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EX-10.13.5 - EXHIBIT 10.13.5 - CBL & ASSOCIATES PROPERTIES INCexhibit10135.htm
EX-10.23 - EXHIBIT 10.23 - CBL & ASSOCIATES PROPERTIES INCexhibit1023.htm
EX-10.22 - EXHIBIT 10.22 - CBL & ASSOCIATES PROPERTIES INCexhibit1022.htm
EX-32.2 - EXHIBIT 32.2 - CBL & ASSOCIATES PROPERTIES INCexhibit322-9302015.htm
EX-32.3 - EXHIBIT 32.3 - CBL & ASSOCIATES PROPERTIES INCexhibit323-9302015.htm
EX-10.18.2 - EXHIBIT 10.18.2 - CBL & ASSOCIATES PROPERTIES INCexhibit10182.htm
EX-12.2 - EXHIBIT 12.2 - CBL & ASSOCIATES PROPERTIES INCexhibit-122x9302015.htm
EX-31.3 - EXHIBIT 31.3 - CBL & ASSOCIATES PROPERTIES INCexhibit-313x9302015.htm
EX-32.1 - EXHIBIT 32.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-321x9302015.htm
EX-31.2 - EXHIBIT 31.2 - CBL & ASSOCIATES PROPERTIES INCexhibit-312x9302015.htm
EX-12.3 - EXHIBIT 12.3 - CBL & ASSOCIATES PROPERTIES INCexhibit-123x9302015.htm
EX-31.1 - EXHIBIT 31.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-311x9302015.htm
EX-12.1 - EXHIBIT 12.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-121x9302015.htm
EX-32.4 - EXHIBIT 32.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-324x9302015.htm
EX-12.4 - EXHIBIT 12.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-124x9302015.htm
EX-31.4 - EXHIBIT 31.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-314x9302015.htm
EX-10.24 - EXHIBIT 10.24 - CBL & ASSOCIATES PROPERTIES INCexhibit1024.htm

UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015
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 October 30, 2015, there were 170,496,444 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, 2015 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, 2015, 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,
2015
 
December 31,
2014
Real estate assets:
 
 
 
Land
$
905,628

 
$
847,829

Buildings and improvements
7,410,063

 
7,221,387

 
8,315,691

 
8,069,216

Accumulated depreciation
(2,395,124
)
 
(2,240,007
)
 
5,920,567

 
5,829,209

Developments in progress
123,233

 
117,966

Net investment in real estate assets
6,043,800

 
5,947,175

Cash and cash equivalents
32,437

 
37,938

Receivables:
 
 
 
Tenant, net of allowance for doubtful accounts of $1,884
and $2,368 in 2015 and 2014, respectively
87,797

 
81,338

Other, net of allowance for doubtful accounts of $1,219
and $1,285 in 2015 and 2014, respectively
21,232

 
22,577

Mortgage and other notes receivable
18,347

 
19,811

Investments in unconsolidated affiliates
277,374

 
281,449

Intangible lease assets and other assets
214,748

 
226,011

 
$
6,695,735

 
$
6,616,299

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
 

 
 

Mortgage and other indebtedness
$
4,821,475

 
$
4,700,460

Accounts payable and accrued liabilities
355,215

 
328,352

Total liabilities
5,176,690

 
5,028,812

Commitments and contingencies (Note 12)


 


Redeemable noncontrolling interests
28,315

 
37,559

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, 170,493,734 and 170,260,273 issued and 
outstanding in 2015 and 2014, respectively
1,705

 
1,703

Additional paid-in capital
1,968,947

 
1,958,198

Accumulated other comprehensive income
1,494

 
13,411

Dividends in excess of cumulative earnings
(610,368
)
 
(566,785
)
Total shareholders' equity
1,361,803

 
1,406,552

Noncontrolling interests
128,927

 
143,376

Total equity
1,490,730

 
1,549,928

 
$
6,695,735

 
$
6,616,299


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,
 
2015
 
2014
 
2015
 
2014
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
170,422

 
$
169,097

 
$
505,931

 
$
506,005

Percentage rents
3,869

 
3,060

 
10,418

 
8,490

Other rents
4,156

 
3,813

 
13,748

 
13,708

Tenant reimbursements
72,461

 
71,330

 
214,818

 
214,322

Management, development and leasing fees
2,754

 
3,228

 
8,195

 
9,176

Other
8,974

 
8,186

 
24,278

 
25,189

Total revenues
262,636

 
258,714

 
777,388

 
776,890

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
35,859

 
36,668

 
107,629

 
112,206

Depreciation and amortization
74,045

 
72,488

 
221,550

 
212,180

Real estate taxes
23,579

 
22,202

 
68,913

 
65,638

Maintenance and repairs
12,480

 
12,603

 
39,103

 
41,391

General and administrative
12,995

 
9,474

 
46,440

 
35,583

Loss on impairment
884

 
497

 
3,665

 
17,753

Other
8,787

 
7,396

 
21,191

 
21,331

Total operating expenses
168,629

 
161,328

 
508,491

 
506,082

Income from operations
94,007

 
97,386

 
268,897

 
270,808

Interest and other income
579

 
463

 
6,242

 
3,535

Interest expense
(56,451
)
 
(60,214
)
 
(174,362
)
 
(179,997
)
Gain on extinguishment of debt

 
18,282

 
256

 
60,942

Gain on investment

 

 
16,560

 

Equity in earnings of unconsolidated affiliates
3,508

 
3,936

 
12,212

 
11,038

Income tax provision
(448
)
 
(3,083
)
 
(2,004
)
 
(4,266
)
Income from continuing operations before gain on sales of real estate assets
41,195

 
56,770

 
127,801

 
162,060

Gain on sales of real estate assets
3,237

 
434

 
18,167

 
3,513

Income from continuing operations
44,432

 
57,204


145,968


165,573

Operating income (loss) of discontinued operations

 
78

 

 
(480
)
Gain on discontinued operations

 
(2
)
 

 
88

Net income
44,432

 
57,280


145,968


165,181

Net income attributable to noncontrolling interests in:
 

 
 
 
 
 
 
Operating Partnership
(4,665
)
 
(6,576
)
 
(15,783
)
 
(18,847
)
Other consolidated subsidiaries
(2,198
)
 
(1,362
)
 
(4,557
)
 
(3,740
)
Net income attributable to the Company
37,569

 
49,342

 
125,628

 
142,594

Preferred dividends
(11,223
)
 
(11,223
)
 
(33,669
)
 
(33,669
)
Net income attributable to common shareholders
$
26,346

 
$
38,119

 
$
91,959

 
$
108,925

 
 
 
 
 
 
 
 

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,
 
2015
 
2014
 
2015
 
2014
Basic per share data attributable to common shareholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred dividends
$
0.15

 
$
0.22

 
$
0.54

 
$
0.64

Discontinued operations
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to common shareholders
$
0.15

 
$
0.22

 
$
0.54

 
$
0.64

Weighted-average common shares outstanding
170,494

 
170,262

 
170,470

 
170,242

 
 
 
 
 
 
 
 
Diluted per share data attributable to common shareholders:
 
 
 

 
 
 
 
Income from continuing operations, net of preferred dividends
$
0.15

 
$
0.22

 
$
0.54

 
$
0.64

Discontinued operations
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to common shareholders
$
0.15

 
$
0.22

 
$
0.54

 
$
0.64

Weighted-average common and potential dilutive common shares outstanding
170,494

 
170,262

 
170,500

 
170,242

 
 
 
 
 
 
 
 
Amounts attributable to common shareholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred dividends
$
26,346

 
$
38,054

 
$
91,959

 
$
109,259

Discontinued operations

 
65

 

 
(334
)
Net income attributable to common shareholders
$
26,346

 
$
38,119

 
$
91,959

 
$
108,925

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.265

 
$
0.245

 
$
0.795

 
$
0.735




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,
 
2015
 
2014
 
2015
 
2014
Net income
$
44,432

 
$
57,280

 
$
145,968

 
$
165,181

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

 
4,044

 
242

 
6,240

Reclassification to net income of realized gain on available-for-sale securities

 

 
(16,560
)
 

   Unrealized gain on hedging instruments
975

 
1,148

 
3,074

 
3,021

   Reclassification of hedging effect on earnings
(518
)
 
(551
)
 
(1,687
)
 
(1,650
)
Total other comprehensive income (loss)
457

 
4,641

 
(14,931
)
 
7,611

 
 
 
 
 
 
 
 
Comprehensive income
44,889

 
61,921

 
131,037

 
172,792

Comprehensive income attributable to noncontrolling interests in:
 
 
 
 
 
 
 
  Operating Partnership
(4,737
)
 
(8,071
)
 
(12,769
)
 
(19,978
)
  Other consolidated subsidiaries
(2,198
)
 
(1,362
)
 
(4,557
)
 
(3,740
)
Comprehensive income attributable to the Company
$
37,954

 
$
52,488

 
$
113,711

 
$
149,074


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, 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

Redemption 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





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, 2015
$
37,559

 
$
25

 
$
1,703

 
$
1,958,198

 
$
13,411

 
$
(566,785
)
 
$
1,406,552

 
$
143,376

 
$
1,549,928

Net income
3,865

 

 

 

 

 
125,628

 
125,628

 
16,475

 
142,103

Other comprehensive loss
(366
)
 

 

 

 
(11,917
)
 

 
(11,917
)
 
(2,648
)
 
(14,565
)
Dividends declared - common stock

 

 

 

 

 
(135,542
)
 
(135,542
)
 

 
(135,542
)
Dividends declared - preferred stock

 

 

 

 

 
(33,669
)
 
(33,669
)
 

 
(33,669
)
Issuances of 275,359 shares of common stock
and restricted common stock

 

 
3

 
636

 

 


 
639

 

 
639

Cancellation of 41,898 shares of restricted
common stock

 

 
(1
)
 
(740
)
 

 

 
(741
)
 

 
(741
)
Performance stock units

 

 

 
468

 

 

 
468

 

 
468

Amortization of deferred compensation

 

 

 
3,384

 

 

 
3,384

 

 
3,384

Redemptions of Operating Partnership common units

 

 

 

 

 

 

 
(286
)
 
(286
)
Contributions from noncontrolling interests

 

 

 

 

 

 

 
607

 
607

Distributions to noncontrolling interests
(5,486
)
 

 

 

 

 

 

 
(28,856
)
 
(28,856
)
Adjustment for noncontrolling interests
2,258

 

 

 
(1,338
)
 

 

 
(1,338
)
 
(918
)
 
(2,256
)
Adjustment to record redeemable
     noncontrolling interests at redemption value
(9,515
)
 

 

 
8,339

 

 

 
8,339

 
1,177

 
9,516

Balance, September 30, 2015
$
28,315

 
$
25

 
$
1,705

 
$
1,968,947

 
$
1,494

 
$
(610,368
)
 
$
1,361,803

 
$
128,927

 
$
1,490,730


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,
 
2015
 
2014
CASH FLOWS FROM OPERATING ACTIVITIES:
 

 
 
Net income
$
145,968

 
$
165,181

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

Depreciation and amortization
221,550

 
212,180

Net amortization of deferred finance costs and debt premiums
3,745

 
4,557

Net amortization of intangible lease assets and liabilities
(613
)
 
535

Gain on sales of real estate assets
(18,167
)
 
(3,513
)
Gain on investment
(16,560
)
 

Gain on discontinued operations

 
(88
)
Write-off of development projects
2,183

 
81

Share-based compensation expense
4,323

 
3,318

Loss on impairment
3,665

 
17,753

Loss on impairment from discontinued operations

 
681

Gain on extinguishment of debt
(256
)
 
(60,942
)
Equity in earnings of unconsolidated affiliates
(12,212
)
 
(11,038
)
Distributions of earnings from unconsolidated affiliates
15,697

 
14,563

Provision for doubtful accounts
1,663

 
2,684

Change in deferred tax accounts
(59
)
 
1,241

Changes in:
 

 
 

Tenant and other receivables
(6,777
)
 
(4,629
)
Other assets
(5,592
)
 
(5,637
)
Accounts payable and accrued liabilities
21,324

 
(7,593
)
Net cash provided by operating activities
359,882

 
329,334

 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Additions to real estate assets
(160,760
)
 
(195,418
)
Acquisition of real estate assets
(191,988
)
 

(Additions) reduction to restricted cash
2,132

 
(362
)
Proceeds from sales of real estate assets
33,355

 
15,865

Payments received on mortgage and other notes receivable
1,464

 
20,911

Net proceeds from sales of available-for-sale securities
20,755

 

Additional investments in and advances to unconsolidated affiliates
(13,314
)
 
(12,541
)
Distributions in excess of equity in earnings of unconsolidated affiliates
16,979

 
34,695

Changes in other assets
(8,227
)
 
(6,563
)
Net cash used in investing activities
(299,604
)
 
(143,413
)

7


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

 
Nine Months Ended
September 30,
 
2015
 
2014
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from mortgage and other indebtedness
$
919,728

 
$
429,596

Principal payments on mortgage and other indebtedness
(782,195
)
 
(437,092
)
Additions to deferred financing costs
(287
)
 
(233
)
Prepayment fees on extinguishment of debt

 
(1,249
)
Proceeds from issuances of common stock
149

 
131

Purchase of noncontrolling interest in the Operating Partnership
(286
)
 
(4,609
)
Contributions from noncontrolling interests
607

 
11

Distributions to noncontrolling interests
(34,345
)
 
(34,145
)
Dividends paid to holders of preferred stock
(33,669
)
 
(33,669
)
Dividends paid to common shareholders
(135,481
)
 
(125,091
)
Net cash used in financing activities
(65,779
)
 
(206,350
)
 
 
 
 
NET CHANGE IN CASH AND CASH EQUIVALENTS
(5,501
)
 
(20,429
)
CASH AND CASH EQUIVALENTS, beginning of period
37,938

 
65,500

CASH AND CASH EQUIVALENTS, end of period
$
32,437

 
$
45,071

 
 
 
 
SUPPLEMENTAL INFORMATION:
 

 
 

Cash paid for interest, net of amounts capitalized
$
162,390

 
$
171,661


 
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,
2015
 
December 31,
2014
Real estate assets:
 
 
 
Land
$
905,628

 
$
847,829

Buildings and improvements
7,410,062

 
7,221,387

 
8,315,690

 
8,069,216

Accumulated depreciation
(2,395,124
)
 
(2,240,007
)
 
5,920,566

 
5,829,209

Developments in progress
123,233

 
117,966

Net investment in real estate assets
6,043,799

 
5,947,175

Cash and cash equivalents
32,420

 
37,926

Receivables:
 

 
 

 Tenant, net of allowance for doubtful accounts of $1,884
     and $2,368 in 2015 and 2014, respectively
87,797

 
81,338

 Other, net of allowance for doubtful accounts of $1,219
      and $1,285 in 2015 and 2014, respectively
21,232

 
22,577

Mortgage and other notes receivable
18,347

 
19,811

Investments in unconsolidated affiliates
277,936

 
282,009

Intangible lease assets and other assets
214,628

 
225,891

 
$
6,696,159

 
$
6,616,727

 
 
 
 
LIABILITIES, REDEEMABLE INTERESTS AND CAPITAL
 

 
 

Mortgage and other indebtedness
$
4,821,475

 
$
4,700,460

Accounts payable and accrued liabilities
355,215

 
328,267

Total liabilities
5,176,690

 
5,028,727

Commitments and contingencies (Note 12)


 


Redeemable interests:  
 

 
 

Redeemable noncontrolling interests  
6,324

 
6,455

Redeemable common units  
21,991

 
31,104

Total redeemable interests
28,315

 
37,559

Partners' capital:
 

 
 

Preferred units
565,212

 
565,212

Common units:
 
 
 
 General partner
9,347

 
9,789

 Limited partners
911,282

 
953,349

Accumulated other comprehensive income (loss)
(1,382
)
 
13,183

Total partners' capital
1,484,459

 
1,541,533

Noncontrolling interests
6,695

 
8,908

Total capital
1,491,154

 
1,550,441

 
$
6,696,159

 
$
6,616,727


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,
 
2015
 
2014
 
2015
 
2014
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
170,422

 
$
169,097

 
$
505,931

 
$
506,005

Percentage rents
3,869

 
3,060

 
10,418

 
8,490

Other rents
4,156

 
3,813

 
13,748

 
13,708

Tenant reimbursements
72,461

 
71,330

 
214,818

 
214,322

Management, development and leasing fees
2,754

 
3,228

 
8,195

 
9,176

Other
8,974

 
8,186

 
24,278

 
25,189

Total revenues
262,636

 
258,714

 
777,388

 
776,890

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
35,859

 
36,668

 
107,629

 
112,206

Depreciation and amortization
74,045

 
72,488

 
221,550

 
212,180

Real estate taxes
23,579

 
22,202

 
68,913

 
65,638

Maintenance and repairs
12,480

 
12,603

 
39,103

 
41,391

General and administrative
12,995

 
9,474

 
46,440

 
35,583

Loss on impairment
884

 
497

 
3,665

 
17,753

Other
8,787

 
7,396

 
21,191

 
21,331

Total operating expenses
168,629

 
161,328

 
508,491

 
506,082

Income from operations
94,007

 
97,386

 
268,897

 
270,808

Interest and other income
579

 
463

 
6,242

 
3,535

Interest expense
(56,451
)
 
(60,214
)
 
(174,362
)
 
(179,997
)
Gain on extinguishment of debt

 
18,282

 
256

 
60,942

Gain on investment

 

 
16,560

 

Equity in earnings of unconsolidated affiliates
3,508

 
3,936

 
12,212

 
11,038

Income tax provision
(448
)
 
(3,083
)
 
(2,004
)
 
(4,266
)
Income from continuing operations before gain on sales of real estate assets
41,195

 
56,770

 
127,801

 
162,060

Gain on sales of real estate assets
3,237

 
434

 
18,167

 
3,513

Income from continuing operations
44,432

 
57,204


145,968


165,573

Operating income (loss) of discontinued operations

 
78

 

 
(480
)
Gain on discontinued operations

 
(2
)
 

 
88

Net income
44,432

 
57,280


145,968


165,181

Net income attributable to noncontrolling interests
(2,198
)
 
(1,362
)
 
(4,557
)
 
(3,740
)
Net income attributable to the Operating Partnership
42,234

 
55,918

 
141,411

 
161,441

Distributions to preferred unitholders
(11,223
)
 
(11,223
)
 
(33,669
)
 
(33,669
)
Net income attributable to common unitholders
$
31,011

 
$
44,695

 
$
107,742

 
$
127,772

 
 
 
 
 
 
 
 

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,
 
2015
 
2014
 
2015
 
2014
Basic per unit data attributable to common unitholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred distributions
$
0.16

 
$
0.22

 
$
0.54

 
$
0.64

Discontinued operations
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to common unitholders
$
0.16

 
$
0.22

 
$
0.54

 
$
0.64

Weighted-average common units outstanding
199,751

 
199,631

 
199,728

 
199,699

 
 
 
 
 
 
 
 
Diluted per unit data attributable to common unitholders:
 
 
 

 
 
 
 
Income from continuing operations, net of preferred distributions
$
0.16

 
$
0.22

 
$
0.54

 
$
0.64

Discontinued operations
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to common unitholders
$
0.16

 
$
0.22

 
$
0.54

 
$
0.64

Weighted-average common and potential dilutive common units outstanding
199,751

 
199,631

 
199,758

 
199,699

 
 
 
 
 
 
 
 
Amounts attributable to common unitholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred distributions
$
31,011

 
$
44,630

 
$
107,742

 
$
128,106

Discontinued operations

 
65

 

 
(334
)
Net income attributable to common unitholders
$
31,011

 
$
44,695

 
$
107,742

 
$
127,772

 
 
 
 
 
 
 
 
Distributions declared per common unit
$
0.273

 
$
0.253

 
$
0.819

 
$
0.759






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,
 
2015
 
2014
 
2015
 
2014
Net income
$
44,432

 
$
57,280

 
$
145,968

 
$
165,181

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

 
4,044

 
242

 
6,240

Reclassification to net income of realized gain on available-for-sale securities

 

 
(16,560
)
 

   Unrealized gain on hedging instruments
975

 
1,148

 
3,074

 
3,021

Reclassification of hedging effect on earnings
(518
)
 
(551
)
 
(1,687
)
 
(1,650
)
Total other comprehensive income (loss)
457

 
4,641

 
(14,931
)
 
7,611

 
 
 
 
 
 
 
 
Comprehensive income
44,889

 
61,921

 
131,037

 
172,792

Comprehensive income attributable to noncontrolling interests
(2,198
)
 
(1,362
)
 
(4,557
)
 
(3,740
)
Comprehensive income of the Operating Partnership
$
42,691

 
$
60,559

 
$
126,480

 
$
169,052


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, 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
)
 

 
(148,186
)
 

 
(148,186
)
Distributions declared - preferred units

 

 

 

 

 
(33,669
)
 

 

 

 
(33,669
)
 

 
(33,669
)
Issuances of common units

 

 

 

 
244

 

 

 
639

 

 
639

 

 
639

Redemption of common units

 

 

 

 
(171
)
 

 

 
(4,609
)
 

 
(4,609
)
 

 
(4,609
)
Cancellation of restricted common stock

 

 

 

 
(31
)
 

 

 
(369
)
 

 
(369
)
 

 
(369
)
Amortization of deferred compensation

 

 

 

 

 

 
29

 
2,808

 

 
2,837

 

 
2,837

Contributions from noncontrolling interests

 

 

 

 

 

 

 

 

 

 
938

 
938

Distributions to noncontrolling interests
(3,672
)
 

 
(3,672
)
 

 

 

 

 

 

 

 
(3,955
)
 
(3,955
)
Allocation of partners' capital

 
2,193

 
2,193

 

 

 

 
(107
)
 
(2,108
)
 

 
(2,215
)
 

 
(2,215
)
Adjustment to record redeemable
     interests at redemption value
1,585

 
126

 
1,711

 

 

 

 
(18
)
 
(1,693
)
 

 
(1,711
)
 

 
(1,711
)
Balance, September 30, 2014
$
6,120

 
$
28,723

 
$
34,843

 
25,050

 
199,635

 
$
565,212

 
$
9,592

 
$
934,608

 
$
12,474

 
$
1,521,886

 
$
17,578

 
$