CBL-6.30.2015-10Q
Table of Contents

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 JUNE 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 August 3, 2015, there were 170,494,382 shares of CBL & Associates Properties, Inc.'s common stock, par value $0.01 per share, outstanding.


Table of Contents


EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the quarter ended June 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 June 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.


Table of Contents

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
 
 
 
 
 
 
 
 
 
 


Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1:   Financial Statements

CBL & Associates Properties, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
ASSETS
June 30,
2015
 
December 31,
2014
Real estate assets:
 
 
 
Land
$
893,149

 
$
847,829

Buildings and improvements
7,363,728

 
7,221,387

 
8,256,877

 
8,069,216

Accumulated depreciation
(2,335,522
)
 
(2,240,007
)
 
5,921,355

 
5,829,209

Held for sale
2,718

 

Developments in progress
128,381

 
117,966

Net investment in real estate assets
6,052,454

 
5,947,175

Cash and cash equivalents
30,601

 
37,938

Receivables:
 
 
 
 Tenant, net of allowance for doubtful accounts of $1,837
     and $2,368 in 2015 and 2014, respectively
83,296

 
81,338

 Other, net of allowance for doubtful accounts of $1,245
      and $1,285 in 2015 and 2014, respectively
21,641

 
22,577

Mortgage and other notes receivable
19,546

 
19,811

Investments in unconsolidated affiliates
280,460

 
281,449

Intangible lease assets and other assets
214,205

 
226,011

 
$
6,702,203

 
$
6,616,299

 
 
 
 
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
 

 
 

Mortgage and other indebtedness
$
4,834,205

 
$
4,700,460

Accounts payable and accrued liabilities
327,240

 
328,352

Total liabilities
5,161,445

 
5,028,812

Commitments and contingencies (Note 12)


 


Redeemable noncontrolling interests
42,944

 
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, 170,492,533 and 170,260,273 issued and
     outstanding in 2015 and 2014, respectively
1,705

 
1,703

Additional paid-in capital
1,957,228

 
1,958,198

Accumulated other comprehensive income
1,109

 
13,411

Dividends in excess of cumulative earnings
(591,534
)
 
(566,785
)
Total shareholders' equity
1,368,533

 
1,406,552

Noncontrolling interests
129,281

 
143,376

Total equity
1,497,814

 
1,549,928

 
$
6,702,203

 
$
6,616,299


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

1

Table of Contents

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

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
166,428

 
$
167,631

 
$
335,509

 
$
336,908

Percentage rents
2,412

 
1,824

 
6,549

 
5,430

Other rents
4,421

 
4,613

 
9,592

 
9,895

Tenant reimbursements
70,224

 
70,774

 
142,357

 
142,992

Management, development and leasing fees
2,663

 
2,813

 
5,441

 
5,948

Other
7,695

 
9,278

 
15,304

 
17,003

Total revenues
253,843

 
256,933

 
514,752

 
518,176

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
32,866

 
35,527

 
71,770

 
75,538

Depreciation and amortization
71,239

 
70,609

 
147,505

 
139,692

Real estate taxes
22,549

 
22,089

 
45,334

 
43,436

Maintenance and repairs
12,407

 
12,623

 
26,623

 
28,788

General and administrative
16,215

 
11,336

 
33,445

 
26,109

Loss on impairment
2,781

 
106

 
2,781

 
17,256

Other
5,928

 
7,390

 
12,404

 
13,935

Total operating expenses
163,985

 
159,680

 
339,862

 
344,754

Income from operations
89,858

 
97,253

 
174,890

 
173,422

Interest and other income
389

 
1,544

 
5,663

 
3,072

Interest expense
(58,754
)
 
(59,277
)
 
(117,911
)
 
(119,783
)
Gain on extinguishment of debt
256

 

 
256

 
42,660

Gain on investment

 

 
16,560

 

Equity in earnings of unconsolidated affiliates
4,881

 
3,418

 
8,704

 
7,102

Income tax provision
(2,472
)
 
(786
)
 
(1,556
)
 
(1,183
)
Income from continuing operations before gain on sales of real estate assets
34,158

 
42,152

 
86,606

 
105,290

Gain on sales of real estate assets
14,173

 
1,925

 
14,930

 
3,079

Income from continuing operations
48,331

 
44,077


101,536


108,369

Operating loss of discontinued operations

 
(59
)
 

 
(558
)
Gain on discontinued operations

 
107

 

 
90

Net income
48,331

 
44,125


101,536


107,901

Net income attributable to noncontrolling interests in:
 

 
 
 
 
 
 
Operating Partnership
(4,946
)
 
(4,620
)
 
(11,118
)
 
(12,271
)
Other consolidated subsidiaries
(1,490
)
 
(1,547
)
 
(2,359
)
 
(2,378
)
Net income attributable to the Company
41,895

 
37,958

 
88,059

 
93,252

Preferred dividends
(11,223
)
 
(11,223
)
 
(22,446
)
 
(22,446
)
Net income attributable to common shareholders
$
30,672

 
$
26,735

 
$
65,613

 
$
70,806

 
 
 
 
 
 
 
 

2

Table of Contents

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

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Basic per share data attributable to common shareholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred dividends
$
0.18

 
$
0.16

 
$
0.38

 
$
0.42

Discontinued operations
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to common shareholders
$
0.18

 
$
0.16

 
$
0.38

 
$
0.42

Weighted-average common shares outstanding
170,494

 
170,267

 
170,457

 
170,232

 
 
 
 
 
 
 
 
Diluted per share data attributable to common shareholders:
 
 
 

 
 
 
 
Income from continuing operations, net of preferred dividends
$
0.18

 
$
0.16

 
$
0.38

 
$
0.42

Discontinued operations
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to common shareholders
$
0.18

 
$
0.16

 
$
0.38

 
$
0.42

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

 
170,267

 
170,457

 
170,232

 
 
 
 
 
 
 
 
Amounts attributable to common shareholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred dividends
$
30,672

 
$
26,694

 
$
65,613

 
$
71,205

Discontinued operations

 
41

 

 
(399
)
Net income attributable to common shareholders
$
30,672

 
$
26,735

 
$
65,613

 
$
70,806

 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.265

 
$
0.245

 
$
0.530

 
$
0.490




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


3

Table of Contents

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

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Net income
$
48,331

 
$
44,125

 
$
101,536

 
$
107,901

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

 
1,195

 
242

 
2,196

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

 

 
(16,560
)
 

   Unrealized gain on hedging instruments
1,216

 
921

 
2,099

 
1,873

   Reclassification of hedging effect on earnings
(646
)
 
(551
)
 
(1,169
)
 
(1,099
)
Total other comprehensive income (loss)
570

 
1,565

 
(15,388
)
 
2,970

 
 
 
 
 
 
 
 
Comprehensive income
48,901

 
45,690

 
86,148

 
110,871

Comprehensive income attributable to noncontrolling interests in:
 
 
 
 
 
 
 
  Operating Partnership
(5,014
)
 
(4,280
)
 
(8,032
)
 
(11,907
)
  Other consolidated subsidiaries
(1,490
)
 
(1,547
)
 
(2,359
)
 
(2,378
)
Comprehensive income attributable to the Company
$
42,397

 
$
39,863

 
$
75,757

 
$
96,586


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


4

Table of Contents

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
2,355

 

 

 

 

 
93,252

 
93,252

 
12,294

 
105,546

Other comprehensive income (loss)
24

 

 

 

 
3,334

 

 
3,334

 
(388
)
 
2,946

Dividends declared - common stock

 

 

 

 

 
(83,430
)
 
(83,430
)
 

 
(83,430
)
Dividends declared - preferred stock

 

 

 

 

 
(22,446
)
 
(22,446
)
 

 
(22,446
)
Issuances of 241,188 shares of common stock
     and restricted common stock

 

 
3

 
587

 

 

 
590

 

 
590

Cancellation of 28,563 shares of restricted
     common stock

 

 

 
(360
)
 

 

 
(360
)
 

 
(360
)
Amortization of deferred compensation

 

 

 
2,115

 

 

 
2,115

 

 
2,115

Redemption of Operating Partnership common units

 

 

 

 

 

 

 
(2,914
)
 
(2,914
)
Distributions to noncontrolling interests
(5,744
)
 

 

 

 

 

 

 
(17,850
)
 
(17,850
)
Adjustment for noncontrolling interests
1,482

 

 

 
(4,347
)
 

 

 
(4,347
)
 
2,865

 
(1,482
)
Adjustment to record redeemable
     noncontrolling interests at redemption value
3,784

 

 

 
(3,536
)
 

 

 
(3,536
)
 
(248
)
 
(3,784
)
Balance, June 30, 2014
$
36,540

 
$
25

 
$
1,703

 
$
1,962,103

 
$
9,659

 
$
(583,405
)
 
$
1,390,085

 
$
148,780

 
$
1,538,865





5

Table of Contents

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
2,261

 

 

 

 

 
88,059

 
88,059

 
11,216

 
99,275

Other comprehensive loss
(375
)
 

 

 

 
(12,302
)
 

 
(12,302
)
 
(2,711
)
 
(15,013
)
Performance stock units

 

 

 
312

 

 

 
312

 

 
312

Dividends declared - common stock

 

 

 

 

 
(90,362
)
 
(90,362
)
 

 
(90,362
)
Dividends declared - preferred stock

 

 

 

 

 
(22,446
)
 
(22,446
)
 

 
(22,446
)
Issuances of 272,498 shares of common stock
     and restricted common stock

 

 
3

 
589

 

 


 
592

 

 
592

Conversion of Operating Partnership
     common units to shares of common stock

 

 

 

 

 

 

 
(286
)
 
(286
)
Cancellation of 40,238 shares of restricted
     common stock

 

 
(1
)
 
(730
)
 

 

 
(731
)
 

 
(731
)
Amortization of deferred compensation

 

 

 
2,613

 

 

 
2,613

 

 
2,613

Contributions from noncontrolling interests

 

 

 

 

 

 

 
15

 
15

Distributions to noncontrolling interests
(2,754
)
 

 

 

 

 

 

 
(19,830
)
 
(19,830
)
Adjustment for noncontrolling interests
311

 

 

 
1,317

 

 

 
1,317

 
(1,628
)
 
(311
)
Adjustment to record redeemable
     noncontrolling interests at redemption value
5,942

 

 

 
(5,071
)
 

 

 
(5,071
)
 
(871
)
 
(5,942
)
Balance, June 30, 2015
$
42,944

 
$
25

 
$
1,705

 
$
1,957,228

 
$
1,109

 
$
(591,534
)
 
$
1,368,533

 
$
129,281

 
$
1,497,814


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


6

Table of Contents


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

 
Six Months Ended
June 30,
 
2015
 
2014
CASH FLOWS FROM OPERATING ACTIVITIES:
 

 
 
Net income
$
101,536

 
$
107,901

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

Depreciation and amortization
147,505

 
139,692

Net amortization of deferred finance costs and debt premiums
2,626

 
3,357

Net amortization of intangible lease assets and liabilities
33

 
267

Gain on sales of real estate assets
(14,930
)
 
(3,079
)
Gain on discontinued operations

 
(90
)
Write-off of development projects
125

 
34

Share-based compensation expense
3,406

 
2,605

Net realized gain on sale of available-for-sale securities
(16,560
)
 

Loss on impairment
2,781

 
17,256

Loss on impairment from discontinued operations

 
681

Gain on extinguishment of debt
(256
)
 
(42,660
)
Equity in earnings of unconsolidated affiliates
(8,704
)
 
(7,102
)
Distributions of earnings from unconsolidated affiliates
9,780

 
8,965

Provision for doubtful accounts
1,938

 
1,912

Change in deferred tax accounts
153

 
316

Changes in:
 

 
 

Tenant and other receivables
(2,960
)
 
2,274

Other assets
(833
)
 
(1,461
)
Accounts payable and accrued liabilities
(6,247
)
 
(24,752
)
Net cash provided by operating activities
219,393

 
206,116

 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Additions to real estate assets
(94,231
)
 
(114,510
)
Acquisition of real estate assets
(191,988
)
 

Reductions to restricted cash
3,315

 
3,393

Proceeds from sales of real estate assets
24,233

 
10,298

Payments received on mortgage and other notes receivable
264

 
287

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

 

Additional investments in and advances to unconsolidated affiliates
(7,650
)
 
(8,229
)
Distributions in excess of equity in earnings of unconsolidated affiliates
9,789

 
14,713

Changes in other assets
(5,295
)
 
(3,167
)
Net cash used in investing activities
(240,808
)
 
(97,215
)

7

Table of Contents

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

 
Six Months Ended
June 30,
 
2015
 
2014
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from mortgage and other indebtedness
$
421,289

 
$
379,619

Principal payments on mortgage and other indebtedness
(271,516
)
 
(356,918
)
Additions to deferred financing costs
(190
)
 
(113
)
Prepayment fees on extinguishment of debt

 
(1,249
)
Proceeds from issuances of common stock
101

 
82

Purchase of noncontrolling interest in the Operating Partnership
(286
)
 
(2,914
)
Contributions from noncontrolling interests
15

 

Distributions to noncontrolling interests
(22,588
)
 
(23,603
)
Dividends paid to holders of preferred stock
(22,446
)
 
(22,446
)
Dividends paid to common shareholders
(90,301
)
 
(83,377
)
Net cash provided by (used in) financing activities
14,078

 
(110,919
)
 
 
 
 
NET CHANGE IN CASH AND CASH EQUIVALENTS
(7,337
)
 
(2,018
)
CASH AND CASH EQUIVALENTS, beginning of period
37,938

 
65,500

CASH AND CASH EQUIVALENTS, end of period
$
30,601

 
$
63,482

 
 
 
 
SUPPLEMENTAL INFORMATION:
 

 
 

Cash paid for interest, net of amounts capitalized
$
115,467

 
$
117,004


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


8

Table of Contents

CBL & Associates Limited Partnership
Condensed Consolidated Balance Sheets
(In thousands, except unit data)
(Unaudited)
ASSETS
June 30,
2015
 
December 31,
2014
Real estate assets:
 
 
 
Land
$
893,149

 
$
847,829

Buildings and improvements
7,363,728

 
7,221,387

 
8,256,877

 
8,069,216

Accumulated depreciation
(2,335,522
)
 
(2,240,007
)
 
5,921,355

 
5,829,209

Held for sale
2,718

 

Developments in progress
128,381

 
117,966

Net investment in real estate assets
6,052,454

 
5,947,175

Cash and cash equivalents
30,576

 
37,926

Receivables:
 

 
 

 Tenant, net of allowance for doubtful accounts of $1,837
     and $2,368 in 2015 and 2014, respectively
83,296

 
81,338

 Other, net of allowance for doubtful accounts of $1,245
      and $1,285 in 2015 and 2014, respectively
21,641

 
22,577

Mortgage and other notes receivable
19,546

 
19,811

Investments in unconsolidated affiliates
281,021

 
282,009

Intangible lease assets and other assets
214,085

 
225,891

 
$
6,702,619

 
$
6,616,727

 
 
 
 
LIABILITIES, REDEEMABLE INTERESTS AND CAPITAL
 

 
 

Mortgage and other indebtedness
$
4,834,205

 
$
4,700,460

Accounts payable and accrued liabilities
327,240

 
328,267

Total liabilities
5,161,445

 
5,028,727

Commitments and contingencies (Note 12)


 


Redeemable interests:  
 

 
 

Redeemable noncontrolling interests  
6,204

 
6,455

Redeemable common units  
36,740

 
31,104

Total redeemable interests
42,944

 
37,559

Partners' capital:
 

 
 

Preferred units
565,212

 
565,212

Common units:
 
 
 
 General partner
9,417

 
9,789

 Limited partners
918,177

 
953,349

Accumulated other comprehensive income (loss)
(1,830
)
 
13,183

Total partners' capital
1,490,976

 
1,541,533

Noncontrolling interests
7,254

 
8,908

Total capital
1,498,230

 
1,550,441

 
$
6,702,619

 
$
6,616,727


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


9

Table of Contents


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

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
REVENUES:
 
 
 
 
 
 
 
Minimum rents
$
166,428

 
$
167,631

 
$
335,509

 
$
336,908

Percentage rents
2,412

 
1,824

 
6,549

 
5,430

Other rents
4,421

 
4,613

 
9,592

 
9,895

Tenant reimbursements
70,224

 
70,774

 
142,357

 
142,992

Management, development and leasing fees
2,663

 
2,813

 
5,441

 
5,948

Other
7,695

 
9,278

 
15,304

 
17,003

Total revenues
253,843

 
256,933

 
514,752

 
518,176

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 

 
 

 
 
 
 
Property operating
32,866

 
35,527

 
71,770

 
75,538

Depreciation and amortization
71,239

 
70,609

 
147,505

 
139,692

Real estate taxes
22,549

 
22,089

 
45,334

 
43,436

Maintenance and repairs
12,407

 
12,623

 
26,623

 
28,788

General and administrative
16,215

 
11,336

 
33,445

 
26,109

Loss on impairment
2,781

 
106

 
2,781

 
17,256

Other
5,928

 
7,390

 
12,404

 
13,935

Total operating expenses
163,985

 
159,680

 
339,862

 
344,754

Income from operations
89,858

 
97,253

 
174,890

 
173,422

Interest and other income
389

 
1,544

 
5,663

 
3,072

Interest expense
(58,754
)
 
(59,277
)
 
(117,911
)
 
(119,783
)
Gain on extinguishment of debt
256

 

 
256

 
42,660

Gain on investment

 

 
16,560

 

Equity in earnings of unconsolidated affiliates
4,881

 
3,418

 
8,704

 
7,102

Income tax provision
(2,472
)
 
(786
)
 
(1,556
)
 
(1,183
)
Income from continuing operations before gain on sales of real estate assets
34,158

 
42,152

 
86,606

 
105,290

Gain on sales of real estate assets
14,173

 
1,925

 
14,930

 
3,079

Income from continuing operations
48,331

 
44,077


101,536


108,369

Operating loss of discontinued operations

 
(59
)
 

 
(558
)
Gain on discontinued operations

 
107

 

 
90

Net income
48,331

 
44,125


101,536


107,901

Net income attributable to noncontrolling interests
(1,490
)
 
(1,547
)
 
(2,359
)
 
(2,378
)
Net income attributable to the Operating Partnership
46,841

 
42,578

 
99,177

 
105,523

Distributions to preferred unitholders
(11,223
)
 
(11,223
)
 
(22,446
)
 
(22,446
)
Net income attributable to common unitholders
$
35,618

 
$
31,355

 
$
76,731

 
$
83,077

 
 
 
 
 
 
 
 

10

Table of Contents

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

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Basic per unit data attributable to common unitholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred distributions
$
0.18

 
$
0.16

 
$
0.38

 
$
0.42

Discontinued operations
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to common unitholders
$
0.18

 
$
0.16

 
$
0.38

 
$
0.42

Weighted-average common units outstanding
199,751

 
199,726

 
199,716

 
199,734

 
 
 
 
 
 
 
 
Diluted per unit data attributable to common unitholders:
 
 
 

 
 
 
 
Income from continuing operations, net of preferred distributions
$
0.18

 
$
0.16

 
$
0.38

 
$
0.42

Discontinued operations
0.00

 
0.00

 
0.00

 
0.00

Net income attributable to common unitholders
$
0.18

 
$
0.16

 
$
0.38

 
$
0.42

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

 
199,726

 
199,716

 
199,734

 
 
 
 
 
 
 
 
Amounts attributable to common unitholders:
 

 
 

 
 
 
 
Income from continuing operations, net of preferred distributions
$
35,618

 
$
31,314

 
$
76,731

 
$
83,476

Discontinued operations

 
41

 

 
(399
)
Net income attributable to common unitholders
$
35,618

 
$
31,355

 
$
76,731

 
$
83,077

 
 
 
 
 
 
 
 
Distributions declared per common unit
$
0.273

 
$
0.253

 
$
0.546

 
$
0.506






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


11

Table of Contents

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

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Net income
$
48,331

 
$
44,125

 
$
101,536

 
$
107,901

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

 
1,193

 
242

 
2,196

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

 

 
(16,560
)
 

   Unrealized gain on hedging instruments
1,216

 
921

 
2,099

 
1,873

Reclassification of hedging effect on earnings
(646
)
 
(551
)
 
(1,169
)
 
(1,099
)
Total other comprehensive income (loss)
570

 
1,563

 
(15,388
)
 
2,970

 
 
 
 
 
 
 
 
Comprehensive income
48,901

 
45,688

 
86,148

 
110,871

Comprehensive income attributable to noncontrolling interests
(1,490
)
 
(1,547
)
 
(2,359
)
 
(2,378
)
Comprehensive income of the Operating Partnership
$
47,411

 
$
44,141

 
$
83,789

 
$
108,493


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


12

Table of Contents

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
1,706

 
649

 
2,355

 

 

 
22,446

 
846

 
81,582

 

 
104,874

 
672

 
105,546

Other comprehensive income

 
24

 
24

 

 

 

 

 

 
2,946

 
2,946

 

 
2,946

Distributions declared - common units

 
(2,286
)
 
(2,286
)
 

 

 

 
(986
)
 
(97,839
)
 

 
(98,825
)
 

 
(98,825
)
Distributions declared - preferred units

 

 

 

 

 
(22,446
)
 

 

 

 
(22,446
)
 

 
(22,446
)
Issuances of common units

 

 

 

 
242

 

 

 
590

 

 
590

 

 
590

Redemption of common units

 

 

 

 
(171
)
 

 

 
(2,914
)
 

 
(2,914
)
 

 
(2,914
)
Cancellation of restricted common stock

 

 

 

 
(29
)
 

 

 
(360
)
 

 
(360
)
 

 
(360
)
Amortization of deferred compensation

 

 

 

 

 

 
21

 
2,094

 

 
2,115

 

 
2,115

Distributions to noncontrolling interests
(3,458
)
 

 
(3,458
)
 

 

 

 

 

 

 

 
(2,456
)
 
(2,456
)
Allocation of partners' capital

 
1,482

 
1,482

 

 

 

 
(16
)
 
(1,453
)
 

 
(1,469
)
 

 
(1,469
)
Adjustment to record redeemable
     interests at redemption value
2,005

 
1,779

 
3,784

 

 

 

 
(95
)
 
(3,689
)
 

 
(3,784
)
 

 
(3,784
)
Balance, June 30, 2014
$
6,136

 
$
30,404

 
$
36,540

 
25,050

 
199,635

 
$
565,212

 
$
9,636

 
$
939,186

 
$
7,869

 
$
1,521,903

 
$
17,395

 
$
1,539,298





13

Table of Contents

CBL & Associates Limited Partnership
Condensed Consolidated Statements of Capital
(in thousands)
(Unaudited)
(Continued)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Redeemable Interests
 
Number of
 
 
 
Common Units
 
 
 
 
 
 
 
 
 
Redeemable Noncontrolling Interests
 
Redeemable
Common
Units
 
Total
Redeemable
Interests
 
Preferred
Units
 
Common
Units
 
Preferred
Units
 
General
Partner
 
Limited
Partners
 
Accumulated
Other
Comprehensive
Income (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
1,668

 
593

 
2,261

 

 

 
22,446

 
781

 
75,357

 

 
98,584

 
691

 
99,275

Other comprehensive loss

 
(375
)
 
(375
)
 

 

 

 

 

 
(15,013
)
 
(15,013
)
 

 
(15,013
)