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EX-32.4 - EXHIBIT 32.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-324x9302017.htm
EX-32.3 - EXHIBIT 32.3 - CBL & ASSOCIATES PROPERTIES INCexhibit323-9302017.htm
EX-32.2 - EXHIBIT 32.2 - CBL & ASSOCIATES PROPERTIES INCexhibit322-9302017.htm
EX-32.1 - EXHIBIT 32.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-321x9302017.htm
EX-31.4 - EXHIBIT 31.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-314x9302017.htm
EX-31.3 - EXHIBIT 31.3 - CBL & ASSOCIATES PROPERTIES INCexhibit-313x9302017.htm
EX-31.2 - EXHIBIT 31.2 - CBL & ASSOCIATES PROPERTIES INCexhibit-312x9302017.htm
EX-31.1 - EXHIBIT 31.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-311x9302017.htm
EX-12.4 - EXHIBIT 12.4 - CBL & ASSOCIATES PROPERTIES INCexhibit-124x9302017.htm
EX-12.3 - EXHIBIT 12.3 - CBL & ASSOCIATES PROPERTIES INCexhibit-123x9302017.htm
EX-12.2 - EXHIBIT 12.2 - CBL & ASSOCIATES PROPERTIES INCexhibit-122x9302017.htm
EX-12.1 - EXHIBIT 12.1 - CBL & ASSOCIATES PROPERTIES INCexhibit-121x9302017.htm
EX-10.17 - EXHIBIT 10.17 - CBL & ASSOCIATES PROPERTIES INCexhibit1017-9302017.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, 2017
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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. 
CBL & Associates Properties, Inc.
Large accelerated filer x
 
Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)
Smaller reporting company o
Emerging growth company o
 
 
 
 
 
CBL & Associates Limited Partnership
Large accelerated filer o
 
Accelerated filer o
Non-accelerated filer x (Do not check if a smaller reporting company)
Smaller reporting company o
Emerging growth company o
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 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 1, 2017, there were 171,101,611 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, 2017 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, 2017, 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 and Noncontrolling Interests; Note 6 - Mortgage and Other Indebtedness, Net; 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,
2017
 
December 31,
2016
Real estate assets:
 
 
 
Land
$
811,742

 
$
820,979

Buildings and improvements
6,668,312

 
6,942,452

 
7,480,054

 
7,763,431

Accumulated depreciation
(2,411,560
)
 
(2,427,108
)
 
5,068,494

 
5,336,323

Held for sale

 
5,861

Developments in progress
100,106

 
178,355

Net investment in real estate assets
5,168,600

 
5,520,539

Cash and cash equivalents
31,351

 
18,951

Receivables:
 
 
 
Tenant, net of allowance for doubtful accounts of $2,075
and $1,910 in 2017 and 2016, respectively
86,947

 
94,676

Other, net of allowance for doubtful accounts of $838 in 2017 and 2016
5,554

 
6,227

Mortgage and other notes receivable
19,279

 
16,803

Investments in unconsolidated affiliates
251,664

 
266,872

Intangible lease assets and other assets
180,361

 
180,572

 
$
5,743,756

 
$
6,104,640

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
 

 
 

Mortgage and other indebtedness, net
$
4,216,178

 
$
4,465,294

Accounts payable and accrued liabilities
270,046

 
280,498

Total liabilities (1)
4,486,224

 
4,745,792

Commitments and contingencies (Note 6 and Note 12)


 


Redeemable noncontrolling interests
13,076

 
17,996

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, 171,096,895 and 170,792,645 issued and 
outstanding in 2017 and 2016, respectively
1,711

 
1,708

Additional paid-in capital
1,971,447

 
1,969,059

Dividends in excess of cumulative earnings
(827,292
)
 
(742,078
)
Total shareholders' equity
1,145,891

 
1,228,714

Noncontrolling interests
98,565

 
112,138

Total equity
1,244,456

 
1,340,852

 
$
5,743,756

 
$
6,104,640

(1)
As of September 30, 2017, includes $652,439 of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and $379,786 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,
 
2017
 
2016
 
2017
 
2016
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
150,836

 
$
164,444

 
$
468,195

 
$
502,289

Percentage rents
3,000

 
3,225

 
7,127

 
10,590

Other rents
3,790

 
3,866

 
11,171

 
13,747

Tenant reimbursements
63,055

 
69,489

 
192,577

 
212,951

Management, development and leasing fees
2,718

 
4,177

 
8,747

 
10,825

Other
1,251

 
6,520

 
4,079

 
19,362

Total revenues
224,650

 
251,721

 
691,896

 
769,764

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
31,295

 
35,116

 
96,250

 
104,804

Depreciation and amortization
71,732

 
71,794

 
225,461

 
220,505

Real estate taxes
21,573

 
22,492

 
62,343

 
68,354

Maintenance and repairs
11,254

 
13,236

 
36,322

 
39,574

General and administrative
13,568

 
13,222

 
45,402

 
46,865

Loss on impairment
24,935

 
53,558

 
71,401

 
116,736

Other
132

 
5,576

 
5,151

 
20,313

Total operating expenses
174,489

 
214,994

 
542,330

 
617,151

Income from operations
50,161

 
36,727

 
149,566

 
152,613

Interest and other income (loss)
(200
)
 
451

 
1,235

 
1,062

Interest expense
(53,913
)
 
(54,292
)
 
(165,179
)
 
(162,710
)
Gain on extinguishment of debt
6,452

 
(6
)
 
30,927

 

Loss on investment
(354
)
 

 
(6,197
)
 

Income tax benefit
1,064

 
2,386

 
4,784

 
2,974

Equity in earnings of unconsolidated affiliates
4,706

 
10,478

 
16,404

 
107,217

Income (loss) from continuing operations before gain on sales of real estate assets
7,916

 
(4,256
)
 
31,540

 
101,156

Gain on sales of real estate assets
1,383

 
4,926

 
86,904

 
14,503

Net income
9,299

 
670


118,444


115,659

Net (income) loss attributable to noncontrolling interests in:
 

 
 
 
 
 
 
Operating Partnership
81

 
1,372

 
(8,702
)
 
(12,056
)
Other consolidated subsidiaries
(415
)
 
(983
)
 
(25,266
)
 
449

Net income attributable to the Company
8,965

 
1,059

 
84,476

 
104,052

Preferred dividends
(11,223
)
 
(11,223
)
 
(33,669
)
 
(33,669
)
Net income (loss) attributable to common shareholders
$
(2,258
)
 
$
(10,164
)
 
$
50,807

 
$
70,383

 
 
 
 
 
 
 
 
Basic and diluted per share data attributable to common shareholders:
 
 
 

 
 
 
 
Net income (loss) attributable to common shareholders
$
(0.01
)
 
$
(0.06
)
 
$
0.30

 
$
0.41

Weighted-average common and potential dilutive common shares outstanding
171,096

 
170,792

 
171,060

 
170,751

 
 
 
 
 
 
 
 
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,
 
2017
 
2016
 
2017
 
2016
Net income
$
9,299

 
$
670

 
$
118,444

 
$
115,659

 
 
 
 
 
 
 
 
Other comprehensive income:
 
 
 
 
 
 
 
   Unrealized gain on hedging instruments

 

 

 
877

   Reclassification of hedging effect on earnings

 

 

 
(443
)
Total other comprehensive income

 

 

 
434

 
 
 
 
 
 
 
 
Comprehensive income
9,299

 
670

 
118,444

 
116,093

Comprehensive (income) loss attributable to noncontrolling interests in:
 
 
 
 
 
 
 
  Operating Partnership
81

 
1,372

 
(8,702
)
 
(12,119
)
  Other consolidated subsidiaries
(415
)
 
(983
)
 
(25,266
)
 
449

Comprehensive income attributable to the Company
$
8,965

 
$
1,059

 
$
84,476

 
$
104,423


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, 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 interest 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





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
 
Dividends in
Excess of
Cumulative
Earnings
 
Total
Shareholders'
Equity
 
Noncontrolling
 Interests
 
Total
 Equity
Balance, January 1, 2017
$
17,996

 
$
25

 
$
1,708

 
$
1,969,059

 
$
(742,078
)
 
$
1,228,714

 
$
112,138

 
$
1,340,852

Net income
481

 

 

 

 
84,476

 
84,476

 
33,487

 
117,963

Dividends declared - common stock

 

 

 

 
(136,021
)
 
(136,021
)
 

 
(136,021
)
Dividends declared - preferred stock

 

 

 

 
(33,669
)
 
(33,669
)
 

 
(33,669
)
Issuances of 342,008 shares of common stock
      and restricted common stock

 

 
3

 
471

 

 
474

 

 
474

Redemptions of Operating Partnership common units

 

 

 

 

 

 
(593
)
 
(593
)
Cancellation of 37,758 shares of restricted
      common stock

 

 

 
(327
)
 

 
(327
)
 

 
(327
)
Performance stock units

 

 

 
1,115

 

 
1,115

 

 
1,115

Amortization of deferred compensation

 

 

 
3,135

 

 
3,135

 

 
3,135

Adjustment for noncontrolling interests
2,224

 

 

 
(5,635
)
 

 
(5,635
)
 
3,413

 
(2,222
)
Adjustment to record redeemable
     noncontrolling interests at redemption value
(4,196
)
 

 

 
3,629

 

 
3,629

 
566

 
4,195

Deconsolidation of investment

 

 

 

 

 

 
(2,232
)
 
(2,232
)
Contributions from noncontrolling interests

 

 

 

 

 

 
263

 
263

Distributions to noncontrolling interests
(3,429
)
 

 

 

 

 

 
(48,477
)
 
(48,477
)
Balance, September 30, 2017
$
13,076

 
$
25

 
$
1,711

 
$
1,971,447

 
$
(827,292
)
 
$
1,145,891

 
$
98,565

 
$
1,244,456


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,
 
2017
 
2016
CASH FLOWS FROM OPERATING ACTIVITIES:
 

 
 
Net income
$
118,444

 
$
115,659

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

Depreciation and amortization
225,461

 
220,505

Net amortization of deferred financing costs, debt premiums and discounts
2,904

 
2,019

Net amortization of intangible lease assets and liabilities
(1,235
)
 
(204
)
Gain on sales of real estate assets
(86,904
)
 
(14,503
)
Loss on investment
6,197

 

Write-off of development projects
5,151

 
44

Share-based compensation expense
4,569

 
4,011

Loss on impairment
71,401

 
116,736

Gain on extinguishment of debt
(30,927
)
 

Equity in earnings of unconsolidated affiliates
(16,404
)
 
(107,217
)
Distributions of earnings from unconsolidated affiliates
16,361

 
12,337

Provision for doubtful accounts
3,353

 
3,377

Change in deferred tax accounts
2,911

 
(1,780
)
Changes in:
 
 
 

Tenant and other receivables
(4,893
)
 
(7,759
)
Other assets
(12,368
)
 
(10,028
)
Accounts payable and accrued liabilities
32,929

 
6,428

Net cash provided by operating activities
336,950

 
339,625

 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Additions to real estate assets
(149,302
)
 
(165,091
)
Acquisitions of real estate assets
(79,799
)
 

(Additions) reductions to restricted cash
1,261

 
(10,020
)
Proceeds from sales of real estate assets
201,291

 
125,606

Proceeds from disposal of investment
9,000

 

Additions to mortgage and other notes receivable
(4,118
)
 
(3,259
)
Payments received on mortgage and other notes receivable
3,443

 
790

Additional investments in and advances to unconsolidated affiliates
(17,199
)
 
(21,805
)
Distributions in excess of equity in earnings of unconsolidated affiliates
15,743

 
74,242

Changes in other assets
(14,471
)
 
(4,786
)
Net cash used in investing activities
(34,151
)
 
(4,323
)

6


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

 
Nine Months Ended
September 30,
 
2017
 
2016
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from mortgage and other indebtedness
$
1,097,006

 
$
614,671

Principal payments on mortgage and other indebtedness
(1,151,494
)
 
(755,579
)
Additions to deferred financing costs
(5,003
)
 
(1,169
)
Prepayment fees on extinguishment of debt
(8,871
)
 

Proceeds from issuances of common stock
150

 
131

Purchases of noncontrolling interests in the Operating Partnership
(593
)
 
(11,754
)
Contributions from noncontrolling interests
263

 
11,085

Payment of tax withholdings for restricted stock awards
(322
)
 

Distributions to noncontrolling interests
(51,925
)
 
(35,742
)
Dividends paid to holders of preferred stock
(33,669
)
 
(33,669
)
Dividends paid to common shareholders
(135,941
)
 
(135,700
)
Net cash used in financing activities
(290,399
)
 
(347,726
)
 
 
 
 
NET CHANGE IN CASH AND CASH EQUIVALENTS
12,400

 
(12,424
)
CASH AND CASH EQUIVALENTS, beginning of period
18,951

 
36,892

CASH AND CASH EQUIVALENTS, end of period
$
31,351

 
$
24,468

 
 
 
 
SUPPLEMENTAL INFORMATION:
 

 
 

Cash paid for interest, net of amounts capitalized
$
150,816

 
$
150,512


 
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,
2017
 
December 31,
2016
Real estate assets:
 
 
 
Land
$
811,742

 
$
820,979

Buildings and improvements
6,668,312

 
6,942,452

 
7,480,054

 
7,763,431

Accumulated depreciation
(2,411,560
)
 
(2,427,108
)
 
5,068,494

 
5,336,323

Held for sale

 
5,861

Developments in progress
100,106

 
178,355

Net investment in real estate assets
5,168,600

 
5,520,539

Cash and cash equivalents
31,350

 
18,943

Receivables:
 

 
 

Tenant, net of allowance for doubtful accounts of $2,075
and $1,910 in 2017 and 2016, respectively
86,947

 
94,676

Other, net of allowance for doubtful accounts of $838
in 2017 and 2016
5,505

 
6,179

Mortgage and other notes receivable
19,279

 
16,803

Investments in unconsolidated affiliates
252,195

 
267,405

Intangible lease assets and other assets
180,241

 
180,452

 
$
5,744,117

 
$
6,104,997

 
 
 
 
LIABILITIES, REDEEMABLE INTERESTS AND CAPITAL
 

 
 

Mortgage and other indebtedness, net
$
4,216,178

 
$
4,465,294

Accounts payable and accrued liabilities
270,117

 
280,528

Total liabilities (1)
4,486,295

 
4,745,822

Commitments and contingencies (Note 6 and Note 12)


 


 Redeemable common units  
13,076

 
17,996

Partners' capital:
 

 
 

Preferred units
565,212

 
565,212

Common units:
 
 
 
 General partner
6,806

 
7,781

 Limited partners
662,102

 
756,083

Total partners' capital
1,234,120

 
1,329,076

Noncontrolling interests
10,626

 
12,103

Total capital
1,244,746

 
1,341,179

 
$
5,744,117

 
$
6,104,997


(1)
As of September 30, 2017, includes $652,439 of assets related to consolidated variable interest entities that can only be used to settle obligations of the consolidated variable interest entities and $379,786 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,
 
2017
 
2016
 
2017
 
2016
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
150,836

 
$
164,444

 
$
468,195

 
$
502,289

Percentage rents
3,000

 
3,225

 
7,127

 
10,590

Other rents
3,790

 
3,866

 
11,171

 
13,747

Tenant reimbursements
63,055

 
69,489

 
192,577

 
212,951

Management, development and leasing fees
2,718

 
4,177

 
8,747

 
10,825

Other
1,251

 
6,520

 
4,079

 
19,362

Total revenues
224,650

 
251,721

 
691,896

 
769,764

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
31,295

 
35,116

 
96,250

 
104,804

Depreciation and amortization
71,732

 
71,794

 
225,461

 
220,505

Real estate taxes
21,573

 
22,492

 
62,343

 
68,354

Maintenance and repairs
11,254

 
13,236

 
36,322

 
39,574

General and administrative
13,568

 
13,222

 
45,402

 
46,865

Loss on impairment
24,935

 
53,558

 
71,401

 
116,736

Other
132

 
5,576

 
5,151

 
20,313

Total operating expenses
174,489

 
214,994

 
542,330

 
617,151

Income from operations
50,161

 
36,727

 
149,566

 
152,613

Interest and other income (loss)
(200
)
 
451

 
1,235

 
1,062

Interest expense
(53,913
)
 
(54,292
)
 
(165,179
)
 
(162,710
)
Gain on extinguishment of debt
6,452

 
(6
)
 
30,927

 

Loss on investment
(354
)
 

 
(6,197
)
 

Income tax benefit
1,064

 
2,386

 
4,784

 
2,974

Equity in earnings of unconsolidated affiliates
4,706

 
10,478

 
16,404

 
107,217

Income (loss) from continuing operations before gain on sales of real estate assets
7,916

 
(4,256
)
 
31,540

 
101,156

Gain on sales of real estate assets
1,383

 
4,926

 
86,904

 
14,503

Net income
9,299

 
670


118,444


115,659

Net (income) loss attributable to noncontrolling interests
(415
)
 
(983
)
 
(25,266
)
 
449

Net income (loss) attributable to the Operating Partnership
8,884

 
(313
)
 
93,178

 
116,108

Distributions to preferred unitholders
(11,223
)
 
(11,223
)
 
(33,669
)
 
(33,669
)
Net income (loss) attributable to common unitholders
$
(2,339
)
 
$
(11,536
)
 
$
59,509

 
$
82,439

 
 
 
 
 
 
 
 
Basic and diluted per unit data attributable to common unitholders:
 
 
 

 
 
 
 
Net income (loss) attributable to common unitholders
$
(0.01
)
 
$
(0.06
)
 
$
0.30

 
$
0.41

Weighted-average common and potential dilutive common units outstanding
199,321

 
200,004

 
199,325

 
199,992

 
 
 
 
 
 
 
 
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,
 
2017
 
2016
 
2017
 
2016
Net income
$
9,299

 
$
670

 
$
118,444

 
$
115,659

 
 
 
 
 
 
 
 
Other comprehensive income:
 
 
 
 
 
 
 
   Unrealized gain on hedging instruments

 

 

 
877

Reclassification of hedging effect on earnings

 

 

 
(443
)
Total other comprehensive income

 

 

 
434

 
 
 
 
 
 
 
 
Comprehensive income
9,299

 
670

 
118,444

 
116,093

Comprehensive (income) loss attributable to noncontrolling interests
(415
)
 
(983
)
 
(25,266
)
 
449

Comprehensive income (loss) of the Operating Partnership
$
8,884

 
$
(313
)
 
$
93,178

 
$
116,542


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, 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

Redemption of common units

 

 

 

 
(965
)
 

 

 
(11,754
)
 

 
(11,754
)
 

 
(11,754
)
Cancellation of restricted common stock

 

 

 

 
(31
)
 

 

 
(226
)
 

 
(226
)
 

 
(226
)
Performance stock units

 

 

 

 

 

 
8

 
767

 

 
775

 

 
775

Amortization of deferred compensation

 

 

 

 

 

 
29

 
2,828

 

 
2,857

 

 
2,857

Allocation of partners' capital

 
1,686

 
1,686

 

 

 

 
(148
)
 
(2,083
)
 
437

 
(1,794
)
 

 
(1,794
)
Adjustment to record redeemable
     interests at redemption value
2,729

 
888

 
3,617

 

 

 

 
(37
)
 
(3,580
)
 

 
(3,617
)
 

 
(3,617
)
Contributions from noncontrolling interests

 

 

 

 

 

 

 

 

 

 
11,240

 
11,240

Distributions to noncontrolling interests
(2,346
)
 

 
(2,346
)
 

 

 

 

 

 

 

 
(5,470
)
 
(5,470
)
Balance, September 30, 2016
$
3,206

 
$
19,536

 
$
22,742

 
25,050

 
199,083

 
$
565,212

 
$
7,526

 
$
731,301

 
$

 
$
1,304,039

 
$
12,960

 
$
1,316,999





11


CBL & Associates Limited Partnership
Condensed Consolidated Statements of Capital
(In thousands)
(Unaudited)
(Continued)
 
 
 
Number of
 
 
 
Common Units
 
 
 
 
 
 
 
Redeemable
Common
Units
 
Preferred
Units
 
Common
Units
 
Preferred
Units
 
General
Partner
 
Limited
Partners
 
Total
Partners'
Capital
 
Noncontrolling
Interests
 
Total Capital
Balance, January 1, 2017
$
17,996

 
25,050

 
199,085

 
$
565,212

 
$
7,781

 
$
756,083

 
$
1,329,076

 
$
12,103

 
$
1,341,179

Net income
481

 

 

 
33,669

 
607

 
58,421

 
92,697

 
25,266

 
117,963

Distributions declared - common units
(3,429
)
 

 

 

 
(1,600
)
 
(158,124
)
 
(159,724
)
 

 
(159,724
)
Distributions declared - preferred units

 

 

 
(33,669
)
 

 

 
(33,669
)
 

 
(33,669
)
Issuances of common units

 

 
342

 

 

 
474

 
474

 

 
474

Redemptions of common units

 

 
(73
)
 

 

 
(593
)
 
(593
)
 

 
(593
)
Cancellation of restricted common stock

 

 
(38
)
 

 

 
(327
)
 
(327
)
 

 
(327
)
Performance stock units

 
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