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EX-32.1 - EXHIBIT 32.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-321x9302016.htm
EX-32.4 - EXHIBIT 32.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-324x9302016.htm
EX-32.3 - EXHIBIT 32.3 - CBL & ASSOCIATES PROPERTIES INCexhibit323-9302016.htm
EX-32.2 - EXHIBIT 32.2 - CBL & ASSOCIATES PROPERTIES INCexhibit322-9302016.htm
EX-31.4 - EXHIBIT 31.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-314x9302016.htm
EX-31.3 - EXHIBIT 31.3 - CBL & ASSOCIATES PROPERTIES INCexhibit-313x9302016.htm
EX-31.2 - EXHIBIT 31.2 - CBL & ASSOCIATES PROPERTIES INCexhibit-312x9302016.htm
EX-31.1 - EXHIBIT 31.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-311x9302016.htm
EX-12.4 - EXHIBIT 12.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-124x9302016.htm
EX-12.3 - EXHIBIT 12.3 - CBL & ASSOCIATES PROPERTIES INCexhibit-123x9302016.htm
EX-12.2 - EXHIBIT 12.2 - CBL & ASSOCIATES PROPERTIES INCexhibit-122x9302016.htm
EX-12.1 - EXHIBIT 12.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-121x9302016.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, 2016
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 3, 2016, there were 170,793,828 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, 2016 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, 2016, 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 84.8% limited partner interest for a combined interest held by the Company of 85.8%.
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 and other 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;
information concerning unregistered sales of equity securities and use of proceeds in Item 2 of Part II 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
 
 
 
 
 
 
 
 
 
 
 



PART I – FINANCIAL INFORMATION

ITEM 1:   Financial Statements
CBL & Associates Properties, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
ASSETS (1)
September 30,
2016
 
December 31,
2015
Real estate assets:
 
 
 
Land
$
839,114

 
$
876,668

Buildings and improvements
6,906,736

 
7,287,862

 
7,745,850

 
8,164,530

Accumulated depreciation
(2,370,768
)
 
(2,382,568
)
 
5,375,082

 
5,781,962

Held for sale
32,250

 

Developments in progress
141,099

 
75,991

Net investment in real estate assets
5,548,431

 
5,857,953

Cash and cash equivalents
24,468

 
36,892

Receivables:
 
 
 
Tenant, net of allowance for doubtful accounts of $1,993
and $1,923 in 2016 and 2015, respectively
95,518

 
87,286

Other, net of allowance for doubtful accounts of $1,332
and $1,276 in 2016 and 2015, respectively
14,109

 
17,958

Mortgage and other notes receivable
13,581

 
18,238

Investments in unconsolidated affiliates
287,791

 
276,383

Intangible lease assets and other assets
190,423

 
185,281

 
$
6,174,321

 
$
6,479,991

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
 

 
 

Mortgage and other indebtedness, net
$
4,531,269

 
$
4,710,628

Accounts payable and accrued liabilities
303,642

 
344,434

Total liabilities (1)
4,834,911

 
5,055,062

Commitments and contingencies (Note 6 and Note 12)


 


Redeemable noncontrolling interests
22,742

 
25,330

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, 170,790,979 and 170,490,948 issued and 
outstanding in 2016 and 2015, respectively
1,708

 
1,705

Additional paid-in capital
1,959,007

 
1,970,333

Accumulated other comprehensive income

 
1,935

Dividends in excess of cumulative earnings
(754,425
)
 
(689,028
)
Total shareholders' equity
1,206,315

 
1,284,970

Noncontrolling interests
110,353

 
114,629

Total equity
1,316,668

 
1,399,599

 
$
6,174,321

 
$
6,479,991

(1)
As of September 30, 2016, includes $618,034 of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and $484,231 of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. See Note 5.
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,
 
2016
 
2015
 
2016
 
2015
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
164,444

 
$
170,422

 
$
502,289

 
$
505,931

Percentage rents
3,225

 
3,869

 
10,590

 
10,418

Other rents
3,866

 
4,156

 
13,747

 
13,748

Tenant reimbursements
69,489

 
72,461

 
212,951

 
214,818

Management, development and leasing fees
4,177

 
2,754

 
10,825

 
8,195

Other
6,520

 
8,974

 
19,362

 
24,278

Total revenues
251,721

 
262,636

 
769,764

 
777,388

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
35,116

 
35,859

 
104,804

 
107,629

Depreciation and amortization
71,794

 
74,045

 
220,505

 
221,550

Real estate taxes
22,492

 
23,579

 
68,354

 
68,913

Maintenance and repairs
13,236

 
12,480

 
39,574

 
39,103

General and administrative
13,222

 
12,995

 
46,865

 
46,440

Loss on impairment
53,558

 
884

 
116,736

 
3,665

Other
5,576

 
8,787

 
20,313

 
21,191

Total operating expenses
214,994

 
168,629

 
617,151

 
508,491

Income from operations
36,727

 
94,007

 
152,613

 
268,897

Interest and other income
451

 
579

 
1,062

 
6,242

Interest expense
(54,292
)
 
(56,451
)
 
(162,710
)
 
(174,362
)
Gain on extinguishment of debt
(6
)
 

 

 
256

Gain on investment

 

 

 
16,560

Income tax benefit (provision)
2,386

 
(448
)
 
2,974

 
(2,004
)
Equity in earnings of unconsolidated affiliates
10,478

 
3,508

 
107,217

 
12,212

Income (loss) from continuing operations before gain on sales of real estate assets
(4,256
)
 
41,195

 
101,156

 
127,801

Gain on sales of real estate assets
4,926

 
3,237

 
14,503

 
18,167

Net income
670

 
44,432


115,659


145,968

Net (income) loss attributable to noncontrolling interests in:
 

 
 
 
 
 
 
Operating Partnership
1,372

 
(4,665
)
 
(12,056
)
 
(15,783
)
Other consolidated subsidiaries
(983
)
 
(2,198
)
 
449

 
(4,557
)
Net income attributable to the Company
1,059

 
37,569

 
104,052

 
125,628

Preferred dividends
(11,223
)
 
(11,223
)
 
(33,669
)
 
(33,669
)
Net income (loss) attributable to common shareholders
$
(10,164
)
 
$
26,346

 
$
70,383

 
$
91,959

 
 
 
 
 
 
 
 
Basic per share data attributable to common shareholders:
 

 
 

 
 
 
 
Net income (loss) attributable to common shareholders
$
(0.06
)
 
$
0.15

 
$
0.41

 
$
0.54

Weighted-average common shares outstanding
170,792

 
170,494

 
170,751

 
170,470

 
 
 
 
 
 
 
 
Diluted per share data attributable to common shareholders:
 
 
 

 
 
 
 
Net income (loss) attributable to common shareholders
$
(0.06
)
 
$
0.15

 
$
0.41

 
$
0.54

Weighted-average common and potential dilutive common shares outstanding
170,792

 
170,494

 
170,751

 
170,500

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.265

 
$
0.265

 
$
0.795

 
$
0.795


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

2


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

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Net income
$
670

 
$
44,432

 
$
115,659

 
$
145,968

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

 

 

 
242

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

 

 

 
(16,560
)
   Unrealized gain on hedging instruments

 
975

 
877

 
3,074

   Reclassification of hedging effect on earnings

 
(518
)
 
(443
)
 
(1,687
)
Total other comprehensive income (loss)

 
457

 
434

 
(14,931
)
 
 
 
 
 
 
 
 
Comprehensive income
670

 
44,889

 
116,093

 
131,037

Comprehensive (income) loss attributable to noncontrolling interests in:
 
 
 
 
 
 
 
  Operating Partnership
1,372

 
(4,737
)
 
(12,119
)
 
(12,769
)
  Other consolidated subsidiaries
(983
)
 
(2,198
)
 
449

 
(4,557
)
Comprehensive income attributable to the Company
$
1,059

 
$
37,954

 
$
104,423

 
$
113,711


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


3


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, 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
)
Purchase of noncontrolling interest in Operating Partnership

 

 

 

 

 

 

 
(286
)
 
(286
)
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

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

Contributions from noncontrolling interests

 

 

 

 

 

 

 
607

 
607

Distributions to noncontrolling interests
(5,486
)
 

 

 

 

 

 

 
(28,856
)
 
(28,856
)
Balance, September 30, 2015
$
28,315

 
$
25

 
$
1,705

 
$
1,968,947

 
$
1,494

 
$
(610,368
)
 
$
1,361,803

 
$
128,927

 
$
1,490,730





4


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, 2016
$
25,330

 
$
25

 
$
1,705

 
$
1,970,333

 
$
1,935

 
$
(689,028
)
 
$
1,284,970

 
$
114,629

 
$
1,399,599

Net income (loss)
(2,119
)
 

 

 

 

 
104,052

 
104,052

 
13,726

 
117,778

Other comprehensive income
3

 

 

 

 
371

 

 
371

 
60

 
431

Purchase of noncontrolling interests in Operating Partnership

 

 

 

 

 

 

 
(11,754
)
 
(11,754
)
Dividends declared - common stock

 

 

 

 

 
(135,780
)
 
(135,780
)
 

 
(135,780
)
Dividends declared - preferred stock

 

 

 

 

 
(33,669
)
 
(33,669
)
 

 
(33,669
)
Issuances of 331,324 shares of common stock
and restricted common stock

 

 
3

 
429

 

 

 
432

 

 
432

Cancellation of 31,293 shares of restricted
common stock

 

 

 
(226
)
 

 

 
(226
)
 

 
(226
)
Performance stock units

 

 

 
775

 

 

 
775

 

 
775

Amortization of deferred compensation

 

 

 
2,857

 

 

 
2,857

 

 
2,857

Adjustment for noncontrolling interests
1,686

 

 

 
(11,647
)
 
(2,306
)
 

 
(13,953
)
 
12,267

 
(1,686
)
Adjustment to record redeemable
     noncontrolling interests at redemption value
3,617

 

 

 
(3,514
)
 

 

 
(3,514
)
 
(103
)
 
(3,617
)
Contributions from noncontrolling interests

 

 

 

 

 

 

 
11,240

 
11,240

Distributions to noncontrolling interests
(5,775
)
 

 

 

 

 

 

 
(29,712
)
 
(29,712
)
Balance, September 30, 2016
$
22,742

 
$
25

 
$
1,708

 
$
1,959,007

 
$

 
$
(754,425
)
 
$
1,206,315

 
$
110,353

 
$
1,316,668


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


5



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

 
Nine Months Ended
September 30,
 
2016
 
2015
CASH FLOWS FROM OPERATING ACTIVITIES:
 

 
 
Net income
$
115,659

 
$
145,968

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

Depreciation and amortization
220,505

 
221,550

Net amortization of deferred financing costs and debt premiums
2,019

 
3,745

Net amortization of intangible lease assets and liabilities
(204
)
 
(613
)
Gain on sales of real estate assets
(14,503
)
 
(18,167
)
Gain on investment

 
(16,560
)
Write-off of development projects
44

 
2,183

Share-based compensation expense
4,011

 
4,323

Loss on impairment
116,736

 
3,665

Gain on extinguishment of debt

 
(256
)
Equity in earnings of unconsolidated affiliates
(107,217
)
 
(12,212
)
Distributions of earnings from unconsolidated affiliates
12,337

 
15,697

Provision for doubtful accounts
3,377

 
1,663

Change in deferred tax accounts
(1,780
)
 
(59
)
Changes in:
 

 
 

Tenant and other receivables
(7,759
)
 
(6,777
)
Other assets
(10,028
)
 
(5,592
)
Accounts payable and accrued liabilities
6,428

 
21,324

Net cash provided by operating activities
339,625

 
359,882

 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Additions to real estate assets
(165,091
)
 
(160,760
)
Acquisition of real estate assets

 
(191,988
)
(Additions) reductions to restricted cash
(10,020
)
 
2,132

Proceeds from sales of real estate assets
125,606

 
33,355

Additions to mortgage and other notes receivable
(3,259
)
 

Payments received on mortgage and other notes receivable
790

 
1,464

Net proceeds from sales of available-for-sale securities

 
20,755

Additional investments in and advances to unconsolidated affiliates
(21,805
)
 
(13,314
)
Distributions in excess of equity in earnings of unconsolidated affiliates
74,242

 
16,979

Changes in other assets
(4,786
)
 
(8,227
)
Net cash used in investing activities
(4,323
)
 
(299,604
)

6


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

 
Nine Months Ended
September 30,
 
2016
 
2015
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from mortgage and other indebtedness
$
614,671

 
$
919,728

Principal payments on mortgage and other indebtedness
(755,579
)
 
(782,195
)
Additions to deferred financing costs
(1,169
)
 
(287
)
Proceeds from issuances of common stock
131

 
149

Purchase of noncontrolling interests in the Operating Partnership
(11,754
)
 
(286
)
Contributions from noncontrolling interests
11,085

 
607

Distributions to noncontrolling interests
(35,742
)
 
(34,345
)
Dividends paid to holders of preferred stock
(33,669
)
 
(33,669
)
Dividends paid to common shareholders
(135,700
)
 
(135,481
)
Net cash used in financing activities
(347,726
)
 
(65,779
)
 
 
 
 
NET CHANGE IN CASH AND CASH EQUIVALENTS
(12,424
)
 
(5,501
)
CASH AND CASH EQUIVALENTS, beginning of period
36,892

 
37,938

CASH AND CASH EQUIVALENTS, end of period
$
24,468

 
$
32,437

 
 
 
 
SUPPLEMENTAL INFORMATION:
 

 
 

Cash paid for interest, net of amounts capitalized
$
150,512

 
$
162,390


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


7


CBL & Associates Limited Partnership
Condensed Consolidated Balance Sheets
(In thousands, except unit data)
(Unaudited)
ASSETS (1)
September 30,
2016
 
December 31,
2015
Real estate assets:
 
 
 
Land
$
839,114

 
$
876,668

Buildings and improvements
6,906,736

 
7,287,862

 
7,745,850

 
8,164,530

Accumulated depreciation
(2,370,768
)
 
(2,382,568
)
 
5,375,082

 
5,781,962

Held for sale
32,250

 

Developments in progress
141,099

 
75,991

Net investment in real estate assets
5,548,431

 
5,857,953

Cash and cash equivalents
24,462

 
36,887

Receivables:
 

 
 

Tenant, net of allowance for doubtful accounts of $1,993
and $1,923 in 2016 and 2015, respectively
95,518

 
87,286

Other, net of allowance for doubtful accounts of $1,332
and $1,276 in 2016 and 2015, respectively
14,060

 
17,958

Mortgage and other notes receivable
13,581

 
18,238

Investments in unconsolidated affiliates
288,326

 
276,946

Intangible lease assets and other assets
190,303

 
185,162

 
$
6,174,681

 
$
6,480,430

 
 
 
 
LIABILITIES, REDEEMABLE INTERESTS AND CAPITAL
 

 
 

Mortgage and other indebtedness, net
$
4,531,269

 
$
4,710,628

Accounts payable and accrued liabilities
303,671

 
344,434

Total liabilities (1)
4,834,940

 
5,055,062

Commitments and contingencies (Note 6 and Note 12)


 


Redeemable interests:  
 

 
 

Redeemable noncontrolling interests  
3,206

 
5,586

Redeemable common units  
19,536

 
19,744

Total redeemable interests
22,742

 
25,330

Partners' capital:
 

 
 

Preferred units
565,212

 
565,212

Common units:
 
 
 
 General partner
7,526

 
8,435

 Limited partners
731,301

 
822,383

Accumulated other comprehensive loss

 
(868
)
Total partners' capital
1,304,039

 
1,395,162

Noncontrolling interests
12,960

 
4,876

Total capital
1,316,999

 
1,400,038

 
$
6,174,681

 
$
6,480,430


(1)
As of September 30, 2016, includes $618,034 of assets related to consolidated variable interest entities that can only be used to settle obligations of the consolidated variable interest entities and $484,231 of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Operating Partnership. See Note 5.

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

8


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,
 
2016
 
2015
 
2016
 
2015
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
164,444

 
$
170,422

 
$
502,289

 
$
505,931

Percentage rents
3,225

 
3,869

 
10,590

 
10,418

Other rents
3,866

 
4,156

 
13,747

 
13,748

Tenant reimbursements
69,489

 
72,461

 
212,951

 
214,818

Management, development and leasing fees
4,177

 
2,754

 
10,825

 
8,195

Other
6,520

 
8,974

 
19,362

 
24,278

Total revenues
251,721

 
262,636

 
769,764

 
777,388

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
35,116

 
35,859

 
104,804

 
107,629

Depreciation and amortization
71,794

 
74,045

 
220,505

 
221,550

Real estate taxes
22,492

 
23,579

 
68,354

 
68,913

Maintenance and repairs
13,236

 
12,480

 
39,574

 
39,103

General and administrative
13,222

 
12,995

 
46,865

 
46,440

Loss on impairment
53,558

 
884

 
116,736

 
3,665

Other
5,576

 
8,787

 
20,313

 
21,191

Total operating expenses
214,994

 
168,629

 
617,151

 
508,491

Income from operations
36,727

 
94,007

 
152,613

 
268,897

Interest and other income
451

 
579

 
1,062

 
6,242

Interest expense
(54,292
)
 
(56,451
)
 
(162,710
)
 
(174,362
)
Gain on extinguishment of debt
(6
)
 

 

 
256

Gain on investment

 

 

 
16,560

Income tax benefit (provision)
2,386

 
(448
)
 
2,974

 
(2,004
)
Equity in earnings of unconsolidated affiliates
10,478

 
3,508

 
107,217

 
12,212

Income (loss) from continuing operations before gain on sales of real estate assets
(4,256
)
 
41,195

 
101,156

 
127,801

Gain on sales of real estate assets
4,926

 
3,237

 
14,503

 
18,167

Net income
670

 
44,432


115,659


145,968

Net (income) loss attributable to noncontrolling interests
(983
)
 
(2,198
)
 
449

 
(4,557
)
Net income (loss) attributable to the Operating Partnership
(313
)
 
42,234

 
116,108

 
141,411

Distributions to preferred unitholders
(11,223
)
 
(11,223
)
 
(33,669
)
 
(33,669
)
Net income (loss) attributable to common unitholders
$
(11,536
)
 
$
31,011

 
$
82,439

 
$
107,742

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic per unit data attributable to common unitholders:
 

 
 

 
 
 
 
Net income (loss) attributable to common unitholders
$
(0.06
)
 
$
0.16

 
$
0.41

 
$
0.54

Weighted-average common units outstanding
200,004

 
199,751

 
199,992

 
199,728

 
 
 
 
 
 
 
 
Basic and diluted per unit data attributable to common unitholders:
 
 
 

 
 
 
 
Net income (loss) attributable to common unitholders
$
(0.06
)
 
$
0.16

 
$
0.41

 
$
0.54

Weighted-average common and potential dilutive common units outstanding
200,004

 
199,751

 
199,992

 
199,758

 
 
 
 
 
 
 
 
Distributions declared per common unit
$
0.273

 
$
0.273

 
$
0.819

 
$
0.819


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

9


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

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Net income
$
670

 
$
44,432

 
$
115,659

 
$
145,968

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

 

 

 
242

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

 

 

 
(16,560
)
   Unrealized gain on hedging instruments

 
975

 
877

 
3,074

Reclassification of hedging effect on earnings

 
(518
)
 
(443
)
 
(1,687
)
Total other comprehensive income (loss)

 
457

 
434

 
(14,931
)
 
 
 
 
 
 
 
 
Comprehensive income
670

 
44,889

 
116,093

 
131,037

Comprehensive (income) loss attributable to noncontrolling interests
(983
)
 
(2,198
)
 
449

 
(4,557
)
Comprehensive income (loss) of the Operating Partnership
$
(313
)
 
$
42,691

 
$
116,542

 
$
126,480


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


10


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 (Loss)
 
Total Partners' Capital
 
Noncontrolling
Interests
 
Total Capital
Balance, January 1, 2015
$
6,455

 
$
31,104

 
$
37,559

 
25,050

 
199,532

 
$
565,212

 
$
9,789

 
$
953,349

 
$
13,183

 
$
1,541,533

 
$
8,908

 
$
1,550,441

Net income
3,023

 
842

 
3,865

 

 

 
33,669

 
1,097

 
105,803

 

 
140,569

 
1,534

 
142,103

Other comprehensive loss

 
(366
)
 
(366
)
 

 

 

 

 

 
(14,565
)
 
(14,565
)
 

 
(14,565
)
Distributions declared - common units

 
(3,429
)
 
(3,429
)
 

 

 

 
(1,600
)
 
(158,444
)
 

 
(160,044
)
 

 
(160,044
)
Distributions declared - preferred units

 

 

 

 

 
(33,669
)
 

 

 

 
(33,669
)
 

 
(33,669
)
Issuances of common units

 

 

 

 
273

 

 

 
639

 

 
639

 

 
639

Redemptions of common units

 

 

 

 
(55
)
 

 

 
(286
)
 

 
(286
)
 

 
(286
)
Cancellation of restricted common stock

 

 

 

 

 

 

 
(741
)
 

 
(741
)
 

 
(741
)
Performance stock units

 

 

 

 

 

 
5

 
463

 

 
468

 

 
468

Amortization of deferred compensation

 

 

 

 

 

 
35

 
3,349

 

 
3,384

 

 
3,384

Allocation of partners' capital

 
2,258

 
2,258

 

 

 

 
(76
)
 
(2,269
)
 

 
(2,345
)
 

 
(2,345
)
Adjustment to record redeemable
     interests at redemption value
(1,097
)
 
(8,418
)
 
(9,515
)
 

 

 

 
97

 
9,419

 

 
9,516

 

 
9,516

Contributions from noncontrolling interests

 

 

 

 

 

 

 

 

 

 
607

 
607

Distributions to noncontrolling interests
(2,057
)
 

 
(2,057
)
 

 

 

 

 

 

 

 
(4,354
)
 
(4,354
)
Balance, September 30, 2015
$
6,324

 
$
21,991

 
$
28,315

 
25,050

 
199,750

 
$
565,212

 
$
9,347

 
$
911,282

 
$
(1,382
)
 
$
1,484,459

 
$
6,695

 
$
1,491,154





11


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
Loss
 
Total
Partners'
Capital
 
Noncontrolling
Interests
 
Total Capital
Balance, January 1, 2016
$
5,586

 
$
19,744

 
$
25,330

 
25,050

 
199,748

 
$
565,212

 
$
8,435

 
$
822,383

 
$
(868
)
 
$
1,395,162

 
$
4,876

 
$
1,400,038

Net income (loss)
(2,763
)
 
644

 
(2,119
)
 

 

 
33,669

 
839

 
80,956

 

 
115,464

 
2,314

 
117,778

Other comprehensive income

 
3

 
3

 

 

 

 

 


 
431

 
431

 

 
431

Distributions declared - common units

 
(3,429
)
 
(3,429
)
 

 

 

 
(1,600
)
 
(158,422
)
 

 
(160,022
)
 

 
(160,022
)
Distributions declared - preferred units

 

 

 

 

 
(33,669
)
 

 


 

 
(33,669
)
 

 
(33,669
)
Issuances of common units

 

 

 

 
331

 

 

 
432

 

 
432

 

 
432

Redemptions of common units

 

 

 

 
(965
)
 

 

 
(11,754
)
 

 
(11,754
)
 

 
(11,754
)
Cancellation of restricted common stock