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 SEPTEMBERJUNE 30, 20182019
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.INC
CBL & ASSOCIATES LIMITED PARTNERSHIPAssociates Limited Partnership
(Exact Name of registrant as specified in its charter)
______________
DELAWARE (CBLDelaware(CBL & ASSOCIATES PROPERTIES, INC.)    62-1545718
DELAWARE (CBLDelaware(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, TN37421-6000
(Address of principal executive office, including zip code)
423.855.0001423-855-0001
(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. 
Yesx
☒
Noo☐
CBL & Associates Limited Partnership 
Yesx
☒
Noo☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
CBL & Associates Properties, Inc. 
Yesx
☒
Noo☐
CBL & Associates Limited Partnership 
Yesx
☒
Noo☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. 
CBL & Associates Properties, Inc.
Large accelerated filerx
☒ 
Accelerated filero
☐
Non-accelerated filero
☐
Smaller reporting companyo
☐
Emerging growth companyo
☐  
   
CBL & Associates Limited Partnership
Large accelerated filero
☐ 
Accelerated filero
☐
Non-accelerated filer☒
Smaller reporting company
☐
Non-accelerated filerx
Smaller reporting companyo
Emerging growth companyo
☐  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
CBL & Associates Properties, Inc. 
 Yeso
☐
Nox
☒
CBL & Associates Limited Partnership 
 Yes o
☐
No
☒


Securities registered under Section 12(b) of the Act:
CBL & Associates Properties, Inc.
Title of each Class
Trading
Symbol(s)
NoxName of each exchange on
which registered
Common Stock, $0.01 par value CBLNew York Stock Exchange
7.375% Series D Cumulative Redeemable Preferred Stock, $0.01 par value CBLprDNew York Stock Exchange
6.625% Series E Cumulative Redeemable Preferred Stock, $0.01 par value CBLprENew York Stock Exchange
CBL & Associates Limited Partnership: None

As of November 2, 2018,August 6, 2019, there were 172,669,152173,472,151 shares of CBL & Associates Properties, Inc.'s common stock, par value $0.01 per share, outstanding.

EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the quarter ended SeptemberJune 30, 20182019 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 SeptemberJune 30, 2018,2019, 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 85.6% limited partner interest for a combined interest held by the Company of 86.6%.
As the sole general partner of the Operating Partnership, the Company's subsidiary, CBL Holdings I, Inc., has exclusive control of the Operating Partnership's activities. Management operates the Company and the Operating Partnership as one business. The management of the Company consists of the same individuals that manage the Operating Partnership. The Company's only material asset is its indirect ownership of partnership interests of the Operating Partnership. As a result, the Company conducts substantially all its business through the Operating Partnership as described in the preceding paragraph. The Company also issues public equity from time to time and guarantees certain debt of the Operating Partnership. The Operating Partnership holds all of the assets and indebtedness of the Company and, through affiliates, retains the ownership interests in the Company's joint ventures. Except for the net proceeds of offerings of equity by the Company, which are contributed to the Operating Partnership in exchange for partnership units on a one-for-one basis, the Operating Partnership generates all remaining capital required by the Company's business through its operations and its incurrence of indebtedness.
We believe that combining the two quarterly reports on Form 10-Q for the Company and the Operating Partnership provides the following benefits:
enhances investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner that management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation, since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
To help investors understand the differences between the Company and the Operating Partnership, this report provides separate condensed consolidated financial statements for the Company and the Operating Partnership. Noncontrolling interests, shareholders' equity and partners' capital are the main areas of difference between the condensed consolidated financial statements of the Company and those of the Operating Partnership. A single set of notes to condensed consolidated financial statements is presented that includes separate discussions for the Company and the Operating Partnership, when applicable. A combined Management's Discussion and Analysis of Financial Condition and Results of Operations section is also included that presents combined information and discrete information related to each entity, as applicable.
In order to highlight the differences between the Company and the Operating Partnership, this report includes the following sections that provide separate financial and other information for the Company and the Operating Partnership:
condensed consolidated financial statements;
•
certain accompanying notes to condensed consolidated financial statements, including Note 67 - Unconsolidated Affiliates and Noncontrolling Interests; Note 78 - Mortgage and Other Indebtedness, Net; and Note 1011 - Earnings per Share and Earnings per Unit;
•
controls and procedures in Item 4 of Part I of this report;
•
information concerning unregistered sales of equity securities and use of proceeds in Item 2 of Part II of this report; and
certifications of the Chief Executive Officer and Chief Financial Officer included as Exhibits 31.1 through 32.4.

Combined Guarantor Subsidiaries of the Operating Partnership
In January 2019, the Operating Partnership entered into a new $1,185,000 senior secured credit facility which replaced all of the Operating Partnership’s prior unsecured bank facilities. The secured credit facility is secured by 17 malls and 3 associated centers that are directly or indirectly owned by 36 wholly owned subsidiaries of the Operating Partnership (collectively the “Combined Guarantor Subsidiaries”). The Combined Guarantor Subsidiaries own an additional five malls, one associated center and four mortgage notes receivable that are not collateral for the secured credit facility. The properties that are collateral for the secured credit facility and the properties and mortgage notes receivable that are not collateral are collectively referred to as the “Guarantor Properties.” In addition to the secured credit facility, the Operating Partnership’s debt includes three separate series of senior unsecured notes (the “Notes”). Based on the terms of the Notes, to the extent that any subsidiary of the Operating Partnership executes and delivers a guarantee to another debt facility, the Operating Partnership shall also cause the subsidiary to guarantee the Operating Partnership’s obligations under the Notes on a senior basis. In January 2019, the Combined Guarantor Subsidiaries entered a guarantee agreement with the issuer of the Notes to satisfy the guaranty requirement.    
This report also includes as an exhibit the combined financial statements and notes to the combined financial statements of the Combined Guarantor Subsidiaries. Each of the Combined Guarantor Subsidiaries meet the criteria in Rule 3-10(f) of SEC Regulation S-X to provide condensed consolidating financial information as additional disclosure in the notes to the Operating Partnership's condensed consolidated financial statements because each Combined Guarantor Subsidiary is 100% owned by the Operating Partnership, the guaranty issued by each Combined Guarantor Subsidiary is full and unconditional and the guaranty issued by each Combined Guarantor Subsidiary is joint and several. However, the Operating Partnership has elected to provide combined financial statements and accompanying notes for the Combined Guarantor Subsidiaries in lieu of including the condensed consolidating financial information in the notes to its condensed consolidated financial statements. These combined financial statements and notes are presented as an exhibit to this quarterly report on Form 10-Q for ease of reference.


CBL & Associates Properties, Inc.
CBL & Associates Limited Partnership
Table of Contents
PART IFINANCIAL INFORMATION
1
Item 1.
Condensed Consolidated Financial Statements (Unaudited)
1
   
CBL & Associates Properties, Inc.
 
Condensed Consolidated Balance Sheets as of SeptemberJune 30, 20182019 and December 31, 20172018
1
   
 
Condensed Consolidated Statements of Operations for the Three and NineSix Months Ended
SeptemberJune 30, 20182019 and 20172018
2
   
 
Condensed Consolidated Statements of Equity for the NineThree and Six Months Ended
SeptemberJune 30, 20182019 and 20172018
3
   
 
Condensed Consolidated Statements of Cash Flows for the NineSix Months Ended
SeptemberJune 30, 20182019 and 20172018
5
   
CBL & Associates Limited Partnership
 
Condensed Consolidated Balance Sheets as of SeptemberJune 30, 20182019 and December 31, 20172018
7
   
 
Condensed Consolidated Statements of Operations for the Three and NineSix Months Ended
SeptemberJune 30, 20182019 and 20172018
8
   
 
Condensed Consolidated Statements of Capital for the NineThree and Six Months Ended
SeptemberJune 30, 20182019 and 20172018
9
   
 
Condensed Consolidated Statements of Cash Flows for the NineSix Months Ended
SeptemberJune 30, 20182019 and 20172018
11
   
CBL & Associates Properties, Inc. and CBL & Associates Limited Partnership
 
Notes to Unaudited Condensed Consolidated Financial Statements
13
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
3740
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
60
Item 4.
Controls and Procedures
60
PART II
OTHER INFORMATION
61
   
PART IIItem 1.
OTHER INFORMATION
61
Item 1.
Legal Proceedings
61
Item1A.
Risk Factors
6162
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
61
Item 3.
Defaults Upon Senior Securities
62
Item 4.3.
Mine Safety DisclosuresDefaults Upon Senior Securities
62
Item 5.4.
Other InformationMine Safety Disclosures
62
Item 6.5.
Other Information
62
Item 6.
Exhibits
63
   
 
SIGNATURES
64

PART I – FINANCIAL INFORMATION


ITEM 1:   Financial Statements
CBL & Associates Properties, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
ASSETS (1)
September 30,
2018		 December 31,
2017		June 30,
2019		 December 31,
2018
Real estate assets:      
Land$818,436
 $813,390
$756,946
 $793,944
Buildings and improvements6,544,019
 6,723,194
6,153,444
 6,414,886
7,362,455
 7,536,584
6,910,390
 7,208,830
Accumulated depreciation(2,514,904) (2,465,095)(2,477,552) (2,493,082)
4,847,551
 5,071,489
4,432,838
 4,715,748
Held for sale14,807
 —
44,574
 30,971
Developments in progress73,530
 85,346
47,666
 38,807
Net investment in real estate assets4,935,888
 5,156,835
4,525,078
 4,785,526
Cash and cash equivalents20,695
 32,627
20,483
 25,138
Receivables:      
Tenant, net of allowance for doubtful accounts of $2,214
and $2,011 in 2018 and 2017, respectively		77,095
 83,552
Other, net of allowance for doubtful accounts of $838 in 20177,109
 7,570
Tenant, net of allowance for doubtful accounts of $2,337 in 201872,485
 77,788
Other, net of allowance for doubtful accounts of $838 in 2018
8,450
 7,511
Mortgage and other notes receivable8,171
 8,945
6,326
 7,672
Investments in unconsolidated affiliates275,884
 249,192
270,860
 283,553
Intangible lease assets and other assets166,177
 166,087
144,458
 153,665
$5,491,019
 $5,704,808
$5,048,140
 $5,340,853
      
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY 
  
 
  
Mortgage and other indebtedness, net$4,115,808
 $4,230,845
$3,865,939
 $4,043,180
Accounts payable and accrued liabilities247,490
 228,650
260,265
 218,217
Liabilities related to assets held for sale663
 43,716
Total liabilities (1)
4,363,298
 4,459,495
4,126,867
 4,305,113
Commitments and contingencies (Note 7 and Note 11)

 

Commitments and contingencies (Note 8 and Note 12)


 


Redeemable noncontrolling interests6,228
 8,835
2,687
 3,575
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
18
 18
6.625% Series E Cumulative Redeemable Preferred
Stock, 690,000 shares outstanding		7
 7
7
 7
Common stock, $.01 par value, 350,000,000 shares
authorized, 172,663,873 and 171,088,778 issued and
outstanding in 2018 and 2017, respectively		1,727
 1,711
Common stock, $.01 par value, 350,000,000 shares
authorized, 173,471,893 and 172,656,458 issued and
outstanding in 2019 and 2018, respectively		1,735
 1,727
Additional paid-in capital1,967,882
 1,974,537
1,966,549
 1,968,280
Dividends in excess of cumulative earnings(927,416) (836,269)(1,104,504) (1,005,895)
Total shareholders' equity1,042,218
 1,140,004
863,805
 964,137
Noncontrolling interests79,275
 96,474
54,781
 68,028
Total equity1,121,493
 1,236,478
918,586
 1,032,165
$5,491,019
 $5,704,808
$5,048,140
 $5,340,853
(1)
As of SeptemberJune 30, 20182019, includes $621,616601,069 of assets related to consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and $414,923410,719 of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Company. See Note 67.
The accompanying notes are an integral part of these condensed consolidated statements.

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

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

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

Three Months Ended
September 30,		 Nine Months Ended
September 30,		Three Months Ended
June 30,		 Six Months Ended
June 30,
2018 2017 2018 20172019 2018 2019 2018
REVENUES:              
Minimum rents$142,248
 $150,836
 $441,097
 $468,195
Percentage rents2,429
 3,000
 6,610
 7,127
Other rents2,347
 3,790
 6,898
 11,171
Tenant reimbursements55,374
 63,055
 172,601
 192,577
Rental revenues$185,393
 $207,568
 $376,373
 $420,297
Management, development and leasing fees2,658
 2,718
 8,022
 8,747
2,586
 2,643
 5,109
 5,364
Other1,822
 1,251
 6,448
 4,079
5,398
 4,387
 9,925
 9,137
Total revenues206,878
 224,650
 641,676
 691,896
193,377
 214,598
 391,407
 434,798
              
OPERATING EXPENSES: 
  
     
  
    
Property operating30,004
 31,295
 92,357
 96,250
(26,532) (29,527) (55,512) (62,353)
Depreciation and amortization71,945
 71,732
 217,261
 225,461
(64,478) (73,566) (134,270) (145,316)
Real estate taxes19,433
 21,573
 61,737
 62,343
(19,148) (20,456) (39,067) (42,304)
Maintenance and repairs11,475
 11,254
 36,713
 36,322
(11,298) (12,059) (24,074) (25,238)
General and administrative16,051
 13,568
 47,845
 45,402
(14,427) (13,490) (36,434) (31,794)
Loss on impairment14,600
 24,935
 84,644
 71,401
(41,608) (51,983) (66,433) (70,044)
Litigation settlement—
 —
 (88,150) —
Other38
 132
 377
 5,151
(34) (245) (34) (339)
Total operating expenses163,546
 174,489
 540,934
 542,330
(177,525) (201,326) (443,974) (377,388)
Income from operations43,332
 50,161
 100,742
 149,566
Interest and other income (loss)283
 (200) 714
 1,235
       
OTHER INCOME (EXPENSES):       
Interest and other income356
 218
 845
 431
Interest expense(55,194) (53,913) (163,164) (165,179)(52,482) (54,203) (106,480) (107,970)
Gain on extinguishment of debt—
 6,452
 —
 30,927
—
 —
 71,722
 —
Gain (loss) on investments—
 (354) 387
 (6,197)
Gain on investments—
 387
 —
 387
Gain on sales of real estate assets5,527
 3,747
 5,755
 8,118
Income tax benefit (provision)(1,034) 1,064
 1,846
 4,784
(813) 2,235
 (952) 2,880
Equity in earnings of unconsolidated affiliates1,762
 4,706
 9,869
 16,404
1,872
 4,368
 5,180
 8,107
Income (loss) from continuing operations before gain on sales of real estate assets(10,851) 7,916
 (49,606) 31,540
Gain on sales of real estate assets7,880
 1,383
 15,998
 86,904
Net income (loss)(2,971) 9,299

(33,608)
118,444
Net (income) loss attributable to noncontrolling interests in: 
      
Total other income (expenses)(45,540) (43,248) (23,930) (88,047)
Net loss(29,688) (29,976)
(76,497)
(30,637)
Net loss attributable to noncontrolling interests in: 
      
Operating Partnership1,628
 81
 8,978
 (8,702)5,454
 5,685
 13,212
 7,350
Other consolidated subsidiaries(24) (415) 369
 (25,266)57
 494
 132
 393
Net income (loss) attributable to the Company(1,367) 8,965
 (24,261) 84,476
Net loss attributable to the Company(24,177) (23,797) (63,153) (22,894)
Preferred dividends(11,223) (11,223) (33,669) (33,669)(11,223) (11,223) (22,446) (22,446)
Net income (loss) attributable to common shareholders$(12,590) $(2,258) $(57,930) $50,807
Net loss attributable to common shareholders$(35,400) $(35,020) $(85,599) $(45,340)
              
Basic and diluted per share data attributable to common shareholders:Basic and diluted per share data attributable to common shareholders:  Basic and diluted per share data attributable to common shareholders:  
Net income (loss) attributable to common shareholders$(0.07) $(0.01) $(0.34) $0.30
Net loss attributable to common shareholders$(0.20) $(0.20) $(0.49) $(0.26)
Weighted-average common and potential dilutive common shares outstanding172,665
 171,096
 172,426
 171,060
173,473
 172,662
 173,363
 172,304
       
Dividends declared per common share$0.200
 $0.265
 $0.600
 $0.795


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

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
 
Dividends in
Excess of
Cumulative
Earnings
 
Total
Shareholders'
Equity
 
Noncontrolling
Interests
 
Total
 Equity
Balance, January 1, 2017$17,996
 $25
 $1,708
 $1,969,059
 $(742,078) $1,228,714
 $112,138
 $1,340,852
Net income481
 —
 —
 —
 84,476
 84,476
 33,487
 117,963
Dividends declared - common stock—
 —
 —
 —
 (136,021) (136,021) —
 (136,021)
Dividends declared - preferred stock—
 —
 —
 —
 (33,669) (33,669) —
 (33,669)
Issuances of 342,008 shares of common stock
and restricted common stock		—
 —
 3
 471
 —
 474
 —
 474
Cancellation of 37,758 shares of restricted common stock—
 —
 —
 (327) —
 (327) —
 (327)
Performance stock units—
 —
 —
 1,115
 —
 1,115
 —
 1,115
Amortization of deferred compensation—
 —
 —
 3,135
 —
 3,135
 —
 3,135
Redemptions of Operating Partnership common units—
 —
 —
 —
 —
 —
 (593) (593)
Adjustment for noncontrolling interests2,224
 —
 —
 (5,635) —
 (5,635) 3,413
 (2,222)
Adjustment to record redeemable
    noncontrolling interests at redemption value		(4,196) —
 —
 3,629
 —
 3,629
 566
 4,195
Deconsolidation of investment—
 —
 —
 —
 —
 —
 (2,232) (2,232)
Contributions from noncontrolling interests—
 —
 —
 —
 —
 —
 263
 263
Distributions to noncontrolling interests(3,429) —
 —
 —
 —
 —
 (48,477) (48,477)
Balance, September 30, 2017$13,076
 $25
 $1,711
 $1,971,447
 $(827,292) $1,145,891
 $98,565
 $1,244,456
   Equity
   Shareholders' Equity    
 
Redeemable
Noncontrolling
Interests
 
Preferred
 Stock
 
Common
 Stock
 
Additional
 Paid-in
 Capital
 
Dividends in
Excess of
Cumulative
Earnings
 
Total
Shareholders'
Equity
 
Noncontrolling
Interests
 
Total
 Equity
Balance, January 1, 2018$8,835
 $25
 $1,711
 $1,974,537
 $(836,269) $1,140,004
 $96,474
 $1,236,478
Net income (loss)(94) —
 —
 —
 903
 903
 (1,470) (567)
Cumulative effect of accounting change—
 —
 —
 —
 70,380
 70,380
 —
 70,380
Dividends declared - common stock ($0.200 per share)—
 —
 —
 —
 (34,531) (34,531) —
 (34,531)
Dividends declared - preferred stock—
 —
 —
 —
 (11,223) (11,223) —
 (11,223)
Issuances of 700,534 shares of common stock and restricted common stock—
 —
 7
 734
 —
 741
 —
 741
Conversion of 915,338 Operating Partnership common units into shares of common stock—
 —
 9
 3,050
 —
 3,059
 (3,059) —
Cancellation of 47,867 shares of restricted common stock—
 —
 —
 (233) —
 (233) —
 (233)
Performance stock units—
 —
 —
 419
 —
 419
 —
 419
Amortization of deferred compensation—
 —
 —
 1,196
 —
 1,196
 —
 1,196
Adjustment for noncontrolling interests1,399
 —
 —
 (11,737) —
 (11,737) 10,338
 (1,399)
Adjustment to record redeemable noncontrolling interests at redemption value(2,530) —
 —
 2,203
 —
 2,203
 328
 2,531
Distributions to noncontrolling interests(1,143) —
 —
 —
 —
 —
 (7,804) (7,804)
Balance, March 31, 20186,467
 25
 1,727
 1,970,169
 (810,740) 1,161,181
 94,807
 1,255,988
Net loss(324) —
 —
 —
 (23,797) (23,797) (5,855) (29,652)
Dividends declared - common stock ($0.200 per share)—
 —
 —
 —
 (34,532) (34,532) —
 (34,532)
Dividends declared - preferred stock—
 —
 —
 —
 (11,223) (11,223) —
 (11,223)
Issuances of 8,579 shares of common stock and restricted common stock—
 —
 —
 37
 —
 37
 —
 37
Redemption of Operating Partnership common units—
 —
 —
 —
 —
 —
 (2,246) (2,246)
Cancellation of 3,654 shares of restricted common stock—
 —
 —
 (3) —
 (3) —
 (3)
Performance stock units—
 —
 —
 275
 —
 275
 —
 275
Amortization of deferred compensation—
 —
 —
 814
 —
 814
 —
 814
Adjustment for noncontrolling interests829
 —
 —
 (2,300) —
 (2,300) 1,469
 (831)
Adjustment to record redeemable noncontrolling interests at redemption value2,865
 —
 —
 (2,501) —
 (2,501) (363) (2,864)
Contributions from noncontrolling interests—
 —
 —
 —
 —
 —
 7,859
 7,859
Distributions to noncontrolling interests(1,143) —
 —
 —
 —
 —
 (7,169) (7,169)
Balance, June 30, 2018$8,694
 $25
 $1,727
 $1,966,491
 $(880,292) $1,087,951
 $88,502
 $1,176,453





CBL & Associates Properties, Inc.
Condensed Consolidated Statements of Equity
(In thousands, except share data)
(Unaudited)
(Continued)
   Equity
   Shareholders' Equity    
 
Redeemable
Noncontrolling
Interests
 
Preferred
 Stock
 
Common
 Stock
 
Additional
 Paid-in
 Capital
 
Dividends in
Excess of
Cumulative
Earnings
 
Total
Shareholders'
Equity
 
Noncontrolling
 Interests
 
Total
 Equity
Balance, January 1, 2018$8,835
 $25
 $1,711
 $1,974,537
 $(836,269) $1,140,004
 $96,474
 $1,236,478
Net loss(515) —
 —
 —
 (24,261) (24,261) (8,832) (33,093)
Cumulative effect of accounting change (Note 2)
—
 —
 —
 —
 11,433
 11,433
 —
 11,433
Cumulative effect of accounting change (Note 3)
—
 —
 —
 —
 58,947
 58,947
 —
 58,947
Dividends declared - common stock—
 —
 —
 —
 (103,597) (103,597) —
 (103,597)
Dividends declared - preferred stock—
 —
 —
 —
 (33,669) (33,669) —
 (33,669)
Issuances of 716,290 shares of common stock
and restricted common stock		—
 —
 7
 810
 —
 817
 —
 817
Conversion of 915,338 Operating Partnership
common units into shares of common stock		—
 —
 9
 3,050
 —
 3,059
 (3,059) —
Redemptions of Operating Partnership common units—
 —
 —
 —
 —
 —
 (2,246) (2,246)
Cancellation of 56,533 shares of restricted
common stock		—
 —
 —
 (249) —
 (249) —
 (249)
Performance stock units—
 —
 —
 993
 —
 993
 —
 993
Forfeiture of performance stock units—
 —
 —
 (250) —
 (250) —
 (250)
Amortization of deferred compensation—
 —
 —
 2,846
 —
 2,846
 —
 2,846
Adjustment for noncontrolling interests3,033
 —
 —
 (15,329) —
 (15,329) 12,296
 (3,033)
Adjustment to record redeemable
     noncontrolling interests at redemption value		(1,696) —
 —
 1,474
 —
 1,474
 222
 1,696
Contributions from noncontrolling interests—
 —
 —
 —
 —
 —
 7,859
 7,859
Distributions to noncontrolling interests(3,429) —
 —
 —
 —
 —
 (23,439) (23,439)
Balance, September 30, 2018$6,228
 $25
 $1,727
 $1,967,882
 $(927,416) $1,042,218
 $79,275
 $1,121,493
   Equity
   Shareholders' Equity    
 
Redeemable
Noncontrolling
Interests
 
Preferred
 Stock
 
Common
 Stock
 
Additional
 Paid-in
 Capital
 
Dividends in
Excess of
Cumulative
Earnings
 
Total
Shareholders'
Equity
 
Noncontrolling
 Interests
 
Total
 Equity
Balance, January 1, 2019$3,575
 $25
 $1,727
 $1,968,280
 $(1,005,895) $964,137
 $68,028
 $1,032,165
Net loss(453) —
 —
 —
 (38,976) (38,976) (7,380) (46,356)
Dividends declared - common stock ($0.075 per share)—
 —
 —
 —
 (13,010) (13,010) —
 (13,010)
Dividends declared - preferred stock—
 —
 —
 —
 (11,223) (11,223) —
 (11,223)
Issuances of 863,174 shares of common stock
and restricted common stock		—
 —
 9
 708
 —
 717
 —
 717
Cancellation of 57,656 shares of restricted common stock—
 —
 (1) (133) —
 (134) —
 (134)
Performance stock units—
 —
 —
 313
 —
 313
 —
 313
Amortization of deferred compensation—
 —
 —
 1,033
 —
 1,033
 —
 1,033
Adjustment for noncontrolling interests1,038
 —
 —
 (2,356) —
 (2,356) 1,318
 (1,038)
Contributions from noncontrolling interests—
 —
 —
 —
 —
 —
 455
 455
Distributions to noncontrolling interests(1,143) —
 —
 —
 —
 —
 (4,450) (4,450)
Balance, March 31, 20193,017
 25
 1,735
 1,967,845
 (1,069,104) 900,501
 57,971
 958,472
Net loss(317) —
 —
 —
 (24,177) (24,177) (5,194) (29,371)
Dividends declared - preferred stock—
 —
 —
 —
 (11,223) (11,223) —
 (11,223)
Issuances of 15,634 shares of common stock and restricted common stock—
 —
 —
 21
 —
 21
 —
 21
Cancellation of 5,717 shares of restricted common stock—
 —
 —
 (5) —
 (5) —
 (5)
Performance stock units—
 —
 —
 312
 —
 312
 —
 312
Amortization of deferred compensation—
 —
 —
 587
 —
 587
 —
 587
Adjustment for noncontrolling interests1,130
 —
 —
 (2,211) —
 (2,211) 1,081
 (1,130)
Contributions from noncontrolling interests—
 —
 —
 —
 —
 —
 4,148
 4,148
Distributions to noncontrolling interests(1,143) —
 —
 —
 —
 —
 (3,225) (3,225)
Balance, June 30, 2019$2,687
 $25
 $1,735
 $1,966,549
 $(1,104,504) $863,805
 $54,781
 $918,586


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



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

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

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

Nine Months Ended
September 30,		Six Months Ended
June 30,
2018 20172019 2018
CASH FLOWS FROM OPERATING ACTIVITIES: 
   
  
Net income (loss)$(33,608) $118,444
Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
Net loss$(76,497) $(30,637)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization217,261
 225,461
134,270
 145,316
Net amortization of deferred financing costs, debt premiums and discounts5,451
 2,904
4,306
 3,593
Net amortization of intangible lease assets and liabilities198
 (1,235)(1,071) (1,436)
Gain on sales of real estate assets(15,998) (86,904)(5,755) (8,118)
(Gain) loss on investments(387) 6,197
Gain on insurance proceeds(421) —
Gain on investments—
 (387)
Write-off of development projects377
 5,151
34
 339
Share-based compensation expense4,310
 4,569
2,938
 3,398
Loss on impairment84,644
 71,401
66,433
 70,044
Gain on extinguishment of debt—
 (30,927)(71,722) —
Equity in earnings of unconsolidated affiliates(9,869) (16,404)(5,180) (8,107)
Distributions of earnings from unconsolidated affiliates12,574
 16,361
11,320
 9,669
Provision for doubtful accounts3,273
 3,353
Change in estimate of uncollectable rental revenues1,692
 2,786
Change in deferred tax accounts(2,706) 2,911
90
 (1,993)
Changes in:   
   
Tenant and other receivables3,493
 (4,893)(473) 6,173
Other assets(4,640) (12,368)(2,036) (1,269)
Accounts payable and accrued liabilities16,034
 32,929
68,104
 (9,489)
Net cash provided by operating activities280,407
 336,950
126,032
 179,882
      
CASH FLOWS FROM INVESTING ACTIVITIES: 
  
 
  
Additions to real estate assets(107,981) (149,302)(51,148) (65,988)
Acquisitions of real estate assets(3,301) (79,799)—
 (2,051)
Proceeds from sales of real estate assets70,419
 201,291
69,238
 19,556
Proceeds from disposal of investment—
 9,000
Additions to mortgage and other notes receivable—
 (4,118)
Proceeds from insurance740
 —
Payments received on mortgage and other notes receivable775
 3,443
1,346
 516
Additional investments in and advances to unconsolidated affiliates(2,243) (17,199)(780) (1,529)
Distributions in excess of equity in earnings of unconsolidated affiliates33,909
 15,743
8,565
 31,537
Changes in other assets(5,903) (14,471)(857) (4,878)
Net cash used in investing activities(14,325) (35,412)
Net cash provided by (used in) investing activities27,104
 (22,837)

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

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

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

Nine Months Ended
September 30,		Six Months Ended
June 30,
2018 20172019 2018
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from mortgage and other indebtedness$530,679
 $1,097,006
$1,019,369
 $202,160
Principal payments on mortgage and other indebtedness(649,904) (1,159,144)(1,113,337) (263,486)
Additions to deferred financing costs(238) (5,003)(15,546) (98)
Prepayment fees on extinguishment of debt—
 (8,871)
Proceeds from issuances of common stock117
 150
38
 78
Purchases of noncontrolling interests in the Operating Partnership(2,246) (593)—
 (2,246)
Contributions from noncontrolling interests7,859
 263
4,603
 7,859
Payment of tax withholdings for restricted stock awards(271) (322)(132) (232)
Distributions to noncontrolling interests(27,156) (51,925)(11,722) (17,547)
Dividends paid to holders of preferred stock(33,669) (33,669)(22,446) (22,446)
Dividends paid to common shareholders(103,280) (135,941)(25,959) (68,748)
Net cash used in financing activities(278,109) (298,049)(165,132) (164,706)
      
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(12,027) 3,489
(11,996) (7,661)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period68,172
 65,069
57,512
 68,172
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$56,145
 $68,558
$45,516
 $60,511
      
Reconciliation from condensed consolidated statements of cash flows to condensed consolidated balance sheets:
Cash and cash equivalents$20,695
 $31,351
$20,483
 $23,428
Restricted cash (1):
      
Restricted cash4,681
 944
84
 5,829
Mortgage escrows30,769
 36,263
24,949
 31,254
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$56,145
 $68,558
$45,516
 $60,511
      
SUPPLEMENTAL INFORMATION: 
  
 
  
Cash paid for interest, net of amounts capitalized$136,301
 $150,816
$105,621
 $100,185
(1)Included in intangible lease assets and other assets in the condensed consolidated balance sheets.
 
The accompanying notes are an integral part of these condensed consolidated statements.



CBL & Associates Limited Partnership
Condensed Consolidated Balance Sheets
(In thousands, except unit data)
(Unaudited)
ASSETS (1)
September 30,
2018		 December 31,
2017		June 30,
2019		 December 31,
2018
Real estate assets:      
Land$818,436
 $813,390
$756,946
 $793,944
Buildings and improvements6,544,019
 6,723,194
6,153,444
 6,414,886
7,362,455
 7,536,584
6,910,390
 7,208,830
Accumulated depreciation(2,514,904) (2,465,095)(2,477,552) (2,493,082)
4,847,551
 5,071,489
4,432,838
 4,715,748
Held for sale14,807
 —
44,574
 30,971
Developments in progress73,530
 85,346
47,666
 38,807
Net investment in real estate assets4,935,888
 5,156,835
4,525,078
 4,785,526
Cash and cash equivalents20,695
 32,627
20,482
 25,138
Receivables: 
  
 
  
Tenant, net of allowance for doubtful accounts of $2,214
and $2,011 in 2018 and 2017, respectively		77,095
 83,552
Other, net of allowance for doubtful accounts of $838 in 20177,061
 7,520
Tenant, net of allowance for doubtful accounts of $2,337 in 201872,485
 77,788
Other, net of allowance for doubtful accounts of $838 in 2018
8,401
 7,462
Mortgage and other notes receivable8,171
 8,945
6,326
 7,672
Investments in unconsolidated affiliates276,418
 249,722
271,393
 284,086
Intangible lease assets and other assets166,057
 165,967
144,338
 153,545
$5,491,385
 $5,705,168
$5,048,503
 $5,341,217
      
LIABILITIES, REDEEMABLE INTERESTS AND CAPITAL 
  
 
  
Mortgage and other indebtedness, net$4,115,808
 $4,230,845
$3,865,939
 $4,043,180
Accounts payable and accrued liabilities247,607
 228,720
260,335
 218,288
Liabilities related to assets held for sale663
 43,716
Total liabilities (1)
4,363,415
 4,459,565
4,126,937
 4,305,184
Commitments and contingencies (Note 7 and Note 11)


 

Commitments and contingencies (Note 8 and Note 12)


 


Redeemable common units 6,228
 8,835
2,687
 3,575
Partners' capital: 
  
 
  
Preferred units565,212
 565,212
565,212
 565,212
Common units:      
General partner5,540
 6,735
3,448
 4,628
Limited partners539,191
 655,120
336,997
 450,507
Total partners' capital1,109,943
 1,227,067
905,657
 1,020,347
Noncontrolling interests11,799
 9,701
13,222
 12,111
Total capital1,121,742
 1,236,768
918,879
 1,032,458
$5,491,385
 $5,705,168
$5,048,503
 $5,341,217
(1)
As of SeptemberJune 30, 20182019, includes $621,616601,069 of assets related to consolidated variable interest entities that can only be used to settle obligations of the consolidated variable interest entities and $414,923410,719 of liabilities of consolidated variable interest entities for which creditors do not have recourse to the general credit of the Operating Partnership. See Note 67.


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

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

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

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

Three Months Ended
September 30,		 Nine Months Ended
September 30,		Three Months Ended
June 30,		 Six Months Ended
June 30,
2018 2017 2018 20172019 2018 2019 2018
REVENUES:              
Minimum rents$142,248
 $150,836
 $441,097
 $468,195
Percentage rents2,429
 3,000
 6,610
 7,127
Other rents2,347
 3,790
 6,898
 11,171
Tenant reimbursements55,374
 63,055
 172,601
 192,577
Rental revenues$185,393
 $207,568
 $376,373
 $420,297
Management, development and leasing fees2,658
 2,718
 8,022
 8,747
2,586
 2,643
 5,109
 5,364
Other1,822
 1,251
 6,448
 4,079
5,398
 4,387
 9,925
 9,137
Total revenues206,878
 224,650
 641,676
 691,896
193,377
 214,598
 391,407
 434,798
              
OPERATING EXPENSES: 
  
     
  
    
Property operating30,004
 31,295
 92,357
 96,250
(26,532) (29,527) (55,512) (62,353)
Depreciation and amortization71,945
 71,732
 217,261
 225,461
(64,478) (73,566) (134,270) (145,316)
Real estate taxes19,433
 21,573
 61,737
 62,343
(19,148) (20,456) (39,067) (42,304)
Maintenance and repairs11,475
 11,254
 36,713
 36,322
(11,298) (12,059) (24,074) (25,238)
General and administrative16,051
 13,568
 47,845
 45,402
(14,427) (13,490) (36,434) (31,794)
Loss on impairment14,600
 24,935
 84,644
 71,401
(41,608) (51,983) (66,433) (70,044)
Litigation settlement—
 —
 (88,150) —
Other38
 132
 377
 5,151
(34) (245) (34) (339)
Total operating expenses163,546
 174,489
 540,934
 542,330
(177,525) (201,326) (443,974) (377,388)
Income from operations43,332
 50,161
 100,742
 149,566
Interest and other income (loss)283
 (200) 714
 1,235
       
OTHER INCOME (EXPENSES):       
Interest and other income356
 218
 845
 431
Interest expense(55,194) (53,913) (163,164) (165,179)(52,482) (54,203) (106,480) (107,970)
Gain on extinguishment of debt—
 6,452
 —
 30,927
—
 —
 71,722
 —
Gain (loss) on investments—
 (354) 387
 (6,197)
Gain on investments—
 387
 —
 387
Gain on sales of real estate assets5,527
 3,747
 5,755
 8,118
Income tax benefit (provision)(1,034) 1,064
 1,846
 4,784
(813) 2,235
 (952) 2,880
Equity in earnings of unconsolidated affiliates1,762
 4,706
 9,869
 16,404
1,872
 4,368
 5,180
 8,107
Income (loss) from continuing operations before gain on sales of real estate assets(10,851) 7,916
 (49,606) 31,540
Gain on sales of real estate assets7,880
 1,383
 15,998
 86,904
Net income (loss)(2,971) 9,299

(33,608)
118,444
Net (income) loss attributable to noncontrolling interests(24) (415) 369
 (25,266)
Net income (loss) attributable to the Operating Partnership(2,995) 8,884
 (33,239) 93,178
Total other income (expenses)(45,540) (43,248) (23,930) (88,047)
Net loss(29,688) (29,976)
(76,497)
(30,637)
Net loss attributable to noncontrolling interests57
 494
 132
 393
Net loss attributable to the Operating Partnership(29,631) (29,482) (76,365) (30,244)
Distributions to preferred unitholders(11,223) (11,223) (33,669) (33,669)(11,223) (11,223) (22,446) (22,446)
Net income (loss) attributable to common unitholders$(14,218) $(2,339) $(66,908) $59,509
Net loss attributable to common unitholders$(40,854) $(40,705) $(98,811) $(52,690)
              
Basic and diluted per unit data attributable to common unitholders:Basic and diluted per unit data attributable to common unitholders:  Basic and diluted per unit data attributable to common unitholders:  
Net income (loss) attributable to common unitholders$(0.07) $(0.01) $(0.34) $0.30
Net loss attributable to common unitholders$(0.20) $(0.20) $(0.49) $(0.26)
Weighted-average common and potential dilutive common units outstanding199,432
 199,321
 199,630
 199,325
200,231
 199,767
 200,122
 199,731
       
Distributions declared per common unit$0.209
 $0.273
 $0.627
 $0.819


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

CBL & Associates Limited Partnership
Condensed Consolidated Statements of Capital
(In thousands)
 (Unaudited)
   Number of   Common Units         Number of   Common Units      
 
Redeemable
Common
Units
 
Preferred
Units
 
Common
Units
 
Preferred
Units
 
General
Partner
 
Limited
Partners
 
Total
Partners'
Capital
 
Noncontrolling
Interests
 
Total
Capital
 
Redeemable
Common
Units
 
Preferred
Units
 
Common
Units
 
Preferred
Units
 
General
Partner
 
Limited
Partners
 
Total
Partners'
Capital
 
Noncontrolling
Interests
 
Total
Capital
Balance, January 1, 2017 $17,996
 25,050
 199,085
 $565,212
 $7,781
 $756,083
 $1,329,076
 $12,103
 $1,341,179
Net income 481
 —
 —
 33,669
 607
 58,421
 92,697
 25,266
 117,963
Distributions declared - common units (3,429) —
 —
 —
 (1,600) (158,124) (159,724) —
 (159,724)
Balance, January 1, 2018 $8,835
 25,050
 199,297
 $565,212
 $6,735
 $655,120
 $1,227,067
 $9,701
 $1,236,768
Net income (loss) (94) —
 —
 11,223
 (122) (11,769) (668) 101
 (567)
Cumulative effect of accounting change —
 —
 —
 —
 722
 69,658
 70,380
 —
 70,380
Distributions declared - common units ($0.209 per unit) (1,143) —
 —
 —
 (402) (40,215) (40,617) —
 (40,617)
Distributions declared - preferred units —
 —
 —
 (11,223) —
 —
 (11,223) —
 (11,223)
Issuances of common units —
 —
 701
 —
 —
 741
 741
 —
 741
Cancellation of restricted common stock —
 —
 (48) —
 —
 (233) (233) —
 (233)
Performance stock units —
 —
 —
 —
 4
 415
 419
 —
 419
Amortization of deferred compensation —
 —
 —
 —
 12
 1,184
 1,196
 —
 1,196
Allocation of partners' capital 1,399
 —
 —
 —
 (48) (1,353) (1,401) —
 (1,401)
Adjustment to record redeemable interests at redemption value (2,530) —
 —
 —
 26
 2,505
 2,531
 —
 2,531
Distributions to noncontrolling interests —
 —
 —
 —
 —
 —
 —
 (1,718) (1,718)
Balance, March 31, 2018 6,467
 25,050
 199,950
 565,212
 6,927
 676,053
 1,248,192
 8,084
 1,256,276
Net loss (324) —
 —
 11,223
 (415) (39,966) (29,158) (494) (29,652)
Distributions declared - common units ($0.209 per unit) (1,143) —
 —
 —
 (403) (40,110) (40,513) —
 (40,513)
Distributions declared - preferred units —
 —
 —
 (33,669) —
 —
 (33,669) —
 (33,669) —
 —
 —
 (11,223) —
 —
 (11,223) —
 (11,223)
Issuances of common units —
 —
 342
 —
 —
 474
 474
 —
 474
 —
 —
 8
 —
 —
 37
 37
 —
 37
Redemptions of common units —
 —
 (73) —
 —
 (593) (593) —
 (593) —
 —
 (527) —
 —
 (2,246) (2,246) —
 (2,246)
Cancellation of restricted common stock —
 —
 (38) —
 —
 (327) (327) —
 (327) —
 —
 (3) —
 —
 (3) (3) —
 (3)
Performance stock units —
 —
 —
 —
 11
 1,104
 1,115
 —
 1,115
 —
 —
 —
 —
 3
 272
 275
 —
 275
Amortization of deferred compensation —
 —
 —
 —
 32
 3,103
 3,135
 —
 3,135
 —
 —
 —
 —
 9
 805
 814
 —
 814
Allocation of partners' capital 2,224
 —
 —
 —
 (68) (2,191) (2,259) —
 (2,259) 829
 —
 —
 —
 (18) (805) (823) —
 (823)
Adjustment to record redeemable interests at redemption value (4,196) —
 —
 —
 43
 4,152
 4,195
 —
 4,195
 2,865
 —
 —
 —
 (29) (2,835) (2,864) —
 (2,864)
Deconsolidation of investment —
 —
 —
 —
 —
 —
 —
 (2,232) (2,232)
Contributions from noncontrolling interests —
 —
 —
 —
 —
 —
 —
 263
 263
 —
 —
 —
 —
 —
 —
 —
 7,859
 7,859
Distributions to noncontrolling interests —
 —
 —
 —
 —
 —
 —
 (24,774) (24,774) —
 —
 —
 —
 —
 —
 —
 (1,188) (1,188)
Balance, September 30, 2017 $13,076
 25,050
 199,316
 $565,212
 $6,806
 $662,102
 $1,234,120
 $10,626
 $1,244,746
Balance, June 30, 2018 $8,694
 25,050
 199,428
 $565,212
 $6,074
 $591,202
 $1,162,488
 $14,261
 $1,176,749







CBL & Associates Limited Partnership
Condensed Consolidated Statements of Capital
(In thousands)
(Unaudited)
(Continued)
   Number of   Common Units      
 
Redeemable
Common
Units
 
Preferred
Units
 
Common
Units
 
Preferred
Units
 
General
Partner
 
Limited
Partners
 
Total
Partners'
Capital
 
Noncontrolling
Interests
 
Total
Capital
Balance, January 1, 2018$8,835
 25,050
 199,297
 $565,212
 $6,735
 $655,120
 $1,227,067
 $9,701
 $1,236,768
Net income (loss)(515) —
 —
 33,669
 (682) (65,711) (32,724) (369) (33,093)
Cumulative effect of accounting change (Note 2)
—
 —
 —
 —
 117
 11,316
 11,433
 —
 11,433
Cumulative effect of accounting change (Note 3)
—
 —
 —
 —
 605
 58,342
 58,947
 —
 58,947
Distributions declared - common units(3,429) —
 —
 —
 (1,207) (120,436) (121,643) —
 (121,643)
Distributions declared - preferred units—
 —
 —
 (33,669) —
 —
 (33,669) —
 (33,669)
Issuances of common units—
 —
 715
 —
 —
 817
 817
 —
 817
Redemptions of common units—
 —
 (527) —
 —
 (2,246) (2,246) —
 (2,246)
Cancellation of restricted common stock—
 —
 (57) —
 —
 (249) (249) —
 (249)
Performance stock units—
 —
 —
 —
 10
 983
 993
 —
 993
Forfeiture of performance stock units—
 —
 —
 —
 (3) (247) (250) —
 (250)
Amortization of deferred compensation—
 —
 —
 —
 29
 2,817
 2,846
 —
 2,846
Allocation of partners' capital3,033
 —
 —
 —
 (81) (2,994) (3,075) —
 (3,075)
Adjustment to record redeemable interests at redemption value(1,696) —
 —
 —
 17
 1,679
 1,696
 —
 1,696
Contributions from noncontrolling interests—
 —
 —
 —
 —
 —
 —
 7,859
 7,859
Distributions to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 (5,392) (5,392)
Balance, September 30, 2018$6,228
 25,050
 199,428
 $565,212
 $5,540
 $539,191
 $1,109,943
 $11,799
 $1,121,742
   Number of   Common Units      
 
Redeemable
Common
Units
 
Preferred
Units
 
Common
Units
 
Preferred
Units
 
General
Partner
 
Limited
Partners
 
Total
Partners'
Capital
 
Noncontrolling
Interests
 
Total
Capital
Balance, January 1, 2019$3,575
 25,050
 199,415
 $565,212
 $4,628
 $450,507
 $1,020,347
 $12,111
 $1,032,458
Net loss(453) —
 —
 11,223
 (590) (56,914) (46,281) (75) (46,356)
Distributions declared - common units ($0.086 per unit)(1,143) —
 —
 —
 (151) (15,897) (16,048) —
 (16,048)
Distributions declared - preferred units—
 —
 —
 (11,223) —
 —
 (11,223) —
 (11,223)
Issuances of common units—
 —
 863
 —
 —
 717
 717
 —
 717
Cancellation of restricted common stock—
 —
 (58) —
 —
 (133) (133) —
 (133)
Performance stock units—
 —
 —
 —
 3
 309
 312
 —
 312
Amortization of deferred compensation—
 —
 —
 —
 11
 1,022
 1,033
 —
 1,033
Allocation of partners' capital1,038
 —
 —
 —
 (34) (1,004) (1,038) —
 (1,038)
Contributions from noncontrolling interests—
 —
 —
 —
 —
 —
 —
 455
 455
Distributions to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 (1,412) (1,412)
Balance, March 31, 20193,017
 25,050
 200,220
 565,212
 3,867
 378,607
 947,686
 11,079
 958,765
Net loss(317) —
 —
 11,223
 (414) (40,123) (29,314) (57) (29,371)
Distributions declared - common units ($0.012 per unit)(1,143) —
 —
 —
 —
 (1,239) (1,239) —
 (1,239)
Distributions declared - preferred units—
 —
 —
 (11,223) —
 —
 (11,223) —
 (11,223)
Issuances of common units—
 —
 15
 —
 —
 (17) (17) —
 (17)
Cancellation of restricted common stock—
 —
 (5) —
 —
 (6) (6) —
 (6)
Performance stock units—
 —
 —
 —
 3
 310
 313
 —
 313
Amortization of deferred compensation—
 —
 —
 —
 6
 581
 587
 —
 587
Allocation of partners' capital1,130
 —
 —
 —
 (14) (1,116) (1,130) —
 (1,130)
Contributions from noncontrolling interests—
 —
 —
 —
 —
 —
 —
 4,148
 4,148
Distributions to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 (1,948) (1,948)
Balance, June 30, 2019$2,687
 25,050
 200,230
 $565,212
 $3,448
 $336,997
 $905,657
 $13,222
 $918,879


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



CBL & Associates Limited Partnership
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

CBL & Associates Limited Partnership
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

CBL & Associates Limited Partnership
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

Nine Months Ended
September 30,		Six Months Ended
June 30,
2018 20172019 2018
CASH FLOWS FROM OPERATING ACTIVITIES: 
   
  
Net income (loss)$(33,608) $118,444
Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
Net loss$(76,497) $(30,637)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Depreciation and amortization217,261
 225,461
134,270
 145,316
Net amortization of deferred financing costs, debt premiums and discounts5,451
 2,904
4,306
 3,593
Net amortization of intangible lease assets and liabilities198
 (1,235)(1,071) (1,436)
Gain on sales of real estate assets(15,998) (86,904)(5,755) (8,118)
(Gain ) loss on investments(387) 6,197
Gain on insurance proceeds(421) —
Gain on investments—
 (387)
Write-off of development projects377
 5,151
34
 339
Share-based compensation expense4,310
 4,569
2,938
 3,398
Loss on impairment84,644
 71,401
66,433
 70,044
Gain on extinguishment of debt—
 (30,927)(71,722) —
Equity in earnings of unconsolidated affiliates(9,869) (16,404)(5,180) (8,107)
Distributions of earnings from unconsolidated affiliates12,569
 16,362
11,321
 9,663
Provision for doubtful accounts3,273
 3,353
Change in estimate of uncollectable rental revenues1,692
 2,786
Change in deferred tax accounts(2,706) 2,911
90
 (1,993)
Changes in: 
  
 
  
Tenant and other receivables3,493
 (4,893)(473) 6,173
Other assets(4,640) (12,368)(2,036) (1,270)
Accounts payable and accrued liabilities16,039
 32,935
68,102
 (9,483)
Net cash provided by operating activities280,407
 336,957
126,031
 179,881
      
CASH FLOWS FROM INVESTING ACTIVITIES: 
  
 
  
Additions to real estate assets(107,981) (149,302)(51,148) (65,988)
Acquisition of real estate assets(3,301) (79,799)—
 (2,051)
Proceeds from sales of real estate assets70,419
 201,291
69,238
 19,556
Proceeds from disposal of investment—
 9,000
Additions to mortgage and other notes receivable—
 (4,118)
Proceeds from insurance740
 —
Payments received on mortgage and other notes receivable775
 3,443
1,346
 516
Additional investments in and advances to unconsolidated affiliates(2,243) (17,199)(780) (1,529)
Distributions in excess of equity in earnings of unconsolidated affiliates33,909
 15,743
8,565
 31,537
Changes in other assets(5,903) (14,471)(857) (4,878)
Net cash used in investing activities(14,325) (35,412)
Net cash provided by (used in) investing activities27,104
 (22,837)

CBL & Associates Limited Partnership
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
(Continued)

CBL & Associates Limited Partnership
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
(Continued)

CBL & Associates Limited Partnership
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
(Continued)

Nine Months Ended
September 30,		Six Months Ended
June 30,
2018 20172019 2018
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from mortgage and other indebtedness$530,679
 $1,097,006
$1,019,369
 $202,160
Principal payments on mortgage and other indebtedness(649,904) (1,159,144)(1,113,337) (263,486)
Additions to deferred financing costs(238) (5,003)(15,546) (98)
Prepayment fees on extinguishment of debt—
 (8,871)
Proceeds from issuances of common units117
 150
38
 78
Redemptions of common units(2,246) (593)—
 (2,246)
Contributions from noncontrolling interests7,859
 263
4,603
 7,859
Payment of tax withholdings for restricted stock awards(271) (322)(132) (232)
Distributions to noncontrolling interests(8,821) (28,203)(5,646) (5,193)
Distributions to preferred unitholders(33,669) (33,669)(22,446) (22,446)
Distributions to common unitholders(121,615) (159,663)(32,035) (81,102)
Net cash used in financing activities(278,109) (298,049)(165,132) (164,706)
      
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH(12,027) 3,496
(11,997) (7,662)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period68,172
 65,061
57,512
 68,172
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$56,145
 $68,557
$45,515
 $60,510
      
Reconciliation from condensed consolidated statements of cash flows to condensed consolidated balance sheets:
Cash and cash equivalents$20,695
 $31,350
$20,482
 $23,427
Restricted cash (1):
      
Restricted cash4,681
 944
84
 5,829
Mortgage escrows30,769
 36,263
24,949
 31,254
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period$56,145
 $68,557
$45,515
 $60,510
      
SUPPLEMENTAL INFORMATION: 
  
 
  
Cash paid for interest, net of amounts capitalized$136,301
 $150,816
$105,621
 $100,185
(1)Included in intangible lease assets and other assets in the condensed consolidated balance sheets.


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



CBL & Associates Properties, Inc.
CBL & Associates Limited Partnership
Notes to Unaudited Condensed Consolidated Financial Statements
(Dollars in thousands, except per share and per unit data)

Note 1 – Organization and Basis of Presentation
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.
CBL & Associates Properties, Inc. (“CBL”), a Delaware corporation, is a self-managed, self-administered, fully-integrated real estate investment trust (“REIT”) that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers and office properties.  Its properties are located in 26 states, but are primarily in the southeastern and midwestern United States.
CBL conducts substantially all of its business through CBL & Associates Limited Partnership (the “Operating Partnership”), which is a variable interest entity ("VIE"). The Operating Partnership consolidates the financial statements of all entities in which it has a controlling financial interest or where it is the primary beneficiary of a VIE.  
As of SeptemberJune 30, 2018,2019, the Operating Partnership owned interests in the following properties:
 Other Properties  Other Properties 
Malls (1)
 
Associated
Centers
 
Community
Centers
 
Office
Buildings/Other
 Total
Malls (1)
 
Associated
Centers
 
Community
Centers
 
Office
Buildings/Other
 Total
Consolidated properties59 20 3 5
(2) 
8756 20 2 5
(2) 
83
Unconsolidated properties (3)
8 3 4 1 168 3 5 2 18
Total67 23 7 6 10364 23 7 7 101
(1)
Category consists of regional malls, open-air centers and outlet centers (including one mixed-use center).
(2)
Includes CBL's two corporate office buildings.
(3)The Operating Partnership accounts for these investments using the equity method because one or more of the other partners have substantive participating rights.
At SeptemberJune 30, 2018,2019, the Operating Partnership had interests in the following properties under development:
Consolidated Properties
MallsAll Other
Redevelopments6—
 
Consolidated
Properties
 
Unconsolidated
Properties
 Malls All Other Malls All Other
Development— — — 2
Redevelopments8 — 1 —

CBL is the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc. At SeptemberJune 30, 2018,2019, 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 85.6% limited partner interest for a combined interest held by CBL of 86.6%.
The noncontrolling interest in the Operating Partnership is held by CBL & Associates, Inc., its shareholders and affiliates and certain senior officers of the Company (collectively "CBL's Predecessor"), all of which contributed their interests in certain real estate properties and joint ventures to the Operating Partnership in exchange for a limited partner interest when the Operating Partnership was formed in November 1993, and by various third parties. At SeptemberJune 30, 2018,2019, CBL’s Predecessor owned a 9.1% limited partner interest and third parties owned a 4.3% limited partner interest in the Operating Partnership.  CBL's Predecessor also owned 4.04.3 million shares of CBL’s common stock at SeptemberJune 30, 2018,2019, for a total combined effective interest of 11.1%11.2% in the Operating Partnership.

The Operating Partnership conducts the Company’s property management and development activities through its wholly owned subsidiary, CBL & Associates Management, Inc. (the “Management Company”), to comply with certain requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).
The accompanying condensed consolidated financial statements are unaudited; however, they have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the disclosures required by GAAP for complete financial

statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. All intercompany transactions have been eliminated. The results for the interim period ended SeptemberJune 30, 20182019 are not necessarily indicative of the results to be obtained for the full fiscal year.
These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2017.2018.
Reclassifications
Certain reclassifications have been made to amounts in the Company's prior-year financial statements to conform to the current period presentation. The Company reclassified certain amounts related to restricted cashoperating expense reimbursements in its condensed consolidated statements of cash flowsoperations for the ninethree and six months ended SeptemberJune 30, 2017 upon2018 related to the adoption of ASC 606. As a result, operating expense reimbursements of $2,168 and $4,511, previously included in tenant reimbursements, were reclassified to other revenues for the Financial Accounting Standards Board ("FASB") Accounting Standardsthree months and six months ended June 30, 2018, respectively. Additionally, the Company reclassified minimum rents, percentage rents, other rents and tenant reimbursements into one line item, rental revenues, for the three and six months ended June 30, 2018 related to the adoption of ASC 842. Lastly, in accordance with ASC 360, and in response to the SEC's "Disclosure Update ("ASU") 2016-18, Restricted Cash ("ASU 2016-18")and Simplification" release effective November 5, 2018, the Company reclassified gains and losses resulting from wholly owned real estate dispositions from the line item following "Income (loss) from continuing operations before gain on sales of real estate assets" to the "Other Income (Expenses)" section within its condensed consolidated statements of operations. As a result, in the fourth quarter of 2017, which required the change in restricted cash to be reported with cash and cash equivalents when reconciling beginning and ending amounts on the condensed consolidated statements of cash flows. The guidance was applied retrospectivelyoperations, the Company reclassified $3,747 and $8,118 to the prior period presented. As a result, restricted cash reductions of $1,261, previously included in cash flows from investing activities, were reclassified to cash flows from financing activities to reflect $7,650 of principal payments on mortgage and other indebtedness and the remaining $8,911 difference was reclassified to the beginning-of-period and end-of-period total amounts on the condensed consolidated statement of cash flows"Other Income (Expenses)" section for the ninethree and six months ended SeptemberJune 30, 2017.2018, respectively.
Note 2 – Recent Accounting Pronouncements
Accounting Guidance Adopted
Description 
Date Adopted &
Application
Method
 Financial Statement Effect and Other Information
ASU 2014-09, Revenue from Contracts with Customers2016-02, Leases,and related subsequent amendments
 
January 1, 20182019 -
Modified Retrospective (applied(elected optional transition method to contracts not completed as of the implementation date)
The objective of this guidance is to enable financial statement users to better understandapply at adoption date and analyze revenue by replacing transaction and industry-specific guidance with a more principles-based approach to revenue recognition. The core principle is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance also requires additional disclosure about the nature, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company expects the adoption of the new guidance to be immaterial to its net income on an ongoing basis as the majority of the Company’s revenues relate to leasing. See Note 3 for further details and the cumulativerecord cumulative-effect adjustment recorded.
ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory
January 1, 2018 -
Modified Retrospective
The guidance requires an entity to recognize the income tax consequences of intercompany sales or transfers of assets, other than inventory, when the sale or transfer occurs. The Company recorded a cumulative effect adjustment of $11,433 to retained earnings as of January 1, 2018 related to certain 2017 asset sales from several of the Company's consolidated subsidiaries to the Management Company.
ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets2019)
 
January 1, 2018 -
Modified Retrospective
This guidance applies to the partial sale or transfer of nonfinancial assets, including real estate assets, to unconsolidated joint ventures and requires 100%The objective of the gainleasing guidance is to be recognizedincrease transparency and comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Putting nearly all leases on the balance sheet is the biggest change for nonfinancial assets transferred to an unconsolidated joint venture and any noncontrolling interest received in such nonfinancial assets to be measured at fair value. See Note 3 for further details including the impact of adoption and the cumulative adjustment recorded.

Description
Date Adopted &
Application
Method
Financial Statement Effect and Other Information
ASU 2017-09, Scope of Modification Accounting
January 1, 2018 -
Prospective
The guidance clarifies the types of changes to the terms or conditions of a share-based payment award to which an entity wouldlessees, as lessees will now be required to apply modification accounting.recognize a right-of-use (“ROU”) asset and corresponding lease liability for leases with terms greater than 12 months. Under the FASB model, lessees will classify a lease as either a finance lease or an operating lease, while a lessor will classify a lease as either a sales-type, direct financing, or operating lease. A lessee should classify a lease based on whether the arrangement is effectively a purchase of the underlying asset. Leases that transfer control of the underlying asset to a lessee are classified as finance leases for lessees and sales-type leases for lessors, whereas leases where the lessee obtains control of only the use of the underlying asset, but not the underlying asset itself, will be classified as operating leases for both lessees and lessors. A lease may meet the lessee finance lease criteria even when control of the underlying asset is not transferred to the lessee, and in these cases the lease would be classified as an operating lease for the lessee and a direct finance lease by the lessor. The guidance didto be applied by lessors is substantially similar to existing GAAP. In order to align lessor accounting with the principles in the revenue recognition guidance in ASC 606, a lessor is precluded from recognizing selling profit or sales revenue at lease commencement for a lease that does not havetransfer control of the underlying asset to the lessee. As a material impact onlessee, the guidance impacted the Company's condensed consolidated financial statements.statements through the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for operating leases as of January 1, 2019. As a lessor, the guidance impacted the Company's condensed consolidated financial statements in regard to the narrowed definition of initial direct costs that can be capitalized, the change in the presentation of rental revenues as one line item and the change in reporting uncollectable operating lease receivables as a reduction of rental revenues instead of property operating expense. The adoption did not result in a cumulative catch-up adjustment to opening equity. See Note 4 for further details.

Accounting Guidance Not Yet Effective
Description 
Expected
Adoption Date &
Application
Method
 Financial Statement Effect and Other Information
ASU 2016-02, Leases, and related subsequent amendments
January 1, 2019 -
Modified Retrospective (electing optional transition method to apply at adoption date and record cumulative-effect adjustment as of January 1, 2019)


The objective of the leasing guidance is to increase transparency and comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Lessees will be required to recognize a right-of-use asset and corresponding lease liability on the balance sheet for all leases with terms greater than 12 months.
The guidance applied by a lessor is substantially similar to existing GAAP and the Company expects substantially all leases will continue to be classified as operating leases under the new guidance. The Company expects to expense certain deferred lease costs due to the narrowed definition of indirect costs that may be capitalized. Of the $1,456 in deferred lease costs recorded in 2017, approximately $183 related to legal costs which would not be capitalized under the new guidance.
The Company completed an inventory of its leases in which it is a lessee and expects to record right-of-use assets and corresponding lease liabilities for ground leases. The Company has 10 ground lease arrangements in which it is the lessee for land. As of September 30, 2018, these ground leases have future contractual payments of approximately $14,767 with maturity dates ranging from February 2022 to July2089.
Practical expedients and accounting policy elections:
The Company plans to elect a package of practical expedients pursuant to which it will not reassess contracts to determine if they contain leases, will not reassess lease classification and will not reassess capitalization of initial direct costs related to expired or existing leases as of the adoption date. The Company also plans to use the land easements practical expedient and apply the short-term lease policy election to leases 12 months or less at inception.
The Company expects to adopt the practical expedient which allows lessors to combine lease and non-lease components if certain conditions are met. The majority of the Company's revenues will continue to be classified as leasing revenues.
The Company is assessing the potential impact the guidance may have on its condensed consolidated financial statements and related disclosures.
ASU 2016-13, Measurement of Credit Losses on Financial Instruments
 
January 1, 2020 -
Modified Retrospective
 
The guidance replaces the current incurred loss impairment model, which reflects credit events, with a current expected credit loss model, which recognizes an allowance for credit losses based on an entity's estimate of contractual cash flows not expected to be collected.
The Company is evaluating the impact that this update may have on its condensed consolidated financial statements and related disclosures.
     

DescriptionExpected Adoption Date & Application MethodFinancial Statement Effect and Other Information
ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
 
January 1, 2020 -
Prospective
 
The guidance addresses diversity in practice in accounting for the costs of implementation activities in a cloud computing arrangement that is a service contract. Under the guidance, the Company is to follow Subtopic 350-40 on internal-use software to determine which implementation costs to capitalize and which to expense.
The guidance also requires an entity to expense capitalized implementation costs over the term of the hosting arrangement and include that expense in the same line item as the fees associated with the service element of the arrangement.
The Company does not expect the adoption of this guidance will have a material impact on its condensed consolidated financial statements or disclosures.

Note 3 – Revenues
Adoption of ASU 2014-09, and all related subsequent amendments, and ASU 2017-05
The Company adopted ASC 606 (which includes ASU 2014-09 and all related subsequent amendments) on January 1, 2018 and applied the guidance to contracts that were not complete as of January 1, 2018. The cumulative effect of adopting ASC 606 included an opening adjustment of $196 to retained earnings as of January 1, 2018 in the accounts noted below. Historical amounts for prior periods were not adjusted and will continue to be reported using the guidance in ASC 605, Revenue Recognition.
Sales of real estate assets are accounted for under ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets, which provides for revenue recognition based on the transfer of control. There should be no change in revenue recognition for sales in which the Company has no continuing involvement. ASU 2017-05 addresses revenue recognition related to property sales in which the Company has continuing involvement and may require full gain recognition.
In its adoption of ASU 2017-05, the Company identified one unconsolidated affiliate, CBL/T-C, LLC, in which the Company recorded a partial sale of real estate assets in 2011, and recorded a cumulative effect adjustment that represents a gain of $57,850 as of January 1, 2018. Additionally, in conjunction with the transfer of land in the formation of a new joint venture in 2017, the Company recorded $901 related to this transaction as a cumulative effect adjustment as of January 1, 2018.    
See Note 2 for additional information about these accounting standards.
Contract Balances
A summary of the Company's contract assets activity during the ninesix months ended SeptemberJune 30, 20182019 is presented below:
  Contract Assets
Balance as of December 31, 2018 $289
Tenant openings (139)
Executed leases 25
Balance as of March 31, 2019 175
Tenant openings (139)
Executed leases 190
Balance as of June 30, 2019 $226

  Contract Assets
Balance as of January 1, 2018 (1)
 $460
Tenant openings (375)
Executed leases 525
Balance as of September 30, 2018 $610

(1)
In conjunction with the initial entry to record contract assets, $166 was also recorded in investments in unconsolidated affiliates in the condensed consolidated balance sheets to eliminate
A summary of the Company's portion related to two unconsolidated affiliates.
There was no change to the $98 contract liability recorded on January 1, 2018,activity during the ninesix months ended SeptemberJune 30, 2018.2019 is presented below:
  Contract Liability
Balance as of December 31, 2018 $265
Completed performance obligation (4)
Contract obligation —
Balance as of March 31, 2019 261
Completed performance obligation —
Contract obligation —
Balance as of June 30, 2019 $261


The Company has the following contract balances as of SeptemberJune 30, 2018:2019:
 
As of
September 30, 2018
 Expected Settlement Period 
As of
June 30, 2019
 Expected Settlement Period
DescriptionFinancial Statement Line Item 2018 2019 2020 2023Financial Statement Line Item 
2019 (1)
 2020 2021 2022 2023
Contract assets (1)(2)
Management, development and leasing fees $610
 $(213) $(389) (4) $(4)Management, development and leasing fees $226
 $(155) $(25) $(42) $—
 $(4)
Contract liability (2)(3)
Other rents 98
 (49) (49) —
 —
Other rents 261
 (99) (54) (54) (54) —
(1)Reflects fiscal period July 1, 2019 through December 31, 2019.
(2)
Represents leasing fees recognized as revenue in the period in which the lease is executed. Under certain third party and unconsolidated affiliates' contracts, the remaining 50% of the commissions are paid when the tenant opens. The tenant typically opens within a year, unless the project is in development.
(2)(3)Relates to a contract in which the Company received advance payments in the initial year of the multi-year contract.
Revenues
Sales taxes are excluded from revenues. The following table presents the Company's revenues disaggregated by revenue source:
 Three Months Ended
September 30, 2018		 
Nine Months Ended
September 30, 2018
 
Three Months Ended
June 30, 2019
 
Three Months Ended
June 30, 2018
 Six Months Ended
June 30, 2019		 Six Months Ended
June 30, 2018
Leasing revenues (1)
 $200,731
 $621,016
Rental revenues (1)
 $185,393
 $207,568
 $376,373
 $420,297
Revenues from contracts with customers (ASC 606):            
Operating expense reimbursements (2)
 1,682
 6,062
 2,061
 2,168
 4,204
 4,511
Management, development and leasing fees (3)
 2,658
 8,022
 2,586
 2,643
 5,109
 5,364
Marketing revenues (4)
 1,124
 3,374
 1,218
 928
 2,092
 2,223
 5,464
 17,458
 5,865
 5,739
 11,405
 12,098
            
Other revenues 683
 3,202
 2,119
 1,291
 3,629
 2,403
Total revenues(5) $206,878
 $641,676
 $193,377
 $214,598
 $391,407
 $434,798
(1)
Revenues from leases that commenced subsequent to December 31, 2018 are accounted for in accordance with ASC 842, Leases, whereas all leases existing prior to that date are accounted for in accordance with ASC 840, Leases. See Note 4.
(2)
Includes $1,6211,892 in the Malls segment and $61169 in the All Other segment for the three months ended SeptemberJune 30, 2018. Includes 2019, and includes $5,6602,083 in the Malls segment and $40285 in the All Other segment for the ninethree months ended SeptemberJune 30, 2018. See description below.Includes $4,084 in the Malls segment and $120 in the All Other segment for the six months ended June 30, 2019, and includes $4,273 in the Malls segment and $238 in the All Other segment for the six months ended June 30, 2018.
(3)Included in All Other segment.
(4)
Includes $1,1191,217 in the Malls segment and $51 in the All Other segment for the three months ended SeptemberJune 30, 2018. Includes 2019, and includes $3,362927 in the Malls segment and $121 in the All Other segment for the ninethree months ended SeptemberJune 30, 2018. Includes $2,093 in the Malls segment and $(1) in the All Other segment for the six months ended June 30, 2019, and includes $2,221 in the Malls segment and $2 in the All Other segment for the six months ended June 30, 2018. See description below.
(5)Sales taxes are excluded from revenues.
See Note 910 for information on the Company's segments.
Leasing Revenues
The majority of the Company’s revenues are earned through the lease of space at its properties. Lease revenues include minimum rent, percentage rent, other rents and reimbursements from tenants for real estate taxes, insurance, common area maintenance ("CAM") and other operating expenses as provided in the lease agreements.
Minimum rental revenue from operating leases is recognized on a straight-line basis over the initial terms of the related leases. Certain tenants are required to pay percentage rent if their sales volumes exceed thresholds specified in their lease agreements. Percentage rent is recognized as revenue when the thresholds are achieved and the amounts become determinable.
The Company receives reimbursements from tenants for real estate taxes, insurance, CAM and other recoverable operating expenses as provided in the lease agreements. Tenant reimbursements are recognized when earned in accordance with the tenant lease agreements. Tenant reimbursements related to certain capital expenditures are billed to tenants over periods of 5 to 15 years and are recognized as revenue in accordance with the underlying lease terms.

Revenue from Contracts with Customers
Operating expense reimbursements
Under operating and other agreements with third parties whichthat own anchor or outparcel buildings at the Company's properties and pay no rent, the Company receives reimbursements for certain operating expenses such as utilities, ring road and parking lot maintenance, landscaping and other fees. These arrangements are primarily either set at a fixed rate with rate increases typically every five years or are on a variable (pro rata) basis, typically as a percentage of costs allocated based on square footage or sales. The majority of these contracts have an initial term and one or more extension options, which cumulatively approximate 50 or more years as historically the initial term and any extension options are reasonably certain of being executed by the third party. The standalone selling price of each performance obligation is determined based on the terms of the contract, which typically assign a price to each performance obligation that directly relates to the value the customer receives for the services being provided. Revenue is recognized as services are transferred to the customer. Variable consideration is based on historical experience and is generally recognized over time using the

cost-to-cost method of measurement because it most accurately depicts the Company's performance in satisfying the performance obligation. The cumulative catch-up method is used to recognize any adjustments in variable consideration estimates. Under this method, any adjustment is recognized in the period it is identified.
Management, development and leasing fees
The Company earns revenue from contracts with third parties and unconsolidated affiliates for property management, leasing, development and other services. These contracts are accounted for on a month-to-month basis if the agreement does not contain substantive penalties for termination. The majority of the Company's contracts with customers are accounted for on a month-to-month basis. The standalone selling price of each performance obligation is determined based on the terms of the contract, which typically assign a price to each performance obligation that directly relates to the value the customer receives for the services being provided. These contracts generally are for the following:
Management fees - Management fees are charged as a percentage of revenues (as defined in the contract) and recognized as revenue over time as services are provided.
Leasing fees - Leasing fees are charged for newly executed leases and lease renewals and are recognized as revenue upon lease execution, when the performance obligation is completed. In cases for which the agreement specifies 50% of the leasing commission will be paid upon lease execution with the remainder paid when the tenant opens, the Company estimates the amount of variable consideration it expects to receive by evaluating the likelihood of tenant openings using the most likely amount method and records the amount as an unbilled receivable (contract asset).
•
Leasing fees - Leasing fees are charged for newly executed leases and lease renewals and are recognized as revenue upon lease execution, when the performance obligation is completed. In cases for which the agreement specifies 50% of the leasing commission will be paid upon lease execution with the remainder paid when the tenant opens, the Company estimates the amount of variable consideration it expects to receive by evaluating the likelihood of tenant openings using the most likely amount method and records the amount as an unbilled receivable (contract asset).
Development fees - Development fees may be either set as a fixed rate in a separate agreement or be a variable rate based on a percentage of work costs. Variable consideration related to development fees is generally recognized over time using the cost-to-cost method of measurement because it most accurately depicts the Company's performance in satisfying the performance obligation. Contract estimates are based on various assumptions including the cost and availability of materials, anticipated performance and the complexity of the work to be performed. The cumulative catch-up method is used to recognize any adjustments in variable consideration estimates. Under this method, any adjustment is recognized in the period it is identified.
Development and leasing fees received from an unconsolidated affiliate are recognized as revenue only to the extent of the third-party partner’s ownership interest. The Company's share of such fees areis recorded as a reduction to the Company’s investment in the unconsolidated affiliate.
Marketing revenues
The Company earns marketing revenues from advertising and sponsorship agreements. These fees may be for tangible items in which the Company provides advertising services and creates signs and other promotional materials for the tenant or may be arrangements in which the customer sponsors a play area or event and receives specified brand recognition and other benefits over a set period of time. Revenue related to advertising services is recognized as goods and services are provided to the customer. Sponsorship revenue is recognized on a straight-line basis over the time period specified in the contract.

Performance obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. If the contract does not specify the revenue by performance obligation, the Company allocates the transaction price to each performance obligation based on its relative standalone selling price. Such prices are generally determined using prices charged to customers or using the Company’s expected cost plus margin. Revenue is recognized as the Company’s performance obligations are satisfied over time, as services are provided, or at a point in time, such as leasing a space to earn a commission. Open performance obligations are those in which the Company has not fully or has partially provided the applicable good or services to the customer as specified in the contract. If consideration is received in advance of the Company’s performance, including amounts which are refundable, recognition of revenue is deferred until the performance obligation is satisfied or amounts are no longer refundable.

Practical Expedients
The Company does not disclose the value of open performance obligations for (1) contracts with an original expected duration of one year or less and (2) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice, which primarily relate to services performed for certain operating expense reimbursements and management, leasing and development activities, as described above. Performance obligations related to pro rata operating expense reimbursements for certain noncancellable contracts are disclosed below.
Outstanding Performance Obligations
The Company has outstanding performance obligations related to certain noncancellable contracts with customers for which it will receive pro ratafixed operating expense reimbursements for providing certain maintenance and other services as described above. As of SeptemberJune 30, 2018,2019, the Company expects to recognize these amounts as revenue over the following periods:
Performance obligation Less than 5 years 5-20 years Over 20 years Total
Fixed operating expense reimbursements $25,233
 $48,825
 $48,226
 $122,284
Performance obligation Less than 5 years 5-20 years Over 20 years Total
Pro rata operating expense reimbursements $981
 $4,899
 $33,581
 $39,461

The Company evaluates its performance obligations each period and makes adjustments to reflect any known additions or cancellations. Performance obligations related to variable consideration which is based on sales is constrained.
Note 4 – Leases
Adoption of ASU 2016-02, and all related subsequent amendments
The Company adopted ASC 842 (which includes ASU 2016-02 and all related subsequent amendments) on January 1, 2019 and applied the guidance to leases that commenced on or after January 1, 2019. Historical amounts for prior periods were not adjusted and will continue to be reported using the guidance in ASC 840, Leases.
To determine whether a contract contains a lease, the Company evaluated its contracts and verified that there was an identified asset and that the Company, or the tenant, has the right to obtain substantially all the economic benefits from the use of the asset throughout the contract term. If a contract is determined to contain a lease, the lease is evaluated to determine whether it is an operating or financing lease, if the Company is the lessee, or the lease is evaluated to determine whether it is an operating, direct financing or sales-type lease, if the Company is the lessor. After determining that the contract contains a lease, the Company identified the lease component and any nonlease components associated with that lease component, and through the Company’s election to combine lease and nonlease components for all asset classes, combined the components into a single lease component within each applicable lease where the Company is the lessor.
The discount rate to be used for each lease was determined by assessing the Company’s debt information, assessing the credit rating of the Company and the Company’s debt, estimating a synthetic “secured” credit rating for the Company and estimating an appropriate incremental borrowing rate. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term.
See Note 2 for additional information about these accounting standards.
Lessor
Rental Revenues
The majority of the Company’s revenues are earned through the lease of space at its properties. All of the Company's leases with tenants for the use of space at our properties are classified as operating leases. Rental revenues include minimum rent, percentage rent, other rents and reimbursements from tenants for real estate taxes, insurance, common area maintenance ("CAM") and other operating expenses as provided in the lease agreements. The option to extend or terminate our leases is specific to each underlying tenant agreement. Typically, the Company's leases contain penalties for early termination. The Company doesn't have any leases that convey the right for the lessee to purchase the leased asset.

Minimum rental revenue from operating leases is recognized on a straight-line basis over the initial terms of the related leases. Certain tenants are required to pay percentage rent if their sales volumes exceed thresholds specified in their lease agreements. Percentage rent is recognized as revenue when the thresholds are achieved and the amounts become determinable.
The Company receives reimbursements from tenants for real estate taxes, insurance, CAM and other recoverable operating expenses as provided in the lease agreements. Any tenant reimbursements that require fixed payments are recognized on a straight-line basis over the initial terms of the related leases, whereas any variable payments are recognized when earned in accordance with the tenant lease agreements. Tenant reimbursements related to certain capital expenditures are billed to tenants over periods of 5 to 15 years.
Additionally, ASU 2018-19 clarifies that operating lease receivables are within the scope of ASC 842. Therefore, in conjunction with our adoption of ASC 842 on January 1, 2019, the Company began recognizing changes in the collectability assessment of its operating lease receivables as a reduction of rental revenues, rather than as a property operating expense. As a result, the Company recognized $152 and $1,692 of uncollectable operating lease receivables as a reduction of rental revenues for the three months and six months ended June 30, 2019, respectively, and recognized $745 and $2,786 of uncollectable operating lease receivables as a property operating expense for the three months and six months ended June 30, 2018, respectively.
The components of rental revenues are as follows:
  Three Months Ended
June 30, 2019		 Six Months Ended
June 30, 2019
Fixed lease payments $151,730
 $311,002
Variable lease payments 33,663
 65,371
Total rental revenues $185,393
 $376,373
The undiscounted future fixed lease payments to be received under the Company's operating leases as of June 30, 2019, are as follows:
Years Ending December 31, Operating Leases
2019 (1)
 $276,503
2020 518,603
2021 450,475
2022 373,187
2023 307,880
2024 239,693
Thereafter 593,446
Total undiscounted lease payments $2,759,787
(1)Reflects rental payments for the fiscal period July 1, 2019 through December 31, 2019.
As required by the Comparative Under ASC 840 Option, which is a transitional amendment that allows for the presentation of comparative periods in the year of adoption under ASC 840 (the former leasing guidance), the Company's future minimum rental income from lessees under non-cancellable operating leases where the Company is the lessor as of December 31, 2018 is also presented below:
Years Ending December 31, Operating Leases
2019 $497,014
2020 426,228
2021 363,482
2022 294,441
2023 234,191
Thereafter 531,792
Total $2,347,148


Lessee
The Company has eight ground leases and one office lease in which it is a lessee. The maturities of these leases range from 2021 to 2089 and generally provide for renewal options ranging from five to ten years. We included the renewal options in our lease terms for purposes of calculating our lease liability and ROU asset because we have no plans to cease operating our assets associated with each ground lease. The ground leases relate to properties where the Company owns the buildings and improvements, but leases the underlying land. The lease payments on the majority of the ground leases are fixed, but in the instances where they are variable they are either based on the CPI index or a percentage of sales. The one office lease is subleased as of June 30, 2019. As of June 30, 2019, these leases have a weighted-average remaining lease term of 39.3 years and a weighted-average discount rate of 8.0%.
The Company's ROU asset and lease liability are presented in the condensed consolidated balance sheets within intangible lease assets and other assets and accounts payable and accrued liabilities, respectively. A summary of the Company's ROU asset and lease liability activity during the six months ended June 30, 2019 is presented below:
  ROU Asset Lease Liability
Balance as of January 1, 2019 $4,160
 $4,074
Cash reduction (242) (242)
Noncash increase 127
 210
Balance as of June 30, 2019 $4,045
 $4,042

The components of lease expense are presented below:
  Three Months Ended
June 30, 2019		 Six Months Ended
June 30, 2019
Lease expense:    
Operating lease expense $207
 $425
Variable lease expense (2) 30
Rent Expense $205
 $455

The undiscounted future lease payments to be paid under the Company's operating leases as of June 30, 2019, are as follows:
Year Ending December 31, 
Operating
Leases
2019 (1)
 $317
2020 567
2021 608
2022 332
2023 284
2024 263
Thereafter 12,019
Total undiscounted lease payments $14,390
Less imputed interest (10,348)
Lease Liability $4,042
(1)Reflects rental payments for the fiscal period July 1, 2019 through December 31, 2019.

As required by the Comparative Under ASC 840 Option, which is a transitional amendment that allows for the presentation of comparative periods in the year of adoption under ASC 840 (the former leasing guidance), the Company's future obligations to be paid under the Company's operating leases where the Company is the lessee as of December 31, 2018 is also presented below:
2019 $504
2020 610
2021 517
2022 321
2023 281
Thereafter 12,297
  $14,530

Practical Expedients
In regard to leases that commenced before January 1, 2019, the Company elected to use a package of practical expedients to not reassess whether any expired or existing contracts are or contain a lease, to not reassess lease classification for any expired or existing leases, and to not reassess initial direct costs for any existing leases. The Company also elected a practical expedient to not assess whether existing or expired land easements that were not previously accounted for as leases under ASC 840 are or contain a lease under ASC 842. Additionally, the Company elected a practical expedient by class of underlying asset applied to all leases to elect not to separate lease and nonlease components as long as the lease and at least one nonlease component have the same timing and pattern of transfer and the lease is classified as an operating lease. The combined component is being accounted for under ASC 842. The Company made an accounting policy election to exclude sales and other similar taxes from revenues, and instead account for them as costs of the lessee. Lastly, the Company has elected not to apply the recognition requirements of ASC 842 to short-term leases.
See Note 2 for additional information about these accounting standards.

Note 45 – Fair Value Measurements
The Company has categorized its financial assets and financial liabilities that are recorded at fair value into a hierarchy in accordance with ASC 820, Fair Value Measurements and Disclosure, ("ASC 820") based on whether the inputs to valuation techniques are observable or unobservable.  The fair value hierarchy contains three levels of inputs that may be used to measure fair value as follows:
Level 1 –Inputs represent quoted prices in active markets for identical assets and liabilities as of the measurement date.
Level 2 –Inputs, other than those included in Level 1, represent observable measurements for similar instruments in active markets, or identical or similar instruments in markets that are not active, and observable measurements or market data for instruments with substantially the full term of the asset or liability.
Level 3 –Inputs represent unobservable measurements, supported by little, if any, market activity, and require considerable assumptions that are significant to the fair value of the asset or liability.  Market valuations must often be determined using discounted cash flow methodologies, pricing models or similar techniques based on the Company’s assumptions and best judgment.
The asset or liability's fair value within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Under ASC 820, fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability in an orderly transaction at the measurement date and under current market conditions. Valuation techniques used maximize the use of observable inputs and minimize the use of unobservable inputs and consider assumptions such as inherent risk, transfer restrictions and risk of nonperformance.

Fair Value Measurements on a Recurring Basis
The carrying values of cash and cash equivalents, receivables, accounts payable and accrued liabilities are reasonable estimates of their fair values because of the short-term nature of these financial instruments.  Based on the interest rates for similar financial instruments, the carrying value of mortgage and other notes receivable is a reasonable estimate of fair value.  The estimated fair value of mortgage and other indebtedness was $3,905,211$3,479,729 and $4,199,357$3,740,431 at SeptemberJune 30, 20182019 and December 31, 2017,2018, respectively.  The fair value was calculated using Level 2 inputs by discounting future cash flows for mortgage and other indebtedness using estimated market rates at which similar loans would be made currently.
Fair Value Measurements on a Nonrecurring Basis
The Company measures the fair value of certain long-lived assets on a nonrecurring basis, through quarterly impairment testing or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company considers both quantitative and qualitative factors in its impairment analysis of long-lived assets. Significant quantitative factors include historical and forecasted information for each property such as net operating income ("NOI"), occupancy statistics and sales levels. Significant qualitative factors used include market conditions, age and condition of the property and tenant mix. Due to the significant unobservable estimates and assumptions used in the valuation of long-lived assets that experience impairment, the Company classifies such long-lived assets under Level 3 in the fair value hierarchy. Level 3 inputs primarily consist of sales and market data, independent valuations and discounted cash flow models.
Long-lived Assets Measured at Fair Value in 20182019
The following table sets forth information regarding the Company's assets that are measured at fair value on a nonrecurring basis and related impairment charges for the ninesix months ended SeptemberJune 30, 2019:
   Fair Value Measurements at Reporting Date Using  
 Total 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Loss on
Impairment
Long-lived assets$127,319
 $—
 $—
 $127,319
 $66,433

During the six months ended June 30, 2019, the Company recognized an impairment of real estate of $66,662 related to three malls and one community center.
Impairment Date Property Location 
Segment
Classification
 
Loss on
Impairment
 
Fair
Value
March 
Greenbrier Mall (1)
 Chesapeake, VA Mall $22,770
 $56,300
March/April 
Honey Creek Mall (2)
 Terre Haute, IN Mall 2,045
 14,360
June 
The Forum at Grandview (3)
 Madison, MS All Other 8,582
 31,559
June 
EastGate Mall (4)
 Cincinnati, OH Mall 33,265
 25,100
January/March 
Other adjustments (5)
 Various Mall (229) —
        $66,433
 $127,319
(1)
In accordance with the Company's quarterly impairment process, the Company wrote down the book value of the mall to its estimated fair value of $56,300. The mall has experienced a decline in cash flows due to store closures and rent reductions. Additionally, one anchor was vacant as of the date of impairment. Management determined the fair value of Greenbrier Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 11.0% and a discount rate 11.5%.
(2)
During the quarter ended March 31, 2019, the Company adjusted the book value of the mall to the net sales price of $14,360 based on a signed contract with a third party buyer, adjusted to reflect estimated disposition costs. The mall was sold in April 2019 and $(239) was recorded related to a true-up of closing costs. See Note 6 for additional information.
(3)
The Company adjusted the book value to the net sales price of $31,559 based on a signed contract with a third party buyer, adjusted to reflect estimated disposition costs. The property was classified as held for sale at June 30, 2019 and was sold in July 2019. See Note 6 for additional information.

(4)
In accordance with the Company's quarterly impairment process, the Company wrote down the book value of the mall to its estimated fair value of $25,100. The mall has experienced a decline in cash flows due to store closures and rent reductions. Management determined the fair value of EastGate Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of ten years, with a sale at the end of the holding period, a capitalization rate of 14.5% and a discount rate 15.0%.
(5)Related to true-ups of estimated expenses to actual expenses for properties sold in prior periods.
Long-lived Assets Measured at Fair Value in 2018
The following table sets forth information regarding the Company's assets that were measured at fair value on a nonrecurring basis and related impairment charges for the six months ended June 30, 2018:
   Fair Value Measurements at Reporting Date Using  
 Total 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Loss on
Impairment
Long-lived assets$34,000
 $—
 $—
 $34,000
 $70,044
   Fair Value Measurements at Reporting Date Using  
 Total 
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Loss on
Impairment
Long-lived assets$42,100
 $—
 $—
 $42,100
 $84,644

During the ninesix months ended SeptemberJune 30, 2018, the Company recognized an impairment of real estate of $84,644$70,044 related to two malls and undeveloped land:malls:
Impairment Date Property Location 
Segment
Classification
 
Loss on
Impairment
 
Fair
Value
 Property Location 
Segment
Classification
 
Loss on
Impairment
 
Fair
Value
March 
Janesville Mall (1)
 Janesville, WI Malls $18,061
 $—
 
Janesville Mall (1)
 Janesville, WI Malls $18,061
 $—
(2) 
June 
Cary Towne Center (2)
 Cary, NC Malls 51,985
 34,000
 
Cary Towne Center (3)
 Cary, NC Malls 51,983
 34,000
 
September 
Vacant land (3)
 D'Iberville, MS All Other 14,598
 8,100
 $84,644
 $42,100
 $70,044
 $34,000
 
(1)
The Company adjusted the book value of the mall to its estimated fair value based upon athe net sales price of $17,640 in a signed contract with a third party buyer, adjusted to reflect estimated disposition costs. The mall was classified as held for sale as of June 30, 2018 until its sale insold in July 2018. See Note 56 for additional information.
(2)The long-lived asset was not included in the Company's condensed consolidated balance sheets at December 31, 2018 as the Company no longer had an interest in the property.
(3)
In June 2018, the Company was notified by IKEA that, as a result of a shift in its corporate strategy, it was terminating the contract to purchase land at the mall upon which it would develop and open a store. Under the terms of the interest-only non-recourse loan secured by the mall, the loan maturedmatures on the date the IKEA contract terminatedterminates if that date wasis prior to the scheduled maturity date of March 5, 2019. The Company engaged in conversations with the lender regarding a potential restructure of the loan. Based on the results of these conversations, the Company concluded that an impairment was required because it was unlikely to recover the asset's net carrying value through future cash flows. Management determined the fair value of Cary Towne Center using a discounted cash flow methodology. The discounted cash flow used assumptions including a 10-year holding period, a capitalization rate of 12.0% and a discount rate of 13%. See Note 78 for information related to the mortgage loan.
(3)
In accordance with the Company's quarterly impairment review process, the Company wrote down the book value of land to its estimated value of $8,100. The Company evaluated comparable land parcel transactions and determined that $8,100 was the land's estimated fair value.

Long-lived Assets Measured at Fair Value in 2017
The following table sets forth information regarding the Company's assets, which are included in the Company's condensed consolidated balance sheets as of September 30, 2018, that were measured at fair value on a nonrecurring basis and related impairment charges for the year ended December 31, 2017:
   
Fair Value Measurements
at Reporting Date Using
 Total 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Long-lived assets$81,350
 $—
 $—
 $81,350
During the year ended December 31, 2017, the Company wrote down the book value of the following properties:
Impairment Date Property Location 
Segment
Classification
 
Loss on
Impairment
 
Fair
Value
June 
Acadiana Mall (1)
 Lafayette, LA Malls $43,007
 $67,300
September 
Hickory Point Mall (2)
 Forsyth, IL Malls 24,525
 14,050
        $67,532
 $81,350
(1)
In accordance with the Company's quarterly impairment review process, the Company wrote down the book value of the mall to its estimated fair value of $67,300. Management determined the fair value of Acadiana Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of 10 years, with a sale at the end of the holding period, a capitalization rate of 15.5% and a discount rate of 15.75%. The mall has experienced declining tenant sales and cash flows as a result of the downturn of the economy in its market area and was also impacted by an anchor's announcement in the second quarter 2017 that it would close its store later in 2017. The loan secured by Acadiana Mall matured in April 2017 and is in default. See Note 7 for additional information related to the mortgage loan.information.
(2)In accordance with the Company's quarterly impairment review process, the Company wrote down the book value of the mall to its estimated fair value of $14,050. Management determined the fair value of Hickory Point Mall using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of 10 years, with a sale at the end of the holding period, a capitalization rate of 18.0% and a discount rate of 19.0%.
Note 56 – Dispositions and Held for Sale
The Company evaluates its disposals utilizing the guidance in ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Based on its analysis, the Company determined that the dispositions described below do not meet the criteria for classification as discontinued operations and are not considered to be significant disposals based on its quantitative and qualitative evaluation. Thus, the results of operations of the properties described below, as well as any related gains or losses, are included in net income for all periods presented, as applicable.
20182019 Dispositions
Net proceeds realized from the 20182019 dispositions listed below were used to reduce the outstanding balancesbalance on the Company's credit facilities unless otherwise noted.
facility. The following is a summary of the Company's 20182019 dispositions:

        Sales Price  
Sales Date Property Property Type Location Gross Net Gain
March Gulf Coast Town Center - Phase III All Other Ft. Myers, FL $9,000
 $8,769
 $2,236
July 
Janesville Mall (1)
 Malls Janesville, WI 18,000
 17,783
 —
September 
Statesboro Crossing (2)
 All Other Statesboro, GA 21,500
 10,532
 3,215
September Prior sales adjustment Malls   —
 —
 92
        $48,500
 $37,084
 $5,543
        Sales Price  
Sales Date Property Property Type Location Gross Net Gain
April 
Honey Creek Mall (1)
 Mall Terre Haute, IN $14,600
 $14,360
 $—
April The Shoppes at Hickory Point Mall Forsyth, IL 2,508
 2,407
 1,326
June Courtyard by Marriott at Pearland Town Center All Other Pearland, TX 15,100
 14,795
 1,910
        $32,208
 $31,562
 $3,236
(1) The Company recognized a loss on impairment of $2,284 in March 2019 when it adjusted the book value of the mall to the net sales price based on a signed contract with a third party buyer and recognized $(239) in April 2019 related to a true-up of closing costs. See Note 5 for additional information.
The Company also realized gains of $2,100 related to the sale of one outparcel and $433 related to land contributed in the formation of the Parkdale Self Storage, LLC joint venture (See Note 7 for additional information) during the three and six months ended June 30, 2019. Also, the Company realized losses of $(242) and $(14) related to costs incurred during the three and six months ended June 30, 2019, respectively, for outparcel sales that occurred in prior periods.
The Company recognized a gain on extinguishment of debt for the properties listed below, which represented the amount by which the outstanding debt balance exceeded the net book value of the property as of the transfer date. See Note 8 for more information. The following is a summary of these dispositions:
Sale/Transfer
Date
       
Balance of
Non-recourse
Debt
 
Gain on
Extinguishment
of Debt
 Property Property Type Location  
January 
Acadiana Mall (1)
 Mall Lafayette, LA $119,760
 $61,796
January 
Cary Towne Center (2)
 Mall Cary, NC 43,716
 9,926
        $163,476
 $71,722
(1)
The Company recognized atransferred title to the mall to the mortgage holder in satisfaction of the non-recourse debt secured by the property. A loss on impairment of real estate of $18,06143,007 was recorded in 2018 when it adjusted2017 to write down the book value of the mall to its then estimated fair value. The Company also recorded $305 of aggregate non-cash default interest expense during the first quarter of 2019.
(2)
The Company sold the mall for $31,500 and the net proceeds from the sale were used to satisfy a portion of the loan secured by the mall. The remaining principal balance was forgiven. The Company recorded a loss on impairment of real estate of $54,678 during 2018 to write down the book value of the mall to its then estimated fair value. The Company also recorded $237 of aggregate non-cash default interest expense during the first quarter of 2019.

In a separate transaction, the Company also sold an anchor store parcel and vacant land at Acadiana Mall, which were not collateral on the loan, for a cash price of $4,000. A loss on impairment of real estate of $1,593 was recorded in 2018 to write down the book value of the anchor store parcel and vacant land to its then estimated fair value.
based upon a contract with a third party buyer, adjusted to reflect estimated disposition costs. See Note 4. 2019 Held for Sale
The mall wasfollowing properties were classified as held for sale as of June 30, 2018 until its sale in July 2018.2019:
(2)
In conjunction with the sale of this 50/50 consolidated joint venture, the loan secured by the community center was retired. See Note 7 for more information. The Company received 100% of the net proceeds from the sale in accordance with the terms of the joint venture agreement.
Property Property Type Location Total Assets Total Liabilities 
Percentage of
the Company's
Total Assets
850 Greenbrier Circle (1)
 All Other Chesapeake, VA $10,233
 $35
 0.2%
Foothills Plaza - Kroger (1)
 All Other Maryville, TN 1,091
 —
 —%
The Forum at Grandview (1)
 All Other Madison, MS 32,195
 569
 0.6%
High Point - Barnes & Noble (1)
 All Other High Point, NC 1,055
 59
 —%
      $44,574
 $663
  
(1) The Company also realized a gain of $10,455 primarily related to the sale of 10 outparcels and proceeds from several outparcels sold through eminent domain proceedings during the nine months ended September 30, 2018.     
2018 Held for Sale
Parkway Plaza was classified as held for sale at September 30, 2018 and the $14,807 on the condensed consolidated balance sheets represents the Company's related net investment in real estate assets at September 30, 2018, which approximates 0.3% of the Company's total assets as of September 30, 2018. There are no other material assets or liabilities associated with this community center. The community centerproperty was sold subsequent to SeptemberJune 30, 2018.2019. See Note 1415 for additional information.

Note 67 – Unconsolidated Affiliates and Noncontrolling Interests
Unconsolidated Affiliates
Although the Company had majority ownership of certain joint ventures during 20182019 and 2017,2018, it evaluated the investments and concluded that the other partners or owners in these joint ventures had substantive participating rights, such as approvals of:
the pro forma for the development and construction of the project and any material deviations or modifications thereto;
the site plan and any material deviations or modifications thereto;
the conceptual design of the project and the initial plans and specifications for the project and any material deviations or modifications thereto;
any acquisition/construction loans or any permanent financings/refinancings;
the annual operating budgets and any material deviations or modifications thereto;
the initial leasing plan and leasing parameters and any material deviations or modifications thereto; and
any material acquisitions or dispositions with respect to the project.
As a result of the joint control over these joint ventures, the Company accounts for these investments using the equity method of accounting.
At SeptemberJune 30, 2018,2019, the Company had investments in 1922 entities, which are accounted for using the equity method of accounting. The Company's ownership interest in these unconsolidated affiliates ranges from 10.0% to 65.0%. Of these entities, 1415 are owned in 50/50 joint ventures.
20182019 Activity - Unconsolidated Affiliates
G&I VIII CBL TriangleBullseye, LLC
In September 2018, G&I VIII CBL Trianglethe Company entered into a joint venture, Bullseye, LLC, recognized an impairment of $89,826 to write down Triangle Town Center's net book value of $123,453develop a vacant land parcel adjacent to its estimated fair value of approximately $33,600. Management determinedHamilton Corner in Chattanooga, TN. During January 2019, the fair value using a discounted cash flow methodology. The discounted cash flow used assumptions including a holding period of 10 years, with a sale atjoint venture closed on the endpurchase of the holding period,land parcel for a capitalization rategross purchase price of 15% and a discount rate of 15%. The mall has experienced declining tenant sales over the past few years and is facing challenges from store closures.$3,310. The Company recorded $1,022 as its share of the loss on impairment recognized by the unconsolidated joint venture, which reduced the carrying value of the Company's investmenthas a 20% membership interest in the joint venture to zero as of September 30, 2018.venture. Additionally, the Company made no initial investment and has no future funding obligations. The unconsolidated affiliate is a variable interest entity ("VIE").

Parkdale Self Storage, at Mid Rivers, LLC
In April 2018,May 2019, the Company entered into a 50/50 joint venture, Parkdale Self Storage, at Mid Rivers, LLC, to develop a self-storage facility adjacent to Mid RiversParkdale Mall. The Company recorded a $387$433 gain on investmentsale of real estate assets related to land whichthat it contributed to the joint venture. The unconsolidated affiliate is a VIE. See additional information in Variable Interest Entities below. In conjunction with the formation of the joint venture, the unconsolidated affiliate closed on a construction loan. See details below under 20182019 Financings.
Condensed Combined Financial Statements - Unconsolidated Affiliates
Condensed combined financial statement information of the unconsolidated affiliates is as follows:
 September 30,
2018		 December 31,
2017
ASSETS   
Investment in real estate assets$2,025,289
 $2,089,262
Accumulated depreciation(658,163) (618,922)
 1,367,126
 1,470,340
Developments in progress68,768
 36,765
Net investment in real estate assets1,435,894
 1,507,105
Other assets186,912
 201,114
    Total assets$1,622,806
 $1,708,219
    
LIABILITIES   
Mortgage and other indebtedness, net$1,322,144
 $1,248,817
Other liabilities42,986
 41,291
    Total liabilities1,365,130
 1,290,108
    
OWNERS' EQUITY   
The Company183,392
 216,292
Other investors74,284
 201,819
Total owners' equity257,676
 418,111
    Total liabilities and owners' equity$1,622,806
 $1,708,219
 June 30,
2019		 December 31,
2018
ASSETS   
Investment in real estate assets$2,103,300
 $2,097,088
Accumulated depreciation(701,616) (674,275)
 1,401,684
 1,422,813
Developments in progress23,431
 12,569
Net investment in real estate assets1,425,115
 1,435,382
Other assets172,545
 188,521
    Total assets$1,597,660
 $1,623,903

 Total for the Three Months
Ended September 30,
 2018 2017
Total revenues$54,579
 $57,395
Net income (loss) (1)
$(85,136) $7,868
 June 30,
2019		 December 31,
2018
LIABILITIES   
Mortgage and other indebtedness, net$1,315,885
 $1,319,949
Other liabilities37,152
 39,777
    Total liabilities1,353,037
 1,359,726
    
OWNERS' EQUITY   
The Company179,120
 191,050
Other investors65,503
 73,127
Total owners' equity244,623
 264,177
    Total liabilities and owners' equity$1,597,660
 $1,623,903




 Total for the Three Months
Ended June 30,
 2019 2018
Total revenues$54,230
 $55,083
Net income (1)
$2,993
 $7,242
(1)
The Company's share of net income (loss) is $1,7621,872 and $4,7064,368 for the three months ended SeptemberJune 30, 20182019 and 20172018, respectively.
 Total for the Six Months
Ended June 30,
 2019 2018
Total revenues$110,097
 $112,264
Net income (1)
$9,003
 $12,551
 Total for the Nine Months
Ended September 30,
 2018 2017
Total revenues$166,843
 $175,250
Net income (loss) (1)
$(72,585) $24,980

(1)
The Company's share of net income (loss) is $9,8695,180 and $16,4048,107 for the ninesix months ended SeptemberJune 30, 20182019 and 20172018, respectively.
Financings - Unconsolidated Affiliates
All of the debt on the properties owned by the unconsolidated affiliates is non-recourse, except for debt secured by Ambassador Infrastructure, Hammock Landing, The Pavilion at Port Orange, The Shoppes at Eagle Point

and the self-storage developments adjacent to EastGate Mall, and Mid Rivers Mall and Parkdale Mall. See Note 1112 for a description of guarantees the Operating Partnership has issued related to these unconsolidated affiliates.
20182019 Financings
The Company's unconsolidated affiliates had the following loan activity in 2018:2019:
Date Property Stated
Interest Rate		 Maturity Date 
Amount
Financed or
Extended
 Property Stated
Interest Rate		 Maturity Date 
Amount
Financed or
Extended
April 
CoolSprings Galleria (1)
 4.839% May 2028 $155,000
April 
Self-storage development - Mid Rivers Mall (2)
 LIBOR + 2.75% April 2023 5,987
May Hammock Landing - Phase I LIBOR + 2.25% February 2021
(3) 
 41,997
 
Parkdale Self Storage (1)
 5.25%
(2) 
 July 2024 $6,500
May Hammock Landing - Phase II LIBOR + 2.25% February 2021
(3) 
 16,217
May The Pavilion at Port Orange LIBOR + 2.25% February 2021
(3) 
 56,738
(1)
CBL/T-C, LLC, a 50/50 joint venture, closed on a non-recourse loan. Proceeds from the loan were used to retire a $97,732 loan, which was due to mature in June 2018. See 2018 Loan Repayment below for more information. The Company's share of excess proceeds were used to reduce outstanding balances on its credit facilities.
(2)
Parkdale Self Storage, at Mid Rivers, LLC, a 50/50 joint venture, closed on a construction loan with a total borrowing capacity of up to $5,987$6,500 for the development of a climate controlled self-storage facility adjacent to Mid RiversParkdale Mall in St. Peters, MO.Beaumont, TX. There were no draws on the construction loan at June 30, 2019. The Operating Partnership has guaranteed a joint and several guaranty with its 50/50 partner. Therefore, the maximum guarantee is 100%of the loan. See Note 1112 for more information.
(3)(2)
The loans were amended to extend the maturity dates to February 2021. Each loan has twoone-year extension options for an outside maturity date of February 2023. The interest rate increased from ais variable rateand is the greater of 5.25% or LIBOR plus 2.0%+ 2.80%. The Operating Partnership's guaranty also increased to 50%.
2018 Loan Repayment
The loan, secured by the related unconsolidated property, was retired in 2018:
Date Property 
Interest Rate at
Repayment Date
 
Scheduled
Maturity Date
 
Principal
Balance
Repaid
April 
CoolSprings Galleria (1)
 6.98% June 2018 $97,732
(1)
The loan secured by the property was retired using a portion of the net proceeds from a $155,000 fixed-rate loan. See 2018 Financings above for more information.
Noncontrolling Interests
Noncontrolling interests consist of the following:
 As of
 
June 30,
 2019
 December 31, 2018
Noncontrolling interests:   
  Operating Partnership$41,559
 $55,917
  Other consolidated subsidiaries13,222
 12,111
 $54,781
 $68,028
  As of
  September 30, 2018 December 31, 2017
Noncontrolling interests:    
  Operating Partnership $67,476
 $86,773
  Other consolidated subsidiaries 11,799
 9,701
  $79,275
 $96,474
Common Unit Activity
In the second quarter of 2018, the Operating Partnership elected to pay cash of $2,246 to two holders of 526,510 common units of limited partnership interest in the Operating Partnership upon the exercise of their conversion rights.
In the first quarter of 2018, the Company issued 915,338 shares of common stock to a holder of 915,338 common units of limited partnership interest in the Operating Partnership in connection with the exercise of the holder's contractual exchange rights.


Variable Interest Entities
In accordance with the guidance in ASU 2015-02, Amendments to the Consolidation Analysis,and ASU 2016-17, Interests Held Through Related Parties That Are under Common Control, the Operating Partnership and certain of its subsidiaries are deemed to have the characteristics of a VIE primarily because the limited partners of these entities do not collectively possess substantive kick-out or participating rights.
The Company consolidates the Operating Partnership, which is a VIE, for which the Company is the primary beneficiary. The Company, through the Operating Partnership, consolidates all VIEs for which it is the primary beneficiary. Generally, a VIE is a legal entity in which the equity investors do not have the characteristics of a controlling financial interest or the equity investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A limited partnership is considered a VIE when the majority of the limited partners unrelated to the general partner possess neither the right to remove the general partner without cause, nor certain rights to participate in the decisions that most significantly affect the financial results of the partnership. In determining whether the Company is the primary beneficiary of a VIE, the Company considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of the Company's investment; the obligation or likelihood for the Company or other investors to provide financial support; and the similarity with and significance to the Company's business activities and the business activities of the other investors.     
Consolidated VIEs
As of SeptemberJune 30, 2018,2019, the Company had investments in 19 consolidated VIEs with ownership interests ranging from 50% to 95%.
While the Company sold Statesboro Crossing in September 2018 (see Note 5 for additional information), Statesboro Crossing, LLC retained three outparcels which were not part of the sale and the consolidated joint venture is still classified as a VIE as of September 30, 2018.
Jarnigan Road II, LLC was wholly-owned by Jarnigan Road LP. During the second quarter of 2018, its ownership was restructured such that it became a wholly-owned subsidiary of the Management Company and is now a separate reportable VIE.
Unconsolidated VIEs
The table below lists the Company's unconsolidated VIEs as of SeptemberJune 30, 2018:2019:
  
Investment in Real
Estate Joint
Ventures and
Partnerships
 
Maximum
Risk of Loss
Ambassador Infrastructure, LLC (1)
 $—
 $10,605
EastGate Storage, LLC (1)
 1,215
 6,500
G&I VIII CBL Triangle LLC (2)
 —
 —
Self Storage at Mid Rivers, LLC (1)
 1,061
 5,987
Shoppes at Eagle Point, LLC (1)
 17,519
 36,400
  
Investment in Real
Estate Joint
Ventures and
Partnerships
 
Maximum
Risk of Loss
Ambassador Infrastructure, LLC (1)
 $—
 $10,050
Bullseye, LLC 5
 5
EastGate Storage, LLC (2)
 939
 3,000
G&I VIII CBL Triangle LLC (3)
 —
 —
Parkdale Self Storage, LLC (4)
 1,125
 6,500
Self-Storage at Mid Rivers, LLC (2)
 912
 2,717
Shoppes at Eagle Point, LLC (5)
 16,344
 16,344
(1)
The debt is guaranteed by the Operating Partnership at 100%. See Note 1112 for more information.
(2)
The debt is guaranteed by the Operating Partnership at 50%. See Note 12 for more information.
(3)
In conjunction with a loss on impairment recorded in September 2018, as described above, the Company wrote down its investment in the unconsolidated 90/90/10 joint venture to zero.zero. The maximum risk of loss is limited to the basis, which is zero.zero. Subsequent to June 30, 2019, the lender foreclosed on the loan that is secured by the property. See Note 15 for more information.
(4)
The Operating Partnership has a joint and several guaranty with its 50/50 partner. Therefore, the maximum guarantee is 100%of the loan. See Note 12 for more information.
(5)
The debt is guaranteed by the Operating Partnership at a fixed amount of $12,740. See Note 12 for more information.

Note 78 – Mortgage and Other Indebtedness, Net
Debt of the Company
CBL has no indebtedness. Either the Operating Partnership or one of its consolidated subsidiaries, that it has a direct or indirect ownership interest in, is the borrower on all of the Company's debt. CBL is a limited guarantor of the Senior Unsecured Notes (the "Notes"), as described below, for losses suffered solely by reason of fraud or willful misrepresentation by the Operating Partnership or its affiliates.
The Company also provides a similar limited guarantee of the Operating Partnership's obligations with respect to its unsecuredsecured credit facilitiesfacility and three unsecuredsecured term loansloan as of SeptemberJune 30, 2018.

2019.
Debt of the Operating Partnership
Net mortgage and other indebtedness consisted of the following:
 September 30, 2018 December 31, 2017
 Amount 
Weighted-
Average
Interest
Rate (1)
 Amount 
Weighted-
Average
Interest
Rate (1)
Fixed-rate debt: 
      
Non-recourse loans on operating properties 
$1,797,080
 5.33% $1,796,203
 5.33%
Senior unsecured notes due 2023 (2)
447,309
 5.25% 446,976
 5.25%
Senior unsecured notes due 2024 (3)
299,951
 4.60% 299,946
 4.60%
Senior unsecured notes due 2026 (4)
616,436
 5.95% 615,848
 5.95%
Total fixed-rate debt3,160,776
 5.37% 3,158,973
 5.37%
Variable-rate debt: 
    
  
Non-recourse loan on operating property (5)
—
 —% 10,836
 3.37%
Recourse loans on operating properties74,150
 4.73% 101,187
 4.00%
Unsecured lines of credit201,358
 3.65% 93,787
 2.56%
Unsecured term loans695,000
 3.96% 885,000
 2.81%
Total variable-rate debt970,508
 3.95% 1,090,810
 2.90%
Total fixed-rate and variable-rate debt4,131,284
 5.04% 4,249,783
 4.74%
Unamortized deferred financing costs(15,476)   (18,938)  
Total mortgage and other indebtedness, net$4,115,808
   $4,230,845
  
 June 30, 2019 December 31, 2018
 Amount 
Weighted-
Average
Interest
Rate (1)
 Amount 
Weighted-
Average
Interest
Rate (1)
Fixed-rate debt: 
      
Non-recourse loans on operating properties 
$1,581,780
 5.21% $1,783,097
 5.33%
Senior unsecured notes due 2023 (2)
447,656
 5.25% 447,423
 5.25%
Senior unsecured notes due 2024 (3)
299,956
 4.60% 299,953
 4.60%
Senior unsecured notes due 2026 (4)
617,048
 5.95% 616,635
 5.95%
Total fixed-rate debt2,946,440
 5.31% 3,147,108
 5.37%
Variable-rate debt: 
    
  
Recourse loans on operating properties56,721
 5.05% 68,607
 4.97%
Construction loan16,684
 5.33% 8,172
 5.25%
Secured line of credit 
383,084
 4.69% —
 —%
Unsecured lines of credit 
—
 —% 183,972
 3.90%
Secured term loan482,500
 4.69% —
 —%
Unsecured term loans—
 —% 695,000
 4.21%
Total variable-rate debt938,989
 4.72% 955,751
 4.21%
Total fixed-rate and variable-rate debt3,885,429
 5.17% 4,102,859
 5.10%
Unamortized deferred financing costs(19,490)   (15,963)  
Liabilities related to assets held for sale (5)
—
   (43,716)  
Total mortgage and other indebtedness, net$3,865,939
   $4,043,180
  
(1)Weighted-average interest rate includes the effect of debt premiums and discounts, but excludes amortization of deferred financing costs.
(2)
The balance is net of an unamortized discount of $2,6912,344 and $3,0242,577 as of SeptemberJune 30, 20182019 and December 31, 20172018, respectively.
(3)
The balance is net of an unamortized discount of $4944 and $5447 as of SeptemberJune 30, 20182019 and December 31, 20172018, respectively.
(4)
The balance is net of an unamortized discount of $8,5647,952 and $9,1528,365 as of SeptemberJune 30, 20182019 and December 31, 20172018, respectively.
(5)
TheRepresents a non-recourse mortgage loan secured by Cary Towne Center that was retired in conjunction withclassified on the condensed consolidated balance sheet as liabilities related to assets held for sale as of the property in SeptemberDecember 31, 2018. See Mortgages on Operating Properties section below.


Senior Unsecured Notes
Description 
Issued (1)
 Amount 
Interest Rate (2)
 
Maturity Date (3)
2023 Notes November 2013 $450,000
 5.25% December 2023
2024 Notes October 2014 300,000
 4.60% October 2024
2026 Notes December 2016 / September 2017 625,000
 5.95% December 2026
(1)Issued by the Operating Partnership. CBL is a limited guarantor of the Operating Partnership's obligations under the Notes as described above.
(2)
Interest is payable semiannually in arrears. The interest rate for the 2024 Notes and the 2023 Notes is subject to an increase ranging from 0.25% to 1.00% from time to time if, on or after January 1, 2016 and prior to January 1, 2020, the ratio of secured debt to total assets of the Company, as defined, is greater than 40% but less than 45%. The required ratio of secured debt to total assets for the 2026 Notes is 40% or less. As of SeptemberJune 30, 20182019, this ratio was 24%34% as shown below.
(3)
The Notes are redeemable at the Operating Partnership's election, in whole or in part from time to time, on not less than 30 days and not more than 60 days' notice to the holders of the Notes to be redeemed. The 2026 Notes, the 2024 Notes and the 2023 Notes may be redeemed prior to September 15, 2026, July 15, 2024, and September 1, 2023, respectively, for cash at a redemption price equal to the aggregate principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date and a make-whole premium calculated in accordance with the indenture. On or after the respective dates noted above, the Notes are redeemable for cash at a redemption price equal to the aggregate principal amount of the Notes to be redeemed plus accrued and unpaid interest. If redeemed prior to the respective dates noted above, each issuance of Notes is redeemable at the treasury rate plus 0.50%, 0.35% and 0.40% for the 2026 Notes, the 2024 Notes and the 2023 Notes, respectively.

Senior Secured Credit Facility
Unsecured LinesIn January 2019, the Company entered into a new $1,185,000 senior secured credit facility, which included a fully-funded $500,000 term loan and a revolving line of Credit
credit with a borrowing capacity of $685,000. The Company hasfacility replaced all of the Company's prior unsecured bank facilities, which included three unsecured credit facilities that are used for retirement of secured loans, repayment of term loans working capital, constructionwith an aggregate balance of $695,000 and acquisition purposes, as well as issuancesthree unsecured revolving lines of letterscredit with an aggregate capacity of credit.     
Each$1,100,000. At closing, the Company utilized the line of credit to reduce the principal balance of the unsecured term loan from $695,000 to $500,000. The facility matures in July 2023 and bears interest at a variable rate of LIBOR plus a spread of 0.875% to 1.550% based on the credit ratings for the Operating Partnership's senior unsecured long-term indebtedness. In August 2018, Standard & Poor's ("S&P") lowered its rating from BBB- to BB+, which caused the Company's interest rates to increase in September 2018. As of September 30, 2018, the Operating Partnership's225 basis points. The facility had an interest rate of 4.69% at June 30, 2019. The Operating Partnership is LIBOR plus 1.550%required to pay an annual facility fee, to be paid quarterly, which ranges from 0.25% to 0.35%, based on the credit ratings of its unsecured long-term indebtedness of Ba1 from Moody's Investors Service ("Moody's"), BB+ from S&P and BB+ from Fitch Ratings ("Fitch"). Additionally, the Company pays an annual facility fee that ranges from 0.125% to 0.300%unused capacity of the total capacityline of each facility basedcredit. The principal balance on the credit ratings described above. As of Septemberterm loan will be reduced by $35,000 per year in quarterly installments. At June 30, 2018,2019, the annual facility fee was 0.30%. The three unsecured linessecured line of credit had a weighted-average interest ratean outstanding balance of 3.65% at September 30, 2018.$383,084 and the secured term loan had an outstanding balance of $482,500.
The following summarizes certainsecured credit facility is secured by 17 malls and 3 associated centers that are owned by 36 wholly owned subsidiaries of the Operating Partnership (collectively the “Combined Guarantor Subsidiaries”). The Combined Guarantor Subsidiaries own an additional five malls, two associated centers and four mortgage notes receivable that are not collateral for the secured credit facility. The properties that are collateral for the secured credit facility and the properties and mortgage notes receivable that are not collateral are collectively referred to as the “Guarantor Properties.” The terms of the Notes provide that, to the extent that any subsidiary of the Operating Partnership executes and delivers a guarantee to another debt facility, the Operating Partnership shall also cause the subsidiary to guarantee the Operating Partnership’s obligations under the Notes on a senior basis. In January 2019, the Combined Guarantor Subsidiaries entered into a guarantee agreement with the issuer of the Notes to satisfy the guaranty requirement.
Each of the Combined Guarantor Subsidiaries meet the criteria in Rule 3-10(f) of SEC Regulation S-X to provide condensed consolidating financial information aboutas additional disclosure in the Company's unsecured linesnotes to the Operating Partnership's condensed consolidated financial statements because each Combined Guarantor Subsidiary is 100% owned by the Operating Partnership, the guaranty issued by each Combined Guarantor Subsidiary is full and unconditional and the guaranty issued by each Combined Guarantor Subsidiary is joint and several. However, the Operating Partnership has elected to provide combined financial statements and accompanying notes for the Combined Guarantor Subsidiaries in lieu of creditincluding the condensed consolidating financial information in the notes to its condensed consolidated financial statements. These combined financial statements and notes are presented as an exhibit to this quarterly report on Form 10-Q for ease of September 30, 2018: reference.
  
 
Total
Capacity
 
 
Total
Outstanding
 
Maturity
Date
 
Extended
Maturity
Date
 
Wells Fargo - Facility A $500,000
(1) 
$—
 October 2019 October 2020
(2) 
First Tennessee 100,000
(3) 
47,695
 October 2019 October 2020
(4) 
Wells Fargo - Facility B 500,000
(1) 
153,663
(5) 
October 2020 
 
  $1,100,000
(6) 
$201,358
     
(1)
Up to $30,000 of the capacity on this facility can be used for letters of credit.
(2)
The extension option is at the Company's election, subject to continued compliance with the terms of the facility, and has a one-time extension fee of 0.15% of the commitment amount of the credit facility.
(3)
Up to $20,000 of the capacity on this facility can be used for letters of credit.
(4)
The extension option on the facility is at the Company's election, subject to continued compliance with the terms of the facility, and has a one-time extension fee of 0.20% of the commitment amount of the credit facility.
(5)
There was $4,833 outstanding on this facility as of September 30, 2018 for letters of credit.
(6)See debt covenant section below for limitation on excess capacity.
Unsecured Term Loans
The following summarizes certain information about the Company's unsecured term loans as of September 30, 2018: 
  
 
Total
Outstanding
 Interest Rate Spread Interest Rate 
Maturity
Date
 
Extended
Maturity
Date
 
Wells Fargo - $350,000 term loan $350,000
 LIBOR + 1.75% 3.85% October 2018 October 2019
(1) 
Wells Fargo - $300,000 term loan 300,000
 LIBOR + 2.00% 4.10% July 2020 July 2022
(2) 
First Tennessee - $45,000 term loan 45,000
 LIBOR + 1.65% 3.75% June 2021 June 2022 
  $695,000
         
(1)
Subsequent to September 30, 2018, the Company exercised the extension option. See Note 14.
(2)
The loan has twoone-year extension options, the second of which is at the lender's discretion.
Financial Covenants and Restrictions
The agreements for the unsecured lines of credit, the Notes and unsecured term loansthe senior secured credit facility contain, among other restrictions, certain financial covenants including the maintenance of certain financial coverage ratios, minimum unencumbered asset and interest ratios, maximum secured indebtedness ratios, maximum total indebtedness ratios and limitations on cash flow distributions.  The Company believes that it was in compliance with all financial covenants and restrictions at SeptemberJune 30, 2018.2019.

Unsecured Lines of Credit and Unsecured Term Loans
The following presents the Company's compliance with key covenant ratios, as defined, of the credit facilities and term loans as of September 30, 2018:
RatioRequiredActual
Debt to total asset value< 60%53%
Unsecured indebtedness to unencumbered asset value< 60%49%
(1)
Unencumbered NOI to unsecured interest expense> 1.75x2.6x
EBITDA to fixed charges (debt service)> 1.5x2.3x
(1)
The debt covenant limits the total amount of unsecured indebtedness the Company may have outstanding, which varies over time based on the ratio. Based on the Company’s outstanding unsecured indebtedness as of September 30, 2018, the total amount available to the Company on its lines of credit was $697,627. Therefore, the Company had additional availability of $491,436 based on the outstanding balances of the lines of credit as of September 30, 2018.
The agreements for the unsecured credit facilities and unsecured term loans described above contain default provisions customary for transactions of this nature (with applicable customary grace periods). Additionally, any default in the payment of any recourse indebtedness greater than or equal to $50,000 or any non-recourse indebtedness greater than $150,000 (for the Company's ownership share) of CBL, the Operating Partnership or any Subsidiary, as defined, will constitute an event of default under the agreements to the credit facilities. The credit facilities also restrict the Company's ability to enter into any transaction that could result in certain changes in its ownership or structure as described under the heading “Change of Control/Change in Management” in the agreements for the credit facilities.
Senior Unsecured Notes
The following presents the Company's compliance with key covenant ratios, as defined, of the Notes and the senior secured credit facility as of SeptemberJune 30, 2018:2019:
Ratio Required Actual
Total debt to total assets < 60% 52%
Secured debt to total assets 
< 40% (1)
 24%34%
Total unencumbered assets to unsecured debt > 150% 215%191%
Consolidated income available for debt service to annual debt service charge > 1.5x 2.7x2.3x
(1)
Secured debt to total assets must be less than 40% for the 2026 Notes. Secured debt to total assets must be less than 45% for the 2023 Notes and the 2024 Notes until January 1, 2020.2020, after which the required ratio will be reduced to 40%.
The agreements for the Notes and senior secured credit facility described above contain default provisions customary for transactions of this nature (with applicable customary grace periods). Additionally, any default in the payment of any recourse indebtedness greater than or equal to $50,000 of the Operating Partnership will constitute an event of default under the Notes.
Mortgages on Operating Properties
20182019 Financings
The following table presentsIn April 2019, the loan secured by Volusia Mall was refinanced to increase the related consolidated property, thatprincipal balance to $50,000. In addition, the maturity date was entered into in 2018:extended to April 2024 and the fixed interest rate was reduced from 8.00% to 4.56%. The net proceeds from the new loan were used to retire the $41,000 existing loan.
Date Property Stated Interest Rate Maturity Date Amount Financed
September 
The Outlet Shoppes at El Paso (1)
 5.10% October 2028 $75,000
(1)The Company owns the property in a 75/25 consolidated joint venture. A portion of the proceeds from the non-recourse loan was used to retire a recourse loan secured by Phase II of The Outlet Shoppes at El Paso as described below.
In August 2018,May 2019, the Company exercised an option to extend the $27,446 loan secured by Hickory Point MallThe Outlet Shoppes at Laredo to December 2019.
SubsequentMay 2021. In conjunction with the amendment, a payment of $10,800 was made to September 30, 2018,reduce the Company closed on a construction loan for the redevelopmentoutstanding balance of the former Sears store at Brookfield Square. See Note 14 for more information.loan to $43,000. The noncontrolling interest partner in the joint venture funded its 35% share of the $10,800 payment.

20182019 Loan Repayments
The Company repaid the following loans, secured by the related consolidated properties, in 2018:
Date Property 
Interest Rate at
Repayment Date
 
Scheduled
Maturity Date
 
Principal
Balance Repaid (1)
January Kirkwood Mall 5.75% April 2018 $37,295
August 
Statesboro Crossing (2)
 4.24% June 2019 10,753
September 
The Outlet Shoppes at El Paso - Phase II (3)
 4.73% December 2018 6,525
        $54,573
Date Property 
Interest
Rate at
Repayment
Date
 
Scheduled
Maturity Date
 
Principal
Balance
Repaid
April 
Honey Creek Mall (1)
 8.00% July 2019 $23,539
(1)The Company retired the loans with borrowingsloan using proceeds from its credit facilities unless otherwise noted.the refinancing of the loan secured by Volusia Mall as well as proceeds from the sale of Honey Creek Mall.
2019 Dispositions
The following is a summary of the Company's 2019 dispositions for which the fixed-rate loan secured by the mall was extinguished:
Transfer
Date
   
Interest
Rate at
Repayment
Date
 
Scheduled
Maturity Date
 
Balance of
Non-recourse
Debt
 
Gain on
Extinguishment
of Debt
 Property    
January 
Acadiana Mall (1)
 5.67% April 2017 $119,760
 $61,795
January 
Cary Towne Center (2)
 4.00% June 2018 43,716
 9,927
        $163,476
 $71,722
(1)The Company transferred title to the mall to the mortgage holder in satisfaction of the non-recourse debt secured by the property.
(2)
The loan was retired in conjunction withCompany sold the mall for $31,500 and the net proceeds from the sale were used to satisfy a portion of the property that secured the loan. See Note 5 for more information.
(3)In July 2018, the loan secured by the propertymall. The remaining principal balance was extended from July 2018 to December 2018. It was subsequently retired when the joint venture closed on a new loan in September 2018 as described above.forgiven.
Other
On June 4, 2018, the Company was notified by IKEA that, as a result of a shift in its corporate strategy, it was terminating the contract to purchase land at Cary Towne Center, upon which it would develop and open a store. In accordance with the terms of the $43,716 interest-only non-recourse loan that is secured by the mall, the loan matured on the date of the IKEA contract termination and is in default as of September 30, 2018. In August 2018, the Company and the lender executed a forbearance agreement. See Note 4 for information on the loss on impairment of real estate that the Company recorded in June 2018.     
Scheduled Principal Payments
As of SeptemberJune 30, 2018,2019, the scheduled principal amortization and balloon payments of the Company’s consolidated debt, excluding extensions available at the Company’s option, on all mortgage and other indebtedness, including construction loans and lines of credit, are as follows: 
2019 (1)
 $139,396
2020 247,495
2021 548,799
2022 470,312
2023 1,268,787
2024 405,909
Thereafter 815,071
  3,895,769
Unamortized discounts (10,340)
Unamortized deferred financing costs (19,490)
Total mortgage and other indebtedness, net $3,865,939
2018 $411,284
2019 309,346
2020 661,816
2021 499,321
2022 432,546
Thereafter 1,706,132
  4,020,445
Unamortized discounts (11,304)
Unamortized deferred financing costs (15,476)
Principal balance of loan secured by Lender Mall in foreclosure (1)
 122,143
Total mortgage and other indebtedness, net $4,115,808

(1)RepresentsReflects payments for the principal balance of the non-recourse loan, secured by Acadiana Mall, which is in default. The loan matured in 2017.fiscal period July 1, 2019 through December 31, 2019.
Of the $411,284$139,396 of scheduled principal payments in 2018, $43,7162019, $98,256 relates to the maturing principal balance of thethree operating property loan secured by Cary Towne Center, $350,000 represents the principal balance of one unsecured term loan and $17,568 relates to scheduled principal amortization. In August 2018, the Company entered into a forbearance agreement with the lender on the loan secured by Cary Towne Center, which is in default. Subsequent to September 30, 2018, the unsecured term loan was extended. See Note 14 for more information.
The Company is in the process of refinancing the $350,000 unsecured term loan that matures in October 2019. The refinancing will also include the $300,000 unsecured term loan, the $45,000 unsecured term loan and the three unsecured lines of credit with an aggregate capacity of $1,100,000. The unsecured term loans and lines of credit will be converted from unsecured to secured facilities. The Company has agreed with Wells Fargo, as lead lender, on a pool of properties that will serve as collateral for the new secured term loans and secured lines of credit. The due diligence on these properties is ongoing and is expected to be completed by January 2019. Until due diligence is

complete, the number and specific properties comprising the collateral pool may change. Wells Fargo will secure commitments from additional banks as participants in the new facilities; however, the composition of the lenders and the amount that each will hold will be subject to the final approval of each lender. As of the date of the filing of these financial statements, management has obtained the approval of the Board of Directors and has agreed to a non-binding term sheet with Wells Fargo that includes a longer-term maturity. It is expected that the refinancing will close in January 2019.
In the unlikely event the secured facility is not closed, management intends to utilize availability under the existing unsecured lines of credit to retire the $350,000 unsecured term loan that matures in October 2019. The $300,000 and the $45,000 term loans have a final maturity of July 2022 and June 2022, respectively, and the combined $1,100,000 lines of credit have a final maturity of October 2020.loans.
The Company’s mortgage and other indebtedness had a weighted-average maturity of 3.94.3 years as of SeptemberJune 30, 20182019 and 4.43.7 years as of December 31, 2017.2018.
Note 89 – Mortgage and Other Notes Receivable
Each of the Company’s mortgage notes receivable is collateralized by either a first mortgage, a second mortgage, or by an assignment of 100% of the partnership interests that own the real estate assets.  Other notes receivable include amounts due from tenants or government-sponsored districts and unsecured notes received from third parties as whole or partial consideration for property or investments.
Mortgage and other notes receivable consist of the following:
 As of September 30, 2018 As of December 31, 2017 As of June 30, 2019 As of December 31, 2018
 
Maturity
Date
 
Interest
Rate
 Balance 
Interest
Rate
 Balance 
Maturity
Date
 
Interest
Rate
 Balance 
Interest
Rate
 Balance
Mortgages:        
Columbia Place Outparcel Feb 2022 5.00% $288
 5.00% $302
 Feb 2022 5.00% $271
 5.00% $283
One Park Place(1) May 2022 5.00% 837
 5.00% 1,010
 May 2022 5.00% —
 5.00% 783
Village Square (1)(2)
 Sep 2018 4.00% 1,554
 4.00% 1,596
 Jul 2019 5.00% 1,130
 4.00% 1,308
Other (2)(3)
 Dec 2016 - Jan 2047 4.73% - 9.50% 2,510
 4.07% - 9.50% 2,510
 Dec 2016 - Jan 2047 4.90% - 9.50% 2,512
 5.01% - 9.50% 2,510
 5,189
 5,418
 3,913
 4,884
Other Notes Receivable:        
ERMC Sep 2021 4.00% 2,354
 4.00% 2,855
 Sep 2021 4.00% 1,837
 4.00% 2,183
Southwest Theaters LLC Apr 2026 5.00% 628
 5.00% 672
 Apr 2026 5.00% 576
 5.00% 605
 2,982
 3,527
 2,413
 2,788
        
 $8,171
 $8,945
 $6,326
 $7,672
(1)The loan was retired in May 2019.
(2)
The note was amended to extend the maturity date and restructure the monthly payment amount subsequent to SeptemberJune 30, 2018.2019. See Note 1415 for more information.
(2)(3)
The Includes a $1,100 note with D'Iberville Promenade, LLC, with a maturity date of December 2016, that is in default. This is secured by the joint venture partner's interest in the joint venture.

Note 910 – Segment Information
The Company measures performance and allocates resources according to property type, which is determined based on certain criteria such as type of tenants, capital requirements, economic risks, leasing terms, and short and long-term returns on capital. Rental income and tenant reimbursements from tenant leases provide the majority of revenues from all segments.
The Company's segment information for the three and nine months ended September 30, 2017 has been retrospectively revised from previously reported amounts to reflect a change in our reportable segments. The Company no longer separately presents quantitatively and qualitatively insignificant reportable segments. Malls represents the Company's only reportable segment and the All Other category is not significant.

Information on the Company’s segments is presented as follows:
Three Months Ended September 30, 2018 Malls 
All Other (1)
 Total
Three Months Ended June 30, 2019 Malls 
All Other (1)
 Total
Revenues (2)
 $188,440
 $18,438
 $206,878
 $170,976
 $22,401
 $193,377
Property operating expenses (3)
 (57,243) (3,669) (60,912) (53,599) (3,379) (56,978)
Interest expense (24,665) (30,529) (55,194) (21,556) (30,926) (52,482)
Other expense —
 (38) (38) —
 (34) (34)
Gain on sales of real estate assets 92
 7,788
 7,880
 2,478
 3,049
 5,527
Segment profit (loss) $106,624
 $(8,010) 98,614
 $98,299
 $(8,889) 89,410
Depreciation and amortization expense     (71,945)     (64,478)
General and administrative expense     (16,051)     (14,427)
Interest and other income     283
     356
Loss on impairment     (14,600)     (41,608)
Income tax provision     (1,034)     (813)
Equity in earnings of unconsolidated affiliates     1,762
     1,872
Net loss     $(2,971)     $(29,688)
Capital expenditures (4)
 $38,512
 $2,671
 $41,183
 $31,560
 $1,413
 $32,973



Three Months Ended June 30, 2018 Malls 
All Other (1)
 Total
Revenues (2)
 $195,942
 $18,656
 $214,598
Property operating expenses (3)
 (57,940) (4,102) (62,042)
Interest expense (25,962) (28,241) (54,203)
Other expense (35) (210) (245)
Gain on sales of real estate assets —
 3,747
 3,747
Segment profit (loss) $112,005
 $(10,150) 101,855
Depreciation and amortization expense  
  
 (73,566)
General and administrative expense  
  
 (13,490)
Interest and other income  
  
 218
Loss on impairment     (51,983)
Gain on investment     387
Income tax benefit  
  
 2,235
Equity in earnings of unconsolidated affiliates     4,368
Net loss  
  
 $(29,976)
Capital expenditures (4)
 $32,779
 $5,043
 $37,822



Three Months Ended September 30, 2017 Malls 
All Other (1)
 Total
Six Months Ended June 30, 2019 Malls 
All Other (1)
 Total
Revenues (2)
 $205,020
 $19,630
 $224,650
 $354,840
 $36,567
 $391,407
Property operating expenses (3)
 (59,602) (4,520) (64,122) (110,780) (7,873) (118,653)
Interest expense (28,922) (24,991) (53,913) (44,746) (61,734) (106,480)
Other expense —
 (132) (132) —
 (34) (34)
Gain (loss) on sales of real estate assets (1,994) 3,377
 1,383
Gain on sales of real estate assets 2,478
 3,277
 5,755
Segment profit (loss) $114,502
 $(6,636) 107,866
 $201,792
 $(29,797) 171,995
Depreciation and amortization expense  
  
 (71,732)     (134,270)
General and administrative expense  
  
 (13,568)     (36,434)
Interest and other income (loss)  
  
 (200)
Litigation settlement expense     (88,150)
Interest and other income     845
Gain on extinguishment of debt     6,452
     71,722
Loss on impairment     (24,935)     (66,433)
Loss on investment     (354)
Income tax benefit  
  
 1,064
Income tax provision     (952)
Equity in earnings of unconsolidated affiliates     4,706
     5,180
Net income  
  
 $9,299
Net loss     $(76,497)
Capital expenditures (4)
 $47,246
 $1,035
 $48,281
 $59,584
 $1,528
 $61,112






Nine Months Ended September 30, 2018 Malls 
All Other (1)
 Total
Six Months Ended June 30, 2018 Malls 
All Other (1)
 Total
Revenues (2)
 $585,097
 $56,579
 $641,676
 $396,657
 $38,141
 $434,798
Property operating expenses (3)
 (179,012) (11,795) (190,807) (121,769) (8,126) (129,895)
Interest expense (76,401) (86,763) (163,164) (51,736) (56,234) (107,970)
Other expense (84) (293) (377) (84) (255) (339)
Gain on sales of real estate assets 92
 15,906
 15,998
 —
 8,118
 8,118
Segment profit (loss) $329,692
 $(26,366) 303,326
 $223,068
 $(18,356) 204,712
Depreciation and amortization expense     (217,261)     (145,316)
General and administrative expense     (47,845)     (31,794)
Interest and other income     431
Loss on impairment     (70,044)
Gain on investment     387
Income tax benefit     2,880
Equity in earnings of unconsolidated affiliates     8,107
Net loss     $(30,637)
Capital expenditures (4)
 $67,081
 $7,392
 $74,473



Nine Months Ended September 30, 2018 Malls 
All Other (1)
 Total
Interest and other income     714
Loss on impairment     (84,644)
Gain on investment     387
Income tax benefit     1,846
Equity in earnings of unconsolidated affiliates     9,869
Net loss     $(33,608)
Capital expenditures (4)
 $105,593
 $10,063
 $115,656

Nine Months Ended September 30, 2017 Malls 
All Other (1)
 Total
Revenues (2)
 $632,830
 $59,066
 $691,896
Property operating expenses (3)
 (182,926) (11,989) (194,915)
Interest expense (93,481) (71,698) (165,179)
Other expense —
 (5,151) (5,151)
Gain on sales of real estate assets 75,434
 11,470
 86,904
Segment profit (loss) $431,857
 $(18,302) 413,555
Depreciation and amortization expense     (225,461)
General and administrative expense     (45,402)
Interest and other income     1,235
Gain on extinguishment of debt     30,927
Loss on impairment     (71,401)
Loss on investment     (6,197)
Income tax benefit     4,784
Equity in earnings of unconsolidated affiliates     16,404
Net income     $118,444
Capital expenditures (4)
 $126,290
 $5,588
 $131,878

Total Assets Malls 
All Other (1)
 Total
September 30, 2018 $4,979,583
 $511,436
 $5,491,019
       
December 31, 2017 $5,152,789
 $552,019
 $5,704,808
       
Total Assets Malls 
All Other (1)
 Total
June 30, 2019 $4,610,847
 $437,293
 $5,048,140
       
December 31, 2018 $4,868,141
 $472,712
 $5,340,853
(1)The All Other category includes associated centers, community centers, mortgage and other notes receivable, office buildings, self-storage facilities, corporate-level debt and the Management Company.
(2)
Management, development and leasing fees are included in the All Other category. See Note 3 for information on the Company's revenues disaggregated by revenue source for each of the above segments.
(3)Property operating expenses include property operating, real estate taxes and maintenance and repairs.
(4)Amounts include acquisitions of real estate assets and investments in unconsolidated affiliates. Developments in progress are included in the All Other category.

Note 1011 – Earnings per Share and Earnings per Unit
Earnings per Share of the Company
Basic earnings per share (“EPS”) is computed by dividing net income (loss) attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS assumes the issuance of common stock for all potential dilutive common shares outstanding. The limited partners’ rights to convert their noncontrolling interests in the Operating Partnership into shares of common stock are not dilutive.


There were no potential dilutive common shares and there were no anti-dilutive shares for the three and six month periods ended June 30, 2019.
Due to a net loss for the ninethree and six month periodperiods ended SeptemberJune 30, 2018, the computation of diluted EPS does not include contingently issuable shares due to their anti-dilutive nature. Had the Company reported net income for the ninethree months ended SeptemberJune 30, 2018, the denominator for diluted EPS would have been 172,563,094,172,867, including 137,094205 contingently issuable shares related to performance stock unit ("PSU") awards. Had the Company reported net income for the for the six months ended June 30, 2018, the denominator for diluted EPS would have been 172,715, including 411 contingently issuable shares related to PSU awards.
Earnings per Unit of the Operating Partnership
Basic earnings per unit (“EPU”) is computed by dividing net income (loss) attributable to common unitholders by the weighted-average number of common units outstanding for the period. Diluted EPU assumes the issuance of common units for all potential dilutive common units outstanding. There were no potential dilutive common units and there were no anti-dilutive units for the three and six month periods ended June 30, 2019.
Due to a net loss for the ninethree and six month periodperiods ended SeptemberJune 30, 2018, the computation of diluted EPU does not include contingently issuable units due to their anti-dilutive nature. Had the Operating Partnership reported net income for the ninethree months ended SeptemberJune 30, 2018, the denominator for diluted EPU would have been 199,767,094,199,972, including 137,094205 contingently issuable units related to PSU awards. Had the Operating Partnership reported net income for the for the six months ended June 30, 2018, the denominator for diluted EPU would have been 200,142, including 411 contingently issuable units related to PSU awards.
Note 1112 – Contingencies
Litigation
In April 2019, the Company entered into a settlement agreement and release with respect to the class action lawsuit filed on March 16, 2016 in the United States District Court for the Middle District of Florida by Wave Lengths Hair Salons of Florida, Inc. d/b/a Salon Adrian. The settlement agreement states that the Company is to set aside a common fund with a monetary and non-monetary value of $90,000 to be disbursed to class members in accordance with an agreed-upon formula that is based upon aggregate damages of $60,000. Class members will be comprised of past and current tenants at certain of the Company's shopping centers that it owns or formerly owned during the class period, which will extend from January 1, 2011 through the date of court preliminary approval. Class members who are past tenants and make a claim will receive payment of their claims in cash. Class members who are current tenants will receive monthly credits against rents and future charges, beginning no earlier than January 1, 2020 and continuing for the following five years. Any amounts under the settlement allocated to tenants with outstanding amounts payable to the Company, including tenants which have declared bankruptcy or declare bankruptcy over the relevant period, will first be deducted from the amounts owed to the Company. All attorney’s fees and associated costs to be paid to class counsel (up to a maximum of $28,000), any incentive award to the class representative (up to a maximum of $50), and class administration costs (which are expected to not exceed $100), will be funded by the common fund, but must be approved by the court. Under the terms of the settlement agreement, the Company will not pay any dividends to holders of its common shares payable in the third and fourth quarters of 2019. The settlement agreement does not restrict the Company's ability to declare dividends payable in 2020 or in subsequent years. The Company recorded an accrued liability and corresponding litigation settlement expense of $88,150 in the three months ended March 31, 2019 related to the settlement agreement.
The Company is currently involved in certain other litigation that arises in the ordinary course of business, most of which is expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better

estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation.
Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company.    
Securities Litigation
The Company and certain of its officers and directors have been named as defendants in three putative securities class action lawsuits (collectively, the “Securities Class Action Litigation”), each filed in the United States District Court for the Eastern District of Tennessee, on behalf of all persons who purchased or otherwise acquired the Company’s securities during a specified period of time.  The first such lawsuit, captioned Paskowitz v. CBL & Associates Properties, Inc., et al., 1:19-cv-00149-JRG-CHS, was filed on May 17, 2019, and asserts claims on behalf of persons or entities that purchased CBL securities between November 8, 2017 and March 26, 2019, inclusive.  The second such lawsuit, captioned Williams v. CBL & Associates Properties, Inc., et al., 1:19-cv-00181, was filed on June 21, 2019, and asserts claims on behalf of persons or entities that purchased CBL securities between April 29, 2016 and March 26, 2019, inclusive.  The third such lawsuit, captioned Merelles v. CBL & Associates Properties, Inc., et al., 1:19-CV-00193, was filed on July 2, 2019, and asserts claims on behalf of persons or entities that purchased CBL securities between July 29, 2014 and March 26, 2019.  The Court consolidated these cases on July 17, 2019, under the caption In re CBL & Associates Properties, Inc. Securities Litigation, 1:19-cv-00149-JRG-CHS. After plaintiff Laurence Paskowitz voluntarily dismissed his case on July 25, 2019, the Court re-consolidated the two remaining cases under the caption In re CBL & Associates Properties, Inc. Securities Litigation, 1:19-cv-00181-JRG-CHS, on August 2, 2019. 
The complaints filed in the Securities Class Action Litigation allege violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s contingent liabilities, business, operations, and prospects during the periods of time specified above.  The plaintiffs seek compensatory damages and attorneys’ fees and costs, among other relief, but have not specified the amount of damages sought.  The outcome of these legal proceedings cannot be predicted with certainty.
Certain of the Company’s current and former directors and officers have been named as defendants in three shareholder derivative lawsuits (collectively, the “Derivative Litigation”).  On June 4, 2019, a shareholder filed a putative derivative complaint captioned Robert Garfield v. Stephen D. Lebovitz et al., 1:19-cv-01038-LPS, in the United States District Court for the District of Delaware (the “Garfield Derivative Action”), purportedly on behalf of the Company against certain of its officers and directors.  On June 24, 2019, another shareholder filed a putative derivative complaint captioned Robert Cohen v. Stephen D. Lebovitz et al., 1:19-cv-01185-LPS, also in the United States District Court for the District of Delaware (the “Cohen Derivative Action”), asserting substantially similar claims purportedly on behalf of the Company against similar defendants.  The Court consolidated the Garfield Derivative Action and the Cohen Derivative Action on July 17, 2019, under the caption In re CBL & Associates Properties, Inc. Derivative Litigation, 1:19-cv-01038-LPS, and on July 19, 2019, the parties jointly moved to stay the case pending resolution of an eventual motion to dismiss in the Securities Class Action Litigation.  On July 22, 2019, another shareholder filed a putative derivative complaint captioned Shebitz v. Lebovitz et al., 1:19-cv-00213, in the United States District Court for the Eastern District of Tennessee, asserting substantially similar claims purportedly on behalf of the Company against similar defendants. On July 17, 2019, the Court consolidated the Garfield Derivative Action and the Cohen Derivative Action under the caption In re CBL & Associates Properties, Inc. Derivative Litigation, 1:19-cv-01038-LPS.  On July 25, 2019, the Court stayed these two actions pending resolution of an eventual motion to dismiss in the related Securities Class Action Litigation.
The complaints filed in the Derivative Litigation allege, among other things, breaches of fiduciary duties, unjust enrichment, waste of corporate assets, and violations of the federal securities laws.  The factual allegations upon which these claims are based are similar to the factual allegations made in the Securities Class Action Litigation, described above.  The complaints filed in the Derivative Litigation seek, among other things, unspecified damages and restitution for the Company from the individual defendants, the payment of costs and attorneys’ fees, and that the Company be directed to reform certain governance and internal procedures.  The outcome of these legal proceedings cannot be predicted with certainty.
The Company's insurance carriers have been placed on notice of these matters.
Environmental Contingencies
The Company evaluates potential loss contingencies related to environmental matters using the same criteria described above related to litigation matters. Based on current information, an unfavorable outcome concerning such

environmental matters, both individually and in the aggregate, is considered to be reasonably possible. However, the Company believes its maximum potential exposure to loss would not be material to its results of operations or financial condition.
The Company has a master insurance policy that provides coverage through 2022 for certain environmental claims up to $10,000 per occurrence and up to $50,000 in the aggregate, subject to deductibles and certain exclusions. At certain locations, individual policies are in place.
Guarantees
The Operating Partnership may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on the Operating Partnership’s investment in the joint venture.
The Operating Partnership may receive a fee from the joint venture for providing the guaranty. Additionally, when the Operating Partnership issues a guaranty, the terms of the joint venture agreement typically provide that the Operating Partnership may receive indemnification from the joint venture partner or have the ability to increase its ownership interest. The guarantees expire upon repayment of the debt, unless noted otherwise.

The following table represents the Operating Partnership's guarantees of unconsolidated affiliates' debt as reflected in the accompanying condensed consolidated balance sheets as of SeptemberJune 30, 20182019 and December 31, 2017:2018:
 As of September 30, 2018 Obligation Recorded to
Reflect Guaranty		 As of June 30, 2019 Obligation Recorded to
Reflect Guaranty
Unconsolidated
Affiliate		 Company's
Ownership
Interest		 Outstanding
Balance		 Percentage
Guaranteed
by the
Operating
Partnership		 Maximum
Guaranteed
Amount		 
Debt
Maturity
Date (1)
 9/30/2018 12/31/2017 Company's
Ownership
Interest		 Outstanding
Balance		 Percentage
Guaranteed
by the
Operating
Partnership		 Maximum
Guaranteed
Amount		 
Debt
Maturity
Date (1)
 6/30/2019 12/31/2018
West Melbourne I, LLC
- Phase I (2)
 50% $41,737
 50%
(3) 
 $20,869
 Feb-2021
(3) 
 $209
 $86
 50% $40,197
 50% $20,099
 Feb-2021 $201
 $203
West Melbourne I, LLC
- Phase II (2)
 50% 16,097
 50%
(3) 
 8,049
 Feb-2021
(3) 
 80
 33
 50% 15,827
 50% 7,914
 Feb-2021 79
 80
Port Orange I, LLC 50% 56,366
 50%
(3) 
 28,183
 Feb-2021
(3) 
 282
 116
 50% 54,629
 50% 27,315
 Feb-2021 273
 280
Ambassador
Infrastructure, LLC
 65% 10,605
 100% 10,605
 Aug-2020 106
 177
 65% 10,050
 100% 10,050
 Aug-2020 101
 106
Shoppes at
Eagle Point, LLC
 50% 32,679
 100%
(4) 
 36,400
 Oct-2020
(5) 
 364
 364
 50% 35,189
 35%
(3) 
 12,740
 Oct-2020
(4) 
 127
 364
EastGate Storage, LLC 50% 4,162
 100%
(6) 
 6,500
 Dec-2022 65
 65
 50% 6,000
 50%
(5) 
 3,000
 Dec-2022 32
 65
Self Storage at
Mid Rivers, LLC (7)
 50% 2,021
 100% 5,987
 Apr-2023 60
 —
Self-Storage at
Mid Rivers, LLC
 50% 5,434
 50%
(6) 
 2,717
 Apr-2023 30
 60
Parkdale Self Storage, LLC 50% —
 100%
(7) 
 6,500
 Jul-2024 —
 —
   Total guaranty liability $1,166
 $841
   Total guaranty liability $843
 $1,158
(1)Excludes any extension options.
(2)The loan is secured by Hammock Landing - Phase I and Hammock Landing - Phase II, respectively.
(3)
The guaranty is for a fixed amount of $12,740 throughout the term of the loan, was amended in May 2018 to extend the maturity date and increase the guaranty from 20%. The loan has two one-year extension options for an outside maturity date of February 2023. See Note 6 for more information.including any extensions.
(4)
The guaranty will be reduced to 35% once construction is complete.
(5)
The loan has onetwo-year two-year extension option, at the joint venture's election, for an outside maturity date of October 2022.
(5)
The guaranty was reduced to 50% once construction was completed during the second quarter of 2019. The guaranty may be further reduced to 25% once certain debt and operational metrics are met.
(6)
Once construction is complete, the guaranty will be reduced to 50%. The guaranty will be further reduced to 25% once certain debt and operational metrics are met.
(7)
The Company received a 1% fee for the guaranty when the loan was issued in April 2018. The guaranty will bewas reduced to 50% once construction is complete.was completed during the second quarter of 2019. The guaranty willmay be further reduced to 25% once certain debt and operational metrics are met. See Note 6
(7)
Parkdale Self Storage, LLC, a 50/50 joint venture, closed on a construction loan with a total borrowing capacity of up to $6,500 for additional information.    the development of a climate controlled self-storage facility adjacent to Parkdale Mall in Beaumont, TX. The Operating Partnership has a joint and several guaranty with its 50/50 partner. Therefore, the maximum guarantee is 100% of the loan.
The Company has guaranteed the lease performance of York Town Center, LP ("YTC"), an unconsolidated affiliate in which the Company owns a 50% interest, under the terms of an agreement with a third party that owns property as part of York Town Center. Under the terms of that agreement, YTC is obligated to cause performance of the third party’s obligations as landlord under its lease with its sole tenant, including, but not limited to, provisions such as co-tenancy and exclusivity requirements. Should YTC fail to cause performance, then the tenant under the third party landlord’s lease may pursue certain remedies ranging from rights to terminate its lease to receiving reductions

in rent. The Company has guaranteed YTC’s performance under this agreement up to a maximum of $22,000, which decreases by $800 annually until the guaranteed amount is reduced to $10,000. The guaranty expires on December 31, 2020.  The maximum guaranteed obligation was $13,200$12,400 as of SeptemberJune 30, 2018.2019.  The Company entered into an agreement with its joint venture partner under which the joint venture partner has agreed to reimburse the Company 50% of any amounts it is obligated to fund under the guaranty.  The Company did not include an obligation for this guaranty because it determined that the fair value of the guaranty was not material as of SeptemberJune 30, 20182019 and December 31, 2017.2018.
Performance Bonds
The Company has issued various bonds that it would have to satisfy in the event of non-performance. The total amount outstanding on these bonds was $17,309$15,824 and $16,998$16,003 at SeptemberJune 30, 20182019 and December 31, 2017,2018, respectively. 
Note 1213 – Share-Based Compensation
As of SeptemberJune 30, 2018,2019, the Company has outstanding awards under the CBL & Associates Properties, Inc. 2012 Stock Incentive Plan ("the 2012 Plan"), which was approved by the Company's shareholders in May 2012. The 2012 Plan permits the Company to issue stock options and common stock to selected officers, employees and non-employee directors of the Company up to a total of 10,400,000 shares. As the primary operating subsidiary of the

Company, the Operating Partnership participates in and bears the compensation expense associated with the Company's share-based compensation plan.
Restricted Stock Awards
The Company may make restricted stock awards to independent directors, officers and its employees under the 2012 Plan. These awards are generally granted based on the performance of the Company and its employees. None of these awards have performance requirements other than a service condition of continued employment, unless otherwise provided. Compensation expense is recognized on a straight-line basis over the requisite service period.
Share-based compensation expense related to the restricted stock awards was $787$546 and $812$709 for the three months ended SeptemberJune 30, 2019and2018, and 2017, respectively, and $3,263$2,259 and $3,175$2,476 for the ninesix months ended SeptemberJune 30, 20182019 and 2017,2018, respectively. Share-based compensation cost capitalized as part of real estate assets was $36$27 and $94$102 for the three months ended SeptemberJune 30, 2018 2019and 2017,2018, respectively, and $260$41 and $308$224 for the ninesix months ended SeptemberJune 30, 2019 and 2018, and 2017, respectively.
A summary of the status of the Company’s nonvested restricted stock awards as of SeptemberJune 30, 2018,2019, and changes during the ninesix months ended SeptemberJune 30, 2018,2019, is presented below: 
 Shares 
Weighted-Average
Grant Date
Fair Value
Nonvested at January 1, 2019875,497
 $7.99
Granted855,681
 $2.23
Vested(744,574) $5.11
Forfeited(8,158) $6.29
Nonvested at June 30, 2019978,446
 $5.16
 Shares 
Weighted-Average
Grant Date
Fair Value
Nonvested at January 1, 2018642,359
 $13.23
Granted693,064
 $4.55
Vested(413,032) $9.64
Forfeited(8,852) $9.36
Nonvested at September 30, 2018913,539
 $8.30

As of SeptemberJune 30, 2018,2019, there was $5,443$4,142 of total unrecognized compensation cost related to nonvested stock awards granted under the plans, which is expected to be recognized over a weighted-average period of 2.6 years.
Long-Term Incentive Program
In 2015, the Company adopted a long-term incentive program ("LTIP") for its named executive officers, which consists of PSUperformance stock unit ("PSU") awards and annual restricted stock awards, that may be issued under the 2012 Plan. The number of shares related to the PSU awards that each named executive officer may receive upon the conclusion of a three-year performance period is determined based on the Company's achievement of specified levels of long-term total stockholder return ("TSR") performance relative to the National Association of Real Estate Investment Trusts ("NAREIT") Retail Index, provided that at least a "Threshold" level must be attained for any shares to be earned.

Beginning with the 2018 PSUs, two-thirds of the quantitative portion of the award over the performance period will be based on the achievement of TSR relative to the NAREIT Retail Index while the remaining one-third will be based on the achievement of absolute TSR metrics.metrics for the Company. To maintain compliance with the 200,000 share annual equity grant limit under the 2012 Plan, beginning with the 2018 PSU grant, to the extent that a grant of PSUs could result in the issuance of a number of shares of common stock at the conclusion of the performance period that, when coupled with the number of shares of time-vesting restricted stock granted in the same year the PSUs were granted, would exceed the annual limit, any such excess will be converted to a cash bonus award with a value equivalent to the number of shares of common stock constituting such excess times the average of the high and low trading prices reported for CBL's common stock on the date such shares would otherwise have been issuable. Any such portion of the value of the 2018 PSUs or the 2019 PSUs earned payable as a cash bonus will be subject to the same vesting provisions as the issuance of common stock pursuant to the PSUs and is not expected to be significant. In addition, to the extent any cash is to be paid, the cash will be paid first relative to the vesting schedule, ahead of the issuance of shares of common stock with respect to the balance of PSUs earned.
Annual Restricted Stock Awards
Under the LTIP, annual restricted stock awards consist of shares of time-vested restricted stock awarded based on a qualitative evaluation of the performance of the Company and the named executive officer during the fiscal year. Annual restricted stock awards under the LTIP, which are included in the totals reflected in the preceding table, vest 20% on the date of grant with the remainder vesting in four equal annual installments.

Performance Stock Units
A summary of the status of the Company’s PSU activity as of SeptemberJune 30, 2018,2019, and changes during the ninesix months ended SeptemberJune 30, 2018,2019, is presented below: 
 PSUs 
Weighted-Average
Grant Date
Fair Value
Outstanding at January 1, 2018560,371
 $5.91
2018 PSUs granted741,977
 $2.63
Forfeited(138,899) $4.22
Outstanding at September 30, 2018 (1)
1,163,449
 $4.55
 PSUs 
Weighted-Average
Grant Date
Fair Value
Outstanding at January 1, 2019910,911
 $4.67
2019 PSUs granted (1)
1,103,537
 $2.40
Outstanding at June 30, 2019 (2)
2,014,448
 $3.42
(1)
Includes 566,862 shares classified as a liability due to the potential cash component described above.
(2)
None of the PSUs outstanding at SeptemberJune 30, 20182019 were vested.
Shares earned pursuant to the PSU awards vest 60% at the conclusion of the performance period while the remaining 40% of the PSU award vests 20% on each of the first two anniversaries thereafter.
Compensation cost is recognized on a tranche-by-tranche basis using the accelerated attribution method. The resulting expense, for awards classified as equity, is recorded regardless of whether any PSU awards are earned as long as the required service period is met.
The fair value of the potential cash component related to the 20182019 PSUs is measured at each reporting period, using the same methodology as was used at the initial grant date, and classified as a liability on the condensed consolidated balance sheet as of SeptemberJune 30, 20182019 with an adjustment to compensation expense. If the performance criterion is not satisfied at the end of the performance period for the 20182019 PSUs, previously recognized compensation expense related to the liability-classified awards would be reversed as there would be no value at the settlement date.
Share-based compensation expense related to the PSUs was $178$443 and $386$533 for the three months ended SeptemberJune 30, 20182019 and 2017,2018, respectively, and $1,130$869 and $1,115$952 for the ninesix months ended SeptemberJune 30, 20182019 and 2017,2018, respectively. Unrecognized compensation costs related to the PSUs was $3,141$3,304 as of SeptemberJune 30, 2018,2019, which is expected to be recognized over a weighted-average period of 3.74.0 years.

The following table summarizes the assumptions used in the Monte Carlo simulation pricing model related to the PSUs:
2018 PSUs 2017 PSUs 2016 PSUs2019 PSUs 2018 PSUs 2017 PSUs
Grant dateFebruary 12, 2018 February 7, 2017 February 10, 2016February 11, 2019 February 12, 2018 February 7, 2017
Fair value per share on valuation date (1)
$4.76
 $6.86
 $4.98
 $4.74
 $4.76
 $6.86
 
Risk-free interest rate (2)
2.36% 1.53% 0.92% 2.54% 2.36% 1.53% 
Expected share price volatility (3)
42.02% 32.85% 30.95% 60.99% 42.02% 32.85% 
(1)
The value of the PSU awards is estimated on the date of grant using a Monte Carlo simulation model. The valuation consists of computing the fair value using CBL's simulated stock price as well as TSR over a three-yearthree-year performance period. The award is modeled as a contingent claim in that the expected return on the underlying shares is risk-free and the rate of discounting the payoff of the award is also risk-free. The weighted-average fair value per share related to the 20182019 PSUs classified as equity consists of 240,164357,800 shares at a fair value of $3.132.45 (which relate to relative TSR) and 120,064178,875 shares at a fair value of $1.632.29 per share (which relate to absolute TSR). The weighted-average fair value per share related to the 20172018 PSUs classified as equity consists of 115,082240,164 shares at a fair value of $5.623.13 per share (which relate to relative TSR) and 162,294$120,064 shares at a fair value of $7.741.63 per share.share (which relate to absolute TSR).
(2)The risk-free interest rate was based on the yield curve on zero-coupon U.S. Treasury securities in effect as of the valuation date, which is the respective grant date listed above.
(3)
The computation of expected volatility was based on a blend of the historical volatility of CBL's shares of common stock based on annualized daily total continuous returns over a three-yearthree-year period and implied volatility data based on the trailing month average of daily implied volatilities implied by stock call option contracts that were both closest to the terms shown and closest to the money.

Note 1314 – Noncash Investing and Financing Activities
The Company’s noncash investing and financing activities were as follows:
 Six Months Ended
June 30,
 2019 2018
Accrued dividends and distributions payable$2,420
 $41,656
Additions to real estate assets accrued but not yet paid26,572
 23,318
Conversion of Operating Partnership units for common stock—
 3,059
Lease liabilities arising from obtaining right-of-use assets4,042
 —
Deconsolidation upon contribution/assignment of interests in joint venture: (1) 
   
Decrease in real estate assets(566) (587)
Increase in investment in unconsolidated affiliates999
 974
Transfer of real estate assets in settlement of mortgage debt obligation:   
Decrease in real estate assets(60,059) —
Decrease in mortgage and other indebtedness124,111
 —
Decrease in operating assets and liabilities9,333
 —
Decrease in intangible lease and other assets(1,663) —
 Nine Months Ended
September 30,
 2018 2017
Accrued dividends and distributions payable$41,657
 $54,375
Additions to real estate assets accrued but not yet paid22,428
 12,204
Conversion of Operating Partnership units for common stock (1)
3,059
 —
Deconsolidation upon contribution/assignment of interests in joint venture: (1) 
   
Decrease in real estate assets(587) (9,131)
Increase in investment in unconsolidated affiliates974
 —
Decrease in mortgage and other indebtedness—
 2,466
Decrease in operating assets and liabilities—
 1,286
Decrease in noncontrolling interest and joint venture interest—
 2,232
Transfer of real estate assets in settlement of mortgage debt obligation:   
Decrease in real estate assets—
 (149,722)
Decrease in mortgage and other indebtedness—
 189,642
Decrease in operating assets and liabilities—
 (122)

(1)
See Note 67 for moreadditional information.
Note 1415 – Subsequent Events
In October 2018,July 2019, the Company closed on the sale of Parkway Plaza,the office building at 850 Greenbrier Circle, located in Fort Oglethorpe, GA.Chesapeake, VA. The community centerproperty was sold for a gross sales price of $16,500. Net proceeds were used to reduce outstanding balances$10,500.
In July 2019, the Company closed on the Company's unsecured linessale of credit.a Kroger parcel at Foothills Plaza, located in Maryville, TN. The property was sold for a gross price of $2,350.
In October 2018,July 2019, the Company exercised its option to extendclosed on the $350,000 unsecured termsale of the Forum at Grandview, located in Madison, MS. The property was sold for a gross price of $31,750.
In July 2019, the Company closed on the sale of the Barnes & Noble parcel, located in High Point, NC. The property was sold for a gross price of $2,000.
In July 2019, the lender foreclosed on the loan to October 2019.secured by Triangle Town Center.
The $1,554 mortgageIn August 2019, the Village Square note receivable secured by Village Square was amended in October 2018 to extend the maturity date to December 2018 and restructure the monthly payment amount.September 30, 2019.    
In October 2018, the Company closed on a $29,400 construction loan. The three-year loan bears interest at a variable rate of LIBOR plus 290 basis points. The loan has a one-year extension option for an outside maturity of October 2022. Funds from the loan will be used in the redevelopment of the former Sears location at Brookfield Square in Brookfield, WI.
ITEM 2:  Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and accompanying notes that are included in this Form 10-Q.  Capitalized terms used, but not defined, in this Management’s Discussion and Analysis of Financial Condition and Results of Operations have the same meanings as defined in the notes to the condensed consolidated financial statements. In this discussion, the terms “we,” “us” and “our” refer to the Company or the Company and the Operating Partnership collectively, as the text requires.
Certain statements made in this section or elsewhere in this report may be deemed “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements of historical fact should be considered to be forward-looking statements. In many cases, these forward-looking statements may be identified by the use of words such as “will,” “may,” “should,” “could,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “projects,” “goals,” “objectives,” “targets,” “predicts,” “plans,” “seeks,” and variations of these words and similar expressions.  Any forward-looking statement speaks only as of the date on which it is made and is qualified in its entirety by reference to the factors discussed throughout this report.

Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance or results and we can give no assurance that these expectations will be attained.  It is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of known and unknown risks and uncertainties.  In addition to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017,2018, such known risks and uncertainties include, without limitation:
general industry, economic and business conditions;
interest rate fluctuations;
costs and availability of capital, including debt, and capital requirements;
costs and availability of real estate;
inability to consummate acquisition opportunities and other risks associated with acquisitions;
competition from other companies and retail formats;
changes in retail demand and rental rates in our markets;
shifts in customer demands including the impact of online shopping;
tenant bankruptcies or store closings;
changes in vacancy rates at our properties;
changes in operating expenses;
changes in applicable laws, rules and regulations;
sales of real property;
cyber-attacks or acts of cyber-terrorism;
changes in the credit ratings of the Operating Partnership's senior unsecured long-term indebtedness;
the ability to obtain suitable equity and/or debt financing and the continued availability of financing, in the amounts and on the terms necessary to support our future refinancing requirements and business; and
other risks referenced from time to time in filings with the SEC and those factors listed or incorporated by reference into this reportreport.
This list of risks and uncertainties is only a summary and is not intended to be exhaustive.  We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information. 
EXECUTIVE OVERVIEW
We are a self-managed, self-administered, fully integrated REIT that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, open-air and mixed-use centers, outlet centers, associated centers, community centers and office properties. See Note 1 to the condensed

consolidated financial statements for information on our property interests as of SeptemberJune 30, 2018.2019. We have elected to be taxed as a REIT for federal income tax purposes.
We had a net loss for the three and ninesix months ended SeptemberJune 30, 20182019 of $3.0$(29.7) million and $33.6$(76.5) million, respectively, compared to a net incomeloss for the three and ninesix months ended SeptemberJune 30, 20172018 of $9.3$(30.0) million and $118.4$(30.6) million, respectively. We recorded a net loss attributable to common shareholders for the three and ninesix months ended SeptemberJune 30, 20182019 of $12.6$(35.4) million and $57.9$(85.6) million, respectively, compared to a net loss for the three and six months ended SeptemberJune 30, 20172018 of $2.3$(35.0) million and net income of $50.8$(45.3) million, respectively. For the three month period, earnings from Comparable Properties (defined below) were down primarily due to store closures and rent concessions for tenants with high occupancy cost levels, including tenants that declared bankruptcy in 2018 and 2019. This decline was offset by a lower loss on impairment as compared to the prior period. The decline for the nine months ended September 30, 2017. The year-to-date declinesix month period was primarily due to a declinelower earnings from Comparable Properties (defined below) due to store closures and rent concessions for tenants with high occupancy cost levels, including tenants that declared bankruptcy in revenue related2018 and 2019. Also contributing to the impactdecline was the litigation settlement expense of late 2017 and early 2018 tenant bankruptcies, which impacted our overall portfolio, as well as a higher amount of gain on sales of real estate assets$88.2 million that was recognized in the prior-year period.first quarter of 2019, which was partially offset by gains on extinguishment of debt of $71.7 million that were also recorded in the first quarter of 2019.
During the second quarter, Ascena announced that it would be closing all its dressbarn stores at the end of 2019. We have 12 dressbarn stores in our portfolio that account for $1.3 million in annual rents. Additionally, Charming Charlie announced that it was closing all of its stores August 31, 2019. We have 11 stores in our portfolio that account for $0.9 million in annual rents.
Quarterly results were in-line with our expectations despite significant additional rent losses from unanticipated store closings. The Sears bankruptcy allows us to accelerate our redevelopment plans to further transform our properties into suburban town centers. The six additional Sears closures announced as part ofexpectations. Lease spreads improved and same-center sales increased over 4% during the filing are expected tosecond quarter.  We have minimal impact to our financial results24 replacements committed, under construction or open for 2018. Three of these were stores we had purchased from Searsthe 40 closed anchors in a 2017 sale-leaseback transaction and already have redevelopment plans underway. We are utilizing a capital-lite

development strategy for a number of redevelopment projects across our portfolio, demonstrating tremendous progress on our anchor replacement program. This program will help stabilize our income as we replace lost revenues, mitigate co-tenancy exposure and deliver new uses that require little or no investment by us in order to preserve capital.drive traffic and strengthen the entire property.  See the "Liquidity and Capital ResourcesResources" section for information on our development, expansion and redevelopment projects as of SeptemberJune 30, 2018.2019.
We are strengtheningcontinue to strengthen our balance sheet by extending our maturity schedule. Funds from a 10-year fixed 5.103% fixed-rate loan secured by The Outlet Shoppes at El Paso coupled with net proceeds from the second quarter refinancingIn January 2019, we replaced all of CoolSprings Galleria, aggregating to approximately $94.0 million at our share, were used along with nearly $90.0 million in proceeds from dispositions to fund the majority of the $190 million term loan paydown in July. We have also made significant progress towards finalizing terms for the recast of ourunsecured lines of credit and unsecured term loans.loans with a new $1.185 billion secured credit facility, which is comprised of a $685.0 million line of credit and a fully funded $500.0 million term loan. With this closing, we have addressed our significant debt maturities for 2019 and have addressed all of our unsecured debt maturities until 2023. See "Liquidity and Capital Resources" for more information on financing activity.
As discussed last quarter, weIn March 2019, our Board of Directors approved the structure of a settlement in a class action lawsuit. We have denied, and continue to deny, any wrongdoing and believe that our actions at all times have been evaluating preliminary projectionsproper and lawful. However, given the class certification, the accelerated trial schedule, the inherent risk of any trial, and the potential cost of an adverse resolution of the litigation, we believed that a settlement was in the Company's best interest and in the best interests of our shareholders. We recognized litigation settlement expense of $88.2 million during the first quarter as a result of the settlement. See Note 12 to the condensed consolidated financial statements for 2019more information.
We continue to ensure wecapitalize on opportunities to raise attractively priced capital from non-core assets, as evidenced by the $120.0 million in gross asset sales that have amplebeen completed year-to-date. This combined with our estimated free cash flow of over $200.0 million provides liquidity to fund redevelopments and debt reduction. To accomplish this goal, the Board has approved reducing the common dividend to an annualized rate of $0.30 per share from the prior annualized rate of $0.80 per share, beginning with the dividend payable on January 16, 2019. The dividend reduction will preserve an estimated $100 million of cash on an annual basis. Future dividends are subject to Board approval.invest in our redevelopment program.
Same-center NOI and FFO are non-GAAP measures. For a description of same-center NOI, a reconciliation from net income (loss) to same-center NOI, and an explanation of why we believe this is a useful performance measure, see Non-GAAP Measure - Same-center Net Operating Income in “Results of Operations.” For a description of FFO, a reconciliation from net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders, and an explanation of why we believe this is a useful performance measure, see "Non-GAAP Measure - Funds from Operations."

RESULTS OF OPERATIONS
Properties that were in operation for the entire year during 20172018 and the ninesix months ended SeptemberJune 30, 20182019 are referred to as the “Comparable Properties.”  Since January 1, 2017,2018, we have opened one outlet center developmenttwo self-storage facilities and one self-storage facilitycommunity center as follows: 
Property Location Date Opened
The Outlet Shoppes at Laredo (1)
Laredo, TXApril 2017
EastGate Mall - CubeSmart Self-storage (2)(1)
 Cincinnati, OH September 2018
The Shoppes at Eagle Point (1)
Cookeville, TNNovember 2018
Mid Rivers Mall - CubeSmart Self-storage (1)
St. Peters, MOJanuary 2019
(1)The Outlet Shoppes at LaredoEach of these properties is owned by a 65/35 joint venture.
(2)A 50/50 joint venture that is accounted for using the equity method of accounting and is included in equity in earnings of unconsolidated affiliates in the accompanying condensed consolidated statements of operations.    
The Outlet Shoppes at Laredo is referred to as the "New Property" in the following discussion. Non-core properties are defined as Excluded Malls - see definition that follows under "Operational ReviewReview.".
Comparison of the Three Months Ended SeptemberJune 30, 20182019 to the Three Months Ended SeptemberJune 30, 20172018
Revenues
  
Total for the Three
Months
Ended September 30,
   
Comparable
Properties
      
  2018 2017 Change Core Non-core New Dispositions Change
Minimum rents $142,248
 $150,836
 $(8,588) $(6,978) $(65) $(141) $(1,404) $(8,588)
Percentage rents 2,429
 3,000
 (571) (504) 26
 —
 (93) (571)
Other rents 2,347
 3,790
 (1,443) (1,277) (81) (46) (39) (1,443)
Tenant reimbursements 55,374
 63,055
 (7,681) (7,400) 4
 24
 (309) (7,681)
  202,398
 220,681
 (18,283) (16,159) (116) (163) (1,845) (18,283)
                 
Management, development and leasing fees 2,658
 2,718
 (60) (60) —
 —
 —
 (60)
Other 1,822
 1,251
 571
 746
 27
 (195) (7) 571
Total revenues $206,878
 $224,650
 $(17,772) $(15,473) $(89) $(358) $(1,852) $(17,772)
  
Total for the Three
Months
Ended June 30,
   
Comparable
Properties
    
  2019 2018 Change Core Non-core Dispositions Change
Rental revenues $185,393
 $207,568
 $(22,175) $(12,083) $(342) $(9,750) $(22,175)
Management, development and leasing fees 2,586
 2,643
 (57) (57) —
 —
 (57)
Other 5,398
 4,387
 1,011
 $1,094
 47
 (130) 1,011
Total revenues $193,377
 $214,598
 $(21,221) $(11,046) $(295) $(9,880) $(21,221)

Third quarter results reflect the impact of retailer bankruptcy activity, which occurred in 2017and year-to-date 2018. Minimum rents and tenant reimbursements ofRental revenues from the Comparable Properties declined primarily due to store closures and rent concessions for tenants with high occupancy cost levels, including tenants that declared bankruptcy in bankruptcy.
Other revenue for the three months ended September 30, 2018 includes $1.2 million of marketing revenues, which upon the adoption of the new revenue guidance (see Note 3 to the condensed consolidated financial statements) were classified under other revenues. For the three months ended September 30, 2017, these revenues were included in other rents in the condensed consolidated statements of operations.
Our cost recovery ratio was 90.9% compared to 98.3% in the prior-year period. The decline was primarily driven by lower occupancy and the bankruptcy activity noted above. The comparability of the ratio is also negatively impacted by the industry trend to move to gross leases.2019.
Operating Expenses
 
Total for the Three
Months
Ended September 30,
   
Comparable
Properties
       
Total for the Three
Months
Ended June 30,
   
Comparable
Properties
    
 2018 2017 Change Core Non-core New Dispositions Change 2019 2018 Change Core Non-core Dispositions Change
Property operating $30,004
 $31,295
 $(1,291) $(747) $(53) $(28) $(463) $(1,291) $(26,532) $(29,527) $2,995
 $1,232
 $27
 $1,736
 $2,995
Real estate taxes 19,433
 21,573
 (2,140) (2,935) 931
 (55) (81) (2,140) (19,148) (20,456) 1,308
 869
 (12) 451
 1,308
Maintenance and repairs 11,475
 11,254
 221
 392
 (27) 40
 (184) 221
 (11,298) (12,059) 761
 2
 8
 751
 761
Property operating expenses 60,912
 64,122
 (3,210) (3,290) 851
 (43) (728) (3,210) (56,978) (62,042) 5,064
 2,103
 23
 2,938
 5,064
                              
Depreciation and amortization 71,945
 71,732
 213
 1,855
 (1,069) 268
 (841) 213
 (64,478) (73,566) 9,088
 4,358
 1,501
 3,229
 9,088
General and administrative 16,051
 13,568
 2,483
 2,483
 —
 —
 —
 2,483
 (14,427) (13,490) (937) (937) —
 —
 (937)
Loss on impairment 14,600
 24,935
 (10,335) 14,598
 (24,523) —
 (410) (10,335) (41,608) (51,983) 10,375
 (38,136) (3,762) 52,273
 10,375
Other 38
 132
 (94) (94) —
 —
 —
 (94) (34) (245) 211
 211
 —
 —
 211
Total operating expenses $163,546
 $174,489
 $(10,943) $15,552
 $(24,741) $225
 $(1,979) $(10,943) $(177,525) $(201,326) $23,801
 $(32,401) $(2,238) $58,440
 $23,801
Property operating expenses at the Comparable Properties decreased primarily due to decreasesa change in utilities expense andthe classification of bad debt expense which isas a result of the adoption of ASC 842 effective January 1, 2019. Bad debt expense of $0.7 million was included in property operating expenses for the three months ended June 30, 2018; however, beginning January 1, 2019, rental revenues that are estimated to be uncollectable are reflected as a decrease in rental revenues. For the three months ended June 30, 2019, we recognized $0.2 million as a reduction to rental revenues for amounts that are estimated to be uncollectable, all of which was related to the Comparable Properties. The remaining decrease in property operating expenses of the Comparable Properties was primarily due to lower utilities, security and payroll expenses. Real estate tax expense declined as a declinenumber of the Comparable Properties experienced reductions in real estate taxes. These decreases weretaxes in their respective markets. Maintenance and repairs expenses decreased primarily due to lower janitorial costs partially offset by an increase in maintenance and repairs expense which was primarily related to parking lot expenses.snow removal costs at certain properties.

The $0.8$5.9 million increasedecrease in depreciation and amortization expense related to the Comparable Properties primarily relates to an increase of $3.1 milliona decrease in write-offs related to tenant improvements due to several closings primarily related to the Bon-Ton bankruptcies. Amortization expense related to tenant improvements also was approximately $1.4 million lower for the three months ended September 30, 2018 as compared to September 30, 2017, primarily due to write-offs of tenant improvements and intangible lease assets related to store closings in the prior-year period. Additionally, depreciation expense decreased by $0.8 million for two non-core malls.prior year period, as well as store closures since June 30, 2018.
General and administrative expenses increased primarily due to expense related tono longer capitalizing the retirementcost of leasing personnel for development projects as a result of adopting the Company's Chief Operating Officernew leasing standard in 2019 and higher legal expenses. As a percentage of revenues, generalcosts, which were partially offset by reductions in salary and administrative expenses excluding the one-time retirement expense were 7.0% for the three months ended September 30, 2018 compared to 6.0% for the three months ended September 30, 2017.stock compensation costs.
In the thirdsecond quarter of 2019, we recognized $41.6 million of loss on impairment of real estate to write down the book value of one mall and one community center. In the second quarter of 2018, we recognized a $14.6$52.0 million loss on impairment of real estate to write down the book value of vacant land. In the third quarter of 2017, we recognized a $24.9 million loss on impairment of real estate primarily to write down the book value of a mall. See Note 45 to the condensed consolidated financial statements for more information.
Other Income and Expenses
Interest expense increased $1.3decreased $1.7 million for the three months ended SeptemberJune 30, 20182019 compared to the prior-year period. The increasedecrease was primarily due to a $4.4$2.8 million decrease in property-level interest expense due to the dispositions in January 2019 of Acadiana Mall and Cary Town Center, which were encumbered by non-recourse mortgage loans. This decrease was partially offset by an increase in corporate-level interest expenses which were atexpense due to higher variable rates on our corporate-level debt as compared to the prior-year quarter, partially related to the change in our credit ratings that increased ourhigher interest rate spreads in Septemberspread under our new credit facility as compared with the prior, as well as increases in LIBOR. Additionally, corporate-level interest expense increased due to an additional $225.0 million issuance of the 2026 Notes in September 2017. These increases were partially offset by $3.5 million lower property-level interest expense, related to the retirement of higher-rate

mortgage loans and property dispositions. Interest expense also declined $0.6 million due to an increase in capitalized interest related to development projects for the three months ended September 30, 2018 compared to the prior-year period.
During the three months ended September 30, 2017, we recorded a $6.5 million gain on extinguishment of debt which primarily consisted of a $6.9 million gain, related to the conveyance of a mall to the lender in satisfaction of the non-recourse debt secured by the property. This was partially offset by a $0.4 million loss related to prepayment fees for the early retirement of debt.
During the three months ended September 30, 2017, we recognized a $0.4 million loss on investment related to the disposition of our 25% interest in an unconsolidated joint venture, which closed in the third quarter of 2017.
The income tax provision of $1.0 million for the three months ended September 30, 2018 relates to the Management Company, which is a taxable REIT subsidiary, and consists of a current tax provision of $1.7 million and a deferred tax benefit of $0.7 million. During the three months ended September 30, 2017, we recorded an income tax benefit of $1.1 million, which consisted of a current tax benefit of $0.2 million and a deferred tax benefit of over $0.8 million.
Equity in earnings of unconsolidated affiliates decreased by $2.9$2.5 million during the three months ended SeptemberJune 30, 20182019 compared to the prior-year period. The $2.9 million decrease iswas primarily attributabledue to a $1.0 million lossgains on impairment related to our 10% investmenttwo outparcel sales at unconsolidated affiliates in an unconsolidated affiliate, as described in Note 6,the prior-year period and decreases in base rent, percentage rent and tenant reimbursementsrental revenues at several malls primarily due to store closures and rent concessions for tenants with high occupancy cost levels, including tenants in bankruptcy.
During the three months ended SeptemberJune 30, 2019, we recognized $5.5 million of gain on sales of real estate assets primarily related the sale of a center, a hotel and an outparcel. During the three months ended June 30, 2018, we recognized $7.9$3.7 million of gain on sales of real estate assets related to the sale of two outparcels.
Comparison of the Six Months Ended June 30, 2019 to the Six Months Ended June 30, 2018
Revenues
  
Total for the Six
Months
Ended June 30,
   
Comparable
Properties
    
  2019 2018 Change Core Non-core Dispositions Change
Rental revenues $376,373
 $420,297
 $(43,924) $(26,583) $(263) $(17,078) $(43,924)
Management, development and leasing fees 5,109
 5,364
 (255) (255) —
 —
 (255)
Other 9,925
 9,137
 788
 $846
 62
 (120) 788
Total revenues $391,407
 $434,798
 $(43,391) $(25,992) $(201) $(17,198) $(43,391)
Rental revenues from the Comparable Properties declined primarily due to store closures and rent concessions for tenants with high occupancy cost levels, including tenants that declared bankruptcy in 2018 and 2019.

Operating Expenses
  
Total for the Six
Months
Ended June 30,
   
Comparable
Properties
    
  2019 2018 Change Core Non-core Dispositions Change
Property operating $(55,512) $(62,353) $6,841
 $4,093
 $46
 $2,702
 $6,841
Real estate taxes (39,067) (42,304) 3,237
 2,425
 (9) 821
 3,237
Maintenance and repairs (24,074) (25,238) 1,164
 (306) 191
 1,279
 1,164
Property operating expenses (118,653) (129,895) 11,242
 6,212
 228
 4,802
 11,242
Depreciation and amortization (134,270) (145,316) 11,046
 4,588
 (315) 6,773
 11,046
General and administrative (36,434) (31,794) (4,640) (4,640) —
 —
 (4,640)
Loss on impairment (66,433) (70,044) 3,611
 (38,137) (26,532) 68,280
 3,611
Litigation settlement (88,150) —
 (88,150) (88,150) —
 —
 (88,150)
Other (34) (339) 305
 305
 —
 —
 305
Total operating expenses $(443,974) $(377,388) $(66,586) $(119,822) $(26,619) $79,855
 $(66,586)
Property operating expenses at the Comparable Properties decreased primarily due to a change in the classification of bad debt expense as a result of the adoption of ASC 842 effective January 1, 2019. Bad debt expense of $2.7 million was included in property operating expenses for the six months ended June 30, 2018; however, beginning January 1, 2019, rental revenues that are estimated to be uncollectable are reflected as a decrease in rental revenues. For the six months ended June 30, 2019, we recognized $1.7 million as a reduction to rental revenues for amounts that are estimated to be uncollectable, substantially all of which was related to the Comparable Properties. The remaining decrease in property operating expenses of the Comparable Properties was primarily due to lower utilities, security, marketing and payroll expenses. Real estate tax expense declined as a number of the Comparable Properties experienced reductions in real estate taxes in their respective markets. Maintenance and repairs expenses increased slightly primarily due to higher snow removal and repair expenses, partially offset by lower janitorial costs.
The $4.3 million decrease in depreciation and amortization expense related to the Comparable Properties primarily relates to a decrease due to write-offs of tenant improvements and intangible lease assets related to store closings in the prior year period, as well as store closures since June 30, 2018.
General and administrative expenses increased primarily due to higher legal expense related to litigation and no longer capitalizing the cost of leasing personnel for development projects as a result of adopting the new leasing standard in 2019, which were partially offset by reductions in salary and stock compensation costs.
For the six months ended June 30, 2019, we recognized $66.4 million of loss on impairment of real estate to write down the book value of three malls and one community center. In 2018, we recognized a $70.0 million loss on impairment of real estate to write down the book value of two malls. See Note 5 to the condensed consolidated financial statements for more information.
For the six months ended June 30, 2019, we recognized $88.2 million of litigation settlement expense related to the proposed settlement of a class action lawsuit. See Note 12 to the condensed consolidated financial statements for more information.
Other Income and Expenses
Interest expense decreased $1.5 million for the six months ended June 30, 2019 compared to the prior-year period. The decrease was primarily due to a $5.6 million decrease in property-level interest expense due to the dispositions in January 2019 of Acadiana Mall and Cary Town Center, which were encumbered by non-recourse mortgage loans, and a paydown in May 2019 of a portion of the loan that is secured by The Outlet Shoppes at Laredo. This decrease was partially offset by an increase of $4.1 million in corporate-level interest expense due to higher variable rates on our corporate-level debt as compared to the prior-year quarter, partially related to the higher interest rate spread under our new credit facility as compared with the previous credit facility, as well as increases in LIBOR.
During the six months ended June 30, 2019, we recorded $71.7 million of gain on extinguishment of debt related to two malls. We transferred Acadiana Mall to the lender in satisfaction of the non-recourse debt secured by the property. We sold Cary Towne Center and used the net proceeds from the sale to satisfy a portion of the non-recourse loan that secured the property and the remaining principal balance was forgiven.

Equity in earnings of unconsolidated affiliates decreased by $2.9 million during the six months ended June 30, 2019 compared to the prior-year period. The decrease was primarily due to gains on two outparcel sales at unconsolidated affiliates in the prior-year period and decreases in rental revenues at several malls primarily due to store closures and rent concessions for tenants with high occupancy cost levels, including tenants in bankruptcy.
During the six months ended June 30, 2019, we recognized $5.8 million of gain on sales of real estate assets primarily related to the sale of a center, a hotel and an outparcel. During the six months ended June 30, 2018, we recognized $8.1 million of gain on sales of real estate assets primarily related to the sale of a community center and five outparcels. During the three months ended September 30, 2017, we recognized $1.4 million of gain on sales of real estate assets, primarily related to the sale of two outparcels.
Comparison of the Nine Months Ended September 30, 2018 to the Nine Months Ended September 30, 2017
Revenues
  
Total for the Nine
Months
Ended September 30,
   
Comparable
Properties
      
  2018 2017 Change Core Non-core New Dispositions Change
Minimum rents $441,097
 $468,195
 $(27,098) $(13,476) $(1,362) $860
 $(13,120) $(27,098)
Percentage rents 6,610
 7,127
 (517) (238) (23) 8
 (264) (517)
Other rents 6,898
 11,171
 (4,273) (3,915) (174) (99) (85) (4,273)
Tenant reimbursements 172,601
 192,577
 (19,976) (16,441) (1,213) 881
 (3,203) (19,976)
  627,206
 679,070
 (51,864) (34,070) (2,772) 1,650
 (16,672) (51,864)
                 
Management, development and leasing fees 8,022
 8,747
 (725) (725) —
 —
 —
 (725)
Other 6,448
 4,079
 2,369
 2,447
 163
 1
 (242) 2,369
Total revenues $641,676
 $691,896
 $(50,220) $(32,348) $(2,609) $1,651
 $(16,914) $(50,220)
Revenues continue to reflect the impact of retailer bankruptcy activity, which occurred in 2017and year-to-date 2018. Minimum rents and tenant reimbursements of the Comparable Properties declined primarily due to store closures and rent concessions for tenants in bankruptcy.
The decrease in management, development and leasing fees was primarily due to terminated contracts for three malls owned by third parties, which we had been managing, that were sold to new owners.
Other revenue for the nine months ended September 30, 2018 includes $3.4 million of marketing revenues, which upon the adoption of the new revenue guidance (see Note 3 to the condensed consolidated financial statements) were classified under other revenues. For the nine months ended September 30, 2017, these revenues were included in other rents in the condensed consolidated statements of operations.


Our cost recovery ratio was 90.5% compared to 98.8% in the prior-year period. The decline was primarily driven by lower occupancy and the bankruptcy activity noted above as well as an increase of $1.4 million in snow removal expense for the nine months ended September 30, 2018. The comparability of the ratio is also negatively impacted by the industry trend to move to gross leases.
Operating Expenses
  
Total for the Nine
Months
Ended September 30,
   
Comparable
Properties
      
  2018 2017 Change Core Non-core New Dispositions Change
Property operating $92,357
 $96,250
 $(3,893) $(1,375) $(19) $1,028
 $(3,527) $(3,893)
Real estate taxes 61,737
 62,343
 (606) (1,195) 618
 656
 (685) (606)
Maintenance and repairs 36,713
 36,322
 391
 1,790
 70
 82
 (1,551) 391
Property operating expenses 190,807
 194,915
 (4,108) (780) 669
 1,766
 (5,763) (4,108)
                 
Depreciation and amortization 217,261
 225,461
 (8,200) 146
 (3,074) 1,609
 (6,881) (8,200)
General and administrative 47,845
 45,402
 2,443
 2,443
 —
 —
 —
 2,443
Loss on impairment 84,644
 71,401
 13,243
 32,659
 (15,547) —
 (3,869) 13,243
Other 377
 5,151
 (4,774) (4,774) —
 —
 —
 (4,774)
Total operating expenses $540,934
 $542,330
 $(1,396) $29,694
 $(17,952) $3,375
 $(16,513) $(1,396)
Property operating expenses at the Comparable Properties decreased primarily due to a decrease in payroll and related expenses and utilities partially offset by an increase in marketing costs, which are all included in property operating, and a decrease in real estate taxes. These decreases were partially offset by higher snow removal costs, which are included in maintenance and repairs expense.
The $2.9 million decrease in depreciation and amortization expense related to the Comparable Properties primarily is attributable to a decline of $5.3 million in write-offs related to tenant improvements and in-place leases due to several closings related to tenant bankruptcies in the prior-year period, partially offset by an increase in depreciation expense related to capital expenditures for redevelopments and deferred maintenance.
General and administrative expenses increased primarily due to a decrease in capitalized overhead related to development projects and expense related to the retirement of the Company's Chief Operating Officer. As a percentage of revenues, general and administrative expenses excluding the one-time retirement expense were 7.2% for the nine months ended September 30, 2018 compared to 6.6% for the nine months ended September 30, 2017.
In the nine months ended September 30, 2018, we recognized an $84.6 million loss on impairment of real estate to write down the book value of two malls and vacant land. In the nine months ended September 30, 2017, we recognized a $71.4 million loss on impairment of real estate primarily to write down the book value of two malls, a parcel project near an outlet center and one outparcel. See Note 4 to the condensed consolidated financial statements for more information.
Other expense for the nine months ended September 30, 2017 includes $5.0 million of abandoned projects expense.
Other Income and Expenses
Interest and other income decreased $0.5 million for the     nine months ended September 30, 2018 compared to the prior-year period primarily due to $0.9 million received in the prior year as an insurance reimbursement for nonrecurring professional fees expense (which represent one-time expenses that are not part of our normal operations) related to the completed SEC investigation that occurred in 2016. This increase was partially offset by an increase in corporate interest income compared to the prior-year period.
Interest expense decreased $2.0 million for the nine months ended September 30, 2018 compared to the prior-year period. The decrease was primarily due to $18.1 million lower property-level interest expense, related to the retirement of higher-rate mortgage loans and property dispositions. This decrease was partially offset by an increase of $15.7 million in corporate-level interest expense as we used our credit lines to retire higher-rate secured debt.

During the nine months ended September 30, 2017, we recorded a $30.9 million gain on extinguishment of debt which primarily consisted of a $39.8 million gain related to the conveyance of three malls to the respective lenders in satisfaction of the non-recourse debt secured by the properties. This was partially offset by an $8.5 million loss related to prepayment fees for the early retirement of debt on mortgage loans secured by two malls.
The nine months ended September 30, 2018 includes a $0.4 million gain on investment related to the contribution of land to a new unconsolidated joint venture to construct a self-storage facility adjacent to a mall. See Note 6 for more information. During the nine months ended September 30, 2017, we recognized a $6.2 million loss on investment related to the disposition of our 25% interest in an unconsolidated joint venture, which closed in the third quarter of 2017.
The income tax benefit of $1.8 million for the nine months ended September 30, 2018 relates to the Management Company, which is a taxable REIT subsidiary, and consists of a current tax provision of $0.9 million and a deferred tax benefit of $2.7 million. During the nine months ended September 30, 2017, we recorded an income tax benefit of $4.8 million, which consisted of a current tax benefit of $7.7 million and a deferred tax provision of $2.9 million.
Equity in earnings of unconsolidated affiliates decreased by $6.5 million during the nine months ended September 30, 2018 compared to the prior-year period. The decrease is primarily attributable to a $1.0 million loss on impairment related to our 10% investment in an unconsolidated affiliate, as described in Note 6, and decreases in base rent, percentage rent and tenant reimbursements at several properties primarily due to store closures and rent concessions for tenants with high occupancy cost levels, including tenants in bankruptcy.
During the nine months ended September 30, 2018, we recognized $16.0 million of gain on sales of real estate assets including $5.5 million for the sale of two community centers and $10.5 million primarily related to the sale of 10 outparcels. During the nine months ended September 30, 2017, we recognized $86.9 million of gain on sales of real estate assets, primarily related to the sale of an outlet center and eight outparcels.
Non-GAAP Measure
Same-center Net Operating Income
NOI is a supplemental non-GAAP measure of the operating performance of our shopping centers and other properties. We define 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).
We compute NOI based on the Operating Partnership's pro rata share of both consolidated and unconsolidated properties. We believe that presenting NOI and same-center NOI (described below) based on our Operating Partnership’s pro rata share of both consolidated and unconsolidated properties is useful since we conduct substantially all of our business through our Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in the Operating Partnership. Our definition of NOI may be different than that used by other companies, and accordingly, our 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 our shopping center properties, we believe 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 our results of operations. Our calculation of same-center NOI excludes lease termination income, straight-line rent adjustments, and amortization of above and below market lease intangibles and write-offwrite-offs of landlord inducement assets in order to enhance the comparability of results from one period to another.
We include a property in our same-center pool when we have owned all or a portion of the property since January 1 of the preceding calendar year and it has been in operation for both the entire preceding calendar year and current year-to-date period. New properties are excluded from same-center NOI until they meet thisthese criteria. Properties excluded from the same-center pool that would otherwise meet thisthese criteria are properties which are being repositioned or properties where we are considering alternatives for repositioning, where we intend to renegotiate the terms of the debt secured by the related property or return the property to the lender and those in which we own a noncontrolling interest of 25% or less. AcadianaTriangle Town Center, Hickory Point Mall and Cary Towne CenterGreenbrier Mall were classified as a Lender Malls at SeptemberJune 30, 2018. Hickory Point Mall is currently being considered for repositioning at September 30, 2018. We own a noncontrolling interest of 10% in Triangle Town Center at September 30, 2018.

2019.
Due to the exclusions noted above, same-center NOI should only be used as a supplemental measure of our performance and not as an alternative to GAAP operating income (loss) or net income (loss). A reconciliation of our same-center NOI to net income (loss)loss for the three and ninesix month periods ended SeptemberJune 30, 20182019 and 20172018 is as follows (in thousands):
 Three Months Ended
September 30,		 Nine Months Ended
September 30,
 2018 2017 2018 2017
Net income (loss)$(2,971) $9,299
 $(33,608) $118,444
Adjustments: (1)
       
Depreciation and amortization80,247
 79,195
 242,014
 247,203
Interest expense59,870
 58,573
 176,101
 178,834
Abandoned projects expense38
 132
 377
 5,151
Gain on sales of real estate assets(7,852) (1,610) (16,562) (60,454)
(Gain) loss on investment—
 354
 (387) 6,197
Gain on extinguishment of debt—
 (6,452) —
 (33,902)
Loss on impairment15,622
 24,935
 85,666
 71,401
Income tax (benefit) provision1,034
 (1,064) (1,846) (4,784)
Lease termination fees(783) (879) (9,788) (1,990)
Straight-line rent and above- and below-market lease amortization822
 (637) 2,941
 (3,685)
Net income attributable to noncontrolling interests in other consolidated subsidiaries(24) (415) 369
 (25,266)
General and administrative expenses16,051
 13,568
 47,845
 45,402
Management fees and non-property level revenues(3,315) (2,762) (10,664) (10,312)
Operating Partnership's share of property NOI158,739
 172,237
 482,458
 532,239
Non-comparable NOI(5,623) (9,145) (20,112) (37,291)
Total same-center NOI$153,116
 $163,092
 $462,346
 $494,948
 Three Months Ended
June 30,		 Six Months Ended
June 30,
 2019 2018 2019 2018
Net loss$(29,688) $(29,976) $(76,497) $(30,637)
Adjustments: (1)
       
Depreciation and amortization73,292
 81,782
 151,593
 161,767
Interest expense57,351
 58,361
 116,153
 116,231
Abandoned projects expense34
 245
 34
 339
Gain on sales of real estate assets(5,524) (4,339) (6,382) (8,710)
Gain on investment—
 (387) —
 (387)
Gain on extinguishment of debt—
 —
 (71,722) —
Loss on impairment41,608
 51,983
 66,433
 70,044
Litigation settlement—
 —
 88,150
 —

 Three Months Ended
June 30,		 Six Months Ended
June 30,
 2019 2018 2019 2018
Income tax (benefit) provision813
 (2,235) 952
 (2,880)
Lease termination fees(1,073) (2,744) (2,090) (9,005)
Straight-line rent and above- and below-market lease amortization(1,408) (662) (2,453) 2,166
Net loss attributable to noncontrolling interests in other consolidated subsidiaries57
 494
 132
 393
General and administrative expenses14,427
 13,490
 36,434
 31,794
Management fees and non-property level revenues(4,118) (3,632) (6,784) (7,481)
Operating Partnership's share of property NOI145,771
 162,380
 293,953
 323,634
Non-comparable NOI(2,799) (10,714) (8,583) (22,205)
Total same-center NOI$142,972
 $151,666
 $285,370
 $301,429
(1)Adjustments are based on our Operating Partnership's pro rata ownership share, including our share of unconsolidated affiliates and excluding noncontrolling interests' share of consolidated properties.
Same-center NOI decreased 6.1%5.7% for the three months ended SeptemberJune 30, 20182019 as compared to the prior-year period. The $10.0$8.7 million decrease for the three month period ended SeptemberJune 30, 20182019 compared to the same period in 20172018 primarily consisted of a $12.3an $11.5 million decrease in revenues partially offset by a $2.3$2.8 million decline in operating expenses. Minimum rents and tenant reimbursementsRental revenues declined $11.4$15.4 million during the quarter primarily due to lower occupancy fromthe impact of store closures as well asand rent concessions for tenants with high occupancy cost levels, including tenants that declared bankruptcy. The $2.8 million decrease in bankruptcy. Percentage rents also declined $0.5 millionoperating expenses includes a decrease in real estate tax expenses of $1.1 million.
Same-center NOI decreased 5.3% for the six months ended June 30, 2019 as compared to the prior-year quarter.period. The $2.3$16.1 million decrease for the six month period ended June 30, 2019 compared to the same period in 2018 primarily consisted of a $24.5 million decrease in revenues partially offset by an $8.4 million decline in operating expenses. Rental revenues declined $28.5 million during the quarter primarily due to the impact of store closures and rent concessions for tenants with high occupancy cost levels, including tenants that declared bankruptcy. The decrease in rental revenues includes the impact of $1.7 million of uncollectable revenues, which was formerly described as bad debt expense that was included in property operating expense in the prior-year period. The $8.4 million decrease in operating expenses was primarily driven by a decreasebad debt expense of $2.8$2.9 million in the prior-year period. Maintenance and repair expenses decreased $0.6 million and real estate tax expense, which was partially offset by a $0.5 million increase in maintenance and repairs expense.
The 6.6% decrease in same center NOI for the nine months ended September 30, 2018 as compared to the prior-year period includes a $31.0 million decrease in revenues, primarily driven by a $29.5 million decline in minimum rents and tenant reimbursements due to lower occupancy and rent concessions for tenants in bankruptcy. Other rents and other income declined $1.4 million during the period while percentage rentsexpenses decreased $0.1$2.9 million. Operating expenses increased $1.5 million for the nine months ended September 30, 2018 as compared to the prior-year period. The increase was primarily due to a $3.3 million increase in maintenance and repairs expense which was partially offset by decreases of $1.2 million in real estate tax expense and $0.6 million in property operating expense.
The decline in revenues for the nine months ended September 30, 2018 was impacted by a decrease of 0.9% in occupancy in our same-center mall portfolio. Average annual base rents for our same-center stabilized malls increased to $32.77 as of September 30, 2018 as compared to $32.64 for the prior-year period on a same-center basis.

Operational Review
The shopping center business is, to some extent, seasonal in nature with tenants typically achieving the highest levels of sales during the fourth quarter due to the holiday season, which generally results in higher percentage rents in the fourth quarter. Additionally, the malls earn most of their rents from short-term tenants during the holiday period. Thus, occupancy levels and revenue production are generally the highest in the fourth quarter of each year. Results of operations realized in any one quarter may not be indicative of the results likely to be experienced over the course of the fiscal year.
We classify our regional malls into three categories:
(1)Stabilized Malls – Malls that have completed their initial lease-up and have been open for more than three complete calendar years.
(2)
Non-stabilized Malls - Malls that are in their initial lease-up phase. After three complete calendar years of operation, they are reclassified on January 1 of the fourth calendar year to the stabilized mall category. The Outlet Shoppes at Laredo was classified as a non-stabilized mall as of SeptemberJune 30, 20182019 and 20172018. The Outlet Shoppes of the Bluegrass was classified as a non-stabilized mall as of September 30, 2017.
(3)Excluded Malls - We exclude malls from our core portfolio if they fall in one of the following categories, for which operational metrics are excluded:

a.
Lender Malls - Malls for which we are working or intend to work with the lender on a restructure of the terms of the loan secured by the property or convey the secured property to the lender. Triangle Town Center, Hickory Point Mall and Greenbrier Mall were classified as Lender Malls as of June 30, 2019, and Acadiana Mall and Cary Towne Center were classified as a Lender MallsMall as of SeptemberJune 30, 2018. There were no malls in this category as of September 30, 2017. Lender Malls are excluded from our same-center pool as decisions made while in discussions with the lender may lead to metrics that do not provide relevant information related to the condition of these properties or they may be under cash management agreements with the respective servicers.
b.
Repositioning Malls - Malls that are currently being repositioned or where we have determined that the current format of the mall no longer represents the best use of the mall and we are in the process of evaluating alternative strategies for the mall. This may include major redevelopment or an alternative retail or non-retail format, or after evaluating alternative strategies for the mall, we may determine that the mall no longer meets our criteria for long-term investment. The steps taken to reposition these malls, such as signing tenants to short-term leases, which are not included in occupancy percentages, or leasing to regional or local tenants, which typically do not report sales, may lead to metrics which do not provide relevant information related to the condition of these malls. Therefore, traditional performance measures, such as occupancy percentages and leasing metrics, exclude Repositioning Malls. There were no malls classified as Repositioning Malls as of June 30, 2019. Hickory Point Mall was classified as a Repositioning Mall as of SeptemberJune 30, 2018 and 2017. Cary Towne Center was classified as a Repositioning Mall as of September 30, 2017 until a change in redevelopment plans caused it to be reclassified as a Lender Mall as of September 30, 2018.
c.
Minority Interest Malls - Malls in which we have a 25% or less ownership interest. There were no malls classified as Minority Interest Malls as of June 30, 2019. Triangle Town Center was classified as a Minority Interest Mall as of SeptemberJune 30, 2018 and 2017..
We derive the majority of our revenues from the mall properties. The sources of our revenues by property type were as follows: 
Nine Months Ended September 30,Six Months Ended June 30,
2018 20172019 2018
Malls91.2% 91.5%88.4% 91.2%
Other properties8.8% 8.5%11.6% 8.8%
Mall Store Sales
Mall store sales include reporting mall tenants of 10,000 square feet or less for stabilized malls and exclude license agreements, which are retail contracts that are temporary or short-term in nature and generally last more than three months but less than twelve months. The following is a comparison of our same-center sales per square foot:

Twelve Months Ended September 30, Twelve Months Ended June 30, 
2018 2017 % Change2019 2018 % Change
Stabilized mall same-center sales per square foot$378 $376 0.5%$381 $378 0.8%
Stabilized mall sales per square foot$378 $373 1.3%$381 $376 1.3%
Retailers are reporting positive sales results, which are reflected in the increase we are showing in trailing 12-month salesSales for the period. September sales at five propertiessecond quarter were impacted by closures related to Hurricane Florence, including Mayfaire Town Center in Wilmington, NC, which was closed for 10 days. We expect sales at these centers to reboundpositive. Categories that performed well included fast casual dining, electronics, children’s and project to end the year with a positive holiday season.family shoes, cosmetics and wellness.

Occupancy
Our portfolio occupancy as of September 30, 2018, as compared to portfolio occupancy both as of September 30, 2017, and as of the the end of the prior quarter of 2018, is summarized in the following table(1):  
As of September 30, As of June 30,As of June 30,
2018 2017 20182019 2018
Total portfolio92.0% 93.1% 91.1%90.2% 91.1%
Malls:  
Total mall portfolio90.5% 91.6% 89.2%88.1% 89.2%
Same-center malls90.8% 91.7% 89.6%88.1% 89.4%
Stabilized malls90.8% 91.7% 89.5%88.3% 89.5%
Non-stabilized malls (2)
73.6% 87.9% 71.9%78.0% 71.9%
Other properties:97.1% 98.2% 97.4%97.0% 97.2%
Associated centers97.2% 98.2% 97.9%96.3% 97.9%
Community centers96.8% 98.2% 96.9%97.6% 96.9%
(1)As noted above, excluded properties are not included in occupancy metrics. Occupancy for malls represents percentage of mall store gross leasable area occupied under 20,000 square feet. Occupancy for other properties represents percentage of gross leasable area occupied.
(2)
Represents occupancy for The Outlet Shoppes at Laredo as of September 30, 2018 and June 30, 2018. Represents occupancy for The Outlet Shoppes of the Bluegrass2019 and The Outlet Shoppes at Laredo as of September 30, 20172018.
Bankruptcy-related store closures impacted thirdsecond quarter occupancy by approximately 77322 basis points or 142,000570,000 square feet. See Leasing below for an update on our progress made in replacing these stores.
Leasing
The following is a summary of the total square feet of leases signed in the three and ninesix month periods ended SeptemberJune 30, 2018 as compared to the prior-year periods:2019:
Three Months Ended
September 30,		 Nine Months Ended
September 30,		Three Months Ended
June 30,		 Six Months Ended
June 30,
2018 2017 2018 20172019 2018 2019 2018
Operating portfolio:              
New leases154,968
 178,332
 763,104
 916,442
256,648
 366,697
 528,461
 608,136
Renewal leases590,923
 678,304
 1,907,874
 1,765,682
461,251
 463,470
 1,153,378
 1,316,951
Development portfolio:              
New leases87,293
 131,744
 190,951
 258,746
54,702
 19,054
 204,439
 103,658
Total leased833,184
 988,380
 2,861,929
 2,940,870
772,601
 849,221
 1,886,278
 2,028,745

Average annual base rents per square foot are based on contractual rents in effect as of SeptemberJune 30, 20182019 and 2017,2018, including the impact of any rent concessions. Average annual base rents per square foot for comparable small shop space of less than 10,000 square feet were as follows for each property type (1): 
 As of September 30, As of June 30,
 2018 2017 2019 2018
Malls: $32.69
 $32.61
 $32.38
 $32.56
Same-center stabilized malls 32.77
 32.64
 32.48
 32.85
Stabilized malls 32.77
 32.83
 32.48
 32.64
Non-stabilized malls (2)
 25.48
 26.25
 24.65
 25.71
Other properties: 15.16
 15.03
 15.36
 15.15
Associated centers 13.68
 13.85
 13.85
 13.74
Community centers 16.44
 15.65
 16.65
 16.15
Office buildings 18.01
 19.12
 17.94
 18.64
(1)As noted above, excluded properties are not included in base rent.included. Average base rents for associated centers, community centers and office buildings include all leased space, regardless of size.
(2)
Represents average annual base rents for The Outlet Shoppes at Laredo as of SeptemberJune 30, 2018. Represents average annual base rents for The Outlet Shoppes of the Bluegrass2019 and The Outlet Shoppes at Laredo as of September 30, 20172018.

Results from new and renewal leasing of comparable small shop space of less than 10,000 square feet during the three and ninesix month periods ended SeptemberJune 30, 20182019 for spaces that were previously occupied, based on the contractual terms of the related leases inclusive of the impact of any rent concessions, are as follows: 
Property Type Square
Feet		 
Prior
Gross
Rent PSF
 
New
Initial
Gross
Rent PSF
 % Change
Initial		 
New
Average
Gross
Rent PSF (1)
 % Change
Average		 Square
Feet		 
Prior
Gross
Rent PSF
 
New
Initial
Gross
Rent PSF
 % Change
Initial		 
New
Average
Gross
Rent PSF (1)
 % Change
Average
Quarter:                        
All Property Types (2)
 492,802
 $39.43
 $34.21
 (13.2)% $34.51
 (12.5)% 413,879
 $36.40
 $34.65
 (4.8)% $35.19
 (3.3)%
Stabilized malls 448,387
 40.81
 35.16
 (13.8)% 35.47
 (13.1)% 384,947
 36.77
 34.84
 (5.2)% 35.38
 (3.8)%
New leases (3)
 59,188
 51.77
 44.45
 (14.1)% 46.83
 (9.5)%
New leases 46,105
 44.49
 41.95
 (5.7)% 43.88
 (1.4)%
Renewal leases 389,199
 39.14
 33.75
 (13.8)% 33.74
 (13.8)% 338,842
 35.72
 33.87
 (5.2)% 34.23
 (4.2)%
                        
Year-to-Date:                        
All Property Types (2)
 1,648,184
 $41.51
 $36.45
 (12.2)% $36.94
 (11.0)% 982,593
 $37.84
 $34.59
 (8.6)% $35.18
 (7.0)%
Stabilized malls 1,570,492
 42.26
 36.98
 (12.5)% 37.48
 (11.3)% 881,945
 38.82
 35.47
 (8.6)% 36.07
 (7.1)%
New leases (3)
 237,018
 44.94
 41.46
 (7.7)% 43.55
 (3.1)%
New leases 93,845
 50.08
 49.95
 (0.3)% 52.39
 4.6 %
Renewal leases 1,333,474
 41.78
 36.19
 (13.4)% 36.40
 (12.9)% 788,100
 37.48
 33.75
 (10.0)% 34.12
 (9.0)%
(1)Average gross rent does not incorporate allowable future increases for recoverable common area expenses.
(2)Includes stabilized malls, associated centers, community centers and office buildings.
(3)
Excluding three leases executed during the third quarter of 2018, average new lease spreads would have been 0.6% and (0.2)% for the three and nine months ended September 30, 2018, respectively.
Spreads on new leases for stabilized malls declined 9% in1.4% and renewal leases were signed at an average of 4.2% lower than the third quarter. We had three new leases signed where the prior rents were above market or we agreed toexpiring rent. This quarter’s results demonstrate a lower rent due to the time the space has been vacant. Excluding these three deals, average spreads on new deals would have been positive for the quarter and flat year-to-date. We anticipate negative lease spreads again in the fourth quarter but are encouraged that the positive year-to-date sales in our portfolio will provide a more constructive leasing backdrop in the future.
Over 63% of our new leasing was executed with non-apparel tenants, including dining, entertainment and other uses. We have executed contracts, letters of intent or are in active negotiations with 50 restaurants, 14 entertainment venues, 9 hotels, 4 multi-family uses and 2 grocery stores. Additionally, other uses include fitness, medical office and self-storage facilities.

significant improvement from recent past quarters.
New and renewal leasing activity of comparable small shop space of less than 10,000 square feet for the nine month period ended September 30, 2018 based on the lease commencement date is as follows:
Number
of
Leases
 
Square
Feet
 
Term
(in
years)
 
Initial
Rent
PSF
 
Average
Rent
PSF
 
Expiring
Rent
PSF
 
Initial Rent
Spread
 
 Average Rent
Spread
Commencement 2018:                   
New118
 287,933
 7.30
 $42.43
 $44.39
 $43.65
 $(1.22) (2.8)% $0.74
 1.7 %
Renewal486
 1,499,531
 2.83
 33.92
 34.40
 40.23
 (6.31) (15.7)% (5.83) (14.5)%
Commencement 2018 Total604
 1,787,464
 3.71
 35.29
 36.01
 40.78
 (5.49) (13.5)% (4.77) (11.7)%
                   
Number
of
Leases
 
Square
Feet
 
Term
(in
years)
 
Initial
Rent
PSF
 
Average
Rent
PSF
 
Expiring
Rent
PSF
 
Initial Rent
Spread
 
 Average Rent
Spread
Commencement 2019:                                      
New7
 25,307
 8.29
 34.12
 35.92
 32.06
 2.06
 6.4 % 3.86
 12.0 %74
 154,606
 7.25
 $46.50
 $48.96
 $46.76
 $(0.26) (0.6)% $2.20
 4.7 %
Renewal106
 399,843
 3.38
 31.25
 31.57
 34.34
 (3.09) (9.0)% (2.77) (8.1)%426
 1,380,899
 2.67
 30.08
 30.31
 34.43
 (4.35) (12.6)% (4.12) (12.0)%
Commencement 2019 Total113
 425,150
 3.69
 31.42
 31.83
 34.20
 (2.78) (8.1)% (2.37) (6.9)%500
 1,535,505
 3.35
 31.74
 32.19
 35.67
 (3.93) (11.0)% (3.48) (9.8)%
                                      
Total 2018/2019717
 2,212,614
 3.70
 $34.55
 $35.20
 $39.52
 $(4.97) (12.6)% $(4.32) (10.9)%
Commencement 2020:                   
New3
 4,651
 6.33
 85.71
 90.94
 85.20
 0.51
 0.6 % 5.74
 6.7 %
Renewal49
 136,656
 3.71
 41.03
 41.93
 40.34
 0.69
 1.7 % 1.59
 3.9 %
Commencement 2020 Total52
 141,307
 3.86
 42.50
 43.54
 41.81
 0.69
 1.7 % 1.73
 4.1 %
                   
Total 2019/2020552
 1,676,812
 3.40
 $32.64
 $33.14
 $36.19
 $(3.55) (9.8)% $(3.05) (8.4)%
At the end of the second quarter we had 38 Sears locations in our core portfolio, excluding the location at Janesville Mall, that was sold in July, and a property where we only have a 10% interest. Assuming all of the announced store closures occur by year-end, we anticipate having 21 operating locations. The 17 store closings include 10 leased locations, three owned by Seritage and four locations owned by Sears or third parties. One of the Seritage stores has already been substantially redeveloped and we understand they have plans in various stages on others. Of our 10 leased Sears locations, three are stores we purchased last year and have active redevelopments in planning stages with two set to commence within the next six months. We have leases executed or out for signature on two locations and letters of intent or active discussions on the remainder. We are also in active negotiations on a numbersuccessfully diversifying the tenant mix with 86% of stores that are still operating in anticipation of any future closures. We expect that some of the stores owned by Sears will be sold for third party redevelopment.
Gross annual rent related to the Sears stores which are closing approximates $5.0 million. The majority of this rent relates to stores we proactively expected to terminate the leases on to begin redevelopment projects. Due to this, we do not expect any material unbudgeted revenue loss in 2018 related to these closures or co-tenancy.
For 2019, we are estimating co-tenancy loss related to the Sears closures in the $7.0 to $10.0 million range. While Sears has indicated at this time that they intend to pursue a reorganization, if we assume a Sears liquidation occurs sometime early in the year, we estimate the impact of the incremental co-tenancy to be in the $4.0 to $8.0 million range. Co-tenancy provisions are far from uniform; however most require two or more anchors to have closed before they are triggered. As we approach our redevelopments, onenew mall leasing and 64% of our major priorities is to limit downtime in properties where more than one anchor has closed. Across our portfolio, wetotal mall leasing this year signed with non-apparel tenants. We are currently under construction, have identified 11 locations where we have a Sears and Bon-Ton anchor that has closed or are expected to close. We have activity occurring on all 11 properties, with eight leasesagreements executed or out-for-signature and three locations which have active letters of intent or are under negotiation with tenants.
In August, all Bon-Ton locations in our portfolio closed. After the sale of Janesville Mall in July, we had one location at a non-core mall and 14 locations in our core portfolio, including 10 leased and four owned by others. Of the 10 leased locations we have leases executed or out-for-signature for six and have letters of intent or are in active negotiationsnegotiation on the remainder. Two replacementsthree multi-family projects, 14 entertainment operators, including two casinos, 9 hotels, 35 restaurants, four fitness centers, six medical uses, two self-storage facilities, two grocers and a number of other non-retail uses. We are scheduledmaking great progress replacing vacant anchors with two dozen locations committed including eight already open and another six set to open before year-end. Total redevelopment spendlater this year. Beyond this we have active negotiations or LOIs for all six boxes is currently estimatedseveral others.  Anchor replacements such as the Live! Casino at $10.5 million. We expect total annual spend forWestmoreland Mall and Shoprite Supermarket at Stroud Mall are tangible examples of how we are transforming our entire redevelopment program to be in the $75.0 to $125.0 million range for the next few years to complete all the necessary redevelopments in our portfolio.centers with minimal cash investment.




LIQUIDITY AND CAPITAL RESOURCES    
As of SeptemberJune 30, 2018,2019, we had $201.4$383.1 million outstanding on our three unsecuredsecured credit facilitiesfacility leaving $491.4$301.9 million of availability, based on the termsafter considering outstanding letters of the credit facilitiesof $4.8 million, as well as unrestricted cash and cash equivalents of $20.7$20.5 million. Our total pro rata share of debt at SeptemberJune 30, 20182019 was $4.7$4.4 billion. Our consolidated unencumbered properties generated approximately 58.4%26.8% of total consolidated NOI for the ninesix months ended SeptemberJune 30, 20182019 (excluding dispositions and Excluded Malls).

In August 2018,April 2019, the loan secured by Volusia Mall was refinanced to increase the principal balance to $50.0 million. In addition, the maturity date was extended to April 2024 and the fixed interest rate was reduced from 8.00% to 4.56%. The net proceeds from the new loan were used to retire the $41.0 million existing loan. During the three months ended June 30, 2019, we sold Statesboro Crossing,three properties for a community center located in Statesboro, GA for atotal gross sales price of $21.5$32.2 million. After aThe excess sales proceeds were used to reduce the outstanding balance on our secured line of credit, and the portion of those proceeds from the proceeds was used to retire a $10.8 million loan secured by the property, we received 100% ofHoney Creek Mall sale were combined with the net proceeds from the sale under the terms of the joint venture agreement. We also sold another community center, Parkway Plaza, subsequent to September 30, 2018 for a gross sales price of $16.5 million. Net proceeds from these sales as well as net proceeds of $17.8 million from the sale of Janesville Mall in addition to proceeds from outparcel sales and the first quarter sale of phase three of Gulf coast Town Center, all of which aggregate to nearly $90.0 million in net proceeds year-to-date, were used to fund the $190.0 million retirement of the portion of our $490.0 million unsecured term loan that was due in July 2018. Additionally, net proceeds from the second quarter refinancing of the loan secured by CoolSprings Galleria and a new $75.0Volusia Mall to retire the $23.5 million 10-yearloan secured by Honey Creek Mall (See Note 6 for additional information on dispositions). In May 2019, we exercised an option to extend the loan secured by The Outlet Shoppes at El Paso,Laredo to May 2021. In conjunction with the amendment, a payment of $10.8 million was made to reduce the outstanding balance of the loan to $43.0 million. The noncontrolling interest partner in The Outlet Shoppes at Laredo joint venture funded its 35% share of the $10.8 million payment. We also formed a new 50/50 joint venture to develop a self-storage facility adjacent to Parkdale Mall and closed in May 2019 on a five-year $6.5 million construction loan which aggregatebears interest at the greater of 5.25% or LIBOR plus 2.80% to approximately $94.0fund the project.
Subsequent to June 30, 2019, we sold the 850 Greenbrier Circle office building, the Barnes & Noble parcel in High Point, NC, the Kroger parcel at Foothills Plaza and the Forum at Grandview in Madison, MS, for a total gross price of $46.6 million at(See Note 15 for additional information).
In April 2019, we entered into a settlement agreement and release with respect to a class action lawsuit. Under the terms of the settlement agreement, we will not pay any dividends to holders of our share, were used towardscommon shares payable in the paydown.third and fourth quarters of 2019. The settlement agreement does not restrict our ability to declare dividends payable in 2020 or in subsequent years. See Note 612 and Note 7 to the condensed consolidated financial statements for more information on these financings. We also exercised an extension optionrelated to extend the maturity date of the $27.4 million loan secured by Hickory Point Mall to December 2019.
The Sears bankruptcy filing and announced store closings affords us the opportunity to accelerate redevelopment plans already in place. A capital-lite development strategy is being applied to a number of redevelopment projects across our portfolio where we have been successful in replacing vacant anchor locations with new tenants that require little or no investment by us, allowing us to preserve capital.
We reduced our common dividend for 2019 to an annualized rate of $0.30 per share, which will provide approximately $100 million of additional cash on an annual basis to help fund redevelopments and debt reduction. Additionally, we have implemented a program to create efficiencies in operations and reduce overhead including executive compensation. We will continue to opportunistically dispose of assets to generate equity.settlement.
We derive a majority of our revenues from leases with retail tenants, which have historically been the primary source for funding short-term liquidity and capital needs such as operating expenses, debt service, tenant construction allowances, recurring capital expenditures, dividends and distributions. We believe that the combination of cash flows generated from our operations, combined with our debt and equity sources and the availability under our credit facilities and proceeds from dispositions will, for the foreseeable future, provide adequate liquidity to meet our cash needs.  In addition to these factors, we have options available to us to generate additional liquidity, including but not limited to, debt and equity offerings, joint venture investments, issuances of noncontrolling interests in our Operating Partnership, and decreasing expenditures related to tenant construction allowances and other capital expenditures. We also generate revenues from sales of peripheral land at our properties and from sales of real estate assets when it is determined that we can realize an optimal value for the assets.
Cash Flows - Operating, Investing and Financing Activities
There was $56.1$45.5 million of cash, cash equivalents and restricted cash as of SeptemberJune 30, 2018,2019, a decrease of $12.0 million from December 31, 2017.2018. Of this amount, $20.7$20.5 million was unrestricted cash and cash equivalents as of SeptemberJune 30, 2018.2019.
Our net cash flows are summarized as follows (in thousands):
Nine Months Ended
September 30,		  Six Months Ended
June 30,		  
2018 2017 Change2019 2018 Change
Net cash provided by operating activities$280,407
 $336,950
 $(56,543)$126,032
 $179,882
 $(53,850)
Net cash used in investing activities(14,325) (35,412) 21,087
Net cash provided by (used in) investing activities27,104
 (22,837) 49,941
Net cash used in financing activities(278,109) (298,049) 19,940
(165,132) (164,706) (426)
Net cash flows$(12,027) $3,489
 $(15,516)$(11,996) $(7,661) $(4,335)

Cash Provided by Operating Activities
Cash provided by operating activities decreased $56.5$53.9 million primarily due to a decline in rental revenues during the quarter related to store closures and rent concessions for tenants with high occupancy cost levels, including tenants in bankruptcy, and the disposition of properties.two malls, two community centers and a hotel since June 30, 2018.
Cash Used inProvided by (Used in) Investing Activities
Cash flows used inprovided by investing activities decreased $21.1increased $49.9 million compared to the prior year. The cash outflow

inflow for 20182019 was primarily related to redevelopmenta greater amount of proceeds from sales in the current period combined with less cash paid for capital expenditures as we continue to transform our properties by adding new retailers and new uses.focus on controlling such expenditures. These expendituresincreases were partially offset by proceedsa lower amount of distributions from the sales of outparcels,unconsolidated affiliates in 2019 as we received a mall and two community centers, as well as our share of the netdistribution from an unconsolidated affiliate in 2018 related to excess proceeds from the refinancing of the CoolSprings Galleriaa mortgage loan. Cash used in investing activities in 2017 was due to the acquisition of Macy's and Sears locations at several malls in the first quarter of 2017 and expenditures related to renovations and redevelopments.
Cash Used in Financing Activities
Cash flows used in financing activities decreased $0.4 million in 2018 reflect2019 compared to the prior year. Although the reduction in theour common stock dividend from $0.265 per shareresulted in savings of $48.6 million in dividends and distributions paid to $0.200 per share for each quarter of 2018 as compared tocommon shareholders and the corresponding quarters of 2017, as well as a net reduction in debt of $119.2 million with cash primarily generated from operating activities. Cash flows used in financing activities in 2017 reflect the higher dividend rate of $0.265 per share for each quarter of 2017 and a higher amount of distributions to noncontrolling interest as a resultholders in the Operating Partnership, this was offset by the additional $32.6 million of distributing the partner’s share of net proceeds from the sale of a consolidated joint venture. Additionally, the reduction inprincipal payments on debt during the 2017 period was lower as a greater amount of cash flows from operating activities were used to fund redevelopment activities and the acquisition Macy’s and Sears locations at several malls.payment of $15.4 million of deferred financing costs, which were mostly related to our new secured credit facility.
Debt
Debt of the Company
CBL has no indebtedness. Either the Operating Partnership or one of its consolidated subsidiaries, that it has a direct or indirect ownership interest in, is the borrower on all of our debt. CBL is a limited guarantor of the Notes, as described in Note 78 to the condensed consolidated financial statements, for losses suffered solely by reason of fraud or willful misrepresentation by the Operating Partnership or its affiliates. We also provide a similar limited guarantee of the Operating Partnership's obligations with respect to our unsecuredsecured credit facilities and three unsecured term loansfacility as of SeptemberJune 30, 2018.2019.
Debt of the Operating Partnership
The following tables summarize debt based on our pro rata ownership share, including our pro rata share of unconsolidated affiliates and excluding noncontrolling investors’ share of consolidated properties, because we believe this provides investors and lenders a clearer understanding of our total debt obligations and liquidity (in thousands):
September 30, 2018 Consolidated Noncontrolling
Interests		 Unconsolidated
Affiliates		 Total 
Weighted-
Average
Interest
Rate (1)
June 30, 2019 Consolidated Noncontrolling
Interests		 Unconsolidated
Affiliates		 Total 
Weighted-
Average
Interest
Rate (1)
Fixed-rate debt:                    
Non-recourse loans on operating
properties (2)
 $1,797,080
 $(94,787) $542,734
 $2,245,027
 5.01% $1,581,780
 $(93,450) $534,779
 $2,023,109
 4.89%
Recourse loan on operating property (3)
 —
 —
 10,605
 10,605
 3.74% —
 —
 10,050
 10,050
 3.74%
Senior unsecured notes due 2023 (4)
 447,309
 —
 —
 447,309
 5.25% 447,656
 —
 —
 447,656
 5.25%
Senior unsecured notes due 2024 (5)
 299,951
 —
 —
 299,951
 4.60% 299,956
 —
 —
 299,956
 4.60%
Senior unsecured notes due 2026 (6)
 616,436
 —
 —
 616,436
 5.95% 617,048
 —
 —
 617,048
 5.95%
Total fixed-rate debt 3,160,776
 (94,787) 553,339
 3,619,328
 5.16% 2,946,440
 (93,450) 544,829
 3,397,819
 5.10%
Variable-rate debt:  
  
  
  
    
  
  
  
  
Recourse loans on operating properties 74,150
 —
 61,898
 136,048
 4.57% 56,721
 —
 79,251
 135,972
 4.93%
Construction loans —
 —
 34,700
 34,700
 4.96% 16,684
 —
 

 16,684
 5.33%
Unsecured lines of credit 201,358
 —
 —
 201,358
 3.65%
Unsecured term loans 695,000
 —
 —
 695,000
 3.96%
Secured line of credit (7)
 383,084
 —
 —
 383,084
 4.69%
Secured term loan (7)
 482,500
 —
 —
 482,500
 4.69%
Total variable-rate debt 970,508
 —
 96,598
 1,067,106
 4.01% 938,989
 —
 79,251
 1,018,240
 4.73%
Total fixed-rate and variable-rate debt 4,131,284
 (94,787) 649,937
 4,686,434
 4.90% 3,885,429
 (93,450) 624,080
 4,416,059
 5.01%
Unamortized deferred financing costs (15,476) 611
 (2,826) (17,691)  (19,490) 747
 (2,360) (21,103) 
Mortgage and other indebtedness, net $4,115,808
 $(94,176) $647,111
 $4,668,743
  $3,865,939
 $(92,703) $621,720
 $4,394,956
 

December 31, 2017 Consolidated Noncontrolling
Interests		 Unconsolidated
Affiliates		 Total 
Weighted-
Average
Interest
Rate (1)
December 31, 2018 Consolidated Noncontrolling
Interests		 Unconsolidated
Affiliates		 Total 
Weighted-
Average
Interest
Rate (1)
Fixed-rate debt:  
  
  
  
    
  
  
  
  
Non-recourse loans on operating properties (2)
 $1,796,203
 $(77,155) $521,731
 $2,240,779
 5.06% $1,783,097
 $(94,361) $540,068
 $2,228,804
 5.01%
Recourse loans on operating properties (3)
 —
 —
 11,035
 11,035
 3.74% —
 —
 10,605
 10,605
 3.74%
Senior unsecured notes due 2023 (4)
 446,976
 —
 —
 446,976
 5.25% 447,423
 —
 —
 447,423
 5.25%
Senior unsecured notes due 2024 (5)
 299,946
 —
 —
 299,946
 4.60% 299,953
 —
 —
 299,953
 4.60%
Senior unsecured notes due 2026 (6)
 615,848
 —
 —
 615,848
 5.95% 616,635
 —
 —
 616,635
 5.95%
Total fixed-rate debt 3,158,973
 (77,155) 532,766
 3,614,584
 5.19% 3,147,108
 (94,361) 550,673
 3,603,420
 5.16%
Variable-rate debt:  
  
  
  
    
  
  
  
  
Non-recourse loan on operating property 10,836
 (5,418) —
 5,418
 3.37%
Recourse loans on operating properties 101,187
 —
 58,478
 159,665
 3.77% 68,607
 —
 96,012
 164,619
 4.91%
Construction loan —
 —
 5,977
 5,977
 4.28% 8,172
 —
 3,892
 12,064
 5.20%
Unsecured lines of credit 93,787
 —
 —
 93,787
 2.56%
Unsecured term loans 885,000
 —
 —
 885,000
 2.81%
Unsecured lines of credit (7)
 183,972
 —
 —
 183,972
 3.90%
Unsecured term loans (7)
 695,000
 —
 —
 695,000
 4.21%
Total variable-rate debt 1,090,810
 (5,418) 64,455
 1,149,847
 2.93% 955,751
 —
 99,904
 1,055,655
 4.28%
Total fixed-rate and variable-rate debt 4,249,783
 (82,573) 597,221
 4,764,431
 4.65% 4,102,859
 (94,361) 650,577
 4,659,075
 4.96%
Unamortized deferred financing costs (18,938) 687
 (2,441) (20,692)  (15,963) 804
 (2,687) (17,846) 
Liabilities related to assets held for sale (8)
 (43,716) —
 —
 (43,716) 
Mortgage and other indebtedness, net $4,230,845
 $(81,886) $594,780
 $4,743,739
  $4,043,180
 $(93,557) $647,890
 $4,597,513
 
(1)Weighted-average interest rate includes the effect of debt premiums and discounts, but excludes amortization of deferred financing costs.
(2)
An unconsolidated affiliate has an interest rate swap on a notional amount outstanding of $45,165$44,249 as of SeptemberJune 30, 20182019 and $46,054$44,863 as of December 31, 20172018 related to a variable-rate loan on Ambassador Town Center to effectively fix the interest rate on this loan to a fixed-rate of 3.22%.
(3)
The unconsolidated affiliate has an interest rate swap on a notional amount outstanding of $10,050 as of June 30, 2019 and $10,605 as of September 30, 2018 and $11,035 as of December 31, 20172018 related to a variable-rate loan on Ambassador Town Center - Infrastructure Improvements to effectively fix the interest rate on this loan to a fixed-rate of 3.74%.
(4)
The balance is net of an unamortized discount of $2,6912,344 and $3,0242,577 as of SeptemberJune 30, 20182019 and December 31, 20172018, respectively.
(5)
The balance is net of an unamortized discount of $4944 and $5447 as of SeptemberJune 30, 20182019 and December 31, 20172018, respectively.    
(6)
The balance is net of an unamortized discount of $8,5647,952 and $9,1528,365 as of SeptemberJune 30, 20182019 and December 31, 20172018, respectively.
(7)We replaced our unsecured lines of credit and unsecured term loans in January 2019 with a new secured senior credit facility.
(8)
Represents a $43,716 non-recourse mortgage loan secured by Cary Towne Center that was classified on the consolidated balance sheet as liabilities related to assets held for sale.
The weighted-average remaining term of our total share of consolidated and unconsolidated debt was 4.24.5 years and 4.64.0 years at SeptemberJune 30, 20182019 and December 31, 2017,2018, respectively. The weighted-average remaining term of our pro rata share of fixed-rate debt was 5.0 years4.7 and 5.44.8 years at SeptemberJune 30, 20182019 and December 31, 2017,2018, respectively.
As of SeptemberJune 30, 20182019 and December 31, 2017,2018, our pro rata share of consolidated and unconsolidated variable-rate debt represented 22.9%23.2% and 24.2%22.8%, respectively, of our total pro rata share of debt. As of September 30, 2018, our share of consolidated and unconsolidated variable-rate debt represented 17.5% of our total market capitalization (see Equity below) as compared to 17.6% as of December 31, 2017.
We are in the process of refinancing the $350.0 million unsecured term loan that matures in October 2019 as well as the $300.0 million unsecured term loan, the $45.0 million unsecured term loan and the three unsecured lines of credit with an aggregate capacity of $1.1 billion. The unsecured term loans and lines of credit will be converted from unsecured to secured facilities. We have agreed with Wells Fargo, as lead lender, on a pool of properties that will serve as collateral for the new secured term loans and secured lines of credit. The due diligence on these properties is ongoing and is expected to be completed by January 2019. Until due diligence is complete, the number and specific properties comprising the collateral pool may change. Wells Fargo will secure commitments from additional banks as participants in the new facilities; however, the composition of the lenders and the amount that each will hold will be subject to the final approval of each lender. As of the date of the filing of these financial statements, management has obtained the approval of the Board of Directors and has agreed to a non-binding term sheet with Wells Fargo that includes a longer-term maturity. It is expected that the refinancing will close in January 2019.

In the unlikely event the secured facility is not closed, management intends to utilize availability under the existing unsecured lines of credit to retire the $350.0 million unsecured term loan that matures in October 2019. The $300.0 million and the $45.0 million term loans have a final maturity of July 2022 and June 2022, respectively, and the combined $1.1 billion lines of credit have a final maturity of October 2020.
Our Board of Directors has also reduced the annualized dividend rate for 2019 to ensure ample liquidity is available to meet our capital needs. The dividend reduction will preserve an estimated $100 million of cash on an annual basis.
We anticipate the foreclosure of the $122.1 million loan secured by Acadiana Mall will be complete in 2019 and have executed a forbearance agreement with the lender concerning the $43.7 million loan secured by Cary Towne Center. We are working with the lender on a potential sale of the property that may occur in 2019. See Note 78 to the condensed consolidated financial statements for additional information concerning the amount and terms of our outstanding indebtedness and compliance with applicable covenants and restrictions as of SeptemberJune 30, 20182019, as well as mortgage activity related to consolidated property loans.
See Note 67 to the condensed consolidated financial statements for information related to financing activity related to unconsolidated affiliates.

Credit Ratings
The Operating Partnership's credit ratings of its unsecured long-term indebtedness were as follows as of SeptemberJune 30, 2018:2019:
Rating Agency Rating OutlookInvestment Grade
Fitch BB+BB- NegativeNo
Moody's Ba1B1Stable
S&PBB NegativeNo
S&P (1)
BB+NegativeNo
(1)In August 2018, S&P lowered its rating to BB+. The change impacted our interest rates beginning September 1, 2018. The current interest rates are listed below.
We made a one-time irrevocable election to use our credit ratings, as defined above, to determine the interest rate on our three unsecured credit facilities and two unsecured term loans. Due to a downgrade from S&P in August 2018, our interest rates on our credit facilities and two term loans bear interest at a higher rate as of September 1, 2018. Borrowings under our three unsecured credit facilities bear interest at LIBOR plus 155 basis points and our unsecured term loans bear interest at LIBOR plus 175 and 200 basis points, respectively, based on the credit ratings noted above. Our facility fee also increased to 0.30% of the total capacity of each facility based on the credit ratings described above. The change in our credit ratings may also impact terms and conditions of future borrowings in addition to adversely affecting our ability to access the public debt markets.
Unencumbered Consolidated Portfolio Statistics
(Dollars in thousands, except sales per square foot data)
   
Sales Per Square
Foot for the Twelve
Months Ended (1) (2)
 
Occupancy (2)
 
% of
Consolidated
Unencumbered
NOI for the
Nine Months
Ended
9/30/18 (3)
 09/30/18 09/30/17 09/30/18 09/30/17 
Unencumbered consolidated properties:          
Tier 1 Malls $402
 $430
 94.2% 95.8% 21.0%
Tier 2 Malls 338
 338
 90.4% 91.4% 54.5%
Tier 3 Malls 280
 286
 88.2% 89.5% 12.6%
Total Malls 339
 345
 90.5% 91.7% 88.1%
            
Total Associated Centers N/A
 N/A
 96.8% 97.7% 7.5%

  
Sales Per Square
Foot for the Twelve
Months Ended (1) (2)
 
Occupancy (2)
 
% of
Consolidated
Unencumbered
NOI for the
Nine Months
Ended
9/30/18 (3)
  
Sales Per Square
Foot for the Twelve
Months Ended (1) (2)
 
Occupancy (2)
 
% of
Consolidated
Unencumbered
NOI for the
Six Months
Ended
6/30/19 (3)
 
09/30/18 09/30/17 09/30/18 09/30/17  06/30/19 06/30/18 06/30/19 06/30/18 
Unencumbered consolidated properties:Unencumbered consolidated properties:           
Tier 1 MallsTier 1 Malls N/A
 N/A
 N/A
 N/A
 6.9%
(4) 
Tier 2 MallsTier 2 Malls $336
 $340
 83.4% 84.7% 43.7% 
Tier 3 MallsTier 3 Malls 277
 284
 86.3% 87.5% 26.6% 
Total MallsTotal Malls $311
 $316
 84.7% 85.9% 77.2% 
           
Total Associated CentersTotal Associated Centers N/A
 N/A
 96.2% 97.4% 15.2% 
                     
Total Community CentersTotal Community Centers N/A
 N/A
 99.0% 98.9% 3.3%Total Community Centers N/A
 N/A
 99.6% 98.8% 6.8% 
                     
Total Office Buildings and OtherTotal Office Buildings and Other N/A
 N/A
 90.0% 94.2% 1.1%Total Office Buildings and Other N/A
 N/A
 94.9% 84.0% 0.8% 
                     
Total Unencumbered Consolidated PortfolioTotal Unencumbered Consolidated Portfolio $339
 $345
 92.2% 93.3% 100.0%Total Unencumbered Consolidated Portfolio $311
 $316
 89.5% 90.3% 100.0% 
(1)Represents same-center sales per square foot for mall tenants 10,000 square feet or less for stabilized malls.
(2)Operating metrics are included for unencumbered operating properties and do not include sales or occupancy of unencumbered outparcels.parcels.
(3)
Our consolidated unencumbered properties generated approximately 58.4%26.8% of total consolidated NOI of $418,506,986 259,353 (which excludes NOI related to dispositions) for the ninesix months ended SeptemberJune 30, 20182019.
(4)NOI is derived from unencumbered portions of Tier One properties, including outparcels, anchors and former anchors that have been redeveloped, that are otherwise secured by a loan.
Equity
During the ninesix months ended SeptemberJune 30, 2018,2019, we paid dividends of $136.9$48.4 million to holders of CBL's common stock and preferred stock, as well as $27.2$11.7 million in distributions to the noncontrolling interest investors in the Operating Partnership and other consolidated subsidiaries. The Operating Partnership paid distributions of $33.7$22.4 million and $121.6$32.0 million on the preferred units and common units, respectively, as well as distributions of $8.8$5.7 million to the noncontrolling interests in other consolidated subsidiaries.

The following table represents our common stock dividend activity for the nine months ended September 30, 2018:
PeriodDividend AmountDeclaration DateDate Paid
First Quarter$0.20February 22, 2018April 17, 2018
Second Quarter$0.20May 31, 2018July 16, 2018
Third Quarter$0.20August 24, 2018October 16, 2018
Future dividends payable will be determined by our Board of Directors based upon circumstances at the time of declaration. The dividend will has beenwas reduced to an annualized rate of $0.30 per share beginning with the dividend payable in January 2019 from the prior annualized rate of $0.80 per share. As previously noted, under the terms of the class action settlement agreement (see Note 12 to the condensed consolidated financial statements), we will not pay any dividends to holders of our common shares payable in the third and fourth quarters of 2019. The dividend reduction will preserve an estimated $100 million of cash on an annual basissettlement agreement does not restrict our ability to ensure we have ample liquidity for redevelopment activity and debt reduction. Our dividend payout ratio,declare dividends payable in relation to FFO, as adjusted, per diluted common share, was 49.0% for the nine months ended September 30, 2018. See "Non-GAAP Measure - Funds from Operations" below for additional information concerning the calculation of FFO, as adjusted, per diluted common share.2020 or in subsequent years.

As a publicly traded company, and as a subsidiary of a publicly traded company, we previously have access toaccessed capital through both the public equity and debt markets. We currently have a shelf registration statement on file with the SEC authorizing us to publicly issue unspecified amounts of senior and/or subordinated debt securities, shares of preferred stock (or depositary shares representing fractional interests therein), shares of common stock, warrants or rights to purchase any of the foregoing securities, and units consisting of two or more of these classes or series of securities and limited guarantees of debt securities issued by the Operating Partnership. Pursuant to theThis shelf registration statement also authorized the Operating Partnership is also authorized to publicly issue unsubordinated debt securities. There isThis shelf registration statement was due to expire in July 2021.  However, the Company no limitlonger qualifies as a well-known seasoned issuer under SEC rules, and we therefore are unable to the offering price or number of securities that we may issue underuse this shelf registration statement.registration.
Debt-To-Total Market Capitalization
Our strategy is to maintain a conservative debt-to-total-markettotal-market capitalization ratio in order to enhance our access to the broadest rangeas of capital markets, both public and private. Based on our share of total consolidated and unconsolidated debt and the market value of equity, our debt-to-total-market capitalization (debt plus market value of

equity) ratio was 76.7% at SeptemberJune 30, 2018, compared to 67.4% at September 30, 2017. The increase in the debt-to-total-market capitalization ratio is primarily due to a decrease in CBL's stock price to $3.99 at September 28, 2018 from $8.39 at September 29, 2017. Our debt-to-total-market capitalization ratio at September 30, 20182019 was computed as follows (in thousands, except stock prices): 
Shares
Outstanding		 
Stock Price (1)
 ValueShares
Outstanding		 
Stock Price (1)
 Value
Common stock and operating partnership units199,430
 $3.99
 $795,726
200,230
 $1.04
 $208,239
7.375% Series D Cumulative Redeemable Preferred Stock1,815
 250.00
 453,750
1,815
 250.00
 453,750
6.625% Series E Cumulative Redeemable Preferred Stock690
 250.00
 172,500
690
 250.00
 172,500
Total market equity 
  
 1,421,976
 
  
 834,489
Company’s share of total debt, excluding unamortized deferred financing costs 
  
 4,686,434
 
  
 4,416,058
Total market capitalization 
  
 $6,108,410
 
  
 $5,250,547
Debt-to-total-market capitalization ratio 
  
 76.7%
(1)Stock price for common stock and Operating Partnership units equals the closing price of CBL's common stock on SeptemberJune 28, 2018.2019. The stock prices for the preferred stock represent the liquidation preference of each respective series of preferred stock.
Capital Expenditures
Deferred maintenance expenditures are generally billed to tenants as CAM expense, and most are recovered over a 5 to 15-year period. Renovation expenditures are primarily for remodeling and upgrades of malls, of which a portion is recovered from tenants over a 5 to 15-year period.  We recover these costs through fixed amounts with annual increases or pro rata cost reimbursements based on the tenant’s occupied space.
The following table, which excludes expenditures for developments, redevelopments and expansions, summarizes these capital expenditures, including our share of unconsolidated affiliates' capital expenditures, for the three and ninesix month periods ended SeptemberJune 30, 20182019 compared to the same periods in 20172018 (in thousands):
Three Months Ended
September 30,		 Nine Months Ended
September 30,		Three Months Ended
June 30,		 Six Months Ended
June 30,
2018 2017 2018 20172019 2018 2019 2018
Tenant allowances (1)
$6,978
 $9,658
 $35,199
 $29,774
$8,796
 $13,097
 $11,050
 $28,221
              
Renovations—
 5,190
 563
 9,255
—
 —
 —
 563
              
Deferred maintenance:              
Parking lot and parking lot lighting206
 4,060
 871
 8,321
126
 321
 214
 665
Roof repairs and replacements270
 1,544
 3,694
 4,607
2,612
 1,799
 2,674
 3,424
Other capital expenditures5,255
 5,616
 15,035
 15,833
5,898
 3,902
 9,484
 9,780
Total deferred maintenance5,731
 11,220
 19,600
 28,761
8,636
 6,022
 12,372
 13,869
              
Capitalized overhead832
 1,370
 4,123
 5,661
425
 1,872
 1,372
 3,291
              
Capitalized interest1,198
 452
 2,736
 1,676
619
 951
 1,182
 1,538
              
Total capital expenditures$14,739
 $27,890
 $62,221
 $75,127
$18,476
 $21,942
 $25,976
 $47,482
(1)Tenant allowances primarily relate to new leases. Tenant allowances related to renewal leases were not material for the periods presented.
Our total investment in renovations that are scheduled for 2018 is projected to be $9.6 million, which includes floor renovations, as well as other eco-friendly green renovations.
Annual capital expenditures budgets are prepared for each of our properties that are intended to provide for all necessary recurring and non-recurring capital expenditures. We believe that property operating cash flows, which include reimbursements from tenants for certain expenses, will provide the necessary funding for these expenditures.

Developments, Expansions and Redevelopments
The following tables summarize our development, expansion and redevelopment projects as of SeptemberJune 30, 2018.2019.
Properties Opened During the NineSix Months Ended SeptemberJune 30, 20182019
(Dollars in thousands)
   CBL's Share of    CBL's Share of 
Property Location CBL
Ownership
Interest		 Total
Project
Square
Feet		 
Total
Cost (1)
 
Cost to
Date (2)
 
2018 YTD
Cost
 

Opening
Date
 Initial
Unleveraged
Yield		 Location CBL
Ownership
Interest		 Total
Project
Square
Feet		 
Total
Cost (1)
 
Cost to
Date (2)
 
2019 YTD
Cost
 

Opening
Date
 Initial
Unleveraged
Yield
Mall Expansion:         
Parkdale Mall - Restaurant Addition Beaumont, TX 100% 4,700
 $1,315
 $1,409
 $266
 Feb-18/
Mar-18		 10.4%
         
Other - Outparcel Development:                  
EastGate Mall - CubeSmart
Self-storage (3) (4)
 Cincinnati, OH 50% 93,501
 4,514
 3,234
 2,380
 Sep-18 9.9%
Laurel Park Place - Panera Bread (3)
 Livonia, MI 100% 4,500
 1,772
 1,592
 351
 May-18 9.7%
 98,001
 6,286
 4,826
 2,731
 
         
Total Properties Opened 102,701
 $7,601
 $6,235
 $2,997
 
Mid Rivers Mall - CubeSmart Self-
storage (3) (4)
 St. Peters, MO 50% 93,540
 $4,122
 $3,646
 $973
 Jan-19 9.0%
                  
(1) Total Cost is presented net of reimbursements to be received.(1) Total Cost is presented net of reimbursements to be received.     (1) Total Cost is presented net of reimbursements to be received.
(2) Cost to Date does not reflect reimbursements until they are received.(2) Cost to Date does not reflect reimbursements until they are received.     (2) Cost to Date does not reflect reimbursements until they are received.
(3) Outparcel development adjacent to the mall.(3) Outparcel development adjacent to the mall.     (3) Outparcel development adjacent to the mall.
(4) Yield is based on the expected yield of the stabilized project.


We opened our firstsecond self-storage facility in late September.January. This joint venture project is located adjacent to EastGateMid Rivers Mall. We contributed land as our share of equity which limited the amount of cash investment required.


Redevelopments Completed During the NineSix Months Ended SeptemberJune 30, 20182019
(Dollars in thousands)
   CBL's Share of    CBL's Share of 
Property Location CBL
Ownership
Interest		 Total
Project
Square
Feet		 
Total
Cost (1)
 
Cost to
Date (2)
 
2018 YTD
Cost
 

Opening
Date
 Initial
Unleveraged
Yield		 Location CBL
Ownership
Interest		 Total
Project
Square
Feet		 
Total
Cost (1)
 
Cost to
Date (2)
 
2019 YTD
Cost
 

Opening
Date
 Initial
Unleveraged
Yield
Mall Redevelopments:                  
East Towne Mall - Flix Brewhouse Madison, WI 100% 40,795
 $9,966
 $9,742
 $3,869
 Jul-18 8.4%
Frontier Mall - Sports Authority Redevelopment (Planet Fitness) Cheyenne, WY 100% 24,750
 1,385
 901
 679
 Feb-18 29.8%
York Galleria - Partial JC Penney Redevelopment (Marshalls) York, PA 100% 21,026
 2,870
 2,408
 1,930
 Apr-18 11.0%
Dakota Square Mall - HomeGoods Minot, ND 100% 28,406
 $2,478
 $2,292
 $1,314
 Apr-19 14.4%
East Towne Mall - Portillo's Madison, WI 100% 9,000
 2,956
 2,487
 71
 Feb-19 8.0%
Friendly Center - O2 Fitness Greensboro, NC 50% 27,048
 2,285
 1,694
 287
 Apr-19 10.3%
Hanes Mall - Dave & Buster's Winston-Salem, NC 100% 44,922
 5,932
 2,289
 144
 May-19 11.0%
Northgate Mall - Sears Auto Center Redevelopment (Aubrey's/Panda Express) Chattanooga, TN 100% 10,000
 1,797
 528
 15
 Feb-19 7.6%
Parkdale Mall - Macy's Redevelopment (Dick's Sporting Goods/Five Below/HomeGoods) (3)
 Beaumont, TX 100% 86,136
 20,899
 17,618
 11,139
 May-19 6.4%
Volusia Mall - Sears Auto Center Redevelopment (Bonefish Grill/Metro Diner) Daytona Beach, FL 100% 23,341
 9,795
 5,505
 91
 Apr-19 8.0%
Total Redevelopments Completed 86,571
 $14,221
 $13,051
 $6,478
  228,853
 $46,142
 $32,413
 $13,061
 
                  
(1) Total Cost is presented net of reimbursements to be received.(1) Total Cost is presented net of reimbursements to be received.     (1) Total Cost is presented net of reimbursements to be received.
(2) Cost to Date does not reflect reimbursements until they are received.(2) Cost to Date does not reflect reimbursements until they are received.     (2) Cost to Date does not reflect reimbursements until they are received.
(3) The return reflected represents a pro forma incremental return as Total Cost excludes the cost related to the acquisition of the Macy's building in 2017.(3) The return reflected represents a pro forma incremental return as Total Cost excludes the cost related to the acquisition of the Macy's building in 2017.


Properties Under DevelopmentRedevelopment at SeptemberJune 30, 20182019
(Dollars in thousands)

        CBL's Share of    
Property Location CBL
Ownership
Interest		 Total
Project
Square
Feet		 
Total
Cost (1)
 
Cost to
Date (2)
 
2018 YTD
Cost
 Expected
Opening
Date		 Initial
Unleveraged
Yield
Other Developments:                
Mid Rivers Mall - CubeSmart
Self-storage (3) (4)
 St. Peters, MO 50% 93,540
 $4,122
 $1,632
 $1,632
 Dec-18 9.0%
The Shoppes at Eagle Point (5)
 Cookeville, TN 50% 233,696
 45,541
 44,484
 24,151
 Aug-18/Nov-18 8.1%
      327,236
 49,663
 46,116
 25,783
    
                 
Mall Redevelopments:                
Brookfield Square - Sears Redevelopment (Whirlyball/
Marcus Theatres) (6)
 Brookfield, WI 100% 126,710
 26,717
 11,658
 11,072
 Summer-19 10.7%
Eastland Mall - JC Penney Redevelopment (H&M/Outback/Planet Fitness) Bloomington, IL 100% 52,827
 10,999
 6,831
 6,339
 Fall-18 6.3%
East Towne Mall - Portillo's Madison, WI 100% 9,000
 2,956
 2,405
 1,884
 Winter-18 8.0%
Friendly Center - O2 Fitness Greensboro, NC 50% 27,048
 2,285
 1,397
 1,281
 Winter-18 10.3%
Hanes Mall - Dave & Buster's Winston-Salem, NC 100% 44,922
 5,963
 1,854
 1,657
 Spring-19 11.0%
Jefferson Mall - Macy's Redevelopment (Round 1) Louisville, KY 100% 50,070
 9,392
 5,270
 4,192
 Nov-18 6.9%
Northgate Mall - Sears Auto Center Redevelopment (Aubrey's/Panda Express) Chattanooga, TN 100% 10,000
 1,797
 427
 247
 Winter-18 7.6%
Parkdale Mall - Macy's Redevelopment (Dick's Sporting Goods/Five Below/HomeGoods) (6)
 Beaumont, TX 100% 86,136
 20,899
 2,489
 1,967
 Spring-19 6.4%
Volusia Mall - Sears Auto Center Redevelopment (Bonefish Grill/Metro Diner) Daytona Beach, FL 100% 23,341
 9,635
 5,090
 3,963
 Winter-18 8.0%
      430,054
 90,643
 37,421
 32,602
    
                 
Total Properties Under Development   757,290
 $140,306
 $83,537
 $58,385
    
                 
(1) Total Cost is presented net of reimbursements to be received.
(2) Cost to Date does not reflect reimbursements until they are received.
(3) Yield is based on the expected yield of the stabilized project.
(4) Outparcel development adjacent to the mall.
(5) We will fund 100% of the required equity contribution so costs in the above table are shown at 100%. A portion of the community center project will be funded through a construction loan with a total borrowing capacity of $36,400.
(6) The return reflected represents a pro forma incremental return as Total Cost excludes the cost related to the acquisition of the Sears (Brookfield) and Macy's (Parkdale)buildings in 2017.
        CBL's Share of    
Property Location CBL
Ownership
Interest		 Total
Project
Square
Feet		 
Total
Cost (1)
 
Cost to
Date (2)
 
2019 YTD
Cost
 Expected
Opening
Date		 Initial
Unleveraged
Yield
Mall Redevelopments:                
Brookfield Square - Sears Redevelopment (Whirlyball/Marcus Theaters) (3)
 Brookfield, WI 100% 126,710
 $26,627
 $18,299
 $5,128
 Q3/Q4 '19 10.7%
CherryVale Mall - Sears Redevelopment (Tilt) Rockford, IL 100% 114,118
 3,508
 1,540
 1,540
 Q2 '20 8.3%
Dakota Square Mall - Herberger's Redevelopment (Ross/Retail Shops/T-Mobile) Minot, ND 100% 30,096
 6,410
 2,192
 2,049
 Q1 '20 7.2%
Hamilton Place - Sears Redevelopment (Aloft/Cheesecake Factory/Dick's Sporting Goods/Dave & Buster's/Office) (3)
 Chattanooga, TN 90% 193,083
 32,585
 14,652
 5,437
 Q2/Q3 '20 7.6%
Laurel Park Place - Carson's Redevelopment (Dunham's Sports) Livonia, MI 100% 45,000
 3,886
 546
 525
 Q4 '19 5.9%
Mall del Norte - Forever 21 Redevelopment (Main Event) Laredo, TX 100% 81,242
 10,514
 2,910
 2,865
 Q3 '19/Q2 '20 9.3%
Total Properties Under Redevelopment   590,249
 $83,530
 $40,139
 $17,544
    
                 
(1) Total Cost is presented net of reimbursements to be received.
(2) Cost to Date does not reflect reimbursements until they are received.
(3) The return reflected represents a pro forma incremental return as Total Cost excludes the cost related to the acquisition of the Sears (Brookfield Square and Hamilton Place) buildings in 2017.



Shadow Pipeline of Properties Under Development at June 30, 2019
(Dollars in thousands)
PropertyLocation
CBL
Ownership
Interest
Total
Project
Square
Feet
CBL's Share of
Estimated Total
Cost (1)
Expected
Opening
Date
Initial
Unleveraged
Yield
Other - Outparcel Development:
Parkdale Mall - Self-storage (2)
Beaumont, TX50%68,000 - 70,000$4,000 - $5,000Q1 '2010.0% - 11.0%
(1) Total Cost is presented net of reimbursements to be received.
(2) Yield is based on expected unleveraged return once project stabilizes.
Construction is in progress and is expected to be completed in the fall of 2019 on the first phase of redevelopment of the former Sears building at Brookfield Square, which includes new dining and entertainment options such as the BistroPlexMarcus Theater's Movie Tavern dine-in movie experience, from Marcus Theaters and Whirlyball entertainment center. In July, we completedcenter and Outback Steakhouse. Uncle Julio’s has already opened on a pad in the sale of a portion offormer Sears parking lot and construction has commenced on the Sears parcel to the city for the development of anew city-owned hotel and convention center.center, which will connect to our center through a new landscaped walkway. We are also adding a boutique fitness studio and medical office as part of the redevelopment. Construction is progressing on the hotel commenced in October.Sears redevelopment at Hamilton Place. The project includes Dave & Busters, Aloft Hotel, Dick’s Sporting Goods, additional restaurants and office space - all joining Cheesecake Factory, which opened last December
Except for the projects presented above, we do not have any other material capital commitments as of SeptemberJune 30, 2018.2019.    

Off-Balance Sheet Arrangements
Unconsolidated Affiliates
We have ownership interests in 1922 unconsolidated affiliates as of SeptemberJune 30, 20182019 that are described in Note 67 to the condensed consolidated financial statements. The unconsolidated affiliates are accounted for using the equity method of accounting and are reflected in the condensed consolidated balance sheets as investments in unconsolidated affiliates.  
The following are circumstances when we may consider entering into a joint venture with a third party:
Third parties may approach us with opportunities in which they have obtained land and performed some pre-development activities, but they may not have sufficient access to the capital resources or the development and leasing expertise to bring the project to fruition. We enter into such arrangements when we determine such a project is viable and we can achieve a satisfactory return on our investment. We typically earn development fees from the joint venture and provide management and leasing services to the property for a fee once the property is placed in operation.
We determine that we may have the opportunity to capitalize on the value we have created in a property by selling an interest in the property to a third party. This provides us with an additional source of capital that can be used to develop or acquire additional real estate assets that we believe will provide greater potential for growth. When we retain an interest in an asset rather than selling a 100% interest, it is typically because this allows us to continue to manage the property, which provides us the ability to earn fees for management, leasing, development and financing services provided to the joint venture.
Guarantees
We may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on our investment in the joint venture. We may receive a fee from the joint venture for providing the guaranty. Additionally, when we issue a guaranty, the terms of the joint venture agreement typically provide that we may receive indemnification from the joint venture or have the ability to increase our ownership interest.
See Note 1112 to the condensed consolidated statements for information related to our guarantees of unconsolidated affiliates' debt as of SeptemberJune 30, 20182019 and December 31, 2017.2018.
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgment about the effect of matters that are inherently uncertain and that may change in subsequent periods. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our Annual Report on Form 10-K for the year ended December 31, 20172018 contains a discussion of our critical accounting policies and estimates in the Management's Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes to these policies and estimates during the ninesix months ended SeptemberJune 30, 2018.2019. Our significant accounting policies are disclosed in Note 2 to the consolidated financial statements included in our Annual Report on Form 10‑K for the year ended December 31, 2017.2018.
Recent Accounting Pronouncements
See Note 2 to the condensed consolidated financial statements for information on recently issued accounting pronouncements.

Impact of Inflation and Deflation
Deflation can result in a decline in general price levels, often caused by a decrease in the supply of money or credit.  The predominant effects of deflation are high unemployment, credit contraction and weakened consumer demand.  Restricted lending practices could impact our ability to obtain financings or refinancings for our properties and our tenants’ ability to obtain credit.  Decreases in consumer demand can have a direct impact on our tenants and the rents we receive.
During inflationary periods, substantially all of our tenant leases contain provisions designed to mitigate the impact of inflation.  These provisions include clauses enabling us to receive percentage rent based on tenants' gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases.  In addition, many of the leases are for terms of less than 10 years, which may provide us the opportunity to replace existing leases with new leases at higher base and/or percentage rent if rents of the existing leases are below the then existing market rate.  Most of the leases require the tenants to pay a fixed amount, subject to annual increases, for their share of operating expenses, including CAM, real estate taxes, insurance and certain capital expenditures, which reduces our exposure to increases in costs and operating expenses resulting from inflation.
Non-GAAP Measure
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. 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, 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. Our method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
We believe that FFO provides an additional indicator of the operating performance of our 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 real estate assets have historically risen or fallen with market conditions, we believe that FFO, which excludes historical cost depreciation and amortization, enhances investors’ understanding of our operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of our properties and interest rates, but also by our capital structure.
We present both FFO allocable to Operating Partnership common unitholders and FFO allocable to common shareholders, as we believe that both are useful performance measures.  We believe FFO allocable to Operating Partnership common unitholders is a useful performance measure since we conduct substantially all of our business through our Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in our Operating Partnership.  We believe FFO allocable to common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income (loss) attributable to common shareholders.
In our reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders that is presented below, we make an adjustment to add back noncontrolling interest in income (loss) of our Operating Partnership in order to arrive at FFO of the Operating Partnership common unitholders.  We then apply a percentage to FFO of the Operating Partnership common unitholders to arrive at FFO allocable to 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 our 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 significant items from the applicable periods. Please refer to

to the reconciliation of net income (loss) attributable to common shareholders to FFO allocable to Operating Partnership common unitholders below for a description of these adjustments.
FFO of the Operating Partnership decreased 24.7%25.6% to $77.4$68.5 million for the three months ended SeptemberJune 30, 20182019 as compared to $102.9$92.1 million for the prior-year period, and decreased 22.4%35.7% to $252.5$112.6 million for the ninesix months ended SeptemberJune 30, 20182019 as compared to $325.5$175.0 million for the prior-year period. Excluding the adjustments noted below, FFO of the Operating Partnership, as adjusted, decreased 19.7%26.1% for the three months ended SeptemberJune 30, 20182019 to $79.2$68.5 million compared to $98.7$92.8 million for the same period in 2017,2018, and decreased 15.1%26.9% for the six months ended June 30, 2019 to $255.8$129.1 million compared to $176.6 million for the nine months ended September 30, 2018 as compared to $301.4 million for the prior-year period.same period in 2018. The decrease in FFO, as adjusted, was primarily driven by lower property-level NOI, resulting from lower occupancy and tenant bankruptcies, dilution from asset sales higher net interest expense and higher general and administrative expense, primarilyexpenses resulting from legal and third party fees related to one-time expense from the retirement of our Chief Operating Officer. These increases were partially offset by a decline in abandoned projects costs as comparednew secured term loan and legal fees related to the prior-year period.litigation.
The reconciliation of net income (loss)loss attributable to common shareholders to FFO allocable to Operating Partnership common unitholders is as follows (in thousands, except per share data):
 Three Months Ended
September 30,		 Nine Months Ended
September 30,
 2018 2017 2018 2017
Net income (loss) attributable to common shareholders$(12,590) $(2,258) $(57,930) $50,807
Noncontrolling interest in income (loss) of Operating Partnership(1,628) (81) (8,978) 8,702
Depreciation and amortization expense of:       
Consolidated properties71,945
 71,732
 217,261
 225,461
Unconsolidated affiliates10,438
 9,633
 31,177
 28,533
   Non-real estate assets(910) (934) (2,748) (2,590)
Noncontrolling interests' share of depreciation and amortization(2,136) (2,170) (6,424) (6,791)
Loss on impairment, net of taxes14,600
 24,935
 84,644
 70,185
Loss on impairment of unconsolidated affiliates1,022
 —
 1,022
 —
(Gain) loss on depreciable property, net of taxes and noncontrolling interests' share(3,307) 1,995
 (5,543) (48,761)
FFO allocable to Operating Partnership common unitholders77,434
 102,852
 252,481
 325,546
Litigation expenses (1)
—
 17
 —
 69
Nonrecurring professional fees reimbursement (1)
—
 —
 —
 (919)
(Gain) loss on investments, net of taxes (2)
—
 354
 (287) 6,197
Non-cash default interest expense (3)
1,784
 1,904
 3,616
 4,398
Gain on extinguishment of debt, net of noncontrolling interests' share (4)
—
 (6,452) —
 (33,902)
FFO allocable to Operating Partnership common unitholders, as adjusted$79,218
 $98,675
 $255,810
 $301,389
        
FFO per diluted share$0.39
 $0.52
 $1.26
 $1.63
        
FFO, as adjusted, per diluted share$0.40
 $0.50
 $1.28
 $1.51
        
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted199,432
 199,321
 199,630
 199,325
(1) Litigation expenses are included in general and administrative expense in the condensed consolidated statements of operations. Nonrecurring professional fees reimbursement is included in interest and other income in the condensed consolidated statements of operations.
(2) The nine months ended September 30, 2018 also includes a gain on investment related to the land we contributed to the Self Storage at Mid Rivers 50/50 joint venture. The three months and nine months ended September 30, 2017 represents a loss on investment related to the write down of our 25% interest in River Ridge Mall based on the contract price to sell such interest to our joint venture partner. The sale closed in August 2017.
(3) The three months and nine months ended September 30, 2018 includes default interest expense related to Acadiana Mall and Cary Town Center. The three months and nine months ended September 30, 2017 includes default interest expense related to Acadiana Mall and Wausau Center. The nine months ended September 30, 2017 also includes default interest expense related to Chesterfield Mall and Midland Mall.


(4) The three months ended September 30, 2017 primarily represents a $6,851 gain on extinguishment of debt related to the non-recourse loan secured by Wausau Center, which was conveyed to the lender in the third quarter of 2017, which was partially offset by a loss on extinguishment of debt related to a prepayment fee of $371 related to the early retirement of a mortgage loan. Additionally, the nine months ended September 30, 2017 also includes a gain on extinguishment of debt related to the non-recourse loan secured by Chesterfield Mall, which was conveyed to the lender in the second quarter of 2017, a loss on extinguishment of debt related to a prepayment fee on the early retirement of the loans secured by The Outlet Shoppes at Oklahoma City, which was sold in the second quarter of 2017, and a gain on extinguishment of debt related to the non-recourse loan secured by Midland Mall, which was conveyed to the lender in the first quarter of 2017.
 Three Months Ended
June 30,		 Six Months Ended
June 30,
 2019 2018 2019 2018
Net loss attributable to common shareholders$(35,400) $(35,020) $(85,599) $(45,340)
Noncontrolling interest in loss of Operating Partnership(5,454) (5,685) (13,212) (7,350)
Depreciation and amortization expense of:       
Consolidated properties64,478
 73,566
 134,270
 145,316
Unconsolidated affiliates11,462
 10,338
 22,128
 20,739
   Non-real estate assets(902) (917) (1,799) (1,838)
Noncontrolling interests' share of depreciation and amortization in other consolidated subsidiaries(2,648) (2,122) (4,805) (4,288)
Loss on impairment41,608
 51,983
 66,433
 70,044
Gain on depreciable property, net of taxes(4,599) —
 (4,841) (2,236)
FFO allocable to Operating Partnership common unitholders68,545
 92,143
 112,575
 175,047
Litigation settlement, net of taxes (1)
—
 —
 87,667
 —
Gain on investments, net of taxes (2)
—
 (287) —
 (287)
Non-cash default interest expense (3)
—
 916
 542
 1,832
Gain on extinguishment of debt (4)
—
 —
 (71,722) —
FFO allocable to Operating Partnership common unitholders, as adjusted$68,545
 $92,772
 $129,062
 $176,592
        
FFO per diluted share$0.34
 $0.46
 $0.56
 $0.88
        
FFO, as adjusted, per diluted share$0.34
 $0.46
 $0.64
 $0.88
        
Weighted-average common and potential dilutive common shares outstanding with Operating Partnership units fully converted200,231
 199,767
 200,122
 199,731
        
(1) The six months ended June 30, 2019 is comprised of the accrued maximum expense related to the proposed settlement of a class action lawsuit.
(2) The three months and six months ended June 30, 2018 includes a gain on investment related to the land contributed by the Company to the Self Storage at Mid Rivers 50/50 joint venture.
(3) The six months ended June 30, 2019 includes default interest expense related to Acadiana Mall and Cary Towne Center. The three months and six months ended June 30, 2018 includes default interest expense related to Acadiana Mall.
(4) The six months ended June 30, 2019 includes a gain on extinguishment of debt related to the non-recourse loan secured by Acadiana Mall, which was conveyed to the lender in the first quarter of 2019, and a gain on extinguishment of debt related to the non-recourse loan secured by Cary Towne Center, which was sold in the first quarter of 2019.




The reconciliation of diluted EPS to FFO per diluted share is as follows (in thousands):
Three Months Ended
September 30,		 Nine Months Ended
September 30,		Three Months Ended
June 30,		 Six Months Ended
June 30,
2018 2017 2018 20172019 2018 2019 2018
Diluted EPS attributable to common shareholders$(0.07) $(0.01) $(0.34) $0.30
$(0.20) $(0.20) $(0.49) $(0.26)
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 interests0.40
 0.40
 1.20
 1.23
0.36
 0.40
 0.75
 0.80
Loss on impairment, net of taxes0.08
 0.13
 0.43
 0.35
Gain on depreciable property, net of taxes and noncontrolling interests' share(0.02) —
 (0.03) (0.25)
Loss on impairment0.20
 0.26
 0.32
 0.35
Gain on depreciable property, net of taxes(0.02) —
 (0.02) (0.01)
FFO per diluted share$0.39
 $0.52
 $1.26
 $1.63
$0.34
 $0.46
 $0.56
 $0.88
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 (in thousands):
Three Months Ended
September 30,		 Nine Months Ended
September 30,		Three Months Ended
June 30,		 Six Months Ended
June 30,
2018 2017 2018 20172019 2018 2019 2018
FFO allocable to Operating Partnership common unitholders$77,434
 $102,852
 $252,481
 $325,546
$68,545
 $92,143
 $112,575
 $175,047
Percentage allocable to common shareholders (1)
86.58% 85.84% 86.37% 85.82%86.64% 86.43% 86.63% 86.27%
FFO allocable to common shareholders$67,042
 $88,288
 $218,068
 $279,384
$59,387
 $79,639
 $97,524
 $151,013
              
FFO allocable to Operating Partnership common unitholders, as adjusted$79,218
 $98,675
 $255,810
 $301,389
$68,545
 $92,772
 $129,062
 $176,592
Percentage allocable to common shareholders (1)
86.58% 85.84% 86.37% 85.82%86.64% 86.43% 86.63% 86.27%
FFO allocable to common shareholders, as adjusted$68,587
 $84,703
 $220,943
 $258,652
$59,387
 $80,183
 $111,806
 $152,346
(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 held by noncontrolling interests during the period.
ITEM 3:    Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risk exposures, including interest rate risk. The following discussion regarding our risk management activities includes forward-looking statements that involve risk and uncertainties.  Estimates of future performance and economic conditions are reflected assuming certain changes in interest rates.  Caution should be used in evaluating our overall market risk from the information presented below, as actual results may differ.  
Interest Rate Risk
Based on our proportionate share of consolidated and unconsolidated variable-rate debt at SeptemberJune 30, 2018,2019, a 0.5% increase or decrease in interest rates on variable-rate debt would decrease or increase annual cash flows by approximately $5.3$5.1 million and increase or decrease annual interest expense, after the effect of capitalized interest, by approximately $5.2$5.0 million.
Based on our proportionate share of total consolidated and unconsolidated debt at SeptemberJune 30, 2018,2019, a 0.5% increase in interest rates would decrease the fair value of debt by approximately $64.1$51.1 million, while a 0.5% decrease in interest rates would increase the fair value of debt by approximately $66.0$52.8 million. 

ITEM 4:    Controls and Procedures
Disclosure Controls and Procedures
As of the end of the period covered by this quarterly report, an evaluation was performed under the supervision of our Chief Executive Officer and Chief Financial Officer and with the participation of our management, of the effectiveness of the design and operation of the Company's and the Operating Partnership's disclosure controls and

procedures pursuant to Exchange Act Rule 13a-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's and the Operating Partnership's disclosure controls and procedures are effective to ensure that information that the Company and the Operating Partnership are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and to ensure that information we are required to disclose is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
In conjunction with the implementation of ASC 606, Revenue from Contracts with Customers842, Leases, which was adopted on January 1, 2018,2019, we modified some revenueof our processes around lease accounting. As a lessee, the guidance impacted the Company's condensed consolidated financial statements through the recognition processesof right-of-use ("ROU") assets and related control activities based oncorresponding lease liabilities for operating leases as of January 1, 2019. As a lessor, the five-step model providedguidance impacted the Company's condensed consolidated financial statements in regard to the narrowed definition of initial direct costs that can be capitalized, the change in the new revenue standard. We do not expectpresentation of rental revenues as one line item and the adoptionchange in reporting uncollectable operating lease receivables as a reduction of this guidance to have a material impact on our resultsrental revenues instead of operations as most of the Company's revenues are related to leasing which is not under the scope of ASC 606.property operating expense. There have been no other changes in the Company's or the Operating Partnership's internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


PART II - OTHER INFORMATION
 
ITEM 1:    Legal Proceedings
In April 2019, we entered into a settlement agreement and release with respect to the class action lawsuit filed on March 16, 2016 in the United States District Court for the Middle District of Florida by Wave Lengths Hair Salons of Florida, Inc. d/b/a Salon Adrian. The settlement agreement states that we are to set aside a common fund with a monetary and non-monetary value of $90.0 million to be disbursed to class members in accordance with an agreed-upon formula that is based upon aggregate damages of $60.0 million. Class members will be comprised of past and current tenants at certain of our shopping centers that we own or formerly owned during the class period, which will extend from January 1, 2011 through the date of court preliminary approval. Class members who are past tenants and make a claim will receive payment of their claims in cash. Class members who are current tenants will receive monthly credits against rents and future charges, beginning no earlier than January 1, 2020 and continuing for the following five years. Any amounts under the settlement allocated to tenants with outstanding amounts payable to us, including tenants which have declared bankruptcy or declare bankruptcy over the relevant period, will first be deducted from the amounts owed to us. All attorney’s fees and associated costs to be paid to class counsel (up to a maximum of $28.0 million), any incentive award to the class representative (up to a maximum of $50,000), and class administration costs (which are expected to not exceed $100,000), will be funded by the common fund, but must be approved by the court. Under the terms of the settlement agreement, we will not pay any dividends to holders of our common shares payable in the third and fourth quarters of 2019. The settlement agreement does not restrict our ability to declare dividends payable in 2020 or in subsequent years. We recorded an accrued liability and corresponding litigation settlement expense of $88,150 in the three months ended March 31, 2019 related to the settlement agreement.
We are currently involved in certain other litigation that arises in the ordinary course of business, most of which is expected to be covered by liability insurance. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on our liquidity, results of operations, business or financial condition.     
Securities Litigation
The Company and certain of its officers and directors have been named as defendants in three putative securities class action lawsuits (collectively, the “Securities Class Action Litigation”), each filed in the United States District Court for the Eastern District of Tennessee, on behalf of all persons who purchased or otherwise acquired the Company’s securities during a specified period of time.  The first such lawsuit, captioned Paskowitz v. CBL & Associates Properties, Inc., et al., 1:19-cv-00149-JRG-CHS, was filed on May 17, 2019, and asserts claims on behalf of persons or entities that purchased CBL securities between November 8, 2017 and March 26, 2019, inclusive.  The second such lawsuit, captioned Williams v. CBL & Associates Properties, Inc., et al., 1:19-cv-00181, was filed on June 21, 2019, and asserts claims on behalf of persons or entities that purchased CBL securities between April 29, 2016 and March 26, 2019, inclusive.  The third such lawsuit, captioned Merelles v. CBL & Associates Properties, Inc., et al., 1:19-CV-00193,

was filed on July 2, 2019, and asserts claims on behalf of persons or entities that purchased CBL securities between July 29, 2014 and March 26, 2019.  The Court consolidated these cases on July 17, 2019, under the caption In re CBL & Associates Properties, Inc. Securities Litigation, 1:19-cv-00149-JRG-CHS. After plaintiff Laurence Paskowitz voluntarily dismissed his case on July 25, 2019, the Court re-consolidated the two remaining cases under the caption In re CBL & Associates Properties, Inc. Securities Litigation, 1:19-cv-00181-JRG-CHS, on August 2, 2019. 
The complaints filed in the Securities Class Action Litigation allege violations of the securities laws, including, among other things, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s contingent liabilities, business, operations, and prospects during the periods of time specified above.  The plaintiffs seek compensatory damages and attorneys’ fees and costs, among other relief, but have not specified the amount of damages sought.  The outcome of these legal proceedings cannot be predicted with certainty.
Certain of the Company’s current and former directors and officers have been named as defendants in three shareholder derivative lawsuits (collectively, the “Derivative Litigation”).  On June 4, 2019, a shareholder filed a putative derivative complaint captioned Robert Garfield v. Stephen D. Lebovitz et al., 1:19-cv-01038-LPS, in the United States District Court for the District of Delaware (the “Garfield Derivative Action”), purportedly on behalf of the Company against certain of its officers and directors.  On June 24, 2019, another shareholder filed a putative derivative complaint captioned Robert Cohen v. Stephen D. Lebovitz et al., 1:19-cv-01185-LPS, also in the United States District Court for the District of Delaware (the “Cohen Derivative Action”), asserting substantially similar claims purportedly on behalf of the Company against similar defendants.  The Court consolidated the Garfield Derivative Action and the Cohen Derivative Action on July 17, 2019, under the caption In re CBL & Associates Properties, Inc. Derivative Litigation, 1:19-cv-01038-LPS, and on July 19, 2019, the parties jointly moved to stay the case pending resolution of an eventual motion to dismiss in the Securities Class Action Litigation.  On July 22, 2019, another shareholder filed a putative derivative complaint captioned Shebitz v. Lebovitz et al., 1:19-cv-00213, in the United States District Court for the Eastern District of Tennessee, asserting substantially similar claims purportedly on behalf of the Company against similar defendants. On July 17, 2019, the Court consolidated the Garfield Derivative Action and the Cohen Derivative Action under the caption In re CBL & Associates Properties, Inc. Derivative Litigation, 1:19-cv-01038-LPS.  On July 25, 2019, the Court stayed these two actions pending resolution of an eventual motion to dismiss in the related Securities Class Action Litigation.
The complaints filed in the Derivative Litigation allege, among other things, breaches of fiduciary duties, unjust enrichment, waste of corporate assets, and violations of the federal securities laws.  The factual allegations upon which these claims are based are similar to the factual allegations made in the Securities Class Action Litigation, described above.  The complaints filed in the Derivative Litigation seek, among other things, unspecified damages and restitution for the Company from the individual defendants, the payment of costs and attorneys’ fees, and that the Company be directed to reform certain governance and internal procedures.  The outcome of these legal proceedings cannot be predicted with certainty.
The Company's insurance carriers have been placed on notice of these matters.
ITEM 1A.    Risk Factors
In addition to the other information set forth in this report, you should carefully consider the risks that could materially affect our business, financial condition or results of operations that are discussed under the caption “Risk Factors” in Part I, Item1A of our Annual Report on Form 10-K for the year ended December 31, 2017.2018. There have been no material changes to suchrisk factors since the filing of our Annual Report.
ITEM 2:    Unregistered Sales of Equity Securities and Use of Proceeds
Period 
Total
Number
of Shares
Purchased (1)
 
Average
Price Paid
per
Share (2)
 
Total Number
of Shares
Purchased as
Part of a
Publicly
Announced
Plan
 
Approximate
Dollar Value
of Shares that
May Yet Be
Purchased
Under the
Plan
July 1 – 31, 2018 166
  $5.80
  —
  $—
 
August 1 - 31, 2018 744
  5.10
  —
  —
 
September 1 - 30, 2018 —
  —
  —
  —
 
Total 910
  $5.23
  —
  $—
 
(1)Represents shares surrendered to the Company by employees to satisfy federal and state income tax requirements related to the vesting of shares of restricted stock.
(2)
Represents the market value of the common stock on the vesting date for the shares of restricted stock, which was used to determine the number of shares required to be surrendered to satisfy income tax withholding requirements.

Operating Partnership Units
There is no established public trading market for the Operating Partnership’s common units and they are not registered under Section 12 of the Securities Exchange Act of 1934. Each limited partner in the Operating Partnership has the right to exchange all or a portion of its common units for shares of the Company’s common stock, or at the Company’s election, their cash equivalent.None.
ITEM 3:    Defaults Upon Senior Securities
None. 
ITEM 4:    Mine Safety Disclosures
Not applicable. 
ITEM 5:    Other Information
None.

ITEM 6:    Exhibits


INDEX TO EXHIBITS
 Exhibit
 Number
 Description
10.2.1331.1
 
Retirement and General Release Agreement, dated September 27, 2018, between the Company and Gus Stephas (1)
31.1
Certification pursuant to Securities Exchange Act Rule 13a-14(a) by the Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for CBL & Associates Properties,Properties, Inc.
31.2
 
Certification pursuant to Securities Exchange Act Rule 13a-14(a) by the Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for CBL & Associates Properties, Inc.
31.3
 
Certification pursuant to Securities Exchange Act Rule 13a-14(a) by the Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for CBL & Associates Limited Partnership
31.4
 
Certification pursuant to Securities Exchange Act Rule 13a-14(a) by the Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for CBL & Associates Limited Partnership
32.1
 
Certification pursuant to Securities Exchange Act Rule 13a-14(b) by the Chief Executive Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for CBL & Associates Properties, Inc.
32.2
 
Certification pursuant to Securities Exchange Act Rule 13a-14(b) by the Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for CBL & Associates Properties, Inc.
32.3
 
Certification pursuant to Securities Exchange Act Rule 13a-14(b) by the Chief Executive Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for CBL & Associates Limited Partnership
32.4
 
Certification pursuant to Securities Exchange Act Rule 13a-14(b) by the Chief Financial Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for CBL & Associates Limited Partnership
99.1
Combined Financial Statements of The Combined Guarantor Subsidiaries of CBL & Associates Limited Partnership
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. (Filed herewith.)
101.SCH Inline XBRL Taxonomy Extension Schema DocumentDocument. (Filed herewith.)
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase DocumentDocument. (Filed herewith.)
101.LAB Inline XBRL Taxonomy Extension Label Linkbase DocumentDocument. (Filed herewith.)
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase DocumentDocument. (Filed herewith.)
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase DocumentDocument. (Filed herewith.)
104Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*). (Filed herewith.)
(1) Incorporated by reference from the Company's Current Report on Form 8-K, dated September 27, 2018 and filed on October 3, 2018.* Commission File No. 1-12494 and 333-182515-01333-182515-01.


SIGNATURES






Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




CBL & ASSOCIATES PROPERTIES, INC.


/s/ Farzana Khaleel

Farzana Khaleel
Executive Vice President -
Chief Financial Officer and Treasurer
(Authorized Officer and Principal Financial Officer)






CBL & ASSOCIATES LIMITED PARTNERSHIP


By: CBL HOLDINGS I, INC., its general partner


/s/ Farzana Khaleel

Farzana Khaleel
Executive Vice President -
Chief Financial Officer and Treasurer
(Authorized Officer and Principal Financial Officer)




















Date: NovemberAugust 9, 20182019


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