CBL & Associates Properties Reports Results for Second Quarter 2017

CBL & Associates Properties, Inc. CBL announced results for the second quarter ended June 30, 2017. A description of each supplemental non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure is located at the end of this news release.


		Three Months Ended June 30,						Six Months Ended June 30,
		2017		2016		%		2017		2016		%
	Net income attributable to common shareholders per diluted share	$	0.18	$	0.30	(40.0	)%	$	0.31	$	0.47	(34.0	)%
	Funds from Operations ("FFO") per diluted share	$	0.58	$	0.73	(20.5	)%	$	1.12	$	1.41	(20.6	)%
	FFO, as adjusted, per diluted share ⁽¹⁾	$	0.50	$	0.59	(15.3	)%	$	1.02	$	1.15	(11.3	)%
(1)	For a reconciliation of FFO to FFO, as adjusted, for the periods presented, please refer to the footnotes to the Company's reconciliation of net income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 8 of this earnings release.

HIGHLIGHTS:

FFO per diluted share, as adjusted, was $0.50 for the second quarter 2017, compared with $0.59 per share for the second quarter 2016. Second quarter 2017 was impacted by approximately $0.04 per share of dilution from asset sales and $0.03 per share of abandoned projects expense related to the write-off of several new development projects CBL has elected not to pursue.
Additional progress on our disposition program included the sale of two malls, an outlet center and two office buildings year-to-date, generating net proceeds of approximately $100 million. In August, CBL entered into a binding contract for the sale of its remaining 25% interest in River Ridge Mall to its joint venture partner for $9.0 million.
Closed on the extension and modification of two unsecured term loans.
Total Portfolio Same-center NOI declined 1.3% for the second quarter 2017 and 1.0% for the six months ended June 30, 2017.
Portfolio occupancy declined 100 basis points to 91.6% compared with 92.6% as of June 30, 2016, and same-center mall occupancy declined 140 basis points to 90.6% as of June 30, 2017, compared with 92.0% as of June 30, 2016.
Year-to-date through June 30, 2017, CBL has executed nearly two million square feet of leases. On a comparable basis for spaces under 10,000 square feet in the stabilized mall portfolio, CBL executed nearly one million square feet of leases at an average gross rent per square foot increase of 0.6%, including a 13.5% increase for new leases executed in the period.

"Taking into account the difficult retail environment, second quarter operating results were in-line with expectations, but still disappointing," said Stephen Lebovitz, CBL's president & CEO. "Our priority through the remainder of the year is maintaining and improving occupancy and income as we focus on reinventing our market dominant properties. We are bringing in more productive uses that appeal to today's consumer preferences and driving increased traffic and sales. This quarter, we made the decision to write-off several potential new development projects so that we can concentrate on our program of anchor store redevelopments and the reinvention of our properties.

"We are pleased with the progress we've made in strengthening our balance sheet. As announced this week, we have successfully extended two bank term loans, demonstrating the ongoing confidence in CBL and our strategy by the lending community. We recently completed our portfolio transformation program with 19 transactions closed, representing over $750 million in value, including the two malls sold this quarter. Proceeds from these sales as well as our outlet center in Oklahoma contributed to total debt reduction of more than $330 million compared with the prior-year quarter. These improvements to our balance sheet provide us with the financial resources to deliver on our redevelopment program and position our properties for long-term success."

Net income attributable to common shareholders for the second quarter 2017 was $30.2 million, or $0.18 per diluted share, compared with net income of $51.7 million, or $0.30 per diluted share, for the second quarter 2016.

FFO allocable to common shareholders, as adjusted, for the second quarter 2017 was $85.6 million, or $0.50 per diluted share, compared with $101.3 million, or $0.59 per diluted share, for the second quarter 2016. FFO allocable to the Operating Partnership common unitholders, as adjusted, for the second quarter 2017 was $99.7 million compared with $118.6 million for the second quarter 2016. FFO, as adjusted, for the second quarter 2017 included $5.0 million, or $0.03 per diluted share, of abandoned project expense related to the write-off of several potential new development projects the Company has elected not to pursue.

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


		Three Months Ended June 30, 2017	Six Months Ended June 30, 2017
	Portfolio same-center NOI	(1.3)%	(1.0)%
	Mall same-center NOI	(2.1)%	(1.7)%

(1)	CBL's definition of same-center NOI excludes the impact of lease termination fees and certain non-cash items of straight-line rents, write-offs of landlord inducements and net amortization of acquired above and below market leases.

Major variances impacting same-center NOI for the quarter ended June 30, 2017, include:

NOI declined $2.3 million, due to a $4.3 million decrease in revenue, partially offset by a $2.0 million decrease in operating expenses.
Minimum rents increased $0.01 million during the quarter.
Percentage rents decreased $0.7 million, impacted by relatively flat sales in the second quarter.
Tenant reimbursements and other rents declined $3.7 million.
Property operating expenses were flat, maintenance and repair expense declined $1.0 million, and real estate tax expenses declined $1.0 million.

PORTFOLIO OPERATIONAL RESULTS


	Occupancy:

		As of June 30,
		2017	2016
	Portfolio occupancy	91.6%	92.6%
	Mall portfolio	90.2%	91.6%
	Same-center malls	90.6%	92.0%
	Stabilized malls	90.5%	91.6%
	Non-stabilized malls ⁽¹⁾	81.8%	92.3%
	Associated centers	95.5%	95.6%
	Community centers	97.0%	96.8%

(1)	Represents occupancy for The Outlet Shoppes at Laredo and The Outlet Shoppes of the Bluegrass as of June 30, 2017, and The Outlet Shoppes at Atlanta and The Outlet Shoppes of the Bluegrass as of June 30, 2016.


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 June 30, 2017		Six Months Ended June 30, 2017
Stabilized Malls	(0.9	)%	0.6	%
New leases	8.1	%	13.5	%
Renewal leases	(3.5	)%	(3.4	)%


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

	Twelve Months Ended June 30,
	2017		2016		% Change
Stabilized mall same-center sales per square foot	$	373	$	382	(2.4)%
Stabilized mall sales per square foot	$	373	$	377	(1.1)%

DISPOSITIONS

CBL has entered into a binding contract for the sale of its remaining 25% interest in River Ridge Mall in Lynchburg, VA, for $9.0 million, cash. Subject to customary conditions, the sale is expected to close during the third quarter 2017. Second quarter results included a $5.3 million loss on investment related to the pending disposition.

As of June 30, 2017, CBL completed the sale of two office buildings, two malls and one outlet center for a gross sales price (at CBL's share) of $157.25 million. Transactions completed in the second quarter included the sale of two malls, College Square in Morristown, TN (2016 sales psf $265) and Foothills Mall in Maryville, TN (2016 sales psf $283), for a total gross sales price of $53.5 million. Additionally, during the second quarter CBL closed on the sale of The Outlet Shoppes at Oklahoma City in Oklahoma City, OK for a gross sales price of $97.5 million (at CBL's share).

FINANCING ACTIVITY

In July, CBL completed the extension and modification of two unsecured term loans expiring in 2018. The first, with a balance of $400 million, was increased to a balance of $490 million until July 2018, when it will be reduced to $300 million for the remainder of its term. New borrowings under this term loan were used to reduce outstanding balances on the Company's unsecured lines of credit. The new term loan has an initial maturity date of July 2020 with two, one-year extension options (the 2nd option is at the lenders' sole discretion), for a final maturity of July 2022. The term loan bears an interest rate of 150 basis points over LIBOR, based on CBL's current investment grade rating of BBB-/Baa3/BBB-. Wells Fargo Bank National Association served as Administrative Agent.

The second unsecured term loan, which currently has a balance of $50 million and was due to mature in February 2018, was modified to a new $45 million term loan. The new loan has an initial maturity date of June 2021, with an additional one-year extension option available at CBL's discretion, for a final maturity of June 2022. The term loan bears interest at a rate of 165 basis points over LIBOR. First Tennessee Bank NA served as Administrative Agent.

In April, the $124.2 million loan secured by Acadiana Mall in Lafayette, LA, matured. CBL has entered into a preliminary agreement with the existing lender to modify the terms of the loan to an A/B note structure and extend the maturity. The principal will be split into a $65 million A-note and a $60 million B-note. Interest will be payable on a current basis on the $65 million A-note. Interest will accrue, payable at maturity, on the $60 million B-note. The loan is expected to be extended to September 2020, with a one-year extension option for a final maturity of September 2021. The interest rate will remain at 5.67%, with amortization payments eliminated. CBL recorded a $43 million impairment of the carrying value of this center in the second quarter.

During the second quarter Chesterfield Mall in Chesterfield, MO, was conveyed to the lender in settlement of the $140 million non-recourse loan secured by the property. CBL recorded a gain on extinguishment of debt of $28.4 million related to the conveyance.

OUTLOOK AND GUIDANCE

CBL is maintaining its previously issued 2017 FFO, as adjusted, guidance in the range of $2.18 - $2.24 per diluted share. This FFO assumes a same-center NOI change in the range of (2.0)% - 0% in 2017.

The guidance also assumes the following:

$10.0 million to $12.0 million in gains on outparcel sales;
75 to 125 basis points lower total portfolio occupancy as well as stabilized mall occupancy at year-end;
G&A expense of $62 million to $64 million for the full year; and
No unannounced capital markets activity.


	Low			High
Expected diluted earnings per common share	$	0.67		$	0.73
Adjust to fully converted shares from common shares	(0.09		)	(0.09		)
Expected earnings per diluted, fully converted common share	0.58			0.64
Add: depreciation and amortization	1.63			1.63
Less: gain on depreciable property	(0.25		)	(0.25		)
Add: loss on impairment	0.23			0.23
Add: noncontrolling interest in earnings of Operating Partnership	0.10			0.10
Expected FFO per diluted, fully converted common share	2.29			2.35
Adjustment for certain significant items	(0.11		)	(0.11		)
Expected adjusted FFO per diluted, fully converted common share	$	2.18		$	2.24

INVESTOR CONFERENCE CALL AND WEBCAST

CBL & Associates Properties, Inc. will conduct a conference call on Friday, August 4, 2017, at 11:00 a.m. ET. To access this interactive teleconference, dial (888) 317-6003 or (412) 317-6061 and enter the confirmation number, 6011729. A replay of the conference call will be available through August 11, 2017, by dialing (877) 344-7529 or (412) 317-0088 and entering the confirmation number, 10107045. 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. second quarter 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 2017 second quarter earnings release conference call. The live broadcast of the quarterly conference call will be available online at cblproperties.com on Friday, August 4, 2017, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call.

ABOUT CBL & ASSOCIATES PROPERTIES, INC.

Headquartered in Chattanooga, TN, 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 121 properties, including 78 regional malls/open-air centers. The properties are located in 27 states and total 75.5 million square feet including 6.3 million square feet of non-owned shopping centers managed for third parties. Additional information can be found at cblproperties.com.

NON-GAAP FINANCIAL MEASURES

Funds From Operations

FFO is a widely used non-GAAP 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 as defined above by NAREIT less dividends on preferred stock of the Company or distributions on preferred units of the Operating Partnership, as applicable. The Company's method of calculating FFO 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 allocable to Operating Partnership common unitholders and FFO allocable to common shareholders, as it believes that both are useful performance measures. The Company believes FFO allocable to Operating Partnership common unitholders 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 (loss) attributable to the Company's common shareholders to FFO allocable to Operating Partnership common unitholders, 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 the Operating Partnership common unitholders. The Company then applies a percentage to FFO of the Operating Partnership common unitholders 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 GAAP, 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.

The Company believes that it is important to identify the impact of certain significant items 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. Please refer to the reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders on page 9 of this earnings release for a description of these adjustments.

Same-center Net Operating Income

NOI is a supplemental non-GAAP 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).

The Company computes NOI based on the Operating Partnership's pro rata share of both consolidated and unconsolidated properties. The Company believes that presenting NOI and same-center NOI (described below) based on its Operating Partnership's pro rata share of both consolidated and unconsolidated properties is useful since the Company 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's definition of NOI may be different than that used by other companies and, accordingly, the Company's calculation of NOI may not be comparable to that of other companies.

Since NOI includes only those revenues and expenses related to the operations of the Company's shopping center properties, the Company believes that same-center NOI provides a measure that reflects trends in occupancy rates, rental rates, sales at the malls and operating costs and the impact of those trends on the Company's results of operations. The Company's calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, amortization of above and below market lease intangibles and write-off of landlord inducement assets in order to enhance the comparability of results from one period to another. 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 condensed 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 June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
REVENUES:
Minimum rents	$	157,609		$	167,216		$	317,359		$	337,845
Percentage rents	1,738			2,692			4,127			7,365
Other rents	3,729			4,819			7,381			9,881
Tenant reimbursements	62,231			70,096			129,522			143,462
Management, development and leasing fees	2,577			4,067			6,029			6,648
Other	1,349			6,075			2,828			12,842
Total revenues	229,233			254,965			467,246			518,043
OPERATING EXPENSES:
Property operating	30,041			31,060			64,955			69,688
Depreciation and amortization	82,509			72,205			153,729			148,711
Real estate taxes	18,687			22,834			40,770			45,862
Maintenance and repairs	11,716			11,790			25,068			26,338
General and administrative	15,752			16,475			31,834			33,643
Loss on impairment	43,203			43,493			46,466			63,178
Other	5,019			5,052			5,019			14,737
Total operating expenses	206,927			202,909			367,841			402,157
Income from operations	22,306			52,056			99,405			115,886
Interest and other income	31			251			1,435			611
Interest expense	(55,065		)	(53,187		)	(111,266		)	(108,418		)
Gain on extinguishment of debt	20,420			—			24,475			6
Loss on investment	(5,843		)	—			(5,843		)	—
Equity in earnings of unconsolidated affiliates	6,325			64,349			11,698			96,739
Income tax benefit	2,920			51			3,720			588
Income (loss) from continuing operations before gain on sales of real estate assets	(8,906		)	63,520			23,624			105,412
Gain on sales of real estate assets	79,533			9,577			85,521			9,577
Net income	70,627			73,097			109,145			114,989
Net (income) loss attributable to noncontrolling interests in:
Operating Partnership	(5,093		)	(8,483		)	(8,783		)	(13,428		)
Other consolidated subsidiaries	(24,138		)	(1,695		)	(24,851		)	1,432
Net income attributable to the Company	41,396			62,919			75,511			102,993
Preferred dividends	(11,223		)	(11,223		)	(22,446		)	(22,446		)
Net income attributable to common shareholders	$	30,173		$	51,696		$	53,065		$	80,547

Basic and diluted per share data attributable to common shareholders:
Net income attributable to common shareholders	$	0.18		$	0.30		$	0.31		$	0.47
Weighted-average common and potential dilutive common shares outstanding	171,095			170,792			171,042			170,731

Dividends declared per common share	$	0.265		$	0.265		$	0.530		$	0.530


The Company's reconciliation of net income attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows:
(in thousands, except per share data)

		Three Months Ended June 30,						Six Months Ended June 30,
		2017			2016			2017			2016
	Net income attributable to common shareholders	$	30,173		$	51,696		$	53,065		$	80,547
	Noncontrolling interest in income of Operating Partnership	5,093			8,483			8,783			13,428
	Depreciation and amortization expense of:
	Consolidated properties	82,509			72,205			153,729			148,711
	Unconsolidated affiliates	9,357			9,156			18,900			18,334
	Non-real estate assets	(792		)	(722		)	(1,656		)	(1,559		)
	Noncontrolling interests' share of depreciation and amortization	(2,642		)	(2,055		)	(4,621		)	(4,448		)
	Loss on impairment, net of taxes	43,183			43,493			45,250			63,178
	Gain on depreciable property, net of taxes and noncontrolling interests' share	(50,797		)	(35,521		)	(50,756		)	(35,521		)
	FFO allocable to Operating Partnership common unitholders	116,084			146,735			222,694			282,670
	Litigation expenses ⁽¹⁾	9			—			52			1,707
	Nonrecurring professional fees expense (reimbursement) ⁽¹⁾	6			1,119			(919		)	1,119
	Loss on investment ⁽²⁾	5,843			—			5,843			—
	Equity in earnings from disposals of unconsolidated affiliates ⁽³⁾	—			(29,235		)	—			(55,630		)
	Non-cash default interest expense ⁽⁴⁾	1,187			—			2,494			—
	Gain on extinguishment of debt, net of noncontrolling interests' share ⁽⁵⁾	(23,395		)	—			(27,450		)	—
	FFO allocable to Operating Partnership common unitholders, as adjusted	$	99,734		$	118,619		$	202,714		$	229,866

	FFO per diluted share	$	0.58		$	0.73		$	1.12		$	1.41

	FFO, as adjusted, per diluted share	$	0.50		$	0.59		$	1.02		$	1.15

	Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted	199,371			200,045			199,326			199,986


(1)	Litigation expense and nonrecurring professional fees expense are included in General and Administrative expense in the Consolidated Statements of Operations. Nonrecurring professional fees reimbursement is included in Interest and Other Income in the Consolidated Statements of Operations.
(2)	The three months and six months ended June 30, 2017 represents a loss on investment related to the write down of the Company's 25% interest in River Ridge Mall based on the contract price to sell such interest to its joint venture partner.
(3)	The three months and six months ended June 30, 2016 includes $29,267 related to the foreclosure of the loan secured by Gulf Coast Town Center. The six months ended June 30, 2016 also includes $26,373 related to the sale of the Company's 50% interest in Triangle Town Center. These amounts are included in Equity in Earnings of Unconsolidated Affiliates in the Consolidated Statements of Operations.
(4)	The three months and six months ended June 30, 2017 includes default interest expense related to Wausau Center and Chesterfield Mall. The six months ended June 30, 2017 also includes default interest expense related to Midland Mall.
(5)	The three months and six months ended June 30, 2017 primarily represents gain on extinguishment of debt related to the non-recourse loan secured by Chesterfield Mall, which was conveyed to the lender in the second quarter of 2017. The three months and six months ended June 30, 2017 also includes loss on extinguishment of debt related to a prepayment fee on the early retirement of the loans secured by The Outlet Shoppes at Oklahoma City, which was sold in April 2017. The six months ended June 30, 2017 also includes gain on extinguishment of debt related to the non-recourse loan secured by Midland Mall, which was conveyed to the lender in the first quarter of 2017.


The reconciliation of diluted EPS to FFO per diluted share is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Diluted EPS attributable to common shareholders	$	0.18		$	0.30		$	0.31		$	0.47
Eliminate amounts per share excluded from FFO:
Depreciation and amortization expense, including amounts from consolidated properties, unconsolidated affiliates, non-real estate assets and excluding amounts allocated to noncontrolling interests	0.44			0.39			0.83			0.81
Loss on impairment, net of taxes	0.22			0.22			0.23			0.31
Gain on depreciable property, net of tax and noncontrolling interests' share	(0.26		)	(0.18		)	(0.25		)	(0.18		)
FFO per diluted share	$	0.58		$	0.73		$	1.12		$	1.41


	The reconciliations of FFO allocable to Operating Partnership common unitholders to FFO allocable to common shareholders, including and excluding the adjustments noted above, are as follows:

		Three Months Ended June 30,						Six Months Ended June 30,
		2017			2016			2017			2016
	FFO allocable to Operating Partnership common unitholders	$	116,084		$	146,735		$	222,694		$	282,670
	Percentage allocable to common shareholders⁽¹⁾	85.82		%	85.38		%	85.81		%	85.37		%
	FFO allocable to common shareholders	$	99,623		$	125,282		$	191,094		$	241,315

	FFO allocable to Operating Partnership common unitholders, as adjusted	$	99,734		$	118,619		$	202,714		$	229,866
	Percentage allocable to common shareholders ⁽¹⁾	85.82		%	85.38		%	85.81		%	85.37		%
	FFO allocable to common shareholders, as adjusted	$	85,592		$	101,277		$	173,949		$	196,237

(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 14.


SUPPLEMENTAL FFO INFORMATION:
	Three Months Ended June 30,							Six Months Ended June 30,
	2017			2016				2017					2016
Lease termination fees	$	864		$	394			$	1,111				$	1,345
Lease termination fees per share	$	—		$	—			$	0.01				$	0.01

Straight-line rental income	$	559		$	1,411			$	632				$	1,560
Straight-line rental income per share	$	—		$	0.01			$	—				$	0.01

Gains on outparcel sales	$	2,094		$	3,783			$	8,091				$	3,783
Gains on outparcel sales per share	$	0.01		$	0.02			$	0.04				$	0.02

Net amortization of acquired above- and below-market leases	$	1,198		$	906			$	2,416				$	1,982
Net amortization of acquired above- and below-market leases per share	$	0.01		$	—			$	0.01				$	0.01

Net amortization of debt premiums and discounts	$	(206	)	$	411			$	(403			)	$	838
Net amortization of debt premiums and discounts per share	$	—		$	—			$	—				$	—

Income tax benefit	$	2,920		$	51			$	3,720				$	588
Income tax benefit per share	$	0.01		$	—			$	0.02				$	—

Gain on extinguishment of debt, net of noncontrolling interests' share	$	23,395		$	—			$	27,450				$	6
Gain on extinguishment of debt, net of noncontrolling interests' share, per share	$	0.12		$	—			$	0.14				$	—

Loss on investment	$	(5,843	)	$	—			$	(5,843			)	$	—
Loss on investment per share	$	(0.03	)	$	—			$	(0.03			)	$	—

Equity in earnings from disposals of unconsolidated affiliates	$	—		$	29,235			$	—				$	55,630
Equity in earnings from disposals of unconsolidated affiliates per share	$	—		$	0.15			$	—				$	0.28

Non-cash default interest expense	$	(1,187	)	$	—			$	(2,494			)	$	—
Non-cash default interest expense per share	$	(0.01	)	$	—			$	(0.01			)	$	—

Abandoned projects expense	$	(5,019	)	$	32			$	(5,019			)	$	(33	)
Abandoned projects expense per share	$	(0.03	)	$	—			$	(0.03			)	$	—

Interest capitalized	$	385		$	448			$	1,224				$	996
Interest capitalized per share	$	—		$	—			$	0.01				$	—

Litigation expenses	$	(9	)	$	—			$	(52			)	$	(1,707	)
Litigation expenses per share	$	—		$	—			$	—				$	(0.01	)

Nonrecurring professional fees (expense) reimbursement	$	(6	)	$	(1,119	)		$	919				$	(1,119	)
Nonrecurring professional fees (expense) reimbursement per share	$	—		$	—			$	—				$	—

						As of June 30,
						2017				2016
Straight-line rent receivable						$	62,989			$	68,038


Same-center Net Operating Income
(Dollars in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net income	$	70,627		$	73,097		$	109,145		$	114,989

Adjustments:
Depreciation and amortization	82,509			72,205			153,729			148,711
Depreciation and amortization from unconsolidated affiliates	9,357			9,156			18,900			18,334
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries	(2,642		)	(2,055		)	(4,621		)	(4,448		)
Interest expense	55,065			53,187			111,266			108,418
Interest expense from unconsolidated affiliates	6,410			7,093			12,571			13,678
Noncontrolling interests' share of interest expense in other consolidated subsidiaries	(1,870		)	(1,678		)	(3,576		)	(3,357		)
Abandoned projects expense	5,019			32			5,019			33
Gain on sales of real estate assets	(79,533		)	(9,577		)	(85,521		)	(9,577		)
(Gain) loss on sales of real estate assets of unconsolidated affiliates	3			(58,927		)	38			(85,322		)
Noncontrolling interests' share of gain on sales of real estate assets in other consolidated affiliates	26,639			—			26,639			—
Loss on investment	5,843			—			5,843			—
Gain on extinguishment of debt	(20,420		)	—			(24,475		)	(6		)
Noncontrolling interests' share of loss on extinguishment of debt in other consolidated subsidiaries	(2,975		)	—			(2,975		)	—
Loss on impairment	43,203			43,493			46,466			63,178
Income tax benefit	(2,920		)	(51		)	(3,720		)	(588		)
Lease termination fees	(864		)	(394		)	(1,111		)	(1,345		)
Straight-line rent and above- and below-market lease amortization	(1,757		)	(2,317		)	(3,048		)	(3,542		)
Net (income) loss attributable to noncontrolling interests in other consolidated subsidiaries	(24,138		)	(1,695		)	(24,851		)	1,432
General and administrative expenses	15,752			16,475			31,834			33,643
Management fees and non-property level revenues	(2,293		)	(6,293		)	(7,550		)	(11,069		)
Operating Partnership's share of property NOI	181,015			191,751			360,002			383,162
Non-comparable NOI	(8,587		)	(16,997		)	(17,887		)	(37,497		)
Total same-center NOI ⁽¹⁾	$	172,428		$	174,754		$	342,115		$	345,665
Total same-center NOI percentage change	(1.3)%						(1.0)%

Same-center Net Operating Income

(Continued)

Three Months Ended

June 30,

Six Months Ended

June 30,

2017

2016

2017

2016

Malls

156,648

160,020

310,709

316,174

Associated centers

8,185

8,137

16,491

16,031

Community centers

5,697

5,033

11,181

10,190

Offices and other

1,898

1,564

3,734

3,270

Total same-center NOI ⁽¹⁾

172,428

174,754

342,115

345,665

Percentage Change:

Malls

(2.1)%

(1.7)%

Associated centers

0.6%

2.9%

Community centers

13.2%

9.7%

Offices and other

21.4%

14.2%

Total same-center NOI ⁽¹⁾

(1.3)%

(1.0)%

(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, amortization of above and below market lease intangibles and write-offs of landlord inducement assets. We include a property in our same-center pool when we own all or a portion of the property as of June 30, 2017, 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 June 30, 2017. New properties are excluded from same-center NOI, until they meet this criteria. The only properties excluded from the same-center pool that would otherwise meet this criteria are properties which are either under major redevelopment, being considered for repositioning, minority interest properties in which we own an interest of 25% or less, or where we intend to renegotiate the terms of the debt secured by the related property.


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

		As of June 30, 2017
		Fixed Rate			Variable Rate			Total per Debt Schedule				Unamortized Deferred Financing Costs			Total
	Consolidated debt	$	3,184,580		$	1,081,266		$	4,265,846			$	(16,406	)	$	4,249,440
	Noncontrolling interests' share of consolidated debt	(93,377		)	(5,449		)	(98,826		)		765			(98,061		)
	Company's share of unconsolidated affiliates' debt	526,136			72,002			598,138				(2,506		)	595,632
	Company's share of consolidated and unconsolidated debt	$	3,617,339		$	1,147,819		$	4,765,158			$	(18,147	)	$	4,747,011
	Weighted-average interest rate	5.25		%	2.58		%	4.61		%

		As of June 30, 2016
		Fixed Rate			Variable Rate			Total per Debt Schedule				Unamortized Deferred Financing Costs			Total
	Consolidated debt	$	3,359,851		$	1,234,099		$	4,593,950		⁽¹⁾	$	(15,234	)	$	4,578,716
	Noncontrolling interests' share of consolidated debt	(110,236		)	(7,575		)	(117,811		)		739			(117,072		)
	Company's share of unconsolidated affiliates' debt	551,369			73,870			625,239				(3,001		)	622,238
	Company's share of consolidated and unconsolidated debt	$	3,800,984		$	1,300,394		$	5,101,378			$	(17,496	)	$	5,083,882
	Weighted-average interest rate	5.31		%	1.89		%	4.44		%

(1)	Includes $38,237 of debt related to Fashion Square Mall that was classified in Liabilities Related to Assets Held for Sale in the Consolidated Balance Sheet as of June 30, 2016.


	Debt-To-Total-Market Capitalization Ratio as of June 30, 2017
	(In thousands, except stock price)

		Shares Outstanding	Stock Price ⁽¹⁾		Value
	Common stock and Operating Partnership units	199,321	$	8.43	$	1,680,276
	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				2,306,526
	Company's share of total debt, excluding unamortized deferred financing costs				4,765,158
	Total market capitalization				$	7,071,684
	Debt-to-total-market capitalization ratio				67.4		%

(1)	Stock price for common stock and Operating Partnership units equals the closing price of the common stock on June 30, 2017. 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 June 30,						Six Months Ended June 30,
2017:	Basic			Diluted			Basic			Diluted
Weighted-average shares - EPS	171,095			171,095			171,042			171,042
Weighted-average Operating Partnership units	28,276			28,276			28,284			28,284
Weighted-average shares- FFO	199,371			199,371			199,326			199,326

2016:
Weighted-average shares - EPS	170,792			170,792			170,731			170,731
Weighted-average Operating Partnership units	29,253			29,253			29,255			29,255
Weighted-average shares- FFO	200,045			200,045			199,986			199,986


Dividend Payout Ratio
	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Weighted-average cash dividend per share	$	0.27281		$	0.27278		$	0.54562		$	0.54556
FFO, as adjusted, per diluted fully converted share	$	0.50		$	0.59		$	1.02		$	1.15
Dividend payout ratio	54.6		%	46.2		%	53.5		%	47.4		%


Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
	As of
ASSETS	June 30, 2017			December 31, 2016
Real estate assets:
Land	$	818,550		$	820,979
Buildings and improvements	6,687,134			6,942,452
	7,505,684			7,763,431
Accumulated depreciation	(2,374,071		)	(2,427,108		)
	5,131,613			5,336,323
Held for sale	—			5,861
Developments in progress	94,698			178,355
Net investment in real estate assets	5,226,311			5,520,539
Cash and cash equivalents	29,622			18,951
Receivables:
Tenant, net of allowance for doubtful accounts of $2,091 and $1,910 in 2017 and 2016, respectively	84,472			94,676
Other, net of allowance for doubtful accounts of $838 in 2017 and 2016	7,699			6,227
Mortgage and other notes receivable	17,414			16,803
Investments in unconsolidated affiliates	254,522			266,872
Intangible lease assets and other assets	188,293			180,572
	$	5,808,333		$	6,104,640

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness, net	$	4,249,440		$	4,465,294
Accounts payable and accrued liabilities	244,542			280,498
Total liabilities	4,493,982			4,745,792
Commitments and contingencies
Redeemable noncontrolling interests	13,392			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, 171,094,642 and 170,792,645 issued and outstanding in 2017 and 2016, respectively	1,711			1,708
Additional paid-in capital	1,972,070			1,969,059
Dividends in excess of cumulative earnings	(779,693		)	(742,078		)
Total shareholders' equity	1,194,113			1,228,714
Noncontrolling interests	106,846			112,138
Total equity	1,300,959			1,340,852
	$	5,808,333		$	6,104,640

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