease Decrease Decrease
Total Base and Initial Year Per New Lease Per
Number Square Percentage Rent Base Rent Square Average Square
Of Leases Feet Per Square Foot per Square Foot Foot Base Rent Foot
--------------- ----------- ---------------- ------------------ ----------- ------------ -----------
25 87,706 $13.44 $10.59 ($2.85) $10.98 ($2.46)
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CBL & Associates Poperties, Inc. - Form 10K
The following table sets forth certain information for each of the Associated Centers as of December 31, 2001.
Year of Ownership by Percentage
Opening/Most Company and Total GLA Fee or
Name of Associated Recent Operating Total Leasable Leased Ground
Center/Location Expansion Partnership GLA(1) GLA(2) (3) Anchors Lease
------------------------ ------------- -------------- ---------- ----------- ----------- ------------------------ -------
Bonita Crossing(10) 1997/1999 100% 122,150 122,150 89% Books-A-Million, TJ Ground
Meridian, MS Maxx, Office Max, The Lease
Gap
CoolSprings Crossing 1992 100% 371,473 40,630 100% Target(7) Service Fee
Nashville, TN Merchandise(7), Toys "R"
Us(7), Vacant(7),
Lifeway Books
Courtyard at Hickory 1979(9) 100% 77,560 77,560 97% Carmike Cinemas, Just Fee
Hollow Nashville, TN For Feet
Foothills Plaza 1983/1986 100% 191,216(4) 71,216 100% Eckerd(6), Sweetwater Fee
Maryville, TN Salvage Surplus,Carmike
Cinemas
Frontier Square 1985 100% 161,615 16,527 100% Albertson's(7), Fee
Cheyenne, WY Target(7)
Georgia Square Plaza 1984 100% 15,393 15,393 N/A Fee
Athens, GA
Governor's Square Plaza 1985(5) 49% 180,018 57,820 100% Office Max, Premier Fee
Clarksville, TN Medical Group, Target
Gunbarrel Pointe 2000 100% 281,525 155,525 100% Kohl's, Target, Fee
Chattanooga, TN Goody's
Hamilton Corner 1990 90% 88,298 88,298 99% Michael's, Appliance Fee
Chattanooga, TN Factory Warehouse, Fresh
Market
Hamilton Crossing 1987/1994 92% 185,370 92,257 96% Service Merchandise(7) Fee
Chattanooga, TN Toys "R" Us(7), TJ Maxx
The Landing 1999 100% 163,194 85,337 82% Toys "R" Us(7), Circuit Fee
Atlanta City(7), Michael's
(Douglasville),GA
Madison Plaza 1984 100% 153,085 98,690 98% Bruno's, TJ Maxx, Fee
Huntsville, AL Service Merchandise(7)
Pemberton Plaza 1986 100% 77,893 26,947 91% Kroger, Blockbuster Fee
Vicksburg, MS
The Terrace 1997 92% 155,987 116,715 100% Barnes & Noble, Linens Fee
Chattanooga, TN "N Things, Old Navy,
Staples, Circuit City(7)
Village at Rivergate 1981(9) 100% 166,366 66,366 98% Target(7), Just For Fee
Nashville, TN Feet
WestGate Crossing 1985/1999(8) 100% 157,247 157,247 95% Goody's, Toys "R" Us, Fee
Spartanburg, SC Old Navy
---------- ----------- -----------
Total Core Associated Centers 2,548,390 1,288,678 96%
NEWLY ACQUIRED
ASSOCIATED CENTERS:
Eastgate Crossing 1991 100% 195,112 195,112 99% Kroger, Circuit City Fee
Cincinnati, OH (7)
West Towne Crossing 1980 48% 230,993 131,583 100% Barnes & Noble, Best Fee
Madison, WI Buy, Kohls
---------- ----------- -----------
Total Newly Acquired Associated Centers 426,105 326,695 100%
========== =========== ===========
Total All Associated Centers Total 2,974,495 1,615,373 96%
========== =========== ===========
23
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CBL & Associates Poperties, Inc. - Form 10K
(1) Includes the total square footage of the Anchors (whether owned or leased by
the Anchor) and shops. Does not include future expansion areas.
(2) Includes leasable Anchors.
(3) Includes tenants with executed leases at December 31, 2001. Calculation
includes leased Anchors.
(4) Total GLA includes, but total leasable GLA and percentage GLA leased exclude
a furniture store of 80,000 square feet owned by others and a Carmike Cinema
which is subject to a ground lease (40,000 square feet of GLA).
(5) Originally opened in 1985, and was acquired by the Company in June 1997.
(6) Eckerd has closed its store but is continuing to meet its financial
obligations under its lease and is subleased to Dollar General.
(7) Owned by tenant.
(8) Originally opened in 1985, and was acquired by the Company in August 1997.
(9) Acquired by the Company in July 1998.
(10)The land is ground leased through June 2015 with options to extend through
June 2035. The annual rent is $14,355 increasing by 6% each year.
|
Community and Power Centers
In addition to Mall development, the Company's development activities focus on Community Centers, and power centers. Community Centers pose fewer development risks than Malls because they have shorter development timetables and lower up-front costs. Community Centers also afford the Company the opportunity to meet the needs of retailers for whom a "convenience" type of location is more appropriate and the needs of customers whose trade areas cannot support a regional mall. Power centers are larger than other Community Centers, with several large anchor stores which draw shoppers from a wider geographic area.
The Company's Community Center developments in the 1980's were generally anchored by supermarkets, and, in certain cases, by drug stores. Management's current focus has expanded to include the development of larger centers, anchored by mass merchandisers and department stores, while continuing the development of smaller centers anchored by supermarkets and drug stores. During 2001, the Company opened the 404,000 Creekwood Crossing in Bradenton, Florida and completed expansions at Coastal Way in Springhill, Florida; Massard Crossing in Ft. Smith, Arkansas; Sutton Plaza in Mt. Olive, New Jersey; and Chesterfield Crossing in Richmond, Virginia. During 2001, the Company sold six Community Centers for total proceeds of $78.2 million. The proceeds were used primarily to retire debt. The Company also sold one Community Center in January 2001.
Community Centers, other than power centers, range in size from 25,000 square feet to in excess of 420,000 square feet. Anchors in Community Centers generally lease their store space and occupy 60-85% of a center's GLA. The number of stores in a Community Center ranges from one to seventeen with an average of nine stores per center.
The Company's two power centers, which were completed and opened in 1997 and 1998, average 786,000 square feet and have an average of nine major anchor stores and additional small shop space ranging from 38,000 square feet to 136,000 square feet. These power centers are included in the Community Center classification in this report.
Total GLA of the 68 Community Centers is approximately 8.5 million square feet, or an average of approximately 125,000 square feet per center. Excluding power centers the average is 105,000 square feet per center. As of December 31, 2001, 97.0% of total leasable GLA at the Community Centers was leased.
In the years ended December 31, 1999, 2000 and 2001, revenues from the Community Centers represented approximately 17.8%, 17.5 and 11.7%, respectively, of total revenues from the Company's Properties.
Occupancy at the Community Centers decreased from 97.8% at December 31, 2000 to 97.0% at December 31, 2001.
Average base rent per square foot at the Community Centers increased from $8.85 at December 31, 2000, to $9.43 at December 31, 2001.
As of December 31, 2001, Food Lion, a major regional supermarket operator with headquarters in North Carolina served as an anchor tenant in 25 of the Company's Community Centers. For the year ended December 31, 2001, Food Lion accounted for approximately 1.1% of the revenues generated by the Company's Properties.
With the exception of Suburban Plaza, Lions Head Village, MarketPlace at Flower Mound and Willowbrook Plaza , which were acquired by the Company in March 1995, July 1998, March 2000 and February 2001, respectively, each of the Community Centers was developed by the Company.
CBL & Associates Poperties, Inc. - Form 10K
The following table summarizes the percentage of GLA leased, average base rent per square foot (excluding percentage rent) and tenant sales per square foot at the Community Centers for each of the last five years.
Community Center Summary Information
Average
Percentage Base Rent Tenant
Year Ended GLA Per Square Sales Per
December 31, Leased (1) Foot (2) Square Foot (3)
----------------- ------------- ------------ ----------------
1997 97.6% $7.42 $221
1998 97.0% 8.22 220
1999 97.7% 8.32 214
2000 97.8% 8.85 213
2001 97.0% 9.43 190
(1) Percentage leased includes tenants who have executed leases and are
paying rent as of the specified date.
(2) Average base rent per square foot is based on GLA occupied as of the
last day of the indicated period.
(3) Consistent with industry practice, sales are based on reports by
retailers (excluding theaters) leasing GLA and occupying space for
the 12 months ending on the last day of the indicated period.
|
Lease Expirations. The following table shows the scheduled lease expirations for tenants in occupancy at December 31, 2001 in the Community Centers (assuming that none of the tenants exercise renewal options) for the next ten years. Community Center Lease Expiration
Community Center Lease Expiration
Percentage of Total
Represented by
Expiring Leases
Annualized Base Approximate -------------------------------
Number of Rent of GLA of Base Rent
Year Ending Leases Expiring Expiring Per Annualized Leased
December 31, Expiring Leases (1) Leases Square Foot Base Rent GLA
---------------- ----------- --------------- ----------- ------------ -------------- --------------
2002 79 $2,466,000 376,000 $6.56 5.2% 7.4%
2003 123 4,095,000 473,000 8.66 8.7% 9.2%
2004 118 3,364,000 344,000 9.78 7.1% 6.7%
2005 102 4,218,000 394,000 10.70 9.0% 7.7%
2006 62 3,209,000 376,000 8.53 6.8% 7.4%
2007 49 2,094,000 232,000 9.03 4.4% 4.5%
2008 23 2,530,000 239,000 10.60 5.4% 4.7%
2009 22 3,621,000 387,000 9.36 7.7% 7.6%
2010 23 2,101,000 211,000 9.49 4.5% 4.3%
2011 14 1,420,000 149,000 9.53 3.0% 2.9%
(1) Total annualized base rent for all leases executed as of December 31,
2001 includes 12 months of rent for space that is newly leased but not
yet occupied and base rent on ground leases with no square footage but
excludes (i) percentage rents, (ii) additional payments by tenants for
common area maintenance, real estate taxes and other expense
reimbursements and (iii) contractual rent escalations and cost of
living increases for periods after December 31, 2001.
|
The following table sets forth certain information for executed renewal leases with current tenants or leases of previously occupied space with new tenants at the Community Centers during the year ended December 1, 2001.
Prior Lease New Lease
Total Base and Initial Year Increase New Lease Increase
Number Square Percentage Rent Base Rent per Square Average per Square
Of Leases Feet per Square Foot per Square Foot Foot Base Rent Foot
--------------- ----------- ----------------- ----------------- ------------ ----------- ------------
163 360,281 $10.95 $11.59 $0.64 $11.69 $0.74
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CBL & Associates Poperties, Inc. - Form 10K
The following table sets forth certain information for each of the Company's Community Centers at December 31, 2001.
Year of Ownership by Square
Opening/ Company and Total Percentage Feet of Fee or
Name of Community Most Recent Operating Total Leasable GLA Anchor Ground
Center/Location Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease
------------------------ ----------- ------------- ----------- ----------- ----------- ----------------------- ----------- -------
Anderson Plaza 1983/1994 100% 46,258 46,258 100% Food Lion, Eckerd(7) 8,640 Fee
Greenwood, SC
Bartow Village 1990 100% 40,520 40,520 100% Food Lion(7), Family None Fee
Bartow, FL Dollar
Beach Crossing 1984 100% 45,790 45,790 88% Food Lion(4), CVS None Fee
Myrtle Beach, SC
BJ's Plaza 1991 100% 104,233 104,233 100% BJ's Wholesale Club None Ground
Portland, ME Lease(5)
Briarcliff Square 1989 100% 41,778 41,778 90% Food Lion None Fee
Oak Ridge, TN
Buena Vista Plaza 1989/1997 100% 151,320 17,500 85% Wal*Mart, Winn Dixie None Fee
Columbus, GA
Bulloch Plaza 1986 100% 39,264 39,264 100% Food Lion None Fee
Statesboro, GA
Capital Crossing 1995 100% 81,110 81,110 100% Lowe's Food, Staples None Fee
Raleigh, NC
Cedar Bluff Crossing 1987/1996 100% 53,050 53,050 100% Food Lion None Fee
Knoxville, TN
Cedar Plaza 1988 100% 50,000 50,000 97% Tractor Supply Company None Fee
Cedar Springs, MI
Chester Square 1997 100% 64,844 10,000 60% Kroger None Fee
Richmond, VA
Chesterfield Crossing 2001 100% 420,986 68,894 100% Home Depot, Wal*Mart None Fee
Richmond, VA
Chestnut Hills 1982 100% 68,364 68,364 93% JCPenney None Fee
Murray, KY
Coastal Way 2001 100% 191,230 170,715 100% Belk, Sears None Fee
Spring Hill, FL
Colleton Square 1986 100% 31,000 31,000 90% Food Lion(4) None Fee
Walterboro, SC
Collins Park Commons 1989 100% 37,458 37,458 94% Tractor Supply Co. None Ground
Plant City, FL Lease(6)
Conway Plaza 1985 100% 33,000 33,000 92% Food Lion(7) 21,000 Ground
Conway, SC Lease(8)
Cosby Station 1994/1995 100% 77,811 77,811 89% Publix None Fee
Douglasville, GA
26
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CBL & Associates Poperties, Inc. - Form 10K
Cortlandt Towne Center 1997/1998 100% 763,260 628,891 100% Marshalls, Wal*Mart, None Fee
Cortlandt, NY Home Depot, A & P Food
Store, Seaman
Furniture, Barnes &
Noble, Office Max,
PetsMart, Linens 'N
Things
County Park Plaza 1982 100% 60,750 60,750 100% Bi-Lo None Fee
Scottsboro, AL
Devonshire Place 1996 100% 104,414 104,414 100% Lowe's Food, W A Home None Ground
Cary, NC Furnishings, Borders Lease(9)
Books
East Ridge Crossing 1988 100% 58,950 58,950 100% Food Lion None Fee
Chattanooga, TN
East Towne Crossing 1989/1990 100% 175,667 76,197 61% Home Depot, 29,911 Fee
Knoxville, TN Food Lion
58 Crossing 1988 100% 49,984 49,984 100% Food Lion, CVS(7) None Fee
Chattanooga, TN
Garden City Plaza 1984/1991 100% 188,446 76,246 100% Wal*Mart, JCPenney None Fee
Garden City, KS
Girvin Plaza 1990 100% 78,419 31,997 97% Winn Dixie None Fee
Jacksonville, FL
Greenport Towne Centre 1994 100% 191,622 75,525 100% Wal*Mart, None Fee
Hudson, NY Price-Chopper
Hampton Plaza 1990 100% 44,420 44,420 100% Food Lion(4) None Fee
Tampa, FL
Henderson Square 1995 100% 268,327 162,329 99% JCPenney, Belk, None Fee
Henderson, NC Leggett, Goody's,
Wal*Mart
Jasper Square 1986/1990 100% 95,950 50,584 97% Lowe's, Goody's None Fee
Jasper, AL
Keystone Crossing 1989 100% 40,400 40,400 100% Food Lion(7) None Fee
Tampa, FL
Kingston Overlook 1996/1997 100% 119,350 119,350 100% Babies "R" Us, None Fee/
Knoxville, TN Michael's Ground
Lease
(10)
Lady's Island 1983/1993 100% 60,687 60,687 96% Winn Dixie, Eckerd None Fee
Beaufort, SC
LaGrange Commons 1996 100% 59,340 59,340 100% A & P Food Store None Fee
LaGrange, NY
Lions Head Village 1980(18) 100% 99,165 99,165 92% Steinmart, Office Max None Fee
Nashville, TN
Longview Crossing 2000 100% 40,598 40,598 100% Food Lion None Ground
Hickory, NC Lease
(11)
27
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CBL & Associates Poperties, Inc. - Form 10K
Lunenburg Crossing 1994 100% 198,115 25,515 100% Wal*Mart, Shop'n Save None Fee
Lunenburg, MA
Marketplace at Flower 1999 100% 113,466 113,466 85% Winn Dixie None Fee
Mound(19)
Flower Mound, TX
Massard Crossing(19) 2001 100% 296,617 98,410 96% Wal*Mart, TJ Maxx, None Fee
Ft. Smith, AR Goody's, Cato
North Creek Plaza 1983 100% 28,500 28,500 100% Food Lion None Fee
Greenwood, SC
North Haven Crossing 1993 100% 104,612 104,612 100% Sports Authority, None Fee
North Haven, CT Office Max, Barnes &
Noble
Northridge Plaza 1984/1988 100% 129,570 79,570 91% Home Goods, Eckerd(4), 35,922 Fee
Hilton Head, SC P.B. Realty
Northwoods Plaza 1983/1992 100% 32,705 32,705 100% Food Lion None Fee
Albemarle, NC
Oaks Crossing 1990/1993 100% 119,674 27,300 100% Wal*Mart, Buck's None Fee
Otsego, MI Variety
Orange Plaza 1983 100% 46,775 46,775 100% Food World (12), None Fee
Roanoke, VA Dollar General
Perimeter Place 1985/1988 100% 156,945 54,525 98% Home Depot, Fred's(7) 22,500 Fee
Chattanooga, TN
Rawlinson Place 1987 100% 35,750 35,750 94% Food Lion(7) 25,000 Fee
Rock Hills, SC
Rhett at Remount 1983/1994 100% 42,628 42,628 100% Food Lion, Eckerd(7) 8,640 Fee
Charleston, SC (19)
Salem Crossing 1997 100% 289,335 92,407 100% Kroger, Wal*Mart None Fee
Virginia Beach, VA
Sattler Square 1989 100% 94,760 94,760 98% Quality Stores, Perry None Fee
Big Rapids, MI Drug
Seacoast Shopping 1991 100% 208,690 91,690 98% Wal*Mart, Shaw's None Fee
Center Seabrook, NH Supermarket
Shenandoah Crossing 1988 100% 28,600 28,600 100% Food Lion(7) 25,000 Fee
Roanoke, VA
Signal Hills Village 1987/1989 100% 24,100 24,100 100% --- None(13) Ground
Statesville, NC Lease
(14)
Southgate Crossing 1985 100% 40,100 40,100 85% Food Lion(7) 25,000 Ground
Bristol, TN Lease
(15)
28
|
CBL & Associates Poperties, Inc. - Form 10K
Springhurst Towne 1997 100% 812,247 416,497 99% Cinemark, Kohl's, 15,000 Fee
Louisville, KY Books A Million, Party
Source, TJ Maxx,
Meijer, Dress Barn,
Target, Fashion Shop,
Office Max, Dick's
Sporting Goods
Springs Crossing 1987/1996 100% 42,920 42,920 100% Food Lion, Kerr Drugs None Ground
Hickory, NC Lease
(16)
Statesboro Square 1986 100% 41,000 41,000 100% Food Lion(4), Rentown 25,000 Fee
Statesboro, GA
Stone East Plaza 1983 100% 45,259 45,259 96% Food Lion(4) None Fee
Kingsport, TN
Strawbridge Market 1997 100% 43,764 43,764 100% Regal Cinema None Fee
Place
Virginia Beach, VA
Suburban Plaza 1995 100% 128,647 126,047 96% Toys "R" Us, Barnes & None Fee
Knoxville, TN Noble
34th St. Crossing 1989 100% 51,120 51,120 100% Food Lion(7), Family None Fee
St. Petersburg, FL Dollar
Uvalde Plaza 1987/1992 75% 111,160 34,000 100% Wal*Mart, Beall's None Fee
Uvalde, TX
Valley Commons 1988/1994 100% 45,580 45,580 100% Food Lion None Fee
Salem, VA
Valley Crossing 1988/1991 100% 186,077 186,077 100% Goody's, TJ Maxx, None Fee
Hickory, NC Office Depot, Rack Room
Shoes, Circuit City,
Factory Card Outlet
The Village at Wexford 1990 100% 72,450 72,450 100% Tractor Supply None Fee
Cadillac, MI Company(17)
Village Square 1990/1993 100% 122,294 27,050 100% Wal*Mart, Fashion Bug None Fee
Houghton Lake, MI
Willowbrook Plaza 1999 100% 361,072 291,515 90% Home Depot, Linens 'N None Fee
Houston, TX Things, AMC Theatre
Willow Springs Plaza 1991/1994 100% 224,910 130,753 100% Home Depot, Office None Fee
Nashua, NH Max, JCPenney Home
----------- ----------- -----------
Total Community Centers 8,357,207 5,472,017 94%
=========== =========== ===========
29
|
CBL & Associates Poperties, Inc. - Form 10K
(1) Includes the total square footage of the Anchors (whether owned by others or leased by the Anchor) and shops. Does not
include future expansion areas.
(2) Includes leasable Anchors.
(3) Includes tenants paying rent on executed leases on December 31, 2001. Calculation includes leased Anchors.
(4) Tenant has closed its store but is continuing to meet its financial obligation and is sub-leasing the space.
(5) Ground Lease term extends to 2051 including four 10-year extensions. Lessee has an option to purchase and a right of first
refusal to purchase the fee.
(6) Ground Lease term extends to 2049 including three 10-year extensions. Lessor receives a share of percentage rents during
initial term and extensions. Lessee has an option to purchase and a right of first refusal to purchase the fee.
(7) Represents a tenant which has closed its store but is continuing to meet its financial obligations under its lease.
The vacancy at Keystone Crossing occurred after December 31, 2001.
(8) Ground Lease term extends to 2055 including two 20-year extensions. During extension periods, lessor receives a share of
percentage rents. Lessee has a right of first refusal to purchase the fee. Lessor receives a share of sale proceeds upon sale
of the center to a third party only if sale occurs while fee is subordinated to a mortgage.
(9) Ground lease extends to 2076 including 12 five year options. Lessor receives no additional rent.
(10) Ground lease for an out-parcel extends to 2046 including 4 ten year options. Lessor receives 20% of percentage rentals.
(11) Ground Lease term extends to 2049 including three 10-year extensions. Lessor receives a share of percentage rents during
initial term and extensions. Lessee has a right of first refusal to purchase the fee.
(12) Represents a Food World which has closed its store but is continuing to meet its financial obligations under its lease and
is sub-leasing the space.
(13) Signal Hills Village is part of Signal Hills Crossing, a Property on which the Company holds a Mortgage.
(14) Ground Lease term extends to 2084. Rent for entire term has been prepaid. Lessee has an option to purchase the fee under
certain circumstances.
(15) Ground Lease term extends to 2055 including one 20-year extension. Commencing in 2005, rental will be the greater of base
rent or a share of the revenue from the center. Lessee has a right of first refusal to purchase the fee.
(16) Ground Lease term extends to 2048 including three 10-year extensions. Lessor receives a share of percentage rents during
initial term and extensions. Lessee has a right of first refusal to purchase the fee.
(17) Tractor Supply Company has an option to purchase its 56,850 square foot store commencing in 1996 for a price based upon
capitalizing minimum annual rent being paid at the time of exercise at a rate of 8.33%.
(18) Lionshead opened in 1980 and was acquired by the Company in July 1998 and was expanded in 2000.
(19) Sold in January 2002.
|
Mortgages
The Company owns six Mortgages which were granted prior to the Offering and two granted since in connection with sales by CBL of properties which it had previously developed.
The Company holds fee mortgages on eight community centers, which mortgages had, as of December 31, 2001, an aggregate outstanding principal balance of $8.1 million. Such mortgages entitle the Company to receive substantially all of such properties' current cash flow in the form of periodic debt service payments. The encumbered properties all opened between 1981 and 1990 and have two Anchor vacancies.
In the years ended December 31, 1999, 2000, and 2001, revenues from the Mortgages represented less than 0.5% of total revenues from the Company's Properties.
CBL & Associates Poperties, Inc. - Form 10K
The following table sets forth certain additional information regarding the Mortgages as of December 31, 2001.
Mortgage Information Center Information
----------------------------------------------- --------------------------------------------------------
Annual Principal Annual Total Percentage Number
Name of Center/ Interest Balance as Debt Maturity Total Leasable GLA of
Location Rate of 12/31/01 Service Date GLA(1) GLA Leased(2) Anchors Stores
--------------------- ---------- ------------- --------- ---------- -------- --------- ----------- --------------- -------
BI-LO South 9.50% $999 $264 Aug-2006 56,557 56,557 100% BI-LO 8
Cleveland, TN
Gaston Square 7.50 2,805 190 Jun-2019 41,640 41,640 100 Food Lion 4
Gastonia, NC Family Dollar
Inlet Crossing 7.50 1,832 287 Jun-2019 55,374 55,374 96 Food Lion, 12
Murrells Inlety, SC Dollar General
Olde Brainerd Centre 9.50 14 35 Dec-2006 57,293 57,293 100 Bi-Lo 9
Chattanooga, TN
Signal Hills Crossing 7.50 642 66 Jun-2019 44,220 44,220 81 Food Lion(3) 6
Statesville, NC
Soddy Daisy Plaza 9.50 56 48 Dec-2006 55,280 55,280 100 Bi-Lo, CVS 5
Soddy Daisy, TN
Park Village 8.25 1,270 849(4) Aug-2010 48,505 48,505 100 Food Lion, 12
Lakeland, FL Family Dollar
University Crossing 8.75 507 79 Feb-2010 101,964 20,053 - -
Pueblo, CO
------------- --------- -------- --------- -------- -------
Total $8,125 $1,818 460,833 378,922 100% 56
============= ========= ======== ========= ======== =======
(1) Includes Anchors.
(2) Includes all leases executed on or before December 31, 2001. Leased GLA includes non-Anchor GLA and leased Anchor GLA.
(3) Tenant has closed but is continuing to meet its financial obligation.
(4) Purchaser paid down $770 in January 2002. The remaining balance will be amortized over 9 years with annual debt service
of $79.
|
Office Building
The Company owns a 95% interest in a 49,082 square foot office building in Chattanooga, Tennessee in which the Company's headquarters were located. The Company during 2001 occupied 34,470 square feet or 70% of the total square footage of the Office Building. At year end the Company relocated its headquarters to a new Office Building, CBL Center, that the Company owns 92% of. CBL Center is a 128,000 square foot building, in which the Company now occupies 75,000 square feet. The Company has listed the former headquarters Office Building, One Park Place, for sale.
CBL & Associates Poperties, Inc. - Form 10K
Top 25 Tenants
The following table sets forth the Company's top 25 tenants based upon a percentage of total revenues from the Company's Properties in 2001.
% OF NUMBER OF
RANK TENANT REVENUES STORES SQUARE FEET
----------- -------------------------------------- ----------- ----------- -------------
1 Limited, Inc., The 4.57% 103 869,399
2 Gap Inc., The 2.66% 67 629,567
3 Footlocker, Inc. 2.61% 117 402,721
4 JCPenney Co. Inc 1.95% 54 5,286,538
5 Intimate Brands 1.83% 86 352,185
6 American Eagle Outfitters 1.22% 39 186,437
7 Charming Shoppes, Inc. 1.22% 41 275,437
8 Abercrombie & Fitch 1.20% 25 191,924
9 Transworld Entertainment 1.20% 42 197,910
10 Sterling 1.10% 48 69,527
11 Food Lion 1.06% 25 915,220
12 Regis Corporation, The 0.95% 106 118,844
13 Sears, Roebuck and Co. 0.95% 53 5,722,840
14 Consolidated Stores Corporation 0.94% 44 167,757
15 Finish Line, Inc., The 0.94% 30 160,953
16 Barnes & Noble 0.92% 37 243,646
17 Zale Corporation 0.89% 46 70,343
18 Shoe Show, The 0.87% 38 185,995
19 Claire's Boutiques, Inc. 0.87% 91 98,816
20 Goody's Family Clothing, Inc. 0.85% 17 590,494
21 Footstar 0.84% 27 136,563
22 Lenscrafters, Inc. 0.80% 29 137,206
23 Tandy Corporation 0.73% 55 142,638
24 The Buckle 0.71% 27 127,899
25 Saks Incorporated 0.71% 30 3,483,694
|
Mortgage Debt and Ratio to Total Market Capitalization
As of December 31, 2001, the Operating Partnership's proportionate share of indebtedness of all Properties (whether or not consolidated for financial statement reporting purposes, including the Construction Properties) was approximately $2.393 billion. The Company's total market capitalization (the aggregate market value of the Company's outstanding shares of Common and Preferred Stock, assuming the full exchange of the limited partnership interests in the Operating Partnership for Common Stock, plus the $2.393 billion total debt of the Operating Partnership) as of December 31, 2001 was $4.04 billion. Accordingly, the Company's debt to total market capitalization ratio as of December 31, 2001 was 59.2%. The debt to total market capitalization ratio, which is based upon the Company's proportionate share of consolidated and unconsolidated indebtedness and market values of equity, differs from debt-to-book capitalization ratios, which are based upon consolidated indebtedness and book values.
The following table sets forth certain information regarding the mortgages and secured lines of credit encumbering the Properties.
CBL & Associates Poperties, Inc. - Form 10K
MORTGAGE DEBT
(Dollars in thousands)
Mortgage Loans Outstanding in
Whole or in Part at December 31, 2001
Earliest
Ownership Estimated Date at
Share of Principal Annual, Balloon Which
Company and Annual Balance as all Annual Payment Loans Can
Center Pledged as Operating Interest of Interest Debt Due on Be
Collateral Partnership Rate 12/31/01(1) Payment(2) Service Maturity Date Maturity Prepaid(3)
--------------------- ------------ ----------- ----------- ----------- ---------- ------------- ---------- ------------
MALLS:
Arbor Place 100% 3.060%(4) $ 99,300 $ 3,039 $ 3,039 Jun-2002 $ 99,300 --
Asheville Mall 100% 6.980% 71,073 4,961 5,677 Sep-2011 61,229 Oct-2004(17)
Bonita Lakes Mall 100% 6.820% 28,374 1,935 2,503 Oct-2009 22,539 Oct-2003(5)
Brookfield Square 100% 7.498% 75,160 5,635 4,855 May-2005 68,259 Jan-2004(6)
Burnsville Center 100% 8.000% 73,182 5,855 6,900 Aug-2010 60,341 Sep-2005(5)
Cary Towne Center 100% 8.640% 62,041 5,360 5,841 Dec-2003 61,042 --
Cherryvale Mall 100% 7.375% 48,093 3,547 4,648 Jul-2006 41,980 --(5)
Citadel Mall 100% 7.390% 33,276 2,459 3,162 May-2007 28,700 --(8)
Citadel Mall 100% 4.040%(4) 8,500 343 689 Jan-2003 8,154 --
College Square 100% 6.750% 13,971 943 1,548 Sep-2013 -- --(9)
Columbia Mall 48.0% 3.230%(4) 36,394 1,176 3,359 Jun-2003 31,355 --
Coolsprings Galleria 100% 8.290% 63,327 5,250 6,636 Oct-2010 47,827 Oct-2010(10)
Eastgate Mall 100% 3.426%(4) 42,000 1,439 1,814 Dec-2003 42,000 --
East Towne Mall 48.0% 8.010% 29,070 2,329 2,920 Jan-2007 41,125 --(11)
Fashion Square 100% 3.540%(4) 59,430 2,104 2,104 Sep-2003 59,430 --
Fayette Mall 100% 7.000% 97,594 6,832 7,824 Jul-2011 84,096 Jul-2006(13)
Governor's Square 47.5% 8.230% 33,880 2,788 3,476 Sep-2016 14,454 Sep-2001(14)
Hamilton Place 90% 7.000% 68,761 4,813 6,361 Mar-2007 59,505 --(5)
Hanes Mall 100% 7.310% 116,291 8,501 10,726 Jul-2008 97,551 --(7)
Hickory Hollow Mall 100% 6.770% 92,447 6,259 7,723 Aug-2008 80,847 --
Janesville Mall 100% 8.375% 15,473 1,296 1,857 Apr-2016 -- --
Jefferson Mall 100% 3.460%(4) 40,000 1,384 1,384 Sep-2003 40,000 --
Kentucky Oaks Mall 48.0% 9.000% 33,434 3,009 3,573 Jun-2007 35,359 --(14)
Madison Square 100% 9.25% 47,099 4,357 4,936 Mar-2002 46,482 Feb-1997(15)
Meridian Mall 100% 3.235%(4) 80,000 2,588 2,588 Aug-2003 80,000 --
Midland Mall 100% 3.620%(4) 35,000 1,267 1,267 Jun-2003 35,000 --
Northwoods Mall 100% 4.080%(4) 56,280 2,296 2,296 Sep-2003 56,280 --
Oak Hollow Mall 75% 7.310% 48,463 3,543 4,709 Feb-2008 39,567 Feb-2002(5)
Old Hickory Mall 100% 8.250% 21,731 1,793 2,290 Jul-2002 21,478 --(17)
Parkdale Mall 100% 3.230%(4) 45,000 1,454 1,454 Jun-2003 45,000 --
Plaza del Sol 50% 9.150% 4,749 435 796 Nov-2010 -- Sep-2001(5)
Rivergate Mall 100% 6.770% 74,715 5,058 6,241 Aug-2008 65,479 --
Springdale Mall 100% 3.081% 24,466 754 1,164 Nov-2002 24,125 --
St. Clair Square 100% 7.000% 71,753 5,023 6,361 Apr-2009 58,975 --(18)
Stroud Mall 100% 8.420% 32,290 2,719 2,977 Dec 2010 29,385 --
The Lakes Mall 90% 3.150%(4) 31,555 994 994 Mar-2002 31,555 --
Turtle Creek Mall 100% 7.400% 32,316 2,391 2,966 Mar-2006 29,522 Mar-1999(5)
Walnut Square 100% 10.125% 656 66 144 Feb-2008 -- --(19)
Wausau Center 100% 6.700% 14,228 953 1,238 Dec-2010 10,725 --(5)
WestGate Mall 100% 6.950% 45,101 3,135 4,819 Feb-2002 45,221 Feb-2002(20)
West Towne Mall 48.0% 8.010% 44,943 3,600 7,434 Jan-2007 39,342 --(11)
York Galleria 100% 8.340% 51,656 4,308 4,727 Dec-2010 46,932 --
---------
Malls Subtotal: 2,003,072
ASSOCIATED CENTERS:
Bonita Lakes 100% 6.820% 8,910 608 784 Oct-2009 7,062 Oct-2003(5)
Crossing
Courtyard At Hickory 100% 6.770% 4,304 291 359 Aug-2008 3,764 --
Hollow
Gunbarrel Pointe 100% 3.438%(4) 11,975 412 412 Apr-2002 11,975 --
Hamilton Corner 90% 10.125% 2,895 293 471 Aug-2011 -- --(21)
33
|
CBL & Associates Poperties, Inc. - Form 10K
Madison Plaza 100% 10.125% 1,041 105 537 Feb-2004 -- --(22)
The Landing At Arbor 100% 3.060%(4) 11,162 342 342 Jun-2002 11,162 --
The Terrace 92% 7.300% 9,841 718 1,047 Sep-2002 9,596 --(23)
Village at Rivergate 100% 6.770% 3,529 239 295 Aug-2008 3,086 --
Westgate Crossing 100% 8.420% 9,810 826 907 Jul-2010 8,954 Jul-2010
--------
Associated Centers Subtotal: 63,467
COMMUNITY CENTERS:
BJ's Plaza 100% 10.400% 2,952 307 476 Dec-2011 -- --(23)
Briarcliff Square 100% 10.375% 1,489 154 226 Feb-2013 (24) -- Feb-1998(25)
Cedar Bluff Crossing 100% 10.625% 1,014 108 230 Aug-2007 -- Jan-2008(26)
Chesterfield 100% 3.124%(4) 8,212 258 734 Dec-2002 7,735 --
Crossing
Coastal Way 100% 3.394%(4) 9,687 329 329 Dec-2002 9,687 --
Colleton Square (30( 100% 9.375% 848 80 143 Aug-2010 (27) -- Aug-1998(21)
Collins Park Commons 100% 10.250% 678 69 202 Oct-2010 -- Sept-2000(27)
Cortlandt Town 100% 6.900% 50,964 3,517 4,539 Aug-2008 42,342 Aug-2003(5)
Center
Cosby Station 100% 8.500% 3,800 323 490 Sep-2014 -- Sept-2001(28)
Greenport Towne 100% 9.000% 4,004 360 529 Sep-2014 -- --(29)
Center
Henderson Square 100% 7.500% 6,026 452 750 Apr-2014 -- May-2005
Longview Crossing 100% 10.250% 379 39 128 Aug-2010 -- Aug-2000(27)
North Haven Crossing 100% 9.550% 6,132 586 1,225 Oct-2008 202 Oct-1998(31)
Northwoods Plaza 100% 9.750% 1,119 109 171 Jun-2012 -- --(32)
Perimeter Place 100% 10.625% 1,240 132 278 Jan-2008 -- Jan-2008(26)
Seacoast Shopping 100% 9.750% 5,254 512 721 Sep-2002 5,110 Oct-1997(33)
Center
Shenandoah Crossing 100% 10.250% 476 49 83 Aug-2010 -- Aug-2000(27)
Springhurst Towne 100% 6.650% 21,830 1,452 2,179 Aug-2018 19,714 Aug-2004(34)
Center
Suburban Plaza 100% 7.875% 8,342 657 870 Nov-2004 6,042 --(35)
34th St. Crossing(37) 100% 10.625% 1,354 144 234 Dec-2010 -- Dec-2000(36)
Uvalde Plaza 75% 10.625% 595 63 133 Feb-2008 -- Feb-2008(26)
Valley Commons 100% 10.250% 824 84 142 Oct-2010 -- Oct-2000(27)
Willowbrook Plaza 100% 4.080%(4) 33,065 1,349 2,528 Feb-2002 33,063 --
Willow Springs Plaza 100% 9.750% 4,056 395 934 Aug-2007 -- Aug-1997(33)
----------
Community Centers Subtotal: 174,378
CONSTRUCTION PROPERTIES:
CBL Center 100% 3.669%(4) 14,847 545 545 Apr-2004 14,847 --
Parkway Place 50% 3.342%(4) 27,509 1,365 911 Dec-2003 27,509 --
Meridian Mall Exp. 100% 3.025%(4) 25,706 778 778 Aug-2003 25,706 --
----------
Construction Properties Subtotal: 68,062
Other: Park Place 95% 10.000% 571 57 459 Apr-2003 -- --(5)
Other 75% 4.750%(4) 116 6 6 Jun-2004 -- --
Credit Lines 100% 3.2000%(38) 216,265 6,920 6,920 Various 216,265 --
----------
Other Subtotal: 216,952
Total: 2,525,931
==========
Operating Partnership's Share of Total:(39) $2,392,600
==========
34
|
CBL & Associates Poperties, Inc. - Form 10K
(1) The amount listed includes 100% of the loan amount even though the Company and the Operating Partnership may own less than
100% of the property.
(2) Interest has been computed by multiplying the annual interest rate by the outstanding principal balance as of December 31,
2001.
(3) Unless otherwise noted, loans are prepayable at any time.
(4) The interest rate is floating at various spreads over LIBOR priced at the rates in effect at December 31, 2001.
(5) Prepayment premium is the greater of 1% or yield maintenance.
(6) Prepayment penalty is based on yield maintenance. No prepayment before January 2004 on $30 million of the loan balance.
(7) Prepayment premium is 3%, decreasing to1% per year on December 1, 2002 to May 30, 2003. After 60 days (August 1, 2003)
there is no prepayment penalty. Prepayment penalty is based on yield maintenance.
(8) Prepayment premium is based on yield maintenance; there is no loan prepayment premium during the last 180 days of the loan
term.
(9) Prepayment premium is greater of 1% or modified yield maintenance.
(10) Prepayment premium is the greater of 1% or yield maintenance after October 1, 2000.
(11) Prepayment premium is the greater of 1% or yield maintenance. No prepayment before January 2007.
(12) This loan can be extended for 2 one year periods, the extension fee is 1/2 point for each extension.
(13) Prepayment penalty is based on yield maintenance. No prepayment before July 2006.
(14) Prepayment premium is based on the greater of yield maintenance or 2%.
(15) Prepayment premium is based on yield maintenance; there is no prepayment premium after October 1, 2001.
(16) The loan is secured by a first mortgage lien on the land and improvements comprising the Goody's anchor store and no other
property.
(17) Prepayment premium is the greater of 1% or yield maintenance; there is no loan prepayment premium during the last 180 days
of the term.
(18) Prepayment premium is the greater of 1% or yield maintenance, none last 120 days.
(19) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium after November 1, 2007.
(20) Loan is closed to prepayment for the term. Lender shall adjust the interest rate every 5th year of the loan. If borrower
does not except the new rate loan may be prepaid at that time without prepayment penalty.
(21) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium during the last 120 days of
the loan term.
(22) Prepayment premium is the greater of 1% or yield maintenance; there is no prepayment premium after November 1, 2003.
(23) Prepayment penalty is based on yield maintenance.
(24) Lender has option to accelerate loan between March 1, 2001 and February 28, 2002; March 1, 2006 and February 28, 2007; and
March 1, 2011 and February 28, 2012.
(25) Prepayment premium is 7%, decreasing by 1% per year to a minimum of 3%.
(26) Loan may not be prepaid.
(27) Prepayment premium is 5%, decreasing by 1% per year to a minimum of 2% there is no prepayment premium during the last 120
days of the loan term.
(28) Prepayment premium of 7% decreasing by 1% per year to a minimum of 2%; there is no prepayment premium during the last six
months of the loan term.
(29) Prepayment premium is the greater of 10% or 1/12 of the annual yield difference before October 2014. Thereafter the
prepayment premium is 1%.
(30) Lender may accelerate loan on July 1, 2007 unless Food Lion exercises an extension option.
(31) Prepayment premium is the greater of 2% or yield maintenance before October, 1998, afterwards it is the greater of 1% or
yield maintenance.
(32) Prepayment premium is based on yield maintenance; there is no loan prepayment premium during the last 120 days of the loan
term.
(33) Prepayment premium is the greater of 1% or yield maintenance; there is no loan prepayment premium during the last 90 days
of the term.
(34) The loan has a rate reset option in August of 2004, 2009 and 2014. The loan can be prepaid in these years if the Company
elects not to accept the rate reset. The prepayment premium is the greater of 1% or yield maintenance.
(35) Prepayments penalty is 7.875% until November 2001 then yield maintenance, none last 120 days.
(36) Prepayment premium is 5%, decreasing by 1% per year to a minimum of 2%. There is no loan prepayment premium during the
last 90 days of the loan term.
(37) The note is secured by rent payable by the Food Lion Anchor store.
(38) Interest rates on the credit lines are at various spreads over LIBOR whose weighted average interest rate is 7.69% with
various maturities through 2004.
(39) Represents non-recourse indebtedness on Properties and reflects the less than 100% ownership of the Company and the
Operating Partnership with respect to certain Properties subject to such indebtedness. The reconciliation to the Company's
share is (in thousands): Total debt $2,525,931 less equity properties $209,978, less minority partners share of debt
$24,618, and include the Company's share of equity properties $101,265 yields total obligations.
|
CBL & Associates Poperties, Inc. - Form 10K
ITEM 3. LEGAL PROCEEDINGS.
The Company and the Operating Partnership are not currently involved in any material litigation nor, to management's knowledge, is any material litigation currently threatened against the Company, the Operating Partnership, the Property Partnerships or the Properties, other than litigation arising in the ordinary course of business, most of which is expected to be covered under liability insurance policies held by the Company or the Operating Partnership.
NONE
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS.
(a) Market Information
The principal United States market in which the Common Stock is traded is the New York Stock Exchange.
The following table sets forth the high and low sales prices for the Common Stock for each quarter of the Company's two most recent fiscal years.
2001 Quarter Ended High Low ------------------------- ----------- ------------ March 31 $27.6200 $25.1250 June 30 31.0100 26.5500 September 30 31.5000 26.0400 December 31 31.8500 26.8500 |
2000 Quarter Ended High Low ------------------------- ----------- ------------ March 31 $22.8750 $20.1250 June 30 25.6875 20.5625 September 30 25.8750 23.8750 December 31 25.3750 22.5000 |
(b) Holders
The approximate number of shareholders of record of the Common Stock was 603 as of March 1, 2002.
(c) Dividends
The following table sets forth the frequency and amounts of dividends declared and paid for each quarter of the Company's two most recent fiscal years.
Quarter Ended 2001 2000 ------------------------- ----------- ------------ March 31 $0.5325 $0.5100 June 30 0.5325 0.5100 September 30 0.5325 0.5100 December 31 0.5325 0.5100 |
Future dividend distributions are subject to the Company's actual results of operations, economic conditions and such other factors as the Board of Directors of the Company deems relevant. The Company's actual results of operations will be affected by a number of factors, including the revenues received from the Properties, the operating expenses of the Company, the Operating Partnership and the Property Partnerships, interest expense, the ability of the anchors and tenants at the Properties to meet their obligations and unanticipated capital expenditures.
ITEM 6. SELECTED FINANCIAL DATA.
CBL & Associates Properties, Inc.
Selected Financial Data
(In thousands, except per share data)
Year Ended December 31,
-------------------------------------------------------------------------
2001 2000 1999 1998 1997
--------- --------- --------- --------- ---------
TOTAL REVENUES $ 544,375 $ 356,488 $ 317,603 $ 254,640 $ 177,604
TOTAL EXPENSES 436,372 280,027 250,139 203,001 135,200
--------- --------- --------- --------- ---------
INCOME FROM OPERATIONS 108,003 76,461 67,464 51,639 42,404
GAIN ON SALES OF REAL ESTATE ASSETS 10,649 15,989 8,357 4,183 6,040
EQUITY IN EARNINGS OF
UNCONSOLIDATED AFFILIATES 7,155 3,684 3,263 2,379 1,916
MINORITY INTEREST IN EARNINGS
Operating Partnership (49,643) (28,507) 23,264) (16,258) (13,819)
Shopping Center Properties (1,698) (1,538) (1,225) (645) (508)
--------- --------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY ITEM 74,466 66,089 54,595 41,298 36,033
EXTRAORDINARY LOSS ON EXTINGUISHMENT OF DEBT (13,558) (367) - (799) (1,092)
--------- --------- --------- --------- ---------
NET INCOME 60,908 65,722 54,595 40,499 34,941
PREFERRED DIVIDENDS (6,468) (6,468) (6,468) (3,234) -
--------- --------- --------- --------- ---------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 54,440 $ 59,254 $ 48,127 $ 37,265 $ 34,941
========== ========= ========== ========= =========
BASIC EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 2.68 $ 2.40 $ 1.95 $ 1.58 $ 1.51
Net income $ 2.15 $ 2.38 $ 1.95 $ 1.55 $ 1.46
========= ======== ========= ======== ========
Weighted average shares outstanding 25,358 24,881 24,647 24,079 23,895
DILUTED EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 2.63 $ 2.38 $ 1.94 $ 1.56 $ 1.49
Net income $ 2.11 $ 2.37 $ 1.94 $ 1.53 $ 1.45
========= ======== ========= ======== ========
Weighted average shares and potential dilutive
common shares outstanding 25,833 25,021 24,834 24,340 24,151
Dividends declared per common share $2.13 $2.04 $1.95 $1.86 $1.77
Year Ended December 31,
-------------------------------------------------------------------------
2001 2000 1999 1998 1997
--------- --------- --------- --------- ---------
BALANCE SHEET DATA:
Net investment in real estate assets $3,201,622 $2,040,614 $1,960,554 $1,805,788 $1,142,324
Total assets 3,372,851 2,115,565 2,018,838 1,855,347 1,245,025
Total debt 2,315,955 1,424,337 1,360,753 1,208,204 741,413
Minority interest 431,101 174,665 170,750 168,040 123,897
Shareholder equity 522,088 434,825 419,887 415,782 330,853
OTHER DATA:
Cash flow provided by (used in):
Operating activities $169,125 $117,814 $114,196 $89,123 $60,852
Investing activities (207,122) (127,073) (212,141) (571,332) (245,884)
Financing activities 42,950 7,369 99,192 484,912 183,858
Funds from operations (FFO) (1)
of the Operating Partnership 194,001 132,034 116,273 93,492 76,184
FFO applicable to the Company 100,773 89,156 78,304 64,941 54,597
(1) Please refer to Management Discussion and Analysis of Financial Condition
and Results of Operations for the definition of FFO. FFO does not represent cash
flow from operations as defined by accounting principals generally accepted in
the United States ("GAAP") and is not necessarily indicative of the cash
available to fund all cash requirements.
|
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
ITEM 7. 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 may contain "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, and elsewhere in this Annual Report on Form 10-K for a discussion of such risks and uncertainties.
GENERAL BACKGROUND
On November 3, 1993, CBL & Associates Properties, Inc. (the "Company") completed an initial public offering of 15,400,000 shares of common stock priced at $19.50 per share (the "Offerings"). In connection with the Offerings, CBL & Associates, Inc. and its affiliates contributed their interests in properties to CBL & Associates Limited Partnership (the "Operating Partnership"). The Company is the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc., which are the sole general partner and majority owner, respectively, of the Operating Partnership. As a result, the CBL & Associates Properties, Inc. Consolidated Financial Statements and Notes thereto reflect the consolidated financial results of the Operating Partnership, which includes at December 31, 2001, the operations of a portfolio of properties consisting of 45 regional malls, 16 associated centers, two power centers, 66 community centers, two office buildings, joint venture investments in seven regional malls and two associated centers, and income from eight mortgages (the"Properties"). The Operating Partnership currently has under construction one mall and one mall expansion, and owns options to acquire certain shopping center development sites. The consolidated financial statements also include the results of CBL & Associates Management, Inc. (the "Management Company").
The Company classifies its regional malls into three categories - stabilized malls which have completed their initial lease-up; new malls which are in their initial lease-up phase; and newly acquired malls representing the 21 mall portfolio acquired on January 31, 2001. The new mall category is presently comprised of Springdale Mall in Mobile, Alabama, which was acquired in September 1997 and is being redeveloped and retenanted; Parkway Place in Huntsville, Alabama, which was acquired in December 1998 and is currently being redeveloped; Arbor Place Mall in Atlanta (Douglasville), Georgia, which opened in October 1999 and The Lakes Mall in Muskegon, Michigan which opened in August 2001.
On January 31, 2001, the Company completed the first stage of the acquisition of The Richard E. Jacobs Group's interests in 21 malls and two associated centers for total consideration of approximately $1.26 billion, including the acquisition of minority interests in certain properties. The purchase price is comprised of $124.5 million in cash, including closing costs of approximately $12 million; the assumption of $745.5 million in primarily non-recourse mortgage debt; and the issuance of 12,056,692 special common units of the Operating Partnership a value of $27.25 per unit. The cash portion was funded from a new $212 million unsecured credit facility provided by a consortium of banks led by Wells Fargo. The Company will close on the second stage in 2002, which will consist of cash of $0.3 million, the assumption of $25.7 million in non-recourse mortgage debt, and the issuance of 499,733 special common units of the Operating Partnership. In the second stage closing the Company will acquire additional interests in properties accounted for under the equity method of accounting. In a separate transaction, the Company issued an additional 603,344 special common units of the Operating Partnership to purchase the remaining 50% interest in Madison Square Mall in Huntsville, Alabama that it did not already own. In June 2001 the Company issued 31,008 common units of the Operating Partnership to purchase the 25% interest in Madison Plaza in Huntsville, Alabama that it did not already own.
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Sales
Mall shop sales, for those tenants who have reported, in the 48 stabilized
malls in the Company's portfolio, decreased by 1.5% on a comparable per square
foot basis as shown below:
Year Ended December 31,
2001 2000
------------------------------
Sales per square foot $297.70 $302.30
|
Total sales volume in the mall portfolio, including new malls, decreased 0.5% to $2.901 billion in 2001 from $2.915 billion in 2000.
Occupancy costs as a percentage of sales for the years ended December 31, 2001, 2000 and 1999, for the stabilized malls (excluding the mall acquired in 1999 from that year) were 11.3%, 11.9% and 11.5%, respectively.
Occupancy
Occupancy for the Company's overall portfolio by asset category is as follows:
December 31,
-----------------------------------
2001 2000
------------- -------------
Total Combined Occupancy: 93.8% 95.7%
Core Portfolio:
Total portfolio occupancy 95.0% 95.7%
Stabilized Malls 94.1% 94.5%
New Malls * 89.1% 90.4%
Total Malls 93.6% 94.1%
Associated Centers 95.6% 94.9%
Community Centers 97.0% 97.8%
Newly-Acquired Portfolio:
Malls (21) 90.4% --
Associated Centers (2) 99.5% --
* Excludes Parkway Place which is under redevelopment.
|
Average Base Rents
Average base rents for the Company's three portfolio categories was as
follows:
At December 31,
--------------------------------------------------------------
Percentage
2001 2000 (Decrease)Increase
--------------------------------------------------------------
Stabilized and New Malls $22.49 $21.57
Newly Acquired Malls 23.49 --
Malls * 22.91 21.57 6.2%
Associated Centers 9.73 9.88 (1.5)
Community Centers 9.43 8.85 6.6
* Excludes Parkway Place which is under redevelopment.
|
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
Lease Rollovers
For spaces previously occupied, the Company achieved the following results from rollover leasing for the year ended December 31, 2001, over and above the base and percentage rent paid by the previous tenant:
Per Square Per Square
Foot Rent Foot Rent Percentage
Prior Lease(1) New Lease(2) Increase
---------------------------------------------------------
Malls $24.10 $26.52 10.0%
Associated Centers 13.99 10.98 (18.3)
Community Centers 10.95 11.69 6.8
(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.
|
In 2001 and 2000, revenues from the Malls represented 84.7% and 77.3%, respectively, of total revenues from consolidated and unconsolidated properties; revenues from Associated Centers represented 2.6% and 4.1%, respectively; revenues from Community Centers represented 11.7% and 17.5%, respectively; and revenues from Mortgages and the Office Building represented 1.0% and 1.1%, respectively. 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 entire year.
COMPARISON OF RESULTS OF OPERATIONS FOR 2001 TO THE RESULTS OF OPERATIONS FOR 2000
Total revenues in 2001 increased by $187.9 million, or 52.7%, to $544.4 million compared with $356.5 million in 2000. Of this increase, minimum rents increased by $126.8 million, or 56.3%, to $352.3 million compared with $225.5 million in 2000; percentage rents increased by $0.9 million, or 10.4%, to $9.7 million compared with $8.8 million in 2000; other rents increased by $4.4 million, or 69.9%, to $10.6 million compared with $6.2 million in 2000; and tenant reimbursements increased by $55.1 million, or 51.6%, to $161.8 million compared with $106.8 million in 2000.
Approximately $161.5 million of the increase in revenues resulted from operations at the eighteen new centers, which were acquired on January 31, 2001 from The Richard E. Jacobs Group and are included in the consolidated financial statements. These properties are those properties with a 50% or greater ownership by the Company described in the Development, Expansions, and Acquisitions section of this report:
Approximately $25.6 million of the increase in revenues resulted from operations at the eight new centers opened or acquired during the past twenty-four months offset by a decrease in revenues of $5.5 million from nineteen centers sold in the last twenty-four months. The eight new centers consist of:
Opening/
Project Name Location Total GLA Type of Addition Acquisition Date
------------------------------ ---------------------------- -------------- --------------------------- ------------------
Market Place Flower Mound, Texas 119,000 Acquisition March 2000
Coastal Way Spring Hill, Florida 197,000 New Development August 2000
Chesterfield Crossing Richmond, Virginia 421,000 New Development October 2000
Gunbarrel Pointe Chattanooga, Tennessee 282,000 New Development October 2000
Madison Square Mall Huntsville, Alabama 934,000 Acquisition of 50% January 2001
interest
Willowbrook Plaza Houston, Texas 388,000 Acquisition February 2001
Creekwood Crossing Bradenton, Florida 404,000 New Development April 2001
The Lakes Mall Muskegon, Michigan 553,000 New Development August 2001
|
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
Improved occupancies, improved operations and increased rents in the Company's operating portfolio generated approximately $3.0 million of the increased revenues. Revenues from the early termination of tenant leases increased by $3.3 million to $4.1 million in 2001 compared with $0.7 million in 2002.
Management, development and leasing fees increased in 2001 by $1.0 million, or 23.4%, to $5.2 million compared with $4.2 million in 2000. Interest and other income decreased in 2001 by $0.3 million, or 5.5%, to $4.8 million compared with $5.1 million in 2000. This decrease resulted primarily from a decrease in interest income during 2001 from interest income received on proceeds from community center sales held in escrow in 2000.
Property operating expenses, including real estate taxes and maintenance and repairs, increased in 2001 by $66.5 million, or 62.2%, to $173.4 million compared with $106.9 million in 2000. This increase is primarily the result of the twenty-six new centers opened or acquired over the past twenty-four months. The Company's cost recovery ratio, not including bad debt expense of $5.9 million was 96.6% in 2001 compared with 99.9% in 2000 due to decreases in occupancy and the bankruptcy of tenants who have been temporarily replaced with tenants whose recovery clauses are more restrictive.
Depreciation and amortization increased in 2001 by $27.0 million, or 44.5%, to $87.6 million compared with $60.6 million in 2000. This increase resulted primarily from depreciation and amortization on the twenty-six new centers opened or acquired over the past twenty-four months and the Company's capital investment in operating properties.
Interest expense increased in 2001 by $59.9 million, or 63.3%, to $154.4 million compared with $94.6 million in 2000. This increase is primarily due to increased interest expense on the twenty-six new centers opened or acquired over the past twenty-four months offset by reductions in interest expense on debt retired with the proceeds from the sales of properties.
General and administrative expenses increased in 2001 by $1.0 million, or 5.9%, to $18.8 million compared with $17.8 million in 2000. This increase was due to increases in general overhead to manage 21 malls and two associated centers that were acquired in January 2001. The amount of the increase in general and administrative expense is offset by a $1.0 million reduction in the reserve for state taxes.
Gain on sales of real estate assets was $10.6 million in 2001 compared with
$16.0 million in 2000. The majority of the gain on sales in 2001 is from the
$8.4 million gain on six community centers sold in 2001. The centers sold were:
Jean Ribaut Square in Beaufort, South Carolina; Bennington Place in Roanoke,
Virginia; Sand Lake Corners in Orlando, Florida; Park Village in Lakeland,
Florida; Sutton Plaza in Mt. Olive, New Jersey and Creekwood Crossing in
Bradenton, Florida. Additional gains were generated by outparcel sales at The
Lakes Mall in Muskegon, Michigan which opened on August 15, 2001.
Equity in earnings of unconsolidated affiliates increased in 2001 by $3.5 million to $7.2 million compared with $3.7 million in 2000. This increase was the result of acquiring a non-controlling interest in four malls and one associated center in three partnerships, all accounted for under the equity method of accounting. The increase was offset by decreases as the result of the end of operations at Parkway Place Mall in Huntsville, Alabama, which is being redeveloped, and by the acquisition of the remaining interest in Madison Square Mall in Huntsville, Alabama. Since the Company now owns 100% of the interest in the Madison Square Mall, this property is now accounted for as a consolidated property rather than under the equity method. The new centers accounted for under the equity method are: Columbia Mall in Columbia, South Carolina; East Towne Mall, West Towne Mall and West Towne Crossing in Madison, Wisconsin and Kentucky Oaks Mall in Paducah, Kentucky.
COMPARISON OF RESULTS OF OPERATIONS FOR 2000 TO THE RESULTS OF OPERATIONS FOR 1999
Total revenues in 2000 increased by $38.9 million, or 12.2%, to $356.5 million compared with $317.6 million in 1999. Of this increase, minimum rents increased by $22.4 million, or 11.1%, to $225.5 million compared with $203.0 million in 1999; percentage rents increased by $1.4 million, or 19.1%, to $8.8 million compared with $7.4 million in 1999; other rents increased by $0.8 million, or 14.8%, to $6.2 million compared with $5.4 million in 1999; and tenant reimbursements increased by $17.0 million, or 18.9%, to $106.8 million compared with $89.8 million in 1999.
Approximately $22.3 million of the increase in revenues resulted from the ten new centers opened or acquired during 1999 and 2000. The centers opened or acquired in 1999 and contributing to 2000 increases are Arbor Place Mall in Atlanta (Douglasville), Georgia; The Landing at Arbor Place in Atlanta (Douglasville), Georgia; York Galleria in York, Pennsylvania; Sand Lake Corners in Orlando, Florida; and Fiddler's Run in Morganton, North Carolina, which was sold in 2000. The five new centers opened or acquired in 2000 are Marketplace at Flower Mound in Dallas (Flower Mound), Texas; Coastal Way in Spring Hill, Florida; Chesterfield Crossing in Richmond, Virginia; Gunbarrel Pointe in Chattanooga, Tennessee; and Sutton Plaza Expansion in Mt Olive, New Jersey.
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
Improved occupancies and operations and increased rents in the Company's operating portfolio generated approximately $21.8 million of the increased revenues, with the largest increases derived from Rivergate Mall in Nashville, Tennessee, and Meridian Mall in Lansing, Michigan. These increases were offset by a decrease in revenues of $2.2 million from 13 community centers sold in 2000 and a decrease of $3.1 million in management and development fees relating to a one-time fee earned in the Company's co-development program in 1999.
Management, development and leasing fees decreased in 2000 by $3.6 million, or 46.7%, to $4.2 million compared with $7.8 million in 1999. Most of the decrease was due to a one-time fee of $3.1 million earned in the co-development program in 1999. The balance of the decrease was due to the reduction in continuing co-development fees. Interest and other income increased in 2000 by $0.9 million, or 21.4%, to $5.1 million compared with $4.2 million in 1999. This increase resulted primarily from other income at the two malls acquired and opened over the past twenty-four months and interest income on the proceeds from community center sales held in escrow during the year.
Property operating expenses, including real estate taxes and maintenance and repairs, increased in 2000 by $10.7 million, or 11.1%, to $106.9 million compared with $96.2 million in 1999. This increase is primarily the result of the ten new centers opened or acquired over the past twenty-four months. The Company's cost recovery ratio, which includes redistribution of utilities, increased to 99.9% in 2000 compared with 93.3% in 1999 due to increases in occupancy which occurred at the end of 1999 and continued through calendar year 2000.
Depreciation and amortization increased in 2000 by $7.1 million, or 13.2%, to $60.6 million compared with $53.5 million in 1999. This increase resulted primarily from depreciation and amortization on the ten new centers opened or acquired over the past twenty-four months and the Company's capital investment in operating properties.
Interest expense increased in 2000 by $12.1 million, or 14.7%, to $94.6 million compared with $82.5 million in 1999. This increase is primarily due to increased interest expense on the ten new centers opened or acquired over the past twenty-four months offset by reductions in interest expense on debt retired with the proceeds from the sales of properties.
General and administrative expenses increased in 2000 by $1.6 million, or 9.6%, to $17.8 million compared with $16.2 million in 1999. A portion of this increase was due to increases in general overhead in preparation to assume management of The Richard E. Jacobs Group's interests in 21 malls and two associated centers that were subsequently acquired in January 2001.
Gain on sales of real estate assets was $16.0 million in 2000 compared with $8.4 million in 1999. The majority of the gain in 2000 is from the $10.5 million gain on 13 community centers sold in 2000. The centers sold were: Centerview Plaza in China Grove, North Carolina; Clark's Pond in South Portland, Maine; Dorchester Crossing in Charleston, South Carolina; Fiddler's Run in Morganton, North Carolina; Genesis Square in Crossville, Tennessee; Hollins Plantation in Roanoke, Virginia; Karns Korner in Knoxville, Tennessee; Lakeshore Station in Gainsville, Georgia; Sparta Crossing in Sparta, Tennessee; Sterling Creek Commons in Portsmouth, Virginia; Tyler Square in Radford, Virginia; University Crossing in Pueblo, Colorado; and Wildwood Plaza in Salem, Virginia. Additional gains were generated by outparcel and pad sales at two centers under development in 2000, Creekwood Crossing in Bradenton, Florida, and The Lakes Mall in Muskegon, Michigan, as well as outparcel sales at Sand Lake Corners in Orlando, Florida, which opened in 1999.
LIQUIDITY AND CAPITAL RESOURCES
The principal uses of the Company's liquidity and capital resources have historically been for property development, acquisitions, expansion and renovation programs, and debt repayment. To maintain its qualification as a real estate investment trust under the Internal Revenue Code, the Company currently is required to distribute to its shareholders at least 90% of its "Real Estate Investment Trust Taxable Income" as defined in the Internal Revenue Code of 1986, as amended (the "Code").
As of December 31, 2001, the Company had $47.6 million available in unfunded construction loans to be used for completion of construction projects and replenishment of working capital previously used for construction. Additionally, as of December 31, 2001, the Company had obtained revolving credit lines and term loans totaling $389.4 million, of which $171.8 million was
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
available. Also, 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 statement authorizing shares of the Company's common stock, preferred 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 available as of December 31, 2001. 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.
The Company's capital structure at December 31, 2001, 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 17.7% ownership interest in the Operating Partnership held by certain of the Company's executive and senior officers which may be exchanged for approximately 8.9 million shares of common stock. Additionally, these executive and senior officers and the Company's directors own approximately 2.0 million shares of the outstanding common stock of the Company, for a combined total interest in the Operating Partnership on December 31, 2001 of approximately 21.8%. Ownership interests issued to fund acquisitions in January 2001 may be exchanged after January 2004 for approximately 12.6 million shares of common stock which represent a 25.3% interest in the Operating Partnership. Ownership interests issued to fund acquisitions in other years and interests of former executives may be exchanged for approximately 2.9 million shares of common stock which represent a 5.9% interest in the Operating Partnership. Assuming the exchange of all limited partnership interests in the Operating Partnership for common stock, there would be approximately 50.1 million shares of common stock outstanding with a market value of approximately $1.579 billion at December 31, 2001 (based on the closing price of the Company's common stock of $31.50 per share on December 31, 2001). The Company's total market equity is $1.652 billion at December 31, 2001, including 2.9 million shares of preferred stock (based on the closing price of its preferred stock of $25.20 per share on December 31, 2001). The Company's current executive and senior officers' ownership interests had a market value of approximately $343.8 million at December 31, 2001.
Mortgage debt consists of debt on certain consolidated properties as well as debt on eight properties in which the Company owns non-controlling interests, accounted for under the equity method of accounting. At December 31, 2001, the Company's share of funded mortgage debt on its consolidated properties (adjusted for minority investors' interests in eight properties) was $1.439 billion and its pro rata share of mortgage debt on unconsolidated properties (accounted for under the equity method) was $70.0 million for total fixed-rate debt obligations of $1.509 billion with a weighted-average interest rate of 7.5%. Consolidated and unconsolidated variable-rate debt accounted for $883.9 million with a weighted-average interest rate of 4.2%. Total debt obligations amounted to $2.393 billion. Variable-rate debt accounted for approximately 36.9% of the Company's total debt and 21.9% of its total capitalization. Through the execution of interest rate swap agreements, the Company has fixed the interest rates on $220.0 million of variable-rate debt at a weighted-average interest rate of 6.4%. Of the Company's remaining variable-rate debt of $663.9 million, $67.0 million of debt is subject to variable rates on construction properties and $596.6 million of debt is subject to variable rates on operating properties. There were no fees charged to the Company related to these swap agreements. The Company's interest rate swap agreements in place at December 31, 2001, are as follows:
Swap Amount
(in millions) Fixed LIBOR Component Effective Date Expiration Date
------------------------------ ---------------------------- --------------------------- ----------------------------
10 5.737% 01/03/2001 06/01/2002
5 5.737% 01/03/2001 06/01/2002
5 5.737% 01/03/2001 06/01/2002
10 5.737% 01/03/2001 06/01/2002
20 5.737% 01/03/2001 06/01/2002
20 4.670% 03/15/2001 09/26/2002
20 4.670% 03/15/2001 09/26/2002
20 4.670% 03/15/2001 09/26/2002
10 4.670% 03/15/2001 09/26/2002
10 4.670% 03/15/2001 09/26/2002
5 4.670% 03/15/2001 09/26/2002
5 4.670% 03/15/2001 09/26/2002
80 5.830% 12/22/2000 08/30/2003
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CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
At January 1, 2001, the Company implemented Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended, ("SFAS No. 133") which establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. At January 1, 2001 the Company determined that with the exception of two swap agreements that expired during the first quarter of 2001 the Company's derivative instruments were effective and qualified for hedge accounting. The Company also determined that new swap agreements obtained in 2001 were effective and qualified for hedge accounting. The Company measured the effectiveness of these instruments in place during each quarter in the year ended December 31, 2001 and determined that the swap agreements continued to be highly effective and continued to qualify for hedge accounting. The effective swap agreements were recorded on the consolidated balance sheet at their fair values of $6.8 million in accrued liabilities and in accumulated other comprehensive loss. Over time, the unrealized gains and losses held in accumulated other comprehensive loss will be reclassified to earnings as interest expense as swap payments are made to the swap counterparties. This reclassification is consistent with the timing of when hedged items are recognized in earnings. Within the next twelve months, the Company expects to reclassify to earnings as interest expense an estimated $5.2 million of the current balance held in accumulated other comprehensive loss.
The outstanding balance of $216.3 million on the Company's credit facilities had a weighted-average interest rate of 3.2% (before applied swap agreements) at December 31, 2001. Each of the credit facilities includes covenants that require the Company to maintain minimum net worth levels, maintain interest and debt coverage ratios, maintain total obligations to capitalized value ratios, and maintain limitations on variable-rate debt. The credit facilities also require that the Company's senior management continue to consist of certain individuals and to maintain certain levels of minority ownership in the Operating Partnership. The First Tennessee Bank credit facility provides that if the Company completes an offering of its securities, not less than 75% of the net proceeds of any such offering will be applied for the benefit of the Operating Partnership.
The following table sets forth the Company's credit facilities at December 31, 2001 (in millions):
Credit Facility Amount Current Balance Maturity --------------------------------------------------------------------------------- SunTrust $10.0 $10.0 April 2003 SouthTrust 20.0 12.0 March 2004 First Tennessee 80.0 31.7 June 2003 Wells Fargo (secured) 130.0 107.5 September 2003 Wells Fargo (unsecured) 149.4 55.1 January 2003 |
During 2001 the Company closed fixed rate permanent and variable rate loans totaling $544.7 million at a weighted-average interest rate of 4.8% as of December 31, 2001. The details of the fixed rate permanent loans are: Fayette Mall in Lexington, Kentucky with a $98 million loan at 7.0%, Brookfield Mall in Milwaukee (Brookfield), Wisconsin with a loan addition of $30 million at 6.87% and Asheville Mall in Asheville, North Carolina with a loan of $71.2 million at 6.98%. The details of the variable rate loans are: Midland Mall in Midland Michigan, Parkdale Mall in Beaumont, Texas, Fashion Square Mall in Saginaw, Michigan, Jefferson Mall in Louisville, Kentucky, Columbia Mall in Columbia, South Carolina and Northwoods Mall in North Charleston, South Carolina all of which were refinanced with separate variable rate loans totaling $314.1 million for terms of up to three years. The Regency Mall in Racine, Wisconsin loan of $28.6 million was refinanced with proceeds from the Company's credit facilities The proceeds of these loans were used to prepay and retire fixed rate loans of $362.7 million, repay variable-rate indebtedness on loans and credit facilities of $165.5, fund prepayment penalties of $13.0 million and to fund fees and accrued interest of $4.0 million.
On January 31, 2001, the Company assumed, as part of the acquisition of The Richard E. Jacobs Group's interests in 21 malls and two associated centers; total debt obligations of $745.5 million, including permanent debt of $661.5 million (adjusted for a minority interest in one property); variable-rate debt of $12.5 million; and its pro rata share of mortgage debt on unconsolidated properties (accounted for under the equity method) of $71.5 million. In addition, the Company closed a $212 million unsecured credit facility provided by a consortium of banks led by Wells Fargo. The balance on this credit facility at December 31, 2001 was $55.1 with $94.3 million available for capital improvements.
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 59.2% at December 31, 2001, compared with 59.4% at December 31, 2000.
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
DEVELOPMENT, EXPANSIONS AND ACQUISITIONS
On January 31, 2001, the Company acquired from The Richard E. Jacobs Group
interests in 21 malls and two associated centers. The total gross leasable area
of the 23 properties is 19.2 million square feet, or an average gross leasable
area of 914,000 square feet per mall. The malls are located in middle markets
predominantly in the Southeast and the Midwest. The properties acquired are as
follows at December 31, 2001:
Second Gross
Stage(3) Leaseable
Center Location Ownership Interest Area Anchor stores
--------------------------------------------------------------------------------------------------------------------------
Brookfield Square Brookfield, WI 100% -% 1,041,000 Boston Store, Sears,
JCPenney
Cary Towne Center Cary, NC 100% -% 953,000 Dillard's, Hecht's,
Belk, Sears, JC Penney
Cherryvale Mall Rockford, IL 100% -% 714,000 Bergner's, Marshall
Fields, Sears
Citadel Mall Charleston, SC 100% -% 1,074,000 Parisian, Dillard's,
Belk, Target(2), Sears
Columbia Mall Columbia, SC 48% 31% 1,113,000 Dillard's, JCPenney,
Rich's, Sears
Eastgate Mall (1) Cincinnati, OH 100% -% 1,099,000 JCPenney, Kohl's,
Dillard's, Sears
East Towne Mall Madison, WI 48% 17% 887,000 Boston Store, Younkers,
Sears, JCPenney
Fashion Square Saginaw, MI 100% -% 786,000 Marshall Fields, JCPenney,
Sears
Fayette Mall Lexington, KY 100% -% 1,108,000 Lazarus, Dillard's,
JCPenney, Sears
Hanes Mall Winston-Salem, NC 100% -% 1,556,000 Dillard's, Belk, Hecht's,
Sears, JCPenney
Jefferson Mall Louisville, KY 100% -% 936,000 Lazarus, Dillard's,
Sears, JCPenney
Kentucky Oaks Mall Paducah, KY 48% 2% 888,000 Dillard's, Elder-
Beerman, JCPenney,
Midland Mall Midland, MI 100% -% 514,000 Elder-Beerman,
JCPenney, Sears, Target
Northwoods Mall Charleston, SC 100% -% 833,000 Dillard's, Belk,
JCPenney, Sears
Old Hickory Mall Jackson, TN 100% -% 555,000 Belk, Goldsmith's,
Sears, JCPenney
Parkdale Mall Beaumont, TX 100% -% 1,411,000 Dillard's I, Dillard's II,
JCPenney, Foleys(2), Sears
Randolph Mall Asheboro, NC 100% -% 376,000 Belk, JCPenney,
Dillard's(2), Sears
Regency Mall Racine, WI 100% -% 887,000 Boston Store, Yonkers,
JCPenney, Sears
Towne Mall Franklin, OH 100% -% 465,000 Elder-Beerman,
Dillard's, Sears
Wausau Center Wausau, WI 100% -% 429,000 Younkers, JCPenney,
Sears
West Towne Mall (1) Madison, WI 48% 17% 1,462,000 Boston Store, Sears,
JCPenney, Yonkers
(1) Includes associated center.
(2) Opening in 2002.
(3) Second stage interest to be acuired in 2002.
|
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
The company also acquired and opened in 2001 the following properties:
Gross
Leaseable
Center Location Ownership Area Anchor stores
----------------------------------------------------------------------------------------------------------------
ACQUISITIONS:
Willowbrook Plaza Houston, Texas 100% 119,000 AMC Theater, Home Depot Expo
ACQUIRED INTERESTS:
Madison Square Mall Huntsville, Alabama 100% 934,000 Acquired remaining 50% interest
Madison Plaza Huntsville, Alabama 100% 153,000 Acquired remaining 25% interest
OPENINGS:
Creekwood Crossing Bradenton, Florida 100% 404,000 Kmart, Bealls, Lowes
Parkway Place Huntsville, Alabama 50% 177,000 Parisian, Piccadilly
Meridian Mall Expansion Lansing(Okemos), Michigan 100% 85,000 Jacobson's
The Lakes Mall Muskegon, Michigan 90% 553,000 Yonkers, Sears, JCPenney
Springdale Mall Expansion Mobile, Alabama 100% 45,000 Carmike Cinema
Chesterfield Crossing
Expansion Richmond, Virginia 100% 10,000 Shops
Coastal Way Expansion Spring Hill, Florida 100% 26,000 Office Depot
CBL Center Chattanooga, Tennessee 92% 128,000 Corporate office
Sutton Plaza Mt. Olive, New Jersey 100% 5,000 Blockbuster, Subway
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As of December 31, 2001 the Company had in excess of 700,000 square feet under construction consisting of:
Project Name Location Total GLA Opening Date ------------------------------------------------------------------------------------------------------------- Meridian Mall Expansion Lansing (Okemos), Michigan 93,000 November 2002 Parkway Place Huntsville, Alabama 631,000 October 2002 |
The Company has also 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 capital commitments.
It is management's expectation that the Company will continue to have access to the capital resources necessary to expand and grow 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 activity 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.
OTHER CAPITAL EXPENDITURES
Management prepares an annual capital expenditures budget for each property which is intended to provide for all necessary recurring capital improvements and maintenance items. Management believes that its annual operating reserve for maintenance and recurring capital improvements as well as reimbursements from tenants will provide the necessary funding for such requirements. The Company intends to distribute approximately 50% to 90% of its funds from operations with the remaining 10% to 50% to be held as a reserve for capital expenditures and continued growth opportunities.
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
Major tenant finish costs for currently vacant space are expected to be funded with working capital, operating reserves, or revolving lines of credit. Funds invested for tenant finish costs are expected to earn a return on that investment. For the year ended December 31, 2001, revenue generating capital expenditures, or tenant allowances for improvements, were $23.5 million. These capital expenditures generate a return through increased rents from these tenants over the term of their leases. Revenue enhancing capital expenditures, or remodeling and renovation costs, were $26.6 million, the majority of which was for the renovation of Burnsville Center in Minneapolis (Burnsville), Minnesota and Meridian Mall in Lansing (Okemos), Michigan in the existing portfolio and Fashion Square Mall in Saginaw, Michigan and Cary Towne Center in Cary, North Carolina in the newly acquired portfolio. Certain items of revenue enhancing capital expenditures such as flooring and parking lot resurfacing are billed to tenants and a portion is recovered from tenants. Revenue neutral capital expenditures, such as parking lot and roof repairs, are billed to tenants and a portion is recovered from tenants. During 2001 Revenue neutral expenditures were $14.0 million. The billing and recovery of revenue neutral and certain revenue enhancing expenditures occurs generally over a 10 to 20 year period.
Environmental Matters
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. 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 2001 increased by $51.3 million, or 43.6%, to $169.1 million from $117.8 million in 2000. This increase was primarily due to increases in cash provided by the operations of thirty-one new centers opened or acquired in the last twenty-four months offset by decreases in cash flow from the sales of nineteen properties. Cash flows used in investing activities for 2001 increased by $80.0 million, or 63.0%, to $207.1 million compared with $127.1 million in 2000. This increase was primarily due to the acquisition of 21 malls and two associated centers and capital investment in properties in 2001 compared with the smaller number of acquisitions and capital investment in 2000. Cash flows provided by financing activities for 2001 increased by $35.6 million, or 482.8%, to $43.0 million from $7.4 million in 2000. This increase is primarily due to increases in the 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 tenants' 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 from 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.
CRITICAL ACCOUNTING POLICIES
In December 2001, the Securities and Exchange Commission requested that all registrants list their most "critical accounting policies" in MD&A. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of a company's financial condition and results and requires significant judgement or complex estimation processes. Management believes that the Company's accounting policies that are the most significant and that require the most judgement are within its accounting for the development of real estate projects. Management believes that the following accounting policies within this process fit the definition described above. The Company capitalizes predevelopment costs paid to third parties incurred on a project. All previously
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
capitalized predevelopment costs are expensed when it is no longer probable that the project will be completed. Once development of a project commences, the Company capitalizes all direct costs incurred to construct the project, including interest and real estate taxes. In addition, certain general and administrative expenses are allocated to the projects and capitalized based on the personnel assigned to development and the investment in the project relative to all development projects. Once a project is completed and placed in service, it is depreciated over its estimated useful life. Buildings and improvements are depreciated generally over 40 years and leasehold improvements are amortized over the lives of the applicable leases or the estimated useful life of the asset, whichever is shorter.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets" (collectively the "Standards"). The Standards will be effective for fiscal years beginning after December 15, 2001. Companies with fiscal years beginning after March 15, 2001 may early adopt, but only as of the beginning of that fiscal year and only if all existing goodwill is evaluated for impairment by the end of that fiscal year. SFAS No. 141 will require companies to recognize acquired identifiable assets separately from goodwill if control over the future economic benefits of the assets results from contractual or other legal rights or the intangible assets is capable of being separated or divided and sold, transferred, licensed, rented, or exchanged. The Standards will require the value of separately identifiable intangible assets meeting any of the criteria to be measured at its fair value. SFAS No. 142 will require that goodwill not be amortized, and that amounts recorded as goodwill be tested for impairment. Upon adoption of SFAS No. 142, goodwill will be reduced if it is found to be impaired. Annual impairment tests will have to be performed at the lowest level of an entity that is a business and that can be distinguished, physically and operationally and for internal reporting purposes, from the other activities, operations, and assets of the entity. The Company believes the impact of the new goodwill impairment standards will not have a material impact on the Company's financial position or results of operations.
In August 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed of. SFAS No. 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"" and among other factors, establishes criteria beyond that previously specified in SFAS No. 121 to be determine when a long-lived asset is to be considered as held for sale. The Company adopted SFAS No. 144 effective January 1, 2002 and is currently evaluating its impact.
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, 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 Investment Trusts' ("NAREIT") recommendation concerning finance costs and non-real estate depreciation. The Company excludes gains or losses on outparcel sales, even though NAREIT permits their inclusion when calculating FFO. Gains on outparcel sales would have added $2.2 million to FFO in 2001 compared with $5.4 million in 2000.
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 Company). Management also believes that FFO is a widely used measure of the operating performance of REITs and provides a relevant basis for comparison among companies. FFO does not represent cash flow from operations as defined by accounting principles generally accepted in the United States ("GAAP"), is not necessarily indicative of cash from operations available to fund all cash flow needs, and should not be considered as an alternative to net income for purposes of evaluating the Company's operating performance, for evaluating the impact of capital investments in the Company's properties or to cash flows as a measure of liquidity.
Effective January 1, 2000, NAREIT clarified FFO to include all operating results - recurring and non-recurring - except those results defined as "extraordinary items" under accounting principles generally accepted in the United States. The Company implemented this clarification in the first quarter of 2000 and no longer adds back to FFO the write-off of development costs charged to net income. This amount was $2,032,000 for the year ended December 31, 2001 and $127,000 for the year ended December 31, 2000. The cost of interest rate caps and finance costs on the Company's lines of credit are amortized and included in interest expense and, therefore, reduces FFO.
CBL & Associates Properties, Inc - 2001 Form 10K
Management's Discussion and Analysis of Financial Condition and Results of Operations
In 2001, FFO increased by $62.0 million, or 46.9%, to $194.0 million compared with $132.0 million in 2000. The increase in FFO was primarily attributable to the income from operations from twenty-three Newly Acquired Properties and the opening and acquisitions of eight properties in the last twenty-four months and higher rents in the Company's stabilized portfolio offset by decreases in FFO from the sales of properties.
The Company's calculation of FFO is as follows (in thousands):
Three Months Year Ended
Ended December 31, December 31,
---------------------------- -----------------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
Income from operations 31,767 20,622 108,003 76,461
ADD:
Depreciation and amortization from
consolidated properties 22,974 15,644 87,624 60,646
Income from operations of
unconsolidated affiliates 2,412 1,099 7,155 3,684
Depreciation and amortization from
unconsolidated affiliates 985 288 3,765 1,511
SUBTRACT:
Minority investors' share of income
from operations (343) (516) (1,698) (1,538)
Minority investors' share of
depreciation and amortization (275) (245) (1,096) (981)
Depreciation and amortization of non-real
estate assets and finance costs (929) (301) (3,284) (1,281)
Preferred dividends (1,617) (1,617) (6,468) (6,468)
----------- ----------- ----------- -----------
TOTAL FUNDS FROM OPERATIONS $ 54,974 $ 34,974 $ 194,001 $ 132,034
=========== =========== =========== ===========
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CBL & Associates Properties, Inc - 2001 Form 10K
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has managed the market risk for its variable rate debt with derivative financial instruments. The derivative instruments are described in the Liquidity and Capital Resources section in Item 7 above and in Note 9 to the Financial Statements.
The fair value of the Company's long term debt is estimated based on discounted cash flows at interest rates that management believes reflects the risks associated with long term debt of similar risk and duration.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Reference is made to the Index to Financial statements contained in Item 14 on page 56.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Incorporated herein by reference from the Company's most recent definitive proxy statement filed on with the Securities and Exchange Commission (the "Commission") with respect to its Annual Meeting of Stockholders to be held on May 7, 2002.
ITEM 11. EXECUTIVE COMPENSATION.
Incorporated herein by reference from the Company's most recent definitive proxy statement filed with the Commission with respect to its Annual Meeting of Stockholders to be held on May 7, 2002.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Incorporated herein by reference from the Company's most recent definitive proxy statement filed with the Commission with respect to its Annual Meeting of Stockholders to be held on May 7, 2002.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Incorporated herein by reference from the Company's most recent definitive proxy statement filed with the Commission with respect to its Annual Meeting of Stockholders to be held on May 7, 2002.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(1) Financial Statements Page Number
Report of Independent Public Accountants 59
CBL & Associates Properties, Inc. Consolidated Balance 60
Sheets as of December 31, 2001 and 2000
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CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc. Consolidated 61
Statements of Operations for the Years Ended
December 31, 2001, 2000 and 1999
CBL & Associates Properties, Inc. Consolidated 62
Statements of Cash Flows for the Years Ended
December 31, 2001, 2000 and 1999
CBL & Associates Properties, Inc. Consolidated 63
Statements of Shareholders' Equity for the Years
Ended December 31, 2001, 2000 and 1999
Notes to Financial Statements 64
(2) Financial Statement Schedules
Schedule II Allowance For Credit Losses 78
Schedule III Real Estate and Accumulated Depreciation 79
Schedule IV Mortgage Loans on Real Estate 87
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Financial Statement Schedules not listed herein are either not required or are not present in amounts sufficient to require submission of the schedule or the information required to be included therein is included in the Company's Consolidated Financial Statements in item 14 or are reported elsewhere.
(3) Exhibits
Exhibit
Number Description
3.1 -- Amended and Restated Certificate of Incorporation of the
Company, dated November 2, 1993(a)
3.2 -- Amended and Restated Bylaws of the Company, dated
October 27, 1993(a)
3.3 -- Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, dated May 2, 1996, see page 94
3.4 -- Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, dated January 31, 2001,
see page 106
4.1 -- See Amended and Restated Certificate of Incorporation of the
Company, relating to the Common Stock(a)
4.2 -- Certificate of Designations, dated June 25, 1998, relating to
the 9% Series A Cumulative Redeemable Preferred Stock, see
page 110
4.3 -- Certificate of Designation, dated April 30, 1999, relating to
the Series 1999 Junior Participating Preferred Stock, see page 117
4.4 -- Terms of Series J Special Common Units of the Operating
Partnership, pursuant to Article 4.4 of the Second Amended and
Restated Partnership Agreement of the Operating Partnership,
see page 123
10.1.1 -- Second Amended and Restated Agreement of the Operating
Partnership dated June 30, 1998(p)
10.1.2 -- First Amendment to Second Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, dated
January 31, 2001, see page 134
10.2.1 -- Rights Agreement by and between the Company and BankBoston,
N.A., dated as of April 30, 1999(q)
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CBL & Associates Properties, Inc - 2001 Form 10K
10.2.2 -- Amendment No. 1 to Rights Agreement by and between the Company
and SunTrust Bank(successor to BankBoston), dated
January 31, 2001, see page 158
10.3 -- Property Management Agreement between the Operating Partnership
and the Management Company(a)
10.4 -- Property Management Agreement relating to Retained Properties(a)
10.5.1 -- CBL & Associates Properties, Inc. 1993 Stock Incentive Plan(a)+
10.5.2 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Charles B. Lebovitz+
10.5.3 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
James L. Wolford+
10.5.4 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
John N. Foy+
10.5.5 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Jay Wiston+
10.5.6 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Ben S. Landress+
10.5.7 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Stephen D. Lebovitz+
10.5.8 -- Stock Restriction Agreement, dated December 28, 1994, for
Charles B. Lebovitz+
10.5.9 -- Stock Restriction Agreement, dated December 2, 1994, for
John N. Foy+
10.5.10 -- Stock Restriction Agreement, dated December 2, 1994, for
Jay Wiston+
10.5.11 -- Stock Restriction Agreement, dated December 2, 1994, for
Ben S. Landress+
10.5.12 -- Stock Restriction Agreement, dated December 2, 1994, for
Stephen D. Lebovitz+
10.6.1 -- Purchase Agreement relating to Frontier Mall(b)
10.6.2 -- Purchase Agreement relating to Georgia Square (JMB)(b)
10.6.3 -- Purchase Agreement Relating to Georgia Square (JCPenney)(b)
10.6.4 -- Purchase Agreement relating to Post Oak Mall(b)
10.7 -- Indemnification Agreements between the Company and the
Management Company and their officers and directors(a)
10.8.1 -- Employment Agreement for Charles B. Lebovitz(a)+
10.8.2 -- Employment Agreement for James L. Wolford(a)+
10.8.3 -- Employment Agreement for John N. Foy(a)+
10.8.4 -- Employment Agreement for Jay Wiston(a)+
10.8.5 -- Employment Agreement for Ben S. Landress(a)+
10.8.6 -- Employment Agreement for Stephen D. Lebovitz(a)+
10.9 -- Subscription Agreement relating to purchase of the Common
Stock and Preferred Stock of the Management Company(a)
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CBL & Associates Properties, Inc - 2001 Form 10K
10.10.1 -- Option Agreement relating to certain Retained Properties(a)
10.10.2 -- Option Agreement relating to Outparcels(a)
10.11.1 -- Property Partnership Agreement relating to Hamilton Place(a)
10.11.2 -- Property Partnership Agreement relating to CoolSprings
Galleria(a)
10.12.1 -- Acquisition Option Agreement relating to Hamilton Place(a)
10.12.2 -- Acquisition Option Agreement relating to the Hamilton Place
Centers(a)
10.12.3 -- Acquisition Option Agreement relating to the Office Building(a)
10.13.1 -- Revolving Credit Agreement between the Operating Partnership
and First Tennessee Bank, National Association, dated as of
March 2, 1994(c)
10.13.2 -- Revolving Credit Agreement, between the Operating Partnership and
Wells Fargo Advisors Funding, Inc., NationsBank of Georgia, N.A.
and First Bank National Association, dated July 28, 1994, (d)
10.13.3 -- Revolving Credit Agreement, between the Operating Partnership
and American National Bank and Trust Company of Chattanooga,
dated October 14, 1994, (e)
10.13.4 -- Revolving Credit Agreement, between the Operating Partnership
and First Tennessee Bank National Association, dated
November 2, 1994 (e)
10.14 -- Promissory Note Agreement between the Operating Partnership
and Union Bank of Switzerland, dated May 5, 1995(f)
10.15 -- Amended and Restated Loan Agreement between the Operating
Partnership and First Tennessee Bank National Association, dated
July 12, 1995(g)
10.16 -- Second Amendment to Credit Agreement between the Operating
Partnership and Wells Fargo Realty Advisors Funding, Inc. dated
July 5, 1995(g)
10.17 -- Consolidation, Amendment, Renewal, and Restatement of Notes
between the Galleria Associates, L.P. and The Northwestern
Mutual Life Insurance Company(h)
10.18.1 -- Promissory Note Agreement between High Point Development
Limited Partnership and The Northwestern Mutual Life Insurance
Company, dated January 26, 1996(i)
10.18.2 -- Promissory Note Agreement between Turtle Creek Limited
Partnership and Connecticut General Life Insurance Company,
dated February 14, 1996(i)
10.19 -- Amended and Restated Credit Agreement between the Operating
Partnership and Wells Fargo Bank N.A. etal, dated
September 26, 1996(j)
10.20 -- Promissory Note Agreement between the Operating Partnership
and Compass Bank dated, September 17, 1996. (j)
10.21.1 -- Promissory Note Agreement between St Clair Square Limited
Partnership and Wells Fargo National Bank, dated
December 11, 1996(k)
10.21.2 -- Promissory Note Agreement between Lebcon Associates and
Principal Mutual Life Insurance Company dated,
March 18, 1997(k)
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CBL & Associates Properties, Inc - 2001 Form 10K
10.21.3 -- Promissory Note Agreement between Westgate Mall Limited
Partnership and Principal Mutual Life Insurance Company
dated, February 16, 1997(k)
10.22.1 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank etal,
dated February 24, 1997(k)
10.22.2 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank etal,
dated July 29, 1997(l)
10.22.3 -- Second Amended and Restated Credit Agreement between the
Operating Partnership and Wells Fargo Bank N.A. etal,
dated June 5, 1997, effective April 1,1997(l)
10.22.4 -- First Amendment to Second Amended and Restated Credit Agreement
between the Operating Partnership and Wells Fargo Bank N.A. etal,
dated November 11, 1997(l)
10.23.1 -- Loan Agreement between Asheville LLC and Wells Fargo Bank
N.A., dated February 17, 1998(l)
10.23.2 -- Loan Agreement between Burnsville Minnesota LLC and U.S.
Bank National Association dated January 30, 1998(l)
10.24 -- Loan agreement with South Trust Bank, dated January 15 , 1998(m)
10.25 -- Loan agreement between Rivergate Mall Limited Partnership, The
Village at Rivergate Limited Partnership, Hickory Hollow Mall
Limited Partnership, and The Courtyard at Hickory Hollow Limited
Partnership and Midland Loan Services, Inc., Dated
July 1, 1998(n)
10.26.1 -- Amended and restated Loan Agreement between the Company and
First Tennessee Bank National Association, Dated June 12, 1998(o)
10.26.2 -- First Amendment To Third Amended And Restated Credit Agreement
and Third Amended And Restated Credit Agreement between the
Company and Wells Fargo Bank, National Association, dated
August 4, 1998(o)
10.27 -- Promissory Note with Teachers Insurance and Annuity Association
of American and St. Clair Square Limited Partnership Bank,
dated March 11, 1999(p)
10.28 -- Promissory Note with Wells Fargo Bank National Associates and
Parham Road Limited Partnership (York Galleria), dated
July 1, 1999(r)
10.29 -- Agreement of Purchase and Sale By and Between YGL Partners and
the Operating Partnership assigned to Parham Road Limited
Partnership (York Galleria), dated February 2, 1999(r)
10.30.1 -- Master Contribution Agreement, dated as of September 25, 2000,
by and among the Company, the Operating Partnership and the
Jacobs entities(s)
10.30.2 -- Amendment to Master Contribution Agreement, dated as of
September 25, 2000, by and among the Company, the Operating
Partnership and the Jacobs entities(t)
10.31 -- Share Ownership Agreement by and among the Company and its
related parties and the Jacobs entities, dated as of
January 31, 2001(t)
10.32.1 -- Registration Rights Agreement by and between the Company and
the Holders of SCU's listed on Schedule 1 thereto, dated as
of January 31, 2001(t)
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CBL & Associates Properties, Inc - 2001 Form 10K
10.32.2 -- Registration Rights Agreement by and between the Company
and Frankel Midland Limited Partnership, dated as of
January 31, 2001(t)
10.32.3 -- Registration Rights Agreement by and between the Company
and Hess Abroms Properties of Huntsville, dated as of
January 31, 2001(t)
10.33 -- Loan Agreement by and between the Operating Partnership, Wells
Fargo Bank, National Association, Fleet National Bank, U.S.
Bank National Association, Commerzbank AG, New York And Grand
Cayman Branches, and Keybank National Association, together with
certain other lenders parties thereto pursuant to Section 8.6
thereof, dated as of January 31, 2001(t)
21 -- Subsidiaries of the Company, see page 161
23 -- Consent of Arthur Andersen LLP, see page 166
24 -- Power of Attorney, see page 167
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(a) Incorporated by reference to Post-Effective Amendment No. 1 to the Company's Registration Statement on Form S-11 (No. 33-67372), as filed with the Commission on January 27, 1994.
(b) Incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-11 (No. 33-67372), as filed with the Commission on October 26, 1993.
(c) Incorporated herein by reference to the Company's Annual Report in Form 10-K for the fiscal year ended December 31, 1993.
(d) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994.
(e) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994.
(f) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
(g) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
(h) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995.
(i) Incorporated by reference to the Company's Annual Report in Form 10-K for the fiscal year ended December 31, 1995.
(j) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996.
(k) Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996.
(l) Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997.
(m) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.
(n) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
(o) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.
(p) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
CBL & Associates Properties, Inc - 2001 Form 10K
(q) Incorporated by reference to the Company's Current Report on Form 8-K, filed on May 4, 1999.
(r) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
(s) Incorporated by reference from the Company's Current Report on Form 8-K, filed on October 27, 2000.
(t) Incorporated by reference from the Company's Current Report on Form 8-K, filed on February 6, 2001.
+ A management contract or compensatory plan or arrangement required to be filed pursuant to Item 14(c) of this report.
(b) Reports on Form 8-K
The outline from the Company's October 31, 2001 conference call with analysts regarding earnings (item 5) was filed on October 31, 2001.
The outline from the Company's February 7, 2002 conference call with analysts regarding earnings (Item 5) was filed on February 7, 2002.
CBL & Associates Properties, Inc - 2001 Form 10K
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
(Registrant)
By: /s/ Charles B. Lebovitz
------------------------------------------
Charles B. Lebovitz
Chairman of the Board,
and Chief Executive Officer
Dated: March 8, 2002
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Charles B. Lebovitz Chairman of the Board March 8, 2002
------------------------ and Chief
Charles B. Lebovitz Executive Officer
(Principal Executive Officer)
/s/ John N. Foy Vice Chairman of the Board, March 8, 2002
------------------------ Chief Financial Officer and
John N. Foy Treasurer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ Stephen D. Lebovitz Director, President March 8, 2002
------------------------ and Secretary
Stephen D. Lebovitz
/s/ Claude M.Ballard Director March 8, 2002
------------------------
Claude M. Ballard
/s/ Leo Fields Director March 8, 2002
------------------------
Leo Fields
/s/ William J.Poorvu Director March 8, 2002
------------------------
William J. Poorvu
/s/ Winston W. Walker Director March 8, 2002
------------------------
Winston W. Walker
/s/ Gary L. Bryenton Director March 8, 2002
------------------------
Gary L. Bryenton
/s/ Martin J. Cleary Director March 8, 2002
------------------------
Martin J. Cleary
*By: /s/ Charles B. Lebovitz
------------------------
Charles B. Lebovitz Attorney-in-Fact March 8, 2002
|
CBL & Associates Properties, Inc - 2001 Form 10K
INDEX TO FINANCIAL STATEMENTS
Report of Independent Public Accountants 59
CBL & Associates Properties, Inc. Consolidated Balance Sheets as of 60
December 31, 2001 and 2000
CBL & Associates Properties, Inc. Consolidated Statements of 61
Operations for the Years Ended December 31, 2001, 2000
and 1999
CBL & Associates Properties, Inc. Consolidated Statements of 62
Cash Flows for the Years Ended December 31, 2001, 2000
CBL & Associates Properties, Inc. Consolidated Statements of 63
Shareholders' Equity for the Years Ended December 31,
2001, 2000 and 1999
Notes to Financial Statements 64
Schedule II Allowance For Credit Losses 78
Schedule III Real Estate and Accumulated Depreciation 79
Schedule IV Mortgage Loans on Real Estate 87
|
CBL & Associates Properties, Inc - 2001 Form 10K
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To CBL & Associates Properties, Inc.:
We have audited the accompanying consolidated balance sheets of CBL & ASSOCIATES PROPERTIES, INC. (a Delaware corporation) and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CBL & Associates Properties, Inc. and subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the index to financial statements are presented for the purpose of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Chattanooga, Tennessee
February 6, 2002
CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
Year Ended December 31,
-------------------------------
2001 2000
------------- -------------
ASSETS
REAL ESTATE ASSETS:
Land $ 520,334 $ 290,366
Buildings and improvements 2,961,185 1,919,619
------------- -------------
3,481,519 2,209,985
Less: Accumulated depreciation (346,940) (271,046)
------------- -------------
3,134,579 1,938,939
Developments in progress 67,043 101,675
------------- -------------
Net investment in real estate 3,201,622 2,040,614
CASH AND CASH EQUIVALENTS 10,137 5,184
RECEIVABLES:
Tenant, net of allowance for doubtful accounts of $2,865 38,353 29,641
In 2001 and $1,854 in 2000
Other 2,833 3,472
MORTGAGE NOTES RECEIVABLE 10,634 8,756
INVESTMENT IN UNCONSOLIDATED AFFILIATES 77,673 -
OTHER ASSETS 31,599 27,898
------------- -------------
$ 3,372,851 $ 2,115,565
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
MORTGAGE AND OTHER NOTES PAYABLE $ 2,315,955 $ 1,424,337
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 103,707 78,228
------------- -------------
Total liabilities 2,419,662 1,502,565
COMMITMENTS AND CONTINGENCIES (Notes 3, 5 and 14)
DISTRIBUTIONS AND LOSSES IN EXCESS OF INVESTMENT - 3,510
IN UNCONSOLIDATED AFFILIATES
------------- -------------
MINORITY INTERESTS 431,101 174,665
------------- -------------
SHAREHOLDERS' EQUITY:
Preferred Stock, $.01 per value, 5,000,000 shares authorized, 29 29
2,875,000 shares issued and outstanding in 2001 and 2000
Common Stock, $.01 par value, 95,000,000 shares authorized, 256 251
25,616,917 and 25,067,287 shares issued and outstanding in
2001 and 2000, respectively
Additional paid-in capital 556,383 462,480
Other comprehensive loss (6,784) -
Accumulated deficit (27,796) (27,935)
------------- -------------
Total shareholders' equity 522,088 434,825
------------- -------------
$ 3,372,851 $ 2,115,565
============= =============
The accompanying notes are an integral part of these balance sheets
|
CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Year Ended December 31,
-------------------------------------------
2001 2000 1999
---------- --------- --------
REVENUES
Rentals:
Minimum $ 352,305 $225,460 $203,022
Percentage 9,670 8,760 7,356
Other 10,613 6,246 5,442
Tenant reimbursements 161,834 106,764 89,774
Management, development and leasing fees 5,147 4,170 7,818
Interest and other 4,806 5,088 4,191
---------- --------- --------
Total revenues 544,375 356,488 317,603
---------- --------- --------
EXPENSES:
Property operating 97,173 57,301 50,832
Depreciation and amortization 87,624 60,646 53,551
Real estate taxes 44,455 30,398 27,580
Maintenance & repair 31,804 19,192 17,783
General & administrative 18,807 17,766 16,214
Interest expense 154,477 94,597 82,505
Other 2,032 127 1,674
---------- --------- --------
Total expenses 436,372 280,027 250,139
---------- --------- --------
INCOME FROM OPERATIONS 108,003 76,461 67,464
GAIN ON SALES OF REAL ESTATE ASSETS 10,649 15,989 8,357
EQUITY IN EARNINGS OF UNCONSOLIDATED 7,155 3,684 3,263
AFFILIATES
MINORITY INTEREST IN EARNINGS:
Operating Partnership (49,643) (28,507) 23,264)
Shopping center properties (1,698) (1,538) (1,225)
---------- --------- --------
INCOME BEFORE EXTRAORDINARY ITEM 74,466 66,089 54,595
EXTRAORDINARY LOSS ON EXTINGUISHMENT OF DEBT (13,558) (367) -
---------- --------- --------
NET INCOME 60,908 65,722 54,595
PREFERRED DIVIDENDS (6,468) (6,468) (6,468)
---------- --------- --------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 54,440 $ 59,254 $ 48,127
========== ========= ========
BASIC EARNINGS PER SHARE:
Income before extraordinary item $ 2.68 $ 2.40 $ 1.95
Extraordinary loss on extinguishment of debt (0.53) (0.01) -
---------- --------- --------
Net income $ 2.15 $ 2.38 $ 1.95
========== ========= ========
Weighted average common shares outstanding 25,358 24,881 24,647
DILUTED EARNINGS PER SHARE:
Income before extraordinary item $ 2.63 $ 2.38 $ 1.94
Extraordinary loss on extinguishment of debt (0.52) (0.01) -
---------- --------- --------
Net income $ 2.11 $ 2.37 $ 1.94
========== ========= ========
Weighted average common shares and potential dilutive
common shares outstanding 25,833 25,021 24,834
The accompanying notes are an integral part of these statements.
|
CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc.
Consolidated Statements of Cash Flows
(In thousands)
Year Ended December 31,
--------------------------------------
2001 2000 1999
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income
Adjustments to reconcile net income to net cash $60,908 $65,722 $54,595
provided by operating activities
Minority interest in earnings 51,341 30,045 24,489
Depreciation 75,905 47,329 44,245
Amortization 13,539 14,581 10,485
Extraordinary loss on extinguishment of debt 13,558 367 -
Gain on sales of real estate assets (10,649) (15,989) (8,357)
Equity in earnings of unconsolidated affiliates (7,155) (3,684) (3,263)
Issuance of stock under incentive plan 1,926 1,634 914
Amortization of deferred compensation - - 510
Write-of of development projects 2,032 127 1,674
Distributions from unconsolidated affiliates 13,010 9,256 10,547
Distributions to minority interests (49,805) (25,327) (23,645)
Changes in assets and liabilities:
Tenant and other receivable (8,586) (10,020) (3,680)
Other Assets (5,107) (2,156) (1,211)
Accounts payable and accrued liabilities 18,208 5,929 6,893
-------- -------- --------
Net cash provided by operating activities 169,125 117,814 114,196
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate assets (74,890) (139,884) (147,894)
Acquisitions of real estate assets (114,703) (11,089) (69,027)
Capitalized interest (5,860) (6,288) (6,749)
Other capital expenditures (63,115) (24,654) (29,830)
Proceeds from sales of real estate assets 79,572 67,865 50,373
Additions to mortgage notes receivable (1,604) (825) (1,690)
Payments received on mortgage notes receivable 996 1,454 1,423
Additional investments in and advances to (23,506) (5,247) (4,927)
unconsolidated affiliates
Additions to other assets (4,012) (8,405) (3,820)
-------- -------- --------
Net cash used in investing activities (207,122) (127,073) (212,141)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage and other notes payable 763,235 256,220 237,716
Principal payments on mortgage and other notes (650,584) (192,636) (85,167)
payable
Additions to deferred financing costs (7,904) (3,568) (2,075)
Proceeds from issuance of common stock 2,832 1,711 1,241
Purchase of minority interest - (761) -
Proceeds from exercise of stock options 8,323 3,263 1,470
Prepayment penalties on extinguishment of debt (13,038) (184) -
Dividends paid (59,914) (56,676) 53,993)
-------- -------- --------
Net cash provided by financing activities 42,950 7,369 99,192
-------- -------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS 4,953 (1,890) 1,247
CASH AND CASH EQUIVALENTS, beginning of period 5,184 7,074 5,827
-------- -------- --------
CASH AND CASH EQUIVALENTS, end of period 10,137 $5,184 7,074
======== ======== ========
SUPPLEMENTAL INFORMATION
Cash paid during the period for interest, net of $151,397 $94,405 $81,181
amounts capitalized
======== ======== ========
Debt assumed in acquisition of property interests $778,967 $ - $ -
======== ======== ========
Issuance of minority interests in acquisition of $345,925 $ 27 $ 1,928
property interests
======== ======== ========
The accompanying notes are an integral part of these statements.
|
CBL & Associates Properties, Inc - 2001 Form 10K
CBL & Associates Properties, Inc.
Consolidated Statements Of Shareholders' Equity
(In thousands, except per share data)
Additional Other
Preferred Paid-in Comprehensive Accumulated Deferred
Stock Common Stock Capital Loss Deficit Compensation Total
--------- ------------ ---------- ------------- ----------- ------------ ---------
Balance December 31, 1998 $ 29 $ 246 $ 452,252 $ - $ (36,235) $ (510) $ 415,782
Net income - - - - 54,595 - 54,595
Dividends, $1.95 per common share - - - - (48,157) - (48,157)
Dividends, $2.25 per preferred share - - - - (6,468) - (6,468)
Issuance of 93,661 shares of common stock - 1 2,154 - - - 2,155
Exercise of stock options - 1 1,469 - - - 1,470
Amortization of deferred compensation - - - - - 510 510
--------- ------------ ---------- ------------- ----------- ------------ ----------
Balance December 31, 1999 29 248 455,875 - (36,265) - 419,887
Net income - - - - 65,722 - 65,722
Dividends, $2.04 per common share - - - - (50,924) - (50,924)
Dividends, $2.25 per preferred share - - - - (6,468) - ( 6,468)
Issuance of 152,311 shares of common stock - 2 3,343 - - - 3,345
Exercise of stock options - 1 3,262 - - - 3,263
--------- ------------ ---------- ------------- ----------- ------------ ----------
Balance December 31, 2000 29 251 462,480 - (27,935) - 434,825
Net income - - - - 60,908 - 60,908
Dividends, $2.13 per common share - - - - (54,301) - (54,301)
Dividends, $2.25 per preferred share - - - - (6,468) - (6,468)
Loss on current period cash flow hedges - - - (6,784) - - (6,784)
Issuance of 174,280 shares of common stock - 2 4,756 - - - 4,758
Issuance of minority interest in Operating - - 80,827 - - - 80,827
Partnership
Exercise of stock options - 3 8,320 - - - 8,323
--------- ------------ ---------- ------------- ----------- ------------ ----------
Balance December 31, 2001 $ 29 $ 256 $ 556,383 $ (6,784) (27,796) $ - $ 522,088
========= ============ ========== ============= =========== ============ ==========
|
CBL & Associates Properties, Inc. - 2001 Form 10K
Notes To Consolidated Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
CBL & Associates Properties, Inc. (the "Company"), a Delaware corporation, is engaged in the development, acquisition, and operation of regional shopping malls and community centers, primarily in the Southeast and select markets in the Northeast and Midwest regions of the United States. The Company is the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc., which are the sole general partner and majority owner, respectively, of CBL & Associates Limited Partnership (the "Operating Partnership"). As a result, the Company conducts its business through the Operating Partnership, which at December 31, 2001, owns controlling interests in a portfolio of properties consisting of 45 regional malls; 16 associated centers, each of which is part of a regional shopping mall complex; two power centers; 68 community centers; and two office buildings. Additionally, the Operating Partnership owns non-controlling interests in seven regional malls and two associated centers. The Operating Partnership has one mall and one mall expansion currently under construction and has options to acquire certain development properties owned by third parties. At December 31, 2001, CBL Holdings I, Inc. owned a 1.9% general partnership interest and CBL Holdings II, Inc. owned a 49.2% limited partnership interest in the Operating Partnership for a combined interest held by the Company of 51.1%.
The minority interest in the Operating Partnership is held primarily by CBL
& Associates, Inc. and its affiliates (collectively "CBL") and by affiliates of
the Richard E Jacobs Group, Inc. ("Jacobs"). CBL contributed their interests in
certain real estate properties and joint ventures to the Operating Partnership
in exchange for a limited partnership interest in connection with the formation
of the Operating Partnership in November 1993. Jacobs contributed their
interests in certain real estate properties and joint ventures to the Operating
Partnership in exchange for a limited partnership interest in connection with
the acquisition by the Operating Partnership of 23 properties discussed in Note
3. At December 31, 2001, CBL and Jacobs owned a 17.7% and 22.8% limited
partnership interest in the Operating Partnership, respectively (Note 11).
To comply with certain technical requirements of the Internal Revenue Code of 1986, as amended (the "Code"), the Operating Partnership carries out the Company's property management and development activities through CBL & Associates Management, Inc. (the "Management Company"). The Operating Partnership holds 100% of the preferred stock and 5% of the common stock of the Management Company, with CBL holding the remaining 95% of the common stock. Through the ownership of the preferred stock, the Operating Partnership receives substantially all of the cash flow and, therefore, enjoys substantially all of the economic benefits of the Management Company's operations. Due to the Company's ability, as sole general partner, to control the Operating Partnership and the Operating Partnership's rights to substantially all of the economic benefits of the Management Company, the accounts of each entity are included in the accompanying consolidated financial statements. The Company, the Operating Partnership, and the Management Company are referred to collectively as the "Company".
All significant intercompany balances and transactions have been eliminated in the consolidated presentation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Real Estate Assets
Costs directly related to the development of real estate assets, including overhead costs directly attributable to property development, are capitalized. Interest costs incurred during the development and construction period are capitalized.
Ordinary repairs and maintenance are expensed as incurred. Major replacements and improvements are capitalized and depreciated over their estimated useful lives. Depreciation is computed on a straight-line basis generally over 40 years for buildings, 10 to 20 years for certain improvements and seven to ten years for equipment and fixtures. Tenant improvements are capitalized and depreciated on a straight-line basis over the life of the related lease.
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
Long-Lived Assets
The Company periodically evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the projected undiscounted future cash flow of such asset is less than its carrying value. Management believes that no material impairment existed at December 31, 2001, and accordingly, no loss was recognized.
Cash and Cash Equivalents
Cash and cash equivalents include all cash and cash equivalent investments with original maturities of three months or less, primarily consisting of demand deposits in banks.
Deferred Financing Costs
Deferred financing costs are included in other assets in the accompanying consolidated balance sheets, include fees and costs incurred to obtain long-term financing, and are being amortized and charged to interest expense over the terms of the respective notes payable. Amortization expense was $4,766,000, $2,072,000 and $1,506,000 in 2001, 2000, and 1999, respectively. Accumulated amortization was $13,096,000 and $9,872,000 as of December 2001 and 2000, respectively. Unamortized deferred financing costs are written off when notes payable are retired before the maturity date.
Revenue Recognition
Rental revenue attributable to operating leases is recognized on a straight-line basis over the initial term of the related leases. Certain tenants are required to pay additional rent if sales volume exceeds specified amounts. The Company recognizes this additional rent as revenue when such amounts become determinable. A substantial portion of the Company's rental income is derived from various national and regional retail companies.
Tenant Reimbursements
The Company receives reimbursements from tenants for certain costs as provided in the lease agreements. These costs consist of real estate taxes, common area maintenance, and other recoverable costs. Tenant reimbursements are recognized as revenue in the period the costs are incurred.
Management, Development and Leasing Fees
The Company's derives its management fees and development fees from third parties and unconsolidated affiliates. Management fees are charged as a percentage of rentals and are recognized as revenue as they are earned. Leasing fees are charged for newly executed leases. These fees are recognized as revenues as they are earned. Development fees are recognized as revenue on a pro rata basis over the development period.
Gain on Sales of Real Estate Assets
Gain on sales of real estate assets is recognized at the time title to the asset is transferred to the buyer, subject to the adequacy of the buyer's initial and continuing investment and the assumption by the buyer of all future ownership risks of the asset.
Income Taxes
The Company is qualified as a real estate investment trust under Sections 856 through 860 of the Code and applicable treasury regulations. In order to maintain qualification as a real estate investment trust, the Company is currently required to distribute at least 90% of its taxable income to shareholders and meet certain other asset and income tests as well as other requirements. As a real estate investment trust, the Company will generally not be liable for federal corporate income taxes. Thus, no provision for federal income taxes has been included in the accompanying consolidated financial statements. If the Company fails to qualify as a real estate investment trust in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate tax rates. Even if the Company maintains its qualification for taxation as a real estate investment trust, the Company may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed income. State income taxes were not significant in 2001, 2000 and 1999.
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
Derivative Financial Instruments
Interest rate cap and swap agreements, which are principally used by the Company in the management of interest rate exposure, are accounted for on an accrual basis. At January 1, 2001, the Company implemented Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended, ("SFAS No. 133") which establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. Amounts to be paid or received under interest rate cap and swap agreements are recorded in interest expense in the period in which they accrue. See Note 9 for additional information.
Concentration of Credit Risk
The Company's tenants consist of national, regional and local retailers. Financial instruments which subject the Company to concentrations of credit risk consist primarily of tenant receivables. The Company does not obtain collateral or other security to support financial instruments subject to credit risk but monitors the credit standing of tenants.
Earnings Per Share
Basic earnings per share ("EPS") is computed by dividing earnings available to common shareholders by the weighted-average number of unrestricted common shares outstanding for the period. Diluted EPS assumes the issuance of common stock for all potential dilutive common shares outstanding. The limited partners' rights to convert their minority interest in the Operating Partnership into shares of common stock are not dilutive (Note 11). The difference in basic and diluted EPS is due to the assumed exercise of outstanding stock options and restricted stock resulting in 475,000, 140,000, and 187,000 potential dilutive common shares in 2001, 2000 and 1999, respectively.
Stock-Based Compensation
The Company accounts for its stock-based compensation plans under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB No. 25). Effective in 1996, the Company adopted the disclosure option of SFAS No. 123, "Accounting for Stock-Based Compensation." SFAS No. 123 requires companies that do not choose to account for stock-based compensation as prescribed by the statement to disclose the pro forma effects on net income and earnings per share as if SFAS No. 123 had been adopted. See Note 13 for the required disclosures.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 reported period. Actual results could differ from those estimates.
3. ACQUISITIONS
On January 31, 2001, the Company completed the first stage of the acquisition of Jacobs interests in 21 malls and two associated centers for total consideration of approximately $1.26 billion, including the acquisition of minority interests in certain properties. The purchase price was comprised of $124.5 million in cash, including closing costs of approximately $12 million; the assumption of $745.5 million in non-recourse mortgage debt; and the issuance of 12,056,692 special common units of the Operating Partnership with a value of $27.25 per unit. The cash portion was funded from a new $212 million unsecured credit facility provided by a consortium of banks led by Wells Fargo. The Company will close on the second stage in 2002, which will consist of cash of $0.3 million, the assumption of $25.7 million in non-recourse mortgage debt, and the issuance of 499,733 special common units of the Operating Partnership. The results of operations attributable to the properties acquired from Jacobs have been included in the consolidated statements of operations from the date of acquisition.
The following unaudited pro forma financial information for the year ended December 31, 2001 and 2000 present results for the Company as if the acquisition of the interests acquired on January 31, 2001 had occurred at January 1, 2000. The unaudited pro forma financial information neither purports to represent what the consolidated results of operations or financial condition actually would
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
have been had the acquisition and related transactions in fact occurred on the assumed date, nor purport to project the consolidated results of operations for any future period. Pro forma adjustments include depreciation of $1,871,000 and $22,455,000, interest expense of $835,000 and $10,516,000, management fees on properties accounted for under the equity method of accounting of $129,000 and $1,483,000 and minority interest in earnings in the Operating Partnership of $1,965,000 and $22,242,000 for the years ended December 31, 2001 and 2000, respectively. The proforma results are as follows (in thousands, except per share data):
For the Year December 31,
---------------------------
2001 2000
----------- -----------
Total revenues $ 560,101 $ 525,053
Total expenses 451,693 439,075
----------- -----------
Income from operations 108,408 85,978
Net income before extraordinary item 73,491 61,741
Net income available to common shareholders $ 53,465 $ 54,906
=========== ===========
Basic per share data
Net income before extraordinary item $ 2.64 $ 2.22
=========== ===========
Net income available to common shareholders $ 2.11 $ 2.21
=========== ===========
Diluted per share data:
Net income before extraordinary item $ 2.59 $ 2.21
=========== ===========
Net income available to common shareholders $ 2.07 $ 2.19
=========== ===========
|
In separate transactions the Company issued an additional 603,344 special common units valued at $16,441,000 and 31,008 common units of the Operating Partnership valued at $949,000 to purchase 50% and 25% interests in Madison Square Mall and Madison Plaza in Huntsville, Alabama, respectively. Prior to the acquisitions, the Company owned 50% and 75% interests in Madison Square and Madison Plaza, respectively.
4. UNCONSOLIDATED AFFILIATES
The Company has investments in seven partnerships and joint ventures, all of which are reflected on the equity method of accounting in the accompanying consolidated financial statements and consist of the following at December 31, 2001:
Company's
Partnership Property Name Interest
----------------------------- -------------------------------- ----------
Columbia Joint Venture Columbia Mall 48.0%(1)
Governor's Square IB Governor's Plaza 50.0%
Governor's Square Company Governor's Square 47.5%
Kentucky Oaks Mall Company Kentucky Oaks Mall 48.0%(1)
Mall Shopping Center Company Plaza del Sol 50.6%
Madison Joint Venture East Towne Mall, West Towne Mall 48.0%(1)
and West Towne Crossing
Parkway Place L.P. Parkway Place 50.0%
(1) Interests acquired in 2001
|
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
In January 2001 the Company acquired interests in three partnerships representing four malls and one associated center and discontinued the equity method of accounting for one partnership that owns Madison Square Mall in Huntsville, Alabama after acquiring a controlling interest in it. Condensed combined financial statement information of the partnerships and joint ventures is presented as follows (in thousands):
Year Ended December 31,
---------------------------
2001 2000
---------- ----------
ASSETS:
Net investment in real estate assets $ 359,361 $ 85,135
Other assets 11,077 4,445
---------- ----------
Total assets $ 370,438 $ 89,580
========== ==========
LIABILITIES :
Mortgage notes payable $ 229,687 $ 108,582
Other liabilities 11,264 2,317
---------- ----------
Total liabilities $ 240,951 $ 110,899
========== ==========
OWNER'S EQUITY (DEFICIT):
Company $ 77,673 $ (3,510)
Other investors 51,814 (17,809)
---------- ----------
Total owner's equity (deficit) 129,487 (21,319)
========== ==========
Total liabilities and owner's equity (deficit) $ 370,438 $ 89,580
========== ==========
|
Year Ended December 31,
----------------------------------------------
2001 2000 1999
----------- ----------- ----------
Revenues $ 55,779 $ 27,284 $ 26,859
Depreciation and amortization expense 7,707 3,080 3,253
Other operating expenses 18,326 8,255 8,398
Interest expense 14,619 8,397 8,757
----------- ----------- ----------
Operating income 15,127 7,562 6,451
Gain on sales of real estate assets 213 186 -
----------- ----------- ----------
Net income $ 15,340 $ 7,738 $ 6,451
=========== =========== ==========
Company's share of net income $ 7,155 $ 3,684 $ 3,263
=========== =========== ==========
|
In general, contributions and distributions of capital or cash flows and allocations of income and expense are made on a pro rata basis in proportion to the equity interest held by each general or limited partner. All debt on these properties is non-recourse.
5. MORTGAGE AND OTHER NOTES PAYABLE
Mortgage and other notes payable consist of the following at December 31, 2001 and 2000 (in thousands):
2001 2000
------------ -----------
Permanent loans $ 2,059,136 $1,193,685
Construction loans 40,553 84,652
Lines of credit 216,266 146,000
------------ -----------
Total $ 2,315,955 $1,424,337
============ ===========
|
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
Permanent Loans
Permanent loans consist of loans secured by properties held by the Company at December 31, 2001, with an asset carrying amount of $3,114,023,000. At December 31, 2001, permanent loans totaling $1,463,351,000 bear interest at fixed rates ranging from 6.65% to 10.625% weighted average interest rate of 7.5%0. Permanent loans totaling $595,785,000 bear interest at variable interest rates indexed to the prime lending rate or London Interbank Offered Rate ("LIBOR"). At December 31, 2001, interest rates applicable to variable rate debt varied from 3.03% to 4.75%, with a weighted average interest rate of 3.38%. Permanent loans mature at various dates from 2002 through 2016.
Construction Loans
At December 31, 2001, the Company had construction loans on two properties. The total commitment under the construction loans is $54,000,000 of which $40,553,000 is outstanding at December 31, 2001. The construction loans mature in 2003 and 2004, and bear interest at variable interest rates indexed to the prime lending rate or LIBOR. Interest rates on the construction loans ranged from 3.02% to 3.67%, with a weighted average interest rate of 3.26% at December 31, 2001.
Lines of Credit
The Company maintains line of credit agreements with banks for construction, acquisition, and working capital purposes. At December 31, 2001, the Company had $379,769,000 available under its line of credit agreements, of which $216,266,000 was outstanding. The lines expire at various dates from 2003 through 2004 and bear interest at variable rates indexed to the prime lending rate or LIBOR. Borrowings under the lines of credit had a weighted average interest rate of 3.20% at December 31, 2001. At December 31, 2001, additional lines of credit for the issuance of letters of credit only had $14,585,000 available with outstanding letters of credit totaling approximately $5,074,000. The line of credit agreements contain, among other restrictions, certain restrictive covenants including the maintenance of certain coverage ratios and minimum net worth and limitations on distributions. The Company was in compliance with all debt covenants on its lines of credit at December 31, 2001.
Debt Maturities
As of December 31, 2001, the scheduled principal payments on all mortgage
and other notes payable, including construction loans and lines of credit, are
as follows (in thousands):
2002 $ 385,791
2003 579,494
2004 118,959
2005 108,389
2005 157,479
Thereafter 965,843
-----------
Total $ 2,315,955
===========
|
6. MORTGAGE NOTES RECEIVABLE
Substantially all mortgage notes receivable are collateralized by wrap-around mortgages most of which are currently first mortgages on the underlying real estate and related improvements. Interest rates on notes receivable range from 7.5% to 8.75% at December 31, 2001. Maturities of notes receivable range from 2002 to 2019.
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
7. MINIMUM RENTS
Tenant leases are usually for 5 to 20 year periods and generally provide for renewals and annual rentals which are subject to upward adjustments based on tenant sales volume. Future minimum rents are scheduled to be received under noncancellable tenant leases at December 31, 2001, as follows (in thousands):
2002 $ 332,504 2003 299,113 2004 266,192 2005 230,228 2006 199,418 Thereafter 831,581 |
No single tenant collectively accounts for more than 10% of the Company's total revenues.
8. PREFERRED STOCK
The Company has authorized 5,000,000 shares of preferred stock of which 2,875,000 shares of 9% Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock") with a face value of $25.00 per share have been issued. The dividends on the Series A Preferred Stock are cumulative and accrue from the date of issue and are payable quarterly in arrears at a rate of $2.25 per share per annum. The Series A Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and is not redeemable prior to July 1, 2003. On or after July 1, 2003, the Company may redeem the Series A Preferred Stock, in whole or in part, at any time for a cash redemption price of $25.00 per share, plus dividends accrued and unpaid.
9. DERIVATIVE FINANCIAL INSTRUMENTS
The Company has only limited involvement with derivative financial instruments and does not use them for trading purposes. They are used to manage well defined interest rate risks.
Under interest rate swap agreements, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed rate and variable rate interest amounts calculated by reference to an agreed-upon notional amount. Under these agreements, the Company receives interest payments at a rate equal to LIBOR (5.33% at December 31, 2001) and pays interest at fixed rates shown below.
The Company has the following interest rate swaps in place at December 31, 2001, totaling $220 million:
Swap Amount Fixed LIBOR
(in millions) Component Effective Date Expiration Date
------------- ------------ -------------- ---------------
10 5.737% 01/03/2001 06/01/2002
5 5.737% 01/03/2001 06/01/2002
5 5.737% 01/03/2001 06/01/2002
10 5.737% 01/03/2001 06/01/2002
20 5.737% 01/03/2001 06/01/2002
20 4.670% 03/15/2001 09/26/2002
20 4.670% 03/15/2001 09/26/2002
20 4.670% 03/15/2001 09/26/2002
10 4.670% 03/15/2001 09/26/2002
10 4.670% 03/15/2001 09/26/2002
5 4.670% 03/15/2001 09/26/2002
5 4.670% 03/15/2001 09/26/2002
80 5.830% 12/22/2000 08/30/2003
|
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
The Company is exposed to credit losses in the event of nonperformance by the counterparties to its interest rate swap agreements. The Company anticipates, however, that counterparties will be able to fully satisfy their obligations under the contracts. The Company does not obtain collateral or other security to support financial instruments subject to credit risk but monitors the credit standing of counterparties.
Effective January 1, 2001 the Company determined that with the exception of two swaps that expired during the first quarter of 2001 the Company's derivative instruments were effective and qualified for hedge accounting in accordance with SFAS No. 133. The Company also determined that new swap agreements obtained in 2001 were effective and qualified for hedge accounting. The Company measured the effectiveness of these instruments in place during each quarter in the year ended December 31, 2001 and determined that the swap agreements continued to be highly effective and continued to qualify for hedge accounting. At December 31, 2001 the effective swap agreements were recorded on the consolidated balance sheet at their fair values of $6.8 million in accrued liabilities and accumulated other comprehensive loss. Over time, the unrealized gains and losses held in accumulated other comprehensive loss will be reclassified to earnings as interest expense as swap payments are made to the swap counterparties. This reclassification is consistent with the timing of when hedged items are recognized in earnings. Within the next twelve months, the Company expects to reclassify to earnings as interest expense an estimated $5.2 million of the current balance held in accumulated other comprehensive loss.
10. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of cash and cash equivalents, receivables, accounts payable, and accrued liabilities are reasonable estimates of their fair values because of the short maturity of these financial instruments. Based on the interest rates for similar financial instruments, the carrying value of mortgage notes receivable is a reasonable estimation of fair value. The carrying value of mortgage and other notes payable, based on borrowing rates currently available to the Company, is a reasonable estimation of fair value at December 31, 2001 and 2000.
11. CONVERSION RIGHTS
Pursuant to the Operating Partnership agreement, the limited partners have the right to convert their partnership interests in the Operating Partnership into shares of common stock, subject to certain limits, and to sell to the Company part or all of their partnership interest in the Operating Partnership in exchange for shares of common stock or their cash equivalent at the Company's election, as defined.
In connection with the acquisitions discussed in Note 3, the Operating Partnership issued 12,659,677 special common units in the Operating Partnership. After January 31, 2004 the special common units may be exchanged for shares of common stock or cash at the Company's election. The distribution rate for the special common units is $2.9025 per unit. The special common units receive a minimum distribution of $2.9025 per unit. When the distribution on the common units exceeds $2.9025 per unit, the special limited partnership units will receive a distribution equal to that paid on the common units.
The Operating Partnership acquired properties from CBL in exchange for 1,336 common units in the Operating Partnership valued at $27,000 during 2000. In October 1999 the Company issued 79,715 common units valued at $1,928,000 to a third party in exchange for land.
At December 31, 2001 and 2000, there remained outstanding rights to convert CBL's minority interest in the Operating Partnership to 8,884,728 and 8,884,728 shares of common stock, respectively. At December 31, 2001 and 2000, there remained outstanding rights to convert third parties' minority interests in the Operating Partnership to 2,972,486 and 2,941,360 shares of common stock, respectively. The total number of shares of Common Stock and Operating Partnership units was 350,134,000 and 36,893,000 at December 31, 2002 and 2000, respectivley.
12. 401(K) PROFIT SHARING PLAN
The Management Company maintains a 401(k) profit sharing plan, which is qualified under Section 401(a) and Section 401(k) of the Code to cover employees of the Management Company. All employees who have attained the age of 21 and have completed at least one year of service are eligible to participate in the plan. The plan provides for employer matching contributions on behalf of each participant equal to 50% of the portion of such participant's contribution which
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
does not exceed 2.5% of such participant's compensation for the plan year. Additionally, the Management Company has the discretion to make additional profit-sharing-type contributions not related to participant elective contributions. Total contributions by the Management Company were not significant for 2001, 2000, and 1999.
13. STOCK INCENTIVE PLAN
The Company maintains the CBL & Associates Properties, Inc. 1993 Stock Incentive Plan, as amended (the "Plan") which permits the issuance of stock options and common stock to selected officers, employees and directors of the Company. The shares available under the plan were increased from 2,800,000 to 4,000,000 during 2001. The Plan is administered by the Compensation Committee of the Board of Directors (the "Committee").
Stock options issued under the Plan allow for the purchase of common stock at the fair market value of the stock at the date of grant. Stock options granted to officers and employees under the Plan vest and become exercisable in installments on each of the first five anniversaries of the date of grant and expire ten years after the date of grant. Stock options granted to independent directors are fully vested upon grant, but may not be sold, pledged or otherwise transferred in any manner during the director's term or for one year thereafter.
The Company accounts for its stock-based compensation plans under APB No. 25, under which no compensation expense has been recognized for stock options granted as all employee options have been granted with an exercise price equal to the fair value of the Company's common stock on the date of grant. For SFAS No. 123 purposes, the fair value of each employee option grant has been estimated as of the date of grant using the Black-Sholes option pricing model and the following weighted average assumptions for 2001, 2000 and 1999.
2001 2000 1999
----------- ----------- ----------
Risk free interest rate 5.07% 6.65% 5.25%
Dividend yield 8.34% 8.98% 8.33%
Expected volatility 18.00% 17.00% 16.00%
Expected life 5.9 years 6.0 years 7.2 years
|
Using these assumptions, the fair value of the employee stock options granted in 2001, 2000 and 1999 is $568,000, $500,000 and $468,000, respectively, which would be amortized as compensation expense over the vesting period of the options. Had compensation cost for the Plan been determined in accordance with SFAS No. 123, utilizing the assumptions detailed above, the Company's pro forma net income and net income per share would have been as follows for the years ended December 31, 2001, 2000, and 1999, respectively (in thousands, except per share data):
2001 2000 1999
--------- --------- --------
Net income available to common shareholders:
As reported $ 54,440 $ 59,254 $ 48,127
Pro forma 53,825 58,585 47,458
Net income per share:
Basic as reported $ 2.15 $ 2.38 $ 1.95
Pro forma basic 2.12 2.35 1.93
Diluted as reported $ 2.11 $ 2.37 $ 1.94
Pro forma diluted 2.08 2.34 1.91
|
The pro forma effect on net income in this disclosure is not representative of the pro forma effect on net income in future years because it does not take into consideration pro forma compensation expense related to grants made prior to 1995.
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
A summary of the Company's stock option activity for 2001, 2000 and 1999 is as follows:
Weighted-Average
Shares Option Price Exercise Price
----------- ------------------- ----------------
Outstanding at December 31, 1998 1,923,250 $19.5625 - $25.6250 $21.64
Granted 382,500 $20.7200 - $24.5625 24.49
Exercised (71,200) $19.5625 - $23.6250 20.63
Lapsed (27,500) $19.6250 - $24.0940 22.40
-----------
Outstanding at December 31, 1999 2,207,050 $19.5625 - $25.6250 22.15
Granted 377,000 $23.7190 - $25.5625 23.73
Exercised (159,183) $19.5625 - $23.6250 20.50
Lapsed (60,050) $19.5625 - $23.7190 22.25
-----------
Outstanding at December 31, 2000 2,364,817 $19.5625 - $25.5625 22.51
Granted 378,500 $27.6750 - $31.3100 27.70
Exercised (375,350) $19.5625 - $24.5000 22.18
Lapsed (16,000) $23.7190 - $27.6750 24.57
-----------
Outstanding at December 31, 2001 2,351,967 $19.5625 - $31.3100 22.51
===========
|
The weighted-average fair value of options granted during 2001, 2000, and 1999 was $1.75, $1.54 and $1.22, respectively.
Shares subject to options outstanding at December 31, 2001, have a weighted-average remaining contractual life of 6.2 years. Of the options outstanding at December 31, 2001, 1,284,917 are currently exercisable with a weighted-average exercise price of $21.82 per share.
Under the Plan, common stock may be awarded either alone, in addition to, or in tandem with other stock awards granted under the Plan. The Committee has the authority to determine eligible persons to whom common stock will be awarded, the number of shares to be awarded, and the duration of the vesting period, as defined.
During 2001, the Company issued 69,735 shares of common stock under the Plan with a weighted-average grant-date fair value of $27.62 per share, of which 44,537 shares of common stock were immediately vested. The remaining 25,198 shares of common stock vest at various dates from 2002 to 2006.
During 2000, the Company issued 72,329 shares of common stock under the Plan with a weighted-average grant-date fair value of $22.59 per share, of which 36,606 shares of common stock were immediately vested. The remaining 35,723 shares of common stock vest at various dates from 2001 to 2005.
During 1999, the Company issued 38,989 shares of common stock under the Plan with a weighted-average grant-date fair value of $23.44 per share, of which 6,533 shares of common stock were immediately vested. The remaining 32,456 shares of common stock vest at various dates from 2000 to 2006.
14. RELATED PARTY TRANSACTIONS
CBL and certain officers of the Company have a significant minority interest in the construction company that has been engaged by the Company in the building of substantially all of the Company's properties. The Company paid approximately $94,300,000, $123,000,000 and $95,000,000 to the construction company in 2001, 2000, and 1999, respectively. Construction accounts payable to the construction company included in the accompanying consolidated balance sheets were $3,109,000 and $12,962,000 at December 31, 2001 and 2000, respectively.
The Management Company provides management and leasing services to affiliated partnerships and joint ventures not controlled by the Company. Revenue recognized for these services amounted to $1,450,000, $1,166,000 and $1,086,000 in 2001, 2000 and 1999, respectively.
CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
15. 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 position or results of operations of the Company. Additionally, based on environmental studies completed to date on the real estate properties, management believes exposure related to environmental cleanup will not be material to the financial position and results of operations of the Company.
16. DIVIDENDS
The allocations of dividends declared and paid for income tax purposes are
as follows:
Year Ended December 31,
---------------------------------------
2001 2000 1999
--------- --------- ---------
Dividends per common share $ 2.13 $ 2.04 $ 1.95
Allocations:
Ordinary income 95.63% 92.16% 88.00%
Capital gains 20% rate 0.13% 3.80% 0.00%
Capital gains 25% rate 4.24% 4.04% 0.00%
Return of capital 0.00% 0.00% 12.00%
--------- --------- ---------
Total 100.00% 100.00% 100.00%
========= ========= =========
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CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
17. 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):
Associated Community
Year Ended December 31, 2001 Malls Centers Centers All Other Total
--------------------------------------------- -------------- ----------- ----------- ----------- -----------
Revenues $ 450,103 $ 16,548 $ 68,847 $ 8,877 $ 544,375
Property operating expenses (1) (154,265) (3,813) (15,857) 503 (173,432)
Interest expense (123,986) (4,555) (14,131) (11,805) (154,477)
Gain on sales of real estate assets 132 - 8,381 2,136 10,649
-------------- ----------- ----------- ----------- -----------
Segment profit and loss $ 171,984 $ 8,180 $ 47,240 $ (289) 227,115
============== =========== =========== ===========
Depreciation and amortization (87,624)
General, administrative and other (20,839)
Equity in earnings and minority interest (44,186)
-----------
Income before extraordinary item $ 74,466
===========
Total assets (2) $2,731,310 $ 124,897 $ 445,335 $ 71,309 $3,372,851
Capital expenditures (2) $ 83,411 $ 13,053 $ 64,223 $ 13,240 $ 173,927
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Associated Community
Year Ended December 31, 2000 Malls Centers Centers All Other Total
--------------------------------------------- -------------- ----------- ----------- ----------- -----------
Revenues $ 267,150 $ 14,831 $ 66,649 $ 7,858 $ 356,488
Property operating expenses (1) (90,889) (2,675) (14,451) 1,124 (106,891)
Interest expense (74,105) (3,804) (13,240) (3,448) (94,597)
Gain on sales of real estate assets (400) - 10,617 5,772 15,989
-------------- ----------- ----------- ----------- -----------
Segement profit and loss $ 101,756 $ 8,352 $ 49,575 $ 11,306 170,989
============== =========== =========== ===========
Depreciation and amortization (60,646)
General, administrative and other (17,893)
Equity in earnings and minority interest (26,361)
-----------
Income before extraordinary item $ 66,089
===========
Total assets (2) $1,450,948 $ 120,178 $ 453,749 $ 90,690 $2,115,565
Capital expenditures (2) $ 83,411 $ 13,053 $ 64,223 $ 13,240 $ 173,927
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Associated Community
Year Ended December 31, 1999 Malls Centers Centers All Other Total
--------------------------------------------- -------------- ----------- ----------- ----------- -----------
Revenues $ 234,207 $ 12,288 $ 60,223 $ 10,885 $ 317,603
Property operating expenses (1) (83,672) (2,404) (11,311) 1,192 (96,195)
Interest expense (62,678) (2,693) (12,540) (4,594) (82,505)
Gain on sales of real estate assets (1,273) - 1,208 8,422 8,357
-------------- ----------- ----------- ----------- -----------
Segement profit and loss $ 86,584 $ 7,191 $ 37,580 $ 15,905 147,260
============== =========== =========== ===========
Depreciation and amortization (53,551)
General, administrative and other (17,888)
Equity in earnings and minority interest (21,226)
-----------
Income before extraordinary item $ 54,595
===========
Total assets (2) $ 1,400,793 $ 103,424 $ 451,165 $ 63,456 $2,018,838
Capital expenditures (2) $ 142,789 $ 7,426 $ 25,003 $ 26,040 $ 201,258
(1) Property operating expenses include property operating, real estate taxes
and maintenance and repairs.
(2) Developments in progress are included in the All Other category.
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CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
18. COMPREHENSIVE INCOME
Comprehensive income consisted of the following components for the years ended December 31, 2001, 2000 and 1999, respectively (in thousands):
Year Ended December 31,
------------------------------------------
2001 2000 1999
-------- -------- --------
Net Income $ 60,908 $ 65,722 $ 54,595
Loss on current period cash flow hedges (6,178) - -
-------- -------- --------
Total $54,124 $ 65,722 $ 54,595
======== ======== ========
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19. OPERATING PARTNERSHIP
Condensed consolidated financial statement information for the Operating Partnership is presented as follows (in thousands):
Year Ended December 31,
-------------------------------
2001 2000
------------- ------------
ASSETS:
Net investment in real estate $ 3,201,622 $ 2,040,614
Investment in unconsolidated affiliates 78,211 -
Other Assets 80,700 74,485
------------- ------------
Total assets $ 3,360,533 $ 2,115,099
============= ============
LIABILITIES:
Mortgage notes payable $ 2,315,955 $ 1,424,338
Other liabilities 90,066 65,443
------------- ------------
Total liabilities 2,406,021 1,489,781
Distributions and losses in excess - 2,972
of investment in unconsolidated affiliates
Minority Interest 2,213 1,301
OWNERS' EQUITY:
Other investors 952,299 621,045
------------- ------------
Total liabilities and owner's equity $ 3,360,533 $ 2,115,099
============= ============
|
Year Ended December 31,
-------------------------------------------------
2001 2000 1999
----------- ----------- ----------
Revenues $ 544,371 $ 356,488 $ 317,603
Depreciation and amortization expense 87,624 60,646 53,551
Other operating expenses 348,319 218,545 195,882
----------- ----------- ----------
Operating income 108,428 77,297 68,170
Gain on sales of real estate assets 10,649 15,989 8,357
Equity in earnings of unconsolidated 7,155 3,684 3,263
affiliates
Minority investors' interest (1,698) (1,538) (1,225)
----------- ----------- ----------
Income before extraordinary item 124,534 95,432 78,565
Extraordinary loss on extinguishment of (13,558) (367) -
debt
----------- ----------- ----------
Net income $ 110,976 $ 95,065 $ 78,565
=========== =========== ==========
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CBL & Associates Properties, Inc. - 2001 Form 10K Notes To Consolidated Financial Statements
20. QUARTERLY INFORMATION (UNAUDITED) (in thousands, except per
share amounts)
First Second Third Fourth
2001 Quarter Quarter Quarter Quarter Total(1)
---------- ---------- ----------- ----------- ----------
Total revenues $ 121,155 $ 134,822 $ 138,514 $ 149,884 $ 544,375
Income from operations 23,739 25,644 26,853 31,767 108,003
Income before extraordinary item 16,797 15,445 21,479 20,745 74,466
Net income available to common 15,180 12,126 8,241 18,893 54,440
shareholders
Basic per share data:
Income before extraordinary item $ 0.60 $ 0.55 $ 0.78 $ 0.75 $ 2.68
Net income $ 0.60 $ 0.48 $ 0.32 $ 0.74 $ 2.15
Diluted per share data:
Income before extraordinary item $ 0.60 $ 0.54 $ 0.76 $ 0.73 $ 2.63
Net income $ 0.60 $ 0.47 $ 0.32 $ 0.72 $ 2.11
2000
Total revenue $ 88,009 $ 86,857 $ 88,621 $ 93,001 $ 356,488
Income from operations 18,967 18,215 18,657 20,622 76,461
Income before extraordinary item 15,967 17,112 16,252 16,758 66,089
Net income available to common 14,350 15,358 14,551 14,995 59,254
shareholders
Basic per share data:
Income before extraordinary item $ 0.58 $ 0.62 $ 0.59 $ 0.61 $ 2.40
Net income $ 0.58 $ 0.62 $ 0.58 $ 0.60 $ 2.38
Diluted per share data:
Income before extraordinary item $ 0.58 $ 0.62 $ 0.58 $ 0.60 $ 2.38
Net income $ 0.58 $ 0.62 $ 0.58 $ 0.60 $ 2.37
(1) The sum of quarterly earnings per share amounts may differ from annual earnings per share due to rounding.
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CBL & Associates Properties, Inc. - 2001 Form 10K
CBL & Associates Properties, Inc.
Schedule II Allowance for Credit Losses (in thousands)
Year Ended December 31,
------------------------------------
2001 2000 1999
--------- --------- ---------
Balance Of Allowance At Beginning Of Year $ 1,854 $ 1,854 $ 1,950
Provision For Credit Losses 5,947 1,380 341
Bad Debt Charged Against Allowance (4,936) (1,380) (437)
--------- --------- ---------
Balance Allowance At End Of Year $ 2,865 $ 1,854 $ 1,854
========= ========= =========
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CBL & Associates Properties, Inc. - 2001 Form 10K
SCHEDULE III
CBL & ASSOCIATES PROPERTIES, INC.
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
December 31, 2001
(Dollars in Thousands)
Gross Amounts at Which
Carried at Close of Period
Initial Cost(A) --------------------------
--------------------
Costs (D)
Buildings Capitalized Buildings Accumu- Date of
(B) and Subsequent to Sales of and lated Const-
Encumbr- Improv- Acquisition Outparcel Improve- Depre- ruction/
Description /Location ances Land ments Improvements Land Land ments Total(C) ciation Purchase
--------------------- -------- -------- ---------- -------------- ---------- ------- --------- -------- -------- ---------
MALLS
Arbor Place $99,300 $7,637 $95,330 $10,802 ---- $7,637 $106,132 $113,769 $9,725 1998-1999
Douglasville, GA
Asheville Mall 71,073 7,139 58,747 31,826 464 6,675 90,573 97,248 6,856 1998
Asheville, NC
Bonita Lakes Mall 28,374 4,924 31,933 4,627 ---- 4,924 36,560 41,484 6,149 1997
Meridian, MS
Brookfield Square 75,160 8,646 78,703 ---- ---- 8,646 78,703 87,349 1,862 2001
Brookfield, WI
Burnsville Center 73,182 12,804 69,167 6,588 ---- 12,804 75,755 88,559 7,742 1998
Burnsville, MN
Cary Towne Center 62,041 23,688 74,432 ---- ---- 23,688 74,432 98,120 1,761 2001
Cary, NC
Cherryvale Mall 48,093 11,892 63,973 ---- ---- 11,892 63,973 75,865 1,496 2001
Rockford, IL
Citadel Mall 41,776 11,443 44,008 ---- ---- 11,443 44,008 55,451 1,034 2001
Charleston, SC
College Square 13,971 2,954 17,787 9,237 27 2,927 27,024 29,951 7,816 1987-1988
Morristown, TN
Coolsprings Gallera 63,327 13,527 86,755 23,538 ---- 13,527 110,293 123,820 27,673 1989-1991
Nashville, TN
Eastgate Mall 42,000 13,046 44,949 ---- ---- 13,046 44,949 57,995 1,053 2001
Cincinnati, OH
Fashion Square 59,430 15,218 64,971 ---- ---- 15,218 64,971 80,189 1,438 2001
Saginaw, MI
Fayette Mall 97,594 20,707 84,267 ---- ---- 20,707 84,267 104,974 1,969 2001
Lexington, KY
Frontier Mall ---- 2,681 15,858 8,675 ---- 2,681 24,533 27,214 8,889 1984-1985
Cheyenne, WY
Foothills Mall 26,219 4,537 15,226 5,906 ---- 4,537 21,132 25,669 5,438 1996
Maryville, TN
Georgia Square (E) ---- 2,982 31,071 9,661 23 2,959 40,732 43,691 12,852 1982
Athens, GA
Hamilton Place 68,761 2,880 42,211 14,207 441 2,439 56,418 58,857 16,679 1986-1987
Chattanooga, TN
Hanes Mall 116,291 17,176 133,376 ---- ---- 17,176 133,376 150,552 3,103 2001
Winston-Salem, NC
Hickory Hollow Mall 92,447 13,813 111,431 3,342 ---- 13,813 114,773 128,586 10,212 1998
Nashville, TN
JCPenney(E) ---- ---- 2,650 ---- ---- 0 2,650 2,650 1,148 1983
Maryville, TN
Janesville Mall 15,473 8,074 26,009 34 ---- 8,074 26,043 34,117 2,426 1998
Janesville, WI
Jefferson Mall 40,000 13,125 40,234 ---- ---- 13,125 40,234 53,359 947 2001
Louisville, KY
The Lakes Mall 31,555 3,328 42,366 ---- ---- 3,328 42,366 45,694 734 2000-2001
Muskegon, MI
Lakeshore Mall (E) ---- 1,443 28,819 3,817 169 1,274 32,636 33,910 7,614 1991-1992
Sebring, FL
79
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CBL & Associates Properties, Inc. - 2001 Form 10K
Madison Square 47,099 17,596 39,186 ---- ---- 17,596 39,186 56,782 904 1984
Hunstville, AL
Meridian Mall 105,706 529 103,678 42,659 ---- 529 146,337 146,866 9,757 1998
Lansing, MI
Midland Mall 35,000 10,321 29,429 ---- ---- 10,321 29,429 39,750 678 2001
Midland, MI
Northwoods Mall 56,280 14,867 49,647 ---- ---- 14,867 49,647 64,514 1,151 2001
Charleston, SC
Oak Hollow Mall 48,463 4,344 52,904 2,504 ---- 4,344 55,408 59,752 10,706 1994-1995
High Point, NC
Old Hickory Mall 21,731 15,527 29,413 ---- ---- 15,527 29,413 44,940 662 2001
Jackson, TN
Parkdale Mall 45,000 20,723 47,390 ---- ---- 20,723 47,390 68,113 1,107 2001
Beaumont, TX
Pemberton Square (E) ---- 1,191 14,305 1,599 947 244 15,904 16,148 6,009 1986
Vicksburg, MS
Post Oak Mall (E) ---- 3,936 48,948 (8,712) 327 3,609 40,236 43,845 9,361 1984-1985
College Station, TX
Randolph Mall ---- 4,547 13,927 ---- ---- 4,547 13,927 18,474 321 2001
Asheboro, NC
Regency Mall ---- 3,384 36,839 ---- ---- 3,384 36,839 40,223 859 2001
Racine, WI
Rivergate Mall 74,715 17,896 86,767 12,718 ---- 17,896 99,485 117,381 8,847 1998
Nashville, TN
Springdale Mall 24,466 19,538 6,676 23,394 ---- 19,538 30,070 49,608 1,448 1997
Mobile, AL
Stroud Mall 32,290 14,711 23,936 1,597 ---- 14,711 25,533 40,244 2,435 1998
Stroudsburg, PA
St. Clair Square 71,753 11,028 75,581 5,802 ---- 11,028 81,383 92,411 10,331 1996
Fairview Heights, IL
Towne Mall ---- 3,101 17,033 ---- ---- 3,101 17,033 20,134 394 2001
Franklin, OH
Turtle Creek Mall 32,316 2,345 26,418 5,926 ---- 3,535 32,344 35,879 8,761 1993-1995
Hattiesburg, MS
Twin Peaks (E) ---- 1,873 22,022 16,867 46 1,827 38,889 40,716 13,843 1984
Longmont,CO
Walnut Square (E) 656 50 15,138 5,238 ---- 50 20,376 20,426 8,621 1984-1985
Dalton,GA
Wausau Center 14,228 5,231 24,705 ---- ---- 5,231 24,705 29,936 572 2001
Wausau, WI
Westgate Mall 45,101 2,150 23,257 40,174 407 1,743 63,431 65,174 11,090 1995
Spartanburg, SC
York Galleria 51,656 5,757 63,316 1,550 ---- 5,757 64,866 70,623 4,045 1995
York, PA
ASSOCIATED CENTERS
Bonita Crossing 8,910 794 4,786 7,088 ---- 794 11,874 12,668 1,156 1997
Meridian, MS
Coolsprings Xing (E) ---- 2,803 14,985 1,035 ---- 3,554 16,020 19,574 4,080 1991-1993
Nashville, TN
80
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CBL & Associates Properties, Inc. - 2001 Form 10K
Courtyard at Hickory 4,304 3,314 2,771 114 ---- 3,314 2,885 6,199 247 1998
Hollow
Nashville, TN
Eastgate Crossing ---- 707 2,424 ---- ---- 707 2,424 3,131 55 2001
Cincinnati, OH
Foothills Plaza (E) ---- 132 2,123 511 ---- 148 2,634 2,782 1,138 1984-1988
Maryville, TN
Foothills Plaza ---- 137 1,960 226 ---- 141 2,186 2,327 675 1984-1988
Expansion
Maryville, TN
Frontier Square ---- 346 684 178 86 260 862 1,122 301 1985
Cheyenne, WY
General Cinema ---- 100 1,082 14 ---- 100 1,096 1,196 603 1984
Athens, GA
Hamilton Corner 2,895 960 3,670 541 226 734 4,211 4,945 1,316 1986-1987
Chattanooga, TN
Hamilton Crossing ---- 4,014 5,906 496 1,370 2,644 6,402 9,046 2,040 1987
Chattanooga, TN
Hamilton Place ---- 322 408 57 ---- 322 465 787 42 1998
Outparcel
Chattanooga, TN
The Landing at Arbor 11,162 4,993 14,330 582 ---- 4,993 14,912 19,905 1,227 1998-1999
Place
Douglasville, GA
Madison Plaza 1,041 473 2,888 1,023 ---- 473 3,911 4,384 1,250 1984
Hunstville, AL
Pemberton Plaza ---- ---- 662 892 ---- 0 1,554 1,554 425 1986
Vicksburg, MS
The Terrace 9,841 4,166 9,729 4 ---- 4,166 9,733 13,899 1,169 1997
Chattanooga, TN
Village at Rivergate 3,529 2,641 2,808 598 ---- 2,641 3,406 6,047 309 1998
Nashville, TN
Westgate Crossing 9,810 1,082 3,422 6,365 ---- 1,082 9,787 10,869 1,372 1997
Spartanburg, SC
COMMUNITY CENTERS
Anderson Plaza ---- 198 1,316 1,558 ---- 198 2,874 3,072 806 1983
Greenwood, SC
Bartow Plaza ---- 224 2,010 225 ---- 224 2,235 2,459 679 1989
Bartow, FL
Beach Xing ---- 725 1,749 135 102 623 1,884 2,507 655 1984
Myrtle Beach, SC
BJ's Wholesale 2,952 170 4,735 13 ---- 170 4,748 4,918 1,224 1991
Portland, ME
Briarcliff Sq 1,489 299 1,936 64 32 267 2,000 2,267 619 1989
Oak Ridge, TN
Buena Vista Plaza ---- 980 1,943 (578) 376 754 1,365 2,119 297 1988-1989
Columbus, GA
Bullock Plaza ---- 98 1,493 101 ---- 98 1,594 1,692 585 1986
Statesboro, GA
81
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CBL & Associates Properties, Inc. - 2001 Form 10K
Capital Crossing ---- 1,908 756 1,628 ---- 2,544 2,384 4,928 352 1995
Raleigh, NC
Cedar Bluff 1,014 412 2,128 906 ---- 412 3,034 3,446 1,064 1987
Knoxville, TN
Cedar Springs Crossing ---- 206 1,845 142 ---- 206 1,987 2,193 636 1988
Cedar Springs, MI
Chesterfield Crossing 8,250 1,580 11,243 927 ---- 1,580 12,170 13,750 370 2000
Richmond, VA
Chester Plaza ---- 165 720 2 ---- 165 722 887 78 1997
Chester, VA
Chestnut Hills (E) ---- 600 1,775 344 ---- 600 2,119 2,719 493 1992
Murray, KY
Coastal Way 9,687 3,356 9,335 16 ---- 3,356 9,351 12,707 333 ????
Spring Hill, FL
Colleton Square 848 190 1,349 43 34 156 1,392 1,548 518 1986
Walterboro, SC
Collins Park Commons 678 25 1,858 19 ---- 25 1,877 1,902 587 1989
Plant City, FL
Conway Plaza ---- 110 1,071 926 110 0 1,997 1,997 720 1984
Conway, SC
Cortlandt Towne Center 50,964 17,010 80,809 2,664 1,898 15,112 83,473 98,585 8,505 1996
Cortlandt, NY
Cosby Station 3,800 999 4,516 612 ---- 999 5,128 6,127 988 1993-1994
Douglasville, GA
County Park Plaza ---- 196 1,500 435 56 140 1,935 2,075 615 1980
Scottsboro, AL
Devonshire Place ---- 371 3,449 2,357 ---- 520 5,806 6,326 835 1995-1996
Cary, NC
E Ridge Xing (E) ---- 832 2,494 1,606 101 731 4,100 4,831 1,060 1988
East Ridge, TN
Eastowne Xing (E) ---- 867 2,765 1,933 81 786 4,698 5,484 1,311 1989
Knoxville, TN
Fifty Eight Xing (E) ---- 839 2,360 53 96 743 2,413 3,156 806 1988
Chattanooga, TN
Garden City Plaza (E) ---- 1,056 2,569 1,080 476 580 3,649 4,229 1,425 1984
Garden City, KS
Girvin Plaza ---- 898 1,998 1,266 196 702 3,264 3,966 615 1989-1990
Jacksonville, FL
Greenport Towne Ctr 4,004 659 6,161 (217) ---- 659 5,944 6,603 1,150 1993-1994
Hudson, NY
Gunbarrel Pointe 11,975 4,170 10,874 229 ---- 4,170 11,103 15,273 361 2000
Chattanooga, TN
Hampton Plaza ---- 973 2,689 58 8 965 2,747 3,712 772 1989-1990
Tampa, FL
Henderson Square 6,026 428 8,074 364 188 240 8,438 8,678 1,446 1994-1995
Henderson, NC
Jasper Square (E) ---- 235 1,423 1,727 ---- 235 3,150 3,385 954 1986
Jasper, AL
82
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CBL & Associates Properties, Inc. - 2001 Form 10K
Keystone Xing ---- 938 2,216 97 113 825 2,313 3,138 829 1989
Tampa, FL
Kingston Overlook ---- 1,693 5,664 1,576 ---- 2,105 7,240 9,345 909 1996
Knoxville, TN
Lady's Island (E) ---- 300 2,323 329 8 292 2,652 2,944 612 1992
Beaufort, SC
LaGrange Commons ---- 835 5,765 635 ---- 835 6,400 7,235 840 1995-1996
LaGrange, NY
Lionshead Village ---- 3,674 4,153 3,065 ---- 3,674 7,218 10,892 511 1998
Nashville, TN
Longview Xing 379 ---- 1,308 446 ---- 0 1,754 1,754 451 1988
Longview, NC
Lunenburg Crossing ---- 1,020 2,308 (9) ---- 1,020 2,299 3,319 413 1993-1994
Lunenburg, MA
Marketplace at Flower ---- 2,269 8,820 111 ---- 2,269 8,931 11,200 403 2000
Mound
Flowermound, TX
Massard Crossing ---- 843 5,726 784 ---- 843 6,510 7,353 734 1997
Fort Smith, AR
North Haven Xing 6,132 3,229 8,061 63 ---- 3,229 8,124 11,353 1,733 1992-1993
North Haven, CT
Northcreek Plaza ---- 98 1,201 51 ---- 98 1,252 1,350 303 1983
Greenwood, SC
Northridge Plza (E) ---- 1,087 2,970 1,876 ---- 1,244 4,846 6,090 1,907 1984
Hilton Head, SC
Northwoods Plaza 1,119 496 1,403 106 ---- 496 1,509 2,005 368 1995
Albemarle, NC
Oaks Crossing ---- 571 2,885 (1,492) ---- 655 1,393 2,048 448 1988
Otsego, MI
Orange Plaza ---- 395 2,111 126 ---- 395 2,237 2,632 535 1992
Roanoke, VA
Park Place 571 ---- 3,590 604 ---- 230 4,194 4,424 1,735 1984
Chattanooga, TN
Perimeter Place 1,240 764 2,049 279 ---- 770 2,328 3,098 933 1985
Chattanooga, TN
Rawlinson Place ---- 279 1,573 76 ---- 292 1,649 1,941 590 1987
Rock Hill, SC
Rhett @ Remount ---- 67 1,877 883 ---- 67 2,760 2,827 1,112 1992
Charleston, SC
Salem Crossing ---- 2,385 7,094 (299) ---- 2,385 6,795 9,180 831 1997
Virginia Beach, VA
Sattler Square (E) ---- 792 4,155 389 87 705 4,544 5,249 1,383 1988-1989
Big Rapids, MI
Seacoast Shopping 5,254 1,374 4,164 2,730 179 1,195 6,894 8,089 1,711 1991
Center
Seabrook, NH
Shenandoah Crossing 476 122 1,382 76 7 115 1,458 1,573 474 1988
Roanoke, VA
Signal Hills Vill ---- ---- 579 488 ---- 0 1,067 1,067 355 1983-1984
Statesville, NC
83
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CBL & Associates Properties, Inc. - 2001 Form 10K
Southgate Xing ---- ---- 1,002 25 ---- 0 1,027 1,027 387 1984-1985
Bristol, TN
Springhurst Towne 21,830 7,424 30,672 6,796 ---- 7,463 37,429 44,892 3,824 1997
Center
Louisville, KY
Springs Crossing ---- ---- 1,422 932 ---- 0 2,354 2,354 734 1987
Hickory, NC
Statesboro Square ---- 237 1,643 169 10 227 1,812 2,039 700 1986
Statesboro, GA
Stone East Plz (E) ---- 266 1,635 305 49 217 1,940 2,157 786 1987
Kingsport, TN
Strawbridge MK Place ---- 1,969 2,492 ---- ---- 1,969 2,492 4,461 312 1997
Strawbridge, VA
Suburban Plaza 8,342 3,223 3,796 3,271 ---- 3,223 7,067 10,290 1,444 1995
Knoxville, TN
Uvalde Plaza 595 574 1,506 26 255 319 1,532 1,851 554 1987
Uvalde, TX
Valley Commons 824 342 1,819 639 ---- 342 2,458 2,800 827 1988
Salem, VA
Valley Xing (E) ---- 2,390 6,471 5,188 37 3,034 11,659 14,693 3,011 1988
Hickory, NC
Village at Wexford ---- 555 3,009 197 ---- 501 3,206 3,707 950 1989-1990
Cadillac, MI
Village Square ---- 750 3,591 (233) ---- 142 3,358 3,500 1,069 1989-1990
Houghton Lake, MI
Willow Springs 4,056 2,917 6,107 5,017 ---- 2,917 11,124 14,041 2,255 1991
Nashua, NH
Willowbrook Plaza 33,065 4,543 40,356 ---- ---- 4,542 40,356 44,898 988 2001
Houston, TX
34th St Xing 1,354 1,102 2,743 164 79 1,023 2,907 3,930 907 1989
St. Petersburg, FL
DISPOSALS
Bennington Place ---- 256 1,754 (2,010) ---- ---- ---- ---- ---- 1988
Roanoke, VA
Creekwood Crossing ---- 1,994 18,226 (20,220) ---- ---- ---- ---- ---- 2000
Bradenton, FL
Jean Ribaut Kmart ---- 317 2,065 (2,382) ---- ---- ---- ---- ---- 1983-1984
Beaufort, SC
Jean Ribaut Square ---- 505 4,007 (4,512) ---- ---- ---- ---- ---- 1983
Beaufort, SC
Park Village ---- 586 2,874 (3,460) ---- ---- ---- ---- ---- 1990
Lakeland, FL
Sand Lake Corners ---- 3,182 15,952 (19,134) ---- ---- ---- ---- ---- 1998-1999
Orlando, FL
Sutton Plaza ---- 1,042 4,671 (5,713) ---- ---- ---- ---- ---- 1997
Mt. Olive, NJ
84
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CBL & Associates Properties, Inc. - 2001 Form 10K
OTHER
High Point, NC - Land ---- ---- ---- 2,764 ---- 498 1,871 2,369 518 ----
Shops at Soncey ---- 3,270 ---- ---- ---- 3,270 ---- 3,270
Temple, TX
Developments in
Progress Consisting
of Construction
and Development
Properties (F) 205,012 2,955 ---- (2,297) ---- 227 (80) 147 772 ----
---------- -------- ---------- -------------- -------- -------- --------- ---------- ---------
TOTALS $2,315,955 $535,702 $2,649,559 $291,618 $9,111 $520,334 $2,961,185 $3,481,519 $346,940
========== ======== ========== ============== ======== ======== ========== ========== =========
(A) Initial cost represents the total cost capitalized including carrying cost at the end of the first fiscal year in which the
property opened or was acquired.
(B) Encumbrances represent the mortgage notes payable balance at December 31, 2001.
(C) The aggregate cost of land and buildings and improvements for federal income tax purposes is approximately $3.0346 billion.
(D) Depreciation for all properties is computed over the useful life which is generally forty years.
(E) Property is pledged as collateral on the secured lines of credit used for development properties.
(F) Includes non-property mortgages and credit line mortgages.
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CBL & Associates Properties, Inc. - 2001 Form 10K
CBL & ASSOCIATES PROPERTIES, INC.
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
The changes in real estate assets and accumulated depreciation for the years ending December 31, 2001, 2000, and 1999 is set forth below: (in thousands).
2001 2000 1999
---------- ---------- ----------
REAL ESTATE ASSETS:
Balance at beginning of period $2,311,660 $2,184,102 $1,982,843
Additions during the period:
Additions and improvements 137,949 173,916 180,094
Acquisitions of real estate assets 890,385 11,089 69,027
Acquisitions of real estate assets with 289,373 -- --
limited partnership interest
Deductions during the period:
Cost of sales (78,774) (57,320) (46,188)
Write-off of development projects (2,031) (127) (1,674)
---------- ---------- ----------
Balance at end of period $3,548,562 $2,311,660 $2,184,102
========== ========== ==========
ACCUMULATED DEPRECIATION:
Balance at beginning of period $271,046 $223,548 $177,055
Accumulated depreciation on properties sold (9,248) (6,193) (6,640)
Depreciation expense 85,142 53,691 53,133
---------- ---------- ----------
Balance at end of period $346,940 $271,046 $223,548
========== ========== ==========
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CBL & Associates Properties, Inc. - 2001 Form 10K
Schedule IV
CBL & ASSOCIATES PROPERTIES, INC.
MORTGAGE LOANS ON REAL ESTATE
AT DECEMBER 31, 2001
(Dollars in thousands)
Principal
Amount of
Carrying Mortgages
Monthly Balloon Face Amount Subject to
Final Payment Payment Amount Of Delinquent
Interest Maturity Amount at Prior of Mortgage Principal
Name of Center/Location Rate Date (1) Maturity Liens Mortgage (2) or Interest
------------------------------ ---------- --------- --------- ---------- -------- --------- ---------- ------------
Bi-Lo South 9.50% 08/06 $22 $0 None $1,206 $ 999 $0
Cleveland, TN
Gaston Square 7.50% 06/19 16 0 None 1,870 1,832 0
Gastonia, NC
Inlet Crossing 7.50% 06/19 24 0 None 2,830 2,805 0
Myrtle Beach, SC
Olde Brainerd Centre 9.50% 12/06 4 0 None 14 14 0
Chattanooga, TN
Signal Hills Plaza 7.50% 06/19 5 0 None 650 642 0
Statesville, NC
Soddy Daisy Plaza 9.50% 12/06 4 0 None 172 56 0
Soddy Daisy, TN
Park Village 8.25% 08/10 7 0 None 1,270 1,270 0
Lakeland, FL
University Crossing 8.75% 02/10 7 0 None 512 507 0
Pubelo, CO
Other 10.00% 02/01- 0 2,509 2,509 2,509 0
09/07
--------- ---------- --------- ---------- ------------
$102 $2,509 $11,033 10,634 $0
========= ========== ========= ========== ============
(1) Equal monthly installments comprised of principal and interest unless otherwise noted.
(2) The aggregate carrying value for federal income tax purposes is approximately $10,634 at December 31, 2001.
|
The changes in mortgage notes receivable for the years ending December 31, 2001, 2000, and 1999 is set forth below: (in thousands).
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2001 2000 1999
------------ ------------ ------------
Beginning Balance $8,756 $9,385 $9,118
Additions 2,874 825 1,690
Payments (996) (1,454) (1,423)
------------ ------------ ------------
Ending Balance $10,634 $8,756 $9,385
============ ============ ============
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(3) Exhibits
Exhibit
Number Description
3.1 -- Amended and Restated Certificate of Incorporation of the
Company, dated November 2, 1993(a)
3.2 -- Amended and Restated Bylaws of the Company, dated
October 27, 1993(a)
3.3 -- Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, dated May 2, 1996, see page 94
3.4 -- Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, dated January 31, 2001,
see page 106
4.1 -- See Amended and Restated Certificate of Incorporation of the
Company, relating to the Common Stock(a)
4.2 -- Certificate of Designations, dated June 25, 1998, relating to
the 9% Series A Cumulative Redeemable Preferred Stock, see
page 110
4.3 -- Certificate of Designation, dated April 30, 1999, relating to
the Series 1999 Junior Participating Preferred Stock, see page 117
4.4 -- Terms of Series J Special Common Units of the Operating
Partnership, pursuant to Article 4.4 of the Second Amended and
Restated Partnership Agreement of the Operating Partnership,
see page 123
10.1.1 -- Second Amended and Restated Agreement of the Operating
Partnership dated June 30, 1998(p)
10.1.2 -- First Amendment to Second Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, dated
January 31, 2001, see page 134
10.2.1 -- Rights Agreement by and between the Company and BankBoston,
N.A., dated as of April 30, 1999(q)
10.2.2 -- Amendment No. 1 to Rights Agreement by and between the Company
and SunTrust Bank(successor to BankBoston), dated
January 31, 2001, see page 158
10.3 -- Property Management Agreement between the Operating Partnership
and the Management Company(a)
10.4 -- Property Management Agreement relating to Retained Properties(a)
10.5.1 -- CBL & Associates Properties, Inc. 1993 Stock Incentive Plan(a)+
10.5.2 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Charles B. Lebovitz+
10.5.3 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
James L. Wolford+
10.5.4 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
John N. Foy+
10.5.5 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Jay Wiston+
10.5.6 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Ben S. Landress+
10.5.7 -- Non-Qualified Stock Option Agreement, dated May 10, 1994, for
Stephen D. Lebovitz+
|
CBL & Associates Properties, Inc. - 2001 Form 10K
10.5.8 -- Stock Restriction Agreement, dated December 28, 1994, for
Charles B. Lebovitz+
10.5.9 -- Stock Restriction Agreement, dated December 2, 1994, for
John N. Foy+
10.5.10 -- Stock Restriction Agreement, dated December 2, 1994, for
Jay Wiston+
10.5.11 -- Stock Restriction Agreement, dated December 2, 1994, for
Ben S. Landress+
10.5.12 -- Stock Restriction Agreement, dated December 2, 1994, for
Stephen D. Lebovitz+
10.6.1 -- Purchase Agreement relating to Frontier Mall(b)
10.6.2 -- Purchase Agreement relating to Georgia Square (JMB)(b)
10.6.3 -- Purchase Agreement Relating to Georgia Square (JCPenney)(b)
10.6.4 -- Purchase Agreement relating to Post Oak Mall(b)
10.7 -- Indemnification Agreements between the Company and the
Management Company and their officers and directors(a)
10.8.1 -- Employment Agreement for Charles B. Lebovitz(a)+
10.8.2 -- Employment Agreement for James L. Wolford(a)+
10.8.3 -- Employment Agreement for John N. Foy(a)+
10.8.4 -- Employment Agreement for Jay Wiston(a)+
10.8.5 -- Employment Agreement for Ben S. Landress(a)+
10.8.6 -- Employment Agreement for Stephen D. Lebovitz(a)+
10.9 -- Subscription Agreement relating to purchase of the Common
Stock and Preferred Stock of the Management Company(a)
10.10.1 -- Option Agreement relating to certain Retained Properties(a)
10.10.2 -- Option Agreement relating to Outparcels(a)
10.11.1 -- Property Partnership Agreement relating to Hamilton Place(a)
10.11.2 -- Property Partnership Agreement relating to CoolSprings
Galleria(a)
10.12.1 -- Acquisition Option Agreement relating to Hamilton Place(a)
10.12.2 -- Acquisition Option Agreement relating to the Hamilton Place
Centers(a)
10.12.3 -- Acquisition Option Agreement relating to the Office Building(a)
10.13.1 -- Revolving Credit Agreement between the Operating Partnership
and First Tennessee Bank, National Association, dated as of
March 2, 1994(c)
10.13.2 -- Revolving Credit Agreement, between the Operating Partnership and
Wells Fargo Advisors Funding, Inc., NationsBank of Georgia, N.A.
and First Bank National Association, dated July 28, 1994, (d)
|
CBL & Associates Properties, Inc. - 2001 Form 10K
10.13.3 -- Revolving Credit Agreement, between the Operating Partnership
and American National Bank and Trust Company of Chattanooga,
dated October 14, 1994, (e)
10.13.4 -- Revolving Credit Agreement, between the Operating Partnership
and First Tennessee Bank National Association, dated
November 2, 1994 (e)
10.14 -- Promissory Note Agreement between the Operating Partnership
and Union Bank of Switzerland, dated May 5, 1995(f)
10.15 -- Amended and Restated Loan Agreement between the Operating
Partnership and First Tennessee Bank National Association, dated
July 12, 1995(g)
10.16 -- Second Amendment to Credit Agreement between the Operating
Partnership and Wells Fargo Realty Advisors Funding, Inc. dated
July 5, 1995(g)
10.17 -- Consolidation, Amendment, Renewal, and Restatement of Notes
between the Galleria Associates, L.P. and The Northwestern
Mutual Life Insurance Company(h)
10.18.1 -- Promissory Note Agreement between High Point Development
Limited Partnership and The Northwestern Mutual Life Insurance
Company, dated January 26, 1996(i)
10.18.2 -- Promissory Note Agreement between Turtle Creek Limited
Partnership and Connecticut General Life Insurance Company,
dated February 14, 1996(i)
10.19 -- Amended and Restated Credit Agreement between the Operating
Partnership and Wells Fargo Bank N.A. etal, dated
September 26, 1996(j)
10.20 -- Promissory Note Agreement between the Operating Partnership
and Compass Bank dated, September 17, 1996. (j)
10.21.1 -- Promissory Note Agreement between St Clair Square Limited
Partnership and Wells Fargo National Bank, dated
December 11, 1996(k)
10.21.2 -- Promissory Note Agreement between Lebcon Associates and
Principal Mutual Life Insurance Company dated,
March 18, 1997(k)
10.21.3 -- Promissory Note Agreement between Westgate Mall Limited
Partnership and Principal Mutual Life Insurance Company
dated, February 16, 1997(k)
10.22.1 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank etal,
dated February 24, 1997(k)
10.22.2 -- Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank etal,
dated July 29, 1997(l)
10.22.3 -- Second Amended and Restated Credit Agreement between the
Operating Partnership and Wells Fargo Bank N.A. etal,
dated June 5, 1997, effective April 1,1997(l)
10.22.4 -- First Amendment to Second Amended and Restated Credit Agreement
between the Operating Partnership and Wells Fargo Bank N.A. etal,
dated November 11, 1997(l)
10.23.1 -- Loan Agreement between Asheville LLC and Wells Fargo Bank
N.A., dated February 17, 1998(l)
10.23.2 -- Loan Agreement between Burnsville Minnesota LLC and U.S.
Bank National Association dated January 30, 1998(l)
10.24 -- Loan agreement with South Trust Bank, dated January 15 , 1998(m)
|
CBL & Associates Properties, Inc. - 2001 Form 10K
10.25 -- Loan agreement between Rivergate Mall Limited Partnership, The
Village at Rivergate Limited Partnership, Hickory Hollow Mall
Limited Partnership, and The Courtyard at Hickory Hollow Limited
Partnership and Midland Loan Services, Inc., Dated
July 1, 1998(n)
10.26.1 -- Amended and restated Loan Agreement between the Company and
First Tennessee Bank National Association, Dated June 12, 1998(o)
10.26.2 -- First Amendment To Third Amended And Restated Credit Agreement
and Third Amended And Restated Credit Agreement between the
Company and Wells Fargo Bank, National Association, dated
August 4, 1998(o)
10.27 -- Promissory Note with Teachers Insurance and Annuity Association
of American and St. Clair Square Limited Partnership Bank,
dated March 11, 1999(p)
10.28 -- Promissory Note with Wells Fargo Bank National Associates and
Parham Road Limited Partnership (York Galleria), dated
July 1, 1999(r)
10.29 -- Agreement of Purchase and Sale By and Between YGL Partners and
the Operating Partnership assigned to Parham Road Limited
Partnership (York Galleria), dated February 2, 1999(r)
10.30.1 -- Master Contribution Agreement, dated as of September 25, 2000,
by and among the Company, the Operating Partnership and the
Jacobs entities(s)
10.30.2 -- Amendment to Master Contribution Agreement, dated as of
September 25, 2000, by and among the Company, the Operating
Partnership and the Jacobs entities(t)
10.31 -- Share Ownership Agreement by and among the Company and its
related parties and the Jacobs entities, dated as of
January 31, 2001(t)
10.32.1 -- Registration Rights Agreement by and between the Company and
the Holders of SCU's listed on Schedule 1 thereto, dated as
of January 31, 2001(t)
10.32.2 -- Registration Rights Agreement by and between the Company
and Frankel Midland Limited Partnership, dated as of
January 31, 2001(t)
10.32.3 -- Registration Rights Agreement by and between the Company
and Hess Abroms Properties of Huntsville, dated as of
January 31, 2001(t)
10.33 -- Loan Agreement by and between the Operating Partnership, Wells
Fargo Bank, National Association, Fleet National Bank, U.S.
Bank National Association, Commerzbank AG, New York And Grand
Cayman Branches, and Keybank National Association, together with
certain other lenders parties thereto pursuant to Section 8.6
thereof, dated as of January 31, 2001(t)
21 -- Subsidiaries of the Company, see page 161
23 -- Consent of Arthur Andersen LLP, see page 166
24 -- Power of Attorney, see page 167
--------------------
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(a) Incorporated by reference to Post-Effective Amendment No. 1 to the Company's Registration Statement on Form S-11 (No. 33-67372), as filed with the Commission on January 27, 1994.
(b) Incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-11 (No. 33-67372), as filed with the Commission on October 26, 1993.
(c) Incorporated herein by reference to the Company's Annual Report in Form 10-K for the fiscal year ended December 31, 1993.
CBL & Associates Properties, Inc. - 2001 Form 10K
(d) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994.
(e) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994.
(f) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
(g) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
(h) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995.
(i) Incorporated by reference to the Company's Annual Report in Form 10-K for the fiscal year ended December 31, 1995.
(j) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996.
(k) Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1996.
(l) Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997.
(m) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.
(n) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
(o) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.
(p) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
(q) Incorporated by reference to the Company's Current Report on Form 8-K, filed on May 4, 1999.
(r) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
(s) Incorporated by reference from the Company's Current Report on Form 8-K, filed on October 27, 2000.
(t) Incorporated by reference from the Company's Current Report on Form 8-K, filed on February 6, 2001.
+ A management contract or compensatory plan or arrangement required to be filed pursuant to Item 14(c) of this report.
CBL & Associates Properties, Inc. - 2001 Form 10K
(b) Reports on Form 8-K
The outline from the Company's October 31, 2001 conference call with analysts regarding earnings (item 5) was filed on October 31, 2001.
The outline from the Company's February 7, 2002 conference call with analysts regarding earnings (Item 5) was filed on February 7, 2002.
CBL & Associates Properties, Inc. - 2001 Form 10K
SUBSIDIARIES OF THE COMPANY
STATE OF
INCORPORATION OR
SUBSIDIARY FORMATION
----------------------------------------------------- ------------------
Albemarle Partners Limited Partnership North Carolina
APWM, LLC Georgia
Arbor Place GP, Inc. Georgia
Arbor Place Limited Partnership Georgia
Asheville, LLC North Carolina
BJ/Portland Limited Partnership Maine
Bonita Lakes Mall Limited Partnership Mississippi
Brookfield Square Joint Venture Ohio
Bursnville Minnesota, LLC Minnesota
Cadillac Associates Limited Partnership Tennessee
Capital Crossing Limited Partnership North Carolina
Cary Limited Partnership North Carolina
Cary Venture Limited Partnership Delaware
CBL & Associates Limited Partnership Delaware
CBL & Associates Management, Inc. Delaware
CBL Holdings I, Inc. Delaware
CBL Holdings II, Inc. Delaware
CBL Morristown, LTD. Tennessee
CBL Terrace Limited Partnership Tennessee
CBL/34th Street St. Petersburg Limited Partnership Florida
CBL/Bartow Limited Partnership Florida
CBL/BFW Kiosks, LLC Delaware
CBL/Brookfield I, LLC Delaware
CBL/Brookfield II, LLC Delaware
CBL/Brushy Creek Limited Partnership Florida
CBL/Buena Vista Limited Partnership Georgia
CBL/Cary I, LLC Delaware
CBL/Cary II, LLC Delaware
CBL/Cedar Bluff Crossing Limited Partnership Tennessee
CBL/Cherryvale I, LLC Delaware
CBL/Citadel I, LLC Delaware
CBL/Citadel II, LLC Delaware
CBL/Columbia I, LLC Delaware
CBL/Columbia II, LLC Delaware
CBL/Eastgate I, LLC Delaware
CBL/Eastgate II, LLC Delaware
CBL/Fayette I, LLC Delaware
CBL/Fayette II, LLC Delaware
CBL/Foothills Plaza Partnership Tennessee
CBL/GP Cary, Inc. North Carolina
CBL/GP I, Inc. Tennessee
CBL/GP II, Inc. Wyoming
|
CBL & Associates Properties, Inc. - 2001 Form 10K
CBL/GP III, Inc. Mississippi CBL/GP V, Inc. Tennessee CBL/GP VI, Inc. Tennessee CBL/GP, Inc. Wyoming CBL/Huntsville, LLC Delaware CBL/J I, LLC Delaware CBL/J II, LLC Delaware CBL/Jefferson I, LLC Delaware CBL/Jefferson II, LLC Delaware CBL/Karnes Corner Limited Partnership Tennessee CBL/Kentucky Oaks, LLC Delaware CBL/Low Limited Partnership Wyoming CBL/Madison I, LLC Delaware CBL/Midland I, LLC Delaware CBL/Midland II, LLC Delaware CBL/Nashua Limited Partnership New Hampshire CBL/North Haven, Inc. Connecticut CBL/Northwoods I, LLC Delaware CBL/Northwoods II, LLC Delaware CBL/Old Hickory I, LLC Delaware CBL/Old Hickory II, LLC Delaware CBL/Parkdale, LLC Texas CBL/Perimeter Place Limited Partnership Tennessee CBL/Plant City Limited Partnership Florida CBL/Plantation Plaza, L.P. Virginia CBL/Rawlinson Place Limited Partnership Tennessee CBL/Regency I, LLC Delaware CBL/Regency II, LLC Delaware CBL/Springs Crossing Limited Partnership Tennessee CBL/Stroud, Inc. Pennsylvania CBL/Suburban, Inc. Tennessee CBL/Tampa Keystone Limited Partnership Florida CBL/Towne Mall I, LLC Delaware CBL/Towne Mall II, LLC Delaware CBL/Uvalde, Ltd. Texas CBL/Wausau I, LLC Delaware CBL/Wausau II, LLC Delaware CBL/Wausau III, LLC Delaware CBL/Wausau IV, LLC Delaware CBL/Weston I, LLC Delaware CBL/Weston II, LLC Delaware CBL/York, Inc. Pennsylvania Charleston Joint Venture Ohio Chester Square Limited Partnership Virginia |
CBL & Associates Properties, Inc. - 2001 Form 10K
Chesterfield Crossing, LLC Virginia Coastal Way, L.C. Florida Cobblestone Village at St. Augustine, LLC Florida College Station Partners, Ltd. Texas Columbia Joint Venture Ohio Coolsprings Crossing Limited Partnership Tennessee Cortlandt Town Center Limited Partnership New York Cortlandt Town Center, Inc. New York Cosby Station Limited Partnership Georgia Courtyard at Hickory Hollow Limited Partnership Delaware Creekwood Gateway, LLC Florida Crossville Associates Limited Partnership Tennessee CV at North Columbus, LLC Georgia Development Options, Inc. Wyoming Development Options/Cobblestone, LLC Florida East Ridge Partners, L.P. Tennessee East Towne Crossing Limited Partnership Tennessee Eastgate Company Ohio Eastridge, LLC North Carolina ERMC II, L.P. Tennessee ERMC III, L.P. Tennessee ERMC IV, LP Tennessee ERMC V, L.P. Tennessee Fifty-Eight Partners, L.P. Tennessee Foothills Mall Associates, LP Tennessee Foothills Mall, Inc. Tennessee Frontier Mall Associates Limited Partnership Wyoming Georgia Square Associates, Ltd. Georgia Georgia Square Partnership Georgia Governor's Square Company IB Ohio Governor's Square Company Ohio Gunbarrel Commons, LLC Tennessee Henderson Square Limited Partnership North Carolina Hickory Hollow Courtyard, Inc. Delaware Hickory Hollow Mall Limited Partnership Delaware Hickory Hollow Mall, Inc. Delaware High Point Development Limited Partnership North Carolina High Point Development Limited Partnership II North Carolina Houston Willowbrook LLC Texas Hudson Plaza Limited Partnership New York Janesville Mall Limited Partnership Wisconsin Janesville Wisconsin, Inc. Wisconsin Jarnigan Road Limited Partnership Tennessee JC Randolph, LLC Ohio |
CBL & Associates Properties, Inc. - 2001 Form 10K
Jefferson Mall Company Ohio JG Saginaw, LLC Ohio JG Winston-Salem, LLC Ohio Kentucky Oaks Mall Company Ohio Kingston Overlook Limited Partnership Tennessee LaGrange Commons Limited Partnership New York Lakeshore Gainesville Limited Partnership Georgia Lakeshore/Sebring Limited Partnership Florida Leaseco, Inc. New York Lebcon Associates Tennessee Lebcon I, Ltd. Tennessee Lee Partners Tennessee Lexington Joint Venture Ohio Lion's Head Limited Partnership Tennessee Longview Associates Limited Partnership North Carolina Lunenburg Crossing Limited Partnership Massachusetts Madison Joint Venture Ohio Madison Plaza Associates, Ltd. Alabama Madison Square Associates, Ltd. Alabama Mall Shopping Center Company, L.P. Texas Maryville Department Stores Associates Tennessee Maryville Partners, L.P. Tennessee Massard Crossing Limited Partnership Arkansas Meridian Mall Company, Inc. Michigan Meridian Mall Limited Partnership Michigan Midland Joint Venture Michigan Montgomery Partners, L.P. Tennessee Mortgage Holdings, LLC Delaware NewLease Corp. Tennessee North Charleston Joint Venture Ohio North Haven Crossing Limited Partnership Connecticut Oak Ridge Associates Limited Partnership Tennessee Old Hickory Mall Venture Tennessee Park Village Limited Partnership Florida Parkdale Mall Associates Texas Parkway Place Limited Parntership Alabama Parkway Place, Inc. Alabama Post Oak Mall Associates Limited Partnership Texas Property Taxperts, LLC Nevada Racine Joint Venture Ohio RC Jacksonville, LC Florida RC Strawbridge Limited Partnership Virginia Rivergate Mall Limited Partnership Delaware Rivergate Mall, Inc. Delaware |
CBL & Associates Properties, Inc. - 2001 Form 10K
Salem Crossing Limited Partnership Virginia Sand Lake Corners Limited Partnership Florida Sand Lake Corners, LC Florida Scottsboro Associates, Ltd. Alabama Seacoast Shopping Center Limited Partnership New Hampshire Shopping Center Finance Corp. Wyoming Springdale/Mobile GP II, Inc. Alabama Springdale/Mobile GP, Inc. Alabama Springdale/Mobile Limited Partnership Alabama Springdale/Mobile Limited Partnership II Alabama Springhurst Limited Partnership Kentucky St. Clair Square GP, Inc. Illinois St. Clair Square Limited Partnership Illinois Sterling Creek Commons Limited Partnership Virginia Stone East Partners, Ltd. Tennessee Stoney Brook Landing LLC Kentucky Stroud Mall LLC Pennsylvania Suburban Plaza Limited Partnership Tennessee Sutton Plaza GP, Inc. New Jersey Sutton Plaza Limited Partnership New Jersey The Galleria Associates, L.P. Tennessee The Lakes Mall, LLC Michigan The Landing at Arbor Place Limited Partnership Missouri The Marketplace at Mill Creek, LLC Georgia Towne Mall Ohio Turtle Creek Limited Partnership Mississippi Twin Peaks Mall Associates, Ltd. Colorado Valley Crossing Associates Limited Partnership North Carolina Vicksburg Mall Associates, Ltd. Mississippi Village at Rivergate Limited Partnership Delaware Village at Rivergate, Inc. Delaware Walnut Square Associates Limited Partnership Wyoming Wausau Joint Venture Ohio Westgate Crossing Limited Partnership North Carolina Westgate Mall Limited Partnership South Carolina Willowbrook Plaza Limited Partnership Maine (f/k/a Portland/HQ Limited Partnership) York Galleria Limited Partnership Virginia |
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into CBL & Associates Properties, Inc.'s previously filed Registration Statements on Forms S-3 (File Nos. 33-62830, 333-90395 and 333-47041) and Forms S-8 (File Nos. 33-73376, 333-04295 and 333-41768).
ARTHUR ANDERSEN LLP
Chattanooga, Tennessee
March 6, 2002
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Charles B. Lebovitz, John N. Foy and Stephen D. Lebovitz and each of them, with full power to act without the other, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign the Annual Report of CBL & Associates Properties, Inc. on Form 10-K for the fiscal year ended December 31, 2001, including one or more amendments to such Form 10-K, which amendments may make such changes as such person deems appropriate, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary fully to all intents and purposes as he might or could do in person thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power-of-Attorney on the date set opposite his respective name.
Signature Title Date
/s/ Charles B. Lebovitz Chairman of the Board March 6, 2002
------------------------ and Chief
Charles B. Lebovitz Executive Officer
(Principal Executive Officer)
/s/ John N. Foy Vice Chairman of the Board, March 6, 2002
------------------------ Chief Financial Officer and
John N. Foy Treasurer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ Stephen D. Lebovitz Director, President March 6, 2002
------------------------ and Secretary
Stephen D. Lebovitz
/s/ Claude M.Ballard Director March 6, 2002
------------------------
Claude M. Ballard
/s/ Leo Fields Director March 6, 2002
------------------------
Leo Fields
/s/ William J.Poorvu Director March 6, 2002
------------------------
William J. Poorvu
/s/ Winston W. Walker Director March 6, 2002
------------------------
Winston W. Walker
/s/ Gary L. Bryenton Director March 6, 2002
------------------------
Gary L. Bryenton
/s/ Martin J. Cleary Director March 6, 2002
------------------------
Martin J. Cleary
*By: /s/ Charles B. Lebovitz
------------------------
Charles B. Lebovitz Attorney-in-Fact March 6, 2002
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Exhibit 3.3
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CBL & ASSOCIATES PROPERTIES, INC.
1. The name of the corporation (which is hereinafter referred to as the "Corporation") is "CBL & Associates Properties, Inc."
2. The Amended and Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on November 2, 1993 under the name of "CBL & Associates Properties, Inc."
3. This Certificate of Amendment has been duly proposed by resolutions adopted and declared advisable by the Board of Directors of the Corporation, duly adopted by the stockholders of the Corporation and duly executed and acknowledged by the officers of the Corporation in accordance with the provisions of Sections 103 and 242 of the General Corporation Law of the State of Delaware.
4. The text of Article IV of the Amended and Restated Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows:
ARTICLE IV
The total number of shares of all classes of Equity Stock that the Corporation shall have authority to issue is One Hundred Million (100,000,000) shares, consisting of (i) Five Million (5,000,000) shares of preferred stock, par value $.01 per share (the "Preferred Stock"), and (ii) Ninety-Five Million (95,000,000) shares of common stock, par value $.01 per share (the "Common Stock").
The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized to provide for the issuance of shares of Preferred Stock in series and, by filing a certificate pursuant to the applicable law of the State of Delaware (hereinafter referred to as a "Preferred Stock Designation"), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:
(i) The designation of the series, which may be by distinguishing number, letter or title;
(ii) The number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding);
(iii) Whether dividends, if any, shall be cumulative or noncumulative and the dividend rate of the series;
(iv) Dates at which dividends, if any, shall be payable;
(v) The redemption rights and price or prices, if any, for shares of the series;
(vi) The terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series;
(vii) The amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation;
(viii) Whether the shares of the series shall be convertible into shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series of such other security, the conversion price or prices or rate or rates, any adjustments thereof, the date or dates on which such shares shall be convertible and all other terms and conditions upon which such conversion may be made;
(ix) Restrictions on the issuance of shares of the same series or of any other class or series; and
(x) The voting rights, if any, of the holders of shares of the series.
(2) Dividend Rights. Except as otherwise provided in this Certificate of Incorporation, the holders of shares of Common Stock shall be entitled to receive such dividends as may be declared by the Board of Directors of the Corporation out of funds legally available therefor. Until such time, if any, as the Corporation determines to discontinue its status as a real estate investment trust under Section 856 of the Internal Revenue Code of 1986, as amended from time to time (the "Code"), in accordance with paragraph (g) of Article VI, the Corporation shall declare and pay such dividends as may be required under the Code, to qualify for treatment as, and to maintain the Corporation's status as, a real estate investment trust under Section 856 of the Code.
(3) Rights Upon Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of, or any distribution of the assets of, the Corporation, each holder of shares of Common Stock shall be entitled to receive, ratably with each other holder of shares of Common Stock, that portion of the assets of the Corporation available for distribution to the holders of its Common Stock as the number of shares of the Common Stock held by such holder bears to the total number of shares of Common Stock then outstanding.
(4) Voting Rights. Except as may be provided in this Certificate of Incorporation, the holders of shares of Common Stock shall have the exclusive right to vote on all matters (for which a common stockholder shall be entitled to vote thereon) at all meetings of the stockholders of the Corporation, and shall be entitled to one vote for each share of Common Stock entitled to vote at such meeting.
"Beneficial ownership" shall mean ownership of Equity Stock by a Person who would be treated as an owner of such shares of Equity Stock either directly or indirectly through the application of Sections 542 and 544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and any comparable successor provisions thereto. The terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall have correlative meanings.
"Beneficial Ownership Limit" shall mean (A) with respect to any Person other than members of the Lebovitz Group and the Wolford Group, 6% of the outstanding Equity Stock of the Corporation, (B) with respect to the Lebovitz Group, 23% of the outstanding Equity Stock of the Corporation and (C) with respect to the Wolford Group, 8% of the outstanding Equity Stock of the Corporation, in each case, determined by (i) number of shares outstanding, (ii) voting power or (iii) value (as determined by the Board of Directors), whichever produces the smallest holding of Equity Stock under the three methods, and computed taking into account all outstanding shares of Equity Stock and, to the extent provided by the Code, all shares of Equity Stock issuable under existing Options and Exchange Rights that have not been exercised or Deferred Stock that has not vested.
"Beneficiary" shall mean, with respect to any Trust, one or more organizations described in each of Section 170(b)(1)(A) and Section 170(c) of the Code as designated by the Corporation from time to time as the beneficiary or beneficiaries of such Trust.
"Board of Directors" shall mean the Board of Directors of the Corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.
"Constructive ownership" shall mean ownership of Equity Stock by a Person who would be treated as an owner of such Equity Stock either directly or indirectly through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code, and any comparable successor provisions thereto. The terms "Constructive Owner," "Constructively Owns" and "Constructively Owned" shall have correlative meanings.
"Constructive Ownership Limit" shall mean (A) with respect to any Person other than members of the Lebovitz Group and the Wolford Group, 6% of the outstanding Equity Stock of the Corporation, (B) with respect to the Lebovitz Group, 23% of the outstanding Equity Stock of the Corporation and (C) with respect to the Wolford Group, 8% of the outstanding Equity Stock of the Corporation, in each case, determined by (i) number of shares outstanding, (ii) voting power or (iii) value (as determined by the Board of Directors), whichever produces the smallest holding of Equity Stock under the three methods, and computed taking into account all outstanding shares of Equity Stock and, to the extent provided by the Code, all shares of Equity Stock issuable under existing options and Exchange Rights that have not been exercised or Deferred Stock that has not vested; provided, however, that members of the Lebovitz Group or the Wolford Group shall be subject to a Constructive Ownership Limit of 9.9% of the outstanding Equity Stock of the Corporation at all times that (x) members of the Lebovitz Group or the Wolford Group Constructively Own (i) 10% or more of either the total combined voting power of all classes of stock entitled to vote or the total number of outstanding shares of stock of any Tenant that is treated as a corporation for federal income tax purposes or (ii) an interest of 10% or more in the assets or net profits of any Tenant that is not treated as a corporation for federal income tax purposes and (y) the aggregate amount of income derived by the Corporation in its immediately preceding taxable year from the Tenants whose ownership is described in clause (x) hereof exceeded the amount derived from Tenants on the date of the Initial Public Offering, adjusted as provided herein
"Deferred Stock" shall mean shares of Deferred Stock issued under the CBL & Associates Properties, Inc. 1993 Stock Incentive Plan, as the same may be amended from time to time, or under any similar type of deferred stock plan authorized by the Board of Directors.
"Equity Stock" shall mean stock that is either Preferred Stock or Common Stock and shall include all shares of Preferred Stock or Common Stock that are held as Shares-in-Trust in accordance with the provisions of paragraph E of this Article IV.
"Exchange Rights" shall mean any rights granted to limited partners of CBL & Associates Limited Partnership, a Delaware limited partnership, to exchange (subject to the applicable Ownership Limit) limited partnership interests in such partnership for shares of Common Stock.
"Independent" shall have the meaning set forth in paragraph
(d) of Article VI.
"Initial Public Offering" shall mean the sale of shares of Common Stock pursuant to the Corporation's first effective registration statement for such Common Stock filed under the Securities Act of 1933, as amended.
"Lebovitz Group" shall mean (i) Charles B. Lebovitz and (ii) any Beneficial Owner or Constructive Owner of shares of Equity Stock whose shares of Equity Stock are Beneficially Owned or Constructively Owned by Charles B. Lebovitz or members of his family.
"Market Price" of any class of Equity Stock on any date shall mean the average of the Closing Price for the five consecutive Trading Days ending on such date. The "Closing Price" in respect of any class of Equity Stock on any date shall mean (i) the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, or (ii) if such class of Equity Stock is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such class of Equity Stock is listed or admitted to trading, or (iii) if such class of Equity Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotations system that may then be in use, or (iv) if such class of Equity Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such class of Equity Stock selected by the Board of Directors. "Trading Day" shall mean, with respect to any class of Equity Stock, a day on which the principal national securities exchange on which such class of Equity Stock is listed or admitted to trading is open for the transaction of business or, if such class of Equity Stock is not listed or admitted to trading on any national securities exchange, any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.
"Non-Transfer Event" shall mean an event other than a purported Transfer that would cause any Person to Beneficially Own or Constructively Own shares of Equity Stock in excess of the applicable Ownership Limit, including, but not limited to, the granting of any option or entering into any agreement for the sale, transfer or other disposition of Equity Stock or the sale, transfer, assignment or other disposition of any securities or rights convertible into or exchangeable for Equity Stock.
"Options" shall mean any options, rights, warrants or convertible or exchangeable securities containing the right to subscribe for or purchase shares of Equity Stock.
"Ownership Limits" shall mean the Beneficial Ownership Limit and the Constructive Ownership Limit. "Ownership Limit" shall mean the Beneficial Ownership Limit or the Constructive Ownership Limit, as appropriate.
"Permitted Transferee" shall mean any Person designated as a Permitted Transferee in accordance with the provisions of subparagraph E(5) hereof.
"Person" shall mean an individual, corporation, partnership, estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, provided, however, that the term "Person" shall not include an underwriter or group of underwriters participating in the Initial Public Offering (with respect to shares issued in connection with the Initial Public Offering) for a period of 180 days from the commencement of the Initial Public Offering.
"Prohibited Owner" shall mean, with respect to any purported Transfer or Non-Transfer Event, any Person who, but for the provisions of subparagraph (D)(3) of this Article IV, would own record title to shares of Equity Stock.
"REIT" shall mean a real estate investment trust under Section 856 of the Code.
"Restriction Termination Date" shall mean the first day after the date of the Initial Public Offering on which the Corporation's status or a REIT shall have been terminated by the Board of Directors and the stockholders of the Corporation pursuant to subparagraph (g) of Article VI.
"Tenant" shall mean any Person that leases or subleases real property owned, directly or indirectly, by the Corporation or any partnership of which the Corporation is a partner.
"Transfer" shall mean any sale, transfer, gift, hypothecation, pledge, assignment, devise or other disposition of Equity Stock (including (i) the granting of any option (including an option to acquire an option or any series of such options) or entering into any agreement for the sale, transfer or other disposition of Equity Stock or (ii) the sale, transfer, assignment or other disposition of any securities or rights convertible into or exchangeable for Equity Stock), whether voluntary or involuntary, whether of record, constructively or beneficially and whether by operation of law or otherwise.
"Trust" shall mean any separate trust created pursuant to subparagraph D(3) of this Article IV and administered in accordance with the terms of subparagraph E of this Article IV, for the exclusive benefit of one or more Beneficiaries.
"Trustee" shall mean any person or entity unaffiliated with both the Corporation and any Prohibited Owner, such Trustee to be designated by the Corporation to act as trustee of any Trust, or any successor trustee thereof.
"Wolford Group" shall mean (i) James L. Wolford and (ii) any Beneficial Owner or Constructive Owner of shares of Equity Stock whose shares of Equity Stock are Beneficially Owned or Constructively Owned by James L. Wolford or members of his family.
(a) Except as provided in subparagraph D(9) of this Article IV, from the date of the Initial Public Offering and prior to the Restriction Termination Date, no Person shall Beneficially Own or Constructively Own shares of the outstanding Equity Stock in excess of the applicable Ownership Limit.
(b) Except as provided in subparagraph D(9) of this Article IV, from the date of the Initial Public Offering and prior to the Restriction Termination Date, any Transfer that, if effective, would result in any Person Beneficially Owning or Constructively Owning Equity Stock in excess of the applicable Ownership Limit shall be void ab initio as to the Transfer of that number of shares of Equity Stock which would be otherwise Beneficially Owned or Constructively Owned by such Person in excess of the applicable Ownership Limit; and the intended transferee shall acquire no rights in such shares of Equity Stock in excess of the applicable Ownership Limit.
(c) From the date of the Initial Public Offering and prior to the Restriction Termination Date, any Transfer that, if effective, would result in the Equity Stock being beneficially owned by fewer than 100 Persons (determined without reference to any rules of attribution) shall be void ab initio.
(d) From the date of the Initial Public Offering and prior to the Restriction
Termination Date, any Transfer of shares of Equity Stock that, if effective,
would result in the Corporation being "closely held" within the meaning of
Section 856(h) of the Code shall be void ab initio as to the Transfer of that
number of shares of Equity Stock which would cause the Corporation to be
"closely held" within the meaning of Section 856(h) of the Code; and the
intended transferee shall acquire no rights in such shares of Equity Stock in
excess of the applicable Ownership Limit.
(a) If, notwithstanding the other provisions contained in this Article IV, at any time after the date of the Initial Public Offering and prior to the Restriction Termination Date, there is a purported Transfer or Non-Transfer Event such that any Person would either Beneficially Own or Constructively Own Equity Stock in excess of the applicable Ownership Limit, then, (i) except as otherwise provided in subparagraph D(9), the purported transferee shall acquire no right or interest (or, in the case of a Non-Transfer Event, the person holding record title to the Equity Shares Beneficially Owned or Constructively Owned by such Beneficial Owner or Constructive Owner, shall cease to own any right or interest) in such number of shares of Equity Stock which would cause such Beneficial Owner or Constructive Owner to Beneficially Own or Constructively Own shares of Equity Stock in excess of the applicable Ownership Limit; and (ii) such number of shares of Equity Stock in excess of the applicable Ownership Limit (rounded up to the nearest whole share) shall be designated Shares-in-Trust and, in accordance with subparagraph E of this Article IV, transferred automatically and by operation of law to a Trust. Such transfer to a Trust and the designation of the shares as Shares-in-Trust shall be effective as of the close of business on the business day prior to the date of the purported Transfer or Non-Transfer Event, as the case may be.
(b) If, notwithstanding the other provisions contained in this Article IV, at any time after the date of the Initial Public Offering and prior to the Restriction Termination Date, there is a purported Transfer or Non-Transfer Event that, if effective, would cause the Corporation to become "closely held" within the meaning of Section 856(h) of the Code, then (i) the purported transferee shall not acquire any right or interest (or, in the case of a Non-Transfer Event occurred, shall cease to own any right or interest) in such number of shares of Equity Stock, the ownership of which by such purported transferee or record holder would cause the Corporation to be "closely held"
within the meaning of Section 856(h) of the Code; and (ii) such number of shares of Equity Stock (rounded up to the nearest whole share) shall be designated Shares-in-Trust and, in accordance with the provisions of subparagraph E of this Article IV, transferred automatically and by operation of law to the Trust to be held in accordance with that subparagraph E. Such transfer to a Trust and the designation of shares as Shares-in-Trust shall be effective as of the close of business on the business day prior to the date of the Transfer or Non-Transfer Event, as the case may be.
(4) Remedies For Breach. If the Corporation or its designees shall at any time determine in good faith that a Transfer or other event has taken place in violation of subparagraph D(2) of this Article IV or that a Person intends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any shares of Equity Stock in violation of subparagraph D(2) of this Article IV, the Corporation or its designees shall take such action as it or they deem advisable to refuse to give effect to or to prevent such Transfer or other event, including, but not limited to, refusing to give effect to such Transfer or other event on the books of the Corporation or instituting proceedings to enjoin such Transfer or other event.
(5) Notice of Restricts Transfer. Any Person who acquires or attempts to acquire shares of Equity Stock in violation of subparagraph D(2) of this Article IV, or any Person who owned shares of Equity Stock that were transferred to the Trust pursuant to the provisions of subparagraph D(3) of this Article IV, shall immediately give written notice to the Corporation of such event and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer or the Non-Transfer Event, as the case may be, on the Corporation's status as a REIT.
(a) Every Beneficial Owner or Constructive Owner of more than 5%, or such lower percentage as required pursuant to regulations under the Code, of the outstanding Equity Stock of the Corporation shall, before January 30 of each year, give written notice to the Corporation stating the name and address of such Beneficial Owner or Constructive Owner, the general ownership structure of such Beneficial Owner or Constructive Owner, the number of shares of each class of Equity Stock Beneficially Owned or Constructively Owned, and a description of how such shares are held. Each such Beneficial Owner or Constructive Owner shall provide to the Corporation such additional information as the Corporation may request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation's status as a REIT and to ensure compliance with the Ownership Limits.
(b) Each Person who is a Beneficial Owner or Constructive Owner of Equity Stock and each Person (including the stockholder of record) who is holding Equity Stock for a Beneficial Owner or Constructive Owner shall provide on demand to the Corporation such information as the Corporation may reasonably request from time to time in order to determine the Corporation's status as a REIT and to ensure compliance with the Ownership Limits.
(7) Remedies Not Limited. Nothing contained in this Article IV shall limit the authority of the Corporation to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its stockholders by preservation of the Corporation's status as a REIT and to ensure compliance with the Ownership Limits.
(8) Ambiguity. In the case of an ambiguity in the application of any of the provisions of subparagraph D of this Article IV, including any definition contained in subparagraph D(1), the Board of Directors shall have the power to determine the application of the provisions of this subparagraph D with respect to any situation based on the facts known to it.
(9) Exception. The Corporation, upon receipt of a ruling from the Internal
Revenue Service or an opinion of tax counsel in each case to the effect that the
restrictions contained in subparagraph D(2)(a), (b), (c) or (d) will not be
violated, may, subject to such conditions as the Corporation may deem
appropriate, exempt a Person from the applicable Ownership Limit (A)(i) if such
Person is not an individual for purposes of Section 542(a)(2) of the Code or
(ii) if such Person is an underwriter which participates in a public offering of
Common Stock or Preferred Stock for a period of 90 days following the purchase
by such underwriter of the Common Stock or Preferred Stock or (iii) in such
other circumstances which the Corporation determines are appropriately excepted
from the applicable Ownership Limit and (B) if the Corporation obtains such
representations and undertakings from such Person as are reasonably necessary to
ascertain that such Person's Beneficial Ownership or Constructive Ownership of
Equity Stock will not violate the applicable Ownership Limit and agrees that any
violation or attempted violation will result in such Equity Stock being
transferred to the Trust pursuant to subparagraph D(3) of this Article IV.
(a) The Ownership Limits may not be modified if, after giving effect to such modification, five or fewer Persons could Beneficially Own, in the aggregate, more than 50% of the total value of the outstanding Equity Stock.
(b) The Ownership Limits may not be modified if, after giving effect to such modification, the Corporation would fail to meet the requirements for qualification as a REIT under the Code.
(c) Prior to any modifications of the Ownership Limits, the Board of Directors of the Corporation may require such opinions of counsel, affidavits, undertakings or agreements as it may deem necessary or advisable in order to determine or ensure the Corporation's status as a REIT.
"The shares of Equity Stock represented by this certificate are subject to restrictions on transfer for the purpose of the Corporation's maintenance of its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended from time to time (the "Code"). Transfers in contravention of such restrictions may be void ab initio. Unless otherwise determined by the Board of Directors of the Corporation, no Person may (1) Beneficially Own or Constructively Own shares of Equity Stock in excess of 6% of the total value of the outstanding Equity Stock of the Corporation, determined as provided in the Corporation's Amended and Restated Certificate of Incorporation, as the same may be further amended from time to time (the "Certificate of Incorporation") (computed taking into account all outstanding shares of Equity Stock and all shares of Equity Stock issuable under existing options and Exchange Rights that have not been exercised or Deferred Stock that has not vested) unless such Person is a member of the Lebovitz Group or the Wolford Group (in which case a higher Ownership Limit shall be applicable);
or (2) Beneficially Own Equity Stock which would result in the Corporation being "closely held" under Section 856(h) of the Code. Any acquisition of Equity Stock and continued holding of ownership of Equity Stock constitutes a continuous representation of compliance with the above limitations, and any Person who attempts to Beneficially Own or Constructively Own shares of Equity Stock in excess of the above limitations must immediately so notify the Corporation. If the restrictions above are violated, the shares of Equity Stock represented hereby will be transferred automatically and by operation of law to a Trust and shall be designated Shares-in-Trust. In addition, certain Beneficial Owners or Constructive Owners of Equity Stock must give written notice as to certain information on a semi-annual or annual basis. All capitalized terms in this legend have the meanings defined in the Certificate of Incorporation, a copy of which, including the restrictions on transfer, will be sent without charge to each stockholder who so requests."
(13) Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of 66-2/3% of the outstanding voting stock, voting together as a single class, shall be required to amend, repeal or adopt any provision inconsistent with the definitions of "Beneficial Ownership Limit" or "Constructive Ownership Limit" or subparagraph (10) or (11) of paragraph D of this Article IV. A majority of the Independent members of the Board of Directors, however, shall have the authority to change the amount referred to in clause (y) of the definition of "Constructive Ownership Limit."
(1) Trust. Any shares of Equity Stock transferred to a Trust and designated Shares-in-Trust pursuant to subparagraph D(3) of this Article IV shall be held for the exclusive benefit of the Beneficiary. Any transfer to a Trust, and subsequent designation of shares of Equity Stock as Shares-in-Trust, pursuant to subparagraph D(3) of this Article IV shall be effective as of the close of business on the business day prior to the date of the Transfer or Non-Transfer Event that results in the transfer to the Trust. Shares-in-Trust shall remain issued and outstanding shares of Equity Stock of the Corporation and shall be entitled to the same rights and privileges on identical terms and conditions as are all other issued and outstanding shares of Equity Stock of the same class and series. When transferred to the Permitted Transferee in accordance with the provisions of subparagraph E(5) of this Article IV, such Shares-in-Trust shall cease to be designated as Share-in-Trust.
(2) Dividend Rights. The Trustee, as record holder of Shares-in-Trust, shall be
entitled to receive all dividends and distributions as may be declared by the
Board of Directors of the Corporation on such shares of Equity Stock and shall
hold such dividends or distributions in trust for the benefit of the
Beneficiary. The Prohibited Owner with respect to Shares-in-Trust shall repay to
the Trustee the amount of any dividends or distributions received by it that (i)
are attributable to any shares of Equity Stock designated Shares-in-Trust and
(ii) the record date of which was on or after the date that such shares became
Shares-in-Trust. The Corporation shall take all measures that it determines
reasonably necessary to recover the amount of any such dividend or distributions
paid to a Prohibited Owner, including, if necessary, withholding any portion of
future dividends or distributions payable on shares of Equity Stock Beneficially
Owned or Constructively Owned by the Person who, but for the provisions of
subparagraph D(3) of this Article IV, would Constructively Own or Beneficially
Own the Shares-in-Trust; and, as soon as reasonably practicable following the
Corporation's receipt or withholding thereof, shall pay over to the Trustee for
the benefit of the Beneficiary the dividends so received or withheld, as the
case may be.
(3) Rights Upon Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of, or any distribution of the assets of, the Corporation, each holder of Shares-in-Trust shall be entitled to receive, ratably with each other holder of Equity Stock of the same class or series, that portion of the assets of the Corporation which is available for distribution to the holders of such class and series of Equity Stock. The Trustee shall distribute to the Prohibited Owner the amounts received upon such liquidation, dissolution, or winding up, or distribution; provided, however, that the Prohibited Owner shall not be entitled to receive amounts pursuant to this subparagraph E(3) in excess of, in the case of a purported Transfer in which the Prohibited Owner gave value for shares of Equity Stock and which Transfer resulted in the transfer of the shares to the Trust, the price per share, if any, such Prohibited Owner paid for the Equity Stock and, in the case of a Non-Transfer Event or Transfer in which the Prohibited Owner did not give value for such shares (e.g., if the shares were received through a gift or devise) and which Non-Transfer Event or Transfer, as the case may be, resulted in the transfer of shares to the Trust, the price per share equal to the Market Price on the date of such Non-Transfer Event or Transfer. Any remaining amount in such Trust shall be distributed to the Beneficiary.
(4) Voting Rights. The Trustee shall be entitled to vote all Shares-in-Trust. Any vote by a Prohibited Owner as a holder of shares of Equity Stock prior to the discovery by the Corporation that the shares of Equity Stock are Shares-in-Trust shall, subject to applicable law, be rescinded and shall be void ab initio with respect to such Shares-in-Trust and the Prohibited Owner shall be deemed to have given, as of the close of business on the business day prior to the date of the purported Transfer or Non-Transfer Event that results in the transfer to the Trust of the shares of Equity Stock under subparagraph D(3) of this Article IV, an irrevocable proxy to the Trustee to vote the Shares-in-Trust in the manner in which the Trustee, in its sole and absolute discretion, desires.
(5) Designation of Permitted Transferee. The Trustee shall have the exclusive and absolute right to designate a Permitted Transferee of any and all Shares-in-Trust. As reasonably practicable as possible, in an orderly fashion so as not to materially adversely affect the Market Price of the Shares-in-Trust, the Trustee shall designate any Person as Permitted Transferee, provided, however, that (i) the Permitted Transferee so designated purchases for valuable consideration (whether in a public or private sale) the Shares-in-Trust and (ii) the Permitted Transferee so designated may acquire such Shares-in-Trust without such acquisition resulting in a transfer to a Trust and the redesignation of such shares of the Equity Stock so acquired as Shares-in-Trust under subparagraph D(3) of this Article IV. Upon the designation by the Trustee of a Permitted Transferee in accordance with the provisions of this subparagraph, the Trustee of a Trust shall (i) cause to be transferred to the Permitted Transferee that number of Shares-in-Trust acquired by the Permitted Transferee; (ii) cause to be recorded on the books of the Corporation that the Permitted Transferee is the holder of record of such number of shares of Equity Stock; and (iii) distribute to the Beneficiary any and all amounts held with respect to the Shares-in-Trust after making that payment to the Prohibited Owner pursuant to subparagraph E(6) of this Article IV.
(6) Compensation to Record Holder of Shares of Equity Stock that Become Shares-in-Trust. Any Prohibited Owner shall be entitled (following discovery of the Shares-in-Trust and subsequent designation of the Permitted Transferee in accordance with subparagraph D(5) of this Article IV) to receive from the Trustee the lesser of (i) in the case of (a) a purported Transfer in which the Prohibited Owner gave value for shares of Equity Stock and which Transfer resulted in the transfer of the shares to the Trust, the price per share, if any, such Prohibited Owner paid for the Equity Stock, or (b) a Non-Transfer Event or Transfer in which the Prohibited Owner did not give value for such shares (e.g., if the shares were received through a gift or devise) and which Non-Transfer Event or Transfer, as the case may be, resulted in the transfer of shares to the Trust, the price per share equal to the Market Price on the date of such Non-Transfer Event or Transfer, and (ii) the price per share received by the Trustee of the Trust from the sale or other disposition of such Shares-in-Trust in accordance with subparagraph E(5) of this Article IV. Any amounts received by the Trustee in respect of such Shares-in-Trust and in excess of such amounts to be paid the Prohibited Owner pursuant to this subparagraph E(6) of this Article IV shall be distributed to the Beneficiary in accordance
with the provisions of subparagraph E(5) of this Article IV. Each Beneficiary and Prohibited Owner waive any and all claims that they may have against the Trustee and the Corporation arising out of the disposition of Shares-in-Trust, except for claims arising out of the gross negligence or willful misconduct of, or any failure to make payments in accordance with paragraph E of this Article IV by, such Trustee or the Corporation.
(7) Purchase Right in Shares-in-Trust. Shares-in-Trust shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (i) the price per share in the transaction that created such Shares-in-Trust (or, in the case of devise, gift or Non-Transfer Event, the Market Price at the time of such devise, gift or Non-Transfer Event) and (ii) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation shall have the right to accept such offer for a period of ninety days after the later of (i) the date of the Non-Transfer Event or purported Transfer which resulted in such Shares-in-Trust and (ii) the date the Corporation determines in good faith that a Transfer or Non-Transfer Event resulting in Shares-in-Trust has occurred, if the Corporation does not receive a notice of such Transfer or Non-Transfer Event pursuant to subparagraph D(5) of this Article IV.
Subject to the rights of the holders of any series of Preferred Stock, the Board of Directors is hereby authorized to create and to authorize and direct the issuance (on either a pro rata or a non-pro rata basis) by the Corporation of rights, options and warrants for the purchase of shares of Equity Stock, other securities of the Corporation, or shares or other securities of any successor in interest of the Corporation (a "Successor"), at such times, in such amounts, to such persons, for such consideration (if any), with such form and content (including without limitation the consideration for which any shares of Equity Stock, other securities of the Corporation, or shares or other securities of any Successor are to be issued) and upon such terms and conditions as it may, from time to time, determine upon, subject only to the restrictions, limitations, conditions and requirements imposed by the GCL, other applicable laws and this Certificate.
If any provision of this Article IV or any application of any such provision is determined to be invalid by any federal or state court having jurisdiction over the issues, the validity of the remaining provisions shall not be affected, and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court.
Nothing in this Article IV, shall preclude the settlement of any transaction entered into through the facilities of the New York Stock Exchange.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its Chairman of the Board, President and Chief Executive Officer and attested to by its Secretary this 2nd day of May, 1996.
CBL & ASSOCIATES PROPERTIES, INC.
By: /s/ Charles B. Levobitz
------------------------------
Charles B. Lebovitz
Chairman of the Board, President and
Chief Executive Officer
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Attest: /s/ John N. Foy
------------------------------------
John N. Foy
Secretary
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Exhibit 3.4
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CBL & ASSOCIATES PROPERTIES, INC.
1. The name of the corporation (which is hereinafter referred to as the "Corporation") is "CBL & Associates Properties, Inc."
2. The Amended and Restated Certificate of Incorporation of the Corporation, dated November 2, 1993, as amended by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation, dated May 2, 1996, as supplemented by the Certificate of Designation, dated June 25, 1998, and the Certificate of Designation, dated April 30, 1999, (the "Amended and Restated Certificate of Incorporation") shall be further amended as provided below.
3. This Certificate of Amendment has been duly proposed by resolutions adopted and declared advisable by the Board of Directors of the Corporation, duly adopted by the stockholders of the Corporation and duly executed and acknowledged by the officers of the Corporation in accordance with the provisions of Sections 103 and 242 of the General Corporation Law of the state of Delaware.
4. The text of Article IV of the Amended and Restated Certificate of Incorporation of the Corporation is hereby amended as follows:
ARTICLE IV
1. The definition of "Beneficial Ownership Limit" shall be amended to read as follows:
"Beneficial Ownership Limit" shall mean (A) with respect to any Person other than a Family Group or a member thereof, 6% of the outstanding Equity Stock of the Corporation, (B) with respect to the Family Groups and their members in the aggregate, 37.99% of the outstanding Equity Stock of the Corporation, (C) with respect to the Lebovitz Group and its members in the aggregate, 25.4% of the outstanding Equity Stock of the Corporation, (D) with respect to any single member of the David Jacobs Group or the Richard Jacobs Group that is an Individual, 13.9% of the outstanding Equity Stock of the Corporation, (E) with respect to any two members of the David Jacobs Group or the Richard Jacobs Group that are Individuals, 19.9% of the outstanding Equity Stock of the Corporation and (F) with respect to Jacobs Group and its members in the aggregate, 19.9% of the outstanding Equity Stock of the Corporation; in each case, determined by number of shares outstanding, voting power (disregarding, in the case of the Jacobs Group and its members, any power to designate nominees to the Corporation's Board of Directors pursuant to the Voting and Standstill Agreement dated September 25, 2000 among the Corporation, CBL & Associates Limited Partnership, Jacobs Realty Investors Limited Partnership and others (the "Voting and Standstill Agreement")) or value (as determined by the Board of Directors), whichever produces the smallest holding of Equity Stock and computed taking into account all outstanding shares of Equity Stock and, to the extent provided by the Code in connection with the determination required by Section 856(a)(6) of the Code, all shares of Equity Stock issuable under existing Options and Exchange Rights that have not been exercised or Deferred Stock that has not vested; provided, however, that (i) in no event shall the Lebovitz Group or any Person composed of one or more members of the Lebovitz Group be treated as Beneficially Owning Equity Stock in excess of the limitations set forth in clauses (B) or (C) above to the extent that the Lebovitz Group Beneficially Owns not more than the Lebovitz Permitted Ownership Amount and (ii) in no event shall the Jacobs Group, the David Jacobs Group, the Richard Jacobs Group or any Person composed of one or more members of any such group be treated as Beneficially Owning Equity Stock in excess of the limitations set forth in clauses (B) or (F) above to the extent that the Jacobs Group Beneficially Owns not more than the Jacobs Permitted Ownership Amount.
2. The definition of "Constructive Ownership Limit" shall be amended to read as follows:
"Constructive Ownership Limit" shall mean (A) with respect to any Person other than a Family Group or a member thereof, 6% of the outstanding Equity Stock of the Corporation and (B) with respect to the Family Groups and their members in the aggregate, 37.99% of the outstanding Equity Stock of the Corporation; in each case, determined by number of shares outstanding, voting power (disregarding, in the case of the Jacobs Group and its members, any power to designate nominees to the Corporation's Board of Directors pursuant to the Voting and Standstill Agreement) or value (as determined by the Board of Directors), whichever produces the smallest holding of Equity Stock and computed taking into account all outstanding shares of Equity Stock and, to the extent provided by the Code in connection with the determination required by Section 856(d)(2)(B) of the Code, all shares of Equity Stock issuable under existing Options and Exchange Rights that have not been exercised or Deferred Stock that has not vested; provided, however, that (I) except as provided in clause (II) hereof, (i) in no event shall the Lebovitz Group or any Person composed of one or more members of the Lebovitz Group be treated as Constructively Owning Equity Stock in excess of the Constructive Ownership Limit to the extent that the Lebovitz Group Constructively Owns not more than the Lebovitz Permitted Ownership Amount and (ii) in no event shall the Jacobs Group, the David Jacobs Group, the Richard Jacobs Group or any Person composed of one or more members of any such group be treated as Constructively Owning Equity Stock in excess of the Constructive Ownership Limit to the extent that the Jacobs Group and its members Constructively Own not more than the Jacobs Permitted Ownership Amount and (II) a member of the Lebovitz Group or the Jacobs Group (but not the Lebovitz Group or the Jacobs Group themselves) will be subject to a Constructive Ownership Limit of 9.9% of the outstanding Equity Stock of the Corporation at all times that (x) such member, together with other members of the Lebovitz Group or the Jacobs Group, as the case may be, each of whom Constructively Owns at least 10% of the outstanding Equity Stock of the Corporation, Constructively Own, in the aggregate (a) 10% or more of the total voting power, number of outstanding shares or value of the outstanding shares of any Tenant that is treated as a corporation for federal income tax purposes or (b) an interest of 10% or more in the assets or net profits of any Tenant that is not treated as a corporation for federal income tax purposes, (y) such member Constructively Owns an equity interest in such Tenant and (z) the aggregate amount of gross income derived by the Corporation in its immediately preceding taxable year from the Tenants whose ownership is described in clause (x) (taking into account only ownership by such member and other members of the Group that includes such member) exceeded $750,000.
3. The definition of "Wolford Group" and all references thereto shall be deleted.
4. Subparagraph (D)(9) of Article IV is amended by substituting "result in violation of Section 856(h) of the Code or the receipt of nonqualified income under Section 856(d)(2)(B) of the Code" for "violate the applicable Ownership Limit" on the fourth-to-last line thereof.
5. The following definitions shall be added to Article IV(D)(1):
"David Jacobs Group" shall mean (i) the widow of David Jacobs,
(ii) the lineal descendants of David Jacobs and (iii) all Persons that would
Constructively Own or Beneficially Own shares of Equity Stock Constructively
Owned or Beneficially Owned by individuals described in (i) or (ii).
"Family Groups" shall mean the Lebovitz Group, the David Jacobs Group and the Richard Jacobs Group.
"Individuals" shall mean Persons that are treated as "individuals" for purposes of Section 542(a)(2) of the Code.
"Jacobs Group" shall mean the David Jacobs Group, the Richard Jacobs Group and the members of such groups.
"Jacobs Permitted Ownership Amount" shall be defined and adjusted as in the Share Ownership Agreement.
"Lebovitz Permitted Ownership Amount" shall be defined and adjusted as in the Share Ownership Agreement.
"Richard Jacobs Group" shall mean (i) Richard Jacobs and each member of his family for purposes of Section 318(a) or 544 of the Code and (ii) all Persons that would Constructively Own or Beneficially Own shares of Equity Stock Constructively Owned or Beneficially Owned by individuals described in (i).
"Share Ownership Agreement" shall mean the Share Ownership Agreement, dated as of [January 31, 2001] by and between the Corporation, CBL & Associates, Inc., Charles B. Lebovitz, Stephen D. Lebovitz, Jacobs Realty Investors Limited Partnership, Richard E. Jacobs, solely as trustee for the Richard E. Jacobs Revocable Living Trust and Richard E. Jacobs, solely as trustee for the David H. Jacobs Marital Trust, as such may be amended from time to time by the parties thereto.
6. The following subparagraph is added to Article IV(D)(3):
(c) If the Lebovitz Group or a member thereof or the Jacobs Group or a member thereof would otherwise Beneficially Own or Constructively Own shares of Capital Stock in excess of the Lebovitz Permitted Ownership Amount, in the case of the Lebovitz Group and its members, or the Jacobs Permitted Ownership Amount, in the case of the Jacobs Group and its members, then the shares of Equity Stock that otherwise would be so Beneficially Owned or Constructively Owned shall be designated Shares-in-Trust hereunder and, in accordance with subparagraph E of this Article IV, transferred automatically and by operation of law to a Trust; provided, however, that this clause (c) will not apply where the Beneficial and Constructive Ownership of shares of Equity Stock by the Jacobs Group and its members, or the Lebovitz Group and its members, as the case may be, would not violate the limitations that would be imposed upon such group and its members if there were no special references to such group and its members in this Certificate of Incorporation.
7. A new subparagraph (D)(14) shall be added to read as follows:
(14) No amendment to this Article IV or modification of the Ownership Limits pursuant to Article IV(D)(10) or any successor provision shall be effective if such amendment is adverse to the Jacobs Group or any of its members (unless Jacobs Realty Investors Limited Partnership, a Delaware limited partnership, consents) or to the Lebovitz Group or any of its members (unless LebFam, Inc., a Tennessee corporation, consents) and is not undertaken with unanimous prior approval of the Corporation's Board of Directors. For the avoidance of doubt, a decrease in the Standard Beneficial Ownership Limit or a modification of the Beneficial Ownership Limit in accordance with Article III of the Share Ownership Agreement shall not be treated as adversely affecting the Jacobs Group or its members or the Lebovitz Group or its members. References in this subparagraph (D)(14) to the Jacobs Group or any of its members shall be deemed deleted after the Share Ownership Agreement has terminated with respect to the Jacobs Group and its Members. References in this subparagraph (D)(14) to the Lebovitz Group or any of its members shall be deemed deleted after the Share Ownership Agreement has terminated with respect to the Lebovitz Group and its Members.
8. A new subparagraph (I) for Article IV shall be added to read as follows:
I Furnishing Copies
Copies of the Voting and Standstill Agreement and the Share Ownership Agreement will be furnished by the Corporation without charge to each shareholder who so requests.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its Chairman of the Board and Chief Executive Officer and attested to by its Secretary this 31st day of January, 2001.
CBL & ASSOCIATES PROPERTIES, INC.
BY: /s/ Charles B. Lebovitz
--------------------------
Charles B. Lebovitz
Chairman of the Board
and Chief Executive Officer
Attest: /s/ John N. Foy
-----------------
John N. Foy
Secretary
|
Exhibit 4.2
CERTIFICATE OF DESIGNATIONS, NUMBER,
VOTING POWERS, PREFERENCES AND RIGHTS
OF
9.0% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
OF
CBL & ASSOCIATES PROPERTIES, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
The undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board of Directors of CBL & Associates Properties, Inc., a Delaware corporation (hereinafter called the "Corporation"), with the preferences and rights set forth therein relating to dividends, conversion, redemption, dissolution and distribution of assets of the Corporation having been fixed by the Board of Directors pursuant to authority granted to it under Article IV of the Corporation's Amended and Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware:
RESOLVED: That, pursuant to authority conferred upon the Board of Directors by the Amended and Restated Certificate of Incorporation of the Corporation, the Board of Directors hereby authorizes the issuance of 2,875,000 shares of 9.0% Series A Cumulative Redeemable Preferred Stock, $.01 par value, of the Corporation, and hereby fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such shares, in addition to those set forth in such Certificate of Incorporation, as follows:
1. Designation and Amount.
The shares of such series shall be designated " 9.0% Series A Cumulative Redeemable Preferred Stock" (the "Series A Preferred Stock") and the number of shares constituting such series shall be 2,875,000. The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the Series A Preferred Shares shall be subject in all cases to the provisions of Article IV of the Certificate of Incorporation regarding limitations on beneficial and constructive ownership of the Corporation's capital stock.
2. Dividends and Distribution Rights.
(a) Holders of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors of the Corporation (the "Board of Directors"), out of assets of the Corporation legally available for the payment of dividends, cumulative preferential cash dividends at the rate of 9.0% per annum of the $25.00 liquidation preference. Such dividends shall be cumulative from the date of the original issue by the Corporation of shares of Series A Preferred Stock and shall be payable quarterly in arrears on the 30th day of March, June, September, and December of each year or, if not a business day, the next succeeding business day (each, a "Dividend Payment Date"). The first dividend shall be paid on September 30, 1998. Such first dividend and any dividend payable on the Series A Preferred Stock for any partial dividend period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in the stockholder records of the Corporation at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the Board of Directors for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a "Dividend Record Date").
(b) No dividends on the Series A Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Corporation at such time as the terms and provisions of any agreement of the Corporation, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.
(c) Notwithstanding anything contained herein to the contrary, dividends on the Series A Preferred Stock shall accrue whether or not the Corporation has earnings, whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are declared. Accrued but unpaid dividends on the Series A Preferred Stock shall accumulate as of the Dividend Payment Date on which they first become payable.
(d) Except as set forth in the next sentence, no dividends shall be declared or paid or set apart for payment on any shares of Corporation's Common Stock, $.01 par value ("Common Stock"), or shares of any other class or series of capital stock of the Corporation ranking, as to dividends, on a parity with or junior to the Series A Preferred Stock (other than a dividend paid in shares of Common Stock or in shares of any other class or series of capital stock ranking junior to the Series A Preferred Stock as to dividends and upon liquidation) for any period unless full cumulative dividends for all past dividend periods and the then current dividend period shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum sufficient for the payment thereof in cash is set apart for such payment on the Series A Preferred Stock. When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series A Preferred Stock and the shares of any other series of preferred stock ranking on a parity as to dividends with the Series A Preferred Stock, all dividends declared upon the Series A Preferred Stock and any other series of preferred stock ranking on a parity as to dividends with the Series A Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of Series A Preferred Stock and such other series of preferred stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Series A Preferred Stock and such other series of preferred stock (which shall not include any accrual in respect of unpaid dividends on such other series of preferred stock for prior dividend periods if such other series of preferred stock does not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series A Preferred Stock which may be in arrears.
(e) Except as provided in paragraph 2(d), unless full cumulative dividends on the Series A Preferred Stock shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash is set apart for payment for all past dividend periods and the then current dividend period, no dividends (other than in Common Stock or other capital stock ranking junior to the Series A Preferred Stock as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other dividend shall be declared or made upon the Common Stock or any other capital stock of the Corporation ranking junior to or on parity with the Series A Preferred Stock as to dividends or amounts upon liquidation nor shall any shares of Common Stock, or any other shares of capital stock of the Corporation ranking junior to or on a parity with the Series A Preferred Stock as to dividends or upon liquidation, shall be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such shares) by the Corporation (except by conversion into or exchange for other shares of capital stock of the Corporation ranking junior to the Series A Preferred Stock as to dividends and upon liquidation and except for the acquisition of shares that have been designated as "Shares-in-Trust" in accordance with the terms of the Certificate of Incorporation).
(f) Holders of shares of Series A Preferred Stock shall not be entitled to any dividend, whether payable in cash, property or shares of stock, in excess of full cumulative dividends on the Series A Preferred Stock as provided above. Any dividend payment made on the Series A Preferred Stock shall first be credited against the earliest accrued but unpaid dividends due with respect to such shares which remains payable.
3. Liquidation Rights.
Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation, the holders of shares of Series A Preferred Stock shall be entitled to be paid out of the assets of the Corporation legally available for distribution to its stockholders a liquidation preference of $25.00 per share, plus an amount equal to any accrued and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment shall be made to holders of share of Common Stock or any other class or series of capital stock of the Corporation ranking junior to the Series A Preferred Stock as to liquidation rights. In the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Corporation are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series A Preferred Stock and the corresponding amounts payable on all shares of other classes or series of capital stock of the Corporation ranking on a parity with the Series A Preferred Stock in the distribution of assets, then the holders of the Series A Preferred Stock and all other such classes or series of shares of capital stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. Holders of Series A Preferred Stock shall be entitled to written notice of any such liquidation. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series A Preferred Stock will have no right or claim to any of the remaining assets of the Corporation. The consolidation or merger of the Corporation with or into any other corporation, trust or entity or of any other corporation, trust or other entity, or the sale, lease or conveyance of all or substantially all of the property or business of the Corporation shall not be deemed to constitute a liquidation, dissolution or winding-up of the Corporation.
4. Redemption.
(a) Shares of Series A Preferred Stock shall not be redeemable prior to July 1, 2003; provided, however, that the Corporation may, prior to such date and in accordance with the terms of the Certificate of Incorporation, purchase shares of Series A Preferred Stock designated as "Shares-In-Trust" thereunder. On or after July 1, 2003, the Corporation, at its option upon not less than 30 nor more than 60 days' written notice, may redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends thereon to the date fixed for redemption (except as provided below), without interest. If fewer than all of the outstanding shares of Series A Preferred Stock are to be redeemed, the shares of Series A Preferred Stock to be redeemed shall be redeemed pro rata (as nearly as may be practicable without creating fractional shares) or by lot or by any other equitable method determined by the Corporation. Holders of Series A Preferred Stock to be redeemed shall surrender such Series A Preferred Stock at the place designated in such notice and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following such surrender. If notice of redemption of any Series A Preferred Stock has been given and if the funds necessary for such redemption have been set aside by the Corporation in trust for the benefit of the holders of any shares of Series A Preferred Stock so called for redemption, then from and after the redemption date dividends shall cease to accrue on such Series A Preferred Stock, such shares of Series A Preferred Stock shall no longer be deemed outstanding and all rights of the holders of such shares will terminate, except the right to receive the redemption price plus any accrued and unpaid dividends payable upon such redemption.
(b) Unless full cumulative dividends on all Series A Preferred Stock shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash set apart for payment for all past dividend periods and the then current dividend period, no
Series A Preferred Stock shall be redeemed unless all outstanding shares of Series A Preferred Stock are simultaneously redeemed and the Corporation shall not purchase or otherwise acquire directly or indirectly any shares of Series A Preferred Stock (except by exchange for shares of capital stock of the Corporation ranking junior to the Series A Preferred Stock as to dividends and amounts upon liquidation); provided, however, that the foregoing shall not prevent the purchase by the Corporation in accordance with the terms of the Certificate of Incorporation of shares of the Corporation designated as "Shares-in-Trust" thereunder or the purchase or acquisition of Series A Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred Stock.
(c) Notice of redemption shall be given by publication in a newspaper of general circulation in the City of New York, such publication to be made once a week for two successive weeks commencing not less than 30 nor more than 60 days prior to the redemption date. A similar notice shall be mailed by the Corporation, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the shares of Series A Preferred Stock to be redeemed at their respective addresses as they appear on the share transfer records of the Corporation. No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Series A Preferred Stock except as to a holder to whom notice was defective or not given. Each notice shall state (i) the redemption date; (ii) the redemption price; (iii) the number of shares of Series A Preferred Stock to be redeemed; (iv) the place or places where certificates for shares of Series A Preferred Stock are to be surrendered for payment of the redemption price; and (v) that dividends on the Series A Preferred Stock to be redeemed shall cease to accrue on such redemption date. If fewer than all of the shares of Series A Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares of Series A Preferred Stock held by such holder to be redeemed.
(d) Immediately prior to any redemption of Series A Preferred Stock, the Corporation shall pay, in cash, any accumulated and unpaid dividends through the redemption date, unless a redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case each holder of Series A Preferred at the close of business of such Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares before such Dividend Payment Date. Except as provided above, the Corporation shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series A Preferred Stock for which a notice of redemption has been given.
(e) All shares of the Series A Preferred Stock redeemed pursuant to this paragraph 4 shall be retired and shall be restored to the status of authorized and unissued shares of preferred stock, without designation as to series and may thereafter be reissued as shares of any series of preferred stock.
(f) The Series A Preferred Stock shall have no stated maturity and shall not be subject to any sinking fund or mandatory redemption; provided, however, that the Series A Preferred Stock owned by a stockholder in excess of the Ownership Limit (as defined in the Certificate of Incorporation) shall be subject to the provisions of Article IV of the Certificate of Incorporation.
5. Voting Rights.
(a) Holders of the Series A Preferred Stock shall not have any
voting rights, except as provided by applicable law and as set forth in this
paragraph 5.
(b) Whenever dividends on any shares of Series A Preferred Stock shall be in arrears for six or more consecutive or non-consecutive quarterly periods (a "Preferred Dividend Default"), the holders of such Series A Preferred Stock (voting separately as a class with all other series of preferred
stock of the Corporation upon which like voting rights have been conferred and are exercisable ("Parity Preferred")) shall be entitled to vote for the election of a total of two additional directors of the Corporation (the "Preferred Directors") at the next annual meeting of stockholders and at each subsequent meeting until all dividends accumulated on such Series A Preferred Stock and Parity Preferred for the past dividend periods and the then current dividend period shall have been fully paid or declared and a sum sufficient for the payment thereof set aside for payment. In such case, the entire Board of Directors will be increased by two directors. If and when all accumulated dividends and the accrued dividend for the then current dividend period shall have been paid on such Series A Preferred Stock and all series of Parity Preferred upon which like voting rights have been conferred and are exercisable, the term of office of each Preferred Director so elected shall terminate. So long as a Preferred Dividend Default shall continue, any vacancy in the office of a Preferred Director may be filled by written consent of the Preferred Director remaining in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding Series A Preferred Stock when they have the voting rights described above (voting separately as a class with all series of Parity Preferred upon which like voting rights have been conferred and are exercisable). Each of the Preferred Directors shall be entitled to one vote on any matter.
(c) So long as any shares of Series A Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote or consent of the holders of two-thirds of the shares of Series A Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class): (i) authorize or create, or increase the authorized or issued amount of, any class or series of shares of capital stock ranking prior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding-up of the Corporation or reclassify any authorized shares of capital stock of the Corporation into such capital stock, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such capital stock; or (ii) amend, alter or repeal the provisions of the Certificate of Incorporation or this Certificate of Designations, whether by merger, consolidation or otherwise (an "Event"), so as to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Stock or the holders thereof; provided however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series A Preferred Stock remains outstanding with the terms thereof materially unchanged, taking into account that, upon the occurrence of an Event, the Company may not be the surviving entity, the occurrence of such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of Series A Preferred Stock and provided further that (A) any increase in amount of the authorized Preferred Stock or the creation or issuance of any other Series A Preferred Stock or (B) any increase in the number of authorized shares of Series A Preferred Stock or any other series of Preferred Stock in each case ranking on a parity with or junior to the Series A Preferred Stock of such series with respect to the payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.
(d) The foregoing voting provisions of this paragraph 5 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares of Series A Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption.
(e) In any matter in which the Series A Preferred Stock may vote (as expressly provided herein or as may be required by law), each share of Series A Preferred Stock shall be entitled to one vote, except that when any other series of preferred stock of the Corporation shall have the right to vote with the Series A Preferred Stock as a single class on any matter, the Series A Preferred Stock and such other series shall have with respect to such matters one vote per each $25.00 of stated liquidation preference.
6. Conversion.
The shares of Series A Preferred Stock shall not be convertible into or exchangeable for any other property or securities of the Corporation.
7. Ranking.
The Series A Preferred Stock shall, with respect to dividend rights and rights upon liquidation, dissolution or winding-up of the Corporation, rank (a) senior to the Common Stock and to all equity securities ranking junior to such Series A Preferred Stock; (b) on a parity with all equity securities issued by the Corporation the terms of which specifically provide that such equity securities rank on a parity with the Series A Preferred Stock; and (c) junior to all equity securities issued by the Corporation (in accordance with this Certificate of Designations) the terms of which specifically provide that such equity securities rank senior to the Series A Preferred Stock. For purposes of this paragraph 7, the term "equity securities" does not include convertible debt securities.
8. Exclusion of Other Rights.
The Series A Preferred Stock shall not have any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption other than expressly set forth in the Certificate of Incorporation and this Certificate of Designations.
9. Headings of Subdivisions.
The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
10. Severability of Provisions.
If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Stock set forth in the Certificate of Incorporation and this Certificate of Designations is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of Series A Preferred Stock set forth in the Certificate of Incorporation which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Stock herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.
11. No Preemptive Rights.
No holder of Series A Preferred Stock shall be entitled to any preemptive rights to subscribe for or acquire any unissued shares of capital stock of the Corporation (whether now or hereafter authorized) or securities of the Corporation convertible into or carrying a right to subscribe to or acquire shares of capital stock of the Corporation.
SIGNATURE APPEARS ON NEXT PAGE
IN WITNESS WHEREOF, CBL & Associates Properties, Inc. has caused this Certificate of Designations, Number, Voting Powers, Preferences and Rights of Series A Cumulative Redeemable Preferred Stock to be duly executed by its Executive Vice President and Chief Financial Officer this 25th day of June, 1998.
CBL & Associates Properties, Inc.
By /s/ John Foy
--------------------------------------------------
John Foy
Executive Vice President
and Chief Financial Officer
|
Exhibit 4.3
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES 1999 JUNIOR PARTICIPATING PREFERRED STOCK
OF
CBL & ASSOCIATES PROPERTIES, INC.
Pursuant to Section 151 of the
Delaware General Corporation Law
We, Charles B. Lebovitz, Chairman of the Board and Chief Executive Officer, and John N. Foy, Vice Chairman, Chief Financial Officer and Secretary, of CBL & Associates Properties, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the Amended and Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), of the said Corporation, the said Board of Directors on April 30, 1999, adopted the following resolution creating a series of 6,000 shares of Preferred Stock designated as Series 1999 Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Certificate of Incorporation, a series of Preferred Stock of the Corporation be, and it hereby is, created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations and restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series of Preferred Stock, par value $.01 per share, shall be designated as "Series 1999 Junior Participating Preferred Stock" (the "Series 1999 Junior Participating Preferred Stock"), and the number of shares constituting such series shall be 6,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series 1999 Junior Participating Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into shares of Series 1999 Junior Participating Preferred Stock.
Section 2. Distributions.
(A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series 1999 Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series 1999 Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly distributions payable in cash on the 15th day of April, August, October and January in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after first issuance of a share or fraction of a share of Series 1999 Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $100.00 or (b) subject to the provision for adjustment hereinafter set forth, 10,000 times the aggregate per share amount of all cash dividends, and 10,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock, par value $.01 per share, of the Corporation ("Common Stock"), or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series 1999 Junior Participating Preferred Stock. In the event the Corporation shall at any time after April 30, 1999 (the "Rights Dividend Declaration Date") (i) declare or pay any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series 1999 Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend on the Series 1999 Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a distribution of $100.00 per share on the Series 1999 Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series 1999 Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series 1999 Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date set for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series 1999 Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the Series 1999 Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series 1999 Junior Participating Preferred Stock entitled to receive payment of a dividend declared thereon, which record date shall be no more than thirty (30) days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series 1999 Junior Participating Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series 1999 Junior Participating Preferred Stock shall entitle the holder thereof to 10,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Dividend Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series 1999 Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as set forth herein or as otherwise provided by law, the holders of shares of Series 1999 Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein or as otherwise provided by law, holders of Series 1999 Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions payable on the Series 1999 Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all such accrued and unpaid dividends and distributions, whether or not declared, on shares of Series 1999 Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of capital stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to Series 1999 Junior Participating Preferred Stock; or
(ii) declare or pay dividends on, or make any other
distributions on, any shares of capital stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up)
with the Series 1999 Junior Participating Preferred Stock, except
dividends paid ratably on the Series 1999 Junior Participating
Preferred Stock and all such parity stock on which dividends are
payable in proportion to the total amounts to which the holders of all
such shares are then entitled; or
(iii) redeem or purchase or otherwise acquire for consideration shares of capital stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series 1999 Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series 1999 Junior Participating Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any shares of Series 1999 Junior Participating Preferred Stock, or any shares of capital stock ranking on a parity with the Series 1999 Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of capital stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series 1999 Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of capital stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series 1999 Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series 1999 Junior Participating Preferred Stock shall have received $1,000,000 per share, plus any unpaid dividends and distributions payable thereon, whether or not declared, to the date of such payment (the "Series 1999 Liquidation Preference"). Following the payment of the full amount of the Series 1999 Liquidation Preference, no additional distributions shall be made to the holders of shares of Series 1999 Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series 1999 Liquidation Preference by (ii) 10,000 (as appropriately adjusted as set forth in subparagraph (C) below to reflect such events as stock splits, stock distributions and recapitalizations with respect to the Common Stock) (such number in clause (ii) immediately above being referred to as the "Adjustment Number"). Following the payment of the full amount of the Series 1999 Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series 1999 Junior Participating Preferred Stock and Common Stock, respectively, holders of shares of Series 1999 Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to one (1) with respect to such Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series 1999 Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, which rank on a parity with the Series 1999 Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity stock in proportion to their respective liquidation preferences. In the event, however, that there are sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights Dividend Declaration Date (i) declare any distribution on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series 1999 Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 10,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Dividend Declaration Date (i) declare any distribution on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series 1999 Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series 1999 Junior Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. Notwithstanding anything contained herein to the contrary, the Series 1999 Junior Participating Preferred Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets in liquidation, unless the terms of any such series shall provide otherwise.
Section 10. Amendment. The Corporation's Certificate of Incorporation shall not be further amended in any manner which would materially alter or change the powers, preferences or special rights of the Series 1999 Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least a majority of the outstanding shares of Series 1999 Junior Participating Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series 1999 Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends and other distributions, participate in dividends and other distributions, and to have the benefit of all other rights of holders of Series 1999 Junior Participating Preferred Stock.
Section 12. Restrictions on Ownership and Transfer. The beneficial ownership and transfer of the Series 1999 Junior Participating Preferred Stock shall in all respects be subject to the applicable provisions of Article IV of the Certificate of Incorporation.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this 30th day of April 1999.
CBL & ASSOCIATES PROPERTIES, INC.
/s/ Charles B. Lebovitz ------------------------------- Charles B. Lebovitz Chairman of the Board and Chief Executive Officer /s/ John N. Foy ------------------------------- John N. Foy Vice Chairman, Chief Financial Officer and Secretary |
Exhibit 4.4
EXHIBIT E
TERMS
OF
SERIES J SPECIAL COMMON UNITS
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP
(the "Operating Partnership")
Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of the Operating Partnership
WHEREAS, Article 4.4 of the Second Amended and Restated Partnership Agreement of the Operating Partnership (as amended through January 31, 2001, and as the same may hereafter be amended as permitted therein and herein, the "Partnership Agreement") grants CBL Holdings I, Inc., the general partner of the Operating Partnership (the "General Partner"), authority to cause the Operating Partnership to issue interests in the Operating Partnership to persons other than the General Partner in one or more classes or series, with such designations, preferences and relative, participating, optional or other special rights, powers and duties as may be determined by the General Partner in its sole and absolute discretion. (For ease of reference, capitalized terms used herein and not otherwise defined have the meanings assigned to them in the Partnership Agreement.)
NOW THEREFORE, the General Partner hereby designates a series of priority units and fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such priority units, as follows:
1. Designation and Amount. The units of such series shall be designated "Series J Special Common Units" (the "SCUs") and the number of units constituting such series shall initially be 12,556,427. The Operating Partnership may not issue any additional SCUs unless (i) the issuance is required to deliver additional consideration as required by the terms of the Master Contribution Agreement, dated as of September 25, 2000, among the Company, the Operating Partnership, Jacobs Realty Investors Limited Partnership ("JRI") and certain other persons named therein, as amended by the Letter Agreement, dated November 13, 2000, and the Amendment to the Master Contribution Agreement, dated as of December 19, 2000, and as the same may be further amended, supplemented or modified (the "Master Contribution Agreement") or any Interest Contribution Agreement or Deed Contribution Agreement (as those terms are defined in the Master Contribution Agreement) or (ii) it has obtained the prior written consent of JRI. The rights and obligations of the SCUs shall be as set forth herein (to the extent not inconsistent with the Partnership Agreement) and in the Partnership Agreement. Nothing in the foregoing shall be deemed to limit the right and power of the General Partner to cause the Operating Partnership to issue securities otherwise designated to the fullest extent permitted under the terms of the Partnership Agreement and this Exhibit E.
2. Distribution Rights. (a) Holders of SCUs shall be entitled to receive, when, as and if declared by the General Partner distributions with respect to the SCUs in the manner and to the fullest extent set forth in the Partnership Agreement.
(b) Distributions with respect to the SCUs shall be payable on the dates designated by the General Partner for the payment of distributions to the holders of Common Units. Any distribution payable on the SCUs for the
quarter in which the SCUs are first issued will be prorated and computed on the basis of a 360-day year consisting of twelve 30-day months; provided, however, that in the case of SCUs issued on January 31, 2001, the distribution payable for the first fiscal quarter following issuance, shall be reduced by the amount of $.0080625 per SCU. Distributions will be payable to holders of record as they appear in the records of the Operating Partnership at the close of business on the applicable record date, which shall be the record date designated by the General Partner for the payment of distributions for such quarter to the holders of Common Units.
(c) At such time, if any, as there is any distribution shortfall as described in Section 6.2(a)(iii) of the Partnership Agreement, none of the Operating Partnership, the General Partner or the REIT will redeem, purchase or otherwise acquire for any consideration (or any moneys be paid to or made available for any sinking fund for the redemption of any such units) any Common Units or any other units of interest in the Partnership by their terms ranking junior as to distributions to the rights of the SCUs (except by conversion into or exchange for shares of Common Stock of the REIT or other units of the Operating Partnership ranking junior to the SCUs as to distributions).
(d) Distributions with respect to the SCUs are intended to qualify as permitted distributions of cash that are not treated as a disguised sale within the meaning of Treasury Regulation 1.707-4, and the provisions of this Exhibit E shall be construed and applied consistent with such Treasury Regulations.
3. Special Distribution Upon Liquidation. Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Operating Partnership, the holders of SCUs shall be entitled to be paid out of the assets of the Operating Partnership legally available for distribution to its unit holders an amount equal to any distribution shortfall described in Section 6.2(a)(iii) of the Partnership Agreement, before any distribution or payment shall be made to holders of Common Units. In the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Operating Partnership are insufficient to pay such amount on all outstanding SCUs, then the holders of the SCUs shall share ratably in any such distribution of assets, based on the number of SCUs held by each such holder. Holders of SCUs shall be entitled to written notice of any such liquidation. In addition, upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Operating Partnership, after any such distribution shortfall on account of the SCUs shall have been paid in cash, the SCUs shall be treated as if they had been exchanged for Common Units pursuant to the terms of Paragraph 7(b) hereof. The consolidation or merger of the Operating Partnership with or into any partnership, limited liability company, corporation, trust or other entity shall not be deemed to constitute a liquidation, dissolution or winding-up of the Operating Partnership.
4. Redemption. (a) SCUs shall not be redeemable by the Operating Partnership prior to January 31, 2011. Except as provided below in Paragraph 4(c), on or after January 31, 2011, the Operating Partnership, at its option upon not less than thirty (30) nor more than sixty (60) days' written notice, may redeem the SCUs, in whole or in part, on the first Business Day following any record date established for the determination of parties entitled to receive any distributions being made to holders of SCUs, by (i) paying in cash to the holders of SCUs with respect to their SCUs being redeemed, any distribution shortfall described in Section 6.2(a)(iii) of the Partnership Agreement outstanding on the date of redemption (whether or not declared) and (ii) issuing to the holders thereof a number of Common Units equal to the Common Unit Amount (as defined in Paragraph 7 below). If fewer than all of the outstanding SCUs are to be redeemed, the units of SCUs to be redeemed shall be redeemed pro rata (as nearly as may be practicable without creating fractional units) or by lot or by any other equitable method determined by the Operating Partnership. Holders of SCUs to be redeemed shall surrender the certificates evidencing such SCUs, if any, at the place designated in the Operating Partnership's notice and shall be entitled to the distribution payments and Common Units described in the second sentence of this Paragraph 4(a) prior to or concurrently with such surrender. If notice of redemption of any SCUs has been given and if the funds and Common Units necessary for such redemption have been set aside by the Operating Partnership in trust for the benefit of the holders of any SCUs so called for redemption, then from and after the redemption date distributions shall cease to be payable with respect to such SCUs, such SCUs shall no longer be deemed outstanding and all rights of the holders of such units will terminate, except the right to receive the distribution payments and Common Units described in the second sentence of this Paragraph 4(a).
(b) Notwithstanding the provisions of Paragraph 4(a) above, unless full cumulative dividends on all SCUs shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash set apart for payment for all past dividend periods and the then current dividend period or portion thereof, no SCUs shall be redeemed unless all outstanding units of SCUs are simultaneously redeemed, and the Operating Partnership shall not purchase or otherwise acquire directly or indirectly any SCUs.
(c) Notice of redemption shall be mailed by the Operating Partnership, postage prepaid, not less than thirty (30) nor more than sixty (60) days prior to the redemption date, addressed to the respective holders of record of the units of SCUs to be redeemed at their respective addresses as they appear on the records of the Operating Partnership. Failure to give such notice or any defect thereto or in the mailing thereof shall not affect the validity of the proceedings for the redemption of any SCUs. Each notice shall state (i) the redemption date; (ii) the total number of SCUs to be redeemed and the number of SCUs held by such holder to be redeemed; (iii) the Common Unit Amount; (iv) the place or places where SCUs are to be surrendered for payment of the distribution shortfall described in Section 6.2(a)(iii) of the Partnership Agreement outstanding thereon and the issuance of a number of Common Units equal to the Common Unit Amount; and (v) that distributions on the SCUs to be redeemed shall cease to be payable on such redemption date.
(d) All SCUs redeemed pursuant to this Paragraph 4 shall be deemed retired and terminated.
(e) The SCUs shall have no stated maturity and shall not be subject to any sinking fund or mandatory redemption except as otherwise provided in this Section 4.
5. Voting Rights. (a) Holders of the SCUs shall have the voting rights set forth herein and in the Partnership Agreement.
(b) So long as any SCUs remain outstanding, the Operating Partnership shall not, without the affirmative vote or consent of the holders of two-thirds of the SCUs outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class):
(i) undertake, consent to, or otherwise participate in or acquiesce to any recapitalization transaction (including, without limitation, an initial public offering, a merger, consolidation, other business combination, exchange, self-tender offer for all or substantially all of the Common Units, or sale or other disposition of all or substantially all of the Operating Partnership's assets) (each of the foregoing being referred to herein as a "Recapitalization Transaction") unless in connection with such a Recapitalization Transaction (x) either each SCU outstanding prior to the Recapitalization Transaction will (A) remain outstanding following the consummation of such Recapitalization Transaction without any amendment of any of the provisions of this Exhibit E or the other terms of the Partnership Agreement establishing the rights and obligations of holders of the SCUs in any manner adverse to the holders of SCUs or (B) be converted into or exchanged for securities of the surviving entity having preferences, conversion and other rights, voting powers, restrictions, distribution rights and terms and conditions of redemption thereof no less favorable than those of a SCU under this Exhibit E and the Partnership Agreement, and (y) each holder of SCUs shall have the option to convert its SCUs into the amount and type of consideration and/or securities receivable by a holder of the number of Common Units into which such holder's SCUs could have been exchanged immediately prior to the consummation of the Recapitalization Transaction pursuant to Paragraph 7(b) hereof upon the consummation of the Recapitalization Transaction, and (z) the holders of the SCUs will be treated no less favorably than the holders of the Common Units;
(ii) amend, alter or repeal the provisions of this Exhibit E or Sections 6.2(a)(iii), 6.2(a)(iv), 6.2(a)(v), 6.2(d) or 6.2(e) of the Partnership Agreement, the provisions of Section 9.2(a) as they apply to holders of SCUs or Common Units issued in respect thereof or the provisions of Section 9.2(c), in each case whether by merger, consolidation or otherwise; or
(iii) otherwise amend, alter or repeal the provisions of the Partnership Agreement in a manner that would adversely affect in any material respect the holders of the SCUs disproportionately with respect to the rights of holders of the Common Units; it being understood that nothing in this Exhibit E, shall be deemed to limit the right of the Operating Partnership to issue securities to holders of any interests in the Operating Partnership that rank on a parity with or prior to the SCUs with respect to distribution rights and rights upon dissolution, liquidation or winding-up of the Operating Partnership or to amend, alter or repeal the terms of any such securities.
(c) The holders of the SCUs shall have the right to vote with the holders of Common Units, as a single class, on any matter on which the holders of Common Units are entitled to vote.
(d) The foregoing voting provisions of this Paragraph 5 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding units of SCUs shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption.
(e) In any matter in which the SCUs may vote as a class (as expressly provided herein or as may be required by law), each SCU shall be entitled to one vote. In any matter in which the SCUs may vote with the Common Units as a single class, each SCU shall be entitled to the number of votes equal to the number of Common Units issuable upon the exchange of one SCU pursuant to Paragraph 7(b) hereof.
6. Notice of Extraordinary Transaction of the Company. The Company shall notify
the holders of SCUs of its intention to make any extraordinary distributions of
cash or property to its shareholders or effect a merger (including, without
limitation, a triangular merger), a sale of all or substantially all of its
assets or any other similar transaction outside of the ordinary course of
business at least thirty (30) days prior to the record date, if any, to
determine shareholders eligible to receive such distribution or to vote upon the
approval of such merger, sale or other transaction (or, if no such record date
is applicable, at least thirty (30) days before consummation of such merger,
sale or other transaction). This provision for such notice shall not be deemed
(i) to permit any transaction that otherwise is prohibited by this Exhibit E or
the Partnership Agreement or requires the approval of the holders of SCUs or
(ii) to require a vote of the holders of SCUs to a transaction that does not
otherwise require such a vote under this Exhibit E and the Partnership Agreement
or (iii) to effect the validity of any transaction if such notice is not given.
Each holder of SCUs, as a condition to the receipt of the notice pursuant
hereto, shall be obligated to keep confidential the information set forth
therein until such time as the Company has made public disclosure thereof and to
use such information during such period of confidentiality solely for purposes
of determining whether or not to exercise its Series J Exchange Rights;
provided, however, that a holder of SCUs may disclose such information to its
attorney, accountant and/or financial advisor for purposes of obtaining advice
with respect to such exercise so long as such attorney, accountant and/or
financial advisor agrees to receive and hold such information subject to this
confidentiality requirement.
7. Exchange.
(a) At any time following the earlier to occur of (x) January 31, 2004 or (y) the death of the direct or indirect holder or beneficial owner thereof, and in either case subject to the remainder of this Paragraph 7, a holder of SCUs shall have the right (the "Series J Exchange Right") to exchange all or any portion of such holder's SCU's (the "Series J Offered Units") for Series J Exchange Consideration (as defined below), subject to the limitations
contained in Paragraphs 7(c) and 7(d) below. Any such Series J Exchange Right shall be exercised pursuant to an exchange notice comparable to the Exchange Notice required under Exhibit D to the Partnership Agreement (such notice, a "Series J Exchange Notice") delivered, at the election of the holder exercising the Series J Exchange Right (the "Series J Exercising Holder"), to the Company or to the Operating Partnership, by the Series J Exercising Holder.
(b) The exchange consideration (the "Series J Exchange
Consideration") payable by the Company or the Operating Partnership, as
applicable, to each Series J Exercising Holder shall be equal to the product of
(x) the Common Stock Amount with respect to the Series J Offered Units
multiplied by (y) the Current Per Share Market Price, each computed as of the
date on which the Series J Exchange Notice was delivered to the Company. In
connection with a Series J Exchange Notice delivered to the Company, the Series
J Exchange Consideration shall, in the sole and absolute discretion of the
Company, be paid in the form of (A) cash, or cashier's or certified check, or by
wire transfer of immediately available funds to the Series J Exercising Holder's
designated account or (B) subject to the applicable Ownership Limit, by the
issuance by the Company of a number of shares of its Common Stock equal to the
Common Stock Amount with respect to the Series J Offered Units or (C) subject to
the applicable Ownership Limit, any combination of cash and Common Stock (valued
at the Current Per Share Market Price). In connection with a Series J Exchange
Notice delivered to the Operating Partnership, the Series J Exchange
Consideration shall be paid by the Operating Partnership by the issuance by the
Operating Partnership of a number of Common Units equal to the Common Unit
Amount. In addition to the Series J Exchange Consideration, concurrently with
any exchange pursuant to this Paragraph 7, the Operating Partnership shall pay
the Series J Exercising Holder cash in an amount equal to any distribution
shortfall described in Section 6.2(a)(iii) of the Partnership Agreement with
respect to the Series J Offered Units outstanding on the date of the exchange.
As used herein, the term "Common Unit Amount" shall mean, with respect to any number of SCUs, the number of Common Units equal to such number of SCUs multiplied by the Common Unit Conversion Factor; provided, however, that in the event that the Operating Partnership issues to all holders of Common Units rights, options, warrants or convertible or exchangeable securities entitling such holders to subscribe for or purchase additional Common Units, or any other securities or property of the Operating Partnership (collectively, "Common Unit Additional Rights"), other than a right to receive Common Units pursuant to a Distribution of Common Units in Lieu of Cash (as defined below), then the Common Unit Amount shall also include (other than with respect to any Common Units or SCUs "beneficially owned" by an "Acquiring Person" (as those terms are defined in the Company's Rights Agreement, dated as of April 30, 1999, as amended as of the Principal Closing Date (as defined in the Master Contribution Agreement) and as it may be further amended from time to time, and any successor agreement thereof (collectively, the "Rights Agreement"))), such Common Unit Additional Rights that a holder of that number of Common Units would be entitled to receive. As used herein, the term "Common Unit Conversion Factor" shall mean 1.0, provided, that, in the event that the Operating Partnership (i) makes a distribution to all holders of its Common Units in Common Units (other than a distribution of Common Units pursuant to an offer to all holders of Common Units and SCUs permitting each to elect to receive a distribution in Common Units in lieu of a cash distribution (such a distribution of Common Units is referred to herein as a "Distribution of Common Units in Lieu of Cash")), (ii) subdivides or splits its outstanding Common Units (which shall expressly exclude any Distribution of Common Units in Lieu of Cash), or (iii) combines or reverse splits its outstanding Common Units into a smaller number of Common Units (in each case, without making a comparable distribution, subdivision, split, combination or reverse split with respect to the SCUs), the Common Unit Conversion Factor in effect immediately preceding such event shall be adjusted by multiplying the Common Unit Conversion Factor by a fraction, the numerator of which shall be the number of Common Units issued and outstanding on the record date for such distribution, subdivision, split, combination or reverse split (assuming for such purposes that such distribution, subdivision, split, combination or reverse split occurred as of such time), and the denominator of which shall be the actual number of Common Units (determined without the above assumption) issued and outstanding on the record date for such distribution, subdivision, split, combination or reverse split. Any adjustment to the Common Unit Conversion Factor shall become effective immediately after the record date for such event in the case of a distribution or the effective date in the case of a subdivision, split, combination or reverse split.
(c) Notwithstanding anything herein to the contrary, any Series J Exchange Right with respect to the Company may only be exercised to the extent that, upon exercise of the Series J Exchange Right, assuming payment by the Company of the Series J Exchange Consideration in shares of Common Stock, the Series J Exercising Holder will not, on a cumulative basis, Beneficially Own or Constructively Own shares of Common Stock, including shares of Common Stock to be issued upon exercise of the Series J Exchange Right, in excess of the applicable Ownership Limit. If a Series J Exchange Notice is delivered to the Company but, as a result of the applicable Ownership Limit or as a result of restrictions contained in the certificate of incorporation of the Company, the Series J Exchange Right cannot be exercised in full as aforesaid, the Series J Exchange Notice shall be deemed to be modified to provide that the Series J Exchange Right shall be exercised only to the extent permitted under the applicable Ownership Limit under the certificate of incorporation of the Company, and the Series J Exchange Notice with respect to the remainder of such Series J Exchange Right shall be deemed to have been withdrawn.
(d) Series J Exchange Rights may be exercised at any time after the date set forth in Paragraph 7(a) above and from time to time, provided, however, that, except as set forth below in Paragraph 7(f) or with the prior written consent of the General Partner, (x) only two (2) Series J Exchange Notices may be delivered to the Company or the Operating Partnership by each holder of SCUs during any consecutive twelve (12) month period; and (y) no Series J Exchange Notice may be delivered with respect to SCUs either (i) having a value of less than $250,000 calculated by multiplying the Common Stock Amount with respect to such SCUs by the Current Per Share Market Price or (ii) if a holder does not own SCUs having a value of $250,000 or more, constituting less than all of the SCUs owned by such holder.
(e) Within thirty (30) days after receipt by the Company or the Operating Partnership of any Series J Exchange Notice delivered in accordance with the requirements of Paragraph 7(a) hereof, the Company or the Operating Partnership, as applicable, shall deliver to the Series J Exercising Holder a notice (a "Series J Election Notice"), which Series J Election Notice shall set forth the computation of the Series J Exchange Consideration and, in the case of a Series J Election Notice delivered by the Company, shall specify the form of the Series J Exchange Consideration (which shall be in accordance with Paragraph 7(b) hereof), to be paid by the Company or the Operating Partnership, as applicable to such Series J Exercising Holder and the date, time and location for completion of the purchase and sale of the Series J Offered Units, which date shall, to the extent required, in no event be more than (A) in the case of Series J Offered Units with respect to which (x) the Operating Partnership is required to pay the Series J Exchange Consideration by issuance of Common Units or (y) the Company has elected to pay the Series J Exchange Consideration by issuance of shares of Common Stock, ten (10) days after the delivery by the Company or the Operating Partnership, as applicable, of the Series J Election Notice for the Series J Offered Units or (B) in the case of Series J Offered Units with respect to which the Company has elected to pay the Series J Exchange Consideration in cash, sixty (60) days after the initial date of receipt by the Company of the Series J Exchange Notice for such Series J Offered Units; provided, however, that such sixty (60) day period may be extended for an additional sixty (60) day period to the extent required for the Company to cause additional shares of its Common Stock to be issued to provide financing to be used to acquire the Series J Offered Units. Notwithstanding the foregoing, each of the Company and the Operating Partnership agrees to use its reasonable efforts to cause the closing of the exchange hereunder to occur as quickly as possible. If the Company or the Operating Partnership, as applicable, has delivered a Series J Election Notice to the Series J Exercising Holder with respect to a Series J Exchange Notice, the Series J Exchange Notice may not be withdrawn or modified by the Series J Exercising Holder (except to the extent of any deemed modification required by Section 7(c) above) without the consent of the General Partner. Similarly, if the Company or the Operating Partnership delivers a Series J Election Notice to a Series J Exercising Holder, the Company or the Operating Partnership, as applicable, may not modify the Series J Election Notice without the consent of the Series J Exercising Holder.
(f) Notwithstanding the limitation set forth in clause (x) of Paragraph 7(d), in the event that the Company provides notice to the holders of SCUs, pursuant to Paragraph 6 hereof, the Series J Exchange Rights shall be exercisable by each holder of SCUs at any time after the date set forth in Paragraph 7(a) that is during the period commencing on the date on which the Company provides such notice and ending on the earlier to occur of thirty (30) days from receipt of the Company's aforesaid notice and the record date, if any, to determine shareholders eligible to receive such distribution or to vote upon the approval of such merger, sale or other extraordinary transaction (or, if no such record date is applicable, the date that is thirty (30) days after the date the Company provides the notice pursuant to Paragraph 6 hereof). In the event that a Series J Exercising Holder delivers to the Company a Series J Exchange Notice pursuant to this Paragraph 7(f), the Company shall be required to deliver a Series J Election Notice before the earlier of (1) the tenth (10th) Business Day after the Company receives the Series J Exchange Notice or (2) one (1) Business Day before the record date to determine shareholders eligible to receive a distribution or vote on approval and such Series J Election Notice shall, among other things, set the date for the purchase and sale of the Series J Offered Units, which date shall, to the extent required, in no event be more than (A) in the case of Series J Offered Units with respect to which the Company has elected to pay the Series J Exchange Consideration by issuance of shares of Common Stock, one (1) Business Day prior to the record date, if any, to determine shareholders eligible to receive such distribution or to vote upon the approval of such merger, sale or other extraordinary transaction or (B) in the case of Series J Offered Units with respect to which the Company has elected to pay the Series J Exchange Consideration in cash, sixty (60) days after the initial date of receipt by the Company of the Series J Exchange Notice for such Series J Offered Units; provided, however, that such sixty (60) day period may be extended for an additional sixty (60) day period to the extent required for the Company to cause additional shares of its Common Stock to be issued to provide financing to be used to acquire the Series J Offered Units. Notwithstanding the foregoing, the Company shall use its reasonable efforts to cause the closing of the exchange hereunder to occur as quickly as possible.
(g) At the closing of the purchase and sale of Series J Offered Units, payment of the Series J Exchange Consideration shall be accompanied by proper instruments of transfer and assignment and by the delivery of (i) representations and warranties of (A) the Series J Exercising Holder with respect to (x) its due authority to sell all of the right, title and interest in and to such Series J Offered Units to the Company or the Operating Partnership, as applicable, (y) the status of the Series J Offered Units being sold, free and clear of all Liens and (z) its intent to acquire the Common Stock or Common Units, as applicable, for investment purposes and not for distribution, and (B) the Company or the Operating Partnership, as applicable, with respect to due authority for the purchase of such Series J Offered Units, and (ii) to the extent that any shares of Common Stock or Common Units are issued in payment of the Series J Exchange Consideration or any portion thereof, (A) an opinion of counsel for the Company or the Operating Partnership, as applicable, reasonably satisfactory to the Series J Exercising Holder, to the effect that (I) such shares of Common Stock or Common Units, as applicable, have been duly authorized, are validly issued, fully-paid and non-assessable and (II) if shares of Common Stock are issued, that the issuance of such shares will not violate the applicable Ownership Limit, and (B) a stock certificate or certificates evidencing the shares of Common Stock to be issued and registered in the name of the Series J Exercising Holder or its designee, with an appropriate legend reflecting that such shares or units are not registered under the Securities Act of 1933, as amended, and may not be offered or sold unless registered pursuant to the provisions of such act or an exemption therefrom is available as confirmed by an opinion of counsel satisfactory to the Company or the Operating Partnership, or an executed amendment to the Partnership Agreement reflecting the Series J Exercising Holder as a holder of the applicable number of Common Units, as applicable.
(h) To facilitate the Company's ability to fully perform its obligations hereunder, the Company covenants and agrees, for the benefit of the holders from time to time of SCUs, as follows:
(i) At all times during the pendency of the Series J Exchange Rights, the Company shall reserve for issuance such number of shares of Common Stock as may be necessary to enable the Company to issue such shares in full payment of the Series J Exchange Consideration in regard to all SCUs which are from time to time outstanding.
(ii) As long as the Company shall be obligated to file periodic reports under the Exchange Act, the Company will timely file such reports in such manner as shall enable any recipient of Common Stock issued to holders of SCUs hereunder in reliance upon an exemption from registration under the Securities Act to continue to be eligible to utilize Rule 144 promulgated by the SEC pursuant to the Securities Act, or any successor rule or regulation or statute thereunder, for the resale thereof.
(iii) Each holder of SCUs, upon request, shall be entitled to receive from the Operating Partnership in a timely manner all reports filed by the Company with the SEC and all other communications transmitted from time to time by the Company to its shareholders generally.
(iv) Other than as contemplated under the terms of the Rights Agreement, issuances of stock pursuant to the Company's dividend reinvestment plan (as described in the Company's prospectus dated August 15, 1995) or any customary dividend reinvestment plan adopted by the Company after that date and other than the issuance of deferred stock awards or the grant of stock options to officers, directors and employees of the Company, the Company shall not issue or sell any shares of Common Stock or other equity securities or any instrument convertible into any equity security for a consideration less than the fair value of such Common Stock or other equity security, as determined in each case by the Board of Directors of the Company, in consultation with the Company's professional advisors, and under no circumstances shall the Company declare any stock dividend, stock split, stock distribution or the like, unless fair and equitable arrangements are provided, to the extent necessary, to fully adjust, and to avoid any dilution in, the rights of holders of the SCUs under this Exhibit E and the Partnership Agreement.
(i) To facilitate the Operating Partnership's ability to fully perform its obligations hereunder, the Operating Partnership covenants and agrees, for the benefit of the holders from time to time of SCUs, as follows:
(i) At all times during the pendency of the Series J Exchange Rights, the Operating Partnership shall reserve for issuance such number of Common Units as may be necessary to enable the Operating Partnership to issue such units in full payment of the Series J Exchange Consideration in regard to all SCUs which are from time to time outstanding.
(ii) Other than partnership interests issuable to the Company which correspond to issuances by the Company pursuant to the Rights Agreement, its current dividend reinvestment plan (as described in the Company's prospectus dated August 15, 1995) or any customary dividend reinvestment plan adopted by the Company after that date, or issuances by the Company of deferred stock awards or the grant of stock options, to officers, directors and employees of the Company, the Operating Partnership shall not issue or sell any Common Units or any instrument convertible into Common Units for a consideration less than the fair value of such Common Units, as determined in each case by the Board of Directors of the Company, in its sole discretion, and under no circumstances shall the Operating Partnership declare any Common Unit dividend, Common Unit split, Common Unit distribution or the like, unless fair and equitable arrangements are provided, to the extent necessary, to fully adjust, and to avoid any dilution in, the rights of holders of the SCUs under this Exhibit E and the Partnership Agreement.
(j) All Series J Offered Units tendered to the Company or to the Operating Partnership, as applicable, in accordance with the exercise of Series J Exchange Rights shall be delivered to the Company or to the Operating Partnership, as applicable, free and clear of all Liens and should any Liens exist or arise with respect to such Units, the Company or the Operating
Partnership, as applicable, shall be under no obligation to acquire the same unless, in connection with such acquisition, the Company or the Operating Partnership, as applicable, has elected to pay such portion of the Series J Exchange Consideration in the form of cash consideration in circumstances where such consideration will be sufficient to cause such existing Lien to be discharged in full upon application of all or a part of such consideration, and the Company or the Operating Partnership, as applicable, is expressly authorized to apply such portion of the Series J Exchange Consideration as may be necessary to satisfy any indebtedness in full and to discharge such Lien in full. In the event any state or local property transfer tax is payable as a result of the transfer of Series J Offered Units to the Company, the transferring holder thereof shall assume and pay such transfer tax.
(k) Subject to the restrictions on transfer set forth in the Partnership Agreement and Paragraph 8 hereof, the Assignee of any holder of SCUs may exercise the rights of such holder of SCUs pursuant to this Paragraph 7, and such holder of SCUs shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such holder's Assignee. In connection with any exercise of such rights by such Assignee on behalf of such holder, the Series J Exchange Consideration shall be paid by the Company or the Operating Partnership. as applicable, directly to such Assignee and not to such holder.
(l) In the event that the Company shall be a party to any transaction (including, without limitation, a merger, consolidation or statutory share exchange with respect to the Common Stock), in each case as a result of which shares of Common Stock are converted into the right to receive shares of capital stock, other securities or other property (including cash or any combination thereof), the Series J Exchange Consideration payable thereafter by the Company pursuant to clauses (B) and (C) of Paragraph 7(b) in lieu of a share of Common Stock shall be the kind and amount of shares of capital stock and other securities and property (including cash or any combination thereof) that was received upon consummation of such transaction in return for one share of Common Stock, and the Series J Exchange Consideration payable by the Operating Partnership pursuant to the last sentence of Paragraph 7(b) shall be adjusted accordingly; and the Company may not become a party to any such transaction unless the terms thereof are consistent with the foregoing.
(m) As of the date hereof (i) the Conversion Factor is 1.0 and
(ii) the Common Unit Conversion Factor is 1.0.
(n) The provisions of Article XI and Exhibit D of the Partnership Agreement shall not apply to the SCUs or to any Common Units received in exchange for, or upon the conversion of, any SCUs in accordance with the terms of this Exhibit E. Exhibit F of the Partnership Agreement sets forth the exchange rights of the Common Units received in exchange for, or upon the conversion of, SCUs in accordance with the terms of this Exhibit E.
8. Restrictions on Transfer. In addition to Transfers permitted pursuant to Article IX of the Partnership Agreement, but subject to Section 9.3 of the Partnership Agreement, the General Partner hereby consents to (i) all Transfers of SCUs which are described in clauses (a)-(d) of this Paragraph 8 (any such Transfer, an "Approved Transfer") and (ii) the admission of any transferee of a SCU pursuant to any Approved Transfer as a Substituted Limited Partner (and the conditions set forth in Section 9.2 of the Partnership Agreement for such admission will be deemed satisfied) upon the filing with the Operating Partnership of (A) a duly executed and acknowledged instrument of assignment between the transferor and the transferee specifying the SCUs being assigned, setting forth the intention of the transferor that such transferee succeed to the transferor's interest as a Limited Partner with respect to the SCUs being assigned and agreement of the transferee assuming all of the obligations of a Limited Partner under the Partnership Agreement with respect to such transferred SCUs accruing from and after the date of transfer, (B) a duly executed and acknowledged instrument by which the transferee confirms to the Operating Partnership that it accepts and adopts the provisions of the Partnership Agreement applicable to a Limited Partner and (C) any other instruments reasonably required by the General Partner and payment by the transferor of a transfer fee to the Operating Partnership sufficient to cover the reasonable expenses of the transfer, if any.
For the purposes of this Paragraph 8, all of the following Transfers shall be considered Approved Transfers:
(a) any transfer by an initial holder of any SCU or any permitted transferee thereof to one or more of the initial holders of SCUs or to the designated holding entity (as contemplated in the Master Contribution Agreement) of one or more of the initial holders of SCUs, which holders and designated holding entities are identified on the Schedule A hereto (each, an "Initial Holder");
(b) any transfer to any Immediate Family Member of any Initial Holder or any initial beneficial owner of any interest in any Initial Holder of SCUs or any Immediate Family Member thereof, or any trust for the benefit of any Initial Holder or initial beneficial owner of any interest in any Initial Holder of SCUs or any Immediate Family Member thereof;
(c) any transfer to any Affiliate of any Initial Holder or initial beneficial owner of any interest in any Initial Holder of SCUs or to any charitable organization; and
(d) any pledge by an Initial Holder or any permitted transferee thereof to an institutional lender as security for a bona fide obligation of the holder, and any transfer to any such pledgee or any designee thereof or purchaser therefrom following a default in the obligation secured by such pledge.
9. Headings of Subdivisions. The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
10. Severability of Provisions. If any rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the SCUs set forth in the Partnership Agreement and this Exhibit E are invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of SCUs set forth in the Partnership Agreement which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the SCUs herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.
11. No Preemptive Rights. No holder of SCUs shall be entitled to any preemptive rights to subscribe for or acquire any unissued units of the Operating Partnership (whether now or hereafter authorized) or securities of the Operating Partnership convertible into or carrying a right to subscribe to or acquire units of the Operating Partnership.
IN WITNESS WHEREOF, CBL Holdings I, Inc., solely in its capacity as the general partner of the Operating Partnership, has caused this Terms of Series J Special Common Units to be duly executed by its Chief Financial Officer this 31st day of January, 2001.
CBL HOLDINGS I, INC.
By: /s/ John N. Foy -------------------------- Name: John N. Foy Title: Chief Financial Officer |
Acknowledged and Agreed:
CBL & Associates Properties, Inc.
By: /s/ John N. Foy
---------------------------
Name: John N. Foy
Title: Chief Financial Officer
|
Dated as of January 31, 2001
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CBL & ASSOCIATES LIMITED PARTNERSHIP (this "Amendment") is hereby adopted by CBL Holdings I, Inc., a Delaware corporation (the "General Partner"), as the general partner of CBL & Associates Limited Partnership, a Delaware limited partnership (the "Partnership"), and by CBL Holdings II, Inc., a Delaware corporation, a limited partner of the Partnership representing a Majority-In-Interest of the Limited Partners of the Partnership (the "Limited Partner"). For ease of reference, capitalized terms used herein and not otherwise defined have the meanings assigned to them in the Second Amended and Restated Agreement of Limited Partnership of CBL & Associates Limited Partnership as the same may be amended, the "Agreement").
WHEREAS, the General Partner desires to establish and set forth the terms of a new series of Partnership Units designated as Series J Special Common Units (the "SCUs").
WHEREAS, Section 4.4(a) of the Agreement grants the General Partner authority to cause the Partnership to issue Partnership Units in the Partnership to any Person in one or more classes or series, with such designations, preferences and relative, participating, optional or other special rights, powers and duties as may be determined by the General Partner in its sole and absolute discretion so long as the issuance does not violate Section 9.3 of the Agreement.
WHEREAS, the General Partner desires to amend the Agreement to, among other things, set forth the terms of the SCUs.
WHEREAS, Sections 4.4(a) and 14.7(b) of the Agreement grant the General Partner power and authority to amend the Agreement (including, without limitation, the distribution and allocation provisions thereof) without the consent of any of the Partnership's Limited Partners to evidence any action taken by the General Partner pursuant to Section 4.4(a) and to set forth the rights, powers and duties of the holders of any Additional Units issued pursuant to Section 4.4(a).
WHEREAS, Section 14.7(a) of the Agreement provides for the amendment of the Agreement with the approval of the General Partner and the Consent of the Limited Partners, subject to the limitations set forth therein.
NOW, THEREFORE, the General Partner, with the Consent of the Limited Partners, hereby amends the Agreement as follows:
1. Section 1.1 of the Agreement is hereby amended and supplemented as set forth below:
(a) The following definitions are hereby added to
Section 1.1 of the Agreement:
"Basic Distribution Amount" shall mean $0.725625; provided, however, that such amount will be adjusted appropriately to account for any unit splits, combinations or other similar events with respect to the SCUs.
"Beneficial Ownership" shall have the meaning set forth in the certificate of incorporation of the Company.
"Constructive Ownership" shall have the meaning set forth in the certificate of incorporation of the Company.
"Common Unit Conversion Factor" shall mean 1.0, provided, that, in the event that the Partnership (i) makes a distribution to all holders of its Common Units in Common Units (other than a distribution of Common Units pursuant to an offer to all holders of Common Units and SCUs permitting each to elect to receive a distribution in Common Units in lieu of a cash distribution (such a distribution of Common Units is referred to herein as a "Distribution of Common Units in Lieu of Cash")), (ii) subdivides or splits its outstanding Common Units (which shall expressly exclude any Distribution of Common Units in Lieu of Cash), or (iii) combines or reverse splits its outstanding Common Units into a smaller number of Common Units (in each case, without making a comparable distribution, subdivision, split, combination or reverse split with respect to the SCUs), the Common Unit Conversion Factor in effect immediately preceding such event shall be adjusted by multiplying the Common Unit Conversion Factor by a fraction, the numerator of which shall be the number of Common Units issued and outstanding on the record date for such distribution, subdivision, split, combination or reverse split (assuming for such purposes that such distribution, subdivision, split, combination or reverse split occurred as of such time), and the denominator of which shall be the actual number of Common Units (determined without the above assumption) issued and outstanding on the record date for such distribution, subdivision, split, combination or reverse split. Any adjustment to the Common Unit Conversion Factor shall become effective immediately after the record date for such event in the case of a distribution or the effective date in the case of a subdivision, split, combination or reverse split.
"Common Unit Distribution Amount" shall mean the product of
(i) the quarterly distribution paid with respect to one Common
Unit for that quarter pursuant to Section 6.2(a)(v) hereof
multiplied by (ii) the Common Unit Conversion Factor.
"Distribution of Common Units in Lieu of Cash" shall have the meaning set forth in the definition of Common Unit Conversion Factor above.
"Floor Distribution" shall mean, with respect to any quarter, $0.4375.
"Jacobs Limited Partner Representative" shall have the meaning set forth in Section 7.12 hereof.
"Jacobs Property" shall have the meaning set forth in Section 6.2(b) hereof.
"JRI" shall mean Jacobs Realty Investors Limited Partnership, a Delaware limited partnership.
"Gross Income" shall mean, for each fiscal year or other applicable period, an amount equal to the Partnership's gross income for such year or period as determined for federal income tax purposes, with the following adjustments: (a) by including as an item of gross income any tax-exempt income received by the Partnership; (b) gain resulting from any
disposition of Partnership property with respect to which gain is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of such property rather than its adjusted tax basis; (c) in the event of an adjustment of the Gross Asset Value of any Partnership asset which requires that the Capital Accounts of the Partnership be adjusted pursuant to Regulation Section 1.704-1(b)(2)(iv)(e), (f) or (m), the amount of such positive adjustment is to be taken into account as additional Gross Income pursuant to Exhibit C; and (d) excluding any items specially allocated pursuant to Section 2 of Exhibit C.
"Master Contribution Agreement" shall mean the Master Contribution Agreement, dated as of September 25, 2000, among the Company, the Partnership, JRI and certain other persons named therein, as amended by the Letter Agreement, dated November 13, 2000, and the Amendment to the Master Contribution Agreement, dated as of December 19, 2000, and as the same may be further amended, modified or supplemented.
"Net Capital Gain" shall mean, for any taxable year, the excess of recognized gains with respect to dispositions of Property over recognized losses with respect to dispositions of Property, in each case as determined by reference to Gross Asset Value.
"Reduction Factor" shall mean the lesser of (i) the quotient of the Common Unit Distribution Amount for such quarter divided by the Floor Distribution and (ii) one.
"Safe Harbor Rate" shall have the meaning set forth in Section 6.2(e) hereof.
"SCUs" shall have the meaning set forth in Exhibit E.
"Series J Exchange Notice" shall have the meaning set forth in Exhibit E.
"Series J Exchange Rights" shall have the meaning set forth in Exhibit E.
"Series J Offered Units" shall have the meaning set forth in Exhibit E.
(b) The following sentence is hereby added to the end of the definition of "Capital Account" in the Agreement:
"For the avoidance of doubt, distributions pursuant to an exercise of an option set forth in a JRI Option Agreement entered into in connection with the Master Contribution Agreement shall not result in any reduction in Capital Accounts. "
(c) The definition of "Common Stock Amount" is hereby deleted and replaced in its entirety with the following:
"Common Stock Amount" shall mean, with respect to any number of Common Units or SCUs, the number of shares of Common Stock equal to such number of Common Units or SCUs, as the case may be, multiplied by the Conversion Factor; provided, however, that in the event that the Company issues to all holders of Common Stock rights, options, warrants or convertible or exchangeable securities entitling the shareholders to subscribe for or purchase additional Common Stock, or any other securities or property of the Company, the value of which is not included in the first sentence of the definition of Closing Price of the shares of Common Stock (collectively, "additional rights"), other than a right to receive a dividend or other distribution of Common Stock that corresponds to Common Units issued to the Company pursuant to a Distribution of Common Units in Lieu of Cash, then the Common Stock Amount shall also include, other than with respect to any Common Units or SCUs "beneficially owned" by an "Acquiring Person" (as such terms are defined in the Company's Rights Agreement, dated as of April 30, 1999, as amended as of the Principal Closing Date (as defined in the Master Contribution Agreement)
and as it may be further amended from time to time, and any successor agreement thereto), such additional rights that a holder of that number of shares of Common Stock would be entitled to receive.
(d) The definition of "Consent of the Limited Partners" is hereby deleted and replaced in its entirety with the following:
"Consent of the Limited Partners" shall mean the written consent of a Majority-In-Interest of the Limited Partners, which consent shall be obtained prior to the taking of any action for which it is required by this Agreement and may be given or withheld by a Majority-In-Interest of the Limited Partners, unless otherwise expressly provided herein, in their sole and absolute discretion.
(e) The definition of "Conversion Factor" is hereby deleted and replaced in its entirety with the following:
"Conversion Factor" shall mean 1.0, provided that in the event that the Company (i) pays a dividend on its outstanding shares of Common Stock in shares of Common Stock or makes a distribution to all holders of its outstanding Common Stock in shares of Common Stock (in either case other than a dividend or other distribution of shares of Common Stock that corresponds to Common Units issued to the Company pursuant to a Dividend of Common Units in Lieu of Cash), (ii) subdivides or splits its outstanding shares of Common Stock, or (iii) combines or reverse splits its outstanding shares of Common Stock into a smaller number of shares of Common Stock (in each case, without making a comparable dividend, distribution, subdivision, split, combination or reverse split with respect to the Common Units and the SCUs), the Conversion Factor in effect immediately preceding such event shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of shares of Common Stock issued and outstanding on the record date for such dividend, distribution, subdivision, split, combination or reverse split (assuming for such purposes that such dividend, distribution, subdivision, split, combination or reverse split occurred as of such time), and the denominator of which shall be the actual number of shares of Common Stock (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision, split, combination or reverse split. Any adjustment to the Conversion Factor shall become effective immediately after the record date for such event in the case of a dividend or distribution or the effective date in the case of a subdivision, split, combination or reverse split.
(f) The definition of "Limited Partner Representatives" is hereby deleted and replaced in its entirety with the following:
"Limited Partner Representative" shall mean, with respect to any Limited Partner, the representative appointed by such Limited Partner pursuant to the first sentence of Section 7.12 or, if none, such Limited Partner.
(g) The definition of "Limited Partners" is hereby deleted and replaced in its entirety with the following:
"Limited Partners" shall mean (i) those Persons listed under the heading "Limited Partners" on Exhibit A hereto in their respective capacities as limited partners of the Partnership, their permitted successors and assigns and (ii) all Additional Partners and Substituted Limited Partners.
(h) The definition of "Ownership Limit" is hereby deleted and replaced in its entirety with the following:
"Ownership Limit" shall have the meaning set forth in the certificate of incorporation of the Company, as the same may be modified by the Board of Directors of the Company as permitted therein.
(i) The definition of "Partnership Units" is hereby deleted and replaced in its entirety with the following:
"Partnership Units" shall mean the Common Units, the Preferred Units and the SCUs.
(j) The definition of "Substituted Limited Partner" is hereby deleted and replaced in its entirety with the following:
"Substituted Limited Partner" shall mean any Person admitted to the Partnership as a limited partner pursuant to the terms of Section 9.2.
(k) The definition of "Transfer" is hereby deleted and replaced in its entirety with the following:
"Transfer" as a noun, shall mean any sale, assignment, conveyance, pledge hypothecation, gift, encumbrance or other transfer, including, without limitation, a transfer by operation of law or through the laws of inheritance and succession, and as a verb, shall mean to sell, assign, convey, pledge, hypothecate, give, encumber or otherwise transfer, including, without limitation, by operation of law or through the laws of inheritance and succession.
2. Pursuant to Sections 4.5 and 7.8 of the Agreement, upon execution of a Limited Partner Acceptance of the Partnership Agreement in the form attached hereto as Attachment 1 (a "Limited Partner Acceptance") or by causing a Limited Partner Acceptance to be executed on its behalf, each initial holder of SCUs automatically will be admitted as an Additional Partner of the Partnership, without any further action or approval and the General Partner hereby agrees to cause the names of such recipients to be recorded on the books and records of the Partnership on the date of such admission. In addition, upon the transfer by an initial recipient of SCUs to its designated holding entity as contemplated by the Master Contribution Agreement, and upon execution of a Limited Partner Acceptance by or on behalf of such designated holding entity, such designated holding entity automatically will be admitted as a Substituted Limited Partner of the Partnership with respect to the transferred SCUs (and all of the conditions set forth in Section 9.2 of the Agreement for such admission will be deemed satisfied), without any further action or approval, and the General Partner hereby agrees to cause the name of such designated holding entity to be recorded on the books and records of the Partnership on the date of such admission.
3. The second sentence of Section 6.2(a) is hereby deleted and replaced in its entirety with the following:
"All such distributions shall be made in accordance with the following order of priority:"
4. Section 6.2(a)(iii) of the Agreement is hereby deleted and replaced in its entirety with the following:
"(iii) Third, to the extent that the amount of Net Cash Flow distributed to the holders of SCUs for any prior quarter was (for any reason, including as a result of Section 6.2(e), a lack of legally available funds or a decision by the General Partner not to make distributions for such quarter) less than the amount required to be distributed for such quarter on account of the SCUs pursuant to subparagraph (a)(iv) below, and such shortfall has not been subsequently distributed
pursuant to this Section 6.2(a)(iii), Net Cash Flow shall be distributed to the holders of SCUs ratably until they have received an amount per SCU necessary to satisfy such shortfall for all prior quarters of the current and all prior Partnership taxable years;"
5. The following paragraphs are hereby added to the end of Section 6.2(a):
"(iv) Fourth, Net Cash Flow shall be distributed to the holders of SCUs ratably until they have received for the quarter to which the distribution relates an amount for each outstanding SCU equal to the Basic Distribution Amount, provided, however, that in the event that the Common Unit Distribution Amount with respect to each of the four consecutive calendar quarters immediately preceding the calendar quarter to which the distribution under this subparagraph (a)(iv) relates is not equal to or greater than the Floor Distribution, then the amount required to be distributed under this subparagraph (a)(iv) for each outstanding SCU shall be equal to the product of the Reduction Factor and the Basic Distribution Amount; and
(v) Fifth, the balance of the Net Cash Flow to be distributed,
if any, shall be distributed to holders of SCUs and Common
Units, pro rata in accordance with their proportionate
ownership of the aggregate number of SCUs and Common Units
outstanding (counting each SCU as the number of Common Units
into which it is convertible pursuant to the terms of Exhibit
E), provided, however, that such distribution to the holders
of SCUs shall be reduced by the amount of the distribution
made to them on account of their SCUs with respect to such
quarter pursuant to subparagraph (a)(iv) above and the
reduction will be allocated among the holders of SCUs pro rata
in accordance with their respective percentage interests in
the total number of SCUs then outstanding.
For the avoidance of doubt, set forth below are illustrations
of the distributions payable to the holders of SCUs and Common
Units pursuant to subparagraphs (a)(iv) and (a)(v) above: (I)
if the Common Unit Distribution Amount is $0.8750, then the
amount payable with respect to each outstanding SCU for that
quarter is $0.8750; (II) if the Common Unit Distribution
Amount is $0.725625, then the amount payable with respect to
each outstanding SCU for that quarter is $0.725625; (III) if
the Common Unit Distribution Amount is $0.5875, then the
amount payable with respect to each outstanding SCU for that
quarter is $0.725625; (IV) if the Common Unit Distribution
Amount is $0.4375, then the amount payable with respect to
each outstanding SCU for that quarter is $.725625; (V) if the
Common Unit Distribution Amount is $0.21875, then the amount
payable with respect to each outstanding SCU for that quarter
is $0.725625 (unless the Common Unit Distribution Amount with
respect to each of the four consecutive quarters immediately
preceding such quarter was less than the Floor Distribution,
in which case the amount payable with respect to each
outstanding SCU for that quarter would be $0.3628125); and
(VI) if the Common Unit Distribution Amount is $0.00, then the
amount payable with respect to each outstanding SCU for that
quarter is $0.725625 (unless the Common Unit Distribution
Amount with respect to each of the four consecutive quarters
immediately preceding such quarter was less than the Floor
Distribution, in which case the amount payable with respect to
each outstanding SCU for that quarter would be $0.00).
6. The second sentence of Section 6.2(b) of the Agreement is hereby deleted.
7. Clause (b) of the third sentence of Section 6.2(b) of the Agreement is hereby deleted and replaced in its entirety with the following:
"(b) in the event of a sale of a Property or an interest in a
Property Partnership (other than a direct or indirect interest
in a Property set forth in Exhibit A of the Master
Contribution Agreement (a "Jacobs Property"), and other than a
Property constituting "substituted basis property" (as defined
in Section 7701(a)(42) of the Code) with respect to a Jacobs
Property) giving rise to a special allocation of taxable
income or gain to a Limited Partner or Partners pursuant to
Section 3(c) of Exhibit C, the General Partner shall cause the
Partnership to distribute the Net Sale Proceeds therefrom up
to an amount sufficient to enable such Limited Partner or
Partners to pay any income tax liability with respect to the
income or gain so specially allocated (or, if any such Limited
Partner is a partnership or S corporation, to enable such
Limited Partner to distribute sufficient amounts to its equity
owners to enable such owners to pay any income tax liability
with respect to their share of such taxable income or gain)."
8. The last sentence of Section 6.2(b) of the Agreement is hereby deleted.
9. Section 6.2(d) of the Agreement is hereby deleted and replaced in its entirety with the following:
"(d) Notwithstanding the foregoing, all distributions pursuant
to this Section 6.2 shall remain subject to the provisions of
(i) the Certificate of Designation for each class or series of
Preferred Units set forth in Exhibit B hereto and (ii) Exhibit
E hereto with respect to the SCUs."
10. The following paragraph is hereby added as Section 6.2(e) of the Agreement:
"(e) Notwithstanding the provisions of Section 6.2(a) above, if the distributions with respect to the SCUs made on or prior to the second anniversary of the issuance of the SCUs would result in any holder of a SCU receiving an annual return on such holder's "unreturned capital" (as defined for purposes of Treasury Regulation Section 1.707-4(a)) for a Partnership tax year (treating the Partnership tax year in which such second anniversary occurs as ending on such date) in excess of the Safe Harbor Rate (as defined below), then the distributions to such holder in excess of such Safe Harbor Rate will be deferred, will continue to cumulate and will be payable on the earlier to occur of (i) the disposition of the SCUs to which such deferred distributions relate in a transaction in which the disposing holder recognizes taxable gain thereon or (ii) the first distribution payment date with respect to the SCUs following the second anniversary of the issuance of the SCUs. For purposes of the foregoing, the "Safe Harbor Rate" shall equal 150% of the highest applicable Federal rate, based on quarterly compounding, in effect for purposes of Section 1274(d) of the Code at any time between the date of the issuance of the SCUs and the date on which the relevant distribution payment is made."
11. The following paragraph is hereby added as Section 6.2(f) of the Agreement:
"(f) Distributions to Common Units and SCUs may be made by offering the holders of Common Units and SCUs the opportunity to make an election to take a portion of such distribution in cash or additional Common Units; provided that such an offer may not be made unless (i) holders of SCUs and holders of Common Units received on a conversion or redemption of SCUs will receive the full amount of the distribution in cash to the extent that such holders elect to receive cash, including an election to receive 100% of the distribution in cash, (ii) with respect to distributions made within two years of the final Closing provided for in the Master Contribution Agreement, such distributions will not cause the aggregate distributions to a holder of SCUs or a holder of Common Units received on a conversion or redemption of SCUs, other than distributions to such holder in respect of the Basic Distribution Amount, to exceed the product of (x) the lesser of such holder's percentage interest in Partnership profits
for the year in which the distribution is made or such
holder's percentage interest in Partnership profits for the
life of the Partnership (as determined for purposes of
Treasury Regulations Section 1.707-4(b)) and (y) the
Partnership's net cash flow from operations for the year in
which the distribution is made (as determined for purposes of
Treasury Regulations Section 1.707-4(b)) and (iii) holders of
SCUs that elect to receive 100% of the distribution in cash
will have received in respect of the quarter to which such
distribution relates an amount per SCU, in cash, pursuant to
Section 6.2(a)(iv), equal to the Basic Distribution Amount.
Any such election will be made pro rata between the Common
Units and SCUs, i.e., the same amount of cash or Common Units
shall be offered with respect to each Common Unit and SCU.
Holders of Common Units or SCUs shall in no event be required
to elect to receive additional Common Units."
12. Section 6.6 of the Agreement is hereby deleted and replaced in its entirety with the following:
"All elections required or permitted to be made by the Partnership under any applicable tax law shall be made by the General Partner in its sole discretion; provided, however, the General Partner shall, if requested by a transferee, file an election on behalf of the Partnership pursuant to Section 754 of the Code to adjust the basis of the Partnership property in the case of a Transfer of a Partnership Unit, including Transfers made in connection with the exercise of Rights (or Series J Exchange Rights), made in accordance with the provisions of this Agreement. The General Partner shall cause the Accountants to prepare and file all state and federal tax returns on a timely basis."
13. Section 7.12 of the Agreement is hereby deleted and replaced in its entirety with the following:
"Upon written notice to the General Partner, any Limited Partner or group of Limited Partners may appoint a representative to act on its or their behalf with respect to all Partnership matters, including exercising all voting rights of the Partnership Units owned by such Limited Partner. Whenever, under the terms of this Agreement, matters require the Consent of the Limited Partners, the same shall mean the consent of Limited Partner Representatives entitled to exercise voting rights with respect to a majority of the Partnership Units entitled to vote thereon, and any action taken by the Limited Partner Representatives shall be fully binding on the Limited Partners; it being the intention of the Limited Partners that the Limited Partner Representatives shall have full power and authority, to take all action, or to authorize all action, which the Limited Partners are entitled to take or authorize under the provisions of this Agreement. Any appointments of Limited Partner Representatives made pursuant to this Section 7.12 shall remain effective until rescinded in a written notice to the General Partner, and the General Partner shall have the right and authority to rely (and shall be fully protected in so doing) on the actions taken and directions given by such Limited Partner Representatives without any further evidence of their authority or further action by the Limited Partners that appointed them. Each of the Limited Partners (identified on Exhibit G hereto) hereby appoints JRI (or any person or entity appointed by JRI upon written notice to the General Partner; JRI, or such person or entity appointed by JRI upon written notice to the General Partner, is referred to herein as the "Jacobs Limited Partner Representative") as his, her or its Limited Partner Representative with respect to all of the Partnership Units now or hereafter owned by such Limited Partner and such appointment shall remain effective with respect to each such Limited Partner and each transferee of the Partnership Units of each such Limited Partner until rescinded with respect to such Limited Partner or transferee in a written notice from that Limited Partner or transferee to the General Partner."
14. The last sentence of Section 8.2 of the Agreement is hereby deleted and replaced in its entirety with the following:
"Notwithstanding the foregoing, all distributions pursuant to this Section 8.2 shall remain subject to the provisions of (i) the Certificate of Designation for each class or series of Preferred Units set forth in Exhibit B hereto and (ii) Exhibit E hereto with respect to the SCUs."
15. Section 9.2(a) of the Agreement is hereby deleted and replaced in its entirety with the following:
"Subject to the provisions of Section 9.3 hereof, each Limited Partner shall have the right to Transfer all or a portion of its Partnership Units to any Person that is the Immediate Family of such Limited Partner, an Affiliate of such Limited Partner, another Limited Partner, an institutional lender as security for a bona fide obligation of such Limited Partner, a bona fide pledgee after a default in the obligation secured by the pledge (or to a bona fide purchaser for value from such pledgee), provided in each such case that prior written notice of the proposed Transfer is delivered to the General Partner. Any transfer of Partnership Units permitted by the first sentence of this Section 9.2(a) or by any other provision of this Agreement (including, for example, Section 9.2(c) and Paragraph 8 of Exhibit E) automatically will be admitted as a Substituted Limited Partner upon the filing with the Partnership of (A) a duly executed and acknowledged instrument of assignment between the transferor and the transferee specifying the Partnership Units being assigned, setting forth the intention of the transferor that such transferee succeed to the transferor's interest as a Limited Partner with respect to the Partnership Units being assigned and agreement of the transferee assuming all of the obligations of a Limited Partner under this Agreement with respect to such transferred Partnership Units accruing from and after the date of transfer, (B) a duly executed and acknowledged instrument by which the transferee confirms to the Partnership that it accepts and adopts the provisions of this Agreement applicable to a Limited Partner and (C) any other instruments reasonably required by the General Partner and payment by the transferor of a transfer fee to the Partnership sufficient to cover the reasonable expenses of the transfer, if any."
16. Section 9.2(b) of the Agreement is hereby deleted and replaced in its entirety with the following:
"Except as set forth in Section 9.2(a) above, or elsewhere in
this Agreement (including Section 9.2(c) and Paragraph 8 of
Exhibit E), no Transfer of a Limited Partner's Partnership
Units may be effected without the consent of the General
Partner, which consent may be given, withheld or conditioned
in the General Partner's sole and absolute discretion. A
transferee of Partnership Units shall be deemed to be an
Assignee with respect to such Partnership Units, but shall not
become or be admitted to the Partnership as a Substituted
Limited Partner without the consent of the General Partner,
which consent may be given or withheld in the General
Partner's sole and absolute discretion. An Assignee shall be
entitled as a result of such Transfer only to receive the
economic benefits of the Partnership Units to which the
transferor Limited Partner would otherwise be entitled, along
with such transferor Limited Partner's rights with respect to
the Rights or such other exchange rights as are applicable to
the Transferred Partnership Units (although any transferee of
any Transferred Partnership Units shall be subject to any and
all ownership limitations contained in the corporate charter
of the Company as may be amended from time to time), and such
Assignee shall have no right (i) to participate in the
management of the Partnership or to vote on any matter
requiring the consent or approval of the Limited Partners,
(ii) to demand or receive any account of the Partnership's
business, or (iii) to inspect the Partnership's books and
records, unless and until such Assignee is admitted to the
Partnership as a Substituted Limited Partner. In addition,
unless and until a transferee is admitted to the Partnership
as a Substituted Limited Partner, the transferor Limited
Partner shall not be relieved of its obligations under this
Agreement (except in the case of a Transfer pursuant to a
statutory merger or consolidation wherein all obligations and
liabilities of the transferor Limited Partner are assumed by a
successor corporation or other Entity by operation of law). A
transferee of Partnership Units may become a Substituted
Limited Partner only upon the satisfaction of the following
conditions: (A) the filing with the Partnership of a duly
executed and acknowledged written instrument of assignment
between the transferor and the transferee in a form approved
by the General Partner specifying the Partnership Units being
assigned, setting forth the intention of the transferor that
such transferee succeed to the transferor's interest as a
Limited Partner with respect to the Partnership Units being
assigned and agreement of the transferee assuming all of the
obligations of a Limited Partner under this Agreement with
respect to such transferred Partnership Units accruing from
and after the date of transfer, (B) execution and
acknowledgment by the transferor Limited Partner and such
transferee of any other instruments required in the sole and
absolute discretion of the General Partner, including the
acceptance and adoption by such transferee of the provisions
of this Agreement; (C) obtaining the written consent of the
General Partner as provided in the second sentence of this
Section 9.2(b); and (D) payment of a transfer fee to the
Partnership, sufficient to cover the reasonable expenses of
the substitution, if any. Any transferee, whether or not
admitted as a Substituted Limited Partner, shall take its
rights to the transferred Partnership Units subject to the
obligations of the transferor Limited Partner hereunder."
17. The following paragraph is added as Section 9.2(c) of the Agreement:
"(c) The Approved Transfers permitted in Paragraph 8 of Exhibit E hereto shall also be available, mutatis mutandis, to holders of any Common Units issued in exchange for or upon the redemption of SCUs."
18. Clause (x) of Section 9.3 of the Agreement is hereby deleted and replaced in its entirety with the following:
"(x) if such Transfer would result in (i) the transferor or
the transferee owning Common Units having a value (computed as
of the date of such proposed Transfer by multiplying the
Common Stock Amount with respect to such Common Units by the
Current Per Share Market Price) less than $250,000, unless
either the transferee is an existing Limited Partner or the
General Partner has consented to such issuance or transfer, or
(ii) the transferee owning Common Units having a value
(computed as of the date of such proposed Transfer by
multiplying the Common Stock Amount with respect to such
Common Units by the Current Per Share Market Price) less than
$250,000, unless such Common Units constitute all of the
Common Units then owned by such transferor or the General
Partner has consented to such issuance or transfer;"
19. Clause (xiv) of Section 9.3 of the Agreement is hereby deleted and replaced in its entirety with the following:
"(xiv) except with the express written consent of the General Partner, if such Transfer, in the opinion of counsel to the General Partner, would result in either the Partnership having more than one hundred Partners or in the Partnership being classified as a "publicly traded partnership" within the meaning of the Code and the Regulations;"
20. In Section 9.3 of the Agreement the word "or" before clause (xv) thereof is hereby deleted and the following additional clause is hereby added prior to the period at the end of Section 9.3 of the Agreement:
"or (xvi) except with respect to (A) Transfers qualifying as
"private Transfers" for purposes of Treasury Regulations
Section 1.7704-1(e) or any successor provision or (B) up to
two Transfers (excluding for this purpose, transfers
qualifying as "private transfers") of interests directly or
indirectly held by the estate of, or other successor to, a
person that has died within the preceding twelve (12) months,
if the General Partner determines in its reasonable discretion
that if it permitted such transfer the Partnership would be
unable to obtain an opinion of counsel of recognized standing
to the effect that the Partnership should not be treated as a
"publicly traded partnership" within the meaning of Section
7704(b) of the Code."
21. The following sentence is hereby added to the end of
Section 11.1 of the Agreement:
"Notwithstanding the foregoing, the Rights in respect of the Common Units issued upon the redemption or exchange of SCUs shall be subject to the terms, conditions and restrictions set forth in Exhibit F hereto."
22. The following sentence is hereby added to the end of
Section 11.2 of the Agreement:
"Notwithstanding the foregoing, the terms and provisions applicable to the Rights in respect of the Common Units issued upon the redemption or exchange of SCUs shall be as set forth in Exhibit F hereto."
23. Exhibit A of the Agreement is hereby deleted and is replaced in its entirety by new Exhibit A attached hereto as Attachment 2.
24. Exhibit C of the Agreement is hereby deleted and is replaced in its entirety by new Exhibit C attached hereto as Attachment 3.
25. The exhibit attached to this Amendment as Attachment 4 is hereby added to the Agreement as Exhibit E thereof.
26. The exhibit attached to this Amendment as Attachment 5 is hereby added to the Agreement as Exhibit F thereof.
27. The exhibit attached to this Amendment as Attachment 6 is hereby added to the Agreement as Exhibit G thereof.
28. Except as expressly amended hereby, the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the General Partner has executed this Amendment as of the date first written above.
CBL HOLDINGS I, INC.
By: /s/ John N. Foy -------------------------- Name: John N. Foy Title: Chief Financial Officer |
Accepted and Agreed:
CBL & ASSOCIATES PROPERTIES, INC.
By: /s/ John N. Foy
---------------------------
Name: John N. Foy
Title: Chief Financial Officer
|
Consented to:
CBL HOLDINGS II, INC.
By: /s/ John N. Foy
---------------------------
Name: John N. Foy
Title: Chief Financial Officer
|
Attachment 1
LIMITED PARTNER ACCEPTANCE OF
PARTNERSHIP AGREEMENT
This Limited Partner Acceptance of Partnership Agreement (this "Acceptance") is made as of ______, 2001, by _________, [a ________ organized under the laws of the State of ____] (the "Limited Partner"), to and for the benefit of CBL & Associates Limited Partnership, a Delaware limited partnership (the "Partnership").
Capitalized terms used and not defined herein shall have the meaning set forth in the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of June 30, 1998, as amended through the date hereof (the "Partnership Agreement").
WHEREAS, on the date hereof, [the Partnership has agreed to issue to the Limited Partner [_______] SCUs (the "Units") in connection with the closing of the transactions contemplated by the Master Contribution Agreement, dated as of September 25, 2000, among the Partnership, CBL & Associates Properties, Inc., Jacobs Realty Investors Limited Partnership and Richard E. Jacobs, solely as Trustee of the Richard E. Jacobs Revocable Living Trust and the David H. Jacobs Marital Trust, as amended] [______ received [______] SCUs (the "Units") in connection with the closing of the transactions contemplated by the Master Contribution Agreement, dated as of September 25, 2000 (as amended, the "Master Contribution Agreement"), among the Partnership, CBL & Associates Properties, Inc., Jacobs Realty Investors Limited Partnership and Richard E. Jacobs, solely as Trustee of the Richard E. Jacobs Revocable Living Trust and the David H. Jacobs Marital Trust and transferred all of such Units to the Limited Partner, its designated holding entity, as contemplated in the Master Contribution Agreement]; and
WHEREAS, in connection with the acceptance of the Units by the Limited Partner, the Limited Partner has agreed to affirm its obligations as a limited partner under the Partnership Agreement with respect to the Units and to confirm the additional agreements set forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Limited Partner hereby confirms that it has been given the opportunity to review the terms of the Partnership Agreement and affirms and agrees that it is bound by each of the terms and conditions of the Partnership Agreement applicable to a holder of SCUs, including, without limitation, the provisions thereof relating to limitations and restrictions on the transfer of SCUs.
IN WITNESS WHEREOF, the Limited Partner has caused this Acceptance to be duly executed and delivered as of the date first written above.
[Insert Name of Limited Partner]
By:_________________________________ Name:
Acknowledged and accepted:
CBL & Associates Limited Partnership
By: CBL Holdings I, Inc.,
General Partner
By:___________________________
Name:
Title:
Attachment 3
EXHIBIT C
Allocations
1. Allocations of Gross Income, Net Income and Net Loss.
(a) Except as otherwise provided herein, in each tax year in which there is sufficient Gross Income and Net Income to make all of the allocations described in clauses (i) through (iii) below, Gross Income, Net Income and Net Loss of the Partnership for such tax year shall be allocated among the Partners in the following order and priority:
(i) First, Net Income shall be allocated to the relevant Partner, on account of the Preferred Units, in an amount equal to the excess of (A) the amount of Net Cash Flow distributed to such Partner pursuant to Sections 6.2(a)(i) and (ii) and Section 6.2(c) (but only to the extent of the Preferred Distribution Requirement and Preferred Distribution Shortfalls) for the current and all prior Partnership tax years over (B) the amount of Net Income previously allocated to such Partner pursuant to this paragraph (a)(i) or pursuant to paragraph (b)(i);
(ii) Second, for any Partnership tax year ending on or after a date on which Preferred Units are redeemed, Net Income (or Net Losses) shall be allocated to the relevant Partner, on account of the Preferred Units, in an amount equal to the excess (or deficit) of the sum of the applicable Preferred Redemption Amounts for the Preferred Units that have been or are being redeemed during such Partnership tax year over the Preferred Unit Issue Price of such Preferred Units;
(iii) Third, Gross Income shall be allocated to the relevant
Partner, on account of SCUs or Common Units received on a conversion or
redemption of SCUs in an amount equal to the amount of cash distributed
to such Partner in respect of such SCUs or Common Units pursuant to
Sections 6.2(a)(iii), (iv) and (v) (the "Target Amount"). The character
of the items of Gross Income allocated to the relevant Partners
pursuant to this clause (iii) shall proportionately reflect the
relative amounts of the Partnership's Gross Income having such
character for such year, excluding from such Gross Income Net Capital
Gain allocated pursuant to Section 1(c) below; provided, however, that
such items shall not include items described in section (e) of the
definition of Net Income or Net Loss, it being the intention of the
parties that the tax items allocated under Section 3(a) corresponding
to the items of Gross Income allocated pursuant to this Section
1(a)(iii) will equal the Target Amount. If the amount of such items
differs from the Target Amount, the items of Gross Income allocated
pursuant to this Section 1(a)(iii) shall be adjusted to cause the
amount of such tax items to equal the Target Amount. For purposes of
determining the amount of cash distributed to such Partners, Special
Tax Distributions shall not be taken into account, and Extraordinary
Return of Capital Distributions shall be taken into account only to the
extent that the amount of such Extraordinary Return of Capital
Distributions exceed the aggregate of the Excess Allocations made to
such Partners. For this purpose, "Excess Allocations" mean the excess
of the Tax Net Capital Gain allocated under Section 3(a) to holders of
SCUs and holders of Common Units received on a conversion or redemption
of SCUs in connection with allocations of Net Capital Gain under
Section 1(c) over the Special Tax Distribution made to such Partners. A
distribution shall be treated as an Extraordinary Return of Capital
Distribution to the extent that such distribution is reasonably
attributable to (x) Net Financing Proceeds or (y) proceeds allocable to
a transaction generating Net Capital Gain allocated pursuant to Section
1(c); in either case limited to the excess of the Tax Net Capital Gain
allocated under Section 3(a) to holders of SCUs and holders of Common
Units received on a conversion or redemption of SCUs in connection with
allocations of Net Capital Gain under Section 1(c) over the Special Tax
Distributions made to such Partners.
(iv) Fourth, any remaining Net Income and Net Losses, taking into account in determining such Net Income or Net Losses the allocation of Gross Income provided for in paragraph (a)(iii) above, shall be allocated among the Partners, on account of their Common Units other than Common Units received on a conversion or redemption of SCUs, in accordance with their proportionate ownership of Common Units other than Common Units received on a conversion or redemption of SCUs (except as otherwise required by the Regulations).
(b) Except as otherwise provided herein, in each tax year in which there is not sufficient Gross Income and Net Income to make all of the allocations described in clauses (a)(i) through (a)(iii) above, Gross Income, Net Income and Net Loss of the Partnership for such tax year shall be allocated among the Partners in the following order and priority:
(i) First, Net Income shall be allocated to the relevant
Partner, on account of the Preferred Units, in an amount equal to the
excess of (A) the amount of Net Cash Flow distributed to such Partner
pursuant to Sections 6.2(a)(i) and (ii) and Section 6.2(c) (but only to
the extent of the Preferred Distribution Requirement and Preferred
Distribution Shortfalls) for the current and all prior Partnership tax
years over (B) the amount of Net Income previously allocated to such
Partner pursuant to this paragraph (b)(i) or pursuant to paragraph
(a)(i)
(ii) Second, for any Partnership tax year ending on or after a date on which Preferred Units are redeemed, Net Income (or Net Losses) shall be allocated to the relevant Partner, on account of the Preferred Units, in an amount equal to the excess (or deficit) of the sum of the applicable Preferred Redemption Amounts for the Preferred Units that have been or are being redeemed during such Partnership tax year over the Preferred Unit Issue Price of such Preferred Units;
(iii) Third, Gross Income, to the extent not previously taken
into account in making the allocations required under paragraph (a)(i)
and (a)(ii), shall be allocated to the relevant Partner, on account of
SCUs or Common Units received on a conversion or redemption of SCUs in
an amount equal to the amount of cash distributed to such Partner in
respect of such SCUs or Common Units pursuant to Sections 6.2(a)(iii),
(iv) and (v) (the "Target Amount"). The character of the items of Gross
Income allocated to the relevant Partners pursuant to this clause (iii)
shall proportionately reflect the relative amounts of the Partnership's
Gross Income having such character for such year, excluding from such
Gross Income Net Capital Gain allocated pursuant to Section 1(c) below;
provided, however, that such items shall not include items described in
section (e) of the definition of Net Income or Net Loss, it being the
intention of the parties that the tax items allocated under Section
3(a) corresponding to the items of Gross Income allocated pursuant to
this Section 1(b)(iii) will equal the Target Amount. If the amount of
such items differs from the Target Amount, the items of Gross Income
allocated pursuant to this Section 1(b)(iii) shall be adjusted to cause
the amount of such tax items to equal the Target Amount. For purposes
of determining the amount of cash distributed to such Partners, Special
Tax Distributions shall not be taken into account, and Extraordinary
Return of Capital Distributions shall be taken into account only to the
extent that the amount of such Extraordinary Return of Capital
Distributions exceed the aggregate of the Excess Allocations made to
such Partners. For this purpose, "Excess Allocations" mean the excess
of the Tax Net Capital Gain allocated under Section 3(a) to holders of
SCUs and holders of Common Units received on a conversion or redemption
of SCUs in connection with allocations of Net Capital Gain under
Section 1(c) over the Special Tax Distribution made to such Partners. A
distribution shall be treated as an Extraordinary Return of Capital
Distribution to the extent that such distribution is reasonably
attributable to (x) Net Financing Proceeds or (y) proceeds allocable to
a transaction generating Net Capital Gain allocated pursuant to Section
1(c); in either case limited to the excess of the Tax Net Capital Gain
allocated under Section 3(a) to holders of SCUs and holders of Common
Units received on a conversion or redemption of SCUs in connection with
allocations of Net Capital Gain under Section 1(c) over the Special Tax
Distributions made to such Partners.
(iv) Fourth, any remaining Net Income and Net Losses, taking into account in determining such Net Income or Net Losses the allocation of Gross Income provided for in paragraph (b)(iii) above, shall be allocated among the Partners, on account of their Common Units other than Common Units received on a conversion or redemption of SCUs, in accordance with their proportionate ownership of Common Units other than Common Units received on a conversion or redemption of SCUs (except as otherwise required by the Regulations).
(c) Notwithstanding clauses (a)(iii) and (a)(iv), and clauses
(b)(iii) and (b)(iv), above, holders of SCUs and holders of Common Units
received upon a conversion or redemption of SCUs may be allocated their
proportionate share of Net Capital Gain recognized by the Partnership in a
taxable year (in accordance with their proportionate ownership of the aggregate
number of SCUs and Common Units, counting each SCU as the number of Common Units
into which it is convertible in accordance with Exhibit E), in addition to the
amount specified in clause (a)(iii) above and clause (b)(iii) above, if each of
the following requirements is satisfied:
(i) the Partnership shall have distributed to each holder of SCUs in cash pursuant to Section 6.2(a)(iv) for the last quarter of such taxable year an amount equal to the Basic Distribution Amount (determined without taking into account any Special Tax Distribution);
(ii) during such taxable year, the Partnership has recognized Net Capital Gain in connection with a sale of, condemnation of, or disposition of one or more Properties;
(iii) the Partnership has made or will make prior to January 30, of the following tax year a cash distribution (a "Special Tax Distribution") to the Partners, and the portion of such Special Tax Distribution made to the holders of SCUs and holders of Common Units received upon a conversion or redemption of SCUs equals or exceeds the product of the maximum combined federal, Ohio and Cleveland rates imposed on net capital gains of the applicable holding period (taking into account recapture, if applicable, and the deductibility of state and local taxes) multiplied by the amount of Tax Net Capital Gain allocated under Section 3(a) to holders of SCUs and holders of Common Units received upon a conversion or redemption of SCUs in connection with the allocation under this Section 1(c) of Net Capital Gain to such holders. For these purposes, Tax Net Capital Gain means net capital gain, as determined for federal income tax purposes, which is governed by Section 3(a) and not Section 3(c) hereof. For the avoidance of doubt, no portion of any Special Tax Distribution will be taken into account when determining whether the Partnership has satisfied the distribution requirement of Section 6.2(a)(iii) or 6.2(a)(iv);
(iv) with respect to Special Tax Distributions to be made
within two years of the final Closing provided for in the Master Contribution
Agreement, the Special Tax Distribution will not cause the aggregate
distributions to a holder of SCUs or a holder of Common Units received on a
conversion or redemption of SCUs, other than distributions to such holder in
respect of the Basic Distribution Amount, to exceed the product of (x) the
lesser of such holder's percentage interest in Partnership profits for the year
in which the Special Tax Distribution is made or such holder's percentage
interest in Partnership profits for the life of the Partnership (as determined
for purposes of Treasury Regulations Section 1.707-4(b)) and (y) the
Partnership's net cash flow from operations for the year in which the Special
Tax Distribution is made (as determined for purposes of Treasury Regulations
Section 1.707-4(b)).
(d) Notwithstanding paragraphs (a), (b) and (c), Net Income and Net Losses from a Liquidation Transaction shall be allocated as follows:
(i) First, Net Income (or Net Losses) from the Liquidation Transaction shall be allocated to the relevant Partner, in connection with the Preferred Units, in an amount equal to the excess (or deficit) of the sum of the applicable Preferred Redemption Amounts of the Preferred Units which have been or will be redeemed with the proceeds of the Liquidation Transaction over the Preferred Unit Issue Price of such Preferred Units;
(ii) Second, Net Income (or Net Losses) from the Liquidation Transaction shall be allocated among the Partners owning SCUs or Common Units so that the Capital Accounts of the Partners (excluding from the Capital Account of any Partner the amount attributable to such Partner's Preferred Units) are proportional to the number of Common Units held by each Partner. For purposes of this clause (ii), each SCU shall be treated as the number of Common Units into which the SCU is convertible pursuant to the terms of Exhibit E to the Agreement.
(iii) Third, any remaining Net Income or Net Losses from the Liquidation Transaction shall be allocated among the Partners owning SCUs or Common Units in accordance with their proportionate ownership of Common Units. For purposes of this clause (iii), each SCU shall be treated as the number of Common Units into which the SCU is convertible pursuant to the terms of Exhibit E to the Agreement.
2. Special Allocations.
Notwithstanding any provisions of paragraph 1 of this Exhibit C, the following special allocations shall be made in the following order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a net decrease in Partnership Minimum Gain for any Partnership fiscal year (except as a result of conversion or refinancing of Partnership indebtedness, certain capital contributions or revaluation of the Partnership property as further outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3) , each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner's share of the net decrease in Partnership Minimum Gain. The items to be so allocated shall be determined in accordance with Regulation Section 1.704-2(f). This paragraph (a) is intended to comply with the minimum gain chargeback requirement in said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this paragraph (a) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto.
(b) Minimum Gain Attributable to Partner Nonrecourse Debt. If there is a net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt during any fiscal year (other than due to the conversion, refinancing or other change in the debt instrument causing it to become partially or wholly nonrecourse, certain capital contributions, or certain revaluations of Partnership property as further outlined in Regulation Section 1.704-2(i)(4), each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner's share of the net decrease in the Minimum Gain Attributable to Partner Nonrecourse Debt. The items to be so allocated shall be determined in accordance with Regulation Sections 1.704-2(i)(4) and (j)(2). This paragraph (b) is intended to comply with the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said sections of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this paragraph (b) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto.
(c) Qualified Income Offset. In the event a Limited Partner
unexpectedly receives any adjustments, allocations or distributions
described in Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6),
and such Limited Partner has an Adjusted Capital Account Deficit, items
of Partnership income and gain shall be specially allocated to such
Partner in an amount and manner sufficient to eliminate the Adjusted
Capital Account Deficit as quickly as possible. This paragraph (c) is
intended to constitute a "qualified income offset" under Regulation
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year or other applicable period shall be allocated to the Partners in accordance with their proportionate ownership of Common Units other than Common Units issued on a redemption or conversion of SCUs.
(e) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any fiscal year or other applicable period shall be specially allocated to the Partner that bears the economic risk of loss for the debt (i.e., the Partner Nonrecourse Debt) in respect of which such Partner Nonrecourse Deductions are attributable (as determined under Regulation Sections 1.704-2(b)(4) and (i)(1).
(f) Curative Allocations. The Regulatory Allocations (as defined below) shall be taken into account in allocating other items of income (including Gross Income), gain, loss, and deduction among the Partners so that, to the extent possible, the cumulative net amount of allocations of Partnership Items under paragraphs 1 and 2 of this Exhibit C shall be equal to the net amount that would have been allocated to each Partner if the Regulatory Allocations had not occurred. To the extent that there is an allocation under Section 2(a) or (b) hereof of Partnership income or gain to a holder of SCUs or Common Units issued on a redemption or conversion of SCUs, there will be a correspondingly smaller allocation of Gross Income to such holder under Section 1(a)(ii) or 1(b)(ii) hereof. This subparagraph (f) is intended to minimize to the extent possible and to the extent necessary any economic distortions which may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith. For purposes hereof, "Regulatory Allocations" shall mean the allocations provided under this paragraph 2.
3. Tax Allocations.
(a) Generally. Subject to paragraphs (b) and (c) hereof, items of income, gain, loss, deduction and credit to be allocated for income tax purposes (collectively, "Tax Items") shall be allocated among the Partners on the same basis as their respective book items.
(b) Sections 1245/1250 Recapture. If any portion of gain from the sale of property is treated as gain which is ordinary income by virtue of the application of Code Section 1245 or 1250 ("Affected Gain"), then (A) such Affected Gain shall be allocated among the Partners in the same proportion that the depreciation and amortization deductions giving rise to the Affected Gain were allocated and (B) other Tax Items of gain of the same character that would have been recognized, but for the application of Code Section 1245 and/or 1250, shall be allocated away from those Partners who are allocated Affected Gain pursuant to Clause (A) so that, to the extent possible, the other Partners are allocated the same amount, and type, of capital gain that would have been allocated to them had Code Section 1245 and/or 1250 not applied. For purposes hereof, in order to determine the proportionate allocations of depreciation and amortization deductions for each fiscal year or other applicable period, such deductions shall be deemed allocated on the same basis as Net Income and Net Loss for such respective period.
(c) Allocations Respecting Section 704(c) and Revaluations:
Curative Allocations Resulting from the Ceiling Rule.
Notwithstanding paragraph (b) hereof, Tax Items with respect to
Partnership property that is subject to Code Section 704(c) and/or
Regulation Section 1.704-1(b)(2)(iv)(f) (collectively, "Section 704(c)
Tax Items") shall be allocated in accordance with said Code section
and/or Regulation Section 1.704-1(b)(4)(i), as the case may be. The
allocation of Tax Items shall be subject to the ceiling rule stated in
Regulation Section 1.704-1(c) and Regulation Section 1.704-3. The
General Partner will not specially allocate Tax Items (other than the
Section 704(c) Tax Items) to cure for the effect of the ceiling rule,
except that with respect to the properties contributed to the
Partnership (the "Jacobs Properties") pursuant to the Master
Contribution Agreement dated September 25, 2000 among Jacobs Realty
Investors Limited Partnership, CBL & Associates Properties, Inc., CBL &
Associates Limited Partnership and others (as amended, the "Master
Contribution Agreement"), curative allocations of gain recognized on a
disposition of a direct or indirect interest in a Jacobs Property may
be made to the extent permitted in Regulation Section 1.704-3(c). The
Partnership shall allocate items of income, gain, loss and deduction
allocated to it by a Property Partnership to the Partner or Partners
contributing the interest or interests in such Property Partnership, so
that, to the greatest extent possible, such contributing Partner or
Partners are allocated the same amount and character of items of
income, gain, loss and deduction with respect to such Property
Partnership that they would have been allocated had they contributed
undivided interests in the assets owned by such Property Partnership to
the Partnership in lieu of contributing the interest or interests in
the Property Partnership to the Partnership. Notwithstanding the above,
with respect to property contributed to the Partnership after the date
hereof, such Section 704(c) Tax Items may be allocated under such
method selected by the General Partner that is consistent with the
Section 704(c) Regulations.
4. Certain Allocations of Depreciation and Loss.
Notwithstanding anything in this Exhibit C to the contrary, depreciation,
amortization, gain and loss attributable to an adjustment under Section 743 or
Section 734 of the Code of the federal income tax basis of Partnership assets
(including adjustments made prior to or after the contribution of the relevant
assets or indirect interests therein to the Partnership) shall be allocated to
the direct or indirect partner, or such partner's successor or assign, whose
death or acquisition of a direct or indirect interest gave rise to the
adjustments, except to the extent such allocations would not be valid as a
result of a change in tax law occurring after the date of the Master
Contribution Agreement.
Attachment 5
EXHIBIT F
Exchange Rights of Common Units
Issued In Exchange For or Upon Redemption of SCUs
1 At any time, subject to the remainder of this Exhibit F, a holder of Common Units issued in exchange for or upon the redemption of SCUs (such Common Units are referred to herein as "JCUs") shall have the right to exchange all or any portion of such holder's JCUs (the "JCU Offered Units") for JCU Exchange Consideration (as defined below), subject to the limitations contained in Paragraphs 3 and 4 below. Any such JCU Exchange Right shall be exercised pursuant to an exchange notice comparable to the Exchange Notice required under Exhibit D to the Partnership Agreement (such notice, a "JCU Exchange Notice") delivered by the holder exercising the JCU Exchange Right (the "JCU Exercising Holder") to the Company.
2 The exchange consideration (the "JCU Exchange Consideration") payable by the Company to each JCU Exercising Holder shall be equal to the product of (x) the Common Stock Amount with respect to the JCU Offered Units multiplied by (y) the Current Per Share Market Price, each computed as of the date on which the JCU Exchange Notice was delivered to the Company. The JCU Exchange Consideration shall, in the sole and absolute discretion of the Company, be paid in the form of (A) cash, or cashier's or certified check, or by wire transfer of immediately available funds to the JCU Exercising Holder's designated account or (B) subject to the applicable Ownership Limit, by the issuance by the Company of a number of shares of its Common Stock equal to the Common Stock Amount with respect to the JCU Offered Units or (C) subject to the applicable Ownership Limit, any combination of cash and Common Stock (valued at the Current Per Share Market Price).
3 Notwithstanding anything herein to the contrary, any JCU Exchange Right may only be exercised to the extent that, upon exercise of the JCU Exchange Right, assuming payment by the Company of the JCU Exchange Consideration in shares of Common Stock, the JCU Exercising Holder will not, on a cumulative basis, Beneficially Own or Constructively Own shares of Common Stock, including shares of Common Stock to be issued upon exercise of the JCU Exchange Right, in excess of the applicable Ownership Limit. If a JCU Exchange Notice is delivered to the Company but, as a result of the applicable Ownership Limit or as a result of restrictions contained in the certificate of incorporation of the Company, the JCU Exchange Right cannot be exercised in full as aforesaid, the JCU Exchange Notice shall be deemed to be modified to provide that the JCU Exchange Right shall be exercised only to the extent permitted under the applicable Ownership Limit under the certificate of incorporation of the Company, and the JCU Exchange Notice with respect to the remainder of such JCU Exchange Right shall be deemed to have been withdrawn.
4 JCU Exchange Rights may be exercised at any time and from time to time, provided, however, that, except as set forth below in Paragraph 6 or with the prior written consent of the General Partner, (x) only two (2) JCU Exchange Notices may be delivered to the Company by each holder of JCUs during any consecutive twelve (12) month period; and (y) no JCU Exchange Notice may be delivered with respect to JCUs either (i) having a value of less than $250,000 calculated by multiplying the Common Stock Amount with respect to such JCUs by the Current Per Share Market Price or (ii) if a holder does not own JCUs having a value of $250,000 or more, constituting less than all of the JCUs owned by such holder.
5 Within thirty (30) days after receipt by the Company of any JCU Exchange Notice delivered in accordance with the requirements of Paragraph 1 hereof, the Company shall deliver to the JCU Exercising Holder a notice (a "JCU Election Notice"), which JCU Election Notice shall set forth the computation of the JCU Exchange Consideration and shall specify the form of the JCU Exchange Consideration (which shall be in accordance with Paragraph 2 hereof), to be paid by the Company to such JCU Exercising Holder and the date, time and location for
completion of the purchase and sale of the JCU Offered Units, which date shall, to the extent required, in no event be more than (A) in the case of JCU Offered Units with respect to which the Company has elected to pay the JCU Exchange Consideration by issuance of shares of Common Stock, ten (10) days after the delivery by the Company of the JCU Election Notice for the JCU Offered Units or (B) in the case of JCU Offered Units with respect to which the Company has elected to pay the JCU Exchange Consideration in cash, sixty (60) days after the initial date of receipt by the Company of the JCU Exchange Notice for such JCU Offered Units; provided, however, that such sixty (60) day period may be extended for an additional sixty (60) day period to the extent required for the Company to cause additional shares of its Common Stock to be issued to provide financing to be used to acquire the JCU Offered Units. Notwithstanding the foregoing, the Company agrees to use its reasonable efforts to cause the closing of the exchange hereunder to occur as quickly as possible. If the Company has delivered a JCU Election Notice to the JCU Exercising Holder with respect to a JCU Exchange Notice, the JCU Exchange Notice may not be withdrawn or modified by the JCU Exercising Holder without the consent of the General Partner. Similarly, if the Company delivers a JCU Election Notice to a JCU Exercising Holder, the Company may not modify the JCU Election Notice without the consent of the JCU Exercising Holder.
6 Notwithstanding the limitation set forth in clause (x) of
Paragraph 4, in the event that the Company provides notice to the holders of
JCUs, pursuant to Paragraph 8(v) hereof, the JCU Exchange Rights shall be
exercisable by each holder of JCUs at any time that is during the period
commencing on the date on which the Company provides such notice and ending on
the earlier to occur of thirty (30) days from receipt of the Company's aforesaid
notice and the record date, if any, to determine shareholders eligible to
receive such distribution or to vote upon the approval of such merger, sale or
other extraordinary transaction (or, if no such record date is applicable, the
date that is thirty (30) days after the date the Company provides the notice
pursuant to Paragraph 8(v) hereof). In the event that a JCU Exercising Holder
delivers to the Company a JCU Exchange Notice pursuant to this Paragraph 6, the
Company shall be required to deliver a JCU Election Notice before the earlier of
(1) the tenth (10th) Business Day after the Company receives the JCU Exchange
Notice or (2) one (1) Business Day before the record date to determine
shareholders eligible to receive a distribution or vote on approval and such JCU
Election Notice shall, among other things, set the date for the purchase and
sale of the JCU Offered Units, which date shall, to the extent required, in no
event be more than (A) in the case of JCU Offered Units with respect to which
the Company has elected to pay the JCU Exchange Consideration by issuance of
shares of Common Stock, one (1) Business Day prior to the record date, if any,
to determine shareholders eligible to receive such distribution or to vote upon
the approval of such merger, sale or other extraordinary transaction or (B) in
the case of JCU Offered Units with respect to which the Company has elected to
pay the JCU Exchange Consideration in cash, sixty (60) days after the initial
date of receipt by the Company of the JCU Exchange Notice for such JCU Offered
Units; provided, however, that such sixty (60) day period may be extended for an
additional sixty (60) day period to the extent required for the Company to cause
additional shares of its Common Stock to be issued to provide financing to be
used to acquire the JCU Offered Units. Notwithstanding the foregoing, the
Company shall use its reasonable efforts to cause the closing of the exchange
hereunder to occur as quickly as possible.
7 At the closing of the purchase and sale of JCU Offered Units,
payment of the JCU Exchange Consideration shall be accompanied by proper
instruments of transfer and assignment and by the delivery of (i)
representations and warranties of (A) the JCU Exercising Holder with respect to
(x) its due authority to sell all of the right, title and interest in and to
such JCU Offered Units to the Company, (y) the status of the JCU Offered Units
being sold, free and clear of all Liens and (z) its intent to acquire the Common
Stock for investment purposes and not for distribution, and (B) the Company with
respect to due authority for the purchase of such JCU Offered Units, and (ii) to
the extent that any shares of Common Stock are issued in payment of the JCU
Exchange Consideration or any portion thereof, (A) an opinion of counsel for the
Company reasonably satisfactory to the JCU Exercising Holder, to the effect that
(I) such shares of Common Stock have been duly authorized, are validly issued,
fully-paid and non-assessable and (II) that the issuance of such shares will not
violate the applicable Ownership Limit, and (B) a stock certificate or certificates evidencing the shares of Common Stock to be issued and registered in the name of the JCU Exercising Holder or its designee, with an appropriate legend reflecting that such shares or units are not registered under the Securities Act of 1933, as amended, and may not be offered or sold unless registered pursuant to the provisions of such act or an exemption therefrom is available as confirmed by an opinion of counsel satisfactory to the Company.
8 To facilitate the Company's ability to fully perform its obligations hereunder, the Company covenants and agrees, for the benefit of the holders from time to time of JCUs, as follows:
(i) At all times during the pendency of the JCU Exchange Rights, the Company shall reserve for issuance such number of shares of Common Stock as may be necessary to enable the Company to issue such shares in full payment of the JCU Exchange Consideration in regard to all JCUs which are from time to time outstanding.
(ii) As long as the Company shall be obligated to file periodic reports under the Exchange Act, the Company will timely file such reports in such manner as shall enable any recipient of Common Stock issued to holders of JCUs hereunder in reliance upon an exemption from registration under the Securities Act to continue to be eligible to utilize Rule 144 promulgated by the SEC pursuant to the Securities Act, or any successor rule or regulation or statute thereunder, for the resale thereof.
(iii) Each holder of JCUs, upon request, shall be entitled to receive from the Operating Partnership in a timely manner all reports filed by the Company with the SEC and all other communications transmitted from time to time by the Company to its shareholders generally.
(iv) Other than as contemplated under the terms of the Rights Agreement, dated April 30, 1999, as amended from time to time, and any successor agreement thereof, issuances of stock pursuant to the Company's dividend reinvestment plan (as described in the Company's prospectus dated August 15, 1995) or any customary dividend reinvestment plan adopted by the Company after that date and other than the issuance of deferred stock awards or the grant of stock options to officers, directors and employees of the Company, the Company shall not issue or sell any shares of Common Stock or other equity securities or any instrument convertible into any equity security for a consideration less than the fair value of such Common Stock or other equity security, as determined in each case by the Board of Directors of the Company, in consultation with the Company's professional advisors, and under no circumstances shall the Company declare any stock dividend, stock split, stock distribution or the like, unless fair and equitable arrangements are provided, to the extent necessary, to fully adjust, and to avoid any dilution in, the rights of holders of the JCUs under this Exhibit F and the Agreement.
(v) The Company shall notify the holders of JCUs of its intention to make any extraordinary distributions of cash or property to its shareholders or effect a merger (including, without limitation, a triangular merger), a sale of all or substantially all of its assets or any other similar transaction outside of the ordinary course of business at least thirty (30) days prior to the record date, if any, to determine shareholders eligible to receive such distribution or to vote upon the approval of such merger, sale or other transaction (or, if no such record date is applicable, at least thirty (30) days before consummation of such merger, sale or other transaction). This provision for such notice shall not be deemed (i) to permit any transaction that otherwise is prohibited by the Agreement or requires the approval of the holders of JCUs or (ii) to require a vote of the holders of JCUs to a transaction that does not otherwise require such a vote under the Agreement or (iii) to effect the validity of any transaction if such notice is not given. Each holder of JCUs, as a condition to the receipt of the notice pursuant hereto, shall be obligated to keep confidential the information set forth therein until such time as the Company has made public disclosure thereof and to use such information during such period of confidentiality solely for purposes of determining whether or not to exercise its JCU Exchange Rights; provided, however, that a holder of JCUs may disclose such information to its attorney,
accountant and/or financial advisor for purposes of obtaining advice with respect to such exercise so long as such attorney, accountant and/or financial advisor agrees to receive and hold such information subject to this confidentiality requirement.
9 All JCU Offered Units tendered to the Company in accordance with the exercise of JCU Exchange Rights shall be delivered to the Company free and clear of all Liens and should any Liens exist or arise with respect to such Units, the Company shall be under no obligation to acquire the same unless, in connection with such acquisition, the Company has elected to pay such portion of the JCU Exchange Consideration in the form of cash consideration in circumstances where such consideration will be sufficient to cause such existing Lien to be discharged in full upon application of all or a part of such consideration, and the Company is expressly authorized to apply such portion of the JCU Exchange Consideration as may be necessary to satisfy any indebtedness in full and to discharge such Lien in full. In the event any state or local property transfer tax is payable as a result of the transfer of JCU Offered Units to the Company, the transferring holder thereof shall assume and pay such transfer tax.
10 Subject to the restrictions of transfer set forth in the Agreement, the Assignee of any holder of JCUs may exercise the rights of such holder of JCUs pursuant to this Exhibit F, and such holder of JCUs shall be deemed to have assigned such rights to such Assignee and shall be bound by the exercise of such rights by such holder's Assignee. In connection with any exercise of such rights by such Assignee on behalf of such holder, the JCU Exchange Consideration shall be paid by the Company directly to such Assignee and not to such holder.
11 In the event that the Company shall be a party to any transaction (including, without limitation, a merger, consolidation or statutory share exchange with respect to the Common Stock), in each case as a result of which shares of Common Stock are converted into the right to receive shares of capital stock, other securities or other property (including cash or any combination thereof), the JCU Exchange Consideration payable thereafter by the Company pursuant to clauses (B) and (C) of Paragraph 2 in lieu of a share of Common Stock shall be the kind and amount of shares of capital stock and other securities and property (including cash or any combination thereof) that was received upon consummation of such transaction in return for one share of Common Stock; and the Company may not become a party to any such transaction unless the terms thereof are consistent with the foregoing.
12 The provisions of Article XI and Exhibit D of the Agreement shall not apply to the JCUs.
13 Capitalized terms used herein and not otherwise defined have the meanings assigned to them in the Agreement.
Attachment 6
EXHIBIT G
Jacobs Limited Partner Representative
For the following entities:
CB Brookfield Square Mall LLC
CB Cary Towne Center LLC
C.V. Investments
CB Citadel Mall LLC
CB Columbia Mall LLC
CB Eastgate Mall LLC
CB Madison Mall LLC
CB Fashion Square Mall LLC
CB Fayette Mall LLC
CB Hanes Mall LLC
CB Jefferson Mall LLC
CB Kentucky Oaks Mall LLC
CB Midland Mall LLC
CB Northwoods Mall LLC
CB Old Hickory Mall LLC
CB Parkdale Mall LLC
CB Randolph Mall LLC
CB Regency Mall LLC
CB Towne Mall LLC
CB Wausau Center LLC
CB Wausau Penney LLC
Exhibit 10.2.2
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
Amendment No. 1, dated as of January 31, 2001 ("Amendment No. 1"), between CBL & Associates Properties, Inc., a Delaware corporation (the "Company"), and SunTrust Bank, a Georgia corporation, as rights agent (the "Rights Agent").
WHEREAS, the Company and BankBoston, N.A. entered into that certain Rights Agreement, dated as of April 30, 1999 (the "Rights Agreement");
WHEREAS, SunTrust Bank, has succeeded BankBoston, N.A as rights agent under the Rights Agreement;
WHEREAS, as of the date hereof the Distribution Date (as defined in the Rights Agreement) has not occurred;
WHEREAS, the Company has entered into that certain Master Contribution Agreement, dated as September 25, 2000, as amended (the "Master Contribution Agreement"), with CBL & Associates Limited Partnership, a Delaware limited partnership, Jacobs Realty Investors Limited Partnership, a Delaware limited partnership ("JRI"), and the other parties thereto;
WHEREAS, as contemplated under the Master Contribution Agreement, the Company's Amended and Restated Certificate of Incorporation, dated May 2, 1996, as supplemented by the Certificate of Designation, dated June 25, 1998, and the Certificate of Designation, dated April 30, 1999, has been further amended pursuant to a Certificate of Amendment, filed with the Secretary of State of the State of Delaware on the date hereof (such Certificate of Incorporation, as so supplemented and amended, the "Current Certificate of Incorporation"), a copy of which amendment is attached hereto as Exhibit A;
WHEREAS, the Company has entered into that certain Share Ownership Agreement, dated as of the date hereof (the "Share Ownership Agreement"), with JRI and the other parties thereto, a copy of which Agreement is attached hereto as Exhibit B; and
WHEREAS, in connection with the principal closing of the transaction
contemplated under the Master Contribution Agreement, and as required under
Section 4.10 of the Master Contribution Agreement, the Company desires to amend
the Rights Agreement in accordance with Section 27 thereof, as further provided
herein;
NOW, THEREFORE, in consideration of the premises and mutual agreements set forth in the Rights Agreement and this Amendment No. 1, the parties hereby agree as follows:
SECTION 1. Amendment to Definition of "Acquiring Person". The first sentence of Section 1(a) of the Rights Agreement is hereby deleted and replaced in its entirety with the following:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company, (iv) any Person or entity
holding shares of Common Stock for or pursuant to the terms of any
such plan to the extent, and only to the extent, of such shares so
held, (v) any member of the Lebovitz Group or (vi) the Jacobs Group or
any of its members provided that such Person does not Beneficially Own
or Constructively Own Equity Stock ("Beneficially Own",
"Constructively Own" and "Equity Stock", for purposes of this clause
(vi) only, as defined in the Current Certificate of Incorporation) in
excess of the Jacobs Permitted Ownership Amount.
SECTION 2. Amendment to Definition of "Distribution Date".
Section 1(k) of the Rights Agreement is hereby deleted and replaced in its
entirety with the following:
(k) "Distribution Date" shall mean the earlier of (i) the Close of Business on the tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock Acquisition Date occurs before the Record Date, the Close of Business on the Record Date), or (ii) the Close of Business on the tenth Business Day (or, if such tenth Business Day occurs before the Record Date, the Close of Business on the Record Date), or such specified or unspecified later date on or after the Record Date as may be determined by action of the Board prior to such time as any Person becomes an Acquiring Person, after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company or any employee benefit plan of the Company or of any Subsidiary of the Company or any Person or entity holding shares of Common Stock for or pursuant to the terms of any such plan or any member of the Lebovitz Group) is first published or sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if (a) with respect to any Person other than the Jacobs Group or any of its members, upon consummation thereof, such Person would be the Beneficial Owner of 15% or more of the outstanding shares of Common Stock and (b) with respect to the Jacobs Group or any of its members, upon consummation thereof, such Person would Beneficially Own or Constructively Own Equity Stock ("Beneficially Own", "Constructively Own" and "Equity Stock", for purposes of this clause (b) only, as defined in the Current Certificate of Incorporation) in excess of the Jacobs Permitted Ownership Amount.
SECTION 3. Amendment of Section 1 to Add Certain Definitions.
Section 1 is hereby amended to add the following definitions:
"Jacobs Family Member" shall mean each of Richard E. Jacobs, any spouse or lineal descendant of Richard E. Jacobs or David H. Jacobs, and any spouse or lineal descendant of any of the foregoing.
"Jacobs Group" shall have the meaning set forth in the Current Certificate of Incorporation, except that the term "Jacobs Group" shall not be deemed to include any entity unless (i) at least 51% of the economic interests in such entity are beneficially owned (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act) by one or more Jacobs Family Members; and (ii) such entity is controlled exclusively by one or more Jacobs Family Members, provided however, that each of the Richard E. Jacobs Revocable Living Trust and the David H. Jacobs Marital Trust shall be deemed to be a member of the Jacobs Group so long as it satisfies the conditions of clause (i) above regardless of how it is controlled.
"Jacobs Permitted Ownership Amount" shall have the meaning set forth in the Share Ownership Agreement.
SECTION 4. Rights Agreement as Amended. The term "Agreement" as used in the Rights Agreement shall be deemed to refer to the Rights Agreement as amended hereby and shall be deemed to include the additional terms defined in this Amendment No. 1. The foregoing amendments shall be effective as of the date hereof and, except as set forth herein, the Rights Agreement shall remain in full force and effect and shall be otherwise unaffected hereby.
SECTION 5. Acknowledgment. The Company hereby acknowledges its existing obligations under Section 4.10 of the Master Contribution Agreement with respect to any further amendments to the Rights Agreement as amended hereby.
SECTION 6. Counterparts. This Amendment No. 1 may be executed in any number of counterparts, and each of such counterparts shall for all purposes be deemed an original and all such counterparts shall together constitute but one and same instrument.
SECTION 7. Governing Law. This Amendment No. 1 shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State.
SECTION 8. Descriptive Headings. Descriptive headings of this Amendment No. 1 are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to Rights Agreement to be duly executed as of the day and year first above written.
CBL & ASSOCIATES PROPERTIES, INC.
By:_ /s/ John N. Foy ___________________
-----------------
Name: John N. Foy
Title:Vice Chairman and Chief Financial
Officer
|
SUNTRUST BANK,
as Rights Agent
By:__/s/ Sandra Benefield ___________
---------------------
Name: Sandra Benefield
Title: Assistant Vice President
|
Exhibit 21 CBL & Associates Properties, Inc. - 2001 Form 10K
SUBSIDIARIES OF THE COMPANY Exhibit 21
STATE OF
INCORPORATION OR
SUBSIDIARY FORMATION
----------------------------------------------------- ------------------
Albemarle Partners Limited Partnership North Carolina
APWM, LLC Georgia
Arbor Place GP, Inc. Georgia
Arbor Place Limited Partnership Georgia
Asheville, LLC North Carolina
BJ/Portland Limited Partnership Maine
Bonita Lakes Mall Limited Partnership Mississippi
Brookfield Square Joint Venture Ohio
Bursnville Minnesota, LLC Minnesota
Cadillac Associates Limited Partnership Tennessee
Capital Crossing Limited Partnership North Carolina
Cary Limited Partnership North Carolina
Cary Venture Limited Partnership Delaware
CBL & Associates Limited Partnership Delaware
CBL & Associates Management, Inc. Delaware
CBL Holdings I, Inc. Delaware
CBL Holdings II, Inc. Delaware
CBL Morristown, LTD. Tennessee
CBL Terrace Limited Partnership Tennessee
CBL/34th Street St. Petersburg Limited Partnership Florida
CBL/Bartow Limited Partnership Florida
CBL/BFW Kiosks, LLC Delaware
CBL/Brookfield I, LLC Delaware
CBL/Brookfield II, LLC Delaware
CBL/Brushy Creek Limited Partnership Florida
CBL/Buena Vista Limited Partnership Georgia
CBL/Cary I, LLC Delaware
CBL/Cary II, LLC Delaware
CBL/Cedar Bluff Crossing Limited Partnership Tennessee
CBL/Cherryvale I, LLC Delaware
CBL/Citadel I, LLC Delaware
CBL/Citadel II, LLC Delaware
CBL/Columbia I, LLC Delaware
CBL/Columbia II, LLC Delaware
CBL/Eastgate I, LLC Delaware
CBL/Eastgate II, LLC Delaware
CBL/Fayette I, LLC Delaware
CBL/Fayette II, LLC Delaware
CBL/Foothills Plaza Partnership Tennessee
CBL/GP Cary, Inc. North Carolina
CBL/GP I, Inc. Tennessee
CBL/GP II, Inc. Wyoming
|
CBL & Associates Properties, Inc. - 2001 Form 10K
SUBSIDIARIES OF THE COMPANY Exhibit 21
CBL/GP III, Inc. Mississippi CBL/GP V, Inc. Tennessee CBL/GP VI, Inc. Tennessee CBL/GP, Inc. Wyoming CBL/Huntsville, LLC Delaware CBL/J I, LLC Delaware CBL/J II, LLC Delaware CBL/Jefferson I, LLC Delaware CBL/Jefferson II, LLC Delaware CBL/Karnes Corner Limited Partnership Tennessee CBL/Kentucky Oaks, LLC Delaware CBL/Low Limited Partnership Wyoming CBL/Madison I, LLC Delaware CBL/Midland I, LLC Delaware CBL/Midland II, LLC Delaware CBL/Nashua Limited Partnership New Hampshire CBL/North Haven, Inc. Connecticut CBL/Northwoods I, LLC Delaware CBL/Northwoods II, LLC Delaware CBL/Old Hickory I, LLC Delaware CBL/Old Hickory II, LLC Delaware CBL/Parkdale, LLC Texas CBL/Perimeter Place Limited Partnership Tennessee CBL/Plant City Limited Partnership Florida CBL/Plantation Plaza, L.P. Virginia CBL/Rawlinson Place Limited Partnership Tennessee CBL/Regency I, LLC Delaware CBL/Regency II, LLC Delaware CBL/Springs Crossing Limited Partnership Tennessee CBL/Stroud, Inc. Pennsylvania CBL/Suburban, Inc. Tennessee CBL/Tampa Keystone Limited Partnership Florida CBL/Towne Mall I, LLC Delaware CBL/Towne Mall II, LLC Delaware CBL/Uvalde, Ltd. Texas CBL/Wausau I, LLC Delaware CBL/Wausau II, LLC Delaware CBL/Wausau III, LLC Delaware CBL/Wausau IV, LLC Delaware CBL/Weston I, LLC Delaware CBL/Weston II, LLC Delaware CBL/York, Inc. Pennsylvania Charleston Joint Venture Ohio Chester Square Limited Partnership Virginia |
CBL & Associates Properties, Inc. - 2001 Form 10K
SUBSIDIARIES OF THE COMPANY Exhibit 21
Chesterfield Crossing, LLC Virginia Coastal Way, L.C. Florida Cobblestone Village at St. Augustine, LLC Florida College Station Partners, Ltd. Texas Columbia Joint Venture Ohio Coolsprings Crossing Limited Partnership Tennessee Cortlandt Town Center Limited Partnership New York Cortlandt Town Center, Inc. New York Cosby Station Limited Partnership Georgia Courtyard at Hickory Hollow Limited Partnership Delaware Creekwood Gateway, LLC Florida Crossville Associates Limited Partnership Tennessee CV at North Columbus, LLC Georgia Development Options, Inc. Wyoming Development Options/Cobblestone, LLC Florida East Ridge Partners, L.P. Tennessee East Towne Crossing Limited Partnership Tennessee Eastgate Company Ohio Eastridge, LLC North Carolina ERMC II, L.P. Tennessee ERMC III, L.P. Tennessee ERMC IV, LP Tennessee ERMC V, L.P. Tennessee Fifty-Eight Partners, L.P. Tennessee Foothills Mall Associates, LP Tennessee Foothills Mall, Inc. Tennessee Frontier Mall Associates Limited Partnership Wyoming Georgia Square Associates, Ltd. Georgia Georgia Square Partnership Georgia Governor's Square Company IB Ohio Governor's Square Company Ohio Gunbarrel Commons, LLC Tennessee Henderson Square Limited Partnership North Carolina Hickory Hollow Courtyard, Inc. Delaware Hickory Hollow Mall Limited Partnership Delaware Hickory Hollow Mall, Inc. Delaware High Point Development Limited Partnership North Carolina High Point Development Limited Partnership II North Carolina Houston Willowbrook LLC Texas Hudson Plaza Limited Partnership New York Janesville Mall Limited Partnership Wisconsin Janesville Wisconsin, Inc. Wisconsin Jarnigan Road Limited Partnership Tennessee JC Randolph, LLC Ohio |
CBL & Associates Properties, Inc. - 2001 Form 10K
SUBSIDIARIES OF THE COMPANY Exhibit 21
Jefferson Mall Company Ohio JG Saginaw, LLC Ohio JG Winston-Salem, LLC Ohio Kentucky Oaks Mall Company Ohio Kingston Overlook Limited Partnership Tennessee LaGrange Commons Limited Partnership New York Lakeshore Gainesville Limited Partnership Georgia Lakeshore/Sebring Limited Partnership Florida Leaseco, Inc. New York Lebcon Associates Tennessee Lebcon I, Ltd. Tennessee Lee Partners Tennessee Lexington Joint Venture Ohio Lion's Head Limited Partnership Tennessee Longview Associates Limited Partnership North Carolina Lunenburg Crossing Limited Partnership Massachusetts Madison Joint Venture Ohio Madison Plaza Associates, Ltd. Alabama Madison Square Associates, Ltd. Alabama Mall Shopping Center Company, L.P. Texas Maryville Department Stores Associates Tennessee Maryville Partners, L.P. Tennessee Massard Crossing Limited Partnership Arkansas Meridian Mall Company, Inc. Michigan Meridian Mall Limited Partnership Michigan Midland Joint Venture Michigan Montgomery Partners, L.P. Tennessee Mortgage Holdings, LLC Delaware NewLease Corp. Tennessee North Charleston Joint Venture Ohio North Haven Crossing Limited Partnership Connecticut Oak Ridge Associates Limited Partnership Tennessee Old Hickory Mall Venture Tennessee Park Village Limited Partnership Florida Parkdale Mall Associates Texas Parkway Place Limited Parntership Alabama Parkway Place, Inc. Alabama Post Oak Mall Associates Limited Partnership Texas Property Taxperts, LLC Nevada Racine Joint Venture Ohio RC Jacksonville, LC Florida RC Strawbridge Limited Partnership Virginia Rivergate Mall Limited Partnership Delaware Rivergate Mall, Inc. Delaware |
CBL & Associates Properties, Inc. - 2001 Form 10K
SUBSIDIARIES OF THE COMPANY Exhibit 21
Salem Crossing Limited Partnership Virginia Sand Lake Corners Limited Partnership Florida Sand Lake Corners, LC Florida Scottsboro Associates, Ltd. Alabama Seacoast Shopping Center Limited Partnership New Hampshire Shopping Center Finance Corp. Wyoming Springdale/Mobile GP II, Inc. Alabama Springdale/Mobile GP, Inc. Alabama Springdale/Mobile Limited Partnership Alabama Springdale/Mobile Limited Partnership II Alabama Springhurst Limited Partnership Kentucky St. Clair Square GP, Inc. Illinois St. Clair Square Limited Partnership Illinois Sterling Creek Commons Limited Partnership Virginia Stone East Partners, Ltd. Tennessee Stoney Brook Landing LLC Kentucky Stroud Mall LLC Pennsylvania Suburban Plaza Limited Partnership Tennessee Sutton Plaza GP, Inc. New Jersey Sutton Plaza Limited Partnership New Jersey The Galleria Associates, L.P. Tennessee The Lakes Mall, LLC Michigan The Landing at Arbor Place Limited Partnership Missouri The Marketplace at Mill Creek, LLC Georgia Towne Mall Ohio Turtle Creek Limited Partnership Mississippi Twin Peaks Mall Associates, Ltd. Colorado Valley Crossing Associates Limited Partnership North Carolina Vicksburg Mall Associates, Ltd. Mississippi Village at Rivergate Limited Partnership Delaware Village at Rivergate, Inc. Delaware Walnut Square Associates Limited Partnership Wyoming Wausau Joint Venture Ohio Westgate Crossing Limited Partnership North Carolina Westgate Mall Limited Partnership South Carolina Willowbrook Plaza Limited Partnership Maine (f/k/a Portland/HQ Limited Partnership) York Galleria Limited Partnership Virginia |
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into CBL & Associates Properties, Inc.'s previously filed Registration Statements on Forms S-3 (File Nos. 33-62830, 333-90395 and 333-47041) and Forms S-8 (File Nos. 33-73376, 333-04295 and 333-41768).
ARTHUR ANDERSEN LLP
Chattanooga, Tennessee
March 6, 2002
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Charles B. Lebovitz, John N. Foy and Stephen D. Lebovitz and each of them, with full power to act without the other, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign the Annual Report of CBL & Associates Properties, Inc. on Form 10-K for the fiscal year ended December 31, 2001, including one or more amendments to such Form 10-K, which amendments may make such changes as such person deems appropriate, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary fully to all intents and purposes as he might or could do in person thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power-of-Attorney on the date set opposite his respective name.
Signature Title Date
/s/ Charles B. Lebovitz Chairman of the Board March 6, 2002
------------------------ and Chief
Charles B. Lebovitz Executive Officer
(Principal Executive Officer)
/s/ John N. Foy Vice Chairman of the Board, March 6, 2002
------------------------ Chief Financial Officer and
John N. Foy Treasurer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ Stephen D. Lebovitz Director, President March 6, 2002
------------------------ and Secretary
Stephen D. Lebovitz
/s/ Claude M.Ballard Director March 6, 2002
------------------------
Claude M. Ballard
/s/ Leo Fields Director March 6, 2002
------------------------
Leo Fields
/s/ William J.Poorvu Director March 6, 2002
------------------------
William J. Poorvu
/s/ Winston W. Walker Director March 6, 2002
------------------------
Winston W. Walker
/s/ Gary L. Bryenton Director March 6, 2002
------------------------
Gary L. Bryenton
/s/ Martin J. Cleary Director March 6, 2002
------------------------
Martin J. Cleary
*By: /s/ Charles B. Lebovitz
------------------------
Charles B. Lebovitz Attorney-in-Fact March 6, 2002
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