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EX-31.3 - EXHIBIT 31.3 - CBL & ASSOCIATES PROPERTIES INCexhibit-313x9302014.htm
EX-12.2 - EXHIBIT 12.2 - CBL & ASSOCIATES PROPERTIES INCexhibit-122x9302014.htm
EX-31.2 - EXHIBIT 31.2 - CBL & ASSOCIATES PROPERTIES INCexhibit-312x9302014.htm
EX-12.1 - EXHIBIT 12.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-121x9302014.htm
EX-32.1 - EXHIBIT 32.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-321x9302014.htm
EX-12.4 - EXHIBIT 12.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-124x9302014.htm
EX-12.3 - EXHIBIT 12.3 - CBL & ASSOCIATES PROPERTIES INCexhibit-123x9302014.htm
EX-31.4 - EXHIBIT 31.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-314x9302014.htm
EX-32.4 - EXHIBIT 32.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-324x9302014.htm
EX-10.13.3 - EXHIBIT 10.13.3 - CBL & ASSOCIATES PROPERTIES INCexhibit-10133x09302014.htm
EX-32.3 - EXHIBIT 32.3 - CBL & ASSOCIATES PROPERTIES INCexhibit323-9302014.htm
EXCEL - IDEA: XBRL DOCUMENT - CBL & ASSOCIATES PROPERTIES INCFinancial_Report.xls
EX-31.1 - EXHIBIT 31.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-311x9302014.htm
EX-32.2 - EXHIBIT 32.2 - CBL & ASSOCIATES PROPERTIES INCexhibit322-9x30x2014.htm

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 SEPTEMBER 30, 2014
Or
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 November 5, 2014, there were 170,262,878 shares of CBL & Associates Properties, Inc.'s common stock, par value $0.01 per share, outstanding.




EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended September 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 September 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 Part I of this report; and

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



CBL & Associates Properties, Inc.
CBL & Associates Limited Partnership
Table of Contents
PART I
FINANCIAL INFORMATION
 
 
 
CBL & Associates Properties, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CBL & Associates Limited Partnership
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CBL & Associates Properties, Inc. and CBL & Associates Limited Partnership
 
Management's Discussion and Analysis of Financial Condition and Results of Operations
 
 
 
 
 
 
 
 
 
 



PART I – FINANCIAL INFORMATION

ITEM 1:   Financial Statements

CBL & Associates Properties, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
ASSETS
September 30,
2014
 
December 31,
2013
Real estate assets:
 
 
 
Land
$
848,596

 
$
858,619

Buildings and improvements
7,138,545

 
7,125,512

 
7,987,141

 
7,984,131

Accumulated depreciation
(2,183,912
)
 
(2,056,357
)
 
5,803,229

 
5,927,774

Developments in progress
151,670

 
139,383

Net investment in real estate assets
5,954,899

 
6,067,157

Cash and cash equivalents
45,071

 
65,500

Receivables:
 
 
 
 Tenant, net of allowance for doubtful accounts of $2,412
     and $2,379 in 2014 and 2013, respectively
79,960

 
79,899

 Other, net of allowance for doubtful accounts of $1,158
      and $1,241 in 2014 and 2013, respectively
24,412

 
23,343

Mortgage and other notes receivable
19,513

 
30,424

Investments in unconsolidated affiliates
269,964

 
277,146

Intangible lease assets and other assets
238,892

 
242,502

 
$
6,632,711

 
$
6,785,971

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
 

 
 

Mortgage and other indebtedness
$
4,711,421

 
$
4,857,523

Accounts payable and accrued liabilities
347,382

 
333,875

Total liabilities
5,058,803

 
5,191,398

Commitments and contingencies (Note 12)


 


Redeemable noncontrolling interests
34,843

 
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, 170,260,669 and 170,048,144 issued and
     outstanding in 2014 and 2013, respectively
1,703

 
1,700

Additional paid-in capital
1,962,187

 
1,967,644

Accumulated other comprehensive income
12,805

 
6,325

Dividends in excess of cumulative earnings
(587,000
)
 
(570,781
)
Total shareholders' equity
1,389,720

 
1,404,913

Noncontrolling interests
149,345

 
155,021

Total equity
1,539,065

 
1,559,934

 
$
6,632,711

 
$
6,785,971


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

1


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

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
169,097

 
$
167,703

 
$
506,005

 
$
498,632

Percentage rents
3,060

 
2,797

 
8,490

 
9,847

Other rents
3,813

 
3,837

 
13,708

 
13,503

Tenant reimbursements
71,330

 
70,576

 
214,322

 
213,524

Management, development and leasing fees
3,228

 
3,118

 
9,176

 
9,042

Other
8,186

 
9,518

 
25,189

 
27,067

Total revenues
258,714

 
257,549

 
776,890

 
771,615

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
36,668

 
38,375

 
112,206

 
111,170

Depreciation and amortization
72,488

 
68,941

 
212,180

 
206,115

Real estate taxes
22,202

 
22,607

 
65,638

 
66,411

Maintenance and repairs
12,603

 
13,387

 
41,391

 
40,808

General and administrative
9,474

 
10,160

 
35,583

 
36,459

Loss on impairment
497

 

 
17,753

 
21,038

Other
7,396

 
6,371

 
21,331

 
21,217

Total operating expenses
161,328

 
159,841

 
506,082

 
503,218

Income from operations
97,386

 
97,708

 
270,808

 
268,397

Interest and other income
463

 
8,809

 
3,535

 
10,197

Interest expense
(60,214
)
 
(56,341
)
 
(179,997
)
 
(173,374
)
Gain (loss) on extinguishment of debt
18,282

 

 
60,942

 
(9,108
)
Gain on investment

 

 

 
2,400

Equity in earnings of unconsolidated affiliates
3,936

 
2,270

 
11,038

 
7,618

Income tax provision
(3,083
)
 
(271
)
 
(4,266
)
 
(854
)
Income from continuing operations before gain on sales of real estate assets
56,770

 
52,175

 
162,060

 
105,276

Gain on sales of real estate assets
434

 
58

 
3,513

 
1,058

Income from continuing operations
57,204

 
52,233


165,573


106,334

Operating income (loss) of discontinued operations
78

 
(8,346
)
 
(480
)
 
(5,195
)
Gain on discontinued operations
(2
)
 
290

 
88

 
1,162

Net income
57,280

 
44,177


165,181


102,301

Net income attributable to noncontrolling interests in:
 

 
 

 
 
 
 
Operating Partnership
(6,576
)
 
(4,075
)
 
(18,847
)
 
(7,602
)
Other consolidated subsidiaries
(1,362
)
 
(5,778
)
 
(3,740
)
 
(18,338
)
Net income attributable to the Company
49,342

 
34,324

 
142,594

 
76,361

Preferred dividends
(11,223
)
 
(11,223
)
 
(33,669
)
 
(33,669
)
Net income attributable to common shareholders
$
38,119

 
$
23,101

 
$
108,925

 
$
42,692


2


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

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
Basic and diluted per share data attributable to common shareholders:
 
 

 
 
 
 
Income from continuing operations, net of preferred dividends
$
0.22

 
$
0.18

 
$
0.64

 
$
0.28

Discontinued operations
0.00

 
(0.04
)
 
0.00

 
(0.02
)
Net income attributable to common shareholders
$
0.22

 
$
0.14

 
$
0.64

 
$
0.26

Weighted-average common and potential dilutive common shares outstanding
170,262

 
169,906

 
170,242

 
166,048

 
 
 
 
 
 
 
 
Amounts attributable to common shareholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred dividends
$
38,054

 
$
29,965

 
$
109,259

 
$
46,116

Discontinued operations
65

 
(6,864
)
 
(334
)
 
(3,424
)
Net income attributable to common shareholders
$
38,119

 
$
23,101

 
$
108,925

 
$
42,692

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.245

 
$
0.230

 
$
0.735

 
$
0.690




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


3


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

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
Net income
$
57,280

 
$
44,177

 
$
165,181

 
$
102,301

 
 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized holding gain (loss) on available-for-sale securities
4,044

 
(1,749
)
 
6,240

 
(2,000
)
   Unrealized gain (loss) on hedging instruments
1,148

 
(451
)
 
3,021

 
(289
)
   Reclassification of hedging effect on earnings
(551
)
 
568

 
(1,650
)
 
1,687

Total other comprehensive income (loss)
4,641

 
(1,632
)
 
7,611

 
(602
)
 
 
 
 
 
 
 
 
Comprehensive income
61,921

 
42,545

 
172,792

 
101,699

Comprehensive income attributable to noncontrolling interests in:
 
 
 
 
 
 
 
Operating Partnership
(8,071
)
 
(3,831
)
 
(19,978
)
 
(7,520
)
Other consolidated subsidiaries
(1,362
)
 
(5,778
)
 
(3,740
)
 
(18,338
)
Comprehensive income attributable to the Company
$
52,488

 
$
32,936

 
$
149,074

 
$
75,841


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


4


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
3,182

 

 

 

 

 
76,361

 
76,361

 
8,114

 
84,475

Other comprehensive loss
(4
)
 

 

 

 
(520
)
 

 
(520
)
 
(78
)
 
(598
)
Redemption of redeemable noncontrolling
     preferred joint venture interest

 

 

 
10,000

 

 

 
10,000

 

 
10,000

Dividends declared - common stock

 

 

 

 

 
(115,870
)
 
(115,870
)
 

 
(115,870
)
Dividends declared - preferred stock

 

 

 

 

 
(33,669
)
 
(33,669
)
 

 
(33,669
)
Issuances of 8,635,715 shares of common stock
     and restricted common stock

 

 
86

 
209,445

 

 

 
209,531

 

 
209,531

Cancellation of 39,475 shares of restricted
     common stock

 

 

 
(711
)
 

 

 
(711
)
 

 
(711
)
Amortization of deferred compensation

 

 

 
2,287

 

 

 
2,287

 

 
2,287

Distributions to noncontrolling interests
(4,980
)
 

 

 

 

 

 

 
(22,889
)
 
(22,889
)
Adjustment for noncontrolling interests
3,803

 

 

 
(32,135
)
 

 

 
(32,135
)
 
28,388

 
(3,747
)
Adjustment to record redeemable
     noncontrolling interests at redemption value
(5,079
)
 

 

 
4,551

 

 

 
4,551

 
528

 
5,079

Acquire controlling interest in shopping center property

 

 

 

 

 

 

 
(41,444
)
 
(41,444
)
Balance, September 30, 2013
$
37,170

 
$
25

 
$
1,699

 
$
1,967,067

 
$
6,466

 
$
(526,739
)
 
$
1,448,518

 
$
165,023

 
$
1,613,541





5


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
3,323

 

 

 

 

 
142,594

 
142,594

 
19,264

 
161,858

Other comprehensive income
60

 

 

 

 
6,480

 

 
6,480

 
1,071

 
7,551

Dividends declared - common stock

 

 

 

 

 
(125,144
)
 
(125,144
)
 

 
(125,144
)
Dividends declared - preferred stock

 

 

 

 

 
(33,669
)
 
(33,669
)
 

 
(33,669
)
Issuances of 243,648 shares of common stock
     and restricted common stock

 

 
3

 
636

 

 

 
639

 

 
639

Cancellation of 31,123 shares of restricted
     common stock

 

 

 
(369
)
 

 

 
(369
)
 

 
(369
)
Amortization of deferred compensation

 

 

 
2,837

 

 

 
2,837

 

 
2,837

Redemptions of Operating Partnership common units

 

 

 

 

 

 

 
(4,609
)
 
(4,609
)
Contributions from noncontrolling interests

 

 

 

 

 

 

 
938

 
938

Distributions to noncontrolling interests
(7,083
)
 

 

 

 

 

 

 
(26,997
)
 
(26,997
)
Adjustment for noncontrolling interests
2,193

 

 

 
(6,865
)
 

 

 
(6,865
)
 
4,672

 
(2,193
)
Adjustment to record redeemable
     noncontrolling interests at redemption value
1,711

 

 

 
(1,696
)
 

 

 
(1,696
)
 
(15
)
 
(1,711
)
Balance, September 30, 2014
$
34,843

 
$
25

 
$
1,703

 
$
1,962,187

 
$
12,805

 
$
(587,000
)
 
$
1,389,720

 
$
149,345

 
$
1,539,065


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


6



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

 
Nine Months Ended
September 30,
 
2014
 
2013
CASH FLOWS FROM OPERATING ACTIVITIES:
 

 
 
Net income
$
165,181

 
$
102,301

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 

Depreciation and amortization
212,180

 
212,752

Net amortization of deferred finance costs and debt premiums
4,557

 
3,651

Net amortization of intangible lease assets and liabilities
535

 
(111
)
Gain on sales of real estate assets
(3,513
)
 
(1,058
)
Gain on investment

 
(2,400
)
Gain on discontinued operations
(88
)
 
(1,162
)
Write-off of development projects
81

 
141

Share-based compensation expense
3,318

 
2,308

Loss on impairment
17,753

 
21,038

Loss on impairment from discontinued operations
681

 
5,234

(Gain) loss on extinguishment of debt
(60,942
)
 
9,108

Equity in earnings of unconsolidated affiliates
(11,038
)
 
(7,618
)
Distributions of earnings from unconsolidated affiliates
14,563

 
11,225

Provision for doubtful accounts
2,684

 
1,459

Change in deferred tax accounts
1,241

 
1,666

Changes in:
 

 
 

Tenant and other receivables
(4,629
)
 
(7,430
)
Other assets
(5,637
)
 
754

Accounts payable and accrued liabilities
(7,593
)
 
(15,821
)
Net cash provided by operating activities
329,334

 
336,037

 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Additions to real estate assets
(195,418
)
 
(233,202
)
Acquisition of real estate assets

 
(26,444
)
Additions to restricted cash
(362
)
 
(2,909
)
Proceeds from sales of real estate assets
15,865

 
219,800

Additions to mortgage and other notes receivable

 
(2,700
)
Payments received on mortgage and other notes receivable
20,911

 
3,743

Proceeds from sales of investments and available-for-sale securities

 
15,877

Additional investments in and advances to unconsolidated affiliates
(12,541
)
 
(31,969
)
Distributions in excess of equity in earnings of unconsolidated affiliates
34,695

 
8,706

Changes in other assets
(6,563
)
 
(14,295
)
Net cash used in investing activities
(143,413
)
 
(63,393
)

7


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

 
Nine Months Ended
September 30,
 
2014
 
2013
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from mortgage and other indebtedness
$
429,596

 
$
1,696,913

Principal payments on mortgage and other indebtedness
(437,092
)
 
(1,568,874
)
Additions to deferred financing costs
(233
)
 
(3,173
)
Prepayment fees on extinguishment of debt
(1,249
)
 
(8,708
)
Proceeds from issuances of common stock
131

 
209,510

Purchase of noncontrolling interest in the Operating Partnership
(4,609
)
 

Redemption of redeemable noncontrolling preferred joint venture interest

 
(408,577
)
Contributions from noncontrolling interests
11

 

Distributions to noncontrolling interests
(34,145
)
 
(47,450
)
Dividends paid to holders of preferred stock
(33,669
)
 
(33,669
)
Dividends paid to common shareholders
(125,091
)
 
(112,276
)
Net cash used in financing activities
(206,350
)
 
(276,304
)
 
 
 
 
NET CHANGE IN CASH AND CASH EQUIVALENTS
(20,429
)
 
(3,660
)
CASH AND CASH EQUIVALENTS, beginning of period
65,500

 
78,248

CASH AND CASH EQUIVALENTS, end of period
$
45,071

 
$
74,588

 
 
 
 
SUPPLEMENTAL INFORMATION:
 

 
 

Cash paid for interest, net of amounts capitalized
$
171,661

 
$
168,092


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


8


CBL & Associates Limited Partnership
Condensed Consolidated Balance Sheets
(In thousands, except unit data)
(Unaudited)
ASSETS
September 30,
2014
 
December 31,
2013
Real estate assets:
 
 
 
Land
$
848,596

 
$
858,619

Buildings and improvements
7,138,545

 
7,125,512

 
7,987,141

 
7,984,131

Accumulated depreciation
(2,183,912
)
 
(2,056,357
)
 
5,803,229

 
5,927,774

Developments in progress
151,670

 
139,383

Net investment in real estate assets
5,954,899

 
6,067,157

Cash and cash equivalents
45,015

 
65,486

Receivables:
 

 
 

 Tenant, net of allowance for doubtful accounts of $2,412
     and $2,379 in 2014 and 2013, respectively
79,960

 
79,899

 Other, net of allowance for doubtful accounts of $1,158
      and $1,241 in 2014 and 2013, respectively
24,412

 
23,343

Mortgage and other notes receivable
19,513

 
30,424

Investments in unconsolidated affiliates
270,524

 
277,701

Intangible lease assets and other assets
238,771

 
242,383

 
$
6,633,094

 
$
6,786,393

 
 
 
 
 
 
 
 
LIABILITIES, REDEEMABLE INTERESTS AND CAPITAL
 

 
 

Mortgage and other indebtedness
$
4,711,421

 
$
4,857,523

Accounts payable and accrued liabilities
347,366

 
333,876

Total liabilities
5,058,787

 
5,191,399

Commitments and contingencies (Note 12)


 


Redeemable interests:  
 

 
 

Redeemable noncontrolling interests  
6,120

 
5,883

Redeemable common units  
28,723

 
28,756

Total redeemable interests
34,843

 
34,639

Partners' capital:
 

 
 

Preferred units
565,212

 
565,212

Common units:
 
 
 
 General partner
9,592

 
9,866

 Limited partners
934,608

 
961,175

Accumulated other comprehensive income
12,474

 
4,923

Total partners' capital
1,521,886

 
1,541,176

Noncontrolling interests
17,578

 
19,179

Total capital
1,539,464

 
1,560,355

 
$
6,633,094

 
$
6,786,393


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


9



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

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
169,097

 
$
167,703

 
$
506,005

 
$
498,632

Percentage rents
3,060

 
2,797

 
8,490

 
9,847

Other rents
3,813

 
3,837

 
13,708

 
13,503

Tenant reimbursements
71,330

 
70,576

 
214,322

 
213,524

Management, development and leasing fees
3,228

 
3,118

 
9,176

 
9,042

Other
8,186

 
9,518

 
25,189

 
27,067

Total revenues
258,714

 
257,549

 
776,890

 
771,615

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
36,668

 
38,375

 
112,206

 
111,170

Depreciation and amortization
72,488

 
68,941

 
212,180

 
206,115

Real estate taxes
22,202

 
22,607

 
65,638

 
66,411

Maintenance and repairs
12,603

 
13,387

 
41,391

 
40,808

General and administrative
9,474

 
10,160

 
35,583

 
36,459

Loss on impairment
497

 

 
17,753

 
21,038

Other
7,396

 
6,371

 
21,331

 
21,217

Total operating expenses
161,328

 
159,841

 
506,082

 
503,218

Income from operations
97,386

 
97,708

 
270,808

 
268,397

Interest and other income
463

 
8,809

 
3,535

 
10,197

Interest expense
(60,214
)
 
(56,341
)
 
(179,997
)
 
(173,374
)
Gain (loss) on extinguishment of debt
18,282

 

 
60,942

 
(9,108
)
Gain on investment

 

 

 
2,400

Equity in earnings of unconsolidated affiliates
3,936

 
2,270

 
11,038

 
7,618

Income tax provision
(3,083
)
 
(271
)
 
(4,266
)
 
(854
)
Income from continuing operations before gain on
sales of real estate assets
56,770

 
52,175

 
162,060

 
105,276

Gain on sales of real estate assets
434

 
58

 
3,513

 
1,058

Income from continuing operations
57,204

 
52,233


165,573


106,334

Operating income (loss) of discontinued operations
78

 
(8,346
)
 
(480
)
 
(5,195
)
Gain on discontinued operations
(2
)
 
290

 
88

 
1,162

Net income
57,280

 
44,177


165,181


102,301

Net income attributable to noncontrolling interests
(1,362
)
 
(5,778
)
 
(3,740
)
 
(18,338
)
Net income attributable to the Operating Partnership
55,918

 
38,399

 
161,441

 
83,963

Distributions to preferred unitholders
(11,223
)
 
(11,223
)
 
(33,669
)
 
(33,669
)
Net income attributable to common unitholders
$
44,695

 
$
27,176

 
$
127,772

 
$
50,294


10


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

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
Basic and diluted per unit data attributable to common unitholders:
 
 

 
 
 
 
Income from continuing operations, net of preferred distributions
$
0.22

 
$
0.17

 
$
0.64

 
$
0.27

Discontinued operations
0.00

 
(0.03
)
 
0.00

 
(0.01
)
Net income attributable to common unitholders
$
0.22

 
$
0.14

 
$
0.64

 
$
0.26

Weighted-average common and potential dilutive common
     units outstanding
199,631

 
199,451

 
199,699

 
195,594

 
 
 
 
 
 
 
 
Amounts attributable to common unitholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred distributions
$
44,630

 
$
34,040

 
$
128,106

 
$
53,718

Discontinued operations
65

 
(6,864
)
 
(334
)
 
(3,424
)
Net income attributable to common unitholders
$
44,695

 
$
27,176

 
$
127,772

 
$
50,294

 
 
 
 
 
 
 
 
Distributions declared per common unit
$
0.253

 
$
0.230

 
$
0.759

 
$
0.690






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


11


CBL & Associates Limited Partnership
Condensed Consolidated Statements of Comprehensive Income
(In thousands)
(Unaudited)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2014
 
2013
 
2014
 
2013
Net income
$
57,280

 
$
44,177

 
$
165,181

 
$
102,301

 
 
 
 
 
 
 
 
Other comprehensive income:
 
 
 
 
 
 
 
Unrealized holding gain (loss) on available-for-sale securities
4,044

 
(1,749
)
 
6,240

 
(2,000
)
   Unrealized loss on hedging instruments
1,148

 
(451
)
 
3,021

 
(289
)
Reclassification of hedging effect on earnings
(551
)
 
568

 
(1,650
)
 
1,687

Total other comprehensive income (loss)
4,641

 
(1,632
)
 
7,611

 
(602
)
 
 
 
 
 
 
 
 
Comprehensive income
61,921

 
42,545

 
172,792

 
101,699

Comprehensive income attributable to noncontrolling interests
(1,362
)
 
(5,778
)
 
(3,740
)
 
(18,338
)
Comprehensive income of the Operating Partnership
$
60,559

 
$
36,767

 
$
169,052

 
$
83,361


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


12


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
2,780

 
402

 
3,182

 

 

 
33,669

 
523

 
49,369

 

 
83,561

 
914

 
84,475

Other comprehensive loss

 
(4
)
 
(4
)
 

 

 

 

 

 
(598
)
 
(598
)
 

 
(598
)
Redemption of redeemable noncontrolling
      preferred joint venture interest

 

 

 

 

 

 
105

 
9,895

 

 
10,000

 

 
10,000

Distributions declared - common units

 

 

 

 

 

 
(1,388
)
 
(114,482
)
 

 
(115,870
)
 

 
(115,870
)
Distributions declared - preferred units

 

 

 

 

 
(33,669
)
 

 


 

 
(33,669
)
 

 
(33,669
)
Issuances of common units

 

 

 

 
8,635

 

 

 
209,531

 

 
209,531

 

 
209,531

Cancellation of restricted common stock

 

 

 

 
(39
)
 

 

 
(711
)
 

 
(711
)
 

 
(711
)
Amortization of deferred compensation

 

 

 

 

 

 
24

 
2,263

 

 
2,287

 

 
2,287

Distributions to noncontrolling interests
(1,551
)
 
(3,429
)
 
(4,980
)
 

 

 

 
(229
)
 
(21,639
)
 

 
(21,868
)
 
(966
)
 
(22,834
)
Allocation of partners' capital

 
3,803

 
3,803

 

 

 

 
1,710

 
(5,651
)
 

 
(3,941
)
 

 
(3,941
)
Adjustment to record redeemable
     interests at redemption value
(1,009
)
 
(4,070
)
 
(5,079
)
 

 

 

 
53

 
5,026

 

 
5,079

 

 
5,079

Acquire controlling interest in shopping
center properties

 

 

 

 

 

 

 

 

 

 
(41,444
)
 
(41,444
)
Balance, September 30, 2013
$
6,633

 
$
30,537

 
$
37,170

 
25,050

 
199,451

 
$
565,212

 
$
10,702

 
$
1,010,964

 
$
5,087

 
$
1,591,965

 
$
22,000

 
$
1,613,965





13


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
2,324

 
999

 
3,323

 

 

 
33,669

 
1,301

 
125,472

 

 
160,442

 
1,416

 
161,858

Other comprehensive income

 
60

 
60

 

 

 

 

 

 
7,551

 
7,551

 

 
7,551

Distributions declared - common units

 
(3,411
)
 
(3,411
)
 

 

 

 
(1,479
)
 
(146,707
)