CBL & ASSOCIATES PROPERTIES INC - FORM 10-Q

Attached files

file	filename
EXCEL - IDEA: XBRL DOCUMENT - CBL & ASSOCIATES PROPERTIES INC	Financial_Report.xls
EX-32.3 - EXHIBIT 32.3 - CBL & ASSOCIATES PROPERTIES INC	exhibit323-6302014.htm
EX-12.1 - EXHIBIT 12.1 - CBL & ASSOCIATES PROPERTIES INC	exhibit-121x6302014.htm
EX-12.2 - EXHIBIT 12.2 - CBL & ASSOCIATES PROPERTIES INC	exhibit-122x6302014.htm
EX-31.2 - EXHIBIT 31.2 - CBL & ASSOCIATES PROPERTIES INC	exhibit-312x6302014.htm
EX-31.1 - EXHIBIT 31.1 - CBL & ASSOCIATES PROPERTIES INC	exhibit-311x6302014.htm
EX-12.4 - EXHIBIT 12.4 - CBL & ASSOCIATES PROPERTIES INC	exhibit-124x6302014.htm
EX-32.1 - EXHIBIT 32.1 - CBL & ASSOCIATES PROPERTIES INC	exhibit-321x6302014.htm
EX-31.4 - EXHIBIT 31.4 - CBL & ASSOCIATES PROPERTIES INC	exhibit-314x6302014.htm
EX-32.2 - EXHIBIT 32.2 - CBL & ASSOCIATES PROPERTIES INC	exhibit322-6x30x2014.htm
EX-12.3 - EXHIBIT 12.3 - CBL & ASSOCIATES PROPERTIES INC	exhibit-123x6302014.htm
EX-32.4 - EXHIBIT 32.4 - CBL & ASSOCIATES PROPERTIES INC	exhibit-324x6302014.htm
EX-31.3 - EXHIBIT 31.3 - CBL & ASSOCIATES PROPERTIES INC	exhibit-313x6302014.htm

Table of Contents

UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

S QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2014

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ____________ TO _______________

COMMISSION FILE NO. 1-12494 (CBL & ASSOCIATES PROPERTIES, INC.)

COMMISSION FILE NO. 333-182515-01 (CBL & ASSOCIATES LIMITED PARTNERSHIP)

______________

CBL & ASSOCIATES PROPERTIES, INC.

CBL & ASSOCIATES LIMITED PARTNERSHIP

(Exact Name of registrant as specified in its charter)

______________



DELAWARE (CBL & ASSOCIATES PROPERTIES, INC.)		62-1545718
DELAWARE (CBL & ASSOCIATES LIMITED PARTNERSHIP)		62-1542285
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

2030 Hamilton Place Blvd., Suite 500, Chattanooga, TN 37421-6000

(Address of principal executive office, including zip code)

423.855.0001

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



CBL & Associates Properties, Inc.	Yes x	No o
CBL & Associates Limited Partnership	Yes x	No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



CBL & Associates Properties, Inc.	Yes x	No o
CBL & Associates Limited Partnership	Yes x	No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



CBL & Associates Properties, Inc.
Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller Reporting Company o
CBL & Associates Limited Partnership
Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



CBL & Associates Properties, Inc.	Yes o	No x
CBL & Associates Limited Partnership	Yes o	No x

As of August 4, 2014, there were 170,262,947 shares of CBL & Associates Properties, Inc.'s common stock, par value $0.01 per share, outstanding.

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended June 30, 2014 of CBL & Associates Properties, Inc. and CBL & Associates Limited Partnership. Unless stated otherwise or the context otherwise requires, references to the "Company" mean CBL & Associates Properties, Inc. and its subsidiaries. References to the "Operating Partnership" mean CBL & Associates Limited Partnership and its subsidiaries. The terms "we," "us" and "our" refer to the Company or the Company and the Operating Partnership collectively, as the context requires.

The Company is a real estate investment trust ("REIT") whose stock is traded on the New York Stock Exchange. The Company is the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc. At June 30, 2014, CBL Holdings I, Inc., the sole general partner of the Operating Partnership, owned a 1.0% general partner interest in the Operating Partnership and CBL Holdings II, Inc. owned an 84.3% limited partner interest for a combined interest held by the Company of 85.3%.

As the sole general partner of the Operating Partnership, the Company's subsidiary, CBL Holdings I, Inc., has exclusive control of the Operating Partnership's activities. Management operates the Company and the Operating Partnership as one business. The management of the Company consists of the same individuals that manage the Operating Partnership. The Company's only material asset is its indirect ownership of partnership interests of the Operating Partnership. As a result, the Company conducts substantially all its business through the Operating Partnership as described in the preceding paragraph. The Company also issues public equity from time to time and guarantees certain debt of the Operating Partnership. The Operating Partnership holds all of the assets and indebtedness of the Company and, through affiliates, retains the ownership interests in the Company's joint ventures. Except for the net proceeds of offerings of equity by the Company, which are contributed to the Operating Partnership in exchange for partnership units on a one-for-one basis, the Operating Partnership generates all remaining capital required by the Company's business through its operations and its incurrence of indebtedness.

We believe that combining the two quarterly reports on Form 10-Q for the Company and the Operating Partnership provides the following benefits:


•	enhances investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner that management views and operates the business;


•	eliminates duplicative disclosure and provides a more streamlined and readable presentation, since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and


•	creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

To help investors understand the differences between the Company and the Operating Partnership, this report provides separate condensed consolidated financial statements for the Company and the Operating Partnership. Noncontrolling interests, shareholders' equity and partners' capital are the main areas of difference between the condensed consolidated financial statements of the Company and those of the Operating Partnership. A single set of notes to condensed consolidated financial statements is presented that includes separate discussions for the Company and the Operating Partnership, when applicable. A combined Management's Discussion and Analysis of Financial Condition and Results of Operations section is also included that presents combined information and discrete information related to each entity, as applicable.

In order to highlight the differences between the Company and the Operating Partnership, this report includes the following sections that provide separate financial information for the Company and the Operating Partnership:


•	condensed consolidated financial statements;


•	certain accompanying notes to condensed consolidated financial statements, including Note 5 - Unconsolidated Affiliates, Redeemable Interests, Noncontrolling Interests and Cost Method Investments; Note 6 - Mortgage and Other Indebtedness; Note 7 - Comprehensive Income; and Note 11 - Earnings Per Share and Earnings Per Unit;


•	controls and procedures in Item 4 of Management's Discussion and Analysis; and


•	certifications of the Chief Executive Officer and Chief Financial Officer included as Exhibits 31.1 through 32.4.

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CBL & Associates Properties, Inc.

CBL & Associates Limited Partnership

Table of Contents



PART I	FINANCIAL INFORMATION	1
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1

CBL & Associates Properties, Inc.
	Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013	1

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013	2

	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013	4

	Condensed Consolidated Statements of Equity for the Six Months Ended June 30, 2014 and 2013	5

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013	7

CBL & Associates Limited Partnership
	Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013	9

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and 2013	10

	Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2014 and 2013	12

	Condensed Consolidated Statements of Capital for the Six Months Ended June 30, 2014 and 2013	13

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013	15

CBL & Associates Properties, Inc. and CBL & Associates Limited Partnership
	Notes to Unaudited Condensed Consolidated Financial Statements	17
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4.	Controls and Procedures	70

PART II	OTHER INFORMATION	71

Item 1.	Legal Proceedings	71
Item 1A.	Risk Factors	71
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
Item 3.	Defaults Upon Senior Securities	71
Item 4.	Mine Safety Disclosures	71
Item 5.	Other Information	71
Item 6.	Exhibits	72

	SIGNATURES	73

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PART I – FINANCIAL INFORMATION

ITEM 1: Financial Statements

CBL & Associates Properties, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)



ASSETS	June 30, 2014			December 31, 2013
Real estate assets:
Land	$	852,963		$	858,619
Buildings and improvements	7,085,523			7,125,512
	7,938,486			7,984,131
Accumulated depreciation	(2,126,434		)	(2,056,357		)
	5,812,052			5,927,774
Developments in progress	185,906			139,383
Net investment in real estate assets	5,997,958			6,067,157
Cash and cash equivalents	63,482			65,500
Receivables:
Tenant, net of allowance for doubtful accounts of $2,380 and $2,379 in 2014 and 2013, respectively	76,468			79,899
Other, net of allowance for doubtful accounts of $1,120 and $1,241 in 2014 and 2013, respectively	22,108			23,343
Mortgage and other notes receivable	40,137			30,424
Investments in unconsolidated affiliates	271,868			277,146
Intangible lease assets and other assets	229,493			242,502
	$	6,701,514		$	6,785,971

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness	$	4,810,811		$	4,857,523
Accounts payable and accrued liabilities	315,298			333,875
Total liabilities	5,126,109			5,191,398
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests	36,540			34,639
Shareholders' equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized:
7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000 shares outstanding	18			18
6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding	7			7
Common stock, $.01 par value, 350,000,000 shares authorized, 170,260,769 and 170,048,144 issued and outstanding in 2014 and 2013, respectively	1,703			1,700
Additional paid-in capital	1,962,103			1,967,644
Accumulated other comprehensive income	9,659			6,325
Dividends in excess of cumulative earnings	(583,405		)	(570,781		)
Total shareholders' equity	1,390,085			1,404,913
Noncontrolling interests	148,780			155,021
Total equity	1,538,865			1,559,934
	$	6,701,514		$	6,785,971

The accompanying notes are an integral part of these condensed consolidated statements.

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CBL & Associates Properties, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
REVENUES:
Minimum rents	$	167,631		$	165,512		$	336,908		$	330,930
Percentage rents	1,824			2,335			5,430			7,051
Other rents	4,613			4,521			9,895			9,665
Tenant reimbursements	70,774			70,666			142,992			142,948
Management, development and leasing fees	2,813			2,850			5,948			5,925
Other	9,278			9,701			17,003			17,548
Total revenues	256,933			255,585			518,176			514,067

OPERATING EXPENSES:
Property operating	35,527			33,663			75,538			72,796
Depreciation and amortization	70,609			68,117			139,692			137,173
Real estate taxes	22,089			21,389			43,436			43,805
Maintenance and repairs	12,623			13,229			28,788			27,419
General and administrative	11,336			12,876			26,109			26,300
Loss on impairment	106			21,038			17,256			21,038
Other	7,390			8,191			13,935			14,847
Total operating expenses	159,680			178,503			344,754			343,378
Income from operations	97,253			77,082			173,422			170,689
Interest and other income	1,544			661			3,072			1,388
Interest expense	(59,277		)	(57,209		)	(119,783		)	(117,033		)
Gain (loss) on extinguishment of debt	—			(9,108		)	42,660			(9,108		)
Gain on sales of real estate assets	1,925			457			3,079			1,000
Gain on investment	—			2,400			—			2,400
Equity in earnings of unconsolidated affiliates	3,418			2,729			7,102			5,348
Income tax provision	(786		)	(757		)	(1,183		)	(583		)
Income from continuing operations	44,077			16,255			108,369			54,101
Operating income (loss) of discontinued operations	(59		)	1,893			(558		)	3,151
Gain on discontinued operations	107			91			90			872
Net income	44,125			18,239			107,901			58,124
Net income attributable to noncontrolling interests in:
Operating Partnership	(4,620		)	(36		)	(12,271		)	(3,527		)
Other consolidated subsidiaries	(1,547		)	(6,479		)	(2,378		)	(12,560		)
Net income attributable to the Company	37,958			11,724			93,252			42,037
Preferred dividends	(11,223		)	(11,223		)	(22,446		)	(22,446		)
Net income attributable to common shareholders	$	26,735		$	501		$	70,806		$	19,591

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CBL & Associates Properties, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) (Continued)

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014			2013
Basic and diluted per share data attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends	$	0.16	$	(0.01	)	$	0.42		$	0.10
Discontinued operations	0.00		0.01			0.00			0.02
Net income attributable to common shareholders	$	0.16	$	0.00		$	0.42		$	0.12
Weighted-average common and potential dilutive common shares outstanding	170,267		166,607			170,232			164,088

Amounts attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends	$	26,694	$	(1,184	)	$	71,205		$	16,181
Discontinued operations	41		1,685			(399		)	3,410
Net income attributable to common shareholders	$	26,735	$	501		$	70,806		$	19,591

Dividends declared per common share	$	0.245	$	0.230		$	0.490		$	0.460

The accompanying notes are an integral part of these condensed consolidated statements.

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CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net income	$	44,125		$	18,239		$	107,901		$	58,124

Other comprehensive income (loss):
Unrealized holding gain (loss) on available-for-sale securities	1,195			(1,015		)	2,196			(252		)
Unrealized gain on hedging instruments	921			443			1,873			163
Reclassification of hedging effect on earnings	(551		)	562			(1,099		)	1,119
Total other comprehensive income (loss)	1,565			(10		)	2,970			1,030

Comprehensive income	45,690			18,229			110,871			59,154
Comprehensive income attributable to noncontrolling interests in:
Operating Partnership	(4,280		)	(21		)	(11,907		)	(3,688		)
Other consolidated subsidiaries	(1,547		)	(6,479		)	(2,378		)	(12,560		)
Comprehensive income attributable to the Company	$	39,863		$	11,729		$	96,586		$	42,906

The accompanying notes are an integral part of these condensed consolidated statements.

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CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Equity

(In thousands, except share data)

(Unaudited)



				Equity
				Shareholders' Equity
	Redeemable Noncontrolling Interests			Preferred Stock		Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income		Dividends in Excess of Cumulative Earnings			Total Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance, January 1, 2013	$	40,248		$	25	$	1,613	$	1,773,630		$	6,986	$	(453,561	)	$	1,328,693		$	192,404		$	1,521,097
Net income	1,996			—		—		—			—		42,037			42,037			3,863			45,900
Other comprehensive income	10			—		—		—			869		—			869			151			1,020
Dividends declared - common stock	—			—		—		—			—		(76,791		)	(76,791		)	—			(76,791		)
Dividends declared - preferred stock	—			—		—		—			—		(22,446		)	(22,446		)	—			(22,446		)
Issuances of 8,632,742 shares of common stock and restricted common stock	—			—		86		209,420			—		—			209,506			—			209,506
Cancellation of 35,865 shares of restricted common stock	—			—		—		(705		)	—		—			(705		)	—			(705		)
Amortization of deferred compensation	—			—		—		1,887			—		—			1,887			—			1,887
Distributions to noncontrolling interests	(3,838		)	—		—		—			—		—			—			(15,368		)	(15,368		)
Adjustment for noncontrolling interests	2,909			—		—		(29,057		)	—		—			(29,057		)	26,148			(2,909		)
Adjustment to record redeemable noncontrolling interests at redemption value	(854		)	—		—		815			—		—			815			39			854
Acquire controlling interest in shopping center property	—			—		—		—			—		—			—			(41,444		)	(41,444		)
Balance, June 30, 2013	$	40,471		$	25	$	1,699	$	1,955,990		$	7,855	$	(510,761	)	$	1,454,808		$	165,793		$	1,620,601

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CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Equity

(In thousands, except share data)

(Unaudited)

(Continued)



				Equity
				Shareholders' Equity
	Redeemable Noncontrolling Interests			Preferred Stock		Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income		Dividends in Excess of Cumulative Earnings			Total Shareholders' Equity			Noncontrolling Interests			Total Equity
Balance, January 1, 2014	$	34,639		$	25	$	1,700	$	1,967,644		$	6,325	$	(570,781	)	$	1,404,913		$	155,021		$	1,559,934
Net income	2,355			—		—		—			—		93,252			93,252			12,294			105,546
Other comprehensive income (loss)	24			—		—		—			3,334		—			3,334			(388		)	2,946
Dividends declared - common stock	—			—		—		—			—		(83,430		)	(83,430		)	—			(83,430		)
Dividends declared - preferred stock	—			—		—		—			—		(22,446		)	(22,446		)	—			(22,446		)
Issuances of 241,188 shares of common stock and restricted common stock	—			—		3		587			—		—			590			—			590
Cancellation of 28,563 shares of restricted common stock	—			—		—		(360		)	—		—			(360		)	—			(360		)
Amortization of deferred compensation	—			—		—		2,115			—		—			2,115			—			2,115
Redemption of Operating Partnership common units	—			—		—		—			—		—			—			(2,914		)	(2,914		)
Distributions to noncontrolling interests	(5,744		)	—		—		—			—		—			—			(17,850		)	(17,850		)
Adjustment for noncontrolling interests	1,482			—		—		(4,347		)	—		—			(4,347		)	2,865			(1,482		)
Adjustment to record redeemable noncontrolling interests at redemption value	3,784			—		—		(3,536		)	—		—			(3,536		)	(248		)	(3,784		)
Balance, June 30, 2014	$	36,540		$	25	$	1,703	$	1,962,103		$	9,659	$	(583,405	)	$	1,390,085		$	148,780		$	1,538,865

The accompanying notes are an integral part of these condensed consolidated statements.

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CBL & Associates Properties, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)

	Six Months Ended June 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	107,901		$	58,124
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	139,692			142,177
Net amortization of deferred finance costs and debt premiums	3,357			2,503
Net amortization of intangible lease assets and liabilities	267			(180		)
Gain on sales of real estate assets	(3,079		)	(1,000		)
Gain on investment	—			(2,400		)
Gain on discontinued operations	(90		)	(872		)
Write-off of development projects	34			1
Share-based compensation expense	2,605			1,887
Loss on impairment	17,256			21,038
Loss on impairment from discontinued operations	681			—
(Gain) loss on extinguishment of debt	(42,660		)	9,108
Equity in earnings of unconsolidated affiliates	(7,102		)	(5,348		)
Distributions of earnings from unconsolidated affiliates	8,965			7,911
Provision for doubtful accounts	1,912			927
Change in deferred tax accounts	316			1,824
Changes in:
Tenant and other receivables	2,274			(5,796		)
Other assets	(1,461		)	5,173
Accounts payable and accrued liabilities	(24,752		)	(45,408		)
Net cash provided by operating activities	206,116			189,669

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate assets	(114,510		)	(147,327		)
Acquisition of real estate assets	—			(26,444		)
(Additions) reductions to restricted cash	3,393			(528		)
Proceeds from sales of real estate assets	10,298			45,039
Additions to mortgage and other notes receivable	—			(2,700		)
Payments received on mortgage and other notes receivable	287			3,699
Proceeds from sales of investments and available-for-sale securities	—			15,877
Additional investments in and advances to unconsolidated affiliates	(8,229		)	(29,079		)
Distributions in excess of equity in earnings of unconsolidated affiliates	14,713			4,239
Changes in other assets	(3,167		)	(11,677		)
Net cash used in investing activities	(97,215		)	(148,901		)

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CBL & Associates Properties, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) (Continued)

	Six Months Ended June 30,
	2014			2013
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage and other indebtedness	$	379,619		$	752,835
Principal payments on mortgage and other indebtedness	(356,918		)	(882,239		)
Additions to deferred financing costs	(113		)	(900		)
Prepayment fees on extinguishment of debt	(1,249		)	(8,708		)
Proceeds from issuances of common stock	82			209,506
Purchase of noncontrolling interest in the Operating Partnership	(2,914		)	—
Distributions to noncontrolling interests	(23,603		)	(29,437		)
Dividends paid to holders of preferred stock	(22,446		)	(22,446		)
Dividends paid to common shareholders	(83,377		)	(73,197		)
Net cash used in financing activities	(110,919		)	(54,586		)

NET CHANGE IN CASH AND CASH EQUIVALENTS	(2,018		)	(13,818		)
CASH AND CASH EQUIVALENTS, beginning of period	65,500			78,248
CASH AND CASH EQUIVALENTS, end of period	$	63,482		$	64,430

SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	$	117,004		$	114,360

The accompanying notes are an integral part of these condensed consolidated statements.

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CBL & Associates Limited Partnership

Condensed Consolidated Balance Sheets

(In thousands, except unit data)

(Unaudited)



ASSETS	June 30, 2014			December 31, 2013
Real estate assets:
Land	$	852,963		$	858,619
Buildings and improvements	7,085,523			7,125,512
	7,938,486			7,984,131
Accumulated depreciation	(2,126,434		)	(2,056,357		)
	5,812,052			5,927,774
Developments in progress	185,906			139,383
Net investment in real estate assets	5,997,958			6,067,157
Cash and cash equivalents	63,461			65,486
Receivables:
Tenant, net of allowance for doubtful accounts of $2,380 and $2,379 in 2014 and 2013, respectively	76,468			79,899
Other, net of allowance for doubtful accounts of $1,120 and $1,241 in 2014 and 2013, respectively	22,108			23,343
Mortgage and other notes receivable	40,137			30,424
Investments in unconsolidated affiliates	272,426			277,701
Intangible lease assets and other assets	229,374			242,383
	$	6,701,932		$	6,786,393


LIABILITIES, REDEEMABLE INTERESTS AND CAPITAL
Mortgage and other indebtedness	$	4,810,811		$	4,857,523
Accounts payable and accrued liabilities	315,283			333,876
Total liabilities	5,126,094			5,191,399
Commitments and contingencies (Note 12)
Redeemable interests:
Redeemable noncontrolling interests	6,136			5,883
Redeemable common units	30,404			28,756
Total redeemable interests	36,540			34,639
Partners' capital:
Preferred units	565,212			565,212
Common units:
General partner	9,636			9,866
Limited partners	939,186			961,175
Accumulated other comprehensive income	7,869			4,923
Total partners' capital	1,521,903			1,541,176
Noncontrolling interests	17,395			19,179
Total capital	1,539,298			1,560,355
	$	6,701,932		$	6,786,393

The accompanying notes are an integral part of these condensed consolidated statements.

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CBL & Associates Limited Partnership Condensed Consolidated Statements of Operations (In thousands, except per unit data) (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
REVENUES:
Minimum rents	$	167,631		$	165,512		$	336,908		$	330,930
Percentage rents	1,824			2,335			5,430			7,051
Other rents	4,613			4,521			9,895			9,665
Tenant reimbursements	70,774			70,666			142,992			142,948
Management, development and leasing fees	2,813			2,850			5,948			5,925
Other	9,278			9,701			17,003			17,548
Total revenues	256,933			255,585			518,176			514,067

OPERATING EXPENSES:
Property operating	35,527			33,663			75,538			72,796
Depreciation and amortization	70,609			68,117			139,692			137,173
Real estate taxes	22,089			21,389			43,436			43,805
Maintenance and repairs	12,623			13,229			28,788			27,419
General and administrative	11,336			12,876			26,109			26,300
Loss on impairment	106			21,038			17,256			21,038
Other	7,390			8,191			13,935			14,847
Total operating expenses	159,680			178,503			344,754			343,378
Income from operations	97,253			77,082			173,422			170,689
Interest and other income	1,544			661			3,072			1,388
Interest expense	(59,277		)	(57,209		)	(119,783		)	(117,033		)
Gain (loss) on extinguishment of debt	—			(9,108		)	42,660			(9,108		)
Gain on sales of real estate assets	1,925			457			3,079			1,000
Gain on investment	—			2,400			—			2,400
Equity in earnings of unconsolidated affiliates	3,418			2,729			7,102			5,348
Income tax provision	(786		)	(757		)	(1,183		)	(583		)
Income from continuing operations	44,077			16,255			108,369			54,101
Operating income (loss) of discontinued operations	(59		)	1,893			(558		)	3,151
Gain on discontinued operations	107			91			90			872
Net income	44,125			18,239			107,901			58,124
Net income attributable to noncontrolling interests	(1,547		)	(6,479		)	(2,378		)	(12,560		)
Net income attributable to the Operating Partnership	42,578			11,760			105,523			45,564
Distributions to preferred unitholders	(11,223		)	(11,223		)	(22,446		)	(22,446		)
Net income attributable to common unitholders	$	31,355		$	537		$	83,077		$	23,118

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CBL & Associates Limited Partnership Condensed Consolidated Statements of Operations (In thousands, except per unit data) (Unaudited) (Continued)

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014			2013

Basic and diluted per unit data attributable to common unitholders:
Income from continuing operations, net of preferred distributions	$	0.16	$	(0.01	)	$	0.42		$	0.10
Discontinued operations	0.00		0.01			0.00			0.02
Net income attributable to common unitholders	$	0.16	$	0.00		$	0.42		$	0.12
Weighted-average common and potential dilutive common units outstanding	199,726		196,153			199,734			193,633

Amounts attributable to common unitholders:
Income (loss) from continuing operations, net of preferred distributions	$	31,314	$	(1,148	)	$	83,476		$	19,708
Discontinued operations	41		1,685			(399		)	3,410
Net income attributable to common unitholders	$	31,355	$	537		$	83,077		$	23,118

Distributions declared per common unit	$	0.253	$	0.239		$	0.506		$	0.478

The accompanying notes are an integral part of these condensed consolidated statements.

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CBL & Associates Limited Partnership

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net income	$	44,125		$	18,239		$	107,901		$	58,124

Other comprehensive income:
Unrealized holding gain (loss) on available-for-sale securities	1,193			(1,015		)	2,196			(252		)
Unrealized gain on hedging instruments	921			443			1,873			163
Reclassification of hedging effect on earnings	(551		)	562			(1,099		)	1,119
Total other comprehensive income (loss)	1,563			(10		)	2,970			1,030

Comprehensive income	45,688			18,229			110,871			59,154
Comprehensive income attributable to noncontrolling interests	(1,547		)	(6,479		)	(2,378		)	(12,560		)
Comprehensive income of the Operating Partnership	$	44,141		$	11,750		$	108,493		$	46,594

The accompanying notes are an integral part of these condensed consolidated statements.

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CBL & Associates Limited Partnership

Condensed Consolidated Statements of Capital

(in thousands)

(Unaudited)



	Redeemable Interests									Number of						Common Units
	Redeemable Noncontrolling Interests			Redeemable Common Units			Total Redeemable Interests			Preferred Units	Common Units		Preferred Units			General Partner			Limited Partners			Accumulated Other Comprehensive Income		Total Partners' Capital			Noncontrolling Interests			Total Capital
Balance, January 1, 2013	$	6,413		$	33,835		$	40,248		25,050	190,855		$	565,212		$	9,904		$	877,363		$	5,685	$	1,458,164		$	63,496		$	1,521,660
Net income	1,809			187			1,996			—	—		22,446			240			22,481			—		45,167			733			45,900
Other comprehensive income	—			10			10			—	—		—			—			—			1,020		1,020			—			1,020
Distributions declared - common units	—			(2,288		)	(2,288		)	—	—		—			(966		)	(90,615		)	—		(91,581		)	—			(91,581		)
Distributions declared - preferred units	—			—			—			—	—		(22,446		)	—						—		(22,446		)	—			(22,446		)
Issuances of common units	—			—			—			—	8,633		—			—			209,506			—		209,506			—			209,506
Cancellation of restricted common stock	—			—			—			—	(36	)	—			—			(705		)	—		(705		)	—			(705		)
Amortization of deferred compensation	—			15			15			—	—		—			20			1,852			—		1,872			—			1,872
Distributions to noncontrolling interests	(1,550		)	—			(1,550		)	—	—		—			—			—			—		—			(1,035		)	(1,035		)
Allocation of partners' capital	—			2,894			2,894			—	—		—			1,709			(4,603		)	—		(2,894		)	—			(2,894		)
Adjustment to record redeemable interests at redemption value	(410		)	(444		)	(854		)	—	—		—			9			845			—		854			—			854
Acquire controlling interest in shopping center properties	—			—			—			—	—		—			—			—			—		—			(41,444		)	(41,444		)
Balance, June 30, 2013	$	6,262		$	34,209		$	40,471		25,050	199,452		$	565,212		$	10,916		$	1,016,124		$	6,705	$	1,598,957		$	21,750		$	1,620,707

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CBL & Associates Limited Partnership

Condensed Consolidated Statements of Capital

(in thousands)

(Unaudited)

(Continued)




	Redeemable Interests								Number of						Common Units
	Redeemable Noncontrolling Interests		Redeemable Common Units			Total Redeemable Interests			Preferred Units	Common Units		Preferred Units			General Partner			Limited Partners			Accumulated Other Comprehensive Income		Total Partners' Capital			Noncontrolling Interests		Total Capital
Balance, January 1, 2014	$	5,883	$	28,756		$	34,639		25,050	199,593		$	565,212		$	9,866		$	961,175		$	4,923	$	1,541,176		$	19,179	$	1,560,355
Net income	1,706		649			2,355			—	—		22,446			846			81,582			—		104,874			672		105,546
Other comprehensive income	—		24			24			—	—		—			—			—			2,946		2,946			—		2,946
Distributions declared - common units	—		(2,286		)	(2,286		)	—	—		—			(986		)	(97,839		)	—		(98,825		)	—		(98,825		)
Distributions declared - preferred units	—		—			—			—	—		(22,446		)	—			—			—		(22,446		)	—		(22,446		)
Issuances of common units	—		—			—			—	242		—			—			590			—		590			—		590
Redemption of common units	—		—			—			—	(171	)	—

CBL & ASSOCIATES PROPERTIES INC - FORM 10-Q - August 11, 2014

Attached files