CBL & Associates Properties Reports Results for Fourth Quarter and Full Year 2014 - CBL & Associates (NYSE:CBL)

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--

CBL & Associates Properties, Inc. CBL:

Same-center NOI increased 2.9% and 2.4% for the fourth quarter and year ended December 31, 2014, respectively over the prior-year periods.
2014 FFO per diluted share, as adjusted, grew 6.3% to $0.67 in the fourth quarter 2014 and 2.7% to $2.28 for 2014, compared with the prior-year periods.
Average gross rent per square foot increased 12.6% for stabilized mall leases signed in the fourth quarter 2014 and full-year 2014 over the prior rate.
Same-center stabilized mall occupancy at December 31, 2014 remained high at 94.8%, flat with the prior year-end.
Same-center sales per square foot increased 3.9% for the fourth quarter 2014 and declined 0.3% for 2014.
In the fourth quarter 2014, CBL's Board of Directors declared an 8.2% increase in the quarterly cash dividend for the Company's Common Stock to $0.265 per share.

CBL & Associates Properties, Inc. CBL announced results for the fourth quarter and year ended December 31, 2014. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure is located at the end of this news release.


	Three Months Ended December 31,				Year Ended December 31,
	2014		2013		2014		2013
Funds from Operations ("FFO") per diluted share	$	0.82	$	0.63	$	2.73	$	2.23
FFO, as adjusted, per diluted share ⁽¹⁾	$	0.67	$	0.63	$	2.28	$	2.22

(1) FFO, as adjusted, for the three months ended December 31, 2014 excludes a $7.0 million partial litigation settlement, net of related expenses, and a $23.8 million gain on extinguishment of debt, net of default interest expense, related to the conveyance of Columbia Place to the lender. FFO, as adjusted, for the year ended December 31, 2014 excludes an $83.2 million gain on extinguishment of debt, net of non-cash default interest expense, primarily related to the conveyance of Chapel Hill Mall and Columbia Place and the foreclosure of Citadel Mall. It also excludes a partial litigation settlement of $7.8 million, net of related expenses. FFO, as adjusted, for the year ended December 31, 2013, excludes a $9.1 million loss on extinguishment of debt, a $2.4 million gain on investment and an $8.2 million partial litigation settlement.

"We are pleased to end 2014 with such strong performance, achieving the high end of our guidance range for same-center NOI growth and FFO as well as double-digit lease spreads," said Stephen Lebovitz, president and CEO of CBL & Associates Properties, Inc. "We are not resting on these significant accomplishments with goals for 2015 of sustaining our momentum, investing to grow our core portfolio and disposing of non-core and mature properties.

"We are making positive headway on our disposition program, with a number of transactions in various stages, including a newly executed contract on Triangle Town Center and Place. While we are cautious not to make preliminary announcements, the level of disposition activity we are involved in is encouraging and we look forward to communicating additional progress."

Net income attributable to common shareholders for the fourth quarter 2014 was $65.3 million, or $0.38 per diluted share, compared with a net loss of $2.4 million, or a loss of $0.01 per diluted share for the fourth quarter 2013. Net income in the fourth quarter 2014 included a $23.8 million gain on extinguishment of debt, net of non-cash default interest expense, related to the conveyance of Columbia Place Mall to the lender. Net income in the fourth quarter 2013 included a $49.0 million loss on impairment.

Net income attributable to common shareholders for 2014 was $174.3 million, or $1.02 per diluted share, compared with net income of $40.3 million, or $0.24 per diluted share for 2013. Net income for 2014 included an $83.2 million gain on extinguishment of debt, net of default interest expense, compared with a $9.1 million loss on extinguishment of debt related to the early retirement of two loans in the prior year. Net income for 2014 also included a $17.9 million loss on impairment of real estate compared with $70.0 million in the prior year.


Percentage change in same-center Net Operating Income ("NOI")⁽¹⁾:

	Three Months Ended December 31,	Year Ended December 31,
	2014	2014
Portfolio same-center NOI	2.9%	2.4%
Mall same-center NOI	2.6%	2.3%

⁽¹⁾ CBL's definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items of straight line rents and net amortization of acquired above and below market leases. NOI is for real estate properties and excludes income of the Company's subsidiary that provides maintenance, janitorial and security services.

MAJOR ITEMS IMPACTING SAME-CENTER NOI RESULTS FOR THE FOURTH QUARTER 2014

Top line revenue benefited from a $2.8 million increase in minimum rents and a $1.9 million increase in tenant reimbursements primarily due to contributions from double-digit lease spreads as well as an increase in other rents, including sponsorship and branding income.
Percentage rents declined by $0.4 million during the fourth quarter 2014 compared with the prior-year period.
Maintenance and repair expenses declined $0.8 million, primarily due to a decline of $0.4 million in snow removal expenditures and a decline of $0.4 million in parking lot repairs and equipment maintenance in the fourth quarter 2014 compared with the prior-year period.
Operating expenses were $1.2 million lower in the fourth quarter 2014 compared with the prior-year period, primarily due to a $0.5 million positive variance in bad debt expense, a $0.4 million decline in utility and central energy expense and a $0.4 million decline in insurance expense.
Real estate taxes were $1.1 million higher in the fourth quarter compared with the prior-year period.

MAJOR ITEMS IMPACTING SAME-CENTER NOI RESULTS FOR 2014

Top line revenues for 2014 benefited from a $13.4 million increase in minimum rent, a $4.1 million increase in tenant reimbursements and a $0.6 million increase in other rents, including sponsorship and branding, partially offset by a $1.5 million decline in other revenues primarily due to litigation settlement income received in the prior year.
Percentage rents declined by $1.9 million during 2014 compared with the prior year primarily due to the 0.3% decline in sales for the full year.
Maintenance and repair expenses were relatively flat in 2014, primarily due to a decline in maintenance and supplies offset by an increase of $1.0 million in snow removal expenditures compared with 2013.
Operating expenses were $2.2 million lower in 2014 compared with 2013 primarily due to lower insurance, security and legal/consulting expense compared with the prior year, partially offset by a $0.7 million increase in bad debt expense.
Real estate taxes increased $0.6 million in 2014.

PORTFOLIO OPERATIONAL RESULTS


Occupancy:

		As of December 31,
		2014	2013
	Portfolio occupancy	94.7%	94.7%
	Mall portfolio	94.9%	94.9%
	Same-center stabilized malls	94.8%	94.8%
	Stabilized malls	94.8%	94.7%
	Non-stabilized malls ⁽¹⁾	98.1%	98.0%
	Associated centers	93.7%	94.5%
	Community centers	97.4%	96.7%

(1)	Includes The Outlet Shoppes at Oklahoma City, The Outlet Shoppes at Atlanta and The Outlet Shoppes of the Bluegrass as of December 31, 2014. Includes The Outlet Shoppes at Oklahoma City and The Outlet Shoppes at Atlanta as of December 31, 2013.


New and Renewal Leasing Activity of Same Small Shop Space Less Than 10,000 Square Feet:


		% Change in Average Gross Rent Per Square Foot
		Three Months Ended December 31,	Year Ended December 31,
		2014	2014
	Stabilized Malls	12.6%	12.6%
	New leases	30.4%	29.6%
	Renewal leases	8.0%	7.1%


Same-Center Sales Per Square Foot for Mall Tenants 10,000 Square Feet or Less:

		Year Ended December 31,
		2014		2013		% Change
	Stabilized mall same-center sales per square foot	$	360	$	361	(0.3)%

DIVIDEND

In November 2014, CBL's Board of Directors declared an 8.2% increase in the quarterly cash dividend for the Company's Common Stock to $0.265 per share for the quarter ending December 31, 2014. The increased quarterly dividend represents an annualized dividend rate of $1.06 per share compared with the previous annualized dividend rate of $0.98 per share. The dividend was payable on January 15, 2015, to shareholders of record as of December 30, 2014.

DISPOSITION ACTIVITY

In 2014, CBL completed the sale of one enclosed regional mall, a community center and an associated center expansion for an aggregate price of $18.6 million.

CBL currently has one community center under contract for sale for $22.8 million. Due diligence has expired and the buyer has committed funds in escrow. CBL anticipates closing on the sale in the second quarter, subject to customary closing conditions and approval of the loan assumption by the lender.

CBL and its 50/50 joint venture partner, The R.E. Jacobs Group, executed a contract to sell Triangle Town Center and Triangle Town Place for $181.0 million to a new partnership between CBL and an institutional investor. Following the close of the transaction, the investor will own 85% of the assets with CBL retaining 15% ownership and providing leasing and management services. The transaction is expected to close in the third quarter 2015, subject to the assumption of the $175.1 million loan secured by Triangle Town Center and Place and other customary closing conditions.

In 2014, CBL announced that it had entered into a contract to sell a mall and its associated center. In January 2015, CBL terminated the pending contract due to non-performance of the buyer. CBL is currently negotiating a contract on the mall with a new buyer, and is marketing the associated center separately.

CBL has additional transactions in various stages and will provide additional information in its conference call.

FINANCING ACTIVITY

During 2014 CBL retired more than $285.0 million of consolidated property-specific loans, adding more than $470.5 million of undepreciated book value to its unencumbered pool. Currently 36.2% of CBL's consolidated NOI is generated by unencumbered assets.

During the fourth quarter, CBL retired the $113.4 million loan secured by Mall del Norte in Laredo, TX, the $2.5 million loan secured by Janesville Mall in Janesville, WI and the $47.7 million loan secured by the community center, The Promenade in D'Iberville, MS, using availability under its lines of credit.

In October 2014, CBL's majority-owned operating partnership subsidiary completed a $300 million offering of 4.6% Senior Notes Due 2024 under its existing shelf registration statement, representing a 65 basis point (bps) improvement in rate from its inaugural offering.

In October, CBL completed the conveyance of Columbia Place in Columbia, SC, to the lender in lieu of foreclosure. The resulting $23.8 million gain on extinguishment of debt, net of default interest expense, was recorded in the fourth quarter 2014.

In November, CBL closed on a $77.5 million ($50.4 million at CBL's share) non-recourse loan secured by The Outlet Shoppes of the Bluegrass. The ten-year loan bears interest at 4.045%. A portion of the proceeds from the loan were used to retire the $42.3 million construction loan utilized for the development of the property.

In January 2015, CBL completed an amendment to its $50.0 million unsecured term loan, reducing the borrowing rate by 35 bps to 155 bps over LIBOR. No other terms of the loan changed.

OUTLOOK AND GUIDANCE

The Company is providing 2015 FFO guidance in the range of $2.24 - $2.31 per share. CBL is assuming same-center NOI growth of 0% - 2.0% in 2015. The low end of the guidance range for FFO and NOI includes a provision of $10.0 million for lost income from bankruptcies and store closures as a result of increased retailer bankruptcy announcements to-date. This provision is reduced proportionally by lease-up assumptions to achieve the top end of guidance.

As is the Company's normal practice, the guidance excludes future unannounced acquisition or disposition activity. While CBL maintains an active disposition program, the impact of the program on annual results will vary with the timing and scale of potential dispositions and available reinvestment opportunities. Therefore, the Company believes it is more meaningful to provide a guidance range excluding the impact of potential transactions.

The guidance also assumes the following:

$2.0 million to $4.0 million of outparcel sales;
0-25 basis point increase in total portfolio occupancy as well as stabilized mall occupancy throughout 2015;
No unannounced capital markets activity


	Low			High
Expected diluted earnings per common share	$	0.67		$	0.74
Adjust to fully converted shares from common shares	(0.09		)	(0.10		)
Expected earnings per diluted, fully converted common share	0.58			0.64
Add: depreciation and amortization	1.59			1.59
Add: noncontrolling interest in earnings of Operating Partnership	0.10			0.11
Adjustment for litigation settlement	(0.03		)	(0.03		)
Expected FFO per diluted, fully converted common share	$	2.24		$	2.31

INVESTOR CONFERENCE CALL AND WEBCAST

CBL & Associates Properties, Inc. will conduct a conference call at 11:00 a.m. ET on Wednesday, February 4, 2015, to discuss its fourth quarter and full year results. The number to call for this interactive teleconference is (800) 736-4594 or (212) 231-2902. A replay of the conference call will be available through February 12, 2015, by dialing (800) 633-8284 or (402) 977-9140 and entering the confirmation number 21706211. A transcript of the Company's prepared remarks will be furnished on a Form 8-K following the conference call.

To receive the CBL & Associates Properties, Inc., fourth quarter and full year earnings release and supplemental information please visit the Investing section of our website at cblproperties.com or contact Investor Relations at 423-490-8312.

The Company will also provide an online webcast and rebroadcast of its 2014 fourth quarter and full year earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Wednesday, February 4, 2015 beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for one year.

ABOUT CBL & ASSOCIATES PROPERTIES, INC.

CBL is one of the largest and most active owners and developers of malls and shopping centers in the United States. CBL owns, holds interests in or manages 147 properties, including 89 regional malls/open-air centers. The properties are located in 30 states and total 84.4 million square feet including 6.5 million square feet of non-owned shopping centers managed for third parties. Headquartered in Chattanooga, TN, CBL has regional offices in Boston (Waltham), MA, Dallas (Irving), TX, and St. Louis, MO. Additional information can be found at cblproperties.com.

NON-GAAP FINANCIAL MEASURES

Funds From Operations

FFO is a widely used measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of depreciable operating properties and impairment losses of depreciable properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO allocable to common shareholders as defined above by NAREIT less dividends on preferred stock. The Company's method of calculating FFO allocable to its common shareholders may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

The Company believes that FFO provides an additional indicator of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, the Company believes that FFO enhances investors' understanding of its operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of the Company's properties and interest rates, but also by its capital structure. The Company presents both FFO of its Operating Partnership and FFO allocable to its common shareholders, as it believes that both are useful performance measures. The Company believes FFO of its Operating Partnership is a useful performance measure since it conducts substantially all of its business through its Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of the Company's common shareholders and the noncontrolling interest in the Operating Partnership. The Company believes FFO allocable to its common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income (loss) attributable to its common shareholders.

In the reconciliation of net income attributable to the Company's common shareholders to FFO allocable to its common shareholders, located in this earnings release, the Company makes an adjustment to add back noncontrolling interest in income (loss) of its Operating Partnership in order to arrive at FFO of its Operating Partnership. The Company then applies a percentage to FFO of its Operating Partnership to arrive at FFO allocable to its common shareholders. The percentage is computed by taking the weighted average number of common shares outstanding for the period and dividing it by the sum of the weighted average number of common shares and the weighted average number of Operating Partnership units held by noncontrolling interests during the period.

FFO does not represent cash flows from operations as defined by accounting principles generally accepted in the United States, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income (loss) for purposes of evaluating the Company's operating performance or to cash flow as a measure of liquidity.

As described above, during 2014, the Company recognized an $83.2 million of gain on the extinguishment of debt, net of non-cash default interest expense, in connection with the conveyance of Chapel Hill Mall and Columbia Place to the respective lenders and the foreclosure of Citadel Mall, and received income of $7.8 million, net of related expenses, as partial settlements of ongoing litigation. During 2013, the Company received income of $8.2 million as a partial settlement of ongoing litigation, recorded $2.4 million of gain on investment and $9.1 million of loss on extinguishment of debt. Considering the significance and nature of these items, the Company believes that it is important to identify their impact on its FFO measures for a reader to have a complete understanding of the Company's results of operations. Therefore, the Company has also presented adjusted FFO measures excluding these items from the applicable periods.

Same-Center Net Operating Income

NOI is a supplemental measure of the operating performance of the Company's shopping centers and other properties. The Company defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income) less property operating expenses (property operating, real estate taxes and maintenance and repairs).

Similar to FFO, the Company computes NOI based on its pro rata share of both consolidated and unconsolidated properties. The Company's definition of NOI may be different than that used by other companies and, accordingly, the Company's NOI may not be comparable to that of other companies.

Since NOI includes only those revenues and expenses related to the operations of its shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates and operating costs and the impact of those trends on the Company's results of operations. The Company's calculation of same-center NOI also excludes lease termination income, straight-line rent adjustments, and amortization of above and below market lease intangibles in order to enhance the comparability of results from one period to another, as these items can be impacted by one-time events that may distort same-center NOI trends and may result in same-center NOI that is not indicative of the ongoing operations of the Company's shopping center and other properties. A reconciliation of same-center NOI to net income is located at the end of this earnings release.

Pro Rata Share of Debt

The Company presents debt based on its pro rata ownership share (including the Company's pro rata share of unconsolidated affiliates and excluding noncontrolling interests' share of consolidated properties) because it believes this provides investors a clearer understanding of the Company's total debt obligations which affect the Company's liquidity. A reconciliation of the Company's pro rata share of debt to the amount of debt on the Company's consolidated balance sheet is located at the end of this earnings release.

Information included herein contains “forward-looking statements” within the meaning of the federal securities laws. Such statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual events, financial and otherwise, may differ materially from the events and results discussed in the forward-looking statements. The reader is directed to the Company's various filings with the Securities and Exchange Commission, including without limitation the Company's Annual Report on Form 10-K, and the “Management's Discussion and Analysis of Financial Condition and Results of Operations” included therein, for a discussion of such risks and uncertainties.


CBL & Associates Properties, Inc.
Consolidated Statements of Operations
(Unaudited; in thousands, except per share amounts)

	Three Months Ended December 31,						Year Ended December 31,
	2014			2013			2014			2013
REVENUES:
Minimum rents	$	176,579		$	177,237		$	682,584		$	675,870
Percentage rents	8,386			8,724			16,876			18,572
Other rents	8,606			8,472			22,314			21,974
Tenant reimbursements	76,239			76,573			290,561			290,097
Management, development and leasing fees	3,810			3,396			12,986			12,439
Other	10,229			7,607			35,418			34,673
Total revenues	283,849			282,009			1,060,739			1,053,625
OPERATING EXPENSES:
Property operating	37,568			39,956			149,774			151,127
Depreciation and amortization	79,093			72,797			291,273			278,911
Real estate taxes	23,643			22,289			89,281			88,701
Maintenance and repairs	13,451			15,573			54,842			56,379
General and administrative	14,688			12,407			50,271			48,867
Loss on impairment	105			49,011			17,858			70,049
Other	10,966			7,608			32,297			28,826
Total operating expenses	179,514			219,641			685,596			722,860
Income from operations	104,335			62,368			375,143			330,765
Interest and other income	10,586			628			14,121			10,825
Interest expense	(59,827		)	(58,482		)	(239,824		)	(231,856		)
Gain (loss) on extinguishment of debt	26,951			—			87,893			(9,108		)
Gain on investment	—			—			—			2,400
Equity in earnings of unconsolidated affiliates	3,765			3,998			14,803			11,616
Income tax provision	(233		)	(451		)	(4,499		)	(1,305		)
Income from continuing operations before gain on sales of real estate assets	85,577			8,061			247,637			113,337
Gain on sales of real estate assets	1,829			922			5,342			1,980
Income from continuing operations	87,406			8,983			252,979			115,317
Operating income (loss) of discontinued operations	258			(896		)	(222		)	(6,091		)
Gain (loss) on discontinued operations	188			(18		)	276			1,144
Net income	87,852			8,069			253,033			110,370
Net (income) loss attributable to noncontrolling interests in:
Operating Partnership	(11,259		)	477			(30,106		)	(7,125		)
Other consolidated subsidiaries	(37		)	297			(3,777		)	(18,041		)
Net income attributable to the Company	76,556			8,843			219,150			85,204
Preferred dividends	(11,223		)	(11,223		)	(44,892		)	(44,892		)
Net income (loss) attributable to common shareholders	$	65,333		$	(2,380	)	$	174,258		$	40,312

Basic and diluted per share data attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends	$	0.38		$	(0.01	)	$	1.02		$	0.27
Discontinued operations	0.00			0.00			0.00			(0.03		)
Net income (loss) attributable to common shareholders	$	0.38		$	(0.01	)	$	1.02		$	0.24
Weighted average common shares outstanding	170,261			169,930			170,247			167,027


Amounts attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends	$	64,952		$	(1,602	)	$	174,212		$	44,515
Discontinued operations	381			(778		)	46			(4,203		)
Net income (loss) attributable to common shareholders	$	65,333		$	(2,380	)	$	174,258		$	40,312


The Company's calculation of FFO allocable to its shareholders is as follows:
(in thousands, except per share data)

	Three Months Ended December 31,						Year Ended December 31,
	2014			2013			2014			2013
Net income (loss) attributable to common shareholders	$	65,333		$	(2,380	)	$	174,258		$	40,312
Noncontrolling interest in income (loss) of Operating Partnership	11,259			(477		)	30,106			7,125
Depreciation and amortization expense of:
Consolidated properties	79,093			72,797			291,273			278,911
Unconsolidated affiliates	11,152			9,844			41,806			39,592
Discontinued operations	—			—			—			6,638
Non-real estate assets	(486		)	(547		)	(2,311		)	(2,077		)
Noncontrolling interests' share of depreciation and amortization	(2,011		)	(1,589		)	(6,842		)	(5,881		)
Loss on impairment, net of tax benefit	—			47,213			18,434			73,485
(Gain) loss on depreciable property	—			3			(937		)	(7		)
(Gain) loss on discontinued operations, net of taxes	(187		)	67			(273		)	(647		)
Funds from operations of the Operating Partnership	164,153			124,931			545,514			437,451
Litigation settlement, net of related expenses	(6,963		)	—			(7,763		)	(8,240		)
Gain on investment	—			—			—			(2,400		)
Non cash default interest expense	3,181			—			4,695			—
(Gain) loss on extinguishment of debt	(26,951		)	—			(87,893		)	9,108
Funds from operations of the Operating Partnership, as adjusted	$	133,420		$	124,931		$	454,553		$	435,919

Funds from operations per diluted share	$	0.82		$	0.63		$	2.73		$	2.23

Funds from operations, as adjusted, per diluted share	$	0.67		$	0.63		$	2.28		$	2.22

Weighted average common and potential dilutive common shares outstanding with operating partnership units fully converted	199,543			199,476			199,660			196,572

Reconciliation of FFO of the Operating Partnership to FFO allocable to common shareholders:
Funds from operations of the Operating Partnership	$	164,153		$	124,931		$	545,514		$	437,451
Percentage allocable to common shareholders ⁽¹⁾	85.33		%	85.19		%	85.27		%	84.97		%
Funds from operations allocable to common shareholders	$	140,072		$	106,429		$	465,160		$	371,702

Funds from operations of the Operating Partnership, as adjusted	$	133,420		$	124,931		$	454,553		$	435,919
Percentage allocable to common shareholders⁽¹⁾	85.33		%	85.19		%	85.27		%	84.97		%
Funds from operations allocable to common shareholders, as adjusted	$	113,847		$	106,429		$	387,597		$	370,400

(1) Represents the weighted average number of common shares outstanding for the period divided by the sum of the weighted average number of common shares and the weighted average number of operating partnership units outstanding during the period. See the reconciliation of shares and operating partnership units outstanding on page 11.


SUPPLEMENTAL FFO INFORMATION:
Lease termination fees	$	1,413		$	792		$	3,808		$	4,217
Lease termination fees per share	$	0.01		$	—		$	0.02		$	0.02

Straight-line rental income	$	(352	)	$	1,110		$	2,132		$	1,191
Straight-line rental income per share	$	—		$	0.01		$	0.01		$	0.01

Gains on outparcel sales	$	2,774		$	923		$	5,235		$	1,958
Gains on outparcel sales per share	$	0.01		$	—		$	0.03		$	0.01

Net amortization of acquired above- and below-market leases	$	683		$	295		$	1,227		$	1,566
Net amortization of acquired above- and below-market leases per share	$	—		$	—		$	0.01		$	0.01

Net amortization of debt premiums and discounts	$	547		$	(1,162	)	$	2,172		$	553
Net amortization of debt premiums and discounts per share	$	—		$	(0.01	)	$	0.01		$	—

Income tax provision	$	(233	)	$	(451	)	$	(4,499	)	$	(1,305	)
Income tax provision per share	$	—		$	—		$	(0.02	)	$	(0.01	)

Abandoned projects expense	$	55		$	193		$	136		$	334
Abandoned projects expense per share	$	—		$	—		$	—		$	—

Gain (loss) on extinguishment of debt	$	26,951		$	—		$	87,893		$	(9,108	)
Gain (loss) on extinguishment of debt per share	$	0.14		$	—		$	0.44		$	(0.05	)

Non cash default interest expense	$	(3,181	)	$	—		$	(4,695	)	$	—
Non cash default interest expense per share	$	(0.02	)	$	—		$	(0.02	)	$	—

Gain on investment	$	—		$	—		$	—		$	2,400
Gain on investment per share	$	—		$	—		$	—		$	0.01

Litigation settlement, net of related expenses	$	6,963		$	—		$	7,763		$	8,240
Litigation settlement, net of related expenses, per share	$	0.03		$	—		$	0.04		$	0.04

Interest capitalized	$	2,576		$	1,205		$	7,288		$	4,411
Interest capitalized per share	$	0.01		$	0.01		$	0.04		$	0.02

							As of December 31,
							2014			2013
Straight-line rent receivable							$	63,731		$	62,611


	Same-Center Net Operating Income
	(Dollars in thousands)

		Three Months Ended December 31,						Year Ended December 31,
		2014			2013			2014			2013
	Net income attributable to the Company	$	76,556		$	8,843		$	219,150		$	85,204

	Adjustments:
	Depreciation and amortization	79,093			72,797			291,273			278,911
	Depreciation and amortization from unconsolidated affiliates	11,152			9,844			41,806			39,592
	Depreciation and amortization from discontinued operations	—			—			—			6,638
	Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries	(2,011		)	(1,589		)	(6,842		)	(5,881		)
	Interest expense	59,827			58,482			239,824			231,856
	Interest expense from unconsolidated affiliates	9,586			9,723			38,458			39,399
	Interest expense from discontinued operations	—			—			—			1
	Noncontrolling interests' share of interest expense in other consolidated subsidiaries	(1,620		)	(1,384		)	(5,613		)	(4,413		)
	Abandoned projects expense	55			193			136			334
	Gain on sales of real estate assets	(1,829		)	(922		)	(5,342		)	(1,980		)
	Gain on sales of real estate assets of unconsolidated affiliates	(289		)	(11		)	(987		)	(22		)
	Gain on investment	—			—			—			(2,400		)
	(Gain) loss on extinguishment of debt	(26,951		)	—			(87,893		)	9,108
	Loss on impairment	105			49,011			17,858			70,049
	Loss on impairment from discontinued operations	—			—			681			5,234
	Income tax provision	233			451			4,499			1,305
	Lease termination fees	(1,413		)	(792		)	(3,808		)	(4,217		)
	Straight-line rent and above- and below-market lease amortization	(331		)	(83		)	(3,359		)	(1,502		)
	Net income (loss) attributable to noncontrolling interest in earnings of Operating Partnership	11,259			(477		)	30,106			7,125
	(Gain) loss on discontinued operations	(188		)	18			(276		)	(1,144		)
	General and administrative expenses	14,688			12,407			50,271			48,867
	Management fees and non-property level revenues	(16,137		)	(8,029		)	(36,386		)	(23,552		)
	Company's share of property NOI	211,785			208,482			783,556			778,512
	Non-comparable NOI	(16,499		)	(18,623		)	(63,968		)	(75,492		)
	Total same-center NOI ⁽¹⁾	$	195,286		$	189,859		$	719,588		$	703,020
	Total same-center NOI percentage change	2.9		%				2.4		%

	Malls	$	179,900		$	175,416		$	659,781		$	645,157
	Associated centers	8,336			7,892			32,077			31,124
	Community centers	5,153			4,731			19,802			19,345
	Offices and other	1,897			1,820			7,928			7,394
	Total same-center NOI ⁽¹⁾	$	195,286		$	189,859		$	719,588		$	703,020

	Percentage Change:
	Malls	2.6		%				2.3		%
	Associated centers	5.6		%				3.1		%
	Community centers	8.9		%				2.4		%
	Offices and other	4.2		%				7.2		%
	Total same-center NOI⁽¹⁾	2.9		%				2.4		%

(1)	CBL defines NOI as property operating revenues (rental revenues, tenant reimbursements and other income), less property operating expenses (property operating, real estate taxes and maintenance and repairs). Same-center NOI excludes lease termination income, straight-line rent adjustments, and amortization of above and below market lease intangibles. Same-center NOI is for real estate properties and does not include the results of operations of the Company's subsidiary that provides janitorial, security and maintenance services. We include a property in our same-center pool when we own all or a portion of the property as of December 31, 2014, and we owned it and it was in operation for both the entire preceding calendar year and the current year-to-date reporting period ending December 31, 2014. The only properties excluded from the same center pool that would otherwise meet this criteria are non-core properties, properties under major redevelopment, properties where we intend to renegotiate the terms of the debt secured by the related property and properties included in discontinued operations.


Company's Share of Consolidated and Unconsolidated Debt
(Dollars in thousands)

	As of December 31, 2014
	Fixed Rate			Variable Rate			Total
Consolidated debt	$	4,004,064		$	696,396		$	4,700,460
Noncontrolling interests' share of consolidated debt	(115,390		)	(7,083		)	(122,473		)
Company's share of unconsolidated affiliates' debt	671,526			96,776			768,302
Company's share of consolidated and unconsolidated debt	$	4,560,200		$	786,089		$	5,346,289
Weighted average interest rate	5.37		%	1.75		%	4.84		%

	As of December 31, 2013
	Fixed Rate			Variable Rate			Total
Consolidated debt	$	3,990,774		$	866,749		$	4,857,523
Noncontrolling interests' share of consolidated debt	(87,406		)	(5,669		)	(93,075		)
Company's share of unconsolidated affiliates' debt	653,429			89,111			742,540
Company's share of consolidated and unconsolidated debt	$	4,556,797		$	950,191		$	5,506,988
Weighted average interest rate	5.48		%	1.94		%	4.87		%


Debt-To-Total-Market Capitalization Ratio as of December 31, 2014
(In thousands, except stock price)

	Shares Outstanding			Stock Price ⁽¹⁾			Value
Common stock and Operating Partnership units	199,533			$	19.42		$	3,874,931
7.375% Series D Cumulative Redeemable Preferred Stock	1,815			250.00			453,750
6.625% Series E Cumulative Redeemable Preferred Stock	690			250.00			172,500
Total market equity							4,501,181
Company's share of total debt							5,346,289
Total market capitalization							$	9,847,470
Debt-to-total-market capitalization ratio							54.3		%

(1) Stock price for common stock and operating partnership units equals the closing price of the common stock on December 31, 2014. The stock prices for the preferred stocks represent the liquidation preference of each respective series.


Reconciliation of Shares and Operating Partnership Units Outstanding
(In thousands)

	Three Months Ended December 31,						Year Ended December 31,
2014:	Basic			Diluted			Basic			Diluted
Weighted average shares - EPS	170,261			170,261			170,247			170,247
Weighted average operating partnership units	29,282			29,282			29,413			29,413
Weighted average shares- FFO	199,543			199,543			199,660			199,660

2013:
Weighted average shares - EPS	169,930			169,930			167,027			167,027
Weighted average operating partnership units	29,546			29,546			29,545			29,545
Weighted average shares- FFO	199,476			199,476			196,572			196,572
Dividend Payout Ratio
	Three Months Ended December 31,						Year Ended December 31,
	2014			2013			2014			2013
Weighted average cash dividend per share	$	0.27280		$	0.25313		$	1.03218		$	0.96853
FFO as adjusted, per diluted fully converted share	$	0.67		$	0.63		$	2.28		$	2.22
Dividend payout ratio	40.7		%	40.2		%	45.3		%	43.6		%


Consolidated Balance Sheets
(Unaudited; in thousands, except share data)

	As of December 31,
	2014			2013
ASSETS
Real estate assets:
Land	$	847,829		$	858,619
Buildings and improvements	7,221,387			7,125,512
	8,069,216			7,984,131
Accumulated depreciation	(2,240,007		)	(2,056,357		)
	5,829,209			5,927,774
Developments in progress	117,966			139,383
Net investment in real estate assets	5,947,175			6,067,157
Cash and cash equivalents	37,938			65,500
Receivables:
Tenant, net of allowance for doubtful accounts of $2,368 and $2,379 in 2014 and 2013, respectively	81,338			79,899
Other, net of allowance for doubtful accounts of $1,285 and $1,241 in 2014 and 2013, respectively	22,577			23,343
Mortgage and other notes receivable	19,811			30,424
Investments in unconsolidated affiliates	281,449			277,146
Intangible lease assets and other assets	226,011			242,502
	$	6,616,299		$	6,785,971

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness	$	4,700,460		$	4,857,523
Accounts payable and accrued liabilities	328,352			333,875
Total liabilities	5,028,812			5,191,398
Commitments and contingencies
Redeemable noncontrolling partnership interests	37,559			34,639
Shareholders' equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized:
7.375% Series D Cumulative Redeemable Preferred Stock, 1,815,000 shares outstanding	18			18
6.625% Series E Cumulative Redeemable Preferred Stock, 690,000 shares outstanding	7			7
Common stock, $.01 par value, 350,000,000 shares authorized, 170,260,273 and 170,048,144 issued and outstanding in 2014 and 2013, respectively	1,703			1,700
Additional paid-in capital	1,958,198			1,967,644
Accumulated other comprehensive income	13,411			6,325
Dividends in excess of cumulative earnings	(566,785		)	(570,781		)
Total shareholders' equity	1,406,552			1,404,913
Noncontrolling interests	143,376			155,021
Total equity	1,549,928			1,559,934
	$	6,616,299		$	6,785,971

CBL & Associates Properties, Inc.
Katie Reinsmidt, 423-490-8301
Senior Vice President - Investor Relations/Corporate Investments
katie_reinsmidt@cblproperties.com

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